Bits Bucket for May 6, 2011
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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‘Squatter Rent’ May Boost Spending as U.S. Mortgage Holders Bail
Bloomberg - May 6, 2011
‘Squatter’s Rent’ May Be Adding Billions to Spending
Melissa White and her husband stopped paying their mortgage in May 2008 after it reset to $3,200 a month, more than double the original rate. That gave them extra cash to pay off debts and spend on staples until their Las Vegas home sold two years later for less than they owed.
“We didn’t pay it for about 24 months,” said White, who quit her job as a beautician during that period after becoming pregnant with her first child and experiencing medical complications. “What we had, we could put towards food and the truck payments and insurance and health things I was dealing with.”
Millions of Americans have more money to spend since they fell delinquent on their mortgages amid the worst housing collapse since the Great Depression. They are staying in their homes for free about a year and a half on average, buying time to restructure their finances and providing an unexpected support for consumer spending, which makes up about 70 percent of the economy.
So-called “squatter’s rent,” or the increase to income from withheld mortgage payments, will be an estimated $50 billion this year, according to Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. The extra cash could represent a boost to spending that’s equal to about half the estimated savings generated by cuts to payroll withholding in December’s bipartisan tax plan.
“We’ve had a lot of government transfers to the household sector; this is a transfer from the business sector to households,” Feroli said. “It’s a shock absorber that has helped the consumer ride out the storm.”
Because they decide not to pay doesn’t mean they don’t owe. Somewhere down the road these missed payments are going to come back and bite them.
The pool of stay-but-don’t-pay folks is huge, which makes it very dangerous, financial wise, to be one of its members. A pool of owed money that is growing at a rate of fifty-billion dollars a year will be too juicy a target to pass up.
Nothing a BK won’t handle. Its not like their credit isn’t already shot.
“What we had, we could put towards food and the truck payments ”
Is it me, or do blue collar FBs (she’s a beautician) alway drive trucks?
“Nothing a BK won’t handle.”
Not making a prediction or anything, but a twist could be put into the law that would exempt this money that is owed from BK protection. For example, the change in the law could declare this money as being owed to taxpayers rather than banks and it is the taxpayers that are suffering the losses and thus the mighty forces of the IRS could be unleashed onto them.
I would not be surprised if BK laws were tightened up even more. For that reason I recommend to anyone considering a BK to go for it. It might be a lot harder later.
They may owe the mortgage payments they didn’t make, but they don’t owe rent. If the bond holders/bank(s) who have the right to foreclose decide not to do so - or just don’t get around to it - that does not create a lease.
I don’t see the politicians tightening up BK rules to specifically say that you can’t get out of past due mortgage payments because you were still living in the house. Theoretically possible, but vanishingly unlikely. And making the money payable to taxpayers? Never happen. Never. If they want the taxpayers to get it they are going to have to enforce some right against the bank and make the bank go after the cash. If nothing else, there are not enough federal employees around to do it.
I’m thinking that they’ll make harder to file for BK altogether.
Since the banks are backstopped by the Fed, I can see bank debt becoming like student loan debt and not dischargeable in bankruptcy.
“bank debt becoming like student loan debt and not dischargeable in bankruptcy.”
A banker’s dream!
In my south Denver nabe the blue collar WT all drive big azz trucks (many festooned with patriotard ribbonz). The 2nd, 3rd generation Mexican-Americanos drive either big azz trucks or SUVs. The white yuppie 1st time homebuyer gentrifier kidz all drive Subarus or X-Terras with complicated looking roof racks.
Education and income inversely proportionate to MPG, it seems.
Education and income inversely proportionate to MPG, it seems.
And then there are those of us who are well-educated and make good income who drive vehicles with “complicated roof racks” because we use the vehicles for getting outdoors in places where high ground clearance and 4WD is required.
Sorry to interrupt your stereotyping….
The X-Terra roof racks aren’t really that complicated. They make them out of real metal and my canoe fits up there perfectly.
“where high ground clearance and 4WD is required.”
Couldn’t you just bike there? That would let you off the “required” hook. Biking out to Samuel P.Taylor State Park this weekend myself.. Yee-ha!
Uh, well I guess you couldn’t bike with a canoe. But I did bike with a duel fuel Coleman stove the other day. Bungee cords bay-bee!
Couldn’t you just bike there? That would let you off the “required” hook.
I’m guessing you’re being sarcastic, but just in case…yes, that 40 mile bike ride into the mountains with a 60m climbing rope and gear..that’d be a blast. And then the ride home afterwards….
at least I’d be in good shape
“Subarus or X-Terras with complicated looking roof racks.”
There are probably a lot of skiiers and snowboarders among them.
The first winters we were in Western Washington, I felt a bit trapped when all of the passes closed - chains or 4WD required. And there have been times when I did not get out of my neighborhood because I do not have 4WD and high clearance.
Ooh, jealous Mr. Bubble! I bike all over the Bay Area (40-80 mile rides) and it’s an awesome place to do long rides.
Been posting a lot cuz I’m home recuperating from a sports injury surgery.
Try riding Tunitas Creek Road UP from Hwy.1. Killer.
Couldn’t you just bike there? That would let you off the “required” hook. Biking out to Samuel P.Taylor State Park this weekend myself.. Yee-ha!
My ride will be a 40 miler this weekend, but I’m not climbing anything once I get there! I stupidly signed up for a century (100 mile) ride on October 1 and I’m getting nervous. My 10 mi bike commute (soon to be 20 mi) will help with that though!!
It’s Bike to Work Day on Thursday in the SFBay. $0.00 0/10 gallon!
MrBubble
PS: Anybody else wishing that they hedged silver with a few puts or a short ETF? Ouchie the Clown!
Which one? October is far away and plenty of time. I’ve been in bed for 2 weeks and haven’t done any exercise for months and just signed up for an Olympic distance triathlon in September.
Start slowly, then taper.
I stupidly signed up for a century (100 mile) ride on October 1
“Tunitas Creek Road UP from Hwy.1. Killer.”
That road is hard to DRIVE! You’re nuts, clearly. Heh.
“Which one?”
The Levi Leipheimer (sp?) Gran Fondo in Santa Rosa. The Kings Ridge climb is on youtube and it looks gnarly.
Sorry to hear that you’re laid up. I know how it feels. I dropped 30 pounds last year, then had to have multiple surgeries, couldn’t/didn’t exercise and put it all back on (29 to go now). Keep up your positive attitude and we’ll be waiting for you on the road, wheels side down.
“Is it me, or do blue collar FBs (she’s a beautician) alway drive trucks?”
Mine drives an Element. Is that cool? Big as a truck really.
“The pool of stay-but-don’t-pay folks is huge, which makes it very dangerous, financial wise, to be one of its members.”
I disagree. Like the “swarms” who all come into a store at the same time and quickly loot it, the sheer numbers make any individual’s chances of getting caught, or having to cough up the shortage, at least somewhat less.
The pool of stay-but-don’t-pay folks is huge, which makes it very dangerous, financial wise, to be one of its members.
Yeah, but sometimes it’s dangerous to not be in the middle of the ball when the sharks are circling, too.
“Somewhere down the road these missed payments are going to come back and bite them.”
But meanwhile, think of the great amount of stimulus they contribute to the economy, by throwing money away on consumption goods rather than making those onerous monthly rent or mortgage payments.
No, this is NOT a transfer “from the business sector to households.” This is a transfer from taxpayers to the government to the business sector to households.
This is a transfer from taxpayers to the government to the business sector to households.
In other words, a transfer from the productive members of society to those who aren’t…
“business sector” = “productive members of society”
I just spit my coffee out! You’ve just to let us know when you’re gonna make cracks like that.
I just spit my coffee out!
I think you misunderstood. The “business sector” is a middleman here.
I was referring to the end points of the A->B->C->D graph.
“I think you misunderstood.”
Gotcha, I did misunderstand.
So anyone who can’t pay their mortgage is non-productive? Please define productive.
Like many here, I’m tired of the “poor me, my mortgage doubled,” complaint. Since interest rates are low this is PURELY due to signing up for an exploding teaser rate suicide loan that they NEVER had any reasonable expectation of paying. But that’s just a distraction from the point that for many, “squatter’s rent” has replaced MEW as a means of continuing to live beyond their means. That means that we’re STILL not close to an economy based on consumer spending that has fallen in line with income.
+ 37.62
(just felt like using a non-whole number)
Bah, should have gone higher, if you ask me.
+ 6.02 x 10^23.
That’s a whole number, though.
6.02 x 10^23.
I hate seeing a number like this and knowing I should know what it is…
6.022 x10^23…isn’t that Avocadro’s constant?
Avagadro’s number… the infamous “mole.” It’s just another conversions factor: 6.02 x 10^23 amu = 1 gram.
In reality, it’s probably not a whole number…
“it’s probably not a whole number”
Why not? It’s the number of atoms in a mole, right?
Yes, it’s the number of atoms (or molecules) in a mole, but without the gram side of the equation, the “mole” label is useless for practical purposes. I believe the fiat definition is that 1 mol of carbon-12 is exactly 12 grams, where 12 grams is 6 protons and 6 neutrons. But I never figured out if they counted the 6 electrons in the carbon atom. An electron has 1/1850 the mass of a proton, so a mol of carbon-12 would weigh 12.003 grams, not 12 grams. That might make for a non-integer mol. it depends how you look at it.
Yes. I thought that you meant that the Avo’s number itself was not a whole number, and I was saying that it is (atoms/mol). But now it seems that you were actually saying that a mole is not a whole number (for the reasons stated in your next post) and I agree whole-heartedly.
Ogre: “Nerrrrrrdddds!”
just felt like using a non-whole number
I’m partial to imaginary numbers.
“exploding teaser rate suicide loan that they NEVER had any reasonable expectation of paying.”
But (,but, but) they were told that housing would only go up, buy now or get priced out forever, and anyway you can refinance before it resets.
Great, so we are paying to make the shadow inventory possible, while meanwhile the select few (the FBs) benefit royally through years of free rent. If it hadn’t been for TARP, the banks would have kicked them out on their ears long ago. This is why we should make sure than no TARPist ever gets re-elected.
“So-called “squatter’s rent,” or the increase to income from withheld mortgage payments, will be an estimated $50 billion this year…”
And of course, ’squatter’s rent’ is a loss for someone, which will promptly be recognized….
“We’ve had a lot of government transfers to the household sector; this is a transfer from the business sector to households,” Feroli said. “It’s a shock absorber that has helped the consumer ride out the storm.”
More like a gift from bill payers and savers to the f’d buyers. Nothing will come of it either until after the next election season, IMHO.
The thing is, the storm isn’t over. Perhaps it’s helped some ride it out this far but this “squatter’s rent” thing is not unlike burning the furniture - it’s a one shot deal. While some may have used the opportunity to make real changes for the better chances are most squandered it on the luxury of extended denial.
I agree Ejohn…
“While some may have used the opportunity to make real changes for the better chances are most squandered it on the luxury of extended denial.”
I have to agree. Leadership is best when it is by example, and the example we see today looks similar to a strip mining operation as long as “too big to fail” policies are in place. A bonfire of the vanities, indeed.
~ No need to fret, I’m sure the number can squeak in just above 185,000 in an unexpected surprise move upward.
Markets fretful ahead of US jobs data
World markets in fretful mood ahead of US payrolls figures, oil prices tank again
LONDON (AP) — Mounting fears of a slowdown in the U.S. economy unnerved investors Friday ahead of crucial jobs data, with oil prices taking the brunt of the sell-off to extend their biggest one-day drop in two years.
Commodities were hit particularly hard because growth in the world’s largest economy is crucial for demand of crude, metals and raw materials.
Benchmark crude oil for June delivery was down $2.75 at $95.94 a barrel in electronic trading on the New York Mercantile Exchange. The day before, oil plunged $9.44 to settle at $99.80 a barrel as mounting concerns about the U.S. economy triggered the biggest one-day percentage decline in more than two years.
Investors have been spooked by a run of weak U.S. economic data ahead of the U.S. nonfarm payrolls data later. An unexpected 43,000 rise in weekly U.S. jobless claims Thursday added to concern about the recovery and suggested that the April payrolls figure may come in below current expectations for 185,000.
“Given the weakness of this week’s data some estimates have been revised down to the 160,000 level,” said Michael Hewson, market analyst at CMC Markets.
Get ready for another down-leg in the stock market and look for a chance-of-a-lifetime buying opportunity to emerge is a year or so.
Ah, I love America.
As long as corporate America can generate profits overseas, its all good.
I bumped into a former HP colleague yesterday. He told me that the new CEO rolled back the across the board 5% pay cut, but only for top performers (I guess its better than nothing) and that annual pay raises remain as rare as a virgin in a Vegas Chorus line.
I think it will happen sooner than that, combo. I’m a believer in “sell in May and walk away.” The reasons tends to vary, but it always seems that the DOW begins to dive in the early summer, is propped up by TPTB in late summer, and goes to pot in early fall and/or October.
If the dollar continues to slide the stock market might stay up, at least in nominal dollars.
I’m not thinking of the beginning of the decline, I’m thinking of the bottom.
Oxide, does your investment strategy involve timing the market?
No, not really. I time the stock market the same way I time the housing market. When I believe equity prices are based on fundamentals, I’ll put some cash into them. Any kind of stock price fall is a return to fundamentals. And stocks like to fall after May.
When I believe equity prices are based on fundamentals, I’ll put some cash into them.
Sounds like you’re my kind of investor, oxide. I feel the same way about stocks.
Get ready for another down-leg in the stock market and look for a chance-of-a-lifetime buying opportunity to emerge is a year or so.
I’ve been waiting for a long time. So far I just look stupid.
I hear you. I think that as long as the QEs keep coming the market won’t tank, at least not in nominal dollars.
I’ve thought the same thing (that you look stupid…hah, kidding :). I feel silly for missing the run up, but at the same point in time I think I just don’t want to participate in that rigged game anymore.
Aren’t there others here who have given up on the stock market? Or is everyone just waiting for another crash?
I feel silly for missing the run up
So far I’ve consoled myself that I’m not actually out any money because I skipped the drop from 14k (where I got out) as well. But if we go above 14k then at that point I actually am out money waiting for the “real” crash. I could have believed the 2008 bottom was the “real” bottom if it had bounced off the bottom a couple more times. But I refused to believe it was the real bottom when it just bungeed right back up again.
“(that you look stupid…hah, kidding :)”
badumpbump. Good one!
I’m curious combo, what shock do you see to the system that will prompt a massive selloff?
Massive job losses? Already done that.
Credit crunch? Already been there–lending is now increasing again with CMBS 2.0, local banks, etc.
Huge loss in home equity, prompting a collapse in spending? That one happened as well.
End of QE2? If there is one instant of trouble, don’t you think the Bernanke is going to start right back up with QE3?
Job creation collapse? The weakened dollar is helping exports, and so far all job growth has been in non-construction jobs (which represented 1/4 of all jobs lost). Retail space from bankrupt stores is being absorbed, as is industrial space, when construction of these product types recommences, and when housing starts increase, so will construction jobs.
Most of the pundits that I’ve seen that talk about a correction are talking about a 5-10% retrenchment, not a collapse in the market. If inflation rears it’s ugly head, you might even see more people piling into equities, as they flee bonds.
I guess I don’t see things being completely insanely out of whack as before…just a slow employment recovery based on non-existent housing recovery and poor (but improving) availability of credit.
Duration duration duration has not happened to the system yet. And even if there are good jobs in this recovery, it won’t affect housing, which will kill the banks, which will crash the market.
People couldn’t afford the homes even when they had a job. Their forclosure was baked in the cake when they didn’t sell out of their mortgage before the grace period on the I/O ran out.
Jobs will impact sentiment. Sentiment will improve housing. This is only possible because home prices are now more affordable than they have been for a long time (a couple of decades at least).
The FDIC is closing down banks at a far slower pace than the last couple of years (bank failures totaling $374B in assets in 2008, $171B in 2009, $96B in 2010, pace of $70B in 2011). The Fed has allowed many banks to earn their way out of the mess. I am seeing local banks start back up with lending again, which will improve asset values, which will in turn strengthen other banks.
Because of the major push to securitizations of debt before the crash, much of the problem debt is not in the hands of banks, but servicers/investors.
Said another way, I don’t see a crash from here being bank-led.
Rental Watch:
I was lucky to get out right before the crash, and then get back in shortly after it started to go back up again. But the trend we’re seeing looks exactly like the trend that caused the last crash and the one before it. If it gets back up to slightly higher than it was before yester-crash, then i will get out again.
I was in cash pre-crash, moved in over time to some companies that I understood and have been very happy with the result. At this time though, when I look at those companies that I own, they are on far firmer footing than when I bought them (more equity raised, deleveraged, de-risked debt profile–more fixed rate, longer duration, greater debt coverage, etc.). I don’t see those particular companies having anywhere near the risk or troubles that they had before if the economy has a shock.
I don’t think this repositioning is unique to these companies. Buinesses have had almost 3 years to de-risk their operations. I don’t see the downside risks as anywhere close to where they were pre-crash.
It’s funny how nobody in the MSM ever even mentions the cause of the bad employment numbers. They all keep acting like we should expect a “recovery” out of the middle of nowhere, even though corporations continue to offshore our labor with impunity. How long will it be before the newspapers themselves start to experience a decline in revenue, and become motivated to actually talk about the root cause of the problem?
Where have you been? Newspapers are dying all
over the country.
Yeah, they are losing revenue due to blogs and the like. But I’m talking about losing revenue due to consumer failure. Maybe the blog thing is so big that the papers don’t feel the consumer thing, idk.
Our local paper is going belly up. It’s being bought out and will be replaced by some generic paper with 2 pages of local news.
The local news is the only reason we still subscribe.
” They all keep acting like we should expect a “recovery” out of the middle of nowhere”
That’s what J6P keeps hoping, that things will just “bounce back”.
Big V, they are losing revenue due to circulation and lack of customers now and they know it, but, except for the dang socialeest/commie newspapers, they refuse to address it.
That’s the problem with the aristocratic mindset: only disaster will change their minds and maybe not even then.
“They all keep acting like we should expect a “recovery” out of the middle of nowhere…”
That’s because that’s what lots of people want to think. Coming off of fifty years of mild “cyclical” recessions, many cannot (and will not) contemplate any other possible outcome. (such as twenty years of stagnation)
100% correct. When I tell people that this time the change is structural and that right now its as good as its going to get, they get angry with me, especially those in the construction trades.
That’s one of the reasons I got out the construction trades many, many, many years ago.
They ain’t too bright.
That’s one of the reasons I got out the construction trades many, many, many years ago.
They ain’t too bright.
I’ve seen many examples of this here in Tucson. Even the people who own the companies aren’t that swift.
Only exceptions I’ve seen have been in big outfits that have been around for decades — Hensel Phelps, I’m lookin’ at you.
such as twenty years of stagnation ??
Coupled with inflation….
“(such as twenty years of stagnation)”
You are such an optimist.
Later in yesterday’s thread Rancher, Polly, and Arizona Slim mentioned they noticed a burst of commercial vacancies in their areas. The Professor asked if this was purposely kept out of the MSM spotlight.
I read two stories earlier in the week. Having trouble finding them again. The stories mentioned a deluge of commerical property coming up that needs to roll over their loans. But now the rents don’t support the original mortgage amounts.
If you want the lowdown of RE in an area search out a MSM outlet from another area. The MSM isn’t going to trash their home market but they’ll readily trash someone else’s market, especially is the story is too jucy to pass up.
The theme of “It’s different here” exists and is reinforced because of the local media.
I could have sworn it was Reuters that posted one of the stories. I was going to post it here myself the other day and probably never did it because I couldn’t tie my commentary up succinctly. Anyway could not find the article today at all and it was funny cuz the stuff I was googling was positive instead of the previous content. It was only Monday, Tuesday I first read it.
I see this activity in new strip centers in central Florida. These centers quickly fill up with kid’s party places, kitchen design stores, wine shops and sushi joints. Six months later, half are gone.
Most of the older strip malls have succombed to thrift stores, dollar stores, urban stores or Goodwill stores. There cannot be sufficient income with those losers.
New strip malls? Our local RE hasn’t gone anywhere nearly down the drain as it has in Florida, but I haven’t seen a new strip mall here in years.
There was a lot of retail construction coinciding with the “drive till you qualify” territory.
I think we just have too many stores, in spite of shopping being an American sport… Window shopping (without being able to buy) is no fun for most.
I don’t know about others, but I sometimes use a brick & mortar store as a showroom - to see and handle an item I’m interested in - but later order it from a web retailer for a lower total cost.
(And for many things shipping fees are cheaper than the price of gas and you save the time and aggravation.)
Ditto on the new retail. The DC area has a ton of new-looking strip malls and shopping centers to serve the bedroom communities. In one area of leapfrog McMansions territory, the area was served by a Weis Market and a Safeway; now they’re building a Wegman’s. The area can’t support all three grocery stores.
Yeah, under occupied McMansion developments begat under occupied strip malls and under-occupied schools. Probably hurt cable and electric companies, since they too built infrastructure based on the idea that these developments would be filled with customers.
“The area can’t support all three grocery stores.”
I agree. And yet how often do you see three drug stores occupying three of the four corners of a street intersection.
“I agree. And yet how often do you see three drug stores occupying three of the four corners of a street intersection.”
Raises hand.
How about 4?
Kmart
Safeway
Mom-n-pop
Walgreens
The margin on drugs is a lot higher than gas or groceries.
Drugstores in Hawaii (Long’s) sell a lot of beer and wine and (junk)food.
You forgot about nail places and Chinese restaurants!
I had no idea that so many women got their nails done. I don’t get it; my manicurist is a Swiss Army knife.
“I had no idea that so many women got their nails done.”
Its a biz that cornered by the Vietnamese community.
Oxide:
Have you ever gotten a pedicure? Those things tickle.
How much does it cost? (Obviously, I don’t get it either)
For many it may be as much a feeling of being pampered as the actual end product. Like a massage, only cheaper.
Here in this pricey city, a manicure and pedicure is upwards of $30. Some people go almost every week. Yowza.
How much does it cost? (Obviously, I don’t get it either)
For many it may be as much a feeling of being pampered as the actual end product. Like a massage, only cheaper.
Long time nail biter here and the tough acrylics are the only thing that stop me. I tried a couple local gals and after years of late appts and money trouble stories I finally found a good manicurist who is Vietnamese. Love talking to her and learning the huge differences in our countries.
No car financing, cash only.
Me? My manicurist is the nail clipper. Works on hands and toes.
My manicurist is my front teefers.
Works on hands and toes…..
Here in Tucson, a little hippie artsy-crafts store just closed one of its retail places. The headquarters store is still around.
Although the people running the place note the slow economy, and, yes, that sure is a factor around here, I think an over-estimation of the market was also a factor. After all, the hipster demographic isn’t that big.
Up close and personal. My friend who owns a lot
of CRE, was just notified by the bank that they
won’t roll on one of his properties. He’s scrambling
to find a new lender. Lots of dark windows.
I thought that strip malls were being filled by that new and upcoming national retailer (I see their signs everywhere): “Available Now”
“Now” the rents don’t support the original mortgages? That’s been the case for like a decade. It has only been through tax freebies that many commercial real estate has managed to stay afloat (until now).
Once again, that’s the problem with allowing the government to provide financial incentives to prop up any industry. Eventually, the financial risk grows to outweigh the government incentive, and we end up back at square one, only with an even bigger hole to dig out of.
What “tax freebies” allow commercial real estate owners to pay money that they don’t have?
Depreciation?
What has been keeping CRE afloat is that unlike residential loans, most of the properties out there actually had a cushion with respect to the rent being collected.
Said another way:
Residential lenders were loaning amounts where the payment requirement was $5,000 per month, when the people only made $3,000 per month.
Commercial lenders were loaning amounts where the payment requirement was $5,000 per month, when the building generated at a minimum $6,500 per month of free cash flow (1.3x debt coverage). The $5k included amortization.
So, when you have a small dropoff in rents, you can still pay the mortgage. When the rent dropoff exceeds your cushion, you may be able to get the bank to extend if 1) you pay down the loan by an amount, 2) they waive the amortization for a time frame, etc.
For perspective, many commercial REITs have debt coverage ratios of 1.75x-2.0x…even today. The 1.3x was generally the bare minimum for stabilized assets.
The bridge loans were different…they were more aggressively leveraged, but they also had a shorter terms…a lot of those have already gone back to the banks, and are finding their way back to the market at much lower prices.
Nope. I used to live in San Jose. The company I worked for got a local tax credit in exchange for renting a building in a distressed area. That’s a tax freebie that goes directly into the landlord’s pocket. If it weren’t for the tax credit, the rent would have to be that much lower.
This is an attempt by local government to revitalize an area. If it works and the area does revitalize, then the subsidy can be retired when enough new businesses move in. And the ROI on the original subsidy can work out for the city in increased property values and revenue.
It is more likely to work out in an expanding economy.
I can tell you that those tax “freebies” represent a teeny, tiny fraction of all real estate. I’ve been involved in many, many RE transactions over 10+ years, and exactly 1 has had any sort of tax credit associated with it (historical building renovation).
In NY we have a program where it’s related to environmental clean up:
“Admission to the state’s program allows developers to claim state tax credits of from 10 percent to 22 percent of not only the cost of cleaning up polluted land, but also the cost of redeveloping it for commercial use. The program applies to land where pollution is inhibiting development.
Given the proposed size of the Destiny USA project, developer Robert Congel could wind up receiving hundreds of millions of dollars in tax credits under the program.”
***********
BTW, Congel is one of those deep pocket guys I refer to. He’s a local w/large homes in both Skaneateles on the lake and Manlius and maybe an Adirondack palace for all I know. I wouldn’t say he’s loved and embraced. Like Trump he has a reputation for not paying his workers.
http://www.syracuse.com/news/index.ssf/2008/06/judge_reverses_state_decision.html
Any hints on where to find commercial properties in foreclosure? The foreclosure websites I’ve seen are mostly for residential houses.
If you have a local business journal of some sort, that’s a good place to start.
But now the rents don’t support the original mortgage amounts ??
Although rents are a part its more about vacancy, and a overbuilt market that has driven CAP rates up at least 40% on the really good properties and 100% on the 2nd teer stuff thereby reducing the market value…Some of the “build it and they will come” commercial has been reduced to the land value minus demolition costs…
Realtors Are Liars
Boldly stated.
Realtors are the reason wife is BK and she will be filing so as to hopefully get three extra little months in our pre-bank owned abode before we evict our realtor tenant and move into my home.
Her dog pees on our lawn and she says she will mitigate the damages. Probably move a couch over the stains, knowing her profession’s(world’s second oldest?) proclivities.
Does dog pee ruin lawns?
If G. Gordon Liddy were a realtor would he also be a liar or less than accurate?
“Realtors Are Liars”
Blowing your nose can cause a stroke.
Goldman lobbying hard to weaken Volcker rule
NEW YORK (Reuters) – Goldman Sachs Group Inc has just a few more months to put its stamp on the Volcker rule, and it is not wasting any time.
The rule, designed to limit banks from speculating with their own money, will cost Goldman at least $3.7 billion in annual revenue, by one estimate. And billions more could be at stake if regulations now being drawn up are extra-tough.
The Volcker rule was one of the main topics on the agenda when Chief Executive Lloyd Blankfein met recently with U.S. Securities and Exchange Commission Chairman Mary Schapiro.
Wall Street chiefs do not often lobby top regulators directly, but this issue is unusually important to Goldman.
“They’re totally freaked out about Volcker,” said a Goldman lobbyist who declined to speak on the record for fear of losing the contract. “People are working on that a lot, with agency staff, with lawmakers, you name it.”
http://news.yahoo.com/s/nm/20110504/bs_nm/us_goldman_volcker;_ylt=AuFRV0y.JXVT3qhj55X4z0y573QA;_ylu=X3oDMTJwY2lkcmFkBGFzc2V0A25tLzIwMTEwNTA0L3VzX2dvbGRtYW5fdm9sY2tlcgRwb3MDMjEEc2VjA3luX3BhZ2luYXRlX3N1bW1hcnlfbGlzdARzbGsDZ29sZG1hbmxvYmJ5
Good article.
“People are working on that a lot, with agency staff, with lawmakers, you name it.”
In English:
“They are churning out the bribes as quickly as possible to prevent fairness from creeping into the system.”
To translate Goldman’s position into common language:
“We’ve gotten used to skimming an un-Godly amount of the wealth from society, and we fear we will be limited to a mere obscene level under the Volker rule.”
Because if their bonuses fall from the absurd to the merely obscene, there’s going to be hell to pay.
Hell Toupe: A hairpiece that causes a lot of problems for its wearer.
Government of the highest bidder, not government of the people.
“Millions of Americans have more money to spend since they fell delinquent on their mortgages amid the worst housing collapse since the Great Depression. They are staying in their homes for free about a year and a half on average, buying time to restructure their finances and providing an unexpected support for consumer spending, which makes up about 70 percent of the economy.”
Lies, lies, lies. This was totally expected and planned. The American public and savers are the patsy at the poker table. One problem with this approach, people just go into bigger debt on CC’s, cities don’t get property taxes, how-mucha-month debt will back these consumers into total debt servicing and remove their disposable income from play. What these idiots at the top can’t grasp is that nothing is going to turn this ship around, with its steering gone I hope their are enough life boats for the prudent.
How can J6P get that 40K loan for his dream truck if he isn’t paying the mortgage?
My guess is that they already bought the truck and the house in 2006-2007. Forgoing the mortgage is the only way they can keep up the payments on the truck.
Of course, if they had bought with a 3-year loan, as car loans used to be, that truck would have been paid off.
Getting a car loan is pretty easy if all you care about is “howmuchamonth?” and ignore the fact you’re paying for 8 years. Or you lease it, with the downpayment rolled into a loan that is combined with the lease payments.
You don’t need good credit to get a car loan, just a willful ignorance of the time value of money.
And be willing to pay 20% interest I suppose.
A 40K loan at 20% over 8 years is 838 per month. Hard to swing if you’re only making $500 a week, even if you are living rent free.
You don’t even need to be able to “fog a mirror” to get a car loan.
BIL passed away in 2006 (cancer). Two months after he died, sis gets a call from Ford Motor Credit. Seems that someone who had my BIL’s personal ID bought a $40K truck 6 weeks after he passed, no money down. Then forgot about making Payment #1. And #2…..
The kicker was, they were going to come after his estate and her, unless she drove to downtown LA and filed a police report, and showing them his death certificate.
“Of course, if they had bought with a 3-year loan, as car loans used to be, that truck would have been paid off.”
Or it never would have been purchased in the first place.
Vehicles got so expensive that they couldn’t have sold as many without zero interest loans and other gimmicks.
I remember reading an article a couple of years ago about how people were buying new vehicles and trading in their 2-4 year old cars and having the balance of the previous car loan rolled into the new loan…
But people think a four year old car is “old”. Meanwhile, I recall that Consumer Reports found that the least reliable car tested in 2010 (a Land Rover, IIRC) was more reliable than the most reliable car tested in 2000.
Or they would have purchased a car that they could more easily afford. Most of the pickup truck I see on the road don’t have anything in the back. Most of the SUVs aren’t filled with passengers and/or driving on snow. The marginal utility of a larger, more expensive vehicle that burns more gas isn’t nearly as great as the utility of having a vehicle. For most people it would be cheaper (though less convenient) to rent a truck or van for those rare occasions that they really needed all tha capacity.
I bought my Prius in 2002. I think it needs some work now because my fuel efficiency is down like 10% and I have a pending error code. If so, that will be the first repair I have ever had to pay for. I can’t imagine trading in a car every 2-4 years when they can be expected to last for 15.
And just to further my comment above, just like houses, an orgy of lending allowed people to purchase much more car than they “needed” in the past. Cheap money meant that ther was a market for for more expensive cars, with bigger engines, and more expensive houses with more square feet than the generations before them. The difference is that raw materials (especially land) is a much bigger part of the the cost of a house than a car. So in response to purchasers being able to borrow less, land prices will tend to fall precipitiously until prices fall into line with affordability. But vehicles are not a long lasting and the manufacturing of them is a greater percentage of the cost, so that the mix of vehicles driven will adjust much more quickly than the mix of housing will in response to price pressure.
My best friend just took out a loan to buy a giant used gas guzzler. The guy is already in debt up to his eyeballs. I definitely see BK for him. Both his job and his wifes depend on discretionary income that is fast evaporating in this country. The funny thing is you can sit down at the bar and he seems to understand the situation in terms of the country but can’t stop the avalanche of borrowing. I get the impression his wife doesn’t understand money. I’ll stick to my civic hybrid w well over 150k that has required nothing but tires oil and filters since I bought it.
But people think a four year old car is “old”.
I’m sure seeing a lot of “older cars” in my upper middle class nabe. Today I drove the 5 year old Buick into work. That is one comfy car. My teenage son said: “Is is even possible to get road rage while driving this car?”
Anyway, the car is a cream puff, and I expect it to last at least 10 more years (just had the transmission flushed). It doesn’t get as good commuting MPGs as the 4 banger (33 vs 25), but its still way better than any truck.
Consumer Reports found that the least reliable car tested in 2010 (a Land Rover, IIRC) was more reliable than the most reliable car tested in 2000.
Interesting…any chance you can scrounge up an article from them? (or is it all paid content?)
My 1999 4Runner is still going strong. I’ve been investigating possible replacements so I’m not caught flat-footed when the time comes and I really am struggling. First off, everything’s considerably more expensive - $25k for a 3 year old used 4runner with 60k on it. Yikes! On top of that in 2003 they lengthened and widened the wheelbase.
I highly doubt any car purchased today is going to hold up as well as this old girl has.
Most of the SUVs aren’t filled with passengers and/or driving on snow.
To be fair, there’s not too much snow out there in May
I don’t rock climb nearly as much as I used to (the reason I originally brought my 4runner - needed something with high ground clearance to get out to the crag, and something I could beat up), however my next vehicle will likely be another mid-sized SUV. I’d love to get a subaru or an Audi all-road, which would get better gas mileage, but I want something more rugged.
Why? Because I want to be more actively involved in SAR activities. The organization I volunteer with has two ~5000lb equipment trailers we bring to rescues. I’d like to be able to tow one if need be. We also do transport of large animals, and need “scout” vehicles that can find a safe way in and out of potentially flooded areas, and you need a capable 4WD vehicle to do that effectively.
My point here is that not everyone driving those vehicles are going to be using them as a work truck daily, hauling equipment or rocks or towing a huge trailer. But some of us need to have a vehicle handy that is capable of doing that which we don’t have to rent or borrow.
I didn’t mean to sound like an eco-freak telling people what kind of cars I would make them buy. If you’ve got the money, buy what you want with it. But my point is that most people would choose differently if there was less “easy loan money” funding those purchases, and most of ‘em wouldn’t lose that much utility.
most people would choose differently if there was less “easy loan money” funding those purchases, and most of ‘em wouldn’t lose that much utility.
With that, I can agree. I think people would make vastly different choices if they had to actually pay with *their* money….they might actually learn the value of a dollar. And think in terms of “this object represents XXX hours/days/years of my life”.
In a salaried job I think it’s a bit more difficult to think in those terms. But when you contract outside of your full-time job, it’s easy to think in terms of “free time” vs the money I could make during that time. I’m very well aware of what an hour of my time is worth, and make decisions accordingly.
I can’t imagine trading in a car every 2-4 years when they can be expected to last for 15.
Our cars last forever because we don’t have long commutes. But for those poor suckers living in the exurbs and driving 2-4 hours each day, they might put over 250,000 miles on their car before it’s even 5 years old.
As a former auto mechanic, I can tell you that there are very few cars that are worth the upkeep after the odometer hits 300K.
“How can J6P get that 40K loan for his dream truck if he isn’t paying the mortgage?”
It’s easy if fed.gov is the guarantor of the auto loan paper.
Does it? Is there a fannie mae for car loans?
Is there a fannie mae for car loans?
I don’t believe so, but IIRC auto loans are/were securitized as well….it’s possible the FED is taking such securities as collateral as well.
Tariffs on imports would turn this ship around almost instantly.
Tariffs -> trade war
VAT with countervailing duties -> ok!
…added to it incentives/kickbacks to USA based companies in the name of “Job Growth Program” or “Make USA Program” -> fantastic!
The answer to America’s woes is so obvious it amazes me nobody is talking about it.
Just enforce a 20% VAT on all value addition (strong arm states into capping sales tax at say 5%). Apply a flat 20% countervailing duty to all imports. With the huge amounts of money generated, plough back say 30% to local companies manufacturing stuff here - give them incentives, free power, free training, low low cost loans.
If you’re looking for ideas to fix the economy, just look at how China does business. (Don’t pick up all the habits, just the good ones.)
There is already a trade war (in the form of a currency war), and we are losing. We (like the rest of the world) MUST defend ourselves using tariffs. Otherwise, the American dream is going to die. We were much better off when we had reasonable tariffs.
And I do not believe that a capitalistic, democratic, free society can “pick up good habits” from communists. A practice that works for commies probably won’t work for us. It’s like trying to fit a square peg into a round hole.
PS
I think the tariffs should be partially based on the exchange rate between currencies.
Big V, what you don’t seem to get is that I agree with you broadly, but the way it should be implemented is as a VAT. There are very nice ways by which you can undermine the opponent and benefit yourself. You can study this from the Chinese themselves - the way they ensure that their industries prosper usually at the cost of foreign pioneers.
On the other hand you can wear your jingo hat, say yes to trade war, and harp about communism and all that, but that’s not going to go very far.
yensoy:
I guess I don’t really know the difference between a VAT and a tariff, but tariffs do not equal trade wars. China charges tariffs on US-made goods.
“you can wear your jingo hat, say yes to trade war, and harp about communism and all that, but that’s not going to go very far.”
Call me Jingo Joe. Or I was. After seeing the crowd at Wal-Mart last night, I don’t much care. Talk about cheapening citizenship.
Speaking of which, at least the Romans could sell their Roman citizenships and get a little cash for a declining asset.
You can study this from the Chinese themselves - the way they ensure that their industries prosper usually at the cost of foreign pioneers.
Except that the US can’t really do that, since the US has few “foreign” pioneers to prosper from. Generally, the US has been the foreign pioneer for every other country.
Here’s a thought — start charging those tarriffs and VATs for every technology that was transferred overseas without being made fully public. Start with things like Coach knock-offs. Then move on to life-saving drugs which began in a government-grant funded American state university.
Big V
Tariff (as you propose) => directed only at imports
VAT (as I propose) => applies to both imports and local production
However, when was the last time you purchased a (pair of socks/electrical appliance/christmas ornament/utensil/watering can/PJs…) that was made in the USA?
So, let’s have a VAT and levy it on everyone. We knows who will hurt.
Let’s go further - earmark a good portion of the VAT to encourage (i.e. subsidize) local industry.
Oxide: Great idea, but whom are you going to charge tariffs for Coach knock-offs? Coach?
Yennie:
The whole point of tariffs is discourage consumption of imports without discouraging consumption of domestic products. Like I said, every other country imposes large tariffs on imports. We are the only ones who don’t do it; that’s why we’re also the only ones who are experiencing such a huge drop in our standard of living. Taxing everything at 20% would not discourage offshoring, it would just discourage consumption.
Also, I don’t like the idea of the government getting a big chunk of cash, and then using their own discretion to decide which companies/industries will get a piece. Much better to just compensate for currency disparities through a correction factor called a tariff. We should hurry up before we lose the trade war that has been waged against us for the last 30 years.
BINGO
Greg Mankew has also suggested an oil tax and using the revenue to do away with payroll taxes/ and tax breaks for manufacturing. Make energy more expensive and drive conservation. Make labor less expensive and decrease unemployment.
The problem
The elite have been making money hand over fist exporting jobs and they control the gov.
‘If you’re looking for ideas to fix the economy, just look at how China does business. (Don’t pick up all the habits, just the good ones.)’
The problem is that what makes China seem to be a success isn’t desirable or replicable in the US. For instance; develop a competitive advantage by allowing companies to pollute and exploit labor. (While giving the people no opportunity to change things via elections). Then use that advantage to draw companies from the developed world, make stuff and sell it back to the same countries.
http://www.sott.net/articles/show/228090-You-are-NOT-allowed-to-commit-suicide-Workers-in-Chinese-iPad-factories-forced-to-sign-pledges
As I read this on my iPad . . . .
Yeah yeah. Chinese workers commit suicide and American kids shoot their mothers. If you want to pick on the sensation gathering headlines in a country with a billion people, go right ahead. You will always find a man who bites a dog and you may mistake it for the norm, but ignorance will be to your detriment.
Yes there is pollution, but don’t think the government isn’t doing anything about it. There is a *lot* of emphasis in China about climbing up the value chain - discarding the old growth model of low value industries exporting cheap crap and replacing it with less polluting “idea/knowledge” industries.
Exploiting labour… there is some truth to it, again in the lowest value addition segments of industry. The tables completely turn the higher you go. It is very hard finding top quality talent in some industries and companies pay a lot for these people.
If you think China is all about 10$ appliances, sneakers and christmas ornaments, think again. For specifics - China is big in biotech, has a great pharmacy sector (admittedly, drug formulations and medical device technology stolen via the famous “joint venture” route) and has its own breed of consumer electronics companies (including for instance high end audio). China is the world’s leading supplier of heavy engineering products & services - power plants, transmission lines, tunnel boring machines, you name it. Is labour being exploited? Well, maybe, but workers are happy they have the opportunities today that their parents didn’t. Look at it another way, are workers in the US not exploited?
Ben, I will be happy to host you in China if you ever decide to visit. I am a 3rd party here - I don’t have any need to play up the Chinese situation and am well aware of the limitations of the Chinese growth model. Yet, there is a lot to be learnt, especially for the US as it finds itself in hard times.
It must be morale boosting to assemble toys for foreigners that cost about as much as your annual salary.
High-end employees (such as scientists) may be paid well by Chinese standards, but that Chinese money doesn’t go very far in the rest of the world. That’s why so many American scientists are working as waiters these days. That’s why we need to get back to the tariffs thingie. Let China produce it’s own companies, and let those companies employ Chinese scientists. We need to take care of our own. The intellectual property is also a stupid problem that we don’t need. If we would hire Chinese development firms, then they wouldn’t steal the fruits of our hard work and ingenuity.
And, I might add, you sound like an ad for China, inc. Let China succeed on its own, and let us get back to succeedin on our own.
I meant to say “if wouldn’t hire Chinese development companies, then they wouldn’t steal our …”
And other typos too.
Yup. But does anyone really want to trade places with them?
1. Those folks aren’t going to “get rich” off a year and half of not paying their mortgage. I’ll bet my bottom dollar that if they were struggling with money going in they’ll be struggling ten years from now.
2. What good does a little break like that do when your job skills aren’t in demand or your job has been permanently eliminated or offshored?
Hopefully some will take it seriously and immediately use the opportunity for self-betterment. OTOH, those simply hoping to wait this out (thinking it’s merely cyclical and boom times are imminent) may be in for a nasty shock. Then what do they do?
OTOH, those simply hoping to wait this out (thinking it’s merely cyclical and boom times are imminent) may be in for a nasty shock. Then what do they do?
What they’ve always done: try to get in on the ground floor of the next gravytrain/bubble/scam. Some people actually have a nose for that kind of stuff. Like a hound dog can small a fish fry from miles away.
(www.latimes.com/business/la-fi-pension-overhaul-20110505,0,7054972.story)
“Proposals would cut benefits for California employees 25% to 40%
In an analysis of two concepts, the nonprofit California Foundation for Fiscal Responsibility warns that the state’s five biggest pension funds are in precarious financial conditions…According to the study, to be released Thursday, California’s five biggest pension funds are in precarious financial conditions. Last year, they had only enough money to cover 61% to 74% of their obligations to current employees.”
Now let’s see who has the balls to get the job done!!
Look for corporate pensions to be cut after the dust settles from public pension cuts.
Yesterday I got a peek at the funding of the pension plan where I work.
The value of the assets of the plan has been changed from a market-based method to an accural-based method. The accural-based method shows the fund to be full funded, the market-based method shows the fund to be underfunded.
Games, it’s all about games. And numbers. The market-based method would require (gasp) more money to be put into the pension fund, the accural-based method doesn’t, so the accural-based method is the method of choice. But somehwhere down the line reality is going to raise its ugly head and, because the promised money won’t be there, pensions outlays will have to be cut.
Does your company have unionized workers? It seems to be that the only private sector employers that still offer pensions are those that have at least part of its workforce unuionized.
Yes, it’s (mostly) unionized.
Unions have their faults but I’ll take a union job over a non-union job anytime.
So will everyone else.
exactly
It’s a balance of power thing. I tell people I’m not 100% pro union but I am for a balance of power and right now corporate America owns everything and they are going to destroy the US unless their power is rolled back. This I fear is very unlikely to occur. They have increasing financial power and control of the media and an army of idiots.
“Unions have their faults but I’ll take a union job over a non-union job anytime.”
So you’re one of those people who are living “lavishly”.
dam dem lavish living lowlifes!
Look for corporate pensions to be cut after the dust settles from public pension cuts.
Corporate pensions? What are those?
Welcome to the world of 401ks.
Even after public pensions are cut - they will STILL be the most generous pensions out there…
Coporate pension? What’s that?
My mother has one of those corporate pensions. She managed to get hired one year before they were ended for new employees Some how her company has escaped bankruptcy.
I wish I had a corporate pension or a 401k.
Instead I get to put a measly $5k into an IRA each year and just need to sock away a portion of my income to create my own retirement pool for myself.
“Proposals would cut benefits for California employees 25% to 40%
Working people scrambling for the crumbs. This “voters are fed up” is a disingenuous divide and conquer ruse.
Votes have to be taxes to insane lavels to pay for insane public union pensions…
Conn. approves tax credit for working poor
“It’s a form of welfare,” said House Minority Leader Lawrence Cafero, a Republican from Norwalk. “We’re writing a check.”
Those eligible can claim 30 percent of the federal earned income tax credit. Cafero said the level is far too generous, recalling that Rell and fellow Republicans balked at a credit proposed at 5 percent of the federal amount in 2009.
The plan gives credits of $137 to $1,700 for single heads of households with incomes of between $5,950 and $16,500 and up to $21,500 for joint tax filers.
Looney said the credit will help cushion the impact of the sales tax, which the Legislature and Malloy increased to 6.35 percent from 6 percent.
Cafero scoffed at the idea that low-income residents will buy enough items to recoup as much as $1,700 in sales tax. He said the Republican alternative was to not raise taxes.
Edward J. Deak, an economist at Fairfield University, said the tax credit could force the state to make up for lost revenue by raising taxes on upper-income residents who could flee to states with lower income taxes.
“It’s focusing on the share of the population that has a greater ability to pay, but whether they’ll remain in Connecticut is a different question,” he said.
Read more: http://www.patriotledger.com/business/x1036464103/Conn-approves-tax-credit-for-working-poor#ixzz1LZdNvc00
Here come the hedge fund plant closings…..
“It’s a form of welfare,” said House Minority Leader Lawrence Cafero, a Republican from Norwalk. “We’re writing a check.”
Or a form of business subsidy, a way of allowing business to continue to pay less and still have workers show up to work despite high housing prices in Connecticut.
The better off have to forced to accept that they have pushed down the wages and benefits of everyone else by voting in favor of them every time they shop, and benefitted from those lower wages and benefits in lower prices.
The beneficiaries include, by the way, unionized public employees, retired public employees and the retired with retirement benefits subsequently eliminated where they worked, as well as CEOs and the rich.
Bingo.
Of course they’ll remain in Connecticut — they can’t sell out of their house! And I really doubt that those with the greater ability to pay bought a house frugally to where they can afford to lose money on the house if they move.
I love hearing from millionaires that the poor are making too much money.
Cake anyone?
Whitney Defends Her Prediction of ‘Hundreds of Billions’ in Muni Defaults
By Christopher Palmeri - May 4, 2011 3:35 PM ET
Meredith Whitney, the analyst who correctly predicted Citigroup Inc.’s 2008 dividend cut, defended her prediction of “hundreds of billions of dollars’ worth” of municipal-bond defaults.
Whitney, 41, speaking today at the Milken Global Conference in Beverly Hills, California, said local governments in states such as California, Nevada, Arizona and Florida that are dependent on the housing and construction industries for higher tax revenue would continue to struggle financially.
“States have been spending at two-and-a-half times their tax receipts,” she said. “The states then are cutting off aid to their local governments which rely on them for over a third of their monies. The local municipalities have nowhere to go and their bias is to save their constituents before they save their bondholders.”
http://www.bloomberg.com/news/2011-05-04/whitney-defends-her-prediction-of-hundreds-of-billions-in-muni-defaults.html - 54k -
I was thinking about this yesterday. People are complaining that private sector companies are sitting on cash rather than create more jobs or invest in capital equiment.
However, isn’t hiring and investing exactly what the states did? When state revenue went up (due to RE taxes), states and local munis hired people and built new fire stations. Then when the revenue went down and had to lay people off, we called the states “stupid” and they should never have hired.
I guess coporations are learning from the states’ mistakes.
The large companies that are flush with cash are going to use this cash to buy up on the cheap the small companies that are going to be thrown onto the market at fire sale prices in the coming year or two.
I saw this first hand in 1974 and I am looking for a replay.
It’s notable that many large companies get large not because of their own internal growth but because they are able to buy up smaller companies. This especially works well for the large companies when small companies are cheap to buy.
This works only if the management is smart enough to handle the increased complexity.
I know of companies that have divested brands they purchased at significant losses.
“This works only if the management is smart enough to handle the increased complexity.”
True dat. But when prices are REALLY cheap then a lot of mistakes can afford to be made.
I think the dynamic of drug companies is very interesting. There are a LOT of start-up drug companies that spend a lot of time and money trying to research and bring to market a product, and most of them fail. But the ones that don’t fail - the ones that actually come up with something worthwhile - are then bought up by a larger drug company who then take over.
So, in effect, the smaller drug company startups act as proving grounds that the larger drug companies can cash in on when it suits them.
combotechie: I think this sort of structure is fairly common in business characterized common failure and occasional great success. It shields the large companies from the much of the costs of the many failures. Wildcat oil drillers, game coders etc.
Jim, I much agree.
The trick, as an investor, (IMO) is to invest in a large enough company that can do the buying but not so large a company so as such buying doesn’t add much to the bottom line.
combo:
Large pharma companies do not buy successful small pharma companies. A small pharma company that has already proven its product has no incentive to sell. Those guys will make a mint. The large companies usually buy the small ones once they have progressed to a stage where they look like they will probably succeed, but there is still a lot of risk.
Big V–And it’s my understanding that this is where experience with the regulatory process of getting a drug approved rather than the actual development of the drug itself.
No it also works when large companies destroy all competition and essentially run oligopolies/monopolies.
“People are complaining that private sector companies are sitting on cash rather than create more jobs or invest in capital equiment.”
The private sector seems to understand that more productive capacity (be it for goods or services) isn’t really needed. QE can’t work right now because the money do anything besides create distortions in the economy.
You mean QE2 can’t work right now because of QE1, right?
Yeah, but what are “monies”. Did she mean to say “money”, as in “water” or “air”, the type of thing that is spelled the same way regardless of the amount?
“Monies” are like “peoples”. A plural noun formed from a plural noun being used as a collective noun. eg. The peoples of the world have come together. or Those monies were stolen from those accounts.
Yeah, but peoples are multiple groups of people. How do you get multiple groups of money? I have two piles of cash, so those are monies, but they would just be money if they were in one pile? I still don’t get it.
But when you use the word “monies” you’re usually trying to convey that you’ve gotten your big pile of money from several different places.
I hate “execu-speak.” It makes you wonder just how someone can be so dumb and yet make so much money.
More proof that the stupid really do take care of their own.
Whitney, 41, speaking today at the Milken Global Conference in Beverly Hills, California, said local governments in states such as California, Nevada, Arizona and Florida that are dependent on the housing and construction industries for higher tax revenue would continue to struggle financially.
She’s describing Tucson to a tee. Now that we can no longer depend on Growth to fuel our local economy, our leaders seem to be at a loss for a Plan B.
So the press reports Al Qaeda has confirmed the death of Obama Bin Laden. For die hard conspiracists this can only mean one thing:
Barack Obama is a member of Al Qaeda, and had the full cooperation of that organization in faking Bin Laden’s death so Obama could be re-elected.
This ain’t fake. Graphic though.
http://www.reuters.com/subjects/bin-laden-compound - 26k -
OBL is nowhere in those photos. Don’t you think it’s odd that they are willing to release these photos, but no photos of the actual target? How can anybody not be annoyed by this?
Those weren’t released by the US. They were taken after the US had already left with OBL’s body.
Muslims are willing to release pictures of dead Muslims, but Americans should be afraid of inciting Muslims by releasing pictures of dead Muslims. Totally backwards. No body, no pictures, no nothing.
What’s that VGA cable doing in there next to the dead guy? I thought ISI’s stronghouse didn’t have internet. Were they using floppy disks and sneakernet?
ROTFLMAO!
They didn’t have a continuity director, and apparently the floor manager wasn’t too sharp. But you know how it is when you’re making an independent film on a tight budget.
Director: “Hey, that’s good enuf for our idiot audience. Cut and print. That’s a wrap!”
Hahahahaha…
You can also see a water pistol laying underneath one the bodies shoulders.
Osama:
Ahmed, do you hear that?
Ahmed:
Yea, sounds like a helicopter.
BANG! BANG! U.S. NAVY SEALS, OPEN UP!!!
Osama:
Quick, grab your supersoaker and let em have it! Allahu Akbar!
But seriously, does noone else find it odd that none of the bodies seem to have bullet holes? I would expect them to riddled with them. The blood coming from the ears and mouth suggest some kind of massive internal damage, like from a shockwave? I wouldn’t be surprised if the ISI staged those.
Our guys don’t “riddle”.
The Iraqis could tell who was doing a raid, just by listening.
Iraqi police or army = 15 minutes of AK-47 “spray and pray”
US forces = Single loud bang, then 6-12 shots.
X-GS:
One of the guys who did the raid said that OBL was killed within seconds of them entering the compound, and that he was sprayed with fire from a semi-automatic weapon.
We’ll just have to agree to disagree. Our illustrious Main Stream Media usually have trouble getting the facts straight the first time around. Better to get an inaccurate story our first, than an accurate story 24 hours later.
Our Special ops guys don’t “Spray/riddle” anything. They are trained to shoot two shots to the head. The second to make sure. If they were “spraying” fire, most of the people in the house would have been wounded, including some of the Special Ops guys.
sprayed with fire from a semi-automatic weapon
Semi-automatic weapons don’t “spray”.
Well, of course Al Qaeda would confirm it. Al Qaeda = Al CIA-duh.
You don’t have to be a conspiracist to know that, either. Just a little history on the conflict between the USSR and the US in Afghanistan as the Cold War was ending.
Russia and the US each developed and backed their own little coalition in that area back in the day, using religion and ethnicity to inflame passions and keep the people fighting the good fight. Were it not for Al CIA-duh, Muslim “extremism” or “radical Islam” would never have developed to the degree that it has.
But it has been a real boon for the shadow gubmint.
Also, if Al Quaeda wants to incite its own people to violence, this is the perfect excuse. Nobody would get worked up over the news that OBL died of natural cuases years ago. But a killing, well, THAT’S something to get excited about.
“if Al Quaeda wants to incite its own people to violence”
Yeah, da boyz at Foggy Bottom are getting all warmed up for the next act.
Feh, spit, patooie.
CIA, CIA!
Maybe OBL cia mission is over and now he is retiring in the carabean, shaving the beard and drinking margarita’s
Nah, he got his 40 virgins years ago.
Who are all on the same “cycle”….
Some might say HELL is living forever with 40 virgins.
“The U.S. economy added 244,000 jobs in April, much higher than expected. Unemployment rate rose to 9%.”
Refresh my memory, but didn’t McD. hire 62,000 part timers in one day? Did that count towards the 244,000?
Yep.
But don’t forget the 447,000 new jobless claims.
So that would make -297,000 jobs, er, created.
Did you also notice chocolate production was up 20%? (win a kepwie doll if you get the reference)
The household survey data (number of employed Americans including the self employed) has begun to once again diverge radically from the establishment survey (the number of wage and salary workers reported by business, governments and non-profits).
The establishment survey was up 244,000, but the household survey was down 190,000.
During the mid-2000s, the household survey went up a lot more than the establshment survey, as a soaring number of workers were “hired” as “independent contractors” or “freelancers” without benefits.
Later, the household survey showed the severity of the downturn earlier than the establishment survey, which was later rebenchmarked down.
So what does this mean?
“McDonald’s Corporation reveals that they hired 62,000 employees which is 24% more than initially planned. McDonald’s reports that it received more than 1 million applications during their employment event last month.
Why is this important? When the Labor Department publishes it’s employment report numbers for April we will know what percentage of jobs created were from McDonalds.”
244K - 62K = 182K …unless you really want to count McD. part-timers as jobs. They probably make less than they did when initially drawing unemployment. I have a firend in NC that is suffering through that. From a managment position making $50K to stocking shelfs in the grocery store at night making $9/hr.
Well, they are considered jobs and so do not explain the discrepency between the two measures of employment.
Unless for every person hired by McDonalds, two people stop reporting themselves to the BLS as being self-employed collecting bottles and cans.
“Well, they are considered jobs and so do not explain the discrepency between the two measures of employment.”
It also doesn’t explain why cars and houses aren’t selling, even though its painfully obvious to just about anyone.
“McDonald’s Corporation reveals that they hired 62,000 employees which is 24% more than initially planned. McDonald’s reports that it received more than 1 million applications during their employment event last month.
That would be about 16 applicants for every Mickey Dee’s job.
Is there a source for the household survey vs. the establishment survey over time? The comparison of survey-v-establishment from the 1995-1997 time period should serve as the gold standard indicator for the creation of REAL jobs.
http://www.bls.gov
Household survey: the unemployment rate is usually quoted, but you can get employment as well.
http://www.bls.gov/cps/
Establishment survey:
http://www.bls.gov/ces/
Overview of all the possible sources:
http://www.bls.gov/bls/employment.htm
Plus the Bureau of Economic Analysis and County Business Patters data from the Census Bureau, which is based on Social Security tax records.
P.S. 0 growth in construction jobs…again. Lost 2.2MM, gained back…0.
What does it mean. Well they couldn’t be lying could they?
And what about the 447,000 new jobless claims? Wouldn’t that make MINUS 297,000 jobs “created”?
The jobs number is net.
So, the new jobless claims for the month were around 1.7MM (+/-), at 400k +/- per week, and the new hires must have therefore been about 2 million in total over the month.
The jobs economy is quite dynamic. Lots of hiring, lots of firing. We all just hope the hiring exceeds the firing.
Thanks. I haven’t seen that explained. Not doubting you, just haven’t ever seen it said.
I really wish financial reporters would put things in better context.
I go to Wally World about twice a year, usually an act of desperation. Went there last night with my buddy. I thought it was bad the last time, this time it was like being in the middle of a surreal freak show. Night of the Living Dead or something like that. I’m not kidding. Had I been a little kid and my mother took me there, I would have started crying and blubbering with terror. I had no idea it was this bad.
I went last night and ended up leaving my goods. 2 or 3 cashiers open, huge huge long line waiting. The Walmart with black clientele is always like that. Given the money they make they could hire more cashiers. I’ll go to the white*mart today or tomorrow, there never are lines like that.
Does Walmart know they have a white*mart subbrand?
Not around here. All the food groups are represented. Slack-jawed, vacant-eyed, slope-shouldered, knuckle-dragging, mouth-breathing fattooed animated fire plugs. And their progeny.
I just hate the ones who won’t move over even one inch to allow a petite person to pass without being squished by their giant fatness on the way through.
They’ve been empowered.
“Does Walmart know they have a white*mart subbrand?”
We have one of each in our burg. The older one on the east side of town attracts the trailer trash and illegal alien crowd.
The one on the north side has a clientele that is a lot more genteel. It’s even noticeable in the parking lot just judging by the cars. The cars parked by the old one look much older are are full of dents and have bumperstickers like “Hit me, I need the money”, “Gun control is hitting the target”, “Show us the bith certificate”, “My son is a Marine” or something in Spanish (Radio Latina - La Unica).
Ours, apparently, is fully integrated. A veritable rainbow coalition of shoppers. Of course, the older retirees tend to stagger around with nervous smiles plastered all over their faces. You can almost hear them praying they’ll get to their car with their purchases and lives intact. “I’m a nice old man/lady. I’m old and weak. I contribute to a charity that provides food and money to you and I cootchie-coo your little babies whenever I see them and give them a lousy little stuffed animal or string of cheap Mardi-Gras beads. I allow the government to steal from my own children and grandchildren and redistribute the money to you. I’m on your side. Please, don’t hurt me.”
Oh, I thought you said “Show us the bitch certificate”. hahahah
“Oh, I thought you said “Show us the bitch certificate”. hahahah”
I thought that’s what a divorce certificate was
BA-DUMP-BA!
Every Wal Mart I’ve ever been in has 30 plus cash registers.
And only 5-6 of them open, no matter how long the lines are.
It’s hard to keep keep cashiers when they keep stealing or won’t show up for work.
The contrast is clear… Out in Glen Cove Long Island there is a wally and a target within 100 yards of each other… when you go to the wally you wonder “where is there a trailer park around here?”
“when you go to the wally you wonder “where is there a trailer park around here?”
Now that`s blatant Trailism.
You are obviously a Tracist.
I’ve only been to Walmart once, but the website peopleofwalmart is just about the most hysterical thing I have ever seen.
I surf that website in my Volvo while sipping lattes and listening to NPR.
I go to Wally World about twice a year, usually an act of desperation. Went there last night with my buddy. I thought it was bad the last time, this time it was like being in the middle of a surreal freak show. Night of the Living Dead or something like that
http://www.msnbc.msn.com/id/42615063/ns/business-eye_on_the_economy
“The U.S. fertility rate fell 4 percent from 2007 to 2009 — the biggest drop in more than 30 years, according to the federal Centers for Disease Control. Those years coincided with the worst recession in at least 30 years. The CDC cautions that there is not enough data to prove cause and effect, but independent researchers do see a trend.”
…
“One day, she found herself with just $35 or $40, grappling with the fact that she needed both baby food and groceries.
“I called my mom, crying, (saying) ‘I can’t feed my family,’ ” Herndon recalled.
Mom’s advice: “That’s what the dollar menu is for.” ”
Yeeeesh. Feeding your kids regularly from the fast food “dollar menu” probably isn’t a very good idea. Better to feed them rice & beans, but hey, what do I know?
$40 can still buy alot of food.
If you know who to cook and buy the basics.
Making baby food is easy.
ROME – U.S. Secretary of State Hillary Rodham Clinton warned Friday that global shortages of food and spiraling prices threaten widespread destabilization and is urging immediate action to forestall a repeat of the 2007 and 2008 crisis that led to riots in dozens of countries around the developing world.
Clinton told a meeting of the U.N.’s Food and Agriculture Organization that urgent steps are needed to hold down costs and boost agricultural production as food prices continue to rise.
Urgent enough to do away with ethanol and WS speculation????? I doubt it
The population bomb. On steroids.
Isn’t the race to the bottom an amazing thing? Starving, broke people are surrounded by mountains of food that they can’t afford to buy.
Even worse! They won’t just politely go somewhere and stave to death, either! How dare they!
The nerve!
ATHENS, Greece – Police clashed with protesting doctors in Greece and civil servants staged a 24-hour strike in Portugal on Friday to protest government cutbacks enacted in response to Europe’s financial crisis.
Riot police used pepper spray to disperse protesters outside the Health Ministry in central Athens during the brief clashes as doctors, ambulance drivers, and staff at public hospitals in greater Athens held a three-hour work stoppage.
Greece’s largest unions are planning a general strike on May 11. The government announced a new round of cuts last month, that include a euro15 billion ($22.22 billion) privatization program.
Too many doctors in this country think they are the elite but the reality is they are just highly paid gov workers.
“Police clashed with protesting doctors in Greece ”
What did the docs do? Throw syringes at the cops and shield themselves with bedpans?
Now that’s just too funny right there.
If I was a member of the pohleece, I’d be a little more considerate of the doctors. You never know when you might sustain a severe injury in the line of duty.
Police should not clash with doctors. Two guys walk into a hospital with severe injuries. One is a doctor, and the other is the local scum-bag cop that clashed with the doctor. Who gets treated first?
The cop. He also brought ten of his non-injuried buddies.
And they will, what, threaten to arrest the doctor if he doesn’t treat the cop?
When doctors start rioting, it’s bad. Real bad.
As we mark Osama bin Laden’s death, what’s striking is how much he cost our nation—and how little we’ve gained from our fight against him. By conservative estimates, bin Laden cost the United States at least $3 trillion
but just think of all the profits made and all the money skimmed.
“but just think of all the profits made and all the money skimmed.”
Well, that was the whole point, wasn’t it?
CIA! CIA!
Last reports that between Iraq and Afghanistan, there is $18 BILLION they can’t account for.
I’m sure it was those damn over-paid retired public service union janitors!
You know, I think you guys have worn out that janitor thing after 1000 comments…
Americans now spend 9% of their total income on gasoline:
http://money.cnn.com/2011/05/05/news/economy/gas_prices_income_spending/index.htm?section=money_topstories
(whistles).. that’s gonna leave a mark for sure.
I’d rather spend 10 or 20% of income on fuel than 60% on a rapidly depreciating house.
Realtors are like a dose of clap!!!
Those pickup trukz are hungry alligators.
Cowboy/cowgirl UP!
Athens Mulls Plans for New Currency
Greece Considers Exit from Euro Zone
REUTERS
A protest against austerity measures in Athens. Greece is considering leaving the euro zone, according to sources in the German government.
The debt crisis in Greece has taken on a dramatic new twist. Sources with information about the government’s actions have informed SPIEGEL ONLINE that Athens is considering withdrawing from the euro zone. The common currency area’s finance ministers and representatives of the European Commission are holding a secret crisis meeting in Luxembourg on Friday night.
Greece’s economic problems are massive, with protests against the government being held almost daily. Now Prime Minister George Papandreou apparently feels he has no other option: SPIEGEL ONLINE has obtained information from German government sources knowledgeable of the situation in Athens indicating that Papandreou’s government is considering abandoning the euro and reintroducing its own currency.
Alarmed by Athens’ intentions, the European Commission has called a crisis meeting in Luxembourg on Friday night. In addition to Greece’s possible exit from the currency union, a speedy restructuring of the country’s debt also features on the agenda. One year after the Greek crisis broke out, the development represents a potentially existential turning point for the European monetary union — regardless which variant is ultimately decided upon for dealing with Greece’s massive troubles.
So far Greece is denying plans to leave the EURO zone. If history is any guide, to date every EURO/debt rumor they denied turned out to be true a week later.
Maybe they just want to ratched up the pressure in order to squeeze more money out of other EU countries. So far that has always worked in their favor. Too many suckers that cave in at the first opportunity.
If you owe the bank $1 million the bank owns you. If you owe the bank $100 billion you own the bank.
Met with my financial advisor today. Anyone here have any insights on floating rate mutual funds? The paper held would be all short-term.
Google?
Since no one responded, I’ll give my $.02. The fact that no one on this board knows about these indicates its some esoteric stuff most likely designed to fleece you and make GS/JPM/etc richer. Plus rates suck now, unless you’re talking about the Greek 2 year - good luck with that. I’d bail on that advisor too.
DirectBuy closes abruptly
12:56 AM, May. 6, 2011 | coloradoan.com
The DirectBuy franchise at 2226 E. Harmony Road closed abruptly this week, though the company said all pending and current orders will be completed.
The franchise that charges members an annual fee, then allows them to make purchases at what it calls “insider” prices, stopped operating effective Wednesday.
Ian Struggles learned Monday the store from which he ordered $60,000 worth of merchandise for a home he is building in Red Feather Lakes was closing this week.
Struggles said he got most of his merchandise out of the Fort Collins warehouse but discovered DirectBuy had not paid for tile, carpet and wood flooring ordered and installed through Carpet Exchange in Fort Collins.
Struggles said he paid DirectBuy $17,136 on March 1 for the flooring and installation. DirectBuy paid only about $5,000 to Carpet Exchange, leaving a $12,000 balance.
“Now, the invoice is due and DirectBuy is not paying it,” Struggles said.
DirectBuy’s corporate office recommended Struggles work with his credit card company to reverse the payment to DirectBuy, Struggles said.
If Master Card rejects his claim, Struggles said DirectBuy corporate’s office has said it will make good on the payment.
But that could take months, he said. In the meantime, Carpet Exchange has threatened to put a lien on his home.
“I’m stuck in the middle with a lien coming on my head,” Struggles said.
To avoid the lien, Struggles said he was going to pay Carpet Exchange directly for the work - work he had already paid for through DirectBuy.
DirectBuy franchisees Roger and Patricia Klopfen-stein did not return phone calls seeking comment.
According to the Fort Collins sales tax office, Roger Klopfenstein is listed as president of RPK Direct LLC, doing business as Direct Buy of Northern Colorado. Patricia Klopfenstein is listed as treasurer.
Struggles said he talked with Roger Klopfenstein on Thursday, and Klopfenstein said he simply didn’t have the money to pay the bill.
“He’s a really nice guy. It’s sad that this has happened to them, but they shouldn’t be using other people’s money.”
I wish I has a dollar for every postcard ad I’ve received from DirectBuy over the years
In Fla., another bin Laden mansion sits empty
ST. PETERSBURG, Fla.(AP) – For sale: a five-bedroom, Mediterranean-style mansion with a red, barrel-tiled roof and arched doorways and windows. It even comes with some notoriety as it was once owned by one of Osama bin Laden’s brothers.
Khalil bin Laden, one of the terrorist mastermind’s 54 siblings, bought the home in 1980 for $1.6 million, but the wealthy businessman and his family fled their vacation spot under police escort shortly after 9/11, fearing they might be targeted because of the terrorist attacks. The 1920s-era mansion has sat empty ever since.
The home is in Oakland, Fla., a quiet small town about 20 miles west of Orlando. There’s a pool, horse stables and a four-car detached garage. It has fallen into a bit of disrepair due to vandals and humid Florida weather, but the real estate agent in charge of selling the property said it can easily be restored to its previous grandeur.
Asking price: $1,999,000.
Khalil bin Laden’s children used to run up and down the stairs, playing near the quiet lake in the back when the bin Laden name meant wealth and prestige. Then came Sept. 11, 2001.
Eventually, boards covered windows that overlooked the 1,200 feet of private lake shoreline.
In February 2006, at the height of Florida’s housing boom, Khalil bin Laden sold the property for $4 million, property records show, to a businessman who later went bankrupt and was sentenced to seven years in prison for fraud.
The home was eventually foreclosed on, said Autumn Norris-Makin, the Florida real estate agent who has been trying to sell the property for over a year. It was recently named by Forbes as one of the “creepiest abandoned mansions” in the U.S.
Norris-Makin said she’s had a lot of interest despite the asking price. One person was thinking about turning the property into a bed and breakfast.
“It’s an amazing property,” she said Wednesday. “But not a lot of people have that kind of money right now. It would sell in a second if everyone knew the economy would turn around.”
“Khalil bin Laden’s children used to run up and down the stairs, playing near the quiet lake in the back”
Ah, the pitter-patter of little feet.
Enough with the maudlin “human interest” already. Where’s my barf bag?
“It has fallen into a bit of disrepair “
Classic understatement. I would guess more than just a bit.
Oh I’m sure it’s just shabby genteel.
Not!
‘Home Alone’ House for Sale for $2.4M
May 06, 2011 | Associated Press
The 14-room brick house defended from intruders by a young Macaulay Culkin in the movie “Home Alone” is up for sale in suburban Chicago for $2.4 million.
Owners John and Cynthia Abendshien bought the red-brick Gregorian in 1988 for $875,000. They tell the Chicago Tribune that they know it’s not the best time to put a high-end home on the market, but that they hope the home’s notoriety will help.
The 4,250-square foot house sits on a half-acre lot in suburban Winnetka, about 20 miles north of Chicago. There are four bedrooms and it features the staircase that Culkin sledded down in the 1990 movie written by John Hughes.
Only pre-qualified buyers can make appointments to see the house, and no open houses are planned.
It never ceases to amaze me how owners of these types of homes didn’t feel any sense of urgency about ditching them after the market correction based on mortgage and housing issues. They really seemed to believe heart and soul that their market was coming back.
Just more evidence that there really are a LOT of wealthy, but stupid people.
More cake?
Bloomberg’s Budget: 6,000 NYC Teachers Axed
BY Celeste Katz
Mayor Bloomberg is sticking to his threat to get rid of 6,000 city teachers by next fall. He unveiled a $65.7 billion budget this morning that cuts another $233 million from city spending, on top of the firehouse closings, social service cuts and teacher layoffs he has demanded for months.
“It is a budget that is less than last year’s budget,” the mayor said. “It is not just less after inflation or less than the projected growth, but less money, total, period.”
Bloomberg blamed the state and federal governments for slashing their payments to the city, saying Albany pushed its bad budget decisions onto the people of the city.
“This thought that ‘Oh, the city has plenty of money, they can make up for anything’ is just not realistic,” the mayor said. “What is the benefit of being fiscally responsible if you save your money and they’re just going to cut you back?”
The mayor’s spending plan increases school spending by $2 billion to make up for state and federal losses, but still lays off 4,666 teachers and loses another 1,500 to attrition.
From the Editors of American Banker
Buyers to Sellers: Deals Will Flow When You Get Real
Call it a mismatch in expectations. Though analysts and investment bankers keep predicting that a wave of bank consolidation is coming, bankers themselves say that there won’t be much activity until sellers get real about their asking prices.
**********
I get the teaser e-mails but never did subscribe to this service. If anyone has access it’d be fun to catch the highlights on this one.
So how long does the HBB moderator’s purgatory last?
Has anyone successfully escaped?
Will I get a tee shirt?
My post below about the jobs discrepancy posted immedjitly. At the time of my post, only wOmbATz’s post about the Home Alone house was above it.
Forever. I’m in it too.
“Americans of the future will be slaves of the State.”
~Frank Chodorov, 1938
And the State will be owned by Wall St.
oh my…
Home price double dip now official, study contends
Boston Globe | May 6, 2011 | Scott Van Voorhis
Nationally, home prices have sunk below their previous low, set back during the recession in 2009, Clear Capital reports.
April home prices were .7 percent below levels last reached in March, 2009, the latest milestone in a now months-long slide in real estate values, the research firm notes.
Of course, the last time prices were headed south, in the aftermath of the global financial crisis in the fall of 2008, we saw a panicked Congress and real estate industry rush through the home buyer tax credit, which artificially buoyed sales and prices.
This time around, there’s no home buyer tax credit to bail things out and lots of downward momentum to keep prices falling in the coming months.
I’m having a hard time with something.
How does this news release from yesterday…
“Initial claims for unemployment benefits rose to 474,000, an increase of 43,000 from the previous week”
square with this one today?
“The U.S. economy added 244,000 jobs in April”
INITIAL claims for the WEEK went to 474,000 meaning, presumably, that 474k people had jobs last week and don’t this week. And yet the addition of 244k jobs last MONTH is heralded as great news?!
Roughly 2M - 244k = 1.756M jobs were lost in April. Do I have that right?
See? It’s not so bad when you look at it that way!
No, you don’t have it right.
The jobs numbers are net.
http://www.bls.gov
Look at the PDF of today’s report, and look at table B-1 (it’s among the sea of numbers).
April 2011 - 131,028k people employed
March 2011 - 130,784k people employed
The difference being the net new jobs.
If you want to understand the context of the amount of potential hiring out there, take a look at the JOLTS report (Job Openings and Labor Turnover Survey).
It shows new hires in the month of February at about 3.3 million new hires. March or April data is not out there. But it is worth noting that the lowest number I see on the entire 10 years of data is about 2.7 million.
The unemployment claims doesn’t even show all the people who lost their jobs.
If the numbers in April for new hires was close to February, about 3.3 million people found jobs, and about 3 million people lost their jobs.
Phew! Thanks R-dub. I was thinking that surely this would be a bigger story if 21M people were losing their jobs a year.
Again, thanks Rental. Good find and great links.
sfrenter,
Not sure if this helps at all, but the house you posted about yesterday is currently owned by what looks like two brothers. Looks like they bought it out of their father’s (or other family member’s) trust for $601k.
The loan history suggests that they had a $480k mortgage as of the sale date, and took out a $100k second in March, 2006.
Still listed in their names, so either they’re leaving it vacant or they may have walked and the lender has not started FC procedure. I’d check with the county. They’d know if their is a tax delinquency on the property, which might give clues about current status.
OBL has been dead for at least 10 years. This is an epic scam and shows the desperation of the media and the government to foist yet another scam on the American people and the world. One problem. We now know about Al-Qaeda and how it was manufactured by the CIA. We all know about Tim Osman aka OBL and 911 and the illegal wars it has fomented. This pathetic attempt to distract us from the encroaching police state, the genocide unfolding in Libya and the dollar sliding into oblivion is so obvious to me..
Well, that’s what I said, in a nutshell. Along with Paul Craig Roberts’ article demonstrating the illogic of the whole phantasm. And, LMAO, if NBC didn’t have a “news” story tonight about the various “medications” “discovered” at Osman’s lair. Bellowing Brian Williams went out of his way to point out that they found nothing for kidneys, not even so much as a potassium tablet! Gasp! Well, looks like the intel about Osman’s “kidney disease” and dialysis must have been wrong. Of course, NBC being a govmint mouthpiece, why does this not surprise me?
1) Tablet
2) Ulcer Capsule
3) Tab/Cap Gabapentine
4) Penza drops
5.) Natrilix (a no-no for someone with kidney disease)
6.) Grucid
7.) Avena syrup
8.) NIFIM, an antibiotic
9.) Syp, Tixylax , its use generally for children for chest problems
10.) Brufen syp
11.) Dettole, an antiseptic
The media can’t projectile vomit this swill fast enuf.
http://market-ticker.org/akcs-www?post=185590
How a non-Republicrat could win the 2012 elections.
And the taxpayers back up with their pants down begging…Please sir may I have some more!
WASHINGTON (Reuters) - Mortgage finance giant Fannie Mae on Friday said it would ask for an additional $8.5 billion from taxpayers as it continues to suffer losses on loans made prior to 2009.
The largest U.S. residential mortgage funds provider reported a net loss attributable to common shareholders of $8.7 billion, or $1.52 per diluted share, in the first quarter.
Including the latest request, the firm has taken about $100 billion from the U.S. government since it was seized in 2008, though it has also paid about $12.4 billion to taxpayers in interest.
Loans made in the past two years have been more profitable than loans made during the housing boom in preceding years.
“As we move forward, we are building a strong new book of business that now accounts for 45 percent of the company’s overall single-family guaranty book of business,” said Michael Williams, the firm’s president and chief executive officer.
Sibling firm Freddie Mac said on Wednesday it lost just under a billion dollars in the first three months of the year, though the second-largest provider of mortgage funds did not request any new money from the government.
The two firms together have asked for about $164 billion, though their net payments have been reduced to about $140 billion as a result of the interest payments, including the latest request.
Then-U.S. Treasury Secretary Henry Paulson took control of Freddie Mac and Fannie Mae at the height of the financial crisis in September 2008 as losses mounted from mortgages gone bad.
The plan to put them into conservatorship was meant to be temporary, although it is likely to be years before a long-term replacement structure takes shape.
The two firms and the Federal Housing Administration back close to nine of 10 new home loans after private mortgage funding dried up in the wake of the financial crisis.