Bits Bucket for May 17, 2012
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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It’s make or break time for the euro says Cameron in chilling warning as Bank chief says eurozone is tearing itself apart
David Cameron will attack Germany and other European countries for failing to stop the euro breaking apart
Will insist austerity measures is the only way to ‘keep Britain safe’
Experts say if the crisis isn’t contained 10 per cent of the national income could be wiped out in EU countries
By James Chapman and Becky Barrow
PUBLISHED: 03:19 EST, 16 May 2012 | UPDATED: 21:09 EST, 16 May 2012
David Cameron will today express grave doubts about the survival of the euro amid fears that a collapse could drag Britain into a decade-long depression.
He will warn of ‘perilous economic times’ and launch a startling attack on the failure of Germany and other major European countries to take the necessary steps if they want to prevent the euro breaking apart.
‘The eurozone is at a crossroads – it either has to make up, or it is looking at a potential break-up,’ the Prime Minister will say, insisting that sticking to the Government’s austerity measures is the only way to ‘keep Britain safe’.
With signs of a full-blown bank run beginning in debt-stricken Greece, experts warned that if the crisis is not quickly contained, as much as 10 per cent of national income could be wiped out in countries across the EU.
Bank of England governor Sir Mervyn King said yesterday the single-currency bloc was ‘tearing itself apart without any obvious solution’, while former Labour Chancellor Alistair Darling said the crisis could condemn Britain to ‘years of stagnation’.
…
Bollocks.
Britain has rejected all things “Euro” from the beginning and has steadfastly refused to participate in the confederation.
Look no further for someone with an ax to grind and who would love to see the Eurozone collapse.
Cameron was in favor of the Euro upto about 4 years ago.
I love that he still says Austerity is the only solution, right after he says Europe is letting the Euro fail.
He is laying the foundation to blame a collapse in England on Germany. Politician playbook rule #1, take credit for all things good and put the blame on others.
He is laying the foundation to blame a collapse in England on Germany. Politician playbook rule #1
That’s why QE is not coming soon. It is coming but not for a couple of months. Bernanke can play that game.
My hunch is the Fed might stand pat this time until everyone, including politicians, is virtually begging for QE3.
How about QE13?
First rule of panics: If you are going to panic, then be sure to panic first.
Greeks set election date amid possibility of bank panic
From Antonia Mortensen and Matthew Chance, CNN
updated 5:18 PM EDT, Wed May 16, 2012
Athens, Greece (CNN) — Greece will hold new elections on June 17, state media reported Wednesday, amid a political and economic crisis that could have effects far beyond the country’s borders.
News of the election date came as Greeks pulled hundreds of millions of euros out of the banking system amid fears that the country will not be able to stay in the European Union’s single currency.
Just 10 days ago, Greeks voters punished the major parties for harsh budget cuts, leaving no party able to form a government.
A caretaker administration led by a senior judge will run the country until the new vote.
Interim Prime Minister Panagiotis Pikrammenos was sworn in Wednesday. The president’s office said Cabinet ministers will take their oaths of office Thursday morning.
The political deadlock is leading to fears that Greece will not have a government in place when it needs to make critical debt payments, which could in turn jeopardize its place in the eurozone, the group of 17 European Union countries that use the euro currency.
And a Greek crisis could spread, one analyst warned.
“If Greece exits the euro it won’t be alone. Others will exit,” said Paul Donovan, a global economist with UBS bank.
“There would be bank runs across multiple countries,” he predicted. “Citigroup, for example, may not be exposed to Greece, but it may be exposed to Portugal, Spain, France. … It may be exposed to a company that’s exposed to France, or exposed to exports to EU.”
In a worst-case scenario, he said, “you’re talking about widespread defaults in the corporate sector as well as the sovereign sector. It becomes very problematic.”
Even so, most major European stock markets ended the day Wednesday virtually unchanged.
…
Housing market in LA may be seeing new hope
http://abclocal.go.com/kabc/story?section=news/local/los_angeles&id=8665105
CAR packaged this well. No stats on income or jobs, and no opposing viewpoints.Just up up, and away.Sell a sense of urgency and a micro story.
It looks like there is a little bit of the poof going on.
The question of the hour is how much more poof is in the works before a QE3 announcement is made?
The question of the hour is how much more poof is in the works before a QE3 announcement is made ??
About another 1000 poof points in the DOW should do it….
I had a surreal conversation with some electricians last week. My current house is a rental and has been having some problems with breakers tripping for no reason and outlets that work on and off. They were replacing some corroded outlets for me and we were chatting. One guy casually asked how much I was paying for the house. When I told him he said “damn, that’s how much I pay for my mortgage”. As if my rent in a much nicer neighborhood should be lower.
I asked him where he lived and he told me he lived in a house “given” to him. I was too nice and didn’t ask how he had a mortgage on a house he inherited. He was clearly into real estate as he was familiar with the basic rules of costs and interest rates. Yet he didn’t seem to realize that the house he was working on was worth well over a million and the rent was similar to a house that cost not even 1/3 of that. He was happy to live in a much worse neighborhood just for the privilege of being an “owner”.
I’m not sure why I’m mentioning this other than to rant. For so many people I don’t even think this bubble has burst.
“For so many people I don’t even think this bubble has burst.”
Why It’s A Terrible Time To Buy An Expensive House
By Patrick Killelea last updated 18 Sept 2011
1.Because house prices will keep falling in the areas where prices are still dangerously high compared to incomes and rents. Banks say a safe mortgage is a maximum of 3 times the buyer’s annual income with a 20% downpayment. Landlords say a safe price is set by the rental market; annual rent should be at least 9% of the purchase price, or else the price is just too high. Yet in affluent areas, both those safety rules are still being violated. Buyers are still borrowing 6 times their income with tiny downpayments, and gross rents are still only 3% of purchase price, even after recent price declines. Renting is a cash business that proves what people can really pay based on their salary, not how much they can borrow. Salaries and rents prove that affluent neighborhoods are still in a huge housing bubble. Anyone who bought a “bargain” in those areas last year is already sitting on a very painful loss.
On the other hand, in some poor neighborhoods, prices are now so low that gross rents exceed 10% of price. Housing is a bargain for buyers there. Prices there could still fall yet more if unemployment rises or interest rates go up, but those neighborhoods have no bubble anymore.
2.Because it’s usually still much cheaper to rent than to own the same size and quality house, in the same school district. In rich neighborhoods, annual rents are often 2.5% of purchase price while mortgage rates are 5%, so it costs twice as much to borrow the money as it does to borrow the house. Renters win and owners lose! Worse, total owner costs including taxes, maintenance, and insurance come to about 9% of purchase price, which is more than three times the cost of renting and wipes out any income tax benefit.
The only true sign of a bottom is a price low enough so that you could rent out the house and make a profit. Then you’ll know it’s pretty safe to buy for yourself because then rent could cover the mortgage and ownership expenses if necessary, eliminating most of your risk. The basic buying safety rule is to divide annual rent by the purchase price for the house:
annual rent / purchase price = 3% means do not buy, prices are too high
annual rent / purchase price = 6% means borderline
annual rent / purchase price = 9% means ok to buy, prices are reasonable
So for example, it’s borderline to pay $200,000 for a house that would cost you $1,000 per month to rent. That’s $12,000 per year in rent. If you buy it with a 6% mortgage, that’s $12,000 per year in interest instead, so it works out about the same. Owners can pay interest with pre-tax money, but that benefit gets wiped out by the eternal debts of repairs and property tax, equalizing things. It is foolish to pay $400,000 for that same house, because renting it would cost only half as much per year, and renters are completely safe from falling housing prices. Subtract HOA from rent before doing the calculation for condos.
Although there is no way to be sure that rents won’t fall, comparing the local employment rate (demand) to the current local supply of available homes for rent or sale (supply) should help you figure out whether a big fall in rents could happen. Checking these factors minimizizes your risk.
3.Because it’s a terrible time to buy when interest rates are low, like now. House prices rose as interest rates fell, and house prices will fall if interest rates rise without a strong increase in jobs, because a fixed monthly payment covers a smaller mortgage at a higher interest rate. Since interest rates have nowhere to go but up, prices have nowhere to go but down.
The way to win the game is to have cash on hand to buy outright at a low price when others cannot borrow very much because of high interest rates. Then you get a low price, and you get capital appreciation caused by future interest rate declines. To buy an expensive house at a time of low interest rates and high prices like now is a mistake.
It is far better to pay a low price with a high interest rate than a high price with a low interest rate, even if the mortgage payment is the same either way.
◦A low price lets you pay it all off instead of being a debt-slave for the rest of your life.
◦As interest rates fall, real estate prices generally rise.
◦Your property taxes will be lower with a low purchase price.
◦Paying a high price now may trap you “under water”, meaning you’ll have a mortgage debt larger than the value of the house. Then you will not be able to refinance because then you’ll have no equity, and will not be able to sell without a loss. Even if you get a long-term fixed rate mortgage, when rates inevitably go up the value of your property will go down. Paying a low price minimizes your damage.
◦You can refinance when you buy at a higher interest rate and rates fall, but current buyers will never be able to refinance for a lower interest rate in the future. Rates are already as low as they can go.
4.Because buyers already borrowed too much money and cannot pay it back. They spent it on houses that are now worth less than the loans. This means most banks are actually bankrupt. But since the banks have friends in Washington, they get special treatment that you do not. The Federal Reserve prints up bales of new money to buy worthless mortgages from irresponsible banks, slowing down the buyer-friendly deflation in housing prices and socializing bank losses.
Aluminum wiring?
Aluminum wiring ??
Possibly but probably not….Weak breakers or lose wiring in the panel or the outlets…
Put your hand on the wall socket your fridge plugs into. Its not a good sign if it is hot.
The electricians were originally called out because the fridge was tripping a GFI breaker. They replaced the breaker and it hasn’t been a problem since. *knock on wood*
First time ever in my long HBB History to prefer “loose” -
+1
My iPad doesn’t substitute “loose” for “lose” or “you” for “your” so I don’t give a darn when people attack me for correcting their own mistakes - not an iPad or Droid mistake.
i had similar conversations. my rent may be close some of my friends mortgage…their houses are nice.
i have a 5 minute commute…their’s is an hour.
he told me he lived in a house “given” to him. I was too nice and didn’t ask how he had a mortgage on a house he inherited. He was clearly into real estate
Loans are not Strange
Oh give me a loan, on a said given home
Since it’s free, I will then gladly pay
Where I’ll flip the bird, to discouraging words
Cause my lies are not clouding my way
Loans, Loans are not strange
When a house, today’s given away
And I’ll gladly pay, for the good right to stay
‘Cause to rent’s, throwing money away….
Flows like a river, Rio.
“I asked him where he lived and he told me he lived in a house “given” to him. I was too nice and didn’t ask how he had a mortgage on a house he inherited.”
Maybe he had to buy out his siblings.
“some corroded outlets”
bink, I don’t remember where you live, is it oceanside? I’ve had a lot of old houses, and never had corroded outlets in the living areas. If I did have one instance, I would have every single connection in the whole house inspected, not just the ones that start acting up. A bad connection can generate a lot of heat, and you can figure how that ends.
Bink, aren’t you in Hawaii? (Been hit and miss with reading so may have missed an update.)
Aloha!
Yes, I’m about a block from the beach. The corrosion is from that and the outlets are cheap.
Receptacles boys….. receptacles….. jeeeez..
CA is expecting a multi-billion dollar bump in revenues?
http://www.cnbc.com/id/47435168/
Are these people functionally retarded? Do they really think that all these folks cashing in millions, or 10s of millions in shares are going to do so with a CA address? Come on down to sunny FL for a year, save a million on taxes.. Seems like a much better plan to me.
millions in shares are going to do so with a CA address ??
Last time I looked FaceBook was in Menlo Park Ca….If they raise 10-bil in a IPO, isn’t somebody going to pay some Ca. State Tax ??
“If they raise 10-bil in a IPO, isn’t somebody going to pay some Ca. State Tax ??”
Not if they leave the state before they sell those shares.
Not if they leave the state before they sell those shares ??
Well, who sold the 10-bil dollars worth of shares to the open market ?? Last time I looked Mark lived in Palo Alto…
How much more stock market bloodletting will be necessary before the Wall Street cargo’s pleas for the Fed to invoke QE3 finally pay off?
expand More Industries
up down
Accounting
Advertising
Airlines
Banking
Broadcasting & Entertainment
Chemicals
Computer Hardware
Computer Software
Consumer Products
Defense & Aerospace
Financial Services & Insurance
Food & Tobacco
Hospitality
Industrial Goods & Services
Marketing & Strategy
Media Agencies
Metals & Mining
Paper & Forest Products
Pharmaceutical & Biotech
Real Estate
Retail
Semiconductors
Telecommunications
Transportation
Utilities
May 16, 2012, 4:13 p.m. ET
CREDIT MARKETS: Fed Raises Stimulus Hopes, Treasurys Soar
By DOW JONES NEWSWIRES
NEW YORK (Dow Jones)–Investors flocked to ultra-safe Treasurys on Wednesday, as new corporate-bond issuance slowed, after Federal Reserve officials acknowledged the need to leave the door open for more monetary easing in light of recent weakening.
U.S. Treasury prices swung into positive territory after details from the Federal Reserve’s April policy meeting showed several members saw a potential need for more stimulus if the economic recovery slows. The central bank has long said that it remains willing and ready to lend more support to the U.S. economy if needed.
Since the late-April meeting, a string of disappointing labor–and housing-market–reports have kept investors’ ears glued to how the Fed might react. The euro-zone debt crisis has also flared up again, raising questions about contagion from the region.
Treasury investors fed on the comments that another bond-buying program still waits in the wings. Since the release, the Treasury market swung into gains, with benchmark 10-year notes up 6/32 in price to yield 1.755%, the lowest since October. The 30-year bond rose 22/32 to yield 2.897%. Bond prices move inversely to their yields.
…
Quite an impre$$ive bungi cord the Federal Re$eve Inc. has ain’t it?
Investors “flocking” to treasuries…
So either most investors have losses and figure they will have sharper losses by “flocking” to treasuries or they have gains and will be lining the pockets of the government with short term capital gain taxes. Both situations are losing situations. Those who need to be in for twelve months to lock in the 20% max gain are not moving. Nor are those who are into stock of undervalued companies with great management and earnings potential.
First line I meant “by NOT flocking to treasuries.”
The Bernanke put is on the table now. Is it too late for dips to buy?
Asian Stocks Rise on Japan Growth, Fed Stimulus Optimism (Update 5)
By Kana Nishizawa - May 17, 2012 4:03 AM PT
Asian stocks rose, with the regional gauge poised to end a six-day losing streak, as faster-than- estimated economic growth in Japan and optimism the Federal Reserve will do more to stimulate the U.S. economy outweighed concern Greece’s debt crisis is worsening.
Li & Fung Ltd. (494), a supplier for Wal-Mart Stores Inc., rose 1.8 percent. Korea Gas Corp. (036460) jumped 6.4 percent in Seoul after a gas discovery in Mozambique. Toshiba Corp., the maker of Regza brand televisions, gained 5.6 percent in Tokyo after saying it will stop television production in Japan. Toll Holdings Ltd. (TOL), an Australian trucking company, slid 6.8 percent, extending yesterday’s losses after forecasting lower full-year profit.
“We may see a huge buy-back if we see some end to Europe’s political turmoil and people realize that stocks in Asia are cheap given their strong economies,” said Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo, which oversees about $68 billion. “The Fed is giving a signal to the market that there’s no need for panic, by assuring it will do something before things get really bad.”
…
Let’s get real.
Contrary to the assertion of the article posted below, with less than six months until the November 2011 election, a Fed move to stimulate would favor Obama’s election; a move to stand pat would favor Romney’s.
The downside of too much discretion and not enough rules is that every monetary policy action takes on political significance.
AHEAD OF THE TAPE
Updated May 16, 2012, 4:29 p.m. ET
Price Is Right for Stimulating Action by Fed
By SPENCER JAKAB
Bob Barker, eat your heart out.
After Tuesday’s inflation report, the price is suddenly right again for the Federal Reserve to start considering more stimulus. Headline inflation was unchanged, bringing the year-on-year pace to 2.3%, down from 2.7% a month earlier and 3.9% last September. The Fed’s favored inflation measure, the personal-consumption-expenditure deflator, was at 2.4% in March. That is above a 2% target, and it is falling at a slower pace, though both inflation gauges are moving in the right direction.
Sudeep Reddy and Spencer Jakab hunt for clues in the minutes from the last FOMC meeting to decide whether the Fed will take more action to boost the economy.
With that in mind, Wednesday’s release of minutes from the most recent Fed meeting may provide important clues as to how factions within the central bank are positioning in the continuing debate over doing more or less to support economic growth.
A cynic might say the price is almost always right for the Fed’s “doves,” those inclined to emphasize growth over stable prices. When headline inflation was rising, it was said to be “transitory.” But so, too, is the recent decline since falling gasoline prices are playing a big role. Pump prices have continued to drop this month, leading more than one forecaster to call for the 2% inflation target to be hit as soon as next month’s report—just days before the Fed’s next rate-setting meeting.
If the Fed wants to take any further extraordinary easing actions this year, it may have only a narrow window of opportunity, barring a disorderly European default. The August meeting, by which time Capital Economics thinks year-on-year inflation could possibly be as low as 1.5%, may be too close to the presidential election for appearances’ sake. Then again, action on “QE3,” the much anticipated next round of bond buying, needn’t come at a formal meeting or even begin before the election.
…
Do you think massive FedStim would have any traction between now and November?
The 99 wk unemployment gig is drawing to a close. That will reduce the offical unemployment numbers. What’s not to love?
The real financial wars are being fought overseas. Deterioration of the Euro will make the USD look like a rock star, crush the Asian machine and lower gas prices in the US. What’s not to love about that?
Wouldn’t a strong US dollar help the Asian machine- and Germany?
Interesting point. I think a weak currency helps the GDP skimmers and hurts the person living on a budget.
“The 99 wk unemployment gig is drawing to a close. That will reduce the offical unemployment numbers.”
This is not true. Unemployment numbers come from the employer survey (calling businesses - often very inaccurate because they miss new businesses starting and businesses suddenly stopping operations) and from the household survey (calling home numbers and asking an adult who answers if they are working and if they are not if they are actively looking for work). They do report the number of initial claims for unemployment insurance, but obviously that has nothing to do with the number of weeks you are eligible.
It’s actually reversed. Lower unemployment means more states ineligible to receive Federal funds.
Texans are no longer eligible due to lower unemployment.
Deterioration of the Euro will make the USD look like a rock star,
A few months ago the US Dollar was worth 1.7 Brazilian Reals. Today the US Dollar is worth 2 Brazilian Reals.
The demise of the US Dollar has been greatly exaggerated.
We never should have allowed this to happen this way. It hurts everybody. Skills get rusty employers don’t want the long term unemployed, people get depressed and angry, so much pain could have been avoided.
You should get 26 weeks to be lazy..on the 27th you are in a job training program or an “internship” that is related to your resume, or no more checks.
It could end a lot of age discrimination, knowing that you have to take the 50 year old “intern” on UI, instead of the 21 yo college student living at home.
The 99 wk unemployment gig is drawing to a close
Unemployment is not 26 weeks to be lazy. If you aren’t actively looking for a job, you are not eligible to receive the payments. You are not eligible for payments if you are in a training program (unless there is a specific exception for your particular program). You have to be available for full time work to get the payments.
Agreed, people think that being on unemployment is some kind of vacation, when in reality you are only receiving a small fraction of your former income and know that the longer it takes you to find a new job, the likelihood of finding one decreases.
This attitude is understandable, because in the old days being “laid off” meant you were furloughed and would probably be called back to the job in just a few weeks, so you didn’t have to hustle to find a new job ASAP.
I recall my layoff in 2001. I was telling an elderly gentleman about it and his first question was “so how long until they call you back?” When I told him “never” he became wide eyed.
I actually know of one person who was called back after being laid off. He was unemployed for about 18 months, until he was recalled to his 200K per year job flying a jet for a package delivery firm. Why did he get called back when there were openings, instead of having to reapply for his old job like most mortals have to? … drumroll … because he’s union.
Polly…guess you’ve never been unemployed..probably 95% use it as a way to get personal things done…like digitize your cd collection, that’s time consuming… You can always find 4-5 jobs a week to apply for and who cares the Unemployment office is a joke since they will not help to get you a job like in the old days.
It used to be the Unemployment office did not accept jobs in their system that didn’t have a person you could call and set up an interview…no po boxes blind faxes or emails.
Just keep accurate records…so if they call you…you have proof..
Unemployment is not 26 weeks to be lazy.
I was telling an elderly gentleman about it and his first question was “so how long until they call you back?” When I told him “never” he became wide eyed.
More elderly need to get “wide-eyed” about today’s work-place reality for the younger generations.
People doing internships are also not eligible to receive UI payments. You are not eligible for the payments if you are doing an activity that normally would be considered work, even if you are not being paid for it.
Forcing employers to take on 50 year old interns rather than the people they want to take on as interns would require a law to be passed, and you might see it happen on the 3rd or 4th day of the 200th blizzard in hell.
Exactly Polly….and it would benefit all of us….but does Ohboozo and BatMitty care…
Its all about keeping a recent job at the top of your resume no matter WHO pays you…intern and collect UI…. I freelance a day or 2 days a week at a Bangladeshi catering hall running a sound board cash only…..
——-would require a law to be passed
“and it would benefit all of us”
No, it wouldn’t. Internships should at least maintain the appearance of being a learning experience. If you turned them into just resume padding for the middle aged and experienced, no one would ever get offered an entry level job again.
And dj, you should try thinking through your policy proposals every once in a while. Not just pretend that whatever you think would be good for you would be good for the rest of the country.
And I most certainly have been out of work before. Why the heck do you think know the rules so well? And I followed them too. Looked for work every week. Limited myself to one and two credits a semester so it didn’t interfere with my job search.
“Do you think massive FedStim would have any traction between now and November?”
Maybe not in the real economy, but definitely in the asset markets. The second traders get a whiff of QE3, Treasurys and gold experience meltups.
a Fed move to stimulate would favor Obama’s election; a move to stand pat would favor Romney’s.
Does that argue for a more, or less, independent Fed?
More rules, less discretion. I am missing the connection to Fed independence.
I am missing the connection to Fed independence.
My understanding is that many want (elected) Congress to have more authority over the (unelected) Fed. If Congress is held by the party out of power, that encourages them to use the Fed to further weaken the economy in hopes of getting the Pres dumped and themselves back in power.
Just like now, the Repubs are against any and all easing with Obama in office, but if Mitt were elected they’d switch positions in a NY minute. Just like they do with deficit spending, which they only oppose when out of power.
Your post missed the point, which was, what does the question of Fed independence have to do with rules versus discretion? For instance, would adopting a monetary policy rule somehow compromise the Fed’s independence?
My impression is that there is little or no connection, but I am interested in contrary evidence.
rules versus discretion?
What are the rules? Who makes them? Are they subject to change?
Why China’s economy may be heading for a hard landing
Business confidence has sunk for the third quarter in a row as a growing number of indicators suggest China’s economy is slowing.
By Peter Ford, Staff writer / May 17, 2012
This April 27 photo show a worker at a steelmaker in Zhangjiagang in east China’s Jiangsu province. China’s economic growth has abruptly decelerated from overheated to slower than Beijing wanted in just half a year as export demand and consumer spending at home weaken, raising the threat of job losses and possible unrest.
An alarming batch of economic indicators from China in the past 10 days has cast a pall over the country’s economic growth prospects, rekindling debate about whether one of the few bright spots in the world economy may be heading for a hard landing.
And the government’s initial efforts to pull out of the dive suggest that it may be putting off – once again – long promised policies to rebalance the Chinese economy by relying more on consumption than on its traditional growth drivers, exports, and investment.
Industrial production grew by only 9.3 percent in April, year on year, its slowest rate since the financial crisis. “That is a real and serious problem,” says Xiang Songzuo, chief economist for the giant China Agricultural Bank.
Equally worrying, he says, is that bank lending is stagnant, and not just because of the government’s year-long policy to dampen inflation by curbing loans. “The real demand for bank lending has been slowing down quite obviously,” Mr. Xiang says.
That nervousness was reflected in a survey published recently by the Central Bank showing business confidence in the economy sinking for the third quarter in a row to 39.2 percent, well below the 50 percent mark dividing optimism from pessimism.
That, warns Xiang, means that there will be “no very obvious or significant impact” from the government move last week to cut banks’ reserve requirement ratio. That reduced the amount of money banks must hold in reserve against bad loans, thus freeing up more money for them to lend.
What happened?
…
What happened?
All the money went to the few. Just like here. No middle class, no successful economy. It’s only complicated if you want it to be, the evidence is there for anyone with eyes to see.
All the money went to the few.
Even the communists can’t do it right. Make me wonder…..
Corporate communist capitalism doesn’t work anywhere.
Make me wonder…..
Makes me wonder why we won’t go back to the system that gave us a huge, successful middle class, too. But alas, the 1% find the demands of a middle class (for property rights, the consistent rule of law, fair and open markets) to be an annoyance, so they have successfully destroyed it, with the help of the saps who vote against their own interests.
Testify, brothah! (or sistah, as the case may be)
The squad reiterates its correct prediction that within a few decades, less than 15% of this country will live at or above what could be considered a “middle class” lifestyle. The vast majority of this country will be working poor.
And to Mr. Jones’ question below, this is what it means that the future belongs to Lucky Ducky
less than 15% of this country will live at or above what could be considered a “middle class” lifestyle.
Advice to young people: Study the hardest subjects with the most math or even better, learn a highly skilled trade that can’t be off-shored and read a lot of books in your spare time.
(And do a lot of sit-ups)
Amen Rio! We’re seeing a shortfall of engineers to replace those retiring in my industry.
“……..learn a high skilled trade…….”
Then go sign a contract with the Federal Government. Preferably in a war zone overseas.
shortfall of engineers
Nothing easier to offshore than engineering jobs. I think we’re back to auto repair, plumber, HVAC, etc.
Yeah but try to execute that 300+sheet design performed by Achmed and his group in India here in the US. What a disaster that would be.
Even the communists can’t do it right. Make me wonder…..
Human nature trumps all political and economic philosophies
Human nature trumps all political and economic philosophies
Well said!
Right. They can’t sell to Americans with no income paying with debt anymore.
Not only is capital flight underway in Greece and other Eurozone countries, apparently it has already been aloft for two years.
Small wonder the dollar is so strong these days!
Analysis: Greeks not alone in bank savings exodus
By Steve Slater and George Georgiopoulos
LONDON/ATHENS | Thu May 17, 2012 8:15am EDT
(Reuters) - Greek savers may be gripped by a “great fear that could develop into panic” in the words of President Karolos Papoulias, but many Greeks shifted their money to safer havens in Britain, Switzerland, Germany and Nordic countries long ago.
Worries about a run on Greek banks has rattled Athens this week, after savers withdrew at least 700 million euros on Monday alone, according to minutes of Papoulias’s comments to political leaders posted on the presidency’s website.
It is not only Greeks who are worried about their savings. Data shows depositors have also taken flight from banks in Belgium, France and Italy. And on Thursday, Spain’s Bankia (BKIA.MC) was reported to have seen more than 1 billion euros drained by its customers in the past week.
Greeks are afraid they could be hit by rapid devaluation if the country leaves the European single currency, while customers at Bankia have been rattled by the government’s takeover of the recently floated bank on May 9 and growing uncertainty about the final cost of Spain’s banking reforms.
In Greece, sources at two banks told Reuters that withdrawals on Tuesday had taken place at about the same rate as on Monday.
“The entire Greek banking system is in danger: the banks are now facing the worst of all outcomes, deposit flight,” said Arnaud Poutier, deputy CEO of IG Markets France.
That flight started at least two years ago, as the debt crisis grew more serious.
…
“…the bank$ are now facing the worst of all outcome$, depo$it flight”
GO Iceland!
Is the future really so grim that even fairly overt quantitative easing hints aren’t enough to drive up futures?
Ruh-roh!
Euro descends below $1.27
U.S. futures turning lower
EUROPE IN CRISIS
Worries over Greece’s future in the euro zone has led to fears of a broad bank run. Above, an ATM in Athens.
Stock-index futures tell the tale: Europe’s woes overshadow blue chip Wal-Mart’s strong quarter.
…
Gold traders smell QE3 on the way. So do oil traders.
My prediction: Higher gas prices ahead.
From the NYTimes - G.O.P. ‘Super PAC’ Weighs Hard-Line Attack on Obama:
“The plan, which is awaiting approval, calls for running commercials linking Mr. Obama to incendiary comments by his former spiritual adviser, the Rev. Jeremiah A. Wright Jr., whose race-related sermons made him a highly charged figure in the 2008 campaign.
“The world is about to see Jeremiah Wright and understand his influence on Barack Obama for the first time in a big, attention-arresting way,” says the proposal, which was overseen by Fred Davis and commissioned by Joe Ricketts, the founder of the brokerage firm TD Ameritrade. Mr. Ricketts is increasingly putting his fortune to work in conservative politics.
The $10 million plan, one of several being studied by Mr. Ricketts, includes preparations for how to respond to the charges of race-baiting it envisions if it highlights Mr. Obama’s former ties to Mr. Wright, who espouses what is known as “black liberation theology.”
The group suggested hiring as a spokesman an “extremely literate conservative African-American” who can argue that Mr. Obama misled the nation by presenting himself as what the proposal calls a “metrosexual, black Abe Lincoln.”
A copy of a detailed advertising plan was obtained by The New York Times through a person not connected to the proposal who was alarmed by its tone. It is titled “The Defeat of Barack Hussein Obama: The Ricketts Plan to End His Spending for Good.”
Mr. Ricketts is increasingly putting his fortune to work in conservative politics.
Ricketetts owns Cubs. May not play well with the home team crowds though. Obama, I think is still very popular in Chicago and IL.
Church of Jeremiah Wright Vs. Church of Joseph Smith.
Looking forward to the summer blockbuster.
I dunno about you folks, but I’m so incredibly sick of the subject of race, I could puke gallons.
I’ll say one thing, though. NO group or individual that has profited from being a victim EVER gives up its victim status, EVER. Unless the teats run dry.
Sorry about the nausea but you should either get used to it or turn off the TeeVee. The bedwetter libtard media elite, whose only interaction with “diversity” is with the nanny, maid, and gardener, love pushing the diversity/multiculturalism “our differences make us stronger” meme. Slap a Coexist bumper sticker on that Subaru or Volvo and it’s all good. The other side, the Angry White Men party, has nothing to sell but FEAR, this despite the fact that demographics are not on their side. See also articles today noting that non-white births are now the majority in this country. As a non-breeder, I welcome the Idiocracy sh*tshow that this country is turning into. The only thing that is certain however, is that the future belongs to Lucky Ducky
What’s a lucky ducky?
“As a non-breeder, I welcome the Idiocracy sh*tshow that this country is turning into.”
Do ya? WTF does that have to do with being a “non-breeder”? It’s not necessary to insult those on this blog who are decent parents. I don’t have any progeny myself, couldn’t afford it. But I have nothing but enormous respect for folks like xgs-fixr who cared enough to inconvenience themselves by raising, rearing, loving and worrying about the future generation.
Lucky Ducky is a recurring character in Ruben Bolling’s Super Fun Pak Comix.
And accepting the inevitability of America’s Idocracy future is not an insult to those who choose to reproduce. The recent example describing the in-laws as People of Walmart meets L.A. Ink shows that even the best intentioned parenting may not result in what parents perceive as their children’s best interests…
three or more and you are a breeder.
two or less…you are just maintining the status quo (just replacing you and your partner).
got yelled at by a wacko at a party once for putting my beer bottle in the garbage bin instead of the recycle bin.
she had five kids and each one of driving age had their on car.
“even the best intentioned parenting may not result in what parents perceive as their children’s best interests…”
Maybe so, but there are many factors today that attempt to make things difficult for the family unit.
Parents are assailed on all sides by societal factors that work against them.
If I could, I’d change that tired old carnard “Live each day as if it were your last” to “Live each day as if you were coming back.” If people thought they were going to be physically reborn as a human bean, (not a dog or a daisy or whatever) things would probably be different on the planet.
In any case, the palmster would like to announce a “Make Things Easier for a Parent Day”. Every day. I’m not talking anything major here. But if you see an overburdened parent out there, maybe you could help by carrying some packages to a car, or talking quietly to a kid that’s acting up.
“three or more and you are a breeder.”
I am grateful for my three siblings, even though we have had our differences over the years, some of them rather emotionally violent, in fact.
I am grateful for my parents, who provided us with a nice life. As I’ve said before, I’d get down on my knees for just one day with them, as they were when I wuz a pup. Many things I’d say that I was too selfish or oblivous to say back in the day. And remember, fixr and others like you, as difficult as it is now, your kids will come to realize just how valuable you were to them.
“Live each day as if you were coming back.”
Eternal return (also known as “eternal recurrence”) is a concept which posits that the universe has been recurring, and will continue to recur, in a self-similar form an infinite number of times across infinite time or space. The concept is found in Indian philosophy and in ancient Egypt and was subsequently taken up by the Pythagoreans and Stoics. With the decline of antiquity and the spread of Christianity, the concept fell into disuse in the western world, though Friedrich Nietzsche resurrected it as a thought experiment to argue for amor fati.
The basic premise proceeds from the assumption that the probability of a world coming into existence exactly like our own is finite. If either time or space are infinite, then mathematics tells us that our existence will recur an infinite number of times.
wikipedia
three or more and you are a breeder.
Back in the day, before the “gaybee boom”, us queers called all straight folks “breeders”.
Now gays and lesbians are having kids so the term “breeder” doesn’t make sense anymore.
Well, my uncle and his husband adopted out of the foster care system, so I don’t know if they can really be called breeders. It does imply adding to the population of the world, as opposed to caring for, loving and raising the ones that are already here.
“It does imply adding to the population of the world, as opposed to caring for, loving and raising the ones that are already here.”
Humanoids that opt not to reproduce (especially female humanoids) are often called selfish. The opposite is true, it is selfish for any of the seven billion existing eaters to think that their genes are deserving of replication. Never mind biological urges, as a species we (apparently, except for the ancestors of our future Idiocracy) should have evolved beyond that by now.
And the term “breeders” no longer belongs to the gays. Straight and gay non-replicators own it now…
Was looking at the family geneology (and how the Walmart/LA Ink crowd is going to look on it) the other day.
One of my predecessors back in the late 1800s had SIXTEEN kids. All of them lived to a ripe old age.
Nothing wrong with kids that you can adequately support. My problem is that I didn’t forecast my future income correctly, and ended up with one too many.
now all I have to do is figure out which one get to take “The bullet for the team….”
(goon squad must like my description of WalMart/LA Ink crowd. He’s used it 2-3 times since Monday.
)
Actually, an even more accurate description would have thrown in a reference to “Harleys Owners on a 7 year Loan Plan” as well.
I like a good cigar, but I take it out of my mouth occasionally.
“Humanoids that opt not to reproduce (especially female humanoids) are often called selfish. The opposite is true, it is selfish for any of the seven billion existing eaters to think that their genes are deserving of replication.”
Those called selfish are usually being pressured by family concerns, far more than societal pressure. I always thought it was funny to call someone selfish for not doing what YOU want them to do.
As a non-breeding female humanoid I am neither selfish, nor unselfish. I was just too realistic to do it alone and never met the right guy to breed with.
People can have kids for the right or wrong reasons. People cannot have kids because they will interfere with a desirable life or because they will not be able to provide a desirable life. No harm to me not having kids, but as an aunt and an honorary aunt of a few rug rats I am very happy those friends and family decided to have kids.
As a non-breeder I will tell you some genes do need to be reproduced. Many more do not.
However, each of us would have our own definitions of who should and should not so I doubt any committees will be formed anytime soon.
Were you talking about Wall Street and corporate America?
They’re victims too, victims of “class warfare” from the loony left!
Palmy…This video should make All Americans mad as helllllllll
http://www2.tbo.com/news/breaking-news/2012/may/05/10/tampa-police-use-stun-gun-on-woman-who-is-8-months-ar-400233/
“The new sheriff is a **CLANG**!!”
- Blazing Saddles
a what?
“He’s a **CLANG**!!!”
a **CLANG**
a what?
He said the sheriff is near.
“No, no, dadgummit!! The sheriff…”
Been off the blog for a few weeks (gift horse, eh?), but that 3×2, 1400 sq ft house with no living room down the street for 385K (that I would buy for 50K since it would need 120K of work) has a pending sale. The other house that I hadn’t yet mentioned is a 2×1, broken down dump “offered” for 335K. It’s abandoned, a few houses down, and “offered” by the realtwhore owner who was collecting rent on his tenants until there were evicted. So we had a cocktail and went and picked the ripe loquats off the tree and made a pie.
And locally, from the Denver Post: Coffman says Obama “not an American”
“U.S. Rep. Mike Coffman has apologized for remarks made earlier this month at an Elbert County fundraiser, where the Aurora Republican was recorded questioning whether President Barack Obama is an American.
“I don’t know whether Barack Obama was born in the United States of America. I don’t know that,” said Coffman at the May 12 fundraiser. “But I do know this, that in his heart, he’s not an American. He’s just not an American.”
Coffman is running for re-election in the 6th Congressional District, where he’s being challenged by Democrat Joe Miklosi. The district was redrawn in December, making it more competitive as the electorate is, for the most part, divided evenly among Democrats, Republicans and unaffiliated voters.”
How does he know what’s in the president’s heart?
The same way GWB looked into Putin’s eyes and saw his soul
“But I do know this, that in his heart, he’s not an American. He’s just not an American.”
Please explain to me how today’s Repubs are not totally bat s$!t crazy.
I mean half the articles about them today should come with “Twilight Zone” theme song audio.
Except that we have 4 years of history to judge
Except that we have 4 years of history to judge ??
3 years 4 1/2 months to be exact…But, what the hell, close enough..
So, what do you conclude is “in the President’s heart” ??
I don’t know what’s in his heart but I do know what’s in his left hand. It holds a pen that he uses to sign patriotic sounding bills that strip mine the US Constitution.
Not that the other side (Sans RP) is much better.
Yeah, we have drones over the states now and quite a data center being built for the NSA in Utah.
Hwy - did you get my e-mail?
let me know - sd.re.b AT hotmail DOT com
What would you do?:
We are considering putting an offer in on a SFH short sale (bigger than our current SFH rental, right neighborhood, PITI $300 less than rent).
We were the first to see it yesterday - place did not show well (all the seller’s stuff and his mother were crammed in) AND the tenant in the illegal inlaw downstairs had no whatsoever that the house was even up for sale or that the owner was facing foreclosure.
Neither my agent nor the selling agent were there, so me, being the Chatty Cathy that I am, was able to extract all kinds of info. from both tenant and seller.
Owner has not payed mortgage for 5 months, but has continued to charge tenant $1,000 month - too steep for what she has but SF rents are crazy. (If we kept a tenant, which we don’t care to cuz we want the space for oyur family, our PITA would be $1400 less than our current rent).
I want to let the tenant know. She was super nice and I felt really badly to actually be the one letting her know that the place is going to get sold. Literally, the owner knocked on her door and I had to explain to her why we were there!
Would be no problem for me to drop off a letter at the house with her name on it.
Yes, after 30 years of being a renter, it’s hard for me not to side with her, even as I am hoping to make the transition to homeowner.
It’s not our dream house, but we can make it nice and the numbers pencil out. We’re not bidding more than the asking and won’t cry if we don’t get it.
What would you do?
” We’re not bidding more than the asking and won’t cry if we don’t get it.”
Even if you bid more than asking the appraisal should set the floor for the lender. If you can be first in escrow you tie up things until you vacate but with rising prices a longer escrow in the current feeding frenzy would probably allow for appraisal numbers to come in higher.
It worked the other way for me. I put up $5K (escrow) and offered a 30 day close and offered full asking with an option to renegotiate after the appraisal. The escrow took 60 days and the appraisal came in $35K lower, set new price. For me this was a way to cut out a bidding war which I later learned involved three other parties.
Even if you bid more than asking the appraisal should set the floor for the lender. If you can be first in escrow you tie up things until you vacate but with rising prices a longer escrow in the current feeding frenzy would probably allow for appraisal numbers to come in higher.
Last fall it would have appraised just fine at the asking price, but not much more.
Now, 6 months later, sheesh. The market here turned on a dime. If someone else wants to bid way up, let ‘em.
The tennant is not your problem yet. If you end up buying the house, give her a generous amount of notice rather than booting her out in 30 days (assuming she is on a month to month).
And check SF’s landlord laws for anything you need and figure out how the apartment being illegal figures into that. Try to avoid doing anything that might mean the fire department comes and kicks her out.
In SF you have to buy out any tenants if you want to owner-occupy evict. Costs 5K per person, max 15K for a unit/house.
Can only owner-occupy evict one unit per building (the idea being that the owner can’t personally live in more than one place).
The illegality of the unit makes no difference. If you buy a SFR with an unwarranted unit housing an elderly or disabled tenant, you are sh!t outta luck, they cannot be evicted and they remain rent-controlled.
Really? The fact that the unit is illegal doesn’t mean that it is considered part of the main house and therefore part of the single unit? I’d check that out specifically.
Yup. SF protects its renters, that’s fer sure:
Renting an Illegal Unit
A rental unit that is not a legal unit with the City is nevertheless subject to the Rent Ordinance unless exempt for another reason. To determine if a unit is legal, you will need to review the relevant public records at the Department of Building Inspection.
Tenants in illegal units who contact the Department of Building Inspection to report code violations should be aware that the inspector might cite the owner for having an illegal unit. In such cases, this means that the unit may have to be demolished or removed from residential use because it cannot be brought up to code requirements. Demolition or permanent removal of the unit from housing use is a “just cause” for eviction under the Rent Ordinance. However, the landlord must first obtain all necessary permits to remove the unit before an eviction notice can be given. The eviction notice must comply with the requirements of the Rent Ordinance as well as state law.
short sale be patient very patient
Since housing is in its second coming I guess now might be a time to start buying stock in companies that the new house mortgage owners will want to furnish or transform their house with. Ha. Big difference since the house ATM. People buying and even over bidding will have a harder time finding the money for granite counter tops, etc.
I went in several furniture stores last weekend with my wife to find a small end table. Quality, crap; pricing, high. Cheap crap and cost between $400 and $800. I commented to my wife that none of the stores were carrying any of the old top brands. Later found a small mom and pop place that had a great piece for a great price.
One observation while furniture shopping relates to the whale observation several weeks back. Have you seen the seat size of the dinning chairs lately. Huge, just huge. Picturing the size of the butts filling those chairs on a weekend meal is revolting.
On the plus size, the price of antique furniture should be coming down as fewer people will find the old stuff up to the job.
“One observation while furniture shopping relates to the whale observation several weeks back. Have you seen the seat size of the dinning chairs lately. Huge, just huge. Picturing the size of the butts filling those chairs on a weekend meal is revolting.”
CA, at least real quality furniture (antique or close to it) looks good no matter where you put it. The same goes for quality art works. People always bulk at putting a quality frame on good art but a quality frame on so-so art can make it look great.
Since housing is in its second coming
Who here predicted this? Anyone?
I been reading HBB for 7 years now (often don’t post much cuz I read at night when you are all done for the day) and have not heard anything more than criticism for the bottom-callers.
Has the bottom really come and gone and HBB didn’t call it?
Several people predicted one or more dead cat bounces in the process. Various issues (robo signing, government programs that made people think they would get real help, pushing interest rates lower than most of us really thought could happen for this long) have made that prediction more of a sure bet than it was even when it initially predicted.
So you think that the multiple bids and over asking prices that we are seeing in some places are temporary? Hope u r right.
I think we are headed back into a recession (at least an intensification of the one that is hitting most of the 99% and missing the upper end of the 1% entirely). Unfortunately for you, you are located in a microclimate where there are a lot of people with money who want to stay put. And as near as I can tell, you and your partner don’t have a huge downpayment saved which could be used to leverage into a place for less monthly nut once interest rates go up (though a lot of people in SF may have that).
Of course, when interest rates will go up is another discussion entirely.
“headed back into a recession (at least an intensification of the one that is hitting most of the 99% and missing the upper end of the 1% entirely)”
Yup. If you’re a 1%er PIG then life is just gravy. The 2-5%er fluffer house slaves of the 1%ers are making out alright too. Everybody else who actually works for a living has stagnant or declining wages and 25%+ inflation over the past several years to contend with.
OTOH, the Lucky Duckies are all living high on the hog driving their blinged out Escalades to buy steak and lobster with their EBT cards, every single one of them! It’s true, the Drudge Report had a link to an article confirming it
And as near as I can tell, you and your partner don’t have a huge downpayment saved which could be used to leverage into a place for less monthly nut once interest rates go up (though a lot of people in SF may have that).
120K down on a house less than 500K is easily $500-800 less per month than rent. We’re not looking in any fancy scmancy neighborhoods, mind you.
Now if these all cash buyers would just go away.
Contrary to what many people who don’t actually live here believe, there are entire neighborhoods (actually most of the city’s nabes outside of Pacific Heights, Noe Valley, etc) that are filled with regular, working class folks.
Kind of like when you go to a city and only go to the touristy spots and think that’s what the whole city is like.
There may be a lot of rich folks here, but the median income for SF proper is still about 69K
the median income for SF proper is still about 69K
That makes sense.
But those people aren’t buying houses. They bought a while ago. What is the median income of people who are trying to buy now?
My co-workers with the really nice places out in Potomac and similar communities bought back when interest rates were over 12%. They might be able to buy what their houses are worth now, but it would be a stretch.
But those people aren’t buying houses. They bought a while ago.
True that
$120K is a lot of money to have saved up. Well, then if interest rates went up a lot and the people with a lot more cash than you went away, you would have it in your power to get a good deal. But I’m not sure that is going to happen, at least not anytime soon. I do know that if you buy when lending is still easy and a lot of cash is sloshing around, that you lose a lot of the benefit of having the cash.
Since housing is in its second coming
Who here predicted this? Anyone?”
I’m begining to think its going to go down again.. Maybe its the stock market. Or the really bad shape Government budgets are in ? The fear of inflation and super low interest rates have many people buying homes before its too late. yesterdays news.
maybe I better keep renting
Consider this Cactus:
Fed sets interest rates for the entire country, not state-by-state. If Florida and other judicial states have a double-dip for housing values, because those states’ improvements have been propped up by a slow foreclosure clearing process (which is now speeding up), then the Fed is apt to keep rates lower for longer.
What does that mean for non-judicial states, which improvements are generally based on a real clearing of foreclosure inventory? Low interest rates could be end up being rocket fuel for non-judicial states while judicial states are catching up on their inventory clearance.
What does that mean for non-judicial states, which improvements are generally based on a real clearing of foreclosure inventory?
I’m in one of those states. I’d attribute a lot of our current “improvement” to:
1. The shortage of “for sale” inventory.
2. See #1.
There’s a huge amount of shadow inventory here. Not to mention houses being rented by accidental landlords who tried to sell a few years ago.
And let’s not forget those failed sales. We still see those too. There appears to be one down the street and ’round the corner. We neighbors thought the sellers were asking too much, and I guess Mr. Market did too.
How do you measure “shadow inventory”?
I measure it by REO and non-current loans. In that regard, the shadow inventory has been reduced considerably in Arizona over the prior 2 years.
Accidental landlords and people purposefully holding their home off the market, are simply unwilling sellers at today’s prices…perhaps distress will force them to sell, otherwise they will simply do what they have been doing (holding on) until prices rise to a level where they want to sell.
What I think is happening is this:
1. After values fell by a certain amount (a “tipping point”, if you will), further reductions in price:
a. Increased the number of sellers (more short sales, more walk-aways); and
b. Decreased the number of buyers (who wants to buy into a falling market?).
This is counter to econ 101, where usually falling prices increases the number of buyers, and decreases the number of sellers to get to a stable price point. This is all because housing is generally a leveraged asset with little consequences to walking away.
2. There are a finite number of the distressed sellers from 1a, once those finite number of sellers begins to dwindle:
a. Supply decreases;
b. Prices stabilize;
c. Demand increases (everyone wants to buy–and eventually lend to buyers–if home prices are rising and expected to rise further);
Normal econ 101 kicks back in.
However, on the way down in prices, at a certain point, there became very few willing market sellers, like the people who pull their houses off the market, or accidental landlords. Most recent sellers are distressed sellers of one kind or another. More willing sellers won’t re-enter the market until prices rise above the lowest levels, keeping supply low for a time.
This pattern is all predicated on the assumption that there is not a massive amount of shadow inventory that will swamp the current levels of demand.
Based on the fact that non-current loans have been steadily falling for the past 2 years in Arizona (ie. clearing shadow inventory), and that REO has been steadily falling as well (ie. clearing shadow inventory), the only way the shadow inventory will swamp the current levels of demand is if the clearing of shadow inventory accelerates considerably, which is certainly possible, but would be short-lived. Why do I say short-lived in AZ?
1. Per foreclosure radar, REO in AZ was at 27k a year ago, now at 15k. An acceleration in clearing of the REO will eliminate it within a year; and
2. Per LPS, the non-current loan rate in AZ has been falling at 0.5% per month recently, now at 9.1%. An acceleration in clearing the non-current loans will get non-current loan rates to normal levels (about 5%) also within a year.
Where is the other shadow inventory if it isn’t as REO or delinquencies/homes in the foreclosure pipeline? What am I missing?
How about this CA can’t raise cheap money anymore so is forced to lay off and reduce pay for it’s state workers, the last of the middle class.
Middle class home prices go up or down ?
54% homeownership rate in California means that the 73rd percentile income buys the median priced for-sale home.
The NIMBYism and Prop 13 in California has long relegated the “middle class” here largely to rentership. With more government cuts, with a 5% vacancy rate for rentals, watch doubling-up in apartments drive rents ever higher, while at the same time, cutting the rental costs per individual looking for shelter.
Overcrowding of housing units is among the worst in California (number of people per housing unit is second highest in the country…behind Utah), and will continue to get worse if government cuts drive those employees to double-up on the cost of housing.
If doubling up due to government cuts increases faster than other people in the state striking out on their own, it will show up in rising vacancy rates in the state…that has yet to take place.
This is all about supply (of housing units) and demand (for shelter). With slack in the system (high vacancy rates), there is room for lots of shuffling in times to economic turmoil that keeps a lid on prices (either rent or home prices). With less slack in the system, you get overcrowding as the way to counter lack of affordable housing. In other words, it is difficult to argue there will be significantly lower rent/prices if there are supply constraints and people willing to live in overcrowded conditions.
I’ve considered buying a slug of each homebuilder…there are only about a dozen.
Why?
1. Residual Land values move FAR faster than home values (a $1 move in home values translates roughly to a $0.90 value increase for the land on which that home can be built);
2. Most homebuilders wrote down their land holdings to very low numbers and took losses in order to get $ back from the government as tax rebates (in some cases, this was selling a parcel of land at a big loss, and then buying back a similar parcel at a price similar to the price at which they sold);
3. Before the housing bubble burst, public homebuilders were about 25% of the homebuilding market. Many of the private builders got crushed in the downturn.
When the market improves, public builders will be a larger share of the market than before, and they will be booking all sorts of profit based on increases in land values (and being able to monetize that increased land value through home sales).
Five years from now, those who bought homebuilders today to gain exposure to their land holdings will look very smart, IMHO.
The only thing keeping me from buying homebuilders is that I already have investment exposure to residential land…I’m not sure I want to take an overweight position and make it even more overweight.
I agree with you but I don’t know if I would do it the way you propose. I think well located “just outside” suburbia land, undeveloped, is the way I will continue. But I will buy it (them) outright with a partner, cheap, and pay cash.
We have already done this as a hedge with waterfront (canal) property, but it hasn’t gone anywhere. However, we are not losing either.
Stocks suck. Big Time. Buying great asset plays at historically low prices - just to watch them continue on down.
If you can buy land cheaply enough with cash, that makes a lot of sense (and that’s the investment exposure that I note above).
That said, homebuilders are more liquid, and can move quickly based on prospective sale prices of land/homes, not just actual sale prices of land/homes.
The real play that I think I would consider are some LEAPs later this year when the 2015’s come out…provided they are cheap enough. Great leverage with capped downside on investments that move quickly as land prices recover is like a leveraged bet on leverage with the limited downside (the limited downside being the number of dollars you want to place on 00, although I’d only make the wager if I thought the odds were far better…which is why I wait until the 2015’s are available, and will only buy if they are cheap).
I should have said that my land wager was on finished lots, but acquired at far less than development cost (ie. essentially negative land values as compared to undeveloped lots).
I think undeveloped as you mention will also turn out to be very profitable, but only after the finished lots rise in value to the point where people want to buy undeveloped land again.
Dinning, like winning -
At the buffet!
Whoopi Goldberg is on TV offering tips for how to be the minority to all white people. I think the census today announced we’ve got 40 more years before we get there.
we’ve got 40 more years before we get there ??
But get there we will….
Move to Texas if you want to join in right now!
Whoopi Goldberg is on TV offering tips for how to be the minority to all white people.
So you can get the goodies.
You know - to get the race based scholarships, race based jobs, race based credit, race based slots for college admissions, etc.
Just like wannabe Indian democratic massachusetts senate candidate/professor of Elizabeth Warren.
If it was not for the goodies and the special treatment - no one would care what race you were or who your great-great grandmother had a baby with…
The Fourteenth Amendment to the United States Constitution
…nor deny to any person within its jurisdiction the equal protection of the laws.
“If it was not for the goodies and the special treatment - no one would care what race you were” Southern Plantation Owner, 1852
Yeah - the democrats of the 1850s were a racist bunch.
Not much has changed since…
“If it was not for the goodies and the special treatment - no one would care what race you were” Southern Plantation Owner, 1852
Yeah - the democrats of the 1850s were a racist bunch.
Not much has changed since…
Nothing’s changed? The Dems are more racist than Repubs now?
I think the two major parties back then where the Democratic-Republicans and the Whigs. With the Know-Nothing party being the Ron Paul of the 1850s.
Been there, done that. But I was white, so I was the one bending over -
The announcement today was that white people are NOW officially minorities. Not 40 years from now.
The required number of babies were born this week.
The big question is now whether white people will qualify for minority assistance and privileges.
This will get interesting.
oh hell no, they’ll look at “historical advantage” and all that. Nothing will change.
I saw a post on another forum that read, “Any country with a non-white majority is a sh-thole.”
Is that true? The Nordic countries and Australia seem to rather pleasant places to live, prosperous, healthy, low crime. Currently, there’s a lot of truth to this, although it’s not entirely true (Japan, South Korea). The PIIGS countries generally have mixtures of whites and non-whites. Historically however, majority-white countries have had problems. Look at Europes last several centuries of war, culminating in World War I and World War II.
I saw the Wikipedia list of countries by per-capita GDP. The top of the list is whiter and the bottom of the list is darker. It’s not perfectly like that, countries like Albania and Ukraine are well down the list, and some mideast oil producing countries are near the top.
Discussions about race and ethnicity are typically verboten, but in light of the news today, at some point, the discussion is going to happen.
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29_per_capita
Guns, Germs, Steel.
Race has nothing to do with it.
Someday, I’d like to see Jared Diamond debate Charles Murray with oh, say Gwen Ifill moderating.
To my mind, neither has fully made his case, though both are intriguing.
one of my favorite books
I would think homogenous population has more to do with satisfaction/quality of life over actual color. For example Japan.
I think it has more to do with political system/level of corruption. North Korea is very homogenous.
A Texas and California Comparison.
hmmm…Maybe there is a difference on how the people in power view the role of government.
———————————–
How California’s budget blunders led to my divorce from the Golden State
Fox News | May 15, 2012 | Chuck DeVore
Chuck DeVore, former California Assemblyman has moved to Texas and sings our praises, while pointing out the pitfalls of statist California:
Texas’ bureaucracy, excluding teachers, is 22 percent smaller as a portion of the population than is California’s, with every Texan paying about $467 a year for government retiree benefits, compared to California’s $1,105 in pension costs. Sky-high benefits for bureaucrats may soon cause the bankruptcy of Stockton, California’s 13th-largest city.
California has more government paper-pushers but Texas has 17 percent more teachers per capita, with educational outcomes favoring the Lone Star State. In fact, Texas K-12 schools perform consistently above the national average across age, racial, and subject matter areas, while California schools perform well below the national average.
To support its bloated government, California asks more of its taxpayers who pay 10.6 percent of their income to state and local government, above the U.S. average of 9.8 percent. Texans pay only 7.9 percent.
Yet Texas has as big a deficit as CA. They just hide it better.
DeVore accepted a new job as a visiting scholar at the nonprofit Texas Public Policy Foundation, where he will write about Texas’s low taxes and regulations and its effects on business climate, in contrast to other states.As part of this, he will move to Texas.[37]
Yeah, what the hell, I will decry the bloated California government and take my California government pension to Texas where I pay no state income tax…
The Texas Public Policy Foundation is as neocon as it gets.
All of what you say may be true.
It still doesn’t change the fact that California is bankrupt due to its public unions and the power they wield.
It still doesn’t change the fact that every citizen in California pays over $1,000 a year to support the PENSIONS of a public union goons. Just wait until that sinks in to the average $10/worker.
Texas’ bureaucracy, excluding teachers, is 22 percent smaller as a portion of the population than is California’s, with every Texan paying about $467 a year for government retiree benefits, compared to California’s $1,105 in pension costs.
No, they are bankrupt because they give welfare to the illegal immigrant labor force that CA businesses demand as well as DAILY civil rights violation lawsuits they have to pay.
..and don’t get me started on the corrupt government contractors and politicians.
That whole state is as corrupt as it gets.
It still doesn’t change the fact ??
And, It still doesn’t change the fact that he s a fricken hypocrite !! Complaining about how the the type of benefit he receives is breaking the state and then leaving the state with it…
Along with every other public union goon.
What is the first thing a public union goon does when he/she receives their golden taxpayer pension?
Move to a low tax state.
The answer is REFORM public unions. Like cap them at $40,000/year and make state/city workers shoulder most of the cost for them.
And, It still doesn’t change the fact that he s a fricken hypocrite !! Complaining about how the the type of benefit he receives is breaking the state and then leaving the state with it…
“Move to a low tax state.”
Do you have some numbers to back up that claim?
What is the first thing a public union goon does when he/she receives their golden taxpayer pension?
Flips 2banana the bird??
Texas doesn’t really have more teachers per capa.
The illegals (and legals as many children in Mexico commute to the US for school) are under counted.
That was damm funny Rio….
America has the highest corporate tax rate in the industrialized world.
And it harms small businesses the most. Giant multinational corporations just keep their profits overseas.
And who creates the majority of new jobs? Small businesses.
Landslide in November boys…
———————————
New Study: High Corporate Taxes Stifle Small Businesses
ATR | 2012-05-16 | Hugh Johnson
It’s generally best to speak to experts when making broad claims about national policy. For instance, if we want to analyze U.S. corporate tax policy it’s probably best to take the word of a few tax attorneys than, say, a constitutional law scholar. A new study by Jonathan Sallet and Robert Rizzi, partner attorneys in the tax practice of O’Melveny & Myers LLP, highlight the constricting nature of corporate tax rates. ATR has previously highlighted the job-killing nature of high corporate taxes and the anti-growth effects of maintaining the highest corporate tax rate in the industrialized world.
The advent of online trading, electronic banking and digital transfers has made money more mobile than ever. This also means businesses are more aware and influenced by tax rates when deciding how to treat capital. According to Sallet and Rizzi, “A recent Ernst & Young report has noted that increased globalization has led to greater capital mobility. The free flow of capital also makes it more sensitive to tax treatment.” Higher corporate tax rates incentivize businesses keeping money, jobs and factory investment overseas where rates are lower.
In short, businesses don’t innovate or invest in America because the returns on such investments—profit—are taxed lower in Japan.
Most U.S. corporations pay the top rate of 35 percent on their marginal income, close to that rate on their overall profits, and they are more likely to be smaller corporations. But research has demonstrated that it is small and midsize businesses that drive economic growth and that are out-sized creators of jobs.
It’s easy to conjure up images of ExxonMobil, Apple and Microsoft when talking about the highest corporate tax rate, but small businesses are likely to fall into this top bracket. The taxable income level at which the top rate hits smaller corporations is $75,000. You don’t need to be a big company at all to face the corporate income tax top rate. Small businesses, which drive economic growth and embody the American dream, are hit by these taxes. Meanwhile, other nations lower their corporate rates to attract entrepreneurs and incentivize growth while President Obama proposes a tax credit that small businesses will never use.
Somebody is lying:
http://online.wsj.com/article/SB10001424052970204662204577199492233215330.html?mod=WSJ_article_forsub
http://www.reuters.com/article/2011/09/14/us-usa-tax-territorial-idUSTRE78D2E220110914
http://www.reuters.com/article/2011/11/03/us-usa-tax-corporate-idUSTRE7A261C20111103
“A new study by Jonathan Sallet and Robert Rizzi, partner attorneys in the tax practice of O’Melveny & Myers ”
“The taxable income level at which the top rate hits smaller corporations is $75,000.”
any tax attorney advising a small business client with only $ 75,000 of taxable income to operate his business through a C-Corp should be sued for malpractice and then taken to the tree of woe.
Exactly. Most real small businesses are run unincorporated and use the owner’s tax rates (after all their business expenses are deducted) and a few as LLCs taxed as partnerships (also taxed using the owners’ tax rates.
Nice try anyway, bannanas.
Darn those facts.
Darn those facts.
What facts? You post your own opinion and call it “fact”
Do you have a source you can post that refutes America, with the highest corporate tax rate in the world, is not losing jobs to THAT fact?
There are always loopholes. Always been. Loopholes are used by the rich and powerful. Small businesses really don’t use loopholes.
There is no problem in the liberal heart that can not be solved with ever higher taxes…
There is no problem in the
liberalRepub heart that can not be solved with everhigher taxes…lower taxes on the rich.Small businesses use the “loophole” that they don’t pay corporate taxes because corporate taxes are only paid by corporations that choose to be taxed as corporations and small businesses don’t choose to be taxed that way.
Have you ever heard of the “check the box” regulations for corporate entities? Even if you are incorporated as a c-corporation, if you want to be taxed as a partnership instead you file a form with the IRS and pick partnership status. They have been around since the mid-90’s.
Only businesses who want to be taxed as corporations are taxed as corporations in the US.
not gonna research your facts for you.
20+ years experience in the tax world…10 of which were in the small business sector is enough. C-Corp status is seldom if not ever recommended as a form of doing business in that sector.
it’s just not tax efficient…and quite frankly stupid as hell to do so.
i will admit though…my using taxable income as a measure for whether or not a business is small was a huge mis-representation.
there are billion dollar multi-national corps with little taxable income or even losses.
but the spirit of the article was directed towards small business anway…so my point still stands.
ASn you have to be very careful with gov stats. Some of them include partners in hedge and private equity funds as small business people because they are partners of the business. Whoever decided that being in a partnership was indicative of being part of a small business must have been looking at the numbers a long time ago.
“C-Corp status is seldom if not ever recommended as a form of doing business in that sector.”
But, but, but, Rich Dad Robert Kiyosaki says I should have a corporation so I can take a week-long vacation to Hawaii, hold a one-hour “shareholder’s meeting” and write the whole thing off on my taxes!
Kiyosaki would never give me bad advice, would he? Especially on when to buy real estate!
But, but, but, Rich Dad Robert Kiyosaki says I should have a corporation so I can take a week-long vacation to Hawaii, hold a one-hour “shareholder’s meeting” and write the whole thing off on my taxes!
You can only deduct what is usual and necessary for your line of work. Meaning that your vacay isn’t deductible. Sorry.
Where is this “tree of woe” and what happens there?
its from conan the barbarian.
james earl jones’ character tells his minions to take conan to the tree of woe.
it’s kinda like being crucified.
i think there is a clip of it on youtube.
America has the highest corporate tax rate in the industrialized world. (A lie)
There is the 35% marginal rate but the average corporation pays about a 12-13% effective rate.
I say lower taxes for corporations with under 100 employees and close the loopholes for larger companies.
Effective tax rates on corporations have been falling for 30 years and this didn’t “create jobs”.
It did so create jobs! …in Asia!
It did so create jobs! …in Asia!
I stand corrected!
Too bad Apple can afford to use US labor. Those 500,000 jobs would sure help. If only they had some extra cash!
That is a very good way to provide an incentive for corporations with a 110 employees to fire 10% of their workforce.
Tax incentives based on employment or hiring new people or hiring people in certain “zones” or whatever are too complicated to write so they provide incentives for the conduct you actually want. Getting rid of the deduction for the costs of offshoring jobs is probably OK, but next to impossible to enforce. It is just too complicated.
That is a very good way to provide an incentive for corporations with a 110 employees to fire 10% of their workforce.
I’m speaking in generalities on a blog. There are many ways to overcome this issue. It would be thought of when the time came.
I worked on a litigation in which people tried to come up with the best possible way to implement this. It didn’t work. The whole thing is a disaster from start to finish. Too complicated. Never works. The politics gets in the way as well as the practicalities.
If you want to protect domestic jobs (and are willing to pay higher prices to get them) quit the WTO and impose tariffs.
The higher price myth was destroyed long ago.
Google ABC TV News “Made in America”. Lower prices and higher quality by being made in America.
My own personal experience was that I can many things made here that are cheaper and faster and of better quality than Asian made, which makes me wonder why we are sending our money and jobs over there and makes me also think that anyone who supports sending our jobs and money over there are nothing short of traitors.
If you want to protect domestic jobs ..quit the WTO and impose tariffs.
I like it.
When you look at tax income from corporations as a percentage of GDP you find that corporations are paying less and less every year and yet they still outsource jobs.
Hey all - Prime mentioned yesterday that the website for the JT Extension is down - that is true. I changed ISPs and probably won’t fight to figure out how to get comcast to host things.
I put the recent version up on Google Drive for those who wish to keep a link/install it:
https://docs.google.com/open?id=0B0QMI_-Iy8poN3hwcFpNV3JaNzg
The current version is 2.0.1. Let me know if this doesn’t work for some reason.
BTW, your JT ext. is mighty awesome. Thanks!
Seconded. I wuv the JT Extension.
Thanks, sfrenter!
If I could ask Krugman (and the strongly-pro-stimulus advocates) one question, I’d ask, “When does the dollar lose its credibility as a store of value? If debt doesn’t matter, if one can print oneself out of a recession - does that have any dollar limit? And how to identify that limit?”
And why pay taxes?
And why pay taxes?
And why have any national debt? Outsource the printing to China and tell them to print some off for themselves if we get behind.
And he would say that the fact that the US government can borrow money for the sorts of interest rates it can, means that the world isn’t worried about the dollar as a store of value. And that printing money didn’t result in explosive inflation or higher interest rates because we are in a liquidity trap.
“When does the dollar lose its credibility as a store of value?
One answer:
When its competitors gain credibility as a store of value which I don’t see happening now.
yep…remember when peter schiff was trumpeting the EURO over the dollar.
he hit the nail on the head about the real estate bubble…but man he was wrong about the EURO.
have not followed him in a while…wonder what his thoughts would be now.
If I could ask Krugman (and the strongly-pro-stimulus advocates) one question, I’d ask, “When does the dollar lose its credibility as a store of value? If debt doesn’t matter, if one can print oneself out of a recession - does that have any dollar limit? And how to identify that limit?”
Well given the record low interest rates I’d say we are no where near that mark yet. Take a look at Japan and get back to us.
If I had one question for the Austerity fans it would be what happens when gov and business and individuals all cut spending simultaneously, and do understand what a vicious circle is?
Interest rates in Japan are less than those of Greece Italy and Spain. Yet debt to GDP is much higher. What’s the difference? GDP was up 4% in Japan and down in Greece, Italy and Spain. What’s the difference? Japan has great infrastructure while the infrastructure of Greece Italy and Spain collapses. What’s the difference.
Austerity at a time of economic collapse is suicide we are seeing this play out in Europe and yet people still have blinders on.
Actually I belive GDP in Japan was up because of rebuilding from the earthquak/Tsunami. In other words, stimulus spending.
My understanding as well. Their debt is worse than ours. Some say that’s OK, because they borrow from themselves, but isn’t that what we do when the FedRes conjures money and lends it to banks at 0% interest, and they in turn buy treasuries with that money?
Actually I belive GDP in Japan was up because of rebuilding from the earthquak/Tsunami. In other words, stimulus spending.
BINGO and why is Japan able to have stimulus spending while Greece can’t? They have a printing press. The Austerity folks would have us believe that the bond vigilantes will destroy Japan yet their 10 year pays <1%. The countries like Greece Italy and Spain with lower debt to GDP’s have been cutting spending and only seem to be getting deeper into trouble. Facts don’t matter anymore.
How is it that a country with a debt to GDP over 200% pays so little. The answer is we are in a deflationary environment and people are worried about return of investment vs return on investment. Japan has a printing press and can stimulate the economy. Greece is in a hole and has no way to get out.
So, what Greece needs is a nice little tsunami, right? Or how about a volcanic eruption? Any active or dormant volcanoes there? Or does Italy have the monopoly on them?
It occurs to me that the Greeks have all the costs of being a country, but none of the benefits of being a state (aka transfer payments from a central government).
A country that can’t print its own currency. That is a curious chimera.
“When does the dollar lose its credibility as a store of value?”
Republican ignorami are barking up the wrong tree, at least as regards the short-run problem, as the dollar is in rally mode.
And in the long-run, we are all dead.
I note the flipside of the dollar rally is the gold crash. Despite denial by the gold bug brigade, gold is already
off from its record $1,923.70 set in September 2011 by
($1,576/$1,923.70-1)*100% = -18%, with no bottom in sight.
Gold Erases Year’s Gain as Europe Concern Boosts Dollar
By Debarati Roy and Nicholas Larkin - May 14, 2012 6:44 AM PT
Gold erased its gains for this year as concern that Europe’s debt crisis is deepening strengthened the dollar and cut gold’s appeal as an alternative asset. Other precious metals also declined.
The dollar climbed to a three-month high versus the euro as a leadership vacuum in Greece prompted European officials to weigh prospects for the currency union’s first-ever departure of a member state.
Concern Boosts Dollar
“Worries about Europe are pushing people to the dollar,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “Gold will continue to grind down.”
Gold futures for June delivery declined 1.5 percent to $1,559.80 an ounce at 9:43 a.m. on the Comex in New York. Earlier, prices touched $1,556.50, the lowest since Dec. 30. The metal ended 2011 up 10 percent at $1,566.80.
Prices may slump to $1,520 within the next few trading sessions, McGhee said.
Bullion for immediate delivery dropped as much as 1.4 percent to $1,556.68. It ended 2011 at $1,563.70.
The metal rose as much as 14 percent in New York this year after it advanced for 11 consecutive years. While prices dropped from the record $1,923.70 set in September, central banks are expanding reserves of the metal and holdings in exchange-traded products at 2,383.4 metric tons are about 1.1 percent below the March 13 all-time high, data compiled by Bloomberg show.
…
Only when the London Whale (Bruno Iksil) actually leaves JP Morgan, will all the losses be realized. They’ll need him on the payroll while his trade is still going.
May 16, 2012, 1:14 pm
‘London Whale’ Said to Be Leaving JPMorgan
By JESSICA SILVER-GREENBERG and NELSON D. SCHWARTZ
NYT
A headline with an earlier version of this post referred imprecisely to reports of Mr. Iksil’s status at JPMorgan. He is said to be leaving the bank, but he has not yet done so, as the article indicated correctly.
http://dealbook.nytimes.com/2012/05/16/london-whale-said-to-leave-jpmorgan/?src=tp
The Greeks got themselves into this mess through debt.
The Greek paradox and the left
Greek voters sent Europe a message that austerity and deprivation are not an acceptable path forward
By: Matthaios Tsimitakis
Last Modified: 11 May 2012 14:29
Al Jazeera
Athens, Greece - The result of the Greek elections has caught stock markets and governments all over the world by surprise. The Greeks, finally given the right to democratically decide their future, chose to send a message: austerity and deprivation cannot be an acceptable way forward for Europe.
In simple words, the Greeks are saying “no” to austerity but “yes” to the euro. German Chancellor Angela Merkel, along with leaders of European institutions such as Mario Draghi of the Central Bank and Christine Lagarde of the IMF, rushed to reject the possibility of renegotiating the Greek bailout package. The dichotemy must have sounded like a paradox to them. But it’s a paradox that makes absolute sense.
http://www.aljazeera.com/indepth/opinion/2012/05/201251081033640554.html
Correction: Greek POLITICIANS in bed with GS, JPM, et al, got them into this mess.
Goldman made a pile of money ripping off the Greek People.
This is what happens when you have a week gov and strong unregulated financial giants.
Again someone please explain why Greece is in trouble but Japan isn’t. Japan has a much higher debt to GDP yet their GDP was growing this quarter.
I need a week off.
Maybe because the Japanese still make stuff?
I dont’ think so
it’s the printing press
Italy makes a lot of things and they are in trouble as well.
People are worried about a return of investment. With Greece your return would be zero without a bailout. IN Japan you might or might not have a devalued currency but people would get something back.
The hits just keep coming.
And FYI - you cannot filibuster a budget vote in the Senate.
The dems could table and pass a budget ANYTIME they want to as they control the senate. For three years - NOTHING.
Landslide in November….
————————————–
Democrat-led Senate votes down 4 GOP budgets for 2013
The Washington Times | 5-16-12 | Stephan Dinan
The Senate on Wednesday rejected every single budget being offered this year, leaving the chamber — and therefore the federal government — without a plan to address Medicare, Social Security and the other major entitlement programs that are driving deficits and debt.
In repeated votes, Democrats who control the chamber defeated four Republican proposals, including a plan that passed the House in March. The entire Senate also unanimously rejected President Obama’s 2013 budget, voting 99-0 against it, following a 414-0 vote against it in the House earlier this year.
“A stunning development for the president of the United States in his fourth year in office,” said Sen. Jeff Sessions, Alabama Republican.
Congress is required by law to pass a budget by April 15, then write the annual spending and tax laws to carry out the budget’s targets.
But for the third straight year, Democrats didn’t offer a plan of their own in the Senate. The last time it did pass one was in 2009, when Democrats controlled all the levers and wrote the measure that paved the way for them to pass Mr. Obama’s health care law.
The dems could table and pass a budget ANYTIME they want to as they control the senate. For three years - NOTHING.
Yawn…….Here’s the facts 2banana. The only ones who care about that kind of stuff are the Obama haters. The Dems and most Independents don’t care. Do you think something like that will sway an Independent to vote for a Repub? Why would it? Because the Repubs are so much more responsible on budgets, or care about America more? Come on. Your kind of BS only fires up your wacked base and makes thinking Independents just roll their eyes.
You’re really going to have to up your game if you want a “Landslide in November….”
We will see.
Nov 2011 - How many seats did the democrats lose in the house?
Yeah - that wasn’t a landslide to “hope and change”
Can’t wait for the landslide to ‘four more years”
And PS - if we just elected “county club just slow spending down a little bit” republicans it won’t mean anything.
I am praying for Ron Paul “we need to change the way we do business” types of Republicans elected.
And I WISH I could SUPPORT democrats on this. Name some (or even ONE) fiscally conservative democrats who will stop the looting and I will support him/her FULLY.
Name some (or even ONE) fiscally conservative democrats who will stop the looting and I will support him/her FULLY.
Every Democrat that wants to repeal the BushTaxCutsForTheRich and slash the Military.
There are two sides to every budget, Spending and Revenue.
(Are you twitching now?)
ZFACTS.com 2banana - and take a good look at where and when our debt came from. Ronney RAYGUN and BUSH created a pile of debt.
http://en.wikipedia.org/wiki/Us_senate
Control the Senate? No, they don’t. Unless you think 6 people constitute a majority in a group of 100.
wiki says there are 51 not 6. http://en.wikipedia.org/wiki/List_of_current_United_States_Senators
I meant 6 more Dems than Repubs.
Not literally only “6″.
…which reminds me. How long have the Repubs controlled the House? Again.
Republicans took control of the house in January 2011.
They have passed and sent budgets to the dem senate for two years now. The dem senate then does nothing ignoring its constitutional role.
And we all know why. Democrats know they will not be re-elected if they put their insane high tax/high spending wishes on paper.
Easier to do nothing and pass continuing resolutions and up the debt ceiling every so often.
Why do you ask?
So a year and half now after, what, a 2 year hiatus after, and before that a what, 12 year run?
And what happened during those 12 years? I mean besides the housing and stock market bubble? And 2 wars. And never found WMDs. And Bin Laden running free. And Patriot Act 1 & 2. And the TSA.
Oh wait, the Repubs controlled BOTH chambers and the White House during that time.
My bad.
They have passed and sent budgets to the dem senate for two years now ??
Yeah, all from that little twerp Ryan Paul….On the surface it stinks to high heaven…No military cuts.. I believe, they got increases…
If the rich dude wins and the Dems hold the Senate, I hope they let the sequester go into effect…Let the neocons eat some of their own crow with four years of recession and 10% unemployment many in there own southern backyard….They will be the ones telling their constituents well;
I voted for it before I voted against it….
Is the filibuster unconstitutional?
Posted by Ezra Klein at 10:02 AM ET, 05/15/2012
Washington Post
According to Best Lawyers — “the oldest and most respected peer-review publication in the legal profession” — Emmet Bondurant “is the go-to lawyer when a business person just can’t afford to lose a lawsuit.” He was its 2010 Lawyer of the Year for Antitrust and Bet-the-Company Litigation. But now, he’s bitten off something even bigger: bet-the-country litigation.
Bondurant thinks the filibuster is unconstitutional. And, alongside Common Cause, where he serves on the board of directors, he’s suing to have the Supreme Court abolish it.
In a 2011 article in the Harvard Law School’s Journal on Legislation, Bondurant laid out his case for why the filibuster crosses constitutional red lines. But to understand the argument, you have to understand the history: The filibuster was a mistake.
http://www.washingtonpost.com/blogs/ezra-klein/post/is-the-filibuster-unconstitutional/2012/05/15/gIQAYLp7QU_blog.html?wprss=ezra-klein&google_editors_picks=true
Bloomberg video interview with Alan Simpson (09:23 minutes), of Simpson-Bowles fame.
“… you do not have to have a brain to know that if you owe it 16 trillion dollars when Italy is going down the slope and their debt is $2.6 trillion and ours is $16, and when you spend a buck and borrow 42 cents and when every penny of revenue that came into this country last year with income tax, excise tax and tariffs, went to only three programs. Medicare, Medicaid and Social Security. We have borrowed for the rest of it. Ask Paul [Krugman] how the hell you get through that. This is totally predictable, totally unsustainable. I love to read his stuff because it borders on hysteria. He talks about the lost souls of the past, and he is in there, too. This is not 20 years ago, it isn’t 10. It is now. You have 10,000 a day coming into the system. The demographics are there. It is all different — it is not the same.”
http://www.bloomberg.com/video/92724585/
Yet, when Bush had full control of all 3 branches, the GOP did nothing but accelerate the spending as did Reagan.
Hypocrites!
As a former Republican few things disheartened me more than the Reagan deficits and later the Bush deficits.
How about the fact that they bragged about it and dismissed it.
Dick Cheney ” Deficits don’t matter”
Newt “To the victor go the spoils”
I agree.
The WORST deficits under Bush: $460 billion/year
So FAR the average under obama: $1.4 Trillion/year
Who would have thought the worst of the Bush days would be the GOOD OLD DAYS of government spending?
Yet the obama kool-aid drinkers will defend him to the last…
Give me a break.
I’m not an Obama supporter, but Social Security, Medicare, and tax receipt reductions due to the recession have more to do with the deficit than anything Obama did.
If you are critical of Obama because he did NOTHING to solve the deficit, then I’m on board. Blaming him from the deficit is ignoring the reality of the US economy and entitlement programs.
Tell us Alan how getting rid of Medicare nad Social Security will make the average American better off.
This statement right here tells you everything about his propaganda
you do not have to have a brain to know that if you owe it 16 trillion dollars when Italy is going down the slope and their debt is $2.6 trillion.
Seriously no mention of the fact that the US has a much larger GDP. No mention of the fact that the US can print it’s own currency. These guys are pure evil, they lie and deceive the nation to further concentrate the wealth. The emperor has no clothes and the loyal crowd cheers as if he does, only the loyal subjects can appreciate them because they are intelligent?
SIMPSON IS NOT PROPOSING TO GET RID OF SS OR MEDICARE.
Read this:
http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/TheMomentofTruth12_1_2010.pdf
This plan, commissioned by Obama, and championed by Alan Simpson (R) and Erskine Bowles (D) does a number of things to Social Security, including:
1. Creating a minimum payout for low income workers at 125% of the poverty level;
2. Increases payout to people over 85 years old (under the theory that they are more likely to have used up their other retirement);
3. Pays for Social Security in part by increasing the payroll cap faster than the current law.
This is the long-term solution to the deficit, Social Security and Medicare solvency, and tax reform, yet no one wants to spend the time to read it, understand it, and support it…including the President (who commissioned the damn thing).
And to be clear, my ire is not solely directed at the President (although a leader that I would want to support would have done far more with this blueprint).
No, my ire is directed at all members of both houses, with the exception of the “gang of six”, who picked up the ball and were pushing to get something akin to this plan done.
My ire is more at his argument. Comparing the US debt to Italy’s to make a point is crazy.
I’m not opposed to making changes. The one thing that I don’t like is increasing the cap. The upper middle class is always the target. I’d be fine paying more if guys like Romney paid the same effective tax rate as me instead of 14%.
I think Simpson is beside himself with anger at the whole system at this point, and trying anything to scare people into looking seriously at their plan.
Even this weekend, Jamie Dimon (a Democrat) called himself a “marginal Democrat”, pointing to Simpson Bowles as the solution people should pay attention to…he essentially said that everyone in America should read Simpson Bowles and make up their own mind.
I haven’t read it cover to cover, but I’ve read enough of it to see that it hits both sides, which actually tells me it’s probably a reasonable compromise.
The cap for SS is already increasing annually, they are proposing to have it increase a bit faster.
They hit guys like Romney through their tax reform, where they are proposing to make capital gains rates equal to ordinary income rates.
Just skim the plan…you may be surprised by its balance.
It looks like the 83 yr old widow who is losing her home has a cousin in E TN. Fortunately this case has gotten some people’s attention.
>”She also said a lack of communication with Wilson & Associates of Little Rock, Ark., the company that holds the deed, exacerbated the problem.”
I hope some light will be shown on Wilson associates and their shoddy forclosure procedures. The daughter is a teacher and may have been able to help with the bills. As it stands I’m guessing the 60K will be raised by the community.
http://m.knoxnews.com/news/2012/may/17/widow-78-spared-immediate-eviction-offers/
Why doesn’t a 83 yr old widow have a paid off house?
Oh - because a roof cost $60,000????
WHERE DID THE MONEY GO???
——————————
Jones had defaulted on payments from a $60,000 loan she had taken out on the home in 2007 to make major repairs, including a new roof.
Note that the article said major repairs. She might have needed a new roof, rewiring, replumbing, and new mechanicals. Those can really add up.
Don’t be so harsh. There are others who may not be as swift as you, and trust me, as people get older, they are more vulnerable to being taken advantage of. I see this playing out in my own family.
Where did the money go? To scams the repairmen were pulling on her.
I want a cheap house.
I don’t even care anymore.
So is it the Greek debt crisis, the incipient Chinese slowdown, or something else that is eating stock traders’ lunches all around the globe?
May 17, 2012, 9:24 p.m. EDT
Asia markets tumble, with Japan’s Nikkei down 2.5%
By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) — Asian shares got dumped Friday as fresh concerns about the health of the Spanish banks added to existing worries about capital flight from Greek lenders, sending investors fleeing from equity markets.
Japan’s Nikkei Stock Average fell 2.5%, South Korea’s Kopsi index dropped 2.3% and Australia’s S&P/ASX 200 index skidded 2%.
…
Where is Combotechie these days? This should be a shining moment for him, as CASH IS KING, at least so long as the Fed doesn’t go crazy with QE3 jawboning!
May 17, 2012, 3:36 p.m. EDT
Dollar extends rally to 14th day
Greenback drops against Japan’s yen after U.S. data
By Deborah Levine and William L. Watts, MarketWatch
NEW YORK (MarketWatch) — The dollar turned back up on Thursday, extending its longest rally since at least 1985 into a 14th session — as U.S. stocks fell and Treasury yields touch their lowest level ever following weak economic data and more causes for worry about Greece and Spain.
The greenback had been supported earlier by increasing concerns about Greece and Spain, though an unexpectedly weak regional manufacturing report in the U.S. raised some expectations that the Federal Reserve may ease again, pushing the dollar down sharply against the Japanese yen.
…
Record-low yields, long dollar rally weigh on stocks, oil
May 17, 2012, 4:39 PM
Major U.S. stock benchmarks and oil futures fell for a fifth day on Thursday after a gauge of manufacturing in the Philadelphia Federal Reserve’s region unexpectedly contracted this month.
Wait, who’s watching U.S. data? Well, maybe it matters when it comes in conjunction with problems in Europe – Spain having to pay more to borrow money, and Greece getting downgraded again amid worries about its political future.
As if another sign that things are bad was needed, yields on benchmark 10-year Treasury notes closed at their lowest level ever.
The Dow Jones Industrial Average lost 156 points, or 1.2%, to 12,442.
The S&P 500 index declined 20 points, or 1.5%, to 1,305.
Yields on 10-year notes, which move inversely to prices, fell 6 basis points to 1.70%.
The dollar index, which measures the greenback against a basket of six currencies, rose to 81.446, from 81.359 in late trading on Wednesday – extending its rally to a 14th day, the longest since at least 1985.
…
Greek, Spanish woes push euro towards 2012 low
By Antoni Slodkowski
TOKYO | Thu May 17, 2012 9:35pm EDT
(Reuters) - The euro hit a four-month low in Asia on Friday, extending the decline prompted by fears Greece may leave the euro zone and contagion jitters after Moody’s downgraded 16 Spanish banks.
Worries that Greece could quit the euro may put pressure on other ailing European economies weighed on the currency, which last fetched $1.2690, down 0.1 percent on the day. It has already shed 4.1 percent in May, zeroing in on its 2012 low of 1.2624.
A drop below that level would take the euro to its lowest since August 2010, but traders suggested the euro’s fall may now slow somewhat, adding that there might be options-related plays that could lend it support on Friday.
“I get a sense that for now traders would want to square their positions heading into a news-packed weekend with G8 as the main event,” said Sumino Kamei, senior currency analyst at the Bank of Tokyo-Mitsubishi UFJ.
“After a sharp decline this month we may enter a wait-and-see mode around $1.26, at least until Greek election in mid-June,” she said.
Further dampening risk appetite, U.S. data showed manufacturing in the mid-Atlantic states unexpectedly contracted in May and new claims for U.S. jobless benefits last week stuck at levels suggesting sluggish growth in hiring.
“Financial and asset market divergence in the euro zone is likely to make the EUR (euro) less attractive to reserve managers, in our view,” Morgan Stanley said in a research note.
“The shrinking pool of available higher-rated assets suitable for central bank reserves suggests that the EUR’s weighting in reserves is likely to be questioned,” it said.
…
Divergence noted:
- The U.S. MSM is spouting the housing markets green shoots of recovery mantra.
- Global MSM is suggesting a replay of the Fall 2008 global financial meltdown is imminent.
Something’s gotta give.
With Treasurys producing ongoing stellar returns, I am missing the appeal of investing in real estate.
May 17, 2012, 3:34 p.m. EDT
U.S. 10-year yields hit lowest closing level ever
Thirty-year yields fall to lowest level since December
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices rose on Thursday, pushing benchmark 10-year yields to match their lowest level on record, after the Philadelphia Federal Reserve’s index showed an unexpected contraction in manufacturing in the region this month.
Bonds were supported before the report as rising borrowing costs in Spain added to concerns about bank capitalization and Greece’s future in the euro.
Yields on 10-year notes (10_YEAR +0.06%), which move inversely to prices, fell 6 basis points to 1.70%, below the previous lowest closing level ever, set in September. A basis point is one one-hundredth of a percentage point.
Analysts said that last fall the yields traded below that level intraday.
Thirty-year bond yields (30_YEAR +0.61%) declined 10 basis points to 2.79%, their lowest level since mid-December.
Yields on 5-year notes (5_YEAR -0.27%) slipped 1 basis point to 0.74%, not much above their all-time lows.
The move lower in yields in the last week has been slow, as traders were reluctant to let Treasury yields break to lower levels even as negative news about Europe, banks and Greece keeps investors shifting away from riskier assets. But technical analysis shows the market is quite a distance from a real reversal to higher yields.
“Bull trends in safe-haven assets are still in place so there is no evidence yet that a reversal in safe-haven inflows is upon us,” said Bill O’Donnell, head of Treasury strategy at RBS Securities. “But trend momentum studies are all generally overbought in safe-haven assets, as you’d expect given the moves over the last few months.”
Ten-year yields would have to break above 1.88% for a reversal to be convincing, he said.
“We’re still some distance away from bearish triggers in Treasurys,” he said.
…
Something’s gotta give.”
yea lots of damage to commodity stocks APA way down
Cisco warned a few days ago. But didn’t this happen last Summer ?
What’s APA?
5/08/2012 @ 11:27AM
APA Stock Crowded With Sellers
In trading on Tuesday, shares of Apache Corp. (NYSE: APA) entered into oversold territory, changing hands as low as $85.46 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.
In the case of Apache Corp., the RSI reading has hit 28.6 — by comparison, the universe of energy stocks covered by Energy Stock Channel currently has an average RSI of 41.5, the RSI of WTI Crude Oil is at 25.7, and the RSI of Henry Hub Natural Gas is presently 57.7.
…
“But didn’t this happen last Summer?”
Come to think of it, I bought the dip last summer, after the big bad Congressional budget saber rattling exercise.
But we aren’t there yet this year. In due time:
Posted at 08:30 AM ET, 05/17/2012
Republicans corner the president
By Jennifer Rubin
On Tuesday, House Speaker John Boehner (R-Oho) set the trap. On Wednesday the president walked right into it at a White House meeting with congressional leaders.
Boehner in his Tuesday speech had opened the door to getting something meaningful done this year — on entitlement reform, spending discipline and tax reform. He knows better than anyone that President Obama can’t make any deal and wants to run on his tax-the-rich and Republican-obstructionist themes. At least in part, the move was designed to smoke out the president.
Like clockwork, on Wednesday the president nixed any deal and came down on the side of spend and tax. You could almost hear the delight in a Boehner aide’s readout of what he called the “friendly” lunch meeting:
…
“- The U.S. MSM is spouting the housing markets green shoots of recovery mantra.”
I keep listening but I don’t hear the corresponding rising wages mantra being spouted. Hard to have one without the other, low interest rates alone will only entice the suckers into risky investments and debt slavery.
The quiet attempt to tiptoe out of PIIGS banks is rapidly accelerating into a chaotic sprint.
News Summary: Spanish banking sector’s confidence slammed by report of bank run
By Associated Press, Updated: Thursday, May 17, 6:08 PM
CONFIDENCE SHAKEN: Shares of Bankia SA, Spain’s fourth-largest lender, sank as much as 27 percent after the newspaper El Mundo reported that customers have withdrawn with more than €1 billion ($1.27 billion) since the government announced a week ago that it was effectively nationalizing the bank.
FOR COMPARISON: The newspaper said that’s the same amount withdrawn from the bank in the whole first quarter.
THE CONTEXT: The eurozone financial crisis is intensifying with political turmoil in Greece increasing the likelihood it could leave the 17-country monetary union. Adding to Thursday’s anxiety were credit downgrades for Spanish banks from the Moody’s ratings firm.
…
It’s quite fascinating to see JP Morgan blow up at the same time China is slowing down and capital is flying out of Greek and Spanish banks.
This is quite the global financial conflagration in progress!
Editorial
JPMorphing
Published: May 16, 2012
When he disclosed a stunning $2 billion trading loss at JPMorgan Chase last week, Jamie Dimon, the bank’s chief executive, insisted that the trades had not violated the Volcker Rule, a crucial part of the Dodd-Frank reform law that is supposed to bar banks from doing risky trading for their own account.
This week, however, the story changed. On Monday, a JPMorgan official told The Times that the trades — which have since ballooned to at least $3 billion — started out as allowable, but had “morphed into something” that crossed the line. On Tuesday, at the bank’s annual shareholder meeting, Mr. Dimon echoed that statement, calling for rules to ensure that permitted trades don’t “morph into something different.”
It might sound as if Mr. Dimon, whose lobbyists have led the charge to undermine Dodd-Frank, is calling for more and better rules. If only. We still don’t know the details of JPMorgan’s disastrous bets. But the Volcker Rule was supposed to be clear: federally insured banks would not be allowed to make speculative bets with their own capital. The problem is that Mr. Dimon and other bankers have been fighting to make the regulations as loose and vague — and as prone to morphing — as possible.
And before JPMorgan’s losses were disclosed, the bankers were almost certain to get what they wanted. In October, regulators issued proposed rules that were weak and toothless, and the final version due this summer isn’t expected to be any better.
JPMorgan’s loss has rightly revived calls for a much tougher version of the Volcker Rule. But Mr. Dimon isn’t giving up. By saying now that the bank’s loser trades were not wholly in compliance, he is suggesting that with a few tweaks, the current proposal — the weak version he fought for — will be adequate. Nice try, but no.
Without a strong Volcker Rule, taxpayers — via deposit insurance and bailouts — will continue to be on the hook for risky trades that boost bankers’ pay when things go well but that can wreak havoc on the financial system and broader economy when they blow up.
…
Looks to me like this sucker is going down. The wheels on the bus no longer go round-and-round, as they are about to fall off.
» Stoxx Europe 600 off 1% as banks tumble in wake of Moody’s Spain
A global rout over Spain
Many major indexes down as much as 3%
Investors dump equities on concerns over Spanish banks, with Japan’s Nikkei taking a 2.3% hit.
• HSBC could sell off U.K. retail banking: report
• Dollar stays on fire, set for 15th day of rally
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