The Housing Bubble

Late night reading of yesterday’s thread on the NH elections inspires this:

The Republican primaries are nothing but a sham for benefit of the network television industry. The number of actual voters participating in the process is so minuscule as to be irrelevant; certainly it’s not representative of the Republican electorate nationwide. Seven votes in Iowa constitutes a “victory?” New Hampshire has what, point three percent of the national electorate? And now comes the “day of reckoning” in South Carolina where Stephen Colbert is polling ahead of Jon Huntsman? Puhleeze.

Romney was anointed about the same time the Palin Family went full reality show, and everyone in a position to throw the election knows it. Ron Paul could pull a 70% share in SC and Romney would STILL get the nomination. Our voices have been out-purchased, out-shouted, and outsourced to our corporate masters.

The extreme dissatisfaction we’re seeing here on the street, in the Paul splinter campaign, in the alternative media, is the nascent movement toward weighted elections and the dissolution of the two party electoral college system.

Occupy the Tea Party isn’t just a mindless slogan; if the electorate can get beyond the issues and address the structural inequalities codified in the “Citizens United” decision, we can take our votes back. Concentrate your efforts on your Congressional elections. That’s where strategy will be critical in November.

Here’s an editorial sent to me by my ex-BIL, a veteran newsman who is wisely covering this primary season from the comfort of his lovely DC apartment.
“…As Jon Huntsman wound down his New Hampshire campaign with a stop Monday at Crosby Bakery in Nashua, he was trailed by about 150 journalists. Total number of New Hampshire voters: Perhaps a dozen….”

http://www.washingtonpost.com/opinions/journalists-campaign-trail-secrets-revealed/2012/01/10/gIQAW96MpP_story.html

Comment by combotechie
2012-01-11 06:39:32

And if the term “deadbeat” is redefined as something more acceptable then the money that is owed-but-not paid can be redefined to something more acceptable and maybe will not have to be written down on the books.

Comment by Neuromance
2012-01-11 18:47:13

“When I use a word,” Humpty Dumpty said, in rather a scornful tone, “it means just what I choose it to mean—neither more nor less.” — Alice In Wonderland

Why is a Deadbeat like a writing desk?

Foreclosure wait time drags to 806 days in Florida

By Kimberly Miller Palm Beach Post Staff Writer
Posted: 12:32 a.m. Thursday, Jan. 12, 2012

A foreclosure filed today in Florida will linger in the courts until March 28, 2014, before the bank takes possession, a timeline that has increased 40 percent in the past year.

RealtyTrac analysts, who released new foreclosure data today in a 2011 year-end report, blame the increase in time from initial filing to bank takeover on the robo-signing scandal that pushed lenders to review and redo paperwork in thousands of cases.

At 806 days, Florida ranks third nationally for the average length of time it takes to foreclose on a home, trailing only New York (1,019 days) and New Jersey (954 days). The national average is 348 days.

Another 34,819 foreclosure cases are pending in Palm Beach County courts, according to the clerk of courts office. Statewide, there’s an estimated backlog of more than 260,815 cases.

Jack McCabe, chief executive of McCabe Research & Consulting in Deerfield Beach, said he’s spoken to homeowners who have had tens of thousands of dollars trimmed off their home loan debt by lenders - an unthinkable strategy until recently.

“They seem to be doing principal reductions privately, secretly and discreetly, and don’t want to publicize it as a national policy,” he said.

Lender willingness to look at other options is also part of why RealtyTrac predicts there will be no more massive foreclosure waves, although filings will pick up through 2012 as banks recover from paperwork flaws.

http://www.palmbeachpost.com/money/foreclosures/foreclosure-wait-time-drags-2097004.html

COMMENT from

Foreclosure wait time drags to 806 days in Florida

By Kimberly Miller Palm Beach Post Staff Writer

Updated: 6:35 a.m. Thursday, Jan. 12, 2012
Posted: 12:32 a.m. Thursday, Jan. 12, 2012

I’d refer Ms. Miller to this article which explains that the banks are no longer interested in foreclosing on defaulters because once the newly foreclosed homes are on their books, the banks can’t avoid the write-offs of both the negative equity as well as the worthless second liens. More generally, it keeps the trillion dollar losses hidden. http://www.nakedcapitalism.com/2012... Interview him.

top of the morning
7:07 AM, 1/12/2012

Monday, January 2, 2012
Michael Olenick: Is Shadow Housing Inventory Vastly Larger Than Widely Believed?

By Michael Olenick, founder and CEO of Legalprise, and creator of FindtheFraud, a crowd sourced foreclosure document review system (still in alpha). You can follow him on Twitter at @michael_olenick

The turn of the year is the time to make predictions and projections. I’m optimistic that the tide will finally turn for the American middle-class, suffering silently in a one-sided economic war. I don’t think this will be because of altruism, or even justice, but rather simple pragmatism. Specifically, I believe that parasitic financial institutions have pushed the boundaries so far that they’ve put their host, the middle-class itself, at risk. One new bit of information suggests the housing front is in more perilous shape than most pundits believe.

One challenge when performing any type of analysis is that information is scattered in many different places, and even when disseminated by the government its accuracy is oftentimes questionable. We’ve already seen existing home sales for recent years revised downward from their already dismal position, with barely a yawn from the public and no accountability whatsoever from government regulators who used that information when more reliable sources existed.

I don’t understand why accurate housing data, which is supposed to be open to the public, is so hard to come by. The housing crisis arguably rises to the level of a national emergency, one we can see and fee every day as it ripples through the economy. Despite that, government-owned Fannie Mae still keeps loan-level data away from the public, it’s extremely difficult to get data from Freddie Mac, and MERS’ database remains a black hole.

There is one piece of data only recently released — and, as far as I can tell, has gone unnoticed — that, if true, suggests the housing market is in such dire straits we’ve finally reached a critical mass where only radical out-of-the-box solutions will work. If this information, which comes of a highly suspect albeit well connected insider, is accurate, then extend and pretend has finally reached its natural end.

On April 15, 2011, Ft. Lauderdale, FL attorney Steve Jaffe took the deposition of former “Foreclosure King” David J. Stern. For whatever reason the transcript was not filed until Dec. 21, 2011, and with the holidays it’s taken even those of us who’ve been watching the Stern road-wreck — a group he actually hands a shout-out to towards the end – some time to plow through the 277 pages.

Forgive me for being self indulgent and giving you a sense of what Stern’s deposition is like.

Jaffe: What are your plans with the office?
Stern: I’m shutting it down.
Jaffe: How soon?
Stern: Not soon enough.
Jaffe: Why do you say it like that?
Stern: It’s done, it’s over. I have no desire to do this anymore. It’s a backstabbing business. A guy finds a way to make success and people get thrills of seeing them come crashing down, not the American dream, not the way I am.

Stern filed false court documents on such a scale that it engendered scrutiny and pushback, a rare development in our bank friendly economy. Cutting corners to fatten your wallet while throwing families out on the street doesn’t engender widespread admiration, yet Stern somehow sees himself as a victim.

Now to that revealing statistic.

For a quick bit of background, Stern took the “back-office” of his law firm public in early 2010, calling his new company DJSP. Right before his second quarter earnings release, he told investors in a meeting in New York that foreclosure filing volumes looked peachy. However, my own data showed didn’t things look great from Stern’s vantage point. Filing activity was markedly down, for him and everybody else.

During that conference Stern reassured investors. He even gave them t-shirts of himself as “Capitan DJSP,” holding back two busses with his bare hands. At the time I was relaying my data to some of Stern’s investors. It turned out my data was right; Stern’s wildly off base. What Stern knew and when he knew it was the reason he was sitting in a marathon deposition.

Here’s the excerpt that should send a chill down the spine of any housing analyst … and everybody else too.

Jaffe: .. you’re reading reports. You’re seeing volume. You’re seeing new file intakes. You’re seeing how fast they’re closing. And you’re seeing cash flow in and out of the company.
Stern: Okay.
Jaffe: And so, you have — in 2010, you have a handle on what’s happening with the business?
Stern: As the numbers are reported in the quarterly earning calls and the investors or the world, whoever elects to participate in that call is made aware of the day-to-day happenings.
Jaffe: Right. But you have that information, that institutional knowledge of your own business far in advance of those calls and reports for that matter.
Stern: When Fannie Mae comes in and sits down and says, “David, we have 600,000 shadow inventory loans,” we say “You mean, 60,000″? And they go, “No. We mean, 600,000.” And I say, “Oh, that’s nationwide”? And they go, “No 600,000 shadow inventory in the State of Florida”. Sure, I know. Yeah, it’s exciting. [Note: transcribed verbatim from the transcript.]

Let’s repeat that. In the spring or summer of 2010, before the robosigning scandal caused a massive slowdown in the number of foreclosures filed, Fannie Mae apparently had 600,000 loans they expected to foreclose upon. Not Fannie Mae, Freddie Mac, FHA, VHA, and private label mortgages, Fannie Mae alone.

Granted, Stern has a credibility gap; he’s clearly one of the lawyers whom FHFA Director Edward DeMarco was clearly referring to when he expressed to Congress that he was “puzzled” why state Bar associations have taken no disciplinary action. The Federal Housing Finance Agency (FHFA) is the government agency which oversees the GSE’s.

FHFA reports that Fannie Mae’s share of total US mortgage debt, at the end of 2010, is 27.7%. If Fannie Mae really does have 600,000 homes they expect to foreclose upon we’d expect to see about 2,165,000 shadow inventory homes total .. in Florida.

It’s impossible to believe this figure is accurate. Let’s look at some data. First, the Census Bureau reports there are just under nine million housing units in the entire state at the end of 2010, 8,989,580, to be exact. According to court records between July, 2010 through December, 2011, inclusive, there were 1,044 foreclosure filings per month in Stern’s home county, Broward County, FL; 22,144 filings total. However, from January, 2009, through June, 2010, inclusive, there 2,544 monthly filings in the same county; 48,144 filings total.

If the number Stern relayed is accurate, that would put a theoretical backlog of filings, for that one county, at 26,000. If we extrapolate to the rest of this high foreclosure state it’s safe to say shadow inventory estimates for the US have been dramatically underestimated, in much the same way that existing home sales were overestimated, albeit to a much more severe degree.

One thing is certain. Either a) Stern lied during his deposition, or b) Fannie Mae lied to Stern, or c) government and non-government organizations that project shadow volume have massively blown it. On Wednesday, Dec. 21st, 2011, HousingWire reports that CoreLogic projected shadow inventory to be 1.6 million homes throughout the entire United States. If Stern relayed the information correctly, and Fannie relayed it to him correctly, that figure looks more like it could be the shadow inventory of South Florida alone. Except that would mean they expect to foreclose on about half the houses in this state, which seems … impossible.

All this calls for far more disclosure on the part of the GSE’s, regulators, and courthouses. There is no legitimate reason to keep these figures locked away behind password-protected websites. Everything from the MERS database, to the Fannie/Freddie loan-level information, to the pile of mortgages the Federal Reserve has purchased should be open. This issue rivals a pressing matter of national security: there is no reason to force investors, home buyers, and others to speculate; to search for information.

But if Stern’s figures are anywhere near accurate it makes me optimistic that 2012 will be a turning point. Why? Quoting John Maynard Keynes, the only economist who seems to know how to pull a country out of an economic depression, “If you owe your bank manager a thousand pounds, you are at his mercy,” Keynes said. “If you owe him a million pounds, he is at your mercy.”
If he’s even partially correct then congratulations, Wall Street; we’ve reached a place where the foreclosures would cause Housing Armageddon. Where the middle-class itself has become Too Big To Fail.

Is the economy really getting better? Don’t see many forclosures now. Even I’ve heard of bidding wars again on foreclosed porperties.

It this the bottom. I don’t think so. Or is it some twist 2012 being election year. How’s the job situation? Are people spending now? I don’t think so that either. Are banks finally making loans? I don’t think so.

I listened to a podcast of McBride and Jim The ReaIt-Liar….. I’m now convinced he’s a NAR and most likely a CAR proxy and that POS he calls a blog is a conduit for NAR/CAR propaganda.

I am doing a group presentation on the September 2008 banking crisis.
I would like input on what advice Bernanke,Paulson, and Blankfein gave to President Bush to arrive at his decisions.
T

Looks like OWS got its message through.

Americans see rich and poor in conflict, study finds

(Reuters) - Americans believe that there is more conflict between rich and poor than between immigrants and the native-born or between blacks and whites, according to a Pew Research Center opinion survey released on Wednesday.

Researchers found 30 percent of Americans say there are “very strong conflicts” between the poor and the rich, which is the largest share expressing that opinion since the question was first asked in 1987, the Pew report said.

In all, 66 percent of respondents to the Pew survey said there are either “very strong” or “strong” conflicts between rich and poor.

Does it seem to others that the Fed is trying to expand its power by redefining monetary policy beyond its traditional narrow scope?

January 6, 2012, 10:00 AM

Fed’s Dudley: Housing and Monetary Policy Are Complements
By Michael S. Derby

In a speech calling for a host of policy actions to aid the housing market, a top Federal Reserve official also said Friday the central bank may have to provide more stimulus to help the economy.

“Because the outlook for unemployment is unacceptably high relative to our dual mandate and the outlook for inflation is moderate, I believe it is also appropriate to continue to evaluate whether we could provide additional accommodation in a manner that produces more benefits than costs, regardless of whether action in housing is undertaken or not,” Federal Reserve Bank of New York President William Dudley said.

He noted that as the Fed tries to aid the economy, and address the central role the weak housing market plays in impeding the recovery, the institution cannot go it alone. He said, “monetary policy and housing policy are much more complements than substitutes.”
…

January 12, 2012, 8:26 AM

Testing the Limits of Fed Power
By Neal Lipschutz

“I am sure that the Fed would not appreciate a white paper from Congress outlining how to think about and execute monetary policy.”

No, indeed. Such a gesture also would not be appreciated by investors world-wide who understand an independent central bank is crucial to a modern, complex economy.

There’s nothing like an ongoing crisis to hash out the desirable limits of Federal Reserve power. The danger for the Fed, in testing those limits in the interests of serving its mandates of economic growth and inflation control, is if the test sparks a backlash that shoves the Fed back behind the starting point.

But this is an active Fed, led by Chairman Ben Bernanke, and push it will.

The quote above is from Sen. Orrin Hatch (R.-Utah), ranking member of the Senate Finance Committee. What’s got the senator’s ire up is the recent white paper the U.S. central bank issued with Fed staff recommendations about what to do about the housing mess that’s still at the center of a struggling, albeit slowly growing, economy.

The white paper on housing is just the latest salvo in the Fed-Congress dance of contentiousness that’s been going on since the financial crisis sprung upon us full force in 2008.
…

Shadow Inventory Vastly Larger Than Believed
Shadow Inventory Vastly Larger Than Believed By Michael Olenick, Naked Capitalism, Jan. 3, 2012 In a 2011 deposition, Florida attorney David J. Stern said Fannie Mae apparently had 600,000 loans they expected to foreclose upon in Florida. Not Fannie Mae.( read more ). Fannie Mae foreclsoures
Foreclosure Pulse - Tuesday, January 3, 2012

http://browse.realtytrac.com/inventory/ - 55k -

January 11, 2012 5:00 AM text size: TT
Bernanke Doubles Down on Fed Bet Defied by Recession: Mortgages

Jan. 11 (Bloomberg) — Ben S. Bernanke is signaling his willingness to double down on a three-year bet that’s failed to revive housing, showing the extent of the Federal Reserve chairman’s effort to wrest a recovery from the deepest recession.

Since the Fed started buying $1.25 trillion of mortgage bonds in January 2009, the value of U.S. housing has fallen 4.1 percent, and is down 32 percent from its 2006 peak, according to an S&P/Case-Shiller index. The central bank is poised to buy about $200 billion this year, or more than 20 percent of new loans, as it reinvests debt that’s being paid off. Some Fed officials have said they may support additional purchases that Barclays Capital estimates could total as much as $750 billion.

Even as Bernanke and fellow U.S. central bankers consider expanding their efforts, they are acknowledging their inability to turn around the housing market without help from the rest of the government. Bernanke underscored the importance of residential real estate, which represents 15 percent of the economy, in a study he sent to Congress last week that said ending the slump is necessary for a broader recovery.

“They’re definitely frustrated and disappointed,” said Stephen Stanley, chief economist at Pierpont Securities LLC and a former Federal Reserve Bank of Richmond researcher. “I’m sure they would have anticipated they would have gotten more bang for their buck.”
…

1/11/2012 @ 4:14PM |3,370 views
Fed Says Economy Expanding, Housing Market Still Dead

Bernanke is doing something right, but he can’t get housing to come back to life

The U.S. economic recovery marches on, the latest Fed Beige Book shows. Covering the month of December, all twelve Fed districts noted some level of expansion in activity, as the economy rode the holiday wave and increased consumption trends vis-à-vis 2010. Still, commercial and residential real estate remains weak, prompting a response by three Fed governors noting they were failing at pumping life into the beleaguered sector.

Stronger consumer spending was the biggest positive data point to come out of Wednesday’s report, “reflecting significant gains in holiday retail sales compared with last year’s season.” The Beige Book confirms other reports showing the U.S. economy is indeed expanding, namely the latest jobs report which registered a 200,000 increase in jobs in December.

Despite heavy criticism, Fed Chairman Ben Bernanke can once again point to concrete evidence that his attempts to support the economy have, to some extent, worked. Inflation, one of the most important data points, continued to ease as “prior increases in the costs of selected inputs have eased.”
…

Maybe, just maybe, if the Fed can succeed in providing massive amounts of taxpayer-funded housing market stimulus in 2012, this bottom call will prove correct.

Lennar orders jump, says housing market stabilizing

A Lennar model home is open for customers in a new neighborhood in the Denver suburb of Thornton, Colorado March 29, 2011. REUTERS/Rick Wilking

By A. Ananthalakshmi

Wed Jan 11, 2012 1:13pm EST

(Reuters) - Lennar Corp (LEN.N), the third-largest U.S. homebuilder, reported a third straight quarter of order growth and said the housing market is bottoming out after a prolonged downturn.

Shares of the company jumped 9 percent to a three-and-a-half year high of $22.52 on Wednesday on the New York Stock Exchange.

They pared some gains and were trading up 7 percent at $22.22. About 1.2 million shares changed hands, more than their daily average volume.

Stocks of other homebuilders, such as KB Homes (KBH.N), PulteGroup (PHM.N) and DR Horton (DHI.N), were also up.

The S&P homebuilding sub-industry index .GSPHOME was up 5 percent, while the broader market .SPX was down slightly.

“As I look ahead to 2012, I am cautiously optimistic that we are seeing a real bottom form, and we will begin to see signs of recovery,” Lennar CEO Stuart Miller said on a conference call.
…

Is there any reason to expect this bizarre-sounding policy to work better in Spain than it would work in the U.S.?

BUSINESS
JANUARY 11, 2012

Spanish Banks Try to Build Their Way Out of Home Glut
By SARA SCHAEFER MUÑOZ And ILAN BRAT

Spain continues to build more homes despite hundreds of thousands of empty properties. Why are the banks funding these developments? WSJ’s Sara Schaefer Munoz reports on this counter-intuitive policy.

MADRID—On a weedy dirt lot here, lender Bankia is pursuing its answer to a banking and property crisis that has left Spain with a glut of around one million vacant homes. Its approach: Build even more.

Bankia and a local developer plan to build a 212-unit housing complex featuring a gym and movie theater on the central Madrid site where a bus station once stood. Construction begins early this year, even though sales of existing properties are practically nonexistent and only 45 of the planned new units have been sold in advance.

“The market is at a standstill,” said César Cabal, a real-estate broker working with the developers.

The drive to keep building in a housing market drowning in empty properties shows the depth of Spain’s banking crisis. The country’s housing bust saddled banks with not just vacant homes, but also billions of euros worth of undeveloped land.

Yet rather than writing off the land as a loss and attempting to sell it, Bankia and its peers have begun selectively building on empty lots. In some cases there are buyers lined up but in other cases there aren’t.
…

By Caroline Salas Gage
January 10, 2012 5:11 PM EST

Dudley, Boston Fed President Eric Rosengren and Fed Governor Elizabeth Duke all also said last week that the U.S. government should try new ways to spur the housing market, without agreeing about how much more the central bank needs to do to bring down interest rates. San Francisco Fed President John Williams today called for federal programs to support housing and “tax and spending policies” that would complement the central bank’s moves.

Dudley said Jan. 6 that Fannie Mae and Freddie Mac should allow underwater borrowers, those who owe more on their mortgage than their home is worth, to pay off their loan below par if certain conditions are met including that the borrower stays current on payments.

‘Wealth Transfer’

“Reducing the principal on home loans for borrowers who put no money down amounts to a massive wealth transfer from places like Tennessee, where most homeowners have borrowed responsibly, to places like California and New York, where exotic mortgages were widely used to finance a speculative housing boom,” Corker said in Nashville, Tennessee, before the Greater Nashville Association of Realtors, according to a statement from his office.

“It is absolutely egregious that the Federal Reserve would insert itself in this manner and ask people in Tennessee who played by the rules to bail out reckless borrowers in other parts of the country,” Corker said.

Krishna Guha, a spokesman for the New York Fed, declined to comment.

http://mobile.bloomberg.com/news/2012-01-10/republican-senators-criticize-fed-recommendations-on-housing?category=%2Fnews%2Fus%2F - 23k

VERY good article regarding ’shadow inventory’ levels and lender’s behavior over at Naked Capitalism. Michael Olenick brings up some observations that appear to ring true.

http://www.nakedcapitalism.com/2012/01/michael-olenick-10-million-shadow-inventory-says-housing-market-is-a-long-way-from-the-bottom.html

Snip:
“…Put more simply, things are actually worse than any of the prevailing estimates indicates, although Goodman is very close to the mark. Current loss experience suggests that this figure is staggering, easily in the $1 trillion range.

Why aren’t those losses more visible yet? Well, evidence suggests that servicers are stalling the foreclosure process, not taking title to and selling these houses. For the lenders, such delay likely allows them avoid the write-offs of both the negative equity as well as the worthless second liens. More generally, it keeps the trillion dollar losses hidden. Lenders aren’t acknowledging their stall tactics, however. When people notice how slowly foreclosures are progressing from initial steps to resale, lenders point at their foreclosure fraud related dysfunction. Lenders conveniently don’t mention that such dysfunction was self-induced, instead blaming borrowers and courts. “

Even after posting this on FB people will still vote for the I hate black people pres. Its deep not a word from our leeduh nothing

http://www.ocala.com/article/20120106/ARTICLES/120109796/1412?Title=Seven-youths-charged-with-beating-girl-on-school-bus

Comment by In Colorado
2012-01-12 08:53:42
“Agreed. We have a global economic system that doesn’t work, which has generated trillions in debts that cannot be repaid.”

That is technically not correct. Debt does not exist without offsetting money and money does not exist without offsetting debt. There is sufficient money to repay all the debt.

The problem is, the people with the money do not want to spend it so that the people with the debt can get the money they need to repay those debts.

We’ve spent 30 years embracing trade imbalances (domestic and international). All trade imbalances create money which is offset by equal amounts of debt. The result of 30 years of embracing trade imbalances is one set of entities accumulating lots of money, and another set of entities accumulating a lot of debt.

All of the debt can be repaid, IF and ONLY IF we reverse the trade imbalances.

I see no evidence that people are waking up and realizing what money is, accepting that trade imbalances generate debt that will not allow the trade imbalances to be persisted long-term, or that the only alternatives are 1) reverse the trade imbalances so that the debt can be repaid or 2) allow the debt to collapse the money to poof out of existence and the resulting depression to reverse the trade imbalances.

We’re still looking for an option 3 where we can all continue to spend 110% of our incomes forever, without having to pay on or for any of that debt, so that we can continue to run ever widening trade imbalances, forever.

The “inflate our way out” is a pipe dream that would require rising wages, which will only occur if we get to the point that foreigners stop selling us stuff in exchange for our unplayable debts… which really just makes this one of the means of achieving option 1 above, reversing the trade imbalances.

In summary, the money exists to repay all the debts. However, the people with the money are not the same people that have the debts, and the people with the money seem disinclined to spend it or in other ways have the money make its way into the hands of the people with the debts.

The decline of civilizations of the past — fourth-century-b.c. Athens, fifth-century-a.d. Rome, 15th-century Byzantium, 1930s Western Europe — was not caused by their spending too much money on defense or not spending enough on public entitlements. Rather, their expanding governments redistributed more borrowed money, while a dependent citizenry wanted even fewer soldiers so as to guarantee ever more handouts.

History’s bleak lesson is that those societies with self-reliant citizens who protect themselves and their interests prosper; those whose citizens grow dependent cut back their defenses — and waste away.

Here’s the best evidence I’ve found of what’s happened to the U.S. over the last nine years in terms of numbers of people employed and their median wages. It’s from the government’s Bureau of Labor Statistics. The data is nicely laid out in Table 1 on Page 5 of the PDF.

http://www.bls.gov/news.release/pdf/wkyeng.pdf

Highlights: The number of full time workers was the same in 3Q02 as it was in 3Q11, at about 100 Million. It peaked in 4Q07 at about 108 Million. The precipitous drop was in 4Q08. Hmmm, what event occurred in that time period? It would also be interesting to see how the 18-to-65 population increased over the nine years.

The median constant-dollar (Inflation adjusted) wage is the same in 3Q11 as it was in 3Q02. Over that entire time it’s been within +3% and -2% of the initial value. In current dollars the number went up, from $608 to $756 (for full time workers) over that period.

http://www.cnbc.com/id/45976815

“The Santa Clara-based bank and groups like the National Venture Capital Association want regulators to explicitly exempt venture capital investing from the ban. They contend not doing so could deprive the industry of needed investments from banks at a time when funding is already hard to come by because of the sluggish economy.

The 2010 Dodd-Frank financial oversight law included the Volcker rule, which generally aims to restrict banks’ risk-taking. Regulators are collecting comments on a proposed rule released in October.”

No problem. Give up your FDIC guarantee on deposits, and you can do anything you want with your money. If you want the FDIC insurance, then you have to limit your investing to SAFE investments.

Why is this stuff so hard to understand?

Oh, right… their goal is to privatize the gains ans socialize the losses. My bad. What was I thinking?

a government intervention ?

CNBC

Wall Street has bet big over the past few months on a housing recovery that, according to most views, is still likely a good distance in the future.

Home builder stocks in particular have gotten a huge boost over the past three months or so, rising more than 50 percent since the end of the third quarter.

Analysts attribute the move to two primary factors: The belief that the government is planning some type of intervention to help deal with the glut of foreclosures still on the market, and a cyclical move in the stocks that often comes in anticipation of building season.

(Once again, or highly trained corporate leadership identifies a symptom as the disease…… and multiply this times just about every other business segment.)

“AAR, Chicago team to build Aviation Workforce”

http://tinyurl.com/7o76flk

As predicted, the whining about “we can’t find qualified workers….” continues. And of course, the solution is more corporate welfare, spending tax money on training people, so they don’t have to.

And as far as the “shortage” is concerned?

Checked several job boards. Yeah, there are lots of open positions. Requirements typically are:

-3 to 5 years experience on their specific airplane

-Manufacturer approved training in the specific type they are working on.

-Willing to work overtime (Translation…..48-56 hour weeks, 40+ weeks out of the year)

-Willing to work nights and weekend (Translation…….both)

-Work in an airport/hangar environment (Translation……110 degree hangars in the summer, freezing your azz off working in the ramp in Duluth in the winter, or usually, a combination of both)

-Ability to lift 75 pounds (and hold it over your head with one hand, while turning a wrench with the other).

-Be willing to relocate with no company assistance.

-No defined pension plans, usually a crappy 401K. Sometimes you get “free flying privleges”……flying “standby”, if there were unsold seats…….yeah, that used to be a perk, back in the days before flights were routinely overbooked. Now, you can expect to wait two days for a open seat. Forget about flying the whole family, at least on the same airplane

-Pass drug testing (pre-employment and random) screenings.
(Refuse or come up positive? POOF! Instant termination, and FAA certificate revocation for a minimum of one year).

And for this they are offering a salary of $15 hour to start. If you are luck, and become “Mr Ace Mechanic”, you might make the princely sum of $40/hour at the end of 30 years.

Aviation’s problem is that there aren’t an overabundance of people with the skillset, and intelligence to be A & Ps. Even fewer with leadership and customer service skills. And fewer still that you would actually trust sticking them out on an island all by themselves, with no QC or management backup. Add to this the fact that this very same skill set is highly prized by industries that CAN and WILL pay more than $15-20hr.

There is no “free market” for labor. If there was a “free market”, salaries would rise until the job became attractive enough to attract qualified people.

Instead, we have many industries/businesses in this country where the business plan fall apart if they have to pay “market rates” for skilled labor.
So the plan becomes to reduce standards (either by actually reducing them on paper, or by moving the work to shops where there is no FAA oversight), and transfer training costs to the government.

The median age of the typical aerospace worker is around 50. A big percentage of the (few) mechanics that have been trained since 1990 have gone on to bigger and better things, mostly after being thrown under the bus in 2001 and 2008 by the very same guys complaining about a “skilled labor shortage” today.

Much like the banksters house of cards, add this one to the list of systems and infrastructure that’s being held together with bandaids and gum. Just like the other problems, it’s nothing that money can’t fix. But as everyone knows, there’s no money or time to do things right, but there plenty of time, and double the money to do things over.

Don’t say you weren’t warned.

Great article demonstrating that the Fed didn’t have a CLUE in 2006:

http://www.nytimes.com/2012/01/13/business/transcripts-show-an-unfazed-fed-in-2006.html

WASHINGTON – The desperation of homebuilders was a running joke among top Federal Reserve officials during the waning phase of the housing bubble in 2006, according to transcripts released Thursday.
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Fed Transcripts in 2006 (federalreserve.gov)
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Economix Blog: Blasts From the Fed’s Past (January 12, 2012)
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They laughed about the cars that builders were giving to buyers. They laughed about efforts to make empty homes look occupied. They laughed at a report that one builder said inventory was rising “through the roof.”

The officials, meeting every six weeks as the central bank’s top policy committee to discuss the health of the nation’s economy, did not seriously consider the possibility that problems in the housing market would send the nation into recession.

“We think the fundamentals of the expansion going forward still look good,” Timothy F. Geithner, then president of the Federal Reserve Bank of New York, told his colleagues when they met in December 2006.

Great article. Really opens your eyes!

http://thinkprogress.org/politics/2012/01/10/401517/three-leading-gop-nominees-porn/?mobile=nc

Establishment GOP Hollow Men Romney, Gingrich and Santorum say they’ll make porn illegal. What will SEC regulators do all day if that happens?

It isn’t about housing anymore folks. If I wanted a house I’d write a check. It’s about the entrench power structures that keep us enslaved.

The Boston Globe
EDWARD L. GLAESER
Fed’s housing ideas won’t fix market
By Edward L. Glaeser
January 13, 2012

WE SHOULDN’T count on the housing market to carry America back into economic uplands.

Last week, Federal Reserve Chairman Ben Bernanke sent a white paper to Congress outlining possible reforms to current housing policies. The paper proposes converting bank-owned properties into rental units and reducing borrowing costs for owners who are at risk of default. Some experimentation along these lines makes sense, but attempts to rejigger the market only go so far — and the barriers to success are high.

Bernanke’s frustration with housing is understandable. The seasonally adjusted Case-Shiller price data for October 2011 showed a decline from the previous month in 16 out of 20 markets, including Greater Boston. The housing market malaise weighs on the larger economy because low prices mean fewer construction jobs and because homeowners spend less when they feel less wealthy.

Yet while macroeconomic conditions might improve if the housing market perked up, it’s not obvious that the government should look for ways to artificially push up home prices.

Low housing prices means greater housing affordability, and current prices are closer to what market fundamentals would justify than the inflated prices of five years ago were. We overbuilt by nearly 3 million housing units during the boom, so we cannot avoid a painful period of limited construction that allows demand to catch up with supply.

The paper proposes converting bank-owned real estate into rental housing to reduce the stock of vacant homes.

Because the Federal Reserve knows the limits of government policy-making, it’s focusing its attention on two narrow problem areas: the large supply of vacant homes, and the ample number of owners potentially facing foreclosure.

The paper proposes converting bank-owned real estate into rental housing to reduce the stock of vacant homes. America does need to turn towards renting after an undue emphasis on owner occupancy. But our current vast supply of vacant housing was built to be owned, not rented, and conversion is quite difficult.

As landlords know, renting is a tricky business that is made easier with compact, ideally multi-family units - like Boston’s triple-deckers, unlike newly vacant homes built in exurbia. There is a close connection between housing type and ownership. More than 85 percent of single-family detached houses are owner-occupied, while more than 85 percent of units in large multi-family buildings are rented.

The Fed’s proposal may hold some promise in denser areas of Boston and adjacent cities and towns, but it quickly breaks down in more outlying areas. Renting single-family detached houses is difficult, because renters don’t have the right incentives to provide the sweat equity that homes need. Some estimates suggest that homes lose 1 percent of their value each year when rented, and those are homes selected for the rental market. Newly constructed exurban homes have far more potential downside, especially if they are hard for landlords to monitor.

Despite the dangers, I’d support a modest experimental rental program, if it can be done without subsidy. Maybe the government could run an auction, but sell only if rental companies exceed a certain price.

The Fed paper’s second primary proposal is to modify loans for owners who owe more on their mortgages than their homes are worth. Other programs have tried this already, with limited success, but the Fed suggests further steps to help homeowners, such as eliminating the refinancing fees that the government-controlled Fannie Mae and Freddie Mac charge in certain riskier situations. Freddie and Fannie might also refinance underwater loans made by private lenders.

While the Fed should want to help distressed borrowers, we should be wary of imposing more financial risks on Fannie and Freddie. Taxpayers are already out hundreds of billions of dollars because of past risky mortgages. I favor a simple cash payment of under $10,000 to ease the pain for foreclosed families; that form of aid provides humanitarian relief without keeping people in homes that they can’t afford.

Even if Fannie and Freddie modify many distressed loans, that won’t rekindle the housing market. Real housing prices did not rise between 1991 and 1998, when our economy roared after the last housing bust. We don’t need another new housing boom to bring America back.

Edward L. Glaeser, a professor of economics at Harvard University, is author of “The Triumph of the City.’’ His column appears regularly in the Globe.

Geithner said Greenspan was ‘terrific’ in 2006
January 12, 2012, 12:13 PM

The Federal Reserve today released the transcripts of Federal Open Market Committee meetings for 2006 after the customary five-year lag.

The verbatim records include the January 31 meeting, which was the last FOMC meeting under former chairman Alan Greenspan. This was the apex for Greenspan’s career.

Praise for his leadership and steady hand during his eighteen-and-a-half year tenure at the helm of the central bank dominated financial press coverage as he met with the Fed’s top policy-makers for the last time. The fast-approaching financial crisis was not yet on the horizon.

According to the transcript, U.S. Treasury Secretary Timothy Geithner, who was then the president of the New York Fed, was effusive in his praise for the outgoing chairman. “I’d like the record to show that I think you’re pretty terrific too,” Geithner told Greenspan. (The context was other Fed members praising Greenspan.)

“And thinking in terms of probabilities, I think the risk that we decide in the future that you’re even better than we think is higher than the alternative.” Of course, that was one tail-risk that did not materialize.

Other highlights, or lowlights if you will, include the Fed’s inability to forecast the looming housing bust. For sure, the central bank saw slowing in housing, but didn’t come close to figuring out its impact on the economy.

Susan Bies — now a board member at Bank of America — said a housing pullback could actually help the economy.

“So I really believe that the drop in housing is actually on net going to make liquidity available for other sectors rather than being a drain going forward and that will also get the growth rate more positive than the current Greenbook forecasts,” she said in June 2006. The Greenbook is the Fed staff forecast.

And here’s a joke, told by Dave Stockton at the December 2006 meeting in relation to a particularly dry Greenbook. Stockton retired last year as research division director.

“I was reminded of the old joke about the man who is told by his doctor that he has only six months to live. The doctor recommends that the man marry an economist and move to North Dakota. The man asks whether this will really help him live any longer than six months. The doctor says, ‘No, but it sure will feel a lot longer.’”

– Greg Robb

China’s tall danger signals
January 11, 2012, 7:12 AM

Amid the ongoing bubble watch in China’s real-estate sector, new research Wednesday showed the mainland is home to more than half of the world’s skyscrapers currently under construction.

Barclays Capital said that China is now flashing some of the telltale signs of a bubble on its Skyscraper Index, which is designed to track the correlation between tall buildings and an impending financial crisis.

Slightly over half of the 124 skyscrapers due to be completed in the next six years are in China, according to Barclays, which cited its own in-house research and website Skyscrapernews.

The construction binge will increase the number of skyscrapers in Chinese cities by 87% the report said, noting that the average height of buildings under construction is also increasing.

Barclays analysts said the frenzied activity in these lesser-known cities amounted to “evidence of the expanding building bubble,” adding that its Skyscraper index has acted as barometer of widespread misallocation of capital that can see instances of excesses dating back to before the Great Depression.

“The writing, so to speak, would seem to be already on the glass curtain walling,” Barclays said, adding that a sharp economic correction for China should occur within the next five years if it follows the pattern seen during other instances of overbuilding.

– Chris Oliver