Bits Bucket for August 6, 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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Wall Street to brokers: Investors should buy, not flee
By Joseph A. Giannone
NEW YORK (Reuters) - Wall Street’s advice to investors battered by plunging markets: Keep buying stocks.
With markets plunging for more than a week, and no relief in sight, some of the biggest brokerages on Thursday afternoon and early on Friday told their advisers that clients should not flee but instead buy into the panic.
That isn’t a self-serving statement at all, is it?
I just love watching CNBC after free falls. “Investment advisers ” fumbling through the “buying opportunity ” screed with that deer in the headlights look….
http://www.youtube.com/watch?v=TRoMZ6AUpIc
CNBC guests who make the mistake of calling out CNBC commentators like Jim Cramer as Goldman Sachs shills are quickly kicked off the air, but it makes for the only truthful and entertaining episodes ever aired by these Wall Street fluffers.
Anybody who listens to investment advice from that jackoff Cramer, or CNBC, deserves what they get. They’re all paid shills for Wall St.
“You’ve gotta be more polite than that.”
OK: Cramer sux rox!
LOL
Best comment ever. Didn’t think you’d pull that one out, PB but maybe you’ve been hanging out with your children?
Captain Smith to passengers: Buy your deck chairs now they are going fast!
“Buy when everyone else is selling; sell when everyone else is buying.”
I confess to having learned the pitfalls of that dated investing wisdom during the onset of the Japanese stock market collapse in the early-1990s. I bought shares of a mutual fund pegged to the Nikkei index, assuming the market would eventually rebound. I don’t remember exactly when I finally sold, but it was over ten years ago, and I was underwater on my investment at the time. Still worse, if I had hung on until today, I would still be underwater.
When the Titanic hit the iceberg everyone was putting on lifejackets. Should I have been sleeping?
You should have been heading for a lifeboat.
Didn’t matter. The rich were already in the lifeboats and lowering them into the water even though they were only half-full, to make sure they got away before everyone else figured out what was happening. With freezing water temperature, a lifejacket was only going to add about 3-5 minutes to your life expectancy.
“The rich were already in the lifeboats and lowering them into the water even though they were only half-full, to make sure they got away before everyone else figured out what was happening.”
The Fall 2008 TARP and other bailouts were quite reminiscent of this aspect of the sinking Titanic.
I think the key is to buy AFTER everyone else is done selling and before everyone else is buying.
There are times when it is prudent to follow the crowd and run out of a burning building too…
Buy when everyone else thinks you would be crazy to buy; sell when everyone else thinks you would be crazy to not buy. (Goldbugs take note…)
“Investors should buy, not flee”
Try not to catch yerselves falling knives, investors. And before getting too carried away, first read a copy of this book:
Where are the Customer’s Yachts?
Thanks Pbear…I read some reviews and then ordered the book…Here is a excerpt from one of the reviews…Its so true;
“One of the classic stories in this book is about what would happen if 4000 people started flipping coins against each other. You are eliminated from the competition after one loss. Although by definition, half would win and half with lose with each flip, those who had won ten times in a row (as must happen for some in this format) would soon start to give lessons in coin flipping techniques. That story nicely captures the folly of Wall Street. Even though some may win, it usually doesn’t mean anything”…
OK, so the stock market, like housing, is never going to go up again. I got it now.
That is not what I got out of that quote.
The coin flipping story is a great analogy. My own involves those lotteries where the lottery ticket buyers choose five or six numbers. Does anybody think that it would make sense to ask someone who won millions on one those loterries for advice on picking the numbers?
I’ve been forced to spend a lot of time at work on a project with a guy who a jerk who loves to talk about himself. Apparently, his wife died in a car accident twenty years ago. Because she was some sort of high-level HR manager in a large corporation, this jerk and his son each got a million dollars. The guy loves to talk about how his smart son turned the million into three million, while he still has only one million. The possibility that his son was just lucky doesn’t occur to him.
The guy loves to talk about how his smart son turned the million into three million, while he still has only one million.
You should tell him that his son was lucky to inherit good genes. (unlike him of course)
He got a million after taxes in 1990? Why is he still working?
According to Huffington Post -
American Millionaires: 1,400 Paid No U.S. Income Taxes In 2009
New tax data from the Internal Revenue service shows that in 2009, incomes fell, unemployment claims rose, and the U.S. economy shed nearly two million taxpayers.
And of the 235,413 taxpayers who earned $1 million or more in 2009, 1,470 of them paid no taxes
This means the Dow was only able to hover around 12,000 for one year.
Oh dear.
Anyone dumb enough to seek the advice of self-serving “financial advisors” deserves to get their head handed to them in this rigged casino market.
+1000
Much as I am a doom and gloomier, I stick to my investment plan and remove emotion from my investing. Have been buying $800 per week of equities all year and this is not changing. Still buying t-bills and series I savings bond for a safety cushion. My five year outlook on gold is negative. But will rebalance at the end of this year and sell a few ounces. I am bullish on the human ingenuity. Fascinating new inventions and life enhancing drugs are on the way, not necessarily from the U.S. But will create new industries and careers as proportional as the information revolution. Stocks for the long haul.
We have been down-graded….what took them so long??
http://finance.yahoo.com/news/SampP-downgrades-US-credit-apf-2107320979.html
USA goes from AAA to AA-
Not in their best interest until now would be my guess…
Who in the World would trust Standard and Poor’s?
Did S&P and Moody’s have a sudden epiphany about their ratings of risky investments?
The report goes on:
“The evidence shows that analysts within Moody’s and S&P were aware of the increasing risks in the mortgage market in the years leading up to the financial crisis, including higher risk mortgage products, increasingly lax lending standards, poor quality loans, unsustainable housing prices, and increasing mortgage fraud. Yet for years, neither credit rating agency heeded warnings – even their own – about the need to adjust their processes to accurately reflect the increasing credit risk.” US Senate Permanent Subcommittee on Investigations, April 13 (p. 268)
The Senate investigation found that S&P succumbed to pressure for AAA ratings from Wall Street and big banks for their very risky mortgage backed securities (MBS) and other financial instruments that fueled the real estate bubble. That pressure resulted in high credit ratings while, according to the report, S&P knew from 2003 on that there were “increasing risks” in the MBS market. It seems S&P succumbed to pressure from their customers on Wall Street and the big banks
http://www.economicpopulist.org/content/who-world-would-trust-standard-and-poors
I do not trust S&P.
I also do not think the U.S. Deserves a AAA rating.
You can do both.
“It seems S&P succumbed to pressure from their customers on Wall Street and the big banks”
So who is pressuring them now?
STFU
SHANGHAI (Reuters) - China roundly condemned the United States for its “debt addiction” and “short sighted” political wrangling and said the world needed a new stable global reserve currency.
In a harshly-worded commentary by the official Xinhua news agency on Saturday, China gave its first official comments on the United States losing its gilded AAA long-term credit rating from Standard & Poor’s.
“China, the largest creditor of the world’s sole superpower, has every right now to demand the United States address its structural debt problems and ensure the safety of China’s dollar assets,” Xinhua said.
http://news.yahoo.com/china-economists-sees-big-risk-markets-u-downgrade-041542087.html
Our debt addiction is bacause of our trade deficit, largly with China. So, is China suggesting we launch a trade war against them?
Perhaps they feel they have won the trade war with us and can now put the final nail in the coffin.
and yet there are banks we know are in trouble still at AAA so why did S&P decide to do this downgrade?
There may be more downgrades on Monday from them, hinted at in their press release.
S & P has no U.S. Banks with AAA rating.
Only ADP, Exxon, Microsoft, Pfizer, and Johnson and Johnson have the AAA rating.
Even Google, who just borrowed $3B against their $35+B of cash, isn’t rated AAA…
Guess I”d better file that one under check what you read before passing it on. Thanks for the clarification, Michael.
S&P still has a AAA rating on Bank of America. These rating agencies are accomplices of the banksters in coming up with their shakedown rackets. Hard to say what S&P is playing at here.
Link?
It took lots of Tea Party shouting to capture the full attention of the rating agencies.
Sedition may include any commotion, though not aimed at direct and open violence against the laws. Seditious words in
writingOpinion$ are seditiouslibel$pit. A $editionist is one who engage$ in or promote$ the interest$ of sedition.Typically, sedition is considered a subversive act
The Standard Moody & Fitchety “True$erialEnabler$™” spewing Opinion$-4-Fee$…they’ve come along way from the dotcombomb$ & $ingle Depo$it Tran$action RE cult$ of yesteryear. Looks like they’re still using their tongues to wipe their sticky “opinion$” dripping from below their lip$.
1. “These f@!king Guys!,” Jon Stewart.
2. Eyes don’t give a sheeeeeeeeeyat!
“…found “serious and amateur errors of the S&P analysis,” CNN said, citing the official, who added that the agency’s figures were off “by trillions of dollars.”
“Now the officials say $&P acknowledged some error$ and agree$ to rethink the analysi$,”
$ as in $editionist$!
ChaChing$!…ChaChing$!…ChaChing$!
“Money for the nothin’ and their word$ for Fee$!”
That ain’t workin’, that’s the way you do it
Money for nothin’ and their word$ for Fee$
Now that ain’t workin’, that’s the way you do it
Lemme tell ya, guys $he ain’t dumb
Maybe get a blister on their little lip
Maybe get a blister on their little tongue
S&P acknowledged the errors, then revised the reason for the downgrade to being based on gridlock politics that won’t let us actually do anythign about the debt, like traiding tax increases for spending cuts like the president and the Gang of 6 were recommending, but the rank-and-file on BOTH sides of the aisle were refusing to go along with.
My largest criticism of the Obama Administration is that they didn’t push as hard as possible on getting Simpson Bowles passed starting last year. The effect would have been:
1. No need for QE3
2. Most impact from the “austerity” is in the future, little impact on recovery
3. Strengthening dollar, helping the middle class (lower prices for oil, food, etc.)
4. Lower corporate profits (big deal)
5. Higher job creation
They had another chance with the Gang of 6, and despite “trying” (or as Bart Simpson would say “trying to try”), they couldn’t get an even pared down version through.
Failure to lead? Hell, I don’t know about the words, but failure to pass needed and reasonable legislation should be grounds for all of these knuckleheads to be fired. The rhetoric doesn’t matter if you can’t actually get the change through.
I told a friend of mine that the only thing keeping Obama from getting re-elected was putting the country on a path to solving the debt/deficit issue. As of today, he won’t be re-elected. IF, he can get gang of 6/Simpson-Bowles-like measures passed, he just might.
If I’m not mistaken, didn’t the agencies also infer that the only path that would not result in a downgrade was cut cap and balance?
The downgrade was inevitable, IOW. The real question now is whether funds and funds of funds will actually follow their investing guidelines come Monday morning in Asia. If Thurston Howell III has 200 million in a fund earning 0.5% annual he rests easy on Gilligan’s Island because the fund rules require X% of holdings be AAA quality debt. He is more interested in the return of his investment than the return on his investment.
Where does his fund go now to buy that X% AAA?
The few remaining AAA countries…or they stick with the US for now.
“IF, he can get gang of 6/Simpson-Bowles-like measures passed, he just might.”
Based on the current Congress, he will only be able to get things passed that are completely non-controversial, like naming post offices. We are already into the next election cycle. (Are we ever really out of an election cycle?)
That really is part of the problem. We are now in a constant election cycle and suffer through the associated grandstanding by politicians.
well that does put the first amendment in a new light…free speech only for things that don’t matter.
Downgraded by the same folks who AAA’d the CDOs.
If I didn’t know any better, I’d say we’re seeing an attempt at a financial coup on the government by Wall St.
But that’s just crazy talk.
Slap on the wrist for the USA, leading up to slitting the throat of the Europeans.
Powerful people behind this trade. I have no doubt. None.
I’d say we’re seeing an attempt at a financial coup on the government by Wall St.
That IS crazy talk. This Administration, like the Bush Administration before it, has been Wall Street’s errand boys. Why would Wall Street want to upset the very cozy and lucrative status quo?
The correct rating would be XXX: Adults Only.
If you explained to America’s youngsters just how badly Grandma and Grandpa and their generation screwed them over, family get-totethers might be more contentious.
it’s not generational, it’s big capital vs the rest of us…
“USA goes from AAA to AA-”
Well, great. Now my batteries won’t fit.
LOL
So, it is a conspiracy by duracel to force us to buy new batteries?
Foreclosure prevention workshop coming to West Palm Beach
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 12:33 p.m. Friday, Aug. 5, 2011
The Neighborhood Community Foundation will sponsor a foreclosure prevention workshop Wednesday from 7 p.m. to 9 p.m. at the Crown Plaza, 1601 Belvedere Road, West Palm Beach.
The event will feature foreclosure defense attorney David Candler Hicks, who will address issues such as loan modifications, federal foreclosure prevention programs and loan audits.
For more information and to register, go to http://www.Neighborhood-Community.org or call (877) 306-5299.
6 COMMENTS
The best prevention tip…don’t buy what you can’t afford. That will be $1,000 thanks
TIP
12:41 PM, 8/5/2011
“The best prevention tip…don’t buy what you can’t afford. That will be $1,000 thanks”
LOL!
Not that east. One day you have a job, the next you dont.
If you paid cash when you made your purchase then losing the job later shouldn’t be an issue; with financing, too bad, it’s a risk we all take when we sign on the line.
Don’t Buy Stuff You Can’t Afford
The sure-fire way to get out of debt
A sure fire way for economic collapse and perminant greater depression if every American did that. What are you supposed to do with your savings when no one is borrowing. Oh, right. The banks begin to charge you fees just to hold your money.
“The banks begin to charge you fees just to hold your money.”
That’s would be a good point in time to buy gold!
One bank is already doing so to it’s large depositors…there was an article on drudge a day or so ago.
Thanks, PB. One of my all-time faves. Somehow I think Slim enjoys it as well!
I’m up early for no good reason other then to be first..happy house hunting
I’m berry hunting today…
House hunting today?
I’m curious if people will buy now at the cusp of a major change.
How about a decent downward plunge in pricing first?
Many areas of this country have already had out decent downward price plunge.
Condos at the end of my street that were $150K at peak are now under $25K. House across the street from me that was $120K in 2000, sold for $260K at the peak, and was recently pulled off the market by the bank that owns it, because it would not sell for $77K.
If this is not the bottom, then I have to assume that $0 is the bottom.
How is the local economy in Phoenix, Darrell?
One of the memes touted around here over the past several years was that real estate will bottom when *everyone* knows that real estate is a horrible investment class.
I’m wondering if we are approaching that stage in some markets, notably Phoenix.
The economy is holding on by a thread… and that thread is massive federal government deficits. Losing Luke Air Force base would be a seriously blow. Major cuts in SS and/or MC/C would crush us.
Arizona used to brag about the 5 Cs of our economy. Cotton, Citrus, Copper, Cattle and Climate (tourism… rich people coming here to golf in the middle of winter).
The cotton was plowed under to make way for houses. The citrus trees were cut down to make way for houses.
The cattle feed lots were closed because the smell made it hard to sell houses. Copper is VERY cyclical, and the mines are a couple hundred miles outside Phoenix. We had the headquarters of Phelps Dodge and all the global HQ jobs, but they were bought by Freeport-McMoRan who centralized operations by laying off a lot of the PHX staff. I wonder how the high spending people that must play golf in January are going to hold up in a depression?
That said, with high cotton prices, a lot of the land that has sat empty for decades is now being replanted. It takes a lot longer to get a citrus orchard back up and running, and I’ve seen no efforts to even try.
In short, if we see major federal government spending cuts like DOD closing our AFB or major cuts to SS and MC/C….. well, you won’t be able to sell a house in PHX for the scrap value of the copper in the wire and the pipes.
Careful. House prices, like stock prices, are never going to go back up. Just ask PB.
Where Phoenix get all of the water to grow cotton?
“Where Phoenix get all of the water to grow cotton?”
Most people do not realize it, but almost all of northern and eastern AZ are mountians. The San Franscisco peaks, the White Mountains, and many others. These mountains get pretty good snow packs and even have ski resorts. Those mountains drain into the Gila and Salt Rivers.
The Salt River runs right through Phoenix. In the east side of town we channel the entire river into irrigation canals. On the west side of town, a trickle flows out and down strean.
Here is a google map of the Salt River disappearing into irrigation canals on the East side of Phoenix.
http://maps.google.com/maps?q=phoenix+arizona&hl=en&ll=33.515279,-111.686025&spn=0.019751,0.050597&sll=37.0625,-95.677068&sspn=38.365962,103.623047&t=h&z=15
The Gila River runs just to the west of Phoenix, but most of it finds its way here too.
Here is a map of the Gila meeting the same fate as the Salt.
http://maps.google.com/maps?q=phoenix+arizona&hl=en&ll=33.844257,-112.274609&spn=0.03935,0.101194&sll=37.0625,-95.677068&sspn=38.365962,103.623047&t=h&z=14
And unlike CO where the water is owned by the people down streat the water than falls as snow in AZ, is owned by AZ since the only place downstream of us is Mexico and water rights don’t cross international boarders.
AND….. let’s not forget our share of the Colorado River that Colorado is not allowed to touch because the rights are owned by us that live down stream.
What does it cost to cool your house 6 months of the year? I was looking at Palm Springs as it is dirt cheap too.
AND, everytime farmland was torn up to put in housing over the past few decades, the water usage per acre went down.
Some developers that I know note this as a major difference between Phoenix and Las Vegas. Vegas has water problems…Phoenix, not so much.
“What does it cost to cool your house 6 months of the year? ”
No more than people pay to heat their houses 6 months of the year… I would think. We use Evap cooler in spring and fall and AC for Jun-Aug. Back to elect heat pump for winter.
Let me pull up my APS bill….
I don’t have gas so electricty is used to heat, AC, cooking, etc. We do have solar water heater. We also have a pool that sucks up quite a bit of electricty running the pump 8 hours a day in summer.
Let’s see… for summer 2010 we did $350ish June and July, then peaked at $400 for Aug. Down to $250 Sept and $125 for Oct. $110 for Nov. $160, $170, $190 for Dec, Jan, Feb in winter. This is about the time we got the water heater replaced with a new, more efficient model (thanks stimulus and hail storm). We dropped to right at $100 a month all spring.
This year we had a dry June so stayed evap longer. We also replaced our heat pump (A/C and Heat) with a new, more efficient model (thanks stimulus and hail storm) and tried to skimp on the pool pump by running it 5 hours instead of 8. Also helped by 28 day cycle becuase of weekend instead of last year’s 30 days. Our June bill was only drum roll…..$150. Much better than last year’s $350.
However, that pattern wasn’t as dramatic for July. I had to do a lot of shocking and filtering of the pool after letting it algy bloom due to insufficient care in June. $300 for July. Still, better than last year’s $350 thanks to new heat pump.
Anyway, to answer your question, I can’t isolate out the AC very easily, but for the last 12 months my total energy usage for my house (since I only have electricity) has been right about:
$2,700
I guess a good 1/2 of that being heat/AC and the other 1/2 being water heating, pool pump, cooking, lights, tvs and computers, etc. since that is kind of our “back ground” in the spring and fall + extra pool in summer.
Darrell, do they have higher electrical rates for higher usage in Phx? Here in CA, they soak you if you use more power…$0.40 per Kilowatt hour at the highest marginal rate.
Sure makes those LED bulbs look cheap, even at their current prices.
“Darrell, do they have higher electrical rates for higher usage in Phx?”
We have all kinds of rate plans.
The basic is $.09 kwn in the winter, then a flaoting scale like you describe for summer that goes from $.09-$.17 in summer.
There is a time of day plan that rewards you for not using electiricty during peak usage (M-F, noon to 7PM). Off peak you pay $.06 but peak you pay $.19 in winter and $.24 in summer.
Other plans are kind of between these.
The way the bill is brokin up, it is hard to tell which portions of the bill they are quoting at that rate.
Looking at my June bill, the pre-tax is $260. I used 1734 kWh for the month with is right at $.15 per.
http://www.aps.com/main/services/residential/rates/rates_29.html#standard
Oh, and to add to my talk of my personal electricty usage….
I have a 1700 sqft block house with good insulation. I have a total 4 windows (1 very large and the other 3 standard) that were replaced with high-E vynal clad 2 years ago (thanks stimulus) and 2 glass panel wood clad doors in place of windows in 2 of the rooms.
Plus the solar water heater, evap cooler and the new high efficiency heat pump.
Our bill has this floating scale thing showing how we do compared to other houses. We are always pegged out at the low end. For example, our June bill shows our $292 at the low end of the scale, with the average house at $419. I hear co-workers talk about $500 and $600 electiricity bills in their 2400 sqft stick and stucko McMansions with a dozen windows and chuckle to myself.
“The Salt River runs right through Phoenix. In the east side of town we channel the entire river into irrigation canals”
People wonder how we grow rice in the summer in the Ca. central valley, as our summers are bone dry. But, good snow runoff allows for it. ALOT of water, though. If the snow levels do rise, it might pose a problem, but if that was combined with wetter storms, there would be more at the top, so we might be OK. All I know is we actually ship rice to China!
My SRP bill in Phoenix for July was $115. I keep my AC on at a comfortable temperature even when I am in Florida.
I have 1,000 squre feet and am on the second floor in Phoenix.
There are people who prefer to buy a $800,000 1,000 square foot moldy beach house in Hermosa beach so that they don’t have to pay for AC.
My rent is $925. Just renewed my lease.
Darrell, your usage would have cost you ~$500 in the SF Bay Area.
I’m waiting for them to have time of day charges…we don’t have A/C, so our bill would go WAY down.
Every credit rating agency should done this a long time ago.
ITEM: Standard & Poor downgrades U.S. credit rating.
Says government’s ability to manage finances is less stable, less predictable.
Standard & Poor, one of the three main credit-rating agencies, announced Friday night that it has downgraded the U.S. credit rating for the first time, dealing a symbolic blow to the world’s economic superpower in what was a sharply worded critique of the American political system. The timing of the announcement was meant to avoid rattling financial markets on Friday, but European news agencies made it their lead story last night. A BBC commentary puts it like this:
“The loss of America’s AAA credit rating shouts loudly that there is risk in lending to America - which at a time of great stress in financial markets could be very destabilizing.”
And look at China’s take! They’ve loaned the U.S. boatloads of cash and believe they’re now entitled to having a say on what happens next,
Xinhua (official Chinese news agency) said: “China, the largest creditor of the world’s sole superpower, has every right now to demand the United States address its structural debt problems and ensure the safety of China’s dollar assets…
“International supervision over the issue of US dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country.”
This is China telling the United States that it had damned well better get its financial house in order. (Did Richard Nixon expect this would be the outcome of opening up relations with China?)
They threaten us to get our house in order? And that means what exactly? To launch a trade war against them?
I’m getting the feeling most people believe there’s 0% threat they’d start dumping their holdings.
Any threat they could come after our natural resources as they’ve in Australia?
http://www.youtube.com/watch?v=f_KhErNyiq8
Some day the Chinese are going to come after Australia’s natural resources for real.
LOL. An Australian Red Dawn.
‘Wolverines!’ Or maybe: ‘Wombats!’
The Chinese military couldn’t take over Viet Nam, much less any country that requires them to go far overseas. I doubt they could take over Taiwan, without just bombing them into the stone age, which would make it a dubious prize (and well-armed Taiwan wouldn’t go down without exacting a heavy price on China’s military.)They simply don’t have the logistical ability or the armaments, nor are they close to getting them.
They currently have a three-ship task force off Africa helping police the area for pirates. That’s their navy’s biggest overseas accomplishment in modern times. Hardly preparation for taking over Australia.
Now of course they can buy our natural resources. God knows, we’re open to the highest bidder, as long as Wall
Street gets their cut.
The Chinese military that launched a botched invasion of Vietnam in 1979, and today’s PRC military, are two very different threats.
I don’t know what you guys are talking about. I was talking about them purchasing our resources.
“This is China telling the United States that it had damned well better get its financial house in order.”
Let’s take a look at what is happening here:
If we suddenly decide to “get our financial house in order” then it can be shown that we are allowing China to tell us what to do. This will not go over well with the lemmings thus it is an issue that the PTB can seize on to insure that the U.S. continues to spend more than it takes in; To suggest doing otherwise would brand a person to be one of China’s dupes.
or a Commie!
Standard & Poor, one of the three main
credit-rating agencies, “True$editionist$$erialEnabler$™”“A Cheney-$hrub debt-crisi$ enhancement is only a problem until the
bailoutthe (non-Hawaiian) blackman is not driving Miss Daisy.”1. “These f@!king Guys!,” Jon Stewart.
2. Eyes don’t give a sheeeeeeeeeyat!
If you owe the bank $100 that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.- J. Paul Getty
Hmmm, who really has the leverage here, China or us?
The debt is denominated in $s. The problem with comparing USA owing China to me owing a bank, is that neither I nor the bank have the ability to inflate away that debt. I do not own a printing press from which I can print that money.
Good thing we got off the gold standard so that China can’t demand we hand over all the gold in Fort Knox.
At some point the US is going to tell China that the use and theft of a hundred years of American inventions and markets is worth far more than what we owe them.
If China demanded anything strategic like natural gas operations, or symbolic like a national park, then I suspect the US answer would “Come and get it, if you can.”
Before patent law was established, the best inventions came from china and we still use them - like paper, ink, printing pres (before Gutenberg made one)…
Then you have Monsanto taking the local breeds and patenting them with some modifications.
“There is an extremely elevated degree of anxiety that has dominated recently, both the corporate and the consumer sectors. This tends to aggravate what started initially as a moderate slowdown in economic activity in the spring.” ~ Anthony Karydakis, chief economist at Commerzbank inNew York.
← So, if consumers and corporations are holding back on spending what’s going to get the economy out of the doldrums?
There’s no easy out. To create a sound economy it’s necessary to settle up the mistakes that brought us to this near bankrupt state. The Great Unwinding!
Trusting bankers and politicians to make “repairs” is a waste of time. About all the individual can do is return to the old method of living within one’s means.
We are a net trade deficit nation. That can only continue if we continue to live above our means to provide the new net debt required to fund those trade deficits.
How do you propose we plug those trade deficits? Greater depression where people simply can’t afford to buy anything?
It makes no difference what I would propose, nature will eventually take it’s course. And yes we will have a greater depression at some point, the question is how long can “we” hold it off?
we will have a greater depression at some point
For someone who claims that they’ve never spent more than $15.00 for xmas presents eyes says,… you’ve nothing to fear!.
Looks like Santa’s bringing socks and underwear again this year.
I am of the philosphy that stating a problem, without a resolution, is counter productive. Yes, sometimes there are no good resolutions. Still, we have to understand the possible bad resolutions to help us choose our best course of action.
Simply slicing 45% off government spending will result in a massive depression, mass default, and wide-spread pain and suffering.
Printing our way out of debt while attacking the trade deficits with tariffs causes inflation and punishes those with their savings in cash and equivilants (other peoples’ debt) and rewards the debters, but in general would be less of a shock to the system.
Some combination of the two, like increasing taxes significantly, while focusing spending on things that promote job creation, along with a trade war, and massive debt defaults… perhaps this is a middle ground that causes the least total pain.
From Rio’s descriptions of Brazil I think they set a fine example of what needs to be done.
How do you propose we plug those trade deficits?
We start making our own stuff again? Something tells me that China wouldn’t be too happy about that. They want to have their cake and eat it too. They want us to offshore all our jobs to them and run massive trade deficits, while “keeping our house in order”
Do they want a pony too?
Exactly
The Great Unwinding!
One of the biggest lies ever told to the American people is that there was any other way.
So much time and money wasted and many Americans led into even greater positions of peril in the interim due to their false hope.
Spot On!
Americans are suckers for pain-free miracle cures.
Have been for generations.
We is be smart!
Have been forever and ever.
You might want to re-read The Great Gatsby.
+1. While the American sheeple were lied to, they willingly voted for the liars and went along with the fictions being fed to them. They also scorned or ignored the few who told them the truth, like Ron Paul. Let’s not forget that part of the story. The sheeple are going to get exactly what they have coming.
You assume that all of us have a Ron Paul to vote for in our congressional district and Senate races.
All of us had a Ron Paul to vote for in the 2008 Presidential election. Five percent of us actively supported him (the only kind of support that counts). 95% of the electorate (well, the 30% who actually turned out to vote) cast their votes for the Republicrat status quo. Those people have lost all right to complain about the mess this country is in or the degree of Wall Street control over our political process.
Happy2bHeard,
http://www.campaignforliberty.org/
Campaign for Liberty, Ron Paul’s organization, has endorsed and backed numerous candidates running at the state level. The time for passive acceptance of the status quo, mindlessly participating in the corporatists’ Establishment Republicrat puppet show, or worse yet impotent pissing and moaning, is over. Get active, get involved, take your country back. Be advised: the pro-liberty movement doesn’t give a damn who consenting adults sleep with, doesn’t want to tamper with the Constitution to impose anti-abortion or “pro-family” agendas, and isn’t moronic enough to believe that posting the Ten Commandments in public schools is going to address deep-seated societal problems.
While the American sheeple were lied to, they willingly voted for the liars and went along with the fictions being fed to them.
I’ve struggled w/this one for a while. Here’s what I’ve come up with.
When the sex offender lures the 7 year old down the back ally w/candy and then kils and rapes him, we don’t blame the 7 year old. The insiders knew exactly what they were doing.
Yes I am comparing JohnQ public to the 7 year old. The point was the industry knew things John Q didn’t and early on almost couldn’t.
And, so it begins again. Our refusal to deal honestly with our situation, or to attack the underlying root cause of our troubles has put us back on the edge of plunging into greater depression.
Our trade deficit dependant economy has made us dependant on ever more debt. We maintained our standard of living by businesses and households increasing debt at 3x the sustainable rate for 3 decades. To have the same debt burden per person that we had in 1980, we should have $8T in personal and household debt. We actually have $24T.
When it became clear that household and business debt could not continue to gorw that debt at that rate, and in fact, it was going to collapse and not be repaid, government pledged the full faith and credit of the USA, that is the wealth and labor output of 300 million people, that the debt would not collapse and could be paid.
The government then stepped up as the borrower of last resort, providing the $1.5T+ a year new debt that our trade deficit based economy requires. We pulled Wall Street out of crash into mild recovery, and brought Main Street out of depression upto mearley a “really bad recession”.
Now people begin to challenge the full faith and credit of the USA. We can’t trim the deficits, let alone trim them enough to be sustainable. And that is still just on the edge of Baby Boomer retirement. As the number of 65+ increases by 70% over the next decade, the problem explodes.
They question if another TARP would even be possible today with Tea Party strength in the House of Reps. They see Dodd-Frank and its granting the Fed power to take over and liqudate major Wall Street brokerages, to make depositors whole but wipe out stock and bond holders, as a possible end of the world as they have known it.
We’re in a tad bit of a quandry here.
Our trade deficit dependant economy has made us dependant on ever more debt.
True, but any time someone of importance mentions it the peanut gallery starts to scream about how evil protectionism is.
Of course part of the problem is that Americans sometimes refuse to buy American. I wish I had a dollar for everytime I’ve heard the owner of an imported car bemoan the offshoring of jobs. How many non Korean cars do you see on the streets of Seoul?
It is too bad tha American cars pretty much SUCK compared to imports.
My 1998 mercury has needed $4K in repairs in the last year (new intake manafold to pass emissions being $3K of that). My 2007 Ford has needed $2000 in repairs (new AC compressor and throttle body). And these are not the exception, but the rule… With an American car, you just expect a contonous string of break-own.
My 2002 Toyota? Nothing but maintenace since we’ve owned it. Literally NOTHING but tires, brakes and regular sevice.
We got the 1998 Mercury to replace a 2003 Ford Ranger that my son totalled. That vehicle I had for 7 years and didn’t have one single breakdown.. not one. Which seemed odd until I learned it actually had a Mazda engine from an agreement Ford and Mazda had when they were building the Probe and the Miata on the same assembly line.
It is too bad tha American cars pretty much SUCK compared to imports.
That’s not what Consumer Reports is saying these days.
I’m glad your Toyota was bulletproof. Mine wasn’t. I’ve also had bad luck with Nissans (We once had a 96 Pathfinder that was constantly in the shop, and it was new!). Of our American cars the most troublesome one we’ve had has been our Saturn VUE: Its Honda made transmission had a recall. Our oldest car, a hand me down 2000 Impala (oldest daughter’s car now) with 140K on the odometer has so far only needed a new starter (and parts for American cars are MUCH cheaper than those for imports).
But back to my point. We’ll buy imports because we perceive them to be “better quality” and ignore the economic repercusions of making these purchases and in many cases we will collectively complain about “why are there are no jobs?” as we load our imported vehicle with imported goods purchased at the big box store.
Like I said before, you won’t see Koreans in Seoul driving Toyotas, no matter how much better they are or were than Korean brand cars. Maybe they understand something we near sighted American’s don’t or simply refuse to understand.
The only stuff our “trading partners” buy from us are things they don’t or can’t make yet. And even in that case they are making demands that we include content they manufacture in these products, like airliners. Its one of the few industries we have left and it won’t be long until it too is completely offshored to satisfy foreign protectionsim.
I worked with a guy from South Korea that refused to buy anything not made in Korea (well at least made by a South Korean company).
Colorado; Great post! I don’t agree with you on much but this is dead on in my opinion.
Hyundai makes good stuff as does LG.
http://www.buyamericanmart.com/
I began hunting for commonly used items here (T-shirts, dress shirts, jeans, etc.)…more expensive, and in many cases better made, but not always…
Here’s a good made-in-America clothing store, pretty reasonable prices. And ooh-la-la les femmes!
They have a vertically-integrated production system. From their home page:
What does it look like in action? Let’s take our staple product, a t-shirt. The shirt starts as spools of yarn that are knit into rolls of fabric in one of our three knitting facilities in Southern California. These rolls are then dyed, either within the same facility, or in another one of our dye houses, at most 30 miles away. These lots of fabric are then cut, sewn and packed into a box under the same roof at one of our three factories in Southern California. At the same time these garments are being made, our creative department, including photographers, models, and graphic designers, is creating the marketing campaign for our brand without an the help of an outside PR firm or celebrity spokespeople. Our shipping and retail departments handle the distribution of these products that we sell ourselves in more than 280 stores.
Not only is this an efficient method for our company, but also for the environment. Vertical integration by definition shrinks a company’s carbon footprint, as the materials are not shipped back and forth internationally, across thousands of miles, in the production process. As you can imagine, most garments you buy are the sum of disparate entities - knitted in one place, dyed in another, sold wholesale somewhere else and finally cut and sewn in unethical, sweatshop conditions.
American Apparel, in contrast, is made in the USA by highly skilled workers we consider our friends and family.
http://store.americanapparel.net/
“Of course part of the problem is that Americans sometimes refuse to buy American. I wish I had a dollar for everytime I’ve heard the owner of an imported car bemoan the offshoring of jobs.”
Don’t want to be a plugger, but I’m a musician, and I wrote a song about a year ago called “Trouble at the Mill”, seems like some here would appreciate one of the lines. I know I’m proud of it!:
(BTW, the ‘trouble’ at the mill is a mass killing by a man who fell on hard times and just lost it)
“Well, people let me tell you ’bout my neighborhood
Some folks got it a bit too good
They never understood and they never will
I see alot of porches with American flags
but the driveways are lined with Japanese Jags
There’s gonna be trouble at the mill”
But Jags were British and are now Tata Indian?
“Now people begin to challenge the full faith and credit of the USA. We can’t trim the deficits, let alone trim them enough to be sustainable. And that is still just on the edge of Baby Boomer retirement. As the number of 65+ increases by 70% over the next decade, the problem explodes.”
It is difficult to help without becoming the enabler.
“As the number of 65+ increases by 70% over the next decade, the problem explodes.”
I wonder how many of those land whales will live past the ripe old age of 65. Generation obese will have an effect on demographics. I wonder if actuaries are taking this into account, or if they are simply expecting modern medicine to keep these people’s hearts ticking?
As the number of 65+ increases by 70% over the next decade, the problem explodes.
Do you have a source for this? I ask because I found this:
“In the United States, the proportion of the population aged >65 years is projected to increase from 12.4% in 2000 to 19.6% in 2030 ”
http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5206a2.htm
That’s a 63% increase over a 30 year period, not 10 years. Still worrisome though.
My grandfather was morbidly obease from his late 30s right up until about a year ago. I am talking 300+. He finally lost the wieght when heart disease(90+% blocked arteries prevened fixing his AAA), COPD and diabetes were battling to see who would get him first. When he died last month, he was 91. Seems it was a tie between heart failure and COPD.
That phenomenon is even more common among women, who make a large majority of all people over the age of 65. Both of my grandmothers had all kinds of miscellaneous ailments that started in their 40s. One lived to be 91 and the other 88. For the last ten years of their lives, both of them were saying that they were ready for God to take the, That seems to be one of the great accomplishments of modern medicine - to keep sickly little old ladies alive for a long time.
Grandma is 92 and still going, despite being a long-term smoker which has pretty much blinded her from macular degeneration.
I know I have seen it, but am unable to find it at this time. There are, however, flaws with your argument that strengthen my number.
1) You are talking the % of people over 65, while I’m talking the literal number of people over 65. The very next sentance in the site you linked to shows this difference.
“The number of persons aged >65 years is expected to increase from approximately 35 million in 2000 to an estimated 71 million in 2030″
You chose the sentance that showed the proportion to total population only increasing 65%, but ignored the quote on the literal NUMBER of people increasing by 100%. My 70% increase in the NUMBER of people over 65 y/o relates to this more than 100% increase, not the 63% increase in the proportion you quoted.
2) we’re not in 2000. We’re in 2011. The boom started in 1946. 2011-1946 = 65. The % over 65 has been creeping up since 2000, but now it explodes.
3) The rate of growh is concentrated in the 2011-2021 portion of this 30 year window becuase of the birth/death ratio.
Let’s take 2015 as an example. The people turning 65 were born at a rate of 3.6 million a year in 1950, but the people turning 75 and dieing off in large numbers were born at a rate of only 2.5 million a year. The birth/death ratio is 1.44.
Now let’s move to 2025. The people turning 65 were born at a rate of 4.2 million in 1960, but the people turning 75 and dieing off were born at a rate of 3.6 million a year, giving a birth/death of only 1.16.
4) Just look at the live births per year.
http://www.cdc.gov/nchs/data/statab/t001×01.pdf
The people already over 65 were born at a rate of about 2.5 million a year.
The people turning 65 over the next 10 years were born at a rate of 3.5 million a year to 4.2 million a year. Call it 3.9/2.5 = 156%. Now factor in life expectancy increases.
Interesting. In 1988-1994 and 1998-2000, there were more babies born than in the year of my birth (including one of my children).
You do have a point of percentages vs. absolute numbers. . If the absolute # of seniors is growing faster than their percentage then we still have some major pop grow coming. And I think that percentages are more relevant to SS funding anyway.
Regardless, the percentage and absolute numbers of people collecting SS will grow over the next 20 years. Unless more revenue is generated then smaller benefits will have to be paid out.
As for those saying “I know a land whale/chain smoker who lived to be 100″, I’m sure it happens. Statistics however do indicate that as a group the obese don’t live as long as the non-obese.
Sometimes when I read the local fishwrap I notice the obits. Even in that small sample I have seen that those who live longer tend to be thinner, if their obit pics are any indication.
http://seniorhealth.about.com/od/prevention/a/obese_ife_ex.htm
“The study determines that obesity currently reduces life expectancy by approximately four to nine months.”
http://news.xinhuanet.com/english2010/health/2011-07/29/c_131017885.htm
“Mainly due to rampant obesity, Americans’ life expectancy is one-and-a-half-year shorter than that of Western Europeans on the average”
“If 50-year-old U.S. adults could be as healthy as Europeans, it could save Medicare and Medicaid 632 billion dollars by 2050, the study said.”
Hmmm… 40 years to save $632B. $15.8B a year from the current $500B a year budget that is expected to be $800B within 10 years from now. I don’t think healthier lifestyle will be the cure for Medicare.
And, several European countries with socialized healthcare say that non-smokers actually cost more over their lifetimes than smokers. They have the same end of life costs, but the non-smoker living linger means more non-end-of-life costs.
Anyway, obeasity may save us 6-months to 18-months off an average 17-ish years of life…
http://www.cdc.gov/NCHS/data/nvsr/nvsr58/nvsr58_19.pdf
page 26.
That is something like 3-9% less time. However, I am not convinced if that decreases the costs, or if their generally less healthy conditions over those 17-ish years would eat up those costs as the 2nd study I linked above claims.
Either way, it is not a significant difference. Not enough to save Medicare or the future National Deficts.
Housing’s Double Dip Part II: Rising Foreclosures
Friday, 5 Aug 2011 | By: Diana Olick - CNBC
Is there a double dip in foreclosures on the horizon?
Just as we saw a double dip in home prices, we may be seeing another surge in foreclosures.
And just as the home price scenario was caused by artificial government stimulus, in the form of the home buyer tax credit juicing home sales only briefly, the foreclosure scenario was caused by real negligence, in the form of the “robo-signing” paperwork scandal.
Banks and servicers stopped foreclosures entirely for a time after the malpractice was discovered, and courts delayed the process, picking through papers as foreclosures were resubmitted; that is now turning around.
The system is ramping up again, and foreclosure starts are up dramatically, more than 10 percent in June from the previous month, according to Lender Processing Services (LPS). The good news of the past few months has been that while the end game is quickening, as stalled foreclosures are making their way through the system at a faster pace, new delinquencies were decreasing, leading us all to believe that the crisis is abating.
Well think again.
New delinquencies rose 2.4 percent in June, which isn’t a lot, but it is still the wrong direction. This as the pipeline is still so clogged that foreclosure timelines continue to rise. The average loan in foreclosure in June was delinquent a record 587 days, and more than 40 percent of 90+-day delinquencies have not made a payment in more than a year. For loans in foreclosure, 35 percent have been delinquent for more than two years, according to LPS.
35% of deliquencies have not made a payment in 2 YEARS!!! 2 YEARS!!!!
I wonder what the number will be at the bottom of the cycle? 50%, 60%? What metric will define max pain, the negative GDP or the body count after the riots are over?
“35% of deliquencies have not made a payment in 2 YEARS!!! 2 YEARS!!!!”
And our shell-shocked politicians are paralyzed with fear. If the eventual house clearing arrives like a tidal wave the incumbents will be finished, and they know it.
Our politicians, like the Boomers who elected them, always planned for the bills to come due on someone else’s watch. Now our financial reckoning day is at hand and the politicians are pointing fingers, while the Boomers are sqawking that it’s all the “tea baggers” fault. As if.
How much consumer spending is being done by people that have not made a house payment in 2 years? What happens to consumer spending when those people are finally kicked out and they have to start paying rent?
Why would they make a payment at this point. Free rent is great.
My SIL that has a bankruptcy and 2 foreclosures in the last 6 years was going on a cruise. I asked how they could afford it. Her answer was that it is amazing how much money you can save when you are living without rent or a house payment for over a year.
Save?
Clearly, not everyone was stupid.
Looks like SIL was the on the “heads I win, tails the banks lose” plan.
I have several aquaintences who are have always and are still living way beyond their means as much as ever now that they have stopped making mortgage payments. Frees up extra cash for consuming and vacations. Makes me want to puke…
One guy who had moved out of his house and was living with his girlfriend (she’s on food stamps living in an oceanfront home) told me he was moving back into his abandoned house with her because it was free. His attorney told him he could stall any chance of foreclosure for two more years minimum.
A young couple (both of them jobless and living on UE plus under the table odd job stuff) just got back from a trip to the Bahamas. They take lots of trips and take their kids to Disney quite frequently. Neither one wants to even look for a job. Pisses me off…
“Clearly, not everyone was stupid.”
BIL was complaining earlier tonight about a lady who lives in his & Big Sister’s ‘hood who is collecting unemployment while enjoying a world travel binge. I asked how she could afford such extravagance.
The secret: “Boyfriends.”
There was virtually no slowdown in non-judicial states (CA, NV, AZ and others) according to LPS. Most of the slowdown and perhaps surge is in the judicial states (most notably NY, NJ and others).
Get those fopreclsoures rolling like we have here in the west, and you too can see houses for 70% off peak.
“You can’t make excess debt disappear. It has to be paid…either by the borrower, or by the lender. Someone has to suffer.” ~Bill Bonner
- It really is this simple, but economists, politicians and people in general just don’t want to expect this simple fact. They like to think “something” else can be done, in this modern age… but it can’t.
If we had the same level of endebtedness as 1980, businesses and households would have a total debt of $8T. They actually have $24T.
That is not too-big-to-fail, that is too-big-to-save.
Who else is going? maybe we can car pool….
HOUSTON (AP) — Though not yet a declared candidate, Texas Gov. Rick Perry is putting his faith under the national spotlight as a White House prospect with an important conservative constituency all to himself.
He’s addressing a daylong prayer rally Saturday that he has spearheaded while weighing a campaign for the 2012 GOP presidential nomination.
More than 8,000 evangelical Christians, most from Texas, had registered as of Friday to attend the event at Reliant Stadium, which seats 71,500 and was the site of the 2004 Super Bowl. Organizers said they expected thousands more than that to show up.
Perry’s midday speech will reach thousands of social-values conservatives, but he’s not expected to take questions from reporters covering the religious rally.
“The questions are all going to be political, and that would just take away from the event,” Perry spokesman Mark Miner said.
More than 1,000 churches around the country plan to stream the seven-hour event on the Internet.
http://news.yahoo.com/perry-prayer-rally-puts-2012-prospect-spotlight-074113551.html
I haven’t followed Perry but my friends in Texas don’t think much of him.
I view any politician thumping the good book with extreme jaundice.
He’s definitely pandering to the Baptists, Church of Christ and other fundies in Texas.
Apparently someone leaked Perry’s college transcripts from Texas A&M. Perry was a C- student and was on probation at one time.
So he’s a presidential material.
The son of dubya.
Texas style! (remember LBJ?)
Rick Perry is the kinda guy who never made more than $115k/year but became a multi-millionaire years ago.
I met him about 10 years ago. He is very charismatic( not as much as Bill Clinton though) and the women tend to swoon over him.
He also has very good hair.
http://www.dallasnews.com/news/politics/state-politics/20100725-murky-land-deals-mark-gov.-rick-perry_s-past.ece
“Three years after Gov. Rick Perry’s biggest real estate score, questions persist about whether the governor benefited from favoritism, backroom dealing and influence-buying.
The Dallas Morning News found evidence that Perry’s investment was enhanced by a series of professional courtesies and personal favors from friends, campaign donors and the head of a Texas family with a rich history of political power-brokering.”
So, he was bought and paid for long ago. Nice to know.
He made his money in land deals the way Clinton made hers in cattle futures.
After Texas gave us George Herbert Walker Bush and Shrub, they should’ve been banned for life from foisting any more local pols onto the national scene.
Rick Perry was Al Gore’s former Texas campaign manager in the 1990s. ‘Nuff said.
Too little and too late!
will reach thousands of social-values conservatives
Who will be listening on America Free Radio somewhere in Iraq as they continue their 11 year
questCrusade to find Cheney-$hrubs yellow cake weapons of mass Deficit Destruction!What exactly is a prayer rally? When I think of a group people praying, I think of a church service where people pray with their heads bowed a bit. The word rally conjures up images of a pep rally, with lots of shouting.
You haven’t heard Evangs and Fundies pray, have you?
Yes, and these are the kind of Low IQs who kept “W” in the White House for two terms despite his truly epic incompetence and strategic blunders, then flocked to McSame and Palin who would’ve been as bad or worse.
It’s kinda like dem version of a funeral.
Perry reads from Bible. Obama read from a teleprompter. While, Putin bends frying pan with his bare hands. Talk about boring sack of $hits we have.
Clipped from The Dail Reckoning…Bill Bonner
*** Larry Summers is talking about a “double dip” recession. He’s wrong twice. First, because there was no recession. Second, because there won’t be another one anytime soon. This is a correction, not a recession.
A recession is a different thing. In a recession, an economy takes a break…it’s like pulling into a rest stop along the highway. You fill up your gas tank, and you can start out again.
But what began in 2007 was no rest stop. It was a complete stop. Time to check the map. Change direction.
David Rosenberg explains:
Plain-vanilla, garden-variety business expansions and contractions that are influenced by the manufacturing inventory cycle tend to have recessions separated between five and 10 years apart. That was certainly the experience that economists came to understand and appreciate in the post-WWII era…
This time, we are dealing with something different. This is a balance-sheet downturn…when businesses and households begin paying down debt and rebuilding the asset side of their balance sheets. Instead of spending…they save.
It is a very natural thing to do, but it hasn’t happened in 80 years. And it changes the whole nature of the economy. The US economy has developed to provide goods and services to household spenders. That’s why there are so many malls in America — 10 times as much retail space per person as in France, for example. And that’s why a large percentage of the US population is employed in “service sector” jobs — lending, selling, installing, maintaining and otherwise helping households spend money. Manufacturing may have declined in America, but at least there was the service sector.
What happens when households stop spending? Time to check the map! And change direction.
The latest jobs report shows that even the service sector is no longer creating new jobs like it used to. And no wonder. Consumer spending is slumpy. It hasn’t been so weak since WWII. And it actually went down last month.
Considering that population and price levels are still going up, an actual decline in consumer spending is a sign that the Great Correction is intensifying.
*** Advice to dear readers: if you’re still in the stock market, get out; stay out until the Dow drops below 6,000.
As others have put it before me, this is not a liquidity recession. This is a solvancy depression, and we have yet to feel the worst of it.
There it is. If you understand this then you understand more than the majority understands.
Which is a good thing because the majority believe this downturn is a liquidity recession and hence it’s lifespan can be ended with an injection of liquidity - something that has been the case during our lifetimes (but not during our grandparent’s lifetimes) - and because the majority believe this to be a liquidity recession they are willing to buy the dips, and buying the dips adds liquidity to the System.
IMO their sacrifices of liquidity should be welcomed by those of us who want the effects of this disasterous downturn to be softened.
This is a solvancy depression, and we have yet to feel the worst of it.
Absolutely. I’ve lived through one of these before, and the country I lived in at the time eventually defaulted (after I left). It was already in a high inflation mode before the default and after the default it went into hyperinflation (200%). During this period the value of the currency vs. the USD went from 22.50 to a dollar to 9000 to a USD. It was during this period that the Mexodus to the USA began in earnest. After they stabilized they lopped three zeros off their currency and today it trades around 12 to a USD.
They had their “La crisis”. Ours is yet to come.
I remember reading at the time that Mexico had more billionaires than any other country in the world. I figured right then that their currency must have been farked.
Inflation seems much higher in Mexico than in the US in what I can see in my trips over the past several years. If it wasn’t for all of the dollars flooding into Mexico I think they would have to adjust the conversion rate again.
IIRC their official inflation rate is currently about 5%. Also the peso has gained on the dollar Its gone from 15 to 12 to the USD, which makes things more expensive dollarwise.
Mexico runs a large trade surplus with us (who doesn’t?) plus all of the money laborers send back home.
Mexico sitll has the 2nd highest number of billionaires of any country. They were never #1 as far as I know.
Mexico is not a poor country. They have vast natural resources including oil, natural gas, metals of pretty much all kinds including gold.
Mexico is a country with a lot of really poor people, and a few really, really rich people.
Some people talk of the Republicans trying to Barzilify the USA. I prefer to stay closer to home and say Mexicoification of the USA.
FWIW, the average Mexican isn’t as poor as we might be led to believe. But there is a very large number of very poor people, which has fueled the Mexodus for decades.
“The US economy has developed to provide goods and services to household spenders.”
More like its designed to deliver goods and services provided by other countries.
This is a balance-sheet downturn…when businesses and households begin paying down debt
Instead of spending…they save.
Paying down debt = saving…brilliant!
(Eyes reckon iffin’ everyone just did the right thing and continue to pay “Full-Idiot” price for their “Now 50% discounted!” RE ATM shelter$, everything would be Okie-Dokie!)
Labels really suck.
For instance, if one wants to live in a country that demands fiscal responsibility from its leaders - aka a balanced budget - then that person must be a Tea Partier. And Tea Partiers are considered whackos so that person must be a whacko. And once a person is labeled a whacko then all credibility he has for any issue vanishes.
The issue of a balanced budget cannot stand alone, it must be associated with a movement of some kind - it must be hijacked. And once the issue is hijacked then it becomes tainted to the same hue of the movement that hijacked it.
The PTB know this and hence this hijacking of issues is a major tool they use to steer lemmings to where they want them to go. If you are not one of these lemmings then you will somehow end up being labeled a whacko.
The concept of our country living under a balanced budget was something many on this message board supported up until a couple of weeks ago, then … something really strange happened.
You’re spot on this morning Combo.
My personality wont permit me to listen to complete BS passively. I care only for the truth. Be it race, religion, marriage, etc.
I don’t do cocktail parties well.
Hear, hear! Great post combo.
“I don’t do cocktail parties well.”
I don’t do non-cocktail parties well. LOL Need the alcohol to ease past idiocracy.
I figure most of us are here because we’re a little higher on the need for reality scale.
The concept of our country living under a balanced budget was something many on this message board supported up until a couple of weeks ago, then … something really strange happened.
I think what you’re referring to is fear setting in.
We are going to see increased defensiveness as we realize those cuts we wanted so badly are going to impact us, our loved ones, our good friends. And then we wonder why those loved ones have to suffer while the intact system that brought us here is still doing so well.
I hate the labels too. It is almost impossible to be taken seriously by anyone unless you bandy the catch phrases about like a member card admitting entry to a private club, like the ear & eye only awaken to the tagged buzzwords in the brain. Anything else is just white noise. Or worse mislabled. But instead of letting it get us down, I think we have to remember that many people go numb, or into fight/flight as a reaction to crisis and it will be increasingly difficult to have these nice idea exchanging conversations. We just have to remember the emotional turmoil these changes are bringing onto people.
We are going to see increased defensiveness as we realize those cuts we wanted so badly are going to impact us, our loved ones, our good friends. And then we wonder why those loved ones have to suffer while the intact system that brought us here is still doing so well.
Because our loved ones lack good lobbyists?
we have to remember that many people go numb, or into fight/flight as a reaction to crisis
It’s what you do when you’re powerless, when all you ever hear is bad news, when your pay gets cut or your spouse or best friend get laid off and can’t find a job. When you see that not a single house in your neighborhood sold during the summer even though asking prices have dropped. When you watch tuition rates soar at the local State U’s. When you see your 401K balance tank if it was invested in stocks.
You realize that you are powerless against the oncoming tidal wave and that that the inner tube around your waist (your meager savings) probably won’t save you. That’s when you start to feel numb.
Powerless is exactly right.
Should I buy stocks and likely lose 50%? Should I move my money into bond funds, only to see it earn returns that are below inflation, while also being at risk of serious loss?
Maybe I should just hand half of it to the governemnt in the form of taxes and pull it from my 401(k) and use it to buy real estate. But, what? Where? I do not want to be a slumlord, and with massive household deformation I expect, rents my go to near $0 along with house prices. Farmland? I do not want to be a farmer, do not know how to be a farmer, and the smart money has already drastically driven up the prices on farmland. Gold? As if people will trade their last scraps of food for gold. Just stock up on guns and canned food? I am not sure I want to live if that is what it is going to come to.
My 72 y/o dad who hates government and especially taxes, but worked his whole career in the aerospace and defense industries so we better not cut NASA or DOD, loves his SS and MC and you better not touch either of those. He didn’t want his 92 y/o mom moving in with him, so is glad that she can just spend down the last bits of her savings and then Medicare will pay for her nursing home. OH…. The irony. The utter helpless irony.
At least his houses (one in SoCal only in MI) are paid for. My 65 y/o in-laws are truely fooked. They are retired, as in no income except SS and investments, but they still owed $250K on their 4 beedroom mcmansion in a 55+ golf community. They took a big distro on their IRAs to pay down the HELOC as the interest rate was too high, but then complained when they got hit by Uncle Sam. How do you think governemnt is paying for your Medicare if not through taxes?
I’ve been listening to a friend of mine going through a divorce. It just started to blow up in the last 6 weeks or so. It is U-G-L-Y! And so much of the conversation touches on subjects we’ve covered here. Sometimes she says things and I have to wonder how she can be so stupid (about how money works) but that is what happens when one person takes over the money and the other goes about life w/o ever thinking about it. She seems to confuse rights to spend money w/power of one spouse over the other like a simple scoring of points means you will get what you want.
Her husband has truly gone off the deep end and people involved suspect drug/alcohol use and a situation very close to bankruptcy. After requesting his paperwork her lawyers discovered they’ve been spending $3k/month more than their income for years. But the wife is convinced her favorite expenditures are somehow going to continue because she’s been good and he’s been cruel!!!!!
Sometimes I think we’re all deluded on some level because part of man’s survival mechanism is refusing to see the negative and puffing up the positive. Works great when you’re a hunter/gatherer by the river but in this world I think it’s severely working against our survival timeline.
Whaddaya mean, truly fooked with nothing but SS and investments?
That is the reality for the “rest” of us.
Waat, ya think we have PENSION plans?
Gimme a break. Hitting too close, there.
Was it the issue that got hijacked, or was it the “Tea Party” itself?
“The concept of our country living under a balanced budget was something many on this message board supported up until a couple of weeks ago, then … something really strange happened.”
I think that just about everyone on this board believes that a balanced budget should be the norm. I think where we differ is on how to reach that lofty goal. Some believe that the poor and middle class should bear the entire burder. Some believe that the rich should do the heavy lifting. Some believe that military spending is sacrosanct while others believe that maybe we shouldn’t be spending more on our military than the rest of the world combined. In the end, no one wants their ox to be gored so its most likely that those with the least lobbying influence will be the ones to pay the price.
That said, balanced budget or not, the FedGov cannot be allowed to default. Personally I didn’t buy the threat that the debt would be defaulted on if we didn’t raise the debt ceiling, but I do believe that there would have been other forms of chaos.
Also, I think that our trade deficit is even more threatening to our economic well being than the budget deficit. But no one tries to address that because that implies “protectionism”. Funny how its OK for China to demand that foreign automakers assemble their cars in China if they want to sell them there. Heaven forbid we try something like that.
Politics trumps all common sense.
I am not opposed to a balanced budget.
I am opposed to attempting to acheive that balanced budget without addition revenues and without attacking the real problems.
50% of households don’t pay tax. 1) it is a lie since they pay payroll even if they do not pay income tax. 2) This is the obvious end result of wages not keeping up with inflation. It is the same people that want to crush unions, fight minimum wage increases, wants less governmetn regualtion so they can abuse their employees even more, that then turn around and claim that we need more taxes from the poor. If we want to broaden the base, then we need to start by working to increase the income of households rather than working to crush those incomes in the name of increased corporate profits.
Free-trade is good. Sure, if we can borrow the money we need to buy all that foriegn sourced stuff… and never have to pay on or for any of that debt. Oh… we can’t? Hmmmm… Maybe trade deficts and free trade are not really a good long-term solution.
So, I would attack the deficit with a combination of large spending reprioritizations (50% cut to DoD and 20% cut to Social Security, but increased spending on other infrastruture projects that put Americans back to work in the USA), tax increases, tariffs, minimum wage increases, government take over of healthcare with major costs cuts and real rationing, and a whole host of other actions.
AND, the huge debt on businesses and households is a major drag on the economy, so he HAVE to make it easier for both businesess and households to discharge debts in bankruptcy without full liquidation. We are going to have to revisit student loan write-offs.
And yes, my plan is going to cost more money, so we have to accept large deficits for the next 10 years or so, and just print that money out of thin air and accept some serious inflation as a result.
Tariff: $100 a barrel tax on imported oil used to fund building a network of natural gas stations across the country, tarrifs on imported manufactured goods equivilant to the ratio of our medium factory worker wage to theirs. We pay $15 and China pays $3, then 500% tariff.
Tax increases: drop the SS/MC payroll taxes and roll them into income tax. Count all income, including long and short-term capital gains as income. Steapen the tax curve back to something closer to the 1950s. Add a transaction tax on stock, bond and other transactions. Add a national sales tax that covers ONLY interstate transactions that are not covered by state income taxes.
Military cuts:
I would focus DoD spending cuts at high tech weapons and the Navy’s aircraft carreir fleet. Bring troops home from around the world.
Spend that money saved from DoD cuts on infrastructure to bring manufacturing and other industrial jobs back to the USA. The tarrifs are going to give room for us to build lots of stuff here, and we’re going to need to repair roads, upgrade power grids, fix waste disposal.
With the oil tax, we’re going to need a cash-for-clunkers to subsidize getting gas guzzlers off the road, to be replaced with smaller and more efficient CNG vehicles.
In summary, we didn’t get into this situation over night. It took 40 years of massive trade deficits and living far above our means by running up massive personal and haoushold debt. We can not get out of it by a short-term plan such as slicing 45% from the budget. We certainly can’t get out of it by letting Wall Street blow yet another bubble. We must attack the root problems of trade deficits, excessive debt, wages not keeping up with inflation, insanely high healthcare costs, and yes… government spending too much, and on things that do not leave a lasting industrial base or build a solid infrastructure.
We got into this situation in the last 10 years, not the last 40. Clinton left Bush a handy surplus.
Wrong.
The surplus was short-term and 100% based on the stock bubble that is more commonly know as the tech bubble. When we had the tech wreck and that took down stocks in general, and all the unprofitable start-ups were forced into bankruptcy and laid off all their workers… well, those surpluses turned into huge deficits post hast.
Not to mention, Baby Boom retirement was still a decade away when he took office, lucky for Clinton. Obama is not so lucky.
Besides, the real underlying trouble for our economy is our use of debt to maintain our standard of living in the face of falling wages as our industrial base was offshored. That was certainly WELL underway during the entire Clinton Administration.
Google you up some “Federal Reserve Z1″ then take a peak at table D3. Take that 2.9T in business and hosuehold debt in 1980 and inflate 240% for inflation and 120% to see to have the same level of debt wwe should have $8.3T. OOOPS, we actually have 24.3T.
That is not ONLY Bush Jr’s fault.
We have used debt and bubbles, AKA Smoke and Mirrors, to pretend we still have a strong economy, while in reality, we’ve been throwing it all away.
The overwhelming majority of our citizenry are not independent thinkers. They look for someone to lead them in a direction, help them along the way. I have little doubt that very,very few have ever read our constitution or even care about it or what is based on. Many don’t desire freedom, they want to be taken care of, and will give up their rights and freedom in exchange.
Politicians are expert at telling people what they want or need to hear. They are control, power and money driven. Most Americans are not, they are followers. Politicians create emergencies and chaos out of thin air, and the public falls for it hook line and sinker, decade after decade.
When VP Biden referred to tea party folks as “terrorist” a prolific poster on this board jump on it pronto. A perfect example of how followers parrot those they admire. It is also a way for weak people to “stick it” to people they don’t like or can’t understand.
The populous is well trained and do not want to be bothered with unpleasantness. I dislike labels also, but the majority likes them. So here we are, on our slow decline, the ending of our empire. No way to stop it, the majority rule and the populous is either to stupid to see what is happening or believe their government can fix it. So they will vote the same way they always do.
Also at some point the U.S. will default on it’s obligations although most think that can not be “allowed” to happen. It will happen and when it does I really feel sorry for the generation left holding the bag!
P.S. When I take jabs at people, I do it solely to rile them, it’s an little evil I know, but it can be entertaining.
“Politicians are expert at telling people what they want or need to hear. They are control, power and money driven. Most Americans are not, they are followers. Politicians create emergencies and chaos out of thin air, and the public falls for it hook line and sinker, decade after decade.”
I am not sure you really understand human nature as well as you think you do.
In order to process lots of data quickly, our brians build expected patters. When new ideas fit our expected patterns, we accept it easly. When it does not fit, we have a tendancy to reject it as lies, misinformation or crazy talk.
So, someone that thinks Bible Thumping, red neck Republicans are largely ignorant, would see a bunch of them rallying arund the Tea Party and think “kooks”.
But, how do we build these ideas? Well, from exposure to them, and them being in our interest if they were true.
People do not turn into Rush or Faux News or even CNN or MSNBC to be told what to think. They tune into whomever is saying exactly what they already believe because they want it to be true.
Belivers watch church channel because it tells them what they already believe. Atheists prefer science challen because it tells them what they already believe. (The obvious differnce is that the church channel uses a book filled with superstition and mythology while science channel ueses that silly stuff called testable dats and logic.)
It takes a strong mind indeed to look beyond their currently heald beliefs, to take a hard look at the data, and challenge themselves to prove their beliefs are correct.
I grew up a Reagan Republican fulling believing in the Laffer curve and believing that lowering tax rates increase tax revenues.
Having watched the corporate raiders with interst, then seeing the junk bond collapse… then seeing the S&L excess and their collapse. Then, I earned my BSCS, got out of the Navy, and got a job as a computer programmer at a tech company just in time to watch the late 90s stock bubble built around the tech bubble from the inside.
I tired to explain to people that it was a bubble that would crash, but no one wanted to hear it becasue it did not fit their paradigm. It was not in their best interest to believe, so they refused to even hear.
During this bubble I had an extended arguement with an econ professor as to whether we could run huge trade deficits forever. I said we could, as long as the economy grew faster than the trade deficits. He was sure we could not, but was unable to provide hard data to prove his case. I accepted that large trade deficits were indeed possible becasue 1) it was in my best interest to, 2) they had not cause trouble yet, and 3) he was unable to provide the key he needed to prove his position.
When the housing bubble was inflating, again, I tried again to tell people what a disaster was brewing. Again, they did not want to hear it. Their house wenbt up 50% in a year so they could cash-out refi to payoff credit cards and take a trip to the Carabbean.
They are not suckers being led. They are people believing what it is in their best interst to believe, because they are being told it is true, but others whose best interest it is to believe.
When I found the HBB, someone linked to the Fed Reserve Z1, D3, debt outstanding by sector. Finally it was made clear. The data as to why we could not continue to run mass deficts. The key to how we were able to live so well despite so many good jobs being off-shored and wages not keeping up with inflation.
Tax cuts, spending increases and large deficits were only one part of the Reagan revolution, and by far not the most significant. The key to 25 years of prosperity was deregulating banking to transform 2-3 trillion in governemnt debt into 24 trillion business and consumer debt.
This was an epiphony, transformational moment for me. It was not less government that was the cuase of the success we had been experiencing in bubble after bubble. It was government intervention, creating debt, then building trust in that debt, giving the rich a green light to explode debt, all based on governments implied become explicit guarantees that it would not let that debt collapse.
Real money is not created in a vacuume. Real money is created trough government conspiring with Wall Street to explode debt. Since debt is money, the majority getting in debt is the key to the minority getting insanely richer. If the rich have to pay wages, they get poorer. If they can just loan their money to the poor, and then that money comes back to them again, then they can get richer.
Are most people capable of stepping back from their own beliefs, challenging their own beliefs agains the data and then changing their beleifs if the data indicates?
I think not.
Most people must be burned by experience before changing beliefs.
I have been forced to challenge my own Libertarinistic leanings for the same reason. Without significant regulation, it is in the best interest of the rich to lie, cheat and steal. Optimum efficiency comes from paying slave wages and then selling your goods to people on debt…. until, of course, they are unable to pay back that debt on slave wages, then you just bribe the government to step in and ensure the debt gets paid.
Would 50% cuts across the board to government spending solve our budget problems? No way. Spending cuts of that magnitude would crash the economy, slice revenues significantly, tirgger massive defaults and a full fledged debt collapse.
We also can’t spend our way out with our current trade deficits. Sopending money into our economy jsut results in more debt that can’t be paid, and stimulation of China’s economy.
So, rarther than throw my hands in the air and declare greater depression as inevitable, I prefer to continue to search for solutions that involve pain, but not total collapse? Will they work? Well, they can’t be worse than total collapse.
If your heart-felt answer to our econmic troubles is to put a gun to your head and fire, which is what a 50% across the board spending cut would be, then I plead with you to reconsider. Is that really what you want?
Last month I took a vacation to D.C. and took a hal day to go through the U.S. Hollocost Museum. You see how easy it is for desperate people to turn to a radical that tells them it is not their fault. You see how easiy it is for people that blame the status quo to turn on their neighbors, to perform great atrocities. No, the Jews were not first. The first were the political opponents of the NAZIs. The liberals, the communists, the Free Masons, the previous political establishment that could possibly mount opposition. It was not until the more obvious political opponets were removed that the NAZIs turned on the Jews, mostly for economic gain, to justify taking their stuff.
I would hold off on the “gun to the head”, plunging us into a greater depression, just for the oppertunity to prove my dogmaticly heald beliefs correct, as a last resort after we have tried all other options that we can think of.
Bubble after bubble after bubble, each buigger than the last to paper over the preious losses while generating indane proftis for teh few while dumping massive losses on the many…. Tries that and it failed.
Rich getting richer by government backing up new creative ways of creating money by loaning it to peple that can’t pay it back to maintain our standard of lving by borrowing ourselves rich as we offshore the core of our economy… tired that and it failed.
Throw mass liquidity at a solvancy problem? Tired that.
Delay and pray? Extend and pretend? Ease FASB157 to let companies lie about their financial position to give them time to generate enough profits to paper over their losses, while at the same time preventing them from blowing an even large and more destructive bubble? Trying that, but it is not working.
50% cuts to governemtn spending and just let it all crash in a smoking pile of ruins? Ummmmm… perhaps we try a few more other things first and hold this one for last option.
One of first the politicians to jump on the Tea Party bandwagon was Phil Gramm, the author of the Gramm-Leach-Bliley Act (1999) which dismantled the Glass–Steagall Act. He’s in the brain trust with Paul Ryan that’s behind the TP economic plan. I assume Combo and the other Tea Party supporters understand who is driving this agenda. I agree we need to balance the budget and cut the debt but I don’t trust these supply side evangelist to fix the problem.
“I assume Combo and the other Tea Party supporters…”
There you go, lumping me into a group I know next to nothing about.
Because I want a balanced budget and the Tea Party wants a balanced budget does not me a supporter of the Tea Party.
The issue of a balanced budget is an economic issue, the Tea Party is a political issue. I have no interest in political issues, my interest lies in economic issues.
My interest is in understanding the economic problems that we have in this country. Once I gain a bit of understanding then maybe I’ll find a way to cope.
Putting my faith in believing a political party will solve these financial issues on my behalf has left me disappointed in the past and I fully expect it will leave me disappointed in the future. From what I have seen these political parties spring up out of nowhere with promises to serve their supporters but end up serving themselves.
For instance, if one wants to live in a country that demands fiscal responsibility from its leaders - aka a balanced budget - then that person must be a Tea Partier. And Tea Partiers are considered whackos so that person must be a whacko.
You need to consider the history of the past decade and a half. During the late 1990s the federal government actually ran surpluses for a few years. There were some people who thought that the government actually pay off its debt entirely. (Of course, given the way that DC works, this was never likely, but people believed it anyway.)
Many leaders of the right didn’t like that idea. The chairman of the Federal Reserve, Mr. Greenspan, warned that paying off the debt would make his job difficult, since the Fed influences interest rates, in part, by buying and selling government debt. Other leaders of the right, such as Rush Limbaugh and George W. Bush, didn’t like the surpluses either. “You what it means when the government runs a surplus?,” they would shout. “It means that the government is taking more tax out of your paycheck than it actually needs to run the government. Taxes must be cut immediately!”
So then Mr. Bush moved into the White House in January 2001, and immediately set about cutting taxes. The goal, said Grover Norquist, was to have a major tax cut every year in Bush’s first term, in order to “starve the beast.” When objections were raised that these tax cuts, which mostly benefited the wealthy, Dick Cheney said, “Deficits don’t matter.”
This is why the Tea Party type are not taken to be sane, sensible adults of normal IQ. I’m sure if you could identify these people and then go back into a time machine and speak to them in 2001, you would find they most of them would support the tax cuts and the whole “deficits don’t matter” line.
I meant to write:
When objections were raised that these tax cuts, which mostly benefited the wealthy, would raise the deficit, Dick Cheney said, “Deficits don’t matter.”
You’re right…we should long for the policies that gave us the dot com bubble. The real estate bubble was the evil republicans fault…but the dot com bubble…that was some great policy there…that’s how we should roll.
Yep… Whenever Dems trot out the Clinton Surplusses, I love to point out that it was all based on teh bubble that wiped out $5T in investor wealth when it popped. As soon as it popped, buh bye surplusses.
Not to mention that the boomers were almost 20 years younger when he was elected than they are now….
Yes, that’s true about the surpluses. They were caused by a bubble and were not sustainable, which is why I never thought that the national debt would get paid off.
My point, however, is how the various politicians reacted to those surpluses. Clinton’s reaction was basically, let’s use these surpluses to pay down the debt a bit. The right wingers wanted tax cuts immediately.
Regarding deficits, you can’t find a quote of anybody like Clinton (either one), Obama or Pelosi saying, “Deficits don’t matter.” It was Cheney.
Here’s something more important than what Cheney said; almost every day I hear Democratic economists like Reich or Krugman say deficits are absolutely necessary right now. I’m asking, are these people and the White House not Keynesian?
Is this the smallest apartment in America? $800 a month ’shoebox studio’ in Manhattan is just 78 square foot
If you find your apartment a bit claustrophobic at times, spare a thought for this young New Yorker.
Architect Luke Clark Tyler designs grand houses for clients from his tiny 78 square foot shoebox apartment.
There is no space for a kitchen, or bathroom, and he had to build a bed from scratch because it is too narrow to fit full-sized ones inside.
The bed doubles as a sofa - and as a storage unit for clothes and odds and ends.
With no kitchen, a microwave is hidden away with his shoes and a fridge is built into the desk at which he spends most of the day working.
He keeps toiletries in his closet and shares a bathroom with three other apartments.
Set in Manhattan’s Hell’s Kitchen, the location couldn’t be better, which might explain why Mr Tyler spends so much on so little space.
His rent is $800 a month, which is cheap for the area but extortionate considering the cost per square footage ratio.
The average rental price per square foot in a studio is $72 but Mr Tyler is paying almost twice as much at $123.07.
Mr Tyler, who downsized from a 96 square foot apartment, remains upbeat, seeing the apartment as conveniently snug, rather than constricting.
‘I just use it as an excuse not to buy an Ottoman because… I can just prop my feet right up on the wall,’ he said.
Mr Tyler, 27, keeps books, cutlery, plates, cleaning products, spices, a microwave, sneakers, clothes and his toothbrush in one small cupboard.
‘Having lived in both the largest shelter in the South East as well as the largest slum in East Africa, I don’t think living small is a challenge,’ he said.
‘So we can call it anything; a room, a hallway, a live-in-closet, but to me it’s just home.’
Read more: http://www.dailymail.co.uk/news/article-2022915/Is-smallest-apartment-America–800-month-shoebox-studio-Manhattan-just-78-sq-ft.html#ixzz1UFgv1bUW
‘So we can call it anything; a room, a hallway, a live-in-closet, but to me it’s just home.’
I think I saw Bob Villa renovate that place on…
“This Old Box”
How are they going to grow up to be contributing members of society if they are sitting around getting high?
More importantly, how are wine and beer makers supposed to meet profit targets if these people are “growing their own”?
He’s a freakin’ idjit.
He could move to Chicago, have the same hipster lifestyle, and afford a real place.
Or he could commute from Queens. Seriously, this guy has a more than a few bats in his belfry.
Must stop those 90 year old geezers from smokin pot:
http://yourlife.usatoday.com/health/medical/alternative/story/2011/06/Seniors-medical-pot-collective-stirs-up-trouble/48188956/1
Its the “gateway” drug. Soon these 90 year old whippersnappers will be doin’ the hard stuff and listening to that loud music.
O.C. schools shave 524 jobs
THE ORANGE COUNTY REGISTER
Orange County public schools have eliminated 524 jobs this year as they struggle to cope with rising costs and limited state funding, even as the financial outlook for public education has improved dramatically over the past three months.
Nearly 1,000 of the 1,500 teaching and other jobs that Orange County school districts had originally planned to cut have been reversed, and district officials say they expect to rehire many of the laid-off employees, after accounting for all retirements and resignations.
That’s not to say, though, that students won’t feel the impact of the budget woes when they return to their desks in the coming weeks.
Class sizes will be larger in some school districts, programs and services have been scaled back in others, and 10 of Orange County’s 28 districts will shave off up to five days from the instructional year.
Maybe Now is a good time to demand an English First policy….tough love. You must read,write and speak English to graduate to the next grade.
In California there is a two tiered high school diploma system. You get the basic diploma for just finishing, and yes, in some school districts you can do that in a foreign language.
The other diploma, the one California colleges are demanding, requires passing an exit exam, called the California Highshool Exit Exam.
Apparaently foreign language grads are having trouble with the exit exam … because … it’s in English. Some accomodations are made for students with disabilities (it can be taken in Braille)
I gather the first tier diploma is really just an attendance certificate then.
I recall reading a story about some hispanic gal who wanted to attend some Cal State school. Problem was she failed the Exit Exam and blamed it on her lack of proficiency in English.
She and some other students filed a class action suit that demanded they be allowed to take the Exit Exam in Spanish.
Having grown up in CA and going to the schools there and being a witness and sometime victim of the illegal mexican population, this makes me sick to my stomach. They are arrogant and actually think it is funny to make “whitey” jump through hoops for them. They bragged that they could do whatever they wanted because they could just run back to mexico if they got in trouble.
One of my best friends was second generation mexican and she was constantly threatened and abused by the female gang members because she didn’t want to be in their gang. I was followed around school and called names and in spanish and harassed and threatened by them too for being friends with her. I know lots of girls who were beat up or skipped school because they were threatened. They ruin school for the rest of the students who are actually there to learn. They should do something about illegal immigration, if for no other reason than the problems they cause in schools.
Behavioral Finance in Social Security
http://tinyurl.com/3do9fqr
“It is evident from President Roosevelt’s words that Social Security was designed from the outset to alleviate fear of poverty rather than promote hope for riches. It is also evident that it was designed as an insurance program rather than a savings program or pension plan. The rich need little protection against “poverty- ridden old age,” but the poor need it. This implies that Social Security was implicitly designed to “spread the wealth,” where the poor are likely to receive more, relative to their payments, than the rich. Moreover, the structure of Social Security is implicitly designed to counter behavioral deficiencies reflected in cognitive errors and insufficient self control.”
Or, perhaps encourage those errors and self-control. If evryone is saving for retirement and no one is spending, there is no economy. You need to get people to spend inorder to have economic activity.
Look what many expecrts are saying China needs… A SS type system to stop their workers from saving so much, and give them confidence in their retirement to get them to start spending, so they can replace foreign denamd with domestic demand when the USA and Europe crash.
How much more demand can $1/hour workers provide if they stop “saving”? Are they gonna buy those giant plasma TVs, side by side fridges or designer sneakers?
And besides that, won’t they have to institute a payroll tax of their own to fund their own SS system? Wouldn’t that offset the lack of savings?
1) More like $3 an hour for factory workers and $5-8 for engineers like those my employer (IBM) keeps hiring. And yes, there is room for them to buy more consumer goods if they were not saving.
2) Those already retired get nothing. This lets you collect a TINY tax… like maybe 1 or 2% now, and only on a small amount of income.. like say, the median wage, so the rich have most of their income excluded, so the effective rate is a fraction of a %.
Of course, as those paying in age and some people start to retire, you’ll have to keep doubling the tax rate about once a decade… 4% , 6%, 9%, 14-15% within about 5 decades. At about this point, you’ll have to stop doubling the rate an jsut do stealth increase by increasing the cap at 3x the rate of inflation so instead of it being median wage, it is actually 3x the median wage…
Look man, it isn’t like this hasn’t been done before, because what I describe above is EXACTLY the American SS plan.
http://www.ssa.gov/OACT/ProgData/taxRates.html
Rates including the match went from 2% to 14% in 47 years.
Once we started to get to the point that there was push backs on rate increases, we started fiddling with the cap.
http://www.ssa.gov/OACT/COLA/cbb.html#Series
Take the values before 1970 and inflate to today, you get $40-50K or less, about median wage. The actual cap today is $106K, about 2.5x the median wage.
I understand what you’re saying, but with their 1 child policy China will soon find itself even more upside down than we are (next generation wise). I seem to recall reading news stories that in 10-20 years China will have more seniors than non seniors. STarting something like SS over there wouldn’t kick the can down the road too long.
More like $3 an hour for factory workers
Maybe the more skilled factory workers. According to the
article below the average is $300 a month. I’m guessing that they work more than 40 hours a week (heck, the work week in Mexico is 48 hours). Say they work 200 hours a month, that would be $1.50 an hour
http://www.nytimes.com/2010/06/08/business/global/08wages.html
In any case, $1.50 or $3/hr I don’t see how these low paid workers are going to pick up the slack for broke North American and European “consumers”.
“…Moreover, the structure of Social Security is implicitly designed to counter behavioral deficiencies reflected in cognitive errors and insufficient self control.”
Ah, the warm, comfortable hug of the nanny state.
Moreover, the structure of Social Security is implicitly designed to counter behavioral deficiencies reflected in cognitive errors and insufficient self control.”
How many WW II soldiers who were fighting-to-the-death against German-Japaneese Madmen fall into your emphasis?
So, every month…750,000 USA military personnel (some draftees, oh dear!) returned from overseas, and went right back to life-on-the-farm or daddy’s Corpooration.
So, In modern America, the “Wealthie$” & “connected-one$” are not required to
sacrificerisk their children’s Blood in order to support those with “behavioral deficiencies” & “insufficient self control” that might Live Lavishly on $ocial $ecurity benefit$, is that what you’re gettin’ at?“It is also evident that it was designed as an insurance program”
So, it’s a USA Gov’t non-profit$, still some folk$ wanna continue to cry-piss&moan? Oh, the pain,… we’re $uffering $o!
Hwy, I think you are talking about disability, not old age retirement planning deficiencies.
Flashback: Little TTT wrong again…
‘No risk’ the US will lose its top credit rating, says Treasury’s Geithner
By Michael O’Brien - 04/19/11 10:33 AM ET
Treasury Secretary Tim Geithner said Tuesday there is “no risk” the U.S. will lose its top credit rating amid a new analysis that revised its outlook on American debt to “negative.”
Geithner took to the airwaves of financial news networks to push back against a report Monday by Standard & Poor’s that lowered its outlook on U.S. debt to “negative,” reflecting political uncertainty over whether lawmakers will reach an agreement to address long-term debt.
In all fairness, nobody could have anticipated the Tea Party’s successful effort to destroy the Treasury’s AAA credit rating.
Mexico town’s police force quits after attack
By Ricardo Chavez
CIUDAD JUAREZ, Mexico (AP) — An entire 20-man police force resigned in a northern Mexican town after a series of attacks that killed the police chief and five officers over the last three months, state officials said Thursday.
The officers’ resignation Thursday left the 13,000 people of Ascension without local police services, Chihuahua state chief prosecutor Carlos Manuel Salas said. State and federal police have moved in to take over police work, he said.
The mass resignation appeared to be connected to a Tuesday attack by gunmen that killed three of the town’s officers, Salas said.
But it wasn’t the first deadly attack on the police department this year.
In mid-May, police chief Manuel Martinez, who had been in office just seven months, was gunned down with two other officers on a nearby highway. The three had been kidnapped a day before police found their bodies riddled with bullets in the back seat of a sedan.
It’s almost hard to believe that the Mexodus has actually slowed down.
DeMint: Geithner must go
By Peter Schroeder - 08/05/11 - The Hill
Sen. Jim DeMint (R-S.C.) responded to the nation’s downgrade at the hands of Standard & Poor’s by calling for the resignation of Treasury Secretary Timothy Geithner.
Saying “enough is enough,” the Tea Party favorite pressured President Obama to remove his top economic official and adopt a new perspective.
“The President should demand that Secretary Geithner resign and immediately replace him with someone who will help Washington focus on balancing our budget and allowing the private sector to create jobs,” he said in a statement. “For months he opposed all efforts to reduce the debt in return for a debt ceiling increase. His opposition to serious spending and debt reforms has been reckless and now the American people will pay the price.”
After S&P put the nation’s rating on negative watch back in April, Geithner said there was “no risk” the US would be downgraded.
“No risk of that, no risk,” he said at the time in an interview with Fox Business Network.
DeMint also blasted the recent deal reached by both parties to raise the debt limit, calling it “not a serious attempt to solve our spending and debt problem.”
“The deal Congress just passed over conservative objections has already had its obvious effect, the loss of America’s credibility around the world,” he said.
“The deal Congress just passed over $editionist$ con$ervative objection$ has already had its obvious effect, the loss of America’s credibility around the world,”
Ain’t that the truth!
““The deal Congress just passed over conservative objections has already had its obvious effect, the loss of America’s credibility around the world,” he said.”
The same ones that objected to Obama’s $4T plan. Spin it, DeMint!
WRAPUP 7-China tells US “good old days” of borrowing are over
NEW YORK/SHANGHAI, Aug 6 (Reuters) - China bluntly criticized the United States on Saturday one day after the superpower’s credit rating was downgraded, saying the “good old days” of borrowing were over.
Standard & Poor’s cut the U.S. long-term credit rating from top-tier AAA by a notch to AA-plus on Friday over concerns about the nation’s budget deficits and climbing debt burden.
China — the United States’ biggest creditor — said Washington only had itself to blame for its plight and called for a new stable global reserve currency.
“The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone,” China’s official Xinhua news agency said in a commentary.
After a week which saw $2.5 trillion wiped off global markets, the move deepened investors’ concerns of an impending recession in the United States and over the euro zone crisis.
Finance ministers and central bankers of the Group of Seven major industrialised nations will confer by telephone later on Saturday or on Sunday, a senior European diplomatic source said.
The source said the credit rating downgrade had added a global dimension on top of the euro zone debt issue, raising the need for international coordination.
“The G7 will confer by telephone. It’s not yet confirmed whether it will be in one stage or in two stages, tonight and tomorrow,” the source said.
French Finance Minister Francois Baroin, who would chair such a meeting under France’s G7 and G20 presidency, said it was too early to say whether there would be an early G7 gathering.
In the Xinhua commentary, China scorned the United States for its “debt addiction” and “short sighted” political wrangling.
“China, the largest creditor of the world’s sole superpower, has every right now to demand the United States address its structural debt problems and ensure the safety of China’s dollar assets,” it said.
It urged the United States to cut military and social welfare expenditure. Further credit downgrades would very likely undermine the world economic recovery and trigger new rounds of financial turmoil, it said.
“International supervision over the issue of U.S. dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country,” Xinhua said.
So, is S&P now bought and paid for by China Inc? Does China not realize that if we stop borrowing, we have to stop buying their stuff?
China scorned the United States for its “debt addiction” and “short sighted” political wrangling.
“China, the largest creditor of the world’s sole superpower, has every right now to demand the United States address its [7th Fleet] structural debt problems and ensure the safety of China’s
dollar assets, Sovereign right to access Middle -East oil for the same price as the U$A” it said.$am Walton & Patriotic American family member$:
1. “These f@!king Guys!,” Jon Stewart.
2. Eyes don’t give a sheeeeeeeeeyat!
This raises an interesting question. Just because the debt ceiling is raised will anyone still be dumb enough to loan us money.
I rather suspect Chinese debt is secured in some way, perhaps by Federally owned land, but there comes a point where it is imprudent to continue loaning money when there is reason to believe that money may not be repaid.
It is secured by the ‘full faith and credit’ of the US government, nothing more.
Home ownership hits lowest level since 1965
NEW YORK (CNNMoney) — As the foreclosure crisis continues to wreak havoc on the housing market, a source of national pride has taken a sour turn. Home ownership is on the decline and, according to a recent Morgan Stanley report, the United States is fast becoming a nation of renters.
Last Friday, the Census Bureau reported that the percentage of people who owned a home had dropped to 65.9% during the second quarter — its lowest level since the first quarter of 1998 and a far cry from the high of 69.2% reached in late 2004.
Yet, in a research paper issued a week earlier, Morgan Stanley (MS, Fortune 500) analysts Oliver Chang, Vishwanath Tirupattur and James Egan argued that the home ownership rate is even lower than the Census Bureau statistics say.
In fact, once they factored in delinquent mortgage borrowers (the ones who are likely to lose their homes at some point), Morgan Stanley calculated that the home ownership rate is more like 59.2%.
That’s the lowest level since the Census Bureau started keeping quarterly records back in 1965 (before that, it recorded home ownership rates once a decade). The Census Bureau’s statistics, however, do not factor in mortgage delinquencies.
Responsible homeowners left out in the cold
“The combination of falling home prices, limited mortgage credit, continued liquidations, and better rental options is fundamentally changing the way Americans live,” the analysts said. “We believe this change is only beginning and is moving the country towards becoming a rentership society.”
Many people are still technically considered homeowners who occupy their homes, even though they no longer make their mortgage payments. These “homeowners” can squat for months or even years, because banks have been slow to process foreclosures in recent months.
In addition to the millions of people who have lost their homes to foreclosure, Morgan Stanley said that another reason for the decline in home ownership is that many of the people who would like to buy homes can’t get a mortgage.
Do they mention that “wishing prices” are too high?
Big Apple Restaurants files Chapter 11 bankruptcy
The Arizona Republic
Bill Johnson’s Big Apple Restaurants, a longtime string of five popular Phoenix eateries, has filed to reorganize in a Chapter 11 bankruptcy proceeding.
CEO Sherry Cameron said the 55-year-old business has suffered from declining sales and falling real-estate values as the Phoenix-area economy deteriorated.
“The steps we are taking now are to address current economic challenges in Phoenix,” Cameron said.
She said the company doesn’t contemplate closing any of its restaurants during the reorganization and will retain its approximately 200 employees.
“Day-to-day operations will not be impacted by this restructuring,” she said. “No layoffs or store closures are planned during the restructuring.”
According to the company’s petition, filed late Thursday with the U.S. Bankruptcy Court in Phoenix, Bill Johnson’s Restaurants Inc. has $5.64 million in assets and $1.89 million in liabilities. Of the debt, $1.57 million is said to be secured, $215,988 is unsecured and $98,210 owed to unsecured creditors with priority claims.
“This (Chapter 11 petition) allows us to restructure our debt in a market of declining sales and falling real-estate values,” Cameron said in a prepared statement.
Bill Johnson’s Big Apple was founded by Bill and Gene Johnson in 1956. Bill Johnson was a cowboy actor and stuntman who broadcast a radio show from the original restaurant at 3757 E. Van Buren St.
“In this case, not even the all-encompassing themes of orange and boobs could make this site profitable.”
Filed under: “Who stole the “Homemoaner$” ATM “TrueFinancialInnovation™” Machine?”
Hooters Casino files for bankruptcy:
Michael Francis, Gambling Examiner /August 3, 2011
On August 1, 2011, the Hooters Casino Hotel in Las Vegas filed for bankruptcy protection, in order to restructure its outstanding debts. 155 East Tropicana, LLC elected to file for bankruptcy amid ongoing debt problems.
The Chapter 11 filing comes after months of speculation of the casino’s fate amid a still-depressed Las Vegas real estate market. The casino is held independently of the Hooters chain of restaurants, which are owned by hooters of America, LLC.
The casino is currently facing total liabilities of approximately $100-500 million, with total assets in the neighborhood of $10-50 million.
The casino will continue to
operate[bounce along] as the debt is restructured and managementreorganized[repackaged]. For now, business will continue as usual. Like the now-defunct Hooters Air, however, the initial success quickly faded away under crushing debt.The Hooters Casino Hotel opened in 2006 during Super Bowl Weekend to much fanfare, but has consistently lost money in the years since. It is the sixth different casino or hotel incarnation to fail at the off-Strip site, following in the footsteps of the Paradise, Treasury, and San Remo resorts as well as a Howard Johnson.
I have included info about Lynn “the victim” Szymoniak that will not be a part of the ‘60 Minutes’ re-air show Sunday night.
‘60 Minutes’ to re-air show featuring Palm Beach County foreclosure case
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 12:27 p.m. Friday, Aug. 5, 2011
The CBS news show 60 Minutes will re-air a segment Sunday featuring a Palm Beach County homeowner fighting an allegedly fraudulent foreclosure that exposed the now infamous robo-signer Linda Green.
Palm Beach Gardens homeowner Lynn Szymoniak, whose foreclosure is highlighted in the show, said she approaches the re-airing with mixed feelings because she said lenders and politicians have largely ignored the evidence presented.
“By far, my overwhelming feeling four months later is anger mixed with renewed determination to speak the truth,” Szymoniak said. “I am very disturbed by the power of the banks.”
http://www.palmbeachpost.com/money/foreclosures/60-minutes-to-re-air-show-featuring-palm-1698955.html - -
Legal Description: HORSESHOE ACRES WEST REPL LOT 12 BLK 5
Apr-1998 10392/0989 $392,800 WARRANTY DEED SZYMONIAK LYNN E
Date/Time: 7/18/2001 09:36:59
Consideration: $220,000.00
Party 1: SZYMONIAK LYNN E
Party 2: FIRST UN NAT BK
Legal: HORSHOE AC W. RPL B5 L12 BL
Date/Time: 9/15/2004 17:18:11
Consideration: $270,269.69
Party 1: SZYMONIAK LYNN E
Party 2: WACHOVIA BANK NATIONAL ASSOCIATION
Legal: HORSHOE AC W. RPL B5 L12 BL
Date/Time: 1/3/2005 11:28:53
Consideration: $415,000.00
Party 1: SZYMONIAK LYNN E
Party 2: USA SMALL BUSINESS ADMINISTRATION
Legal: HORSHOE AC W. RPL B5 L12 BL
Date/Time: 2/15/2006 08:27:13
Consideration: $780,000.00
Party 1: SZYMONIAK LYNN E
Party 2: OPTION ONE MORTGAGE CORPORATION
Legal: HORSHOE AC W. RPL B5 L12 BL
Wow. $560K taken out in MEW.
Consumer borrowing up in June by most in 4 years
Borrowing jumped $15.5B in June; Americans lean on credit cards and loans as economy struggles
WASHINGTON (AP) — Americans borrowed more money in June than during any other month in nearly four years, relying on credit cards and loans to help get through a difficult economic stretch.
The Federal Reserve said Friday that consumers increased their borrowing by $15.5 billion in June. That’s the largest one-month gain since August 2007. And it is three times the amount that consumers borrowed in May.
The category that measures credit card use increased by $5.2 billion — the most for a single month since March 2008 and only the third gain since the financial crisis. A category that includes auto loans rose by $10.3 billion, the most since February.
Total consumer borrowing rose to a seasonally adjusted annual level of $2.45 trillion. That was 2.1 percent higher than the nearly four-year low of $2.39 trillion hit in September.
Borrowing is usually a sign of confidence in the economy. Consumers tend to take on more debt when they feel wealthier. But an increase in credit card debt could also signal that people are falling on harder times.
Americans have been struggling this year with high unemployment, scant raises and steep gas prices. For the first six months of the year, the economy grew at an annual rate of only 0.8 percent. That’s the weakest stretch since the recession officially ended.
While many consumers leaned on their credit cards in June, a separate report this week showed they cut spending that month for the first time in 20 months.
The “$500 loans” sign twirlers are becoming more ubiquitous lately.
There’s that “A” word again, wonder how the citizenry will react?
Italy to Eliminate Deficit in 2013 With Austerity
(Bloomberg)
Italy plans to accelerate its austerity and balance the budget ahead of schedule, Prime Minister Silvio Berlusconi said, seeking to prevent the country from becoming the next victim of Europe’s debt crisis as investors flee Italian bonds.
The moves may pave the way for the European Central Bank to try to bring down Italy’s borrowing costs by buying its bonds in secondary markets. The European Central Bank said Aug. 4 it would renew its bond-buying program.
“We are facing a very difficult situation in financial markets that requires a coordinated intervention by various states, above all the nations that share the euro,” Berlusconi said.
Italy will adopt a balanced-budget amendment, liberalize its labor market, and consider asset sales, Berlusconi and Finance Minister Giulio Tremonti said in a joint press conference in Rome yesterday.
While yields on Italian and Spanish debt fell yesterday, borrowing costs have surged since a July 21 European Union summit approved a new aid plan for Greece and measures to aid other euro-region countries before they need a bailout. The plan failed to end contagion from Europe’s debt crisis to the euro zone’s third- and fourth-largest economies.
Umberto Bossi, leader of Italy’s co-ruling Northern League party, said the ECB will start buying Italian bonds on Aug. 8, as part of an exchange for the new economic measures unveiled by Italy’s government yesterday, Ansa newswire reported.
When asked about the credit down grade, the Bernake said ” Means nothing, we don’t need no stinking credit. I have this thing called an electronic printing press. So F#ck S&P.”
Here comes QE3 to calm markets. The Bernanke put?
After a long time I tuned in Foxnews and CNN this morning to see how the presstitudes are spinning the S&P donwgrade. Big mistake, I tell you.
MSNBC - not even talking about it
CNN - More emphasis on the political infighting as the real cause of the downgrade not the debt itself.
Foxnews - Not worth mentioning. They had same old politicians with same old talking points from both side. Sickening.
Tomorrow the Sunday “news” talk shows (which I won’t be watching) will feature the usual talking heads intoning for the benefits of morons how the usual statist, corporatist “solutions” (i.e. bailouts) must be implemented immediately to stop the sky from falling. I’m astonished that rogue voices of truth like Dylan Ratigan and Rick Santelli are still allowed a forum on these corporatist propaganda outlets.
Faux News is beneath contempt, for the most part.
“Faux News is beneath contempt, for the most part.”
Ron Paul is talking about the donwgrade on Faux News right now.
I said for the most part. The empty-headed prattle by their eye-candy “analysts” being a case in point. But I’ll give them credit for airing stories that on the other MSM networks are immediately consigned to the memory hole.
http://www.foxnews.com/us/2011/08/06/hundreds-rampage-through-neighborhoods-surrounding-wisconsin-state-fair/
And they arrested a truck driver on Friday in Greenwich Ct. for allegedly carrying a handgun in his truck during his trip up Interstate 95.
“Hundreds of young people left the fairgrounds and made their way down to the surrounding neighborhoods, smashing car windows, throwing rocks and beating people who were leaving the fair.”
“Several people were punched in the face, a child was pushed to the ground, one woman required stitches and another will need surgery for her injuries.”
And the cops, as usual, were nowhere to be found.
sammy,
“…sickening…beneath contempt…but i’ll give them credit…” ???????????
And the cops, as usual, were nowhere to be found.
Is that surprising? All those guys do is run speed traps and write expensive tickets.
The other day a sherriff’s deputy almost ran me off the road as I was pulling over to let him pass as he chased a speeder. Since the guy in front of me didn’t pull over the cop cut me off as he switched lanes. I had to slam on the brakes to avoid the jerk.
http://www.thegatewaypundit.com/2011/08/hallalujah-100-youths-leave-church-picnic-to-riot-in-pittsburgh/
Seems like the rampaging “youth mobs” are happening with greater frequency. Oddly enough, they don’t seem to happen in places where its easy to get a concealed carry permit.
http://www.telegraph.co.uk/finance/financialcrisis/8685668/Standard-and-Poors-statement-US-credit-rating-could-be-cut-even-further.html
The big rating agencies have zero credibility in my book after their AAA ratings on toxic-waste MBSs sold to “investors” (bagholders), but this is finally a long-overdue shot across the bow in terms of calling the US out on its gross financial mismanagement. Funny how some dimwits are blaming the “tea baggers” when this house of cards has been decades in the making.
As various can kicking operations hit the end of the road the blame game will pick up speed.
…
Gotta blame it on something
Blame it on the rain
“Funny how some dimwits are blaming the “tea baggers” when this house of cards has been decades in the making.”
Convenient scapegoats. Is it possible that the Tea Party was set up by the Koch brothers to take the fall?
Probably 60% of the tea party people are manipulated dimwits. Republican operatives like Dick Armey and his Freedomworks outfit have oozed in to co-opt the overall movement, though plenty of the rank and file seem to be people that have woken up and recognize that the GOP is as bad as the Dems when it comes to running this country into the ground.
“Probably 60% of the tea party people are manipulated dimwits.”
Glad we at least have that squared away.
“Witnesses described the mobs as young African American teens. Milwaukee Aldermen Bob Donovan and Joe Dudzik released a bold statement on Friday about what they called a “deteriorating African American culture in our city,” Fox 6 News reported.”
Deteriorating? I don’t think things could get much worse. When their role models are “50 Cent” and “Game,” it’s curtains.
And NONE of them speak English either. I have been warning everyone for years this is what will happen when you force feed the kids gangsta Ebonics for English….
60% off
http://www.trulia.com/property/22055576-527-N-F-St-Lompoc-CA-93436?ecampaign=con_day_propertycomp_bk&eurl=www.trulia.com%2Fproperty%2F22055576-527-N-F-ST-LOMPOC-CA-93436
http://www.telegraph.co.uk/finance/financialcrisis/8686045/Saudi-stock-market-first-to-plunge-on-SandP-downgrade.html
Saudi market first to plunge on S&P downgrade, though being in the same neighborhood as Yemen, Syria and Iran can’t be helping matters any.
http://market-ticker.org/akcs-www?post=191576
And so it begins….
It’s well worth the read, folks.
I agree with a lot of the things he says, although i find the rant a bit over the top.
I especially agree with this:
“We must fix the health care system, not “Medicare” or “Medicaid.” I have written on this extensively and it features prominently in Leverage (the book) as well. This means an immediate end to the cost-shifting by providers, drug and device makers. It means an honest debate as to what, if anything, society owes people in this regard and that subsidy must be transparent and paid for with current tax revenues. If it cannot be, it cannot be provided. Period.”
(my bold)
Unfortunately, the “death panels” posturing took this off the table in the last go round.
When fiscal reality sets in and Grandma and Grandpa end up being dumped on their Boomer children, who thought it was their divinely-annointed right to have the State (i.e. future workers and taxpayers) take care of all of their needs and conveniences until they departed this world, something tells me much of the opposition to “death panels” is going to dissipate.
Oregon had a plan a few years ago that based coverage on a cost benefit analysis of treatment. High cost, low benefit health issues were not covered. I thought it was a great idea. Unfortunately, it got shot down in the courts.
I also agree with this:
“We must rebuild our labor force. This means wage and environmental parity tariffs. Yes, this means that Giganticus Corporatus will have a 15% pretax operating margin instead of 30% and its stock price will be $40 instead of $400. So what? There will be actual income generated by actual people here in the US building actual things instead of conspiring with one another on how to steal another $15,000 from a homeowner through serial refinance fees. The former is a productive enterprise; the latter legalized extortion and theft.”
(my bold)
I haven’t seen any details on implementation. How often are tariffs calculated? What are the criteria? Should there also be tariffs for intellectual property parity? Will China get around the tariffs by exporting to European shell companies? How do you deal with goods that have multiple countries of origin? It might be easier to have a flat tax on imports.
While I like the post in general, he has VERY pro-cyclical ideas, like:
“To bring the economy into balance debt must not grow faster than GDP. In a time when GDP is shrinking debt must shrink faster, not grow faster. This is basic exponential mathematics.”
I think there is room for some debt. It is, afterall, the seed money that fraction reserve banking multiplies into the money supply. And, in a shrinking economy, deficit spending is even more important as leverage comes down.
Perhaps something like “publically held debt should not exceed 25% of GPD except in times of economic recession, then debt shoud not exceed 50% of GDP. After a period of recesson ends and the debt exceds 25% of GDP, governemtn must run a surplus of at least the GDP growth rate until debt is returned to less than 25% of GDP.” And, but publically heald, I mean not the Fed and not the trust funds. If the Fed or trust funds hold the debt, we’re just paying the interest to ourselves.
Also, his rant on illeglas ignores what I see to be obvious. We turned a blind eye to illegal immigration to reverse the Baby Bust. Without illegal immigrants and their something like 10 million of children they have birthed since the 1970s, we would already be seeing a falling population. As of a 2009 study I found, there were 4 million minor children (0-18) with both of their parents are illegal immigrants. 5% of all minors in the USA had both of their parents as illegals. Those are just the ones since 1991 and excluding thsoe with only 1 illegal parent.
Immigrants, legal and illegal, are the SOLE reason that the number of live births rose form the Baby Bust lows of 3.2 million a year and out population is growing. Providing for the Baby Boomers will be much harder without those people, and the houseing crash will be much worse with something between 3 and 5 million more empty housing units.
Do I think we should use strict enforcement to get the illegals to self-deport? Yes. Is that going to cause even more problems that will need to be accounted for? Oh yeah!
Italy has long road to avoid financial collapse
By ALESSANDRA RIZZO The Associated Press
Posted: 12:51 p.m. Saturday, Aug. 6, 2011
ROME — Premier Silvio Berlusconi faces a tough battle and likely opposition from political rivals and some unions if he is to enforce measures aimed at avoiding Italy’s financial collapse and boosting the country’s stagnant economy.
While the new moves announced Friday by the government were welcomed by some analysts, others criticized the measures to spur growth as too vague and some in the opposition demanded a change of government — an option Berlusconi dismisses.
“In a month, the world has changed,” Finance Minister Giulio Tremonti said in announcing the measures alongside Berlusconi on Friday evening.
Italy’s debt is among the highest in the eurozone at nearly 120 percent of GDP, but poor growth is viewed by many as he overriding issue. Italy is expected to grow only by 1 percent this year, according to some estimates.
“In the case of the labor-market reform, it is not difficult to foresee a complicated journey and one that will potentially be divisive for unions,” said Saturday’s financial daily Il Sole 24 Ore.
The leader of the largest Italian labor confederation, Susanna Camusso, wasted no time in criticizing of the new measures. “To move forward the measure means to destroy the country,” she said in a newspaper interview.
A few of us still watch TV and I am struck by the explosion of “As Seen on TV” products being shown during prime time on the cable networks. I am assuming the major advertisers have cut way back and the networks are falling back to these hucksters.
And so it goes.
Yeah. Paind programming used to be limited to 2AM-6Am, but some channels now what seems like half theri schedule full of paid programming.
The USA should launch an all out shale energy project that which would free it from massive deficits due to oil imports.
Shale oil recovery requires massive equipment investments, equipment that the US makes and is very capable in.
Alternative energy will never amount to enough to replace the oil/gas combo, but should still be pursued and assisted.
I also think a “Buy North America” campaign should be launched - this might help bring back some of our manufacturing.
Remember that the NA GDP is north of 15T/yr. That is a lot of purchasing power !
“I also think a “Buy North America” campaign should be launched ”
Do you think people will give up their beloved imports?
“Do you think people will give up their beloved imports”?
Little to do with “imports” most to do about price.
For junk, yes. And even then the prices we pay aren’t that much lower.
But try convincing a Japanese brand car owners to buy American. It doesn’t matter that Consumer Reports shows that American quality is rising and Japanese quality is falling. For them its Japanese or nothing.
Meanwhile Honda can’t seem to get the 5 speed automatic transmission it ships with its 3.5L engine to work right (it’s been problematic for 10 years). Honda has never issued a recall for that tranny, yet GM, which equipped 2004-2007 Saturn VUEs with the same gearbox has issued recalls. A coworker has a 5 year old Honda Pilot and the tranny is acting up big time. Needless to say he is very disappointed.
And yeah, some are assembled in the US and a few even have a high USA content, but most are still imported (and now we’ve added Korean brands to the mix).
Are those Honda built in America? I only buy if the VIN starts with a J. Like Acura or Mazda.
After we use up all that shale oil in less than 1 yr, then what? And did it take more energy to get it then it returned?
We need to learn to use less, that is the only answer for now. Carter warned us, we laughed.
Well what does a former NAVY nuclear engineer turned successful peanut farmer know about anything, anyway?
/sarcasm
Seriously AVACADO, he knew as did many others. But efficiency means less Wall St. profits. And that’s what REAGAN knew.
“Buy American” has been ongoing for 30 years. ABC News has a CONTINUING series on where and how to furnish your ENITRE house with American products that are the same price as anything made overseas and of BETTER quality.
But does anyone notice?
You can’t fix our kind of stupid. Ya jest cain’t.
Maybe people could stop driving oversized SUVs and pickups, and start walking or biking more.
I believe there is enough shale oil in the USA to consider it the largest repository of oil in the world.
Certainly true for natural gas.
Sounds easy enough to get at:
Shell Oil is currently developing an in situ conversion process (ICP). The process involves heating underground oil shale, using electric heaters placed in deep vertical holes drilled through a section of oil shale. The volume of oil shale is heated over a period of two to three years, until it reaches 650–700 °F, at which point oil is released from the shale. The released product is gathered in collection wells positioned within the heated zone.
What if it takes a barrel and a half of oil to get out a barrel from shale? Plus all the fresh water needed.
There is a good reason no one is going after shale oil.
“The USA should launch an all out shale energy project that which would free it from massive deficits due to oil imports.”
Energy is the first ingredient required for development. We have been buying that energy from the middle east region so that they don’t have it to develop their own economies, which will produce a greater threat for Israel. Their crude also requires less energy to process than shale, but I’m not sure about the costs when the political expenses are included.
Does anyone remember the waiting lines at gasoline stations in the seventies, and why there was an Arab oil embargo?
What U.S. citizen in their right mind would still be there anyway? I mean I’m sure there are some great vacation get-away packages available to Syria for the savvy traveler, just doesn’t seem like the prudent thing to do at this time.
ITEM: U.S. Urges Citizens to Leave Syria ‘Immediately’
August 06, 2011| NewsCore
The United States urged U.S. citizens Friday to depart Syria “immediately,” and noted that the Damascus government has placed “severe” constraints on the travel of U.S. diplomats in the country.
The travel warning, an update to an April 25 order for US embassy staff’s family members and some non-emergency personnel to leave Syria, expressed growing concern over the violent crackdown by President Bashar al Assad’s security forces against pro-democracy protesters.
Last month, pro-government demonstrators attacked the U.S. and French embassies in Damascus, smashing windows and spray-painting walls after the two Western envoys visited the flashpoint protest city of Hama.
“The U.S. Department of State urges U.S. citizens in Syria to depart immediately while commercial transportation is available,” the latest travel warning said.
Reporters haven’t been in there. I wonder who is? Aide workers?
Surprise! Arizona truck driver arrested for carrying gun
Lisa Chamoff, Staff Writer
Updated 10:46 p.m., Friday, August 5, 2011
A truck driver from Surprise, Ariz., was arrested by State Police on Friday in Greenwich for allegedly carrying a handgun in his truck during his trip up Interstate 95, state police said.
The driver, Christopher Zavarella, entered the Greenwich weigh station shortly after 11 a.m. for a routine inspection. A Taurus 9-mm handgun and ammunition were discovered in the passenger compartment of the tractor-trailer, which was registered in Arizona, according to police. The weapon was seized by a state trooper.
Zavarella, 43, of 15437 W. Christy Drive, Surprise, Ariz., was taken to State Police Troop G in Bridgeport and charged with carrying a weapon in a motor vehicle. He was released on $1,000 bond and is scheduled to appear in state Superior Court in Stamford on Aug. 19.
While Arizona’s gun laws are among the most lenient in the country, it is illegal to carry a gun in this state without a valid Connecticut pistol permit, said Lt. J. Paul Vance, a state police spokesman.
http://www.greenwichtime.com/news/article/Surprise-Arizona-truck-driver-arrested-for-1744065.php - -
Stop anyone with a gun but ignore illegals.
LAWSUIT!
Ridiculous. In the current climate of rising criminality and cops nowhere to be found if you actually need one, law-abiding citizens shouldn’t be harrassed and prosecuted for doing what they need to do to protect themselves.
“it is illegal to carry a gun in this state without a valid Connecticut pistol permit”
So he needs to get a permit in every state that requires one. I wonder how much that costs. If I were him, I would not take any runs to Connecticut again.
Went last year, loved the knife juggler from Remax….
The Realtors Got Talent Variety Show
QUINCY —
A group of local Realtors is looking for talented people to perform in a September show to raise money to build homes for disabled veterans.
The show, modeled after the TV program America’s Got Talent, welcomes singers, dance troupes, musical performances, comedy acts and dramatic acts. Contestants do not need to be professionals.
There is no cost to perform in the show, to be held at the Oak Point Grand Ballroom in Middleboro. Tickets are $20
Read more: http://www.patriotledger.com/archive/x1510865145/Realtors-to-raise-money-for-disabled-veterans#ixzz1UH1TbL00
Oh Tim…
GOP’s new reps pocket perks
Fresh-faced GOP state lawmakers — who vowed to upend Beacon Hill after they were elected in a 2010 vote-the-bums-out tide — are already cashing in on plum legislative perks, gobbling up more than $15,000 in travel stipends just halfway through their first year in office, a Herald review found.
“I wanted to send new faces up there to shake things up and buck the system,” said Tim Bonin, co-founder of the Blackstone Valley Tea Party. “We hoped they would lead by example and shun these perks, because there are an awful lot of people out there who are out of work or don’t get paid to go to work.”
Rep. Richard Bastien, a Gardner Republican, slammed inflated legislative salaries when he campaigned and promised to cut them by 10 percent. But he had no trouble pocketing the stipends that have boosted his salary by $3,420 so far this year — more than 5 percent of his salary.
“I don’t think it’s at odds,” Bastien told the Herald, saying he is still pushing for a 10 percent pay cut for all lawmakers. “I pay more than the representatives from Boston to get to work, so essentially this puts us all on a level playing field.
http://www.bostonherald.com/news/politics/view.bg?articleid=1356773
Gardner is about 60 miles from Boston. I’ll bet there are people that commute from there every day and don’t get reimbursed.
The farthest place in Massachussetts is about 160 miles - either Alander in the southwest or White Oaks in the Northwest.
Lawyer rips off client in short sale:
http://www.tampabay.com/news/humaninterest/article1184632.ece
http://www.realclearpolitics.com/articles/2011/07/29/its_the_elderly_stupid_110761.html
It’s the elderly, stupid. (Time for the Boomers to realize that no, they AREN’T entitled to endless care and benefits that younger workers have to pay for).
While I agree with his premise, he too misses the point. We are borrowing 45 cents of every dollar we are spending. $2.1T in and $3.8T out for a $1.7T deficit.
Even if we cut SS and MC/C in half, from $1.5T to only $0.7T, that is still only half the deficit, and there is simply no way the cuts will be that large. No way in heck. 10-20% is politically unacceptable. 50%? Not going to happen.
Even if we cut SS and MC/C 50%, we still need to cut defense 50% TOO!!!
So, even at this year’s budget, it is not a choice of entitlement reform OR disarmament. It is a choice of “higher taxes, entitlement reform, disarmament, AND trade war to plug our trade deficits” OR “hyper inflation, national insolvancy, and then entitlement reform and disarmament”.
As the number of age 65 and over increases (anywhere between 50% and 70% depending on what number you care to use) over the next decade, even 50% cuts to SS/MC?C AND DoD are not going to be sufficient to keep our budget in balanced unless we also increase taxes, increase wages of the middle class to broaden participation, and plug those pesky trade deficits that have brought us to this point.
If the cost of living dropped 50% it wouldn’t be such a big deal. Let’s start w/housing. Next let’s go after medical/insurance/big pharma.
If the cost of living dropped 50%, tax receipts would drop 50%, putitng us right back in a 50% deicit and requiring another 50% cut in spedning to again fail to balance the budget on cuts alone. in the mnean time, all the debt would default and peope would be back to the barter system.
You’re right. There’s that deflationary spiral again. It’s almost like we can’t get away from it. ; )
Wait!!! But I thought the plan was to default.
So, er, no need to raise taxes?!?
The Tea Party is already trying to disown the havoc they inflicted on the U.S. credit rating.
Bachmann: Obama Destroyed U.S. Credit Rating, Should Fire
Treasury Secretary Geithner
Published August 05, 2011
Special Guests: Rep. Michele Bachmann
…
You remind me of a person who sees a house destroyed by a fire, smoke all around and he also sees a small crack in the wall and concludes, yup it’s the crack that destroyed the house.
On another note, that’s the democratic talking point. Racists, terrorists and now the destroyer of the pristine credit rating. Pristine? Thanks for a good laugh.
What’s creepy is how people like Joe Biden are throwing the word “terrorist” around to describe anyone who won’t go along with their fiscal recklessness. How long will it be before anyone who expresses legitimate, peaceful and Constitutionally protected opposition to TPTB finds themselves labeled a terrorist, an extremist, a seditionist, etc. and ends up on a McCarthy-style blacklist?
the tea party has influence in the house, none in the senate and none in the white house.
you guys are blaming the tea party for not creating jobs and destroying the credit rating, yet they have now power, yet.
your balanced approach is a farce. we have had both high and low levels of taxation yet we fail to exceed 20% of GDP no matter what the level.
obama quickly got our spending to 25% and raising taxes isn’t going to cover that nothing will but cuts back to 20% or lower.
I’d say the economic problems we now face are proximately due to W cutting taxes on the wealthiest Americans around the time he started two wars.
The Tea Party isn’t to blame for much except for perhaps the credit ratings downgrade, and the likely future significant uptick in unemployment.
I only have about $15k in stocks, come Monday I am cashing out. I will keep my FXP which is short China.
Zimbabwe Salimba Estate AA+
I think I found the formula credit rating agency Standard & Poor’s used to lower the nation’s AAA rating for the first time since granting it in 1917.
Example:
Step 1: 34″ under measurement +4″ = 38″ band
Step 2: 40″ over measurement
Step 3: 40″ - 38″ = 2″ or Cup “B”
Your size would be 38B
If The Difference Is: Your Standard Cup Size Is:
0″-1/2″ (1.3 cm) AA
1/2″- 1″ (2.6 cm) A
2″ (5.1 cm) B
3″ (7.6 cm) C
4″ (10.2 cm) D
5″ (12.7 cm) DD or E
6″ (15.2 cm) DDD or F
Without AC - 88 in the house. AC dead.
Not $5k out of my pocket.
Oh you poor lowly renter, that landlord of yours is a real jerk letting you suffer like this….SUE HIM MONDAY!!!
Window or self standing room units?
The AC guy came out and clean off the coils, but about 1/3 of the simply disintegrated. He said it should make it until Monday, but he pop in a temporary unit if need be. The owners/prop. manager have already agreed to a new one, but won’t be able get it all together tomorrow. No biggy. We’ve got it down to 80 and we’ve got fans — we’ll survive, but holy jeebus how can anyone live here without AC?
Dang - I like the house we’re in (a lot), but in one year we’ve had two major issues that would have cost around a total of $8k (and that’s with ‘average’ fixes).
Nice reminders to the cost of pwnership.
http://endoftheamericandream.com/archives/the-looting-of-america-the-federal-reserve-made-16-trillion-in-secret-loans-to-their-bankster-friends-and-the-media-is-ignoring-the-eye-popping-corruption-that-has-been-uncovered
How the Federal Reserve made 16 TRILLION in secret loans to their bankster accomplices, and how the MSM has maintained a reporting blackout on the corruption uncovered in connection with these loans.
This is what I mean about feeling powerless. At least in other countries people are getting angry. Where will this end? With a Communist Reaissance?
I am so tired of listening to talking heads speak of ss or medicare being too expensive w/absolutely no reference to the amount of toxic assets our government purchased from the banks at full 2007 (assumed) market price in an attempt to rescue them. No talk of the losses being experienced on the public’s dime when these assets are sold for an incredibly lower amount.
Mourdock’s Reaction to S&P Downgrade: Fire Geithner
INDIANAPOLIS, Aug. 6, 2011 /PRNewswire/ — IN State Treasurer Richard Mourdock, US Senate Candidate running against 35 year incumbent Senator Dick Lugar in the 2012 Republican Primary, reacted to the historic news that Standard & Poor’s (S&P) downgraded the United States’ long-term debt, which highlights an overall concern about the financial health of our country.
“The downgrade by S&P of our debt from ‘AAA’ to’ AA+’ is a serious event that will impact all Americans. Financial markets will open Monday to see the United States with a credit rating of less than ‘AAA’ for the first time ever. How the markets will respond is impossible to predict.
“This downgrade is the direct result of raising the debt limit on Tuesday, August 2, without providing for substantive cuts in spending. The White House and many in Congress failed in their jobs by settling for a political compromise rather than seeking a fiscal resolution. They avoided the tough decisions on real cuts in spending by simple kicking ‘the tin can of responsibility’ further down the road. The downgrade reminds us that failing to act has consequences. Of no surprise to many Hoosiers, Dick Lugar was counted among the majority of Senators who agreed to the debt-ceiling compromise that was quickly signed by President Obama.
“President Obama should fire U.S. Secretary of the Treasury Tim Geithner over the debt downgrade. If Obama won’t remove him, then the US Senate should withdraw its consent of Geithner’s appointment to U.S. Treasury because someone in the White House needs to be held responsible for this disaster.
“S&P’s downgrade illustrates its viewpoint of our entire economy, not just the government’s ability to pay its bills. In mandating its downgrade, S&P, in effect, is stating that they have less confidence in the United States’ economy to grow and recover in the long run. They believe the United States is losing the ability to create the wealth, which is the basis of the taxes the government needs to pay its bills.
“Perhaps there is a silver lining to this very dark cloud. The sound proposals offered in the Cut, Cap and Balance Plan can again be put on the table. This terrible situation might yet cause a Balanced Budget Amendment to be added to the United States Constitution.
“Moving forward, there will again be calls for ‘bi-partisanship’ to solve this latest fiasco. Let me be clear, we need less bi-partisanship and more conservative, fiscal principles in this on-going debate. Bi-partisanship has taken us to the brink of bankruptcy and now to our first ever financial downgrade.
“Conservatives have said for years that the federal government must be forced to live within its means. I take some consolation that S&P has now echoed our call.”
SOURCE Hoosiers for Richard Mourdock, Inc.
So now DeMint, Michelle Bachmann and this guy from Indiana are all saying that the president’s response to the downgrade should be to fire Geithner. Who came up with this idea, I wonder.
Who’s the mastermind feeding these great ideas to these wonderful public servants?
Good question.
” someone in the White House needs to be held responsible for this disaster. “
Bring out the Blamethrower!
http://blogs.telegraph.co.uk/news/nilegardiner/100099762/america%E2%80%99s-debt-downgrade-is-a-damning-indictment-of-president-obama%E2%80%99s-big-government-disaster/
As usual, you have to go to the foreign press to get a cogent analysis of S&P’s downgrade of the US and its indictment of the big-government disaster that is the Obama Administration.
What a steaming pile of horse dung.
When the deficits exploded under Bush, the problem was rightly blamed as a massive drop in revenue. When revenue crashed under Obama becasue of a collapse that was fully underway when he took office, all of it is his fault?
So, he extended the Bush wars and executed the Republican’s surge plan. Yeah, all his fault.
The stimulus was moer than 40% spending cuts, but unlike the Bush tax cuts, these were mostly done with credit, which through the insane political accounting system taxes not collected are considered expenses if they are credits.
Would we really be in that much better of condition had we allowed the 750K and accelerating job losses that he inherited from Bush continued?
Sure, Obama is not publically admitting that he wants mass cuts for SS and MC/C. But behind closed doors, that is what is on the table. In exchage for the politcal heat he’ll take on tehat, he wants the Republicans to agree to cuts to DoD and some revenue increases by cutting deductions and lowering rates but not enough to be revenue neutral. It is the Republicans that walked out on Obama and his $4T plan and the similar plan of teh Gang of 6.
The republicans squak of balanced budget, but they refuse to admit the truely massive spending cuts that would require without revenue increases.
This is the end result of Reagonomics… deregulating banking and getting the debt flowing. 30 years of business and household dent increasing at 3x the rate of inflation as we borrowed ourselves rich to leive above our means as we off-shored our industrail base.
You can not lay the blame for 30 years of failed economic policy on the guy that has been in office for only 30 months, with 7 of that with a hostile House of Representatives that have openly stated that their #1 priority is making him a 1-term president.
Is their #1 goal fixing the economy? Jobs? Passng a compromise bill that raises taxes and cuts spending on teh magnitude needed to avoid this downgrade?
Nope. Their #1 goal is insuring Obama does not get reelected.
yeah… it is all his fault. BS!!!!!
That little rant is pretty biased. I wonder who you voted for?
I could pick it apart, and I’m not a Republican. I’ll just say I wish the Dems had stood up to Bush instead of letting him run roughshod over our rights and the brown people he wanted to kill. Anyway, Obama’s toast now. It wouldn’t matter who is in office, with the economy the way it is, he couldn’t beat my cat.
Saw 30 plus guys got killed in Afghanistan last night. The White House is really pushing to stay in Iraq. Drones killing people in who knows how many countries anymore. Guantanamo, torture, assassinations of anyone he chooses! I can’t tell the difference from that war-monger McCain. And that’s not even going into the house-hoarding banks he’s protecting. Obama said he would rather be a good one term president than a mediocre two term president. Looks like he’s going down as a terrible one term president. And what do those of us that just want good govt have to hope for? Tweedle dee or dumb.
“It wouldn’t matter who is in office, with the economy the way it is, he couldn’t beat my cat.”
Great insight.
Bush probably beats out Jimmy Carter as our worst president ever. But Obama may yet claim the crown. Obama inherited a mess and made it much worse by letting Bush’s Goldman Sachs economic team remain more or less intact. But basically, Bush and Obama are the same guy, as far as policy goes.
http://www.naturalnews.com/033222_raw_food_conspiracy.html
Citizens of Los Angeles, you can sleep sounder in your beds tonight. Three menaces to society (no, not ten-year-old lemonade stand girls) have been apprehended by armed SWAT teams and their evil enterprises raided. Meanwhile, not a single member of the Federal Reserve-Wall Street looting syndicate responsible for the 2008 crash (and the next one) has been charged with any criminal wrongdoing.
Long live the police state.
http://news.yahoo.com/250-000-israelis-protest-high-cost-living-191808367.html
The “Arab Spring” spreads to Israel. Imagine having a middle class that stands up for itself instead of mindlessly perpetuating the status quo.
http://www.guardian.co.uk/world/2011/aug/06/police-cars-attacked-tottenham-mark-duggan
Just what Europe and the UK need right now: urban riots.
I was going to joke about the locals being displeased with the Hotspurs, until I read the article:
Earlier in the day members of a community where a young man was shot dead by police had took to the streets to demand “justice”.
So much for Brit cops not using deadly force. I haven’t been to London since 2000, but back then I saw a lot of cops packing a gun.
Anyone talking about the German’s commentary of the Italian debt being too big to bail?
I’d provide the link but I don’t think it’s allowing my post to clear the filters. If anyone speaks German, I think it originated on Spiegel.
Any thoughts?
4455 River Pines CT Jupiter, FL 33469
$218,999
Beds:4 Bed
Baths:3 Bath
House Size:2,830 Sq Ft
Lot Size:0.33 Acres
MLS ID R3214667
Days on site 5 days
A sobering little story to end the day
http://www.startribune.com/opinion/otherviews/126619568.html
I do have to wonder why exactly it is that so many in the media take the ratings agencies so seriously. They were marking junk mortgage loans as extremely reliable.
They are certainly indicator of some sort. I realize in the debt markets they create labels that investors crave, so fund manages and vendors try to get these labels.
My impression is that these companies are just another player in Wall Street, and don’t have any special insight or information.
World War Three:
What if the next “big one” did not involve bombs or guns or invasions or occupation? What if an era of extreme protectionism evolved and the country with the least debt won? What if the war was well into the first phase before anyone really knew it? What if you and I already lost because of the irrsponsibility of others?
Who needs weapons when everbody starves to death.
The Financial Times
August 5, 2011 7:11 pm
Five days from debt deal to disaster
By Jennifer Hughes, Senior Markets Correspondent
Monday: US debt deal relief illusory
Barack Obama’s hopes of a boost from the political deal to raise the US debt ceiling evaporate. Wall Street fails to rally, an ominous signal. Rather than buy stocks in relief, investors decide that the emphasis on spending cuts, rather than raising revenues, increases the odds of a “double-dip” recession.
…
Tuesday: eurozone crisis to the fore
…
Wednesday: the tipping point
…
Thursday: shares plunge
…
Friday: Little relief. Asian stocks follow Wall Street’s lead and European bourses track their counterparts.
Markets rally when closely watched US employment numbers prove better than feared, but soon fall back.
“Plan A is to see the ECB pumping money into Spain and Italy but the chances of that are non-existent,” says a senior debt banker. “Plan B is to get the politicians around the table and from what we’ve seen in the US, their appetite for brinkmanship is substantially higher than the markets are willing to accept.”
Got contagion?
7 August 2011 Last updated at 03:48 ET
Emergency talks called to calm global markets turmoil
Chinese investor at stock exchange in Anhui province.
5 Aug 2011
World leaders fear more turmoil when markets reopen on Monday
The European Central Bank is due to hold emergency talks on whether to start buying Italian debt to contain spreading turmoil on financial markets.
The BBC’s Business Editor Robert Peston says the ECB is split on the move.
Growing worries over debt in the eurozone and the US caused sharp falls on world stock exchanges last week.
Finance ministers from the G7 major economic powers are also to hold emergency talks on how to calm the markets before they reopen on Monday.
Italy is the latest and biggest economy to be hit by the eurozone crisis.
The price Italy pays on its government bonds has shot up amid growing doubts it can keep its debt level so high while economic growth is so slow.
Spain, too, has been caught up in the crisis - hammered by high unemployment, high government debt and anaemic growth.
The high levels of debt coupled with low growth and an uncertain response among eurozone leaders to the situation has sparked fears that both countries could become engulfed in the same cycle which has led to Greece, the Irish Republic and Portugal already being bailed out.
…
U.S. credit downgrade unlikely to fix logjam in Congress
Financial markets are not expected to react dramatically enough to provoke politicians in Washington to compromise and reduce the national debt.
By Jim Puzzanghera, Los Angeles Times
August 6, 2011, 6:14 p.m.
Reporting from Washington—
The historic decision by Standard & Poor’s to downgrade the U.S. credit rating may provoke some havoc in financial markets this week, but it’s unlikely to deliver the shock necessary to prod Washington politicians to take the unpopular steps required to cut the nation’s debt.
In criticizing an increasingly dysfunctional Congress riven by deep partisan divides, S&P also put a spotlight on a credit ratings industry whose miscalculations helped trigger the 2008 financial crisis.
A key to the political effects of the downgrade will be the reaction of financial markets Monday.
Yet the markets might barely shudder, analysts said, partly because S&P damaged its credibility with its miscalculation of subprime mortgage risk during the housing boom. Besides, two other major agencies continued their top ratings of U.S. debt, at least for now, and investors worldwide still flocked to U.S. Treasury bonds as safe havens.
“The markets instill discipline on politicians and governments. It’s got to be a scarier reaction than we’re likely to see,” said Chris Rupkey, chief financial economist at the Bank of Tokyo-Mitsubishi in New York. “There’s too much disagreement at this stage.”
Still, the humbling message it sent about the finances of the world’s superpower is a marker for the depths of the U.S. budget problems and the inability of Washington to rise above politics to solve it.
Wall Street executives, Washington policymakers and world leaders moved quickly to stem the reaction. On Saturday, they began grappling with S&P’s decision to lower the rating a notch on long-term U.S. debt to AA+ from the top-level AAA.
The Chinese government, the largest foreign holder of U.S. debt, reacted strongly, saying the country needed to “learn to live within its means.” Leaders worldwide set up conference calls Saturday and Sunday to discuss the ramifications of the downgrade in light of the ongoing European debt crisis that helped spark Thursday’s stock market meltdown.
Treasury officials were talking to a wide range of investors to try to mitigate any short-term negative effects.
Wall Street firms expect investors to make a run for safety when the Asian markets open Sunday night and U.S. markets open the next morning, but few are predicting anything close to a catastrophe.
“It’s more kind of psychological than anything else,” said a person at one Wall Street firm, who requested anonymity because of the sensitivity of the financial situation.
…
U.S. downgrade heightens anxiety, if not interest rates
11:00 PM, Aug. 6, 2011
Written by
The Associated Press
WASHINGTON — The real danger from the downgrade of U.S. government debt by Standard & Poor’s isn’t higher interest rates. It’s the hit to the nation’s fragile economic psyche and rattled financial markets.
S&P’s decision to strip the U.S. of its sterling AAA credit rating for the first time and move it down one notch, to AA+, deals a blow to the confidence of consumers and businesses at a dangerous time, economists say.
The agency is “striking at the heart of what makes the global economy tick,” says Chris Rupkey, chief financial economists for the Bank of Tokyo-Mitsubishi UFJ. “It isn’t just dollars and cents.”
One economist, Paul Dales of Capital Economics, worried Saturday that the downgrade could even trigger another financial crisis that sends Western economies back into a recession. The timing could hardly be worse for the U.S. The economy added 117,000 jobs in July, more than expected. But other economic indicators, including manufacturing, consumer spending and overall growth, are getting weaker. And the markets just came through their most harrowing two weeks since the financial crisis of 2008. The Dow lost about 10 percent of its value on fears of a new recession and Europe’s spiraling financial problems.
In normal times, in another country, a downgrade in a country’s sovereign debt rating probably would force its government to pay higher interest rates to convince investors to keep buying its debt.
If that happened, it would drive up the rates that consumers pay on mortgages and auto loans, which are often tied to the government’s interest rate.
But the United States is a special case. Treasury debt is considered the safest investment in the world — even after the downgrade. Investors don’t doubt the U.S. government’s ability to repay the $9.8 trillion it owes.
They also know they can easily buy and sell Treasury bills, notes and bonds. Rupkey calls Treasurys the “strongest, deepest, most liquid” market in the world.
…
The Wall Street Journal
BUSINESS
AUGUST 5, 2011
New Fee to Bank Cash
By LIZ RAPPAPORT
Bank of New York Mellon Corp. on Thursday took the extraordinary step of telling large clients it will charge them to hold cash.
Bank of New York Mellon is preparing to charge some large depositors to hold their cash, in the latest sign of the worries roiling global markets. Liz Rappaport has details.
The unusual move means some U.S. depositors will have to pay to keep big chunks of money in a bank, marking a stark new phase of the long-running global financial crisis.
The shift is also emblematic of the strains plaguing the U.S. economy. Fearful corporations and investors have been socking away cash in their bank accounts rather than put it into even the safest investments.
The giant bank, which specializes in handling funds for financial institutions and corporations, will begin assessing a fee next week on customers that have been flooding the bank with dollars, Bank of New York told clients in a note reviewed by The Wall Street Journal.
The decision won’t affect individual savers, who already are stuck with near zero interest rates as the Federal Reserve keeps rates low to support a soft economy. But it is a glaring sign that corporate executives, bank leaders and money-market fund managers are fleeing from risk and hoarding cash as the recovery.
…
Oops…
…
“…as the recovery threatens to peter out.”