Bits Bucket for March 14, 2012
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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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Canada’s housing market flirts with bubble
http://tinyurl.com/6mb7t25 (marketwatch)
“Defaulting Canadian borrowers continue to be responsible for repaying the full amount of the loan even in the case of foreclosure. In the U.S., lenders cannot recoup money from the homeowner beyond the property if borrowers decide to walk away from their home and mortgage loan.”
That’s right. In the US, banks not only don’t pursue deadbeat loan-defaulters, but they reward them with free housing for years and just recently are awarding taxpayer bailout cash rewards to irresponsible borrowers. Its differnent here.
n the US, banks not only don’t pursue deadbeat loan-defaulters
I have to say, the bitterness coming from many here regarding “deadbeats” and “loan-defaulters” is disturbing. It comes down to a decision regarding limited resources, a purely financial decision.
They rolled the dice and are dealing with circumstances as they see fit. You could have rolled the dice and played the game, win or lose… you didn’t. Getting upset because you think deadbeats are unfairly benefiting from a bad situation is a waste of time.
To quote Gordon Gecko in Wall St - Money Never Sleeps, “Don’t run when you lose, don’t whine when it hurts. It’s like the first grade, Jerry…nobody likes a crybaby.”
I can understand the frustration. A lot of people here prepared for the consequences of the bubble and instead are being stolen from to prop it up.
I can understand the frustration.
+1 Ditto!
It sounds like some are still in the “anger” phase of dealing with the housing bubble…
For myself, I’ve moved into acceptance. At this point, I have conceded to Ben Bernake: “Well played, sir.”
+1. When they propose to take MY money and give it to those who behaved less responsibly, that rankles.
Some of us just want a reasonably priced house with a garage to work on our car, etc. and instead we’re being forced to pay for the mistakes of those who are directly responsible for putting it out of reach.
Seeking justice != crybaby.
’some are still in the “anger” phase…I’ve moved into acceptance’
Some of us don’t know what the hell you are talking about.
Some of us don’t know what the hell you are talking about.
A reference to the Kübler-Ross model of grief as it relates to the outcome of the housing bubble to date. A response to Liz Pendens barely concealed anger towards defaulting borrowers, referenced in his post as “deadbeat loan-defaulters”.
It also applies to Carls post:
“A lot of people here prepared for the consequences of the bubble and instead are being stolen from to prop it up.”
It speaks of personal affront to the bailouts… again, anger that things aren’t working out the way we would like.
I’m past it, done. The Fed has managed to soften the blow of housing declines while re-inflating a stock bubble. I don’t get angry about it any more. I accept the game that is played and it’s outcome(s)… you can only piss into the wind so many times before you get tired of getting wet.
Buy a house, buy stocks, buy gold, buy guns. Whatever. Get on with your life and stop worrying about what demographic/voting bloc gets bailed out next.
‘I’m past it, done’ ‘Get on with your life’
Well pat yourself on the back and bask in your superiority!
You generalize about posters, derive your own interpretations from what gets typed on a blog. Some of us make money on this housing market. What phase of the Keebler Cookie is that?
Well pat yourself on the back and bask in your superiority!
Has nothing to do with feelings of superiority… sarcastic or not. Has everything to do with what I feel is a lack of progress by some on this blog (considering I’ve been reading and posting for years) in coming to grips with reality. Anger isn’t productive and it won’t change anything about the housing bubble in general or local housing markets in particular. Maybe I’ve read too much into some of the posts. Maybe that anger doesn’t exist. I’m certainly not saying they shouldn’t contribute to the blog, as spirited discussion and solid discourse are what this place is all about, at least to me.
Some of us make money on this housing market. What phase of the Keebler Cookie is that?
I think you’ve missed the point… sounds to me like you don’t have an emotional interest in the housing market, just a calculated financial one. You make money on managing the foreclosures. Do you get angry at “deadbeats” whose houses you have to clean up and take care of? Or do you look at it clinically, from a purely financial and possibly intellectual point of view?
I try to not get angry about anything. But yeah, some of these FBs should go to jail for what they do to these houses. I looked at one the other day that had almost been gutted top to bottom. Talk about anger! Look at the sharpie party story in yesterdays CA post. And keep in mind most of these houses are owned by the govt.
At the same time most of what we hear is boo-hoo, I was cheated! There’s a crowd that really needs to get on with their life, and don’t take the dishwasher, it belongs to uncle sam.
Some of us just want a reasonably priced house with a garage to work on our car, etc.
I don’t think anybody feels the pain of the lack of a garage more than me. I don’t even really mind what I don’t have in the trailer park, except for that.
I don’t think anybody feels the pain of the lack of a garage more than me.
Been living in a 2-bed apartment with the wife and 2 school-age children for 7 years. No dishwasher and the washer/dryer is in the basement, 3 flights down from our apartment. No garage, no off-street parking. Oh, and did I mention that I’ve completely remodeled two apartments in the building to ensure I could rent them at market rates while my apartment is falling apart and needs to be completely overhauled? Nothing used to make me angrier, in years past, than having to spend thousands so my tenants could live in an apartment that was much nicer than my own, while my family did without.
It took a long time to get past the anger and move towards an emotional state that was more productive. These days, I take all that anger and frustration out on paper, at distances from 10 to 500 yards. My support group consists of .40 S&W, .308, and 5.56… I highly recommend them
To Bernanke: “well played, sir”… ARE YOU FVCKING KIDDING ME!!!! Thats the best you can do? Really? The man’s only response to a mistake that was made by his department on his department’s watch is to throw more money that he doesn’t even fvcking have at the problem? How is that “well played”? Its played like complete dog$hit if you ask me. But nobody ever asks me…
From elsewhere in the thread:
‘I did mine over the weekend, did a final review this morning and mailed them over lunch. Interest income was distressingly low. I remember when that would cover a month and a half’s rent each year.’
Another:
‘Used to get $500 to $600 per month on CDs. Now less than $100. Our income tax refund should be bigger than last year’s. In this case, that’s not progress toward retirement.’
‘Ben Bernake: “Well played, sir.”
“You could have rolled the dice and played the game, win or lose… you didn’t. ”
This particular statement really just irks the $hit out me. WTF?? THEY rolled the dice…Really? And when THEYwon, did they keep the profits and buy Hummers, boats, trips , flatscreens, private schools, all kinds of $hit? Hell yes they did!! But when things went the other way, THEY just cry foul to Uncle Bernanke and the rest of the Bailout awarding committees to get “compensation” for the losses? BULL$HIT!!!
I’ll have you know, you holier than thou preacher of fairness, that I rolled the dice plenty and always played the game fair and by the rules. I don’t need the rules re-tailored to my stupidty as you are suggesting is reasonable. Accountability is dead and guys like you are the reason why. Hope you like food stamps.
ps: Its neither anger, nor frustration. Just complete unfettered bewilderment with the ineptitude of the leadership of our time. Cannot believe the lengths that are being gone to to cover-up/hide the truth/true extentg of the debacle. At what point is fake called fake? Nothing like this has happened in my lifetime, and I am stupified. Do any of you even realize how few of us there are? Even the few sensible enough to be attracted to this blog are in various forms of disagreement. Its a jungle out there.
Liz:
I don’t know what to feel anymore…every time i walk home from the subway, i know at least 5 homes that are in foreclosure or the owners just haven’t paid in years….. one told me monday she just spent $4400 on her 15 year old dog who had cancer.
Big for sale sign in yard…..livin la vida rent freeeeeee
Well, that’s a completely untrue statement:
“In the U.S., lenders cannot recoup money from the homeowner beyond the property if borrowers decide to walk away from their home and mortgage loan.”
In fact, they can. It’s called a deficiency judgement and varies from State to State. It’s just that they don’t, because of the vast quantity of properties, and in most cases, no assets to seize.
And when the Canadian finance bubble collapses, we will see that they won’t either, as the housing sector will be deemed “too big to fail”, and government agents will swing into action to provide “assistance” to all the people who have been speculating in real estate.
I suspect that you are correct, Canada will most likely follow our example when their bubble pops.
Oh yeah… here’s a thought… the realization that mortgage loans and home prices are de facto insured and and will be supported by the full financial might of the government will add no froth whatsoever to the Canadian bubble.
They’ve been watching how the US handled it. So did the rest of the world. Places that haven’t popped and retain a system in which lenders retain no repayment risk should go nuclear before they pop.
They’ve been watching how the US handled it.
But we have the world’s reserve currency, for now anyway.
government agents will swing into action to provide “assistance” to all the people who have been speculating in real estate.
It was your President that said there are people who have worked hard all their lives and played by the rules. The government needs to help them stay in their homes.
really Canadian politicians just need to crib a couple of phrases
Canada’s housing market
flirtsdid not have sex with that bubble.did not have sex
That depends on what the meaning of the word ‘is’ is…
meanwhile back in Canada, sales are down in Vancouver
Vancouver has taken the title from Calgary as the most materialistic, self-obsessed, wealth-conscious and socially unattractive city in the nation. And it was a tough fight.
http://www.greaterfool.ca/2012/03/14/the-city-houses-ate/comment-page-1/#comment-158148
we have yet to see the consequences
Alpha, I need your thoughts on this (and I am being sincere):
I’m confused by your position. You agree that we had a housing mania, yes? But then you think wages need to rise? Are you proposing that the ‘new normal’ is somewhere between the mania and the ‘old normal?’
In my mind, the *only* solution is for house prices to fall back to levels where young bands can rent a whole house in cities like Rochester, NY for $650/mo.
I’m also keeping this conversation separate from the 99/1% issues, although I understand they’re related. Let’s assume that all 99/1% issues are resolved… house prices still need to fall, big-time.
Until then, cash is king (Combo) and have some fun in the meantime (FPSS).
Wages rising? Yeah right. The gap between the Lucky Ducky working poor and the generally better off, more educated (IMO overrepresented as a proportion of the general population here on HBB) will continue to widen. And there aren’t enough of the latter to support a broad based “recovery”.
Wages have been stagnant for the past 10 years. Not even up with inflation. In my case I think I’m poorer than 10 years back.
On the other side, India is giving 12-15% raises for the past 10 years and people have tripled their salaries. Once can say that why I’m complaining here and should move to India. Fine, I can but my issue is not me. It is for the majority of US and majority cannot leave the country and move to India. It has to be fixed here itself.
http://articles.economictimes.indiatimes.com/2012-02-21/news/31083032_1_projection-auto-sector-salary
Moreover, companies like IBM are laying off people here and hiring massively in India. Where would it end?????
“Wages have been stagnant for the past 10 years. Not even up with inflation. In my case I think I’m poorer than 10 years back.”
More like past two generations, at least.
Grandfather - no college, all new cars and vacation homes and gold plated retirement
Father - some college, some new cars, got to buy a cheap house. Blah retirement not bad but nothing to brag about.
Me - BS degree in hard science field, one new car once probably never gain, high house prices, retirement plan is eskimo style put him on an iceberg and push out to sea.
Something wrong here when educational level and job level improve every generation in my family yet standard of living drops every generation due to decline in inflation adjusted income.
My kids are not going to be going to college or buying houses. Mathematically impossible. Not even an open issue for discussion.
Only hope for the future is a complete collapse followed be regrowth. Best analogy is sometimes the best solution to a PC problem is to hit the reset button and/or reinstall windows. Or zap the whole thing and install Linux or buy a mac. Doesn’t mean its fun, but its inevitable and the longer you wait the greater the suffering.
“Something wrong here when educational level and job level improve every generation in my family yet standard of living drops every generation due to decline in inflation adjusted income.”
What you are witnessing is the result of over 50 years of progressive government intrusion into the lives of working people, via taxes and INFLATION, to provide a better life to those who provide NOTHING to your society.
The “war on poverty”, the “war on drugs”, Medicare, Medicaid, Free Food, Housing “assistance” for people who have lots of kids and don’t work, and an endless list of programs to promote the welfare of the useless.
The current Federal budget provides 2% of its spending for what the call “administration of justice”, i.e. courts and police, 3% for “transportation”, i.e. your interstate highways and airports and rails, 3% for education, training, and social “services”, the rest, the BIGGEST blocks of money go to War Spending (24%), and then the Benefits Sector:
Social Security (20%), partially paid for by SS Taxes,
Medicare (13%), projected to rise exponentially,
and “INCOME SECURITY” (17%) that’s the unemployment checks, food stamps, ‘housing assistance’, Federal pensions, etc. etc., i.e., The give-aways that drain the finances of working people for the benefit of the welfare class.
In summary, about 3/4 of the money spent by the Federal Government (ALL DEFICIT SPENDING, meaning printed out of the air to place demands on the market and compete with the money you “earned”), is not spent on items that provide for the Purpose of government, which is to provide Police protection and administer justice and keep the roads open.
That is the basic problem. Your money and mine is being frittered away to support layabouts and provide a Military-Industrial gravy train to make wars around the world. And now, every airport in America has signs welcoming their “heroes”. Every soldier is a “hero”. Perhaps they will soon be given the Hero medal of Lenin. It’s gotten to that point.
Expect to live even poorer in the future as this trend has not been reversed but EXTENDED indefinitely under the OBama regime. NO spending is ever enough and talk about “cuts” are a big, fat lie.
The well-off are living in the Washington area, helping ladle themselves some of the government graft. The rest of us are left to compete with shrinking money supplies and greater world-wide competition.
Get a “government” job, or better yet, a government CONTRACT.
What you are witnessing is the result of over 50 years of progressive government intrusion into the lives of working people,
No, what he’s witnessing was the success of Keynesian economics, and then its slow dismantlement in favor of ‘free trade’ and trickle-down economics.
The money spent on “layabouts” (I understand this to mean people on welfare) is but a small fraction of gov’t spending. 100B is spent on food stamps and school lunches. If I am not mistaken, we spend more on military pensions and “Veterans affairs.”
According to wikipedia, 2012 militart spending will be as high as 1.415 trillion.
That’s where the “spending problem” is. And “deficit hawk” GOP candidates won’t touch it. The only thing they will do is dump welfare costs on the states, where they will die.
a 27 year old that sits next to me at work has 60k in student loans.
a college education…all in the name of affordability.
“a 27 year old that sits next to me at work has 60k in student loans.”
You still hangin’ @ the Goldenman’s $hack?
Let’s average the “management” education cost$ of everyone under the age of 40, … toss out the low-end di$tortion extreme’s of community college degrees.
What you are witnessing is the result of over 50 years of progressive government intrusion into the lives of working people, via taxes and INFLATION, to provide a better life to those who provide NOTHING to your society.
“progressive government intrusion into the lives of working people”
How has government intrusion in working peoples lives been “progressive” on the macro level? Laws have made forming unions harder. Jobs have not been protected. Wages have not been protected. N ot event the minimum wage has risen with inflation. Entire industries have been shipped overseas in the name of “free-markets. How is any of this progressive?
via taxes and INFLATION,
Taxes have fallen a lot for the rich and corporations the past 50 years. Wealth has been re-distributed from the middle-class to the rich. How is this “progressive”?
to provide a better life to those who provide NOTHING to your society.
If you are referring to the American super-rich then you are correct there as you also are on your endless war, gov graft and “hero” points.
It’s not about freeloaders or Keynesism. It’s a lot simpler than that
My last two employers had salary surveys and all kinds of documentation showing them that I was WAY underpaid, relative to industry standards, and relative to my responsibilities.
They chose not to correct this, knowing that a crummy job market keeps people locked into their current positions.
Like the UAW, we are developing a “two-tier”wage system. Get lucky enough to hire on with the right company, avoid layoffs/Chapter 11s, and you do okay. Get downsized or laid off for whatever reason, and you get paid 40-50% less for doing the SAME JOB. Assuming you can find another job. And you are not over age 40.
I’m thinking of filing for Chapter 11. Not that I have insurmountable bills, but they are going to be insurmountable, if present trends continue (stagnant/shrinking pay, inflation in neccessities, higher taxes)
I’m thinking of filing for Chapter 11.
You might want to do it before they tighten the screws even more on BK laws.
“Get downsized or laid off for whatever reason, and you get paid 40-50% less for doing the SAME JOB. Assuming you can find another job. And you are not over age 40.”
Barbara Ehrenreich wrote the book “Nickled and Dimed” about this scenario. And the squad has family member age 50+ who are living it…
She also wrote a similar book (Bait and Switched) about the same scenario, but from a white collar perspective.
Unlike in Nickled and Dimed, where she went “undercover” as a Lucky Ducky, she was unable to land a job in Corporate America for her white collar book. After interviewing many white collar workers who were put out to pasture in their middle age, she learned just how cut throat the environment had become in the cubicle farm.
Sorry had her 2 books mixed up. Another good one she wrote is “Bright Sided”.
she was unable to land a job in Corporate America for her white collar book.
But remember she got a “job”. For AFLAC, commission only selling supplemental health insurance. Of course this new “job” did not provide health-insurance.
But why would a job selling health-insurance in “capitalistic” America need to provide health insurance?
Kinda long post here; read on if that does not annoy you.
My wife has to refuse middle school lunches to those who don’t bring money. When it becomes chronic, and the kid is hungry every day; after contacting the parents, the child can be placed on administrative benefits regardless if the parent qualifies for aid.
So those who don’t make enough money to pay for kid’s lunches, but do not want to go on “welfare”, gets forced onto free lunch program.
Should we allow the law of natural consequences to get rid of the layabout class? They could all starve for all some people care, while the hurting family decides what to pay for: food, rent, medical bills, insurance. The median income will not cover all of these expenses; even though the median income earners SHOULD be able to modestly get by
Say bye bye to over 50% of our school’s population.
Without wage inflation, lucky duckies MUST take government aid if they want to provide food, medical, housing for their kids. Unless they make 100k/year; unfortunately the median income in our area is around 30k/year.
If you are at the median like we are; it is easy to see that it is not enough; 20k of our income last year went to health insurance/doctor/hospital bills/medication; 12k went to rent. That makes for 0 dollars left for food, gas, insurance, utilities, clothes, dentist(the list goes on); but we want health insurance and a roof over our heads.
Don’t make babies in the first place unless you are able to support them?? Great idea, but do you know what “entertainment” could replace sex as a free pastime?
So the kids are there, regardless of their parents situation, and they need food. The parents are not providing the care(”layabouts”); or they can not financially handle it on their own (lucky duckies).
We take free lunch for our kids, Oregon state health care, and food stamps(all for the first time in my life) for the last few months. And we work, but without medical benefits, we are both looking for a job that would allow us to join in their group insurance. Daunting task given I spoke to a state administrator who says they receive 350 applicants per teaching job opening. So finding better work with higher wages or a benefit plan is not easy. Nevermind a job that also has a pension plan.
Both my wife and I work for the schools; however I am an “at will” employee(sub) and my wife is kept to part time so she gets no bennies either.
Diogenes, what solution(s) do you propose? Drug tests for welfare families I support, but can a politician support such action and still be elected, considering 50 million are on food stamps and out of that 50 million a portion of them are illegal drug users?
Or tie unempoyment to vocational trainings that must be completed or no $$. That would cost as much to implement as it would save by denying benefits to drug users, I would think.
But still, druggies have children too, so I don’t agree that the kids should have to pay for their irresponsible parents that arguably should not have bred in the first place. One poster suggested to me that I was such scum that I should not have procreated. I lost a higher paying job that I had at the time due to medical issues making my job duties too hard to continue. Maybe those without jobs for life should also be sterilized to prevent kids that go without care.(too draconian?) But as I perceive it; for some, pride does not goeth before the falls; and they let their kids go hungry rather than admit they need help. Sometimes my wife breaks the rules and gives a middle schooler a lunch(she throws away a certain amount anyway) because the parent’s pride hath gone over the falls and they would rather let their kids go hungry than recieve benefits.
Now what? What is a ducky to do? Stop being a layabout; feed your kids, don’t be obese, and get a job, loser? Cuz Diogenes(who may have risen above this level of humaness and landed in the group that gets by) seems to not be feeling very charitable about funding welfare programs for the “layabouts”. Trouble is; determining who is really a layabout/druggie/true lazy loser as opposed to who is in an unfortunate situation due to medical expenses, or have become disabled, or not being able to find decent work seems like it would also be costly.
Yank out the safety nets; cancel a program like the food stamp program and watch it morph into soup kitchens and let us see the true level of poverty in this country at the moment. A handy little debit card(SNAP) both helps with the old food stamp stigma and their books of stamps. Also the Food stamp booklets of old were subject to being sold for drugs, etc. And also SNAP helps hide widespread poverty, by keeping its 50 million-ish recipients off the streets. This helps keep the issue of poverty tidily off the streets. Convenient for a politician to not have to say; we have more people on the streets than ever! Instead they can brag that they have kept people off the streets with their social programs.
Would you rather end welfare programs?; Those who felt charitable could feed a hungry family at the offramp. Those not keen on feeding could just avert their haunted gazes and drive away; happily ignoring the hunger, but knowing that your taxes are not going towards feeding the down and out.
Don’t make babies in the first place unless you are able to support them??
And as we know, you have to have babies if a “healthy” economy is to be based on growth but to have enough babies one needs a healthy economy.
This is why the masterminds who promote economies based on growth, while at the same time allowing and even promoting growing wealth-inequality, are idiots, hypocrites, morons, liars, cheats and total dumba$$es. (other than that, they rock)
“Don’t make babies in the first place unless you are able to support them?? “
And this meme presumes that you a prescient enough to know that you will be able to support them until they are grown.
The new reality is that there are large numbers of people who expected to be able to support their children who have been burned by the Great Recession and outsourcing and other market forces.
“Don’t make babies in the first place unless you are able to support them?? Great idea, but do you know what “entertainment” could replace sex as a free pastime?”
Sex is different than making babies. It is not terribly difficult to avoid making babies with just a hint of responsibility and discipline. Have all the sex you want as long as you’re responsible enough to not create a dependent human in the process if you can’t afford it.
And yes, I realize that circumstances change sometimes, but there are WAY too many people having baby after baby that can’t even come close to affording them right from the beginning.
I had to take my lunch to school. We couldn’t afford school lunches. Does no one take a lunch any more?
Yeah steve home made sandwiches, home made iced tea…cookies, my mom used make her own chocolate, and fresh fruit my our yard and my grandmother who lived down the street she had pear apple cherry trees , a blueberry bush and strawberries and some fresh eggs chicken coop..lots of canning…..she had about an acre in southern CT, so it was a nice childhood..
Once can say that why I’m complaining here and should move to India.
LOL! Most countries are NOT as welcoming towards immigrants as the USA. This is why I recommend obtaining a foreign passport if you are eligible.
On the other side, India is giving 12-15% raises for the past 10 years
From what I’m hearing, those days are over. A few years ago (2008 IIRC) Hewlett Packard not only didn’t give its employees in India a raise, it cut their pay 5%. My Bangalore colleagues at the time were furious.
They must have lost a lot of staff then. If I remember rightly HP tried to get all there staff to take a cut, didn’t work in Europe in the main it’s illegal to cut your wages without agreement (I believe that isn’t the case in the US); an as an old work mate of mine said “Why should I take a pay cut to reduce my redundancy payment in twelve months time”
But to put Indian wages into context
NEW DELHI: Aon Hewitt on Tuesday announced the results of its 16th Annual India Salary Increase Survey. Salary increases in India are projected to be 11.9%, marginally lower than the actual increase of 12.6% in 2011.
The number mirrors a positive yet cautious outlook as organizations strive to take a balanced view in light of the uncertain economic environment. As compared to other markets, India has outpaced Asia Pacific yet again with the highest salary increase in the region, followed by China and the Philippines, projecting a 9.5% and a 6.9% salary increase in 2012, respectively.
The Indian Information Technology (IT) and Outsourcing sectors report a relatively positive outlook on salary increases (11.9% and 11.8%, respectively), despite their continuing concerns with the global economy. The depreciation of the rupee against the dollar, growth in emerging verticals such as retail, healthcare and utility, new business models and organization efficiencies, among others, have been the key contributing factors.
http://articles.economictimes.indiatimes.com/2012-02-21/news/31083032_1_projection-auto-sector-salary
I welcome the salary increases overseas. It will make their workforce less competitive.
Agreed. The faster they level up the less well have to level down. Still going to be painful though.
I welcome the salary increases overseas. It will make their workforce less competitive.
Exactly… the sooner Indian tech workers are valued closer to US tech workers, the sooner those jobs begin to come back to the US. This is the “Great Rebalancing” that we’ve talked about before. Standard of living needs to go down in the US, standard of living needs to go up in our trading partners’ countries.
BTW, already happening in many cases for manufacturing jobs. In parts of the US, it makes sense to pay that $10-15/hr for labor than to build it and ship it from China.
In parts of the US, it makes sense to pay that $10-15/hr for labor than to build it and ship it from China.
There’s a BS article in money dot cnn dot com about how machinists can make 100K+
There’s a BS article in money dot cnn dot com about how machinists can make 100K+
I read that… I think the fine print regarding that mythical “$100K” blue collar income is that a machinist could see that kind of wage after 10-15 years on the job experience.
I think that is a possibility, if demand remains high for machinist expertise and supply low, and you take into account overtime. As it stands, my understanding is that many oil workers, including deep-water rig workers, who have machining skills are doing quite well. Depends on the industry and the geography I would guess…
The $100k includes that mythical pension.
The $100k includes that mythical pension.
Do they exist for non-gov workers? I thought that was kind of like a unicorn…
The gap between the Lucky Ducky working poor and the generally better off, more educated (IMO overrepresented as a proportion of the general population here on HBB) will continue to widen.
And we wonder why everyone is trying to send their kids to college? Problem is, even that is no longer a guarantee of success.
Everyday it feels more and more like I live in a 3rd world country. The have nots are more and more visible, driving their beater cars to Walmart. I sometimes drive through their neighborhoods, which contrast sharply with my own nabe of McMansions, well manicured lawns and late model cars in the driveway (however, even in my nabe the cars are looking older as the neighbors are no longer automatically trading in every 2-3 years).
Most of my oldest daughter’s friends have 2-3 P/T jobs with no benefits. Household formation is the last thing on their minds as they scramble each month, hoping that they don’t get sick or that the car breaks down.
Most of my oldest daughter’s friends have 2-3 P/T jobs with no benefits.
“Uniquely American”
Absolutely. Most of her friends aren’t smart enough to major in engineering or some other profession that would pay a good wage, so it’s a Lucky Ducky life for them. and tens of millions of others.
Average life time of a new car in 2004 was 6.2 years before trade in, now it’s 10.1 years.
Muggy:
$7800 a year rent and $8-10K a year RE taxes?
This is where my “racist” views come into play, we need to get the minorities blacks in the east and latinos in the west to commit crimes at the same rate as white people.
Think of the massive cost savings, the layoff of 1/3 or more of the police force and court personnel, their pensions , all paid out of local RE taxes…….then that $7800 rent looks very doable with $6K in RE taxes
“Think of the massive cost savings, ”
Well, if you’ve ever wanted a perfect example of something that won’t be allowed to happen by the people in charge… Its only a savings to us, to them its the destruction of an empire. It will not be permitted to happen.
we need to get the minorities blacks in the east and latinos in the west to
commit crimes at the same ratego to the same schools and look the same as white people.Legalizing drugs would accomplish a huge reduction in the criminal population.
and cops could spend time on cold case murders…or rapes…or child molesters….not dumb pot smokers…
And it could accomplish a huge increase in tax revenue.
Rising wages for J6P have long been shown to having nothing to with inflation, with current events being a prime example.
It has everything to do with voodoo economics.
You raise prices when times are good and claim scarcity due to demand.
You raise price in bad times and claim scarcity of profit due to lack of demand.
Yes but food and energy prices are “volatile” and therefore excluded from calculating “core” inflation. Let them eat i-pads!
“Let them eat i-pads!”
I hope this makes it into a textbook someday.
“Rising wages for J6P have long been shown to having nothing to with inflation, with current events being a prime example.”
On a short-term basis there often appears to be a total disconnect. On a long-term basis there’s a pronounced reversion to a mean, so wages and inflation are very tightly connected. I researched figures and stats from a number of government web sites and now have a spreadsheet with 50 years of data such as median household income, CPI, federal spending, total federal taxes collected, etc.
I also had the spreadsheet do some calculations. One process jumped out at me. If you take each year’s median household income and divide it by that year’s (year-end) CPI, the number averages 228.5, with a median of 229.3, over the 50-year period. A rising number means pay is outstripping inflation. A declining number means the opposite.
Interestingly there was a steady climb from 190 to 266 over the 1961-1972 period (remember the “guns-and-butter” debate?), then it dropped back over the next three years to bottom at 219. Since then it’s always been between 244 and 209, and each time it deviates significantly above or below the median and mean it reverts back.
Most recently that number hit 242.3 in 2007 and it has been reverting back to the mean over the following three years. In 2010 it was 226.8. The overshoot to the downside probably continued in 2011 (couldn’t find figures for last year yet) but IMO the number will soon turn back up.
I agree with what you’re saying, but in the past we didn’t run the printing press to finance massive budget deficits. Once that stops I could see things “reverting”. However, it is almost certain that once the dust settles we will discover that the standard of living is much lower, especially for the Lucky Duckies.
Take away the Lucky Duckies’ food stamps and Medicaid and the transition to 3rd world living conditions will be nearly complete
Bill - send me an email via the contact page on the link under my name and I’ll point you at a tool that should be good at looking at that data. I’d be curious to play with it as well, if you’re willing to share!
On a short-term basis there often appears to be a total disconnect. On a long-term basis there’s a pronounced reversion to a mean, so wages and inflation are very tightly connected. I researched figures and stats from a number of government web sites and now have a spreadsheet with 50 years of data
How tightly can wages and inflation be connected when during that 50 year period the criteria of the inflation numbers have been continually tweaked to understate inflation?
Food: “rising faster than the rate of inflation”
Healthcare: “rising faster than the rate of inflation”
Housing: “rising faster than the rate of inflation”
Energy: “rising faster than the rate of inflation”
Education: “rising faster than the rate of inflation”
Inflation: “rising faster than the rate of inflation”
There I fixed that for you
LOL
CPI is crap and so is median income. The gap between the 1% and everyone is so huge it even distorts the median.
72 million people, or basically 48% of the workforce now make $500 week or less. This means the once majority middle class is no longer the majority.
J6P’s pay has NOT kept up with inflation over the last 30 years, even though wages have gone up.
Here’s an easy way to run the numbers.
http://www.halfhill.com/inflation.html
It works forwards and backwards.
If the middle class is shrinking and therefore their purchasing power, there is no way they can be driving inflation.
In fact, just recently, some economist in the news said as much and pointed out other reason why. I’m sorry I don’t have the ref. Too busy trying to keep up with inflation AND keep other SOBs from trying to steal my money.
No it’s your attitude that is “crap” with all the class warfare bellyaching. Stop being such a nattering nabob of negativism, it’s damaging to consumer confidence!
Too busy trying to keep up with inflation
Don’t eat and buy an Ipad and you will beat inflation.
You agree that we had a housing mania, yes?
Yes, we had a housing mania.
But then you think wages need to rise?
Why do you find that confusing or contradictory? Because you want prices to crash, period?
Some combination of rising wages and/or falling prices must and will occur to bring houses back to their historical price levels. However, a rapid freefall back to say mid-80s prices would devastate the system (ie us), and be far more expensive than some controlled discovery of a middle ground between higher wages and lower prices.
Let’s assume that all 99/1% issues are resolved… house prices still need to fall, big-time.
They would need to fall- or rise- to traditional metrics.
In my mind, the *only* solution is for house prices to fall back to levels where young bands can rent a whole house in cities like Rochester, NY for $650/mo.
They still can, in the right cities. Do you want a young band living next to your house? I bet that would cure your nostalgia.
My overall points to you were that blaming the government for all your problems, which you seemed to be doing (’my life would be hunky-dory if the gov…’), is a mental trap that many fall into. And calling for the gov to Get The F Out Of The Way so you can buy a cheap house in a good school district is rather ironic. Would that school district still be as good if the houses were dirt cheap? Would you still have a job if the gov GTFOOTW? Would there still be school districts? Or do you hope for just enough collapse? A Goldilocks wipe-out, that crushes the foolish but leaves the wise free to pick over their bones, and re-create a shining city on a hill? Like our last depression? No innocents got screwed in that one, eh?
The Hispanic 20 somethings that were renting next door 5 or 6 years ago had band practice once a week. Not that bad, really. They quit by 11:00 pm and they weren’t playing some style of music that I hated. But it is a bit trying to hear the same couple of measures over and over again as they try to get it right.
I’ve got a guy upstairs from me that develops sound tracks for video games. It’s some repetitive stuff. I occasionally want to rush upstairs and bust in his door to give him cheat codes to get to the next level.
“Would that school district still be as good if the houses were dirt cheap?”
Yes, the tax rate is merely higher. Also lower house cost means lower teacher pay rate means lower taxes. My sister in law lives this lifestyle in a rural area.
An interesting anecdote is if you’re “middle class-ish” your SFR real estate tax is probably “around $3K” regardless if your momentary imaginary house price in your area is 75K or 750K. I know I paid $3K/yr for the same “100K” house, as I rode it from 125, up to just under 1/3 million, and back down to about 140 over the course of a little more than a decade. An interesting area of discussion would be comparing the divergence of dollar value real estate taxes vs the divergence of real estate prices.. I think the tax divergence is much smaller. Look how small the wage differential is between the coasts and interior, far less than 2:1, yet the house price differential at peak neared 10:1.
Another way to logically disprove that, is if cheap houses automagically means poor schools, then expensive houses must automatically mean excellent schools… yet measured achievement levels during the bubble, do not seem to mirror the prices of houses.
Houses becoming much cheaper can drastically change the demographics of a district, which will almost inevitably change the performance of the school district.
And public schools, and their districts- being essentially government entities-would be gone if the gov truly GTFOOTW.
Another way to logically disprove that, is if cheap houses automagically means poor schools, then expensive houses must automatically mean excellent schools… yet measured achievement levels during the bubble, do not seem to mirror the prices of houses.
Link?
“Also lower house cost means lower teacher pay rate means lower taxes.”
Everyone wants lower house costs. Nobody wants lower pay.
“where young bands can rent a whole house in cities like Rochester, NY for $650/mo”
We’re not that far from Rochester and my son and his young band do exactly this. 4 BR/ 1 1/2 bath $700/mo plus utilities. Creative parking solutions required. Stores and jobs are walkable.
Markets are priced for perfection - again
8:16 AM, Mar. 12, 2012
Written by Robert Barone
From early last October to the end of last month, the S&P 500 rose 25 percent; amazing for an economy that is struggling to stay out of recession.
But, then again, the equity markets are hooked on the liquidity drug. When the Fed’s Ben Bernanke, in his recent semi-annual testimony before Congress, did not hint that QE3 was just around the corner, the market sold off. When the European Central Bank broke its traditional role as lender of last resort and morphed into a gift-giver to its member banks ($1.3 trillion total), much like our Fed, the equity markets soared. Money printing can’t go on forever. As the late Herb Stein said, “Anything that can’t last forever, won’t.”
Don’t get taken in by the cheerleaders in the business media. Eventually, the markets get priced back to what the fundamentals dictate; and here are some of those basic fundamentals:
There is no doubt that American manufacturing is undergoing a renaissance. Labor costs in Asia are on a steep rise, while wages here have been stagnant for several years. Shipping costs, quality control and culture are other factors. But, manufacturing represents less than 12 percent of GDP. It cannot drive economic growth alone.
Gasoline prices are up 40 center per gallon in the year’s first two months, with talk of $4.50 gas by summer. Every penny increase drains $1.5 billion from consumer discretionary spending. And what happens to gas prices if the Middle East flares up again?
Europe is really sick. If the market believed China’s growth rate would fall from 9 percent to 0 percent in 2012, it would tank. Europe’s economy is three times the size of China’s, and it is clear that Europe’s growth rate in 2012 will fall from plus 1.5 percent to at least minus 1.5 percent. Do the math! This is worse than a Chinese crash landing. Yet no one seems to care.
…
“Yet no one seems to care.”
When they [Euro-$lacker$] get $lapped with the Global work-force-competition of “you’ll-work-ALL-year-and-get-14 days-holiday-di$tributed” because that’s what economic “efficient” economic’$ demand, they’ll come around to “It’s-a-$mall-world-after-all”
[In the coming next 99 years how many Billions are going die? And no Sister Theresa it ain't monie$ eyes be a speakin' about.]
It’s spinning & wobbling and it is covered with a spreading skin cancer. [ Who'll end up with the Mona Lisa & Starry Night? Oh,my! ] :-/
Why do I keep having visions of a Bladerunner like dystopia in our future?
“[In the coming next 99 years how many Billions are going die? And no Sister Theresa it ain't monie$ eyes be a speakin' about.] “
I predict 99.99% of the 7 billion now alive will die in the next 99 years.
Are dividends up in proportion to stock prices? No? Then higher prices are NOT an indication that investors think that the economy is improving. Rather they are an indication that they expect the flood of liquidity to fuel inflation in equity prices.
Rather they are an indication that they expect the flood of liquidity to fuel inflation in equity prices.”
yes and leaving the bond market and it’s below inflation returns
The Bernanke Bubble
By David F. Brochu, CFP
Mar 14, 2012 12:05 am
The stock market is firmly in the grip of a liquidity-fueled rally. $16 trillion – the current number – in new greenbacks dumped into the system has to go somewhere. The path of least resistance is to the financial markets.
Amidst some pretty troubling news out of the Middle East and Europe, together with slowing growth in both China and Brazil, the stock and bond markets keep hitting new highs. You might think everything is rosy here, but you’d be wrong. Stubbornly high unemployment, massive federal deficits, bankrupt states and a housing market that will take generations to heal still hold a crippling grip on our economy. So what’s driving our markets higher?
Uncle Ben, the chairman of the Federal Reserve, has mandated it. How the Fed and its chairman control the amount of money that circulates through the system is a study in fanciful thinking.
First amongst the Fed’s tools are the Fed’s Fund Rate and Discount Rate. The Fed’s Fund Rate (FFR) is the rate banks charge each other to borrow money overnight. Banks borrow from each other when they need additional reserves to meet required levels. For example: if Bank A needs a billion overnight and Bank B has an extra billion, Bank B will loan to Bank A and Bank A will pay interest at the FFR. The Discount Rate is basically the same except that the loan is from the Fed directly.
The Fed sets the rates on both of these loans. How? It makes them up. If the Fed wants more money in the system, it will lower the rates. Lower rates make it profitable for banks to borrow money from each other and then lend it out, in theory anyway. Low rates also allow banks to pay very low interest on consumer deposits. If the bank can invest the money somewhere else, say on deposit at the Fed, at a rate higher than what the bank pays depositors, then the bank can make money without taking any risk. If the bank actually makes a loan or two, then the bank’s profits can be tremendous.
Big Ben can and does manipulate the stock market with the same tools. When rates are low, investors seek return in higher risk assets. By reducing rates, the Fed forces us to purchase investments that we otherwise wouldn’t. Think of it this way: if you need 3 percent on your investments to meet your needs and Certificates of Deposits (CDs) pay 3 percent, you can achieve your goals with very little risk. In the current environment, CDs pay very close to nothing, forcing you to invest in bonds and stocks of which dramatically increase your risk.
The effect of the forced risk taking is that when the markets collapse again (which is inevitable), many people who can’t afford to lose money will. Instead of knowing their money is safe, those who can least afford it, will watch their life savings go up in smoke. The Fed doesn’t do this by accident; it is a stated objective. Forced risk taking, in the opinion of the Federal Reserve Board of Governors, is fine as long as it serves some arcane model. If a few million people’s lives are destroyed, that’s a price they are willing to pay.
…
The $uffering $o’s & Organized Enabler$:
A continuing Economic Manipulation$ $erie$ :
“A $aga of Collaboration$”
“None dare$ call$ it a con$piracy!”
“Conversation$ at the Di$count Window$ & the water cooler$”
“How much is that doggie in the window?”
New bulletin board item:
Dirty Job$ po$ting:
“Nuke Diver$ needed, low pay / high risk … meager bonu$ po$$ible, must like to travel. $ome sort of health benefit$ included.”
Task for today: “Define Toxicitie$ & it’s effect on … Daffodils” :-/
The Bernank did his best. Faced with the fear of global meltdown, he went by his instinct and kept staving off the immediate danger, which was massive bank failures.
However, in doing so, he introduced massive distortions in the market. Taxpayer funded distortions. Picking winners and losers in a nominally free market economy.
And the politicians have been utterly derelict in their duty to enact meaningful financial reform. The most basic reforms are simple. Separate deposit accounts from gambling operations. Make it easy - they need to be in separate companies, so there’s bleed-over risk as execs try to expose deposit accounts to risk. Second, force lenders to retain virtually all repayment risk. No more casino games with debt. It just enslaves the populations.
But instead, we get the Dodd-Frank monstrosity. A bill written by lobbyists. They make it utterly complex then cry that it’s too complex! A complex bill is a bill which is filled with loopholes. It’s an old phenomenon - make it look like you’re doing something, when you’re not really doing anything.
Right now, politicians are waiting to see if the economy recovers and they can continue with the old system. Well, we had 1989’s debt/property bubble. We had the 2008 debt/property bubble. If nothing changes, I will be in a survivalist mode come 2028. Because that one will be too big to bail.
The Zimbabwe Mail
Wednesday March 14, 2012
Global liquidity peak spells trouble for late 2012
By Ambrose Evans-Pritchard 16 hours 1 minute ago
The global liquidity cycle has already rolled over. Assuming that no fresh action is taken, world economic growth will peak within a couple of months and then fade in the second half of the year - with grim implications for Europe’s Latin bloc.
Data collected by Simon Ward at Henderson Global Investors shows that M1 money supply growth in the big G7 economies and leading E7 emerging powers buckled over the winter.
The gauge - known as six-month real narrow money - peaked at 5.1pc in November. It dropped to 3.6pc in January, and to 2.1pc in February.
This is comparable to falls seen in mid-2008 in the months leading up to the Great Recession, and which caught central banks so badly off guard.
“The speed of the drop-off is worrying. This acts with a six months lag time so we can expect global growth to peak in May. There may be a sharp slowdown in the second half,” said Mr Ward.
If so, this may come as a nasty surprise to equity markets betting that America has reached “escape velocity” at long last, that Europe will scrape by with nothing worse than a light recession, and that China is safely rebounding after touching bottom over of the winter.
…
Oh, so it’s LATE 2012. Not mid-2012. Not early 2013. Glad to know Ambrose can see the future so clearly.
The Republican party will be so happy if it hits before November.
Zimbabwe: All Eyes On Federal Reserve Bank
By Prodigy Chinanga, 14 March 2012
Will a strong jobs data push the US Federal Reserve chairman Ben Bernanke to do away with quantitative easing programme? The market waits to see whether the Federal Bank will hint on the prospects of a third quantitative easing programme and rate outlook.
At the moment interest rates are at 0,25 percent and they cannot hike or cut rates.
The Federal Reserve minutes are crucial to the market as they could affect your portfolio.
This will likely push volatility to certain levels not acceptable for most traders.
Normally, when volatility levels are too high it is more difficult for investors to hold positions in portfolios that are labelled the inner core.
What does it mean for the market when the Federal Bank is about to embark on such a project?
If Bernanke does hint on any form of quantitative easing, this will push the market to fall short of the US dollar and buy the euro.
…
It means all the insiders need to lock in their positions and consolidate what they have because the next round of fleecing is about to begin.
My inflationary expectations certainly haven’t remained stable. I recently sunk some cash into some expensive real assets (not real estate!), as an inflation hedge.
PIMCO’S Gross disagrees with Fed on inflation
By Sam Forgione
NEW YORK | Tue Mar 13, 2012 4:18pm EDT
(Reuters) - PIMCO founder and co-chief investment officer Bill Gross, who heads the world’s largest bond fund, took issue with the Federal Reserve’s decision on Tuesday to keep U.S. interest rates low until 2014.
During a CNBC interview, Gross said that the Fed’s decision will continue to “subordinate” bond investors.
Gross said “April holds the key” as the time when the board could enact another round of stimulus or quantitative easing.
In past quantitative easing moves, the Fed has either bought Treasuries or mortgage-backed securities.
Gross also disagreed with the Fed’s pronouncement that inflationary expectations have remained stable, saying the Fed “is playing a game” by saying otherwise.
…
PIMP-Co!
Says it all for me.
Where one man sees no QE3, I sees a future stock market crash.
Don’t See a QE3: Former Fed Governor
Published: Tuesday, 13 Mar 2012 | 8:33 PM ET
By: Michelle Fox
While there is some uncertainty over the path of the economic recovery, former Federal Reserve Governor Mark Olson told CNBC he doesn’t see “anything like” a third round of quantitative easing, or QE3, in the cards.
…
If the current QE3 speculation turns out to be off target, Uncle Buck could do very well going forward.
March 12, 2012, 11:56 AM GMT
Many Reasons to Favor the Dollar
By Nicholas Hastings
Dollar buyers are probably poised in the wings waiting for a Fed re-think.
Reasons for buying the U.S. currency are almost all in place. About the only thing stopping a rally now is fear that the U.S. central bank is still entertaining more quantitative easing.
…
Try not to get Bernankied, gold bugs!
March 13, 2012, 10:50 A.M. ET
Gold Investors Brace For Bernankification
By Brendan Conway
Have investors gotten Fed-shy on gold and silver? Today’s price action gives a hint that the answer increasingly is yes. And who could blame them after gold’s thumping two weeks ago at the hands of Federal Reserve chairman Ben Bernanke?
…
Articles like this one are reminiscent of Fed remarks in early 2006 to the effect that they were going to take away the punch bowl from real estate investors. It seems many real estate investors ignored them and lost a bundle.
Now of course I don’t mean to suggest that Wall Street bovines will make a similar mistake this go-round.
Fisher Says Investors Should Prepare for Less Accommodation
Aki Ito and Steve Matthews
Tuesday, March 6, 2012
(Updates with comment on fiscal policy in sixth paragraph.)
March 5 (Bloomberg) — Federal Reserve Bank of Dallas President Richard Fisher said he opposes additional Fed purchases of securities and urged Wall Street to get ready to become less dependent on monetary easing.
“I would suggest to you that, if the data continue to improve, however gradually, the markets should begin preparing themselves for the good Dr. Fed to wean them from their dependency rather than administer further dosage,” Fisher said today in a speech in Dallas. Financial markets “have become hooked on the monetary morphine we provided” after the 2008 financial crisis, he said.
…
Q ?? There once was an article about “Bubbles” in reference to purchasing a few houses on an island in a closed economic system where it CLEARLY demonstrated how prices grew but nothing about the houses changed. Does anyone have that or remember it ???
Exec slams Goldman Sachs on the way out, calls the firm “toxic”.
http://money.cnn.com/2012/03/14/markets/goldman_sachs/
Of course, there’s all this bloviating by commentators about how “he’ll never work in this town again”, that sort of thing. I call him a brave man. If I were looking for an ethical employee, I’d hire him.
He may be disgruntled, but he struck a blow for decency. A lonely road, for sure.
Task for today: “Define Toxicitie$ & it’s effect on … Daffodils” :-/
(OK, $ubstituting Goldenman$uck$ Corporate Profit$ Behavoir$ for Daffidoils is acceptable for today’s a$$ignment.)
Also remember, this is an “open book$” quiz.
(Nothing like “Tran$parency” to illuminate “truth$” for our youngin’s and their developing minds!)
Bonu$ question:
Define: “Bottle neck” and give a real world economic example of it’s effect$ on price$.
Double bonu$ question:
Define: “Manipulation$” and offer proof that it does not exist or that it’s irrelevant. either / or … your choice.
“open book$” quiz.
I have a general question. Shouldn’t more science and engineering tests in college be open book?
I remember spending so much time in Physics, Chem, Math etc. memorizing formulas. Was this the proper use and training of the mind in the context of the practical application of education?
Should I not have had access to all those formulas during tests and have spent my time learning how to apply those formulas to solve different problems? Instead of memorizing formulas?
In the early 90s it was already becoming a gray area because you could program the formulas into the calculators that were allowed.
I was allowed one page of notes this was before programable calculators
I was allowed one page of notes this was before programable calculators
Most times I was allowed an un-programmable calculator and a head full of formulas forgotten 10 times faster than memorized. What a waste of time and energy compared to being taught to apply and think.
The hardest math test I ever had was an open book, take home, 2 proof test. I did not solve either one and got a C.
That’s exactly how it works in the program I’m in now. And it is GREAT having the buffer to think things through and do it holistically, solving a larger, whole problem rather than just a piece of one. If I had to do a closed book exam in Engineering, I’d be obliterated. That does have something to do with my preference. At least I know my limitations.
We get either a mid-term or a final. They are take home, and we get a week. They consist of five or six multi part scenarios, REAL problems, requiring verifiable solutions.
People tend to spend between thirty and forty hours on the tests. Even for the ones with undergrad degrees in engineering, a thoughtful response drives three to five pages per scenario of narrative, diagrams and calculations. As one of the …umm..more challenged people in each class, I won’t admit to more than forty hours. And my solutions don’t have the elegance of some of the others, so they take more pages.
On the weeks we have take-homes, we get no problem sets.
Still have to fit in the “team project”.
I do not know how you guys ever managed to do MORE THAN ONE OF THIS KIND OF CLASS AT A TIME. My hat is off to you, truly.
I have stopped thinking about housing and cooking, and I buy extra hose and underwear online so that I can avoid doing laundry.
Best, Jane
Bravo, Greg. It took you a while, but that can happen when you are on the inside.
He will never work in this town again…
I guess it didn’t occur to the folks at CNN/Money that there are a lot of people who will never WANT to work in that town, EVER. And I suspect that this guy doesn’t ever have to work in that town again. I wish him well in his high-end equivalent of Oil City.
If he is starting his own hedge fund, there is nothing about saying that he can’t work at GS anymore because they don’t put the clients welfare first that will hurt him with recruiting investors. He won’t be able to access the super special initial prices on GS IPOs, but he probably wouldn’t have been able to do that anyway.
I’m sure the sentiment is honest, but I really doubt things have changed that much. I think he just finally made it far enough up the ladder to really get a good whiff of what was above him. It was always there, he just didn’t notice when he was the young, starry-eyed new guy.
Reminds me of the epiphany I had in the army after I became an NCO. Prior to that I thought the system was fixable if only the people in charge could see what I could see. Then I figured out that even if I was a 4-star general I couldn’t fix it. Then I got out.
a good whiff of what was above him. It was always there,
It was always there but I’m sure it has gotten worse the past 20 years.
Investment banks have always fleeced their plain old boring investment banking customers. Remember during the tech bubble when every company would “double” in value the first day? That made the insiders happy because they were suddenly twice as rich as they thought they would be, but it stiffed the company (the real client) for 50% of the working capital it could have gotten.
They have always sold off stuff they no longer wanted (probably for good reason) to people.
What might be newish is selling products that are completely inappropriate for the purchaser because the fee is larger. For example, a town or small city really needs to fund infrastructure with a fixed rate bond. It just does. The people are not that sophisticated and they need to be able to count on that cost so they can pay attention to other variable expenses like if the boiler in the town hall explodes or there is a really snowy winter and they need a lot more plows on the streets. They should never be offered an auction rate bond product (where the interest rate resets every month or even more often and the rate could easily go up if someone finds out that the boiler in town hall exploded or the winter has been very snowy). Oh, and the auctions on auctio rate bonds can fail completely causing the town to default because they can’t pay off the whole thing at once. But I bet the fees (recurring because the IB will get to do the auctions) are amazing.
You really need to go and read the whole op-ed.
Carl,
Did I ever tell you about the time I spent at Ft. Sill? I’d go down to the bowling alley at get $hit faced and bowl across the lanes instead of down them. This was after my wonderful experience at Shepard AFB tech school.
No, but I’ve had some similar bowling alley experiences. I never did figure out why the army liked bowling alleys so much.
A place to get $hitfaced is all it is.
The same nite I decided to bowl sideways, I got in a fight with a staff sergeant. Both of us were bloody. He accused me of hitting on his wife which I did not and he was the aggressor. Maybe I had his wife laughing her @ss off and he got pissed. Who knows. I was glad to get out of Lawton, OK and Lawton was thrilled to see me leave.
Yeah, post road to riches. He was all mouth after he loaded his pockets full of dough. Not impressed.
GS has sent a letter of apology to it’s clients for allowing such an ethical person to work there:
http://www.borowitzreport.com/
“At Goldman, we pride ourselves on our ability to scour the world’s universities and business schools for the finest sociopaths money will buy.”
Too funny.
“And normally we are able to ensure that after we buy them, THEY STAY BOUGHT. We apologize for the recent ‘issues’ a redouble our commitment to delivering to you, our customer, exactly what you have always been able to expect from us.”
What all these links say is that no one knows where this is going, but most believe we’re still screwed.
Screwed because of the massive run up in debt, government and otherwise, with only a modest de-leveraging thus far creating massive economic pain.
Reinhardt has been right before.
http://www.bloomberg.com/news/2012-03-11/financial-repression-has-come-back-to-stay-carmen-m-reinhart.html
They’ll to anything it takes to prevent the debt service burden from causing mass slavery. With less and less incentive to save, the response will be various forms of “financial repression.” A “war on savers” the rich will probably get loopholes enacted to avoid.
Attempting to suck more people into debt is a funny way preventing mass debt slavery.
To the best of my knowledge Ben Jones started this blog in 2004. I would consider that being a “whistleblower”. This was after some but before most of the damage was done by Lynn Szymoniak`s serial refinancing binge.
Date/Time: 9/15/2004 17:18:11
Consideration: $270,269.69
Party 1: SZYMONIAK LYNN E
Date/Time: 1/3/2005 11:28:53
Consideration: $415,000.00
Party 1: SZYMONIAK LYNN E
Date/Time: 2/15/2006 08:27:13
Consideration: $780,000.00
Party 1: SZYMONIAK LYNN E
Date/Time: 11/17/2006 09:14:37
Consideration: $376,000.00
Party 1: SZYMONIAK LYNN
Now Lynn (a lawyer) while searching for a foreclosure defence finds the heart of the matter (robo signing) mortgage securitization which was what had allowed her to borrow recklessly to the tune of, well to the tune of a lot (see above).
As part of the $95 million settlement with the nation’s four largest mortgage servicers Lynn Szymoniak will recieve 18 million dollars.
“Under the False Claims Act, the private person, also known as a “whistleblower,” is entitled to a share of the government’s recovery. In this matter, the whistleblower will receive $18 million from the proceeds of the settlement.”
“Whistleblowers play an important role in protecting taxpayer funds from fraud and abuse,” said U.S. Attorney Nettles. “Settlements like this one help maintain the integrity of the federal mortgage servicing process.”
I know that this makes some of you very happy. My question is am I the only one who is bothered by this?
Palm Beach Gardens homeowner gets $18 million in foreclosure settlement
by Kim Miller
Lynn Szymoniak
Palm Beach Gardens homeowner and foreclosure fighter Lynn Szymoniak is slated to get $18 million from the nationwide settlement with the country’s five largest banks that was filed in federal court Monday.
Szymoniak, who was featured on the CBS news show 60 Minutes last year for the work she did uncovering the robo-signing scandal, said this morning that her gain from the settlement seems “surreal.”
“I always tend to discount everything until it’s signed,” she said. “I knew it was part of the settlement in February, but not how much.”
Szymoniak’s settlement is part of a larger $95 million agreement reached with the banks and Bill Nettles, the U.S. District Attorney of South Carolina. That agreement is written into the $25 billion nationwide settlement between 40 state attorneys general and Bank of America, JPMorgan Chase, Ally Financial, Wells Fargo and Citigroup.
South Carolina began investigating allegations in the spring of 2010 that banks were involved in a nationwide practice of failing to obtain required mortgage assignments. The lack of appropriate assignments resulted in servicing misconduct and using false assignments to submit federal housing administration mortgage insurance claims, according to a press release.
The False Claims Act allows the government to bring actions against groups that knowingly use false documents to obtain government money or to conceal an obligation to pay money.
The lawsuit was initially filed by Szymnoniak under a whistleblower provision in the False Claims Act.
Under the act, the whistleblower is entitled to a share of the government’s recovery.
“By this agreement we are making an important first step to hold mortgage servicers accountable for fraudulent and abusive practices, not only in South Carolina but nationwide,” said Nettles. “It also demonstrates the role that whistleblowers can play in working with the government to return dollars to the federal treasury and to expose wrongdoing.”
I understand how you feel, jeff, but I bet she never sees a dime of it, or if she does, it will get eaten up by claims against her for something or another. She will curse the day she ever got that money, if she does get it, because she’ll spend the rest of her life defending it against one thing or another.
Don’t worry, be happy.
Return dollars to the federal treasury? Why did they leave the federal treasury in the first place? So the banks could be propped up and have enough left over to feed the beats?
“It also demonstrates the role that whistleblowers can play in working with the government to return dollars to the federal treasury and to expose wrongdoing.”
This only shows how truly corrupt and perverse the American Legal System has become. There is no justice here anymore. It’s all just a game of money-grubbing and seeing who can steal the most, all aided and abetted by “lawmakers”.
Goldman-Sachs is the lead crook in America, followed by the remaining bankster buddies. Amazingly, Goldman was MADE a “commercial bank” as a political favor to be able to siphon off free FED money. The Washington cronies saved this parasite company from bankruptcy so they could continue to do “god’s work”.
As for the “whistle-blower” claim, it’s ludicrous. EVERYONE knew this crap was going on and screaming about it here and elsewhere.
WE just didn’t have “law licenses” to go and file a suit. I guess that’s the big difference. This parasite had the “legal” means to siphon more off the government-media-bankster complex.
I HATE any system that rewards crooks. That is what we have here.
24 Responses to “Palm Beach Gardens homeowner gets $18 million in foreclosure settlement”
24
jeff saturday Says:
March 14th, 2012 at 12:29 pm
Do those of you singing the praises of Lynn Szymoniak think she is going care when you are thrown out of your houses with $2k for a U-Haul as per the agreement struck? If you do think again. Lynn Szymoniak is for Lynn Szymoniak. She proved it when she refied a million $ she knew she couldn`t pay back and she proved it again giving her approval of this 18 million $ settlement for her and a $2k settlement for you. She is the same greedy being as the banksters you all scream about.
Sammy can run from his schaedenfrude-addiction, but he cannot hide from his intolerance of injustice. He will continue to smile at every hint of exposure of the scam that continues to unravel at a snail’s pace despite the obvious and deliberately heavy-handed attempts to manipulate reality by the morally corrupt greed-mongers in charge. How do I know this? I just know.
Comment by azdude
2012-03-13 08:20:40
I see the can kicking is still in place. One bubble to the next. Buy some aapl stock but dont get caught holding the bag when the smart money decides its time to sell.This economy is like a comedy skit.
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Great post.
I made an oath to stay away from this entire GovCorp driven mess for a while as it begins to consume me and my time. I’ve done well but find it hard to stay away from the HBB and great comments like the one above.
Thank you
Apple now has a market cap the size of the entire US retail sector.
I imagine this stock bubble will run into november then sh@t will hit the fan regardless of who is elected.
now is not the time to be short. you are fighting a printing press that is hell bent on keeping stocks up.
Do we go into another housing bubble next?
I don’t see how another run on shacks and shanties can occur without
a) dramatically higher wages
or
b) more phoney financing
This notion that QE is going to inflate anything is BS. It’s going to require $$$ in the hands of people. You get that by higher wages or phoney financing. I see neither happening.
So ask yourself…. where is the demand? I contend offshore shell companies formed by the Fed is driving demand.
It’ll inflate needs if it devalues the USD. Fortunately for us, we’re sucking less than everyone else, so Uncle Buck might not be in such bad shape, relatively speaking of course.
“Do we go into another housing bubble next?”
Posted: 01/19/2012 05:57:36 AM PST
Bidding wars
But there is evidence that the market is slowly reviving.
On the Peninsula, bidding wars are erupting as buyers scramble to snag homes before the Facebook initial public offering produces a fresh crop of millionaire homebuyers. And in Antioch in East Contra Costa County, first-time buyers are warring with investors for homes in the $200,000 range.
In the last half of the year, there weren’t enough homes to meet demand in the Palo Alto area, said Wendy McPherson of Coldwell Banker. “We spent the last half of the year absolutely hungry for inventory,” she said. “It became unbalanced, and we started having more buyers than sellers.”
Palo Alto “is going to set new all-time highs” this year, predicted Ken DeLeon of Keller Williams. “It will be higher than 2007, higher than 2000.”
“We’re seeing a lot of buyers trying to get in before the Facebook IPO — even the Facebook executives want to get in before it goes public,” DeLeon said.
One modest Palo Alto home listed at $2 million in a coveted neighborhood sold for $2.45 million recently in a bidding war between “a Facebook person and an early Googler,” he said. The Googler won.
http://www.siliconvalley.com/ci_19769454 - 112k -
new economy meet old economy
this must be the information age I read so much about. How it will replace the industrial age which replaced farming which replaced hunting.
Facebook the new economy
Wake me when all those famous bids actually close. I heard that banks are pretty darn particular about handing out money now. Nowadays you need the full-fledged snowstorm of paperwork, and actual cash, to buy.
Yes you’ll see few groups here and there with money, but not enough to pull housing out of the doldrums. Prices Where the Jobs Aren’t will continue to crash. Prices Where the Jobs Are will be heavily dependent on housing type and neighborhood location, but on average will bounce along the bottom.
I can’t help but be a bit depressed if this is the bottom in my little neck of “where the jobs are”. It never even really went down.
I’ll admit I added to that marketcap, bought a mac mini last week i have digital performer and finally got final cut pro last night….so I have to learn some new things…..
Already have an old power pc g4 laptop which cant be upgraded anymore, some flash sites like stickam just wont work..(new ipad???)..now what can i use 2 old xp pro pc’s for….hmmmmm
Metro foreclosures rise in February
“New foreclosure filings and sales in Colorado’s 12 most populated metro counties rose in February from January, according to a report out today from the Colorado Division of Housing.
Lenders filed 2,056 new foreclosure cases in February, up 6 percent from the 1,939 filed in January and 3.5 percent from the 1,986 started in February 2011.
The metro counties recorded 1,248 foreclosure sales, up 8.5 percent from the 1,150 completed in January and down 6.7 percent from the 1,338 foreclosure sales in February 2011.”
http://www.denverpost.com/business/ci_20170635/metro-foreclosures-rise-february
I forget, what is the average time from non-payment to foreclosure in the Centennial State?
Interesting that foreclosures are down in Weld and Pueblo Counties. Weld used to be foreclosure central.
‘It makes me ill how people talk about ripping clients off’: Goldman Sachs executive quits over firm’s ‘toxic’ culture in extraordinary resignation letter
Read more: http://www.dailymail.co.uk/news/article-2114829/Greg-Smith-resignation-letter-Goldman-Sachs-exec-quits-firms-toxic-culture.html#ixzz1p6NadxHo
I’m shocked I tell you. Say it isn’t so Greg.
I guess he figures he will never work there again? At least the dude has the balls to say how he feels.
As I have said many times: Goldman-Suchs is one giant world-wide SKIMMING operation. Nothing more. They provide no service to anyone other than themselves. But, they have the political connections to keep them in financial power, both here and abroad.
They need to be broken up under ANTI-Trust legislation and their Bank status REVOKED.
I know this will not happen because the majority of people are stupid and “informed” by the MSM. They don’t know how this impacts them, and don’t want to know.
With all the “talk” about “Hope and Change”, we can see that the Whitehouse Shill for Goldman doesn’t have any plans to upset the on-going rip-off of companies and individuals. The money-flows fund the political lobby machines. It’s a symbiotic relationship that just drains the life of the People for the benefit of the Rich.
It would be hilarious if this guy was short GS stock.
Ha!
Don’t count an army of Grey Panthers, armed with pitch forks and dimpled chads, out of the Fed’s political future just yet.
The Euro Crisis
Real-time updates and analysis of Europe’s debt crisis
March 8, 2012, 8:07 AM
Central Banks Feel the Heat From Savers
After years of holding official interest rates near zero, while pumping additional liquidity into the financial system, central bankers are starting to feel the heat from a constituency they have hitherto largely dismissed: savers.
The Federal Reserve’s decision to float the idea of “sterilized” quantitative easing is just the latest sign that central bankers are starting to pay attention to a growing rebellion. In sterilizing QE, the Fed hopes to convince savers that it isn’t embarking on a Weimar-type inflationary binge.
The European Central Bank has made it clear that it does not intend to repeat its LTRO program after the Bundesbank — which may only have rump central banking responsibilities but remains the voice of German savers — grumbled about the ultimate inflationary impact of the ECB’s near limitless supplies of cash to the euro-zone banking sector.
And the Bank of England has also been pursuing a campaign to win over the savers it’s tended to treat with contempt.
The monetary policy committee’s David Miles and Charlie Bean have recently argued that what savers have lost in the form of interest, they’ve gained in terms of asset-price appreciation.
It’s easy to see why central bankers might be interested in this constituency. Those with the savings most sensitive to inflation tend to be pensioners. And pensioners are not only a large constituency, but they also have a lot of political clout. Should central bankers get it wrong on inflation, central-bank independence is likely to go the way of the 25-cent chocolate bar.
Are these appeals anything more than PR?
Probably not.
“Sterilizing” QE is largely an irrelevance. What’s more, the tinder for an inflationary problem in the U.S. is already there.
…
The Federal Reserve’s decision to float the idea of “sterilized” quantitative easing is just the latest sign that central bankers are starting to pay attention to a growing rebellion. In sterilizing QE, the Fed hopes to convince savers that it isn’t embarking on a Weimar-type inflationary binge.
No the FED understands that if the money it is shoveling into the system all goes into food and fuel unemployment will rise GDP will stagnate or fall and pitchforks will eventually arrive on WS and White house. The FED wants the free money to go into housing and assets of it’s choosing.
Good luck with that.
the tinder for an inflationary problem in the U.S. is already there.”
yes but who could have seen it coming?
WILLIAMS: End Fed’s power; give it to free market
By Armstrong Williams
Sunday, March 11, 2012
ANALYSIS/OPINION:
Ron Paul wants to abolish the Federal Reserve. He may be right: It is hard to see how the Fed has enhanced our economy.
Since 1971, when President Nixon ended the gold standard, the dollar’s value has been more volatile than in any previous period, not only in immediate, day-to-day volatility, but also over the long run. People often marvel that a loaf of bread used to cost a dime, but they never ask why so much inflation has occurred over these past few decades.
There are several reasons, but the biggest is undoubtedly the Fed. By devaluing the dollar, like China is doing to the yuan, the Fed and its technocrats try to encourage our exports. But as we know, the market will not permit distortions, and will punish them: This is bad policy.
Quantitative easing, author Louis Lehrman says, is just “a euphemism for money printing or credit creation.” These excess dollars go abroad as reserves, and are then invested in U.S. securities to finance the deficit. So, we receive back what we give out: We buy without paying. If economic growth were this easy, why stop printing money?
…
Greenspan pretty much neutered the Feds regulatory power and gave it to the free market. How did that go?
Free market is definitely not what he gave it to. Corporate oligarchy lobbying arm might be somewhere closer to the mark.
Free Market is a euphemism for Corporate oligarchy manipulating markets and gov. When ever they want to justify rolling back regulation and allowing oligopolies they throw out the term free market.
Free market is definitely not what he gave it to. Corporate oligarchy lobbying arm might be somewhere closer to the mark.
He gave it to precisely what the free market becomes without strictly enforced regulations disallowing corporate oligarchy. Corporate oligarchy is an end result of the current “free-market” preached religion.
Successful capitalism is akin to a tended garden much more than it is akin to a field of wild weeds. There has never been and never will be a successful economy based on the current “free-market” preached religion. It devours itself in the name of free-markets.
Successful capitalism is akin to a tended garden much more than it is akin to a field of wild weeds.
Exactly. Although the weeds will tell you otherwise.
Very nice.
Unintended Consequences
By Eric Sprott
03/06/12
2012 is proving to be the ‘Year of the Central Bank’. It is an exciting celebration of all the wonderful maneuvers central banks can employ to keep the system from falling apart. Western central banks have gone into complete overdrive since last November, convening, colluding and printing their way out of the mess that is the Eurozone. The scale and frequency of their maneuvering seems to increase with every passing week, and speaks to the desperate fragility that continues to define much of the financial system today.
The first major maneuver took place on November 30, 2011, when the world’s G6 central banks (the Federal Reserve, the Bank of England, the Bank of Japan, the European Central Bank [ECB], the Swiss National Bank, and the Bank of Canada) announced “coordinated actions to enhance their capacity to provide liquidity support to the global financial system”. Long story short, in an effort to avert a total collapse in the European banking system, the US Fed agreed to offer unlimited US dollar swap agreements with the other central banks. These US dollar swaps allow the other central banks, most notably the ECB, to borrow US dollars from the Federal Reserve and lend them to their respective national banks to meet withdrawals and make debt payments. The best part about these swaps is that they are limitless in scope — meaning that until February 1, 2013, the Federal Reserve is, and will be, prepared to lend as many US dollars as it takes to keep the financial system from imploding. It sounds absolutely great, and the Europeans should be nothing but thankful, except for the tiny little fact that to supply these unlimited US dollars, the Federal Reserve will have to print them out of thin air.
…
the Federal Reserve will have to print them out of thin air.”
I’m sure there is a promise somewhere to pay them back from future taxes
so taxes will go up until they can’y anymore.
I expect a dollar reverse split 100 old dollars for 1 new dollar
workers will be made whole ( kind of ) those on fixed incomes who don’t work no
what other way is there ?
According to this writer, picking the pockets of savers is the way to save the economy.
Higher inflation will save the economy
Posted by Marjorie Pritchard
March 2, 2012 02:09 PM
By Rich Barlow
The Federal Reserve’s recent announcement that interest rates will stay low for the next three years confirmed how sick the economy remains. The Fed simultaneously declared it would hold inflation to just 2 percent annually. But that policy also is looking sickly. What we need is higher inflation.
At a time when businesses blame their slow hiring on consumers shunning their goods, sticker shock may sound like Kevorkianomics. Yet it’s not just some economists, including N. Gregory Mankiw, an adviser to George W. Bush, who’ve prescribed medicinal inflation during this recession. That best teacher of all, experience, suggests it could work.
Inflation helped end the two worst depressions in American history. Most people know that Franklin Roosevelt started jobs programs in the 1930s; fewer may recall that he also took the country off the gold standard to facilitate higher prices, which he declared good for the country. After the Great Depression, our grimmest economic crash was that of the 1890s, when unemployment approached 20 percent. We were on the gold standard then; the cavalry came to the rescue in the form of a string of gold strikes and improvements in gold refining. Both developments flooded the economy with gold; the money supply, prices, and prosperity mushroomed as a result.
…
To put it simply, our economy is a “churn” economy and pretty much always has been since the Industrial Revolution brought us the retail revolution.
Inflation will only save the system if there are people with savings that spend it, or workers can make more money, or unemployed people can go to work, or people can borrow. .
If I am already up to my neck in debt and spending 100% of my paycheck every month which most Americans are, how is inflation going to get me to spend more.
Advisor to G W Bush is not exactly a ringing endorsement.
Is this policy proposal a tacit acknowledgment that we are currently enduring a bubble as momentous as the South Sea Bubble of yore?
U.K. May Revive ‘Perpetual Gilt’ Used After South Sea Bubble
Robert Hutton and Keith Jenkins
Wednesday, March 14, 2012
(Updates with strategist’s comments starting in fourth paragraph.)
March 14 (Bloomberg) — Britain is proposing to revive “perpetual gilts,” first used in the wake of the 1720 South Sea Bubble crisis, to allow the government to borrow for as long as possible at record-low rates, according to two people familiar with budget discussions.
Chancellor of the Exchequer George Osborne will use his March 21 budget to announce a consultation on introducing government bonds of up to 100 years and reviving debt with no fixed maturity, a sort of bond first issued in the 19th century to put off repaying debt resulting from the South Sea Bubble.
The cost of 10-year borrowing for the U.K. fell to a record low earlier this year as investors sought a haven from the euro- region debt crisis and the Bank of England bought gilts to help stimulate the economy. Yields on benchmark gilts reached 1.92 percent on Jan. 18, the lowest since Bloomberg started tracking the data in 1989. The securities currently yield 2.27 percent, compared with an average of 4.22 percent over the past decade.
“A 100-year bond is effectively a perpetual,” John Wraith, a fixed-income strategist at Bank of America Merrill Lynch in London, said in a telephone interview today. “It does have some appeal to pension funds. An investor will secure a longer period of fixed cash flows.”
…
Uh oh…
We’ve just been told the world economy is still in heap big trouble.
Permanent debt…I like that idea!
Op-Eds
Financial Repression Has Come Back to Stay: Carmen M. Reinhart
Ball and Chain Illustration by Matthew Hollister
By Carmen M. Reinhart Mar 11, 2012 4:00 PM PT
As they have before in the aftermath of financial crises or wars, governments and central banks are increasingly resorting to a form of “taxation” that helps liquidate the huge overhang of public and private debt and eases the burden of servicing that debt.
Such policies, known as financial repression, usually involve a strong connection between the government, the central bank and the financial sector. In the U.S., as in Europe, at present, this means consistent negative real interest rates (yielding less than the rate of inflation) that are equivalent to a tax on bondholders and, more generally, savers.
In the past, other measures also included directed lending to the government by captive domestic entities (such as pension funds or banks), explicit or implicit caps on interest rates, regulation of cross-border capital movements, and (generally) a tighter coordination between governments and banks, either explicitly through public ownership of some institutions or through heavy “moral suasion” by officials.
Central banks in both developed and developing countries are being subjected to complementary pressures. Emerging markets may increasingly look to financial regulatory measures to keep international capital “out” (especially given the expansive monetary policy stance pursued by the U.S. and Europe). Meanwhile, advanced economies have incentives to keep capital “in” and create a domestic captive audience to absorb the financing for the high existing levels of public debt.
…
Emerging markets may increasingly look to financial regulatory measures to keep international capital “out”
what!! don’t they want housing bubbles too ?
The Next Bursting Bubble
By Dan Newman
March 13, 2012
Try to name the type of debt associated with these figures: total debt of $870 billion, 66% of which is owed by those under 40 years old, and an estimated 21% of which is delinquent. It might sound like a subprime mortgage snapshot from 2007, but these numbers exist right now — in student debt. Here are the facts behind this bubble and what it means for the future.
…
Won’t be much “household formation” happening from this demographic.
Tell me about it. I am hearing almost weekly about people having to move back home. All of them have at least an undergrad and some have master’s degrees. Some examples:
1. Woman 40+ who lost her job at a university and has not been able to get anything full-time for 3 years. Lives in her father’s basement.
2. Guy mid-30s who is a federal employee but receives no benefits. He works at one of the federal parks and gets laid off every fall and rehired in the spring.
3. Woman mid-20s who is working as a store clerk. She and her boyfriend both lost their first professional jobs and haven’t been able to get anything comparable. They both moved back home. Her boyfriend now lives in New Jersey and they see each other weekends.
4. New grad. Went to Johns Hopkins and an expensive private school before that. Only job she has been able to get is at J. Crew.
5. Just met two more families whose 20+ daughters moved back home because of job loss.
Cranky, not replying to this post, but didn’t get a chance to thank you yesterday for the song: “Just Walk Away, Jose.”
Glad to pinch hit for Jeff Saturday when he is not around.
Footnote: I actually once performed that song in the backup band for Dionne on a gig…
Yay!!!!! Bravo, Greg — well done!!!
Hopefully this is the start of a trend to clean up the Wall Street investment banking cess pool.
Bridge burning at Goldman
Goldman Sachs executive Greg Smith resigns in dramatic fashion: via a blistering op-ed in the New York Times that predictably ignited a social-media firestorm. Are his grievances valid? (First Take)
——————————————————————————–
March 14, 2012, 7:43 am
Investment Banking
Live Blog: Reacting to Goldman Executive’s Resignation Letter
By ERIC OWLES
Justin Lane/European Press Photo Agency
A Goldman Sachs executive blamed the erosion of firm culture on top management, including Lloyd C. Blankfein, left, and Gary Cohn.
In a frank opinion column for The New York Times, Greg Smith, a Goldman Sachs executive, explained on Wednesday why he was resigning from the firm.
Related Links
Op-Ed: Why I’m Leaving Goldman
A Public Exit From Goldman Sachs Hits a Wounded Wall Street
Mr. Smith, who was head of Goldman’s United States equity derivatives business in Europe, the Middle East and Africa, said clients’ interests were sidelined in how the firm operated and thought about making money. Mr. Smith placed the blame for this cultural change on top management, including Goldman’s chief executive, Lloyd C. Blankfein, and its president, Gary D. Cohn.
…
That’s what happens when you pay people so much they don’t need to get another finance job as long as they live.
The Wall Street firms are expected to redouble their efforts to have their staff blow all their money on hookers and cocaine, to keep them doing what it takes to “earn” more.
Sorry for off-topic post but I am looking for some advice and know that there are quite of few knowledgeable folk here…
I am looking to buy a few physical gold and lots of silver as a diversification. What should i buy - coins, bars, junk silver, .. I already have a few mining funds but am looking for physical. If I buy gold and silver coins, what is a good, safe and cheap avenue. I looked at apmex and was wondering if there are any others…
Thanks for any advice
I’ve purchased from scpm.com before, but I prefer APMEX. Of course there’s always your local coin shop as well…
Dollar cost averaging (whether buying physical or anything else)…
buy a few physical gold and lots of silver as a diversification.
Call your local coin shops and ask them how much over the spot gold price they charge for 1 ounce Eagles or Krugerrands and compare. Years ago my local shop was cheaper than online shops. The easiest and cheapest .999 pure or 24 carat coin to buy is the American Buffalo or the Canadian Maple Leaf. Some people like the .999 pure better than the 98% pure coins. Internationally the .999 pure sell for a slightly higher premium.
A 1 ounce coin is cheaper to buy than buying (2) one-half ounce coins.
Silver one ounce coins sometimes have a very high premium over spot prices so junk silver can be a good way to buy silver and big, heavy canvas bags of dimes and quarters can be fun to play with and throw at stuff.
Thanks to all replies. My local shops have it for cheaper as well - and no shipping involved !
My local (PM) shops have it for cheaper as well
Also on Gold/Silver: Some states have no sales tax or no sales tax if you buy over a certain amount. In Cali it was over $1,000. If your state charges sales tax, it might be cheaper to buy online.
Is it true, though, that either this year or next, the PM sellers have to start reporting trades to the IRS? To track basis & capital gains.
Or was that called off?
I am looking to buy a few physical gold and lots of silver as a diversification.
This is not the precious you are looking for…
In all seriousness, you decided not to buy any gold or silver, right? Or the question was just hypothetical?
Were anyone to ask, I would have to say all my guns and precious fell overboard during a boating accident. Bottom of a lake somewhere…
Don’t forget jewelry. Easy to sell.
Easier to move in/out of the country than coins.
Don’t forget jewelry. Easy to sell.
And if you do it right, you get the added benefits of a happy significant other… “Happy wife, happy life” and all that.
A friend of mine moved over 500K overseas using
his wristwatch. He was a philatelist and made a deal with a US dealer and an overseas buyer with a 5% commission between the two parties. He put the stamps inside the back of his Rolex and walked through customs.
Goldman exec waxes philosophical, resigns
March 14, 2012, 7:40 AM
You could almost hear Lloyd Blankfein’s response: “It’s not show friends, Greg, it’s show business.”
But, in reality, the oft-vilified Goldman Sachs chief executive probably won’t say anything at all, publicly at least, after one of his minions aired out his “Jerry Maguire moment” in the New York Times editorial pages on Wednesday. Read the full letter.
“TODAY is my last day at Goldman Sachs,” wrote Greg Smith, who was set to tender his resignation as executive director and head of the investment bank’s U.S. equity derivatives business in Europe, the Middle East and Africa.
“After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity,” he explained. “And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.”
…
“U.S. Home Supply Drops as Demand Climbs, Realtor.com Says”
http://www.bloomberg.com/news/2012-03-14/u-s-home-supply-drops-as-demand-climbs-realtor-com-says.html
Once again, Realtors misrepresent the truth to the public.
This is exactly what facebook Realtor has been saying about metro Denver.
Maybe the Mormons can save the Great Vampire Squid from its instinctive blood sucking tendencies.
Special report: Goldman’s promised land: Salt Lake City
By Lauren Tara LaCapra and Katya Wachtel
SALT LAKE CITY | Fri Mar 9, 2012 11:14am EST
(Reuters) - Some 2,000 miles away from the hustle and bustle of Wall Street, Goldman Sachs Group Inc has found an unlikely second home: Mormon country.
Low taxes and a cheap but well-educated workforce persuaded Goldman to go on a hiring binge in Salt Lake City. The bank now employs 1,300 people here — putting Utah’s capital city on a path to become Goldman’s fourth-largest global operation, behind only New York, New Jersey and London.
At a time when the Wall Street firm has cut thousands of jobs elsewhere, Goldman plans to grow in Salt Lake City. Already, Salt Lake City accounts for just under 4 percent of the global investment bank’s total headcount, double the staff it had in Salt Lake City only two years ago, and that figure continues to climb.
During a February 28 visit to Goldman’s office on Main Street, just a few blocks from the headquarters of the Mormon Church, Chief Executive Lloyd Blankfein told employees of plans to hire an additional 300 workers by year’s end.
Goldman’s image as a Wall Street powerhouse dominated by hard-charging traders and swaggering bankers might seem at odds with Salt Lake City’s reputation as a family-oriented town where the bars close early and the Church of Jesus Christ of Latter-day Saints is the most powerful local institution.
But by bulking up in Utah, which boasts one of the lowest corporate tax rates in the United States, the bank is taking advantage of a series of lucrative tax breaks offered by the state to woo its business.
Several former and current employees say that dozens of technicians, developers, accountants and research analysts on the East Coast have been replaced by less expensive staff in Utah.
A Goldman spokesman would not comment on that, or on how Utah affects the bank’s overall tax bill. He and others at Goldman acknowledge that cost-cutting was initially the driving force behind its Utah expansion, but they say the local talent pool has been more impressive than the money saved.
“The cost savings have become less interesting than the quality of people we can retain,” says David Lang, a managing director who heads Goldman’s Salt Lake City operation. “We would expect that one day we can export the talent from here. We have groups and teams here who interact with our global operations abroad every day.”
Goldman’s move out West underscores how for major investment banks, proximity to Wall Street means less and less when it comes to support staff, trade processing and even research.
…
There will be a culture clash eventually. Just like I said about Mitt a while back, Mormon businessmen surf the gray areas as hard as anybody else…maybe even harder. But once you cross the line into black and white most of them won’t continue to participate. Better keep those workers at a low level and not let them see the sausage actually getting made or it’ll all fall apart…
I remember Mitt saved the 2002 SLC Olympics from a slide into financial scandal…perhaps SLC Mormon culture can have a similar salutary effect on Gollum.
Yeah…right.
Agreed, the LDS “wholesome” image is pure propaganda. Just because you have a Suburban full of kids and you play boardgames with them on Fridays doesn’t mean you have above average ethics.
‘…the LDS “wholesome” image is pure propaganda.’
All the evidence I see up close and personal suggests you are wrong.
Agreed, the LDS “wholesome” image is pure propaganda. Just because you have a Suburban full of kids and you play boardgames with them on Fridays doesn’t mean you have above average ethics.
Ahh yes….. the e-vang imagery…… the pasty white, suburban fairy tale. Slap the feel good verbage on it like “family”, “patriotism” and throw in a SLOBurban, wife dressed like a phony prude, picnic and parade and what do you get?
Pure, unadulterated theological bull$hit.
All the evidence I see up close and personal suggests you are wrong.
At a prominent place of employment in my litte burg it was well known that the managers who were LDS would treat fellow LDS’ers favorably. Some even tried to subtly coerce subordinates into considering becoming LDS. Eventually word got to HQ in Palo Alto and that was rectified.
I also recall reading on this forum that SLC is quite the hotbed for scamming and fraud.
Ahh yes….. the e-vang imagery…… the pasty white, suburban fairy tale.
Which is ironic as Evangs hate Mormons. Yet in the image department the LDS have IMHO out “Evanged” the Evangs.
Also, here is some food for thought. While the LDS love to promote the wholesome family image, they not only allow divorce, they have a Temple ceremony for divorce.
Don’t believe me? Just google “LDS Temple Divorce”
Evangs / Mormons
Which would be more fun at a party or a BBQ?
Which would be more likely to help out a down and out Mongolian tweaker?
the managers who were LDS would treat fellow LDS’ers favorably
I think that’s true for most minorities. If not, how do you explain Adam Sandler’s movie career?
Which would be more fun at a party or a BBQ?
My bet it on Evangs. Most of the Evangs I know (granted, not many) have some wild experience and stories to share with you.
Evangs aren’t all hard core teetotalers like Mormons, so some might be a bit more fun at a party.
When she was a teen my wife lived in Tooele, UT. Being non LDS meant she was pretty much ostracized socially.
I think that’s true for most minorities. If not, how do you explain Adam Sandler’s movie career?
I’ve always thought that when he “acted” he was just being himself.
The jobs described are totally back office stuff. Back office jobs at GS are more likely to need skills and pay pretty well than other back office type jobs, but it is support stuff, not core buesiness stuff. They will have no effect on the decision makers.
All though coffee and alcohol are forbidden, SLC has the highest Valium and anti-depressant usage in the country.
“I also recall reading on this forum that SLC is quite the hotbed for scamming and fraud.”
Yes, but I suspect that reflects a culture of mutual trust fostered by a church that encourages brotherly love between all people. And I mean that with utmost sincerity.
SLC has the highest Valium and anti-depressant usage in the country.
All prescribed, of course. It’s true. LDS people debate whether their lives are really that much more depressing than everyone else’s or whether they’re just more willing to go to the doctor about it. Everyone else has the option of self medicating with other substances.
From, …”Greed is Good!”
To, … “Greed is God-like!”
Pattern$ of Behavior$ taken to a Religou$ level of Divine manife$tation$.
Choir $ing$:
“Ode-to-Joy$”
They hired Mormons because they want people who have been trained their entire lives to engage in situational ethics.
Hey Jethro…. what’s the status of your offer on that shanty?
My Realtor says the other Realtor has heard nothing from the bank. Whoever or whatever the bank is.
PS
It was hard to type that R word but I guess we are trying to move in a different direction.
You mean your Liar.
Check to see what your the state law is for REO or SS’s. Many states tightened the response time on bank reponses to offers.
Interesting piece written by a top executive at Goldman Sachs, on why he is leaving the company. Could be some kind of head-fake or gimmick, with the ‘putting the client first’ stuff - like that’s ever BEEN a priority - but still, makes for some interesting reading.
Op-Ed Contributor
Why I Am Leaving Goldman Sachs
By GREG SMITH
Published: March 14, 2012
But this was not always the case. For more than a decade I recruited and mentored candidates through our grueling interview process. I was selected as one of 10 people (out of a firm of more than 30,000) to appear on our recruiting video, which is played on every college campus we visit around the world. In 2006 I managed the summer intern program in sales and trading in New York for the 80 college students who made the cut, out of the thousands who applied.
I knew it was time to leave when I realized I could no longer look students in the eye and tell them what a great place this was to work.
http://www.nytimes.com/2012/03/14/opinion/why-i-am-leaving-goldman-sachs.html?pagewanted=1&_r=1
PS: The thought of college elites being molded by GS is a bit disconcerting.
PS: The thought of college elites being molded by GS is a bit disconcerting.
I’ve been disconcerted for a while now…
It’s disconcerting the same way pillaging, plunder and mayhem are “disconcerting”.
Coming $oon!: Low-tide …
(my, my, my, look at all this debri$ that’s washed ashore.) :-/
“CalPERS has assets of about $233 billion and administers retirement benefits for more than 1.6 million state, local government, and public school workers and retirees.”
Lower expectations at CalPERS; bigger bills for cities, schools:
March 13th, 2012
posted by Teri Sforza, Register staff writer
America’s largest public pension system is about to swallow a bitter pill — and the pain will be felt in most every city in California.
Critics have derided the California Public Employees Retirement System for years over its allegedly rose-colored glasses: CalPERS, and most every other public pension system in California, officially expects to earn 7.75 percent on investments.
Last year, CalPERS earned 1.1 percent.
The Orange County Employees Retirement System earned just 0.74 percent.
“…officially expects to earn 7.75 percent on investments.
Last year, CalPERS earned 1.1 percent.
The Orange County Employees Retirement System earned just 0.74 percent.”
I don’t suppose Quantitative Sleaze had anything to do with those dismal returns?
The billion right-off of bad real estate investments sure contributed.
Been working on my taxes.
I’m beginning to think all of the “parasites” have it figured out, and I should become one of them.
Maybe because the “ROI” on doing actual “work” in this country is extremely low. After expenses and taxes, my little part-time deals on the side are paying about $10/hour.
Maybe the “parasites” have figured out how to keep more of the money they earn.
Realtors Are Parasites®
Now you’re a RAPPER? -
Realtors in the crapper.
I’m a wage slave. I get 1099′d o n all of my outside stuff.
I claim zero exemptions on my regular W-4, but seems like I end up owing money every year. Even with all of my quarterly payments, I still had to write $6000 worth of checks last year to cover taxes……which put me behind the 8 ball for 6 months, money wise. Looks like this year is going to be a repeat.
I’m spending about $5-600/month on gas (and 10-15 hours/week) commuting between my regular and part time deals. I need to move closer to work, but I’m not convinced my current job is going to be a long term deal. Been beating the bushes for a new job since the middle of February……….nothing.
I’ve been thinking that the job market will get better if I hang in there long enough…….but I’ve been hanging in since 2009, and things still suck.
I’m seeing and hearing stories from all over the country that no one can find experienced/qualified help. Hasn’t affected the job market, or the pay scales. Free market my azz..
No, it isn’t “me”. I know a bunch of people locally and nationally, and it’s the same all over. The whole industry is built on the assumption of $40K year labor.
And the sad part is you could probably live on $40k a year if they just let price discovery for housing and a few other propped up industries find their true market balance.
I was once offered a little side work.
Factor in that the federal, state and local tax bracket for the extra work would be based on the very high marginal rate on top of my and my wife’s regular income. And paying both halfs of FICA. Then the extra time and effort to complete a Schedule C.
I said forget it.
I guess it depends on the hourly rate. I’ve been doing some “expert witness” research lately. It pays $125/hr. Definitely worth my time.
I did mine over the weekend, did a final review this morning and mailed them over lunch. Interest income was distressingly low. I remember when that would cover a month and a half’s rent each year.
Used to get $500 to $600 per month on CDs. Now less than $100.
Our income tax refund should be bigger than last year’s. In this case, that’s not progress toward retirement.
I bought some pre IPO stock back in 2006 and sold last year for a 17x gain. Hardly paid any taxes on it. I thought I would be slamed, nope.
working is for suckers now if I can just figure out how to be rich and live off long term capital gains ..
working used to be low risk low reward before the new economy
‘I’m beginning to think all of the “parasites” have it figured out, and I should become one of them.’
Reminds me of a recent discussion I had with a trumpet teacher I know through my music circle, who is looking for a home to purchase. I suggested he figure out how to set it up as a tax deduction, at least for the portion of the place he uses as his studio. He indicated that wouldn’t be necessary. On his dad’s advice (a Realtor®), he takes all his income in cash, which makes paying taxes unnecessary.
So his tax returns, which he’ll need to provide to get a loan, will show little or no income.
Oops!
And he’d better hope that the IRS not get wind of his “tax innovation”
LOL. Gotta love that tax-free money!
Hi Guys - General Help Needed!
Ok, so I may actually be looking to buy (thus ensuring that a MAJOR price drop is coming) in KS. I need some advice on the type of loan to get. I’d like to put as little down as possible and since I haven’t owned in 12 years I qualify as a first-time homebuyer.
I’m thinking the FHA with 3.5% down is my best bet. I’ve talked to Quicken loans and it seems pretty straight forward and no nonsense. So some questions for the experts here:
1.) Is FHA my best/cheapest choice long-term if I don’t want to put down 20%?
2.) Will every mortgage lender have standard fees/costs on the FHA? (Quicken says they do.)
3.) Are there any loans left that don’t have PMI, even if I have to pay a higher interest rate? (Not sure I want to do that.) Or, if you’ve worked with FHA before, is the PMI assumed in the interest rate as I heard one place.
4.) Does anyone offer therapy sessions to a confirmed, crotchety bear who is actually buying?
I’m not sure I’m going to buy, but if I don’t I have to spend at least $1,000 to put up a privacy fence so the stupid mutts quit escaping and getting arrested. (Oh wait, I’m the one who HAS to go to court on a 1st offense! The dogs just sat there and laughed as animal control wrote me up. (And I don’t blame AC - loose dogs is not a good thing.)) And I want a house. The one I’m looking at today is beautiful and may be perfect for me and my business. More than I wanted to spend, but still less than three times job income and business income just a bonus.
TMI I’m sure, but anyone who knows about mortgages please help!
Thanks,
SD Bear (now residing in KS.)
(now residing in KS.)
Which part?
Pittsburg. Yes Pittsburg, KS.
I’m half an hour away from OK. And MO. And AR. The foot of the foot of the Ozarks.
(PS If you’ve never been to Arkansas you need to go. It’s the most beautiful state I’ve ever been in and I’ve been to a lot of them.)
Pittsburg, KS.
College town. I like college towns. I’ll bet you can buy for the cost of rent there.
If you’ve never been to Arkansas you need to go. It’s the most beautiful state
I have college road-trip stories about Arkansas. Camped and floated the Buffalo River, Hwy 7 “crooked and steep”, found a forest keg party in the middle of nowhere “Flippin AK” in a dry county I think (“Y’all can drink our beer but don’t smoke any dope and don’t mess with our wimmens”) We won a riverside driftwood bonfire building contest, flames 60′ high? Arkansas is beautiful. I’ve been to 49 states so far. (only 8 more to go so I’ve heard)
“Flippin AK”
Flippin, AR not AK. Although I’ve been to AK too.
I must not have gone to the right part of Arkansas. I spent most of my time their toward the northeast corner and it was nothing special compared to where I grew up in Wyoming.
Carl - I’m talking the Ozarks - coming from the southwest corner in fall. Absolutely amazing. Of course, this was after 9 years in inland San Diego. Not exactly the most beautiful place on earth. Or in California. Or in San Diego.
Rio - Sounds like a good trip. One that I am about 20 years too old for.
Haven’t been to AK yet, but like a good little tourist I am taking a cruise this fall and am really looking forward to it. It’s so nice to have low housing expenses and be able to do things like travel!
Haven’t been to AK yet, but like a good little tourist I am taking a cruise this fall and am really looking forward to it.
You will LOVE it..
I believe the cheapest way to get a mortgage while only committing a small down payment is by getting a conventional loan with PMI. I know in AZ they were doing 5% down a year and a half ago. The nice thing about PMI is once you get down to 80% LTV it goes away. Ammortization and/or appreciation can take care of that on it’s own or you can pay the balance down yourself at any point. With an FHA loan, it all gets paid up front (usually via a higher interest rate) so the only way to ever get a more competitive monthly payment is to refinance.
Is Kansas a recourse state? If so and if you have any assets worth suing for, I’d just put at least 20% down and get the best rate possible and be done with it.
Get one of them under ground doomsday condos. Won’t need to worry about a fence.
Couple of questions for the collective HBB brain:
Is it possible to get a list of houses that were listed on MLS and then de-listed (did not sell)?
How about an easily accessible list of (last) sales prices for all homes in a given area (to find underwater homeowners)?
Is there any way to get lists of pre-foreclosures and foreclosures without paying a web site? Banks are sitting on their REOs - I’ve watched houses go up for auction, not get bought, go back to the bank, but not come on the market.
“I’ve watched houses go up for auction, not get bought, go back to the bank, but not come on the market.”
BINGO
And it’s been going on since 2008. In fact there are still houses out there that I saw listed in 2008 that were never sold that magically pop up for sale years later.
This charade has gone on long enough.
Found this kind of interesting. The top US 400 income earners’ share of total Adjusted Gross Income has gone from 0.52% of the total to 1.31% of the total:
http://www.irs.gov/pub/irs-soi/08intop400.pdf
Trickle down works! Less trickles down
The top US 400 income earners’ share of total Adjusted Gross Income has gone from 0.52% of the total to 1.31% of the total:
And: The top US 400 income earners have more wealth than 150 million Americans. (That’s half of all Americans combined folks)
And: The top 400 pay about 17% in Federal taxes. “Free-market” America is a bad joke being played on the middle-class.
http://www.politifact.com/wisconsin/statements/2011/mar/10/michael-moore/michael-moore-says-400-americans-have-more-wealth-/
“Trickle down works!”
What kind of effluvia are we talking about here?
All hail Big Brother
A new plan from the British government will use closed-circuit television (CCTV) cameras at gas stations that will automatically prevent uninsured drivers from filling up their gas tanks—that is, until their vehicle information has been logged in the system.
I wish they would do that in Texas. Traffic jams would be a thing of the past and gas prices would plummet.
All hail the Allman Brother and Dreams I’ll Never See. Better yet… Molly Hatchet’s version.
FYI, there is a ton of data on the Commerce Department’s two main sites:
1) http://business.usa.gov/
2) http://www.commerce.gov/
It’s useless, though — just ask Rick Perry.
Bernanke Says ‘Frustratingly Slow’ U.S. Growth Impedes Lending
By Joshua Zumbrun on March 14, 2012
Bloomberg via Businessweek
Federal Reserve Chairman Ben S. Bernanke said the weak U.S. economy impedes efforts by banks to make profitable loans.
Community banks are “facing difficult challenges,” Bernanke said. “Their close ties to local economies are, on balance, a source of strength, but a drawback of those ties is that the fortunes of communities and their banks tend to rise and fall together.”
[comment: Gee, you think that has something to do with having to compete with the Too Big To Fail banks?]
http://www.businessweek.com/news/2012-03-14/bernanke-says-frustratingly-slow-u-dot-s-dot-growth-impedes-lending
Bernanke Says ‘Frustratingly Slow’ U.S. Growth Impedes Lending
Impedes lending? You mean the Fed lending money to the Banks for 0% and then the Banks lending that same money to the Federal government and the taxpayers at 3-4%? That lending????
No to mention the myriad other fees on ATMs, credit cards, debit cards, service fees, etc.
Banks have it rough. Lay off ‘em.
Talked with my brother who’s in the Border Patrol this weekend.
Says, as far as they are concerned, Marijuana is now defacto-legal in California………..anyone that wants to get a “medical marijuana” card can get one.
Hasn’t slowed down the cross border marijuana traffic, as so many have asserted would happen if it was legal. Nor has the cross-border meth/coke traffic. Last time I heard, nobody was advocating legalization of them.
So, the narco-war in Me-hee-co will continue for the forseeable future.
In Mono county California there were 2 medical marijuana dispensaries. The district attorney wanted them gone and the feds came in and threatened to prosecute both dispensaries. One closed down in response and the other is still operating.
Close to legal on the state level but not on the federal. Enforcement is selective.
Legal dispensation doesn’t mean legal grow operations.
Well a good friend of mine is a legal grower and is making pretty good money and paying a lot in taxes and fees. This is why the states like it. All that money was under the table before. I imagine the profit margin on illegal drugs is less.
Also a lot of marijuana probably goes through California to other places, and those using meth and coke often use marijuana as well and probably continue to buy it from the same sources. Thus not all the use is going to be replaced by legalizing it. The legalization also comes with a lot of strings attached that keep a lot of people from buying it legally.
I recall close ties to Gollum didn’t work out so well for Meg Whitman’s run for CA governor.
Maybe it’s different for presidential candidates?
Goldman Sachs a key player in managing Romney’s wealth
Romney’s tax returns show portions of his family fortune in an elite division of Goldman open only to clients with more than $10 million to invest and another in bank-run hedge funds.
By Nathaniel Popper
January 24, 2012, 10:30 p.m.
Much of Mitt Romney’s millions has come from his relationship with the biggest name on Wall Street: Goldman Sachs.
In the personal tax returns released by Romney’s presidential campaign Monday, Goldman is revealed as one of the central players involved in managing his family’s massive wealth.
A significant proportion of the Romney family fortune is parked with an elite division of Goldman that is open only to clients with more than $10 million to invest. Another chunk of the fortune is invested in Goldman-run hedge funds, which like all hedge funds are open only to millionaires.
One of the most profitable single investments visible in Romney’s recent tax returns came from the sale of shares in Goldman itself. He was among a select group of investors allowed to buy Goldman shares on the day the bank went public in 1999. By the time 7,000 of the shares were sold by Romney’s estate in 2010, they netted a $759,000 profit.
“You have to be a favored person to get that kind of thing,” said Charles Geisst, a former banker and professor of finance at Manhattan College.
Goldman has a long history of quietly catering to America’s elite. Since the financial crisis, though, the firm has come under public scrutiny for its massive profits and close ties to the country’s political leadership.
…
Apparently not all Goldman Sachs employees pack bazookas; some favor howitzers.
Goldman Sachs executive’s parting shots shock Wall Street
A departing executive accused the firm in a newspaper column of losing its moral compass and being overtaken by a greed-infested corporate culture.
People come and go from Goldman Sachs’ headquarters in New York. A departing executive wrote in an essay that the firm had lost its moral compass. (Mark Lennihan, AP / March 14, 2012)
By Walter Hamilton and Nathaniel Popper, Los Angeles Times
March 14, 2012, 6:31 p.m.
Reporting from Los Angeles and New York—
Goldman Sachs Group Inc.has weathered a lot of criticism over the years, but nothing like the broadside that hit it from inside.
A departing executive in the firm’s London office accused Goldman in a newspaper column Wednesday of losing its moral compass and being overtaken by a greed-infested corporate culture.
“I can honestly say that the environment now is as toxic and destructive as I have ever seen it,” Greg Smith, who quit as head of the firm’s U.S. equity derivatives business in Europe, wrote in an opinion piece in the New York Times.
“It makes me ill how callously people talk about ripping their clients off,” Smith wrote. “Over the last 12 months I have seen five different managing directors refer to their own clients as ‘muppets,’ sometimes in internal e-mails.”
Smith’s basic accusation — that Goldman pursues its own profit at the expense of its customers — is well-known to Wall Street insiders and has been a frequent refrain among Goldman critics who blame the firm for contributing to the 2008 global financial crisis.
But Wall Street was shocked by the public denunciation, and it set off a lively debate about everything from Goldman’s business practices to the motivations of its accuser.
“This is all over the Street. This is the talk of the town,” said Larry Doyle, president of Greenwich Investment Management and a former trader at several banks. “He just took a howitzer and blew the entire firm away.”
…
Goldman’s Double Game
By William D. Cohan on March 14, 2012
Goldman Sachs (GS) was once a punchline. During the Great Depression, the then-small partnership on Pine Street became a target of national ridicule because of a scandal involving the Goldman Sachs Trading Corporation, a publicly traded investment trust that blew up after the stock market crash of 1929. For years, comedian Eddie Cantor, who had lost $100,000 and sued Goldman for $100 million, made Goldman Sachs a running joke in his stand-up routines. In one of his bits, Cantor would appear onstage with a stooge who tried to squeeze juice from a dry lemon. “Who are you?” Cantor would ask. Without missing a beat, the stooge would say, “The margin clerk for Goldman Sachs.”
…
No heirs? Or getting while the getting is good? Lumber/supply business which has been in the same family since 1895 is now selling.
Mid-Cape Home Centers to be sold
“The family owned company that operates Mid-Cape Home Centers is expected to be sold by the end of the month, company officials announced Thursday.
Nickerson Lumber Co., which started in 1895, has 180 employees, according to its website. The company operates several stores across Cape Cod and the surrounding areas.
This will be the first time the business is not run by the Nickerson family.
Joshua A. Nickerson, Jr, the chairman of the board for the lumber company, said the sale makes sense for the long-term future of the business.
“When you represent the third generation, and there is no heir, it is important to plan for succession,” Nickerson said in a press statement. “As I told the employees and managers, it would be have easier not to plan, but then my estate would have liquidated the business and sold the assets.”
The buyer is Duxbury resident Jeff Plank, according to the press release. ”
Ha! Ha! Jeff Plank! I get it!
http://www.capecodonline.com/apps/pbcs.dll/article?AID=%2F20120315%2FNEWS11%2F120319857