Bits Bucket for August 4, 2011
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Amazing how economists are “stunned” by the fact, our so called recovery was due simply to props and nothing more. Reality will have to start setting in at some point, or not.
ITEM: Going nowhere: Economy struggles to find footing
Dow up for first time in nine days; investors still worry about long-term health of economy.
WASHINGTON (AP) — Shoppers won’t shop. Companies won’t hire. The government won’t spend on economic stimulus — it’s cutting instead. And the Federal Reserve is reluctant to do anything more.
Without much to invigorate growth, the economy may be in danger of slipping into a stupor like the one Japan has failed to shake off for more than a decade. And Wall Street is spooked.
The Dow Jones industrial average Wednesday barely broke an eight-day losing streak, finishing up about 30 points. A nine-day losing streak would have been the Dow’s first since February 1978.
Even with the gain, the Dow has fallen 828 points, or 6.5 percent, over the past nine trading days. Investors didn’t even pause to celebrate the resolution over the weekend of a dangerous debt standoff in Washington.
Stunned by news last week that the economy barely grew in the first half of 2011, economists are lowering their forecasts for the full year and recalculating the odds that the economy will slide back into recession.
Kurt Karl, chief U.S. economist at Swiss Re, has cut his 2011 forecast for growth this year to 1.8 percent from 2.6 percent. And he has bumped up the likelihood of another recession to 20 percent from 15 percent.
“The last week has made it much more likely that corporate profit estimates will be revised lower,” said Nick Kalivas, a vice president of financial research at MF Global.
carney just said yesterday that the WH sees no signs of a double dip recession.
headline should have read “WH continues to bury head in sand”.
They can’t say it publicly and destroy their chances of getting re-elected.
Obama did a town hall during the debt extension battle. Someone asked him if there is anything he would change? His answer turned into somethink like:
Well, I wish I could have told the American people up front just how bad things are and how long it was going to take to fix this. However, I had balance my desire to inform with a need to cheerlead, improve consumer confidence….
In other words, if reality sucks, just lie.
The Tea Party terrorist debt limit negotiation tactics are going to send us into a double-dip recession for sure. You’d better be ready for it.
I thought the double-dip recession was in the bag long, long before this manufactured debt-crisis reared its head.
It was but some people just can’t grasp it. They can’t see the Forrest for the trees, and will never.
it was.
It might have been baked in when the stimulus money stopped flowing. And the Tea Party folks may end up getting the blame. Reports are that the debt crisis led many small 401K investors to pull out of the stock market, which has a ring of truth to it and will probably be believed by the masses.
I don’t much like McConnell, but he is an astute politician. He wanted Obama to own disatisfaction with the economy. He recognized that a bad outcome to the debt crisis would mean that Republicans would share in the blame.
There is a lot of castigation of the “sheeple” among people who are immersed in the economy and politics, but most of them are simply focused on surviving, running their business, raising their families. Most do not have time to pay detailed attention to local, state, and national politics and study the economy and manage their own investments. Out of 24 hours in a day, most folks have less than a half hour to devote to the big picture.
Reports are that the debt crisis led many small 401K investors to pull out of the stock market, which has a ring of truth to it and will probably be believed by the masses.
I yanked most of my 403B money out of the stock market back in ‘08. Thanks, fellow HBB-ers, for sounding the klaxon horns that motivated me to do so.
These days, much of my money is still out of the stock market. I’m looking at doing some money market and/or bond investing.
I’m also considering investments in some local businesses. I’m still in the “just looking” stage as far as finding investment candidates is concerned. But ISTR reading a fellow HBB-er’s account of how well he/she did via the local investing route.
If you can’t find anything you like in the Tucson area, but still want to invest in local-ish businesses, google “community investing” and/or “Green America.” There are whole companies and mutual funds set up for socially conscious and local investing.
If you can’t find anything you like in the Tucson area, but still want to invest in local-ish businesses, google “community investing” and/or “Green America.” There are whole companies and mutual funds set up for socially conscious and local investing.
Thanks for the tip, oxide. Will check ‘em out!
“They can’t see the Forrest for the trees…”
Some people can’t see the Tea Partiers for the Forrest Gump thinkers they are, either. You can’t equate running the whole U.S. economy to running a small business — that is just moronical.
“…the double-dip recession was in the bag long, long before this manufactured debt-crisis reared its head…”
It certainly was, which calls into question why some politicians seem to think it is no big deal to pile on to the economic, especially employment, woes by insisting on draconian budget cuts at a moment of severe economic fragility.
Unless their plan is to crash the economy by 2012 and blame it on Obama, that is.
Pbear, wait until the next budget is due for Fiscal 2012. We’ll go through this again, I’m sure of it.
Tea Party terrorist
LOL
Tea Party needs to change its name: The Non-Status-Quo Party is more appropriate.
“The party is over when the NSQ party arrives” has a catchy ring as a campaign slogan.
Kills corrupt arrangements on contact.
Banksters check in, but they don’t check out…
They could just call it “change.”
TeaBaggerTerrorists…. It’s got a nice accurate ring to it.
Its the same recession that never ended. You cannot be that guillible that you bought the whole Recovery, can you?
We’ve been living the Charles Hugh Smith graph, exactly as he predicted. Only on a much worse scale than we all thought. When I found HBB 4-5 years ago, I was just looking for why so many pretty young things around me were buying condos while I was paying off my college loans. I didn’t realize that the entire global banking system and employment system and political system was on the line too.
We’ve been living the Charles Hugh Smith graph, exactly as he predicted.
And, for your viewing pleasure, here’s the graph.
love charles hugh smith…read his book Survival+
And I love that graph, in particular the date.
I wonder what Cantankerous Intellectual Bomb-Thrower would say? He would not stand for this crap.
NBER are liars.
I often wonder why we believe that economic growth should always be aspired to. At this point in time what would it be based on?
Is it possible to have growth indefinitely? I suspect it is not.
should:
1. full employment be aspired to?
2. technological innovation?
3. efficent use of available resources?
4. educated workforce?
i am sure all of these aspirations are qualities of a growing economy.
i reckon China succeeds at number 3 with respect to labor. at what point does efficiency become exploitation?
That’s not growth, that’s “progress.”
“Growth” is a catch-all word for “hit the numbers no matter what.” If that means decimate the employees, move everything to China, accounting tricks, buy off Congress, sell off divisions that make some profit but not enough profit, hide taxes in shelters, shut off the power plant simply to cut supply and raise rates, put a gas station out of business because insurance is worth more, rail against gov on TV one day take a bailout the next day, keeping housing inventory on books at prices which are 5 years old, etc.
THAT’s growth.
(you forgot out of control credit expansion.)
my point is…to conlude that economic growth is bad and should therfore not be amatter of policy because the economy grew during the promotion of certain bad policies…is not rational.
Technology innovation that led to 20% increase in productivity leading to a four-day work week so that there is more leisure time for individuals to live their lives - “Progress.”
Technology innovation that led to 20% increase in productivity leading to a layoff of 20% of work force and 20% increase in shareholder profit - “Growth.”
However, China fails miserably at number 3 with respect to other scarce resources. Building empty cities and shopping malls to hit GDP growth targets so the local communist party leader can “move up the ladder” is far from efficient. They are squandering scarce resources in massive quantities.
i would argue that if all 4 or my points were a moderate positive; growth would result.
i would argue that in oxide’s example; growth would result.
now…which would you like your leader to set as policy?
or would you rather stagnate and contract…which is occuring now as a reult of oxide’s ‘growth’ policies over the long term.
(i realize those are not your policies; just for the sake of discussion)
I would rather grow along the lines of your 4 points. My worry is that the authorities can do nothing currently to create growth. We had 3 decades of credit expansion globally which misallocated alot of resources and pulled alot of aggregate demand forward. Empty chinese cities are just one example. Delevering is going to suck. I don’t see any way around that fact. When the globe finally recovers, empty production facilities can be used. Newly hired workers can move into empty housing units. The recovery will be slower because excess capacity currently exists in alot of stuff.
“i reckon China succeeds at number 3 with respect to labor. at what point does efficiency become exploitation?”
~1988?
Yes it is called Cancer
“Is it possible to have growth indefinitely? I suspect it is not.”
You suspect correctly. Bacteria in a petri dish will grow
until they run out of food, then they die. All of them.
We have finite resources and have used up all the easily
assessable ones. Think energy returned on energy invested.
Beer is the ultimate analogy.
A five gallon batch of homebrew, when the fermentation cycle is started, is the ultimate envrionment for yeast to florish in: the perfect amount of food, other yeast, clean envrionment. Within 48 hours, the population has exploded to nearly 6 billion yeast living, breathing, reproducing, and creating waste in the beer.
Soon the envrionment becomes too toxic (alcohol) and the yeast start dying off. And we get beer.
Sometimes I wonder if planet earth is just some greater being’s batch of homebrew beer. At least that would answer “what happened before the big bang?”
I sincerely hope this is true. I find some comfort in thinking that I am but a yeast living in a giant tub of beer. It’s certainly better than what I thought was reality prior to your explanation.
The US Fed and EU should let the market find a bottom now rather than printing a whole new set of money. Unless the market finds a bottom, the situation cannot improve. Growth cannot be indefinite based on scams and printed money. Lower RE prices and deflation in stocks and commodities and all over will correct the market.
I would say, let it go down this time without interfering and let the markets find a new bottom.
“Shoppers won’t shop. Companies won’t hire. The government won’t spend on economic stimulus — it’s cutting instead. And the Federal Reserve is reluctant to do anything more.”
Yeah, classic economic contraction. A bubble popped and despite gargantuan attempts to walk on water and create reinflation, the laws of gravity are setting in. It wasn’t going to happen any other way and we knew it. The depths to which they went to alter that reality, however, have been breathtaking. I wonder how many out there are in a weaker position going into this than they were in 2007 because they believed in the hocus pocus.
“I wonder how many out there are in a weaker position going into this than they were in 2007 because they believed in the hocus pocus”.
I would wager it’s a very large number.
“I wonder how many out there are in a weaker position going into this than they were in 2007 because they believed in the hocus pocus.”
I’d say most are in a weaker position, even if they knew the “recovery” was manufactured and couldn’t/wouldn’t last.
But those that believed there was an actual recovery are most likely in a relatively weaker position. Those that borrowed a lot of money to buy houses in the past couple of years could be really hard hit. Those that delayed a necessary restructuring of a lot of things could be relatively worse off.
There are still lots of debt issues to need to be resolved, big banks that need to fail and be replaced by lots of smaller banks.
Still Fed must be working on a new QE3 program. More money to be printed and more inflation to be exported. In fact, BRICs can’t take inflation anymore. But some kind of printing has to happen. I hope they find a way to keep the money in US.
The problem of course is they can’t get that money into the hands of people who will spend it. Only speculators and the elite are getting bailed out with this. The poor and formerly middle class just see higher prices for food and fuel. They spend less on everything else drive up unemployment and we move down another peg.
Pouring deficit money on the recession is like getting stuck in the snow, and trying to rock the car out. It’s not working, and they’re putting a lot of wear on the transmission as a result.
It’s probably time to get out and dig, instead of blowing up the transmission (causing loss of confidence in the currency).
Rocking the car sometimes works; I think pouring deficit money in is more like flooring it…
Without much to invigorate growth, the economy may be in danger of slipping into a stupor like the one Japan has failed to shake off for more than a decade.
Didn’t we HBB-ers predict this very thing?
Well Japan was one outcome. This time it will drag the whole western world down with it. SE Asia will survive and emerge the new economic power. By studying ‘This Time It’s Different’ I think the better example would be France in 1776.
http://en.wikipedia.org/wiki/French_Revolution#Financial_crisis
Pay attention to what got the whole thing started (debt).
Louis XVI = Obama and our next president = Napoleon (except with more Jesus trappings).
Now we’re talking, right on track. With a little more effort we’ll catch up to Greece.
ITEM: US borrowing tops 100% of GDP: Treasury
AFPAFP – 12 hrs ago
US debt shot up $238 billion to reach 100 percent of gross domestic project after the government’s debt ceiling was lifted, Treasury figures showed Wednesday.
Treasury borrowing jumped Tuesday, the data showed, immediately after President Barack Obama signed into law an increase in the debt ceiling as the country’s spending commitments reached a breaking point and it threatened to default on its debt.
The new borrowing took total public debt to $14.58 trillion, over end-2010 GDP of $14.53 trillion, and putting it in a league with highly indebted countries like Italy and Belgium.
Public debt subject to the official debt limit — a slightly tighter definition — was $14.53 trillion as of the end of Tuesday, rising from the previous official cap of $14.29 trillion a day earlier.
Treasury had used extraordinary measures to hold under the $14.29 trillion cap since reaching it on May 16, while politicians battled over it and over addressing the country’s bloating deficit.
The official limit was hiked $400 billion on Tuesday and will be increased in stages over the next 18 months.
There was a post yesterday that stated the U.S. government borrows forty cents of every dollar it spends.
Now this is just plain nuts! We are on the road to doom, this ratio has somehow got to be turned around.
We used to borrow 40 cents on the dollar, now its more 43 cents i believe.
Doomed!
Let’s assume it’s 40 cents. In order to run a balanced budget, not even reducing the deficit, we’d have to raise the total tax take by SIXTY-SIX PERCENT.
We’re fooked. Might it be better if we default sooner rather than later?
Oops, I meant “not even reducing the debt…”
“In order to run a balanced budget, not even reducing the deficit, we’d have to raise the total tax take by SIXTY-SIX PERCENT. ”
Or cut spending.
I had been quoting $2.1T income and $3.6T exepnse of $1.5T deficit. However, with unemployment not coming down, more people qualifying for food stamps, it looks like we’re actually going to be spending more like $3.8T.
So, $1.7T deficit on $3.8T spending… 44.7 cents of every dollar we spend is borrowed.
“ITEM: US borrowing tops 100% of GDP: Treasury”
LBJ would be proud.
You mean Ronnie. LBJ was tax and spend. Ronnie was borrow and spend.
ding ding ding… We have a winnner.
The Reagan Revolution was to deregulate banking and get the debt flowing. We don’t need no stinkin’ wages, as long as we can borrow ourselves rich.
“Saji Mathew missed the mortgage payment on his gas station by one day. Since then he’s tried to pay what he owes, but BB&T won’t take the money. It wants his business. Even the judge in his case is amazed. “It blows my mind,” she said.”
http://www.tampabay.com/news/business/realestate/one-day-late-with-mortgage-payment-gas-station-owner-could-lose-business/1184102
Great comments on that story. Everybody is supporting Sajit and threatening to pull accounts from BB&T.
I’m not sure if the law is on his side, however.
Those who are late on their mortgages give to the bank the option of picking and choosing on who they want to seize assets from and who they don’t.
If the bank - or the guy that runs the bank, or a buddy of the guy that runs the bank - wants a business then all he has to do is wait for the opportunity to present itself so he can pounce. It would not surprise me at all to learn that some bankers set it up so that the borrower has no choice but to be late on his payment; Bankers do this all the time with credit card paymnents, I don’t see why mortgages should be any different.
Business owners - or anyone else - who do not know this are
leaving themselves open to watch as what they thought was theirs ends up belonging to somebody else.
The scorpion stings the frog. Why? Because he is a scorpion.
This Great Contraction thingy is going to open up a lot of opportunities for sound businesses to be seized for pennies on the dollar by scorpions who emerged and entrenched themselves during the Great Expansion era.
The Great Expansion set it up; the Great Contraction will take it down.
What prevents him from getting it refinanced by someone else and kicking BB&T out? After all, they are happy to be paid the full amount due.
They don’t want the full amount; They want the business.
When the business owner missed the payment he gave permission to the bank to take the business. It doesn’t matter if he can come up with the money - all the money - it only matters if the bank wants to take the business or not.
The comments speculated that BB&T would make more money off collecting mortgage insurance from a default (probably funded by AIG <— TARP surprise surprise) than interest payments from Sajit. I don’t know if this is right, but it’s exactly the type of short-term boost that would warrant a bonus for the bank officer.
I suspect that the real court case is going to center around grace periods and electronic transfers. One day late is late, and even the most sympathetic judge would have no recourse.
The article stated how “frustrated” the judge was, but she couldn’t elaborate on why she was frustrated because the case was pending. Maybe because she knows that BB&T has it covered in the fine print?
IMO Sajit’s best course of action is to get on the news and wage a PR war.
IMO Sajit’s best course of action is to get on the news and wage a PR war.
Recall that, during the Great Depression, farmers did similar things. They formed rings around foreclosed farms and didn’t let the sheriff or the banksters get hold of them.
Thank goodness the Republicans won’t fund the consumer protection agency that was created under Dodd-Frank. How are banks supposed to hit thier constantly rising profit targets if they can’t do things like this?
Government regulation designed to prevent these types of abuses are unreasonible handcuffs to business, and are job killers.
Realtors Are Liars®
Big time. They are F$&*in’ Liars. My realtor has been telling me how good the house is I bid for and now they want me to pay 15K more for it. I told them they can sell it to someone who will pay 15K more.
Finally, I had to tell my agent that are you working for me or the other realtor. It is all screwed up.
Lower your offer by 15K.
The agent is working for him/herself, and ultimately being paid by the seller. In the pecking order, you’re not even sucking hind teat.
Buyers fund the deal, not the seller. No buyer, no deal.
Sorry for not finishing my psycholigical warfare stuff, oxide & RAL. I’ve been at the health rehab (mom/post hip surg). Will do when time.
“psychological ” sp/rushed
Before fastening your lips, make sure there’s more than one teat dangling underneath…
“The agent is working for him/herself, and ultimately being paid by the seller. In the pecking order, you’re not even sucking hind teat.”
Absolute horsesh!t. The buyer brings the cash.
Walk. Just walk.
NAR nor the “local board” do anything about the corrupt bastard.
Never understood the “seller’s agent” deal, at least as currently configured.
He/she is still on commission. Meaning that unless you buy, they don’t get paid. And they are only cutting their commission if they get you into a cheaper house, so their incentives are to get you into the most expensive house, sooner rather than later.
Salesmen on commission are NEVER your friend, if you are a buyer.
Still, the housing industry regards current conditions as unbendingly difficult. Builder magazine, a trade journal, complained of “the absolutely hostile environment for borrowers’ access to home mortgage credit.” The National Association of Realtors blamed dismal home-sales numbers for June on a spike in sales cancellations that was caused in part by tightening standards.
http://www.chicagotribune.com/classified/realestate/sc-cons-0728-umberger-lending-20110729,0,6769651.column
Mortgage rates plunge, flirting with new lows
NEW YORK (CNNMoney) — As Congress and President Obama hammered out a debt deal over the past week, mortgage rates plunged — hitting new lows in some instances.
The 30-year fixed rate, usually the most popular choice for homebuyers, fell to 4.45% from 4.57% last week — its lowest point since last November, according to the Mortgage Bankers Association.
Meanwhile, the rate on the less popular 15-year fixed plunged to a new record low of 3.52%, down from 3.67% a week earlier.
The up-front points lenders charged dropped as well, to 0.78 from 1.14 for 20%-down loans, according to the industry group. A homebuyer financing a $200,000 mortgage could save $14 a month and pay $720 less at closing based on the current points.
The rock-bottom interest rates drove up total mortgage applications — both for purchases and refinancings — by about 7%, compared with a week earlier, said Michael Fratantoni, the Mortgage Bankers Association’s vice president of research and economics. While the increase may seem substantial, he noted that applications are still well below last year’s level.
Isn’t there a finite number of refinancings that can take place? The way they’ve been bouncing along, what’s the savings to keep refinancing?
“A homebuyer financing a $200,000 mortgage could save $14 a month…”
Plus, from the price action of late do these loanowners really think it’s wise to run the appraisal gauntlet over and over?
A homebuyer financing a $200,000 mortgage could save $14 a month…”
And how much do you have to spend in order to save that $14 a month? Back in ‘05, I was curious about refinancing the Arizona Slim Ranch. I was told that my closing costs would be about $2k.
So, I decided that I had other things to do with my money. I didn’t refinance this place. (Whew!)
Reposting from yesterday. Frankie (in the the UK) came through with a report on the Netherlands:
—-
Yesterday you asked me about the Dutch House market. I’m based in the UK so I’ve little exposure to it. From here we can see Southern Ireland (Eire), Spain and most of Southern Europe are struggling according to our media (I’d use a stronger words than struggling), but news of Northern Europe is sparse to say the least. Assuming no news was good news I’d rather discounted them as bubble territory; however perhaps I’ve been wrong.
Dutch Housing Market Quarterly
Existing homes market
Downward trend continues
The slide in house prices seen in the fourth quarter of 2010 continued into the first quarter of 2011. The existing homes price index (PBK) of Statistics Netherlands/Land Registry dropped by 0.5% compared to the last quarter of 2010. This compares to a drop of 1.1% (q-o-q) in the last quarter of 2010. House prices are currently 1.2% lower than a year ago (figure 1). This second successive quarterly drop would appear to imply that the stabilisation of prices in the period from late 2009 to mid-2010 was merely temporary.
http://www.rabobank.com/content/images/DHMQ2011Q1_tcm43-141587.pdf
——-
When nhz was around he said that the Dutch government was supporting ever-rising prices. No longer, I guess…
NHZ? That’s way old school THBB!
Houses for today. Start with the low end:
http://www.zillow.com/homedetails/112-Duvall-Ln-APT-102-Gaithersburg-MD-20877/2125596679_zpid/#{scid=hdp-site-map-list-address}
1974 condo conversion 1/1.
Backs right up to a noisy routh 270.
Pending short sale $40K.
Zestimate $115K (way off)
HOA includes utilities.
There are several other condos for sale at the same address.
And here’s the high-end:
http://www.zillow.com/homedetails/19000-Dellabrooke-Farm-Way-Brookeville-MD-20833/58243171_zpid/#{scid=hdp-site-map-list-address}
2003 vintage 6400 sq ft 5/5 brick front on a half-acre. It’s got a pretty nice inside, must be a blah yard because there are few pictures. The pictures of the interior show how difficult it is to furnish those big rooms. The furniture is just too small. The place must echo like Mammoth Cave. The owners have bad taste in clothes too.
2003: Sold $680K
Peak listing $875K
Recently sold for $757K
So, not much gain on the high end.
“The owners have bad taste in clothes too.”
haha…you should have your on show on HGTV.
Jobless Recovery on track for record joblessness:
Now THAT’s how you do a Recovery!
http://blogs.ajc.com/business-beat/2011/08/03/planned-jobs-cuts-surge-60-percent-in-july/?cxntfid=blogs_business_beat
Cue Hwy, “It’s Bush’s fault!”
It is 30 years of using debt to pretend that trade deficits don’t matter. Worked great until everyone maxxed out on debt. You can only live on debt for so long.
Take the household and business debt in 1980. Adjust 2.4x for inflation and 1.2x for populaiton and that debt should now be $8T. It is actually $14T.
You can only increase debt at 3x the sustainable rate for so long, before it comes crashing down.
It is not Obama’s fault. It is not Bush’s fault. It is the US population’s fault for not wanting to deal with reality 30 years ago.
Nix, nix, nix Mr. Bill, Cheney-$hrub Policy goal$ where just add-on’$:
Islamic Nation Building War$ #1
Islamic Nation Building War$ #2
$2 Trillion$++++++ Treasure (Blood too!) added to”
dotbombcom 2000 = “…vastly oversold Debacle #1″
$ingle RE Deposit$ Transaction$ = “…vastly oversold Debacle #2″
Now looks who’s running from the vault:
It’s masked men with a Goldenaman$ucks logo on their blazer$:
Commentary: Hedge funds getting out, and so should you
“Financial innovation has rolled over and died. Regulations are finally starting to bite into profitability. And, most importantly of all, the debt bubble of the last 30 years has gone into reverse.”
“The predictions of the decline of the investment banking business made in the aftermath of the credit crunch are finally coming true.”
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
Time to Dump Goldman, and Other Investment Banks
by Matthew Lynn / Wednesday, August 3, 2011/ Market Watch
Over last weekend, it emerged that one of London’s biggest hedge funds, Lansdowne Partners, had sold its entire holding in Goldman Sachs — the world’s most successful, if often reviled, investment bank. It was a big move for the fund — it held around 1% of Goldman, worth around $850 million. Nor will it have been insignificant for Goldman either. Lansdowne was one of its top 20 shareholders.
But maybe the credit crunch actually was the end of the glory days of the investment banks — just with a very long fuse.
Finally, and, perhaps most importantly, the era of de-leveraging has begun. The investment banks boomed during three decades when everyone was ramping up debt. Finding new, clever ways of inflating the debt bubble was their most basic purpose. But we are now entering a decade when the developed world — reluctantly, in most cases — will have no choice but to start paying down debt. It is very unlikely they can grow through that
Looks like “Thee Market$” have seen their “Future$”
“TrueReduceTheDeficitNow! Today! Hurry!™”
heheeeheeeheehaahaaahaaheeehaahaaa… (Hwy50™)
There’s a link in there to another story on the ten “sickest” housing markets. Interesting in that not a single city on that list is a coastal city - they’re all flyover/heartland cities. You know the ones, the ones that never had a bubble.
They had a “stealth bubble”. Prices didn’t increase like they did along the coasts, but the job markets collapsed.
Ten Sickest Housing Markets
1. Tucson
2. Indianapolis
3. Memphis
4. Atlanta
5. Baton Rouge
6. Dayton
7. Detroit
8. Kansas City
9. St Louis
10. Oklahoma City
And all of them look like ideal Oil Cities to live 10-15 miles away from. Well maybe not Tucson. Sorry Slim, no water.
And while I’m at it, here are a couple more lists from the same website 247wallst dot com Most Popular (no surprises…)
Nine foods the government pays you to eat (most subsidies)
9. Sunflower oil
8. Peanut butter
7. Ground beef
6. Milk
5. Beer
4. Rice
3. Soybean oil
2. Bread
1. Corn Syrup
Ten States which pay the most taxes.
1. New Jersey 12.2%
2. New York 12.1%
3. Connecticut 12.0%
4. Wisconsin 11.0%
5. Rhode Island 10.7%
6. California 10.6%
7. Min 10.3%
8. Vermont 10.2%
9. Maine 10.1%
10. PA 10.1%
Ten States which pay the least taxes.
50. Alaska 6.3% can you say pipeline
49. Nevada 7.5%
48. South Dakota 7.6%
47. Tennessee 7.6%
46. Wyoming 7.8%
45. Texas 7.9%
44. New Hampshire 8.0%
43. South Carolina 8.1%
42. Louisiana 8.2%
41. New Mexico 8.4%
They subsidise beer, awesome! Finally some gubernmint funds well spend. I’ll have a six pack in celebration.
Actually beer prices are remarkably stable over the last 25 years or so. Back in 1987 I paid about $5 a six pack for imports and yesterday I bought a 12-pack of Pilsner Urquell on sale for $10.49.
Wo-o-o! Tucson’s number one! Yay, team!
Isn’t Atlanta ( #4 on the list of sickest housing markets ) where HBB ex-poster Eddie lives ?
*Drunken Ben Bernanke Tells Everyone At Neighborhood Bar How Screwed U.S. Economy Really Is*
If this wasn’t true then they couldn’t post it on the internet, could they?
www dot theonion dot com/articles/drunken-ben-bernanke-tells-everyone-at-neighborhoo,21059/
“SEWARD, NE—Claiming he wasn’t afraid to let everyone in attendance know about “the real mess we’re in,” Federal Reserve chairman Ben Bernanke reportedly got drunk Tuesday and told everyone at Elwood’s Corner Tavern about how absolutely f#cked the U.S. economy actually is.
Bernanke, who sources confirmed was “totally sloshed,” arrived at the drinking establishment at approximately 5:30 p.m., ensconced himself upon a bar stool, and consumed several bottles of Miller High Life and a half-dozen shots of whiskey while loudly proclaiming to any patron who would listen that the economic outlook was…
After launching into an extended 45-minute diatribe about shortsighted moves by “those bastards in Congress” that could potentially exacerbate the nation’s already deeply troublesome budget imbalance, the Federal Reserve chairman reportedly bought a round of tequila shots for two customers he had just met who were seated on either side of him, announcing, “I love these guys.”
It’s not as funny when you consider that truth is almost always stranger than fiction, especially nowadays.
The Bernank is going to need a stiff drink tonight. Dow down 300.
Now the margin calls start coming in, and when people can’t sell what they want to sell, they sell what they can sell. Comiddities are likely to follow, until Ben steps in with a QE3.
I wonder if you can fix a solvancy issue the same way you fix a liquidity issue?
I wonder if you can fix a solvancy issue the same way you fix a liquidity issue?
You can’t.
And that’s the big problem that underlies the government fixes. They’ve confused the big banks’ problems — which are rooted in insolvency — with liquidity problems.
Injecting liquidity into an insolvent entity does not cure the problem.
So the tequila shooters won’t help?
He’s probably busy injecting liquidity into his pants right at this moment.
LOL! +100
So Wall Street is now price in a recession? How far down to stocks have to go to get the dividend yield up to 4.0%? We need a big decline just to price in record profits.
Actually, Europe is blowing up again. Italy stock market is way down and governments are working to keep money markets liquid as people are forced to pull money to cover margin calls.
I think there is a battle between those that are trying to price in a recession, and those that are trying to price in QE3. With Jackson Hole Fed conference next week, now is the time to price in QE3, then go to Helicopter Ben and say “turn on the printing press or the market will crash”.
Next week is Jackson Hole, eh? Maybe the PPT is standing back to try to FORCE QE3!
I just checked the market, Gold is still in a bubble. Time to get out and into the safety of government bonds. Gold doesn’t pay any dividends either. I think I will sell my PM holdings and buy some of those high yield government treasuries. I hear Greek treasuries pay 25+% interest. Yeah, that’s the ticket…
/sarcasm off
LOL! Maybe someday we’ll see sign twirlers: “We buy Greek bonds!”
I wonder, in 100 years from now, what will be written in history books about the current time period. Historians will ponder “What the hell were they thinking?….”
Interesting times, but I would still prefer calmer times and a 10% inflation adjusted return on the stock market like in the good ole days pre 2000. I don’t think those days are coming back, not in my lifetime.
100 years from now they might be pondering how to make fire using two rocks.
1680.
I stopped buying at 1000 hoping for a correction. Been 2 years already…….
meh…i wanted to get in at $ 900.
wife wouldn’t let me.
Since gold hasn’t corrected by now, it never will — just like housing “never would correct” circa 2006…(also remember back in the day, the saying was, “the stock market always goes up”…)
Market Snapshot Archives
Aug. 4, 2011, 11:41 a.m. EDT
U.S. stocks fall hard as economy weighs
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) — U.S. stocks thudded lower on Thursday, pushing the Standard & Poor’s 500 into correction territory, as Wall Street retreated down a wall of economic worry.
One market strategist said both the Main Street and Wall Street are suffering from crisis fatigue after “two weeks of Washington putting us over the edge” before reaching a deal to hike the federal debt limit.
“We’re just worrying ourselves to death,” said Bruce McCain, chief investment strategist at Key Private Bank. “How do you get out of this roller coaster of the relentless onslaught of bad news? Look at the data, it’s not that bad, it’s showing the economy is still growing, that this is a soft patch with expectation that things will improve in the third quarter.”
…
When you can’t sell what you want to sell, you have to sell what you can sell.
Gold won’t correct until margin calls starting hitting HARD. The amrgin calls will finally force traders to dump thier gold to meet thier margin calls.
I certainly wouldn’t park all my dough in Greek bonds, but a useful strategy might be to diversify away from PMs into a portfolio of Euro-denominated PIIGS bonds which pay much higher rates of interest than, say, U.S. Treasurys.
Three arguments support this strategy:
1) Everyone and his dog now “knows” gold is the best investment.
2) Everyone and his dog also “knows” that PIIGS bonds are “too risky.”
3) Anyone who is paying attention can see that so far as Megabank, Inc is concerned, PIIGS are too-big-to-fail.
PIIGS are too big not to fail.
The problem is, we don’t have the information that the big, inside players have, about what the market leaders (central bankers, big company heads - those who make the financial weather) are thinking.
If we had that information, we could make some cash. Otherwise, it seems to me too much like playing poker with one’s eyes closed.
remember this the next time the debt ceiling debate arises:
“Not a single government bond default has ever resulted from a debtor government’s self-imposed debt limit. The US business media is popularizing a fiction that one day a country hits a self-imposed debt limit set by the legislature and the next day it defaults on its debt, that a debt limit has some bearing on creditworthiness and interest rates.
Creditors decide default and inflation risk, not borrowers. The credit limit imposed by creditors on a debtor country is what matters, not some arbitrary debt limit that a debtor country imposes on itself.
When — some day — Treasury bond yields do rise it will be due to inflation risk not default risk.” - eric janszen-itulip.com
Why can’t the USA do this? Why does the MSM never talk about it?
Brazil moves to protect industries from foreign rivals
http://www.bbc.co.uk/news/business-14383554
The measures include tax breaks for Brazilian-made products and anti-dumping measures on cheaper imports mostly from China.
Brazil’s booming economy has pushed the value of its currency, the real, higher making its exports more expensive.
The president said it was “imperative” to protect Brazilian industry and jobs from unfair competition.
Brazil’s manufacturing industry has been suffering because of a surge in foreign imports, mainly from China, and industrial production has been falling in recent months.
This has happened despite the fact that Brazil’s economy is one of the world’s fastest growing.
Brazil has accused the US and China of lowering the value of their currencies, driving up the real, which has gained 6% against the US dollar this year.
Called “Bigger Brazil” the long-awaited plans include tax breaks and export incentives for local producers, as well as tougher controls on the importation of foreign goods.
Speaking at the unveiling of the plans, Finance Minister Guido Mantega said Brazil was operating on “a predatory, competitive world stage” and promised rigorous regulation of imports.
Brazil’s government believes that many countries try to bypass import controls by routing goods through a third country.
Brazil has already enacted a series of anti-dumping measures aimed at Chinese-made goods.
That’s communism, how dare you stand in the way of corporate elite making money selling the nations jobs to China!!!
That is the worst kind of Communism. MEGA INC. should have the right to outsource jobs, dump their toxic waste into the closest river, employ child labor slaves and shelter their profits in a tax haven. Most important they need to create shareholder value and a nice bonus for the CEO. What is the world coming too if you can’t even exploit child labor without some government clowns spoiling the fun? A cruel world we live in.
That is the worst kind of Communism.
I’ve been thinking. Is not globalization a kind of “Communism for Countries” collectivist command economic program?
I mean part of the definition of communism is a system “structured upon common ownership of the means of production“
Before globalization the USA owned most of the means of production because protected technology, industries and factories ARE the means of production. Why did we own most of the means of production? Because we earned it and in capitalism when you earn something, it is supposed to be yours. But what happened?
I’ll tell you what happened. The “Country Communists” CEO’s and their shareholder masters decided to spread the wealth around by globally redistributing our means of production. They confiscated our means of production and redistributed it to other countries.
So if we look at the economic system on a larger Country by Country level, is it not the fact that globalization has led to more of a common ownership of the means of production? Whereas before it was held in private (USA’s) hands? Then has not our national wealth been stolen from us by the Country Commies? Redistributed?
Yes. Our American wealth, and means of production have been redistributed to other countries by the CEO Country Communists.
“Why can’t the USA do this?”
china stops lending the U.S. money.
everyone’s afraid of the big bad interest rates.
in China they will be worried of things worse than big bad interest rates if this came to pass. you think China can stop lending?
they can want in one hand…and doo doo in the other.
when rates rise…we spend more money on interest to the banks and less on chinese crap.
we buy less chinese crap…they got less money to spend.
oops…i meant less money to lend…not spend.
America’s 10 Sickest Housing Markets
by 24/7 Wall St. Staff
Wednesday, August 3, 2011
By Charles B. Stockdale, Douglas A. McIntyre and Michael B. Sauter
For three years, the real estate market has been going in one direction — primarily down. Some areas, however, have begun to recover. Recent S&P/Case-Shiller data show that among the top 20 housing markets in the U.S., 18 had very modest improvements in sales prices during May. Others, like Washington and Boston, have begun to at least stabilize from a year ago.
Few markets, however, can match Washington and Boston. Robert Shiller has been stating that home prices could fall another 10% in the next year. Inventories in some major metropolitan areas would take years of sales to get back to 2005 levels. Then, the normal inventory of homes for sale was replaced on average every six months and it was unusual for a house to be on the market for a year. Foreclosure rates remain high and only the robo-signing scandal has slowed the process. Once this is resolved, economists fear the market will be flooded with even more vacant, unsold homes.
…
While I don’t know about the way they combined the data and threw out some markets, etc., I like the baseline data that they looked at.
Number of homes listed for sale, and number of sales is WAY less relevant than the vacancy rates. Ultimately housing markets will recover when supply/demand come back into balance. This is not supply/demand for purchasing homes, but supply/demand for shelter, which is much better measured by vacancy rates.
If you have massive numbers of empty residences, it doesn’t matter that there are few listings and good sales numbers relative to the number of listings…once there is any sign of life, the market will be flooded again.
I would be interested in seeing the data without removing cities with quarterly improvement. The noise in the data is such that most quarterly moves up are within 95% confidence of the prior quarter. I think a City should only be moved out if the change was great enough to get out of the prior period’s (month or year) confidence interval.
Other than that nit, I like the thinking behind the article.
By the way, if you turn the analysis around to see which markets have the lowest vacancies (I did a quickie, without eliminating “good” markets that have had increasing vacancies over the past year or so, and going back one quarter for data if the markets showed a big fat 0, which just isn’t credible), among the top markets are:
Rochester, NY
San Jose, CA
Oxnard/Ventura, CA
Worcester, MA
Pittsburgh, PA
Boston, MA
Milwaukee, WI
Salt Lake City, UT
Portland, OR
Washington DC
Honolulu, HI
If you cut military spending, and cut troop counts from places like Prot Hueneme (Spelling?) which is the main west coast base for the Navy SeaBees or from Pearl Harbor expect Oxnard (near Port Hueneme) and Honolulu to fall off that list.
I think it would probably take more than the decrease in military spending for both of those. Honolulu draws from Asia, and Ventura County is notoriously difficult to build anything new, and because of that, any military moving out would likely result in simply more people from greater LA moving closer to the coast (which also has relatively low vacancy rates–not in my top 10, but in the top 20).
That said, just on Ventura County, the numbers: Port Hueneme employs about 16,000 (civil, military, and contractors), with ~20k living in Port Hueneme (men/women/children). Ventura County is home to about 800,000 people. If all 20k moved out (military wasn’t just cut in the area, but eliminated, and people packed their bags, didn’t look for other work), and no one from LA county moved in, you could expect the vacancy rate to rise by about 2.5% (20k divided by 800k). This would take Oxnard from #5 on my list to #10. The Oxnard/Thousand Oaks/Ventura homeowner vacancy rate is about 0.5% currently (due in large part to the development restrictions).
Oxnard/Ventura, CA
yes expensive because its different here right
BTW lots of cops and firefighters live in Ventura Co and those people are golden
I’ve made no comment on price, just vacancy rates. You can still have falling prices with low vacancy rates, but generally such falls are more muted than in markets with high vacancy rates.
If by different, you mean “very difficult to build anything new”, then yes, it is different in Oxnard/Ventura than in many parts of the country.
If by different, you mean “the laws of supply and demand cease to work”, then no, it’s not different.
If by different, you mean “home prices will stay higher than the marginal buyer can afford to pay”, then no, it’s not different.
I’m just saying that low vacancy rates are a proxy for better supply/demand balance (more so than listings/sales), a prerequisite for market stability, and thus a precursor to price stability. Econ 101.
Don’t know about Boston, but as I’ve been saying, buy now in the D.C. area (MoCo and NoVA) or be priced out forever.
I can’t figure if DC and Boston are the best markets, or the ones that are expected to drop 10%.
DC has alread dropped to 2004 prices and i’m not sure they’ll ever drop below that.
Boston low vacancies: all those college students (55 colleges and universities in Boston proper*) including the ones that stick around for entry level career positions after graduating. Take the schools out of Boston and things would change drastically. Well, we know that isn’t going to happen but prices may still drop w/changes in education funding/loans.
http://en.wikipedia.org/wiki/List_of_colleges_and_universities_in_metropolitan_Boston
i think that vienna/oakton are still overpriced.
i also could see vienna becoming like clarendon and oakton becoming like north arlington over the next 25 years…or less.
i am trying to reconcile my bubble mind with the fact that there can be some truth to the old mantra…location…location…location.
(holy crap…did i just say in a round about way…it’s different here?)
i still think interest rates are the key. they must go up…and when they do…prices must come down. sure as the damn sun is gonna rise tomorrow.
Of course interest rates will go up. Just not soon if you look at the trend of the 10-year note and current mortgage interest rates. BNOBPOF.
BNOBPOF
What does this stand for?
Buy now or be… (you know the rest).
BNOBPOF = Buy Now Or Be Priced Out Forever
Northern Virginia is very overpriced; the same houses cost far more than they do in MoCo.
I don’t think it’s going to be the interest rates which bring down DC. $500B in defense cuts (read, VA jobs) are on the chopping block. And if that QRM reg goes through, suddenly banks are going to start looking for 20% down and 28% rule. That’s really going to crash things good, regardless of interest rates.
Global Sell-Off Underway: New Questions Facing the Markets- Breakout
With U.S. markets tumbling on both the rumors and the news of the Debt Ceiling resolution, it’s time to look ahead and ask the new questions facing the markets.
Commodities are down. Gasoline 19 cents, gold about 15 dollars. Waiting for capitulation, then gonna stick at least a few toes into the water.
“I want the people of America to be able to work less for the Government and more for themselves. I want them to have the rewards of their own industry. That is the chief meaning of freedom.”
~President Calvin Coolidge, 1924
One of our best presidents, IMO.
I’m sure he wasn’t thinking about the inflation tax levied on the middle class and poor by the elite. I’m sure he didn’t see a situation where the elite paid effective tax rates of 14% vs the middle and upper middle class paying 25% and more. I’m sure he didn’t have bailouts for the elite in mind. I’m sure he didn’t see the massive sale of US jobs to China and the resulting unemployment and declining wages and standards of living for 99% of Americans.
Seriously it’s about quality of life and that is on the declinine in America due to the elite gorging at the gov trough and not paying taxes.
Sounds like Coolidge would have liked public option health care.
If you think Calvin Coolidge is one of the best president’s ever, then you are more clueless than I expected.
Yes, he presided over the greatest period of “economic growth” is US History, but it was all bubble and came crashing down. Hoover may have been in charge duiring the pop, but Coolidge is the one generally blamed for the Great Depression.
The only presidents to score worse on the long-term presidential rankings created by historians are those leading up to the Civil War that tried to dealy and pray the issues would go away.
Coolidge was one of the worst presidents ever.
I would say worst ever, but I hold that position reserved for George W Bush.
I’m in the process of working on the script for a storytelling event. My story concerns my aunt’s 1932 encounter with President Hoover.
While doing the research for my script, I was amazed to learn how popular Hoover was in the years before he became President.
Hoover’s big crimes was, when the pop happened, tax revenues dropped, he saw the big government deficits, and he demended large cuts to government spending.
Of course, the massive cuts to government spending was pro-cyclical, turning a stock and bank crash into a full fledged national economic collapse.
No, Hoover’s big crime was a rampant GW Bushic cronyism and his complicity in the Teapot Dome scandal as Harding’s Commerce Secretary. As we’ve seen, democracy– and by extension, it’s economy, does not function at its finest when the country is ruled by corporate oligarchy.
Layton McCartney’s excellent account, “The Teapot Dome Scandal,” examines his role in fine detail.
EXCLUSIVE: 13 Charged in $60 Million Mortgage Fraud Scheme
August 04, 2011| FoxNews.com
The FBI has arrested 10 people charged with participating in a $60 million mortgage fraud ring early Thursday morning in the New York area, FoxNews.com has learned.
Three more suspects are expected to be in custody by the end of the day, an FBI official said.
The 13 alleged members of the mortgage fraud ring include real estate attorneys, title closers, appraisers and straw buyers. They were arrested on conspiracy to commit bank fraud and wire fraud charges.
All are expected to appear before a judge in the Southern District federal court on Thursday.
One of the main subjects created numerous mortgage brokerages, including FCE and TAT Mutual Capital. Through these brokerages, the subject allegedly facilitated fraudulent real estate loan transactions throughout the New York metropolitan area.
The scheme involved more than 100 properties in New York and Florida.
Is this a way of nailing a little fish so that they’ll talk and implicate the bigger fish? ISTR hearing that drug trafficking rings are prosecuted that way. Ditto for mafia cases.
Oops. My bad. Should have said “nailing THE little fish.”
More stories of governemnt regulation choking off business’s ability to make money. You may call it fraud, but I call it free enterprise, rugid individualism, smart business.
Did someone create a company for the sole purpose of giving to a political action committee trying to boost Mitt Romney’s 2012 presidential campaign?
That’s what it looks like. As The Ticket reported earlier this week, three firms gave $1 million apiece to Restore Our Future, a conservative “super PAC” planning to spend millions to help Romney’s White House bid.
One of those companies was W. Spann LLC, a mysterious New York-based company that apparently closed up shop last month shortly after its contribution to the pro-Romney PAC. As NBC News’s Michael Isikoff reports, the company was formed in March by Boston estate tax lawyer Cameron Casey and listed a midtown Manhattan address where the landlord says there’s no record of the firm being a tenant.
The company gave $1 million to Restore Our Future on April 28, and according to records obtained by Isikoff, dissolved on July 12th, just two weeks before the pro-Romney PAC disclosed its donors to the Federal Election Commission. There’s no indication in the records of what the company did or who its owners or principals were.
How dare this author question the free speech of money!!
Mitt was born with a gold plug up his butt.
As I heard Bill Mahr say, Romney has no chance once the Republicans running against him let it slip that Morman’s aren’t really Christians as they do not accept that belief in Jesus as the Lamb of God is the one and only way into heaven.
Mormanism is closer to Islam, in that it teaches that Jesus was “a prophit”, but not the one, most important prophit, than it is to Christianity that teaches Jesus was the son of God and faith in him is the only way to heaven.
That sounds closer to Judiasm than Islam…
I just had a thought. What if the debt ceiling fiasco was a plan by the mainstream Republicans to undermine the Tea Party? Encourage someone the Tea Party trusts to tell them not to compromise, which is what they are inclined to do anyway - an easy sell. Let the Tea Party take the fall for the subsequent economic decline so that Romney can win the nomination, instead of a Tea Party outsider like Michelle Bachmann.
Is this just twisted thinking on my part?
The real population bomb
Colleen Carroll Campbell STLtoday.com
Posted: Thursday, August 4, 2011 12:00 am
…
The possibility of such demographic decline may sound appealing in theory: Fewer babies mean more wealth for the rest of us, right? Not so fast, says Longman.
“Population growth is a major source of economic growth,” he writes in his 2004 book, “The Empty Cradle.” “More people create more demand for the products capitalists sell, and more supply of the labor capitalists buy. Economists may be able to construct models of how economies could grow amidst a shrinking population, but in the real world it has never happened and businessmen know it.”
Businessmen may know it, but too many politicians and anti-natal activists do not. So they continue to brandish their tattered copies of “The Population Bomb” and harangue parents of large families for contributing to what they consider the ultimate form of environmental pollution: human life.
In their zeal to preserve the planet from the scourge of babies, these activists overlook the fact that humans are problem solvers and producers as well as consumers. They forget that the solution to poverty is not to eradicate poor people, but to use human creativity, innovation and solidarity to create a broader distribution of the Earth’s resources and to reform the corrupt political structures that stop citizens in developing nations from accessing basic necessities.
Although Erlich’s acolytes may be hopelessly locked in the 1960s when it comes to their population views, more demographers and economists are recognizing the truth our ancestors knew well: that children are not burdens but blessings, keys to our future prosperity and guarantors of our social safety net. For a nation on the brink of insolvency, that’s reason enough to congratulate the Beckhams and the millions of parents like them who are making sacrifices today to raise up a new generation that will benefit all of us tomorrow.
…
The type of population growth we’ve had in the past hundred years would’ve been impossible without cheap energy, something which is now in diminishing supply. What’s the replacement for that now? Is there a way to keep growing the population without a diminishing quality of life given resource constraints even if one has a definition of quality of life that isn’t focused on collecting discretionary consumer goods?
If it were not for immigration, much of it illegal, we would already be seeing a falling US population.
I was born at the leading edge of the Baby Bust of the late 60s and 70s. We will be crushed by the Boomers that expect us to give the majority of our productivity to provide them a 20-30 year vaction at the end of thier working days, and a generation of children of illegals.
But, I suppose, that is better than being trapped between the Boomers and NO ONE.
A 1.7 birth rate is not sufficient for ZPG.
Two will do, adopt a few -
BINGO we have a winner.
“Economists may be able to construct models of how economies could grow amidst a shrinking population, but in the real world it has never happened and businessmen know it.”
Well, there was Black Death. The value of labor rose relative to the capital of the time — land — but landowners insisted that their relative well being should be locked in by feudal scales.
The result was a series of rebellions, such as Wat Tyler’s in England. From Wikipedia:
‘The Black Death that ravaged England in 1348 to 1350 had greatly reduced the labour force, and, consequently, the surviving labourers could demand higher wages and fewer hours of work. Some asked for their freedom. They often got what they asked for: the lords of the manors were desperate for people to farm their land and tend their animals.”
“Then, in 1351, King Edward III summoned parliament to pass the Statute of Labourers. The statute attempted to curb the demands for better terms of employment by pegging wages to pre-plague levels and restricting the mobility of labour; however, the probable effect was that labourers employed by lords were effectively exempted, while labourers working for other employers, both artisans and more substantial peasants, were liable to be fined or held in the stocks. The enforcement of the new law angered the peasants greatly and formed another reason for the revolt.”
Does anyone seriously think the Beckhams are making “sacrifices” to raise their children?
Well, David did put off the purchase of his 7th. Ferrari until after their daughter was born. That had to sting a little.
She gave up singing, so yes!
What good are more babies if we can’t educate and employ the ones we already have? Heck in one budget interation, the R’s refuse to even FEED the babies we have, by cutting WIC.
What good are more babies if we can’t educate and employ the ones we already have?
Which may explain why, during this, the Great Recession, the U.S. birth rate has fallen off a cliff.
Birth rate also fell during the early Depression years of the 1930s, and interestingly enough, throughout much the 1920s as well. The birth rate started creeping up during the late 1930s and really took off after WWII.
I always thought R’s “pro-life” policies are very inconsistent with their economic policies and war policies to say the least.
While I don’t agree with all of their stances, the Catholic church is very consistent.
Ox we need to cut WIC….why there are at least a million couple who cant have kids, and we have a million kids that need good homes.
It takes good ideas to make businesses and to make products. Not just hordes of people. I look at undeveloped areas of the world, and they’ve got lots of people, but miserable living standards. Lightly populated areas tend to have higher living standards.
As I look around here, in the US, one thing becomes apparent: stupidity and fecundity go hand in hand.
Two notes:
1) “It takes good ideas to make businesses and to make products” - and good ideas come from a few smart people.
2) I’m not accusing everyone with a large family of stupidity. But a common theme in the underclass seems to be large numbers of children.
“But a common theme in the underclass seems to be large numbers of children.”
When Medicare and SS get cut, will people resort to having more children to care for them in their old age?
Fewer babies mean more wealth for the rest of us, right? Not so fast, says Longman.
More wealth for the poor less for the rich. I have read the Black death of Europe helped the working poor to get better wages as the rich had less supply of labor so had to pay more
think about it if you’re at the top of a wealth pryamid any decrease in the base will funnel less money up to you.
I don’t when the super rich will eventually get around to opening the boarders to immigration here in America to rebuild their pryamid scheme? railroad workers want too much money building the western railroads? No problem import Chinese labor. Thats how it works.
I know they expanded their wealth generating pryamid machine greatly by outsourcing which was made possible by advances in computing power.
And they lost a bunch of wealth by foolishly lending on RE ( just because they are rich doesn’t mean they are smart ). Too bad they were back stopped by the Fed who ultimately gets it back form the workers.
Things are shaping up as expected…
EU urges changes to bailout fund as stocks, euro tumble
BRUSSELS (AP) — Mounting worries that Italy and Spain won’t be able to repay their debts pummeled stocks and the euro Thursday and piled pressure on the 17-country eurozone to overhaul its crisis strategy.
And despite indications that the European Central Bank has restarted its bond buying program after a four-month hiatus in an attempt to calm markets, the financial pressures on Italy and Spain remained acute.
European Commission President Jose Manuel Barroso admitted as much, urging eurozone leaders to make further changes to their bailout fund — including boosting its size — to ensure it can effectively stem the debt crisis that has rocked the currency union for 21 months.
Barroso’s appeal and the ECB’s apparent turnaround came just two weeks after eurozone leaders reached what they branded a “historic” deal on the currency union’s crisis strategy, including a second massive bailout for Greece and far-reaching new powers for their rescue fund.
However, the accord failed to stem rising panic on financial markets over the ability of the eurozone’s third and fourth largest economies to repay their debts.
Although the yields, or interest rates, on Italian and Spanish bonds were below records reached earlier in the week — possibly linked to purchases by the ECB — the two countries’ stock markets were, like all others in Europe and the U.S., firmly in the red, while the euro slid 1.5 percent against the dollar.
In a letter to eurozone leaders dated Aug. 3 but made public Thursday, Barroso said the main reason behind the two countries’ market woes was “the undisciplined communication and the complexity and incompleteness of the 21st July package.”
That, he wrote, has led to “a growing skepticism among investors about the systemic capacity of the euro area to respond to the evolving crisis.”
That sucker is going down. The bailout fund is way too small to accomodate Spain and Italy. The only option is to increase the size of the funds from 440 billion to something like 1.5 trillion. The fund lives from the AAA ratings that Germany, France, Netherlands, Finland and Austria bring to the table. Once those AAA members of the fund guarantee that kind of debt, with Spain and Italy dropping out and becoming recipients, chances are they (Germany & Co.) will have their rating cut. That of course means the bailout fund will be no longer AAA with all the attached consequences for the recipients as well as those guaranteeing the funds…you get the picture.
Time to drop cash from helicopters…
So used to the algo & other manipulations (although yesterday there was a spike in volume) it’s hard for the girl sitting at home to know what’s real.
Can’t help but think all those flash crashes were trial runs for something or were they conditioning traders to not react quickly while they run for the exits?
We’ll have our answers soon enough.
What? The lofty IMF may have a crook at it’s top? Say it ain’t so, is nothing sacred anymore!
ITEM: French court orders probe of IMF chief Lagarde
PARIS (AP) — A French court on Thursday ordered an investigation into new IMF chief Christine Lagarde’s role in a $400 million arbitration deal in favor of a controversial tycoon.
Investigators will open an inquiry this week into possible charges of “complicity to embezzlement of public funds” and “complicity to forgery,” prosecutors said.
Lagarde was France’s finance minister when magnate Bernard Tapie won a 2008 settlement with a French state-owned bank over the mishandled sale of sportswear maker Adidas in the 1990s. Critics viewed the settlement as an overly generous chunk of taxpayer money handed to a brash businessman.
The investigation comes as Lagarde is working to improve the reputation of the Washington-based International Monetary Fund after her predecessor, Dominique Strauss-Kahn, quit to face charges he tried to rape a New York hotel maid. He denies the charges.
A commission at France’s Court of Justice of the Republic — which convenes rarely and exclusively to handle cases involving government ministers — decided that an investigation should be launched into Lagarde’s role in the arbitration deal.
The probe is likely to take months and may not result in a trial — but if it does, and if Lagarde should be convicted, she could face up to 10 years in prison. Lagarde can only be questioned by prosecutors if preliminary charges will eventually be filed against her.
The sky is pretty much falling. What hare-brained scam, I mean plan will materialize to solve the “crisis”. (I love how any drop in value of anything is considered a “crisis”, but a massive run-up ridiculous bubble is called a “New Era”)
“new paradigm” ?
Something funny…..
Got a phone call yesterday evening from a number I didn’t recognize. Let my google voice pick it up. It was a robo call for a presidential poll. This is how google voice transcribed it.
Morocco momma - Barack Obama
Meeting on me - Mitt Romney
For effort imply lefty - 4 for Tim Pawlenty
Fine for several Ganen - 5 for Sarah Palin
Willing. Paul - Ron Paul
………………………….
Good Evening. This is Robert. Yeah, I’d like to know which candidate you currently support for President in 2012. You’d enter. One for Morocco momma. 2 for meeting on me. 3 4 Michelle Bachman, For effort imply lefty. Fine for several Galen for Rick Perry you. 7. For willing. Paul. 40 for other were undecided, Yeah, once again. Please enter you one for Morocco momma. 2 4 meeting on me. 3 4 Michelle Bachman, For effort imply lefty. Fine for several Galen expert. Rick Perry, Yeah 7 for willing. Paul your 0 for other or undecided. Yeah is enter. One for Morocco momma. 2 4 meeting on me. 3 4 Michelle Bachman, For effort imply lefty yo line for several Galen expert. Rick Perry. 7. For willing. Paul. 40 for other were undecided. Once again. Please enter you one for Morocco momma. 2 for meeting on me. 3 4 Michelle Bachman, For effort imply lefty yo line for several Galen expert. Rick Perry. 7. For willing. Paul. 40 for other were undecided.
Thanks for the laughs!
Absolutely hilarious!
How Does a Four-Year-Old Spend $46,000 a Month?
by Robert Frank- WSJ- August 3, 2011
Supermodel Linda Evangelista is asking French billionaire Francois Henri-Pinault for $46,000 a month in child support. He’s the father of Ms. Evangelista’s four-year-old son, Augustin James. And Ms. Evangelista argues that $46,000 is the minimum required to provide for young Augustin in the manner to which he has grown accustomed.
Readers outside New York are probably thinking: “What’s this kid eating ?!”
Readers in New York are thinking: “She should ask for more.”
To find out how a four-year-old could possibly burn through $46,000 a month in Manhattan, I called Natasha Pearl, president of Aston-Pearl, the New York-based lifestyle-management firm for wealthy families.
Here’s the breakdown:
Childcare
Forget the nanny. Kids like Augustin need a round-the-clock child-care team, what the wealthy call “full, 24/7 coverage.” Ms. Pearl says that requires three nannies, with two rotating on full schedule and another as a backup. “And that third nanny preferably has some specialty skill, like teaching the kid Mandarin,” Ms. Pearl said. “And if he’s a boy, the third staffer might be a manny to run him around the park and throw him baseballs.”
Total cost: About $23,000 a month or more — half the total.
School
Augustin is still in preschool, which means that rather than paying the $36,000 to $40,000 a year for private school, Ms. Evangelista only has to pay about $20,000 to $30,000 for a top preschool. That means his school bill — at least for now — is a mere $2,500 a month.
Clothing
You can’t be the son of Linda Evangelista and the world’s luxury king and wear Osh-Kosh. To sheath Augustin in Chloe, Berlingot and Jacadi (does Gucci have a kids’ line?) you’re looking at $3,000 a month minimum.
Extracurriculars
Fencing, chess, French lessons, soccer and all the other add-ons that are required for any successful Manhattan four-year-old will easily run another $2,000 to $5,000 a month.
Drivers
“He probably needs his own driver since they can’t split one,” Ms. Pearl said. “If he needs to be at school at 8 a.m. and she needs to be out ’til 2 a.m., they have to have two.” So add another another $6,000 to $8,000 a month.
So we’re already at more than $41,000 and we haven’t even gotten to his daily sushi intake, the expense account at F.A.O. Schwartz and the kiddie birthday parties at Top of the Rock.
“At first glance, $46,000 seems like an extraordinary amount and it is,” Ms. Pearl said. “But for a fortunate child in New York, it is actually absolutely conceivable that his expenses could approach $50,000 a month.”
Message to Mr. Pinault: you’re getting a bargain.
They can do most of that with one manny. Find an Americanized son of those Chinese super students of the 70’s, who’s fluent in Mandarin, learned how to fence, and can maybe carry a weapon. Pay him $15K a month + room/board.* Now you have a very smart manny who can teach Mandarin, teach fencing, tutor, and drive the kid too. Give the kid $1000 a month clothing and $500 a month food allowance to teach him frugality — any monies left over pay for a trip to the beach. There, now the kid has the same cultured education for half price.
————
*companionship for mom is extra.
You don’t get it.
It isn’t about saving money raising Snotleigh. It’s about pi$$ing away the equivalent of a Third World nation’s school budget on one kid, to show up all your Hamptons/Beverly Hills neighbors.
Oh, of course. the two of them could have gone on the Oil City Plan on the mom’s income alone and the kid would have grown up just fine.
But then again, mom doesn’t want Oil City plan, or else she wouldn’t have had the baby. It’s pretty obvious the kid was for the money. After all, mom is the woman who famously wouldn’t get out of bed for less than $10,000.
Legit question: Do we get to bail out Goldman again? This time because their giant mountain of aluminum (you know, the one they have been greedily hoarding so they can screw everyone) becomes a virtually worthless commodity. Would such an action be any different from bailing them out when they were screwing everyone with bad paper? I’m pretty sure Bammy, TTT, and BB will be there for them on behalf of the outraged taxpayer.
“Legit question: Do we get to bail out Goldman again”?
When they need it (not if) absolutely! Short of the earth being struck by an asteroid, GS get what GS wants. When you “own” the WH, the clowns in congress, BB, TTT etc… What other out come could be possible? Our empire is crumbling ever faster.
Thank our lucky stars. Yes, we will get to bail out all these banks within 2 years……
it depends on how you determine the new Dodd-Frank law.
http://www.insurancenetworking.com/news/insurance_FDIC_Shiela_Bair_Dodd_Frank_regulatory_reform-26760-1.html
“Much of the debate surrounding Dodd-Frank envisioned a new mechanism by which regulators could exempt a systemically important firm from bankruptcy, and appoint the FDIC as its receiver with the mission of preventing a wider meltdown. The FDIC and others supported having giant firms pay assessments into a $50 billion fund that would support the new resolutions…
Under the new law, the administration, with concurrence from regulators, decides whether a large firm should be resolved through the FDIC mechanism, rather than through bankruptcy, to prevent the failure from affecting other companies.
Dodd-Frank also expressly prohibited bailout funds from going to individual institutions. Aid can be disbursed only in emergency situations in a more systemwide manner, through the Federal Reserve Board’s so-called 13(3) authority, and a broad-based debt guarantee from the FDIC.
The FDIC is also charged along with the Fed with requiring large firms to produce “living wills,” hypothetical resolution plans to guide regulators through a company’s structure and help ease its wind-down.
Under Dodd-Frank, if the agencies are not satisfied with a firm’s specific plan, they can force it to divest certain assets. The process suggests regulators will be interested in forcing companies to develop ways to help unwind them more easily, or in reducing their overall risk to the system.”
————–
The article also made the point that since too-big-to-fails tend to have international operations, it would be difficult for the US government to sieze the entire company for receivership.
IMO, Dodd-Frank probaby WILL prevent TBTF, as a timing issue is nothing else. Bailouts have to happend fast. This sounds like anything but.
So, I thought occured to me the other day.
I know Wall Street gave big money to Obama. Was it to buy him, or was it to get a weak president that they could blaim the collapse on?
I watched a few differnt news channels last night, some conservative and some liberal. Both made excellent cases for thier POV.
From the conservative side: We can not spend our way out of this, as we will Greece. Spending money into the USA economy just stimulates China’s economy and adds to the national debt.
From the liberal side: We can not cut our way out of this. Cutting government spending will put us back into recession, lowering tax receipts, increasing unemployment, kill the middle class, crush the poor, and give us Hooverviles.
So, what is the answer?
1) We can resign ourselves to collapse… to Brazilification/Mexicoification where the few haves have all, and the vast majority are in abject poverty.
2) Perhaps it is time to try somethign differnt, like a full fledged trade war.
Money out of helicopters. That would also punish currency manipulators. But realistically it’s probably too late to turn things around. It was too late once the housing bubble was fully inflated back in 2005. 30+ years of poor policies and idiotic voters are finally get to meet the day of reckoning.
The difference between stimulus in 1933 versus 2009 is that a lot of the stuff build in 1933 is still around (aging bridges, hydro electric, roads, etc.) while the stimulus from 2009 was spend on consumption. Now the stimulus ran out and we have NOTHING to show for except more debt.
But the stimulus really helped China.
Or at least the stimulus really helped cause inflation in China.
Now the stimulus ran out and we have NOTHING to show for except more debt.”
What are you talking about ? half the western desert is covered in giant 2 story stucco boxs.
give the termites somthing to do for the next 10 years
Let them eat termites?
I don’t read much into these fund-raisers. Wall Street generally buys both sides to hedge their bets. Half their campaign money is wasted on the loser, but the ROI is enough to cover, especially if they can get some secret Saudi’s to pitch in for the “free speech” on TV.
Obama is smart to take the money. In 2008, he got $$, GOTV work, and votes from the libs. He knows that this time he can’t expect money or GOTV. I think he will get their votes. Dems are too scared to sit at home as they did in 2010.
Obama is smart to take the money. In 2008, he got $$, GOTV work, and votes from the libs. He knows that this time he can’t expect money or GOTV. I think he will get their votes. Dems are too scared to sit at home as they did in 2010.
I’m thinking that ‘12 may be another 1992. As in, an independent will jump into the race and really shake things up the way H. Ross Perot did.
I’m also thinking that there will be quite a bit of excitement in the congressional races. That may have a substantial influence on turnout.
As for Obama, I think he’ll start reading the GOTV handwriting on the wall. Especially if a lot of his ‘08 crew finds that independent dark horse to be more interesting.
Once he reads said handwriting, we’re going to see things like United States v. Goldman Sachs and similar bankster lawsuits that we HBB-ers have been jonesing for, a massive jobs program of CCC and WPA proportions, and a public option for health care. Then watch him get re-elected in a Reagan ‘84-ish landslide.
How do you expect him to do all this without becoming dictator? He couldn’t even get a clean debt ceiling increase.
I agree with Oxide.
Nothing is gettin’ done in Washington for a good 18 months. It is nothng but election time chest thumping, polarization, and stand-offs until the elections, then another few months of lame-duck. Jan 2013, MAYBE something gets done.
“I’m thinking that ‘12 may be another 1992. As in, an independent will jump into the race and really shake things up the way H. Ross Perot did.”
It always irked me that they called themselves the “Reform Party”
I mean, OK, who doesn’t want reform? I guess that makes sense, but let’s say that the Reform Party was lucky or skilled enough to get their agenda enacted as the new law of the land. Then what the hell are they gonna call themselves?
That said, I’d love some third-party excitement. I know, I should be careful what I wish for.
We can resign ourselves to collapse… to Brazilification/Mexicoification where the few haves have all, and the vast majority are in abject poverty.
Slight correction:
Brazilification: The past 12 years have seen 35 million Brazilians enter the lower middle class. (almost 20% of the population) No major country in the world has reduced wealth and income inequality as much as Brazil in this period. The vast majority of Brazilians do not live in abject poverty now. Maybe 25% percent down from 50% 30 years ago.
The trend is their friend.
Our trendlines are running like hell in the opposite direction.
Or we could simply resolve that each and EVERY check issued by the US Treasury will be cut by 10% beginning immediately, and cut an additional 1% per year until our income exceeds our outflow.
Time to share and share alike.
Defense contractors and SS recipients, state and local governments and foreign agencies, Medicare providers, bondholders, military personnel, politicians and analysts, oil companies and postal workers, suppliers and demanders.
You get a money transfer to your account from the UST, there’s gonna be an automatic 10% reduction in the amount. No exemptions, no exceptions. Everyone.
Gordian knot, hacked.
That would include the sacred income tax refunds too, wouldn’t it? After all the UST cuts those checks too.
That would be quite the show.
No problem. You can always change your withholding
Oh yeah.
I’d rather cut everyone 10% salary than have 10% layoffs.
So, what is the answer?
1. Raise cap gain and dividend tax on elite.
2. Raise Gas tax
3. VAT tax
3. SLASH income tax on middle class
4. Do away with payroll tax using revenue from above.
5. Massive infrastrucutre spending and support for reducing our energy needs.
6. Do away with welfare and unemployment and replace with a works program.
6. CHANGE TRADE POLICY
7. Break up all oligopolies in the states as we did with AT and T. No more mergers for large companies you have to win market share.
The problem is there is NO demand - The middle class across the globe is going broke and only the elite remain with factories that soon will have no customers. They need to create customers and not with handouts but with jobs that create confidence. What we don’t need is a large population of angry people who don’t go to work. What we don’t need is further concentration of wealth.
The jobs situation is a worldwide game of musical chairs, since the global elite think that everyone trained in a basic job description is pretty much interchangable.
A bunch of people are going to be left without chairs. Some countries are trying to insure their citizens have as many chairs as they can possibly grab.
Our government is off playing Monopoly and Risk.
“…like a full fledged trade war.”
We have been in a trade war for 30 years; we just haven’t been fighting. We have been busy selling dot.coms and houses.
How ’bout default? Argentina did it in 2002. Russia did it in 1998. Yes, there would be short-term turmoil, but those countries are doing pretty well economically.
From the Wikipedia article: “Russia bounced back from the August 1998 financial crash with surprising speed. Much of the reason for the recovery is that world oil prices rapidly rose during 1999–2000 (just as falling energy prices on the world market helped to deepen Russia’s financial troubles), so that Russia ran a large trade surplus in 1999 and 2000. Another reason is that domestic industries, such as food processing, had benefited from the devaluation, which caused a steep increase in the prices of imported goods.”
Steep increase in the price of imported goods. Hmmmm.
How ’bout default? Argentina did it in 2002. Russia did it in 1998. Yes, there would be short-term turmoil, but those countries are doing pretty well economically.
Last I heard, Argentina was kicking right along.
They did it at a time when there were large markets to export to. That ain’t going to be the case this time. Devaluation only helps when you can export or your citizens can afford more. If not your GDP will not benefit from devaluation.
What, if the prices of what we export go down by more than 50%, there’s no increase in our exports? We export more than just high-tech finished goods you know. Think fruits, veggies, grains, meat, maybe even natgas.
The balance of trade would be helped by both increased exports and vastly decreased imports. Sorta like a stealth tariff. It might even create some jobs here.
Dow down 350. Do I hear 400?
When you can’t sell what you want to sell, you sell what you can.
Margin calls coming on stocks, so now we see oil(-6%), copper(-2.5%), silver(-7%), and yes, even gold is now off 1% on the day.
I know. In 2008 the same mechanism played out. It took several weeks before it stabelized. Even good stocks like XOM and MO got hammered…what to do?
I find it very interesting that a mere 20% fall can trigger a margin call. Didn’t people learn? When I think about using margin, I think about short term borrowings only with other sources to repay, and I want to only be in a position for a call if the market falls by 80-90% (ie. world ending kind of stuff).
That didn’t take long. Broke -400.
Wonder what this will do for consumer confidence? For business confidence? I’m sure the classifieds will be stuffed with want ads now.
I own some bond funds. One of the main criteria in my research was how they held up in the 2nd half of 2008. I hope they’re not too heavily invested in PIIGS bonds.
Shoot, I’m pretty sure I made a prediction that the economy was going to drop like a rock in the second half of 2011. .. . . ..
-500 would be a truely impressive day…. Think we can hit that?
Yea that would be cool. Wonder what the bobble-heads on cable are saying today? Don’t have cable, but would love to watch several heads explode!
And there it goes… -500 and counting.
Can the PPT save S&P 1200?
“Kevin Cook, senior stock strategist for Zacks Investment Research in Chicago, said investors’ worst fears probably won’t come true.
“This is not 2008 again,” he said. “We don’t have a liquidity crisis, we don’t have a credit crisis - this is just profit taking.”
Hahahaha! Whistling in the dark.
http://seattletimes.nwsource.com/html/businesstechnology/2015814821_apuswallstreet.html
The TV news was saying it was caused by EU issues and the debt ceiling crisis. They may have been including all of the drop since July 21 and not just today.
The cesspool will have to trot out some turd to say some cleaver words to “calm” the markets…Soon!
Let’s look at the calendars:
Obama - can’t do it. 50th birth day celebration. party day and night. nothing new/orginal left to say
Congress - can’t do it. they left for vacation.
The Bernank - can’t do it. scared and hiding at the moment
The male Sarah Palin (aka Biden) - will not do it, people will just laugh
The real Sarah Palin - Obama’s drowning us!
The Repub presidential candidates - can’t do it. nothing new/orginal left to say
Obama - can’t do it. 50th birth day celebration. party day and night. nothing new/orginal left to say
And to think that, on my 50th birthday, I took some of my mom -n- dad gift money down to the Tucson Bicycle Swap Meet. And I didn’t find a single thing that I wanted. Thus, no money spent.
Then I went to the library. Didn’t spend any money there either.
The next day, I went to a friend’s dance party. She was showing off the addition that had recently been completed. ISTR that she paid for it with cash from the sale of her previous house. That’s the king of friend I have.
Since it was her party, I kept my mouth shut about my birthday. I didn’t want to upstage her, as she’s a longtime friend.
When the dancing time came, I did the salsa. Badly. But even bad dancing is fun, IMHO.
So what your saying is……..yes we can’t?
“The male Sarah Palin (aka Biden) - will not do it, people will just laugh”
I must admit, old Plugs has made me laugh on a number of occasions. Some of the BS he spews is so far from any reality it is funny. I would rather listen to his crap though than a ton of others in D.C. at least he is some what entertaining.
I can not and do not listen to Palin, her voice sets me on edge.
I must admit, old Plugs has made me laugh on a number of occasions.
My personal favorite happened shortly after he became VP.
He was back on Capitol Hill for some reason or the other, and one of his former Congressional colleagues called him “Mr. Vice President.” Biden was next to a live mike, which caught him saying “Give me f–king break!”
Well we’re well below the Eddie line, as I remember it (S&P 1300) and others remember it (Dow 12,000).
Folks could have earned some good money if they listened to him. And then ignored him and sold. For those who just ignored him, we saved the trading fees and are still in the same place.
I wonder how his customers are doing. “Run away, run away!”
It should be a fun week in Jackson Hole.
I imagine Eddie’s been profiting on the downside as well.
Could this be another flash-crash-esque scenario?
Between the flash crash and high frequency trading, I what the real cause of these movements are.
my FXP is up over 7%.
Recession Seen Looming as Jobless Benefits End
CNBC
The likely loss of unemployment benefits for 3.71 million Americans in a few months will only add to an economy edging ever closer to recession, according to analysis that puts the chances of another downturn at better than 1 in 3.
Bank of America Merrill Lynch economists say the ending of benefits for the so-called “99ers”—those who have exceeded their normal benefit allotment and are on an emergency compensation program through the end of the year—will slow the economy even further. The term comes from a previous extension to 99 weeks of eligibility for benefits.
When the long-term unemployed hit the same point several months ago, Congress stepped in with an extension. But that may not come now.
“We do not expect them to get extended,” BofAML economist Joshua Dennerlein wrote in a note to clients. “This will act as a hit to income, hurting consumption growth in the first half of the year.”
More importantly, this “hit” comes at a time when BofAML thinks the economy—already battered by rising unemployment and a Depression-level housing market—is very fragile. Another shock, the bank argues, could send it into recession
a lot of small businesses are about to go poof.
Wait. I am confused. Can we cut our way out of this, or not?
No we have to spend/debt our way out! It has not been given enough time or money to work yet.
Pocono Food Pantry Closes
By Raegan Medgie - August 3, 2011
A food pantry in the Poconos designed to help the working poor closed its doors Tuesday afternoon.
The pantry, which served hundreds of families having trouble making ends meet, had to shut down after facing its own financial woes.
The closing couldn’t have come at a worse time, a time when many people said they need help to get by.
A line of people wait outside the Follow Me Foundation’s food pantry in East Stroudsburg to fill their grocery bags one last time.
“Too many people need it. I mean, there are a lot of people living on the streets that don’t have nothing. If they lose this, what are they going to do?” asked Eva Garren of Bartonsville.
“I really need it, cause I’m 81 years old and only have my Social Security and really, it came in handy,” said Laura Lorraine Oney.
The pantry, which has been in operation for nine years and recently helping 12,000 people put food on their tables, is now closed.
The president of the program said they just didn’t have the money to stay open.
“Right now our funding has come down so much, not only from organizations in the area, but also our private donors,” said Michael Reynolds of the Follow Me Foundation.
Its building has also been rented out. It was donated to them while it was up for sale and now someone else is moving into it.
“It’s such a double-edge sword, the economy goes down there’s a lot more people in need. When the economy comes down,the funding is not there to support the need of the people,” Reynolds said.
“Right now our funding has come down so much, not only from organizations in the area, but also our private donors,”
“Private charity will pick up the slack from all dismantled government programs” MeatHead, Sr. Fellow, Cato Inst. 1982
Too many people need it. I mean, there are a lot of people living on the streets that don’t have nothing. If they lose this, what are they going to do?” asked Eva Garren of Bartonsville
oooh I know I know.
Rob rich people or anyone who has anything of value. The really rich people will be locked behind large walls and guarded with small armies.
Privitize the gains socialize the violence.
So where are all the “faith based” solutions to this?
What an outright corporatist lie.
M.D.C. Holdings cut jobs in Q2
Denver Business Journal - August 4, 2011
M.D.C. said the job cuts are expected to save the company about $9 million a year. M.D.C. incurred $1.2 million of related severance charges during the second quarter. The company’s general and administrative expenses fell to $36.2 million from $44.6 million a year ago, largely because of the layoffs.
M.D.C lost $28 million in the second quarter, compared to a $3.7 million loss a year earlier. Revenue fell to $215.7 million from $326.3 million during the same period. The company said its revenue from the prior year was buoyed by increased demand connected to the federal home-buyer tax credit. The credit expired in the second quarter of last year.
M.D.C. reported 709 home closings in the second quarter, with an average selling price of $290,800. A year earlier, the company closed on 1,135 units, with an average price of $274,300.
Net orders for the second quarter increased to 1,064 homes, from 1,015 homes a year ago, while the estimated value of those homes rose to $302 million from $281 million during the same period.
In addition to Colorado, M.D.C. builds in Arizona, California, Nevada, Washington, Utah, Delaware, Maryland, Virginia, Florida and Illinois.
“The company said its revenue from the prior year was buoyed by increased demand connected to the federal home-buyer tax credit.”
Wait.. I’m confused. The Reps say the stimulus didn’t create or save any jobs. But the home buyer tax credit was part of the stimulus. Now this company is saying that without the tax credit, he is have to fire people.
That’s just weird.
Ha: a late trading day reminder from your friends at Zero Hedge:
As A Reminder, Market-Wide Circuit Breakers Are Now Off And Only A 3,600 Drop In The DJIA Will Halt Trading
Thanks, I wondered about that.
Senators urge end to US development aid to China
Senators urge end to tens of millions in US development aid to China
August 4, 2011, 3:01 pm
WASHINGTON (AP) — A bipartisan group of senators is calling for an end to tens of millions of annual U.S. development aid to China, saying there are more needy countries than the world’s second-largest economy, which has trillions in foreign reserves.
The eight Democrats and four Republicans made their appeal Thursday to a Senate appropriations committee that must approve foreign aid funding for the fiscal year starting in October.
They urge an end to all development aid for China other than for Tibetans and for promoting human rights.
They say since 2001, the U.S. has provided more than $275 million in direct assistance to China, such as for expanding Internet access and improving public transportation.
They say since 2001, the U.S. has provided more than $275 million in direct assistance to China, such as for expanding Internet access and improving public transportation.
We could use that sort of assistance in this country. Let’s spend the money here and create some jobs for Americans.
Yeah. We could pay unemployment benefits for…. let’s see. Originally, projected to be $130B this year = $356 million a day. $14.84 million an hour
So, the $275 million we gave them over the last decade would pay unemployment for 18.5 hours.
Should we stop? Yes. Will that make any difference here in the USA? Not a bit.
That aid just didn’t happen. Dig a little and you’ll probably find a globo-corp’s lobbyists involved. Perhaps the aid was meant to help stimulate the demand for the products produced by one of our multinationals?
I wonder if Barry will pull a Bush and send us consumers out a check to get us consuming again? If so I want a whole lot more than $600.00 this go round.
$10K might work. Per person.
But “it’s your money” right? RIGHT?
Won’t that increase the debt???
He’ll never get it through congress.
My guess is that the Tea Baggers will be begging for gov spending by the time this is all over.
The economic toolbox is near empty, and we’ll be saving the last of our resources for Israel as the Islamic threat bristles at the opportunity of a weakened America.
If you were as thuggish as the Israeli govt, everyone would want to knife you too.
You can bet the term QE-3 will be buzzing hard in the MSM. “We must act” to save our economy! We can’t allow it to slip back into a recession.
One problem is, too many bad “actors”.
Main Street never left the recession. Only Wall Street had any kind of recovery.
Well there you go, it’s really that simple…
Carney On Dow Jones Plummeting: “Markets Go Up And Down”
(MarketWatch) — Markets “go up and down,” White House press secretary Jay Carney said Thursday, after the Dow Jones Industrial Average fell as much as 500 points. He said the Obama administration is monitoring the situation in Europe closely and that a lot of global issues are affecting the economy.
Carney once again employs the White House’s new political argument to blame poor job numbers and slow government growth on global natural disasters..
“There is no question that we have — this economy has faced headwinds this year, a variety of them including the earthquake and tsunami in Japan, the increase in oil prices, energy prices that resulted from the unrest in the Arab world and the situation in Europe, also. So, our focus has to be on the things that we control which is to take the necessary measures,” Carney said.
“There is no question that we have — this economy has faced headwinds this year, a variety of them including the earthquake and tsunami in Japan, the increase in oil prices, energy prices that resulted from the unrest in the Arab world and the situation in Europe, also. So, our focus has to be on the things that we control which is to take the necessary measures,” Carney said.
Sure, the broken arm and sunburn weren’t helpful and weren’t necessarily expected, but the cancer was still there if anyone was paying attention.
Everybody wants a “free” safety net…
Federal Compensation for Dead Livestock Set to Expire
August 04, 2011 | FoxNews.com
Federal funding meant to compensate ranchers for lost livestock could soon run dry, a looming financial hit that comes after the summer heat wave wiped out thousands of farm animals.
The relief programs — which pay ranchers for cattle and other livestock that die from extreme weather, disease and other conditions — were authorized under the 2008 farm bill. While the bulk of that bill lasts through the end of the next fiscal year, the relief programs are set to expire by October of this year.
“It certainly throws a huge wrench into the cash flow,” said Tom Shipley, policy director with the Iowa Cattlemen’s Association.
There may not be a way to avert at least a temporary funding cutoff. Lawmakers aren’t expected to start writing the next farm bill at least until the end of the year.
Agriculture Department spokesman Kent Politsch said it looks like the relief provisions will lapse, though he couldn’t estimate for how long.
The question is whether lawmakers will reinstate the programs or some version of them next year. A House Agriculture Committee aide said it was too early to tell and that “every program has to be reviewed.”
Without saying specifically how lawmakers should approach it, Politsch said: “The greatest emphasis has to be on preserving the safety net.”
We have a safety net for cows. But not for poor/unemployed people.
Guess this makes sense to someone.
Of course, if you do away with a whole bunch of the people eating cows, you won’t need a cow “safety net”.
But not for poor/unemployed people.
Food stamps? Unemployment? EITC? Section 8?
Nothing? Really?
Well if things keep going the way they are I imagine people will be treated like cows and thus may benefit. Soylent Green anyone.
I am not wholly opposed to farm subsidies, but I do think there are abuses. Christy Todd Whitman, ex-New Jersey governor, had her estate classified as a Christmas tree farm to avoid taxes. This was not uncommon and was used by middle class landowners as well.
I also think one of the reasons farm subsidies have been so persistent is the Iowa caucases.
http://market-ticker.org/akcs-www?post=191418
2008 Redux.
…………Why Inflationistas Are the Biggest Losers of the Debt Ceiling Episode
..By Daniel Gross
Since the deficit ceiling deal passed on Tuesday, there has been a lot of discussion about the winners and losers of the tumultuous past month. But nobody has mentioned one class of losers: the inflationistas. You know, the people who lay awake at night, their sleep disturbed equally by the gold bars under their pillows and the concern that prices are rising across the board. The people who keep warning that, any day now, the bond vigilantes will ride over the hills and demand that everybody pay higher interest rates. The folks who, like House Majority Leader Eric Cantor, are short Treasuries and counting on a spike in interest rates.
The inflationistas’ case always seemed more than a little weak. Sure, prices of energy and food have been high. And, yes, the consumer price index has been in elevated territory. In the 12 months that ended in June, the CPI was up 3.6 percent (1.8 percent excluding food and energy costs). But in order to have inflation, you need a wage-price spiral. And it’s hard to have a wage-price spiral when wages aren’t rising, let alone spiraling. What’s more, aside from the price of gold, it was difficult to detect the symptoms of inflation. For example, if prices were rising broadly in an out-of-control manner in the U.S., one would expect the price of money to rise as well. You’d expect that interest rates on government and corporate debt would spike. That never happened. In fact, in recent months, the interest rate on the 10-year bond has been falling.
You can make the case that oil and food were undervalued, and that everything else is overvalued, and that we are just rebalancing.
Too bad we don’t see the same thing with labor.
All kinds of people who are critical to the upkeep and functioning of a First World economy have been getting hosed for 30 years.
While some sub-100 IQ, 22 year old who can catch a football and run the 40 in 4.3 makes more in his rookie contract that his entire family will make in their lifetimes.
Or some 25 year old, Ivy League frat boy working for Gollum Sucks will make more in one year, than J6P will in 10.
I don’t even want to talk about the “X-Game” pukes…….
The thing is the rookie football player IS NOT THE PROBLEM. I’d say he earns what he can get, he is stealing, or manipulating markets.
We have a problem with the corporate elite. They have grown large enough and have consolidated enough to take over our gov. They direct the bailouts to themselves, they cut taxes, they roll back regulation that allows them to manipulate markets and steal from investors, the affect trade policy that allows them to sell our jobs to China.
This IS the problem. Anyone who reports most of their incomve on a W2 is NOT the problem.
All kinds of people who are critical to the upkeep and functioning of a First World economy have been getting hosed for 30 years.
I’m of the mind that treating employees well will be one of the sleeper investments of this century. Doing so will significantly reduce hiring and training expenses.
Not to mention PR expenses. Take Walmart, for example. Think of how much better it would be doing if it treated its employees better.
But in order to have inflation, you need a wage-price spiral.
Umm…is the author ignoring the fact there are other currencies at play? Almost every thing we buy takes as input something available on the global market - oil, rare earth minerals, etc. The declining value of the dollar certainly will lead to price inflation….
As a purely monetary event, inflation simply requires more dollars being created, which has and is happening.
That hissing sound you here is china’ s bubble, hope hte hole does not get bigger.
Cue the MSM financial media presstitutes if the crash is on: “No one could have seen this coming. No one.”
Another hbb prediction coming to be:
Negative interest rates on deposits:
Bank of New York Mellon Corp told some of its biggest depositors this week it does not want their money.
BNY Mellon said it is charging a fee to big corporate and asset management clients that deposit more money than average, because it has been overwhelmed by deposits.
Global economic turmoil — including the Greek debt crisis and the U.S. debt ceiling debate — has driven BNY Mellon’s large clients to sell riskier assets and move the proceeds to deposit accounts.
http://www.reuters.com/article/2011/08/04/us-usa-banks-bny-idUSTRE7735JW20110804
That says it all.
If BB prints more money the banks will have to hold more deposits that they can’t earn any money on. BB has dreamed of this, and maybe this is part of their plan. He can’t charge negative interest rates but his demon henchmen can.
Could help save FDIC too. They pay insurance on the deposited balance, not the loaned out balance. So, all this extra money being forced to pay to be somewhere safe, is replenishing the trust fund of FDIC to cover all the losses on banks that went under.
I really don’t understand why the bank would do this, though; it costs them very little to accept these massive deposits (I’m sure they all come in as electronic bits, so very near zero cost), and they can current earn a bit on these deposits by leaving their excess with the Fed. So the bank comes out way ahead.
Is the Fed pushing them to do this? If not, why would the bank do something that appears to cost them the interest they can earn on these excess deposits?
They have to pay 0.1% to FDIC for deposit insurance. So, they are charging a fee of 0.13% to cover the FDIC insurance and a little sugar for having to modify the electronic statements to hold account balances in the trillions……
Good answer, darrell!
One wonders where all of the hot money is going to go. Especially if it has to start paying lodging fees like humans do when they’re on the road.
It’s going to US treasuries and gold at the moment.
Fascinating.
It’s been a hard day at work and after a few beers life can look bleak. I would like to thank Ben and his blog for helping me to keep semi sane in this mad world of ours. I’ve been a reader of this blog and very occasional poster for more years than I care to remember, but the fact that there are people out there that share the view that something isn’t right (even if we differ on the cure) is a great comfort to me. Thanks again for the blog, it means more to me than you can ever know.
Mortgage insurer PMI Group says main subsidiary may have to stop selling policies, could close
http://www.washingtonpost.com/business/industries/mortgage-insurer-pmi-group-says-main-subsidiary-may-have-to-stop-selling-policies-could-close/2011/08/04/gIQAHHTuuI_story.html
I wonder if that will feed back to larger losses on the banks that are doing these foreclosures… or will there be another AIG type bailout where the feds put themselves on the hook for the loss to protect the too-big-to-fail from failure?
I’ve casually watched gold for a couple decades now and it seems every individual day that stocks crashed gold would crash too and people would scratch their heads and wonder why that happened.
I just read today was the biggest stock crash since Dec 1, 2008. I did a quick check and the gold ETF (GLD) dropped about 5% on that date along with stocks.
Today? GLD went down less than .05%. Gold went down like $11. Eleven bucks? On an individual day criteria, I don’t ever recall gold not getting hammered when stocks got hammered.
Until today.
I’ve been watching since the early ’70s. It isn’t a rule. Depends on who’s afraid of what. Right now, my take is that the “debt deal” has us (US) in the twilight zone. Reductions in the budget, even these fake reductions in the increases, will kill the fake recovery and force us to go much deeper in debt just to keep our noses above water. It’s interesting to watch, for sure. If the US government lets some of the big speculative banks go under in the next round of bailouts, stay clear of the exits methinks.
Critics say states should discontinue tax holidays
By Jayne O’Donnell and Oliver St. John, USA TODAY
The back-to-school sales tax holidays that start today in many states may be popular with politicians and retailers, but critics say revenue-starved states should abandon them.
Seventeen states plan to give shoppers a break on sales taxes for school-related purchases this season. Massachusetts and Arkansas added a holiday for the first time, while Illinois dropped its holiday this year.
Illinois State Sen. Toi Hutchinson, a Democrat who was chief sponsor of the state’s holiday last year, says Illinois “just cannot afford it this year.”
Massachusetts Gov. Deval Patrick, a Democrat, acknowledged last week that his state decided to have a sales tax holiday “not because it’s particularly fiscally prudent but because it’s popular,” the Boston Globe reported.
New York was the first state to enact a back-to-school sales tax holiday in 1997. Other states soon followed, sometimes to keep residents from crossing state lines to shop in states with tax holidays. National Retail Federation CEO Matthew Shay says the holidays “bring people into stores like few other promotions.” Studies have shown, however, that the holidays simply shift the timing of purchases consumers already planned.
Oh SNAP!
Food stamp use rises to record 45.8 million
NEW YORK (CNNMoney) — Nearly 15% of the U.S. population relied on food stamps in May, according to the United States Department of Agriculture.
The number of Americans using the government’s Supplemental Nutrition Assistance Program (SNAP) — more commonly referred to as food stamps — shot to an all-time high of 45.8 million in May, the USDA reported. That’s up 12% from a year ago, and 34% higher than two years ago.
The program provides monthly benefits to low-income individuals and families, which they can use at stores that accept SNAP benefits.
To qualify for food stamps, an individual’s income can’t exceed $1,174 a month or $14,088 a year — an amount that is 130% of the national poverty level.
The average food stamp benefit was $133.80 per person and $283.65 per household in May.
The highest concentration of food stamp users were in California, Florida, New York and Texas — where more than 3 million residents in each state received food stamps in May.
The rise in food stamp use comes as the U.S. job market continues to sputter, and food prices across the country climb.
Perhaps it is time to save some money by ending food stamps and just using the money to fund soup kitchens. Then we can admit that we are in a greater depression when we see the pictures of 15% of the nation’s population in the soup lines.
I for one wouldn’t mind starting up gov food stores which accept food stamps and cash-money only. And food stamps wouldn’t be accepted anywhere else. Healthy surplus stuff only.
That would likely solve the obesitly epidemic right there. You want carbs? Bake them yourself.
“Food stamp use rises to record 45.8 million”
Just wait until Tea Party job cuts hit. You ain’t seen nothin’ yet.
“We” are going to need a better than “expected” jobs report tomorrow. Be interesting to see if that occurs… Cause it won’t be true.
We don’t need a jobs number… It can just be the name of that guy that got a job.
“Be interesting to see if that occurs… Cause it won’t be true.”
+1 Got that right!
The action on the DOW today can likely be viewed as savvy investors just taking some profits off the cluttered table. Trying to enjoy the last of their summer vacations and preparing for a profitable next quarter. Nothing more nothing less, carry on. It’s all good.
Bull, it what’s for dinner tonight.
I’m sniffing some good deals ahead in the stock market. Pulled out a lot of cash back in the Fall, although still buying stock mutual funds monthly. Hoping for another 10% cut out of the Dow. US Airways stock near a multi year low. I am hoping for a $2 stock again. It’s around $5.60
My company reported robust earnings the other day and after market yesterday went up 11%. But all that was washed out today due to the general market. Individual stocks like that are gems to buy.
The weird thing is that I thought municipal bonds were a bad idea, yet my bond funds have been taking off. And my high yield corporate bond fund VWESX is doing quite well.
I never get completely out of a sector in case I miss the bounce back. I like stock market crashes just as much as I like negotiating for a new engineering contract.
I’m starting a watch on defense contracting stocks. Raytheon is now near a two year low. Around $41. I think it will be a good buy at under $40, but I would buy 100 shares at my first purchase. Then buy 200 shares at $37 and go all out at $34.
And what is that stock going to be worth when we slice 50% from the US Defense budget?
The elderly may love defense spending now, but if you start talking about 50% cuts to SS checks to keep it balanced as the number of retired people increases by 70% over the next decade, they will turn on defense fast!
http://www.cnbc.com/id/44023503
“The Sun Is Setting On Our Rigged Markets?”
“After Congress gets back from recess, there are a number of things which, theoretically, should be possible and palatable, including a continuation of the payroll tax holiday, and other jobs-type bills that would normally be agreeable. But the situation in Washington does not look as though it will be conducive to any of that until at least January 2013.
And if things get really bad—you know, if the banking system starts creaking again—you can forget about getting any more help there.
The Washington Put is no more. The market is realizing that, and has been since that Friday when talks first collapsed between Obama and Boehner.
It’s not just the Washington Put. The ECB Put is dead too. Bailouts aren’t working.
When people say this isn’t 2008 anymore, they are right. Back then we still thought the government could and would rescue the markets.”
When we were doing government bailout, Rick Santeli on CNBC went on a rant about how maybe it is time for another Tea Party where the people rise up against the government and say we’re sick and tired of your deficits, bailouts, interventions, printing money out of thin air….
http://www.youtube.com/watch?v=zp-Jw-5Kx8k&feature=player_embedded
A great wave of anger against politicians had been brewing. The Republicans, having lost congress in 2006 and the WH in 2008 decided to try to channel this anger at the “cradle to the grave welfare loving, Democrats” to direct it awy from Wall Street bailouts. They gave it the name “Taxed Enough Already” or TEA Party. They held rallies for these angry people. They fueld that anger and attempted to set it against the Democrats.
And it worked. They took back the house and made great gains in the Senate.
But… didn’t the Republican party realize that anger is not just at government spending on welfare. It is also anger at bailouts, deficits, market manipulations… All those things that the owners of the Republican party, Wall Street, have counted on.
Ohs, nos. What have we done?
We have actually given power to the people that want to crush the status quo? All of it, and not just the 1/7th of the federal budget that is welfare-ish? Ohs nos.
I think that the bailouts are a classic example of what happens when you confuse liquidity with solvency.
Face it, the big banks in this country are insolvent. Shoveling more liquidity at them won’t solve the problem.
What will? Putting them into receivership, selling off the good parts, and shutting down the bad parts of their businesses.
Two items:
1) Certainly there will be “buying opportunities” in the future. However, many of the serial optimists I hear make money regardless how the market goes. They make money on fees and transactions not on the direction of the market. Just a data point when considering their commentary.
2) Regarding stimulus - Quantitative easing does reduce confidence in currency. It seems to me that causing loss of confidence in the value of the currency would be the greatest blunder of all. Perhaps it’s time to accept the deleveraging, avoid Japan’s mistakes of runaway spending and zombie-bank-coddling, and stop undermining the currency.
But - politicians will do what works they think will get them re-elected. Short term pain for long term gain is not something I think any of them will tolerate. They’ll keep the pedal to the metal until the engine throws a rod.
“politicians will do what works they think will get them re-elected. Short term pain for long term gain is not something I think any of them will tolerate.”
It’s not something their constituents will tolerate either. Just like stockholders. Maybe we are screwed.
Every now and then, some rich person runs for office and says, “I’ll run government like a business”. But what you describe above, while true, is also the way corporations think. Short-term, bottom line. Can’t blame them cuz their stockholders want returns. And you can’t blame the politician man for not thinking ahead ten years. Our system doesn’t reward that. Sometimes, rarely, we’ll elect someone in who can articulate a long-term solution that requires short-term sacrifice, and can convince people that it’s necessary. Now doesn’t seem to be that rare time.
“Sometimes, rarely, we’ll elect someone in who can articulate a long-term solution that requires short-term sacrifice, and can convince people that it’s necessary. Now doesn’t seem to be that rare time.”
Not as long as the investment bankers receive huge bonuses for running their firms and the country’s economy into the ground.
Looks like “Thee Market$” have seen their “Future$”
heheeeheeeheehaahaaahaaheeehaahaaa… (Hwy50™)
Oil falls to lowest level in 6 months
Oil posts biggest 1-day drop in 3 months on anxiety about slowing global economy:
“You could see some sizable declines at the pump,” Rozell said.
Benchmark West Texas Intermediate crude for September delivery fell $5.30, or 5.8 percent, to settle at $86.63 per barrel on the New York Mercantile Exchange. That’s the steepest drop since oil took an 8.7 percent tumble on May 5. Oil dropped as low as $86.04 per barrel earlier in the day, its lowest level since February.
“We’ve come down so far, so fast, that it seems investors are just looking for an excuse to sell,” independent analyst Jim Ritterbusch said.
Energy prices fell across the board on Thursday. The Energy Department’s Energy Information Administration said in its weekly report that natural gas held in underground storage grew by 44 billion cubic feet. Analysts had expected an increase of between 34 billion and 38 billion cubic feet. Natural gas plunged after the report,
“Oil falls to lowest level in 6 months”
Oil is crashing hard w/no QE on the horizon. Maybe I will be able to afford to drive to work again soon…
Global DOW is currently dropping at by far the fastest rate since the Fall 2008 financial meltdown.
Good night and good luck to all!
Global Dow Realtime USD
Buy now or get priced into a higher-rate mortgage forever!
Note that any firming of the housing market is likely to be temporary, thanks to 3m+ in shadow inventory still to hit the market.
HOMES
AUGUST 5, 2011
Mortgage Rates Reach Record Lows
Real Estate Main
By DREW FITZGERALD
U.S. mortgage rates dropped to new lows after the latest round of gloomy economic data hurt Treasury yields, according to Freddie Mac’s weekly survey of mortgage rates.
Mortgage rates tend to follow Treasury yields, which have fallen after data showed the U.S. economy grew a much weaker-than-expected 1.3% in the second quarter while first-quarter growth was cut to less than a quarter of what was originally reported.
“In fact, the first half of this year was the worst six-month period since the economic recovery began in June 2009,” said Frank Nothaft, Freddie’s chief economist.
The news sent 15-year fixed and five-year adjustable-rate loans to historic lows, the mortgage-finance agency said.
On the other hand, Mr. Nothaft said “there were indications that the housing market is firming.”
The 30-year fixed-rate mortgage averaged 4.39%, for the week ended Thursday, down from 4.55% the previous week and last year’s rate of 4.49%, setting a new low for the year. Rates on 15-year fixed-rate mortgages averaged 3.54%, down from 3.66% last week and 3.95% a year earlier.
…
Reuters Banner at 6:10 EDT
Breaking News: U.S. government expecting, preparing for ratings downgrade from S&P: ABC News citing gov’t official