Bits Bucket for August 15, 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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Name:Ben Jones
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The U.S. dollar died forty years ago today.
President Nixon killed it.
There may be little mention of it in today’s news, but today marks the 40 anniversary of the day President Richard Nixon slammed shut the so-called “gold window” through which foreign trading partners could swamp their paper dollars for U.S. gold. The dollar, which had already lost purchasing power in the post-WW2 inflation was already wobbly, but when pulled the gold rug from under it inflation came on like a hurricane. Old-timers will remember the heavy inflation and sputtering economy of the 1970s. We invented a word for it. “Stagflation.”
What has happened to that 1971 dollar? It now worth 19¢ and losing purchasing power every year. Our present monetary calamity didn’t happen overnight.
If you’d like some background about how the dollar became a totally fiat currency, check Lewis Lehrman’s account in today’s Wall St. Journal:
~ The Nixon Shock Heard ;Round the World.
The debasement of the dollar was well underway at the time Nixon refused to ship all our gold to France. He is’nt the key goon in this, the Federal Reserve is.
Nixon closed the “gold window” for foreign governments for the same reason that FDR closed it for US citizens: demand exceeded supply. Either way, the bullion depository was going to be empty, because the government set exchange rate was too different from the price set by free markets. Subsidized-price gold then was very similar to the subsidized-price money that the fed is handing out to banks these days.
The dollar certainly is in ‘debasement’ nowadays…
Heavy inflation? Check. Sputtering economy? Check. Recovery-less recovery? Check.
The US is in a stagflationary depression.
Reality-less Recovery based on fabrication.
I am NOT interested in how the NBER defines a recession or how the wonks in DC calculate CPI. Those pigmen have never missed a meal in their lives, never applied for a student loan, never had dirt under their fingernails. They have no fricking clue what life is like outside of their bobos-in-paradise ivory tower and DC.
They are totally detached from reality for J6P down on Main Street. Cue deflation argument here, nobody’s buying it…
Whenever somebody calls current levels of inflation “high” I always think that they must be too young to remember the 70s. Even with the various changes in the calculation of the CPI, it has yet to get close to the levels in the late 70s/early 80s.
I remember them well…
Jim,
I agree, except in housing during the boom. I live in S. FL, and we were seeing (for several years) 30%+ YOY inflation in the price of homes. At the same time, we were hearing from the government that price inflation was at a nice stable 2-3%. I’d like someone to explain to me how something that most people spend 20-40% of their entire income on every year, inflating at 20-35% YOY can result in 2-3% yearly inflation.
Anyway, that’s the most extreme inflation example I’ve ever seen in my life, and yes, it was very different than what we have today.
Well yes, but…there’ are reasons that the purchase price of housing isn’t in CPI. You simply aren’t forced to purchase housing as opposed to renting it. So not only did rents not go up nearly as much, but if you already own a house, the current cost of housing has no effect on the cost of servicing the debt secured by your existing house. So if you simply plugged house prices into the CPI they would change more quickly than people’s actual housing expense.
In a real sense, purchasing housing (rather than renting) is an investment decision that people make to DECREASE their exposure to the rising cost of (rental) housing.
“I’d like someone to explain to me how something that most people spend 20-40% of their entire income on every year, inflating at 20-35% YOY can result in 2-3% yearly inflation.”
Too many questions–git back to work!
I wonder if the current “examination” of ways to get the shadow inventory rented has more to do with trying to keep rents (a large segment of the inflation calculation) down than anything else. Or, perhaps more importantly, to keep the expectations on increasing rent down. As I expressed briefly on Friday, they have almost no chance at coming up with a workable plan without massive government loan guarantees that I don’t see happening in this political atmosphere.
Cause they sure as heck don’t want the Fed to have to even consider interest rate increases, which they would if headline inflation picked up because of rent increases.
Yeah Polly, the problem is that there IS no “solution” acceptable to the powers that be. There is no low-cost way of going back to bubble prices. The answers are either massive government intervention, or letting prices fall to a market clearing price. Neither answer is “acceptable,” which is why we keep getting all these rainbows and unicorns plans like HAMP.
Polly, there are ~50 million rentals on the market. It would be very difficult for the shadow inventory to move the rental market to keep rents down.
I suspect the Fed will next need to telegraph a medium-term higher inflation target to avoid the need to raise rates (or more monkeying with the CPI).
“late 70s/early 80s.”
A lower rate over longer time is insidiously more damaging.
they are the same ones that think a 6% interest rate is high.
I was at a conference where there were two panelists talking about rates. One was from GE…he was saying that people should get used to needing to borrow at rates starting in the low 6’s. The other panelists got in a word at the very end, essentially saying “calm down, we’re still talking about a 6% rate here”.
Amazing how short people’s memories are.
And when prices fall into the range where the PITI at those rates — 6% or what have you — is no more than 28% gross income, let me know.
They want it both ways. They want to ease us into the idea of paying both high rates and high prices (and high rents, because at both high rates and high prices, nobody will buy).
You need to factor in the reality that a large percentage of households are renters, and will not be buyers.
If you throw out the bottom 35% of households when it comes to looking at incomes of the homebuyer population, you get a median household income of approximately $72,000 per year (somewhere between $70k and $75k, I picked a middle number; data as of 2009 from the Census.gov website).
At 28% of this income, the person can afford PITI of about $1,700 per month. If you assume a 6%, 30-year fully amortizing loan at 80% of cost, $1,000 per year for insurance, an 2% property tax rate, the target median home price is about $263,000.
If you assume they borrow 100%, the median home price should be no more than $218,000.
Admittedly, my insurance numbers are high, and property taxes can vary widely, but I tried to pick numbers that were fairly defensible.
The median home price for the same year as the income data was $216,700 (also from the US Census).
For some markets, the numbers don’t make sense. In others, they do, but overall, I have a hard time believing the argument anymore than home prices are too high relative to incomes.
Where does my math/reasoning fall down?
“Where does my math/reasoning fall down?”
Thought I’d jump in before the flaming starts. I see nothing wrong with your argument and I’ve been making the same one about the Phoenix area for the past year. Heck, you don’t even need to use the income of only the ‘homebuyer population’ for housing to be considered affordable by traditional standards here. I still agree with the argument that prices are likely to go lower in the short and medium term (mostly due to shadow inventory and jobs), but it’s difficult to argue that homes aren’t affordable today.
I realize many markets have been slower to correct than Phoenix.
http://www.businessinsider.com/best-housing-markets-next-5-years-2011-7
By the way, someone forwarded this article to me, noting forward-looking Case Shiller projections. While I don’t believe the numbers, I do think it is interesting that the group that sees the data most consistently with this blog believes that some markets will recovery so strongly starting so soon.
I personally think that any such “pop” upwards in prices will only be to the extent builders can justify new construction on their written-down land holdings. Once increases have happened to an extent that construction recommences, any price increases will slow down after the initial increase. 10% increase? Sure…maybe even two years in a row, but 11.9% per annum for 5 years in Carson City, NV? Really?
Wow, me English not so good today…
“Even with various changes in the calculation of the CPI, it has yet to get close to the levels of the late70s/early 80s.”
The inflation of the period you described did wonders for government budgets because as nominal prices and wages and investment income rose tax revenues rose right along with it.
Ah, (sigh) but those were the days.
Not that I am longing for them, just pointing out how different those times were from the times we are now living in.
I think a better era to compare today’s times to would be the Thirties.
Won’t work this time — tax strata are indexed to inflation.
IAT
In the 70s I didn’t have any money to invest. But I started my first IRA in 1981. I invested it in a bank CD earning 16.5%. I knew someone who bought a condo in Chicago in 1982 with an 18% mortgage rate. Yeah, the good old days.
Inflation wouldn’t seem so high if wages had inflated along with prices…
Whenever somebody calls current levels of inflation “high” I always think that they must be too young to remember the 70s. Even with the various changes in the calculation of the CPI, it has yet to get close to the levels in the late 70s/early 80s.
Housing, school, and medical care were way cheaper back then in comparison to income.
Well, our economy and society have thrived since the end of the “gold window.”
Oh, wait.
There was never enough gold for all the dollars borrowed into existance.
Gold standard let the first out get the gold and everyone else get nothing. Same as today, just the run to gold is taking longer.
Agreed.
I guess you could say the dollar is based on a ponzi scheme of sorts in that more and more dollars need to be borrowed into existence to pay off the existing debts.
The dollar is a loan, based on the assumption it will be paid back.
If debt growth is held in check to keep down leverage and keep it rooted in peoples’ ability to repay with wages, the economy stays in close relative balance with each entity buying nearly the same amount it is selling, then the assumption that the debt can be paid back is fairly safe and the dollar retains its value.
If debt growth goes unchecked, and trade imbalances develop where some people are going deeply into debt by buying much more than they are selling, while other build up large sums of cash savings buy selling much more than they are buying, then the risk that the debt can not be paid back increases, putting the value of the dollat at great risk.
I’m trying to understand this concept but I’m really not following.
A dollar is not a loan. It’s a currency. Currency is, and always has been, a logical construct. It represents a certain amount of value - of purchasing power.
I think I see where you’re coming from. Your unspoken assumption is that gold is the true currency, and that a dollar is a “wrapper currency” around gold. Take away the gold and you have a “bogus” currency. A currency that is based on a debt - that debt being payment in gold.
But the beauty of the currency logical construct is that as long as people have confidence in the construct, however it is represented - gold, silver, or paper - it works.
Gold was a currency for a long time. You can’t eat, shoot it, wear it, drink it, have it cure diseases. But people ascribed value to it.
The concept of currency is the oldest economic logical construct that exists. There are others - debt probably the second oldest, stocks probably the third. Because they’re logical constructs and not actual physical things, they are ripe for shenanigans.
My big concern is that that The Bernank will keep undermining the dollar currency. I think when a currency breaks - when confidence is lost in it - there is a very, very fast decline. Talk of intentional inflation is a big mistake IMO. Confidence has got to be kept in the currency.
If he does break the dollar, the banks and wall street - his area of concern - will be destroyed as well.
Neuro,
That theory falls short on so many levels, it’s a wonder people still buy it. “Currency” isn’t just an idea, it is a means to facilitate trade in an agreed upon medium of exchange. Gold has fit this bill without failure throughout history. FIAT currency has a 100% failure rate.
Sure with gold, you can’t eat it, shoot it, or drink it, but you can easily form it, wear it, transport it, determine it’s authenticity, divide it, and trade it in equivalent amounts. And most importantly, it is SCARCE, so it can’t be easily forged or duplicated. Try printing 1 gold coin out of thin air… impossible. This is why a FIAT currency is doomed to failure.. it isn’t scarce. Those who can will simply make more at will, devaluing the remaining “currency”
This was civics 101 in HIGH SCHOOL! If you could go trade a $20 bill in for a $20 gold eagle would you have ANY concern at all that our currency would fail? There would still be some, but only to the point that they stopped giving you gold coins for your 20 dollar bills. A gold eagle today has the equivalent purchasing power of a gold eagle from 100 years ago.. try getting that with a paper currency…
Gold actually has a 100% failure rate as there is no country currently pegging their currency to gold.
There were in the past; they aren’t now, ergo gold as a means of backing currency has failed.
So you’re saying you can’t trade an ounce of gold for dollar bills? There are plenty of instances of not being able to trade worthless FIAT for gold.. Show me a single example of not being able to trade gold for paper.. Oh, and if you think gold has failed, feel free to send me all yours. I’ll gladly give you $20 per ounce for that worthless junk metal you are holding! You would be getting a deal for that failed metal!
“I’m trying to understand this concept but I’m really not following.
A dollar is not a loan. It’s a currency. Currency is, and always has been, a logical construct.”
A dollar is most certainly a loan.
You go a bank and take out a loan, dollars are created along with offsetting debt. You use a credit card, dollars are created along with debt.
Each dollar represents that you are owed some goods and services in the future in exchage for those dollars. The debt represents that you owe someone goods and services in the future.
There are no dollars without debt and no debt without offsetting dollars.
“It’s a currency. Currency is, and always has been, a logical construct.”
Currency is a very, very small subset of the dollars that exist. Less than $1T of the $7.7T M2 money supply the Fed talks about. They stopped talking about the M3 money supply as it was exploding.. I mean, not representing meaningful data.
There is $38T-$39T in private and public secotr debt. That is 1-for-1 matched with dollars of money in existance.
The dollar was not always only a logical construct. Originally, it was defined as its weight in silver, and a silver dollar was a commodity currency, not a logical currency.
But even in those days, the vast majority of dollars were bank notes that were loaned into existance based on leveraging small amounts of gold and silver into many times as many dollars. Bank loans create money out of thin air, offset by debt. Always have, always will, regardless of whether we’re on a gold standard, silver standard or government promise to pay standard.
“Your unspoken assumption is that gold is the true currency, and that a dollar is a ‘wrapper currency’ around gold.”
Nothing could be closer from the what I am saying. What I am saying is that the dollar is an iou, and it is perfectly acceptable to exist as an iou, AS long as we limit debt and money growth to a reaqsonible level that is probable to be repaid based on wages.
Most dollars have always existed as IOUs, and as long as it is beleived the IOUs can be repaid, dollars hold value. When we have gotten into trouble is when we have allowed debt and dollars to grow misproportionattly fast and lose their root in their ability to be repaid, that we have gotten into trouble.
For example, the last 30 years debt and dollars have been increasing at 3x the rate of inflation, while wages have been rising more slowly than inflation. This creates a situation where the very high debt can’t be repaid. When the debt can’t be repaid, the dollars that were borrowed into existance by that debt, simply ceases to exist.
“Gold has fit this bill without failure throughout history. FIAT currency has a 100% failure rate. ”
Money as an IOU only fails when the debt and offsetting money are allowed to grow at rates not supportable by wages, making the debt unable to be repaid, and the value of the fiat currency collapses.
Not that I disagree with your argument that gold is a better store of value than fiat currency mathguy, but I’m not aware of any instances of not being able to trade dollars for gold. You have to offer more dollars today than you did a decade ago (a LOT more), but the market is still very liquid. Yes, no one will sell you their gold for $20 per ounce, but that doesn’t prove that dollars are worthless. Otherwise the fact that no one will give you $5000 for an ounce of gold would prove that gold is worthless. Neither is true. Lots of transactions occurring every day at the market price.
“Show me a single example of not being able to trade gold for paper”
That is not the definition of a currency. Curency is a popular median of exchange.
Walk into wallmart with a gold bar and try to trade it for goods and services. Try to get them to return your change in gold.
Oh, people do not directly exchage pieces of gold for goods and services on a conssitant and dailey basis? Then it is not a currency.
“So you’re saying you can’t trade an ounce of gold for dollar bills?”
That is not the definition of currency. Currency is a median of exchange for goods and services.
Walk into WalMart and try to exchange a gold bar for a cart full of goods and services. Ask for your change in gold.
What? They do not accept gold, and do not return change in gold?
Then gold is not a currency. Once upon a time they did, but now they do not. Gold is a commodity, not a currency.
I may have to pay a modest premium to the current “market” exchange rate, but since gold is divisible, I bet I could slice off a chunk of my gold bar.. a very very small slice and pay for the whole cart of goods. No change needed .. oh yeah because gold is easily DIVISIBLE to the correct proportion.. Further, with just 1oz gold coins, I know lots of people who would take them as payment, no hesitation. Especially if I was paying at the rate of 1 gold coin per day of work. Further, try to walk into a store in switzerland and pay for a cart of goods with your US dollars. Oh they won’t take it..? must not be currency?
That is a poor argument.. If you paid a shopkeeper several times the going rate in US dollars even in switzerland they would take it, just like they would with gold. Same with the Euro in the US…Is the Euro not a currency because it is not commonly accepted in US stores? It sure is accepted with a conversion premium. People understand the cost of conversion and convertibility. They accept it when they pay an exchange rate to exchange money. It’s when the money changers stop taking a currency that the problems arise. Guess what? No one has ever stopped taking gold.
Try to address the facts of the statement I made… What were WWII Deutsche Marksworth? Their heat content to burn.. This is a solid example of a FIAT currency gone to hyperinflation. No such example exists for gold.
Also, Darrel, it’s *medium* of exchange. Median in the central number in a sorted list of numbers.
Sorry, it was the general German “Mark” as opposed the Destche Mark : also called the papermark since it was taken off the gold standard.
http://en.wikipedia.org/wiki/German_papiermark
10 housing markets that will collapse this year
Recovery? In these areas, hitting the bottom of will have to come first
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 percent by 2012.
Methodology: We used data from the Fiserv Case-Shiller Indexes, which track real estate activity in 380 cities. We selected those that are forecast to have the largest percent price drop between the first quarter of this year and the first quarter of next. We added several other pieces of information to our city-by-city information, including June unemployment levels, median household income, and when home prices are expected to reach their troughs in each market.
Median household income in these cities tended to be near the U.S. median, and in some cases well below. We expected to find high unemployment in these cities. This turned out to be the case. In all but one of the cities we examined, unemployment was well above the national average. The rate was over 18 percent in two of the cities. This link between unemployment and expected future drop in home prices shows again how insidious the housing price problem is.
http://www.msnbc.msn.com/id/44091488/ns/business-real_estate/#.Tkj8qmH0TFF
I find their selection process highly suspect, as we have seen evidence again and again that the supposedly-local housing bubble was completely ubiquitous across the U.S., as it was Wall Street gone wild which provided the fuel for the bubble, not local factors.
Check out the comparison between Las Vegas (No. 3 on the list) and San Diego (not on the list):
“3. Las Vegas, Nev.
Expected price drop: -13.9 percent
Median family income: $58,900 (196th lowest)
Unemployment rate: 12.4 percent
Median home price: $140,000 (90th lowest)
Projected to hit lowest level: Q4 2012″
Median home price to median income level = $140,000/$58,900 = 2.4
?. San Diego, CA
Expected price drop: -? percent
Median family income: $60,103 (?th lowest)
Unemployment rate: 10.4 percent
Median home price: $330,000 (?th lowest)
Projected to hit lowest level: ????
Median home price to median income level = $330,000/$60,103 = 5.5
So you see, the San Diego median home price to median income level ratio is over twice that of Las Vegas. I guess this proves once again that everyone wants to live here? Am I the only one who finds it puzzling that Las Vegas is on the ‘future real estate price collapse’ watch list, but not San Diego?
There are other factors than just price/income.
price/rent.
Then there is that old market nemisis…. supply and demand.
We keep seeming to forget that these articles are written by the same people that were writing about how we were at a permanently high plateau, etc.
I for the most part ignore the future looking statements, and focus on current data. Make your own judgement.
IMHO, Vegas has already crashed in terms of home prices to levels far below equilibrium. Whether they go down by another 1% or 10% doesn’t change that.
The fascinating part about Vegas is their conference business. HUGE numbers of people go every year. How long will be be until those people are ready to part with non-recession levels of discretionary income? I suspect it won’t be until housing by and large is through the foreclosure mess, and there is some better feelings about housing. We all have different opinions on that one…
It seems like they’re predicting the places that will collapse are the ones that already collapsed. Safe prediction I guess.
I submit that the most reliable predictions are those which claim to predict an outcome which has already occurred.
‘I guess this proves once again that everyone wants to live here?’
I for one would most certainly prefer living in SD over LV.
They left Phoenix Metro off of the list.
At this point, a “crash” of another 20% in Phoenix only equates to a little over $20k. Sort of a non story. The real crash here already happened. Even if prices went to zero from here it wouldn’t equal the value of the crash that already occurred.
Agreed. Ditto for Merced, CA, which has a new UC campus.
Good point…But I can’t hear it enough
Lowe’s cuts outlook again after Q2 sales miss
August 15, 2011 By Dhanya Skariachan
NEW YORK (Reuters) - Lowe’s Cos Inc (NYSE:LOW - News) reported weaker-than-expected quarterly sales and cut its fiscal-year outlook for the second time in three months as home owners put off big renovations in an anemic U.S. economy.
Lowe’s, the second-largest home improvement chain behind Home Depot Inc said sales rose 1.3 percent to $14.54 billion in the second quarter, missing analysts’ average estimate of $14.75 billion.
“Despite some recovery in our seasonal business, our performance for the quarter fell short of our expectations,” said Robert Niblock, Lowe’s chairman, president and CEO.
The retailer now sees sales rising about 2 percent for the fiscal year ending February 3, down from its prior forecast of 4 percent.
HD also reported weaker than expected sales…
More tax cuts for the elite should increase demand and fix this right? Cutting gov spending and increasing unemployment should fix this righ??
Round and round the toilet bowl we go.
I remember going into a Lowes store back in October ‘06. Bright, sunny Saturday morning in Tucson. Perfect time to do a home improvement project.
And the store was deserted. It was as if I was in some sort of “Where did everyone go?” scenario.
I’ve seldom seen a crowd in any home improvement store since then.
Another Real Estate Time Bomb: Unsellable Vacant Homes?
From a NYC reader via e-mail: Naked Capitalization.Com
My good friend is a real estate broker in Westchester/Dutchess County. He said he is seeing a real problem growing with title insurance. He said a large number of the REO properties banks try to get him to sell cannot close because of title problems. He’s worried about the growing number of vacant homes which may be impossible to sell.
For those who don’t know the New York area, Westchester County is full of wealthy bedroom communities like Scarsdale; Dutchess County is further out but well off by national standards. The unemployment rate for the state is better than the national average, and with New York famously having the longest foreclosure clearing time in the US (as in the number of defaulted homes versus throughput rates in the courts), the state is not a prime candidate for a huge inventory of unsold homes.
Put more simply, if you are seeing a significant overhang of unsold, and perhaps more important, unsellable, houses in two relatively well off counties in New York, it’s likely that the same problem exists elsewhere.
We noted last October that Bank of America was now eating title insurance liability on foreclosed properties sold by its servicer. Perhaps BofA has since reversed course, but it may be that other major servicers have not followed suit. We’ve also been told by real estate attorneys of title insurers offering policies for foreclosed properties with significant carveouts, making them more or less useless for the buyer.
One of the notions you often hear voiced is that the residential real estate market won’t recover until it “clears”. That belief is then used to argue for faster foreclosures, when foreclosures are certain to result in lower prices than modifications (to the extent that borrowers have enough income to be viable with a deep mod; there is no point in trying to rescue those beyond salvation). But whatever form of “let’s get this over with” you believe in, whether the Mellonite “liquidate homeowners” or a mix of foreclosures and mortgage mods, the tacit assumption is that the foreclosed homes will be sold in an orderly manner (or in cases where communities have shrunken, razed).
But what happens when you have unsellable homes, becoming havens for squatters or targets for vandals? They not only pull down the values of properties nearby, but they also represent a safety risk.
To put it bluntly: vacant homes are crackhouse futures.
This puts quite another complexion on the story of Fannie and Freddie’s interest in renting homes. Per the Wall Street Journal:
Mortgage giants Fannie Mae and Freddie Mac sold a record 100,000 homes during the second quarter. Together with the Federal Housing Administration, the entities owned about 250,000 homes at the end of June, or around half of all unsold, repossessed properties. Another 830,000 homes backed by the entities are in some stage of foreclosure, according to Barclays Capital.
The GSEs have been pushing banks to foreclose faster, and one has to wonder how many of those 250,000 unsold homes have clouded title that is deterring buyers. The story puts a spin on the logic of renting:
Banks are usually faster than mom-and-pop sellers to cut prices in order to unload properties quickly. In many hard-hit markets, more than half the sales have been made to non-owner-occupant investors—at discounts. The upshot is that home prices will continue to fall if many properties continue to be sold out of foreclosure. That has made it harder for traditional sellers to sell their homes at prices potential buyers have agreed to because foreclosures are driving down appraised values, killing some agreed-upon deals at the closing table.
So investor bottom fishers are important buyers. And they are also probably professional enough not to buy a property with dubious title when there are plenty of home on offer.
And notice how many they want to offload:
One proposal would sell packages of hundreds or thousands of foreclosed properties in bulk to investors that agree to rent them out. That approach is preferred by the Department of Housing and Urban Development, which is taking back properties as defaults mount on loans backed by the FHA.
Another approach would let investors enter joint ventures with Fannie or Freddie to invest in a pool of converted rental homes. A national property-management business would handle day-to-day landlord responsibilities. Investors would pay for rehabbing and maintaining properties and would share revenue from monthly rental income and the ultimate sale of the property. Such a joint venture would be modeled on the Resolution Trust Corp., which sold failed banks’ assets in the early 1990s.
See how large scale these measures are. And notice the complete absence of any discussion as to why it is better to convert these homes to rentals (as in it is not driven by any analysis of local rental needs or a change in national priorities to favor more renting). Just because speculators are buying does not mean all of them intend to be landlords. Some may simply hope to catch a bottom or near bottom and flip the homes when conditions improve.
I hope readers will provide input on whether they see a growing inventory of unsold, and particularly unsellable homes in their community. This looks to be a development worth monitoring.
“He said he is seeing a real problem growing with title insurance. He said a large number of the REO properties banks try to get him to sell cannot close because of title problems.”
That’s what I’ve been saying about MERS. You can’t just say ’skrew those FBs and sell their houses now’ until we can determine who owns those houses. And if you skip over that part then the title insurers won’t insure.
It’s yet another can that can’t be kicked down the road. Turns out those regulations that the banksters devised a way to avoid were there for a reason.
Solvable I think, but the banks won’t like the solution: something like “key money” in exchange for a release of all rights to the property to all the parties that might have an interest in said property. But of course this means ADMITTING that they have hopelessly screwed up the chain of title, something that they’re still not ready to do. Instead they hope that the can simply convince that their “minor paperwork issues,” and fraud should be ignored.
More likely.. The banks will open “captive” title insurance companies that will write the policies for them.
Yes, like their “captive” rating agencies (Moodys, S&P, etc.) put AAA ratings on toxic-waste MBS bundles being peddled to “investors.”
Or the “captive” trustees for the MBS pools. The relationship between Bank of America and the Bank of New York comes to mind.
The relationship between the Federal Reserve and the Wall Street plutocrats also comes to mind.
“something like “key money” in exchange for a release of all rights to the property to all the parties that might have an interest in said property. ”
The problem is not with the FBs stating ownership (other than by possession)- it will be easy to show they haven’t paid their bills.
The problem is on the other end: Who owns the house after the FBs are kicked out? Which comes down to ‘who takes the loss?’, which presents the problem that the titles weren’t properly assigned at the beginning of the securitization process, which invalidates the MBSs (since they aren’t backed by mortgages), which leads to a monster charlie foxtrot. And again leads back to the question: who owns what?
Deregulation at work.
Well yes, for the most part it isn’t the FBs interest in the property that are a problem. Somebody probably has the right to foreclose. But there’s the possibility that some (many? most?) of these loans were never securitized properly in the first place. So some parties in that purported chain of title might be forced to take the loss. Nobody knows exactly who ends up with the loss at this point. You’d need every potential party to give up their potential interest in the foreclosed property WITHOUT knowing whether they might end up having to buy the loan back at par.
“Nobody knows exactly who ends up with the loss at this point. You’d need every potential party to give up their potential interest in the foreclosed property WITHOUT knowing whether they might end up having to buy the loan back at par.”
Like I said, a monster charlie foxtrot.
Including the unsecured bond holders of various bankrupt entities that may never have properly transfered ownership of the mortgages to the next person who was supposed to own them. Talk about people who really aren’t in a position to figure out what their responsibility is in the process, that would be about the most unready that I could come up with if the bankruptcy is long over.
The MBS holders at least have a servicing agreement with a company that has employees. Or they did at one time.
Eventually - the states are going to have to clear the titles to these properities.
Call the Chinese, they will take them and we get hundreds of billions US dollars repatriated back home …done deal.
And notice how many they want to offload:
One proposal would sell packages of hundreds or thousands of foreclosed properties in bulk to investors that agree to rent them out.
Related story in local paper:
http://www.news-journalonline.com/news/local/east-volusia/2011/08/15/registry-helps-keep-properties-maintained.html
Copper thieves are going to make those vacant homes a lot more unsellable.
Happened to a house down the street and around the corner from the Arizona Slim Ranch.
Place had been foreclosed on, but then it became occupied by squatters. They stripped anything and everything, and I’m told that the new owner had quite the fixup job.
Arg.
WWII did not just put people to work. It created positive trade imbalances in our favor as other nations emptied their gold ald silver vaults to buy war materials from us. It destroyed much of the world’s excess production capacity. It broke rich people and created new rich.
Here are the main points
1) No trade deficit for us preventing spent money from leaving out.
2) 90+% top marginal tax rate preventing money from collecting into few hands.
3) With 1 and 2 above, money spent stayed moving through the economy.
Now:
Massive trade deficits and low top tax rates means any money spent into the economy leaves the country and ends up in the accounts of people that already have too much money to spend it all, quickly draining the money right back out of the economy.
WWII, money spent kept cycling through the economy for years.
Now, money spent makes a couple cycles at most before draining out of the economy.
It destroyed much of the world’s excess production capacity. Yes, that factor is so often forgotten by those who argue that WWII’s spending provided the stimulus to get us out of the depression. Of course in this decade we’ve spent large amounts of money on wars in countries that were by no means our economic competitors.
The depression ended before we began rebuilding from its destruction.
‘its destruction’= WW2’s destruction
True, but the advantage gained by destroying the production capacity of our competitors allowed us to pay back the money that was borrowed to fund the war. The borrowing likely had a stimulative effect in the short term and was successful long term because we effectively crippled our major production competitors.
I think most people agree that even the recent stimulus had a positive impact on the economy in the short term (created/maintained some jobs, boosted GDP, etc), but the obvious argument against it is that there is no lasting effect other than the debt that is created. If we borrowed more money today to bomb the heck out of everyone that we have a trade deficit with we’d likely “fix” our economic problems for a few decades once again.
The velocity of money in an economy matters.
“Unsellable Vacant Homes?”
How is ‘unsellable’ defined? Does it mean the owners are unwilling to lower the asking price to a level where a buyer is forthcoming?
The only way to determine whether a home is ’sellable’ is to test the market by Dutch auction: Keep lowering the price towards $0 until a buyer steps up and makes an offer. If you don’t get an offer by the time the price is down to $0, then perhaps ‘unsellable’ is an appropriate description.
I do that a lot on Ebay….start high then lower it till it sells…just sold over $700 worth of stuff in the last 3 weeks..
That’s a standard technique which, I believe, goes back at least as far in time as the Dutch Tulipmania. You have to wonder how low they had to drop the asking price to sell tulip bulbs which previously sold for the price of a house.
They mean that nobody knows who really owns the house. If I stood on the corner, pointed at a new Mercedes driving by, and told you I’d sell it to you for $1,000, is that a good deal for you? THAT kind of unsellable.
To be fair, it’s more like the guy is sitting in the Benz in the parking lot offering to sell you the car, but the ignition has been replaced by a screwdriver and the “title” was done on a xerox and has whiteout all over it.
“Mortgage giants Fannie Mae and Freddie Mac sold a record 100,000 homes during the second quarter. Together with the Federal Housing Administration, the entities owned about 250,000 homes at the end of June, or around half of all unsold, repossessed properties.”
That’s the whole point here: How do we know that they really owned these 250,000 homes? Just because they said so?
Interesting question. Maybe that’s why they bought such a high percentage of the trash paper from those banks — just to create clear title. “It doesn’t matter WHICH houses we bought from WHAT banks, because we bought ALL of if from EVERYBODY, right?
More provocative question:
Who is the real owner of the 3.35 million homes whose nominal owners are either more than 12 months delinquent on their mortgages or in foreclosure?
The # of million dollar homes that have been listed in my area for more than 4 years is off the charts. Banks haven’t wanted to accept the losses and won’t sell. Owners have had the money to hold onto them not wanting to accept losses. This is the area that is going to collapse hard in the next several years.
But what happens when you have unsellable homes, becoming havens for squatters or targets for vandals? They not only pull down the values of properties nearby, but they also represent a safety risk.
A few blocks away, there’s a Frauddie Mac house for sale.
After being vacant since the middle of last November, it finally has a “for sale” sign out front. (Sound the trumpets! Frauddie finally sprang for a proper sign!)
I should mention that this house is just a few feet away from a very busy street. One of central Tucson’s busiest, in fact. And, right across the street, there’s a place that’s been boarded up for years. This place is quite the feral cat magnet. To the point where even the homeless don’t crash there.
In short, this house has “Buy Me!” written all over it.
Realtors Are Liars®
‘Ken Rogoff: Infrastructure spending, if it were well-spent, that’s great. I’m all for that. I’d borrow for that, assuming we’re not paying Boston Big Dig kind of prices for the infrastructure.’
‘Fareed Zakaria: But even if you were, wouldn’t John Maynard Keynes say that if you could employ people to dig a ditch and then fill it up again, that’s fine, they’re being productively employed, they’ll pay taxes, so maybe Boston’s Big Dig was just fine after all.’
(OK, now it’s really gonna get weird.)
‘Paul Krugman: Think about World War II, right? That was actually negative social product spending, and yet it brought us out.’
‘I mean, probably because you want to put these things together, if we say, “Look, we could use some inflation.” Ken and I are both saying that, which is, of course, anathema to a lot of people in Washington but is, in fact, what basic logic says.’
‘It’s very hard to get inflation in a depressed economy. But if you had a program of government spending plus an expansionary policy by the Fed, you could get that. So, if you think about using all of these things together, you could accomplish a great deal.’
‘If we discovered that space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. And then if we discovered, oops, we made a mistake, there aren’t any aliens, we’d be better –’
‘Ken Rogoff: And we need Orson Welles, is what you’re saying.’
‘Paul Krugman: No, there was a Twilight Zone episode like this in which scientists fake an alien threat in order to achieve world peace. Well, this time…we need it in order to get some fiscal stimulus.’
http://globalpublicsquare.blogs.cnn.com/2011/08/12/gps-this-sunday-krugman-calls-for-space-aliens-to-fix-u-s-economy/
Everyone laughs at stimulus spending, until all other methods are tried and failed. Then stimulus spending will pull us out, just like in the last depression. Watch and see.
It just sux when the spending has to be on wars, but some will accept it in no other form.
Stimulis spending is for rich countries. If the graineries were full, then open them up. When it’s all IOUs and robber barons, good luck.
How did we afford WW2?
The Obama administration is making comparisons to the debt/GDP ratio post WWII which are completely bogus. Didn’t “rescued” allies and defeated Axis nations get a giant bill from the USA for war efforts? I also know the British and Chinese bought $billions of weapons and supplies and helped our economy tremendously before, during, and after the war.
Didn’t “rescued” allies and defeated Axis nations get a giant bill from the USA for war efforts?
No, we loaned them huge amounts of money to rebuild their economies- more deficit-based stimulus that worked out great.
I also know the British and Chinese bought $billions of weapons and supplies and helped our economy tremendously before, during, and after the war.
Yes, government deficit spending on armaments indeed stimulated our and their (and most of the world’s) economies out of the depression. Like I said, it works. It’s just that there are so many better things to spend it on than bombs and guns. But as I said, some will accept government stimulus in no other form.
Not all of the money spent fighting WWII was “wasted”
-At the end of the war, the US government had thousands of military transports to give away (usually to governments trying to restart their national airlines), or sold for 1/10 of MSRP.
This led to the USA dominating postwar aviation.
-It also led to the building (worldwide) of air bases capable of handling 4-engine bombers…….that also worked for 4-engine transports and airliners. Those assets are still being used.
Wasteful spending cures depressions the same way that drunkenness cures headaches.
Read “Economics in One Lesson” for an explanation of the “broken window fallacy”, and you’ll realize how you’ve been bamboozled.
I have to agree. It’s fun fun fun if you start with a nearly clean credit card. Reagan can thank Volcker for the 80’s party.
Obama was handed a credit card so overused by Bush that the numbers were worn off. (Yes, I’m still blaming Bush, IMO justafiably.) No fun fun fun for Obama.
The thing is, stimulus is the cheapest way out. Any idea what letting-it-all-crash does to tax revenue? (Not to mention the potential costs of civil unrest, war, etc, which tend to accompany letting-it-all-crash, and increase its costs exponentially- see WW2).
“Obama was handed a credit card so overused by Bush that the numbers were worn off.”
who needs a worn out credit card when you have a printing press.
Obama was handed a credit card so overused by Bush that the numbers were worn off. (Yes, I’m still blaming Bush, IMO justafiably.) No fun fun fun for Obama.
So you TRIPLE the deficit spending???
ISTR that most of the difference is on the revenue side. It’s not so much that Obama raised spending (although there was a fair amount of that, extending unemployment benefits, continuing the Bush bailouts etc.) but unemployed people pay less income taxes. Cutting the payroll taxes 2% didn’t exactly boost revenue either.
IMHO, after we have tried everything else, they will eventually realize that the only way out of this mess is to “inflate it away”. Of course, you have to actually get that inflation to main street (wage inflation) and then have it “trickle up” through the system (prices go higher because demand increases; but demand increased because more people have more money).
How we go about implementing this; I really don’t know (income tax holiday for 1 year?). But, that’s what needs to happen, same number of goods, more dollars chasing them causing the price of everything (including housing) to go up. It’s the only way to dig out of the debt; IMHO.
“ISTR that most of the difference is on the revenue side. ”
Which is exactly my point about the costs of letting-it-all-crash. It’s far more expensive than wisely applied stimulus.
I’m not sure that stimulus is a real solution here. In the face of stagnant wages, the FIRE economy has tried to boost demand through increasingly shaky lending. But that merely shifts future demand to the present. We’ve reached the logical conclusion of that strategy, with consumers filled up with debt that they have difficulty servicing. Even though the government can borrow more cheaply, that doesn’t raise demand on a long term basis unless private sector wages go up in real terms.
NO!
People don’t understand what “temporary” means. You give them cheese, they automatically think they’ll get that cheese forever. Could you imagine if I didn’t have to pay income tax for a year? My income would jump 30%. That would just give every gas station, grocery store, Best-Buy, landlord, you name it, to raise their prices, because they know that I have the money to pay.* So what happens next year when I have to pay tax again? You think those prices will go right back down? Hell no. As long as we can cut back on something else to pay (and we have to, can’t not buy food), prices will stay at the high level. At best they will be slow going down.
This is similar to what happened when women entered the workforce en masse in the 80’s. At first, those two-income households were sitting pretty, but soon prices rose to suck up the extra cash, especially housing in good school districts. Now two incomes are a necessity instead of a luxury. Repeat this example for any type of cheese: credit cards, income windfalls, tax holidays, etc.
Alpha, you are buying into the fear propaganda: Stop borrowing and life as we know it will cease. The world is not going to end if we stop this ponzi game.
“This is similar to what happened when women entered the workforce en masse in the 80’s.”
what came first…the slow devaulation of the currency…or more women in the workforce.
in the south…it was the former.
my mother had to work her entire life…way before the 80s.
“How we go about implementing this; I really don’t know (income tax holiday for 1 year?)”
Given that the under $500/wk crowd pay hardly any income tax, i don’t see how that would work.
If you want inflation, increase the minimum wage on a regular basis. That’s what they did in Mexico during the late 70’s. It was increased 2 -3 times a year.
It wasn’t until they stopped their printing press and stopped jacking up minimum wage that they got their inflation beast under control (in the 80’s). The down side was that Mexico nearly collapsed. I had family down there at the time and it was really, really bad. They only survived because I sent them money on a monthly basis.
there is no way out this without pain…lots of pain.
“there is no way out of this without pain … lots of pain.”
Agree. Which means the issue staring at us boils down to pain management.
There will be a dispersal of pain but not in equal amounts; Some people will slide by with just a wee bit of pain, others will get a full dose.
IMO the ones who will get to slide by are the ones who
bother to try to arm themselves with knowledge and understanding. Pain - as does life - seems to “happen” to those who don’t want to be bothered.
“So you TRIPLE the deficit spending???”
Shhhhh. We are not supposed to tell the folks that Obama is adding 2 Trillion dollars per year to the National Debt all in the name of countering the deficit spending under Bush.
Tax cuts and wars. Bush did worse than run up the credit card. In a way, he’s STILL running up the credit card, every year, with those tax cuts. And it’s not like Obama can stop the baby boomers from getting older and sicker.
The economy be different a couple of years from now. US will be almost totally out of Iraq and mostly out of Afghanistan. Libya will be over one way or another. No more Bush tax cuts (at least on the rich), no more payroll tax break, and the health insurance exchanges will kick in.
You’re assuming we won’t be dragged into any more regional conflicts in the interim. Or if the neo-cons have their way, that we won’t spring for new opportunities to impose “democracy” at the point of American bayonets on countries that are manifestly unsuited for it.
“In a way, he’s STILL running up the credit card, every year, with those tax cuts.”
This was true until the end of last year when Obama signed a 2 year extension. Could have easily vetoed that. Without signing that extension, the tax cuts would have already expired.
And no, I’m not a republican. Both parties suck.
I can’t say I disagree, Max. But those are going to go away (hopefully). They should never have passed in the first place.
While we still have the trade imbalances that drained the money from the economy in the first place, any money pumped into the economy quickly drains out.
Its the imbalances.
My friend would agree. He’s a large general contractor for municipal buildings and hospitals. I spoke with him over the weekend and apparently business is booming on account of a new federal or state handout. He feels so confident of his prospects he bought another house….idiot…
Like I said, you give someone temporary cheese and they think it will go on indefinitely and spend accordingly.
If you give me temporary cheese, I’ll put it in the bank for as long as it lasts. When the biofuel contacts the wind turbine, I’ll go on Oil City plan.
Interesting … I know a guy who works for that kind of company out here, he says business hasn’t been this slow in decades and is worried about layoffs.
Was it stimulus spending that saved the day or the fact that competing global production capacity was taken out of the equation?
Bombs away!
See, the problem with Krugman is, his brain is oxygen deprived because of difficulty breathing due to all that facial hair.
Tell us how we are going to fix unemployment and pay off the debt?? If GDP falls further how will that affect the deficit?
If we cut spending unemployement is going to go up. The right always says well if we keep borrowing money the bond vigilantes willl drive up rates, well that isn’t happening now rates continue to fall.
We need VAT tax, Tariffs, Payroll tax cuts, cutting war and medical spending with a single payer system that costs 50% less, and we need to tax the rich. Warren Buffet has written yet another article on this.
Amen on the tariffs. Governments shouldn’t be in the business of “creating” jobs. They’re supposed to create an environment where jobs are created. Seems to me that increasing tariffs creates jobs here AND increases revenue without increasing spending.
“World War II, right? That was actually negative social product spending, and yet…..”
Is it a full moon?
No, it’s a Rasputin wanna-be, strangling on his facial hair.
‘Paul Krugman: Think about World War II, right? That was actually negative social product spending, and yet it brought us out.’
Unless you were Europe or Asia. It did not work too well for them.
50+ Million dead
Whole Cities and whole countries bombed out
Talking Point Alert!
Krugman calls for second Holocaust! “Last one helped GDP”, says hairy intellectual commie.
Do we get to play the Nazis part this time?
Aren’t we already?
“Aren’t we already?”
Yes, the progressives have quite a resemblance.
“the progressives have quite a resemblance”
Progressives favor the war machine? Progressives wrote the Patriot Act? Progressives started Homeland Security? Progressives want to kill all unions?
You must be living on a different planet than I am.
I was thinking more about the “Forever War” cheerleaders.
“Yes, the progressives have quite a resemblance.”
Ugh, I hate comments like this. You realize what the Nazis did during WW2, correct? I despise both political parties, but I stop well short of comparing either of them to Nazis. Jeffrey Dahmer lived in Wisconsin just like lots of my family does. Would you argue that they have “quite a resemblance” to him based on that similar characteristic?
Sorry, I am just serving up some of their own medicine, I don’t like Nazi calling either…I guess 40 years of Conservatives and Libertarians being called Nazis has taken it’s toll on me. I should not stoop to that level.
If you strip away the political ideologies, it’s obvious who does and doesn’t champion grossly inflated prices of everything. Elected public servants champion grossly inflated prices irrespective of party, however, the conversation typically degenerates into fruitless nattering as party loyalty merely polarize all of us. Neither one of these parties will champion lower costs of anything as they’re all bought and paid for by the Housing Crime Syndicate(NAR, American Land Title Assoc, MBA, Phoney, Fraudie, NAHB and millions of self-entitled, delusoinal home debtors).
So WTF you gonna do? Call your congressman?
recall your congressman?
And then what?
Pick a new congressman from amongst the list of liars, cheat and schills.
It’s simple, really.
All the major banks will Chernobyl if real estate prices (residential and commercial) collapse.
So will all of the Middle class/J6Ps/Bagholders, if their $300,000 house’s so-called “value” collapses to $50K.
Hit anybody in the bottom 90% with a $250K bill, and their balance sheet goes poof.
So the game is to try to avoid a real estate meltdown/kicking the can, while praying for some kind of “White swan” or magic money fairy to show up.
All of this could be fixed if J6Ps eroded purchasing power from circa 1980 were restored. This would require that people holding cash let go of some of it to pay higher salaries.
As Theodoric of York said: “…………..Naaaaaah!!!……time for some more bloodletting!”
“So will all of the Middle class/J6Ps/Bagholders, if their $300,000 house’s so-called “value” collapses to $50K.”
I see the spec 4br/2ba places dropping to $180k, and the spec 3br/2ba places dropping to $120k, provided the neighborhood’s quality of life holds. I base my estimates on the median household income of the employed.
As mentioned above there is much more pain ahead.
I tend to discount Krugman but that guy Rogoff is a sage. I was still surprised to hear him promote more inflation via the FED. Surly he must know that the FED policy was crucial in wrecking the world economy. But watching his facial expressions I think he’s really thinking “we are doomed!’. Great CNN show.
PS: C-SPAN was great this weekend on the book-tv channel. Check out this guy Ted Fishman, Shock of Gray: The Aging of the World’s Population and How It Pits Young Against Old, Child Against Parent, Worker Against Boss, Company Against Rival, and Nation Against Nation. There is a archive copy at the website. Very sobering.
“Rogoff is a sage. I was still surprised to hear him promote more inflation via the FED….But watching his facial expressions I think he’s really thinking “we are doomed!’. ”
Ah, ignore the sage’s advice, and call for the opposite because you read his facial expression as such. That is one enigmatic sage. Good thing we have people like you to explain what he’s really saying.
OK I’m not clairvoyant but you should have seen him (Rogoff) on C-SPAN last week. That’s why I was tipped off by his expression. This CNN stuff never gets into the details. Listen to the guy for 30 min. and tell me what you think. Did you read his book ‘This time is different’? At heart the guy in simi-Keynesian about stimulus but also clearly thinks there should be more taxes too. If this guy was head of Obama’s econ team we might alter the trajectory of this economy.
umm…i can watch bernanke and know he is lying and terrified…he shakes like a dog shittin’ a peach seed.
‘That was actually negative social product spending, and yet it brought us out.’
You never can really tell if WWII’s broken window was what brought us out, because you cannot rerun history without U.S. entering the war to compare whether we would have done better without it.
‘wouldn’t John Maynard Keynes say that if you could employ people to dig a ditch and then fill it up again, that’s fine’
IMO, you can skip the space aliens project and consider this statement to know what Keynes is all about. See, I lived in a world where this would have been considered balderdash, until I went to college and they were paying guys big salaries to teach us this stuff.
See, I lived in a world where this would have been considered balderdash
——————————-
If our theoretical economy has the unlimited funds where the value of work doesn’t need to be considered, then wouldn’t it just be easier to give the ditch digger some money and stop wasting his time? I see no value gained from adding “protestant work ethic” as a variable.
See, I don’t see why you would even use the academic exageration to make a point. There is always a useful place to dig a ditch. Even if all you do is check to see how much more useful life the water/sewer pipe at the bottom of the ditch has left, you can find a useful place to dig the ditch. Personally, I would like to see more power lines put underground if you need to make up ditch digging work for people since power outages are a pain in the behind. It isn’t that hard to come up with infrastructure projects that are actually useful. Really, it isn’t. They don’t always lend themselves to ribbon cutting ceremonies, but they are there.
My real preference is to make the North American power grid much more robust, but that probably wouldn’t all be ditch digging, so I left it out. Water and sewer infrastructure and burying power lines in places with lots of power outages will do for a start.
Polly you always come up with such sensible ideas….burying power lines in tornado alley should have been done 50years ago.
I believe the end of that conversation lowered my IQ.
The best we can come up with is blather about ‘big dig prices’, structural defintions of economic theory (hint: if your theory says it’s a good idea to dig a hole and then fill it up to create *productive employment*, your theory probably needs some work), and space aliens.
“If we discovered that space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. And then if we discovered, oops, we made a mistake, there aren’t any aliens, we’d be better –’
a good scare like a war to get all the people working together under one all knowing government then we would get things done
and the people would see they really do need us ….
I half expect the public safety workers leaders in Ca to make things unsafe if their pay and pensions get messed with… like letting criminals out early oohhhh now you are all at the mercy of crazed maniacs who will slip in and slit your throats as you sleep and we tried to protect you but you were misled and voted the wrong way..
But, but, but all those federal jobs…
Commercial Real Estate: Wall Street selloff hits region’s REITs
Corporate Office Properties Trust among biggest losers
The Washington, D.C., area’s reputed immunity from recession has not protected its office market from the worldwide economic chill, nor have local real estate companies escaped the ongoing spasms on Wall Street.
Panic selling has hurt the stock prices of the handful of real estate investment trusts in Maryland, but some were in a tailspin even before the wild swings in financial markets began Aug. 4.
Hardest hit was Corporate Office Properties Trust, whose stock price Thursday afternoon was down 35.4 percent from its July 22 high of $38.96. That’s a bigger plunge than the 23.7 percent fall of the S&P 400 MidCap Index — which includes the Columbia company — from its 12-month peak of $1,015.26 April 29 to $775.07 Aug. 8.
Drop in federal job growth curbs demand
Developers that grew spoiled on record federal hiring in recent years will have to adjust to steep drop in agency growth implicit in the debt ceiling deal, according to a report by Delta Associates, a real estate research firm in Alexandria, Va.
“Federal budget austerity measures, no matter how they play out for 2012 and beyond, will impact Federal hiring in the Washington metro area,” the study said.
http://www.gazette.net/article/20110812/NEWS/708129676/1033/1033/commercial-real-estate-wall-street-selloff-hits-region-8217-s-reits&template=gazette
My section had record hiring over the past 5 years. Now we are cutting back by offering a few buyouts for selected jobs, and reassigning people rather than hiring. And our funding wasn’t cut, only flattened. We’re cutting contractors and travel and allowing attrition.
That’s gonna leave a mark. Watch out NoVa! The only thing standing between them and a crash is the SooperDooper Gang o’Twelve. If the Twelve don’t come up with a deal, DoD gets the axe.
As a DOD minion, how would you feel about that?
As I am not a DoD minion, I don’t know.
If I were a DoD minion or especially a contractor, I would have known to pack away the savings — AND make sure my security clearance was up to date — in case the jobs stopped. I did that all through the early 2000’s and that’s how I was able to survive a year of unemployment nearly unscathed.
I think you confusing Oxide with “Bill who pretends to live in Phoenix for tax purposes.”
Bill would probably be better off to pretend to live in Florida for tax purposes.
Since it is his federal taxes that are at issue, admitting that he lives in Florida would keep him from deducting almost all his day to day living expenses (like food) while in Florida, which is what he is doing now.
“My section had record hiring over the past 5 years.”
But now?
“Now we are cutting back by offering a few buyouts for selected jobs, and rassigning people instead of hiring.”
Hmmmm, sounds as if some sort of contraction is at hand.
“And our funding wasn’t cut, only flattened.”
And then again, maybe not.
“We’re cutting contractors and travel and allowing attrition.”
And then another again, maybe so.
“That’s going to leave a mark.”
Yeah, that it will. And this mark will join millions of other marks that are being left.
“Drop in federal job growth curbs demand
“Developers that grew spoiled on record federal hiring in recent years will have to adjust to steep drop in agency growth implicit in the debt ceiling deal…”
Notice it does NOT say “drop in federal employment.”
That will never happen. Buy now in the D.C. area or be priced out forever.
Oh, but they need “growth.” If you had as many people leaving as coming in, then they could theortically move into and out of mostly in the same set of houses, and housing would barely increase.
Growth gives you the hordes of Pretty Young Things, and therefore hordes of competition. That’s what bids up the price of housing to where it’s profitable to build. (especially since those pretty young things gravitate toward ugly housing like condos and stacked townhomes.)
Notice it does NOT say “drop in federal employment.”
That will never happen. Buy now in the D.C. area or be priced out forever.
Why is it that when I think of DC I think of Asimov’s Trantor or George Lucas’ Coruscant (A rip off of Trantor)?
After 6 months of seeing five or six foreclosures a month this weekend saw my local zillow e-alerts flag 10 new foreclosures. They were mostly houses built since 2005 and the wishing prices are about 60% off comparable houses. Could be a one off dump so I’ll watch to see if they unload another batch later this month and watch the prices.
This is in southwest DFW.
Will free trade create or kill U.S. jobs?
By Chris Isidore @CNNMoney August 15, 2011: 5:06 AM ET
“Amid all the squabbling in Washington, there is one policy many Democrats and Republicans agree on — free trade deals with South Korea, Colombia and Panama.
… there is still fierce debate on whether the deals will create U.S. jobs or take them away from American workers…
Create jobs: Advocates of the deals, led by the U.S. Chamber of Commerce, argue that they could create hundreds of thousands of jobs.
Kill jobs: Critics argue the government’s job estimates don’t properly account for the jobs that will be lost by increased competition from imports and factories moving overseas. …
…Robert Scott, international economist for the Economic Policy Institute, estimates that the trade deals taken together will result in a loss of 214,000 jobs. While he believes there will be 478,000 export related jobs created in the United States by the deals, he argues the increased exports to the United States from the countries will cost nearly 700,000 jobs.”
———
Chamber of Commerce represents the executive class. They don’t care where the jobs or factories are; they get their bonuses either way.
I looked up the “Economic Policy Institute” at sourcewatch dot org. It’s basically the union/university-funded version of The Heritage Foundation, so take Scott’s opinion as you will.
We’ve seen this happen too many times before. Americans ship some products overseas, creating jobs. But for how long? Case in point: Yesterday there was a story about Catepillar really wanting this free trade deal. But, shipping backhoes to South Korea’s got to cost some serious scratch. I give it three-four years before Catepillar moves the plant and jobs entirely to shave on shipping and labor. Or some start-up in SK reverse engineers their own backhoe for cheap. That happened hundreds of times too.
So what’s the solution here? We desperately need jobs, even if only for the short term. But we’ll lose those jobs long term. My suggestion: free trade with an expiration date. Sell the products for 2-3 years; after that, slap on a tarriff.
Or some start-up in SK reverse engineers their own backhoe for cheap ??
All the while we protect their backside with a military base there…
Hmmm… might be an incentive for them to agree to tarriffs.
If only NK didn’t have a nuke.
The issue is debt, not trade.
Without debt, we can only get the money to import by exporting and creating jobs. All this debt has merely allowed business to sell to people without paying them.
Somebody has to run the cash register at Sam’s club and somebody else has to pack boxes in fulfilment centers for (insert clever name here).com
For $500 a week no benefits…
And that’s if they’re lucky. Most likely a P/T gig they have to juggle with their other 2 P/T jobs.
Some stores have self-check out.
IAT
OK guys 1st house on my street just put out the for sale sign this weekend
It says 1 family but almost everyone made the ground floor “basement” into a separate apartment, but still even with that income how do you pay for this? I live down the street in a real 2 family house. My LL paid it off 25 years ago..
http://www.trulia.com/property/3057290732-Single-Family-Home-Sunnyside-NY-11104
No taxes listed on that $550,000 beauty!
What’s with the mafia cars out front? How much is rent on your street?
And the trunk on the black mafia car is open. Maybe they gave the poor FB an offer that he shouldn’t have refused.
The funny thing about living in flyover country, especially the parts that are further out west, is that there really isn’t a Mafia presense here, at least not of the Soprano’s style of Mafia. We do have gangs. What we don’t have is the guy at the office who you can place bets with, or nice businessmen selling protection.
dj ain’t talking- ’snitches get stitches’
I’m still curious about the rent, though.
Not my place to rip someone Else’s hood but if this place lists appearance as ” Very Good” it ain’t saying much…
http://www.redfin.com/NY/Long-Island-City/Undisclosed-address-11104/home/20959186
Lots of houses were built like this in the 40’s 50’s nobody really had to have 2 cars around here…buses on the corner, subway walking distance, and yes there used to be trollies my LL tells me before they expanded the LIE for the 1964 worlds fair!…….nice front some green then a communal driveway in back…yes some of those “garages” have been converted to rental apartments….
Check out the NJ seller’s profession!
Warren Buffet said …
“Stop coddling the Super Rich .”
But if they get scared, or in any way perturbed, then they stop creating jobs! We have to keep them in a constant state of euphoria, or we’re doomed.
Besides, we’re all just jealous, so pointing out that they’re paying the lowest tax rates in modern history at a time of extreme budgetary constriction is just sour grapes- and therefore the facts don’t count.
ok mr. buffet:
capital gains tax on gains of less than 50k: zero percent.
capital gains tax on gains over 50k: 39.6 percent.
dividends tax on dividends of less than 50k: zero percent.
dividends tax on dividends over 50k: 39.6 percent.
increase corp tax rate to 39.6%.
disallow NOL carrybacks…only carryforward.
highest marginal rate for those making from $ 1 million to $ 5 million…39.6%.
repeal AMT and replace with “buffets minimum tax”…any one with AGI over $ 5 million pays “buffets minimum tax” at AGI times 45%…no preferences or adjustments to AGI.
interest income is fully taxed for anyone with AGI over $ 1 million. no exemptions for muni interest.
Michael………
If we had NO corporate income tax there would be NO NOL carry forward or carry backs….it would put real pressure on paying the corp execs correctly.
Way to cherry pick, michael, but you accidentally missed the sweetest ones:
Current long-term capital gains top tax rate 15%.
Current top income tax rate 35%.
So, you see, the super-rich pay much, much lower tax rates than the upper middle class. That’s called coddling the rich- or perhaps you have a better term?
i addressed both your points.
i am for taxing the hell out of the super rich…just to shut buffet’s mouth…and watch him move overseas afterward.
he would shelter his income so fast it would make your head spin…it’s for the shareholders you see.
and watch him move overseas afterward.
Eyes reckon yous don’t really understand the bonding that occurs between 80 year old boys & their $34 Billion dollar American train layout set$.
“i am for taxing the hell out of the super rich”
Then we agree, my friend.
I am all for preventing the superrich from becoming that way in the first place.
I’m going for going back and taking the money the rich ripped off for 15 years .How about a back tax based on
benefiting from a fake debt scheme and low taxes that
messed up the delicate balance of this economy .
“interest income is fully taxed for anyone with AGI over $ 1 million. no exemptions for muni interest.”
That would single handily eviscerate the muni market. Which might be a good thing (do we really want government borrowing like crazy).
Buffett said higher taxes for the rich will not discourage investment.
“I have worked with investors for 60 years and I have yet to see anyone - not even when capital gains rates were 39.9 percent in 1976-77 - shy away from a sensible investment because of the tax rate on the potential gain,” he said
“People invest to make money, and potential taxes have never scared them off.”
So, eyes reckon Mr. Buffett & Joe-the-Plumber have never meet for lunch.
Joe-the-Plumber was almost certainly mixing up gross revenue and taxable income. I assure you that Mr. Buffet does not have that problem.
Joe The Plumber
His name isn’t Joe and he’s not a plumber. Not remotely close to a plumber. And his “mix up” of taxable vs. revenue was intentional.
Bernanke’s trillions of near-free printing press liquidity for the Wall Street primary dealers may be a boon for them, but savers and retirees worldwide are suffering from the resultant wave of inflation.
http://www.telegraph.co.uk/finance/personalfinance/pensions/8701868/More-pensioners-forced-to-borrow-from-their-families.html
If this were true inflation, then savers and retirees could get 8% on a CD. This is not inflation.
If this were true deflation, then gas and pasta would be cheaper.
This is simply globalization.
“This is not inflation.”
Well, I see you are making progress.
I’ve been saying that this is not inflation, for months.
Nor is this your vaunted deflation, at least not classic. You still haven’t fit globalization into your poof-money system of equations. Nor have you countered the reduced-standard-of-living arguement that I have made.
“Nor is this your vaunted deflation, at least not classic.”
Oh, so are you saying this IS deflation of some sort? Just not the “classic” sort?
My, we are indeed making progress.
Perhaps this non-classic deflation that you are hinting that just might exist is brought about by declining incomes? As in people not having enough money needed to meet their financial needs?
People without money are people who cannot meet their financial needs, yes? An economy that is filled with people who do not have the money to meet their financial needs is a deflating economy, yes?
If your answers is anything other than a “yes” then I would really be interested in your reasoning.
“Nor have you countered the reduced-standard-of-living argument I have been making.”
I am not going to counter an argument that I am in total agreement with.
Living standards are being reduced because this Great Contraction we are enduring is reducing them, and one of the methods this Great Contraction is using to reduce living standards is the reduction of the the flow of money.
The reduction of the money flow is deflationary, as in contracting, as in reduced incomes, as in reduced spending, as in reduced tax revenue.
Money that used to easily and readily flow to places does not flow so easily and so readily anymore - in some places it doesn’t flow at all. Those on the wrong end of this reduced money flow are hosed - and there are a LOT of people who are now suddenly finding out that they are on the wrong end.
“An economy that is filled with people who do not have the money to meet their financial needs is a deflating economy, yes?”
My understanding is that in a deflationary economy, existing money is worth more. So somebody with a job with a constant income can buy more. But what we are seeing is a guy with a constant income can buy LESS. So it’s not my type of deflation.
You and I measure standard of living in different ways. High standard of living to me is not cash flow. To me, high cash flow is not much different from living paycheck-to-paycheck.
To me, high standard of living is discretionary income leftover, which I can use to buy a hot car, or save for an Oil City lifestyle, or to blow on beanie babies. The point is that I’m NOT using it to buy pasta or gasoline or health insurance or college.
At the moment, the price of pasta is going up and income is steady (if you keep your job). This means a lower standard of living. It’s only a small percentage, but for some unfortunate families, it’s a very large percentage. Like, food vs. rent.
I don’t think we have inflation, or deflation, or stagflation. I think we have all three at the same time but separately. The rich are in deflation, the poor are in inflation and the economists are waffling.
What I think we have is the reversal of the expansion, which is a contraction.
The expansion made some things cheap because of such forces as economy of scale (The cost of transistors comes to mind. Anymore the cost of a single transistor approaches zero.) It made others things expensive (i.e. housing). And some things sprung into existence where before they never would have been thought of (pirate stores).
This expansion of yesterday was not earned, it was borrowed. The borrowing was done from some future time known then as “Tomorrow”. Then time passed and this Tomorrow of those borrowing days became Today.
And so here we sit, at Today, the place in time where all of yesterday’s borrowing was borrowed from.
Too much borrowing was done in those days, too many promises were made and not all of them can be kept. Which means a lot of people will get hosed when they look for their promised money to be delivered and it isn’t.
So, in general, there it is, as I understand it.
“The thing is, stimulus is the cheapest way out. Any idea what letting-it-all-crash does to tax revenue?”
But if you let it all crash first, then do the stimulus spending, you get a lot more social equality. That’s why when the Tea Party was blackmailing a default, I thought Obama should just let it happen.
The difference between the Tea Party and other Republicans is that the Tea Party thinks it can shoot the hostage and still get the ransom.
is that the Tea Party thinks it can shoot the hostage and still get the ransom. …and like Evangelical Blues Brothers Jake & Elwood, be on a mission from God!
“the Tea Party thinks it can shoot the hostage and still get the ransom.”
Isn’t thinking we can let-it-crash and the results will be more egalitarian similar wishful thinking?
The rich are well-hedged, have their wealth spread around the world, and can afford to hire private militias. The middle and lower classes, not so much.
http://www.telegraph.co.uk/news/politics/david-cameron/8701853/England-riots-David-Cameron-declares-war-on-gangs.html
UK government (a clone of the Republicrats, in that it is by, for, and of City of London financial interests, and the globalists) vows to “turn around” troubled families responsible for spawning gang-bangers and urban thug culture. Never mind that government policies have actively aided and abetted the perpetuation of such moral and social rot for decades now.
Never mind that government policies have actively aided and abetted the perpetuation of such moral and social rot for decades now ??
Heard a comment over the weekend…
“There are generations of people here that have been marinated in government cheese…They know nothing else…So now, the government that is big enough to give all these freebies is also big enough to take them away…Problem is, the recipients don’t want to give them back”…
You could take away government cheese if people had alternatives, like jobs. When the only alternative offerred is hunger and homelessness, then you have people that are very upset.
The wealthy should be worried. Hunger and homelessness incubate disease as well as civil unrest.
BINGO
The riots and arson and crime never get factored into the debt debate do they.
Oh please. The Great Society and War on Poverty threw trillions at “uplifting” the underclass, but all it did was vastly expand the entitlement lifestyle and mentality. Why work when Uncle Sam pays you to sit on your a$$ and make babies?
I was not opining about the rightness or wrongness of welfare. Simply observing that sudden changes can make people desperate. If you want to throw everone out on the street to fend for themselves, then you had better expect a spot of trouble.
In this country, that spot of trouble will probably include guns. For those too weak to be disruptive, disease may be their weapon of choice.
What do you propose to do about the problems that will be created by the removal of social safety nets? Internment camps? Firing squads? Let them eat cake?
Do we need any more evidence that the nanny state developed by the progressives, guilty whites and other fringe nuts has been an abject failure?
That failure would matter to rational thinking people, however we are talking about progressives, guilty whites and other fringe nuts who care nothing about the chaos and destruction they cause, because the ends justify the means. Their answer will be more nanny state, more political correctness, more multiculturalism, and more cancerous rot.
Do we need any more evidence that the culture of greed and outsourcing and maximum profit has been an abject failure for 90% of the population?
But of course your paymasters are in the top 10%. The 90% don’t exist for you.
London House Prices Plunge on Financial Turmoil (Bloomberg)
London home sellers lowered asking prices by the most in a year in August as demand in Britain’s most expensive property market was hit by turmoil in financial markets, Rightmove Plc said.
Asking prices in the capital dropped 3.4 percent from the previous month, when they decreased 1.4 percent, the U.K.’s biggest property website said in an e-mailed report today. Nationally, values fell 2.1 percent, a second consecutive monthly decline and the largest since December.
“Prices often fall back at this time of year, but the renewed turmoil in global financial markets may be starting to hit home with London buyers who have thus far been insulated from the worst of the downturn,” Rightmove said.
While values are being supported by a lack of property supply and record low interest rates, waning consumer confidence and the potential impact on bank lending from an escalation of Europe’s debt crisis may undermine activity further, Rightmove said. U.K. business confidence fell last month and the recovery in the labor market will slow, separate reports published today showed.
National asking prices were down 0.3 percent in August from a year earlier to an average 231,543 pounds ($377,000), Rightmove said. That’s the first annual decline since September 2009. In London, prices were up 3.2 percent to 418,008 pounds.
‘Bumping Along’
U.K. stocks have plunged this month, with the FTSE 100 Index falling 9 percent amid a global selloff sparked by concern that Europe won’t be able to contain its debt crisis. Europe’s Stoxx 600 has fallen 11 percent.
Rightmove said the impact of the financial turmoil across the U.K. is “likely to be limited because prices are already bumping along the bottom.” In London, prices probably won’t continue to fall at the same rate as in August as the market “is seen internationally as a safe haven in times of financial upheaval,” it said.
I wonder what effect riots and social unrest are going to have on London housing prices.
If they burned down enough buildings, it should drive real estate higher.
Who is going to want to pay those astronomical prices for flats in formerly trendy areas where now you live in constant fear of being victimized by yobs and street thugs?
“The simplest and most necessary truths are always the last believed.”
~ John Ruskin
“Home price$ have no relationship to the US National family income.” Daffy Duck
And that simple and most necessary truth is:
Trade imbalances, international or between domestic population classes, can not exist long-term.
Money and debt are equally offsetting counter-products that result from trade imbalances, but if the trade imbalance does not reverse, the people with debt can’t repay, the debt defaults, is wirtten off, and the money that debt created goes away.
People with money must either spend it to reverse the trade imbalance, so that people with debt can pay back their debts, or see the money vanish into the thin-air from which it was borrowed into existance when those with debt default.
“People with money must either spend it to reverse the trade imbalance, so that people with debt can pay back their debts, or see the money vanish into the thin-air from which it was borrowed into existance when those with debt default.”
And there it is, folks, it is as simple as that.
If one can understand this then one can understand that when these debts are not paid back then those who are on the wrong side of these debts are going to be out of some money.
Many are owed but few will get paid what they are owed because the money is not there. The promises are there but the money is not.
Soooo … what is one to do? IMO the only choice an individual is left with is to somehow determine for himself who will get paid and who will not, and somehow manage it so that he joins the get paid group.
And it is left for the individual to do this for himself because the jerks that got us in this mess are the same jerks that are searching for a way to get us out. These are the “No one could have seen this coming” folks who are endlessly “puzzled” and use the word “unexpected” a lot.
It took me a long time to put all the economic fundamentals into a concice and direct statement of our current situation.
However, when you say “money is borrowed into exiatance” and everyone says you are toatally clueless fool…. well, without understanding of that most basic truth, people can not even begin to take the next steps.
“… and everyone says you are a totally clueless fool …”
Yeah, I get that a lot. Which is reassuring to me because it indicates my thinking is on the right track.
When my thinking begins to mimic the thinking of the lemmings then that is the time that I begin to think that maybe it’s time to re-evaluate my thinking.
However, when you say “money is borrowed into exiatance” and everyone says you are toatally clueless fool
I agree with you. Fiat money is borrowed into existence.
“I agree with you. Fiat money is borrowed into existence.”
Oh, then you must agree that if much of this borrowed money is poofed out of existence then what happens as a result is that there is less money left in the economy - less money left in the economy to circulate?
And less money left to circulate has more to do with deflation then inflation, don’t you agree?
Yes I agree that when debt is either paid back or defaulted it goes poof.
“And less money left to circulate has more to do with deflation then inflation, don’t you agree?”
I do.
But there isn’t less money in circulation. M1 and M2 are still growing and the Fed Gov will borrow close to 2 trillion again, keeping the printing presses very busy.
The only reason we aren’t in hyperinflation is because the FedGov borrowing is being partially mitigated by those deflationary forces. If we didn’t have them it would be really ugly.
Then of course there is the issue of the devaluation of our currency courtesy of QEn, which is why gas won’t drop below $3 a gallon even though demand is way down.
“But there isn’t less money in circulation.”
Good to hear. That suggests everyone will get to pay their bills and all of this worrying is for nothing.
With all this money is circulation maybe Joe6Pack will be able to get away with asking for a raise.
Silly Rabbit, I never said it was distributed evenly or fairly.
Or do you simply refuse to accept the Fed Res’ M1 and M2 charts?
Local colleges, universities face budget impacts
Students will experience higher fees, larger classes, fewer choices
As students begin returning to the region’s public colleges and universities over the next few days and weeks, they will notice myriad real effects of California’s budget crisis.
The most tangible element for many likely will be higher costs for them and their families.
“The impact to students will be felt because of the tuition increases,” said Gary Matthews, vice chancellor for resource management and planning at the University of California San Diego.
They’ll also experience larger class sizes and fewer choices.
To partially offset sharp reductions in state funding, tuition and fees have been raised across all three branches of public higher education — the UC system, the California State University system and community colleges.
…
“Students wil experience higher fees, larger classes, fewer choices.”
Inflation is running rampant throughout the educational systems, the price for education is saying so. But, in this case, maybe price is not the best measurement of inflation.
There is a phrase in the artice that says: “reduction in state funding” that may help clarify things a bit.
A reduction in state funding means the buffer of state money is being removed, which means the students wil have to make up the difference. They will make up the difference by paying higher tuition fees. But at the same time they get less for their tuition fees because there is another phrase in the article that says: “They will also experience larger class sizes and fewer choices.”
Wow! Larger class sizes and few choices coupled with higher tuition fees means inflation is going through the roof! Pay more, get back less.
But it is not inflation - more money chasing goods and services - that is behind all this, it is DEFLATION that is behind all of this.
Take a good look (if your mind will let you) and see for yourself.
Like real estate, education went through a “borrowed money is cheap” period of high inflation.
You bring up a valid point: If a subsidy goes away, is that price inflation? From the perspective of the consumer it is as he has to pay more for the product or service. From a textbook case its more of a cost transfer.
“If a subsidy goes away, is that price inflation?”
If the money that went into financing the subsidy goes away is that deflation?
If the money that finances much of our economy goes away is that deflation?
Prices can say one thing but cash flow can say just the opposite. So which should one believe, price or cash flow?
Hint: If wages are falling then cash flow will be slowing. If people who are owed money do not receive the money they are owed then cash flow will be slowing.
Price your product at any price you want, but if the money is not there to meet your price then your product will not be sold.
“Price your product at any price you want, but if the money is not there to meet your price then your product will not be sold.”
Or you will sell fewer of them, but at a profit, as is happening in the auto industry. Demand is off nearly 40% from the peak, but prices are up, as much as 25%.
The automakers took their big bath, downsized capacity and are now making money. Their old model, bribing customers with rebates, has been dialed back while MSRP’s rose, often dramatically.
When Pontiac shut down I bought a new G5 for $12K. I can only imagine how much GM lost on that car (which was the Pontiac twin of the Chevy Cobalt). The replacement for the Cobalt, the Cruze, seems to have an average MSRP in the high teens to low 20’s. Sure its a better car than the Cobalt, but it costs TWICE what I paid for the G5 (which granted was a closeout).
“Demand is off nearly 40% from the peak, but prices are up, as much as 25%.”
Now there is a great example of a financial contradiction: Demand falls so they increase the price.
Something has got to give. I’m guessing what will give is the volume of sales. And if the volume of sales fall far enough - if they fall to the tipping point - then the factory will close altogether.
Closing factories is something one sees in an economic downturn - something one sees in a deflationary environment.
In an inflationary environment one can get away with increasing prices because there is an increasing amount of newly-created money to finance the increasing prices.
But in a deflationary environment increasing prices will cause the business to fail because customers do not have the money to buy the product even at a stable price, let alone an increasing price.
“But in a deflationary environment increasing prices will cause the business to fail”
Not necessarily. Not everyone is hurting, there are people who can afford those nice new $40K+ cars. They will buy them and the automakers will make a profit.
And this is what they should have done years ago. Instead they chased after volume and market share through heavy discounts. And lost their shirts in the process.
12 million new cars a year is the new normal. By adjusting their volume and pricing Ford and GM are suddenly doing OK. Chrysler on the other hand, with its aged designs still has to resort to discounting, and they aren’t doing quite as well.
Higher tuition for you.
Not one cut to insane public union salaries/benefits/pensions. Not even any talk about it.
So who really controls California…?
Wouldn’t California have to go BK to void its contracts? Or can they unilaterally back away from them?
At some point the piper will have to be paid and I suspect that it will be sooner than later as California’s deficit is clearly out of control.
Maybe we should give it back to Mexico?
“At some point the piper will have to be paid …”
Not if there isn’t any money. If there isn’t any money to pay the piper then the piper won’t get paid.
Perhaps the expression I chose wasn’t the best one for the situation. What I meant to say was that California’s day of reckoning is approaching. They won’t be paying the piper with money, but rather with austerity and cutbacks.
“They won’t be paying the piper with money, but rather with austerity and cutbacks.”
There you go again, describing a deflationary scenerio.
But I have little doubt a few posts from now you will be telling us all how the forces of inflation are raging throughout the land.
Budget cuts could hurt San Diego defense contractors
Northrop Grumman’s RQ-4 Global Hawk unmanned aerial vehicle has a 12,000 mile range, and can reach altitudes of 65,000 feet. The drone is largely developed at the company’s San Diego-area facilities.
Northrop Grumman’s RQ-4 Global Hawk unmanned aerial vehicle has a 12,000 mile range, and can reach altitudes of 65,000 feet. The drone is largely developed at the company’s San Diego-area facilities. — Northrop Grumman
The debt ceiling plan approved by Congress will reduce the defense budget by at least $350 billion over the next 10 years. The figure could rise by an additional $500 billion by Thanksgiving as lawmakers move to make additional cuts. Such volatility has led some financial analysts to tell investors not to buy certain defense stocks, or to hold out longer while the situation becomes clearer. This could have a long-term ripple effect in San Diego County, where most of the major public and private defense contractors have sizable operations. Here’s a snapshot of some of the important players.
…
This sure sounds familiar. Its 1992 all over again!
That was a really sucky time in St Louis, where I lived at the time. I wanted to work as a community college math instructor, but there were no jobs, thanks to all the newly-unemployed defense industry engineers, who were snapping them up.
A remake of the movie “Falling Down” on the way???
Unscientific, but entertaining, SD Union-Tribune reader poll:
Is the U.S. headed back toward recession?
Thanks for your vote.
Yes 68% 345 votes
No 31% 157 votes
502 total votes
By contrast, their panel of economists had only 2 out of 8 who predicted the U.S. was headed back towards recession.
It’s the “TruePatrioticWankerBankers™” Trillionaire$…vs… the “TruePeonMicro60hourworkweeknoncountryclubmember™” Billionaire$
“Show-me-the-money!” Rod Tidwell
“Go away peon kid, you’re beginning to bother me…” W.C.Fields
While the 25 largest banks saw their total deposits increase 61% to $5.8 trillion from 2006 to 2010, their approved loans under the Small Business Administration’s 7(a) loan program declined 4% to $3.6 billion.
Biggest banks bail on small-biz loans:
By Jan Norman / OC Register / Published: Aug. 12, 2011
All bank deposits rose 20% to almost $9.5 trillion and all bank-provided SBA loans increased 20% to $17.7 billion.
In the past, banks have complained that it costs them as much to make a small loan to business as a big one, so why should they deal with the regulations and paperwork of the SBA’s loan program. In response, the SBA has created SBA Express loans and preferred lender status to expedite federally guaranteed loans.
In 2007, SBA Express loans accounted for two-thirds of the SBA loans and a fourth of the loans’ dollar volume.
“The SBA program is designed to make it less risky and more lucrative for banks to lend to small businesses,” Kassar said. “If the big banks aren’t leveraging the SBA program, then how are they supporting small businesses?”
Nine of the 25 biggest banks made no SBA loans, according to MultiFunding: Capital One, Bank of New York Mellon, State Street Bank and Trust Co., FIA Card Services, ING Bank, Morgan Stanley Bank, Northern Trust Co., Charles Schwab Bank and Citibank (South Dakota) NA.
To be fair, the reason they aren’t making small business loans, is that there are no loans for them to make.
Homebuilder Confidence in U.S. Unchanged
(Bloomberg)
Confidence among U.S. home-builders was little changed in August, indicating the outlook for housing remains depressed.
The National Association of Home Builders/Wells Fargo index of builder confidence was 15 for a second month, matching the median forecast of 48 economists surveyed by Bloomberg News, data from the Washington-based group showed today. Readings below 50 mean more respondents said conditions were poor.
Sales have failed to rebound at builders like D.R Horton Inc. as unemployment at 9.1 percent and concern about the faltering economy keep away buyers. The industry also is struggling with foreclosures, which boost supply and hurt property prices.
“Builder confidence doesn’t look like it’ll improve much,” Sean Incremona, a senior economist at 4Cast Inc. in New York, said before the report. “Everything seems to be bumping along the bottom. Demand remains very weak.”
Estimates in the Bloomberg survey ranged from 12 to 17. The gauge, which was first published in January 1985, reached a record low of 8 in January 2009 and averaged 54 in the five years before the recession began in December 2007.
Other reports today showed manufacturing in the New York region unexpectedly contracted for a third straight month in August and global demand for U.S. financial assets weakened in June from a month earlier.
Factory Slump
The Federal Reserve Bank of New York’s general economic index fell to minus 7.7 from minus 3.8 in July, a report showed. The median forecast in a Bloomberg survey called for an index of zero, the dividing line between expansion and contraction. The so-called Empire State Index covers New York, northern New Jersey and southern Connecticut.
Net buying of long-term equities, notes and bonds totaled $3.7 billion during the month compared with net buying of $24.2 billion in May, according to statistics issued by the U.S. Treasury Department.
The builders group’s measure of sales expectations for single-family homes in the next six months fell to 19 from 21.
We need to start a drinking game.
Take a shot when an economist says “unexpected” or “unanticipated”.
“The National Association of Home Builders/Wells Fargo index of builder confidence was 15 for a second month, matching the median forecast of 48 economists surveyed by Bloomberg News, data from the Washington-based group showed today.”
But hey, they got one right. And by being pessimistic too.
“Nobody saw this coming. Nobody.”
Take a shot when an economist says “unexpected” or “unanticipated”.
I only have one liver!
Which must be punished relentlessly.
It appears that the DOW is reflecting what savvy infestors have known all along. Buy,buy,buy the DOW is headed to 15,000 in this bull market. Any additional bad or unexpected news will have no bearing on the stock market.
The markets are assuming an indefinite Bernanke Put (endless QE, privatized risk and socialized losses). Also the Obama Administration’s War on Savers is forcing people to speculate in the markets rather than see the value of their savings eroded by inflation at the pathetic interest rates the banks are paying.
I think the DIJA will see 9,000 before it sees 15,000.
“… forcing people to speculate in the markets …”
Enticing people to speculate in the markets is more like it.
There is a time for cash, and, IMHO, now is one of those times.
Yes, but the value of your cash is eroded every day by the Fed’s deranged money-printing. So people aren’t “forced” to speculate (and those who buy at the top are idiots) but they are given a strong incentive to do so to protect their diminishing buying power.
Correction: In my previous comment I meant to say “privatized profits, socialized risks.”
Contrary to what many seem to believe here, price increases for most of the consumer products that make up the CPI has been moderate. However the price to purchase future dividends or bond interest has SHOT up. IMHO high prices for equities represent nothing more than anticipation of future high prices, not future high dividends. The stock market is where we’re seeing the classical too much money seeking to few “goods” inflation.
I will tell my wife the price increases she’s been seeing at the supermarket are “moderate” because the CPI says they are. She’ll feel much better for that bit of information.
LOL! I was in the store on the weekend and I kept doing double takes at the prices. It wasn’t that long ago that when Sirloin was on sale it was $3/lb or less. Now the “sale” price is $4/lb.
Yes, and then there’s the ever-shrinking packages and content for the same price.
Guess it’s only the pension funds still fully invested.
Once Bit, Rich Shy From Risk of Stocks
When stock markets swooned in 2008, Alan Mantell lost about 15% on his investments.
Now, the multimillionaire real-estate investor and business consultant is more insulated from market quakes, after putting more money into cash and private businesses and less into U.S. stocks.
“Today, my first principle of investing is do no harm, don’t make major mistakes,” said Mr. Mantell, president of New York-based Mantell Advisory LLC. “It’s not about chasing returns anymore. For me, it’s about real diversification and not being so dependent on traditional equities.”
After taking big risks and big losses in 2008, wealthy investors have become the Cassandras of the financial world, hunkering down with cash, gold, farmland and other haven investments. Their “fear portfolios” largely protected them from last week’s market gyrations, when the Standard & Poor’s 500-stock index spiked up and down more than four percent a day for four days straight.
http://finance.yahoo.com/banking-budgeting/article/113324/rich-shy-from-stock-risk-wsj?mod=bb-budgeting&sec=topStories&pos=5&asset=&ccode=
Does he realize that cash is debt, and if the debt can’t be reapid, the cash goes away?
http://www.bloomberg.com/news/2011-08-14/rice-poised-to-rise-with-thailand-imposing-curbs-as-u-s-crop-shrinks-20-.html
Food riots in Asia driven by popular anger over soaring rice prices preceeded the 2008 global crash. It looks like history is getting set to repeat itself.
OT… A nephew of mine on the violin, and a house guest from Germany on the piano. They live in Montana.
http://www.youtube.com/watch?v=-cZu-tR4rwc&NR=1
Wunderbar! (looking forward to Ken Burns POV on Prohibition)
filed under: “Cut with the negative ways Kelly!”
Monday, July 25
9:00am: Hop on my bike and ride 7 minutes down the road to the Trader Joe’s.
Food Informants: A Week In The Life Of A Trader Joe’s Employee:
HUFFPOST FOOD / First Posted: 8/11/11
“Jane,” 24, has been working for Trader Joe’s since 2007, though in 2009 she left for over a year to go work for Whole Foods. She did not like it there and returned to TJ’s. At Trader Joe’s, every employee does a range of tasks, but Jane’s speciality is dairy. Below is her explanation of the pros and cons of the job:
12:30pm-2:00pm: Register time. Still not too busy but it’s picking up a bit. I ring up some people and I’m thankful that I’m only on register for an hour and a half instead of two. Nobody really likes working register that much (except for a select few) because it is tiring and repetitive. Where I’m from, the customers tend to be rude. Not everyone of course but the one customer who looks down on you for working at a grocery store can sometimes ruin your day. I’m a very positive person though and there are plenty of other customers who are great to talk to and never rude.
Food Informants is a week-in-the-life series profiling fascinating people in the food world. We hope it will give you a first-hand look at the many different corners of the food industry.
“… the customers tend to be rude.”
I would not be surprised to learn that Jane lives/works in the D.C. area. Way too many self-important people live there.
I would not be surprised to learn that Jane lives/works in the D.C. area. Way too many self-important people live there.
I noticed that when I was bicycling around the United States. Once I crossed the NC-VA border and approached DC, I noticed that the proportion of ahos on the roads really increased.
People weren’t as willing to visit in the stores either. Contrast that to Alabama and Mississippi, where a simple trip to a store was an invitation to sit a spell, tell my life story, exchange addresses, etc.
DC folks are overachievers. If they weren’t, then they would likely not get a contract, lose their jobs, etc. They are all competing with motivated foreigners who don’t speak English. Lots of high-power jobs with lots of travel. Even kids are constantly working or interning or going to soccer or music lessons or studying for the AP PSAT SAT or whatever other godawful testing. There are very few single-income households. Transport is a nightmare. There are too many cars for the road system, which leads to either very long red lights or people running very short red lights. The only time to run errands — which you need to do if you have a jobs that requires dry-cleaning shirts and going to the gym — is on weekends. Metro runs every 20 minutes instead of every 8 so people are constantly running for trains. Any vacation time consists of dragging The Kids somewhere.
None of this jives with setting a spell.
Isn’t there some pretty serious ghetto poverty in the district, along with lots of third world immigrants in the suburbs? There must also be a lot of blue collar Joe SixPacks doing various necessary work. You’ve got to be talking about a small portion of DC folks when you talk about overachievers.
The immigrants and illegal laborers are not shopping at Whole Foods.
The rest of the population may not be overachievers in the classic sense, but they work hard and for long hours. Point being that they don’t have an entire day for shopping.
I wonder why Jane didn’t like Whole Foods. It wouldn’t surprise me if the customers were even more rude there. And yes, probably DC area.
I try really hard not to be rude at the store, but the naggy-wife voice at self-checkout tries my patience,* and I sometimes take it out on the cashier who has to bip his card to clear it.
————–
*”The bagging area is full. Please bag some items, then return to scanning.” So I bag a few items… “If you have finished scanning, please press Finish and Pay…” Argh, how can I finish scanning when you told me to bag my items!!!?!!
Self-checkout annoys me when we have so many unemployed who would gladly be checkers and baggers.
I just yell at the machine - and the employees are amused.
I have learned from embarrassing experience that grocery stores sometimes bring out the worst in me. And the worst of the worst is the self-checkout. I avoid them like the plague.
So, wmbz, are any of your female relatives especially talented on the organ?
Oh, SNAP!
Are the G-7 central bankers coordinating a global short squeeze? The data certainly do suggest it.
15 August 2011 Last updated at 10:29 ET
Markets rise as Merkel and Sarkozy set to meet
Global shares have consolidated gains made on Friday after debt fears in the eurozone and the US caused turmoil on global markets last week.
New York’s Dow Jones index opened up 1.5%, while Paris’s Cac, Frankfurt’s Dax and London’s FTSE 100 all rose 1%.
Asian markets closed higher on better-than-expected Japanese growth figures.
Investors are now looking ahead to a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy on Tuesday.
Markets were buoyed on Friday by US retail sales figures that beat analysts’ expectations, and on Monday by data showing the Japanese economy contracted at an annualised rate of 1.3% between April and June, a much smaller amount than had been expected.
The two sets of figures have “allowed for a collective sigh of relief across the global investment community”, said Jane Foley at Rabobank International.
“A calmer tone has settled over the markets after last week’s turmoil.”
As a result, investments perceived as safe during times of economic uncertainty slipped.
…
…and once again they will rescue the EURO, like every week. The grand plan now is for EURO-Bonds.
A similar construct like MBS securities where you throw defaulted debt (Greece) in with medium (France, Belgium) and higher quality debt (Germany, Netherlands).
The intent is that deadbeats/PIIGS can borrow at lower rates since all countries will be responsible for the collective debt. Of course that will only encourge big spenders since now their spending habits will be someone else’s problem. Low interest rates for PIIGS got us where we are today. Now the solution is more low interest rates for PIIGS.
The very predictable result will be the collective default of the entire EURO-Zone within the next 3-5 years. Then the ECB will be the buyer of last and only resort, similar to the FED.
Hard assets will continue to thrive under those conditions. Those that hold financial assets wil be the bag holders. Many pension funds will generate sub par returns.
“A similar construct like MBS securities where you throw defaulted debt (Greece) in with medium (France, Belgium) and higher quality debt (Germany, Netherlands).”
Is toxic goulash likely to work just as effectively on sovereign debt as it did for MBS?
The Horrors of having an HOA:
http://m.gawker.com/5830257/the-horror-of-homeowners-associations
The two unalterable conditions that I gave my RE agent when I was looking at house back in ‘99 were no HOAs and no shared walls.
Dear Gaed - these HOAs are insane:
Bayonet Point, FL
66-year-old Joseph Prudente had to do some time in the local jail because he couldn’t afford to comply with a court order, obtained by his HOA, that required him to sod his lawn. “It’s a sad situation,” Beacon Woods Civic Association board president Bob Ryan told the St. Petersburg Times about Prudente’s fate. “But in the end, I have to say he brought it upon himself.”
A pensioner with a limited income, Prudente had to stay in jail until the sod job was completed. “He’s in prison for God knows how long because we can’t afford to sod the lawn,” his daughter, Jennifer Lehr, told the Times when her father entered jail. Luckily, some outraged people in his community—including a county commissioner—fixed up Prudente’s yard, thereby lawn-caring him to freedom. [St. Petersburg Times]
“A pensioner with a limited income, Prudente had to stay in jail until the sod job was completed.”
“Hey why don’t you sod your lawn, your place looks like hell.”
“I can’t. I’m in jail.”
“Damn right, and that’s where you belong and that’s where you will stay until you get your lawn sodded.”
So, is it really possible for a person to be sentenced to jail for life if he cannot get his lawn sodded?
(Don’t be ridiculous. He’s not in for life, only until he gets his lawn sodded.)
But, if I understand this correctly, if he can’t get his lawn sodded then he stays in jail. And if he is in jail then he can’t sod his lawn. And if he can’t get anyone else to sod his lawn then his lawn will go unsodded, which means he is stuck in jail for life.
A libertarian is a liberal who has been mugged by a co-op board or homeowner’s association.
WT +1
Leave it to the UK press to broach a topic our corporate-owned MSM wouldn’t touch: how moral decay at the top sets the tone for society as a whole.
http://blogs.telegraph.co.uk/news/peteroborne/100100708/the-moral-decay-of-our-society-is-as-bad-at-the-top-as-the-bottom/
David Cameron, Ed Miliband and the entire British political class came together yesterday to denounce the rioters. They were of course right to say that the actions of these looters, arsonists and muggers were abhorrent and criminal, and that the police should be given more support.
But there was also something very phony and hypocritical about all the shock and outrage expressed in parliament. MPs spoke about the week’s dreadful events as if they were nothing to do with them.
I cannot accept that this is the case. Indeed, I believe that the criminality in our streets cannot be dissociated from the moral disintegration in the highest ranks of modern British society. The last two decades have seen a terrifying decline in standards among the British governing elite. It has become acceptable for our politicians to lie and to cheat. An almost universal culture of selfishness and greed has grown up.
http://www.youtube.com/watch?v=bHyug2PvpB8
Another day, another flash mob, this time in D.C. (imagine that). As usual, police did not respond until after the mob left, and the “follow-up” will be to tell the 7-11 owner to file an insurance claim.
I love the story from the UK where somebody had created an “event” listing on a social media site for a riot and the Greater Manchester Police posted “We’ll be there!” Somehow that little looting spree never happened.
Here in Tucson, the cops who work the gang detail watch the social media sites quite closely.
I can recall seeing a gang video (in a class about local gangs) that the police also saw. The constabulary knew all the stars in the video, and they went out to have a little chat with them.
Stars claimed that they were a musical group.
Cops believed that one like they believed a three-dollar bill.
I’m waiting to see the flash mobs hit Wall Street.
Or the gun department at Cabela’s
http://blogs.aljazeera.net/americas/2011/08/14/panic-amid-us-flash-mob-attacks
The foreign media, as usual, covers stories that our own MSM immediately consigns to the memory hole.
“They’ve treaded upon themselves.” (alpha-sloth™)
heheeeheeeheehaahaaahaaheeehaahaaa… (Hwy50™)
Outrageous pensions slashed by CalPERS:
August 15th, 2011 / by Teri Sforza, OC Register staff writer
Honey, I shrunk the pensions?
Robert Rizzo’s golden years were to be softened by a pension of $650,000 a year. Now, that will be more like $50,000.
His assistant running the city of Bell – Angela Spaccia — will see the $250,000 she expected shrunk down to $43,000.
And former police chief Randy Adams? His $411,300 pension has been cut to $287,066.
Our colleagues at the Los Angeles Times recently reported that the California Public Employees Retirement System “has slashed the benefits of scores of local government officials as part of a review of overly generous public pensions prompted by the Bell scandal.”
CalPERS reviewed more than 2,000 files and discovered more than 300 that needed to be reduced, mostly because employers incorrectly reported employees’ pay, the Times reported.
Among them was a former general manager at Orange County’s own Serrano Water District whose pension was reduced because the $206,668 salary it was based on was too high.
We told you recently that total compensation for the top job at the wee Serrano Water District— which manages the fish-filled Irvine Lake and provides drinking water to all of 6,500 people in Villa Park and slices of Orange – was $258,259 last year, according to figures from the state controller’s office.
Serrano had 17 employees. It covers about 4.7 square miles, “serving primarily large lot single family homes and one shopping center,” the district’s web site says.
By way of comparison, the head of the giant Orange County Sanitation District — which manages the complex machinations of treating and disposing of waste water for more than 2 million people (employees: 672) — had total comp of $297,982.
As the CA tax base shrinks, it’s going to be interesting seeing how the state Democrats maintain the graft and patronage rackets that have assured their monopoly on the state government, especially now that the flood of Democrat-on-Arrival illegal aliens is slowing down.
Orange County is Republican country.
Establishment Republicans are also no slouches when it comes to cronyism and corruption.
Hey, 2 miles away as the crow flie$…
Vernon: City gone wild?:
August 14th, 2011/ by Teri Sforza, OC Register staff writer
As the conversation about whether there are too many little cities in Orange County — and California as a whole — continues, consider this:
The Los Angeles Times reports that the embattled little city of Vernon “has amassed nearly half a billion dollars of debt and suffered major losses over the last six years in an aggressive pursuit of investments through its electric utility.”
Vernon bought a 15-year supply of natural gas at a fixed rate, expecting prices to rise (they’ve fallen, a lot); spent heavily on plans for a massive power station that was abandoned; reimbursed top administrators for traveling first class across the country and to Europe; and raised pay and perks for employees, with one official’s pay skyrocketing to more than $1 million a year, the Times reports.
Legislators in Sacramento are trying to “disincorporate” the city of Vernon, and fold it into Los Angeles County, after a series of scandals.
Bruce Malkenhorst, who lives in Huntington Beach (as Bell’s Robert Rizzo did until recently), retired as Vernon city administrator and is the highest-paid public pensioner in California, getting $42,472 a month — which translates into $509,665 a year.
Malkenhorst is also a felon: He pleaded guilty in May to misappropriating $60,000 in public funds, using the money for political contributions and personal expenses like golf games, massages, a personal trainer and a home security system. (In exchange for his plea, a second felony misappropriation charge was dropped.)
Another former Vernon city administrator is a felon as well: Donal O’Callaghan pleaded guilty to felony conflict-of-interest charges related to hiring his wife as a contractor for the city last month.
But Vernon is spending big to keep its disincorporation foes at bay. Read the Times story here.
Further details:
How the LA Times After a Hundred-Year Love Affair with the City of Vernon Decided It Really Hated the Place All Along:
November 30, 2010 · Posted in Miscellany
By Leslie Evans
Vernon, California, is an odd little town. Five square miles of meat packing plants, warehouses, and industrial enterprises where 50,000 people work during the day while only 91, belonging to just 23 families, live at night. There are only 26 homes within the city’s borders, virtually all occupied by city employees or relatives of the long-serving members of the city council or other city officials.
The Bizarre 2006 Election
The Vernon investigation of 2005 was inflamed by a surreal election fiasco that began in January 2006. Eight strangers — the town is small enough so everyone knows who is a stranger — moved into a five-room industrial building and within a few days three of them filed applications to run for the five-member city council. If elected they would have commanded majority control over a city with a $300 million annual budget. The town’s microscopic voter base meant that any challenge had some potential to unseat the incumbents and take control of a city on which some 1800 industrial companies and commercial operations depend. The unorthodox living arrangements had been secured by Chris Summers, described by the LA Times as “a disbarred attorney who has been convicted of embezzlement and forgery.” The Times added that Summers had a long-time lucrative relationship with Albert Robles, “a convicted felon who as treasurer of South Gate nearly bankrupted that city.” Terrified that this unsavory crew could recruit and register fifty or sixty people to come in and vote to take over the town, the geriatric Vernon leadership grossly overreacted.
Charging that the building had been occupied without the owner’s permission, the city council had city police break the locks and evict the eight squatters. The would-be candidates were met by Albert Robles, who was seen giving one of them $100. They then took up residence in an Alhambra hotel, and showed up to vote on April 11. City Clerk Bruce Malkenhorst, Jr., canceled the eight new voter registrations and locked up the ballot box while the case went to court. Meanwhile the town hired clumsy private detectives to ostentatiously shadow their new opposition.
The case took an ominous turn when the county registrar ruled that canceling the voter registrations was illegal and that even homeless people had a right to register to vote. With that ruling the future of Vernon was placed in doubt, as any well-funded speculator could probably find seventy homeless people they could pay to bus into Vernon to outvote the 60 registered residents.
CalPERS reviewed more than 2,000 files and discovered more than 300 that needed to be reduced, mostly because employers incorrectly reported employees’ pay, the Times reported.
Fraud?
Foreign investors sell record Treasurys in June
WASHINGTON (MarketWatch) - Private foreign investors sold a record amount of Treasurys in June, according to the latest report on foreign capital holdings released Monday by the Treasury Department. Foreign investors sold $18.3 billion in Treasurys in June. The previous record was net sales of $16.5 billion in June 2000. Official demand for Treasurys increased in June. China increased its holdings of Treasurys in June. The declines were concentrated in Luxembourg and the Cayman Islands, suggesting private funds were doing the selling. Overall, foreign investors bought a net $3.7 billion of long-term U.S. assets in June, down sharply from $24.2 billion in May.
and yet interest rates did what.
China has been using puppet hedge funds to purchase treasurys.
Meriden Lowe’s closes permanently
MERIDEN, CT. - The Lowe’s Home Improvement store, located at 1201 E. Main St., has closed permanently.
The closing happened overnight, as the store had been opened during normal business hours Sunday.
“(Meriden) Lowe’s missed our estimates from the beginning,” said spokesperson Katie Cody. “There was no scenario that led to profitability.”
It is one of seven stores around the country and the only one in Connecticut to close, said Trudy Magnolia, an assistant in the city’s economic development office.
“It shouldn’t be a surprise,” Magnolia said. “Rumor has it that Lowe’s was under performing. It’s just so unfortunate when it effects Meriden.”
Calls to the store were met with automated voice messages confirming the closing and for questions regarding orders or services, to contact the store in Wallingford.
The stores 94 employees were notified Sunday that the store would be closing. Magnolia said she was told from a Lowe’s representative they would receive pay and benefits for the next 60 days.
For several years, I’ve been of the mind that this country has way too many home improvement stores.
I mean, come on. How many times do people redo the kitchen? Or the bathroom? You do it once and you’re good to go for at least a decade or more.
For most tasks a good old fashioned ACE or TrueValue hardware store is all you need. Locally owned and run.
Mortgage Settlement Collapsing?
http://market-ticker.org/akcs-www?blog=Market-Ticker
We know that the banks have been furiously lobbying in Washington DC to cast off the liability for their former actions. The problem? These are state law issues and Washington DC has no jurisdiction - even though it would like to so it can accept their bribes, er, “campaign contributions” to make it all go away.
The idea that you could get 50 state AGs from all political stripes to sit down and agree to a settlement is so farcical on the face of it that I have to believe that the whole exercise was another example of “extend and pretend.” Sort of “If we can put off the suits for another year, maybe the RE market will ‘recover.’ If not, we’ll still get another round of bonuses before everything blows up.”
True, but Republicrat AGs at the state level are no less susceptible to bribes and blandishments by Wall Street lobbyists and PACs than their counterparts at the national level. However, if even a few take the duties of their office seriously, it will be enough to derail any blanket deal that lets the banksters off the hook for their fraudulent mortgages, MBS bundling and foreclosures.
However, if even a few take the duties of their office seriously, it will be enough to derail any blanket deal that lets the banksters off the hook for their fraudulent mortgages, MBS bundling and foreclosures.
I remember when Arlen Specter (then a Republican) was Philadelphia’s district attorney. To put it mildly, Snarlin’ Arlen didn’t put up with any guff.
Ditto for Rudy Giuliani when he was a U.S. Attorney. You didn’t want to mess with him either.
Hong Kong Apartment Sellers Cut Asking Prices as 70% Property Surge Ends. (Bloomberg)
Derek Ma and his family in May sold two of their eight properties in Hong Kong, doubling their money in four years. They’re struggling to sell the other six.
“We have been trying to offload more, but many sellers are now cutting prices,” said Ma, 36, whose portfolio includes units mainly in the upscale Mid-levels and Island South districts. “There’s definitely a softening in prices.”
Hong Kong home values, which surged 70 percent in the past two-and-a-half years and outperformed stocks, are set for their biggest decline since Lehman Brothers Holdings Inc. collapsed in September 2008 as land supply increases and global growth slows. Midland Holdings Ltd. (1200) and Centaline Property Agency Ltd., the Chinese city’s two biggest real estate agents, said home prices are being reduced by as much as 10 percent.
“We should see at least a 5 percent further correction in the second half if the crisis in the U.S. and Europe deepens,” said Sylvia Wong, a Hong Kong-based analyst at UOB Kay Hian Ltd. “If there’s enough panic in the market, we expect to see more price cuts.”
Hong Kong’s benchmark Hang Seng Index (HSI) has dropped more than 20 percent from a November high after Standard & Poor’s downgraded the U.S.’s sovereign-debt rating for the first time Aug. 5. The Hang Seng Property Index, a measure of Hong Kong’s seven-biggest developers, is down 24 percent in the same period. The index rose 2.1 percent at the local time close of trading.
Falling Transactions
Home transactions fell to a 30-month low in July, while a land auction last week missed surveyors’ forecasts. The HK$5.5 billion ($704 million) paid by a group including Sino Land Co. and Kerry Properties Ltd. (683) was 33 percent below the median HK$8.25 billion and was the first and only bid.
“The government land sale policy has changed,” said Andrew Lawrence, a Hong Kong-based analyst at Barclays Capital Plc who is predicting prices to fall as much as 30 percent by 2013. The result of the auction “implies a significant policy shift from maximizing tax revenue to a commitment to increasing housing supply.”
The people with money have to spend it or people with debt won’t be able to pay it back.
“The people with money have to spend it or the people with debt won’t be able to pay it back.”
Yep.
If the people with money do not spend their money then the economy will experience REDUCED MONEY FLOW. And it is money flow that produces economic activity, and economic activity produces money flow. The first produces the second, and the second produces the first - and back and forth they go.
If there is too much money flowing then prices IN GENERAL are chased up higher and higher. If there is not enough money flowing then prices IN GENERAL decline.
To fix the too much money flowing problem the Fed can act to make money more expensive - meaning the Fed can fix it so that interest rates rise.
Which suggests that to fix the not enough money flowing problem the Fed can act to make money cheaper - the Fed can fix it so that interest rates fall.
Which is what the Fed did - but this did not fix the problem. The Fed dropped interest rates to near zero and still money is not flowing as it should.
So it is. And those with money see this and say to themselves: “Why should I buy now when it looks as if prices are going to decline?”
“If I do not spend my money then jobs that depend on this spending will become scarce and Joe6spack will remain unemployed/underemployed and will have to sell what he owns in order to raise money to meet his living expenses. And what does Joe own? Well, not much anymore but there are still a few Joes out there that have Roths and 401Ks, so I’ll wait until he unloads them and then I will sweep down and buy them up for pennies on the dollar.”
“But until this day comes I will sit on my cash. And patiently wait.”
A few weeks ago i saw a YouTube of a family of four in a ~400 sq ft apartment struggling to pay rent in a slum-tower in Hong Kong. I hope the fall in prices depresses rent rates.
Oh my, might it work on WallSt.influenceza?
“In theory, it should work against all viruses,” Rider says in a statement posted on MIT’s Web site.
Researchers at the Massachusetts Institute of Technology, or MIT, have developed what could be a groundbreaking drug that seems effective at curing nearly any viral infection to include the common cold, influenza and other such illnesses.
MIT Researchers Discover New Drug That May Cure Nearly All Viral Infection:
By IBTimes Staff Reporter | August 15, 2011
Karla Kirkegaard, professor of microbiology and immunology at Stanford University, says combining those two elements is a “great idea” and a very novel approach.
“Viruses are pretty good at developing resistance to things we try against them, but in this case, it’s hard to think of a simple pathway to drug resistance,” she says in a statement.
A paper on the drug can be read in the journal PLoS One.
According to a press release on DRACO, Rider had the idea to try and develop a broad-spectrum antiviral therapy some 11 years ago. This was after inventing CANARY (Cellular Analysis and Notification of Antigen Risks and Yields), a biosensor that can rapidly identify pathogens.
He drew inspiration for DRACO from living cells’ own defense systems. Researchers tested the drug against 15 viruses and found it was effective against all of them to include rhinoviruses that cause the common cold, H1N1 influenza, a stomach virus, a polio virus, dengue fever and several other types of hemorrhagic fever.
The human cells, as part of their natural defenses against viral infection, have proteins that latch onto dsRNA, which then sets off a cascade of reactions that prevents the virus from replicating itself. But many viruses can outsmart that system by blocking one of the steps further down that cascade.
So Rider had the idea to combine a dsRNA-binding protein with another protein that induces cells to undergo apoptosis (programmed cell suicide) — launched, for example, when a cell determines it’s en route to becoming cancerous. And so, when one end of the DRACO joins to dsRNA, it signals the other end of the DRACO to initiate cell suicide, the press release states.
And so who funded this 11 years of research?
Let me guess … it wasn’t a “we have to meet next quarter’s numbers” corporation.
I’m trying to be positive in thinking this might be a break through . In fact if this could work it could be applied to
even more serious diseases .
anecdote illustrating excessive red tape:
i am working on a tax return for a foreign jurisdiction that has no tax liability. it requires:
signature of president
signature of treasurer
signature of preparer
seal of preparer
certified copy of audited financials
audited financials must have foreign jurisdiction’s seal of approval
signatures must be notarized
if notary is foreign then i need a certificate of authenticity
20 years experience and never have i seen anything like it.
$ounds like there might be job openings in the Quality Assurance Dept.
i would like to send them a stool sample as well.
“i am working on a tax return for a foreign jurisdiction that has no tax liability. ”
Yeah, tax evasion is hard.
“Yeah, tax evasion is hard.”
i wish it was that interesting.
I’m sure some Madoff employees have the experience needed.
rms –
Just looked at your response from last week. Thanks for the info.
It’s the DR for a financial corporation. I usually put the data files, the log files, the tempdb, the OS and backups each on separate physical disks. Full backups every week with differential nightly and t-log backups hourly. I restore them onto the current DR machine on a regular basis to be sure that I can restore them, so I think that I am cool there. It’s just the hardware and partitioning where I’m a greenhorn. I will definitely take your advice. I’m reading Chapter 2: The Storage Subsystem in Berry’s book that I mentioned last week
Turns out that I was just offered the ability to work from home during the transition as a contractor. Looks as though my baselining project has actually made a difference…
MrBubble
MrBubble, also think in terms of the complete solution, i.e., disaster recovery from earth quakes, fires, riots, espionage, disgruntled employees, etc., a robust solution. This is where the money is for contractors.
Examples:
- comprehensive standard operating procedures
- off-site storage of back-up drives
- full inventory of hardware with Visio diagrams
- full inventory of network scheme with Visio diagrams
- full inventory of software licensing; lawsuits?
- employee signed rules of behavior, exit procedures, etc.
- hardware life-cycle rotation with cost estimates
- etc…
Well…you get the idea. Most shops are totally unprepared for a disaster that strikes their information systems, and then they realize just how dependent they are on those systems when they are not available. The smart contractor can step into a sml/med business, identify their weaknesses, and provide a cost effective workable solution.
Drought Crimps Farmland Values, Spending
(Bloomberg)
A drought that devastated crops in the southern Great Plains during the second quarter slowed the growth of land values, eroded agricultural income and led to fewer purchases of farm equipment, the Federal Reserve said.
While the pace of gains in cropland slowed from the first quarter, properties in a seven-state region that includes Nebraska and Oklahoma were 20 percent more expensive than a year earlier, the Federal Reserve Bank of Kansas City said today in a report on its website. Ranchland was up 11 percent from a year earlier, and farm-credit conditions remained positive even as farmers cut back spending, the bank said.
An historic 10-month drought centered in Texas that’s spread through Oklahoma, New Mexico and Kansas has now moved north, according to the Aug. 9 U.S. Drought Monitor. The dryness has left a “bifurcation” in a domestic farm economy that the U.S. Department of Agriculture expects will earn a record $94.7 billion in profit this year, according to Jason Henderson, a Fed economist.
The drought “has really affected farm incomes in Kansas and Oklahoma,” Henderson said in a telephone interview from Omaha, Nebraska. “Northern areas that have received rain have strong income prospects, while in the Southern Plains, where there has been devastation, they’re looking at crop insurance as their main form of income.”
The bank’s region includes all or parts of Kansas, Colorado, Nebraska, Oklahoma, Wyoming, northern New Mexico and western Missouri.
Farmland values have surged in the U.S. during a crop boom in the past year that sent the price of corn, the nation’s biggest crop, up 68 percent in the past year on the Chicago Board of Trade. Soybeans, the second-largest, are up 29 percent.
Keynes would suggest we build a giant windmill farm to pump and desalinate water for these regions.
Next Stop, Dow 8,200: Futures Trader
By Matt Nesto | Breakout
If he hadn’t been so right when we last spoke with him in June, I might have been able to dismiss Jay Feuerstein’s latest projections with a, “yeah, right, whatever.” But he wasn’t just right on the Dow back then; he nailed it on oil too, correctly predicting both were headed sharply lower in an interview June 15, 2011, specifically, to 10,000 and $60 respectively, from 12,000 and $95 at the time.
And so, two months later, has this prescient bear changed his tune?
Not one bit.
“I am definitely still short stocks,” says Feuerstein, the CEO and CIO of 2100 Xenon, a Chicago-based managed futures firm. “I don’t think anything has changed. I think the Dow could go down to 8,200, 8,300.”
While forecasting a further 25% decline in a market that’s already just instantly shed 15% is certainly bold, his rationale is not.
Lack of liquidity. Global uncertainty. Budget cuts. Lack of stimulus. High chance of recession. But add it all together and Feuerstein says, “I just feel overall demand shifts downward and stocks will reflect it.”
And he says commodities will reflect it, too, especially oil.
“Yeah, I’m still sticking with $60,” Feuerstein says when asked about his price target for crude, a bearish bet that started when oil was as $115 and is now about $30 or 25% in the money.
“It’s not going to be a smooth ride but I just don’t see the global demand, he says. “You’ve got so many pressures around the world and stocks are starting to feel that, oil is starting to feel that, commodities in general are starting to feel it.”
Two things that aren’t feeling the pressure from a global slowdown are Treasuries and gold, both of which stay on the long side of the Xenon 2100 portfolio. While Feuerstein chuckles at the irony of a Treasury rally fueled by panic from a Treasury downgrade, he’s taking Ben Bernanke at his word (e.g. no rate hikes until 2013) and pairing it with an expectation for continued strong demand for liquidity that only U.S. Treasuries can offer. “I can’t see how rates can go very much higher anytime soon,” he says, adding that “the fact is, there really is no where else to park money.”
As for you gold bugs out there, how does “at least $2500 an ounce” sound?
He thinks the weaker dollar trend will be the key driver for gold and says any time the safe haven trades wanes will be “a great time to buy.”
Clearly these are historic and dramatic times for investors and whether you agree with Feuerstein’s calls or not, his advice against complacency is directionally agnostic.
“This roller coaster week is what we’re going to see for a while,” he predicts. “You can’t just sit here and let this happen to you.”
“Next Stop, Dow 8,200″
I just don’t get this logic. Take today, for instance: All the headline U.S. stock market indexes went up, along with gold and oil, for no special reason. So it looks like a coordinated G-7 central bank liquidity injection operation is underway. How does that square with DJIA = 8,200 any time soon?
Eventually the EU is going to have to face that several of its members face a solvency issue, not a liquidity issue.
Large central bank liquidity injections dilute the direness of the solvency problem.
When the global financial system is a house of cards built on ficticious values and fantasy mark-to-mark accounting, and the moral decay of the West has reached catastrophic levels, with the near-universal rejection of quaint values like honoring contracts, accepting personal responsibility, and enforcing equal justice under the law, then it is no stretch to see the DOW going to 8200 or below.
Sounds plausible; but it is worth bearing in mind that central banks have a tendency these days to define their role as the fireman whenever global markets experience a conflagration of panic. The liquidity fire hose used to douse the conflagration has a way of making share prices go up when fundamentals dictate otherwise.
From Zero Hedge: “In today’s most underreported news of the day, which could potentially have the biggest impact on the future of America, none other than America’s CEOs, or at least one of them: Starbucks’ Howard Schultz, has mass blasted an email to fellow CEOs asking for a consensual boycott on donating to political campaigns in order to encourage the nation’s muppets, elsewhere idiotically called “leaders”, to solve America’s budget and debt impasse. Bloomberg quotes from the CEO’s e-mail to business leaders:”I am asking that all of us forego political contributions until the Congress and the President return to Washington and deliver a fiscally disciplined long-term debt and deficit plan to the American people.” Cue panic, terror, homicidal and suicidal screeching, and overall sheer existential angst in D.C., whose critters suddenly face the nightmare scenario of having no corporate bribes, period, until they get to do their job.”
And then those mean ole Congresscritters will start boycotting that lines-out-the-door Starbucks on Pennsylvania Avenue. Not to mention all the other ‘Bucks in DC.
That’ll learn ya, Schultz!
Obama has solution to debt problem.
He explained it the first day of his bus tour.
“The fact of the matter is that solving our debt and deficit problems simply requires all of us to share in a little bit of sacrifice, all of us to be willing to do a little bit more to get this country back on track and that’s not too much to ask.” ~Barack Obama, U.S. President. 8-15-11
“…and i am going to start by firing turbo tax timmy…and cut funding to freddie and fannie mae. by allowing housing prices to adjust to their norms…housing will cost less…rent will be less…putting more money into your pocket and the economy.”
crap…i woke up.
With precise well thought out specific advice such as that we cannot fail.
My advice for world peace:
If all countries would learn to get along with each other then there would be no wars.
If most countries would wipe each other out, there would be fewer countries to fight -
” that’s not too much to ask”
This is embarassing…
At a local McDonalds on Sunday ( I buy their coffee ) I overheard 3 older guys who looked about 60 and all dressed up in Biker gear talking. The Loud guy says” I’m the only one on my street who works, the rest are retired police and firemen”
I almost asked them how they liked that but wife pulled me away from the weekend warrors.
this is 93021 but I think this guy lived in Simi I over heard texas which I think meant the “Texas tract” a area of simi valley.
Biker hangout in my nabe (a Harley dealership) moved out of this area two or three years ago.
The place is now a vacant lot. I’ve been raiding the place for pieces of busted-up concrete that can be used to line the edges of my sunken garden basins. It’s offered up quite the selection.
Hauled the best-looking pieces over here with my bike trailer, then piled ‘em next to my garden. Finished the second basin on Friday. Looks pretty nice, if I may say so myself.
Looking forward to planting the fall-winter garden in a few weeks.
Sounds like an usually high concentration of cops and firefighters on his street.
Evergreen Solar files for bankruptcy, plans asset sale
By Herald Staff August 15, 2011 -
Evergreen Solar Inc., the Marlboro clean-energy company that received millions in state subsidies to build an ill-fated Bay State factory, has filed for bankruptcy.
Evergreen, which closed its taxpayer-supported Devens factory in March and cut 800 jobs, has been trying to rework its debt for months. The company announced today it is seeking a reorganization in U.S. Bankruptcy Court in Delaware and also reached a deal with certain note holders to restructure its debt and sell off certain assets.
The company also said it will lay off another 65 jobs in the United States and Europe, mostly through the shutdown of its Midland, Mich., manufacturing facility. That would leave Evergreen with about 68 workers according to a headcount listed in the bankruptcy filing.
“Chapter 11 will provide Evergreen Solar with the ability to maximize returns for our stakeholders through the proposed sale process,” Evergreen CEO Michael El-Hillow said in a statement. “Importantly, we expect to continue our technology development without interruption during Chapter 11 and the sale process.”
Evergreen secured a $58 million financial aid package from the Patrick administration to help build the $450 million Devens factory. The state has been trying to recoup about $4 million in cash from the company, the once-promising poster child of the governor’s clean-energy economic agenda.
The list of top creditors in today’s bankruptcy filing lists a $1.5 million debt to MassDevelopment.
When will they learn that corporate welfare is a bad idea?
“Evergreen secured a $58 million financial aid package from the Patrick administration to help build the $450 million Devens factory.”
This suggests the company could not have have survived on its own without the subsidy, which means it probably would not have been built in the first place if the subsidy was not made available.
The subsidy made the numbers sort of work. Take away the subsidy and the numbers no longer work.
Note: There is a multiplier effect at work here in that subsidies multiply the numbers of business that sprung into being. Unfortunately, this multiplier effect also works in reverse.
The subsidies were made in flush times - times when money was easy to get. But now that money is no longer easy to get the subsidies - and the businesses that depended on these subsidies - are going poof. And businesses that go poof take jobs with them.
The Great Contraction rolls on.
Well after they promise not to charge them any taxes what else can they do to get those jobs, give them money, sell their first born what’s it going to take to win this race to the bottom.
“what’s it going to take to win this race to the bottom.”
Win? What’s this “win” word you speak of? I don’t know if the word “win” belongs anywhere in these discussions.
The word “survive” has a better fit, as in: “What’s it going to take to survive this race to the bottom?”
IMO it will take knowledge and understanding. And this is sort of why I am here.
It will also take sarcasm.
The tip of the iceberg when it comes to green energy and carbon trading scams.
Obama to automakers: ‘You can’t just make money on SUVs and trucks’
By Andrew Restuccia - The Hill
The country’s automakers should ditch their focus on SUVs and trucks in favor of smaller, more fuel-efficient vehicles, President Obama said Monday.
“You can’t just make money on SUVs and trucks,” Obama said during a town hall forum in Cannon Falls, Minn. “There is a place for SUVs and trucks, but as gas prices keep on going up, you have got to understand the market. People are going to try to save money.”
Obama has positioned the revival and reshaping of the auto industry as a major part of his administration’s push to improve the economy and create jobs.
To be fair to Detroit they are finally selling some decent small cars: Ford has the Fiesta and the redesigned Focus while Chevy is selling the Cruze. These are of course European designs but they are made in North America.
“You can’t just make money on SUVs and trucks,” Obama said during a town hall forum in Cannon Falls, Minn. “There is a place for SUVs and trucks, but as gas prices keep on going up, you have got to understand the market. People are going to try to save money.”
Yo, Mr. President! Slim here.
Did you know that driving is ever-so-slowly becoming less hip? ‘Specially among the young urban people who voted for you three years ago?
More and more of them are choosing to get around by bicycle and use public transit. They consider these things to be more “green,” and trust me, they’re really into green.
Me again.
There’s a bit of talk about something called “peak car use.” Which is just a fancy way of noting the decline of driving.
It appears that, since 2007, the United States is indeed in a driving decline. And it seems likely that this decline will be with us for a while to come.
Yet another trend that’s not the auto industry’s friend.
It isn’t because people want to drive less.
About 16% of the population doesn’t have to drive to work anymore.
But I guess they can brag about being “green” now.
What’s going to be interesting is when everybody making $10/hr in BFE run out of $5000 used cars, and have to pay $10K for a 10 year old POS, or $40K for something new.
As has been noted by several observers here, this process is well underway.
My parents recently spent $1600 on maintenance for my future car. Replaced the timing belt and a leaking oil pan. Just 2 1/2 more years I have to keep my Taurus running before I get to buy the Civic off them.
“As has been noted by several observers here, this process is well underway.”
And this process is brought to us by the Great Contraction whose forces work is such contradictory ways that they make deflation appear to be inflation, such as making used car prices rise because people who simply have to drive but do not have the money to buy new cars are forced to compete on prices with others in the same boat.
When demand outstrips supply then prices rise. If the demand for used cars outstrip the supply of used cars then the price of used cars will rise.
This would not happen if there were a lot of people that were flush with cash. I say this because it did not happen in the past when there were a lot of people who were flush with cash.
Cash is what makes the difference.
“More and more of them are choosing to get around by bicycle” They won’t think that it’s so hip when they see me!
Four more trips across the Golden Gate left. I may start biking home as well as biking in, even with the tourists. I will miss my commute. I can’t believe that I just wrote that. Four years without a car has scrambled my brain.
And, Mr President Dipchit, they’ve been making money on trucks/SUVs for 30 years.
Why? Because anything else US-made has been a overpriced, giant POS for the most part. So, if you are serious about “Buy American” you were pretty much stuck.
http://www.youtube.com/watch?v=6TvZWScQquU
Jack Cafferty does the unthinkable: bumps Ron Paul on a CNN “news” show that (as usual) ignored RP’s strong second-place showing in an Iowa straw poll. At least one CNN news personality has a spine, it seems.
Holy macaroni there are so serious convulsions and shake-ups about to occur in my workplace. My plan is to lay low, do a good job, and not piss anyone off.
Details?
Good luck. We may have something similar in the works at my shop, though I am not privy to the discussions…
Great timing!
Let’s see… 2011 minus 6 equals 2005. Oh! Now I get it.
“CLEARWATER — The palatial Fisherman’s Paradise resort boasts something for the angler with everything: a helipad, a marina, a two-floor gym, a health spa, a sports bar, a 900-bottle wine cellar, even a movie theater.
Did we mention it’s a boat?
The five-story “floating palace,” moored 15 miles off the Clearwater coast, is a barge that’s been transformed into a $25 million luxury mothership for deep-sea anglers and divers. Pulled by a tugboat, it will loop between the Gulf of Mexico, Panama and Belize.
After six years of construction…”
http://www.tampabay.com/news/business/article1186145.ece
How will religious fundamentalnuts reconcile Perry’s Gawd-based campaign platform with his recent medical treatment by human embryo — er, I mean, stem cell — injection?
Rick Perry, prayer and stem cells
Unexpected consequences
Stem-cell research may be coming back onto the political agenda
Aug 13th 2011 | AUSTIN | from the print edition
…
“His agenda is not a political agenda—His agenda is a salvation agenda,” he said, of God.
…
Last month Mr Perry had an operation to fix a recurring back problem. While the surgeon was at it, he injected the governor with stem cells, in an experimental procedure meant to speed recovery.
…
Math rules! Science rocks!
Here’s a nice chart, for those who care:
http://research.stlouisfed.org/fred2/series/MULT
(A thousand words.)
I don’t claim to fully understand that chart, but am wondering whether my rough interpretation is on target?
The Fed has been pushing on a string since the onset of the Great Recession, and still is.
Is that the M1/fed balance sheet?
If so, it demonstrates that M1 is being maintained by the trippling of the fed balance sheet.
I had an interesting conversation with a commercial property owner in the SF Bay Area today. This person has been in Silicon Valley commercial real estate for the better part of 20-30 years. The comment…the market is as active and strong has he has ever seen it. This time last year, a straw poll in their office would have resulted in significant pessimism.
Lots of demand for space from existing and growing companies, new companies, and companies that need to be in on the action for social networking, and so are establishing a presence here.
This leads to hiring, this leads to economic activity…
They sure are trying to create a new bubble. I am not convinced it will be successful.
Aug. 15, 2011, 10:03 p.m. EDT
Hong Kong’s slump signals global trouble: analysts
By Chris Oliver, MarketWatch
HONG KONG (MarketWatch) — Hong Kong is suffering an economic chill that could soon go global, according to analysts who say the territory is showing omens of a dire economic outlook.
Quarterly gross domestic product data released last week showed activity contracting in the April-to-June period from the previous quarter on a seasonally adjusted basis. That means Hong Kong could technically fall into recession if figures for the current quarter ending in September are similarly weak.
A deepening slowdown, however, is a near certainty, according to Daiwa Capital Markets, which said that what had been viewed as a soft patch will eventually be seen as a more serious downturn, dragging on growth in the current quarter.
“We see grave implications as the Hong Kong economy is now halfway into a recession,” wrote Daiwa economist Kevin Lai in research note following the GDP release.
…