Bits Bucket for September 30, 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.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
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Foreclosure bubble could last 5 more years
September 29th, 2011, 2:13 pm
posted by Jeff Collins
It will take three to five years for the California housing market to clear its backlog of defaulting homes that continue to be a drag on housing prices, the chief economist of the California Association of Realtors has said during a recent conference call.
“It depends on the area, but I would say three to five years,” CAR economist Leslie Appleton-Young said.
“Three (years) in areas where (foreclosures) haven’t been the majority of the market. Closer to five in the inland areas, where I don’t think we’ve seen a lot of the supply that’s going to come through (has yet) come through,” she said. “You’ve got shadow inventory/negative equity homeowners that are still kind of in a holding pattern (in those areas
http://lansner.ocregister.com/2011/09/29/foreclosure-bubble-could-last-5-more-years/123198/ - -
Total puff piece. How about a cursory review of the rent v. buy equation? How median household income v. home prices? The CAR’s public affairs office is a propaganda outlet.
Nothing a $quadrillion bailout can’t easily fix. Why not just print the first quadrillion dollars ever printed and just give hundreds of trillions where they are needed most? At this point, what difference does a specific amount even mean as long as accounting tricks with leverage and bailout extensions are the norm? Then numbers really have no meaning at all.
Tim Geithner is the only one who would get excited about the numbers. None of us really care.
comments
Strategic Renter says:
September 29, 2011 at 2:42 pm
prices will collapse through 09 lows in the next few months then down to 90s prices.
‘“It depends on the area, but I would say three to five years,” CAR economist Leslie Appleton-Young said.’
We’ve come a long way in just a few short years from, ‘The housing market will bottom out by the end of next year.’
Greater Boston home prices still inflated?
Posted by Scott Van Voorhis
September 28, 2011 05:47 AM
I’m still waiting, but so far the double dip has failed to bring about the deep home price reductions here in Greater Boston that some frustrated buyers are longing for.
The latest Case-Shiller numbers show a 1.9 percent decline in Boston area home prices this July from July 2010.
Frankly, it’s modest decline. And it’s far from the wrenching realignment that seemed in order after the expiration of the home buyer tax credit last year sent sales plunging off a cliff.
In fact, home prices arguably remain highly inflated here. Even after a year of anemic sales and faltering prices, the Case-Shiller Index for Boston is hovering above the155 mark.
That means that Greater Boston home prices today are still more than 55 percent above 2000 levels, with 100 the baseline for the index.
Only Washington, D.C, Los Angeles and New York - with Case-Shiller scores respectively of 187, 170 and 168 - have done a better job of hanging onto all those inflated, bubble year gains.
http://www.boston.com/realestate/news/blogs/renow/2011/09/greater_boston_9.html - 48k -
So let me ask you….compared to the “bubble” areas which are experiencing major drops in housing prices, how bad were Boston area job losses?
Massachusetts got hit, but not disastrously. We have a pretty diverse economy, with education, hi tech, and biotech driving most of it. Of course if the education bubble ever bursts we could get walloped.
As a long time renter, I found it interesting to go through my folder of rentals we looked at in December of 08. We are looking now and rents are through the roof since then.
It seems to me that property values have been flat to slightly down for about three to four years. Of course, that doesn’t seem that bad, especially in comparison to hard hit areas, but as I remind my house-hungry wife, flat home prices are pretty bad news when you take into account inflation, and all the other costs associated with owning.
Our latest goal has been trying to avoid renting a unit that is also listed for sale. Something tells me that once we sign a lease the place won’t be delisted… and there’s nothing worse than amatuer, accidental landlords.
I call BS. DC pricing may be hanging on at 2004 numbers, but DC sales are at 2002 prices. There was a 20-30% run-up from 2002-2004.
I expect prices to drop another 20-30% to 2002, but I do not expect actual sales to drop much below 2002 or 2001 unless they are trashed. In other words, people are going to start “giving it away.”
Yes, there may be a crash to sub-2001 prices eventually, but I expect it will at least 2 years before that happens, during which time i would have put out another $25K in rent and houses would need another $20K in fix up.
Reality is a Lie.
Reality could be quite the game changer.
The concept of ‘free market’ capitalism as practiced in 21st century America is a lie.
Privatize the gains, socialize the losses, rinse and repeat…
Free market = free to steal
This is only true insofaras you are politically connected as a Goldman-Sachsish leech.
(My local) Reality is a snooze.
What’s going on w/my cash?
What’s going on in Greece? What’s going on w/Germany’s Dexia?
When that situation stabilizes then I’ll go play w/realtors again.
You mean my toothache isn’t real? I’ll remind my tooth.
You just aren’t using the right accounting tricks.
There is no spoon.
ah ha!
I think I mentioned one of the big commercial construction projects in the general area had appeared to have come to a complete hault. No one seemed to know why.
The news just reported the Key Bank that was supposed to be part of a project didnt have their ok yet from corporate. This seemed really odd to me. The town spent a lot of money tearing down houses that people lived in and then preparing the lot for a buyer that never had the ok to proceed. And what about the other tenant/buyers that were supposed to go in that same location? Would a bank be considered a commercial development’s anchor and therefore be able to hault an entire project? Supposedly now the project will sit till spring. Sounds like Key Bank’s expansion plans have been put on hold and now the whole project might be in jeopardy. If they don’t start up again as reported that town will have a pile of rubble as its centerpiece.
hault = halt
Quite sure insanity is starting to set in.
Thanx - I was truly baffled as to what you were trying to say.
Fomalhaut?
Realtors Are Liars®
Comment by Ben Jones
2011-09-29 08:06:21
‘Vacation home buyers’ are basically speculators. It’s hard to work up a good boo-hoo for gamblers who lose, which is why the media doesn’t call them that.
—————————————————————————–
Added to the databank. Second sentence is a bullseye.
U-T Housing Huddle: Meet the real estate panel
Written by
Lily Leung
6 a.m., Sept. 29, 2011
The Union-Tribune’s real estate panel members will give their perspectives on a housing question posed by our business staff every month.
Panelists were chosen from more than 100 submissions sent to the U-T after we sent out a call for candidates in the spring.
We chose these 11 real estate professionals for their experience and representation of different segments of the local residential market, from distressed sales to rentals to new homes. Click here to read more about them.
Here’s the debut question and all 11 answers.
What is the No. 1 challenge in your niche of the San Diego County housing market, and how are you addressing it?
…
Murtaza Baxamusa has the only realistic answer, income v. prices.
“Meet the real estate panel”
Make Way for Dumb Bunnies
Economic indicators down again, USD says
Written by Roger Showley
noon, Sept. 27, 2011
Updated 1:43 p.m.
A key indicator for San Diego County’s economy, released Tuesday, dropped in August by the biggest margin in 2 1/2 years, raising “serious questions” about the immediate future.
The University of San Diego’s Burnham-Moores Center for Real Estate published its index of leading economic indicators, showing a 1 percent drop from July’s 117.2 to August’s 116.
Index author Alan Gin said it was the largest one-month decline since March 2009, the depths of the recession, when the index reached its lowest point in this cycle, 100.7.
“With the USD index now having fallen for two of the last three months,” Gin said in an analysis of the findings, “there are serious questions about the near-term outlook for the local economy.”
The concern was based on three of the six indicators going negative - all six are given equal weight in configuring the index. And two of them dropped by much more than 1 percent — a benchmark economists use to judge whether a trend is changing, either positively or negatively.
The stock price index figure dropped by 3.15 percent and consumer confidence was down by 2.85 percent. The third negative figure came in building permits, down 1.3 percent.
On the other hand, three indicators were up, but not by more than 1 percent — initial unemployment insurance claims, up 0.07 percent (an increase in the index indicates fewer claims); help wanted advertising, up 0.72 percent; and the national economy, up 0.5 percent.
…
They’ll have to tear my antique mahogany Gibson guitar out of my cold, dead hands.
Gibson Guitar becomes cause celebre for conservatives
Republicans see the seizure of imported ebony and rosewood parts at its factories as an illustration of the need to shrink federal government.
Gibson CEO
Gibson co-owner and CEO Henry Juszkiewicz says the federal government is “bullying and harassing” his company. (Jeff Adkins / Chicago Tribune / September 27, 2011)
By Neela Banerjee
September 27, 2011, 8:24 p.m.
Reporting from Nashville—
Two dozen federal agents outfitted with side arms and bulletproof vests strode past a display of electric guitars signed by Joan Jett and Slash of Guns ‘N’ Roses and quickly seized control of the cavernous guitar factory.
Some workers were caught sanding guitar bodies. Others held newly painted guitars between their bellies and cloth-covered wax wheels, gently swaying and pushing as they buffed the instrument in some kind of tuneless dance.
Turn off your machines and go home, they were ordered. Some set down their future Les Paul and Joe Perry signature guitars and obeyed.
This was a raid on Gibson Guitar.
The feds were after contraband in Gibson’s Tennessee factories that day — ebony and rosewood they suspected was illegally imported from India. But their actions against the company whose guitars have been strummed by B.B. King, Bob Dylan and John Lennon netted some unanticipated results: infamy on talk radio and from commentators on the right.
…
“Two dozen federal agents outfitted with side arms and bulletproof vests strode…”
most law enforcement personnel are douchebags…it’s a requirement.
Yeah, I love how they always go “Full SWAT” anytime they feel the need to break someone’s door down.
You’d think they would reserve that for the most hardened, threatening criminals. But some kids never grow up. Like Civil War re-enactors, it’s fun to don the garb, and pretend you are taking down Bin Laden, or Dillinger.
Yeah, I love how they always go “Full SWAT” anytime they feel the need to break someone’s door down.
I forget where I read it now, but someone once mentioned that police get paid time and a half or some such when they’re in ‘SWAT’ mode. So not only do they get to play ’soldier’, but they also get paid more.
That could explain the propensity to go full SWAT for no apparent reason..
Let’s compare this tragedy to the deaths caused by Listeria and other food poisonings, or the chinese drywall problems, or the BP oil spill, or mountain top mining polution, or Wall Street or well the list is endless
They could have handled it better than charging in. Gibson Guitar was hardly the HQ of the Waco Wacko.
They should have had a quiet “conference” with management, and then removed the offensive lumber after hours, much as FDIC takes over a failed bank.
This was a failure by Customs on both sides the ocean, not Gibson.
As I’ve said before, musicians are quite the socially conscious lot.
So, look for “Sustainable Music” concerts in your locale soon. Not to mention major acts getting behind this idea.
Here in Tucson, we already have an annual Solar Rock concert. It’s been quite successful, and thousands of people come to it. The people running the solar array are very personable, and you can ask them questions until, well, the sun goes down.
well NPR has a piece in which it quotes Andrea Johnson, director of forest programs for the Environmental Investigation Agency
seems it all hinges on the “lacey act”
I don’t know US law, but will she (Andrea Johnson) have to appear in court in Tennessee?
looks like the die is cast
First? Me?
Cue George Harrison’s “Crackerbox Palace”…
“We’ve been expecting you.”
Watchdog: Regulators bowed to banks on bailout
By Marcy Gordon
AP Business Writer / September 30, 2011
WASHINGTON—A new watchdog report says Federal regulators bowed to pressure from big banks seeking a quick exit from the financial bailout program and did not uniformly apply the government’s own conditions for repaying the taxpayer funds.
The report was issued Friday by the office of Christy Romero, the acting special inspector general for the $400 billion taxpayer bailout of the financial industry and automakers. It found that regulators, to varying degrees, “bent” to pressure from the banks in late 2009 and relaxedthe requirements put in only weeks earlier.
The regulators also were motivated by a desire to cut the government’s stake in the banks it had bailed out in September 2008 when the financial crisis struck, the report says.
http://www.boston.com/business/articles/2011/09/30/watchdog_regulators_bowed_to_banks_on_bailout/
It should be a felony to try and influence a regulator.
Clarification: Influencing politicians? Fine, that’s the political process. Influencing the actual regulators? Felony.
Buddy of mine (known him for 25 plus years) in the FAA won’t even let me buy him lunch. FAA policy, no accepting anything from anyone under your regulatory authority PERIOD.
Likewise, when you hire in, you can’t oversee your former employer for (I think) 2-3 years, due to the chance of getting to “buddy-buddy” with your former employer/workers.
Of course, we are talking about the FAA peons in the field. Evidently, the rules are different in Washington.
Well, there goes the public comment process!
“Influencing politicians? Fine…”
Wait, I thought folks here were upset because that’s what the Wall Street pigmen have been doing. Now I’m confused.
It is, but not if you call it some other name.
See Monty Python’s “Dead Parrot” sketch.
Yikes
Danish Farms Bubble pops. Seems there was a bubble in land prices for pig farms in Denmark. It just popped. Now their banks are in trouble and the farms lack “liquidity” which is a strange way to say they can’t pay the debt on farms they over paid for.
I guess we have never seen that before.
http://www.businessweek.com/news/2011-09-29/denmark-creates-rescue-fund-for-crisis-hit-farming-industry.html
“Farms Bubble pops”
Coming soon to a U.S. farm state near you.
In order to get a prize, change your screen name to CrackerJack.
Banks who were quick to run to sugar-daddy when in trouble were also quick to get out of the deal so enormous bonus money could be awarded to the banksters. Some rules were broken by the greedy banks:
http://finance.yahoo.com/news/Watchdog-Regulators-bowed-to-apf-3217329384.html?x=0&sec=topStories&pos=main&asset=&ccode=
I’m shocked I tell, you. Just shocked.
Mend your neighborhood foreclosure
By Rita Colorito • Bankrate.com
A foreclosure on your block can do more than spoil the view from your window. A foreclosed eyesore can ruin the financial health of your household and neighborhood. But there are things you can do now to keep a blighted property from destroying your home equity.
Be a good neighbor
Prevention makes the biggest difference, says Erynn Crowley, deputy director of the Phoenix Neighborhood Services Department. If you know a neighbor is headed toward foreclosure, find out what you can do to help maintain the property should they move away. Like Phoenix, many municipalities have developed resources to help neighborhoods and neighbors deal with the foreclosure crisis.
“We always encourage neighbors to talk to each other, because that’s the fastest way going,” Crowley says. “Sometimes they aren’t aware or they thought they had a tenant who was taking care of it.”
To keep one blighted property from turning into two or more, maintain your own property. “Don’t get too discouraged just because you have one or two abandoned properties on the block,” says Chris Smith, director for Neighborhood Housing Services of Chicago in the city’s Roseland office. “If every other property on the block is in pretty good shape, chances are the (foreclosed) property won’t stay vacant for too long.”
http://www.comcast.net/ - 100k -
Above story illustrates why I’m out early in the morning, picking up gar-bazh in the street, pulling weeds in my yard, and otherwise tidying things up.
People see me doing these things, and that’s the point. I want them to take an interest in this area, and over time, they are.
There’s something to be said for setting an example. And it only takes a few minutes to do it.
But looked at another way, I see it as another attempt to get you to do some of the work that they used to do. It’s akin to self-serve gas, self-checkout in the grocery, phone trees “press 1 for account support,” instead of calling an operator, or managing your account online at Verizon Wireless instead of visting the store. They make you do some of the work under the moniker of ‘convenience.’ And they can hire fewer people.
Last summer the house across from me in Columbia, SC was vacant, the grass was unmowed and two of those flash parties occurred. They occur when teenagers find a vacant house and do that instant messaging thing.
So I went over there and mowed the grass, trimmed the bushes and fixed the back door that had been broken into. It looked like someone lived there and the parties stopped. Now there are renters and they are very nice people. There are no houses for sale within 3 blocks of my home which is very nice. A happy ending.
The point is that if you have an abandoned house next to you, just mow the grass and make it look like someone is there. Whinning is not going to be productive
My goats and donkeys are still taking care of the yard accross the street. This will be going on the third year. Nobody parties with farm critters.
You have the wrong kind of farm critters for that……..
Actually, I went to take them over there this morning and there was a Fannie Mae hired mower doing the yard (he comes like every other month). Your tax dollars at work…
I have heard differently.
You are being rewarded for having the sensible decency of taking care of your personal environment. Not doing what you did might have the opposite effect. That is how decline starts; you put a stop to it.
OR just say “Get off my lawn…”
The Garand always makes that line more effective.
That, and the kids who come by the house to take your daughters on a date watch their P’s and Q’s, when you are sitting on the front porch cleaning it when they show up.
Even better……name it, and talk to it when they show up.
LOL! +1
Cash-Short, U.S. Weighs Asset Sales
By EDWARD WYATT September 29, 2011
(WASHINGTON) Deep within President Obama’s proposals to raise revenue and reduce the deficit lies a method that has garnered bipartisan support, something rare in Washington these days. It involves selling an island, courthouses, maybe an airstrip, generally idle or underused vehicles, roads, buildings, land — even the airwaves used to broadcast television.
Among the listings: Plum Island, N.Y., off the North Fork of Long Island, which the government has already begun marketing as 840 acres of “sandy shoreline, beautiful views and a harbor.” As former home to the federal Animal Disease Center, it may need a bit of “biohazard remediation,” making it a real fixer-upper.
Many conservatives — including Representative Paul Ryan of Wisconsin, chairman of the House Budget Committee, and the budget experts at the Cato Institute — support the broad idea of shrinking the government by selling parts of it. Democrats like the idea of virtually painless revenue-raising. Whether Congress can pass any bill in the current atmosphere, however, is far from certain.
“This is something that we can have bipartisan agreement on,” said Representative Jeff Denham of California who, as one of the most conservative House Republicans, almost never agrees with the president.
Fire sales of unused government property will not come close to closing the deficit, of course, and there are plenty of bureaucratic obstacles in the way even if Congress approves.
But the proposals could make a modest difference. With the government owning more than a million properties, the sales possibilities are plentiful, supporters say. Senator Jon Kyl of Arizona, the No. 2 Republican in the Senate and a member of the special Congressional deficit-reduction panel, has said that property sales is one area where the committee can probably agree.
The White House figures it could raise up to $22 billion over the next decade, though there are plenty who doubt the government could raise anywhere near that amount. More than 80 percent of that figure might come from the auction of public airwaves now dedicated to broadcast television which the Obama administration believes can be better used for wireless broadband.
The idea behind that plan, which is supported by both parties and the Federal Communications Commission, is to reclaim and sell a public asset that previously was given away. But it also could generate some serious opposition from the nation’s broadcasters, which have a powerful lobby.
The other $4 billion would come from selling buildings and property. The Pentagon and the Postal Service have both sold buildings and generated a lot of cash. Sales of 350 closed military installations have produced $1.5 billion over the last 20 years, according to the Congressional Budget Office.
The Postal Service raised $180 million from the sale or lease of properties last year alone, and postal authorities have identified an additional 3,653 post offices for closure or consolidation. In New York, the historic Farley Post Office Building in Midtown Manhattan was sold to New York State in 2002 for $230 million for potential use as a passenger train terminal.
Post office sales are kept on a different set of books and do not reduce the federal deficit, but plenty of potential sales would. Moffett Federal Airfield, a decommissioned air strip near San Francisco that now houses a NASA operation, has been long aimed at for sale and could bring in millions. Moffett has embarked on a small privatization effort: Google’s founders pay $1.3 million a year to park their three private jets there.
Like a lot of things in Washington, selling federal property is tangled in red tape. To sell airwaves, for instance, Congress would need to pass a law. Selling off property requires a multistep process that includes other agencies looking it over to see if they could use it, and another check to see if it might be a good candidate for a homeless shelter or some other public purpose. Only if it fails various tests is property finally offered to the public.
This post prompted me to think of the Louisiana Purchase and the purchase of Alaska.
According to the Wikipedia entry, Russia sold Alaska due to financial difficulties.
What’s the saying? History doesn’t repeat but it often rhymes?
And the end game is revealed.
Debt made unpayable by the same people who create the economic tides now want to covert ‘our’ debt into ‘our’ hard assets. Land, power plants, airports, seaports, etc.
Don’t take the bait. We need to tell these people to go f*ck themselves!
End the FED!
If we’re lucky, they’ll sell off Stockton and El Baños. I’m tired of reading about them.
But I’ll keep Detroit, thank you. They have water.
Oops, I mean LOS Baños.
I knew what you meant.
Wonder which country is the single largest “contributor” to the Inter-national M F’ers bank, bailout, free money & screw the serfs acount.
Source - Daily Mail
ITEM: Sources in Washington said the IMF’s pot of cash could be expanded to $3.5 trillion.
Christine Lagarde, the managing director of the IMF, said the current war chest of around $350 billion ‘pales in comparison with the potential financing needs of vulnerable countries’ and needs to be expanded to deal with ‘worst-case scenarios’.
Following crisis talks in Washington at the weekend, Mrs Lagarde said: ‘The Fund’s credibility, and hence effectiveness, rests on its perceived capacity to cope with worst-case scenarios. Our lending capacity looks comfortable today but pales in comparison with the potential financing needs of vulnerable countries and crisis bystanders. It will be useful to discuss, soon, the needs and contingency options.’
Has Christine set up a meeting with the Intergalactic Bank? They might have access to the kind of money she needs.
How Dems are working to ensure permanent majority status: Make the majority dependent on the state.
http://www.statesmanjournal.com/article/20110930/NEWS/109300353/Oregon-s-hunger-assistance-program-receives-two-awards?odyssey=tab|topnews|text|News
“SNAP recipients in Oregon can make up to 185 percent of the federal poverty level, or $34,280 annually for a family of three.
“The large caseload may not speak well of the state’s economy. But the 91.7 percent participation rate indicates that leaders’ aggressive efforts to break down barriers, improve efficiency and educate communities on SNAP are working.”
The poverty-industrial complex at work.
Then there’s this CNN article where someone tried to live on the $30/week that SNAP provides for an individual. What’s the “S” in SNAP stand for? Oh yeah, “supplemental.” But of course supplemental is just a start; the article is an example of the constant clamor for the govt to provide ever more of that “assistance.”
http://eatocracy.cnn.com/2011/09/28/the-food-stamp-challenge-eating-on-30-a-week/
Do you want them fat and happy at home or starving running wild in the streets and flash-mobbing or rioting as seen by the “youths” in the UK and across many US cities this year?
I’d rather see them happy and working.
A starving cat catches no mice.
I’d rather see them happy and working.
Then perhaps you should direct your complaints to Corporate America who just won’t stop offshoring jobs.
It’s not the DNC who is offshoring all the jobs and sending the people to the welfare lines. If right wingers and corporatists are so damn worried about the Dems taking permanent control through swelling welfare rolls the solution is quite simple: stop offshoring and hire Americans!
‘It’s not the DNC who is offshoring all the jobs’
Yes, the Democrats protect the working people. The Republicans are the party of fiscal responsibility. Tell that to the millions of unemployed.
A person I know who voted for Obama keeps going on about the tariff on Chinese tires. Wow, I know lots of local tire makers who are doing great now…
IMO, we don’t have 20 years to turn this globalization thing around.
Open the other eye there Colorado. Do you really think that the US bleeding itself all over the world for the sake of corporate profits totally escaped the DNC leaders over the past several decades, no complicity at all?!? What are the corporatists paying them for then?
A person I know who voted for Obama keeps going on about the tariff on Chinese tires. Wow, I know lots of local tire makers who are doing great now
Let’s dissect this a bit….
What would tariffs do? They’d raise the cost of imported goods, right? So that locally-produced goods (Which currently cost more) would be more competitive.
Okay, so when it comes to a price comparison, they’d be closer, but the price of the domestically-produced product would still be as high…
So, why don’t the folks who clamor for tariffs on imported goods simply BUY domestic goods now? The price won’t be different with tariffs. So if you’re willing to pay more WITH a tariff, why not pay more without???
“Yes, the Democrats protect the working people.”
Well, they did at least try to remove the tax break for offshoring, not that it would have had much effect. Still the GOP filibustered that baby and the corporate owned MSM buried the story.
IMO, we don’t have 20 years to turn this globalization thing around.
I agree, and I don’t see either party rising to the ocassion.
A person I know who voted for Obama keeps going on about the tariff on Chinese tires. Wow, I know lots of local tire makers who are doing great now…
My brother used to work for Goodyear. In his own words, only the high end (as in expensive) tires are made here, everything else is coming from Asia.
Open the other eye there Colorado. Do you really think that the US bleeding itself all over the world for the sake of corporate profits totally escaped the DNC leaders over the past several decades, no complicity at all?!? What are the corporatists paying them for then?
I’m not saying that the Dems are saints. Far from it. What I’m trying to point out is what we in the Engineering profession refer to as “root cause”. The root cause of swelling welfare rolls is Corporate America’s decision to offshore millions of good paying jobs.
In Sept of 2010, the Republicans defeated a bill to end tax breaks for offshoring jobs.
Don’t tell me there isn’t a significant difference.
The root cause of swelling welfare rolls is Corporate America’s decision to offshore millions of good paying jobs.
As an engineer, I disagree.
There are many factors at play, neither of which are alone sufficient to be a ‘root cause’.
Why are corporations offshoring? Because people want/demand lower prices. They vote with their wallet every day on this issue.
Why do people do that? Because they’re greedy and short-sighted.
Are people that way because they feel their income is under pressure? Perhaps. Or perhaps it started because folks started wanting to live above their means.
And perhaps the cause of that was marketing practices put into play in the past 20-30 years.
There is no one ‘root cause’. However there are/were many places the cause+effect chain could have been broken, but wasn’t, and still isn’t.
Then why do they need tax breaks to offshore if it’s so much more cost effective, hmm?
Drumminj is playing chicken and egg. Dems think it’s the chicken (corporations started it), Drumminj thinks it’s the eggs (people demanded cheap goods), and conservatives think it’s the fault of those lazy kids who won’t put down the Cheetos and get a job.
My question is this: if corporations didn’t offshore jobs first, then how did the people know that goods were NOT cheap? They needed the imported goods in order to make that comparison. Also, whether or not the public demanded cheap goods, the government let it happen with nary a whimper, with the result we see here.
I admit, I’ve bought lots of imported goods from Asia, mainly because it’s difficult to find made-in-America goods, especially Foxconn electronics and clothing. I’m keeping my big-ticket items domestic. My Toyota is assembled in California, the house I eventually buy will likely be a 1960’s model (no chinese drywall), and I’m waiting on Amish furniture. At the moment, most of what i buy is consumables like food and toilet paper.
Drummin, the reason that nobody stopped the chain (besides the Republican filibuster) is that the effects of offshoring didn’t really come to a head until about now. There were three phases of offshoring: manufacturing, menial, and knowlege economy.
Midwest manufacturing was offshored first. It didn’t make a huge dent because the kids moved on to “knowledge economy” jobs and Reagan defense jobs, and the laid-off parents were able to hang on in paid-off houses on pensions and goverment assistance.
In the 90’s the knowlege economy boomed in the US with a boom in the DOW and NASDAQ, so nobody noticed that the manufacturing was mostly gone. Also in the 90’s, the first effects of NAFTA and loose immigration were felt, as menial jobs began going to illegal immigrants. I saw my first little group of illegals loitering in my lily-white Midwestern apartment complex in 1999. They started off in cleaning and shelf stocking.
Another factor nobody seems to grasp (except Elizabeth Warren) is that at about this time, the woman working outside the home went from being a luxury to being a necessity. This effectively almost doubled the labor pool, so you needed twice as many jobs to keep everyone solvent. If all the women* quit work today, there would be enough jobs for the men.
In the 2000s, manufacturing was gone. Menial jobs which went to non-americans moved up from cleaning to restaurant work and construction, displacing millions of low-wage workers. The first knowledge jobs (think Carly) offshored to Indians, who somehow figured out the American phone/internet structure and job traning in less that 10 years. Again, nobody noticed because the military-security-industrial-complex was booming after 9/11 and we had a housing bubble on.
Now it’s 2010. Manufacturing is gone, menial jobs are gone, knowledge jobs are going fast, banking ran out of tricks, kids have to go to college even if their jobs won’t need a degree, and there are no bubbles to hide the mess.
We do not know the want of water until the well is dry…
—————-
*I realize I’m being gender discriminatory, but historically that’s the way it went.
Then why do they need tax breaks to offshore
Who’s arguing they *need* them? Of course they *want* them.
oxide, I wasn’t intending to assert what I think is the “Cause”. I was simply demonstrating there are many factors at play, and they have all come together to cause the current issue. I’d argue that population growth is another issue - there are simply too many unskilled folks in the world than we have useful things for them to do.
I’ve not read your post too critically, but your analysis seems reasonable. However I’d argue that you don’t need to see a cheaper, comparable product to want the current product you buy (or are wanting to buy) to be cheaper. Sellers of product realized there was higher demand at a lower price, so they worked to be able to serve that market by lowering input costs. Or perhaps they were just greedy bastards, but if that were the case then prices wouldn’t have dropped - they simply would have exploded their profit margins.
“The price won’t be different with tariffs. So if you’re willing to pay more WITH a tariff, why not pay more without???”
Tarriffs could help pay down the debt. Or maybe that is not such a big issue as the Republicans are making it out to be.
Tarriffs could help pay down the debt
Sure, if people buy the imported products.
I’ve seen tariffs presented as a way to protect domestic producers, not as a way to pay down debt. Do you really think the goal is to have folks buy imported products but just pay the extra tax/tariff?
If all the women* quit work today, there would be enough jobs for the men.
And that one job might be just about as much as the two jobs currently do…as long as we didn’t allow it to go overseas.
“the woman working outside the home went from being a luxury to being a necessity…”
Oxide, I believe you’ve switched cause and effect. Women entered the workforce in large numbers and that caused inflation, especially where the 1st derivative curve (the rate at which they were entering the workforce) was greatest. With two workers instead of one, household income went up rapidly so inflation was a natural consequence. Inflation subsided once most of the women who wanted to work had jobs.
I’d rather see them happy and working.
If you haven’t heard, it’s very hard to get a job these days. Vast number of the people who are collecting food stamps were working just a few years ago and using their paychecks to buy their groceries. The vast increase in unemployment and SNAP usage was not caused by a decline in “personal responsibility”.
I meant to write, “Vast numbers of people…”
So let’s see, we’ve got a ton of work that needs to be done to fix/upgrade crumbling infrastructure, we’re already borrowing billions of dollars to give people unemployment checks, food stamps, healthcare, etc, and we have a whole bunch of people without jobs. If only there were one elegant solution that could address all 3 of these problems. I’m going to draw an diagram and stare at it until I come up with something…
Well Max, if the first thing you think of is “why not build high speed rail to comepte with the rest of industrialized world?” you would actually be a day late and a dollar short.
In fact, many states recently TURNED down billions of federal dollars to build high speed rail systems that would have eventually been linked together.
Specifically, red states.
The construction alone would have created thousands of new jobs in EACH state.
Do NOT tell me there is no significnat difference between Repubs and Dems. The Repubs are throwing us ALL under the bus just to make Obama look bad.
“I’m going to draw an diagram and stare at it until I come up with something…”
Plenty here will tell you infrastructure projects are wasteful- since the government does nothing right nor well. Better to leave that money in the hands of the producers, and taxes are theft anyway, and the Free Market will build those bridges better, yadda, yadda.
But I agree with you.
Not all infrastructure jobs are wasteful, but the high speed rail proposed in CA is one of the biggest boondoggles in gov’t infrastructure history. They haven’t even broken ground and the cost overruns have already started and I mean BILLIONS.
A national high speed rail project low on the boondoggle scale would be a federal public works project that I could support at this period in time. Not sure if it will ever happen, too many special interests and too many short sighted politicians on both sides. I guess our long distance transportation choices will always be the automobile or big aluminum flying gas cans.
I’d kind of like to see them you know, take some responsibility for themselves.
Let ‘em eat cake, right?
How are they supposed to “Take some responsibility” when their jobs have been offshored and there are 5 applicants for every job?
Yup…. the old “pull yourself up by your boostraps” routine.
You’ve done run out of excuses.
As I see it this lack of opportunity is the culprit . No matter how much Corporate America tries to blame other factors ,they are outsourcing and out-manufacturing ,not investing in America and that is what is happening .
No doubt reducing wages and benefits is taking buying power out of this economy .
I don’t think the America people understood what the drawbacks of Globalism would be . The people were conned into thinking this was a good thing ,along with thinking speculation and bubble economies were a good thing .
People don’t knowingly shoot themselves in the foot .People thought their fake wealth of real estate would cover their hind end . With the kind of PR campaign that was going on at the time ,the sheep went for it . Loans being decoupled from income was insanity .
I marvel at the power of the PR machine that induces people into self-destruct . People are responsible for their own acts on some level ,but brainwashing is alive and kicking .
“5 applicants for every job”
Don’t I wish. One position that I was more than qualified for, had over 100+ resumes that were solid candidates. According to a friend aware of the position, 100’s of resumes came it.
On Indeed, some of the visitor indicators were up to 800. Even if some were doubles, that’s a lot of people for one position.
Colorado is right. We should all just give up and demand government support. We are all just victims of corporate circumstance. Where is my free stuff? I want a power chair.
People don’t knowingly shoot themselves in the foot
However people do willingly bury their heads in the sand.
Don’t I wish. One position that I was more than qualified for, had over 100+ resumes that were solid candidates. According to a friend aware of the position, 100’s of resumes came it.
Tell me about it. In 2006 (during supposedly good times) I switched jobs. Before I left I was asked to help screen resumes for my replacement. There were over 100 resumes, about half of them were qualified.
You guys don’t know how to wash dishes… or flip bugers?
I do, and I’ve done it when necessary in my life. Never collected one dime of UE or SNAP or any other kind of handout. Certainly not bragging about this to make a point here, but those who claim there are no jobs are just not accepting reality fully. Somebody else is NOT the master of your destiny! Stop blaming.
Liz, have you applied for one of those jobs lately? They too, have waiting lists.
…as do any of the other 1000s of low pay grunt jobs.
You’re out of touch.
I guess they only take Mexican names on those waiting lists? Kind of funny those are the only guys you see doing the “1000s of low paying grunt jobs”. The Mexicans must have an uncle or in-law insider or something…
liz pendens
1. Hispanics like to work with other Hispanics.
2. No jobs in flipping burgs of dishwashing. Just look at the teen unemployment stats.
3. I have two careers under my belt (Acct’g & Mall Mgmt). I’d gladly be under-employed right now. I’m not lazy, and doing some 1099 work.
I use to have an Assistant. I’d do that job if I could find it. I collect no unemployment.
Love ya, but you are drinking too much Rush kool-aid, imho. I use to be a hard headed human, too. Then the 2X4 came along.
As I learned myself, the “Rush/Republican” talking points about poor and unemployed people don’t have much basis in reality.
Really, people should try this unemployment thing for a year for a year or two, like I got the chance to do. “Unemployed” is practically a full time job.
Just call it “Suburban Mythology”
I’m sure people are kicking themselves in the ass for falling for all the hype of the housing boom and this debt culture ,but they should of rejected it . Why they didn’t reject it was to bad . Easy money and the easy way out
was very appealing to many sectors of the population . But the dope pushers gave them the dope . I would talk to people during that time and they were like zombies just repeating the talking points of the cheerleaders for real estate .
Really, people should try this unemployment thing for a year for a year or two, like I got the chance to do. “Unemployed” is practically a full time job.
I was unemployed for 9 months. Does that mean I’m allowed to have an opinion on the subject?
You have to make it happen. I know unemployed desperate folks around here (FL) who are going off into the woods to harvest palm berries they can sell for like nine cents a pound. The work is hot, hard, and miserable and you get stabbed by the thorns on the trees alot, but at the end of the day you can have fifty or sixty bucks. Resourcefulness is brought on through necessity sometimes. Government cheese to sit on one’s ass just kills it altogether. Do you think the Chinese worker who busts his tail to get paid enough to keep his family in a cardboard hut is complaining? Hell no, he is working too hard to complain.
Do you think the Chinese worker who busts his tail to get paid enough to keep his family in a cardboard hut is complaining? Hell no, he is working too hard to complain.
Nevertheless, he is working himself nearly to death to live in a cardboard box. He should be complaining. That day may come in the near future. The Chinese government has been filtering the Internet to keep its people from learning about upheavals that have been going on in the Arab world. They won’t be able to do that forever.
“….I’m allowed to have an opinion……”
Sure. Just one of many.
Just remember that your skill set may make your experience unique, compared to, say, mine.
Yeah, I can take a burger flipping job. But why do that, when you take home a couple bucks an hour, when transportation expenses are figured in?
And does it make any sense whatsoever for me to “retrain”, go $80K in the hole, graduate college at 58, and STILL not be able to find a job that pays over $10/hour.
I’m doing my part to help everyone, by refusing to work for that salary, and doing what I have to do to survive on working part time, if I have to.
Of course, if someone waves a magic wand, and cuts the prices of everything (including mortgage and credit card balances) back to 1980 equivalents, I’ll take the $10/hr job.
liz, yes, you can make things happen, but the problem is the lack of career jobs. The kind where you can buy a modest house, or at least rent without doubling up, and feed a couple kids. Those are the ones being outsourced. An abundance of minimum wage jobs just to hang on may work for a year, maybe two. And yes, in the past people survived on odd work in between jobs. But now, I don’t see any jobs at the “een” end of “between.”
Drumminj, I was unemployed for a year as well. I was lucky in that previous work experience gave me an “in.” And that’s how I think of it: LUCKY.
The Chinese worker isn’t complaining?
Did you miss the recent riots?
but the problem is the lack of career jobs. The kind where you can buy a modest house, or at least rent without doubling up, and feed a couple kids. Those are the ones being outsourced’
the jobs being outsourced are the jobs that are easy to define, the ones left here are the high stress wear many hats jobs.
you can thank the internet for this steady white collar job outsourcing. even if its complicated if its easy to define like “design me a mother board to these specs” it goes off shore, if its’ I don’t know how to design it yet how can I spec it , it stays here.
The problem is the 30-40 year old, college educated, ex professional, looking for work. He wont get hired at a minimum wage job because they think he wont stick around, and those are the only jobs out there. My neighbor applied for a min wage job at a bakery, 130 applicants in SLO, a very expensive town.
you know…4 to 5 years after the housing crash began…i still cannot believe that the subsidization of the housing industry by our children and grandchildren is public policy.
It’s mind boggling and it has just about broken my will.
I’m with you.
+1
We need to fumigate this place for them.
That sunk in relatively quickly w/the help of lots of late night 2006/7 hbb reading, a bit of heavy drinking so I didn’t go nuts, and realizing the next day everything Mom and the social institutions had taught me was mostly smoke and mirrors. Once that smoke and mirrors cleared, the dots seemed to fall into place. It did take about 9 mos for the feeling of absolute horror to subside made worse by the fact that at that point no one but my husband would take me seriously when I tried to share the info. I see now that the PTB see us as a just a commodity where our production ability is to be harvested or put to fallow, really not human at all.
What shuts us down for a bit at this point is the the out of sync socially approved denial. For us after 5 years of studying it daily we’ve lost our patience w/ people who don’t/won’t understand any of what’s going on and avoid making their own preparations. It’s gotten to the point I avoid certain people. I just can no longer stand how willfully stupid they are about it in the face of what is now such overwhelming evidence.
It’s mind boggling and it has just about broken my will.>/i>
Recently, for the very first time, at a get-together, I said something about corrupt politicians being influenced by some industry, and a couple of people suggested I should wear a tinfoil hat.
I was pretty surprised the concept seemed so fringe-ish. But these were all people who were doing well, all current or former homeowners. I didn’t push the issue, never do. If I want to vent or share my true feelings, I come here
But this again highlights the dichotomy in society - those who are doing well, with jobs, don’t bother to look behind the curtain until they are personally affected.
But this again highlights the dichotomy in society - those who are doing well, with jobs, don’t bother to look behind the curtain until they are personally affected.
Absolutely. And they assume that those who are hurting are simply lazy.
We have a winner.
“I didn’t push the issue, never do.”
I do but not in an argumentative sort of way. I’ll do a quick brain stem bandwidth ping and if it comes back with a low number its not worth my time. If I get a high number then I proceed with facts as I see them. If they have an open mind then I proceed.
Still the results overall are dismal.
…and the PTB know this as well.
… those who are doing well, with jobs, don’t bother to look behind the curtain until they are personally affected.”
In truth, I was one of those idiots until it caught up with my reality. It took a 2X4.
Neuromance, that was a good post. What the hell was I thinking back then.
We were smart enough to sock money away during some fruitful years, but never expected a tsunami.
Nobody suspects the Spanish Inquisition!!
I always do
those who are doing well, with jobs, don’t bother to look behind the curtain until they are personally affected.
Well..if we’d stayed where we were we’d be in a paid off home right now w/taxes half of where we’ve moved to. ($5500) We’d be in a very strong financial position* right now especially once I returned to work full time which I’m looking at now. In that home we were able to save a pretty decent amount per month w/the piti on just hubby’s income. With the paid mortgage add $1000/mo additional savings. My income would be even more gravy.
Yet we knew something was very very wrong since about 2000.
*It was a plastic Stepford community. Just wasn’t us. Still laughing how those bloviating a-holes told the Commodore of another yacht club he had to move because he was sitting at “their” table. As I heard he tells the story by an intimate, they were total jerks. And that man actually sailed. They just got in on the social network.
I see now that the PTB see us as a just a commodity where our production ability is to be harvested or put to fallow, really not human at all.
Exactly. The Davos crowd sees us as little more than their property.
“The housing market has not bottomed because the American consumer is not stupid”:
http://finance.yahoo.com/blogs/daily-ticker/housing-market-hasn-t-bottomed-because-american-consumer-160508402.html
People Are Smart
No kidding. They were stupid enough to buy at the top of the bubble.
Like the cop car behind the billboard, the “top” can only be seen in the rear view mirror.
If you couldn’t tell we were in a housing bubble that was about to pop around 2006 your name must be Bernanke.
What is odd is Bernanke is a freak’n genius. Harvard top of class, MIT PhD. And he studied the Depression.
Much more to the story.
They couldn’t say no could they?
Why is that?
People by and large are sheep.
You ever see sheep run together in fear or greed (for food)?
It’s not orderly, but a stampede. People stampeded toward housing, with no eye toward logic and math when the overall perception was that housing was good and going up.
And now they stampede away from housing now that the overall perception is that housing is bad and going down.
The question is how long until the herd changes direction again?
“Your power chair will be paid in full!”
As long as this commerical still plays on TV the “crisis” will continue unabated.
Just a tiny indicator of the behemoth iceberg that is an out of whack sense of entitlement vs reality.
Has there ever been an entitlement that was abolished?
Lets see:
Federal college grants used to accessible to the middle class. Now you need to be dirt poor to get a Pell Grant.
State subsidies to State U’s are in free fall and tuition rates are rising rapidly.
The middle class used to be able to deduct consumer interest from their federal income tax.
Tuition is rising rapidly because the government still subsidizes student loans, which are easy to get and the universities know it. Before you accuse me of being a right wing nut, I support state assistance for college students. I just do not support unconstrained costs at the university level which is driving student to poverty through government sponsored loans. Many students are functionally bankrupt before they find their first job. You can’t tell me that $188/hr is reasonable for tuition.
Also the mandatory live on campus, in dorms where your personal space is invaded (in multiple ways) and you’re changed the equivalent rate of a Marriott hotel for a Motel 6 accomodations. Dorms are great for social causes but there has to be a better way to get the costs comparable to an off-campus apartment.
“Tuition is rising rapidly because the government still subsidizes student loans”
That is more applicable to private schools than state U’s but I will agree that it is a factor.
But that the subsidies to state schools are shriveling up is a FACT. Here in the Centennial State the state subsidy is projected to hit ZERO in just a few more years (its about 2K per year now). Because of this some of our State U’s are considering privatizing.
Thank you for posting that liz.
I cringe every time that commercial airs which is quite often in this market.
While power chairs are still being fully funded w/our tax dollars the waste is not being driven from the system.
When you think about it though, a scooter is probably a lot cheaper than orthopedic surgery (say a hip or knee replacement).
It bothers me too though when I see the commercials for the scooters. FWIW, I don’t seem to see a lot of them in my neck of the woods, but Colorado does have the distinction of being the “leanest” state in the nation.
What bothers me is that a lot of the Medical drugs today actually cause the conditions that one ends up needing a
scooter for . I have been researching lately the side effects of a number of the big drugs .
So many diseases are due to faulty diet ,life style ,and toxins in the environment ,and dental toxins also .
This medical drug industry and cancer industry is at least a 300 billion dollar a year business .The supression of information is ongoing about this business .
Doctors have to do the standard of care or the AMA or FDA comes down on them .
There is this Italian Doctor that thinks he knows what cancer is and they are supressing his research findings in spite of him curing cancer in four days cheaply . The mainstream news isn’t allowed to discuss this stuff .
I watch what they do to older people once they have destroyed their health by long term use of many drugs . Than they are hung out to dry and turned over to hospice or
a old persons home that takes every penny they have left .
People got into this whole psychology that a pill was going to solve any health problem that came up and they didn’t take personal responsible actions concerning their own health ,
People cling to the Medical world because they know they have dope and pain relievers and they are good in emergency situation such as car accident when your bleeding to death ,
No doubt at times they are life-saving when it comes to infections and they can set a broken leg real good .
When you look at big billion dollar business like the food industry and the Drug industry ,supression of information is the name of the game . This fostering of dependance is
frightening .
All the older people I know trust the doctors a lot while they are led to the slaughter . I have known a lot of people that were thrown into emergency after they started taking a new drug . One drug designed to address the side effects of another drug no doubt .
Medicine has been corrupted ,they don’t shoot for cure they shoot for dependance on a drug that just masks the real cause of the disease .
A new cancer drug that just came out cost 100 k a year and it only extends the life for 4 months . Thats not a success .
Not only do we have the most expensive medical care in the world ,our results aren’t good in a lot of areas when you think about the outlandish costs .
When history is reviewed somtime in the future regarding this period of corruption in Medicine ,it will be a mind-blower ,
I wonder how many scooters are given to people who are just lazy and obese and have associated complications facilitating qualification? (When I go to WalMart I can’t help but think of this.)
Housing Wizard
Everything in your post is factual. My father died of a statin related parkinson’s, and my mother is on 12 meds, instead of teaching her better lifestyle habits.
I’m glad we got rid of the TV in 1992. Those commercials for chairs, scooters, medicare type claims, don’t work on the brick and mortar retail level. The paperwork is unbelievable. We had to pay $900 out of pocket for my father’s special electric chair. The store wanted nothing to do with a medicare claim. Those commercials are a “medicare mill” business model, for sure. In reality, the drug co should have paid for his chair. They caused it.
I’m the type who believes that much of our medical system is set up to get us on drugs so they can make money monitoring us. Which is why I avoid said system as much as I can.
For instance the medical people were saying eggs were bad and sun is bad and all that . Well ,eggs are a good food and the sun is good for you . They were saying fats were bad so people went on all these low fat diets and
than they didn’t get the fat they needed for their brain so than the Doctors put the person on anti-depression pills .
Bad fats is what is bad and good fats are what the body needs .
This is all about big money .
The medical system has been hijacked ,just like the
financial systems were . You try to go up against big money systems and you are taking on systems with not only lobbying power but advertising power .
People are starting to reject the corruption . Like anything when the scales tip to much in one direction ,balance is needed .
You are all missing the bigger picture.
It’s a lot more fun to make fun of people on lame-azz scooters, than it is to make fun of people with bad knees/hips.
Especially when the scooter disappears under about 500 pounds of fat rolls.
(Disclaimer: I weigh too much, but……WTF, over??????…..”)
X-fixer, you do know that the carbs are the enemy? Lots of books on this. It’s worth a shot.
Housing Wizard, Slim, and oxide-
All your posts were spot on.
You all have a solid knowledge base.
Awaiting, sorry about your Father . I have seen it all . A Dentist killed my father , my Mother died in the hands of
a incompetent Doctor and my spouse was overdosed on a bone builder ,than went into a stroke and eventually died .
Those statin drugs are crap ,the side effects are bizarre .
I see it all the time also because Im around a lot of older people . Add to the mix the insurance companies and their evil influence and its just to corrupted .
Not to put down any medical personel that is doing good work of course .
I sure see alot of handicap stickers on fancy cars around here. handicap sticker on a corvette just seems wrong somehow
http://www.fatsickandnearlydead.com/
great doc if you are fat or taking Lipitor or other junk.
“He that takes medicine and neglects diet, wastes the skill of the physician.”
- Chinese Proverb
Income declines, spending moderates in Aug.
Sept. 30, 2011
WASHINGTON (MarketWatch) - Personal income declined in August and consumer spending slowed, the Commerce Department reported Thursday. Personal income fell 0.1% in August, the largest decrease since October 2009. Consumer spending rose 0.2% in August after a 0.7% gain in July. Real consumer spending, adjusted for inflation, was flat. Economists were expecting a weak income and spending report in part because of the poor August nonfarm payroll report, which showed no net new jobs created and a decline in average hourly earnings, Wall Street economists had expected a flat reading for incomes and a 0.1% gain in spending. The savings rate fell to 4.5% from 4.7% in July. This is the smallest savings rate since November 2009. Wages and salaries fell 0.2% in August. Excluding inflation, real disposable incomes fell 0.3% in August, the biggest drop since November 2009. The Fed’s favorite measure of inflation, the personal consumption expenditure price index, rose 0.2% in August compared with July and is up 2.9% in the past year. The core PCE rate rose 0.1% in August, weaker than the 0.2% gain forecast. The core PCE index is up 1.6% year-on-year.
Imagine what the numbers would be w/o squatter rent.
China’s quiet unraveling.
http://finance.yahoo.com/blogs/breakout/china-quietly-unraveling-world-frets-over-europe-183900363.html
What happens to various dollar-denominated assets if every major economy in the world goes into the crapper. Stocks, sovereign bonds, muni bonds, corporate bonds, non-food commodities, food commodities, cash? Oh, and real estate?
IOW, where do you hide?
My guess is that dollar denominates assets would become stronger as investors would flee to the relative “safety” of USD denominated assets.
It’s like I’ve said before, you can suck, but as long as you suck less than everyone else you’ll come out on top.
Sorta like the old saying, “I don’t need to be faster than the bear, I just need to be faster than YOU!”
Exactly!
China just launched the first module of its new space station.
Don’t count them out too soon.
I sure hope they aren’t troubled by all the trash we left up there.
Even Soros says we need to save the banks. WTF?
http://finance.yahoo.com/news/Three-steps-to-avoid-a-global-rb-3612249002.html?x=0&sec=topStories&pos=1&asset=&ccode=
“Both the banks and bonds of countries such as Italy and Spain need to be protected …”
Because the are the next two dominoes. And they are pretty big ones too, much bigger than Greece.
I was actually concerned about my daughter’s choice of study abroad location (Spain) when she chose it earlier this year. Mostly worried that she would be there while during the meltdown and that there would be strikes and protests. The other choices would have been Latin American countries, so for safety/security reasons we stuck with Spain.
For now I believe she will dodge the bullet as I don’t expect Spain to do a Greece until next year.
I have no problem saving the banks.
I have a big problem saving the CEO paycheck, the stock holders and bond holders.
We should have taken over the large banks after letting them fail and immediately put them up for sale. Stock holders loose everything, bond holders can negotiate, CEO get’s fired.
What should have happened in 2008:
-Banks should have been allowed to implode.
- The president announces the formation of several, regional government-supported “New Banks of the USA”, which will step in and do what banks were supposed to do in the first place, be a support mechanism for the larger economy.
- Along with the announcement, make it clear that these banks will be sold to the highest bidder at some point in the relatively-near future. People who had any position of authority at the imploded banks will not be invited to bid.
It is not beyond imagination that we will have another chance to make such decisions. It’s not beyond imagination that there will be less trusting go-along the next time FedGov/Wall Street says “quick give me trillions of dollars or the world will end tomorrow”.
We do “contingency planning” for everything else. Even for the remote possibility that a killer asteroid, or aliens from another galaxy may appear.
Since nothing has been fixed, banks blowing up again seems to be a lot farther up the probability scale.
There’s no doubt in my mind that there’s always been a plan sitting around to temporarily nationalize the banks. The first time around, they chose to go with Plan “B” because it bailed out their buddies, and they didn’t fear for their lives (either politically, or literally).
BS us once, shame on you;…….twice,……
Does anyone else think BofA is going down? Look at the news the last 6 mos. Layoffs, raising fees, Buffet deal…
Soros says what is good for Soros.
What really amazes me is that these companies which have destroyed so much wealth, and whose executives have made such vast sums from doing so, have government protection.
A worldwide shadow banana republic.
The Kennedys and Bushes are not so different from the Duvaliers.
“Soros says what is good for Soros.”
+ $ Billions
End of the Eurozone?
Is the End Near for the Eurozone?
Published: September 14, 2011 in Knowledge@Wharton
Warning signs are flashing red. Bond markets are projecting a 98% chance of default on Greece’s debt. Stock prices for French banks, heavily invested in that debt, have plunged 10% in recent days. Has the European debt crisis hit the breaking point, with Greece — and perhaps others — soon to exit the eurozone? Or, will officials once more cobble together new agreements that keep Greece in the club and prevent a huge contagion effect likely to cripple an already slowing global economy? And might Europe be better off splitting into two economic co-operations zones, roughly along north/south lines? In an interview with Knowledge@Wharton, finance professors Franklin Allen and Bulent Gultekin offer their insight.
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2848
I think Europe would be better off splitting into two zones
The Ambrose Evans Pritchard plan?
“EMU should not be saved. It should be broken in two, or dismantled, in an orderly fashion of course.
If the authorities can hold together 17 countries in EMU, they are surely capable of holding together a Teutonic Union and a Latin Union — each reduced to a more manageable fit and each more viable.
They are surely capable too of fixing the exchange rates of the two blocs, with a 25pc to 30pc devaluation for the Latin tier. This rate could be held long enough to stabilize the system and nurse the South back to health. If this was managed with an ounce of common sense and a firm hand, the apocalyptic outcomes so much in vogue could easily be avoided.”
http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100012223/frau-merkel-it-really-is-a-euro-crisis/
red and blue?
And now, for your End of Week entertainment
Kim Jong’s House Party…..
http://tinyurl.com/3mhbj3s
Bobby Lee?
I highly recommend Barbara Demick’s book, Nothing to Envy. It paints a not-too-pretty picture of contemporary life in North Korea.
With regards from your HBB Librarian…
Another PPT fail on Dow 11,000.
At this point, they’re on a round number losing streak.
I look forward to the games at 10k. And 9k.
And, from the HBB resident movie critic……..
Go see “Moneyball”. And better yet, read the book afterwards.
HBBers will relate to it. People using their brains to gain a competitive advantage, over the herd mired in conventional wisdom.
If you like that, definitely read the other Lewis books. Liar’s Poker is great, as is The Big Short.
The debt bubble continues to explode:
(auto-start video plus article):
http://finance.yahoo.com/blogs/daily-ticker/fico-survey-says-sharp-deep-turn-pessimism-195145746.html?sec=topStories&pos=3&asset=&ccode=
This sucks!
MUST.HAVE.HBB.DURING.DAY.