Bits Bucket for December 6, 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
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Hooray for Socialism!
DECEMBER 4, 2011.
A 500-point spike in the Dow Jones Industrial Average last week, echoed in stock exchanges around the world, is about as loud as the applause gets on Wall Street.
The spike came because the U.S. Federal Reserve found a clever new way to pump more dollars into failing European banks.
It was the sound of capitalism applauding socialism.
The Fed rallied the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank in a scheme to artificially lower the price that European banks pay to borrow U.S. dollars.
Private money-market funds are increasingly fearful of lending to European banks, so our Fed decided it’s up to the central banks of the world to collude and intervene. Even China got in on the act, agreeing to ease monetary policy in response to its own rapidly slowing growth.
The message Wall Street wants to hear is that the Fed will do anything to keep its bloated institutions from collapsing under the growing weight of their own government-aided follies.
As of March 2009, the Fed committed $7.77 trillion to rescuing the U.S. financial system, according to a recent report Bloomberg News put together after fighting the Fed for this data for two years.
No wonder the Fed didn’t want this number out. It’s more than half the value of everything produced in the U.S. in a year.
It’s also about half the size of the national debt that allegedly free-market Republicans in Washington are so busy blaming allegedly socialist President Obama about.
If this isn’t scary enough, the Fed—run by a guy first appointed by President Bush—has now decided that to rescue America, it must rescue Europe, where reckless debts stand like global dominoes in line to topple the whole board game.
We’ve already seen one U.S. firm fail because of its investments in Europe—$41 billion MF Global—and we can only guess what’s next, if not more bailouts, rescue plans, paper money and creative-finance liquidity injections.
None of these things actually do anything to stimulate economies.
As we have painfully witnessed since 2008, jobs, retirement plans and homes continue to disappear.
Banks continue to horde and mismanage the free money they are loaned, and they continue to raise fees and squeeze customers any way they can.
Economists continue to use the euphemism “mixed” in meaningless reports based on artificially improved data.
And our fearless Fed Chairman Ben Bernanke continues to say, “See, if we didn’t do that, we’d be in another Great Depression.”
The only question now is whether the Fed can keep this global Ponzi scheme going throughout our lifetimes, and leave it to our children to suffer, or whether the whole thing will blow any day.
The cruel irony is that if it blows, we’ll get another Great Depression, anyway, with several times more debt than the one we were due in 2008.
The Fed will have saved us from nothing. It will have only shown the world that it was scared.
So scared, it was willing to abrogate justice and free-market principles, and do what Europe’s own leaders—as socialist as they are—have been unwilling to do: Pull out the fire hose and spray more free dollars at the banks.
And then sit back and listen to the capitalists cheer.
http://online.wsj.com/article/SB10001424052970203833104577072610486727428.html - 181k
it was the sound of capitalism applauding socialism.
…
So scared, it was willing to abrogate justice and free-market principles, and do what Europe’s own leaders—as socialist as they are—have been unwilling to do: Pull out the fire hose and spray more free dollars at the banks.
Seems to me that the ones being bailed out are the banks and not the socialist welfare states, who will have “austerity” shoved down their throats while banks buy up assets on the cheap and the bankers get their bonuses.
Corporate communist capitalism.
The universe has a way of setting things right. The vegetables who maintain the Republicrats in office so they can keep the Wall Street Ponzi going with limitless taxpayer liabilities and Federal Reserve liquidity are going to get exactly what they deserve when the whole house of cards comes tumbling down.
Millions in tax free, offshore money?
And it appears we will get exactly what they deserve as well.
Got that right.
“allegedly free-market Republicans in Washington are so busy blaming allegedly socialist President Obama about.”
I never thought I’d see such phrasing in the Wall Street Journal, of all places. Socialism is ok as long as their precious DOW goes up, eh?
lol…free market…there hasn’t been a free market since December 23, 1913.
+1.
The republicans are not free-market and the President is not a socialist. Is it memorable that the WSJ perpetuates these lies?
The President is a crony capitalist. He supports privatized profits and socialized losses. I’d rather have a genuine socialist.
What have I been saying?
I never thought I’d see such phrasing in the Wall Street Journal
Boycott ‘em! + “NO REPEAT CU$TOMER$!”
Wall St. Jaundiced by Ripit MudDick / True American Patriot
Former Wall St Journal owners: ‘We wouldn’t have sold if we had known’
Bancroft family members, who controlled Dow Jones & Company, say they would have resisted Murdoch bid in 2007
Richard Tofel, ProPublica
guardian.co.uk, Wednesday 13 July 2011
Article history
The sale was contentious. Family members questioned Murdoch’s journalistic practices and insisted on appointment of an independent panel to help safeguard the paper’s ethics. There was negative press in the US about Murdoch at the time of the deal in 2007, although nothing to compare with the recent revelations.
The Wall Street Journal is the top-selling daily newspaper in the United States and a brand with global prominence. Founded in 1889, it long dominated American business publishing, becoming the country’s first national newspaper. It routinely ranked in surveys as America’s most trusted print publication.
There’s a very good book called War at the Wall Street Journal.
It’s about the Bancroft era. And the not-so-smooth transition to the Murdoch era. Quite worth the read — your HBB Librarian sez so.
Comment by Hwy50ina49Dodge
2011-12-06 12:04:17
Tanks! Slims
“No wonder the Fed didn’t want this number out. It’s more than half the value of everything produced in the U.S. in a year.”
As if “GDP” is the value of things produced in the US. It is largely things bought with borrowed money. The magnitude of forced debt creation aimed at propping up the global ponzi scheme, just to keep us less than standing still, should be an indication of “everything produced in the US.”
It’s not game over yet, but it has been game changed now for quite a while. Accumulation of debt does not result in growth anymore, anywhere.
‘As if “GDP” is the value of things produced in the US. It is largely things bought with borrowed money.’
Somebody has to produce stuff in order for it to be bought. Unless you own a candy crappin’ unicorn, that is…
Somebody has to produce stuff in order for it to be bought.
And they have to be paid sufficiently high wages to purchase the goods and services they make, which they aren’t and is why the world has excess production capacity.
If my salary had kept pace with inflation over the past 10 years I would be shopping for a new car and planning a nice family vacation for next summer, but as things stand today … fuhgeddaboutit.
I have a daughter and son who are both interested in travelling abroad for Junior year in college. Just how costly is this proposition? Other than that potential expense; our kids’ college experiences are going to be limited such that they live at home; they attend community college first; and they go to a state school. If we are still in Bend, OSU Cascades would be perfect.
Plus as much AP/College credit for high school classes (apparently if you do the right combo of things our district will pay tuition for a student’s community college credits).
Seems like $$ well spent to go over yourself and visit if there were to be enough $$ to do it (I imagine you would like to!), or as a family and see your daughter’s digs/host family?
I remember in 2003 flights were $600 per head for us to go to Madrid; I imagine cost has doubled, while your wage most certainly has not?
My parents took in a wealthy exchange student in 1989 from Alicante. He went on to become a plastic surgeon and keeps in touch. When they went over to visit they were shown hospitality like never before from Francisco’s extended family. Now he beautiful wife (well nothing a nip/tuck won’t cover!) and has a cat named Botox.
Apparently, in Spain, not “every” student flees the nest in order to attend college; and we noted that Spanish multigenerational family situations seemed quite the norm when we visited. We once rented our flat in Santa Barbara to a PHD candidate from Madrid. Apparently it was the first time out of the family home for him, as we had to show him how to use the laundry and he admitted he had never done his own wash and even cooking for himself was a challenge for that matter. Just because you can split an atom does not mean you can make a tortilla if Mom has been doing it for your first 25 years!
It depends on your financial situation and how good your kids are at scrounging for money. I believe the average cost for a summer semester abroad, which is about a month, is around $4000. The student lives with a host family (how much they actually see the family depends on the host family) or in a dorm with others from the same school.
Once you get accepted (there are limited slots), you get to apply for scholarships and loans. If you have good grades and are relatively poor, the school and private donors may cover a large portion.
And you have to be at the school for a while to be able to apply to the program, so doing your junior year overseas directly after two years at a community college is unlikely.
If you find a program not related to your school, but from which your school will accept credits, you might pull it off, but I doubt many of those programs will want all your previous college classes to be from a 2 year school.
I was an AFS exchange student to Europe in the summer of ‘68– I know, I know, some folks have all the luck– and even then the whole proposition was relatively expensive. I think I spent something like $1,500 out of pocket– all the money I’d saved from years of part time jobs and babysitting.
When my son went for the standard six-week stint in high school (2005,) it was around $7K total. This year with the exchange rate fluxuations, the same organization charges about 9K. (Semester abroad in college is the going tuition rate plus about 20% for expenses and incidentals.)
But your post gives one pause. For someone who is not paying the mortgage on one of the TWO houses you own (what percentage of us here own even one, I might ask?) as well as accepting tax-funded food stamps and medical subsidizes for your family, you have a rather cavalier attitude about what constitutes appropriate priorities Perhaps you should encourage your children to get part time jobs and contribute to the family coffers before they start planning those European vacations? Or are you expecting the State of Oregon to give that to you free as well?
The America where unemployed substitute teachers and part time lunch ladies — who actively game the system and crow about it– can credibly consider sending their kids off on a season abroad has come and gone, I think. Or not….
LOL…champagne expectations on a beer budget.
Gotcha. Our high school has an IB program. Maybe being involved in that would help? I know my sister also studied her junior year in high school abroad (Mostly picking apples for her French family). She also went to Bordeaux for her Junior year in college. She also dumped her husband upon reuniting with her French boyfriend, when they took their kids over to spend a year. Husband did not speaky French and she essentially ditched him there.
I believe that the community college has close ties with OSU which has the study abroad programs we are interested in. Most of the 4 year degrees offered here hinge on using the CC for the lower level general ed stuff. Hopefully the drive and motivation will be in place on my kid(s) part to get this experience.
Of course I am a bit of a language-o-phile so I am largely just dreaming vicariously for them. Took them to Spain when they were 2 and 4 years old for a few months so I could attend a language school. Turns out my wife had too much “new in a Spanish city” culture shock to let me attend the courses(it would have been 10 hr days; and she was hesitant to go out with the toddlers into the narrow streets of Sevilla). Plus, she did not speak Spanish like I kind-of did, which was just enough to get by. So we toured the parks on daily walking excursions and spent 2 months with only the wheels of a double baby stroller as transportation; didn’t use a car or even the buses, which was cool. And what an historic city with lovely parks!
But we took up the whole of the sidewalks and had many close calls with buses zooming by, and in her defense she could hardly leave the third story walk up apt I rented us without some assistance, so me attending language school was a tad ill-conceived. Could have hired some domestic assistance, in retrospect.
BTW, no-one in Spain had a double wide baby jogger or would even dream of strapping a 4 yr old into one; but we did it for safety’s sake and to cover the miles on our walking tours. We were quite a sight! They also use the floor/street as the trash can and cleaned up nightly. Allowing toddlers to explore the ground was frowned upon greatly; as was my wife’s breastfeeding of the 2 yr old. They would walk up to her and press her breasts with astonishment. He was weaned on that trip…
TMI, dude.
Which part? A The part about a woman breastfeeding? Ahansen you have a mean spirit and a looser tongue than even I? Maybe I am soliciting reaction and love peeving ya’(not really)I have admitted to a money for nothing attitude that I accomplished by the housing bubble making me temporarily wealthy.
Scoffing at an unemployed substitute teacher(oxymoron perhaps) or a lady who serves food, volunteers the rest of her time actively parenting.
I only own one home and no need to pay the mortgage. Seemed like the safest business to be in as I have slumlorded for going on 2 decades. Wife lost her home. Guess we should have tried to pay that 60x income mortgage even after our housing investments went south.
(i know it was stupid to take out the loan, oh well)
I worked 60 hours a week in another field before one accident completely changed my lifestyle(I know you don’t want to hear my whinging but then consider not attacking me for providing anecdotes to the bits bucket).
Our family has both accepted exchange students and participated in studying abroad. Inquiring about the cost of such for my own children, wanting them to be armed in a global economy with global skills is cavalier, I guess. Ahansen, your disdain has effectively taken the wind out of my self bloviated sails, so its been nice participating in the blog. Providing an insiders prospective from the other side gives you the ammo to shoot me down personally good for you you win.
We aren’t gaming squat. Our time is taken doing the menial jobs we perform; can’t get more $$ right now as our date books are full. Someone has to serve food to the chillun’ guess lunch ladies really do need to be looked down upon in your world.
People talk about the stupidity of draining retirement accounts in order to save a titanic mistake that’s going down anyway. How is reserving 100k of capital in the form of a house that provides a bit of income/or free rent different than foreclosing on a house but keeping the 401k? I managed my $$ alone, that is all.
I enjoy my unemployment. Yesterday I was loafing around with fifth graders, today it is high school. Sorry our income does not pay enough to keep us in the money, but we do legitimately qualify for food stamps and health care for the kids. Have for a long time but only recently have we enlisted the help of a social worker as my wife had medical bills this summer that overloaded us and she went to see what could be done. Mostly for the chillun.
You don’t want me to wish for great things for my kids like going to the dentist and possibly getting the best education we can provide without having significant savings. Cuz I overspent $$ when I was younger?
Hence the question posed; how much does study abroad cost? How better to learn Spanish than immersing oneself in a spanish language culture.
I have a daughter and son who are both interested in travelling abroad for Junior year in college.
It was comparable to the cost of attending State U + room and board. About 7-8K plus airfare. She’s always busted her butt at school and saved up to pay the difference (she commutes from home).
Wonder what tuition will be in 8 more tumultuous years? I think that busting butt, commuting from home, and paying the difference herself is a reasonable expectation, cavalier as I am with $$, I commend you on your parenting.
Don’t want the kids to believe that they are growing up in a money for nothin world. Teaching them that hard work and sacrifice will pay off in spades; understanding another language and culture will put optimism into my heart about their futures. Or they can do something completely different and I would still be happy; my daughter wants to be a teacher! Thanks for the answer BTW.
There are cheaper places to learn Spanish than in Spain.
And no one talking about a college year abroad is going to care that the student did IB in high school. They will care if the student can pass a proficiency exam in the language. You don’t do whole a year (or even a semester) abroad to learn a language. You go there speaking it fairly well and then spend your time studying other subjects in that language to get better at it. Language immersion courses are a month or two.
You can find out about the study abroad programs at the school you think your kids will attend by checking the school’s website. If they have programs, the information (and possibly even the application materials) will be there.
“in 2003 flights were $600 per head for us to go to Madrid; I imagine cost has doubled,”
Your post got me curious, so I did a Travelocity search for Redmond, Oregon to Madrid. The round trip is only $809, after taxes and fees. I just picked a couple dates at random, leaving January 30, returning February 13th. I was surprised at how reasonable the fare is. The funny thing is the breakdown at the bottom of the page:
1 Adult: $261.60 (this is round trip, mind you!)
Taxes & Fees: $503.00
Ticket total: $764.60
Travel Protection-1 plan $44.95
Total payment due: $809.55
So maybe there’s hope, at least as far as affording the flight!
When I was searching for flights to Poland last year it seemed that winter was significantly cheaper than summer. I ended up paying $1500 per ticket with a lot of searching and watching. But it was at the peak of the season.
When MF Global pays a former President $50K for “services” is that part of GDP???
“If this isn’t scary enough, the Fed—run by a guy first appointed by President Bush—has now decided that to rescue America, it must rescue Europe, where reckless debts stand like global dominoes in line to topple the whole board game.”
It helps to keep proper perspective: Remember that Megabank, Inc is on the hook for untold amounts of eurozone subprime loans. Rescuing Europe is tantamount to rescuing Megabank, Inc.
And Europe isn’t going to be “rescued”. They are going to taste the austerity that we have accepted as the new normal here in the US: lower wages, higher medical and education costs, etc.
It’s a Lucky Ducky world.
“education costs”
Bubble
Part of it are the shrinking state subsidies for State U’s. Here in the Centennial State it is projected that in in a few more years or State U’s, State Colleges and JC’s will receive $0 from the state.
Private schools are definitely bubble priced. CSU in Fort Collins projects that once all subsidies are gone that it could privatize and tuition would be about 11-12K per year. Local private U’s Regis (Jesuit) and University of Denver charge about $30K.
10 years ago a year’s tuition at CSU was about 2K. At that point the state went into permament deficits and state U subsidies began to shrink.
In many cases it’s now cheaper to attend an out of state public school under the Western Undergraduate Exchange (WUE) program than to attend CSU or CU in state. My daughter almost went to U of Wyoming.
I wouldn’t be surprised if my son goes to Laramie. As a graduate from there myself I assume he’ll be able to get in-state tuition if he chooses to go there. For now (he’s only 11) he thinks staying in Boulder and going to CU looks good. We’ll see…
In-state tuition rarely has anything to do with being a legacy. There are rules about who gets in-state rates and who doesn’t. You can look them up and everything.
All I know is that UW was specific back in the 90s about grad’s children being able to go in-state, and my wife and I are both grads from there.
WRT austerity and Lucky Ducky world, at least the Tea Party teabaggers cleaned up after themselves and went home at the end of the day.
You sir, achieve nothing and convince nobody with your tired, old class warfare.
Where’s the objective, sociological treatise already? You’ve had five days to deliver…
“If this isn’t scary enough, the Fed—run by a guy first appointed by President Bush—has now decided that to rescue America, it must rescue Europe, where reckless debts stand like global dominoes in line to topple the whole board game.
We’ve already seen one U.S. firm fail because of its investments in Europe—$41 billion MF Global—and we can only guess what’s next, if not more bailouts, rescue plans, paper money and creative-finance liquidity injections.
None of these things actually do anything to stimulate economies.”
What they are doing is not only protecting, but growing the wealth of the super rich, at the expense of the masses. That’s it. The top 1% are having a field day, amassing fantastic wealth over the course of the past 5 years.
And the more austerity is doled out to the 99%, the more wealth the 1% gets to amass.
How is a central bank printing money to hand to foreign private bank CEO’s and stock holders in anyway socialism. This is pure BS. I suggest the author take a political sci class.
As with most Americans, he probably mistakes communism for socialism,
I’m sure he meant corporate communist capitalism.
We’ve already seen one U.S. firm fail because of its investments in Europe—$41 billion MF Global—and we can only guess what’s next, if not more bailouts, rescue plans, paper money and creative-finance liquidity injections.
And there you go, just like Lehman they need a bank collapse to justify their bailing out the elite.
Fed may give loans to IMF to help euro zone: paper
(Reuters) - The Federal Reserve, along with the 17 euro zone national central banks, may help provide the International Monetary Fund with funds that could be used to aid debt-ridden states, a German newspaper said.
BERLIN | Sun Dec 4, 2011 5:29pm EST
Die Welt cited sources close to the negotiations as saying the euro zone central banks could pay at least 100 billion euros ($134.2 billion) into a special fund that could be used for programs for nations struggling to control their debts.
“Also other central banks, for example the U.S. Federal Reserve, are apparently prepared to finance a part of the costs,” the paper said in an advance copy of an article to appear on Monday.
Treasury Secretary Timothy Geithner may discuss the idea in the coming weeks when he visits Europe, the paper said.
The idea is for the IMF to be able to match the new firepower of the euro zone bailout fund, which is being leveraged.
One senior euro zone official has said that no amount had been discussed at the political level.
The euro zone wants to boost the IMF’s resources so the fund could provide a credible backstop if Spain and Italy were to need an emergency loan program.
Geithner is to hold talks with several European leaders in the coming week and is set to urge them to take decisive action at an EU summit aimed at preventing the euro zone debt crisis spiraling out of control.
A Treasury official said on Friday that the United States was not planning to make bilateral loans to the IMF and the lender’s resources were adequate. (Writing by Madeline Chambers; Editing by Dale Hudson)
http://www.reuters.com/article/2011/12/04/us-eurozone-imf-fed-idUSTRE7B30X320111204 - 99k
Yes, the tried and true method to fight too much debt, borrow more money. As all so-called Keynsians know, if that fails it was because you didn’t borrow enough. If any medication fails to remedy the disease it is always because the dosage was too low.
As other have pointed out, the Keynesian idea is to pay it back during the “good times”, but that rarely happened and as Dick Cheney and others have said: “deficits don’t matter” (let the good times roll!).
We’ll see how long the USA’s “safe haven” status keeps the borrowed money flowing into the country at low interest rates. I think that there is still some time left, years, maybe even decades. After that expires … things will get “interesting”.
Keynesian idea is to pay it back during the “good times”
I know, that’s why I said “so-called Keynsians”. For the so-called Keynsians times are NEVER good enough to pay back debt.
It is difficult to tell when the mood changes and the realizations sets in that there is no way the debt can ever be paid back. In my view anybody buying long term treasuries is a sucker. Sooner or later investors will realize that all paper assets are just that, paper. Then a rush for the exit will set in. That should benefit hard assets including real estate, PM and some stocks. Trillions of imaginary paper wealth build on empty promises flooding into Billions worth of “hard assets”.
Never good enough to pay back debt, but always good enough to cut taxes and start wars.
http://www.debka.com/article/21545/
The neo-cons have their marching orders.
For the so-called Keynsians times are NEVER good enough to pay back debt.
Uh Medicare prescription drug plan, multiple wars, Defits don’t matter Cheney.
Grover Norquist - Starve the Beast
The Keynsians aren’t the problem.
I know, that’s why I said “so-called Keynsians”.
Agreed.
Borrow and Spend - the worst of both worlds. The culimination of short term thinking.
When times are good, Joe Sixpack doesn’t want to upset the apple cart. Any change of the system is viewed with suspicion. It might stop the party bus.
Only when times are bad do people start taking a look at the shenanigans. Hopefully this society has the nerve to take on the Wall Street warlords.
The neo-cons have their marching orders.
Eyes keep tell ya them “TrueFiscalCon$ervative$™” + “TrueReducetheDeficitNow!…Today!™” repubicans have an awesome game plan:
Privatize USA mail delivery Now!…Today! Hurry! Hurry! Hurry!
that possession of the drone is more than just a major intelligence coup for Tehran; it has acquired an important military edge before any overt military operation has been launched. Western and Israeli war planners now have cause to fear that Iran has penetrated the heart of their most secret intelligence and electronic technological hardware for striking its nuclear infrastructure. If Tehran is capable of reaching out and guiding an
American stealth drone into landing from a distance, it may also be able to control the systems of other aircraft, manned or unmanned.
This feat recalls Hizballah’s surprise attack on an Israeli missile boat in the 2006 Lebanon war when its Chinese-made shore-to-ship C-802 missile was enabled by Iranian-manned coastal radar interference to override the ship’s advanced electronic defense systems and so put the Israeli Navy out of action within range of the Lebanese coast.
According to an expert quoted by the Telegraph’s senior military commentator Con Coughlin, the campaign of assassinations, cyber war and sabotage of recent weeks “looks like the 21st century form of war.
sammy–
We were getting stealth overflights about three weeks ago, so xmastide is probably just about right. Whoever picks these dates has a really cynical sense of humor….
A Treasury official said on Friday that the United States was not planning to make bilateral loans to the IMF and the lender’s resources were adequate.
Suggest everyone read “House of Cards” about the collapse of Bear Stearns. The level of Fed and Treasury Department dissembling, and the degree of collusion between Hank Paulson, Timothy Geithner (then with the NY Fed) and JP Morgan to screw Bear Stearns shareholders and pay bondholders back 100%, while passing Bear’s prime assets to JP Morgan and saddlling taxpayers with $29 billion in toxic subprime mortgages, says all there is to say about our current financial system.
Sounds like it’s turtles all the way down once again…or is it?
FT dot com
Last updated: December 6, 2011 2:22 pm
S&P adds to pressure for eurozone deal
By Quentin Peel in Berlin
Standard & Poor’s, the US credit rating agency, followed up its surprise warning to put 15 member eurozone states, including Germany and France, on credit watch, with a threat to downgrade of the euro area’s emergency bail-out fund.
The €440bn ($588bn) European Financial Stability Fund shares the triple A rating of its government backers and has played a key role in the rescues of Greece, Portugal and Ireland.
But on Tuesday S&P warned that it may lower the top credit rating if any of its guarantors have their own debt grade lowered.
…
Again it’s pretty clear that the rating agencies due what the masters want them to do. Right now that’s putting pressure on the PIIGS to hand over political control .
Spains debt to GDP is 70 ie less than US, germany, france
Japan’s is over 200 yet we don’t get daily downgrades and press coverage.
Right now that’s putting pressure on the PIIGS to hand over political control.
The Banksters are going for it and are starting with the low hanging fruit. Once they own the PIIGS they will go after the bigger fish (Italy is pretty big actually, I was surprised that it folded so easily)
Here is some other interesting points
Country spending/GDP 09 Interest rate 10yr
Italy 50 6
Portugal 50 12
Greece 50 18
Spain 45 6
vs
Denmark 58 2
France 57 2.5-3
Finland 55 2.5-3
Austria 53 2.5
Belgium 53 4
Sweden 52 2
So countries with higher spending vs GDP and many with lower debt/gdp France 89 vs spain 70 per economist are paying much lower rates on their 10yr notes. This tells you everything about what’’s going on. This is a power grab. A manufactured credit event to give Germany and central banks leverage to take over these peripheral countries.
I didn’t get the tabs thing to work
First 2 digit # is spending per GDP the rest is interest rate on 10 yr notes.
Standard & Woe’s = “True$erialEnabler$™”
Yosemite Sam [to Bugs Bunny]: I hate you!… Ooooooooooooooooooh!!!,…come back here, ya varmint!,…Iffin’ you does that once more I aint-a goin’ in after it!
Thousands protest against Putin after Russia vote
December 6, 2011, 8:55 am
MOSCOW (Reuters) - Several thousand people protested in central Moscow on Monday against what they said was a fraudulent parliamentary election, shouting “Revolution!” and calling for an end to Prime Minister Vladimir Putin’s rule.
The protest, a day after an election in which Russians sharply reduced the parliamentary majority held by Putin’s United Russia party, appeared to be one of the biggest opposition demonstrations in Russia in years.
Protesters initially gathered in the rain on a tree-lined boulevard where they had permission for a rally. They denounced the vote as shameful and shouted “Russia without Putin!”
http://au.news.yahoo.com/world/a/-/world/12249521/thousands-protest-against-putin-after-russia-vote/ -
Putin is not the most benevolent leader to ever come along, but he knows how to keep the worst of the oligarchs in line, if not in jail.
“…the worst of the oligarchs in line, if not in jail.”
The worst being those that didn’t fill Putin’s pockets full of money.
Of course!
Realtors Are Liars®
Congress Are Whores®
+100
And here’s the fun part. Any law that outlaws bribes, oops, payments by corporations and wealthy individuals to congressional re-election campaigns would have to be passed by…CONgress!
It’s time to Occupy Capitol Hill.
I spoke too soon.
http://www.politico.com/news/stories/1211/69847.html
+435
US drone lost over Iran
I know there are plenty of conspiracy theories out there but did anybody watch Beavis & Butthead? The episode where they visit an Army base and manage to get into the drone control room? If you haven’t, its well worth watching.
Most likely mechanical failure.
It’s probably fairly easy to jam the control channels and then watch it crash, too.
If those drones don’t have a “lost comms, return to base” subroutine in them for exactly such a situation, then we are getting _seriously_ ripped off in what we are paying for them.
That wouldn’t be rocket science to implement.
It would pretty much have to rely on GPS, which isn’t hard to jam or spoof.
FedReserve didn’t know right? Isn’t that the reason for this “study”? Typical Iying moneychangers.
“At the peak of the boom in 2006, over a third of all U.S. home purchase lending was made to people who already owned at least one house. In the four states with the most pronounced housing cycles, the investor share was nearly half—45 percent.”
http://libertystreeteconomics.newyorkfed.org/2011/12/flip-this-house-investor-speculation-and-the-housing-bubble.html
‘Longstanding tradition in the mortgage lending business and the predictions of economic models hold that investors will quickly default if prices begin a persistent fall. This is what happened starting in 2006, as the charts below show.’
And here’s one aspect these guys don’t like to address; if you refinanced at boom prices, you were also betting on continued appreciation. In some areas refi’s account for the majority of foreclosures.
Those economic models did just a fine job for LTCM and in foreseeing the 2008 crash. Garbage in, garbage out.
The quantitative models were just a layer of obfuscation, written in the language of mathematics, to give it an air of authority and prevent the lay folk from truly understanding it.
In hindsight, they were truly and utterly complete crap. Obfuscation.
Speaking as someone who majored in economics, I heartily agree.
And, correct me if I’m wrong, but the mathematical formuals used in economics seem to not be as elegant as those used in the physical sciences or engineering.
Economics tries to model human behavior by describing aggregate results through graphs and charts, and trying to fit equations to the data in order to extrapolate future behavior outside of the data set. Physical sciences do the same for physical phenomena. As such, physical science can examine the natural world more minutely and thus come up with cleaner models because they can isolate simpler systems.
Engineering is sort of in the same boat as the social sciences in one sense - they are looking at complex systems and trying to extrapolate their behavior by deducing mathematical descriptions about that aggregate behavior. For example, a loaded girder’s behavior can be described by a net force pointing down in the center of it. No attempt is made to identify the behavior of the girder at every millimeter across it. It’s calculus in a sense - the infinitely small slices result in a net result, a limit which describes the entire system.
Social sciences yet again look at an aggregate of aggregate complex systems - an aggregate of humans - and tries to create models for their behavior.
And in all that error, all those assumptions, there is a lot of room for guesswork, and also obfuscation.
I can write a paragraph in English about expected human behavior or several pages in mathematics with scores of incorrect assumptions and accumulated error. But because it’s mathematics, and as such a language accessible to a much smaller group of people, if someone questions it, they can merely be labeled as ignorant.
Incorrect assumptions plus accumulated error, all behind elaborate math led to an impenetrable, obfuscated shield. Had the models been annotated with descriptions of what the thinking was, what was being described, it would have been the quants who were laughed out of their offices.
Baysian much?
” In some areas refi’s account for the majority of foreclosures.”
What most of my Palm Beach County records searches show that is the case here. To the tune of over $500k (as shown from county records several times on this blog) is the case with Palm Beach Gardens homeowner Lynn Szymoniak that exposed the now infamous robo-signer Linda Green on 60 minutes.
I guess that is why we need to have underwater refinancing at cut rates — to prevent the boom price refinancers from going into foreclosure.
“I guess that is why we need to have underwater refinancing at cut rates — to prevent the boom price refinancers from going into foreclosure.”
Lynn Szymoniak doesn`t want to refinance, she wants a free house with a $500k signing bonus. That will be the biggest problem with the revamped turbocharged HARP program. They want Deadbeats to refinance and the Deadbeats want free houses.
“Lynn Szymoniak doesn`t want to refinance, she wants a free house with a $500k signing bonus.”
I forgot to mention that I am sure after Lynn Szymoniak recieved clear title to her house with a $500k signing bonus she would turn around and sell it for $750k because after all….
Lynn is not just going to give it away.
They want Deadbeats to refinance and the Deadbeats want free houses.
Eventually the non payers will get kicked out.
Did the non-payers LIE on their mortgage apps?
I’ve recently looked at refinancing the Arizona Slim Ranch. Only thing stopping me are the closing costs, which are around $2k. I can think of many things that I’d rather do with that money.
I’m looking at accelerating payments on the principal instead.
Slim, a great way to do this comparison is to compute two side-by-side amortization tables.
One is for your refi scenario, in which you get a new loan low at the new lower rate, and pay the closing costs in cash.
Along-side that, compute the amortization of your current loan if you took the $2K in the closing costs, and instead applied them to principal now.
That’s the best apples-to-apples comparison, I believe.
Both have the same cost today. And by comparing the balances side-by-side, you can see when the refi pulls ahead in terms of providing actual financial benefit.
From that point on, you came out ahead with the refi. It’s worth doing if you have the funds available, and will be in the house for that long.
The next wave of investor defaults will be those loans originated in 2009/2010. As prices fall more go underwater. Then it will be 2011/2012 loans. This downhill trend will continue until the shawdow inventory ceases to exist, and a true market value can be established.
http://news.yahoo.com/greek-police-fire-tear-gas-protesters-athens-125450634.html
Greeks, who have long since had any semblance of morality and integrity flushed from their society by decades of socialist malgovernance and votes-for-entitlement patronage, are not reacting well to bankster austerity demands.
In typical sheeple fashion the populance are going head on against the police while the ones responsible for the crisis get to party on.
http://www.youtube.com/watch?v=lFd0hztEUWk
Ah, but riot dog has entered the fray.
Keep in mind, Combotechie, “the ones responsible for the crisis” were voted into power and maintained there by the sheeple. As is the case in the US.
And how much did big money and a consolidated media play in pulling the wool over the peoples eyes. GS was called in to hide the debt problem. Current leader of Greece was not elected, nor is the leader of Italy.
Sorry, I’m not giving the sheeple a pass just because they relied on the MSM for their news. Or because most of them are congenitally stupid and amoral.
“The most effectual engines for [pacifying a nation] are the public papers… [A despotic] government always [keeps] a kind of standing army of newswriters who, without any regard to truth or to what should be like truth, [invent] and put into the papers whatever might serve the ministers. This suffices with the mass of the people who have no means of distinguishing the false from the true paragraphs of a newspaper.” Thomas Jefferson to G. K. van Hogendorp, Oct. 13, 1785.
Also see my posts above supporting the fact that this is a manufactured power grab. They allowed the credit bubble to form, nurtured it, hid it from the people and investors via GS accounting help and now they are amplifying it using WS to grab power from the PIIGS.
I’m pretty sure this is not what the people had in mind, and they have little control over. Greece has the GDP of florida not hard for some large central banks to manipulate.
http://market-ticker.org/akcs-www?post=198637
Revising history: Why there have been no prosecutions of Wall Street swindlers or accountability for regulators who turned a blind eye to their fraud and criminality.
Corzine is one of the greatest benefactors of Obama. Former GS man, then the helped to ruin NJ and now stole billions from customer accounts. They only reason Madoff is in jail is because he never gave a cut of the loot to the politicians/crime cartell. Otherwise his behavior was perfectly acceptable. Stealing money from savers/investors is no longer a crime in this country. To the contrary, it is encouraged by Congress and Wall Street. Examples are:
GS sells crap to own clients, then bets against them.
Robo traders executing millions of trades a second with holding time of mili seconds. Members of Congress doing insider trades. $7.7 trillion in bailout money from the FED at 0% interest…and on and on.
I am cashing out all of my IRA funds and buy “stuff” with it. I no longer have enough faith in the system to put my savings at risk.
The story that the Koch Brothers got a heads up before the MF global collapse tells you one thing. Big money only has allegiance to big money.
Stuff. Shiny, disk-shaped objects? FMJ projectiles and the means to launch them? A remote piece of land?
Jetzt bin ich ein Europer!
Dec. 6, 2011, 2:10 a.m. EST
What happens in Europe won’t stay in Europe
Commentary: From America to Asia, we’re all part of the euro zone now
By Satyajit Das
SYDNEY (MarketWatch) — European summits – more than 20 at last count — have produced little. The planned summit on Dec. 9 may well be the last chance for euro leaders and Euro-crats to avoid financial disaster. Unless European leaders overcome their common sense deficit, as intractable as some budget and trade deficits, this may not end well.
Satyajit Das.
What happens in Europe will not stay in Europe.
…
It’s all about identifying the bagholder. Who’s going to pay the bad loans and how.
If these big financial companies went away and their leaders disgraced, I’d think new companies would spring up pretty quickly in their wake.
There are two options - austerity or inflation. That’s pretty much all I see.
All this song and dance is just theater to decide on which route to pursue. If the choice is a temporary freeze in the financial system versus inflation, I think the global system can work through the former much more easily than it can work through the latter.
With fiat currencies… I think going the inflation route is playing with fire. Confidence is of the utmost importance with a fiat currency.
Bad Chile checking in:
My house tried to kill me this weekend. I had a bunch of diseased trees taken down, but some small (10′ - 20′ tall, 2″ - 6″ diameter) trees remained. Father-in-law agreed to help. Last tree going down rotated off the stump as I was cutting and I didn’t jump fast enough.
Saftey glasses and a hard hat saved my eyes (wooohooo!) but five stitches in my ear weren’t much fun.
Makes my statement “I plan to spend the rest of my life in my starter home” back in May hit too close to home.
I like my house, I like the location and the lot (very private despite being a short drive to a major metropolitan area), but I sure wish I was still a renter right now.
Be careful, y’all.
I was doing some volunteering this weekend and the woman who hosts our cast party year after year (giant place in NW DC) was talking longingly about selling it and moving into an apartment. Not until after the last kid is in college, but not too long after that. They bought in the late 90s so no issue with being underwater and the place is wonderful though far too big for a couple. I’m not sure if she really meant renting or buying a condo. She wasn’t sure if her husband would like the idea.
It was kind of nice to hear someone that wealthy longing after a small part of my lifestyle.
I was reclining on my couch the other day thinking about what it was I wanted in a house. I’d like to have a place that’s comfortable, separate from other people, but not some big place that requires hundreds of dollars a month to heat and cool and requires a lot of upkeep. But I want to own some land, not just a membership share in a shared building.
Renting an apartment has been great for my personal finances over the past few years, especially in contrast to people I know that have been burned by bad real estate purchases. But they bought into the own-at-any-cost model. The rental costs, even though creeping up every few years, have still been less than the costs incurred by a house.
The model that’s been pushed in the mainstream media is that a house is the path to riches. That money paid in rent is being thrown away. But my balance sheet puts the lie to that.
I’d like a comfortable, inexpensive place to keep my stuff so I can pursue “other things.” Not a money pit that I have to constantly tend.
Yikes, chile, glad you’re still intact….
Shortly after Sonny Bono and Michael Kennedy died in separate skiing accidents, a sign appeared on the slopes at Vail:
Stop the logging or the killings will continue.
(signed)
The Trees
That’s a good one, ahansen!
Speaking of being nice to trees, I have a mesquite tree out front. It has very big thorns that have stabbed me more than once. I make it a point to move very carefully when near this tree. Lest it makes a point into me.
Heading to Perth, WA, AUS to check on their bubble first hand. Twenty hour flight with a 9 month old? Awesome!
But half the grandparents want to see him. Skype doesn’t do everything yet.
Safe Travels to you & yours Mr. Bubble, as Randy Newman sings it: “It’s a jungle out there!”
Randy Newman, eh? That reference and the fact that the wife is 4/10″ and we are in a shabby hotel in LA has me humming a few of his tunes. And you just reminded me that I play “Guilty” on the guitar. I’ve forgotten more than I know for sure…
Head over to Phillipe’s,… great coffee all day .09 cents (x1 block north of Union Station) Awesome french dips too!
“I love LA!, from the east-side to the west-side,…we love LA!”
Randy Newman picked my girlfriend and I up hitch-hiking in our younger years by Laurel Canyon and Ventura Blvd. He was the nicest guy. Boy, that was a long time ago, early 70’s.
MrBubble - I’m petite too, in height and weight.
Make the grandparents come to you! That’s my philosophy. We’re 13 hours away and they know they have to make it or we won’t send them pictures.
When I was growing up, my mother’s mother came to see us over Christmas. This, despite the fact that she was living in Florida and we were in Pennsylvania.
Why did we not go see her? Because three airfares for the Slim family were a lot more than one fare for Grandma.
Furthermore, I simply wasn’t what my parents considered mature enough. So, no big trips on the big plane for me.
That didn’t happen until I was in second or third grade, and it included lots of stern warnings to behave. And this was on a very short flight to NYC, which was just a few miles away from where my other grandmother lived.
They’ve made the trip already and it’s really the rest of the family who want to see the “golden child”. Flight in six hours for 23 hours…
Have a wonderful time Mr/Mrs.Bub and Bublette! Please keep us posted?
DECEMBER 6, 2011, 11:26 A.M. ET.
Merrill Lynch to Pay $315 Million to Settle Mortgage-Loans Lawsuit
BY CHAD BRAY
NEW YORK—Merrill Lynch & Co. has agreed to pay $315 million to settle a lawsuit over alleged misrepresentations in the marketing of securities backed by pools of mortgage loans.
The proposed settlement would cover a class of investors who purchased certain mortgage-backed securities …
http://online.wsj.com/article/SB10001424052970204770404577082201565957974.html - -
It’s a start.
Late response, was tied up yesterday:
Comment by Cantankerous Intellectual Bomb Thrower©
2011-12-04 19:58:54
“That’s a nice ROI, but I would point out that you are really a prime beneficiary of the Fed in that. I do not believe that your returns are indicative of what the markets would have returned in this period without the Fed’s pumping and manipulation.”
You have to deal with the world in which you live.
Excellent point, GS; thanks for the reminder. That is so true.
So much for the failed theory that the Brics were somehow decoupled from the rest of the global economy…nobody could have seen it coming!
FT dot com
Last updated: December 6, 2011 3:41 pm
Brazil’s rapid growth shudders to a halt
By Joe Leahy in São Paulo
Brazil’s economy stalled in the third quarter of this year, demonstrating that the world’s emerging market growth engines are not immune to the global slowdown.
Gross domestic product was unchanged in the three months ended September 30, from the previous quarter, as weakness in the industrial sector spread to Brazil’s once vibrant consumer.
“Consumption is really slowing down – it’s no longer something that people feared might happen, it’s gradually being realised,” said George Lei, an economist with Nomura.
The sharp slowdown in Brazil comes as China reported last week that manufacturing activity in November contracted for the first time in nearly three years.
India also reported its lowest growth rate in more than two years last week and the country’s currency, the rupee, suffered its worst monthly fall in 14 years.
The string of bad news from the fastest growing members of the elite Brics emerging markets club, which also includes Russia, will further underline concerns that the developing world lacks the firepower to rescue the world economy.
…
Tampa Bay Area Sheds Second Highest Number Of Construction Jobs In The Country
St. Petersburg Times | December 6, 2011 | Jeff Harrington
While other parts of Tampa Bay’s economy pick up steam, its construction industry just hit a new low.
The Tampa Bay region was second only to Atlanta in the number of construction jobs lost over the past year, according to a trade group analysis released Monday.
The drop of another 4,000 jobs here, or 8 percent of the remaining construction labor pool, is bitter news to an industry already decimated by the biggest housing bust since World War II.
Rymer attributes the latest employment drop to the end of some large commercial projects and phased-out stimulus funding. Residential construction has stopped its freefall and is showing scattered signs of recovery, but Rymer predicts it won’t truly start picking up before 2013.
The recent numbers have startled veterans of an industry that used to pride itself as Florida’s chief growth engine.
Job losses*
1. Atlanta/Marietta: 7,700
2. Tampa Bay: 4,000
2. New York City: 4,000
4. Philadelphia: 3,600
4. Dallas: 3,600
* Construction job changes among 337 metro areas between October 2010 and October 2011
Source: Associated General Contractors of America
I saw a quote that I’d like to hone:
“In the 80’s, capitalism defeated communism.
In the 2000’s, capitalism defeated democracy.”
Now… I support building wealth. I don’t believe compelling people to work selflessly is a workable system. Harnessing people’s desire for self-improvement to benefit the whole of society is a fantastic goal. Regulated free markets and capitalism I think are the best way reach that end.
The problem is that free markets and capitalism can easily be corrupted to impoverish the masses and lead to oligarchy. I’d like a way to state that quote that doesn’t come off as anti-capitalist without losing the truth in it.
The end game of capitalism is monopoly or organized oligopoly. Then the end game becomes controlling gov so your monopoly does well.
I think the third quote you need is
Capitalism defeats capitalism.
I like it.
“In the 80’s, capitalism defeated communism.
In the 2000’s, capitalism defeated democracy.
In the 2010’s, capitalism defeated itself.”
Capitalism has defeated reality.
-anything is now possible.
The U.S. Federal Reserve has no plans to give money to the International Monetary Fund to bolster the European bailout fund, despite reports suggesting the contrary, says U.S. Treasury Secretary Timothy Geithner.
Hot Feature: S&P Puts 15 Euro Nations on Downgrade Watch
Speaking after a meeting on Tuesday with his German counterpart, Finance Minister Wolfgang Schaeuble, Geithner said that he is “very encouraged” by the reforms taken so far by European nations, but that reports citing anonymous sources saying the Fed would take part in a special fund for countries trying to control their debt is “not accurate.”
NO but when the time comes they will loan massively to banks who will then purchase foreign bonds. When the central bankers and Germany have what they want the FED and EU central banks will push the money into the system. They may do it via banks or Hedge Funds but they will do it.
Joe Biden Is either a blithering idiot or he thinks American citizens are idiots - wait a minute, if he thinks that he IS an idiot. The “Arab Spring” is nothing more or less than a complete takeover of the Middle Eastern Muslim States by the Muslim Brotherhood. And in case you, , are not aware of this fact, the Muslim Brotherhood is a sworn enemy of the United States of American and the State of Israel. But then, Joe Biden praising the “Arab Spring” does make a twisted sort of sense after all, since his boss is a sworn enemy of a capitalist America where the rights of the individual are paramount. He is a man who has time and again made his views of individual rights as subordinate to the State, and his views on Israel are, shall we say, subordinate to his love of Islam and all things Muslim.
Most Americans ARE blithering idiots.
Who cares about the Israeli Govt? They’re corrupt thieves and murderers.
You sound unhinged…are you Likud by any chance? The Muslim Brotherhood is roughly analogous to the Southern Baptist Leadership Conference in terms of its degree of radical fundamentalism and threat to the region’s “internal” security. Nothing approaching Operation Rescue nuttery, of course, but not the boogyman you’re all hysterical about, either.
They will get Shiara Law and Hard Core Theologists who Will be More Heavy Handed than Anyone they Replaced…They just got a Chance to Vote themselves into being Ruled by a Repressive Government !!!!!!
What we don’t hear much about in this country is the vigorous debate within Islam. It’s loud, it’s messy, and it’s Islam’s equivalent of the Protestant Reformation. Recall that the Catholic Church, the PTB of its day, wasn’t too thrilled about the rise of Martin Luther and the reformists.
Writers like Irshad Manji are covering the transformation of Islam, and I encourage everyone to read her books and blog.
Tanks again Slims!
(any cartoon illustrations?)
What a coinkydink, I just picked up one of her books, The Trouble With Islam Today, at the resale shop. Bookmarked her Blog for future reading. Thanks.
Add your most inspiring LGBT Religious Leader
Irshad Manji
So she has a political agenda too…..All right out of the NPR book:
http://faithwithoutfear.moralcourage.com
I’m not impressed…..same ol recycled theories, Now if she was sayin the evil is in the mosques, well i would support her.
Yep. And I will put a case a beer he gets a general pardon in the last days of the obama administration…
———————
Jon Corzine is above the law
The Washington Times | Thursday December 1, 2011 | Eric Golub
Yet unlike Jerry Sandusky, Jon Corzine will never be held accountable for his misdeeds. Jon Corzine is above the law.
The second reason Jon Corzine is above the law is his political ideology. Jon Corzine is a liberal. Actually, he is a leftist, with views every bit as far left as Socialist Bernie Sanders. He is a “progressive,” which automatically carries with it the aura of being noble, virtuous, and caring. As with most leftists, results are irrelevant. Intentions are all that matters. More than one liberal columnist pointed out that Jon Corzine favors single-payer healthcare, gay marriage, abortion on demand, and cap-and-trade legislation. In other words, he is a saint. In the same way good deeds by conservatives are ignored simply because they are conservatives, all bad behavior by liberals can be washed away by simply being liberal.
This is why Occupy Wall Street protesters will not utter his name, despite his being the very essence of the greed and corruption that movement claims to care about.
This is why Barack Obama and Joe Biden will not demand he be investigated. They bragged about consulting him for financial advice during the 2008 crisis. They loudly campaigned for him for Governor. Once that failed, he was rumored to be the next Treasury Secretary. Mr. Corzine is Mr. Obama’s ideological soulmate.
The Washington Times once employed a guy named David Brock. He was the author of the book The Real Anita Hill, which he later recanted. He wrote another book, Blinded by the Right: The Conscience of an Ex-Conservative, after he came out of the closet.
While he was at the Times, Brock said that he was never fact-checked. Ever.
He was amazed that, when he went on to write for other publications, the fact-checkers were all over his words like white on rice.
Issuing mass pardons as the movers collect the stuff to move out of the White House has become a too common occurance. I would be surprised if Obama did not issue his own controversial pardons.
Bill Clinton pardoned Fife Symington. Which didn’t exactly endear Clinton to those of us who endured Symington’s shenanigans while governor of Arizona.
What the hell is a Fife Symington. Sounds like a irish dirge.
To:”The OC!” & “Just call me Bob!”
Happy Wonderful Happy! Happy! JOY! JOY! Anniversary!
Now remember all you “TrueAngry!™” OC repubicans:
Linda-the-Lunch-Lady-Lives-Lavi$hly!
bankruptcy birthday, O.C.:
December 6th, 2011, posted by Teri Sforza, OC Register staff
The former treasurer-tax collector of Orange County consulted psychics and astrologers on the movements of the markets. He amassed a collection of 300 ties that he rarely wore, composed 14-page odes to the virtues of Chrysler automobiles, sported a calculator watch to precisely tally restaurant tabs, and got away with it all because people believed he was a genius.
Seventeen years ago today, Bob Citron’s risky investments had soured and set off financial panic, culminating in the largest municipal bankruptcy in history. Citron was pushed out of the job he loved, and his highly-leveraged investment pool lost $1.64 billion.
That money belonged to the county, and to stunned schools, cities and special districts. After a proposed sales tax to repay the losses was resoundingly rejected at the polls in 1995, the county issued $1 billion in recovery bonds and other long-term debt to repay everyone what was owed.
The county has been repaying that debt, to the tune of $90 million a year, since the debt was issued in 1995. That $90 million is enough to fund the entire budget of a medium-sized city for a year.
The outstanding balance on that debt is now down to $189.8 million, the county said. The final payment will be made on July 1, 2017.
Total cost: About $2 billion. (The county couldn’t provide a full repayment number, so we did a rough calculation of $90 million a year for 22 years to get that figure.)
That $2 billion would have paid for a lot of health care for the poor, and law enforcement, and infrastructure improvement. But, alas.
Orange County is no longer king of municipal bankruptcy: Jefferson County, Alabama, yanked that title from us last month when it filed a $4.1 billion bankruptcy. And that was primarily over bad sewer debt, which is not nearly as interesting as psychics and astrologers and Merrill Lynch.
For the record, Citron insisted that he did not cause the bankruptcy. If the supervisors hadn’t forced him to resign, Wall Street wouldn’t have panicked and sold off the county’s collateral, he often said. The Board of Supervisors made the decision to declare bankruptcy -– a move he considered ill-advised and unnecessary.
Citron still collects a county pension of about $150,000 a year.
Utter insanity. They might want to think about a pay-for-performance based pension next time.
Yosemite Sam: “MAH BISCUITS ARE BURNIN’! FIRE IN THE HAT! GREAT HORNY TOADS, THAT SMARTS!!!”
Renting’s edge over homebuying at record low:
December 6th, 2011, by Jon Lansner / OC Register
Renting’s financial edge over homeownership — at least by one measure — is at a record low in Orange County.
It’s a combination of stagnant home prices and cheap mortgage rates as at the same time apartment rents rise at nearly full complexes. Our math shows a typical house payments of $2,177 vs. rent at $1,440. So, we’ve got a theoretical leasing savings of 34 percent vs. monthly mortgage payments — lowest in our data collection that dates to 1989.
You could say that the buy-or-rent math now sides with the house shopper. No two house shoppers are alike, so the conclusion that’s a “buyers market” vs. renting is by no means crystal clear. But using my trusty spreadsheet — and data from my Big Orange Index (next version out this weekend!) — tells me that the home payments generated by recent homes purchases — when compared to a benchmark of local rents — look as favorable as they have in a decade. To do the math, we’ve charted …
* Estimated mortgage payments from DataQuick. These number crunchers go in and estimate — based on the terms of mortgages that are public — what each new buyer’s initial house payment may be.
* “Actual rents” at large apartments complexes, provided by several firms — most recently RealFacts. Actual rent? It’s average rents discounted by the amount of vacant apartments, reflecting what new tenant may be able to get, including discounts.
When you compare the two costs of shelter, as the accompanying chart shows, you see that buying was once running 60% above rents. That was during the silliness of 2006′s crazed real estate frenzy. Once the homebuying bubble burst, the cost of acquiring a home tumbled. Rents did stall, then drop briefly, as the Great Recession hit renters, too. Many folks chose to double up in some fashion, whether by adding roommates or moving in with relatives.
But that’s all changed. Look at it this way, by our math: A new owners’ estimated house payment is down 38 percent from 2007′s peak. A renters is paying the landlord only 4 percent less than leasing’s 2009 cost peak.
It’s not been a direct free fall. In 2010, renting’s financial edge grew slightly as tax incentives for homebuyers somewhat stabilized acquisition costs. Once those tax breaks ended, though, housing has again softened and mortgage rates have plummeted, making a home purchase — on paper — look seemingly cheap vs. rents. Local landlords have enjoyed a rebound in pricing recently, as doubled-up renters begin to seek their own rental housing.
Local rents, by this math, are up 3 percent in a year — second such consecutive gain. A buyer’s estimated mortgage payment is down 5 percent — 16th straight such drop.
Big caveat: This homebuying advantage may not pencil out for many wannabe owners. Skittish bankers are making it very difficult for all-but the overly qualified shoppers to get home loans. So the recent “affordability” — by many measures, in fact — is illusionary for many credit-quality-challenged house shoppers.
A man far wiser than I said to expect a labor shortage in the US as boomers retire (he said so probably 5-6 years ago, pre-bubble bursting).
End of WWII, September 1945
Add 9 months, June 1946
Add 66 Years for full collection of SS, June 2012
Add 65 Years for Medicare Benefits, June 2011
Not everyone will be forced to continue to work due to slow economy, many will retire.
This is the data behind the following article:
http://www.bloomberg.com/news/2011-12-06/drop-in-u-s-unemployment-rate-early-sign-of-coming-labor-shift-economy.html
Those who wish to see a change in the White House had better hope that this effect doesn’t take hold with any significance until 2013…
How will there be a labor shortage when Gen X & Y outnumber the boomers?
There are twice as many workers as when I entered the workforce 40 years ago.
And half of the jobs have been offshored nad/or automated?
Will there ever be a shortage of illegals to do menial labor?
Take a look at the enclosed:
http://www.census.gov/prod/cen2010/briefs/c2010br-03.pdf
Note Page 3.
You will see the width of those of boomer years being wider than that of the generation following (ie. more boomers than those just behind boomers). It takes the echo boom (kids of boomers) to match size of the boomer population.
Now consider that the boomers do not evaporate once they retire…they are still here, and will still spend money on all sorts of services–many of which cannot be outsourced. Manufacturing jobs represent only a small fraction of overall employment in the US.
We will have more people wanting to buy services as the population grows by ~3,000,000+ people per year, with approximately the same working age population as before.
Unemployment rate falls with fewer net new jobs than in prior eras.
And this time, no one’s blaming “speculators.” Which is good, because the “speculator” excuse was always ridiculous. Oil prices are about supply (finite) and (ever-increasing) demand.
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
Ho ho, hah hah, hehehehehehe, BwaHaHaAhHAHAHAHAHAHA!!! (Cantankerous Intellectual Bomb-thrower™)
You go Henry!
Filed under: $torage! $torage! $torage!
It’s Time To Start Freaking Out About Oil Prices
By Henry Blodget | Daily Ticker – 4 hours ago
I’m eagerly looking forward to Newt’s and Mitt’s responses to this shot across the bow. Many of the themes covered here appeared in this speech.
Obama hits Republicans, Wall Street in populist speech
Analysis & Opinion
Occupy something
Republican fiscal conservatism is a myth
By Jeff Mason
OSAWATOMIE, Kansas | Tue Dec 6, 2011 4:54pm EST
(Reuters) - President Barack Obama blasted his Republican foes and Wall Street on Tuesday as he portrayed himself as champion of the middle class and laid out in the starkest terms yet the populist themes of his 2012 re-election bid.
…
SWEEPING CAMPAIGN THEMES
Obama’s attempt to lay out the ideological foundations of his re-election campaign marked a shift from recent speeches that have concentrated on small-scale executive actions or campaign-style harangues against Republicans to stop stalling his $447 billion jobs plan.
This time, Obama sought to channel Roosevelt, a Republican who provoked deep anger within his party with his landmark “New Nationalism” speech in 1910 that hailed the government’s role in promoting social justice and helping the poor, and also warned against the excesses of rich business interests.
Roosevelt lost the 1912 presidential election running as a third-party candidate.
Obama sharpened his tone against Wall Street, reflecting what aides see as a message that increasingly resonates with middle-class voters whose taxes have gone to business bailouts while their own incomes have flatlined.
He is also trying to energize his liberal base amid fears that an “enthusiasm gap” could cut into Democratic turnout and cost him a second term.
Obama sounded themes of economic inequality and corporate excess that have driven the Occupy Wall Street movement that was spawned in New York in recent months and has spread to other major cities and even other countries.
He used his speech to accuse Republicans of suffering from “collective amnesia” about the recent economic and financial crisis, and he strongly defended his Wall Street regulatory overhaul that many Republicans opposed and want to roll back.
He said he would call for legislation to toughen penalties against Wall Street companies that break anti-fraud rules.
“Too often, we’ve seen Wall Street firms violating major anti-fraud laws because the penalties are too weak and there’s no price for being a repeat offender. No more,” Obama said.
…
“Too often, we’ve seen Wall Street firms violating major anti-fraud laws because the penalties are too weak and there’s no price for being a repeat offender. No more,” Obama said.
Does this mean that the Justice Department will blow the dust off the prosecutorial machinery and start using it?
I’m looking forward to Obama invoking the Sherman Antitrust Act, once he no longer has to worry about reelection.
Is it not the other way round? His reelection is virtually guaranteed if he prosecutes one or two. Even if they are show trials.
To me it sounds like a guy who is once again trying to compensate his lack of actions with more words. This is just a desperation. You’ve been warned, expect more of this as election nears. And soon to follow:
1. Agitation of Hispanic voters
2. And lastly my favorite, the Race Card.
NEW YORK (AP) — Verizon Wireless is blocking Google’s new flagship phone from supporting Google’s attempt to make the smartphone the credit card of the future.
In blocking the Google Wallet software from running on the new Samsung Galaxy Nexus, Verizon Wireless said Tuesday that it was waiting to provide a wallet application until it can offer “the best security and user experience.” Verizon and rivals AT&T Inc. and T-Mobile USA are part of a consortium called ISIS that is planning its own payment system.
Really rivals AT and T and Tmobile are teaming up. What percentage of the market do they control. This is what we call an oligopoly. Google can’t sell their product, not because it’s not better but because the oligopoly controls the market. Capitalism is dead when this happens because it won’t deliver lower prices or better products. This is happening in most industries.
ONe of the headlines in Newsweek
Corzine’s billion dollar blooper.
Just a blooper here nothing to see move along, maybe we’ll all get a laugh at it, it’s the next reality TV show.
WS bloopers! Hosted by Bernie Madoff and produced by FAT FINGER Television. It’s hillarious. Bring your popcorn and your retirement account.