Bits Bucket for January 15, 2011
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Somehow Krugman’s article about the Eurozone didn’t get posted here yet. It’s fairly long - 8 pages on the web.
http://www.nytimes.com/2011/01/16/magazine/16Europe-t.html
Eventually, however, Argentina slid into a persistent recession and lost investor confidence. Argentina’s government tried to restore that confidence through rigorous fiscal orthodoxy, slashing spending and raising taxes. To buy time for austerity to have a positive effect, Argentina sought and received large loans from the International Monetary Fund — in much the same way that Greece and Ireland have sought emergency loans from their neighbors. But the persistent decline of the Argentine economy, combined with deflation, frustrated the government’s efforts, even as high unemployment led to growing unrest.
By early 2002, after angry demonstrations and a run on the banks, it had all fallen apart. The link between the peso and the dollar collapsed, with the peso plunging; meanwhile, Argentina defaulted on its debts, eventually paying only about 35 cents on the dollar.
It’s hard to avoid the suspicion that something similar may be in the cards for one or more of Europe’s problem economies. After all, the policies now being undertaken by the crisis countries are, qualitatively at least, very similar to those Argentina tried in its desperate effort to save the peso-dollar link: harsh fiscal austerity in an effort to regain the market’s confidence, backed in Greece and Ireland by official loans intended to buy time until private lenders regain confidence. And if an Argentine-style outcome is the end of the line, it will be a terrible blow to the euro project. Is that what’s going to happen?
Not necessarily. As I see it, there are four ways the European crisis could play out (and it may play out differently in different countries). Call them toughing it out; debt restructuring; full Argentina; and revived Europeanism.
He then discusses the four ways in some detail. Food for thought.
The article talks of currency devaluations as a form of wage cut. Workers will not agree to a wage cut but devaluing the currency the workers are paid in in effect cuts the worker’s wages.
Hence, IMO, this is the main reason China doesn’t want the US dollar to be devalued against its own currency; China wants to keep US wages high and its own wages low so jobs and infrastructure and US dollars will continue to flow from the US to China.
It’s a smart move for China, IMHO. China has a good thing going; Why should they want to change it?
Another good thing China has going for it is the abundant supply of US dollars it has in its coffers at the same time the US suffers from a shortage of US dollars.
Cash that flows for where it is massed in abundance to where it is desperately needed is cash that gets to call the shots in a business transaction.
“Another good thing China has going for it is the abundant supply of US dollars it has in its coffers at the same time the US suffers from a shortage of US dollars.”
That would make a lot of sense to me if the money supply was static.
But it isn’t. BB is spitting out inkjet dollars (tip of the hat to Sammy S.) at an astounding rate.
I just don’t see any way out of this other than currency devaluation through inflation. It will get ugly imo.
But the inkjet dollars aren’t going to Joe6pack so he can spend them on stuff he needs, they are going to the banks to replace the destruction to their balance sheets.
The net effect is still going to be a shortage of dollars because trillions of dollars that are owed to Joe6pack aren’t going to be handed over. There is a massive underfunding problem in this country; Trillions of dollars - tens of trillions of dollars - that are promised are not going to be delivered. This is going to create a chronic long-term shortage of dollars throughout the US, but not a shortage of US dollars in China because what few dollars Joe6pack gets his hands on eventually ends up in China.
China produces, the US consumes. This situation benifits China but royally screws the US.
Combo,
I don’t disagree with you on debt destruction.
I think where we disagree is the amount of new money on the horizon. IMO it is a bottomless well that will far exceed any and all destroyed debt.
The Captain has turned on the Fasten your seat belt sign. We are heading into some turbulent weather.
“But the inkjet dollars aren’t going to Joe6pack so he can spend them on stuff he needs, they are going to the banks to replace the destruction to their balance sheets. ”
THey’re also going to the federal gov’t, who continues to spend like a drunken sailor. I saw this in Mexico in the 70’s. Juan 6 Pack didn’t see much from the gov’ts printing press, but there was lots of inflation. In the end they had to lop 3 zeros of the peso.
“THey’re also going to the federal gov’t, who continues to spend like a drunken sailor. I saw this in Mexico in the 70’s. Juan 6 Pack didn’t see much from the gov’ts printing press, but there was lots of inflation. In the end they had to lop 3 zeros of the peso.”
That is a prime example of what can happen (and will happen, IMO).
In defense of drunken sailors, they normally don’t run up crippling bills their children will be on the hook for.
If anyone cared about small retail investors (as opposed to hedge funds and Goldman’s prop trading desk) the muni market plummet would be a major story in the MSM. The little people in flyover land are the largest holders of muni debt; hence, that the Banksters and their servants at the Fed don’t give a rat’s behind about that market.
Did Mexico have a country the size of China buying up the printed dollars? It’s not just China, a large number of countries are trying to keep their currency from rising vs the dollar. So they buy up more and more dollars and burry them. It probably is a game of musical chairs at some point one is going to want out of the game but given the problems with unemployment around the globe I don’t think it will be soon. Massive food /energy inflation and massive unemployment w deflation both result in an angry population. I suspect the latter has more time to take action.
“J6P would get upset, but not that upset if he understood economics.”
If J6P understood economics, he wouldn’t be J6P!
“Workers will not agree to a wage cut but devaluing the currency the workers are paid in in effect cuts the worker’s wages.”
That’s right. Your average J6P would get very upset if he knew his nominal wages were going to take a haircut, but if an oil price spike from, say, $30 a barrel to $90 a barrel over the period of a decade or so leads to commensurate increases in the price of gasoline which makes it far more expensive for him to drive to work on the same (nominal) paycheck, he will grumble but accept it. Further, I doubt any union contracts even allow for wage cuts (please correct me if I am wrong). Devaluation is a more politically and technically viable option for reducing the (real) wage than nominal wage decreases.
How many gallons do you make an hour?
J6P would get upset, but not that upset if he understood economics. A USD devaluation makes imports more expensive (so his cost of underwear goes up,) but makes exports more competitive (so more chance of a job.) Given his sensitivity to imports is only 10% or so, it’s not a bad deal.
The people that really hate currency devaluation are the rich. If you have $10M in the bank, your sensitivity to currency devaluation is more like 50%+. Brie, BMWs, Armani suits, the local French restaurant, skiing the Alps all get more expensive.
The US banks hate it to: that USD-denominated home loan just became a loss in the global capital markets.
Gorebi:
I think you just explained in a nutshell why some people believe in a weak-currency policy. IMO, that’s one of those arguments that sounds good on paper, but doesn’t work well in practice.
Emperical evidence shows that nations who embark on weak-currency policies are comparitively unsuccessful. The “richer” nations (where yer average person lives comfortably) are the ones with strong-currency policies (accompanied by tariffs, etc). I think a lot of that has to do with confidence in the currency itself.
I mean gorobei. Too much coffee.
Big V,
I think that’s a bit over-simplified. The richer nations have traditionally pursued flexible currency policies (strong at times, weak at others.) Those that left the gold standard earlier grew faster than those that stuck to it longer.
Ideally, a country wants mutual low tariffs and a natural currency strength. Countries pursuing extreme weak (e.g. China today) or extreme strong (e.g. LatAm in the 1970s) policies take a lot of pain when the global economy changes.
If too many big economies push their exchange rates around, virtual currencies (EuroDollars, PetroDollars, various baskets, offshore ccy proxies) spring up to reduce the risks.
A short-term US weak-money policy is not great (and will be horrible if the rest of the world believes we have gone insane, and so somehow dumps USD as the world reserve currency,) but it’s hard to see what else it can do given the realities of the No-New-Taxes political system and the modern global banking system.
Why would J6P take a wage cut when he also knows his money is devaluing at the same time?
That’s too stupid even for inbred hillbillies.
Very true, eco, but unfortunately J6 does not understand this. He just knows that the value of his house is going up, and “that’s a good thing” according to what he’s been told.
I agree that China is the party with a comparitive advantage in our current financial relationship. However, I also think the relationship has become dysfunctional, and there is no way to salvage it. Both countries (US and China) are playing currency games to try and keep the money flowing, but it won’t work. You simply cannot have a situation where companies are created in one country, and then the productive value of those companies are given to another country. That only lasts until the first country’s reserves are all used up (IOW, until now).
There is a way of considering currency in terms of the actual resources represented by said money. If you look at it that way, labor/production in China is absolutely not cheaper than labor/production in the US. It costs much more, but it appears to the rube to be less expensive because of the way the numbers show up on a piece of paper. As we have learned, the “true cost” of our parasite/host relationship with China is HUGE. You end up undermining your entire economic system just for the benefit of the $20 blender. Now THAT is a bad deal. Furthermore, there is no way for China to benefit from our economic system if it has already been destroyed, now is there?
Well said, V. You also have to factor in the massive ecological damage the Chinese are doing their their own country while they make cheap crap to export to us.
Then you also need to factor in the same damage we did to ourselves for almost 100 years.
Excellent BIG V …..it only works for a while .
Anyone who claims “one world currency” (e.g. a universal gold standard) is the way to go will have to admit the Eurozone crisis calls this notion into question.
Wow there were some dreadful posts in Friday’s bits. Surely there’s something at least a little positive out there. What about industrial production up five months in a row? Or is the sum total of the U.S. “industrial production” immaterial?
The question is, how is the deleveraging going? If the rest of the economy is merely floating on ever-rising federal debt, the result will be another crash.
And this time, instead of a bunch of irresponsible corporations going under, which was prevented by socializing the losses, Social Security and Medicare go away for generations now under age 55, who will be lucky to get medical marijunna followed by legal assisted suicide.
You don’t celebrate surviving the heart attack when you have cancer.
You always make me smile.
LOL!
You are the second one who I heated this from, that number 55. I have 53, 55, and 57 year old sisters. So this is scaring me once again. I am financially secure, but not really, if I have to financially care for my sisters. My oldest sister is the poorest. She depends on the food bank yet she is very interested in repealing Obamacare. Maybe she does not want to be forced to pay for insurance. I think she probably falls into that income range where she does not pay taxes. In her own best interest, she should be trying to get ad much ad possible from the taxpayers and push for the nanny state.
Heated = heard.
What is your sisters reasoning about repeal?
I don’t know. She is a social conservative. A Republican since 1972 when she was 19 and worked for Nixon’s re-election. I think she does not understand economics, like most social conservatives. I am 100% capitalist and I know most Republicans are like my sister. They may accept the capitalist rhetoric, but really want to cram their religion on the rest of us.
I’ve always found it interesting that “social conservatives” (who are likely to consider themselves christian) don’t seem to have much Christ-like compassion.
And I have noticed that a lot of “liberals” love to spew Christ-like ideals but only if it involves other people’s time, effort and money. The phony liberals and phony conservatives can all rot. God I wish this site would get back to the middle. Maybe I would read it more often.
I miss you not being around, nycityboy.
I very much liked reading what you had to say.
You mean “liberals” don’t pay taxes or contribute to charities?
Or does calling out phony Christians make the accuser a “liberal”?
Amen. I hear all the time about how we need some government program to show how “Christ-like” we are. To show compassion. Christianity is about PERSONAL responsibility, not government programs. If you want to be charitable, take the money out of your own damn pocket!
It may be just me but I absolutely believe, that for the last 25-30 years, the Dems and the Repubs have been at each others throats so hot and heavy in power struggles, special Interest groups paybacks and fund raising that they have forgotten the People and the Nations Business much to the detriment of the Entire nation.
Yes Virginia, there WAS a time when the President and the Congress at least actually appeared to work together in the best interest of the forgotten American people.
Well, at least I think there was…
Whyoung…..
Hmm they never seem to step up to the plate and offer to pay for unwanted pregnancies and then adopt the child…
I’ve always found it interesting that “social conservatives” (who are likely to consider themselves christian) don’t seem to have much Christ-like compassion.
Hey NYCboy:
Someone posted yesterday feels like we are in the eye of a hurricane calm for now…and scared about whats next. How much more news and dialog can we have on housing when its slowly moving?
We need to get back to the 700+ point Dow crash days…
The phony liberals and phony conservatives can all rot. God I wish this site would get back to the middle. Maybe I would read it more often.
they’re supporting crisis pregnancy centers all over the country..where do you think the money comes from? I buy diapers and onesies etc for them, attend fundraisers. All this is under you radar apparently.
But do they pay the hospital bills, or does medicaid pay for that? Do they pay to raise the child, or do they leave that to food stamps and section 8?
Don’t get me wrong, I am pro-life, but these crisis centers don’t really do a whole lot to help financially.
Welcome nycityboy! I really miss your snark. Please post more often. Let us know if you’re still thinking of moving and where you and your wife have traveled lately.
“Christianity is about PERSONAL responsibility”
Really?! Would you mind taking a moment to back up this statement?
nycityboy is back! Now if we could only get Gekko, Eddie, Joey and hoz to start posting again, it would seem just like old times again…
Ah, hoz. He taught us what CDOs were long before the NYT or WSJ wrote anything about them.
Amen. I hear all the time about how we need some government program to show how “Christ-like” we are. To show compassion. Christianity is about PERSONAL responsibility, not government programs.
Relying on Christians to be god Christians or people to be good people sounds great and is needed but it doesn’t always work in practice in the big picture. And this is not a theory. It is a fact proven by history and current reality.
Let’s take one example of mental-health. Our public mental-health care system was dismantled starting with Reagan. Now if it were true that in fact, private charity would always fill voids and needs then we would have a private/charity system that would fill the needs of the mentally ill as well as the public system used to. However this is not the case. Where can a poor broke mentally-ill person go to now for sustained support? Did the private/charity ethos fill this need? No and it has had over 30 years to do it. It didn’t because in practice, it can’t or won’t. Period.
Same can be said for health-care. Where is the comprehensive private/charity health care? Or drug treatment? Now I know there are a few private charities here and there that address some needs but they are not adequate and are not as effective as public programs that we used to have in America (mental health for example) and other developed countries have today.
hoz was also the first I recall pointing out here that banks have no “monies.” That was long before the Fall 2008 collapse revealed the same to the whole world.
He was somewhat of a volunteer financial adviser to the HBB, and I learned much from his posts. The last advice I recall him giving (which I have steadfastly ignored) was to buy an inverse-Treasury fund investment which would pay off handsomely when long-term T-bond yields rose. He obviously did not foresee the use of QE.1, QE.2, etc to keep a lid on long-term T-bond interest rates.
How’s this for a hoz prediction? (the actual low was 666.79):
Comment by hoz
2008-09-15 15:25:02
IMHO the bottom of the stock market will be around historical lows. PE ratios of between 6 - 9 on 1 yr future earnings. Since next years earnings for the S&P 500 are projected at $50 - 65 the PE of 6 would be 390 or on the high side 585. My personal outlook where I intend to cover any outstanding short positions is 680.
In historical perspective from top to bottom, this would be an average bear market.
One of hoz’s most valuable pieces of advice, which has helped shape my own bear market survival strategy: The main concern in a bear market is to avoid losing lots of money due to overinvestment in collapsing asset classes.
” Christianity is about PERSONAL responsibility, not government programs.”
When asked, Jesus reduced the 10 commandments and all of Jewish law to 2 - love your God and love your neighbor.
Love your neighbor as yourself. This statement seems to me to be saying we have personal responsibility for our neighbor. If I neglect myself, I cannot care for anyone else. If I neglect my neighbor, then my neighbor becomes my enemy. Who is my neighbor? Jesus defines neighbor much more broadly than just the people who live next door. We are all interconnected.
If government programs are more effective at taking care of my neighbor than private charities, then I believe I should support government programs.
That does not absolve me from responsibility for filling in the gaps in government programs. How should I fill in those gaps? Is it the best use of my time and energy to volunteer at a homeless shelter or do I have some rare talents that I should use instead - maybe tutor kids in math or do pro bono work?
At the same time, I cannot neglect my responsibility to care for myself and my family. How much time, energy, and money I have to give to my neighbor is directly dependent on how much it takes for me to provide for myself and my family. ISTM that government programs are efficient ways for me to provide for my neighbor.
She depends on handouts from food banks, has no health insurance and wants to repeal health care reform? Did your entire family eat paint chips or just you and one sister?
Bill, I don’t understand why you feel obligated to support your sisters financially.
They’re adults.
Co:
Support is relative, If you or your parents owned a house and your bro or sis has hard times would you let them stay in the basement or guest room to give them some financial relief to get back on their feet?
It would be very different if you also had to pay to feed them…that would be too far.
I would pay to feed any of my siblings or my parents if it came to that. Of course, I would also give them a kick in the butt if they weren’t making any effort to improve their lot.
Love is both.
My brother has no family - never married, no kids. If he needs support in old age, I expect to help him. One more mouth to feed in my home is no biggie. If he needs a nursing home, I may be unable to help.
My sister and I have kids. I expect them to care for us if it comes to that and I hope it doesn’t.
“How someone such as myself, (the generation of greed, you say) who has worked and contributed to the retirements of millions of other Americans for the past 40 years is suddenly the villain is beyond my comprehension.”
+100
The idea of giving everything to older generations “because they are counting on it” but slashing benefits for those younger “because they have time to adjust” has been repeated by a host of Republicans, starting with former President Bush and continuing with Paul Ryan. Bush’s term “at or over 55.”
The fact that Generation Greed, the 1960s generation, has been more likely than those coming after for 30 years might have something to do with it.
I’m not a Republican or a Democrat. But I will never vote for any Republican at the federal level on generational equity grounds. When they say they want to cut the deficit for the benefit of future generations, they only plan on cutting off those same future generations — or allowing the infrastructure that will benefit future generations to fall apart.
If Republicans want my vote, they can figure out what can reasonably provided to me (age 49) and my children (ages 16 and 18 — and cut the benefits provided to TODAY’s seniors to that level RIGHT NOW.
Otherwise, they are evil.
WT,
My age, as well as those of my daughters, mirrors yours almost to the day. I have felt for the last 10+ years that our generation will be the one bearing the brunt of this. Younger people, imo, will fare far better.
So when some talking head starts on with the austerity BS, taking one for the team, etc., while at the same time WS has gorged themselves at the public trough, I can only say FU.
Again and again and again.
FU
Sincerely,
SVG
WT,
P.S. Terrific post!
That’s an interesting point of view, and from my perspective, totally misplaced. I am 55. I started working when I was 13 for a small business in Tampa. I had my first SS deductions based on wages starting in 1972. I just got my SS Benefit statement.
If I keep working until I am 66.2 and continue earning what I was making before I lost my job last year, I am going to get about $2000 a month. Wow. I’m so excited. That’s 11 years from now.
I’ve already worked for about 35 years, excluding a few years I attended College full-time. A few of my friends that got government jobs are already drawing their government “pensions” with 25-30 years of “service”. I won’t get that.
The facts are simple. The DEMOCRATICALLY CONTROLLED governments of the 1960’s and 70’s wrote massive benefits to the CURRENT retirees. Most of them put in about 2% of their income, which gradually went up to the current 6.2% for SS taxes. This has been a Ponzi scheme based on current workers paying for new retirees. It has never been financially sound, except in political dreams of a check-kiting scheme dreamed up by Washington shysters.
Several Republican Presidents, starting with Reagan, tried to mend the SS system, but the Democrats wouldn’t allow it. It has been a ticking time bomb for 40 years. You may recall that LBJ gave us the “Great Society”. Programs for which we still pay. And don’t forget the “war on poverty” that has never been won and never will be.
The basic facts are simple. The demographics of the US of A don’t fit the 1935 model of SS which had 8 workers for every retiree. Life spans were shorter. Benefits were less. All that changed from the 1950’s onward. It’s a system that needed to be fixed a long time ago. Your Democratic buddies haven’t done anything about it. Even this latest buffoon in the WH hasn’t done anything but add to the deficits and “commissioned” a panel to bring ideas to reducing them while increasing them…. the coward’s way out.
How someone such as myself, (the generation of greed, you say) who has worked and contributed to the retirements of millions of other Americans for the past 40 years is suddenly the villain is beyond my comprehension.
As it stands, the SS Administration says I (combined with my next employer) should pay an additional 11 years in SS taxes, at my current rate to be able to “retire” at 66 and get full benefits if I work till age 70. Lucky me.
This system is broken and the only solution the government will find is to devalue the money and make good on worthless promises. My greatest fear is that the savings I have accumulated over the last 15 years will be “means tested” so that whatever little I am “entitled” to, gets reduced even more because I worked hard and saved some of my earnings (currently paying nothing, thank you FED).
In the meantime, when I find a new job, I will continue to support the current generation who has been living lavishly at my expense. I agree with you that reductions need to be made. A good start would be reductions in Public Employee Pensions, and then a restructuring of current payouts.
But look at Greece and Spain and Italy. No one wants the money to come out of their pockets.
Having been part of the generation that pays throughout my lifetime, I expect I will get to foot a bigger portion, too.
Perhaps you can elect another Leader who can have the government pay for everything…housing, food, healthcare, transportation and entertainment costs, all as basic “rights”.
We’ll just have the FED print up some more cash and pass it all around to those “less fortunate”. Then we won’t need to worry about fiscal responsibility. Party on, dude!
BINGO!
I have felt for the last 10+ years that our generation will be the one bearing the brunt of this. Younger people, imo, will fare far better.
Are you on crack?! The Fed and the “tax less, spend more” crowd on Capital Hill (from BOTH parties) has already shafted future generations with an unpayable $14 trillion debt. Thankfully for the establishment the younger generations have been too stupified by what passes for popular culture and distracted by the latest iGadgets to recognize how badly they’ve been reamed by their elders. It is not surprising that Ron Paul enjoyed the most enthusiastic support from young people, while the youthful Obama Zombies of 2008 are now bitterly venting on Huffington Post comments about how betrayed they feel.
WT — we are in the same boat, and thanks for the insightful post on our generational plight.
Sammy,
No, I haven’t been hittin’ the pipe lately.
Here’s the dirty little secret.
Our debt will be repudiated through inflation.
Look at post cold Russia as one example. Currency collapse, who got f-ed. Fixed income pensioners and anyone with savings. The younger generation were part of the rebuilt economy. Sure they got hit but they weren’t “all in” like my generation.
Post cold war Russia.
“I have felt for the last 10+ years that our generation will be the one bearing the brunt of this. Younger people, imo, will fare far better.”
“Are you on crack?!”
I really don’t think younger generations will be better off. Thus far, they have been worse off. Our generation was the first to be worse off, on average, than those who came before economically, but not the last.
“Several Republican Presidents, starting with Reagan, tried to mend the SS system, but the Democrats wouldn’t allow it.”
The 1983 Social Security deal was a failure — the regressive payroll tax was increased, all the proceeds were spent, the progressive income tax was cut, and that was offset by borrowing. Whether through higher taxes (Democratic alternative) or benefit cuts (Republican alternative), those who aren’t on the right side of the line when the next deal is done will end up paying twice.
Look at post cold Russia as one example. Currency collapse, who got f-ed. Fixed income pensioners and anyone with savings. The younger generation were part of the rebuilt economy.
The older generation created this mess by mindlessly electing and re-electing career politicians who were and are stealing them blind and racking up huge deficits.
A few years ago researchers took a poll of Russian young people to ask them what they wanted to be. Among the young women, the #1 answer was “hard currency prostitute.” They inherited a gargantuan cesspool of corruption and a mafia-run state.
A few years ago researchers took a poll of Russian young people to ask them what they wanted to be. Among the young women, the #1 answer was “hard currency prostitute.”
Great. Even Russian girls want to be Wall Street bankers nowadays.
I know Russia isn’t the land of eternal prosperity now but at least they are on the other side of the crash which is a positive thing.
We are still on the wrong side of the crash.
Who knows what will happen for sure? Only a fool would say. I have my opinions like everyone else. You pays your money and you take your chances.
Of one thing I am certain, we are all on the same side (there’s even room for bile & excreter)
Great. Even Russian girls want to be Wall Street bankers nowadays.
Please don’t besmirch the world’s oldest profession by comparing them with the reptiles on Wall Street.
I expect everyone younger than the boomers will have it worse. Older people tend to be conservative, and claim that “family values” are important, while doing everything in their power to take away anything that gives today’s families an advantage in this world. They are leaving the country in piss-poor shape for those who follow them.
Take this article about public libraries in CA. Older generations got the advantages of a decent public library system while growing up, so who cares if kids today have the same advantages? Screw them, we got ours, but don’t touch our retirement $$$. A microcosm of everything going wrong with this country. Leave everything in worse shape than you found it, while wringing the last bit of blood out of it for yourself: infrastructure, opportunities, social and political systems, etc. etc.
Brown Proposes Eliminating All State Funding for California Public Libraries
By Michael Kelley Jan 12, 2011
California Governor Jerry Brown released a proposed budget for FY11/12 on Monday that would eliminate all state funding for public libraries.
Brown’s shock-and-awe, $84.6 billion general fund budget, which still must work its way through the state legislature, would cut state spending by $12.5 billion and include a “vast and historic” restructuring of government operations.
This would mean the loss of $30.4 million for three of the state’s most important public library programs: the Public Library Fund ($12.9 million), Transaction Based Reimbursement ($12.9 million), and the California Library Literacy and English Acquisition Service ($4.6 million).
Paymaneh Maghsoudi, the president of the California Library Association (CLA) and the director of the Whittier Public Library, immediately condemned the move.
“The revelation … that Governor Brown is proposing to eliminate all $30 million in state funding for three of California’s most valuable public library programs …is both disastrous and disheartening,” she said in a press release.
Maghsoudi said that library funding had already been cut 75 percent under the two previous administrations.
I use my local library ocassionally. You have to consider the fact that the programs that Governor Brown is planning to eliminate are merely transfers from the state government to local governments. Those local governments could choose to reduce other programs or increase taxes to get the moeny needed to replace the lost funding from Sacramento. Of course, that situation will hit poor communities harder than rich ones. But everyone needs to keep in mind that the governor has some very difficult decision to make in order to close the budget gap. Here in Arizona, the dimwit governor decided to deny organ transplants to Medicare recipients. Jerry Brown will probably anger almost everyone in CA with program cuts and tax increases, but he probably won’t do anything that stupid.
I think that as ebook readers become more commonplace, traditional libraries will eventually disappear. EVENTUALLY. In the meantime, having access to a wide range of reading material is important to democracy. Not to mention having a wide range of reading material available for kids. Few parents can afford to buy a bunch of children’s books when their kids are first learning to read. It is in society’s best interest that these kids learn to read, and have access to a lot of books to encourage them to read. Cutting libraries is eating the seed corn, which this country has been doing for a long time in a bunch of different areas.
And even if kindles become as cheap as pocket calculators at some point in the future, will publishers allow for the kind of lending that libraries now do with paper books?
If libraries had never been started in this country, vested interests today wouldn’t allow such a thing to take place. And once we let these resources disappear, getting them back is going to be much harder.
Thanks Bub.
Your points are great!
But I do think the paper paged book will never be totally replaced and neither libraries.
There is just so much about it that is simple and functional.
Bill, I feel for you because my sister and I fully support a third sister who just turned 54, and her children, both in college. The bursting of the housing bubble allowed us to buy a little house for her for only $34K, so it only costs about $500/month, split two ways, to maintain all her expenses. It’s unthinkable to allow ones family to live on the streets and in shelters when you have the means to help. It sounds like your oldest sister is at least able to work and pay the rent. What do you think she will eventually need from you?
I wonder why she can’t pull in $500 per month.
Fluffy:
probably she can’t speak Spanish…almost all the jobs today require that…at least are here in queens, lots of new businesses opened up walking distance to my apt. yet none of them speak English.
My oldest sister will need money. she only paid ten years into social security. She has been obese all her life. Our mom died of cancer at 65 and was obese for only half her life. My sister seems to still have more energy at 57 than my mom at that age though. That sister and her adult kids are all self-described conservatives. At least that sister is a hard worker. So are the other two. None of us have real estate or fancy cars. Three of us have graduated from Cal State Fresno. The other one who makes more money than the other two sisters has an equivalent college degree. An A.R.T. And years of required classes for work.
I am hoping her adult kids take care of her when she needs help. But they don’t have jobs. The niece is still in college at
Cal State Fresno at least. Unemployment in Fresno has been traditionallybover ten percent for decades.
fluffy, I know it’s hard to imagine someone so incompetent that they can’t bring in $500/month. I’m not a psychiatrist, and my sister refuses to see one, but she has some sort of mental illness that makes her so difficult to get along with that she can’t keep a job. Never could, despite an IQ of 160. When I was younger I complained about her, then condemned her and wanted nothing to do with her, thinking that she would change when she hit bottom. She didn’t change. And it isn’t drugs or alcohol, though she smokes cigarettes. So now we help her and limit the cost as much as we can.
We’re excited because she landed a job recently doing typing for a small business that does medical dictations. My other sister bought her a laptop and a DSL line for Christmas, and she’s been typing away for two weeks and hopefully will get her first check next week. We don’t buy food for her on a regular basis, and she refuses to apply for food stamps. We’re hoping that she’ll be able to buy her own food from now on.
It’s unthinkable to allow ones family to live on the streets and in shelters when you have the means to help.
Unthinkable? Always? IDK. What if a sibling had kids to get welfare, chose to do crack for many years, never got help, never wanted to work, lost their kids and ended up on the street?
Would you let them live in your basement or let them live in shelters and the street?
Or how much support would you all give when they “ended up on the street”?
I didn’t want to supplement a Nephew that was on unemployment for a while ,but they would of been out on
the streets with 2 kids had I not done so .
He finally got a job ,but now another Nephew
got fired and hes in need .
But anyway ,I agree with Rio that Charities can not take care of
all the needs out there and Government has to step in . I wish there would be more fraud screening in these Government
programs however . But families do step in for a certain portion
of needs ,like RE hobbyist has done .
Glenn Beck keeps thinking that Charities can do it all ,but I think thats a little unrealistic .I know some Churches do a lot for their
flock and do stuff all over the World ,and the Red Cross does a
lot ,but it’s not enough.
I think a big part of the bitch is that people don’t like a lot of the choices that Government makes in the form of welfare or charity or hand outs .(Especially the recent bail outs of the rich
and favorable taxes or loopholes for the rich as if they were needy )
Every body would like to think funds go to the true needy ,and people resent Government funds going to people in other Countries that have corrupt governments that aren’t uplifting their people .
The welfare thing can become a vicious cycle . Currently being liberal about unemployment insurance makes sense because the
jobs aren’t there to replace the lost ones ,at least not yet are they there .
Lack of jobs is always going to end up putting a great burden on Government funds and its another reason why outsourcing jobs and manufacturing ends up coming back and biting the system in the face in adding costs and increased taxes overall .
Sorry to hear about your sister REhobbyist. But when you have an IQ of 160, your outlook on life and how people act can be summed up in one short saying: “The stupid. It burns!”
Much as we see the PTB making incredible and clinically insane decisions, your sister probably sees the entire world the same way.
And for the most part, she’s right.
The other problem is that the average person doesn’t want to be anywhere NEAR someone far smarter than they are, no matter how nice they act or good at their job.
Terrific post, WT!
“You don’t celebrate surviving the heart attack when you have cancer.”
I would! (Fortunately I have neither…)
WT….it’s not right that you would be deprived of benefits or your
children would be deprived of benefits . This idea that they create
generation warfare and pit generations against each other is the
great evil because there are better solutions . I don’t blame you for being mad ,but its a big con job as to how they want to redistribute
wealth . The long term structures of America are being threatened
and many factors come into play as to why this is happening .
If the intent is to totally do away with the Social safety nets that
were created so many years ago ,and affordable health care will
never happen going forward ,and contracts and pensions are only something to be taken after the fact in the name of bailing out chosen Winners ,than it’s corruption at it’s highest and it certainly
will continue ,and how can you even trust that your 401k won’t be attacked in the future and means tested ?
They are not going to be able to afford Medicare at the current
medical costs ,no question about it .What about a single payer
system run by the government that reduces cost by 50% in theory ?
Name the last government program that kept the same level of service and reduced costs by 50%. Single payor is great in theory, but in practice the government red tape and plethora of special required coverages that will be required will make today’s crazy medical costs seem cheap.
Like it, or not, we will end up with single payor, the only ones who will be happy are the ones who won’t be paying for it (the PTB, healthcare industry and the freeloaders). Medicare and then GW’s prescription drug benefits add-on have shown that our goverment will not be able to run a reasonable program at costs they initially project.
There might be other countries where they can make it work. Here, it will just balloon the deficit faster and reduce service levels to unacceptable levels.
What is the option ,only rich people being able to have health
in the future ? I don’t even use the health care system myself ,in spite of my age . Why is it that all theory on what to do about the problem starts from the idea that the health care costs aren’t bogus ti begin which ,such as the new 39% increases by some Health care
Insurance Companies . Pricing fixing monopolies have a lot to do
with unsustainable costs ,and that isn’t even touching upon the
rationing they are doing ,depending on the insurance company ,
to increase profits .
Really corrupt systems and prices need to be attacked . Just like the housing prices were nothing but a Ponzi scheme of unsustainable prices ,so it is true with many other prices .We are not living under the true principals of capitalism .
Certainly the current system is horrific and some new tactic is in order. That’s why I think single payor will happen. I just don’t trust our government to do anything rationally and at a reasonable cost.
Health care is currently the most uncontrollable cost we have as a company, short of just not offering it. Under the current regime, we have considered just giving each employee a stipend and having them buy individual policies for their families. That way we would be out of the process of selecting the insurance criminals, fighting about deductibles, copays and what procedures are necessary. If we get a 35% proposed increase this year that our broker is warning us about, this may be the year it happens.
That sort of increase would make health care costs be 8% of our total company revenues. We cannot survive with that much of the total resources devoted to health care. How will the owners respond? Either with what I described above, job cuts or pay cuts or they won’t be able to invest in the very capital intensive business. They have always tried to provide us with good benefits, putting myself in their shoes, I’m not sure it will last.
All that being said, having the Feds run it will not make things better or cheaper, it never does.
Don’t know if that will be true that the Government won’t make it cheaper . The fact remains that Companies can’t afford the costs
anymore and the whole system was built on a employer pay for employee health care system ,combined with Government Medicare for the over 65 .
For a reality check take a look at HBB predictions on New Years 2010 and see whether we were more pessimistic or optimistic than the way things turned out. We were right about the bubble bringing down the economy. We were right that Keynesianism did not work. The habit our politicians have is to repeat the same mistakes and expect different results. You decide!
The habit our politicians have is to repeat the same mistakes and expect different results.
95% of the electorate have the same habit. Vote for the Republicrat status quo, then wonder why nothing changes.
Isn’t doing the same thing over and over and expecting a different result a sign of insanity?
Yup.
“Isn’t doing the same thing over and over and expecting a different result a sign of insanity?”
No, it means use of the state jet, no bid contracts for your construction buddies, hot interns, and the public’s adulation. Depending on your Wall St. connections, you may also be able to raid various pension funds.
Bravo! Bravo!
Yes… Like shoveling wage earner taxpayer cash to corporations who don’t pay taxes. It works well at bankrupting wage earners and enriching corporations.
I don’t see corporations being enriched. I see them being drained by their executive suite employees.
The dividend yield is less than 2.0%.
“I don’t see corporations being enriched. I see them being drained by their executive suite employees.”
Excellent point and very true.
“I don’t see corporations being enriched. I see them being drained by their executive suite employees.”
“Excellent point and very true.”
And yet employees from just one tier below, stockholders, bondholders, and the many regulatory agencies that used to once be able to do something about that stand by helplessly?
Great point Carrie Ann
“95% of the electorate have the same habit. Vote for the Republicrat status quo, then wonder why nothing changes.”
Even at the local level it is difficult to get elected without party support. And most of the alternative candidates are completely unqualified to even understand the issues they will face.
I admire more the folks who run for office and attempt to deal with the issues than the gadflies, like Tim Eyman in Washington state, who simply want to “strangle the beast” without proposing where spending cuts should be made. I am certain that there is some “waste and abuse” in government, but I think it is much less than many believe. I believe there is as much or more waste and abuse in large corporations than there is in government.
So Sammy, why don’t you run for Congress? You seem intelligent enough to contribute to solutions.
“Surely there’s something at least a little positive out there.”
So much of the empire’s data is based on fraudulent accounting these days that I don’t even pay attention to it anymore.
“Wow there were some dreadful posts in Friday’s bits. Surely there’s something at least a little positive out there. ”
Of course there’s something at least a little positive out there. It’s just that you probably won’t hear about positive things here.
Here is something positive: it is a beautiful day in Tampa. A good day for burning 700 calories on card equipment, driving around New Tampa, eating a lunch of steamed fresh vegetables and raw vegetables, and a later dinner of foods I like!
Beautiful day to have zero debt and to feel healthy!
I agree even if I’m burning my cals in the snow! 10 minutes into the exercise, you’re still sweating! 23 Degreses or 74!
We’re in a holding pattern but I have a great family for enduring the tough times if we go that way, our health has never been better and our little network is bright enough to push through when push comes to shove. Yup, who was the hbber (I think it may have been hoz) that encouraged us to look beyond the noise!?!
Yes, I saw that too. It made me happy.
Here is the text from an e-mail I received a couple days ago (company name withheld):
Hi All,
We are still looking for a hardware writer for work onsite in San Diego. You must have XML experience, and a background in electronics is very helpful.
This is a full-time, contract position. Please direct interested parties our way. We will pay a finder’s fee.
IMO, that’s good news.
“You don’t celebrate surviving the heart attack when you have cancer.”
That’s about it.
http://www.nytimes.com/2011/01/15/business/energy-environment/15solar.html?_r=3&hp
Meanwhile, manufacturing continues to be offshored, even on such pet Administration priorities as solar energy.
The state of Massachusetts pours $43 million dollars into the company and China ends up with it.
Lol. We are a bunch of dummys.
More correctly stated: The Citizens of Massachusetts had their money taken from them by the State and given to a private company who then took the factory they paid for and sent it overseas to China, along with their jobs, adding to lost revenues to the State because there are no longer workers in the factory to tax.
Governments never pay for anything. They take money from their citizens.
+1
“The state of Massachusetts pours $43 million dollars into the company and China ends up with it.
Lol. We are a bunch of dummys.”
Now you get it! (not saying you didn’t. just a figure of speech)
So why are there no strings attached when a government entity invests funds like that?
There may very well be some payback clause.
The closing of the Evergreen factory has prompted finger-pointing in Massachusetts.
Ian A. Bowles, the former energy and environment chief for Gov. Deval L. Patrick, a Democrat who pushed for the solar panel factory to be located in Massachusetts, said the federal government had not helped the American industry enough or done enough to challenge Chinese government subsidies for its industry. Evergreen has received no federal money.
“The federal government has brought a knife to a gun fight,” Mr. Bowles said. “Its support is completely out of proportion to the support displayed by China — and even to that in Europe.”
He has amazing chutzpah!
After giving many millions of the publics money to a private company WITHOUT seeking adequate contractual obligations that they would even remain in his state, he then concludes that the real problem was… wait for it… not giving them ENOUGH public money!
Wow. Just wow.
“China’s real advantage lies in the ability of solar panel companies to form partnerships with local governments and then obtain loans at very low interest rates from state-owned banks…Banks in the United States were reluctant to provide the rest of the money even at double-digit interest rates, partly because of the financial crisis.”
They have money. And we don’t, because we blew it all. They have jobs, infrastructure, etc.
I thought the whole point of QE was to provide near-zero-interest loans to stimulate production. So why is it that the only “stimulation” going on is the encouragement of reckless speculation in the global casino markets, thanks to the Fed’s direct injects of POMO billions to the Banksters?
Oh, wait. We are stimulating production and jobs. In China.
Don’t forget the tax breaks for offshoring jobs the Repubs voted to keep back in Sept.
http://www.breakingviews.com/2011/01/13/fomc.aspx?sg=nytimes
Bernanke’s gift of near-zero-interest trillions for Wall Street to gamble with may finally face at least some resistance, probably futile, from so-called Fed “hawks” who at least back some increase in the artificially low lending rate.
The Fed seems perfectly content to screw the older generation by hammering the yield on fixed income investments (e.g. bank CDs) down to near zero without batting an eye, even while pretending to be “politically independent.” How does a policy designed to implicitly reallocate wealth from one group of constituents (senior citizen households) into the coffers of another (the banking sector) qualify as “independent?” It appears to my jaundiced eye that the banking sector has them in their back pocket.
PB …the talking head Wall-streeters also think wages should be cut ,
Social Security should be raped ,outsourcing should get tax breaks ,
health care costs should remain high and go higher (they defend the increases in Ins Monopoly fees ), tax breaks for the rich to trickle down jobs to foreign locations because they arent going to invest in America ,deregulation is good ,absurd leverage casino games are good ,mis-ratings on securities isn’t fraud ,trillions,yes trillions of bail outs to
Wall Street /Corporations is a proper use of public funds ,cut need programs ,screw pension contracts after the fact or offload it on
the taxpayer with fake re-structure of Co. ,20% unemployment rates are ok because all that counts is a high Stock Market to trade daily on .
its ok to obstruct Justice and transfer a Ponzi-scheme loss to the taxpayers by a number of forms of secret and open bail outs ,while
Main Street America is deprived of wealth and wages and jobs .And by all means the Wall Street talking heads want contracts violated
regarding pension obligations ,rather than due process that they are
the liability party ,but never ever mention not paying their bonuses
because of course that would be a violation of contract for the collection of their ill-gotten gain ,and it makes more sense to attack the masses of people that relied on their contracts ,and they can take
cuts and poverty and a elimination of the middle class ,because
the Wall Street gang can always look to emerging markets for doe
because the World is their Oyster and how dare anybody suggest
Justice or any other plan . We are the Winners ,We are the Winners ,
We are the Winners of the World …and don’t you forget it you needy people who need food .
In summary, anything which makes Wall Street richer by screwing somebody else is good for America.
You have problem with Corporate Communist Capitalism©®™, comrade?
No shit, PB!
Koons fights to keep retirement pay after extortion conviction
By Jennifer Sorentrue Palm Beach Post Staff Writer
Posted: 9:11 p.m. Friday, Jan. 14, 2011
Former Palm Beach County Commissioner Jeff Koons is fighting to keep his state retirement benefits five months after pleading guilty to extortion and resigning from office.
Koons has filed a petition with the state, protesting the forfeiture of his estimated $1,740 monthly retirement check, said Lauren Engel, a spokeswoman for the state’s Department of Management Services. The petition came after state officials notified the former commissioner that he would be forced to give up the retirement money as a result of his guilty plea.
Koons’ arrest marked the fourth time in four years that a Palm Beach County commissioner had faced corruption charges. Tony Masilotti, Warren Newell and Mary McCarty went to federal prison after admitting they obtained secret financial benefits through their votes on various projects.
http://www.palmbeachpost.com/news/koons-fights-to-keep-retirement-pay-after-extortion-1186546.html?cxtype=rss_news - -
And therein lies the “pension problem” at all levels of government.
$1760 a month, for the rest of his life, for 8 years of “service”.
What a deal!
If you read the article, another crook was also collection from a State pension for 17 years of “service”, while trying to collect another from the City.
I recently read, also, that in San Francisco, that 5 years of “service” entitled the employee to lifetime healthcare benefits. Amazing.
It’s no wonder the entire country is financially distressed. These benefits are ridiculous.
I work for the University of California. Retirement benefits are based on years of service. After 5 years, you are “vested” to a pension and are eligible for lifetime health benefits, but you would pay 80% of the premium. Each year, UC pays an additional 5% of the premium up to 100% at 20 years. After one is Medicare eligible at age 65, the university is on the hook for a much cheaper supplemental policy. I always thought it was a great benefit, but after having cancer I really appreciate it!
I’m back to work now.
Exactly Diogenes.
As I’ve been saying, it isn’t the rank and file that’s screwing us, it’s the good ol boys running the show.
Living in an area where greedy people got loans for and refied houses to $ amounts they could never pay back unless the insane house appreciation went “to infinity and beyond” and now cry, I am a victim! They need to read this, because this is a victim.
Widow, 85, missed last house payment; fights fees
By MARYCLAIRE DALE The Associated Press
Posted: 4:07 p.m. Friday, Jan. 14, 2011
PHILADELPHIA — An elderly New Jersey widow billed $5,800 after missing the final payment on her 30-year mortgage can pursue her lawsuit against the debt collectors, a U.S. appeals court ruled.
Lawyers for Dorothy Rhue Allen call the fees charged by two banks and a law firm “unfair or unconscionable” and say they violate state and federal consumer-protection laws.
Allen, now 85, had borrowed $40,000 to buy the Deptford, N.J., home in 1976. She failed to make the final $432 payment in 2006 because she was in the hospital, her lawyer said.
If the facts as stated in the article are true, is there any way she could sue the bank for pain and suffering, wrongful harassment, or just some general charge against them for being pr!cks?
It always irks me to see the phrase “reasonable attorney’s fees” in a document without the document quantifying what constitutes a reasonable attorney fee.
Here’s something for you all to scratch your heads about: what would be the consequences if reasonable attorney’s fees were universally defined as a multiple of the federal minimum wage?
Corporations could afford even more lawyers than the average person they are screwing?
Million Dollar Dream Homes
For the mega-rich they are just a few of the new amenities they can choose to put in their next million dollar dream home purchase.
But yesterdays luxuries, such as bowling alleys, massage rooms, hair salons, wrapping rooms, and master-suite kitchenettes, are making way for a plethora of high-tech goodies and conveniences.
Let’s face it: No one wants to remember they’ve left the oven on while private jetting half-way around the world. So, today’s luxury spec homes are being built with technology that allows them to sync their home appliances, lighting, mechanical systems, garage doors, and even televisions with iPads and cellphones.
http://finance.yahoo.com/real-estate/article/111828/million-dollar-dream-homes
LOL. So-called “smart” houses have been touted as the next big thing since at least the 1980’s. They have always failed to catch on.
I know, this time it’s different.
I know of a couple of engineers who made their homes that way. Rich people probably spend $50,000 to do what those engineers spent $1,000 on. They put their own labor into it, but learned more skills they could use for work perhaps.
It’s the same problem as with cars: any bells-and-whistles technology you build into it at the time of construction will be antiquated within a few years and laughably obsolete after a decade.
So some hacker can play with your utility bills. Great.
I see a new TV show: “Hack This House”
Hey all you Barry-Bots where oh where is the “change”?
« Wall Street Pay For 2010: A RECORD $144 Billion »
Wall Street says thanks for the bailout, suckers!
Pay on Wall Street is on pace to break a record high for a second consecutive year, according to a study conducted by The Wall Street Journal.
About three dozen of the top publicly held securities and investment-services firms—which include banks, investment banks, hedge funds, money-management firms and securities exchanges—are set to pay $144 billion in compensation and benefits this year, a 4% increase from the $139 billion paid out in 2009, according to the survey. Compensation was expected to rise at 26 of the 35 firms.
The data showed that revenue was expected to rise at 29 of the 35 firms surveyed, but at a slower pace than pay. Wall Street revenue is expected to rise 3%, to $448 billion from $433 billion, despite a slowdown in some high-profile activities like stock and bond trading.
There is a reason Goldman Sachs was Obama’s #2 contributor. They got their money’s worth.
Who came up with TARP again? Oh yeah… it was Bush/Paulson.
Nice try though.
Both parties have been GS’ *itch. Bush’ 3rd term continues.
Financial Sense has the author of “The Creature from Jekyll Island” -G. Edward Griffin, on his internet show this week. Interesting dialogue .
I’m not sure either party is Goldman’s *itch, wipeout.
In my mind’s eye, it’s more along the lines of co-conspirators.
CoSpgs4
Good constructive reply. I think you’re more on the mark. Thank you.
My *lite reading this weekend (*I need a break) is “How To Get Sued”, and “Potatoes, Not Prozac” (Sugar changes our chemistry and sugar sensitivity.)
I disagree
See where the money is.
Most politicians end up with cush lobbiest jobs or something like that but hardly the paychecks they hand out on Wall Street.
Both parties have been GS’ *itch. Bush’ 3rd term continues
Yup..
A CBS News analysis of the revolving door between Goldman and government reveals at least four dozen former employees, lobbyists or advisers at the highest reaches of power both in Washington and around the world.
http://www.cbsnews.com/8301-31727_162-20001981-10391695.html
And people still blame government.
HAHAHAHAHAHAHAHAHAHAHHAAA
People is be smart!
Shrub’s 3rd term continues.
Cheney-Shrub Legacy SHADOW Effect #3: “We left y’all with the worst POS economy in 80 years…see ya!”
(-8.2 million jobs)
DEMOCRATICALLY CONTROLLED CONGRESS.
Nice try yourself.
Different puppet, same hand.
wmbz,
Do you have any idea how immature you make yourself look by using such terms as “Barry Bots”? You are just trying to make ppl feel annoyed and upset, hardly the best way to launch an important political conversation.
Big V:
At the same time, why are you decidely selective in those that you scold?
I have no problem with scolding; at times it’s a necessity. But be an equal opportunist, please. Going after only those who do not share your political view does not improve the situation.
Thanks.
HOAs fight back against homeowner behind on fees
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 8:58 p.m. Friday, Jan. 14, 2011
Throughout South Florida, where homeowner associations reign over the fading fortunes of gated communities and condominiums, governing boards are using more aggressive - some say guerrilla - tactics to collect late fees.
Emboldened by a new law that allows boards to ban non-paying homeowners from community common areas, associations also are restricting residents’ access to their homes by disabling devices that allow automatic entry into neighborhoods.
As foreclosures swelled with the real estate collapse, associations begged lawmakers last year for more muscle to recover delinquent homeowner dues, which typically go hand-in-hand with missed mortgage payments.
They complain banks are slow to foreclose on properties with bulging association fees because they must pay the bills after repossession. The result: homes wallowing in years of association debt.
The argument behind the law is that the owners who are not paying for the maintenance of facilities, such as pools, clubhouses and tennis courts, should not get to use them.
But a wider interpretation is also forcing some debtors to wait in the visitors’ line at entrance gates. In condominiums where key fobs are used to gain entrance, homeowners with association debt sneak in behind other residents or head to the security desk for permission to enter.
Residents say blocking access to their homes is just bullying, and in conflict with other language in the law.
Attorneys who represent associations say it’s one of the most effective ways to collect late fees - along with turning off cable TV.
“We are beyond the days when you tar and feather people, and I don’t think we can put a scarlet letter on someone,” said attorney Gary Poliakoff, whose Fort Lauderdale-based firm represents associations. “These are some harsh measures, but they are causing the owner to reflect on the fact that they are forcing others to pick up the burden of maintaining the community.”
I think condo HOA fee deadbeats should be forced to wear a scarlet “D”.
From the article
One association attorney said she has heard of the formation of “citizen brigades” to enforce the new law, and even the removal of mailbox doors to persuade residents to pay.
“I told them they couldn’t do that,” said Donna Berger, managing partner at Katzman, Garfinkel and Berger in Fort Lauderdale and executive director of the Community Advocacy Network. “Tempers are high.”
Daniel Cianciotto, a resident of the 500-home Canyon Lakes community in suburban Boynton Beach, argued that portion of the law last month when his association moved to deactivate his transponder.
In foreclosure and with a $17,000 debt to the homeowner association, including late fees and attorney fees, Cianciotto said a grievance committee sided with him against the board.
“I was angry as can be and felt violated,” Cianciotto said. “Why do I have to wait to get to my house? That’s my house. Nobody should get in the way of me getting there.”
One request is for stronger language allowing the suspension of cable TV .
“You would be surprised how compelling it is when HBO and Showtime may be turned off,” Berger said. “They seem to find the money then.”
Sorry Daniel, not your house. Time to vacate the premises.
Promenade condo offers loans to jump-start sales
By Alexandra Clough Palm Beach Post Staff Writer
Posted: 8:48 p.m. Friday, Jan. 14, 2011
The Promenade condominium in downtown Boynton Beach is gearing up for an all-out sales push during the next several months.
The project’s equity partner and construction lender are pouring money into a big ad blitz this season. In addition, they have created a special fund to loan mortgages to people wanting to buy condos.
The immediate goal: Write enough sales contracts to earn coveted approval by Fannie Mae, the government-sponsored enterprise that backs most of the home loans made in the U.S.
The water view Promenade on Federal Highway at Boynton Beach Boulevard commenced during the boom, but it was among the last condos to go online in Palm Beach County when it finally threw open its doors last year. Its twin towers stand alone, and nearly vacant, in an area once slated for redevelopment. The Promenade has 318 condo residences and 77 hotel-condo units.
Despite the lingering real estate recession, the project’s developer and lender remain committed to selling the place out, and they have rebuffed numerous bulk sale inquiries.
Prices at the Promenade have been cut 40 percent, with some units selling in the mid-$200,000s, and some lower than that. Since units began selling in May, about 40 sales have closed in the north tower.
Fannie Mae last year gave conditional approval to the property, saying it would buy mortgages once 51 percent of one tower was pre-sold. But then Fannie Mae wanted assurance that buyers would really close, and required that Promenade buyers re-sign contracts, said Pryse Elam, regional director of New Boston Fund, the equity partner in the project’s development company, Boynton Waterways Investment Associates.
Amy Bonitatibus, a Fannie Mae spokeswoman, acknowledged that Fannie Mae did seek extra assurance that pre-construction buyers would close. That’s because some of the Promenade’s contracts dated to 2005 and 2006, the height of the boom, she said.
Elam said some of those buyers did re-sign. But the requirement put the property in a Catch-22: Without the Fannie Mae approval, new buyers were harder to attract, but without buyers, the Fannie Mae approval could not be attained.
http://www.theglobeandmail.com/report-on-business/economy/currencies/hot-money-heating-up-trade-tensions/article1871335/
The Fed’s gift of trillions of dollars in free QE gambling chips to their favored TBTF banksters is fueling speculative hot money flows that are fueling trade wars, as well as instability as food costs soar for the bottom 80% of global populations, i.e. The Expendables.
http://blog.mises.org/14513/what-qe2-means-to-you/
For the dupes who voted for hope ‘n change or “McSame” in 2008, and have since come to the belated realization that the Republicrat Kabuki theater is a road to ruin, I’m developing a 12-step “Recovering Republicrat” program to help your transition to informed and aware citizen.
We’ll start with Step 1: “What QE II means to you, or why the Fed’s uncontrolled money printing didn’t work in the Weimar Republic or Zimbabwe, and will only make things much worse in the long run:
http://blog.mises.org/14513/what-qe2-means-to-you/
Well, as long as the “newly created electronic money” is only “a bad deal for consumers, retirees and savers”.
This promises to be interesting to watch it play out. Got popcorn?
UPDATE 1-Investors bet against Whitney’s dire view on munis
Fri Jan 14, 2011 4:16pm EST
By Walter Brandimarte and Al Yoon
NEW YORK, Jan 14 (Reuters) - Top U.S. investors are challenging the bleak forecast for the municipal bond market by Wall Street analyst Meredith Whitney and are selectively buying high-quality bonds with robust return rates.
Whitney, who made her reputation by predicting in October 2007 that Citigroup would need a massive capital infusion, warned investors this week that as many as 100 U.S. cities and other municipal issuers would default on their debt this year.
Her comments contributed to a sharp sell-off that drove prices down and pushed yields on top-quality 30-year muni bonds up to more than 5.0 percent on Friday — near two-year highs. The muni market has been steadily declining since November on a combination of factors, including an oversupply of bonds.
“Meredith Whitney’s well publicized doomsday scenario clearly frightened a lot of people. It now has become cocktail party chatter. I think that she is greatly exaggerating the magnitude of the risk,” billionaire investor Wilbur Ross told Reuters in an interview by e-mail.
…
Uh oh. This should be good.
10610 NE 9th Pl UNIT 702 Bellevue, WA 98004
Date Description Price % Chg $/sqft Source
12/30/2010 Sold $470,000 -6.00% $415 Public Record
9/1/2010 Listing removed * $499,950 – $441 Skyline Properties, Inc. - Everett
8/17/2010 Price change * $499,950 -2.90% $441 Skyline Properties, Inc. - Everett
8/5/2010 Price change * $515,000 -6.40% $454 Skyline Properties, Inc. - Everett
7/20/2010 Price change * $549,950 -8.30% $485 Skyline Properties, Inc. - Everett
6/6/2010 Listed for sale * $599,950 -19.90% $529 Skyline Properties, Inc. - Everett
3/28/2008 Sold $749,000 – $661 Public Record
What does “Public Record” next to the most recent sale mean?
Looks like “Public Record” is under the “Source” column—they pulled this from the county’s public records.
The rest of the data is pulled from the MLS.
So far, Meridith Whitney is winning her bet. The big question may prove to be whether the muni bond market is TBTF. It is too early to say just yet, but a test may be in progress as I type.
One thing seems certain: City and state governments are due for an uncomfortable choice between budget austerity measures designed to placate investors and the need to pay much higher interest rates on new debt due to the perceived risk of bond default. Ongoing housing price declines suggest that residential property taxes do not offer much hope of filling the financial void.
Muni bond prices drop for 5th day on government woes
By Michael Connor
MIAMI | Fri Jan 14, 2011 5:05pm EST
MIAMI (Reuters) - U.S. municipal bond prices fell for a fifth straight day on Friday as individual investors worried about shaky government finances pulled money from the tax-free market.
Richmond Federal Reserve President Jeffrey Lacker spoke to those worries on Friday, saying the potential for insolvency among some municipalities was worrisome and that the $2.8 trillion muni market’s problems could have broad implications.
“I think there’s some potential for broader distress there,” he said in response to a question at an event.
Lacker did not elaborate.
For the third time in as many months, munis are caught up in a sell-off that has sharply increased tax-free interest rates and lifted borrowing costs for local governments considering issuing new bonds.
“The psychology has certainly turned negative to say the least,” said Brian Musielak, senior portfolio manager on the Commerce Bank National Tax-Free Intermediate Fund.
Prices of AAA-rated munis slipped enough in light Friday trading to lift yields by as many as 10 basis points, according to Municipal Market Data. Price were off the most in intermediate maturities, MMD said.
The day’s declines took yields on AAA-rated, 30-year munis up 7 basis points to 5.08 percent — a level last seen on January 26, 2009 — and spurred comparisons between the yields on some munis issuers and sovereign credits such as Mexico and Colombia.
A California bond with a 6 percent coupon and due November 2039 traded to yield 6.05 percent on Friday, compared with a Mexico bond due in January 2040 and carrying a 6.05 percent coupon quoted at a price yielding 5.75/5.71 percent, according to Evan Rourke, portfolio manager at Eaton Vance Management in New York.
The 10-year muni yield rose 10 basis points to 3.46 percent, the highest since March 17, 2009, when yields hit 3.45 percent, according to MMD.
…
“City and state governments are due for an uncomfortable choice…”
To default, or not to default: that is the question:
Whether ’tis nobler in the mind to suffer
The slings and arrows of outrageous credit ratings,
Or to take arms against a sea of deficits,
And by austerity measures oppose them?
“Her comments contributed to a sharp sell-off that drove prices down and pushed yields on top-quality 30-year muni bonds up to more than 5.0 percent on Friday — near two-year highs.”
She’s not making friends with her version of reality.
When pigs wearing lipstick masquerade as beauty queens, shouldn’t somebody point it out?
The SEC is ramping up a probe into troubled muni bonds. Sources are telling the FOX Business Network they are looking at disclosures made in the bond documents, they are known on Wall Street as prospectuses. What they are looking at whether municipalities, cities and states, are adequately disclosing their budget woes to investors who buy these bonds. More than any other investment, muni bonds are held by retail investors; average people looking to cash in on the triple tax free status. That’s why the SEC is concerned.”
The SEC will probably be a lot more energetic about looking into fraud in West Rectum, Alabama, than they would be among the TBTF banker set with whom they share “business lunches” and hobnob with, and who they know will be employing them at some future point, provided they play “go along to get along.” And now when the next mega-fraud bubbles up on Wall Street, the SEC can whine that all of its investigative resources were tied up on penny-ante pikers in the heartland, instead of on the mega-thieves.
As the fiscal situation in the flyover states worsens, and the Republicrats start kiting suggestions like shedding pension fund obligations to public employees (which GOP stalking horse Newt Gringrich has already suggested), then it will become clear to even the most willfully blind Republicrat voter (i.e. clueless morons) that the Fed’s sole purpose in life is to enrich its TBTF patrons. At that point we are going to see a long-overdue shedding of delusions.
I suggest Newt Gingrich should set an example of falling on his sword by being the first to shed his public employee pension.
All animals are equal, but some are more equal than others.
True dat. For a related example, is Congress subject to the two-year wage freeze on federal worker pay? I doubt it…
But there is a Constitutional Amendment restricting Congressional pay raises: the 27th Amd. Congressional pay raises can only take effect after the NEXT election.
I suggest Newt Gingrich should set an example of falling on his sword by being the first to shed his public employee pension.
I’m suprprised that he hasn’t actually done that already. He probably makes so much money shilling for his corporate masters that giving up the federal pension that he is entitled to for 20 years of service in the House would probably be insignificant to him.
If he decides to enter the presidential primaries next year, that would be a great way to kick off his campaign. Announce that he won’t be taking his federal pension and then schedule appearances on all of the Fox shows whose hosts would spend the entire show telling him wonderful he is. The Tea Party morons out there in Fox land would just eat it up.
I don’t know……
I’m at Ground Zero of Red-State-Flyover Land, and everyone is blaming all the problems on the Democrats, because they have impeded the Republican/Bankster/Free Market/Any-regulation-is-bad-regulation Master Plan. These people will be living in sod huts before they admit that they might be wrong.
Reconsidering your position puts you in the position of admitting that your original position/viewpoint was incorrect. And we all know a lot of people who would rather die, than admit they are wrong.
So when it comes down to admitting fault, or throwing a bunch no-name people under the bus, they’ll always choose the bus.
You’re wrong.
Most people would rather YOU die than admit you were right.
True……I stand corrected :).
I’m at Ground Zero of Red-State-Flyover Land, and everyone is blaming all the problems on the Democrats, because they have impeded the Republican/Bankster/Free Market/Any-regulation-is-bad-regulation Master Plan.
In your Red-State Land in which I came of age, I would work on a short presentation something like:
1. Tell them that “capitalism” HAS worked fantastic under the Republicans and Democrats alike IF the sole criteria is creating wealth. Point out that the super-rich have NEVER been richer therefore was not great wealth created? If the Democrats are responsible for the “hindering” of capitalism then why are the rich now richer than ever? hmmmmmmm
2. Then ask them if the Democrats “hindered” capitalism then why did all of our jobs go overseas? Does this benefit Democrats, the poor or just the very very few super rich? Ask them if the Democrats would have kept most of our jobs here, would the middle-class be better off?
3. Then scratch your head and ponder aloud that maybe US “capitalism” HAS worked out great for the very few- the super-rich. And as an ex-Republican you might then express your suspicion that the Republicans are now just working for the super-rich and are not as patriotic as they try to appear.
4. Then wonder aloud if even the “capitalists” are not capitalists anymore. I mean why did the Banks need to be bailed out? That’s not capitalism. Maybe the big shots only act like capitalists until they need a bail-out.
I predict: MORE GREAT HAIRCUTS IN 2011!
JPMorgan’s CEO Dimon Says More U.S. Municipalities May File for Bankruptcy
By Christopher Palmeri and Andrew Frye - Jan 11, 2011 9:00 PM PT
Jan. 12 (Bloomberg) — Matt Fabian, managing director of Municipal Market Advisors, talks about the outlook for the U.S. municipal bond market. He speaks with Betty Liu on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said he expects more U.S. municipalities to declare bankruptcy and urged caution when investing in the $2.9 trillion public-debt market.
“There have been six or seven municipal bankruptcies already,” Dimon, 54, said yesterday at his company’s annual health-care conference in San Francisco. “I think unfortunately you will see more.”
…
The Foreclosure Dump
Published: Thursday, 13 Jan 2011 | 1:24 PM ET
By: Diana Olick
CNBC Real Estate Reporter
“As the numbers mount, the GSE’s and the banks will have to put more resources into unloading these properties, especially as new Spring organic housing supply comes on the market. If they choose to slash prices even more, the dip in overall home prices may fall deeper than expected.”
http://www.cnbc.com/id/41059824 - 133k -
The choice seems utterly simple to me: Either lower the price and sell it soon, or hang on to your falling knife housing investment all the way on the ride down to the floor.
It’s best said this way; Todays price is your best price. (for many years to come)
This article/blog post also describes hedge funds working with banks to buy bulk foreclosures. NM letting the free market set the price, rather separate the wheat from the chaff so WS insiders can fleece us yet agan and us j6p buyers can dig around in the chaff bin hoping to find an errant kernel. Seems to be a bit of this investor “rehab”activity in my area, properties being sold for $270k,granitized,and then relisted for $380k.
“This article/blog post also describes hedge funds working with banks to buy bulk foreclosures.”
If enough monopoly-sized hedge funds can squeeze the purchase market enough by keeping enough homes off the market, I suppose they may be able to artificially slow the rate at which the housing market price knife falls to the bottom.
P.S. Try not to catch yerself a granitized falling knife!
I’m not sure the hedge funds have enough money to buy every piece of distressed residential property in the USA. Especially if there is not a 20% rate of return.
Everyone on this blog is going to have the opportunity to buy a bargain house in the next few years. In fact, you are probably going to see FREE HOUSES in some locations, by governments and local businesses trying to maintain a tax/customer base.
The big question is whether you can afford to get into a house, and find stable employment that pays enough to afford keeping the lights on
How much is a McMansion 200 miles out in the middle of nowhere worth?
In the aftermath the S&L disaster, this was exactly the case.
We bought our first home in the aftermath of the S&L disaster, and there was NO shortage of homes on the market like there is currently.
But it’s still early yet. Foreclosures keep stacking up around here. Some have sat empty for three years now. The local slumlords are buying as many cheap houses as they can buy; no sense in buying houses that rent out for $1500/month, because no one can afford that kind of rent. Only works if you can rent it out for $500-800/month.
And several towns out in BFE, Kansas and Nebraska have been subsidizing/giving away houses, if the new owners agree to stay in place for 5-6 years.
The sad truth of the matter is, the economy in most of Flyover is closer to Third World status than to California/DC/NE corridor status. The run up in commodity prices isn’t helping much here.
Dollar wise, a single house in San Diego is worth about 3x houses here. Obviously, the PTB have an incentive to clean up the mess in California first. Mainly because the problems there are an order of magnitude bigger. Or they are thinking “Take care of the big problems, and the small ones will tend to fix themselves”
Saw a stat today that there were 55,000 plus foreclosures in Riverside County, CA in 2010. Compared to 15,000 plus in the whole state of Louisiana.
PB, there was at first and like X-GS says, it also depends on the price range.
In my city, there’s no shortage at all. There’s a house for every price range.
And also like X-GS just pointed out, the lower end market is churning away… and has been doing so throughout this whole time.
The thing is, the lower end market was destroyed in the hot spots, so those of you living in those areas aren’t experiencing any churn of low end because low end now means 200K plus and not 100K, which is what people can really afford.
Gee you think?
“Investors in U.S. companies taken over between 1999 and 2007 “typically” lost $249 million on each transaction where chief executives had “overly generous” severance pay in place, according to a study published today.
Larger so-called golden parachutes encouraged some executives to compromise the interests of shareholders in mergers and acquisitions, the study found. Professor Eliezer Rich and Professor Ralph Walking, from the LeBow College of Business at Drexel University in Philadelphia, and Dr Anh Tranh, a lecturer Cass Business School in London, looked at 850 deals announced during the period.
“Our results show that as CEOs become more insulated from personal losses due to relatively larger parachutes, shareholders obtain less favorable acquisition terms,” Tranh said in an e-mailed statement. “This suggests that overly important parachutes encourage some self-serving CEOs to sacrifice premium for personal gain.”.
I don’t give a rat’s aZZ about the shareholders, how about protecting the real workers.
Another thing the SEC will never do anything about (hey, it ain’t their money), makes me want to scream….
So what else is new?
I still can’t believe that people think shareholders still have power or privileges. The only shareholders that count, sit on the boards.
Note that Buffett was already prognosticating muni bond doom last June. And he noted back then that the key question is that of how the federal government (or perhaps the Fed?) will act. If it turns out that muni debt is TBTF, those who bought it will win big time. The recent spike in muni bond interest rates suggest the issue is presently coming to a head.
Buffett Says He Expects `Terrible Problem’ for Municipal Debt
By Andrew Frye and William Selway - Jun 2, 2010 12:49 PM PT
Warren Buffett, whose Berkshire Hathaway Inc. has been trimming its investment in municipal debt, predicted a “terrible problem” for the bonds in coming years.
“There will be a terrible problem and then the question becomes will the federal government help,” Buffett, 79, said today at a hearing of the U.S. Financial Crisis Inquiry Commission in New York. “I don’t know how I would rate them myself. It’s a bet on how the federal government will act over time.”
…
“…Berkshire Hathaway Inc. has been trimming its investment in municipal debt…”
So who is buying it, J6P?
That’s my question ,who bought this high risk stuff that is dependent on Government bail-outs or refinancing at a higher rate much like the sub-prime buyer was dependent on refinances to keep the illusion going .
J6P cannot profitably purchase muni debt, as it only pencils out for those in the highest tax brackets. (As if those who live paycheck-to-paycheck had any money to invest, anyway!…)
Municipal Debt …or a really big American train set…decisions, decisions.
“SPJ board votes to shelve Helen Thomas award”
The board of directors of the Society of Professional Journalists has voted to retire a lifetime achievement award named for longtime journalist Helen Thomas, who has made a series of controversial statements in recent months.
The board of the Indianapolis-based national journalism group made the decision on Friday.
The Detroit News says the SPJ’s move follows one by Wayne State University to shelve the Helen Thomas Spirit of Diversity in the Media Award over similar concerns.
The 90-year-old Thomas grew up in Detroit and retired as a columnist for Hearst Newspapers last year after telling an interviewer that Israelis should get out of the Palestinian territories and go to Germany, Poland or the U.S.
She told a crowd in Dearborn in December that “Zionists” control Congress, Wall Street and Hollywood.
“SPJ board votes to shelve Helen Thomas award”
The board of directors of the Society of Professional Journalists has voted to retire a lifetime achievement award named for longtime journalist Helen Thomas, who has made a series of controversial statements in recent months.
She told a crowd in Dearborn in December that “Z!onists” control Congress, Wall Street and Hollywood.
Helen Thomas is 100% correct but didn’t go far enough. There’d be peace in mid-east and many of our domestic problems would be properly funded without the zionist warpig axis of evil in control.
Israel has turned into the punk-azz scrawny little brother, who runs his mouth and starts fights, then expects body-building, pro-boxer Big Brother to back him up when he looks like he going to get his azz kicked.
Israel believes they have same TBTF status as Goldman Sachs, and Uncle Sam is their bi#ch; IMO, that policy needs to be reexamined.
I side with Israel on this. The main reason is that the party they are negotiating with has never even admitted that Israel has the right to exist. There have been no good-faith negotiations to date. It’s all jive.
Even with all the BS Israel has done, until the Palestinians come to the table in good faith, then why bother with the charade.
….. and the Israeli govt has never admitted the palestinians have a right to exist. Just a note…. There are Jewish human rights organizations doing very good work in helping palestinians passively resist the heavy hand of the Israeli govt.
Rio, I encourage you to take a closer look at what you’re saying.
Well she was right, imaging questioning Israels right to exist, or the settlements on the west bank…or return land back to the Palestinians…or why should we be propping up their economy…..
Sometimes diversity just wont work, and separatism is the right answer
Maybe they can just go back to Egypt and be slaves again…
Leave it our theology distorting $hithouse reverend to toss another strawman.
I’m surprised she’s still being ostracized, so this 90-yr old must still have an audience somewhere out there.
Megabank, Inc’s evil plan:
Bork AAA-rated widows-and-orphans investment classes into subprime status, then profit through gambling on whether the debauched asset classes are too-big-to-fail. Professor Bear’s prediction: Since mainly the rich invest in muni bonds, there is a high probability this asset class will ultimately prove to be too-big-to-fail.
* WEEKEND INVESTOR
* JANUARY 15, 2011
Munis: What to Do Now
By BEN LEVISOHN, JANE J. KIM And ELEANOR LAISE
The prices of municipal bonds are plunging to depths last seen during the financial crisis. At least one high-profile analyst is predicting widespread defaults. And a big asset manager is putting its expansion into munis on hold. Is the situation in muni-land really as dire as all that?
In a word, no. And investors who can see past all the hand-wringing and remain disciplined may even find opportunities to profit.
It has been hard to ignore all the bad news in the market of late. State budget deficits are expected to increase from $120 billion in fiscal 2011 to $140 billion in 2012, thanks in part to underfunded pensions and growing health-care costs. Investors, meanwhile, are bailing: Muni bonds have lost 5.3% since Nov. 10, while muni funds have seen outflows of $22.7 billion. Vanguard Group on Jan. 13 shelved a plan to launch three muni funds, while J.P. Morgan Chase & Co. CEO James Dimon this week warned that investors should be careful.
In the course of just a few years, muni bonds have joined a list of investments, from housing to money-market mutual funds and auction-rate securities, that have lost their safe-haven status.
“Historically, people have gone to the muni market because they believe they’re the safest things out there,” says Burt Hutchinson, a financial adviser in Wilmington, Del., who has been recommending that clients sell their muni bonds. “Today people are realizing maybe they aren’t as safe as we think they are.”
And yet the situation may not be as grim as some suggest.
Municipal bonds are issued by states, counties, cities or their agencies to finance public works, such as roads and bridges, housing projects, airports and hospitals. For years, individual investors, especially those in the highest tax brackets, have liked munis because the interest payments are generally exempt from federal and, in some cases, state income taxes.
In the past few years the fiscal outlooks for many states and cities have worsened, as governments struggle to balance their budgets and pay for essential services.
But that may be starting to turn around as some governments take action—sometimes extreme—to plug budget gaps. In California, Gov. Jerry Brown on Jan. 12 announced $12.5 billion in spending cuts. That same day, Illinois raised its state income-tax rate to 5% from 3% to help plug an estimated $13 billion budget shortfall.
“We’ve never defaulted, not once in our entire history, including during the Great Depression,” says Tom Dresslar, spokesman for California Treasurer Bill Lockyer. He says paying debt service for the state’s bonds is the Treasurer’s second-highest priority, after schools.
Revenues for U.S. municipalities as a group rose during the first three quarters of 2010, and the trend is likely to continue, say economists, as the U.S. economy slowly recovers from the recent recession. Even strategist Meredith Whitney, who is among the most outspoken muni-market bears, predicts that not a single state will default on its debt.
That doesn’t mean investors are in the clear. Far from it. With budget season just beginning, investors should be ready for more bad fiscal news to hit the headlines for the next several months, as states try to plug those massive holes. That, says Chris Mauro, director of municipal bond research at RBC Capital Markets, could keep the market churning until midyear or longer.
“We advise people to remain mindful of this,” Mr. Mauro says.
…
…
By the Numbers
- $350 billion Total issuance of municipal bonds expected in 2011, down from $430 billion in 2010.
- 3.12% The yield on a 10-year top-rated municipal bond, versus 3.36% on an equivalent Treasury note.
- $22.7 billion The amount of money withdrawn from municipal-bond funds since Nov. 10—about two-thirds of the $34.5 billion that had been invested since Jan. 1, 2010.
- $ 2.9 trillion The total dollar amount of outstanding municipal bonds, up from $1.5 trillion in 2000.
Sources: Municipal Market Advisors; Investment Company Institute; ValuBond
“Hurry, It won`t last” Listing of the day
BANK APPROVED AT $230K. THE WAIT IS OVER.THIS IS A DOLLHOUSE FULL OF CHARACTER
10360 Se Jupiter Narrows Dr Hobe Sound, FL 33455
$230,000 Price Reduced
3 Bed 2 Bath 2,418 Sq Ft
•Status: Active
Days on site 445 days
Here is next week`s
“Hurry, it won`t last” Listing of the day.
And since it is a week early, I am throwing in some bonus coverage by giving you the name of the listing agent.
Presented by
Tweedle, Richard B
Home: (561) 371-4609
Office: (561) 746-0008
Fax: (561) 747-5086
I guess his friends call him Dick Tweedle.
111 E Colony Wy Jupiter, FL 33458
$235,000Price Reduced
3 Bed 2 Bath 2,471 Sq Ft
Days on site 478 days
“I guess his friends call him Dick Tweedle.”
The more I think about it, I`ll bet his close friends call him Tweedle Dick.
In fact I think I will give him a call and say…..
Hello is this Tweedle Dick? I am calling because I am interested in a listing you have had for over a f@ck%ng year now. I would like to see the house but I will have to bring a lawyer with me because my friend exeter says all Realtors are liars and scum. So when do you think we could set this up?
You have some great comp prices developing in FL. Pretty soon home prices may actually be once again based off what they are worth to end users, rather than on an infusion of crazy loans from the Wall Street mortgage securitization sump pump operation.
Yeah, PB.
It is RIGHT NOW that some good deals actually exist. They are not in well-known places, but I’m tellin’ ya, it’s no coincidence that the good deals are in place right at the very moment when even the mass media are terrified all things real estate.
My dad’s financial planner is advising him to load up on U.S. bonds, even as Pimco is offloading them. Something smells funny about this.
* MARKETS
* JANUARY 15, 2011
Pimco’s Bond Fund Pares U.S. Holdings
BY MIN ZENG
NEW YORK—Pacific Investment Management Co. cut the U.S. government-related holdings in its flagship bond fund in December to the lowest level in nearly two years.
Holdings of Treasurys, Treasury Inflation-Protected Securities, agencies’ bonds, and Treasury futures and options for the Pimco Total Return Fund fell to 22% in December, the lowest level since 15% in February 2009, from 30% in November, according to data on the company’s website Friday.
…
‘Robo-Signing’ and Mortgage Mess Isn’t Going Away
Jan. 14, 2011
“Robo-signing” is a paperwork issue and also a problem that indicates the larger difficulties for banks and the mortgage industry, according to Matthew Cohn of consulting firm Capco, who says we’ll still be working through this problem two or three years out. Alistair Barr reports.
* REVIEW & OUTLOOK
* JANUARY 15, 2011
Detroit and Decay
The city may abandon half its schools to pay union benefits.
Detroit was once America’s fourth largest city, though today large sections of its inner core are abandoned to the elements, and monuments like Michigan Central Station are returning to dust. Another emblem of civic decline is a plan to desert nearly half of Detroit’s public schools so that it can afford to fulfill its teachers union contract.
The school district is facing a $327 million deficit and has already closed 59 schools over the last two years to avoid paying maintenance, utility and operating costs. Under a worst-case scenario released this week by Robert Bobb, an emergency financial manager appointed by the state to resolve the Detroit education fisc, the district will close another 70 of its remaining 142 schools to save $31.3 million through 2013.
“Additional savings of approximately $12.4 million can be achieved from school closures if the District simply abandons the closed buildings,” the proposal explains, purging costs like boarding up buildings, storage and security patrols.
…
The budget gap is party due to the property tax revenue collapse as the Motor City crumbles, as well as financial mismanagement and a surge in pay and benefits for public employees. The Mackinac Center, a state think tank, reports that average Michigan teacher salaries outpaced those of all other states from 2003 to 2009, when adjusted for state per capita income as a proxy for the local ability to pay.
It’s hard to think of a sadder commentary on a government so fiscally desperate and so captured by its workers that it may be forced to abandon property to thieves. But are they the scavengers or the union?
…
Perhaps the dramatic shrinking of student enrollment in Detroit over the last decade or may have something to do with the school closings.
Dang those pesky facts.
Don’t you know it’s the damn commie unions fault!
(seriously, you also left out a VERY corrupt city government)
Afghan girl raped, killed by US troops
Webmaster’s Commentary:
The daughter of an Afghan politician has reportedly died of her injuries after being raped by American soldiers stationed in Afghanistan’s southwestern province of Farah.
Like banking, warfare is one of those human activities which takes place above any rule of law.
Afghan girl raped, killed by US troops
Thu Jan 13, 2011 5:59PM
The daughter of an Afghan politician has reportedly died of her injuries after being raped by American soldiers stationed in Afghanistan’s southwestern province of Farah.
…
And people, to my amazement, wonder why we are so universally despised?
And if this story is true the soldiers involved should pay the ultimate price.
You are all assuming this story to be true.
A lot of this doesn’t pass the common sense test…..and the story comes from the Taliban, thru Iran.
We must be winning, this story sure looks a lot like desperate Taliban propaganda to me, trying to “get the base fired up”.
Let’s be honest……..our guys have enough opportunity to get laid, without the risks of raping Afghan skanks.
Yeah, I would like to wait a few days before giving judgement and allow the hysteria to clear. Something that certain people should have done concerning a particular news event a week ago.
“You are all assuming this story to be true.”
And you are assuming you can read others’ minds.
I was referring to lint and SV Guy’s comments,
lint’s postings make it obvious where his opinions lie, re: the US military.
Saying something like “….wondering why we are so universally despised” infers that SV Guy believes the story too.
I’m not saying it’s not possible. I’m saying that the facts, as reported in the link, and knowing a bunch of younger and older people that have been “in country”, makes the story very improbable, IMO.
It seems like a good time to restart the conversations on establishing an international rule of law, in order to prevent the banksters from figuratively raping us and the rapists from literally doing so.
War’s overlooked victims
Rape is horrifyingly widespread in conflicts all around the world
Violence against women
Jan 13th 2011 | GOMA | from PRINT EDITION
…
I’m going to have a real estate challenge this year, helping to find a house for a young man who is wheelchair bound. He’d like a house that is very accessible so he can be independent. I’ve been looking at places, considering things like how wide the doorways are, the height of the step from the garage to the inside, the steepness of the driveway, etc. Today we’ll go see a house together for the first time - it will be fun to see if I missed things. I’m hoping to get him something for $100/sq ft - should be fun.
BTW, he has a very good job. Disability does not equal disabled!
Stephen Hawkins and Itzhak Perlman definitely prove your point.
Don’t forget FDR.
Yeah, but he worked for the government, sucking off the teats of private enterprise, while transforming the US into the United States of Socialist America.
Damn freeloader.
http://news.yahoo.com/s/ap/20110115/ap_on_re_us/us_debt_wars
US debt passes $14 trillion, Congress weighs caps
Remarkably, nearly half of today’s national debt was run up in just the past six years. It soared from $7.6 trillion in January 2005 as President George W. Bush began his second term to $10.6 trillion the day Obama was inaugurated and to $14.02 trillion now. The period has seen two major wars and the deepest economic downturn since the 1930s.
With a $1.7 trillion deficit in budget year 2010 alone, and the government on track to spend $1.3 trillion more this year than it takes in, annual budget deficits are adding roughly $4 billion a day to the national debt. Put another way, the government is borrowing 41 cents for every dollar it spends.
In a letter to Congress, Geithner said the current statutory debt ceiling of $14.3 trillion, set just last year, may be reached by the end of March — and hit no later than May 16. He warned that holding it hostage to skirmishes over spending could lead the country to default on its obligations, “an event that has no precedent in American history.”
Debt-level brinkmanship doesn’t wear a party label.
Here’s what then-Sen. Barack Obama said on the Senate floor in 2006: “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance the government’s reckless fiscal policies.”
It was a blast by the freshman lawmaker against a Bush request to raise the debt limit to $8.96 trillion.
Looking on the bright side of things, as I always try to do, the illusion that the Fed’s printing press technology can endlessly make up for fiscal profligacy seems to be fading away quickly.
PB, if that were true, the yield of the 10-year Treasury would be a LOT higher than 3.33% right now.
The illusion seems to be holding, from what I can tell.
“…the yield of the 10-year Treasury would be a LOT higher than 3.33% right now.”
Even with the Fed using QE-funded bond purchases to attenuate long-term T-bond yields?
“Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership.”
That quote is from Senator Barack Obama, in 2006, as he voted AGAINST raising the government’s debt ceiling.
Then-Senator Obama was right then, and as Congress approaches yet another debt ceiling “crisis”, those words are even more fitting today than they were four years ago.
What a difference four years make. Consider what has happened since that time:
March 2006: By a count of 52-48, the Senate votes to raise the debt ceiling by $2.8 trillion.
September 2007: The Senate votes 53-42 to increase the debt ceiling by an additional $850 billion.
July 2008: The misnamed “Housing and Economic Recovery Act” passes the Senate 72-13, raising the debt ceiling by another $800 billion.
October 2008: The Senate passes TARP 74-25, enabling bailouts and adding $700 billion more to the debt ceiling.
February 2009: The monstrous “stimulus package” passes 60-38, increasing the debt ceiling by an additional $789 billion.
February 2010: The debt ceiling is raised yet again, this time to a whopping $14 trillion.
Insanity is doing the same thing over and over and expecting different results. For decades, Congress has been routinely increasing the nation’s credit limit — saying each time that the sky will fall if they don’t.
Default…Threatening the full faith and credit of the U.S. …… catastrophic.
US equivalents
Jan 13th 2011, 10:05 by The Economist online
Which countries match the GDP and population of America’s states?
IT HAS long been true that California on its own would rank as one of the biggest economies of the world. These days, it would rank eighth, falling between Italy and Brazil on a nominal exchange-rate basis. But how do other American states compare with other countries? Taking the nearest equivalent country from 2009 data reveals some surprises. Who would have thought that, despite years of auto-industry hardship, the economy of Michigan is still the same size as Taiwan’s?
…
These comparisons are ridiculous.
No states’ economy could exist in its present form without its ties to the greater whole of this country.
Could any of the comparison economies to U.S. states exist in their modern form under autarky?
Exactly. A compartmentalized statistic is worthless and nothing but mental stroking meant to distract or confuse an issue.
Latest update: 20/05/2010 - CANNES FESTIVAL 2010 - cinema
Oscar-nominated director Charles Ferguson‘s ‘Inside Job’ , a documentary on the financial crisis
The financial crisis is at the heart of the Cannes Film Festival this year. After Oliver Stone’s “Wall Street: Money Never Sleeps”, Oscar-nominated documentary director Charles Ferguson brings us an insider’s look at what, and who, caused the world’s financial crisis.
So far, Jerry Brown is showing great insight into and a willingness to tackle California’s intractable budget situation. FYI, Alameda County is where Berkeley and Oakland are located (1,957 people per square mile); Modoc County is scrubland (population of 2.25 per square mile).
California’s budget crisis
Modocians and Alamedans
Jerry Brown hopes to pass a budget by doling out equal pain to all
Jan 13th 2011 | LOS ANGELES | from PRINT EDITION
SETTLING back into the governor’s office he last occupied 28 years ago, Jerry Brown this week reminded Californians that it was time to “face the music”. On January 10th he duly proposed a nasty budget. California, after years of fiscal upheaval, confronts yet another deficit of $25.4 billion in the current and coming fiscal year, larger than the entire budgets of most states. The question before Mr Brown was how to apportion the coming pain so that political compromise becomes possible.
Indeed, as he spoke (unscripted, as is his wont), he chanced upon a catchy summary of California’s underlying problem. In recent years, he said, the state has been paralysed by a stand-off between two alien-sounding tribes, the “Modocians” and the “Alamedans”.
Modoc is, in fact, a rural and arch-conservative county in the state’s extreme north-east where most people voted against Mr Brown. Alameda, east of San Francisco, is one of America’s most liberal counties and voted overwhelmingly for Mr Brown. But Modocians might also stand for California’s Republicans in general, who doggedly oppose any new taxes. Alamedans might typify the state’s Democrats, who reflexively balk at spending cuts.
Mr Brown, ideologically a rather Protean Democrat, is deliberately making Alamedans and Modocians wince equally, in the hope that they both redefine themselves as simply Californians. Thus he proposes to address half of the budget gap with more spending cuts, to be enacted by the Democrat-controlled legislature, and then to plug the remaining gap by asking voters to extend, for five years, several temporary taxes with a ballot initiative to be voted on in June.
Taken alone, each side of this deal would be politically impossible. California has already slashed spending. The additional cuts of $12.5 billion will bleed the state’s public universities, its remaining welfare programmes and its health services for the poor. Many old people with disabilities will stop receiving home visits from carers. Poor families will lose subsidised child care. The list, which reads like a ledger of Democratic taboos, goes on.
But the taxes read like the Republican equivalent of that ledger. In 2009 the legislature passed small increases in income, sales and car taxes that are due to expire this year. At a ballot, voters rejected extending these taxes. To make Mr Brown’s plan work, they would thus have to reverse their own decision.
…
Hate mongering is the Republicant Party’s stock in trade. Why could possibly ever make them want to scale it back?
Paul Krugman - New York Times Blog
January 8, 2011, 3:22 pm
…
“You know that Republicans will yell about the evils of partisanship whenever anyone tries to make a connection between the rhetoric of Beck, Limbaugh, etc. and the violence I fear we’re going to see in the months and years ahead. But violent acts are what happen when you create a climate of hate. And it’s long past time for the GOP’s leaders to take a stand against the hate-mongers.”
…
Why is it that whenever anybody talks about being robbed financially
by the Powers that Be, who are making the choices on who the Winners
or Losers should be ,not based on justice or due process or what those choices should of brought the choice maker who is being reamed, they
attempt to call this sort of discussion hate-mongering .Of course the victim hates the victimizer .
But violent acts are what happen when you create a climate of hate.
“An institution is the lengthened shadow of one man”
Emerson
Our Corporate “TrueAnger™” sponsor : MU
rDoch’s “TrueProvoker ™” Faux News.And it’s long past time for the GOP’s leaders to take a stand against the hate-mongers.”
Maybe so. But there is too much money to be made by not doing so.
They are “capitalists”, not patriots.
California is certainly not the only “state” with underwater issues.
Australia’s floods
Jan 13th 2011 | SYDNEY | from PRINT EDITION
A WALL of water charged through Toowoomba, a city in south-east Queensland, on January 10th, sweeping unsuspecting people before it. Two days later the floods had reached Brisbane, the state capital and, with a population of 2m, Australia’s third-biggest city. The waters swamped low-lying suburbs, tore ferries from their moorings and cars from their parking bays, and turned Brisbane’s business district into a ghost town. With 15 dead and about 60 missing, and thousands evacuated from homes and businesses, Anna Bligh, Queensland’s premier, pronounced the floods the worst natural disaster in state history.
…
The economic impact is likely to be harsh, on best guesses cutting Australian growth this year by up to 1%. Queensland, like Western Australia, had been enjoying a boom, fuelled by commodities. It accounts for three-fifths of Australia’s black-coal exports. Many mines have now been flooded, and railway lines ruined. Sugar cane and cotton, two other big commodities, have been badly hit. The prime minister, Julia Gillard, has promised any money needed to help rebuild Queensland’s infrastructure. Yet she also insists that her pre-flood pledge to bring the federal budget into surplus by 2012-13 still stands. Like the Wivenhoe dam, something may have to give.
Ocean front properties aren’t selling for what they used to in San Diego.
Most interestingly, there is no street address given for this property, which makes it very hard to figure out where it is located or for what comparable homes have recently sold. Who would pay $20m for a home in an undisclosed location with no comps available?
$19,999,000
Dunemere Ave La Jolla, CA 92037
Beds: 5
Baths: 5.5
Sq. Ft.: 6,129
$/Sq. Ft.: $3,263
Lot Size: 1.4 Acres
Property Type: Residential, Detached
Style: Other
Stories: 1
View: Ocean, Panoramic
Year Built: 1922
Community: Barber Tract
County: San Diego
MLS#: 090039716
Source: SANDICOR
Status: Active
This listing is for sale and the sellers are accepting offers.
On Redfin: 551 days
—————————————————————————
Property History for #090039716
Date Event Price Appreciation Source
Jul 13, 2009 Listed (Active) $19,999,000 – SANDICOR #090039716
Mar 20, 2008 Sold (MLS) (Sold) * – Inactive SANDICOR #1
Jan 16, 2008 Delisted * – Inactive SANDICOR #1
Jan 06, 2008 Price Changed * – Inactive SANDICOR #1
Aug 27, 2007 Price Changed * – Inactive SANDICOR #1
Aug 05, 2007 Listed * – Inactive SANDICOR #1
* Price is not available or MLS listing is off market.
—————————————————————————-
La Jolla income by dollar range (Median Household Income: $86,662)
—————————————————————————-
“Who would pay $20m for a home in an undisclosed location with no comps available?”
You’re getting kinda picky, PB. Next you’ll tell us that you want to sleep in the place too. Hedonism!
For sale: The future of Colorado Springs.
The owners of the 21,500-acre Banning Lewis Ranch, which makes up most of the city’s eastern one-third and where 75,000 residences have been envisioned over the next several decades, have put the property up for sale as part of their Oct. 28 bankruptcy.
A Dec. 3 motion by the ranch’s owners stated the national economic downturn, and the decline in real estate development, as having “severely impacted the debtors.” The ranch owners’ bankruptcy petition last year cited more than $242 million in debts.
“Revenues from lot sales are far below projections and the value of the property as collateral for loans has declined,” the motion stated. “The debtors, in the exercise of their informed and considered business judgment, have determined that one way to maximize value for the benefit of their estates and creditors is to sell the property.”
Hope they just don’t give it way…
Read more: http://www.gazette.com/articles/lewis-111143-banning-ranch.html#ixzz1B8Z8RrSr
“The owners of the 21,500-acre Banning Lewis Ranch, which makes up most of the city’s eastern one-third ”
There’s a lot of empty land east of Colorado Springs … all the way to the Kansas border.
Another “developer mastermind” further north in Larimer and Weld counties is also trying to unload thousands of acres he purchased in anticipation of developing it for untold profit. I expect to be hearing about his bankruptcy in the near future as well.
Not only that, but there is no shortage of recently constructed McMansion tract housing to the north of the Springs all the way to Denver. The last time I visited my sister there, in 2007, I noticed the highly visible evidence of a McMansion tract home glut that was sure to sink with the rest of bubble-era developments as the air continued to leak out of the balloon for the next couple of decades.
There may be a lot of empty land, but the water underneath it is rapidly being depleted.
Are we really headed for 20m U.S. households in a negative equity position, or is this guy exaggerating?
Roubini: ‘Housing Prices Can Only Move Down‘
…
“12 million households are already in negative equity and 8 million more have an LTV btw 95 and 100%. Thus even a 5% fall in home price will push an extra 8 million in negative equity with risk of millions walking away from their home—i.e. jingle mail,”…
I’m surprised it’s NOT more than that.
Didn’t Roubini just buy a $5 million apartment in NYC? If prices are only going down, maybe he should’ve waited.
Given that so many of Ben’s helicopter drops of cashola land near or on Wall Street, perhaps it really is different in NYC.
…and Roubini ain’t no dummy.
Bank bids $9 million for $46M foreclosure
Regents Bank secured its interest in nearly $46 million worth of loans Tuesday when it made the only bid on an Ely Springs Property.
Although the bank sought more than $46 million in the foreclosure auction — the largest opening bid for a foreclosure auction in the Teton County’s history — it bid just $9 million to protect its position. The property, whose owner is listed as James Wolford, is located at 1155 S. Ely Springs Road. Wolford could not be reached for comment.
The $46 million opening bid is somewhat misleading, said David Viehman, who tracks foreclosures for Jackson Hole Real Estate Associates. The property is likely worth about $10 million, he said.
“The property was probably cross-collateralized, meaning they had several other loans which used this property as collateral,” Viehman said.
Did the same thing thing with my checking account. Funny thing though is when the authorities showed at my door they used a different term - kiting
So, you have problem with Corporate Communist Capitalism©®™, comrade?
Wells Fargo, the largest private mortgage financing entity over the past year, is calling for 30 percent down on both new mortgages and refinances.
Link:
http://www.thetruthaboutmortgage.com/wells-fargo-calls-for-30-percent-down-payments-on-mortgages/
http://news.yahoo.com/s/ap/20110115/ap_on_re_eu/eu_italy_berlusconi
Totally unrelated to housing, but the saga of Italy’s leader and his underage, um, consort, just gets funnier and funnier.
That’s awesome
The Moroccan/Muslim skank angle is perfect…….she has every reason in the world, including swearing on a stack of Korans, to say that they “didn’t have sex”. Look for an upswing of hot chicks from Muslim countries immigrating to NYC and DC.
OTOH, I’m bummed. We have to settle for Charlie Sheen.
When some tabloid paper waves enough cash under her pert little nose, trust me, she’ll rapidly recall details that I just don’t want to visualize.
Um so she is a lyin low life tramp with some decent cleavage.
“because I told everyone I was 24,” not 17.
http://en.rian.ru/world/20110114/162147388.html
Greece and Italy are suing Germany, seeking WW II reparations. Simultaneously, the EU is pushing Germany to ante up more hundreds of billions to bail out the PIIGS, amid a backdrop of rising backlash in Germany against Merkle’s bailout.
What’s the word that describes this action by Greece & Italy - chutzpah? No, no here’s a better one: RETARDED.
That IS pretty stupid.
It’s Winter, So It’s Time for Ethanol Blends at the Gas Pump
Brought to you by the same folks pushing Cap and Trade:
It costs money to store, transport and blend ethanol with gasoline. Since ethanol absorbs water, and water is corrosive to pipeline components, it must be transported by tanker to the distribution point where it is blended with gasoline for delivery to your gas station. That’s expensive transportation. It costs more to make a gasoline that can be blended with ethanol. Ethanol is lost through vaporization and contamination during this process. Gasoline/ethanol fuel blends that have been contaminated with water degrade the efficiency of combustion. E-85 ethanol is corrosive to the seals and fuel systems of most of our existing engines (including boats, generators, lawn mowers, hand power tools, etc.), and can not be dispensed through existing gas station pumps. And finally, ethanol has about 30 percent less energy per gallon than gasoline. That means the fuel economy of a vehicle running on E-85 will be about 25% less than a comparable vehicle running on gasoline.
Real Cost For A Gallon Of Corn Ethanol
Corn Ethanol Futures Market quote for January 2011 Delivery $2.46
Add cost of transporting, storing and blending corn ethanol $0.28
Added cost of making gasoline that can be blended with corn ethanol $0.09
Add cost of subsidies paid to blender $0.45
Total Direct Costs per Gallon $3.28
Added cost from waste $0.40
Added cost from damage to infrastructure and user’s engine $0.06
Total Indirect Costs per Gallon $0.46
Added cost of lost energy $1.27
Added cost of food (American family of four) $1.79
Total Social Costs $3.06
Total Cost of Corn Ethanol @ 85% Blend $6.80
(From Zero Hedge)
Thanks for posting. I’d read the ZH article too. What a scam on US taxpayers and consumers, not to mention the costs of the instability fostered by diverting so much corn out of the global food chain.
“King Corn”
Google it.
And of course, the “Goldman Sachs” of agriculture, ADM.
This post by me is in part a response to a Foreign poster from India apparently who ranted about Americans not being entitled to their jobs or wealth and the USA” entitlement “feeling was wrong etc. etc. The post from this individual was on a thread yesterday if you want to look it up .
From the dawn of man and the development of Societies there has been groups of Barbarians that would go into peaceful cultures that had built up some wealth and goods and just take that wealth and harvest ,the spoils of war ,rather than produce it themselves . This form of gaining wealth was a barbaric and expedient and effective form of raiding ,not earning or producing wealth but getting it by violence and murder . The raided village
felt” entitled” to their harvest and hard work ,but were deprived by
raiders who didn’t have a psychology of building it themselves under a fair system .
Now shift to Modern Day ………
You have the USA ,a land of milk and honey, by which a long serious of fought wars and a guiding Constitution built up a Society of wealth in which the MAJORITY PROSPERED. This was in part due to fights by the population to gain a balance of power between the Employee and Employer .A strong rule of law was also a guiding principal for this culture.
This culture was the envy of the World ,but the envy people wouldn’t apply the same principals or fight to get the same advantages in their own Country .
The Majority in the USA prospered until a group of Traitors from within
sought to raid the Majority . In addition raiders from Mexico and India ,or anywhere else in which the governments of those Countries didn’t do right by their own people by duplicating the actions of USA ,sought to raid the Envy of the World ,which opened the door for other raiders to enter .
A plan of raiding emerged because the Governments of those people were corrupt
and wouldn’t do actions that would prosper their Majority .Never a thought to curbing population ,or developing systems that would uplift
their Majority or give fair wages .
So ,the people of the land of milk and honey ,who had been betrayed by the Judas Wall Street/Corporations/Governing Bodies ,felt entitled to their long fought for benefits,jobs , and distribution of wealth to the Majority ,after a long history of fought for gains .
Than Traitors and Raiders have the nerve to say that Americans aren’t entitled ,and the Traitors and Raiders are entitled instead .
Message to the Poster yesterday ….Your Country should solve your own problems ,population being one of them . Stop trying to take entitlement
from other people ,and maybe you can create your own jobs and maybe if you work on population control you might have enough jobs to support your people instead of being a raider who feels they are entitled to raid .
You only are in the position you are in because some Judus people gained
power in the USA and betrayed its people . Entitlement bashing is the new
way of saying we want to steal your wealth and steal your jobs .
Check my reply to your comments on yesterdays thread.
hey…lighten up. By your logic all the people here who built this system are in fact raiders because they stole the land from the Indians who once lived on this land. So your argument about raiders stole this, took that…has no basis.
Actually, once India, China were superpowers of the world, when they were visited by traders on boats for their silk, spices, cotton, gold in exchange they colonized their land. So if they are going to be superpowers in the future it is a status that once belonged to them and they are taking it back. It only briefly shifted to the west because of the wars, internecine rivalries amongst them.
Calm down…why are you so upset? Let me humor you….Did you know that potatoes were not originally grown in North America? So rightfully farmers here are growing stolen crops from somewhere else in the world (it originated in Peru) Thus Peru and other places where the crop originated has lost revenue, so go figure!
brahma:
Your point is that whoever takes it, deserves it. If that’s the case, then the American ppl will deserve it when they take it back from you.
Your country cannot propser soley by taking our jobs. I don’t care if you all create your own jobs, but I am one of those people who is actively working to get ours back.
Message to everyone who reads this: Vote againts globalism and prove brahma to be the weaker dude.
here I have copied my reply from yesterdays thread….
It is not that they were *given* jobs. It is just that they produced something cheaper and thus *assumed* the jobs. If another place can produce greater benefit the jobs will go there, it is not that they are forcing you to keep them.
F*** whats the matter with you? It is the job of India to lift their own people? Of course, nobody will do your work for you anywhere, they just did. It is not that you gave them your jobs. By the way it so happens to be a big market for goods produced here, did you know that Intel sells only 18% of its products here in North America? The rest is the world demand, largely from China, India, Japan. So should they shut their doors and tell you to sell your stuff somewhere else? After all by your logic it is the responsibility of Intel to sell its stuff here.
In my example above, who benefited? Of course America. Intel by its higher revenues, pays more taxes, more taxes benefits the schools, fire departments, police. So by extension of your argument…India China should be mad that they lost all that revenue which could have benefited their systems and should blame America for their bad infrastructure.
You get real. We have benefited handsomely by the kindness of foreigners. hell…you should be happy they sell you their oil for worthless toilet paper that is our currency. ha ha….a bottle of water costs more than a bottle of gas. So they should tell you to go find your own oil…it is not their job to give it….by an extension of your argument.
The fact are America needs others more than they need us.
I didn’t say that there was anything wrong with trade and your implying that I did by your arguments . If a Country wants to sell their oil to another Country than they do and we have been buyers . The
problem is the Heads of those Countries pocket a great deal of the
proceeds of those oil sales and leave their people living a low standard of living .As I said Americans had to fight a long time for
some kind of equality so the Majority could prosper more .
In India at one time you booted out your raiders ,but than your
Leaders didn’t do much in the way of improving the situation for the
majority after that and you cling to a class system that is religious based that screws the majority .I’m not attacking your Religion if thats the way you want to do it ,but don’t say that Americans aren’t entitled to their jobs that you think you are .
You rationalize raiding the entitled people in the USA jobs ,but you didn’t do it, it was handed to you by our Traitors .
You know as well as I do that your Country wouldn’t transport your jobs to the USA or buy a equal amount of export from us . Your willing to make stuff cheaper and not pay proper tariffs so you undercut our own manufactures,but this isn’t your fault ,your Country is just taking advantage of our Traitors ,but call it what it is ,not Americans aren’t Entitled to their jobs .
Than you come up with the classic argument that we were raiders of
the Native Indians ,therefore Americans aren’t entitled to their Country . If you look at the long history of the World ,conquering of
terrain is in every Countries history until we have what we have
today . No longer is there a belief in Modern day Society that conquering terrain is right .
China and India were once Superpowers on the World stage as you said ,but somehow the position slipped . These Countries were big traders with the World . But again I say , how can you make the statement that Americans aren’t entitled to their entitlements or jobs
as if India and China are ?
The whole World buys oil from oil producing Countries ,but each and every Country would be smart if they broke from that and developed
other sources of energy ,including your Country .
We haven’t gotten kindness from foreigners ,the World hates us but
doesn’t mind benefiting from our kindness . The USA is one of the kindest Nations in the World when it comes to helping our Neighbor when disasters happen .
I would suggest you conduct a analysis of what factors in your Country have held your Majority down and look to the right answer
as to what the solution is rather than saying Americans aren’t entitled
to their jobs or systems because you can undercut by cheap wages .
Cheap wages aren’t going to help you if proper tariffs are enacted .
Also, I missed that part where you say your just taking back a status
you once had in the World . Why doesn’t your Country just raise your
wages and think about your own job creation instead of taking our jobs and selling us junk . Why don’t you sell your own people junk ?
You seen to think the answer lie in taking American jobs ,not paying proper tariffs to level out the playing field ,and a number of other
monopoly type undercutting methods that actually deprive your people of good wages . Your being exploited wage wise ,but maybe
there is a long term gain in mine of finally getting your status back .
You have only proven by your statements that your are not this kind friend of the USA but rather a Country interested in getting their status back ,as if America took it away from you .Your statements only prove that your are hostile to the USA rather than your own Leaders and your have a agenda of regaining status at the expense of the USA ,who deserve it in your mind .
Look, it is always sad when a breadwinner loses a job. I really feel bad for Americans who lost their source of income for whatever reason (not just outsourcing). It is an unfortunate outcome of capitalism…where the winner takes all but the society has to bear the losses in good times and bad.
We need a system where the results are more equitable. The world tried communism, that failed. Perhaps we must have a system where everyone can trade more fairly, create a new global reserve currency not owned by any one nation but a non profit entity. But how do you go about creating a system like that when you have 2 billion new people coming to the table, from diverse backgrounds and conditions, to the global economy from Chindia alone? They are not idiots, they will want their fair share too.
Going back to jobs being lost, Americans and the west, IMHO, have lost jobs more to automation and far less to outsourcing. When 2 computers do the job of 40 people how do you bring the majority to the table for sharing the rewards even if America traded only within its borders? With globalization the effects are somewhat mitigated for the ordinary American because we sell more overseas and benefit from the added revenue.
Oh…believe me the occupation and theft is not something that is not accepted here. We have occupied Iraq, what do you think we are there for? to promote democracy? It is oil plain and simple, once the oil is gone the govt will declare mission accomplished, it is all stable and bring the troops home.
HA HA, that the US is the kindest nation in the world, AYFKM? US has fought more wars than any other in the world. It has 750 military bases all over the world, for what? Only for keeping the flame of democracy alive? Hell, they make it their business even when its really none of their business all over the world. Let me give you some history, who bombed Vietnam? Carpet bombing of civilians (mind you), Korea, Panama, coups in Iran, interventions by the govt or its agents in Africa, various places in South America. It is not just limited to that, if you look up history, the group which was responsible for 911 and its various mujahideen were originally a creation of the US. So may I ask what were the worlds greatest and kindest and its govt doing creating these scumbags of humanity (terror outfits) in the first place? May I suggest, lay off the pipe? I don’t know what you are smoking.
Funny how I knew this argument was going to be your next chess
move .
First ,when we had the bomb and no other Country did we could of taken over the World ,but we didn’t . We actually helped the very people that attacked us after the War II . The USA went ahead and continued with this ‘Watch Dog of The World ” stance
and the Cold War with Russia didn’t help matters .I think this
Watch Dog stance and military build up was a over reaction to
World War II by the USA IMHO in light of what happened in World War 11 . You really can’t say to what degree this helped the World that we took this position and how it would of turned out otherwise ,its just speculation .
I think we took this position to far ,but at the same time many
Countries have benefited from it .You might say that some of
our acts were for the protection of having free trade with
Countries that might be subject to attack ,and that was in our own self interest . I think we should scale back all this Watch Dog of the World Stance actually ,and war sucks on any level .
Unregulated capitalism will produce monopolies and crony capitalism ,its not that capitalism isn’t a perfectly viable system .
Free trade without proper trade balances and tariffs produce
inequities that raiders and traitors love to exploit .
You act like other Countries haven’t supported counter -America
groups while at the same time they were smiling at us acting like our friend .I don”t care if a Country wants to be communist ,but
it gets touchy when they want to take over other countries that
don’t want to be . Countries that threaten to nuke us are very
troublesome .
If someone attacked India you people would be the first to want
America to help out . We don’t have the luxury anymore of being the Watch Dogs of the World ,or trying to push our ways on other Countries if they don’t want it .
But what does all this have to do with traitor and raiders and
Americans wanting their jobs and standard of living . You act like any people would not want this ,wouldn’t want to be
robbed of what they created and feel entitled to it.
I was responding to the hostility of your original post in which you suggested that it was OK for Americans to be deprived in the manner they now are .
No. you could not be seen taking over the world, you spent all this effort just fighting the world war to save it. In many ways the world is grateful for that and thanks you for it. However, American leaders and corporations back then had principles, values and were ethical. Not the idiots who rule the corporations or are elected as our representatives today.
Take for instance the pres, he was elected on the promise to bring change, get out of Iraq, stop the bailouts on wall st, bring the bankers to book for the financial carnage, reduce deficits and bring spending under control. Not one thing has happened, it seems like it is more of the same, it does not matter who wins the election. Unlike in the past the leaders of today are all best friends with the bankers, corporations and special interests.
Like, I said, in an earlier post that Indians or Chinese are not entitled to these jobs, it is just that they made things cheaper so they got them. If Naaru, Tobago or some one else made them cheapest they would have got them. They were not given these jobs, they have temporarily assumed them.
What do you think? Indians have not lost any jobs to American corporations? Well, there are plenty of Indians who wake up open their GE refrigerator, open a can of Pepsi, and go to work chatting on their blackberry driving a Ford. So you tell me, how many Indian companies have lost business in this daily routine? Well there are layoffs there as well, there are lesser refrigerators, drinks and cars made domestically in India.
This is happening because the corporations here find ways to screw the population there too. Whole sale dumping of cars, steel, cement, single use seeds, helicopters that had no market here are introduced to the Indian Navy by bribing the right people, exporting junk, waste, other goods that no one wants here. So, stop complaining, everyone has lost more than what meets the eye or what is painted by the media. It is not they have only benefited from the goodness or generosity, they have lost as well.
For your kind info, when China attacked India and during the Bangladesh war, Americans stationed their naval fleet, in the bay of Bengal enforcing a blockade, to intimidate India. You did not help us; in fact the govt here tried everything to make sure India lost. Actually, the relations with India have improved only after India opened up its economy for western goods and services, in the mid to late 90’s. We sort of became friends, when it suited you, and when you saw the big market it was for the corporations here.
@BigV…things will change, right now you buy more stuff than anyone else in the world, but this is not something that will last forever. For examplel, how many people is the US put together? 300 million? How many people are there in China+India= 2.5 billion. So for every flat screen tv you can sell here there are 8 tv’s you can sell there. So, the bigger markets make the rules and define new products. When I say that we are “lucky” they sell things to us, I meant it from the view that they sell their oil for just pieces of printed paper that are devalued every day by the Fed. In effect what is happening is that we are gaining something of value in exchange for something that we keep devaluing with no end.
Brahma:
Are you a US citizen?
Now I’m thinking hes Joey . Corruption is a bitch where ever it breaks out . I remember contributing money to Bangladesh back in the day ,so I was on your side .
Don’t you see that Countries are just made up of people who half the time don’t even want what their governments/corporations do ,or they don’t even know about it regarding foreign policy .
When foreign Countries buy products there is just the assumption that they wanted to . Why didn’t your Country make your own
products instead of relying on American products for a while ?
History usually points to a lot of exploitation from the higher ups
at the expense of any Countries people ,regardless of Country .
The people of most Countries just want to trade and want to be self-sufficient in making their basic goods. This isn’t always possible if a Country doesn’t have a certain natural resource ,
so they need to buy from other Countries some times .People just want good paying jobs in any Country and any exploitation
of the worker in any Country sucks .
Its Joey
I am not American, I am Indian by blood and nationality…the Apu you all find it fashionable to despise, regardless of how honest I was or how much I helped charities here…I love this country as much as you do, my frustration is that some of the rich and powerful here are so damn greedy and corrupt that it sickens me. F*** I even went to donate blood within hours of seeing the 911 happen on tv and many times after that. I also have worked for corporations here who have butt reamed me for their profits. Right here.
I now plan on going back, I would rather build my own country than work for someone else. It does not matter how small my business is, at least I am my own boss and I helped another make a decent wage, no exploitation on slave wages, I will pay good wages or else I will not hire. Gone are my ambitions of profits, or security, after I have seen what job loss does to families, there is nothing American about it, its blind to nationality.
Well lets see how far I get on my thinking that it is far better to pursue a dream in India, on capital that I can raise there, at least I lived a life not defined only by money. I have a few things to wrap up and bills to clear before I leave. Good luck all, its been nice talking to you, too bad I cannot do this more often. Later gators
Iteresting / You came to America ,apparently you didn’t have citizenship . You came here to make money ,but the system
didn’t turn out to be as profitable as you expected .You have been a nice person and a nice fair business man ,but greater
forces of greed have limited your ability to get the American dream .
You are going to take whatever profits you have made here
and take them back to India and start anew there because
American let you down . Correct me if I’m wrong with this summary . Like I said ,your a raider .
What makes you any better? Living on this land that once belonged to someone else, you continue to occupy, raid, be a nuisance to the rest of the world, rip off their oil, goods, produce, wealth with fake fiat money, lie, cheat, steal and be a fat ass broke kid the world finds who needs continuous QE to keep going. Hey…what else do you do best? I am curious. The immigrants at least work for their money. WTF do you do…whine all day from your mommas basement on a blog collecting welfare checks. Hey let me enlighten you a bit…immigrants and others who work do not make the money gratis, they work for it. The same way Americans make their money by selling their goods, software overseas, by your definition since they use the other countrys system to sell their stuff and take their money they are raiders. By your worldview, nothing is better than you right? I thought so. Too bad it does not work that way.
You making a mistake who is doing all these evil things . I have worked hard my whole life and I don’t collect welfare ,I give out welfare . BS that only the immigrants work hard . The USA is just a Country of people ,like any other . The USA isn’t better
or worse . I happened to like the Constitution it has and the land of opportunity it was under capitalism until the change . You act like India doesn’t protect itself and Americans resenting raiders
is unnatural . Many countries don’t even allow very much immigration . The early immigrants came here to become Americans and stay here . It really became a racket to be a raider and than leave and play the currency differences .
HA HA, that the US is the kindest nation in the world, AYFKM? US has fought more wars than any other in the world.
Is America the “kindest” nation in the world? Maybe not. How can it be? Being very powerful requires a different set of responsibilities requirements than being weak. Could America have been as “kind” as Sweden, Denmark and Botswana the past 100 years and the world still remain as we know it? America’s “kindness” and behavior, although not perfect has been relatively good and cannot be judged in a vacuum.
So maybe we couldn’t be the “kindest”, but there is no doubt in my mind that of our past peers, America is by far the “kindest” nation in the world. It’s no contest.
In the past century only, Nazi Germany, USSR and America have had the chance to dominate the world, with Red China and Imperial Japan running far in the distance. India doesn’t make the cut.
Now when you look at that list above and imagine if any of those other regimes came to dominate, I think the world should wake up every day and thank their Gods that America and none of the others came out on top. In that respect, they might just appreciate how “kind” America actually is.
Living on this land that once belonged to someone else, you continue to occupy,
Being and Indian, you’re probably just mad because we took the land from the Indians.
Being and Indian
Dang.
Being an Indian…..
(sometimes I type to fast when I’m trying to make a really intelegent post)
brahma:
Read my post about China. Similar situation with India. It is up to the American people to act wisely to protect American interests. China protects China’s interests, India protects India’s interests, and we protect who again?
We are not “lucky” that ppl sell things to us. They are lucky that we buy things from them. In a capitalistic system, the vendor knows his place.
Good way of putting it BIG V . I don’t know why I got drawn into the
whole conservation to the degree I did .
While consumers are fixiated on the rising price of a barrel of oil, they should be more worried about corn prices and the ethanol scam:
“Today, the government decides and they misdirect the investment to their friends in the corn industry or the food industry. Think how many taxpayer dollars have been spent on corn [for ethanol], and there’s nobody now really defending that as an efficient way to create diesel fuel or ethanol. The money is spent for political reasons and not for economic reasons. It’s the worst way in the world to try to develop an alternative fuel.” - Ron Paul
When bipartisanship breaks out in Washington DC, check to make sure your wallet is still in your pocket. Every time you fill up your car this winter you are participating in the biggest taxpayer swindle in history. Forcing consumers to use domestically produced ethanol is one of the single biggest boondoggles ever committed by the corrupt brainless twits in Washington DC. Ethanol prices have soared 30% in the last year as the supplies of corn have plunged. Only a policy created in Washington DC could drive up the prices of gasoline and food, with the added benefits of costing the American taxpayer billions in tax subsidies and killing people in 3rd world countries.
The grand lame duck Congress tax compromise extended a 45-cent incentive to ethanol refiners for each gallon of the fuel blended with gasoline and renewed a 54-cent tariff on Brazilian imports. The extension of these subsidies, besides costing American taxpayers $6 billion per year, has the added benefit of driving up food costs across the globe, causing food riots in Tunisia, and resulting in the starving of poor peasants throughout the world. This taxpayer boondoggle is a real feather in the cap of that fiscally conservative curmudgeon Senator Charley Grassley. He was joined in this noble effort by another fiscal conservative, presidential hopeful John Thune. It seems these guys hate wasteful spending, except when it benefits their states. The bipartisanship in this effort was truly touching, as Democrats Kent Conrad and Tom Harkin also brought home the pork for their states.
A bipartisan group of 15 senators signed a letter in late November demanding an extension of U.S. ethanol subsidies. I wonder if the fact they have received hundreds of thousands of dollars in campaign contributions during the past six years from pro-ethanol companies and interest groups like ADM, Monsanto, the National Corn Growers Association, and the Iowa Renewable Fuels Association had anything to do with this demand. You can always count on a Senator to do what’s best for his re-election campaign rather than what is best for the country. These symbols of political integrity will always spout the standard talking points:
•Promoting ethanol reduces our dependence on foreign oil
•Ethanol is green renewable energy
•Ethanol is cheaper than gasoline
As we all know when dealing with a politician, “half the truth, is often a great lie.”
(The information above originally appeared on Zero Hedge).
The future is…rice.
Not plastics
Rice is nice, and will suffice.
(With apologies to Robert Frost, I think).
Nobody ever suggested life would be a bowl of cherries, but state budget austerity is a bowl of rotten tomatoes.
Year ahead looms as toughest yet for state budgets
(AP) – 6 hours ago
SACRAMENTO, Calif. (AP) — If 2011 is hinting at a national recovery, there is little sign of it in statehouses across the country.
States that already have raided their reserve funds, relied on borrowing or accounting gimmicks, and imposed deep cuts on schools, parks and public transit systems no longer can protect key services in the face of another round of multibillion dollar deficits.
As governors roll out their budget proposals and legislatures convene this month, they do so amid a sputtering economic recovery and predictions of slow growth for years to come. State and local governments face lackluster revenue projections, worries from Wall Street over looming debt and the end of federal stimulus spending.
In the first weeks of 2011, Republican and Democratic governors alike have begun detailing across-the-board pain for education, health care, transportation, public safety and other programs. Some say the year of reckoning for state and local governments is at hand, with calls for structural changes that could radically shift expectations of what services government provides.
Many believe the months ahead will be the most challenging in memory, with consequences for millions who depend on government funding.
“We need to send a message to the governor: We’re real, and we depend on all these services,” said Sergio Garibay, a 41-year-old Southern California resident who relies on state disability payments and recently protested deep cuts to Medi-Cal programs proposed by California Gov. Jerry Brown. “There are other alternatives to the budget. Why don’t we tax the rich, these corporations?”
In releasing his budget proposal, Brown told California lawmakers “the year ahead will demand courage and sacrifice” as the state faces a deficit projected to hit $25.4 billion over the next 18 months. His proposal combines spending cuts to Medi-Cal, in-home services for the elderly and higher education with a five-year extension of income, sales and vehicle taxes.
New York Gov. Andrew Cuomo proposed eliminating 20 percent of state agencies by combining duties, such as merging the Insurance Department, Banking Department and the Consumer Protection Board into the Department of Financial Regulation. It’s part of “radical reform” to pull his state out of its fiscal crisis. And Gov. Chris Christie in New Jersey skipped a $3.1 billion payment to the state’s pension system in a push to cut benefits for public workers, while proposing higher employee contributions and a boost in the retirement age from 62 to 65.
In Illinois, lawmakers voted for a dramatic 66 percent hike in personal income tax, from 3 percent to 5 percent, in a bid to resolve a $15 billion deficit, which amounts to more than half of the state’s entire general fund. The tax increase will be coupled with strict 2 percent limits on spending growth.
“It’s important for their state government not to be a fiscal basket case,” Gov. Pat Quinn in defending the major tax hike.
…
But the markets are up, so any day now the wealth effect will wash away those woes like a soothing rain. Ben says so.
Small town launches its own stimulus: a local currency
Two residents of North Fork, a former lumber town near Yosemite, developed a scrip to encourage residents to shop locally. It’s catching on slowly because most businesses still want to be paid in old-fashioned greenbacks.
By Alana Semuels, Los Angeles Times
January 15, 2011
Reporting from North Fork, Calif. —
Located almost in the dead center of California, North Fork is like a lot of other rural outposts: It’s losing businesses and hopes for a turnaround.
But there’s nothing typical about the town’s biggest booster, Josh Freeman. His efforts to resuscitate this tiny town include launching a local currency emblazoned with butterflies and hummingbirds in a bid to keep wealth in the community.
Freeman grew up in Pacific Palisades and drives a car powered by vegetable oil. Until a few months ago he wore dreadlocks down his back. To make a living, he repairs computers and develops websites. And he has an unshakeable belief that small-town life is not only worth reviving, but also essential to preserve.
“Wall Street is making more money than it’s ever made, and Main Street is evaporating,” said Freeman, sitting in his studio, which also serves as the town’s yoga studio, karate classroom and concert hall. “That’s unsustainable.”
…
Watch out, Uncle Sam.
Why didn’t I see it? Here I thought Ben Bernanke’s trillion-dollar POMO injections were solely aimed at enriching Wall Street with any losses and liabilities to be covered by Main Street. But now, now I realize how truly altruistic Helicopter Ben is. He has cleverly come up with a way to export inflation, thus goading the impoverished in sh!tholes like Tunisia and Sudan to rise up and overthrow corrupt, despotic dictatorships! What a freedom fighter!
http://af.reuters.com/article/topNews/idAFJOE70E0AZ20110115
Sudanese youths call for peaceful govt overthrow
KHARTOUM (Reuters) - Young people in Sudan, the last Arab state to experience a successful popular uprising, are using social networking sites to rally support for their plan to topple the government through peaceful protests.
Encouraged by weeks of Tunisian demonstrations which ousted President Zine al-Abidine Ben Ali on Friday, Sudanese are harking back to the popular uprising in 1985 which overthrew President Jaafar Nimeiri after 16 years of harsh rule.
Fresh from this week’s demonstrations against rising prices, young Sudanese are circulating calls on Facebook, Sudanese websites and by text message calling on families to stand outside their houses and light a candle for 30 minutes at 7 p.m. (1600 GMT) every day — starting on Saturday.
“People will stand for one day, two, three, seven - soon it will reach the media … then it will hit the streets and topple this tyrant,” Wail Jabir wrote on Facebook, where more than 400 people have already signed up for the protest.
“This is just a beginning,” another comment said.
Students demonstrating against rising food and petrol prices clashed with police on Wednesday and Thursday in three towns in the mostly Arab north, including Khartoum.
The Khartoum government is grappling with a deep economic crisis at the same time as it faces the near-certainty that South Sudan, which produces 75 percent of the country’s oil, will secede when results of a referendum are announced.
Foreign exchange shortages have forced Sudan to cut subsidies on petroleum products and sugar, a strategic commodity, to devalue the currency and restrict imports.
Bull vs. Bear: Will housing rebound?
Posted by Nin-Hai Tseng, writer-reporter
December 27, 2010 3:00 am
It’s a question many Americans want answered: Will the value of my home rise or fall next year? Smart minds fall in both camps — here are both sides of the coin on real estate.
One of the most closely watched sectors in 2011 will continue to be real estate – a wildly emotional and divisive topic that’s puzzled investors and economists since the housing bubble burst around 2007. Earlier this year, many observers thought the market would turn around in a big way as federal tax credits spurred home purchases and the economy added jobs following hundreds of billions of dollars of government stimulus spending.
As the end of the year approaches, the prospects of a real recovery look much dimmer. For one, it’s become clear that we won’t see a true rebound until we have job growth. With unemployment showing few signs of improvement so far, the bullish take on housing seems hard to swallow, especially when many experts say home prices still have room to fall before hitting bottom.
But a bullish take doesn’t necessarily mean that prices would significantly rise. These are unprecedented times, and even the more cheery views fall short of predicting a steady surge in home values.
Here’s a bullish and bearish look at real estate for 2011.
Bull: Buy real estate!
One of the most vocal bulls on housing for 2011 has been Bill Ackman, founder and CEO of hedge fund Pershing Square Capital Management. At the Value Investing Congress in November, Ackman made a bold presentation called “How To Make A Fortune,” highlighting why it’s the right time to invest in real estate.
Ackman laid out several reasons but some key points include: With the fall in home prices and mortgage rates still relatively low, affordability is at its highest level in decades. What’s more, while there’s clearly still a glut in the supply of unoccupied homes, it will start to decline given that the rate of home construction is at historic lows.
Some of Ackman’s points sound similar to the reasons billionaire investor Warren Buffett gave earlier this year for his prediction that the real estate slump would end by about 2011.
Of course, this doesn’t mean he thinks home prices will return to their 2007 peak. In Buffett’s annual letter to shareholders of his Berkshire Hathaway (BRKA), which owns real-estate brokerage and manufacturer Clayton Homes, he predicted that demand for homes would catch up with supply following a period where the glut of unsold property caused home construction to dramatically fall.
In 2009, housing starts (the supply side) were 554,000 – by far the lowest number in the 50 years for which Berkshire could date. “Paradoxically, this is good news,” Buffett wrote.
And with home prices falling, he said families who couldn’t afford to buy a few years ago would finally be able to afford to do so. Buffett put it this way: “Prices will remain far below ‘bubble’ levels, of course, but for every seller (or lender) hurt by this there will be a buyer who benefits.”
It’s anyone’s guess if Buffett’s position on housing will change much in his letter to shareholders next year. It also remains to be seen if Ackman will continue to trump his “How to Make a Fortune” pitch with the recent rise in mortgage rates. For now, at least, both investors see promise in housing.
Bear: What bottom?
While home prices have for the most part stopped their freefall, some economists believe they haven’t hit bottom yet.
Rick Sharga, a senior vice president at RealtyTrac, an online marketplace for foreclosure properties, recently told The Wall Street Journal that foreclosures for 2011 could top the estimated 1.2 million bank repossessions this year, which reflected an increase of 900,000 from 2009. This is partly due to the so-called “robosigning” mess that forced some lenders to stall a flurry of foreclosures.
While Sharga predicts that home prices nationally could still fall by about 5%, others say they could drop much more at about 10%.
Some might argue that further declines coupled with relatively low mortgage rates might just spur a flurry of home purchases, but Daryl Jones, an analysts at investment research firm Hedgeye says that’s unlikely given that credit standards at virtually all major lenders are much higher and typically require larger down payments that would actually add to costs. Jones also thinks that home prices could fall another 15% to 30%, which means homes are actually still overpriced and might not attract more buyers as Ackman argues.
And while home construction is at all-time lows, Hedgeye says the trend is probably not as promising as Buffett and Ackman might think. The supply of housing is still very high – the firm estimated in November that there’s still 11 months of supply on the market to absorb, which is close to levels seen in 2009.
With so many variables working against the housing market, the bearish takes becomes all the more convincing. But one can always hope they’re wrong.
Depending on the area ,I don’t know that waiting around for another 5 to 10 % drop is going to offset the favorable loan conditions in terms of rate . If your a cash buyer than you will always be in a favorable position . Some
areas have not taken the dumps that will take place no doubt ,but others
are pretty close to bottom . It also depends on any given area how many foreclosures there are ,or how much shadow inventory .
IMHO ,high demand areas will not drop as must but they will drop and take
longer to drop . Everything also depends on jobs in the area in question .
When the bottom will come is area specific and will be different through
out the United States . Some places they won’t be even able to give houses away because the demand was so false to begin with and employment centers won’t be able to sustain the developments . Some places are known retirement areas and that could be sustainable without
jobs if the demand is there by retirees .
When you go from a entirely fake housing market in which houses were built for flippers to sell to the next greater fool based on faulty /fraudulent lending ,and not on the qualified incomes of end user demand ,than the corrections in any given area will be based on what the market
would of been absent the fake housing boom . For example ,you have tracts sitting out in the middle of nowhere with no employment base that are going to have little demand .
I would never buy if I had job insecurity ,that doesn’t make sense ,unless
I could pay cash .
The variable of job insecurity is one that I think the Lenders didn’t expect
would bring down the demand .
Also your going to get a over correction in certain areas for a variety of
reasons .
You can’t just call a bottom for the whole United States . I don’t understand why the Experts always attempt to do that . If there is job creation in a area and its stable it might stop a over correction to the low side .
If I were the Bankers ,I would try to talk Corporations into job creation in
America to solve their problems somewhat instead of more outsourcing .
But one greedy hand doesn’t want to work with another greedy hand .
FHA loans for flipped homes working
When you hear that the Obama administration plans to extend a policy that allows low-down-payment financings of “flipped” houses for 2011, your first reaction might be: No way.
At this stage of the boom-to-bust-to-recovery cycle, is high-leverage house-flipping the type of activity the federal government should be encouraging?
The Obama administration plan has no connection with deals like these, though the word “flipping” is in its title. A little history: For years, the federal government had prohibited the use of FHA mortgage financing by buyers purchasing homes from sellers who had owned the property for less than 90 days. The idea was to prevent speculators from defrauding the government through quick flips of houses - usually involving straw buyers and corrupt appraisers - at wildly inflated prices.
One side effect of that policy, however, had been to stifle purchase-and-renovate projects by legitimate, small-scale investors who buy houses after foreclosure or loan defaults and then resell them in substantially improved condition. In many parts of the country, first-time and moderate-income buyers often sought to buy these fixed-up houses using FHA-insured mortgages with 3.5 percent down payments, but were prevented from doing so by the long-standing “anti-flipping” rules.
This, in turn, left large numbers of foreclosed, vacant houses sitting unsold and deteriorating, with negative effects on the values of neighboring properties.
Last January, FHA Commissioner David H. Stevens announced a one-year suspension of that rule, permitting qualified buyers to obtain FHA mortgages on properties that were acquired by rehabbers less than 90 days before. The plan, set to expire at the end of this month, came with key safeguards for purchasers, including inspections and multiple appraisals in some cases to document the amounts spent by investors on the improvements.
Vicki Bott, deputy assistant secretary for single family housing at FHA, confirmed in an interview that the agency expects to continue the policy for another year, and hopes to make a formal announcement soon. Not only have first-time buyers responded overwhelmingly to the opportunity to buy “turn-key” renovated homes with low down payments, she said, but they have performed well on their mortgage obligations.