Bits Bucket for December 18, 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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Home Sales Rise But Cancellations Also Up
by The Associated Press
November 21, 2011
Sales of previously occupied homes rose slightly last month but remained at depressed levels. And more deals are being canceled at the last minute, a sign that even those who are looking to buy are worried about the housing market.
Home sales rose 1.4 percent last month to a seasonally adjusted annual rate of 4.97 million, the National Association of Realtors said Monday. That’s below the 6 million that economists say is consistent with a healthy housing market and slightly ahead of last year’s sales the worst in 13 years.
The sales are measured when buyers close on the homes.
Many deals are falling apart before that point. One third of Realtors say they’ve had at least one contract scuttled in October, up from 18 percent in September.
More than two years after the recession officially ended, many people can’t qualify for loans or meet higher down-payment requirements. Even those with excellent credit and stable jobs are holding off because they fear that home prices will keep falling. Home sales are also being hurt by a steep decline in first-time buyers.
Sales have fallen in four of the five years since the housing boom went bust in 2006. Declining prices and record-low mortgage rates haven’t been enough to boost sales.
Most economists say home prices will keep falling, by at least 5 percent, through the rest of the year. Many forecasts don’t anticipate a rebound in prices until at least 2013.
…
“More than two years after the recession officially ended, many people can’t qualify or meet higher down-payment requirements.”
This is the dumb money. It used to be the dumb money was easily financed but now it isn’t. And since dumb money is no longer forthcoming we get:
“Even those with excellent credit and stable jobs are holding off because they fear that home prices will keep falling.”
This is the smart money. The smart money is holding off because the dumb money can’t puff up or support housing prices as they used to be able to do.
So there it is: The dumb money folks are out of money because they are dumb, and the smart money folks have the money but they are not yet spending it on houses because they are not dumb.
So there it is, a rather generalized conclusion but I think it largely works.
“The dumb money folks are out of money because they are dumb, and the smart money folks have the money but they are not yet spending it on houses because they are not dumb.”
Succinctly stated, the housing market is out of buyers with buckets of money and boxes of stupid.
More homes on market in region
Central Oregon’s median sales prices still rising
By David Fisher / The Bulletin
Published: August 11. 2006 4:00AM PST
…
Sellers react
It’s hard to tell how sellers will react to the upwelling of inventory, Foster noted. Some are selling because they have to sell. Others are just testing the waters at intentionally high prices, trying to see whether a buyer “with a bucket of money and a box of stupid” will show up to pay too much.
Some will slash their prices far enough to create some good deals, he said. Some will convert their properties to rentals, rather than trying to flip them for a short-term sale. Others will simply pull their properties off the market, or let their listings expire, until the market strengthens.
And some will get something close to what they’re asking for, with a little normal dickering.
“I’m telling my agents they need to be looking really hard at any offer they get at this point,” Berger said.
Despite the glut, there’s still movement in the market.
…
Probably also because people understand that they might have to relocate to chase the good jobs and reselling an underwater house could be a real downer.
If you had any reassurance of staying put you might not care as much (unless you believe that a very serious price correction is til in store).
In one section of Ahwatukee there is a glut of five bedroom stucco boxes of over 3,000 square feet. Ho hum. I would prefer a 1,000 square foot ocean view place in Westport, CA over one of those big echo chambers.
Hi Bill have they started the freeway connection through S. Ahwatukee ? Where pecos is if I remember right.
That will hurt re-sellers If they end up too close to the construction.
I remember all the big new houses in Western Ahwatukee with 15 big windows facing west all covered with dark shades. These homes were not built with the desert in mind. For any who hav enot lived in the desert the western exporsure in the sonoran desert is very unpleasant and all windows facing west need coverings unless you want to fry in the summer, which is 6 months long.
Now if you build you house right it can be pretty nice out there. I used to go to the desert museum in Tucson and really liked the under ground exibits like the cave. Nice and cool.
be nice to have a house with a dark cool interior and a pool with a 80% shade fabric covering over it. maybe a skylight that would open in the evenings and winter months.
But a big two story stucco box full of west facing windows in Phoenix. I don’t know what they were thinking
“Despite the glut, there’s still movement…”
Same can be said about my gastrointestinal tract during the holiday season.
There are still no down payment requirements for many buyers. I know 2 couples that bought homes in 2011. Neither made a down payment. One paid closing costs. The other got closing costs included in the loan. Both had military loans.
Clusterfrack.
She’s gotten the word that her landlord will be doubling the rent sometime soon, and her mother already had to move when her lease expired and the rent rose from $675 to $1,700 a month. “It’s a bunch of gas guys that live there now,” Augustine said.
http://www.democratandchronicle.com/article/20111218/NEWS01/112180344/Fracking-Bane-boon-look-into-industry-s-presence-Pa-?odyssey=tab|topnews|text|Home
The rental pressure from the PA gas field workers is felt in the Elmira-Watkins area too, plus we’ve had our own drilling and pipeline mini-boom, even without the fracking. The big controversy in Watkins now is the intended filling of an old salt mine with presurized natural gas, right on the shore of Seneca Lake.
NW PA has a long history of being ravaged for oil, gas, timber and coal. Oil City and all that. The first oil well in the country was near there, an accident of drilling for salt water.
Hmmm, I wonder how things are doing in Oil City.
Quick check on Zillow shows almost nothing priced over $150K. If there were a boom you’d see a zoom, but nothing doing. Might be a good place for an investment if you think the oil with hit Oil City again.
I don’t know. My Father-in-law lives very close to there. He thinks the value of his property is now zero due to fracking contaminating the water supply.
And imagine what the bust will be like. The long faces, the tough-tied arrogant.
They’ll just pack their bags, leave their foreclosures behind and resume their wandering hobo life until they stumble onto the next boom.
I’d like to see further discussion of American productivity that was in yesterday’s bits bucket:
ItsAboutTime:
“Seriously, thought, the point is the first paragraph is totally wrong. If you work 1 hour a day and produce 100 “products,” and I work 10 hours a day and produce 101 “products,” yes I am producing more per person but you are almost ten times more productive. In other words, production per person is a . . . stupid measure of productivity”
I would contribute, a labor hour refining gasoline, or pulling ore out of a mine, or building a dam, is somewhat different from a labor hour recording a conveyance.
IIRC, yesterday a source was posted that said that
US Workers were #2 in productivity per hour (just behind Norway)
and
They work far more hours per day and week than anyone else.
So Americans are busting their humps while more and more Americans fall into poverty.
Meanwhile, a news item the other day was that CEO pay rose 36% from last year.
I wonder where all the wealth the workforce creates actually ends up? It couldn’t possibly be with those wonderful 1%ers, could it?
But we need the 1%’ers. We NEED them. They want the best for us. They are the “job creators”. After all…. you’ve never gotten a job from a poor person have you?
“So Americans are busting their humps while more and more Americans fall into poverty.”
More EMPLOYEED Americans are busting their humps while more and more Americans WITHOUT EMPLOYMENT fall into poverty.
Yes and no. If you have a good job, the poverty nightmare is deferred. And even then you are probably losing ground with stagnant wages. While you might not be “poor” you probably are not as well off as you used to be. You probably now have a high deductible health plan and if your kids are off to college you might be wondering what happened to those $2K per year tuition rates at state that were the norm about 10 years ago and when did they become 6-7K per year? And don’t stop by the friendly local new car dealer, you might be in store for some serious sticker shock.
And there are millions of employed Americans who do live in poverty, and many work very, very hard, and have more than one P/T no benefits min wage jobs and are too proud to accept foodstamps or other assistance. (IIRC that number is in the tens of millions).
Let’s take a look at what you posted and see if we can learn anything about deflation in what you said:
“And then you are probably losing ground with stagnant wages.” Because of deflation, perhaps?
“While you might not be ‘poor’ you are not as well off as you used to be.” Because of deflation?
“You probably now have a high deductable health plan…”
Because your employer cut back on offering health benifits which is a form of wage cut which is deflation.
“… if your kids are off to college you are probably wondering what happened to those $2K per year tuition rates at state that were the nor about 10 years ago and when did they become 6-7K per year.”
They becme 6-7K per year when the subsidies from the state vanished into thin air as the state’s tax receipts vanished into thin air. Poof = Deflation.
“And don’t stop by the friendly local new car dealer, you might be in store for some serious sticker shock.”
With all this “serious sticker shock” new car dealers should be rolling in the dough instead of shuting down their operations. Dealers can put whatever price they want on their cars but if people do not have the money to spend then they won’t be buying.
And as to the millions of P/T employees who work very hard with no benifits at minimum wages jobs, this is the greatest sign of the forces of deflation at work that you came up with but for some reason that I cannot fathom you don’t see it that way.
With all this “serious sticker shock” new car dealers should be rolling in the dough instead of shuting down their operations.
Dealers don’t set the MSRP’s, the factories do. And most manufacturers are quite profitable, now that they have adjusted to lower sales volumes. Dealers, unfortunately for them, are merely resellers and all they can do is discount a little bit below MSRP. They are up the creek without a paddle.
Dealers can put whatever price they want on their cars but if people do not have the money to spend then they won’t be buying.
I think that it has been established that the auto industry has decided to sell fewer cars at higher (and profitable) prices, and have been systematically shutting down factories and dealerships in the process to deal with the lower sales levels. The BK’s came in very handy with that.
Remember, just because half the country can’t afford a new car anymore doesn’t mean prices will come down. They will simply reduce supply and sell at a profit. Weaker players will bow out of our market, surrendering market share to the survivors who will keep their prices up.
But keep beating on your deflation drum while prices continue to increase. How many years have you been promising us deflation? And I will remind you once again that I used to live in a country where 80%+ of the population was poor beyond anything Americans experience, and we had rampant inflation there.
Volkswagen has cut the price of the new Jettas to $16k and the new Passat to $20k.
Thats down right affordable compared to those $42k 4-door pickup trucks.
“Volkswagen has cut the price of the new Jettas to $16k and the new Passat to $20k.”
I may have to change my quarter-of-a-century allegiance to Honda on that note.
The best thing about buying a VW is the long, lasting friendships you’ll develop with your VW auto mechanics.
“…long, lasting friendships you’ll develop with your VW auto mechanics.”
Just changed my mind…
Volkswagens suck.
The problem is, the CPI keeps rising. For November 2011, the CPI said that the price of “All Items” rose 3.5% YOY. Food and energy are up much more than that. (ref: http://www.bls.gov/news.release/cpi.nr0.htm )
You’ve posited that money is going poof due to bad loans. But - I don’t think you’ve taken into account the lengths to which the government has taken those bad loans onto itself in order to make the lenders whole and profitable, and simply saddled the citizenry with debt. So the money is not going poof. Lenders are being paid off. The first time money may go poof is with Greece. That’s being fought tooth and nail.
And the simple fact that central bankers would love inflation to remedy what ails the economy. It is stealthy and it avoids hurting the lenders, in fact helps them. And the central bankers believe the financial sector is the cornerstone of the economy, or at least claim to.
(ref: http://blogs.wsj.com/source/2011/11/11/central-bankers-learn-to-love-inflation/ - “But what many economists increasingly want from the central banks–and many of the Fed’s and BOE’s central bankers seem sympathetic–is a substantial bout of inflation to erode the value of debt that continues to overhang the U.K. and U.S. private sectors.
The premise here is that somebody has to pay for the mistakes of the past. And because of money illusion–where people are focused on the nominal rather than the real value of money–inflation is an effective tool for eroding the value of both public and private debt.
“Six or seven years of 6% inflation, 2% interest rates and to stick the losses to the Chinese who (in their mercantilist fashion) own the debt would be a wonderful way out of America’s malaise,” was how John Hempton, a hedge fund manager put it on his well regarded Bronte Capital blog.”)
THIS is why I don’t see a deflationary environment. Money is not going poof, yet we are getting stimulus. And central bankers would dearly like inflation.
No combo, many people with jobs are falling into poverty. Hell, many with 2 jobs are falling in to poverty!
72 million people (that about half the total workforce) makes $500 a week…. or less.
Let me tell you, $500 a week or less is POOR.
The wealth ends up where it should - to those that own the capital. Happily in this country everyone can be owners. Either by starting a company or for the lazy (like me) the stock market and partnerships. The US business model of unskilled or semi-skilled workers (like my auto worker grandfather) living in a nice suburban house, goldplated medical and retirement benefits, vactions, two cars, etc… is gone or going the way of the dodo bird. My wages the past ten years have been stagnet. The answer is to live well below owns means and save and invest. Align your economic interest with owners rather than employees for economic diversity. People complain about the stock market being rigged. But using stocks and bond and inflation and deflation sensitive investments even a small retail investor can survive.
“…(like my auto worker grandfather) living in a nice suburban house, goldplated medical and retirement benefits, vactions, two cars, etc… is gone or going the way of the dodo bird.”
The thing nobody can foresee is what great American invention will lay the foundation for the next hundred-year-long boom.
Our leaders should give careful thought over how to best stimulate innovation, as this has been America’s comparative advantage going back to at least 1776. Killing off our education system and outsourcing our industrial base are not going to cut it.
” My wages the past ten years have been stagnet. The answer is to live well below owns means and save and invest.”
Exactly how are my friends who make $20K per year supposed to live below their means, save and invest?
Form households with others and share expenses?
Shared things and accomodations was my answer as well.
Bring back the tenements; one family per bedroom. Because that’s the direction we’re heading. Rents will go up to where that’s the only way to afford housing of any kind.
“Bring back the tenements…”
Tenements a la Hong Kong:
http://tinyurl.com/d5o4v4n (image)
“Tenements a la Hong Kong:
http://tinyurl.com/d5o4v4n (image)”
You will be assimilated. Resistance is futile.
must be WASH Day……
The wealth ends up where it should - to those that own the capital. Happily in this country everyone can be owners. Either by starting a company or for the lazy (like me) the stock market and partnerships.
I think that is the exact speech MF Global was giving its investors last year.
Sweet!
LOL
Mari Antoinette didn’t get it either.
Struggling homeowners gain favor in key ruling
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 9:08 p.m. Thursday, Dec. 15, 2011
42 COMMENTS
Merry Christmas Diver4life
Grandma got run over by a Deadbeat
Walking home from our house Christmas eve ……….
jeff saturday
8:10 AM, 12/17/2011
LOL, that was pretty clever. Merry Christmas to you to….
diver4life
1:50 AM, 12/18/2011
I think you and diver4life are gonna end up best buddies, after this is all over.
I would guess this is pre-robo 2009 and what Melinda Fulmer talks about has become massive and not reported. Except maybe here.
Should you feel guilty if you walk away?
By Melinda Fulmer of MSN Real Estate
“But as more and more people do it, the sentiment is changing,” says Maddux, who likens defaulting on a mortgage to breaking a cell-phone contract, albeit on a much larger scale.
Walk away, live it up?
For better or worse, the stigma associated with foreclosure is fading: As many as 1 million people are estimated to have strategically defaulted on their houses last year, according to credit firm Experian and consulting firm Oliver Wyman. That’s more than four times 2007’s level and 70% more than the 588,000 in 2008.
That’s due in large part to the sheer numbers of foreclosures, but the percentage of strategic defaults is also on the rise, say the study’s authors.
“We’ve seen a marked increase in this kind of behavior,” says Charles Chung, Experian senior vice president.
Economists and real-estate analysts are calling this phenomenon a “stealth stimulus” that is putting more cash in some people’s pockets for iPods, netbooks, beach vacations, concerts and dinners out.
“You have a lot of people saddled with mortgages they can’t afford,” says Christopher Thornberg, of Beacon Economics, a consulting firm specializing in real estate and the California
economy. “Deleveraging is part of the process of getting back to a healthy economy. If you’re not making your mortgage payments, what else can you do with that money?”
And, of course, not having to pay your mortgage payment for the better part of a year (or until your bank moves to evict) frees up a lot more cash for daily living.
Louis Tondu, a client of You Walk Away in Richmond, Calif., stopped making his mortgage payments last June, but says he was advised he should be able to live in his house until about May, as the bank has yet to file a notice of sale.
“They should have been able to take possession Dec. 21, but nothing has been filed yet. I’m not sure if the bank is backlogged or what.”
Tondu, an airline mechanic who has been living off his disability settlement and working in auto shops sporadically, spent four months last year in the south of France, visiting his girlfriend and trying to find work. He could not have done that, he says, if he was using his limited funds paying his $2,000 a month mortgage.
A bitter pill
Hearing stories about your neighbors’ upgraded lifestyle while they are not making mortgage payments or are paying less in rent can be hard to take, says Taylor Gang, a certified financial planner in South Florida, an area hard-hit by foreclosures.
“It makes you feel stupid for following the rules,” he says.
Ditto for tenants of foreclosed landlords who took rent payments, even as they didn’t pay their mortgage each month.
One real-estate message board respondent, “PMSoldier,” writes bitterly about relocating to Washington from Kansas and renting a house from a Mercedes-Benz-driving investment property owner who lived in a lakefront community.
After “PMSoldier” found something for his family to buy months later and asked her about breaking the lease, he was told that there would be none: The house was being put up for sale. The landlord had stopped paying her mortgage two months before he signed a lease, and it was now being put up for auction.
“The landlord has been collecting rent for eight months with no intention of paying the mortgage,” he says. “Does this seem fair?”
http://realestate.msn.com/article.aspx?cp-documentid=23390500 - 84k -
Not having to make a mortgage payment is similar to imputed rent, which is something you get to enjoy once your mortgage is paid off.
With imputed rent the money you used to pay on your mortgage gets to be spent for other things. It looks to be the same for those who choose to Stay and not Pay. Which will work out fine for them until it doesn’t work anymore, then … watch out.
It works out fine for them and it works out fine for the economy in general in that money is made available for spending whereas otherwise it wouldn’t be. But once all this stops - and eventually it will stop - then watch out.
Sorry Bud,
Disagree with you completely in your reasoning. The money NOT paid in mortgage payments is money NOT received by the mortgage lender. That could easily be an individual that makes loans in real estate with hard cash, or it could be part of a pool. No matter where the money should be going, based on terms of the mortgage, someone, i.e. the lender has been deprived of their income, so they are NOT spending the money they no longer have available.
The biggest problem I have with comparing this to defaulting on a “cell phone contract”, which is totally ridiculous, is that if you DEFAULT on your contract, your service is TERMINATED.
If these people were booted out of the house that the mortgage is supposed to by when they default, then they would need to pay rent of have no place to live. There goes the “surplus” cash.
This is essentially stealing. Nothing less.
It is a serious moral problem when a large portion of the general population has begun to accept stealing as a viable lifestyle.
We have serious money problems in this country. Money is a moral issue. It says I will take your paper in exchange for future labor or goods, at similar cost to today. When inflation destroys the value of the money, or when “contracts” are not honored, the basic trust in the system vanishes. In the long-run, everyone will be a loser.
Just look at the Greek Bond rates. Astronomical. When “faith” in the credit system is lost, and you can’t trust anyone, then it makes “easy credit” impossible. You will pay through the nose to get a loan, if you need one.
This whole “gettin’ over on the man” mentality will corrupt the entire financial/business system, which needs a lot of prosecutions to show people that you really can’t get away with crime and that crime doesn’t pay.
You want to default. Fine. But get out the house, and let the bank or the mortgage holder liquidate it for whatever he/she can recover. Otherwise, you are nothing but a common thief.
t is a serious moral problem when a large portion of the general population has begun to accept stealing as a viable lifestyle.
You are over 200 years too late to be worrying about that.
IAT
“…who has been living off his disability settlement…”
This is a major California problem that forces employers to look elsewhere.
From the NYTimes: As Wars End, Young Veterans Return to Scant Jobs
“Veterans’ joblessness is concentrated among the young and those still serving in the National Guard or Reserve. The unemployment rate for veterans aged 20 to 24 has averaged 30 percent this year, more than double that of others the same age, though the rate for older veterans closely matches that of civilians. Reservists like Corporal Rhoden have a bleak outlook as well.
In July 2010, their unemployment rate was 21 percent, compared with 12 percent for other vets.
“I’m not necessarily convinced that they have great marketable skills,” said Rachel Feldstein, the associate director of New Directions, which offers drug rehabilitation, job training and other services to veterans in San Diego. “If you train someone to be a sniper, those are not necessarily skills that are transferable.”
They are transferable all right. They should be transfered to Angelo Mozilo, Richard Fuld, Hank Paulson, Alan Greenspan, Jamie Dimon, and thousands of other Financial Terrorists on Wall Street, the Upper East Side, the Hamptons, Greenwich, CT, the City of London, and anywhere else the pigmen gather.
Not too long ago many soldiers were trained to do tasks that were non combat related and many of those had transferable jobs skills. My understanding is that these days a lot of those tasks are now farmed out to civilian contractors and our young people in uniform are being used mostly as combatants.
“If you train someone to be a sniper, those are not necessarily skills that are transferable.”
I think that the real problem is that most of our combatants return mentally damaged (in addition to lacking civilian job skills).
Anecdote: A neighbor down the street is a retired marine (in his 40’s) and he charges the police department $100/hr to train our local SWAT officers their paramilitary skills. He just purchased a brand new Suburban. He’s one of the few in the neighborhood with a new car, and definitely one of the most (if not the most) expensive one.
That said, most returning combatants lack the connections that our neighbor no doubt used to land his sweet gig. While I don’t know the facts I wouldn’t be surprised if either nepotism or cronyism was involved.
“Not too long ago many soldiers were trained to do tasks that were non combat related and many of those had transferable jobs skills.”
When I worked at Regal Cinemas during college I ran projection - there was a regional guy that came around and handled the major mechanical repairs. He was a vet and could disassemble/repair projectors with incredible speed.
FWIW, my biggest employment FUBAR was at that job — I assembled Titanic with one reel in reverse, and it was not discovered until the next day when the theater had 400 people in it.
Whoops!
It’s kinda cool to see the audio track though.
The problem is their skills are eminently transferable, unfortunately not always to legitimate enterprises. The devil will make work for idle hands.
The Mexican drug cartels could probably find a use for them.
The Zetas were created from the members of the Mexican Special Forces:
http://en.wikipedia.org/wiki/Los_Zetas_Cartel#Foundation:_1999
My brother was a cook for awhile when he was in the navy circa 1960. Big institutional cooking is kind of a different animal, but he did end up managing restaurants and could put out a good meal at home too. Is this something they farm out to contractors now? A pity, really.
My step supposedly learned helicopter mechanics but I don’t think he learned much, but not for lack of opportunity.
So is Newt’s post-election plan to overturn the Constitutional balance of powers in favor of his administration?
Hummmmmmmm…
Gingrich causes a stir with vow to ignore courts
David Savage
December 19, 2011
The World’s Financial System Is Crumbling. Here’s The Worst-Case.
Republican Presidential Candidate Newt Gingrich
WASHINGTON: The Republican presidential frontrunner, Newt Gingrich, says he will ignore, if elected, Supreme Court decisions that conflict with his powers as commander-in-chief and will press for impeachment of judges or even abolition of certain courts if he disagrees with their rulings.
”I’m fed up with elitist judges” who seek to impose their ”radically un-American” views, Mr Gingrich said.
In a conference call with reporters, Mr Gingrich said: ”The courts are too aggressive and the courts have been trying to impose an elitist value system on a country that’s inherently not elitist.
…
So the GOP candidates are no longer bashful about admitting their Fascist plans in public? What a surprise!
Let’s see …
1) Half the country is now living at or near poverty
2) Elected officials are indifferent to their plight. Democrats give them lip service, while the GOP blames them for their poverty while aiding and abetting the never ending offshoring of jobs.
3) Huge deficits and historically low taxation on the rich insures the eventual collapse of the social safety net.
At this point a “savior” will appear and a desperate electorate will hand over dictatorial powers to this person.
The trend toward dictatorship has been going on for some time.
President Obama: “Well, what we’re going to have to do is continue to make progress on the economy over the next several months. And where Congress is not willing to act, we’re going to go ahead and do it ourselves.”
To his credit, at least Obama is dedicated to trying to create jobs, as opposed to the Republican CONgressman plan to hit the economy with a jobs-destroying wrecking ball, then blame Obama for the fallout.
The trend toward dictatorship has been going on for some time
I agree, but we haven’t reached the “event horizon”, the point of no return just yet.
But it might be closer than we think.
If you want to get into the discussion of which candidate would be most likely to lead the country into dictatorship, I submit that several of the leading Republican candidates may pose a greater risk than “The One” (as you like to refer to Obama). I realize the Republicans claim to be the party that wants to free the American people from the grips of Washington. But given even stronger ties to monied Wall Street interests than the Democratic party has, it seems more likely that the current trend towards plutocratic dictatorship of an impoverished proletariat would get worse, not better, with a Republican in the WH.
Note that Romney has already chosen Glenn (”Give it your best shot”) Hubbard as one of his economic advisers, while Newt Gingrich had lucrative consulting contracts with Freddie Mac. Don’t miss the implications of these associations before it is too late!
A Searing Look At Wall Street In ‘Inside Job’
All Things Considered
October 1, 2010
Host Melissa Block speaks with director Charles Ferguson about his latest film, “Inside Job,” a documentary about the downfall of Wall Street. Ferguson says he underestimated the level of unethical and fraudulent behavior he would come across.
…
Mr. FERGUSON: What you find is that very prominent professors of economics, often people who have also held high government posts, are paid to testify in Congress. They are paid to be expert witnesses in both civil and criminal trials. They’re often paid to write papers that praise the financial services industry and argue on behalf of deregulation of the industry. They make millions, in some cases tens of millions, of dollars doing this. And this is usually not disclosed. And in fact, university regulations do not require disclosure of these payments.
BLOCK: You include an exchange that gets increasingly angry with Glenn Hubbard, he was the chief economic adviser to President George W. Bush, he’s now dean of Columbia Business School. And you’re asking him about this outside income that you’re talking about, the income he gets from being on the boards of companies in the financial services industry. And it leads up to this. Let me play you this bit of tape.
(Soundbite of film, “Inside Job”)
Mr. FERGUSON: Do they include other financial services firms?
Mr. GLENN HUBBARD (Dean, Columbia Business School): Possibly.
Mr. FERGUSON: You don’t remember?
Mr. HUBBARD: This isn’t a deposition, sir. I was polite enough to give you time, foolishly I now see. But you have three more minutes. Give it your best shot.
BLOCK: Charles Ferguson, tell me about that moment in Glenn Hubbard’s office.
Mr. FERGUSON: Well, the entire interview was fairly contentious, as you can imagine. It surprised me somewhat to realize that these people were not used to being challenged, that they’d never been questioned about this issue before. They clearly expected to be deferred to by me and I think by everybody.
BLOCK: You have not been invited back, safe to say, to Glenn Hubbard’s office.
Mr. FERGUSON: No, I think it’ll be quite a long time before I have lunch with Glenn Hubbard.
…
“1) Half the country is now living at or near poverty”
Whoever next goes to the WH has the country in a perfect position to exercise dictatorial powers.
I agree, we are perilously close.
This IS the GOP endgame.
But given even stronger ties to monied Wall Street interests than the Democratic party has……………pure unsupported propagandist crap.
Nancy Pelosi….rich and connected, along with almost every member of CONgress.
George Soros, a Billionaire Democrat.
Most lately, Jon Corzine, a CEO of Goldman Sachs, a Democrat.
Roosevelts?
Let’s see, isn’t Warren Buffet working for Obama?
The list of Democrats with ties to Wallstreet is as long or longer than Republicans.
The “PRESS”, which is a Leftist organization and supports Democrats, like to provide this tale of the “rich republicans” and the “working class” democrats. It’s pure crap.
So while Obama “talks” about a campaign crack down on millionaires and Billionaires, he’s really talking about cracking down on small business owners with incomes over 250k.
The really, really rich will get a big tax write-off. And many of those taking the cash are BIG democrat supporters.
The press a leftist organization? WOW, I did not know Rupert Murdoch was a pro-occupy propagandist? Thanks for your enlightening take on the press.
On other matters, if you have the ability to name by name every wealthy democrat, you prove that the mass of wealthy are Republicans. Congratulations!
IAT
Let’s think again about how the press is incredibly leftist. So, in xtranormal film style, let’s ask a few questions:
Q)Where does the press get its money?
A)From selling advertising.
Q)Who buys advertising?
A)Businesses of all kinds.
Q)Who buys most of the advertising?
A)Bigger businesses.
Q)What would happen if a newspaper, magazine, or broadcaster covered stories that suggested that big businesses are ripping off America.
A)That newspaper, magazine, or broadcaster would lose its advertisers.
Q)How would businesses orchestrate such a “conspiracy?”
A)They would organize through their legal collusive organization, the U.S. Chamber of Commerce.
Q)What happens when a press loses its advertisers?
A)It downsizes or, eventually, goes out of business.
Q)So what does this mean any rational press will do?
A)It means they will not question the logic of big business in any consistent way.
Q)How can a press be leftist if they cannot question the logic of business?
A)A press cannot be leftist if they cannot question the logic of business. A press can be libertarian, however, for that only requires they question the logic of government. And, some will confuse this with being leftist and, to business interests, such confusion is acceptable.
IAT
The entire US government is based on separation of powers Newt and all presidents test the boundaries of that power, and does congress and the courts. - Non news story.
1) Half the country is now living at or near poverty
2) Elected officials are indifferent to their plight.
Even most poor people in this country have electicity, running water, microwave ovens and cell phones and can and do show up at emergency rooms for serious medical needs.
It’s not the government (taxpayers’) role to make sure people can continue to live a 1950s middle class lifestyle. Economies and markets change. The world is more competive. There always was a labor glut. The US was imune from it for a long time no more. I think the laws of economics (and human nature) are as unyielding as the laws of physics. Can’t legislate them away try as you might.
“I think the laws of economics (and human nature) are as unyielding as the laws of physics. Can’t legislate them away try as you might.”
It’s also hard to make everyone collectively better off by taking from group A and giving to group B. Better to create a level playing field and fertile conditions for both groups A and B to prosper by trying hard.
It’s also hard to make everyone collectively better off by taking from group A and giving to group B.
But it’s easy to make everyone collectively better off by “taking” from group A and giving it to group A & B in the form of lower government debt, investment in infrastructure, pure science, education, health-care and social safety nets.
It’s also hard to make everyone collectively better off by taking from group A and giving to group B.
I don’t know. Assume Group A is 10 people, and they own (say, by birth) 90% of the productive capacity of the society. And assume Group B is 90 people (70 Group B* and 20 Group B#, where Group B# is the group everyone loves to hate), and they own 10% of the productive capacity of the society. And assume that if Group B uses their productive capacity to its fullest, 10 people will be destitute. And, instead of starving quietly, those 10 people will go out violently, taking, say, 9 other random Group B people with them, plus a random Group A person. Or perhaps they won’t be violent, maybe they’ll just fall sick and thus unleash a contagious disease that kills 10 others, 9 other random Group B people and 1 random Group A person. Even if everyone assumes the 10 destitute people will be Group B# people, it improves everyone’s (literal) life chances to coerce Group A to unleash some of their productive capacity, or to confiscate it if they refuse to do so.
You can complicate the above with laws, police, and so forth, but nothing coherent will change the above — you can improve the lot of everyone by taking from Group A and giving to Group B.
IAT
IAT — Thanks for pointing out the error in my post.
Even most poor people in this country have electicity, running water, microwave ovens and cell phones and can and do show up at emergency rooms for serious medical needs.
Yes, they do, which is why step 3 is required. That said, being working poor is far from a cake walk. My oldest is struggling to live on her own, and now her car needs $700 in repairs. Lucky for her I can help her pay for it. Millions of others are not so lucky and they end up at the payday loan store.
Some on this blog have pointed out that welfare is for the benefit of the rich, as it keeps revolutions at bay. The problem with the rich is that they are insatiable, hence why I believe they will eventually dismantle the public safety net, once we can no longer borrow to fund it.
When the soup lines return the stage will be set.
“When the soup lines return the stage will be set.”
I re-contend that there are already soup lines (those in line at Walmart to purchase goods when the WIC cards are recharged each month, Burger King accepting EBT, etc.) and that Walmart et al. are skimming off the top. Am I wrong-headed in this thinking?
Demand at food banks has risen over 500% over the last 5 years.
The stage is already set. OWS was just the beginning.
I lived through the 1960s and saw cities on fire because of poverty. It WILL come to that again.
“Demand at food banks has risen over 500% over the last 5 years.”
I had heard of them trebling to years ago in LA ans SF, so I guess that makes “sense”. I agree completely, eco. You certainly don’t need a Weatherman to know which way the wind blows.
most poor people in this country have electicity, running water, microwave ovens and cell phones
It doesn’t matter if you are poorer than your daddy because you have a nicer toilet.
I think the laws of economics (and human nature) are as unyielding as the laws of physics.
This is false in a practical sense. The “laws” of economics yield all the time. Different countries run their market economies differently from other countries precisely because they make the “laws” of economics “yield” in ways that produce the certain results.
Health-care costs half as much in other countries because of the system’s forced yielding of costs for example. The “laws” of economics might say “no money/no treatment” but this “law” has been forced to yield in almost every developed country in the world except the “civilized” USA.
And the “laws of capitalism”?
Capitalism is an economic system developed by people to serve people - not a system developed for people to serve capitalism and not designed for 99.9% to serve the .01%. The type of capitalism America practiced until about 1980 did a very good job serving the majority of Americans. The reason it did is because America wrestled our capitalism to yield thus.
What “laws of economics”?
If anything, the past few years have shown us that economics is a sham, based on lots of theories that are not testable scientifically. More of a religion with different sects that cling to their interpretations, regardless of the facts, than anything that can pretend to have clear-cut laws.
I might suggest the power of behavioral economics might be a better way to describe what we have today. We are after all social animals and respond predictably to certain types of economic manipulation.
Behavioral economics = sociology
IAT
Hard science is in many respects just as much about religion as is economics. Geophysics is a good case in point. Due to the profession’s religious convictions that continental plates could not move, forty-five years passed from the time when plate tectonics theory was proposed (Alfred Wegener, 1915) till when it was generally accepted (the 1960s).
Furthermore, the facts that it is difficult to conduct controlled experiments on human subjects and that a large share of economics practitioners behave like prostitutes do not imply there are no valid scientific explanations to explain economic behavior. Your argument makes about as much sense as to say there were no laws of physics until Galileo and Copernicus stood up to the Catholic church at risk of execution for heresy.
Amen!
IAT
“Hard science is in many respects just as much about religion as is economics.”
I suggest that behavioral science might offer some useful explanations about the flaws in the scientific peer review system which “true scientists” use to prove their theories and further their reputations.
Climate change emails between scientists reveal flaws in peer review
A close reading of the hacked emails exposes the real process of science, its jealousies and tribalism
Read more: doubts about “hockey stick” graph revealed
No apology from IPCC chief Pachauri for glacier fallacy
Fred Pearce
guardian.co.uk, Tuesday 2 February 2010 13.27 EST
Article history
The coastline of Lake Baikal, Siberia, one of the areas where analysis of temperature change was severely disputed. Photograph: Olivier Renck/Getty Images/Aurora Creative
Scientists sometimes like to portray what they do as divorced from the everyday jealousies, rivalries and tribalism of human relationships. What makes science special is that data and results that can be replicated are what matters and the scientific truth will out in the end.
But a close reading of the emails hacked from the University of East Anglia in November exposes the real process of everyday science in lurid detail.
Many of the emails reveal strenuous efforts by the mainstream climate scientists to do what outside observers would regard as censoring their critics. And the correspondence raises awkward questions about the effectiveness of peer review – the supposed gold standard of scientific merit – and the operation of the UN’s top climate body, the Intergovernmental Panel on Climate Change (IPCC).
The scientists involved disagree. They say they were engaged not in suppressing dissent but in upholding scientific standards by keeping bad science out of peer-reviewed journals. Either way, when passing judgment on papers that directly attack their own work, they were mired in conflicts of interest that would not be allowed in most professions.
The cornerstone of maintaining the quality of scientific papers is the peer review system. Under this, papers submitted to scientific journals are reviewed anonymously by experts in the field. Conducting reviews is seen as part of the job for academics, who are generally not paid for the work.
The papers are normally sent back to the authors for improvement and only published when the reviewers give their approval. But the system relies on trust, especially if editors send papers to reviewers whose own work is being criticised in the paper. It also relies on anonymity, so reviewers can give candid opinions.
…
As someone in a field that has peer review, I can say authoritatively that peer review is useless.
In the old days, before speed-up, before rampant “professionalization,” the way the system worked was that everyone pretty much knew everyone, most knew everything they needed to do to do good research, everyone assumed everyone in the field should have access to the journals, and the pages of the journals was where the debate occurred.
Now, fields are massive, so no one knows what anyone is working on, few know everything they need to know to do good research, the assumption is that no one in the field should have access to the journals (hence ridiculous page limitations even Einstein would have routinely violated), and thus, the debate occurs outside the journal in the back and forth between ignorant reviewers, ignorant editors, and ignorant authors, none of whom represent the readers’ interest to see the debate.
Why this new system? This is what happens when the incentive shifts from publish something that lasts as long as Newton’s calculus to be known as someone who produced a lot of students. So, most in the field, produced out of that crazy incentive, know little, don’t belong there, create a lot of bad science, and stand in judgment of the few who do know a lot, do belong there, and do create a lot of good science.
Its a wonder anything published is of any value at all.
IAT
PS–Of course, recent research suggests the vast majority of research is, actually, unreplicable, i.e., useless. If we can believe the recent research, that is.
IAT
the facts that it is difficult to conduct controlled experiments on human subjects and that a large share of economics practitioners behave like prostitutes do not imply there are no valid scientific explanations to explain economic behavior.
I’m not saying that there are no valid scientific explanations to explain economic behavior. I’m just saying that economists, who are supposed to be the ones looking for these explanations, don’t seem very interested in doing so. Recent economic events don’t seem to have instigated much introspection in economics as a profession or field of study.
“When the facts change, I change my mind. What do you do, sir?” Apparently, the modern economist continues on like nothing happened.
“I can say authoritatively that peer review is useless.”
Isn’t establishing who is in the club a useful purpose?
What club? Who establishes who should establish who is in the club?
IAT
“Due to the profession’s religious convictions that continental plates could not move, forty-five years passed from the time when plate tectonics theory was proposed (Alfred Wegener, 1915) till when it was generally accepted (the 1960s).”
Al’s problem was that he couldn’t produce a driver that would enable continents to “plow” through solid rock. Well, that and that he was an atmospheric scientist and not in the geo club.
However, the whole IPCC not apologizing for the glacial statements and “climate gate” and their import on the entire subject of climate change has been blown WAY out of proportion. Pimples on an elephant’s @zz, really. Here’s a pimple from the other side: Perth has just had its 3rd consecutive record high yearly temperatures since data began to be collected 114 years ago is not a datum that will go away, no matter how many Frank Luntz’s and Climate-gates that Big Oil et al. can muck-rake. Unfortunately, this particular pimple has many friends that point to a full on case of global “pizza face”.
Global SSTs are rising and this increase will have global effects. All of the models (yes, they are predictive — guilty as charged — as are the models of theoretical physics, etc.) point to a further warming and drying of Australia and other changes throughout the world, most of which are not in our favor. I’d suggest getting off of the “religious” high horse and figuring what to do about climate change while we still have (any) options. Probably p1ss1ing in the wind, but it’s worth a shot, at least for my little one.
“the debate occurs outside the journal in the back and forth between ignorant reviewers, ignorant editors, and ignorant authors, none of whom represent the readers’ interest to see the debate.
Yep, we’re screwed.
<i.”Even most poor people in this country have electicity, running water, microwave ovens and cell phones and can and do show up at emergency rooms for serious medical needs. “
Well Anon… no. No they don’t and no they can’t.
But I’m sure more cake will fix that.
Modification blunders bedevil U.S. housing recovery
An empty mail box is seen at the front door of a foreclosed house in Miami Gardens, Florida in this September 15, 2009 file photo. REUTERS/Carlos Barria/Files
By Aruna Viswanatha
WASHINGTON | Sun Dec 18, 2011 8:09am EST
(Reuters) - Shirley Burnell, a community activist from Oakland, California, has been trying to get her subprime loan restructured since 2007.
She never missed a payment, but the adjustable rate mortgage she got in 2004 shot up to a monthly payment she could no longer afford.
First she provided documents without getting any response, then she was denied in April by her servicer, Bank of America, for not providing documents it never actually asked for.
As one part of the bank appealed that decision and approved her for a trial modification, another part denied her again - twice - providing two new reasons in part based on inaccurate calculations, according to documents reviewed by Reuters.
When asked about Burnell’s case, a bank spokesman said she was unable to qualify under “imminent default provisions,” a third reason that Burnell said she had never been given.
At one point, Burnell even received notice the bank would accelerate foreclosure proceedings, despite her perfect payment record and the letter itself saying the bank owed her $281.01.
“They gave you a funky loan in the first place, and now they’re refusing to work with people to get it worked out,” Burnell said. “It just keeps you upset all the time.”
Bank of America is “committed to keeping customers in their homes whenever the homeowner has the financial wherewithal to make reasonable payments and the desire to keep the home,” a spokesman for the bank said.
Three years after the foreclosure crisis began, the process to apply for a loan modification remains a bureaucratic nightmare that is complicating the housing recovery and could dull the impact of any Obama administration initiatives in the works.
…
In this case I agree with Combo: There is no intent of having a functional modification program. The intent is to merely keep FBs paying the mortgage, nothing more.
I concur—this is _such_ a good example of the “Keep Hope Alive” programs, aka “Keep the Sheeple Paying”.
“She never missed a payment, but the adjustable rate mortgage she got in 2004 shot up to a monthly payment she could no longer afford.”
Well, if she never missed a payment, apparently she COULD still afford to pay. Somehow.
The bank doesn’t care whether she has spent the last four years feeling “upset all the time.” They care whether the payments keep arriving, and they have, so the bank would call this a successful non-work-out.
If she had stopped paying four years ago, she likely would have gotten a mod, or some other relief—enough relief to keep her paying, anyway.
‘“They gave you a funky loan in the first place, and now they’re refusing to work with people to get it worked out,” Burnell said. “It just keeps you upset all the time.”’
Did the lender put a gun to Ms. Burnell’s head and make her sign the note?
No but lenders did say that sidling up to the refi-bar whenever the payments got difficult or the ARM reset would be an easy feat to accomplish. Their answer to any downside risk was, “Well you can always do a refi(cash out refi if you want some toys).
Somewhere along the line appraisers must have stopped hitting the mark, or they stopped giving out so many new ARMs to make payments stay more affordable temporarily; or the products that the lenders were procuring for the borrowers got more difficult to qualify for, like no-doc loans or stated income loans.
The ability to refi was a promise made by brokers/loan officers that duped plenty; and enabled plenty of unsophisticated borrowers to succomb to their greedy desires to be rollin in the dough. And they went for it cuz it was sold to them as a no-lose proposition. Was the “buyer beware”? NO. But being greedy and gullible is not a crime, it just made for a huge quantity of easy marks. And watching the neighbors zoom around in their BMWs made the borrowers throw caution to the wind, and all the more willing to be complicit if it made keeping up with the Joneses possible.
“But being greedy and gullible is not a crime …”
But one sure end up serving out a sentence as if it were.
“greedy and gullible”: I’d add to this the word “stupid”.
At some point one should ask a very simple question, which is: “Just how is this possible?”
How is it possible for someone to know what will happen in the future, such as one will be able to forever refinace into low interest rates?
How is it possible for one to know that RE prices will forever go up in price? That one can forever borrow his way into prosperity?
Simple questions, but were seldom asked.
Just how is it possible to know in advance that your monthly payments would double when your no doc, interest-only, payment-option ARM reset?
More cities see housing price decline in Nov
Updated: 2011-12-18 11:34
(Xinhua)
BEIJING - More Chinese cities posted monthly home price declines in November after the government took a slew of measures to curb runaway property prices.
In November, 49 cities out of the statistical pool of 70 major cities saw drops in new home prices from October, compared with 34 cities in October, the National Bureau of Statistics said on Sunday.
…
Peanuts Christmas saved from foreclosure
11:00 PM, Dec. 17, 2011
Snoopy greets 1-year-old Raeghan Thompson, from Newport Beach, Calif., at the “Snoopy House” Dec. 13 on the lawn outside City Hall in Costa Mesa, Calif. Jim Jordan started the animated display of Charles Schulz’s “Peanuts” Christmas characters 44 years ago. / The Associated Press
Jim Jordan kisses his wife Linda after the lighting of the “Snoopy House” display that Jordan started 44 years ago. Many who visited the Christmas display as children now bring their children to enjoy it. / The Associated Press
COSTA MESA, Calif. — Jim Jordan created a heart-warming Christmas display of Charles Schulz’s “Peanuts” characters more than 40 years ago at his Southern California home, and it became a holiday tradition as tens of thousands of people showed up each year to see the sparkling extravaganza.
Families trekked to the Orange County suburb of Costa Mesa to sip hot apple cider and share the wonder as seen through their children’s eyes amid twinkling Christmas lights, artificial snow and a Santa Claus that whisked through the air and down a chimney for spectators. It became so popular that busloads of visitors and school groups visited Jordan’s childhood home each year.
When he lost the house to foreclosure, it looked like the death of a tradition — until the city stepped in to save Christmas.
A week ago, Costa Mesa officials offered to host the display on the lawn outside City Hall. They turned on the lights Tuesday evening in a song-filled ceremony attended by a large crowd of families toting toddlers and cameras. Santa was expected to arrive later Tuesday and then make nightly appearances Dec. 18 to Dec. 23.
The move saved a Christmas display that Jordan says draws 80,000 people each year to see Santa and the nearly 200-foot stretch of characters, colorful cottages and other creations.
“This has been absolutely a Frank Capra movie, where I feel like I’m in the middle of ‘It’s a Wonderful Life,’” Jordan told scores of people who huddled outside City Hall in the chilly night air, recalling the 1946 classic that is an enduring Christmas favorite.
…
It’s a Wonderful Life
If you haven`t had to pay for a place to live in 3 or 4 years.
Every time a bell rings a Deadbeat misses another mortgage payment.
You know what this means?
There is an angel bubble.
Should mortgage payments be forgot,
and never brought to mind ?
Should all our payments be forgot,
and old lang syne ?
For auld lang syne, my dear,
for auld lang syne,
we live for free so we forget,
for auld lang syne.
And surely you’ll buy yourself a car !
and surely I’ll pay rent!
Many a year since payment sent,
for auld lang syne.
For auld lang syne, my dear,
for auld lang syne,
you live for free so you forget,
for auld lang syne.
I understand your anger with “deadbeats” Jeff. But the real problem is the lack of good paying jobs. That’s what we should really be angry about. Its the reason house prices are tumbling and why banks aren’t evicting the “deadbeats” (because they will have to realize the loss if they foreclose and resell the house at market prices, and why do that when you can borrow from the Fed at 0%?).
I do love how the Ministry of Truth tells us that all is well because:
Black Friday sales were up (they sure have been quiet about non Black Friday sales)
Inflation is “tame” (my grocery store bill begs to differ)
Unemployment is “only” 8.6% (does not include discouraged job seekers)
Never mind that half the country lives in or near poverty.
These are things to be upset about.
Exactly Colorado I still get 20-30 job offers a week and I should be rolling in dough making $100K from a fortune 500 company and listed on the NYSE…Earn what you are worth, the sky is the limit….
Yes take this “job” and earn NEGATIVE income you pay for materials for transportation gas and your time and wind up “earning” less then zero if you don’t sell anything…….Lots of those great jobs around.
And yet training for new careers is almost gone in NYC:
Welcome to the New York City Training Guide
The NYC Training Guide is a research tool that matches jobseekers with appropriate training programs to promote skills and career advancement. The NYC Training Guide provides detailed information about training courses and providers, enabling individuals to fully consider their training options and decide how a course meets their needs.
Important Notice
The Individual Training Grant (ITG) program is scheduled to resume December 1 with a limited number of available ITGs in the following occupations: Bookkeeping, Executive/Administrative Assistants, Medical Assistants, Legal Secretaries, and Paralegal/Legal Assistants. Jobseekers interested in these occupational trainings can call their local Workforce1 Career Center after December 1 to obtain the ITG assessment schedule.
ITGs for a limited number of additional occupations will be issued in February: Computer Support Specialists, Computer Systems Analysts, Network and Computer Systems Administrators, Office Managers (Administrative Service Managers), Fire Safety Directors, and Armed Guards.
But the real problem is the lack of good paying jobs.
“But the real problem is the lack of good paying jobs.”
Well then the answer is simple where I live. Just make everyone a fireman or woman and we will all make $150k a year + benes and we can all afford the $400k houses that all these people are living in for free. Everbody can pay the high property taxes so we can afford to pay ourselves. Wait a minute, that won`t work.
Just hire a lot of people, give them all shovels, and put them on two shifts.
The first shift spends eight hours digging a long trench and the second shift spends eight hours filling it in.
Make the trench form a large circle rather than a straight line. In this way - as the circle comes around and meets up with its beginning - the previously dug up dirt will be easier to dig into and hence more of the trench can be dug in an eight-hour shift. This will help boost the productivity stats.
The vast majority of firemen are not paid.
“Just hire a lot of people, give them all shovels”
Every day, I walk on sidewalks that are stamped “WPA 1940″. I wonder if private companies will (ever) provide 70 years of infrastructure or will they (and citizens) just use this public infrastructure and cry, “But wot dee gummint evah dun fo’ me?”
The Western World Is ‘Finished Financially’: CIO
By: Antonya Allen
Assistant Editor, CNBC
Published: Wednesday, 30 Nov 2011
7:38 AM ET
The Western world has run out of ideas and is “finished financially” while emerging economies across the world will continue to grow, David Murrin, CIO at Emergent Asset Management told CNBC on the tenth anniversary of coining of the so-called BRIC nations of Brazil, Russia, India and China, by Goldman Sachs’ Jim O’Neill.
“I still subscribe and I’ve spoken about it regularly on this show that this is the moment when the Western world realizes it is finished financially and the implications are huge, whereas the emerging BRIC countries are at the beginning of their continuation cycle,” Murrin told CNBC.
Murrin added he believes the power shift from the West to emerging economies beyond Europe and the United States was “unstoppable” and he blamed a lack of ideas from Western leaders on how to stimulate growth together with contracted demographics and rising inflation as catalysts for Western decline.
“We suffer from no growth and we suffer from imported inflation… that means we have negative real growth and societies fracture when you have negative real growth and quite simply our society faces fractures for trying to stick Europe back together again is not going to work with that underlying paradigm, unless you can create five percent growth to overcome that imported inflation,” Murrin explained.
Murrin said that the East was depending less on the West and the rise of a consumer society was the first step in the expansion of an economic empire.
“If you look at the cycle of an empire system from regionalization to expansion to empire, the first phases of that catalyst are when you have a self fuelled consumer society and so actually that process of building your consumer base which is really what’s going on in China, day by day their consumer base increases and the dependence on the West decreases,” he said.
http://www.cnbc.com/id/45489820/The_Western_World_Is_Finished_Financially_CIO - 151k -
While it is true that the West can no longer be counted on as the “Consumer of last resort” I doubt that the emerging economies will be able to continue growing without growing exports. Their low wage workers will not pick up the slack. What they will have is social unrest as millions around the globe are laid off from their jobs as westerners will be buying fewer of the goods they make.
“…David Murrin, CIO at Emergent Asset Management…”
Emergent = Emerging. Gosh, ya think he may be trying to play pump and dump, or at least trying to attract new investors to his fund’? Nah.
“…on the tenth anniversary of coining of the so-called BRIC nations of Brazil, Russia, India and China, by Goldman Sachs’ Jim O’Neill.”
O’Neill also coined the decoupling theory. How’s that working out for ya, Jimbo?
Bloomberg
China Debts Dwarf Official Data With Too-Big-To-Complete Alarms
December 18, 2011, 11:23 AM EST
By Bloomberg News
Dec. 19 (Bloomberg) — A copy of Manhattan, complete with Rockefeller and Lincoln centers and what passes for the Hudson River, is under construction an hour’s train ride from Beijing. And like New York City in the 1970s, it may need a bailout.
Debt accumulated by companies financing local governments such as Tianjin, home to the New York lookalike project, is rising, a survey of Chinese-language bond prospectuses issued this year indicates. It also suggests the total owed by all such entities likely dwarfs the count by China’s national auditor and figures disclosed by banks.
Bloomberg News tallied the debt disclosed by all 231 local government financing companies that sold bonds, notes or commercial paper through Dec. 10 this year. The total amounted to 3.96 trillion yuan ($622 billion), mostly in bank loans, more than the current size of the European bailout fund.
There are 6,576 of such entities across China, according to a June count by the National Audit Office, which put their total debt at 4.97 billion yuan. That means the 231 borrowers studied by Bloomberg have alone amassed more than three-quarters of the overall debt.
The fact so few of the companies have accumulated that much debt suggests a bigger problem, says Fraser Howie, the Singapore-based managing director of CLSA Asia-Pacific Markets who has written two books on China’s financial system.
“You should be more worried than you think,” he said of Bloomberg’s findings. “Certainly more worried than the banks will tell you.”
“You know how this story ends — badly,” he said.
…
Revolution and a return to Marxism.
A copy of Manhattan, complete with Rockefeller and Lincoln centers and what passes for the Hudson River,
geez they’re crazier than we are.
Ever seen Paris in Las Vegas, or Manhattan for that matter?
IAT
suffer from imported inflation”
imported deflation the west exports inflation
Why “too big to fail” means “wait
by Richard Fernandez
December 3, 2011 - 4:28 pm
Nassim Taleb, writing in Foreign Affairs, describes why a Black Swan came to Cairo without anybody noticing and in general why opinion leaders keep getting caught on the wrong foot by the arrival of “large-scale events that lie far from the statistical norm and were largely unpredictable to a given set of observers.” The fall of the Berlin Wall was a surprise. The 2008 meltdown was a surprise. The Arab Spring was a surprise. “Why is surprise the permanent condition of the U.S. political and economic elite?”
The answer, he argues, is that the elites won’t see them coming rather than that they can’t. Part of the problem is the consequence of their own damping. By attempting to centrally manage systems according to some predetermined scheme they actually store up volatility rather than dispersing it. By kicking the can down the road they eventually condemn themselves to bumping into a giant pile of cans when they run out of road.
Complex systems that have artificially suppressed volatility tend to become extremely fragile, while at the same time exhibiting no visible risks. In fact, they tend to be too calm and exhibit minimal variability as silent risks accumulate beneath the surface. Although the stated intention of political leaders and economic policymakers is to stabilize the system by inhibiting fluctuations, the result tends to be the opposite.
Thus every bailout and rescue made in the name of preventing the demise of something deemed “too big to fail” builds up a head of steam until the point is reached when the system can no longer contain the pressure. Then the volatility goes from a seeming zero to an extremely high number. The Black Swan will have arrived. And it always will for as long as fiction is substituted for fact, failure is relentlessly reinforced and false assurances are given all around. In Auden’s words “The lights must never go out, the music must always play … lest we should see where we are, lost in a haunted wood, children afraid of the night who have never been happy or good.” The antidote, Taleb argues, is information. To price risk into the present rather than hide it to fester unseen beneath the surface.
But the elites cannot admit to surprise; nor can they admit to bad things starting on their watch. Therefore they keep sweeping things under the carpet until, as in some horror movie, it spawns a zombie. To make systems robust, says Taleb, you’ve got to admit that you can make mistakes and pay the price. You will have to in the end anyway.
The policy implications are identical: to make systems robust, all risks must be visible and out in the open — fluctuat nec mergitur (it fluctuates but does not sink) goes the Latin saying. …
In the United States, promoting these bad policies has been a bipartisan effort throughout. Republicans have been good at fragilizing large corporations through bailouts, and Democrats have been good at fragilizing the government. At the same time, the financial system as a whole exhibited little volatility; it kept getting weaker while providing policymakers with the illusion of stability, illustrated most notably when Ben Bernanke, who was then a member of the Board of Governors of the U.S. Federal Reserve, declared the era of “the great moderation” in 2004.
This is a daunting task. Given the fact that politicians and economic managers are elected or promoted for their skill at “controlling events,” they can hardly admit that they cannot. It will take an intellectual revolution to make everyone realize that human control over the real world is really limited. And yet accepting that volatility must be faced rather than hidden is the key to preventing the arrival of even more Black Swans.
http://pjmedia.com/richardfernandez/2011/12/03/why-too-big-to-fail-means-wait-for-it/ - 358k -
The answer, he argues, is that the elites won’t see them coming rather than that they can’t.
Of course they won’t. They never have (hence the saying that “Marie Antoinette didn’t get it either”). Most think that they are truly exceptional and many even believe that they are divinely appointed, even in this age of atheism.
I just don’t see it this way. Three things happening currently that show this. One, the “end” of the Iraq occupation. Have you heard all the praise of the wonderful outcome? Democrats taking credit, Republicans saying, No!, it was our success! No mention of the disaster it all was. In that way, we did such a good job, lets get rid of Iran (and Syria, hurray)! Like the Neocons said long ago, everybody wants to go to Baghdad, real men want to go to Tehran.
The Euro “crisis”. Notice that they have a huge mess on their hands, but the PTB use this opportunity to amass even more power; even to strip countries of their elected govts and put in Goldman Sachs execs. Gotta pay those bonds, even if you sell off the nations resources to do it.
In the US, the people are restless. Some are even protesting in the streets. Did you see that video of pepper spraying those rich white kids? Golly it went “viral” (as if that counts for a damn thing). Meanwhile, these people in DC passed a bill this very week that makes it legal for the executive to indefinitely detain any citizen, with no trial or explanation.
IMO, the way it works is this: if they mess up, they either deny reality/claim victory and demand more power, or say look at this terrible mess, we’ve got to have more power to clean it up or all you people will face Armageddon. And while everyone is dazed by the BS or just turned off by the whole thing, they can sneak in the occasional torture/prison camp “law”.
They can’t lose in this system. Actually, the more they screw up, the more power they accrue. The primary function that can stop them, political opposition, is pretty much sealed off. And the idea we can rise up and throw these bastards off our backs is getting less viable by the day.
They can’t lose in this system. Actually, the more they screw up, the more power they accrue.
Until they go too far. And they always do. They think they are invincible and the really deluded ones believe that God is on their side. History will repeat itself.
“…if they mess up, they either deny reality/claim victory and demand more power, or say look at this terrible mess, we’ve got to have more power to clean it up or all you people will face Armageddon.”
That certainly describes the Bernanke Fed to a tee.
https://secure.ronpaul2012.com/?sr=28-gmb
The antidote to the Federal Reserve: Ron Paul. As Tallahasee said in ZOMBIELAND, time to nut up or shut up.
If Ron Paul makes it to the finals will your forecast change? While Ron Paul and his followers might not recognize it, if Paul follows through on abolishing major chunks of the government like the departments of Energy, Education, Environment, OSHA, HUD etc. AND slashes the DOD too it would be an Anarchist dream. The stage would be set for revolution by 2014 and maybe the military will pick our next President.
I’m still waiting to hear what would replace the Fed if Paul manages to “End It.” Perhaps this was covered in the GOP candidate debates, which I missed (except for snippets on Jon Stewart’s and Stephen Colbert’s shows).
That’s like wondering what the plumber will replace the clog in your drain with after the plumber removes it. If it is harmful, why would one replace it with anything?
IAT
Don’t forget the bill to allow the government to censor the internet(SOPA, or the Stop Online Piracy Act).
They use fear to concentrate power. Like every empire before for the last 2000 years.
Lend your ear to the blue haired welfare crowd. They cower in front of their TV watching cable news. The hypocrites of hypocrites. Outcome? Division.
Lend your ear to the far right. Hobgoblins from across the globe are amassing on our borders preparing to “take down this great nation”. All to further enrich the military industrial complex. Outcome? Death.
Lend your ear to the far left. Declaring the end of all things good unless we _____(fill in the blank with some illogical economic impossibility). Outcome? Disappointment and broken promises.
Those that create this fear? Oh they’re laughing as they take even more wealth, liberty and freedom from all of us.
Today’s views from the Arab Spring not so encouraging, watching male soldiers beat nearly nude Arab women nearly to death. Source is from the U.K.
http://www.dailymail.co.uk/news/article-2075683/The-brave-women-Middle-East-Female-protesters-brutally-beaten-metal-poles-vicious-soldiers-drag-girls-streets-hair-day-shame.html
Of course, it’s the people opposing the Arab Spring who are doing the beating, so it’s more than a bit disingenuous to imply the beatings are somehow being caused by the Arab Spring.
Unless you’re saying people demanding democratic rights are ‘asking for it’.
—ore than a bit disingenuous to imply the beatings are somehow being caused —
Did you suggest that?
And it’s wrong. And the IDF’s butchery of Palestinians? WRONG.
—-And it’s wrong. And the IDF’s butchery of Palestinians? WRONG.—-
I love the smell of delusion in the morning.
Next verse?
—-And it’s wrong. And the IDF’s butchery of Palestinians? WRONG.—-
I love the smell of delusion in the morning.
Next verse?
—And it’s wrong. And the IDF’s butchery of Palestinians? WRONG.
—-
I love the smell of delusion in the morning.
Next verse?
Next duplicate post Kevorkian? lmao
Next verse, same as the first…
Savers are right to be angry at low rates to prop up borrowers, says Bank of England man Dale
By Hugo Duncan and Becky Barrow
7:59 AM on 14th December 2011
Record low interest rates are giving savers good grounds for anger, the Bank of England admitted yesterday.
Spencer Dale, chief economist at the central bank, said slashing rates to just 0.5 per cent had pushed prudent households, particularly those of pensioners, into hardship.
Mr Dale said things would be worse had the Bank of England not cut rates and pumped up to £275billion of freshly printed cash into the economy through quantitative easing.
http://www.thisismoney.co.uk/money/saving/article-2073900/Savers-right-angry-low-rates-prop-borrowers-says-Bank-England-man-Dale.html -
Woe to those money managers who charge two-percent-or-so fees for managing their clients money.
These fees used to work in the the ten, twelve, fifteen-percent-return world we used to live in, but they don’t work all that well in the dismal low-percent-return world of today.
So what’s a client to do? Go to cash, maybe? If he goes to cash then why would he need a money manager?
This forces the risk reward ratio to be tilted somewhat. If a money manger is to lose clients because he cannot get a decent return matched by a decent risk then he will be forced to seek a decent return matched with an indecent risk.
It’s not as if he has much of a choice; If he doesn’t perform then his clients walk out the door and take their money with them; If he does perform then he gets to scrape off from the top his two-percent return.
And the risk reward ratio to him is not all that great in that the money he puts at risk belongs to somebody else.
A tilted risk reward ratio makes for some tilted prices, which may explain a lot to those of us who are trying to figure out what is happening now and what is probably going to happen somewhere down the road.
Fund managers still get thier 2% even if they do not perform. Its like CEO bonuses.
“Savers are right to be angry at low rates to prop up borrowers”
Where is it written that savers are guaranteed higher interest rates?
No where.
But then I don’t think it is legal to give some special borrowers (the too-big-to-fail variety) loans at zero percent that they can lend out to other borrowers (the non-too-big-to-fail variety) at “market rates” — is it? Why should only Megabank, Inc be able to get this deal? Why doesn’t the Fed make loans to Grandma and Grandpa so that they can pocket the spread the same way, especially if Grandma and Grandpa have plenty of loanable funds that would serve a better purpose if loaned out (at market rates) than if hidden away under the proverbial mattress?
Equal Credit Opportunity Act
15 U.S.C. section 1691(a)
(a) It shall be unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction —
(1) on the basis of race, color, religion, national origin, sex or marital status, or age (provided the applicant has the capacity to contract);
(2) because all or part of the applicant’s income derives from any public assistance program.
15 U.S.C. section 1691a(e)
(e) The term “creditor” means any person who regularly extends, renews, or continues credit; any person who regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who participates in the decision to extend, renew, or continue credit.
15 U.S.C. section 1691(e)
(a) Any creditor who fails to comply with any requirement imposed under this subchapter shall be liable to the aggrieved applicant for any actual damages sustained by such applicant acting either in an individual capacity or as a member of a class.
12 C.F.R. section 202.2(l)
(1) Creditor means a person who, in the ordinary course of business, regularly participates in the decision of whether or not to extend credit. The term includes a creditor’s assignee, transferee, or subrogee who so participates. For purposes of sections 202.4 and 202.5(a), the term also includes a person who, in the ordinary course of business, regularly refers applicants or prospective applicants to creditors, or selects or offers to select creditors to whom requests for credit may be made . . . .
From the U.S. Department of Justice
“But then I don’t think it is legal to give some special borrowers (the too-big-to-fail variety) loans at zero percent that they can lend out to other borrowers (the non-too-big-to-fail variety) at “market rates” ”
I agree.
Egypt’s military beat protesters
Updated: 10:33, Sunday December 18, 2011
Hundreds of Egyptian soldiers have swept into Cairo’s Tahrir Square, chasing protesters and beating them to the ground with sticks and tossing journalists’ TV cameras off balconies in the second day of a violent crackdown on antimilitary protesters that has left nine dead and hundreds injured.
The violent, chaotic scenes on Saturday suggested that the military - fresh after the first rounds of parliament elections that it claimed bolstered its status as the country’s rulers - was now determined to stamp out protests by activists demanding it transfer power immediately to civilians.
TV footage, pictures and eyewitnesses accounts showed a new level of force being used by the military against pro-democracy activists the past two days.
Military police openly beat women protesters in the street. Witnesses said they beat and gave electric shocks to men and women dragged into detention, many of them held in the nearby parliament building, witnesses said.
Mona Seif, an activist who was briefly detained during violence Friday, said she saw an officer repeatedly slapping a detained old woman in the face, telling her to apologise for joining the protests.
‘It was a humiliating scene,’ Seif told the private TV network Al-Tahrir. ‘I have never seen this in my life.
With Egypt in the midst of multistage parliamentary elections, the violence threatens to spark a new cycle of fighting after deadly clashes between youth revolutionaries and security forces in November that lasted for days and left more than 40 dead.
http://www.skynews.com.au/politics/article.aspx?id=697884&vId=2927984&cId=Politics - 24k
‘I have never seen this in my life.
Somehow, either he is lying or he wasn’t paying much attention under Mubarek’s reign.
Buttchops
http://mitchieville.com/2011/12/14/buttchops-2/ - 26k -
What an amazing photo! Talk about having your camera ready in the right place at the right time! It reminds me of a crack a guy made at a Christmas dinner last night; he said he wished he had his camera handy as he spotted Santa Claus heading into the loo.
http://market-ticker.org/akcs-www?post=199356
Kleptocracy becoming more brazen about seizing private property (ask MF Global bagholders).
Commodity traders who had precious metals accounts with MF Global have just been cornholed by Corzine. Welcome to crony capitalism, bagholders!
http://online.barrons.com/article/SB50001424052748703856804577098740322633760.html?mod=googlenews_wsj?mod=googlenews_barrons
The Silver Rush at MF Global
By ERIN E. ARVEDLUND
December 17, 2011
It’s one thing for $1.2 billion to vanish into thin air through a series of complex trades, the well-publicized phenomenon at bankrupt MF Global. It’s something else for a bar of silver stashed in a vault to instantly shrink in size by more than 25%.
That, in essence, is what’s happening to investors whose bars of silver and gold were held through accounts with MF Global.
The trustee overseeing the liquidation of the failed brokerage has proposed dumping all remaining customer assets—gold, silver, cash, options, futures and commodities—into a single pool that would pay customers only 72% of the value of their holdings. In other words, while traders already may have paid the full price for delivery of specific bars of gold or silver—and hold “warehouse receipts” to prove it—they’ll have to forfeit 28% of the value.
That has investors fuming. “Warehouse receipts, like gold bars, are our property, 100%,” contends John Roe, a partner in BTR Trading, a Chicago futures-trading firm. He personally lost several hundred thousand dollars in investments via MF Global; his clients lost even more. “We are a unique class, and instead, the trustee is doing a radical redistribution of property,” he says.
Roe and others point out that, unlike other MF Global customers, who held paper assets, those with warehouse receipts have claims on assets that still exist and can be readily identified.
The tussle has been obscured by former CEO Jon Corzine’s appearances on Capitol Hill. But it’s a burning issue for the Commodity Customer Coalition, a group that says it represents some 8,000 investors—many of them hedge funds—with exposure to MF Global. “I’ve issued a declaration of war,” says James Koutoulas, lead attorney for the group, and CEO of Typhon Capital Management.
At stake is an unspecified, but apparently large, volume of gold and silver bars slated for delivery to traders through accounts at MF Global, which filed for bankruptcy on Oct. 31. Adding insult to the injury: Of the 28% haircut, attorney and liquidation trustee James Giddens has frozen all asset classes, meaning that traders have sat helplessly as silver prices have dropped 31% since late August, and gold has fallen 16%. To boot, the traders are still being assessed fees for storage of the commodities…
Psycho-lad always said you gotta hold physical. And own a howitzer, IIRC.
This has been happening for the last 20 years. Where have you guys been?
Give Obama credit for one thing: finally cutting our losses in Iraq - the greatest strategic blunder in US history, along with Vietnam. Think long and hard about this fiasco when you hear the AIPAC-neocon cheerleading for more military adventurism in the Middle East.
http://news.yahoo.com/nearly-nine-years-u-withdraws-iraq-043831767.html
BAGHDAD (Reuters) - The last convoy of U.S. soldiers pulled out of Iraq on Sunday, ending nearly nine years of war that cost almost 4,500 American and tens of thousands of Iraqi lives and left a country grappling with political uncertainty.
The war launched in March 2003 with missiles striking Baghdad to oust President Saddam Hussein closes with a fragile democracy still facing insurgents, sectarian tensions and the challenge of defining its place in an Arab region in turmoil.
The final column of around 100 mostly U.S. military MRAP armored vehicles carrying 500 U.S. troops trundled across the southern Iraq desert from their last base through the night and daybreak along an empty highway to the Kuwaiti border.
“We don’t think about America… We think about electricity, jobs, our oil, our daily problems,” said Abbas Jaber, a government employee in Baghdad. “They (Americans) left chaos.”
Butbutbut Saddam was only 45 minutes away from launching a nuclear attack on the US, Condeleeza Rice told me.
Saddam had Anthrax ready to go, Colin Powell told me.
Saddam had already attacked us with Anthrax, John McCain told me.
Fool me once, shame on you. Fool me twice, won’t get fooled again!
And the neo-con cabal around Rumsfeld said the war would pay for itself, and the oppressed Iraqi people would be “dancing in the streets” when we liberated them.
Not so much. And the ultimate price tag will be upwards of $4 trillion, not counting the human toll.
“not counting the human toll”
How many “senator’s sons” are on that list?
Your kid = cannon fodder for a defense contractor
Their kid = partner at GS
The goal was to build U.S. controlled airbases in the desert to threaten Iran thus providing added security for Israel. It worked, but it was very costly in lives and money.
Israel’s national anthem: “Onward Christian Soldiers.”
That’s a good one. I think you are hitting the nail more on the head than you think you are.
“AIPAC-neocon cheerleading for more military adventurism in the Middle East.”
I note that with the exception of Ron Paul, the GOP party presidential hopefuls are already hinting that if elected, they would out-hawk Obama.
Military Experience of Current GOP Presidential Candidates
Posted by Dustin Krutsinger at 3:25 pm
July 04, 2011
As we are celebrating the day of our independence, many of us are also contemplating who we should support in the next presidential election.
Although certainly not an absolute prerequisite, a majority of the men who have served in the nation’s highest position had military service.
In fact, 31 of our 43 presidents have served in the military. In the last 60 years the following have served in uniform; Truman, Eisenhower, Kennedy, Johnson, Nixon, Ford, Carter, Reagan, and both HW and W Bush. Among recent presidents, only Obama and Clinton have failed to serve. Recent candidates McCain, Kerry, Gore, and Dole all served as well.
As we find ourselves involved in conflicts across the globe, active in two ground wars (Iraq, Afghanistan), one air war (Libya), and at least two drone wars (Yemen and Pakistan), the need for military experience in a commander-in-chief could not be greater.
Of the current GOP presidential candidates, only one has served the nation in the military, Ron Paul.
…
One thing about having a president who served in the military, or whose sons did so: It has to change their perspective about the costs of going to war.
August 8, 2007, 7:56 pm
Questions About Romney’s Sons and Military Service
By MICHAEL LUO
CEDAR RAPIDS, Iowa — It is a question that Mitt Romney has gotten before on the campaign trail. Sometimes it is asked innocently; sometimes with a clear edge.
A woman at an Ask Mitt Anything forum earlier today in Iowa raised the question again, asking whether any of Mr. Romney’s five sons are serving in the military, adding pointedly, “If none of them are, how do they plan to support this war on terrorism by enlisting in our U.S. military?”
Although his campaign said his remarks were taken out of context, Mr. Romney’s response is drawing criticism, because he said, in part, “one of the ways my sons are showing support for our nation is helping to get me elected.”
…
This guy is worse gaffe machine than Biden. “Corporations are people my friend” “I can’t have any illegals mowing my lawn I’m running for office for goodness sake” “My sons support this military by getting me elected…” These are clues as to what this guy is really like…
The hubris shines through despite his fake folksy personna and that pedophile grin.
In fairness, nearly every CIC that comes to mind had a folksy persona, whether fake (GWB) or genuine (Jimmy Carter, Bill Clinton, Ronald Reagan). The only ones I recall failing miserably in the effort were Nixon and GHWB.
Since we are facing the prospect of the first-ever LDS nomination for GOP presidential candidate, it might be a worthwhile time to dust off the history books and recall the first Mormon leader to seek the U.S. presidency. Get yourselves ready for “theodemocracy,” America!
The First Mormon Presidential Candidate
By JAKE TAPPER
Dec. 6, 2007
Mitt Romney is the most recent member of the Church of Jesus Christ of Latter Day Saints to seek the office of president.
But the first Mormon to seek the White House was also the first Mormon — Joseph Smith Jr., the founder of the Mormon Church, whose 1844 presidential campaign is historically notable not only because it was the first one in which the candidate was assassinated.
Smith’s campaign 163 years ago was quite a bit different than Romney’s, of course. In Romney’s highly anticipated address Thursday about the role of faith in America, he only mentioned Mormonism by name once, and he invoked Abraham Lincoln’s concept of “America’s ‘political religion’ — the commitment to defend the rule of law and the Constitution.”
First Mormon to Seek White House
Smith directly pushed what he called “theodemocracy,” the blending of religious belief and democracy. And his campaign was rooted entirely within the church that he founded; at the April 1844 LDS general conference, 244 church elders heeded the call to volunteer for Smith’s campaign.
Hundreds of Mormons traveled the United States to spread the word not just of Smith’s prophesies but his candidacy; many of them met with angry mobs and violence.
“There is not a nation or a dynasty now occupying the Earth which acknowledges almighty God as their lawgiver,” Smith told the Neighbor newspaper in Nauvoo, Ill., where he and his church brethren were then headquartered.
“I go emphatically, virtuously, and humanely, for a theodemocracy, where God and the people hold the power to conduct the affairs of men in righteousness.”
Announcing his candidacy Jan. 29, 1844, Smith told his supporters, “Tell the people we have had Whig and Democrat presidents long enough. We want a president of the United States.”
Megalomaniacal Madness
To Smith’s detractors, his presidential run could only be seen within the context of his megalomaniacal madness. Mormon historians, however, argue that Smith was trying to stand for his principles, argue publicly for civil liberties for Mormons and publicize the church.
According to “The Prophet and the Presidency: Mormonism and Politics in Joseph Smith’s 1844 Presidential campaign,” a 2000 study of Smith’s campaign by Timothy Wood in the Illinois State Historical Society, Smith’s supporters even had their own catchy cheer:
“Kinderhook, Kass, Kalhoun, nor Klay/Kan never surely win the day./But if you want to know who Kan/You’ll find in General Smith the man.”
…
Was Smith even in the Army?
Depends on the meaning of the word “the”. If you mean the US Army, I think the answer is no. If I’m remembering correctly, Nauvoo IL had a good sized militia for its time, though, and he was probably the commander.
Separation of church and state notwisthstanding, the Mormons really had to hold their own in the mid-to-late 1800s against adherents of the previously-established flavors of Christianity. In fact, it wasn’t until they moved away from polygamy in the 1890s that Uncle Sam finally decided they weren’t half bad and granted Utah statehood.
MSNBC has front page photos of some guy dressed as an exterminator but dispensing a flammable liquid that was apparently used to douse a woman in an elevator before setting her ablaze. WTF?
It’s way beyond sick.
I saw a little more info, apparently he was an ex.
Besides how bad it was at an individual level, it also got me to thinking about how we’ve gotten used to the idea that warfare is conducted mostly with guns. And how that could lead to bad assumptions about future wars.
You can NEVER be too careful with whom you hire to help around your home. I am reminded about the story of the Elizabeth Smart kidnapping in Utah a few years back; the assailant had done odd jobs around the Smart home and knew exactly how to execute the break-in and getaway.
NY CRIME
DECEMBER 19, 2011
Handyman Charged in Elevator Arson Death
By JESSICA FIRGER and HEATHER HADDON
A 47-year-old handyman was arrested Sunday in connection with the brutal burning death of an elderly Brooklyn woman who was doused with flammable liquid and set ablaze in the elevator of her apartment building, authorities said.
Jerome Isaac, who lived a block from the woman in Prospect Heights and claimed the victim owed him money for odd jobs, was charged with murder and arson in the death of Deloris Gillespie, 73 years old, of Underhill Avenue, said police and the victim’s relatives.
Ms. Gillespie, the mother of four adult children, was returning home from a shopping trip at a nearby Key Food Saturday at around 4 p.m. when she exited the elevator at the fifth floor to find Mr. Isaac standing there, according to her nephew Rickey Causey and police.
Surveillance camera images released by police showed a man wearing white gloves and a white head-covering spraying liquid from small hose into an elevator. Police said the liquid was flammable.
Police said Mr. Isaac then lit Ms. Gillespie on fire and fled. Police didn’t reveal what liquid was used.
Ms. Gillespie and the elevator were engulfed in flames, and her body was discovered by firefighters responding to the blaze. She was pronounced dead at the scene.
Ms. Gillespie, who worked the overnight shift at the main U.S. Postal Service processing center in Brooklyn, had hired Mr. Isaac about three years ago to help her around the house, said her son, Maurice Gillespie, 37, who lived in his mother’s apartment.
Mr. Gillespie said his mother—who was separated from her husband and had a hard time lifting heavy items—fired Mr. Isaac about a year-and-a-half ago after she caught him stealing from her, including money, a radio and a computer. At around the same time, her grandson also reported seeing him walking away with a shopping cart filled with her belongings, Mr. Gillespie said.
Mr. Gillespie said Mr. Isaac’s relationship with his mother deteriorated rapidly after the firing.
“He was basically stalking my mother. He chased her down the street,” said Mr. Gillespie, who said Mr. Isaac entered the building dozens of times since he was fired.
…
It’s a really sad story. That poor woman. Nobody deserves that, and I mean nobody.
Good grief I nearly forgot!!!!
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Realtors Are Liars®
I am sorry, sir, but Liars is just too kind a reference.
Perhaps, Realtors are Swindlers, or Chislers, or ConArtists, or grifters or some other pseudonym would best describe the trade they ply. (I was going to say the “work they do”, but that gives work a bad name).
Criminals?
The plane, the plane…
The plane is pulling up to the gate. Just wanted to wish you all a goodbye and say Happy Holidays as I leave with the family to China.
Not to worry, as my 5 years on the Ben’s wonderfull HBB, won’t be my last as it is just for a few weeks. We be seeing family in Chongqin and a brief visit to Shanghai.
Of course, I will keep my eyes and ears open on what’s happening with the Chinese housing and economy.
I would love to keep up with the real news and with all of your views here on the HBB, but the “Great Firewall” prevents that.
Again,
Best Wishes to all!
To anyone who fails to take offense at anything I posted today, I sincerely apologize. I am feeling extremely cantankerous at the moment, and I hope it shows.
I am offended at your apology. How dare you assume I fail to take offense at your posts.
You’re my brother by another mother, Combo!
Dad sure got around a lot, didn’t he?
Outstanding!
To any Obama and McCain voters who have been offended by my characterization of you as zombies, mutants, vegetables, lemmings, etc., I wish to say, sincerely and from the bottom of my heart, that you need to get your lobotomies reversed.
“To any Obama and McCain voters who have been offended by my characterization of you as zombies, mutants, vegetables, lemmings, etc.,”
I`m not offended, although it is possible that Buttchop might be.
http://mitchieville.com/2011/12/14/buttchops-2/ - 26k -
Conditions are ripe for reprise of real estate schemes and fraud
Severely marked-down prices, record low interest rates and hundreds of thousands of foreclosures waiting to be resold may be reviving the practices that led to the housing market crash.
By Kenneth R. Harney
December 18, 2011
Reporting from Washington—
Could today’s seductive conditions in the housing market — severely marked-down prices, record low interest rates and hundreds of thousands of foreclosures waiting to be resold — be breeding new generations of the very practices that led to the crash?
In an ironic twist, there are signs that the wreckage left over from the housing bust may be reigniting dubious real estate schemes and fraud. According to researchers:
•Property flippers are back in action in places like south Florida and Las Vegas, where condominium prices crashed but are now appreciating again in some areas.
•So-called floppers are defrauding banks by hijacking short sales at prices below what legitimate buyers are willing to pay. In these schemes, realty agents obtain fraudulent appraisals to persuade banks to sell houses at below-market prices to investor groups. The investors then flip the houses at fair market prices to ordinary home buyers and split the quick profits.
•Creative “credit enhancement” companies are “renting” investors the bank account balances they need to demonstrate to lenders that they have the financial wherewithal to qualify for a mortgage. The accounts are real, but they don’t belong to the loan applicants who claim them. Account names are assigned to applicants — who pay for the service — but they are never allowed access to the money. When mortgage underwriters check to verify the deposits, which are in reality fraudulent sub-accounts, they are told the money is in the name of the loan applicant.
•Investors are hoodwinking lenders into giving them low down payments and rock-bottom interest rates by lying about their intentions to occupy the property they plan to buy as a principal residence. Some investors consider such dissembling nothing more than a fib, but in reality it’s bank fraud. Researchers at the Federal Reserve Bank of New York have documented that widespread falsehoods by investors about occupancy played a major but previously unrecognized role in the real estate bust.
To Ann Fulmer, a former white-collar crime prosecutor who is now a vice president with mortgage fraud analytics company Interthinx, this amounts to a “past is prologue” situation. The market conditions are ripe for a reprise of some of the worst behavior of the boom and bust. Her firm’s latest study of mortgage fraud nationwide, covering loan origination and other data from the third quarter, found that applicants’ dishonesty about their employment and income was up 9% from the same period a year earlier and 50% from the third quarter of 2009. The reason: Borrowers increasingly are falsifying W-2s and other records to meet the tougher debt-to-income thresholds lenders adopted after the bust and recession.
…
If it takes rampant fraud to accomplish the Fed’s mission of getting real estate to always go up again, so be it!
Since the Fed has $2.3 trillion in subprime mortgages that it took up the hands of its bankster accomplices, they have a vested interest in trying to levitate real estate as well as the market. It will be an epic fail, but the Biggest Loser, as always, will be the US taxpayer.
Ah, yes, love the NAR, the taxpayer’s friend.
The REIC continues to trap young families into dire financial straits, which is really just eating the young for survival, IMHO. Ruined credit, broken families, etc., will eventually lead to dismal retirements for the generation currently in the latter half of their career.
“Ruined credit, broken famalies, etc., will eventually lead to dismal retirements for the genertions currently in the latter half of their career.”
Maybe so, but an operating word here is the word “eventually”.
The meaning of the word “eventually” boils down to “not now, but later”. We live in a “not now, but later” political world and until this changes the “eventually” word (as did Poe’s Red Death) will “hold sway over all”.
ha ha, I read to the word “eventually” and then scanned as my eye moved to the word on the next line. I saw the name of Poe and expected you to say Pit and The Pendumlum.
Maybe I was projecting. That’s what this whole thing feels like to me. It feels like my mind woke up from the darkness. I looked up trying to focus and then I saw this building danger coming at me slowly. But I was powerless to do anything but watch it move closer, biding my time until the end while feeling more desperate w/every passing sweep (market scare).
Think of Generation Ruined Credit as Megabank, Inc’s future customer base which will pay subprime (above-prime) interest rates, and it will make more sense.
“In these schemes, realty agents obtain fraudulent appraisals to persuade banks to sell houses at below-market prices”
I don’t know who to root for here.
The first paragraph re NY and NJ foreclosures gave me Christmas cheer but then I read the 2nd paragraph. I’m starting to wonder if I should have bought a while ago. Or does anyone think there won’t be enough investors out there for this to work. I’m getting a sinking feeling of being totally bypassed for any chance at opportunity.
“….Other states, like New York and New Jersey, are still seeing huge delays in the foreclosure process–986 and 984 days respectively, says RealtyTrac, but they too are starting to ramp up, as various moratoria have been lifted and judges have made rulings that will kick-start the process. That will mean more distressed properties surging into an already troubled housing market. Foreclosure starts outnumber sales by three to one, and 45 percent of foreclosure starts in October were repeat foreclosures, according to Lender Processing Services.
While overall inventories of homes for sale have been dropping somewhat steadily over the past year, these new distressed properties will put increasing downward pressure on home prices nationally. The hope is that there are enough investors at the ready to buy these properties quickly, as they seek to take advantage of a growing rental market. Government agencies are considering a plan to sell repossessed homes from Fannie Mae and Freddie Mac in bulk to investors, but there has been little movement of late. Bank of America [BAC 5.20 -0.06 (-1.14%) ], which took over the troubled loans of Countrywide Financial, is setting a plan in motion to sell its repossessed homes to investors, who would then rent them back to the original borrowers. Both government and the private sector know that until the backlog of distressed properties is cleared, the housing market will have little chance of regaining a solid footing.”
“Or does anyone think there are not enough investors out there for this to work.”
Keep in mind that there are money managers out there who are desperate for getting a decent return on the money they manage else their investors will yank their money away from them and leave them stranded as money-less money managers.
If you want to starve to death then become a money manager with no money to manage.
So to keep hope eternally springing forth new ideas need to be conjured up by money managers so as to keep money flowing into their coffers instead of flowing out of their coffers.
Paragraph two contains one of these new hope-springing ideas, and - IMO - it just might fly if the proper spin is placed on it. When I say “might fly” I mean it might work out from the money manager’s point of view. But from an investor’s point of view I don’t have much hope.
This is just my opinion, one opinion among many.
Also keep in mind that the PTB have a great interest in keeping RE prices elevated so any idea they can possibly latch onto to keep prices up will be heavily promoted.
Higher for us, the retail client, but I think the bulk sales prices we’ve seen so far to investors have been deeply discounted. They’ll have cash flow situations that aren’t available to us.
All they’ll need are renters - with money.
Link to last post where it sounds like our gov is considering selling foreclosures to investors in bulk to rent back to those that have lost them in bankruptcy.
Perhaps I should consider the source.
http://www.cnbc.com/id/45682960
You don’t remember the RTC?
You mean the equity partnerships?
Vacant homes being torn down in Cleveland…just started 7:40 EDT, the story on 60 minutes, started late after the game. There are as many vacant homes awaiting demolition as there are w/people living in them. Thieves were scavenging materials and appliances from the abandoned homes. So the town is tearing them down and creating green space trying to rescue the value of the homes still there from the creeping blight.
They are now getting into the fact that the banks used to take responsibility when buyers defaulted but now even they are walking away. The host actually says the bubble was of their making. There also was a mention money had gone looking for buyers in the run up instead of vice versa. Phony appraisals were also mentioned.
We really do need to string someone up for this.
60 Minutes - HOLY $HIT.
I am so glad I am renting.
and not living in Cuyahoga County.
That was really sad. For anyone who didn’t catch it they’ve already torn down about ten thousand and are going to take down 20,000 more for a cost $150mil.
Where did all the people go who once lived in those 30,000 homes?
Florida.
A home of your own:
http://tinyurl.com/cezpyzg (image)
“…take down 20,000 more for a cost $150mil…”
That would come out to a cost of
$150,000,000 / 20,000 = $7,500 per home.
They could probably have sold those home on ebay for more than -$7,500 (net of closing costs) — i.e. if the cost of selling the homes net of the sales proceeds was less than $7,500 per home, it sounds like the bulldozer option didn’t pencil out for somebody.
What am I missing here?
The “Bulldozer Solution.”
It was a logical conclusion of the fact framework I had even several years ago. I wasn’t sure if the FIRE sector could pull it off however.
But by golly, bravo. Instead of selling the houses at market clearing prices, the current system, created by the FIRE sector and the bought Congress, leads to The Bulldozer.
How the banks make more money from The Bulldozer, rather than selling at a loss intrigues me.
Welcome to the centrally planned housing market.
“How the banks make more money from The bulldozer, rather than selling at a loss intrigues me.”
Me too. Makes me, a taxpayer, want to rush off to the drugstore for a fresh tube of KY.
Industrial strength.
“Me too. Makes me, a taxpayer, want to rush off to the drugstore for a fresh tube of KY. ”
Naw, just get you a shovel for that ditch thingy you mentioned earlier.
I think tax loss carryforwards where the loss is full market. Only thing that makes sense.
Notice that there was no mention of selling them at auction because that would lower the comps, and the tax base, and the loan book values, and…well we just can’t have any of this free market nonsense. Everything must be directed toward keeping housing un-affordable.
There is no mystery here, given that the banks can get zero percent loans from the Fed and that their GSE loans are federally guaranteed. If a GSE makes good on the too-big-to-fail federal guarantees of principle balances on its loans, then bulldozes a substantial share of the collateral to increase the overall value of its REO inventory portfolio, where is the harm?
Indeed.
It’s like there are two sets of rules, one for the big, connected companies, and another for the little guy. Recently the lapdog media was pushing stories about the evils of the little guy walking away from a bad real estate investment. But bulldozing inventory is met presented as an insightful, societally beneficial move.
I recall, with some dark amusement, the difficulty of rolling over a retirement account out of a big investment company. It took 30 days, with lots of time spent on the phone, and back-and-forth with the forms, to finally get the check. This company doubtless does high frequency trading, yet they lecture small savers about the evils of trading and makes moving money as problematic as possible.
Welcome to the centrally planned plutocracy.
But when I do buy…
http://www.zillow.com/homedetails/17721-Long-Point-Dr-Redington-Shores-FL-33708/47249819_zpid/
(We’re getting closer.)
Not bad for a “shores” neighborhood w/actual waterfront.
http://www.aljazeera.com/news/asia-pacific/2011/12/201112193620221153.html
Kim Jung-Il has died. If there’s a hell, fewer people are more deserving of a place in it.
KOSPI Slides on News of Kim Jong-il’s Death
Published: Sunday, 18 Dec 2011 | 10:39 PM ET
Asian stocks fell on Monday on fears possible credit ratings downgrades of several European countries could derail progress towards resolving the euro zone’s debt crisis.
The FTSE CNBC Asia 100 Index [.FTFCNBCA 5490.09 -131.53 (-2.34%)], which measures markets across Asia, shed 1.5 percent.
Seoul shares extended their fall to nearly 5 percent after North Korea’s state television reported that North Korean leader Kim Jong-il had died on Saturday.
The market’s key large-cap stocks tumbled across the board, with Samsung Electronics, the world’s No.1 memory chip maker and the largest stock on the KOSPI, down 3.5 percent and LG Display, the world’s No.2 flat panel maker, down 7.2 percent.
The Korea Composite Stock Price Index (KOSPI) [.KS11 1766.50 -73.46 (-3.99%)] was down 4.2 percent after falling as much as 4.9 percent.
Japan’s Nikkei share average dropped to a three-week low as worries over the euro zone debt crisis heightened after Fitch Ratings warned of possible downgrades for seven European nations.
The benchmark Nikkei [.N225 8288.50 -113.22 (-1.35%)] had fallen 0.8 percent to 8,331.00 by the midday trading break, while the broader Topix lost 0.9 percent to 717.39.
Shippers and securities were the biggest percentage losers on the main board, with Tokyo’s sea transport subindex falling 2.7 percent and the securities subindex dropping 3.5 percent.
Nissan Motor bucked the trend, rising 3.4 percent after the automaker said it would buy up to 0.3 percent of its shares outstanding for as much as 10 billion yen between Monday and Thursday.
Scandal-hit Olympus shed 7.7 percent, continuing its fourth day of losses, after media reports that the Tokyo police, prosecutors and the securities watchdog were preparing to raid its offices this week as the firm struggles with a $1.7 billion accounting scandal.
Australian shares extended falls to trade down just over 2 percent in late morning trade, hit by worries about the euro zone debt crisis hurting the global economy and falls by retailers on concerns of weaker than expected Christmas sales.
…
He’d been il for a long time.
+1 LOL!
For his whole life, apparently.
Will the housing market come back next year after the Souper Bowl?
Dec. 18, 2011, 8:00 a.m. EST
No holiday gifts likely for U.S. economy
Housing market, European crisis remain drags as 2012 approaches
By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — In the week before Christmas, investors would love to see the U.S. housing market revive and Europe resolve its debt crisis.
Neither of those gifts, however, is likely to be unwrapped this week.
Although the dormant housing market has shown signs of life recently, economists expect sales and construction to remain low. Indeed, 2012 is shaping up to be the worst year in modern times for the housing industry.
The debt dilemma in Europe, meanwhile, remains unresolved after months of negotiations and investors doubt the latest ”fixes” will work. The debt crisis largely explains why the U.S. stock market has gained so little traction over the past few months.
The pre-Christmas raft of data kicks off Monday with the Home Builders index. Also on tap this week are November reports on new home construction, new home sales and existing home sales. Other key reports include personal spending and income and orders for durable goods.
…
MarketWatch consensus
See economic calendar
date report Consensus previous
Dec. 19 Home builders’ index 20 20
Dec. 20 Housing starts 635,000 628,000
Dec. 21 Existing home sales N/A 4.97 million
Dec. 22 Jobless claims 375,000 366,000
Dec. 22 GDP 2.0% 2.0%
Dec. 22 Consumer sentiment 68.0 67.7
Dec. 22 Leading indicators 0.3% 0.9%
Dec. 23 Personal income 0.2% 0.4%
Dec. 23 Consumer spending 0.3% 0.1%
Dec. 23 Core PCE price index 0.1% 0.1%
Dec. 23 Durable goods orders 3.2% -0.5%
Dec. 23 New home sales 315,000 307,000