Bits Bucket for January 28, 2011
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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I thunk their missions was affordable housing, not backstopping the housing market. Lowering the wishing prices of homes in the foreclosure backlog would go far to restoring affordability. The only reason they have more homes than they can sell is that they are not lowering the asking price to levels at which the market will clear.
Who changed their mission for them?
Housing January 27, 2011, 5:00PM EST
Fannie and Freddie’s Big Foreclosure Backlog
They have more homes than they can sell—and as the backlog builds, the housing market could suffer
By Clea Benson
BW Magazine
Fannie Mae (FNMA) and Freddie Mac (FMCC) are trying to sell their huge backlog of foreclosed homes in an orderly way to avoid flooding the market and depressing prices. As foreclosures mount, though, analysts say the companies may be forced to reconsider that approach.
The government-controlled mortgage companies’ inventory of foreclosed residential property has quadrupled in three years and now stands at a record $24 billion. The number of properties they own has increased fivefold to nearly 242,000, representing roughly a third of all repossessed homes in the U.S. And the total keeps growing as they take possession of homes faster than they can sell them. In the first nine months of 2010 Fannie and Freddie took in 319,243 foreclosed properties and disposed of 210,105. At the same time, U.S. housing prices have been falling. In the most recent reading, the S&P/Case-Shiller index of home values in 20 cities fell 1.6 percent in November from the previous year, the biggest 12-month decrease since December 2009.
Officials at Fannie and Freddie say they are committed to an approach consistent with their mission as backstops for the housing market.
…
“Who changed their mission for them?”
Politicians like Barbara (Just call me “General” mister!”) Boxer from the land of fruits and nuts:
Housing continues its decline and foreclosures are still on the rise. Yet Senator Barbara Boxer wishes to recreate the bubble by lowering loan standards to allow people to refi:
The Helping Responsible Homeowners Act of 2011 would remove barriers, such as loan-to-value requirements, in order for certain borrowers to qualify for a refinance.
Risk-based fees on loans for which Fannie Mae and Freddie Mac already account for the risk would be removed, and lenders would be prohibited from dismissing second mortgage borrowers. Underwater borrowers would also be eligible to refinance.
“At a time when millions of Americans have been forced out of their homes, this legislation will ensure that homeowners who make their payments on time will be able to refinance their mortgages at current low rates so they can stay in their homes,” Boxer said.
She added that consumer spending would indirectly increase because of the bill because homeowners would have more disposable income.
(Translation: Let’s free up more bribe and graft money from the graveyard of housing)
Didn’t most of those borrowers already buy at current low rates? ISTR that the I/O Neg-ams were in the 4-5% range, which is what rates are now. Even then, the FB could barely afford to write the check for interest-only. Even if the FB refied to a 30-fixed at those rates, they could never afford principle.
They all counted on selling before principle became an issue. Ooops.
“certain borrowers”
I’m sure this includes folks who are current on their mortgage but underwater, but want to be able to get the low rates too … yeah right - deadbeats only. And we wonder why there are so many awful loans (as if the banks needed help in this area to start with).
“……Lowering the wishing prices of homes in the foreclosure backlog would go far to restoring affordability.”
Not to mention what it might do for the rest of the economy if people are not spending up to 50% of there income on housing. More disposable income = better economy. It could be spent on more important things like boats and boob jobs!
Unfortunately, in order for an FB to not spend 50% of his income on housing, he would get out of his current house and buy much lower. This is involved FB BK’s and banks taking the hit.
And renting is not the end-all-be-all either, especially where the jobs are. Where I am, the rent/buy ratio is nearly normal (which is not necessarily good). And what does it matter? If the house doesn’t get the money, the health insurance will.
Yeah, I was referring to new buyers and those who don’t already have boats or boob jobs.
* POLITICS
* JANUARY 28, 2011
Obama’s Choice at Housing Agency Withdraws Name
By ALAN ZIBEL
WASHINGTON—The Obama administration’s pick to run the agency that oversees Fannie Mae and Freddie Mac doesn’t want to be renominated after his candidacy ran into strong Republican opposition, a White House official said Thursday.
President Barack Obama in November nominated North Carolina’s top banking regulator, Joseph Smith, to lead the Federal Housing Finance Agency. But Mr. Smith ran afoul of several Republicans, who voiced concerns about whether Mr. Smith would exert enough independence from the Obama administration.
Mr. Smith faced resistance from Sen. Richard Shelby (R., Ala.), who suggested he would be “a tool of the administration.” Mr. Shelby and other Republicans feared Mr. Smith would heighten pressure on Fannie and Freddie to slash mortgage balances for troubled homeowners.
…
banking regulator, Joseph Smith
Wouldn’t have anything to do with his testimony before congress would it?
“And banking officials in states hit by bank failures have also been outspoken in their criticism of the administration’s policy. “Federal policy has not treated the rest of the industry with the same expediency, creativity or fundamental fairness,” Joseph A. Smith Jr., the North Carolina commissioner of banks, testified in Congress earlier this month. “This has been a lost opportunity for the federal government to support community and regional banks and provide economic stimulus.”
ie the big banks don’t want him helping the little banks they hope to consume with tax payer money????
Like the Republicans wouldn’t put one of their own in……….so sick and tired of all this BS!
* POLITICS
* JANUARY 28, 2011
Report Details Wall Street Crisis
By CARRICK MOLLENKAMP, AARON LUCCHETTI and SERENA NG
Twelve of the 13 largest U.S. financial institutions “were at risk of failure” at the depth of the 2008 financial crisis, while at least 50 hedge funds tried to capitalize on it, according to a report released Thursday by a U.S. panel investigating how the financial system unraveled.
The report quantifies a huge run on the bank at Morgan Stanley, describes the alleged trading practices of a secretive hedge fund and tallies the number of such funds betting against U.S. homeowners.
The 545-page document paints a picture of a financial system let loose by lax regulation and careening out of control. Regulators now are hammering out a financial-regulatory overhaul, though some analysts say not enough has been done since to prevent a recurrence.
…
My take is MS, JPM, GS or their leaders used Hedge Funds to collapse the market while pressuring congress for TARP and to justify FED bailouts.
“The report quantifies a huge run on the bank at Morgan Stanley, describes the alleged trading practices of a secretive hedge fund and tallies the number of such funds betting against U.S. homeowners.”
These people/companies are financial terrorists, and should be dealt with accordingly. Instead, we have politicians and the Fed falling all over themselves to do whatever these terrorists want. Every Senatwhore, and Representative of the whoreHouse is responsible for the collapse. They learned nothing, and did nothing, and now we are right back to where we started, with dangerous trading practices which have run up commodities to the point of starving nations, and derailing our eCONomy once again. The United States of Wall St. RIP, America.
A regularly declining standard of living will encourage voters to perhaps vote for people who may start making real changes to promote economic justice.
One point I noticed during the last election was that there was virtually no one to vote for the Senate or House or local representatives who were not as bad as the current leaders.
The next election could allow an opening for a real third party movement if worthy 3rd party type (non-criminals, non-scumbags, non-business-shills) started organizing now.
Fannie Mae’s mistakes cost taxpayers countless billions, but its backers are unrepentant (and powerful)
By: Hans Bader 01/27/11 3:20 PM
Special to the Examiner
Fannie Mae and Freddie Mac were bailed out at a cost to taxpayers of between $148 billion and $363 billion. Their misconduct and incompetence was so obvious that even Treasury Secretary Geithner admits that “Fannie and Freddie were a core part of what went wrong” in the financial crisis. The two government-sponsored mortgage giants engaged in massive accounting fraud, and their allies in the Obama Administration have now spent $160 million in taxpayer money defending them against various charges.
Yet, their defenders, like the Washington Post’s Steven Pearlstein, are completely unrepentant. They continue to suggest that only right-wing ideologues could want to eliminate scandal-plagued Fannie and Freddie. Pearlstein, a knee-jerk liberal, long dismissed warnings from conservatives like the Wall Street Journal’s Paul Gigot about the dangers these mortgage giants posed to our financial system.
Incredibly, Pearlstein still believes that what’s good for Fannie and Freddie is good for America. In Sunday’s Washington Post, Pearlstein showed that he has learned nothing from the financial crisis. Pearlstein called House Republicans “free-market ideologues” for wanting to rein in the two companies. He praised “low-income-housing advocates and the Obama administration” for opposing this reform effort. He suggested that access to mortgages (and thus, homeownership) would suffer without Fannie and Freddie, ignoring the fact that homeownership rates are higher in countries like Chile and Italy that have nothing like Fannie or Freddie.
…
‘Fannie Mae and Freddie Mac were bailed out at a cost to taxpayers of between $148 billion and $363 billion’
Between? Can’t we get a little more precise when we’re talking about that many billions?
Anyhoo, $500 billion wouldn’t save these two companies.
Steve Perlstein is a business columnist for the Wasington Post. He is somewhat visible, but I wouldn’t call him powerful. Seriously, people who are really interested in business news don’t read the Post to get that news. Even if they live in DC. Business news is not a Post specialty, and everyone knows it.
I heard Pearlstein speak at the University of Arizona business school a while back. He gave a solid, but not exceptional, talk.
Personally, I would have rather heard from Gretchen Morgenson of the NYT or Joe Nocera, but they may have been beyond the UA’s budget.
Maybe in Chile and Italy, their housing is already affordable?
Economic Report
Jan. 27, 2011, 11:00 a.m. EST
Applications for jobless benefits jump 51,000
Part of spike attributed to poor winter weather in Southern states
By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — New applications for U.S. jobless benefits jumped by 51,000 to 454,000 last week, partly because poor weather caused administrative backlogs in four Southern states, the Labor Department reported Thursday.
…
400K+ is the new normal.
There was a wave of hope that it had dropped permanently below 400K late last year, but subsequent data releases have revealed such hope as ill founded.
Do they provide similar explanations (poor weather or a national holiday) in weeks when the numbers are down?
C’mon, Polly, that would harsh their mellow!
Who says US has UE problem. Read the article below to see that jobs here are being filled by H-1Bs:
Washington: Applications for US H-1B visas, the most sought after by Indian professionals for working in America, have reached the Congressional-mandated cap of 65,000 for the current fiscal with USCIS receiving an unusually high number of petitions in the first four weeks of this month.
In a statement, US Customs and Immigration Services (USCIS) announced that it has received a sufficient number of H-1B petitions to reach the statutory cap for fiscal year 2011.
Given that some 11,000 H-1B visas were still available at the end of 2010, USCIS received an unusually high number of applications in the first four weeks of this month.
The H-1B is a non-immigrant visa in the US which allows American companies to temporarily employ foreign workers in specialty occupations.
I think it’s a sham. It can’t be a coincidence that Obama mentioned letting in more H1-B’s and the cap magically being reached occur in the same week.
And there is another 20k set aside for foriegn college gaduates, so did that cap get reached?
But this is our “sputnik moment”!
Much like we reached the moon on the backs of german rocket scientists, we’re going to reach the third world on the backs of indian engineers!
It’s not like there’s any qualified -American- graduates out there who could do the same exact job sitting in the massive pool of laid off American engineers and otherwise specialized workers. Right?
“It’s not like there’s any qualified -American- graduates out there who could do the same exact job sitting in the massive pool of laid off American engineers and otherwise specialized workers. Right?”
Those folks have experience and command a higher salary.
Being unemployed for a -long- time has a funny effect on people’s willingness to work for lower salaries.
Of course, why bother when you have a constant supply of cheap engineers out of India who can only legally be here a few years and thus you don’t need to worry about them gaining seniority, moving up the pay scale ladder, or requiring any sort of retirement or long term benefits. Work them into the ground and when they’re burned out in a few years go ahead and trade them in for the 2013 model! Even better, they’ll do all of this for peanuts 80 hours a week and every weekend/holiday because it’s still a massive improvement from any wages they could make back home.
You know, call me crazy, but that sounds like roughly 65,000 jobs a year we could be giving to Americans if we shut off the tap.
Do we really need to have american engineers competing with a country that has more engineers than we have -people-? I worked near an intel plant and it absolutely boggled the mind how many indian engineers were employed there. It was like Intel off-shored the entire operation, only they did it by bringing the indian subcontinent work force here instead of moving the plant there.
You know what? Global economy is -hard- to understand. Maybe protectionism isn’t the worst policy…
Anyway, I’m going to go ahead and say America doesn’t need H-1B visas. With unemployment high and rising it’s -disgusting- to see the powers-that-be pushing for something so counterproductive. You want to put America to work? Stop farming the -actual- jobs on actual American soil out to the world!
I once lived in an apartment complex which was across the street from a finance company. I would say that at least half the apartment complex was filled with men from India. All of them had stay-at-home wives, most of them had children under that age of five, and many of them brought their parents too.
at least half the apartment complex was filled with men from India. All of them had stay-at-home wives, most of them had children under that age of five, and many of them brought their parents too ??
I have a good friend who is the facilities manager here for a fairly large apartment complex (300 + units)….The rent is very expensive even by our standards…$1800-$2200. for a two bedroom…I asked him one day how many Indian residents he had in the complex…He said roughly 80%…
Sure give them to Americans. Nobody is stopping you from doing that. Except that if you do, also have the decency to stop selling any and all American products in India.
You cannot have global trade and also keep jobs local. Nobody should put up with that. Please go ahead, take your jobs back but I would love to see companies like Coke, Kraft, P&G get kicked out of India. It would elate me even more, if a new gobal reserve currency is found. We do not need any more stinkin dollars.
It’s complicated brahma, clearly. I wasn’t shooting for a nerve but it looks like I hit one.
The situation between India and America is -very- heavily weighted in one direction. There’s no way around it. Kicking american companies and interests out of india would do massive and terrible damage to the everyday lives of the people there. I’m not saying by a longshot that America should pull out from the world economy - that would be a humanitarian disaster of EPIC proportions. I was simply mentioning that perhaps there doesn’t need to be an increase in skilled foreign workers on our soil when we have such a large number of unemployed home-grown skilled workers begging for a job.
India needs the US, just like China needs the US.
Someday, another country will likely take the role of the needed “FB” but for now it’s America. Whittle away american’s buying power, eliminate their jobs, drop their consumer confidence, and countries across the world feel it in -BIG- ways. India needs that american engineer making a decent wage and buying crap that he doesn’t really need and calling tech support to figure out how to operate.
Brahma:
There is a difference in Globalisation, balanced trade and what the US corporations are doing to US.
Why doesn’t India open up its agricultural sectors and others? They are trying to protect Indians first. Why can’t US do the same to protect their citizens. As far as Coke and Pepsi are concerned, they are doing business on needs and demand for Indians. They are not playing any rigged game like TCS/Infosys etc. by getting people on tourist visas and making them work.
P&G has full India operations. They hire all Indians and run by Indians. Same with all other major corporations as per Indian law. Why doesn’t India open it up like US.
If you don’t like American products, nobody is stopping you from not buying them. You cannot buy global products and yet have local jobs serving global corporations (call centers come to mind). It goes both ways.
I notice that you want to kick out Kraft and Coke. I notice that you DON’T want to kick out companies like MasterCard, H&R Block, Hewlett-Packard or Intel — you know, the American corporations that employ you.
@Martin: They have unfortunately opened up to the likes of Monsantos. Do you know how many Indian farmers died last year from being unable to pay their debt? 16000 in one state alone. Unless there are farmers dying here you have no case for being disadvantaged, in fact the fat farmers here are doing really well. Every country tries to protect its economy, so does America, its just that you have chosen to ignore it.
It was not too long ago China was blocked buying a large oil field here, so was Saudi when they wanted to buy a port. I mean you are printing and selling all these dollars for goods and services of the world and paying for it by printing even more dollars, how can you blame the world for being protective of their interests? What are the worlds people to do when YOU do not have the basic decency or honesty of actually defining money. What is the world supposed to do with all these dollars? wipe their ass?
It is completely dishonest, to pay for something by fiat when you completely control its issuance and the velocity of its creation. Your intention of doing business is built on a fake currency and you have the gall to ask others to open their systems up when you keep yours closed when they come to buy it with hard earned money which you created?
IMO, the world needs a new currency. Once that occurs, watch the US face reality. Take your jobs back, please, I would love to see the companies here that do business lose that market.
@oxide, I just did not mention them but the message is the same, I think I mentioned that you can take all your jobs back, and all your products back, its a great gift to us. It will allow companies that remain there to mature and grow stronger and bigger.
Also, it seems to me that I think you do not have a clue, do not travel much do you? India is not a tin pot country like those poodle European inbred nation friends of yours who fellate you. We are talented, brave and self sufficient, ha ha…what a joke…you think we are all employed by you just because 0.001% of our population are h1-b’s….let me wake you up a bit…we are not employed by you. Asians are your future employers and shall will keep you in business. Chindia has 2.5 billion put together how many people do yo have? 300 million? So we outnumber you by 8:1 as consumers never mind that the average age there is half of that here.
That is how the future will look like.
What sort of currency would you replace the dollar with?
You are talking about trading one faith based currency with another Brahma. It’s -all- phony. The only thing that gives it power is that people like you and virtually the entire planet accept dollars as payment for services or products.
In any event, America is still likely to be the world’s primary consumer well into the future. This role is going to continue to designate the us dollar as the primary method of purchase. The world needs a big healthy country buying -stuff-. It keeps the world turning and people fed. This is why America having a healthy and -hired- job force earning and spending is important. Take America out of the equation and who do you suggest should step up to take the reins? China?
Please go ahead, take your jobs back but I would love to see companies like Coke, Kraft, P&G get kicked out of India.
Dude! I like it. That would ROCK!
@Brahma:
If 16K farmers dies in India, do you want the same to happen in USA? Shouldn’t US be careful or just do charity. US is already handing out billions as aid to a lot of countries.
As regards to money printing, India also has been printing loads of money for the past 2-3 years and borrowing a lot. Their debt to GDP ratio is very high and I wouldn’t be surprised if they are another Greece soon.
@Martin, India also does print money but Indians pay 25% down before they buy a house and pay it from saved capital. We print money to accommodate a growing economy but it is not as reckless like here.
Also, the world does not need the US. Anyone in the world can take your role if they can pay for goods and services with something that they can print can they not? what makes you special?
Indias Debt to GDP ratio is lower than that of the US. Plus the debt is taken over there to build factories and meet demand NOT like here….to save wall st fat cats.
@RioAmericanInBrasil
Most of the people who complain here are people who have no idea how much US companies benefit from global trade, they are just mad they lost some jobs. Never mind that BRIC nations contribute 82% of revenue to some companies that keep their neighbors employed here. I think these fossils will face one hell of an adjustment and will be stunned at the way the worlds financial, industrial and political power centers shift to the east.
@oxide, I just did not mention them but the message is the same, I think I mentioned that you can take all your jobs back, and all your products back, its a great gift to us. It will allow companies that remain there to mature and grow stronger and bigger.
Actually, this is probably a good idea.
No problem take it all back. As I said we do not need any more of the stinkin dollars emitted from the wazoo. Lets see how many widgets you can sell, for your kind info, 82% of Intel’s sales are outside the US.
Meanwhile, since I find so many hate filled people here, stop all immigration as well. We would be glad to keep our talent and build great companies back home.
Also, get off you fat butts and think up a Energy policy for your sake, the world is fed up of your liar wars that you wage to feed your cheap oil addiction.
Finally, get used to 8-10% interest rates on 30 year fixed mortgages because if you do what I have stated above your credit will not come cheap.
“As regards to money printing, India also has been printing loads of money for the past 2-3 years and borrowing a lot. Their debt to GDP ratio is very high and I wouldn’t be surprised if they are another Greece soon.”
Martin, do you have a link for this? It would be very interesting if, after years of taking American jobs and filching American technology, India STILL had to borrow money.
@Oxide:
India’s debt in 2009 (78% of GDP):
http://asiancorrespondent.com/449/debt-by-country-map-and-indias-national-debt/
I’ll find a link for 2010 also and it has to be 85% or so.
All corporations/banks/institutions have been borrowing money aggressively in the past 2-3 years by floating foreign bonds. S&p/Fitch wanted to downgrade India last year but on assurances from their Finance Minister to reduce debt, the downgrade was postponed.
When the foreign investors take money out of that stock market, the very inflated housing market corrects, I think India is due for a decade of pain. Their party is getting over.
Most of the people who complain here are people who have no idea how much US companies benefit from global trade,
I don’t care about US companies benefiting from global trade because on the whole it has been a negative for Americans no matter how much our mulit-nationals are raking it in now. Our mulit-national companies don’t give a damn about America.
That’s why Wall Street’s rockin’ and Main Street’s sucking.
There would be a price to pay though. For sure. The price we would pay would be more expensive and less stuff.
Big f$%*&*n’ deal.
Finally, get used to 8-10% interest rates on 30 year fixed mortgages because if you do what I have stated above your credit will not come cheap.
No way. 10%? This ain’t the 80s. We are innovators. It’s what we do. Innovate. We innovate. We like innovating. Especially on Wall Street.
We’d just do some financial innovation. Make something up. And America is dynamic. Is India dynamic? I don’t hear that much but you bet America is dynamic.
We blow the doors off foreigners in this type of thing. Have you not noticed?
No doubt in the future you shall likely blow all right ;)….pardon the pun just could not resist…I am just trying to be funny.
It just that when the foreigners doors are blown they come out mad and the last time this happened your pathetic treasury secretary (hank p) had to run around the world begging for credit and had to convince them that he is ready to swap mbs for treasuries.
I am not saying that America is screwed up and cannot innovate. It is that there is no case for you to proudly strut around when all you have is a fake economy that maintains its erection from the weekly blue pills sold by the treasury to foreigners via its POMO program.
India is dynamic, see some of the links I posted earlier. More so what the world needs is a steady and gradual dynamism of the east. Not the fast food financial innovation of the west, perhaps you should try some slow cooked food built it keeps you healthy. Do you realize before you speak such nonsense that mark to market has been suspended since 2009? This is the entire reason for the rally, basically wall st banks can mark the assets to the cost price not the sell price. What kind of a stupid innovation is that? IMHO its retarded.
If you erect a protectionist blanket and isolate yourself believe me cost of your credit will hit 8-10% and there will be plenty of inflation. It will come to those levels because if you cease to trade globally, like you all propose, then you also have to base your capital cost structure on the local economy and 8-10% is what it will support. No foreign entities will have the necessary dollars, need to or shall want to buy your MBS bonds like in 2006, they know what happens if they do. FYI fact: The MBS is dead, the mortgage market is kept alive by Fan,Fre via the Fed, Treasury begging the foreigners for credit. Believe me, if you enter a protectionist environment, then high interest rates will be normal because you will need to balance new credit creation with your obligations (like Pensions, SS, Medicare, defence) and inflation.
brahma30,
Much of what you say is true. We know our economy is based primarily on BS. We know the dollar is crap (well, except for combo). We know our wars are BS.
Our corporations, with Federal blessing, have hollowed out this formerly great nation. This we also know.
We are advancing towards a day of reckoning. The American people are getting fed up. People are nearing their limit. The Republicrat charade will eventually come to an end.
What we don’t like is a guest in our country telling us what we already know.
It is not an obligation of the guest to speak the language that pleases you when you talk crap about them and disrespect them. Give respect and take respect. The world, its people, their aspirations and its resources are not yours alone.
And also, other countries know how to run their lives, we too do not like the advise or interference that people from here give to them. Look tonight its Mubarak getting some advise, being told what to do, as if he did not have a brain.
I think brahma30 has posted a lot of good stuff here, but what I don’t understand is if India is indeed so strong, self-reliant, and doesn’t need the U.S. at all or our fiat currency and paternalistic policies, then why the huge demand from India for U.S. goods, companies, jobs, etc?
I think there is a massive abuse of L-1 visas. H1Bs are only 65K but L1a are in hundreds of thousands and they have a vary fast track to Green card.
We do need some work visas say like 2000 or so for very special workers for NASA or some research etc. But it has become a way to get cheap labor by corporations. Send jobs overseas and get people on H1, L1 etc. to fill in the remaining jobs in US. What happens to workers in US? Who will consume to keep this 70% consumer based economy running.
Brahma:
You also need to realise that:
–India has a good stock market because of US. Now they are shorting stocks in India and it will take them down by 30%. India can’t do anything.
–India has a massive RE bubble. It will take India down for decades. Cost of apartments in Delhi/Mumbai are more than NY city. And the black money component in buying? That speaks of how well the country is run.
–India is a land of thieves with people stealing money from the country and depositing in Swiss banks. There is 1.5 trillion of stolen money. That speaks of character.
–If P&G leaves India, Indians can’t even brush their teeth as Colgate is US product. Same with soaps, condoms etc.
Most companies setup in India are due to UN laws for providing cheap sanitary items and medicines for Indians and other 3rd world countries.
Martin@ Life goes on with or without the US. It is just that your ego has been inflated by years of dominance. The reality is that India has achieved nuclear self sufficiency, has a million plus man army that actually knows how to fight (not like armies, where 25% of applicants are rejected, that play video games eating taco hell…er..bell), has a space program. India is filled with people who are industrious, talented. Trust me they know how to make toothpaste without your help. Perhaps, we can even fix that made in the US software, littered with bugs written by high school pass pot heads here who like to primp and wear suits to office.
Yes India has its thieves but they go out of business and get to go to jail if they lose their capital, unlike the thieves here who get bailouts, keep their jobs and are fellated by the politicians in high office despite the financial crisis, tells us a bit about the character of the people, politics and democracy here does it not?
If you’re doing so darned well, and if most Indians have as much contempt for America as you have, then “stop takin err jirbs!”
@Brahma:
Few points I would like to make—
–India as a civilization is very old and has major contribution to the world from the game of chess to trigonometry, number Zero, algebra etc. and even the first surgery in the world was done in India thousands of years back.
–But as of today, India doesn’t have innovation. In the top 100 companies of the world, India may have not even one co. Main reason is lack of Innovation.
–You are comparing top Indian talent to average US talent. The top US talent is busy in innovation and the result is all the big IT comapnies or engineering companies. Now don’t say that Indians come to US and make these companies innovate. There are some smart people, maybe 1-2% of Indians here but majority are very very average.
@Martin: India does not need the bullshit that keeps getting dished out in these forums. It pays its way and is not communist like China.
Do not confuse innovation with opportunity. After WW2 most of the infrastructure of other countries was bombed out leaving the US largely intact. It was this that you capitalized and built on. This attracted talent and talent bred innovation. Now you must compete for that talent and opportunity and it eats you up. Who is to say that the next great boom will not come from the east, do not underestimate. Its a game of numbers for every 1 person you educate India alone educates 4.5 sooner or later somethings going to click and a giant will awaken and inspire a billion people.
India is a 2 trillion economy and it did not grow that big based on the kindness of strangers. Innovation, execution, ideas and resource utilization have, will and shall thrive there.
Also how did you come to the conclusion that innovation is dead in India? Like I said you have not traveled much. Here check out these links, and spend the rest of the evening wiping some egg off your face.
http://en.wikipedia.org/wiki/Narayana_Hrudayalaya
http://en.wikipedia.org/wiki/Reliance_Industries
http://en.wikipedia.org/wiki/Murugappa_Channaveerappa_Modi
http://en.wikipedia.org/wiki/Tata_Nano
India is filled with people who are industrious, talented.
Sorry, I don’t like your music. It’s got a lot of notes that sound off key n stuff.
And our army is way tougher than yours because we fight too much and have a lot of gadgets and big stuff that blow up in crazy ways.
But I like that Indian bread thing that comes out on a stick from that underground oven.
Brahma:
You are not getting the point. You should not have to prove what India is doing and has done. It should be obvious when inventions are there. The world would know. The Reliance Group and all others you mentioned have collaborations with US or EU companies. They didn’t do any innovation/invention but copied western models. Most of the top people in India have degrees from the US even their former FM, bank CEOs and the PM. All the western models have been copied very fast. But no innovation.
Do you know if the inflation is not controlled in India soon, or the debt is not reigned in, it could be another Greece or Egypt. It is a ponzi game being played by borrowing large sums of money, massive stimulus, tripling salaries of Govt. employees and not raising interest rates aqequately to control inflation. It would all fall like a pack of cards. Just wait and watch the Sensex go to 15K level in th enext month and even lower as foreigners sell their holdings. Whatever you are saying is your overconfidence in that economy which is just another ponzi scheme, and not Organic growth that you and all Indians are thinking. And if RE bubble bursts, you are talking major pain ahead for them.
You are being overly dismissive by blanketing everything with your perceived judgment. To think that innovation is something that is divined only to some is silly.
What is not factored into your comparison is that India was largely closed to the rest of the world until about 1992. It is only after that the Indian economy opened up, its people had to fight to make its products world class and so they had plenty of catching up to do. It had to synchronize with the world economy in a short order and it had few world class industries.
However in just 20 years India has made a lot of progress and today count as one of the strongest nations on earth. We did not have the luxury of having an educated population and there are hundreds of other problems it had to overcome. It is a late comer to the world stage and cannot be compared with an advanced nation like the US, which developed over a longer time span. It will take time for India to catch up, but it will and dazzle. The next generations of innovators, leaders and game changers will likely be brown.
FYI: National debt levels, from the CIA’s World Factbook:
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html
I work in a large multinational corporation. There are Indians with H1Bs and green cards and citizens, working here in the US. Sometimes the US citizens go to India to manage projects there. One of my coworkers is H1B - great guy, generous. He often brings me lunch. If he lost his H1B, he would go back to India and work there. Is it better to have him in this country paying taxes here?
There are also people I work with from France, Israel, Canada, Italy, Hungary, Ireland, Malaysia, Thailand, Columbia, Venezuela, and China. All of them are very smart and wonderful to work with. They bring the world to me and enrich my life.
From the company’s perspective, it is beneficial for its foreign employees to have a path to leadership. It is beneficial to have perspectives from all over the world shaping the business.
From our country’s perspective, the friendships that I make with my coworkers from around the world builds bridges. When they think of America, they will remember my smiling face and bad jokes.
Outsourcing is a two edged sword and I realize I could become a victim of it at anytime. I have wrestled with how to counsel my children about their future. I have known for years that my competition is some young programmer in some low cost country - China, Romania, India, Russia. If I want to keep working, I have to prove every day that my work is worthwhile and that I can do it better than anyone else. I have to prove that I am worth what they are paying me.
And then there is automation. All of us worldwide face this challenge. And part of the challenge is how to provide meaningful, life-sustaining work for average people when their jobs are automated.
Perhaps the answer to unemployment is 6 hour work days and 30 hour work weeks.
My last job an H1-b sat across from me. Really nice guy from Hong Kong(and he only spoke British). He was a financial analyst with a BA from UNC.
And I thought getting a business degree was quite popular these days. Never realized there was a shortage.
Why would anyone think that having over a billion people in a
Country is a good thing .
Yes, lets brag about how many billions of people live in our country! Actually, somebody needs to show a little restraint and “Just Say No.”
Whew, you got that right, Housing Wizard. I keep seeing this “we’re so great because we reproduce like there’s no tomorrow” argument espoused by folks from south of the border, in the Middle East, China, India, etc.
But if yer gonna breed ‘em, better be able to feed ‘em. Can’t have a commodity crisis without a massive population bomb to push it.
It’s sad, but this is the dreary end result of globalization.
Look , I’m sure that India has come a long way ,but I don’t compare myself to India . I wish any Country all the best , but if a Country has a population problem that should be blamed for a lot of ills ,not America .
The SF Chronicle discusses the past year in BA real estate.
With these selective– or down right gun-shy– buyers and equally unsure sellers, prices on homes for sale have drifted down. “After November prices were mixed, December prices declined across four of the six main Bay Area counties.”
http://www.sfgate.com/cgi-bin/blogs/ontheblock/detail?entry_id=81769
What’s interesting is that the richest counties - SF, Marin, and San Mateo - have been hit the most in terms of price.
This is the pattern we’re seeing here in San Diego (and the parts of L.A. that I’m watching), too.
Of course, that would be expected since the PTB temporarily froze the market as the price declines were beginning to roll into the high-mid to higher-end areas.
The lower end areas were pretty much allowed to fall without much govt intervention (remember, subprime was contained
). It’s the higher-end that now has to fall to where it belongs without the govt’s life-support.
“It’s the higher-end that now has to fall to where it belongs without the govt’s life-support.”
THere will be much wailing and gnashing of teeth in Rancho Bernardo and Poway when this happens.
I don’t know; the people I know around here who have recently made a housing market transaction seem downright pleased. (Maybe it’s because they are buying, not selling, foreclosure homes or short sales…)
I was thinking of all the smug RB’ers and Poway heads who think their communities are somehow “special” and who love to brag about how much their property is “worth”.
The Brits, having kept the GBP, are able to take a more detatched view of present day Euro woes.
On current form, Greece will be paying nearly 10 per cent of its GDP in interest by 2015. Portugal’s 10-year borrowing costs are close to an unsustainable 7 per cent and would be even higher were it not for market manipulation by the European Central Bank. And Spain is sitting on 700,000 unsold homes, 20 per cent unemployment and a 33 per cent deterioration in competitiveness against Germany since the euro was formed.
And I like the British view of the structure of the Euro.
As long as Greece remains locked in a currency that is deutsche mark with only a hint of garlic, its economy cannot recover.
http://www.telegraph.co.uk/finance/comment/jeffrandall/8284235/Buy-euros-the-single-currency-is-finished.html
“…only a hint of garlic…”
That’s all it takes for my wife to refuse to sleep with me.
Is she a vampire??
Great news for buyers of gold!
The price continues its slide, which means you get to buy more of the precious for the same amount of money.
Wait until the next panic in the financial markets. Then prices of commodities tend to drop sharply b/c people have to sell what they can, not necessarily what they want.
Remember when spot oil dropped from $147 to $36? Funny thing was the 6 month contract never got below $55. Gold got down to around $700. Those opportunities tend to be short lived. I waited a few days too long and caught it on the way back up at $770.
Pay close attention to what is happening in Japan, a glimpse into our own future. Debt/GDP at 200+%, deficits around 10% GDP and a huge cohort nearing retirement. They have two options, print or default. One is good for gold, the other is good for the Yen. Oh yeah, the Yen in your bank/insurance policy are those that will be defaulted on, only those under your matress will survive. We will see…
Mike, if you don’t mind my asking, how did you buy your gold? A gold ETF, gold coins from a dealer, etc etc?
Coins. Either at coins shows or through a reputable dealer like NWT-Mint.
Great news for buyers of gold!
I think you were more correct when you said stuff like that when gold was $600, $700, $800 etc, an ounce.
It will be great news for buyers if it goes back down that far…
Alas, I fear the Fed is bound and determined to keep the value of the dollar down to support the recovery, so that is extremely unlikely unless global fear spikes to an unexpectedly high level.
Another bubble that hasn’t popped yet: student loans. It’s a long article, but I highly recommend reading it.
————————
Is Law School a Losing Game?
IF there is ever a class in how to remain calm while trapped beneath $250,000 in loans, Michael Wallerstein ought to teach it.
Here he is, sitting one afternoon at a restaurant on the Upper East Side of Manhattan, a tall, sandy-haired, 27-year-old radiating a kind of surfer-dude serenity. His secret, if that’s the right word, is to pretty much ignore all the calls and letters that he receives every day from the dozen or so creditors now hounding him for cash.
“And I don’t open the e-mail alerts with my credit score,” he adds. “I can’t look at my credit score any more.”
Tuition at even mediocre law schools can cost up to $43,000 a year. Those huge lecture-hall classes — remember “The Paper Chase”? — keep teaching costs down. There are no labs or expensive equipment to maintain. So much money flows into law schools that law professors are among the highest paid in academia, and law schools that are part of universities often subsidize the money-losing fields of higher education.
WHEN he started in 2006, Michael Wallerstein knew little about the Thomas Jefferson School of Law, other than that it was in San Diego, which seemed like a fine place to spend three years.
“I looked at schools in Pennsylvania and Long Island,” he says, “but I thought, why not go somewhere I’ll enjoy?”
He remembers little about the promotional materials the Thomas Jefferson school sent when he applied in 2006, other than a pamphlet with lots of promising numbers. That was before the economy crumbled, but the school’s postgraduate data still looks fabulous, particularly given its spot in the fourth and bottom tier of U.S. News’s rankings. The most recent survey says 92 percent of Thomas Jefferson grads were employed nine months after they earned their degrees.
WHEN Mr. Wallerstein started at Thomas Jefferson, he was in no mood for austerity. He borrowed so much that before the start of his first semester he nearly put a down payment on a $350,000 two-bedroom, two-bath condo, figuring that the investment would earn a profit by the time he graduated. He was ready to ink the deal until a rep at the mortgage giant Countrywide asked if his employer at the time — a trade magazine publisher in New Jersey — would write a letter falsely stating that he was moving to San Diego for work.
“We were on a three-way call with my real estate agent and I said I didn’t feel comfortable with that,” he says. “The Countrywide guy chuckled and said, ‘Everyone lies on their mortgage application.’ ”
Instead, Mr. Wallerstein rented a spacious apartment. He also spent a month studying in the South of France and a month in Prague — all on borrowed money. There were cost-of-living loans, and tuition of about $33,000 a year. Later came a $15,000 loan to cover months of studying for the bar.
Today, his best guess is that he should be sending $2,000 to $3,000 a month in total, to lenders that include Wells Fargo, Citibank and Sallie Mae.
“There are a bunch of others,” he says. “I’m not really good at keeping records.”
Mr. Wallerstein didn’t know it at the time, but Thomas Jefferson leads the nation’s law schools in at least one category: 95 percent of students graduate with debt, the highest rate in the U.S. News rankings.
Beth Kransberger, associate dean of student affairs at Thomas Jefferson, stands by that figure, noting that it includes 25 percent of those graduates who could not be located, as well as anyone who went on to other graduate studies — all perfectly kosher under the guidelines.
Certain definitions in the surveys seem open to abuse. A person is employed after nine months, for instance, if he or she is working on Feb. 15. This is the most competitive category — it counts for about one-seventh of the U.S. News ranking — and in the upper echelons, it’s not unusual to see claims of 99 percent and, in a handful of cases, 100 percent employment rates at nine months.
A number of law schools hire their own graduates, some in hourly temp jobs that, as it turns out, coincide with the magical date. Last year, for instance, Georgetown Law sent an e-mail to alums who were “still seeking employment.” It announced three newly created jobs in admissions, paying $20 an hour. The jobs just happened to start on Feb. 1 and lasted six weeks.
When I was 15, I made more than $20/hr. mowing lawns.
Sorry Muggy, that job has been off-shored, sorta.
I haven’t seen quite as many sunrises as many of the HBB’ers, but I remember my quest to own a Nintendo Entertainment System back in the mid 80’s quite fondly.
I had 4 younger sisters (we were fairly poor) and my family didn’t do presents at christmas, so my dad told me if I wanted some “toy” I was going to have to pay for it myself.
Every day, I dragged some lawn tools down the street seeking out a yard to clean up for money. I wheed whacked, mowed, weeded, and slowly but surely the money piled up.
My biggest job however, was a man who offered me 40$ to rake up the pine needles in his yard. Little did I know it was a HUGE back yard with -inches upon inches- of pine needles piled up from years of neglect. I worked all morning and had barely even scratched the surface, 12 bags of needles with god-only-knows how many left. I realized I’d bitten off more than I could chew.
I decided I would quit. I went home around lunch time with blistered hands and teary eyes. I sat down and talked with my father, explaining my predicament. Now this is where the average father would teach his son the meaning of a days hard work, forcing him to finish that yard as promised.
Instead, my father put me in the truck and drove to the nearest Hispanic part of town. A few “rastrillo de jardín diez dólares” later and I spent the next few hours sitting on a lawn chair supervising two able bodied mexican nationals as they finished the job. I pocketed 20$ for my trouble.
My grandfather spent a life in construction and used to have a saying. “Learn to use the nailgun. It pays better and it’s easier than digging the god damned ditch.”
I’m not saying there’s a good lesson here, but I enjoyed the hell out of my Nintendo…
My grandfather spent a life in construction and used to have a saying. “Learn to use the nailgun. It pays better and it’s easier than digging the god damned ditch.”
Learn to use the trencher too. That thing makes ditch-digging go a lot faster.
I had little confab with my sis after the SOTU stand-up routine. She had an interesting point about the stress on “education”. She thinks that’s the next area ripe for massive securitization and interestingly, it’s the one debt you can’t discharge or walk away from. Education bubble, here we come!
I don’t know if we’re allowed to post youtube clips on here, if not, I apologize, Ben. However, George Carlin says it all about education and TPTB. Caution: a bit of profanity ahead.
http://www.youtube.com/watch?v=d5Ujn2UxTcY
“…it’s the one debt you can’t discharge or walk away from.”
How about relocating to another country? I would think that makes it pretty difficult for your creditors to come after you. In Germany & Netherlands they even pay for your housing, utility and medical bills if you’re a refugee.
That’s the ticket, a student loan refugee, yeah!
Get an education in some internationally useful field (science, engineering come to mind), borrow heavily and then bail. That’s what I would do if I was a recent high school grad and I would feel damn good about it too. This entire education for profit scheme is a disgrace.
Relocating to the Netherlands is very difficult. Their immigration system is one of the toughest in Europe.
Being born in the Netherlands doesn’t make you a Dutch citizen unless your mom or dad is a Dutch citizen.
Marrying a Dutch citizen doesn’t make you eligible for Dutch citizenship like in the US
Still, millions of Middle Easterners, Africans and assorted other “refugees” from around the world seemed to have gotten away with leeching on their welfare system. It can’t be that hard.
Anyway, my point was not leeching of somebody else, it was getting an education without being a debt slave for life, like the unfortunate Mr. Wallerstein. There’re plenty of other countries that some masters degree level engineer could find gainful employment while leaving SALLIE MAE in the dust. Those willing to investigate, relocate and acquire some foreign language skills could easily pull it off. Brasil would be one of my favorites.
I do not think they’re in the country legally. And their children will never be Dutch citizens…
“Still, millions of Middle Easterners, Africans and assorted other “refugees” from around the world seemed to have gotten away with leeching on their welfare system. ”
Where is your evidence that they are, of course, people of color, as opposed to OTHER EUROPEANS!!!??
He saw them - ?
I spend a lot of time in London, Amsterdam and Berlin. In some areas of the city you hardly see any “native” population anymore. I will try to post a link that deals with Berlin specifically. From talking to locals and following local politics I know that many of those foreigners receive some kind of assistance, usually free housing and health care.
“Of the approximately 160,000 Muslim foreigners in Berlin, about 73% are of Turkish background, 7% from Bosnia-Herzegovina, and 4% are from Lebanon. The total foreign population of Berlin is estimated at 466,518.
…
The number of foreign welfare recipients stood at 27% of the entire city population at the end of 2004 (SFS 2005; in OSI 64). The share of households receiving housing benefits is about 14.6%, compared to rates of to 22.6 percent in the Neukölln district, and 18.9% in the Kreuzberg district.[[SFS 2005, in OSI 64.]]”
Foreigners in Berlin
http://www.euro-islam.info/country-profiles/city-profiles/berlin/
welfare fraud in the EU
http://www.independent.ie/national-news/new-crackdown-on-welfare-fraud-may-violate-eu-law-1451312.html
Believe me, people that are out to defraud the EU welfare system have it easy. I know several personally….well yes, they are friends of mine. It’s a lot easier to score some gubermint cheese in the EU versus the US.
“native” population…Hmm?? So people who are not White are not natives!?! Again sir, lets stop with the belief that immigrant = person of color. YOU and I both know that a large number of immigrants to Britian, Germany, and France are other WHITES from Eastern and Southern Europe.
http://www.guardian.co.uk/uk/2010/jan/17/eastern-european-immigration-hits-wages
http://en.wikipedia.org/wiki/Demographics_of_France#Today
I also noticed that your quote “The number of foreign welfare recipients stood at 27% of the entire city population at the end of 2004 (SFS 2005; in OSI 64).” FAILS to say WHERE these immigrants are from, and the less intelligent and more bigoted viewers of this board, would naturally assume that they are muslim (like muslims from Bosina AREN’T WHITE, lol) or a person of color.
None of your links provide any proof as well.
The Turkish were invited to Germany after WWII.
Look MK, the only person on this board that mentions WHITES and COLORS are YOU. In addition is it very annoying if someone needs to CAPITALIZE to get their point across. Moron!
WHAT CHOO SAY?
Excellent posts, Mike in Miami.
My family is from Austria, and they have been complaining about the “Turkish invasion” for a long time, now.
Funny, because decades ago, they were putting down Americans for being “racist” and “bigoted” toward the Mexicans in the U.S. (and the Afro-Americans). Now, the shoe is on the other foot, and and they seem even less tollerant that we Americans are!
But would you be able to get your credentials so?
When I was in college I had a part time job at a library… the guy who ran the page staff was a refugee from Argentina. He had a couple of PhD’s, but was unable to teach/practice because they wouldn’t document/confirm his education.
In engineering that is usually much easier than in medical or laws. You need to acquire a skill set that is easily marketable in other countries. US divorce law or US criminal would be entirely useless. Having a CSC degree and ORALCE/CISCO/MSFT certifications on the other and opens up a world of opportunity.
But you could learn those skills without a degree, too.
“it was getting an education without being a debt slave for life, like the unfortunate Mr. Wallerstein.”
UNFORTUNATE???? Gee, more of this poor me victimization entitlement!
Don’t you know - he was forced, against his will, to go to law school and to apply for all of those loans! Victim!!
“There are only two things I can’t stand in this world. People who are intolerant of other people’s cultures… and the Dutch.” - Nigel Powers
“The Countrywide guy chuckled and said ‘Everyone lies on their mortgage application’.”
A couple of points to consider from this statement:
1. The Countrywide guy revealed himself as being a crook. Those who willingly deal with crooks shouldn’t be surprised if they get hosed.
2. If you lie on your mortgage application then you are commiting fraud. Commiting fraud puts you in a bad and weak position if it ever comes down to disputing the terms of the loan you willingly signed up for.
Combo…
#2 is universal. If you’re a part of a transaction and you misrepresent anything, you committing fraud. Exhibit A? A realtard misrepresenting the value of a house.
“Exhibit A? A realtard misrepresenting the value of a house.”
The determinination of the value of a house - as is the determination of the value of many things - is often a matter of opinion. The information that goes on a mortgage application is a bit more concrete than opinion.
For example: Either the future FB earns as much as he says he does, or he doesn’t.
Combo-pus jumps in to once again place all blame on the FB, none on the RE financial industry.
Keep Kickin’ the Kochtoganda! Keep us fair and balanced!
Lol.
Come on, guys — in all fairness, it took lying on all sides to create this housing market clusterfork.
“… it took lying on all side to create this housing market clusterfork.”
Very true, but of all the liars involved the ones who had the most to lose from the lies were the FBs.
Many of the FBs KNEW the game was rigged against them but they chose to play anyway.
It wasn’t lying realtor or the lying loan broker or the lying appraiser that commited himself to fraud when the fraudulant loan documents were signed, it was the stupid lying FB that signed the documents that committed fraud.
HIS signiture is the one that appeared on the loan documents. Everyone else involved gets a chunk of money for his signature while he gets to become an FB.
Many of the FBs KNEW the game was rigged against them but they chose to play anyway.
And many of the banksters knew the game was rigged and kept playing anyway. So they are all to blame (as I have always said). But of course the ‘professionals’ in the game bear more blame than the general public- that’s the nature of being a ‘professional’.
Some otherwise intelligent seeming people can’t see past the FB’s culpability. But I guess it’s hard to perceive some things when your paycheck depends on you not perceiving them. Or when daddy wore that ‘welfare queen’ rut in your head so nice and deep that everything falls in it.
“And many of the banksters knew the game was rigged but kept playing anyway.”
Yeah because the gamed was rigged in the bankster’s favor.
But the game was not rigged in the FBs favor but they still chose to play.
Give it a rest combo. When you have a fiduciary obligation to a transaction and you deliberately or otherwise knowingly misrepresent the value of an asset, you’ve committed fraud. I’m not sympathetic to anyone who speculated in the housing debacle but giving a free pass to the realtWhores, MortgageScum and appraiser maggots is absolutely dishonest.
It’s not my job to look in the rearview mirror. I don’t care about the problem, but I’m fed up with system delaying the solution. And the solution is lower prices. Much lower prices.
‘many of the banksters knew the game was rigged and kept playing anyway’
I’ve watched you guys go around the bushes on this topic. I’m gonna add a different angle. I knew the people making the film we met in Las Vegas were going to ask about housing bubble blame, so I thought a good deal about it. I had decided on three groups; the Federal Reserve, Wall Street and Congress. This was more of ‘who could have stopped the bubble from getting so bad.’
What I then got to was why these groups failed to do the right things. I eventually concluded that it was a lack of accountability. Think about it; nobody gets fired at the Fed for screwing up. Wall Street operates under the TBTF idea. Congress members get re-elected almost by default. How then could we expect that they give a damn about the consequences of their actions?
Ultimately, who is responsible for this state of affairs? It’s all of us; we let these people in power set this situation up and perpetuate it. If we want some justice, and an end to this rigged financial game, as you put it, we citizens have got to grow a backbone and demand it.
“It’s all of us;”
True. We’re a democracy, we are all responsible. But you can say that about everything. At some point you’ve got to narrow down the blame to where we can do something about it, unless you just want to shrug your shoulders and say ‘c’est la vie’.
To me, that ‘choke point’ is the banksters- they abused their positions of privilege, they made vast fortunes by doing so, they destroyed our economy by doing so, they have escaped almost all culpability thus far, and they stand as an example that this sort of thing can be done not only without repercussion, but also with great reward. No justice has been visited upon them.
The FBs are a mix of gullible fools, greedy schemers, and yes, intelligent, well-meaning people caught up in a huge economic event beyond their control. Most will get a reasonable punishment through bankruptcies, foreclosures, ruined credit reports, and the stress and upheavals such things cause. That’s a reasonable amount of justice, I believe.
I enjoy making fun of the FBs as much as the next guy, but the desire some seem to have to use the FBs’ stupidity as some sort of shield for the banksters’ culpability is incomprehensible to me. And I think it should be called out, as it’s not inconceivable that it’s a paid-for endeavor, funded by the banksters/kochtopus, since its internal logic is so weak, and its ultimate goal (immunity for the banksters and their ill-gotten gains) is so transparent and unpopular to all but the banksters themselves.
Immunity for the banksters, with all blame heaped on the FBs. Who would desire such a thing other than the banksters themselves?
we citizens have got to grow a backbone and demand it.
I seem to recall that citizens did just that, back in 2008 when they worked VERY hard to elect Obama. But even citizens with backbone simply cannot overcome the entrenched money machine which is rich enough to buy entire TV networks, entire blocks of the AM radio dial, and entire city blocks packed with smooth-voiced fork-tongued lobbyists. The truth is usually gray and needs some explanation; which is no match for the Rush Limbaughs of the world who reduce their deceptions to bumper-sticker sound bytes for the mass consumption of those dittoheads who are enamored of the black-and-white world of tv shoot-em-up shows, and those who blindly take government services while railing again government at town hall meetings.
There is no winning this game, not swiftly. Hearts and minds are measured in generations.
‘At some point you’ve got to narrow down the blame’
I disagree. With a failure this large, that took so many years to build with so many institutions involved, we should broaden the picture. If I’m correct and these three groups could have stopped this mania from becoming so damaging, who makes them accountable? We have congress, and the regulators they oversee. The quasi-governmental Fed, the quasi-governmental GSEs. We have Wall Street - so entrenched in the DC power system, that they revolve in and out of the highest positions so regularly that we hardly notice how over-represented they are anymore.
If this is largely a failure of political accountability, we must look at the failure of the two parties. Greenspan, after all, was first appointed by Reagan! He sat there for 18 years, through multiple administrations, doing the same song and dance, practically worshiped the entire time. Even now, we watch these people make political hay out of the mess they created. How can we not widen the scope of ‘blame’, especially if the aim is to fix things?
It will be history that decides who was responsible on an individual level; not some partisan commission or posters on a blog. What I’m saying is this thing was too big for the public to shrug off the unaccountable, systemic corruption we allowed to develop.
If we want some justice we citizens have got to grow a backbone and demand it ??
I agree….Maybe Cairo is showing us the way..
Ultimately, who is responsible for this state of affairs? It’s all of us; we let these people in power set this situation up and perpetuate it. If we want some justice, and an end to this rigged financial game, as you put it, we citizens have got to grow a backbone and demand it.
Yes but to demand it we have to blame the banks and Wall Street as they deserve. TPTB want to deflect blame only onto the FB’s which distracts from the real reason for the bubble.
Banks, WS and Gov/Fed were the main cause by far. FB’s not so much.
I just don’t think the banksters should get a mulligan while we reorganize our entire political system to make sure their crimes aren’t repeatable. Let’s bust them now, and then build a new system. Their punishment will serve as a good example, and investigating their activities will give us a better idea of what we should seek to avoid as we build our new order.
Such a tough situation to call really.
I can only speak to my own experience, but I watched a -lot- of used car salespeople jump on the mortgage broker bandwagon and start schlepping home loans. These were by and large not the “good honest people” that you’d want handling such a big responsibility. Finance in the car business is -built- on the GRAY AREA.
UCS: “Ok, so what is your gross monthly income?”
FB: “Um, I make like, I think 1200$ a month…”
UCS: “Well how much does it show on your pay stub?”
FB: “Um, I don’t get pay stubs.”
UCS: “What is the name of the company you work for?”
FB: “Um, I work for myself, no company name…”
UCS: “Ok, we’re just going to put you down here as assistant manager of Speedy Cleaners making 3200$/month.”
While the FB was certainly a willing participant in much of this, I am -dead- certain that there was a massive amount of fraud committed that they had no idea was taking place. A “slip of the pen” makes 1100$ monthly gross income into 11,100, and if nobody’s actually checking…..
Reminds me of Joe Florek Volkswagen Audi in flagstaff back in the early 2000’s. MANY things contributed to the FBI investigation that eventually shut the place down (after a YEAR of doing this crap), but the biggest one of all was the loan fraud.
Back then, a finance manager could do what they called “FAST LANE” a customer through the finance process if the credit report was good enough. Essentially this meant local banks and credit unions would accept a packaged deal with a dealership-supplied copy of the credit report, file it away, and pay the dealership. At no point did the bank actually verify the credit report or pull their own copy, they simply looked at the score in the packet, and stamped it approved.
What they didn’t know, was the clever finance managers at joe florek were manufacturing credit reports, literally printing them off the computer with fake information and the customer’s name/information typed in, and a nice high 700+ fico listed. The dealership was advertising on the navajo nation that -ANYONE- was approved despite any negative history, repos, anything. They sold a ridiculous number of cars, fueled partially by the navajo people’s mentality (they have a strange culture that doesn’t ask many questions and is very easily sold regardless of the inability to repay).
Anyway, this went on for a good while before some sharp-eyed credit union employee noticed an application come across her desk in a name she had -just- seen and declined due to really really terrible credit. Only, in this instance, it was packaged as a fast lane and had a rocket-score. A few hours pulling files and seeing the scope of this systemic fraud and the FBI was down there carting people and computers out of the buildings at the volkswagen shop. The finance managers there were prohibited from working in the automotive finance industry.
Two of them ended up in mortgages.
What I’m saying here is unscrupulous people absolutely helped make this whole thing happen. The FB just wanted a home - some because it seemed like “easy money”, some because they wanted to own a piece of the american dream. With prices through the moon and the impossibility of financing without fibbing, it’s no surprise that they went along with these mortgage brokers who massaged the figures.
Blame both banks and FB’s! This back anf forth between those who only want to blame the banksters and those who only want to blame the buyers is getting stale. This is not an either or! Banksters have more general blame, FBs have more individual blame, but people on every angle of these transactions share in the blame.
I tend to be somewhere in the middle on most of what’s discussed on this blog, but not here. We have to stop choosing between Republicans and Democrats! Electing Obama in 2008 wasn’t voting for change just like electing a bunch of Republicans in November wasn’t voting for change. If you want change, vote 3rd party or independent.
And I absolutely refuse to join the debate over which party is better/worse. That’s like arguing over whether the AZ Cardinals or the Detroit Lions are the worst NFL franchises. Who cares?!? They both suck!
You can’t complain about how corrupt politicians are and at the same time continue to vote for candidates backed by the same 2 parties year after year. Absolutely nothing will change if we continue doing that.
I generally hear 2 main reasons for not voting 3rd party:
In the words of Monty Brewster, “A vote for me is a vote for none of the above!” If we’re ever going to have a chance of truly changing things in this country, we need more people to start voting for none of the above.
The Cards were pretty good for a few years there with Warner/Fitz/Boldin!
Yeah, and Ron Paul is a good Republican, but they still suck!
You all seem to think that FBs have never lied on their loans. Its always been going on. It was going on in the 80s, the 90s, etc. The difference was — it wasn’t on the scale of this past decade.
You just paid someone to fudge your tax returns.
I’m reminded of the “headshot” discussion from the TV show “The Wire.” And I didn’t lie on my mortgage application. I was honest about my income (moderate, but higher than many of my prospective neighbors) , where my downpayment was comming from (savings and a loan secured by my 401(k) balance) and other debts (none).
The following is something to consider in the debate on blame :
(1)Bankers abandoned long term time-tested risk models in favor
of high risk mortgages ,yet rated them AAA as if the risk was the same .
This is the same as error or a flawed model . If you did that in engineering a bridge would fall down .
(2) Money Middle men threw to much money into the market ,so
mis-allocations would take place . One of the functions of Money
Men are to allocate resources so as to not incur loss ,rather than ‘
just pass faulty investment to their clients . No talk about how epic this
loss was for their clients if they ended up the bag-holders .So just
from the standpoint of acceptable losses from a Industry ,these
losses are unheard of in real estate lending .It would be like a car
company having 80 % of their cars blow up .
(3) Government had a hands-off policy and let these Criminal money men regulate themselves . Because they were passing off
the risk to a third party and breaching fiduciary ,they felt they
couldn’t loose ,just like a common criminal thinks .
The entire chain of professionals in the RE loan industry committed
fraud from the bottom all the way to the top to create the
ability for borrowers to get credit beyond their limits by loan fraud
and appraisers were black balled if they didn’t come in with
hit the mark appraisals . This is crime ..pure and simple.
The foregoing a a representation of a Ponzi scheme and a crime
lending market in which the borrowers were able to obtain funds
by fraud for their investment in a mania that was false in appraisal
values because of the lending crimes and security(MBS’s) mis-marketing .
At some point in the housing bubble it became a big lending Crime
Cartel that wasn’t being stopped ,only encouraged . To add insult to injury ,the Money men began betting that it would fail,only to make more money on the contraction based on their insider knowledge . The FB and the loan investor get stuck holding the bag and the Money Middle men
walk away with a fortune ,also on the Credit Default Swap bet .
The FB’s were the Mark ,the Loan investor funds were the Mark .
If you look at if from the standpoint of a confidence game and the Market Makers were also spending millions to rah rah cheer-lead real estate to keep the Ponzi -scheme going ,also to cover their bets or pump and dump stock ,it becomes apparent by their acts that these Market Creators take the money and run and leave
the Marks with the ruins saying “We didn’t see it coming “.
If you don’t look at this whole situation from the standpoint of
a money making scheme that breached fiduciary and created
destruction and loss of epic historic loss ,than your not looking at
it for what it was . So,viewing in in that light the responsibility
goes to the Creators and the ones that made away with the heist .
I’m also sure that the Money Men Crime Cartel didn’t think that
FB;s were going to walk to the degree they did ,or that it would
crash to this degree ,but criminals never think about the degree
that their damage might extend ,they only think about the money they made . Don’t mess with real estate ,it’s where people live .
The arrogance and criminal mentality of these jerks should bar
them from ever being in a financial transaction again ,after they serve some serious jail time and have their personal wealth
stripped . Or maybe we should sentence them to years serving
at a homeless shelter making 5 bucks a day .
The money Changers had no right to do what they did and the
Government is either incompetent or so bribed that they are useless ,in fact they are pawns for these fake market creators .
I blame them and they took the money and ran and their Casinos are still alive and kicking and they must be busted . Corruption that isn’t busted seeps its way into other areas .
Sure ,if the FB’s had rejected this Ponzi-scheme by 2003 things would of been a lot better but when your brainwashed by “real estate always goes up” and,” buy now or be priced out forever .”
‘let real estate give you the lifestyle you deserve in tax free income every 2 years,’ the people thought that real estate was a value they could count on ,or at least something they could sell
for the price they paid for it . It’s the power of mass marketing
by Criminals . The FB’s that are being opportunistic now are
sometimes just desperate people looking for desperate solutions /
and of course there are some that are just trying to get something for nothing . But the responsibility goes back to professionals that
should of been fiduciary .
Nothing will change however until the lobbying system is changed
and the people can get representation in Congress . Until than the
game is rigged and the culprits will continue their raiding and fleecing ,and that includes Corporations and Monopolies .
Sorry for the long rant ,but I use to know how it use to be in the lending market and this breach of fiduciary is just not
acceptable .They have to be stopped ,that;s all I know .
Should student loans be used to study overseas…
——
“Instead, Mr. Wallerstein rented a spacious apartment. He also spent a month studying in the South of France and a month in Prague — all on borrowed money. There were cost-of-living loans, and tuition of about $33,000 a year. Later came a $15,000 loan to cover months of studying for the bar.”
Wallerstein’s story has been kicked around the net for weeks now. He is no victim, but rather an especially dense douchebag. Just about like all the other victims we’ve seen.
This guy is a complete idiot. I worked full-time and went to law school at night (good public, inexpensive! school), studied for the Bar at night, etc. As did hundreds of other folks at my school when I was there. “Months” of studying for the bar exam? Multiple international studies during law school? And he wonders why no one wants to hire him?
So much money flows into law schools that law professors are among the highest paid in academia
There’s another reason law professors make so much - the ABA demands it!
One factor in granting ABA accredidation to a law school is a minimum salary for law professors - and IIRC it’s quite high. You cannot open a “budget tuition” law school with faculty earning only $100K. The ABA wouldn’t grant accredidation to such a school.
Tuition at even mediocre law schools can cost up to $43,000 a year. Those huge lecture-hall classes — remember “The Paper Chase”? — keep teaching costs down. There are no labs or expensive equipment to maintain. So much money flows into law schools
+10 Polly! Weeks ago, polly nailed it that law schools were cash-cows, for these exact reasons.
Well, to be perfectly honest, I didn’t make that up myself. I was chatting with a professor at my undergraduate institution, possibly my senior year but more likely on a weekend visit after I graduated and before law school, and he was the one who put down the analysis. Said that the school had made a huge mistake not building a law school during the depression when building costs were cheap. I just repeated it here.
By the way, he was a religion professor. Specialized in early Christian history. Nice guy.
Foreclosures spread into previously safe areas
Relatively unscathed by housing collapse, owners losing homes over unemployment
LOS ANGELES(AP) — The foreclosure crisis is getting worse as high unemployment and lackluster job prospects force homeowners in an increasing number of U.S. metropolitan areas into dire financial straits.
In Seattle, Houston and Chicago, cities that were relatively insulated from foreclosures early on in the housing bust, a growing number of homeowners are falling behind on mortgage payments and finding themselves on the receiving end of foreclosure warnings. Others have already seen their homes repossessed by lenders.
All told, foreclosure activity jumped in 149 of the country’s 206 largest metropolitan areas last year, foreclosure listing firm RealtyTrac Inc. said Thursday.
The firm tracks notices for defaults, scheduled home auctions and home repossessions — warnings that can lead up to a home eventually being lost to foreclosure.
Job loss, rather than time-bomb mortgages resetting to higher payments, has become the main driver behind rising foreclosures.
“Job loss, rather than time-bomb mortgages resetting to higher payments, has become the main driver behind rising foreclosures.”
But Citibank said that jobs didn’t matter. Don’t tell me they were wrong about how the “Plutonomy” would fix everything up.
First layoffs, now a tax hike in Camden,N.J.
Massive layoffs, now a 23 percent property tax hike? Following job cuts to police, fire, and other city workers last week, yesterday Camden City Council voted to allow a double digit property tax hike.
It’s a rough month for Camden, New Jersey. The city laid off about 400 workers, nearly half of them police officers and firefighters, because of the city’s budget woes–now this.
Longtime Camden resident Stephanie Culbreath lives and works in the Waterfront South neighborhood. She says since the layoffs she has not noticed a decreased police presence.
“I don’t blame the Mayor because it’s been what 10, 15 years back because taxes and things have not been increased,” said Culbreath. “So I understand where it’s coming from, it’s just hard to deal with now the way the economy is.”
Yes Stephanie: waterfront park brings in a lot of CASH to the city so the police is very important there…
Wouldn’t it be a radical idea if the residents actually cared about their city and the crime rate went Down….neighborhood watch, co-operating with the police and citizens arrest of punks… so where is Jesse and Rev Al today?
Police don’t like people encroaching on their turf. Anyone that attempts that would no doubtly end up in jail.
Wouldn’t it be a radical idea if the residents actually cared about their city and the crime rate went Down….neighborhood watch, co-operating with the police and citizens arrest of punks… so where is Jesse and Rev Al today?
There’s nothing wrong with picking up the phone and dialing the magic number if you see something that doesn’t look right. I do it quite often, in fact.
Case in point: A couple of days ago, I notice a car that was parked down at the corner of my street.
It was outside of a place that houses students, and it was way to fancy-dancy a car for those kids. They drive compact cars. So do their buddies.
This car was a gangsta Cadillac, and there were two things that didn’t look right:
1. It was parked facing eastbound on the westbound side of the street.
2. It was parked right at the corner. In the no parking zone.
Well, I figured that someone was parking the car there so it wouldn’t be detected outside of one of the drug houses we’ve been dealing with for years. So, I gave 911 a jingle, and they were right on it.
Car vanished shortly thereafter.
I ment the citizen arrests. It never works out the way they show it on tv.
Being short of stature and slight of build, I wouldn’t try to even attempt a citizen’s arrest. ‘Twould be too easy to overpower me.
Where I do think that I have the edge is in the powers of observation. And, then, once I observe something that looks out of order, I quietly report it.
What exactly is a “gangsta Cadillac”?!?
One with tricked out rims and a thunderously loud stereo system.
And, in the case of this Caddy, its driver(s) like to parade around the nabe with the stereo at full volume. I guess we’re supposed to be impressed, but all it makes me do is note its make, model, color, and license plate number. Which I then report.
Rims that cost more than the car itself and darkly tinted wndows are two of the more obvious indicators. If the rims are spinners it’s a dead giveaway, but you can’t really be sure about that when the car is parked.
I would love to have the superpower that enables me to blow out thumping car speakers from the comfort of my bed.
“Which I then report.”
What exactly do you report?!? That a car that you don’t like is in your neighborhood…?
“If the rims are spinners” Sounds like someone is living in the past, no one drives on spinners anymore…..
My advice to all of you is to upgrade your stereotypes: no one from the “hood” drives caddies anymore, no one from the “hood” drives on spinners….
“Wouldn’t it be a radical idea if the residents actually cared about their city and the crime rate went Down….”
Interesting, I always though that the crime rate was a function of unemployment and poverty, but of course, YOU live in Camden so YOU would know….Btw what would you suggest that we do to cut the crime rate on Wall street??
“Btw what would you suggest that we do to cut the crime rate on Wall street??”
Oh, I would SO love to answer this, but I don’t want to attract any attention from Janet Napolitano.
“Wouldn’t it be a radical idea if the residents actually cared about their city and the crime rate went Down….neighborhood watch, co-operating with the police and citizens arrest of punks”
Residents don’t care because, in many cases, the police have become viewed as jack booted thugs. The constant drug war is the primary cause of this, but there’s plenty of other causes.
When a huge majority of the population lives a large percentage of their lives on the other side of the law, the law itself becomes the crime. How much time do most people drive around actually obeying the speed limit? How many people in this country have smoked MJ at some point in their lives?
You can outlaw breathing too; it’s not going to stop it from happening. And it will just keep chipping away at the police “moral high ground”. Everyone wants to help an officer who’s chasing down a mugger/murderer. Just about nobody wants to help the police when they are setting up a radar trap to generate their “revenue” for shiny new cars.
“Residents don’t care because, in many cases, the police have become viewed as jack booted thugs. The constant drug war is the primary cause of this, but there’s plenty of other causes”
Yup….the war on drugs made your friendly neighborhood policeman into the enemy of the common man.
Moody’s Says Time Shortens for U.S. Rating Outlook as S&P Downgrades Japan
Moody’s Investors Service said it may need to place a “negative” outlook on the Aaa rating of U.S. debt sooner than anticipated as the country’s budget deficit widens.
The extension of tax cuts enacted under President George W. Bush, the chance that Congress won’t reduce spending and the outcome of the November elections have increased Moody’s uncertainty over the willingness and ability of the U.S. to reduce its debt, the credit-ratings company said yesterday.
So where were these guys when the tax cuts for the rich were being extended?
BINGO
Moody’s is just a propaganda arm for Wall Street Elite.
Moody’s Investors Service = “Professional” “TrueFinancialEnablers™”
Can I just say that the discussions over the past two days have been wonderful. I think we all came to an agreement that:
1. Both the banks and the FB’s carry some blame for this mess. We are just arguing how much of the blame each one carries. As a general compromise, I offer 30% FB, 60% bank, and 10% government.*
2. The political leanings of the posters on this board were revealed in all their glory. I was impressed with the number of those willing to find middle ground and compromise.
—————–
*IMHO, even then it’s not so simple. A young FB couple buying their first home to raise a family should not carry as much blame as FB’s like Casey. I’m also unsure about the worker bees at mortgage originators whose paycheck depended on collecting fees. But Angelo Mozillo and Lloyd “piece of God’s work” Blankfein should be in jail.
I don’t care anymore…… GTFO of the house. Phonie and Fraudie need to liquidate inventory or we’re all going to be taking about the same bullchit 15 years from now.
“A young FB couple buying their first home to raise a family should not carry as much blame as FB’s like Casey.”
Why not? I have brought 2 children into this world straight into rentals. I am an above-average housing consumer, and I’ve still stepped on a few landmines. If anything, having children should make you even more vigilant, as in, “let’s think twice about this…” Moving with two babies is hell, but we pulled it off.
FWIW, I am surrounded by these couples at work, and it is becoming very awkward now because it’s obvious that some of them are so far underwater that they know the reckoning is coming. These are couples in their late 20’s, early 30’s who bought crappy 2/2s that went 3/2 via finished garage in Mid Pinellas in 2006. Their homes are roughly half of the 2006 value according to the property appraiser, and we all know we ain’t done yet.
Believe me, I dislike Casey, too. But the same naivete that drove him drove the couples as well. Actually, I’ll go a step further, I’m tired of all these panzies saying, “but I have kids.” I know, dude, that’s why you have to try 4x harder now — you’re responsible for people that cannot care for themselves.
Brawndo, it’s what plants crave!
Because most people aren’t anywhere near as smart at you are, Muggy. And pretty much all they know is that when they were growing up, all the adults ranted and raved about how you could never get a bank to give you a loan even if you knew that you could afford it, even if would mean paying less than they were paying for rent (that is the traditional relationship of owning vs. renting, renting is more expensive). Seriously, I think that is as much information as a lot of people had - the accumulated wisdom of their families that banks would never lend you as much money as you needed or could easily pay back because that is what banks do.
When I first was trying to talk to my parents about why buying was a bad idea, my father brought this up. I had to tell him that the business model for banks had completely changed and that they sold the loans and got money on the fees, not on the interest spread. He was stunned. Had no idea that this had happened. And he has an MBA - a fairly old vintage MBA, but an MBA never the less.
“the accumulated wisdom of their families that banks would never lend you as much money as you needed or could easily pay back because that is what banks do.”
Exactly. I have tried to make this point myself. For several generations after FDR’s reforms, banks were some of the most conservative, trusted institutions in American society. If a bank approved you for a loan, it meant professionals had checked everything over and decided you were capable of repaying the loan. When these same people started telling their customers that they could just refi in a few years, and everything would work out fine, they thought they were getting professional, reasonable advice.
Some people missed the banking system’s switchover from conservative reliability to corrupt, caveat emptor, racket.
“Some people missed the banking system’s switchover from conservative reliability to corrupt, caveat emptor, racket.”
+1.
But people also missed that this switchover began with Fannie/Freddie, which for the first time gave banks an incentive (getting paid a spread up-front instead of over time) to move loans off their books instead of holding them.
Bankers/Money Changers /Wall Street ….at fault because it was a Ponzi-scheme . They belong in jail . If a car company put a defective car on the road that blew up we would have to question
in determining who was to blame . The government just let them do what they wanted and were surprised that it blew up .
When these same people started telling their customers that they could just refi in a few years, and everything would work out fine, they thought they were getting professional, reasonable advice.
Some people missed the banking system’s switchover from conservative reliability to corrupt, caveat emptor, racket.
———————
Precisely why I also lay the majority of fault at the financial industry’s feet. They KNEW what they were doing, while the FBs were mostly quite clueless — and too trusting of “the experts.”
It’s not about whether they’re guilty, because they ARE. The question is at the end of the day, “What do we do about it.” I’m a big believer in rolling back the bankruptcy rules and letting them get bankruptcy protection, possibly after their foreclosure is final. I see no problem with forcing those who reckless lent facing a loss of principal, and those who recklessly borrowed more than they could pay, being branded with the “scarlet B.”
I agree Jim. The gov should make the foreclosure landing a little easier — some kind of FICO foregiveness or other incentive to bail, or partial carm-down. But helping the little guy would render all the banks instantly insolvent, and we can’t be having any of that. So the gov decided to help out the banks.
And disguise it as help for the little guy. After all, many FBs would be better off with a foreclosure than much of the “help” that they’re being encouraged to sign up for.
doubleplusone
Only if you apply quilt do you change the financial systems to be
functional again . Those little Kangaroo Courts that they had in
Congress where a joke . The Money Changers not only wanted to be bailed out ,but they want to keep the Casinos alive and kicking and not have any change to their ability to make big ill-gotten bucks .
The Money Changer culprits told the Government what to do about their problem and that is the problem .
By the time the America people realize just how sold out they
are by their own Representative the Statue of Limitations
will be the issue . These little fines that the culprits are charged
for their crimes is BS also .
Great post, oxide, and I very much agree with your percentages, there.
The government is owned by the banks, so would that put banks at 70% ?
And we all agreed the One is a space aileeyun.
If we could all just agree, then the world will be a better place.
“Can’t we all just get along?”
I don’t really care about percentages of blame but I do want to see everyone held accountable. This includes the banks but it also includes the FBs. Many of them committed fraud on their loan applications, and many did not. I don’t want to see any FB’s going to jail though…..I just don’t want to see them living in houses for free as a reward for their stupidity when people like me acted responsibly and ended up getting screwed.
I thought I was doing the right thing when I held off on buying a house that was not worth even half the asking price, even though the banks were willing to give me the loan. My family has been living in less than ideal conditions while we rode this thing out, while the idiots I saw around me who made less money than me bought houses that even I could not afford or could not justify buying. Turns out some of those people are now living in a nice house for free, while I continue to live in less than ideal circumstances.
Maybe we should stop calling them FB’s and start calling people like myself “F’d suckers who refused to play along but now are stuck holding the bill while their irresponsible neighbors live it up”. FSWRTPABNASHTBWTINLIU doesn’t really flow off the tongue though. I shoulda bought that house just before the bubble popped after all.
I would love to see those cash back fraud jerks gets some real punishment .
Some of the FB partied on the equity money ,so they got a value add on by taking out this money before the crash . If those FB’s walk on the mortgage it’s like getting free money .
I feel the most sorry for the FB’s that were just buying a place to live
in and in spite of putting their savings as a down payment the fake market took all their savings and they still have a house that is underwater .
Friday, January 28, 2011
A raging house fire completely destroyed a vacant Nantucket vacation home Thursday morning, and firefighters remain on the scene attempting to douse the still-smoldering rubble.
There was no one in the house at 122 Tom Nevers Road when the fire erupted, and no firefighters have been injured while battling the blaze.
From Trulia:
This Single-Family Home located at 122 Tom Nevers Road, Nantucket MA sold for $1,995,000 on Sep 7, 2010. 122 Tom Nevers Rd has 5 beds, 4 baths, and approximately 4,263 square feet. The property was built in 1988. 122 Tom Nevers Rd previously sold for $1,995,000 on Sep 7, 2010 and $3,000,000 on Sep 30, 2008
Hmm…
The owners don’t intend to run for congress anytime soon, do they? /snark
There was an FB from Nantucket
Who brought gasoline in by the bucket….
blah blah blah blah
blah blah blah blah
…he looked back at the fire and said F*** it!
Never was good at this stuff.
He then lit a match
The gas it did catch
And from the house he became unstucc-ed.
New home sales drop, making 2010 worst year for builders since 1963
By Kimberly Miller Palm Beach Post Staff Writer
Updated: 11:19 p.m. Wednesday, Jan. 26, 2011
Posted: 11:12 a.m. Wednesday, Jan. 26, 2011
12 COMMENTS
Sorry guys .. but if you bought a house during the OBVIOUS bubble, and you subsequently lost money .. don’t expect a hand-out. America is about the FREEDOM to choose without government interference .. and ALSO accepting the consequences of your choices. Pass it on. And for those who claim they didn’t “see” the bubble .. well, next time, do your homework. Double-digit percent increases are NOT in-line with inflation. They are signs of an OBVIOUS bubble. Less government is BETTER government.
Tea Partier
12:24 PM, 1/26/2011
Tea Partier and GE,
You both need to wake up, banks are awash in record breaking, never seen before profits. You would have to be an uneducated high school drop out to continue to pay for a worthless house, one that you paid 250,000 for and is now worth 80,000. Get Real! Do you ever speak to anyone under the age of 50?
Educator
10:01 AM, 1/27/2011
I haven’t made a mortgage payment since February 2009 and it is the most liberating feeling I’ve ever had. This is south Florida, and rules here are subjective. Banks made fortunes from people like you and me, now it’s our turn. I just purchased a new BMW, in cash - thank-you very much! Same goes for HOA. Good luck getting a nickel from me, suckers! You’ve been bullying me about my lawn and other nonsense and now it’s payback time. Moving to South Florida is the best decision we’ve made.
New BMW in my driveway
11:12 AM, 1/27/2011
http://www.palmbeachpost.com/money/real-estate/new-home-sales-drop-making-2010-worst-year-1210883.html - 85k -
Tea Partier and GE,
You both need to wake up, banks are awash in record breaking, never seen before profits. You would have to be an uneducated high school drop out to continue to pay for a worthless house, one that you paid 250,000 for and is now worth 80,000. Get Real! Do you ever speak to anyone under the age of 50?
Educator
10:01 AM, 1/27/2011
—————————————————————————————–
+eleventybillion
Jeeez…. ripped directly from a page of the HBB or what?
Educator,
Yea your a genius save all your mortgage payments from a bad investment in a depreciating asset and waste the proceeds on another depreciating asset! Yea your not a sucker
Those are three incredible comments, showing a wide range of informed perspectives on the collapsing bubble… a rather welcome respite from the propaganda drivel served up by the MSM press.
I’m starting to take the Republican view. The private sector could do with a lot less “interference” in the form of subsidies, tax breaks, favoritism, and welfare of all stripes.
Just ONCE I would love for some bankster to get on Nightly Business Report and whine “don’t tell me how to run my business,” and then see the look on his face when Tim Geithner calls him up and says Very Well, we’ll close all your tax loopholes and stop your subsidies and btw please pay back all your bail-out money NOW. Or for some competition-lovin’ health care lobbyist to be met with competition from a non-profit public option.
All they would have to do is get the bank regulators to go back to mark-to-market requirements on the financials used to see if their reserves are OK to blow them all away. As for taxes, I’d like to see all the net operating loss carry forwards cancelled too, but that is even less likely.
I’m starting to take the Republican view. The private sector could do with a lot less “interference” in the form of subsidies, tax breaks, favoritism, and welfare of all stripes.
As far as I can tell, the “Republican” view (ahem) typically turns a blind eye to (corporate) tax breaks and (corporate) welfare. They want that kind of interference, minus any pesky rules & regs.
Yes. The Republican party has been “Democrat lite!” for years now.
Perhaps you meant the Tea Party view?
Republicans provide welfare for the top of the socioeconomic ladder. Democrats provide it for the bottom. Both are quite destructive, but in different ways.
Don’t these FB’s know that the Banks are transferring the pain
of the loss to the taxpayers ,so when they want to screw the banks they are really just screwing everyone . And even the Banks were just Middle-men ,so maybe its a pension plan that
took on the loss of millions in loan bundles .Also if a regulated
Bank goes BK its the FDIC insurance that pays the depositors .
Don’t the FB’s realize that taxpayers have to rescue FDIC to
pay for all this loss in the final analysis ,or rescue F&F . If the losses were just confined to the Banks it would be one thing
but that isn’t the case .
…… jewish lightning.
We were kicking around that topic when…. 2006?
I can’t wait until the redline the suburbs.
Hey Ben, here is one link to that FCIC financial report on the causes of the financial crisis. Sorry, it’s 662 pages long.
http://c0182732.cdn1.cloudfiles.rackspacecloud.com/fcic_final_report_full.pdf
Sacramentan Phil Angelides, appointed by Congress to investigate the financial crisis of 2008, declared Thursday that the entire mess could have been avoided.
In a blistering report that followed 18 months of testimony and fact-gathering, Angelides and his Financial Crisis Inquiry Commission blamed a wide cast of characters for the epic meltdown, including executives of insurance giant AIG and Goldman Sachs and government policymakers like Alan Greenspan, Timothy Geithner and Ben Bernanke. The report said human error created the crisis.
Read more: http://www.miamiherald.com/2011/01/28/2038875/phil-angelides-financial-crisis.html##ixzz1CKnn8MlO
————————-
“The Commission concludes that there was “a systemic breakdown in accountability and ethics” among bankers. But despite the Commission’s rhetorical caution, for some readers the information in the report will also evoke the breakdown of a deeper and broader “system” - one that includes regulators, elected officials, academia, and think tanks. Wealthy bank executives, government officials, economists, and ambitious politicians formed a web of mutual interest that served each of them well but failed everybody else. And the report raises the inevitable question: What’s really changed?
Counterattacks were inevitable. The redoubtable Alan Greenspan hasn’t responded to the report directly yet, but shortly before its release he preemptively withdrew the partial mea culpas he offered after the crisis. The Republican members of the Commission staged a walkout and have written dissenting opinions. The Chamber of Commerce issued a histrionic press release, and Republicans in Congress are using the “rollback to 2008 levels” as a gimmick to defund the partial reforms enacted last year.”
“Can’t predict, can’t enforce, can’t regulate: Greenspan also told the Commission there’s no point even trying to regulate banks anymore. “The complexity (of finance) is awesome,” he said, and regulators “are reaching far beyond [their] capacities.” Greenspan insisted that regulators would need to review each and every loan document in order to monitor banks properly. But anybody who understand audits knows that’s not necessary. He’s saying regulation isn’t worth the trouble because it would require enormous budgets and lots of all nighters - which would mean even more of those infamous coffee breaks.”
http://www.huffingtonpost.com/rj-eskow/the-wall-street-empire-st_b_815227.html
———————–
I LOVE how Greenspan and his ilk try to convince us that the financial world is just too much for our poor, little brains to comprehend (of course, we “saw it coming,” while they didn’t). Does he not realize that he sounds like a complete a$$?
If the workings of the financial industry are so complex as to defy most regulation, then that’s a very strong argument for reinstating Glass-Steagall and ending TBTF.
Maybe you could start by telling me which parts of the Glass-Steagall Act were actually repealed and which weren’t. Hint: About 90% of it was left intact.
The most important part repealed was the part that separated depository banks from investment banks.
Yes, and the parts that weren’t repealed?
Actually, I bet he thought that anyone who was capable of understanding what was going on was working for a big bank making millions of dollars. Even more incidious in some ways.
Yep, and people wonder why the government has to pay good salaries and benefits and job security. The gov has to “retain talent” to continue to protect the public. Profit motive and protecting the public don’t mix, and never have.
I just found out that one of our newer people has a major background in a type of complex legal document that I am dealing with on my current project. I have it too, but he specialized in the exact stuff where I have a gap in my background. Gonna be hanging out in his cube, in the future, I think. This recession is GREAT for enforcement. Except, of course, that we aren’t going to get permission to hire any more of them. Not any time soon.
Bet you guys will have some great conversations!
Enjoy your new workmate, polly.
Too complicated for politicians and J6pk to understand ie they won’t understand the theft that has occurred.
Ok ,so this Commissions calls this financial crash “Human Error “,I call it crime ,incompetency ,bribes , greed , Government takeover ,no cops on the beat ,but I agree it was preventable .
With so many American homes recently entering foreclosure — one in 45 last year — the suggestion that prices are nearing a bottom seems ludicrous.
Got shadow inventory?
Jan. 27, 2011, 12:01 a.m. EST
Top 10 cities where foreclosure rates are highest
Foreclosures rose, but hard-hit areas eased slightly in 2010
Related stories
* Foreclosures march higher in unexpected places (Jan. 27)
By Amy Hoak, MarketWatch
CHICAGO (MarketWatch) — Foreclosure activity showed signs of easing in some of the hardest-hit markets last year, even though filings rose on a nationwide basis as the country dealt with high unemployment rates, according to a report released by RealtyTrac on Thursday.
Nationwide, one in every 45 homes received a foreclosure filing in 2010, according to RealtyTrac. Foreclosure activity increased in 149 of the nation’s 206 areas with a population of 200,000 or more.
Foreclosures became more widespread “as high unemployment drove activity up in 72% of the nation’s metro areas — many of which were relatively insulated from the initial foreclosure tsunami,” said James J. Saccacio, chief executive officer of RealtyTrac, in a news release.
Houston, Seattle and Atlanta saw the biggest increases among the 20 largest metro areas. Foreclosures jumped 26% in the Houston area in 2010, compared with 2009, according to RealtyTrac. In Seattle, foreclosures rose 23% and in Atlanta, they were up 21%. View the full list at RealtyTrac.
But fewer homes in hard-hit areas — including Las Vegas, California, Arizona and Florida — received foreclosure filings in 2010, compared with the year before. Even though the areas are improving, however, they remain some of the most problematic.
…
Is 1 in 45 the all-time record rate of U.S. home foreclosures for one year, or did the rate surpass that level in the Great Depression?
Can someone tell me what the govt has done, besides printing money, to justify this so called recovery?
And the “recovery” is, for the most part a stock prices/financial industry bonuses thing, not a people are going back to work thing. To the extant that we’re adding jobs, we’re not adding them noticeably faster than population growth.
Yay! It’s all in our heads.
One in a series of excerpts from THE NEXT DECADE by Stratfor CEO George Friedman.
“Oddly enough, it is on the economic level that the pain of 2008 will have the least enduring effects. It is absurd to compare this downturn to the Great Depression. The GDP fell by almost 50 percent during the Depression. Between 2007and 2009, the GDP fell by only 4.1 percent. This is not even the worst recession since World War II. That honor goes to the recessions of the 1970s and early 1980s, when we saw the triple hit: unemployment and inflation over 10 percent and interest rates on mortgages over 20percent.
While the current economic crisis is nothing like that, it is still painful, and Americans have a low tolerance for economic pain. There are even bigger issues on the horizon, beyond this decade, when demographics shift, labor becomes scarce, and the immigration issue will become the dominant matter facing the United States. But that is still a ways off, and it will not be affecting the coming decade. This decade will not be an exuberant one, and it will strain both individual lives and the political system. But it will not change the fundamental world order much, and the United States will remain the dominant power. Ironically, one measure of U.S. dominance is how much a miscalculation by the American financial elite can impact the world, and how much pain American mistakes can inflict on everyone else.”
“Between 2007and 2009, the GDP fell by only 4.1 percent.”
If we even believe that number, which doesn’ even correlate with the the swollen U6 number that is never reported in the media (and nevermind the shadowstats number, which is well above 20% unemployment.)
yes but… I think it’s worthwhile looking at what GDP does and does not measure and think about whether there may be some better measure of how the economy is doing.
currently:
GDP = private consumption + gross investment + government spending + (exports − imports)
change to:
GDP = private consumption + gross investment + (government spending - debt incurred) + (exports − imports)
Ironically, one measure of U.S. dominance is how much a miscalculation by the American financial elite can impact the world
BS the only miscalculation by some was when to get off the money train, but they fixed that by getting the tax payer to bail them out. Those at the top got off the train early. See Hank Paulson’s investment record.
The GDP Joke
http://www.europac.net/pentonomics/gdp_joke
I just ordered the book two days ago…
The bubble is far from popping in Austin, TX. IT’S DIFFERENT HERE
—————-
Despite the tough economy and weak national mortgage market, 2010 downtown Austin condo sales increased 50% over 2009 results. With 168 downtown Austin condo sales tracked through the Austin Multiple Listing Service (MLS) and with prices just 1% lower than 2009, 2010 was a surprisingly strong sales year.
For downtown Austin, this is great news. With more than 2,000 new downtown condo units built downtown in the last decade, overcapacity and the real estate downturn threatened to depress condo prices. The 2010 sales results show that the market remains quite strong given the difficulties facing the broader real estate and mortgage markets.
While sales volumes increased substantially — not including additional non-MLS sales at the Austonian, Four Seasons, Spring, and BartonPlace — market pricing remained essentially unchanged at $294 per square foot - a 1% decline from $296 / sq foot in 2009. Because the average unit size increased by 3% to 1,142, average sales price increased 4% from $330K to $344K.
While 2010 was a very strong year compared to 2009, it’s interesting to compare 2010 to 2008 — the first year that many of the new projects hit the market. In comparison, 2010 saw volumes increase 29% of 2008: from 130 to 168 units. Price per square foot decreased 4% from $308 to $294. Average days on market — the time required to sell the average unit — increased by a week to 100 days.
Geez, I have got to go back and visit Austin. I haven’t been back at all since I lived there in the mid-90s. At that time, there were few if any apartments or condos downtown, there was even some old ordinance that prevented the renting of the lofts, that were above the downtown businesses, as apartments.
But in all honesty, downtown was pretty boring then, other than 6th street, which was fun on occasion, but not really home to the best Austin bars or music scene, which, ironically enough, were scattered around the inner suburbs of Austin. There really wasn’t anything to do, other than work, in downtown Austin then, until the bars on 6th street opened at night.
I’ve got a feeling I won’t recognize the place.
it’s a beautiful place to live in!!!
i live downtown and it’s so much fun
great restaurants, bars, clubs, a ton of activities all week long… you should come and visit!
Passionate replies like this are the prime reason that your rent is too damn high.
When I think of Texas, three words come to my mind: hot and humid.
Recall what General Sherman said about hell and Texas. If given the choice between living in hell and Texas, he said that he’d live in hell and rent Texas.
When I think of Texas, three words come to my mind: hot and humid.
Laugh.
Those weren’t the three words that came to mind for me. Or anyone who listened to RevCo back in the day.
That said, I like Austin a lot, though I suspect it’d look mighty different to me these days as well.
Don’t forget cold. It may snow on Cowboy Stadium on Super Bowel Sunday.
Its just steers and queers there, right?
Brett, that’s your demographic speaking, I think. Living in a sardine can in a concrete jungle, getting soused and stupid with a bunch of equally soused and stupid acquaintances, surrounded by bellowing as well as by the simpleminded noise that masquerades as music - this is not for the faint of heart.
OK, I’m exaggerating a wee bit. A lot. I live in a sardine can too.
About the “everybody” who wants to live “here” - wherEVER that is - you may find the ranks thinning out as people inevitably pair up to begin raising families. Children exhaust anybody for the first ten years. In the matter of mate selection, you may want to consider the poverty of spirit that ‘clubbing as recreation’ fosters. It is sort of like a warning flag: “I don’t know how to do anything else as a hobby other than drink around other people who have no other interests”.
Not advocating forty acres and a mule as a panacea. But, what you do tends to become who you are.
I wouldn’t blame you for shaking your head and writing “Sheesh, what a hopelessly boring old fuddy duddy.” I recognize it’s warranted and will take my lumps gracefully.
We’ll see how the state budgert cuts affect this booming market. Between the private sector’s never ending offshoring and the looming state gov’t layoffs the Austin bubble will eventually pop.
Just an observation on stock market trading volume: Monthly volume for 2010 for DIA is about the same as it was in 2006. However, monthly volume for SPY is about triple what it was in 2006.
News Report:
Economy Gains, but Not Enough to Ease Jobs Crisis- AP
The economy gained strength at the end of last year as Americans spent at the fastest pace in four years and US companies sold more overseas, but it remains too weak to ease high unemployment.
Translation:
Expect the thieves at the Treasury and Fed to ratchet up printing $$$ Zimbabwe style, since it already has done nothing but export inflation; causing starvation, misery, civil unrest and chaos around the globe.
Treasury doen’t control the money supply.
So if there was a bank run and bank capital consisted mostly FED credits what happens?
What if all the banks try to redeem FED credits for cash all at once?
My guess is the Treasury comes in and saves the day but I don’t know?
Someone would make a speech. They would call a meeting and stick them in a room together and say that things are very serious and they need to figure it out. Other than that? Without Congress passing a law authorizing spending, the Fed is the only game in town.
Yes, Polly, correct; they just issue Treasury offerings, collude and conspire with the private banking cartel known as “The Fed”, and thereby enable the issuance of new fiat ad infinitum. The so called “Federal Reserve” and the “Diminishing Treasury Department of the U.S.” are two cogs on a wheel of destruction.
But you knew that already.
The Fed doesn’t need any help from Treasury to make up new money. Sorry if you weren’t aware of that.
How To Destabilize A Region, or the World:
First, you must sell allegedly “friendly” governments lots of weapons. You know, aircraft, missiles, guns, ammunition, that sort of stuff. It helps a lot if the governments have money, and it helps even more if you can convince them to peg their currencies in some way to yours, and they have something you want (think oil.)
Next, having accomplished the currency peg and sales of arms, you then allow your banks to engage in rampant speculation and fraud. You let them counterfeit your currency with impunity by issuing credit unbacked by anything (which spends exactly the same as does currency, and thus is an effective naked short upon it), so long as they bribe Congress sufficiently with “campaign contributions.” This is all legal, of course, and where it isn’t you change the law (such as through the CFMA) so it becomes legal.
Having done that, you let your Central Bank pontificate about how “rising stock prices” are good for the economy and “animal spirits.” You intentionally fail to mention, however, that speculative price and value are not the same thing, and that said companies are drowning in debt to the point that you now need to pay $12 for $1 worth of actual underlying assets, after debt is subtracted. This, incidentally, is three times the level of speculative premium you had in 2007, just before the market blew up.
In order to support this speculative bubble (which your President is dumb enough to crow about in his “State of the Union” speech) you intentionally flood the market with “liquidity” (that’s a fancy name for “cheap loans.”) Speculators figure this game out immedaitely and start driving up the price of everything - not just stocks. Cotton quadruples in price. Wheat, corn, oats, copper, oil - all have a rocket strapped to their ass and lit.
Of course producers and processors of food and other items can only pass through those price increases or eat them. They can’t eat them beyond their margin and remain in business, so this starts to leak into the real economy. The currency pegs mean that most of the inflationary pressure you’re creating doesn’t hit your nation, it’s exported to others. That exactly how you like it, because you can claim “inflation expectations are well-anchored.” Perhaps they are in your nation, but in other places they’re extremely unanchored and are not only expectations, they’re realized facts as the basic cost of life spirals up out of control.
(From K. Denninger)
The Fed can make as much electronic money as it desires, but in the case of a bank run where people want physical paper notes, the Fed does have to turn to Treasury for the bills. Treasury owns the paper-printing-press, the Fed owns the electronic one.
But Treasury gives the Fed as much paper as it asks for to distribute to the banks.
I’m sure they have a hefty supply of paper cash already lying around for just such a need. It would be irresponsible for them _not_ to.
WASHINGTON — Workers saw their wages and benefits rise slightly faster in 2010 than 2009, but the gain was still the second-lowest increase in nearly three decades.
Wages and benefits increased 2 percent last year after a 1.4 percent increase in 2009, the Labor Department reported Friday.
My guess is almost all of this is
1. Wall Street bonus money and CEO pay averaged in
2. Value of insurance benefits rising
3. Overtime for a small # to make up for those fired.
I’d like to see how much take home cash changed.
ie I think very few saw a raise particularly in the middle income range.
Local obs:
Well, my building has seized one unit and is close to seizing another as the foreclosures saga unfolds all around my neighborhood. So far things appear under control, but the association will have to spend some dough to get the unit(s) in rentable condition. Even then, they can only be rented out on a month to month basis - as the former owners are allowed to make a claim to get them back (for at least a year IIRC).
Where are the banks in all this? No where to be found, they’re staying away and letting the owners, association, and courts figure it all out, for now at least.
Now for a bigger story. My neighborhood is abuzz over the state providing funds to non-profits to buy up low cost condos so that they can house various wards of the state. State budget cuts mean mental patients, ex-cons, former public housing residents are being cast out of state facilities and put out on their own.
In my neighborhood we have a large number of very unattractive former apartment buildings - known as “four plus ones” - 60s vintage. At the tippy top of the bubble, developers were converting these en masse to condos. When the bubble burst they led the way down due to being ugly ducklings and all. These are the units these non-profits are buying up - and from the looks of it they can’t get their hands on enough of them. Naturally, those who bought new construction or in pricier vintage buildings nearby are not happy.
Lastly, a few quick online searches of some suburbs considered by many here to be “rock solid” delivers pages and pages of foreclosures (each). For lurking locals, we’re talking about Park Ridge, Rosemont, Niles - suburbs packed with the local gentry - seniors, first responders, mid-level executives, public administrators. These are the areas that local agents insist are untouchable and always in demand.
Time marker: winter 2010-2011 - this is when things started to REALLY get interesting in my neck of the woods. That’s almost five years on from the local top - summer 2006 and three years on from the first signs of trouble - spring 2008.
What state are you in?
Sorry, IL.
Great post, edgewaterjohn. Thanks for the local update!
Husband and I lived in a four-plus-one on W. Surf when he was in grad school and I was doing my residency. You are so right about their butt-ugliness.
What is a four-plus-one? I saw a couple pix of ugly brick buildings on Google but it looks why do they call it that?
Four stories of apartments atop a floor of lobby/laundry/landlord’s apt/covered parking. Their only charm is that they have some highly coveted off-street parking. And laundry in the building, that beats going to the laundromat.
U.S. Cattle Herd at Lowest Since 1958 May Spur Beef-Price Surge
The U.S. cattle herd probably shrunk to the smallest size since 1958, and the drop in beef supplies may boost prices to a record, analysts said.
Ranchers held 92.211 million head of cattle as of Jan. 1, down 1.6 percent from a year ago, according to the average estimate of seven analysts surveyed by Bloomberg News. That would be the smallest herd in 53 years, said Ron Plain, a livestock economist at the University of Missouri in Columbia. The government releases its semiannual report on the cattle herd at 3 p.m. today in Washington.
“Cattle producers are being squeezed by tough finances and a soft economy,” Plain said. “The supply is just shrinking. Beef prices are likely to be record high in 2011, and it should be a record that will last.”
Hey, we aren’t consuming as much beef these days. Taco Bell’s “beef” is just 35% animal, and I bet the other fast food places aren’t much higher.
I was surprised to find out Taco Bell doesn’t even cook thier own meat any more.
It makes sense as a defense against food poisoning. Expecting the manager of a fast-food franchise to ensure all ground beef is cooked before stuffing them into a taco is asking for trouble. Notice that most pizza places get pre-cooked sausage chunks too: it’s the only ingredient that is not ensured safe cooking in the time it takes to bake a pizza.
Okay, you made me do it. I just have to talk about my new stove.
And why would normally frugal Slim spring for a new stove? Because the old one was trying to kill me, that’s why.
Old stove was brand new when I moved in here back in ‘04. But, man did that thing have a combusted natural gas smell to it. I called Southwest Gas and a private repair shop. Neither could do anything to eliminate that problem.
Well, earlier this month, I had a home energy audit. Gal who did it has quite the interest in indoor air quality. Which makes sense because, after home energy audits, people tend to break out the caulk and sealant so they can really tighten up the old house.
What they sometimes end up doing is creating a sick building. Not good for the occupants.
My auditor measured the carbon monoxide being emitted by my old stove, and the levels were way up there. So, out with the old stove, in with the new, and it has electronic ignition. No more pilot lights in the living space of this house — woo-hoo!
My first big oven project will be making my own pizza.
Making your own pizza is the way to go. You can make a top quality pizza for about $2.
I use this crust recipe.
http://www.annamariavolpi.com/pizza_recipe.html
I add a spoonful of sugar to the yeast/water to help wake up the yeast.
A 25 lb bag of bread flour and 1 lb bag of yeast makes roughly 80 large pizza crusts - for about $11 total.
Get block mozzarella and shred it to order. Use an egg slicer to cut up mushrooms and pitted whole olives.
I read the same thing about airline flights. Airlines had to reduce supply after 9/11. Instead of adding supply when business picked up again, they chose to keep the supply tight just to jack rates.
Choking off supply of beef to raise prices…holding housing off the market to raise prices…OPEC shutting production to raise prices… Enron shutting down power plants to raise the price of electricity…
Nobody cared when DeBeers choked off diamond supplies; we can walk away from buying diamonds. But these are all commodity products that people actually need. What’s going to happen when entities like Baxter shut down a factory for health care supplies just to drive up the price?
This is exactly what the airlines did. They were losing money left and right, so tighten the supply and the demand will go up. Made a lot of money that way, and by charging bag fees and cutting employees pay and benefits.
The article I read was disgusting. Some airline exec said that if they start adding flights or stop nickel and diming for blankets and baggage, or let go of fuel surcharges even if they aren’t needed, then they “will undo all the good work they’ve done.”
So squishing people like cattle is now “good work.”
Without those fees, none if the airlines would have made money last year.
But fees are not taxed, so watch Congress get involved soon.
Boo-Fricking Hoo. Everybody loved their $99 R/T LA-NYC-LA tickets, which were paid for by 30 years of screwing the airline labor force, to the point where you can make more money working at Jiffy Lube than you can as a new-hire pilot or mechanic.
Now that 30 years of culling the airline herd is complete, and we are down to 4-5 majors, people are bitching that supply is at a premium.
Deregulation and competition, meet Darwin. Competition is good for the customer, until it isn’t. Like having competition in banking, until there are 4-5 TBTF banks.
Bonafide thug Frank Lorenzo should ring a bell with you.
I remember a few years ago when hoz mentioned thinning out the herd because of declining milk and beef prices.
Agree with you, oxide, it’s disturbing to see everyone sit back as basic necessities are being held off the market in order to increase prices. It’s like how they would destroy/inventory food during the Great Depression in order to keep prices high…in the meantime, people were starving. Something is very wrong with that picture.
costs too much to feed them
grains are up, corn is being used for fuel additive, can’t raise the price of beef, pork or chicken to make up for it.
How does this align with the fact I’m just sitting down with my wife and she said, “At costco I got your rib steaks at a great price today. $5.99 a pound, normally 7.99″.
I can’t stand the quality of the meats at Costco.
On NPR they interviewed a “expert” angelidies ? I forget the name
he states becuase the crisis was global the US government is not to blame.
Lancaster Mayor Wants To Broadcast Bird Songs
LANCASTER (AP) — It may sound like a bird-brained idea, but the mayor of Lancaster wants to brighten up the Mojave Desert city by broadcasting recorded bird songs.
R. Rex Parris proposed the idea during his State of the City talk on Monday.
The Antelope Valley Press says Parris wants to play the bird chatter from loudspeakers on Lancaster Boulevard. The mayor says there’s science to show that listening to birdsong makes people happier.
On other topics, the mayor says Lancaster must continue its drive to become a research capital for solar and alternative energy.
Parris is known for his flamboyant ideas. He got a law passed giving the city the right to castrate pit bulls, ordered city officials to learn Mandarin in a bid to woo Chinese business, and riled some people by saying he was growing Lancaster into a Christian community.
Sounds like he’s grooming himself to be California’s next governor.
LOL….
“…he was growing Lancaster into a Christian community.”
Parris will do well getting to the next level as Ca Gov. He seems like a guy who doesn’t understand or want to follow the Constitution, has Dictatorship qualities, and is a Narcissist. These are sold qualities to grow your position in govt.
Great chart…
http://www.bloomberg.com/apps/quote?ticker=BDIY:IND
Good stuff, wmbz.
On ABC early morning news this AM, the news reader was about to pee herself with joy as she reported on the DOW. She bubbled about how it has been on a sustained upward trajectory, the longest since 1995. This is a sure sign we are in full-blown recovery, and it looks like the DOW will keep right on going up!
So it’s not to late if you want to jump in on a sure thing! Everything else is white noise.
Paulson profits $5 billion in 2010: Report
NEW YORK (CNNMoney) — What recession? Hedge fund honcho John Paulson profited more than $5 billion in 2010, possibly the largest haul in investing history, according to a news report.
This means that Paulson was making $158.55 per second last year.
In 2010, more than $4 billion of his profits came from fund investments. Most of his funds contained bets on gold, due to Paulson’s wariness of the dollar’s long-term weakness, based on the Wall Street Journal’s report. He placed much of his own money in gold-focused funds, which rose as much as 45% because of gold’s meteoric rise last year.
Paulson’s take from last year exceeds the $4 billion that he raked in from short bets against subprime mortgages in 2007, according to the news report.
The founder and president of investment firm Paulson & Co. achieved fame and notoriety, for betting against subprime mortgages on the eve of the market crash in 2007. His funds scored gains of as much as 590% from this subprime wager, the news report states.
If AIG hadn’t been bailed out he would hiding from his investors.
how so?
not really familliar with the whole story.
AIG sold insurance on mortgages in case of defaults
Paulson must have bought the insurance which only would pay off if AIG had money.
AIG sold the insurance so cheap it was broke when the mortgages failed, no way it could pay off.
And none of that money will be taxed as income.
Credit card rates at record highs near 15%
NEW YORK (CNNMoney) — Interest rates are now hovering near record highs, at an average rate of 14.72%. And if your credit is bad enough, you could even end up with a rate as high as 59.9% APR.
That’s because while the CARD Act helped crack down on certain fees and requires more disclosures, it didn’t cap every credit card holder’s worst enemy: interest rates.
Sure, the new rules prevent banks from raising most interest rates retroactively, but there’s no limit on the rates they can charge new customers.
“Rates are going up because card issuers know that once you get a card they can’t raise the rates, so they’re raising rates on the front end to ensure they get the revenue from that interest,” said Beverly Harzog, credit card expert at Credit.com.
All the more reason to keep that single credit card that I’ve had for lo these many years. And, being the meanie that I am, I pay the thing down to zero every month.
Deadbeat!
(Me too!)
“Credit card rates at record highs near 15%”
I just fed a Capitol One $20k loan offer at 17% into the shredder. FWIW, I have an 813-fico score.
I just fed a Capitol One $20k loan offer at 17% into the shredder.
I’m sure that tickled your shredder’s tummy, but I prefer to handle these valuable offers thusly:
1. I scribble all over the application form. Man, that’s fun.
2. Then I put everything, including the envelope that the valuable offer came in, back into the postpaid envelope that’s included.
3. I drop the whole shebang in the mail. And the credit card’s paying for this trip.
Did this guy Robert Aliber get the same fat envelope Chris Thornberg got? When will Nouriel Roubini get his?
http://finance.yahoo.com/banking-budgeting/article/111966/gloomy-economic-guru-says-america-is-back?mod=bb-budgeting&sec=topStories&pos=7&asset=&ccode=
This goes to my theory that the elites knew what would eventually happened they couldn’t control that but they could control when it happened and maximize the situation to their benefit. My guess is paid mouthpieces and selected Hedge Funds played an instrumental roll in the crash.
These same mouthpieces would be expected to talk things up on the other end.
chilidoggg
I noticed that about Chris Thornberg, too. He has been booking REIC Associations doing the $120- Breakfast Meeting circuit. I was invited but declined. I noticed he’s touring quite a few of them.
Stocks slide after GDP report; mixed earnings- AP
Stocks are falling in a broad sell-off after a report showed that the U.S. economy isn’t growing as quickly as economists expected.
NASDAQ off 2.5% and S&P off 1.8%….maybe this is the beginning of the post-Santa-Claus correction I’ve been expecting for a couple of weeks.
http://timesofindia.indiatimes.com/business/india-business/Households-feel-the-pinch-of-rising-prices/articleshow/7376125.cms
The inflation that Ben Bernanke helped to create, but which he denies exists in the US, is pushing people past desperation in places like India. “People blame the government’s faulty policies for high inflation which policymakers say has been taxing the poor. Sharma and his wife say they have cut down on onions and other vegetables and are worried about the education costs for their three-year-old daughter. The anger and frustration over high prices is palpable.
“The government has not gone to the root cause of inflation. There has to be cause and effect analysis and then they should come out with solutions,” said Taroon Khosla, a manager with an outsourcing firm. Khosla said his family could not afford eating out anymore. “Eating out is not an option for us. There is no scope for entertainment. If you go to watch a movie one ticket costs Rs 150 and the whole experience can set you back by a substantial amount.”
The entire problems of the world are nothing but manifestations of the greed of big MNC’s. The world eats less, and has less savings today because everything is priced in dollars and the Fed chairman has printed a whole lot of it to keep the wall st, housing here, and as a consequence the US economy pumped up. The Feds governors think they can keep printing more money and the world will keep absorbing all that liquidity. However, if people have to choose between eating and keeping the dollar as the global reserve currency, they will choose to eat. Something for the honorable chairman who is 100% confident to keep in mind perhaps? Go ahead, do more QE, watch the world abandon the dollar, slowly but surely.
People are choosing feeding their families over buying iGadgets and enriching Wall Street?! Those SELFISH bastards!
Your daily anti-patent post:
Lanza recalls bumping up against his company’s main competitor, Geron Corporation, when it came to researching stem cells in reversing diabetes, a process he said he had been working on with animals for many years.
“When I came to ACT to try to do it with stem cells I couldn’t because the rights to use embryonic stem cells for diabetes had been exclusively licensed to Geron,” he said.
“Here I was, a scientist trying to cure diabetes and I couldn’t use my entire lifetime of expertise to try and develop that technology,” he said.
The article notes that if the US keeps this up, other countries are likely to leapfrog us in terms of the research that they do, creating huge commercial opportunities and life-saving treatments, while the US wastes away fighting each other in court. Yet another reason why President Obama’s suggestion that we’re more innovative because we get more patents is completely off the mark.
Link
Innovating via patent isn’t always the best idea. Why? Because once you’ve patented it, it’s publicized.
That’s why there are companies that prefer not to patent their IP. Much better to keep it at the trade secrets level.
Is it an anti-patent post, or an anti- patenting genomes and organisms kind of post? Because that’s an important distinction.
In the old days, you had to build a working model to apply for a patent. Now, companies file a patent for things like “placement of sensors.” This is a real example: they bought sensors from a catalog and patented the placement of the sensors.
The Patent Office will reject an application if they think it’s “obvious,” but they’re pretty lax on that.
This has been available for a couple of days and I thought somebody else would post it, but since nobody has, I will. I thought it was an interesting data point on why housing looked better at the end of the year…
http://www.thestreet.com/story/10986304/1/kass-new-home-sales-on-weak-foundation.html
Thank you, Carl.
Seen the front cover of The Economist? Map of the states.
Californian is Califoreclosia; NY is New Yoke; NC = N. Carloana, FL = Horrida; AZ = Aridzona……………………..lol
Colorado = “Off Colorado”
I guess our core competence in the Centennial State is telling dirty jokes?
Despite a climate of fear that still prevails in the capital markets, the worst of the crisis has passed and the world is in recovery mode, Dimon said in a live interview from the World Economic Forum in Davos.
“Now people see black swans behind every rock,” Dimon said, referring to the idea of unforeseen events with huge consequences and the Black Swan book by Nassim Taleb.
No Jamie what people see is manipulation of markets, government by of and for corporate elite, and massive accounting fraud. They also see inflation in needs and job insecurity.
Why isn’t that guy in jail? Oh yeah, he “knows” people….
The notion that somehow we can grow our way out these problems is now firmly put to rest,” says former CBO director Douglas Holtz-Eakin.
Currently president of the American Action Forum, Holtz-Eakin largely agrees with the report’s claims, especially on the somewhat controversial notion, that the unemployment problem is “structural” in nature. Holtz-Eakin believes the trouble is based on a foundation of poor education and inadequate job training and retraining.
Younger workers will continue to struggle because they lack the education requirements to hold lasting jobs
No Holtz Eakin it’s not an education issue it’s a trade policy issue and a currency issue. It’s also a Wall Street stripping all the wealth issue. There are plenty of very educated unemployed people in this country, but I suspect you know that and you are just another mouth piece for those doing the wealth stripping.
+100
Amen to that, measton!
They keep trying to convince us that our problems are due to “lazy workers” (always blaming our problems on workers/unions, FBs, etc.) instead of focusing on the REAL problem, which is the fact that people in Third World countries will work for a tiny fraction of what we can work for here. They want to prop up asset prices of all kinds (so the rich folk who own them don’t lose any of their wealth), but can’t get these high prices for things if the working masses are constantly having to compete with the poorest workers around the world.
Measton- God Bless You.
I know many American EE’s out of work right now. All are experienced, have good work ethic, and are all going broke. Many would move in a heartbeat, but can’t find a position.
So do I. Programmers too, even those with “up to date” skill sets like .NET programming.
Ok Ok We have to demand all students even minorities read, write and speak English….
But they are afraid it will kill the rap, hip hop market.
choices choices choices.
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Younger workers will continue to struggle because they lack the education requirements to hold lasting jobs
Are the New York Mets illiquid or insolvent, and is it because of Madoff, the fall in the commercial real estate market, or a sports bubble with a highly leveraged stadium and sports cable channel?
http://www.amazinavenue.com/2011/1/28/1961287/mets-need-financial-help-madoff-fallout-bigger-than-wilpons-admitted#comments
This is the kind of discussion you get on a sports blog in the U.S. financial capital.
That hot British chick on CNBC, Mandy, must’ve departed from her Goldman Sachs-approved script, because she explicitly tied the Fed’s quantitative easing to the soaring inflation, especially food costs, that is helping to spark unrest in places like Egypt. A major slip-up for an MSM personality. I expect her handlers will be having a come-to-Jesus meeting with her as soon as they can get her off camera, and impress upon her the importance of not deviating from the party line that stimulus saved the planet and the global economy is experiencing a robust recovery.
WASHINGTON – The Obama administration appealed Friday for Egyptian authorities to halt their crackdown on swelling anti-government protests, and an administration official said U.S. aid to the country would be reviewed
This sounds like a belief in the US that Egypt is about to fall.
This sounds like the end of the Iron Curtain during the 1980s. Only this time, it appears that the Middle Eastern countries are all acting like Romania.
I listened to Gibb’s press conference. He was impotence personified. I will now summarize his drivel for you.
Blah blah blah monitoring the situation” blah blah blah can’t comment on those reports blah blah blah we call on all sides to exercise restraint blah blah blah.
It was pathetic.
Gibbs: All governments around the world have to be responsive to the people they serve.
Uh huh.
Like the statement Barack made that he didn’t come to Washington to serve the banks?
Like TARP, passed over 100:1 objections of The American People?
Like Obamacare, passed over monstrous objections of The American People?
Like running $1.7 trillion in deficits last year, and over $4.5 trillion in the last three years, with no plan to solve the problem or even slow it down? Remember, the CBO just updated their projections, after your boss added $500 billion more to the deficit for this year.
Like false claims - lies - on virtually every single political claim made during his campaign?
Like refusal to insist on prosecution of those who filed false affidavits - 150,000 cases of perjury?
Like refusal to insist on indicting Bernanke for perjury before Congress, when he said he wouldn’t monetize the debt?
Like refusal to insist on indicting the banksters that caused this collapse in the first place, even though we have sworn testimony of intentional deception, such as the Citibank bad loans that were made and sold off?
Like refusal to deal with the fact that if we cut to zero every Federal Program other than Medicare, Social Security, Medicaid, Unemployment and Welfare, we would still be running a deficit after you paid the interest on the debt? That is, you can’t even balance the budget today if you not only cut the Pentagon to zero along but you also cut everything else to zero, including the budget for the guy who sweeps your carpet in the Oval Orifice, and this is ENTIRELY your responsibility.
There’s no inflation here, right? That’s why cotton is up 300% in the last two years, wheat has nearly doubled, oil is trading near $90, oats have more than doubled, soybeans have nearly doubled… all but cotton in the last year?
Responsive to the people Mr. Gibbs? Really?
What happens when Egypt comes here Mr. Gibbs? What happens when the budgetary reality becomes realized risk? What happens when the market collapses because all of this speculation that you have not only encouraged but have driven through policy turns into a 90% stock market collapse and the literal cessation of trucks on the highway and food on the shelves?
Does it have to happen here, Mr. Gibbs, before the government becomes responsive to the people?
The people have spoken.
Repeatedly.
“What happens when Egypt comes here Mr. Gibbs? What happens when the budgetary reality becomes realized risk? What happens when the market collapses because all of this speculation that you have not only encouraged but have driven through policy turns into a 90% stock market collapse and the literal cessation of trucks on the highway and food on the shelves?”
when it comes here…you’re gonna get a boot full of “freedom” shoved right up your ass.
Gibbs is gone in two days. Then the next guy will be saying the same things these guys have said for decades.
Disclaimer: The aforementioned commentary calling out Gibbs on his sanctimonious “All governments around the world have to be responsive to the people they serve” pronouncement are from Karl Denninger at Market Ticker, not mine (though I feel the same way).
Right!! Its silly that he should be advising others when he has not done much himself.
You mean like in 2006 and 2008?
Jim Grant on Bloomberg TV: “I think what would be very good for the Fed if there would be a confession, the Fed should confess that it has sinned grievously, and is in violation of every single precept of its founders and every single convention of classical central banking. Quantitative Easing is a symptom of the difficulties that the Fed has created for itself. The Fed is running a balance sheet which if it were the balance sheet attached to a bank in the private sector would probably move the FDIC to shut it down. The New York Branch of the Fed is leveraged more than 80 to 1. Meaning, that a loss of asset value of less than 1.5% would send it into receivership if it were a different kind of institution…The Fed is now in the business of manipulating the stock market.”
Glad to hear more people (with strong voices) publicly coming out against all the money printing that has been going on.
As if the unregulated world of money changing wasn’t leveraging up to
40 times ,which was a big part of the problem . When the Fed gets in bed with the Devil what do you think is going to happen .
School Hailed by Obama Succeeded by Firing Teachers, Bucking Union
The Weekly Standard | 26 Jan 2011 | MICHAEL WARREN
President Obama spoke last night about the need to “win the race to educate our kids” and asked if we as Americans are “willing to do what’s necessary to give every child a chance to succeed.” He highlighted one school in particular—Bruce Randolph School in Denver. “Three years ago, it was rated one of the worst schools in Colorado; located on turf between two rival gangs,” Obama said. “But last May, 97 percent of the seniors received their diploma. Most will be the first in their family to go to college.”
What Obama failed to mention is how Bruce Randolph turned its situation around: firing teachers at will after being granted an exemption from union rules.
Here’s what the ABC affiliate in Denver reports:
Bruce Randolph was a middle school when it opened in 2002. In 2007, Denver Public Schools gave Bruce Randolph School permission to operate autonomously. It was the first school in the state to be granted autonomy from district and union rules.
Each teacher then had to reapply for his or her job. A published report said only six teachers remained.
LOL: the O telling Mubarak to deliver on his promises. Well that pretty much sums up American representatives. All talk and no action. How about he deliver on his promises? How about punishing the guilty who caused the financial mess? How about punishing those who knowingly sold liar loans? How about punishing Wall St banks that sold CDS they did not have the capital to back. How about that?
Sickening, isn’t it? Laughing and barfing at the same time does weird things to the sinuses.
Did O promise that?
The campaign promise was “change”. He also said that he did not come to DC to be a friend of bankers. What changed? Nothing.
Obama promised “change”
We thought he was talking about a course correction.
He actually meant coins instead of dollars.
Bravo, brahma!
World stocks tumble on Egypt unrest! (Reuters)
Seems like the financial lords of the universe get nervous when the peasants get rowdy! Let’s hope they get even more uncomfortable going forward.
Economic note: Just went to the DC Auto Show. Always a good time. Significant sticker shock though. Equivalent cars to the one I got nearly 10 years ago, which cost in the low 20s, are now all in the low 30s.
How can that be in the midst of a recession? I’m guessing lending for car loans must still be very robust. I saw so many luxury vehicles in the 40s and 50s, which would have been in the 30s in the early 2000s.
Also - big SUVs - all in the 50s. With gas prices as they are? Curious.
Many years ago as auto loans stretched to 60-months the banks began to feel risk as the vehicles were worn out before the loans were completed. The solution was for the big three to open their own lending facilities, e.g., Chrysler Credit, Ford Motor Credit, and General Motors Acceptance Corp (GMAC). The auto companies used Wall street to sell bonds composed of auto debt to pension funds. Today loans of 72-months or 84-months are being written–likely guaranteed by the federal government. FWIW, my coffee barista is driving a 2011 crew-cab Tundra PU.