Bits Bucket for April 1, 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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Rate on 30-year mortgage remains below 5 percent but home sales and prices are still weak
NEW YORK (AP) — Fixed mortgage rates rose slightly this week, but the average rate on the 30-year loan remained below 5 percent.
Freddie Mac says the average rate on the 30-year fixed mortgage rose to 4.86 percent from 4.81 percent the previous week. It hit a 40-year low of 4.17 percent in November.
The average rate on the 15-year fixed mortgage increased to 4.09 percent from 4.04 percent. It reached 3.57 percent in November, the lowest level on records dating back to 1991.
Mortgage rates tend to track the yield on the 10-year Treasury note, which rose this week. Investors sold off Treasurys on fears the Federal Reserve might end its bond-buying program sooner than expected.
Low rates have done little to jumpstart the weak housing market. Home sales remain sluggish and prices are falling in most major markets. Most analysts expect prices to decline through midyear.
I haven’t checked closely, but I believe Japan’s mortgage interest rates largely stayed low for the duration of their twenty-year real estate crash (so far).
As I suspected, low rates are insufficient to stop a real estate crash from occurring in the aftermath of a collapsed housing bubble.
Stable interest rates
Since the mid-1990s, the BOJ key rate has remained below 1%. The BOJ implemented a zero interest policy for most of the period from March 1999 to July 2006. The BOJ then raised the key rate up to 0.5% from February 2007 to September 2008. With the global financial crisis, the BOJ cut the key rate twice in 2008, to its current level of 0.1%.
Bank variable interest rates have hardly moved in Japan since 2000, standing at 2.745% since September 2009.
…
How’s their inflation rate on non-real estate type stuff? I’d be interested in how long you can maintain that without driving your foodstuffs into the stratosphere.
“How’s their inflation rate on non-real estate type stuff?”
It’s called deflation over there in Japan.
Japan Urged to ‘Seize This Moment’ or Risk Another Lost Decade After Quake
By Christopher Anstey and Mayumi Otsuma - Mar 31, 2011 12:53 AM PT
Japan begins forging a road map for recovery from its worst postwar disaster next month, a process that may determine whether it sheds the legacy of the 1980s bubble or has a third “lost decade” of stagnation and deflation.
…
In Japan the stuff that people need daily such as groceries (food), clothes, home appliances have all increased over the past decade. Via anecdotal information from my visits over the past 3 years, young people in the age group of 16 to 25 are hard hit since they do not have any jobs and depend on parents for their spend money. Some in their 30s still live with their parents. Lot of my friends typically bemoan the fact the eating out is expensive - eating at McD’s is considered a status symbol - generally food costs about $10 per meal for decent Japanese stuff.
I now see that low cost clothier brands are cropping up with jeans and casual stuff made in China. Still, these cost about $30 to 40. The made in Japan clothes are excellent but one has to pay a hefty premium, which only the well to do can afford - just like here. Japanese are hardy and adjust a great deal. They also have a population replenishment problem. I think the young are waiting for their parent’s generation to retire from their steady and high paying jobs. I submit that 10 -15 years from now Japan will have to import engineers and tech personnel just to stay competitive in the technology sector.
“…eating at McD’s is considered a status symbol…”
I had no idea the situation in Japan was that desperate.
“They also have a population replenishment problem.”
Population replenishment problems go hand-in-hand with aging populations facing hard times.
2010 census results: Why did US population growth slow?
The US added some 27 million residents in the past decade. But that population growth is small, percentage-wise – 9.7 percent. Only during the Great Depression decade was the growth rate lower.
…
Traders Worry That April 27 Could Derail the Bull Market
31 Mar 2011 | CNBC
Traders are saying the scariest moment of the second quarter will be on April 27, when Federal Reserve Chairman Ben Bernanke will hold the first ever press briefing following a monetary policy decision by the central bank.
This change in the Fed’s communication with the markets alone is enough to give investors the jitters, but the nervousness is compounded by the anticipation of a signal by the Fed chief as to whether the quantitative easing that has fueled this bull market will continue past its stated end date in June.
“I think Bernanke wants to continue to ‘QE3,’ but the rest of the Fed does not, and if he has to admit that on the air, it could be the turn,” said Steve Cortes, founder of research firm Veracruz LLC.
Bernanke used to do whatever he wanted to do, now he has to hold press confrences to justify his actions and to sell these justifications to the American public.
The first thirteen trillion dollars (or whatever the amount was) that the Fed threw out into the world was EASY for it to do because few people knew it was doing it. Now that people know people are not happy, so now throwing money out into the world is not something the Fed can just do at a whim, it has to SELL the idea to the public.
“I think Bernanke wants to continue to ‘QE3′, but the rest of the Fed does not, and if he has to admit that on the air, it could be the turn.”
IMHO one should look for fewer QE programs in the future, not more of them.
“IMHO one should look for fewer QE programs in the future, not more of them.”
Is that because MORE QE programs would mean cash is not king?
but more like a rook?
Spooky’s been payin’ attention.
Is that because MORE QE programs would mean cash is not king?
but more like a rook?
Hey, if it were me naming the chess pieces, I’d bust cash all the way down to pawn. Darn cash. People want to save it, not spend. Bad people. Bad, bad, bad.
Note: The above graf is just me doing some April fooling. Of course I think that cash is king.
I doubt that he feels he needs to sell the public, he just wants to join the media event that is our government in some other way than having Ron Paul browbeat him incoherently. My bet is he blames the Congress for any negatives anyway. Their efforts to create artificail demand are heroic and the Fed is just a parasitic enabler.
If we didn’t borrow to spend, on the personal and government level both, the banks would be strangled. We are all volunteers in this debt pyramid mess.
“I doubt if he feels he needs to sell the public …”
People are pissed. They wonder why the banks get bailed out and they don’t. There was an election held a few months ago and the results of that election expressed this anger.
What Congress giveth congress can taketh away. The Fed exists at the pleasure of Congress. Bernanke knows this thus he needs to sell his ideas to the electorate which is something the Fed has never has had to do before.
People are pissed. They wonder why the banks get bailed out and they don’t. There was an election held a few months ago and the results of that election expressed this anger.
From where I see it, there are a couple of notable things about the last election:
1. A lot of PO-ed people turned out to vote. And, oh, did they register their discontent.
2. A lot of other PO-ed people stayed home. I think that more than a little of this was driven by what they saw as a lousy field of candidates.
I seriously doubt he will say anything concrete like we are definitely going to end QE. He has to keep everyone guessing, if he get’s too many people swinging to one side of the tight rope all bets are off.
My guess is he wants to improve the image of the FED, ie propaganda to make people feel the FED has the countries best interests at heart. It should be good for a few laughs.
I wonder two if he will use it to put pressure on Congress to prevent budget cuts. He wants the gov to keep borrowing.
“IMHO one should look for fewer QE programs in the future, not more of them.”
And who will buy $1.6 trillion $$ worth of treasuries? Serious question. Who is left if not the FED? China is selling. Japan, they have a strong need to raise Yen to deal with various disasters. Maybe some suckers from EURO land in a “flight to safety”. Still, I can’t see enough demand for that kind of supply. Do you?
“Still, I can’t see enough demand for that kind of supply. Do You?”
Not at zero interest rates. Which means - what? - that interest rates will have to rise to attract interested borrowers? If so then that means the price of money will be going up, no?
The price of money going up in a contracting economy will make for some very interesting times.
Cash …
“Not at zero interest rates. Which means - what? - that interest rates will have to rise to attract interested borrowers? If so then that means the price of money will be going up, no?”
No, that will crash the economy. The FED knows it, congress knows it, you know it, I know it and the Lord knows it. So that’s not an option.
Wouldn’t take very high interest rates to start eating the entire budget. If the tipping point isn’t behind, it is close.
“Wouldn’t take very high interest rates to start eating the entire budget. If the tipping point isn’t behind, it is close.”
The US has a lower debt to GDP ratio than Germany, France, Singapore, the Netherlands, Japan, Brazil, Austria, etc- many of which already pay higher rates than us. The tipping point must be a little further out, or maybe a lot (look at Japan, even before the latest disasters).
“The US has a lower debt to GDP ratio than Germany, France, the Netherlands,”
Does not. Those are fantasy numbers. The debt GDP for the US is around 100% for the countries mentioned above it is in the 70-80% range
“The US has a lower debt to GDP ratio than Germany, France….”
I was just looking at receipts, debt and expenditure. The US took in around $2.2T in 2010. Let’s be generous and say it will get to $2.5T this year. Debt is at $14T. Even interest rates of 4% would take over 20% ($.56T) of the receipts in interest payments. No debt paid down at all, and only $2T left.
The 2010 budget was $3.3T (not sure exact expenditures.) In order to balance the budget for 2011, expenditures would have to be cut by 40% if interest rates were at 4%.
“Those are fantasy numbers. The debt GDP for the US is around 100% for the countries mentioned above it is in the 70-80% range”
My numbers come from the CIA Factbook. You can look it up. Several other sources verify my numbers. Where do you get yours, Mike?
I’m talking about public debt to gdp. These are the numbers:
Japan 226%
France 84%
Germany 79%
Austria 70%
Brazil 61%
US 59%
If perhaps you thought I meant external debt to gdp, well, we’re doing better than many other countries there, too. Our external debt to gdp is lower than that of Australia, Italy, Germany, France, Hong Kong, Austria, the Netherlands, Switzerland, Belgium, Noway, the UK, and many others.
My links:
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html
http://www.cnbc.com/id/30308959/The_World_s_Biggest_Debtor_Nations
Al- You shouldn’t use a single year’s income during a depression to postulate about future payments, any more than you should use a single year from a boom period. We had higher debt to gdp after WW2, and were paying that down handily- til Ronny Raygun showed us a new way.
“…if he has to admit that on the air, it could be the turn,…”
This sounds ludicrous to even suggest. Why would Bernanke announce a QE3 decision during a press briefing?
Instead of QE3 why not the repatriation of foreign trillion dollar profits tucked away from the IRS. Why not get that straightened out if he wants to continue practising Kynesian policies - which have been a complete failure.
Dow real volume only half of normal - prices high - why in the world would anyone want to put more money into a loser with absolute certainty that only additional QE programs would keep the market up?
Companies have the cash to do what they want from their four years of savings in this Great Recession - responsible companies do not currently need Wall Street’s phony cash.
They should outlaw this fast double dipping being done on trades as well with their super fast computers because this will lead to a hyper drop when the market reverses.
Ben has been right all along. Get all of the bad on the table NOW. No more shadow inventory, no more stock hype (which was never needed in the first place), no more municipal stimulation packages. It will hurt but it will establish a base to start from.
Then have in place a really really good innovation plan with appropriate assistance.
“Why not get that straightened out if he wants to continue practicing Keynesian policies - which have been a complete failure.”
So far I see no evidence the Fed factors success or failure of past policies into their future plans. Rather, they tend to blithely ignore past failures, or use econoganda to hide them.
Traders are saying the scariest moment of the second quarter will be on April 27, when Federal Reserve Chairman Ben Bernanke will hold the first ever press briefing following a monetary policy decision by the central bank.
Eeeeek! A press briefing! Help me! Help me!
The Irish plan to suck it all up.
http://www.rte.ie/player/#v=1095329
Ireland wants to hit bank creditors, ECB says no
AP - 1 hr, 6 mins ago
DUBLIN - Ireland still wants to force foreign bondholders to bear losses in debt-crippled banks but is being blocked by the European Central Bank, which has the lenders on life support, Finance Minister Michael Noonan said Friday.
Realtors Are Liars
Not that I disagree in any way, but do you ever worry about an organization with so much capital coming after you?
A pack of blond bimbos in leased Lexus crossovers SUVs with realtor signs on the doors, has fanned out across America, hitting all the bars, roadhouses, juke joints, and specialty tea stores, always asking the same question wherever they go,
“Where is the one known as ‘Realtors Are Liars’?”
I’m not concerned about the membership, although you paint a funny picture, I’m concerned about the association itself.
You mean, like, with guns? Or with lawyers? Because I don’t think that it would be hard to examine the dealings of a random sample of realtwhores, find the lies and then extrapolate to say to yes, they are in general, liars.
Hey Andy, NAR and anyone else reading…. I have a bulletin for you.
.
.
.
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REALTORS ARE LIARS
A pack of blond bimbos in leased Lexus crossovers SUVs with realtor signs on the doors, has fanned out across America, hitting all the bars, roadhouses, juke joints, and specialty tea stores…
In just one very entertaining sentence, alpha-sloth has described a good chunk of Tucson’s street traffic. And, no, I don’t enjoy bicycling on the same streets as these vermin.
Try West Palm Beach…everyone thinks they belong on the island.
The part I enjoyed was that all those Lexi were “leased.” You think they got the money to buy the 3-year old Lexus, or to lease a new one? I admit it, I want to see these folks get their just deserts.
Not that I want to see them on the street. I just want them to give up the McManse and the Lexi, and live in a nice little shack and drive a 5-year old car and have to share a doctor’s waiting room with lots of sick kids and buy the cheap wine from the bottom racks in the store. Is that too much to ask?
“And, no, I don’t enjoy bicycling on the same streets as these vermin.”
Was followed down the street by these clowns in a beat up Accord with bass shaking the windows, weed-smoke blowing out of the windows. They kept over-taking me at high speed butgetting passed at the lights.
DUI at 8 AM (or any time) is not cool. UI at 8 is fine (or any time).
Was followed down the street by these clowns in a beat up Accord with bass shaking the windows, weed-smoke blowing out of the windows. They kept over-taking me at high speed but getting passed at the lights.
Here’s a fun little thing to do: Note the vehicle make, model, color, and license plate. Then, when these cretins can’t see what you’re doing, pull out the old cell phone and dial 911* for a really good time.
I can almost guarantee that the cops will have something in their database on these people. Y’know, fun stuff like probation violations, failures to appear in court, and outstanding warrants. Note that I didn’t mention the weed, but the cops will no doubt take an interest in that behavior as well.
—-
*If you’re a real frugal type — and I know that a lot of you are — did you know that any cell phone calls 911 without the need for a calling plan? It’s the law. So, be safe and carry a 911-only phone with you.
Be skeeerd!! Be very skeeerd!
So, Polly, Read the WaPo this morning?
http://www.washingtonpost.com/business/economy/pressure-grows-to-rein-in-compensation-at-fannie-mae-freddie-mac/2011/03/31/AFmfemCC_story.html
———
In 2009 and 2010, the companies’ top six executives earned a combined $35.4 million, nearly half of which went to the chief executives.
In a written response, Fedearl Housing Finance Agency officials said it is necessary to pay private-sector rates to recruit talent: “No existing government agency comes close to being able, without relying mainly on private-sector contractors, to manage a $5.5 trillion mortgage credit portfolio, interest rate risk on $1.5 trillion, simultaneously maintain the structures to handle roughly 70 percent of all new mortgages and deal with serious delinquencies on an unprecedented scale.”
——–
These talented guys have really set the bar high. I can close my eyes and just envision the CEOs scrutinizing mortgage applications and foreclosure cases, green visor beneath a bare light bulb dangling from the ceiling. The last line of defense for the American Dream. C’mon brave companions, follow me!
Excuse me all, sometimes I slip into a fantasy world.
EXACTLY. All that work is being done by people making orders of magnitude less than the CEO. And if the CEO had been clever enough to avoid being dragged down into the morrass of bad mortgages and unpayable debt that is sinking our economy, perhaps they’d have earned their salary. But all those high paid “Talented” CEOs in the financial world were, for the most part just riding the rising tide. But now it’s as if the owner of the Exon Valdiz claimed they needed to pay the captain a high salary because getting OFF of the rocks was so much harder than navigating the channel, even as the Coast Guard managing that effort and the spill cleanup.
Thanks for pointing out the article, Jim.
I’ve said it before and I’ll say it again. Public/private partnerships (where the private entity is for-profit) don’t work. The public goal is a policy goal. The private goal is to make money. They don’t mesh. So, if you want a public entity that can provide a safer version of mortgage securitization for loans given to people who the private sector won’t touch that is fine. Underwrite the heck out of them. I get that the private sector might find the underwriting work too expensive to justify the eventual return on a safe loan for just $75,000. Proving the income is way more complicated. The family might have 4 or more part time jobs, not 2 full time ones. They might need to be encouraged to get caught up on their tax returns before moving forward. They might need help figuring out if buying is actually a better option for them than renting.
But if you want that that entity to exist, make it a truely public agency with head of the whole shebang getting max pay of less than $200K like all the other civil servants. Any bonus (small) is based on reaching the agency’s policy goal which may include telling a bunch of people they don’t qualify for a loan large enough to buy in their area. And executives don’t go beyond their manadate because they don’t like getting yelled at in Congressional hearings.
Private sector pay is for private sector goals, like maximizing profits. It has no business in an agency trying to carry out a policy mandate.
Partnering with not-for-profit entities can be different but it would depend very much on the entity and the way it compensates its executives.
And just to be clear, the problems of this sort of public/private hybrid aren’t limited to executive compensation. But as CEO pay has ballooned from absurd, through obscene to farcical, that has become the most obvious misalignment of priorities.
Exactly. Executive comp has provide a large chunk of the motivation to do whatever it takes to grow, grow, grow this year even if it means inevitable ruin 3 years from now.
Somebody in my office sent out a retirement e-mail a few minutes ago. 38 years and he had hundreds of employees doing complicated number-oriented work under him. Bet he made less than $160K last year. He does have a pension coming his way. About 76% of average of last three years. Anyone who started after ‘86 or so would only get 38% of average of last three years. No bonus (or overtime or any such nonsense) included in either case.
But as CEO pay has ballooned from absurd, through obscene to farcical
Never fear, the “free-market” is on the “quick” with both a “we’ll-fix-it-ourselves” & “there-will-be-punishment”
Just-you wait&wait&wait&wait-and-see.
Proving the income is way more complicated. The family might have 4 or more part time jobs, not 2 full time ones. They might need to be encouraged to get caught up on their tax returns before moving forward. They might need help figuring out if buying is actually a better option for them than renting.
Back when I was a nail-pounder at Habitat, I became more than a little bit acquainted with the screening system for potential homeowners.
More than a few of the potentials were screened out for the reasons mentioned above. Not to mention the credit score. That was a real application-stopper too.
But the private sector can handle a credit score look up. It is the time consuming stuff they can’t.
Polly, maybe that’s mortgages became so dependent on FICO alone. Hence, the candle-shop owner with the high FICO but little pay suddenly qualifies for a house that is 8x income.
But really, would it have been so difficult to glance at a copy of a W-2?
Well of course part of the problem was when the alternative to asking for a W-2 was to simply charge a little more interest. So NOT asking for a W-2 or any questions that might show that the borrower wasn’t likely to pay according to terms was more profitable than asking.
The public goal is a policy goal. The private goal is to make money. They don’t mesh.”
So are you saying that “privatizing” government may create… a problem? That it may not “eliminate waste” and “save money taxpayer money?”
Oxide,
I helped a friend and her husband with some financial stuff a while ago. She has two jobs including one as an employee and one as a contractor. He has a small business with a partner on an informal arrangement (but no partnership agreement). They are the sort of family I was thinking of. The records are not easy to understand the way it would be with a flat out W-2. It is messy. And an agency that truely had a policy goal of serving people who can’t get private mortgages would have to go deep into looking at debt and expenses as well. It is more than just looking at a W-2 and a FICO score.
Of course, they live with family, have no debt at all and no bank account, but that just made things easier to figure out, not harder.
“The government must also help” That doesn`t sound good.
REFORMING AMERICA’S
HOUSING FINANCE MARKET
A REPORT TO CONGRESS
This paper lays out the Administration’s plan to reform America’s housing finance market to better serve families and function more safely in a world that has changed dramatically since its original pillars were put in place nearly eighty years ago.
Our plan champions the belief that Americans should have choices in housing that make sense for them and for their families. This means rental options near good schools and good jobs.
The government must also help ensure that all Americans have access to quality housing that they can afford. This does not mean our goal is for all Americans to be homeowners. We should continue to provide targeted and effective support to families with the financial capacity and desire to own a home, but who are underserved by the private market, as well as a range of options for Americans who rent their homes.
http://www.treasury.gov/initiatives/Documents/Reforming%20America’s%20Housing%20Finance%20Market.pdf - -
“The government must also help”
After they have already helped so much, they are expected to help still more?
Liberal policies always suffer from the law of unintended consequences.
Point - low interest rates and EZ money terms to make housing more affordable…
Yet it’s the primes, you know, the mortgages the poor can’t get, that lead in foreclosures and defaults.
See “EZ money terms”
This was nothing to do with the poor, except the intent was to allow the poor to purchase homes. Everyone got in on the act…
20% down and income verification at ANY interest rate would have put an end to the bubble before it begun. Oh yeah, and an 80% HELOC limit…
True.
“Liberal policies always suffer from the law of unintended consequences.”
And conservative policies don’t? So they are fully aware of all of the bad consequences of supporting corporations at the expense of individuals?
I suspect conservative policies suffer from the law of intended consequences. Complicated mess we have because I and many many like me am not represented in any way by either party (self employed middle class atheist white male) which does me in on each and every count!
If as individuals we were smart enough to form a AAMP ( American Association of MiddleClass Persons) organization, politicians would listen to us and we would have clout.
As individuals we suffer from the divided we fall end of the together we prosper stick.
I heard figures on the radio news last night to this effect: Congress is squabbling over how to adjust $60 bn worth of federal spending, while ignoring $1.2 t ($1200 bn = 20 X $60 bn) they don’t want to discuss. I presume the latter is the “third rail” of American politics (Social Security, etc), and the report suggested that going there would result in upsetting political constituents.
Can anyone who understands this kindly elaborate on whether the above is an accurate description of the Congress’s federal budget Kabuki dance currently underway? (Better yet, post a reference…)
Business leaders, economists push for deficit cut
By Lori Montgomery, Friday, April 1, 1:39 AM
As lawmakers squabble over cuts to domestic spending, pressure continues to build for a broader approach to the nation’s budget problems.
On Thursday, a powerful group of leaders in the business, academic and economic communities sent letters to the White House and Capitol Hill urging policymakers to work together to reduce the deficit by overhauling government retirement programs and an inefficient federal tax code. The push comes amid growing support for the kind of ambitious deficit reduction plan offered last year by President Obama’s fiscal commission, and recently embraced by a bipartisan majority of 64 senators.
…
and the report suggested that going there would result in upsetting political constituents.
Looks like the repubicans are gonna have a tough go of it in 2012 iffin they succeed in persecuting both hispanics & the aged AARP cult members. Then their promise of JOBS!, JOBS! JOBS!.
AARP under attack in GOP efforts against health law
Published on April 1, 2011 / News-Medical Net
House Republicans issued a report Wednesday and plan to hold a hearing Friday to investigate AARP’s support for the health law as well as the organization’s business interests.
AARP is a shining example of Eric Hoffer’s famous quote, “Every great cause starts out as a movement, degenerates into a business, and ends up a racket.”
Yours Truly is at That Certain Age. And, you guessed it, I’ve gotten recruiting overtures from the AARP.
But I haven’t joined.
Why not? Because even though they’re just sportin’ the acronym, I’m old enough to remember when they were the American Association of Retired Persons.
As mentioned here before, I come from a long line of retirement refuseniks. I’ll retire when I’m dead, TYVM.
So, don’t count on me to join something that represents that which I refuse to do.
In addition, I think that the AARP is nothing more than a business masquerading as an advocacy group. And, quite frankly, even though I’ve reached That Certain Age, I’m not in need of a group to advocate for me. I can open my big mouth (aka The Troublemaker) and do that myself.
Nor am I interested in receiving endless mailings offering dubious deals on drugs. Or insurance. Or what-have-you.
I’ve been getting mail from AARP since my early 30’s.
I think it was the Smithsonian subscription, but I can’t be sure.
After receiving literature and application forms for about 15 years, since I was about 48, I finally joined, only because the auto insurance sold to members was a couple of hundred bucks a year cheaper than anything else I could find. So, $16 to save $200, worked for me. Generally I find AAA discounts to be better than AARP.
“House Republicans issued a report Wednesday and plan to hold a hearing Friday to investigate AARP’s support for the health law as well as the organization’s business interests.”
Can’t effectively attack Medicare and SS until they get rid of the AARP.
Social Security was only $571 billion last year, mostly funded by payroll deductions.
Department of Defense $663 billion.
Medicare $453 billion.
Medicaid $290 billion.
It all adds up you know.
I read somewhere that US entitlement expenditures are on the verge of being more than total federal income. I.e. even if every discretionary budget item was cut (including all of DOD) the entitlement outgo would be greater than the income.
I other thing I saw was even if the marginal tax rate was 100% above a certain figure, it would still not cover the deficit.
I’ll try to track these down this weekend.
The question does not seem to be whether Fannie and Freddie will be phased out. The question is rather how much the array of successor institutions DC cooks up will resemble them.
The Fuzzy Future of Post-Fannie-Freddie Homeownership
Posted by Stan Alcorn
on March 30, 2011 10:20 PM
If you’re thinking about buying a house, thank the U.S. government in advance. They guarantee more than 96% of new mortgages — a guarantee that means you’re more likely to get the money you need. In fact, according to Bloomberg, since 2007 there has been exactly one company that has securitized mortgages not backed up by the government. So why does everyone — and I mean basically everyone — seem to hate the institutions doing the backing up?
Well, because they’re Fannie Mae and Freddie Mac, whose bailout has cost taxpayers more than $100 billion, so far. Along with a third “government-sponsored enterprise” (GSE), the Federal Housing Authority, they make up what the Wall Street Journal’s editorial page today referred to as the “three horsemen of the taxpayer apocalypse.”
It’s less colorful, but the Obama administration’s rhetoric is hardly in disagreement. Last month they laid out three scenarios for the future of the mortgage market; all of them involved phasing out Fannie and Freddie.
…
Because, you know we can’t CONCEIVABLY expect banks to figure out whether a loan they make is likely to be paid off and profitable in the long term. Just like we changed the bankruptcy laws because it’s completely unreasonable for them to only lend money out to CC holders that was likely to be repaid. No the governemnent has an ironclad duty to protect them from their own stupidity. That recent ORGY of stupid loans of all varieties had idiots at EVERY level. But I don’t think it’s unreasonable to expect huge corporations worth billions to be smarter than the fruit pickers, nail technicians, and scrap-booking store founders that the lent the money out to. Another round of Champaigne and Caviar for our banker friends, because they couldn’t possibly get by on tap water and government cheese.
…I don’t think it’s unreasonable to expect huge corporations worth billions to be smarter than the fruit pickers, nail technicians, and scrap-booking store founders that they lent the money out to. Another round of Champaigne and Caviar for our banker friends, because they couldn’t possibly get by on tap water and government cheese.
Bingo! You go, Jim A!
Well, I’m in a vicious mood for completly unrelated reasons, but bankers make a better target for my ire than co-workers.
Perhaps F + F should randomly refuse to purchase 15-25% of loans are completly in conformance to their guidelines. That way banks would know that there was ALWAYS a chance that they’d be stuck holding the bag for any loan that they wrote.
But…but…but…that would mess up the flow of capital!!! If the banks had to hold on to a percentage of their loans instead of selling them all, they wouldn’t be able to make as many of them! How could that possibly work?
Oh.
Wall Street watchdogs face budget cuts in Congress
Posted by David Brancaccio
on March 10, 2011 3:27 PM
At a time of dramatically increased responsibilities for two key financial regulatory bodies, there are strong calls to cut back on funding for the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
The fighting goes on after the Senate this week rejected plans that included cutting the CFTC’s budget by nearly a third. One consumer advocate told us this kind of cut, if enacted would “destroy the agency.” You may have seldom reflected on the CFTC, but it’s the regulator being asked to oversee a $300 trillion piece of the derivatives market.
…
Hey when you cut the number of police, you lower the reported crime rate. It’s a win-win. /sarcasm
When criminals control the purse strings which determine the police department’s budget, society is in trouble.
What could possibly go wrong?
Colorado’s $1bn budget shortfall is small change compared to California’s $26bn budget hole. I’m still confused by why all these budgets have to be fixed at the same time. Why, for instance, did California manage to kick the can down the road for the duration of The Governator’s tenure in office, but now poor Jerry Brown has to face the music?
At the same time, the Democratic White House faces the same kind of challenge. I guess if our country survives this financial episode, the Democrats will deserve a reputation as the party of fiscal discipline.
Think You Can Balance Colorado’s Budget? Try It.
Posted by Stan Alcorn
on March 15, 2011 8:41 AM
Backseat_Budget_Colorado.pngIt’s not exactly World of Warcraft, but Backseat Budgeter tries to turn balancing a state budget into a game. Get started and you’ll see a gas-tank-style gauge tilting towards empty, and a flashing red alarm: “Your budget has triggered a constitutional warning.”
That “constitutional warning” is Colorado’s billion-dollar budget shortfall for the next fiscal year. It’s unconstitutional in every state except Vermont to run a deficit, and the game lets you decide where to cut and where to raise revenues to deal with it.
…
OK, I tried it. I switched Colorado’s flat rate income tax to a graduated rate, and guess what?!
Their $450,000,000 a year deficit suddenly became a $690,000,000 a year surplus, and they can keep all current programs and services.
But the rich would have to pay more taxes, so I guess that’s a non-starter, right budgetary ‘realists’?
Hey, assuming all the rich stay in Colorado, your plan works fine.
They pay over 4.6% there already. One assumes those who will uproot and move to avoid paying taxes would have done so already, no?
And following your logic, we shouldn’t tax the rich at all.
What happens when they go to Nevada?
“What happens when they go to Nevada?”
Nevada realizes how easily they could solve their budgetary problems by imposing a graduated rate state income tax?
And why haven’t they moved there already?
Yes, because new taxes always spur growth…
Well by that logic, nobody should be taxed at all, or else anyone with any money will flee to tax havens like the Cayman Islands.
oh wait…
Not no taxes, but no additional taxes. You lefties really get me with your attitudes toward giving away YOUR money. Obviously you have self esteem issues and feel that you don’t deserve it.
Those folks in Aspen ain’t going nowhere. Especially not Nevada!
“What happens when they go to Nevada?”
And why haven’t they moved there already?
Because the place is a blast furnace and an armpit?
“Growth”=The Federal Reserve’s way of saying INFLATION.
Yet some many are ignorant to this truth. Fools wave the stupid flag and cheerlead for inflation and they’re too dumb to know it.
If I was a rich person living in the foothills of Boulder (800k+ houses), I probably would stay put if my taxes got raised. Think about it — if it’s all about money, I would have moved to Nevada or New Mexico or Utah years ago for the lower cost of living. Seriously, how many people are going to move to a desolate salt pan just to save some money on taxes?
Take a look at the migraton out of CA to avoid the onerous taxation of that State. Fidelity investments is moving its operations from MA to New Hampshire. Boeing moved its HQ from Seattle to Chicago and is relocating manufacturing to S.C. So, yeah at the margins, the rich can be quite mobile. They can afford to be.
“Not no taxes, but no additional taxes”
So the tax burden is currently perfect everywhere? Never needs to go up. And if there is a time when it can go down it always and forever has to stay at the lower level? Wow, that is odd.
Every month, around the 25th, I move a certain amount of money to my checking account - then I tell my bank to send the rent check so it arrives on time (4 day lead). Then I pay other bills out of the money in the checking account. I take cash out of that chunk to buy groceries and gas. And I save up in that account when I know that large but managable bills (like 6 months of auto insurance or an airplane ticket for Thanksgiving) are coning up.
Recently I decided that since my expenses in the new apartment are a little higher and just because I wanted to, I should give myself a raise. I’ve been living on the same amount per month since I moved to DC and in that time my salary has gone up because of two promotions. I never let that impact my spending, but eventually going without buying any new clothes or a new computer or a few other things catches up with you. I need to spend a bit more, so I added $300 a month to the amount I move into my checking account which I can afford to do nicely. And now I am building up a surplus in the checking account to buy the computer and some clothes and whatever else I need. I know it won’t go up too much, because I have decided how much more I should get to play with and I won’t go beyond that.
That is a reasonable way to deal with a budget. A lot of the time you can keep functioning on the same amount, but eventually you can’t. Now, in a town you can decide to cut the budget, by increasing class sizes by 20% or making all the rec programs charge fees that pay for all costs or something like that, but that is just as arbitrary a decsion as it is to split the difference and have some cuts in services and some tax increases.
To pretend that the current tax burden is the perfect amount or the maximum amount is an arbitrary set point. It is giving in to the idea that a dollar you never see is somehow less valuable than the one you do see. They are the same. The difference is all in your head.
Yeah, they won’t even move to Wyoming (with no income taxes!) because of image and amenities. And for that move they wouldn’t be giving anything up as far as climate and views go.
I prefer northern NM, Santa Fe, to Boulder. And ABQ to Denver!
CO has too much snow to shovel. Great in the summer!
Not to rain on the parade…but when NJ raised taxes on its richest residents (i.e., Wall Streeters) a few years back, many of them *did* indeed desert to NY or CT. This has been one of the more important elements of NJ’s current budget issues.
(Not that I’m opposing upping taxes on the rich, mind you.)
“CO has too much snow to shovel. Great in the summer!”
A popular misconception. I shoveled perhaps 5 times this past winter. And by “shovel” I mean i pushed one of those plow like shovels to remove 3 inches of snow from my driveway.
“Yeah, they won’t even move to Wyoming (with no income taxes!) because of image and amenities. And for that move they wouldn’t be giving anything up as far as climate and views go.”
Ding, ding, ding! Eastern Wyoming is an ugly dump. Laramie and Cheyenne are both eyesores.
Boeing moved to Chicago to be closer to DC.
It was to hard to fly from Seattle to the East coast.
Eastern Wyoming is an ugly dump. Laramie and Cheyenne are both eyesores.
Maybe so, but western Wyoming is just as nice as the front range without all the people. For some that’s plus, for others a minus.
Bad Andy, it’s nice to know you favor burdens for those least able to afford it to benefit the few who can more than afford it.
How’s that despot thing working for you? You good with it?
Boeing moved to Chicago to be closer to DC.
Ha, nix, nix, nix.
The workers, whose jobs are being ship to “Quasi-Vietnam”, knew where the “exempt”…
“over-paid”fair compensation…”Senior Management” …lived in the beautiful state of WA.Where do you think the rich folks would go after they left Colorado? Maybe California?
“He said, ‘Caleefornia is the place you ought to be,’ so they loaded up the truck and they moved to Beverlee —
Hills, that is … swimming pools, movie stars.”
California is proof that the quasi-socialist model of progressive liberals doesn’t work. You can’t help the little guy forever or he will have no motivation to become more. Obviously those who are mentally or physically unable to become more have to be someone’s problem, but I contend that those are not the ones benefiting most from this failed system.
“Where do you think the rich folks would go after they left Colorado? Maybe California?”
The taxes would be kept somewhat in check by TABOR, so all those nice rich people don’t have to worry about
California style income tax rates or Texas style property taxes. Yeah, their taxes would go up a bit, but would still be a pittance compared to many other places.
“You can’t help the little guy forever or he will have no motivation to become more.”
Yeah, that’s why we need to cut funding to Community Colleges and Universities. All those students who are trying to improve themselves have no motivation.
Where did I say anything about public education?
Frankly public/state universities are a scam. There is a system that has more waste than any I’ve seen and it’s perpetuated by a populace who holds a piece of paper in higher regard than an individual. Would you like to tell me where my biology requirement in my business undergrad program has benefited me today?
Community colleges are a different animal all together. They still have core requirements that make no sense at all, but they’re a 2 year training ground for your particular field of study…and the cost per credit hour is a fraction of what it is in traditional state universities.
I would speculate pressure to reduce funding for community colleges comes from public and private universities.
Our education system from K - PHD has become a massive money making scam.
I would speculate pressure to reduce funding for community colleges comes from public and private universities.
And I would tend to agree. Here in AZ, the smart folks are taking their first two years of classes at community colleges. The class sizes are a lot smaller, the instruction’s generally better, and the tuition’s a lot cheaper.
Needless to say, the universities are less than thrilled. But they do accept transfer credits. After all, without CC transfer students, university enrollments would crater.
I don’t think private universities are in on it. Let’s just compare two colleges in Michigan. Baker college(a private institution) is at $205 per credit hour and Ferris State University is at $331 per credit hour. With state funding shouldn’t the public university cost less?
You’re right about the education system though. It’s become a mess and it’s up to public and private employers to shake up the status quo. When we start demanding job-ready graduates things will change…or people will go straight into the workforce.
“Baker college(a private institution) is at $205 per credit hour”
It’s also an anomaly. Most private schools are charging $1000 per credit hour.
“and Ferris State University is at $331 per credit hour”
And it’s $195 at the University of Northern Colorado in Greeley.
And if you have a 3.5 High School GPA it’s $0 at Mesa State College in Grand Junction.
It’s not an anomaly. University of Phoenix (a for profit institution I’ll add) charges $450 for classroom instruction. Slightly more than Ferris. I picked a middle of the road public school to compare to middle of the road private school.
Walsh College charges $320, Cleary University charges $345 and includes textbooks. The list under $500 per credit hour with no state funding in Michigan alone is absurd.
University of Phoenix (a for profit institution I’ll add)
And a diploma mill that anyone can get into. And still more expensive than CU, CSU or UNC.
“The list under $500 per credit hour with no state funding in Michigan alone is absurd.”
I have yet to see a real private college (non diploma mill)in the Centennial state that doesn’t charge close to $1000 per credit.
And FWIW, the amount of state funding our state schools get has been shriveling up for years. Some are land grant schools, which has helped.
There are state colleges in neighboring Nebraska that charge about $125 per credit (waived to $0 if you have good grades).
Anyway, my guess is that most midwestern state schools have net costs under $500 per credit.
Also, I believe that at the $1000 per credit schools that few students actually pay that much. When daugher #1 was finishing highschool she received tons of 50% scholarship offers from 2nd tier private schools around the country. The catch was that they were charging up to $1000 per credit, so compared to the local state schools it wasn’t such a good deal.
University of Phoenix is accredited. Classes are required and coursework is required. How do they meet the definition of a diploma mill again?
“California is proof that the quasi-socialist model of progressive liberals doesn’t work.”
So what does that make Texas?
“How do they meet the definition of a diploma mill again?”
When you are trying to get a job and people won’t even consider your application because they know that the program doesn’t teach what they need employees to know. Or you can’t get a state license in your field because you haven’t fulfilled all the requirements. There have been numerous articles about the problems with the for-profit schools, their recruitment practices and the atrocious repayment rates their graduates have on their student loans.
“You can’t help the little guy forever or he will have no motivation to become more.”
And what happens when all of the little guys “become more”? If they all have degrees in engineering, engineers will be a dime a dozen. Feel free to substitute engineer for your field of choice. Perhaps we will have to import more little guys.
“But the rich would have to pay more taxes, so I guess that’s a non-starter, right budgetary ‘realists’?”
And there was a prop last election to lower the Colorado flat rate even more, by about 30%. It went down in flames.
Its amusing to read the Denver Post, especially when the issue of the budget comes up. That’s when all the Tea Baggers come out and leave their opinions after the articles. They are convinced that Colorado is some sort of socialist haven. The truth however is that taxes and spending are low (spending per capita is the same as in Texas)
Yes but Texas has 5 times the population of Colorado. Economies of scale.
So teachers and cops are cheaper by the dozen?
Nope…if anything Colorado is doing more with less.
Texas is a much poorer state than Colorado.
Economies of scale work against you in a huge state when you must provide services to remote areas.
Loving county has a population of 82.
“Nope…if anything Colorado is doing more with less.”
We’re trying, but sometimes when you have less, you do less.
Case in point: my son was taking German in high school, but it got cut in his junior year as the teacher was laid off.
Also, the school looks really decrepit. It’s painfully obvious that needed maintenance has been put off for years.
Teacher pay has already been cut.
You do know that Texas is running a deficit equal to California’s, right?
“Economies” of something, but it sure isn’t “scale.”
Concerning tax increases in a State . Make a 10 year rule that
a person pays the tax rates of the State they moved from . I’m sick of the blackmail from the rich that they will take their marbles and leave if they get tax increases .(This is just a suggestion ,I don’t know if I am serious about it ).
One of the problems is this raiding mentality . The Corporations raided America and now they are taking their business to foreign Countries . I don’t consider them American Companies anymore .
This idea of raping America by the credit expansion and than leaving for greener pastures is annoying . It takes a viable tax base to run a Country and this fleeing mentality is part of the problem .
As long as we are held hostage the Elite will continue to call the shots . Tax the daylights out of them and if they want to import put a penalty tax on it for taking jobs from America .
I’m calling for penalty taxes for a while at least in the name of
restoring America . This is the way to deal with the problem ,not giving incentives for gutting America and taking the money and running . This idea that you can get the shortfall by going after the depleted middle classes is a joke .
The corporations left under the guise of free trade. Remember that free trade must be fair trade. Therefore if I’m importing more than I’m exporting to any particular country it’s no longer fair. Throw in tax loopholes for these characters and you have a real mess.
I have a hard time with your blaming people for leaving their particular state. If one state cannot handle it’s financial cards people ought to have the freedom to find a state that can.
True Bad Andy ,maybe States should be more uniform in their tax structures . I was just making suggestions . The point is the problems have to be solved . I’m just in favor of cutting off at the pass this tendency for people to avoid their fair share by any means possible . That is the ongoing problem these days and it has created money flowing to just upper sectors leaving the coffers depleted .
You can’t overhaul a system and design it to avoid the Rich .
“Remember that free trade must be fair trade. Therefore if I’m importing more than I’m exporting to any particular country it’s no longer fair.”
Didn’t the US used to be THE major exporter?
We were THE major exporter until we tried to make things “fair.”
Why, for instance, did California manage to kick the can down the road for the duration of The Governator’s tenure in office, but now poor Jerry Brown has to face the music?
I’ve not followed closely, but I remember Arnold trying to make cuts, and getting push back from CA’s legislature.
Am I mis-remembering that Arnold advocated and tried to make cuts?
You’re not mis-remembering. Cuts weren’t made when it was necessary and restraint wasn’t used when times were good.
I was able to balance it by eliminating some tax breaks…some of which I’m sure would effect me indirectly. I didn’t touch anything else.
I misfired on The Governator link…
Ahnold was an action hero at the beginning, middle and now end of his career. During the middle part, he was incidentally also governor of California.
Here is the interview I was recalling where federal budget Kabuki is discussed. Sounds like valuable time and political capital is getting wasted by avoiding discussion of the real issues.
The need to end the debt supercycle in the U.S.
Marketplace, Thursday, March 31, 2011
Author John Mauldin explains why he thinks Americans need to accept a cut in Medicare and a hike in taxes, for the sake of the republic.
…
Mauldin: We’ve got to do two things that the polls say that people want to have and don’t want to have. They want to have a lot of Medicare and they don’t want to see their taxes raised. Those don’t work together. And for me, as a Republican, just saying the word “tax” and “increase” in the same sentence, you know, I get hives. But the only reason that I would use the word “tax” and “increase” in the same sentence is that I am worried about the future of the republic.
Ryssdal: Those are serious words, John, the idea of the debt problem that we have being an issue for the survival of the republic.
Mauldin: I’m quite serious about it.
Ryssdal: I believe you are. But here’s what I didn’t see in the book: between all the macroeconomic examples and the charts, I didn’t see discussion of the realities of the political system and how we’re talking about our debt. We are still in this country having a debate over $60 billion worth of the teeniest, tiniest corner of the margins of the federal budget. And yet we are not in Washington having a discussion any place over the substantive issues.
Mauldin: Over the $1.2 trillion we actually need to cut.
Ryssdal: So how do we get there?
Mauldin: It’s going to take more movement than anybody presently today thinks. The one thing that I don’t believe that politicians are doing right now very well is they’re not explaining the problem. Because if they explained the problem, then they have to start talking about, what’s my solution? And they don’t want to publicize their solution yet because if it was a real solution, it’s going to make the voters upset that would vote for them. It’s kind of a Catch-22 for politicians, I guess.
…
I thought that the government DID cut Medicare — well, at least they cut the profit-skimming portion of Medicare called Medicare Advantage, not the actual care.
The truth is that “nobody” wants to discuss “solutions” because those solutions seem to involve taxing the people who have excess leftover money. By “excess,” I don’t mean somebody can afford an Avalon over a Corolla. I mean the second yacht, and the third house, and using social security for drinks at the clubhouse at Pebble Beach.
First ,if you don’t address the price fixing Monopoly prices (such as health care ) you keep the problems . No reason why we can’t reduce health care costs by 50% to the cost of other industrial Nations .
Also ,need to take the profit motive out of Health care and make it
just a single payer system . I say price fixing to the low side with a Government run system . Also you could raise the portion that seniors
have to pay on Medicare ,or means test it . I’m sorry but paying for seniors to have cheap health care at these inflated price fixed prices is breaking the Country .
I think Medicare only pays for a short amount of time on assisted living ,so that costs goes to the Senior anyway in their end days .
Look ,to not address the big Elephant in the room is absurd . Health costs are cracking almost every sector of our economy .
The fact that you collect when your a senior for years of paying in when you were healthy is the issue because that is when the Insurance Companies want to dump to person ,or they want to dump a younger payer that might need health care .
Since the private Health Care Companies have no interest in anybody but healthy insurance payers ,and they want to dump the rest on the Government we should have a Government Medical system .Years ago the private insurance Companies weren’t gouging ,so they lost their right to this racket they have created .
The only reason that Drug Companies and Doctors can charge the
prices they do is because the system is a racket . The fact that so much is spent on defensive medicine ,and other ills of the industry
is another problem . A entire overhaul is needed . The Government can not afford to keep the private sector in the money while the Government gets the real costs . Can’t say that the Health care bill
solved anything ,but the Insurance Industry most likely wrote the bill to begin with .
The fact that so much is spent on defensive medicine
wouldn’t the root of this issue be individuals who feel the need to sue whenever something goes wrong?
I agree there are a lot of problems with our system, but it’s a rational response to be “defensive” when the average tom, dick, or harry is just waiting to size the opportunity to sue you for millions.
We all make mistakes in life and our jobs. Most of us aren’t subject to huge punitive damages for those mistakes.
The state that implement tort reform in medical malpractice haven’t realized much (if anything) in the way of savings. Believe me, you would know about it if they had. The docs do defensive medicine now because it means more procedures which makes them more money. The best way to deal with this is to find a way to reward the docs that don’t do it. Good luck figuring that out.
The best way to deal with this is to find a way to reward the docs that don’t do it. Good luck figuring that out.
Interesting. I bet if insurance wouldn’t cover these “defensive” procedures they’d stop doing them. If people had to pay cash and actually scrutinize the expenses things might change.
On a related note, I had my surgery yesterday. Asked the doc himself point blank about a cash discount (right after the surgery - clearly the drugs they gave me weren’t strong enough). He said no - the CC only charges 1-2%. Still seems ridiculous to me.
I wondered about that when the Republicans took over the House. During the healthcare debate, all they did was scream about Tort Reform and Selling Insurance Over State Lines. So, why didn’t they introduce single bills to reform tort and sell insurance over state lines, and add that to Obamacare? Instead, they wanted a wholesale repeal.
So, why didn’t they introduce single bills to reform tort and sell insurance over state lines
Fair point, but how many bills cover a single issue these days, regardless of the subject?
I recall that being proposed several years back - mandating a bill cover a single issue/subject. Of course politicians don’t want that to pass otherwise they couldn’t attach emotional legisliation to appropriation bills to ram them through.
Title: Endgame: The End of the Debt Supercycle and How It Changes Everything
Author: John Mauldin and Jonathan Tepper
Publisher: Wiley
Type: Non Fiction
Released: March 8, 2011
Length: 318 pages
All across Europe, nations from Greece to Ireland are buckling under massive amounts of debt. Greece nearly defaulted in 2010, sparking economic jitters throughout the global markets. That could happen here, says investment advisor John Mauldin, if we aren’t careful. In his new book Endgame, Mauldin looks at what he calls the debt supercycle in this country and how it is coming to a bad end if we don’t cut our deficit. And to do that, we all need to make some serious compromises: accept tough cuts on Medicare and a hike in our taxes.
…
WE all need to sacrifice except for the elite who should retain their capital gains tax cuts and loop holes. We all need to take one for the team.
Exactly.
Yet another budgetary ‘realist’ who explains in common-sense terms why we all need to retire much later and with less benefits, but who never happens to mention that if the rich paid the same tax rates as everybody else, we would solve our budgetary problems- with far less economic hardship and dislocation, and far more justice- than his ‘common sense’ proposals.
“…if the rich paid the same tax rates as everybody else, we would solve our budgetary problems…”
You mean a flat tax?! Good, i am all for it.
I am too. Exclude the first $50k of income to cover basic living expenses and we all agree.
Right? RIGHT?
maybe, but where do you get 50K? why not 60K or 40K?
GE ain’t gonna be happy with a flat tax…
“GE ain’t gonna be happy with a flat tax…”
No kidding. The clueless corporatist apologists on Main Street haven’t figured that out yet. Watch them do an about face when they do figure it out and declare, “no flat tax!”. lmao.
If there is an exclusion, it really isn’t a flat tax anymore. It is a graduated tax with two levels. Where am I going with this? I don’t know. It’s April Fools day, my day of honor.
You would have to have a exclusion for basic living expense or the poor would get screwed to much . It’s absurd to continue this insanity whereby the Rich get the tax breaks that allow for 5 Mansions instead of three Mansions . This Country functioned
very well when the richer paid higher taxes .If all the rich want to leave the Country ,good ,make a law that they can’t take
any money that was made in America with them to avoid the taxes they owe . I’m serious .
GE will be just fine with a flat tax. First of all, the corporate tax is pretty flat already. Second, with corporations the issue is the definition of income, not credits or deductions. They don’t pay tax on their revenue.
If you want to make the corporations livid, tell them they have to pay tax on the same profits they report to Wall Street. And then tell them that loss carry backs and carry forwards are gone. Real people lost income averaging a long time ago (still available to some farmers and ranchers, I believe), but the corps still get it by being able to take today’s tax losses, apply them to last year’s income and get all the taxes they paid last year back. Or if they didn’t pay any last year, they can keep those losses in reserve to apply against income in future years - up to 15 years I believe.
Oh, and cutting some of the accelerated depreciation deductions would help too.
+1 Polly!
Just make corporations pay taxes like individuals do — on revenue, not on profit. Wouldn’t it be nice if I were taxed only on my leftover money at the end of the month…
Umm…that isn’t really what I said. I’m OK with taxing a business on profits. You don’t pay tax on the money you had to spend to make anything at all. But the multi year carry back and carry forward is what gives you corporations with gigantic profits paying no tax and getting money back. They wait until they have tax losses from whatever to repatriate the money from overseas (if they want to) and never pay tax on it at all.
And allowing orgs that have gigantic losses on their taxes to turn to wall street and brag about the best year ever which is why we need to give our top execs another $100 million is just too much. It is a game. It shouldn’t be.
“If there is an exclusion, it really isn’t a flat tax anymore.”
Not really. It is a flat tax on income after a standard deduction. Maybe $15K for the first person on the return, $10K for every dependent. A family of 4 would end up with $45K as the standard deduction.
accept tough cuts on Medicare and a hike in our taxes.
“TrueReducetheDeficitNOW!™” + “TrueAnger™” has an odd “1st priority”
need-to-doaction list.$700 Billion …per year…”fund-me-more”, “fund-me-more”, “fund-me-more”
Peace & saftey for the shores around Miami, FL is expensive. You could include Carmel, CA to I reckon. Oh, and Bangor, Maine too!
I was discussing the CA community college budget cuts with my hairdresser last night, who works full time, attends college and is raising a family. She made the situation sound pretty grim from the vantage point of her college (Palomar); there is barely enough money in the coffers to keep operations going.
Hard working people who are trying to improve themselves will be hurt by this cut. But at least the Wall Street banksters are seeing their bonus pay and profits steadily increase, so I guess it’s all good.
State and Municipal Budget Crisis
California budget cuts hit community colleges
By Jennifer Collins Marketplace, Thursday, March 31, 2011
Hundreds of thousands of students will find themselves battling for fewer spots in community colleges. The cutback in classes could ripple through the economy.
Kai Ryssdal: Congress may have solved its short-term budget problems, but outside the Washington beltway, 43 states are in the middle of their own negotiations. Almost all of them deep in the hole. Here in California, the deficit could be as much as $26 billion.
Talks have broken down. And community colleges are warning that cuts may force them to turn away 400,000 students. Marketplace’s Jennifer Collins takes a look at what could mean for the state and the country.
…
“The cutback in classes could ripple through the economy.”
What is rippling through the economy is the lack of money.
I give the students credit for trying to improve themselves, to learn new skills, but what jobs are they training for in high unemployment California?
Budget management?
Criminal Investigation?
Paralegal for bankruptcy/foreclosure lawyers?
Abandoned Home Maintenance and Repair?
Nursing!
Cypress College has a booming program in: Mortuary Science!
Really!
Oh, and Toyota
my-car-won’t-stop!automotive repair.If we want to compete with sweat shops we are going to need more sweat shop workers. Did you try to explain this to her. As the article above states we all need to be ready to make sacrifices.
Who needs community colleges when you can go to Buffet’s diploma mills with Uncle Ben’s money?
Please elaborate!
Business looks past federal budget impasse
By Heidi Moore Marketplace, Thursday, March 31, 2011
U.S. businesses are shrugging off a possible federal government shutdown, but are concerned about whether the debt ceiling will be raised.
Kai Ryssdal: Tomorrow is the exact halfway point of the federal government’s 2011 fiscal year. So it’s appropriate to note that today there finally seems to be agreement on a budget for it. Democrats and Republicans in Congress have come to terms on about $33 billion in cuts to be made over the next six months. That’ll help avoid the first government shutdown in 15 years.
But there’s an item on the Congressional agenda that Wall Street’s a whole lot more worried about. The debt ceiling — the legal limit for how much the Treasury Department’s allowed to borrow — at the moment: $14.3 trillion. A tidy sum, but Treasury’s already right up against it.
Our New York bureau chief Heidi Moore reports.
…
This is a page from the Palm Beach Post.com money section that has become as much a part of the local news as sports and weather. I call it “The soft landing” section.
The Foreclosure Crisis
Lannis Waters/The Palm Beach Post
Homeowners who choose foreclosure
Strategic default a common tactic in business world. Comments 74
Foreclosure crisis: Complete coverage.Decrease attributed to fall’s moratorium , analysts say. They predict an uptick early this year.
Are you affected?
Mobile Version Do you believe your foreclosure is fraudulent? *
Yes No
Have you stopped paying your mortgage even though you can afford it?*
Yes No
Do you know anyone who has decided to do a strategic default?*
Yes No
How has the real estate bust impacted your neighborhood?*
.The Latest in Foreclosures »
South Florida law firm’s demise puts 9,000 foreclosures in limbo Wednesday, March 30 | Comments 4
Palm Beach County courts will sort through nearly 9,000 wayward foreclosures in a cattle call of cases from the collapsed Law Offices of David J.
Chase demands Ben-Ezra & Katz turn over foreclosure files Tuesday, March 29 | Comments 12
Foreclosures’ hidden risk: Debt that haunts for two decades Monday, March 28 | Comments 112
Florida settles with Fort Lauderdale firm over foreclosures Saturday, March 26 | Comments 18
More news .
Chief judge asks foreclosure attorney to reconsider unilateral decision to quit cases
Fannie Mae loan help available in South Florida
Foreclosure prevention workshop planned for April 5 in West Palm Beach
Florida foreclosure backlog still tops 300,000 as court budget debated
AG Bondi rejects portion of foreclosure fix plan for its “moral hazard”
More blog posts on foreclosures, share comments .
Foreclosure Q&A Replay the live chat with real-estate reporter Kimberly Miller on the foreclosure crisis.
. What you should know There’s more to foreclosure than just stopping your mortgage payments and handing over the keys.
Today should be a great day for U.S. stock owners; SOL time for gold bugs.
No fooling!
U.S. adds 216,000 jobs
Nonfarm payrolls expand more than expected, while jobless rate dip to 8.8% is a welcome surprise.
Possibly 99′ers running out of benefits?
What a steaming pile of BS. The math just isn’t adding up. We need to create more than 100,000 jobs per month just to keep up with the increase in the labor pool. The idea that a few hundred thousand jobs had such a drastic effect on the unemployment rate is nonsense. The real reason it’s declining is poor survey practices. People are falling off of unemployment rolls, so they are no longer counted. Homeless and jobless? You don’t count.
And what kind of jobs were these? More of those wonderful “less that $500/week” jobs?
http://www.bls.gov/cps/cps_htgm.htm#where
I’m not defending the statistical methods, but the unemployment rate is not based on how many are collecting or not collection U/E benefits. The BLS conducts a monthly survey of 60K households asking a very specific set of questions to attempt to determine the employment status of the employable members of the household. To the extent they are not employed the survey attempts to determine if the respondent has given up looking, and hence off the roles.
Lots of aging boomers who are laid off probably answer a survey that they are looking even though in reality they are not, mainly to avoid compromising thier U/E benefits (The state demands you look). Once the U/E benefits run out, they are free to answer a bit more candidly, thus statisticly leaving the UE roles. (not bashing aging boomers, I am one, and that is exactly what I will do if my current job comes to a premature end)
Is the sampling method statisticly sound? I suppose a panel of statisticians could debate that endlessly, but I would think it is within a reasonable margin of error. Besides, 8.8% is nothing to write home about.
One dynamic that I have wondered about such sampling is the method of completing the sample. In prior years, all the sampling was done by telephone, specifically land lines. In today’s world, a large percentage of households no longer have such service. Some have chosen cell phone only and some for financial reasons have disconnected service.
Anyone with insight to the process, please shed some light on the current process of sampling.
How the hell can it drop to 8.8% when it was at 10% just last month?
Grizzly is right. This is bullcrap. The numbers don’t add up. The numbers CAN’T add up.
The stock market is going up everyday. The bubbles getting bigger in China, India, Canada and Australia. No check no where. Here our paychecks are getting smaller and inflation is kicking in. UE is high. What do folks predict for the next 12-18 months:
–Inflation kicks in higher.
–Would there be COLA at our jobs? 2-4%? Would that be enough to cover inflation?
–RE prices go down due to shadow inventory? Would they go higher later due to inflation?
–Would the stock market correct by 20-30% or there would be QE3?
–Would DC metro area prices ever correct?
–Gas at pump will be $4.50 soon. Would it break the recovery hype?
–???
- Inflation in consumer goods follows commodities and labor cost. 5-10% inflation is likely.
- COLA, the ministry of truth will massage the numbers so that officil inflation numbers stay in the 3% range. So the standard of living will take a 2-4% hit this year.
- RE might regain some luster as an inflation hedge. On the other hand, desperate local governments will increase property taxes. That only goes so far until people revolt as a recent recall election of major Alvarez in Miami goes to show. 88% were in favor to show the blood sucker the door.
- I see no way around further QE measures. There are simply not enough buyer for new US treasuries. The FED is buyer of last/only resort.
- DC and NY price will likely stay high. That’s were a lot of the money flows from less fortunate parts of the country.
- Oil/Gas. Hard to say what’s speculation and what’s true demand versus supply. When will PO start to bite? Time will tell. I wouldn’t bet the farm one way or the other.
- Corporations are increasingly less dependent on US consumers to generate profits. There are plenty of new consumers in emerging economies. High unemployment makes for low wages, corporations love it.
- Complete unwillingness from Congress to do much about the deficit. They are bickering about 60 billion in cuts from a 1600 billion deficit. Pathetic. This will continue until some external events force drastic and catastrophic change. See Greece, Ireland, etc.
- plan for a slow but steady erosion of the standard of living. At about a 2-4% rate per year.
…just my $0.02
“…just my $0.02″
Sorry, it costs $0.03 now.
Sorry, it costs $0.03 now.
$0.005 if you pay in copper.
No, it cost 10 cents now.
“plan for a slow but steady erosion of the standard of living. At about a 2-4% rate per year”
The Master Plan for the past 30 years. And yet they expect us to buy houses and $30-$40K cars?
“Complete unwillingness from Congress to do much about the deficit. They are bickering about 60 billion in cuts from a 1600 billion deficit. Pathetic.”
There’s no way they can cut that much, yet expecting the wealthy to shoulder some of that burden is out of the question.
It will be interesting to see what happens when the SHTF and Uncle Sam can longer borrow. Medicaid and food stamp payounts will end. Our military will have to be recalled, adding millions to the unemployment line (not just soldiers).
The Decision Makers never look in terms of the fleecing of America by the Rich for the last 20 years . It’s about time they give back .
The middle class has been left in ruins and the issue is how to restore America to it’s previous function . If the trends continue
we are just going to be a shell of a Country .
50% of the workforce making less than $25k says we are already a shell of a country.
15,000,00 out of work says we are a shell of country.
The list is long.
““…plan for a slow but steady erosion of the standard of living. At about a 2-4% rate per year”
The Master Plan for the past 30 years. And yet they expect us to buy houses and $30-$40K cars?”
Marie Antoinette couldn’t figure this out either.
We get COLA’s in January. Layoffs are in June.
Inflation kicks in higher.” Yes
Would there be COLA at our jobs? 2-4%?” No
RE prices go down due to shadow inventory?” yes
Would they go higher later due to inflation?” who knows ?
Would the stock market correct by 20-30%” yes followed by
there would be QE3?
Would DC metro area prices ever correct?” No
Gas at pump will be $4.50 soon. Would it break the recovery hype?
Yes
Over a million new US green cards issued in 2010:
http://www.google.com/hostednews/afp/article/ALeqM5jn-X7EB-2UTet_cH4XTRUNYfMpUg?docId=CNG.583ef7d6a1392216410f7979124fc957.aa1
I have family in a rural town that lost it’s only doctor to retirement about a year ago. Their incoming replacement doctor, who is from India but educated here, has work permits in process. I see this as a win/win, an under served area gets a doctor and the doctor gets an opportunity to stay.
(Just hope the culture shock of rural life here doesn’t get to him.)
The frustrating part of that for me is that my guess is that a local child probably would have been very willing to go to medical school if they could have gotten in and paid for it. And the local community probably would have been willing to help pay for it, for a local student who committed to staying around. But the current system for admissions into medical schools doesn’t allow for that…the kid has to compete with the next generation of plastic surgeons from the coast who have been training to compete on medical school admissions since pre-school, while the local kids were working at DQ all that time.
“Nearly two-thirds of the new recipients obtained the legal residency status based on family ties to a US citizen or legal US permanent resident.”
Congratulations unemployed and underemployed Americans, on top of all the kids graduating from High School and College you have an extra million new competitors in your job hunt!
Good luck! (You’re gonna need it).
If the hiring manager is a foregin Born person its most likey the foriegn new graduate gets hired
Managers like to hire people they can work with
When lets say the indian manager walks into a conference room and all the indians stand up and the Americans are looked at each other and laughing well who do you think the next hires will be?
It goes higher than that. I’ve heard stories of foreign-born citizens in the government who decide who gets the grant money. Usually, the lucky winner of the grant has a last name of the same ethnicity.
unemployment falls to 8.8% while underemployment rises to 20.3%.
the new normal?
Probably.
If an employer is forced into going into survival mode and this survival mode means hiring two part-time workers to replace one full-time worker because the net cost of two-part time workers is less than the net cost of one full-time worker than that is what the employer is going to do.
These actions juice up the unemployment numbers but hose the underemployment numbers.
What if survival mode includes laying off everybody to pay for gas?
Just curious, what’s the source for the 20.3% number? Shadowstats?
there was a link on drudge.
could ya give it to us?
There is NO WAY UE fell from 10% to 8.8% in one month.
No. Effing. Way.
Almost 2 million jobs had to be created.
156,000,000 x 8.8% = 13,72,800
15,600,000 - 13,729,800 = 1,870,200
156,000,000 = total workforce population.
Item: Amazon’s South Carolina Tax Break
More than 1,000 new jobs depend on it.
Amazon.com said it would build a distribution center creating some 1,250 new jobs in the Midlands of South Carolina, provided they don’t have to collect state sales taxes on goods shipped to S.C. residents.
Amazon presently does not collect state sales tax on books and other goods it ships into the state. Why should it? South Carolinians are already honor bound to pay the state sales tax on all un-taxed things they buy via mail order. However, human nature being what it is a great many South Carolinians are liars and fail to accurately report their non-taxed purchases from out-of-state sellers.
If Amazon had a retail store in the state it would be required to collect the tax. But it doesn’t. So, it says it will pull the plug on its new distribution center if it forced to collect the tax.
It’s not that South Carolina doesn’t offer fantastic tax breaks for lots of business entities. BMW, for instance, makes expensive cars in South Carolina - but if a South Carolinian buys one he/she pays only a $300.00 sales tax on it, which is but a fraction of the usual 6 percent sales tax on goods. Obviously, South Carolina tax law is in serious disarray.
The big question now is, “Who’s going to blink on the issue? The S.C. Legislature or Amazon?”
Amazon just closed a center in Texas over the same issue.
Personally, I think Amazon is being prickish over this. They know exactly where the goods are being shipped, they’re getting nearly instantaneous payment via credit-card. Transferring to a state ACH account would be stupid simple for them.
It wouldn’t be hard to do the tax collection, they just don’t want to do it because it will cut down on sales. People use amazon just to AVOID paying sales tax. They’re doing it to maintain a competitive advantage that they don’t deserve.
That being said, I still love amazon and buy most of my books there. However, every year I total my amazon purchases and report them for sales tax in California.
SC is one seriously messed up, bass-ackwards, state.
Inflating doughnuts…
Krispy Kreme swings to loss; to hike doughnut prices
Mar 31, 2011
(Reuters) - Krispy Kreme Doughnuts Inc (KKD.N) swung to a fourth-quarter loss hurt by higher costs and said it expects to increase prices to counter rising input costs this year, sending its shares down 12 percent in after-market trade.
The doughnut chain, which competes with Dunkin’ Donuts, forecast fiscal 2012 net income of $22-$24 million, assuming it manages to mostly offset higher costs through pricing increases.
Hershey just announced a 10% price hike on chocolate and I remember a similar hike less than one year ago. Next they are going to say gum prices are going up at which point we will be in a gum-bubble.
Hersheys chocolate is better than the wretched stuff Palmer’s molds into bunny shapes, but it’s still pretty crappy. It’s waxy in texture and its chocolate taste is weak. Ditto for what is sold as Cadbury in the US. Pure rubbish. If you want to buy a decent chocolate bar at the grocery store, it’ll have to be imported, most likely from Switzerland or Belgium (WalMart used to sell a store brand chocolate bar made in Belgium that was pretty good and priced about the same as a Hersehey’s bar.)
In Colorado
We’re Hershey’s people. That’s the beauty of choice. We can vote with our money.
Palmer’s is usually “chocolate flavor”. It’s pretend chocolate.
Until I met my other half, I hated sweets.
If you want to buy a decent chocolate bar at the grocery store, it’ll have to be imported
I don’t know about that. There are more places making chocolate than Hershey’s. We have quite a few local chocolate factories here in Seattle with very tasty goods.
Thus buyers will eat fewer donuts, Krispy Kreme will fire workers and close stores.
Krispy Kreme-I’ve never could understand that fad. It reminded me of a donut bubble (lemmings). If I am going to eat a donut (seldom), I want chocolate icing, and nuts or sprinkles. I’m from the old world, I guess.
With old-fashioned cake donuts, you really are just paying somebody to clean up the mess. The ingredients and time to make the batter are cheap, quick and easy. Probably just a fraction of their KK’s expenses.
Thanks for the donut lesson, MrBubble. I’ve got 3 lbs to Bikini time, so I am need to buckle down and get off the winter fat layer. It’s back to eating veggies. Man, the aging process sucks (but not as much as the destination).
Congrats to you!
I lost 25 lbs on the LiveStrong program (just calorie counting/exercise logging), then put it all back on after my surgery. I started back on it last week at a goal of 1 lb per week and I lost: one pound. One pound down, thirty to go… Ouch!
Not so many donuts in my future.
MrBubble
I hope your sugery was successful!
I lost my Visceral Fat in 2005, although I was a daily treadmill gal, my eating habits were atrocious. Now I eat lean protein, veggies, light on the carbs and sugar. Winter is full of more junk and comfort food.Time to get it off. My numbers (weight & blood) are much improved since 2005! I am usually lean and healthy.
I haven’t heard of that woe (way of eating). I’ll check it out, thanks.
The cops are going to start losing weight?
What you didn’t know ’bout the “1st responder” + 3 xtra donut holes… discounts?
“Housing Is Dead”: Bubble Still Bursting Here and Abroad, Says Harry Dent
Worse yet, the bursting of the housing bubble will continue until we’re back to pre-irrational exuberance levels, he tells Aaron in the accompanying clip. “Just to erase the bubble, (housing) has to drop 55% [from the peak], not the 33% we’ve seen on the Case-Shiller thus far.”
http://finance.yahoo.com/blogs/daily-ticker/housing-dead-bubble-still-bursting-abroad-says-harry-20110331-092812-715.html
Manhattan Apartment Prices Decline 9.9% as Condo Sales Tumble
(Bloomberg)
Manhattan apartment prices dropped in the first quarter as condominium sales plummeted and new- development deals made up the smallest share of the market in almost seven years.
The median price of all properties that changed hands in the quarter fell 9.9 percent from a year earlier to $782,071, appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said in a report today. Total sales were little changed at 2,394 as demand for co-operative apartments offset the plunge in purchases of condos, which tend to be more expensive, said Miller Samuel President Jonathan Miller.
“The co-op and condo market seemed to be polar opposites this quarter,” he said in an interview. “The disparity between the two forms of ownership is probably temporary, but clearly was a primary cause of the overall decline in price indicators compared to last year.”
Overall sales held steady as New York City’s jobless rate stayed at 8.9 percent in February, unchanged from the prior month and a percentage point lower than a year earlier. The city’s private job count rose by 11,100 in February, as employment in the financial industry increased, according to the state Labor Department.
The shift in apartment demand sent condo transactions down 24 percent in the first quarter from a year earlier to 964, according to Miller Samuel and Prudential. Sales of co-ops climbed 29 percent to 1,430. New developments, which are primarily comprised of condos, accounted for 14.5 percent of the sales market, the lowest since the third quarter of 2004.
Great news on the jobs front, storms over no need for any more Q-E’s. The Bernake was right and saved the day!
does that mean he can raise rates now too?
You know how he will pitch it of course, “QE is working, QE is working, slowly we can see job growth. We better keep the momentum up or we will be back where we started, or worse. We must show our resolve and determination to the people of America, to the world. We must do QE3 before it is too late”
I’m in the process of selling my house. I’ve been ghosting around here for over 3 years now, and posting sporadically. It’s amazing how powerful the system is. Even after having read thousands of posts, I’m still finding myself believing that my house is in some small way special. And that my neighbourhood is that much better than the others that I should get a premium when selling. It’s almost as if it’s different here.
It’s no wonder people who haven’t got their regular HBB innoculations get housing fever.
“I’m still finding myself believing that my house is in some small way special.”
I don’t think that is surprising since so much of the American Dream is based on a complex subjective idea of what constitutes the good life: a “Home”, etc.
It’s what keeps marketers in paychecks.
If you just put in granite countertops and travertine tile baths and stainless kitchen your house is indeed special. You have arrived.
Nothing so ‘fancy’, but still nice. The trophy home seekers won’t be interested.
Al
As a primary home buyer (cash) it’s all about price per sq ft, size of lot, value, and how much deferred maintenance. We’re not as subjective as many. Best of luck, and keep us informed.
(Oh, and we opened our door on a Sunday night to driving the neighborhood buyers, and sold to them the next day. Be flexible, even if people are a pita.)
You’d probably be the kind of buyer we’d be looking for (rational), except it’s still rather bubbly here (Ottawa, On) so bad time in general to buy. Looking for a greater fool.
I might be getting out just in time; better not still be listed late spring.
Al
I know you are aware of UHS “buying a listing”, where they tell you a top price to get you to sign a contract w/them, and then the monthly price decreases start, as you follow the market down. Very common in So California, where we live.
In Canada, are sales done through a Realturd or do you guys use Attorneys like some states in the U.S.?
I hope you sell quickly and have a hassle free escrow. Moving is dreadful.
I live in a “Preservation Zone” in a “Historical District” in a “Pride-of-Ownership” neighborhood neighborhood. Two of three descriptors are legal in nature, the third is a judgement call. Worth paying extra for without blinking! Third is true -
Much more to consider than price per square foot. Schools, of course. Cruise for graffiti. Bus stops. Retirement homes. Zoning consistency. Gardening and paint. We get 20 or more people every day walking their dogs. Several cats cross our porch. Proximity to Police and Fire Departments and hospitals is excellent.
Variety of, and proximity to, shopping in varying price range and quality. Proximity to freeways unless retired also a factor.
As others have mentioned, deferred maintenance can be a killer, look at what year flood year map the property is on, and visit the neighborhood at all hours of the day and night for weeks. It will be your home, not an investment. The required due diligence rises exponentially!
Good luck, Al and family.
liz pendens op/ed brief on why QE and money-printing in general will not work:
The general idea has been sold (somewhat poorly and incompletely) to the people that the bulk of the “stimulus” (money-printing because there is no real money to use) required to “save” the financial system and therefore society is to go to the large financial institutions. Every effort has been made to provide a profitable operating environment for the big banks including direct cash depostis (TARP) to relaxing accounting standards to dropping interest rates to zero to QE stimulus. So money is definitley unarguably being given out at that level with the fruits of the effort being displayed in the stock market and overspeculated commodities prices.
Then there is the matter of everyone else: Quite a challenging problem and one that will be the undoing of the whole concept of “money-printing” as a solution. In order to implement the whole plan, the government has been required to expand and/or create programs to give “hush money” to the would-be angry masses that are being left out. The task is simply just too large to cover every base without creating further outcry among all the needy outstretched hands. There has been/will be fighting and dissent among the have-nots in the quest for fairness in the distrtibution of what will always be too little too late. This problem is on top of the even bigger problem of there being no real money to use as “hush-money” in the first place. The plan is about as poorly planned and far-fetched as any plan that has ever been concocted for any problem in history and is riddled with endless disastrous potential mistakes. Quite simply, there is zero possibility that the whole scheme will work.
Knowing that the course our leaders have chosen to take will ultimately fail, there is little that can be done to prepare for the inevitable as the failure will be catastrophic on a macro level. The outlook is depressing to say the least, but at this point we are all but helpless to affect the outcome and can simply watch and wait for the actual horror of the first tsunami waves to roll in. The importance of enjoying every day and making an effort to do things you enjoy/have always wanted to do right now cannot be overstressed. Tomorrow you may not be able to.
Nice article
“In order to implement the whole plan, the government has been required to expand and/or create programs to give “hush money” to the would-be angry masses that are being left out. ”
This is food stamps unemployment etc. These are not programs for the poor but programs to keep the poor from eating the rich and scaring the middle class.
“The task is simply just too large to cover every base without creating further outcry among all the needy outstretched hands. ”
This is because the needy base is growing. The wealth stripping machine of Wall Street is running out of a middle class to strip wealth from.
“This problem is on top of the even bigger problem of there being no real money to use as “hush-money” in the first place”
We cut taxes for the rich so no real money available. Printed money is actually real money though. I spent some yesterday.
The bottom line is everything the FED has done and our tax policy concentrates wealth at the top. Our trade policy concentrates wealth at the top. The numbers don’t lie with around 70% of all wealth and 80-90% of financial wealth controlled by the top 5%. This number has likely grown. This will ultimately destroy democracy in this country.
woo hoo!
got a job with Goldman Sachs!
OK, michael — congrats. I take back anything negative I may have ever said here about great vampire squids.
Who says there are no jobs!
Do they issue you a knife in case you have to rob somebody face-to-face instead of the usual way?
they’re putting me in charge of god’s taxes.
face-to-face
Speaking of that…
“hey, look on their employee participation calender, how many days does GoldenmanSucks Inc. have scheduled for “greeting-the-returning-us-soldiers”? Do they deduct it as “comp” time?”
Movin’ on up! Michael, you’ll probably want to bookmark this page.
http://www.sothebysrealty.com/eng/sales/search
April 1st or for real?
April 1st.
michael
I was happy for you, but wondered if you could live with the hypocrisy. Good one.
“hypocrisy”
Well, we’ll see what develops with your new “Sit-u-ation”…
2 day ago…
Comment by michael
2011-03-30 08:15:44
“kinda like why i have work till 67 to enrich green technology exploiters…they are doing it for me”.
Playing the Devil’s advocate, wouldn’t the knowledge that so many banks were able to obtain below-market-rate loans during the Fall 2008 financial crisis increase the incentives for banks to qualify for such free insurance in the future?
I’m hoping that banks which didn’t qualify as too-big-to-fail put together a class action suit against the Fed for lending discrimination.
MARKETS
APRIL 1, 2011
Banks Face Borrowing Stigma
Publicly Released Details of Fed Lending Could Show ‘Weakness,’ Say Some
By LUCA DI LEO And MAYA JACKSON RANDALL
Some banking experts predict that the Federal Reserve’s disclosure of the financial institutions that tapped an emergency-lending tool could make banks more reluctant to borrow from the central bank.
“I have concerns that it will make banks more reluctant to borrow and reduce the efficacy of a critical central-bank function in a crisis,” said Donald Kohn, the former Fed vice chairman who retired in September after 40 years at the central bank.
…
Give me a couple Billion and I’ll wear the Scarlet “B”.
Exactly! I can’t imagine a great vampire squid letting a little stigma get in the way of its blood funnel, if below-market loans are available…
Did Buffett Blow It? The Sokol Story Doesn’t Add Up
http://finance.yahoo.com/blogs/breakout/did-buffett-blow-sokol-story-doesn-t-add-20110331-134834-925.html
Looks like front-running is a Berkshire Hathaway tradition. Investor lawsuits may force SEC investigation.
(Hey! Jeff Macke’s back.)
Double-dip dilemma (Godforbid we can afford one.) 3/29 Former Economist for Fannie interviewed
http://www.msnbc.msn.com/id/42319427/ns/business-real_estate/
Wisconsin recall saga.
“… some observers say only about half of the 16 targeted senators will actually face recall votes this summer or fall. Petition deadlines are in the last week of April for most of the eight Democrats who are targeted. The deadline is May 2nd to file signatures for all eight Republicans whom people are trying to recall. The G-O-P lawmakers are being criticized for their votes in favor of the union bargaining restrictions. The Democrats are targeted for being away from the Capitol for three weeks and holding up a vote on the union package.”
Recalls are happening on both sides of the divide.
http://whbl.com/news/articles/2011/mar/29/recall-efforts-slowing-down/
Recalls are happening on both sides of the divide.
Interesting the article seems to focus on the repubs (and uses “G-O-P”). The dems seem to be mentioned in passing, as if it’s not a big deal to flee the state to subvert the democratic process
They don’t have a filibuster in Wisconsin.
Obama accepts transparency award behind closed doors:
http://www.washingtonpost.com/blogs/federal-eye/post/obama-finally-accepts-his-transparency-award-behind-closed-doors/2011/03/31/AFRplO9B_blog.html?wpisrc=xs_sl_0001
If he ran on despair and sameness he may have lost.
Interestingly enough, the usually hyperactive White House photo office has not posted pix of this event.
Bad Andy’s Question of the Day:
I’ve been following and contributing (used loosely) here off and on for the better part of 5 years. When we left politics out things were much better. How is it that the leftists who contribute can be so pro government intervention while screaming about TARP, bailouts, Fannie and Freddie? That’s proof of what your government will do to you when allowed to get out of control. I ask openly and honestly without any name calling.
“How is it that the leftists who contribute can be so pro government…
I ask openly and honestly without any name calling.”
Who you calling a leftist?
I think you’re more conservative than you think Professor.
I think of myself as very middle-of-the road. Most interestingly, my wife’s inlaws are very liberal and my inlaws are very conservative. To keep the peace, we tend to seek the middle ground.
I personally try to find the strengths in different political perspectives, while repudiating what I think is unfair or counter-productive. Maybe if everyone got past partisan bickering and started thinking about what is good for the future of our country, we could get somewhere.
It’s a control issue and both parties are equally guilty. That’s why I don’t like the two party, corporate sponsored, political model.
Maybe if everyone got past partisan bickering and started thinking about what is good for the future of our country
Turn the envelope over and list 1-10 Gov’t spending actionable items that need to “reduced” in the next 30 days.
My list begins like this (you can share with both relatives):
1. US military spending (if the VA hospitals are in this, flag them exempt)
2. Can the cardboard utensils, replace with Styrofoam (just kidding)
3. Hydro-electric dam maintenance (personnel & equipment)
4.
(This is a rough list, I’ll prioritize it in just a bit, but I can tell you right now item #1 with still be in the same position.)
Hwy, I agree with you on item #1. I think (hope) you are joking on #3— you really want to stop maintaining the best green technology we have?
Dear Bronco,
RE: Item #3
Lucy (as in Charlie Brown’s football holding Lucy) : “Hwy, you’re such a BLOCKHEAD!”
Hopes this clears up any confusion I might have displayed.
Government exists (or should exist) only to provide infrastructure, rule of law, order and a fair playing field.
“…rule of law,…fair playing field.”
Sadly, our political leaders have veered far off course on these accounts. Money corrupts, and too much money under the control of too few individuals corrupts absolutely.
Sadly, our political leaders have veered far off course on these accounts.
It’s not strictly their fault.
The role of politicians is to represent their constituents. The constituents don’t want government constrained to the things GH mentions. Heck, just read the posts here.
The framework (read: Constitution) was supposed to provide for this. The politicians would then represent their constituents within the confines of the framework. Sadly, no one seems to respect the framework anymore.
It seems the only way to fix that is for individuals to respect the framework and stop asking for things that don’t fall within its purview.
It seems the only way to fix that is for individuals to respect the framework and stop asking for things that don’t fall within its purview.
You don’t get it. The framework of the constitution allows the people to decide what falls within its purview. You know, like no slaves now as opposed to before. That totally would have gone against most our founding father’s wishes.
Yes, but things like no slaves, minimum wage, speed limits still come under rule of law and regulation…
Yes, but things like no slaves, minimum wage, speed limits still come under rule of law and regulation…
No slavery is in the constitution and within the framework of the constitution:
The Thirteenth Amendment to the United States Constitution officially abolished and continues to prohibit slavery and involuntary servitude wiki
Obviously our founding fathers did not enact computer and technology related laws. The question is if government has any place in areas like social services, Medicare, Medicaid, social security etc.
Sure a great many people would spend all their money if it were not enforced savings, but then perhaps folks would see what happens to those who do not save and we would be a better society for not having a nanny looking over our shoulder at every step. I can no longer go down to the beach without paying a ranger for parking almost all of which is now commandeered, and while my wife and I used to be able to hike Torrey Pines after dark we are now kicked out by armed guards… I love our “Free America”
“How is it that the leftists who contribute can be so pro government intervention while screaming about TARP, bailouts, Fannie and Freddie?”
How is it that authoritarian conservatives blithely pander, harp and natter about government when it was their very own party who expanded government(TARP, The Low Downpayment Act, The NO Downpayment Act, “The Ownership Society PUBLIC POLICY) and their own leader stated “deficits don’t matter”?
The hypocrisy is stunning.
Conservatives did nothing of the sort. Republicans did. I think you get the two confused.
I stand corrected. You small government “conservatives” were busy expanding government into marriages and sexual orientation and the like.
Marriage is a religious issue and should never be sanctioned by any state or federal government. It’s a religious institution and if yours allows for gay marriage, more power to you. And when I say it shouldn’t be sanctioned that means no marriage licenses and no divorce laws.
You keep using bad government as an example of why we should have more government. That argument just doesn’t hold water with me.
I’m not using anything other than conservative hypocrisy. It’s yours, it’s the theme of “conservatives” to label anyone and everyone to create good and bad according to the conservative ideology. You own it.
You keep using bad government as an example of why we should have more government.
That vaguely sounds like a Cheney-Shrub echo:
You keep using bad “evil axis” foreign government’s as an example of why we should have more US government military spending.
“I’m not using anything other than conservative hypocrisy.”
You keep confusing Republicans for conservatives. Most conservatives I know don’t go around gay bashing under the guise of family values. They also don’t support the government intervention in something as personal as a marriage.
Conservatives also believe in limited (note that it’s not no) government designed around the rights of the individual.
Where’s the hypocrisy there?
I’m not confusing anything. You’re running from your conservative mantra. Stop running, own it and get over it.
Where do these conservatives hold their conventions- in a phone booth?
“Conservatives did nothing of the sort. Republicans did.”
Point taken. Both W and The Governator lost their way.
Both W and the Governator didn’t run as conservatives. I guess W said he was the compassionate conservative, but real conservatives didn’t fall for it, at least not a second time.
Both W and The Governator lost their way.
Wow, was that ever an…accident!
“TrueAnger™” tye-die T-shirts available for the next “anger management” class:
Front: “Reduce the Deficit Now!”
Back: “deficits don’t matter!”
Because the lefties here understand that SOME types of government intervention are “good” and OTHER types of government intervention are “bad.” And that some parts of government started off good, but then turned bad for various reasons
Examples:
1. Government intervening in General Motors was generally “good” because there are far too many jobs attached to GM, and in the grand scheme, it didn’t cost much money.
2. Government intervening in electric utility pricing is “good” because we all need electricity. Without regulations you get a monopoly and gouge pricing like what Enron did. This applies to many “needs” like public transport or food. It should probably apply to more needs like health care.
3. Government intervening by way of TARP was generally BAD because big banks turned out to not quite need the money they said. And besides, if there had been government intervention years ago (ahem glass-steagall and similar regs), we wouldn’t have needed TARP in the first place.
4. Government intervention in housing like FHA, is generally “good” because it allowed first-time buyers to get a head start on a home by saving them some time in saving a down payment. Remember, first time buyers only.
5. Government intervening in housing like Fannie Mae or Section 8, started off as “good” but turned “bad” when corporations or people in bad faith figured out how to game the system. This good-to-bad applies to many government interventions, from food stamps to farm subsidies to the mortgage interest deduction to any number of tax loopholes.
The “sheeple” can’t or don’t make this distinction and have to revert to all-or-nothing slogans because they sound cool and they’re easy to remember.
I can’t disagree with the majority of your points. The exception would be GM. They went bankrupt and would have with or without government intervention. They’re big enough that they would have reorganized without intervention.
1. Government intervening in General Motors was generally “good” because there are far too many jobs attached to GM, and in the grand scheme, it didn’t cost much money.
And as a result they put more stable/solid companies at a competitive disadvantage. Assuming the demand for cars wouldn’t go away if GM went bankrupt (a safe assumption I think), another company (Ford) would expand and pick up the slack. They would hire more people to do this, and thus those jobs wouldn’t be “lost”, moral hazard wouldn’t have been established, and the marketplace would be more stable.
2. Government intervening in electric utility pricing is “good” because we all need electricity. Without regulations you get a monopoly and gouge pricing like what Enron did.
If gov’t supplies the electricity, sure. But the only reason companies can gouge is BECAUSE of the government granting them a monopoly in the first place. How many choices do you have for electricity at your place? I have…one? Why is that? Government.
Dig deep enough and you’ll see that the root of many of the problems most seek to have government solve is the government itself.
And besides, if there had been government intervention years ago (ahem glass-steagall and similar regs), we wouldn’t have needed TARP in the first place.
If we simply let the banks/corporations fail for making bad decisions we’d not have a problem either. The system could actually be self-regulating in that way if we’d let it. But yes, TARP is bad.
4. Government intervention in housing like FHA, is generally “good” because it allowed first-time buyers to get a head start on a home by saving them some time in saving a down payment. Remember, first time buyers only.
Why is it inherently good that someone can buy a house earlier with gov’t assistance than they otherwise would have? Where’s the gain for society? What about the other homebuyers who are at a competitive disadvantage?
IMO, a lot of the intervention that can be argued as “good” is, if you take a very small view of the problem. Often, though, the root of the issue we’re addressing now is some gov’t intervention that was deemed “good” at the time as well.
It’s true that we can’t ignore the current situation, but we should look at what really caused it and address the root problem, not just constantly treat the symptoms.
Utilities is a real sticking point for me. You can’t really have competition for something that requires so much capital from the start. If there were cheap, reliable, and visibly pleasing ways to go off the grid we might have some interesting discussion.
As far as GM goes, traditional bankruptcy wouldn’t have been the end of the company. And you’re right, even if it would have, others would have picked up the slack.
For the FHA, I’m divided on it. If they’re making prudent loans and collecting proper insurance premium for the lack of down payment I don’t see the harm. I also don’t see why a private entity couldn’t accomplish the same thing. The FHA in present form is a tragic joke.
If they’re making prudent loans and collecting proper insurance premium for the lack of down payment I don’t see the harm.
I don’t disagree but that seems like weak justification for the gov’t getting involved at all.
The government’s already there. Fundamentally I’m against being in the mortgage business as a taxpayer. Once I get past that I say that IF I’m going to be in the mortgage business as a taxpayer I’d like them to make prudent lending decisions on my behalf.
Once I get past that I say that IF I’m going to be in the mortgage business as a taxpayer I’d like them to make prudent lending decisions on my behalf.
We’re in agreement. I just wish more would step back and question whether we should be there in the first place and why.
General rule of thumb: None if it is good.
Thanks guys.
I don’t have time to respond right now, but I like this kind of communication — agree on this, disagree on that, compromise here or there, and so on. This is what the country needs.
I also appreciate that we all at least agree that there’s some good stuff and some bad, not the all-or-nothing screeching that fills the airwaves.
Once the rhetoric gets toned down I think there’s a lot of common ground. Problem is it takes common sense to find it. Common sense is what’s missing in Washington.
Thanks for the sentiment you have offered, Oxide. You are one of the open minded lefties that is willing to listen and respond to other viewpoints (and even give in when necessary) while avoiding trivial bickering. Good to have you on the board.
This attitude also makes me more willing to try to understand your perspective.
One is welfare the rich, the other is better regulation and enforcement.
Guess which one the “lefties” want from government intervetion?
That’s right! More welfare for the rich!
Anyone who thinks the politicization of the Fed will lead to tighter monetary policy is insane.
It might be what the Republicans want now, because a double dip would suit their 2012 electoral goals. But history says that would be an execption.
In fact, it says that Democratic politicians are likely to be bad (remember Carter put in Volker) but Republicans are likely to be worse. The Republicans have been deperately selling the future since 1980, and the less of it there is left, the more they will want to sell. And the Democrats haven’t had the guts to stand up to it since 1984, even if they in fact want to.
How can you fund Republican tax cuts and big government programs without running the printing press technology on high blast?
You have to cut entitlements to future generations and stop wasteful spending.
Barring the common sense approach, you can just fire up the printing press and borrow more.
Why is it always future generations that have to get screwed by entitlement cuts? How about if Generation Greed kicks in a little of their outsized pensions to the common cause of America’s future?
Future generations need to be taught to save for their own well being. Entrusting the government with your money isn’t wise. At some point the government has to say, “we made a promise we intended to but couldn’t keep.” At this point it would only be the future generations who would get cut. What happens if we wait this thing out? I think the outcome would be much, much worse.
That’s Generation Greed’s argument, but it wasn’t true. Generation Greed is the reason the promises can’t be kept.
The generations you say will have to replace Social Security and Medicaid, perhaps saving one-third of their pre-tax income in addition to paying higher taxes to fund the benefits of those who came before (and didn’t pay), are also paid less on average. That’s right, wages have been falling some time, but that’s been covered up by debt.
You want entitlement cuts? Do it now for the seniors today.
‘At some point the government has to say, “we made a promise we intended to but couldn’t keep.” At this point it would only be the future generations who would get cut.’
Where is it written in stone that future generations have to always get screwed in order to fund Generation Greed’s excesses?
Sure, I’m fine with cutting them for seniors today…but who do you start with? You have to draw a line in the sand somewhere don’t you? And do you cut it all of at once or do you have a sliding scale?
but who do you start with?
One could easily do a tiered cut, no? 5% if you’re over 80, 10% if you’re 70-80, etc…
Social security retirement payments are taxable income if your income from pensions and other sources is high enough (and we’re not talking very high). It’s taxable at whatever marginal rate you’re in. One easy, progressive step would be to change the formula to steepen the curve as to how much is taxable, and not stop at 85% as they do now.
One easy, progressive step would be to change the formula to steepen the curve as to how much is taxable, and not stop at 85% as they do now.
That seems like an incredibly ineffcient way to go about things. Involving another middle man (the IRS) seems like a bad idea. Just paying out less is far easier.
Where is it written in stone that future generations have to always get screwed in order to fund Generation Greed’s excesses?
Does parchment paper count?
Article XXVI of the Constitution: The right of citizens of the United States, who are eighteen years of age or older, to vote shall not be denied or abridged by the United States or by any State on account of age.
“Our children and grandchildren” don’t vote. Generation Greed does.
What do you mean entitlements? Be specific.
Wasteful spending. You must mean military correct?
Military waste is a good start.
Military waste is a good start.
Come on you can say Andy, just try: “Military waste is a good 1st place to start
How about section 8 housing that rewards irresponsible behavior? Let’s get into the real meat and potatoes here.
How about section 8 housing that rewards irresponsible behavior?
I live just a few steps away from an apartment complex that accepts Section 8 vouchers. But for the boom car-driving yahoos who like to come around and visit some of the residents, this place has not caused me any problems.
As for the boom car-driving yahoos, there’s this really cool phone number called 911. It’s very easy to dial, and oh, do the police respond.
BTW, the aforementioned complex is where our neighborhood association holds its quarterly meetings. And, as for the tenants with the problematic friends, this complex isn’t afraid to use eviction proceedings.
section 8?? compared to $600 B in 6 days of bombing Libya???
How about no more corporate welfare! GM, AIG, Exxon….
Why does the richest country in the nation always want to attack it’s poor people first?
I was watching Larry the Cable Guy does NASA the other day and Larry’s host the NASA guy made the obligatory pitch for sending manned explorations to Mars. Even though as a kid I was a huge space buff (Apollo era), it occured to me that given that the US is flat a— borke, why would that even be a consideratio? If fact, are we really getting much value out of having a few guys floating around up in the international space stations? Sure, its only a few hundred billion a year, but how many of these kinds of programs exist just to keep the Rockwells in business?
And wasteful military spending? How about wasting the lives of our young people fighting wars that can never be won (or could have been won 8 years ago and weren’t) just to fuel the coffers of the suppliers of war material? That’s the travesty of this whole mess. Lets just fight and fight to win quickly the wars that are necessary to protect our national interests.
Why is it a system designed to give the poor assistance has been turned into a reward system for irresponsible behavior?
Want a bigger house? Have another child. Need more food stamps? Have more kids.
No one on this board, liberal or conservative supports corporate bailouts or the like.
My problem with programs for the poor in this country is what they’ve become. And instead of diverting attention and sweeping the problem under the rug, it’s time to start working on the problem.
“Lets just fight and fight to win quickly the wars that are necessary to protect our national interests.”
Why don’t we work on changing our national interests, thus getting at the root cause(s) and not the symptoms?
it’s funny how the lefties keep bringing up reducing of military spending thinking there will be a lot of disagreement on the board.
It’s funny how authoritarian conservatives say they support reductions in military spending…… until it actually comes to time to champion the cause, then :crickets:.
No, not disagreement, comparison.
Why we have plenty of money to now wage 3 wars, but not enough for better education, health and public safety regulations?
Sadly, thanks to the republicans and democrats (and especially the bankers), we have no money for any of it.
“It’s funny how authoritarian conservatives say they support reductions in military spending…”
exeter, since you voted for that warmonger obama, you are part of the damn problem.
Sadly, thanks to the republicans and democrats (and especially the bankers), we have no money for any of it.
We don’t have the money for better education and health-care.
But I know who took the money that we don’t have.
But I know who took the money that we don’t have.
Ha, I’ll be sorta brief:
Shazam! It’s the unAmerican democrapts fault! All of ‘em,… even Linda the lunch lady who lives lavishly!
Vote: repubican, “on counts of ’cause we care”, about “you”,…YOU know who YOU are, …what “you” thought we were trying to deceive “you”? Now don’t be silly, YOU know who we really mean, right!
Excellent article in May issue of Vanity Fair:
Of the 1%, by the 1%, for the 1%
Of the 1%, by the 1%, for the 1%
I’ve just glanced at their (“TrueReducetheDeficitNOW!™” + “TrueAnger™”)
“TruePriorityListitems1-30&A-Z™” No names, …this “sub-class” actually is not even mentioned in their 2pt font details.
“I pledge allegiance to and wrap myself in the flag of the United States
Against Anything Un-American and to the Republicans for which it stands,two nations, under Jesus, rich against poor, with curtailed liberty and justice for all except blacks, homosexuals, women who want abortions, Communists, welfare queens, treehuggers, feminazis, illegal immigrants, children of illegal immigrants, and you if you don’t watch your step.”
- Matt Groening
Twas just a kernel of un-digested corn that caused this dream:
The ghost of politics past (seemed like Hell):
Setting:
14 chairs in a 10′ circle …Forever!
Occupants:
14 people who: dance like Karl Rove (1), sit-on-the-toilet like Dick Cheney (2), laugh like Shrub (3), suck-on-straw like Ann Coulter (4), speakendlesslyontheradio-(while-hidin’ his-left-hand) like Rash Limpbaughs (5), Yell “long-term” investments like GlenBeckinstan with his “golden” voice (6), fart like Chris Dodd (7), scratch someone else s-balls like Barney Frank (8), huggle Hope&Change like lil’ Opie, (9) reassure unemployed American’s like Ben Bernanke, (10) Prevent “tiny-bubbles” like Sir Green-is-spent, (11) Rate “dog-shasta” like Moody’s (12) acquire “no-bid” contracts to
kill-any-types-of-peoplepaint green stripes like Halliburton, (13) and last (but certainly not filling up all the room down below) a runofthemill-realtor who happens to make a living by being (credit to an unnamed source) a liar! (14)Then I woke up. Knot!
An older one from Matt Groening
“I plead alignment to the flakes
of the untitled snakes of a merry cow
and to the Republicans
for which they scam
one nacho
underpants
with licorice
and jugs of wine
for owls”
George Washington’s efforts to get out from under the thumb of the European ruling class turned out to have been in vein.
We have become the very thing they fought against.
Who has the crown? Where is it? Where are they? I’m watching the dragonfly closely, …ha, a flash!, a glimmer on it’s wings, ..twas just a partial moon reflection really…the mud on my cloth, is the same on it’s feet. Soon, soon…I, mud, dragonfly…will feel the consequences of our existence…all’s not for not. Just-you-wait-&-see.
MarketWatch First Take
April 1, 2011, 9:50 a.m. EDT
More jobs, but wages aren’t keeping up
Commentary: Still a tough economy for working folk
By MarketWatch
WASHINGTON (MarketWatch) — The U.S. economy is finally shaking off the recession, with companies hiring again at a healthy pace in March.
Nonfarm payrolls rose by 216,000, while the unemployment rate fell to 8.8%. The jobless rate has fallen a full percentage point in just the past four months, the fastest decline in 27 years.
…
So 2 million jobs were created? I don’t think so!
Wages? Wages haven’t been keeping up for 30 years. This is news?
Uhhhh by getting rid of big government programs?
Lets be clear, we all want the biggest corporations to bring tax money to the table. Are you sure you want higher taxes just because you make more than someone else and are thus “the rich”.
Incomes in the US are shockingly low today. Even a $75,000 salary in many areas is just barely enough to break even - try living in the Bay Area on that.
The fact is that a person making $100,000 is NOT rich in one area and may be in another. Regardless others are SO much poorer. Below some point only the suffering index increases.
When we talk about the “rich” we are talking about a couple hundred ultra massive corporations and those that run them, who’s clout and influence has them paying very little tax indeed.
Just because someone makes more than you do does not make them “rich”. Remember YOU are “the rich” to some other poor schmuck and he thinks YOU should be taxed more!
This was supposed to group below :
Comment by Professor Bear
2011-04-01 08:43:52
How can you fund Republican tax cuts and big government programs without running the printing press technology on high blast?
Everyone likes to play the victim and everyone feels as though they pay their fair share while everyone else should pay more. That’s why a flat tax with no deductions makes the most sense. The leftists will come out against it for “fairness” but please see the first part of my comment for clarification.
Ok. If you want a flat tax so badly, figure the difference you’re not paying under the current tax code and send the IRS a check.
For some reason, I don’t think you’re paying much income tax at all.
My tax burden was 1/3 of my net income. Don’t even pretend to speculate.
Right….
I’ll wager my income is 2.5x yours and I’m not in the 33% bracket.
The self employed are taxed up the wazoo.
33% of net is 25% of gross, so it’s the 25% bracket. I’m not sure why he’s using net instead of gross.
Because I have rent and utilities to pay that don’t contribute to the profit of my business.
He is self-employed so he is probably counting both sides of FICA which all of us pay, but most don’t count because we don’t see the “employer” half.
Andy, break it out by percentages. What percentage of your net is federal *income* tax alone. That is all anyone is talking about when they talk about implementing a federal flat tax.
Of course, we would be better off if they were talking about folding in SS and Medicare when talking about a flat tax, because that would mean eliminating the cap on SS taxes and that is an interesting idea.
It works out to 20.9%…
So you’re squealing like a pig about paying 20% while the rest of us are paying 25% and up. Nice.
Hmmm, my liability came out to around 30% (10k / MO). This included deductions of around $20K for things like health care, equipment etc. Consider at any hours worked over 40 my effective tax rate including CA state was 56% which basically led me to conclude working over 40 was a waste of time…
Luckily with losses sustained over the last couple of years I no longer worry about taxes…
Polly, please move to Maine and run for their political office after any of “my-gals” that eyes-didn’t-vote-for-but-love-just-the-same,… (as an HBB mystery blog-in candidate) when my said “gals”…retire.
Tankxs, in advance. Hwy50
“So you’re squealing like a pig about paying 20% while the rest of us are paying 25% and up. Nice.”
NO. I paid 33%. Just because you call a tax something else doesn’t mean it’s not a tax. You think I’ll collect Social Security? Not likely.
That’s why a flat tax with no deductions makes the most sense.
While I agree that’s considerably better than our current system, it still works under the assumption that an equal % is “fair” while an equal $ is not.
When you go out to dinner with your friends, do you split the bill based on your relative incomes?
Are you proposing that the person who buys a Hyundai Accent should pay the same in sales tax as someone who buys a Rolls Royce Phantom?
That’s why a flat tax is at least as fair as a sales tax. I don’t think you can use the dinner argument.
Are you proposing that the person who buys a Hyundai Accent should pay the same in sales tax as someone who buys a Rolls Royce Phantom?
I get your point, but you’re starting from a position of a %-based tax (sales tax), rather than what’s the correct/fair/moral way to fund government services.
Taxes are collected to fund the government. Who should pay to fund government services, and how much? We all get the same services (give or take).
If you want to use your analogy, we’d be discussing how much one pays for the car, rather than the tax they’re paying on it.
To a point, I agree that a flat tax is “fair” in the same way the sales tax is. However, one is a tax on a discretionary activity. The other is a tax on trying to make a living.
We don’t get the same services if you consider the value. The value of providing police protection to a $2 million property full of expensive gadgets is a lot more than the value of providing police protection to a $120K 3/2 in the same town.
The value of providing police protection to a $2 million property full of expensive gadgets is a lot more than the value of providing police protection to a $120K 3/2 in the same town.
Point taken. I don’t know how you’d truly evaluate the “value” for that kind of thing, outside of looking at the private sector cost for security. And honestly the product you’d get in the private sector is very different from what the police provide.
However, that’s one of many of the current functions of government. I don’t think they all break down in that way. Consider roads, parks, schools…
Most functions of government aren’t based or taxed on use or value.
When it comes to police protection it falls on property taxes. Most municipalities and states charge a flat percentage less a homestead exemption that is a flat dollar amount. Therefore the person living int he $2,000,000 is paying much more in property taxes than the person living in the $120,000 home for police and fire protection.
Taxes are collected to fund the government. Who should pay to fund government services, and how much? We all get the same services (give or take).
This is where I’m more sympathetic to the lefty side of the argument. I think the rich get way more benefit from the government services. I can see how you might make the argument that the service is the same so why should they pay more, but I don’t buy that. A rich guy gets huge benefit from the infrastructure provided by the government. A homeless person just gets something to sleep under.
“Therefore the person living int he $2,000,000 is paying much more in property taxes than the person living in the $120,000 home for police and fire protection.”
Then offload the $2,000,000 pretentious dump and buy a $120k house like the rest of us. The choice is yours.
A rich guy gets huge benefit from the infrastructure provided by the government. A homeless person just gets something to sleep under.
I think it’d be interesting to try to quantify this. Your argument seems to be based on the actual use/benefits of the infrastructure, rather than the availability/opportunity to use it?
The homeless person under the bridge has the same access to gov’t schools, parks, libraries, roads, pedestrian paths, waste treatment, shelters, police, and fire protection.
Where do you see such a gross inequity in government infrastructure?
I’m saying that the rich guy is able to make way more money off the bridge than the guy sleeping under it. Not only does he get to use it for his vehicles, but he probably benefits in other ways such as employees being able to get across it to work for him, making his costs of doing business much lower. It’s possible that the bridge (along with other infrastructure) is the only reason he was able to become rich in the first place.
I get that in theory the homeless man had just as much opportunity to take advantage of the bridge and for some reason didn’t. I still think it’s reasonable for the guy who was able to take advantage of it to pay for the next piece of infrastructure even though that might not seem fair in the libertarian philosophy. So yes, I think the actual use/benefit outweighs the equal theoretical opportunity to use it.
I’m saying that the rich guy is able to make way more money off the bridge than the guy sleeping under it.
Are you implying here that folks should pay for government services based on how much they capitalize on them? Should someone who gets better grades in school pay more than someone who doesn’t do as well?
I see the point you’re making, and I don’t dismiss it outright. I’m just trying to see a solid foundation for the argument here.
I think Polly’s example is much more evident - the more you have, the more to protect, and thus the more benefit someone gets based on their wealth. With the argument you’re making, however, seems to lead to this scenario:
two people drive the same route every day. As such, they inflict as much wear on the road/environment/etc. Yet if one person has a job that pays more than the other, it’s justifiable to pay them more for their usage of the road because they derive greater “benefit”?
Are you implying here that folks should pay for government services based on how much they capitalize on them?
In a sense that’s what Americans believe on the whole. That’s why we have progressive taxation and have for about 100 years. It didn’t just happen by magic we voted for it.
Your opinion is in the minority.
http://abcnews.go.com/Politics/abc-news-washington-post-poll-confidence-government-falls/story?id=13134173&page=3
…Republicans have lost ground in public trust to deal with both issues [economy, deficit], now trailing Obama by 12- and 9-point margins, respectively.
Preference for the Republicans on both those issues has declined by 11 points since December, a comedown from the sentiment that lifted the party to its midterm success. [...]
As recently as January, 42 percent of independents preferred the Republicans in Congress over Obama to handle the economy. Today just 29 percent say the same, and there’s been a rise in the number who volunteer that they don’t trust either side.
A substantial 64 percent say the best way to trim the deficit is with a combination of spending cuts and tax increases, rather than just cutting spending (31 percent, down 5 points from December) or only raising taxes (3 percent).
I’m not as insistent on solid foundations as you…I’m just kind of going on what seems like common sense to me.
In your two-people example I’m OK with whatever the tax scheme is that pays for that road…they’re both using it for the same purpose. With a progressive income tax (which I also believe in) the guy making more money is already paying more for the road. I don’t see any reason to try to soak him further.
I guess what I’m talking about is when the rich guy is rich because the infrastructure was available, it only seems right to me that he should cover a higher share of infrastructure costs. It’s not like he’s just living on a stack of gold, slowly consuming it. He needs the country to function properly in order to make profit/interest on his money. I see Polly’s point as being a part of mine. The “more to protect” is one facet of what I’m saying.
I find it easier to envision societal concepts if I imagine the whole society as about 100 people. Each percent of real society is represented by one person. You’ve got this one guy who has managed to create something great, or monopolize a resource, or whatever, and has managed to accumulate much more capital than the rest of the people. It’s not unreasonable to me that the rest of society might require him to provide things that are of benefit to everybody if he wants the benefit of living with the group. Including things that the rest of the group can not obtain on their own. If he doesn’t like it he can leave and deal with the lions and tigers and bears on his own.
The fact is that a person making $100,000 is NOT rich in one area and may be in another.
That’s another argument for having government be local, including taxation. Someone in iowa making $100k is living a very different life than someone making $100k in the bay area. Yet, they’re both portrayed as the “evil rich”.
Can we stop with this stupid argument? Again, NY & SF are expensive because they are small areas with lots of people who want to live there, not to any innate function that is beyond human control.
With this argument, how about we can’t consider anyone who lives in Malibu rich because it costs alot to live there. Therefore, no one in the US is rich.
And only about 10% of households in the entire US make over $100k, and the median SF income is around $70k. That 50% on less than $70k are making it in SF, so if you don’t like your income, then move.
You feel it’s a stupid argument, and that’s your right.
If you look at all the reasons people argue for taxing the “rich”, I think you’ll see that it’s not so stupid. If the cost of all housing is higher, that means folks in those areas have less disposable income after covering their basic needs. The basis of the argument for progressive taxation is that the money beyond basic needs is “icing” and therefore they can afford to pay more. While I don’t agree with a progressive taxation structure, I do think it’s worthwhile to consider the actual cost of meeting basic needs - food, housing, water - if we’re going to have one.
Most people’s perception of “rich” is 1million and up.
Most people’s perception of “rich” is 1million and up.
That’s not the impression I get from the folks here arguing for raising taxes on the “rich”.
Also, we’re looking at two different measures. Is it income, or wealth that makes one “rich?” If it’s wealth, as you seem to suggest, then why do people want to raise income taxes(that is, tax on the income from one’s labor) to get at the “rich”?
There are more than enough published guidelines to clearly establish what is rich and what isn’t in this country. This is not some arbitrary philosophical debate.
There are more than enough published guidelines to clearly establish what is rich and what isn’t in this country. This is not some arbitrary philosophical debate.
If so, then please reference them.
And I’m sure everyone who uses the term “rich” on this blog, in the media, and in conversation is referring to exactly those guidelines, right?
It’s clear that even the “lefties” on this blog aren’t in agreement as to what the term “rich” refers to, exactly.
It’s clear that even the “lefties” on this blog aren’t in agreement as to what the term “rich” refers to, exactl
Who cares? What kind of argument is that?
Concept comes before details and lack of details does not make a concept invalid.
When the time come’s we’ll figure it out.
Census
IRS
U.S. Bureau of Labor Statistics
For starters…
See if you can find some more on your own.
Census
IRS
U.S. Bureau of Labor Statistics
You’re claiming that the census bureau has a definition for the term “rich”? As does the IRS? And their definitions are identical? I’m thinking it’s on you to provide citations for this. Google sure doesn’t turn anything up for any of those organizations.
That’s another argument for having government be local, including taxation. Someone in iowa making $100k is living a very different life than someone making $100k in the bay area. Yet, they’re both portrayed as the “evil rich”.
No most making 100k a year work for a living. The evil rich strip wealth and steal it. They make 10’s or 100’s of millions. They have hand picked corporate boards that set salaries and golden parachutes. They know what the FED is going to do and when. They get free money at the expense of everyone else and get bailed out. They pay very low effective tax rates 15% or so
We don’t care how much it costs in the Bay Area or NYC to live, and your location should have no impact in terms of taxes or sliding scale income or anything else, or comments about how quote unquote rich you are.
If you don’t like the expense, then move somewhere else that is cheaper. It’s expensive because it’s a small area and a lot of people want to live there, not due to any innate features that are beyond human control.
There is no comparison and justification to a mega corp that pays NO taxes on 14 BILLION in profits and also gets a TAX REFUND!
Let alone the couple of other thousand just like them.
As for $75K, I live in one of the top 10 metropolises and you can live like a king on that kind of money in my city. You can’t make it on $75K? Man up, whiner.
There are 72 million people who make 25K and less who think you’re a idiot if you can’t make it on that kind of money. ‘Cause you are.
“Incomes in the US are shockingly low today. Even a $75,000 salary in many areas is just barely enough to break even - try living in the Bay Area on that.”
Agreed. You can’t raise a middle-class family of four in San Jose, CA on $75,000, even $100,000 would be a stretch.
Is the Fed an agency of the American government, which is government of the people, by the people, for the people, or does it answer to an international banking cartel which operates above any rule of law and loans money to its own members while leaving the American people to fend for themselves?
If it weren’t April Fool’s Day, I would find this story concerning.
Major Fed loans went to foreign banks
By Stephen Beard Marketplace Morning Report, Friday, April 1, 2011
According to documents released yesterday by the Federal Reserve, the central bank supplied emergency loans to not only the U.S. banking system, but to many of foreign banks as well.
A general view of Barclays Bank Fleet Street branch in London, England. (Dan Kitwood/Getty Images)
STEVE CHIOTAKIS: We’re still learning about all the banks that borrowed money from the Federal Reserve at the height of the financial crisis. Under court order, the Fed released thousands of pages covering which financials borrowed from its so-called discount window. And according to those documents, the central bank supplied emergency loans to not only the U.S. banking system, but to a lot of foreign banks as well. Marketplace’s Europe Correspondent Stephen Beard is with us live from London with the latest. Hi Stephen.
…
It is worth the time to read this story:
http://www.nytimes.com/2011/04/01/business/economy/01fed.html?ref=business
WASHINGTON — The Federal Reserve’s huge lending programs, which saved Wall Street in the fall of 2008, also benefited a wide range of other financial companies, including community banks, credit unions and foreign banks, according to documents released by the central bank on Thursday.
….
The Arab Banking Corporation, partly owned by the Central Bank of Libya, was another frequent visitor, taking more than two dozen short-term loans of several hundred million dollars each.
“It is incomprehensible to me that while credit-worthy small businesses in Vermont and throughout the country could not receive affordable loans, the Federal Reserve was providing tens of billions of dollars in credit,” Senator Bernie Sanders, Independent of Vermont, wrote in a letter sent Thursday to the Fed chairman, Ben S. Bernanke, and other government officials.
“The Arab Banking Corporation, partly owned by the Central Bank of Libya, was another frequent visitor, taking more than two dozen short-term loans of several hundred million dollars each.”
I’m so happy fawking Qaddafi bank was able to borrow from the Fed at rock-bottom rates during the financial crisis while many American families and small businesses were SOL.
Judging from the situation today, I’m wondering if the Central Bank of Libya actually qualifies as too-big-to-fail?
“The Federal Reserve’s huge lending programs, which saved Wall Street in the fall of 2008, also benefited a wide range of other financial companies, including community banks, credit unions and foreign banks, according to documents released by the central bank on Thursday.
Hundreds of small banks borrowed modest amounts of cash in 2008 and 2009, ranging from $1,000 to several million dollars, from an emergency loan program known as the discount window.”
Based on the Fed’s own NO BANKER LEFT BEHIND ACT? (I hadn’t realized the Fed could pass its own legislation…)
Amid Las Vegas Real Estate Woes, Hope For Some
by Sarah McBride
Morning Edition
A real estate sign stands outside a home in Las Vegas. Banks are repossessing record numbers of homes in the city, but there’s a flip side: It has put homeownership within reach for many low-income buyers.
Enlarge Jae C. Hong/AP
April 1, 2011
Nevada leads the nation in foreclosures. In Las Vegas, banks are repossessing record numbers of homes. But the flip side is that for some low-income buyers, home ownership is finally within reach.
Lady Luck has smiled on David Krueger, a waiter at the glitzy Mirage Hotel who earns $13 an hour, plus tips. That’s about $30,000 a year. His partner makes less.
Krueger recently bought a three-bedroom house for $115,000. From some of the windows, he can look west and see mountains. His 15-year-old is a big reason Krueger bought the home.
“It shows him that working hard will pay off and you can have something nice,” he says.
Nearby, many of the houses stand empty. But windows aren’t boarded up, and the neighborhood seems more low-key than deserted. The empty homes didn’t keep Krueger away, because to him, owning is better than renting.
“I work hard for a living, and I want my payment to go to something that’s going to belong to me, and not belong to somebody else,” he says.
Down Payment Help
Despite his salary, Krueger was able to get a loan because he has good credit. He also qualified for a federal program that helps low-income home buyers. The purchase is especially sweet because Krueger himself knows the pain of foreclosure. In 2006, his partner bought the family a home, using a risky, adjustable-rate loan.
“Our payments went up, almost double, and we had paid nothing on our home,” he says. “We didn’t understand the rates and what was going on.”
…
‘“I work hard for a living, and I want my payment to go to something that’s going to belong to me, and not belong to somebody else,” he says.’
There’s no way this Las Vegas waiter is going to throw away his money on rent!
So did he catch a falling knife, or is 3.8x income for housing the New Normal?
And he probably DOES work hard for a living.
The ownership mentality is so deeply ingrained that it’s disgusting. What’s wrong with the freedom that comes with renting? You’re never locked in for more than 12 months at a time.
The ownership mentality is so deeply ingrained that it’s disgusting. What’s wrong with the freedom that comes with renting?
Not only that, there’s no discussion/consideration for which is actually the better financial decision.
You have to assume NPR’s funding from the NAR plays into the content of stories like this one.
That story was heinous. Your part of the post didn’t mention that his partner had bought a house in 2006 and had gotten foreclosed on. I threw up in my mouth listening to that utter rubbish. I agree with you on NPR trying not to bite a hand that feeds them on this one.
Your part of the post didn’t mention that his partner had bought a house in 2006 and had gotten foreclosed on.
Which is one data point in the argument that “Foreclosure will ruin you for many, many, many years!” is just a bunch of hogwash.
BTW, University of Arizona law prof Brent White makes a similar point in his writing. Since the UA law school is just a couple miles away from the Arizona Slim Ranch, I’ve tried to meet up with Prof. White. But he’s on leave this semester.
The reality of the matter, now more than ever, is that a failure by the REIC to get their campaign contribution recipients to weaken mortgage loan underwriting guidelines to enable recent debtbeats to soon borrow and buy again would result in a non-politically-viable improvement in U.S. housing affordability.
Au contraire:
“The purchase is especially sweet because Krueger himself knows the pain of foreclosure. In 2006, his partner bought the family a home, using a risky, adjustable-rate loan.”
If public radio is going to prostitute themselves to the NAR, then I agree with the Republican recommendation to yank their federal funding.
Got it. Quick read and I didn’t see it and that was the part the chapped me the most…
I made sure to include it!
“That story was heinous.”
Quintessential NPR:
- Feature a nice, typical, middle-American family (gay Las Vegas waiter, his partner and their 15-year-old child; the story didn’t mention whether it was a birth child or adopted).
- Act as though there is nothing unusual about making a debt-financed home purchase in the immediate aftermath of foreclosure.
- Pretend there is nothing very unusual about a loan which bears zero interest and which can be paid back whenever the borrowers can afford to do so.
- Get in a subtle plug for a major donor (the National Association of Used Home Sellers™) by suggesting that home ownership is better than throwing away your money on rent.
WASHINGTON – Highway deaths have plummeted to their lowest levels in more than 60 years, helped by more people wearing seat belts, better safety equipment in cars and efforts to curb drunken driving.
The Transportation Department estimated Friday that 32,788 people were killed on U.S. roads in 2010, a decrease of about 3 percent from 2009. It’s the fewest number of deaths since 1949 — during the presidency of Harry Truman — when more than 30,000 people were killed.
Now look at the graph
news.yahoo.com/s/ap/20110401/ap_on_re_us/us_highway_deaths
Seems to me that much of the recent drop occurred at the time of the financial collapse and has stayed low. I would suggest the drop is due to fewer miles driven at slower speeds. It suggests that is still the case. I would bet that junior doesn’t get a car or has more limits now as well. I would bet that higher gas prices and increased poverty might be the explanation. Recover just ahead?
I would suggest the drop is due to fewer miles driven at slower speeds
Agreed. Seems there are other relevant variables that should be considered before drawing conclusions on the cause - as you say, miles driven, number of cars on the road, fatalities per crash, # of people involved in each accident, even as passengers…
Our Men and Women in Uniform: support them!
http://tinyurl.com/4xopdk6
Err, ok.
You most certainly can support the troops while bashing the TSA. I support the US military without supporting the mission.
The TSA has no mission. They’re government waste and overreaching proudly on display at nearly every airport in the country.
agree wholeheartedly
Teleperformance to lay off 1,223 in Florida
South Florida Business Journal
Call center company Teleperformance ASD has filed notice with the state that it will lay off 860 in Boca Raton and 363 in Orlando.
The layoffs are effective May 31. The breakdown of positions was:
* Nine assistant call managers
* 71 supervisors
* 24 trainers
* 9 quality analysts
* 747 customer service representatives
The announcement comes as GHS Solutions, also known as Full Circle Debt Relief, told the state it plans to lay off 112 employees in Delray Beach.
The company’s Boca Raton office is at 4680 Conference Way South, Suite 100, in the Boca Corporate Center, which was once home to IBM. Its Orlando Office is 6149 Chancellor Drive, Suite 2800.
The 860 layoffs in Boca Raton alone are the largest filed with the state so far this year under the Worker Adjustment and Retraining Notification Act.
Meanwhile half around the world, now that the nuclear disaster has pretty much vanished from the headlines.
http://www.foxnews.com/world/2011/03/31/japans-nuclear-rescuers-inevitable-die-weeks/#
Of course FOX is one of those leftist propaganda news networks, so they probably just made it up.
Joke:
Two planets meet.
“What’s up?”
“I feel awful, I got humans”
“Bummer. Don’t worry it’ll pass quickly”
Thank god that pesky Amerika-hating “crisis” story is over. I was getting tired of those fear-mongering a-holes trying to scare the whole World like that. And right in the middle of our “Recovery”? The nerve!!!
American Apparel Says Cash Shortage May Spur Bankruptcy
American Apparel Glamour Fades Amid Cash Crunch (AP)
American Apparel Inc. , the Los Angeles clothier once heralded as a U.S. manufacturing success story, said it may seek bankruptcy protection after slumping sales and productivity ate into its cash.
American Apparel Inc. , the Los Angeles clothier once heralded as a U.S. manufacturing success story, said it may seek bankruptcy protection after slumping sales and productivity ate into its cash.
Here in Tucson, there’s a very successful store called the Buffalo Exchange. It sells “recycled fashions,” which is a very nice way of saying “used clothing.”
I’ve noticed that, in recent years, business has been booming at Buffalo. Matter of fact, I’ve never known a time when Buffalo wasn’t doing well. One of my former bosses shopped there, and, oh did she look sharp.
My guess is that this will do well until the formerly upper middle class has sold all of their excess clothes. Then they will have to look for new sources. I suspect people might start stealing clothes to sell at the Buffalo Exchange.
Went into their store in Los Feliz several years ago. The fabric on the t-shirts they were selling was so thin it reminded me of some of the Heavy Metal t-shirts I kept from the 80s - which had been through the washer hundreds and hundreds of times.
Manufacturing in U.S. Expands at Close to Seven-Year High
Apr 1, 2011- Bloomberg
Manufacturing in the U.S. expanded in March at close to the fastest pace in almost seven years, reinforcing signs the industry will propel growth in the world’s largest economy.
The Institute for Supply Management’s manufacturing index was little changed at 61.2, after February’s 61.4 reading that was the highest since May 2004, the Tempe, Arizona-based group’s report showed today. Figures greater than 50 signal expansion.
Companies like Caterpillar Inc. (CAT) and United Technologies Corp. (UTX) are benefiting as production, fueled by inventory rebuilding at the start of the recovery, gets an added boost from rising demand in the U.S. and overseas. The strength in manufacturing is also generating job gains, a necessary ingredient to a sustained expansion.
“Manufacturing is doing very well,” said Nigel Gault, chief U.S. economist at IHS Global Insight Inc. in Lexington, Massachusetts. “It’s the leading sector in the economy.”
Stocks extended gains after the figures, with the Standard & Poor’s 500 Index rising 0.7 percent to 1,334.69 at 10:47 a.m. in New York. Treasuries were little changed from late yesterday, with the yield on the benchmark 10-year note at 3.47 percent.
The median forecast of 79 economists surveyed by Bloomberg News was 61.1. Estimates ranged from 59 to 63.
A gauge of factories in the euro region dropped to 57.5 last month from February’s 59, London-based Markit Economics said. Manufacturing in China, India and Russia also expanded.
China Manufacturing
China’s manufacturing growth accelerated for the first time in four months with the index rising to 53.4 from 52.2, while India’s manufacturing grew for a 24th straight month and the index remained at 57.9. Russia’s factory output gauge increased to 55.6, the highest in almost five years, from 55.2.
Bloomberg
David Sokol, the Berkshire Hathaway manager who resigned after disclosing that he bought stock in a firm whose takeover he helped negotiate, is being investigated by U.S. regulators, a person with knowledge of the matter said.
The Securities and Exchange Commission is probing whether Sokol, 54, bought shares in Lubrizol Corp. (LZ) on inside information that Berkshire was considering buying the company, said the person, who declined to be identified because the investigation is secret. The SEC is seeking records from Sokol’s brokerage and examining trading data from the Financial Industry Regulatory Authority, the person said.
David Walker: Budget Debate “Like Arguing About the Bar Tab on the Titanic”
http://finance.yahoo.com/blogs/daily-ticker/david-walker-budget-debate-arguing-bar-tab-titanic-20110401-055634-439.html?sec=topStories&pos=3&asset=&ccode=
“Like Arguing About the Bar Tab on the Titanic”
Awesome! Glad to know our Congress is putting their political capital to good use…
Awesome! Glad to know our Congress is putting their political capital to good use…
Choose: Pelosi cardboard or “I-love-Nature-Inc.-not” Styrofoam?,… in the Congressional cafeteria.
Oh, and prioritize your paid $$$$$$$ “efforts” in regards to creating Jobs!, Jobs!, Jobs! for those Americans, without a job who can’t make it for lunch with you today, Mr. I-Represent-ALL-Americans-but-most-especially-those-who-think-act-believe-and-shasta-like-myself.
WASHINGTON – Highway deaths have plummeted to their lowest levels in more than 60 years, helped by more people wearing seat belts, better safety equipment in cars and efforts to curb drunken driving.
The Transportation Department estimated Friday that 32,788 people were killed on U.S. roads in 2010, a decrease of about 3 percent from 2009. It’s the fewest number of deaths since 1949 — during the presidency of Harry Truman — when more than 30,000 people were killed.
Now take a look at the graph
news.yahoo.com/s/ap/20110401/ap_on_re_us/us_highway_deaths
I suspect the sudden drop has much less to do with drunk driving and safety equiped cars and a lot more to do with a collapsing economy and people driving slower and less as gas prices rise. Junion probably doesn’t get to borrow the Ford Explorer as often. Unemployed people sitting at home. Recover full speed ahead??
“helped by more people wearing seat belts, better safety equipment in cars and efforts to curb drunken driving.”
Seeing these journalists housing and the economy so wrong for so long makes me wonder if anybody backed out average miles driven, average speed, etc. like you suggest. We need more Freakonomics analyses!
Yep unlikely the average safety of a car and # of drunk drivers changed so abruptly. Something did happen around 2008 that’s when housing started to go bust enough for people to notice. That’s when junior lost the keys to the Explorer. The poor probably started driving less.
Mirrors drop in gas consumption posted yesterday.
Lets put this in perspective.
U.S. Iraq war casualties in eight plus years according to Icasualties.com: 4,441. Afghanistan casualties: 1,520.
Japanese Tsumami/Eartquake deaths: perhaps 27,000.
One year’s worth of people killed by motor vehicles: 32,000.
If Americans hadn’t organized their whole lives around their cars, they’d be banned.
Like I say, we kill ourselves just for sport in this country.
Lets put this in perspective.
OK
U.S. Iraq “we-did-everything-possible-to-prevent-these” war casualties in eight plus years
Japanese “we-stayed-awake-all-night-to-anticipate-these” Tsumami/Eartquake deaths
One year’s worth of people killed by motor vehicles “who-did-not-like-the-way-those-humans-owners-abused-us”
It has nothing to do with the subject of this blog, but the assertion that federal old age security and health programs will have to be slashed or eliminated for future generations (generally decribed as those under 55 — just waiting for all of Generation Greed to get over 55 before taking action) but older generations can’t make any sacrifices is exactly why I say that no one under 55 should ever voted for any Republican at the national level ever. A fiscal conservative? You’ll need a new party; unfortunately the Tea Party seems to be hijacked.
It’s also the same thing the public employee unions do with the Democratic friends. Enrich retirement benefits for those cashing in and moving out, and then slash pay and benefits for future hires. I don’t vote for any Democrats in my state, either.
Back on topic. If you are young and don’t already own a house, make sure you don’t buy one until the price is so low that you’ve taken back everything that Generation Greed has done to you out of their hide. It’s the only power you’ve got. Don’t give it up.
I say that no one under 55 should ever voted for any Republican at the national level ever.
Are you suggesting that the Dems somehow better represent the financial interests of the younger generations? You mention dems in the following paragraph as far as your voting habits, but are you really suggesting the average Gen X or Gen Y’er vote for dems over repubs in this regard?
BTW, Ron Paul is a republican…I’d argue he better represents the financial interests of the younger generations than most every other politician out there.
The Repubs defeated a bill back in Sept that would have ended tax breaks for offshoring jobs.
A bill put forth by the Dems.
The Repubs defeated a bill back in Sept that would have ended tax breaks for offshoring jobs.
A bill put forth by the Dems.
Your point being….? (besides hitting your quota for the week on making this comment)
My point? That you are wrong and either willfully ignorant or willfully lying.
My point? That you are wrong and either willfully ignorant or willfully lying.
Yes, clearly because my general opinion doesn’t agree with yours, I have malicious intent.
So please tell me what I’m “wrong” about in the statement you responded to? Let’s see, in my first paragraph, I ask a question….and my second, I state that Ron Paul is a republican (that’s an easy fact to prove), and I state an opinion of mine. Which of those two are you so certain I’m “wrong” about?
Seriously, you must love just ranting about nothing and arguing against statements never made. Does that really make you feel like a “winner”? Do you sleep better at night by convincing yourself you’ve won some imaginary argument?
I state a FACT, but you say it’s an opinion?
What part of “The Repubs defeated a bill back in Sept that would have ended tax breaks for offshoring jobs.
A bill put forth by the Dems.”
…isn’t a fact?
Can you even hear yourself?
I state a FACT, but you say it’s an opinion?
I did that where exactly? Changing the subject yet again to avoid addressing my comments? I said nothing of any supposed fact you claimed, but again, keep making up arguments and “winning” them in your mind.
You forgot to insult me this last time, though..maybe hit me twice on your response to this?
BTW, Ron Paul is a republican…I’d argue he better represents the financial interests of the younger gay/hispanic/give-me-Styrofoam-utensils-in-DC/aarp-gonna-b-one-day generations than most every other politician out there.
details, details…
“It’s the only power you’ve got. Don’t give it up.”
Right on! Because if you do (purchase too high and/or too soon) the retirement you fund won’t be your own! Don’t let ‘em off the hook, they wanted those trophy houses now let them stay in them and “enjoy” them for a while.
1 trillion dollars to bail out Wall St. but J6P makes too much money? The neocon corptacracy spent 3 decades working single-mindedly to bust unions, but it’s the union’s fault they can’t pay new workers better wages?
No, really?
REALLY?
Lay off the ageism WT. Your parents generation and their parents all took big economic hits in the last 30 years.
You have no idea.
Back on topic.
Please correct the summation of your anger:
“Generation greed” (NOT ones that died in battle) & those “others” (the “selfish” survivors) that served during WWII,… were only a small % of the over-all unsupportive “American population”,… really, they’re (collectively) basically just (present-day) greedy A-holes.
? : how many came back from serving “over-seas”?
answer: 750,000 …per month
Where you there? tell us.
Foreign Banks Tapped Fed’s Secret Lifeline Most at Crisis Peak
By Bradley Keoun and Craig Torres - Apr 1, 2011 10:53 AM PT
…
The biggest borrowers from the 97-year-old discount window as the program reached its crisis-era peak were foreign banks, accounting for at least 70 percent of the $110.7 billion borrowed during the week in October 2008 when use of the program surged to a record. The disclosures may stoke a reexamination of the risks posed to U.S. taxpayers by the central bank’s role in global financial markets.
“The caricature of the Fed is that it was shoveling money to big New York banks and a bunch of foreigners, and that is not conducive to its long-run reputation,” said Vincent Reinhart, the Fed’s director of monetary affairs from 2001 to 2007.
…
“The caricature of the Fed is that it was shoveling money to big New York banks and a bunch of foreigners…”
Is the report that the Fed bailed out a bunch of Wall Street and foreign investment banks somehow inaccurate or distortionary?
1car·i·ca·ture
noun
\ˈker-i-kə-ˌchu̇r, -ˌchər, -ˌtyu̇r, -ˌtu̇r, -ˈka-ri-\
Definition of CARICATURE
1: exaggeration by means of often ludicrous distortion of parts or characteristics
Spin it Bradley! SPIN IT BABY!
study, commissioned by the nonprofit group Wider Opportunities for Women, looks at how much income it takes to support a basic standard of living for an American family–and finds that many of the jobs of the future won’t pay enough to provide that.
To calculate this “economic security” income, the study’s authors certainly didn’t assume a lavish lifestyle. They considered basic needs–housing, food, utilities, health care, child-care, and transportation–plus the cost of modest saving for retirement and a small surplus for emergencies. (At at a time when economic “shocks” are increasingly common, that’s an essential part of financial security.) They don’t factor in some things many of us take for granted, like entertainment or eating out.
The result? To achieve economic security, a single parent with two children needs an income of just over $30,000 a year–nearly twice the federal minimum wage–while a two-income household needs almost $68,000.
The study then finds that, according to Labor Department projections, fewer than 13 percent of jobs to be created by 2018 will meet the economic security threshold for a single parent with two kids. Forty-three percent of those jobs will meet the threshold for a two-income household.
yahoo.com/s/yblog_thelookout/20110401/ts_yblog_thelookout/future-jobs-wont-support-decent-living-standard-report;_ylt=AmMEPfsFNsaHPuPUnV0zW42s0NUE;_ylu=X3oDMTU4ZmxvZ281BGFzc2V0A3libG9nX3RoZWxvb2tvdXQvMjAxMTA0MDEvZnV0dXJlLWpvYnMtd29udC1zdXBwb3J0LWRlY2VudC1saXZpbmctc3RhbmRhcmQtcmVwb3J0BGNjb2RlA21vc3Rwb3B1bGFyBGNwb3MDNQRwb3MDMgRwdANob21lX2Nva2UEc2VjA3luX2hlYWRsaW5lX2xpc3QEc2xrA2Z1dHVyZWpvYnN3bw–
72 million jobs in the present don’t support it either.
Whack job pastor + radical Islamic extremists = innocent deaths.
UN staff killed by Afghan mob enraged over Florida Quran burning
At least 20 UN staff members were killed in northern Afghanistan when a protest over a Quran burning overseen by pastor Terry Jones turned into a violent mob.
Good going there Paster Terry. Real nice “christian compassion and tolerance” values you have there.
Do you think God is just going to overlook those deaths caused by your actions when you meet him in the afterlife?
Really?
so the islamic murderers are not at fault?
20 people died in afganistan because a guy in florida had a BBQ?
there you go again
Both sides (whack job pastor + radical Islamic extremists) were predictably stoopid in a manner which resulted in the externalization of death to innocent third parties. Is this hard to grasp?
Not coincidentally, religion was the underlying source of pointless conflict which resulted in the deaths.
If somebody burned any other book, and I do mean any other, the Bible, California Highway Regulations or whatever, people would say its an expression of free speech.
Of course they are at fault… but Terry made it a point to provoke them after he had been WARNED once already that his act would spark violence and even possibly put his and other lives in danger.
You don’t poke the alligator.
Also, basic law recognizes provocation as also being unjust and uncivilized and capable of instigating grievous harm and therefore, punishable as well.
Whack job pastor + radical Islamic extremists = innocent deaths.
missing element, not mentioned:
Faux news Inc. (OK, included them all) + Whack job pastor + radical Islamic extremists = innocent deaths.
It’s a conservative victory!
We went to Costco on the way home tonight. The Demo people (food sample folks) told us their hours have been cut to two days a week (16 hrs). Where does that show up in the UE stats?
Cognitive Dissonance seems to be alive with home sellers we met. They are pricing high due to the school district. After all, the Chinese and Indians will overpay for their school district. IMO, they need a reality check. Both cultures due their due diligence.
Work hours reduction shows up on no stats that I’m aware of. “Underemployment” maybe?
Good call Awaiting. Something to think about.
Q&A: Danger of government shutdown grows
By Chuck Raasch, Gannett
Updated 56m ago
WASHINGTON — Prospects of a government shutdown loom again as Democrats and Republicans in Congress remain deadlocked over federal spending for the rest of fiscal 2011.
A stopgap spending bill expires April 8, and Democrats and Republicans in Congress still haven’t reached agreement on where to impose cuts.
Question: How likely is a shutdown?
Answer: The answer changes almost hour to hour.
…
Question: How likely is a shutdown?
Answer: The answer changes almost hour to hour.
Speaking personally,
Hwy50 Answers: “The answer changes almost minute to minute…”
A shutdown would identify non-essential services. Air traffic control, electricity, water, etc., would still be staffed.
You can wish in one hand and shasta in the other hand, to see which one will fill up the fastest.
Readers’ Forum: California’s budget is truly a mess
By Rod Pacheco and Darry Sragow
Posted: 04/01/2011 04:00:00 PM PDT
Updated: 04/01/2011 05:27:55 PM PDT
A BUDGET is nothing more than a projection of what you will receive, spend and save. Guess wrong on one of the three and you are in trouble. Guess wrong on two of the three and you are heading off a cliff. Guess wrong on all three and you are California.
Budget deficits have unfortunately been passed from governor to governor, legislator to legislator for more than a decade. To succeed, our new governor has to avoid mistakes and make tough, lasting decisions. While there is optimism, the problems he’s facing are surreal.
Prior officeholders have found permanent fixes too painful. Republicans fought taxes with almost everything they had, Democrats agonized over the paring of the “safety net” they had crafted, causing partisan gridlock. When consensus was reached neither party nor the prior governor could summon sufficient political strength. They took a less-troublesome path, juggling the books, relying on one-time savings, overly generous estimates of revenues and some modest cuts that they prayed would be significant.
However, the tough unforgiving facts are that spending has been increasing, revenues have been declining and the deficit has been growing, now at $26.6 billion.
Last year’s budget was an accumulation of many years of misplaced hopes and wrong guesses. This year, reality sets in.
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Analysis: California’s Brown sidelines budget, eyes pensions
California Governor Jerry Brown introduces his budget proposal in Sacramento, California January 10, 2011. REUTERS/Max Whittaker
Credit: Reuters/Max Whittaker
By Jim Christie
SAN FRANCISCO | Fri Apr 1, 2011 4:23pm EDT
SAN FRANCISCO (Reuters) - California Governor Jerry Brown is nearly halfway to closing a state budget gap of nearly $27 billion, but the state’s partisan divide has derailed his original plan for plugging the remainder of the shortfall and it’s not clear what will take its place.
An answer may, however, start with taking on public pensions as the 72-year-old Democrat, now looking to a May deadline for a revised budget plan, tries to tackle an issue that was a stumbling block in budget talks with Republican lawmakers and has become a serious concern among voters.
What is clear is that critical budget talks between Brown and Republicans are off until further notice and voters will not be going to the polls in June to take up a measure he had been urging that would have extended temporary income tax increases due to expire this year.
He called a halt to talks on Tuesday, blaming Republicans for driving them into a ditch with demands that would “materially undermine any semblance of a balanced budget.”
State Senate Republican Leader Bob Dutton shot back on Thursday, saying hard feelings had poisoned talks.
Dutton said that at one point he had been called into the governor’s office, where “I was yelled at more than I was talked to, and mostly by Mrs. Brown, not even Governor Brown.”
The result is that Brown’s plan to fill about half the $27 billion budget hole with tax extensions to be voted on by voters in a special June election will not get the needed support of a handful of Republicans.
“The June ballot is dead,” said Larry Gerston, a political scientist at San Jose State University. “They’ve run out of time.”
…
Related News
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Fri, Apr 1 2011
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Thu, Mar 31 2011
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Thu, Mar 31 2011
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Wed, Mar 30 2011
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Tue, Mar 29 2011
Well Mr.Bear, what can Mr. Brown do to squeeze the repubicans walNUTS, ’cause they needs a tight clasp with nails extracted to get their thumbs otta their
arsemouth.Professor Budget answers questions about comparisons of states’ budgets
By Professor Budget
Mercury News
Posted: 04/01/2011 11:46:31 AM PDT
Updated: 04/01/2011 12:53:57 PM PDT
My four sisters and I would like to thank all of you who looked at our recent comparison of the budgets, taxes and spending in the five largest U.S. states (click here for that package of charts). We appreciate the compliments. Many of you had further questions, so we’d like to answer some of those.
Q: Why didn’t you compare all kinds of taxes, in particular those paid by property owners and corporations?
A: The taxes we chose to compare are those which California Gov. Jerry Brown wants to extend current rates for five years: personal income tax, sales tax and vehicle license fees.
Because of the space limitations of a single-page graphic, my sisters and I decided the best way of dealing with the various other taxes was to compare total state tax revenues, divided by state populations. The taxes we didn’t single out for comparison were included in those “per-capita” numbers.
California’s property tax rates are unusually low because of Proposition 13, the tax-cutting initiative passed by voters in 1978. But high real estate prices keep property-tax revenues in the Golden State high.
According to the Tax Foundation, the same private group whose research we used to compare the other taxes, California ranks 14th among the states in per-capita property tax receipts. New York ranks fifth, Illinois ninth, Florida 10th and Texas 17th.
The property-tax question also came up in the context of education, which derives much of its funding in California from property taxes. Because states calculate property taxes in a variety of ways, we decided to keep it simple and compare the amount of money each state spends per student.
California ranked fifth nationwide in corporate income tax receipts per capita, ahead of the other big states: New York (which was 8th), Illinois (which was 9th), Florida (which was 29th) and Texas (which was 47th). Texas, by the way, has something called a “margins tax,” which is not technically a corporate income tax.
All the data sometimes made even Professor Budget’s head spin. As you can see, taxation is a very complex matter, making comparisons difficult. But the nonprofit Tax Foundation has a wealth of information comparing the states on various tax measures. Go to www dot taxfoundation dot org if you’re interested in learning more.
…
* POLITICS
* APRIL 2, 2011
State Budget Talks Take Two Tracks
By BOBBY WHITE and JUSTIN SCHECK
This year of statehouse budget fights has yielded very different results so far in New York and California, two states known for bruising fiscal standoffs.
California Gov. Jerry Brown’s negotiations with lawmakers over closing the state’s $26.6 billion budget gap dissolved into partisan sniping this week, marking the Democrat’s first major setback since he returned as governor in January.
Mr. Brown ended budget negotiations with state Republicans Tuesday because of disagreements over how to overhaul the state’s public-employee pension system and spending rules.
That left an uncertain path to a budget deal by a June 15 deadline set by law.
In Albany, meanwhile, first-year Gov. Andrew Cuomo pushed through with relative ease a $132 billion spending package that makes cuts once unthinkable in the heavily Democratic, pro-union state.
Scott Pattison, executive director of the National Association of State Budget Officers, said Mr. Cuomo had two advantages over some other governors: strong poll numbers and the power to put forward piecemeal budget bills on his own. That means Mr. Cuomo could more squarely blame a government shutdown on legislators if they refused to pass his measures, he said.
“That specific power is relatively rare,” Mr. Pattison said.
The New York budget will reduce overall spending by about 2% through a 1% decrease in Medicaid spending, prison closures and a $200 million cut in aid to colleges and universities.
Mr. Cuomo’s budget agreement averts major tax increases, fulfilling a campaign pledge. But it isn’t without critics. New York Mayor Michael Bloomberg called it “outrageous” because he said the cuts fell disproportionately on the city compared with the rest of the state.
New York lawmakers approved the package early Thursday, marking the first time since 1983 that Albany adopted a budget before it was due.
In Sacramento, the picture is bleak by comparison.
…
Is it just my subjective impression, or is the California budget situation far more dire this year than in any year when The Governator was in office?
Opinion L.A.
Observations and provocations
from The Times’ Opinion staff
Pension reform isn’t as dead as the state budget deal
March 31, 2011 | 4:28 pm
Brown Gov. Jerry Brown, trying to seize the reform high ground from Republican lawmakers, released today seven specific legislative proposals to curb abuses with public employee pensions and shore up pension-fund reserves. None of them are as dramatic as the Little Hoover Commission’s proposal to roll back the future benefits accrued by current state employees, but they’re meaningful nonetheless. Brown also indicated that he’s developing five more pension proposals, including potentially contentious plans to cap pensions and create an optional “hybrid” plan that combines a smaller pension with Social Security benefits and a 401(k).
The announcement has intriguing implications for Brown’s effort to close the state’s $26.6-billion budget gap. Negotiations with GOP lawmakers over a ballot measure to extend about $12 billion in temporary taxes broke down this week, all but assuring that voters will not consider the tax extensions in June. Pension reform was of the top items the GOP had sought in exchange for letting voters consider the tax issue. If the legislature moves ahead on significant changes to state worker pensions, that bargaining chip would effectively be taken off the table.
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Opinion: The climate for making stuff here is crap.
* OPINION
* APRIL 1, 2011
We’ve Become a Nation of Takers, Not Makers
More Americans work for the government than in manufacturing, farming, fishing, forestry, mining and utilities combined.
By STEPHEN MOORE
If you want to understand better why so many states—from New York to Wisconsin to California—are teetering on the brink of bankruptcy, consider this depressing statistic: Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government.
It gets worse. More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined. We have moved decisively from a nation of makers to a nation of takers. Nearly half of the $2.2 trillion cost of state and local governments is the $1 trillion-a-year tab for pay and benefits of state and local employees. Is it any wonder that so many states and cities cannot pay their bills?
Every state in America today except for two—Indiana and Wisconsin—has more government workers on the payroll than people manufacturing industrial goods. Consider California, which has the highest budget deficit in the history of the states. The not-so Golden State now has an incredible 2.4 million government employees—twice as many as people at work in manufacturing. New Jersey has just under two-and-a-half as many government employees as manufacturers. Florida’s ratio is more than 3 to 1. So is New York’s.
Even Michigan, at one time the auto capital of the world, and Pennsylvania, once the steel capital, have more government bureaucrats than people making things. The leaders in government hiring are Wyoming and New Mexico, which have hired more than six government workers for every manufacturing worker.
Now it is certainly true that many states have not typically been home to traditional manufacturing operations. Iowa and Nebraska are farm states, for example. But in those states, there are at least five times more government workers than farmers. West Virginia is the mining capital of the world, yet it has at least three times more government workers than miners. New York is the financial capital of the world—at least for now. That sector employs roughly 670,000 New Yorkers. That’s less than half of the state’s 1.48 million government employees.
Don’t expect a reversal of this trend anytime soon. Surveys of college graduates are finding that more and more of our top minds want to work for the government. Why? Because in recent years only government agencies have been hiring, and because the offer of near lifetime security is highly valued in these times of economic turbulence. When 23-year-olds aren’t willing to take career risks, we have a real problem on our hands. Sadly, we could end up with a generation of Americans who want to work at the Department of Motor Vehicles.
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Great vampire squid blood funnels will seek low-interest-rate lending.
Goldman made multiple trips to Fed window
By Justin Baer in New York
Published: April 1 2011 01:38 | Last updated: April 1 2011 01:38
Goldman Sachs turned to the US Federal Reserve’s discount window on multiple occasions following its conversion to a bank holding company at the height of the financial crisis, according to documents released by the central bank.
The documents appeared to contradict public statements by Gary Cohn, Goldman’s president, who said the bank only tapped the window once in the wake of the crisis.
Goldman borrowed $50m on September 23 2008, then returned to the window on October 1, when the bank borrowed $2.5m, and again on October 23, when it received $5m, a review of data from late 2008 shows.
Bloomberg News reported that the bank visited the discount window at least two times between 2009 and 2010.
Goldman argued on Thursday that Mr Cohn only knew about the initial $50m overnight loan, which the bank used at the Fed’s behest to test its systems. When the bank made its return visits to the discount window to conduct further tests, senior executives were not informed, the bank said.
“The amounts involved were de minimis and the testing was routine,” a Goldman spokesman said. “The fact that we tested the system to insure our procedures worked smoothly was made known to senior executives. Routine tests thereafter were considered part of the normal course of business.”
…
The Financial Times
Goldman doubled CEO bonus for 2010
By Justin Baer and Suzanne Kapner in New York
Published: April 2 2011 01:06 | Last updated: April 2 2011 01:06
Goldman Sachs doubled Lloyd Blankfein’s annual bonus for 2010, awarding the chief executive $18m in cash and stock for steering the bank through one of the most tumultuous years in its history.
Mr Blankfein’s bonus included $5.4m in cash and restricted shares valued at $12.6m. His salary has been increased from $600,000 in 2010 to $2m in 2011.
A year ago, with Wall Street pay practices under severe regulatory and political scrutiny, Goldman paid Mr Blankfein a bonus of $9m, all in restricted shares. As the year progressed, Goldman faced a slew of new challenges, including civil charges from the Securities and Exchange Commission and a tepid trading environment that crimped profits.
The bank paid $550m to settle the SEC’s complaint in July.
…
The Financial Times
Portugal will follow Greece and Ireland to failure
By Desmond Lachman
Published: March 31 2011 12:20 | Last updated: March 31 2011 12:20
Oscar Wilde famously wrote that to lose one parent may be regarded as a misfortune; but to lose both looks like carelessness. One has to wonder what he might have said about the International Monetary Fund and the European Union. For after effectively losing Greece and Ireland through the standard prescription of draconian fiscal tightening, the IMF and EU look set to lose yet a third country, Portugal.
Indeed, they appear set to do so by prescribing for Portugal the same failed policy approach of savage fiscal retrenchment in the most rigid of fixed exchange rate systems that has had such dismal results to date in Greece and Ireland.
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Extend and Pretend is Wall Street Banks Friend
Stock-Markets / Credit Crisis 2011 Mar 31, 2011 - 04:51 AM
By: James_Quinn
The storyline that has been sold to the public by the Federal government, Wall Street, and the corporate mainstream media over the last two years is the economy is recovering and the banking system has recovered from its near death experience in 2008. Wall Street profits in 2009 & 2010 totaled approximately $80 billion. The stock market has risen almost 100% since the March 2009 lows. Wall Street CEOs were so impressed by this fantastic performance they dished out $43 billion in bonuses over the two year period to their thousands of Harvard MBA paper pushers. It is amazing that an industry that was effectively insolvent in October 2008 has made such a spectacular miraculous recovery. The truth is recovery is simple when you control the politicians and regulators, and own the organization that prints the money.
A systematic plan to create the illusion of stability and provide no-risk profits to the mega-Wall Street banks was implemented in early 2009 and continues today. The plan was developed by Ben Bernanke, Hank Paulson, Tim Geithner and the CEOs of the criminal Wall Street banking syndicate. The plan has been enabled by the FASB, SEC, IRS, FDIC and corrupt politicians in Washington D.C. This master plan has funneled hundreds of billions from taxpayers to the banks that created the greatest financial collapse in world history. The authorities had a choice. This country has bankruptcy laws. The criminally negligent Wall Street banks could have been liquidated in an orderly bankruptcy. Their good assets could have been sold off to banks that did not take their extreme greed based risks. Bond holders and stockholders would have been wiped out. Today, we would have a balanced banking system, with no Too Big To Fail institutions. Instead, the years of placing their cronies within governmental agencies and buying off politicians paid big dividends for Wall Street. Their return on investment has been fantastic.
The plan has been as follows:
- In April 2009 the FASB caved in to pressure from the Federal Reserve, Treasury, and Wall Street to suspend mark to market rules, allowing the Wall Street banks to value their loans and derivatives as if they were worth 100% of their book value.
- The Federal Reserve balance sheet consistently totaled about $900 billion until September 2008. By December 2008, the balance sheet had swollen to $2.2 trillion as the Federal Reserve bought $1.3 trillion of toxic assets from the Wall Street banks, paying 100 cents on the dollar for assets worth 50% of that value.
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