Bits Bucket for August 11, 2011
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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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How about that U.S. civilian labor force participation rate? It’s at about the lowest level since women’s liberation led to mass entry of females into the labor force during the 1970s decade, and appears to still be steeply declining.
Who needs to work when the technocrats can just engineer us into prosperity?
If everyone gets dumb enough, prosperity will always be just around the corner.
From yesterday’s UK Daily Mail:
“They respond only to instinctive animal impulses - to eat and drink, have sex, seize or destroy the accessible property of others.
The depressing truth is that at the bottom of our society is a layer of young people with no skills, education, values or aspirations. They do not have what most of us would call ‘lives’: they simply exist.”
What do you mean “no skills”? Have you ever watched how fast they can text?
Are there jobs for them to fill?
There may be, but those jobs probably aren’t what they envisioned when signing those student loan docs.
Expectations can be very useful motivators, to a point.
Hopefully, some of them can put out some good music.
Count me among the ranks of the unemployed. I just resigned on Monday with no job on the horizon. We’re moving since my (clearly) better half got a promotion and it’s a smaller town than SF, so finding a job that pays as much as this one won’t be easy.
But this job has been one of the worst from a satisfaction perspective. I just keep hearing TSE’s “Hollow Men” as I get off my bike and take elevator up to the penthouses of power.
I think that I’ll take my time and concentrate on finding some land there with water and raise the boy up right.
MrBubble
“aren’t what they envisioned when signing those student loan docs.”
They have to get loans in the UK too? I thought education was free over there.
They have to get loans in the UK too? I thought education was free over there.
Not in the UK. IIRC correctly State U’s over there have tripled their tuition rates.
“Almost three-quarters of universities that have announced their tuition fee plans have opted to charge the maximum £9,000 for at least some of their degree courses from 2012.”
That would be about $14,595 at today’s exchange rate. Our local State U’s are a bargain by comparison
http://www.guardian.co.uk/education/2011/apr/18/tuition-fees-universities-maximum-charge
“They respond only to instinctive animal impulses - to eat and drink, have sex, seize or destroy the accessible property of others.
The depressing truth is that at the bottom of our society is a layer of young people with no skills, education, values or aspirations. They do not have what most of us would call ‘lives’: they simply exist.”
I live next door to such a kid. And I would put the blame for her character on (wait for it) Mom and Dad.
From what I’ve seen, they’ve done nothing to motivate her butt out of bed and over to the school bus stop since, well, 2005. Because sitting at home and listening to rap is much more important. And you should her the obscenities in some of those (I hate to label them as songs) selections. I’d have been in big trouble if I’d ever played anything like that.
She also has quite a running the streets all night habit, and yes, the fellow street runners seem to be of the dress alike/look alike/use the same hand signals sort. (It’s spelled g-a-n-g-s.)
I guess it goes without saying that she has a huge chip on her shoulder, and it’s growing bigger by the year.
I don’t see a good ending for this story.
Congrats Mr. Bubble.
Sounds like a half-and-half Oil City plan to me. Very good situation to raise a boy.
Many, MANY parents shouldn’t be.
“Congrats Mr. Bubble.”
Thanks! I am seriously bummed that we are gone at the end of the month and the tomatoes won’t be ready until September. Tempus fugit. I’ll get it right next year…
“We’re moving since my (clearly) better half got a promotion and it’s a smaller town than SF, so finding a job that pays as much as this one won’t be easy.”
Go easy on yourself, though I feel a tinge of envy. Though I also consider my wife my (clearly) better half, especially when it comes to work capacity, she prefers to work as a volunteer to working for monetary income. So count your lucky stars your wife got a promotion — congrats! I have great faith that you will find something suitable to your talents, especially given that you have a perfectly acceptable explanation for why you left your previous position, opposed to, say, your employer letting you go.
You just described every clueless goober in the US (90% of adult population)
Prosperity through manipulation. Our time.
And when the boomers retire it is goin up sharply.
Will boomers be able to retire?
Good question. I think that for most people the concept of completely retiring is a pipe dream. Few will have sufficient savings or a pension. That means that for most it will be a discounted Social Security benefit plus whatever meager savings the have in their 401K. Most will have to continue working at part time jobs until they can no longer work, at which point family members will have to take care of them in their final years.
I suspect that only the top 10% will be able to “retire”.
That’s what I envision. That situation alone will rebalance much of our current system from housing to labor to the markets.
Took the words out of my mouth Bill…And if the answer is they have no choice but to retire, what will retirement look like ?? Small condo…Mobile Home Park…Tent city…??
To be honest, I don’t see much wrong with mobile home park and small condo. Those investor commercials of retiring on a horse farm or touring Alaska, yes those are the pipe dream.
Yes. And at some level, housing prices will have to go down until the housing we have is affordable. In areas with jobs it will have to be affordable to those with jobs. In areas without jobs, it will have to be affordable to those who have retired.
To be honest, I don’t see much wrong with mobile home park and small condo ??
Neither do I…What about tent city ??
Got the HOA problem with a condo. Trailer park has its problems too, though some are pretty mellow if you don’t make trouble. We have some really nice ones around here and I kind of envy them their carefree living. Hope we can get out from under our place and into something like that in time.
I think plenty of us are willing to work for as long as we can, but the employers may cut that short. So then it’s casting about for parttime work. I knew a bunch of ol’ boys who drove rental cars for Dollar Rental, returning or transferring them, for basically minimum hourly wage. At the time I didn’t know why they didn’t just live off SS, but now I understand.
“Yes, those are the pipe dream”
“”Well, you know what you can do with your pipe dream now, you damned b1tch!”.” –The Iceman Cometh
” And at some level, housing prices will have to go down until the housing we have is affordable”
FWIW, housing prices did not fall during “La Crisis” in Mexico.
“In areas without jobs, it will have to be affordable to those who have retired.”
Nothing will be affordable if they retire while in debt. But if they retire with SS and Medicare and didn’t buy or re-fi a house within the past 8-10 years, they should be fine. Contrary to what the investment advisors say, you don’t need 80% of your peak income to retire. My estimate is that you need about $25-30K and a paid-off house for one person, about $40K for 2, to live well, if not lavishly.
$40K could easily be 80% of peak income.
I agree Polly, but this was coming from brokers with clients making $150K-$200K a year.
you need about $25-30K and a paid-off house ?
Or paid off tent…
If you mean get layed off and not be able to find another job, then sure they’ll be able to retire.
I guessing without the pensions and bennies as well.
Today the decision to retire is more often in the hands of the employer than the employee.
My 56 y.o. BIL was “bought out” from Motorola two years back. Luckily he hopped through a few contracts and is now back to full time elsewhere. When we have a few beers he likes to share his scorn for those that simply declare they will work until…70, 75, 80 - as if “it” were really just up to them.
If you are over 45 and smart, you’ve already begun developing “something on the side”…….probably for the rest of your life.
I’m finding that, whether it makes sense or not, people would rather pay you $80-100 hour when they actually need you, than $15-20/hour full time.
Of course, things are even better when you get a full time job, but get to keep the “side jobs” going. The goal is getting to the point where I can get by on 15-20 hours a week.
“Today the decision to retire is more often in the hands of the
employerhealth insurance company than the employee.”“When we have a few beers he likes to share his scorn for those that simply declare they will work until…70, 75, 80 - as if “it” were really just up to them.”
This is why I have been thinking about a retirement career for years. Art, writing, tutoring, crafting, and other things I can do into old age. My mother is still doing volunteer work at 86. I think I can find a way to bring in a side income until 85.
And when I can no longer earn an income, I can babysit my great grandchildren so my grandchildren can take me in.
Art, writing, tutoring, crafting, and other things I can do into old age. My mother is still doing volunteer work at 86. I think I can find a way to bring in a side income until 85.
My great aunt was a working artist (painter) well into her nineties. My aunt (the great aunt’s niece) is also a painter — she’s 84.
My mom is 85 and still doing quite a bit of volunteering.
Will boomers be able to retire?
Only the front half. Barring a miracle, the back half are screwed.
I suspect the front half will end up getting screwed as well. It looks rosy for some of them now, but that could change pretty quickly.
“I think that I’ll take my time and concentrate on finding some land there with water and raise the boy up right.”
SV thinks this is a good plan MrBubble. I type this as I rest on the side of a Rocky Mountain cliff viewing paradise.
Nice view! Our temp housing may include a view of the Pacific from Pismo Beach.
“Donny was a good bowler, and a good man. He was…he was one of us. He was a man who loved the outdoors, and bowling, and as a surfer he explored the beaches of southern California from La Jolla to Leo Carillo, and up to Pismo.”
I live in Pismo if you need any suggestions, i would be happy to help. There are no jobs, so bring lots of $$$ as you will need it, things are not cheap here, but it is Paradise….
Thanks for the offer. We have friends in property management in Pismo who are helping us with temp housing, my wife will be working in Edna Valley and I will be biking if I find a job (most likely in SLO). Any info about the area is welcome!
All in good time. Pismo merely has much further to fall. Much much further.
Keep your ugly effin’ goldbricking a$$ out of my beach community!
White House said to set goal easing housing-price pressure
By Bloomberg, Published: August 10
Aug. 10 (Bloomberg) — The Obama administration is seeking ideas from investors on how to convert thousands of foreclosed properties owned by government-backed entities into rental homes, administration officials said.
The Federal Housing Finance Agency, the regulator of Fannie Mae and Freddie Mac, will be joined by the Treasury Department and the Department of Housing and Urban Development in soliciting proposals, said the officials, who requested anonymity because they were not authorized to speak publicly in advance of an announcement planned for later today.
The goal is to reduce the number of foreclosed properties and ease the price pressure on the housing industry, according to a report published earlier by the Wall Street Journal and confirmed by administration officials.
…
“The goal here isn’t to help investors. The goal is to provide quality affordable housing.”
1. Even “helping investors” is not the goal, that will be the result. Guaranteed.
2. There is no such thing as quality affordable housing. You’re either in hock for life in something nice, or renting in a slum. That’s how things go.
3. Are these investors going to buy the homes outright, or just provide landlord service?
3. And here’s my idea for the Obama Admin: investors can buy those Fannie/Freddie houses IF AND ONLY IF they didn’t sell any mortgages to Fannie/Freddie in the past 8-10 years. Anything else is just laundering funny money through the taxpayer. And if the high-falutin’ economists can’t figure this out, then I officially give up too.
Bruce Norris (The Norris Group) is the king of REO flippers in (Riverside County) So Ca, and based part of his business model on it, along with lending. He was just in DC as an investor, talking to F&F, and the FHA about making it easier for investors to make $ right now.
I’m wondering if that roundtable was the origin of this GSE REO rescue plan.
His internet radio show is usually really interesting. Check it out.
http://www.tngacademy.com/mp3s/norris-radio-show-carousel.html
Bruce Norris (The Norris Group) is the king of REO flippers ??
Don;t know much about this guy but I know the business model;
Is this business that difficult if you have the resources that may only be costing you 2% ?? If you make 5% on a flip (quite modest really) and do it twice a year you have made a 500% return of your invested capital…Now, times that by the hundreds and you can see why (as always) the big boys make most of the dough on the way up and on the way down….Nothing new here…
“He was just in DC as an investor, talking to F&F, and the FHA about making it easier for investors to make $ right now.
I’m wondering if that roundtable was the origin of this GSE REO rescue plan.”
Guys like this are a key reason I believe they should just auction the F&F REO homes and get the gubmint off the housing market’s back. In a time of tight budgets, why should the U.S. taxpayer be forced to make up losses on failed real estate investments?
Guys like this are a key reason I believe they should just auction the F&F REO homes and get the gubmint off the housing market’s back. In a time of tight budgets, why should the U.S. taxpayer be forced to make up losses on failed real estate investments?
There’s a Freddie REO just up the street from me. Place is a real dumparoo.
And it’s just a few feet away from one of Tucson’s busiest north-south streets. Good luck getting any sleep in that house. Or even hearing yourself think.
The asking price is $98,000.
Methinks that it’s just going to sit there for a long time.
It is interesting that the more money someone makes appears to increase the drive to make even more.
There must be more money.
Bruce Norris had the CEO/Pres of MERS R.K. Aronold (11/27/2010) on his radio show and it was a great education on MERS.
He also had Foreclosure Radar Pres, and others. This is a great source for time sensitive information and general knowledge: http://www.tngacademy.com/mp3s/norris-radio-show-carousel.html
Muggy
Update us on your son’s issue decision, when you reach it.
Have a great day everyone.
There is no such thing as quality affordable housing.
And the sheeple have been conditioned to believe that is housing is supposed to be unaffordable, and not just in the USA.
We’ve spent the last decade trying to redefine “affordable.” We’ may spend the next decade trying to redefine “quality.”
“The goal is to reduce the number of foreclosed properties and ease the price pressure on the housing industry.”
“… ease the price pressure on the housing industry.”
LOL. If they were talking about, say, gasoline prices then this “price pressure” that they want eased would be rising prices. But the price pressure they want eased for housing are falling prices.
From a marketing point of view if a seller wants to move inventory then he should lower prices. But in the case of housing the PTB feel that prices must be kept up because prices back the collateral that the banks hold.
So the interest of the PTB is not is making available to homebuyers houses that they can buy, the interest is keeping the banks solvent.
The pitch that is fed to FBs is that the PTB wants to save them. But the reality is the PTB wants to save the banks.
Everyone can use gasoline. Nobody wants an overpriced pos cheaply-made/renovated house.
liz pendens
You’ve got that right, the difference between a want and a need.
We sent out a cash & close letter detailing our criteria to the GSE’s, with no response.
Seriously, we’re as clean as a buyer there is, so what’s the problem?
You don’t have a lobbyist.
oxide
True fact. I’ve tried to pierce the shadow inventory and like so many others here, have had the door slammed in my face.
I am seeing new listings increase, but between the REO’s, SS’s, and some private sales, the locations are unacceptable (by schools, freeways, or main streets). They seem to still be unloading the losers at non-loser prices. Coming down from last year, but still the prices are ridiculous. (So Ca)
“Seriously, we’re as clean as a buyer there is, so what’s the problem?”
You only want to buy one. I suspect they are not currently set up to sell one house at a time to anyone.
“Seriously, we’re as clean as a buyer there is, so what’s the problem?”
:raisinghand:
As are we. All cash. Whats the problem U.S Government? You do want the economy to recover as much as I do right? RIGHT? I have cash and I’m ready to “stimulate the economy” so why are you getting in the way of it?
You all suck U.S. Government. You’re bought and paid for by the Housing Crime Syndicate who are nothing but a component of the Corporate Crime Syndicate. You know those guys, U.S. Government. You know them well. They are your masters.
FUH-Q All U.S. Government. You filthy crooks. Off A Cough you worthless maggots.
There’s a price that will clear the oversupply of pos cheaply-made/renovated houses. It always comes down to “Price it well, it will sell. Price too high, wait and sigh.”
It always comes down to “Price it well, it will sell. Price too high, wait and sigh.”
We have a poet in our midst.
The PTB could save the banks without dragging in taxpayers to propping up housing prices; why not just hand over QE3 dollars to the failed banks and all underwater households to make them all whole? The Fed can print up the money electronically and directly deposit it in their checking accounts. All these guys who made ridiculous real estate investments can be made to look smart through the lens of the rear view mirror. (Forgot my sarcasm tags — sorry…)
“…the interest is in keeping the banks solvent.”
Yeah, you are preaching to the choir around here.
The problem, as it always has been, is getting the sheeple to understand this.
In this case, the investor is the FedGov, you and me. If the Feds cut the GSEs lose the housing market will collapse. Perhaps a scheme to hide the losses, extend and pretend?
The article implies that Morgan Stanley’s report has something to do with the government scheme to be announced. Not convinced that is so.
lose -> loose
proofeading is for loosers.:D
Coffee is for closers.
Coffee if for cloosers.
Alpha-
Just want to thank you here publicly for bringing a smile into every day.
Well, thanks, Ms. Hansen. You should see me dance.
+1 Blue Skye. Is the gov taking marching orders from a bank? (Probably; after all they “own” the Senate).
But I have two more comments:
1. Banks and R’s have been screaming to “reform” and “get rid of” and “liquidate” Fannie and Freddie for quite some time. Perhaps this strategy is part of that. How else would you liquidate Fannie/Freddie?
2. The government wants investors to “buy” houses in order to turn them into “rental” properties. Can the government really control this? Once the investor buys the house, what’s to prevent him from flipping it up, or worse yet, flipping it downward into slumland? The government doesn’t have the money or manpower to monitor this, that’s for sure.
3. Does this remind anyone else of the student loans, where gov backs the loans but the bank can raise the interest rates and collect juicy “servicing” fees? President Obama worked VERY hard to move those student loans back to the government, attaching that bill to Obamacare by reconciliation. Why would Obama work so hard to un-privitize the student loan market, but then work to re-privitize the mortgage market?
Maybe what happens to student loans will not bring the whole “econonmy” to its knees.
The government wants investors to “buy” houses in order to turn them into “rental” properties. Can the government really control this? Once the investor buys the house, what’s to prevent him from flipping it up, or worse yet, flipping it downward into slumland? The government doesn’t have the money or manpower to monitor this, that’s for sure.
One of the problems with this “turn it into a rental” idea is that many of our nation’s housing markets already have a glut of rentals. That’s certainly the case here in Tucson. I suspect that the same is true up in Phoenix.
What’s more, we only so many people to fill the houses, whether they’re rentals or not. You can’t rent or sell to vapor people.
Yep, that’s what crashed the housing bubble too. We ran out of people.
It’s amazing to me that the PTB can’t figure that out. Shifting the inventory from for sale to for rent doesn’t change anything. Right or wrong, investors are buying houses and renting them out right now. What does the gov’t think will happen when they create a huge supply of rentals? Rents go down and demand from investors to buy houses goes down with it.
You can’t “fix” this. Stop trying.
“If the Feds cut the GSEs lose the housing market will collapse.”
1. The housing bubble long ago popped, way back in Spring 2006.
2. The GSEs already collapsed, way back in Fall 2008.
3. The U.S. taxpayer was involuntarily forced to bail them out.
4. We are well on the way to turning into Japan because of ongoing, though futile, efforts to prop it all up.
Revisionist history won’t get you very far on this argument.
Oh, the disaster is all behind us? Consider for a moment that we are only at the beginning of this process of collapse. The downward potential should scare the crap out of the Masters of the Universe.
I travel a bit, and I still do not see houses that are affordable for average people who are not willing to give it all (and more) for a decent place to live.
Agree. That’s what I mean by no quality affordably housing. You used to pay a premium for a really nice house. Now you have to pay a premium just for move-in ready. In my area, you have to pay a premium for not being destroyed.
“The downward potential should scare the crap out of the Masters of the Universe.”
I really couldn’t care less about the well being of the Masters of the Universe. If they made dumb investments, let them ingest the fruits of their own stupidity. Why should Main Street American taxpayers be forced to bail out Wall Street banking’s greatest fools at a time of super tight budgets? Let them fail, let private investors who are gambling on failed real estate investments and the firms who made them get crushed, and let anyone who is left standing have first dibs on the spoils.
“I travel a bit, and I still do not see houses that are affordable for average people who are not willing to give it all (and more) for a decent place to live.”
This is exactly why Turbo Tax Timmy’s price support program is beyond insane. Did he somehow miss the memo that Uncle Sam’s goal is to make housing affordable, as opposed to unaffordable?
Turning them into rentals will drive down rents. This turns the investors that have already purchased homes to rent them out, to go cash-flow, and they will default and go through foreclosure.
None of this changes the fact that we built an average of 2 million houses a year for 5 years while we only needed 1.2 million houses. That is 4 million too many houses. We are now building 1/4th as many houses at 500K-600K. At that rate it would take 7-8 years to work off the excess houses, assuming no household deformation.
So, the government is going to take over the houses? Okay, but they have to leave them empty and off the market. If they rent them back onto the market, then there is still 4 million too many houses.
“If they rent them back onto the market, then there is still 4 million too many houses.”
The 4 million ‘too many houses’ is an artifact of the FedGov’s price ’stabilization’ (aka ‘inflation’) policy. Let the prices drop to levels the market will bear, and private investors (like Bruce Norris) or end-users can decide what to pay for them. So long as prices are artificially supported, the illusion of ‘too many houses’ will remain, just as a few years ago, there was so much overproduction of cheese that FedGov had to store it in caves. So far as I am aware, you can’t store a McMansion in a cave.
You would think they would have learned this lesson about price supports and surpluses by now…
4 million too many houses is not just a matter of price.
If prices were $1, we still wouldn’t need 104 million housing units when we only have need for 100 million houses.
There are condos down the street from me for sale at $23K. yeah, $23K. Less than a car in many cases. But they can’t be sold because there are simply not people interested in buying them. Price is not the limiting factor.
If houses are not way below cost of rent where you are, then you need to get the foreclosures flowing where you are, like they are where I am. Then you won’t be able to sell condos for less than a car too.
There are condos down the street from me for sale at $23K. yeah, $23K. Less than a car in many cases. But they can’t be sold because there are simply not people interested in buying them. Price is not the limiting factor.
What’s worse, you can’t put a key in the ignition of your condo and drive it away.
Thanks Darrell. I’m in Phoenix as well and I forget sometimes that many peope here are in markets that aren’t as far along as we are. The problem is fixing itself here, but as you said, it will take several more years to work off the supply. And that assumes people keep moving here. One of the joys of living in a state that allows trustee sales and has pretty strict anti-deficiency laws I guess.
Thanks Darrell. I’m in Phoenix as well and I forget sometimes that many peope here are in markets that aren’t as far along as we are.
All right, you two. When are you coming down to Tucson for a meetup? (Having one of those with HBB-er AZGolfer next Tuesday, BTW.)
“If prices were $1, we still wouldn’t need 104 million housing units when we only have need for 100 million houses.”
You might be downright surprised how many people would shoulder the expenses of maintaining a home if the purchase price were only $1. Graduate students would happily purchase homes for $1 and maintain them for less than the cost of renting graduate student housing. Unemployed individuals would buy homes at a price of $1 and simply defer maintenance costs until they were able to once again find employment. The number of U.S. households would rapidly expand to provide demand in excess of the supply of 104 million houses, if only they were all offered at a price of $1.
In short, I disagree with you, and the lessons provided by any first-year undergraduate economic text disagree with you as well.
Yep. Too many houses means lower prices. Try as they might, Congress can’t effectively repeal the law of supply and demand.
Sure they can! Just ask their lobbyists!
But they can certainly throw a wrench into the normal equilibration of supply and demand by artificially propping up prices, then turn around and complain about the ‘excess supply’ of homes for sale.
I had no idea the “White House” could legally own so many homes. Silly me! I was under the misconception that the Fed was the REO owner, with all those MBS they took under the wing of their balance sheet.
As far as how to “fix” the housing market, I still see a severe distrust of the free market’s invisible hand’s ability to function far better sans the shackles of government as a severe impediment to their further efforts. Why not just auction the F&F REO homes to the highest bidders and move on to more vital national issues than trying to turn real estate investors into McMillionaires?
Home / Business
White House looks to shed foreclosed homes
Solicits proposals to purchase or rent properties
As of the end of June, Freddie Mac held nearly 60,600 foreclosed single-family homes, known as real estate owned, and Fannie Mae reported more than 135,700. As of the end of June, Freddie Mac held nearly 60,600 foreclosed single-family homes, known as real estate owned, and Fannie Mae reported more than 135,700. (J Pat Carter/Associated Press)
By Lorraine Woellert
Bloomberg News / August 11, 2011
WASHINGTON - The Obama administration, aiming to boost a housing market showing little sign of recovery from the 2008 credit crisis, is seeking ideas for renting, selling, or disposing of foreclosed homes controlled by the government.
The Federal Housing Finance Agency, regulator of Fannie Mae and Freddie Mac, US Treasury Department, and the Department of Housing and Urban Development announced the solicitation yesterday.
The agencies are seeking to shrink the pool of foreclosures and boost home prices by finding investors for properties owned by the Federal Housing Administration and US-run Fannie Mae and Freddie Mac.
Selling or renting properties in blocks “may reduce taxpayer losses and meet the enterprises’ responsibility to bring stability and liquidity to housing markets,’’ FHFA acting director Edward DeMarco said.
President Obama has struggled to right the housing market since he took office in January 2009, four months after losses stemming from defaults on subprime loans pushed Fannie Mae and Freddie Mac into government conservatorship.
Freddie Mac and rival Fannie Mae have survived on government aid since they were seized in September 2008. Since then they have drawn almost $170 billion in Treasury aid to remain solvent.
As he prepares to seek reelection next year, critics say Obama has little to show for his efforts. The administration’s Home Affordable Modification Program has helped about 650,000 borrowers keep their homes, far short of the 3 million to 4 million it had targeted.
“In the 2008 campaign they said the president would come in and fix the housing problem,’’ said Keith Hennessey, who was director of the National Economic Council under President George W. Bush. “We literally couldn’t see a way that policy could solve the problem. I think they’ve figured that out now.’’
With yesterday’s announcement, the focus shifts from keeping borrowers in their homes to finding a future for the houses whose owners couldn’t be helped.
“They have mishandled the foreclosure process, now they’re stuck with all these properties,’’ said Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business. “This is political, but there’s also a certain amount of necessity here.’’
…
My take on this idea:
The housing bubble was THE reason why house prices went up so sharply from the late 1990s to 2005 or 2006. Prices did not increase because the personal incomes of Americans increased — they’ve been flat or declining since the 1970s. They did not increase because of spike in household formation. And you can also omit job growth, because after the late 1990s dotcom boom, that’s been pretty lackluster. Likewise, the rate of inflation — house prices generally track it. Inflation during this period was pretty moderate.
So, now prices are falling back into line with historic metrics of incomes and rents. To repeat, the median house price in any market is 3X the median local income. And the purchase price of a rental property should be 100-120X the monthly rent that one can expect to collect. This is not the same as the rent that one thinks that he/she needs to cover the mortgage. Tenants don’t care about that. And neither does Mr. Rental Market Price.
I fear that this latest effort will be like previous government efforts to prop up house prices (HAMP, I’m looking right at you). Meaning that it will be a very expensive failure.
Will be? Have you forgotten the $1 TRILLION already given to Wall St. for their failure?
How much has that 3x income changed once you take into account changing interest rates, credit, and other social factors?
How and why did the U.S. taxpayer get shafted with F&F losses to begin with? I can’t remember us getting to share in any of the (private) gains when these companies were flying high.
White House looks to shed foreclosed homes
Solicits proposals to purchase or rent properties
As of the end of June, Freddie Mac held nearly 60,600 foreclosed single-family homes, known as real estate owned, and Fannie Mae reported more than 135,700. As of the end of June, Freddie Mac held nearly 60,600 foreclosed single-family homes, known as real estate owned, and Fannie Mae reported more than 135,700. (J Pat Carter/Associated Press)
By Lorraine Woellert
Bloomberg News / August 11, 2011
WASHINGTON - The Obama administration, aiming to boost a housing market showing little sign of recovery from the 2008 credit crisis, is seeking ideas for renting, selling, or disposing of foreclosed homes controlled by the government.
The Federal Housing Finance Agency, regulator of Fannie Mae and Freddie Mac, US Treasury Department, and the Department of Housing and Urban Development announced the solicitation yesterday.
The agencies are seeking to shrink the pool of foreclosures and boost home prices by finding investors for properties owned by the Federal Housing Administration and US-run Fannie Mae and Freddie Mac.
Selling or renting properties in blocks “may reduce taxpayer losses and meet the enterprises’ responsibility to bring stability and liquidity to housing markets,’’ FHFA acting director Edward DeMarco said.
…
Stability? Where were they when house prices doubled in like 5 years?
Oh, right. Supply-side economics requires ever growing debt and increasing house prices was seen as the collateral for that debt that the private sector so desperately needed.
Now, with house prices falling, the collateral underwriting the new debt is vaporizing and is going to trigger cascade default through the $24T in business and household debt.
We keep thinking that through new financial innovation that debt trees can grow to the sky. The market keeps proving us wrong.
The housing bubble. The tech bubble. These are symptoms of supply-side economics use of debt to lift demand above peoples’ ability to pay from their wages.
With incomes stagnant, greater debt was the way to keep the merry go round moving. When productivity rises, fewer people are required to produce the same amount. If people’s incomes rise, people will consume more and employment will tend to stay the same. If incomes are stagnant, people will consume the same amount, but fewer people are needed to produce it. Of course in the real world, this is complicated by the fact that people consume a variety of products, both domestic and imported. But in general, a rising demand can only be maintained by rising wages.
why am I up? Its great sleeping weather the windows are open and i have nice breeze
It was great sleeping here on the Upper Rideau Lake too. Clear sky after a day of thunderstorms and and pleasant 6 kt breeze gently rocking the boat.
Lucky you.
Front row seat to Hades here. 80f is the overnight low. 102f avg during the day.
We’re thinking of renaming the state to East Arizona.
Crazy smoky here last night from fires down in the Great Dismal swamp. And where there is smoke, there are lasers.
http://www.flickr.com/photos/ethanotoole/6031083387
Nice studio 757 I see 2 Denon 4500’s in the rack i use them too.
http://xfinity.comcast.net/slideshow/finance-10marketstocollapse/fort-lauderdale-florida/
“24/7 Wall Street: 10 Housing Markets That Could Collapse This Year”
A slideshow of 10 cities where housing is expected to fall. Mostly California and Florida, but also Bethesda.
Bethesda, Maryland
Expected price drop: -11.5 percent
Median family income: $114,100 (the highest)
Unemployment rate: 5.1 percent
Median home price: $417,000 (5th highest)
Projected to hit lowest level: Q3 2012
For someone waiting to buy, waiting for 10% is almost not worth it, especially at the rent differentials in my area.
417,000/114,000=3.66 x income.
Not so bad, really. Have we ever decided what the historical average is?
Hmm. Actually, 3.6 x income is about the highest on that list. Although most are right around that level. Except Detroit: $42,000 median house, $49,000 median income = .86 . The new ratio?
The old saw was rent = 1/4 x income and price = 100 x monthly rent. Never was sure where 50% tax rate (for middle earthers) fits in there, but I took it as 1/4 take home pay. This idea surely went out the window generations ago.
So the median price in Bethesda should be $237,500?
(.25 x $114,000) / 12 x 100
That’s about 2x income.
The 50% tax rate is for the 6th level of Minas Tirith. 2nd level paid 28% but with good deductions. The farmers on the Pelennor probably got EIC. Quite the run-up in second homes in the burbs of Osgiliath, but it went bust when the Nine moved into the big house in the mountains just across the River. Most of the homes went underwater, rather than go BK, the FB’s were allowed to make up their losses by serving beacon duty.
——-
That said, when I moved into a high rise, they required that the rent be 1/4 of my GROSS income, but your milage may vary.
Or $120K if you base it on after tax income. Extreme, I know.
28%. Yes if you are talking IRS marginal tax rate. It was quite a while ago, but I added up all the visible taxes I was paying as a cubicle dweller and it was north of 45%.
If it is a useful reference point to the past, in the 50s my dad was making $6K gross and bought a house for $10K. It was a nice house, but by today’s standards a “cottage”.
All those old saws were made back in the Good Ole Days- when the rich paid much higher tax rates (and the economy thrived nonetheless). And Gondor reigned supreme.
But I think they were based on gross income, since they were considered rough-and-ready estimates, not something requiring an accountant and tax records.
“I added up all the visible taxes I was paying as a cubicle dweller and it was north of 45%”
What did you expect toiling in Minas Morgul? To pay low taxes like the ring-wraith elite? Worker orcs pay the taxes. Job-Creators like the Riders pay much less, as is righteous.
True enough. The next part of the analysis was that the lifestyle I had to maintain to keep this pretigious position was costing me more than my net income. I wanted to just stop and live in a tree. Finally, I have made it to the forest. I hope they do not cut it all down to feed the fire.
Skye, wasn’t much different when I was a young-un. Family income something like $20K, family house under $30K. Working class housing, but it was pretty nice, and on a sizable lot.
True enough. The next part of the analysis was that the lifestyle I had to maintain to keep this pretigious position was costing me more than my net income. I wanted to just stop and live in a tree.
True story: One of my cousins did live in a tree. In a treehouse, to be precise. It was along the CA coast, and it was a rental that she could afford.
And when government breaks out the big ax and starts swinging at the budget and deficits? Wonder what effect that may have on that median income.
Short answer: historical average is a little different, but not much.
2002: $417K would buy a nice small post-war 3/2 cape. Median income — maybe $95K.
4.4x income, which is normal for Bethesda.
2011: the same capes are listed at $525K down from a peak of $620K or so.
Median income: $114K
4.4 income.
However, it’s hard to get an average today, because there is almost nothing at the $417K median price. There is a big blank between $280K condos and $525K small post-war houses.
———–
Today’s Houses: OLD Besthesda edition.
This is one of the few condos that was converted before 2004.
http://www.zillow.com/homedetails/4970-Battery-Ln-APT-101-Bethesda-MD-20814/37190914_zpid/#{scid=hdp-site-map-list-address}
1981 2/2 1000 sq ft. No photos.
It has a VERY long price history, showing the volatility of condos. Starts low, bounces around, flipped up like a sonofogun, sold in bubble, chased the market down, finally sold.
06/16/2011 Sold $260,000
06/21/2008 Listed for sale $364,999
11/07/2005 Sold $387,000
07/29/2003 Sold $298,000
06/03/2003 Sold $266,000
03/25/2003 Sold $175,000
01/31/2003 Sold $199,000
10/30/2002 Sold $182,000
04/23/2002 Sold $169,000
1997 - 2001 wild swings $100K –> $52K –> $100K
1997: Sold $105K <– probably when it was converted.
———-
And the VERY failed flip — destroyed edition. This is the cheapest detached house for sale in Bethesda, right on the DC/MD line:
http://www.zillow.com/homedetails/4710-Bayard-Blvd-Bethesda-MD-20816/37170006_zpid/#{scid=hdp-site-map-list-address}
2/1 1080 sq ft (including basement) 1923 fixer-upper. It’s a teeny house on a teeny lot, looks like the bathroom was an add-on later. Kitchen is destroyed. Probably needs $60K of work.
03/22/2011 $419,000
02/10/2011 $439,000
07/23/2010 $400,000
05/16/2010 $419,900
11/03/2009 $435,000
07/25/2005 Sold $552,000
2/27/2002 Zestimate $327K
06/12/1998 Sold $190,000
—————-
Bethesda prices will go down only when some kind of toxic disaster makes living there risky to one’s health. Otherwise, buy now or…
The second one could be a neat little house after a lot of repair. The basement has good windows, and you gotta like the toilet with the window over it. You could reverse-straddle and keep an eye on your neighbors, while you went about your biz.
If anything, the median price in Bethesda has been kept deceptively low by all the high rise condos that have been added to the mix.
You’re right jim. Condo prices can be very volatile, even in Bethesda. But if you’re looking for a SFH there, buy now or be…
“A slideshow of 10 cities where housing is expected to fall. Mostly California and Florida”
- please wake me when NYC is on the list. (grrrrrh!)
US homes got fewer foreclosure warnings in July
Report: Foreclosures, new home loan defaults slow in July amid lingering processing delays.
LOS ANGELES (AP) — Fewer U.S. homes entered the foreclosure process or were seized by lenders in July, the latest sign banks are taking a measured approach to moving against homeowners who have fallen behind on mortgage payments.
Some 59,516 homes received an initial default notice last month, down 7 percent from June and down 39 percent from July 2010, foreclosure listing firm RealtyTrac Inc. said Thursday.
The notices, which are the first step in the foreclosure process, have fallen 58 percent below their April 2009 peak.
Homes scheduled for auction also declined in July, while the number of homes seized by banks slipped 1 percent from June and slid 27 percent versus July last year, the firm said.
The slowdown in foreclosure activity is not due to an improving housing market. It’s the result of foreclosure processing delays and banks’ reluctance to take back properties while there is a glut of unsold foreclosed homes on the market.
“I’m wondering if we’re not seeing a new normal, where basically the lenders will move on these properties as quickly as they think they can sell them off in the market,” said Rick Sharga, a senior vice president at RealtyTrac.
Banks are working through foreclosure documentation problems that first surfaced last fall and an ensuing logjam in some state courts. Lenders also have put off on taking action against delinquent borrowers as U.S. home sales have slowed this year.
Another factor stalling foreclosure activity is the prospect of a broad settlement of government probes into mortgage lending. Attorneys general in all 50 states and major banks have been working to reach an agreement to settle claims of shoddy mortgage and foreclosure practices.
For homeowners already behind in payments, the slowdown is helping them remain in their homes longer — in some cases for more than two years — particularly in states like New York and Florida, where courts play a role in the foreclosure process.
All told, banks took back 67,829 homes in July, that’s down 34 percent from a peak set last September, RealtyTrac said.
“measured approach”(to moving against homeowners who have fallen behind on mortgage payments.) Can those guys spin or what!?
“Banks are working through foreclosure documentation problems that first surfaced last fall ”
I wonder what’s taking them so long?
Too much time playing Angry Birds?
Hey! How do think it got so popular?!
Farmville?
I like the idea of Farmville, but the real-time aspect would drive me nuts. (For the Facebook challenged like me, your farm runs all the time, not just when you’re actively logged into Facebook.) Someone told me a story that the way they discovered one of their friends had died is that all their Farmville crops had withered for lack of water.
Farmville is a nice place. No BS. It is an Oil City with higher prices, but still quite affordable. And there is are effete intellectuals with whom a bookworm such as myself might like to converse.
Quite flat, though - no likely prospects of a cave.
Too much time playing Angry Birds?
At least it’s more legit than what the SEC was doing…
Collateral Headline: Squatting Rises In June.
“the slowdown is helping them remain in their homes longer”
I wish the MSM would get the language straight. They are not their homes. They are houses. They are bank houses. The people in them are bank mortgagors; mortgage slaves. If they were home owners they would own the property.
Where does one get this “owned property”?
“I wish the MSM would get their language straight.”
The language they use is not meant to inform, it is meant to persuade.
They feel their job is to shape public opinion, and the tool they use for this shaping is language.
The houses are owned by Fannie. Fannie is owned by the taxpayers. Irresponsible people are living for free on the dime of the taxpayer with the government’s blessing. Its sickening.
Speaking of our friend Fannie … anybody watching the trickle of houses she puts out on homepath.com? Mostly junk, and not enough of it! In counties around NYC, there’s typically a dozen houses on offer, with 10 marked “under contract.” But the prices give one hope that comps are taking a hit.
Speaking of our friend Fannie … anybody watching the trickle of houses she puts out on homepath.com?
I sure am! And I have yet to see one that I would, ahem, consider attractive.
For those places, I think the term “dumparoo” is fitting.
I’ve noticed you have a lot more action in Tucson, Slim. We’re lucky to have 2 pages and you get about 20! Swore I saw something that approached livable near Speedway and Craycroft for about 65K a couple of months ago.
Re-al-TORs switched from “houses” to “homes” many years ago. They use “homes” that includes f*cking floating boxes of air as well as houses.
My favorite is apartment homes.
One serious oxymoron there!
Oxy,
To borrow a phrase from a HBB POB, I like your anger.
It’s long been established that Lying Realtors use mind games by employing words like “homes” but when average dopes on Main Street refers to houses as homes, it is then that I realize the insidiousness of the Housing Crime Syndicate.
Why rush to book a loss, when the longer you hold it in default the more profit you can bank on uncollected interest.
While it is in default it is profit. As soon as you foreclose, it is a loss.
The average house (AVERAGE) being taken back in foreclosure hasn’t made a payment in 2 YEARS. Yeah, 2 years.
How much bank profit and all that “new capitalization” is booking profit on non-performing loans? How much consumer spending is based on not having to pay for houseing while waiting for foreclosure?
“How much consumer spending is based on not having to pay for houseing while waiting for foreclosure?”
It’s probably the biggest stimulus we have right now. It benefits the banks, so the PTB hold their noses and let the little guys have this one bone.
“How much consumer spending is based on not having to pay for houseing while waiting for foreclosure?”
Last year, I read a Business Week article that said this very thing.
Sorry I can’t recall the issue date, but there it was. On paper in a major business mag.
It’s amazing how much Uncle Sam can borrow in a week.
Nearly $300 billion!
The Treasury Department had a lot of borrowing to do after it finally saw the national public debt ceiling raised at the last minute early last week. The old ceiling was $14.3 trillion. In just seven days the debt has increased nearly $300 billion. $292 billion, to be exact. THE SPENDING SPREE CONTINUES! It must, if the present big spenders in Washington hope to get re-elected next year.
Ah, but TTT got a good deal this week, especially yesterday when the 10 yr yield hit levels not seen since December 2008. Yeah, that December 2008.
“In just seven days the debt has increased nearly $300 billion. $292 billion, to be exact. THE SPENDING SPREE CONTINUES!”
Tell me again how the Tea Party won.
We will waste our way to prosperity.
The voters rode to the polling booth on their keep-your-government-hands-off-my-Medicare-paid-for Rascal scooters?
My mother is 85. Still walks the dog several times a day. Does her own shopping and all that stuff too.
She’s of the mind that, if more people walked and took good care of themselves, this country would be much healthier.
Does she know that her power chair will be paid in full should she choose to get one?
Does she know that her power chair will be paid in full should she choose to get one?
She sure does.
And, being the frugal sort that she is, I beg you not to mention this point near her. Because she’ll fly into a rage like you’ve never seen before.
I found Vancouver to be a walking city. Not just “walkable” the way the magazine articles describe DC and all sorts of other US cities where people drive everywhere. But actually a walking city. People of ALL shapes and sizes walked, ran and biked and used public transportation. People who walked without assistance would have been using canes or walkers in this area. People using canes would have been in wheelchairs in this area. And people using wheelchairs wouldn’t have been out without an assistant in this area.
And all of them used the busses. I have an extra CA$50 in my travel wallet at home because I took out enough money to take a cab to the airport, but even with two weeks worth of clothes and stuff, I was able to take the bus and commuter train with no problem for CA$3.75.
It was a pleasure to see.
Polly
You really nailed the city. Everyone seems to walk or bike - including the Grouse Grind !
The Canada Train from the airport to downtown is their bragging transportation right now.
Thank you for coming to Canada on your vacation.
Foreclosures of expensive homes take longer
By Julie Schmit, USA TODAY
Foreclosures are taking longer for more-expensive homes than for less-expensive ones, giving those homeowners more time in homes without mortgage payments, new research analyzed for USA TODAY shows.
From January through May, almost 400,000 homes were repossessed by lenders or sold to others at foreclosure auctions. By the time they were repossessed or sold, mortgages on the more-expensive homes were delinquent an average of 647 days, almost four months longer than the less-expensive homes, data from national mortgage tracker LPS Applied Analytics indicate.
The longer time frames occurred in 45 states and ranged from days to months.
LPS broke the homes into categories of those valued under $417,000 and those from $417,000 to $999,999.
Longer foreclosure times may seem to favor owners of more-expensive homes, but banks say loan size “doesn’t dictate the foreclosure process,” says Wells Fargo spokesman Tom Goyda. Lenders aren’t showing favoritism to wealthier people — they’re just doing what makes the most business sense,” says Sean O’Toole, CEO of foreclosure tracker ForeclosureRadar.
Industry analysts say other factors are likely affecting time lines, including the type of:
•Loan. Loans below $417,000 are generally owned by mortgage giants Freddie Mac and Fannie Mae.
Their processes lead to quicker resolution than if loans are held by others. “It’s a much simpler process,” says Jason Kopcak, mortgage loan expert at Cantor Fitzgerald.
Bigger loans, often found on pricier homes, tend to be held by lenders or investors. Banks are “moving the stuff they don’t own first,” to satisfy others and limit litigation, says Paul Miller, analyst at FBR Capital Markets.
•Home. Lower-priced homes have a larger pool of buyers. More may be exiting foreclosure via short sale, says Kyle Lundstedt, LPS managing director. Short sales occur when lenders sell for less than what’s owed on the home.
•Homeowner. Those who can buy expensive homes may have more resources to delay foreclosures, says Richard Bove, banking analyst with Rochdale Securities.
The more expensive houses are larger losses they can’t afford to eat, and larger interest income they can book as profit while dragging their feet on the foreclosure.
LloydBlankfein’s $52 Million Loss Leads Wall Street CEOs in August
By Christine Harper - Aug 11, 2011 (bloomibergi) 12:00 AM ET
“Lloyd C. Blankfein, chairman and chief executive officer of Goldman Sachs Group Inc. (GS), lost about $52 million of his personal wealth this month — more than the combined losses of four other Wall Street CEOs.
The heads of Bank of America Corp. (BAC), Citigroup Inc., JPMorgan Chase & Co. (JPM), Morgan Stanley and Goldman Sachs saw the value of their combined shareholdings fall by $94 million on paper since July 29, based on regulatory filings. That includes a $40 million plunge yesterday. ”
———–
Where’s Huey Long when you need him?
Maybe poor Lloyd can get one of those SNAP cards.
If so, he can buy “NO SUGAR ADDED” canned peaches laced with sucralose for 30% off!
Aha, now THAT was the annoying bald guy I got stuck behind at the Halal truck waiting on my $5 lamb & rice!
Money is borrowed into existance. Wonder where all the money that D.C. is borrowing into existance is going?
Dr. Evil.
Realtors Are Liars®
The Ten Housing Markets That Will Collapse This Year
Posted: August 9, 2011 at 6:26 pm
The real estate market is already in the deepest depression in modern U.S. history. If you think it can’t get any worse, think again. In several cities, the real estate market is about to drop even more. Home values in many of those cities, such as Las Vegas, have already collapsed as unemployment has shot higher. And with no hope of quick recovery, housing prices are expected to continue to fall. 24/7 Wall St. identified ten housing markets that are expected to drop by at least another 10% by 2012.
http://247wallst.com/2011/08/09/the-ten-housing-markets-that-will-collapse-this-year/ - 75k -
Check out the picture of Salinas in that story. Palm trees and a wide beach with hotels on it.
fail
Salinas in Ecuador. Someone just did a google image search, comes up as one of the first hits.
Just tried it. You’re right!
Bethesda doesn’t come up right either. Rowhouses like that are far deeper downtown. Bethesda is mostly SFH and ugly old converted condo towers.
10% is not a “collapse.” That doesn’t even bring it to 2002 prices…
California tax revenue plummets in July, raising fear of trigger cuts
By Shane Goldmacher, Los Angeles Times
August 10, 2011
Reporting from Sacramento — California’s tax revenue plummeted in July, missing expectations by nearly $539 million and raising fears that deep education cuts will be needed to keep the state budget balanced.
The bad news, announced Tuesday, came less than two months after Gov. Jerry Brown and state lawmakers patched together a budget on the assumption that a budding economic recovery would produce a $4-billion revenue windfall. Those hopes are now fading.
The plunge occurred before the recent Wall Street gyrations that wiped away many of the year’s stock-market gains. If the economy remains sluggish and the $4 billion does not materialize, cuts in public schools, universities, libraries, child care, and services for the elderly and frail will automatically take effect.
“Every drop in revenues puts us closer to the drastic trigger cuts that could be imposed next year,” state Controller John Chiang said in a statement accompanying his July revenue report.
http://www.latimes.com/news/local/la-me-state-budget-20110810,0,1467043.story - 198k -
“California tax revenue pluments In July.”
Okay, just who is it on this message board that does not see this as a deflationary event?
Less tax revenue means less spending, yes? Less spending means less money going into the System to be circulated, yes? Less money being circulated means there will be a shortage of circulating money, yes?
Is there anyone here that does not get this?
This is California. Can you give a real world example?
BA DUMP BA!
Definately deflationary. We can hand Wall Street money and they can buy commodities to drive up prices, but if people can’t buy at that price then Wall Street must keep buying up all the excess supply being pushed into the market. Like a Ponzi, it can’t grow to teh sky, and it will collapse under excess supply and not enough demand.
The exception, of course, is rare items that can’t easily be added to the supply. Oil and food are not those.
“rare items that can’t easily be added to the supply.”
Like what?
Currently? 4-5 year old, low mileage used cars.
Gold.
x-GSfixer…. SOOOO true.
My son totalled his car a month ago, and I can’d find a replacement car I want, at a price I’m willing to pay. School starts Monday and it is looking like we’re carpooling until I get him a car.
Anything under $3K has major mehcanical problems, is 15 years old, and 200K miles on it. Under $5K it may run and may even pass emissions, but it is 10 years old with 150K miles. I really don’t want to go into the $7K range for a 5 year old car with 100K miles, but it is looking like I have no choice.
It is so frustratng looking for a car I am willing to buy at a price I am willing to pay.
Let’s go back to the limitless debt days when I picked up my last used Ranger pickup, 16 months after orgiinal sale date, with 30K miles for $7K… had it 7 years with not a single reapir, just maintenance like tires, brakes and pil changes. So mad at my son for totaling it because he was testing while driving.
I’d make is dumb azz walk, but can’t. He’s a senior and taking duel enrollment class at Jr college and has to drive 5 miles between campuses in less than half hour. Wife won’t let him look for a job because she wants him to focus on school… ARG!
I’d make is dumb azz walk, but can’t. He’s a senior and taking duel enrollment class at Jr college and has to drive 5 miles between campuses in less than half hour. Wife won’t let him look for a job because she wants him to focus on school… ARG!
This kid sounds like a winner, Darrell. I’d feel privileged to be in a carpool with someone like him.
(In other words, take your time about replacing the car. He won’t be around the house forever, doncha know.)
When they first unveiled “cash 4 clunkers” as part of the stimulus mess, we concluded here that this would happen. Take several million used but perfectly serviceable cars off the roads and scrap them, what happens to the value of those remaining?
It is not cash for clunkers. That took big gas guzzlers off the market due to the MPG requirements. Still, the lots are flooded with big V8 trucks. Those are above the price range I’m looking for.
It is the small cars and small 4-cylendar mini-trucks that are no where to be found. I’m told the 4 and small 6 cylendar trucks are selling for even more than the V8s, when you can find them.
I’ve looked at a couple 4 cylendar trucks like what my son totalled, and anything in my price range is TOTAL piece of garbage.
8 years ago, everyone was leasing because “I’m always going to have a car payment, I’m going to trade it in after 3-4 years anyway, so lease is better”. And they got hit with a big milage penalty if they drove it too much too.
This mentality was flooding the used car market with tons of 3-4 year old, low milage cars at excellent prices.
No more. Everyone is keeping those cars, or atleast enough of them, combined with people switching to looking for used instead of new.
This is a demand problem causing a supply shortage, not an inherant supply problem on flat demand.
Don’t give the government any ideas, or we’ll have a “Cash for slums” program.
(In other words, take your time about replacing the car. He won’t be around the house forever, doncha know.)
If he keeps texting while driving, he may not be around at all for much longer.
How does your fancy ivory-tower economic theory of inflation and deflation change when you add the globalization term onto the end of your fancy equations?
Less spending means that businesses will make up the losses by outsourcing, merging and rightsizing, and lobbying for tax holidays. We’ve been fending off deflation in this way for 30 years.
That begs the question: Have we hit the bottom of the next big cheap ready to industrialize labor pool barrel? If not, will China colonize them and out us?
Africa. and China is already there.
That’s twice in 2 days you’ve nailed it.
You’re exactly right.
How does your fancy ivory-tower economic theory of inflation and deflation change when you add the globalization term onto the end of your fancy equations?
A very good point. There 6 billion+ people in this world who do not live in California and who will probably use those commodities that 36 million Californians won’t.
Globalization makes this more interesting (and scary) in that most governments, businesses and individuals have been more or less doing the same things.
Too much borrowing has led to too much supply/production to be handled during the deleveraging process. Most of the world has to go through the same deleveraging at the same time. The overall global trend will be towards deflation and stagnation.
However, that doesn’t mean specific events won’t be working against, magnifying or masking the global trend. The flow of jobs to lower wage nations is certainly a major economic event that has broad implications.
In all of these discussions about the economy, I don’t see much talk about the effect of ever more expensive energy. We are using oil faster than we can pump it. Nuclear has gotten another black eye due to the Japanese meltdown. Renewables have not ramped up to take up the slack. Demand is growing.
The peak oil crowd believes we are into Kunstler’s Long Emergency. If we suddenly had cheap energy tomorrow, would it fix things?
Less tax revenue means less spending, yes? Less spending means less money going into the System to be circulated, yes?
I would disagree. Money only comes into the system when it is loaned out via fractional reserve lending (or printing by the Fed). Taxation is just re-distribution. The same amount of money is there, it’s just not being moved to the state, then to the employees/vendors, etc.
Cut spending, you put people out of work, they stop spending, revenues drop.
It is the imbalances stupid.
We can not cut our way out. We can not spend our way out. We must reverse the imbalances so the people with debt can get the money they need to pay back their debts. If we do not, then the debt will collapse and the money will go away.
“If we do not then the debt will collapse and the money will go away.”
And because this money “goes away” there is created a shortage of the stuff.
And a shortage of stuff that is needed and desired increases the demand for the stuff because its scarcity makes it precious. And something that is presious will not be squandered.
But the economy expanded during an era when there was no shortage of this money stuff. It expanded when all one need to do was fog a mirror and he could get all the money he wanted. And so Joe6pack took all this money he could get and used it to pump up the economy into something it was never meant to be. But now the pumping is gone because the easy money is gone so now the economy is settling back down.
And so here we are.
“and the money will go away”
Prepare to kiss it goodbye.
“…patched together a budget on the assumption that a budding economic recovery would produce a $4-billion revenue windfall.”
These pols and their bureaucratic lackeys spent their whole careers in an unprecedented time of perpetually rising revenues. Persistently weak, let alone declining revenues, is not something they can grasp. Instead they cling to every rosy analyst forecast that comes down the pike - hoping and praying they can slide through the next election on the bump. CA, IL, they’re all doing it - following the lead of the budgetary artists in DC of course.
Windfall. It’s always worked in the past. What could possibly be different this time?
My wife and kids went to the Ventura Co. fair ( Ventura in costal CA )
kids are still making fun of some of the fattest people they have ever seen in their lives, my little one stuffed his shirt with pillows front and back and still wasn’t as fat as many of the kids lining up there to buy deep fried snickers bars. The adults were even fatter they said eating hugh turkey drumsticks and ice cream things.
BTW we are broke in CA and need more money for school lunches, hold the fructose corn syrup please.
Subsidies and Suspicion
By JENNIFER MEDINA
Published: August 10, 2011
LANCASTER, Calif. — This city in the high desert, at the far northern edge of the Los Angeles sprawl, is filled with cozy cul-de-sacs, stucco homes, green lawns and gleaming sedans.
A three-bedroom house rents for the same price as a small apartment in Los Angeles, 70 miles to the south. So it is hardly shocking that the number of renters here who use the federal Section 8 housing subsidy has more than doubled in the last decade, to roughly 3,500, at a time when housing values have crumbled at the exurban fringe, driving prices even lower.
The once-booming town, like hundreds of others at the edge of major metropolitan areas across the country, is also facing stark changes in its demographic mix, going in a few decades from a small, overwhelmingly white city to a much larger, ethnically diverse one where whites make up a third of the population. Fault lines have opened, with some residents worrying that neighborhoods are inundated with crime, and others seeing racism.
Mayor R. Rex Parris has contended for years that the area has been treated as a “dumping ground” for the poor of Los Angeles County. He has repeatedly said that Lancaster should be “waging a war” against the Section 8 program, which provides housing vouchers to low-income families, because there are disproportionately more recipients living in the area than in the rest of the county. It is a “problem that is crushing our community,” he said.
Now, civil rights groups have filed a federal lawsuit accusing Lancaster and neighboring Palmdale of unfairly singling out Latino and black residents who use Section 8 vouchers to help pay rent. The residents, they say, face unannounced visits from sheriff’s deputies and county housing agents, as well as aggressive surveillance from neighbors. The investigations, the lawsuit charges, are thinly veiled efforts to have the residents’ vouchers revoked.
The federal Department of Housing and Urban Development notified Lancaster last month that it would investigate the accusations. The city could lose hundreds of thousands of dollars in federal grants.
http://www.nytimes.com/2011/08/11/us/11housing.html - -
Break out that government axe to section 8 housing subsidies.
Hmmm… I wonder if large government spending cuts would be bad for the economy?
Put them in the Fannie Mae homes.
It’s a shame when the folks on welfare don’t get the reaps ether deserve.
Palmdale and Lancaster is now So Central Los Angeles. They just relocated the ghetto out to the desert. One of my family members is a teacher there, and many minority families haven’t broken any patterns.
He has repeatedly said that Lancaster should be “waging a war” against the Section 8 program
Maybe he ought to be waging a war against illegal immigrants, instead? Or against companies that openly break labor laws?
Both of which are extremely prevelant there.
“A three-bedroom house rents for the same price as a small apartment in Los Angeles, 70 miles to the south.”
70 miles away from the jobs.
“Section 8 housing vouchers were created under the Nixon administration as a way to break up poor enclaves in urban centers and allow more people to move to the suburbs, where they could, potentially, get better jobs and their children could go to better schools. “
And who knew Nixon was a socialist.
My wife found out a few days ago that their receptionist has not made a house payment in 7 months. The young lady has two children(2&3 years old), is trying to get a divorce, but neither one can afford it.They bought this house two+ years ago, along with 2 new vehicles. Her income is around $26,500. He works part time at Home Depot for $12.50 an hour.
She broke down in tears yesterday because her cell phone was disconnected and she is 2 moths behind in her car payments.Also has not paid her car ins. in over 90 days.
Sad tale, one of millions in the same boat. But get this, she still has cable TV, went on a one week vacation to the beach. Was talking later in the day about getting her hair and nails done &renewing her suntanning bed membership, trading in her nearly new car that she can’t pay for, for something bigger because of the kids. Also is looking at an apartment and “renting to own” new furniture because it comes with a 52″ flat screen.
I can’t not feel any sorrow for people like this, they refuse to seriously sacrifice, and will go to any lengths not to. Of course the kids are the real losers though not fault of their own.
At least they can live for free for a few more years in Fannie’s house…
Too bad she can’t get an S&P downgrade. It would sure help with her interest rates.
wmbz
I agree with you, the kids are victims of bad breeding. The receptionist is a Narcissist in every sense of the disorder.
If she’s hot, she can find a new man (it’s a woman’s world).
Which makes the suntanning and getting the nails done a neccesity.
Serious question: does a tan and nice nails really attract a guy? You can get by pretty well without either.
“does a tan and nice nails really attract a guy?”
A light tan looks good if it’s summertime, otherwise, it tells me you’re a twit who goes to a tanning bed. But being pale isn’t at all a turn-off.
The nails some women have now are getting absolutely bizarre, but kind of fascinating. They make me wonder how they engage in proper personal hygiene, which is never a turn-on.
It doesn’t really matter; if she is young, thin and pretty, men will be lined up to take care of her and her kids. If she is not pretty, then that is another matter; men are pigs (uh, of course not including us)
Nails……no.
Tan? Depends on how much you like the “Goth” look.
But seriously, the only women with tans around here are the ones driving the Lexus/BMW/Mercedes SUVs and CUVs.
Them, and the occasional woman I see working on one of the local road repair crews.
Of the two, I think the women on the road crews are “hotter”
Nothing like a safety orange/green vest or shirt to show off that tan.
And if she’s wearing a tool belt, I really start to drool…..
And if she’s wearing a tool belt, I really start to drool.
Well, it’s a good thing that I used to dog-sit for a family with a Bassett Hound. I know how to clean up drool.
And I have a tool belt.
Of course tans are big in Rio but a lot of the lighter skinned people pay the price on their faces later.
“Serious question: does a tan and nice nails really attract a guy?”
No. It means that she is a profligate spender of money and of time that she could be using to read/learn/make something useful.
“she’s wearing a tool belt” Ah, the age old question (modified): Jo or Blair from Facts of Life? Jo.
Well, it’s a good thing that I used to dog-sit for a family with a Bassett Hound. I know how to clean up drool.
And I have a tool belt.
Am I witnessing Slim flirting with X-GS???
I wish….
But if they do seriously scarifice, the economy ceases to exist.
This is supply-side economics. One person can’t be selling more than they buy (profit) unless someone else is borrowing money into existance (debt).
Why should we live with a declining economy based on the shrinking purchasing power of declining wages (demad-side), when we can just give those people access to debt and lift the economy to the limits of our ability to produce goods (supply-side)?
Oh, debt trees can’t go to the sky? Oh, every other time we’ve tried this, it has collapsed into a depression? Oh…. But we’re smarter and can always come up with another financial innovation that will allow imbalances, and the money and debt that it creates, to grow forever.
One nail job will pay for a month of basic cell phone.
One hair job will pay for a month of basic cell phone.*
Two tan sessions will pay for a month of basic cell phone.
————–
*I’ll assume the receptionist is white if she goes to the tanning bed. Had she been African-American, the hair job would have been 4 months of cell phone instead of one.
Not an iPhone. She would have to get one of those phone only cell phones. And hoe would that look with her fancy nails?
Right?
My friend’s soon to be ex just stopped paying all the bills. He leaves the kids in the house w/o food while he leaves for weeks on his out of state job. No money for school supplies. My friend just found the first foreclosure notice on their house. Her horses are only getting fed because of the kindness of strangers. Before he started divorce proceedings she used to get $1600 every 2 weeks. Now she gets $850. The bills are all in her name even though she hasn’t had income in 20 years. He isn’t even giving her money for garbage collection.
The college bound daughter was given her own new Rav4 SUV last year while a senior in HS. She did not go looking for a job of her own. She is now off to college and Dad and Dad’s parents provide her w/spending money. The son is in a special place for kids w/anger issues. He is probably bipolar. God help this poor kid. Each child has a cell phone and computer. There are 2 horses, 3 dogs, multiple cats, 2 chinchillas and a myriad of fish to feed and care for. He is an ex vet so there are no vet bills except for the horses.
The wife goes w/o eating herself for days while she pays bills or makes sure there is gas in the car yet adamently refuses to sell or give away even one animal although it might be a community property issues that her husband has to agree to.
He makes 6 figures as a salesperson for Pfizer and prior to that had his own business as a small animal vet. The lawyer after requesting paperwork discovered they have been spending $3k a month more than he made for years.
The stupidity transcends all income and educational levels.
Sounds like the ex got himself a “take no prisoners” divorce lawyer. Somebody must have pi$$ed somebody else off.
Soon, she’ll find out that you only get as much “justice” in this country as you can afford. In divorce cases, whoever runs out of money first gets screwed.
X-GS, you’ve just proved Big V wrong in spades.
When I filed on the ex, I wanted an “amicable” divorce.
When my attorney found out who my ex had retained, he told me “Your ex is pi$$ed at you”.
Eighteen months later, and I knew my attorney knew his stuff.
The only reason it got settled in 18 months is because she wanted to get married to her “30 day wonder” boyfriend before December 31.
Yes XGS….lawyers just love those angry middle class white folks divorces, those who can throw away $50K+ on legal bills and us paralegals do to …the overtime..
Soon, she’ll find out that you only get as much “justice” in this country as you can afford. In divorce cases, whoever runs out of money first gets screwed.
That’s exactly how it was setting up….at least until a friend of hers forwarded her her entire lawyer’s fee.
I have some friends who are in a world of financial hurt (no money for bills, mortgage, etc.)
Yet they still keep their HORSE
Cause their daughter loves it.
Literally a thousand dollars a month (minimum). Plus competition fees.
I just shake my head…
Best remedy for a girl and her “love for horses”.
Make her get a job to pay the horse bills.
Back when I first moved to Tucson, I rented from a couple near the University of Arizona. Wife was into horses in a big way, and she boarded one at a farm a few miles away.
Now, I moved into this place on a weekend and started my new job on a Monday morning. How did I find this job? I read the newspaper classifieds, that’s how. Then I applied, interviewed, and got it.
Meanwhile, my landlady seemed to just hang around. Now and then, she’d talk to me about going out and getting a job, but she just couldn’t seem to get herself in gear to actually do it.
I was of the mind that getting out and going to work every day was a good thing. I figured that everyone would want to do it.
In her case, I guess not.
The couple later moved to the east side, where they bought a ranch. ISTR that they had more than one horse there. But the missus still didn’t have a job.
Nothing like shoveling shiat to build character.
“The lawyer after requesting paperwork discovered they have been spending $3k a month more than he made for years.”
No sympathy for these peeps.
We live way below our means, and I donate generously to my alma mater and a number of causes despite our high out of pocket expenses for medical, dental and vision. We eat well and dress moderately in high quality brands. No new cars though — just too costly, IMHO.
I have no sympathy for those who make those choices as well.
I just like to remind everyone to not confuse them with those would did make needed and necessasry cutbacks and are still hurting.
Sad tale, one of millions in the same boat. But get this, she still has cable TV, went on a one week vacation to the beach. Was talking later in the day about getting her hair and nails done &renewing her suntanning bed membership, trading in her nearly new car that she can’t pay for, for something bigger because of the kids. Also is looking at an apartment and “renting to own” new furniture because it comes with a 52″ flat screen.
I think I’d be inspired to commit an act of violence.
Pre-markets are going up and down like a pogo stick this A.M. Down now.
Suck ‘em in, then shake ‘em out…
Seems to be working. DOW up 208. How much you want to bet it won’t last? I predict another 150 point drop.
Oh wait, just dropped 5 pts.
That famous law firm has branched out into brokering:
Dewey, Cheatem & Howe
So what kind of “program” do these “experts” think the fed should come up with? BB is said to be reviewing his models, which means he is starting perhaps to realized he has painted himself into a corner. Nah he’s far to smart to figure that out.
ITEM: Economists see dramatic Fed action unless economy improves
By Paul Davidson, USA TODAY
If inflation eases, the job market worsens or stocks continue to slide, “It’s my sense that policymakers are going to be aggressive,” says Mark Zandi, chief economist for Moody’s Analytics.
The Fed said Tuesday it likely will keep short-term interest rates near zero at least through mid-2013 — an extraordinary commitment that shows the central bank doesn’t expect job growth or inflation to pick up significantly for two years.
Fed policymakers also hinted they considered a bolder move — another round of Treasury bond purchases — to more directly lower long-term interest rates that affect mortgages and other key loans. The Fed, which has bought $2.3 trillion in Treasuries and mortgage-related securities since 2008, said it’s prepared to “employ these tools as appropriate.”
Pumping more money into the economy almost certainly would draw criticism from some members of Congress and Fed inflation hawks. Three Fed policymakers voted against this week’s stronger commitment to low short-term rates.
Several economists cite a crisis of confidence fueled by European debt woes, stock market turmoil and weak economic reports.
“If the Fed wants to keep us out of recession, they’re going to have to come up with a program,” says Lance Roberts, chief strategist at Streettalk Advisors, an investment firm.
Fed Chairman Ben Bernanke said in April the “tradeoffs” for new bond purchases “are getting less attractive,” with rising food and energy prices pushing up broader inflation and interest rates already at historic lows.
““If the Fed wants to keep us out of recession, they’re going to have to come up with a program,”
…that actually gets some of that money to main street.
Right. That gets the money out of the hands of the people that have it, and back into the hands of the people that need to pay it back. Money goes away when debt goes away. If the debt can’t be paid back, then it will default and the money it created will just cease to exist.
The Fed has nothing to do with companies getting tax breaks for offshoring jobs, causing the loss of millions of jobs and the loss of tax revenue from those paychecks.
Here’s some good news…
Available jobs rise to 3.1 million — 4.5 job hunters for every job opening in May. - Mlive.com
The number of available jobs in the U.S. as of June 30 was about 3.1 million, a slight increase from May when there were 3 million, according to the U.S. Department of Labor’s monthly openings and Labor Turnover Survey released today.
Compared to June 2010, job openings rose 16 percent. To put this in more perspective, these numbers were much better than the 2.1 million job openings in July 2009, the lowest total number of available jobs since the government began recording the data 10 years ago. But things are pretty lousy compared to December 2007 before the recession began when there were 4.4 million available jobs.
With about 14.09 million people unemployed in June, there were nearly 4.5 potential job seekers for each opening, down from about 4.6 in May. Of the total jobs in June, only 2.3 percent were considered by employers to be vacant and likely to be filled within 30 days, which is why it’s so hard to for unemployed people to find work.
Another reason jobs are so scarce is that people who have jobs are staying put. The percentage of people who quit their jobs was at 1.5 percent, down from 2.8 percent in June 2007, just before the recession started. Layoffs and discharges were at 1.8 million, down from a peak of peak of 2.5 million in February 2009.
“… 4.5 job hunters for every job opening in May.”
Okay, class, given this ratio what sort of pressure should one expect to see on wages?
Trick question. Gotta pay them a large enough premium above their UE benefits or they will sit on their asses.
Except a lot of them have run out of UE benefits. And don’t have to live in a “high unemployment” state to get the extended bennies, otherwise its just 26 weeks?
And as we have discussed before UE bennies aren’t all that. In some states the max UE bennie is less than the equivalent of minimum wage. In my case UE would only replace about 1/4 of my salary.
I haven’t seen a lot of press coverage on what these people are doing w/o any income at all. Are they homeless? Tent cities? Couch surfing? Living in Mom’s basement?
I wonder if editors issued a moratorium on these types of stories to prevent panic.
“…..homeless? Tent Cities?……”
All of the above.
Signed,
Been there, done that.
As InC says, nobody is getting rich living on UE. Anyone who bitches about people “living off the government” should go out and try it for a while.
As InC says, nobody is getting rich living on UE. Anyone who bitches about people “living off the government” should go out and try it for a while.
Here’s the big disconnect.
Just because someone bitches about people collecting UE (or welfare) on the taxpayer’s dime doesn’t mean they think those folks are living high on the hog. That’s a terrible strawman argument that gets repeated over and over here.
The objection is that they’re a drain on the system and the currently productive members of society. Not that they’re living some rich life.
I’ve lived off UE as well, for 9 months. Of course, I had a roof over my head and lived rather well because of the saved money that I had.
“Living in Mom’s basement?”
I have heard that this is very common now. Well, not necessarily the basement part.
I know some who are having a pretty nice comfortable time collecting UE and working a little on the side. They don’t want anything to change. I guess once you get kicked off UE, you can apply for other forms of welfare: SNAP, EBT, Rent-assistance, Paid utilities etc. There seems to always be another tit available to those looking for one…
Drum in NJ is right. We can’t afford these parasites.
What do you we say we start with the parasites at the top of the food chain first, and work down from there?
If nothing else, the ROI would be a lot higher.
Drum in NJ is right
I think you’re confusing myself and aNYCdj. We’re different peeps on different ends of the country
Wages will remain the same. They will just be shared by 4.5 people.
BA DUMP BA!
(you are on FIRE today!)
Now add in the discouraged workers that will likely come back ito the market if we actually start adding jobs. How about the people working part-time wanting full time jobs.
For studies like this, I think the underemployment rate that is 2x the unemployment rate give a more accurate picture of labor conditions.
And Combo, it is deflationary.
The U6 includes those statistics.
The U6 is hovering around 17%
Now add in the discouraged workers that will likely come back ito the market if we actually start adding jobs. How about the people working part-time wanting full time jobs.
For studies like this, I think the underemployment rate that is 2x the unemployment rate give a more accurate picture of labor conditions.
I’ve been thinking about writing an article about the rise of self-employment. From both the voluntary and the involuntary sides of the coin.
One of the challenges is finding out how many self-employed/freelancer/free agent/what-have-you types there are out there.
I don’t think the BLS tracks this sort of thing. It seems as if you’re supposed to have a paycheck job. Or else you’re unemployed.
Any insights?
You will have to go to the BLS website and dig around to find out the exact criteria they use, but IIRC, they do factor the self employed in.
On which side, I’m not sure.
Unemployment data comes from phone calls.
Have you done ANY productive work in exchange for money in the last couple weeks. If yes, employeed.
If not, have you actively looked for work? If yes, unemployed.
If not, would you actively look for work if you thought it likely you would be able to find work? If yes, discouraged worker.
The rest are not counted in the workfirce at all. Students, retired, house-spouse, deadbeat… etc.
If employeed, full or part? If part, do you want to work full-time. If yes, part time for economic reasons (underemployeed).
So, yes, work for your self counts as employeed since the data comes from household survey, not large companies reporting their employee count like the jobs data (which is also stastically adjusted for assumed movement in and out of work from home using the birth death model).
We had 110 applicants for one mailroom position two weeks ago. Pays $25k with decent benefits.
That seems to be the norm. Know one guy who applied for a mall job — 80 other apps.
I wonder how that changes if the person is willing to move.
Companies are not paying to move employees like in the past.
And if you have kids, moving away from family means moving away from a whole bunch of you “family support”.
What’s free babysitting worth? What’s having a relative give you a ride to work while your car is in the shop worth? Or parked in the driveway, because you don’t have the cash to fix it? What’s living in the parent’s basement, or paying a discount rate for renting out Uncle Bob’s rental house worth? What’s doing a few chores/fix it projects for Granny, in exchange for cash under the table worth?
So much for the USA’s much-vaunted “labor mobility”.
Businesses are taking full advantage now, but as usual, they are going to eventually get blasted by the “unintended consequences”.
Expect to hear even more whining about having “having open positions that we can’t find qualified people for….” Or else, they will revert back to hiring illegals.
Summary: The job/employment market, like most everything else in the US, is as fooked up as a football bat.
When I was unemployed, they sent me to that bogus outplacement/networking counseling. Useless. They had one seminar where the lady was all upbeat about LinkedIn, and said that if somebody in transition* was presented with a new opportunity** then call the counseling service! They will help to negotiate salary and moving expenses and maybe even pay the difference in housing…
WTF? Did they think it was still 1995?
After a few months int he new job, I sent them a postcard. I decided to be polite.
———-
*unemployed
**job offer
When I was unemployed, they sent me to that bogus outplacement/networking counseling. Useless. They had one seminar where the lady was all upbeat about LinkedIn, and said that if somebody in transition* was presented with a new opportunity** then call the counseling service!
Oh, brother. LinkedIn. Tell me she was kidding. Please.
It seems as if, these days, LinkedIn is overrun with job hunters. Not the sort of place where the rest of us want to be.
LinkIn has indeed become a place where they “do other’s laundry.”
My wife’s company is moving us, giving us temp housing, etc. but only because she could start the new job in three weeks.
Steppin’ Fetchit forever more.
They have a placement service for the spouses, but I don’t plan on netting 30K to have someone else raise my kid. Why bother? I may have to change from MrBubble to MrMom…
Try to find some part time deal,at something you like doing. It will help the job search, when the kids are in school.
I’ve haven’t gotten a job by going thru the HR/application process since 1979. Every job I’ve got is by letting my circle of business contacts know I’m looking (for whatever reason).
Even contract work is good, for figuring out if you want to work for the company, and for being first in line when they decide to hire full time.
Of course, you can always watch soaps and eat bon-bons too.
Thanks for the tips. I have database administration/development, environmental work and teaching/tutoring in my wheelhouse and I’ll be looking for contract work in those areas.
I just can’t work for Initech anymore…
I don’t have a sweet tooth and we don’t have a TV, so soaps and bon-bons are out. I plan to do as much as I can outdoors with the bambino on my back. Pipe dreams? Perhaps…
3 million of them for $12hr or less.
Defense Budget Hysteria and Business as Usual — or Reform?
By Winslow T. Wheeler
The rhetoric of people rushing to rescue Pentagon spending from “completely unacceptable” cuts is quite hysterical. Leading the chorus has been Secretary of Defense Leon Panetta. He termed the possible defense budget cuts (about $850 billion over 10 years according to most) a “doomsday mechanism,” if the automatic sequestration trigger of Obama’s debt deal with the Republicans in Congress is pulled. Some think tank types, opining in the Washington Post and the New York Times, have deemed these reductions “indiscriminately hacking away” at the Pentagon’s budget and something that could “imperil America’s national security.” Their defense spending allies, including multiple generals and admirals sitting atop various Pentagon bureaucracies, confirm it all with descriptions like “very high risk” and “draconian.”
Some factual perspective puts the brown paper bag around this hot air. As analyst Harrison also informs us, the “doomsday mechanism” would reduce the Pentagon’s “base” (non-war) budget to about $472 billion, the approximate level of the base DOD budget in 2007. I do not recall anyone declaring our national security being “imperiled” at that spending level in 2007. In fact, that level of spending for the “base” (non-war) Pentagon budget was a sixteen year high — calculated using “constant” Defense Department dollars intended to compensate for inflation. Not exactly the result of “hacking away.”
If returned to the $472 billion 2007 level, the base DOD budget would be $73 billion higher than it was in 2000, the year before our various interventions started to occur. If spending were to be continued at the $472 billion level for the next 10 years, base Defense Department spending would be three quarters of a trillion dollars above the levels extant in 2000. And, not a penny of the additional monies to be spent on the wars would be eliminated.
Panneta is merely saying what the Blackwater, Halliburton, Lockheed, Boeing, etc lobbyist tell him to say.
That’s a long winded way of saying he’s a sock puppet.
To be fair Blackwater Halliburton Lockheed, Boeing lobbiests are telling all their stooges in Congress to avoid cuts. Which lobbiests will win??
We should set up a cage match.
Use the money to build wind and solar plants in the US to run our cars. Yes I realize they aren’t all that cost-effective, but it’s got to be more cost-effective than the price of the war machine.
http://market-ticker.org/
The game is about over.
“We refused, after the 2007/08/09 crash, to force full and complete transparency on these books of risk by forcing them all onto an exchange with nightly mark-to-market and the posting of cash margin against any underwater positions.”
It was expanding mark-to-model accounting that stopped the crash. TARP was 3 months before the bottom, and didn’t stop the crash. Stimulus was 2 months before bottom, and didn’t stop the crash.
Easing of FASB157 was rumored the week stocks bottomed, and announced just 1 week later.
If we do what he wants, then it is cascade default into depression, but he seems to think it is the way to avoid depression. What? You can’t force cascade default and tens of trillions of dollars to just go away, as a way to avoid depression.
Surprise: Jobless Claims Fall to Four-Month Low- AP
The number of people seeking unemployment benefits fell below 400,000 for the first time in four months, a sign that the job market is improving slowly after a recent slump.
Or, a sign that once you have cut to the bone, it gets harder and harder to cut more flesh.
improving…..
Isn’t this 400,000 new jobless each month for what now seems like years what has 12 million people not working that used to work? Improving. Interesting use of the word.
Anyway, to be revised upwards on next report, to make that one look like an “improvement”.
Are these new jobless claims, or just weekly claims of the already jobless?
I see you’ve noticed they don’t make it a point to say, do they?
And the number will be revised up in a couple of months.
Surprise!
What they report as the headline is the first time claims. You have to dig for the continuing claims, and even then those are broken up into many reports.. Basic claimes to 26 weeks, extended to 52 weeks. Super duper extended to 99. We have temproarily rescued those of 99, yet again…
And, 400K ne claims is not 400K new people out of work as there are always people getting jobs and losing jobs. Not every time a company fires someone is it because they are not going to be replaced. Sometimes the employee just sucks.
Even in a very strong market, there are usually 200-300K new first time claims a week. At our current unemployment rate, 400K a week is sen as the break even-ish, level where UE rate remains stead without people falling out of the work force as discouraged.
And that is what is making the UE rate fall…. people giving up and no longer even looking for work.
Patty Murray, the new co-chair of the Obamacare2 Debt Panel took $200K from defense contractors to help her get reelected in 2010. She assures us that she has no conflicts of interest. This theatre is going to be entertaining.
Bloomberg news/2011-08-11/debt-panel-co-chairman-murray-counts-the-defense-industry-as-a-top-donor.html
And the defense industry will soon be leaking stories about how much money panel members have accepted from the healthcare industrial complex.
When there are lots of little fish, the sharks work together. When they run out of little fish, the sharks start eating each other.
BINGO
Kick back and watch the show. The krill are dieing or loosing nutritional value and now the sharks and whales will fight for the scaps and consume each other.
This krill isn’t. I’ll just swim in a sea that they can’t navigate.
US trade deficit widens in June to $53.1 billion
US trade deficit widens in June to highest level since 2008 as exports fall for 2nd month
WASHINGTON (AP) — American producers sold fewer industrial engines, electric generators and farm products to the rest of the world in June, pushing the trade deficit to the highest level since 2008 and dealing another blow to an already struggling economy.
The deficit rose 4.4 percent to $53.1 billion in June, the largest imbalance since October 2008, the Commerce Department reported Thursday. Imports fell 0.8 percent to $223.9 billion as crude oil prices fell for the first time in nine months. Exports dropped 2.3 percent to $170.9 billion, the biggest decline in more than two years.
The drop in exports, the second in a row, was a blow to hopes that rising overseas demand will boost the fortunes of American manufacturers in the face of a slump in spending by U.S. consumers. The concern now is that a global slowdown will hobble a U.S. economy that is in danger of stalling out.
The deficit through June is running at an annual rate of $576.6 billion, 15.3 percent higher than the 2010 imbalance. A higher trade deficit subtracts from overall economic growth because it means consumers are purchasing more foreign-made goods and fewer products made by U.S. workers.
The big rise in June’s deficit came as a surprise to economists who had been forecasting an improved deficit based on their belief that oil prices would fall, lowering imports, while exports would recover from a May decline which had been the first setback after 10 monthly gains.
Yet again, “came as a surprise to economists”
What happened to the BRICS decoupling, the dollar is falling shouldn’t they be buying more of our goods. Oh that’s right they protect their industry.
Looks like I’ve gone and caught me a falling knife!
We are under contract on a teardown/lot. Its an estate sale, and the heirs just want it sold. Initially they countered our 88%-of-asking offer, but after we turned down the counter and explained why we felt our number was fair and justified, they came back and accepted our initial price.
We made our offer through the listing agent (our previous agent hung up her license in June). FWIW, I think that strategy worked to our advantage; most agents around here, I suspect, would turn their nose up at an 88% offer submitted by another agent. The little swoon in the markets this week probably helped a little too.
So now we build - IF we can find a builder who knows what he is doing and is still solvent. We’ve been renting three and a half years (or has it been four and a half? I am losing count). Even though I don’t think the housing market is finished going down, I think we got a fair price in a good location, we’ll have the house we like and can afford, and we’ll know what’s behind the drywall.
“Even though I don’t think the housing market is finished going down, I think we got a fair price in a good location”
Congratulations! If you feel like it was a fair deal, and you are happy, then what else is there to say. Best of luck with the construction of your future home.
I hope you can come with being a developer. Just rehabbing my house was enough to keep my up nights.
Just thinking about the rehab that I have yet to do wears me down.
My house rehab list is pretty long too.
Any rehabbing HBB-ers up for a round of tea and sympathy? Let’s have a tea and sympathy meetup sometime.
What’s the cost$/sqft in your neighborhood these days?
$150/sf to build, including lot.
Existing single family houses are going for $147/sf (per Redfin).
Wishing prices on existing single family residences range anywhere from $150/sf to $230/sf.
I don’t follow the townhouse/condo market, so I can’t comment on what those numbers look like. They’re probably a little less than single family, however.
Carney: Unemployment Benefits Could Create Up To 1 Million Jobs
~ Real Clear Politics
“I understand why extending unemployment insurance provides relief to people who need it, but how does that create jobs,” Wall Street Journal’s Laura Meckler asked Jay Carney at Wednesday’s WH briefing.
Carney responded: “Oh, uh, it is by, uh, I would expect a reporter from the Wall Street Journal would know this as part of the entrance exam.”
“There are few other ways that can directly put money into the economy than applying unemployment insurance,” Carney said.
Carney answers the question: “It is one of the most direct ways to infuse money directly into the economy because people who are unemployed and obviously aren’t running a paycheck are going to spend the money that they get. They’re not going to save it, they’re going to spend it. And with unemployment insurance, that way, the money goes directly back into the economy, dollar for dollar virtually.”
“Every place that, that money is spent has added business and that creates growth and income for businesses that leads them to decisions about jobs, more hiring. So, there are few other ways that can directly put money into the economy than applying unemployment insurance, Carney said.
Carney says President Obama is pushing for unemployment benefits to be extended “as we continue to emerge from this recession.”
Carney also says this is only one item of a “variety of things to grow the economy and create jobs.”
I never imagined that unemployment is an engine for job growth. Silly me.
Take it all away and what would happen?
That’s why it’s important to stay on the path we are on in this jobless recovery. The truth is the longer people stay unemployed and receive unemployment checks that in turn “creates” jobs in the longer term. So it is better to continue to extend unemployment benefits for as long as necessary so as to “grow” our soon to be robust economy.
So simple even a caveman could figure it out.
Compared to the non-hiring from private sector despite 10 years of very low taxes and one very nice repatriation tax holiday, yes, UE is now a comparative job-creator.
That said, I would classify UE more as “saving” jobs than creating them.
The umemployed I know don’t want jobs because it would mess up their UE. They are lazysummbitchez.
So because the ones you know are lazysummbitchez, all of them must be.
“Broken window” economics.
We’re doomed.
Doooooooooooomed!
Domed. dome houses are the future…
We’re buckminsterfullered!
Unemployment may not create jobs, but it does prevent a negative feedback of more job losses.
People getting UE may pay the rent, keeping the apartment complex from firing the maintenace guy. People on unemployment may keep buying food, clothes, school supplies for the kids, preventing the stores from closing or laying off.
It is about short-circuiting the natural negative feedback loops that exist in our economy, to avoid systemic risk of cascade default.
Too bad we stopped short-circuiting the positive feedback loops that lead to excess debt creation in the first place, so that we don’t have such extreme cycles of boom and bust.
Unemployment may not create jobs, but it does prevent a negative feedback of more job losses.
Do you believe this is true if you remove government deficit spending?
Imagine there’s no UI, so employers don’t have to pay that. So wages settle at a higher rate. Employees have more disposable income, and thus are likely to spend more. The same amount of money circulates, no?
Aren’t you the optimist. I would expect employers to pocket the UI. Why should they pay more when there are so many unemployed? In addition, the employees they do have will save more against a rainy day instead of spending their disposable income.
Beijing Downgrades US-Treasury to A+ - Is Anybody Listening?
By Gary Dorsch, Editor
Global Money Trends newsletter August 10, 2011
Of the big-3 credit rating agencies, only the S&P rating agency had the courage and fortitude to speak the truth, about the severe deterioration of America’s financial status. S&P shocked the political establishment in Washington, by following through with its threat to downgrade US Treasury debt to AA+ on the evening of August 5th. S&P added that the US Treasury debt could be downgraded further, if the crooked and inept politicians in Washington haven’t taken any meaningful moves to cut the size of its mounting debt.
Yet the most important voice in the debate about the credit worthiness of America’s debt, is not the twisted opinions of the US-credit rating agencies, but rather, that of China’s credit rating agency - Dagong Global Credit Rating, which downgraded US-Treasury’s debt from A+ to single-A last week. “The US decision to raise the borrowing ceiling will not change the fact that the growth of its debt has outpaced its overall economic growth and fiscal revenue. “It may further erode the country’s debt paying ability in the coming years,”Dagong Global said. It also issued a negative outlook. “The rise of the US-debt ceiling helped temporarily avoid a debt default but has not improved its solvency and the increasing government debt burden will deteriorate the US sovereign debt crisis.”
Oh, that’s why stocks are going up today.
“Dagong Global Credit Rating, which downgraded US-Treasury’s debt from A+ to single-A last week”
That doesn’t match the headline.
George Soros Sued by Ex-Girlfriend Over New York Apartment Promise
August 11, 2011 | New York Post
New York – A beautiful Brazilian soap star has the lead role in her own daytime drama, which casts George Soros, the billionaire financier of lefty causes, as a heavy who not only broke her heart, but also reneged on a promise to give her an Upper East Side apartment worth $1.9 million, The New York Post reported Thursday.
The drama will be staged in Manhattan Supreme Court, where 28-year-old Adriana Ferreyr on Wednesday filed a blockbuster $50 million suit charging, among other things, that the frisky octogenarian slapped her around while they were in bed discussing his real estate betrayal.
The sultry actress and the mogul, who is worth some $14.5 billion, had dated for five years before he heartlessly dumped her a year ago, the lawsuit says.
But they briefly reconciled, and while spending a romantic night together, he whispered in her ear that he had given the apartment to another woman.
“While still in bed, Soros slapped Ferreyr across the face and proceeded to put his hands around her neck in an attempt to choke her,” her lawsuit claims.
Soros, 80, then allegedly attempted to strike her with a glass lamp, and though he narrowly missed, it smashed on the floor and she cut her foot, which required three stitches.
According to a police report, she called cops, but no charges were filed.
Soros “denies throwing the lamp and totally denies trying to choke her,” a friend of the billionaire’s told the Post.
Just because she says it, doesn’t mean it’s true.
There’s only one reason that a 28 year old hottie would hang around an 80 year old coot. Money. They are basically negotiating her severance package, and she didn’t like his offer.
Now I know why the Koch brothers are so vilified. They’re worth about $16 Billion each, while poor George Soros is only worth around $14.5 Billion.
Does this now mean that Soros doesn’t really run the world after all?
He runs the world all right.
Super hotties are little higher in the food chain than any world government or governments…..
“Soros “denies throwing the lamp and totally denies trying to choke her,” ”
So he DID slap her.
“Soros “denies throwing the lamp and totally denies trying to choke her,” ”
So he DID slap her.
Guess it must be the cop genes I inherited from my mother (her dad was a detective), but if I were interrogating Mr. Soros, I’d be following this line of reasoning very carefully. Because it would take more than a few questions before he confesses.
Aren’t the super rich, regardless of political persuasion, entertaining?
And what does an octogenerian need a girlfriend for anyway?
About as entertaining as being the lamb in a lion sandwich.
True confession time: Back when I worked for a non-profit org, I had a platonic thing going with one of the donors. He was in his eighties and still an avid bicyclist. So, you know that got my thirty-something heart a-racing.
But then I started thinking about the age difference and decided that he was just too old for me.
OTOH, he did propose to one of my acquaintances.
while spending a romantic night together, he whispered in her ear that he had given the apartment to another woman
That line has a better chance of working if there’s some Barry White music and candles.
Thanks a lot, Rio. I am now singing “Can’t Get Enough of Your Love, Babe” in Soros’ accent. Ugh.
I can do a pretty good Barry White imitation.
I can also do Godzilla. Works best in a building with a lot of echo.
Maybe these skillz will come in useful eventually.
Comment by combotechie
2011-08-11 04:11:34
“… the challenge of a bear market is to avoid getting wiped out.”
There’s no great challenge, just go to cash.
Ah, but what form of cash? Many MM funds might have been wiped out last time around if the Fed had not backstopped them.
No, some MM’s would have broken the buck and lost as much as 5% of their value if the Fed had not backstopped them.
Um, the _spin_ was that it was isolated and only a couple of MM’s “would have broken the buck”.
But there was in fact a MASSIVE run on a few large MM funds. Had that not been nipped in the bud, they would have been forced to dump huge amounts of commercial paper on the already fragile markets to meet their redemptions.
That might well have cascaded into every MMF breaking the buck, and a massive run on the entire sector.
Why do you think the Fed stepped into a previously non-guaranteed sector if the risk was so minor?
Ah, but what form of cash?
Clearly not MMF (well, that worked out well due to the federal backstop). MMA, checking, traditional savings, even in foreign currencies.
Of course, even as the market drops, the USD is being devalued. So we’re just screwed all around. Luckily gold is doing well.
Btw, PiC. Have you been out sailing much this summer (i recall you mentioning you had friends that sailed). Sadly I lost my sailing connection this year and haven’t gotten out on the water.
Sadly, I have not been sailing recently either, drumminj—but wow you have a good memory!
The buddy that I was crewing for decided he couldn’t race the past couple of seasons because he was too broke; he had a long-ish period of unemployment, and apparently there is some cost to enter and other costs in terms of maintenance (like getting the bottom scrubbed) that he could ignore if he wasn’t racing. He got a good job recently, though, so hopefully we’ll get back out the racing eventually.
I’m actually going to join him for a couple of days of cruising this summer, but it will be my first time on a sailboat in quite some time…
Cash in a matress?
Gold hidden in a paint can?
11 August 2011
Statement by the Chancellor of the Exchequer, Rt Hon George Osborne MP, on the global economy
…
That is what makes this the most dangerous time for the global economy since 2008.
….
Mr Speaker, it is not hard to identify the recent events that have triggered the latest market falls.
There has been the weak economic data from the US and the historic downgrade of that country’s credit rating.
And the crisis of confidence in the ability of Eurozone countries to pay their debts has spread from the periphery to major economies like Italy and Spain.
But these events did not come out of the blue.
They all have the same root cause.
Debt.
http://www.hm-treasury.gov.uk/statement_chx_110811.htm
Imagine Githner saying something like this…..
Never, ever happen, ever, not with a gun to his head. I understand the little runt is easily pissed, especially if anyone questions his comments and actions. I would be first in line to b!tch slap the twerp.
Never, ever happen, ever, not with a gun to his head. I understand the little runt is easily pissed, especially if anyone questions his comments and actions. I would be first in line to b!tch slap the twerp.
Forget the gun to his head scenario. Timmy has Secret Service protection.
As for his temper, well, rank has its privileges. Meaning that the big boys and girls can throw temper tantrums clear across the Potomac.
But, if they’re really going for distance, they’ll need to try harder and develop the temper-throwing prowess of Bill Clinton or Lyndon Johnson. Those guys really knew how to lose it.
Obama? He doesn’t even show up to the anger party.
But I have heard that he’s pretty good at glaring at people who annoy him. He’s not much of a yeller.
“But these events did not come out of the blue.
They all have the same root cause.
Debt.”
AWESOME!
Towards the end of the speech, there was another awesome part:
——————-
Finally, the UK, like the rest of the developed world, needs a new model of growth.
Surely we have now learnt that growth cannot come from yet more debt and government spending?
Those who spent the last year telling us to follow the American example with yet more fiscal stimulus need to answer this simple question: why has the US economy grown more slowly than the UK’s so far this year?
More spending now, paid for by more government borrowing and higher debt, would lead directly to rising interest rates and falling international confidence that would kill off the recovery not support it.
Instead, we’ve got to work hard to have a private sector that competes, that invests, that exports.
In today’s world, that is the only route to high quality jobs and lasting prosperity.
Unfortunately, he appears to completely miss the inherent contradiction between that and this line following shortly after:
Internationally we have the greatest stimulus of all sitting on the table in the form of the Doha round – a renewed commitment to free trade across the world – that should be taken up now.
Oh yes free trade has been a blessing for western nations. We have become a country of realtors, mortgage brokers, remodelers and have given up science engineering, and manufacturing.
This coroporatist/globalist just wants to continue the same game we have been playing for 30 years much to the detriment of the US middle class.
More spending now, paid for by more government borrowing and higher debt, would lead directly to rising interest rates and falling international confidence that would kill off the recovery not support it.
Instead, we’ve got to work hard to have a private sector that competes, that invests, that exports.
1. More spending in the US has not resulted in high interest rates so his example has a GIANT hole in it. If what he said was true interest rates would be high right now and that would be the cause for a slowing economy. It’s not. THERE IS NO F’n DEMAND.
2. “Instead, we’ve got to work hard to have a private sector that competes, that invests, that exports.”
This is a plan??? How does he propose we do this??? If he keeps the value of the currency high then exports will NOT be a way out. Not only that but he proposes that the entire world needs a new model, will we all be exporting our way to prosperity. Seriously this guy is an idiot.
The only statement I agree with is that we need a new economic model. That model will tax the rich and put people to work cut our inports w VAT tax and tariffs. cut the cost of labor with a national health care plan that cuts costs 50% and cutting payroll taxes. It will cut the military farm subsidies, tax breaks for big oil etc etc.
I like this part of the same statement:
History teaches us that recovery from this sort of debt-driven, financial balance-sheet recession was always going to be choppy and difficult.
And we warned that would be the case.
But the whole world now realises that the huge overhang of debt means that the recovery will take longer and be harder than had been hoped.
Markets are waking up to this fact.
That is what makes this the most dangerous time for the global economy since 2008.
I think we should be realistic about that.
I think we should set our expectations accordingly.
My take:
When it comes to high government officials telling the truth, I think the Brits are about six months ahead of us. But, like the Beatles, the Stones, and all the other 1960s bands from across the pond, the British Truth Invasion is coming our way.
History also teaches us that when there are massive numbers of unemployed poor people that you get riots crime and burning buildings.
I was in Lowe’s this A.M. and they are already putting out those blow-up yard ornaments, for Halloween. Some of them are fricken huge life size headless horseman. Pumpkins that are 5ft. in diameter etc… I will never understand why folks but that type crap, but hey gotta keep the Chinese happy.
Thanks for sharing this story, wmbz. Further motivation on my quest to become an extreme saver.
Wht do you hate the economy? Do you want a depression?
If we all don’t reasume spending ourselves into unpayable debt, then the ecoonomy will crash (now instead of later).
You need to get on board with supply-side economics or we’re all toast.
It was a long time ago that I started on the road to frugality. I was robbing Peter to pay Paul on a couple of pool projects. I had many, many sleepless nights years ago. Anyway I was talking to my father about how things were going and he asked about my personal expenses, I rattled off a fairly long list. He said, anyone can spend money, try not spending it for several months, and see how it goes. I slowly came around and started to really watch my out go. Amazing how much money I had flat out wasted through the years. That’s what started it for me, for many years I have been playing the game of not spending money unnecessarily. We do the things we enjoy and don’t worry about what anyone else may think. The sleepless nights are a long ago memory, I’m proud to say.
Why do you hate the USA? Why do you want to kill our economy?
if you won’t spend, then how are others supposed to profit.
B1 + B2 = S1 + S2
You B1 S2.
Pure mathmatics.
You must spend yourself into oblivian or corproations can’t book record profits and the economy will cease to exist.
You are just unpatriotive, that is what you are… No good Socilaist.
Next you will be saying that everyone should do what you do. Hint, it is mathmatically impossible that everyone be spending less than they earn.
“Hint, it is mathmatically impossible that everyone be spending less than they earn.”
Haha! For now, people are still buying crap that they don’t need (see wmbz’s post about the life-size headless horseman and the 5 ft. pumpkins at Lowe’s. Seems to be American/western nature to buy this stuff, so we unpatriotic savers will be OK. For now.
I’m with ya.
I was, like my mother, a frugal girl by nature. It was pretty easy for me to save. My worst spending weakness was clothes. No biggie for my income. When my husband and I were engaged the money piled up pretty quickly. Then the kids were born, I left work to stay with them, and then we moved to a place where materialism reigned. I don’t feel I was trying to keep up as much as appear less abnormal to them by going with the flow. Their sharp tongues were practiced at embarassing others who might have the limitations of a budget. I just said no less often.
What do I have for those, ha, so called social skills? A house full of useless crap and a feeling of a 5 year hole in my life.
We no longer live there and the pressures to spend are no longer so intense. Yet I still welcome the arrival of a reality check. I still meet a lot of people who don’t want to slow down their spending like I do. So I just avoid getting too close to anyone. Then I don’t have to explain.
I’m tired.
Store shelves are packed with stuff that probably would never be manufactured were it not for China.
We are all well versed in the motivation of companies to export jobs, but what role does the consumer economy play in the equation? At this point, would households be willing to forego a life sized headless horseman balloon so that they would have more money in their budget to buy say, an American made cell phone?
FWIW, mother earth would probably be grateful if the kiddies just went back to making decorations themselves out of construction paper, but what would that do to the big box’s bottom line? Not to mention local sales tax receipts.
I’ll pass on all those decorations for all holidays. I just don’t like them
I wonder how much this bad boy cost? I understand they had been working on it since 2003.
Contact lost with hypersonic glider after launch
By JOHN ANTCZAK
LOS ANGELES (AP) — An unmanned hypersonic glider developed for U.S. defense research into super-fast global strike capability was launched atop a rocket early Thursday but contact was lost after the experimental craft began flying on its own, the Defense Advanced Research Projects Agency said.
There was no immediate information on how much of the mission’s goals were achieved.
It was the second of two planned flights of a Falcon Hypersonic Technology Vehicle-2. Contact was also lost during the first mission.
The small craft is part of a U.S. military initiative to develop technology to respond to threats at 20 times the speed of sound or greater, reaching any part of the globe in an hour.
The HTV-2 is designed to be launched to the edge of space, separate from its booster and maneuver through the atmosphere at 13,000 mph before intentionally crashing into the ocean.
DARPA used Twitter to announce the launch and status of the flight.
The agency said the launch of the Minotaur 4 rocket was successful and separation was confirmed. It next reported that telemetry had been lost.
They had the same problem the last time.
Hypersonic air speeds tend to create some serious magnetic fields around the object going hypersonic.
Why haven’t they figured this out yet?
Cost? At least a few million. The vehicle is a scaled down test model.
“Hypersonic air speeds tend to create some serious magnetic fields around the object going hypersonic.”
???
Why is that?
Friction, baby. P-static
Next time you fly on a jet, check out the little devices attached to the trailing edges of the wings, ailerons, elevators, stabilizers, etc. They are called static dischargers. The bleed the static electricity charge the aircraft accumulates from air friction while flying thru the air.
Everything on a jet needs to be electrically bonded. Even composite/kevlar panels have a thin wire mesh laid up in the assembly before it’s autclaved, for static bonding. Anything that isn’t bonded builds up a charge until it’s strong enough to find a path to ground.
Have enough unbonded components on a jet, and the radios become unusable. All those static discharges don’t do much for any of your digital avionics items either.
I’m just guessing that this problem would be 20 times greater at Mach 20 or thereabouts.
Interesting—thx fixr!
This is why I love this blog! I learn something every day.
The Hong Kong Stock exchange has had to suspend trading of many stocks due to hacking breaches.
They started off the moring thinking they had it under control, but had to enact tighter measures by the end of their trading day.
Google “Hong Kong stock exchange”
‘Drunk’ man pees on 11 year old on JetBlue flight
Midair ‘pee’ chaos. The New York Post
It was plane madness.
Chaos erupted on JetBlue’s red-eye flight from Portland, Ore., to JFK yesterday when a drunk allegedly urinated on a sleeping 11-year-old girl.
The youngster was traveling with her sister and dad, and had been left alone for a few minutes while the others used the lavatories.
Robert Vietze, 18, of South Warren Vt., stumbled from his seat five rows behind her and emptied his bladder, a witness said.
“I was drunk, and I did not realize I was pissing on her leg,” the 6-foot-4, 195-pound Vietze said, according to law-enforcement sources. He later claimed to have consumed eight alcoholic beverages.
The girl’s father caught Vietze midstream.
“I woke up to this man yelling and literally looking like he was about to punch this kid in the face,” said the witness, who asked not to be identified.
“The father was screaming, ‘F - - k that kid! I don’t want him near my family!’ ” the passenger said.
Flight attendants separated the pair and removed Vietze to the back of the plane. They attempted to clean up the mess with liquid soap from the bathrooms, and helped to comfort the traumatized girl.
But the 5½-hour flight from hell was not over yet.
Roughly an hour before the plane landed, another passenger began to complain of chest pains, then vomited.
“Is anybody on this flight a nurse or a doctor?” the pilot said over the public-address system. “We have a medical emergency.”
With no volunteers, the flight crew kept the man calm and tried to tidy him up, again raiding the liquid-soap container.
“The pilots kept coming out of the cockpit to talk to the flight crew about what was going on,” the witness said. “When we landed, the pilot warned us that police were coming.”
Six Port Authority cops met the plane at the gate at around 6:30 a.m.
Two escorted the ill passenger off, and four took Vietze into custody.
Vietze was issued a federal summons for indecent exposure and released.
The guy with heart pain sounds like acid reflux. Vomiting is a symptom of that, especially if he ate something that irritated it.
A few years ago, I was verbally harassed by a drunk on a plane that was en route to Tucson.
Guy was crocked off his arse when he got on board in Dallas, and he proceeded to tie a few more on during the two-hour flight. I guess the flight attendants found him charming. Or something like that.
Anyway, the more he harassed me, the more I answered back. I decided that I just wasn’t going to put up with his guff.
After the plane landed, I made sure that he left the plane before I did. Then I went to one of those Tucson Airport Authority courtesy phones and dialed 911. Reported this guy’s behavior.
Well, then the fun started.
I met up with a Tucson Airport Police officer and a trooper from the Arizona Department of Public Safety. This was in the baggage claim area. The guy could clearly see me talking to the cops, and I was gesturing toward him.
Well, you should have seen him slink out of the airport with the guy who was picking him up. They both acted like they’d never done anything wrong in their lives. Cops just let ‘em leave.
And I never saw the drunk guy again.
Romney in shouting match with crowd at Iowa fair
DES MOINES, Iowa (AP) — Former Massachusetts Gov. Mitt Romney faced a rowdy crowd at the Iowa State Fair, with people interrupting his answers to chant “Wall Street greed.”
One questioner asked the GOP presidential candidate what he would do to strengthen Social Security. The voter didn’t like Romney’s pledge not to raise taxes, and interrupted him.
Romney pointed angrily at the crowd and told them to give him a chance to answer. After a minutes-long exchange with Romney and the crowd shouting over each other, Romney said, “If you want to speak, you can. But it’s my turn.”
As he wrapped up, he joked, “These guys up front won’t be voting for me.”
This is why most politicians only appear in front of hand-picked crowds during serious campaign season.
Ol’ boot strap Mitt, you tell ‘em…
Some members in the crowd urged Romney to tax wealthy individuals and corporations to ensure solvency for entitlement programs such as Social Security and Medicare.
“There was a time when we didn’t go after people for their success,” Romney said.
“If you don’t like my answer, you can vote for someone else,” he added.
“There was a time when we didn’t go after people for their success,” Romney said.
Total goods and services Bought = B
Total goods and services Sold = S
B = S
If two people are involved:
B1 + B2 = S1 + S2.
If B1 S2.
In short, if someone is selling more than they buy (getting money), someone else is buying more than they are selling (getting debt).
For person 2 that has debt to repay,
B2 < S2
B1 + B2 = S1 + S2.
If B2 S1.
The person with debt can’t possibly pat back their debt until person 1 with the money starts buying more than they sell.
Pure math. It isn’t punishment.
There are 2 possibilites.
1) People with money start having less money so that people with debt can pay back the debts
OR
2) People with debt, unable to get money they need to pay back those debts, will default, the debt will be written off as uncollectable, and the debt an money will both disappear into the thin air from which they were created.
It isn’t punishment. It is mathmatical certainty.
Darrell, doesn’t this analysis ignore the fact that those who save typically invest, and that puts the money back in circulation?
For example, if I buy an equity stake in a business, they now have cash in hand that they can use to purchase equipment from someone else. Similarly, if I buy a bond from a business they again have cash in hand that they likely spend in some way.
As long as the money continues to flow, I don’t see how your analysis reflects reality. Savers generally do not put the money under their mattress.
There was a time when success was measured by producing something, now it is measured by manipulating markets and money.
Also Mitt you never mention that the top 0.1% are paying a much LOWER tax rate than most of the rest of us thanks to their bought and paid for politicians.
“…….you can vote for someone else”.
No problemo, Mr “Born-on-Third”
John McCain got similar rough treatment at a town hall meeting just north of Tucson. The fireworks happened this past Tuesday.
I’m told that the crowd at his Gilbert, AZ town hall was also quite irate.
Who ran against McCain? They had to be horrible for McCain to win. I was praying he would be sent packing, I can’t stand the guy.
In last year’s election, John McCain’s Democratic Party opponent was Tucsonan Rodney Glassman.
Who the heck is he and why was he going up against one of the best-known names in American politics? Beats me. And just about everyone else.
Glassman’s claim to fame was that he had served on the Tucson City Council, and that he was from a wealthy family. Well, how nice.
What you didn’t hear so much about was that Glassman didn’t even serve one full term on our City Council. He resigned to run (a requirement in AZ) against McCain. Who trounced him.
‘After a minutes-long exchange with Romney and the crowd shouting over each other, Romney said, “If you want to speak, you can. But it’s my turn.”’
Sounds like the crowd was totally on board with Superrich Romney’s ‘no new taxes’ pledge — NOT!
Car owners fight for choice of mechanics
Bill would give independent garages ‘equality’ with dealerships
- MSNBC
Most of us simply take it for granted that when our car needs routine maintenance or repairs, we have the right to choose where to have it serviced.
If a mechanical problem is covered by the warranty, you’d be foolish not to head to the dealer. When you are paying for the work, you might prefer an independent shop.
In a recent survey, Consumer Reports readers gave independent repair shops significantly higher marks than dealers for service, satisfaction and price.
But here’s the rub. Independent repair shops can’t always work on a car because they don’t have access to the same technical information and complex computer diagnostic equipment provided by manufacturers to their dealers.
“Because of this, consumers are often forced to go to a dealership where repair prices can be up to 38 percent higher than at an independent repair shop,” says Sandy Bass-Cors, executive director of the Coalition for Auto Repair Equality, which represents repair shops and auto supply stores.
Jeff McLeod of Marshfield, Mass., experienced that frustration when he took his 2006 Kia Sedona minivan his trusted mechanic. The engine light was on, but the mechanic couldn’t diagnose the problem because he couldn’t read the computer code.
The Kia dealer a few miles away (where McLeod bought his car) had closed, so he had to drive 20 miles to a new dealership.
“The people were total strangers to me,” he says. “It was inconvenient and I was put out by it. I bought the car, and I should have the right to decide where to service it.”
The Motor Vehicle Owners Right to Repair Act of 2011 (HR 1449) would level the playing field between dealers and independent mechanics. The bill, which has bipartisan support, would require the manufacturer of any motor vehicle sold or leased in the U.S. to:
Make all information necessary to diagnose, service, maintain or repair the vehicle available to vehicle owners and service providers. (Automakers could charge a licensing fee for this information.)
Offer to sell the vehicle owner and service providers any related tools or equipment.
Provide aftermarket tool companies with information allowing them to produce diagnostic and repair tools similar to the ones used by dealers.
Automakers oppose the bill, saying it is unnecessary. Daniel Gage, director of communications for the Alliance of Automobile Manufacturers, says all the information independent shops need is already posted online. They simply have to buy a subscription.
Gage says dealers pay “very significant fees to be a dealer and be involved in the manufacturer’s service program.” Manufacturers say independent mechanics should pay, too.
Consumer groups support the concept of a right to repair legislation.
“You pay a lot for the car and the technology that goes into it,” says Chris Plaushin, director of federal relations for AAA. “You should be able to have access to that technology in order to have it repaired at a facility of your choice.”
I don’t go to the dealer because I can’t trust that they won’t sabotage something that is working to get more money out of me. Plus, I like keeping the small independent businessman in business.
The manufacturers are perfectly willing to SELL you all the manuals/data you need to fix their cars at your local independent shop.
The independent shops want the repair data for free.
Simple as that.
Why Illinois Can’t Afford its Poor Dead
- CNBC Chicago
The state of Illinois has reached a new level of broke. Come Monday, it won’t have enough cash to bury its indigent dead.
Illinois officials sent a letter to more than 600 funeral directors around the state to let them know there’s no money for funerals for individuals on public assistance.
“We got that letter,” said Jonathon Szykowny, owner and director of Szykowny Funeral Home. “I’m extremely upset by it. … I would be very concerned that during extreme economic times that some families can’t provide the necessary funds to bury their loved ones. Sometimes God doesn’t call during the best economic times and families can’t afford to pay for a funeral and need help”
In the past, the state has reserved about $13 million to help pay for an estimated 12,000 funerals for individuals who relied on public aid. Participating funeral homes were allotted $1,100 for funerals and $552 for the burial.
The 2011 budget, however, accounts for just $1.9 million.
The Illinois Department of Human Services letter said it can only guarantee payments for pauper funerals through August 15.
Funeral directors have been advised to look for money from city or county governments, and to advise families in morgues until funding can be secured.
“Now the only viable option — I don’t mean to make light of it — is to leave the body at the medical examiner office,” Szykowny said. “After 60 to 90 days they’ll take the body to what’s called a potter’s field and bury it in a numbered grave.”
More than enough for insane public union pensions.
Nothing to bury the poor.
Indigents who can’t be buried.
Lots of hungry people.
Soylent Green IS the answer.
Locally, a company called “EARP Distribution” supplies all the meat for McDonalds
Curiously enough, there is a “Earp and Sons Mortuary” on Blue Ridge Cutoff in KCMO.
Co-inky? Me thinks not.
Choose your own adventure.
It’s my second to last week of work and I won’t be receiving a recommendation from my boss. We started off on the wrong foot since they didn’t train me but he grudgingly admitted that I was doing a “pretty good job” but couldn’t bring himself to say that I’d be missed. I am still working though (at lunch now) and want to leave on a high note. So at his request, I sent out a thoughtful email to the sysadmin requesting that drives be set up for our disaster recovery platform, detailing size, names, what would be on them so that the correct drvies could be installed, etc.
I got this back:
“OK. What do you want me to do with this information?
Thanks
P——-”
Potential responses so far:
Jam it sideways up your @ss?
Use it as a road map to “gof*ckyourselfville”?
Sit and spin?
Put it into your secret decoder ring and use it to translate Linear A?
Sell it to the highest bidder?
Look upon my works, ye mihgty, and dispair?
That is the mystery.
What don’t I want you to do with it?
Wouldn’t you like to know?
I really like number one, which I stole from my dad.
Potential responses so far:
Call me in 6 months and I will tell you. I can be hired as a IT disaster consultant for $250/hour.
What do you wanna bet that in six months, they’ll be offering to fly MrBubble in to fix all the problems that are puzzling them.
As for his $250/hour fee? No problem! They’ll be in such dire straits that they’ll pay it too.
Great suggestions here! It turns out that my boss didn’t tell me that the RAID array is already there and I have to partition it to my desires. Well, I not a hardware guy so you get whatever I can figure out tomorrow.
SWITCH!
The physical drives are joined to form the array; this step is where the hot spare declaration will be determined. Within the array you configure the logical drives. Within the logical drives you configure the partitions or volumes.
Is this a pizza box server, iSCSI backplane or ethernet NAS?
“Put one thumb in your mouth, stick the other up your a$$, and wait for someone to yell “SWITCH”….”
Recommended by a former colleague (ex-Navy Senior CPO)
I suppose a simple…
“YOUR JOB”
would be totally inappropriate.
It is hard to resist taking some blood on your way out, but try.
Well one thing that isn’t deflating…
Grains Surge as U.S. Cuts Crop Forecasts After Damaging Midwest Heat Wave. (Bloomberg)
Corn, soybean and wheat prices surged, signaling higher costs for food and biofuels, after the government said U.S. farmers will harvest smaller crops than forecast last month following a damaging heat wave.
The U.S. Department of Agriculture cut its corn-crop estimate by 4.1 percent, reduced the soybean forecast by 5.2 percent, and said spring-wheat production will be 5.2 percent below what it predicted in July. The harvests for all three crops would be less than expected by analysts surveyed by Bloomberg. The U.S. is the biggest exporter of the crops.
Parts of the Midwest, the main growing region, were the hottest since 1955 last month. Smaller supplies of corn may increase costs for ethanol refiners such as Poet LLC, Archer Daniels Midland Co. and Valero Energy Corp. (VLO) and meat producers Tyson Foods Inc. (TSN) and Smithfield Foods Inc. (SFD), which buy the grain for feed. The price of corn, the biggest U.S. crop, has jumped 74 percent in the past year.
“Food is needed worldwide, so we’re going to be looking at higher prices,” Shawn McCambridge, the senior grain analyst at Jefferies Bache LLC, said in a telephone interview from Chicago.
Corn production will total 12.914 billion bushels (328 million metric tons), compared with 13.47 billion projected in July, the USDA said today in its first survey-based estimate for the crop. The average prediction of 31 analysts was for 13.079 billion. Last year’s crop was 12.447 billion bushels. Yields were cut to 153 bushels an acres, down from 158.7 in July.
one bad crop due to record heat does not an nflationary cycle make.
Who’s Picking Your Berries? Feds Find Young Children on Strawberry Farms. ~ ABC News
Nearly two years after ABC News cameras uncovered young children toiling away in Michigan’s blueberry fields, federal investigators have found yet another disturbing example of illegal use of child labor in the berry industry.
Three southwest Washington strawberry growers were fined $73,000 last week after the U.S. Department of Labor found children between the ages of six and 11 working in their strawberries fields in June.
While an exemption in the federal child labor law allows 12- and 13-year-olds to work for unlimited hours on large agricultural operations, children under the age of 12 are strictly prohibited from working under similar conditions.
Andrea Schmitt, an attorney with Columbia Legal Services in Olympia, said that the low wages made by workers in the Northwest berry industry are a key factor driving young kids into the fields. She said that berry pickers, who are usually paid a piece rate instead of an hourly wage, often struggle to make the federal minimum wage of $7.25 per hour.
“Minimum wage laws are not being followed with the adults who are working in this industry. Across the board, we see people making $5 or fewer an hour,” said Andrea Schmitt, who provides legal services to low-income families working in berry picking. “People can’t make minimum wage by the piece and so if they have another set of little hands adding to the pile of berries, they might be able to make enough to live on.”
Well, at least now we know how the strawberry pickers afforded their $750,000 house. With the 12 year olds able to work unlimited hours, they should be able to afford an unlimited mortgage, given enough children.
$73,000 is a mere slap on the wrist. Wow.
In this environment I wouldn’t be totally shocked to see protective labor laws chipped away.
What? No way!
Cut in Household Spending Points to Recession - Bloomberg
Growth in the second quarter slowed to a pace that has typically been followed by a contraction within a year.
Recession signals in the world’s largest economy are flashing red again.
Growth in the second quarter slowed to a pace that has typically been followed by a contraction within a year. Household spending fell in June for the third straight month; never in the past five decades has this happened outside of a slump. The Standard & Poor’s 500 Index plunged 16.8 percent in 11 days, performance that’s occurred only twice since at least 1970 without indicating a downturn.
“With so many red flags, the chances of a recession are rising,” said Jonathan Basile, a senior economist at Credit Suisse in New York. “A lot of the economic indicators are teetering. We’ve gone very quickly from a slowdown scare to a recession scare.”
Signs that the flagging U.S. recovery may fizzle haven’t been lost on Federal Reserve Chairman Ben S. Bernanke and his colleagues, who pledged this week to hold interest rates at a record low through at least mid-2013. Officials said they “discussed the range of policy tools” to strengthen growth and are “prepared to employ these tools as appropriate.”
“Downside risks to the economic outlook have increased,” according to the Federal Open Market Committee statement after the Aug. 9 meeting. Consumer spending has “flattened out,” the labor market has deteriorated and the expansion is “considerably slower” than expected.
Recession signals in the world’s largest economy are flashing red again.
When did they stop?
You mean you missed the last “recovery”??
It is weird that the recession is returning, just as that stimulus that didn’t create or save any jobs is ending.
I really think Republicans took the wrong argument on stimulus. Instead of saying it didn’t create of save any jobs, they should ahve been more honest, and said that it was only a short-term delay, added too much debt, and long-term would not fix the structural imbalances within our economy.
Oh, wait… They are the party that represents the poeple that have benefited from the imbalances… Oh, never mind.
“It is weird that the recession is returning, just as that stimulus that didn’t create or save any jobs is ending.”
I believe it is more that the recession’s effects are now less _masked_ due to the end of the Fed’s liquidity fire-hose of QE, not the gov’t stimulus spending. But I could be wrong.
“Oh, wait… They are the party that represents the poeple that have benefited from the imbalances… Oh, never mind.”
Kind of hard to reconcile that sentiment with the other party line about the 1%ers having coopted our fine institutions of government. I even wonder if the majority of these 1%ers are actually Republicans. In any conversation here, the party polarity is; well, Bipolar.
I even wonder if the majority of these 1%ers are actually Republicans
How many people living in Hollywood are in the 1%? I’d guess quite a bit. Aren’t most of them quite liberal?
And the professional athletes making $millions/year. They’re certainly in the 1%. Are they all republicans?
Perhaps it’d be worthwhile looking at a break down of who the 1% are. I’m guessing it’s not 99.99% wall street folks as the left would have you believe.
Spoken like a true wage slave who has never met, seen or observed the filthy rich.
Wake up kiddo.
Last week the story was we were borrowing more.
Not good if despite borrowing more we are spending less.
Postal Service considers cutting 120,000 jobs
By RANDOLPH E. SCHMID The Associated Press
Posted: 5:36 p.m. Thursday, Aug. 11, 2011
WASHINGTON — The financially strapped U.S. Postal Service is considering cutting as many as 120,000 jobs.
Facing a second year of losses totaling $8 billion or more, the agency also wants to pull its workers out of the retirement and health benefits plans covering federal workers and set up its own benefit systems.
Congressional approval would be needed for either step, and both could be expected to face severe opposition from postal unions which have contracts that ban layoffs.
The post office has cut 110,000 jobs over the last four years and is currently engaged in eliminating 7,500 administrative staff.
This story will breed another shitty Kevin Costner movie.
the USPS said it was imperative to rein in health benefit and pension costs, which are a third of its labor expenses.
Oh I guess they never thought of raising the price a lot for junk mail to see if that would generate some revenue?
I can’t tell you how much I miss waking up to the HBB. It’s weird being a part of the “drive home,” but I’ll take what I can get!
The new job is great, but busy.
Awaiting, thanks for asking about my son. We are going to get a second opinion from another dentist.