Bits Bucket for June 13, 2011
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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Nothing blantant here: The Prez is going to Wall Street for the same reason Willy Sutton went to banks:
“Obama Seeks To Win Back Wall St. Cash”
http://www.nytimes.com/2011/06/13/us/politics/13donor.html?_r=1&ref=todayspaper
Barry’s arrogant, but he’s not stupid. He knows what he has to do,if he wants to stay in the game.
If people would ignore the darn TV ads, this would not be needed. Basic communication of positions doesn’t require that much money.
Come on, America. You can ignore the ads. That is what the mute button is for!
“Come on, America. You can ignore the ads.”
Dream on. Without the ads the average American would be forced to do his own thinking.
A new and shocking experience for many.
Except the ads on this site, of course. Click away on those and send a bit of dinero Ben’s way.
Except the ads on this site, of course. Click away on those and send a bit of dinero Ben’s way.
Be careful with that. I moused over one last week and got a nasty trojan on my system. Didn’t even click to open the ad either. During his three-hour repair session at my computer, my techie loaded an ad blocker, and it seems to be working quite well.
And, while we’re on this computer-baddies topic, beware of downloading images from the Google image search. Some of them harbor executable files that can harm your computer. That happened to me a few weeks ago.
“Barry’s arrogant, but he’s not stupid. He knows what he has to do,if he wants to stay in the game.”
Americans are eager to see long prison sentences meted to the suit-n-tie financial swindlers.
Not going to happen on this hack’s watch. He’s begging favors from the very people who took the country to it’s knees.
+1 , definitely not stupid. I was surprised he was manipulated so easily. He gave into Walls St and big Insurance.
“Gave in” to Wall Street? They owned him from the start. Did you really think George Soros and Goldman Sachs (his main financial backers) would promote a candidate who WASN’T going to serve their interests?
“The event, organized by the Democratic National Committee, kicked off an aggressive push by Mr. Obama to win back the allegiance of one of his most vital sources of campaign cash — in part by trying to convince Wall Street that his policies, far from undercutting the investor class, have helped bring banks and financial markets back to health.”
It doesn’t matter if the policies Obama enacted helped the rich while leaving the rest mired in recession.
From the point of view of the rich, the difference between their wealth and power and the power of everyone else has been unfairly low, and they need more help.
“From the point of view of the rich, the difference between their wealth and power and the power of everyone else has been unfairly low, and they need more help.”
On the other hand, from the point of view of the middle class, the difference between their wealth and power and the power of everyone else has been unfairly low, and they need more help.
And from the point of view of the poor, the difference between their wealth and power and the power of everyone else has been unfairly low, and they need more help.
Brilliant. So pick which group(s) can do the most for you and cater to them at the expense of the rest.
That’s politics in a nut-shell.
http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00009638
Obama’s top campaign contributors. It reads like a who’s who of financial predators and corporate cartels, most of whom benefited handsomely from Obama’s transfer of their gambling debts and speculative swindles onto the US taxpayer.
I found it repulsive that one of the key claims of the Obama campaign in the last election was that they ONLY took money from individuals and small companies and then $20 at a time in what was described as a “grass roots” campaign. My good friend totally bought into this and still believes it no matter what evidence to the contrary I attempt to present.
Wasn’t Goldman Sachs one of his top campaign contributors?
Az Slim
IIRC that is true. I looked up both him and McSame’s campaign contributors and found both had been bought from the same core banks, investment houses, etc…, with a few interest groups favoring each. Yep, the Prez is just a puppet, imho.
puppet=regardless of party
I think you confused him with Ralph Nader.
http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00009638
Here’s who Obama is beholden to. Hint: it ain’t the mental defectives in flyover country who fell for hope ‘n change.
Here you go again. Why do you persist in spouting that everyone who voted for Obama “fell for hope ‘n change”? Or that such voters are mental defectives? There are lots of posters here who are not mental defectives that voted for Obama for various reasons. There are also lots of them in the rest of America.
Large corporations generally contribute to both major political parties, unless one of them strongly disfavors their industry. Unions would do the same if they thought that they could get a fair shake from Republicans.
H2H, you are right. However, there is an understandable outrage at the clear and obvious conflict of interest, or likely unpatriotic selfish interest, in candidates taking monies from the very entities that are raping America, whilst they claim to be the hero of the common man.
Obama is a lot longer finding his voice than Kennedy was, by far. He’d garner a lot of support if he turned Maverick. Some of us don’t think he has the grit.
What a cockroach Obama has turned out to be. Obama, “YOU’RE FIRED!!
Chance of Another Round of Easing by Year-End: Roubini
By: Li Anne Wong ~ CNBC.com
There is a chance the U.S. Federal Reserve could unleash another round of quantitative easing by the end of the year, according to renowned economist Nouriel Roubini.
In an interview with CNBC on Saturday, the head of Roubini Global Economics said the probability of QE3 will become “significantly higher” if U.S. economic weakness persists and the stock markets correct 10 percent or more.
“Especially because we cannot do another round of fiscal stimulus, the pressure is going to be on the only policy that is available, [that] is another round of quantitative easing,” he said.
Roubini, who correctly predicted the financial crisis that began in 2008, is especially concerned about the myriad problems the U.S. economy currently faces.
“You have the problems of rising oil prices, of [a] weak labor market, of housing double dipping, the fiscal problem in the state and local government, the facts of the federal deficit problem,” he said. “All these things imply that economic weakness could persist in the second half of the year.”
Roubini believes the current slowdown in global growth is not “just a soft patch,” and the biggest risk to the financial markets comes from the troubled euro zone economies.
“They’re still in risk and they’ve not been resolved and [will] eventually require debt restructuring.”
The Fed will do their best to maximize the Shock and Awe effect, by pretending that QE is done for good at the end of June, but I generally agree with Roubini; QE3 is in the bag, except the timing is subject to question, including the option to never roll it out if the recovery gains force without it.
Do you actually think that merely printing money will make the recovery “gain force”?
Central bankers from John Law to Gideon Gono have tried this numerous times through history and so far it has never worked. Quite the opposite, in fact.
Relax, they’re just foolin with you. Got to print money to give to the banks as fast as they lose it. They are not giving it to us to spend.
It certainly doesn’t work when most of it is handed to the rich or wasted on wars. It would have a much better effect if it was spent on our crumbling infrastructure and creating jobs.
I wonder why Canusa gives the use of it’s military to bannana republics without cost.
If someone wants help, except during weather emergencies, I think Canusa should charge for it’s services.
It is frustrating to see Canada and the USA have to pay local governments hugely for foreign bases - - to protect the locals.
To be fair to Gono, the Zimbabwe stock market has out performed every other stock market.
No; merely suggesting that they will go for QE3 if it is politically supported, which I expect will be the case.
You only have to go as far as corporate balance sheets to see that it’s not working. Forget interest rates, let’s talk confidence. There is so little confidence that companies are hoarding cash–pumping more money into the economy won’t change this.
Passing real entitlement reform and deficit reduction will. The fear of a bond market rebellion against US Treasuries is the big fear out there. Lessen that fear, and investment will increase, as will job creation.
I wish Roubini would have added in that QE3 won’t provide any benefit to the economy. The new money could potentially generate real economic activity, but most likely it will push up the prices of existing goods/services. With all the economic uncertainty caused by excessive debt levels, distortions from QEs 1&2, zombie banks and trust-killing actions by almost everyone in some form of position of power, there’s no reason to risk creating real economic activity.
Like there’s any doubt this will happen (QE3). Our “trading partners” will complain as it will further devalue any treasuries they have, but what choice do they have but to go along if they want us to continue running our 800 billion annual trade deficits?
And the thing is if China hiccups there will be repercussions around the world. They’ll keep piling onto the house of cards until it comes crashing down.
“…it will further devalue any treasuries they have…”
Even if QE3 proceeds are used to keep a lid on interest rates, through buying Treasurys?
I don’t understand.
Dr Ben
I’ve been feeling fat.
First I loosened my belt. That felt good for a few minutes then again I started feeling fat.
Then I took off my pant buttons. Felt ok few minutes after which like before I again felt fat.
Do you think if I took off my clothes I won’t feel fat anymore?
Thank you doctor.
Joe Schmoe
Dear Joe:
Get bigger pants, with an elastic waist band if possible.
Dr. B Bernanke
I think I need new glasses. I first read it as another round of eating.
heh.
Who would you choose to smash the champagne bottle on the bow of QEIII when it’s launched? Although traditionally the role is given to a woman, your pick can be either gender, and it’s not limited to one person.
Kate Middleton.
That way the Tabloids of London can report
“Kate smashes bottle on QE’s head”
I saw the QE at dock in NYC as a tadpole. Relatives came over on it for a vacation. The QEII ran for 40 years after that. I’ve haven’t seen the QM2, now Cunard’s flagship. It seems to me there have been enough QEs and the Fed should have a QM, just to keep things civilized.
Plus we might get newer pics of Pippa’s stern…..
The NY Times is now in the humor business:
“Debt Collectors Ask to Be Paid A little Respect”
http://www.nytimes.com/2011/06/13/business/13collect.html?_r=1&ref=todayspaper#
Imbedded deep within this article is this gem:
“We can’t help consumers with their financial problems if we can’t get ahold of them.”
Lol.
“… help consumers with THEIR financial problems …?”
Is this what debt collectors are all about? Sure had me fooled.
I do think there is some quality mgt. stuff happening in that business. It’s the whole bee/vinegar/nectar thing… I’m surprised that surprises you.
Nice Matters. Cash matters.
“I’m surprised that surprises you.”
Lol, acutally it didn’t, which is not unusual because nothing suprises me anymore.
Bring on another day and all the laughs that go with it.
You get ahold of his legs. I’ll help at the other end.
“You get ahold of his legs. I’ll help at the other end.”
http://www.youtube.com/watch?v=O8OY1N_b7qY
Debt collectors can be some unsavory individuals, but they weren’t the ones who went out and took on debt they couldn’t afford.
In reading the comments, many folks are being harassed for debts they did not incur. They may have the same name as someone who did take on debt or they may have a relatively recent (some as long ago as 5 years) new phone number. Some of them have paid off their debts and are still being harassed.
Avoid the next bursting investment bubble
By Sheyna Steiner • Bankrate.com
Sign No. 4: political manipulation
Another characteristic of past bubbles is the heavy hand of the government reaching in to stir up the free market pot with regulations and price manipulation, according to Mansharamani.
When questioning the presence of an asset class bubble, he suggests investors consider politics.
“Are we seeing the government distort behavior because of tax policies, incentives, ceilings, price floors or subsidies of any sort? And, are we getting moral hazard in the sense that they will protect you if you are failing?” says Mansharamani.
http://www.bankrate.com/finance/investing/avoid-the-next-bursting-asset-class-bubble-1.aspx - 65k -
Realtors Are Liars
Abolish the FED.
What then?
Debt free money issued by the government, and ONLY the government. Don’t buy the canard that the government is incapable of doing so. It got that way by being messed with by the banksters, foreign interests, etc. There are decent people in government, but they have a hard time. Brooksley Born, anyone? It’s up to us to see that such people are protected and allowed to do their jobs.
What then?
The decline of the dollar (at least from the inflationary pressure of printing new ones) will be halted.
One of the things most do not seem to understand is the idea that inflation has already occurred, in the form of loans based on money loaned into existence over the past 20 years.
Without inflation these loans become gifts rather than loans and are thus inflationary even if we do nothing.
The choice is simple - inflate or default - soft default or hard default!
I really believe no one has given much thought to what happens when tens of millions of Americans crowd our bankruptcy courts seeking protection and tens of millions more find them selves out of work and unable to pay their mortgage. Worse tax revenues will continue to fall, business values will drop and pension funds already stretched drum tight will deplete leaving yet another sector of Americans facing bankruptcy and so it will go in a world of deflation. A world where each year makes the last look like the good old days.
I really doubt deflation is preferable to inflation, but we need to choose one and right now it appears that by failing to choose deflation appears to be the winner.
What we don’t get is the luxury of neither. There is simply too much debt to be worked through. Trillions of dollars of debt which IMO should never have existed in the first place, but which must be addressed.
fractional reserve lending vs printing, hmmm
obviously printing is inflationary, the fed lies about this like printing isn’t inflation by definition.
i clearly see the danger of fractional reserve lending but i’m not sure that all of the money loaned over the last 20 years is inflationary due to repayment of loans (either by the borrower or by a lender taking the loss and maintaining their reserve requirements. isn’t there, or shouldn’t there be a balance? when a loan i made money is created, when the loan is repaid the money ceases to exist.
inflation or deflation, why not accept the 97% loss of the dollars value, stop printing and maintain the currency’s value by ending the fed?
If you view the economy as a giant Ponzi scheme, what does happen if the printing presses are ever stopped?
if the economy is a ponzi scheme it will collapse as the required new investors run out. much like the housing bubble, the strawberry picker buying the mcmansion was the evidence that there were precious few new investors left.
fractional reserve lending, if the loans are paid back isn’t a ponzi scheme, but it is subject to abuse.
inflating the currency thru printing creates no new wealth but it does re-distribute the wealth, if we stop the presses we stop this redistribution.
More and more the loans are not being paid back. There was more money loaned out than exists or will exist, particularly in a deflation situation as we have now. The loans cannot be repaid without new borrowed or printed money. Since not enough consumers are qualified or want to be qualified to borrow and keep the party moving along I doubt this remains an option.
Today we are in the denial phase. Not sure how long it will take to get to the next level, but I doubt it will be much longer than 2 years.
+1. Until more than 5% of the population wake up to the consequences of giving free rein to the Federal Reserve-Wall Street looting syndicate, our financial system is going to be riddled with systemic fraud, with the perps knowing their Republicrat henchmen will allow them to operate with impunity.
British Columbia is so lucky. First they had the Olympics to prevent their bubble from deflating. Now they might have the Stanley Cup to do the same. I wonder what will come along to cover them in 2012.
Boomers
The Chinese, of course. Haven’t you heard? They are “snapping up” deals everywhere. Paying cash too!
(sarcasm off)
This could be the year the Expos finally go all the way.
Kim must have seen the same WSJ article I saw. Yep, “snapping them up” is the correct term. But it’s different there, because Vancouver “is working off of a totally new economic model than any of us have ever experienced in the past.”
If you mean the Montreal Expos baseball, they became the Washington Nationals years ago. And doing about as well. (oh but check out the $650M “green” stadium!!!)
And Fedex Field (home of the Redskins) is demolishing seats to buid “party decks.”
Profits Seen Increasing Jobs as Earnings Grow Most Since 1940s
(Source: Bloomberg)
Profits at American companies are poised to be one of the few bright spots in the U.S., helping to steady the faltering recovery.
Earnings will climb an average 10 percent a year through 2013, more than three times quicker than the economy, after what has already been the fastest rebound since the late 1940s, JPMorgan Chase & Co. projects. In mounting signs of confidence, Macy’s Inc. (M) has raised its annual profit forecast, Intel Corp. (INTC) and Target Corp. (TGT) increased dividends and DuPont Co. plans to invest more than $500 million to boost production.
Surging overseas sales, improving U.S. demand and the Federal Reserve’s pledge to keep interest rates close to zero for an extended period bode well for earnings, said Robert Mellman, an economist at JPMorgan who has tracked corporate profits since 1985 and published a special report May 20 on the subject. Widening margins will give businesses the means and incentive to invest and hire, paving the way for accelerating growth in the world’s largest economy, he predicted.
“Corporate profits have plenty of room to run,” as “returns on investing and expanding are high,” Mellman said in a June 10 interview from New York. “This makes companies want to grow the business. As profitability remains strong, they’ll increase hiring.”
The recent spate of weak economic data, capped by news that payrolls grew in May at the slowest pace in eight months, has sparked concern about the expansion’s sustainability. Even so, JPMorgan projects growth will pick up in the second half as higher energy costs and supply-chain disruptions subside. The economy will return to a 3 percent growth rate in the third and fourth quarters, with profit gains accelerating to 10 percent, Mellman said.
I’ll have what he’s drinking.
Is there a simple kernel in all of this giberish? Forget about DuPont’s Titanium play (I bet that will be off the table before it starts), what does it mean that corporations are booking more profits? Profits are easily manipulated. By that I mean a corporation can reinvest its revenue or sit on it and let it be taxed as profit. In a growth atmosphere, reinvestment and hiring and expansion are the rule. So why sit on the cash?
It is illogical to conclude that companies are going to hire like crazy because they are going to have all this “profit”. If they thought hiring was smart, they’d be doing it and not book taxable “profits” now. So why are they siting on their cash?
If they can keep increasing profits (as Wall Street demands) without hiring, they will have to see a great big upside in taking on more employees as they are expensive. That will require that they are able to see increased demand.
Where will that demand come from?
From the US consumer? Well, a lot of them are still out of work and not getting raises. Unless demand for your product is very inelastic, I wouldn’t count on him.
From other US businesses? Maybe, but that business is doing the same demand analysis that you are. Kind of like a game of chicken.
From exports? Again, maybe, but you have to compete with a lot of people who have a lower standard of living than even poor Americans. If the US dollar collapses a bit, that would make your product more competative, but China has been fairly skilled at keeping the yuan low and they have plenty of money with which to do it. Besides, why do you have to hire Americans for the export market anyway?
So exactly why are jobs about to take off?
Hi Polly:
Would it be so bad if we made Equal opportunity laws to include “interns”?
Then no one can say I am “overqualified” or face legal liability.
I see the biggest problem today is with people being out of work for years, skills get rusty and tech & software gets upgraded but most don’t have the $$$ to go back to school or too scared to take on student loans. And they did cut back on job training grants They ran out of money here in Feb. maybe they will have more $$ in July.
Also change unemployment to 26 weeks you can be lazy but on the 27th week if you are not in school or an Interns job you get cut off.
Telling someone you are overqualified when you are unemployed and have no rent money is really nasty and hurtful.
When I think about it, I bet what “overqualified” really means is “while you are plenty qualified by the standards of our written job description, you are deficient in one or more of the unwritten areas that we will not discuss or acknowledge because they are illegal and/or not discussed in public”.
There is no current EEO protection for being over qualified, whether you are an intern or not. EEO is for illegal discrimination, not people deciding that they don’t want a PhD engineer to run a coffee machine. Letting businesses decide who they want to hire (absent illegal reasons) is part of a free market economy.
Also, if you read the law carefully, you can’t collect unemployment if you are interning because you are not free to take a full time job - you are interning. In addition, you can’t collect unemployment unless you are actively looking for work, so your whole lazy bum thing doesn’t really hold water. Actively looking for work takes up at least as much time as actally working full time. Of course, all the unemployment offices fired the staff they needed to confirm that people are really looking, but that is another issue.
You might stop looking for intern positions and try volunteering. No one ever told me I was overqualified for volunteering at WNYC. You aren’t going to get to run the sound board that way, but you will be with people who do. I was essentially acting as a segment producer when I was there. It was great experience.
Over qualified generally means “too old” nowa days.
Over qualified used to also mean made way more money at a previous job.
That’s all true, but I think DJ’s pursuit of internships may have found some new ones.
A big factor these days in age discrimination is health insurance rates are much higher for over 50 than under 40.
This is another argument for splitting health insurance from employment.
“Overqualified” means I don’t want to hire you because you are sure to jump ship the instant a better position opens up more fitting for your skills.
Employee turnover is expensive.
McDonald’s would rather hire a high school dropout to flip burgers than a certified welder, even though the welder may be a better employee.
“In addition, you can’t collect unemployment unless you are actively looking for work,”
I’m not so sure about that anymore. The step just took 6 months worth and didn’t go jobhunting at all. The govt probably reduced the old “3 apps a week” thing to just checking a box online saying you’re actively seeking work.
Yes, all you have to do is check a box, but I’m fairly sure that they can call you in to prove it. They just don’t have enough employees to do it. So it is a legal requirement. It just isn’t enforced.
It seems contradictory to me to complain about people collecting unemployment and also complain about unpaid internships at the same time.
Companies can get people to accept unpaid internships because there are so few entry level jobs available to entry level people. The entry level jobs are now being filled by people with at least a little experience, either paid or unpaid.
Kicking people off unemployment increases desperation. More experienced people will then compete with the less experienced for the entry level jobs. The less experienced then compete with the inexperienced for the internships. It increases the wage deflation spiral.
Yes and that needs to be changed…..keeping a job in your field at the top of your resume is of prime importance today
———————-
Also, if you read the law carefully, you can’t collect unemployment if you are interning because you are not free to take a full time job - you are interning
Polly, you left out some avenues:
1. increased debt can make more money available to prop up profits
2. US is actually rather competitive, believe it or not, in some fields so export is still viable
3. US companies can still increase overseas profits without exports - how? through local (foreign) manufacturing/partnerships.
The scary thing to watch for is more and more profitable companies being gobbled up by private equity. That way you, the average stockholding American, get cut out of the equation.
Scarier still is what happens after privatization - “restructuring”, “cost cutting” (mass layoffs) etc after which the dressed turkey is presented back to you via IPO. You make 10% over 5 years, the private equity company makes 100% over 5 years, averaging an 8% return per year combined. Rinse, repeat…
Borrowing does not increase profits unless you do something with the money and then sell that to a customer for more than your input costs. Borrowing puts money on one side of the balance sheet and a debt on the other. It isn’t booked as a profit.
Borrowing by customers, and the government (in its role as a customer), Polly.
We are in the debt destruction part of the cycle now. Don’t expect a lot of help there.
Interest rates down by 50% ; profits ups 10% - Hmmmm
“Stock market surges - - on 40% less volume” - Hmmmm
From my seat in Canada manufacturing volumes are decent but their margins suck - -
Yet it is not just housing that Canadians are buying in the USA - we are also heavily buying up US production facilities to complement our own and our USA market.
This has been forced on us because of Kate’s QE bottles being smashed on our bows driving up our dollar and drying up our tradtional way of selling into the USA.
However, about half of our exports are energy - priced in depreciated Yankee bucks - so I guess we are just giving you your money back - as we buy up your country.
Better us than others.
“Profits Seen Increasing Jobs”
In China.
“Profits Seen Increasing Jobs In China”
Fixed.
The future is out of our hands. What happens to our recovery depends on what happens elsewhere.
LOL! We had the same thought.
Police use tear gas to quell riot in southern China
By James Pomfret
Mon Jun 13, 7:54 am ET
ZENGCHENG, China (Reuters) – Riot police poured into a southern Chinese factory town crowded with migrant workers on Monday, a day after militia fired tear gas to quell rioting over the abuse of a pregnant street hawker who became a symbol of simmering grassroots discontent.
http://news.yahoo.com/s/nm/20110613/wl_nm/us_china_labour_unrest/print
Well, that’s what happens when you economic policy is to impoverish your own population in order to improverish the United States.
Kind of like launching a war of attrition. I guess we should be happy they’re doing it peacefully.
Why would they hire when profits are increasing already WITHOUT the labor costs?
Rhetorical question. Of course they aren’t going to hire. They had record profits last year as well. Did unemployment go down?
Welcome to the “Not a Depression, Recession.”
More than 400 layoff notices sent to Gary teachers
GARY, Ind. (AP) - Layoff notices that have been sent to more than 400 Gary teachers could leave even veteran teachers without classrooms this fall as the city’s school district struggles with a $14 million shortfall this year that’s expected to more than double next year.
Up to a third of the district’s educators could find themselves without jobs this fall as the district tries to save $23 million over the next two years, the Post-Tribune reported.
Gary Teachers Union president Carlos Tolliver said the board and union officials hope to agree on the number of teachers needed for next year by July 1.
Reduction-in-force notices go out each spring to more teachers than will actually be laid off. By late summer, teachers with the most seniority are brought back.
But the sheer number of notices this year, combined with the district’s budget crisis, is prompting even veteran teachers to begin clearing out their classrooms as the school board
Tracey Montgomery, who has taught for 20 years, worries that her experience will count against her if she is laid off and tries to find another teaching job elsewhere.
“I’m just overwhelmed,” Montgomery said. “Who is going to hire a teacher with my level of experience when they can get two starting teachers for the same price?”
“Tracey Montgomery, who has taught for 20 years, worries that her experience will count against her if she is laid off and tries to find another teaching job elsewhere.”
It will. You can thank the TEA Party’s anti labor policies for this. Education is one arena where ageism is fierce and getting worse. Our district is adopting a policy that will prevent credit for years of service. Tracey can move to FL and start over at $36k.
Freeeeeedddooooooommm!
“You can thank the TEA Party’s anti labor policies for this”
Conversations from the Teacher’s Lounge are so hard to understand for outsiders. Weren’t the rules that give teachers higher pay for every year of service fought for over decades by the teachers themselves?
“Our district is adopting a policy that will prevent credit for years of service”
Do you mean that your district is fighting against the TEA party or has fallen into its grasp?
“Weren’t the rules that give teachers higher pay for every year of service fought for over decades by the teachers themselves?”
I don’t know the history of the pay scale. I should learn that.
“Do you mean that your district is fighting against the TEA party or has fallen into its grasp?”
They are using TEA rhetoric to justify a few new policies since they were unprepared for the current Great Unpleasantness.
Hey Tracey
Let use a different standard:
How many of your present and former students have a criminal record? Do you think they got their moneys worth from your teachings?
The only difference between a good school and a failing school is:
The good school forces you to learn how to read,write and speak ENGLISH.
will some tell that to the peeps in gary?
Find me a school that is predominantly middle and/or upper class that is failing.
I dare you.
The only difference between a good school and a failing school is:
The only difference between a good school and a failing school is:
in most cases, it’s the socio-economic background of the students.
Find me a FAILING school filled with predominantly middle and upper class kids. They do not exist.
Oh, but it’s the teacher’s fault…
Never mind.
I disagree SF failing schools DO NOT teach English its all the ghetto hip hop craapp, being poor is secondary
Explain to me how “good teachers” can fix this problem:
Regardless of other activities, the best predictor of summer loss or summer gain is whether or not a child reads during the summer. And the best predictor of whether a child reads is whether or not he or she owns books. While economically-advantaged kids often have their own bedroom libraries, poor kids usually depend heavily on schools for books to read.
Understandably, summer reading loss or “summer setback” is a bigger problem for children from low-income families. Their reading achievement typically declines an average of three months between June and September, while that of typical middle-class students improves or remains the same. This means that a summer reading loss of three months accumulates to a crucial two-year gap by the time kids are in middle school, even if their schools are equally effective. It suggests that focusing all of our efforts on improving the schools isn’t going to work.
This particular phenomenon has been researched and documented endlessly (I did my graduate thesis on it, BTW).
I can give you many many other studies that clearly show that poverty is the problem (beginning with prenatal care, early childhood/preschool experiences, vocabulary development, nutrition, and on and on)
While economically-advantaged kids often have their own bedroom libraries, poor kids usually depend heavily on schools for books to read.
What about public libraries. At my favorite branch, I see more than a few families, who, shall we say, are a bit economically challenged.
I’ve seen some of them engaged in team borrowing. As in, there’s a 25-book limit per person. So, the parents get library cards for each of the kids, and they go up to the checkout together.
Case in point. I recently saw one mom and two kids check out 75 books for just that week. (All three were real reading junkies.) Compared to that not-so-well-off threesome, I feel like a real biblio-slacker.
aNYCdj, when was the last time you set foot in a public school?
I would venture to guess that even the best students who learn formal English in school still speak like their neighbors outside of school. “Needs washed” is a common Pittsburgh colloquialism, used by even educated natives.
I think you let your hatred of hip-hop cloud your perceptions.
“Needs washed” is a common Pittsburgh colloquialism, used by even educated natives.
Not to mention “needs fixed.”Which applies to anything that’s broken.
I knew you would appreciate the Pittsbughism, Arizona Slim!
Regarding libraries, some cities (cough, Camden, cough!) are closing them, a great tragedy in my mind.
Happy You made my point exactly…..the failing schools just don’t teach the first part… Proper English
How about we let prisoners out early if they can read the New York Times in front of a parole board…..what is the chance of that happening?
————-
I would venture to guess that even the best students who learn formal English in school still speak like their neighbors outside of school
Unless she’s worth two starting teachers it sounds like she’s pricing herself out of the market. I’m open to the idea that it’s actually the starting teachers that are underpaid, but I’m skeptical that she’s worth two of them. I deal with the same thing in my job…if I’m gonna be paid twice as much as a new grad I need to make the company twice as much money. Some days I can, but some days I can’t.
Schools are not businesses. There is also a huge amount of waste and incompetence at the admin level.
And yes, experience and age are heavily discriminated against these days. Don’t think it can’t happen to you.
That 72 million people who make $500 a week of less aren’t all 20 yos.
Schools are not businesses.
That’s true. But I’m not sure what that proves. I’m still skeptical that she’s worth two new-grads. For me the only question is whether she should be satisfied with less, or whether new grads should make more.
And yes, experience and age are heavily discriminated against these days. Don’t think it can’t happen to you.
I fully expect it to…I couldn’t tell for sure if it was starting to happen already on my recent job hunt. On the next one I expect I will be able to tell for sure.
Don’t get me wrong. I didn’t mean you, personally. I wish us all luck in these times.
“I’m just overwhelmed,” Montgomery said. “Who is going to hire a teacher with my level of experience when they can get two starting teachers for the same price?”
Plus gold plated benefits, insane pensions, summers off, tenure…
Prediction.
Tracey Montgomery is going to discover the “tea party” after six months in her new private sector job.
You know Banana Boy, not every school district is in New York, Illinois or California.
My sister teaches in a non-union district. She doesn’t get a pension (just a 401K with a lame match) and is paid 40K after 15 years of experience. And guess what? Their district is also broke, even though there are no “union goons” with “gold plated benefits” and they too are facing mass layoffs.
Same story in my town. Teachers are low paid here too (they start at 32K) and mass layoffs are in the wings.
Texas teachers don’t pay into Social Security, so I guess that makes them Tea Party darlings.
Eventually the schools will be paying for administrators and retirees only.
They’ll have the kids get their instruction off of youtube (what’s that guy’s name who posts classes on youtube?)
That guy is named Salman Khan. His YouTube site is called the Khan Academy.
Truth be told, I wasn’t that impressed with the production values. But, if you need a quick brusher-upper on some concepts of calculus, it probably works just fine.
& closed schools property maintenance.
This works out to 35k per teacher. As some would say “those highly paid teachers”. Perhaps in Gary 35k is enough to raise a family and own a modest house!
35K?! Damn union goons! That’s a lavish salary!
Why, I’ll bet they even get a high deductible health insurance plan as part of their “gold plated” benefits.
My son is considering being a high school teacher, but is reconsidering his choice because of the very low pay and job insecurity. He might do it anyway as he feels it’s his calling in life, I just hope there are openings when he graduates.
World Stock Markets Down Amid Recovery Woes- AP
World stock markets mostly sank Monday as investors warily eyed a possible rate hike by China’s central bank and evidence that recoveries in the world’s major economies are sputtering.
Nevada, where 62.3percent of homeowners owe more than their property is worth
Almost 22% of mortgage loans in Ohio ‘underwater’
National rate higher for those owing more than home is worth
Thursday, June 9, 2011 03:08 AM
By Jim Weiker
THE COLUMBUS DISPATCH
More than 1 in 5 Ohioans with a mortgage owes more than their home is worth, according to a new report.
Nationwide, 22.7percent of homeowners were underwater during the first three months of the year, down slightly from 23.1percent during the previous three months.
The national average masks enormous differences among states. Nevada, where 62.3percent of homeowners owe more than their property is worth, leads the nation in negative equity, followed by Arizona, at 49.6percent, and Florida, at 46.1percent.
http://www.dispatch.com/live/content/business/stories/2011/06/09/almost-22-of-mortgage-loans-in-ohio-underwater.html - 72k -
“Nationwide, 22.7percent of homeowners were underwater during the first three months of the year, down slightly from 23.1percent during the previous three months.”
Within rounding, the 23% underwater figure I tossed around in yesterday’s ‘water depth per underwater household’ figure was on target, at least according to this article. For instance, if we accept the aggregate negative equity figure of $4.2t, use 22.7% as the percentage of homes underwater and estimate the total number of homes with “regular mortgages” that show outstanding principle balances at 46,703m, you would get negative equity per underwater home of
$4,200,000,000,000 / (22.7% * 46,703) = $396,167 ($400K, rounded).
That figure still sounds astonishingly high to me, but would certainly help explain the difficulty of getting mortgage modifications to work for very many.
I am interested in the answer to your question, but really, how can the “average” house be underwater by twice what the “average” house even sold for? I think the $400K number is off by an order of magnitude. The article says that in Ohio, the average for underwater FBs is less than $40K. Maybe it is $4M in Malibu, but that’s not going to affect the national average much.
They key to sliderule math is to first judge where the decimal point will end up, then calculate.
You have asked the right question: “how can the “average” house be underwater by twice what the “average” house even sold for? I think the $400K number is off by an order of magnitude. ”
If one just uses math without any thought one would get the above…
My take is that 4.2T is not the real negative equity. This is the number if home prices trended to historical appreciation rates (more or less equal to inflation rate). The number to use is the elusive “current book value” of the mortgages on the bank’s balance sheets. Due to lax accounting (FASB anyone?) standards the banks are reporting - perhaps - 500B.
There is a long way for house prices to fall & for banks (or pension funds/ investors) to show the losses.
“The key to sliderule math is to first judge where the decimal point will end up, then calculate.”
The key to averages is that a few large outliers on the high end of the range can pull the average way above the median (the latter being the value that splits the data into two equal groups, one lower and one higher).
I see what you MEAN.
All of the people I know who bought newer houses in the past 2 years were from out-of-state. Locals tended to buy much older, much less expensive, houses.
This study was done by CoreLogic. I wonder if CoreLogic determined market value of if they used the Ohio Realtor Assoc. numbers. (ORA)
The big problem with the Ohio group of the NRA is that they publish “average” house values, not median.
While prices have definetely dropped, I don’t think they’ve fallen by as large a percent as the ORA reports. Essentually, Ohio began building million-dollar homes only in the last decade, and I think a lot of these were bought by economic locus’ from coastal states (Ohio is HQ to a large number of companies that have presense on the coasts.)
Certainly, the number of new homes sold has dropped significantly here, and they were all “high-end housing”.
I think the high-end market has come to a halt in the past year. I think the lower-end housing ($70-100K) may be flat, and standard mid-range ($120-250k) housing has probably dropped a little.
Clipped from Money & Markets : Written by Martin Weiss’s father, years ago.
~ J. Irving Weiss, about a similar situation during the Great Depression.
“In the 1930s, I was tracking the facts and the numbers as they were being released — to figure out what might happen next. I was an analyst, and that was my job. So I remember them well.
“Years later, economists like Milton Friedman and my young friend Alan Greenspan looked back at those days to decipher what went wrong. They concluded that it was mostly the government’s fault, especially the Federal Reserve’s. They developed the theory that the next time we’re on the brink of a depression, the government can nip it in the bud simply by acting sooner and more aggressively.
“Bah! Those guys weren’t there back then. When I first went to Wall Street, Friedman was in junior high and Greenspan was in diapers.
“I saw exactly what the Fed was doing in the 1930s: They did everything in their power to try to stop the panic. They coddled the banks. They pumped in billions of dollars. But it was no use. They eventually figured out they were just throwing good money after bad.
“The true roots of the 1930s bust were in the 1920s boom, the Roaring Twenties. That’s when the Fed gave cheap money to the banks like there was no tomorrow. That’s why the banks loaned the money to the brokers, the brokers loaned it to speculators, and the speculation created the stock market bubble. That was the real cause of the Crash and the Depression! Not the government’s ‘inaction’ in the 1930s!
“By 1929, our economy was a house of cards. It didn’t matter which cards the government propped up or which ones we let fall. We obviously couldn’t save them all. So no matter what we did, it was going to come down anyway. The longer we denied that reality and tried to fight it, the worse it was for everyone. The sooner we accepted it, the sooner we could get started on a real recovery.”
“So no matter what we did, it was going to come down anyway. The longer we denied that reality and tried to fight it, the worse it was for everyone. The sooner we accepted it, the sooner we could get started on a real recovery.”
The Home Affordable Modification Program (HAMP) is a key component of the Obama Administration’s Making Home AffordableSM Program announced on March 4, 2009. HAMP creates a defined loan modification process through which borrowers who are in default, at risk of imminent default, or in foreclosure can have their loans modified to a more affordable monthly payment targeted at 31 percent of their monthly gross income.
All servicers must participate in the program, which expires on December 31, 2012, for all eligible Fannie Mae portfolio mortgages and MBS pool mortgages.
Speaking of servicers, my wife’s BofA loan has changed servicers from BAC Home Loans Servicing, LP to their parent company, Bank of America, N. A. N/A is more like it, as she has not paid since last April.
Any ideas why they would be executing a servicing change? And from BAC to BofA; Whoopee! Anything to do with being expected to participate in the HAMP?
I do know that this time around, after the sale was cancelled the first time, wife was served foreclosure papers from an honest to goodness in person process server. So they are tweaking their ways a bit.
April was a record foreclosure month for Deschutes County; This is without bank of America processing any; having cancelled theirs to be completed again starting in August. BofA has 615 now, their numbers on the TSales docket seems to be increasing at a rate of about 5 per day.(scheduling them out to November)
I think its due to the settlement of a lawsuit involving foreclosing on active duty serviceman.
Bernanke studied the Great Depression. If this myth of a vast credit expansion fueled by low interest rates in the ’20s was true, he’d have noticed that in his research, don’t ya think? He’d know right off that holding down interest rates causes crashes later, wouldn’t he? The wisdom of Bernanke was undisputed by Busch and Obama, so everyone in the room has something to believe in. The only conclusion is that the ’20s never happened. It’s stupid historical revisionsim, based on a cherry picked outtake from the writings of an obvious lunatic TEA Partier. Anyone who believes it is morally bankrupt and against my special interest group.
/snark
The heart of Bernanke’s thinking is if you put money in the hands of consumers they will spend it, and this is true.
If they spend it on things then the makers of those things will profit and they will hire people so more things can be made, this is also true.
But the problem is these things that are made are made somewhere else.
In the Thirties things that were consumed here were made here. So dishing out money for everybody to spend would work in the Thirties to help workers in the U.S. But dishing out money to spend today helps workers that are somewhere else.
Seriously, you cannot be right about what Bernanke is thinking. He puts money in the hands of bankers, which ends up making things workers already must buy more expensive because the bankers bought up all the rice krispies. So the workers have less to spend on fun stuff that makes the economy go round. Yet the bankers have more. Are you sure about what he is thinking?
“Seriously you cannot be right about what Bernanke is thinking.”
From what I understand about Bernanke, the one person that was most influential in Bernanke’s economic thinking from an early age was his grandmother.
She told him stories of the depression and how people did not have money to buy such things as shoes, so people learned to do without. But because there was no money to buy shoes the shoe factory in town shut down its operations.
This did not make sense to the young Bernanke: If people needed shoes then why did the shoe factory shut down?
The answer was simple: Because people did not have the money to buy shoes.
Because people did not have money they couldn’t buy shoes: because shoes couldn’t be sold they stopped being made; because they stopped being made then there was no need for workers, so the workers got laid off. And a laid off worker does not have the money to buy shoes.
So it was a vicious circle and the only way to break this circle was to somehow get money into people’s hands so they can spend it and thus lubricate the economy and get things moving again.
This is Bernanke’s thinking. He spent most of his life being driven by this train of thought - he won a Phd with this train of thought - he is committed to this train of thought. This train of thought is part of who he is, it defines who he is, and he is not about to change anytime soon.
At least this is my read of Bernanke, and my opinion.
“So it was a vicious circle and the only way to break this circle was to somehow get money into people’s hands so they can spend it and thus lubricate the economy and get things moving again.”
This approach is far more viable for shoes than for houses.
+1
Combo: Its Bernake’s failure of putting money in the hands of millions of consumers like me, which is making it far worse then it should be.
How about paying my rent for 6 months…instead of throwing money down a homoHnahz rat hole?
“The heart of Bernanke’s thinking is if you put money in the hands of consumers they will spend it, and this is true.
If they spend it on things then the makers of those things will profit and they will hire people so more things can be made, this is also true.”
It’s only true if those same consumers earn the money by putting something of equal value back into the economy, for example by manufacturing things. Why would the “makers of things” toil at making things if the central bank hands them an endless supply of money for doing nothing?
If the money is created out of thin air and handed out for nothing, then inflation results, and eventually hyperinflation, as numerous central bankers through history have discovered to their slack-jawed amazement. Currently our own Bernanke is struggling with this concept.
Both of these reasons are why investing in infrastructure and energy efficiency was the right solution.
1. You create jobs
2. You spread the wealth to consumers not bankers. Banks benefit some as people are more able to pay down their loans.
And infrastructure cannot be made in other countries by other people.
But, you see, infrastructure is a government thing, and that would be eeevil “government spending.”
As long as the stuff people buy are made in other countries then other countries is where a big chunk of worker’s paychecks are going to end up.
Build infrastructure here and pay the workers and right away off to Walmart these workers go with the money to buy up goods made in China.
Money that is earned here - earned from building infrastructure or earned by other means - does not stay here.
Bernanke studied the Great Depression. If this myth of a vast credit expansion fueled by low interest rates in the ’20s was true, he’d have noticed that in his research, don’t ya think?
It’s like studying tsunamis without learning anything about earthquakes.
or: How to duck and cover without learning how to fly the plane.
RE industry seems to be holding off property but this past week more and more properties are being listed, not by banks, RE, but by home owner’s who are now getting the message that property is going down. A race to the door on all these M-dollar properties should prove interesting on resetting market pricing. How many will sell? How many won’t and will go back to the bank? How many people parked in these high tax properties are going to homestead until the bank kicks them out?
I ran some of my own Redfin and Zillow numbers this weekend for my neck of the woods. It appears that nothing over $600K has sold in the past three months. About 80%+ of what has sold has been on the very low end. Although the average sale price has gotten to be just under $150/sf, there are an embarassing number of comparable listings asking over $200+/sf.
There are a lot of listings on the low end and a hefty inventory on the high end, but there doesn’t seem to be all that many for sale in the mid-range. Number of listings in all is up YOY.
LOTS of open houses this weekend, but the ones I drove by only had one car outside (the agent’s car?).
The reset button on the price point has been pushed. It’s up to sellers to meet that price point, irrespective of “what they’ve got into it”.
As far as I can tell, that price point is around $200k in the suburbs generally speaking, give or take 15%. I’m wagering the price point will continue falling.
Rally round the price point home-debtors and lying realtors. It is central.
As far as I can tell, that price point is around $200k in the suburbs generally speaking, give or take 15%.
I think you’re right that’s the critical price point around where I work now. Problem is that means you’ve got to spend about $250k for one of the nice places. I’m really hoping those two points get pushed down about 100k before this is over, because if I end up spending 250k I’ll have to cut back on some of my fun. If I could buy a nice place for $150k I could live like a king…or an FB.
Yup. You read my mind.
Currently, the difference between what you get for 200k and 280k is huge. It seems the mix of shacks changes substantially at say 240k. Obviously I hope the price point moves to 125k which puts the nicer shacks marginally below 200k.
About a year ago I noticed that there is a common number of $210k for Fannie/Freddie’s dumps in good neighborhoods. Now their inventory is priced all over the scale.
I’ll stand by my assertion that it is now the sellers burden to meet whatever the current price point is, irrespective of how “upscale” it is. The price point is the price point and that’s all they’re going to be offered.
Bulletin to lying reaItors and deluded home debtors:
Get what you can get for your house today because it’s going to be less tomorrow for many many years to come.
On this topic, just heard from a wife of an old friend via Facebook that she got her first offer on a place that her mother just had to vacate on a one-way trip to the nursing home. Either she’s not keeping up with current events or she got lowballed hard…or both. All I know is she’s very frustrated and unhappy with the offer. If she was the personal friend I might have a heart-to-heart with her, but since she’s the wife of a friend I think I’m just going to keep my mouth shut.
Offer this gem my HBB brother:
“Get what you can get for it today because it’s going to be much much less tomorrow for many years to come.”
The silent response is deafening.
Yeah, but I don’t even like dealing with my own wife in that mood, let alone anybody else’s :-).
“LOTS of open houses this weekend, but the ones I drove by only had one car outside” (the agent’s car?).
There is a house a few streets from us that has an open house every Sunday from 2 to 5. So far the only person to show up as far as I can tell is the real-a-tor.
He/she needs to start baking cookies and brownies. That may get me to do a walk through. LOL!
I’m seeing a lot of one-car open houses here in Tucson.
Not the case around here (mid-Peninsula, south of SF).
There are four new townhomes on a very busy street (bad location) that went on the market recently for $1.7MM each. 1 is sold (closed) with the other 3 in contract. They were on the market for a short enough period of time that I would be surprised if there was any price reduction.
Generally speaking, new/good quality homes are in pretty high demand. I think this effect is the Facebook Fear (or Zynga/LinkedIn/Twitter, etc.). It is the fear that once Facebook goes public, home values will increase due to the new millionaires in the area, so if you are thinking about buying, you should get serious before the IPO.
The actual effect will be much smaller than people think. Lots of Facebook employees will make a bunch of money, but many will look to SF to live, others are already rich or already own their home. The number of local buyers created won’t be as great as people think. However, the perception of the effect seems to have had an impact on the local market. Time will tell of the “pending” sales out there actually close.
There are not so many for-sale signs in my neck of the woods. Noticable decrease from last year this time.
Maudlin says it’s time to buy in his latest newsletter:
All that to say is that if you are in a place where you want to buy a home, now may be the right time to start thinking about it. The banks and government are simply overwhelmed with homes that have been repossessed, and it looks like there might be as many as 2 million more homes to come onto the market. Prices in many areas are going to continue to fall, and if you can get credit, mortgage rates are quite low.
Hegel’s Master/Slave Dialectic
June 13th, 2011 Kommentare deaktiviert
In a time of financial “Masters of the Universe” that dictate the political and economic conditions, and above all downgrade individuals and nations to the slave state within the monetary system, it may not be wrong to take a look at a classic philosophical text on the topic of “Master / Slave “.
By Doug Frame, Introduction Lars Schall
In case you need an excuse for reading something on the “Master/Slave“ issue written by Georg Wilhelm Friedrich Hegel (1770 – 1831), I would like to give you one. In a recent interview that I’ve conducted with the Austrian economist and co-founder of the Institute for Value-based Economics in Vienna, Gregor Hochreiter (see: “Let’s Talk ‘Austrian’“), I gave Mr. Hochreiter inter alia this question:
“What is wrong with our debt-based money system and why does it have bad effects on the world as a whole?“
His answer to it was:
“Well, the driving force of economic development is not the availability of credit, but of real savings, i.e. production, which has not been consumed and which is invested. Almost everybody though believes that the availability of credit is decisive for economic growth. By falling prey to this economic fallacy, more and more parts of society get indebted and finally over-indebted. Widespread defaults of private households and of businesses or even the default of the state is just a question of time.
During the process of ever increasing indebtness the banking system earns unjustified income, while the poor suffer from rising prices as a consequence of the inflationary increase of the money supply. In sharp contrast to the commercial messages of the banking sector taking up a credit does not bring more personal freedom. Maybe in the short-run, but in the long-run, the debtors are at the mercy of their creditors. Being in debt is a kind of (self-)enslavement. Moreover, the necessity to pay an accrued interest on debt promotes the short-sighted exploitation of natural ressources as well as of one self.“
http://www.larsschall.com/2011/06/13/hegels-masterslave-dialectic/
This resonates with me, and my “Debt is Slavery” slogan.
+infinity.
Nothing new here but it DOES bear repeating.
Often.
Good find wmbz.
Clipped from a WSJ interview with Rep. Michele Bachmann of Minnesota.
By STEPHEN MOORE
“As we rush from her first-floor digs in the Cannon House Office Building to the House floor so she can vote, I ask for her explanation of the 2008 financial meltdown. “There were a lot of bad actors involved, but it started with the Community Reinvestment Act under Jimmy Carter and then the enhanced amendments that Bill Clinton made to force, in effect, banks to make loans to people who lacked creditworthiness. If you want to come down to a bottom line of ‘How did we get in the mess?’ I think it was a reduction in standards.”
She continues: “Nobody wanted to say, ‘No.’ The implicit and then the explicit guarantees of Fannie Mae and Freddie Mac were sopping up the losses. Being on the Financial Services Committee, I can assure you, all roads lead to Freddie and Fannie.”
Ms. Bachmann voted against the Troubled Asset Relief Program (TARP) “both times,” she boasts, and she has no regrets since Congress “just gave the Treasury a $700 billion blank check.” She complains that no one bothered to ask about the constitutionality of these extraordinary interventions into the financial markets. “During a recent hearing I asked Secretary [Timothy] Geithner three times where the constitution authorized the Treasury’s actions, and his response was, ‘Well, Congress passed the law.’”
‘Well, Congress passed the law.’
After Hank Paulson pointed a loaded gun their direction…
“After Hank Paulson pointed a loaded gun their direction…”
Which is what the banksters do, make threats to bring everything down.
Abolish the FED. Have the government issue debt-free money. Don’t believe the canard that the government is so inept, corrupt and stupid it would be unable to do so. CONgress would be able to function on behalf of the people if they weren’t driven half mad by banksters and other special interest groups.
Coin our own money? Not pay interest to private banks for the issuance of our currency? Commie.
The Wall Street Journal
The Weekend Interview
By STEPHEN MOORE
http://online.wsj.com/article/SB10001424052702304259304576375491103635726.html - 188k -
The idea that banks aren’t part of interstate commerce as defined by current Supreme Court jurisprudence is absurd.
You can say that the bailout was a terrible idea in the form it took or that it would have been a bad idea in any form that it could possibly have taken. That is a very legitimate debate that should have happened before the vote. But to question its Constitutionality is grandstanding. Not that there isn’t plenty of that in Congress all the time, but it is grandstanding. And the treasury secretary is hardly the best expert to question on it.
The idea that banks aren’t part of interstate commerce as defined by current Supreme Court jurisprudence is absurd.
Regulating them? Sure. Bailing them out with taxpayer funds? I assume that’s what’s being questioned.
If that is all that is being questioned (the ability of Congress to tax - or in this case borrow - and spend money) then the idea is even more absurd. Congress can decide to give a group money for pretty much any reason or no reason. Is spending money on NASA unconstitutional?
Is spending money on NASA unconstitutional?
arguably ‘yes’
NASA returns $13 to the economy for every dollar spent.
That’s a good investment in anyone’s book.
“Is spending money on NASA unconstitutional?”
Arguably no. Since there was no space travel back in the day when the Constitution was penned, the constitution doesn’t offer an opinion on whether it is legal to fund it with federal tax dollars.
You can say that the bailout was a terrible idea in the form it took or that it would have been a bad idea in any form that it could possibly have taken. That is a very legitimate debate that should have happened before the vote. But to question its Constitutionality is grandstanding.
There is a lot of that in the Tea Party manifesto. They invoke the Constitution frequently and inaccurately. If you think that a law passed by te Congress is bad policy, then make an argument explaining why you think it’s bad policy. Don’t bring in the Constitution to take the place of an argument that you’re incapable of making.
“There were a lot of bad actors involved, but it started with the Community Reinvestment Act under Jimmy Carter and then the enhanced amendments that Bill Clinton made to force, in effect, banks to make loans to people who lacked creditworthiness. If you want to come down to a bottom line of ‘How did we get in the mess?’ I think it was a reduction in standards.”
She’s wrong, too political and bad at math.
a Federal Reserve survey showed that affected institutions considered CRA loans profitable and not overly risky. He noted that approximately 50% of the subprime loans were made by independent mortgage companies that were not regulated by the CRA, and another 25% to 30% came from only partially CRA regulated bank subsidiaries and affiliates. Barr noted that institutions fully regulated by CRA made “perhaps one in four” sub-prime loans, and that “the worst and most widespread abuses occurred in the institutions with the least federal oversight”.[120] According to Janet L. Yellen, President of the Federal Reserve Bank of San Francisco, independent mortgage companies made risky “high-priced loans” at more than twice the rate of the banks and thrifts; most CRA loans were responsibly made, and were not the higher-priced loans that have contributed to the current crisis.[121] A 2008 study by Traiger & Hinckley LLP, a law firm that counsels financial institutions on CRA compliance, found that CRA regulated institutions were less likely to make subprime loans, and when they did the interest rates were lower. CRA banks were also half as likely to resell the loans. wiki
Right. The idea if the CRA is to stop redlining. If you have an area that is being blighted by redlining, housing prices are low. So you have a working poor person with limited savings getting the loan they need to buy a $20,000 house. That was not the to problem.
The problem was working poor people buying $500,000 houses. And lots of people buying $200,000 houses for $500,000. And lots of lenders, noticing that $200,000 houses were selling for $500,000, convinced their owners to “liberate the equity” and spend it.
Is it possible that CRA forced many working poor to look for houses they could not afford? Not sure how it trickled up; it’s like every class of people had to go one or two steps higher than they could afford.
Love to see some statistics on that.
With saying that I still think easy money was the root of all housing bubble…..
How could/would the CRA force a strawberry picker in California to buy a house???????
independent mortgage companies made risky “high-priced loans” at more than twice the rate of the banks and thrifts;
Who was backing these mortgages? If I am corerct, these so called independent mortage companies were nothing but mortgage brokers.
Bachmann is a painfully stupid politician, a serial liar and american taliban rolled into one. Red meat for liberals, deeply distressful to independents.
Please make her go away.
But she has nice, lying eyes!
““During a recent hearing I asked Secretary [Timothy] Geithner three times where the constitution authorized the Treasury’s actions, and his response was, ‘Well, Congress passed the law.’””
Geithner is correct as far as his statement about TARP being authorized by Congress.
But I saw no congressional action regarding the unlimited bailouts of Fannie/Freddie. That was done by the executive branch alone, and I would argue is therefore unconstitutional.
News Analysis
In Greece, Some See a New Lehman
Prime Minister George Papandreou of Greece, right, with Finance Minister George Papaconstantinou in Parliament this month.
By LANDON THOMAS Jr.
Published: June 12, 2011
LONDON — Bond traders and officials at the European Central Bank have been unified in their warnings that a restructuring of Greece’s debt would set off an investor panic similar to the one that followed the bankruptcy of Lehman Brothers.
Others, however, have argued that Greece’s debt of 330 billion euros, or $473 billion, while too large for the country to bear, is small enough to allow banks and other institutions to take a loss without bringing the world financial system to its knees.
…
Some say the banks in Europe will be shown to be insolvent if they have to write that stuff down. That could be painful. Better to have the US taxpayers prop them up for now. Right, Mr. Obama?
Mauldin’s last letter mentioned this, but in the context of credit default swaps. So it isn’t necessarily a write down of the actual bonds that is the problem. It is where the risk will fall on the CDS losses. Could be that the European banks are all properly hedged for the real bonds. But if enough people did that hedge as a “bet” (they had no real exposure), then who knows if the entity backing the insurance side of the swap is adequately capitalized to pay off.
Wonder what would happen if AIG ended up in trouble over this again? Would anyone even want to rescue them?
I think the real danger of Greece is that if they defaut, the citizens in the other two PIG countries might get all uppity and default as well.
I think AIG is toast any way you cut it.
In their mind, that might be a bad precedence. That would show bank or whoever made the load have to eat losses like Lehman, is that fear what brought us TARP, QE, QE2 and future QEns?
Debt like drugs, the society is so addicted, we will have serious withdraw when we really stay away from it. Before that, someone will fight with their life to continue on this drug.
Sometimes, withdrawls are fatal.
“The Virtual Factory”: Loan creators made a virtual product out of thin air - a loan. Then they sold it off to others. Now these products* are blowing up left and right. Yet these virtual factories are still in business. Why are they not being sued out of existence?
Any other product with this kind of track record would lead to its producers being sued out of existence, and likely jail time for the leadership for malfeasance.
*products - I find the use of the term “product” to describe a loan to be a marketing tool, a simple euphemism. It’s a loan. That’s already a very descriptive word for it. It’s like the gambling industry referring to “gambling” as “gaming”.
Our entire economy is like this.
Did anyone else get a notice from USAA about a $50 credit if you put over $400 on your Mastercard in both June and July? Looks like trying to get people who don’t use the card for groceries and coffee and such to start doing so.
I actually have some spending to do this month and next (bar dues, some stuff for a vacation, etc.) so I certainly will do this, but I don’t like the idea behind the offer. I have a reason for not using my credit card for groceries and impulse purchases. Seriously, if I can’t buy my niece and nephew jungle animal stickers without taking out a loan, I shouldn’t be buying it for them in the first place.
By the way, the offer says it is limited to people who got the mailing, so it isn’t for all USAA mastercards.
Oops. Bar is too smart to fall for the credit card thing. I had to send a check.
So you only spend $350? Well that it’s makes it ever so much better.
Low wages can be an obstacle to owning lots of things, not just housing.
I find the discussion in this interview somewhat incoherent. For instance, first the expert says the foreclosure crisis has led to many vacant homes around San Diego, next she says we need more homes. Wouldn’t it make good sense to fill all those vacant homes with owner-occupants before building still more homes?
Lower prices no aid to ownership
Affordable-housing expert says low wages keep many from buying; rental prices also pressured
By Roger Showley
6 a.m., June 13, 2011
…
Tinsky sat down recently to talk about her many interests and San Diego’s near-term future. Here are excerpts of her comments:
Q: What is the state of San Diego’s housing and affordable housing right now in 2011?
A: Now more than ever, I think affordable housing in San Diego is an oxymoron. We’ve got this foreclosure crisis, lots of vacant homes in the region — that’s the push-back we’re getting right now. The reality is much more of our work force is in the hospitality industry or service sector. These are very low-paying jobs. Even a home that has come down 50 percent is still outside the reach of our folks in the work force. In terms of the rental market, what’s happening is people are leaving homeownership after being foreclosed on and moving back into the rental market and putting pressure on the rental market. For folks in the rental market, they’re seeing rents rise now and (affecting) their ability to maintain the housing.
Q: Isn’t this a temporary problem?
A: I think no matter what, unless we do something pretty dramatic to solve our housing crisis, there are going to be within communities more gentrification, more displacement of families, and so to some extent that dynamic will always be there.
Q: What solutions are there?
A: We’re working a lot through Sustainable San Diego on looking comprehensively at the impacts that land use are making on housing affordability. Land use is integrally connected to the cost of housing, the way we grow as a region is going to have a huge impact on the costs of housing. A lot of that is very tied up with our state fiscal structure.
Q: Developers say the solution is more supply?
A: I do think supply is a big piece of it, but it’s unrealistic to think we’re going to build our way out of it.
Q: Are you getting support from individual cities for affordable housing?
A: Many jurisdictions are willing to take more housing — San Diego, Chula Vista, El Cajon and San Marcos. Generally, there’s a divide between North County and South County cities.
Q: What’s the housing outlook for the immediate future?
A: I think things are going to get worse before they get better. I think we’re facing another wave of foreclosures. (In response to cities removing barriers to development and charges or exactions for affordable-housing requirements) I think we’re going to end up 10 steps behind at the end of the day because they’re taking action to remove exactions. And funding for creating affordable homes is diminishing drastically. This isn’t good news for our members. It makes their work that much more difficult.
…
“Now more than ever, I think affordable housing in San Diego is an oxymoron.”
It’s been an oxymoron for 3 decades. There was a brief respite from the madness in the early 90’s, but that was about it.
Translation: We’re doing everything BUT creating jobs with decent wages.
The problem in SD County as well as CA as a whole is the structural supply shortage. I feel like a broken record here, but some facts for folks to noodle on:
The only state with a higher person/housing unit (rental and owned homes) ratio than CA is Utah.
Per the 2010 census, there is only one state with a lower housing vacancy rate than CA (Connecticut was at 7.85%, CA at 8.06%–US average is in double-digits).
In the 90’s, CA built ~1MM housing units. During that same timeframe, CA added 4MM population.
From 1990 through 2009, the rest of the country built 50% more housing units per increase in population than CA. Even during the housing boom, CA was underproducing housing units relative to its population growth.
Chronic housing supply shortages are the reason for affordability problems in CA. There is no other explanation.
“Wouldn’t it make good sense to fill all those vacant homes with owner-occupants before building still more homes?”
Not if you’re a builder.
The jobs crisis
Jun 13, 2011 07:00 EDT
By Lawrence H. Summers
The opinions expressed are his own.
Even with the massive 2008-2009 policy effort that successfully prevented financial collapse and Depression, the United States is now half way to a lost economic decade. Over the last 5 years, from the first quarter of 2006 to the first quarter of 2011, the U.S. economy’s growth rate averaged less than 1 percent a year, about like Japan during the period when its bubble burst. At the same time the fraction of the population working has fallen from 63.1 to 58.4 percent, reducing the number of those with jobs by more than 10 million. The fraction of the population working remains almost exactly at its recession trough and recent reports suggest that growth is slowing.
Beyond the lack of jobs and incomes, an economy producing below its potential for a prolonged interval sacrifices its future. To an extent that once would have been unimaginable, new college graduates are this month moving back in with their parents because they have no job or means of support. Strapped school districts across the country are cutting out advanced courses in math and science and in some cases only opening school 4 days a week. And reduced incomes and tax collections at present and in the future are the most important cause of unacceptable budget deficits at present and in the future.
You cannot prescribe for a malady unless you diagnose it accurately and understand its causes. Recessions are times when there is too little demand for the products of businesses, and so they fail to employ all those who want to work. That the problem in a period of high unemployment like the present one is a lack of business demand for employees not any lack of desire to work is all but self-evident. It is demonstrated by the observations that (i) the propensity of workers to quit jobs and the level of job openings are at near-record low levels; (ii) rises in nonemployment have taken place among essentially all demographic skill and education groups; and (iii) rising rates of profit and falling rates of wage growth suggest that it is employers, not workers, who have the power in almost every market.
…
rising rates of profit and falling rates of wage growth suggest that it is employers, not workers, who have the power in almost every market
Which makes the notion of an individual worker bee having “bargaining power” risible. You’ll take what they offer you and say “thank you”. If they cut your pay, cancel your pension, replace your health plan with a crappy HD plan, and make you work longer hours with no OT pay, you’ll thank them for not firing you.
same story, different day.
if the individual worker bee has no bargaining power, how have I been able to negotiate higher salaries on the past two jobs I’ve accepted? And re-negotiated the rate (higher) on my contact job on the side?
People who provide value in an unsaturated market will always be able to bargain. If the supply in the market is too high, well…market value just isn’t as high because there are others around willing to do the work for less.
If you’re arguing for a floor in the price of labor, then you’re indirectly arguing for a floor in the price of goods. At that point you’ll have your wonderful central-command economy.
if the individual worker bee has no bargaining power, how have I been able to negotiate higher salaries on the past two jobs I’ve accepted?……same story, different day.
Yes it is the same story, different day.
Same story: You again using singular, anecdotal and unprovable examples (while patting yourself on the back) to discredit truths such as most workers have less bargaining clout when the middle-class is shrinking, median pay has been stagnant and declining for 30 years, benefits and pensions have been slashed and unemployment is through the roof.
Different day: Today, yesterday and probably tomorrow.
Go Rio!
Summers is a scum bag but he speaks the truth here. Of course I’m sure his prescriptin is more money for the banks.
I was wrong this is his prescription
Among the proposals he made is increasing the size of the payroll tax holiday from 2% of income to 3% of income, and expanding it so that employers also get a break from paying the tax that goes to support Social Security.
“At a near-term cost of a little more than $200 billion, these measures offer the prospect of significant improvement in economic performance over the next few years translating into significant increases in the tax base and reductions in necessary government outlays,” he said in the Washington Post column.
He also advocated more spending on public works projects in the near-term, arguing in the Financial Times that the government should “take advantage of a moment when 10-year interest rates are below 3 percent and construction unemployment approaches 20 percent.”
I’d throw in a VAT tax and using the money to reduce the payroll tax. I add a gas tax and using the money to reduce the payroll tax.
Make imports and fuel more expensive and US labor cheaper.
I’d also throw in singple payer health care system this also would greatly reduce the costs to employ US workers.
“Among the proposals he made is increasing the size of the payroll tax holiday from 2% of income to 3% of income, and expanding it so that employers also get a break from paying the tax that goes to support Social Security.”
So how exactly is SS supposed to cut checks if no one is paying into it? Or is this merely the stealth “kill SS” plan, to gradually eliminate the payroll tax and presto! SS is gone!
It IS a stealth plan to kill SS.
I’m in favor of a big gas tax because well my 96 ford escort has yet to turn 70K miles…so I don’t care….selfish aren’t I!
———————–
I add a gas tax and using the money to reduce the payroll tax.
4 day a week school seems like a good idea.
But, parents need the free daycare!
“Recessions are times when there is too little demand for the products of businesses…”
Very good Lar - now finish that thought with this: “…because there was a prolonged period of distorted/excess demand for those products from those businesses.”
yeesh, apologies for the blown blockquote :-0 Let me try that again:
A period of excess driven by deficit spending, both on a consumer and government level.
While on a federal level, the economy can grow till the debt is a small percentage of GDP. However, consumers have no such ability. And since it is the consumer who ultimately drives the size of GDP (the federal spending is taking in tax revenues and redistributing the largesse), until the consumer can either take on more debt, or pay down the existing debt so more money can go to goods and services, not debt service, there’s not going to be the big recovery.
How much longer can government continue to both take on private sector bad debt, and deficit spend to make up for the missing consumer spending, until its ability to repay the lenders comes into question?
I think we’re going to find out.
Where’s the mystery?
Republicans block ending offshore jobs tax breaks | Reuters
http://www.reuters.com/article/idUSTRE68R40I20100928
Study says most corporations pay no U.S. income taxes | Politics | Reuters
http://www.reuters.com/article/politicsNews/idUSN1249465620080812
The tax base was deliberately gutted, yet “high” wages are blamed for budget shortfalls. We are now asked to accept that high unemployment is going to be the norm and that our problems were caused by excess, yet the facts are we sent our jobs overseas and gave trillions in tax breaks to big corporations while making bad loans we knew the government would make whole.
This is not quantum physics. We the people, were robbed and we are being punished for it as well… and we’re accepting it.
You can’t fix that kind of stupid.
China Lending Unexpectedly Tumbles, Adding to Evidence Economy Is Slowing. ~By Bloomberg News - Jun 13, 2011
China’s lending tumbled in May and money supply grew at the slowest pace since 2008, adding to signs that the world’s second-biggest economy is cooling.
Loans were 551.6 billion yuan ($85 billion), less than the 650 billion yuan median estimate in a Bloomberg News survey of 20 economists and 639 billion yuan a year earlier. M2, the broadest measure of money supply, rose 15.1 percent, the People’s Bank of China said on its website.
The Shanghai Composite Index slid 0.2 percent as the data fueled concern that interest-rate increases to combat inflation will trigger a slowdown. A report tomorrow may show that consumer prices jumped 5.5 percent in May from a year earlier, the biggest gain in almost three years, the median forecast in a Bloomberg News survey shows.
“This provides another data point highlighting the growth risk,” said Tao Dong, a Hong Kong-based economist for Credit Suisse Group AG. “I think the economy is heading to a soft landing in the second half of 2011, but the risk of a hard landing seems to be on the rise,” Tao said, adding that small companies are short of credit.
How many times do we humans have to go through the economic cycle before we realize that there are no “soft landings” in capitalism? Hard landings maybe, but no soft ones.
It’s hard to stop 13,000 years* of momentum.
(*approximate time of the beginning of recorded history)
I walked into a Home Depot Sat. mid-morning. Was hit up by sales people before I got in the door.
“Welcome to home depot, can we help you in anyway” No thanks! I know what I came for.
Just inside the door two of them, same thing. More sales people than shoppers. I was asked at least a half dozen times while in the store, was I finding everything OK.
I find this stuff very annoying, I like to be left alone.If I need help, I’ll ask for it. I walked to the lighting section and a guy pops out from behind a lighting display. May I help you? No thanks! I turned around and headed for the self-checkout to pay for the $2.00 worth of hooks that I had in my hand.
On the way out I passed by the gas grills, there was a fellow giving BBQ cooking instructions. His audience… 2 sales people.
This kind of bombardment has never happened to me before at the home depot. If it happens the next time I go, I’ll be done, never to shop there again.
Obviously these folks are required to be “helpful”. It amazes me so few store managers get that some of us are repulsed by such helpfulness. If I ask for something, then help.
You know how if you ask where such and such is, they start running to show you the way, as if you can’t find the next isle. You are not required to follow them though!
I get irritated by the mandated helpfulness too. Strangely enough, shopping is sort of a meditative time, and I hate people intruding on that.
Also I hate it when the checker asks if I found everything ok. Do you say no, I looked for X and you don’t have it, just so they hold up everyone to send someone over who looks where you were just looking to say no we don’t have it?? I don’t think so.
Once I did tell the check out person that I didn’t have everything I was looking for (at a grocery store). Said I had been looking forward to a particular sale item, but there was a sign on the shelf saying it was a misprint. Manager on duty heard me and told me I could have the advertised price anyway and I should go back and get my item.
I really like that store.
Our local HD has always been kind of dead, but then a Lowes opened down the street. Those places are never busy, and they have to be losing money.
The problem we here here in my town is that all of the true hardware stores are long gone. So It’s either HD or Lowes and I am not a fan of either.
I really miss an honest to god hardware store!
We still have a few. Some are specialized but we still have a few ACE and TrueValue stores as well. Its where you go when HD or Lowes doesn’t have what you want.
Our local ACE is amazing. Twice I went in thinking I was on “mission: impossible” and both times the very first staff member I spoke with knew right where the item was shelved. Sometimes their prices are definitely higher, but they carry some pretty obscure things HD and Lowes don’t sell.
The problem we here here in my town is that all of the true hardware stores are long gone.
In Rio, it seems there is a little mom-n-pop hardware store on every block. Why? IDK.
Mom’n'Pop shops are still a very important path to Brazilian middle-class-much more so than in the USA.
On a tragic note, a family friend was robbed and killed Friday night closing his mom-n-pop shop.
I never said it was all roses down here.
Damn.
I really miss an honest to god hardware store!
In Downtown LA, (2 blocks from Amtrak/Union Station) there’s a Japanese fella that has a eclectic hardware shop 14′ wide x 45′ long x 20′ high squeezed into a slot of a huge tall old brick building. People ambling around inside say “excuse me” constantly. Assorted supplies are unbelievable! Business is brisk! Most of the cultural stuff he also carries is labeled: made in Japan
Hwy
What street? On the walk to China Town?
We love taking the subway (RedLine) down to Union Station, shop and sightsee, and then we pick up the GoldLine to Pasadena in China Town. Memorial Park station is one block from Old Town Pasadena. L A’s subway is great!
I receive the same treatment at HD, but it’s been much worse at Lowes recently. I attribute part of this to living in a desert retiremnt/snowbird area and businesss probably down >50% this time of year.
But yes annoying in a car lot sort of way. I can see you…if I have a question I won’t be shy.
I like being able to find someone if I need help, but if I am walking around the store and not asking for help, then leave me alone!
Back in the glory days of the housing bubble, oh, that would be during 2005, I’d have to send out a search party to find help in Home Depot. These days, I get the multiple employee pounce treatment as soon as I walk in the door.
Strange, I seem to have the opposite experience in those stores. I’m occasionally asked if I need help with anything, but whenever I actually do need help I can never seem to find anyone!
Right?
I’ll settle for some decent products. A lot of the stuff is pure crap from China. I purchased a patio blind that came apart the minute it got hit with a puff of breeze. They failed to seal the cords and the whole thing just unravelled. Plus it was mostly made of the crap that straws are made of. Sigh. I wouldn’t have purchase it, except I couldn’t find an old one at the estate sales or yard sales or thrift stores. I’ll just have to be patient.
This is not the first time I’ve purchased crap at HD, either. I dunno what their buyers are thinking. This is going to be a return, which is a PITA for both me and them. I know if I had that problem, so have others. But maybe people don’t bother returning and just trash the stuff.
“Nearly one-in-three voters don’t like the way the 2012 presidential race is shaping up for now in the two major political parties. A new Rasmussen Reports national telephone survey finds that 30% of Likely U.S. Voters, given a choice between President Obama and one of the potential Republican presidential candidates, thinks 2012 would be a good year to consider electing a third-party candidate.”
~ Rasmussen Rpt.
That would sure beat open rebellion.
US Is in Even Worse Shape Financially Than Greece: Gross
Monday, 13 Jun 2011 | By: Jeff Cox CNBC.com Staff Writer
When adding in all of the money owed to cover future liabilities in entitlement programs the US is actually in worse financial shape than Greece and other debt-laden European countries, Pimco’s Bill Gross told CNBC Monday.
Much of the public focus is on the nation’s public debt, which is $14.3 trillion. But that doesn’t include money guaranteed for Medicare, Medicaid and Social Security, which comes to close to $50 trillion, according to government figures.
The government also is on the hook for other debts such as the programs related to the bailout of the financial system following the crisis of 2008 and 2009, government figures show.
Taken together, Gross puts the total at “nearly $100 trillion,” that while perhaps a bit on the high side, places the country in a highly unenviable fiscal position that he said won’t find a solution overnight.
“To think that we can reduce that within the space of a year or two is not a realistic assumption,” Gross said in a live interview. “That’s much more than Greece, that’s much more than almost any other developed country. We’ve got a problem and we have to get after it quickly.”
Gross spoke following a report that US banks were likely to scale back on their use of Treasurys as collateral against derivatives and other transactions. Bank heads say that move is likely to happen in August as Congress dithers over whether to raise the nation’s debt ceiling, according to a report in the Financial Times.
When adding in all of the money owed to cover future liabilities in entitlement programs the US is actually in worse financial shape than Greece and other debt-laden European countries, Pimco’s Bill Gross
It’s all jive, much debt will never be paid back, the world has enough current wealth and existing productive assets to transition and Bill Gross is a tool.
I find myself in complete agreement.
Yeah, but we got a printing press…
Isn’t it silly to add in all the “future liabilities from entitlement programs” without also adding in all the future assets from tax revenue? Can someone explain to my why that makes sense? Wouldn’t that be like determining that I’m broke because I don’t have enough money today to pay my rent for the next 50 years?
I’ve tried this argument here before. It doesn’t get much traction.
I assumed I was missing something. Good to learn that at the very least I’m not alone in missing it! =)
Nope—I totally agree with both of you on this. Counting the NPV of all future liabilities, and not also taking the NPV of all future revenue/income is just bad logic and leads to a meaningless conclusion.
As do I. These “liabilities” are just excuses to dismantle SS (while keeping the payroll tax in place to buy more aircraft carriers)
Also, isn’t it funny how the right wingers never complain about those lavish military pensions? Shouldn’t GI Joe be stuck with a 401K like the rest of us?
Shouldn’t GI Joe be stuck with a 401K like the rest of us?
Actually I’d like to see a change to the retirement system so that it wasn’t all or nothing at the 20 year mark. Some sort of 401(k) matching arrangement could help in that area. Until we fix our medical system I still think they deserve VA medical. Almost every veteran I know has something screwed up service-connected by the time they get out.
Your right max and sky. It’s deliberately designed to inflate the numbers and provoke the audience.
Wouldn’t that be like determining that I’m broke because I don’t have enough money today to pay my rent for the next 50 years?
I think the point is that the gov’t is contractually on the hook for certain benefits extending far into the future. You are not committed to paying your existing rent for 50 years– if your income declines, you can move to a cheaper place, or possibly your rent for your existing apt will also go down.
It is true that many gov’t benefits are statutory and so can be changed by Congress (despite avowals by some that SS is a “sacred compact”, etc.) But that causes political pain and economic ripple effects on the part of those who were counting on the benefits.
Ok, fair enough. Same argument, but add to it that I’ve signed a 50 year lease so I am contractually obligated to pay that rent for 50 years. Am I broke because I don’t have that amount in the bank?
If my income declines as our tax revenue has, I have to figure it out. Maybe I eat out less, maybe I drive an older car, or maybe I go back to my landlord and tell him either I have to pay less in rent or I’m moving out. In any case, I’m definitely not broke today just because I’ve committed to having a rent expense for the next 50 years.
In that case, you are not broke in the sense of current cash flow, such that you can be forced into bankruptcy, have your assets seized, etc. But unless you have a guaranteed 50-year income stream to match, you could well have a negative net worth in the sense of economic value. And your options for the future are much more constrained compared with someone who does not have such an obligation.
Also, it’s a little different in the case of an individual vs. a corporation or gov’t, which is assumed to have an indefinite life span (and constant or increasing earning power). A 50-year obligation would not have the same significance for a 80-year old person as it would for a 20-year old.
Good points and I agree. The longer the commitment period, the more likely it is that income will be disrupted and obligations won’t be met. However, in the case of the federal government, I’d argue that while a partial default is possible and even likely, a complete default (”I get no SS benefits”) is extremely unlikely.
Having a multi-decade obligation is definitely not a positive, but I’m tired of people saying we have $60 trillion in unfunded liabilities when that is simply not accurate. It’s a problem, but it isn’t a $60 trillion problem.
Yes but we have 13 nuclear powered carrier groups and 2000 ICBMs. Who’s going foreclose on us?
“Yes but we have 13 nuclear powered carrier groups and 2000 ICBMs. Who’s going foreclose on us?”
Good strategy. I gotta go buy more guns…
Again
That number is the total over years not due now. That’s like saying this house that we paid 100,000 will really cost the borrower 250,000 over.
I don’t disagree that it’s a big number but Gross is getting a bit shrill.
He made a bad bet on treasuries and was very public about it.
Apple store employee seeks to plant union seed
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Apple store employee seeks to plant union seed
Monday June 13, 2011 By Poornima Gupta
SAN FRANCISCO (Reuters) - An Apple Inc store employee has started a drive to unionize retail workers in a rare move at a company known for its near-fanatical following and cutting-edge mystique.
Cory Moll, a part-time employee at an Apple store in San Francisco, is working to form a union to fight for better wages and benefits and to address what he says are unfair practices in the company’s glass-and-steel retail showrooms.
“The core issues definitely involve compensation, pay, benefits,” Moll said, adding that he decided to go public with the union to encourage other employees to come forward.
While unions are strong in industries like trucking and autos, they are largely unheard of in Silicon Valley companies, which pride themselves on being quick-footed and having the flexibility to hire and fire.
Moll’s budding campaign is also unusual given Apple’s reputation for fierce employee loyalty.
Apple has more than 30,000 retail employees in its 325 stores around the world.
Nothing problem here, if they can’t afford to go, just borrow the money. Graduate with a load of debt, feel empowered by said debt and spend years as a debt slave. Just part of the grand plan!
ITEM: Surging college costs price out middle class.
NEW YORK (CNNMoney) — What do you get when college costs skyrocket but incomes barely budge? Yet another blow to the middle class.
“As the out-of-pocket costs of a college education go up faster than incomes, it’s pricing low and medium income families out of a college education,” said Mark Kantrowitz, publisher of financial aid sites FinAid.org and FastWeb.com.
The numbers confirm what most middle class families already know — college is becoming so expensive, it’s starting to hold them back.
The crux of the problem: Tuition and fees at public universities, according to the College Board, have surged almost 130% over the last 20 years — while middle class incomes have stagnated.
Tuition: In 1988, the average tuition and fees for a four-year public university rang in at about $2,800, adjusted for inflation. By 2008, that number had climbed about 130% to roughly $6,500 a year — and that doesn’t include books or room and board.
Income: If incomes had kept up with surging college costs, the typical American would be earning $77,000 a year. But in reality, it’s nowhere near that.
In 2008 — the latest data available — the median income was $33,000. That means if you adjust for inflation, Americans in the middle actually earned $400 less than they did in 1988.
“Nothing problem here”,
Nothing=No
“The crux of the problem: Tuition and fees at public universities, according to the College Board, have surged almost 130% over the last 20 years — while middle class incomes have stagnated.”
That has happened in the Centennial State due in large part to funding cut backs. It has been predicted that unless things pick up soon (which we all know they won’t) that there will soon be zero funding available to our State U’s, Colleges and CCs in Colorado. Given that most schools are only getting about 3K per student now, we are almost there. Surprisingly, even without state funding the state schools will still be far cheaper than local provate colleges. Colorado State U is toying with the idea of privatizing.
In 2008 — the latest data available — the median income was $33,000. That means if you adjust for inflation, Americans in the middle actually earned $400 less than they did in 1988.
But…..How can that be with all of American worker’s pay raise “bargaining clout” I keep hearing about on this board?
The CEO of GE once said he could see no reason to hire a single
American when the same job could be done overseas at a fraction of the rate.
Yep. Marie Antoinette didn’t get it either.
Wait until GE is purchased by China and his sorry A## is fired.
More proof that these guys think nothing of the country that made them.
…as I was saying the other day.
Another good find wmbz.
“employers can’t find workers with the advanced manufacturing skills they need”
This line made me throw up. This is like a sports honcho from a country not having any school & college athletic programs saying “Our Olympic team can’t find athletes who will win us gold medals”.
The fact is that the foundation or base of manufacturing has been gouged out in the US. This base is exactly where employees get the bulk of their training. How would you find workers with advanced manufacturing skills, when there is no factory that even uses workers with basic manufacturing skills?
The issue isn’t about education, in my opinion. Education teaches theory, and maybe some practice. But expertise comes from experience, experience comes from doing the same thing over and over again, experience comes from opportunity, experience in this case comes from employment.
Skills are like a pyramid. If you want 10 people at the top of the skills pyramid, you need a 1000 people at the base. The base has been destroyed (largely by businesses such as GE, I may add), and now you are wondering why you can’t find those super 10?
At least, that’s my opinion based on working as an engineer in an industry (albeit a different one).
U.S. workers need more training - GE chief
By CNNMoney staff @CNNMoney June 13, 2011: 7:22 AM ET
NEW YORK (CNNMoney) — Training Americans for practical jobs that the nation actually needs should be a government priority, according to General Electric CEO Jeff Immelt, who heads President Obama’s jobs advisory panel.
“There are more than two million open jobs in the U.S., in part because employers can’t find workers with the advanced manufacturing skills they need,” wrote the GE (GE, Fortune 500) chief, in an op-ed piece co-authored with American Express (AXP, Fortune 500) Chief Executive Ken Chenault that was published in Monday’s Wall Street Journal.
“The private sector must quickly form partnerships with community colleges, vocational schools and others to match career training with real-world hiring needs,” they said.
“The private sector must quickly form partnerships with community colleges”
Too bad their funding is being gutted as the right wing cheers.
Of course, if the wages were high enough, there wouldn’t be any problems.
Not true. What you need to grow expertise is a substrate, which is a body of individuals of varying degrees of competence gaining experience. You can’t get a super speciality brain surgeon unless you have a medical system in place with general physicians, regular surgeons, nurses, etc in place no matter how much you are willing to pay. Without a supporting ecosystem, you aren’t going to find the stars.
If you are looking for stars, you can’t pay minimum wage. No matter how hard you look you just won’t find anyone.
Nor can you be too picky. There are plenty of people smart enough to very quickly translate what they already know that is close to the employer’s needs into what the employer needs.
Also many of the better job descriptions are trying to combine the work of 3 people into one and requiring highly specialized and extreme niche, skill sets.
Also many of the better job descriptions are trying to combine the work of 3 people into one and requiring highly specialized and extreme niche, skill sets.
That sort of thing’s been going on in my field for, oh, about 15 years.
During the 1990s, I can remember seeing ads for people to do web programming, HTML coding, and Photoshopping. All three skillsets were expected to be at the expert level.
In the real world that thrives beyond these wishful job descriptions, programmers tend to stick to programming. They’re usually not that skilled in graphics software packages like Photoshop.
“Also many of the better job descriptions are trying to combine the work of 3 people into one and requiring highly specialized and extreme niche, skill sets.”
And when they do find the ideal candidate who already has a job, they give him/her a lowball offer and act surprised when its declined and bitch about how there’s “no one to hire”.
One time this happened to me the recruiter got all hissy when I pointed out that it was less than my current salary.
Are you serious? They really did? Holy moly!
I’ve seen this same thing, having been recently contacted by a few (typically female, not that it matters) 20-something recruiters at various tech contracting agencies. Some of the job descriptions that they forward are just hilarious to read due to the number of diverse and typically non-coexistant talent skillsets listed (let’s see, we want an experienced programmer, who knows how to design circuit boards, and is also an expert on IEC EMI/RFI test standards, and can do 3D designing, mechanical packaging, etc etc) and unfortunately the recruiters haven’t the least clue that their position description is virtually impossible to meet.
It’s sad when the people writing technical job descriptions and those recruiting for them only know to look for certain keywords and various other buzzwords and abbreviations on one’s resume.
“In the real world that thrives beyond these wishful job descriptions, programmers tend to stick to programming. They’re usually not that skilled in graphics software packages like Photoshop.”
A lot of programmers also do not have an artistic bone in their body. You could teach them Photoshop to a high level of expertise and they would still produce crappy graphics.
This line made me throw up. This is like a sports honcho from a country not having any school & college athletic programs saying “Our Olympic team can’t find athletes who will win us gold medals”.
FWIW, high school and collegiate athletics is mostly an American thing.
And not a good thing….
I used to think that. But for many poor kids it is their lottery ticket. It gives the physically gifted a route to the middle class.
The government needs to spend more to meet business needs while cutting business taxes, says the executive.
Wages go down, but consumers need to spend, says the executives.
When are people going to realize this doesn’t add up?
Credit Cards to the rescue.
OOPS!
“When are people going to realize this doesn’t add up?”
Right after the food riots.
Many of you don’t remember the riots in the 1960s. I’m talking about the riots, not the war protests.
The riots weren’t just about equal rights, but the poverty that resulted from the lack of those rights and therefore job opportunities and decent wages.
I’ve seen it and studied the cause and that’s why it will take nothing less because the J6P is up against people with money and resources who are hell bent on making him a slave.
Like I’ve said, it’s going to get worse before it gets better. 30 years of strip mining the middle class can’t go on indefinitely.
I could have sworn it read “GE thief”. Just my brain.
Anyway, I say BS. I have hired and trained more than a few people for manufacturing jobs, some of them for fairly high tech products. Reasonably intelligent people learn technical skills pretty fast. I will say that it is not worth it to try to train someone who graduated school without math and comprehension skills, but that is another discussion.
I’ve worked many joe jobs where most of the workers will never be anything more than worker bees. They will be reliable and trustworthy, but will never move very far up the skills ladder.
But within that group are also people who can and will learn very quickly what is required… if only they are given a chance. But those opportunities are a thing of the past for most. Yet, even the few places it still exists, don’t want to give raises for the new skills, so they run the very real risk of the employee jumping ship.
I’m HERE i’m HERE ready and willing….but OhBAHmahs budget cut funding for job training and NYC ran out of funds back in Feb…..maybe some money will come in July
Clipped from Money&Markets: Martin Weiss in the regards tp PMI.
But in the weeks and months that followed, Washington worked overtime to inject trillions of dollars into the housing market and convince the world that the Great American Nightmare — the worst real estate crash of all time — was over.
Many Americans, blinded by their faith in “almighty government,” actually fell for it: The housing market stabilized temporarily. The economy recovered a bit. Stocks rallied sharply. And PMI surged, reaching a peak of $7.10 per share last year.
But that was just the prelude to disaster …
In the ensuing months, all of the government’s housing support programs and all the government’s mortgage subsidy initiatives failed.
Nothing the government did could stop wave after wave of mortgage defaults and foreclosures.
And even the government’s massive injections of money into the mortgage market were unable to prevent PMI from crashing again, closing at a mere $1.12 per share in late trading hours this past Friday.
That’s down a sickening 84% from last year’s high!
If you had invested $10,000 in this dog at that time, you’d now have only $1,577 in your account right now.
An Unimportant Company? No!
PMI has historically been a huge player with a pivotal function in the housing finance industry — insuring mortgages against default. But now …
If big mortgage insurers like PMI go out of business or refuse to write new policies, most lenders will refuse to extend mortgage loans to anyone except those who are rich enough to buy a home for cash and don’t need a mortgage to begin with.
Moreover, PMI is on the frontline of the losing battle against a flood of bad mortgages in virtually every region of the United States.
So if this company is drowning and its stock is sinking to zero, you can be quite certain that many other companies downstream — lenders and banks, builders and realtors, REITs and other financials — are likely to face a similar fate.
Because the repubicans are self-labeled: “TruePurity™” & “TrueFiscalConservatives™” & “TruePathtoProsperity™” …the “vastly over-sold” American housing/commerical real-estate Debacle has had practically no effect on their constituents financial $it-u-ation!
Many Americans, blinded by their faith in “almighty government,” actually fell for it:
This premise is flawed and says something about the writer’s understanding of the issue.
Most Americans did and do not have blind faith in the “almighty government” whereas most Americans had, and many still have, blind faith in the “almighty religion of real-estate”.
“…most lenders will refuse to extend mortgage loans to anyone except those who are rich enough to buy a home for cash and don’t need a mortgage to begin with.”
More scaremongering and/or uninformed writers. Mortgage Insurance is only currently required on mortages with less than 80% LTV. That has always been the case as far as I know. Granted that could change in the future, but if PMI went away tomorrow, only those that don’t have 20% down would be impacted, not all buyers that will use a mortgage to fund part of the purchase of a house.
Interesting article in the WSJ today about the relative taxation of specific salaries in the U.S. and six other countries. It included income tax and social security tax (individual portion), but not sales taxes.
For a $25K salary, the amount kept after taxes was 90.8% in Japan down to 72.6% in Germany. The U.S. was second at 90.6%.
For a $200K salary, the amount kept after taxes was 87.0% in Russia down to 54.1% in Italy. The U.S. was third at 69.9%. Russian workers pay no social security tax but their employers pays a whopping 34%!
Looks like both the high and the low wage earners in the U.S. could stand to pay more taxes.
Article is on page A8 of the 6/13/11 edition.
I can only look at my situation.
Our total tax burden as a share of income was much higher in the early 1990s, when our income relative to the average was much lower. The richer we get, the less we pay in taxes as a percentage of our income.
Basically, the Clinton Administration undid the flatter and fairer tax reform of 1986 by handing out all kinds of special tax deals to the upper middle class itemizers. We benefitted from that.
Provisions were later added to phase out the breaks as incomes rose, but we later benefitted from the Bush tax deferrals (if you think they were cuts wait til we have to pay them back) and earning in excess of the Social Security max.
The tax system has bascially been throwing money at us and taking it from out children. It doesn’t seem to borrow many but it sure bothers me.
Tried living off of 25k lately?
I have friends who are living off a nuclear family income in the range of $20K a year for three of them plus child support for one additional child.
If they weren’t living with her parents and therefore not “paying” rent, I think they would be homeless. By the way, her parents are both elderly and disabled, so they are certainly working for their living space; it just isn’t in money.
You forgot the most important group
The top 0.5% keep about 85% of income, ie a much higher percent than the 200k and up crowd. They like to mix in the 200k and up because that really hides the theft of the top 0.5%.
Water… It always gets back to basics.
Worst Drought in More Than a Century Threatens Texas Oil Boom
(Bloomberg) By Joe Carroll - Jun 13, 2011
The water crisis in Texas, the biggest oil- and gas- producing state in the U.S., highlights a continuing debate in North America and Europe over the impact on water supplies of an oil and gas production technique called hydraulic fracturing. Photographer: Eddie Seal/Bloomberg
The worst Texas drought since record-keeping began 116 years ago may crimp an oil and natural- gas drilling boom as government officials ration water supplies crucial to energy exploration.
In the hardest-hit areas, water-management districts are warning residents and businesses to curtail usage from rivers, lakes and aquifers. The shortage is forcing oil companies to go farther afield to buy water from farmers, irrigation districts and municipalities, said Erasmo Yarrito Jr., the state’s overseer of water supplies from the Rio Grande River.
Concern over water usage is especially acute in southern Texas’s Eagle Ford Shale area because drilling there is more water-intensive than other regions, said Robert Mace, a deputy executive administrator of the Texas Water Development Board.
“It’s pretty dry down here and a lot of oil companies are looking for water,” Mace said.
The water crisis in Texas, the biggest oil- and gas- producing state in the U.S., highlights a continuing debate in North America and Europe over the impact on water supplies of an oil and gas production technique called hydraulic fracturing. Environmental groups are concerned the so-called fracking method may pose a contamination threat, while farmers in arid regions like south Texas face growing competition for scarce water.
The worst Texas drought since record-keeping began 116 years ago
may[let's all hope!] it crimps an oil and natural- gas drilling boom as government officials ration water supplies crucial to energy exploration.heheeeheeeheehaahaaahaaheeehaahaaa… (Hwy50™)
This is the way it is in South Texas-
1) Hey, let build a reservoir so we can have water if it don’t rain.
2) NO TAXES!!!
3) Oh no, we don’t have no water! What can we do?
Repeat every year.
Sounds like a good solution, but the reservoir in central tx where my parents have a place has turned from a lake into a moon crater. Reservoirs only hold water if it rains.
The population boom and golf greens don’t help either. They should be using wind farms to pump water from the sea and to remove the salt.
In El Paso they are reaching the end of fresh underground water and are having to remove the salt.
EL PASO, Texas — A desalination plant officials say is the world’s largest outside a coastal area and is expected to supply this desert city with water for 50 years has opened for business.
The opening of the Kay Bailey Hutchison Desalination Plant, named for Texas’ senior U.S. senator, marked the end of a 15-year project to design, fund and build the plant that eventually will be capable of supplying 27.5 million gallons of drinking water daily.
The El Paso Water Utilities Public Service Board will operate the $87 million plant.
The plant will treat brackish, or salty, water pumped from hundreds of feet below the ground, where the supply was considered worthless before the plant was built. A series of wells and more than two dozen miles of pipeline will connect the plant to the aquifer, which sits under Fort Bliss, the city’s neighboring Army post.
Whoops looks like they are looking at solar
El Paso Water Utilities is moving ahead with plans to make part of its 3-year-old, $91 million desalination plant run on solar power.
If the project gets a green light from the Public Service Board, it would push the overall cost of the plant to nearly $100 million. This proposed upgrade would cost an estimated $8 million.
The PSB, which oversees the utility’s four divisions, voted Wednesday to hire global engineering company URS Corp. as a consultant on the solar project. This is the next step in determining whether the project is feasible.
“We won’t go forward with this unless it makes economic sense,” said board member Richard Schoephoerster.
The project would allow three of the plant’s five treatment tracks to eventually run on solar power. The plant, on Fort Bliss land along Montana Avenue, converts salty groundwater into drinking water. It’s supposed to help secure El Paso’s drinking water supply for decades.
Technical strides in energy are the reason the plant, which opened in 2007, was not solar-equipped to begin with, said a utility executive.
Solar power has seen tremendous advances in the past three years, making it more attractive, said John Balliew, the utility’s vice president of operations and technical support.
Three years ago, it would have cost about 25 cents per kilowatt-hour to generate power using solar technology, he said. Now that is down to about 12 cents per kilowatt-hour.
Wow 12 cents per KWH is less than I pay retail. Imagine what a good deal this will be as coal and oil go up in price.
This is the key measton
8-10 cents a kwh and then retrofit 100 million homes….plenty of work for the next 20 years…
Imagine a car with $1000 of panels in the desert….you’d be talking 1000 miles per gallon
The drought isn’t the half of it. The temps have been hitting record highs as well.
We were seeing 80f day in April. This is unheard of. Normal temps for April are the low 70s, max. 90f in May. Normal temps are 80f. We just had about 7 intermittent days of 100f and are going to have the save this week. We don’t get those temps until late July or August.
It’s bad. Real bad. This is also the 3rd drought in the last 10 years.
Greece just needs to rip the band-aid off and default.
S&P Cuts Greece Rating, Expects Restructuring
By Jennifer Ryan - Jun 13, 2011
Greece had its credit rating cut by three levels to CCC by Standard & Poor’s and the rating company said the nation is “increasingly likely to restructure its debt.”
A restructuring would likely “result in one or more defaults under our criteria,” S&P said in a statement today. “Risks for the implementation of Greece’s EU/IMF borrowing program are rising, given Greece’s increased financing needs and ongoing internal political disagreements surrounding the policy conditions required by Greece’s partners.”
The downgrade comes as the European Central Bank and Germany battle over how to bail out Greece and whether officials should push creditors to share some of the costs. ECB President Jean-Claude Trichet said today that his advice to European governments is to “avoid what would be a compulsory concept” and “avoid whatever would trigger” a default.
The outlook on the rating is negative, S&P said. The rating company held its recovery rating at ‘4,’ indicating it estimates bond holders would recover 30 percent to 50 percent of their investment.
A “financing gap has emerged in part because Greece’s access to market financing in 2012 and possibly beyond, as envisaged in the current official EU/IMF program, is unlikely to materialize,” the report said.
Obama & the Fat Cats: A Love-Hate Story
By Aaron Task | Daily Ticker
President Obama has set an audacious goal to raise $1 billion for his reelection campaign. To raise anywhere near $1 billion, he’ll have to go where the money is: Wall Street.
But after labeling them “fat cats” and criticizing their outsized bonuses, President Obama is going to have to mend a lot of fences. That’s why the Democratic National Committee has begun “an aggressive push by Mr. Obama to win back the allegiance of one of his most vital sources of campaign cash,” The NY Times reports:
“The president’s top financial industry supporters say they are confident that the support Mr. Obama needs will ultimately be there, despite the financial industry’s unhappiness over his efforts to tighten regulation of their businesses. But it is clear that those supporters will have to work much harder to win over the financial services industry than they did in 2008, before Wall Street’s bust, the subsequent clashes over policy and the sometimes bitter personal differences that lingered afterward.”
In other words, Wall Street doesn’t like being called mean names so is taking its (money) ball and going home.
The amazing thing is that Obama’s populist rhetoric has not been matched by his actions vis-a-vis Wall Street. Rather than using the 2008 election as a mandate for real change, the Obama administration continued and extending the Bush administration’s policies of providing bailouts with little or no restrictions, and failed to hold senior executives and bondholders responsible for their actions.
Yet, there are tougher regulations on financial firms now but it’s really a small price to pay for the trillions of dollars of direct and indirect bailouts the industry received — and continues to receive. That’s why it’s so galling to many Americans to hear executives like JPMorgan’s Jamie Dimon complain about onerous regulations, as he did last week in a much-publicized spat with Ben Bernanke.
In a separate but related development, The WSJ reports the President is getting some push-back from more traditional Democratic donors, who — among other things — don’t feel Obama has been tough enough on Wall Street.
In a separate but related development, The WSJ reports the President is getting some push-back from more traditional Democratic donors, who — among other things — don’t feel Obama has been tough enough on Wall Street.
Methinks that a lot of those traditional Demo-donors are going to become a lot more vocal in the coming months.
Here’s the problem
Those other donors are now much much poorer and WS is much much richer. Thus their voice matters much much less.
Catherine Ferguson Academy Closing: Another Casualty in the War on Women ~ Jessica Pieklo ~ care2.com
What happens we we ask our public institutions to “think like a business” or, worse yet, turn over those institutions to the private sector? We lose places like Catherine Ferguson Academy in Detroit. The school boasts a 97 percent attendance rate with a 90 percent graduation rate. Impressive numbers for any school, but especially impressive since the students are all pregnant and mothering teens.
One of only four other programs in the nation, Catherine Ferguson Academy provides daycare and kindergarten inside the school while mothers attend classes. The school is also a working farm where students are trained in animal care, entrepreneurship and farming. Young mothers finish their education, prepare for college and learn employable trade skills while their children start early education as well. Catherine Ferguson Academy was serious about lifting these young women out of poverty and helping them develop the skills necessary to succeed independently and it was working.
But the Detroit Public School system is now run by an emergency financial manager who will close Catherine Ferguson Academy June 17th.
According to Principal Asenath Andrews, the reasons for closing the school were cost and a declining student population, despite the fact that the school serves over 300 students. And those students are dedicated. In April they organized a sit-in to protest the possible closing of their school and rallied the community behind them.
Now those students who had been tracked for beating the odds will instead be transfered into their neighborhood schools and be left to their own devices to find child care and/or schooling for their own children.
It’s possible this decision just derailed two generations of young poor urban mothers which a cynical person may tell you was exactly the point. The emergency manager was appointed because of the financial problems of the entire district, not a handful of schools, and there certainly are examples of schools failing students in Detroit.
Can’t they go to school with the rest of the kids?
It’s not really a stigma to be pregnant in school like it was in the 90’s.
In this day, they should set up an online school for young mothers. My youngest daughter is doing college this way, and she can care for her child at home. Sure, it’s not as great as the social experience (not that I liked HS all that much) but it would be practically free for the city.
I’ve worked on a subcontractor basis with a number of people who work from home. Most of them have been women. Right now, one of my best subs is a new mother, and she tends to my projects during the nighttime hours when the baby is asleep.
You need a computer, a good internet connection, and a quiet space to do school work from home.
Laptops are now less than $300. Give them a laptop. OK, if they are homeless, not such a great strategy.
What about the philanthropic or non-profit groups? Can they not take up this issue and see to it that the school continues, even if they want to add specific educational goals? Bill & Melinda Gates anyone?
Berkowitz Leads Stock Pickers Hitting Bottom
By Charles Stein - Jun 13, 2011
(Bloomberg) — Bruce Berkowitz, Kenneth Heebner and Bill Miller, three of the best-known U.S. stock pickers, are competing for last place this year after their bets on an economic expansion backfired. Funds run by Berkowitz of Fairholme Capital Management LLC, Heebner of Capital Growth Management LP and Miller of Legg Mason Inc. are the three worst performers among large diversified U.S. mutual funds in 2011, according to data from Chicago-based Morningstar Inc.
Funds run by Berkowitz of Fairholme Capital Management LLC, Heebner of Capital Growth Management LP and Miller of Legg Mason Inc. (LM) are the three worst performers among large diversified U.S. mutual funds in 2011, according to data from Chicago-based Morningstar Inc. The funds lost 11 percent to 12 percent through June 9, compared with a gain of 3.4 percent for the Standard & Poor’s 500 Index.
“People assume because certain managers have had good streaks that they are always going to be a step ahead of the market,” Russel Kinnel, director of mutual fund research at Morningstar, said in a telephone interview. “It never works out that way.”
The three managers are known for concentrating money in a small number of industries, said Kinnel, a strategy that can produce market-beating gains when the investments work out and large losses when they fail. Berkowitz, Morningstar’s fund manager of the decade, and Miller, known for beating the S&P 500 for 15 straight years through 2005, are wagering on a rebound in financial stocks. Heebner, manager of the best-performing diversified U.S. stock fund over a 10-year period until this year, was betting on automakers.
The two industries are the worst performers this year in the S&P 500 out of 24 groups. Bank stocks, as measured by the KBW Bank Index (BKX), fell 10 percent on concerns that the housing slump, litigation over mortgage bonds and foreclosures and new fee-crimping rules will depress bank earnings.
Betting on Banks
Berkowitz’s $14.8 billion Fairholme Fund had 74 percent of its equity holdings in financial stocks as of Feb 28, Morningstar data show. The fund fell 12 percent through June 9, ranking it last among 870 diversified U.S. stock funds with at least $500 million in assets.
Berkowitz didn’t respond to a request for comment. In a June 9 interview, Berkowitz said he was “more certain” than ever that his investments in financials made sense.
“The trends are getting better,” he said in the interview with Bloomberg Television’s Erik Schatzker. “The balance sheets are getting better and the cash flow is there to take care of the problems.”
Berkowitz said Brian Moynihan, chief executive officer of Bank of America, was doing “a good job” and that the bank “was making all the right moves.” Bank of America, based in Charlotte, North Carolina, fell 19 percent this year, including dividends.
Hwy never eats at a sandwich shop that is next to a veterinarian/morgue/pest-control “bidness”:
(The square burger place with baked potatoes & chili paid for the family vacation last year.)
ITS NAME: The firm is named for Howard Roark, the protagonist in Ayn Rand’s free-market manifesto “The Fountainhead.”
Associated Press
Arby’s buyer is no stranger to restaurants
By The Associated Press, 06.13.11
THE BUYER: Roark Capital Group, an Atlanta-based private equity firm.
THE DEAL: Roark announced Monday that it plans to buy a majority stake in fast-food chain Arby’s for about $130 million from Wendy’s
ITS PROFILE: Roark largely focuses its investments on restaurants, specialty retail, waste management, and marketing services. It already owns McAlister’s Deli, Moe’s Southwest Grill, Carvel Ice Cream, Cinnabon and the Schlotzsky’s sandwich chain, as well as other companies including FastSigns and Batteries Plus. Last year it added Wingstop Restaurants, Bosley’s Pet Food Plus, Auntie Anne’s soft pretzels and Atkins Nutritional Holdings, the company behind the low-carb Atkins diet products, to its portfolio. Monday, it announced plans to buy the bakery restaurant company Il Fornaio (America) Corp.
ITS STRATEGY: Roark focuses on companies with revenue of $20 million to $1 billion. It often invests when a company decides to go private, when a family decides to sell a business, or when corporations sell a unit.
There was a Chinese restaurant here in Boise that shared a building with a vet clinic. I never ate there…..
Why Investing in Rentals Could Be a Good Move
by Amy Hoak June 13, 2011 MarketWatch
As home prices fall and rents rise, some investors are plunking their money into real estate, chasing the cash flow that comes along with becoming a landlord.
“For the first time in a long time, you can buy that home and can get a cash-on-cash return immediately,” said William King, director of valuation services for Veros Real Estate Solutions, a supplier of housing data to the country’s largest banks, as well as government organizations. “There are a lot of places in the country where an investor can buy a single-family home, rent it, and get a positive cash flow.”
In fact, investors bought 20% of all the homes sold in April, according to the National Association of Realtors. Some of them are buying with cash.
But even if they do finance part of the purchase, they’re able to turn around a profit much quicker than they would have been able to in the past, King said. And the return on rentals can be much better than returns on other investments these days, he added.
In the past, investors would subsidize their monthly payments on a property with the rent they were able to collect, and the big payoff was the price appreciation he or she would accumulate, he said. Now, investors can come in with a 25% or 30% down payment, finance the rest, and the rent they collect often can cover the mortgage payment, taxes and insurance — with additional cash left over, he said.
“Investors are looking at these properties on a monthly income generating basis,” said Alex Villacorta, director of research & analytics at Clear Capital, a firm that provides data for real-estate asset valuation and risk assessment to financial services companies. “They can start to realize instant profit margins, even as the market goes down more.”
“There’s a turning point where the cost of owning a home is less than the cost of renting,” he said. “When that disparity grows … we will see a push from investors to pick up investment properties.”
Nowhere in this story do we see any mention of purchase price of the house vs. the monthly rent you can expect to collect.
ISTR that you should aim for a purchase price that ranges from 100 to 120 times the monthly rent that the market will bear.
WSJ had an article about how big office buildings downtown are being put on the auction block due to an 88% increase in price??.
The entire section was a real estate puff piece.
They mentioned who all the sellers were but not who the buyers were.
It’s been said repeatedly, but if their house prices were still on the rise then these folks would be crowing about what savvy investors they were.
On Helens Pouroff Ave., escaping falling home prices
By Julie Schmit, USA TODAY
NORTH LAS VEGAS — Dayna and Scott Merritt ask themselves almost every day if they should keep paying their mortgage.
Many other residents on their street, Helens Pouroff Avenue, stopped long ago. Since the 69 new homes on this street were sold in 2006, almost half the owners have defaulted on their mortgages. Most of the houses went into foreclosure, which helped drive prices down for others on the street.
The Merritts’ house has suffered a typical fate. The couple paid $385,000 for it in 2006. It’s now worth about $180,000, recent sales indicate, and Las Vegas prices are still falling.
The Merritts are torn between continuing to sink money into a house that may never regain its value or finding a way out. They have plenty of company. About 11 million U.S. homeowners are underwater on their mortgages, meaning they owe more on them than their homes are worth. Of those, 2 million are so deeply underwater that market researcher CoreLogic predicts their homes will go into foreclosure or distressed sales.
The risk that more of those homeowners will default threatens housing markets nationwide, says CoreLogic economist Sam Khater. What’s happened here does little to quell those fears.
Five years after the carnage began, those who walked from their Helens Pouroff homes say they’re recovering from financial ruin. Several say they’re considering buying homes again. But those still here have only seen values erode further. One by one, more consider an escape, which could mean walking away from their mortgage.
“We’ve stuck it out. But there’s been no ‘attaboy,’” says Dayna Merritt, 43, a substitute teacher. “We’re paying on something that seems like it won’t work out for us.”
The threat of defaults driven by continued home price declines — and a sputtering U.S. economy — is particularly acute in Las Vegas, the foreclosure capital of the U.S. for more than four years.
Here, 66% of homeowners with a mortgage are underwater, compared with 23% nationwide. Almost one in four Nevadans who lost homes to foreclosure admitted in a survey that they walked away from their mortgages even though they could afford to pay, according to the Nevada Association of Realtors.
If you have to ask yourself everyday if something is worth it, then the answer is obvious.
It isn’t worth it.
Boy, the PPT wants to get stocks back up above the Eddie line before the serfs start getting nervous.
Beazer Homes CEO is outsted
By Kirsten Valle Pittman and Rick Rothacker
kpittman@charlotteobserver.com Monday, Jun. 13, 2011
Beazer Homes USA Inc.’s chief executive, who led the builder through the housing market’s collapse, a federal investigation into Beazer’s lending practices and a settlement with regulators over accounting issues, has left the company.
Beazer’s board of directors ousted Ian McCarthy on Friday, company spokeswoman Carey Phelps said today. Chief Financial Officer Allan Merrill learned Friday night he would replace the outgoing CEO, she said.
“The changes that were made were purely a decision by the board as they look toward the future,” Phelps said. “This decision is about the future and returning value to our shareholders.”
The departure, which the company announced this morning, comes about three months after McCarthy reached a settlement with the Securities and Exchange Commission to return $6.5 million in bonuses and stock proceeds he reaped while his company was allegedly committing accounting fraud.
McCarthy was not charged with any misconduct and has neither admitted nor denied the SEC’s allegations, but he was required to return the compensation under the Sarbanes-Oxley corporate governance law.
The SEC had previously brought enforcement actions against Beazer and its former chief accounting officer, who engineered a scheme to inflate the company’s earnings, according to the complaint. Those actions and other investigations followed a 2007 Observer series that found that Beazer, then a major Charlotte-area homebuilder, arranged larger loans than some customers could afford and violated federal lending rules.
“…but he was required to return the compensation under the Sarbanes-Oxley corporate governance law.”
Well that’s something at least.
Thought I’d share some anecdotal information about the Phoenix market. Friend who already moved was planning on renting his old house out. After about a week he decided he didn’t want to deal with that and decided to sell it instead. Comps pretty clearly supported a price between $250k and $270k, but the realtor insisted it was worth more and suggested $325k. Friend went along with that price as long as it was reduced every couple weeks until it sold.
Long story short, received an all cash offer for $260k after less than a week on the market. Countered at $305k and the buyer countered back at $260k. My friend ended up accepting $260k and he is in escrow now.
As far as I can tell, that has been the story in Phoenix. The market is clearing at reasonable prices. His house would have gone for over $600k at the peak. After dropping about 60%, prices have been basically flat for the past 2 years other than a slight bounce around this time last year. Supply doesn’t appear to be overwhelming demand yet, but will be interesting to see if that lasts through the end of the year.
“Comps pretty clearly supported a price between $250k and $270k…My friend ended up accepting $260k and he is in escrow now.”
He nailed it. Seems like the Realtor™ was clueless, though.
Sounded like a combination of cluelessness and optimism. Probably more of the latter, but definitely some of the former as well. Wanted to use some outlier comps that I doubt were arms length transactions. In any case, I’ll never understand why a realtor would try to talk a seller out of a lower price. It’s possible he’s just honest and truly wanted to get the highest price he could for my friend, but it always throws me for a loop when people don’t look out for their own best interests in a business transaction. I’m most comfortable when I can see exactly how I’m getting screwed.
No need for a gasoline powered weed eater, when you can use a water powered one…
Pa. school district turns lawn care over to sheep
AP – Mon Jun 13
CARLISLE, Pa. – A central Pennsylvania school has a woolly plan to keep its grass neatly trimmed.
The Carlisle Area School District says it can save up to $15,000 a year by turning over some landscaping chores to sheep.
The Patriot-News of Harrisburg reports the district is using the sheep to keep the grass near its solar panels neatly trimmed. The sheep nibble grass in the morning and take refuge in the shade of the panels in the afternoon.
With the food already on hand, the district need only supply the sheep with water.
A middle school assistant principal is providing the sheep. Eric Sands says he’s still trying to figure out exactly how many sheep he needs to use to keep the area clear.
The hill behind our house was trimmed by goats last year and I hope that they do it again. The difference between the noise of mowing machines and goats “neah-ing” is remarkable. Beautiful near silence. Just wish that we could get some of the dairy product at the end. [And somehow convince people to walk or bike to the donut shop, bakery, church etc. if only on Sundays. I just imagine how wonderfully quiet it could be.]
“The Carlisle Area School District says it can save up to $15,000 a year by turning over some landscaping chores to sheep.”
Will the sheep count as jobs added in the payroll numbers?
“Eric Sands says he’s still trying to figure out exactly how many sheep he needs to use to keep the area clear.”
He should sleep good tonight.
Obama Unveils Plan to Train U.S. Engineers
June 13, 2011 | FoxNews.com
President Obama, in what he described as an “all-hands-on-deck strategy” to boost the economy, announced a new program Monday aimed at training 10,000 new American engineers every year.
The engineering announcement was one of several touted by the president during a visit Monday to North Carolina, where he toured a plant of energy-efficient lighting manufacturer Cree, Inc., and met with his jobs council to discuss the new initiatives.
Last week, the president announced a new training program in the manufacturing sector. The program he unveiled Monday would try to ensure U.S. engineering students have the skills to qualify for openings that companies sometimes struggle to fill.
“We’re falling behind in the very fields we know are going to be our future. … We must do better than that,” Obama said.
Under the program, Obama said private companies will join the government to promote education in science, technology, engineering and math. They’ll offer incentives to students to finish their degrees and help universities pay for their engineering programs.
You want to “promote education in science, technology, engineering and math.”?
Pay decent wages. Money talks, bull…. walks.
Much of politics is theater.
AP survey: Economists warn against more Fed action
Economists in AP survey say time, not more action by the Fed, is best prescription
WASHINGTON (AP) — The best cure for the economy now is time.
That’s the overwhelming opinion of leading economists in a new Associated Press survey. They say the Federal Reserve shouldn’t bother trying to stimulate the economy — and could actually do damage if it did.
The economists are lowering their forecasts for job creation and economic growth for the rest of this year, mainly because of high oil prices. A batch of bleak data over the past month has suggested that the 2-year-old economic recovery is slowing.
The economists now expect the nation to create 1.9 million jobs this year, about 200,000 fewer than when they were last surveyed eight weeks ago. They expect the unemployment rate, now 9.1 percent, to be 8.7 percent at year’s end. Before, they expected 8.4 percent.
Despite their gloomier outlook, 36 of the 38 economists surveyed oppose any further efforts by the Fed to invigorate growth. The Fed has already cut short-term interest rates to near zero. And it’s ending a program to buy $600 billion in Treasury bonds to keep longer-term rates low to help spur spending and hiring.
The economists say another round of bond-buying wouldn’t provide much benefit, if any. And some fear it could make things worse by unleashing high inflation and disrupting financial markets.
When it buys bonds, the Fed in effect prints massive amounts of money. All that extra money in the system raises the nominal value of the things we buy, weakening the dollar, and it can create bubbles in the prices of stocks and commodities.
What the economy needs most, says John Silvia, chief economist at Wells Fargo, is time. Consumers must further shrink huge debts amassed in the mid-2000s. And the depressed housing market needs time to recover from a collapse in prices and sales.
“There are no magic bullets,” Silvia says. “A lot of this stuff just really needs to be dealt with. It’s not a question of stimulus.”
“The economists are lowering their forecasts for job creation and economic growth for the rest of this year, mainly because of high oil prices.”
Once again, we see that “economists” are clueless dolts. There is no job creation because they are still being given tax breaks to be sent offshore.
~ Looks like we need many more with out a degree, the smart set has been doing a lousy job.
Report: No college degree for 25% of state legislators
By Catalina Camia, USA TODAY
Does a college education matter if you’re a state legislator?
The Chronicle of Higher Education reports that about 25% of the nation’s nearly 7,400 state legislators do not have a bachelor’s degree or higher.
The least-educated statehouse appears to be in Arkansas, where 25% of the 135 state representatives and state senators did not attend any college. That compares with 9% nationwide among all state legislators, the paper reports. In all, slightly more than 60% of Arkansas’ state lawmakers earned a bachelor’s degree or higher.
California came out tops in the newspaper’s survey, with nearly 90% of the Golden State’s 120 legislators having earned a bachelor’s degree or higher. Four percent of California lawmakers did not attend college.
At the beginning of year, 92% of the U.S. House and 99% of the U.S. Senate had a college degree, according to the Congressional Research Service.
The Chronicle analyzed data from Project Vote Smart, a non-partisan research group that relies on self reporting from legislators, through biographical surveys or campaign literature.
“Legislators aren’t only supposed to represent the white-collar works of the world,” Adam Brown, a political scientist at Brigham Young University told The Chronicle. “They need to represent everybody. Bearing in mind how many voters lack higher education, I’m not sure that a legislature could fair represent a state’s diversity if it didn’t include people from diverse educational, economic, racial, religious and vocational backgrounds.”
He’s not sure?
Hey Adam, ever heard “current events?”
I would guess that California is high due to the almost free college education that was available there when I was in college.
Thanks to egdewaterjohn, AZSlim and others for the advice about my non-housing related, rear-wheel spoke breakage problem. The wheel guy is rebuilding the wheel with DT Swiss spokes today and adjusting the tension, true-ing, etc.
The 28 spokes on the Bianchi held up on the 20 miles this morning and those few days last week, so I’m still rolling (heavy).
MrBubble
http://www.theatlantic.com/business/archive/2011/06/11-graphs-that-completely-explain-the-housing-crisis/240362/
This is interesting.
Good find.
SPRINGFIELD, Ill. (AP) - Illinois is so hard up for money that it’s studying the possibility of selling ads on state license plates.
The idea is to offer special corporate-sponsored plates. Drivers would get a discount on the price, and businesses would put their logos on the plates.
Lawmakers voted last month to have the secretary of state study the pros and cons of corporate plates. The study is supposed to be finished by Jan. 1
Texas already allows corporate plates, which are produced by a firm called My Plates. Spokeswoman Kim Drummond says they’re like “little billboards” spreading a company’s messages across the state.
Sen. John Mulroe of Chicago says he hopes the corporate plates will bring Illinois more money without raising taxes.
Our plates here in S.C. have “travel2sc.com” on the bottom of the tag. I just stick a piece of electrical tape over it. I am not advertizing for anyone, besides who the heck spends anytime looking at tags for advertizement?
Dreading the bottom of the barrel IMO.
Here they come to save the day… the Chinese are on the way…
Chinese Launch Global Homebuying Spree
By Kelvin Wong, Nichola Saminather and Hui-yong Yu - Jun 13, 2011
In the U.S., Chinese buyers have helped support home sales and prices in Silicon Valley and Hawaii, while they are an increasing presence in Las Vegas and New York, according to local brokers.
On a sunny Saturday in early June, Larry Zhou strolled the floor of a property exhibition in Hong Kong, wondering whether it was time to buy another home — not in the city, where residential prices have soared 50 percent in the past two years, but maybe in Thailand or Malaysia.
“My wife and I have been thinking about investing outside of the country since we already own an apartment in Shanghai,” Zhou, a 38-year-old civil engineer, said in an interview at the Hong Kong Convention & Exhibition Centre before wrapping up a business trip and returning home. “I’ve known people in Shanghai who like to bring their money and invest in Hong Kong properties, but I think Hong Kong is way too expensive.”
The two-day event that lured Zhou and 3,000 others is one way that China’s blossoming wealthy and middle classes are finding investment properties and second homes around the world — exporting a real estate boom that has driven up prices 26 percent in Shanghai last year and 28 percent in Beijing, and bolstering markets around the world. In cities with established Chinese populations, like Sydney, Singapore, and San Francisco, Asians on homebuying tours meet brokers such as Betty Chan, who markets herself on her website as “Las Vegas’ #1 Chinese Lady Real Estate Broker.”
Investors are grabbing everything from $68,000 foreclosed condominiums in Florida to $2 million beachfront villas in Vietnam, a buying spree fueled by China’s surging wealth that mirrors the country’s expanding influence in markets for gold, oil and food. The search for overseas property accelerated in the past seven months as the governments in Hong Kong and Beijing imposed purchasing and financing limits, steps that are starting to cool off domestic markets.
Famous Authors’ Homes for Sale
http://www.foxnews.com/leisure/2011/06/10/famous-authors-homes-for-sale/
http://market-ticker.org/akcs-www?post=188061
MERS gets hit hard in NY - time for the banksters to up their campaign contributions.
Well at least the DOW finished green today! Go big money!
Extend and pretend article:
http://www.thestreet.com/story/11151311/2/banks-300-billion-pretend-problem.html
Airlines collected $5.7 billion in fees for checking bags, changing reservations last year
NEW YORK (AP) — Passengers hate them, but airlines can’t afford to give them up — those aggravating bag fees. U.S. airlines collected $3.4 billion for checked luggage last year, according to a government report issued Monday. That’s up 24 percent from 2009 and a big reason the industry made money again after three years of losses.
In 2010, the major airlines made a combined $2.6 billion in profits, less than they collected in bag fees. The fees — typically $50 round-trip for the first piece of checked luggage and $70 for the second — allow the industry to navigate between rising fuel costs and customers who expect rock-bottom airfares.
“If it weren’t for the fees, the airlines would most likely be losing money,” said Jim Corridore, airline analyst with Standard & Poor’s.
That’s little comfort to fliers who have increasingly felt nickel-and-dimed by the airlines and now face a summer of higher airfares and packed planes.
“I feel like I am constantly being hit by little things by the airlines,” said Lauren DiMarco, a stay-at-home mother from Wenham, Mass. “We’re already paying so much money.”
“I feel like I am constantly being hit by little things by the airlines,” said Lauren DiMarco, a stay-at-home mother from Wenham, Mass. “We’re already paying so much money.”
Hmmmm, my mother was a stay-at-home until I was in junior high school. And we rarely took airplane trips as a family.
If we went anywhere, it was by car, and trust me, my folks were into little economy cars long before they were cool. So, it got a bit cramped in the car during long trips.
Especially if our two dachshunds decided to get into a scrap over who would sit in the front passenger’s lap. If you were the unlucky soul cradling the dachshund who was playing defense in the front seat, your lap lost. Bigtime.
Other than buying gold and ammo, what should one do to hedge the risk of sovereign default?
The Financial Times
Public fears over default on the rise
By Ralph Atkins in Frankfurt
Published: June 13 2011 19:33 | Last updated: June 13 2011 19:33
Public concerns about government debt defaults have increased significantly over the past year in the US, Britain and even Germany, according to an opinion poll that highlights widespread pessimism about the stability of national finances.
Fifty-four per cent of those surveyed in the US and 42 per cent in the UK thought it likely their country would default in the next decade, a Financial Times/Harris poll showed.
Levels of anxiety were clearly higher than a year ago, when the question was last asked, reflecting the pressure on those countries’ public finances as well as worries about the crisis in Greece.
In Germany, which is among Europe’s most fiscally prudent countries, 31 per cent of those surveyed thought it likely their government would be unable to repay money borrowed in financial markets – up from 28 per cent a year ago.
…
I saw this on Wikipedia - debt in trillions of dollars contrasted with debt as a percent of GDP: http://en.wikipedia.org/wiki/File:US_Debt_Trend.svg
I call some shenanigans, because while the rest of the chart moves somewhat in concert, debt skyrockets in the last period, but as a percent of GDP, it doesn’t change much. I don’t think we’ve had much GDP growth recently.
But it underscores the point that the policy makers are hanging onto for dear life: while the debt has not dropped an actual penny since WWII, it is eminently more sustainable/serviceable when it drops as a percentage of GDP.
But the problem is, we’ve added so much debt, and a direct result of which will likely be limited GDP growth for some time (as the consumer tries to pay down his debt). The question becomes what is the maximum debt:GDP ratio that the economy can sustain?
If the past 65 years are any indicator, there’s little chance of every actually lowering the debt in absolute terms. While in theory it’s attractive, neither the people nor the politicians are willing to make the sacrifices necessary to do so. Especially when the sacrifice would be so uneven, with those who caused the problems continuing to make huge profits while the rest of population suffers.
I wonder what the unsustainable debt:GDP ratio is.
I don’t think we’ve had much GDP growth recently.
government spending is counted in GDP growth, no? So the debt and GDP should be moving in lockstep…
For all the haters…there are unsaturated industries where employees have pricing power.
http://online.wsj.com/article/SB130650430883419575.html?mod=wsj_share_twitter
For all the haters…there are unsaturated industries where employees have pricing power.
Here you go again drumminj with you trying to equate a tiny minority’s situation with the situation of the majority.
Your faulty “proof” applies to a very few specialized, top of their game high-tech engineers.
Your example in no way reflects the pricing power of the average American worker today.
Like a ride from the crest of the San Gabriels all the way down to the LA coastal plane below, it is amazing how far down from the peak SoCal housing prices can decline before a bottom is reached.
SoCal housing market sputters in May
June 13, 2011 | 9:38 am
Southern California’s housing market weakened in May, with sales and prices dropping in all of the region’s counties, providing further evidence of a weak spring shopping season.
Sales fell 17.4% from the same month a year ago, with a total of 18,394 newly built and previously owned homes sold in the region last month, according to San Diego real estate research firm DataQuick. That sales tally was a three-year low for the month. The drop was particularly pronounced because a popular tax credit for buyers that had been fueling sales expired during the same period last year.
The region’s median home price fell 8.2% from the same month a year earlier to $280,000. It was the largest amount the median has fallen in 20 months. Lingering economic uncertainties have left the market soft ever since the expiration of the tax credits.
– Alejandro Lazo
If this guy doesn’t take better care of himself, he may not even survive long enough to see his next rapture prediction fail.
How any human can be sufficiently dumb to buy into the kind of hogwash this guy spews is a perpetual mystery to me.
Failed ‘Rapture’ predictor Harold Camping recovering from stroke
June 13, 2011 | 11:02 am
Family Radio Network minister Harold Camping, who inaccurately predicted the “Rapture,” is resting in a hospital after having a mild stroke, a spokeswoman said Monday.
Camping, 89, fell ill late Thursday at home and was admitted to a hospital, said the woman, who declined to give her name.
“He is recuperating and doctors are pleased with his progress,” she said.
Camping gained worldwide notoriety for predicting the world would come to an end May 21.
…