Bits Bucket for August 9, 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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Today’s vignette comes to us from an FB who was bemoaning his inability to procure financing for a condo he was currently underwater on and wanted to short sale.
“Next time,” he says, “I’ll just put my money in the stock market. You can still lose a bundle, but at least you can sell with the click of a mouse.”
Ba Dum Pump.
Not realizing the most basic concept of economics. Every transaction must have both a buyer and a seller.
Yes, stocks are usually more liquid than housing, until the trading curbs go into effect. Of course, the loads are much higher in a house than stocks. Housing is much harder to diversify.
“Housing is much harder to diversify.”
Too lumpy, too leveraged = bad investment.
Also too illiquid…
Liquid Asset
An asset that can be converted to cash quickly without having to reduce the asset’s price very much.
…
Lumpy Assets
Assests that cannot be acquired in small increments but must be obtained in large, discrete units.
Yesterday I saw a book title House Poor in the library, about people who spend too much income on housing.
Now, I thought that House Poor meant that you were cash rich but owned no house — ie a renter. The FB’s eating Ramen off the granite should be house rich and cash poor.
The FB’s eating Ramen off the granite should be house rich and cash poor.
The house made them poor.
There’s the homeless poor and the homed poor, I guess.
“I’ll just put my money in the stock market. You can still lose a bundle, but at least you can sell with the click of a mouse.”
Unless you are leveraged 40:1
Which brings up the myth that was being widely propagated during the boom about real estate being a safer, more stable investement because it can’t be bought and sold instantly. What was touted a plus turns out to be the achilles heel of the investment. Illiquid assets suck.
Illiquid, lumpy, highly-leveraged, deeply underwater assets whose owners are in contractual default on their mortgages really suck! And we really do have a lot of those!!
Alot of Donald Chumps out there.
illiquidity’s a bitch!
Hey, everybody. I’m back. Gee, go away for a few weeks and look what happens. At least I’m pretty sure you weren’t all bored while I was gone.
Oh, and the Vancouver aquarium is amazing.
Here’s a shout out to aNYCDJ. I heard my first zydeco band last week. Really moving music!
Saw CJ Chenier last Friday night. Unbelievably good!!!
http://www.chinook-helicopter.com/Unique_Loads/Tax_dollars_at_work_b_master.jpg
Stand by for Helicopter Ben and QE 3, to be followed by hyperinflation. Any hopium-based boost to the markets (which, after all, are so much more important than the nation itself) will be short-lived.
Interesting, especially in the context of what QE1 and QE2 (and numerous unnamed easings) have brought us.
More unemployment.
Collapsing RE markets.
Lower wages.
Legions on SNAP.
Government layoffs.
Cancelled projects.
Business failures.
Bank valuations dropping.
The word Austerity.
Aint money-printing grand!
Don’t forget:
Bumper Profits and Bonuses at Goldman Sachs and friends
+10, because that’s what this hokey pokey is all about.
Blue, don’t you think we would have gotten most of that with or without QE1 & QE2?
Of course, and more to come despite any more QEs. The real economy is still sliding down and the Fed $$$s are just trying to plug the leaky banks. Things at my level will not improve until we do something to bring jobs back here.
We’d need a true dictator in the White House to get hyperinflation. JMO.
And speaking of leaky banks, I wonder if BAC or Citi action will be the segue to QEIII introduction. Not talking about what we saw yesterday. I’m thinking more like what’s probably to come that will be all the worse after what we saw yesterday.
Bernake still hasn’t managed to get money into the hands of consumers. Hyperinflation can’t happen until everyone starts getting 20+% raises.
Until then we can have hyper depravation.
Steve J, I think companies will make up that 20% by outsourcing more and laying off more. They hope to get by just long enough for another bailout or until they can develop a foreign market for their products. Neither will happen, not in time.
duration duration duration. This sucker’s goin’ down.
The problem of course is that any stimulation from increased Fed Gov spending was offset by falling state and local gov spending and Fed stimulus money is gone. Gov now is looking at cutting not stimulating. Wealth continues to be concentrated in this country due to trade, regulation, and tax policy.The wealthy are not spending or investing here, almost everyone else will continue to get poorer.
They’re “spreading the wealth” all right, just overseas.
Interesting, especially in the context of what QE1 and QE2 (and numerous unnamed easings) have brought us.
Ah, but it fattened the Swiss bank accounts of a lot of plutocrats and Republicrat patrons. That’s what’s important here.
“QE 3″
Seems like the table is set now. Good luck to retirees and anyone else dependent on fixed income streams at not having your wealth inflated out from under you, as happened in the late-1970s.
Good luck anybody who is not directly connected in some way to the giant Teat that has become the USA.
“Good luck to retirees and anyone else dependent on fixed income streams at not having your wealth inflated out from under you, as happened in the late-1970s.”
PB, if you really believe that such inflation is imminent, shouldn’t you be buying as much RE as you can manage?
Because housing is already inflated. The “imminent” inflation would just catch up to housing. And the old advice about inflation doesn’t work. In a global economy, there is no wage inflation.
There is still wage inflation, it’s just in the countries with the lowest wages.
Americanus Obesitus is too dense to make the connection between money-printing and hyperinflation. All he cares about is watching his 401(k) go up, even if it’s in Zimbabwe Ben greenbacks.
“Good luck to retirees and anyone else dependent on fixed income streams at not having your wealth inflated out from under you, as happened in the late-1970s.”
I think the danger for fixed-incomers does not lie in having their buying power yanked away via inflation but instead the danger lies in having their fixed income yanked away via deflation.
Pensions, Social Security, etc. are underfunded, which suggests to me that there will be major cuts in distributions.
Stand by for Helicopter Ben and QE 3, to be followed by hyperinflation.
I don’t know if we’ll get “hyperinflation” (a la Weimar or Zimbabwe) from QE3. Inflation will get worse, especially in needs, but I don’t thing we’ll get to hyperinflation yet. I guess it does depend on many many dollars they conjure out of thin air, which will depend on how many treasuries that have to buy and how many banks need to get bailed out (again). BofA might merely be the tip of the iceberg.
I can definitely see $5 gas as a result (got F-350?).
That’s a cool photo, but it has to be a photoshop job because aircraft don’t fly with unsecured loads that could shift and cause a “weight and balance” issue.
“Data released today by the Corporation for National and Community Service show that 41 percent of Rochester-area residents born between 1946 and 1964 are volunteers in some capacity, a tally that put Rochester on top of the 51-city survey.”
http://www.democratandchronicle.com/article/20110809/NEWS01/108090326
May I humbly suggest that low house prices drive this?
I just finished a two-week vacation up there and it amazes me how many people go about enjoying their lives with little thought to what is going on elsewhere (sometimes in a bad way, but in this case a good way).
Wall Street is melting down? No bother, I have bowling league on Tuesday nights.
I do think the optimism is higher here than elsewhere. I think collectively the area has convinced itself “it’s different here” so even the global stuff isn’t frightening them so much.
Whether that’s true or not appears to be seen.
I guess my whole approach to this has been that because they haven’t taken the deep interim hits of other areas yet, when the US defaults and liquidity starts to dry up what comes at them will be all the more shocking to their psyche.
People “know” what’s happening. They can discuss much of what has happened w/you. It’s just hasn’t sunk into their decision making. W/o the associated pain the info has not been fully processed.
Look Carrie we’ve had this conversation before. Upstate NY is a wasteland of clueless but harmless people. They are NOT thinkers. Anybody who was somebody left or leaves and seldom returns. What you have left is the hopelessly clueless who are most easily duped by anyone claiming to be an authority.
Upstate NY is a wasteland of clueless but harmless people. They are NOT thinkers.
That’s America in general. Look no further than the 2008 election results for your proof.
Wow RAL, I don’t even know what to say.
Don’t take it personal. Besides… you left just like I did.
“May I humbly suggest that low house prices drive this?”
I think you may be on to something. We rent for a hefty price, but it is still lower than mortgages on comparable properties; between us, my wife and I have volunteered in our community more than the average resident.
Low home prices support community volunteerism; I like that!
Agree. Low home prices –> low-level life –> community spirit.
Found out one more thing, most of the nice houses being built here in rural southern Poland are not being built for the locals. It’s money coming from the cities for houses that aren’t lived in most of the year. The ones being built by the same family right next to the very old house also owned by the same family are in the minority.
Vacation houses? Are they being paid for with cash or credit?
Your cash is someone elses debt. So, it is same, same.
Also, your debt is some else’s cash.
If you stiff him from what you owe him then he is the one who is left without, not you.
Yep. The people with money do not want to spend it. However, if they do not spend it, then the person in debt will default and the money will just poof.
So, bottom line, they are being built because there is a surplus of money flowing in from the outside?
Prices are not sustainable from internally generated cash flow but depend on cash flowing in from somewhere else?
Sounds familiar. Sounds like Vegas.
Phoenix too. An economy built on building houses for people that want to flip them but not live in them.
ISTR reading that, at the height of the housing bubble, one of every three dollars generated in the Phoenix economy was based on real estate.
Is the fact that the DAX is down twice as bad as the FTSE or the CAC a really ominious sign expressing lack of confidence in German ability to guarantee Eurodebt? Is there another reason I’m not aware of?
Exporters need customers?
And customers need money.
I think the realization set in that nobody will exit the EURO alive.
Germany has 2 options:
1. Backstop the PIIGS
2. Leave the EURO
Option 1 will lead to sure bankruptcy of Germany. There is absolutely no way Germany has the economic or financial means to backstop the rest of EURO-land. I think Germany is about 27% of GDP while the PIIGS make up about 34%. Other than Finland (2.5%) and Netherlands (7%) the remaining EURO countries are borderline PIIGS themselves. Like Belgium or France for example. Germany’s debt/GDP is 80%, so they are not in a really good position to begin with. It is only a matter of time before Germany will lose its AAA rating due to the crushing bailout demands by PIIGS. It’s really the bankers that get the money, none of the citizens in PIIGS countries is being bailed out or see any of that cash.
Option 2 will lead to an immediate banking crisis of monumental proportions world wide. Still, it would be preferable to the slow death under option #1.
Thanks Mike.
That was a really nice explanation.
When you see something like this I also wonder if investors are trying to send a message like “Don’t do it!!!!”
Just like in the US politicians will do what bankers demand. Of course no politicians wants the feces hitting the fan during their tenure. So they employ any possible can kicking operation to delay the inevitable at the cost of making the crisis so much worse.
Have cancer? Here’s a band aid. Any surgery would be too invasive and cause too much pain.
Freddie Mac reports 2Q loss, asks for $1.5B in aid
Freddie Mac reports $4.7B loss, says S&P downgrade will disrupt mortgage market
WASHINGTON (AP) — Government-controlled Freddie Mac requested $1.5 billion in additional federal aid Monday after posting a loss this spring. The mortgage giant also said Standard & Poor’s decision to lower its debt rating will cause “major disruptions” in the home-lending market.
Freddie Mac said it lost $4.7 billion, or $1.44 cents per share, in the April-June quarter. It compares with a loss of $6 billion, or $1.85 per share, during the same quarter in 2010.
The government rescued McLean, Va.-based Freddie Mac and sibling company Fannie Mae in September 2008 after massive losses on risky mortgages threatened to topple them. Since then, a government regulator has controlled their financial decisions.
Fannie and Freddie own or guarantee about half of all U.S. mortgages and nearly all new mortgage loans. The mortgage giants buy home loans from banks and other lenders, package them into bonds with a guarantee against default, and then sell them to investors around the world.
Taxpayers have spent roughly $150 billion to rescue Fannie and Freddie, the most expensive bailout of the 2008 financial crisis. The government estimates the final cost for rescuing the firms could go as high as $259 billion.
Standard & Poor’s cited the “direct reliance” on the U.S. government when it lowered Freddie and Fannie’s credit ratings on Monday, from AAA to AA+. That reflected the same downgrade S&P made of long-term U.S. government debt on Friday.
And they will get this money. And the next bailout. And the next…
U.S. Move to Cover Fannie, Freddie Losses Stirs Controversy
WSJ
Dec 28, 2009
By JAMES R. HAGERTY and JESSICA HOLZER
The Obama administration’s decision to cover an unlimited amount of losses at the mortgage-finance giants Fannie Mae and Freddie Mac over the next three years stirred controversy over the holiday.
The Treasury announced Thursday it was removing the caps that limited the amount of available capital to the companies to $200 billion each.
Why didn’t Rush get mad as this instead of the “government takeover” of GM? Weren’t Freddie and Fannie private sector just as much as GM was?
Let them go down and just add the loss on top of Mt. Debtmore. Not like it matters now…
How about they offer the BF’s a gentle bankruptcy to get out of the houses and set up a huge fire sale where FHA buyers get first dibs. Then charities, then FB’s, then investors. Cities get the leftovers for Section 8.
“Why didn’t rush get mad as this instead of ‘government takeover’ of GM?”
There is sure a lot of information about Rush Limbaugh on this message board from those who claim they don’t listen to him.
I used to listen to him a lot in 2009. In bits and pieces that i could handle. Don’t know if he’s changed his tune since them.
I think you could change your own brakes on your car. It’s not that difficult, and there are videos on youtube and google for answers when things aren’t going right.
Are you in a time warp, Mr. Beyatch?
And there is a lot of mindless rhetoric from those who claim they do listen to the Drugster.
“Weren’t Freddie and Fannie private sector just as much as GM was?”
i thought freddie and fannie were always quasi governmental entities.
if so then the answer to your question would be not…they were not just as much private sector as GM.
Why? I’ll tell you why. The answer is simple. Realtors Are Liars®
Why did I buy such a big house in a half-developed subdivision in the middle of nowhere?…
Why did I stretch every penny I had just so I didn’t lose the $8000 tax credit?
Why did we listen to Suzanne, honey? She never even finished high-school…
Yes. All those reasons why too. But the fundamental answer is…….
Realtors Are Liars®
Last night on CNBC
…yes I did watch the clown parade on CNBC, Kudlow & Co and the economic genius Christina Romer was on one of those shows (or was it on CNN? Can’t remember) . Kudlow is to stocks what Lawrence Yun is to real estate. Banks are a great value right now, so well capitalized. Sheer panic selling, nothing to do with fundamentals.
I wonder if they really believe the nonsense they’re telling of if they are just trying to get unsuspecting suckers to jump under the bus in order to stop the bleeding.
A few numbers.
- 3.4 million, the number of home loans 90+ days late or in foreclosure.
The vast majority of those houses are in CA, FL, AZ, NV. Since they were mostly bought or refinanced during the bubble years almost all of them are severely under water. They were also bought in markets that saw valuations significantly higher than the averge US home price. I know in Miami the average sale price during the GOGO days of the bubble was about $385K. Many slum properties went for around $250K and are now sold as foreclosures in the 25-50K range. I would guestimate that the average haircut a lender has to take would be about 50+%. So lets be conservative and say $150K. So we’re looking at about 3.4 million x $150K = $510 billion in hidden losses due to mark to fantasy accounting.
So why don’t you jump right on in and snap up some bargains in the financial sector, Kudlow & his CNBC guests did. CITI and BOA look like a sure bet. Given the tea party influence and the general budget situation bailout 2.0 is by no means a sure thing. This sucker could go down.
“- 3.4 million, the number of home loans 90+ days late or in foreclosure.
The vast majority of those houses are in CA, FL, AZ, NV.”
That helps explain the dearth of homes for sale in SD relative to economic conditions.
I think what you have written in completely accurate, but the question you have to ask is “what changed between Friday and Monday with regard to that information to drive the price lower?” Well, some minor changes to the interest rate might impact bank profitabililty - might narrow the spread at which they are able to receive funds vs lend them. Beyond that, not much.
So, given that banks have $510b in losses and false accounting would be a reason why any sane person should not be investing in them, and should have driven their stock prices down a long time ago. But between Friday and Monday? Yeah, I’d consider them a bounce worthy investment.
A side note, AIG is suing BoA for $10 billion.
Several reasons:
a. There won’t be another bankster bailout
b. The stimulus only delayed the problem and made it worse
c. you can’t hold foreclosures of the market indefinitely
d. FANNIE and FREDDIE were downgraded (is that still possible?)
More and more investors are figuring out that sooner or later some of those banks will slip under the waves with no bailout in sight.
I would not bet on a) - elections are coming up.
Larry Kudlow would barbecue live puppies over hot coals if it would jerk the Dow up fifty point for him and his day trader buddies.
VERY interesting. Paul Craig Roberts (Assistant Secretary to the Treasury under Reagan, first term), believes this is all about the power struggle between Wall Street and the military/security complex. Never thought of it that way, but it kind of makes sense.
“The S&P Debt Downgrade: What It Means”
http://www.vdare.com/roberts/110808_debt_downgrade.htm
Some excerpts:
“Aware of its predicament, Wall Street has sent a shot across the bow with the S&P’s downgrade of the US credit rating. Spending must be reined in, and the only obvious chunk of spending that can be cut without throwing millions of Americans into the streets is the wars.
Credit rating agencies are creatures of Wall Street. Just as they did Wall Street’s bidding in assigning investment grade ratings to derivative junk, they will do Wall Street’s bidding in downgrading the US credit rating. Wall Street might complain about downgradings, but that is just to disguise that Wall Street is calling the shots.
The struggle between the military/security complex and the financial sector comes down to a struggle over patronage. The military/security complex’s patronage network is built upon armaments factories and workforces, military bases and military families, military contractors, private security firms, intelligence agencies, Homeland Security, federalized state and local police, and journalists who cover the defense sector.
Wall Street’s network includes investors, speculators, people with mortgages, car, student, and business loans, credit cards, real estate, insurance companies, pension funds, money managers and their clients, and financial journalists.”
“Wall Street opened the game with a debt downgrade, implying more are to come unless action is taken. The new Pentagon chief replied that any cuts to the military budget would be a “doomsday mechanism” that “would do real damage to our security, our troops and their families and our military’s ability to protect the nation.”
Interesting. Any thoughts from HBBers?
Debt is the mechanism by which money is created, which is the prerequisite to corporate profit. Any action which slows debt growth will crush Wall Street as much as whatever sector those cuts effect.
“Any action which slows debt growth will crush Wall Street as much as whatever sector those cuts effect.’
Debt growth? How about debt shrinkage, as in POOOOOOF?
Been a lot of this poofing going on lately, and as each poof occurs it takes somebody’s money out along with it.
The government is adding debt to replace that debt poofage to prevent total collapse.
And cutting spending by government will just increase the rate of the debt poofage by those that are currently dependant on that government spending to delay their poofage.
It’s all a big fight for who or what gets the funds . Wall Street wants as much money possible going to their sector . The wage earner wants more funds going their way ,the Union worker wants to maintain their standard of living ,the Middle man wants to maintain their higher yields ,China wants to maintain it’s trade inbalance ,and
seniors don’t want their Social Security and Medicare taken away,and the war machine wants to keep their percentage of available funds ,and USA multi-National Companies wants to dumb the American workers and get higher yields by outsourcing and out-manufacturing ,and Health Industries want to price fix people into poverty to keep their yields. All special interest groups wants their sector to get tax cuts ,never mind what they
do with those tax cuts in terms of what would benefit
America .
I’m in favor of any policy that insures funds being spent in America ,first and formost ,and second to that I’m in favor of stiff policies that create Jobs and manufacturing in America . We have to go back to the balance of sectors in the past that globalism and Wall Street Casinos altered ,along with the gutting of American jobs by the
the price Monopolies that have made it impossible for the USA to compete unless they outsourse or outmanufacture , No Country would be stupid enough to
give up their job base and tax base and accept the trade imbalances and lack of proper tariffs going on ,including a lack of penalty on American Companiues that take funds and jobs and taxes collected out of America ,
Wall Street has becomes this blackmailing entity that says go along with our Bubbles and more for the rich and investment class and screw the Majority in favor of this short tem Casinos that have nothing to do with jobs and production . Government is just suppose to be the Pawn of Wall Street that does anything to aid faulty profit margins which are nothing but bogus short term speculation ,bubble creation, and than shorting the bubble or shorting the misallocation of funds .
You want a consumer based economy yet they want to take away the means to fund that sort of economy by
the consumer . They got the Americans in debt and now they want to take their wages and benefits and safety nets and jobs and ability to even get out of debt . They want to price fix to the point of driving people into poverty ,and health care has to be 50% more than what they can do it for in other Countries and we have to force people to pay it .
And all roads lead to screwing the Majority by any leverage the power brokers have ,while the Government remains the pawn for the special interest groups .
Lets talk about how people shouldn’t have entitlements or money or jobs to live while the millionaires become billionaires . What are the proper profist for industry to create a balanced economy ?
The battle of the century - when parasites collide!
In this courner, weighing in at 3 million tonnes of killing power and fear mongering, the MIC!
And its opponent, Wall Street, a bloated mass of self entitlement and scorn for each and every one of you!
No doubt pharm, ag, the REIC, etc. will join the melee soon enough. Gotta make sure you got your spot on one of the few arteries that are still producing.
I’d pay to watch that.
“Aware of its predicament, Wall Street has sent a shot across the bow with the S&P’s downgrade of the US credit rating.”
Wall Street is not a person, and the US credit rating was not unanimous; only S&P’s went out on that limb, and now they are taking a beating for it.
I see this more as a matter of one ratings firm which mustered the courage to confer an independent judgment, rather than play along with the others.
for years the status quo has been sucking the teat of the middle class…the forgotten man. when the teat begins to run dry…they turn on each other.
And the middle class would buy tickets for that deathmatch — if they had any money.
Just read something in T. Rex. When T. Roosevelt left office, the middle class was 20% of the population. Seems kinda low…
Apologize. That wasn’t in Theodore Rex. It was in Colonel Roosevelt, the last book in the TR trilogy.
Don’t buy it because I think there’s a big time collusion between the WallStreet and the Defense industries.
S&P painted itself in corner and it had to downgrade the US after it didn’tget 4T in cuts as it said needed. Survival of S&P was at stake and let’s not forget the competition overseas.
This was obviously sent as a message to MSM as broadcasting the wrong message now is called terrorism:
NATO claimed responsibility for the bombing raid on state television headquarters. Just a few hours after the attack, the alliance said it was aimed at “silencing (Moammar) Gadhafi’s terror broadcasts.”
How do you say Sesame Streer in Arabic?
Open sesame?
I doubt it. Wall Street relies on the military to be its enforcement arm around the world. It would be like the mafia going after its network of hitmen. The idiom “cutting off your nose to spite your face” comes to mind.
What butters said. S&P trying to cover its a**.
More homeowners in South Florida and nationwide underwater, according to analysis firm
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 5:22 a.m. Tuesday, Aug. 9, 2011
More South Florida homeowners were underwater in their mortgages during the second quarter of 2011 compared to last year as home values struggled to stay buoyant.
About 46 percent of homeowners with mortgages in Palm Beach, Broward and Miami-Dade counties owe more on their loans than their homes are worth, according to real estate analysis firm Zillow. That compares with 43 percent during the second quarter of 2010.
In the Treasure Coast, more than 56 percent of mortgages were underwater in the second quarter, up from 54 percent a year ago.
Nationwide, negative equity was 27 percent in the second quarter, up from 22.5 percent last year.
“We expect a bumpy road ahead,” said Zillow’s Chief Economist Stan Humphries. “There will be ups and downs in home values before this is over, and we continue to expect a true bottom in 2012, at the earliest.”
Zillow had predicted national home prices to hit bottom this year, but a weaker-than-expected housing market led Humphries to push back that recovery date.
“There will be ups and downs in home values before this is over, and we continue to expect a true bottom in 2012, at the earliest.”
At least he qualified his bottom call with an allowance that it might not happen until after 2012.
Decade of Fiscal Stimulus Yields Nothing but Debt:
By Caroline Baum
Aug 4, 2011 8:00 PM ET
When George W. Bush took up residence in the White House in January 2001, total U.S. debt stood at $5.95 trillion. Last week it was $14.3 trillion, with $2.4 trillion freshly authorized by Congress Tuesday.
Ten years and $8.35 trillion later, what do we have to show for this decade of deficit spending? A glut of unoccupied homes, unemployment exceeding 9 percent, a stalled economy and a huge mountain of debt. Real gross domestic product growth averaged 1.6 percent from the first quarter of 2001 through the second quarter of 2011.
It doesn’t sound like a very good trade-off. And now Keynesians are whining about discretionary spending cuts of $21 billion next year? That’s one-half of one percent. And it qualifies as a “cut” only in the fanciful world of government accounting.
Rosy Scenario
“Political leaders meet their target by adjusting their forecasts rather than by adjusting their policies,” Frankel writes.
‘Architectural Change’
How about it? Get rid of the loopholes. Better yet, scrap the entire tax code, which would decimate the lobbying industry. Implement a flat tax or a national sales tax. The time has come for what former Treasury Secretary Paul O’Neill calls “architectural change.”
http://www.bloomberg.com/news/2011-08-05/decade-of-fiscal-stimulus-yields-nothing-but-debt-caroline-baum.html - 85k -
Money is the result of debt. One side of the trade imbalnce can’t be making money, without the other person on the other side of the transaction going into debt.
Debt is the prerequisite to money, which is the prerequisite to profit.
“Money is the result of debt. One side of the trade imbalnce can’t be making money, without the other person on the other side of the transaction going into debt. Debt is the prerequisite to money, which is the prerequisite to profit.”
From the “It’s a Wonderful Life” script:
George Bailey: No, but you…you…you’re thinking of this place all wrong. As if I had the money back in a safe. The the money’s not here. Your money’s in Joe’s house… that’s right next to yours. And in the Kennedy House, and Mrs. Macklin’s house, and, and a hundred others. Why, you’re lending them the money to build, and then, they’re going to pay it back to you as best they can. Now what are you going to do? Foreclose on them?
Tom: I got two hundred and forty-two dollars
in here and two hundred and forty-two dollars
isn’t going to break anybody.
George: Okay, Tom. All right.
Here you are. You sign this. - You’ll get your money in sixty days.
Tom:- Sixty days?
George: Well, now that’s what you agreed
to when you bought you shares.
Man: - Tom…Tom… Did you get your money?
Tom: -No.
Man: Well, I did. Old man Potter’ll pay fifty cents
on the dollar for every share you got.
Tom:- Fifty cents on the dollar!
Man:- Yes, cash!
“Decade Of Fiscal Stimilus Leaves Nothing but Debt.”
It also leaves financial distortions. You end up with lots of pirate stores and other stupid things where none should have ever been built.
Jobs sprung up out of nowhere and grew dependent on these financial distortions, and now that the distortions are being corrected these jobs are vanishing.
Side note — just saw a new magazine in B&N: Pirates. I don’t see why not. There are still a bunch of Civil War magazines. Pirates Magazine will draw the FSM crowd.
AAAAARRRRRR!! Me fall collection of peg-legs be out!
Every time I think of the “Pirate Shops” I can’t help but think that the only place those belong is in the exit of the Pirates of the Caribbean ride at Disneyland.
The markets: POOF! POOF! POOF! Aww, dat’s beautiful… (ht jeff saturday)
Yeah, but no emissions whatsoever. Totally green combustion.
I dunno. I think this debt machine will emit the mangled remains of senior citizens who have their SS benefits cut, or the young laborers who will live in mud huts 50 years from now.
Wrecked lives make great fertlizer.
If housing was a bubble and it crashed and it was due to easy money and hype and loan fraud and faulty ratings ,why isn’t health care a bubble fraud that isn’t sustainable ,as well as all the other price fixing that was driven by a false debt market ?
Why would Banks be paying peanuts for their money and charging a fortune to loan it out by comparsion to what the money is costing them or make investments driving money to places that drive up prices by this speculation ,
I’m just saying that all prices are false in realtion to wages . Add to this that its a monopoly now that you can’t compete unless you outsource or outmanufacture and the whole system is screwy .Money isn’t going where it needs to go .
What on earth is going on over in London Town ? With all today’s tech , there does not seem to be any photos of the Young yobs running amok . Wonder why ? If the cops just stand around looking spiffy , no wonder they are helping themselves ,to the goods.
What on earth is going on over in London Town
Diversity is our strength?
Banning guns prevent crime?
Socialism works?
Let’s understand the rioters. Let’s talk to them?
Unemployment. Rising cost for food. Government for the elite. Sound familiar?
+1. Nothing in hand now, and no hope for a better future does not a peaceful population make.
Recall that a few months ago, Prince Charles and wife Camilla wound up in the middle of one of these demonstrations. The look of fear on their faces was something to behold. And yes, the demonstrators did some damage to the royal limo.
Immigration from *ahem* warmer climes?
sunlight depravation?
Didn’t mean to be racially insensitive? Why are the Afro-Caribbeans and in the past Pakistanis and Muslims in UK feel the need to riot as opposed to other minorities? The Chinese in UK are not rioting, nor are the Polish, and not even the Indian Hindus?
“there does not seem to be any photos of the Young yobs running amok . Wonder why ?”
Three guesses, and the first two don’t count.
Well, this is the result of decades of social engineering. The parallel here in the US is the flash mob phenomenon. No photos, unless it’s some youtuber who happened to be here. But not from the press, which has been complicit in all the failed social engineering.
Yes, these are the same as the one you see in the 7-11 stick-up videos here in the US.
I wonder if it’s not the dark side of flash mobs. The criminals have realized that they can summon together a group of hooligans to a specific place where they can at least temporarily overwhelm the normal police presence there. Smash, loot, beat, and move on to the next tweeted location.
And the police realize if they let it get a little out of control, their ranks won’t be depleted in the upcoming austerity cuts.
http://www.social-europe.eu/2011/08/the-london-riots-on-consumerism-coming-home-to-roost/
The London Riots – On Consumerism coming Home to Roost
By Zygmunt Bauman >>
These are not hunger or bread riots. These are riots of defective and disqualified consumers.>>
All varieties of social inequality derive from the division between the haves and the have-nots, as Miguel Cervantes de Saavedra noted already half a millennium ago. But in different times having or not having of different objects is, respectively, the states most passionately desired and most passionately resented. Two centuries ago in Europe, a few decades ago still in many some distant from Europe places, and to this day in some battlegrounds of tribal wars or playgrounds of dictatorships, the prime object setting the have-nots and the haves in conflict was bread or rice. Thank God, science, technology and certain reasonable political expedients this is no longer the case. Which does not mean though that the old division is dead and buried. Quite on the contrary… The objects of desire, whose absence is most violently resented, are nowadays many and varied – and their numbers, as well as the temptation to have them, grow by the day. And so grows the wrath, humiliation, spite and grudge aroused by not having them – as well as the urge to destroy what have you can’t. Looting shops and setting them on fire derive from the same impulsion and gratify the same longing.>>
Oh it’s just some misguided youth expending a little energy. They really mean no harm, but will need a little counseling!
The most salient difference over there is that there is a provocative educated component amongst the rioters. Now, now, that’s not to say they’re right - only that there appears to be a much greater appreciation for the political in their actions than the mobs we’ve seen over here…to date anyway.
This past weekend our city hosted the Lolapalooza music festival. Hundreds of kids bum rushed the private security guards (private event, tickets ran $90-$120). There are you tube films of the stampede - they just wanted a free concert though - no sign of any political consciousness whatsover.
Remember Woodstock 1969? It was a largely peaceful gathering. Even the off-duty cops, who were hired to do security, remarked on this.
Then there was that Woodstock revival back in, oh, 1999, that turned into a riot.
There are pretty wild photos here:
http://www.boston.com/bigpicture/2011/08/london_riots.html
I noticed they were quite careful in not showing black people rioting. Talk about being politically correct.
A few armed cops aiming rubber bullets at the rioters legs will bring this sordid drama to a quick halt. Not that it’s going to fix the longer term problem of gangs & violence though.
Why do we call Reagonomics “supply-side economics”. If you do not understand this, you can not understand our current economic situation.
In the modern world, industrialization has made it possible for a person to produce more than they need. The people that produce more than they consume want to be able to sell their excess rather than store it for the future.
However, if each transaction requires a buyer and a seller, then the market is limited by the producer’s ability to sell, not by his ability to produce. The market is demand constrained not from desire to buy, but ability of people to buy.
The obvious answer is to increase debt. Debt allows some people to sell more than they buy by allowing others to buy more than they sell. The counterparty to debt is money. Debt creation creates money which gives some people the ability to buy more than they sell through debt, making it possible for others to sell more than they buy getting money in return.
The economy is not constrained by demand-side because people can’t buy. It is not free to expand to supply-side limitations as you can sell as much as you can produce, in exchange for the money that is the result of your buyers going into debt.
The fatal flaw to supply-side economics is that desire for profit and money is infinate, while the ability to take on debt is finite.
Unless the roles reverse, and the people that have the money begin buying more than they sell, then the people with the debt simply can’t pay it back. There is no economic situtaion where corporations desire to spend money in exchange for a negative return on investment. The people with debt can’t get the money back to pay off the debt. The debt implodes under its own weight.
“The debt implodes…”
Quite possibly after a prolonged period of indentured servitude.
“supply-side economics”
Sounds much better than ‘debt-funded stimulus,’ no?
“…There is no economic situtaion where corporations desire to spend money in exchange for a negative return on investment….”
Corporations donate to charity all the time. Let’s see… United Way, Red Cross, matching funds, etc. etc. etc.
Not sure whom you’re trying to convince with all of this blather on Ben’s bandwidth, but your arguments are so full of unexamined holes and false authority they make you look unhinged.
Did someone drug you or something last week? This isn’t your usual sort of posting.
Today’s houses. Both houses are in an funny area of Montgomery county. I would say it’s commutable due south to the major burbs where the satellite agencies are, but IMO too long a commute to downtown. This area of MoCo has largely escaped overdevelopment — partially because the county maintains an Agricultural Reserve* here, because there isn’t any major train or highway nearby, and because the McMansion development instead spread northwest along the one major highway (270) and train (MARC) up to Frederick toward Harper’s Ferry.
First, the “Lowball me!” house:
http://www.zillow.com/homedetails/17925-Skymeadow-Way-Sandy-Spring-MD-20860/37208764_zpid/#{scid=hdp-site-map-list-address}
1984 3/2.5 boring colonial on 0.13 acre. Curb appeal but crap backyard; Home Despot Special kitchen. It is “newly renovated” with “new carpet and paint” but sold “as is.”
Sold 1998 $147K
Sold in Dec 2009 for $239K
Listed Jun 10 for $339K
Chased market down to $289K.
It really doesn’t look bad, but that “as is” makes me wonder if there isn’t a major fault somewhere, and the flipper is trying to just recoup his costs and get outta Dodge. This is just begging for a $209K lowball. Days on Zillow 432.
Next up, the House of Weirdness short sale. Is that a covered pool in back??
http://www.zillow.com/homedetails/18510-New-Hampshire-Ave-Ashton-MD-20861/37206011_zpid/#{scid=hdp-site-map-list-address}
1976 3/3 custom on 4.5 forested acres. Nice location but a tough commute.
Sep 2000 sold $375K
Nov 2007 listed for $700K (waited too long for a GF)
Chased market down down down down down down down to $480K short sale.
Days on Zillow 378, but has been for sale for years. And no one has lived there for a while because the e- is obviously turned off.
————-
*The agricultural reserve is pockets and splotches of the county which are barred from development. There are still houses and a couple towns, but it’s mainly fields, turf farms, and tree farms, very pretty The county managed fend off develpers during the housing bubble. But gave in on the Intercounty Connector (ICC), a new toll road. Fortunately, they stupidly located the toll road in an area already built up with some development, and stupidly made it a toll road. So nobody is building around it. i think the Ag Reserve will survive development for a long time.
I like the second house, but I always like the odd ones. Nice wooded location, plenty of large rooms and a cool fireplace. It looks more like a club house than a house. The way it surrounds the weird inner courtyard makes it look like they may have held gladiatorial contests or something there. The courtyard calls for a pool, or a fountain, or something, to make it look less like a fighting pit or a handball court. But it also has a lot of potential. You could even stick a cheap above-ground pool there and it wouldn’t look bad, the way it’s set up.
But overall, that one has a lot of potential. I don’t know about the commute, but it would be a nice house to come home to. It looks like it would be great for entertaining. It looks like it was designed for it, actually. But it also has a cozy quality, which is surprising, given that it’s empty and dark. Sounds like they haven’t ruined the area with development, too.
Two thumbs up. Except it’s too expensive.
Well, they are not going to “just give it away”…
Honestly I think that IS a well-covered pool in the courtyard. It’s even more apparent on the satellite map (the house is far back from the road). I hope it’s a deep pool — I envision lots of drunken kids jumping off those balconies.
“I think that IS a well-covered pool in the courtyard”
That would ’splain it, then. I like it even more, now.
I always advise my friends and acquaintances to buy houses with pools. ‘See ya this summer!’, I say.
Buy! Buy! Buy! (Cramer voice)
That house is pretty cool, and only 22 miles and 48 minutes from downtown DC. If i lived anywhere close by, i’d put it on my list. I’m sure my wife would veto, but i can dream.
Rather looks like a deck covered in snow. Look at the roof tops of the houses in the background…
The colonial house on Skymeadow has a winter pic of snow on the back deck. We’re trying to figure out the two-boob house on New Hampshire Ave, where all the pictures, including the satellite, are clearly summer.
The Voice of Experience here would like to suggest that you DO NOT want “4.5 forested acres” unless you love maneuvering a leaf blower for hours on end throughout the fall. And with all that shade you can’t put in a vegetable garden.
Here’s my Oil City Plan house of the week, about a half hour from Lexington. 2 acres, decent farm house, fenced pasture, big funky barn- $80k.
http://search.lbar.com/mls/details/residential/1022299.html
Many more pix at the zillow listing:
http://www.zillow.com/homedetails/1128-Herndon-Rd-Lawrenceburg-KY-40342/2129601942_zpid/#{scid=hdp-site-map-list-address}
I can’t find a build date, but it has the Grapes-of-Wrath Depression-era look. No AC, propane fireplace heating? The plumbing was added as the lean-to later (the zillow pix show it) which explains the siding and the window and the sloping roof. The barn is depressing too.
For an Oil City house I’d want either a basement or a very large kitchen to process and store the veggies. But the land is about perfect. Can’t go wrong for $80K…
“The barn is depressing too.”
‘Picturesque!’ in realturd lingo. I kind of like the horror movie/American Gothic quality it has, but like I said, I have odd tastes. I even like the Grapes of Wrath quality of the house itself.
I would spend $10k fixing the house up, that’s for sure. It needs a better patio or screened-in porch. The add-on kitchen doesn’t bother me so much. It looks functional, although it’s hard to tell from the picture. Too big a kitchen is a pain, too- it’s the layout that counts (uninterrupted direct lines between fridge, sink, and oven, whose total length is no more than 25 feet is the ideal kitchen work triangle).
I agree about the basement, and that’s a common failing with smaller farmhouses around here. Most don’t have them.
What I liked about this place is you’ve got plenty of room for a garden and orchard, and also room to keep some livestock- because they’re tasty too, or at least fun. And it’s on city water.
Yes, the property is perfect for small-scale homestead farming. One acre for the crops, one acre for a cow. There appears to be an ancient chicken coop.
But for that kind of operation, you’d need a kitchen with a larger sink, drainboard, cupboard space for all the pots and strainers and utensils, and counterspace. I’ve heard of houses with separate canning kitchens, with a drain in the floor so you can hose it down. I don’t can produce, but I’ve heard it’s pretty sticky work. And you need an extra freezer, if only for the meat. You can’t kill half a cow.
I am a man so I would buy the 2nd house. Who can resist two beautiful boobs?
Now you’ve done it. You just exponentially increased the number of hits on that Zillow page! The owner will get all hopeful…
LOL! House #1 would be in the low 100’s out here.
I’m not sure you know where the first house, the one in Sandy Spring, really is. Sandy Spring is adjacent to Olney, just to clarify.
I have done a drive-by on this house. It’s not the most appealing location, beset by petty crime and a somewhat rundown ambiance. Houses are very close together w small yards. Not terrible, but less desireable than surrounding communities. Sandy Spring has a long history as a historically black enclave, but there has been development encroachment over the last decade or so. The house price is not really out of line w similar properties — has it taken some time to get down to this level? Perhaps that would explain the DOM.
Bankrupt Harry & David Gets Court Permission to Terminate 2,700 Pensions (Bloomberg)
Harry & David Holdings Inc., a specialty-food retailer, received bankruptcy court permission to terminate the pensions of more than 2,700 workers, the Pension Benefit Guaranty Corp. said.
PBGC said in a statement today that it had told the court that Harry & David could afford to keep the plan and that the company was terminating it largely to increase investors’ returns, not out of necessity to emerge from bankruptcy.
“We’ve fought hard to get Harry & David to keep their pensions going,” PBGC Director Josh Gotbaum said in the statement. “Unfortunately, they decided not to, and the judge supported them.”
In May, the Medford, Oregon-based company filed papers in bankruptcy court seeking a so-called distress termination of the pension plan, saying it was under-funded by $23.6 million. Without termination, the company said that proposed investors wouldn’t provide $155 million needed to implement the Chapter 11 reorganization plan.
Stephanie Pillersdorf, a spokeswoman for Harry & David with outside public relations firm Sard Verbinnen & Co. in New York, didn’t immediately return a call to her office after regular business hours seeking comment on the pension termination.
“the plan and that the company was terminating it largely to increase investors’ returns, not out of necessity to emerge from bankruptcy.
Without termination, the company said that proposed investors wouldn’t provide $155 million needed to implement the Chapter 11 reorganization plan.”
—
That sounds like a contradiction to me. It’s not necessary to terminate the pension to emerge from bankruptcy, but it’s necessary to terminate the pension to implement the plan to emerge from bankruptcy. ???
Just because the Pension Benefit Guaranty Corp says so doesn’t mean new investment is willing.
The PBGC can also give the pension back at a later date if the company can then afford it.
Who can afford that overpriced junk?
In case anyone is wondering, I’m talking about the fruit baskets.
Fruit baskets were always expensive. Whether or not they were overpriced… I don’t know. How much do fruit and cutie-patootie cookies REALLY cost when you have quality stuff shipped overnight from well-treated employees?
But I agree that Moose Munch costs about twice as much as it should.
Home price recovery slips out of sight
CNNMONEY- Les Christie, August 9, 2011
Any glimmer of hope that the housing market will stage a recovery in the upcoming months has vanished, thanks to the recent spate of bad economic news that has been making headlines over the past several weeks.
According to the latest analysis of home price trends in 384 markets based on the Fiserv/Case-Shiller Indexes, it will be well into the first quarter of 2013 before median home prices across the nation will even be on par with prices from the first quarter of this year.
And that’s not saying much. During the first quarter of 2011, prices fell in 302 of the 384 housing markets tracked by the Fiserv/Case-Shiller index, dropping by an average of 5.1% year-over-year.
As a result of continued weakness on the jobs front and the debt ceiling fiasco, Fiserv pushed back its projections of a housing market turnaround by three months. Now, it doesn’t expect home prices to start gaining any ground until the second quarter of 2012.
Instead, Fiserv expects median home prices to continue to fall by an average of 3.1% between March 31 of this year and March 31, 2012. After that, it expects to see prices increase by 2.7% until the first quarter of 2013.
Where the jobs are
“Every piece of bad news causes more people to be more nervous,” said David Stiff, chief economist for Fiserv, which provides information management and analyses data for the financial services industry. “The stabilization of housing markets depends greatly on household confidence in the strength of the economic recovery. Unfortunately, recent economic news has done little to build confidence.”
There still, however, is no shortage of housing inventory. More than 3.75 million existing homes in June alone were on the market, according to the National Association of Realtors. At the latest rate of sales, it would take 9.5 months to exhaust that inventory, about 50% longer than what NAR considers a healthy housing market.
“I don’t think we’ll see an increase in sales until we see the economy improving,” said Fiserv’s Stiff.
“Home price recovery slips out of sight”
As I have suggested as of late, the economic situation has reached a point of desperation where propping up the value of housing is likely to take a back stage to other federal government priorities.
As I have suggested as of late, the economic situation has reached a point of desperation where propping up the value of housing is likely to take a back stage to other federal government priorities.
‘Bout time!
Perhaps we could pay some attention to rebuilding our infrastructure? And making our current stock of buildings more energy efficient?
The above two things could create a lot of jobs.
I’ve seen numerous listings that had been sporting sold signs as long as 12 mos ago coming back on in the last few weeks. Don’t know if flippers have had them, banks been sitting on them or if financing fell through before the owner went into BK. There are several homes in my neighborhood that were sporting sold signs on them. But they’ve remained empty.
There is significant flipper activity going on in the area but like I said many of these have had nobody in them. I think some of that shadow inventory is resurfacing.
Twitter: Let us handle your next riot. Call now for promotional pricing.
Everyone knows that the Bernake and his band of soothsayers & BS artists will keep interest rates where they are and hint at further stimulus to help our recovery along.
- Stock Futures Rebound From Plunge, Fed Statement Due- Reuters
Stock index futures surged on Tuesday, indicating a rebound from the previous session’s nosedive as investors looked to a Federal Reserve statement for clues on how it may combat a market meltdown linked to fears of a new recession.
Suck ‘em in one day, shake ‘em out the next.
US workers were less productive in the spring
American workers were less productive in the spring, the second straight quarterly decline
WASHINGTON (AP) — U.S. workers were less productive in the spring for the second quarter in a row, a trend that may not bode well for future hiring.
Productivity dropped 0.3 percent in the April-June quarter, following a decline of 0.6 percent in the first three months of the year, the Labor Department said Tuesday. It was the first back-to-back decline in productivity since the second half of 2008.
The drop in productivity helped push unit labor costs up 2.2 percent. That follows a 4.8 percent rise in labor costs in the first three months of this year, the biggest increase since the last three months of 2008.
Rising labor costs reduce corporate profits. Labor represents the largest expense for most companies. And when workers are less productive and cost more, companies are less likely to add jobs.
The stock market shrugged off the report and prepared to rebound after Monday’s 643-point plunge. Dow Jones futures rose 137 points.
Productivity measures the amount of output per hour worked. Higher productivity is generally a good thing because it can raise standards of living by enabling companies to pay workers more without raising their prices and increasing inflation.
Still, productivity gains can be painful in the short run if they are a result of job cuts. That’s what happened in the recession, when productivity rose sharply as companies laid off millions of workers and figured out how to do more with less. Employees worked harder and companies invested in labor-saving technology and machinery.
A slowdown in productivity growth is bad for the economy if it persists for a long period. It can be good in the short term when unemployment is high, if it means companies are reaching the limits on how much extra output they can get from their existing work forces.
If economic growth increases later this year, less productive companies may have to step up hiring. But the gains are unlikely to be large. Many economists forecast growth of roughly 2.5 percent in the final six months of the year. That’s barely enough to keep up with population growth.
Their productivity went down because they didn’t have as much to do, because sales went down.
The next step is for their employers to get productivity back up by firing some of them to match the level of sales.
Which will then go down again, because fewer people will have jobs.
Etc.
Deflationary spirals suck. And there’s no fiscal or monetary way out either.
How did we get out of the last one?
How did we get out of the last one?
Pearl Harbor…
So far, all the so-called ‘experts’ who predicted the U.S. credit downgrade would result in higher mortgage rates, are dead wrong.
What the debt downgrade means for your mortgage
By Allan Chernoff August 9, 2011: 7:35 AM ET
What the debt downgrades mean for your mortgage
Banks’ lending standards have been tough recently, and consumers need the wherewithal to qualify for loans. That appears increasingly difficult as the economy continues to sputter.
New York (CNNMoney) — At least one fear was not realized amid Monday’s meltdown: the concern that mortgage rates would immediately shoot higher in response to Standard & Poor’s downgrade of Fannie Mae and Freddie Mac, the government-sponsored entities that are the 800-pound gorillas of the mortgage market.
In fact, the initial response to Fannie and Freddie getting cut to AA+ from AAA was precisely the opposite. Mortgage rates were poised to continue declining.
HSH Associates, which surveys lenders, quoted the average 30-year fixed rate mortgage at 4.44% Monday. “We expect to see rates go into the 4.30’s by noon tomorrow,” said Keith Gumbinger, of HSH Associates.
…
We got out of the last one by hitting bottom.
“We got out of the last one by hitting bottom.”
Odd that it coincided with a massive burst of government spending.
Declaring war does tend to raise government expenditures.
The massive burst of government spending didn’t coincide with the bottom of the spiral which was in the 30s. Some economies were starting to recover in the late 30s, well before the war. The beginning of the recovery was not at the end of the deflationary spiral.
It’s possible that government spending started the recovery for some nations, or at least aided it.
I’m a Keynsian and believe that governments should practice counter-cyclical spending to offset the effects of recessions. They have to, however, stick to core functions and not do the dumbass stuff we’ve seen of late such as propping up businesses that should have died. And government can’t prevent or cure recessions. The underlying cause has to correct itself via market forces. When it gets so bad that a deflationary spiral kicks in, governments are helpless.
“Declaring war does tend to raise government expenditures.”
Which then end deflationary spirals, it appears.
“Some economies were starting to recover in the late 30s, well before the war. ”
Which ones?
How did we get out of the last one?
Pearl Harbor…
No. The USA was well on its way to recovery before Pearl Harbor. GDP/Industrial production was already trending sharply upwards and unemployment was trending sharply downwards by 1940.
http://en.wikipedia.org/wiki/File:US_GDP_10-60.jpg
http://en.wikipedia.org/wiki/File:US_Unemployment_1910-1960.gif
“No. The USA was well on its way to recovery before Pearl Harbor. ”
Because we were selling huge amounts of armaments, ships, etc to the British and others. And my unanswered question to Al about which economies pulled out of the depression earliest is that Germany, Japan, and Italy were some of the earliest to pull out because of their respective government’s highly ramped-up military spending.
Government spending pulled us out of the deflationary spiral, not the rest of the world being bombed flat (which, of course, it wasn’t).
“No. The USA was well on its way to recovery before Pearl Harbor. ”
Because we were selling huge amounts of armaments, ships, etc to the British and others.
Industrial production was also rising 33-36 well before massive armament shipping but yes government spending pulled us out of the deflationary spiral.
“Their productivity went down because they didn’t have as much to do, because sales went down. The next step is for their employers to get productivity back up by firing some of them to match the level of sales.”
Maybe, but worker productivity has been steadily, slowly rising over the last year, even through low demand. The conventional wisdom is that companies are managing to get the job done with fewer workers (layoffs). So, the workers that remain are more productive, until they’re overworked to the point of inefficiency. If productivity finally went down then, it could be that the workers who remain have hit their peak productivity, and any increase in demand, however slight, would lead to hiring.
U.S. workers were less productive in the spring for the second quarter in a row, a trend that may not bode well for future hiring.
And when productivity goes up they lay people off and have fewer employees do the same work.
Don’tcha just love a lose-lose scenario?
This makes no sense. I was very productive this past spring.
I’ve been slacking a bit this summer, though. So Q3 stats will be even worse.
A slowdown in productivity growth is bad for the economy
In 2007, I watched in dismay as Nightly Business Report mentioned productivity GROWTH as a new metric. Productivity has a pretty solid upper limit, and I think we’re near it. Businesses shouldn’t depend on it as one of their tools for profit. It’s a weak tool and will break soon.
At some point I think Wall Street is going to have to settle for 5-6% profit margin as the norm instead of 10-11%. Those last 5% are what’s driving all the outsourcing and insourcing and financial shenanigans.
“US workers were less productive in the spring American workers were less productive in the spring, the second straight quarterly decline.”
Workers should continue the slow down and force their corporate masters to hire more people. It’s not like they’ve seen any benefit for their greater productivity in the past.
Workers are less productive now because the experienced greybeards who knew their sh!t were laid off because they were too expensive, and the rookies are still trying to figure out the basics.
That seems to be the new “normal”. Nothing is documented and everyone is expected to somehow “figure it out” and quickly. Small wonder nothing works reliably these days.
That’s a good way to be fired.
You had better tell your drug dealer to turn down that music and tell the prostitute to cut the lawn.
West Palm Beach adopts tax on nuisances
By Andrew Abramson Palm Beach Post Staff Writer
Posted: 7:51 p.m. Monday, Aug. 8, 2011
WEST PALM BEACH — Residents with repeated police and code enforcement visits now face a stiff penalty: fines to be assessed on their property tax bill.
The city commission voted unanimously on Monday to pass three chronic nuisance codes that allow a special magistrate in West Palm Beach to order police and code services billed to a resident’s tax bill.
Nuisances can range from unkempt lawns to loud music, drug activity, disorderly conduct and prostitution. Residents applauded when the commission passed the ordinances.
http://www.palmbeachpost.com/news/west-palm-beach-adopts-tax-on-nuisances-1713763.html - 93k -
I like this nuisance smack down:
(I’m betting AZSlim will applaud it too)
Cracking down on absentee landlords: City of Oswego passes new law
CITY OF OSWEGO — The Oswego City Council has passed a new law to crack down on absentee landlords.
Lawmakers passed the measure unanimously Monday night.
The amendment to the city code requires of town landlords to hire a designated property manager who must live within a 25 mile radius of the city limits.
Landlords will learn about the new law when their permit expires or if they apply for new permit. (permits expire every 3 years)
Some tenants we spoke with say landlords are buying properties without even inspecting them, and often times since they live so far away, they aren’t keeping up their properties.
http://www.cnycentral.com/news/story.aspx?id=649395
“Some tenants we spoke with say landlords are buying properties without even inspecting them, and often times since they live so far away, they aren’t keeping up their properties.”
There’s your solution to the housing surplus. Having lived 10 miles south of Oswego, I can tell you that if you fail to properly maintain a house for 3 winters, it’s probably past the point of no return. Nature will quickly destroy it soon thereafter, so the only recourse at that point is to tear it down. I see a lot of tear-down in Oswego’s future in 2016.
Sounds like a property mgmt company just scored big time.
Yup, I’m applauding.
Can we tax Congress for obnoxious behavior?
…or prosecute ben bernanke for crimes against humanity?
“The city commission voted unanimously on Monday to pass three chronic nuisance codes that allow a special magistrate in West Palm Beach to order police and code services billed to a resident’s tax bill.?”
So I could stick it to my slumlord by increasing police calls?
Genius!
Poll: Americans see debt deal as bad for nation
Steven Thomma | McClatchy Newspapers
last updated: August 09, 2011 08:46:17 AM
WASHINGTON — It’s not just the stock markets. The marketplace of public opinion also is turning thumbs down on the debt-ceiling deal, according to a new McClatchy-Marist Poll.
The poll found that Americans think the deal is bad for the country, bad for members of Congress who voted for it and bad for the poor, the middle class and the elderly. Americans think that the only ones whom the deal treated fairly were the wealthy and corporations.
That decidedly negative reaction comes at the same time that the American mood has sunk to its lowest point in more than decade.
“They’re negative on the debt deal, negative on the outcome, negative on the process,” said Lee Miringoff, the director of the Marist College Institute for Public Opinion in New York, which conducted the survey.
By 47-43 percent, voters said they thought the deal was bad for the country.
Democrats were the only ones who thought it was good for the country, by 56-34 percent. Independents thought it was bad for the country by 49-40, and Republicans by 63-31.
At the same time, voters said by 79-14 percent that the debt debate left them less confident in Washington.
They think the deal treated these segments of society unfairly:
By 65-27 percent, they think it treated the elderly unfairly. That belief was found almost evenly across party lines.
By 63-29, they think it treated the poor unfairly. Independents felt the strongest, 69-26.
By 61-30, they think it treated the middle class unfairly. Republicans felt the strongest, 66-27.
Conversely, voters think the deal treated others well:
By 57-33, they think that those with high incomes were treated fairly. Democrats felt that the most, 70-23; Republicans the least, 45-43.
By 56-31, voters think the pact treated corporate America well.
The generally bad reaction bodes ill for members of Congress who voted for the deal, at least as of now.
Voters say by 41-36 percent that they’re less likely, rather than more likely, to vote for a congressional candidate who supported the agreement that raised the debt ceiling. Another 11 percent said it would make no difference to their votes; 12 percent were unsure.
Democrats are favorable, saying they’re more likely to vote for debt ceiling supporters rather than less likely by 47-30. Nine percent said it would make no difference and 14 percent were unsure.
Independents are less likely to vote for debt ceiling supporters by 44-34 percent, with 11 percent saying it would make no difference and 10 percent unsure.
Republicans say by 53-24 that they’re less likely to vote for debt deal supporters. Another 13 percent said it would make no difference and 10 percent were unsure.
Underscoring it all, Americans think by 70-21 percent that the country’s headed in the wrong direction, the worst finding since Marist started asking the question at the start of the George W. Bush presidency in January 2001.
The bad mood cuts across party lines. Democrats say the country’s on the wrong track by 54-37, independents by 78-14 and Republicans by 88-9.
While Republicans already were sour, the mood got noticeably worse among Democrats and independents. The percentage of Democrats who said the country’s on the wrong track jumped from 37 percent in June, and the percentage of independents rose from 62 percent.
Looking forward, Americans have clear views about what they want in new rounds of deficits cuts, as they have since the debate started:
By 69-28, voters support raising taxes on people with annual incomes of more than $250,000.
By 62-32 they support eliminating subsidies to oil and gas companies.
By 84-14 they oppose cuts in Medicare or Social Security.
By 50-46, they support cutting defense spending.
By 73-23 they oppose cutting Medicaid and entitlements.
linky
http://www.mcclatchydc.com/2011/08/08/v-print/119959/poll-americans-see-debt-deal-as.html
What Americans favor:
By 92-8 they support big pots of gold at the other end of the rainbow.
By 96-4 they support candy crapping unicorns
By 95-5 they support cutting the other guys benefits
By 100-0 they oppose having their own gubermint cheese cut
By 100-0 they oppose having their taxes raised
By 90-10 they favor raising other people’s taxes
By 93-7 they favor having the cake and eating it too
…those are just the ones I could come up with in the fly.
What do you expect from 300 million people who bought into the concept that the more you borrowed to build the biggest, ugliest house the richer you would get?
To be fair it wasn’t 300 million people. Most people did not buy a McMansion, even if it seems that way in places like California or Las Vegas.
…those are just the ones I could come up with in the fly.
What do you expect from 300 million people who bought into the concept that the more you borrowed
I think you both are missing the forest for the trees. And the forest is that many Americans are waking up to the “you all need austerity to pay for the rich’s wealth grab” lie.
That is the forest.
The sad part is that we do get it. That’s one dense forest.
With one qualification, that it is the corrupt that grab, some of them only on their way to riches.
I don’t think the poll dug quite deeply enough. How many that supported the debt deal did so mainly because it avoided default but thought that it was deeply flawed otherwise which showed up in other aspects of the poll?
Polls never dig deep. Exhibit A: something 70% “didn’t want” Obamacare.
“By 84-14 they oppose cuts in Medicare or Social Security.”
Third rail, baby! All the Kochtocrap in the world can’t change that! FDR was right.
Now if we could just explain to them how enlarging medicare to include everyone would be a money saver. (Or better yet, enlarging the VA to include everyone- since they do it so much better and cheaper than the private market.)
(Or better yet, enlarging the VA to include everyone- since they do it so much better and cheaper than the private market.)
I would buy into VA care in a heartbeat and I’d trust the VA socialized medicine way more than Blue Cross.
Me too. And I’d even be willing to hop the bus and go down to VA Tucson, which, BTW, is a collection of beautiful old buildings.
The MSM this morning keeps talking about how people are so fearful we’re going back into recession.
No, guys, I think that fear you smell is fear of depression.
That’s not fear you smell, it’s decay.
The only thing to fear, is Reality itself.
The lingering remnant of poof!
The Tsunami survivors are wandering out onto the beach scavenging.
The shill monkeys on CNBC are in full force today. I need a throw up bucket whenever I listen to them which is rarely. The chip Kramer is at it again. How pathetic.
Are they pandering for a Fed-funded bailout?
It looks like an insidious case of desperation to hold the bull market and yes perhaps a plea to Bernanke. They will get more vocal as time goes on.
Mr Bernanke is about to come on the tube and perhaps lay down the case for QE 3. He will lie with a straight face and will stay focused on the feds Ponzi scheme to the determinant of the country.
The shill monkeys on CNBC are in full force today. I need a throw up bucket whenever I listen to them
I don’t miss them at all down here. It’s more relaxing mostly relying on print media.
How likely is another Wall Street bailout in the wake of the stock market correction? I guess we may have a better idea after this week’s FOMC meeting.
ABREAST OF THE MARKET
AUGUST 8, 2011
Markets Fear Gridlock Without Aid
Wall Street Hopes Again for Bailout, But Washington Isn’t Likely to Act
BY E.S. BROWNING
For Wall Street, Standard & Poor’s downgrade of the U.S. is one more sign that dysfunctional government is contributing to the market’s decline.
After the 2010 election, many on Wall Street welcomed divided government, on the theory that the less Washington does, the better markets do. Now, investors have changed their tune and once again are calling on Washington to fix things.
Markets have become addicted to government aid over the past decade, and a growing number on Wall Street are hoping again for a bailout from the Federal Reserve, Congress or both.
…
Many turning to pawn shops amid hard times
Carolyn Said, Chronicle Staff Writer - SF Gate
A steady stream of people in need flows through Granters Jewelry & Loan, an El Cerrito pawn shop with a carved carousel horse in the window and a cigar-store Indian in the vestibule.
Two guys hock a guitar for $300 to get rent money. A woman offers up a diamond ring for cash to pay her PG&E bill. A man pawns a laptop for $40 to last until payday. A mother with two toddlers in tow counts out $99 to repay a loan plus interest so she can retrieve a necklace and some rings.
“It’s hard times,” said Tammi Owens of San Pablo. A student of early childhood education, she was pawning her removable “grillz” gold teeth until the school year starts and she gets her financial aid check. “There are no other options,” she said. “I have to pay my bills.”
Pawn shops fling open a window onto how hard many Americans are struggling to make ends meet these days. With credit tight and jobs scarce, more people than ever - including middle-class consumers and small businesses - are hocking possessions to get quick cash, although they pay a price in interest and fees.
“We have the pulse of the economy,” said Vito Wise, proprietor of Granters. “There is definitely an increase in people getting loans and selling things.”
He’s also seeing new types of customers. A contractor pawned his Rolex for money to make payroll until his accounts receivable came in, he said. A high-end professional who was buying a house pawned his watch and his wife’s jewelry to get $10,000 without jeopardizing his upcoming mortgage.
The owners of a new store down the street brought in their jewelry for cash after the bank reduced their line of credit. “They told me if it weren’t for the money I was able to lend them, they would have had to close their doors,” Wise said.
Bigger, riskier loans
Over the past 18 months, the average pawn-shop loan in California has risen to $150 from $85, according to the California Pawnbrokers Association. At the national level, defaults on pawn loans are rising, said the National Pawnbrokers Association. If a customer defaults, the pawnbroker keeps the pawned item to resell.
“The pawn business supplies short-term small-dollar loans to people who have nowhere else to turn,” said Emmett Murphy, a spokesman for both the California and national associations. “Because of the economic situation, consumers are using it a lot more.”
The skyrocketing price of gold - now topping $1,600 an ounce - is bringing in more customers eager to cash in on the modern-day gold rush.
“Almost everyone can go through their jewelry box and find a class ring, outdated bracelet, earring where they’ve lost the other one,” Wise said. “A gentleman came in just yesterday with three gold fillings he’d had in his junk drawers since forever. Each one was worth 50 to 100 bucks.”
“It’s hard times,” said Tammi Owens of San Pablo. A student of early childhood education, she was pawning her removable “grillz” gold teeth until the school year starts and she gets her financial aid check. “There are no other options,” she said. “I have to pay my bills.”
This is not going to end well 6 months after graduation…
I was going to comment on the quote that you mentioned … until i saw the following.
“He’s also seeing new types of customers. A contractor pawned his Rolex for money to make payroll until his accounts receivable came in, he said. A high-end professional who was buying a house pawned his watch and his wife’s jewelry to get $10,000 without jeopardizing his upcoming mortgage.”
She is doing better by pawing her gold teeth, than this fool that is pawning jewelry to avoid impacting the credit check for the new house. What kind of “high-end professionals” don’t have a safety account … isnt this going to end in a mess if they have to take a pay cut or less bonus. Fools
“She is doing better by pawing her gold teeth”
I remember when gold crowns cost lest that the “natural” looking ceramic crowns. Frow what the dentist has told me gold crowns are now much, much more expensive.
Sadly, the only gold I possess is contained in my wedding band and three crowns in my mouth.
the only gold I possess is contained in my wedding band and three crowns in my mouth
If ever need be, it will cost you much less to pawn the crowns.
Why is it pawn shops only want gold? Why aren’t they twirling signs outside for Government Bonds? Cash$4Bonds? You never see that…
I saw 5 “we buy gold” twirlers while walking 9 city blocks this morning. I passed.
Who knew rappers were so visionary with their gold teeth and bling-bling?
They been gettin’ ripped off by the Man for a long time. The only asset they trust is one they can wear around their neck or in their teeth. It stays with you when you run, and it’s always a liquid asset on the street.
O.G.- Original Goldbug
And you can use it as collateral for a loan.
if I wore gold around my neck like that, liquid on the street is all that would be left of me.
bwahaha
One of our local pawn shops is on the radio advertising that they now will take washers,dyers,stoves and refrigerators. Hadn’t heard that before, big appliances take up a whole lot of space. Pain in the butt to move around also, but I guess if that’s all you have left to hock that’s the way it is.
“It’s hard times,” said Tammi Owens of San Pablo. A student of early childhood education, she was pawning her removable “grillz” gold teeth until the school year starts and she gets her financial aid check. “There are no other options,” she said. “I have to pay my bills.”
My lovely wife has one of these early childhood degrees, and it means a life without economic power; she honestly couldn’t support herself if she were single and childless. In Germany she was a state teacher with good pay and benefits, same as the k12 system, but here in the states it means poverty.
I listened patiently to her complaints, and I quietly observed her workplace when present. I couldn’t help but notice that all the mothers who also appeared near closing time to fetch their children were well dressed, hair done, the usual latte, cellular phone, new SUVs, etc., but they all universally agreed that childcare programs were already too expensive despite the low wages. Few appeared willing to make any consumer sacrifice.
I presented my cursory observations to my wife, and she wholly agreed. She felt that the kids suffer because of poor priorities by their parents, and being a liberal European, she said this is why the government should step in to remedy the imbalance.
Who in the world is most in debt?
August 9, 2011: 5:00 AM ET
As bad as the Greek financial crisis seems, the land of Pericles is only the second-most-indebted nation in the world. The government of Japan holds top honors: Its debt equals 234% of its GDP. The reason Japan hasn’t been in financial-crisis mode is that it owes most of that money to itself. By contrast, the U.S., seventh on our list, owes $4.4 trillion to foreigners. To China alone Uncle Sam owes a cool $1.1 trillion. Of course, when measured by total debt, the U.S. has the biggest IOU: $14.3 trillion.
None of the developing (3rd world) countries are in that list! And why is Singapore on that list at no.8? I thought that Singapore had a balanced budget - maybe they have borrowed to build infrastructure? Malaysia is not on that list.
The list only includes ‘developed’ countries. But it is interesting that Cato Institute-fave Singapore has such a high debt to GDP ratio. I thought their authoritarian semi-democracy was supposed to be a model for us to emulate, at least according to our own oligarchs.
And like Japan, we owe most of it to ourselves.
And like Japan, we owe most of it to ourselves.
In a big way, we owe ALL of it to ourselves because we own the printing press. (The easy button)
“The reason Japan hasn’t been in financial-crisis mode is that it owes most of that money to itself.”…..
“The U.S. has the biggest IOU: $14.3 trillion”
“The U.S. owes $4.4 trillion to foreigners”….
Then technically we owe most of it (70%) to ourselves too.
The situation is quite interesting when a year-on-year price decline of “only 6.2 percent” is cheered as good news.
Slide in U.S. Home Values Slowed in Second Quarter, Zillow Says
By Prashant Gopal - Aug 8, 2011 9:01 PM PT
Home values in the U.S. had their smallest decline in more than four years in the second quarter, as the share of borrowers with negative equity shrunk, Zillow Inc. said today.
In the second quarter, 26.8 percent of single-family homeowners with mortgages owed more than their houses were worth, compared with 28.4 percent in the previous three months, the Seattle-based company said. Values fell 0.4 percent from the first quarter, the smallest drop since the first three months of 2007, when values also slipped 0.4 percent, according to Zillow, which runs a website with property-value estimates and real estate listings.
While the Zillow Home Value Index fell 6.2 percent from year earlier, the rate of depreciation is slowing, said Stan Humphries, Zillow’s chief economist. A temporary decline in bank repossessions, caused by court delays and paperwork errors, may be preventing a more significant drag on house prices, he said.
“It’s a positive that we’re moving in the right direction,” Humphries said. “But I would caution us about being euphoric about these numbers.”
…
Zillow? uh huh. A nice name for Realtors with rotten teeth.
Get a real job you flunkies.
So, scary chart of the day:
A friend of mine is from Spain, and noted that Spain was building a TON of housing during the bubble that they didn’t need. He noted 700k homes per year for a country not much larger than California. Here’s the graph:
http://www.spanishpropertyinsight.com/market/housing-starts-spain-v-uk.htm
Spain was building 900k homes per year at the peak! With a population of ~45MM.
For perspective, CA built about 210k housing units at the peak, with their population of 35MM at the time.
If we believe (as I do) that the return of construction jobs will be needed for a strong recovery (which is why strong recovery will be delayed), what does that say about the timing of Spain’s recovery? What does it say about the needed intervention to fix Spain’s fiscal situation?
“If we believe (as I do) that the return of construction jobs will be needed for a strong recovery (which is why strong recovery will be delayed), what does that say about the timing of Spain’s recovery?”
Except that construction, at least in the U.S., doesn’t need to be in overbuilt housing. There’s more than enough decaying infrastructure to keep a lot of people employed for a very long time.
I’m not sure what Spain should do. You can’t build an economy based just on housing, especially when the potential buyers for all that housing are in other countries whose economies are all imploding at the same time.
What does it say about the quality of the spanish Cajas which financed the whole thing?
I think there were a lot of English folks buying Spanish property at the height of the bubble.
HGTV had a bunch of “House Hunters” shows about Brits buying 2nd homes in Spain.
Spain is host to a LOT of past future European retirees.
“…past AND future retirees.”
I think you had it right the first time.
Their dream of future retirement in Spain is in the past.
what does that say about the timing of Spain’s recovery?
Mañana?
En espana, dicen “Toda pasa.”
“Spain was building 900k homes per year at the peak! With a population of ~45MM.”
But everyone in Europe wants to live there!
I’d love to live there … but not at those prices.
I’m with you. And I bet those prices are going down.
Fed Under Pressure to Act - Reuters
Federal Reserve policymakers began meeting on Tuesday under growing pressure to take some type of action to stem a financial market meltdown linked to fears of a new U.S. recession.
~ What to do, what to do?
On another site, I was arguing with someone about whether debt and money are good or bad. I say a build up of money in the ecoomy, and its offsetting debt is bad. He says I must be anti-business and therefore a socialist.
My response:
Socialism is a failed economic system as it removes the motivation to work harder for more stuff. It also puts the control of teh econmy into the hands of the few, who become very powerful and turn others into slaves.
Capitalism, when trade is in balance, reward those that produce the most stuff, with the resulting output of their labor. We can control trade imbalances by controlling the rate of debt generation to a managabel rate. If businesses cut employee wages, they cut employees ability to buy products, cutting revenue to businesses. If businesses increase wages, they increase peoples’ ability to buy stuff, increasing revenue for the businesses.
Supply-side capitalism where debt is used to maintain demand in the face of falling wages, simply results in a trade imbalance resulting in a build up of debt and its counterparty money. The people with the + side of the trade, the money think they are getting ahead as they have all this paper profit. However, unless the trade imbalance reverses, the debt can’t be repaid and will ultimately result in default and the debt being written off as uncollectable. This results in the boom and bust cycle common in capitalist economies. We continue to search for new innovations that will allow an imbalance to exist, and we keep finding out that in the end, the imbalances can not exist long-term and will result in a crash when the limit if the imbalance is reached.
Thoughts?
I think you described communism, not socialism.
Yeah… I was thinking more collectivism than socialism.
The classic argument is that socialism does not reward using stuff to improve tools of industry. Only by retaining profit and reinvesting it can the tools be improved.
Personally, I find this argument thin. If the collective owns the tools of industry, the collective is rewared for reinvestment. They just need the discipline to do it. Perhaps what socialism lacks is a “rent” that comes out of what you produce with the collective’s tools that is reinvested in improving the tools.
Capitalism can remain in balance even with corporate profits, but only if the profits are distributed and spent by the owners, or if the profits are retained and spent on capital.
Capitalism goes out of balance when businesses begin retaining earnings as some sort of cash, or loaning out the money at a high rate, then borrowing back other money at a lower rate. This creates excess money and debt and results in leverage, which ecentually will unwind as default and having to write off the money as uncollectable if the trade does not eventually reverse.
I think someone decided at some point that creating money was inflationary, but money created through debt would not be.
The more I look at our current state of affairs it seems to me we have far too much debt creation and not enough currency creation to balance it out.
In short the war on inflation since the 70’s has created what I call a pressure cooker economy where bubbles blow left and right.
My thinking at this point is that currency needs to be created to balance the debts and obligations even if it devalues the currency, which needs to happen anyway since our currency has made our labor uncompetitive on the world market.
The winners working younger folks. The losers older retired folks or those nearing retirement.
Keep in mind when we talk about a “war on savers”, I went into this economic collapse in 2008 with close to $200K in cash and now have little left since I have had to use a lot of it to make up for my reduced income and pay increased cost of living.
Ditto
Capitalism works great when
1. There is a lot of competition, the costs of having multiple providers are not high, ie do you really need 3-4 or more power grids.
2. Consolidation has not allowed players to become so rich and powerfull they control regulation and markets to the point that no other competition can develope and prices have less and less to do with demand.
3. People understand the product and there is not a gun to their head when making a decision.
There are areas of the economy where capitalism does not work. In my view conduits (power lines, gas lines, cable, airways, highways etc) should be highly regulated or socialized and production should run based on a capitalistic model where there is an open bidding process. Cable would be much better if you paid a flat rate to have a cable line hooked to your house (managment of cable company would not make huge bucks profits capped like a utility) and people could purchase content from any provider over said cable lines. You could sign a contract for a package or just purchase single stations or shows. The internet is doing more and more of this, which of course is why the internet providers want to take a bigger and bigger bite and have more and more control over it. Health care is another area where capitalism is failing. We don’t see lower health care costs we see redundent hosptial systems, high priced CEO’s, criminal insurance industry etc.
Seems to me that under socialism, the government takes over money-making industries in order to redistribute their profits to the public.
What we have under Bush/Obama is the government taking over failed industries so as to keep them alive at the public’s expense. I don’t know what that is, but it ain’t socialism.
I’m not sure what you described sounds like socialism either.
How about a system where the government simply taxes away profits above a certain level, say 6%? From what I can tell, companies can operate sustainably with reasonably union-ed American workers at 5% profit or so. The outsourcing, insoucing, merger/acq –> layoffs, lobbying, and other cheating were all instituted so a company could be #1, or make an 11% profit, or please Wall Street, or buy the second yacht, or what have you.
So let’s say the gov regulates needs industries or natural monopolies, as measton says. Then they take away the incentive for excessive profit for everything else. Companies still have incentive to compete, CEO’s can still retire rich (if not filthy rich), and small businesses can still be born or die. Government would still pay for basic innovation for companies to commercialzie. Yes, the government would have to chip in here and there for Medicare and SS to smooth over demographics. But you wouldn’t have these wild swings and panics at the kitchen table.
The country could operate on a low-level lifestyle, like those clueless but happy people in Western New York, or in Oil City.
That might work if we could also kick all the god-damn NIMBYs out of power.
One thing that the Communists seem to be able to do that we can’t anymore is build dams, power plants, factories for people to work in, without spending twenty years wringing our hands about whether it’s going to affect somebody’s scenic view or the habitat of some species of earthworm.
Look at how long it took to build the Empire State Building, versus the original World Trade Center, versus the new WTC.
What is is Doghouse, is Corporate Communism.
Here is an interesting double trustee sale history on a Surprise, AZ house (exurban Phoenix). The house is currently listed for about $70K.
TRUSTEES DEED UPON SALE 5/27/11 $182,547 $0 $0 110449623
Buyer: BRANCH BANKING & TRUST MORTGAGE Seller: MICHELLE & LEE XXXXXX Mtg Company: NO NEW MORTGAGE
SPECIAL WARRANTY DEED 3/31/08 $164,900 $2,548 $162,352 FHA 080279276
Buyer: MICHELLE & LEE XXXXXX Seller: HSBC BANK USA NA Mtg Company: SECURITY MORTGAGE CORPORATION
TRUSTEES DEED UPON SALE 12/3/07 $194,740 $0 $0 071273198
Buyer: HSBC BANK USA NA Seller: TIMOTE XXXXXX Mtg Company: NO NEW MORTGAGE
WARRANTY DEED 4/19/06 $243,000 $1,000 $0 060522868
Buyer: TIMOTE XXXXXX Seller: CHARLES A & ELVIRA XXXXXX Mtg Company: NO NEW MORTGAGE
SPECIAL WARRANTY DEED 3/6/03 $135,655 $4,105 $133,523 FHA 030280503
Buyer: CHARLES A & ELVIRA XXXXXX Seller: RYLAND HOMES OF ARIZONA INC Mtg Company: RYLAND MORTGAGE COMPANY
BUILDING INFORMATION
1. SFR GRADE 010-3 URBAN SUBDIV Rooms: 7 Fixtures: 7 Living Area: 1,665 sf Built: 2002 Stories: 1.0
Class: CLASS R3, AVERAGE Construction: Wood Frame Patios: 1 – COVERED
Quality: FAIR Pool: No Covered Parking: Garage – 2 cars
Roof Material: Concrete Tile Added Value: None Land Premium: None
Heat: Y
A/C: Refrigeration Added Area: None
Builder: RYLAND HOMES
Dorm nearly half-empty at Eastern Illinois University
EIU hit by declining enrollment
WGN-TV News Desk WGN News
CHARLESTON, Ill.—
Eight of seventeen floors at Eastern Illinois University’s Carman Hall will be empty during the upcoming semester due to low enrollment.
The Mattoon Journal Gazette and Charleston Times-Courier report EIU officials say they won’t need the space and want to use resources efficiently while enrollment is down.
Freshmen enrollment dropped by approximately 200 students last fall and by about 100 students the year before.
No layoffs are planned but open positions on the dorm’s staff are expected to remain unfilled.
Interesting. My daughter lived on campus during her freshman year (2 years ago). From what she told me there wasn’t a single free spot in the dorms. She commuted from home last year and some of her out of state friends stayed in the dorms, which were still pretty full.
Here in Tucson, I noticed something very interesting. For the past few years, we’ve had quite a few University of Arizona students staying in town for the summer.
Not this year. Most of them bailed outta Tucson by Memorial Day Weekend.
School starts on the 22nd, and in my rides around town, I’m still seeing a lot of stuff that’s for rent. Very few of the students have come back to town. Last year, I think that most of them were back here by August 1st.
I can’t help thinking that the UA’s recent 22% tuition hike has something to do with this.
It occurs to me that S&P has been routinely guilty of wildly overstating the quality of bonds.
Never has it understated the quality of bonds, AFAIK.
So when people slam S&P for their past errors, they neglect to mention the type of error S&P makes.
An investor stands on a 50 foot bridge preparing to make a financial jump:
An S&P Representative pro-offer$ his Fee$ible Opinion$:
“The rope appears to be 39 feet long”
“The bungi-cord appears to be 45 feet long”
“It’s our opinion that jumping head 1ST or Arse 1st will have approximately similar end result$…thank$ & good luck!”
China inflation rises to 37-month high in July
China’s inflation rate rises to 37-month high of 6.5 percent in July as economy cools
BEIJING (AP) — China’s inflation rose to a 37-month high in July, adding to pressure on Chinese leaders to cool living costs while keeping economic growth on track as the U.S. and European outlook worsens.
Consumer prices in the world’s second-largest economy rose 6.5 percent over a year earlier, up from June’s 6.4 percent, data showed Tuesday. That was driven by a 14.8 percent jump in food costs, up from June’s 14.4 percent and leaving the inflation rate well above the government’s 4 percent target for the year.
The jump in prices came despite a slowdown in manufacturing and other economic activity in July following repeated interest rate hikes and other curbs imposed to cool an overheated economy.
Beijing has to strike a difficult balance between stopping inflation and easing controls to support Chinese companies as U.S. and European demand weakens, said IHS Global Insight analyst Alistair Thornton.
“They’re in a really tough position now,” Thornton said. “If they want to start loosening (monetary policy) and buoying up growth, they could face the risk of compounding higher-than-desired inflation.”
Analysts blame the inflation spike on the dual pressures of consumer demand that is outstripping food supplies and money surging through the economy from a bank lending boom that helped China ward off the 2008 global crisis.
Rising prices, especially for food, are politically dangerous for the Communist Party because they erode economic gains that underpin its claim to power.
Stuff in China is very expensive (unless it is a knock-off). I’m not sure whether the government taxes stuff a lot, but the prices just don’t make sense in many situations.
Ha, a bingo trivfecta as we muddle along day #2 in America (AA+)
Bearish:
Bank of America Corporation (BAC)
AT&T, Inc. (T)
The Goldman Sachs Group, Inc. (GS)
Community Sentiment
Top stocks creating buzz on Yahoo! Finance message boards
Storm a-Brewin’: “We’ll Retest the Lows,” Harrison Says
By Aaron Task | Daily Ticker –
After a wild night in overseas markets, U.S. stocks were heading higher early Tuesday as traders picked through the wreckage of Monday’s watershed decline. With the Dow down 10 of the past 12 sessions and the S&P off 16% over the past 11 trading days, the conventional wisdom is stocks are good for a least a short-term trade; that’s especially true if you think Ben Bernanke will pull another QE rabbit out of the Fed’s hat later today — or sometime in the near future.
There’s no telling what the market will do in the short-term but Todd Harrison, CEO of Minyanville.com is fairly certain where it’s going in the medium- to longer-term: Lower. Much lower.
“I do believe we’ll retest the lows” of 2009, Harrison says in an interview taped Monday before the market’s 6% drop. “If we’re allowed to take our medicine rather than be given more drugs we will retest the lows.”
A year ago last month, Harrison told The Daily Ticker that the relatively placid market action at the time represented “the eye of the storm.” The loss of America’s AAA rating and, more importantly, the European debt crisis are the beginning of the “second side of the storm,” he says now. “We’ll have to go through this again.”
The good news is Harrison believes “generational opportunities” will emerge on the other side of the storm and, yes, he’s still in 100% cash in his long-term account in anticipation. “It’s OK to be patient,” he says. “It’s going to be a tough couple of years.”
The bad news is, at 666 on the S&P 500, the 2009 lows are 40% below Monday’s close.
Harrison admits the timing of such a move is tricky to predict. His best guess is after the 2012 election, regardless of the outcome, and says decisions by European policymakers will likely determine the path from (up) here to (down) there.
Good job iffin’ you can get paid for it:
…tricky to predict / His best guess is… / Harrison believes… / I do believe… / There’s no telling what the market will do… / the conventional wisdom is…
Consumers shrug off debt downgrade
Jessica Dickler, On Tuesday August 9, 2011 / CNNMoney
In fact, 45% of Americans said the stock market’s decline in recent weeks did not affect their family’s financial position at all
“If they don’t know what to do then they shouldn’t be involved in the markets at all,”
“That, in my opinion, is the better way to be, rather than running around like a chicken with their head cut off,”
“If we’re allowed to take our medicine rather than be given more drugs we will retest the lows.”
Medicine is not drugs?
I suspect he meant “drugs” along the lines of methamphetamine, crack cocaine, etc…
First tax-free holiday in Arkansas a boon for business
LITTLE ROCK, Ark
(Reuters) - Arkansans shopped until they dropped on Saturday, braving temperatures deep into the triple-digits to take advantage of the state’s first sales tax holiday weekend.
“I have never seen anything like this,” said Clancy Graham, a manager at Little Rock’s RK Collections Boutique, an independently owned store. “If we could do this three times a year, it would be amazing. It has done crazy good stuff for our business.”
Arkansas lawmakers approved the holiday in February to give parents a tax break on their back-to-school shopping for items such as uniforms, clothing and school supplies.
The tax-holiday also covers items not necessarily needed for school including wedding apparel, girdles and costumes.
Officials have estimated it would cost Arkansas about $2 million in revenue.
Texas, Mississippi, Florida and other states have had such a holiday for several years to ease the tax burden on families just before the school year, and to encourage consumers.
Rebecca Simpson of Little Rock braved the crowds and heat to buy school uniforms for her five-year-old son. The thermometer stood at 107 degrees Fahrenheit Saturday evening.
“I had to get them there so it seemed like a good idea to wait for the tax holiday,” Simpson said. “If I hadn’t been limited in where I could get his school clothes, I probably wouldn’t have been out in the insanity today. It took forever to check out because they all had special codes to enter to remove the tax.”
Graham said sales were phenomenal on Saturday.
“We have tripled our daily goal,” Graham said. “We’ve made more today than we have made in this whole month because it’s been so hot no one is getting out.”
Graham said customers visited the store earlier in the week to “pre-shop” and returned Saturday to buy their favorites. The store also put summer items on sale to lure buyers.
When you’ve had enough of these, as we have in New York, the effects wear off.
And then the weekend was over, what do we think happens next??
Girdles??
Spanx for the lil’ fatties. It’s a self-esteem thing.
Girdles are common for brides. Also, I might add, for grooms. Must make for an interesting wedding night. Let down the hair AND the flab…
Coordinated Action Needed to Prop Up Banks: Analyst
CNBC
Following the loss of 635 points off the Dow in a single session and widespread investor fear over the debt crisis in the US and Europe, US policymakers need to announce support for the banking system, according to John Wadle, the head of regional banks research at Mirae Asset Securities in London.
Ben Bernanke and Tim Geithner need make an “announcement of a coordinated set of measures to rebuild confidence and economic fundamentals,” Wadle said in a research note, adding that a press statement from the Federal Open Market Committee (FOMC) would be “insufficient”.
Following major losses for US banks on Wall Street on Monday the Fed and Treasury need to unveil coordinated action to halt the sell-off and inspire a 20 percent rebound, according to Wadle.
“For markets to believe in their effectiveness, Bernanke and Geithner together must coordinate the implementation process using the Fed’s balance sheet and regulatory carrot/stick. We need stimulus/restructuring measures, not just more liquidity from the Fed.”
Following the losses in banks across the world-and Bank of America in particular-on Monday, Wadle said he does not believe the fundamentals for the industry are as bad as they have been in the past.
“US banks dropped 12-34 percent over the past week with Bank of America the most hurt due to wide spread fear of potential mortgage losses, the AIG/mortgage securities lawsuits and fear they may need to raise equity,” said Wadle, who noted that liquid assets and tangible equity is high.
“I do not believe the fundamentals of these banks are that bad and if we get some imaginative policy response by the Treasury /Fed these bank stocks should rebound by 20 percent.”
“For markets to believe in their effectiveness, Bernanke and Geithner together must coordinate the implementation process using the Fed’s balance sheet and regulatory carrot/stick.
Silly me, I thought the markets were at maximum effectiveness when there was NO regulation?
That’s only when regulation is used to keep banks and ws from stealing the wealth of the middle and upper middle class. When it comes to proping up failed banks and CEO profits they will throw out the term regulation so that people won’t think the FED is just giving them free money.
China media say U.S. debt woes show military overreach
BEIJING | (Reuters) - Chinese state media on Monday blamed Washington’s huge military spending and global footprint for the crisis that led to the U.S. debt rating downgrade, calling for an end to the foreign “domineering” dragging down its economy.
Sharpening their rhetoric over the economic crisis that has sent markets into a tailspin, the Chinese state-run media lambasted both Europe and the United States for the dysfunctions of their democracies and their unsustainable appetite for spending.
The Xinhua news agency also warned the United States against trying to boost exports and growth by letting the dollar weaken, which would have a dramatic impact on China as about 70 percent of its massive reserves stockpile is invested in dollar assets.
One analyst, Yuan Peng, said the unusually blunt attack on the West probably reflected concern among Chinese leaders, facing pressure from popular opinion and the media, to deflect blame for any negative fall-out of the crisis on the country’s holdings of U.S. assets.
“Since the collapse of the Soviet Union, the United States, as the world’s sole superpower, has relied on its powerful military to meddle everywhere in international affairs, advancing hegemony, and paying no heed to whether the economy can support this,” said a commentary issued by China’s Xinhua news agency, which noted the heavy bills for America’s wars in Iraq and Afghanistan.
“Now is the right time for the United States, trapped in economic hardship, to reflect on its domineering thinking and deeds,” said Xinhua, urging Washington to “change its policies of interference abroad.”
China is spending heavily on its 2.3-million-strong armed forces, returning to a double-digit increase this year. That has stirred unease among its neighbors and the United States, which has long had a presence in the Asia-Pacific region.
At about $93.5 billion for 2011, China’s defense budget is still dwarfed by that of the United States. In February the Pentagon rolled out a record base budget for fiscal year 2012 of $553 billion, though the Obama administration is now looking to trim military spending.
China is spending heavily on its 2.3-million-strong armed forces, returning to a double-digit increase this year. That has stirred unease among its neighbors
Hey China’s “neighbors”, how about you buy more stuff from us. Then maybe we’ll be able to afford to protect your keisters from China.
Instead of looking at Globalism as a way to inccrease cheaper
production and upgrade all the different Countries lifestyle .look at Globalism as increasing the risk of War because certain Nations ,like Communist nations or Corrupt Nations, will use the excess funds to increase Miltary power rather than ehance their peoples standard of living .Look at the big military machine the USA built with excess funds because of of the productive mode we went into in past cycles . Or, if more money isn’t put in the hands of the wage earner it ends up going to speculations or misallocation of funds like in the case of China currently having 45 million extra housing units than the
majority in that Country could even afford ,or they use extra money to invest in debt in the USA .
Everything is tied together and the delicate balance has to be right in terms of where money flows and what the percentage is to each sector .
Believe it or not ,a blanced economy is the only answer and that is how the USA got ahead for a long time for the Majority ,especially when regulation and proper taxing kept that delicate balance .
that is how the USA got ahead for a long time for the Majority, especially when regulation [$traighten up and fly right!] and proper taxing [“TrueTaxDeceiver’s™”] kept that delicate balance .
HW = “TrueCitizen™” compa$$ heading!
How is that possible? Don’t they make the less than the equivalent of 1/10 of what we make?
Hey China’s “neighbors”, how about you buy more stuff from us.
I was thinking of Japan, Taiwan and S Korea.
“At about 93.5 billion for 2011, China’s defense budget is still dwarfed by that of the United States.”
“But on a more appropriate purchasing power parity (PPP) basis, the chinese military expenditure is over $400 billion, nearly two thirds that of the United States” (”China’s Defense Budget”, Globalsecurity.org)
China’s personnel costs are 29.16 billion yuan (approx $4.5B) for 2.3 million military personnel.
We are spending close to $160 billion for around 3 million DOD personnel (including 752,000 civilians)
the solution is clear. Outsource the DOD to china and India.
I believe there were troops from India in Iraq. Certainly there are mercenaries hired by the US , oops I mean private security personel.
Talk about building crap, Sleazer homes are right up there with the best/worst of them.
Beazer Homes Widens 2Q Loss as Incentives Fall
August 09, 2011| FOXBusiness
Reuters
Shares of Beazer Homes (BZH) slid by more than 6% to a 52-week low on Tuesday after the homebuilder widened its second-quarter loss and said closings on new homes declined during the period as incentives diminished.
While total new orders climbed 24% to 1,215 homes, home closings decreased 49% due to a lower backlog of homes and the absence of incentives.
The Atlanta-based company posted a net loss of $59.12 million, or 80 cents a share, compared with a year-ago loss of $27.8 million, or 41 cents a share, in the same quarter last year.
Excluding special items, the company lost 75 cents, widely missing average analyst estimates polled by Thomson Reuters of a 42-cent loss.
US Closer to ‘Junk Bond’ Status Than Triple-A: Bove
CNBC - August 9, 2011
The US credit rating would be even worse than its recent downgrade from Standard & Poor’s if the nation was judged as a private company, banking analyst Dick Bove told CNBC Tuesday.
Speaking amid the hotly contested debate over whether the US should have lost its coveted triple-A rating in favor of the new Double-A plus, Bove said the US balance sheet and the burdensome national debt tell a clear story.
“You’ve got a company which is losing about $1.4 trillion this year, probably will lose somewhere around a trillion dollars over the next couple of years. It owes $14.4 trillion (and) over the next five years that will get up to $20 trillion,” the Rochdale Securities analyst said.
“So there’s no likelihood whatsoever that this particular company is able to pay down from its own resources the amount of debt that it has, nor is there any likelihood that it’s going to get rid of its deficit,” he added. “If that was a real company, of course, that would be a junk bond.”
The S&P downgrade late Friday roiled financial markets, causing wild swings in trading Friday as rumors of the move spread and then in part triggering a more than 600-point selloff Monday in the Dow industrials.
While the market rebounded in early trading Tuesday, Bove said he would not be buying stocks that likely have more downward pressure ahead.
“I still would expect to see a thousand-point down day at some point in this market as people come to realize there has been a complete change in the financial structure of the world,” he said.
While he believes bank stocks are cheap he would not be buying amid what he expects to be significant turmoil.
“We’re building a reserve currency around a country which is bankrupt and can’t pay its debt. How can you in essence be aggressive and say, ‘I know where the bottom is, or I know how this is going to adjust’?” he said.
“We have people buying Treasury securities because they’re worried about the Treasury,” he added. “We’ve got people selling banks stocks, taking the cash and putting into the banks for safety. It doesn’t make sense. What you’re seeing is this adjustment is occurring and people are not sure how to react to this adjustment.”
Had to chuckle at this one:
Obama Turns 50 Despite Republican Opposition
Hwy’s morning chuckle (live from Wisconsin):
(Really,… not Satire)
Tea Party Express: The Musical
http://www.youtube.com/watch?v=UybOMzDkhEQ&feature=player_embedded#at=72
Treasury borrows at record-low rate for 3-years
In the first auction since the S&P downgrade, US notes fetch an all-time low interest rate
NEW YORK (AP) — Investors are buying three-year Treasurys at a record-low interest rate, in the first government debt auction since Standard & Poor’s cut the U.S. credit rating on Friday.
The Treasury sold $32 billion in three-year notes to yield 0.50 percent Tuesday. That’s a record low borrowing rate, according broker BTIG. Investors also placed bids for 3.29 times the $32 billion up for sale, the strongest show of demand since November 2009.
Treasury yields are near their lows for the year, after a stock market rout sent investors into the relative safety of Treasurys. When bond prices rise, yields fall.
In Tuesday afternoon trading, Treasury prices were slightly higher. The 10-year Treasury yield hit a low for the year of 2.32 percent, down from 2.34 percent Monday.
Stocks Waver After Fed Pledges Extended Low Rates- Reuters
Wall Street sees volatile trading in the minutes after the U.S. central bank says that key overnight lending rates will be kept near zero into 2013.
So have they essentially written off the next two years then?
How many more FBs will succumb in those two years? FBs take note, we’re almost at the 3 year mark for 0% FFR and it hasn’t helped, can they hang in there for another 2…or more?
How about they give us 0% interest mortgages, so FBs (and everyone else) can pay down the principle much quicker?
Yeah, I know, I should ask for a pony while I’m at it.
OMG! Dive! Dive! Dive!
QE not dead ahead after all.
Wow! Positive to -195 to -60 minutes later. No kidding on the volatility.
Even the Fed expects two more years of bouncing along the bottom.
And by “two years”, they mean, “We have no idea but it sounds better than ‘foreseeable future’”.
Two more years is also the rest of Bernanke’s term. Maybe he couldn’t promise further?
Reminds me of 30 rock episode.
Airline pilots always say we’ll be taking off in 30 minutes, if they say more than this the passengers get angry.
If it’s more than that they (reasonably) think they should be allowed back off the plan to wait in a more comfortable space. Especially in those 100+ temps with no AC nightmare waits.
yep…definately shaping up to be the lost decade(s).
And the promise of two more years of cheap money sent the stock market into a rally.
We’ll see if it holds, or if it’ll tumble again before the week is over.
What? No QE3? After QE was such a stellar success. What’s up with the Bernank?
He got three negative votes as it is.
It’s gonna tick the Republicans off. Republican chairman have generally raised interest rates when there was an incumbent D and cut them when there was an incumbent R over the past couple of decades.
Psst.. Ben works for Wall St..
But really this was a shot at China to force the Yuan higher. It’s working too. Dollar down 1% today and the Euro (remember yesterday was the walking dead) surged to 143.3 (1.25%) and the precious is $1744.
All this won’t stop the coming class wars. I would expect it to speed it up.
you know…it really is just leagilzed gambling.
high stakes “liars poker” with $ trillions at risk.
http://www.bellinghamherald.com/2011/08/08/v-print/2129904/trampoline-park-bounces-on-scene.html
Does anyone remember why trampoline parks went out of business in the 60s?
I understand that the pediatrician’s association, or whatever it’s called hates them, saying that they are deathtraps.
I believe most injuries occur when kids fall OFF of trampolines, or when they collide with each other due to multiple kids utilizing the same trampoline at the same time.
The risk of falling off the trampoline would go way down in a room full of trampolines, but the risk of landing on the padded spring/frame area would go up since there are seams everywhere.
I couldn’t quite figure out from the site how they prevent users from colliding with each other when they are all in the same room, unless their rules prohibit crossing the dividers. But considering that they offer leagues like dodgeball in that facility, I can’t see how that could be the case.
My forecast is a high frequency of injuries, but somewhat less catastrophic ones than a backyard trampoline.
80 layoffs announced at Randle, Wash., sawmill
PORTLAND, Ore. (AP) — A Portland, Ore.-based forest products company says it has laid off 80 people at its sawmill in Randle, Wash., east of Chehalis.
Hampton Affiliates Chief Executive Steve Zika said Monday in a statement that his company can’t obtain enough logs to maintain normal operations.
He says many logs from private forest lands are being exported and the Gifford Pinchot National Forest is, in his words, “effectively locked up.”
Zika adds that Chinese log exports and a continued depression in the U.S. housing market have made operating a Northwest sawmill “a difficult proposition.”
Export the raw material, and have it come back here as value added, finished products.
And this is different than the past 20 years how?
Along with bubble housing, we evidently have been getting bubble wages.
Nothing wrong with going back to pre-bubble wages. Except for the fact that everybody wants their bubble-inflated loans paid back at par, and wants to keep their bubble inflated prices on anything they are selling.
20 years? Try 200. The Civil War was about raw cotton.
The Civil War was about raw cotton
Kinda $orta, multiple of millions of low-co$t non-$teel implement$ were needed to till / plant / tend / harve$t & $hip such $outhern fibrou$ commoditie$ to obtain “Bidne$$” profit$…it’s a complicated $tory really. :-/
Monied interests and cut throat power struggles. Cut off your income to improve mine. Import duties on those implements so we can do our business up here.
No 401K matching fund$, no maternity leave, no neosporin, no #2 pencils.
“Export the raw material, and have it come back here as value added, finished products.”
That is the classic definition of how a colony operates. We are a colony of China.
In the early 2000’s the National Forest Service had some exhibit on the National Mall. One of the foresters told me that there was plenty of available lumber, if they selectively logged second-growth in-between trees. It would make the remaining trees much healthier. More sunlight, less disease. I guess it’s just like thinning a row of carrots. Problem is, selective logging is much more expensive than clearcutting.
http://blogs.forbes.com/rickungar/2011/01/17/congress-passes-socialized-medicine-and-mandates-health-insurance-in-1798/
“In July of 1798, Congress passed – and President John Adams signed - “An Act for the Relief of Sick and Disabled Seamen.” The law authorized the creation of a government operated marine hospital service and mandated that privately employed sailors be required to purchase health care insurance.”
“The law was not only the first time the United States created a socialized medical program (The Marine Hospital Service) but was also the first to mandate that privately employed citizens be legally required to make payments to pay for health care services. Upon passage of the law, ships were no longer permitted to sail in and out of our ports if the health care tax had not been collected by the ship owners and paid over to the government – thus the creation of the first payroll tax in our nation’s history.”
Precedent from the founding era of our nation.
Intraday traded BRK/A at 10:00 am today and made a measly $750 guess I should have waited to 3:59 pm and would’ve made $3850.
Oh, well, should’ve, would’ve, and could’ve.
My old lady going to give me an earfull…I got to next week as I have to wait for the settlement date for my cash account. No margin here.
thomas buoyant = F
Funny
Well the good news is that with BB keeping rates low that should spur the banks to start really lending again! Home loans and refi’s will be flying off the self, and J6P’s wife can go get a boob job. She may have to put it on her SNAP card this go round though.
Ha,Ha,Ha. Good grief, the decaying of the empire is well underway.
weaken the dollar…stocks to the moon.
till inflation starts putting pressure on input cost…then earnings will take a hit…then stocks crash.
i’m beginning to wonder if that will ever happen.
Looks like the green light for 2 more years of gold price hikes. I am more certain gold prices will go above $2,000 per ounce before the interest rates are raised. Possibly $2,500.
I disagree. Nothing in this Fed report tells me inflation.
But, we shall see.
Oh, but now we’re going to keep rates at 0% for atleast 2 more years…. Really? DUH! We’re heading back into recession and we’re going to be cutting government spending and raising taxes.
Short-squeeze.
Only $2,500? Your French Curve must be missing.
I am not so sure.
No one really expected that rates were going up. We’re going into recession, and we’re going to be cutting spending and raising taxes (or having another battle royale that will crush consumer confidence further) and that will just make the recession worse.
IMO, the big fish waited for the smaller fish to get their short-positions in place, since everyone knows stocks are going to continue to fall without QE and fiscal stimulus. Look at the initial move… From +100 to -200.
Then, once the technicals said that people were over-short, then ran a big dollar short-squeeze. The shorts have to cover or lose their butts, just adding momentum to the upside.
I fully expect this gain to be retraced in a day or two.
Remember, we got these wild swings back in 2007 and 2008 too. 4, 6, 8% moves in an hour. But the general trend is down-down-down.
That’s my guess.
Good guess. Seems to me we retrace to the S&P 1230-1250 range and just when Mr Public’s faith in buying the dips is renewed, he gets crushed with a drop below the previous low. Rinse and repeat until we retest the March 2009 lows.
Without increased accomodation from the Fed, we’ve got unfinished business in the stock market. The rally over the last 2 years was based on the assumption that the Fed would keep easing until the real economy took over. Well, easing has stopped and the real economy is sputtering. We may finally be getting to the point where the real market price is revealed.
“S&P’s action didn’t really tell us anything. Everybody who reads the newspaper knows that the United States has a very serious long-term fiscal problem.”
-Fed Chairman Ben Bernanke April 2011, when S&P placed the United States on credit watch
- Good thing the Bernake is on the job pulling all the levers to guide us through this mess properly.
Two years of low rates means that the boomer retirement wave will be well underway squeezing the GDP as their consumptive spending falls even more than it already has. OTOH, Bernanke could pull a swift one on short notice since we’re in uncharted waters.
Calif. Revenue Falls 10% Short of July Forecast (Bloomberg)
California collected 10.3 percent less tax revenue in July than projected, putting the most populous state closer to “drastic” cuts to universities, libraries and health programs, the state controller said.
Sales taxes were 12.5 percent, or $139.4 million, below forecasts, while corporate receipts were down 19.3 percent, or $69.5 million. Personal-income taxes were 2.9 percent, or $89 million, higher than projected in May, Controller John Chiang said in a statement.
The July numbers widen the gap between actual receipts and additional revenue on which Governor Jerry Brown and Democrats based their new budget, Chiang said. That $86 billion spending plan signed into law June 30 cut spending by $12 billion and counted on $4 billion in higher-than-forecast tax revenue from a recovering economy.
“While July’s revenues performed remarkably similar to last year’s, they still did not meet the budget’s projections,” Chiang said in the statement. “While we hope for better news in the months ahead, every drop in revenues puts us closer to the drastic trigger cuts that could be imposed next year.”
“Personal-income taxes were 2.9 percent, or $89 million, higher than projected in May, Controller John Chiang said in a statement.”
That was the one sliver of good news, but how long will that hold with the economy slowing?
AZ beat income tax projections… but only becuase fewer people are able to take the mortgage interest deduction because they’ve been foreclosed on.
http://market-ticker.org/akcs-www?post=191863
Ratigan is mad as hell. This is one of the few principled truth-tellers tolerated by the MSNBC, as without him their ratings would be even more dismal. America, maybe it’s time you got a little pissed off as well.
Supply side economics. Use debt to allow people to buy more than they sell so corporations can sell more than they buy.
The people get stuff, and debts they are going to default on. The rich get a bunch of ledger entries called money that go away when the people default on their debt.
Who is the sucker?
But 99.99% of Americans are clueless.
Seriously, ask people if more money in the economy is good or bad. I doubt 1% will realize that money is created by being borrwed into existance, and more money simply means there is more debt.
What % would understand the paradox of thrift? That you can’t sell more than you buy, unless someone is buying more than they sell?
People, in general, are CLUELESS.
He nailed it. Always liked him when he hosted Fast Money.
Read the comments. One guy says something like “Ratigan should go off like this as a guest on a show more people watch.” Funny.
I’m kicking this Brazilian Pepper Tree’s ass. I am happy to go above the role of renter in this scenario.
Cue the realtor!
“The pride of eradicating invasive species!”
How about that late day Tea Party stock rally?
When will disenfranchised young Americans join their British brethren and
rebel against the incredibly high punitive unemployment rates and refuse to support my Social Security? I earned mine, now contribute at a significantly higher percentage! Actually, I did earn most of mine, which Tea Partiers will deny. I worked my ass off for over 40 years.
No transparency with pay-in vs. pay-out. Needs to be totally clear. The high unemployment affects the old as well as the young. Let’s get over the blame game, please!
“No transparency with pay-in vs. pay-out. Needs to be totally clear. The high unemployment affects the old as well as the young.”
Remove the veil and you’ll find millions of under sixty-five losers on SSDI, the disability program. States tired of supporting young minority males simply reclassify them as 5150, mentally disabled, and presto, another local expense shifted to the federal budget.