July 31, 2011

Bits Bucket for July 31, 2011

Post off-topic ideas, links, and Craigslist finds here.




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287 Comments »

Comment by alpha-sloth
2011-07-31 04:40:57

Seeking to avoid government default? There’s a coin for that:

The 5 Trillion Dollar Coin
Slate

One option is coin seigniorage—aka, the “really-huge-coin workaround.” The United States has a statutory limit on the amount of paper money in circulation, but no such limit on coins. The Treasury secretary has the authority to mint certain coins of any denomination, with no need for the value of the metal to equal the value of the coin. (It gets a bit technical.) But the idea is that Secretary Timothy Geithner could order the Mint to make a, say, $5 trillion coin. It could then use the coin to buy back and extinguish debt from the Fed, pushing the country back under the ceiling. Or it could deposit it, and the Fed could counteract the inflation by selling government debt.

Comment by alpha-sloth
2011-07-31 04:46:38

Or there’s our old friend the overdraft. (I hope there are no hidden charges):

[Another] possibility is the “overdraft option,” proposed by CNBC’s John Carney: The Fed could just let Treasury overdraw its checking account. It would work like this. When you deposit a government check, your bank does not submit it to the Treasury for payment. It submits it to the Federal Reserve, where the Treasury keeps its current account. The Fed could allow overdrafts.
-Slate

Comment by alpha-sloth
Comment by CharlieTango
2011-07-31 05:59:48

extend and pretend

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Comment by Professor Bear
2011-07-31 08:14:55

Why incur the cost of physically minting a coin? Simply show a $5t book entry on a computer at the Fed, call it QE3, and use it to distinguish the debt.

What could be simpler?

Comment by X-GSfixr
2011-07-31 08:31:16

But think how cool a 5 trillion dollar coin would be.

Especially if they let me design it.

They could put it on display, and sell tickets.

Comment by Ol'Bubba
2011-07-31 10:52:38

X-GSfixr- please be sure to work an image of the Candy Crapping Unicorn into the design of the coin.

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Comment by pdmseatac
2011-07-31 13:34:32

To get an idea of just how cool it will be, look for an image of the Zimbabwe $100,000,000,000,000 bill, compliments of Berspanky’s good pal and colleague Gideon Gono. There is a rumor that the Fed is trying to hire Gono as one of the board of governors due to his past experience in QE.

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Comment by Prime_Is_Contained
2011-07-31 15:06:15

OMG, you weren’t kidding about that Zimbabwe $100T denomination!

Whoa!

 
Comment by ahansen
2011-07-31 20:33:10

I have a picture of myself handing a TeaPary Congressman a 5T Zimbabwe note. He’s smiling in it, too– the irony having totally escaped him….

 
Comment by The_Overdog
2011-07-31 20:55:14

Did you get him to autograph it as well:
something like 2020: This will buy some baseball card bubblegum. Thanks Tea Party!

 
Comment by nickpapageorgio
2011-07-31 22:32:40

Wow…Off the reservation. The tea party movement will cause hyper inflation…Now I have heard it all.

 
 
 
Comment by alpha-sloth
2011-07-31 08:34:02

“Why incur the cost of physically minting a coin”

Because it would look cool?

I guess the $5t book entry at the Fed would violate the statutory limit on the money supply, whereas the coin would be protected by the Treasurer’s authority to mint coins in any denomination.

“use it to distinguish the debt.”

Interesting expression. :wink:

Comment by Professor Bear
2011-07-31 08:47:35

“…statutory limit on the money supply…”

Was the $16t (or whatever the actual amount was) the Fed loaned at discriminatory, below-market interest rates to banks all around the globe in the Fall 2008 bailout within the statutory limit on the money supply?

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Comment by alpha-sloth
2011-07-31 09:36:16

It doesn’t count when they’re bailing out the rich?

 
Comment by alpha-sloth
2011-07-31 15:21:19

Maybe if the Fed loans it to foreign entities, or domestic private entities, it doesn’t count as government spending, and therefore doesn’t count against the debt ceiling.

 
 
 
 
 
Comment by alpha-sloth
2011-07-31 05:16:06

Tooot! You guys know I hate to (Toooot!) toot my own horn, but (Tooot!) Oh, excuse me. Must be those scones I ate for breakfast (Toot!). But anyway (Toot!) there’s this:

Owooga!

Housing Bubble Predictions: Second Half of 2011

Comment by alpha-sloth
2011-07-02 15:02:48

I predict that it will be revealed that there wasn’t a proper legal chain of ownership in the MERS system, and the robo-signing fraud wasn’t a result of the banks cutting corners because they were cheap and/or overwhelmed, but was because they simply didn’t have the proper documentation without faking it, and no one at the higher levels wanted to sign their names to the fraud.
____

Posted last night by the industrious Professor Bear:

NEW YORK, July 18 (Reuters) - Why have sketchy mortgage procedures been so difficult to root out? Some lawyers blame misguided efforts to cut costs. Most foreclosures are uncontested, they note. And so servicers save money by avoiding costly searches for missing original documents or hiring additional staff to deal with the surge in foreclosures.

There are signs, however, that servicers resort to doubtful documents because they have no choice if they are determined to foreclose: To a great extent, originals simply don’t exist.

Comment by Ben Jones
2011-07-31 05:49:36

I’ll explain something again: when it comes to title, RE law has been established to handle any and all circumstances. This includes wars where all records have been destroyed, no one involved is alive any more, you name it. The reason for this has always been clear; clouded title isn’t good for anyone, so the law will make a decision.

If you look at any one of these cases, chances are you can see someone was loaned money with RE as collateral, and they stopped making payments. The law is not likely to award this person title. This borrower probably isn’t interested in paying back bubble loans, as ‘most foreclosures are uncontested.’ This means the foreclosure will go forward after the paperwork is sorted out.

The media and some here would have us believe there is some sort of poetic justice going on, where little old lady’s are having “their” houses wrested back from evil wall street banksters. IMO, it’s just a paperwork snafu, hyped by the media and politicians, that isn’t serving anyone well.

‘Foreclosures activity, which includes notices of default, auction or foreclosure sales, fell in 178 of the nation’s 211 metro areas with populations of 200,000 or more, RealtyTrac reported. Virginia is a nonjudicial state, meaning foreclosures here do not need court approval and generally move through the system faster than they do in judicial states. The average decrease in foreclosure activity in localities in Virginia was about 30 percent, Blomquist said. By comparison, counties in Maryland saw a decrease of about 70 percent, he said.’

http://www2.timesdispatch.com/business/2011/jul/28/tdbiz01-foreclosure-activity-declined-in-the-first-ar-1201675/

Why the big difference in one state to the other? Surely these errors existed without regard to what system was in place.

IMO, in the long run, it doesn’t really matter except it’s delaying economic recovery. Here in Flagstaff, rents are still eating up half of what most earn. Yet hundreds of houses sit empty, or with people living in them without making payments for months or years.

What does matter to people wanting their own house? Something else PB posted might qualify:

‘The following chart created by Laurie Goodman, a housing market expert at Amherst Securities, shows the ominous rise of shadow foreclosure inventory. The shaded area shows mortgages more than 12 months delinquent or in foreclosure (darker blue) and those seized by the bank (lighter blue). The sum has risen from just below 2 million in early 2009 to 3.35 million in April 2011. That’s an increase of more than 67.5% over this period of about two years.’

‘According to Goodman’s presentation, even though homes sold are only about 90,000 per month, inventory is growing by around 60,000 per month. So the homes sold each month would have to increase by two-thirds just to keep up with the growing inventory — not to begin to cut the 3.35 million homes in the shadows. To conjure up enough demand to meet 150,000 sales instead of just 90,000, home prices would almost certainly have to fall faster.’

http://www.theatlantic.com/business/archive/2011/07/chart-of-the-day-the-housing-market-is-worse-than-you-think/242514/

Comment by Sarah
2011-07-31 06:03:00

You are right Ben. Someone will ultimately be declared the owner whether you can do it for $0 or $50k in fees and court costs. Adding the additional costs just creates massive inefficiencies.

Comment by Awaiting
2011-07-31 08:09:42

Thank you Ben, for the insight. Now, can some of us who also has some R E education get a job at a law firm?

Almost everyone I meet who works in the SS or REO dept of BOA, tells me their workload is 2.5 people’s worth, and it’s a pressure cooker. Yet, their online job opportunities has shrunk. Part of the extend and pretend formula?

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Comment by X-GSfixr
2011-07-31 08:45:19

But what bank is going to spend $50K in fees to foreclose on a property that might sell for $75-100K?

I can easily see where someone could have a “free” house for 10-15 years, before the bank ever got around to foreclosing.

As far as the “delaying recovery” meme, around here the only people with any disposable income are the “Free renters”. If they go under, there’s not going to be much keeping the Main Street economy afloat.

Summary: By accident or by design, the “economy” is totally screwed up, and nobody can even agree what the problem is, much less agree to a solution.

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Comment by sleepless_near_seattle
2011-07-31 09:40:59

“…nobody can even agree what the problem is, much less agree to a solution.”

Which is why, I argue, most people are just fine with this thing being dragged out as long as possible while simultaneously ragging on the “continued, reckless spending.” The ragging is all lip service. They’d be destroyed if any real reform were on the table.

 
Comment by Itsabouttime
2011-07-31 10:08:26

Most people are so confused about their own interest that they may sincerely want the end of “continued, reckless spending.” They do not realize that their job, food stamps, customers, or whatever depend so much on that “continued, reckless spending” that if it vanishes so will their job, food stamps, customers, whatever.

 
Comment by X-GSfixr
2011-07-31 10:12:46

You see it on this blog.

The gold bugs are the worst. Advocating a reversion to the gold standard, while, by the way, turning their “bet” into a winner.

 
Comment by Happy2bHeard
2011-07-31 10:15:26

Bingo, IAT!

 
 
 
Comment by Darrell_in_PHX
2011-07-31 06:13:14

House across from me that set the high water for the neighborhood at $260K in 2006, was taken by the bank and sat empty for almost a year. It was put on the market 2 months ago at $77K. The bank that owns it pulled the listing after no buyers.

Comment by jeff saturday
2011-07-31 10:22:55

” It was put on the market 2 months ago at $77K. The bank that owns it pulled the listing after no buyers.”

How much is a house that nobody wants worth?

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Comment by salinasron
2011-07-31 06:32:00

Thanks Ben for putting sanity back into the equation.
People just don’t realize the damage being done by not clearing things in a timely manner. Under the current system (allowing people to squat in their houses by not paying rent/mortgage) we may just be setting up a new class of people who feel that they should never be required to pay for housing; Just as people say “I’m not going to just give it away”.

Comment by Awaiting
2011-07-31 08:17:11

Meanwhile, those of us who can and are willing to buy are left with slim pickens and ridiculous prices. When you put X income and Annual Rents/Price formulas to the test, we’re still circling the airport, and are a long time away from landing the bubble plane. Add the fear of cloud on title (investors suing buyers & sellers), and it’s a turbulent flight.

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Comment by Professor Bear
2011-07-31 09:15:25

“Meanwhile, those of us who can and are willing to buy are left with slim pickens and ridiculous prices.”

Legitimate buyers & renters = bagholders & dupes

 
 
Comment by Pete
2011-07-31 15:56:19

“Under the current system (allowing people to squat in their houses by not paying rent/mortgage) we may just be setting up a new class of people who feel that they should never be required to pay for housing;”

You may be right about the result, but I don’t know if it’s the ’system’. Certain banks have decided that it’s not in their interest to take something that will lose them money, at least short-term and on paper. Or that the squatters will at least see to it that the place doesn’t go to hell in the interim. I don’t think that “we” can change the system to force banks to foreclose faster in the name of booting out squatters.

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Comment by oxide
2011-07-31 06:36:52

By comparison, counties in Maryland saw a decrease of about 70 percent, he said.

Which would explain why MD houses are all still listed at 2004 prices. Townhomes and condos are coming down in prices, but SFH are being stubborn.

 
Comment by alpha-sloth
2011-07-31 06:41:05

Tooot! Tooot! What’s that Ben? I can’t hear you! Tooot! Let me shut the door…my followers get so excited…

I agree that the law will determine who owns what, eventually. What else could happen? I never said everyone was going to get a free house, although it wouldn’t surprise me if some few do, lost in the paperwork shuffle, just like my friend who got the free Porsche when his lender imploded in the dotcom crash.

My prediction was that the servicers did not have the proper, legal paperwork without faking it, and that is exactly what appears to be the case.

My continuing prediction is that MERS is going to be a monster Charlie Foxtrot before this is all over, and that those states that allow them to ramrod through their falsified documents are merely kicking the can down the road, and will have all sorts of title problems in the future.

But let’s not forget the rest of my prediction:

Comment by alpha-sloth
2011-07-02 15:02:48

I also predict the banksters will get a pass, again. The law will be ignored, again.

Comment by mikeinbend
2011-07-31 08:15:43

Please indulge a little rant. I think that the banks should be made to cross their t’s and dot their i’s like the little guy. If that takes time; so be it. I happen to think the banks are evil and would like as much time in the house we have occupied since 2007. The lending was predatory and the banks shoud take some responsibility for that. Predatory, like loaning my wife 60x her yearly income is somehow good underwriting? World gone haywire; she did not understand that she would not be able to pay this back; she had seen me make money flipping and renting houses, I did not understand it either to be honest. I thought the bank would hold the risk of loaning the money so it was relatively safe to invest, especially by putting 20% down.

Underwriters saw that she had some assets and skipped even asking about income; this was a bogus process of underwriting, as taking on a mortgage involves 30 yrs of income, not just having enough assets to cover a couple years…

Appraisal came in at 60k over price paid, plus 20% down helped her think that she could sell based upon these valuations. You don’t see things like milk and eggs dive off a cliff pricewise, like the value of homes did.

I mean something “worth” 440k in 2007 was not protected by the instant “equity” nor the sizable down because it was sitting on a house of cards. The loan originating company disappeared the same month they made the loan; sold to Countrywide. They were the last no-doc program her loan officer could find for her. He kept me out of the deal as my wife’s fico was a few points higher than mine. The title company made 23 errrors on the original documents at signing. She had to go to a second signing just to help the title company remove their clerical errors in the hastily made deal.

But she was not to be saved by being able to sell; she tried to sell it after subtracting 20% off the purchase price in 2008; and get out with an 80k loss; no dice as the valuation was fake to begin with and she was stuck like glue. Underwater so quickly as it lost 50% value in just one year, now it’s worth maybe 200k but there are so many like units for sale nobody is getting many showings on their for sale units.

Now that most of the units in the development are for sale, but he bank won’t play on the short sale game for the most part, nor will they go thru with foreclosure so far either. Many of them appear on BofA (Recontrust’s) auction list. Others, I know, are on other lenders auction lists. The only people getting out are the ones that can bring 150k to the closing table or those who paid cash.

But the fire is not under the bank’s feet, as each time they postpone the auction they can continue to treat the home like it is worth more than it is due to changes in accounting rules skewed in the banks favor. They get to pretend it is worth 300k, but my wife can’t sell it for that nor can she sell it for 200k. Or almost any price as they are now almost all for sale and/or on the chopping block.

BofA has not performed auctions in this county since last October. They have 680 waiting to be auctioned, and seem to be serious this time, as minimum bids are being posted on their August 8 auctions, which is new and different, likey as a result of their paying out 8.5 billion to Countrywide investors. So they admit bad loans were written, but offer no help to those who took out the loans. Maybe they should? or could if they wanted to?

Maybe they are thru kicking the can down the road after paying 8.5 billion to investors that got duped on the securities of these loans, which they have admitted are garbage. Well they were garbage predatory products sold to an unknowing public as well. Why do homemoaners need to roll over and let the bank do their business uncontested? Why not fight a bit as there have been plenty of indications and concessions made by the bank admitting that they were issuing garbage loans that were shoddily put together; underwritten irrespective to the borrowers ability to pay it back (60x income??? in my wife’s case).

Yeah they took advantage of a complicit public so the end result is that borrowers who cant pay get to vacate and find a rental and that is driving rental rates thru the roof so that the rental costs approach the mortgage that the borrower couldn’t pay either.

Something has got to give or else we will all end up in the poorhouse, and on the dole, because of the banks ability to do business however it suits them while homeloaners (greedy, yet some truly ignorant) get the shaft.

Not complaining about the year and a half free rent we have been provided, but rather that 20% down did not protect my wife or give her a cushion that would allow her to sell even after one year of buying the place.

Home prices dive; but rents don’t? Price of milk does not? Homes sit empty so the ones that are held by landlords who are financially secure go for a mint. We are well and truly screwed; even though I hold a paid for home, my wife holds two part time jobs; I work as a teacher and volunteer my summers at a non-profit. We can’t make ends meet anymore!

Oh yeah my health insurance wont pay for my recent MRI; I have been in constant pain for 6 years post neck surgery; they wont pay for the medication that helps me function with this condition nor studies like MRI to look for a cause of my pain. I guess selling my house and turning the money over to the insurance company, the gas station, the landlord, the grocery store is my next move so I don’t have assets to try to protect and wont care if myself or my kids are covered by the frustrating insurance companies who take but are reluctant to give.

Well at least we got SNAP last month finally at 300 per month. Just gotta get the kids on Oregon Health Plan (requires that we drop their private insurance for a time). Uncle sugar here we come; thanks tax payers I guess.

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Comment by RioAmericanInBrasil
2011-07-31 09:36:01

health insurance wont pay for my recent MRI; I have been in constant pain for 6 years post neck surgery; they wont pay for the medication that helps me function with this condition nor studies like MRI to look for a cause of my pain.

You Tea Party and right-wingers who screamed against the public option should be very ashamed. The US health care insurance system sucks so badly and you stood up for it. You might come to understand someday in a bad way.

As it was, you were predictable, barking marionettes jerking to the strings of your masters. And you think you’re some kind of freedom fighters. What a diversion and manipulation of good intentions.

 
Comment by Professor Bear
2011-07-31 11:23:00

“Underwater so quickly as it lost 50% value in just one year, now it’s worth maybe 200k but there are so many like units for sale nobody is getting many showings on their for sale units.”

I hate to say, but if there are many like units ‘worth 200k’ for sale at the same time, they aren’t any longer ‘worth 200k’, but rather they are worth what those who really need to sell are willing to drop their reservation prices down to in order to find a buyer. Those who adamantly hold out for 200k will learn over time that it is not possible to sell at above market value.

 
Comment by Professor Bear
2011-07-31 11:25:16

“Now that most of the units in the development are for sale,…”

Sounds like Bend has the makings of a genuine buyer’s market.

 
Comment by Professor Bear
2011-07-31 11:28:40

“They get to pretend it is worth 300k, but my wife can’t sell it for that nor can she sell it for 200k.”

FRAUD!

 
Comment by Professor Bear
2011-07-31 11:30:56

“Yeah they took advantage of a complicit public so the end result is that borrowers who cant pay get to vacate and find a rental and that is driving rental rates thru the roof so that the rental costs approach the mortgage that the borrower couldn’t pay either.”

Here is another sign of an emerging buyer’s market: It is getting increasingly cheaper to buy than to rent.

 
Comment by Professor Bear
2011-07-31 11:34:09

“Not complaining about the year and a half free rent we have been provided, but rather that 20% down did not protect my wife or give her a cushion that would allow her to sell even after one year of buying the place.”

Does the lost $80K factor in to the year-and-a-half free rent equation? Because for $80K, we could rent our home in North San Diego County for almost three years.

 
 
Comment by Professor Bear
2011-07-31 08:42:06

“The law will be ignored, again.”

Do robo-signing incidents meet the definition of “forgery”? (Wish HBB legal eagle Polly weren’t on vacation!)

Forgery

The crime of forgery generally refers to the making of a fake document, the changing of an existing document, or the making of a signature without authorization. Documents that can be the object of forgery include contracts, identification cards, and legal certificates. Most states require that forgery be done with the intent to commit fraud or theft/larceny.

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Comment by Happy2bHeard
2011-07-31 10:23:43

The signers probably thought they were authorized. I wonder if they will get thrown under the bus anyway.

 
Comment by Professor Bear
2011-07-31 11:27:15

“…thought they were authorized.”

To do what:

To quickly sign stack after stack of documents at lightning speed, many of which may have been forged, under the pretense of having actually read them?

In what way could this possibly not be a case of fraud?

 
Comment by alpha-sloth
2011-07-31 14:24:27

“In what way could this possibly not be a case of fraud?”

If not in the $10-an-hour saps who signed the papers, but in their managers, and their managers, and their managers, etc. Maybe quite a way up the chain.

The tip-top boyz usually try to insulate themselves from such things, but it doesn’t always work. White collar criminals fold pretty easy when offered the chance to rat in a higher-up and walk.

That’s why I don’t want to sweep it all under the rug in the pursuit of ‘getting on with it’. Wanna discourage future bubbles? Put some of the crooks who created and profited from this one in prison. I’m sure they’d like nothing better than for us to just ignore their fraud in the interest of somehow supposedly expediting the recovery.

 
Comment by Professor Bear
2011-07-31 15:17:47

“Put some of the crooks who created and profited from this one in prison.”

This is the part that is so puzzling to me about the situation at hand: Where are the perp walks? One has to wonder whether the banksters may have done a better job this time around of buying off the criminal justice system, much in the same way that Boston mobster who was recently brought to justice bought off the FBI.

 
 
 
Comment by Professor Bear
2011-07-31 08:17:28

“Here in Flagstaff, rents are still eating up half of what most earn. Yet hundreds of houses sit empty, or with people living in them without making payments for months or years.”

Boy does that sound familiar, in that we have the same situation at hand here in North San Diego County.

 
Comment by scdave
2011-07-31 08:29:39

Here in Flagstaff, rents are still eating up half of what most earn ??

people living in them without making payments for months or years ??

Think a bit about those two quotes…

So, each weekday you and your neighbor go out the front door about 6:00 AM headed for work…Mom does also but not until 9:00 after the kids are off to school….At the end of the month, there is little money left, but you are getting by…

Your neighbor across the street on the other hand is taking the family on outings and throwing big Sunday BBQ’s…

Pretty discouraging for the guy trying to do it the right way and no penalty for the guy across the street…

 
Comment by Kim
2011-07-31 09:03:01

I’ve often wondered whether the banks require FBs who are applying for loan mods to submit a copy of their note. It wouldn’t straighten out MERS, but it would solve the issue of producing a note, no?

Comment by mikeinbend
2011-07-31 09:14:42

Wife keeps getting correspondance from HUD; saying she may be pre-qualified for a mod. But since the original loan was made at 60x income, and her income now is around 12k per year, what point is there in applying?

Getting to stay put for more time would be priceless. She has already asked the bank to produce the note, for the second time, after BAC’s recent merger with Bank of America, N.A. made for yet another loan servicing change. (don’t know if that gets recorded like a change in who owns the loan; or needs any legal paperwork to verify, but who cares?) Got correspondance back saying it would require further investigation on their part.

We’ll have to see if her August foreclosure goes thru this time or if it will be rescheduled again as the fork thrown misses or hits the wheels of the mega-machine! Two other methods to delay are to call the morning of the auction and demand the opening bid; or for wife to file bk.

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Comment by sleepless_near_seattle
2011-07-31 09:50:24

Thanks for reposting this chart, Ben. I had to read it a few times to understand that the monthly net inventory is really +60k, instead of the way I first read it: 60k - 90k = -30k. Pretty sobering view.

 
Comment by jeff saturday
2011-07-31 10:27:44

“Here in Flagstaff, rents are still eating up half of what most earn. Yet hundreds of houses sit empty, or with people living in them without making payments for months or years.”

That`s what is happening to me at this point. In Palm Beach County it isn`t hundreds of houses sitting empty, or with people living in them without making payments for months or years, it`s thousands.

Comment by Ol'Bubba
2011-07-31 11:07:00

Palm Beach County, FL has a much higher population than Flagstaff, AZ.

It would be interesting to see per capita metrics.

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Comment by wmbz
2011-07-31 05:23:54

Obama announces 54.5 mpg gas mileage standard
USA TODAY

President Obama is announcing tough fuel-economy standards starting in the 2017 model year, requiring automakers to average 54.5 miles a gallon.

The standard is sure to force dramatic changes in cars, making them smaller, lighter and loaded with higher-technology engines like hybrids, diesels or other fuel savers. The standard is so tough that relatively few models would meet it.

Because of the way fuel economy is calculated, window sticker labels of estimated fuel economy of individual models will be lower. Those labels will probably show values of about 40 mpg, says Roland Hwang, transportation director for the Natural Resources Defense Council. “Because of the differences between the laboratory certification test cycle and the on-road fuel efficiency, drivers can expect to see the average window fuel economy label to be about 40 mpg, compared to today’s average of about 22.5 mpg,” Hwang writes.

There are fears that the standard will force automakers to produce small cars that families won’t want to buy — or that cars will become too expensive:

“There is a realistic fear that the trigger for price increases will come from more than the new required technologies, and also by the automakers rationing demand through pricing in order to comply,” says Jeremy Anwyl, CEO of Edmunds.com, a car-buying research website.

The new standard is the follow-up to the 35.5 corporate fuel average being phased in through the 2016 model year.

Comment by alpha-sloth
2011-07-31 05:40:30

The beauty of everyone driving smaller, lighter cars is that you won’t feel like you’ve unilaterally disarmed, like you do now, when you drive your fuel-efficient car amidst the over-sized SUV dinosaurs on the road.

Comment by jeff saturday
2011-07-31 05:52:02

“when you drive your fuel-efficient car amidst the over-sized SUV dinosaurs on the road.”

What you need is a wood burning truck.

Upstate Man Turns Wood Into Energy

Imagine living in your house with power supplied by the earth and power bills that are non existent. One man in Pickens county is on a quest to stay “off the grid” permanently and he’s doing it all with wood.

A truck being run on wood. You can get a thousand watts of energy from one piece of wood alone. It’s an old way to go green that’s new again.

“PVC pipe. Plumbing pipe. Whatever I could find.”

A former engineer for Michelin with a knack for doing things on his own.

“There’s no place this can get air. It can only get it through this one check valve.”

Scott Hunt is what’s known as a “prepper.”

http://practicalpreppers.com/?category_name=uncategorized - 32k -

Comment by Realtors Are Liars®
2011-07-31 06:16:41

Heh…. smart guy until you realize he’s a rapture nut leader.

Think Koresh.

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Comment by Darrell_in_PHX
2011-07-31 06:16:44

As if this is new….

Google “wood gas”. It is what powered the gas lamp street lights pre-electricity.

The problem is, it isn’t scalable. We’d quickly empty the forests of trees.

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Comment by Realtors Are Liars®
2011-07-31 06:55:51

Gasification is an old process. Now every goober in the US will create a RCRA waste site in his backyard from spilling wood gas condensate charged with creosote. Then *we* have to pay to clean up the miles wide carcinogenic groundwater plume.

 
Comment by Bill in Carolina
2011-07-31 07:00:01

Imagine if everyone rode horses. :-)

 
Comment by scdave
2011-07-31 08:54:14

As long as he knows the way back home from the bar… :)

 
 
Comment by alpha-sloth
2011-07-31 06:18:57

Wow! Quite a contraption. I think I’d rather do my gasification at home to power a battery, and then drive around in an electric car, rather than having a gasifier in the bed of my truck, though. Might be problematic in a car wreck.

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Comment by oxide
2011-07-31 06:40:57

Not a new idea:

“During the Second World War, almost every motorised vehicle in continental Europe was converted to use firewood.

Wood gas cars (also known as producer gas cars) are a not-so-elegant but surprisingly efficient and ecological alternative to their petrol (gasoline) cousins, whilst their range is comparable to that of electric cars.

Rising fuel prices and global warming have caused renewed interest in this almost-forgotten technology: worldwide, dozens of handymen drive around in their home-made woodmobiles.”

http://www.lowtechmagazine.com/2010/01/wood-gas-cars.html

I really hope this doesn’t happen. The last thing I want is for us to cut down our forests again.

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Comment by SV guy
2011-07-31 10:05:36

Oxy,

The amount of dead timber in Montana that is kept off limits by the enviro-wacko lawsuits would blow your mind.

 
Comment by Happy2bHeard
2011-07-31 11:30:13

If we started using that dead timber to fuel cars, it wouldn’t last long.

 
 
Comment by ecofeco
2011-07-31 12:51:12

“A truck being run on wood. You can get a thousand watts of energy from one piece of wood alone. It’s an old way to go green that’s new again.”

Wow! Talk about “unclear on the concept” :lol:

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Comment by Sammy Schadenfreude
2011-07-31 10:00:07

While I’m opposed to government-mandated mileage standards (or other meddling in areas that are not their concern) I wouldn’t mind not having to deal with idiots driving Suburbans and Hummers whose driving skills and attention to other traffic are inversely proportionate to the speed and mass of their vehicles.

Comment by Itsabouttime
2011-07-31 10:18:55

If the government (i.e., you and I and everyone else without sufficient wealth to avoid paying taxes) are paying to make the oil regime run, we certainly have the right to demand the resource be used in an efficient manner so we get maximum bang for our buck. If any corporation wants to take on the costs of maintaining and defending the oil regime (which means propping up dictatorships all over the world, pacifying the restless populations in those countries, securing the shipping lanes, and maintaining the military and informational infrastructure that accomplishes this with trillions of dollars of continued research) then they can have the right to force consumers to waste the resource by building inefficient engines and machines that use the resource.

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Comment by Sammy Schadenfreude
2011-07-31 10:25:24

Good points.

 
Comment by Itsabouttime
2011-07-31 11:42:03

Thanks.

 
 
Comment by Realtors Are Liars®
2011-07-31 11:44:46

“I wouldn’t mind not having to deal with idiots driving Suburbans and Hummers”

Why these things are legal is truly a mystery.

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Comment by ecofeco
2011-07-31 13:01:26

Vehicles of that size and weight used to require a commercial license at one time.

The popularity of used Suburbans back in the 1970s and 80s became apparent to the auto makers, who lobbied Congress to do 2 things:

Pressure states to change the status of that weight class of vehicles from commercial to consumer.

Create a tax break for that weight class to encourage sales.

The same was done for “light” pick-up trucks, which is why they became larger over the last 20 years.

This class of vehicles is cheaper to make as they DO NOT have the same stringent safety requirements as regular cars nor as sophisticated a chassis and frame either, yet the consumer pays the same, if not more, than a comparably equipped sedan and gets less gas mileage.

Proving once again, the American consumer is an idiot.

 
Comment by Sammy Schadenfreude
2011-07-31 13:01:31

Octomom needs one. Not sure anybody else does, though.

Below is a fiting tribute to Hummers.

http://www.fuh2.com/submissions.php

 
 
Comment by drumminj
2011-07-31 22:19:31

I wouldn’t mind not having to deal with idiots driving Suburbans and Hummers whose driving skills and attention to other traffic are inversely proportionate to the speed and mass of their vehicles.

Come to the PacNW. You’ll find the skill ratio to be the same, except rather than driving Suburbans, they’re driving prii

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Comment by Professor Bear
2011-07-31 08:20:15

How much will this drive up the manufacturing cost and the purchase price of new cars?

Comment by X-GSfixr
2011-07-31 09:10:22

It’s all part of the master plan, to force J6P onto public transportation, and back into cities.

Locally, nobody can afford new cars, so everybody is buying used. Used car prices are going up. Eventually, the supply of used cars will be run into the ground/uneconomical to repair; by then, new cars will be close to $40-45K for the typical family sedan.

Which, if present trends continue, will also be the purchase price of a run of the mill 3/2/2 house in most of Flyover land.

People in NYC, DC, and Cali should try driving across the country sometime, instead of flying over it. Things are really swirling down the toilet out here. The typical J6P is beginning to have more in common with a J6P in Mogadishu or Lagos, than he does with anyone living in NYC or DC.

At the same time purchasing power will continue to decline for about 80% of the population.

I should be happy. With my training and skills, I’ll soon have my choice of Third World crapholes to move to. Starting with the whole US that isn’t in SoCal, San Francisco or the NE corridor.

Comment by Happy2bHeard
2011-07-31 10:31:33

“uneconomical to repair”

The economics of repair are driven by the price of new(er) cars. If the cost of a new car is $40K and the cost of a used car is $20K, then the cost of a new engine or transmission at $3K looks cheap.

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Comment by ecofeco
2011-07-31 13:04:36

However, eventually, the long term repair costs outweighs the new car purchase.

Every time.

 
Comment by Happy2bHeard
2011-07-31 20:50:06

Sometimes short term repair costs factor in. Is it cheaper to spend $300 on a used car that might last 3 months or fix the current one that also might only last 3 months before needing repair. I know folks who are serial purchasers of sub-$600 cars.

 
 
Comment by aNYCdj
2011-07-31 10:43:33

Uh GS….. this would be a great Idea since most of the flyover J6P are of the non violent color of skin….and those here we can move back to the farms…with barbed wire fences..

It’s all part of the master plan, to force J6P onto public transportation, and back into cities.

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Comment by Happy2bHeard
2011-07-31 11:00:34

“non violent color of skin”

This is an absurd statement. Do you really believe that any of us are not capable of violence? Have you never heard of the KKK? Take your New York accent to the deep south and mouth off to a “non violent color of skin” J6P in some dive bar somewhere and see how non-violent he is. What color were the boys of Columbine?

 
Comment by aNYCdj
2011-07-31 11:25:50

HAHA that’s funny……

Have you never heard of the KKK..they don’t matter anymore, the KKK has been mainstreamed by the Katrina Flooding of rap and hip hop music daily.

Yes the KKK of today would be proud of how easy it was to achieve their goals.

 
Comment by Happy2bHeard
2011-07-31 11:55:12

I think you are being intentionally obtuse.

My point was that people of any color are violent. And if you think that there are not violent white folk in flyover country, then you haven’t been there.

 
Comment by aNYCdj
2011-07-31 12:11:55

I think they would be far less then what we have today.

give sect 8 people free rent if they live on a farm.

 
Comment by X-GSfixr
2011-07-31 15:59:19

I believe in the immortal words of Gunny Seargeant Hartman:

“You are all equally worthless” :)

 
Comment by Happy2bHeard
2011-07-31 20:52:58

“give sect 8 people free rent if they live on a farm.”

The only person I know who gets Section 8 is an elderly white woman with serious health issues. She might be happy to live on a farm if public transportation were available to take her to doctor appointments. I don’t think she will be doing much heavy lifting.

 
Comment by aNYCdj
2011-08-01 04:21:27

I know when they open sect 8 vouchers here they line up for hours before they open, and there are very few old folks in the line…but lots of double and triple baby carriages.

 
 
 
 
Comment by B. Durbin
2011-07-31 19:57:36

“There are fears that the standard will force automakers to produce small cars that families won’t want to buy”

You think? Do you know how hard it is to wrestle just one car seat into a typical sedan? Now try it with two. Three? No chance.

The reason that SUVs are so popular with families is previous MPG laws forced station wagons (the real deal, not Outbacks) out of compliance with the law. You just couldn’t get a multi-row car to get the necessary mileage. But SUVs fell under truck laws, and could get away with lower MPGs, *and* they could have more than four seats. You could fit the kids and go to the grocery store too.

I’d love to have a car that got over 40 MPG. However, I don’t think I’ll be able to use such a car, especially if my kids ever want to take their friends places. My family had a big ol’ van when I was growing up, eight seats and enough room to fit a washer and dryer in the back. Always a good choice for those school field trips.

Oy. I think this is a case of The Law of Unintended Consequences. Or maybe Paving the Road to Hell.

 
 
Comment by Martin
2011-07-31 05:35:43

It looks like a new deal is being reached with $1T in immediate cuts and $1.8T later. I wonder what would they cut immediately. Thoughts? My take is:
–Defense: 100B
–Wars: 400B
–Discretionary Spending: $300B
–All agencies like NIH, DOS, DOD, USDA, NASA etc: 200B

Looks like a lot of Govt. contractors working on $90 per hour are going to get laid off soon. Their party is getting over.

Comment by palmetto
2011-07-31 05:59:32

Anything on “foreign aid”, or does that come under the heading of discretionary spending? I understand Hillary is unhappy because she can’t be quite the Lady Bountiful she’d like to be. And I nearly heaved over Condoleeza’s half billion citadel embassy in Iraq.

 
Comment by Darrell_in_PHX
2011-07-31 06:10:40

Wars alone are $159B per year. $1.59T over 10 the way they are calculating.

The Republicans were quick to call this gimick when the Dems were using it, but I’d bet it is a significant part of the compromise.

I bet they are also assuming things like economic growth will cut costs on unemployment, food stamps and tax credits.

I’m guessing the numebers are more like this:
$20B a year real cuts.
$260 a year assumed cuts based on wars and stimulus ending….

Factor that in over 10 years.. and poof… $2.8T in cuts.

Comment by Bill in Phoenix and Tampa
2011-07-31 08:10:43

I predict this ten year in cuts will be overrun by even more interest on the debt.

The $2.8 trillion in ten years are not enough. It needs to be at least $8 trillion in ten years. Take a big bite of the unfunded liabilities. And go on a gold standard.

 
Comment by scdave
2011-07-31 08:56:59

Get ready for base closures also…Not only the reduction in spending but the liquidation of the real estate asset to the private sector…

Comment by Bill in Phoenix and Tampa
2011-07-31 09:21:29

I was thinking of BRAC again. It worked well in the 90s. It spared me because I was a DOD employee, not a contractor. It chased Boeing, CTA, CSC and other companies and their employees out of the China Lake area in the 90s.

Yet the plans are still on the books to double the hiring at China Lake. This is why RE prices there are very lofty. My house which I sold for $79,000 in 1996 is valued at $170,000 these days. It’s just a starter stucco box in a reasonable location.

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Comment by Bill in Phoenix and Tampa
2011-07-31 10:23:01

Based on past BRACs, the contractors to the contractors will be let go first at defense industry companies around the U.S. Following that, over several months there will be major layoffs of salaried employees of contracting companies all over the U.S. And many of those jobs are paying in the $90,000 or more annual.

Not all contractors will be given the heave ho. There will be some who directly work on high priority national security projects such as cyber warfare and information security. Those areas are still very small compared to missile defense, avionics, munitions, ships, submarines, and so forth.

Whole towns will be wiped. It happened before and will happen again.

 
Comment by Happy2bHeard
2011-07-31 10:36:58

“Whole towns will be wiped. “

I wonder how many of these towns are in Republican districts?

 
 
 
Comment by Happy2bHeard
2011-07-31 10:35:47

“I bet they are also assuming things like economic growth will cut costs on unemployment, food stamps and tax credits.”

Another lie. What growth where? I see decline here. There may be growth in India or China.

Comment by drumminj
2011-07-31 22:23:53

I bet they are also assuming

No claim was made of actual growth. Just that the politicians were assuming growth so they could call it a “cut”.

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Comment by Sarah
2011-07-31 06:15:23

Didnt the rating agencies already say that a 4 trillion dollar cut would just be a start? Default was never on the table, but the real fear is downgrade. Even is this crappy legislation passes, it doesnt seem to go enough to remove the threat of downgrade, and may actually cement it in as an inevitable outcome. However, we all know markets are irrational. Are you guys predicting if this passes at the 1 pm Eastern vote the stock market will cheer or vomit?

Comment by palmetto
2011-07-31 07:00:53

A ratings agency downgrade, at least a downgrade by a US ratings agency, will never happen. If it did, the executives and boards would be arrested and prosecuted within an inch of their lives. Not for the downgrade, but for past sins. These are the same ratings agencies that rated all the crap sausage securities AAA, and never got so much as a wrist slap. I would imagine they’re being used to create fear at this time, but that’s as far as it goes.

Comment by Itsabouttime
2011-07-31 10:26:33

Alas, a big chunk of the debt is owned offshore. If offshore credit agencies — presumably less vulnerable to arrest of officers by U.S. authorities — downgrade the credit rating, the damage would be done.

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Comment by Bill in Phoenix and Tampa
2011-07-31 08:07:50

Yeah I’m anticipating having to look for an engineering gig soon and a major cut in my income. But this has been an anticipation I had since I started earning the big bucks in late 2000. I lived well below my means.

In 2000 before I went independent I was earning $65,000 per year. It was a comfortable income. My rent was $600. I was able to max my 401k and contribute $2000 annually to an IRA and even buy stock mutual funds outside my retirement plans.

I can go back to that. The difference will be that I won’t be buying government securities much anymore. Maybe $100 per month into savings bonds.

I am thinking I could wind up working at Intel in Chandler.

Peace dividend. I like that. Cut down government spending across the board.

Comment by cactus
2011-07-31 08:46:21

I am thinking I could wind up working at Intel in Chandler. ”

A guy I work with was thinking of buying some homes in Chandler as investments, we sell alot of chips to Intel and he works as a product manager for that line.

As long as the air conditioner works well. When I worked at RFMD design center in Chandler near INTEL the lab air conditioner was lucky to cool the lab to 80F, they were too cheap to upgrade it for the heat load from the test lab.
Air conditioner worked fine up stairs where managers stayed all day I remember.

Intel Chandler would be OK. I have often thought about that esp. since I hear they are thinking of changing to Mentor Graphics from Cadence for layout work.

And wow has it become affordable in Ahwatukee/ Chandler area. RE 1/3 the price in AZ compared to here in Ventura Co.

Comment by Bill in Phoenix and Tampa
2011-07-31 09:18:35

Yeah. Ahwatukee prices are like 2002 levels on the high end (above $300,000). On the lower end they are like 2000 prices.

I know two guys starting work at Intel. One of them is a consultant.

Seems like a good time to switch gears and get out of defense-related work before the termination of engineering contractors cause the market to flood.

But I still think I can make more money traveling around as a consultant in non defense areas for awhile. I don’t need many more years of this.

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Comment by Bill in Phoenix and Tampa
2011-07-31 09:37:29

I’m with some others here thinking that the official unemployment rate will go up above 12% with layoffs and terminations (contractors don’t get laid off. Their contracts are terminated).

This will help drive house prices down more. It will touch upscale areas finally. It will drive up the Washington D.C. unemployment from under 7% to perhaps 12% since there is a heavy concentration of contractors there.

It will prolong the recession.

But it’s all needed. I wish they will also cut all housing subsidies, eliminate the MID, abolish section 8 and get rid of these stupid anti-discrimination laws in real estate, which ruin neighborhoods and force people to stay behind their locked doors, not wanting to meet other neighbors.

Comment by Itsabouttime
2011-07-31 10:29:29

So, you think a renter or home buyer should be denied housing in a neighborhood because of the color of their skin? What happened to capitalism, where ability to pay was supposed to be the criterion?

Comment by aNYCdj
2011-07-31 10:52:36

Here in NYC they give the live in homeowner lots of leeway in this….you can pretty much rent as you want if you live in the home that’s up to 4 units… anything bigger or If its strictly rental property you are bound by the law…

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Comment by Itsabouttime
2011-07-31 11:29:24

Laws everywhere work this way. The law allows you to “discriminate” in choosing with whom you will share your domicile, even if you are charging for the privilege. But, if you are not sharing the domicile, you do not have the right to use anything other than ability to pay.

Funny, I thought that was capitalism. Silly me.

IAT

 
 
Comment by Bill in Phoenix and Tampa
2011-07-31 11:12:11

Just as a church-going neighborhood has a right to prevent me, an atheist from moving into that community. There are many Christians who hate people like me. I’ve seen posts on Faux from Christians favoring executing atheists. Myself, I prefer living among atheists.

People should not have integration forced on them.

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Comment by Itsabouttime
2011-07-31 11:31:08

See the post on the Afghani lovers, below.

People should not have segregation forced on them.

IAT

 
Comment by Pete
2011-07-31 16:25:42

“Myself, I prefer living among atheists.”

Interesting. As an extreme agnostic, I should as well, but I don’t. Just like the brain of a devout (insert religion here) will rot when he lives with only his own kind, so will the brain of the atheist/agnostic. At my workplace is a young, soft-spoken religious gal. While she’s gung-ho about it personally, she’s not in anyone’s face, and she’s always open for constructive conversation on matters of faith, science and human nature.
She gives me faith!

 
Comment by Bill in Phoenix and Tampa
2011-07-31 17:26:54

My ex is a Muslim - my best ever girlfriend. I was an atheist. We got along well. She did not tell me to go to a church or anything. But the final break was that I would have to be Muslim to marry her. “But you don’t have to be permanently Muslim. Just five minutes.” So we went our separate ways.

 
Comment by Itsabouttime
2011-07-31 17:31:11

Yeah, that’s what happens when one person who takes a vow — any vow — seriously tries to join up with someone who sees a vow — any vow — as just words. Happened to me — different religious community’s vow, same result.

Oh well.

IAT

 
Comment by measton
2011-07-31 18:37:28

I thought if you left the muslim faith they could kill you??

 
 
 
Comment by Happy2bHeard
2011-07-31 10:44:29

“abolish section 8 “

Shanty towns are so much better .

 
Comment by aNYCdj
2011-07-31 10:56:58

why not put them in gated communities with military guards to check ID’s ( i anit gotz NO EyeDee) on entrance and exits?

Lots of abandoned housing projects could be put to use….

abolish section 8

 
 
 
Comment by Realtors Are Liars®
2011-07-31 05:37:30

Realtors Are Liars®

 
Comment by oxide
2011-07-31 05:48:31

Today’s homes:

First, a typical McMansion in the McMansion suburbs. Re-al-TOR wet dream..

http://www.zillow.com/homedetails/12815-Gorman-Cir-Boyds-MD-20841/97459532_zpid/#0

All the hallmarks of an FB buying a McMansion: there is the usual Pergraniteel, but the rest of the furnishings are sparse and cheap. (staged?) Fugly design. “Private” backyard which is anything but. Next McMansion is 15 feet away. They cut down a forest to build this development (the outdated zillow map shows all trees). Located directly off of a major highway which jams every morning.

Built: 2007.
Sold: 2007 $735K
Listed in June: $610K
Listed now: $589K

—–
Next up: a wishing price 1963 small home in the same town:

http://www.zillow.com/homedetails/16014-Barnesville-Rd-Boyds-MD-20841/37269929_zpid/#{scid=hdp-site-map-list-address}

1/2 acre. 2/1 small but with a walk-out basement. Outside looks pretty but haphazard, looks like a renovation where the owner gave up. They don’t show the inside at all — bad sign. The price is just far too high for what you’re getting.

Sold 2000: $155K
Listed 9/2010: $318K
Listed 2/2011: $299K

———
Lastly, strange unit:

http://www.zillow.com/homedetails/19901-Stoney-Point-Way-Germantown-Md-Germantown-MD-20876/2125753233_zpid/#{scid=hdp-site-map-list-address}

It’s a 1/1 one-level unit tacked on the end of a row of townhomes. I admit, it’s cutie patootie on the inside, but maybe because this is what I’m used to living in. They say “perfect for downsizers;” but wow you’d have to downsize WAYYY down.

Listed $155K. The listing rattles off all the amenities, which means there’s probably a hefty HOA fee on top. What downsizer wants to pay HOA on a fixed income? If I were to downsize, it wouldn’t be to something like this.

Comment by Realtors Are Liars®
2011-07-31 06:03:19

The McCrapShack is truly offensive. A friend of mine has one that is similar but larger on a larger lot and same price range too but in NY. It’s only he and his wife but I keep my mouth shut because I like him alot. Both of their comments have insinuated they made a mistake. The can afford it for now but his biz is down still (freelance accountant).

Comment by Sarah
2011-07-31 06:31:06

What is going on with the all siding box above the garage? I guess the people that originally bought it needed more walk-in closet space for crap they dont need, and the developer didnt bother consulting an architect on the matter. Brick only on the front and the patio out back are also unacceptable. When someone just puts brick on the front it really brings home the point the builder believes in cutting corners whenever he can. Why buy a home from a builder who is in your face with the fact he doesnt give a damn about quality, and if the buyer cant spot something in less than a mili-second he doesnt want to do it right and he is more into flash than substance? I find brick fronts so insulting that I would never consider a house with one.

Comment by oxide
2011-07-31 06:48:22

I agree with you Sarah. I would guess that McMansions began popping up in the mid 1990’s. Before that, they were just “nice houses.” But as they demanded higher and higher % profit, the house went from brick to “brick front.” Roof eaves disappears, lots shrunk, detail disappeared…

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Comment by sleepless_near_seattle
2011-07-31 10:09:22

And the garage became the center piece around which the rest of the house was built.

 
Comment by oxide
2011-08-01 05:39:11

They built the house on top of garage so they could save on land.

 
 
Comment by alpha-sloth
2011-07-31 06:59:26

“I find brick fronts so insulting that I would never consider a house with one.”

They had a problem in one neighborhood of McMansions around here with the front facade separating from the rest of the vinyl box house. It caused all sorts of leakage problems. They worked on them forever but I’m not sure if they ever could really fix the problem.

I always thought that was an amusingly symbolic problem. ‘We can’t keep the damn crappy houses attached to their fake well-built fronts!’

Maybe they should just move on to giant trompe l’oeil paintings of attractive houses in front of the crapshacks. And on the ‘homeowners’ side they could paint a picture of fields and streams, rather than them seeing the fugly crapshacks across the street.

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Comment by oxide
2011-07-31 07:23:44

They already have that. They call it “put a Kinkade over the fireplace.”

 
Comment by alpha-sloth
2011-07-31 08:03:24

“They already have that. They call it “put a Kinkade over the fireplace.””

I think now it’s ‘put an 80 inch plasma TV on the wall’.

 
Comment by sleepless_near_seattle
2011-07-31 10:14:49

I think now it’s ‘put an 80 inch plasma TV on the wall’.

Naw. The Kinkade is heavy, but they’ve done the math and the 80″ will most certainly peel off the Chinese drywall…

 
 
 
 
Comment by michael
2011-07-31 06:10:26

the first house is proof that while the rest of the country’s bubble was popping…the DC metro area was blowing and going.

 
Comment by Bill in Carolina
2011-07-31 06:58:56

Attn: Palmy. Just an example. Nine year old, 3/2.5, 2-car garage, 1700 SF in southern Greenville suburbs. No hardwood, tile, granite or stainless. $135K.

http://www.zillow.com/homedetails/242-Bonnie-Woods-Dr-Greenville-SC-29605/63662238_zpid/#{scid=hdp-site-map-bubble-address}

Comment by palmetto
2011-07-31 07:24:43

Thanks for the tip, Bill. I’ve been sort of informally browsing Craigslist in the Asheville area and a similar property would be at least twice as much. I am shocked, I tell you SHOCKED at how much property costs in Asheville and its surrounding area. However, my goal is to land a place where the summers aren’t as vicious as they are here in Florida. Which means elevation of some sort. I think I’ll probably rent first and scope things out for a while.

 
Comment by oxide
2011-07-31 07:27:30

Is it just me, or is half that furniture computer-generated? The yard looks nice, if plain.

 
Comment by alpha-sloth
2011-07-31 07:29:16

Blech.

Greenville, SC Median household income $33,000
Median house/condo price $190,000
5.75 x income

Seems a little high…

Comment by Realtors Are Liars®
2011-07-31 07:39:32

Prices are grossly inflated in flyover country too? You don’t say!!!

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Comment by Watching and Waiting
2011-07-31 07:55:25

The Boyds property is lovely. I imagine the ‘very private’ backyard on a 6,000 foot lot is bricked over into a patio of sorts … as it appears that not much sun would get in there due to the proximity of the neighboring McMansions.

 
 
Comment by michael
2011-07-31 05:48:52

Stossel listed a bunch of cuts last night that would put us in a surplus that sounded good to me…including a $ 475 billion cut to defense.

Comment by michael
2011-07-31 05:57:35

Those cuts would probably negatively impact a member of my family…but this mess we are in is one of the reasons I have been saving over half my income the past 6 years.

Comment by combotechie
2011-07-31 06:30:00

“… I have been saving over half my income the past 6 years.”

There are those on this message board that will consider you foolish for doing so because in their view hyper-inflation will destroy the value of the dollars you saved.

But I think thay are wrong because all the spending cuts everyone is talking about will cause a shrinking of dollars in circulation and this shrinking will make dollars scarce, not plentiful as the hyper-inflationists predict.

But .. we shall see.

Comment by In Colorado
2011-07-31 07:40:38

If they keep rolling out QE after QE to fund the deficits you don’t think there will be an effect? Do you think that cutting 3 trillion over 10 years will even make a dent on the deficit? They won’t even be able to let the SS tax holiday expire, out of fear that it will affect economic growth.

Of course, there are ways to save other than in bank accounts that pay less than 1% interest while the real cost of living rises at a much steeper rate, but they involve risk.

What is interesting is that I see lots of “We Buy Gold” signs, but I never see any “We Sell Gold” signs. Might it be that those with all the money (who are buying and hoarding the gold) know something we don’t?

As for hyperinflation, it’ll depend on how much cash the Fed creates. And since our elected leaders lack the will to tame the deficit I forsee a long string of QEs with a steadily increasing M1 and M2. Of course they are hoping/gambling that they can keep inflation below double digit rates while they continue to kick the can down the road.

It will be interesting to hear the chorus of howling protests around the world over QE3 as our bondholders scream at the prospect of their low interest rate Treasuries being devalued yet again.

I find it almost whismsical when 3rd world finance ministers lecture the US on “fiscal responsibility”.

Having lived in a country that also played “kick the can” while inflation became steadily worse (and it didn’t start out all that bad at first) the current “fiction economy” we live in feels eerily familiar to me. This doesn’t mean that we will descend into a Weimar or Zimbabwe scenario. Inflation in Mexico did briefly reach about 175% in 1988, but it tapered off to around 15% within a year, courtesy of the severe austerity programs that took effect.

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Comment by Bill in Phoenix and Tampa
2011-07-31 08:14:20

The interest on the debt over the next ten years will more than offset the $2.8 trillion. So I’m in the inflation camp.

 
Comment by measton
2011-07-31 18:39:28

Don’t forget with long term treasury yields falling, there has been some downward pressure on the interest on the debt.

 
 
 
Comment by Professor Bear
2011-07-31 08:27:22

“I have been saving over half my income the past 6 years”

That’s doable if you have income and no kids; if you have several kids, good luck.

I notice we are moving into a state of the world where the struggle to raise a family is increasing. Perhaps that explains why the U.S. birth rate is near or at a 100-year low.

Comment by cactus
2011-07-31 09:06:35

That’s doable if you have income and no kids; if you have several kids, good luck.

I notice we are moving into a state of the world where the struggle to raise a family is increasing. Perhaps that explains why the U.S. birth rate is near or at a 100-year low.

we live in costal CA too expensive. Bill can move to Phoenix and live super cheap. Phoenix is not that great for kids though too many Herion addicts a friend moved back from there with his daughter for that very reason. crazy huh.

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Comment by Bill in Phoenix and Tampa
2011-07-31 09:51:48

I didn’t know there were a significant amount of heroin freaks in Phoenix. Figured it was mostly meth among the trailer trash.

My apartment in Phoenix is $941 per month. And I’m considering downsizing from two bedrooms to one bedroom if defense cuts means to go back to $65,000 annual income. But will wait a year. Have a lease to sign soon.

You are right. Living is cheap in Phoenix.

The birth rate among white educated people is at a 100 year low. The illegals are multiplying like rabbits. This means a glut of low skilled people in a few years and not enough college educated people. We are rapidly getting into an idiocracy.

 
Comment by SV guy
2011-07-31 10:20:03

“The birth rate among white educated people is at a 100 year low. The illegals are multiplying like rabbits.”

So true. This fact gets reinforced for me every day while I work at our county hospital’s expansion.

 
Comment by Happy2bHeard
2011-07-31 10:50:24

As abortion and birth control become relatively more expensive and harder to find, this trend will increase.

 
Comment by Professor Bear
2011-07-31 11:53:09

“The birth rate among white educated people is at a 100 year low. The illegals are multiplying like rabbits.”

I should have clarified that I meant white educated people. Most people with an education are wise enough to not overburden themselves with the costs of raising a family.

I should add that we had our family well before the Housing Bubble went parabolic; if I could have seen it coming back then, we might have planned differently.

 
 
Comment by michael
2011-07-31 11:57:16

thats funny…i have just one kid (maybe not saving half since he was born 22 months ago) and my wife just had a discussion on whether or not to have another one.

the cost of housing and the current economic conditions were a major part of the discussion.

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Comment by Bill in Phoenix and Tampa
2011-07-31 14:03:12

Somehow I don’t think you are in California though.

 
 
 
 
Comment by Darrell_in_PHX
2011-07-31 06:17:58

Did he calculate the lost revenue from the depression that would result from that level of cutting?

Comment by michael
2011-07-31 06:54:12

I’m confused…can we or can’t we spend our way out of this?

Comment by combotechie
2011-07-31 07:00:14

Lol. There it is.

If the solution to every problem involves spending money then a spending problem can never be solved.

If this is hard to understand then condsider an analogy: If the solution to a drug addict’s problem is getting more drugs then he will always be a drug addict.

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Comment by michael
2011-07-31 07:12:43

I agree…it’s just the recent debt debate has turned the commentary on this blog inside out.

In the past most commentators agreed that debt is slavery….extend and pretend is terrible policy and shouldering the taxpayers with private debt was evil…but in recent weeks…the contrary has been the majority.

 
Comment by alpha-sloth
2011-07-31 07:15:11

Forget moralistic analogies, how about explaining this chart, showing national debt as percentage of GDP (the real measure) dropping steadily for decades (until Reagan!) even as government spending increased. We needn’t starve ourselves and forgo medical care, as the moralizers/apologists for the rich would have you believe. We just need to tax and spend wisely. Growth and old Mr. Inflation will take care of the rest:

http://zfacts.com/p/1195.html

But it’s incrementalist, so the rash born-againers won’t like it, and it involves slightly complex ideas, so some fearful minds won’t be able to grasp it. But what are you gonna do?

 
Comment by combotechie
2011-07-31 07:22:18

Agree. There’s me and you, a crowd of two.

But stick around, more will be joining our ranks.

Meanwhile pop up some popcorn.

 
Comment by Darrell_in_PHX
2011-07-31 07:30:30

We need cuts. $400B cut in spending is not a $400B cut in the deficit because we need to factor in the lost tax recipts that will occur based on those spending cuts.

The real bottom line is that we need to bring the industrial jobs back on shore, plug the trade deficit, and eliminate the underlying need for all this new debt.

In short, we need to undo the last 40 years of “economic progress”.

My only point is that we can’t cut our way out of the problem either.

Debt is the symptom of trade deficits and job off-shoring. Debt is how we have ignored reality.

We need to attack the root problem, not think we can kill the weed by clipping a few leaves.

 
Comment by combotechie
2011-07-31 07:35:29

“We just need to tax and spend wisely.”

This is my point. If something is worth spending money on then it should be worth paying for.

Wise spending and taxing decisions should produce a balanced budget. Inflow and outflow should cancel each other out.

If the outflow of money continues to be greater than the inflow of money then eventually a bankruptcy will entail and those who are owed money and are promised money will end up getting screwed.

 
Comment by Professor Bear
2011-07-31 08:54:19

“…how about explaining this chart, showing national debt as percentage of GDP (the real measure) dropping steadily for decades (until Reagan!)…”

Here is an explanation:

1) Since *everyone* knows they are the fiscally responsible party, Republicans get to run up debt like drunken sailors when they are in office, and take the credit for the economic boom they generate (at least in Reagan’s case; perhaps W lacked the luck of the Irish).

2) Since *everyone* also knows the Democrats are a gang of tax-and-spend liberals, Republicans work hard to force reduction in government spending during Democratic presidencies, inadvertently generating statistics like that graph, which provides the perverse impression that it is the Republicans who are the fiscal profligates.

 
Comment by alpha-sloth
2011-07-31 10:24:37

Interesting theory, Prof, but it was decreasing under Dem and Repub administrations, until Reagan.

 
Comment by Itsabouttime
2011-07-31 10:43:30

Also, during most of those years of reduction, democrats controlled both houses of congress.

 
Comment by Professor Bear
2011-07-31 11:17:13

“…it was decreasing under Dem and Repub administrations, until Reagan.”

The Reagan legacy made honest taxation political anathema, and so long as you are going to have a government, taxes are a handy and open way to pay for it.

 
 
Comment by Darrell_in_PHX
2011-07-31 07:25:56

We can not.

However, we can’t assume that a 66% cut in DoD will not lower tax revenues.

Do we need massive cuts? YES. Will those massive cuts occur in a vacume that has no effect on the economy? NO!

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Comment by In Colorado
2011-07-31 07:42:32

I’m confused…can we or can’t we spend our way out of this?

Of course not. Eventually serial QEs will bite us in the keister. But we are still at the stage where we can kick the can down the road with minimal pain.

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Comment by combotechie
2011-07-31 08:01:16

“But we are still at the stage where we can kick the can down the road with minimal pain.”

Or we can stop kicking the can down the road altogether.

Kicking the can down the road is what has gotten us here. Continuing to kick the can down the road is what will keep us here.

 
Comment by Darrell_in_PHX
2011-07-31 08:09:51

“Or we can stop kicking the can down the road altogether.”

But we can not stop kicking the can down the street until the USA population is willing to accept 50% cuts to DoD and Social Secuity, until they are willing to accept true death panels setting what is and is not covered by Medicare.

We can not stop kicking the can until we are willing to accept a Greater Depression, and changes in economic policy which will be required to bring our industrial base back on shore.

We can not stop kicking the can until we are willing to allow 50% of debt to default, until we are willing to allow stock prices to fall to a fundamentally sound level based on much lower corporate profit levels affter we’ve let 50% of debt default and locked new debt growth to the sustainable rate of inflation and population increase.

We can’t stop kicking the can until we are willing to undo the last 30 years of “economic progress”.

 
Comment by X-GSfixr
2011-07-31 10:39:56

The debt problem is a symptom.

The fall of US manufacturing, with a lot of help from decisions made by the CEO/bankster class is the root of the problem.

Can’t pay bills with no income.

Twenty years ago, it “overpaid union auto worker” making $60/hr was the problem

Today, it the $15/hour union teacher that’s the problem. Or the overpaid $12/hr Walmart greeter.

Methinks it’s maybe time to be looking somewhere else for the solution to some of these problems.

 
Comment by ecofeco
2011-07-31 13:35:50

Exactly, X-GS.

Millions of good paying jobs went overseas and along with them, the tax revenue.

Half of all large corporations pay no income taxes in any given year, even thought they’ve made profits, but still won’t hire and want even MORE tax breaks.

Corporation are GIVEN, GIVEN!, tax breaks for sending jobs offshore.

While J6P ain’t be real smart, this problem was not made by him.

 
 
Comment by Bill in Phoenix and Tampa
2011-07-31 15:32:59

Michael, if you can spend your way out of a credit card debt, and keep getting your credit card limit raised, then government can spend its way out of debt.

Same principle except it’s worse with government: They can print more money.

Maybe you should ask if we can inflate our way out of this. Inflation would make us like many South American countries in the 1970s. But it would certainly boost gold prices!

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Comment by Darrell_in_PHX
2011-07-31 07:20:28

I looked up his actual cuts:

A lot of it is HIGHLY flawed.
“Medicare/Medicaid*: $441 billion (Cato Institute)”

Follow the link…. it has a plan to hand states a block grant based on 2011 expendature and doesn’t adjust for inflation or the number of people Medicare eligable. The plan will save us $400B a year BY 2021.

Well duh!!!!

The people currently Medicare eligable were born at a rate of 2.2 milion(1930) to 2.8 million (1945) per year. Those retiring in the next 10 years were born at a rate of 3.5 million (1946) to 4.1 million (1955).

This is why the Federal budget predicts Medicare spending will increase from $500B to $800B over the next decade.

So, give state the same amount of money, but expect them to cover 70% more people. The other $100B savings comes from not adjusting Medicare or Medicaid for inflation.

AND, that $400B a year savings doesn’t come this year. It comes from future growth in spending as the number of people eligable increases. You can’t subtract that from this year’s deficit and say you have created a surplus.

“Defense cut by 2/3: $475 billion (Federal Budget, pg. 58)”

Best estimates I could find is that 5 million people are employed directly by DoD and contractors. Cutting 2/3rds of that budget would eliminate some 3 million direct jobs and add 3% to the unemployment rate. The echo effects of those job cuts would be much deeper.

I am not saying it is a bad idea. My own “feels right” cuts to DoD would be 50%.

My point is, you can’t make these kinds of cuts without assuming that tax revenues will fall in the recession that is sure to follow.

“Social Security Means Testing: $170 billion (Heritage Foundation)”

Again, this is the estimated savings 10 years from now when there are 70% more people collecting. Actual savings this year would be less than $100B.

My problem with means testing is that it encourages people to not save, to lie, to hide income and assets, etc.

“Eliminate Dept. of Education (includes Pell Grants): $106.9 billion (Cato Institute)”

I do not really care if I pay federal income tax or state. Eliminate the dept of education and dump those costs on the state, doesn’t save me anything.

Social Security*: $85.7 billion (Cato Institute)

1) this is another one of those where the savings is 10 years from now, but he’s assuming we’re saving it this year when he subtracts the amount from this year’s budget.

2) The savings assumes that wages will always go up more slowly than prices. Shift COLA from price to wage based inflation and save $85 billion a year, 10 years from now.

“Eliminate Dept. of Transportation: $84.8 billion (Cato Institute)”

We don’t need no stinking roads, coast guard, airport security…..

Oh, the states will pick up these costs. Again, doesn’t matter to me if my taxes are fed or local. And, there simply won’t be any highways across Wyoming, Montant or the Dakotas where there is not nearly the tax base required to support them. Guess companies looking to ship good from Oregon to Minisota will have to go through….. Hmmm… Not Idaho, Utah, Nevada, Arizona as all of them have more roads than people to pay for them… I guess they are going down through the Panama Canal.

“Eliminate Dept. of Labor*: $78.6 billion (Department of Labor and White House)”

$60B of this savings comes from elimination of unemployment insurance which is currently collecting anout 44B a year but spending more than $105B a year.

The rest is stupid stuff like OSHA and other worker safety enforcement, labor statistics, etc.

Everything else gets smaller and smaller.

Comment by aNYCdj
2011-07-31 10:18:57

Darrell:

Logically you are correct, but have you seen most seniors they are flat out stupid. So if they tried they would easily get caught.

“Social Security Means Testing: $170 billion (Heritage Foundation)”My problem with means testing is that it encourages people to not save, to lie, to hide income and assets, etc.

 
Comment by aNYCdj
2011-07-31 11:15:49

Again Darrell:

You offer no solutions…just cut…in fact we need the opposite More regulations to prevent discrimination in the workplace mostly now against white people.

In exchange for eliminating the corporate income tax.

We need to make work pay….and that means ALL JOBS even low or no pay intern ones have to be subject to EEOC.

We need to triple the size of the labor board to eliminate the massive violations of labors laws today….so that 90% of the complaints are settled in 90 days…

Yes cut unemployment to 26 weeks UNLESS you are in some job training or “intern” job

What good does it do me if i am forced to get my CDL license and work for Fresh Direct delivering food to rich people just because the city/state will pay for it…and yet they wont pay for advanced web skills or advance video audio skills and an intern job because well i’m white.

The racism in job training is blatant OH’s stimulus package allocated 2500 new subsidized jobs for people and 90% went to the parks department, and they are 86% minority,,,so there has been NO job training funds available since February and may not be any till October for white folks course.

“Eliminate Dept. of Labor*: $78.6 billion (Department of Labor and White House)”

$60B of this savings comes from elimination of unemployment insurance which is currently collecting anout 44B a year but spending more than $105B a year.

 
Comment by Happy2bHeard
2011-07-31 11:26:28

“And, there simply won’t be any highways across Wyoming, Montant or the Dakotas where there is not nearly the tax base required to support them. “

Or they will become toll roads, maybe sold off to the highest bidder, like the parking meters in Chicago. And the cost of maintenance (and profit) will be passed on to consumers in increased costs of shipping.

 
 
Comment by Professor Bear
2011-07-31 08:30:13

“…cuts…”

Big, serious question:

Will Uncle Sam still be able to afford his ‘unaffordable housing’ program (i.e. using federal tax dollars to maintain a floor under housing prices) in the wake of the debt ceiling deal?

Comment by wmbz
2011-07-31 08:39:57

“Will Uncle Sam still be able to afford his ‘unaffordable housing’ program (i.e. using federal tax dollars to maintain a floor under housing prices) in the wake of the debt ceiling deal”?

Of course, Barry has made it abundantly clear that stabilizing the housing market is one of his top priorities. That’s one of the main reasons voters sent him there.

 
Comment by Darrell_in_PHX
2011-07-31 08:41:06

The housing subsidies are pretty small. I am not sure of the numbers off the top of my head, but the annual handouts to Freddie and Fannie are in the $10 billion range, and the FHA is off-book because we assume the fees will make back all losses.

Comment by Professor Bear
2011-07-31 09:07:53

I don’t recall the Tea Party people ever once mentioning this urgent issue in their urgent saber rattling over the need to hold the line on the debt ceiling.

Reuters Breakingviews
Time for Action on Freddie and Fannie
By AGNES T. CRANE, GEORGE HAY and PETER THAL LARSEN
Published: July 18, 2011

A year after passage of the Dodd-Frank act, the $10.5 trillion American mortgage market remains in limbo. One big reason is that the law scarcely touches Fannie Mae, Freddie Mac and the Federal Housing Administration — the government-run lenders that dominate the home loan market.

The federal government took over Fannie Mae and Freddie Mac in 2008.

The consequences of lax mortgage lending were central to the crisis that Dodd-Frank was intended to make unrepeatable. But rather than tackle the huge and highly political issue of Fannie, Freddie and the F.H.A., the law narrowly focused on one part of the market. That’s the private-label mortgage-backed securities area, source of more than $3 trillion of mortgage bonds from 2002 to 2007.

The most significant new rule could require private sector financial institutions to hold at least 5 percent of securities they create by repackaging loans. Giving them some incentive to ensure the securities are creditworthy isn’t a bad idea, but it reinforces the notion that the private sector is at a competitive disadvantage to government lenders if it returns to the mortgage-backed business. That’s because Fannie and other government-run programs would be exempt from this requirement.

The risk retention rule plays into another Dodd-Frank initiative: the creation of standards for safer home loans known as qualified residential mortgages. Such loans, in which the proposal is that homeowners must put 20 percent down, among other criteria, would be exempt from risk retention requirements.

Banks, real estate lobbyists and consumer groups want looser standards because mortgages that don’t qualify could be costlier. That hardly seems catastrophic for borrowers when 30-year mortgage rates are as low as 4.5 percent. But it’s easy to see the point when federally backed housing agencies sometimes allow homeowners to borrow 96.5 percent of the value of their homes.

In short, the reform effort so far seems to make it harder for the private sector to re-establish itself while entrenching the cost, and risk, with taxpayers. Congress and regulators must assess housing finance as one market. Until the future of the hulking government mortgage finance companies is mapped out, the worthy goals of Dodd-Frank don’t mean much.

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Comment by mikeinbend
2011-07-31 09:27:43

20% down did not help my wife much as her property plummeted from the stratosphere more quickly than she could sell it, even at 20% less than she paid. She got to take the risk; the loan got sold off to Fannie Mae.

But the bank sold it at face value to investors; I guess they paid them off 8.5 billion and will foreclose more quickly on the hopeless 60x income loan holders like my wife who make too little to qualify for a new loan of almost any amount.

Why did she lose her “fortune”? Cuz RE went down and she took a risk on investing in it.

 
 
Comment by Professor Bear
2011-07-31 09:12:03

“…but the annual handouts to Freddie and Fannie are in the $10 billion range…”

Do you have a reference for that figure?

Because my sources differ with it.

Reuters Breakingviews
Housing reform sinks to Fannie/Freddie mash-up low
Jul 7, 2011 16:28 EDT
By Agnes T. Crane
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

For the clearest sign yet that U.S. housing reform is floundering, just take a look at the latest proposal. Two lawmakers, with industry lobbyists in tow, are heralding a union of Fannie Mae and Freddie Mac, which would leave the government still in charge. Even more than other ideas floating around, it would preserve the status quo. It only goes to show just how weak the political will is for a real fix.

The full details are still forthcoming but early reports hardly inspire much confidence. The newly created Frannie, as it were, would look a lot like the old government-sponsored entity framework. It would buy mortgages, package them into tradable bonds and, most significantly, come with a government guarantee. After pumping more than $160 billion into Fannie and Freddie, Uncle Sam should be seriously questioning guarantees, not embracing them.

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Comment by Darrell_in_PHX
2011-07-31 09:25:30

Ooops. I had it wrong. It isn’t $10B a year. It is $15-20B a year…. THAT THEY ARE PAYING US BACK.

We gave them $160B in 2008. They gave us back $22B last year, will give us back $15B this year, are expectedc to give us $21B back next year….

http://www.gpoaccess.gov/usbudget/fy12/fct.html

Search for GSE

 
 
 
 
 
Comment by wmbz
2011-07-31 06:50:58

Recession: $131 billion worse than we thought

NEW YORK (CNNMoney) — The depths of the Great Recession were even greater than originally reported — by $131 billion, to be exact.

According to new data released by the government Friday, U.S. economic output plunged 5.1% from its height at the end of 2007, to its trough in mid 2009.

The Commerce Department had previously calculated a 4.1% decline.

In dollars, the math shows the U.S. economy lost $685 billion during that time, compared to $554 billion previously reported.

Those new numbers come as the Commerce Department revised its economic data back to 2003 on Friday.
Recovery slows as consumers pull back

Based on the new data, the economy still has to grow by another $56 billion, before the United States has fully recovered all the economic output lost during the recession.

While that would have been an easy feat when the recovery was picking up pace just a few quarters ago, economic growth has recently slowed to a snail’s pace.

The economy grew by only $12 billion, or 0.4%, in the first three months of the year, and $42 billion, or 1.3%, in the second quarter. To top of page

Comment by combotechie
2011-07-31 07:17:02

“In dollars, the math shows the U.S. economy lost $685 billion during that time…”

Poof. Gone, but not forgotten.

“Recovery slows as consumers pull back.”

Which means more poof is on its way.

Cash …

Comment by In Colorado
2011-07-31 07:45:23

Don’t worry, the fed will print more … lots more

Comment by combotechie
2011-07-31 07:49:38

Good. That means our money problems will be behind us and we can forever party on.

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Comment by cactus
2011-07-31 09:01:22

Don’t worry, the fed will print more … lots more

And loan this printed money ( electronic ) to US Banks at 0% who will loan it to Brazil and cause 15%-30% inflation there.

I don’t think it will do Jack to the US economy except cause food and energy inflation which will cause overall deflation as higher Food and energy costs will force US consumers to cut back on everthing else.

taxes will go up too to defend treasuries from downgrading and higher interest rates.

Deflation thats my bet.

Gold is a bet on a dollar devaluation and or a lack of demand for the dollar which could happen, I’m hoping it doesn’t I get paid in dollars. I think Washington will try and fix the deficeit, we will endure another recession, and bond yeilds will go towards zero like Japan.

like Combo says we will see

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Comment by wmbz
2011-07-31 06:53:23

Obama to get his wish.
Debt ceiling to be raised beyond the 2012 election.

The U.S. Senate didn’t vote on its debt limit bill in the wee hours this morning. The vote may come this afternoon shortly after lunchtime. It would raise the debt ceiling by $2.4 trillion (to $16.7 trillion) in two stages. It would extend borrowing authority beyond the 2012 election, which is what President Obama has been pushing for all along. He does not want to debate the debt question during the presidential campaign.

Here’s the joke - which really isn’t very funny. The first stage of this deal would raise the borrowing limit by about $1 trillion. Cuts to government agencies would also be about a trillion. The humor enters the equation when you realize that the trillion of cuts would be stretched out over a period of ten years. Got it? You get your additional trillion right now and don’t have to worry about the collateral cutbacks for years. . .if ever!

Comment by Professor Bear
2011-07-31 08:24:19

“Cuts to government agencies would also be about a trillion.”

Perhaps it is time to privatize some of those government agencies, as everyone knows the private sector operates better than government.

They could call these new private-public partnerships ‘government sponsored enterprises.’

Comment by Happy2bHeard
2011-07-31 21:10:27

And hire people in low cost countries to do the work.

 
 
Comment by jeff saturday
2011-07-31 08:59:25

The trouble with trillions

Posted: April 08, 2011
1:00 am Eastern

I suspect one of the reasons Americans are not marching on Washington to stop the debt limit from being raised, an action that will allow the borrowing-and-spending madness by the federal government to continue, is because the numbers just make their heads spin.

How many of us, for instance, even have a concept of what 1 trillion represents – let alone 14.3 trillion – the current debt limit in dollars.

It’s hard for most of us to appreciate the magnitude of even 1 million. How often do any of us deal with 1 million of anything?

So let’s take a minute to put these figures in perspective:

•1 million seconds equals 16,667 minutes or 278 hours or 12 days;

•1 billion seconds equals 16,666,667 minutes or 277,778 hours or 11,574 days or 32 years;

•1 trillion seconds equals 16,666,666,667 minutes or 277,777,778 hours or 11,574,074 days or 31,710 years.

Does this help?

Let’s make it even simpler:

•1 million seconds equals 12 days;
•1 billion seconds equals 32 years;
•1 trillion seconds equals 32,000 years.

A million, a billion and a trillion may sound similar, but they are very different animals, I think you would agree.

http://www.wnd.com/index.php?pageId=284381 - 35k -

Comment by Darrell_in_PHX
2011-07-31 09:31:20

We are not marching on Washington because people have not realized that we need to cut 50% from DoD and Social Secuirty, not to mention death panels for Medicare.

As long as we can continue to ignore reality and maintain the status quo, there will be no marches with pitchforks.

However, once forced to face reality, which is inevitable, the torches and pitchforks will be brought to the street.

Comment by jeff saturday
2011-07-31 10:07:13

Now calm down Darrell.

Take a deep breath, count to a trillion and you will feel better.

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Comment by ecofeco
2011-07-31 13:41:53

Cut SS? Tried living on $1000 a month lately?

In ADDITION to medical bills?

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Comment by SV guy
2011-07-31 10:29:59

“Debt ceiling to be raised beyond the 2012 election.”

Did anyone ever think there would be a different outcome?

Comment by Itsabouttime
2011-07-31 10:51:55

Does anyone really think its a good idea to have this debate during an election year? If we can’t expect our elected representatives to behave responsibly during a non-election year, how can you expect them to behave responsibly during an election year?

Bash Obama all you want, but only an idiot would schedule an essential decision for a time when all parties to the decision will have no incentive to behave responsibly.

 
 
 
Comment by Sammy Schadenfreude
2011-07-31 07:13:51

http://market-ticker.org/akcs-www?post=191076

Some “tea party” representatives starting to remember why they were elected.

Comment by Hwy50ina49Dodge
2011-07-31 08:51:49

Jib-Jab / ping-pong / teeter-totter ;-)

Viewpoints: It’s time to toss out the fragging tea party:
By Kathleen Parker / Published: Sunday, Jul. 31, 2011 / Sacramento Bee

“Who’s overplaying their hand now?

It must be said that the tea party has not been monolithic – and the true grass-roots shouldn’t be conflated with leaders who disastrously signed on to the so-called “Cut, Cap and Balance” pledge. What is it with Republicans and their silly pledges? Didn’t get enough Scouting? This pledge now has them hog-tied to a promise they can’t keep – the constitutional balanced-budget amendment. As many as a third desperately want a pardon from that commitment, according to sources close to the action.

but the bottom line is that the tea party got too full of itself with help from certain characters whose names you’ll want to remember when things go south. They include, among others, media personalities who need no further recognition; a handful of media-created “leaders,” including Tea Party Nation founder Judson Phillips and Tea Party Patriots co-founders Jenny Beth Martin and Mark Meckler (both Phillips and Martin declared bankruptcy, yet they’re advising tea party Republicans on debt?)

Both sides are polite at private meetings, but the Tea Party’s gloves come off in public.

The best example of that occurred June 27, when some unpleasantness between Chairman Ken Bryan and Tea Party Chairman Eric West in St. Johns County Auditorium became a viral political issue.

West said Bryan nearly assaulted him. Bryan said he believed that Tea Party members were harassing his wife and stood up to defend her.

It wasn’t a shake-hands-and-walk-away thing. Tea Party members videotaped the confrontation and emailed a series of unflattering photographs of Bryan to the media.

Hubris is no one’s friend and irony is a nag. The tea partiers who wanted to oust Barack Obama have greatly enhanced his chances for re-election by undermining their own leader and damaging the country in the process. The debt ceiling may have been raised and the crisis averted by the time this column appears, but that event should not erase the memory of what transpired. The tea party was a movement that changed the conversation in Washington, but it has steeped too long and has become toxic.

It’s time to toss it out.”

Local GOP, Tea Party ‘at war’
Tea Party: We’re all Republicans | GOP: Fight over control of party
By PETER GUINTA / July 31, 2011 / The St. Augustine Record

“The Tea Party doesn’t like people to stand up to them, They don’t want to confuse their stance with facts.”

Establishment Republicans say Tea Party members have spoken against other Republicans, especially the three county commissioners up for election in 2012.

Such speech is supposedly a violation of the party’s loyalty oath.

McCain erupts: Conservatives are lying to America:
By Greg Sargent /Washington Post / 07/27/2011

In a seminal moment in this debate, here’s some video of McCain on the Senate floor today, unleashing an angry tirade at conservatives who are still holding out for a balanced budget amendment as part of any compromise on the debt ceiling. McCain accused them of “deceiving” America into believing such a thing can pass the Senate.

“What is really amazing about this is that some members are believing that we can pass a balanced-budget amendment to the Constitution in this body with its present representation — and that is foolish,” McCain said angrily. “That is worse than foolish. That is deceiving many of our constituents.” McCain went on to rip the idea as “bizarro.”

McCain’s angry tirade on the Senate floor today perfectly captures the rising frustration, anger and panic of more responsible Republicans and GOP establishment figures as they come to terms with the true depths of the delusion that is now afflicting some on the right — and the danger it is now posing to our economy and country.

Comment by Sammy Schadenfreude
2011-07-31 09:31:39

McCain’s angry tirade on the Senate floor today perfectly captures the rising frustration, anger and panic of more responsible Republicans and GOP establishment figures as they come to terms with the true depths of the delusion that is now afflicting some on the right

Translation: Uber-RINO McCain and the political arm of the neo-con/Wall Street/military-industrial complex known as the Establishment Republicans are throwing a tantrum as the first serious check on their “cut taxes for the rich while spending massively on the pet schemes of their patrons and passing the unpayable bills to unborn taxpayers” emerges.

Comment by SV guy
2011-07-31 10:31:39

Keep the faith Sammy!

Gravity wins every time.

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Comment by wmbz
2011-07-31 07:57:19

How can this be? I thought bail-out #2 had it all fixed up. Good thing we don’t have any money problems.

Spain Remains in ‘Danger Zone’ as European Debt Crisis Persists, IMF Says (Bloomberg)

Spain is still in “the danger zone” and must keep up momentum in restructuring its economy to stave off contagion from Europe’s sovereign-debt crisis, the International Monetary Fund said.

“The outlook is difficult and the risks elevated,” the Washington-based IMF said in a report yesterday after a visit by staff to Spain. “The policy agenda remains challenging and urgent — there can be no let up in the reform momentum.”

The assessment coincided with Prime Minister Jose Luis Rodriguez Zapatero’s decision the same day to call early elections on Nov. 20 and Moody’s Investors Service’s warning that it may downgrade Spain. The euro-region’s fourth-biggest economy is trying to rein in surging borrowing costs that have pushed the yield on its 10-year bond above 6 percent, hindering efforts to stoke growth as unemployment stays above 20 percent.

Comment by Sammy Schadenfreude
2011-07-31 10:05:34

I assure you, the PIIGS have been rescued and the crisis has been contained. CNBC, Marketwatch, and all the other Wall Street fluffers said so.

 
 
Comment by Darrell_in_PHX
2011-07-31 08:13:31

Reality sucks. Lies are so much better.

Last night, the MSM leaked a little reality. They were playing clips by callers angry about the debt crisis(tm).

The last one they played was an obvious elderly lady based on the trembly voice. She says, “If we’d just cut foreign aid, we’d have more than enough money to take care of our own.” The reporter than said, well, actually, we spend about $45 billion a year in foreign aid, which is a drop in the bucket of our $1.5 trillion annual deficits.

Comment by combotechie
2011-07-31 09:07:52

“They were playing clips by callers angry about the debt crisis.”

Yeah? Good. I like anger.

Reason doesn’t seem to work. Logic doesn’t work either.

Maybe what was lacking all along was anger.

Comment by Darrell_in_PHX
2011-07-31 09:36:20

Why deal with logic, reason or data when it is so much easier to be angry at “that other party” that is the sole blame for reality.

 
 
Comment by Sammy Schadenfreude
2011-07-31 10:14:18

“If we’d just cut foreign aid, we’d have more than enough money to take care of our own.”

Translation: this elderly lady, and the Boomers who are starting to retire, feels righteous indignation because the cradle-to-grave government entitlements her and the Boomers voted for themselves at the expense of future generations are now increasingly unaffordable as fiscal reality sets in. After decades of voting for Establishment Republicrats whose disastrous domestic and foreign policies have squandered this nation’s blood and treasure and led us to the brink of ruin, the elderly and boomers are finally starting to squawk as they see their own benefits endangered and sense the financial reckoning they had blithely assumed would be borne by future generations, may have arrived sooner than expected.

Comment by ecofeco
2011-07-31 13:44:48

Oh please, the resources were there until Wall St. and the military industrial complex robbed us all.

Comment by measton
2011-07-31 18:58:44

BINGO

Don’t forget the trade policy that gutted the middle classes wealth. Some would rather be angry at Grandma.

Note Medicares bills would be much much lower if they were allowed to bargain more but congress prevents this. This leave device makers and drug makers free to charge INSANE prices. A drug that improves survival a couple months might cost120k plus doctors fees.

Medicare pays 60% more for drugs compared to the VA and a state program that was allowed to bargain for cheaper drugs.

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Comment by Bill in Carolina
2011-07-31 08:16:31

FDIC closed three more banks. Two of them should be no surprise, as their name plainly includes the abbreviation for “No Assets.”

The FDIC said it was appointed the receiver of Integra Bank Corp.’s Integra Bank NA of Evansville, Ind.; Virginia Business Bank of Richmond, Va.; and BankMeridian NA of Columbia, S.C.

http://online.wsj.com/article/SB10001424053111904800304576476720837224398.html?mod=googlenews_wsj

Comment by combotechie
2011-07-31 09:10:32

“No assets.”

Poof went the assets, into the Great Void, never to be seen again.

Ashes to ashes, dust to dust, thin air to thin air.

Comment by mikeinbend
2011-07-31 09:18:32

When will BofA be deemed insolvent? Cuz it oughta be.

Comment by Professor Bear
2011-07-31 10:04:40

After all, they did swallow Countrywide.

It brings to mind the image of a large snake’s mortification upon discovering what happens when it ingests a porcupine.

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Comment by X-GSfixr
2011-07-31 10:25:31

Remember that BoA wanted to back out of the Countrywide deal, but went ahead and did it, after some arm twisting by Paulson.

Maybe that was the deal……..acquire Countrywide, and get defacto immunity from prosecution, or take your chances with the DoJ.

 
Comment by SV guy
2011-07-31 10:36:42

“Remember that BoA wanted to back out of the Countrywide deal, but went ahead and did it, after some arm twisting by Paulson.

Maybe that was the deal……..acquire Countrywide, and get defacto immunity from prosecution, or take your chances with the DoJ.”

X,
Are you implying there may be corruption in our system? And here I thought our system was pure.

IMO this wildcard (corruption) is what will eat the popcorn eaters for lunch.

 
Comment by Professor Bear
2011-07-31 11:12:33

“Remember that BoA wanted to back out of the Countrywide deal, but went ahead and did it, after some arm twisting by Paulson.”

I assume nobody put a gun to their heads?

 
Comment by ecofeco
2011-07-31 13:46:46

Speaking of Countrywide, I just walked into their now empty and occupied by someone else, old regional headquarters the other day and was giggling the whole time. :lol:

 
 
 
Comment by Darrell_in_PHX
2011-07-31 09:47:12

Quickly replaced with some more asset buying by the Fed.

Comment by Sammy Schadenfreude
2011-07-31 10:17:25

QE III, followed by $3000 an oz gold, is a given. Zimbabwe Ben’s finger is quivering in anticipation of hitting the “print” button to forestall the financial reckoning day for the Federal Reserve-Wall Street looting syndicate.

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Comment by Professor Bear
2011-07-31 08:32:41

If it was economic uncertainty which led to the cancellation of these contracts, we might expect a lot more cancelled contracts soon to be announced due to the uncertainty caused by the debt ceiling showdown.

Economic uncertainty leads to canceled home contracts
By Kenneth R. Harney, Published: July 29

Are homebuyers walking away in droves from the contracts they’ve signed? Or are they essentially fouling out of the game, unable to close deals because of financing and credit issues?

Whatever the answer, this much appears to be certain: Exceptionally large numbers of signed real estate contracts fell apart last month, failing to reach settlement. According to the National Association of Realtors, one of every six real estate agents polled in June reported having signed contracts canceled before closing — up from just one in 25 the month before. The typical monthly cancellation rate over the past 16 months has ranged in a narrow band between 8 percent and 10 percent.

What’s going on here? Lawrence Yun, the chief economist of the realty association, says that the sudden swing is surprising and worrisome, and that there are no hard statistics available on the causes. The most likely suspects, Yun says, are low-ball appraisals and tough mortgage underwriting rules that knock buyers out of contracts through mortgage contingency clauses.

But interviews with brokers around the country suggest that there may be other, subtler forces at work that are busting up real estate deals.

Buyers’ confidence about the national economy has been badly rattled in the past several weeks by the gridlock in Congress over raising the national debt ceiling and cutting the deficit. In turn, brokers say, that is making buyers less willing to risk a major purchase, making them pickier and more demanding when defects are found in home inspections, and frequently leading to contract cancellations for relatively minor reasons.

Comment by Realtors Are Liars®
2011-07-31 09:02:40

“The most likely suspects, Yun says, are low-ball appraisals and tough mortgage underwriting rules that knock buyers out of contracts through mortgage contingency clauses.”

Hey Larry Yun…. you are a corrupt asshole.

Comment by Sammy Schadenfreude
2011-07-31 10:21:24

“…lowball appraisals and tough mortgage underwriting rules,” huh? I guess “hit the numbers” appraisals and non-existent underwriting standards got to be a bit too costly for FBs and banksters alike, and now the dissemblers of the NAR can’t find enough willing accomplices to perpetuate more fraudulent and unsound real estate transactions.

 
 
 
Comment by Professor Bear
2011-07-31 08:36:06

The Visitor

Homebuyers find unwelcome guest
Couple viewing home confront squatter
Antwain Pittman
By: JCFloridan Staff
Published: July 31, 2011

Prospective buyers of a home at 4395 Florence Drive in Marianna were surprised to discover someone was living in the supposedly unoccupied property they were being shown Friday.

They were even more surprised when they checked a closet and found a squatter hiding there.

According to a news release from the Marianna Police Department, a husband and wife viewing the home found the inside of it strewn with personal effects, miscellaneous change and “health care products.” Several other items which did not belong to the home owner were found “throughout the house,” according to the release.

As the prospective buyers moved through the house, they discovered the back door had been removed, and that a window on the front of the house had been broken out.

In one of the bedrooms, the wife made an attempt to open the closet door, “only to find someone was pulling back,” according to the news release. The wife told the occupant to come out of the closet. A man then exited, walking in an “aggressive and menacing manner” towards the woman. The husband then stepped between the man and his wife, and told the man to leave.

 
Comment by Sammy Schadenfreude
2011-07-31 08:39:28

http://www.investors.com/NewsAndAnalysis/Article/577794/201107081851/DOJ-Begins-Bank-Witch-Hunt.aspx

DoJ launching witchhunt against “biased” banks (i.e. banks that resist making mortgage loans to miniorities whose credit history indicates they are likely to default). Bush’s “ownership society” and social engineering schemes pushed by the likes of Chris Dodd and Barney Frank (and their well-conpensated accomplices at HUD, Fannie Mae and Freddie Mac) helped create the housing bubble in the first place (with the biggest part being played by the TBTF banks in their greed to unwrite sham mortgages and bundle them into MBSs that their rating agency accomplices would then rate “AAA” prior to foisting them off on unwary “investors.”)

Comment by CrackerJim
2011-07-31 09:25:15

Eric Holder at work. Shadow government policies to advance ideological tenets. But nothing to see here; move along.
The “fast and furious” ATF debacle comes to mind. The DoJ instructs ATF to farm weapons in to Mexico via US border area dealers. I believe Holder’s aim was to eventually do a media trumpet on how lax gun laws (his opinion, not mine) create a crisis and by golly he needs the power to do something!

Comment by Realtors Are Liars®
2011-07-31 09:40:56

“Shadow government policies to advance ideological tenets”

Which is different from your conservative hero Nordquist in what way?

Comment by CrackerJim
2011-07-31 10:13:38

Grover Norquist does not hold any governmental position, Holder does. He holds a position with powerful abilities to execute hidden agendas. Norquist is only a citizen openly espousing a political opinion.

BTW, I do not support domestic shadow government operations for nefarious ends from any administration. Your immediate comparison to someone else who may be equally nefarious (in your opinion) does nothing to subtract from my poor opinion of the present administration’s executive tack.
Either you agree with the Obama administration’s DoJ performance or you don’t. Which is it?

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Comment by Realtors Are Liars®
2011-07-31 11:42:44

That’s right. Grover Nordquist doesn’t. So why is an entire political party enslaved to him?

Ducking and weaving by making this about whether I agree with DOJ is really really amateurish.

 
Comment by CrackerJim
2011-07-31 14:18:38

“Ducking and weaving by making this about whether I agree with DOJ is really really amateurish.”

Poor amateurish me. You can’t embrace any thoughts other than your own. It must be lonely up there on the mount.

 
Comment by Realtors Are Liars®
2011-07-31 17:34:51

They’re your words my friend.

You accuse Holder of advancing an ideology and you clearly have a problem with it. Yet you don’t seem to have a problem with a corporate funded, un-elected ideologue of ideologues who hold an entire political party hostage.

Why is that? Stop dodging and answer the question.

 
Comment by nickpapageorgio
2011-07-31 23:58:58

I think the Mexican families of those murdered with Eric Holder’s guns have a big problem with it.

 
 
 
Comment by Sammy Schadenfreude
2011-07-31 10:24:18

http://www.borderlandbeat.com/2011/07/gunwalker-william-newell-circles-wagons.html

MSM is mostly pushing this story down the memory hole, as it does not comport to their meme of evil gunshop owners and gun show sellers fecklessly arming Mexican drug cartels.

Comment by jeff saturday
2011-07-31 11:09:10

Gunwalker scandal called “perfect storm of idiocy”

By Sharyl Attkisson
July 26, 2011 9:59 AM

The Oversight Committee has used internal documents and information to showing where Fast and Furious weapons have shown up and been used in Mexico. It reveals more recoveries than Department of Justice has disclosed to the Committee in official answers … and yet it’s still only a partial picture.

The Department of Justice had no comment on that aspect of the report.

The first large recovery of weapons sold to suspected drug cartel traffickers under ATF’s watch was on Nov. 20, 2009 in Naco, Sonora, Mexico. All 42 weapons (41 AK-47s and a giant .50 caliber rifle) traced back to Fast and Furious suspects. Some had been bought, turned around and delivered to the cartel practically overnight.

Yet ATF allowed the acquisitions and dealings to continue for more than a year, until December of last year, when Border Patrol Agent Brian Terry was murdered. Two Fast and Furious assault rifles were recovered at the murder scene.

On a recent visit to Mexico, the Oversight Committee was allowed to view bullet holes in one of two Mexican government helicopters recently shot at by cartel members … including a .50-caliber round that penetrated the bulletproof-glass windshield. Officials recovered Fast and Furious weapons among the suspects’ cache.

Also, for the first time, Congressional investigators disclose names of some Justice Department officials whom witnesses, ATF agents, say knew about the controversial gunwalking operation.

Nobody at the Justice Department has publicly acknowledged approval of or a role in the case. President Obama has said neither he nor Attorney General Eric Holder authorized the operation, and Holder asked the Inspector General to investigate.

But according to ATF witnesses, on March 5, 2010 ATF intelligence analysts told ATF and Justice Department leadership (including Main Justice Trial Attorney Joe Cooley) that straw firearms purchases in Fast and Furious had exceeded 1,000 and the weapons were ending up in Mexico. When concerns were raised, one witness present quoted Cooley as saying the movement of so many guns to Mexico was “an acceptable practice.” The Justice Department had no comment on that.

http://www.cbsnews.com/stories/2011/07/26/cbsnews_investigates/main20083453.shtml - 110k -

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Comment by SV guy
2011-07-31 10:38:04

F Eric Holder!

 
 
Comment by jeff saturday
2011-07-31 09:59:52

“In what could be a repeat of the easy-lending cycle that led to the housing crisis, the Justice Department has asked several banks to relax their mortgage underwriting standards and approve loans for minorities with poor credit as part of a new crackdown on alleged discrimination, according to court documents reviewed by IBD”

No Job, No Problem

“Settlements include setting aside prime-rate mortgages for low-income blacks and Hispanics with blemished credit and even counting “public assistance” as valid income in mortgage applications.”

Already did

ERIC GOES TO HOLLYWOOD LYRICS

Relax don’t do it
When you want to to go to it
Relax don’t do it
Who you gonna loan

Comment by ecofeco
2011-07-31 14:03:35

BOW BOW bow BOW :lol:

 
 
Comment by MightyMike
2011-07-31 13:46:13

Reagan represented a break from tradition. Back in the days of Eisenhower, the Republicans were the party of sensible budgeting. Reagan changed all of that.

An interesting anecdote comes from the early days of the G.W. Bush administration. Bush was proposing big tax cuts, which would mostly benefit the wealthy. His first Treasury Secretary, Paul O’Neill, whose government service started in the Nixon and Ford administrations, was concerned that the tax cuts would lead to large deficits. He was told by Dick Cheney that “Deficits don’t matter”.

This prompts a question. Why are these Tea Party members of Congress suddenly so concerend about deficits? Were they worried when the vice president of the United States, the president’s most influential adviser, said that deficits don’t matter?

Comment by MightyMike
2011-07-31 13:51:59

I meant to post this above, below a discussion of the Republicans and deficits.

I checked the article about Eric Holder and the DOJ. The headline reads “Holder Launches Witch Hunt Against Biased Banks”. It makes no sense. A witch hunt generally refers to some unfair or unreasonable investigation. However, if some banks actually are biased, they are acting illegally, and an investigation would be the proper caourse of action for DOJ.

Comment by ecofeco
2011-07-31 14:05:05

Nice spin, isn’t it?

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Comment by Realtors Are Liars®
2011-07-31 18:08:32

It’s the typical phony indignation/create an issue out of thin air by the tea baggers.

 
 
 
 
 
Comment by jeff saturday
2011-07-31 08:44:10

scarlet letters of fiscal failure

Who owns this condo? Man pays mortgage, woman is owner of record, experts smell fraud

FIRST OF 2 PARTS
By Kimberly Miller
Palm Beach Post Staff Writer
Posted: 9:37 a.m. Sunday, July 31, 2011

ROYAL PALM BEACH — The neatly kept Kensington condominiums, fronted by a fountain, guard house and regal name, hold on to a pretense of Wellington wealth.

But past the empty guard shack and through the long-broken electronic entry gates, bank notices are taped to abandoned units - scarlet letters of fiscal failure.

Experts suspect more - that the condominium conversion was a crucible for fraud, a case study in real estate’s rise and fall.

The investigation also found:

•Multiple sales so overpriced that the Palm Beach County Property Appraiser’s Office alerted the FBI, noting “red flags everywhere.”

•A closing statement with a faked 20 percent down payment.

•Multiple units sold to individual buyers, such as a Costco employee and a cabdriver, who couldn’t afford them.

•A South Florida title agency that despite mounting consumer complaints, a 2009 fraud judgment against it and suspension by its underwriter, escaped state discipline until December 2010. Choice Title of South Florida imploded on its own well before the state moved to shut it down. The company’s former president, who is still licensed in Florida, recently advertised for mortgage brokers and loan officers on her Facebook page.

First-time buyer Ed Diaz purchased Kensington unit 102 at 260 Crestwood Circle in February 2009. He paid the mortgage on it for more than a year before learning the home was also owned by someone else. Miami resident Madelin Ayala, who says her November 2008 closing fell through, is listed as the owner of record.

http://www.palmbeachpost.com/money/real-estate/who-owns-this-condo-man-pays-mortgage-woman-1676366.html - -

 
Comment by Sammy Schadenfreude
2011-07-31 08:50:28

http://www.nytimes.com/2011/07/30/us/30jefferson.html?_r=2&hp

Jefferson County, Alabama, lurched closer this week to what would be the nation’s largest municipal bankruptcy ($4 billion). This is what happens when Wall Street predators (JP Morgan) unrestrained by willfully blind Federal regulators or “enforcement” make creative financing deals with corrupt local political hacks, leaving hapless but not blameless taxpayers to foot the bill. It also offers a glimpse into what is going to happen on a nation-wide scale when the Republicrats can no longer kick the can further down the road.

Comment by sleepless_near_seattle
2011-07-31 10:48:21

This is the one Taibbi highlighted last year:

Looting Main Street

Comment by ecofeco
2011-07-31 14:07:07

Damn overpaid firefighters!

Oh wait…

 
 
 
Comment by Hwy50ina49Dodge
2011-07-31 09:10:28

America the Great, just x2 days from Financial Armageddon…(to think that iffin’ America the Great could’ve just held on for a few more years, Mo$anto & Apple Inc.$ could have added ++++++ to their customer revenue$ list, tsk, tsk,…however, being a $COTUS Inc. persons, they’ll implode with the rest of US, right?) :-)

Are We Prepared as World Population is Set to Breach 7 Billion Soon?:
By IB Times Staff Reporter | July 31, 2011

The world population is expected to breach seven billion this year, which is more than twice the number of people lived on the earth just 50 years ago,

The population is expected to exceed nine billion by 2050

The World reach one billion people in 1800 and it reached two billion in 1925. The numbers grew dramatically in the last 50 years from three million to seven million and peaked in the mid-1960s at a growth rate of two percent per year.

Meanwhile, global life expectancy is also expected to rise from age 69 this year to 76 in 2050. Nearly a quarter of the world’s population is expected to be over 60 by 2050, which is about double the proportion that it is today.

Comment by peter a
2011-07-31 13:13:23

Until Captain Trips shows up.

Comment by ecofeco
2011-07-31 14:10:13

Which is only a matter of “when.” Certainly sometime this century.

The PTB are going to HATE the impact on labor costs. :lol:

 
 
 
Comment by Hwy50ina49Dodge
2011-07-31 09:35:21

Angries External / Angrie$ Internal ;-)

heheeeheeeheehaahaaahaaheeehaahaaa… (Hwy50™)

Thousands protest in Israel over house prices and low salaries
Protests held in 12 cities including Tel Aviv and Haifa
Luke Brown and Harriet Sherwood in Jerusalem / guardian uk, Sunday 31 July 2011

Up to 150,000 protesters took to the streets in cities across Israel on Saturday night in the biggest demonstrations the country has seen in decades to demand action on rising house prices and rents, low salaries, the high cost of raising children and other social issues.

The demonstrations, held in 12 cities including Tel Aviv, Jerusalem and Haifa, marked the high point of a popular protest movement that has gathered momentum over the past fortnight and shows no signs of letting up in its demands for “social justice”.

Activist Daphni Leef, who initiated the first “tent village” protest in Tel Aviv against housing prices two weeks ago, told a crowd of 70,000-100,000 Israelis gathered outside the city’s main art museum that “we don’t want to replace the government, but to do more than that. We want to change the rules of the game.”

Around 10,000 protesters gathered outside the prime minister Binyamin Netanyahu’s residence in Jerusalem, according to police spokesman Micky Rosenfeld. The celebrated author David Grossman told crowd: “The people are loyal to the state, but the state isn’t loyal to them.”

“We are now in the midst of a complicated and challenging reality, both internationally and domestically,” he told minsters at Sunday’s cabinet meeting. He warned against “irresponsible, hasty and populist steps” which could destabilise Israel’s economy, but added: “All of us, myself first and foremost … [are] aware of the genuine hardship of the cost-of-living in Israel.”

Comment by Hwy50ina49Dodge
2011-07-31 15:30:41

:-)

“Workplace strikes are planned nationwide on Monday, with tens of thousands of Israelis signalling their support for a jobs “boycott” on Facebook. The Histradut, Israel’s trade union federation, might also join the protests.”

 
 
Comment by cactus
2011-07-31 09:36:34

http://www.safehaven.com/article/21958/an-economy-at-stall-speed

stock markets typically lose 40% in recessions ouch

Comment by Professor Bear
2011-07-31 11:10:25

Think of that 40% discount as a rule-of-thumb for when to buy the dip. Another opportunity may lie in wait for the patient dip buyer between now and when we are really on the other side of this never-ending banking crisis behind the curtain of the extend-and-pretend recovery.

 
 
Comment by Hwy50ina49Dodge
2011-07-31 09:47:42

Hwy senses a “Tibetan” pattern.

Uighur violence in China leaves at least 14 dead:
The Chinese government calls the incidents terrorism, but a spokesman for the Uighur minority says the weekend conflict in the far-western city of Kashgar started as a protest against repressive Chinese rule.
By Barbara Demick, Los Angeles Times /July 31, 2011

Uighurs, a Turkic minority who once dominated here, resent the influx of Han Chinese migrant workers and investors. Many jobs are reserved for Chinese only. Kashgar’s ancient walled city, once a cultural icon for the Uighurs, has been largely demolished by Chinese authorities to make way for modern concrete apartments.

“The underlying cause of this incident is the current repressive Chinese rule,”

He predicted that conflicts would escalate in the coming days with the approach of the Muslim fasting period of Ramadan, observed by many Uighurs despite restrictions on religious practice by the Communist Party.

The Kashghar conflict follows close on the heels of an incident last month in Hotan, another Xinjiang city, in which 20 people were killed after Uighurs attacked a police station with homemade explosives and knives. That incident grew out a crackdown by the Chinese on the wearing of Islamic face veils.

Comment by Sammy Schadenfreude
2011-07-31 10:34:52

I would never invest a cent in China on general principle, but more pragmatically because their “economic powerhouse” looks to me like it’s built on massive fraud, systemic corruption, and Robber Baron exploitation of the powerless, especially the rural poor and minorities like the Uighurs and Tibetans. How much longer before their house of cards economy comes crashing down?

Comment by Professor Bear
2011-07-31 11:09:01

Can’t wait…especially to read in the MSM about how ‘nobody could have seen it coming’!

 
Comment by Bill in Carolina
2011-07-31 11:28:03

I presume you also don’t invest in the U.S. for the same reasons (except for the reference to Uighurs and Tibetans).

 
 
 
Comment by Hwy50ina49Dodge
2011-07-31 10:04:14

A Nation ripe for Western $tyle Democracy…or…$hazam!-Islam-is-gonna-b-democraptic-any-day-now-just-you-wait-n-see!

In Afghanistan, Rage at Young Lovers:
By JACK HEALY / July 30, 2011

HERAT, Afghanistan — The two teenagers met inside an ice cream factory through darting glances before roll call, murmured hellos as supervisors looked away and, finally, a phone number folded up and tossed discreetly onto the workroom floor.

It was the beginning of an Afghan love story that flouted dominant traditions of arranged marriages and close family scrutiny, a romance between two teenagers of different ethnicities that tested a village’s tolerance for more modern whims of the heart. The results were delivered with brutal speed.

This month, a group of men spotted the couple riding together in a car, yanked them into the road and began to interrogate the boy and girl. Why were they together? What right had they? An angry crowd of 300 surged around them, calling them adulterers and demanding that they be stoned to death or hanged.

When security forces swooped in and rescued the couple, the mob’s anger exploded. They overwhelmed the local police, set fire to cars and stormed a police station six miles from the center of Herat, raising questions about the strength of law in a corner of western Afghanistan and in one of the first cities that has made the formal transition to Afghan-led security.

The riot, which lasted for hours, ended with one man dead, a police station charred and the two teenagers, Halima Mohammedi and her boyfriend, Rafi Mohammed, confined to juvenile prison. Officially, their fates lie in the hands of an unsteady legal system. But they face harsher judgments of family and community.

Comment by Sammy Schadenfreude
2011-07-31 10:36:24

Well give us a few more decades and a few trillion more dollars, and we’ll turn Afghanistan into a neoliberal market democracy yet!

 
Comment by Professor Bear
2011-07-31 11:07:42

“An angry crowd of 300 surged around them, calling them adulterers and demanding that they be stoned to death or hanged.”

Sounds like such a loverly place to grow up!

 
Comment by Realtors Are Liars®
2011-07-31 12:01:18

Sounds like a social conservatives utopia.

Comment by ecofeco
2011-07-31 14:14:11

What makes you say a thing like that? :lol:

 
 
Comment by nickpapageorgio
2011-08-01 00:04:17

And we are over there killing our young men for these backwards a$$ toothless mf’rs.

 
 
Comment by Professor Bear
2011-07-31 11:47:38

I don’t understand why the ‘experts’ at RedFIN can’t connect the dots between a market running at stall speed and a likely future tailspin in prices. Weren’t the initial wave of Housing Bubble collapse price declines preceded by a large decline in transaction volumes?

At the moment, the flow of home sale transactions is even lower than before the initial wave of housing bust price declines — loan applications are all the way back to pre-Housing Bubble (1997) levels. And notice how Redfinnians conveniently avoid any discussion of the likely future depressive effect on prices of 3m+ in shadow inventory spilling on to the market.

Perhaps depending on the REIC for your paycheck skews one’s perspective. But I am perpetually mystified by the REIC’s tendency to favor unaffordable pricing; doesn’t the NAR realize their used home seller constiuency would do far better with affordable prices and higher transactions volume?

June 29, 2011
Home Prices Stabilize, And the Whole Market Grinds to a Halt

Every month, Redfin publishes two newsletters on real estate prices. One, usually published on the last Tuesday of every month, is a Redfin Roundup, which synthesizes data collected by economists, government agencies and others to provide a complete portrait of what happened in the market over the past month. The other is Redfin Insider, usually published by the 12th of each month, which analyzes our own databases to identify the major trends in listing inventory and prices as well as sales activity and consumer traffic. To receive these newsletters by email, just sign up! Here’s the June Roundup:

Howdy Redfinnians!

The latest real estate numbers came out yesterday and, as we predicted last February when every economist was headed for the hills, home prices increased in April for the first time since July 2010. Some of this was seasonal and real prices are probably flat.

Prices have stabilized because the supply of homes for sale has been falling, more than most folks realize. We’d be optimistic except that buyers, like sellers, are also waiting for better days. Applications for loans to buy homes haven’t been this low since 1997. After a monster June in our own business, Redfin’s July will be mediocre. To keep growing, we have to take a lot of market-share.

A Silent Spring, and Now A Quiet Summer Too

That’s bad news for the housing economy because July is usually Christmas-time for real estate agents. This year, however, the stores are a little empty: there are very few homes to buy, and very few shoppers too. Prices will be up and down for the rest of the year — after being very bearish in 2010, we are sticking to our contention that the big drops are behind us — and sales volume will be very low.

 
Comment by Professor Bear
2011-07-31 11:59:01

TRAITORS!

Some tea partiers are urging their leaders to compromise on debt deal
By Amy Gardner, Sunday, July 31, 10:47 AM

The partisan standoff over raising the federal debt ceiling could do more than destroy the nation’s credit rating and economic health. It could make or break the long-term prospects for the political movement that birthed the fight: the tea party.

No moment has more dramatically illustrated the influence the tea party wields in Washington than the looming deadline to raise the debt ceiling and avoid sending the country into default. Demanding deep cuts in federal spending, no new taxes and a balanced budget amendment to the Constitution, tea party-backed lawmakers have forced Republicans and Democrats alike to consider proposals that were unthinkable just a few months ago.

But as a deal was being crafted in Washington on Sunday, it was unclear whether the public, or even members of the far-flung tea party movement itself, would hold the fledgling movement responsible for the crisis that sent the country to the brink of default. The tea party’s moment of victory could quickly turn to defeat if more and more Americans blame it for pushing its agenda too far.

Even some tea party activists agree. They say the politicians who are rejecting compromise in the name of tea party principles are misreading the views of the movement itself. They worry that, if the public blames the tea party for a default, the tea party’s influence — and electoral fortunes — will suffer. And those activists worry that such an outcome could end the momentum in Washington to improve the nation’s fiscal health over the long-term.

Comment by Bill in Phoenix and Tampa
2011-07-31 12:32:35

I am in agreement with Ron Paul.

Balanced budget amendment is a must.

Eliminate big government.

Most of the government spending is wasteful and unconstitutional.

Eliminate the income tax and replace with nothing to get the size of government down to the late 1990s.

Comment by ecofeco
2011-07-31 14:16:42

Private federal contract employees outnumber regular federal employees.

It’s not just big government where the costs lie.

 
Comment by Itsabouttime
2011-07-31 14:25:15

Wow, makes a lot of sense.

We run a deficit equal to 40% of the budget. How to solve the problem? Reduce our resources even more, so the government runs on 100% borrowed money.

As no one will be taxed, and no one wants to be taxed, what a winning policy proposal!

Uh . . . how do we pay for our efforts to keep the terrorists over there? Schrute bucks? Don’t those have the same ratio to real dollars as leprechauns to unicorns?

IAT

Comment by Professor Bear
2011-07-31 15:07:26

“As no one will be taxed, and no one wants to be taxed, what a winning policy proposal!”

That’s the part that leaves me scratching: How can Americans get all the free stuff they expect from their federal government without paying for it?

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Comment by CrackerJim
2011-07-31 16:33:48

The people wanting the free stuff are not the ones paying for it.

 
 
Comment by ecofeco
2011-07-31 17:30:37

“Uh . . . how do we pay for our efforts to keep the terrorists over there? Schrute bucks? Don’t those have the same ratio to real dollars as leprechauns to unicorns?”

Flooze? (remember those?) :lol:

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Comment by BlueStar
2011-07-31 16:13:48

Game Over Dude!
A Balanced Budget Amendment will be a head shot the the leader of the worlds financial markets. I think this artificial debt ceiling accounting trick was the last thing holding up the US $ as the world currency. And the funny thing was the rest of the world relied on america and it’s all powerful FED to chart the course of interest rates for the G7. That’s over 50% of the world’s GDP producing countries all linked through the same debt and currency rate structure. If we go with this Balanced Budget Amendment the FED is going to lose it’s control of the balance sheet(Tea Party will dictate by law it shrink back to the 1995-2000 level) and with it america will forfeit it’s #1 super power status.

Just thinking ahead I think there will be a temporary power vacuum while Europe realigns it’s economy to China and South East Asia. In another 10 years our economy will be 30% smaller and China will have doubled, twice. The wild card is War, always the last desperate action of a dying empire. The rumors of war should hit about 3-6 months into the new GOP presidents term in 2013 if we try that route.

 
 
 
Comment by Professor Bear
2011-07-31 12:20:51

Do you guys think this home is really worth $20m, at over $3K/sq ft? Buyers apparently don’t…

For Sale (MLS-listed)
$19,999,000 Dunemere Ave
La Jolla, CA 92037

Beds: 5 On Redfin: 749 days
Baths: 5.5 Year Built: 1922
Sq.Ft.: 6,129 Lot Size: 1.40 a
$/Sq.Ft.: $3,263 MLS#: 090039716

 
Comment by AbsoluteBeginner
 
Comment by jeff saturday
2011-07-31 12:36:29

Debt ceiling fix could mean problems for states

By SUSAN HAIGH and DINESH RAMDE
Associated Press

HARTFORD, Conn. — The cost of the compromise needed to raise the federal debt ceiling will likely inflict more fiscal pain on states still struggling to recover from the recession and the end of federal stimulus spending.

While the details of the spending cuts to states remain unclear, lawmakers from both parties have discussed the need to cut or impose caps on so-called discretionary spending over the next decade.

That could mean wide-ranging cuts in federal aid to states, affecting everything from the Head Start school readiness program, Meals on Wheels and worker-training initiatives to funding for transit agencies and education grants that serve disabled children.

There also is concern among governors, state lawmakers and state agency heads that Congress will make deep reductions or changes in federal aid for health services for the needy, most notably through Medicaid. That could shift more of the costs onto states that already are having trouble balancing their budgets.

“We have the potential for disaster should there be a major realignment in federal funding that results in a cost shift to states,” said Nevada state Sen. Sheila Leslie, a Democrat from Reno who recently discussed the issue with Obama administration officials in Washington. “In short, we are teetering on the edge right now, and a cost shift could send us over the cliff.”

States already have closed nearly $480 billion in budget gaps since the beginning of the recession, according to the National Conference of State Legislatures.

In Connecticut, for example, officials have struggled to cover a $3.3 billion deficit, accounting for more than 16 percent of the state’s main budget account.

About 19 percent of the state’s non-transportation revenue comes from the federal government.

“The timing is lousy in every respect,” said Benjamin Barnes, secretary of the Connecticut Office of Policy and Management. “It will certainly have a recessionary impact on the overall national economy, and that’s the last thing we want right now.”

http://www.miamiherald.com/2011/07/31/2339041/debt-ceiling-fix-could-mean-problems.html -

 
Comment by Bill in Phoenix and Tampa
2011-07-31 13:31:30

Ron Paul: “How do you solve a debt problem if you keep raising the debt?”

Comment by Itsabouttime
2011-07-31 13:41:00

Q: “How do you solve an eating problem if you keep eating?”

A: “If you eat too much you have to eat less! But, don’t go cold turkey on food and stop eating, you will starve. That’s no solution.”

And to think, Ron Paul used to be a medical doctor. Wonder how his patients fared.

IAT

Comment by Bill in Phoenix and Tampa
2011-07-31 14:00:48

You haven’t even read any of his ideas, moron!

His speech on July 27 says if Government just enforces a spending freeze and our economy grows at the current rate in five years, our debt would be solved.

That means keeping the same amount of calories in your analogy.

Stop slandering Ron Paul.

Comment by Darrell_in_PHX
2011-07-31 15:31:08

How do we freeze the Social Security and Meidcare budgets when the number of people eligable will increase 70% over the next 10 years?

As for the growth rate, is that the 1.9% Q1 originally reported or the .4% revision?

Let’s say tax receipts grow 2% per year for the next 5 years….

$2.1T, $2.142T, $2.185T, $2.229T, $2.237T, $2.319T

With our current budget of $3.5T a year budget and SS and MC expected to increase $113B a year as the Boomers retire… how do we balnce the budget?

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Comment by Professor Bear
2011-07-31 15:57:09

“How do we freeze the Social Security and Meidcare budgets when the number of people eligable will increase 70% over the next 10 years?”

You could keep the payments where they are but move the full eligibility date out to something like full life expectancy — where they were in 1935 (back then life expectancy was 65ish). Earlier payments would be actuarially reduced.

I know it is way too late for this for it to be anything like fair for future retirees compared to those whose payouts were greatly enriched by Greenspan’s 1983 FICA tax increase to 15.3%, but nobody ever said life was fair. This problem needs to be resolved before the demographic tsunami of retiring baby boomers drowns our country in unfunded pension liability which, like much of the vacant housing inventory, currently lurks in the shadows.

 
 
Comment by alpha-sloth
2011-07-31 15:34:37

“You haven’t even read any of his ideas, moron!”

Bill, are you taking your meds?

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Comment by Professor Bear
2011-07-31 15:52:12

Since you have obviously read up on and bought onto his ideas, what does he propose to replace the Fed?

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Comment by Bill in Phoenix and Tampa
2011-07-31 17:23:54

He proposes to replace the Fed with gold. That is, a gold standard.

Linky:
http://www.lewrockwell.com/blog/lewrw/archives/20097.html

Gold at the date of the above video was around $900 per ounce. Now it is at $1616 per ounce at the time of this post.

 
 
Comment by Itsabouttime
2011-07-31 16:08:19

Hey, backatcha, moron. I have read his work. I was responding to a slogan. The slogan is depressing. I had always saw Ron Paul as a straight shooter, and would have seriously considered voted for him had he won the nomination. The slogan makes him look like the idiots he used to denigrate.

IAT

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Comment by Itsabouttime
2011-07-31 17:27:39

Excuse the typos. I went back and forth on different ways of phrasing my response, and failure to completely re-read it before hitting send led to errors of tense and wording. What I meant to say was:

Hey, backatcha, moron. I have read his work. I was responding to a slogan. The slogan is depressing. I had always seen Ron Paul as a straight shooter, and would have seriously considered voting for him had he won the nomination. The slogan makes him look like the idiots he used to denigrate.

IAT

 
 
 
 
 
Comment by Professor Bear
2011-07-31 15:19:47

Default cloud hangs over U.S. job market
Pedro Nicolaci da Costa Reuters
4:59 p.m. CDT, July 31, 2011

WASHINGTON (Reuters) - The terrifying prospect of a U.S. debt default has left a cloud over businesses already reeling from the economy’s tepid performance, and likely left them reluctant to ramp up hiring in July.

A heated political battle over how to raise the nation’s debt ceiling has helped make the once-distant prospect of a downgrade of the U.S. AAA credit rating a strong possibility. Even worse, investors are grappling with the unthinkable: an outright default on U.S. government debt.

The fight over the debt, which started with a refusal by some Republicans to lift the largely procedural debt limit without sharp cuts in government spending, comes with the U.S. economy already struggling to remain above water.

Data on second-quarter gross domestic product published on Friday showed the world’s largest economy expanded at just a 1.3 percent annual rate in the April to June period. More worrying, revisions to the first quarter left annualized GDP at a 0.4 percent pace — perilously close to a contraction.

The figures prompted some analysts to wonder whether market forecasts for an unspectacular gain of 90,000 jobs in July may be overly optimistic, following truly dismal readings for May and June. The jobs report is due on Friday.

“It certainly tempers my outlook, resets expectations,” said Jason Ware, senior research analyst at Albion Financial Group in Salt Lake City. “If we’re going to have any type of material uptick in private-sector employment, we’re going to be growing faster than 1.5 percent.”

Comment by Bill in Phoenix and Tampa
2011-07-31 17:41:17

No matter what the outcome when the threshold of the deadline is crossed, the job market will get worse. Pick your poison: Kick the can down the road and anticipate an even more heated deficit debate and more government spending increases or default, which would be equally painful.

More and more, the obvious conclusion is that many government programs are going to be cut severely, especially the few ones mandated in the constitution.

The troops will have to be pulled back home, otherwise there will be a major amount of “Corporal Klingers,” (if you are old enough to remember the “Mash” TV series) in the 1000 overseas bases.

 
 
Comment by Professor Bear
2011-07-31 15:48:18

From Marketwatch:

Addicted to debt

No matter how this debt ceiling debacle works out, I believe one conclusion is clear. Regardless which party is in power, Washington is addicted to debt. This video makes the point well:

Comment by Darrell_in_PHX
2011-07-31 19:31:12

Not to nitpick, but to borrow less, there are two options. Spend less or bring in more revenue… or perhaps.. and I know this will sound crazy… some of each.

The problem with cutting our way out is the scale of cuts that would be required would feed back into receipts. The more we cut, the deeper the recession/depression gets, the more revenue falls.

Spending our way out (or even just deficit-ing our way out with revenue cuts) is, as pointed in this clip, also a no win since the debt hit only tides you over and then you need a bigger debt hit the next time… kind of like our bubble economy where junk bonds were our first hit, then tech bubble, then housing bubble… each hit had to be bigger to get the next high, and each following crash that much more damaging.

So, what is the answer? Bring back our industrail base and undo all our “economic progress” of the last 40 years.

 
 
Comment by Professor Bear
2011-07-31 19:14:35

I guess now that the fix is in, the San Diego housing market can come roaring back to bubble land?

Debt Deal Could Hurt Housing Market, Retirement
Deal Pending Regarding Nation’s Debt Ceiling
POSTED: 5:33 pm PDT July 31, 2011

SAN DIEGO — The indecision in the nation’s capital regarding the debt crisis could mean major ramifications for the local housing market and also for retirement portfolios.

For weeks, the crisis over the nation’s debt ceiling has made news. In terms of the housing market, a potential debt deal could mean the “For Sale” signs could be up for much longer.

Michael Lea, the director of the Corky McMillan Center for Real Estate, said a short-term debt deal could mean trouble for people looking for homes.

“Interest rates would rise on government bonds generally, and mortgage rates more specifically,” said Lea. “That affects consumer confidence, which has a spillover effect on the housing market.”

The average 30-year fixed mortgage rate was 4.52 percent last week. A rise in interest rates could hurt, but the confidence issue that could truly devastate the real estate market.

“If you’re not confident about where the economy is going… you’re not going to be confident about buying a house,” said Lea.

Bob Kevane, the president of the San Diego Realtors Association, is optimistic that a debt deal will not raise interest rates.

“I don’t see rates rising for a very long time,” said Kevane. “Until you see the unemployment rate go down to 6.7 percent, then you’ll see rates start to rise a little.”

Kevane said the market has been relatively flat the last two years, with the county selling around 28,000 homes and condos. Kevane said tougher loan requirements are a bigger obstacle to homebuyers.

“If you don’t qualify for the loan, even if you want to buy the house, you don’t get to buy the house,” he said.

Financial adviser Dennis Brewster said the longer a deal is not made, the bigger the hit will be to personal finances.

“You’d definitely see a reaction in the markets that would force interest rates higher, hurt bond prices [and] hurt the bond side of your 401k,” said Brewster. “Equity markets typically overreact in the short run.”

Comment by rms
2011-07-31 23:35:32

The Corky McMillin Center for Real Estate
http://www-rohan.sdsu.edu/~realest/index.html

“If you don’t qualify for the loan, even if you want to buy the house, you don’t get to buy the house,” he said.

Wow, that’s just awful; oh, the humanity!

 
Comment by SDGreg
2011-08-01 00:42:10

“If you’re not confident about where the economy is going… you’re not going to be confident about buying a house,” said Lea.

You could be very confident about where the economy is going which would give you every reason to not buy a house. If you expect fewer jobs and lower wages, why would you possibly buy now?

 
 
Comment by Professor Bear
2011-07-31 19:20:02

This article suggests the Tea Party “won” by negotiating cuts that are likely to result in a weakened U.S. economy between now and November 2012. But I don’t see why Obama can’t keep reminding the voters which party it was that insisted on the draconian near-term cuts?

ANALYSIS
Obama Hurt By Debt Debate
By George E. Condon Jr.
Updated: July 31, 2011 | 9:55 p.m.
July 31, 2011 | 9:38 p.m.
Richard A. Bloom

President Obama takes questions from the media in the East Room of the White House on June 29, 2011.

The details of the debt deal still being hammered out Sunday night allows the United States to avert an historic default if it survives tough votes in Congress. That’s enough to bring great relief to the White House. But no cheers. The months-long melodrama leaves President Obama weakened politically and potentially constrained as a president.

Obama put the best spin possible on the deal when he announced it in the White House briefing room. But there’s little good news for him and his party in what’s immediately known about the framework of the compromise. The best hope for Democrats is that this will be like the deal worked out last December to keep government operating. As more details of that agreement became known, Democratic anger at the extension of the Bush tax cuts ebbed at the realization that they too had gotten things they wanted. But right now it’s hard to see many victories the president can show to his party in this deal. He didn’t get the “clean” increase he once demanded. He didn’t get the “balance” (revenue increases) he demanded, though he insisted that taxes remain very much a part of the second phase of the bargain.

He did get the Republicans to yield on his insistence on getting the ceiling raised high enough that this debate won’t be repeated until after the 2012 presidential election. In achieving that, the president and the congressional leaders all but guarantee that next year’s campaign will feature a large and perhaps unprecedented debate over spending and budget priorities and the relationship between government spending and job creation. That’s a long overdue debate and, if conducted honestly, will allow the winner of the presidential election to claim a genuine mandate.

But the bad news for Obama is that this deal – and his role in the deal-making – could make it more difficult for him to win a second term. To win reelection, he needs an improved economy with robust job growth. As the president mentioned in his remarks, the White House throughout this debate was acutely aware that massive spending cuts by the government would pose a severe challenge to a recovery already made more fragile by state and local government spending cuts. Critical to how much damage fresh cuts do to the economy will be – again – those details. How much of the cutting will be done in the next 12 months and how much is deferred to a later date? And how much will this detail constrain his ability to govern in the next 12 months?

 
Comment by Professor Bear
2011-07-31 19:22:42

David Kamm: Debt crisis overshadows housing market troubles
12:29 PM, Jul. 30, 2011

Focus has shifted this week from the Greek and peripheral European Union nations to the U.S. debt ceiling and deficit reduction stalemate in Congress. As a result, retail investors have been on the sidelines in wait-and-see mode.

With the stock market gyrating almost hourly, let’s peek at an area we may have shoved in the back of our minds - housing. What made the data below interesting is that it defies correlation.

Sales of new U.S. homes fell for a second month and a seasonally adjusted gauge of property values also dropped, showing that the housing industry is stagnating. Figures from the Commerce Department showed that new home purchases dropped 1 percent in June to a three month low.

However, the median price of a new home increased 7.2 percent to $235,200 from June 2010. The new home’s report showed that demand fell 16 percent in the Northeast, an all time low, and 13 percent in the West. Purchases climbed 9.5 percent in the Midwest and 3.4 percent in the South.

This week’s report from S&P/Case-Shiller showed that prices in 20 cities dropped 4.5 percent in the year ended May, the most since November 2009. “You’re still dealing with a supply-demand imbalance that suggests home prices will remain under pressure,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets Corp.

 
Comment by Professor Bear
2011-07-31 22:14:47

Tea party antics are preface to economic disaster
Published: Sunday, July 31, 2011, 9:03 AM
John Farmer/The Star-Ledger By John Farmer/The Star-Ledger

It’s not considered good form to point out that one side in a political dispute is ill-informed, ignorant even, and perhaps a trifle stupid. But when applied to tea party types who favor a federal default over raising the debt ceiling, it’s the God’s honest truth.

The economic ills facing the country in a federal default are all too clear: A drop in the rating of Treasury debt to AA from AAA; a rise in interest costs on future U.S. debt and on credit cards, as well as car, home and other consumer loans; a probable decline in the value of the dollar, the world’s principal reserve currency.

The nation’s economists overwhelmingly predict such dire consequences if Washington defaults; there’s little dispute among them. And last week, the CEOs of top financial instructions sent letters to all of Congress — but meant mostly for the tea party members — warning a default and decline in the nation’s credit rating would be a disaster.

But that hasn’t moved diehards in the House tea party caucus, led by Rep. Michele Bachmann (R-Minn.).

Some tea party types simply reject the cataclysmic conventional wisdom about a default. Others simply don’t give a damn; they’re determined to shrink the federal government no matter the cost.

While deplorable, this kind of tea party thinking is understandable in a sense. As Sen. John McCain (R-Ariz.) pointed out, in a vain attempt to win their support for a debt deal, the tea party members are new to Congress and the workings of federal finance are arcane and hard to understand. Actually, they’re otherworldly by ordinary household finance practices. Even experts are hard-pressed to explain what passes for ordinary economic practice in Washington.

 
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