Bits Bucket for February 1, 2012
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Am I the first post? Wow. That hasn’t happened to me since mid 28. O.K., here’s the topic: Signs the recession is ending in your state.
Example: CA jobs grew 1.9% in 2011, 5th best state in the nation and the most jobs created of any state.
“…mid ‘08″ (driod typing).
Speaking of which, I’m stuck with a defective Droid 2 that I’ve already replaced 3 times (job creation in Foxconn City) with a keyboard that freezes the app whenever I use the space bar which forces.me.to.type.like.this.
When’s Droid 4 coming out already?
George Lucas is raking in the bucks off of you.
Switch to a Windows Phone and the lag disappears. I’ve been on WP7 since Nov. 2010, after having Android prior. There is just a night and day difference in the usability.
a keyboard that freezes the app whenever I use the space bar which forces.me.to.type.like.this.
LOL. And I thought you were just being dramatic…
I had to replace my HTC Incredible 2x as well. The updated software killed it 2x.
“That hasn’t happened to me since mid 28.”
If you been posting here since mid-28, you better call up Al Gore and let him know that you invented the Internet, not him.
He means 2028. He’s from the future.
Cackle cackle! I am enjoying this!
And watch housing price declines accelerate and the economy recovers.
I still do not understand why the stock market is going up by 1-2% everyday. It was almost 12% up for Jan. The economy is really improving for some maybe. Or is it something do with it being election year. Some backdoor printing and buying back stoks to keep them high? What about the BRICs? They are also showing double digit gains for Jan. I just cannot understand it.
On one hand they talk about QE3 and if growth is really happening, why do we need QE3????
Short squeeze.
The most shorted stocks were up the most.
I just cannot understand it.
“This is your last chance. After this, there is no turning back. You take the blue pill - the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill - you stay in Wonderland and I show you how deep the rabbit-hole goes.” -Morpheus
+1000
Up about 10 percent since Jan 1. That is ten percent more gain than what Combo thinks is the proper earth since 1981, right Combo?
worth
Proper earth is when I control all of Alaska, California, and Hawaii…
All based on massive government spending.
You can’t have a trade deficit without unsustainable debt growth, and right now the Fed Gov is the only game in town when it comes to new money/debt generation.
Publicly held debt up from $5T to $10T over the last 4 years. We hit $15T 4 years from now, and things start to get ugly. $16-17T within 6 years and we’re toast.
I am not going to believe things are getting better until I see shrinking trade deficits, massive wage increases, and a narrowing wealth disparity.
What you’re calling signs of improvement is just rearranging deck chairs.
What are you talking about? Things are improving just fine… for the 1%.
Any “signs” of recovery during a Zirp til Eternity and Beyond environment are completely fake and should be disregarded. Its sort of like finding gems in a plastic bucket of dirt that has been planted with rare finds. If rates go up a few percent and stay there then we might have a recovery on our hands. Until then, the analysts should be ignored.
It’s sad how people can be scammed by other people and not realize the sleight of hand being used to create the “illusion”.
Your comment reminded me of a visit I made to one of the small mining towns that ring the Denver area. I took a tour of the mines, some of which are still operating on a small scale.
At the end of the tour, there was an outdoor display set up to show you have panning for gold was done, down at the river.
I stood close to the man giving the demonstration and happened to catch him drop some small gold leaflets he had held in the palm of his hand into the pan he was swirling.
Amazingly, he came up with some small gold leaflets that he put into a small vial and displayed as a successful panning operation.
Thereafter, the gang of suckers were invited to buy some pans and vials and go down and try their luck at “finding gold”. It’s still there.
Just in small quantities. I passed, upon seeing the trick used to show the gold still in the remnants of the stripped out mine.
Others, however, spent their dollars on some tin pans. Too bad.
Think about out two statements combined….
$1.3T a year new government debt/money stimulus and 0% interest rates for as far as the eye can see. And, maybe, if we’re lucky, we may see 2% GDP growth, maybe.
I’m reminded of a weather man in Colorado Springs when I lived there. He had predicted heavy snow, but nary a flake was falling. On his updated weather report he says, “Saturated air mass, falling temperatures, up slope wind creating lift. Everything I understand about meteorology tells me it should be snowing like crazy… guess we don’t know everything.
Same can be said for our current economy.
For 30 years we’ve ignored debt growth and focused on interest rates, tax rates, stock prices, wealth effect… blah blah blah.
ANYTHING and EVERYTHING was used to explain economic growth other than unsustainable debt growth.
Well guess what. Those anythings and everythings are being tried, and it isn’t working now. Hmmmmm… could it be that we’ve reached the end-game of the debt based economy? Can it be that cascade debt defaults are once again going to show us why trade imbalances can not be persisted?
And here is another sign…Ben is very busy working…..well, sort of a mixed sign, since he is moving foreclosed houses thru the system….
You forgot Caterpillar with record earnings: Dozers coming soon to a failed mcneighborhood near you.
Having watched Gold Rush, I think all the used ones are heading to Alaska.
well, sort of a mixed sign, since he is moving foreclosed houses thru the system….
Mixed sign? I would argue that is the only thing that will eventually improve the housing market.
Agreed….it is just like taking medicine when you are sick…don’t like the taste, but you know it is the best thing for you…..
Actually, most cold medicine only fights the symptoms of the cold and not the cold itself. You get well just as fast whether you take the meds or not. In fact, if you have a productive cough (coughing up globs of goop), one of the worst things you can do is take a cough suppressant.
There are anti-virals now, but you have to take them VERY early, at the first sign of symptoms. One you have the full blown symptoms, meds do little to nothing.
Bringing this back to housing. Had we attacked the bubble at the first signs, we may have prevented it from getting as bad as it did. Once prices doubled on pure speculation, the only thing we could do was let prices fall back to fundamental support levels of affordability and rent equivalence.
I didn’t think he was talking about colds necessarily.
There are side-effects to those anti/virals.
And American Airlines laying off 15,000, and the falling axe at Microsoft..
20 local school districts are asking for money in the upcoming March primary election; that aught to improve their economy. After all, those beemer leases dont come cheap!
Money for providing a ballot box location? I suppose there are expenses incurred….
Ah, the myth of the well paid teacher. We have two in the family. One drives a ten year old Honda and the other one drives a Kia minivan with 100K on the odometer. Neither makes more than 40K.
We have a funeral this week. Neither of them got bereavement pay (I, Mr. private sector, got 5 days off). 3 years ago I toyed with the idea of becoming a HS math teacher. Then I saw the starting pay (low 30s) and I quickly discarded that idea.
“Ah, the myth of the well paid teacher.”
(there are others too, where they come from is a great my$tery!)
“Linda the Lunch Lady Live$ Lavi$hly!”
Yesterday$ award$ celebration$:
“Fox news rated #1 in America”
Might be a good oil-city job for walking money, but you gotta come in with ca$h.
“the myth of the well paid teacher.”
some do…most don’t.
“We have a funeral this week. Neither of them got bereavement pay”
Possible workaround: Use a few of the 20 some odd days of “personal leave”?
That’s only NY where the teachers own the education system thanks to Sheldon Silver.
I’m glad some people become teachers, and, without question, some of the perks are great (summers off being the biggest). But, man, going into college today, you better REALLY love to teach to go down that route. The money is just horrible and shows no signs of going anywhere but stagnant/down.
The best teaching gig, by far, is a college professor. Both of my parents are professors (well, now retired) at a state college. What a great lifestyle, they worked 2 days a week, had all summer off, and were basically un-fire-able because of the tenure system. Before they retired, both had salaries a bit north of 100K. But they also had another job (accountants) because, again, they only had to work 2 days a week.
Really nice way to set yourself up, that’s for sure.
But, high/elementary school? I’m not sure I’d do it for 3X the pay; I’m very thankful that there are those who do this because they love it.
Having weekends off + every holiday + spring/fall/Christmas break is worth $$$.
Every teacher I knew in High School had a summer job.
A number of the male teachers in my high school tended bar on weekends, too. Especially, if they had kids approaching college age.
Having weekends off + every holiday + spring/fall/Christmas break is worth $$$.
If you have your own kids (and both parents work) it can get really expensive cobbling together camp and childcare during the summer months and winter/spring breaks.
I love teaching, and believe it is my calling (second career - switched from auto mechanics in my 30’s), and am also pretty clear that in choosing this profession I have chosen right livelihood and TIME over money.
When all is sad and done and I am lying on my death bed, I am not going to wish that I had worked more days and made more money. I will be glad for the time I had with my kids, for the waves I surfed, the long runs I ran and the hikes I took, and the lives I made better by enjoying my work as a teacher.
I may not own my dream house (yet) and my CALSTRS pension looks mighty shaky, but I am still glad I’m not a banker.
When all is sad and done and I am lying on my death bed, I am not going to wish that I had worked more days and made more money. I will be glad for the time I had with my kids, for the waves I surfed, the long runs I ran and the hikes I took, and the lives I made better by enjoying my work as a teacher.
Don’t forget that you are also setting the example for your children that they will use on their journey through life.
“When all is sad and done …”
Hwy50 shouts: “x3 cheers for sfrenters “critical thinking” skill$”
Hip, hip, hooray!
‘A number of the male teachers in my high school tended bar on weekends, too. Especially, if they had kids approaching college age.’
Some of our male teachers worked in liquor stores for P/T money. Many a time we had to do a 180 out the door as soon as we saw Mr. History Teacher or Mr. Phys Ed behind the counter. Beer was more fun in the 80’s.
That is why they got hired. They pretty much knew exactly how old everyone was. Fake IDs were useless with them.
they worked 2 days a week, had all summer off, and were basically un-fire-able because of the tenure system. Before they retired, both had salaries a bit north of 100K. But they also had another job (accountants) because, again, they only had to work 2 days a week…..
which, of course, contributes to the high cost of College. The salaries are supposedly justified, because they can’t be easily replaced, however, since they can’t be fired, we’ll never know just how easily they could be replaced.
“The best teaching gig, by far, is a college professor.”
One of the little ironies (at least for me) of life is that the local university wouldn’t hire me for a writing teaching job, yet they keep putting some of my books on their required reading list.
Big fish, small pond. The small fish really hate that and get very insecure.
get very insecure
Of course they do—they know they will probably get eaten!!
Well, just stating the type of car driven isn’t controlling (though appropriate in response to being accused of the profession all driving luxury vehicles). Some of us don’t drive the max we can afford.
- Polly, the lawyer who drives a 14 year old Ford
And I have never heard of teachers getting 20 personal days off a year. I thought they got sick days when actually sick and like 2 personal days a year. Otherwise they were expected to show up and schedule other needs during school vacation.
Otherwise they were expected to show up and schedule other needs during school vacation.
My teacher mother was an expert at scheduling doctor’s and dentist’s appointments after school and during vacations. If the health care folks wouldn’t go along with her scheduling needs, she’d take our family’s business elsewhere.
You probably never heard of teacher’s pensions being exempt from income tax either.
I certainly have. A few states with income taxes, don’t tax teacher pensions because they figure the hassle of paying out more (the pension terms were negotiated with the state tax exemption already understood) and then collecting it in taxes is just added administrative expense.
A few of those states have agreements with some other states so there is reciprocity on the tax free treatment or at least a reduced tax liabiity.
Teacher pensions are taxed at the federal level (maybe excepting certain returns of money contributed just like you would get it if you had already taxed funds in a regular IRA).
Ah, the myth of the well paid teacher.
Please don’t confuse the well-paid teacher myth with the well-paid school administrator fact… public education is too top-heavy and school administrators have no business earning six-figure salaries with the public school systems in this country in such poor shape, the drop-out and illiteracy rate so high, math scores so low, and college-level remediation necessary for a high percentage of so-called high-school graduates.
The money school districts ask for rarely goes to the teachers… rather it gets added to the already fat checks of useless administrators.
Full Disclosure:
My kids go to private schools and will do so for the foreseeable future.
college-level remediation necessary
———-
While I don’t exactly disagree with you, at my university in the ’90s, they recommended remedial courses if you got less than 100% on the 30 question tests you took at orientation, and required if less than 80%. Remedial courses are also a revenue stream for colleges, and not wholly an indicator of poor performance by high schoolers.
So score 80% and you don’t “have” to take the remedial courses… the problem today is many high-school graduates/first-year university students can’t even do that.
What a solution. Judging by the posting of most people here, the majority would fail an improptu grammar and spelling test, and I’d bet many would fail the math test as well. Does that mean everyone needs remedial courses before they could pass a college freshman level course, or that it’s a ridiculous concept that everything you learn in school needs to be held in near-term memory?
Hail to thee, grammarian!
One-third of students need remedial math/reading
You spend 12 years of your life in school learning to read, write, perform math at various levels, etc. You take Fed mandated state-level exams measuring your “level of knowledge” in core subjects… and get to college realizing that you can’t read/write or perform math at the level the university expects you to.
I spent 8 weeks in Basic Training and 16 weeks in AIT when I enlisted in the Army. When I finished training and reached my unit, I could operate and field maintain every system on a Bradley IFV, operate a SINCGARS radio net, effectively utilize every man-portable and crew served weapon system commonly available to line infantry, work effectively at the fire-team and squad level, etc.
24 weeks… and I learned and retained knowledge that was completely foreign to me prior… these kids have had 12 years to learn the fundamentals, yet still fail to understand/retain that knowledge. That’s a NO GO in my book…
Take a page from the US military’s training manual: motivation, discipline, repetition, accountability, consequences for failure. Which of these elements are missing from public schools today?
I’m not sure that it’s really comparable.
Think of it this way: say they give the test for “effectively utilize every man-portable and crew served weapon system commonly available to line infantry” (that’s a fancy way to say load and fire a gun) on the first day you join, and if you got less than 80% you had to pay for it?
Man some of those guns sure are expensive….do you think the military would have a vested interest in you personally passing or failing?
Judging by the posting of most people here, the majority would fail an impromptu grammar and spelling test, and I’d bet many would fail the math test as well.
I plead guilty as charged!
motivation, discipline, repetition, accountability, consequences for failure. Which of these elements are missing from public schools today?
Is this a trick question? Is the answer “F: all of the above”?
“when I enlisted in the Army”
You volunteered to be there, so you already had motivation. K-12 students are required to attend and may lack motivation to learn the material (altogether or in any particular class).
The Army is a very controlled environment - no outside influences for the duration of Basic. Students have many external influences, some of which undermine their motivation or ability to learn.
If you are incapable of learning, the Army can kick you out.
K-12 students are, with few exceptions, under 18, with sometimes widely varying levels of maturation in the same classroom. Children are not little adults, they are fundamentally different. Maturity and intelligence are not necessarily linked and children develop different skills at different rates. One child walks at 9 months after crawling for 2 weeks and another at 14 months after crawling for 6 months. Overall physical ability may be the same, but development is not a straight line and walking at 14 months does not necessarily indicate a developmental delay.
Is this a trick question?
LOL. I must have forgotten creativity…
“Children are not little adults, they are fundamentally different.”
I agree. However, adults are just large children.
public education is too top-heavy and school administrators have no business earning six-figure salaries with the public school systems in this country in such poor shape, the drop-out and illiteracy rate so high, math scores so low and college-level remediation necessary…
Obviously the answer as to why six-figure are paid to public school administrators lies in your own writing above.
It’s to “keep the talent”.
You do know that your local school is… elected?
Unahppy with the school performcne? VOTE THEM OUT!
THAT’S
You do know how the board got there, don’t you? They were… elected. By the citizens.
VOTE THEM OUT!
THAT’S how you fix education.
Education is a mess as a DIRECT result of voter apathy.
Period.
It isn’t unusual for totally local elections to have turn out at the 10 to 15% level in some places I have lived.
The local school boards aren’t as much of a problem as the following typical administration staff every school system seems to be saddled with:
School Superintendent,
Assistant School Superintendent ,
Principal High School/Middle/Elementary,
Vice Principal High School/Middle/Elementary,
Director of Curriculum,
Director of Library Services,
Director of Food Services,
Director Human Resources,
Director of Information Technology,
General Counsel,
School Psychologist
etc.
I could go in. That certainly seems like alot of overhead before a single teacher has been paid to teach a single lesson… our real estate tax dollars (and Federal and State tax dollars as well) at work.
‘that aught to improve their economy’
Very punny.
20 local school districts are asking for money in the upcoming March primary election; that aught to improve their economy.
We have a number of school district levies on the FEB 14th ballot right now, and judging by the reader comments I’ve read so far they’re likely to fall short. Too many people are up to their eye teeth in debt around here.
Data from the end of 2011 suggest that a housing-market recovery has begun in metro Phoenix.
The upswing in the market will surprise many because it comes less than five months after the region’s existing-home prices fell to their lowest level since 1999. But even at last year’s low point in August, when the median home price fell to $112,000, many market indicators pointed to an increase in the area’s home prices by year-end. Now, it appears they were right.
http://www.azcentral.com/arizonarepublic/news/articles/2012/01/05/20120105phoenix-area-housing-may-be-on-mend.html
Very temporary my friend.
Once the Canuckian bubble implodes, those suckers in Phoenix and Vegas will head for the exit at the same time.
What will happen when the China bubble deflates?
China’s housing bubble is losing air
Home prices and sales plunge after China’s government intentionally slams on the brakes. Some recent buyers stage demonstrations, destroy real estate offices and demand refunds of up to 40%.
December 13, 2011|By David Pierson, Los Angeles Times
People who made down payments on homes at a China Vanke Co. development protest in Shanghai outside the Vanke Shanghai Center, standing opposite a row of security guards.
(Qilai Shen, Bloomberg)
Reporting from Beijing — Falling home values. Debt-strapped borrowers. Real estate woes dogging the economy. It’s old news in the United States, but now the air has started to leak from another great housing bubble — in China.
Home prices nationwide declined in November for the third straight month, according to an index of values in 100 major cities compiled by the China Index Academy, an independent real estate firm. Average prices in the Shanghai area are down about 40% from their peak in mid-2009, to about $176,000 for a 1,000-square-foot home.
…
Why don’t they just lower lending standards? Duh.
Don’t make us send Angelo Mozillo over there to show them how its done.
Country-wide
Is on your side!
What will happen when the China bubble deflates?
The oceans will rise, all those tears.
Here in Tucson, the serial bottom callers came out with yet another prediction:
Fiserv analysis sees local uptick of 16.6% in year thereafter
Housing prices may hit low by 3rd quarter
You’ll love the comments after the story. Here’s one that’s directed at a wannabe home buyer:
“Banks have been playing the delay game in hopes the market will improve. They do that based on the advice in an article like this. Most analysts did not call the housing top, and it’s highly unlikely they can call the bottom. Time is on your side, not the bank.”
There was an article quote on AZCentral two weeks ago about how metro-Phoenix will be in a housing shortage come March. They actually quoted a real estate “professional” saying that.
“Hello, McFly, HELLO”
You’ll see. Just wait til the Souper Bowl…
Nonsense.
The only recovery in Phoenix is due to many homes being off the market at the same time that more buyers are jumping in because of the constant media bandwagon.
RAL is also correct - Canadians are in the market full force - once it’s April again, the market will be deader than a bluegrass plot in the desert.
Another thing these stories fail to note is the number of home sale attempts that have failed. I can point to three among the houses whose properties border or are very close to mine. I’ll bet that similar stories are playing out elsewhere.
> The upswing in the market will surprise many because it
> comes less than five months after the region’s existing-home
> prices fell to their lowest level since 1999.
By definition, doesn’t the recovery start immediately after the bottom is reached?
I guess it depends on your definition of ‘immediately’ and on how flat the bottom is….
Home prices drop, consumers turn gloomier
By Leah Schnurr
NEW YORK | Tue Jan 31, 2012 5:07pm EST
NEW YORK (Reuters) - Home prices fell more steeply than expected in November, and consumers turned less optimistic in January, highlighting the hurdles still facing the bumpy economic recovery
“We are braced for a more bumpy picture over the next few months. A lot of expectations probably ran away or got a little too lofty coming into the end of the year,” said Sean Incremona, economist at 4Cast Ltd in New York.
Last week, the Obama administration took steps to head off a new foreclosure crisis but critics and even some supporters said it was unlikely to prove much more successful than other government programs to date.
Some Federal Reserve officials have said the central bank should consider buying more mortgage-backed securities to help boost the struggling sector, though some economists question how effective that would be with borrowing costs already so low.
http://www.reuters.com/article/2012/01/31/us-usa-economy-idUSTRE7BM0AB20120131 - 103k
Never trust a realtor. EVER. Realtors Are Liars®
Eyes learned as youngster: Avoid cult$, Leader$ & $taff $upport too.
That didn’t stop you from worshiping Obama. BAM!
Sorry I couldn’t pass up…….
Still shipwrecked on the Island of Partisan Stupidity eh butters?
Pot, meet Kettle……
And you’re still not paying attention.
Oh, but of course, not you!
Yeppers, VOTED for lil’ Opie
12-31-2011 Result in Iraq = 0 US troop$
Missed Mc$ame’s “100+ year$ deployment$” / Cheney-$hrub $hadow Legacie$ by that much [.]
Happy Camper eyes am indeed!
jib-jab / ping-pong / teeter-totter
BAM!
Ha, you & TruePal$, the young repubicans, always with the War / violence idea$ kinda just flow$/ooze$ outta of ya don’t it.
(Gander at Newsweeks cover of Rammey & New Twit as sword swing’in Gladiators)
Either great minds think alike, or somebody was inspired by my recent post about the likeness of the Republican primaries to the Roman gladiator pits. Either way, SCORE!!!!
Well well well, China gets a taste of International “Hey, there’s a target on our backs, how come?”
(eyes like the way the Russian’s solved a similar problem in Iran years ago, kidnap a relative in return, cut off x1 ear, send it to their group leader with a kind note asking for the abductees immediate release + no diplomats + no monie$)
Filed under: “Oil Oil, Toil & Trouble$!”
“China’s concern grows over 29 abducted in Sudan
China summons Sudanese diplomat over 29 abducted workers in sign of growing concern”:
Associated Press / 1-31-2012
BEIJING (AP) — China’s Foreign Ministry on Tuesday summoned a leading Sudanese diplomat to express “deep shock” over the abduction of 29 Chinese workers after an attack in a volatile region of the country.
The move comes three days after they were taken by militants in the South Kordofan region.
“The Chinese government attaches great importance to protecting overseas Chinese nationals. We felt deep shock over this abduction incident and are deeply concerned over the safety of the 29 Chinese,”
China hopes Sudan will “keep in mind the overall situation of bilateral friendship” and ensure their swift release,
Separately, the official Xinhua News Agency reported that 25 Chinese working for a cement factory in Egypt were taken hostage by local residents in the northern Sinai town of Arish.
Xinhua quoted an official from the Chinese Embassy in Cairo as saying the 25 were on the way to their plant when their bus were stopped.
The summons of the Sudanese diplomat comes after China sent a group of security experts to assist in the rescue work. China has close political and economic relations with Sudan centering on exchanging Chinese infrastructure projects for access to Sudanese oil.
China has sent large numbers of workers to potentially unstable regions such as Sudan. Last year it was forced to send ships and planes to help with the emergency evacuation of 30,000 of its citizens from the fighting in Libya.
Maybe they should send in Seal Team 6…..Oh, wait they’re Americans….
I’m sure the US would consider it an act of war if China moved troops into Sudan.
Another high end store just closed in the “we think we are 5th avenue and 57th street in NYC” district near my apartment. This time it is across the street from the really snooty stuff. Jewelry store. Paper signs say they are “combining” with their Rockville store. I have never heard of a jewelry store closing right *before* Valentine’s Day. Isn’t that one of their big volume days? Maybe the owner was inflexible with the lease terms. The spot across the street which used to have Italian designer closed has been empty for months now, so losing a tenant might have been a bad idea.
There is no more discretionary purchase on earth than a rock that costs 100K and looks totally indistinguishable from one that costs 500 bucks. Jewelry is the most obvious/purest form of conspicuous consumption, and, in a recession, the absolute first thing to go.
I, for one, wouldn’t be sorry to see DeBeers go under.
“wouldn’t be sorry to see DeBeers go under.”
Is it wonderful that Debeer$ is unable to transfer their $upply manipulation$ / idea$ to say this industry: MEGABIGOIL + Goldenman$ucks $torage-R-U$ Inc.
Did we already hit peak diamonds?
In November 2011, the Oppenheimer family sold the entirety of their 40% stake in De Beers to Anglo American thereby increasing Anglo American’s ownership of the company to 85%.The transaction was worth $5.1 billion in cash and ended the Oppenheimers’ De Beers Dynasty’s 80-year ownership in the world’s largest diamond miner.
I wonder how much the run-up in gold prices has affected jewelry sales.
Romney appears to be the Wall Street anointed candidate in the national elections, similar to Meg Whitman’s position in the last California governor’s election. The Florida polls suggest that advertising was the decisive factor, and that is exactly what Wall Street backing buys a candidate.
I expect Romney to reciprocate the generous contributions from JP Morgan Chase & Co and Goldman Sachs employees by championing free-market (aka “Wild, Wild West”) capitalism, banking deregulation and an end to “class warfare.”
Romney Sees Surge in Wall Street Donations as Obama’s Decline
February 01, 2012, 7:59 AM EST
By Jonathan D. Salant
Feb. 1 (Bloomberg) — Mitt Romney’s investment background, criticized by some of his Republican presidential rivals, is helping him build a financial advantage over them.
In the fourth quarter last year, eight of the 10 biggest donors to Romney, co-founder of the Boston-based private equity fund Bain Capital LLC, worked for banks and investment funds, according to a Bloomberg News computer analysis of Federal Election Commission data released yesterday. Citigroup Inc. employees gave $196,600; those at JPMorgan Chase & Co. donated $180,518.
“Wall Street supports someone they consider one of their own and the candidate perceived to be the most committed to promoting policies they prefer,” said Costas Panagopoulos, director of the Center for Electoral Politics and Democracy at Fordham University in New York.
Romney’s Wall Street backers could also help him compete in the campaign money chase with President Barack Obama if the two meet in the general election.
Obama took in almost $16 million in donations from employees in the securities and investment industry and their families for the 2008 election, according to the Center for Responsive Politics, a Washington-based group that tracks political money.
Bankers Go Elsewhere
After Obama championed new regulations designed to curb abuses blamed for the worst economic downturn since the Great Depression, Wall Street put its money elsewhere.
JPMorgan, whose employees gave $23,494 to the incumbent in the last three months, was the only financial institution to appear on Obama’s top 10 list for the fourth quarter.
Goldman Sachs employees and their families have given close to a half-million dollars to Romney, his biggest source of campaign cash. Four years ago, Goldman employees gave $1 million to Obama, making them his biggest industry source of donations.
…
Incumbent’s advantage:
Obama does not need to kiss up to Wall Street banksters to buy teevee ad time.
Is there a way that this influence buying can be added to our GDP? We could use the boost.
Well, he won’t be using that money for ad buys in Europe.
It’s in the GDP. So are the Bernie Madoff’s returns and MF Global’s unaccounted 1.2 billions.
This is why GDP is such a useless measure………
Wall Street has been dragged into Republican primary politics.
Got popcorn?
Romney and Goldman Sachs
Article by: Associated Press
Updated: January 26, 2012 - 11:08 PM
His reliance on the fortunes of one donor was made possible by last year’s Supreme Court ruling.
The claim: “Gov. Romney owns shares, has an investment in Goldman Sachs, which is today foreclosing on Floridians. So maybe Gov. Romney, in the spirit of openness, should tell us how much money he’s made off of how many households that have been foreclosed by his investments.”
- Newt Gingrich
…
WOW! They really do eat their young!
I’ve recently heard newscasters refer to the Republican primaries as a “circular firing squad.”
It’s all the debates. Like a series of Survivor.
On certain parts of the blogosphere, the Republican slate of candidates is called the GOP Clown Car.
It isn’t Ronald Reagan’s Republican Party. Or Barry Goldwater’s Republican Party. Or Dwight Eisenhower’s Republican Party. Or Teddy Roosevelt’s Republican Party.
It’s Richard Nixon’s Republican Party, and it’s a shame.
The same kind of sliming that used to be thrown at Democrats is now being thrown early.
Hyperbole much?
Go back and look at any primary election and the bitterness surrounding top 2 campaigns is no different than ever before. Just 4 years ago, Obma campaigned blamed Clintons being racist. The R word was used to be reserved for republicans only. I was too young to follow Jimmy Carter and Teddy’s, but have read some nasty stuff.
Favorite moment in lil’ Opie verses Hillary
“All you Ohio Repubicans should register democrapt and vote for Hillary!”
Ra$h Limpbaugh$
aka: Mr. “I’m 99.85% right ALL-the-time-about-everything!”
Like anyone believes anything that comes out of Gingrich’s mouth. I dislike Romney, but Gingrich is repulsive.
I feel the same - about both of them.
Got popcorn?
Mr. Neil was quite generous is giving his recipe to all of here for free!
Neil’s All Natural Popcorn!
(mmmmmm, chew, chew … A left by Mitt, an uppercut by New Twit, go boyzzz go! …)
Josey Wales & a Looney Tune Theater too?
(sad to think this is happening just-as-America-the-Great-Nation-is-now-broke-&-ready-to-implode! + the U$ dollar as well, oh, my!)
Smithsonian honors Eastwood, opens theater on mall:
Associated PressBy BRETT ZONGKER | Associated Press – 4 hrs ago
WASHINGTON (AP) — The Smithsonian Institution is honoring Clint Eastwood for his six decades of work in American film, and the actor and director is cutting the ribbon to open a new theater to showcase film at the National Museum of American History.
On Wednesday, Eastwood will visit the museum to help dedicate the new Warner Bros. Theater as a new space to present the history of Hollywood. Warner Bros.
The 81-year-old Eastwood will be awarded the James Smithson Bicentennial Medal for his distinguished contributions.
Won’t be long before every building in the Smithsonian has a corp name, just like stadia. They tried to charge admission once; failed. They’ll probably succeed next time.
The Smithsonian is one of the greatest things about living in DC. I love it being free, too, because if you just want to go look at one thing, you don’t feel like you have to stay longer to get your money’s worth. That said, as a local, if they started to charge, I would get a membership and have a flat fee for the year. They would probably set up a member for a month or a week or whatever for tourists. The musuems could not handle actually charging for indivdual admissions because their lobbies are not set up to handle the lines that would create. They can barely process bag searches and people paying for Imax tickets. They would have to build secondary lobbies or require everyone go to an outdoor kiosk for tickets do have a serious program of paying for individual admissions.
Environmental Film Festival is next month. Love the long afternoons at Baird Auditorium in Natutral History. Hey, does anyone know if Baird was a naturalist, an important person in the founding of the museum or a big donor? Just because it isn’t a corporate name, doesn’t mean it isn’t about money.
Mr Cole is eagerly awaiting to spend 10 days in the “U$ Gov’t Hood” + museums this July, right after the Gettysburg shoot-out.
(He’s listed the U$ Mint & the Crimes & Punishments museums as must see’s. I’ve tried to convince him, to no avail, that there’s really no connection between those two subjects in America, these-a-day$. Then again, I’ve been wrong before.)
fingers crossed that.the.world.doesn’t.end!
I don’t think the DC Mint location has tours. You might want to check up on that. Crime and Punishment is not a Smithsonian Museum. Neither is the Spy Museum nor the Newseum. Not that they aren’t great musuems, but you can expect to pay a pretty penny to get in. Building Musuem is also not Smithsonian, but I like it - best gift shop ever. People over look National Geographic Explorers Hall too often. And I love the US Botanic Garden.
Tanks Ms. Polly, for all that info. eye’ll relay the information to the tour director! (age 10)
Post back any time if you have other questions. Like I said, the non-Smithsonian museums are fine, but you want to make sure you have time to see everything in one day, since coming back the next day for just an hour will cost you again, while that is a perfectly legit strategy for a Smithsonian place. And tell your planner that some of the Smithsonian museums have extended hours during the summer. Right now they all close at 5:30.
The transportation stuff in American History is very good. 10 year old is a going to want to catch at least one of the 3D films at Natural History too. Make sure to leave time for Air & Space. The rockets are just cool.
July is when the the Smithsonian Folklife festival is out on the Mall too. The themes are a little weird this year (traditionally they did a country, a state and “something else”). Look here:
http://www.festival.si.edu/#
It will be hot. Bring water bottles. Oh, and I think the Philadelphia Mint does have tours, so if you are going to be in PA anyway….
Oh, and I think the Philadelphia Mint does have tours, so if you are going to be in PA anyway….
I’ve taken this tour and recommend it.
Being among the 99%, I will most likely go for the candidate with grass-roots backing, rather than the one who is most indebted to the Wall Street and hedge fund elite.
I notice the Republican candidates are great arm-chair quarterbacks, trying their best to pin the blame for the dismal economic situation on Obama, and never once so far mentioning the Great Recession was already a roaring conflagration on George W. Bush’s watch a full year before Obama took office. I keep hearing empty promises to “take America back” without a single mention of what they would have done different than Obama. I guess they don’t want to risk confusing American voters by discussing actual policies they might have enacted had they been in Obama’s place.
Rich Patrons Are Major Source of Romney’s Cash
By NICHOLAS CONFESSORE and MICHAEL LUO
Published: January 31, 2012
Close to 60 corporations and wealthy individuals gave checks of $100,000 or more to a “super PAC” supporting Mitt Romney in the months leading up to the Iowa caucuses, according to documents released on Tuesday, underwriting a $17 million blitz of advertising that has swamped his Republican rivals in the early primary states.
President Obama reported raising some $39.9 million in the fourth quarter, not including money he raised for the Democratic National Committee or transfers to a joint fund-raising account with the party.
The filings to the Federal Election Commission, the first detailed look at a crucial source of support for Mr. Romney, showed his ability to win substantial backing from a small number of his party’s most influential and wealthy patrons, each contributing to the super PAC far more than the $2,500 check each could legally write to his campaign.
All told, the group, Restore Our Future, raised about $18 million from just 200 donors in the second half of 2011.
Millions of dollars came from financial industry executives, including Mr. Romney’s former colleagues at Bain Capital, who contributed a total of $750,000; senior executives at Goldman Sachs, who contributed $385,000; and some of the most prominent and politically active Republicans in the hedge fund world, three of whom gave $1 million each: Robert Mercer of Renaissance Technologies; Paul Singer of Elliott Management, and Julian Robertson of Tiger Management.
Harlan Crow, the Texas construction magnate, gave $300,000 personally and through his company. William Koch, whose brothers Charles and David are among the country’s most prominent backers of conservative causes, gave $1 million personally or through Oxbow Carbon, the energy company he founded. Members of the Walton family, founders of the Walmart chain, gave over $200,000, while Bob Perry — a wealthy home builder who has long been the top patron of Mr. Romney’s erstwhile rival, Gov. Rick Perry of Texas — chipped in $500,000 in early December.
But as Mr. Romney sailed to an overwhelming victory in Florida’s primary on Tuesday night, fund-raising documents filed by President Obama showed the kind of financial juggernaut he will face if he becomes his party’s nominee: Mr. Obama reported raising a total of $140 million in 2011, far eclipsing the $57 million Mr. Romney raised for his campaign for the year.
The figures underscored the deep divide between how each party’s presidential contenders are financing their early bids for the White House: Mr. Obama exploiting the well-oiled machinery of an incumbent with a powerful grass-roots apparatus and hundreds of “bundlers” gathering checks of up to $2,500 per person from friends and associates, and his Republican opponents relying far more heavily on independent groups empowered by court decisions that have made it easier for wealthy individuals and corporations to spend unlimited amounts of money to intervene directly in election contests.
…
Don’t you think an “It’s Bush’s Fault” platform by a Republican might confuse the herd just a tad?
Enlightening the voters about recent economic history would only work against the Republican candidates. Thus I expect them to never mention when the Great Recession started* during the runup to November 2012.
* December 2007, just before George W. Bush’s last year in office began.
I heard 60 seconds of Romney’s Florida victory speech in last night on the radio. He blamed our economic woes on Obama and his administration. I know Americans have a short &/or selective memory, but that was way over the top. His audience went along with it. WTH?
The late George Carlin was right. Idiot sheeples vote, believing they have a say.
delete the “in” edit boo boo.
Google 2 Santa Clauses Theory.
Thank you, butters. I am a recovered Republican. Now I stay home.
I use to think Carlin was over the top, but now I find myself agreeing with him.
“His audience went along with it. WTH?”
Redumbocrats
Or is it Redumblicans?
Or is it Redumblicans?
I’d be happy with:
Recrumblicans
crum·ble/ˈkrəmbəl/
Verb:
1. Break or fall apart into small fragments, esp. over a period of time as part of a proce$$ of deterioration.
TRICKle down eCONomic$:
Here ya go peons, $pread those crumb$ around amongst yourselves now.
So, yer bellies full yet? Well now, send yer sons & daughters on over to the recruiting office anywho, we’s got another War to $olve, post-haste!!!!
“Enlightening” is something to think about.
Does your light only shine on your opposing team? Did recent history stop November 2008? Did your guy change course or try to hold ‘er steady? If we take the response of the Federal Government for the past four years as one continuous vista, how does that support your analysis of what’s wrong?
“Enlightening the voters about recent economic history would only work against the Republican candidates.”
Let’s see:
“$hock & Awe!” War$ = 4+ Trillion$
Linda-the-Lunch-Lady-Live$-Lavi$hly = Blight on America’s economic blo$$om$
You’re right, that might help ‘em to get elected to be, yet again: “We’re-the-Decider’$”
Political contributions are akin to legal bribes IMHO. They should all be illegal.
If you want to run for office, do it on your own dime. Or the super-PACs should figure out something to do that earns money (NOT through donations).
So there is a meaningful difference between giving money to a super-PAC that supports a particular candidate and running a business inside a super-PAC so all the money it makes goes to support a particular candidate? How? And how does the super-PAC get the business in the first place? Does it buy it? With money? How does it get that money?
Political contributions are akin to legal bribes IMHO. They should all be illegal.
Political contributions are the only thing that keeps Israel safe in an increasingly dangerous middle-east. They control the congress, or they perish. Your loss of democratic freedom and liberty isn’t a concern.
Here’s an UK comment regarding that control:
PBS Frontline Black Money Pt 1 of 6
http://www.youtube.com/watch?v=65rYQEsXXwU
At 5.01-minutes are comments regarding the
Israel Lobby’s grip on Congress, which would
prevent U.S. fighter jets being sold to
Saudi Arabia in 1985.
“If you want to run for office, do it on your own dime.”
So then only the super-rich could afford to campaign? I’d prefer the best person for the job, regardless of personal wealth.
Only the rich run now.
I know. Just pointing out that banning super PACs isn’t going to cut it.
Mr. Obama exploiting the well-oiled machinery of an incumbent with a powerful grass-roots apparatus and hundreds of “bundlers” gathering checks of up to $2,500 per person from friends and associates
Oh, please. That’s why they are sending out portable credit card machines. The fleecing of American people in Taxes and campaign donations continues…..
Lester Appleton Young
David Pinocchio Lereah
Lying Larry (fun)Yun
Three hemmroids on the ass of society
I take it you are not a big fan of the Realty® profession?
RAL - Leslie Appleton Young.
LESTER
Wait a minute, Lester Young was a great sax player ( in the 40’s )
Yes, yes he was, cheers!
He was Prez, wasn’t he?
“Rich Patrons Are Major Source of
Romney’selection Cash”(Maybe she could have provided some more conculsive results, pas / oui?)
Queen of Mean: Leona Mindy Roberts Helmsley
Too Much Testosterone Linked to Inflated Ego: Study
Wed, Feb 01, 2012
TUESDAY, Jan. 31 (HealthDay News) — Testosterone makes people more self-centered and less cooperative, a finding that may explain why group decisions can be affected by dominant individuals, researchers report.
Their study included 34 females who had never met. The women were divided into 17 pairs and asked to complete a series of tasks designed to assess their levels of cooperation. The tests were conducted on two separate days. On one day both women received a testosterone supplement. On the other day, they were given a placebo.
As expected, cooperation helped the pairs perform much better on the tasks than when individuals worked alone. Cooperation was normal when the women received the placebo, but was much less common after the women received the testosterone supplement, the investigators found.
Increased levels of testosterone were associated with the women behaving egocentrically and deciding in favor of their own selection over their partner’s
I sincerely doubt the findings are applicable to men.
You, apparently, have never taken testosterone supplements. I have. And yes, they make you egocentric and less tolerant of other people, even in men.
And yes, they make you egocentric and less tolerant of other people, even in men
So you’re saying that taking them would have been good for my career??
Are you an ultimate fighter? If so, absolutely.
Also, perhaps if you’re a banker it might help as well. Basically, anything that requires a strongly anti-social personality.
Hmmm…. I had a “mass” eating away at my right nard. It was 80% of the testicle by the time I got the the thing removed last year.
Based on growth rate, the thing could have been there maybe a decade.
Maybe it wasn’t seeing the tech bubble from the inside, then seeing the massive, unsustainable debt growth that converted me to centrist from Republican… Hmmmm.
BTW, the form of cancer I had is 95% curable. I did some follow-up radiation in December and will get another round of tests in March. It is more likely I will die of something other than this cancer. But, the cancer has left me with a lower than normal testosterone level. I’m on a patch, but I don’t put one on every day. It is like $80 a month, even with insurance for testosterone supplement.
Are you familiar with the term TMI?
“It is like $80 a month, even with insurance for testosterone supplement.”
Go to a good “sports DR” who can write you for injectable testosterone. A 10ML bottle without insurance costs about 125 dollars, you’d need 1-2 1ML shots a month (assuming your body is making none at all).
In addition to being about 1/10th the cost, it’s also dramatically more effective than the patch.
Our medical system is so f-ed up. God forbid that people start taking testosterone to get muscular, we’ve got to introduce new drugs that are 1/5 as effective and 10X the cost to prevent that.
Our priorities are so screwed up in this country. If a drug makes you feel better and has absolutely no chance of killing you, that’s obviously schedule I (marijuana). If a drug is marginally effective and so toxic that a 10X overdose could kill you dead that’s obviously an over the counter drug (Tylenol).
A drug that’s so safe they can’t definitively say one person has died from it (testosterone) and wildly effective at making people look/feel better? Highly controlled, and NEVER for cosmetic purposes. Plastic surgery to have muscle implants, a radical procedure with long healing times and high risks? Totally “OTC”, if you can pay, then you can have it done.
Insanity in it’s finest. (Sorry for the OT).
A few Tylenol can also devastate a plague of cats.
Wow—I had no idea. I learn the most interesting tidbits on this blog!
Tylenol is some seriously toxic stuff.
They actually put it in pills (Percocet, for example) to keep you from “abusing it”. The idea is, if you take enough pills to feel good, you’ll die from the Tylenol. That makes it less controlled than the “pure” drug, which, because you won’t die if you take a lot (you’ll just feel good) is obviously much more dangerous.
The insanity in drug control laws knows no bounds.
Darrell-Glad to hear you’re ok.
Paging Jeff Saturday:
Jeff, do you happen to know the lyrics for “Zirpin’ USA” by the Beach Boyz?
Since it seems it’s currently all Romeny all the time on all news (wait doesn’t his investment company, Bain, own Clear Channel?) here’s another tasty tidbit:
———————————————————————————-
Romney: ‘I’m not concerned about the very poor’
Republican presidential candidate Mitt Romney said Wednesday that he’s “not concerned about the very poor” because they have an “ample safety net” and he’s focused instead on relieving the suffering of middle-class people hit hard by the bad economy.
http://www.seattletimes.nwsource.com/html/politics/2017387811_apusromney.html
———————————————————————————
Ample. Safety. Net. (”Why there are plenty of bridges and cardboard boxes for everyone!”)
Damn lucky duckies!
Not that I want to talk about “candidates”, but there is a level below destitute.
It’s “indebted”. Less than nothing. Freedom in a tent beats a soft bed in prison in many ways.
Been there, done that - right after I graduated from law school. Cash flow matters a lot. So does society’s perception of the way you acquired the debt.
“Cash flow matters a lot”
Been there too. It’s the bloody edge of disaster if that cash flow gets upset.
Cant forget all those HIGH priced $10 hr DJ’s who got fired at CC a few months back about 900 total peeps production news traffic all gone
Tell me about it! My beloved KXCI just landed one of the laid-off deejays from one of CC’s Tucson stations.
Their loss is our gain. And, speaking as a KXCI deejay-in-training, I hope that on my very best days, I’ll be half as good as Jennie G is on the air.
(”Why there are plenty of bridges and cardboard boxes for everyone!”)
“You betcha!”
Free $hasta folk$, just dwellers on the Thre$hold,… they have soooooooo much to $nicker about before they say their prayers and go to sleep each night.
(But least theys all gets to comfortable here in America, we should poke their CONfidence a little, and threaten to withdraw their much abu$ed mental health-care $ervice$ provided by us “ALWAY$-Truthful” IRS filing Citizen-taxpayer$, er, eyes mean … Gov’t fund$!)
(Eyes wonder how that “Lost Wages” fella with the 200# scrotum is fairin’ these days?)
Facebook will quietly fade away.
As the government continues the trend of “big brother” type actions on its people (unarguably the case), incessant posting of private matters such as where one went of who they were with or what they did etc will become increasingly “uncool” among private individuals. Facebook lacks the anonymity that is the basic nature of all that is the internet. The inherent human infatuation with nosiness and showing off publicly will give way to common sense (among the sharper sheeple) eventually. Facebook users will one day cancel in droves. Even the Brawndo-drinkers left will be on to a trendier or glitzier site in the end. The Facebook bubble has already popped.
But how many years did it take people to start figuring this out?
I think you are talking about a different group than what has become the target demographic. Your group may already be leaving but the people who don’t care about cool are there to stay unless something better for them comes along.
Thought I addressed the “Ow My B@llz!” crowd…?
If you think it’s bad now, wait until FB goes IPO and fresh beancounters pile on new ways to sell ads and sell info to make an extra buck to feed the bottomless stockholder maw.
FB can F itself.
Not too long ago, a friend was at the park with his toddler son.
Nearby, a couple of tweens were discussing Facebook. One asked the other if she had a Facebook account. Her reply: “No. Because it’s stupid.”
Tweens think the opposite sex is stupid, too.
Of course FB is stupid. Old people use it. I fully intend to imitate everything my kids do that I don’t like. I may end up wearing some horrible clothes or talking like an idiot, but I’ll do it to make it uncool.
LOL… Awesome, Al…
I agree the timeline feature should remain an option…i dont want people looking back at some of the stupid ignorant posts i made years ago…
It does have some good things, finding old Friends promoting your business…a friend is an autism therapist and has a radio show on sundays, she has her 5000 FB friends and a few hundred will turn in or download her show and she has gotten a few sponsors so she is actually is making a few bucks a week from her show……Not sure how she would have done it without FB.
And therein lies the biggest problem i have with FB, i need LOCAL friends if i want to promote zydeco music dj night, what good is 5000 friends if only 50 live anywhere near nyc. You cant find the local friends like you could on myspace.
And therein lies the biggest problem i have with FB, i need LOCAL friends if i want to promote zydeco music dj night, what good is 5000 friends if only 50 live anywhere near nyc. You cant find the local friends like you could on myspace.
You sure do! And wouldja mind posting a link to your zydeco videos? They are wonderful.
its on my handle…..I dont like the new youtube all the videos take up the whole page and very little for listener comments or to promote yourself……..I haven’t loaded any new videos….i have some to do soon, and some big names are coming to nyc so i can upload some really new stuff….I have 150+ in my favorites file you can start there.
Never happen.
Showing off is ingrained in our DNA as much as it is in the DNA of male peacocks.
I thought we went through this yesterday?
LOL @ Brawndo
IT’S WHAT PLANTS CRAVE!
Facebook lovers do not desire anonymity. They are on Facebook for the exposure.
“Get everybody on a foooo-ood card. Zirpin’ USA!!”
Tell Merkozy we’re Zirpin’, Zirpin’ USA!!!.
Monster Tubular Stagflation wave coming. Start paddling.
AMR plans to terminate pensions for 130,000 current and future retirees.
Layoffs announced this morning are about 13,000 active employees. Mitt Romney would be proud.
On a separate note EFH, the main supplier of electricity to the Texas market just posted a huge 1.9 billion loss. EFH was created by a 47 billion dollar leveraged deal that split the former TXU into several companies including Oncor(physical grid) TXU(retail electric) and a trading unit that bought billions of dollars of Nat. gas futures at prices well north of $9 mcf. Current Nat. gas prices are $2.41. The company’s bonds are signaling default in 9 to 18 months.
AMR plans to terminate pensions for 130,000 current and future retirees. Layoffs announced this morning are about 13,000 active employees. Mitt Romney would be proud.
I recently flew American Airlines to and from Philadelphia. I was amazed at how crummy their planes looked. They reminded me of the TWA planes I took to and from Cincy back in 2000. Recall that TWA wasn’t around for too much longer after that.
It may have been an old TWA plane. AA bought TWA back in 2001.
Blue i’m missing something here so they bought futures at $9 cant they just let it expire like any other option, or is it manditory they have to take delivery?
Futures are not options.
You sell the future, or you take delivery for full option price.
That $9 contract is still on the books at full value and the moment they expire the book value goes poof and you have a huge hole in the balance sheet.
So it was an option on a futures contract? In that case, it would expire as worthless. But why would they be carrying it on the books at purchase-price (what you called “full value”)?
It it were a futures contract rather than an option on futures, then it would mark-to-market every day; they definitely shouldn’t be carrying that at “full value”.
Still confused …. did they contract with a supplier for $9 to be delivered by say March 2012? then they are hosed But if it was a futures contract then it expires worthless…right?
GWB brought crony capitalism to the Texas power industry back in 1998. Texans now pay among the highest electricity rates in the country.
I’m gonna guess that Enron was somehow involved.
Of sure, let’s just forget all about all those green-shaded, dog-faced, critical number-crunching, in-your-face … Mega-AccountingInc. auditor$!
This Bush fellow haunts us all.
GWB brought crony capitalism to the Texas power industry back in 1998 Texans now pay among the highest electricity rates in the country.
Great. So now you’re telling us that something that Bush did in 1998 was Bush’s fault.
When will people finally stop blaming something Bush did on Bush, and take the responsibility themselves for the things they didn’t do?
+1 Rio
The Odd Couple: Romney Vs. Gingrich
How the GOP race became a showdown between a walking OCD diagnosis and a flatulent serial adulterer
By Matt Taibbi
January 30, 2012 11:00 AM ET
Mitt Romney and Newt Gingrich prior to the Southern Republican Leadership Conference Town Hall Debate.
PAUL J. RICHARDS/AFP/Getty Images
They may be sh!t for choosing a good candidate for the presidency, but say this for the Republican primaries: They’re fast turning into the most luridly entertaining political spectacle of our time. In an inherently conservative, bottomlessly moneyed, scrupulously stage-managed electoral system designed to preclude chance or weirdness from playing any part in determining our political future, the unthinkable is happening: real drama. This isn’t part of some clever but inscrutable master plan, put on by the hidden hands who run this country, to fool or distract the masses. This is an unscripted f**k-up of heroic dimensions, radiating downward from the highest levels of our society, playing out in real time for all of us to watch. Our oligarchy has thrown a rod.
If you’re not a conservative voter with a dog in this fight, watching Mitt Romney, Newt Gingrich, Rick Santorum, Ron Paul and whoever else is running for the GOP nomination this week try to hold on to front-runner status has been great slapstick, like watching a cruel experiment involving baboons, laughing gas and a forklift. No matter how many times you ring the bell, those poor animals are never going to figure out how to move that pallet of bananas – yet they keep trying, taking the sorry show from one state to the next, over and over, as if something is going to change.
…
Out of which orifice is Newt to be judged as flatulent?
I guess I don`t get a house because I only want one.
Real Time: Government rental program announced
8:55 AM Wednesday, February 1, 2012
Government rental program announced
by Kim Miller
The Federal Housing Finance Agency announced this morning its plan to allow investors to buy foreclosed homes in bulk and then turn them into rental properties.
The plan, first discussed in August, will begin in the nation’s hardest hit metropolitan areas. Although no specific areas were mentioned this morning, there may be more details in a speech President Obama is scheduled to give at 11 a.m.
“This is an important step toward increasing private investment in foreclosed properties to maximize value and stabilize communities,” said FHFA Acting Director Edward J. DeMarco. “I am grateful for the collaborative effort by the many stakeholders including investors, nonprofit organizations, and state and local government officials, who have worked together on this
Initiative.”
During the pilot phase, Fannie Mae will offer for sale pools of various types of assets, including rental properties, vacant properties and non-performing loans.
Investors will have to be pre-qualified to purchase the assets, proving they have experience and knowledge in financial and business matters as well as the financial wherewithal to acquire the assets.
http://www.palmbeachpost.com/ - 98k -
“Investors will have to be pre-qualified to purchase the assets, proving they have experience and knowledge in financial and business matters as well as the financial wherewithal to acquire the assets.”
Ordinary U.S. households, who are just interested in a house as a place to live in, need not apply.
“Investors will have to be pre-qualified to purchase the assets, proving they have experience and knowledge in financial and business matters as well as the financial wherewithal to acquire the assets.”
OTOH, this might cut down on the problem that someone recently pointed out on this-here HBB.
That problem would be in-VEST-ors buying SFRs to rent out while putting only 3% down and expecting a 7-10% ROI with a zero vacancy rate. Which is a tad unrealistic.
Foreclosures Draw Private Equity as U.S. Sells Homes: Mortgages
February 01, 2012, 8:46 AM EST
Jan. 31 (Bloomberg) — Private equity firms are jumping into distressed housing as the U.S. government plans to market 200,000 foreclosed homes as rentals to speed up the economic recovery.
GTIS Partners will spend $1 billion by 2016 acquiring single-family homes to manage as rentals, Thomas Shapiro, the fund’s founder said. That followed announcements this month that GI Partners, a Menlo Park private equity fund, expects to invest $1 billion, and Los Angeles-based Oaktree Capital Management LP will spend $450 million on similar housing.
“It’s a massive market,” Shapiro said in a telephone interview from New York. “We’re starting to see this as a billion dollar opportunity to buy rental housing.”
Increasing Rentals
Increasing rentals may reduce lenders’ losses on foreclosed and surrendered properties and curb declines in home prices
Public-Private Partnerships
The Federal Housing Administration, which also will participate in the rental program, had 32,170 real-estate owned homes seized from borrowers, also known as REOs, as of Dec. 31, according to spokesman Lemar Wooley.
Possible aspects of the program include public-private partnerships to share the risk and profits, “seller financing” guaranteed by the government and rent-to-own opportunities for tenants, according to a November memo
$1 Trillion Liquidations
About 7.5 million homes with a current market value of $1 trillion will be liquidated through foreclosures or other distressed sales by 2016, according to an Oct. 27 report by Chang. That will add to the estimated 20 million single-family homes already operated as rentals, which have yielded annual returns averaging 8.1 percent since 1990, Chang’s report said.
Rentals can produce cash flows, known as a capitalization rate or cap rate, that reduce losses more than reselling foreclosed homes at a time of weak demand, the Federal Reserve report said.
Rental Demand
Demand for rental housing helped boost shares of the 12- member Bloomberg Apartment Real Estate Investment Trust index 13 percent over the past 12 months compared with a 2.1 percent gain for the S&P 500 Index. It’s also attracting private equity funds to single-family homes, which historically have been an investment for small investors.
“This will be a new institutional asset class in the next 24 months,” Watson said.
Buying in Bulk
GTIS expects to buy homes in bulk from banks, Fannie Mae and Freddie Mac, Shapiro said. Properties will also be bought individually at courthouse auctions and through short sales, when lenders agree to sell for less than the balance of the mortgage, he said.
GTIS will start buying in cities in Nevada, Arizona and California — the states with the three highest foreclosure rates, according to RealtyTrac Inc. — and Florida, which RealtyTrac ranked seventh in December, Shapiro said.
http://www.businessweek.com/news/2012-01-31/foreclosures-draw-private-equity-as-u-s-sells-homes-mortgages.html - 69k -
“Public-Private Partnerships”
“Possible aspects of the program include public-private partnerships to share the risk and profits,”
The new American dream! To rent a house from a public-private partnership so the tax payer can take the risk and the Private equity firms can take the profits. This hope and change is fu#@$%g killing me!
GTIS will start buying in cities in Nevada, Arizona and California — the states with the three highest foreclosure rates, according to RealtyTrac Inc. — and Florida, which RealtyTrac ranked seventh in December, Shapiro said.
If they start buying in Tucson, I hope they’re aware that we already have a 16% rental vacancy rate.
“About 7.5 million homes with a current market value of $1 trillion will be liquidated through foreclosures or other distressed sales by 2016″
If the shadow inventory is only 1.6 million, how are they going to liquidate 7.5 million homes? Throw people out that are current on their mortgage? All right get out! We are going to liquidate your home whether you like it or not.
Unless of course thet are not telling the truth about the shadow inventory. Even if every other home for sale according to CoreLogic in Dec. is a foreclosure, that is still only 3.2 million not 7.5 million.
Shadow’ inventory of homes shrinking
December 23rd, 2011, 11:30 am
Santa Ana-based data giant CoreLogic reported this week that the “shadow inventory” of U.S. homes totaled 1.6 million in October, equal to roughly half of homes openly for sale.
http://lansner.ocregister.com/2011/12/23/shadow-inventory-of-homes-shrinking/156146/ - 86k -
This could actually be a good thing. It will finally force prices and demand to be in the open. There is a total number of homes in this country for which zero demand exists. This number is constantly debated and unknown at this time, but by forcing all these homes to be put on the rental market, at competitive prices, should show how much true demand exists. Let’s take the number of 120 million households in the US. But how many homes exist? 140 million? This would mean we have 20 million excess countrywide. (note - these numbers are just used to show the example). But we’ll never know the amount of excess inventory because they are bought as investment properties, second homes, etc. PE firms MUST rent the homes out, or they will lose money every month. This should also have the dual effect of reducing rents in AZ, CA, NV, FL, which will likley do two things:
1. Wipe out all the mom-n-pop speculators
2. Establish a true price floor in these markets for rentals, which should correlate roughly with prices.
Exsisting landlords ( maybe forced to rent out their home because they won’t give it away ) might get competition that forces them out? If these investors get a sweet deal they can lower rents and drive out competition for awhile at least
so more homes that don’t cash flow will go back to the bank
Unless of course thet are not telling the truth about the shadow inventory. Even if every other home for sale according to CoreLogic in Dec. is a foreclosure, that is still only 3.2 million not 7.5 million.
The Naked Capitalism blog recently estimated shadow inventory at 10 million. That’s a whole lotta houses, people.
so more homes that don’t cash flow will go back to the bank
Exactly… end result, the small-time investor gets wiped out and Wall St. gets it’s hands on more distressed property. Isnt’ FedGov intervention fun?
All Your Base Are Belong to Us!
“The Naked Capitalism blog recently estimated shadow inventory at 10 million. That’s a whole lotta houses, people.”
Comment by jeff saturday
2012-01-12 05:57:30
Monday, January 2, 2012
Michael Olenick:
Is Shadow Housing Inventory Vastly Larger Than Widely Believed?
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.]
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.
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.
PB
Thanks for the tip. Ordinary working stiffs that just want a home are losers. Deep money is what counts.
Speaking of deep pockets, today is the day California cut off redevelopement corporate welfare from the state. All the leeches are crying the blues.
Yay.
Unintended consequences. The government won’t allow house prices to adjust to equilibrium pre-bubble levels, and they won’t allow foreclosures to come on the market, driving up rental prices. There’s a mini-boom in multi-family building from what I gather because of increasing rents. Net effect of this? More rental units coming on the market from this new construction, plus in the future from the foreclosures, making buying that much less attractive, inciting the government to funnel that much more tax money to the FIRE sector and come up with yet more cockamamie schemes to buoy this asset’s price.
This is the basic problem with centrally planned markets. You can be the smartest golden retriever on the planet and you still can’t do calculus. You can be the most brilliant human on the planet and you still can’t manage the complexity of the market. If you try to centrally plan, you will get malinvestment and unintended consequences. The central planning is creating more and more cascading distortions.
Robert McNamara is not going to outwit the market. He might be smarter than the rest of us, but he’s nowhere near smart enough.
There’s a mini-boom in multi-family building from what I gather because of increasing rents.
Happening with student housing here in Tucson. The city council just okayed a 14-story apartment building just west of the University of Arizona. And there’s a 500-student complex going up right now.
Methinks that the student housing market is about to become even more glutted than it already is. And, sorry to say, student housing is a niche market. It’s hard to interest other age groups in these places.
Yet somehow the filthy rich connected people get made even more wealthy as a consequence with every poorly-executed, misguided, futile attempt to mainipulate the markets. Why is that???
‘Cause you never give a sucker a break, that’s why.
In other words, it’s all rigged and has been for decades.
+1 Neu
I am Jack’s raging bile duct.
The plan, first discussed in August, will begin in the nation’s hardest hit metropolitan areas.
Who wants to bet that foreclosures in NYC, SF, and other still bubbly cities will end up being sold to investors? They won’t be be satisfied with only buying up foreclosures in Detroit and Cleveland.
sfrenter, this is the sort of thing I was anticipating the politicians would try and do pre-election. They appreciate that people are getting squeezed with high house prices (regardless of breathless NAR propaganda - prices around here are nowhere near pre-bubble) and low inventory, and rapidly growing rents as people bail out of their houses into rentals.
Politicians want to pressure people to buy, but if they turn the heat up too much, they’re going to cause a higher misery index as people get poorer, regardless of trickle-down (aka concentrate-the-wealth) theory. Which will hurt their reelection bids.
Best of luck with your purchasing efforts of course, but if they actually implement this in any real way well before the election, it could ease the pressure on renters.
“They won’t be be satisfied with only buying up foreclosures in Detroit and Cleveland.”
In SE Florida the houses in less desirable neighborhoods have been the only ones that have been put on the market and sold at pre-bubble prices. Prices in decent middle class neighborhoods have been kept artificially high by allowing people to stay in the homes for 3 years plus without paying. They are everywhere, maybe this was part of the plan. Save the decent houses in the decent neighborhoods for the politically well connected investors.
And furnish them with Section-8 subsidized customers.
Money talks; BS walks.
Jan. 31, 2012, 7:25 p.m. EST · CORRECTED
Fed heads reflect America’s wealth gap
Wide wealth gap revealed between regional presidents
By Greg Robb, MarketWatch
An earlier version of this report misstated the name of the Cleveland Federal Reserve Bank president. The report has been corrected.
WASHINGTON (MarketWatch) — It turns out the Federal Reserve is lot like America.
The Fed’s 12 district-bank presidents on Tuesday disclosed their assets in 2010, and lo and behold there’s a wide gap between the few very rich presidents and the others — not exactly like the gap between the so-called 1% and the 99%, but close.
There are nine presidents who could be called members of the middle class: James Bullard, the president of the St. Louis Fed; Charles Evans, the president of the Chicago Fed; Esther George, the new president of the Kansas City Fed Bank; Narayana Kocherlakota of the Minneapolis Fed; Jeffrey Lacker of the Richmond Fed; Sandy Pianalto of the Cleveland Fed; Charles Plosser of the Philadelphia Fed; Eric Rosengren of the Boston Fed; and John Williams of the San Francisco Fed.
Many of the Fed’s middle class were professors prior to joining the central bank. Several listed retirement-savings programs for university faculty as their main assets.
The fat cats on the Fed are Richard Fisher, the president of the Dallas Fed; William Dudley of the New York Fed; and Dennis Lockhart of the Atlanta Fed.
All three had close ties to Wall Street previously in their careers.
…
Still, even with this remarkable finding, eyes myself am quite impre$$ed with how ALL of them as a co-operative Group/Committee, have ma$tered the exqui$ite nuance$ & mega-Comprehension$ required to $ubtly produce such large numbers with the exact correct placement of all those comma’$
It’s awe in$piring actually!
Gee, I’m sorry I wasn’t around to reply to the most stupid remarks I have seen on this blog in some time. But, I am back online today and had to respond to some of the most confused thinking on “money” vs. Wealth I have seen in my lifetime. Of course, I will include the personal comments at the lead of this tome so we can understand MY mental state of health as seen from a workings of a more clearly deranged mind:
[That sense of attack you are feeling is known as cognative dissonance, “the feeling of uncomfortable tension which comes from holding two conflicting thoughts in the mind at the same time.”
Not attacking you, just pointing out inaccuriies in your, clearly strongly held, beliefs.]
The fact that my ideas conflict with yours doesn’t immediately imply that mine are incorrect and yours are correct and therefore, I am of two minds. You are clearly more confused. Money is a general term used for many definitions. Often cited as a “store of wealth”, “a medium of exchange”, a form of payment, and most often as “currency”, in the sense of FIAT paper money, used to represent value of exchanges.
My VIEW of money is about WEALTH. It is about ANYTHING that can be exchanged for goods and services, so in my world, OWNED real estate and commodities are MONEY. Gold is money. Silver is Money. My used bicycle is Money. I can Sell them, or I can trade them for other things.
They have real “value”, which is the purpose of currency, a medium of exchange for things of value. Your comments that:
[Money is borrowed into existance and is a measure of other peoples’ debt.
It is impossible for everyone to spend less than they earn, accumulating money. The only way someone could sell more than they buy, is if someone else is buying more than they sell.]
Shows clearly your limited thinking about wealth and money.
With you, it’s always about passing around currency, and supposedly creating “wealth” in the process. As long as currency is changing hands, then wealth and economic activity is ongoing, making the world better off. You are clearly wrong from the basis of anyone with a clear thinking and logical mind.
[We have been funding our international trade deficts and widening wealth disparity on unsustainable private sector debt growth. When the private sector maxed on debt, we either allowed the economy to collapse, or have the government step up as borrower of last resort to keep the unsustainable economy going a few more years.
Your claims that the government deficits are a spending problem, fly in the face of a detailed analysis of the budget and a study of other countries attempting to correct their deficits via spending cuts. The underlying problems causing the deficits ibn all of these coutnries are the trade imbalances of international trade deficits and widening wealth disparities.]
You are clearly trying to make statements you can’t support. Look at Japan. They are trying it your way. They now have 20 years of government “spending” and 230% GDP DEBT. Of course, when CREDIT is extended beyond people’s ability to pay then you have UNPAID DEBTS and a collapse of the current trend of spending and “growth”. You even admit that it’s UNSUSTAINABLE. Do you even know what that means? If its UNSUSTAINABLE, then it can’t go on and needs to be halted. By the way, CREDIT, is another form of DEBT often confused with money. CREDIT is Borrowed into existence and treated as a form of value. If it’s defaulted then it’s value is immediately discounted and we see it was falsely valued. I don’t know what “Detailed Analysis” you claim makes Keynesian philosophy sustainable, workable, or even provable. Every attempt has failed. When it does, it’s proponents have always made the same defense: It wasn’t Big enough, long enough, fast enough. Never that it hasn’t worked, which it hasn’t.
[Unless the objective is to triger a depression, before we can stop the federal government deficits, we must first directly attack and reverse the trade imbalances that created the need for unsustainable debt in the first place.
Reagonomics has been a disaster, increasing debt at 3x the sustainable rate for 30 years. We have increased each household’s share of total debt from 2.8x median income to 6.5x median income. The reason the economy refuses to respond to stimulus of massive deficits and 0% interest rates is that we’re maxed on debt. The econmoy of the last 30 years has been based on unsustainable debt growth, and outside of the federal government, we’ve reached the max supportable debt load.
Now, I’m sorry that you are uncomfortable with these truths, but please consider them attacks on your incorrect beliefs and not you personally.]
This is even more confusing. The whole problem is GOVERNMENT Debts.
Households will either default, resulting in more losses to companies and individuals, or they will cut back on spending to work off the debts.
Then they can balance current receipts with intended spending. Companies can and should go broke and be absorbed by other businesses.
But, just to conclude with a simple explanation of how “wealth” is money and not vice versa, let me use a SIMPLE example of how money is created by NOT PRINTING. In my most recent job, I worked for a manufacturing company for a number of years. We took raw materials and with the processes we created, made them into useable products that we stored in a warehouse until we sold them (exchanged them for currency to trade with others for products/services).
Did we create wealth? Did we STORE wealth?
We’ll, in fact, the government agencies say we did. The even required us to send in TAX on the value of the items stored in the warehouse.
Why? Because we had added value to the ourselves and the community, which while not yet “spent” was in our possession, and therefore we were wealthier now than we were before……so, please pay a tax on the added value.
To avoid having excess inventory, occasionally, we would destroy old inventory, so we cut “write if off” as a loss.
Likewise, if a farmer grows corn from seed, he is wealthier than when he had bags of seed. He can “Save” the corn in a silo and distribute as he sees fit. He has created “MONEY”, without creating debt. He can exchange his “money” for other “money” or other goods.
This is how REAL WEALTH is created.
In your world, everything is about FIAT dollars and the FORCED exchange of dollars. You want to Force people to “spend” their dollars even if it is not in their best interest to “stimulate” the spending for the greater good.
In a FREE economy, where people make exchanges based on free decisions of individuals, COST and PRICE continually go down as competition creates cheaper and more effective ways to produce products. The electronics boom is an example. Mass farming is another.
PAPER PRINTING dollars and injecting them into the economy, beyond what was produced causes “inflation”, what the FED wants. It is a form of robbery of the producers, by making the “value” of their “money” worth less. It makes the PRICE of their commodities, GOLD, silver, Oil, CORN, go UP. (Not their utility or “worth” or “value”, just the PRICE).
Government interference with the markets only creates distortions. Just as the FED’s control of interest rates and lending standards created the mess we are in.
I don’t suffer any delusions. The Federal Reserve is a gang of Government sponsored Counterfeiters who have the special privilege of passing “money” to their friends. Their creation of “money” in the form of dollars creates no wealth, whatsoever, but helps create a gang of Banksters who steal the wealth of others. Nothing more. Nothing less.
All fiat currencies die. Not a single one ever created has survived.
You however, are under the delusion that our trade deficit is our major problem. I would agree that killing our manufacturing has been a big problem. We don’t have free trade or fair trade. But this is another issue. Spending less always means a SLOWDOWN in the economy or a “recession”. There is NO CURE for this when everyone is overspent. So, yes, people will have to live on LESS. How horrible. We agree it’s UNSUSTAINABLE, so how is government spending going to make it sustainable. Any person with a brain can see there is no “MAGIC” in printing money. It simply gives the delusion that the game can be sustained, even if only for a little while longer.
THAT is “cognitive dissonance”. Paul Krugman is the posterboy.
It wasn’t Big enough, long enough, fast enough
Man, if I had a dollar for every time I heard that….
“That’s what she said”
Michael Scott from ‘The Office”
Now you’re talking Real Money.
I want my turn:
Wealth is goods and services that have a value, which varies for each individual but can be more or less defined by markets. The easiest tool to measure value is money.
Money has no inherent value. Its value lies with its ability to be traded for wealth, and the increased ease of completing transactions. Trust is required for money to function.
Net savings must be 0 amongst all who interact financially (which is a lot in our global economy). Savings are important because they allow people to time their spending independantly from their earning. Savings can take the form of money or physical wealth.
When one takes on excessive debt, both the lender and the debtor have a problem and can cause economic disruption. Controlling debt levels are important, but not easily done. Individual responsibility combined with guidance from government* is the best way.
When there are borders between debtor and lender, we call it a trade deficit. Increasing barriers to trade can limit this form of excessive debt only, not internal excessive debt. Any barrier to trade will have both a benefit and a cost.
* Government needs to walk a fine line between guidance (via rules, regulations and information) and interference.
I just saw a 60 Minutes episode on coal ash waste. Wow!! This is what happens when there are no regulations!
Greedy business owners will gut the earth and sell it to the highest bidder if left alone.
http://beyondcoal.org/dirtytruth/coal-ash
I often wonder if they are printing money fast enough to make up for the fall in RE
I think no so far so its still deflationary
they really are not printing money just loaning it out at 0% which encourages money creation. But if a loan gets refinanced doesn’t that cause a lower future income stream for someone else ?
someone else is probably my future social security
so plan accordingly
I good ruckus debate. Haven’t had one in a long time. Let’s do this.
“Money is a general term used for many definitions. Often cited as a “store of wealth”, “a medium of exchange”, a form of payment, and most often as “currency”, in the sense of FIAT paper money, used to represent value of exchanges.”
The medium of exchange is the important factor. Once upon a time, people would walk into a frontier trading post with a stack of pelts or sack of gold and exchange them directly for other things. Pelts and gold served as a direct medium of exchange.
Well, barter died a long time ago.
Even in those days of 1700s, 1800s barter currency, the majority of money was borrowed into existence. A miner may deposit his gold into a bank, but the moment we allowed the bank to make a loan against that gold, the gold was promised to two people. This is why there were booms and busts, bank runs and depressions, long before we fully left the barter currency concept of money in the dust.
“My VIEW of money is about WEALTH. It is about ANYTHING that can be exchanged for goods and services, so in my world, OWNED real estate and commodities are MONEY.”
Into what store do I take my house to exchange it for goods and services. Answer, none. I sell the house for money. I can then take the money to a store.
“Gold is money. Silver is Money.”
In what country is it common to carry gold and silver into a store and exchange it directly for goods and services. NONE.
Gold and silver at no longer medium of exchange. In our modern economy, they are not money.
I am sorry, but in this exchange, Bernanke has it correct.
http://www.youtube.com/watch?v=2NJnL10vZ1Y
5 mins in.
Is gold money? No. It is an asset. It is a store of value, but it is not money because it is no longer commonly, directly exchanged for goods and services.
“[Money is borrowed into existence and is a measure of other peoples’ debt.
It is impossible for everyone to spend less than they earn, accumulating money. The only way someone could sell more than they buy, is if someone else is buying more than they sell.]
Shows clearly your limited thinking about wealth and money.”
I walk into a bank, take out a loan, and walk out with some money. Have I created wealth?
Based on your definition of grouping all things of value into a single category, I guess so. You use the words “wealth” and “money” to be completely synonymous.
Well, in modern economic, they are NOT synonymous.
Wealth is stuff. Wealth is goods and services. Wealth is what you buy.
Walking into a bank and talking out a loan does not create wealth. It does not create more goods and services.
Walking into a bank and taking out a loan creates money, which can be used to buy stuff.
In modern economic terms, money and wealth are two very different things. Wealth is created through resources and labor. Money is borrowed into existence in exchange for a promise to repay.
“With you, it’s always about passing around currency, and supposedly creating “wealth” in the process. As long as currency is changing hands, then wealth and economic activity is ongoing, making the world better off. You are clearly wrong from the basis of anyone with a clear thinking and logical mind.”
Clearly wrong because I (and all modern economists) divide assets into two categories, stuff and IOUs?
[We have been funding our international trade deficits and widening wealth disparity on unsustainable private sector debt growth. When the private sector maxed on debt, we either allowed the economy to collapse, or have the government step up as borrower of last resort to keep the unsustainable economy going a few more years.
Your claims that the government deficits are a spending problem, fly in the face of a detailed analysis of the budget and a study of other countries attempting to correct their deficits via spending cuts. The underlying problems causing the deficits ibn all of these countries are the trade imbalances of international trade deficits and widening wealth disparities.]
“You are clearly trying to make statements you can’t support.”
Federal Reserve Z.1, table D3. Total debt 1980: $4T. Total debt 2011Q3: $38T.
Do the math. We have increased each household’s share of total debt from 2.8x household income to 6.5x household income.
I’m not attempting to be prescriptive (describing what I think should happen), simply descriptive (what has happened).
The Reagan boom, and out trade imbalance plagued economy of the last 30+ years has been based on unsustainable debt growth.
I hate it.
My hating it does not make it untrue.
“Look at Japan. They are trying it your way.”
It is not my way. It is Reagonimics way.
“They now have 20 years of government “spending” and 230% GDP DEBT.”
Ummmm. yeah. They too tried to create an economic boom based on debt, just like Reagonomics. Since there economy is so much smaller than ours, they hit the wall after 1 decade instead of the almost 3 decades it took us.
Again, it is not “my way”. It is what we have been doing for 30 years.
“By the way, CREDIT, is another form of DEBT often confused with money. CREDIT is Borrowed into existence and treated as a form of value.”
Credit and debt are the same thing. They create money. When the debt is not repaid and defaults, the money disappears. Since, all money is, in modern economic terms, is someone’s promise to repay. The promise to repay goes away, so does the money.
“The whole problem is GOVERNMENT Debts.”
Actually, government debt is $13T of the $38T total debt. Government debt is 1/3rd of the problem and private sector debt is 2/3rds of the problem.
“Households will either default, resulting in more losses to companies and individuals, or they will cut back on spending to work off the debts.”
Paradox of thrift. One person’s spending is another person’s income. If everyone slows spending, everyone suffers an equally slowing income.
People with debt can only repay that debt, if the people with money will first spend the money. And, by money, of course, I mean the borrowed into existence form of modern concept of money. I can’t take gold, silver or even old used bicycles into the bank as payment of my debt. I can only take those things that say “this note is legal tender for all debts public and private”. You know, money.
“Then they can balance current receipts with intended spending.”
This is only possible if we end our trade imbalances. If we continue to send money overseas in the form of trade deficits, and we continue to see those with money accumulating ever more, then it is impossible to balance spending and income.
“let me use a SIMPLE example of how money is created by NOT PRINTING. In my most recent job, I worked for a manufacturing company for a number of years. We took raw materials and with the processes we created, made them into usable products that we stored in a warehouse until we sold them (exchanged them for currency to trade with others for products/services).
Did we create wealth? Did we STORE wealth?”
Yes, but you did not create money. Your customers walked into a bank, borrowed some money into existence. They than came to you and purchased stuff in exchange for pieces of paper and bits in a computer that is called money.
They got stuff. You got money.
Now, they have debt. They go make stuff (wealth), and exchange it to you for money. Now they can take the money to the bank, pay off the debt, destroying both the money and the debt. The wealth remains.
“We’ll, in fact, the government agencies say we did. The even required us to send in TAX on the value of the items stored in the warehouse.
Why? Because we had added value to the ourselves and the community, which while not yet “spent” was in our possession, and therefore we were wealthier now than we were before……so, please pay a tax on the added value.
To avoid having excess inventory, occasionally, we would destroy old inventory, so we cut “write if off” as a loss.”
Why not send the goods to the government to pay the taxes instead of destroying the stuff. Oh, right. The government wanted money, not wealth. And the stuff in the warehouse is not money because it is not a medium of exchange.
“Likewise, if a farmer grows corn from seed, he is wealthier than when he had bags of seed. He can “Save” the corn in a silo and distribute as he sees fit. He has created “MONEY”, without creating debt.”
Into which store can he carry his bags of corn to exchange them directly for goods and services? Hint: none. First he has to sell his stuff (wealth) to get money (other peoples’ debt). Then he can exchange the money for other stuff (wealth).
“This is how REAL WEALTH is created.”
Yes, real wealth is created through resources and work. Which is why I say money is not wealth. Money is created when someone walks into a bank and borrows it into existence.
“In your world, everything is about FIAT dollars and the FORCED exchange of dollars.”
Because I live in a modern economy, not one where farmers carry bags of corn into a trading post and directly exchange it for a new plow.
“You want to Force people to “spend” their dollars even if it is not in their best interest to “stimulate” the spending for the greater good.”
I’m saying that the alternative is that people with debt will not be able to repay their debt, the debt will default and the money will poof out of existence.
I am not being prescriptive. It isn’t about what I want. It is about what is.
Let’s say there are 2 people on the planet.
You have corn. I have none. I say, I’ll give you corn in the future if you give me corn today. I give you a piece of paper that we call money in exchange for the corn. The next day, I bring you corn and ask for the paper back. You say no thinks, because you don’t want to spend the paper.
Now, let’s add interest. The paper pays 1 corn per year interest. At the end of the first year I bring you 2 corn, 1 to repay the debt and 1 for the interest. You don’t want to buy my corn for the money because you like the interest. I can’t pay the interest. So, you loan me another corn, in exchange for another money. You than accept this borrowed corn for the interest. Now I owe you 2 money.
Next year I owe you 4, then 8, then 16, then 32, then 64, then 128….
Then I say, forget it. Since you won’t buy my corn for the money, I can’t pay you back. I’m not even going to try anymore. Poof, your money no longer has value.
“I don’t suffer any delusions.”
Just a fundamental misunderstanding between the differnces between money and wealth.
“All fiat currencies die. Not a single one ever created has survived.”
Since every single country in the world is on a fiat currency, I say that the evidence is that all non-fiat currencies have also died.
“You however, are under the delusion that our trade deficit is our major problem.”
It is not a delusion. It is a higher level of understanding.
You are focused on the macro level of a single business or a single household.
If I make X a year, but spend X+Y, I go Y further into debt. I can reduce my spending to X-Y without effecting my income. This allows me to pay back Y amount of debt or save Y amount in a bank.
On the macro level, everyone’s spending is someone else’s income. If everyone slows spending, everyone loses income.
Over the last 30 years, we imported a lot of goods in exchange for lots of borrowed into existence money. This was possible only because we were able to borrow a lot of money into existence.
Over the last 30 years, a relatively small portion of the population accumulated a lot of money. This was only possible because a large portion of the population was borrowing a lot of money into existence.
$34T borrowed into existence, as demonstrated by the Federal Reserve Z.1, D3, debt outstanding. $34T used to by imports and allow a lot of money accumulation into few hands.
“I would agree that killing our manufacturing has been a big problem. We don’t have free trade or fair trade. But this is another issue. Spending less always means a SLOWDOWN in the economy or a “recession”. There is NO CURE for this when everyone is overspent. So, yes, people will have to live on LESS. How horrible.”
Living on less means earning less, meaning less money to pay back our debts.
This is why austerity is failing all over Europe. Governments cut spending, the trade imbalances that created the problems in the first place still exist, money flows out of circulation, the economy slows, there is less money to pay on debt.
“We agree it’s UNSUSTAINABLE, so how is government spending going to make it sustainable.”
I’ve never said government spending is sustainable. In fact, quite the contrary.
I have repeatedly said that it is not. However, the government spending is a symptom of the deeper problem.
I have repeatedly used 2 analogies. A tire with a hole, a patient with a gun shot. I’ll use the patient this time.
The patient has gun shot wounds and blood is leaking out (trade imbalances draining money out of circulation). To replace the money that is leaking out, we used new debt/money creation. When the private sector maxed out on debt, the government stepped up as borrower of last resort to keep pumping in the new money that is draining out.
It is unsustainable to keep pumping new debt/money into the bleeding patient to keep the patient alive, and I’m not suggesting that be our solution. I’m simply saying that if we stop pumping blood into the patient while we still have the gun shot wounds, we will kill the patient (trigger cascade defaults into depression).
I think (and here is were I go descriptive) that we should fix the gun shot wounds before we stop pumping in the blood.
But, what are the gun shot wounds? Well, the gun shot wounds are what is generating record corporate profits and making the rich ever richer. They are international trade deficit and widening wealth disparity.
“Any person with a brain can see there is no “MAGIC” in printing money.”
There is short term, as Reagonomics showed. But long-term it is a dead-end.
“It simply gives the delusion that the game can be sustained, even if only for a little while longer. THAT is “cognitive dissonance”. Paul Krugman is the posterboy.”
Sorry, virtually everyone has the delusion that we can continue to run trade imbalances, domestic and foreign, without living on unsustainable debt growth.
The only way one entity can be selling more than they buy, accumulating money, is if someone else is buying more than they sell by borrowing money into existence.
We seem to agree that it is unsustainable. You are focused on “just stop borrowing”. I am focused on patching up the bullet wounds to stop the bleeding, THEN stop pumping in more blood.
Doesn’t Mauldin explain this with with a lot fewer words?
Something about an accounting identity that involves the increase in private debt, the increase in public debt and the trade deficit? Maybe the GDP cancels out on both sides? I think it comes down to Darrell’s point though. You can’t have the combined population of country save more than they spend (reduction of private debt), the combined governments of that country spend less than they take in (reduction of public debt) unless you also have a trade surplus. It is impossible by defininition.
I can’t reproduce his equation off the top of my head. I’m sure someone can.
GDP = private consumption + gross investment + government spending + (exports − imports),
Doesn’t Mauldin explain this with with a lot fewer words?
All I know is that I’d like more money because I’d like more wealth, but I’m not going to spend most of my remaining real wealth for more money.
Thanks, Dio
Much needed retort to an endless rant.
The rant won’t end until we stop feeding it.
Hey now, think eyes will haves a drinks to me-self.
A friend actually acted on my suggestion and traded in her Ford Exploder and drove home last night in a new JEEP Wrangler!
All aboard Amtrak!
America on the move …
Watch out for that high center of gravity.
Welcome to 12mpg.
Well, you can try and push the snow with 3″ of clearance in you waxed Hyundai to get home, or you can ride over it with 8″ & x4 wheel drive…12 mpg is a point that one could argue with pa$$ion, I agree.
(The devil is in the details, or what the ambient air temperature is…)
I sure-as-hell wouldn’t have done it but thanks for increasing the sluggish velocity of money! -
Ha,
All marriages are not creations of de$ign, right?
Or do you know something that is a new form of “Constancy” between Humans & the Big Bang?
I bet this doesn’t work out they way they would like it to. From the presidents big plan
“The administration would encourage borrowers to apply their savings directly toward lowering the principle of their loans instead of reducing their monthly payments. As an incentive, borrowers who choose to rebuild equity would not have to pay closing costs and would have to agree to refinance into a loan with a 20 year term or less with monthly payments roughly equal to those they make under their current loan. “
Methinks that this latest plan, if implemented, will lead to even more people walking away from their houses. But, hey, that’s just me.
Yea it look’s bad RE wise
so today our CEO will anounce his resignation after cashing out millions in stock options
that ain’t working that’s the way you do it sell your stock options for millions and find another company and repeat
Save the remnant of home debtors who really can afford their overpriced houses. Keep them paying, for now. Let anyone who is behind drown. Triage.
The continued drownings will drag the market down further. Rinse and repeat. Bill the taxpayer.
Yesterday: “It is wrong for anybody to suggest that the only option for struggling, responsible homeowners is to sit and wait for the housing market to hit bottom,” Mr. Obama said to applause at a community center here.
No mention of struggling, responsible renters or first-time home owners. The double-speak blows my mind, and so few people really get it that any plan that keeps housing expensive will destroy what’s left of the middle class.
I Could have told them that was going to happenn…
South Carolina Fund Gets No Gain Paying Big Fees, Treasurer Says
Feb. 1 (Bloomberg) — South Carolina’s $26 billion pension fund paid excessive fees while trailing peers after an overseer invested half the plan’s assets with hedge funds and private- equity firms, state Treasurer Curtis Loftis said.
The fund paid $343.6 million in investment-management fees, or 1.3 percent of assets last year, compared with 0.6 percent spent by the $54 billion Virginia Retirement System, Loftis said in the report. In 2005, the South Carolina fund’s comparable costs were about $22.4 million, or 0.9 percent of assets, according to Loftis
http://www.businessweek.com/news/2012-02-01/south-carolina-fund-gets-no-gain-paying-big-fees-treasurer-says.html
Wallstreet at work doing what it does best.
I read from the Milken report that CA has 5x as much pension debt as they do tax revenue. Is this true? If so, holly cow!!!
“”Some of the key findings in the report include:
By around 2012 or 2013, the three major state pensions’ total obligations will be more than five times as large as total state tax revenue.
Not only will California’s growing senior population depend on Medi-Cal and other state services, but public school enrollment is likely to rise in the coming years. The state can ill afford to fund pensions by cutting back on these services.
In 2009, the unfunded pension liabilities came out to $3,000 per working-age adult in the state. By 2014, they will triple to over $10,000 per working-age Californian.
Raising employee contributions alone will be less effective over time as the ratio of actively contributing members to benefit recipients continues to decrease.
Currently, the average state employee contributes to the system for 25 years, but will receive benefits for 26 years - and the number of benefit-receiving years is increasing as longevity improves.”"
Good thing they do not have to pay 30 years worth of pensions from a single year’s revenue.
The unfunded obligations of the US Government are somewhere around $61T. With $2T a year revenue, that is 30 year’s of income.
Each household’s share of those unfunded obligations is in the ‘hood of $535K.
ahh…. I knew there was a clear explanation.
The global economic recovery is marching full steam ahead without U.S. housing, throwing cold water on the false theories that there can be no economic recovery without a housing recovery and that QE3 is a necessary element for a U.S. economic recovery.
Feb. 1, 2012, 3:06 p.m. EST
U.S. stocks rise on global manufacturing data
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) — U.S. stocks rallied Wednesday, with the Dow industrials and S&P 500 positioned for their best day in nearly a month, lifted by overseas data and an expansion in U.S. manufacturing.
…
The global economic recovery marched full steam ahead because of $1.3T a year federal government money/debt creation and 0% interest rates for as far as the eye can see.
Facebook iPO….
865 million users.
$3.7 Billion revenue in the last year. So, 3700/865 = $4.28 per user per year. 36 cents per month, per user.
$1 Billion profit.
Oh, but if I heard correctly, 1/4 of that is free cashflow and the rest is continued development of capitol.
$75B to $100B?
I wasn’t able to hear the rest clearly. The wanted to raise $5B in the first round of financing, but I didn’t understand if that is for 1/10th or 1/15th of the company.
They expect whatever the first day’s price closes will be $75-$100B, meaning a 75-100 P/E.
What, do they think this is 1999?
Oh, but this is the NEW, new economy.
Not with a 30-foot pole.
OMG. Sometimes reality too improbable to be real.
Facebook is requesting the symbol… drumroll…….. FB.
We all know what an FB is, right?
Someone that buys a stock that makes 36 cents per customer per month…
1/2 of women who become engaged change their relationship status to engaged within 2 hours.
Advertisers used to dream of know that shet, now they can market directly. Worth gold.
That is the one piece of personal information that really isn’t worth much. Women who are planning weddings buy bridal magazines and go to wedding planning websites and google stuff needed to plan a wedding. You can target that audience easily without any help from Facebook.
Facebook is requesting the symbol… drumroll…….. FB.
I’ve been wondering if that would happen!
Great housing bubble experience today—
In my office, teamster walks in and wants to be on site after 330pm(construction hours 7-330pm) to haul out his trailers after delivering structural steel all day. I snapped at him for being in the wrong trailer and barked that we’re not gonna hang around after hours so he can save his boss the cost of coming back tomorrow. Oddly he took it hard so I figured I’d redeem myself and make it right…. well…. that’s all it took for him to unload his tales woe.
First thing out of his mouth: I haven’t made a mortgage payment in almost 2 years
Me: Wow. When did you buy your house?
Him: 1986.
Me: It should have been paid off by now.
Him: I cashed out equity and bought a two family with girlfriend. Two family is in girlfriends name and she left. She’s sinking too.
Me: Holy sufferin’ shit. Who’s the mortgage with?
Him: SkankOfAmerica.
Me: Good luck brother.
It seems SkankOfAmerica is involved with this debacle waaaay deep. Skank owes a house I’ve been interested in and it’s been sitting empty for 2.5 years. All winterized, not vandalized, etc. The company is a complete disaster. They’re a radioactive, toxic turd.
Anyways I’m sympathetic to the guy. He’s 59, looks like 79, health problems, a financial disaster. I don’t need that misery.
Anyways I’m sympathetic to the guy. He’s 59, looks like 79, health problems, a financial disaster. I don’t need that misery.
”
Lots of Americans are looking like your truck driver
He’s 59, looks like 79….Lots of Americans are looking like your truck driver…
That’s why I moved to Brazil, the humidity makes the face look smooth but my shoes get moldy and my knee still hurts sometimes.
(and it’s humid)
How does Tom Cruise do it? Seems cheaper to buy chick creams then move and get mugged.
Now these kids are from a neighborhood in Jupiter Fl. where the PTB have allowed prices to return to pre-bubble 1995 prices. Very close to a house where the Realtor told me a couple of weeks ago if I got the house at that price I would have done well. Problem is where they have allowed the prices to drop, you or your family stand a good chance of getting “murked”.
Jurors see graphic photo as trial starts for two accused in 2009 murder west of Boynton Beach
By Daphne Duret
Palm Beach Post Staff Writer
Posted: 1:50 p.m. Wednesday, Feb. 1, 2012
WEST PALM BEACH — Michael Culbreath said he had barely taken two puffs from his cigarette out on his balcony when he heard a commotion among the guests inside his apartment.
Culbreath told a jury Wednesday he went in to find his acquaintance Vladimir Valcourt, 23, arguing with Shanovia Mack, a then-16-year-old Jupiter girl Culbreath said he had never met before Valcourt brought her and some other friends to his house.
Over the noise Culbreath said he heard Mack repeat a threat over and over.
“She started yelling at him ‘I’m gonna get you murked’ and he would just mimic her saying the same thing,” Culbreath said, adding that “murk” was street slang for murder.
Prosecutors in the second-degree murder trial of Mack and her cousin Adrian Leebrent Hunter, also of Jupiter, told jurors this week that Hunter made good on Mack’s threat hours later on Sept. 6, 2009, killing Valcourt with a gunshot to the chest while he fought one of Valcourt’s friends.
http://www.palmbeachpost.com/news/crime/jurors-see-graphic-photo-as-trial-starts-for-2140961.html -
POLITICS
FEBRUARY 1, 2012
Romney, Paul Hold the Cards in Nevada
By ALEXANDRA BERZON And JANET HOOK
After the large and diverse battleground of Florida, the Republican presidential contest moves on Saturday to Nevada, a far smaller playing field where two candidates have been organizing for months.
WSJ’s Patrick O’Connor reports on Mitt Romney’s win in the Florida primary, plus the threat from Newt Gingrich in upcoming contests. Photo by Joe Raedle/Getty Images
Mitt Romney and Texas Rep. Ron Paul were the top two finishers in Nevada in the party’s 2008 presidential primary, and both have maintained their ties to the state and their campaign organizations. That makes Nevada ill-suited to providing rival candidates Newt Gingrich and Rick Santorum with the shot of political adrenaline they will need after Florida’s vote.
…
Goldberg: It’s a steel-cage match for Romney, Gingrich
By JONAH GOLDBERG
Updated 07:47 p.m., Tuesday, November 22, 2011
Whether the matchup between Newt Gingrich and Mitt Romney is the final bout on the GOP primary card is impossible to know. The whole season has been more like professional wrestling than boxing, with weird characters sporting implausible hair appearing out of nowhere to talk smack and explain why they are the greatest in the world. (I’m looking at you in particular, Mr. Trump.)
Still, let’s assume for the moment that it’s a Gingrich-Romney contest.
It’s quite a matchup. Romney has been brutalized for having too little personality, Gingrich for having way, way too much. Romney looks like the picture that comes with the frame. Gingrich looks like he should be ensconced in royal velvet as he gestures at you with a half-eaten turkey leg in one hand and a sloshing goblet of wine in the other. Romney seems terrified of fully committing to any idea. Gingrich speaks as if he just text-messaged with God.
Gingrich would have everyone believe he is the winner of the anti-Romney mantle not merely by default but by hard-won effort and a well-deserved reputation for conservative steadfastness. Many in the media, meanwhile, think that since Gingrich is taking the slot once held by Palin, Bachmann, Cain and Perry, he is a conservative of similar stripe. And many liberals think that since they hate him so much, he must be really right-wing. (They made the same mistake with Richard Nixon and George W. Bush, both of whom were far less ideologically conservative than their press clippings indicated.)
The reality is more complicated. For starters, it’s not altogether clear that Gingrich is that far to the right of Romney.
…
Obama’s latest housing initiative should provide the Republican candidates with fodder for attacking him, and Republican Congressmen with a election-season bank tax proposal to veto.
Obama Uses Housing as Foil to Romney’s ‘Hit Bottom’ Strategy
February 02, 2012, 12:23 AM EST
By Mike Dorning and Lorraine Woellert
(For more on the 2012 elections, see ELECT.)
Feb. 2 (Bloomberg) — President Barack Obama is escalating the fight over how to revive the housing market, a sector of the economy that has dragged down growth for six years running, eroded consumer confidence and wiped out $7 trillion in American wealth.
Opponents said the president’s plan, announced yesterday, was as much about politics as the policy goal of easing access to refinancing for homeowners with negative equity. It helps the White House frame differences with Republican presidential candidates and with Congress, which for two straight years has rejected a bank tax that he said would be used to finance the program.
“This housing crisis struck right at the heart of what it means to be middle class in America: our homes,” Obama said in a speech in the Washington suburb of Falls Church, Virginia. “We need to do everything in our power to repair the damage and make responsible families whole.”
Paul J. Miller, a bank analyst at FBR Capital Markets in Arlington, Virginia, said that while it doesn’t “have a prayer in hell of passing,” the proposal may help Obama score political points. A bank tax is “bad public policy, but it’s populism at its highest,” he said.
…
Best parts of this plan:
1) It won’t work as intended.
2) It is likely to run into Congressional Republican opposition.
3) It will provide Republican presidential candidates with plenty of great talking points.
4) Affordable rental housing FOR EVERYONE!!!!
Obama Plans Assistance for Rentals, Mortgage Refinancing
February 02, 2012, 12:17 AM EST
By Lorraine Woellert
(Updates with reaction starting in sixth paragraph.)
Feb. 1 (Bloomberg) — President Barack Obama announced a package of proposals designed to jolt the housing market, his latest effort to reignite the economy after four years of foreclosures and falling home prices.
“This housing crisis struck right at the heart of what it means to be middle class in America: our homes,” Obama said in a speech in the Washington suburb of Falls Church, Virginia. “We need to do everything in our power to repair the damage and make responsible families whole.”
The president said his plan would make it easier for homeowners to refinance their mortgages into current low interest rates, which are now below 4 percent. Borrowers, even those who owe more than their homes are worth, would be able to refinance into loans guaranteed by the Federal Housing Administration.
To pay for the program, Obama will ask Congress for a tax on financial companies with more than $50 billion in assets. Congress has refused to act on similar requests twice in the last two years.
“No more red tape, no more runaround from the banks,” Obama said. “A small fee on the largest financial institutions will make sure that it doesn’t add to the deficit.”
…
Proposed Mortgage Deal Said to Be Limited to Foreclosures
January 31, 2012, 5:09 AM EST
By Lorraine Woellert
(Updates with exclusions starting in third paragraph.)
Jan. 27 (Bloomberg) — A proposed multistate settlement to resolve probes of flawed foreclosure practices won’t release banks from criminal liability, according to a person briefed on the talks.
Any final agreement will be narrowly focused to release banks from claims related only to documentation errors and other so-called robo-signing conduct, said the person, who declined to be identified because the talks are ongoing.
U.S. regulators including the Federal Deposit Insurance Corp., Federal Reserve, Securities and Exchange Commission, Consumer Financial Protection Bureau and Department of Housing and Urban Development would be free to pursue cases related to securities fraud, loan origination and other practices, the person said.
Banks wouldn’t be released from tax or fair-lending claims. They also wouldn’t be freed from liability related to Merscorp Inc., a registry for real estate deeds and liens that acts as a proxy for banks that pool and sell mortgages.
Claims by state pension funds, including those related to their purchases of mortgage-backed securities, also wouldn’t be affected by a final settlement, the person said.
…
Dumb question of the day:
Has there been any other point in U.S. history when the government deliberately and openly intervened in the housing market to prop up home prices?
P.S. Big thank-you to drumminj for putting the 1-minute delay feature into the latest version of the Joshua Tree Extension. As one of those who is prone to posting more than once a minute, I really appreciate it.
P.S. Realtors® are liars.
P.S. Big thank-you to drumminj for putting the 1-minute delay feature into the latest version of the Joshua Tree Extension
A-hah, someone downloaded version 2.0.1, eh? Yeah, I’ve been meaning to do something about that for a while, and got burned by it a few times last week so I added that in quickly
Glad you find it useful.