December 20, 2010

Bits Bucket for December 20, 2010

Post off-topic ideas, links, and Craigslist finds here.




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419 Comments »

Comment by Zeus Matuze
2010-12-20 00:53:23

Somehow, gay combat soldier doesn’t sound right.

Kinda like senate ethics committee.

Comment by bill in Tampa
2010-12-20 04:50:00

Guess it will take some time getting used to. In my work environment since 2003 I started noticing for the first time several openly gays and lesbians. You know what? They don’t bite, I found out. They only want to do their jobs (surprise!). Only one gay was annoying to me, but I kindly made sure in those instances that I am wild for women and not at all interested in men, my competitors.

Comment by LehighValleyGuy
2010-12-20 08:08:25

You don’t have to look at other men as your competitors. We can also be co-conspirators.

 
 
Comment by Va Beyatch in Norfolk VA
2010-12-20 04:56:48

A year or two ago I was listening to a gay guy complain about the local area I live in and he said the local gay bars are already full of military people. That did surprise me, but triggered visions of that Village People song In the Navy. I do still believe the polarizing issues are just used to steer people away from larger, real issues that politicians ignore. It’s fun to watch the battle and troll, though.

Comment by combotechie
2010-12-20 05:55:34

“I do still believe the polarizing issues are just used to steer people away from larger, real issues that politicians ignore.”

Plus one to your post.

Comment by Overtaxed
2010-12-20 06:59:54

Couldn’t agree more. My favorite issue is abortion. That’s one of those that people just get crazy about, and, guess what? Nothing will ever come of it; it’s an issue that people continue to vote on, but it’s not really ever going to change.

The biggest change that could occur would be to outlaw abortion in this country. And then only middle class/wealthy could afford to go to another country and get an abortion; so we’d have more unwanted poor children. Is that a good thing?

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Comment by 2banana
2010-12-20 09:14:26

The biggest change that could occur would be to outlaw abortion in this country. And then only middle class/wealthy could afford to go to another country and get an abortion; so we’d have more unwanted poor children. Is that a good thing?

Right now in America you can have an abortion 1 sec before the natural delivery time - for any reason at all.

A perfectly viable child in every sense of the word.

Oh - a botched abortion that the baby is still alive but outside the womb? You can still kill it. Obama even voted for that.

Is that a good thing?

 
Comment by sfbubblebuyer
2010-12-20 10:24:47

Most of the pro-life people are against letting gay couples adopt those extra babies. Man, pro-lifers hate babies.

 
Comment by X-GSfixr
2010-12-20 15:18:13

“Right now in America you can have an abortion 1 second before the natural delivery time……..”

Yeah, and the “Abortion is Murder” crowd is mainly responsible for that. Because they won’t “compromise” their position. And it’s a good way to get the base stirred up. And “If you aren’t with us, you are against us”.

I could come up with a compromise that about 85% of the country would buy into, in about 15 minutes. Will the “Abortion is Murder” crowd buy in? Nope. Because they want to cram down their morals/ethics onto other people.

And my plan would require “government regulation/intervention”. But this would conflict with the typical Far-Right Republican view that”government needs to butt out. (The only anti-abortion people I’ve met are all die hard Republicans)

By the “Abortion is Murder” crowd’s definition, yeah, I guess you can say I support abortion. So, go ahead and try to shoot me in front of my family, like they did with George Tiller. Bring a lot of bullets.

 
Comment by ecofeco
2010-12-20 17:30:31

I’ve never one single women who wanted an abortion voluntarily. And I’ve met more than a hundred.

That pretty much sealed the deal that the issue exists strictly to divide people.

 
Comment by Happy2bHeard
2010-12-20 18:35:37

“I’ve never one single women who wanted an abortion voluntarily.”

Are you saying that the women you’ve met were forced to have abortions?

 
 
Comment by WT Economist
2010-12-20 07:21:04

Plus many.

These symbolic social issues are BS. Their purpose is just to distract people from 30 years of selling out the future which has no arrived.

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Comment by pdmseatac
2010-12-20 09:36:40

Don’t forget flag burning or failure to recite the pledge of allegiance, the two most serious threats facing our country today !

Comment by Ben Jones
2010-12-20 09:41:57
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Comment by Hwy50ina49Dodge
2010-12-20 11:06:37

from the comment section: ;-)

“I’m quiet happy here in Australia where we don’t have to put up with pledges, religion and all that other nonsense.”
phase52001 1 month ago

 
Comment by timmy
2010-12-20 15:57:07

The Real Pleadge of Allegiance:

I PLEDGE ALLEGIANCE
TO THE FLAG
OF GOLDMAN SACHS OF AMERICA
& TO THE FED
FOR WHICH IT STANDS
ONE NATION UNDER CONTROL
OF THE UNITED BANKERS OF AMERICA

 
Comment by ecofeco
2010-12-20 17:31:34

Yep.

 
 
Comment by mikey
2010-12-20 14:27:54

“Don’t forget flag burning or failure to recite the pledge of allegiance, the two most serious threats facing our country today !”

“Would you like some Freedom Fries with your Mikey D barebones burger special Mr un-employed J6pac?”

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Comment by ecofeco
2010-12-20 17:34:20

I’m lovin’ it!

 
 
 
 
Comment by evildoc
2010-12-20 06:00:34

—-Somehow, gay combat soldier doesn’t sound right.—-

Why?

Comment by exeter
2010-12-20 06:42:20

Why?

Ignorance.

Comment by Al
2010-12-20 09:43:55

Soldiers are supposed to be stern, solemn and reserved, not merry and cheerful.

Try homosexual soldier. Sounds fine then.

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Comment by Professor Bear
2010-12-20 10:06:58

“Hey, sailor!”

 
Comment by Sammy Schadenfreude
2010-12-20 17:13:52

“To the rear, march!” might take on a whole new meaning.

 
 
 
Comment by 2banana
2010-12-20 06:51:12

—-Somehow, gay combat soldier doesn’t sound right.—-

Why?

Go talk to a combat vet – who at one time was living 50 in a small open barrack/tent with two open toilets and two open showers to find out.

When he was living in a very high stress environment, raging hormones and no where to go.

The same reason you would never put 22 year old females in the same situation.

Comment by evildoc
2010-12-20 08:03:56

Israel, perhaps with best per-capita armed forces, seems to do ok with it

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Comment by 2banana
2010-12-20 09:17:49

Israel, perhaps with best per-capita armed forces, seems to do ok with it

May work in a small army stationed within its borders that gets to go home every night…

 
Comment by evildoc
2010-12-20 09:22:23

“may” work. Meaning, it has your permission to work?

 
Comment by Steve J
2010-12-20 09:43:01

I always thought the military should activly recruit lesbians.

 
Comment by holytrainwreck
2010-12-20 09:47:10

girl on girl action FTW!

 
Comment by Arizona Slim
2010-12-20 09:55:58

I always thought the military should activly recruit lesbians.

Agreed.

I’ve been of the mind that the lesbian work ethic could eliminate the federal deficit and pay off our national debt. They really do work *that* hard.

That’s why I like to hire them whenever I have a home repair or improvement project.

 
Comment by GrizzlyBear
2010-12-20 13:49:27

What is this FTW I keep seeing everywhere?

 
Comment by Carl Morris
2010-12-20 14:24:08

For The Win

 
Comment by potential buyer
2010-12-20 15:40:37

Ummm, it actually stands for f**k the world.

 
Comment by skroodle
2010-12-20 21:50:02

Its from the old Hollywood Squares with Peter Marshall & Paul Lynde

 
 
Comment by ahansen
2010-12-20 09:17:03

“…When he was living in a very high stress environment, raging hormones and no where to go….”

Pardon. Your proclivities are showing….

I lived with two gay combat vets-turned-cop, and they told me that when the mortar shells are flying over your bivouac, the only “raging” thing you have to deal with is nausea.

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Comment by Zeus Matuze
2010-12-20 15:39:27

“I lived with two gay combat vets-turned-cop..”

Can I purchase the video?

 
Comment by Exeter
2010-12-20 16:36:01

“Pardon. Your proclivities are showing…”

BINGO. And reality is always like that. The loudest mouths against something are in fact those that are first to engage in it.

 
Comment by SaladSD
2010-12-20 18:18:37

Yup, with a moniker like ‘2Banana” you gotta wonder.

 
Comment by Maltose
2010-12-21 09:45:01

LOL

 
 
 
Comment by In Colorado
2010-12-20 07:15:30

I guess because soldiers are supposed to be manly, John Wayne types.

Personally, I think you have to be nuts to join the military, but thats just my opinion.

Comment by whyoung
2010-12-20 07:45:24

Have none of you ever heard of the extremely macho subset within the gay male community? The body builder types… these guys take aspects of John Wayne style manliness to a whole new level.

The gay community is as diverse at the rest of society. It certainly does have some who probably fit each of the stereotypes we have, but the bottom line is who cares?

ALL adults - of any orientation - should be able to behave responsibly. That should be the criteria for fitness, not who you love.

When I was in college, I’d bring home all a bunch of “strays” for Thanksgiving, which usually included some gay friends. My now 89 year old mother surprised me, not only being welcoming and gracious, but telling affectionate and funny stories of the gay people she met while working in a bomber plant during world war 2.

And I am grateful for all who choose to serve.

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Comment by alpha-sloth
2010-12-20 11:15:13

Don’t forget the all-gay military unit in the ancient Greek city-state of Thebes, whose bravery and military prowess was legendary:

wikipedia
The Sacred Band of Thebes was a troop of picked soldiers, consisting of 150 age-structured male couples which formed the elite force of the Theban army in the 4th century BC.

Plutarch records that the Sacred Band was made up of male couples, the rationale being that lovers could fight more fiercely and cohesively than strangers with no ardent bonds.

The Sacred Band originally was formed of hand-picked men who were couples, each lover and beloved selected from the ranks of the existing Theban citizen-army. The pairs consisted of the older “heníochoi”, or charioteers, and the younger “parabátai”, or companions, all housed and trained at the city’s expense in order to fight as hoplites. During their early engagements, they were dispersed by Gorgidas throughout the front ranks of the Theban army in an attempt to bolster moral.

After the Theban general Pelopidas recaptured the acropolis of Thebes in 379 BC, he assumed command of the Sacred Band, in which he fought alongside his good friend Epaminondas. It was Pelopidas who formed these couples into a distinct unit: he “never separated or scattered them, but would stand [them with himself] in the brunt of battle, using them as one body.” They became, in effect, the “special forces” of Greek soldiery, and the forty years of their known existence (378–338 BC) marked the pre-eminence of Thebes as a military and political power in late-classical Greece.

 
 
Comment by MrBubble
2010-12-20 07:51:42

“I guess because soldiers are supposed to be manly, John Wayne types”

Not all gay guys drip around like Noel Coward. Check out Generation Kill and tell me if you’d have the balls to call Fruity Rudy “fruity” to his face.

Btw — cheers from down under where the in laws window washer and the bus driver own two houses each and my BIL is an absentee landlord losing money every month. Denial runs strong here…

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Comment by aNYCdj
2010-12-20 08:15:17

Q: What are the original lyrics to Tutti Frutti?

A: A wop bop a loo mop a good goddam, Tutti Frutti, good booty, if it don’t fit, don’t force it, you can grease it, make it easy.

 
Comment by Arizona Slim
2010-12-20 08:19:22

I’m in a neighborhood where the association president is a very proud veteran of the U.S. Marine Corps. And she’s just as proud of the fact that she’s a lesbian.

Well, she does a darn good job of being our neighborhood association prez. And I know I sure couldn’t handle that job. This isn’t the easiest nabe to preside over, after all.

Oh, I might mention that, whenever I go away, that lady and her wife watch my house.

 
Comment by edgewaterjohn
2010-12-20 09:39:29

So from that bit of lyrical trivia it appears that the person who originally wrote Tutti Frutti was either a banker or a politician.

 
Comment by In Colorado
2010-12-20 09:50:53

“Not all gay guys drip around like Noel Coward.”

Of course. I was just focusing on the stereotype.

 
 
 
Comment by Zeus Matuze
2010-12-20 15:37:21

Why?

…maybe because gay means happy.
“Good Morning, Adolph!!! Hope you enjoy this nicely polished bayonet!!!!”

“Gay” means “same polarity.”

Civil War is another one. Aren’t they mostly uncivil?

 
 
Comment by lint
2010-12-20 08:49:19

‘I didn’t think of Iraqis as humans,’ says U.S. soldier who raped 14-year-old girl before killing her and her family

An Iraq War veteran serving five life terms for raping and killing a 14-year-old Iraqi girl and killing her parents and sister says he didn’t think of Iraqi civilians as humans after being exposed to extreme warzone violence.

Steven Dale Green, a former 101st Airborne soldier, in his first interview since the 2006 killings, claimed that his crimes were fuelled in part by experiences in Iraq’s violent ‘Triangle of Death’ where two of his sergeants were gunned down.

He also cited a lack of leadership and help from the Army.

Comment by edgewaterjohn
2010-12-20 09:06:21

Wartime atrocities have been well documented during the past century. Yet, for some reason, the myth of a clean war endures here.

There were people who knew things like that were going to happen, but in 2002 the bipartisan rush to war proved irresistible to our nation. Woe be the career pol that voted against war back then. That chapter in American history should not be allowed to close so quickly - and this depression is no excuse.

Comment by GrizzlyBear
2010-12-20 13:19:17

When you listen to the gunners on the US helicopters in the video released by Wikileaks, it becomes all too clear how enthusiastic soldiers are about killing the “enemy.” They are just itching to cut people down, no matter who is on the other side of the barrel. It’s no wonder that there are some majorly f***ed up people coming back from Iraq and Afghanistan.

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Comment by nickpapageorgio
2010-12-20 14:13:42

You see a video without context, you then make the statement that all US Military Service Men and Women are itching to cut people down. You should be ashamed or yourself and embarrassed by your ignorance.

 
Comment by Carl Morris
2010-12-20 14:26:26

Video of almost any combat situation won’t look very flattering when viewed from comfort of home. Just be glad they’re willing to go and you don’t have to.

 
Comment by potential buyer
2010-12-20 16:01:06

I suspect some of them were f**ked up before they went in.

 
Comment by GrizzlyBear
2010-12-20 16:01:51

“You see a video without context, you then make the statement that all US Military Service Men and Women are itching to cut people down. You should be ashamed or yourself and embarrassed by your ignorance.”

Excuse me? Without context? Perhaps you should watch the video, leaked by a US soldier who was appalled at the behavior of his fellow men, before you make such foolish utterances. Let me guess- you’re one of those people who believes in “weppins of mash dishtrucshin.”

 
Comment by Exeter
2010-12-20 16:44:35

“You see a video without context, you then make the statement that all US Military Service Men and Women are itching to cut people down. You should be ashamed or yourself and embarrassed by your ignorance.”

You should be ashamed of yourself for remaining silent about the US Military Slaughter Machine…… hypocrite.

 
 
 
Comment by rms
2010-12-20 13:17:53

A feckless soldier from Madras, OR (one of three) paid the ultimate price for this young woman’s rape and the entire family’s murder. He was kidnapped, mutilated and tortured to death as retaliation when the U.S. military failed to follow-up on the above crimes.

http://www.katu.com/news/8718932.html

 
 
Comment by Doug in Boone, NC
2010-12-20 09:32:18

“Do you think this uniform makes my butt look fat?”

 
 
Comment by jane
2010-12-20 03:13:49

Well, I got MY Christmas present early!

My son came home on a one month leave prior to his next assignment. He had been in Oki for two years. And is a p*ss poor email correspondent. Months would go by. My nerves were SHOT. And I had ZERO outlet for my cooking instincts. The boy can chow down, let me tell you! And he loves everything I make.

He will be stationed in New River (adjacent to Lejeune) for the next two years. Can’t express what a luxury it will be to have him on the same hemisphere! I can cook a pot roast, insulate the vessel, and get it to him before it is cold!

My gentle, artistic son, the Dudley Dooright in the family, has emerged as a confident leader. Again, words cannot express. He is productively occupied, and is tickled pink with his life in the Corps. Then again, he was always one to enjoy 5 AM runs and living the ascetic life. He says that when they go on business to bases to other branches of the Service, people step aside and salute out of respect. The way he carries himself reflects it. He loves his life: of the three of my children, he was the one to intuit how harrowing it was for me, as he was growing up, to be running faster and faster in order to fall behind at a slower pace up in the imploding Northeast. So, he really GETS the concept of three hots and a cot. He is thrilled with his work, ascetic living, being in a mission oriented environment, and being around like minded people, and has grown to understand the ’synergy of teams’ idea. I hate to crow about it, but since he was a baby I always thought his nature would cotton to the life of a priest or a soldier.

On to real estate.

He is not thinking about buying a house any time soon. I am thinking about bagging it as soon as feasible, and doing all of my bookwormy, ‘follow your dream’ retirement stuff in off base rentals, going from one assignment to the next, so that he will always be assured of having a studio and a home cooked meal when he wants one. That would sort of tank the ‘forty acres and a mule with a woodlot, running water, cave, pasture and still’ idea, though.

I just do not get how we, as a society, have been conned into a default model of fragmenting our families over vast distances. There are cultures in which this would be unthinkable, even in the civilized world. I spent my childhood in one of them. Being reduced to a fungible unit of labor is not sitting quietly with me.

But anyway, my older son is in the same hemisphere, even on the same coast for the time being, and I am a happy camper. Daughter is buckling down with dissertation. Younger son wants nothing to do with school, observes the metamorphosis in his brother, and is talking about the Marines. IMHO, the greatest benefit of higher education is to hone a proclivity for critical thinking and independent reason. But that only happens in a certain ambiance, one where multiple choice tests are not the rule, and an execrable high school career is not going to get you there. Debating with me all these years has taught him the difference between hysteresis and hypothesis testing. If he refuses to embrace higher education, I have done my best and will next advise him on an MOS that will have legs for life after the Service.

Alternatively, digging trenches or whatever grunts do for six years will likely endow him with some vestige of maturity. As in, “do I really want to be doing this when I’m 60 and DON’T have a guaranteed piece of real estate over my head”.

OK, I tied this Christmas post to real estate. Mentioned it twice, even - didja all take note? It’s 5 AM here, and I am going to get going like a rocket so I can tie up my loose ends, do my meetings, get the heck out early and take the next two weeks off! If I don’t see all y’all, Merry Christmas and Happy New Year! (And, let’s hope the prices keep tanking).

Comment by CA renter
2010-12-20 05:56:45

I just do not get how we, as a society, have been conned into a default model of fragmenting our families over vast distances. There are cultures in which this would be unthinkable, even in the civilized world. I spent my childhood in one of them. Being reduced to a fungible unit of labor is not sitting quietly with me.
—————-

Could not agree more, Jane.

Congratulations on having your son back in the states! That has got to be heart-wrenching to have them overseas, especially if they aren’t good about staying in contact with you.

Sounds like you’ve done a wonderful job with your kids. :)

Comment by michael
2010-12-20 07:00:59

“just do not get how we, as a society, have been conned into a default model of fragmenting our families over vast distances.”

i wonder if a distinction could be made between having son’s versus daughters.

was discussing this with my brother last night actually. my two brothers and i are fragemented…simply because we live where our wive’s want to live.

i must say…the internet works wonders. i game with thim olnline a few times a week…it’s almost like they are there.

Comment by Arizona Slim
2010-12-20 08:22:03

“just do not get how we, as a society, have been conned into a default model of fragmenting our families over vast distances.”

There are some families where it’s best to have some distance between oneself and the rest of them. I come from such a family.

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Comment by awaiting wipeout
2010-12-20 09:05:53

Az Slim,
I can relate. As my husband says about different members of our families “The rocks in his head, fits the holes in hers.”
Pretty much sums it up.

 
Comment by CarrieAnn
2010-12-20 13:06:09

Some people, like my side, are just toxic and soul sucking to be around….period. Luckily we continue to enjoy my husband’s family who are more into that supportive mutually respectful environment. And we’ve somehow managed to stay geographically close. It really is good for the soul to have that kind of unconditional bond.

 
 
 
 
Comment by oxide
2010-12-20 06:11:31

I just do not get how we, as a society, have been conned into a default model of fragmenting our families over vast distances.

It’s an easy question. Fungible units of labor are MUCH cheaper for corporations, and truthfully, for the individuals, if they they stay individual (see the example of Bill in Phoenix/Maryland/Los Angeles now Bill in Tampa.) All you need is one company to ower pirces and/or make a bit more profit by cutting corners on the employees: relocating a family, sending kids away to college never to return, or demanding more work hours, less benefits. Or they will just hire freelancers to avoid the pesky HR issues altogether. Investors will flock to to that company (not to mention the bonuses and goodies for the VP class). Other companies have to do the same just to stay competitive, keep their investors, and keep their own profits up.

How were workers conned into this? Another easy question. The corporate masters soothed us that middle-class sacrifice was the American model of “hard work” and “freedom.” They fed us the ideas that government is too big, that unions are thugs, and that pensions are a form a brainwashing that we must “take control of our own destiny” by instead leaving our retirement money to the mercy of the Stock Market. They told us that if only government would “stop telling us how to run our business,” and leave business to their own devices, then we could return to the glory days. Etc. Unfortunately, leaving business to their own devices leads us to the very model of fungible units of labor that is so unsettling.

This is not limited to military service. At some point, we are all going to be like the military families, uprooting every couple years, never assembling the wealth of a paid-for house. However, unlike the military, civilians don’t have health care, a GI bill, a pension in our early 40’s (with double-dipping), or even job security.

And we are going along because “we should be happy to have a job.” But it’s already too late. The corporate suits in the boardrooms (starting with Jack Welch) have already concluded that all the sacrifice on the part of the fungible units of labor is STILL not enough to satiate the gaping maw of corporate greed. Our masters have looked overseas, where units of labor come pre-fungible and are far more accomdating to their outlook on life.

Comment by In Colorado
2010-12-20 06:18:54

+1

Comment by combotechie
2010-12-20 06:31:55

Ditto on your +1, and I’ll raise you one.

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Comment by combotechie
2010-12-20 07:08:01

At the company I work for those who long for promotions are often offered positions elsewhere, which means uprooting families and relocating wherever it is the comapny wants them to be.

Those willing to pay the price get promoted; those not willing to pay the price don’t - hence the company ends up with folks in higher positions that are ever-hungry for promotions.

A selection process at work.

 
Comment by In Colorado
2010-12-20 07:21:32

Those willing to pay the price get promoted; those not willing to pay the price don’t - hence the company ends up with folks in higher positions that are ever-hungry for promotions.

A selection process at work.

Once upon a time, if you did your job well and showed a modicum of promise, you would get promoted. You’d get the shoulder and with it a raise.

My more recent experiences in Corporate America are a little different.

First of all, worker bees are rarely promoted as the individual contributor ladder has shrunk to the point where there are often only 2 or 3 rungs on that ladder.

Because of this there is a large pool of worker bees who are jockeying to get promoted into management. It’s a dog eat dog, back stabbing process and consequently the sociopaths usually get the job.

 
Comment by oxide
2010-12-20 07:28:31

And in my experience, you have to move not to be promoted, but just to keep a job. Sidewaysedly mobile. Didn’t Bill in Tampa say that his former company ran out of work and just began laying off?… Now even our highly-skilled Bill is moving to stay ahead of the layoff wave.

 
Comment by Carl Morris
2010-12-20 09:49:35

Once upon a time, if you did your job well and showed a modicum of promise, you would get promoted. You’d get the shoulder and with it a raise.

My more recent experiences in Corporate America are a little different.

Me, too. Having grown up in a rural area and being the first in the family to participate whole-hog in modern Corporate America, I went off to make my way in the world assuming it still worked that way. My time in the army just confirmed that assumption.

Then I got the engineering degree and actually started my “real” career. Got my cargo cult MBA still working on that assumption. Only now in my 40s am I starting to see clearly what you’re describing. The brass ring reachable by those who aren’t on the inside track was taken down and sold for scrap quite a while ago.

 
Comment by Hwy50ina49Dodge
2010-12-20 10:13:36

It’s a dog eat dog, back stabbing process and consequently the sociopaths usually get the job.

Sitting in a building in Nevada flying drones in Afghanistan = war hero

…leave this job…

get hired driving a big red shinning truck with American Flag = Civilian 1st responder hero

The few roads to USofA consistent job & financial security/opportunity is laid before our youth.

Explore the Gov’t job-work maze and then tough it out…

(a Gov’t subsidized education is helpful too!)

 
Comment by oxide
2010-12-20 11:17:36

there are often only 2 or 3 rungs on that ladder.

That applies not only to corporate culture but to society in general, ie. the removal of the midway rungs ie middle class. It used to be that there was opportunity at every level. You could stop at a low level (high school/small house) if you wanted to, or you could “work hard” for college and a nicer house, and stop there. Now, you either jump all the way up, usually by knowing somebody, by having a famous daddy, or by marrying well, or you’re stuck in poverty. If you make it to middle class, you backslide to poverty anyway when the upper class raises the prices of necessities like college or health insurance, or, wait for it… housing.

We’re turning into Venezuela.

 
Comment by Spokaneman
2010-12-20 16:11:01

When I graduated from High School in ‘67, lots of the kids graduating took jobs at the GM Arlington Assembly plant. The pay, by 1967 standards was excellent and they could buy a new GM car at cost plus a little bit ( a big deal to an 18 year old kid).

It took many years for those of us who went to college to advance to the earning levels of the guys that went to work for GM. I would imagine that most of the guys I graduated with have long since retired.

I wonder if a similar option exists for high school grads today.

 
Comment by Carl Morris
2010-12-20 16:43:19

they could buy a new GM car at cost plus a little bit ( a big deal to an 18 year old kid)

Plus the whole product line was awesome relative to the competition in 1967. IMO they peaked that year…I think every single model made that year is something I wouldn’t mind owning now and I don’t even like old cars that much.

 
Comment by potential buyer
2010-12-20 16:58:13

All this is exasperated by the current corporate culture of only allowing a small number of workers to qualify for high ratings during their performance reviews.

For example, the norm is to rate EEs between 1 - 5 (5 being the highest) and companies allocate a small # of EEs to be 5’s and 4’s. The majority being 3’s.

So what happens is, it doesn’t matter how good a worker you are, you will end up being a 3 because they have already met their quota unless you have the backing of your boss.

Its pathetic.

 
Comment by ecofeco
2010-12-20 17:52:32

“I wonder if a similar option exists for high school grads today.”

No. Offshored. Forever. Across ALL industries. Except maybe the oilfield. But even then, that side of the oil industry is a roller coaster. You might have 10 years of good money and then be laid off or have to take half pay for 5 years.

And the oilfield is definitely a young man’s game.

 
Comment by Zeus Matuze
2010-12-20 18:38:03

“Plus the whole product line was awesome relative to the competition in 1967. IMO they peaked that year…”

IMO, the You Us of A peaked in that year.

 
 
 
Comment by exeter
2010-12-20 06:46:01

—>The corporate masters soothed us that middle-class sacrifice was the American model of “hard work” and “freedom.”<—–

And there are dummies out there who still believe it.

No matter how much harder a ditch digger digs, it’s not going to earn him more $$$. The truth is that it is social structures than enable income gains, not more sweat.

Comment by Rancher
2010-12-20 09:25:16

No matter how much harder a ditch digger digs, it’s not going to earn him more $$$. The truth is that it is social structures than enable income gains, not more sweat.

Amen 100 X’s over.

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Comment by CoSpgs4
2010-12-20 12:54:36

Hence, the Political Class.

 
Comment by Exeter
2010-12-20 19:33:16

Housing ______ blah blah “political class”, economy _____ blah blah “political class”, federal reserve ____ blah blah “political class”.

It’s time for you to turn off Fox Noise, pick up a book and learn a new catchphrase. At least try.

 
 
Comment by michael
2010-12-20 12:47:45

“No matter how much harder a ditch digger digs, it’s not going to earn him more $$$.”

if he digs 20 ditches a week versus 5 a week…he doesn’t get paid more?

crappy job.

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Comment by CoSpgs4
2010-12-20 20:46:36

Not in exeter’s world.

He equates productivity with being a wage slave.

He espouses opinions typical of liberals who are government employees or government contractors.

 
Comment by exeter
2010-12-21 08:47:48

Turn off AM radio and open a book. Help yourself.

 
 
Comment by GrizzlyBear
2010-12-20 13:43:22

“if he digs 20 ditches a week versus 5 a week…he doesn’t get paid more?”

No, he’s now required to dig 20 ditches, but for less than 1/2 the pay he used to receive. If he doesn’t do it with smile on his face and a spring in his step, there are tens of thousands of illegal aliens ready to take his place. The CEO/slave master, however, is paying for 2 ditches per week, but getting 20. Ain’t it grand?

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Comment by neuromance
2010-12-20 19:19:12

See Boxer (”I must work harder”), from Orwell’s “Animal Farm”:

“Boxer is a loyal, kind, dedicated, and respectable horse. He is physically the strongest animal on the farm, but impressionable (a major theme in the book), which leaves him stating “I will work harder” and “Napoleon is always right” despite the corruption. Boxer represents the working class, the proletariat.”

“Mr. Frederick, one of the neighbouring farmers, swindles Napoleon by buying old wood with forged money, and then attacks the farm, using blasting powder to blow up the restored windmill. Though the animals win the battle, they do so at great cost, as many, including Boxer, are wounded. Boxer continues working harder and harder, until he collapses while working on the windmill. Napoleon sends for a van to take Boxer to the veterinarian, explaining that better care can be given there. Benjamin the donkey, who “could read as well as any pig”,[5] notices that the van belongs to “Alfred Simmonds, Horse Slaughterer and Glue Boiler”, and attempts to mount a rescue; but the animals’ attempts are futile. Squealer reports that the van was purchased by the hospital and the writing from the previous owner had not been repainted. He recounts a tale of Boxer’s death in the hands of the best medical care. Shortly after Boxer’s death, it is revealed that the pigs have purchased more whisky.”

http://en.wikipedia.org/wiki/Animal_Farm

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Comment by Overtaxed
2010-12-20 07:03:40

“At some point, we are all going to be like the military families, uprooting every couple years, never assembling the wealth of a paid-for house.”

I doubt it. Technology is changing this (both for the better and the worse). There’s no need for many professionals to be anywhere near where they work. I go to my “office” a few times a year, working the rest of the year from home (or on the road). I have a guy who works for me that I see less than 1X per month.

Welcome to the connected world.

Comment by oxide
2010-12-20 07:23:55

If you can do your job from you computer at home, then Apu can do your job from his computer in Mumbai.

And no, Americans are not “special” people who have unique professional skills. Already, India has stolen all the less-skilled computer jobs, within 10 years of the connecting of the world. As soon as India ramps up its education system and teaches kids to speak with an American accent, they will steal the rest of the jobs.

And when India’s workers become too expensive (and spend a decade or two covering this with debt, just like Americans did), corporations will move down a tier, maybe to South America. In a connected world, the United States is done for.

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Comment by In Colorado
2010-12-20 07:29:31

Sad but true.

Where I now work we do outsource contract work for Medical Device companies. Our Ace in the hole, so to speak, is that we’re pretty goodd at the FDA certification process stuff. Unfortunately, It will be only a matter of time until Rajiv and Apu in Bangalore will be able to do that as well.

 
Comment by Overtaxed
2010-12-20 07:51:40

“If you can do your job from you computer at home, then Apu can do your job from his computer in Mumbai.

And no, Americans are not “special” people who have unique professional skills.”

Yup, I couldn’t agree more. The only “special” skill that I have that Apu does not is the ability to speak native American English. Also, the locality is a bit important, most customers don’t want to spend a few M dollars with someone they’ve never met before.

We work with Tata Consulting a lot for work. And try to outsource whatever we can for technical tasks. Unfortunately, much of it winds up back at our call centers in other areas of the world (or the US). As a general rule, when people pay for premium products/services they really don’t want to talk to Apu. They want to talk to Jeff from Detroit, or Jane from Sunnyvale.

How much is that worth? I don’t know; but, I can tell you, from my experience, there’s very few Indian/Oriental people making it high on the chain for IT management/sales. It’s dominated (in my area) by US born people and Hispanic (both US and foreign born).

 
Comment by aNYCdj
2010-12-20 08:03:12

But some old school type humans still like a personal touch. Someone they can call or even just go out and have lunch and discuss business or personal stuff.

That is something Apu cannot do even with a webcam.

———-
then Apu can do your job from his computer in Mumbai.

 
Comment by Jim A.
2010-12-20 08:14:58

And as a skill, speaking with an American accent is only important when your customers are American. (or, aspire to things American.) But when Americans can no longer borrow enough to spend beyond their means, how important will that be?

 
Comment by Overtaxed
2010-12-20 08:43:55

Jim,

I agree. But, at the same time, I’m not really willing to plan for the “nuclear” scenario that India is the superpower and we’re India’s outsourcing arm.

If it happens, I’ll deal with it then. For right now (and the foreseeable future) speaking perfect English is a huge advantage in the global marketplace. And, unfortunately, Indian and Oriental locations have the most difficulty with our accent/language, which, to date, has made them unable to compete in most of the “higher level” sales/technical jobs.

 
Comment by nycjoe
2010-12-20 09:09:19

What I find interesting is how “we,” as a society have come to some understanding that it’s OK for American corporations to move work outside the country without paying significant taxes or tariffs on the foreign-produced work and products.

 
Comment by Jim A.
2010-12-20 11:05:13

Overtaxed–oh I don’t think THAT will happen in my lifetime. And just as Chinese overexpansion looks to soon hit a wall, I suspect that India will have its problems too. It’s not even that we’re becoming less efficient. We’re still going to be creating and consuming more per capita than those in emerging markets. The overall world “economic pie” is still getting bigger. It’s just that the percentage that others get is getting bigger faster than the pie as a whole is growing.

 
Comment by Max Power
2010-12-20 13:15:06

I manage a team that does database reporting and in my limited experience, it’s not that easy to find H1-B contractors that can do anything beyond taking very detailed specs and turning them into code. That’s great if that’s all you need, but in general, Americans seem to be much better at troubleshooting, problem solving, working with incomplete requirements, etc. In other words, they seem to be much better at THINKING and that is what I really need in my line of work. I think a big part of that is that they’re doing business in their 1st language, but that’s a HUGE advantage that Americans have. By far the most effective contractor I’ve ever had was an American born English major.

I know I’ve read others on here voicing similar sentiment. Many try to go the offshoring or H1-B route as there is an enormous number of people in the world that have the skill set (on paper) they need, but many of those people are also disappointed with the end result.

Stopping offshoring will never happen as long as there is equivalent labor available somewhere else in the world at lower cost. Instead, we need to focus on creating better workers so the additional productivity from an American worker outweighs the reduced cost for a foreign one. It’s extremely difficult for me to find people that can actually do the work that we have available. And we’re really not doing anything all that complicated. Shouldn’t be like that in a recession. And before anyone assumes we’re not paying anything, after the agency cut, our contractors are making over $50 an hour.

 
Comment by Carl Morris
2010-12-20 14:31:11

It’s extremely difficult for me to find people that can actually do the work that we have available. And we’re really not doing anything all that complicated.

Just curious, can you share any details? I work in firmware in expansion trays in big disk drive storage systems. Something that ought to be simple but ends up really complicated on a fairly regular basis. Just wondering if you’re talking about something more or less complicated than that…

FWIW we see the same issues in trying to use foreign contractors.

 
Comment by Arizona Slim
2010-12-20 14:41:52

FWIW we see the same issues in trying to use foreign contractors.

Funny we should be talking about this. I just got a phone message from one of those overseas web development outsourcing shops.

Just for kicks, I went to the website associated with their U.S. phone number. Nothing remarkable about it. Thing just about shouted “generic design” out loud.

The phone message was from one of those heavily accented voices. You know, the type you deal with when you call an outsourced call center. And, when you’re talking with the call center, you wonder if real communication has taken place.

Don’t think I’ll be casting my American subcontractors aside in favor of this outfit.

 
Comment by Overtaxed
2010-12-20 14:46:51

Carl,

I’d be curious about your details! :) I sell storage and cloud services for a living, so I’m intimately familiar with storage arrays/disk shelves/etc.

FC-AL/SAS should be simple. In practice, it’s anything but. Trust me, I feel your pain; I’ve spent way to many days of my life trying to figure out why something on the backend of a storage array isn’t playing nice with everything else.

 
Comment by Carl Morris
2010-12-20 15:02:55

The stuff that takes place at the FC/SAS layer is usually done by a dedicated chip that comes with its own code from the chip vendor and when that goes wrong it’s usually just a matter of getting enough data to prove it’s their fault and making them fix it.

The thing we deal with that hurts my brain the most is initialization between the two sides of a redundant system. There’s all sorts of synchronization that goes on and tons of “what ifs” in all the cases where one side is already up and the other side has to come up in the middle of operations. The guys that are really good at resolving those issues are worth a lot of money and have a lot of job security any time management isn’t being totally stupid. Unfortunately I don’t function well at quite that level of complexity…so my specialty is breaking the system via testing and then helping them fix it after I manage to break what they had hoped was unbreakable :-).

 
Comment by ecofeco
2010-12-20 18:06:02

Max, if you think what you’re doing isn’t that complicated, then you really don’t understand the present general level of education in this country.

Contrary to popular belief, college degrees of any kind are still only held by the minority of the population. And a high school education in many areas is now equivalent to middle school curriculum from my school days.

And from experience, many people barely know how to turn on their computer and find the Internet.

And they still jobs.

 
Comment by ecofeco
2010-12-20 18:07:29

“…still NEED jobs”

(I still still need to see about my dyslexia)

 
Comment by Max Power
2010-12-21 11:54:01

Far too late to reply and I realize that no one will end up reading this, but I’m doing it anyway. While I acknowledge that what we do is complicated and the vast majority of people don’t have the ability to do it, I firmly believe that many people could learn if they chose to. The part that continues to shock me is how few people in the US put in the effort necessary to acquire the skills they need to get a good paying job. I don’t think we have a jobs problem in the US. I think we’re lacking workers that can do the jobs that exist in the world today.

 
Comment by oxide
2010-12-21 13:10:12

Max, the problem is that people don’t know exactly what field to be educated in. Companies ask for such specialized skills that you may as well be throwing darts. And even if you do sign up for the exact skill set, your job might be offshored before you graduate.

 
Comment by Max Power
2010-12-22 10:50:51

Then go learn something else. This “who moved my cheese” attitude doesn’t work. You can’t learn a skill at 20 and expect to ride it for 40 years until you retire. If no one will pay you for your skills anymore it’s time to go learn new skills.

 
 
Comment by In Colorado
2010-12-20 07:24:53

I’ve had mixed experience with this. Corporations claim they are going that way, yet they want you to come into the office, especially if security issues are involved. I can occasionally telecommute with my current job, but more often than not I need to be physicaslly present on site to do the work because of a myriad of reasons: non removable lab equipment, etc.

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Comment by oxide
2010-12-20 07:31:22

Even in government, which promotes telework, workers are only allowed to telework two days a week. I have heard examples of working totally remote where th employee reports to the office twice a year, but that’s pretty rare and specialized. There are also examples of two-week-in two-week-out working remote, but that hardly seems worth the bother.

 
Comment by cactus
2010-12-20 10:36:52

Funny I work on High Speed digital circuits that make the internet work so I’m working myself out of a job prehaps?

All you need is a PC and some good software and you can layout PCB’s I’ve done this at home so it certainly can be done in China India Mexico or any place cheaper than CA.

One look at the online message boards for PCB design and you can see most of the questions are from (India I think if they write like they talk ) asking how to layout Microwave PCB’s.

What are you going to do ?

 
Comment by In Colorado
2010-12-20 10:50:04

“What are you going to do ?”

Don’t tell APU how to layout Microwave PCBs?

 
Comment by oxide
2010-12-20 11:19:36

Better yet, lie.

 
Comment by alpha-sloth
2010-12-20 11:27:09

“Don’t tell APU how to layout Microwave PCBs?”

Better yet, tell him the wrong way to do it. :wink:

 
 
 
Comment by michael
2010-12-20 07:19:55

labor in my static small southern hometown is much more fungible than the labor in the transient DC metro area.

not sure moving around equates to fungibility…the opposite seems more the case.

 
Comment by rms
2010-12-20 07:41:34

“However, unlike the military, civilians don’t have health care, a GI bill, a pension in our early 40’s (with double-dipping), or even job security.”

Jimmy Carter did away with early pensions and double-dipping too.

Comment by pdmseatac
2010-12-20 09:48:04

The twenty year pension is still in effect. I have numerous co-workers who receive military pensions. The pension is much higher now since pay has increased to levels which are not too far from civilian jobs, compared to when I was in the service in the early ’70s.

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Comment by Steve J
2010-12-20 13:23:26

You don’t get that 20 year pension until you are 65(not at age 37 like my father was able to).

rms was right, it took effect shortly after Carter left office.

 
Comment by pdmseatac
2010-12-20 14:58:21

You don’t get that 20 year pension until you are 65(not at age 37 like my father was able to).

rms was right, it took effect shortly after Carter left office.

http://www.military.com/benefits/military-pay/retired-pay/military-retirement-system

The above is not an official DoD site, but they are claiming that you can still retire at 37 after doing your 20, although there are now three options for enlisted personnel regarding retirement plans ( if I understand correctly ). I did not see anything on the DoD site that contradicts this. Do you have a DoD link that explains the pension system clearly ?

 
 
 
Comment by LehighValleyGuy
2010-12-20 08:02:17

I just do not get how we, as a society, have been conned into a default model of fragmenting our families over vast distances.

Oxide, the question was about families and had nothing to do with corporations, so your answer is totally off track.

The real reason we have scattered families is because of all the pork barrel “infrastructure” projects for transportation undertaken over the past decades. Interstates, large airfields, railroads– all were built on confiscated land, using taxed money that people, left on their own, would have preferred to use for other purposes.

These transportation projects made it *apparently* easier to travel long distances, so the marginal cost of moving away, while still being able to visit your relatives, declined. But when the elaborate organizations needed to maintain them started to break down, as was inevitable, the cost rose again, leaving families scattered without easy ways to reunite.

Comment by oxide
2010-12-20 08:44:24

I’m not sure about that, Lehigh. I think that opportunity is the driver, not the transport. People were moving to better opportunity — going west, or coming to America — even when transport was near-impossible. Tranport projects are a response, not a driver. (My position is the government programs are a response, not a driver.. at least initially.)

Also, I think other drivers are corporate centralization/specialization, the rise of good colleges, and the rise of professional women in the workforce. If you want to be a mechanic you could probably work anywhere. But if you want to make real money in, say, insurance, chances are you would have to move to a limited number of cities.

It used to be that you could drag your wife anywhere since she stayed at home, or at best, worked in the grocery store or as a teacher in whatever city. But what if you’re an insurance guy and your wife is biotech? Try to find a city where both of you can find a job. (It’s especially bad for spouses in sci-tech academia.) Whatever city it is, it’s likely to be far from where you grew up, and not the city where you went to college.

It used to be that we went over the river and through the woods to grandmother’s house. Now we’re either subjecting Grandma to opt-out searches or dragging toddlers through airports.

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Comment by michael
2010-12-20 10:14:42

i think it’s just cheap oil.

 
 
Comment by ecofeco
2010-12-20 18:17:35

LehighValleyGuy, you are wrong on so many levels I don’t even know where to begin.

But for starters: yes there was a lot of land confiscated to create our current multi-modal transport system, but there were also a lot of people who more than willingly sold their property and their lives were substantially improved.

Also, the transport system was created as a strategic initiative in order to decentralize our resources as a survival tactic against nuclear war. This has been the driving policy since the end of of WWII until the fall of the Soviet Empire and is the CORE source of our current structure.

Where we’ve made a major mistake was in not building a high speed train network. Trains are by far still the most efficient means of moving people and freight.

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Comment by Arizona Slim
2010-12-20 08:25:30

Or they will just hire freelancers to avoid the pesky HR issues altogether.

Speaking as one of those freelancers, I can attest to the fact that one of the selling points of this lifestyle is that you don’t have to move to get work. You can work remotely from wherever you are.

Of course, not every job can be done this way, but a lot of jobs can.

 
 
Comment by Jim A.
2010-12-20 06:28:59

I just do not get how we, as a society, have been conned into a default model of fragmenting our families over vast distances. It’s pretty ingrained in the history of the US. After all, until the second half of the 20th century immigration to the new world almost invariably meant a permanant severing of family ties. Unless you were rich, mail was the only connection, notwitstanding the theoretical possibility of traveling back for a visit. Even internally, throughout the 19th century, going “out West,” meant that you’d probably never see your family again.

Comment by In Colorado
2010-12-20 07:26:13

“Even internally, throughout the 19th century, going “out West,” meant that you’d probably never see your family again.”

It also meant you had to watch out for the Robber Barons, who are making an impressive comeback these days.

 
Comment by whyoung
2010-12-20 07:55:16

True, but that was a personal decision by most of the immigrants/pioneers to seek a different life, NOT a loyalty test to a corporation that would eventually not give loyalty in return.

 
 
Comment by ahansen
2010-12-20 09:28:13

“…I just do not get how we, as a society, have been conned into a default model of fragmenting our families over vast distances….”

Our imperial wars have had a lot to do with it….

Jane, I am thrilled you have your son back. Maybe someday all our sons and daughters will be. In this time of hope and peace, let us strive to make it so.

Thank you for this post.

 
 
Comment by wmbz
2010-12-20 03:59:17

27-Year Old Citi Banker Commits Suicide

A 27-year old Citi banker, Jessica Fashano, commited suicide on Saturday by jumping off the roof of a Manhattan building, according to NYT.

Fashano, an associate at Citi Global Markets, was according to reports active in philanthropy. Her profile for the Acumen Fund — an organization that promoted entrepreneurship and small businesses in the developing world — is here.

At this point, there’s no indication of any back-story or motivation. No note was left.

More from NYT:

A resident said she was returning from walking her dog and rode up with Ms. Fashano in the elevator. Dressed for the cold in Ugg boots and a winter jacket, Ms. Fashano asked the woman how to get to the roof — which has views of the Hudson River and New Jersey, where Ms. Fashano grew up. The resident, who declined to be identified, said Ms. Fashano seemed alert and aware.

At 8:13 a.m., the police found her body in an internal courtyard, where she was pronounced dead. The police said they did not suspect foul play.

Comment by Muggy
2010-12-20 11:26:20

(I tempted, but I’m trying to keep to the holiday spirit here…)

 
Comment by ecofeco
2010-12-20 18:23:19

Suicide jumpers who survived have almost all said that jumping was the dumbest thing in the world because you have time to think about what a mistake it is on the way down.

Comment by DennisN
2010-12-20 19:22:20

Best available suicide appears to be “do a Hitler”. Take your handgun and shoot straight back into your mouth. It will sever the brainstem and death will be like turning off the lights.

 
 
 
Comment by wmbz
2010-12-20 04:05:54

Shoppers crowd the malls in Christmas countdown
Shoppers pack the malls on the last weekend before Christmas, stick to lists

NEW YORK (AP) — Packed malls? Healthy gains in holiday spending? It’s beginning to look at least a little like a pre-recession Christmas.

Americans spent more on clothing, luxury goods and even furniture, delivering healthy gains across the board, according to MasterCard Advisors’ SpendingPulse, which tracks spending across all transactions including cash. The online category continued to be a bright spot. The big exception was consumer electronics, dragged down by deep discounting of TVs amid a glut. That area was virtually unchanged from a year ago.

“This is the first normal Christmas in three years,” said Michael McNamara, vice president of research and analysis for SpendingPulse. He said there is “genuine demand” for a variety of products, even higher-ticket items.

Comment by oxide
2010-12-20 06:14:34

Where did you get this article, wmbz? Is there a breakdown as to how much of this spending is cash/debit as opposed to credit?

Comment by wmbz
2010-12-20 06:30:48

It was on Yahoo this morning, but I can’t find the link now.

 
Comment by AbsoluteBeginner
2010-12-20 08:10:35

One source:

http://www dot valleynewslive dot com/Global/story.asp?S=13710726

 
Comment by aNYCdj
2010-12-20 08:43:39

Oxide:

My GF did $7000+ sales in her area yesterday and only $164 in cash……

Maybe everyone except me got an automatic increase of a few thou in their credit card limit as a stimulus “gift”

Comment by sfbubblebuyer
2010-12-20 10:44:28

Debit cards have replaced cash. I use credit for online purchases, debit for POS purchases, and cash for small transactions like splitting the lunch bill with co-workers.

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Comment by In Colorado
2010-12-20 06:24:16

Meh! Sales taxes collections on average are still in the dumpster. They might be inching up from last years’ depressed levels, but they remain very weak.

Our local burg is asking the citizenry where we should cut the local budget. Just last year they were saying it wouldn’t be necessary. We are talking about a 2-3% cut, which is remarkble as the city always projected 3-4% increases.

I’m off to my annual check up in a hour. It will be interesting to see who is there (clientele … I mean patients).

Comment by In Colorado
2010-12-20 10:00:04

As expected it was very quiet at the Doctor’s office this morning, nothing like in years past when the waiting rooms were packed with people.

Comment by Arizona Slim
2010-12-20 10:02:47

I’ve read somewhere that about 1/3 of GP-type office visits aren’t necessary.

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Comment by RioAmericanInBrasil
2010-12-20 10:26:48

I’ve read somewhere that about 1/3 of GP-type office visits aren’t necessary.

But if you’re uninsured 4/5ths of Doctor visits aren’t “necessary”.

 
 
 
 
Comment by Arizona Slim
2010-12-20 08:31:06

I went to the post office last week. Was out of stamps and I needed to stick some of them on my bills. Which I still mail because I don’t want any more tentacles into my bank account than are there already.

Any-hoo, I did a quick eyeball poll of the line. Most of my fellow waiters-in-line were there to mail packages.

And the lady I chatted up said that she’s getting very few Xmas cards this year. (Ditto for me.) She also said that this is likely the last year that she’ll send Xmas cards. (I’ve only sent one. It was for an elderly, out of state relative.)

Comment by In Colorado
2010-12-20 10:02:13

We stopped mailing Xmas cards years ago. No time, its expensive, etc.

We used to buy our cards preprinted from “The Printery Shop”, which is run by Benedictine Monks. They had nice designs.

 
 
Comment by ecofeco
2010-12-20 18:28:05

I keep hearing reports of the same.

With UE still at +/-10% and UE benefits expiring, where the hell are they getting the money?!

Also, what is the breakdown between cheap gift and big ticket items? This would be very telling.

 
 
Comment by CarrieAnn
2010-12-20 04:25:31

The most expensive listing on cnyhomes. Historically many of the NY lakes were littered with summer homes for the people we now refer to as the elite. But increasingly the upper middle class started building their summer homes larger and more grand. This home built in 1890 may represent the former. It sports a $4 million dollar asking price w/a tax bill of almost $57k per year. IMHO, It’s not a very attractive building so I’m guessing that price tag is about its location on Skaneateles Lake. Muggy, would you know the back story on this place?

http://cnyhomes.com/Listing/Search/info.cgi?mlnum=S244914

I could get into owning that boathouse. That’s sweet.

Comment by Muggy
2010-12-20 06:14:33

“Muggy, would you know the back story on this place?”

Naw, and my wife does not know the owners. That boat house must be relatively new because I don’t recognize it. There is also a lakefront property adjacent to this one that was being constructed a few years ago when I visited. It really pissed some people off because it obstructed views.

And, as you can see, some of the newer, garage mahal-type boathouses are houses themselves. Maybe that’s how my wife and I can bubblesit in CNY — rent some FB’s Extreme Boathouse, which by the way we all know they’ll only use on the 4th of July.

 
Comment by 2banana
2010-12-20 06:45:56

tax bill of almost $57k per year

For a house in nowhere land, upstate NY?

WTF?

Just for the tax bill, you could stay at a 5 star resort for the same amount of time you you spend at this vacation house. And not worry about the mortgage, upkeep, insurance, cutting the grass, etc.

 
Comment by Blue Skye
2010-12-20 07:15:24

That tax bill is based on an assessment of only $2 Mil. It will double if the asking price is met.

Owned by a utility company, lol.

 
Comment by Overtaxed
2010-12-20 08:54:15

Holy mother.. 1000/sq ft for nowhere’s-ville NY? That’s not really close to anything; and that price is just outrageous; it’s more like the Southampton prices than east-bumble.

That’s not going to be an easy sale. And yes, if you’re only going to vacation there, it’s even crazier. Upkeep (taxes/insurance/etc) on that place have to be >100K/yr. Even 1000/night on a hotel starts to seem REAL cheap compared to that.

If you only have 3-4 weeks a year, you can probably stay the entire time in any Ritz anywhere, pay for all your dinner/activities, and most importantly, hire a jet to get you to-from your destination for 100K/yr.

Nuts.

Comment by Blue Skye
2010-12-20 09:17:34

It’s an investment!

 
Comment by CarrieAnn
2010-12-20 13:27:15

I don’t know if I’d call Skaneateles no where. Plenty of professionals do commute from there to Syracuse.

And it’s probably a similar commute to Rochester.

Comment by Muggy
2010-12-20 13:55:14

Skan has quite a few residents who do business all over the country/world. My FIL is one of them .

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Comment by Overtaxed
2010-12-20 15:00:13

Syracuse have a abundance of jobs paying 1M+/yr does it?

Rochester is pretty “nowhere” IMHO as well (when you’re talking about houses in this price range, anyway).

According to the IRS (2006, the most recent stats I could find), there are ~350,000 people in the US who make over 1M dollars a year. That’s a tragically small pool of people, of which, a huge majority live in NYC, LA, San Fran, Palm Beach, Star Island…

I’d love to know how many people in Syracuse/Skaneateles make over 1M/yr. I’m sure there are a few.. But, still, when you’re talking about houses in that price range (which are likely 2nd homes) you’ve got a microscopic portion of the population that can afford it, and be interested in buying it.

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Comment by GrizzlyBear
2010-12-20 17:47:54

Wow, that’s a lot of cabbage. You could buy this bank-owned custom lakefront home with your own private beach in Incline Village at Lake Tahoe for less ($3,657,500), with a smaller tax burden.

http://www.trulia.com/property/1054509416-1555-Pinecone-Cir-Incline-Village-NV-89451

Comment by ecofeco
2010-12-20 18:34:10

It sort of has a storybook look, doesn’t it?

 
 
Comment by ecofeco
2010-12-20 18:31:21

I agree. The boathouse looks nicer than that faux castle, although I must admit the interior of the house is tastefully understated.

 
 
Comment by CarrieAnn
2010-12-20 04:35:27

http://cnyhomes.com/Listing/Search/info.cgi?mlnum=S237598

If you don’t mind being in the worst affected area of the Ontario lake effect snow belt, here’s a 4000+ sq footer on the water for only $2.7 mil. At least you get waterfront w/low, low taxes. (Man, look at how low those taxes are. Who owns that place, Christopher Dodd? Angelo Mazullo?)

Comment by WT Economist
2010-12-20 07:25:37

In the 1980s housing bubble, my wife and I took a long look at moving to Upstate New York. The idea was to live cheap and save money down here, then by a house with cash so we could live even cheaper up there.

It turns out that although we might have been able to get a job up there, that would have been THE job, and if we ever needed to change, we would have had to move. And the 1980s housing bubble ended and we bought down here, before another bubble inflated.

In any event, I can see good reasons to live in Upstate New York. I can see no good reason to pay a lot of money to live in Upstate New York. It’s kind of like living in New York City with two cars and not using the subway — you get all the disadvantages without the main advantage.

Comment by oxide
2010-12-20 07:33:39

You could get the same advantages of rural NY but no taxes… just move to Oil City, PA! :mrgreen:

Comment by nycjoe
2010-12-20 09:32:56

Just be careful you don’t light up your tap water there! Gas fracking is getting wiggy in Pa. Of course, N.Y. has but a 7-month moratorium.

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Comment by ecofeco
2010-12-20 18:35:55

3 mill and no outdoor kitchen? I’ll pass. :lol:

(way too much interior wood as well)

 
 
Comment by Mike in Miami
2010-12-20 04:52:17

20,000 Sacrificed In Annual Blood Offering To Corporate America
http://www.theonion.com/articles/20000-sacrificed-in-annual-blood-offering-to-corpo,18542/
They forgot to mention the slave laborers in Chindia.

Comment by oxide
2010-12-20 11:31:41

In accordance with tradition, Friday’s ritual—hosted this year by the Greater Wilmington Convention Center—included stonings in honor of Monsanto, the drowning of elders on behalf of Ford, and live flayings in the name of Whole Foods.

Wow, even granola-liberal Whole Foods is considered corporate POS now. +1 one Onion!!

For the record, Whole Foods is more an outpost of the LOHAS* rich, not the liberals. Liberals still are boycotting the heck out of Whole Foods because the CEO posted a Bush-like healthcare op-ed in the WSJ.

———-
*LOHAS: marketing term for the Lifestyles Of Health And Sustainability demographic. Because, of course, the best way to be green is to…buy more stuff!

Comment by ecofeco
2010-12-20 18:38:04

Whole Paycheck was considered evil corporate 15 years ago.

Their expansion throughout the 1990s changed them.

 
 
 
Comment by DennisN
2010-12-20 04:58:40

The LA Times is running a feature story on eliminating the mortgage interest deduction. Naturally there are some panic-sounding comments to this story - perhaps posted by realtors? :lol:

http://www.latimes.com/business/la-fi-mortgage-deduction-20101220,0,2642237.story

Comment by CA renter
2010-12-20 06:14:11

From Dennis’ link:

“Fifteen years ago, Carol Nietmann and her husband bought a spacious house in Maryland near Chesapeake Bay. And thanks to the time-honored tax deduction for mortgage interest, she said, their new place was a little bigger and a little nicer than they would otherwise have thought they could afford.

Much the same has been true for millions of Americans up and down the income scale. Perhaps the most sacred of all the sacred cows in the tax code, the home mortgage deduction has long been seen as crucial to a major element of the American dream — owning your own home.

It has also been a boon to home builders, construction workers, the financial services industry and local governments that benefited from fatter real estate tax revenue.”
——————–

Anyone else notice the contradiction between “they were able to afford a nicer house” and “It has also been a boon to home builders… [and increased] real estate tax revenue”?

Contrary to what realtors may claim, the MID does NOT make a house more affordable. The price will rise to offset any savings, just as the price will rise to offset any potential benefit of a tax credit or lower interest rates. As long as the “benefit” is available to most buyers, then ALL of these buyers will use this “benefit” to increase what they would otherwise be willing/able to pay. This is not good for buyers, and it’s high time we dispel that myth.

We need to get rid of all subsidies that serve to push housing prices beyond what regular working peole can normally afford. The sooner we come to that realization, the better.

Comment by Jim A.
2010-12-20 06:56:04

The equation MID = higher prices only and not more affordability holds only when owner/occupiers rather than landlords are setting the prices. Because landlords have always been able to deduct interest as a business expense. But of course middle and high cost housing is dominated by owner/occupiers and most rental housing is concentrated at the lower end of the cost spectrum. So even if one thinks that the MID serves a purpose, capping it and limiting it to a single property per household would seem like a good idea.

Unfortunately, the ONLY way that this would ever happen in in conjunction with the sort of “tax reform” that would cut taxes on the wealthy. The rich would be willing to get behind it then because they could pay lower rates, and would start renting their mansions and million dollar Manhattan apartments. All those Wall Street types would be renting their homes to each other, deducting the interest, and paying less taxes on the rent received. That’s a win-win….for them.

 
 
Comment by In Colorado
2010-12-20 06:28:32

Ain’t gona happen, since eliminating that deduction will gore the rich’s ox. Now if it only benefitted the lower to middle class our legislator would tripping over each other to eleiminate it.

 
Comment by Overtaxed
2010-12-20 07:12:58

They might eliminate the deduction, but if they don’t grandfather those of us who have it; I’ll be shocked.

Getting rid of the deduction drops houses about 15-20% overnight. That’s fine (and probably should be done), but, hitting current owners with that price drop, AND making them now pay additional tax (because they bought when interest was deductible, and therefore, paid more for the house) is unfair and politically (IMHO) a non-starter.

Really all interest should be deductible; business get’s to deduct interest expense, why shouldn’t individuals? It makes no sense that mortgage interest is deductible and nothing else is; either everything should be (which, IMHO, is the right solution) or nothing should be.

Comment by michael
2010-12-20 07:33:32

“either everything should be (which, IMHO, is the right solution)”

i have no debt and therefore think none is the right solution…or let me deduct my rent.

Comment by oxide
2010-12-20 08:59:00

The MID was intended as social engineering, to reward homebuyers for having jobs, raising babies (to keep SS solvent) and improving the community.

The gov will never reward renters for renting. They still need us to buy houses more than ever, but not only for the social engineering. Now, they desperately need fresh Renter cash to buy their underwater homes and shore up the GSE’s POS MBS paper.

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Comment by DennisN
2010-12-20 09:19:55

As I posted at the LA Times…

I once researched the history of the mortgage interest deduction (MID). It turns out there was never any Congressional intent to even make a MID. After the 16th Amd. was ratified in 1913, interest on ALL loans was made deductable as a “legitimate business expense”. Back then there was NO consumer credit: almost all loans were for business. The 30 year mortgage was a creation of the FDR administration. The MID happened by accident, as interest on all consumer loans was then made deductable: car loans, credit cards, you name it. Then starting around 1980 the deductability of interest for other kinds of loans was eliminated. The MID was just “the last man standing”. It is the product of a historical accident.

 
Comment by Arizona Slim
2010-12-20 09:35:32

The MID was just “the last man standing”. It is the product of a historical accident.

The employer-based health insurance system is a similar accident. Started during WWII when wages and prices were frozen.

 
Comment by Jim A.
2010-12-20 10:28:33

Arizona Slim–This is somewhat similar to the airlines before deregulation. Since the CAB prevented them from competing on price, they competed on services. The result was that Airline travel was expensive, but luxurious compared to today.

 
Comment by oxide
2010-12-20 11:33:54

Maybe social engineering was the reason it was the last man standing. “Nah…we need communities… we’ll keep this one…”

 
Comment by ecofeco
2010-12-20 18:44:26

“Then starting around 1980 the deductability of interest for other kinds of loans was eliminated.”

All part of the long slide to hardship for the middle class that began in the 1980s.

 
 
 
Comment by whyoung
2010-12-20 08:05:25

Why should all interest be deductible? To encourage people to take on even more debt?

And the mortgage deduction becomes less valuable over time, for those who stay in a place for the long term… something not every mortgage holder seems to be aware of.

Agree there’s no simple solution, not sure what the solution is, but it certainly is something that should be looked at.

Comment by cactus
2010-12-20 10:46:54

And the mortgage deduction becomes less valuable over time, for those who stay in a place for the long term… something not every mortgage holder seems to be aware of. ”

you have to go and buy a bigger house to get the deduction back, and yes I had somone tell me this back in 2005

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Comment by Professor Bear
2010-12-20 17:33:57

Welfare for the wealthy:

The National Assn. of Realtors already is running ads warning that tampering with the deduction would hurt “hard-working American families.” The ads point out that 65% of the taxpayers who took the deduction made less than $100,000.

What the group doesn’t say is that about 75% of the entire $85.5 billion that people saved in taxes from the mortgage interest deduction in 2008 went to individuals or couples making $100,000 or more, according to an analysis by the congressional Joint Committee on Taxation of the latest data available.

Comment by ecofeco
2010-12-20 18:46:27

Yes, but there really are a lot of people it does help. Should they be thrown to the wolves?

 
 
 
Comment by awaiting wipeout
2010-12-20 04:59:10

The Dream Act was defeated in the Senate (for now). Now, let’s focus on housing.

Comment by oxide
2010-12-20 06:17:16

DREAM act won’t come back to life, not with Republicans in the House. Actually, I’m rather surprised that public was not more aware of the nuts and bolts of the bill, which Bob posted yesterday.

Comment by In Colorado
2010-12-20 06:30:39

A few weeks a go on the way to work at one of the intersections there were several people waving pro DREAM placards.

My carpool had no idea what DREAM was all about. When I explained it to them they were uniformly opposed to it, and my carpool is quite liberal.

 
Comment by awaiting wipeout
2010-12-20 06:34:42

oxide
Thanks. I’ll go to the post and read it.

 
 
Comment by mariner22
2010-12-20 07:31:43

I don’t understand why the DREAM act included those that attended 2 years of college as well as served in the military. I wouldn’t think even the most ardent conservative would oppose legalization for those that served the US in the military (which is more than most of us do). Seems to me those that served in the US military and received an honorable discharge should have a guaranteed citizenship waiting for them.

Comment by 2banana
2010-12-20 07:51:57

I don’t think ANYONE would be against giving citizenship to a person that serves honorably in the American military.

The DREAM act gives citizenship to ANYONE that attended college in America, plans to attend, faked attending (the government is not going to check) and their entire families.

It is AMNESTY - pure and simple.

For EVERYONE.

Comment by Steve J
2010-12-20 13:28:22

Any one who would join the army of a foreign country is a little bit suspect in my book.

What would it take you HBB’s to join the army of Argentina? Or China? Or the French Foreign Legion?

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Comment by nickpapageorgio
2010-12-20 14:18:54

Americans are not rushing the borders of those countries, we still like it here.

 
Comment by RioAmericanInBrasil
2010-12-20 21:43:01

Americans are not rushing the borders of those countries, we still like it here.

Rushing? Like it? Where can Americans go to? Do you know how that works?

Other countries don’t take in any Americans without reason.

 
 
 
Comment by GH
2010-12-20 08:20:21

I am pretty certain we have sufficient American talent trying to get into the Military right now. I was chatting with a recruiter a couple of months ago and he said they were being very picky right now.

As far as serving in the Military, it is not for everyone. From a long term perspective, getting educated and learning to be a creative and valuable citizen is probably the best thing you can do for your country.

 
 
 
Comment by jeff saturday
2010-12-20 05:17:24

Lenders’ high bids at foreclosure auctions keeping investors away

By Aldo Svaldi
The Denver Post
Posted: 12/17/2010 11:13:43 PM

More than 25,000 Colorado homes are expected to sell at foreclosure auctions this year, but only about one in 10 auction sales have gone to outside investors in recent weeks.

“Banks are not pricing these things to sell them at the auction,” said Rick Sharga, a senior vice president with RealtyTrac, a California provider of foreclosure data.

Sharga said his analysts think the only logical explanation for above-market price bids is a change in accounting rules following the financial crisis.

Banks don’t have to record their assets at market value, so by bidding high, they can delay taking write-offs and losses.

“The lenders wouldn’t have to write down the value of these assets until they resold them,” he said.

Owning the properties gives lenders more control over when they recognize a loss, making it easier to meet quarterly earnings targets or comply with regulatory requirements, Sharga said.

http://www.denverpost.com/business/ci_16889838 - 123k -

Comment by Muggy
2010-12-20 06:07:49

“Banks don’t have to record their assets at market value, so by bidding high, they can delay taking write-offs and losses.”

Must be nice.

 
Comment by OcBystander
2010-12-20 06:27:48

“Owning the properties gives lenders more control over when they recognize a loss, making it easier to meet quarterly earnings targets or comply with regulatory requirements, Sharga said.”

Translation: ” … making it easier to fool investors and break federal law.”

 
Comment by hobo in mass
2010-12-20 07:54:55

I thought this was a way to clear titles by removing second mortgages and such.

Comment by Ben Jones
2010-12-20 08:11:32

The only part you need to know:

“Lantz said that in cases where mortgages are securitized or sold as bonds, the trust documents sometimes don’t allow underbidding the loan amount, even when in the investors’ best financial interest. “There is no decision-maker guiding the process,” he said.

Comment by Jim A.
2010-12-20 10:42:21

That points to the inertia in the process. In normal times, foreclosures were usually driven by adverse life events: illness, job loss, etc. Workouts are unlikely to help, and the house is barely underwater. So bidding the ammount owed prevents a non-arms length transaction from creating higher losses* without losing any more money than they would have otherwise. Once the bank has clear posession, they can sell the house through normal channels to ensure an arms length transaction. So lenders bidding the ammount owed was the norm. As servicers replaced ultimate lenders** in the foreclosure process, this practice was enshrined in the servicing rules. So probably NOT a conspiracy to prevent price discovery.

*Say the Foreclosees mother-in-law puts in a bid at 60% of the market price, and acheives clear title at a substantial discount.

**investors? Southeast Podunk public pension program?

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Comment by Professor Bear
2010-12-20 08:29:41

“Sharga said his analysts think the only logical explanation for above-market price bids is a change in accounting rules following the financial crisis.

Banks don’t have to record their assets at market value, so by bidding high, they can delay taking write-offs and losses.”

Do these fake sales end up in official sales price statistics, which in turn serve as raw material for headline home price indexes like the Case-Shiller/S&P Index? I see a potential for very misleading upward bias in home sales price statistics if this is the case (and it would explain a lot about areas where bubble-era prices are suspiciously sticky…).

 
 
Comment by jeff saturday
2010-12-20 05:26:21

December 17, 2010, 9:39 AM ET

Will Mortgage Rate Rise Hurt Housing Market?.

By Nick Timiraos

If Americans weren’t buying homes when rates were at 4.25%, what happens now that rates have popped back to 5%?

“Since the recent rate increases have essentially just undone the declines from earlier months, it is hard to see why sales should drop significantly further from current levels,” wrote Goldman Sachs economist Ed McKelvey in a research note published Thursday evening.

But rising rates could still squeeze some housing markets because first-time home buyers may find that they’re not able to qualify for as large a loan as they could just four weeks ago. That could put pressure on home sellers to reduce prices. Analysts at Credit Suisse estimate that the recent rise in rates has the same effect as a 7% increase in home prices for prospective buyers.

Bob Dorman, a real-estate agent in Corona Del Mar, Calif., is representing a buyer who now needs to come up with an additional $10,000 in order to qualify for a loan on the $412,000 home he’s under contract to purchase. “How many first-time home buyers have access to that kind of cash?” says Mr. Dorman.

Comment by whyoung
2010-12-20 08:12:24

“a buyer who now needs to come up with an additional $10,000 in order to qualify”

Anyone who doesn’t have any reserves after their down payment is not ready for home “ownership” and why would anyone responsible lend them money?

As wonky as co-op’s can be they would never allow a purchaser into their building without proof of additional assets to pay for mortgage and maintenance.

Comment by oxide
2010-12-20 09:01:42

why would anyone responsible lend them money

For the upfront fees. As for the lending company, well, they’ll just be bailed out. Again.

 
Comment by Jim A.
2010-12-20 10:49:31

Yes, but by your logic they shouldn’t then buy because they don’t have that $10k anymore. Whatever ammount of reserves are a good idea are still a good idea. Of course when I bought my house, I had almost no cash reserves. Because for a given house, the choice is to put the money in the downpayment, or save it as a reserve. Which means that effectively, you are paying interest on that money. Since I had zero other debts, it seemed reasonable to rely on my CC for any emergencies that could crop up while is saved up a new reserve fund.

Comment by whyoung
2010-12-20 11:24:07

Yes, they shouldn’t buy even if they have the additional $ but no other reserves.

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Comment by ecofeco
2010-12-20 19:12:36

Seriously, if you don’t have some serious cash in the bank and damn good credit, you really shouldn’t buy a house.

 
 
Comment by wmbz
2010-12-20 05:52:37

Panic, anger as Cuba plans to lay off 1 of every 10 workers

MIAMI — Cuba’s draconian plan to lay off 10 percent of its workforce is running into a slew of problems — not the least of which are the growing fights over who will wind up on the street.

Cuban and foreign economists say it’s too much, too fast.

Radical leftists are branding Raúl Castro as a capitalist exploiter of workers and – in an odd alignment with Cuban dissidents – are urging workers to fight the job cuts.

One well-known historian and Communist Party member has warned of social chaos, maybe even a mass exodus, and cautioned that the layoffs may be unconstitutional.

Workers desperately trying to keep their jobs are accusing others of corruption. And some blacks and women are warning that those sectors may be hardest hit by the job cuts.

Almost no one doubts the job cuts are necessary in a country where the government pays the salaries of 85 percent of the workers – many of them in little more than make-work jobs. Castro has admitted the state payrolls are padded with more than one million surplus workers.

Comment by Steve J
2010-12-20 09:58:54

How long until the governments I’m the US employ more workers than in Cuba?

Comment by sfbubblebuyer
2010-12-20 11:11:37

At least three weeks.

 
 
Comment by nickpapageorgio
2010-12-20 14:20:26

Viva La Revolution!

 
 
Comment by awaiting wipeout
2010-12-20 06:28:55

We went to my husband’s friend of 25+ yrs last night, and us two wives don’t much care for each other. When I said “so long” upon leaving, I was actually talking about the evening. LOL

Comment by exeter
2010-12-20 06:54:02

lmao.

 
Comment by Professor Bear
2010-12-20 08:25:08

“So long, fair well, auf wiedersehn, good-bye…”

So Long to Ya, 2010

Comment by Hwy50ina49Dodge
2010-12-20 10:52:07

Jib-Jab / ping-pong / teeter-totter

Ha, just as I thought, Joe Biden has better dance moves then Karl Rove! :-)

 
 
 
Comment by Brett
2010-12-20 07:28:58

Interesting entry by a popular RE agent in Austin, TX about the long-term effect of low interest rates in the real estate market…

FYI… If the format of the tables isn’t right, please visit the link

——–

One of our buyers closed last month with a 3.87% interest rate. We saw many sub-4% loans the past several months, though rates have now climbed back above 4.6%.

Let’s imagine hypothetical first time buyers with a toddler who closed this year with an interest rate below 4%. Fast forward 5 years to 2015 and imagine they now have a 6 year old and a 3 year old. The career is going well, income is up, savings account is healthy, cars and student loans are paid off, the economy is good and the house is starting to feel a bit small.

This is the profile of a typical move-up buyer in Austin. Move-up buyers play an important role in the real estate market by providing resale housing stock for first timers to buy and, simultaneously, providing demand for the mid and upper range homes in Austin. We need this “move-up churn”. It’s good for the real estate market and Austin’s economy.

But now let’s also imagine that in 5 years from now that the best interest rate available on a new mortgage is an unfathomable 6.75%. Don’t think it will go that “high”? That’s not ever a “high” interest rate! And yes, it will get that high again – eventually. How hard will it be for a move-up buyer to let go of that 3.75% loan on the current home? Very hard, I’m going to bet.

I think the psychological urge to hold onto that loan is going to be very strong. And I think it will factor into the move-up decision more than we may currently realize.

We now have a large percentage of the home buying population who’ve never seen an interest rate above 7%. I’m still paying 8% on two loans I have from 2001. I thought 8% was a good rate at the time, for investment property. Historically, for most baby-boomers, anything below 7% or 8% has been a decent interest rate, because those are the rates we’ve always known – up until the mid-2000′s. Now, the “new normal” for interest rates is below 5%.

Moving up from a home with a 4% interest rate to one with a 6 or 7% interest rate creates a different math equation than making the move with an interest-rate-neutral new loan, or as in recent years, getting more house while also dumping a higher interest loan in exchange for one at an historic low rate.

Let’s see how it looks on a chart and how the math worked out for a recent move-up buyer, going from an interest rate in the high 6′s to an interest rate of 4%.

Existing Home Move-up Home % increase
Purchase Price $200,000
2010 Value $225,000 $300,000 33%
Interest Rate 6.75 4.0 -41%
Prop Tax $431 $575 33%
Insurance $94 $125 33%
Princ+Int (PI) $1,038 $1,146 10%
Total PITI $1,563 $1,846 18%

Under the above scenario, a buyer gets a home that is 33% better (measured by market value) but does so with only an 18% increase in monthly payment because the principle + interest portion of the new payment is only 10% ($108) higher than the old payment. Of course the taxes and insurance are 33% higher because they are a function of value. Still, not a bad deal from a monthly budget standpoint, right? The buyer get’s a way better home with barely a $300/mo. increase in total payment.

But let’s see what the same scanario might look like in 5 years, with interest rate on the new loan increasing instead of decreasing.

Existing Home Move-up Home % increase
Purchase Price $200,000
2015 Value $225,000 $300,000 33%
Interest Rate 4.00% 6.75% 69%
Prop Tax $431 $575 33%
Insurance $94 $125 33%
Princ+Int (PI) $764 $1,557 104%
Total PITI $1,289 $2,257 75%

For our hypothetical 2015 move-up buyer, in order to get a home that is 33% better, the buyer will have to be willing to accept a 75% increase in monthly payment (PITI), and a whopping 104% increase in the principle + interest portion of the payment. That’s almost a $1,000 increase in the monthly payment whereas our 2010 buyer accomplished the same move-up with only a $108 bump in monthly payment. What a contrast.

If I were this future move-up buyer, I’d be comparing a move-up to another option. How about a home remodel with $50K loan at 8% on a 15 year note that will increase the monthly payment by only $478?

Finally, if the belt tightening of Americans continues, and baby boomer go on a housing diet as empty-nesters, more people might be moving down instead of up. Sylvia and I relocated to a smaller, cheaper home in Westlake this year. In doing so, we paid off our $400K loan on the old house which had a 5.95% interest rate and obtained a new $270K loan at 4.75% (we missed that 4% bubble as we locked in last June). Thought we were mostly motivated by getting into the Eanes ISD, the financial effect of the move-down was turbo-charged by the accompanying drop in interest rate. Future move-down people, if leaving behind a 4% interest rate – even on a higher loan amount – will realize less of a budget advantage than we are enjoying.

Of course time will tell, and nothing can be accurately predicted, but I do think those Austin buyers who were fortunate enough to obtain loans at or below 4% are going to covet those loans and find themselves feeling resistance toward doing a trade up such as the one outlined above.

Comment by whyoung
2010-12-20 08:17:33

“let’s also imagine that in 5 years from now that the best interest rate available on a new mortgage is an unfathomable 6.75%”

LOL

In the early 1980’s rates were in the teens.
http://www.freddiemac.com/pmms/pmms30.htm

 
Comment by Professor Bear
2010-12-20 08:17:39

‘Move-up buyers play an important role in the real estate market by providing resale housing stock for first timers to buy and, simultaneously, providing demand for the mid and upper range homes in Austin. We need this “move-up churn”. It’s good for the real estate market and Austin’s economy.’

That was good for San Diego’s economy as well, back before everyone was so underwater that there were no virtually no wannabe move-up buyers who could come up with a down payment. I guess Austin doesn’t have a California-sized underwater problem, then?

Comment by Brett
2010-12-20 11:15:25

Austin home prices haven’t come down much.
Thousands of people are moving here from all over the country because umepkoyment is only 7%.
Lots of demand for apartments and houses down here

 
 
Comment by Professor Bear
2010-12-20 08:21:38

“… more people might be moving down instead of up.”

Bingo! Suppose you are a retiring empty-nester in a McMansion tract home development where lots of your neighbors are retiring empty-nesters. A race to sell could quickly ensue among those competing for the minuscule-few move-up buyers left standing. The way such races are resolved is through brutal price wars.

 
Comment by Brett
2010-12-20 09:01:19

I think it’s smart to buy when interests are high.
Most people don’t look at the price of the house; they look at whether they can afford the monthly payment.
If the monthly payment goes up because interest rates go up, people will buy cheaper homes that fit their budget… something has to give!
If you buy when interests are high, then you end up with a smaller principal… you may be able to refinance later on at a lower rate…

 
Comment by edgewaterjohn
2010-12-20 09:12:23

Being trapped s*cks.

Comment by Professor Bear
2010-12-20 09:36:03

“You can get any kind of house you want. You can even get stucco. (BOY, can you get stucco…)”

– Groucho Marx –
The Coconuts

 
 
Comment by oxide
2010-12-20 09:12:58

$50K won’t buy much in a home remodel. Last week I was able to catch and episode of the HGTV “save my bathroom” show where they totally gutted and redid a standard bath to be uglier than the old bath. Budget: $29K. Didn’t add a square inch to the house.

I suspect all these downsizers are going to have a hard time finding good downsized housing stock. just wait until those aging baby boomers, longing for the freedom of a burned mortgage and and no shared walls, find out that most of the recent small builds have been attached product… with attached HOA fees.

Comment by Steve J
2010-12-20 10:03:41

$50k can but a lot of reno if you skip the granite and stainless steel appliances.

Comment by whyoung
2010-12-20 11:26:55

And you get over the need to keep up with the Joneses.
A lot of perfectly serviceable kitchens and baths have been ripped out in because of fashion, not function.

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Comment by ecofeco
2010-12-20 19:18:38

$29K for a bath remodel?! WTF?!

Truly, you can’t fix stupid.

 
 
Comment by WT Economist
2010-12-20 09:35:08

“Fast forward 5 years to 2015 and imagine they now have a 6 year old and a 3 year old…The career is going well, income is up, savings account is healthy, cars and student loans are paid off, the economy is good and the house is starting to feel a bit small.”

This is the sort of thing that has to go way. I can understand being in this situation is they really wanted to stay in Austin but were forced to move in five years for job reasons. But Americans have to get used to the idea of buying once, and for all, with the intention of settling into a community. If you are going to be moving anyway, RENT.

 
Comment by oxide
2010-12-20 11:40:46

I find it amusing that $200K is considered a trade-up from a starter home. In the DC area $200K still won’t buy you a condo. It MAY buy you a older townhome if you like a 1.5 hour commute…one way.

Comment by michael
2010-12-20 12:21:07

“In the DC area $200K still won’t buy you a condo. It MAY buy you a older townhome if you like a 1.5 hour commute…one way.”

true that.

 
Comment by Brett
2010-12-20 12:35:05

But you also don’t have the 2.5% tax property bill we have in Texas!

 
Comment by CoSpgs4
2010-12-20 13:20:59

Somehow, I doubt that the average HH income in the DC area matches that of the rest of the USA, which is about $50K.

 
Comment by ecofeco
2010-12-20 19:21:42

200K will you buy a LOT of nice house in Texas.

Check out HAR.com for some idea.

 
 
Comment by ecofeco
2010-12-20 19:17:02

“Fast forward 5 years to 2015 and imagine they now have a 6 year old and a 3 year old. The career is going well, income is up, savings account is healthy, cars and student loans are paid off,”

Lost me right there. If all that is happening, we’re talking about a 2%er.

Once again, they are mistaking the map for the terrain. And if this is their linchpin buyer, they are in trouble.

 
 
Comment by Professor Bear
2010-12-20 08:37:54

Despite our supposed drought, San Diego is not running out of water just yet…

Rain, Winds Cancel Parade of Lights
By CHRIS CHAN
Updated 5:45 AM PST, Mon, Dec 20, 2010

The U.S. Coast Guard canceled the Parade of Lights boat parade on Sunday due to windy and rainy weather. It’s the first time in 39 years that the parade of boats in the San Diego Bay has been canceled.

“The winds by Shelter Island were quite strong and we didn’t want to risk anyone getting hurt,” said Dan Schafer, Parade of Lights Committee member.

Comment by Professor Bear
2010-12-20 09:46:11

CA is drowing in “drought” conditions…

Calif. rain shatters records, and more is coming
By JOHN ROGERS Associated Press The Associated Press
Monday, December 20, 2010 9:53 AM EST

LOS ANGELES (AP) — A storm walloped parts of California with up to 7 inches of rain and spawned minor flooding, mudslides and road closures Monday, but forecasters warn the bad weather’s real impact may be yet to come.

More than 3 additional inches of rain expected across the region by Wednesday will hit already saturated hillsides, increasing the possibility of slides and flash floods, said Stuart Seto of the National Weather Service.

The relentless rains that pounded California through the weekend smashed rainfall records, caused numerous traffic accidents, downed trees and forced the cancellation of some horse races.

Comment by Arizona Slim
2010-12-20 10:00:33

We’re expecting rain here later this week. And we need it! Send it to us, California!

 
Comment by sfbubblebuyer
2010-12-20 11:33:34

Oh, god! NOT THE HORSE RACES! I wanted to see tiny men flogging hard working beasts while riding in relative comfort atop them. I guess I’ll have to wait for tax season.

 
Comment by ahansen
2010-12-20 19:34:05

Newsflash!

Bakersfield is underwater!

 
 
Comment by Professor Bear
2010-12-20 11:31:57

I already knew California had an ‘underwater’ problem (at least with respect to mortgages), but this is getting ridiculous!

Southland slogs through storm system of a decade

Sunday’s storm brought some floods, mudslides and record-breaking rainfall, and there’s more to come. Three new storms will hit by Thursday in a weather system seen only once every 10 to 15 years.
Rain storm

Steve Gurrola walked down the street to see a huge fig tree toppled over in Sunday’s storm. It fell onto an apartment building on Centinela Avenue in Mar Vista. (Katie Falkenberg, For The Times / December 18, 2010)

 
Comment by CharlieTango
2010-12-20 12:26:24

we are now in day 3 of 3-4′ of snow per day.

its going to get ugly here, biggest snow i’ve seen here in 30+ years

been 1 death in our neighborhood already, guy drove strait when the road turned and he fell 100′ right next to a house full of people. took 3 days for someone to realize what happened and get his body

roof / tree sheds, getting stuck (your body phisically) and avalanche where no avalanche danger useually exists, and down the hill a bit flash floods, they are the killers.

Comment by ahansen
2010-12-20 19:37:36

Winter of ‘69 in Mammoth Lakes saw us climbing out upper story windows onto the roof to get to the street. IIRC nearly 100 homes (mostly in the “ghetto”) exploded from gas build-up, and hundreds of abandoned cars were squashed by snow and snow plows. Best winter vaca of my life!

 
 
Comment by Professor Bear
2010-12-20 13:13:35

These drought conditions are making me feel unsettled.

Calif. flooding forces evacuation in farm belt
(AP) – 1 hour ago

MCFARLAND, Calif. (AP) — Authorities say major flooding in California’s San Joaquin Valley is forcing evacuation of 2,000 residents of the farming community of McFarland.

The evacuation was called Monday after days of record-setting rain in California.

Kern County fire spokesman Sean Collins estimates between 400 and 500 homes are in danger of flooding in McFarland.

The source of the flooding is not clear but may be from overflowing irrigation canals that supply water to farms.

LOS ANGELES (AP) — A storm pounding California with record rain and heavy snow spawned minor flooding, mudslides, small evacuations and road closures Monday, but forecasters warned that the bad weather’s worst impact may be yet to come.

Virtually the entire state was affected, from coastal cities to the Central Valley, Sierra Nevada and southern deserts. Rainfall records fell, numerous traffic accidents snarled roads, trees tumbled and even some horse races had to be canceled.

Some locations in Southern California received more than 12 inches of rain, said meteorologist Jamie Meier of the National Weather Service. It was the most rainfall in one storm event since 2005, he said.

The storm was expected to intensify Tuesday night and Wednesday, with between five and 10 more inches.

“That will make for a pretty good wallop, especially considering how dry things have been for the last two years,” Meier said.

 
Comment by CharlieTango
2010-12-20 13:55:20

This storm has broken the record of the snowiest December ever recorded since first recording in 1969! [mammoth mtn ski area]

 
 
Comment by Professor Bear
2010-12-20 08:44:34

I kinda sorta wish Eddie were still posting here, as I would like an updated opinion on whether we are still on track for hitting DJIA = 12K by year end.

Perhaps today’s opening bell plunge is just a head fake before the race into the end zone?

Dow Jones Industrial Average

Market open
DJIA 11,469
Change -23.05 -0.20%
Volume 28.98m
Dec 20, 2010 10:39 a.m.

Comment by edgewaterjohn
2010-12-20 09:07:50

Light volume days ahead, anything could happen.

Friday’s op ex volume was the highest in quite some time though, so the rest of the year’s trading is kind of an after thought at this point.

Comment by arizonadude
2010-12-20 09:28:18

I think it will be basically flat for rest of year.I’m more interested what will happen after the first.Will we have people dumping their winners or more spiked koolaid?

Comment by Professor Bear
2010-12-20 09:37:57

Does ‘flat’ mean ‘down’ in your world?

Dow 11,452 -40 -0.35%

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Comment by WT Economist
2010-12-20 09:32:36

We’re a lot closer to 12,000 than we are to what stocks are actually worth, based on the returns shareholders will actually get.

Comment by Arizona Slim
2010-12-20 09:37:35

We’re a lot closer to 12,000 than we are to what stocks are actually worth, based on the returns shareholders will actually get.

Bingo! And it’s precisely the reason why Yours Truly is keeping money out of the stock market.

 
 
Comment by Professor Bear
2010-12-20 12:37:33

DJIA = 11,500 or bust!

 
 
Comment by Professor Bear
2010-12-20 08:48:09

What better place to troll for organized crime gangs than on Wall Street?

INSIDER TRADING
Sopranos: Wall St. edition

Wiretaps and insiders are standard in pursuing organized crime, but are largely new to Wall Street, and their use is long overdue (First Take).

Dec. 20, 2010, 10:02 a.m. EST
Insider trading ring, Bada Bing!
Commentary: Will stepped-up probes lead to convictions?

Comment by Hwy50ina49Dodge
2010-12-20 10:41:14

“Commentary: Will stepped-up probes lead to selected convictions?”

(Followed by the rigid application of FEDERAL MINIMUM sentencing laws for sure.) ;-/

Comment by ecofeco
2010-12-20 19:24:05

We have a winner.

 
 
 
Comment by AbsoluteBeginner
2010-12-20 09:04:40

It is time of year again for a good seasons greeting from the past:

http: // www (dot) youtube (dot)com/watch?v=wPN-LmEdBuA

 
Comment by wmbz
2010-12-20 09:18:23

Chinese enduring power shortages, rationing as power suppliers run short of coal

SHANGHAI (AP) — Communities in central and northern China are facing power cuts and rationing as winter coal supplies fall short of surging demand.

Cold weather and transport disruptions typically cause shortages most years, but the problem has been complicated by coal producers’ unhappiness over price controls that are crimping their profits.

China’s State Grid, the government power provider, said in reports seen Monday on its websites that recent winter storms had pushed demand higher while worsening traffic bottlenecks, hindering coal deliveries.

Phone calls to the State Grid’s branches in central China’s Henan, Shanxi, Shaanxi, Chongqing and Hubei provinces — the areas reportedly worst affected — rang unanswered Monday.

China depends on coal for more than three-quarters of its electricity and also to fuel centralized winter heating systems in northern cities. Spates of unusually cold weather often strain supplies, with power rationing not uncommon.

About 620,000 households were left without power due to bad weather in Zhejiang, a province west of Shanghai, a report on the State Grid website said. It said power was being restored.

Coal suppliers have also held back on shipments to power companies because contract prices for coal are below market prices, a chronic problem in this state-dominated economy. China has had similar troubles in maintaining supplies of gasoline and diesel fuel, as refiners balked at selling at below-market prices.

Comment by ecofeco
2010-12-20 19:25:24

Record conditions in southern China are causing the shortage.

 
 
Comment by wmbz
2010-12-20 09:36:15

“Germany’s controversial approach to fighting the euro crisis has split the European Union. Some countries are complaining about Berlin’s rigid course, while others accuse Chancellor Merkel of betraying the European project. The only thing they can agree on is that the EU needs Germany as a motor if it is to survive.”

~ Der Speigel

Comment by Arizona Slim
2010-12-20 09:38:35

The only thing they can agree on is that the EU needs Germany as a motor if it is to survive.

And what would happen to the editors of Der Speigel if they didn’t say this? Sturm und drang?

 
Comment by sfbubblebuyer
2010-12-20 12:01:04

The question is, what does Germany need the rest of the EU for?

Comment by Carl Morris
2010-12-20 13:14:14

If they were smart they’d outsource all their grunt work to the poorer countries and become more of a service economy. Oh wait…

 
 
Comment by ecofeco
2010-12-20 19:28:03

HAHHAHAAHA! The country that is the nicest to it’s workers and firm believers in high quality control, and who people said wouldn’t survive it’s socialist ways, turns out be the strongest.

Germany, Ur doin it wrong!

 
 
Comment by RioAmericanInBrasil
2010-12-20 09:39:06

Santa Claus is skinnier in Brazil, traffic is way worse in December, it’s really hot and they celebrate Christmas mostly on the 24th.

Comment by In Colorado
2010-12-20 10:08:09

Do they celebrate Kings Day on Jan 6, or is that a Spanish only thing?

Comment by RioAmericanInBrasil
2010-12-20 10:36:22

Do they celebrate Kings Day on Jan 6, or is that a Spanish only thing?

Yes, they call it 3 Kings Day and it comes from their Portuguese tradition. Brazil would never miss a chance to celebrate any holiday and they have tons of them.

Some parts of Brazil celebrate it more than Rio does too.

Comment by DennisN
2010-12-20 11:07:56

I was amused to discover where the name “Kings Canyon National Park” came from. Turns out the first Spaniards there arrived on the 3 Kings day. So it’s sort of analogous to Easter Island.

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Comment by In Colorado
2010-12-20 12:47:39

The funny thing is that the Magi were neither kings (they were probably astrologers) nor were they numbered. There were 3 categories of gifts mentioned, gold, frankincese and myrh, nut the number of the Magi is never mentioned.

There are even 3 apocryphal names for them: Melchior, Gaspar and Balthazar.

 
Comment by DennisN
2010-12-20 13:49:49

“We were led by a star.”

“Led by a bottle more likely”. :lol:

 
Comment by DennisN
2010-12-20 14:13:49

Ah here’s the story more completely.

During two expeditions in 1806, Ensign Gabriel Moraga mapped and named a number of features along the eastern edge of the San Joaquin Valley, including the San Joaquin, Merced, and Kings rivers. In the Spanish fashion each feature received an ecclesiastical name appropriate for the day of discovery. Because Moraga camped on the banks of the Kings River on January 6, the twelfth day of Christmas, he named the stream “the river of the holy kings” [el rio de los santos reyes] after the three magi of the Christmas story.

 
 
 
 
Comment by michael
2010-12-20 10:18:25

don’t forget Festivus on the 23rd.

Comment by In Colorado
2010-12-20 10:52:10

I doubt that Seinfeld was a big hit in Brazil

 
 
 
Comment by Professor Bear
2010-12-20 09:41:33

I have to say that I have not personally encountered Santa this year, as I have yet to set foot in a mall this holiday season. Maybe tomorrow night?

In tough economy, Santas are also suffering
By TAMARA LUSH Associated Press The Associated Press
Monday, December 20, 2010 5:43 AM EST

In this photo taken Friday, Dec. 17, 2010, Santa John Wenner sits in his car in… (AP Photo/Mel Evans)

ST. PETERSBURG, Fla. (AP) — Craig McTavish — a.k.a. Santa — has the beard. He has the belly. He even has a few tricks up his sleeve, like pulling up to parties on his Harley-Davidson in full Kris Kringle garb.

But there’s one thing he doesn’t have: work.

For freelance Santas, this holiday season has been more “no, no, no,” than “ho, ho, ho.” Bookings have declined as paying $125 an hour for Santa to visit a holiday party has become an unaffordable luxury. It’s the second year of declining parties and events, Santas say.

“This year has been a bust as far as making any money,” said McTavish, a retired firefighter who co-owns a landscaping business with his son. “I’ve booked nothing. Usually there’s always something for Christmas Eve, but I don’t even have that.”

In addition to knowing which children have been bad or good, the modern-day Santa also hears which families don’t have enough money for presents.

“You can see the downturn from the chair,” said Nicholas Trolli, the president of the Amalgamated Order of Real Bearded Santas — a 1,700-member social group the Boston Herald once dubbed “The Nation’s Premier Fraternity of A-List Santas.”

Comment by edgewaterjohn
2010-12-20 09:45:53

Bernanke has a real beard.

Just sayin’

Comment by Hwy50ina49Dodge
2010-12-20 10:35:44

“Bernanke has a real beard.

Just sayin’” ;-)

Perennial “Eeyore Award” winner:

I have to say that I have not personally encountered Santa this year

Yeah, just as I thought… few us here on the HBB ever make the trip up to the Fed’s “Discount window” ;-/

 
 
Comment by Ben Jones
2010-12-20 09:47:41

‘ the Amalgamated Order of Real Bearded Santas ‘

Just when you thought you’ve heard everything.

 
Comment by RioAmericanInBrasil
2010-12-20 09:52:35

Amalgamated Order of Real Bearded Santas — a 1,700-member social group the Boston Herald once dubbed “The Nation’s Premier Fraternity of A-List Santas.

I knew Red Santa was a socialist all along.

Comment by ecofeco
2010-12-20 19:30:36

And a dang commie too, the way redistributes the wealth!

 
 
Comment by polly
2010-12-20 11:50:11

“Bookings have declined as paying $125 an hour for Santa to visit a holiday party has become an unaffordable luxury.”

I don’t suppose it occurred to him to lower his rate a bit, did it?

Comment by sfbubblebuyer
2010-12-20 12:04:14

For $125 an hour, you can buy a pretty dang good santa suit yourself.

 
Comment by In Colorado
2010-12-20 12:41:44

“I don’t suppose it occurred to him to lower his rate a bit, did it?”

Funny thing about the housing bust. Resdiential construction has ground to a standstill, but unemployed subs keep wanting to charge bubble era rates for repair work. Its almost like they are in collusion. I really had to ask around to find a painter who would paint my house for less than $7000 (I guess those Diesel F-350 payments must be huge, I found a guy who did it for $3000). I had a similar experience with roofers. Most wanted to charge $100 just to come and look at the roof. I did find a guy who fixed all kinds of stuff on the roof for $500 (I’ll bet one of the F-350 guys would have charged me $2000)

 
Comment by Kim
2010-12-20 14:14:43

“I don’t suppose it occurred to him to lower his rate a bit, did it?”

Tough to compete with “free”. Santa visited my child’s school twice this season, both times on a (parental) volunteer basis. IMO both looked fantastic, really got into the character, and did the job as well as any pros could have done.

 
 
 
Comment by lint
2010-12-20 09:49:53

CNN: People In South Korea Being Sent Into Military Bunkers

Comment by In Colorado
2010-12-20 10:10:09

Could this be the overdue black swan?

Also, it might become tricky to get spare parts for your Hyundai or KIA.

Comment by polly
2010-12-20 11:51:10

A lot of Hyundais are made in Alabama.

Comment by In Colorado
2010-12-20 12:34:44

Assembled in Alabama. Where are the parts made?

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Comment by Arizona Slim
2010-12-20 12:47:23

Parts manufacturing is an international business. So, the answer to your question is: All over the world.

 
Comment by In Colorado
2010-12-20 16:06:00

I strongly suspect that the Korean content in those “Made in the USA” KIAs and Hyundais is much higher than say a Chevy or a VW.

 
 
 
Comment by sfbubblebuyer
2010-12-20 12:08:39

This is just a Black Swan drill. If it were a real Black Swan, Natalie Portman would be telling you to not panic and head to your shelters.

 
 
 
Comment by lint
2010-12-20 09:52:47

Question for you folks in the cities and suburbs:

Are any of you at all concerned about what will happen to you when the shtf , the currency collapses, and just in time supply chains disintegrate?

Comment by Ben Jones
2010-12-20 10:01:57

Visit the local survivalists bunkers and take their food and gold?

Comment by Steve J
2010-12-20 10:06:44

Hahahaha…

 
Comment by lint
2010-12-20 10:13:58

You would also be receiving their lead!

Comment by Ben Jones
2010-12-20 10:22:09

There is a saying that the only precious metals one needs is lead and gunpowder wrapped in brass. It’s called survival of the fittest!

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Comment by whyoung
2010-12-20 10:02:22

Yes, of course.
But being in a rural area won’t necessarily be much better if you aren’t off the grid and a skilled gardener and canner.

 
Comment by RioAmericanInBrasil
2010-12-20 10:40:02

Are any of you at all concerned about what will happen to you when the shtf , the currency collapses, and just in time supply chains disintegrate?

Not that much because I live in a city that has lived through most of that stuff a few times the past 25 years.

Comment by lint
2010-12-20 11:31:50

25 years of past data do not contain any relevance unless that data includes a currency collapse and 75% unemployment.

Better to find a a hideout in the country.

Comment by RioAmericanInBrasil
2010-12-20 21:29:12

25 years of past data do not contain any relevance unless that data includes a currency collapse and 75% unemployment.

LOL. I’m so scared.

Currency collapse and 75% unemployment? Where? Not here dude. And not in the USA.

You don’t know what you’re talking about. This ain’t Iraq.

I don’t think you know how things like this really work regardless or not if you want to tout silver.

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Comment by FB wants a do over
2010-12-20 10:41:33

Hey lint, thought you might appreciate this if you haven’t already seen it.

http://www.youtube.com/watch?v=e7-ow-hS5Ms

Comment by lint
2010-12-20 11:33:24

Nice video!

 
 
Comment by WT Economist
2010-12-20 11:44:08

No, because I live in a city where 36 percent of the population is foreign born and a higher share are that or the children of foreign born. As the percent foreign born has gone up, the crime rate has gone down.

People from other places will not be driven to violence by the coming hardship, and may not even recognize it as such. The only risk is from the kids who grew up here and watched a lot of American TV.

 
Comment by Al
2010-12-20 12:40:51

I think your implication is that food won’t be available and riots will occur. Seems reasonable. However, I wouldn’t assume that rural areas will be much safer. Desperate, hungry people will migrate to where the food is and bring their violence with them.

Preparing for economic collapse isn’t much different from preparing for a asteroid strike.

Comment by lint
2010-12-20 17:06:38

Al,

You have been poodle-fied….all the survival instincts eliminated due to lack of use.

Poodles know not what comes their way nor do they care.

 
 
Comment by Happy2bHeard
2010-12-21 00:14:30

I have exceeded the average lifespan of folks who lived 200 years ago. My joints limit my mobility and I become more decripit every year. My children are grown. I will do my best to contribute to whatever community I am in for as long as I can. If conditions become truly dire, I do not expect to survive. My children and grandchildren will have to do the best they can - with or without me.

 
 
Comment by wmbz
2010-12-20 09:59:12

More see walking on mortgage as a viable plan
‘Strategic default’ losing stigma as homes go deeper underwater
MSNBC

More Americans than ever are showing a willingness to walk away from their underwater homes, according to a recent survey. Chris Kelly is a perfect example of someone who never thought she would send the bank “jingle mail.” But she did.

Until last year Kelly, a 46-year-old administrative assistant, was living in a 3,000-square-foot home she owned with her ex-husband in the Seattle suburbs.

The duo had put the three-bedroom, three-and-a-half bath home on the market before finalizing their divorce in the spring of 2009 but had no luck luring move-up buyers to the $600,000 home even after price markdowns.

Kelly wound up living there solo, struggling to make the mortgage payments. But as she kept writing checks, and worrying, she became aware that she’d have to make a hard choice: Leave the house while she still had decent savings, or pay until she’d emptied out all her accounts and then enter foreclosure.

In the latter scenario, she’d have to look for a lease with no money left for a deposit. Either way, she’d lose the home, whose value had dropped underwater — below what the couple owed on it.

“It was a pretty clear decision,” says Kelly, who now lives in Austin, Texas. “I knew I had to walk away. The longer I stayed there, the worse my credit would be and the harder time I’d have finding a rental.”

So a year ago she walked way, joining the growing number of Americans willing to turn their backs on homes they can neither sell nor afford to keep. The real estate industry calls this “strategic default,” referring to people who choose to walk away even when they can technically afford to continue paying their mortgage.

Nearly half, 48 percent, of homeowners with a mortgage said they would consider walking away from their home if they owed more on it than it was worth, according to a Harris Interactive survey released this month. The survey was conducted in November for real estate listings site Trulia and foreclosure research firm RealtyTrac.

Comment by Arizona Slim
2010-12-20 10:06:05

Our local law prof troublemaker, Brent White, has written a book. Title: Underwater Home. It’s basically a how-to guide for strategic default.

Comment by Al
2010-12-20 12:45:17

I suppose there are 2 forms of strategic default.

The example in the article is for someone who can pay for now, but has reason to believe that default is innevitable. Such people are just making a choice on timing and giving themselves a leg up on the next stage in life.

The second type is for someone who can continue to pay indefinitely but would rather have the bank eat the loss than themselves.

 
 
Comment by rms
2010-12-20 13:43:00

Nancy Sinatra - These Boots Are Made For Walking (1966)
http://www.youtube.com/watch?v=yRkovnss7sg

 
Comment by Kim
2010-12-20 14:08:23

“‘Strategic default’ losing stigma as homes go deeper underwater”

“Losing stigma” is a bit of an understatement, no? These days its practically considered financially savvy, especially if the FB lived there for two years sans payments.

 
 
Comment by wmbz
2010-12-20 10:04:19

This Bonus Season on Wall Street, Many See Zeros. ~ NYT

Bonus season is fast approaching on Wall Street, but this year the talk does not center just on multimillion-dollar paydays. It’s about a new club that no one wants to join: the Zeros.

Drawn from a broad swath of back-office employees and middle-level traders, bankers and brokers, the Zeros, as they have come to be called, are facing a once-unthinkable prospect: an annual bonus of … nothing.

“It’s going to a cause a lot of panic on Wall Street,” said Richard Stein of Global Sage, an executive search firm. “Everybody is talking about it, but they’re actually concerned about it becoming public. I would not want to be head of compensation at a Wall Street firm right now.”

In some ways, a zero bonus should not come as a surprise to many bankers. As a result of the 2008 financial crisis, Wall Street firms like Goldman Sachs and banks like Citigroup raised base pay substantially in 2009 and 2010. They were seeking to placate regulators who had argued that bonuses based on performance encouraged excessive risk.

At Goldman, for instance, the base salary for managing directors rose to $500,000 from $300,000, while at Morgan Stanley and Credit Suisse it jumped to $400,000 from $200,000.

Even though employees will receive roughly the same amount of money, the psychological blow of not getting a bonus is substantial, especially in a Wall Street culture that has long equated success and prestige with bonus size. So there are sure to be plenty of long faces on employees across the financial sector who have come to expect a bonus on top of their base pay. Wall Streeters typically find out what their bonuses will be in January, with the payout coming in February.

Comment by Steve J
2010-12-20 10:09:23

A friend at Fidelity said that everyone is getting an extra weeks pay.

Comment by lint
2010-12-20 17:13:45

I put one of my principals into silver in 2004. All his assets up t0 that point were in FMAGX(Fidelity Magellen).

See the performance chart here(move the time frame to the left.

http://stockcharts.com/freecharts/perf.html?silver,%20fmagx

This principal is quite happy to say the least.

 
 
Comment by Hwy50ina49Dodge
2010-12-20 10:24:50

So there are sure to be plenty of long faces on employees across the financial sector who have come to expect a bonus on top of their base pay. ;-)

It’s about their year long bottom line right?, what they can’t figured that out?

Radical Rick: “How tough is it Hwy?”

Hwy: “It’s tough man, it’s real tough…”

 
Comment by X-GSfixr
2010-12-20 11:19:00

Have them call 1-800-555-WAAH

Cry me a river. Out here in the real world, “bonus” is spelled “bone-us”

They don’t even pay for the Astroglide anymore.

Comment by Al
2010-12-20 12:50:08

“…the psychological blow of not getting a bonus is substantial…”

How about the psychological blow of being identified as a parasite on society, and realizing that a growing portion of society would cheer as you jumped from your office window?

Comment by Professor Bear
2010-12-20 20:53:28

I don’t expect that to bother many of them…

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Comment by ecofeco
2010-12-20 19:38:13

Hearing anyone whine about how tough life is while making 200k+ is about as pathetic as it gets.

Man up, girlie-boys.

 
 
Comment by oxide
2010-12-20 11:47:54

I would be overjoyed if bonuses actually were based on performance. :roll:

Comment by sfbubblebuyer
2010-12-20 12:12:20

They should have all gotten a negative 1000% bonus for 2008. They still owe us money from bailing their butts out, and every dime of bonus money should be going to repay that before they see a bent penny of it.

 
 
 
Comment by Ben Jones
2010-12-20 10:04:30

A new meaning for don’t touch my junk…

‘LONDON (AP) — Ratings agency Moody’s on Monday downgraded four Irish banks and an insurer, dropping two of them to junk status’

Comment by lint
2010-12-20 10:15:33

If Ireland is smart then they will do what Iceland did.

G*D*M the bankers!

 
Comment by Hwy50ina49Dodge
2010-12-20 10:18:57

Moody’s ;-)

Oh, NOW we should BELIEVE them…

 
 
Comment by Professor Bear
2010-12-20 10:11:24

Dhaka’s stock exchange: embers
December 20, 2010 12:40pm
by Amy Kazmin

The Dhaka Stock Exchange had a roaring rally for much of this year, rising more than 90 per cent at its peak, fuelled by easy liquidity and a flood of new investors, with little experience - or expectation - of an equity market’s volatility.

But now Bangladeshi regulators must try to deal with a seriously overvalued market - the market is currently trading at price-to-earnings ratios of around 26 to 27 - and investors with no tolerance for any downward correction.

That difficulty came into clear view on Sunday, when hundreds of angry investors protested in front of the stock exchange after stocks tumbled 6.7 per cent, as a result of measures taken by regulators to cool the overheated market.

“It’s a difficult time for the Securities and Exchange Commission,” said Ifty Islam, managing partner at Asian Tigers Capital Partners, a Dhaka-based investment bank. “It’s not just a financial phenomenon, to some extent it’s a political phenomenon.”

Bangladesh’s stock-market is almost entirely driven by local investors, with just one percent of the market held by foreigners. Retail investors have also jumped into the market in recent years, with the number of retail accounts rising from 500,000 in 2006 to more than 3m now.

“Many of those stock market investors are first time investors - very new in the market, often buying without much fundamental knowledge, or analysis of what they are buying,” said Mr Islam. “They are buying because its going up. But if many of these investors take to the streets, it creates major challenges for the regulators.”

Comment by sfbubblebuyer
2010-12-20 12:14:26

The obvious solution is to stand back and watch them implode.

 
 
Comment by Professor Bear
2010-12-20 10:13:08

Take it from a stock market commentator named Mr Islam. Now I know the world financial markets have blown a gasket…

 
Comment by michael
2010-12-20 10:16:01

saw a grossly illegally parked car at the mall this weekend with a bumper sticker that read “coexist”.

Comment by In Colorado
2010-12-20 11:41:30

I see those stickers all the time. Must be due to our proximity to the People’s Republic of Boulder.

Comment by Arizona Slim
2010-12-20 12:49:15

We have quite a crop of them here in Tucson. The Prius cars really seem to have an affinity for them.

I’ll confess to having no such stickers on my bike. But I do favor ones that say things like “Stop Driving, Start Thriving” and “One Less Car.”

Comment by X-GSfixr
2010-12-20 14:39:18

One of my favorite bumper sticker:

“Ted Kennedy’s car has killed more people than my Assault rifle”.

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Comment by jeff saturday
2010-12-20 17:07:34

My favorite bumper sticker:

” My kid cheated off of your honor student.”

 
Comment by DennisN
2010-12-20 19:18:35

Everybody in Boise liked my “Condi ‘08″ bumpersticker on my pickup truck when I moved here in 2006.

 
 
 
 
 
Comment by measton
2010-12-20 10:42:30

SHANGHAI – Communities in central and northern China are facing power cuts and rationing as winter coal supplies fall short of surging demand.

Cold weather and transport disruptions typically cause shortages most years, but the problem has been complicated by coal producers’ unhappiness over price controls that are crimping their profits.

All is well in China?
They want to keep their currency low but want to prevent the poor from rioting over high food and energy prices. What to do what to do.

Comment by yensoy
2010-12-20 10:51:53

I believe we are on the brink of massive wage inflation in China. Either that, or something far worse. China in 2010 feels like the US in 2007. Too much funny money sloshing around.

Comment by Carl Morris
2010-12-20 11:57:24

China in 2010 feels like the US in 2007 1929.

Comment by Hwy50ina49Dodge
2010-12-20 13:43:09

BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)

“TrueBambooLie™” ;-)

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Comment by measton
2010-12-20 10:43:43

WASHINGTON – For a guy who insists that federal bureaucrats make too much money, incoming House Majority Leader Eric Cantor sure doesn’t mind handing out handsome government raises of his own.

Cantor, the Virginia Republican who has led the GOP charge this year to freeze federal salaries, has boosted his congressional office’s payroll by 81 percent since coming to Congress in 2001 — about 8 percent per year through 2009. When he became minority whip last year, the office’s personnel expenses went up by at least 16 percent.

Hypocrits to the left, hypocrits to the right.
Here is my prediction, more spending from both sides, more tax cuts for the elite.

 
Comment by measton
2010-12-20 10:46:05

MADRID – The Moody’s rating agency is warning that it could downgrade the debt rating of Spanish banks dependent on help from the government to help them weather Europe’s debt crisis

Moody’s to rate Hell as hot, story at 5.

NYT had an article on some spanish developements that were sitting empty. Sounded like some of the worst states in the US. One had 3-400 units empty for 3 years.

Comment by measton
2010-12-20 10:49:54

This won’t help

BRUSSELS – The European Central Bank has sharply reduced its purchases of bonds from vulnerable governments such as Greece, Ireland, or Portugal, despite pressure to do more to help fight the continent’s crippling debt crisis.

In the week ended Dec. 17, the central bank spent only euro603 million ($793 million) on government bonds, down sharply from euro2.667 billion a week earlier and the lowest weekly amount since late October, data released Monday showed.

It’s a race to the bottom

The ECB signaled last week that it was growing uncomfortable with the risk government bonds were adding to its balance sheet — it asked national central banks to almost double its capital base.

Many analysts have warned that a bailout of Spain would overwhelm the eurozone’s existing financial backstops and could endanger the currency area as a whole.

A senior executive of one of the world’s biggest sovereign bond investors told German newspaper Die Welt that Greece, Ireland and Portugal should leave the eurozone to get their economies back on track.

In an interview published Monday, Andrew Bosomworth of Pimco Europe Ltd. said those three countries won’t be able to overcome their debt problem without restoring their competitiveness through a devaluation of their own currency to boost their exports or large transfers from other eurozone states.

 
 
Comment by wmbz
2010-12-20 11:12:37

California Mountains Face Crushing Snowfall
By Katie Storbeck, Meteorologist

A stormy weather pattern has settled in over the West, and California will endure the harshest conditions well into this week. While rain drenches much of the state, heavy snow will continue to pile up in the mountains.

Snowfall totals in parts of the Sierra Nevada reached 2-5 feet at many locations through Sunday afternoon.

Another 1 to 3 feet of snow can be expected in these areas through Monday night.

This means that storm totals will reach as much as 6 to 8 feet of snow, with locally higher amounts in some of the peaks above 6,000 feet.

On top of Mammoth Mountain Ski Resort, at an elevation of around 11,000 feet, 9 feet of snow were measured Sunday morning!

At the base of Mammoth Mountain Ski Resort, at an elevation of around 8,000 feet, 6.5 feet of snow were measured. The all-time yearly snowfall record at the base is 139 inches, and the snowfall through Sunday morning brought the snowfall to 107 inches for this year so far.

Travel will become impossible in these areas. Officials may be forced to close the mountain passes, including I-80’s Donner Pass as the snow continues to pile up.

On top of the heavy snowfall, gusty winds will lead to blowing and drifting snow. The wind-whipped snow could create white-out conditions for a time.

Wintry weather can be expected in the Cascades and northern Rockies today as well.

While accumulations will not be quite as hefty, as much as a foot of snow will blanket the higher mountains of Wyoming, Utah and Colorado through tonight. Travel could become slippery and slower along portions of Interstates 84, 80, 70 and 15 as a result.

Comment by SaladSD
2010-12-20 18:56:22

These are the extreme conditions that faced the Donner Party 140 years ago. An amazing account of their experience is “Ordeal by Hunger” by George R. Stewart.

 
 
Comment by wmbz
2010-12-20 11:28:04

Austin home sales fall 20% in Nov.
Austin Business Journal

Austin home sales in November were down 20 percent from the same month in 2009, with local Realtors attributing the decline to the original deadline last year for the federal first-time homebuyer tax credit.

The volume of Austin area home sales this November was 1,243, down 20 percent from the same month in 2009 with $311.5 million in single-family properties sold.

However, year-to-date, 16,477 homes have been sold, down only 6 percent compared with the same time period in 2009.

“As has been the case for much of 2010, year-to-date figures paint a clearer picture of market conditions than month-to-month comparisons,” Austin Board of Realtors Chairman John Horton said. “That’s particularly true this month because we’re comparing results to a month in 2009 when the original home buyer tax credits were set to expire, before a last-minute decision extended them through the first part of 2010.”

 
Comment by measton
2010-12-20 11:28:58

ATHENS (AFP) – Greek Prime Minister George Papandreou on Monday slammed the “unacceptable logic” of debt rating companies who have repeatedly downgraded the sovereign and bank standings of weak European economies in the past week.

“Because of the crisis in the eurozone, we have a barrage from rating houses who downgrade countries or place them on negative watch,” Papandreou told a cabinet meeting, according to his office.

“This is an unacceptable logic on their part,” he said, noting that the same companies had given top marks to US banks shortly before the collapse of toxic subprime loans that sparked the global economic crisis.

My guess is that Greece would get much better ratings if they hired Moody’s to teach them how to get better ratings. Isn’t that how the large banks did it.

 
Comment by wmbz
2010-12-20 11:45:51

Good thing no other cities are facing this kind of problem…

Battle lines drawn over city pensions
Houston mayor wants benefits cut, takes fight to Legislature
HOUSTON CHRONICLE

Instability in its three pension systems is the greatest threat to Houston’s financial solvency, city officials and financial analysts say.

Within three years, according to an actuarial study commissioned by the city, the pension for firefighters will require the city to contribute 45 percent of its payroll costs for that retirement plan, a burden Mayor Annise Parker says is unsustainable.

The other two plans are in even worse shape. The police and municipal employee pensions are underfunded by $2.1 billion, roughly the equivalent of what the city spends annually for public safety and general operations.

“The bottom line is the whole system is completely unsustainable with current benefit levels and the city’s financial position,” said John Diamond, a Rice University public finance fellow and governmental tax consultant.

Comment by Professor Bear
2010-12-20 11:53:42

Ahem…(This is from the article you just posted!).


Antiquated system?

Financial analysts say Houston, or any other city, no longer can afford the pensions they have used for years to make up for generally lower salaries than the private sector. Researchers have blamed the decline of the auto industry and the virtually bankrupt status of some U.S. cities, such as San Diego, on underfunded pensions.

“Plans that allow people to retire after 20 or 25 years at the age of 50 or 55 and get 80 percent of your salary for life are just unsustainable in this day and age,” said Ramon Fernandez, a professor and specialist in government accounting at the University of St. Thomas.

Comment by Arizona Slim
2010-12-20 11:59:26

“Plans that allow people to retire after 20 or 25 years at the age of 50 or 55 and get 80 percent of your salary for life are just unsustainable in this day and age,” said Ramon Fernandez, a professor and specialist in government accounting at the University of St. Thomas.

Back when I worked at the University of Arizona, the same sort of system existed. I’ll never forget the fine day when a senior manager in another office came into my boss’ office and loudly announced the day of his retirement. Which was several years in the future.

 
Comment by sfbubblebuyer
2010-12-20 12:23:48

When the heck are governments going to admit that defined pensions are doomed from inception? Any retirement plan must be a ‘pay as you go’ and ‘take it when you leave’ system. Fully funded at all times, and when an employee is gone, they’re off the books forever. Social Security is in the same boat. If they’d set pensions/etc up in the first place like that, we’d have zero issues. When you don’t, you wind up with larger and larger non-fixable budget constraints. Companies that haven’t gotten rid of them went out of business. At the very least, copy what the companies that USED to have them did and get rid of them for new employees.

At this point, we virtually need to get an amendment on the constitution saying no government employee may be given compensation or consideration after they have left their job in any form. At least then we wouldn’t be sending secret service guys out to protect Clinton and the Bushes. They’d have to dodge shoes on his own, or hire security.

Comment by whyoung
2010-12-20 12:56:50

“If they’d set pensions/etc up in the first place like that, we’d have zero issues.”

Can you please explain how this would work?

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Comment by sfbubblebuyer
2010-12-20 14:22:06

If you’ve paid into the account 100% the entire time the person is working there, and they take the account with them when they leave, there is no obligation on the books. It’s not a pension at that point, but a 401(k) type retirement account.

Pensions look cheap when they start out, because nobody is withdrawing and everybody is putting in and you can imagine rosy investment scenarios all day long, especially when you compare it against a 401(k) style retirement where the full cost is paid in full. A 401(k) style is never under funded or the magical ‘over’ funded pension that will get your company bought outright or your government fund raided by the legislature. It is paid and done.

Doing away with pensions would result in taxpayers not being set up to have massive costs exploding down the road, which is what pensions do.

 
 
Comment by Al
2010-12-20 12:56:52

I’m not so sure defined benefit pensions are doomed, they just have to make more sense. 80% for 20-25 years? That doesn’t make sense. 1-1.5% per year of service might be manageable.

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Comment by In Colorado
2010-12-20 13:27:59

Even that is too rich for most of Corporate America.

 
Comment by Steve J
2010-12-20 13:38:04

Have cities make contributions even on the years when the “investments” do good would be another way to improve.

 
 
 
 
 
Comment by wmbz
2010-12-20 11:49:41

Nice to see the brain trust at DHS is firing on all cylinders…

Trusted Traveler Program Sparks Fears That Mexican Drug Cartels Could December 20, 2010 FoxNews.com

Mexican citizens will soon be eligible to apply for a “trusted traveler” status that will allow them to bypass some elements of airport security when they fly into the United States — a U.S. government-approved program that critics say could be exploited by violent drug cartels.

Under the program, Mexicans who have undergone background checks and are deemed low security risks will be able to fly into major U.S. cities and breeze through customs without being questioned by U.S. Customs agents.

Homeland Security Secretary Janet Napolitano and her Mexican counterparts announced their intent to roll out the program two weeks ago, trumpeting it as evidence of increased information sharing and law enforcement collaboration between the countries.

The program is an expansion of an existing trusted traveler program, the Global Entry Program, which was launched in 2008 and expedites pre-approved passengers through the airport customs and security process when they arrive in the U.S.

The program is designed to weed out low-risk passengers and enable authorities to zero in on those who may be more likely to pose a threat.

But critics say Mexico’s drug cartels will quickly learn how to exploit loopholes in the plan, and they point to the recent arrests of two pre-vetted “trusted travelers” caught trying to smuggle marijuana and other contraband into the U.S. through a Texas border checkpoint.

 
Comment by Professor Bear
2010-12-20 11:50:01

Some folks in DC are starting to connect the dots on how our defunct housing market came into being.

When the history of this era is written a couple of decades hence, I expect economic historians to recognize the recent housing boom and bust as the culmination of a trend set in place circa 1946 by the birthing of the baby boom generation, and the supplying of nesting sites for their upbringing. But it will take academics a couple of decades to see it this way.

* HOMES
* DECEMBER 16, 2010

Homeowner Perks Under Fire
By S. MITRA KALITA And NICK TIMIRAOS

The U.S. government has long subsidized homeownership through tax deductions and loan guarantees. Now, it is re-examining whether it can afford to underwrite the American Dream.

Earlier this month, a presidential deficit commission proposed reducing the mortgage-interest deduction, the largest government subsidy for housing. Next month, the White House will propose an overhaul of mortgage titans Fannie Mae and Freddie Mac amid a broader debate over how widely the U.S. should guarantee mortgages. Today, it backs nearly nine in 10 new loans.

[A photo of a couple outside their home in Levittown, N.Y., which was built during the postwar boom, fueled by the mortgage deduction.]

Taken together, the proposals could set in motion the largest shift in government support for housing since World War II. Already, the Obama administration has suggested it wants to turn away from the heavy emphasis in recent years on simply increasing the homeownership rate, which critics say helped inflate the housing bubble.

Comment by Arizona Slim
2010-12-20 12:50:41

Already, the Obama administration has suggested it wants to turn away from the heavy emphasis in recent years on simply increasing the homeownership rate, which critics say helped inflate the housing bubble.

If I ever meet the Obama administration, I’d like to kiss it. Just for the above sentence alone.

 
Comment by sleepless_near_seattle
2010-12-20 15:37:25

What was the loan limit previously for F and F backed mortgages? 415k? Reduce it to $150k. Or…eliminate it/them…

 
 
Comment by Brian
2010-12-20 12:42:32

So, after getting burned pretty badly in the housing bubble, I’m contemplating getting back in. At least a little bit.

All of our family is in Western NY, and housing is dirt cheap up there right now. Especially with it being winter time. We’ve found a number of multi-family properties under $60K, some even under $30K.

I am thinking about picking up one of the low end properties, and when we head out to NY for our annual vacations to visit family using one of the two units as our home. The other we would rent out full time to cover part or all of the mortgage.

I imagine that anything that cheap will need some repair, but we can afford to throw a couple thousand in repairs each year pretty easily - and the mortgage on $50K a year is less than a car payment if it was even that high.

It seems like this should be a no brainer type of investment. Am I missing something?

Comment by polly
2010-12-20 14:51:14

The possiblility of severe neighborhood/municipality deterioration.

Comment by sleepless_near_seattle
2010-12-20 15:34:11

The number of vacant properties surrounding yours with “for rent” signs on them.

 
 
 
Comment by Brian
2010-12-20 12:44:13

So, after getting burned pretty badly in the housing bubble, I’m contemplating getting back in. At least a little bit.

All of our family is in Western NY, and housing is dirt cheap up there right now. Especially with it being winter time. We’ve found a number of multi-family properties under $60K, some even under $30K.

I am thinking about picking up one of the low end properties, and when we head out to NY for our annual vacations to visit family using one of the two units as our home. The other we would rent out full time to cover part or all of the mortgage.

I imagine that anything that cheap will need some repair, but we can afford to throw a couple thousand in repairs each year pretty easily - and the mortgage on $50K a year is less than a car payment if it was even that high.

It seems like this should be a no brainer type of investment. Am I missing something?

EDIT: If it helps - we live in Hawaii but all of our family is in Western NY, so they can help keep an eye on the place. Our income is well north of 100K per year so a house purchase of this size as an investment is doable. We rent our home in Hawaii.

Comment by Kim
2010-12-20 14:03:25

Run the numbers ten ways to Sunday. It seems to me you can buy a lot of hotel nights for ($30K + renovations + expenses). Would you retire in the place you’d buy, if you had to? If you or your spouse lost their job, could you still carry both your current and hypothetical future house expenses for at least a year, without dipping into retirement or other long term (college?) savings? Lots of questions to answer.

Comment by X-GSfixr
2010-12-20 14:33:19

Another reason I’ve never understood the “Winnebago craze”

Most of the ones around here just sit for 48-50 weeks of the year. Then you get to spend two days and a half gazillion dollars in gas DRIVING to your vacation hot spot.

You can buy a lot of airline tickets, and a lot of stays in five star hotels for $100K (or whatever they cost nowadays). But that would be “throwing money away”.

Comment by Carl Morris
2010-12-20 14:40:56

I’d love to try an RV vacation once…it just seems like it would be fun. I’ll definitely rent it, though.

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Comment by polly
2010-12-20 14:54:42

My friend down the street when I was a kid once had a sleep over party in their RV. 8 or 10 of us hanging out in our pjs and sleeping bags and basically unsupervised. We also used it as a launching pad to jump into piles of leaves in the fall. I’m not aware that they ever drove it anywhere.

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Comment by 2banana
2010-12-20 14:44:06

What. are. the. taxes?

They can be insane on dirt cheap housing in upstate NY.

 
 
Comment by wmbz
2010-12-20 12:50:35

I’m sure if we try really hard we can run it on up to $3 trillion.

America’s Debt Crisis: Stimulus price tag: $2.8 trillion

NEW YORK (CNNMoney.com) — Since the recession began three years ago, Congress has poured a total of $2.8 trillion into the economy in an effort to spur hiring, get people spending again and prop up industries struggling to stay afloat.

While the $858 billion package of tax cuts passed last week was the biggest slice of stimulus yet, it accounts for less than a third of all the money spent since the start of 2008, according to multiple cost estimates prepared by the nonpartisan Congressional Budget Office over the last three years.

The rest came from a combination of the $700 billion Troubled Asset Relief Program, the $787 billion stimulus bill passed in the early days of the Obama administration, and various smaller stimulus programs.

 
Comment by Professor Bear
2010-12-20 12:52:42

Foreclosures hit three-year-low, defaults down 21.8 percent from 2009
By Roger Showley, UNION-TRIBUNE
Originally published December 20, 2010 at 10:37 a.m., updated December 20, 2010 at 11:35 a.m.

San Diego County defaults and foreclosures slowed in November as analysts awaited a sign of how lenders will treat distressed properties in 2011, according to MDA DataQuick figures released Monday.

Defaults totaled 1,660, down 4.3 percent from October and off 21.8 percent from November 2009. For the year-to-date, defaults were running behind 2009 and 2008 levels but remained well above historic averages prior to the subprime mortgage meltdown that began in 2007.

Foreclosures totaled 723, the lowest in three years — the lowest since 478 in November 2007. There were down 27.3 percent from October and off 32.3 percent from November 2010. The decline may reflect some delay due to a nationwide issue over processing legal documents associated with foreclosure, but the problem was not as severe in California as in other states.

It is unclear why defaults and foreclosures are dropping since millions of homes are distressed nationally and many owners are behind in payments as they face lost income. Many also feel their homes have lost so much value that it could take many years to return to the original value, and thus are tempted to attempt what is called a “strategic default” — choosing not to pay their monthly mortgage even though they could afford to do so.

Comment by Rental Watch
2010-12-20 18:22:47

I’ve been tracking information from LPS Mortgage Monitor, which has their hands in servicing 35+/- million mortgages. They provide “total non-current” data for each state.

Non-current means the total of a) number of loans that are delinquent, PLUS b) loans in the foreclosure process. Non-current is a leading indicator to the supply of distressed properties hitting the market. You’ve got to be delinquent before you are foreclosed upon, and you’ve got to start the foreclosure process before you can lose your home.

CA has been falling relatively quickly in the rankings. As recently as May 2010, CA was 6th worst in the country with 13.8% of all mortgages being non-current. The only states worse were FL, NV, AZ, MS and GA. After May, CA began to fall in the ranks, as as of the end of October, was 18th worst in the country at 13.2% total non-current…coincidentally, exactly the US Average.

I’ve heard many people in homebuilding comment that CA’s supply/demand imbalance (not enough supply relative to population) will mean that CA will lead the nation out of the housing mess…the trajectory of non-current borrowers seems to support the notion, as CA is getting better in terms of non-current %, when almost the entire rest of the country is getting worse.

Only 4 of 51 states\+DC have had their non-current % decrease since May 2010, AZ, CA, NV, and AK. Only CA and AK are at or below the national average, and due to its size, no one is expecting Alaska to lead the country’s housing recovery. For perspective, AZ is at 14.3%, having shaved 0.3% off it’s number since May and is 10th worst currently and NV is at 21%, having shaved off 0.8% off since May, but is still the 2nd worst. CA reduced their non-current percent by 0.6% since May and is now 18th worse in the country.

I’m waiting for LPS to release the November 30 data to see if the trend is continuing.

It would make sense that within CA, the coastal markets are leading the rest of the state.

 
 
Comment by wmbz
2010-12-20 12:53:20

New study finds baby boomers are in a funk.

(CNN) — Eighty percent of baby boomers are pessimistic about the current direction of the United States, according to the Pew Research Center’s Social & Demographic Trends study released Monday.

Who can blame them, with retirement and pension funds shrinking and with the unemployment rate near 10%?

The boomer generation consists of adults between the ages of 45 and 64, according to the The Pew Research Center, a nonpartisan think tank.

“Most Americans are pretty glum three years into a Great Recession and a jobless recovery, but even in that context, the baby boomers stand out,” said Paul Taylor, co-author of the study and vice president of the center.

In contrast, the study found only 60% of millennials — individuals between the ages of 18 and 29 — had a bleak view of the way things are going today.

And about 76% of respondents older than baby boomers, also called the “greatest generation,” were dissatisfied with the status quo.

The survey of 1,500 people was conducted earlier this month.

Comment by Professor Bear
2010-12-20 12:57:19

“…in a funk.”

Funking A!

Comment by jeff saturday
2010-12-20 17:14:09

And just when it hit me somebody turned around and shouted

Play that funky music white boy

Lay down the boogie and play that funky music till you die

 
 
 
Comment by Professor Bear
2010-12-20 12:56:18

RealtyTrac: Robo-signing controversy slows foreclosure filings
Philadelphia Business Journal - by Jeff Blumenthal
Date: Monday, December 20, 2010, 12:28pm EST

“Foreclosure activity decreased dramatically in November, with fewer than 300,000 properties receiving a foreclosure notice for the first time since February 2009,” RealtyTrac CEO James J. Saccacio said. “While part of the decrease can be attributed to a seasonal drop of 7 to 10 percent that typically occurs in November, fallout from the foreclosure robo-signing controversy forced lenders and servicers to hit the pause button on many foreclosures while they scrambled to revamp their internal procedures and revise or resubmit questionable paperwork.”

Earlier this year, Bank of America Corp., JPMorgan Chase & Co. and Ally Financial temporarily halted some foreclosures while they investigated their practices. But they have since restarted foreclosures.

And, in October, attorneys general from all 50 U.S. states opened a joint investigation into home foreclosures.

California had the most in the nation with 57,378 properties receiving a foreclosure filing in November. The state accounts for 22 percent of all foreclosures nationwide.

 
Comment by Hard Rain
2010-12-20 13:03:03

“Looking out into 2011, Suttmeier warns residential housing could fall another 15-30%. “The housing market is still overpriced relative to where we began the new millennium,” he tells Aaron in this segment. “Prices are still about 50% higher than where we were at the end of 1999.”"

Why is this so hard for some people to understand???

Comment by rms
2010-12-21 00:06:35

FWIW, housing was over-priced in 1999 too!

 
 
Comment by wmbz
2010-12-20 13:03:09

US gas demand should fall for good after ‘06 peak- AP

The world’s biggest gas-guzzling nation has limits after all. After seven decades of mostly uninterrupted growth, U.S. gasoline demand is at the start of a long-term decline. By 2030, Americans will burn at least 20 percent less gasoline than today, experts say, even as millions of more cars clog the roads.

Comment by In Colorado
2010-12-20 13:26:22

So what will force J6P to give up his/her beloved 12 mpg pickup truck? High fuel prices? His inability to afford a new truck in the future (and having to settle for a car)?

Comment by measton
2010-12-20 13:57:28

Poverty

The public bus is the new SUV.

Comment by Arizona Slim
2010-12-20 14:13:25

The public bus is the new SUV.

Or, as one of my acquaintances calls it, the $130,000 chauffeured limousine.

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Comment by wmbz
2010-12-20 14:48:06

Our local bus system is always in the red. Yet they refuse to raise fares to cover the costs. Why? It wouldn’t be “fair” to the poorer folks, most of whom get a free pass anyway. We have some new shiny buses that lower themselves down for ease of access, have bike racks on the front etc.

Since our 0ne percent sales tax increase was voted own, they go around to the back door and propose a “fee” on our electricity bills, to cover the cost of this losing system.

Ain’t life grand when you have the authority to tax!

 
 
 
Comment by Carl Morris
2010-12-20 14:39:23

So what will force J6P to give up his/her beloved 12 mpg pickup truck? High fuel prices?

As I recall when gas was hitting $5/gallon a couple of years ago or so, it looked like that might have been enough to get a lot of people out of their trucks if it had stayed that high. They’ll keep it as long as they can find a way to pay for it, or until it becomes “uncool”.

Comment by wmbz
2010-12-20 14:54:15

I agree, I always thought $5 bucks a gallon was a game changer for most people. $3 bucks doesn’t do it, I know a truck sales guy that tells me they can not keep good used trucks/SUV’s on their lot.

Also, one local RV dealer is back in business loaded to the gills with huge RV’s. I saw one yesterday for sale for the low price of $178,000.00 Sounds like a bargain, I am sure someone will snap it up!

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Comment by In Colorado
2010-12-20 16:07:58

And to think I hate filling up my 35 mpg 4 banger. These truck boyz must really love handing over their hard earned cash to big oil.

 
 
Comment by measton
2010-12-20 15:11:30

People started complaining around 3.50 and started changing around 4 as I recall.
I suspect as with boiling a lobster its how fast you turn up the heat.

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Comment by wmbz
2010-12-20 13:23:56

From the 5Min. Forecast…

If the McMansion stands as a monument to the wretched, credit-soaked excess of the previous decade, here comes the backlash…

Rich Daniels is a gold miner and logger in northeast Oregon who turned in midlife to building storage sheds.

One thing led to another, and now Daniels finds himself in the vanguard of a “tiny house” movement. He builds homes of anywhere from 150-400 square feet that people use as backyard offices, hunting cabins and whatnot.

Now he’s thinking bigger, as it were. He envisions a whole subdivision of 50-100 tiny houses for folks who need to downsize. “There are a lot of people getting kicked out of their 2,000- and 3,000-square-foot homes,” Daniels tells the Oregonian. “Where are they gonna go?”

Problem is, the land he owns is zoned either agricultural or industrial. His only hope is to have the nearby town of North Powder annex the land and run out water and sewer lines. But the town requires all dwellings to be at least 900 square feet.

”The biggest problem with the whole (tiny home) movement is the counties and cities are having a hard time accepting these small homes,” Daniels says. “It has to do with revenue — small homes don’t generate the tax revenues for the counties and cities.”

No, they don’t. We’re afraid it’s going to take a whole new round of pain and penury for city and county governments before they give in and allow folks like Daniels to ply their trade. God forbid someone be allowed to risk their own capital to offer people a valuable product or service.

 
Comment by wmbz
2010-12-20 13:37:28

Britain is heading for another decade of youth unemployment with the related rate rising to over 20% to be unemployed, according to the ONS.

Details given out by the Office for National Statistics (ONS) suggested the number of young people who are long-term unemployed is likely to increase by 50% in 2011.

A prospectus issued by the Department for Work and Pensions predicted that between 140,000 and 200,000 young people aged from 18 to 24 will be registered as having been unemployed for at least nine months or more between 2011-12.

The statistics would simply mean that one out of five young people in Britain will have no job prospects next year. Figures also reveal that in some areas, every third young person will be without a job or the chance of a skill.

Based on the Labour Market Statistics published by the ONS on 15 December, 2010, the youth (aged between 18 and 24) unemployment rate in Britain, from August to October 2010, is estimated to have been 17.6%.

With the present budget cuts policy, several young employees have already lost their jobs, and many more live in the fear of being laid off.

Youth unemployment is now likely to be worse than the lost decade of the 1980s, an international report having been out on Friday shows. It says that ‘young people leaving school in the coming years are more likely to struggle to find work than previous generations’.

Comment by sfbubblebuyer
2010-12-20 14:31:28

Should be good for the music scene, though. I expect a British punk revival.

Comment by Arizona Slim
2010-12-20 14:44:04

And I’m looking forward to that. In my exalted position as a music auditioner for our community radio station, I’m seeing very little interesting stuff coming out of Britain.

OTOH, there’s all sorts of good music coming out of this country. Especially from Nashville. Doesn’t matter what genre. If it comes out of Nashville, I’ll probably recommend that it go on the air.

 
 
Comment by alpha-sloth
2010-12-20 14:42:55

“Britain is heading for another decade of youth unemployment with the related rate rising to over 20% to be unemployed, according to the ONS.”

This should mean there will be some great music coming out of the UK in the next few years. But in the past, the unemployed had the dole to live on as they composed their music and put their bands together. Will austerity ruin the English music scene?

 
Comment by edgewaterjohn
2010-12-20 14:51:37

Last night we had dinner with a couple from London. I pointedly asked this Brit couple about the student protests. At that point one of the American guests chimed in and said to me that there were no protests in England - to which the Brits vociferously interjected that there were protests and that they were quite serious and to be avoided at all costs.

 
 
Comment by wmbz
2010-12-20 13:45:19

$2tn debt crisis threatens to bring down 100 US cities ~ UK

Overdrawn American cities could face financial collapse in 2011, defaulting on hundreds of billions of dollars of borrowings and derailing the US economic recovery. Nor are European cities safe – Florence, Barcelona, Madrid, Venice: all are in trouble

More than 100 American cities could go bust next year as the debt crisis that has taken down banks and countries threatens next to spark a municipal meltdown, a leading analyst has warned.

Meredith Whitney, the US research analyst who correctly predicted the global credit crunch, described local and state debt as the biggest problem facing the US economy, and one that could derail its recovery.

“Next to housing this is the single most important issue in the US and certainly the biggest threat to the US economy,” Whitney told the CBS 60 Minutes programme on Sunday night.

“There’s not a doubt on my mind that you will see a spate of municipal bond defaults. You can see fifty to a hundred sizeable defaults – more. This will amount to hundreds of billions of dollars’ worth of defaults.”

New Jersey governor Chris Christie summarised the problem succinctly: “We spent too much on everything. We spent money we didn’t have. We borrowed money just crazily. The credit card’s maxed out, and it’s over. We now have to get to the business of climbing out of the hole. We’ve been digging it for a decade or more. We’ve got to climb now, and a climb is harder.”

Comment by sfbubblebuyer
2010-12-20 14:26:01

And the states won’t be able to bail out the cities, because the states are trying to get the federal governement to bail THEM out. And the gov won’t be able to bail them out because they’ll be begging the Fed to print them out of their own mess.

Comment by sleepless_near_seattle
2010-12-20 15:41:25

I’m going to invest in Sharpies, what with all the zeroes we’re going to be adding to these greenish strips of paper at some point.

 
 
Comment by rms
2010-12-21 00:02:03

Meredith needs a diet overhaul, some exercise and sunlight too.

 
 
Comment by wmbz
2010-12-20 14:26:37

The zombies are taking over.

We’re not joking about this zombie thing. Look at what is happening. Here’s a report from Bloomberg:

Dec. 15 (Bloomberg) - The gap between the haves and have-nots in the US is being drawn along geographic lines, Census Bureau data showed yesterday.

The number of counties where median household income decreased is almost 10 times the number that saw an increase, according to a Bloomberg analysis of Census figures comparing an average of the years 2005-2009 with 2000. The government figures also showed a concentration of wealth and education in coastal states.

The Washington metropolitan area emerged as the wealthiest and most educated region of the past five years. The only three communities with median household incomes higher than $100,000 are in suburban counties in Virginia. Maryland, which also borders the nation’s capital, saw income levels in Howard County increase at the eighth-fastest pace in the US since 2000.

The Washington suburbs are home to government contractors such as Bethesda, Maryland-based Lockheed Martin Corp., the world’s largest defense company, and General Dynamics Corp., the Falls Church, Virginia-based maker of Abrams tanks and Gulfstream business jets.
The Washington Post, the zombie paper, gave the news a positive tune:

“Area Counties Richest in Nation,” was the headline…or something like that.

So you see, this “geographical” distribution is really a zombie distribution. If you work for the feds - directly or indirectly - you get more money. Most likely, you’re no longer creating wealth; you’re consuming wealth that others created. That’s what being a zombie is all about.

And as a society becomes more corrupt and degenerate, there are more and more zombies and fewer wealth-creating citizens.

But wait. There’s more…below.

And more thoughts…

The zombification process runs deep. It changes the nature of what most people regard as “wealth.” Instead of wanting to own a profit-making business, or lend to a wealth-increasing enterprise, more of what passes for wealth is actually a claim against the government. It is a promise by sitting politicians to rip off the future on behalf of the present.

Let’s look at how it works…

In an economy like India’s, a man who wants to prosper will start a business of his own…or invest in someone else’s business. If he wants a decent retirement, he will have to save real money. He’ll need real capital…which supports him by producing real interest or real earnings. He has a claim against future increases to the world’s wealth. But that is wealth that he helped create…by saving and investing.

But in the US, more and more people depend on the government for their retirement financing. The government pledges to take money from future earnings too. But it is a zombie claim; it does not depend on adding to the world’s wealth. It merely takes away the wealth of others.

If an American wants a good-paying job, he looks to the government itself, knowing that its salaries are higher than those in the private sector, and more reliable. And even if the American invests in a private business, the enterprise is more and more likely to depend on the government for contracts, subsidies, tax breaks, regulatory approval or bailouts.

Gradually, “wealth” itself becomes zombified. Insurance policies are backed by government bonds - local or federal. Pensions are heavily dependent on claims against the government. And don’t forget that 42 million people in the US depend on government handouts just so they can eat. Food stamps - the breakfast, lunch and dinner of zombies - have never had so many takers.

This process is completely predictable. The more you subsidize zombies, the more zombies you get. And as the zombie population grows, it becomes more difficult to support. Finally, the paper zombie claims - US Treasuries/welfare/government employment/the US dollar - fall in value. There are too many of them for the private sector to sustain. PIMCO chief and bond expert Bill Gross says the Fed’s purchases of US Treasury bonds “will likely signify the end of the great 30-year bull market in bonds.” That’s just the way it works. As the parasites grow, the host weakens. The more you borrow, the lower your credit rating. The more women you date, the harder it is to remember their names.

*** The poor Irish. Moody’s downgraded their debt. Not just one level. Five levels. Irish debt is now rated at the same level as Russian debt.

Isn’t it obvious that the Irish problem is not just a cashflow crisis? The problem is solvency, not liquidity. Irish banks got in over their heads. Then, the Irish government jumped in the water after them, taking on the debt of the banks.

The solution? Simple. Default.

But zombification continues in Europe as in America. Claims against profit-making (though reckless) private banks are now claims against the government. And governments can print money as well as lend it. The European Central Bank is doing the same thing the Fed is doing. It is buying up bonds issued by Ireland and other nations - at the rate of about $1 billion per week.

Regards,

Bill Bonner,
for The Daily Reckoning

Comment by CoSpgs4
2010-12-20 21:02:33

Excellent find, wmbz. Thanks.

I think I’ll save this as a resource for later, when I read about how tough and expensive life is for those living in D.C., New York, New England.

Poor anti-business, silver spoon-fed darlings. Struggling to make ends meet on $150K a year.

 
 
Comment by wmbz
2010-12-20 14:34:09

Trash collectors to serve as eyes and ears in the street for police

Waste Management workers are out and about when almost everyone else is not. Except someone who might be up to no good.

A former FBI agent recently trained all Waste Management drivers, helpers and technicians in Rensselaer and Albany Counties to act as a mobile community watch.

“They’re on these routes every day so they’re used to the normal situation so they are able to recognize a non-normal situation,” explains Ken Bevis of Waste Management. Trucks are now armed with a cell phone, camera and incident reports so they’ll have accurate information for police and, possibly, prosecutors.

“The drivers understand their main job is to observe and report and let authorities do their job,” explains Bevis.

The extra set of eyes and ears in the street is appreciated because even cops know they can’t be everywhere, all the time.

“The old adage is ‘where’s a cop when you you need one?’ Now it will be where’s a cop or DGS or Waste Management when you need one,” says Albany Police Chief Steve Krokoff.

“Waste Watch” is free to municipalities and the Capital Region is the first area in New York state to benefit from the program.

Comment by JackRussell
2010-12-20 18:53:24

What kinds of things are they watching for? Bodies in dumpsters?

 
Comment by pismoclam
2010-12-20 22:49:19

Is that the Bevis with Bevis and Buthead ? hahaha

 
 
Comment by 2banana
2010-12-20 14:37:23

‘Charlie’s Angels’ Star Settles ‘Financial Ruin’ Lawsuit
FoxNews.com | December 20, 2010 | TMZ

Kate Jackson — one of the original stars of “Charlie’s Angels” — just settled up a lawsuit with a business manager she claimed drained her account of $3,000,000, TMZ has learned.

Jackson claimed she was in “financial ruin” after Richard B. Francis misinformed her about the value of her estate and then pressured her to buy a home she couldn’t afford.

 
Comment by Kim
2010-12-20 15:08:10

Retail sales may have increased this season, but I am not convinced that stores are making out well at the margin. Based on my own shopping and the flyers I follow for fun… well, things don’t feel as rosy as they are portrayed by the media. Maybe traffic is up (I myself witnessed a full mall parking lot in September), maybe sales are up, but since the middle of last week I’ve sensed a whiff of desperation in the air.

I ordered a few items online this season, but only at one store (an independent specialty fabric store, not part of a chain) did I have to pay shipping, regardless of the size of my order. I’m getting about ten emails daily (from stores at which I rarely or never shop) offering me discounts on top of free shipping, and they promised to have it to me by Christmas so long as I ordered today. (no thanks)

Yesterday Target offered the Playstation 3 for its typical price of $299, but it threw in a $100 Target gift card. It wasn’t advertised in the flyer, but in a full page color ad in the fishwrap’s front page section.

On Black Friday I saw a machine advertised at JoAnne Fabrics for $200, but I noticed in a hardwear chain’s flyer, it priced the same machine on the same day for $140.

A camera at Best Buy was one price this past Saturday, but it was $75 cheaper in Sunday’s flyer.

But… milk up nine cents in the grocery store, no coupons for holiday baking kits like last year, gas up 15-20 cents in the past couple of weeks. Deflation in wants, inflation in needs.

Comment by arizonadude
2010-12-20 16:07:14

yep, that ben bernake guy is great isnt he?

 
 
Comment by Professor Bear
2010-12-20 15:31:56

California’s demise is greatly exaggerated
Op-Ed
California isn’t broken

Critics have suggested the state will default on its debt payments, that it is addicted to spending and that it has a hostile business climate. Not true.

By Bill Lockyer and Stephen Levy
December 20, 2010

In the last month or so, an echo chamber of insults has engulfed California. An online opinion editor for the Wall Street Journal even called California “the Lindsay Lohan of states,” describing our state as having squandered its promise.

Critics have suggested the state will default on its debt payments, that it is addicted to spending and that it has a hostile business climate. The criticism is long on inflammatory rhetoric, but it lacks any evidentiary foundation.

Comment by rms
2010-12-20 23:55:55

Great comments follow this piece.

Comment by Professor Bear
2010-12-21 00:10:03

Here’s a good one:

“Your government’s run by a brothel of environmentalists, lawyers, public-sector unions and legislative bums. When they’re not taxing or spending, they’re creating regulations and commissions like the Board of Barbering and Cosmetology and the California Blueberry Commission. Many businesses would leave if it weren’t for your sunny climate.”

WSJ. got CAs number exactly. CA is the laughing stock of the nation.

 
 
 
Comment by AZtoORtoCOtoOR
2010-12-20 15:51:25

It is offical now. I am now a home ower (n left out on purpose). I will call myself a home owner when I pay off the mortage. Here are a few of the details for those that may have missed earlier posts.

1. House is in Washington county OR and is 3500 sq. ft and was built in 2005 finished in 2006
2. House was bought from the builder for $505,000 in 2006
3. House was listed at $392,000 and I purchased it from Freddie Mac home source for $365,000 upon heavy pressure from the Mrs. (Could have paid cash for it, but part of homesource incentive is 3.5% of purchase price towards closing costs)
5. 7 year ARM at 2.5%, PITI is $1275 ($210,000 mortage) Low rate is because of the incentive used to buydwon the loan. My rental I am leaving is currently $1625.

Do I expect housing prices to drop? Absolutely. Do I think I got a “deal”? No. Is this deal going to bankrupt me? No. Am I excited for a bit more room? Yes. Especially the 3 car garage for all my crap.

In the end, my wife lost patience with all the wating. My hope is that interest on savings rates goes up a bit in the next few years and that I made the right choice to go with the mortgage instead of putting most of my cash into it. I already miss the debt free days, but have a plan in place to get it paid off.

I think all who are patient with housing will be rewarded.

Oh, did I mention that I sold a house in Chandler, AZ in 2006 for $705,000 after paying $470,000 for it in 2004? A similar model home with a pool in a a cul-de-sac is now bank owned and for asle for $400,000. Whew, I dodged a bullet. Fortunately, my mortgage would “only” be about $300K if I had held on to the house. Sometimes, a person does have a bit of luck come their way.

Comment by lint
2010-12-20 17:16:37

I have serious quality concerns about any residential structure built in 2005-2006.

Homes were thrown together during the mad rush to buy before being priced out forever.

Comment by Muggy
2010-12-20 19:46:42

Dude, you’re harshin’ AZtoORtoCOtoOR’s mellow.

 
 
Comment by Professor Bear
2010-12-20 22:11:43

“I think all who are patient with housing will be rewarded.”

Congrats on enjoying the fruits of your patience.

I am skeptical that housing will ever bottom out in SoCal, but adamantly refuse to buy a home here until it is plainly obvious to everyone that a bottom is in, as evidenced by (1) virtually no qualified and interested buyers, relative to supply (we’re getting there!); (2) many heard to say, “Real estate is the worst investment” (not there yet); (3) cheaper to buy a home than to rent (getting closer but not there).

I am willing to rent forever if necessary. Anyone who buys at current prices in order to enjoy a sucky economy, shaky school system, and cutbacks in local government services needed to fund astronomically high public pension benefits can’t say I didn’t warn them.

 
Comment by rms
2010-12-20 23:32:29

“My rental I am leaving is currently $1625.”

With $80k/yr supporting a family of four I couldn’t make that rent payment without ditching our health care.

 
 
Comment by Professor Bear
2010-12-20 16:24:37

The Media Equation
A Lesson for Wall St. About Failure
By DAVID CARR
Published: December 19, 2010

“The Company Men” reflects that America is no longer in the business of building and making actual physical objects. Instead, all the energy and resources go into the kind of financial engineering that creates quarterly numbers that Wall Street buys into. Mr. Wells said that he spent a great deal of time talking with chief executives who run large concerns like his movie’s fictional GTX and said only so much of the blame can be laid at the corner office.

“They are responding to the needs of the market, to the institutional investors — the large mutual funds, the money market funds,” he said. “And when you think about it, that implicates all of us because we are all investing in the market one way or another.”

The movie resonates in the current moment because each day it becomes more clear that the guy at the bar who mutters into his whisky glass about the game being rigged is probably right.

On Dec. 12, my colleague Louise Story chronicled how nine men from various banks meet in secret every month to oversee, and in some aspects control, trading in derivatives, the arcane and often lucrative financial instruments that are used to hedge risk. As her article makes clear, the opacity and secrecy of the systems give banks the upper hand and leaves at their whim the market’s less pedigreed players.

It is a small slice of a large problem of self-dealing and self-enrichment on Wall Street, often at the expense of the rest of us. Decisions made there land hard in the middle places where most of America lives and works.

 
Comment by Exeter
2010-12-20 19:37:26

Brother Roubini on Rachel Maddow right now. “Housing prices are in a double dip and will continue to decline even though recession is over”.

 
Comment by lint
2010-12-20 20:35:10

MP3: Kevin Barrett interviews Christopher Bollyn on the destruction of steel from the WTC

First hour: Christopher Bolyn author of Solving 9/11 - the most comprehensive book on Israeli involvement in the 9/11 attacks. Christopher Bollyn has just made public new evidence concerning the destruction of 9/11 evidence. He writes:

I look forward to discussing the destruction of the steel from the World Trade Center on Saturday, December 18. I am sending you the following information so that you understand the basics of what I will be talking about. To understand the Mossad role in the destruction of the steel from the WTC is to understand a very crucial part of the 9/11 crime.

 
Comment by Professor Bear
2010-12-20 21:58:31

Something I don’t understand about the Fed-haters: What do they want to replace it?

The Atlantic Home
Something Republicans and Democrats Agree On: Their Hatred of the Fed
Dec 9 2010, 11:13 AM ET 13

These days, it’s pretty hard for Republicans and Democrats to agree on pretty much anything. But a new poll from Bloomberg shows that they see eye-to-eye on one issue: their hatred of the Federal Reserve. While broad public discontent with the Fed isn’t shocking news, the aggressive action Americans believe should be taken according to the poll shows they want big changes.

Joshua Zumbrun provides the numbers:

Americans across the political spectrum say the Fed shouldn’t retain its current structure of independence. Asked if the central bank should be more accountable to Congress, left independent or abolished entirely, 39 percent said it should be held more accountable and 16 percent that it should be abolished. Only 37 percent favor the status quo.

In other words, a majority of Americans want changes. This goes beyond mere discontent. And this isn’t really a political issue. According to the poll, 19% of independents, 16% of Republicans, 12% of Democrats, and 21% of Tea Partiers want the central bank abolished. That last statistic isn’t terribly surprising, since one of the Tea Party’s favorite politicians, Rep. Ron Paul (R-TX) is arguably the chief Fed opponent in Washington.

Yet the idea that the Fed should be abolished entirely is rather crazy. A complex economy needs a central bank. Some calls for reform could be more legitimate, however.

So what are some examples of changes that could be more reasonably argued? The audit authority that Rep. Paul has called for could allow additional Congressional oversight, but wouldn’t necessarily undermine the Fed’s ability to conduct monetary policy. Fed independence is a good idea, since politics often cloud sound economics. But that doesn’t mean that the Fed’s mandate is noncontroversial. It could be argued that maintaining a steady inflation rate should be its only priority, and Congress should worry about unemployment.

Of course, there’s more varied opinion on the sorts of ways in which the Fed should change, depending on one’s political viewpoint. If you’re further to the left and like the idea of a planned economy, then you probably like the idea that the Fed can intervene to enhance financial stability and reduce unemployment without explicit Congressional consent. But if you’re further to the right and prefer a free market, then you might believe that the Fed’s interference does more harm than good.

 
Comment by Professor Bear
2010-12-20 22:01:48

Ron Paul rides again

The Texas congressman has travelled a lonely path in politics. But now he has a promising platform for another presidential run

o James Antle
o guardian dot co dot uk, Wednesday 15 December 2010 14.34 GMT

Ron Paul Ron Paul at the Conservative Political Action Conference (CPAC) in Washington, DC, 2010. The Texas congressman has found himself centre-stage once again with his chairmanship of the House subcommittee that oversees the Federal Reserve. Photograph: Cliff Owen/AP

The Revolution is here! Searching for leadership, congressional Republicans have finally turned to Ron Paul. Well, to chair the House subcommittee on domestic monetary policy, at least. But that does put Congress’s leading critic of the Federal Reserve in charge of the panel that oversees the central bank.

Ben Bernanke, beware. The 12-term libertarian-leaning congressman from Texas has written a book-length manifesto – titled simply End the Fed – calling for the Federal Reserve’s abolition. He will likely call leading Austrian economists affiliated with the Ludwig von Mises Institute to Capitol Hill to testify alongside staid mainstream economists. Fortune magazine recently asked, “Will the Fed be able to survive Ron Paul?

 
Comment by Professor Bear
2010-12-20 22:05:06

December 20, 2010, 6:00 am
Senator Sanders’s Socialism
By NANCY FOLBRE
Today’s Economist

Nancy Folbre is an economics professor at the University of Massachusetts Amherst.

When the rumpled, plain-spoken Senator Bernie Sanders of Vermont spoke virtually nonstop for more than eight hours on Dec. 10 to explain his opposition to tax cuts for the rich, he quickly became a YouTube and Twitter celebrity.

A majority of Americans polled earlier this year by New York Times/CBS News, Bloomberg News and USA Today/Gallup also opposed these cuts, and many cheered him on as he spoke.

President Obama’s firm support for a compromise on the tax cut — which Congress approved late Thursday night — helped swing many voters back into approval, but the debate publicized the issue of economic inequality.

Senator Sanders, who describes himself as a democratic socialist, describes the United States economy as “socialism for the rich.”

Sanders, a sharp critic of the Federal Reserve, forced its disclosure of details of its lending and bailout practices.

 
Comment by Professor Bear
2010-12-20 22:15:06

Bloomberg
U.S. Foreclosure Task Force Will Take ‘Whatever Action’ Needed

December 20, 2010, 9:30 PM EST
By Rebecca Christie

Dec. 20 (Bloomberg) — The Obama administration’s foreclosure task force is preparing to take action next year against any lenders or other institutions that acted “improperly,” U.S. Treasury Secretary Timothy F. Geithner and Housing and Urban Development Secretary Shaun Donovan said in a joint statement today.

The task force met at the Treasury today to discuss an ongoing review of mortgage foreclosure procedures. In the meeting, 11 federal agencies described their efforts to “assess and remedy” foreclosure issues, the joint statement said.

The task force will take whatever action is necessary to hold accountable any institution that acted improperly,” the secretaries said. “We expect the results of these investigations will be presented to us next month.”

Comment by Professor Bear
2010-12-20 23:53:51

More painful wrist slaps on the way for the managers of Megabank, Inc…

 
 
Comment by Professor Bear
2010-12-20 23:20:29

With money tight, affordable housing on hold
By Jenette Sturges jsturges@stmedianetwork dot com
Dec 20, 2010 09:08PM

Affordable housing

“It’s not low income. It’s not Section 8,” said Mike Ryder of DuPage United. “We’re talking about first-time home buyers.”

According to standards set by the Department of Housing and Urban Development, affordable housing is a home in which the occupants pay no more than 30 percent of their income to all their housing costs.

So while a family bringing in the Naperville median of $98,000 a year could spend up to $2,400 a month on a mortgage, insurance, and utilities, a household making only the state median of $54,000 could afford $1,300 a month in housing payments.

Naperville housing costs

Median home values across Naperville, Lisle and Wheatland townships for owner-occupied homes stood at $336,962 — mortgage payments at today’s rates would total more than $1,400 monthly. The median rental cost $1,083 a month, according to Census Bureau information collected over the five-year period from 2005 to 2009.

Naperville’s poor

Across the three townships that cover the city of Naperville, 4 percent of residents live at or below the poverty level, which was $22,050 for a family of four in 2009.

The percentage of seniors living at the poverty level was as high as 7.4 percent in Naperville Township. Naperville’s seniors can no longer afford to live in the city they helped build.

That’s according to representatives from DuPage United, an organization of faith-based communities working affordable housing, who brought the problem to the Naperville City Council on Dec. 7 in a report on what the city might do to better develop Naperville to provide housing for a wider demographic.

“All they were was putting up websites, which to our mind wouldn’t have any impact on senior housing,” said Mike Ryder, a member of DuPage United.

Naperville has had the admirable goal of increasing the stock of affordable housing for seniors and people with disabilities for years. At the top of the city’s plan for its Community Development Block Grant funds are projects that assist in home purchases and improvements, a few at a time, and a report on affordability was produced for the city’s Fair Housing Advisory Commission in May 2009.

But, Ryder said, recent reports and goals set by the city to increase affordable housing stock weren’t concrete, so DuPage United suggested one: 400 new affordable housing units in Naperville by 2015.

“Any number is a good number if you need a goal,” said Ryder. “You need a goal, and you need to work toward it. If you don’t have a goal, what are you measuring against?”

 
Comment by Professor Bear
2010-12-20 23:29:36

Yuba-Sutter bubble top (late 2005) = $320K median sales price; currently $145.5K; still dropping.

Percentage decline so far = ($145.5K/$320K-1)*100 = -54.5%.

Glug, glug, glug, glug…

Yuba housing prices continue their decline
Sutter County up slightly from 2009
December 20, 2010 04:55:00 PM
By Ben van der Meer/Appeal-Democrat

The story on housing prices in November was much the same as it’s been for most of 2010: Flat or slightly up in Sutter County, and still in decline in Yuba County.

And those who follow real estate trends said although they’d like to believe otherwise, 2011 might be more of the same.

“The distressed property is here to stay, at least for the near future,” said Amy Hendrix, a Realtor with ERA Showcase Real Estate in Yuba City who specializes in short sales of homes with underwater mortgages.

Hundreds of homes in Yuba and Sutter counties are in some stage of foreclosure, she said, though banks are increasingly reluctant to take the homes back. Further, federal programs aimed at stopping the foreclosure spiral encourage short sales, Hendrix said.


Median sales prices for the Yuba-Sutter region:

Sutter Yuba

* November 2009 $160,000 $162,250
* November 2010 $164,500 $145,500
* Percentage change 2.8 -10.3

Source: MDA DataQuick

 
Comment by Professor Bear
2010-12-20 23:42:28

“The six banks—Ally Financial, Bank of America, Citibank, JP Morgan Chase, OneWest Bank FSB and Wells Fargo—were involved in 29,000 of the 65,000 foreclosure filings in New Jersey in 2010,…”

D’oh — is all real estate still local?

Then howcum the same six banks appear in every frackin’ story about the robo-signing scandal, again and again and again and again, from every corner of the U.S.A.?

Break up these to-big-to-fail monopolistic, monolithic Megabank lending operations in order to restore competition and prudential underwriting to and eliminate Shystermic robo-signing fraud from the U.S. mortgage market — easy as pie!

* NY REGION
* DECEMBER 21, 2010

N.J. Threatens to Block Foreclosures
By LISA FLEISHER

New Jersey courts are threatening to block six major lenders from foreclosing on most homeowners unless they can prove their process is sound.

In response to errors blamed on so-called “robo-signers” and other potential shortcuts, judges on Monday ordered six lenders to defend their foreclosure practices and 24 others to produce reports on their process.

“It’s important that the judiciary ensures that judges are not rubber-stamping questionable documents that may not be reliable,” Supreme Court Chief Justice Stuart Rabner said. “The steps we’ve taken today are designed to ensure the integrity of that judicial process.”

New Jersey will also require banks’ attorneys to certify they spoke with a bank employee who reviewed the foreclosure documents, a practice similar to one enacted in October by New York. For now, foreclosures will continue, but Mr. Rabner said he didn’t expect a rush to push cases through in the meantime. The orders pertains to uncontested cases, or 94% of foreclosures in New Jersey.

The six banks—Ally Financial, Bank of America, Citibank, JP Morgan Chase, OneWest Bank FSB and Wells Fargo—were involved in 29,000 of the 65,000 foreclosure filings in New Jersey in 2010, Mr. Rabner said.

Citi and Wells Fargo said they would meet New Jersey’s requirement and obey the order. “With our outside counsel, we intend to comply with the New Jersey court’s order and demonstrate why the foreclosures scheduled in New Jersey should move forward,” said Jason Menke, a Wells Fargo spokesman.

Bank of America, JP Morgan Chase and Ally Financial declined comment. OneWest Bank couldn’t be reached for comment.

In the four months since banks’ speed-signing practices came to light, some lenders temporarily halted foreclosures and state attorneys general announced a joint investigation. Mr. Rabner and others said they believed this was the first time a state court put the burden of proof on the banks, their servicers or subsidiaries.

 
Comment by Professor Bear
2010-12-20 23:52:50

No wonder I feel so depressed. This depression stuff can get contagious after a while. Pardon me while I dust off my copy of The Grapes of Wrath and crawl under the covers.

Dec. 20, 2010, 12:01 a.m. EST
A bad year for California
State’s luster dims with six cities in bottom 10; jobless rate to blame
By Russ Britt, MarketWatch

LOS ANGELES (MarketWatch) — Get away from California’s coastline, and watch your fortunes dip.

For 2010 at least, that seems to be the lesson as six of the Golden State’s metro areas fell to the bottom 10 in MarketWatch’s annual survey of the best U.S. cities for business.

All six are roughly two hours away from California’s shores, with most in the San Joaquin Valley, between the state’s coastal mountain range and the Sierra Nevada mountain range. A sixth city, Riverside, lies between metropolitan Los Angeles and the Coachella Valley that includes Palm Springs.

Along with Riverside, Fresno, Stockton, Modesto, Sacramento and Bakersfield sunk to the bottom of the pack. And jobs are the main culprit.

“If you’re looking at unemployment and job growth, it was not a good year for California,” said Stephen Levy, director of the Center for Continuing Study of the California Economy.

California holds the third-highest unemployment rate in the nation at 12.4%, but four of those cities are at the very top of that list. Stockton is the worst of the cities in the survey with a 16.6% jobless rate, followed by Modesto at No. 2 with 16.2%, Fresno at No. 3 with 15.2% and Bakersfield at No. 4 with 15.1%.

Las Vegas is No. 5 with a 15%, but it is closely followed by Riverside at 14.8%. Sacramento is 11th at 12.5%.

But it’s not as if those cities closer to the Pacific are going great guns either. The highest-rated California city in the overall MarketWatch survey is San Francisco — and in the No. 33 spot, it barely cracks the top third of the 102 cities included.

San Diego is tied for 37th place and San Jose comes in at 39th place. Los Angeles is well down the list at 61, and the coastal region of Oxnard ranked 85th.

The best California can do in the jobs department, it seems, is in San Francisco with a 10.5% jobless rate. All California cities in the survey are in the bottom fourth when it comes to unemployment rates.

Comment by Rental Watch
2010-12-21 09:53:54

It is striking that despite the jobless rates in CA that CA home prices are doing better than almost everywhere else in the country (3 of the top 4 y-o-y price appreciation from Case Shiller are in CA).

Construction job losses were major in CA. If CA does lead the housing recovery, these jobs will come back relatively early.

 
 
Comment by Professor Bear
2010-12-21 00:05:19

Dec. 21, 2010, 12:01 a.m. EST
The great bank heist of 2010
Commentary: Wall Street wins, Main Street pays — again
By Brett Arends, MarketWatch

BOSTON (MarketWatch) — This was the year America finally took on the power and greed of the Wall Street banks.

And the banks won.

They dodged the bullet of real reform, probably for all time. They bounced back to post huge profits, helped by legal theft from the middle class. They completed their takeover of both political parties — and bought themselves a new Congress even more pliable than the old one.

Middle-class America is flattened, devastated and broke. The bankers that caused it all have escaped punishment. They’re raking in huge profits. Oh, and the tax cuts just got extended for high earners, too!

Game over.

 
Comment by Big V
2010-12-21 00:45:39

Happy eclipse, everyone!

Comment by Professor Bear
2010-12-21 00:46:45

Missed it (*#&@!*% drought…).

 
 
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