December 30, 2011

Weekend Topic Suggestions

Please post topic ideas here!

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Comment by Ol'Bubba
2011-12-30 05:40:42

If you were appointed “benign and benevolent dictator” for one day and you could change 3 things, what would those 3 things be? Emphasis is on benign and benevolent - the objective is to correct, not to punish. Come to think of it, maybe there could be two threads. :)

Comment by combotechie
2011-12-30 06:50:33

1. Change our economy from being consumer-based to being based on something else.

2. Reduce incentives for corruption.

3. Institute World Peace.

Since I would be dictator for an entire day I would accomplish these things first thing in the morning and then take the rest of the day off.

Comment by Muggy
2011-12-30 07:05:41

I love #1. I’d be there, cheerin’ you on, dude. My sign would read:


Comment by combotechie
2011-12-30 07:25:08

Solve #1 and you will solve most of our problems, IMO.

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Comment by Muggy
2011-12-30 07:27:06

I know, I’m being serious! I’m a long time admirer of your Pooh Bear/Zen simplicity.

It really is simple.

Comment by Prime_Is_Contained
2011-12-30 09:48:08

“consumer-based” sounds bad, but when you get right down to it, isn’t the whole point of the economy to meet the material needs of the people who take part in it?

In other words, #1 makes NO sense. What else could it possibly be based upon?

Comment by combotechie
2011-12-30 10:10:51

“… isn’t the whole point of the economy to meet the material needs of the people who take part in it?”

Material needs is one need, employment needs is another. There needs to be a balance.

Consuming by way of borrowing is not sustainable; The consumer-based economy, AT ROOT, was powered by borrowed money rather than earned money.

The result of this imbalance can be readily seen now that the borrowing has ended.

Comment by Posers
2011-12-30 10:23:33

The economy always MUST be consumer based. Even a 100 percent barter economy is 100 percent consumer based. Otherwise, you have no economy and it’s every man for himself/herself.

It’s not consumerism that is bad. Morals and ethics that have run amok is the real problem. The lack of legal and societal enforcement of agreed-upon laws, contracts, social mores (and the resulting penances) is making life increasingly unworkable for nearly everybody.

A misplaced sense of entitlement breeds corruption, theft, class warfare, etc. Everybody thinks that somebody else owes them something and acts accordingly. The Mike Royko “Where’s Mine?”

The old John Hausman/”we earn it” commercials from the 1970s marked the end of an era. That mindset, which seems quaint, even archaic today, will make a big comeback by 2030. The populace will create, then enforce concepts of “trust”, “reliability” and “stewardship” that have been absent for decades.

Once that happens, “consumerism” will resemble what it should be. A mostly reliable, predictable and honorable exchange of goods and services based on need and want.

We don’t have that today because the rules change too often and the crooks aren’t in jail. That will change. Joe and Jill 6-pack will make it happen. Tea Partiers and OWS are just the beginning of something much bigger and better for most people. I think the rise of both the Tea Party and OWS are very encouraging. I believe the appearance of both increases the likelihood that The Constitution (Rule of Law) will prevail.

I’m glad I’m relatively young. I’ll likely live to see those future days. I won’t have much in the way of assets (due mostly to demographics), but I will live to see dignity and decency again. That’s very important to me.

Comment by Posers
2011-12-30 10:28:57

Oops - Meant to say…

The Mike Royko “Where’s Mine?” meme from 25 years ago was prescient. (Or something like that)

Comment by goon squad
2011-12-30 10:46:35

I will live to see dignity and decency again

Very optimistic and idealistic but fat chance it happens in this country, we’re just too far gone…

Comment by polly
2011-12-30 13:56:13

I’m with the crew who wants to know what you mean by “consumer based” and what you want to replace it with. Because the only alternative that I am aware of is export based and everyone in the world seems to want that. We can’t all be exporting more than we are importing at the same time unless we find some off-world trading partners.

And export based remains very difficult if we keep letting corporations export US developed intellectual capital to their foreign subsidiaries for less than it is worth and then don’t tax them on the income created by the foreign subs until it is repatriated.

Not that corporations actually pay taxes, but they might pay a little if we closed that little loop hole.

Comment by Posers
2011-12-30 14:02:29

It’ll happen. But not until those born before 1955 are dead and buried - or close to it.

Those born after 1990 are quite different. They and those yet to be born in the next 15-20 years will observe festering rot and, importantly, will have the fortitude, energy and desire to dispose of it and forge a better path. And they will. They will determine they have nothing to lose.

And since we’ve proven not to be interested in helping them, they will define what that path is and get on with the task. And more power to them. It’s not going to be anything like what we collectively blather on about here.

They get to decide. We don’t. Good.

Comment by Muggy
2011-12-30 14:17:15

“I’m with the crew who wants to know what you mean by “consumer based” and what you want to replace it with.”

I think he meant, like, not buying with credit, and then second, we make the stuff we use and not just consume.

Comment by Muggy
2011-12-30 14:19:52

“It’ll happen. But not until those born before 1955 are dead and buried”

Geez, and here I thought I was the board’s resident generational sniper.

Aww, we have something in common *HUGS*

Comment by Posers
2011-12-30 14:49:02

Thanks for the clarification, combo. I see what you’re saying and agree with that portion of it philosophically-speaking.

Do remember that borrowed money/credit provided much beneficial lubricant until Greenspan came along to screw everything up with nutty metrics and/or lack thereof. Bernancke, of course, has made things even worse. Undoubtedly, this has been talked about on this board numerous times, so that’s that.

What I don’t like seeing is people throughout society using “consumer based” and “credit based” lines of thought interchangeably. There seems to be a lot of that here, too.

It’s funny…folks here clearly get that no one actually “owns” a house if they have a mortgage, yet they don’t understand that the same thing occurs in the world of social entitlements. No one “owns” those either, but people act as if they do…as if they have a contractual right to them. They don’t. You don’t. No U.S. taxpayer does. That needs to change, or the programs dissolved.

I could be wrong about my impressions…but regardless, they are what I, as a newcomer, understand to be thinking of those on this board in general.

Comment by Posers
2011-12-30 15:11:59

Everyone on this board has a great deal more in common than they realize. Like a desire to make things right - or at least better. None of us are exactly thrilled at where things stand today.

Be confident that we humans will hash it out in the end, regardless of how much we may disagree right now or irritate the crap out of each other sometimes. Dire economic straits will make us grow up eventually. We’ve a doozy of a problem that’s going to require lots of different, disperate hands to solve.

The drag is that no one has yet come up with The Idea that makes us all swoon in ecstasy! Could you imagine? All us pissants would have to find something to do other than bitch all day.

Comment by Elanor
2011-12-30 15:13:38

“It’ll happen. But not until those born before 1955 are dead and buried”

There are plenty of banksters, lobbyists and career politicians who were born after 1955. They will fight to retain their lofty positions in the winner-take-all society. Gotta get them out of the way, too, before Poser’s hoped-for American Spring can occur. This could take a couple of generations.

Comment by ahansen
2011-12-30 21:27:53

Appreciate your comments, Poser, and even more so, your optimism. Just for the record, there are quite a few of us born pre-1955 who not only share your sentiments, but have devoted our lives to instituting them. All I can say is, good luck, and try to stay focused. You are not alone.

You’re allowed to become cynical; the trick is not becoming bitter in the process.

Pax :-)

Comment by aNYCdj
2011-12-30 07:52:48

Well you know my #1 is to force ALL Americans to read write and speak English.

No more acceptance of ghetto Ebonics, eliminate bi-lingual education.Base the deportation of illegals on their lack of English skills. Take away all excerise rooms in jail and replace them with computers, want out early read the NYtimes in front of a parole board.

Want welfare and FS??? same deal sit in classes 25 hours a week and learn English…then get some job training,English must be declared our national language. Put Americans back to work.

#2 legalize the possession of drugs and still make it a felony to sell any…the mehikan drug cartels will get might angry, so put them in the fema camps…… also pardon those in jail for simple possession so they can get on with their lives. ( and open up slots for real criminals)

#3 Then the usual stuff allow companies to repatriate all overseas earning tax free if they spend it in America on Americans…make countries pay for our military bases or close them down. And make it EASY to fire government workers…with 15% unemployment there is no excuse to keep people on the public payroll that are not good at their job.

How’s that?

Comment by aNYCdj
2011-12-30 15:41:08

Yeah stop calling me names…..English First!!

France makes it harder to become French

France will be making it harder for foreigners to seek French citizenship as of January. Critics say the new requirements, which include tough language tests and allegiance to “French values”, are an electoral ploy that panders to the far right.

Foreigners seeking French nationality face tougher requirements as of January 1, when new rules drawn up by Interior Minister Claude Guéant come into force.

Candidates will be tested on French culture and history, and will have to prove their French language skills are equivalent to those of a 15-year-old mother tongue speaker. They will also be required to sign a new charter establishing their rights and responsibilities.

Comment by Muggy
2011-12-30 15:58:39

“eliminate bi-lingual education”

I know you don’t like it, but at least understand it (equal protection, 14th amendment):

Comment by ahansen
2011-12-30 21:53:06

“…How’s that?”

Um, unreadable?

Your harping on other people’s lousy command of the English language is like listening to realtors whine about clients who lie.

Comment by aNYCdj
2011-12-30 22:24:56

Remember I worked in Tv stations for a long time, and everything is sound bites, so I write like that, short snippets and right to the point.

If I worked at NPR or PBS it would have been a very different writing style.

Muggy……I would limit interpreters at Immigration hearings, if you are serious about becoming an US citizen why do you need an interpreter to speak for you, if you are here a few years?

What I don’t like is the kids get the English education and the parents are not forced to do the same at night school. So the plan is you want government bennies , then you learn English.

Now if you committed a crime that’s different, you need to know exactly what the charges and to prepare a defense.

France is providing the right direction we should take as Americans

The court majority found that the Texas law was “directed against children, and impose[d] its discriminatory burden on the basis of a legal characteristic over which children can have little control” — namely, the fact of their having been brought illegally into the United States by their parents.

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Comment by Muggy
2011-12-31 05:35:49

DJ, I like people that are different, and multiculturalism, and I like that people from all over the world want to live here. I welcome them. All of them. Black people. Gay people. People that don’t speak English. Gay, black people that don’t speak English.

My life is enriched by people that are different than me, not the same.

We’ll have to agree to disagree.

Comment by Muggy
2011-12-31 06:54:55

And yes, I’m channeling SPike Lee there (Get on the Bus).

Comment by aNYCdj
2011-12-31 14:21:56

Cool man…actually we don’t disagree much….people who come over legally embrace America and learn English quickly..

But people on this board complain about anchor babies, the Illegals, driving uninsured ,and then paying of their cost by taking away from Americans, millions who are too rich for welfare and too poor to afford their own health insurance.

Its just France is doing the right thing, and we should embrace it. It would solve lots of problems become an american or go back home.

Why shouldn’t our people come first?

Comment by Ben Jones
2011-12-30 05:42:55

We’ll do some end of the year predictions this weekend, BTW. Early calls here!

Comment by goon squad
2011-12-30 06:35:12

If 2011 was Occupy then 2012 will be long hot summer

Comment by Robin
2011-12-30 21:22:38

Goon Squad backwards is Dauqs Noog! So there!!

Comment by Muggy
2011-12-30 06:51:41

- I predict OWS will regain momentum, hone in on a few major points, and possible field a leader.

- Economy will remain in “suspended animation.”

- I will not buy a house.

- Protests begin in more benign locations like flyover, BFE, X-GSVille, etc.

- Gov. Scott will continue to ruin Florida.

Comment by WT Economist
2011-12-30 07:52:37

That has to be the topic — predictions.

I predict a decent year for the economy, despite a continued slow decline of housing prices. Obama gets re-elected as a result. The sub-3.0% GDP growth, falling income relative to inflation (except for the rich and retired public employees), and small employment gains will become par for the course, but people will get used to it.

I don’t think the long term problems have been solved. These include an excess of consumption in the U.S., an increasingly unequal distribution of income here, and the reliance of producers across the world on U.S. workers who no longer have money or the ability to borrow. An aging population that didn’t save. And a poorer younger population which cannot pay as much for houses and other assets as those coming before. These problems will take decades to overcome as the country gradually de-leverages, asset prices fall, and Generation Greed passes on.

In the short run, however, the housing bubble and bust has done most of the economic damage it is going to do. Construction can only go up from rock bottom levels, generally in smaller units in locations that provide short commutes, and no one is borrowing against homes to finance short term consumption anymore.

The heart attack is over, and unless the Republicans in Congress or the Europeans succeed in taking the economy, it won’t recur. The cancer continues.

Comment by Cantankerous Intellectual Bomb Thrower©
2011-12-30 08:17:53

Here’s one bold bottom call prediction (not mine :-) )

I see no mention in the description of the analysts’ equilibrium model of the 5m+ (or so) homes in shadow inventory (including vacant homes, foreclosure homes, and homes with payments 3 months or more in arrears), which leads me to suspect their conclusions will prove overly optimistic.

The Wall Street Journal
December 5, 2011, 5:23 PM ET

Goldman: Housing Market Bottom Is Really, Finally (Almost) Here
By Alan Zibel

It’s the question that everybody wants to know, but no one seems to be able to answer: When will home prices finally hit bottom?

Analysts at Goldman Sachs predict in a new report (published late Friday) that the end of the crash in home values is actually within view.

Goldman’s analysts, Hui Shan and Sven Jari Stehn, project that the national S&P/Case-Shiller home price index has 2.5% to fall before it hits bottom next summer. The Case-Shiller index of prices in 20 large cities is likely to fall 3.5% before hitting bottom in the second half of 2012, they say.

How do these forecasters reach this conclusion? Well, that’s where things get complicated.

The analysts constructed a new model of home prices in 147 U.S. metro areas, estimating an “equilibrium” home price for each. That measurement is an expected home price based on population, income, lending costs and construction costs. Nationally, they say, home prices are close to this equilibrium level after deviating far from it during the boom years.

The analysts’ modeling also takes into account short-term price changes, including factors like the excess supply of homes on the market and the level of subprime loans in a particular market.

After doing all of this number-crunching, the Goldman analysts projected that the strongest U.S. markets will be Detroit, Miami and Cleveland. They are forecast to show price increases of 5%, 3% and 1% over the next two years.


Goldman’s analysts are still bearish on several cities, which they see as overvalued. Prices in Portland, Ore., they say, should decline by 8% over the next two years. The report also forecasts price declines of at least 6% for New York and Atlanta.

Comment by CarrieAnn
2011-12-30 09:19:34

There is still so much money sloshing around this state. Every time I turn around there is some announcement that Lockheed has won another contract or such and so has won a grant. These grant announcements seem to be made quite regularly w/higher education and medical being (I think) the usual beneficiaries. I have to say I am really surprised because I thought the stimulus money was supposed to be drying up right about now. I’d really like to follow the money back to it’s sources and also do a little digging as to who specifically is benefitting. Somehow I don’t expect to find out it’s the average Joe on the street.

The Lockheed contracts have been particularly interesting. I don’t want those people to lose jobs, believe me. It’s just there’s a sense of disconnect when you hear the government is broke and then every few months you hear of a new contract being awarded.

Aren’t the federal and state governments supposed to be out of money? Where is all this funding coming from?

Comment by SV guy
2011-12-30 10:24:53

“It’s just there’s a sense of disconnect when you hear the government is broke and then every few months you hear of a new contract being awarded.”

It’s only broke when it comes to our benefits. Remember there is an infinite supply of currency available to them. The variable being confidence in the Fiat.

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Comment by Posers
2011-12-30 10:40:30

This occurred to me once again as I was reading about sfrenter’s landlord having to cough up $10,000 (or some such outrageous amount) to replace sidewalks in front of the house.

Whatever happened to “shovel-ready” jobs being paid for by TARP? Why is the landlord coughing up $10K and why is sfrenter’s rent increasing by $300/month?

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Comment by polly
2011-12-30 12:02:18

sf renter’s rent is going up because the landlord had an impetus to check out what the market rate rent was and decided to match it.

The sidewalk isn’t being fixed by stimulus money for a lot of reasons.

a) The shovel ready projects are ones that were shovel ready back when the awards were being made and sidewalk repair that is needed now isn’t part of it.

b) Money that is to be awarded to cities and states doesn’t go for projects that the city rules already declare have to be paid for by private citizens in their capacity as property owners. That isn’t something the city budget was ever going to have to pay for so why would they even apply for a grant for it.

Comment by Posers
2011-12-30 13:34:17

I want a list of every shovel-ready project that has been completed since TARP. I want to know precisely where, how much was spent on materials, how many employed, salaries and time frames. I also want to read the conclusions of each and every environmental impact studies conducted for each project.

Since you apparently are a federal employee, you should be willing to supply that information - or post a link where it can be found.

Got such a list or link? Good. Provide it, please. You’re MY employee since I pay you, and as such, I’d like some accountability.

Now, relative to Point B, my response is…why the hell not? Just because?

Typical Washingtonian bureaucratic thinking.

Has this line of thought yet permeated the Goldman Sachs crowd now sprinkled throughout the Cabinet?

Comment by polly
2011-12-30 14:10:56

The awards are given to the states or cities or towns or whatever. Why would they ask for money that isn’t going to come out of their budget? Seriously. Why would they even ask for it? Why would they take even 2 hours of employee time to ask the government to pay for a project that they aren’t going to pay for? Those employees have other things to do. Like figure out if sidewalks that are not the responsibility of homeowners need to be fixed and ask for money to fix those.

As for your first question, the TARP (troubled asset relief program) had nothing to do with shovel ready infrastructure projects. Zippo. I assume you mean the stimulus spending. I’ll look to see if it has been put together somewhere. You do know that not all federal employees know the details of the job of all other federal employees, right? You wouldn’t demand a National Park ranger provide you with that information, would you?

A lot of the money went into tax cuts.

Comment by polly
2011-12-30 14:22:12

Here is one site that seems to have a somewhat useful search function. I can’t vouch for its accuracy as it isn’t a group I am familiar with.

And here is a government site:

There is even a place to report waste and fraud down at the bottom of the page.

If you want to look for yourself, I suggest searching on “American Reinvestment and Recovery Act (ARRA)” or something similar.

Comment by Posers
2011-12-30 15:18:58

Thank you very much, both for the correction (stimulus versus TARP - yeah, I knew that but botched it anyway) and the links. Not sure they provide the type of accountability taxpayers deserve, but it’s a start. I’ll look into ARRA, too.

If I find something worthwhile, I’ll mention it here.

You’re a rare bird, polly. Thanks again.

Comment by Muggy
2011-12-30 15:51:49

“I want to know precisely where, how much was spent on materials, how many employed, salaries and time frames. I also want to read the conclusions of each and every environmental impact studies conducted for each project.”

You know what’s crazy (and I’m not referring to Polly)? A LOT of projects cannot provide this simple level of detail, which is precisely why I keep it on my projects. I can’t believe, both as a taxpayer and public employee, that anything beyond $100 in an envelope with a secretary, can be considered petty cash.

I was asked to provide demography on one project to a superior office. They were surprised when I gave them every angle on every project.

In this climate, why would anyone do less?

Comment by Cantankerous Intellectual Bomb Thrower©
2011-12-30 08:24:18

How is the U.S. stock market shaping up for next year? Mr Market seems to want a sell off for the 2011 finale, but I suspect the Plunge Protection Team will throw in some year-end window dressing to provide for a photo finish at the flat line.

2011 may end with whimper
Stock-fund, ETF investors look for a better 2012

The first year after the “lost decade” for U.S. stocks was also lost. And there’s wariness that 2012, while ultimately positive for the overall market, will create more investment obstacles.

Amid sovereign-debt turmoil, trading suggests the shared currency may already be discounting a 2012 recession, while the dollar’s on track to outpace 2010’s 1.5% gain.

U.S. stocks begin the final trading session of the year mildly lower, with Europe’s troubles in view.

Nasdaq Composite on track to end 2011 in red

Comment by Cantankerous Intellectual Bomb Thrower©
2011-12-30 23:34:18

All three headline US stock market indexes ended the year with a brutal last-hour selloff.

Booyah for a bullish 2012!!!!

Comment by cactus
2011-12-30 19:04:39

The economy will continue to divide Americans into two classes
1) Americans with money and or good jobs
2) Americans with crummy jobs or no jobs and no future

Home prices will go up in areas aligning with No1 above and continue down in the No 2 areas

wild card government debt how long can it continue without problems ?

Comment by bill in Phoenix and Tampa
2011-12-30 21:13:22

I predict a ten to twenty percent gain on the S&P 500 index in 2012 and Obama will be re-elected. I predict a surprising boost in tax revenues at federal and local levels for the 2011 tax year.

Comment by aNYCdj
2011-12-30 22:39:54

Oh great and at the same time people will steal thousands of pounds of copper from highway lights and increase exponentially the death and maiming in car accidents…let alone we finally get serious of bulldozing 100,000 moldly rat & roach infested houses in floorRiddah…

And yes wonders apon wonders…Detroit turns into Green Acres, the crime rate drops 90% and money flows there like 100 years ago…

Comment by Jess from upstate SC
2011-12-30 07:09:32

Orlando Fl. is swamped with tourists … Most major theme parks there had to restrict entrance yesterday because of overcrowding .The Atlanta fish and aquarium place was totally swamped with people ,too ..Now , if they all bought a house in Florida , that might help … Who on earth would want to go to an amusement attraction on a holiday like this, anyways ?.

Comment by CarrieAnn
2011-12-30 08:14:01

Wish we could have a graph of what these trips were being financed with?

Squatter dollars, credit, downsized housing situation/released home equity, market related gains, bonus dollars or other job related income?

Comment by ahansen
2011-12-30 22:17:30

Never underestimate what doting elders will spend on their infrequently-seen grandchildren. (And how desperate visiting adult children are to get out of the house after being crammed in with out-of-town siblings and their boisterous families for a few days.)

My guess is that this is a once-in-a-lifetime reunion trip for many of the people you see there. Whether or not this is a wise use of limited funds is another question altogether.

Comment by Cantankerous Intellectual Bomb Thrower©
2011-12-30 07:27:07

Would not a bailout by any other name smell as foul?

DECEMBER 28, 2011

The Federal Reserve’s Covert Bailout of Europe

When is a loan between central banks not a loan? When it is a dollars-for-euros currency swap.

America’s central bank, the Federal Reserve, is engaged in a bailout of European banks. Surprisingly, its operation is largely unnoticed here.

The Fed is using what is termed a “temporary U.S. dollar liquidity swap arrangement” with the European Central Bank (ECB). There are similar arrangements with the central banks of Canada, England, Switzerland and Japan. Simply put, the Fed trades or “swaps” dollars for euros. The Fed is compensated by payment of an interest rate (currently 50 basis points, or one-half of 1%) above the overnight index swap rate. The ECB, which guarantees to return the dollars at an exchange rate fixed at the time the original swap is made, then lends the dollars to European banks of its choosing.

Why are the Fed and the ECB doing this? The Fed could, after all, lend directly to U.S. branches of foreign banks. It did a great deal of lending to foreign banks under various special credit facilities in the aftermath of Lehman’s collapse in the fall of 2008. Or, the ECB could lend euros to banks and they could purchase dollars in foreign-exchange markets. The world is, after all, awash in dollars.

The two central banks are engaging in this roundabout procedure because each needs a fig leaf. The Fed was embarrassed by the revelations of its prior largess with foreign banks. It does not want the debt of foreign banks on its books. A currency swap with the ECB is not technically a loan.

The ECB is entangled in an even bigger legal and political mess. What the heads of many European governments want is for the ECB to bail them out. The central bank and some European governments say that it cannot constitutionally do that. The ECB would also prefer not to create boatloads of new euros, since it wants to keep its reputation as an inflation-fighter intact. To mitigate its euro lending, it borrows dollars to lend them to its banks. That keeps the supply of new euros down. This lending replaces dollar funding from U.S. banks and money-market institutions that are curtailing their lending to European banks—which need the dollars to finance trade, among other activities. Meanwhile, European governments pressure the banks to purchase still more sovereign debt.

Mr. O’Driscoll, a senior fellow at the Cato Institute, was vice president at the Federal Reserve Bank of Dallas and later at Citigroup.

Comment by combotechie
2011-12-30 08:41:21

“The world is, after all, awash in dollars.”

Lol. This guy should write stand-up.

California sure could use about, say, twenty-billion of these dollar thingies right about now. Luckily for California the world is awash in them.

Comment by Blue Skye
2011-12-30 17:12:20

Phase IV: The Fed starts buying up State Government bonds, providing unlimited liquidity for states at 2% interest rates below inflation.

Comment by Cantankerous Intellectual Bomb Thrower©
2011-12-30 07:31:55

Since the redevelopment route to providing affordable housing in San Diego is blocked, is there any chance the PTB will consider stepping up pressure on Megabank, Inc to accelerate shadow inventory release?

Editorials »
Redevelopment ruling will slow affordable housing construction
By Susan Riggs Tinsky
midnight, Dec. 30, 2011

No one can argue that San Diego is a highly desirable place to visit. San Diego has for many decades capitalized on its optimal weather and picturesque landscape to foster a healthy local tourism and hospitality sector. Our natural assets make our region the envy of tourism thirsty cities throughout the country.

For many of the same reasons that San Diego has become a desirable vacation and convention destination, San Diego is also a wonderful place to call home. Thousands of hospitality and tourism industry employees live here. Unfortunately, these workers, as well as thousands of other San Diegans, struggle each day to afford the region’s high housing costs.

According to a study released earlier this month by the Center for Housing Policy, a national research organization, a household in San Diego County will need to earn almost $46,000 annually to afford a one-bedroom apartment, and $56,000 annually for a two-bedroom unit. That’s a large sum when the household is comprised of one or two people working at or near minimum wage. This may explain why 83,000 families in San Diego County are currently on waiting lists for safe and affordable housing.

This situation may be made even worse in light of the California Supreme Court’s ruling this week to abolish redevelopment agencies in San Diego and across the state. The Supreme Court’s decision will dramatically slow the construction of new affordable housing in San Diego County. The development of almost 2,000 units of affordable housing in the region is now on hold, in projects stretching from National City to Oceanside. It is unclear if, or when, these affordable homes will ever be completed.

Comment by polly
2011-12-30 09:01:58

How is this a weekend topic suggestion? Would you please post it in the right place? It isn’t that hard to remember that there are two topics posted without a big preceding post on Fridays.

Comment by Cantankerous Intellectual Bomb Thrower©
2011-12-30 23:38:28

Are you taking over as moderator of the blog? If so, I humbly apologize.

Comment by cactus
2011-12-30 19:07:43

This may explain why 83,000 families in San Diego County are currently on waiting lists for safe and affordable housing.”

how long before bribes to the right people get you into affordable housing ? Or is it already the way its done?

Comment by Cantankerous Intellectual Bomb Thrower©
2011-12-30 07:46:49

Aside from the prospect of dueling recessions in the eurozone and China, how is the economic outlook shaping up for 2012?

And when these recessions are officially announced, will the myopic officials in question claim that “Nobody could have seen it coming?”

P.S. Futures aside, as I post this article, the DJIA, NASDAQ and S&P 500 are all going down for their year-end finales. A little plunge protection, please?

Dec. 30, 2011, 9:33 a.m. EST
U.S. stock futures flat before 2011 finale
S&P 500 marginally in positive territory for year to date
By William L. Watts, MarketWatch

NEW YORK (MarketWatch) — U.S. stock futures lost limited gains Friday after Spain’s new government unveiled austerity measures and said it expects a 2011 budget gap of almost 8%.

Futures for the Dow Jones Industrial Average (DJ2H +0.06%) fell 5 points to 1,212.

Those for the S&P 500 (SP2H +0.02%) retained a half-point gain at 1,257.90. Futures for the Nasdaq 100 (ND2H +0.11%) were down 1.5 point at 2,275.75.

U.S. stock-index futures had posted small gains after German Finance Minister Wolfgang Schaeuble reportedly ruled out a breakup of the euro region.

“I think that in the next 12 months we will have avoided the danger of contagion and will have stabilized the euro zone,” Schaeuble told Germany’s Handelsblatt newspaper.

HSBC’s China purchasing managers index for December fell to 48.7 from an earlier estimate of 49.0. A reading of less than 50 indicates that activity in the manufacturing sector contracted. Read more: China manufacturing cools further, survey shows.

European equities traded on either side of unchanged in thin but choppy dealings. The pan-European Stoxx Europe 600 index (XX:SXXP +0.57%) traded slightly higher but remained on track for a yearly loss of around 12%. Read Europe Markets.

Japanese and Chinese markets ended higher in light trading Friday, with investors taking a cue from the previous day’s U.S. market gains. Read Asia Markets.

Volume has been low across global equity markets in holiday-thinned trading this week. On Thursday, just 352 million shares changed hands on the New York Stock Exchange as stocks gained on Wall Street.

Comment by Cantankerous Intellectual Bomb Thrower©
2011-12-30 07:57:37

FedCake recently stopped posting at MW dot com, due to their lack of appreciation for her bearish insights. Luckily, other MW commentators, who apparently not only passed their college Econ 01 courses, but actually grasped how the lessons apply to the real world, have stepped in to fill the void.

The Week in Charts Archives
Dec. 29, 2011, 4:01 p.m. EST
Charting how home prices are moved by rates, city
Graphics showing data released over the week

Mortgage rates and house prices

All things equal, lower mortgage rates should spur increased demand for houses, whether that shows up in prices or in transactions. That formula held through the beginning part of the last decade — mortgage rates fell, and house prices boomed. After the housing market bubble burst, however, mortgage rates have dropped and yet prices have as well. This could be for several reasons, including tougher lending standards, which make it more difficult to get financing in the first place.

See story on mortgage rates.

TrayfMeat 10 hours ago
>>>> “Mortgage rates and house prices ”

A family can afford X dollars each month for a mortgage payment which is composed of equity and interest. If interest rates are pushed down, then house prices will move up to keep the mortgage payment the same, and vice versa.

If a family can no longer afford X dollars each month for a mortgage payment, then both interest rates and house prices will fall. The U.S. situation since early 2006.

With current extremely low mortgage interest rates, it’s obvious that falling house prices indicate a falling ability of families to afford current house prices, and/or an inability to come up a minimal down payment.

Bottom line : House prices will continue to fall with the decreasing number of families with the necessary income to buy the existing homes on the market at the current prices.

Doh! What part of this doesn’t MW get?

Comment by Realtors Are Liars®
2011-12-30 09:53:48

Trayofmeat is a brother in the ReaItor Lie Assassination Team.

Comment by Sammy Schadenfreude
2011-12-30 08:46:20

I’m astonished that this actually got printed, and from a Newsweek columnist no less.

Over the next year, I expect the “what” will give way to the “how” in the broad electorate’s comprehension of the financial situation. The 99 percent must learn to differentiate the bloodsuckers and rent-extractors from those in the 1 percent who make the world a better, more just place to live. Once people realize how Wall Street made its pile, understand how financiers get rich, what it is that they actually do, the time will become ripe for someone to gather the spreading ripples of anger and perplexity into a focused tsunami of retribution. To make the bastards pay, properly, for the grief and woe they have caused. Perhaps not to the extent proposed by H. L. Mencken, who wrote that when a bank fails, the first order of business should be to hang its board of directors, but in a manner in which the pain is proportionate to the collateral damage. Possibly an excess-profits tax retroactive to 2007, or some form of “Tobin tax” on transactions, or a wealth tax. The era of money for nothing will be over.

But it won’t just end with taxes. When the great day comes, Wall Street will pray for another Pecora, because compared with the rough beast now beginning to strain at the leash, Pecora will look like Phil Gramm. Humiliation and ridicule, even financial penalties, will be the least of the Street’s tribulations. There will be prosecutions and show trials. There will be violence, mark my words. Houses burnt, property defaced. I just hope that this time the mob targets the right people in Wall Street and in Washington. (How does a right-thinking Christian go about asking Santa for Mitch McConnell’s head under the Christmas tree?) There will be kleptocrats who threaten to take themselves elsewhere if their demands on jurisdictions and tax breaks aren’t met, and I say let ‘em go!

At the end of the day, the convulsion to come won’t really be about Wall Street’s derivatives malefactions, or its subprime fun and games, or rogue trading, or the folly of banks. It will be about this society’s final opportunity to rip away the paralyzing shackles of corruption or else dwell forever in a neofeudal social order. You might say that 1384 has replaced 1984 as our worst-case scenario. I have lived what now, at 75, is starting to feel like a long life. If anyone asks me what has been the great American story of my lifetime, I have a ready answer. It is the corruption, money-based, that has settled like some all-enveloping excremental mist on the landscape of our hopes, that has permeated every nook of any institution or being that has real influence on the way we live now. Sixty years ago, if you had asked me, on the basis of all that I had been taught, whether I thought this condition of general rot was possible in this country, I would have told you that you were nuts. And I would have been very wrong. What has happened in this country has made a lie of my boyhood.

Comment by goon squad
2011-12-30 09:04:38

“all-enveloping excremental mist”

Maybe mix some mustard gas with that and spray the New York Stock Exchange with it…

Comment by Realtors Are Liars®
2011-12-30 10:12:46


Comment by Prime_Is_Contained
2011-12-30 10:14:04

OWS morphs into “Fumigate Wall Street!”

Love it.

Comment by CarrieAnn
2011-12-30 09:39:21

So all those people in Orlando this week, whose numbers are so great the parks have to enforce their post capacity turnaways? They’re gonna be turning on the wealthy? Or the nimrods NY consumers that made sure that despite crappy appliances and high pressure sales tactics or filthy stores, Sears didn’t have to close even one KMart or Sears in NY state? They’re gonna ask for someone’s head?

Yeah, there are people that are angry out there. But anonymous blog postings do not equal marching in the streets. What will tip them over the edge? What will make them feel that they have nothing left to lose?

What has happened in this country has made a lie of my boyhood.

I realized this a long time ago when I first started reading the blog. (2004/5?) But everyone around me is clinging to the indoctrination for dear life. You talk to people. They can recite back the news. They understand the bubble. They understand their rights being undermined. They don’t put it all together. I just think they can’t break w/the pretty picture of what they thought America was. Nor do I think they have it in them to make a difference in where we go. Learned helplessness is a powerful force.

Comment by goon squad
2011-12-30 10:30:05

What will tip them over the edge? What will make them feel that they have nothing left to lose?

It won’t look like a revolution, but rather a continued erosion toward barbarity and random violence.

As examples, the social-media flash mob robberies, assaults, and lootings that happened all over the country this year (but that corporate media refuses to report). Expect more of this. And it won’t be the 1% who are affected, it will be the working poor and middle class.

The Victor Davis Hanson article posted in a few recent bits threads is another good example. The Aspen/Hamptons set are largely immune from this. The long hot summer (or decade of long hot summers) won’t be as dramatic as Detroit burning to the ground, but rather will be an increasing number of unrelated violent incidents around the country.

Comment by X-GSfixr
2011-12-30 11:13:18

Big increase in the deaths of law enforcement officers this year.

Locally, home invasions were unheard of 5 years ago. They are now a weekly occurence.

My car has been broken into, and my tools stolen, three times in the past 18 months.

-Father of three is murdered in a local liquor story on Christmas Eve. All on high quality video. Guy hits the clerk in the head with a crowbar, goes out to the car, comes back in with a gun, places the muzzle under the guy’s chin, and pulls the trigger. In November, both of the clerks at the convenience store next door were shot during a robbery.

Guy that killed the liquor store clerk was (according to the video) a 20 something white kid. Guy that shot the convenience store clerks was black. Neither have been arrested yet. Yeah, we have a lot of diversity around here.

Last week, while filling my car, guy just strolls out of the Quikie Mart with a 6-pack. Clerk comes out the door and yells “Are you coming back to pay for that???” Guy just keeps walking. Clerk later tells me that the cops won’t even show up unless the guy used a gun.

-Speed traps and frivolous ticket writing are way up. Gotta generate that revenue to keep the rest of the system running. And if you catch somebody with a little weed in the car, you can really generate some revenue.

We may not get Somalia-bad (unless Ron Paul is elected), but we are heading toward Nigeria-Bad…….if you can afford to pay for (or the tax base will support) your own private Waffen SS, and give then the green light to harass/beat down anyone who isn’t living in your nabe, things will be fine.

As far as my situation, looks like I need to start applying for hazardous duty pay.

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Comment by aNYCdj
2011-12-30 15:32:27

Finally high quailty video…..time to stop using that 8 hour VHS in 72 hour mode with grainy fuzzy streaky B/W “pictures”

-Father of three is murdered in a local liquor story on Christmas Eve. All on high quality video

Comment by cactus
2011-12-30 19:11:02

-Speed traps and frivolous ticket writing are way up. Gotta generate that revenue to keep the rest of the system running. And if you catch somebody with a little weed in the car, you can really generate some revenue.”

yep too bad

Comment by Realtors Are Liars®
2011-12-30 11:10:53


They’ve got the bottom 99% divided right down the middle. You got the blue haired SS collecting welfare cases sitting in front of Cable News 16 hrs a day while the other half slaves their 16hrs. Although the political dividing line is more jagged, it divides those same two groups. SS Welfare crowd isn’t going to lift a finger to advance the cause unless they detect even a hint of SS cuts. Thus, SS must be cut to get them on board. And then re instituted after. The GOP needs free reign and forced to step up to their lame rhetoric and wack the $hit out of SS. If not, this static, statist environment run by established (moneyed) power structures will continue indefinitely. Division is their tool.

Comment by Blue Skye
2011-12-30 17:25:55

Except for the exceptions Realtors. A very small minority, if motivated and focused, can shift events. It’s always a small minority that do so. Not every greybeard watches TV.

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Comment by Muggy
2011-12-30 18:02:14

I have to admit that when I first started posting here I thought the only drama would occur at the courthouse steps on auction day.

That we’re this early in innings and having disruptions is an interesting sign. Who knew ‘For Sale’ signs would get us to where we are (I know, some of you predicted this, but I did not foresee it heading where we’re heading).

Comment by Cantankerous Intellectual Bomb Thrower©
2011-12-30 23:40:15

“…the time will become ripe for someone to gather the spreading ripples of anger and perplexity into a focused tsunami of retribution. To make the bastards pay, properly, for the grief and woe they have caused. Perhaps not to the extent proposed by H. L. Mencken, who wrote that when a bank fails, the first order of business should be to hang its board of directors, but in a manner in which the pain is proportionate to the collateral damage.”


And Mencken had it about right…

Comment by Diogenes (Tampa, Fl)
2011-12-30 11:26:08

Here’s a short topic: The effect of ILLEGAL ALIEN construction during the “housing boom” and into the current housing stock.

During my housing search, I found lots of substandard and terrible construction “fixes” and “additions” to many houses. I didn’t touch them.
The one I did buy had an addition that was showing signs of settlement.
I decided I could fix it and the rest of the basic house was okay. It turns out the reason for the settlement is that the addition was made by using a wood “foundation” on the ground. This is in Florida.

We require CONCRETE foundations, due to termites and ROT. The “foundation” is showing signs of both. I expect it to take a month to complete repairs because I need to remove sections of the existing floor to “CUT OUT” the existing foundation boards, jack up the floor joists and resupport the floor and walls with BLOCKs and Concrete bases. It’s a big job, but I can fix it in time.

I have seen many substandard construction jobs here. Just yesterday, I looked at a house my brother was considering buying. I was a disaster from one end to the other, starting with the wood subfloor under the tile, and continuing to multiple “additions” to provide more floor space for 4 Mexican families. This is typical in the Tampa area. Lots of “unpermitted” room additions.
Illegal aliens get a foot hold in the areas they migrate by having “friends” provide a place to stay. Over time they expand it. Many work in construction, or did, so they have some knowledge of how to nail boards onto the framing and screw on some sheathing. They don’t know what they are doing structurally, and the electric and plumbing is a patchwork.
The house I looked at yesterday was a prime example. The bank is trying to get 50 grand. It looks good from the street. That about all.
The “roofing” additions weren’t properly flashed and the joined roof lines don’t match, or provide proper drainage. The joint leak and the solution is to “goop” them so they don’t. Until they do again.
I have seem MANY houses with this patchwork construction done.
My parents have 3 families living across the street and 2 next door.
These were and have always been “SINGLE FAMILY RESIDENCES”. They get around this by sneaking in additional bath/kitchen areas. This is happening in MANY communities.
It’s a cheap rental arrangement that is a detriment to the neighborhood.
You can always tell because their are 5 or 6 cars parked in the yard in the evening.
Welcome to the new America. Laws and Regulations don’t matter. Legal residency no longer required. Just move in, and do what you want.
It really is the land of the “Free” , so long as you are not on the tax rolls.

Comment by Muggy
2011-12-30 13:18:05

So you honestly believe only Mexicans were doing this?

Comment by Awaiting
2011-12-30 19:49:02

We bought a two new construction homes, one in 1983 one in 1998. (So Ca)

1983 home was built by trained Americans. 3 minor issues fixed immediately.

1998 all Spanish speaking worker bees and 18 months of hell with the developer. An Attorney got all our houses fixed. Love ya Muggy, but I lived it.

The trades are a skill, not a Taco Bell job.

Regarding the overcrowding laws, many cities gave into them, and as long as nobody sleeps in the bathroom(s) or kitchen (fire regulations), sardines welcomed. Above us in a 2+2 lived 9 people. I recall counting 12 at times. 24/7 noise with sleeping and job shifts. Oh joy!

Comment by Diogenes (Tampa, Fl)
2011-12-30 19:57:32

I have seen who resided in these places, and I was wrong about mine. I found out it was Guatamalan fruit pickers, according to a neighbor.
And no, they are not the only ones, but a sure give away is the use of TILE, everywhere. The structural work stinks, but they will put in tile floors everywhere, including the porches and entry areas. They do it every time. Just look around.

Comment by Blue Skye
2011-12-30 18:00:31

2012? The logical consequence of what we’ve been through for the past few decades is pretty simple. It just isn’t happening quickly. 2012 will probably show us mixed signals, like 2011 has. It is probably more useful to think about where we will be in a decade, and how to position for that.

I for one am thankful that there has been plenty of time to get ready for a sea change.

Comment by cactus
2011-12-30 19:12:13

weekend topic can anyone afford to retire these days ?

or is it work until you can’t anymore ?

Comment by Awaiting
2011-12-30 20:01:29

google map street view 2065 Medina in Simi (1,806 sq ft) and check out the house to the left. That monstrosity is 4,500+ sq ft. It belongs in WR, not there. Holy Moly.

Retire? Those that set up income streams will be doing better than the rest. Think Capital Gains, not 1099’s or W-2’s for income in your later years.

Comment by Cantankerous Intellectual Bomb Thrower©
2011-12-30 23:41:56

Yes and yes.

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