Bits Bucket for April 18, 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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Debt, or smoke and mirrors?
The Fed has increased its balance sheet by a factor of 100 maybe the past 4 years but what did they produce in order to do that? Nothing but numbers as far as I know. Now who can do something like that and it can be real? Come on.
Therefore, what meaning does the debt that they created have if push comes to shove? What? They’re going to take my sandwich away that I bought last year on my credit card?
IMO, much of this debt everybody thinks everybody owes the banks is an illusion and the PTB are working overtime to perpetuate the illusion.
Proof? TARP, the bailouts etc. Any “money” ever needed so far has been there. Trillions.
“Nothing but numbers as far as I know. Now who can do something like that and it can be real.”
Corporations do this all the time. They pay their employees real money today and promises of real money tomorrow, paid out after the employees are retired.
If the promises are not fulfilled - well, shucks who could have known that the pension stash they had put away would not have earned the eight-and-a-half-percent as they projected.
People laugh at cash but cash is REAL - real as in one can trade in cash for some nifty tangibles such as food. Promises of cash are another matter.
You have an interesting point of view, in that you have “faith” in the currency called “cash”. But always remember that a “fiat” money system, whereby the FED can create as much “cash” as they want without any “support” is only good so long as everyone else believes that they can buy real things with “cash”.
When hyperinflation takes hold, people are desperately trying to DUMP their “cash” as fast as they can to buy REAL commodities that they can TRADE for food or clothes or a place to stay.
The value of cash is easily destroyed. There is not a single FIAT paper currency system that has survived. Ever. There are Countless examples of failures from around the globe.
The FED has destroyed the value of the “dollar” by about 96% since the inception of that hideous and odious organization. If you held “cash” since 1970, you are a LOSER. A big loser.
Cash is good in Depressions, when cash is scare. Debts have overwhelmed the supply of money. Bernanke is working hard to destroy your money so you and I will go to work to get more money to pay for inflated prices of GOODS. He wants to cut your SAVINGS down to size. I think he is doing a good job destroying the value of cash. These things take time, but in the end, you may want to have some of your “cash” in GOLD or OIL. or some other “tangible” thing.
Even real estate is better than cash if Bernanke wins the savings war.
‘When hyperinflation takes hold, people are desperately trying to DUMP their “cash” as fast as they can to buy REAL commodities that they can TRADE for food or clothes or a place to stay.’
I see no signs of incipient plans for hyperinflation, do you?
Why even bother to discuss scenarios that are so implausible?
April 16, 2012, 3:30 p.m. ET
Fed’s Bullard: Inflation Target Consistent With Fed’s Mandate
By Michael S. Derby
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)–The Federal Reserve’s recent adoption of a formal inflation target is entirely in line with its congressionally determined mandate, Federal Reserve Bank of St. Louis President James Bullard said Monday.
“Inflation targeting is perfectly consistent with the Fed’s dual mandate,” Bullard said, and this policy is well suited to deal with the contingencies the central bank will face.
“Naming an explicit numerical inflation target is neither hawkish nor dovish,” Bullard said. He explained, “It is simply a recognition that the central bank controls the medium- to long-run rate of inflation, and that in order to minimize uncertainty the central bank may as well say what it is trying to achieve” rather than keep its target hidden.
Earlier this year, the Fed finally acknowledged that it wants to keep inflation around 2%, formalizing what had been referred to as an implicit goal. The adoption of the target had been the topic of much discussion for years, and regardless of their disposition, Fed officials have agreed on the prudency of keeping inflation around this level.
“Since the central bank controls the inflation rate, there seems to be little to be gained from ‘hiding’ the inflation target,” Bullard said, because keeping it under wraps simply introduces uncertainty into the economy.
…
The FED is lying constantly about “inflation”. Go to the grocery store, or buy some gas. Hyperinflation happens when the system of credit goes out of whack and too much “Credit” and money gets introduced. I DO believe we could head down this road and very unexpectedly. It’s like trying to put the Genie back into the bottle.
AROUND the world, sponsored largely by FED money printing and credit transactions, governments are over=indebted and forced to spend greater and greater amounts to cover their parasite-friendly entitlement programs. Most of them are bankrupt, including the US, but we keep extending more credit to keep the game going, in the hopes that we can “GROW OUR WAY” out of the misalignment with INCOME and Taxes. WE can’t.
The “solution” has been money printing and pretending the debts are supportable.
I believe we are on the precipice of a financial disaster.
The 2008 problems have not been solved, they’ve been put into storage at the FED, and we pretend that the bad paper is good, while the banks get more money and credit to support themselves and their buddies.
How much “money printing” and international exchanges can the FED and the ECB do to “rescue” their buddies in the names of ’saving the world economy’ without creating another financial bubble and massive price increases? I don’t know.
Neither does anyone else. But I am concerned about the LOSS of the value of my money….and it’s NOT 2% per year.
What it feels like to me is DEPRESSION in wages and earnings, with INFLATION in the cost of living…..and every Realtor hoping for huge price increases in housing. Bernanke is trying to help them. I fear he might just win the war.
Maybe we won’t get “hyperinflation”, maybe we’ll just get a worthless dollar. I’ve seen prices of everything I buy going up.
Maybe we won’t get “hyperinflation”, maybe we’ll just get a worthless dollar.
Is there a difference?
Yes, because you have many other “currencies” floating around.
Maybe the Euro becomes worthless, too, and the YEN or the Wan or the Kwatloo become the coin of the realm.
Dollars are the currency here. The rest of the world might have more stable paper products.
Maybe prices are more stable in relation to the Ruble or the Chinese Yuan, and the DOLLAR goes down to .20.
You are still ruined financially if you held dollars, while prices in other currencies hold stable. Not likely, but possible.
Who can kill their currency the fastest? Let’s have a race to the bottom.
hyperinflation is a political event; not an economic one.
losing faith in the u.s. goverment is what will cause hyperinflation.
i think we can print a whole lot more dollars before that happens.
our standard of living will drop significantly; but hey, at least the price of ipads will still be the same.
Ray Dalio
Man and machine
The economic ideas of the world’s most successful hedge-fund boss
The Economist
Mar 10th 2012
Print too little money and the result is an ugly, deflationary deleveraging (see Greece); print too much and the deleveraging may become inflationary, as in Weimar Germany. Although Mr Dalio says he fears being misunderstood as saying “print a lot of money and everything will be OK, which I don’t believe, all deleveragings have ended with the printing of significant amounts of money. But it has to be in balance with other policies.”
While it’s in the Fed’s interests to want to make people fear inflation, so they’ll go into debt (pay off actual goods with debauched dollars, buy houses and cars and the like) which helps the financial sector, and/or spend money now as it helps the economy and politicians, it’s unclear whether actually sparking an inflation will help the banks.
On the other hand, when precarious systems break, they break fast and hard.
Link probably wouldn’t have hurt:
http://www.economist.com/node/21549968
One man’s hyperinflation in oil and commodities, is another man’s “undervalued assets reverting to the mean”.
Many insist gold should be $3000/ounce. So is it “undervalued” at $2000?
“I see no signs of incipient plans for hyperinflation, do you?”
So your plan is to wait to trade in your dollars for assets when everyone else is rushing in? I’m not saying hyperinflation is a done deal but waiting until all the stars align to make your move might not be your best move on that front. You’ll be realizing it’s time to make your make right when everyone is.
‘The FED is lying constantly about “inflation”.’
For starters, inflation is measured by the Bureau of Labor Statistics, which produces the Consumer Price Index, and the Bureau of Economic Analysis, which produces the Gross Domestic Product Deflator. When the Fed talks about inflation, they are doing so in reference to one of those measures.
Now please clarify what (if anything) you meant.
“So your plan is to wait to trade in your dollars for assets when everyone else is rushing in?”
I don’t discuss my household portfolio diversification strategy here (learned that lesson the hard way years back when I shorted the home builders), but in short, NO THAT IS NOT MY PLAN.
‘Many insist gold should be $3000/ounce. So is it “undervalued” at $2000?’
Apparently overvalued, at least judging by the current market price.
P.S. “Weak demand in gold coins and bars may be partly due to higher prices” is a nonsensical statement — par for the course among MSM-quoted experts.
COMMODITIES
Updated April 18, 2012, 4:04 p.m. ET
Gold Sheds 0.7%
By TATYANA SHUMSKY
NEW YORK—Gold futures gave up the previous day’s gains amid a weaker tone to equity markets and as investor attention turned to the upcoming government debt sale in Spain.
The most actively traded contract, for June delivery, fell $11.50, or 0.7%, to settle at $1,639.60 a troy ounce on the Comex division of the New York Mercantile Exchange.
Investors trimmed back their gold holdings amid caution ahead of Spain’s debt auction Thursday. The euro zone’s fourth-largest economy will sell its two-year and 10-year sovereign debt in what is considered another test of its credit worthiness. Spain has struggled with rising borrowing costs in recent months, as concerns about its ability to repay the loans weighed on investor sentiment.
“Tomorrow Spain is going to be on traders minds,” said George Gero, vice president with RBC Capital Markets Global Futures, in an email.
Gold futures also faced pressure from broad weakness in U.S. stocks, as losses in equities damped investor interest in other assets. Gold and stocks have been moving in the same direction in recent months as investors swing between allocating money between cash and other, less liquid assets like stocks and commodities.
The U.S. Mint sold 210,500 ounces of gold coins in the first three months of 2012, down 30% from 299,500 ounces in the same period of 2011.
“Weak demand in gold coins and bars may be partly due to higher prices. … Without robust retail demand, gold may find it difficult to rally,” HSBC Securities (USA) Inc.’s analyst James Steel said in a research report.
…
“Cash is good in depressions, when cash is scarce.”
And here we are.
Cash is scarce? Then why are banks paying a pittance of interest on cash deposits? Banks don’t care if you want to deposit cash, car dealers don’t care if you intend to pay cash, in fact the only people who prefer cash are drug dealers.
Last week wasn’t one of this blog’s longtime posters lamenting the fact that a house seller treated them shabbily, even though he/she was a cash buyer?
Yeah, that’s kind of the idea of the helicopter Ben analogy right? That he flys over and dumps cash into the hands of the big banks. It is not scarce, it’s just not being distributed fairly.
As an aside, I went to an easter egg drop where they dropped plastic easter eggs out of a helicopter. It was pretty cool…I think we should change helicopter ben to crop duster Ben or drug plane Ben.
“Why are banks paying a pittance on interest……”
You must be new here.
Banksters don’t need to pay you 3% for your money, when they got all the money they could ever use or want from the government at 0%.
Especially when nobody is buying houses or cars, even when the interest rates for home and car loans is around 3%.
“Cash is scarce? Then why are banks paying a pittance of interest on cash deposits?”
Your first question may offer a hint on the answer to the second, and vice versa.
As an aside, George Salt is not new. He just posts infrequently, too infrequently, given the conciseness and intelligence of the posts. It was at least a year ago that he described MERS as an underground land title system established to circumvent local government.
The Isle of Man pound has been around since 1688.
Speaking of cash…
Despite ‘egregious’ fees, prepaid card sales soar (m s n b c )
…Many young people and those who want to avoid, or don’t qualify for, traditional financial products are choosing to use prepaid debit cards.
“Today’s prepaid features match and even surpass the features of many checking accounts, Robertson says. “ They include allowing you to manage your card through your mobile device or social media account, or make person-to-person transfers”…. “They put a certain amount of money on the card and when it’s empty, they’re done. ”
“The Pew researchers were surprised to find that prepaid cards also appeal to people who don’t want their purchases tracked.”
———-
When it’s gone it’s gone? Yeah, that would be cash. Don’t want to be tracked? Yeah, that would be cash. Want to “track” what you have? LOOK in your wallet! Want to make a “person-to-person transfer?” 
Take out a Jackson and just give it to the person already. Want to track expenses? Keep the receipt and type it into Excel if you want to be that anal. And they pay four bucks a pop for the privilige? Seriously WTF, peepul.
Why don’t use just use CASH!!!????!!!? The original “financial product.”
Power of celebrities?
Kardashian Kard
Russell Simmons
Alex Rodriguez
Montel Williams has one too I believe….
do you buy stuff off of ebay by mailing them cash?
It is pretty darn risky, but when the sellers on ebay say you have to contact them within 3 days to arrange payment and the item will be mailed once payment is received, you could probably do it by mailing them cash. You’d have to send it registered or at least delivery confirmed and the person on the other end could claim the amount in the envelope was less than promised, but it is plausible.
Or you could use craigs list where cash is the standard. The selection is a little less complete, but everyone wants cash on craigs list.
I understand the point, but presumably if you have enough money to buy on ebay, you have enough money for a checking account and can use a debit card.
And buying on eBay, or anywhere online, rather negates the “can’t be tracked” feature.
Do they even have secured credit cards anymore?
If there’s a hard way to do something, most people will choose that over the easy the way.
Or maybe it’s just Americans.
One good use for prepaid credit cards is to force a budget on distant kids. You deposit, they have to plan the spending. Wal-Mart has a duplicate prepaid credit card option for exactly that purpose. One stays with the Mom, one goes with the kid. Mom uses it to deposit cash at the Wal Mart counter. Kid gets to use the other in lieu of a credit card, during times when it is just easier or more timely to use one. Many situations in which cash just wonn’t work, especially when time is a factor. Registering for things online (like GREs or SATs for that matter - my kids just never got the knack of registering for anything before last minute). Applying to places online. Getting cheaper textbooks used online. That kind of thing.
You can work around these things if you avoid registering for stuff, on line purchases, airline tickets, bus tickets, Amtrak tickets.
You know you get The Treatment if you buy tickets with cash, right?
Somehow, with “all the cash we ever needed” available, nearly everyone has ended up deply in debt. Debt that cannot be serviced if the assumed paramaters of future income and expenses change just a tad. That’s nothing to laugh about.
That is because most of the money has been “parked” by the banks as excess reserves. I am certain the Banksters will be ready to flood the markets with plenty of “credit” when they get everything set up for a complete take-over of the world markets. All things take time.
Disasters usually come on quickly, after a buildup of risk.
It’s the straw that breaks the camels back.
Ever watch an avalanche? Doesn’t take much to get is started, just the right conditions set up for a BIG slide.
Playing games with Trillions of dollars of monopoly money can’t go unrewarded.
I am certain the Banksters will be ready to flood the markets with plenty of “credit” when they get everything set up for a complete take-over of the world markets.
Well said. But what can I do on a personal basis, other than sit in front of a computer and complain about our politicians?
Buy a house, as Diogenes’ hyperinflation will quickly shrink the real amount owed on your mortgage to near zero.
Only if the hyperinflation actually shows up in paychecks.
joe the plumber’s paycheck; not dave the 22 year old currency trader’s paycheck, who will just blow it on coke.
Only if the hyperinflation actually shows up in paychecks.
BINGO
Generally speaking, nearly everyone leaves out this most important distinction.
As long as union contracts are being negotiated with paycuts, there will never be hyperinflation except in fine wine, caviar, truffles, and art.
That would mean that paychecks were skyrocketing in the Weimar Republic or in Zimbabwe. Was that actually what was happening?
Good question, Carrie. Maybe they paid in chickens?
That would mean that paychecks were skyrocketing in the Weimar Republic or in Zimbabwe. Was that actually what was happening?
Paychecks were skyrocketing in Germany post WW1. And then more recently in Zimbabwe.
Zimbabwe citizen hauling around stacks of worthless currency
http://meltdown2011.files.wordpress.com/2008/11/zw010020.jpg
German Marks used for fuel
http://justicebeforecharity.org/images/justWar/inflation-1923.jpg
Zimbabwe citizen hauling around stacks of worthless currency
I’d hire someone to carry around my worthless stack for half my stack. (and an apple)
Carrie Anne
I do remember seeing an article that suggestetd that despite the rampant inflation in Zimbabwe the GDP for the country plummeted and unemployment exploded. I believe there were big raises to (appear to) compensate for inflation given to the favored government workers some of which trickled down. As one would expect there was likely a large black market economy using other currencies and barter.
I don’t think this is the goal of the FED.
“Only if the hyperinflation actually shows up in paychecks.”
There’s the rub.
German Marks used for fuel
At least mattress cash some intrinsic value, whereas investment losses are rather whole.
“The Fed has increased its balance sheet by a factor of 100 maybe the past 4 years but what did they produce in order to do that? Nothing but numbers as far as I know.”
Were you expecting them to pull a rabbit out of a hat? Or maybe to turn water into gold?
I think they may be selling us our own water at a profit. They are stewards.
I think you are on to it.
“IMO, much of this debt everybody thinks everybody owes the banks is an illusion and the PTB are working overtime to perpetuate the illusion.”
I agree with your point, except ‘PTB’ is too general. More accurately, some politicians like to make political hay over the size of the debt, suggesting that we will soon run out of money, at which point financial Armageddon will result.
But the ability to use the power of the virtual printing press technology to relieve the debt burden considerably complicates the reality. The redistributive consequences of QE and central bank balance sheet expansion by other names is a little-explored topic which deserves more scrutiny, in my opinion.
“But the ability to use the power of the virtual printing press technology to relieve the debt burden considerably complicates the reality.”
This is key IMO regarding the deflation/hyperinflation debate. As long as debt is paid back out of income or defaulted on, we’ll have deflation (and stagnation). If too much of the debt is paid back with actual newly created money, then we’ll see hyperinflation. After all, why trust a currency that is created too freely?
Much of the money creation thus far has been excess reserves which have a velocity of zero. No inflationary pressure there. My concern is with the fed purchase of treasuries or mbs, which does increase the active money supply. Too much of that kind of activity could push the US currency over a tipping point into hyperinflation.
“As long as debt is paid back out of income or defaulted on, we’ll have deflation (and stagnation). If too much of the debt is paid back with actual newly created money, then we’ll see hyperinflation.”
Everyone assumes the Fed will err on the side of deflation (sentence one) or hyperinflation (sentence two), forgetting that their best option is likely to steer a course between these two extremes.
Wouldn’t that be the logical course? If so, why assume they won’t follow it?
Deflation in itself is not an extreme. Slow deflation, preferably without deflation expectations, is the most logical course. But when there is so much newly minted debt with so little hope of it being paid back, it’s a pretty hard tightrope to walk. Extend and pretend anyone?
As for the USG, it gets almost impossible. The Fed is buying a growing percentage of the US’s debt as others lose interest. If non-Fed buyers drop to 50% of debt issuances, what does the Fed do? What’s the middle ground? As long as the Fed keeps accumulating treasuries at a growing rate, the threat of hyperinflation grows. If they stop picking up the slack, then you have a default of some sort.
“The Fed is buying a growing percentage of the US’s debt as others lose interest. If non-Fed buyers drop to 50% of debt issuances, what does the Fed do?”
I dunno. But I can say that last year, when some of the world’s most knowledgeable investors shunned Treasurys based on similar concerns, the asset class had a record year.
Don’t fight the Fed!
The thing that strikes me most is that no one looks at the FIAT money from a risk management perspective. With a FIAT currency, the risk exists that hyperinflation will occur. With a commodity backed currency, this risk is eliminated. The risk that politicians will spend money they don’t have still exists, but the risk that they will confiscate assets via stealth inflation tax due to money printing are gone. Of course, the risk of straight asset confiscation via direct taxes still exists, but as a nation we were foolish enough to allow this back in the constitution via the 16th amendment.
The thing I am still amazed at is that in the 30’s gold was directly “confiscated” without (as far as I can tell) due process. How did that ever fly!?!
“With a commodity backed currency, this risk is eliminated.”
Wrong; the fiat-based contracts that support commodity-backed currencies can be summarily abrogated.
‘The thing I am still amazed at is that in the 30’s gold was directly “confiscated” without (as far as I can tell) due process. How did that ever fly!?!’
It flew the same way paper currency flies: By government fiat.
I believe FDR followed due process. Congress did pass a law (Trading with the Enemy Act of 1917) authorizing the President.
Funny how laws come back to bite you 20 years later.
“I believe FDR followed due process.”
That’s reassuring.
That said, I believe my main point stands: The laws (fiat) which supports a gold- or other commodities-based currency can be summarily changed. Sovereign financial contracts have been broken over the course of modern financial history, going back at least 800 years.
Cantank…
Fiat as a legal decree is different than fiat as a currency, is different than commodity based currency. Yes, I’m actually proposing that we carry around real gold and silver coins. A silver dollar is currently worth about $30. So three 1oz coins is the equivalent of a $100 bill. You could pay most high end restaurant bills with 6 simple coins. Gold is currently about 1500 an ounce. so with one gold coin you could buy a nice suit.
20 gold coins and you could buy most cars. And there is no reason at all you shouldn’t be able to continue to do electronic transactions while most of the gold/silver/copper/platinum/etc.etc. remain in a bank somewhere. Also no reason at all that you shouldn’t be able to put oil or gasoline on deposit at some facility…. In fact.. maybe that is the business I should try to start… Bank of… Gasoline!
The problem isn’t whether you could carry it around. The problem is divisibility (and maybe the convenience of getting more).
“Yes, I’m actually proposing that we carry around real gold and silver coins.”
Even if the government went there (and they won’t), there is no reason to expect they would not eventually confiscate your
gold coins and forced you to exchange them for green paper, if it suited their ends.
there is no reason to expect they would not eventually confiscate your
gold coins
It would be possible to make this fairly difficult to do, with a constitutional amendment.
U.S. Housing Starts Unexpectedly Drop to Five-Month Low
By Alex Kowalski - Apr 17, 2012 8:42 AM ET
Builders began work on fewer homes than forecast in March, signaling a sustained industry recovery will take time to get underway.
http://www.bloomberg.com/news/2012-04-17/housing-starts-in-u-s-unexpectedly-decrease-to-five-month-low.html - -
I am guessing this “unexpected” news will lay the foundation for a stock market rally.
‘Explosion in Student Debt’ Drags Down Housing: Chart of the Day
By David Wilson - Apr 17, 2012 12:00 AM ET .
As the cost of attending U.S. colleges and universities surges, student-loan debt is turning into “a significant drag on the housing market,” according to Pierre Lapointe, a Brockhouse & Cooper Inc. strategist.
http://www.bloomberg.com/news/2012-04-17/-explosion-in-student-debt-drags-down-housing-chart-of-the-day.html - -
BWA HA HA HA HA! Sorry REIC, the only household formation happening for these kidz will be in mom’s basement.
We are at the point where the kids can afford:
A house
A new (or slightly used) car.
A student loan for college, or Dental Hygenest school
Pick one.
I think what we need to do is look at what a person is going to produce in their lifetime as though it were one big pile sitting on the floor. In theory the person who produces it owns it, but there are a circle of jackals trying to dart in and take everything they can. It used to be that the guys who loaned you the money for a house were able to get the biggest piece of the pile from you. Now the student loan jackal is darting in and taking the best piece before the house guy can get his.
That’s silly. College students generally don’t buy houses, do they?
Actually, some college students have bought condos as “investments”, but I think you missed his point.
College students are supposed to graduate and make lots of money and create ‘households’. The new problem: the amount of debt they are incurring is enough to buy a house.
So, instead of buying a house, they will be trying to figure out how to pay off the loans, while living with their buddies or with their parents.
Unless, of course, the price of housing goes down to a very low point.
Just in case you weren’t snarking, those college loans are upward of $300-$400/month for 10 years. Say goodbye to saving for down payments.
We have already covered this topic so often on a serious level that a good snark seemed in order.
I actually bought a house when I was a college student. At age 35, I was a late bloomer and early explorer -
We don’t need no stinkin’ down payments.
Downpayment and Closing Cost Program
The County of San Diego offers low-interest deferred payment loans of up to $35,000 or 33% of the purchase price whichever is less for low-income first-time homebuyers. The loan funds may be used to pay downpayment and closing costs on the purchase of a new or re-sale home. Properties eligible for assistance include single-family homes, condominiums, townhomes and manufactured homes on a permanent foundation. The appraised value of the property may not exceed $451,250. Participants must contribute a minimum of one percent of the purchase price from their personal funds. For additional information, please read the DCCA Program Overview.
…
“those college loans are upward of $300-$400/month for 10 years”
It is good training for them. By the time they pay this off they will think nothing of signing up for a 30 year mortgage. They don’t really have to save for a downpayment either. The 401K is designed to let you take that from your retirement.
This will keep our whole system running. I don’t really care if they buy a house or rent, but I like the idea that they will be forced to keep their little noses to the grindstone every day for the next 40 years.
“I like the idea that they will be forced to keep their little noses to the grindstone every day for the next 40 years.”
Isn’t that a primary reason to give college students the means to rack up a huge pile of student debt, then give new graduates the further means to take on a crushing mortgage burden? It’s all about locking in the labor contract before they come to their senses.
Yes, I get it now, but those 40 years are behind me.
Wait, they have a 401(k) now?
Yes, they have been working for 10 years by the time their student loans are paid off. The employer is not going to give them a pension, so they cheerlead them into a 401K. They will contribute 3% of their wages to get the match. In 10 years there is enough for a downpayment on a house. There is no penalty then to withdraw a few grand for such an “emergency”.
Skye, what did the Millenial generation do that you want to punish them? Do you truly think that they are “lazier” than the boomers?
They won’t just work 40 years. They will work a very unstable 40 years: constant increases in rent and health insurance, cross-country moves to keep jobs, retirement at the mercy of the stock market, loans to pay off, benefits chipped away. And even the ones with the hard college degrees will live that, not just those who drank through college, or those couldn’t go to college at all.
The Lucky Ducky bank teller in yesterday’s WSJ piece is paying $900/month
Oxy, I was being sarcastic. Sorry.
No worries! The 2006 Citi Group Plutonomy report says our 75% retail driven economy doesn’t need… consumers!
A few years ago, buying houses for your college boy or girl was quite common here in Tucson. Matter of fact, I live right across the street from such a place.
Princess graduated three years ago, and her brother now lives there. He doesn’t do fiddly to repair or maintain the place. It’s one of the biggest dumps in the nabe. And ISTR that the family bought it as an in-VEST-ment back in 2004.
From the article: (since 2001) “Tuition climbed 57 percent on an inflation-adjusted basis …..At the same time, the average wage for American workers between the ages of 25 and 34 dropped 7 percent…..Borrowing to pay for college exceeded $1 trillion within the past few months,”
Tuition up 57% in 11 years? Health insurance premiums up 131% in 10 years? (epi dot org) And wages falling?
Man, there is something really wacked going on. We need to cut taxes on the rich and corporations fast!
From CounterPunch DOT org: Health Care in an Age of American Decline
“The high costs of U.S. health administration are a direct result of having to navigate the extreme complex channels of billing and reimbursement through private insurers. As one would expect, the system’s complexities are tailored to minimize payouts to consumers and simultaneously maximize profits.
The U.S. has very little to show for its insanely expensive health arrangement. Its per capita costs are twice those of other advanced OECD nations. However, it ranks pretty low in health outcomes such as infant mortality and and life expectancy.
And the burden on the general population is, indeed, quite severe. Two landmark 2009 studies by Harvard physicians David Himmelstein and Steffie Woolhandler were able to show that the extraordinary costs of healthcare and insurance impose crushing financial burdens and leave many who cannot afford insurance to die. They found that 62.1% of bankruptcies filed in the United States in 2007 had medical causes. This value is sharply contrasted with an estimated 8% in 1981 and 46.2% in 2001. 80% of the 2007 figure had health insurance and most were well-educated and middle-class.
The touted virtue of free market efficiency is based on the symbiotic relationship between consumer benefit and corporate profit. Unfortunately, it’s not really a free market. The government is continually prohibited from acting as a significant competitor even though most of the population agrees that it should be. Because of the fundamental difference between health and Range Rovers as commodities, consumers do not have the option of simply boycotting the product or choosing a competitor and thereby placing downward pressure on costs.”
The stupidity of this article is beyond comprehension.
“The touted virtue of free market efficiency is based on the symbiotic relationship between consumer benefit and corporate profit. Unfortunately, it’s not really a free market. The government is continually prohibited from acting as a significant competitor even though most of the population agrees that it should be.”
The GOVERNMENT is ALL OVER the “healthcare system”. They make rules forcing hospitals to provide FREE care for the indigent, while forcing the costs onto the Insurance companies and people who “can pay”.
The GOVERNMENT has made all kinds of rules and regulations and forces “free market” participants into their Medicaid/Medicare models of services and “payments”.
It is NOT a free market because Government has intruded to the point that no one can simply go to a Doctor and pay for services with cash
And the idea of “government” acting as a competitor is too stupid to discuss.
Propaganda can be challenging to parse.
Obamacare death panels = gov bureaucrats kill granny
InsuranceCo death panels = invisible hand of free market
Who would rather kill you? Government or Insurance Industry?
Health care debate in a nutshell.
“Health care debate in a nutshell.”
National Highway $ystem = Good!
National Healthcare $ystem = “Evil!”
Hwy,
Let me know when I can start riding on your body (and maybe Katy Perry’s too) because it is for the public good, then I will agree a public health system should be mandatory.
“Who would rather kill you? Government or Insurance Industry?”
It depends on the contract. For instance, a private firm providing life annuities would rather have beneficiaries die sooner…
extraordinary costs of healthcare and insurance impose crushing financial burdens and leave many who cannot afford insurance to die.
I’d rather die uninsured but FREE than have my health-care rationed!
Hospitals are not forced to provide free healthcare to indigents.
Except for the county hospitals for indigents. And lots just stabilize the patient if an emergency and transport to the county hospital.
Mathguy,
When not providing “indigents” with medical care results in you contracting tuberculosis, plague, cholera, rubella, polio, scarlet fever, pertussis, SARS, etc., perhaps you’ll see the public good as a benefit to you personally?
Who in their right mind would trust their life to anyone who put profits ahead of principles?
Basic health care should NEVER be a market issue.
Ever.
You have made the stupidest comment of the day: Basic health care should NEVER be a market issue.
Actually, it should. Always.
I should be able to go to a doctor and pay him for services on a free market FEE that we agree to.
I shouldn’t have some bureaucrat dictate the price and terms that he is willing to accept and I am willing to pay.
Licensing of Doctors and various schemes for the public safety and welfare are, of course, other issues in which government do-gooders wish to make the world safe, while making it difficult for the rest of us to even buy food supplements without a certified doctor’s certificate of approval.
Free markets work great, everywhere they are tried.
Doctors charge a lot because the AMA keeps then number of doctors as small as possible to keep salaries high. High salaries attract LOTs of potential doctors that would reduce costs, but then the public schools like to LIMIT the number. Instead we need more women’s studies courses and graduates in “education”.
If the market was FREE, there would be A lot more schools for doctors and a lot less collusion by the license holders.
But, of course, no one wants a FREE market. They want to carve out a little niche where they can skim off some money for themselves free of any competition that might interfere with their right to a good living.
It’s like a “liquor license”. Why do you need one? Simple Limit the number of sellers, impeding competition, and provide the government cartel with more cash. Same with casinos.
Got a “license”. Free money for you. Everyone else. Too bad.
You bring up good point especially regarding the artificial shortage of doctors and the monopoly on medications.
But I do want some quality control on the doctor that sees me. I don’t want to unknowingly go to the guy that killed his last 3 patients. My family (or those last 3 families) being able to sue him later isn’t sufficient protection as far as I’m concerned.
Only a child believes in the tooth fairy… and the supposed benevolence of a “free market.”
Missed the previous 2000 years of history lesson, did you?
Carl,
What protection from bad docs is it that you think you have? My wife is an M.D. . She has in no unclear terms let me know, there are Bad Docs (TM). Still. With all the regulations. Before you choose a doc, you should check a couple doctor review websites. Don’t trust some magical “regulatory agency” to keep you out of the hands of the bad ones.
Be kind. At least Dio didn’t trot out his usual “why I should I pay for your health insurance” talking point. Maybe because he read that 70% of people DID buy their own health insurance and got screwed over anyway?
I have an account with a major investment house. When it came to choose mutual funds, I had a choice between a health fund that was mostly “Delivery” which was health insurance companies, and “Equipment” whose largest stock was a contact lens solution company.
The Delivery fund was doing gangbusters.
I chose the Equipment fund. I think I broke even and I’m proud of that.
Only a child believes in the supposed benevolence of “the authorities” . There that was easy. I can make wild assertions too!
Don’t trust some magical “regulatory agency” to keep you out of the hands of the bad ones.
That’s true…but I can easily imagine things being MUCH worse without any attempt at regulation.
“Basic health care should NEVER be a market issue?
Actually, it should. Always.” WellPoint CEO Angela Braly (2011 compensation: $13.2 million) Speaking at The Health Insurance Executive’s Annual “Up Yours!” Retreat in Jackson Hole WY.
Beware the company that advertises meeting “State/Federal regulations”.
The Feds themselves will tell you that the regs are only a minimum performance standard. Basically outlawing performance/behavior that has repeatedly been demonstrated as criminal/fatal.
Some people/companies look at the rules as a hurdle to (barely) clear. Others view the regs as a minimum performance standard.
“Don’t trust some magical “regulatory agency” to keep you out of the hands of the bad ones.”
Did your wife take an oath? Is the function of that oath dependent upon a Gov’t regulator? Should it be? Certainly being “Profeesional” they are compelled to quit voluntarily, would not even need nor require a determination of a jury among their fellow peers. Right? :-/
Healthcare in America is a re$olute failure, yet many, many, many are gathering wealth on the scrotum’$ and mental deficiencie$ of simple poor folk.
How many te$ts shall order to see if we can make an accurate prognosi$? Eye know, let’s start with the most expen$ive ones first!
“They found that 62.1% of bankruptcies filed in the United States in 2007 had medical causes.”
Yeah, right. Being way over one’s head with a mortgage has nothing to do with it.
I’m guessing that worrying themselves sick over crushing mortgage burdens had something to do with lots of medical situations.
I’m thinking of the rewards in our society of obtaining victim status.
If a person loses all his money because he made a stupid financial move then society thinks him - and he thinks himself - as being stupid. But if some unforseen outside force caused him to lose all his money (i.e. and illness) then he is not stupid at all, merely a victim.
So when people do surveys and ask questions such as “What caused you to file for Bankruptcy?” the answer comes back as “An illness”, and hence the illness box gets check on the survey form.
Is debtaholicism considered a disease?
I think it’s a little more complicated than that, but you do make a valid point. I agree that “healthcare” costs are out of control.
I blame the government/insurance co. (NOT free market) system as the culprit.
Services to those who don’t have “insurance”, i.e. a FIXED contract price or that are not provided by government (medicare/medicaid) are JACKED UP in price to make up for indigent care and forced care via government mandate.
If you REMOVED government intrusion and simply had doctors and patients agreeing to fees, I believe the prices would come down substantially.
Also, Lawsuits add huge liability costs to medical care, warranted or not. Huge claims that I have seen are simply not reasonable, except if you are a Tort lawyer, or one of those who got in on the Let’s sue the insurance company game.
You virtually get the royal shaft if you have ANY assets from years of working and don’t have an insurance coverage, setting a FIXED price for services that is substantially less than what they would charge someone without a contract.
My insurance company used to send me bills, showing the RATE the hospital would charge, and the “discounted” rate that the insurance company had paid. The differences were huge. My portion was 20%, and that was on the Discounted rate.
I would be broke if I had to pay the FULL charge and had the assets without the discount rate.
Alternatively, you can be a COMPLETE parasite and get all the coverage for FREE, simply by not having any savings and throwing away any money you might have earned outside your government mandated “entitlements”.
“JACKED UP in price to make up for indigent care and forced care via government mandate”
Actually they are jacked up as a starting point in the negotiation with insurance companies. I know this because I have talked to the people who represent the ones that do it. If they don’t provide a jacked up rate as the starting point, they believe (no one knows if it is true since it has been so long since anyone tried it) they would never be able to get to a rate that would cover their costs plus some extra moolah to provide big bonuses for the executives and throw some extravagant parties.
Besides, you only have to think a little to understand that your point can’t possibly be true. Almost no one actually pays those rates. People with insurance get the insurance negotiated rate. People who are really poor, often get qualified for Medicaid on the spot (hospitals provide counselors to help them fill out the paperwork). People who don’t qualify for low income insurance often get discounts from the hospital. A lot of the others get billed the inflated charges and never pay them just by not doing it or by declaring bankruptcy. With so few people paying the higher rates, how can charging them actually help the hospitals pay for anything?
And there is no government mandate that hospitals have to provide care in the emergency room. If they were willing to give up being a medicare provider, they would be welcome to stop, though it might have some impact of their tax exempt status. And you don’t have to take Medicare insurance. Good luck finding a private insurer who will take you.
“If you REMOVED government intrusion and simply had doctors and patients agreeing to fees, I believe the prices would come down substantially.”
This raises the question, what would hospitals do when someone shows up badly injured or sick who can’t pay even the lower rates? Without the government mandate to treat, would the hospital reject the person? If so, how many treatable injuries or diseases would result in death or disability?
It would look just like the 19th century, which is the future that Paul Ryan wants to create in the 21st century
Is debtaholicism considered a disease?
——–
It is considered a disease, but a disease you can get yelled at for having:
Dang it Jimmy, you are a debtaholic!
Dang it Jimmy, you have lupus!
Which one sounds correct?
//with apologies to Mitch Hedburg
When a four hour emergency room visit can run $12,000, I can easily believe that medical bills is the leading cause of bankrupcies.
Or forget the emergency room visit……Try $200 to see the doctor for five minutes, and $500 for “lab work” that basically confirms what everybody already knows.
Is anyone else seeing this? “Required” lab work suddenly being due at 3-5 month intervals instead of yearly.
I’d willingly trade ANY OTHER industrialized country’s health care system, over what we have now.
Try “shopping around” for health care, by calling your local doctor’s office, and asking them for prices
They can’t/won’t tell you. Mainly because they don’t know or care. That’s up to the banksters in the back office to decide.
The problem only gets worse, if you are traveling, and have an accident in a town you don’t know anything about. Kinda tough to shop for prices, when you are in the middle of a heart attack, or your spleen is laying in the gutter.
”
“If you REMOVED government intrusion and simply had doctors and patients agreeing to fees, I believe the prices would come down substantially.”
This raises the question, what would hospitals do when someone shows up badly injured or sick who can’t pay even the lower rates? Without the government mandate to treat, would the hospital reject the person? If so, how many treatable injuries or diseases would result in death or disability?
“
Bingo! In a truly free market, there are many people who would get left out. If you can’t afford the cancer treatment, what good does it do you to get the mammogram or colonoscopy?
We are already at the point where doctors require payment up front. Even if rates are cut in half, there are folks who would not be able to afford it. Not treating that child’s ear infection can cause permanent hearing loss. Skipping vaccinations creates a public health problem. Measles, mumps, and rubella would make a comeback.
If you can’t afford the cancer treatment, what good does it do you to get the mammogram or colonoscopy?
Which is why Yours Truly avoids getting those tests. It’s not like I’m rolling in the dough around here.
Likewise, if there were a test for Alzheimers. Given what I’ve said about my dad’s decline, do you think I want to take that one? Especially with health insurers still doing anything they can to ferret out those pre-existing conditions.
My wife is an MD. She is just finishing up her 12th year of post-secondary education. She has incurred substantial debt and spent a huge portion of her life to get to this point. Now why the hell do you think medical care is expensive…??? Should she just work for beans because “everybody needs medical care”? She invested the time and energy to get the training to be able to treat patients effectively. Shouldn’t she get to choose how and to whom she provides that care? Shouldn’t she get to choose how much she wants to charge for her time? If she wants to charge $1000/hour and no one wants to see her, isn’t that her choice? If she wants to charge $25/hr and take pro-bono cases in poor neighborhoods, shouldn’t we let her?
If no insurance plans were ever paying out benefits to doctors, do you think doctors would have any patients or any income? The medicine practiced in this country is EXPENSIVE and people want and demand it. And they pay for it. It’s because it is good.
The system isn’t perfect. But before we go changing the whole thing and throwing away a medical research, development, and treatment system that subsidizes many many parts of the world with technological advances and straight up charity, we might want to consider just tweaking the parts that are acting up.
1) Medical malpractice and tort reform. Talk to a doctor, then tell me it’s not a problem.
2) Insurance provided through employer as “tax free” benefit.
If medical expenses should be tax free, then just make that the law instead of tying it to employment.
3) Import/export laws for medication. Fine, keep the FDA for “safety”, but let medicine flow freely across borders. Sorry foreign countries, I’m throwing you under the bus here, but even liberals are clamoring for lower costs at home…
4) Insurance regulation — let people choose their own health plan like they choose their car insurance. If you want to create a health care mandate, mandate that unless you register your health insurance policy in a national database you can be denied care at the emergency room. Leave it up to the hospital if they want to treat you or not when you don’t have insurance.
5) Assistance to the weak - For the disabled, a disability benefit. For everyone else, a volunteer program to provide care for the elderly and disabled in exchange for a basic insurance coverage in case of emergency. Don’t volunteer?: it’s up to the hospital whether or not to treat you.
6) Children - Didn’t get a basic plan for your child and they need emergency care? Now they are a ward of the state until you can provide insurance for your kids. In the meantime your income tax is doubled to pay for your little cherubs, and the debt incurred is only partially dischargeable in bankruptcy.
Shouldn’t she get to choose how and to whom she provides that care? Shouldn’t she get to choose how much she wants to charge for her time? If she wants to charge $1000/hour and no one wants to see her, isn’t that her choice?
That all makes sense if there’s no artificial shortage of doctors. Except there is.
Since all of us J6Ps are Third Worlders now, lets let the free market decide, by throwing the door open to all of the Third World doctors to practice in the US.
A crappy doctor you can afford is better than no doctor at all.
In exchange, we’ll give our doctors the freedom to go to Bangladesh, and bill patients there $1000/hour.
Screw the “over-regulation” of licensing boards.
Tort reform was passed in California and Texas years ago, so it’s not a problem in the two biggest states in the union.
just tweaking the parts that are acting up.
50 million uninsured, 50 million with junk insurance that has risen in price 131% the past 10 years. That better be some tweak.
Mathguy forgot this:
7) Provide a reasonable and fairly inexpensive way for foreign trained doctors to practice in the US.
I didn’t forget that. Foreign trained doctors can practice medicine in the US. They spend 4 years in a residency (paid), and they come out the other side with board certification. That assumes the residency chooses to pass them, and they pass the board certification exams administered by the AMA. Many foreign doctors can’t pass the boards and don’t have the education for the residencies to accept them. Often they will instead work as RNs and nurse practitioners. In fact, they are coming from abroad in droves to do just that. In fact it is decimating foreign health services who are “centrally planned”.
It’s funny how you guys are clamoring for regulation, yet the regulation self imposed by industry to maintain high standards for doctors (the AMA) is disdained by you. I’m not a huge fan of the AMA, but it’s not the only game in town either. Also, NO ONE addressed the 12 years of education and training it takes to become a doctor and why my wife shouldn’t be able to choose what she does with it. There was just some snark about an undersupply of docs. Do you have any idea the amount of work that it actually is? As a patient, you can go see a nurse practitioner.. You don’t have to see a doctor.
Second, why are you looking outside the country for solutions? Why do you want to steal docs from foreign countries who need theirs just as much as we need ours? To me it’s just a load of crap the same way H-1B visas are. There are plenty of engineers, just no one wants to pay them an engineering salary in the US if you can get cheap foreign labor. Oh, so the minute it benefits you, you are now all in favor of globalization???
Finally, health insurance up 131% in 10 years.. Guess I see where the inflation from the money printing is going… To me there are 1 of 3 things happening or a mix of them:
1) inflation is driving the cost of healthcare up, driving the cost of insurance up
2) lack of competition is driving the cost of insurance up
3) increased malpractice insurance costs and procedural costs are driving up the costs - in other words, better for the docs to order the tests or else they will get sued.
In other words, if Blue cross costs more, why not just switch? If Blue cross’ terms say they can drop you if you get sick, why buy it in the first place? Choose an alternative.. Oh right.. it’s all work provided and you can’t!
Right, so lets fix that first, then we can talk about the other.
In other words, if Blue cross costs more, why not just switch? If Blue cross’ terms say they can drop you if you get sick, why buy it in the first place? Choose an alternative.
In many markets, there is one dominant insurer. Or maybe two. So, just switching isn’t that easy, even if you’re a major employer with a lot of purchasing power.
Tort reform……the catch all excuse. The solution seems to be to price the services so high, that it “prices out” the riff-raff who might sue.
“Let people choose their own plan…….”
You need to keep up on current events. If you are over 40-45, it’s damn near impossible to get anyone to write you a policy, especially if you have any type of pre-existing condition. insurance companies only want to insure people that won’t actually get sick.
And how much should a 50-something schmuck like me pay for my own insurance? 10% of my take home? 50%? If the Republican wet-dream of a privatized system comes to pass, 50% will be more likely than 10%.
I just love how everyone thinks that us poor folks have all this money we are wasting on beer and Twinkies, which would be better spent paying overpriced insurance companies and Doctors $1000/hour salaries.
Let’s just sterilize everyone when they turn 13, and freeze their eggs and sperm until they have the money to get them out of hock. Make sure you let JPM and Gollum Sucks run the program. If and when you get out of indentured servitude to the banks and your medical bills, then maybe you can afford to have a kid or two.
A crappy doctor you can afford is better than no doctor at all.
Sometimes. Depends on how crappy.
It’s funny how you guys are clamoring for regulation, yet the regulation self imposed by industry to maintain high standards for doctors (the AMA) is disdained by you.
I’m all for them keeping the quality high, as long as they do it by some method other than keeping the supply low.
I’m not a huge fan of the AMA, but it’s not the only game in town either.
There’s a way to become an American doctor without having anything to do with them?
Also, NO ONE addressed the 12 years of education and training it takes to become a doctor and why my wife shouldn’t be able to choose what she does with it. There was just some snark about an undersupply of docs.
I’m trying to talk about more than snark. I’m totally happy for her to do whatever she wants with it. I just don’t want to pay monopoly prices to her just like I don’t want to pay monopoly prices to anybody else including the insurance company.
“If you want to create a health care mandate, mandate that unless you register your health insurance policy in a national database you can be denied care at the emergency room. Leave it up to the hospital if they want to treat you or not when you don’t have insurance.”
So John Doe comes in the door from an accident, unconscious, do you check his insurance before stabilizing him?
Healthcare today = $$$$$$$$
What it should be incentivized to be for basic need$: $$
Too many makin’ monie$, listen to them $queallllllllllllllllllllll!!!!!!!!!!!!!!!!!!!!
Really, who wants to be a VA compen$ated doctor, get real, where’s the Glory?
Meantime back @ el “Pill Rancho”
‘Behind the Orange Curtain’ and the OC OD Tsunami:
Natalie Costa’s documentary describes a prescription-drug ‘epidemic’ killing local kids
By MATT COKER Thursday, Apr 19 2012
The film explores what executive producer Natalie Costa, in her mile-a-minute Jersey accent, calls “the Orange County tsunami”: young people of relative affluence dying after getting hooked on prescription medications such as those Barber ingested as well as Oxycontin, Oxymorphine, Ativan, Adderall and Klonopin.
How easily dangerous drugs find themselves into the mouths of babes who were not prescribed them is an overarching theme. Peer pressure and rave culture are fleshed out as possible gateways. The pharmaceutical industry’s flooding of prescription pills into society, the “dirty doctor system” that often allows those medications to reach addicts and legislative efforts to hopefully stem the flow are all explored onscreen.
Apologies for the macabre opening, but the documentary Behind the Orange Curtain was born out of the deaths of Jarrod Barber and Mark Melkonian, South County teens who succumbed to drug overdoses. Barber, 19, drifted away on the family couch in Laguna Niguel on Jan. 8, 2010, after a cocktail of Opana, a narcotic painkiller; Seroquel, an anti-psychotic; and Clonazepam, an anti-convulsant often used to treat anxiety. Melkonian was a 17-year-old junior at Dana Hills High School when he overdosed on prescription pills on May 25 of that same year.
Friends and loved ones have been obliged to keep memories of both teens alive through various South County anti-drug projects that have coalesced into the feature-length documentary Behind the Orange Curtain, which makes its world premiere at the Newport Beach Film Festival; it’s first screening sold out so quickly a second was added in the 1,130-seat Big Newport theater.
Medicine schmedicine. Profiteers don’t care about doctor’s credentials. They are just looking to make money. On the upside, mandatory insurance will encourage entry into the market, increase insurance industry competition and lower costs - even more!!!! If doctors don’t like it, they don’t have to accept insurance anymore. A lot don’t already.
“6) Children - Didn’t get a basic plan for your child and they need emergency care? Now they are a ward of the state until you can provide insurance for your kids. In the meantime your income tax is doubled to pay for your little cherubs, and the debt incurred is only partially dischargeable in bankruptcy.”
Who takes care of these wards until their parents can pay off the bills and afford to provide insurance?
Meanwhile, Republican state legislatures are passing laws to make abortion unavailable. Republicans want to defund Planned Parenthood and reduce the availability of birth control to poor women. I guess poor women should just say no to sex with men. God help them if they are raped.
Mathguy, thanks for your posts. Good ammo against the commies on this site. They want your wife to be a slave of the state. That sums it up.
“Good ammo against the commies on this site.”
Commies? Really, Bill, that is the best you have to offer?
Especially if they $piral towards depre$$ion + weapon [could include a "blunt" object].
Gonna be tough for anyone to catch up with this week “Eeyore Award” front-runner.
Did they also mention that those very same people ALSO had medical insurance?
Because most of them did and they were STILL driven to bankruptcy as a DIRECT result of the medical bills.
Have too much free time on your hands?
Try having a major hospital visit. Then spend all of your free time for the next six months arguing with the doctors, hospitals and insurance companies over charges and coverages.
But a free market will fix all that, don’t ya know?
Just a few reminders here about what a good health insurance company can do if they want. All this with respect to my minor knee surgery a few years ago:
When I went for the diagnostic MRI, the receptionist practically wept with joy when I told her what insurance I had. Presumably because she knew that she would actually be able to get the pre-approval through (it was Christmas eve or maybe the day before).
When I called the hospital before the surgery, I asked if I needed to do anything to help with the pre-approval and when they found out my insurance, they told me that since it was a day procedure (in and out in a few hours), I didn’t need pre-approval.
The package they sent me said to bring a credit card. They never asked for it.
I got my bills long after my procedure. The total cost was about a tenth (guessing here, it was something absurd) of the rach rate charge. I was expected to pay the remainder of my $300 deductible for the year and I think the co-pay on the rest was 15%. Might have been 10%. The discounts on the docs weren’t as high, but then the charges weren’t as high either. By the time my bills arrived, I had already received deposits from my flexible medical spending account so I could pay them with tax free money.
I actually think I might have the same condition in the other knee at this point. The edge isn’t unstable, so I’m only getting a little pain, but if it tears some more, I’ll need to go through it again. It cost about $700 last time. Rack rate would have been about $16,000.
The total cost for the hospital portion was about 1/10th the rack rate.
Polly, why is there such thing as a “health savings account” with “pre-tax dollars” ? Why aren’t medical costs just deductible? (After just doing my taxes, I know that medical costs are deductible, but only after the first $7000 of non-deductible expenses.) Who thinks up this crap anyway?
Polly, why is there such thing as a “health savings account” with “pre-tax dollars” ?
Because the rich need some place to stash their money. Yep, that’s the truth. HSAs provide the most benefit to the uppah crust.
As for the rest of us, HSA is just another way of the insurance industry saying “Screw you!”
Question:
A doctor that screws up can accidentally kill (maybe) a couple of people.
A pilot or mechanic that accidentally screws up can (and have) killed up to 600 people.
Who should be paid more?
Because the rich need some place to stash their money. Yep, that’s the truth. HSAs provide the most benefit to the uppah crust.
I have a high deductible insurance plan with an HSA that the company contributes to at my current job. It’s my first time on this kind of plan and I was surprised to find that it also functioned as a second 401(k) if you don’t use it much. Another way to save even more money tax free if your 401(k) contributions are already maxed out. So I think you’re right…
Health savings accounts and medical flexible spending accounts are totally different things.
Flex spending account you put money in each year and if you don’t use it, you lose it at the end of the year. I think the administrator gets to keep it as payment for the services they provide (making sure the submitted items qualify, mostly). All you need to do to be eligible is work for an employer who offers one and sign up - and be willing to risk losing some money. All those ads in February and March from eyeglass profiders are related to those accounts (you can actually use the money from the previous year until March 15th of the next year). I think the amount is limited to $2500 per person per year (the hearing aid people hate this). Flex spending accounts don’t earn any interest.
In order to be eligible for an HSA you have to have a high deductible insurance plan (defined somewhere). This lets you put away a lot more money and you don’t lose it at the end of the year so the accounts can accumulate to be very large and all the income on it is tax exempt as well.
As mathguy points out, your health care expenses are only deductible after you get above 7.5% of your income and even then it is only useful if your itemized deductions add up to more than your standard deduction. A flex spending account lets you treat the first $2500 per person as excludable even if you would never have enough expenses to get to the limit under the deduction rules. Why do they exist? No idea. Give away to big corporations, maybe? I’m pretty sure you have to have a pretty big group of employees before running the program (through a contractor) makes sense. There are also flex spending accounts for child care. And maybe elder/other dependent care as well?
With HSA’s I have a little more information. HSAs exist to encourge a shift to high deductible plans. The shift was supposed to magically reduce health care costs because people would be spending their own money and therefore have an incentive to do comparison shopping with their health care dollars. I don’t think it has worked as planned so far. They work very well for wealthy people and terribly for lower middle class who lose their traditional insurance and end up in high deductible plans. The hospital people mentally put them in the same bucket as the uninsured. Their HSAs don’t have much if anything in them and they can’t afford even the “discounted” rate they get as clients of their insurance company.
I just did a long post on the health spending stuff, but it is very long. It will take a while to show up.
I have medical bills that far exceed most mortgages. I also have health “insurance” that covers none of them.
Is housing bubble possible again? Experts disagree
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 9:04 p.m. Tuesday, April 17, 2012
WEST PALM BEACH — There is little to prevent another housing run-up and subsequent bust as long as there are people who want to get rich quick, said the chief economist of AIG during a business conference Tuesday at the Palm Beach County Convention Center.
Ardavan Mobasheri, who spoke to about 100 people gathered for a real estate discussion at the International Economic Forum of the Americas, said the financial crisis that began in 2008 can “easily trace its roots to the excesses of the housing market” but can’t as easily be stopped from happening again.
“So long as individuals have the liberty and freedom to be greedy, the speculative bubbles will be inevitable, and we’ll have to deal with the outcome of the bursting of that bubble,” Mobasheri said. “There is no measure we can take to prevent investors who want in a short period of time to become rich.”
Although there is no cure for greed, changes in mortgage application requirements and underwriting guidelines will help thwart a repeat of the multitude of bad loans granted during the housing boom, said Lawrence Yun, chief economist for the National Association of Realtors, who spoke during the same session as Mobasheri.
“Back in 2005 investors came in with exotic mortgages and liar loans, but that’s not the case today,” Yun said. “These investors are coming in solidly with cash deals.”
Yun was optimistic about a housing recovery, predicting Florida existing-home prices will jump 10 percent by the end of 2012.
In February, there was a six-month supply of homes for sale in Palm Beach County, down from nearly 14 months during the same month last year, according to the Realtors Association of the Palm Beaches.
Yun’s pricing prediction was buoyed Tuesday by a Realtor.com report that found Palm Beach County listing prices were up 15 percent to $225,000 in March compared to the same time in 2011. Nationally, the list price was up 5.5 percent.
A backlog of homes in foreclosure will eventually expand the housing supply, a development welcomed by Florida Realtors President Summer Greene .
“When you put a foreclosure on the market you have, two, three, four offers coming in,” she said.
While real estate may be bouncing back, other speakers Tuesday were more reluctant to forecast a rapid overall fiscal recovery.
“Risks remain high and the path forward is shrouded in uncertainty,” said Lisa Shalett, chief investment officer of Merrill Lynch Global Wealth Management, during her keynote speech. “The global economy is far from out of the woods.”
http://www.palmbeachpost.com/money/real-estate/is-housing-bubble-possible-again-experts-disagree-2311253.html -
“There is little to prevent another housing run-up and subsequent bust as long as there are people who want to get rich quick, said the chief economist of AIG during a business conference Tuesday at the Palm Beach County Convention Center.”
Don’t you need lax lending standards and a readily available flow of easy money to finance a bubble?
Ten percent median price gain YOY in Northern Virginia. No bubble there!
Maybe ‘professional investors’ with OPM, combined with a shaky stock market and low interest rates is enough to produce a bubble.
“Back in 2005 investors came in with exotic mortgages and liar loans, but that’s not the case today,” Yun said. “These investors are coming in solidly with cash deals.”
That’s precisely what’s happening here in Tucson. I posted a news story further down the thread.
At less than half 2005 prices.
But the end-users are paying OVER 2005 prices, at least here.
The discussion on gasoline prices is sickening.
Americans want cheap gas and don’t want to hear about realities. So Republicans claim that environmental regulations are the reason they can’t have cheap gas, and Democrats claim that speculators are the reason they can’t have cheap gas.
That there are more people competing for the cheap oil, and the additional oil is more expensive to get, is not something people want to hear. Which is why nearly 40 years after the Arab Oil boycott, no one has done anything serious about our economic and environmental vulnerability.
At least they are just talking. The Bush response after admitting the U.S. was addicted to oil was…to change daylight savings time again.
The Arab Oil embargo was the excuse to create another HUGE Federal agency, the “dept. of energy”, whose goal was to find ways to promote home-grown energy and wean us from foreign dependence. Let’s see how that’s worked out over the last 40 years? Hummm?
Another FEDERAL Government success story.
Let’s start another Federal Agency, so they can all collect big, fat government salaries and pensions and sit around and talk about what we might could do maybe, after a big lunch in Washington, while we plan for a summit in Rio.
All expenses paid……by the Taxpayers. Hoo ray!!!!
Another FEDERAL Government success story.
Are you talking about Canadian single-payer health care system or the Brazilian energy independence program?
WT, you are wrong on every point. I live VERY close the oil industry. It IS the speculators.
Riddle me this WT…..
Because of “transportation problems” (”no pipelines from where the oil is, to refineries in Texas”) the spread between Brent and WTI has been something like $30 for the past several months.
We are knee deep in oil locally, with plenty of refining capability for our regional needs, and consumption down something like 10% from 2007. Free Market Logic says our price at the pump should be significantly cheaper. But it isn’t.
Discuss. Explain.
You forgot about the gasoline we are EXPORTING as well, along with the permanent shut down of domestic refineries.
Sorry, meant “some” domestic refineries, which artificially drive up prices.
Meanwhile, China now has another refinery on-line with an output equal to Exxon. ALL of Exxon.
Tariffs on Brazillian ethanol don’t help either.
Realtors Are Corrupt®
Drudge Report headline: Obama as a Boy Ate Dog Meat
Other Drudge Report “news” in case you missed it:
Obama’s Father Classified as Anti-White, Anti-American
Robin Leach: Obama is Socialist, Whipping Up Racial War, Economic Divide
Secret Service looking into Ted Nugent’s rant
Well, at least he didn’t eat babies.
at least he didn’t carry his dog on the roof of his car!
I didn’t know Robin Leach is still alive
Tastes like chicken.
He’s saving that for his second term. And only white, heterosexual, Christian babies will get eaten
Robin Leach? I would have thought he would taste more like old jockey shorts.
He’s…. he’s…. he’s an Egyptian….
In Conversation: Barney Frank
By Jason Zengerle Published Apr 15, 2012
Looking back to Freddie and Fannie, in 2003 you famously said that they were �not facing any kind of financial crisis.� Do you accept the criticism that you were wrong about them?
No! Yes, I was wrong in 2003, but I wasn’t in charge. This is the most intellectually dishonest argument from Republicans. Remember, I was in the minority from 1995 to 2006. They were in charge. Their argument appears to be that I stopped Tom Delay from doing something. But this is all on their watch. Now, in 2005, I tried to work with Mike Oxley to get some reform. It became an internal Republican fight. Oxley said the problem was that George Bush gave him the one-finger salute, and that’s what killed it.
I became chairman of the committee in 2007. The first thing we did was pass tough legislation restricting Fannie and Freddie. It’s as a result of that legislation that they were put into a conservatorship and haven’t lost any money [on new business] since 2008. Now, the Republicans have been in power in the House since January of 2011. They have not even moved a bill to a full committee decision. They talk about Fannie and Freddie when they’re out of power. When they’re in power, they do nothing.
But whether or not your opinion was consequential in 2003, did you learn anything from being wrong?
Here’s the deal. The lesson we learned�and not just from Fannie and Freddie�was about what economists call �tail risk�: the idea that something terrible can happen that’s very unlikely. My mistake was not to see that this could happen. Just because you think something is highly unlikely doesn’t mean you shouldn’t deal with it. All right?
To what extent do you think government should incentivize behavior?
It depends on the behavior. One, it should ban behavior that’s destructive toward other people. Beyond that, if there are things that people can do that have great benefit beyond themselves and have some cost, I think you should incentivize them to do that. Not compel them, but help them economically to do it. But if it’s behavior that’s seen as self-destructive individually, then I think the government should stay the hell out of it. I don’t think we should ban smoking, drinking, marijuana, gambling, any of those things.
But in terms of homeownership, that was an instance where you had the �government incentivizing�
I think that was a mistake. I think �decent living conditions is important. But not ownership as opposed to rental.
You’ve been fighting a lonely fight �supporting rental housing. Given what’s happened in the last few years, have you seen it become more attractive?
It’s become much more common now.
What is it about home ownership? It seems that people on both sides of the aisle�
One, it was seen as a way to get wealth. Of course, it turned out the other way. I think it’s just very American, you know. It’s not big in France. It’s this old frontier kind of individualist, everybody needs a home.
But that’s a pretty powerful strain in American life.
And it led to problems. It’s now, however, done so much harm that it’s receding.
http://nymag.com/news/features/barney-frank-2012-4/ - 62k -
Too much obfuscation and too many lies to parse. Fannie and Freddie were always defended by Democrats as the saviors of the “poor and minorities” and BOTH gave big contributions to democrat congressmen, including this jerk. I won’t bother to read his dribble because its always an excuse about how it wasn’t his fault. Sounds a lot like Obama, always pointing the finger somewhere else, even when they are running the show.
Too much obfuscation and too many lies to parse….. I won’t bother to read his dribble
Lies that I haven’t read really stick in my craw.
Oxley said the problem was that George Bush gave him the one-finger salute, and that’s what killed it.
—————–
This passage adds further evidence to my growing pile that our federal goverment is in the hands of people who act like children.
Almost our entire aristocracy is like this.
“I was in the minority from 1995 to 2006. They were in charge.”
Never forget this. The Repubs created this disaster.
18 April 2012 Last updated at 03:09 ET
China new home prices slide for sixth consecutive month
Property prices in China have fallen for a sixth consecutive month amid government efforts to control prices and curb speculation.
New home prices in 46 out of 70 Chinese cities fell between February and March. Meanwhile prices were lower than a year ago in 38 cities.
There have been fears of the formation of asset bubbles in China.
Despite the recent falls, authorities said they would continue to implement strict controls over the sector.
“This is further evidence of China’s property macro control measures,” said Ma Xiaoming of the National Bureau of Statistics.
“The upward pressure in home prices still exists and the property tightening is at a critical phase.”
…
Here’s an interesting union story. I saw an earlier article about it, but now it’s in court.
Strike threat at Hostess could kill off Twinkies
http://money.cnn.com/2012/04/17/news/companies/twinkies-hostess-strike/index.htm
“Hostess Brands, which makes Ding Dongs and a variety of other sweet treats, is asking the bankruptcy court in White Plains, N.Y. to tear up labor agreements…
“We would no longer have cash to keep operating,” said Hostess management in a letter sent to employees on Monday. “All Hostess Brands operations would shut down and liquidation would begin. The 18,500 jobs, plus the health insurance that comes with them, would be lost for good.”
Hostess said it pays about $63.2 million to its employees per pay period and owes more than $1 billion to more than 50,000 creditors. The bakers’ union pension fund was the biggest creditor, owed $994 million, according to the filing.”
“We put an offer on table with $150 million in concessions,” said Ken Hall, the Teamsters’ secretary-treasurer. “… Hall said Hostess’ labor costs are $400 per driver per week less than rival Bimbo Bakeries, which makes Arnold’s bread.”
————
Isn’t this usual page straight out of the airlines playbook?
Company: We’re going to shut down entirely. Jobs unions Twinkies are an American icon *whine*..
Union: Here’s $150 mil in operating cash. If you can’t survive on that, you don’t deserve to run the company. And since 99% of your debt is owed to *US*, — never mind the 50,000 creditors BS — maybe you should take it.
I think I would enjoy watching Twinkies go down. They are probably the most fattening food* in the universe.
———–
*Not kidding. A few months ago I discovered the that best diet food is grass-fed butter. This is not a joke. From January to March I had three tablespoons of butter a day, and lost 3 pounds.
I notice the price of hostess products has come way down since bankruptcy. The little six pack of donuts have been selling for a buck.
Yes, I have also noticed a lot more sales and bonus packs since the bankruptcy.
The free market is wonderful in keeping management and private unions in some kind of balance. Bankruptcy is a sobering reality when your customers can go somewhere else.
Public unions - not so much. They think you can always raise taxes again and again…You HAVE to pay or lose your house.
“I’m Paul Ryan and I approve this message”
FDR wrote ““All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service”. FDR further adds “The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations. The employer is the whole people, who speak by means of laws enacted by their representatives in Congress. Accordingly, administrative officials and employees alike are governed and guided, and in many instances restricted, by laws which establish policies, procedures, or rules in personnel matters.”
http://www.usnews.com/opinion/articles/2011/02/25/collective-bargaining-rights-for-public-sector-unions/comments
You forgot the REST of the quote:
“Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of Government employees. Upon employees in the Federal service rests the obligation to serve the whole people, whose interests and welfare require orderliness and continuity in the conduct of Government activities. This obligation is paramount. Since their own services have to do with the functioning of the Government, a strike of public employees manifests nothing less than an intent on their part to prevent or obstruct the operations of Government until their demands are satisfied. Such action, looking toward the paralysis of Government by those who have sworn to support it, is unthinkable and intolerable. It is, therefore, with a feeling of gratification that I have noted in the constitution of the National Federation of Federal Employees the provision that “under no circumstances shall this Federation engage in or support strikes against the United States Government.””
I LIKE the rest of the quote.
Totally supports the argument that public unions should be illegal
Say WHAT?!
From January to March I had three tablespoons of butter a day, and lost 3 pounds.
I’m curious: was the butter an intentional part of a diet designed to lose weight?
Christine Lagarde is not an economist (she’s a lawyer
). Perhaps she skipped the day in undergraduate economics class when the topic of moral hazard was discussed.
Why should homeownership be a qualification for household-level helicopter drops of liquidity? If French financiers want to advise Uncle Sam on how to hand out free money, why not propose a fair distribution, rather than discriminate against renters in favor of relatively wealthier homeowners who mortgaged themselves into a debt hole? Today’s moral hazard plants the seeds for tomorrow’s debt crises.
THE OUTLOOK
Updated April 16, 2012, 2:54 p.m. ET
Global Housing Worries Spur Calls for Fixes
By SUDEEP REDDY
Four years after a deflating U.S. housing bubble sparked a global financial crisis, housing worries in the U.S. and other countries are weighing on the world economy.
In Spain, the latest euro-zone nation to trigger tremors in global markets, households and banks are struggling with the fallout from the bursting of their own property bubble. Chinese policy makers are trying to cool their country’s housing boom so it doesn’t damage the world’s second-largest economy. And in the U.S., the hobbled housing market continues to hold back the economic recovery.
In the U.S., Europe and parts of Asia, a failure to make difficult political decisions has limited policymakers’ success in returning their countries’ real estate sectors to health. Sudeep Reddy has details on The News Hub. Photo: Getty Images.
The International Monetary Fund this week will urge the world’s top finance ministers meeting in Washington to take more aggressive action to help households burdened by mortgage debt. Doing so, fund officials argue, would help boost consumer spending and global growth.
For the U.S., the IMF ranks housing alongside the federal budget deficit as the top areas needing urgent attention from policy makers. U.S. home prices have dropped 34% since a 2006 peak, and more than two million properties are in foreclosure. Almost one in four homeowners is “underwater,” meaning they owe more on their mortgages than their homes are worth.
Specifically, the IMF waded into a politically charged debate by backing the Obama administration’s proposal to use taxpayer money to reduce mortgage-loan balances for some underwater homeowners. A key housing regulator has expressed skepticism about the plan, and many Republicans oppose it, worried it could encourage borrowers to default on their mortgages in hopes of having their debt reduced.
IMF Managing Director Christine Lagarde last week publicly endorsed the idea of reducing U.S. mortgage balances. “American households have to be able to unload a bit,” she said.
The IMF’s new analysis of 99 housing busts across 25 advanced economies over the past three decades found that housing crises preceded by large surges in household debt tend to be more severe, with an economic slump persisting at least five years.
…
This is where I am grateful for what attorneys can bring to the table.
Bloomberg News
Lagarde Calls for ‘Bold’ Discussions on Financial Regulation
By Eric Martin on April 17, 2012
Christine Lagarde, managing director of the International Monetary Fund, urged policy makers to consider “bold” changes to financial regulations that she said are necessary to ensure world stability and growth.
The global recovery remains fragile after improving in recent months, with public and private debt levels in Europe too high and the U.S. held back by household debt, Lagarde said. She said regulatory changes that focus on raising capital levels, rather than cutting back lending, as well as those that reduce legacy assets, will help economic expansion, she said.
“To help achieve the objectives of growth and stability, we need a stronger and safer financial sector that puts societal interest ahead of its own financial gain,” Lagarde said at an IMF event before this week’s meetings in Washington. “We need a more stable financial system, one that serves businesses and households rather than destabilizes the functioning of the real economy.”
…
You know, once upon a time, we had regulations that made the banksters “…serve businesses and households rather than destabilizes… ”
But with “over regulation” like that, the banksters couldn’t promise 10% yearly ROIs, or take home multi-gazillion dollar salaries and bonuses.
This is beautiful, The heavily indebted gambler is given a handout, and the reckless lender is given a handout but everyone who behaved responsibly is given a flaming bag of crap.
Thank you IMF
Thank you FED
Thank you tax policy
Thank you trade policy
RIP hardworking responsible middle and upper middle class.
I don’t believe the Chinese authorities are planning for a reenactment of Japan’s gradual two-decade slide in property values.
April 18, 2012, 1:54 a.m. EDT
China home prices fall in March, raising concerns
By Chris Oliver, MarketWatch
HONG KONG (MarketWatch) — March home prices in China fell in a majority of the cities tracked by the government, data released Wednesday showed, with one analyst saying the price activity suggested a deepening slowdown in construction activity.
Out of the 70 cities surveyed by the National Bureau of Statistics, 46 reported weaker prices from the previous month, up slightly from 45 cities that reported declines in February.
Prices were little changed in 16 cities, while 8 cities saw prices gains, according to bureau’s data.
Compared to prices from March 2011, 38 cities saw lower property values, compared to 27 cities that reported year-on-year price drops in February, according to the survey.
“This will have a major impact on growth this year,” Credit Agricole CIB economist and strategist Dariusz Kowalczyk said in a note from Hong Kong after the data release.
He said that sliding home prices will lead to weakness in residential land prices, which will in turn add to the financial strains already weighing on local governments.
‘The housing market is the main risk to China’s soft landing,” Kowalczyk said, highlighting separate data showing home sales lower 17% during the first quarter.
Construction activity accounts for more than 9% of the Chinese economy, according to Credit Agricole.
…
Why not? Even though it screwed a lot of people and wrecked the Japanese overall economy, those at the top made out like bandits.
Literally.
After all, that’s all that matter, right?
It seems clear that an unsustainable housing boom will naturally end in contraction in the real estate sector until balance can be restored between a society’s fundamental housing needs and housing construction. But hair-of-the-dog cures before the market has time to restore fundamental balance run the risk of reflating a bubble, putting the economy right back into the pot of stew in which it previously boiled.
I vote for the inflate-away theorm. By the time they flush all deadbeats, jinglemailers and prime HELOCs out of the system, the remaining homeowners will be rewarded when inflation alone puts them back above water (and below market rents). Time frame: about a decade.
“I vote for the inflate-away theorm.”
I am sure you have great backing among millions of households facing mortgages that need to be paid off, and that senior citizens facing two decades of living expenses on fixed-income pensions would be glad to chip in a little to help you pay for your house.
It has worked for the last 40 years. Why can’t it work to infinity?
i will never be old enugh to understand that George.
Compassionate conservatism:
“I know hard it is for you to put food on your family”
“You work three jobs? How uniquely American”
“You know, one of the hardest parts of my job is to connect Iraq to the war on terror.” –interview with CBS News’ Katie Couric, Sept. 6, 2006
Who’d have thunk? A politician speaking the truth.
Ahh, the Palmster’s Schadenfreude meter is pinned all the way over, watching Spain get its panties in a wad over the whole Respol YPF -Argentina nationalization issue. What goes around, comes around, eh? After all, Spain let a local Tampa treasure salvage firm go to all the expense and do all the heavy lifting and bring up treasure from the bottom of the sea AND THEN, with the help of the US State Dept. and courts, forced them to turn it over to Spain on the grounds that it was national treasure that belonged to them. Of course the fact that much of this treasure was probably plundered from the Americas in the first place didn’t seem to make much difference, and nothing gives the US goobermin a thrill more than bending over its citizens for foreigners.
I am not a fan of nationalization, however in this case, I think I might place a call to the local Spanish consulate and give ‘em the old Simpson’s Nelson “HA-ha”.
http://www.wtsp.com/news/article/240648/8/Treasure-leaves-Tampa-for-Spain
This was a case that got me looking at the symbiotic relationship of “friendly governments” and the Fascist Courts that we have here in America.
Let’s see, it’s LOST treasure at the bottom of the sea. Throughout history, that is “international territory” and nobody has a “claim” to it, although, now, many governments are trying to map out the world and create international agreements that give multi-lateral control to the various governments. Government by the bureaucrat, of the bureaucrat and FOR the bureaucrat.
My take was exactly as YOURS. Somebody went to the bottom of the ocean and retrieved some treasure. Good for them. Naturally, everybody else wants to make a claim, including the descendents of the families that lost it. Too bad. If you had a claim, you should have HIRED this company to go retrieve your property. It’s been unclaimed for centuries.
And what gave the US Courts the right to steal it from the salvers?
The fact that it ended up on US soil?
I think Spain’s claim was ludicrous. They STOLE all the silver from the “South america’s”, which, of course, they “claimed” as part of Spain.
“I hereby plant my flag and claim this land and all that’s in it for Spain”.
Let the looting begin.
And, once stolen, it’s now Spanish property from here to eternity, no one can steal it back from us. …. And the US Courts agree????
My god? What a screwed up legal system. We may need a revolution.
And one more thing while it’s on my mind………..
National Treasure? Coins minted in various colonies (serfdoms) on the backs of slave labor and the suffering of thousands of “workers”.
I guess it’s a great legacy to “display” what slave labor and imperial conquests can produce for the benefit of the crown.
And….and AMERICAN Court agrees. Go figure.
May?
“Prudence, indeed, will dictate that governments long established should not be changed for light and transient causes; and accordingly all experience hath shown that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security.”
Right after American Idol and the ball game.
I’ve been seeing more “don’t tread on me” gadsen flag bumper stickers, shirts, etc. People are starting to wake up… slowly.
I’ve been seeing more “don’t tread on me” gadsen flag bumper stickers, shirts, etc. People are starting to wake up… slowly.
Out here in AZ, I’m seeing far fewer of the snake flags than I did two years ago.
Likewise, PA. When I was back there, I don’t think I saw one. And Chester County, where my folks live, isn’t exactly a liberal hotbed.
Read “Ship of Gold in the Deep Blue Sea”. The guys who salvaged the SS Central America had a “short list” of ships that sank in the deep ocean, that had cargo worth the multi-million dollar effort to salvage.
Most were eliminated from the list, because of precisely the problems the Tampa guys ran into. Without the ship being considered a “warship” and a “War grave”, which, as I understand, is the reason Spain laid claim.
Go find the USS Nevada, scuttled in the deep ocean after WWII. Sunk with (reportedly) a fortune in silver buss bars in the electrical system (due to the shortage of copper, when the ship was repaired after it was damaged at Pearl Harbor). Try to salvage the silver, and see what happens.
I think Spain’s claim was ludicrous. They STOLE all the silver from the “South america’s”
+1
Leave $pain alone, theys still $martin’ about handin’ over the keys to Fort New Orleans to their northern brothers, the grape-makers. [The grape-makers are still $cratchin' their heads about having done the very same thing as well.]
What’s so funny is that TJ only wanted to buy New Orleans from Napoleon, but Nappy ended up offering the entire territory.
Why the local consulate?
http://maps.google.com/maps?hl=en&q=embassy%20spain&psj=1&bav=on.2,or.r_gc.r_pw.r_qf.,cf.osb&biw=590&bih=533&wrapid=tlif133476119568110&safe=active&um=1&ie=UTF-8&sa=N&tab=wl
phone number shows up on the page
Ah, the incomparable polly has spotted and called my bluff, big time. No, the Palmster is too chickenshot to contact the Spanish embassy. For one thing, I don’t want to cause any more pain for Odyssey Marine (a decent and plucky bunch of folks) by having Spain think I’m a shill for that company and sticking a thumb in those Spanish eyes.
BUT, the Palmster DID contact the Argentinian consulate out of Miami and congratulated them wholeheartedly on their recent acquisition of Respol/YSP. They were very excited by my reaction and somewhat confused. Twice I was asked “What can you offer us?” I think they at first thought I was a potential investor. But they were just as gracious when I said I was a mere American citizen who just wanted to offer my compliments. They asked me to send them an email, so I did.
Hmm, now I realize it was the word “offer” that created the confusion, and a misinterpretation of “offer my support”. Uh, I realized that “offering support” has a different connotation in South America, LOL.
We’re they looking for drugs??
Investment funds, I think.
I love it when people speak in the third person. It’s so…
Bob Dole.
I’ve noticed two things about attorneys who dabble in financial economics:
1. They act as though they know lots about financial economics.
2. They generally know squat.
A close relative is an attorney who is often involved in multi-million dollar CRE deals. The first time I explained the bubble concept to him, well over a decade ago, he politely smiled at me as though I had just stepped off a space ship from Mars. I think he has more respect at this point for what I know about bubbles.
Canadian real estate always goes up — usually…
P.S. Don’t buy until at least 2014, after the Canadian and Chinese all-cash investors are sidelined by collapsing real estate bubbles back home.
UPDATE 1-Canada home prices fall in March, sales up-CREA
Mon Apr 16, 2012 11:18am EDT
* Home prices fall 0.5 pct in March from year earlier
* Vancouver-area price declines impact national avg
* Prices in Toronto rise 10.5 pct
* Home sales up 2.5 pct in March from Feb
By Jon Cook
TORONTO, April 16 (Reuters) - Canadian home prices fell in
March from year-ago levels even as existing home sales activity
picked up, with a cooling of the once-hot Vancouver market
offsetting big price gains in Toronto and steady increases
elsewhere.
A report on Monday from the Canadian Real Estate Association
showed the average residential home price in March was C$369,677
($370,600), down 0.5 percent from the same period last year. The
figures are not seasonally adjusted.
…
If anyone can make sense of this guy’s point for me, I’d be grateful for the explanation.
April 18, 2012, 4:26 a.m. EDT
Forget the Fed, stocks ARE QE3
By Michael A. Gayed
“A little perspective, like a little humor, goes a long way.” — Allen Klein
I remain stunned by the inability of most to appreciate the stock market’s ability to create (and destroy) wealth.
The negative narrative surrounding risk assets seems to be fixated on this idea that the stock market simply cannot rally without further Quantitative Easing by the Federal Reserve. While one could argue this has been the case with QE1 and QE2, it does not necessarily have to be the same this time around. Last week I appeared on Bloomberg with Gary Shilling co-hosting alongside Adam Johnson and Trish Regan. Click here .
Jim Bianco made the bearish case that without QE3, markets would be unable to stand on their own. My argument? The stock market IS QE3.
…
In particular, does the “stock market is QE3″ theory work when prices are falling, or just when they are going up?
Wednesday’s earnings highlights
Profits preoccupy Wall St.
Stock index futures point moderately lower as Investors brace for possible consolidation following Tuesday’s snapback rally. Deluge of quarterly reports begin to flow in.
How about a little Spanish QE3?
April 18, 2012, 9:37 a.m. EDT · CORRECTED
Spanish stocks lead losses in Europe
Iberdrola tumbles on stake sale news
By Barbara Kollmeyer, MarketWatch
An earlier version of this story misstated the time frame of a high for the bad-loan ratio for Spanish banks. The story has been corrected.
MADRID (MarketWatch) — Spanish stocks were again at the heart of losses for European markets on Wednesday, as the country’s banks dropped on news of a sharp rise in bad loans.
…
Practical question for any of our resident motor heads who might check in today:
My son is driving a vintage Chevy 1/2 ton with a carburated 350. He thinks going to fuel injection will boost his crappy gas mileage 40%. I am skeptical. Thoughts?
Improved mileage yes, 40% sounds optimistic.
A lot depends on the existing carb vs the proposed FI, If the current intake manifold housed 6 2 bbl carbs then 40% would be an easy target.
40%? Not likely. 20%? Maybe.
Has he done an economic analysis? I would think a throttle-body FI system, with the necessary sensors and controls, would be somewhere around a thousand bucks. Can he recover that cost over the expected remaining life of his “vintage” truck?
He is looking at a system that is $1500. He figures that will save him $100/month. The truck should last a very long time if he can survive the gas bills (longer I guess if he can’t). It was his first completed restoration project vehicle. He took it down to the frame.
He is good with the purely mechanical stuff, but IMO lost on tuning, and driving conservatively.
If he wants to save money on gas, he’ll park the truck, and use that $1500 to go buy a 30-40 mpg economy car, and use the truck when he needs to.
Or buy a newer truck, circa 1995-2001 model year, that has sequential port fuel injection already. Look in Texas, or the southwest. Lots of low rust trucks down there, all they need is interior and paint.
Throttle Body FI systems aren’t much better (performance and economy wise) than a decently tuned carburator. If it isn’t an upgrade to port fuel injection, it isn’t worth the time. And port fuel injection systems are $2000 plus.
If nothing else, tuning the carb will teach him a lost art, one that will come in handy if the Zombie Apacolypse happens.
His “restoration” isn’t going to be worth squat, if he uses it as a “daily driver”.
Where can I find one of these???
$1500 to go buy a 30-40 mpg economy car
No, it’s a top end Holley four barrel. My nose tells me it is running rich.
When the secondaries open up on that Holley 4bbl ( I’m assuming some little high performance air cleaner ) the baWHAAAAAAAAAAAAA sound and acceleration that results can be addicting to a young lead foot. The FI provides no such reward and as a result could save a lot of fuel.
Improved mileage yes, 40% sounds optimistic.
+1
If I owned that vehicle I’d probably do the same thing, but mostly for easier starting in cold weather. The mileage improvement would just be icing on the cake. Yes, you can fool with the carb until it starts reasonably well most of the time, but it gets tiresome.
CharlieTango, I sent you an e-mail about doing work for your company. Never got a reply. Which of the e-mails on your site should I have sent it to? Just tell me the part before the @ sign and I’ll take it from there.
Sorry Slim, try ed@
The most efficient fuel injection systems are electronically timed, and the nozzles inject directly into the combustion chamber a perfectly atomized spray. In addition, sensors measure the exhaust gases too. You’ll never get there with the current cylinder heads. Save your money.
What is different about the heads? IIRC the engine he put in the truck actually had fuel injection and he discarded all that. It was old school injection though, no fancy exhaust monitoring.
Blue-
The heads on many injected motors have the injector bosses cast/machined into them so the injectors fit in the head above intake runners, pointing at the combustion chambers. This is a more efficient system that the TBI injection kits your son is probably looking at (these are popular with many Chevy enthusiasts).
I’m not a big Chevy guy, but here’s what I’d do: do some research, go to the junkyard and pull a set of heads and the complete injection system/sensors/wiring harness off of a late model truck with a 350. If it bolts up it would just be a matter of running the wires and getting an appropriate fuel pump to work with the demands of EFI.
Good luck!
Winner. 100% correct. There is no way you’re going to get mileage from a 650-850 cfm Holly and the old style fuel injection had
a lot of problems. The new injection systems
need the new heads. Good luck.
Thanks. A robust fuel pump is already in his pile of hoarded car/truck pieces.
Better yet…….just take the WHOLE LT-1 or LS-1. Get all of the electrical components, while you are at it. This may require the purchase of a complete car/truck.
Assuming you just don’t say screw it, and just buy the newer car/truck, and drive it.
I think he assumed that the motor did not originally have fuel injection. Port fuel injection is the best if you have the equipment for it.I cannot give you an estimate of fuel savings.I can say that the older chevy v8s got horrible mileage. We have an older pickup and you are lucky to get 14 mpg on the highway. If you are in the city 8-10 on a good day. So what does an older chevy motor in truck with fuel injection stock get?
He’s getting about 12 mpg now (with the carb), commuting to school on the back roads.
Bought a 2001 Dakota a couple of years ago, because I got tired of not having a truck.
Standard cab, short bed, 4.7 liter cammer V-8, 5 speed auto, 3.55 gears.
18 mpg consistently @ 70-80mph. Would do better with a bed cover, lowered an inch or two, 3.08 gears, and an air dam.
“commuting to school”
Public or private?
“on the back roads.”
Public or private?
That’s an interesting question Muggy. I suppose the school is semi public, in that it is sponsored by the County, yet charges a fee for services. Not Public like the library or the town square or 4th grade.
Here’s my recommendations all guaranteed to save money.
1. Look at new tires and aeromodifications
http://www.evworld.com/article.cfm?storyid=870
2. Buy a motorcycle or small car as a commuter, if he drives a lot of miles he’ll make it back.
(20,000 miles/12mpg)* 4/gallon = 6000 dollars a year. He could buy a good used small car for half this.
3. Carpool, BUS
4. Put a camper on his truck and sleep in the parking lot, or find a friend on campus that will let him couch serf a couple nights a week.
Yipes! There’s an in-VEST-ment boom in Tucson! People are snapping up houses to rent out!
From our leading daily fishwrap:
Tucson experiencing a boom in real estate investments
Money quote from the article:
A shift has also occurred in who the investors are. The stereotype of investors as professionals buying low, fixing homes up and selling high is breaking down.
“In 2004 and 2005, investors were looking to flip,” Kaplan said. “I think now the investor is buying to rent and hold.”
Increasingly, investors are regular people looking to augment their income with a rental property or two, not professional flippers.
“For the most part, they’re normal, everyday people with a little extra cash,” said Brent VanKoevering, a real estate agent for Long Realty whose clients are now mostly investors. “They see great opportunities and are scared of the stock markets. Some have already had rentals.”
To which I say:
I live in a neighborhood where the Class of 2007 in-VEST-ors are being flushed out. They bought places to rent out too and guess what? They learned that landlording isn’t all it’s cracked up to be.
Hence, they’ve given up and their houses are now just sitting there, rotting away. I’d imagine that some are in foreclosure, but it’s hard to tell.
There’s one more problem with this buying to rent out thing. Tucson is up there at the top of the most vacant cities list.
Which means that your snapped up in-VEST-ment may well have a “for rent” sign creaking in the wind like so many others.
Yeah, I was gonna say, who the fug wants to live in Tucson? No offense, but I’m just sayin’.
Although, it is just a stone’s throw to that little Mexican jewel, Nogales. It’s just like Tijuana, only hotter!
Don’t things rot very slowly in Tuscon?
BTW, I might have a project with a company in your town that builds big helium dirigibles. If a visit is in the works, I’ll take you up on that offer of a hot cup of tea.
in-VEST-ors
What is the significance of that typography?
Around here, there are quite a few people who like to puff themselves up by saying that they’re investing in real estate. And all they’re doing is buying houses in neighborhoods like this one, filling them with crummy tenants, and leaving us, the neighbors, to deal with all the problems.
My use of the word in-VEST-or? Well, let’s just say that it’s my way of doing a bit of ego deflation.
“For the most part, they’re normal, everyday people with a little extra cash,”
Shocking, nothing about Chinese or Canadians in the article. Maybe they know about the vacancy rates?
FYI: Trends do not continue linearly, indefinitely.
I listened to a bit of the GSA hearings yesterday. I was struck by how ridiculous it all was. Politicians saying the right things but with no intention of doing them.
I realized the Republicans have lost all credibility on fiscal prudence or international reticence. 2000-2008 put the lie to the rhetoric. So listening to one bloviate about the spending at the GSA is just eye-rolling.
Democrats bloviated about it too, but they don’t even pretend to care about fiscal prudence or reticence in international affairs. They’re as interventionist as the Republicans. Even when there’s a Republican president in office, even more so with a Democratic president in office.
These are non-serious peacocks trying to get quotes in the papers so they can help their re-election campaigns. I understand why they do it - if they didn’t, they’d get unseated. And just for a less-deserving peacock to take the seat?
It was such a farce. If they’d spend the time and effort they spend on these show hearings and pursuing baseball players for steroids, on actual issues - gas prices, cost of living declines, budget deficits, debts, military strategies - they might be able to regain a modicum of credibility.
looked like a circus act. how about the dude in the hot tub with the wine in vegas? His job looks rough. He made like 8 trips there before his actual convention?
Kabuki Theater.
I recently saw a video of a baby elephant being killed by a pack of lions. The lions stampede the herd at night, the baby gets left behind, its eyes are wide and it’s screaming horrifically as its pulled down, kicking ineffectually as the lions tear into it and begin to feed.
This is perfectly natural. The way nature intended.
Free markets are natural. People coming together, of their own free will, exchanging goods and services.
HOWEVER - sometimes what’s natural isn’t always good. If a market starts yielding external costs resulting in net costs on the society, then it’s not desirable.
People who believe the free market is the One True Way are like the hippies who believe everything that’s “natural” is good. I think it’s the same mentality, except applied to different subject.
Markets are subject to undesirable and inefficient deformations. Despite what the free market hippies claim.
Just because something is natural doesn’t mean its good or societally beneficial.
Free markets REALLY break down when too few have too much money or too large of a market share. They become able to manipulate the market and the market is no longer free.
See Goldman Sachs purchase of HUGE metal storage facilities as a likely example.
My guess is this is going on more and more, anything that can be stored and manipulated. I believe this is one of the reasons we are seeing huge drug shortages. New unknown companies buying up huge stock piles of drugs then getting their henchmen in gov or at drug makers to shut down production for a while. Manipulator then sells stockpiles of drugs to desperate hospitals.
Really makes me want to move off the grid, and grow my own food.
Neuromance,
A free market isn’t “natural”, nor is a market of any type. A market is a derivative of human ingenuity. There is no “elephant market” among lions now is there? A free market is one loosed from the control of central planning. The “just because it’s natural doesn’t mean it’s good” argument just doesn’t apply.
It comes down to the meaning of “natural.” Man is natural. He is a product of the evolving universe. It is a conceit to think that man is somehow different or above the natural world. It’s similar to the thought that man was the center of the universe.
Humans have “natural” behaviors. Based on their nature. A human is an organ bag surrounded by a muscle, and a skeleton and skin, with a stalk at the top containing the brain.
Humans have “natural” interactions. Competition, fighting, f–king, fleeing, feeding. They are similar to pack animals.
When I say a free market is “natural”, I mean it is results from a basic interaction between humans who can provide for each other’s desires. Frank has item X, Alice has item Y. Frank covets Y, Alice covets X. Their interaction is the most basic - and “natural” - interaction between humans. The agreement they come to in order the coveted product they have to the other is eminently natural.
Typo: “The agreement they come to in order the coveted product they have to the other is eminently natural.”
Should be:
“The agreement they come to in order to provide the coveted product they have to the other is eminently natural.”
“Frank has item X, Alice has item Y. Frank covets Y, Alice covets X.”
I see markets as much more competitive than this. Alice wants to get Frank’s X for as little as possible, while Frank wants to get as much as he can. In good times Frank and Alice are more likely take it easy reaching a deal (there’s lots of elephant to go around), but scarcity will bring out the predatory survival instincts.
We also have our ‘community of chimps’ instincts which recognize that cooperation can net benefits to everyone. Regulating markets is one way of cooperating.
The most atomic/indivisible element of a “free market” is people getting together of their own accord, and figuring out how they wish to exchange goods and services.
In pre-currency times, it would have been some kind of system of barter. With the advent of currency, it could include some agreement on the amount of currency to exchange. Barter remains a possibility.
The larger free market is groups of these atomic elements/transactions viewed in the aggregate.
My ultimate point is that while this is a natural interaction between people who don’t wish to resort to violence, a free market can deform and lead to inefficiencies and net costs imposed on the larger society. Examples include monopolists or monopsonists, or decisions between neighbors to allow a tire dump on their properties, which impacts the health (think mosquitos) and property values of their neighbors (externalized costs).
So, there is this article on CNBC about how GenX is not saving enough for retirement. Their 401(k) are too small. They are not buying annuities or long-term care insurance. Home ownership rates are down.
It isn’t written from a POV of “Oh look, their unemployment is up, pay is not keeping up with inflation, college has gotten stupid expensive, their payroll taxes than any other generation had at their age, etc.”
No. It is written from a POV of “We’re not able to make enough money off them from selling them financial services….”
Me thinks this nation will begin to understand the saying “Can’t get blood from a turnip” as the Boomers retire and GenX is expected to step up as the spenders.
Off shore their jobs, lie about the real inflation rate of necessities, strip what little savings they have via repeated boom-bust cycles, bury them under a mountain of unrepayable student loans and other debts, sucker them into paying twice the rent equivalent for a house… Yeah, not only are they not going to be spending money, they aren’t even going to be repaying their debt, causing all the money that was created from those debts to mass poofage.
Have fun trying to suck blood from us turnips Wall Street.
No. It is written from a POV of “We’re not able to make enough money off them from selling them financial services….”
Bingo!
As companies end pension plans, it’s another revenue stream gone.
You do realize, with psycopaths, its always the victim’s fault.
There’s still your Social Security and they are trying like hell (and will probably succeed) to get that!
19th century living standards weren’t so bad, were they?
Not for the rich, they weren’t.
The thought occurred to me a few weeks ago after talking to Republican neighbors that they’d prefer to make America the way it was 100 years ago. Based on what I know of my grandparents’ lives, I strongly disagree. It makes me wonder if some of those people had grandparents who spoke to them about the old days. It’s reasonably safe to assume that these blue-collar Republican don’t read history books.
Well I think there’s also the fact that they experienced their boomer parent s raised with this false perception that money and amassing of material possessions equates with happiness, and never seeing it achieved. Not only can they GenXers not afford these things, they really don’t see much pleasure in them. The ones I know are happy with an iPod, a good microbrew, and building community around them. We all realize that GenXers (I am on the cusp) have little promise of pensions, social security, living wage jobs , benefits, and aspirations to climbing the socioeconomic ladder (not that crossing income strata ever truly existed in this country – this was merely a Madison Avenue ploy). Not all of them, of course, but many are self-satisfied with minimal material pursuits, and instead seek experiences over expensive ‘things.’
And the entire financial services industry has cannibalized itself. Unfortunately I still have many friends that rely upon their ‘financial aadvisors.’ The ones I worked with that truly cared about their clients never made the numbers and were pushed out the door; it was usually the shysters that succeeded in the industry.
Considering the real rate of inflation and the cost of even minor emergencies, amassing money is required.
“long-term care insurance”
It takes a lot of faith in a company to buy long-term care insurance. Will they be around when you need it? Will they actually pay out what it costs to care for you? Is that kind of life really worth living?
“as the Boomers retire “
What retirement? Boomers pensions and 401Ks are going to go poof in the next 10 years or so (note Hostess solution above and history of 401K to 201K as investments get eaten). And younger generations will demand that boomers partake in the voucher-Medicare before it’s all over. I foresee a short retirement for most boomers.
Note to self……copyright “001K”
“Will they actually pay out what it costs to care for you?”
That isn’t the way long term care insurance works. You pick a base amount per day, an inflator, whether that inflator is compounded or not, and a term (how long they will pay for it before your coverage runs out). For example, I don’t remember what her base amount is, but my mother has a 4 or 5% inflator which is not compounded and her term is unlimited. I think my dad has a 3 year term. As far as I know most companies don’t sell unlimited anymore.
In their volunteer work with other seniors, what they are seeing is that people have a 2 year term on both people in a couple. That turns out to be fine for the first one to deteriorate, because their spouse takes care of them for quite a while, and when the healthier spouse can’t handle it anymore, they are less than 2 years from dying. The second person, on the other hand, is screwed. They don’t have built in help, so they need paid help sooner. They start with a home aide, and by the time that isn’t enough, their eligibility is almost over and they have a heck of a time finding a nursing home when the home knows that medicaid is all they are going to get after a few months. They don’t end up in the nicer places.
Well…. afterall…. Realtors Are Liars®…
Do you understand now?
Bond shelter
America’s ability to issue debt is helped by a resemblance between Treasuries and money
The Economist
Mar 10th 2012 | from the print edition
IN A financial landscape full of oddities, the prospect of America being paid interest by its creditors when its national debt is rocketing is one of the oddest. The Treasury recently disclosed it is exploring how to let investors enter negative yields when bidding at debt auctions. Clearly, demand for American government debt is driven by much more than a hunger for returns. Financial-market participants use Treasury bonds and bills as collateral to secure lending, for instance. And for risk-averse investors such as foreign central banks, money-market funds and retirees, America’s debt is uniquely suited to storing savings without much due diligence. In short, its government debt is a lot like money.
http://www.economist.com/node/21549919
“In short, its government debt is a lot like money.”
Technically, U.S. government debt amounts to no more nor less than a promised future series of fixed nominal payments in dollars. So the only differences between government debt and dollars are timing of availability (dollars in your hand versus bond coupons paid in the future) and the likelihood of future payment (generally assumed to be 100%).
Curiouser and curiouser…this development hardly appears hyperinflationary.
Pound pops: QE off table?
British pound rallies as minutes from the Bank of England’s latest meeting reveal a central bank that’s less inclined to engage in so-called quantitative easing by expanding its bond-buying program.
• QE3 and the currency risk | Fed watcher’s five money moves | Why stocks are the new QE
Dick Clark is dead at 82.
April 18, 1942. Dolittle’s Raid on Japan. Launched 200-250 miles farther away from Japan than intended, they were looking at ditchings/bailouts before their airplanes left the deck.
The classic American stupid and futile jesture to “improve morale” on the home front. Of course, the Japanese claimed that all they hit were schools and hospitals
(it’s just uncanny how, even today, all we ever hit are schools/hospitals/civilians……).
It didn’t mean much……except for the fact that their bombs fell on Japan at exactly the time that the Japanese Army and Navy, were arguing/deciding on future strategy.
Ahhh, unintended consequences…….
The Army wanted the Navy’s help in invading Australia, or possibly India.
The Navy was looking at Fiji and American Samoa, to cut the lines of communication between Australia and the US, with a side benefit of destroying the USN’s aircraft carriers, who had caused major damage during the Japanese landing at Lae-Salamaua on March 10.
The Dolittle Raid mortified the High Commands of both the Army and the Navy, in that Tokyo and the Emperor (indirectly) were attacked with no losses. The raid was known to have been launched from a carrier deck. So the Army fell in behind the Navy’s plans.
Hawaii was too tough logistically to invade…..never mind the defences.
So they had to find a place that the US Navy’s carriers would have to defend. Preferably out of range of land based aircraft, but in the Central Pacific, and close enough to Hawaii to threaten it and it’s approaches, especially if it was big enough for an airfield. American Samoa fit the bill, but was a long, long way from Japan………
I think the attack directly lead to the Battle of Midway.
Which the U.S. won pretty handily.
And, if you’re in a travel mode and go through Chicago Midway, check out the WWII aviation history exhibit. Well worth a layover. Then stop by Lalo’s restaurant for some of the best airport Mexican food in the country.
In spite of ourselves. Even knowing what the Japanese were planning, it was close to being a disaster anyway.
Unfortunately, nobody on Enterprise or Hornet seemed to know how to organize an air strike. Their obsolete torpedo bombers found the Japanese first, and went in without fighter escort. No survivors returned to Hornet, and only a couple from Enterprise.
Hornet’s dive bomber squadrons missed the Japanese Fleet completely. Enterprise missed, but happened to see a single Japanese destroyer hauling azz to the northeast on their return leg, and went the direction it was heading.
A mistake caused all but three of Enterprise’s dive bombers to attack “Kaga”. Only THREE attacked “Akagi”. Fortunately for us, Lt. Dick Best (”the best dive bomber pilot in the Navy”) was one of them. He scored the ONLY HIT (although there was one extremely close miss that may have damaged the carrier’s rudder)
Only Yorktown launched anything like a co-ordinated attack, including an (insufficient) fighter escort for the torpedo bombers. (they were so slow that some of the topedo attacks lasted somewhere close to 30 minutes…….a long time for fighters and anti aircraft guns to shoot at you. Especially when your altitude and bearing are known).
I’d sure like to see someone do some research on the casualty rate of torpedo bomber crews (from both sides) who attempted to attack an aircraft carrier during 1942. Probably something on the order of 90% KIA by 12/31/1942.
I cannot recommend highly enough “Shattered Sword” by Jonathan Parscall and Anthony Tully. THE definitive book about Midway.
Here is a glass to my dad, and the Night Fighters.
Medical Joke du Jour……
A bankster couple are trying (unsuccessfully) to have a baby. Doc decides to check out the hubby. Needs a “sample” to test. Sends him to a room where there is a 52″ TV streaming HD porno, and an attractive lab technician to help him “furnish the sample”.
Gets dressed to go home. As he walks out the door, he passes a room packed with guys standing around, holding sample cups in one hand, and furiously trying to “stroke one out” with the other.
“What’s the story with those guys??” the bankster asks the nurse.
“Oh, those losers are members of an HMO……..”
I guess in this case I’d rather take the home remedy.
Looking at the stories on student debt Gen Xers and unemployment really suggests to me that we are going to have a massive collapse in household formation that the PTB and even the pessimists (ie realists in my view like Gary Shilling ) don’t appreciate.
What I see is siblings, their partners, their children, piling into the “family home” with parents.
Kind of like four generations ago.
http://www.bloomberg.com/news/2012-04-17/short-sales-surpass-foreclosures-as-banks-agree-to-deals.html
WORK & FAMILY
April 17, 2012, 7:02 p.m. ET
To Pay Off Loans, Grads Put Off Marriage, Children
By SUE SHELLENBARGER
Student-loan debt is having a sharp effect on people’s lifestyles. Four-figure monthly loan payments are handcuffing grads at all levels of the work force. Sue Shellenbarger has details on Lunch Break. Photo: Jon Lowenstein for The Wall Street Journal
Between the ages of 18 and 22, Jodi Romine took out $74,000 in student loans to help finance her business-management degree at Kent State University in Ohio. What seemed like a good investment will delay her career, her marriage and decision to have children.
Ms. Romine’s $900-a-month loan payments eat up 60% of the paycheck she earns as a bank teller in Beaufort, S.C., the best job she could get after graduating in 2008. Her fiancé Dean Hawkins, 31, spends 40% of his paycheck on student loans. They each work more than 60 hours a week. He teaches as well as coaches high-school baseball and football teams, studies in a full-time master’s degree program, and moonlights weekends as a server at a restaurant. Ms. Romine, now 26, also works a second job, as a waitress. She is making all her loan payments on time.
They can’t buy a house, visit their families in Ohio as often as they would like or spend money on dates. Plans to marry or have children are on hold, says Ms. Romine. “I’m just looking for some way to manage my finances.”
Total U.S. student-loan debt outstanding topped $1 trillion last year, according to the federal Consumer Financial Protection Bureau, and it continues to rise as current students borrow more and past students fall behind on payments. Moody’s Investors Service says borrowers with private student loans are defaulting or falling behind on payments at twice prerecession rates.
Most students get little help from colleges in choosing loans or calculating payments. Most pre-loan counseling for government loans is done online, and many students pay only fleeting attention to documents from private lenders. Many borrowers “are very confused, and don’t have a good sense of what they’ve taken on,” says Deanne Loonin, an attorney for the National Consumer Law Center in Boston and head of its Student Loan Borrower Assistance Project.
More than half of student borrowers fail to max out government loans before taking out riskier private loans, according to research by the nonprofit Project on Student Debt. In 2006, Barnard College, in New York, started one-on-one counseling for students applying for private loans. Students borrowing from private lenders dropped 74% the next year, says Nanette DiLauro, director of financial aid. In 2007, Mount Holyoke College started a similar program, and half the students who received counseling changed their borrowing plans, says Gail W. Holt, a financial-services official at the Massachusetts school. San Diego State University started counseling and tracking student borrowers in 2010 and has seen private loans decline.
The implications last a lifetime. A recent survey by the National Association of Consumer Bankruptcy Attorneys says members are seeing a big increase in people whose student loans are forcing them to delay major purchases or starting families.
Looking back, Ms. Romine wishes she had taken only “a bare minimum” of student loans. She paid some of her costs during college by working part time as a waitress. Now, she wishes she had worked even more. Given a second chance, “I would never have touched a private loan—ever,” she says.
Ms. Romine hopes to solve the problem by advancing her career. At the bank where she works, a former supervisor says she is a hard working, highly capable employee. “Jodi is doing the best she can,” says Michael Matthews, a Beaufort, S.C., bankruptcy attorney who is familiar with Ms. Romine’s situation. “But she will be behind the eight-ball for years.”
Private student loans often carry uncapped, variable interest rates and aren’t required to include flexible repayment options. In contrast, government loans offer fixed interest rates and flexible options, such as income-based repayment and deferral for hardship or public service.
Steep increases in college costs are to blame for the student-loan debt burden, and most student loans are now made by the government, says Richard Hunt, president of the Consumer Bankers Association, a private lenders’ industry group.
Many private lenders encourage students to plan ahead on how to finance college, so “your eyes are open on what it’s going to cost you and how you will manage that,” says a spokeswoman for Sallie Mae, a Reston, Va., student-loan concern. Federal rules implemented in 2009 require lenders to make a series of disclosures to borrowers, so that “you are made aware multiple times before the loan is disbursed” of various lending options, the spokeswoman says.
Both private and government loans, however, lack “the most fundamental protections we take for granted with every other type of loan,” says Alan Collinge, founder of StudentLoanJustice.org, an advocacy group. When borrowers default, collection agencies can hound them for life, because unlike other kinds of debt, there is no statute of limitations on collections. And while other kinds of debt can be discharged in bankruptcy, student loans must still be paid barring “undue hardship,” a legal test that most courts have interpreted very narrowly.
…
FT dot com
Last updated: April 19, 2012 12:48 am
Wall St weighs up potential downgrades
By Tom Braithwaite, Tracy Alloway and Dan McCrum in New York
Laurence Fink
Senior Wall Street executives are picking winners and losers in case Moody’s Investors Service follows through with threatened downgrades of the largest banks, with BlackRock warning it might have to shift business to healthier counterparties and Bank of New York Mellon predicting it will attract deposits.
Morgan Stanley, which is due to report first-quarter results on Thursday, is seen as among the most vulnerable of the 17 global banks and securities firms, whose ratings Moody’s is reviewing.
…