Bits Bucket for September 27, 2011
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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‘I go to bed every night and dream of another recession’: Moment trader told shocked BBC presenter the City just LOVES an economic disaster
Read more: http://www.dailymail.co.uk/news/article-2042291/I-bed-night-dream-recession-Trader-reveals-City-PROFIT-economic-disaster.html#ixzz1Z9EW6wwH
In other breaking news bear spotted defecating in wood.
Speaking of traders, here’s an email I got from one of my Florida Senators, Bill Nelson. I just about crapped my shorts. Nelson is not known for speaking out against much of anything. He’s a go-along to get-along kinda guy:
“A loaf of whole wheat. A gallon of gasoline. A pair of Levi’s. Americans are paying more for many basic items this year, making tough economic times even tougher.”
Part of the reason, according to The New York Times, is that speculators are still playing games in the marketplace. Our regulators allow them to wildly bid up the price for everyday items we need, like wheat, gasoline and heating oil. Click here to read The Times article.
Despite a clear directive from Congress to rein in excessive speculation, our watchdogs in Washington seem to be listening more to Wall Street, and not acting quickly enough to protect American consumers. Consider: On any given day about half of the oil futures contracts are bought and sold by traders, not companies that use oil, like airlines and power companies. And the sky’s the limit when it comes to how much of the market traders can control.
To help stop the manipulation of commodities prices, send an e-mail now to the Commodity Futures Trading Commission - and tell the members to stop speculators from interfering with the price of food and energy. Tell the commissioners to stop listening to Wall Street lobbyists. Tell them to impose meaningful position limits.
And while you’re at it, forward this note to your friends, family and others who care about this issue. If the commission hears from enough folks, it’ll adopt stronger rules next month when a vote is scheduled.”
Stop! Or I’ll yell stop again!
To help stop the manipulation of commodities prices, send an e-mail now to the Commodity Futures Trading Commission - and tell the members to stop speculators from interfering with the price of food and energy.
STOP the QE1, QE2, QE3, TARP, TWIST, stimulus, etc., etc., etc., and there WOULD BE NO SPIKE IN COMMODITIES…
Let me make sure I understand this:
Companies are using borrowed money to speculate in “needs” industries in order to make lots of profit from the price inflation off the backs of the people who actually need the stuff.
Troubled banks use the profits to fill the hold dug by bad MBS and failed CDS. Well-heeled companies use the profits to feather their nests. First world countries lose standard of living because they need the $4 to buy food. Third world countries starve because they can no longer buy food at all.
They can starve and die. They probably aren’t producers anyway
“They probably aren’t producers anyway”
‘ PUT the coffee down! coffee is for closers’
Yes, I’d say you understand it quite well!
STOP the QE1, QE2, QE3, TARP, TWIST, stimulus, etc., etc., etc., and there WOULD BE NO SPIKE IN COMMODITIES…
Banana boy … I agree with you 100%!
I know, it’s shocking.
Same here.
is that speculators are still playing games in the marketplace.
The Caribou fea$t is’nt yielding much flesh from the bone$…wolf follows $cent out of “The Hou$e”, …now devouring small rodent nutrition in the $urrounding field$
(aka, “True$erialLiquidist’$™” munch on appetizer’$, awaiting next big kill)
Nothing to see here, folks. Just the Invisible Hand of the Free Market. Lloyd Blankfein and the Boyz doing God’s work.
The invisible hand is holding out a lot of campaign finance $$.
Honestly, if traders are driving up the price and not assuming any risk, doesn’t it seem like the end-use companies like airlines, grocery stores and big food processing companies like Kraft and con-agra will start bypassing the commodities markets and buying direct from the farmers? Or in essence, create a secondary commodities market? Are they already doing this? If I was a C level exec at Albertsons, ConAgra Jet-Blue, Southwest, etc.. that’s what I would be looking at…
In a way they do. I recall the Southwest saved a fortune when they prepurchased fuel at lower prices.
not just commodities are going up
INDIANAPOLIS (AP) — The cost of employer-sponsored health insurance surged this year, snapping a trend toward moderate growth, but experts say these increases may slow again in 2012.
Annual premiums for family coverage climbed 9 percent and surpassed $15,000 for the first time, according to a report released Tuesday by the Kaiser Family Foundation and the Health Research and Educational Trust. Premiums for single coverage rose 8 percent compared to 2010.
That compares to increases last year of 3 and 5 percent for family and single coverage, respectively. The study shows that premiums for both family and single coverage have more than doubled since 2001, while worker wages have risen 34 percent.
Kaiser CEO Drew Altman said a number of factors may have played a role in this year’s percentage jump. He noted that health care costs continue to rise, and insurer profits and the health care overhaul also have some impact.
The overhaul, which Congress passed last year, aims to eventually cover millions of uninsured people. Kaiser said initial provisions of the law contributed between 1 and 2 percentage points to this year’s premium hikes, which is about what many insurance analysts and benefits experts expected.
Companies and workers split premiums for employer-sponsored coverage, the most common form of health insurance in the United States, and employers generally pick up 70 percent of the bill or more.
Businesses likely reacted to these cost increases by giving a smaller raise or no wage increase to their workers, said Helen Darling, CEO of the National Business Group on Health, a nonprofit organization that represents large employers on health care issues.
“(Workers) basically are giving their pay raise to the health system,” said Darling, who was not involved with the Kaiser study. “It’s really bad news.”
Businesses likely reacted to these cost increases by giving a smaller raise or no wage increase to their workers, said Helen Darling, CEO of the National Business Group on Health, a nonprofit organization that represents large employers on health care issues.
“(Workers) basically are giving their pay raise to the health system,” said Darling, who was not involved with the Kaiser study. “It’s really bad news.”
Nothing like private health insurance when it comes to screwing people over. I say we put a giant Groupon on it.
“(Workers) basically are giving their pay raise to the health system,” said Darling, who was not involved with the Kaiser study. “It’s really bad news.”
We’ve been giving our raises to the insurance company for quite a while now. Now they want more than just the raise.
Well,this is one of the reasons to disconnect medical
services from the employer and go for a single pay system .
So would we get large raises if our employers no longer subsidized 70% of the health insurance premium? My guess is that the corporations would pocket the savings and pay bonuses to their executives who increased their profit.
Strange that we don’t repeal the law that exempts employer paid medical benefits from taxable income…. It shoots anyone trying to choose a non-employer health plan right in the foot. Why not just make all health insurance premiums (or deductibles for that matter) tax deductible and let people choose if they want to stay with employer care or go private? What is this 5k/8% medical expense deduction threshold ??
Huh? So you WANT more government regulation and interference in the free market?
I’m confused….
Realtors Are Liars®
Shadow housing stock looms in mired market
Homes in limbo by foreclosure or repossession could drag down prices for years in Iowa and the U.S.
11:46 PM, Sep. 24, 2011
Holly Olson, director of the Neighborhood Finance Corp., stands by the back door of a Des Moines property that has been abandoned by its owners but isn’t in foreclosure yet. / Justin Hayworth/The Register
Used to be, when someone moved out of a house, Rob McGregor saw a “for sale” sign go up.
The mail carrier has seen something different over the past couple of years. Houses along his route near Beaverdale Park on Des Moines’ west side go dark and stay that way. No sign, no Realtor’s phone number, just an empty house.
The new normal is stagnant home prices, and one reason is the hundreds of thousands of homes either in foreclosure or repossessed by banks — a giant shadow inventory of homes waiting to go on the market.
http://www.desmoinesregister.com/article/20110925/BUSINESS/309250042/Shadow-housing-stock-looms-mired-market - 136k -
So I wonder when the banks will figure out that the longer they drag this out, the more likely buyers catch on and notice and therefore wait for the real price declines. I wonder when they realize that what they do to save the market is killing the market.
“The Banks” are insolvent. “The Market” is not on their agenda. Time to bank closure is the only thing on their agenda. All incentives are to let the house rot. There is no equity to recover, only a loss to discover. We are in the postponed discovery phase. Shhhhhhhh……………
There is no equity to recover, only a loss to discover.
Mmmm, poetry.
Local inventory supports your theory thoroughly although to be fair this is not the first slow down when inventory has been left to rot. There are several Mansion-esque local homes that the present owners had resurrected after they sat vacant for years.
Of all the many great memes which started at the HBB, the shadow inventory meme has to be one of the greatest successes.
I so totally agree with you Cantankerous.
I’ve seen references in the MSM but it’s funny, I was having a conversation w/a local realtor, not mine, recently and he appeared to have never heard the reference. When I explained it to him his eyes lit up and he agreed he did know of a few people who hadn’t been paying their mortgage in a while seemingly w/o repurcussion.
The fact that the banks may be holding the inventory back on purpose seemed to be too much for him to get his mind around although he agreed pricing would change if there was a bump up in inventory.
I don’t believe this story, there was no bubble in the heartland. Prudent Midwesterners would never pay too much for a house, let alone HELOC it to the hilt, they’re the broad shoulders upon which the weaker parts (CA, NV, FL) of this nation will ride out of the quagmire.
Oh wait…
Used to be, when someone moved out of a house, Rob McGregor saw a “for sale” sign go up.
The mail carrier has seen something different over the past couple of years. Houses along his route near Beaverdale Park on Des Moines’ west side go dark and stay that way. No sign, no Realtor’s phone number, just an empty house.
I think there’s a house like that just up the street. The people who used to live there — I think they were the owners — took a powder at the end of July/early August. I mean, these people just vanished.
Nowadays, I’m seeing a couple up there during the daytime. They look like they’re from some cleaning service, and they’re hauling junk away from the property.
I don’t know if they were hired by the financial institution that may have repossessed the property, but it was a month between the departure of my former neighbors and when they first showed up. But I do know that they have quite the cleanup job — it appears that the former neighbors weren’t the tidiest of people.
House next door was like that. Midnight move out, no sign out front for months, property neglected for same time.
As we are having the record drought, the yard is now almost nothing but dirt.
House next door sales history.
2/13/2006 $370,000
1/28/2011 $199,000
5/4/2011 $135,000
The 2006 owners made a few desultory attempts to rent it, but for most of the period it was vacant but maintained. The seller on 5/4/2011 was Federal Home Loan Mortgage Corp, so I assume that the price on 1/28/2011 was what they bid at the courthouse steps for the foreclosure. The current owners are Arel Properties LLC and at that purchase price, I’d guess that this will be a reasonably profitable rental. But it took 5 years before the flippers who bought it in 2006 and/or their lender capitulated.
$135K? Well, that is likely a comp killer.
HOUSING: Prices collapsing in senior communities
By ERIC WOLFF ewolff@nctimes.com North County Times | Posted: Sunday, September 25, 2011 5:00 am
North San Diego and Southwest Riverside counties have everything an incipient retiree could want: Steady sunshine, moderate temperatures, and plenty of cheap 55-and-up communities to live in.
How cheap? Houses and condos in senior communities in the region have been losing value steadily since they peaked in 2005, now down 42 percent to a median price of $160,000 in 2011, a faster drop than the local housing market as a whole, according to data from the Multiple Listing Service, a real estate agent database. These communities, which restrict the age of purchasers, provide amenities such as pools and activities and the assurance of no screaming kids to retirees or people on the brink.
As such, the communities anticipated a wave of baby boomers that has not materialized, as boomers have gotten caught in the vise of the real estate crash and a sluggish recovery marked by high unemployment. Unlike the family market, where lenders and hold-out owners can keep houses off the market, nature itself forces homes in senior communities onto the market at a higher than usual rate.
http://www.nctimes.com/blogsnew/business/realside/article_f4c91559-20a3-5a24-8f29-1c760d6456ef.html - 103k
“…nature itself forces homes in senior communities onto the market at a higher than usual rate.”
Morbid but fascinating observation…
I’ve had a similar set of thoughts recently:
1. It’s well established that “average” member of the up and coming generation (those in their late teens to mid 30’s) can never hope to afford to buy “average” houses, even at current post-bubble deflated levels. Nor will they be likely to any time soon.
2. It’s just as obvious, but far less recognized, that in the end, they will get the houses anyway, as the present generation of occupants move on to the old folk’s home and beyond.
3. Housing prices will indeed reconcile the above two facts as this plays out.
Depending on the factors affecting prices, we could still see another 30-50% decline in real housing prices over the next two decades because of this shift. Not something that many people want to consider.
3. Housing prices will indeed reconcile the above two facts as this plays out.
Just as soon as the government allows it. For now they’d rather the kids lived under bridges while the houses rot.
The houses built during the bubble were too large. They must rot. The next generation will not have use for them.
I agree with both of these comments, but the effects you mention are only at the margin.
We’ll (or I guess it should be “they’ll”) find new uses for old structures. It’s always happened in the past, I don’t think this time it will be any different. McMansionville won’t ever be the same, but life will go on. And at some point, the overhang of houses will be cleared.
Too large for what? The utilities are only unaffordable if you insist on heating and cooling to 72 degrees. Too large to maintain with little income? Probably true, but that doesn’t mean you couldn’t get quite a few years out of it before it became unsafe.
The houses built during the bubble were too large. They must rot. The next generation will not have use for them.
They remind me of those huge Victorian houses that were built during the late 1800s.
More than a few of those ended up as the haunted houses we’ve heard so much about. You may recall some from your growing up years. (I sure do!)
In the end, the solution was the bulldozer.
The big Victorians in my home town a) weren’t really all that big and b) were built on prime, smallish (not tiny) lots right near the center of town. They were close to town hall, the library, schools, churches, banks, a few restaurants, the shoe repair place, etc. They had lovely front porches. When people decided they wanted more space and soaring ceilings and 2 acre lots with swimming pools and tennis courts, they were either split into two medium sized apartments or small apartments up top and doctors or lawyers offices on the ground floor.
I don’t think the new places are going to turn out to be as useful in their old age.
were built on prime, smallish (not tiny) lots right near the center of town. They were close to town hall, the library, schools, churches, banks, a few restaurants, the shoe repair place, etc ??
Concentric rings are the way towns grew back the for a lot of reasons…It wasn’t until after all the vets came home after WWII that the cookie cutter subdivisions came into play…After that, it morphed into cookie cutter lots, with stucco boxes…
In the end, the solution was the bulldozer.
They must not air This Old House in Arizona. If they tore down all the Victorians in New England there wouldn’t be enough housing left.
If they tore down all the Victorians in New England there wouldn’t be enough housing left.
Quite a few of them were torn down in PA. I remember seeing this during my growing up years.
But a large proportion of those hulking victorians are still around, despite the expense of heating them. Some friends of my parents lived in one outside of Boston. VERY expensive to heat. Unconverted carriage house out back that still had horse stalls. But at the right price, somebody will occupy it. The cost per square foot of of the mcmansions from the turn of THIS century will probably fall below that of smaller houses built in better locations, but I don’t think that the total price will. Of course if energy price quintuple that will change, but a lower purchase price and more space is likely to get most of these occupied eventually except for extreme exurbs. If they turn out to be more durable that they seem so far, 50 years from now they may be the source of “bought if for a song in the teens” stories in the same way that some people managed to buy the old victorians for a low purchase price during the depression or the oil crisis of the 70s.
I wonder if in 50 years it’ll just look like a big Tyvek tent?
I bought a large Victorian for a song in 2000. It cost more to heat in the winter than the mortgage. The previous owners had shut down the boiler and heated just the kitchen and adjacent rooms with a woodstove during the nippy months. That is pretty much the way the house was designed in the first place. Every room could be heated (coal fireplace) or closed off.
I mentioned once in casual conversation that once the boomer population bulge started selling due to extreme age all the pressure would be off prices.
The guy’s face went white. He’d never considered that before. I guess he’d just assumed the homes would hit the market and be turned over at the same rate from now until eternity.
Morbid but fascinating observation… ??
I agree…Also, when the 75 million baby boomers finally reach their end of days, what cohort can possibly fill the demand for all those retirement communities that have obviously been built to service that group…
what cohort
Just open them up to young families with young children. I’ve always thought that those retirement communities looked an awful lot like the housing built in the 50’s for families. Small-ish 3/2 houses, picket fences, close neighborhoods, clubhouse, tot-lot, pool. The kids in the houses can visit grandma in the assisted-living condo tower.
Just open them up to young families with young children ??
And how would you accomplish that when people purchased based on the deed covenant that it is “age restricted”…You would need to buy “every house” in the subdivision and then get municipal approval, maybe even state approval, to eliminate the 55 & over restriction…Easily said, probably close to impossible to do, that is if you believe in the rule of contract law & deed restrictions…
“age restricted”
End age-discriminatory deed restrictions; problem solved.
End age-discriminatory deed restrictions; problem solved ??
What problem ??
The town won’t approve lifting the age restriction because the houses don’t generate enough property taxes to educated the kids that would result if young couples were alloed to buy. That is the real moving force beghind the restriction.
won’t approve lifting the age restriction because the houses don’t generate enough property taxes to educated the kids ??
Confusing…Is there a difference in real estate taxes paid in a 55 age restricted community ??…I don’t believe so…
I actually think my parents do have a lower property tax rate because of the restrictions, but that would be on a case by case basis.
What I really was referring to was the situation in my home town when I was a kid. The houses in my neighborhood (generally 3/2, some without garage, 1/4 acre lots) didn’t generate enough property taxes to cover a proportional share of the cost of town services other than schools plus the per pupil costs of two kids. Well, with 3 bedrooms, it was entirely likely that there would be two kids, so the houses were money losers for the town. The town reacted by increasing the zoning restrictions on new subdivisions. It got up to 1 1/2 to 2 acres. You don’t put a 1400 square foor 3/2 sans garage on 1 1/2 acres. The new houses sold for a lot more and the property taxes more than covered the costs of educating any children.
Attracting religious communities that sent their children to parochial school also helped the tax base. Mostly muslim doctors and engineers who liked the bigger places in the new subdivisions near the mosque and orthodox jews who bought houses in all price ranges as long as they were walking distance to their synagogues.
okay, now I understand your point…
We get a tax deduction from the state, actually a refund of half the tax, due to my spouse’s age.
I have a friend who bought a condo in Palm Desert. His is right next to a 55 and older complex. He didn’t want to buy in the 55 and old complex because of the restrictions on the ages and supervision required if he wanted to allow his children and grandchildren to use the complex.
55 and older will always have limited buyer appeal and a smaller group of 55 and up buyers.
restrictions on the ages and supervision required ??
And in that sentence the key word being “supervision”…Younger parents use the 55 and over facility as a “dumping ground” for their kids..Gated community, pool, grandparents as the baby sitter and most important ITS FREE !! Hell, whats not to like ??…Without the severe restrictions the place would turn into a gigantic day care facility…
I would not hesitate to recommend a 55+ community for retirees. Just make sure it’s got amenities that will keep you active (walking trails, tennis, fitness, swimming, golf). Our community even has several USTA-league teams in the 75-and-up age group.
We also have FAR more friends here (who are all of course close by) than if we lived in a regular community, where most people go to work and their kids go to school most of the day. Also, no boom-box cars going by and no driveway basketball games that last long after darkness falls.
For all the reasons you suggest is exactly why they exist Bill…
So what you are saying is that 55+ communities are white.
However, there is a big downside: All of your neighbors are just like you. They sit around all day watching the Fox network or listening to Chubby Limbaugh and soaking up all the hate, anomosity and manufactured outrage that those outlets spew. Golf, drink, eat, golf, drink, eat… it will get old after a while. Then you are stuck with 80,000 other clones just waiting for the next Palin visit so she can tell you that you are Patriots and the working stiffs are commies while some Mexican mows your lawn. That is The Villages, FL; good grief.
So what you are saying is that 55+ communities are white ??
So what makes you draw that conclusion other that your bias ??
And what is white anyway…I am half portugese…Am I white ??
“no boom-box cars going by and no driveway basketball games that last long after darkness falls”
“no boom-box cars going by and no driveway basketball ??
Both of my son’s had boom boxes in their cars that drove me nuts…They played basketball also…
What’s it to you if a particular group of people want to live like this?
You think your own demographic isn’t cloistering itself the same way these days as they retire? With all the crazy extremes that bubble to the surface as always happens when everyone thinks the same? Think again. I’ve lived in the middle of such a place as an outsider. It ain’t pretty no matter what POV you’re coming from.
What’s it to you ??
What’s it to whom ?
Everybody is different. Personally, I think that kind of cloistering does not make a nice world. And I was speaking specifically of the giant community “The Villages” in central Florida. Here is a town of 80,000 where everybody dies in 10 or 15 years, nobody graduates from school, nobody has any babies, no long-term memories are made. Just a constant turnover of white-haired people. To each his own, I guess.
CrackerBob.. realize this.. you are the one who sounds racist when you label his generic remarks with being “white” . You feed into every stereotype that non-whites are loud non-community friendly people. Just take what he says at face value… or don’t, but don’t try to goad HIM by calling HIM racist..
55 and older will always have limited buyer appeal and a smaller group of 55 and up buyers.
Agreed.
There are quite a few boomers who, shall we say, don’t have the same “stay far away from here” attitude toward kids that their parents and grandparents did.
Unlike their predecessors, they want the younger ones around. Matter of fact, they wouldn’t mind having them around 24/7.
Why the Rich Pay 40% of Taxes
The reason behind the 40% number doesn’t answer the larger question of whether it’s “fair” to tax the rich more. And it doesn’t mean there won’t be a large economic cost to raising their taxes.
But it does mean that when pundits and politicians talk about the rich paying “a big chunk,” they should be clear that it’s because the rich earn “an even bigger chunk.”
Why the general public can’t comprehend this fact puzzles me..
From the comment section:
There are days, like this one, when I just stare at these comments in bewilderment. I just can’t understand how anyone could come on this forum and decry the injustice of taxing those with the most money. Who are you people? You’re clearly not rich yourself. Rich people are out having fun on their yachts. Do you really think that by defending them you will be rich yourself one day? That is just naive. You will never be rich–the current distribution of the tax burden makes that certain. Upward mobility in the current system is no easier today that it was in the 1300s.
My father is the most brilliant man I know. He’s also the most hard-working. He graduated first in his class from high school, college, and one of the most prestigious law schools in the country. His career has been a straight shot to the top. And yet has has been, and never will be, rich. In fact, after putting my brothers and I through college, he’s not even sure he will have enough to maintain his distinctly middle class lifestyle in retirement.
I’m convinced what motivates you is that you need to convince yourself you love the rich so that you can suck up to them pathologically in hopes of getting on their good side and becoming one of them. Just as in the middle ages, that is the only form of upward mobility left in America.
http://blogs.wsj.com/wealth/2011/09/26/why-the-rich-pay-40-of-taxes/
The innovators who produce something of value to society are the minority of the rich.
See also Tom Wolfe’s ‘Bonfire of the Vanities’ where bond trader Sherman McCoy explains his job to his daughter as collecting ‘crumbs’
LOL, I’m just reading that book right now for the first time. I’m up to the point where Maria and Sherman just got through their ordeal in the Bronx. I had no idea it was Tom Wolfe who injected the term “Masters of the Universe” into pop culture.
Define “RICH”
When all is said and done - eventually rich gets to be defined as anyone making anything more than minimum wage.
What I DO expect is that any tax which is intended to “soak the millionaires” will in a few years work its way down to taxing me.
The original US income tax rate was 1% of income starting at $10,000 (THE RICH), in 1913 dollars.
The original inheritance tax was capped at 0.75% (ON THE RICH) when property passed to direct descendants.
The original alternative minimum tax (AMT) was targeted at 155 (that’s one hundred and fifty five RICH PEOPLE) households.
And I could about a dozen more examples (many state income taxes started out as a tax on the RICH)
No matter how much you may want to soak the plutocracy, sooner or later you wind up putting the middle class through the wringer.
CUT government spending first. Then we can talk.
“The trouble with socialism is that you run out of people to tax”
Margaret Thatcher
“The trouble with ideological fundamentalists is that they cannot cannot think”
Realtors Are Liars®
It’s about gullibility. What happens to the “rich” doesn’t affect us, right? Trouble is; the voices of authority that tell us they will fix everything by taking down the “rich” actually work for those guys! We are expected to drool all over ourselves, shout Amen and give up our own liberty. The rich aren’t on the menu, it’s the rest of us.
Our founding fathers understood how this goes. They warned us.
“They warned us.”
How?
“How?”
I guess I stumped him.
No Alpha, nice to see you. I thought your question rhetorical. They put a lot about property rights in the Constitution, I suspect due to then recent tribulations over the king’s tendancy to take their stuff to help pay off absurd debts from what was to them the biggest credit bubble in history. Interesting parallel to today.
In that case, I guess they will just have to tax the top 1%, who own an increasing share of U.S. wealth, increasingly more.
Agreed. More tax will not solve our problems. It will not be spend reducing the deficit and worst of all there will not be more tax anyway since our economy is producing far less taxable income to tax.
since our economy is producing far less taxable income to tax ??
Less income in the middle and lower end to tax, I would say yes…Less income at the top…Nope…Plenty up there but its not taxable either because of how it is categorized…Stock, real estate, etc…A lot of great wealth is created without paying a dime in tax…
I would be the first to support reducing tax on EARNED income and tax capital gains etc up the wazoo.
Having been on the side of suddenly high income without protective measures however I saw the massive tax I was required to cough up as social engineering designed to keep people like me in my place (poor forever). Why then are we even discussing raising taxes on earned income?
If the elite gain control of all the money and spend little and invest in China, what does that do to our economy and the tax base?? Remember teh top 400 pay effective tax rates of 15% and sit on long term gains and offshore profits.
Answer it destroys both.
If we taxed the top 0.1% more and spent that money on improving our infrastructure you create jobs and those employed people stimuulate the economy. This increases the tax base. The improved infrastructure makes it easier for business to function here.
What I DO expect is that any tax which is intended to “soak the millionaires” will in a few years work its way down to taxing me.’
haha you got that right
it really doesn’t matter rich or poor with the government running up Un-payable bills we will all pay look at Greece
the rich should just get hit harder as they have more to lose
just like it costs more to insure expensive cars than cheap cars it should cost more taxes to keep the rich safe.
and I have a feeling the rich pay a different kind of tax, under the table and straight to Washington, to make sure they stay “insured”
The “rich” don’t pay 40% taxes. People that EARN an income, be it $250K or $500K a year are not rich. Soros, Buffet, Gates, Blankfein, those guys are rich, we’re talking billions not millions. They get their money through capital gains @ 15%. No SS or FICA tax either. The the small buisiness men or engineer or doctor that earns $200K a year pays roughly $70K (if employed) or $78K if self-employed in federal and FICA taxes. So that’s 35% - 39%. Depending on the state add another 0 - 11%. So you’re looking somewhere in the 35 - 50% range in taxes on someone earning $200K per year. How does that compare with 15% for capital gains on billionaires? Does any of the billionaires contribute anything so important to our society that we couldn’t do without them? Other than stealing billions of taxpayes money through various skimming operations on Wall Street I really don’t see anything these people do to deserve that kind of money. The cake (US economy) is only so big. If you serve half the cake to just 1% of the participants that doesn’t leave much for everybody else.
Solution:
1. Treat ALL income the same not matter what the source
2. No more itemized deductions or other loopholes. Everybody gets a $25K standard deduction. Then a flat tax up to $10 million.
3. 90% tax for those making $10+ million. That might curb greed a bit and leave some crumbs for other participants in the US economy.
Solution:
1. Treat ALL income the same not matter what the source
2. No more itemized deductions or other loopholes. Everybody gets a $25K standard deduction. Then a flat tax up to $10 million.
3. 90% tax for those making $10+ million. That might curb greed a bit and leave some crumbs for other participants in the US economy.
I actually could work/live with that. Index the $10 million to inflation and convince obama and the dems that rich does not begin at $200,000/year in household income…
IMO it’s a pretty big leap from 0% on $25K to 90% on $10 million. I would advocate for 5-6 gradations in between.
Other than that, I agree with banana and mike — I could live with this too. Are union goon pensions included as part of the income? So if you double dip, they whack your pension?
No more itemized deductions or other loopholes. Everybody gets a $25K standard deduction ??
90% tax for those making $10+ million ??
I am no defender of the mega rich but lets see if I understand what you propose;
If, I am a billionaire and I invest a billion and make a billion, I pay 900 million in tax…On the other hand, If I invest a billion and “lose” that billion, I get a $25,000. standard deduction…
Hmmm….I wonder what would happen with a tax structure like that…
It’s a tax deduction, not a tax credit. You don’t make $25 by pretending to lose a billion.
Rather than call it a deduction, just include it in the gradations. Just off the top of my head:
$0 — $25K –> 0%
$25K — $50K –> 6%
$50K — $125K –> 18%
$125K — $300K –> 35%
$300K — $ 1 mil –> 54%
$1 mil — $100 mil –> 78%
$100 mil and above –> 92%
You said everyone gets a “standard $25,000. deduction, No “itemizing”…So I ask you again, if the billionaire invested a billion and “lost” that billion, does he only get a $25,000. standard deduction ??
If in one year your income is zero (you lose a billion dollars in the market and you don’t make any other money) then the $25K standard deduction doesn’t help you, but nothing else happens. You made zero. You don’t pay tax.
You made zero ??
I never said that…
Oxide suggests that the billionaire pay 90% tax on the gain of one billion…He also limits the expenses to $25,000. quote; “no itemizing”…So, my question is, do you get to deduct the loss of the 1 Bil….
“do you get to deduct ”
No. No tax write-offs for business losses. No tax writoffs for charity giving. No tax writeoffs for mortage interest, student loans, health insurance, home business expense, MetroCards, no deductions at all, and no EIC either, I guess. Income only.
If you set it up like this, you better have a bunch of social programs set up, because who gives to charity without the tax deduction?
No. No tax write-offs for business losses ??
Okay, I was just trying to make sure I was accurate about what you were suggesting…
So, the Billionaire pays 90% tax on any income he may have on his investments but he gets no deduction, other that the $25,000. on any loses…Which brings me full circle to my original question;
Hmmm….I wonder what would happen with a tax structure like that… ??
This discussion isn’t using the technical tax terms required to make sense. In the past, even when capital gains and ordinary income were taxed at the same rates, they were considered different classes of income. Ordinary income you have as an employee based on your salary. If as an unincorporated business owner (for provision of goods or services), your ordinary income is measured by the PROFIT the business has, not the gross income. This type of income is offset by some listed deductions - like mortgage interest, contributiions, etc. or the standard one.
Capital gains are taxed as the net amount of gains over the year (way more complicated than that, but I’m not looking it up). Means that you can offset capitals gains of sales of some capital assets with the losses from the sales of other capital assets. (You can also use a pretty small amount of capital losses to offset ordinary inccome). Long term and short term also come into play to complicate it more.
If you are getting rid of the netting of capital gains and losses recognized during the year, you are talking about a change in the tax code that goes beyond almost anything I can ever remember us discussing here. Not that it couldn’t be written and implemented. Just that it is a seachange. It almost eliminates the idea of capital gains as a different type of income which is very different than just equalizing the marginal rates.
If you set it up like this, you better have a bunch of social programs set up, because who gives to charity without the tax deduction?
Quite a few people do.
Case in point: I used to work for one of the largest non-profits (in terms of assets) in the state of Arizona. More than a few of our donors were motivated by such things as:
1. Helping kids who were as poor as they once were get a college education. This was quite a common sentiment among our scholarship donors.
2. Curing the terrible disease that killed their spouse, child, or best friend. This was the motivation behind a lot of the gifts to research programs.
3. Starting something new that needs to be done. One of the major donors saw a need for entrepreneurship education in the business school. So, he gave the seed money to start the program.
Polly,
If I interpret Oxcide’s suggestion correctly the blurry lines of income and how they are taxed go away…
I don’t think that Obama has actually said that $200,000/year is rich, just that people with incomes at that level can afford to pay tax at the same rates they were back in the 1990s.
Oh the humanity! To pay 1990’s era taxes!
“To pay 1990’s era taxes!”
They’ll all move to Singapore! We’ll lose our producers!
just that people with incomes at that level can afford to pay tax at the same rates they were back in the 1990s.
Funny, the cost of living is higher these days. That statement *might* be a bit more valid if inflation were taken into account.
$200k today is FAR different from $200k in the 1990s.
They’ll all move to Singapore! We’ll lose our producers!
And if they toss litter on the streets of Singapore, they’ll get their fannies paddled.
Which is what I would have loved to do to the people who threw trash all over my street during the night. And don’t think I’d stop at paddling. What I’d really like to do is stuff that detritus up their keisters.
Littering makes me very grumpy.
I don’t think that Obama has actually said that $200,000/year is rich, just that people with incomes at that level can afford to pay tax at the same rates they were back in the 1990s.
Will we shrink government spending to the just somewhat insane levels of the 1990s???
Nah - didn’t think so…
“Will we shrink government spending to the just somewhat insane levels of the 1990s???”
Kind of hard to do when:
1) You spend more on military than the rest of the world combined.
2) The population has grown from 262m in 1995 to 311m today. An 18% increase. More people == more gov’t services.
3) 15 years of inflation. At 3% per year that’s a net of 55%. Even at 2% per year it adds up to 34%.
So no, its not possible to get back to a 1990’s level of spending.
2banana, you aren’t taking demographics into account. In the 90’s, the baby boomers were in their late 40’s. Peak earning — and taxpaying — years. Now, the gov has promised retirement and medical care and by gum, they’re going to get it.
I read an article which aruged that the best way to solve the deficit is to do nothing new and the budget will balance in 2019 or a little later. Just continue the pullout of the Middle East, let all the tax cuts expire, let Obamacare take its course, and (usually unspoken by the media) the baby boomers will “move on” which will take a LOT of pressure of Medicare and SS.
The Do-Nothing Plan
How Congress can balance the budget in eight years by literally doing nothing. This is not a joke.
By Annie Lowrey
Slate
“So how does doing nothing actually return the budget to health? The answer is that doing nothing allows all kinds of fiscal changes that politicians generally abhor to take effect automatically. First, doing nothing means the Bush tax cuts would expire, as scheduled, at the end of next year. That would cause a moderately progressive tax hike, and one that hits most families, including the middle class. The top marginal rate would rise from 35 percent to 39.6 percent, and some tax benefits for investment income would disappear. Additionally, a patch to keep the alternative minimum tax from hitting 20 million or so families would end. Second, the Patient Protection and Affordable Care Act, Obama’s health care law, would proceed without getting repealed or defunded. The CBO believes that the plan would bend health care’s cost curve downward, wrestling the rate of health care inflation back toward the general rate of inflation. Third, doing nothing would mean that Medicare starts paying doctors low, low rates. Congress would not pass anymore of the regular “doc fixes” that keep reimbursements high. Nothing else happens. Almost magically, everything evens out.”
http://www.slate.com/id/2291054/
I am Ok with 1 and 2, but still think taxing rich people is more of a feel good solution rather than a real one.
The reason the American middle class is being systematically destroyed is a combination of things which have nothing to do with taxes. Off-shoring and on-shoring of cheap international labor is first by far the most serious threat to the American middle class. After that rampant unchecked monopolistic behavior by our biggest corporations (Banks, Electric company, Phone companies, Oil Companies, Food producers etc) Yes I know they have the right to charge anything they want and we have the “right” to live in the dark and do without medical care and phone service etc, but there comes a point where a little regulation is needed when healthy competition is not available.
Raising taxes will ONLY further harm the middle class as billionaire types and the biggest corporations further move to offshore their operations. I strongly feel these issues are being played down in the press while “low taxes” are being presented by the press as the REASON middle class people are failing.
+1 GH…I agree with a lot of what you say…A progressive VAT may be the only “fair” way to tax our society…For the most part it cannot be avoided and what ever loopholes there are they could be closed quickly…
+1 GH. We don’t need to tax people more. We need more people to tax. By this I mean people with jobs.
The right-wing meme of 50% of people pay no tax, and therefore we need to “broaden the tax base” has a kernal of truth to it. Very well, let’s broaden the JOB base, and the tax base will broaden by itself. Why is this so difficult for people to understand?
First they complain that 50% of people don’t pay the federal income tax. They they complain that the federal income tax was only supposed to be imposed on the very, very wealthiest of the nation when it was first implemented - much less than 50%.
It is a little contradictory.
Electric company, utilities in general no they can’t charge what they want
hydraulic despotism they could wipe out a whole city and buy it for pennies on the dollar
The reason the American middle class is being systematically destroyed is a combination of things which have nothing to do with taxes. Off-shoring and on-shoring of cheap international labor is first by far the most serious threat to the American middle class. After that rampant unchecked monopolistic behavior by our biggest corporations (Banks, Electric company, Phone companies, Oil Companies, Food producers etc)
And this is all happening because the elite have gained more and more control of our gov due to their excessive wealth compared to everyone else. Large wealth disparities destroy capitalism and democracy.
The “rich” don’t pay 40% taxes. People that EARN an income, be it $250K or $500K a year are not rich. Soros, Buffet, Gates, Blankfein, those guys are rich, we’re talking billions not millions.
———————————–
Buffett, Soros, and Blankfien are CEOs of corporations. They have jobs, just like you and I do. They earn a salary. Since they have jobs and earn a salary, I think it’s safe to assume they pay SS and FICA. In short, your defintion of ‘rich’ is limiting and dare I say it stupid.
The salary that they earn is a fraction of their annual income. Their blended tax rates are much closer to 15% than 35%, that’s for sure. It’s almost all long term capital gains and dividend income. And, of course, everyone’s favorite, muni bonds that are taxed at 0%.
My blended tax rate is in the 30% range. The “truly rich” are more in the 15% range. See the problem with that?
I see a problem with that from a taxing perspective yes. But not from a definitional perspective, as I explained. Other posters have mentioned reasonable (IMO) fixes for this, so I don’t really feel the need to go into it.
If ‘earning an income/not paying SS’ is a deciding factor in determing ‘rich’, then you don’t catch the majority of heavy earners in the US, with those mentioned being among them. That makes it a dumb definition.
Also people who earn ‘$500k a year’ are simply *not yet* in the Buffett/Soros group. They will be in ~20 years if they are truly earning that money and didn’t luck into it. If they did luck into it, then it will all be going bye bye in that same period.
Earn ! $5,000,000 a year ($3,000,000 salary)
Donate artwork to charity appraised at $1,000,000 (original cost $25,000 thirty years ago)
Pay $300,000 on the dividends and $50,000 on the income ! Plus cost of art $25,000.
7.5% total cost.
No fees on gift / how many times do you get to sell anything at appraised value today?
The above is how Canadians see US tax planning.
“Also people who earn ‘$500k a year’ are simply *not yet* in the Buffett/Soros group. They will be in ~20 years if they are truly earning that money and didn’t luck into it. If they did luck into it, then it will all be going bye bye in that same period.”
I think you need some perspective when you’re thinking about these folks making 500K a year. Warren Buffet is worth about 50 billion dollars. If you made 500K a year (take home, about 850K income) and saved every single penny of it (not taking into account compound interest because, if you did; you’d never catch up to Warren), it would take you 100,000 years to have what he has (in net worth).
50B dollars, invested at 1% (a nice, safe Capital One savings account) throws off 50 million dollars a year in interest. That’s about 130K a DAY in interest.
People making 500K/yr are about as similar to Warren Buffet as people in Africa making 50 cents a day are to a CEO of BOA.
There’s arguing where the line between “financially comfortable” and “filthy rich” starts, but it’s certainly not a 500K/yr income that’s going to get you into that “filthy rich” category. You might get “rich” (in my definition, someone who no longer needs to work to maintain their income), but you’re never going to get “Warren Buffet” on a salary like that. Even 500 million a year will take you 100 years to equal Warren’s wealth.
I find the discussion on taxing dividends interesting. When I was in Australia, there was a debate over the double taxation on dividends (ie companies pay tax and then shareholders are taxed again on receiving them) so they now have a dividend imputation system. “Dividend imputation is a corporate tax system in which some or all of the tax paid by a company may be attributed, or imputed, to the shareholders by way of a tax credit to reduce the income tax payable on a distribution. It reduces or eliminates the tax disadvantages of operating a business in a country.” For me, it was an incentive to save and invest to get lower taxed income, but may be this incentive doesn’t work for everyone.
“People that EARN an income, be it $250K or $500K a year are not rich.”
I made exactly the same argument here a few days ago, and had some really good comments and conversations with other bloggers about my personal situation (which is in the range you just defined as “not rich”, but many disagreed).
If you’re working at a job, where, if fired tomorrow, you’re lifestyle would suffer, you’re not rich. The rich make their money on capital gains and inheritance, not through earned income (with the exception of some bankers and CEOs, who are grossly overpaid to the point where, after a year or two, are actually rich enough to never work again).
100-200 (even 400-500K) in income is not “rich”. That’s the guy you know who has a nice car and a nice house. If he lost his job, it would all be gone in a few months to a few years.
Somebody who is “rich” has a few houses; all paid off. They are making a huge percentage of their income from capital gains. They probably don’t work (or don’t need to work, even if they choose to do so). They have don’t have boats; they have yachts. They don’t fly first class, they fly in a private jet (and maybe own one).
The only things I would change on your suggestion, 15% capital gains rate up to the first 100K/yr, anything over that, taxed at regular income rates.
This is a pointless distinction when the median income in the US is $55k, not $500k, the highest median income in any major US area is ~ $120k, and making over $250k puts you in the top 2% of earners across the entire US. That’s the math behind it, not quasi-religious terms based on lifestyle choices.
Just admit that the defintion of rich = has more money than me, no matter how much money I actually have.
There’s those pesky facts again.
When you are part of the very small percentage of people who make significantly more money than the large majority, you ARE the rich.
But Marie Antoinette didn’t get it either.
eco,
You’re only looking at your definition. Yes, I make a lot more than most of the people in the country. And I make less in a year than lots of people make in an hour (the Masters of the Universe).
If my wife and I (both who work full time) both lost our jobs tomorrow, we’d have maybe a year-18 months before we’d be flat broke. Yes, it’s better than most people in this country, but, IMHO, because we are still totally dependent on our W2 income to finance our lifestyles, we are “high earners” not “rich”.
Also, not to try to garner sympathy here, but.. We’ve made (and continue to make) a lot of sacrifices to live like we do. No kids, about 20-25 weeks a year apart (extensive travel), long hours, high stress…. I live near Palm Beach, and I see/deal with the rich on a daily basis. Let me just tell you, they’re not hopping on a plane to Philly next Sunday for a week of all day meetings and executive sessions. They’re relaxing at their beach house, buying diamonds, artwork and other 100K+ trinkets on Worth Ave and then going out for a night of theater.
I think, in part, much of this is because most people don’t really know anyone who’s truly rich. If you did, you’d very quickly see that there’s a huge difference between the doctors/lawyers (high earners) you know and these folks. It’s a night and day difference; they have less in common with the doctor making 500K a year than the doctor has with the wineo living in a box under a bridge.
“If my wife and I (both who work full time) both lost our jobs tomorrow, we’d have maybe a year-18 months before we’d be flat broke…”
Why? (Not rhetorical.) You make big money and have no kids. You want the tax system to take into account your spendthrift/need to maintain a facade?
Why would we be broke in 18 months?
We’re young. We just bought a house (100K down). How many folks do you know in that category that could stand 18 months with no income at all?
What would you expect a “normal” early 30s family be able to stand if both people lost their jobs?
That is not “my” definition at all, but the accepted scientific definition.
Sounds like you bought too much house.
Alpha (I’ll check back to see if you respond, I realize this thread is pretty much dead)..
What the heck do you think is “normal” for a dual income family to have in the survival fund? Should we both be able to lose both our jobs for 3 years before we’re broke? 5 years? Forever?
There’s a line between financially prudent and financial freeze. If you won’t buy anything until you can survive for 5 years with no income, most people won’t ever be able to fall into that category (except for “rich” people, who don’t need any income at all).
I think we need to distinguish between “rich” and “financially cushy.”
To me, you could easily be financially cushy on $150K-$300K almost anywhere in the country except mid-town Manhattan (depending on your house). That means you can get by on ONE mortgage, you have cash for one really big expense per year (mainly vacations, cars and college), and you could pay off the house in 2-3 years if you wanted to, all while saving 10% of your income for a cushy retirement. If you give up the cushy lifestyle and live frugally like Bill the Nomad, you could retire early.
I believe that Obama’s notorious $250K threshold applies more to financially cushy than rich. And really, the financially cushy can afford another 4% in tax without much problem.
“Rich.” I guess once you have financially cushy out of the way, the definition of rich is closer to $500K per year. but once you pass a $300K or so threshold, what is there left to buy except luxury stuff. After the $500K, IMO then you’re “filthy” rich.
your lifestyle would suffer
So what type of lifestyle are you talking? On the Oil City Plan lifestyle, you could be “rich” on about $2 million lump sum, or a $100K lump sum and ~$30K income after that. On Michael Jackson’s lifestyle, you would never be rich.
IMHO, if you are talking about your “salary”, you’re not rich. If you’re talking about your capital gains/dividends (and that’s providing the vast majority of your yearly income), you very well might be rich.
Rich people don’t NEED to work. High income earners (the financially cushy folks) need their jobs or else they, just like everyone else, will be in the soup lines just like everyone else.
Yes, there’s certainly an element of “lifestyle” in that discussion. You need a lot more money to be rich (in my definition) if you have 2 yachts and a helicopter than if you live in the woods of WV.
However, for most of the country, I’d think that earning 500K+ on investments per year (dividends/interest/etc) would put you in the “rich” category just about anywhere.
I’m about decided that we need another “Godwin” law about the terms “rich” and “entitlements.” Both terms are regarded as some sort of insult. Really, if your annual household income is 250k, you may not be “rich”, but since you make more than 95% of the rest of households (as of 2003) you’re certainly “well off.”
And the term “entitlement” really just means that congress doesn’t have to appropriate the funds involved. The authorization is enough.
“Do you really think that by defending them you will be rich yourself one day? That is just naive.”
Is the author unaware of the fact that many who post in defense of the rich are just doing their jobs?
Astroturf nation- sponsored by the Kochtopuss.
Yep. Remember banking PR staffers Joey and Eddie who used to post here
Thing#1 and Thing#2.
Ah, yes, Joey and Eddie.
Right now, the radio is playing a song just for them. Ry Cooder’s “No Banker Left Behind.”
In 2007, the deficit was $500 billion, which was catastrophic. In 2008, it doubled to 1,018 billion. In 2010, it was 1653 billion. It appears that the deficit will be somewhere around 2000 billion for 2011.
In other words, after growing slowly for years to an already unsustainable level, the deficit abruptly quadrupled.
Almost all of this results from ongoing bailouts of corporations in the financial sector. In effect, this is now an ongoing entitlement program for the extremely rich which will be very hard to end.
Can someone explain to me what it is these “titans” are doing to deserve this ever-expanding entitlement program ?
Almost all of this results from ongoing bailouts of corporations in the financial sector
Well, if we are to believe what we have been told starting with the Bush quote; “This sucker could go down”, then the answer to your question is that they had to save the Elephants so they did not trample all the mice…
Grow or Die. Deficit spending is essential to mask the shrinkage in the private economy. If it weren’t for that, we’d realize that we’re already dead. Pelosi explained this.
I say we should have an experiment where we reduce government to nothing and test the results on the economy and society. No wait, that has already been done, it is called Somalia.
You sound like an all or nothing kind of guy Bob.
I say we should have an experiment where we reduce government to nothing and test the results on the economy and society.
I think we have our ’strawman argument of the day’ winner here! Everyone applaud!!!
Last week’s strawman: getting sick without health insurance is a character flaw
Bob gets it.
Without rules, regulations, law and law ENFORCEMENT, what you get is a third world country.
However, TOO MANY rules and regulations and what you get is Great Britain.
Wall Street is our Somalia.
However, TOO MANY rules and regulations and what you get is Great Britain.
A friend of took a three-week vacation in England this summer and had a really good time. It sounds like a nice country.
Some of my family comes from Great Britain. Went to see them back in the 1970s.
My impressions?
1. Boy, are they happy to see you. I don’t know what it is, but the American descendants of people who bailed in the 1800s are greeted with open arms.
2. What a polite place! They line up to get on the bus. And for just about everything else.
3. Gardening is very competitive. People get into very serious arguments over it.
4. The weather is *the* conversation starter. Nothing else comes close.
1. Boy, are they happy to see you. I don’t know what it is, but the American descendants of people who bailed in the 1800s are greeted with open arms.
My recent trip to Poland was somewhat like that. First they needed to tell you how tough things were from 1939 to 1989, and ask why they never heard from anybody in the USA any more. Once they’ve gotten that off their chest, THEN you get the open arms…and tears.
Don’t accuse me of wanting a Somalian level of government, and I won’t accuse you of wanting a North Korean level.
The amount of government I want is the United States circa 1970.
So do you have a list of programs started after 1970 that you don’t like? I believe that Richard Nixon set up EPA and OSHA in the early 70s.
“…so that you can suck up to them pathologically in hopes of getting on their good side and becoming one of them. Just as in the middle ages, that is the only form of upward mobility left in America.”
He gets it.
The political/media class are the fluffers for the 1%er pigmen
You’re convinced, so that probably means you’re not open to listening to other viewpoints, right? You just blow people off saying not to raise taxes further as rich people suckups. Stop and listen. Open your mind.
The drum isn’t just beating for not raising taxes on the “rich”. It’s beating to DECREASE SPENDING. Those who want to continue spending say we need to tax the rich more because they aren’t carrying their fair share. To many of us, that’s just another attempt to avoid the issue of REDUCING SPENDING.
You can label me a racist stupid ignorant right wing republican class-warfare loving meanie all you want. The simple fact is, my family makes well under 250k. I pay 7.5 % payroll tax, plus effectively another 7.5% that my employer matches… 15% right off the top. I don’t own a home, so I can only take the standard deduction of 11k.
All income over 68k individual is taxed at 28% federal. Do the math.. Right there 15% + 28% = 43% . Not counting state taxes, state fees, gas taxes, or sales taxes. CA income is another 10% on top of that…
Every dollar I bring home over 68k ind , 120k combined, I pay 53% tax on.
Now the taxes they are talking about raising are capital gains taxes. They want to bump those from 15% to 20%…or higher! But there has been no mention of excluding the first 100k of capital gains from the increased rate or even 50k, 25k, 10k. Not even a 1k exclusion. So after I pay 53% tax on my income over 68k, I have some I can save, maybe 10k a year. And they want to take more of that money for my retirement too. Too bad. I will vote for those who will DECREASE SPENDING no matter the other rhetoric.
If the democrats push that first, and I see it in action, THEN I will consider supporting a more fair tax policy. Until then, they are just trying to grab even more money to support unnecessary spending while trying to cloud the issue.
So the *truth* that the burden was shed from the top onto your shoulders completely eludes you.
Thank you for clarifying.
You don’t think I realize people are making more than me and paying less taxes? I see it every day.. But why would I want to raise capital gains taxes on top of that? As broken as it currently is, why break it further.. Stop the spending first. You can “help” me after that.
I pay 7.5 % payroll tax, plus effectively another 7.5% that my employer matches
Only the 7.5% comes out of your paycheck. You can’t include the employer match in your marginal rate, unless you also include it in the income caps and your income. Otherwise, you are including it twice. Your marginal rate is 7.5% + 28% = 35.5%. Except that Obama reduced the SS percentage 2% for this year. So your federal marginal rate is really 33.5%.
Including your state income tax is also padding your marginal rate in a discussion about federal taxes. You choose to live and work in California. I choose to live in a state with no state income tax. How much would you make if you lived in the right wing paradise of Texas instead? Would you be financially better off than where you live now?
PM Panic
Yesterday I was at the local pawn shop/coin & PM dealer I do business with. He was pretty much cleaned out, I was able to get some 100 oz Silver bricks but all the good stuff was gone. No gold or Silver Eagles. The 20 minutes while I was in the store 3 people came by that wanted to buy some smaller amounts of PM but were turned away due to a lack of inventory.
The drop in price has led to a buying frenzing instead of panic selling. That goes to show how low confidence in our financial system has sunk. The only thing backing our money is confidence and that is in increasingly short supply.
Get physical while you can — you know central banks are doing it!
I love the “gold always goes up” logic in the following article. It works like this:
- Gold crashed in spring 2006, but subsequently tripled in value. Therefore gold prices are sure to always go up after they crash. Never mind Operation Twist.
And as to the last rhetorical question Mr Engstrom raises, my answer is that I’m sure central banks strive to buy low and sell high, just like the rest of us. But they have the advantage of being able to print money to buy more when the price is right, and to trade their gold for paper when the price of gold gets too high, thereby driving down the price to more affordable levels (I’m not suggesting this is what is happening; this is simply a hypothetical scenario).
Bye Bye Stocks - Bye Bye Gold - or - Buy Buy Precious Metals?
By David Engstrom | September 26, 2011 3:46 PM EDT
As America wakes, my phone, my email and my texts all started buzzing, ringing and dinging. It was like standing in the middle of a casino. Why? It’s simple! Everyone wants to know what’s going on with the markets and specifically, precious metals. One reader commented on my last article, Is Gold Rally Losing Steam or Building Pressure? and asked, “what do you say now?”
Let me first say, enjoy the panic.
…
The last time we saw a decline in gold prices of this magnitude was during the period between May 11, 2006 and June 14, 2006. Here, we witnessed a 23% decline in the gold price from $720 an ounce down to $555. I remember clearly the comments. “The gold rally is over.” Even at today’s levels, the gold price is nearly 3 times that. I did not believe the gold rally was ending then and I don’t believe it is ending now. I just don’t see a widespread change in the world financial landscape to suggest any crisis is over.
Also contributing to this sell-off is another round of hikes to margin requirements on gold contracts. Such moves in the past have been shown to have a temporary effect, not really deterring investors from investing. As I commented in a prior article, I doubt central banks are concerned about margin requirements on gold contracts when physical gold is what they are buying.
Of late, central bank gold buying has been considered a major factor in the rise of gold prices, so, naturally, one would wonder if central bank selling is now causing prices to dip. According to a recent zerohedge com article, there is no evidence of central bank selling. That said, it would not be surprising to see this recent price action spark another round of buying. I don’t think central bank policies shift into reverse in a matter of a few days. If central banks have become net buyers of gold, and they have, it is because of their long-term outlook for the global economy. The world is not crashing one day and soaring the next. Do you really think central banks, who printed money to buy gold are going to turn around and buy back printed money with gold? I mean, I’m just thinkin’ out loud here.
…
The trouble for me is the astronomical amount of credit sloshing around. Gold, oil, land, corn, all these things have value, but the prices are distorted by people playing with lots of borrowed money. I can’t compete with them. The best I can do is try to play where they aren’t.
On opening day of Trout, I go out on the lake and fish for bass. After the mania passes, then I’ll fish for trout.
So you’re buying houses now?
“The trouble for me is the astronomical amount of credit sloshing around. Gold, oil, land, corn, all these things have value, but the prices are distorted by people playing with lots of borrowed money. I can’t compete with them. The best I can do is try to play where they aren’t.”
Amen. We all know it can’t go on, but it does. I’m just trying to figure out how to position myself when it stops. It’s sort of like trying to stay in a game of musical chairs, but with dire consequences.
ditto
U.S. to lower the size of mortgage it will guarantee
By Alejandro Lazo, Los Angeles Times
September 26, 2011, 6:02 p.m.
“This is just going to kill us,” said Beth L. Peerce, president of the California Assn. of Realtors. “You don’t want the real estate market to get any worse than it is, and it surprises me that our congressmen and senators don’t understand that.”
Syd Leibovitch, president of Rodeo Realty in Beverly Hills, said many deals by his brokers involve loans done at the highest amount allowed under the old limits.
“It is not going to be good,” Leibovitch said. “The majority of our deals are 729-FHA loans because they are the easiest to qualify.”
Sen. Dianne Feinstein (D-Calif.) co-sponsored a bill in early August that would allow the higher limits to stay in place for an additional two years. The real estate and mortgage industries also have been lobbying hard to keep those limits.
http://www.latimes.com/business/la-fi-loan-limits-20110927,0,7797548.story - -
“The majority of our deals are 729-FHA loans because they are the easiest to qualify.”
These loans were designed for first time home buyers who needed a little boost to buy a starter home.
Now they have become the “easy” loans for anyone who wants to get a $750,000+ loan to buy a house.
All government programs grow and grow until they become a mockery of what they were once designed to do…
“All government programs grow and grow until they become a mockery of what they were once designed to do…”
They do indeed tend to, thanks to our corrupt system of lobbying and campaign funding- which greatly favors the rich and powerful.
“These loans were designed for first time home buyers who needed a little boost to buy a starter home.”
So sad how distorted this has all become. And nobody seems to be able to connect the dots..
Make 750K loans easy to get -> House prices go up dramatically
Not all that difficult, is it?
750K means that the buyers are making 250-300K a year. These really the folks that we want to subsidize?
Did they really say “starter home?” Really?! Those spoiled little…
Starter homes don’t effin cost over half a million dollars.
Talk about unclear on the concept. Wow.
No, no, that is the natural level of home prices. It’s the guy making 40K a year we need to help. If we don’t keep these loans coming, he won’t ever be able to buy a house.
(and we can’t make our commissions and Wall Street can’t make a bonanza swapping bad debt for cash from the government).
This is just going to kill us,”
BOOO FAWKIN HOO. You pieces of pandering sanctimonious $hit deserve to die anyways.
““It is not going to be good,” Leibovitch said. “The majority of our deals are 729-FHA loans because they are the easiest to qualify.”
If they can afford the cost of the property they can afford to bring the required amount of cash to the closing. If not, they can’t afford to buy and/or the property is over priced.
I can’t understand why people just don’t get this concept. The fact that if a private lender won’t handle this kind of loan, why should the government? Risk here is mispriced badly.
“The fact that if a private lender won’t handle this kind of loan, why should the government?”
Where have you been? Socialize the risk and privitize the profit (bad-mouthing the evil regulators the entire time) has been the mantra for decades. If you don’t believe me, ask yourself why UPS and Fedex don’t deliver first-class mail for 44 cents.
Actually, FedEx and UPS are not legally permitted to deliver first class mail. The USPS is only allowed to deliver first class (letters).
A few years back the USPS got wind that in NYC (Manhattan) several office buildings (some just across the street from each other) were using FedEx to deliver letters. They raised hell about it and threaten legal action.
Syd Leibovitch, president of Rodeo Realty in Beverly Hills, said many deals by his brokers involve loans done at the highest amount allowed under the old limits.
“It is not going to be good,” Leibovitch said. “The majority of our deals are 729-FHA loans because they are the easiest to qualify.”
are these buyers rich ? we always try to define rich so just wondering ??
“are these buyers rich ? we always try to define rich so just wondering ??”
No, they’re not rich. But we certainly don’t need to be handing out below market rate loans to people in this category (250K+ yearly income). And taking that risk on the government books. My knife cuts both ways; I’m all for lower taxes on high income earners, but, at the same time, against handouts like this to people making 5-10X the median salary.
Beth, 400K for a 50 yo beat up ranch style house, has already killed you.
I don’t understand this….
The empty shack I made an offer on in Oct2010 is still sitting for sale, unsold. It’s overpriced by roughly 40-50%, and rising. The deeded owner declared banktruptcy in Nov2010 and is still the deeded owner(verified yesterday). He hasn’t made a payment on it since 2008, lives roughly 2000 miles away. He owes $250k(asking price) to lienholder (BofA), they haven’t foreclosed, deeded owner doesn’t care and has since gone on with his life, BofA winterized it last year, etc.
The place sits with a 4 sale sign…… no interest due to the price…. the lien holder appears indifferent….. the owner has no stake as the bankruptcy court hit the reset button for him.
How does one give this process a shove? How does one induce the lienholder to foreclose?
The RAL clan is back into buying mode now that the Realtor Fraud Season is over.
Anyone paying the property taxes?
Banana….. I don’t know. From what I can tell, the home-debtors name is on the tax rolls but there is no reason why he would pay them. Why would he? He has no stake in the outcome.
Good question though. I shall follow up on that.
Update-
Bankrupt debtor is still named as owner on tax roll and the 2010 school/county taxes were paid. Why in hell would HE pay them?
Why in hell would HE pay them?
RMS answered it in the post below.
Good question. The county should lien sale the property to give it a clear title, and sell it for back taxes on the court house steps. Forty-five days, sold!
Update2- Deeded owner hasn’t made mortgage payment since 2008(nor taxes). BofA is paying the taxes even though they haven’t foreclosed, thus not the legal owner. House has been empty since early 2010. Sitting with a 4 sayle sign on it at a grossly inflated price with no buyer, no interest according to the Lying REaltor.
Of course the bank is paying the taxes. That’s the modest place holder fee for the asset staying on their books as all good. This is necessary for the bank managers to get their bonus. It’s all encouraged by the Federal Government. You should look at houses that are outside the system (no debt involved).
The place sits with a 4 sale sign…… no interest due to the price…. the lien holder appears indifferent….. the owner has no stake as the bankruptcy court hit the reset button for him.
We have so many of those around here. They should be priced at at least 1/2 of what they’re listing at they’re in such horrible shape. Some really are rip down to the studs situations.
They appear to be homes of older boomers who’ve either recently passed away or moved to assisted living situations. The homes were once beautiful and still appear to be so with the quick glance of a drive by, but haven’t been updated in multiple decades.
I always wonder why the heck these people stayed in a town where the avg tax bill is $9k to $12k (although as seniors in NY theirs are usually lower) when they could have moved over one town and actually been able maintain their home properly. And with many I wonder how supposed famiy members that supposedly are insisting the price stay so high (I think it may really be banks) could let their parents live in such squalor. I guess I’ve come up w/the idea that the hero generation really were the first to cling to image vs quality. Besides there’s nothing as stubborn against change as a senior.
The facade tradition goes way back.
I despise facade, in many contexts: social, construction, furniture, etc etc.
Why can’t things be allowed to look like what they really are?
Then we’d have to give up on being better than those other people.
The house I bid on a couple years ago is now on year 5 w/o being sold.
Initial price 1,000,000
I offerred 450 when they were asking 599
Now they are offering 499 and still no takers.
My guess is they will sell for 350-400 and someone will tear it down in a year or two.
Owner has been paying 12-14k a year in taxes on it I think.
RAL
Buy ten common shares of Bank of America. Attend their annual meeting and ask your question. Make sure you have a friendly reporter on hand. And a congressman. Submit your question in advance. They will defer you. Follow up thru the mails, giving a local financial paper a copy of all of your letters (and the congressman), adding other “found” like properties.
Since they are not likely to respond write on each subsequent letter “fifth request” etc. You are trying to show their arrogance which you can distribute to all other media via blanket email.
Go to the library and get a copy of the city desk email address of every major financial institution in the USA and send your email to them - often.
Wear a suit and a tie and don’t call them a li– until we all can !
Best of luck in getting that house - 75% off !
Thank you for suggestions Patrick. Oddly I was thinking about appealing to our house representative but I don’t think they have much leverage as SkankOfAmerica isn’t a govt. entity(even though these organizations seem to be the PTB).
I’m not asking for 75% off by the way. The house is worth somewhere in the neighborhood of 110-130k. I offered 115k a year ago. It is what it is. If there were a buyer at the $250k asking price, it would have been sold. It was priced at $224k when I made the offer. We like the place alot but it’s plain old overpriced.
RAL
“It was priced at $224k when I made the offer. We like the place alot but it’s plain old overpriced”
Next summer I want to buy a home in Orlanda (Buenevista Lakes area) and will be following your efforts closely.
I think whatever the price is today, it is overpriced and will be lower next year !
By the way, my feelings about REBs is not a good one either. I had one rip me this year on a sale in Canada.
In the first year or two I was on this blog, 2006-7, I remember posting this home to the blog. It had only been built a year or two before and was already being put up for sale. I checked the tax rolls and no one new has owned the home since. It may not have been on the market this whole time. I don’t usually stay on top of this price point.
http://cnyhomes.com/Listing/Search/info.cgi?mlnum=S252764
I believe the original listing price was in the $600ks. Guess they can’t afford the loss to lower to the price that is going to move that baby in a community where the major employer (foreign owned ImBev, formerly Anheuser Busch) keeps using layoff threats as leverage against the town to lower its corporate tax bill.
The only out for the debtor is a pile of tinder and a wooden match. I wouldn’t own it if you gave it to me. Talk about getting bled dry by carrying costs.
Love the Escher-like staircase.
So cozy!
Just wanted to mention that the state of NY combined w/some Canadian tourist funding brought Boldt Castle up to what you see in the photos. George Boldt never finished it.
Our tourism industry has contrived a nice little myth that the house was built as a present to his wife and he stopped building it when she abruptly died and he was left brokenhearted.
But at least one of the local historians says it wasn’t true at all and she hated living there. In fact he hinted her death may have been a suicide she was so miserable w/the lonely life of trying to keep up appearances w/visitors at the Castle while her husband was always away travelling. It was, after all, just a keeping up w/the Joneses from the Waldorf Astoria crowd. George was the propreitor of the WAH at that time.
Well NY tourism is smart enough to know people aren’t as likely to drive so far out of their way to view an over the top castle that drove the lady of the house mad.
Funny, Castle in the Clouds, a much smaller financial adventure in NH was built by a Malden, MA shoe industrialist who once owned the largest shoe company in the world. He sold the company, started building his castle in the ledges of Moultonborough, NH, divorced his old wife and married a new hottie. Within just a few years he’d lost all his money and was only allowed to rent back after foreclosure by the goodness of the townspeople (or maybe because no one else wanted it) His 2nd wife didn’t stay around for long. CinC is not that large of a castle but the remoteness makes the thought of tooling around the grounds by oneself quite tragic to contemplate.
Well NY tourism is smart enough to know people aren’t as likely to drive so far out of their way to view an over the top castle that drove the lady of the house mad.
But that’s a much better story.
I REALLY hate the faux traditional style.
5000 sqft. 5-effin-thousand sqft. What the hell do you DO with all that space?
RAL is right, the carrying cost alone is strictly for the corporate tax write-off set.
I am sure they are glad to help out a struggling 48-year old Greek pensioner who’s worked for only 20 years and earns twice what they do…
Almost reminds me of the bailouts that will be coming soon for the various public unions here in America…
—————————–
(British) Families face £5,000 bill to bail out debt-stricken Euro nations
Daily Mail | 27th September 2011 | Hugo Duncan
Britain could be asked to find £115billion to rescue debt-stricken countries – nearly £5,000 per household.
Fears were growing last night that the International Monetary Fund might not have enough cash for a global bailout of struggling economies.
Its crisis fund may need to grow ten-fold – meaning a huge increase in contributions from the UK.
Christine Lagarde, the managing director of the IMF, said the current war chest of around £250billion ‘pales in comparison with the potential financing needs of vulnerable countries’ and needs to be expanded to deal with ‘worst-case scenarios’.
Don’t forget that something like 60% of the IMF is funded by the US.
Get ready for some more money printing folks. More bailouts to come.
“Britain could be asked to find £115billion to rescue debt-stricken countries – nearly £5,000 per household.”
Gotta love the word play here. How about…Britain could be asked to find £115billion to rescue London’s Investment Banks that issued risky loans to debt-stricken countries.
ding, ding, ding! We have a winner!
Joe6Ouzo’s pension is going down the crapper regardless.
As W.C Fields would say, “Give the man a kewpie doll!”
Politics get interesting when the anti-discrimination group is the Republican faction…
‘Inherently racist’ bake sale by UC Berkeley Republicans set for Tuesday
By Holly Yan, CNN
September 27, 2011 — Updated 1218 GMT (2018 HKT)
(CNN) — An open plaza at the University of California Berkeley will be an epicenter Tuesday in the debate over affirmative action and college admissions.
On one side, Berkeley College Republicans will host their “Increase Diversity Bake Sale” — a satirical event that will charge customers different prices based on race and gender.
Yards away, Berkeley’s student government — the Associated Students of the University of California — will host a phone bank in support of SB 185, legislation that would allow California universities to consider race, gender, ethnicity and national origin during the admissions process.
Neither side is backing down.
“We’re full speed ahead,” Berkeley College Republicans President Shawn Lewis said late Monday night. In light of recent threats made against supporters of the group, college Republicans from several other California universities have volunteered to come help staff the event, Lewis said.
…
The day they apply strict affirmative action quotas to the NBA, NHL and NFL will be the day it ends…
Too bad most people aren’t sufficiently logical to see the parallel.
LOL…Good one 2banana…
“The day they apply strict affirmative action quotas to the NBA, NHL and NFL will be the day it ends…”
Who care about race—but I do think that short people should have just as much right to play in the NBA as others!
In fact, we should really handicap those who are too fast, too tall, etc; perhaps we should sew weights into their uniforms, or put them in their shoes?
Most obviously, the NBA, NHL and NFL discriminate against WOMEN.
Are you referencing “Harrison Bergeron”? I approve.
Yours,
Diana Moon Glampers
“Are you referencing “Harrison Bergeron”?”
Yep, sure was…
Glad you caught the reference, Ms. Moon Glampers.
I read that as a teen, and the imagery burrowed its way deep into my brain.
they always can become jockeys at the horse racing
“During the sale, scheduled from 10 a.m. to 2 p.m. local time, baked goods will be sold to white men for $2, Asian men for $1.50, Latino men for $1, black men for 75 cents and Native American men for 25 cents. All women will get 25 cents off those prices.”
Ah, ya beat me to it, CIBT. I read about that last night. Too funny. What’s not funny is the reaction from the “other side”. “Diversity, or we’ll kill you”. Or at least maim you a little.
Freebie if you’re a squaw!
“Freebie if you’re a squaw!”
An enterprising “squaw” could set up shop next door to the Republicans, buy up all the Republicans inventory at the going price for squaws (free), then resell the product for a nifty profit.
It suprprises me that those opposed to the Republican’s bake sale do not see this opportunity and do not take full advantage of it.
“It suprprises me that those opposed to the Republican’s bake sale do not see this opportunity and do not take full advantage of it.”
It surprised John Nash too. Humans are not rational operators.
“Diversity, or we’ll kill you” I remember the Rally Against Hate back in college: a bunch of “best and brightest” yelling that they would no longer tolerate intolerance. Priceless.
A really enterprising squaw could buy up all of the muffins and hire an Asian Indian to sell them for her.
How much will Warren Buffet have to pay for a muffin?
$2?
Republicans = bad business men. Where I live, individual cookies cost in the neighborhood of $2 (excepting batches of mega mass produced Chips a Hoy and the like at the grocery store).
So they are selling their cookies at a pretty substantial discount, even at white guy prices if the CA/Berkley cost of living calculations are included. White guy prices with the Berkley markup should be like $2.25 - $2.50 for the cookie business to be profitable and sustainable.
If I was a black or native american guy, I’d buy all their merchandise, set up shop around the corner and make underwear gnomes kinda profit!
“Chips a Hoy”
Is that the Mexican brand?
And all this time I thought it was a pirate snack.
Underwear gnomes?
I had to look this up. Love it.
I’ll bet they sell a lot more 2 dollar baked goods sold and almost no goods sold for 1 dollar or less.
Just a hunch
Not even a good parallel. The muffin pricing is a parallel of financial aid, not admissions.
And most financial aid is determined by income level. Only the very poor get government grants.
What I have seen are a lot of private sector scholarships that target “protected groups”, but these are privately funded scholarships. AFAIK Pell grants are color blind.
And there you have it — the reason why the Republican Party has a major problem. The current generation of college student is, to say the least, not attracted to them. The name-calling has a real turnoff factor.
To be honest, I’ll say that the Democratic Party has the same problem. Call it the “your father’s Oldsmobile” problem.
Methinks that we’re going to be seeing some new parties soon.
Green. The Green Party.
Seriously. They’re established. Their once socialist agenda has become very moderate and they look positively, moderately sane compared to all the other alternatives.
Here in Tucson, the hardcore Green Party people have a real problem. And that is that they are well to the north of 40. Heck, they make 53-year-old Slim look youthful.
In a town with a large university — and a huge enrollment of late teens and early twenties types, that’s not good.
Once the Greens figure out how to appeal to the college crowd, they’ll take off.
My guess is that a non-Nader candidate would go a long way in that regard. He peaked before they were born.
My guess is that a non-Nader candidate would go a long way in that regard. He peaked before they were born.
Agreed.
At the risk of repeating my getting elderly self, I did a photo shoot of a Ralph Nader press conference back in 1979. I worked for an organization that had an annual conference, and he was our keynote speaker.
Any-hoo, while I was being the potted plant on the floor with the camera, I was struck by how gray-haired he’d become. Back then, that was a real sign of over-the-hill status.
So, yes, I’ll agree with the idea of Nader peaking before the current crop of college kids were even born.
“The name-calling has a real turnoff factor.”
So you think name calling is strictly a GOP characteristic?
The GnOP is losing it’s fraudulent grip on the North American church too. We’ve shut down the hate pandering in our own church and the nutjobs are very quiet now….. like mice.
Idiocracy. We is there.
Both groups have lost their minds.
the women Engineers around here are ultra competative about College for their kids ( maybe the men are too but they don’t talk about it)
They pay 5K to a company that coaches the seniors in High school so they can get in at Stanford or UCLA.
50k a year to go to Stanford plus crazy high scores on the SAT and whatever other tests are out there ? 4.5 GPA or above mandatory.
With all that money I guess these colleges feel guilty so they give small parts of it away to certain poor “groups” that can’t pay the 5K and whatever else ( private school, private tudors)
My brother keeps telling me I need to hire coaches for my kids like algebra in 5th grade or they won’t keep up. He works at Country wide and his co-workers do this.
kids are expensive if you take care of them and not let the state do it for you. Ever wonder why the free lunch kids are so fat ??
whats in that government cheese anyway ???
When my mother went to college in the 40s, algebra was strictly a college level subject.
Stock futures ride the wave of Europe hope
By Rodrigo Campos
NEW YORK | Tue Sep 27, 2011 8:07am EDT
(Reuters) - Stock index futures were lifted on Tuesday by a wave of hope that euro zone officials were working to add measures to cut Greece’s debt and shore up the region’s banks.
Global equities rose, led by European stocks that gained 3.3 percent, with banking stocks up 4.7 percent early Tuesday and more than 8 percent in the past two days.
“The market is beginning to get the feeling that finally European lawmakers are moving out of their paralysis,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
…
Suck ‘em in one day, shake ‘em out a few days later. The beat goes on.
Churn baby Churn!
Disco inferno!
Churn baby churn!
Hundreds injured in Shanghai subway crash
One train rear-ends another on one of city’s newest metro lines
SHANGHAI — A Shanghai subway train rear-ended another Tuesday, injuring more than 210 people in the latest trouble for the rapidly expanded transportation system in China’s commercial center.
…
Made in China!
And, gives new meaning to the term “RED China”.
+1 LOL!
The trains are gay?
Debt debate coverage lacked economists, study says
This summer’s toxic debt debate was all about politics, not economics, at least viewed through the sphere of cable news.
During a month of political brinksmanship over raising the U.S. debt ceiling, less than 5 percent of guests on leading cable news programs were economists, according to a study released late Wednesday.
Of 1,258 guest appearances on MSNBC, CNN and Fox News during discussions of the debt ceiling, just 52 of those appearances — or 4.1 percent — were by someone who could be deemed an economic expert, according to the left-leaning nonprofit Media Matters for America. The definition of an economist used for the research was either someone with an advanced economics degree, who taught college-level economics or had worked as a government economist.
Rather than economists, each of the big three cable news nets brought in people well-versed in politics. CNN, Fox and MSNBC each filled about 47 percent of their guest slots during the period with administration officials, party officials and strategists.
An August study suggested that about 80 percent of congressional members lack any economic education.
…
Or common sense.
Which, as we all ‘know’, trumps edycayshun anyway. Right, know-nothings?
REPORT: Economists Shut Out Of Debt-Ceiling Debate
Only 4.1 Percent Of Cable Guests Were Actual Economists
September 21, 2011 4:04 pm ET
A Media Matters analysis of evening cable news programs reveals that just 4.1 percent of guests who discussed the debt-ceiling debate were actual economists. This lack of credible economic experts helped create a media environment in which political and media figures could spread misinformation.
On August 2, President Obama signed the Budget Control Act, a controversial compromise bill that raised the nation’s debt ceiling in order to avoid default while also cutting government spending by hundreds of billions of dollars over the next decade.
Many economists criticized the deal, saying that budget cuts would only weaken the economy and further drive up unemployment. But their voices were largely absent from CNN’s, Fox News’, and MSNBC’s coverage of the debt-ceiling negotiations.
…
Sept. 27, 2011, 12:01 a.m. EDT
How one Hawaiian paradise became a ghost town
Sales slow, but developers see long-term value, plan to ride out cycle
By Shawn Langlois, MarketWatch
SAN FRANCISCO (MarketWatch) — Ambling into the warm embrace of Kukui’ula’s clubhouse on Kauai’s pristine south shore is to catch a fleeting glimpse into how the other half lives. Or, more accurately, the other 0.1%.
But with the global economy in turmoil and real-estate wounds still festering across the country, there’s trouble in paradise.
“We broke ground on the club in 2008 and a month later, Lehman Brothers went down,” said Brent Herrington, Kukui’ula president.
“There was a moment there where it felt like the world was going to end,” he said. “But we came together as a partnership and decided to push ahead.”
Without a doubt, the expansive 1,000-acre development cutting a vast swath of land across Poipu is mesmerizing.
A golf course with sweeping ocean views, a world-class spa, a cascade of pools, a stunning $100-million clubhouse. The ice cubes even match the drink order. What the customer wants, the customer gets.
The draw was compelling enough to attract New Orleans Saints quarterback and Super Bowl MVP Drew Brees to the club’s early membership ranks. His locker is prominently displayed inside the men’s locker room. The staff quips, “Would you like to use Mr. Brees’s bench?”
Then why does the resort feel like a vacant city-scape scene out of a zombie flick? While every corner of the property is equipped for a good time, there’s hardly anyone there to enjoy it. At least for now.
One sale in a year-and-a-half
“I’m still a big believer in the property, and the people that bought for their own use are very happy,” said Becky Supon, Pacific Ocean Properties real-estate agent and former saleswoman at Kukui’ula. “The ones looking to flip for profit, of course, aren’t happy.”
…
The clubhouse at Kukui’ula, an ocean-view golf course and residential real-estate development on Kauai, Hawaii.
What happened to the rich foreigners?
Everyone wants to cater to the rich foreigners, problem is, there’s only so many of them.
This would only be news if a salesperson DID NOT ’see’ the value of what they were selling.
90 years ago there was another playground for the wealthy, specifically the Wall Street financiers. It was Alexandria Bay in the 1000 Islands and there was even a train line that took them directly from NYC to the Islands. Boldt Castle was still under construction when that slowdown hit. The building came to an abrupt stop and it was never to be completed. Family members of that and other wealthy homes like that of the Singer family eventually gave the properties to the state to escape the taxes on their families’ deteriorating hulks.
If you watch the slideshow check out the boathouse, larger than most McMansions built today.
http://www.boldtcastle.com/visitorinfo/
Having grown up near Yellowstone Park, I was surprised when I learned that it was originally a playground for the same set. Hence the nice big old lodges in prime locations that would never be built now.
I recently visited Glacier NP and stayed in 100-year-old lodges inside the park that were built to attract the wealthy: Many Glacier Lodge by the Great Northern Railway, and Lake McDonald Lodge by an individual family catering to hunters .
Then there are places like Aspen, where half the private homes are so large they ought to be hotels.
The wealthy of each generation know where to find the great places of natural beauty that they can adorn with their ginormous palaces. I wonder how long it will be until today’s giant homes become white elephants?
Then there are places like Aspen, where half the private homes are so large they ought to be hotels.
Same thing’s true in Vail, CO. Recall that former President Gerald Ford and his wife, Betty, lived there for many years.
But, as they got older, they found the high altitude harder to handle. To the point where the former President needed supplemental oxygen.
So, they decided to spend all of their time in Palm Springs, CA. And ISTR reading that the Vail property is now for sale.
“Having grown up near Yellowstone Park, I was surprised when I learned that it was originally a playground for the same set. ”
Back in the robber baron days ordinary people didn’t get bennies like paid time off. Only the wealthy went on vacations.
Part of my confusion was because now the Park Service is very strict about what goes on in the park…to the point that locals frequently avoid the park when possible. There are plenty of other mountain ranges that are a lot more local-friendly. It’s hard to imagine that at one time the park service catered to people rather than making everything difficult.
RAL’s have turned their radar back on and looking at housing now that the Realtor Fraud Season is over.
Re-acquainted by phone with our Lying Realtor yesterday. Another defaulted property he suggested last winter finally was foreclosed on. Guess what? The owner(TrustCo) foreclosed and turned it over to a different Lying Realtor and the house *never made it to MLS* yet it was sold.
The corruption of the Realtor Crime Syndicate is stunning.
“The corruption of the Realtor Crime Syndicate is stunning.”
The NAR gets a great investment return in lobbying congress.
One sale in a year and a half:
http://www.marketwatch.com/story/real-estate-slump-hits-luxury-hawaiian-resort-2011-09-27?link=MW_popular
From: lying realtor
To: RAL
Sent:
Subject: house
Wanted to give you info about the property. The current owners built a barn and put up nice fencing. The seller took in resue horses, old, sick or blind. Unfortunately, the husband lost his job and has to relocate. They were not happy to have to leave the place, they love it. I am hoping to sell it or rent it for them. Harsh words on your part…I only wish them well.
Lots of manure - both literally and figuratively…
“Harsh words on your part…”
Enquiring minds want to know: what were your harsh words??
I don’t recall but they weren’t remotely harsh. Factual? Yes. Read the rest of the emails I’ve posted below in sequence. I was direct but not harsh or disrespectful.
Date: Fri, 12 Aug 2011
From: RAL
Subject: Re: house
To: Lyingrealtor
LR,
This isn’t about you or me. This is about a rapidly depreciating asset that is grossly overpriced. There isn’t a buyer at $375k. There isn’t a buyer at $275k. There might be a buyer at $225k maximum and that will require a short sale. Your clients will be bled dry from monthly carrying costs while the market continues to unwind, head into the off season and the buyer pool shrinks. They go deeper underwater with each passing month. You know it and so do I so demonstrate your empathy and have a frank, *honest* conversation with them. Their mistake was made a year ago when they bought. Your not doing them any favors by encouraging them to make more mistakes.
When you’re ready for a short, mail me.
Her reply will piss you off…. red meat.
From: lying realtor
To: RAL
Sent: Friday, August 12, 2011 10:05 AM
Subject: RE: house
Sorry RAL you feel that way. Of course most sellers are willing to take an offer for less than they like, but don’t know where your experience comes from. I will settle Monday on a home priced in the $320,000 and on Wednesday, one priced in the mid $400,000. Both of these are great buys that would have sold for much more in a better market, but you are mistaken about what buyers can afford and what the market is bringing. This is the worst I have seen the market in the 27+ years I have been in the business. It wasn’t because homes were priced improperly, but because they gave loans to people who really couldn’t afford them. With no doc loans, people were not being truthful about their income nor debts and they purchased higher than they should have. Our government is still giving loans to some people at 100%, giving them down payment loans or subsidizing loan payments. We won’t recover until people are responsible for their own debt. Hopefully you find what you are looking for. LyingRealtor
At least she acknowledges that loans are a problem. The bad part is that she doesn’t mention (in this message) that the loans had the effect of driving up prices, and it will be a long unwinding. If someone is really buying a 320k and 400k home, I hope they’re putting down 20% minimum.
Our government is still giving loans to some people at 100%, giving them down payment loans or subsidizing loan payments.
So you need to get one of these loans and pay the inflated asking price…hint…hint…wink…wink
Everyone is doing it!
“This is the worst I have seen the market in the 27+ years I have been in the business. It wasn’t because homes were priced improperly, but because they gave loans to people who really couldn’t afford them.”
What is the “it” that she’s talking about: the run-up or the crash? That makes a big difference in how I would answer her. Maybe HBB-er Awaiting can answer: Is this meme about the bad loans vs. improper prices one of the lines they give you in script class?
I invite the lying realtor to look at the Zestimate price history for ANY house on Zillow. The run-up is clear as a bell. My only gripe is that Zillow only goes back 10 years.
When I look for a house, I’m going to ask for 2001 pricing plus 15% appreciation. Because that’s what housing should have done. Then I’ll knock of $$ for fix-up.
my response
from: RAL
to: LR
Sent: August 12, 2011
I’m sorry you feel that way. My experience comes from 24 years in the site development and heavy construction business. I know what it costs to build and know what the margins are and if you think that $400k houses are the norm, you’re in for the surprise of your life. And that house will be on the REO roster inside of 18 months. Your empathy for your client is equal to the empathy you had for them when you sold them the rapidly depreciating house.
If your prediction is true, you just need to be patient.
So I noticed this house was reduced from $375k to $370k and resurrected the exchange.
Date: Thu, 22 Sep 2011
From: RAL
Subject: Re: house
To: LyingREaltor
LR,
Chasing the market down with minuscule adjustments is a failed strategy and makes for a painful ride down. Mail me when you’re ready to advise your client to short.
RAL
RAL, your first mistake was not being sufficiently worshipful of the owners’ horse rescue operation.
I mean, come on. Don’t you realize that people who call themselves rescuers are right up there with the saints and all the company of heaven? That, in itself, should be enough to overpay for the property.
OTOH, people who *really* do this kind of work — and here’s a shout out to all the swiftwater rescue teams, back country search and rescue crews, pararescue jumpers, firefighters, etc. — seldom call attention to themselves. They don’t run around shouting that they’re rescuers and expecting other people to kowtow to them.
If anything, they’re pretty modest. They’ll say that they were just doing their jobs. Or relying on their training.
Big difference.
Isn’t she disgustingly sanctimonious?
I would say that the LyingREaltor is indeed sanctimonious. Disgustingly so.
She needs to spend time around real rescuers. The modesty they show would be quite an eye-opener for her.
Demon attacks must be quite frightening.
I guess the near-collapse of Wall Street in Fall 2008 is a fading memory in the minds of would-be U.S. bank reformers?
Dimon’s rhetoric a killer of reasonable bank reform
From Tuesday’s Globe and Mail
Posted on Monday, September 26, 2011 6:58PM EDT
JPMorgan Chase & Co. head Jamie Dimon doesn’t have to be right when he attacks central bankers and their plans for bank reform. He just has to be inflammatory.
Mr. Dimon is yet again on the offensive against those who would rein in bank risk-taking, railing in a meeting with Bank of Canada Governor Mark Carney against the higher capital requirements for banks under the Basel III reform package.
The spat with Mr. Carney came just a few weeks after an interview in which Mr. Dimon called some Basel III requirements “anti-American” and a few months after he ambushed Federal Reserve chairman Ben Bernanke with questions about whether financial sector reforms would curb economic growth.
It’s almost beside the point whether Mr. Dimon’s arguments hold up (though there is evidence that some key ones do not). He is grandstanding for a different audience.
If Mr. Dimon can raise a general alarm among the U.S. populace using incendiary talk of anti-Americanism, he can use U.S. politics to sabotage implementation and supervision of Basel III. The last round of Basel reforms aimed at improving bank stability foundered in the United States, torpedoed by fighting between regulators, intervention from Congress and pressure from bankers seeking exemptions.
…
He’s got a right to say whatever he wants.
If the American people are stupid enough to believe it, and then vote for people who support him, then they deserve what they get (unfortunately I get it along with them).
We have the vote. WE HAVE THE VOTE. Clean out Congress in 2012. It’s stale in there. Blow it out and let some fresh air in.
My concern however is that we won’t get enough good people to stand for election. More opportunistic slimeballs singing mom and apple pie.
But at least they’ll be different opportunistic slimeballs.
“We have the vote. WE HAVE THE VOTE. Clean out Congress in 2012. It’s stale in there. Blow it out and let some fresh air in.”
Sure you do. Part of the Republican strategy to rule the country on behalf of the rich is to wipe out the public employee unions and capture the Wall Street money that used to go to the Democrats. So if you vote out Democrats and put in Republicans, you’ll be voting for the party that guts regulations and lets more of the raping of the country occur.
Or should I say the OTHER party that allows this. Democrats are now making promises to get that Wall Street money back.
Democrats are now making promises to get that Wall Street money back.
I pity the fool that gets in their way…
Democrats are now making promises to get that Wall Street money back.
With their great record of following through on promises (remember 2006 and getting us out of iraq?), I’m sure they’ll get the taxpayers’ money back ASAP.
Oh…they meant they were going to get it back for US? I took that all wrong…
I took that all wrong…
upon re-reading, I think *I* took it wrong. Silly me to think someone might be thinking of working on behalf of the taxpayers…
My guess is not only is he saying it with his mouth but he is probably financing a million talking heads and organizations to do the same. People will hear this message over and over again and just like those that say the rich should never be taxed will decide that yes it is unamerican to regulate banks.
Two names: “Meg Whitman”, “Carly Fiorina”.
Whitman especially: Spent 140 million bucks and still lost to a small potatoes campaign. http://blogs.wsj.com/washwire/2010/11/03/meg-whitman-concedes-in-california-race/
There’s no cure for stupid. If the American people fall for the BS, there’s no cure for that.
“A society cannot be ignorant and free” - Jefferson. It’s why you can’t impose democracy on countries that aren’t ready for it. I don’t know if we’re heading towards that, or if we’re there. Americans have traditionally been smart and independent-minded, on the whole.
We’ll see.
Jamie just can’t get over being a sour grapes bedwetter about the Bear Stearns implosion interrupting his birthday dinner on March 13, 2008.
Could this potentially bring about the end of the liar-accounting era?
Accounting Firms Face ‘Big Impact’ From Draft EU Restrictions
By Ben Moshinsky and Jim Brunsden - Sep 27, 2011 5:40 AM PT
Large auditing firms face restrictions on offering consulting services and may be forced to share work with smaller rivals under proposals from the European Commission.
Companies that are publicly traded “shall appoint at least two statutory auditors” under the measures, which are designed to improve trust in “the veracity of the financial statement,” according to a draft version of the proposals from the European Union’s executive arm obtained by Bloomberg News.
“Many of these ideas aren’t new but we’ve never seen proposals that include all of these ideas at the same time,” Michael Izza, the chief executive of the Institute of Chartered Accountants of England and Wales, said in a telephone interview today. “They’ve been aggregated in one place and that’s where you get the big impact.”
…
It’s chillingly ghoulish to laugh at them while their still pulling bodies out of the wreckage.
From late yesterday
A shot over the bow of democracy.
http://economix.blogs.nytimes.com/2011/09/26/delegating-economic-policy-to-the-technocrats-and-away-from-democracy/
The elites see things getting messy, people getting so angry they stop watching American Idol and turn on their brain. Thus the elites want to take more control.
You can bet tax and trade policy under hand picked unaccountable elites would be the last dagger in the back of the middle class in this country. Of course these unaccountable legislative bodies would need private security contractors to protect them in case of “terrorist attack”
It was only a question of time.
Watching some of the footage of the Occupy Wall Street arrests, I wondered how long before that was going to happen. Almost a 5…4….3……2 …situation.
The crowd was trying to work on the police. Reminding them that their pensions were at risk and that they should be on the other side of the dividers. The elite are obviously watching how this is going and listening to what the crowds are saying. They must definitely be working on a plan for when their security forces start turning. I imagine none of us freedom lovers are going to be very happy with what they come up with.
From the Occupy Wall Street website - September 26 update, with boldface added by Yours Truly:
This was an attempt to make us weak, this was an attempt to destroy or derail our message, our conversation. It has not succeeded. We have grown, we will grow. Today we received unconfirmed reports that over one hundred blue collar police refused to come into work in solidarity with our movement. These numbers will grow. We are the 99 percent. You will not silence us.
If you noticed the more brutal acts, on the protesters, were perpetrated by the Lieutenants and above. One walked up to a young woman pulled out his OC spray and shot her in the face. He then turned and walked away. I believe the supervisors were told to put an end to this and tried to lead by example. You don’t spray anyone with OC spray and walk away, not without providing decontamination. It cannot be in the NYPD use of force SOP and yet NYPD brass is exonerating the superiors, even after watching the video. UNBELIEVABLE.
You don’t spray anyone with OC spray and walk away, not without providing decontamination. It cannot be in the NYPD use of force SOP and yet NYPD brass is exonerating the superiors, even after watching the video.
They may be exonerating them now, but just wait until they start hearing from attorneys representing the injured protestors. And I’ll betcha money that there will be more than a few attorneys who’d be willing to do these cases pro bono.
ISTR NYPD having to pay quite the settlement in the case of a critical mass bike rider who was pushed to the ground by a cop. Rider wasn’t doing anything to justify such treatment, and oh, was that incident caught on video and circulated around the world.
“They must definitely be working on a plan for when their security forces start turning. I imagine none of us freedom lovers are going to be very happy with what they come up with”
Foreign mercenaries?
Hey, at least they won’t be “union goons and thugs” so it’s all good.
“They must definitely be working on a plan for when their security forces start turning. I imagine none of us freedom lovers are going to be very happy with what they come up with”
If it turns out to be a police riot — such as the one that happened outside the 1968 Democratic Convention in Chicago — expect the movement to get even bigger in a hurry.
If it turns out to be a police riot — such as the one that happened outside the 1968 Democratic Convention in Chicago — expect the movement to get even bigger in a hurry.
Yes - I can see it now. Police, firemen and lifeguards rioting for their $200,000/year tax free pensions…
This will surely invigorate the public at large to join the cause.
Yes - I can see it now. Police, firemen and lifeguards rioting for their $200,000/year tax free pensions…
What percentage of cops an firefighters get that kind of deal? Very few, I would guess.
According to careertoolkits.com the average cop nationwide was paid $47,500 in 2006. Hardly a princely sum.
Hey Slim,
What is the sound of one banana-skinned drum banging?
Yes - I can see it now. Police, firemen and lifeguards rioting for their $200,000/year tax free pensions…
You totally miss the point 2nd banana. It’s more like “The enemy of my enemy is my friend” that will get the elite in the end.
It’s more like “The enemy of my enemy is my friend” that will get the elite in the end.
More poetry.
careertoolkits.com is way off. The system is gamed with overtime, I would say the average is closer to $75k and many making over $100k, then that for life in their pension + double dipping of course.
I love it. You post the numbers with a reference and then people challenge them with no evidence.
Here is some hard data from the BLS
http://www.bls.gov/oes/current/oes333051.htm
In, take a look at those numbers.. That is the hourly wage with zero overtime… Even the annual wage listed is the no-overtime wage times 2000 hrs/yr. from the site:
Annual wages have been calculated by multiplying the hourly mean wage by a “year-round, full-time” hours figure of 2,080 hours; for those occupations where there is not an hourly mean wage published, the annual wage has been directly calculated from the reported survey data.
Overtime can account for more than 50% of a police officer’s salary… They have the cops work 2-12 hour shifts per day instead of 3-8 and pay 4 hrs overtime per shift. My old roommate was LAPD.. I could tell you stories about how they gamed the system regularly.
I’m starting to think 2ban was rif’d from a public entity. Why the obsession with all of it?
“You totally miss the point 2nd banana.”
I don’t think he’s familiar with the 1968 Chicago Democratic Convention police riot. Hint- the police were NOT on the side of the protesters.
Welcome back to the 19th century.
Because the future belongs to Foxconn City
Ethan Harris, head of developed-markets economic research at Bank of America Merrill Lynch
http://www.washingtonpost.com/business/harris-doubts-real-growth-in-us-housing-until-2013/2011/09/26/gIQAZPBmzK_video.html
BAGHDAD (Reuters) - Iraq has signed a contract to buy 18 Lockheed Martin F-16 warplanes to bolster its air force, an adviser to Prime Minister Nuri al-Maliki said on Monday.
The value of the deal was not immediately known, but a senior U.S. military official said recently the offer on the table for the Iraqi government was valued at “roughly $3 billion.”
Well I guess that war in Iraq was worth it, I stand corrected.
One more of these deals and the war will be totally paid for :-).
And here is her response to my “painful ride down” email.
From: LyingREaltor
To: RAL
Sent: Thursday, September 22, 2011
Subject: RE: House
You needn’t bother to continue to send me your nasty grams. If you are interested, make an offer. We are having plenty of activity and if we don’t sell in this market, we have at least 3 couple who want to rent. This market has been hard enough on buyers without people with your attitude taking advanage of people when they are down. Maybe you can find another person to do that with but this is not going to forclosure so don’t wish this on my selller! Shame on you.
LyingRealtor
To which I responded;
From: RAL
To: LyingRealtor
Sent: Friday, September 23, 2011
Subject: RE: House
There is nothing “nasty” or rude about a short sale and you’re taking this all too personal. It’s the reality of things and it will continue as this *is* “the market” and will be for a very very long time. Again, when you’re ready to short, please contact me. There is no sense in your seller defaulting.
RAL
But a short sale IS a form of default.
Some just don’t wake up the reality. it’s hard to say with the little facts we have, but if they do rent the place out the owner might be able to use that money to staunch the bleeding without defaulting. Unless this person has unlimited funds, it won’t be able to go on forever. I think the next year or two will be crucial to people finally learning they can’t hang on to an old economy asset in a new normal economy.
As long as LR’s cashflow is good, he/she won’t tell the seller to do anything that might lower the price.
If the LR himself needs cash, he will advise the client accordingly.
How “payday” lenders pull off crippling rates
(CBS News) OVERLAND PARK, Kan. - For Americans struggling in this economy, an advance on a paycheck can be a lifeline. These advances - also known as payday loans - have become a fast-growing business online, with nearly $11 billion lent out last year.
The money often comes with crippling interest rates, as CBS News chief investigative correspondent Armen Keteyian found for this report in partnership with the Center for Public Integrity.
Ramon Zayas was suffering from prostate cancer and facing mounting bills.
“I had to pay the electric bill, or have the lights turned off,” Zayas said.
So he and his wife got a $250 payday loan from an online lender 500 FASTCASH. It charged an annual interest rate of 476 percent. Zayas thought he was paying off the loan, but confusing fees, and the high interest eventually pushed the cost to $125 a month - on a $250 loan. Like a lot of people, he couldn’t keep up with the soaring costs.
“I borrowed $250, I thought I was going to pay $325,” Zayas said. “I actually paid $700, but it would have been $1,100 had I not gone to the bank and put a stop to this.”
Because of cases like this, 17 states have effectively banned payday lending. But Ramon Zayas’ lender is shielded from state laws because 500 FastCash is owned by an Indian tribe. Today, an estimated 30 online payday lenders partner with American Indian tribes.
“If you can become affiliated with a tribe, and be able to avert local and state laws, in my opinion, apparently loan sharking is legal in this country,” said Rick Brinkley.
Brinkley runs the Better Business Bureau in Eastern Oklahoma. He’s recieved 2,000 complaints and says it’s unclear who is behind some of these operations.
“The letters coming back from the payday loan companies don’t even have signatures on them,” Keteyian asked.
“They just say ‘compliance office,’” Brinkley replied.
“What does that tell you?”
“It tells us that they don’t want us to know who they are.”
CBS News wanted to find out who profits from these companies. So we went to the address for three online payday lenders owned by the Miami Nation of Oklahoma.
Turns out, this tribe’s payday lending operation is run by a company called AMG Services which we found in Overland Park, Kan.
But employees here wouldn’t even say who owns the company. “I’m not at liberty to divulge that information,” the employee said.
The CBS News/Center for Public Integrity investigation found that the Colorado and West Virginia attorneys general have pursued these lending operations. In court papers they claim Scott Alan Tucker is a key player. Tucker spent a year in federal prison in 1991 for fraudulent business loans.
Today, the 49-old-year-old Tucker enjoys a high-octane lifestyle. He races a fleet of expensive cars, and flies on a $14 million corporate jet. An $8 million home in Aspen is listed in his wife’s name and the property taxes, we discovered, were paid by AMG Services.
Tucker declined our requests for an interview but we caught up with him at a race in California. He didn’t answer our question about his connection to AMG Services.
After that, the Miami Tribe sent us a letter saying Tucker is “an employee” of AMG Services and bound by a contract not to discuss tribal business. The tribe said in a statement that it follows Federal and Tribal law, and that all complaints are handled “appropriately and without any harassment.”
Meanwhile, Ramon Zayas and his wife had to close their bank account and say they continued to be harrassed for months.
“They can do whatever they want to poor people like me,” Zayas said.
While lenders can dodge state laws they are not immune from federal law. Just two weeks ago the Federal Trade Commission took the first legal action against an online payday lender tied to a different Indian tribe.
For a good read on this predatory industry, I recommend Gary Rivlin’s Broke USA.
With regards from your HBB Librarian…
It would be interesting to hear from other HBB’er their investing style.
A basic allocation like (my sample), 90% cash, 10% stock, 0% bonds, no real estate, no muscle car collection…
I’ve been about 40% TIPS+40% cash, and 20% stocks since Dow 14k. If they would ever let the thing really crash the way it wants to I’d reverse that.
I’ll let you know when I can afford one again.
I’m starting to take a serious look at my investment allocation.
But, off the cuff, I’d say that it’s very heavy on cash and bonds and quite light on stocks. I’m just not that interested in stocks — never have been.
Anyone else here a Boglehead?
Anyone else here a Boglehead?”
I read his book on mutual funds and like Vanguard
although Vanguard did screw me on my stock options by lifting the tradeing restrictions way to slowly I think vanguard is not as good as it used to be sadly this is true of many things
I don’t follow his advice about not beating the market though
my friend at work who I gave the book to said Bogle would not approve of my market timming ways but hey I sold out of CA RE at 2006 so there jack B.
35% cash 25% stock 40% bonds
somthing like that
Hundreds sell their own burial plots to make some quick cash
Tough economic times transform funeral industry
PALM CITY, Fla. - Holly Purkey, 28, is one of many Floridians trying to sell her pre-purchased burial plots for some quick cash. She is selling two burial plots in Forest Hills Memorial Park in Palm City. “This is new to me. Kind of a weird investment,” said Purkey, of Port St. Lucie.
The side-by-side plots belonged to her grandparents, who had moved out of state. She bought them seven years ago. Now Purkey, a stay at home mother, wants this cemetery real estate off her hands. She would like $3,000 for the pair of plots in return. “The money would help. That’s the reason why I should get these on Craigslist and do something about it,” she said.
Sellers are posting online, using burial plot brokers, and also funeral homes to market the real estate. Some of those advertisements show single plots starting at about $1,000, while family plots can go for up to $50,000.
Julian Almeida owns Palms West Funeral Home and Crematory in Royal Palm Beach. When money gets tight in life, Almeida says many people begin to cut costs when it comes to planning for death. “The cemetery is the part of the funeral that really has gone up drastically,” said Almeida.
Almeida has been seeing more people trying to sell off their pre-purchased plots as well as veterans looking into government-financed burials. More of Almeida’s customers are skipping the burial altogether and opting for cremation, which makes up about 68% of his business. “It’s sort of doubled in the past ten years,” he said.
No offers have been made on Purkey’s plots yet. She is hopeful that will happen soon. “Really they are no good to me right now and hopefully I won’t need them anytime soon,” she said.
Many years ago, I went to a church where one of the elderly members died and was cremated. Afterward, it was her wish that her ashes be spread in a spot where a tree was planted.
Well, you wouldn’t believe how affectionately regarded that tree was. I don’t recall the lady’s first name, but we started referring to that tree as Abigail’s Tree. Or something like that.
Last time I went by that church, Abigail’s Tree had become *quite* the shade tree.
Since this church is in Pennsylvania, aka Penn’s Woods, anything having to do with trees is quite a big deal. We Pennsylvanians have a real thing for trees.
President Obama’s rhetorical war against Wall Street “fat cats” and his efforts to enact sweeping reforms of the financial sector haven’t exactly endeared him to top financial industry executives.
Now it appears the Wall Street donors who helped fund Obama’s successful 2008 bid are shifting their campaign cash elsewhere.
Per Bloomberg’s Jonathan Salant, at least 100 donors who previously supported Obama in 2008 haven’t written a check to his re-election campaign and are instead supporting Mitt Romney’s 2012 bid. The shift has helped Romney raise more than twice as much from Wall Street as Obama has so far this election cycle.
President Obama’s rhetorical war against Wall Street “fat cats” and his efforts to enact sweeping reforms of the financial sector haven’t exactly endeared him to top financial industry executives.
Franklin Roosevelt said that he welcomed their hatred. That was in 1936, while he was running for re-election.
Recall that he won by the largest landslide (over Alf Landon) in American history.
The July numbers for the most widely followed measure of house prices, the S&P/Case-Shiller Index, were released this morning.
The numbers weren’t terrible–on a seasonally adjusted basis, July was basically the same as June–but one of the creators of the index, Professor Robert Shiller of Yale University, isn’t taking much solace in them.
The economy has deteriorated significantly since July, Professor Shiller observes, and he suspects that the housing market has followed suit. And, from a broader perspective, house prices are still down more than 4% year over year.
In February, Professor Shiller startled those looking for an imminent “bottom” in house prices by suggesting that house prices could still fall 10% to 25%. He’s standing by that assessment.
House prices won’t necessarily plunge from here in nominal terms, but in real terms–after adjusting for inflation–they could still drop significantly, Professor Shiller says. And the bottom might not arrive for years.
.. years well I’ll just keep renting
Thanks for the post! I had the bottom at 2012 (my guess over 2 years ago) but I think it’s going to be 2015 or later.
cactus
Think slow leak. You’re right, this area has insane home prices.
In 2001, the homes we’re looking at went out at $276K. That’s what they are worth. We sick to our stomachs with what homes are going for. You’re not alone.$400K for a nothing special rancher. F**king insanity.
We paid just under $400K for 4,000 sq ft in Wood Ranch circa 1998, and we had a view, along with all the luxuries. Incomes were doing well back then.
My fate as a toothless, bald, Florida renter is sealed.
Oh come on Muggy, you guys are young. When your wonderful other half finishes Grad School, housing should be in a better place, and so will your incomes. Stiff upper lip, my friend. Time is on your side.
Word on the street is a bald toothless Fl renter can be sexy. LOL
I’m magenta myself tonight.
Hi everyone.
Almost found an acceptable home today. The deal breaker was:
*Master in front - noise- 3 schools within walking distance. (In later years it would become an issue.) Back Masters are the way to go, from experience.
Other than that, it was priced fair and a regular sale from a long time owner.
It’s weird how you reconcile some things, but others just aren’t fixable or acceptable.
They’ve wasted no time trying to discredit the trader who told the BBC interviewer that the world was controlled by GS and that a crash was coming. Someone posted this yesterday, today the propaganda machine was turned on by the WS titans in order to discredit this source of truth.
news.yahoo.com/blogs/cutline/bbc-victim-hoax-no-yes-men-154724196.html
The U.S. is running out money to support the housing crisis as the Euro is in clearly in desperate straights. Freshly minted money headed to Europe will have conditions attached to it…no Palestinian state. Yes, the tide has turned, and housing will have to fend for itself now. Icy winter ahead.