Bits Bucket for January 3, 2011
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Bank of America to take $2B charge as it settles home loan claims with Fannie Mae, Freddie Mac.
CHARLOTTE, N.C. (AP) — Bank of America Corp. says it will take an approximately $2 billion charge in its fourth quarter as it settles buyback claims on home loans sold to Fannie Mae and Freddie Mac.
The bank said Monday that it also expects to take a provision of about $3 billion provision in the quarter related to repurchase obligations on home loans.
Bank of America shares jumped 3.5 percent in premarket trading.
The deals with Fannie Mae and Freddie Mac are tied to Countrywide Financial Corp. residential mortgage loans. Bank of America bought Countrywide in 2008.
“These actions resolve substantial legacy issues in the best interest of our shareholders,” Bank of America CEO Brian Moynihan said in a statement.
On Friday Bank of America paid Fannie Mae $1.34 billion and Freddie Mac $1.28 billion as part of their settlements.
Interesting that the stock is up this AM. Is is market momentum or might Wall Street believe that’s the end of BACs write offs?
That may reflect a perception that 2B is less than the losses if they actually had to repurchase all those bad loans at par.
I agree with Jim. The market wasn’t expecting them to get out from under this for just $2B.
Is this market momentum ?
Yes, and most stocks are on low volume. Be careful out there.
These deals are BULLSH!T!!!
TBTF requires “special” handling.
Ahead of the Bell: Manufacturing index
Manufacturing index likely to show growth in December for 17th straight month ~ January 3, 2011
WASHINGTON (AP) — Manufacturers likely increased output at the same pace in December as the previous month, notching the 17th straight month of growth.
The Institute for Supply Management’s index of manufacturing activity is expected to remain unchanged at 56.6. Any reading above 50 indicates that the sector is growing. The ISM, a trade group of purchasing executives, will release its report on Monday at 10 a.m. EST.
The ISM’s manufacturing index rose to 60.4 in April, the highest level since June 2004. The index had bottomed out at 32.5 in December 2008, the lowest since June 1980.
Greater consumer spending could spur more factory output. Shoppers tempered their concerns about the sluggish economy this holiday season and hit the malls in large numbers. Consumer spending, excluding autos, rose in November and December by the most since 2007, according to MasterCard Advisors’ Spending-pulse.
“Manufacturing index likely to show growth in December for 17th straight month”
The cool thing is that the recovery has continued to gain strength with no end to the housing recession in sight. Maybe housing speculation can cease being an essential part of the U.S. economy, and homes can once again be a place to live in, now that we know the rest of the economy can get along just fine without it.
I haven’t seen any job creation to suggest a recovery.
You will note the demand was created with… credit.
UE is still +/-10% on any given day.
And while new UE claims finally seem to be slowing, job creation is still essentially flat and long term UE is still at historic levels.
So where else is the demand coming from?
Are they including the rampant rise in the manufacturing of bullshit by our government?
“Hurry! It won`t last” Listing of the day.
6869 Big Cypress Dr Jupiter, FL 33458
$189,000 Price Reduced
3 Bed 2 Bath 2,361 Sq Ft
Drum Roll…………..
Days on site 979 days
Nothing like a fresh listing to start off the day right…
Congress must take on more debt if nation is to survive.
Balancing budget out of the question! (?)
We heard it yesterday from the horse’s mouth, so to speak. Austan Goolsbee, chairman of the U.S. Council of Economic Advisers, said on national TV that if Congress fails to raise the debt ceiling the impact on the economy would be “catastrophic.”
It’s a done deal. Congress will raise the ceiling more than trillion dollars by March. In 2012 it will raise it again, and keep on raising it until the monetary system implodes. Even “conservative” Senator Lindsey Graham of South Carolina appeared on television Sunday to say that failing to raise the debt ceiling “would be very bad for the position of the United States in the world at large.” With conservatives and liberals riding the bandwagon for increased debt there’s no stopping it.
The government would not stop, but rather it would have to make tough choices.
The “Starve the Beast” theory does not work when the Beast has a credit card…
It is not a done deal. The current dc wisdom is that the new House leadership is going to demand “concessions” in order to agree to increase the ceiling. The question is what will they demand? If Medicare is off the table (seems to be, except for the “waste” meme as cutting back Medicare it is one of the ways they fought the new health care law), and they aren’t going to tackle SS until they have control of the White House, what spending is left? Where is the money?
A few ideas:
Defense spending, especially weapons systems, but also shutting down overseas bases and giving the extra soldiers early discharges
VA benefits of all types
SS disability
Medicaid (it is a shared program with the states, you could tell the states that the Federal Government won’t tell them who or what they have to cover anymore and no more Federal money)
Homeland security capital equipment
Federal employee salaries and benefits
Repudiate all federal student loan guarantees and make no more of them, let the student loan industry become whatever banks are willing to lend, unsecured, to 18 year olds
Repudiate all loan guarantees for Fannie/Freddie and FHA
Public health spending such as tracking of comunicable diseases
Fire the EPA and FDA - let industry just promise that they are being good and not lying when they release stuff into the environment, sell food and introduce new drugs
stop funding of all science and health basic research
no more grants to states for road/bridge building and repair and public transportation infrastructure
More?
The new health care law, Polly!!
If they can’t repeal it, they’ll defund its implementation.
Also, they could cut the implementation of the banking reform act. And I’m sure they would love to get rid of Elizabeth Warren and her shop.
Repudiating federal student loans is not a good idea. In today’s (lack of) job market, those loans are very risky and no bank would take them on without fed backing. But that, of course, is very attractive to the moneyed demographic. What better way for rich families to keep up the wealth than to send their precious babies to college and on to connections and jobs — full price — while the poorer but smarter kids are shut out of the opportunity. “Meritocracy,” my #*^&.
>>Repudiate all federal student loan guarantees and make no more of them, let the student loan industry become whatever banks are willing to lend, unsecured, to 18 year olds<<
That would decimate the University/College industry in this country. 50k/yr for tuition would be impossible to charge except for a handful of elite institutions.
These aren’t my suggestions for what *should* be done, guys. They are just a list of some of the stuff that could be targeted - defined enough to actually be theoretically possible to implement and using up enough money that people can brag about it. As stated (cut it all), every single one of them is a terrible idea.
Anyway, defunding the implementation of the health care law doesn’t count because they have already stated they are absolutely going to do that. They really want to repeal it, but can’t for at least 2 years.
Student loans would leave maybe 10 to 20 schools in the country who could still admit students without regard to ability to pay. All the rest would have to limit admission mostly to people who could pay nearly full pop. US citizen enrollment would plunge. Foreign would go up but only by students whose parents (or governments) would pay the full pop. 90% or more might be at risk of closing entirely, or at least defaulting on all their bond issuances and going through a nasty bankruptcy.
Oh, and I left “all foreign aid” out of the original list.
Is there talk of removing student loan nondischargeabilty in bankruptcy? Unless that is on the table, I think private lenders would be tripping over each other to throw oodles of money at 18 year olds knowing that those debts will never go away and that they have a literal working lifetime to chase them for the loan balance with or without the federal guarantee.
None of these items is “in the air” as far as I know. I just threw them out as the things that people would have to go after if they want to cut spending and also want to leave Medicare/regular SS alone to keep the old folks on board for the 2012 elections. The only other option is generalized “waste” and there isn’t enough money in waste to go after; you would have to go after substantive programs.
And I don’t think that the banks would throw all that much money at 18 year olds if the government guarantee went away, even if they kept the nondischargable part in. Too many people who don’t really ever make enough money to pay them back.
Without the fed guarantee I think banks would look a little more closely at the course of study before committing to loan large sums, i.e., med students and MBAs will get access to as much as they want, but fine arts and gender studies majors, not so much. But I still think they’ll be glad to loan to anyone since the debt simply won’t go away in BK. Even if someone doesn’t “make enough money to pay them back”, how is that the bank’s problem? As long as the borrower has a job — any job — the lenders will be able to wage garnish until that person no longer has a job, dies, or flees the country. BTW, the latter option is actually the topic of relatively serious discussion on some law related blogs I read.
“I think private lenders would be tripping over each other to throw oodles of money at 18 year olds knowing that those debts will never go away and that they have a literal working lifetime to chase them for the loan balance with or without the federal guarantee.”
Indiana football dude: This has been going on to the tune of tens of billions for the past ten years: private bank student loans carrying a high rate of interest that starts accruing instantly (as opposed to federally subsidized loans) increased from 8% of student debt to 13% in that time. Those students are now screwed.
But hope is on the horizon! Last week, Wells Fargo announced that it will forgive private student loans in the case of death or permanent disability.
Get rid of the Illegal Aliens and protect our borders. Oh sorry Big Sis, that’s your department! 30 million illegals. Do you feel like one has a hand in your pocket ? You should. It’s costing us over $350 billion per year. Who cares, the anointed one is running thing just fine. NOT.
Oh, and here is the list of tax changes that could be made to bring in more money. Again, these are not suggestions of what should be done as they are a list of things that could be done (administratively) and might just raise some money. Raising rates is left out because it is too obvious. None of these will happen because getting rid of deductions or credits is now defined by the House as a tax increase even if accompanied by other cuts.
And on the tax side (though, as I mentioned yesterday, they want to define closing all loopholes as tax increases, and therefore not allowed):
Eliminate tax exempt status for all currently exempt entities
Eliminate all or most itemized deductions like those for mortgage interest, property taxes, state/local income taxes, etc.
Eliminate all or most personal tax credits like those for energy efficient windows and childcare expenses
Tax all compensation to partners in hedge and private equity funds for provision of investment management services as ordinary income
Eliminate all accelerated depreciation deductions for businesses
Elimiate net operating loss carry backs and carry forwards - if you can’t use the deduction that year, you lose it
Make set up costs for offshoring US jobs nondeductible (This is actually very hard to implement. Looking to someone’s reason for having to carry on a business activity is very, very difficult.)
What about the mortgage tax credit? Is eliminating that a “tax increase?” Eliminating it wouldn’t be a tax increase on ME, because I’m a renter.
oops, sorry, missed that last part. It seems the Republicans want to cut spending for the poor and middle class (who are themselves fast becoming poor) while preserving a tax code which favors the corporations and the rich.* This is so depressing, watching a prosperous country turn into Venezuela. It’s like being a Southerner during the Civil War.
——-
*No, I do no need to hear a repeat of the talking point that the rich pay 47% of taxes or whatever.
I have to say it ! The top1% pay 40% of the taxes. Sorry oxide.
Sorry to keep harping on it, but the president’s commission gave very specific ideas on cutting the deficit, demonstrating that it’s very doable. You can fix it in five minutes - try it!
http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html
Its like dejavu all over again. Here we go with that “Armageddon” thing…
Venezuelans fret over prices after devaluation
CARACAS, Dec 31 (Reuters) - Venezuelans worried on Friday that a second devaluation of their currency in 12 months would make life even harder as the socialist government of President Hugo Chavez struggled to turn the economy around.
Already suffering one of the world’s highest inflation rates and the only major Latin American economy still in recession after the global financial crisis, they fear the New Year devaluation could hit their livelihoods more.
“It is a blow against the pockets of the workers, against the poorest people,” said Robinson Calua, a 50-year-old security guard in downtown Caracas.
Officials say the devaluation announced on Thursday will increase spending and boost growth in South America’s biggest oil producer, while easing the pressure on foreign reserves and freeing up dollars for imports.
“and the only major Latin American economy still in recession after the global financial crisis”
FWIW things aren’t peachy in right-of-center Mexico either. Mexico’s big problems these days (besides Narco violence) include inflation and unemployement. One of Mexico’s two major airlines, Mexicana, has shut down about a year after being privatized. It mightnot officially be in recession, but don’t that to its citizens.
Meanwhile, left of center Brazil is booming.
Maybe Venezuela’s problems are tied to its tin pot dictator?
Meanwhile, left of center Brazil is booming.
It is booming and these Brazilian opinion poll numbers are crazy high. 91% of Brazilians think they’ll have more money in 6 months?! And the Brits are pretty bummed out.
Happy New Year? Britons among the most pessimistic in the world
http://www.independent.co.uk/news/uk/home-news/happy-new-year-britons-among-the-most-pessimistic-in-the-world-2173351.html
The British are entering the new year in a gloomier frame of mind about their finances and job security than the citizens of most other industrialised countries, an international poll has discovered
…Percentage who feel their personal finances will be stronger in six months
Brazil 91%
India 69%
Argentina 60%
Indonesia 59%
Mexico 56%
South Africa 55%
China 51%
Saudi Arabia 48%
Turkey 41%
Canada 38%
Sweden 38%
Russia 37%
Australia 35%
US 34%
Germany 29%
South Korea 28%
Poland 26%
Spain 26%
Hungary 23%
UK 17%
Belgium 16%
Italy 13
Source: Ipsos
Italy and Spain being near the bottom is no surprize, but what’s this about Germany being at 29%? One would think they are in the EU catbird seat.
Germany is like a rich parent who has seen all their children run up massive credit card debt while in school, and knows they will have to pay to clean up the mess.
They know they will be paying for Italy and spain
Mexico at 56%? I have cousins down there who tell me that entry level jobs for college grads are still tough to find and that pay for them remains stubbornly low (under $1000 UDS per month)
What this misses is if their incomes will be better than the western groups incomes or just better than what they previously had. Globalization is effectively bankrupting those countries which already had advanced economies and spreading the wealth to those who do not as labor in these areas is much cheaper than in other areas.
Countries like Brazil have a lot going for them… Energy independence, topping the list. Here in the US we are held hostage to big oil, and big oil makes sure decade after decade it stays that way.
With regards to the list, China is effectively our manufacturing plant right now, and will sink with the west. India will have the same problems. Vast overpopulation and greatly reduced money from the west.
True. And Everyone is about to get squeezed in their cost of doing business. We have some serious inflation problems that will be making there way into the mix:
From the Tampa Tribune this morning on TBO.com:
TAMPA - Three dollars a gallon for gasoline may start to sound good by comparison this summer. With rising global demand for oil, gas could reach $4 a gallon in the coming months in some states, according to fuel forecasters.
That means flying, shipping a package and ordering a pizza could all grow more expensive in the new year as companies pass along their higher energy costs. Over time, those higher fuel prices will work their way into almost all consumer goods, from groceries to clothing, as items travel by truck, train or plane before reaching the store.
“In Tampa Bay, $4 is possible this summer,” said Jessica Brady, spokeswoman for AAA in Tampa. “But predicting anything that far ahead is difficult.”
For a few months, she said, the price will likely stay stable or drop a bit from $3 per gallon as people come off their longer holiday trips and hunker down in the winter. “Once we hit spring, you’ll see those prices for crude oil and retail gas prices go up.”
In Tampa, the average retail gas price is $3.04 per gallon, according to AAA Auto Club South. That’s up from $2.84 last month and $2.63 this time last year. Gas prices in Florida tend to hover right around the national average, Brady said. But with a relatively weak U.S. dollar, the relative price of crude oil is higher.
Gasoline expert Fred Rozell predicts that 15 states, including Alaska, Hawaii, Connecticut and Rhode Island, will see gasoline prices top $4 a gallon by Memorial Day.
Have a nice day.
Greece didn’t even make the list! Talk about screwed.
Viva la Revolution!
Why do I find this amusing…Is Oprah (the richest woman in America) that hard up for money? Maybe she is underwater on a $100 million condo?
—————
Oprah fans sputtering over cable fees for OWN
NY Post | 1/3/11
A day after the launch of her ambitious new TV network, the message board on Oprah Winfrey’s Web site was flooded with posts from fans upset that they now have to pay to see the talk-show queen.
“Cannot believe Oprah would launch a new show on a cable channel that is not part of the basic service,” wrote a fan tagged johnjanesmith.
“Cannot believe Oprah would launch a new show on a cable channel that is not part of the basic service,” wrote a fan tagged johnjanesmith.
The Oprah is in it for the money, johnjanesmith. Not hard to figure out. What I don’t get is why anyone would pay to see her.
I watched one show on OWN over the weekend - their equivalent of Hoarders hosted by the Australian guy that used to do one of the early clean up shows for people who are messy, but not actually mentally ill. So they paired him with a person who was mentally ill. Disaster. These shows are all hugely manipulative (and interesting to watch the way a train wreck is interesting to watch), but this one was the worst I had ever seen. Oh, and it was about 10 times as boring as the other ones I have seen because the pace was so glacial.
It’s people like you who helped early humans discover which berries were poisonous and which were safe to eat. I commend you for your service.
Winfrey is a slick marketer and a shrewd businesswoman. She literally ran Donohue out of daytime talkshow market.
Time will tell if this move will have gone too far.
Then again, witness how many guys pay for NFL Prime, or whatever its called, even though the networks broadcast games for free.
Ok. Its called the NFL Network.
And… the Thursday games are not broadcasted for free. They are only broadcasted ont he NFL network.
I realize it’s not the case in many markets, but the NFL network has always been on basic cable in any markets where I’ve bought service.
I’m talking about the NFL package where you can watch all the games every weekend, and not the NFL channel.
I don’t get cable. Are the cable-only games as overladen with embedded advertising as the network games? Because it’s driving me nuts. I remember when they said there would be NO commercials on cable because the cable fees would pay for the programming. HA! Now the cable bill is just to maintain the actual cable. Forget it.
AFAIK the NFL Network games have the same advertising breaks as local network games. It’s almost surely a standardized thing. For instance, the NHL uses fixed length breaks at set points in each game (after the 14, 10, and 6 minute marks of periods).
In other words, they make us pay for the same shoddy service. You know, I like football, but I’ll just wait for the highlights, thank you very much. And after Peyton retires, I won’t care at all.
(unless he decides to coach…)
I’ve given up on watching football with any regularity. Throw in the blackouts when a team I cheer for doesn’t sell out, the NFL’s refusal to show a better game to those of us at home, the move of the Rose Bowl to ESPN when my beloved Badgers were playing for the first time this century (my inability to see them is surely why they lost), and the NFL owners commitment to moving to 18 game seasons against all rationality (e.g., top players have trouble making it through a 16-game season in one piece), and I’ve decided to become a casual fan, maybe catch a game or two in the playoffs.
Sad. They always kill the goose with their mindless greed.
IAT
I’ve given up on watching football with any regularity.
And after Michigan’s latest bowl drubbing, I’m with you.
BTW, I didn’t watch that game. Was visiting my cable TV-free parents, and the thing was on ESPN.
Tee hee itsabout. Let’s face it: the Big Ten sucked this year (and I went to Michigan.) Only Penn State won their bowl game. Maybe OSU will win tonight.
This was a pretty good college season, IMO. An incredible crop of quarterbacks who we’ll watch for years to come in the NFL. And I’m looking forward to Oregon vs Auburn.
I have a sister who is addicted to Oprah. She bought my mother a subscription to Oprah’s magazine. Maybe she’ll buy her a cable subscription too.
I like Oprah, but even when I was off work these past months I never watched her show. I’d rather read this blog.
Count me as another one of those people who just doesn’t “get” Oprah. Never have, never will.
And, yes, I can understand that she appeals to a certain, emotionally needy demographic. But jeez Louise, people. She’s in business to make money. And if starting her own cable channel is part of that plan, well, that’s just what she’s gonna do.
““Cannot believe Oprah would launch a new show on a cable channel that is not part of the basic service,” wrote a fan tagged johnjanesmith.”
This is why Okra is worth several billion and you’re not, johnjanesmith.
Housing prices are falling…… and there is nothing you can do about it.
why would i want to? ( do something about it )
i would rather go upside down myself then to see prices remaining too high.
NOTHING.
Say what you will about the tenets of national socialism, but at least it’s an ethos.
My suggestions:
1) Ignore advice which implores you to “beat out the competition.”
2) Sit on your hands until nobody wants that distressed home, and the banks are begging you to take away their unwanted REO.
January buying advice: Bidding on a foreclosure and a warm place to retire
Learn how best to snag that distressed home that everyone wants, where the hot spots are for retirees and how soon you can get back into homeownership after a short sale.
By Melinda Fulmer of MSN Real Estate
January buying advice
MSN Real Estate is social
The housing market may seem like a cold, bleak place this January, with a looming inventory of foreclosures and a pall of uncertainty hanging over many markets. In this installment of Buying Advice, we’ll tell buyers how to use this situation to their advantage and beat out their competition for bank-owned bargains. We’ll also point you in the direction of some appealing warm-weather markets with bright prospects, and shine a light on what it takes to recover from a short sale.
…
“1) Ignore advice which implores you to “beat out the competition.”
2) Sit on your hands until nobody wants that distressed home, and the banks are begging you to take away their unwanted REO.”
Have a close relative from the central valley who wants to buy a second home for retirement in Cambria,CA. He said that there are only two types of homes there, quality and pieces of crap. All over priced. He has bid on about 10 properties and been over bid on all. He went to see his RE there and the RE said he doesn’t understand it as he is one of 4 qualified buyers and the RE has a stack of 50 buyers rejected by the bank.
My brother lived in Cambria during the late 1970’s. It’s sort of a poor-man’s Carmel. The lower end of the trust-fund kids lived there as well-off hippies.
DennisN,
Have a friend from Bakersfield who bought there in 2007 (800sq.ft./lot 75ftX50ft). In 2010 they bought the lots next door (total size:50ftX50ft with no water, just a water number) for $150K.
Town is very snobby with everyone trying to mind someone else’s business, and no major business. Everyone just talks about how their property will be going up in value and if they have a view of the ocean (which may on be 6 inches in size). Most house owners are from Fresno and Bakersfield and retired from the education system.
Town is very snobby with everyone trying to mind someone else’s business, and no major business.
As I said, a poor man’s Carmel.
(total size:50ftX50ft with no water, just a water number)
Hey DennisN, you might want to xplain this “special” Sit-U-Ation to folks out there who are unawares…heheehee
Please explain the concept of a “water number”. A cursory Google search provides no info. Is it a lottery for water service or something?
Sank I think there are only x number of water hookupa allowed in town, where x is a fixed number that is never increased.
Highway….
Beats me. But much of CA is stuck with no water. Look at places like Marin County. Lots of stuck-up ding-dongs who own millionaire houses with hot tubs.
If you can’t get water, you are stuck.
I retired to Boise in part because the water rights run with the land. My house’s lot sits on a farmer’s field, which he farmed for around 80 years. So I “OWN” senior water rights dating back the better part of a century.
My HOA runs a pumping station off the ag. water canal. I get pressurized water for watering my yard without any reasonable limits.
Annual water tax about $12. Portion of HOA dues to feed and maintain the water pumping station about $40. Pretty cheap for all the water you can use.
Plus a building moratorium due to lack of H20.
If you wait until nobody wants that distressed home, it’s probably ready for the bulldozer.
Too-big-to-fail works out well for developers who would be ruined on their failed gambles were it not for heads-we-win, tails-you-lose free insurance.
Real Estate Developers Prosper Despite Defaults
By CHARLES V. BAGLI
Published: January 1, 2011
Larry Gluck, the apartment building king whose company defaulted on loans in New York, San Francisco, Los Angeles and Washington, recently bought the Windermere Hotel in Manhattan and Tivoli Towers, a subsidized housing complex in Brooklyn.
Scott Lawlor is trying to line up wealthy investors after he bought 28 office buildings and is now stuck with debts on a portfolio whose value has fallen by at least a third.
Ian Bruce Eichner, who lost two major New York skyscrapers to foreclosure in the early 1990s and defaulted on a $760 million loan for a Las Vegas casino resort in 2008, is working on a plan to rescue One Madison Park, a troubled 50-story condominium project.
Even Harry Macklowe, whose $7 billion gamble on seven Midtown skyscrapers at the top of the market almost cost him his entire empire, is out looking for new deals.
Industry lore has it that New York is one of the toughest, most unforgiving real estate markets in the world. The costs are so high, the unions so ornery, the politicians so demanding and the rivalries so fierce, that one false move invites financial disaster.
But the truth is that there have been surprisingly few career fatalities among New York developers, even though they have lost billions of investor dollars on overpriced real estate and have littered the city with unfinished apartment buildings. While a homeowner who lost a house to foreclosure would find it difficult to borrow for years, developers who defaulted on enormous loans have still been able to attract money.
The reasons, experts say, are that there is still plenty of money floating around and that the market has a very short memory.
“You can always find an investor who’ll put up equity with a guy, unless he’s Attila the Hun,” said Daniel Alpert, managing partner at Westwood Capital, a real estate investment bank.
…
Insanity.
The same developers who are defaulting on land, etc., are buying it back for pennies on the dollar under new corporate charters. It’s a good ol’ boys network which no ordinary person can gain entry. The whole system is rigged.
The Donald Trump, aka short-fingered vulgarian, phenomena. Yet, there’s something appealing about him, in a Nucky Thompson sort of way.
U.S. Home Foreclosures May Top 100,000 In January
by Tamara Keith
January 3, 2011
Over the holidays, many lenders put foreclosures on hold. But that temporary freeze is over now. Industry watchers are expecting thousands of foreclosed properties to hit the market in the weeks and months ahead.
Home foreclosure sales slowed down at the end of 2010 for two reasons: the regular holiday foreclosure freezes, and the remnants of the so-called robo-signing scandal.
In the fall, many lenders put evictions on hold while they reviewed their foreclosure procedures. Rick Sharga of RealtyTrac says that’s behind us now — and the pace of foreclosure is about to pick up.
“I’d be really, really surprised if we didn’t see a probably record quarter in the first quarter of this year,” he says.
Sharga expects banks to repossess close to 100,000 homes in January alone.
“We always have a seasonal uptick in the first quarter,” he says, “and I think it will be accelerated because of delays that the servicers will be making up for in the first couple months.”
…
FORECLOSURES
DASHED DREAMS
Some people who have abandoned their homes because of foreclosure leave trash and expressions of anger behind
By Diane Dietz
The Register-Guard
Published: Monday, Jan 3, 2011 05:01AM
Foreclosure in Lane County — as everywhere — has become a mess, and that’s a literal mess and not a euphemism for sloppy or illegal paperwork.
A foreclosed Hawkins Heights property owner, for example, cut a hole in his kitchen wall so he could take his jacuzzi bathtub with him as he left.
Other homeowners have smashed in the walls with golf clubs or covered the walls with obscenities.
Many foreclosed homeowners stop paying garbage bills before they’re forced out, and so they leave dump truck loads of trash and abandoned possessions in their wake.
And pets, too, sometimes.
“I’ve learned to tie garbage bags around my feet,” said Brian Schartz, a Lane County real estate agent who reports on the condition of houses to the out-of-town banks that have repossessed them. He works for John L. Scott Real Estate in Eugene.
His No. 1 rule: Never open a refrigerator.
…
Never open a refrigerator.
Never get out of the boat?
Kurtz got out of the boat…
There’s a colonel of truth in that statement.
With extreme prejudice - oh the horror, the horror
i prefer a general of truth
We have seen a deluge of these morons flooding into our upscale apartment complex over the past year, each with three and four small children. The whole place is crawling with screaming kids now and parents with a “my children have rights” and “we should not have to be here we are victims” attitude.
We have looked around, but apparently all apartments are actively targeting the foreclosed folks and they are all pretty bad right now.
I am really beginning to hate this recession!!!
Yup. I have cRap music listeners next door to my Phoenix apartment unit. Ghetto moving in. I saw nothing like that from 2005 to three months ago.
Maybe you’re (we’re) just getting older. The generation just now becoming professionals grew up on the stuff.
For a different take on the rap/hip-hop culture, read Thomas Chatterton Williams’ book, Losing My Cool: How a Father’s Love and 15,000 Books Beat Hip-Hop Culture.
Long story short: Thomas and his inner city buddies took hip-hop a bit too seriously. They didn’t just listen to it, they lived it. And, for most of this North Jersey crew, things didn’t turn out too well.
Williams was a good student and got out. He went to Georgetown University and discovered that there was a lot more to life than the dead-end ghetto culture portrayed in hip-hop.
Anyone who would abandon a pet when they could take the pet to a shelter deserves the worst punishment I can imagine. And I have a good imagination.
I rescued a 12 year old yorkie that was abandoned in a foreclosure .
She was so neglected, it broke my heart.
U.S. Home Foreclosures May Top 100,000 In January
Over the holidays, many lenders put foreclosures on hold. But that temporary freeze is over now. Industry watchers are expecting thousands of foreclosed properties to hit the market in the weeks and months ahead.
http://www.npr.org/2011/01/03/132523689/u-s-home-foreclosures-may-top-100-000-in-january
The surging pain of foreclosures
BY LISA DONOVAN Staff Reporter
Jan 3, 2011 02:33AM
Jean Lachat~Sun-Times
Elizabeth Cabral-Arreola vacillates between resignation and nervous chatter about the accumulation of problems — ill health, bad luck and some regrets — that has put her on the verge of losing her home.
She’s been looking forward to a fresh start — 2011 — almost since the start of 2010 when the bank moved in January to foreclose on her family’s Southwest Side home and take what is left of her and her husband’s middle class existence.
“I’m already at the starting line and waiting to cross over,” the 55-year-old Cabral-Arreola said last week adding a new year symbolizes the hope of a fresh start.
Arreola has lots of company: Year-end projections for 2010 show banks and other lending institutions filed 51,900 new foreclosure suits in Cook County Circuit Court. The clerk’s office won’t have a final tally until mid-January, but a spokeswoman said the number is among the highest on the books.
The projections suggest foreclosures continue a steady climb that began in 2006, when filings in Cook County Circuit Court sat at 18,916 and jumped 70 percent in 2007 to 32,269. In the first half of the decade, foreclosures ranged from 12,000 to 15,000 annually.
It also suggests too, experts say, that the housing crisis hasn’t abated, but rather just spread to new demographics.
“What we’ve seen is a lot of shifts in where the growth is occurring and that’s mostly in the suburbs and among middle income and higher income” groups, said Geoff Smith, senior vice president of the Woodstock Institute, a Chicago-based non-profit research organization.
…
“when the bank moved in January to foreclose on her family’s Southwest Side home and take what is left of her and her husband’s (middle class existence).”
Change that to what is left of their DREAM HOUSE. I got so sick of hearing that MSM descriptive term applied to FB’s!
But in 2009 her employer — the city of Chicago — ordered non-union staffers to take 15 furlough days, something she described as financially crippling….
She quit her to job as an administrative assistant with the city’s Aviation Department at Midway Airport.
So having to take 15 furlough days was “financially crippling”. She then QUIT her job during a recession. What in the heck did she think would happen to family finances then?
“I wish I could have my job back,” Cabral-Arreola said last week. “When you lose everything, you start to lose your mind, and that’s where I was at.”
Exactly the kind of dumb move I have been avoiding for 15 years. Yeah, working sucks. Then there is the alternative.
“So having to take 15 furlough days was “financially crippling”. She then QUIT her job during a recession. What in the heck did she think would happen to family finances then?”
Friend’s wife’s car wouldn’t start after work, needed a jump, so she bought a new car on the way home. I’m home honey, just dropped $40k…
She quit her to job as an administrative assistant with the city’s Aviation Department at Midway Airport.
I went through Midway on the way back to Tucson. The joint was jumping, the bars were pumping, and the WiFi just didn’t work. Couldn’t figure it out.
Any-hoo, if this lady quit her Midway job out of boredom, she should have taken another one in the terminal. Plenty of action in the terminal, trust me on that.
If she could fix the WiFi, millions of Southwest customers would thank her. Including me.
“Year-end projections for 2010 show banks and other lending institutions filed 51,900 new foreclosure suits in Cook County Circuit Court.”
Yesterday I happened to peek in on (Cook County) Realty Trac for the first time in months. The number of lis pendens added was staggering. I’d go as far as to guess that some of the FBs were timing it so they wouldn’t get the notice until after Christmas that they were going to lose the house. Once they hit Christmas-minus-90-days, they stopped sending checks to the banks. Of course that was more or less the time that the foreclosuregate/robo-signers scandals came to light too.
Next thing you know, they’ll be majoring in the humanities.
Coupon generation’ wields consumer power in China
By CHI-CHI ZHANG
BEIJING (AP) - Ding Can is obsessed with bargains. Her purse is crammed with more than 30 shopper discount cards and dozens of coupons. Her apartment is packed with freebies, from cosmetic samples to key chains. She often lines up before dawn for tickets to discounted movies.
Her yen for savings isn’t out of necessity. The 32-year-old software testing engineer is relatively well off. She says, simply, “I’ve never come across a good deal I didn’t like.”
More than a craze, discount shopping is becoming a way of life for young Chinese. Known as the “coupon generation,” they are changing the way business is done in the world’s second largest economy.
The biggest target is the 18-35 age bracket, born after the chaos of radical Maoism. They have largely only known steadily rising incomes.
“Young Chinese consumers love to spend and rarely save because they are optimistic that they’ll always have money,” said Fu Guoqun, a marketing professor at Beijing University.
Shan, 23, concedes that discounts get her to consume more than she would otherwise. Her bag is stuffed with McDonald’s coupons and other discount cards.
“I’m obsessed,” she said. “Whether it’s at work or home, I’m dreaming of the next deal.”
“Young Chinese consumers love to spend and rarely save because they are optimistic that they’ll always have money,”
I hope China has Medicare and Social Security …
The country has an excess savings rate overall. I get the feeling that China’s “greatest generation” is raising a generation of partiers.
Ah human nature! It transcends borders, cultures and social/political systems.
I think that the one child policy has also influenced the parenting of this generation.
I seem to recall reading that Chinese parents have been spoiling their only child, and that the phrase “little emperors” is often applied to those kids.
Looking for “Hoarders: Chinese edition” coming to a cable television station near you…..
Awesome
Oh they are just RIPE for rebates!
At the rate China is Westernizing, we will have nothing to fear from them in 20 years as their society self-destructs.
About 20 years ago, a friend made the same prediction about Japan. It was based on his experiences as an English teacher to their lazy, bratty youth.
Foreclosures hit high end of Sacramento market
By Phillip Reese and Robert Lewis
The Sacramento Bee
Published: Sunday, Jan. 2, 2011 - 12:06 pm
Within the gates of the exclusive Los Lagos development in Granite Bay, home to business executives and real estate magnates, the postman delivers almost one fresh home loan default notice a month.
Mortgage defaults are not just a problem of the poor. Sacramento’s wealthiest residents are defaulting on their recent home loans at least as often as everyone else – and in some posh enclaves, more, according to a Bee analysis of federal mortgage data and figures from Foreclosures.com.
Banks have filed about 550 default notices on local home loans of more than $1 million since 2007. The total value of those loans is roughly $750 million.
Estates on the west side of Folsom Lake form the epicenter of the trend. In this strip of Placer County, banks have filed four default notices for every 10 home loans of more than $1 million issued during 2006 and 2007.
“Everyone always has delusions of grandeur. At some point you have to accept this is what it is,” said Folsom resident James Caramazza, who took a hit on his $1.4 million loan following a short sale.
…
http://www.latimes.com/news/opinion/editorials/la-ed-housing-20110103,0,6826173.story
Housing shocks
A lawsuit filed by Allstate claims that Countrywide misrepresented the risks posed by the bundles of mortgages it sold to investors such as Allstate.
Housing prices are sliding again, and there’s plenty of blame to go around. Factors include the sluggish recovery, ineffective private and public efforts to prevent foreclosures, suddenly risk-averse lenders and temporary tax credits that generated a short-lived and artificial rally in home sales. But a lawsuit filed last week provides a pointed reminder that the bubble would never have happened had it not been for irresponsible lenders and the feckless investors who kept them awash in cash.
The case pits insurer Allstate against Bank of America and Countrywide, the giant mortgage lender that Bank of America bought in 2008. The suit claims that Countrywide misrepresented the risks posed by the bundles of mortgages it sold to investors such as Allstate, which sank $700 million into the securities from 2005 to 2007. After the housing bubble burst, the mortgages in those securities started defaulting at a torrid pace, causing the value of the securities to plummet.
…It’s true that lenders across the industry threw caution to the winds during the housing boom — how else to explain the existence of liar loans and mortgages that went belly up as soon as housing prices turned down?
Clash of the Titans.
Sounds like they are trying to get their responses and the spin in place before the documents hit the streets.
BofA reviews documents amid WikiLeaks threat - report
PHILADELPHIA (Reuters) - A team of up to 20 Bank of America Corp officials, led by the chief risk officer, Bruce Thompson, have been reviewing thousands of documents amid a threat that it may be a target of WikiLeaks, The New York Times reported on Sunday.
http://af.reuters.com/article/worldNews/idAFTRE7020C620110103
Does not make sense If all they have is one user’s hard drive. User would need to create local personal folders for all email and religiously file emails in the local folders residing on hard drive. Access to company servers and everyone’s online email folders and associated backups is a different story.
If that person was an IT admin or in any number of other critical positions they could save complete archives from the email or document servers.
You’re probably right though. I’m not getting my hopes up.
My company has a size limit on my email. Exceed it and your emails bounce. I have to keep my archives on my local drive.
From my days as a CIO I can say for sure that that is very, very common.
Australia’s Queensland floods make the aftermath of Hurricane Katrina look like the groundwater from an April shower.
Australian Planes Rush In Aid as Floods Continue
By AUBREY BELFORD and KEVIN DREW
Published: January 3, 2011
MELBOURNE, Australia — The death toll from severe flooding in northeastern Australia rose on Monday as authorities airlifted supplies to communities facing raging waters that were expected to swell for up to two more days.
Nine people were confirmed dead on Monday from the flooding, and another was reported missing and presumed dead, according to a spokeswoman for the Queensland Police Services Department.
Heavy rains began falling before Christmas, drenching Australia’s northeast state of Queensland. At least 200,000 people in an area the size of France and Germany combined have been affected by the flooding, according to Paul Birch, senior hydrologist at Bureau of Meteorology.
The floodwaters have inundated at least 22 cities and towns in the region, The Associated Press reported.
…
At least 200,000 people in an area the size of France and Germany combined have been affected by the flooding
—————————————————
New Orleans had over 600k residents in a much smaller area. This is more like the upper Mississippi floods the US experiences every few years, and not at all comparable to Katrina.
For comparison, Germany is the same size as New Mexico and France is similar in size to Texas. 200k people in an area that large is nothing.
that comment was in reference to your comparing it to Katrina. It’s not really comparable.
Unlike the situation in NOLA following Hurricane Katrina, Queensland is severely flooded in a manner which will create lingering economic effects. The two situations are completely incomparable — NOT!
Lingering economic impacts - like half the population of 700k city moving away vs 200k people over a huge area? Sure man, just like me stopping shopping at Sears will have economic impacts on Sears. I guess the kangaroos will have to learn to swim.
Of course what should I expect from someone who constantly extrapolates 1 month numbers to 1 year numbers. Everytime I do that for my portfolio I wind up a billionaire.
“Of course what should I expect from someone who constantly extrapolates 1 month numbers to 1 year numbers.”
The annual rate calculations are intended to put monthly numbers on an annual basis, without suggesting the variance might not be large. I only do this for people who are sufficiently bright to give the figures a reasonable interpretation. In your case, I suggest you ignore my ‘extrapolations.’
“I guess the kangaroos will have to learn to swim.”
And the Australian farmers will have to learn how to turn water into wheat. Based on your other ignorant comments, I assume you believe this is easily done.
* COMMODITIES
* JANUARY 3, 2011, 1:21 P.M. ET
Wheat Surges on Australian Floods
By TOM POLANSEK
CHICAGO—Wheat futures approached 29-month highs as floods threatened grain transportation in Australia and bitter cold stoked fears about crop losses in the U.S. Plains.
Soft red winter wheat for March delivery, the most-actively traded contract, climbed to $8.25 a bushel at the Chicago Board of Trade on Monday, its highest price since brushing against two-year highs in August when Russia banned grain exports because of a drought. The contract recently traded up 23.75 cents, or 3%, at $8.18.
Hard red wheat futures, traded at the Kansas City Board of Trade and Minneapolis Grain Exchange, topped two-year highs because of worries about tightening supplies of high-quality wheat, the variety exported by Australia and grown in the Plains.
Hard red winter wheat for March delivery reached a session high of $8.815 a bushel, its highest price since late August 2008, at the Kansas City Board of Trade and recently traded up 24 cents, or 2.8%, to $8.75. Hard red spring wheat jumped as high as $9.08 a bushel, its highest price since August 2008, in Minneapolis and recently traded up 20 cents, or 2.3%, to $9.015.
Worries about weather are driving the latest rally, as torrential rains and flooding swamp large parts of Queensland in Australia, which was the world’s fourth-largest wheat exporter last year. Floods affecting an area the size of France and Germany combined have forced thousands of residents to flee their homes, affecting up to 200,000 people.
“We are going to see an economic impact. There’s no doubt about that,” Australian Prime Minister Julia Gillard told ABC Radio Monday.
…
Yikes!
Is it true that 98% of all snakes in AU are lethally poisonous?
Same with spiders.
Don’t lick the frogs either.
Don’t go near the stingrays, either — crikey!
I miss that guy. Very entertaining. Sad for his wife and children.
One cool difference between New Zealand and Australia is that NZ doesn’t have any snakes at all.
It’s Bush’s fault.
Our lawyers might find interesting some of the legal “arguments” of the article:
The Story Of 2011 Will Be The Second US Housing Crash
…However, MERS helped to delink the securities from the mortgages. At best, they are unsecured debt — there is no property backing the securities. What this means is that foreclosure is not permitted. As I have said before, it is likely that most or even all foreclosures occurring in the US are illegal seizures of property — home thefts. We are talking about 100,000 completed home thefts per month, with another 250,000 new foreclosures started to steal homes every month. Projections are that 13 million homes will have been “foreclosed” (read: stolen) by 2012.
Worse, from the perspective of the banks, they’ve got to take back all the fraudulent MBSs, most of which are toxic.[..]
This is insane–the unexpected wildcard I didn’t see coming or even possible. Could it be that the owners of the MBS don’t even have claim to the underlying asset? That it was all just synthetic? It would be the biggest scam ever!
Note that this is one man’s OPINION; take with a HUGE grain of salt until at least one single judge in any jurisdiction agrees with the argument.
I have been explaining this periodically for a few months. MERS allowed people to know where the money should go IF the actual transfer took place on county records books. There was no transfer. It is possible that the only entities that actually own the note are the originators of the loan, or, in certain circumstances, the creditors of that entity if the originator has gone bankrupt.
If the note was not legally transferred to the trust that issued the securities, and the trust documents state that it cannot accept a note that is in arrears (true in most or perhaps all of them), then someone else in the chain of ownership does. The question that has to be addressed is who is it? And is there someone who is required to hand back all the cash they received because they didn’t carry out a transfer they were required to make. If the docs didn’t require the transfer to actually be made, then there might be even bigger issues with the disclosure on the securities.
This is going to take a long time to sort out.
“There was no transfer.”
But the transfers can still be done, if they should have been done according to the terms of the contracts, but were not—right polly?
I agree, this will take a long time to sort out, but it seems like someone in the chain still has a legal right to foreclose.
They can’t be done if the transfer that has to happen is to a trust that is not allowed to accept the transfer if the note is not current. At least it can’t if the note is not current. And most of the trusts were set up with those requirements. This one reason why originators were paying the first 3 months of the mortgage at the height of the insanity - they could be sure that the notes were current at 90 days when they were “sold.”
The real question was whether the contracts required the transfer take place. If they incorporated the MERS situation and stated that people only had to distribute the payments to the trust (so it could pay the bond holders) as IF the transfer happened, then the situation is very, very different.
I’ve seen too many situations where facts changed and the baby corporate attorneys didn’t update the documents to reflect the new situation to believe that all of this was done properly. Someone would have wanted the trust to have the right to foreclose, so someone would have wanted the docs to say there was a transfer.
The devil is in the details.
“And most of the trusts were set up with those requirements.”
Ah, I did not realize that—thanks for the info, polly!
“The devil is in the details.”
I totally agree; the details of the contracts are key, so until that information comes out, we can only speculate as the the outcomes.
My gut is that this is likely THE housing story over the next couple of years. The hunt for the ultimate bag-holders continues.
The hunt for the ultimate bag-holders continues.
The U.S. taxpayer, I fear.
When I first gained knowledge of the MBS Market during the boom my first thought was that Banks/Lenders would have to buy back the
junk loans, or the Rating Agencies would have some liability . Than it became apparent that the plan was for the Government to buy up a lot of the liability of lawsuits from the loan investors . Not only were the loans flawed but the legal basis for them being backed by real estate is now under question .
I find it hard to believe that Hank Paulson and all the Culprits didn’t
know that the instruments were flawed as well as legally attackable
for the entire mis-rating on risk as well as the total breach of the industry to actually underwrite loans . Years ago even before the
Tarp Bail Outs there were Attorneys that were asserting claimed of
violations to the law . Obstruction of Justice was the name of the game when it came to these bail-outs .
The extent of the financial and legal crimes is so massive that I’m assuming that practical solutions will be devised and laws will be changed to lessen the impact of the true extent of the financial crimes .
It was a mystery to me why the approach of letting standing law
solve the loss and let contract law resolve the matter wasn’t employed ,but when you
have this level of violation to ‘Standing Law ” it can’t be solved by
normal Justice .
Everybody should of known that this level of Crazy lending had to have a fraudulent basis and it becomes clear why would Investors
buy such faulty high risk MBS’s at a low yield in light of what the true risk was . A true Ponzi-Scheme that the Culprits had no right to throw upon this World .IMHO of course .
“At best, they are unsecured debt — there is no property backing the securities.”
I don’t believe Wray’s argument for a second. The note-holder has a clear right to foreclose on the property, and the MERS is just the legal stand-in/representative for the note-holder.
Sure, not all of the assignment chains may have been done properly initially, but if they are done properly eventually, there is still a right to foreclose. The assignments can be brought current without forging them.
Arguing that the MBS trusts are holding unsecured claims is entirely specious—unsupported either by his arguments, or by any legal precedent that I’m aware of.
Although…..In areas with elected judges, I could imagine that “produce the note,” tactics being successful. Back in the day, this was the sort of paperwork that people were very careful with because losing it could have some very negative consequences.
Also , can you imagine how many Insurance Companies would of
refused to pay on Credit Default Swaps because fraud was involved
in what they were insuring (most Insurance Contracts have clauses
that the claim isn’t payable if fraud is involved ).
Lets face it, Plan A was created to create the least amount of damage on the Big Investment Firms and Lenders .
Prime ….Law can get real complicated when it comes to time-spans ,
legal ability to do something after the fact, and on and on .
The big question becomes if the loan investors were the actual Bag-holders for most of this junk loan paper why were the Middle-men and
Lenders and Investment Banks bailed out ?The answer is that all those
entities would of been sued silly and the Culprits would of been attacked criminally and on and on .Exposure of a massive Ponzi-scheme
would not of been good for our Financial Markets imagine and confidence would of been destroyed totally . The to big to fail was
actually to big for Justice .
Too bad the public employee union leaders can’t figure out how to get the Fed to shower them with trillions of dollars in bailouts, the way Megabank, Inc does. It seems like these budget problems would vanish with sufficient helicopter drops of cash.
Public Workers Face Outrage as Budget Crises Grow
By MICHAEL POWELL
Published: January 1, 2011
FLEMINGTON, N.J. — Ever since Marie Corfield’s confrontation with Gov. Chris Christie this fall over the state’s education cuts became a YouTube classic, she has received a stream of vituperative e-mails and
“People I don’t even know are calling me horrible names,” said Ms. Corfield, an art teacher who had pleaded the case of struggling teachers. “The mantra is that the problem is the unions, the unions, the unions.”
Across the nation, a rising irritation with public employee unions is palpable, as a wounded economy has blown gaping holes in state, city and town budgets, and revealed that some public pension funds dangle perilously close to bankruptcy. In California, New York, Michigan and New Jersey, states where public unions wield much power and the culture historically tends to be pro-labor, even longtime liberal political leaders have demanded concessions — wage freezes, benefit cuts and tougher work rules.
It is an angry conversation. Union chiefs, who sometimes persuaded members to take pension sweeteners in lieu of raises, are loath to surrender ground. Taxpayers are split between those who want cuts and those who hope that rising tax receipts might bring easier choices.
And a growing cadre of political leaders and municipal finance experts argue that much of the edifice of municipal and state finance is jury-rigged and, without new revenue, perhaps unsustainable. Too many political leaders, they argue, acted too irresponsibly, failing to either raise taxes or cut spending.
A brutal reckoning awaits, they say.
…
Good way to see what the your neighbor, the state worker is taking home:
http://www.sacbee.com/statepay/
I don’t know how well teachers are paid in the Garden State, but I know that my sis in North Carolina, a bilingual teacher with almost 15 years of experience makes about 40K per year. I know teachers in my little burg are also low paid and had to take a pay cut last year.
Part of “deal” for many low paid teachers was that they would get a pension when they retired. Of course we now all know that won’t be happening for most teachers. That they are upset is understandable, even if nothing can really be done to save their pensions.
My sister, a lifelong special ed teacher, makes less that 40k.
Which is why I am often amused at all the teacher bashing. Perhaps the goal is to break the unions and pay teachers minimum wage wih no benefits?
When I was briefly unemployed I considered subbing, until I learned that it paid minimum wage. In that case I would rather mop the floors at Walmart. I guess someday all teachers will be subs!
And subbing is one of the weird temp jobs that can require professional credentials…
And the teacher bashing bothers me because many of the parents seem to have decided to blame the teachers for all their kids problems.
When my sister started teaching special ed, most of her students had birth defects or other more classic “nature” problems.
Now a lot have problems that are “nurture” problems: kids who come from dysfunctional homes where they don’t even get fed junk food for breakfast, have parents who let them stay up too late, no monitoring that they do their homework, etc. so behavioral problems shouldn’t be much of a surprise.
A number of the parents NEVER show up for parent teacher conferences.
“Perhaps the goal is to break the unions and pay teachers minimum wage with no benefits? “
Ya think?
That way, they can afford to increase the administrators’ “upper-2%-of-income” pensions.
The banksters and politicians must love to see J6P bashing teachers and low-level public employees. It keeps attention, not to mention anger, firmly focused anywhere but where it truly belongs.
“Which is why I am often amused at all the teacher bashing. Perhaps the goal is to break the unions and pay teachers minimum wage wih no benefits? ”
No duh.
Just a little reminder - teachers have a bachelor’s degree, then a teaching credential (costs as much and takes as long to get as a masters), and many have a masters on top of that.
For the level of education teachers are expected to have, and the difficulty of the job, it’s always amazing how they are one of the first to get kicked and criticized.
Most leave the professional in the first 5 years, and all the hoopla about getting qualified teachers is just hot air. Many smart, well-educated people won’t go into this profession until it pays better. The end.
Shaddup about the pensions.
Oh yeah, and as a teacher, I pay almost $400 a month into my pension, and then another $650 a month for HMO insurance for myself and my 2 kids. Another $100 month for the union dues (ouch, methinks that’s too hefty a price, but yes, they do my bidding and I am glad for it)…and we do not pay into social security at all, not a penny. CA STRS/PERS fails, we are fooked.
It ‘aint a free ride.
Must be where you live. Our district has an elementary school gym teacher being paid approx. $90K/year. An assistant principal can expect around $120K. They get bennies and pensions on top of that.
Then again, a school secretary makes about $15 an hour, and tutors and aides (usually part timers) only take home $12-$15/hr.
No doubt there are some very well paid teachers in some areas…
A question in my mind is - since many have masters degrees or higher and substantial on-going requirements to maintain certification or higher - how do the salaries compare to other professions that require a similar level education?
Would someone in another type of professional job be called overpaid at those same compensation levels?
Football coaches make $100k+ at the high school level in Dallas.
It is always about where you live, but the large majority teachers in this country ARE NOT making over 50K.
http://www.payscale.com/research/US/All_K-12_Teachers/Salary
Master’s degrees in education are a dime a dozen; it’s the second most popular degree behind an MBA. And education is notorius for being one of the easiest degrees out there.
For comparison, a mid-career engineer in the Federal Government makes about $95K. The same engineer would make ~$110 K in the private sector depending on bonuses. You need AT LEAST a master’s, usually a doctorate, to achieve that level. And they don’t hand out sci-eng to just anybody.
Engineers don’t make that much in India.
“it’s the second most popular degree behind an MBA.”
And where are the complaints about overpaid MBA’s?
Texas high school football coaches making 100K is hardly evidence of teachers being overpaid. The UC-Berkeley football coach gets $2.5 million. The average full professor? 150K.
Puh-lease do not use football coaches as examples of teacher pay.
IAT
SteveJ, when I say “engineer,” I mean a REAL ENGINEER, as in Mechanical Electrical Nuclear Chemical Civil Biomedical. FE/EIT, PE.
Not a computer programmer.
P.E. bigots crack me up sometimes. I’d get one if I thought it would do anything for my career.
PE bigots? I’m just saying that they aren’t paid the same as other faculty. It’d be like looking at the b-school faculty salaries (average 250K at UCB) and saying all college faculty make a quarter million a year. That’d be stupid.
Not bigotry, sensibility.
GEez people are sensitive.
IAT
I was talking to Oxide about the Professional Engineer license and the people who like to use the phrase “REAL ENGINEER”. I suspect you thought I was responding to your athletics post?
New Jersey Teachers -
Top pay is $120,000+ for 9 months of work
They Pay NOTHING for health care
Their families pay NOTHING for health care
As retirees they pay NOTHING for health care
Have insane pensions
And - NJ is broke - I mean really broke.
And has the highest property taxes in the nation (talking $15,000 on an avergae run of the mill 4 bed/2.5 bath on a 1/4 acre).
I dined with an elderly couple from NJ on the train down to Miami last week. In our brief conversation they went from bemoaning their property taxes, to vehemently objecting to education cuts, to explaining why they were contemplating a move to the Carolinas because of various tax benefits.
The fluidity with which they progressed through those topics left me awestruck.
I dined with an elderly couple from NJ on the train down to Miami last week
Bless you!
There is definitely a current meme of bashing government workers going around. It seems to focus on the fact that government workers tend to be unionized, still have some benefits, get some days off like workers in civilized countries, and get real pensions instead of 401k scams.
Of course, this being America, the attitude is to tear down these workers, rather than to build up private-sector jobs so that they have the same positives. It’s like a barrel of crabs.
Hmm, whose interests would be served by removing any jobs with good benefits from the American working landscape? It ain’t the workers…
The guy that sits next to me has a wife that is a Jersey kindergarten teacher. I think she just got her “step” raise to the $75,000 - $80,000 range. Thank god she has a master’s degree for teaching kindergarten.
I don’t see any systemic problems that could arise from paying somebody $75,000 for 10 months of teaching kindergarten. And her benefits are also spectacular. But god forbid you voice that these unionists haven’t earned all of these goodies. Don’t even hint that they banded together merely to distort the political process to their favor.
“banding together to distort the political process in their favor” is exactly what the American people need to do, rather than banding together to distort it in favor of the banksters, which they are currently.
“”banding together to distort the political process in their favor” is exactly what the American people need to do, rather than banding together to distort it in favor of the banksters”
Yes, agreed; now consider that the banksters also have captured the regulators, bribed the politicians, and made sure that they make $$$ while we and our country go broke.
Then also consider that these same vampire squids want a new world order for laws on property transfer and ownership (MERS), assembly and speech (you might be a terrorist if you speak out or go to a meeting) and of course gun control (why should they risk lead poisoning)
“Don’t even hint that they banded together merely to distort the political process to their favor”.
Yeah, “banding together” so that workers are not exploited is really a bad idea.
Because obviously, if the free market is left to its own devices, companies will make sure that they pay their workers a decent living wage out of the kindness of their hearts.
If you never read Upton Sinclair’s “The Jungle”, go do so now. After reading it, please come back and tell me that unions are a bad thing.
Free market in the public school system?
Are you a teacher?
“Free market in the public school system?”
Sarcasm - ON.
But actually the rise of charter schools is exactly about privatizing the educational system - and charter schools often do pay their teachers less.
“and get real pensions instead of 401k scams.”
I would much rather have my “401k scam” than a traditional pension. Pensions have a way of only being dependable as long as the employer is. If the employer falls on hard times, then pension fund can be raided or go underfunded. If the company goes BK, the pension obligations are typically shed to the PBGC, and the pensioners get only pennies on the dollar.
Why would I want to depend on my company still existing, and not falling on hard times? I’d much rather have an account that I actually own.
And when Wall St. decides to fleece your 401 through market manipulation, then what? Thank god that’s never happened.
At least with a pension, the government will (somewhat) guarantee it.
Your 401? Too bad, so sad.
“At least with a pension, the government will (somewhat) guarantee it.”
25-cents on the dollar is not much of a guarantee. Yes, that’s the approximate value that a friend of mine received when his pension was taken over by the PBGC.
I’d rather take my chances with getting fleeced by Wall St; perhaps if I’m smart and pay attention, I can do better then 25-cents on the dollar.
Of course, this being America, the attitude is to tear down these workers,
You do realize that to fund these generous salaries/great beneifts and insane pension for “public servants” - the government TAXES you (mostly property taxes). The government takes your money and gives it to them (for political support). And union goons think taxing you into the poor house is a great idea to pay for all their goodies.
Don’t pay your taxes? Another public union goon with a gun comes and takes your house.
“Of course, this being America, the attitude is to tear down these workers, rather than to build up private-sector jobs so that they have the same positives.”
Thanks for proving his point.
You’ve nailed it Bub Diddley.
Nailed it to the wall.
Of course, this being America, the attitude is to tear down these workers, rather than to build up private-sector jobs so that they have the same positives. It’s like a barrel of crabs.
Hmm, whose interests would be served by removing any jobs with good benefits from the American working landscape? It ain’t the workers…”
yes its a diversion and I’m the first guy to complain about high paid state worker retirements like CA firemen
so its pretty werid watching this sea change in attitude , I remember the 1/2 cent CA sales tax increase passing for fire protection back in the 1990’s back then it seemed you couldn’t pay public safty workers enough.
It’ll be interesting to see if we ever hear of some kind of “leak” indicating that there was a conscious and concerted effort by TPTB to villify unions and government employees as a means to distract attention from the banksters and politicians and their shenanigans.
I do not think this is an organic movement. It is being orchestrated very carefully, so as to avoid class warfare.
The rift between blacks and lefty Jews was carefully nurtured in the 60’s for the same purpose.
LOOK at the income disparity in this country! It is not between gov’t workers/unionized workers and J6P…THAT IS NOT THE PROBLEM!!
It’s been orchestrated since the 1970s by the Business Roundtable.
I think that with a lot of the public employees, there’s a large pay gap between the “blue” and “red” states.
A lot of the more senior teachers in North Jersey make in the high five figures, for example, and have good health benefits and a nice defined benefit pension. They also have employment for life (i.e. “tenure”).
Too bad the public employee union leaders can’t figure out how to get the Fed to shower them with trillions of dollars in bailouts, the way Megabank, Inc does. It seems like these budget problems would vanish with sufficient helicopter drops of cash……
Just one problem with that.
It’s US Dollars, our currency of trade. Every new dollar devalues all the ones we have earned and saved. A flood of new cash will show up in rising food and commodity prices. In time, this will translate into higher consumer prices and a country much poorer.
The poorer will be everyone who isn’t a trader in commodities. That’s most of us.
Every new dollar devalues all the ones we have earned and saved.
Which is why the middle class is so screwed. If a burger-flipper wants a dollar, he has to labor for it. To the upper classes, it’s just another digit on the computer. Angelo Mozillo had no problem handing out $400K in *poof* money, and the government made that into *real* money when Fannie bought the loan. Meanwhile, the burger flipper would have to flip burgers for 26 years to make that amount of money (pre-tax), much less save that amount.
Here is the problem with articles like this, and the responses.
People either agree or disagree depending on local conditions. The typical pay and benefits for public employees relative to private employees varies widely. So does the relative guilt of taxpayers and public employee unions for the upcoming disaster.
In NJ, teachers paid substantially into the pension funds while taxpayers paid nothing — the pols said Wall Street would pay for it all. In NYC it was the reverse — the unions paid it little and taxpayers paid a ton.
Exactly.
Also, my link to median teachers’ pay show be showing up later.
That median is less than 50K.
If HGTV can get some of it right, how come the MSM can’t seem to tell the truth about housing going forward?
Top 10 Real Estate Trends to Know for 2011
http://www.frontdoor.com/Buy/Top-10-Real-Estate-Trends-to-Know-for-2011/56111/p1
Underwater on their condo, couple delays starting a family:
“The couple, both college grads, count their blessings, yet feel the recession has slowed their life together. “It just seems like we should be in a good home by now, with a backyard, more than one bathroom,” Mariann Lovato said. “We just don’t know where we’d put a baby.”
“In Santa Fe County, new households grew by 72 percent between 1970 and 1980, then by 44 percent during the next decade. Between 1990 and 2000, 14,000 new households were created, a 39 percent increase. Over the past nine years, however, just 2,360 households were formed in the entire county, an increase of just 4 percent, according to the American Community Survey.”
http://www.santafenewmexican.com/Local%20News/Families–stuck-in–neutral
“This is not a pity party,” said Todd Lovato
Good for them!
It’s time for everybody to make some hard choices and get their priorities in order.
Do they really want a child? If that is the case, this is hardly the right choice. If she is 30, now is their chance, even if they have to live in 600 square feet — forever.
Perhaps they can live with less stuff per person rather than fewer family members. What is it — 18 square feet per person for a bed, with perhaps that much next to it? That’s less than 100 square feet for three.
I think people in the rest of the U.S. would be amazed how little space people live in in NYC. And people in NYC would be amazed at how little space people in the rest of the world are used to.
Agree it’s a tough choice and hope this couple finds a way.
However, I applaud them for their caution, many people would reproduce without forethought and then complain about it.
A while ago on the bus to NYC, I was sitting next to a woman who was on a temp hitch at the World Bank, but whose real job was for the Chinese central bank. I was blathering on about how great my new apartment was, how spacious, but I certainly also made it clear that it was a one bedroom.
Her first question was whether my parents were going to move in with me.
Americans don’t understand that in 90% of the world only the truly wealthy can afford a detached home. Even in prosperous Japan, middle class Japanese refer to their cramped apartments as “rabbit hutches”.
FWIW, “middle class” people across the globe raise families in cramped apartments and ferry their brood around in a subcompact hatchbacks, and that’s if they even have a car.
Americans will gety used to this new reality sooner or later. The idea that every middle class family will have a large home with a pickup truck and a Suburban in the garage is history. Global wage arbitrage guarantees that pretty much anyone outside of the managerial class will continue to see a major drop in their standard of living.
The tricky part is how will the debt pushers try to confront this sea change? Smaller homes mean less crap, less consumption - that flies in the face of their response to this event so far - which is only to push more debt, more consumption.
“Smaller homes mean less crap, less consumption”
Not necessarily… I think it will lead to a new mix of status symbols for consumption.
A few years ago I visited some friends who were stationed at a military base in Japan, she specifically arranged for us to visit a Japanese friend of hers at her home so I could see how they really live… It was not remotely that spare zen environment that we think of… Apartment was crammed full in a way that was amazing. She said all of her local friends homes were the same…
And take a look at the rise of stores that sell things to organize our stuff and the prosperity of the storage unit rental industry… Some smart marketers will always find ways to empty wallets.
Virtual goods! Subscription fees! Data packages! Instead of owning a stack of dvds, it’s a Netflix subscription. Instead of having a record collection, pay Spotify (it will come to the US eventually, if the record labels finally decide they want to make money in the modern era). Instead of a clogged closet, an iphone full of apps. That’s how consumerism is going to keep going. At least it might be better for the environment.
And don’t forget leisure activities.
I suspect it will take decades before Americans actually “get used to the new reality”. We are witnessing a violent collapse of ingrained quality of life expectations. Sure, people feel entitled to a lot of stupid stuff they don’t need to survive, but expectations of a brighter future for themselves and any potential children surely will have serious impact on family decision making. The folks in Chindia are looking at a brighter future as they emerge from 3rd world conditions. Americans are looking down the barrel of an economic gun, the erosion of their wages, health care, housing, and of course their little self image enhancing status symbols like cars and clothes and other crap. Decades of social conditioning to desire and expect these things is not going away overnight. There are examples of advanced countries that underwent similar economic related collapse in quality of life, the USSR is an intersting case. Death rate went up (with lots of suicide, alcoholism, etc), birth rate went down and those two demographic trends made a nice dent in the population and the growth rate:
http://en.wikipedia.org/wiki/File:Natural_Population_Growth_of_Russia.PNG
It’ll take decades for society in the USA equilibrate to the new status quo. In the mean time…
Well, once J6Pack’s paid for truck falls apart and he realizes that he can’t afford to replace it with another F-150 and once the profiled couple understands that their paychecks are as good as they are going to get we might see a change in expectations. I agree it won’t be overnight, but after a few years they will start to see the light and understand that cramped apartments and cheap, junky Chinese hatchbacks are as good as its going to get.
Oh, I agree. They’ll eventually realize things aren’t going to get better even in the face of increasing propaganda to the contrary. Pravda, baby. Already happening. A lot of people are waking up from the comfortable American Dream and confronting the horrible reality that awaits them. My point is the widespread realization that things may get much worse and stay that way is going to have a devastating pyschological impact on people, especially the young. That kind of widespread pessimism is a brand new thing for the USA in the postwar era and I’d bet the social impact is going to go way way beyond a simple acceptance of junky cars and little apartments. An advanced country in collapse might look very different from the frugal adaptability we see in family structures from the 3rd world where children are still seen as “assets”.
It’ll take a generation before people just forget what life used to be like in America and then just go blithely into their new future of serfdom. I wonder what the Russian collapse would have looked like without their massive natural resource base?
“I wonder what the Russian collapse would have looked like without their massive natural resource base?”
Check out Dimitri Orlov for some interesting insights about post 1989 Russia, esp. his essay Post-Soviet Lessons for a Post-American Century. Not sure about some of his predictions, but found it interesting reading. (Google “club orlov” to find his blog.)
All the while technological innovation, and robotic factories act to reduce the cost of manufactured goods thereby raising everybody’s standard of living.
The correct comparison isn’t with living standards in the poorer regions of India, it’s between living standards in the 21st century, and those in the 19th.
Material World: A Global Family Portrait [Hardcover]
Peter Menzel
Peter Menzel (Author)
(Author), Charles C. Mann (Author), Paul Kennedy )
I first saw it on display in Albuquerque NM a eye opener on how people live worldwide. Families stand out in front of house / hovel with all possesions displayed.
I remember seeing that book. ISTR being amused that they pointed out that the French peacekeepers were not part of the household for the photo of the family from Sarajevo.
Hah! I saw that one in Albuquerque also… right next to another nice coffee table book made up of full page photos of average Americans around the country showing off their guns in their own living rooms!
Well the LIS pending has finally been served on the landlords (6 months later). The process server told us that the foreclosure courts are tied up for many , many months at the moment. He knows some folks that have been in full foreclosure for over two years and haven’t yet moved. The backlog is just immense down here and getting worse it seems.
Out of curiosity, how are you handling rent payments? Are you still paying, paying into escrow, cut a discount deal with the LL?
We cut a great deal with the LL as they go into bankruptcy. Our lease is over, so we are going month to month, week to week now. Waiting for the bank to foreclose before we pack up and move, hoping to make it to the end of the school year as not to disrupt the young-un too badly.
The upside, the monthly nut isn’t too much. The downside, if something big breaks that cannot be ignored, the repair is 100% our problem now, and we have to let in the bank appraiser, process server etc etc.
We feel blessed that we know the clock is ticking, so many renters out there are just surprised when they get the boot from the bank. We are in the loop, and keep one eye open on rentals in the area. We find a great one, we jump ship quick and just put this mess behind us.
* Henry Blodget: Goldman Sachs Clients Can Invest In Facebook’s IPO — But You Can’t
In a rare move, Goldman is planning to create a “special purpose vehicle” to allow its high-net worth clients to invest in Facebook. While the S.E.C. requires companies with more than 499 investors to disclose their financial results to the public, Goldman’s proposed special purpose vehicle may be able get around such a rule because it would be managed by Goldman and considered just one investor, even though it could conceivably be pooling investments from thousands of clients.
It is unclear whether the S.E.C. will look favorably upon the arrangement.
What the vampire squid wants, the vampire squid gets.
Don’t you just love crony capitalism?
“What the vampire squid wants, the vampire squid gets”.
Never fails! They own the game!
Goldman runs the SEC, so yes, they will look favorably upon it and probably suggest that the FED provide a load of stimulus dollars to lend to Goldman for the trades, at ZERO interest, at least until they can skim off some more “profits”.
It’s great to live under a government that exempts you from any rule of law and allows you to swindle your clients for your own end.
All Hail Obama.
Obama? Seriously, you expect one man to stop an organization that runs the nation?
Short of outright declaring war on GS, just what do you think he can do?
Besides, he didn’t create the problem, did he? Did he? No he didn’t.
Washington insiders on both sides of the isle created the problem, Bush was at the helm. I wish they would have let these too big to fail douche bags crash and burn. I doubt if TEOTWAWKI was imminent without TARP.
Exactly.
How I Missed the `Housing Recovery’ of 2010: Caroline Baum
http://www.bloomberg.com/news/2011-01-03/how-i-missed-the-housing-recovery-of-2010-commentary-by-caroline-baum.html
‘As it turns out, the “recovery” referred to in the headline was in house prices, which rebounded modestly when sales improved.’
Around here, we know that type of movement as a dead cat bounce.
‘The “stall” was their renewed slide, based on the S&P Case-Shiller Home Price Index. Prices fell in all 20 metropolitan statistical areas in October compared with September, according to the Case-Shiller report.’
And this price movement is known in these parts as a reversion to sanity and affordability.
‘And not a moment too soon. Unless there’s a spontaneous surge in housing demand, prices will have to fall to allocate the bloated inventory of unsold homes.’
You’d think the Federal Reserve chair would understand that prices have to fall in order for the market to clear; after all, he has written a number of college economics text books.
Or is the point to not let the market clear, in order to let banks enjoy monopoly profits on their REO sales? Which gets me back to the point that we need to get competition back into the banking sector.
Wonder if we’ll ever try this here? Nah!
Medvedev signs decree to cut number of federal officials.
Russian President Dmitry Medvedev signed on Monday a decree reducing the number of federal officials by 20% until 2013, the Kremlin press service said.
According to the decree, the number of federal officials is to be reduced by 5% in 2011 and 2012 and then by 10% in 2013.
The number of federal officials in Russia almost doubled in the past five years from around 600,000 in 2005 to over 1.1 million in 2010.
The decree follows the instruction made by Medvedev in June. The measure could save up to 40 billion rubles ($1.3 billion) out of the Russian federal budget.
Under Obama, the number of Federal “workers” has been rapidly increasing and wages have been going up. That’s how a fascist regime works. All entitlements are to the government employees and overseers of the masses of slobs who support them. It’s good to be king.
Remember the “commission” on government overspending. Commissions are what you do when you don’t want to take responsibility for making tough decisions. They said raise taxes, cut spending.
What did we do? Just the opposite.
Now the Republicans will get stuck with having to make CUTS, while the democrats point to them as mean, nasty, villians who want to take away your “entitlements”.
We are in big trouble. Cutting the number of Fed employees would be a great start. I don’t see it happening.
Per population Obama has far fewer workers than almost all recent presidents:
Washington Post
Executive Branch civilians Total U.S. per 1000 of
population population
1962 (Kennedy) 2.48 million 186.5 million 13.3
1964 (Johnson) 2.47 million 191.8 million 12.9
1970 (Nixon) 2.94 million* 205 million 14.4
1975 (Ford) 2.84 million 215.9 million 13.2
1978 (Carter) 2.87 million 222.5 million 12.9
1982 (Reagan) 2.77 million 232.1 million 11.9
1990 (Bush) 3.06 million* 249.6 million 12.3
1994 (Clinton) 2.9 million 263.1 million 11.1
2002 (Bush) 2.63 million 287.8 million 9.1
2010 (Obama) 2.65 million+ 310.3 million+ 8.4+
charts never work- the first number is federal workers, second is US population, third is fed workers per 1000 population
I bet if you added in the “outside contractors”, the chart would tell a very different story. Thirty or forty years ago, that segment didn’t even exist; today, it is significant. And outside contractors are essentially on the payroll, regardless of whether they are actually considered employees.
They used the same method used by the Bush 2 admin, so I doubt it’s designed to undercount federal employees.
From the same article:
So how many federal workers are there really?
Differing ways of measuring federal employment produce different counts. One method, commonly used in federal budgeting, is to calculate “full-time equivalent” positions, or FTEs, on a fiscal year basis. A full-time employee working the entire year would count as one FTE, as would, for example, two part-time employees each working half-time. Another method, used in the Office of Personnel Management’s FedScope database, counts all employees who are in pay status as of the end of each calendar quarter.
The Eye’s method of tallying up the workers uses figures from George W. Bush’s administration that tallied the total number of Executive Branch employees — including U.S. Postal Service workers — and determined the number of federal workers per 1,000 Americans.
In order to establish a somewhat fair administration-to-administration comparison, The Eye compared workforce totals from the first full calendar year of a president’s term, starting with John F. Kennedy.
The number of federal contract employees surpassed regular federal employees 4-5 years ago.
I can’t remember. Who was the President then? Which party controlled Congress.
I bet if you added in the “outside contractors”, the chart would tell a very different story. Thirty or forty years ago, that segment didn’t even exist; today, it is significant. And outside contractors are essentially on the payroll, regardless of whether they are actually considered employees.
At it’s for exactly that reason that we should expect govt employment to grow during his term. He’s made it pretty clear that his goal is to reduce dependence on contractors. The idea being to save money. We’ll have to see if that works out or not.
The fact is the federal government doesn’t do much. It just takes in money and sends it back out — interest on the debt, Medicare & Medicaid, Social Security, aid to the states.
All it actually does that requires lots of people is Defense and the Post Office.
Most people funded by government work in education, defense/police/prisons or health care, and most actual public employees are teachers or carry guns.
You do realize it was Republicans who blocked the sunsetting of Bush tax cuts for millionaires, don’t you?
I’m not saying Obama has clean hands, but, my God, why can’t you see the dirt flying all over Washington? Why do you have to act like one “team” is completely clean, the other covered in mud?
IAT
That works out to $1,181 per employee.
China backs Spain to emerge from crisis: Beijing
January 3, 2011
China is confident Spain will recover from its economic crisis and Beijing will buy Spanish public debt despite market fears of an Irish-style bailout, a top Chinese official said Monday.
The comments by Vice Premier Li Keqiang were made in an op-ed piece in Spain’s leading daily El Pais one day ahead of his arrival in Madrid for a three-day official visit, the start of a European tour that will also include Britain and Germany.
“Since China is a responsible investor country in the long-term on the European financial markets, and in particular in Spain, we have confidence in the Spanish financial market, which has been translated into the acquisition of its public debt, something we will continue to do in the future,” he said.
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“China supports the measures adopted by Spain for its economic and financial readjustment, with the firm conviction that it will achieve a general economic recovery”, said Li, who is widely tipped to become China’s next premier.
Max Keiser: WTF does this mean . . . I guess China is like, TAKING OVER THE WHOLE FRICKIN WORLD!! If China is going to backstop the Euro – than the spotlight should shine back on the US dollar as the weak link in the fiat currency bon fire.
Something tells me that they’re gonna be sorry.
I seem to recall stories about how the Japanese invested in Spain and in many cases lost their shirts. One story that stood out was an auto plant (owned by Suzuki IIRC) that was literally abandoned and gifted to the provincial government becasue it was so unprofitable.
Construction spending up for third straight month in November but still far below 2006 peak
WASHINGTON (AP) — Construction spending rose for a third straight month in November, helped by another increase in housing and a record level for spending on federal building projects.
The Commerce Department says construction spending increased 0.4 percent in November following gains of 0.7 percent in October and 1.2 percent in September.
Even with the three straight monthly gains, building activity remains 33.2 percent below the all-time high hit in March 2006, when spending was being driven by a record boom in housing.
There have been a few sparks of life in my burg at the low end of residential construction, but we are still light years away from returning to the glory days of 1000 new houses built per year. IIRC we’re around 100 or so new houses per year, up from maybe 50 or so at the very bottom.
I’ll know that the glory days are back when I see joe 6 pack, still in his construction site work clothes, waiting in line with his brood to eat midweek at a chain restaurant.
“…helped by another increase in housing…”
At this rate, the supply glut will be unbelievable before we are done with this housing bust.
Have scientists discovered how to create downpours in the desert?
Daily Mail UK
* Technology created 50 rainstorms in Abu Dhabi’s Al Ain region last year
For centuries people living in the Middle East have dreamed of turning the sandy desert into land fit for growing crops with fresh water on tap.
Now that holy grail is a step closer after scientists employed by the ruler of Abu Dhabi claim to have generated a series of downpours.
Fifty rainstorms were created last year in the state’s eastern Al Ain region using technology designed to control the weather.
Read more: http://www.dailymail.co.uk/sciencetech/article-1343470/Have-scientists-discovered-create-downpours-desert.html#ixzz19zOZOjd1
I don’t believe that story for some reason…
It’s funny ,the thought that came to my mind is if they create water
does it take from some other Countries water potential that they might need . Is there only so much water ? Can they somehow take it from a
place that gets to much water ?
Whose moisture are they stealing?
There is no free water.
I imagine that a lot rain falls directly in the ocean.
It does.
As a resident of Hawaii I can confirm this. It wouldn’t surprise me if some organisms or currents depended on it, however.
Well, the salinity of the ocean would rise. That could cause issues with some sea life.
Home price is down, so why not insurance? ~ MSNBC
The cost of your home, and the cost to rebuild it, are two different things.
If you’re a homeowner, chances are your house is worth less than it was five years ago. But you could still be paying more to insure it.
Despite the deep housing bust of the last few years, the cost of rebuilding a damaged home — in other words, what you pay insurance for — has not changed much, according to industry experts.
That means that unless you have reduced coverage or increased your deductible, chances are you are paying as much or more to insure your home as before the housing bust.
“The price of homeowners’ insurance is based on the cost to repair or rebuild your home. The price of a home is based on the market value of that home and the land upon which it sits,” said Robert Hartwig, president of the Insurance Information Institute.
Although the recession has been particularly brutal for the construction industry, Hartwig said that hasn’t necessarily meant the overall cost of labor and materials needed to rebuild a home has gone down.
After rising nearly 62 percent between 2000 and 2007, the average premium for homeowners insurance did dip by nearly 4 percent in 2008, to $791, according to the most recent data available from the National Association of Insurance Commissioners.
Now they want to discuss the rising carrying costs for RE? Heck, insurance, HOA, and property taxes have all been going throughout the bubble era - hardly news or let alone a mystery to responsible houseowners.
What they need to do now is fess up and admit that the affordability equation for RE has markedly shifted and that price declines in many locales will have to overshoot to make the numbers work. And that’s without really factoring in the wage situation!
I grew up in a lovely stone and redwood house built in 1909, even back in the 1970’s it couldn’t be insured it for replacement cost.
The Dow Jones Industrial Average rose more than 120 points, or more than 1 percent, for the first trading day of 2011, pushing past its record closing high for 2010 of 11,585.38 for a new two-year high. Stocks ended the year slightly below two-year highs with double-digit gains in each major index.
12,000 here we come…Weeeee!
Yes, the Fed can throw trillion$$$ at the stock market, and inflate prices unidirectionally and drive valuations to insane multiples; yes, they can continue with reckless abandon (which has always ended in disaster before.)
What I fail to understand is, if they really have that much control, why don’t they just make housing and the stock market always go up? Is it about making their Wall Street buddy’s short bets occasionally pay off handsomely?
Yahoo’s main page this morning:
Hiring boom predicted for 2011
Economists cite a few reasons why the number of new jobs could triple this year. Trend could help housing, too.
http://finance.yahoo.com/news/2011-A-hiring-boom-even-at-9-cnnm-560578363.html?x=0
Hmmm … weren’t they making similar predictons a year ago?
There’s only thing wrong with that prediction: “economists”
Maybe this is why the banks are not willing to mark-to-market their RE holdings just yet: the world will end on May 21th!
http://www.washingtonpost.com/wp-dyn/content/article/2011/01/03/AR2011010300453.html
Here’s an interesting tidbid I didn’t know….
One of the most famous in history was by the Baptist leader William Miller, who predicted the end for Oct. 22, 1844, which came to be known as the Great Disappointment among his followers, some of whom subsequently founded the Seventh Day Adventist church.
So that’s why the Seventh Day Adventists gave up drinking!
Brown May Cut Aid, Ask Calif. Voters to Extend Tax Hikes ~Bloomberg
Jerry Brown returns as California governor today after an absence of almost three decades, facing a “day of reckoning” over a $28 billion budget gap that promises battles with lawmakers, unions and investors threatening to shun the bonds of the most-indebted state.
That’s the ticket!
What do you folks known about Trustee Sales? What should one be on the lookout for in terms of pitfalls and potential problems?
Been reading the blog for a number of years. Not planning on buying anything at the moment. But when I do I think a trustee sale might be a good avenue and I need to be informed.
‘a trustee sale might be a good avenue’
The short answer is that right now it isn’t a good way to go in most places. Better to wait until the foreclosure is complete.
Better do your homework to see all the liens on the property.
Isn’t this what your title insurance is for?
Goolsbee: Full Retard
The Market Ticker ® - Commentary on The Capital Markets
by Karl Denninger
And I say that with apology to all legitimately intellectually-challenged people in the United States, who I’m insulting dramatically by including him with them:
“I don’t see why anybody’s playing chicken with the debt ceiling,” Goolsbee said today on ABC’s “This Week” program. “If we get to the point where we damage the full faith and credit of the United States, that would be the first default in history caused purely by insanity.”
http://market-ticker.org/akcs-www?singlepost=2337299
MARYLAND (TheStreet) — Remember when local governments reaped bonanzas from rising property values and taxes? They added services, tightened regulations and hired more employees. Schools added nonessential programs and stricter supervision of teachers, further bloating payrolls.
The housing bubble burst and property values dropped an average of 35%; but mayors and school superintendents view as essential too much of what they do.
State governments, relying more on income and sales taxes, were not as flush. The Internet and globalization make those taxes tougher to collect. Washington has been busy imposing expensive mandates on states — especially in Medicaid, education and environmental standards — without sending enough money to pay for those.
In 2010, 29 states and many localities raised taxes and increased fees on everything from soda to hospital beds, but often those drove away business, increased unemployment and didn’t much alleviate budget woes.
In 2011, things get worse, even as the national economy recovers modestly. Federal assistance to the states from the 2009 stimulus is expiring.
In many areas, assessed values on properties are adjusted only once every several years, so assessments will only now fully reflect the collapse in housing prices, and property taxes will fall further. And foreclosure sales are pushing down prices further in many localities.
Former Reagan, Bush official killed, police say
Body of John Wheeler was found as garbage truck emptied contents at landfill.
DOVER, Delaware — Police on Monday were investigating the slaying of a former Reagan and Bush administration official whose body was found at a landfill.
The body of 66-year-old John Wheeler III was discovered on New Year’s Eve as a garbage truck emptied its contents at a landfill.
His death has been ruled a homicide.
Wheeler had a long career in Washington and led the committee that oversaw construction of the Vietnam Veterans memorial there.
From 2005 to 2008, he was a special assistant to the Secretary of the Air Force.
…he was a special assistant to the Secretary of the Air Force.
THAT Wheeler? Holy moly.
Cuomo Cuts His Salary By 5 Percent in Tough Times
Says he’ll give that portion of his pay - $8,950 — back to state
Gov. Andrew Cuomo says he’s taking a 5 percent pay cut, along with five top aides and Lt. Gov. Robert Duffy.
Cuomo says he’ll return to the state that portion of the $179,000 governor’s salary, which was set by law in 1999. It amounts to $8,950.
Staff in the Executive Chamber agreeing to similar cuts from their predecessors’ salaries are the governor’s secretary, counsel, director of state operations, counselor and chief of staff.
Other chamber expenses are also under review.
Cuomo says Monday that New Yorkers have learned to do more with less in order to live within their means, and the government has to do the same.
He has proposed a pay freeze for the state’s nearly 200,000 employees to help deal with a looming $9 billion budget deficit.
“Cuomo says Monday that New Yorkers have learned to do more with less in order to live within their means, and the government has to do the same.”
Unless you’re a Banksta!
LA Times with 5 real estate “experts”:
http://articles.latimes.com/2011/jan/01/business/la-fi-cover-housing-recovery-20110102
Summary: LA-Y predict housing in CA will rise 2%. Shocker. Everyone else flat or down.
Brown Says Calif. Budget He Proposes Next Week Will Be `Painful’
Jerry Brown took the oath of office as California’s governor, 36 years after he first stepped into the job, promising residents an “honest” budget.
Brown, 72 and a Democrat, takes command of the nation’s largest state by population at a time when California faces $28 billion in budget deficits during the next 18 months.
“The budget I present next week will be painful but it will be an honest budget,” he said today.
Hmmm - Only Nixon could have gone to China…
Exactly. Someone has to, and he just might be the only player who has the political chops to talk the California population/legislature into taking its budgetary medicine. Whether he’ll succeed or not is one thing, but I firmly believe that he is interested only in fixing our budget mess–fixing it for its own sake, not for the sake of his political career, or union donors, etc. It will be an interesting few years.
Nixon should have pulled out in 1913.
Or his father should have.
The budget I present next week will be painful but it will be an honest budget
Painful? Maybe to those on the receiving end of taxpayer largesse.
Didn’t Carter try that…once?
U.S. consumer bankruptcies rose 9 percent in 2010
NEW YORK (Reuters) - The number of U.S. consumers who filed for bankruptcy protection rose 9 percent in 2010, and the number could increase in 2011 because of high debt loads and stagnant income growth, a report issued Monday shows.
The number of filings totaled just over 1.53 million in 2010, up from 1.41 million in 2009, according to the American Bankruptcy Institute, citing data from the National Bankruptcy Research
Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.
I’m really hating this labelling of individuals as “consumers”.
From the LATimes comes this story– which for some reason is not getting a lot of airplay on the political MSM.
In addition a slew of last-minute plum political appointment$ to cronies (this after very public denunciations of these same positions as “unnecessary and wasteful,”) California’s outgoing governor last night ended his term by commuting the sentence of “good boy” Esteban Nunez, son of former Assembly Speaker and (ahem,) close-personal-friend-of Ahnode, Fabian Nunez.
Young Nunez, as you may recall, was recently sentenced to sixteen years in state penitentiary for the stabbing death of CA State San Diego student, Luis Santos– a peon who had had the gall to deny the inebriated Nunez admittance to an off-campus fraternity party.
Although his attorney argued that Esteban didn’t deliver the actual killing wound, he did admit to instigating the retaliation, stabbing two other people, then driving his fellow gang-members to Sacramento where they attempted to burn their clothing while Nunez bragged that his father “would take care of it.”
Unfortunately for the defense, and despite glowing testimonials from LA’s mayor Anthony Villarogosa, (also close-personal-friend-of-Ahnode,) Estaban’s MySpace page http://tinyurl.com/37gpyn4 made the rounds of the internet chat rooms. On which he gleefully shows off his gang tats and signs, appears in a formal wedding portrait wearing a backwards baseball cap, flouts his underage drinking and drug use, and fetchingly, poses using a live little toad for a pincushion and a hapless kittycat for a knife rack. Lovely child.
If you happen to run into him on the “outside,” you might want to tell him “hi” for the Santos family?
Ahnode, on the other hand, will likely be given an ambassadorship. Or something.
“Tormenting animals:”
I guess it beats killing humans.
Oh wait…
He’s a waste of skin, I would have no problem pushing the off button on the punk, but that’s just me.
Looks like a real homie. Hope the bloods keep him well fed.
From this past weekend’s 2011 Predictions thread:
12. It is likely to soon dawn on policy makers that
(a) home prices are still too high compared to historic norms– i.e., they never fully corrected from the bubble peak;
(b) lower housing prices could potentially spark the greatest economic boom in U.S. history, as frozen housing market liquidity would give way to labor market mobility, bringing qualified American workers to where their skill sets would most help the economic recovery;
(c) by increasing labor market mobility, lower housing prices would enable market forces to provide economic stimulus without the need for tax increases.
COMMENTS??
Well, there would be the fallout from the further devaluation of financial assets as an offset. Someone is going to take the hit for that.
“Someone is going to take the hit for that.”
But it would be due to ‘market forces,’ not taxes, and hence politically acceptable.
Follow the path of near-term gratification of the decision makers I think.
1) It is the unabashed, publicly stated goal of Geithner and co to stop house price declines. Why? See below. A combination of personal experience and professional goals that benefit himself and his colleagues.
2) The NAR wants money. They get these from high house prices. But they need to find a maximum profit point - price x quantity. Price is high, but quantity seems to be lacking. So if quantity drops low enough, they’ll accept some price declines.
3) The banks want money. They love high house prices as this goads consumers into borrowing more. The PTB believe that how go the banks, so goes the United States. But - again, price x quantity in terms of number of loans created. Drop the quantity, and they’ll kicking and screaming accept lower loan amounts.
4) Local politicians make lots of money from high house prices via property taxes.
5) Politicians are suspecting that 10% unemployment puts politicians jobs at risk. They will all by vying for money from the public treasury.
6) Labor market mobility is a very real, but somewhat subtle concept. Politicians are not good at deep thinking. Not as a group, although there may be isolated exceptions.
Conclusion: In spite of themselves, they will continue to pursue the policies which they see have immediate next-election gratification and prevent immediate dislocation. The financial companies are holding the economy hostage - or least the policy makers think they are. If there is a political tsunami in 2012, then we might see some different solutions from politicians.
Americans I think will accept sacrifice, if they see all levels of society sacrificing. Perp walks will help too.
As I watch the snow fall I ran across this interesting Documentary .
You decide who are the quacks . This documentary covers some of
the history of the battle between conventional and non-conventional.
topdocumentaryfilms.com/hoxsey-how-healing-becomes-a-crime/
IMHO ,why not take the best from many alternatives ,all at the same time ,
including the conventional .
Stocks Are Rallying, but Are Investors Too Bullish?- CNBC
The stock market’s path to prosperous times ahead is unlikely to be smooth, with increasing volatility along the way and hazards both domestic and foreign.
I have been reading this type of crap for decades, if anyone is sucker enough to believe that either party wants to ’screw’ with wall street then…Never mind just watch how it plays out.
Republicans may starve financial reform of cash
WASHINGTON (Reuters) - Republicans in the new Congress could put the budget squeeze on two powerful regulatory agencies to slow President Barack Obama’s crackdown on Wall Street.
A Democratic-controlled Congress pushed through the Dodd-Frank bank reform laws last year and regulators were counting on a big budget boost to police the $600 trillion over-the-counter derivatives market — blamed for much of the excess behind the 2007-2009 financial crisis.
But the last Congress failed to deliver on the funding, and that will be even harder to obtain with Republicans vowing to cut spending as they take control of the House of Representatives and boost their rolls in the Senate.
Republican say they want to review the expansion plans of regulators. “Once you turn the money loose, it’s a little harder to stop that train,” said Representative Randy Neugebauer of Texas, who will head the House Financial Services oversight subcommittee.
Before lawmakers agree to dole out funds for the Securities and Exchange Commission and the Commodity Futures Trading Commission, Republicans want more time to study whether the spending is warranted, Neugebauer told Reuters.
The delay could give a reprieve to big Wall Street players ranging from Goldman Sachs to BlackRock who, through their lobby groups, have been pressing regulators to slow their furious pace to impose a new rule book on the financial sector called for by the reform law.
Republican Representatives Spencer Bachus, the incoming chairman of the financial services committee, and Frank Lucas, the incoming chairman of the agriculture committee which oversees the CFTC, also wrote to regulators urging delay in the rules-making process.
They will also strip the health care plan of all the things that big insurance companies hate. Unfortunately they won’t be able to reverse the requirement that everyone buy insurance.
The Dems are the trojan horse that gets the bill through the door, then teh GOP opens the horse to allow the troops inside to rape J6Pk.
So long as Wall Street has DC fully captured w/ campaign contributions, I expect any financial reform to be a sham.
If they had nothing to hide, would they be engaged in this preemptive counterespionage damage control exercise?
Facing Threat From WikiLeaks, Bank Plays Defense
By NELSON D. SCHWARTZ
Published: January 2, 2011
By the time the conference call ended, it was nearly midnight at Bank of America’s headquarters in Charlotte, N.C., but the bank’s counterespionage work was only just beginning.
Julian Assange has never said explicitly that the data he possesses comes from Bank of America, though he did say that the disclosure would take place sometime early this year.
The day after Julian Assange of WikiLeaks threatened to “take down” a major American bank, the shares of Bank of America fell 3 percent. The bank’s stock has since recovered.
A day earlier, on Nov. 29, the director of WikiLeaks, Julian Assange, said in an interview that he intended to “take down” a major American bank and reveal an “ecosystem of corruption” with a cache of data from an executive’s hard drive. With Bank of America’s share price falling on the widely held suspicion that the hard drive was theirs, the executives on the call concluded it was time to take action.
Since then, a team of 15 to 20 top Bank of America officials, led by the chief risk officer, Bruce R. Thompson, has been overseeing a broad internal investigation — scouring thousands of documents in the event that they become public, reviewing every case where a computer has gone missing and hunting for any sign that its systems might have been compromised.
…
Some great comments following that NYT piece!
The cost of health insurance reform: Federal mandates jack up costs
The Grand Rapids Press
GRAND RAPIDS — When clients looking to renew their health insurance policies wince at the steep rate hikes for 2011, Joel Schaaf feels their pain.
Like many of his clients, the Georgetown Township agent’s health insurance bill recently took a big jump: Golden Rule raised the monthly fee by $100 to $353. And, like his clients suffering from sticker shock, Schaaf is comparing companies and plans in the hope of finding a lower-cost remedy.
Rate increases, fueled in part by wellness provisions required by health care reform, have hit many individual and small-group plans hard, agents say.
“A lot of people are shopping around,” Schaaf said. “Or they are going to higher-deductible policies to help keep their costs in line.”
Schaaf said most policy renewals are coming in at 20 percent to 35 percent increases.
He cites the example of a company with about 10 employees. Under its Blue Cross Blue Shield plan, its family rate rose from $1,311 a month to $1,583, a 21 percent increase.
To keep costs down, he said many employers are increasing deductibles — to $4,000, $6,000 or even $10,000. Some are shifting to health savings account plans, in which employees can make tax-deductible contributions to a fund to pay for unreimbursed medical expenses.
Shopping around for policies is nothing new, said Dominic Siciliano, a general agent for Blue Cross Blue Shield and the president of the West Michigan Association of Health Underwriters. In the past five years, health insurance rate increases have tended to run 10 to 12 percent, he said.
“The rate increases are probably higher this year than in the past, but rate increases are not uncommon,” he said. “More than ever, the groups are feeling pinched. They are shopping around as much as they have ever shopped.”
Kurt Buursma, a Holland agent, said most policies he sees are going up 20 to 25 percent. His own family insurance policy with Humana has doubled in four years, from $102 a month to $203.
“My situation is very, very indicative of what the market is,” he said.
He also has seen many people lose employer-sponsored health care coverage.
“I’ve had three different clients tell me they are shutting their health plan down or closing their company in the past week,” Buursma said.
The shrinking pool of people insured by employer-sponsored plans plays a part in rising rates, said Jeff Connolly, vice president of Blue Cross Blue Shield in West Michigan. There are fewer people in the small-group market, which includes businesses with 100 or fewer employees, and they tend to be older.
Employees who lose coverage shop for individual plans — which Buursma compares to switching from a Cadillac to a Yugo.
“An individual product always has significant limitations to it,” he said. “They’re loaded with limitations and gaps, and for that you pay a king’s ransom in premiums.”
This is what the GOP will use to strip all the health care requirements out of the bill, but again they just won’t be able to find the votes to strip the insurance industries prize, requiring all people to buy insurance.
This is just anecdotal, but I’m hearing more people saying that they’re dropping their health insurance. Or they’ve already done so.
Doesn’t bode well for the future of the health insurance industry when people are ditching its product.
Particularly if the mandate goes away — and the ability to exclude people with pre-existing conditions or charge them up the wazoo stays away.
The Republicans will destroy the private health insurance market. Not that that’s a bad thing.
wrong they’ll do away with the mandates requiring coverage but they just won’t be able to muster the votes to overcome the mandatory insurance provisions. Ie the insurance industry will have few restrictions and requirements but J6pk will have to buy insurance or get a fine.
but J6pk will have to buy insurance or get a fine.
And I predict that a lot of people will be just fine with the fine. Which implies that our National Anthem will be changed to “So Sue Me!”
An American dream: government gets out of housing
Jan 3, 2011 12:58 EST
Could the U.S. government stop subsidizing mortgages altogether? Probably not in real life. But that is where the debate over reforming Fannie Mae and Freddie Mac, as well as righting the public-private sector balance in housing, should begin.
This unlikely dream imagines the government out of the business of guaranteeing housing finance within 10 years. That should be long enough to phase out subsidies slowly, preventing the still fragile housing market from dropping further. It would give private-sector banks time to absorb an estimated $5 trillion of government-backed mortgages. And it would wean homeowners gently off the subsidized financing they’ve grown accustomed to. Just as importantly, though, 10 years is short enough to focus minds now.
The Treasury, due to propose ideas for Fannie and Freddie in January, has been prevaricating for two years. And the indecision has made the not-so-dynamic duo more powerful. They currently guarantee the highest percentage of U.S. home mortgages seen in the last 20 years, according to Barclays. They enjoy unlimited access to taxpayer funds and have expanded their affordable housing mission to include the well-off.
By laying out a clear exit plan in 2011, legislators could reverse the expansion that has already sucked down more than $150 billion of taxpayer funds. It would also make it easier to roll back emergency measures put in place at the height of the recent crisis. For example, Fannie and Freddie are still guaranteeing loans for as much as $730,000 in high-cost areas, even though the private sector is again strong enough to provide loans to rich homebuyers. Without a deadline such temporary measures risk becoming permanent.
…
AAPL still cheap according to cramer:
http://www.cnbc.com/id/40885036
Why don’t we have a National Home Foreclosure Clock adding up the totals so we can see in real time Americans becoming homeless on the continent their forefathers conquered?
Can’t buy me love, no — everybody tells me so.
Can’t buy me love, no — no, no, no, no.
Full disclosure: I never have used Facebook, nor intend to ever use it, especially once Gollum sticks its vampire squid beak into it.
January 3, 2011, 6:12 pm
I.P.O./Offerings | Venture Capital
Goldman Learns You Can’t Buy Friends On Facebook
By EVELYN M. RUSLI
Goldman Sachs may have found a new friend in Facebook, but the financial firm isn’t finding much love from members of the social network.
On Sunday evening, DealBook reported that Goldman Sachs and a Russian investment firm, DST Global, invested $500 million, in the deal that valued the company at $50 billion. Goldman has the option to raise an additional $1.5 billion from its investors for Facebook.
But as the pair gets cozy, the investment bank is struggling to win the popularity contest on Facebook.
A quick search reveals no shortage of anti-Goldman groups on Facebook, including “Goldman Sachs Sucks,” “1,000,000 Strong To Demand Our Money Back from Goldman Sachs!,”” “DALTON, JUST SAY NO TO GOLDMAN SACHS,” “Goldman Sachs is Evil!,” “TAKE GOLDMAN SACHS DOWN,” “The Anti-Sachs: Those Who Desire Goldman’s Demise,” and “The Goldman Sachs scandal makes me want to change my name!”
In reaction to Goldman’s investment, one Facebook member started a group on Monday titled, “Keep Your Dirty Hands Off My Facebook.” The group threatens to abandon Facebook en masse on January 31, if Mark Zuckerberg maintains his ties to Goldman and D.S.T.
…
Another problem with the Megabank, Inc monopoly system of banking: Instead of facilitating many small investments which might ultimately lead to many valuable future innovations and small business employment, Gollum chooses to dump $50 bn chunks down boondoggles like Facebook. And turn a kid named Zuckerberg into the next American oligarch in the process. Anyone who owns a textbook on finance should either burn it or throw it into the garbage bin; the only thing that makes companies valuable now is whether Gollum says they are valuable.
Only after we calculate the lost educational value to America of having a whole generation of young people waste their math and science study time on social networking, we will truly understand this folly.
Is Facebook worth $50 bn of investor’s money?
Published on Tue, Jan 04, 2011 at 09:01
Updated at Tue, Jan 04, 2011 at 17:26
The first day of the year more than doubled Mark Zuckerberg’s personal fortune, estimated at USD 7 billion. A USD 500 million investment by Goldman Sachs and a Russian investor has valued Zuckerberg’s popular social networking site, Facebook, at USD 50 billion.
New York Times chief M&A reporter and author of bestseller - Too Big to Fail, Andrew Ross Sorkin broke the news on this deal breaker. In an exclusive interview with CNBC-TV18’s Menaka Doshi, discussed whether this deal is more than just a financial investment by Goldman Sachs.
Andrew Ross Sorkin, chief M&A reporter, New York Times
Excerpts from Your World at 10 on CNBC-TV18 Watch the full show »
Below is a verbatim transcript. Also watch the accompanying video for more.
Q: It is a very big day for Facebook, USD 500 million investments and a valuation of USD 50 billion. That is quite some deal?
A: There are two big headlines here. One is this USD 50 billion valuation which is quite extraordinary for a company that only started a couple of years ago out of a dorm room at Harvard University. The second big headline here is that Goldman Sachs is the investor and what role it is going to play.
Ultimately, what this deal will mean for Goldman as they position themselves on Wall Street as part of the transaction. Not only is it investing in the company, it is also going to raise an additional USD 5 billion from its own high networth investors and its own clients. That is a big piece of it and whether Goldman will ultimately be able to lead a Facebook IPO. This is as much a financial investment for Goldman as is a strategic investment going forward.
Q: What is Facebook going to use this money for? How did this deal come about?
A: Some of the money will be used for employees, hiring, etc. It also maybe used to cash out some of the early investors. There are multiple parties to this. We are still trying to report out the entire process, but it sounds like Goldman Sachs came to Facebook, it wasn’t that Facebook wanted this money. When someone arrives at your doorstep and says, we are going to value your company at USD 50 billion, it is hard to say no.
…
Happy New Year, everyone!
I’m off to India (again!) with all the money I saved by not buying a house. Hold the fort down while I’m off living the carefree life.
Don’t drink the water!
Please check in from time to time? No one does it like you does it.
Travel well, Sir Puss!
United Van LInes released its 2010 migration study today.
http://www.earthtimes.org/articles/press/van-lines-migration-study,1599738.html
Highest influx is Washington DC. That figures.
In the east, the two top influx states are the Carolinas. In the west, it’s Oregon and Idaho.
I wish these news articles would give a link to the orignal UVL data…..
“Highest influx is Washington DC. That figures.
In the east, the two top influx states are the Carolinas. In the west, it’s Oregon and Idaho.”
Washington DC - Good paying government jobs?
The Carolinas, Oregon and Idaho - Lower cost of living?
I’m thinking greener grass.
I had to poke around to find the original study - it popped up on Google after I originally posted.
Hot off the presses!
http://www.unitedvanlines.com/mover/united-newsroom/press-releases/2011/2010-united-van-lines-migration-study_000.htm
Thanks once again, DennisN!
Idaho used to be such a great, out-of-the-way place. I wonder if people are moving to Idaho Falls, Poca and Twin the way they’re moving into Boise area?
Montana: 52% outbound.
The UVL study doesn’t have that much granularity. All that farmland out by Idaho Falls, Pocatello, and Twin Falls is probably not as attractive to non-Mormon immigrants as Boise or the northern part of the state. All those stories in the LA Times talk about the whole LAPD retiring to Coeur d’Alene and Sandpoint (”home of Sarah Palin”).
The same is probably true of Montana. The western part of Montana is in the Rockies, but the eastern part is more lke the great plains IIUC. I’d guess immigrants go to Bozeman and Missoula but not to places like Billings and parts east.
It was different during the boom years. Here’s the study for calendar year 2005 at the peak of the boom. Everyone seemed to be leaving CA for NV or AZ.
Also there was a lot of migration into TN, KY, AL, and GA, which has now stopped.
http://www.unitedvanlines.com/mover/united-newsroom/press-releases/2006/2005-united-migration-study-01-06.htm
It occurs to me that no one wants to sacrifice when there is a feeling that there is an elite that is feasting off public money.
Combine that with the fact that stimulus/deficit spending has been keeping the party going for a sizable chunk of the working class (by that I mean those who have to work for a living). Plus the vast majority of politicians are not going to voluntarily push austerity and sacrifice on their constituents while others are obviously feasting.
Plus no one knows exactly how high the US debt can go before bondholders lose faith in the ability of the US to pay its interest on the debt.
So my conclusion is that there will be little serious change, but lots of sound and fury, along with some window dressing. Those without political power will the ones who bear this initial cost.
I think the party will keep going, right up until the system breaks - right up until the point that buyers of US treasuries refuse to do so without a very high interest rate.
When that will happen? One year? Ten years? Thirty years? I don’t know. But it seems to me like that is where the United States is heading. I don’t see any serious debt reduction happening till the breaking point is reached.
“I think the party will keep going, right up until the system breaks…”
Exactly. It’ll be like going to work, and they’re closed–locked up tighter than a gnat’s a**. The MSM will bring in a soothing and trusted face like Tom Brokaw, and they’ll have a “pork-n-beans” jingle worked up to go along with it. Initial coverage will be continuous, and then it will wind down.
If you flip the channel you get Katie Couric asking someone what it’s like to starve in America. Did you ever think it could happen? Is your belly button rubbing on your spine yet?
The real problem is that there are few warning signs just before the investor confidence breaks down. And once it’s broken, debt is SO expensive that existing debt levels are beyond the capacity of the borrowing entitiy to service. Just as some of us were becomming nervous about the housing market by 2004, there was no way to predict WHEN it was going to collapse.
WASHINGTON (Reuters) – U.S. President Barack Obama is considering tapping J.P. Morgan Chase executive William Daley for a senior role in the White House, possibly chief of staff, a person familiar with the matter said on Monday.
Daley is also a former commerce secretary. If he were chosen, the move would help satisfy a clamor in the business community to have greater representation for private industry within the administration
This should shorten the time lag between when orders are issued to Obama and when they are executed.
“…clamor in the business community to have greater representation for private industry within the administration…”
Having a JP Morgan executive sitting right in the WH sounds like a great way to squash any further moves towards financial regulation.
They already own the government. I guess they just want to keep a close eye on it.
We could sure use a post from Eddie about now to assure us that the Lost Vegas economy is booming once again.
Las Vegas in crisis
Dec 29th 2010 | LAS VEGAS | from PRINT EDITION
…
Just as the booming gambling and tourism industries provided new jobs, the parched but spacious valley provided new housing. Thus the population of Clark County, the area around Las Vegas, quadrupled between the 1980s and 2008 (before shrinking slightly in 2009), as people from southern California, in particular, fled overpriced houses and moved to Las Vegas. This caused one of the biggest construction booms and housing bubbles in the nation.
Then, in 2008, all these bubbles popped. Whether in or out of state, Americans, who had recently felt rich because of their inflated house values, suddenly felt poor and out of luck. They stopped coming or, if they came, sat for less time at the tables and gambled less. They became “gun-shy,” says David Schwartz, the director of the Centre for Gaming Research at the University of Nevada, Las Vegas.
Tourists are now returning, but in numbers too small and with mindsets too cautious to help Las Vegas much: they are spending less on each visit than before the bust. Two huge and glitzy casino-hotel complexes, both conceived before the bust, opened recently, adding yet more rooms to the city’s already dire overcapacity and forcing other hotel operators to discount even more. And yet, even though Las Vegas has become “a bargain”, as Mr Goodman says, many tourists who want to gamble increasingly ignore the city (and intimate airport pat-downs) altogether by patronising Mississippi river boats, Indian casinos or the internet.
…
It always cracks me up to see the LV types avoid even the word “gambling”, substituting the politically-correct term “gaming” instead. “Oh, no, these tourists aren’t gambling away their money: they are just enjoying playing games!”
White House has lost one-quarter of its market value in three years
According to one real-estate website, the value of the White House has fallen from $332 million in 2007 to $252 million today. There are no plans to sell it, however.
Yeah, we don’t want to give it away
And here the White House was rebuilt from scratch during the Truman administration. It’s in fine shape.
That place has been bought off so many times over the decades it’s not funny.
By Alistair Barr, MarketWatch
SAN FRANCISCO (MarketWatch) — Standard & Poor’s Ratings Services said Monday that it’s taking longer for the U.S. housing market to absorb foreclosed homes, which means there may be a major drag on prices for a few more years.
The New York metropolitan area may suffer the most from this, the ratings agency also said.
At the end of the third quarter of 2010, the principal balance of foreclosed homes topped $450 billion, which represents about a third of the nonagency residential mortgage-backed securities market, according to S&P managing director Diane Westerback.
http://www.marketwatch.com/story/sp-warns-on-shadow-inventory-of-foreclosures-2011-01-
“Hurry! It won`t last” Listing of the day.
486 Dover Rd Tequesta, FL 33469
$184,000 Price Reduced
5 Bed 2 Bath 3,584 Sq Ft
Rambling Rustic
Drum Roll…………..
Days on site 586 days
South Florida bankruptcies up 40% in 2010
By Marcia Heroux Pounds
Sun-Sentinel
Posted: 2:04 p.m. Monday, Jan. 3, 2011
— South Florida’s personal bankruptcy filings were up 40 percent in 2010 compared with a year ago, according to data provided by the U.S. Bankruptcy Court in Miami.
In Palm Beach, Broward and Miami-Dade counties, bankruptcy filings totaled 34,627 in 2010 compared with 24,681 in 2009.
Monthly bankruptcy filings for the region peaked in August 2010 at 3,387 and have been falling since September 2010.
In December, 2,577 residents filed for bankruptcy compared with 2,645 in November 2010, a decrease of 2.6 percent. December 2010 filings were up 14 percent compared with December 2009.
Bankruptcy lawyers point to South Florida’s high unemployment, in November ranging from 10.8 percent to 13 percent in the three counties, as today’s primary driver for filing bankruptcy.
COMMENTS Comments feed .
The party is just starting.Thousands of floridians every week will not get unemployment checks.Desperate people will do desparate things ANNEY get your gun.
money bags
3:14 PM, 1/3/2011
Governor Scott take note… I am one of the statistics… my unemployment ran out, I’ve spent every penny I have trying to stay afloat, been through the indignity of bankruptcy, waiting to lose my house via foreclosure… I’ve applied everywhere, for jobs paying significantly less than what I made before, all over the country, with no luck… don’t take away unemployment for the thousands who need it still, until you have created the jobs you promised…
Mike
4:00 PM, 1/3/2011
OK , where is Ben Jones ? Did the snow fall so hard that it put him out of commission for the morning of Jan 4,2011 ,or is my computer having problems?
People need not travel far to get a great underwater experience. Get one in the comfort of your own home.