Bits Bucket for May 24, 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.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
June 2025 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
So I said to the Winkelvii, I sez, “Tyler, Cameron, take your $65 mil settlement and run.” But did they listen? Noooooo!
But, it’s like Dickie Greenleaf (Jude Law) said in the movie “The Talented Mr. Ripley”, as he was speaking of Wasp Ivy League students: The cream of America’s crop: thick and rich.
Of course, that was back in the 1950s.
Also known as the “upper crust”. AKA, a bunch of crumbs held together by a lot of dough.
Calif. homeowners with foreclosed second mortgages targeted by firm
4:50 PM, May 23, 2012
By Rick Jurgens
California Watch
Adding new uncertainty in the state’s ongoing mortgage crisis, a Texas company is aggressively pursuing hundreds of Californians to collect second-mortgage debt - on homes they’ve already lost through foreclosure.
Many of these former homeowners believed their mortgage debt had been erased after their houses were taken by banks and lending companies. But the Texas company, Heritage Pacific Financial, has aggressively pursued collections and filed lawsuits claiming those debts still linger.
http://www.news10.net/news/california/article/194212/430/Texas-firm-targets-homeowners-with-foreclosed-2nd-mortgages -
No dollar shall escape.
We talked about this here a few years ago.
1. Cottage industries pursuing FB for years. This debt will be just be sold to others to collect.
2. Second mortgages don’t get “wiped out” in foreclosures
The company’s lawsuits often accuse defendants of misstating their incomes on loan applications. While many borrowers did overstate their incomes on applications, consumer attorneys say Heritage Pacific is targeting people who filled out their forms honestly or whose mortgage brokers pumped up their applications without their knowledge.
Critics of Heritage Pacific say the company’s central tactic is forcing settlements from people who can’t afford a drawn-out legal fight and who don’t know the details of California law. The company has sued people with second-mortgage debts of less than $150,000, despite a state law prohibiting lawsuits alleging fraud on mortgages below that amount.
The company doesn’t make mortgage loans, but instead attempts to collect payments on loans originated by others. Heritage Pacific launched its effort in late 2008 when it began buying - at a steep discount - second-mortgage loans that borrowers had stopped paying. Many of the loans were secured by houses that already had been sold in foreclosure by first-mortgage lenders.
“2. Second mortgages don’t get “wiped out” in foreclosures”
But they do get wiped out in BK’s.
But they do get wiped out in BK’s.
Ah yes - but if you just “walked away” from a house that you could make the payments on…
The BK judge looks at ALL assets.
And if you try to hide them…
Exactly. And what difference does it make that they didn’t commit fraud under CA law because the amount was under $150K? You don’t have to have committed fraud on the application to owe the money on a debt that wasn’t wiped out in the foreclosure.
I think the article missed the point. They are probably concentrating on people who, despite the foreclosure, actually have assets or income to go after.
I think the article missed the point. They are probably concentrating on people who, despite the foreclosure, actually have assets or income to go after.
BINGO. They can’t declare BK so the debt will follow them for YEARS.
“BINGO. They can’t declare BK so the debt will follow them for YEARS.”
Agreed, if they strategically defaulted, they’ll be hosed. I wonder what percentage of defaults are “strategic”?
This could be an incentive for some folks to return to the “old country”.
actually have assets or income to go after ??
So, you hit bottom your fault or not…Pull your boot straps up and give it another go…Its 2015 and your life is finally stable again…Except, now the creditors start houding you…Not going to hound you when you have nothing, a waste of time and resources…We will give you time to get on your feet then come after you with a vengeance…A vengeance in particular, if you are uncooperative…Accept this payment plan we have for you Mr. FB or we will make your life a hell….
Accept the payment plan or get sued for the money you owe.
Actually I don’t see why the payment plan would get offered first. You owe $x. Based on income and assets, you can’t declare BK because of a debt of $x. Get sued for $x. There are consequences to signing a contract. You don’t owe rent for as long as you owned the house (no imputed lease no matter what some of our more childish posters think is fair), even if you owned it for 4 years longer than you should have based on your payment history, but not owing rent doesn’t mean you don’t owe on the debt the foreclosure didn’t wipe out.
The 2nd mortgage can be wiped out in some states in some cases. For example, in AZ all ‘purchase money’ loans on qualifying property are no recourse. Doesn’t matter what position the lien is in. And you don’t lose purchase money protection during a refinance unless it is a cash out refinance. It isn’t clear whether the entire debt becomes recourse then or only the amount that was cashed out.
A couple of things - and please correct me if I am wrong:
1.) A 2nd used to purchase a home, i.e. you took out a $80,000 first and a $20,000 second to initially purchase a home (nothing down of course, this is California), as long as you did not refinance your home into a new 2nd this debt would be non-recourse and all you can do is lose the house. So the people they are going after are ones who probably took money out of the house after purchasing it.
2.) The statute of limitations is 3 years, so the people who walked away early - before these types of businesses started - are much more likely to have no negative consequences.
So, if Heritage Pacific went after non-recourse debt or debt beyond the statute of limitations what would be the consequences to them? ‘Cause you know it’s gonna happen.
#1…used to purchase a home…There is your key phrase right there…Purchase money loans are non-recourse in Ca…
#2. Have no idea what the statute of limitations are but you bet your ranch that the lenders know what they are….And, the vulture collection business surely know what they are and are all over those lenders with their 10-cents on the dollar offers…Take this now or the statute of limitation will run out…In the years ahead will see how ugly this could get…
It’s four years in Cal for a written contract. People unwittingly extend them when they keep paying or try to work something out.
The company has sued people with second-mortgage debts of less than $150,000, despite a state law prohibiting lawsuits alleging fraud on mortgages below that amount.
150K is alot of money for a second mortgage !!
if thats 20% down then we are talking 750K and up homes
peak prices for sure
“No dollar shall escape.”
Zeropercent Horizon?
“No dollar shall escape.”
Why should these dollars escape? Did these people sign for these loans? Yes. Are they valid contracts? Also yes. Can these defaults be collected under the law? Still yes. So what’s the problem?
This idea that you can keep profits but aren’t liable for losses, is rotting America from both the top and bottom.
Awesome business model.
Stories similar to this one could explain why an ex-colleague of mine and her boyfriend, who walked away from a mortgage he was fully capable of paying on a San Diego investment condo, decided to leave the country for a while.
Now that you mention it, I think I know a married couple from your area that might be doing the same thing. They do pop back in from time to time but seem to be running their “business” online and on the road.
decided to leave the country for a while ??
Better not come back…
The movie “Maxed Out” interviews employees from a debt collection firm (basically a cubicle farm). One enthusiastic young women told the camera that one tactic is to chat with their debtors to look for ‘openings,’ i.e., pockets of exploitable money. “If he tries to hang up and say he has to go to work, that’s an opening. If he complains about his credit card interest rate, that means he has a credit card and that’s an opening. If he says he’s doing a favor for a friend, that’s an opening. If he says, my mother is taking me to dinner, that’s an opening…”
Working in phone sales for TARP bank in 2004-2005, the strategy for seeking “openings” in sales was not much different than for collections, who worked on the other side of the building from us. But their burnout and turnover rate was much higher…
I have had some amusing conversations with a collection agency trying to harrass me into paying a $25 parking ticket from the People’s Republic of Evanston IL. After about the sixth such conversation, in which I told the pleasant young lady that I had already sent them 25 cents, which I felt more than adequately covered my “infraction”, I have gotten no further calls. In a perverse way, I miss them.
My favorite parking ticket was one I received from Orange, New Jersey. As far as I know I have never parked in Orange. As far as I know I have never driven on a road that wasn’t a limited access highway in Orange. So I called the number and told the young lady that the ticket was wrong. She said that was impossible as the ticket indicated that the person writing it had an unobstructed view of my plate. I insisted. Finally she asked if I really owned the car with the plate number on the ticket. I said yes. She asked if it was a white Audi. I said, no it was a green Ford. Silence. She asked if I could prove it. I faxed the registration. Called her back. Got a brief apology and never heard from them again. I should have insisted on a written confirmation that the ticket was discharged.
I always wondered if the person who wrote the ticket got in trouble. The woman on the phone sounded like she really wanted to get the money from an Audi owner.
A few weeks ago I got a notice from a city just north of me that I had been in a hit and run. Fortunately for me, at the exact time of the “incident” I was about 1000 miles away at my college reunion. I literally had hundreds of witnesses. When I finally got a hold of an officer I was able to prove my innocence. The officer emailed a few days later and said that the woman who had filed the complaint had taken her car to an auto body shop and the shop had told her that there was no damage. WTF? The officer emailed me to say that it was now a “mute” point.
Lionel: This has the hallmarks of some kind of scam.
A while ago, I noticed a charge on my credit card. From some state that I’ve never been. On the same statement, the charge was removed. I called the credit card company. The lady said, it’s been taken off, it must have been some kind of mistake. I had no idea what was going on. She wouldn’t/couldn’t provide any other information.
A few months later, a bogus charge appeared which wasn’t removed. Not big, but no reversal of it on the statement. I called the credit card company. As it turns out, someone must have gotten the number and tested it the first time. The second time they ran it, guessing perhaps I might not read the statement. I canceled the account and got a new card with a different account.
Summary: When inexplicable things occur, and someone says, “Oh, don’t worry about it,” my fraud antennae go up.
Neuromance, I thought the same thing. Actually, because I was out of town at the time, I thought it was a scam from the start. The officer clearly did not want to pursue this any further than he had to, so I let it go.
Speaking of scams as you experienced, my wife recently was billed on her credit card for a credit check by a third party. She got the charges removed but couldn’t help but wonder if this was not a broader problem.
Me? I have caller ID. If I don’t recognize the name and number on the screen, I don’t take the call.
“Me? I have caller ID. If I don’t recognize the name and number on the screen, I don’t take the call.”
Years ago I frequented telco related message boards and there were many people who used this tactic. (This is in the days before email was common) I always wondered how they talked to their friends
if their friends used the same tactic. Of course, considering how, erm, vociferous they were about various items, they probably didn’t have many friends…
I always wondered how they talked to their friends
if their friends used the same tactic. Of course, considering how, erm, vociferous they were about various items, they probably didn’t have many friends…
I’m one of those wiseacres who gets a real kick out of leaving clever messages on friends’ voice mails. If they don’t call me back, well, I’ll just needle ‘em in person.
Lawyer$ need work too. :-/
Buy the debt at $.05 on the $1, and then hope to settle for $.10 on the $1?
hope to settle for $.10 on the $1 ??
Better yet….We know that you are just getting on your feet Sir/Madam so how about we stretch this debt out for you on our convenient monthly payment plan @ 12% interest….
US sales of new homes rose 3.3 percent in April
My Way News
WASHINGTON (AP) - Americans bought more new homes last month, the latest evidence that the U.S. housing market could be starting to recover.
New-home sales increased 3.3 percent in April from March to a seasonally adjusted annual rate of 343,000, the Commerce Department said Wednesday. Sales rose sharply in every region of the country but the South.
The gain pushed the annual sales pace to its second-highest level in two years. Economists were encouraged by the increase but cautioned that new homes are still selling at half the rate consistent with healthy markets.
The increase follows other reports this week that suggest steady improvement in housing. Sales of previously occupied homes rose to near a two-year high in April. And Toll Brothers, a key U.S. builder of luxury homes, reported that it returned to profitability in the second quarter.
“Been down so long it looks like up to them.”
343K? And replacement/1% HH formation rate should be? What was it? 1.2 million new housing units with 65% of that being SFH = 800K.
So, still under half the demographically “normalized” rate. Well, I guess that makes sense since we were double the demographic rate for 5 years. We would need to be half the demographic rate for 10 years to eat up the excess supply…..
Too bad HH formation has not been hitting the demographic norm.
Going back a long way, I’m surprised by the actual numbers:
http://www.census.gov/construction/nrc/pdf/compann.pdf
The average from 1990 to 1999 was 1.33 million.
The average from 2000 to 2011 is 1.406 million.
If 2012 is the same as 2011, the average from 2000 to 2012 becomes 1.343 million.
I think the missing piece in my initial thinking was the replacement of structures. Take a look at the 2007-2009 “CINCH” report from HUD.
http://www.huduser.org/portal/datasets/cinch/cinch09/cinch07-09.pdf
This number is estimated at ~400k per year for that report. If there are 130 million units nationwide, this means we replace .3% of the homes per year, which doesn’t seem unreasonable.
So, solving for the 1990-1999 ten year average is 900k new households, plus 400k replacement of obsolete structures=1.3 million.
Doesn’t seem a million miles away from reality.
I think your 10-year estimate is far too long, since we never actually hit double “normal” construction. The highest years were still under 2 million.
Since not all markets were overbuilt to the same extent, it seems reasonable that some markets should be starting to recover (in terms of new construction) starting about now.
‘A decades-old jet fuel spill threatening Albuquerque’s water supply could be as large as 24 million gallons, or twice the size of the oil spill from the Exxon Valdez, New Mexico environment officials acknowledged Tuesday. Officials previously estimated the spill from Kirtland Air Force Base to be about 8 million gallons. But state geologist William Moats, who made the original calculations, recently estimated the spill could be up to three times larger.’
‘The fuel came from what officials now believe was a 40-year leak from underground pipes at a Kirtland aircraft fuel loading facility. The leak was discovered in 1999.’
http://www.airforcetimes.com/news/2012/05/ap-kirtland-jet-fuel-spill-may-reach-24-million-gallons-052312/
You would think someone might do an inventory over 40 years and realize more was going in than coming out. What’s the old saying, ‘good enough for government work.’
Quick, somebody build a development over it. My vote’s for Lennar.
http://www2.tbo.com/business/pasco/2012/may/23/landfill-site-troubling-pasco-homeowners-ar-407235/
Lennar! L.M.A.O. Not the first time there was trash under a Lennar development. Happened back in the 1980s in South Florida, Hampshire Homes in Miramar.
Reminds me of the show, ‘Arrested Development’ and the planned community they were trying to build/launch, “Sudden Valley”.
My guess is that the supplier poked a hole in the pipe or was stealing and the hole in the pipe story is a cover.
There’s something spoiling the water supply. In the 80’s a lot of military bases were closed in Texas. Almost all of them had big environmental messes that had to be cleaned up.
“Almost all of them had big environmental messes that had to be cleaned up.”
A Private “Bidne$$” Inc., would never allow anything like this to happen. Please get wa$teful Gov’t over$ight out of their meager profit$ makin’ way$.
I’m not saying private business doesn’t cause environmental damage. For example, also in Texas, older gas stations almost always have remediation to be done because their underground tanks leaked. But at least a gas station owner had an incentive to check and see how much was leaking and fix it if it was costing them too much. These people in NM possibly poisoned an entire city’s water supply and it took 40 years to do it!
Aw Mr. Ben, I’m just kidda ya, There are $erious people in America who think the EPA is complete usele$$ne$$, like 98% of the American people working there & their project$ they are looking at, are something that should be in $omalia. Epa = worthle$$, that’s their truebelief. Eye tend to di$-agree, but eye’m not ALL angry at ‘em.
Many people often believe that the planet is too big for mankind to actually destroy, too which I reply, “Like the forests of the middle east?”
goon squad time capsule message for the Lucky Duckies of the year 2100 sharing a polluted, resource depleted planet with 12 billion fellow humanoids: How’s that capitalist model of infinite growth in a finite ecosystem working out for you now?
Don’t forget to include a copy of Bladerunner in the time capsule.
Or if you’re feeling more lighthearted, put a copy of Wally in it.
“the year 2100 sharing a polluted, resource depleted planet with 12 billion fellow humanoids”
I’ve got some news for you, Goonie: There won’t be 12 billion people by the year 2100. People have to eat in order to exist. We’re running very much over the natural carrying capacity of an agricultural society based on renewable energy sources. That’s my way of saying that we have billions of people alive today who are effectively eating petroleum.
As petroleum reserves and our usage profiles clearly indicate, we’re going to be down to critically low levels of transportation ability by the year 2050. So 50 years beyond that, well into the period that’s properly called “petroleum starvation”, billions of people just won’t have the agricultural outputs (since they will lack INPUTS) to support their lives. Billions will have to perish… from today’s population level.
And since this is an economic equation, there’s no question about using coal or natural gas to make up for it. We simply chose to run our agriculture in overdrive, being very energy intensive and highly mechanized, to feed billions. By 2100, due to starvation alone, we’re going to get down to 4-5 billion people from a high of 9-10 billion. And there’s no rational view that expects them to go down easy, so wars for resources (i.e. the remaining producing oil wells, no matter how high their water fractions are, and inevitably in the “wrong hands”) will kill more. So I say count on 2-3 billion being alive in 2100 AD. And most of those will be raising food.
destroy to the point where humans cannot exist or like death star destroy?
if you mean mostly destroy then i think that has been evident since July 16, 1945.
The planet is too big for mankind to destroy.
That said, we could do a fantastic job making it uninhabitable for man.
If deserts don’t count, then yeah.
But modern desertification (the increase in dessert area) is directly caused by man. (over development, redirection of major water supplies, etc) And deserts are, well, a pretty good definition of “barren”.
“You would think someone might do an inventory over 40 years and realize more was going in than coming out.”
But that wasn’t in anyone’s job description. “Not my yob.”
i know this guy who had to borrow $ 50,000 for a medical emergency.
Everything was fine…he found out the following year who could keep borrowing $ 50,000 every year (i know crazy right). he spent it on hookers and coke.
i criticized him for his recklessness…but he said hey man…at least i haven’t increased my spending year over year.
i was like…hmmm….i guess your right.
his name was wayne…and i told him to party on!
“he spent it on hookers and coke.”
I’m surprised it was only $50,000 a year.
i just assumed it was on hookers and coke.
he showed me no budget…so not sure what he spent it on.
i just assumed
You know what they say about assuming.
“I have spent alot of money on hookers and coke in my life and the rest of the money I just wasted”
Hookers and coke? So, he was funding the US Secret Service?
perhaps…he would have been better off running guns to mexico though. hiring a prostitute is apparently much worse to this administration.
borrowing $ 50,000 every year … he spent it on hookers and coke.
I bet he just blew the rest of it.
Wasn’t that the economic model until the bubble popped?
Random question of the day: Does anyone know if a first mortgage used to buy a house (acquisition loan) in Kansas is recourse or non-recourse?
In CA the first first, and first second are non-recourse, but if you refinance them they become recourse.
Thanks!
In CA the first first, and first second are non-recourse, but if you refinance them they become recourse.
I thought the second was non-recourse in CA only if it was a “purchase money” second—e.g. obtained as part of the original closing. A second taken out later, I believe would be recourse.
You’re right. Sorry - so many people did first and second loans together when buying I sometimes forget you don’t have to.
didn’t need mortgage insurance if you use the 2nd as a 20% downpayment . Plus it was cheaper
Correct me if I’m wrong, but you can still have a non-recourse loan that is not for the purchase, but the law requires that loans used for purchase are non-recourse.
By Les Christie | CNNMoney
‘Despite rising home prices, more than 30% of borrowers, or close to 16 million homeowners, were underwater on their mortgage during the first quarter, according to Zillow.’
Gotta get in that ‘rising home prices’ thing!
‘Nevertheless, the percentages of homeowners who were underwater on their homes remained high as delays in the processing of foreclosures kept many delinquent borrowers on the balance sheets, said Zillow. Once a bank repossesses a home, the mortgage holder’s negative equity is no longer considered part of the tally.’
‘Negative equity is still a big risk, however, since it makes homeowners more vulnerable to financial setbacks, such as a medical emergency, job loss, or other unexpected expense. If they don’t have their home’s equity to fall back on, it increases their chances of spiraling down into foreclosure.’
‘Having a high percentage of underwater homeowners is also bad for the economy because it can trap borrowers in their homes and prevent them from pursuing employment opportunities elsewhere, according to Humphries. That can make it more difficult for them to advance their careers and for companies to find skilled workers.’
Never a mention of what high houses prices costs the economy, or the plight of those facing it in rents or mortgage payments. It’s always ‘woe to the poor loan owners!’
The loan owners paid for the article.
They also have the spokesperson ready to provide the quick answer, saving the journalist time.
This is essentially what it comes down to. The journalist is a worker. He/she needs to get a job done - generate coherent, interesting paragraphs to fill a section of screen/paper.
In comes in one of your advertisers, who also happens to have a well-written article ready to go, complete with contacts who the readers can contact for further information! Win-win! Make the advertisers happy (who’s actually paying your salary), make the reporter happy (who can fold up shop early).
The big sales organizations know how humans work. It’s how they got to be big sales organizations. They have to know how humans work - their job is to understand them and manipulate them.
How did the number of underwater borrowers manage to increase from 11 million to “close to 16 million” during a period of rising home prices?
‘Tis a mystery.
Here in AZ, Zillow hasn’t been using “distressed” sales as comps. When distressed is the bulk of the sales, you really are reporting garbage numbers if you ignore them.
I have to guess that (1) Realtors have a lot of sway with what Zillow does, and (2) Realtors don’t want Zillow to paint an unbiased picture.
Just my guesses.
Just as prices peaked in 2007, the state of AZ filed a lawsuit against Zillow for providing appraisals without a license. Zillow countered that their estimates were in no way “appraisals”.
Well, the suit went away after Zillow made undisclosed changes to their zestimate methodology (don’t include distressed sales?).
http://raincityguide.com/2007/04/19/zillow-gets-a-cease-and-resist-order-in-arizona/
Odd that they didn’t mind Zillow on the way up. It wasn’t until they started showing prices topping, then slipping that the state of AZ had a problem with Zillow.
Invisible hand of the market….
That’s beautiful.
You need a license to provide a free opinion on a website.
I wonder if the ACLU knows about this.
This goes to show the sophistication of organizations like the NAR. Again, sales organization, has to know how people work, in order to effectively influence/manipulate them.
financial setbacks, such as a medical emergency,
One day we’ll realize how much our current health care system hurts our economy.
In the meantime, we’re the only ‘advanced’ nation where getting sick can bankrupt you. I guess that’s why God thinks we’re special.
“Having a
high percentage of underwater homeownersemployment-based health insurance system,is also bad for the economy because it can trapborrowers in their homespeople in their jobs and prevent them from pursuing employment opportunities elsewhere”Like that.
Which is why I keep saying that when this country gets national health insurance, and yes, it’s only a matter of time, our National Anthem will briefly become “Take This Job And Shove It.” I’m especially fond of the Johnny Paycheck version.
Briefly? Many times during my career I thought how nice it would be to learn to be a sculptor or one of those artists who uses a welder to turn metallic junk into interesting artwork. Or perhaps learn to play the cello and try out for a symphony orchestra.
What you’re forecasting, Slim, is a significant reduction in taxable income and a worsening of the deficit and public debt. And for those who want to continue working, the lure of “off the books” cash-only employment is greatly increased.
Medical benefits? We don’t need no stinkin’ medical benefits.
Sounds to me like employers might have to pay more to keep their employees (or improve their working conditions) if those employees had the option of going off to start their own business or semi-retire as a sculptor because they could get reasonable health insurance.
Sounds to me like employers might have to pay more to keep their employees (or improve their working conditions) if those employees had the option of going off to start their own business or semi-retire as a sculptor because they could get reasonable health insurance.
Thank you, polly, for doing a better job at arriving at the point I was trying to make.
What you’re forecasting, Slim, is a significant reduction in taxable income
Why? Say an engineer leaves his job to go grow cucumbers. Now you have engineering work that isn’t being done. The employer has to hire another engineer. Why, that employer may even have to hire a young person out of college, or an engineer who’s — horrors — unemployed!! Meanwhile, our intrepid cucumber farmer has income to pay taxes on, or, if nothing else, pay sales taxes on fertilizer and gasoline to market.
Universal health care is more likely to increase income, not decrease it.
You are very welcome. Having large companies lose the “we can actually provide you with group rate health insurance” advantage they now have (over independent work) isn’t quite as good as having a strong union, but it would help.
oxide,
“our intrepid cucumber farmer”
now we either have too many cucumber farmers, there is a national increase in cucumber consumption or he displaced another cucumber farmer who is now unemployed and collecting unemployment and not paying taxes.
Oh we’re “special” alright.
The pinnacle of American medical technology of the 21st century is the cash register donation jar for some uninsured loser kid’s cancer meds. Let Freedom Ring!
Nationalize health care fails in Greece.
—————————-
Greeks pay full price for medicines
Millions of Greeks are being forced to pay full price for essential medicines because the state health system has run out of cash to pay pharmacies for supplying prescriptions, health officials said on Wednesday.
http://www.ft.com
I think we all already know that Greece is financially foobar’d beyond all hope, so their national health system failing shouldn’t be a surprise. In any case, they are no worse off than we are, having to pay out of pocket for their medicine (which I’m willing to bet is still cheaper than what we pay in the US)
But what about all the other countries where socialized heathcare does work? Like Singapore, Taiwan or Canada?
they are no worse off than we are, having to pay out of pocket for their medicine
Exactly. Thanks to a financial disaster, they’re now stuck with essentially our health insurance system. The lowest rung of the ladder.
Coming soon to the rest of Europe, Asia, etc.
And PS - Wish we had a free market for health care in America. Instead - we have the WORST of both worlds.
Coming soon to the rest of Europe, Asia, etc.
End of universal healthcare? Not even. Disruptions? Sure. Higher costs maybe. End of national healthcare? No. Foreigners aren’t programmed to be shafted on healthcare. They’ll fight for that RIGHT and are willing to pay taxes for it. Besides they pay about 1/2 of what we pay in GDP for healthcare so there is room for adjustments.
A bankrupted country can’t pay for jack and sh*t.
See Greece.
See the entire USSR and eastern block in the 1980s. I saw it first hand. First you bribe your “free” doctor to see you. Then you go buy your drugs on the black market as the “free” hospital has no drugs for your operation. Oh, did I mention you need to bring your own toilet paper for your hospital room?
Soon to come to all of Europe. And to the USA.
————-
End of universal healthcare? Not even. Disruptions? Sure. Higher costs maybe. End of national healthcare? No. Foreigners aren’t programmed to be shafted on healthcare. They’ll fight for that RIGHT and are willing to pay taxes for it. Besides they pay about 1/2 of what we pay in GDP for healthcare so there is room for adjustments.
Besides they pay about 1/2 of what we pay in GDP for healthcare so there is room for adjustments.
A fact that naysayers like banana like to overlook.
See the entire USSR and eastern block in the 1980s.
That would be the eastern bloc, Mr. Dual Fruit.
“See the entire USSR and eastern block in the 1980s.”
C’mon Banana, don’t be disingenuous, no one here is advocating communism. And no one is saying that healthcare should be “free”. We all know that it would be paid for via taxation.
And as far as I know, no one in western Europe, Canada, Japan, Taiwan or Singapore has to bribe their doctors.
Funny though, at my doctor’s office they have a sign that explains that payment is expected at the time of service. So the place where you have to crack your wallet open first before they”ll even see you is right here in the good ol’ USA.
It can bankrupt those that don’t have insurance. Health insurance is a misnomer. It’s your finances your insurance protects. Many people think that their $300 or $500 or $800 per month premium means unlimited all you can eat health care. Catastrophic plans will take care of insurance for most people.
Prices aren’t rising in my area.
Yet insurance premiums are….
Cut off benefits for all obesity-related illness and our health insurance crisis would disappear. We spend $150 billion (that’s BILLION) a year (a YEAR) on diabetes treatments alone.
Obesity is 100% preventable. Do the math.
From the WSJ - Negative Equity More Widespread Than Previously Though, Report Says:
“real estate listing and valuation service Zillow has been overhauling its methodology for determining how many homes there are “under water” …
Today, it rolls out its new negative equity report, which shows, among other things, that nearly 16 million U.S. homeowners, or 31.4% of all homeowners with a mortgage, were under water in 2012.”
It seems like for quite a while now, 11 million, or “around 25% of homeowners with a mortgage,” was the MSM’s favorite round figure to describe the number of underwater borrowers. Given all the recent articles about the housing recovery underway, and rising home prices all over the U.S., it is a bit of a mathematical puzzle how the number and the percent underwater could have increased by so much so quickly.
Try not to catch yourself a falling knife!
And in this situation, why isn’t the media questioning the policy of giving first time buyers, govt backed loans, with 0-3% down payments?
This just in; US Navy reported to use kittens as ballast in aircraft carriers.
“US Navy reported to use kittens as ballast in aircraft carriers”
This would only be an outrage if Bush was still in office, The One gets a free pass on this, just like the PATRIOT Act, drone warfare, NDAA, et cetera
Calm down conspiracy theorist. How many kittens do you think you need to use to ballast a 100,000 ton ship? Hint, an average kitten weighs less than 5 pounds. Another hint, one ton is 2000 pounds.
Or maybe….
buy kittens or be priced out forever?
How many kittens do you think you need to use to ballast a 100,000 ton ship? Hint, an average kitten weighs less than 5 pounds. Another hint, one ton is 2000 pounds.
*raises hand* 40 million kittens.
But 5 pounds is heavy for a kitten. Maybe 100 million kittens?
I thought they used them to polish the cannons.
Exactly. The reporter was probably confusing cleaning supplies for ballast. Nothing polishes the jamb on a water tight door or hatch like a kitten carcass.
I served in the US Navy from 1986-1993. USS Hector and USS Tarawa, both now decommissioned.
A long time ago I saw a book titled “101 uses for a dead cat”. My favorite one was an electric pencil sharpener. You guess where the pencil was inserted…
http://helpgov.files.wordpress.com/2011/02/cat-pencil-sharpener-c2a9-simon-bond.jpg
Yeah that was great.
http://www.amazon.com/101-Uses-Dead-Simon-Bond/dp/0517545160/ref=sr_1_1?s=books&ie=UTF8&qid=1337901219&sr=1-1
This just in; US Navy reported to use kittens as ballast in aircraft carriers.
Perhaps the feral cats in my neighborhood could serve their country this way.
Filed under: “Follow the peon crowds …”
[The Goldenman$ucks must be really "$martin'" after this debut debacle]
“There’s a lot of questioning about the IPO proce$$ in general and a sentiment that the real inve$tor is getting taken by the larger Wall $treet,” said Phil Pearlman, executive editor of StockTwits.
Facebook Investor Spending Month’s Salary Exposes Hype:
By Danielle Kucera and Douglas MacMillan - May 23, 2012 / Bloomberg
‘They Messed Up’
Michael McClafferty, a freshman finance major at Michigan State University, saw his “first big investment” turn into a $3,000 loss when he sold the shares at $35.
“I didn’t want to lose more,” McClafferty said. “I didn’t know what to do.”
The 19 year-old student estimates he spent $8,000 more than he wanted to while repeating orders that wouldn’t go through on the first day, and failing to cancel them because of the technical problems.
“I didn’t know what happened,” he said. “Then I was like, ‘they should be able to do something about it.’ They messed up pretty big from what I see, and it hurt more people than just me.”
Ryan Cefalu, who lives with his wife and two kids in Baton Rouge, Louisiana, saw in Facebook Inc. (FB)’s much-anticipated initial public offering a chance to buffer his retirement fund. His expectations fizzled along with the stock within the first minutes of trading.
“It’s disheartening to know that things get over-hyped,” Cefalu, a 34-year-old data-systems manager who spent about $4,000 on the stock, said in an interview. “That’s about a 12th of my annual income — so a month’s salary. I’m trying to do an on-my-own retirement kind of thing.”
LOOSERS!
more precise:
(-LOO$ER$!)
“I’m trying to do an on-my-own retirement kind of thing.”
How’s that “Galt” thing working for you, Cefalu?
Trouble in the gulch?
“I’m trying to do an on-my-own retirement kind of thing.”
And that can be pretty hard with today’s “job kind of thing”.
Especially if one has to pay for one’s own health coverage kind of thing.
spent about $4,000 on the stock, said in an interview. “That’s about a 12th of my annual income ….I’m trying to do an on-my-own retirement kind of thing.”
Retirement “kind of thing”. I like it because it’s more real in today’s world of no pensions and Soc Security on the chopping block. That is how it should be described in the ads for mutual funds and IRA’s.
“At Schwab we have many financial products to help prepare you for your retirement “kind of thing”.
Cefalu should be a columnist for SmartMoney. Ditech: People Are Smart!
If this guy thought that $4000 was going to bolster his retirement kind of thing, then his education kind of thing was lacking too.
Precisely, but he’s an adult (right?) and therefore responsible for doing stupid things. Anyone who buys a stock at 80 P/E is literally a moron or a greedy fool (itself being born of stupidity, really). If FB had Apple Computer’s P/E, it would be $9/share.
Ryan Cefalu is dumb, dumb, dumb. A piece of lawn furniture is smarter.
Gentlemen: Consider this part of your Continuing Education requirement
From MarketWatch - No real estate bubble pop expected in Canada:
“U.S. ratings agency Fitch seems to think housing prices here in Canada are too high, warning this week that Canadian banks’ credit portfolios are threatened with loans for sky-high housing and record consumer debt. The report said that six big Canadian banks have a combined C$730-billion in mortgage exposure and an additional C$182-billion in home-equity loan exposure, but adding that because of stricter banking laws, a subprime mortgage crisis here is unlikely.
What makes the big picture unclear is that a lot of new homeowners in Vancouver aren’t leveraged at all. Realtors tell me that a lot of their recent sales are to buyers fresh from China and flush with cash. A report in The Wall Street Journal a few months ago underlined how the huge flow in Chinese cash into the Vancouver real-estate market has caused home prices to soar. Those previously unheard-of $650,000 condos? Many are merely second homes for Chinese buyers in this increasingly Asian city. That ruins the house-hunting party for many Canadians, and there’s plenty of grumbling here about that.”
No real estate bubble pop was expected in the U.S., either. To my recollection, when it happened, nobody could have seen it coming.
“This is the strongest global economy I’ve seen in my business lifetime” - Henry Paulson, July 2007
“This is the strongest global economy (kind of thing) I’ve seen in my business lifetime” - Henry Paulson, July 2007
Especially the banks…
No real estate bubble pop was expected in the U.S., either. To my recollection, when it happened, nobody could have seen it coming.
LOL. Good one, nannerz.
So, over the next couple years we should expect many articles out of Canada to include the word “unexpectedly”?
NO ONE Expects the Spanish Inquisition!
Bring in!…. the soft cushions!
Now confess old woman!! CONFESS!
“Realtors tell me that a lot of their recent sales are to buyers fresh from China and flush with cash.”
I wonder if that will make them more likely to run for the exits at the first sign of real trouble?
Here is a story to make your skin crawl, about an NAR Super PAC.
Pro-development candidate gets big boost from Realtor super PAC
Alexandra Duszak, The Center for Public Integrity
Created: 05/23/2012 06:38:11 PM PDT
It’s challenging enough to knock off an entrenched member of Congress in a primary contest. But state Sen. Bob Dutton, R-Rancho Cucamonga, probably didn’t count on the fact that he would also be picking a fight with nearly a million Realtors.
Dutton is running against a fellow Republican, Rep. Gary Miller, a 14-year incumbent, and four Democrats in the newly redrawn 31st Congressional District in the June 5 primary. If no one receives a majority of votes, the top two finishers - no matter what party - will face off in November.
The National Association of Realtors political action committee and a super PAC funded by the trade association have spent more than $709,000 on advertising and direct mail supporting Miller, R-Brea.
“The amount of money being funneled into this primary from Washington, D.C., special interests on behalf of Miller is mind-boggling,” said Clint Lorimore, Dutton’s campaign manager, in an email.
…
Money is free speach man.
I love this line
Dutton is running against a fellow Republican, Rep. Gary Miller, a 14-year incumbent, and four Democrats in the newly redrawn 31st Congressional District in the June 5 primary. If no one receives a majority of votes, the top two finishers - no matter what party - will face off in November.
What kind of system is this, my guess is you have a lot of D’s running as R’s and R’s running as D’s to dilute the vote.
It depends. What happens if R#1 gets 45% of the vote, R#2 gets 44% and D#1 gets 11% of the vote?
You kick off someone off the ballot with 45% for someone with 11%?
Then again with “open primaries” many cities only have Ds running in the elections.
This is the first time we’ve tried this system. Interesting to see how it works out.
“Developers” make used car salesmen look like saints.
They are the epitome of privatizing the profits and socializing the losses.
That’s why my front window has been rocking a bumper sticker that says “Developers Go Build In Hell.”
How so?
I know a lot of developers who during the downturn lost everything (personal guarantees on loans sank them).
And with the assist was Uncle Sam, since once the banks got propped up, the banks were unwilling to negotiate workouts, and simply pushed the developers to BK.
I saw no “socialized losses” in the financial sense, only actual losses borne by developers.
This is a common political tactic. They run an unknown candidate even in a race that he doesn’t have a prayer to win. Three reasons:
1. The candidate gets political experience to help him win later on.
2. Free reliable polling data. You get a good handle on how many blues are really in the red district, or vice versa.
3. You drain the other party of money that they would have spent on a closer race elsewhere.
4. The candidate is campaigning just to sell his newest book and/or sign up names for a mailing list and/or solicit money.
Bond traders appear to be trying their best to price in a Grexit.
Market Pulse Archives
May 23, 2012, 1:07 p.m. EDT
U.S. sells 5-yr debt at record-low yield; bonds up
By Deborah Levine
NEW YORK (MarketWatch) — The Treasury Department sold $35 billion in 5-year notes 5_YEAR +3.91% on Wednesday at a yield of 0.758%, the lowest on record for an auction. Bidders offered to buy 2.99 times the amount of debt sold, compared an average of three times at the last four sales of 5-year notes, all for the same amount, according to CRT Capital Group. Indirect bidders, a group which includes foreign central banks, bought 42.6%, versus an average of 43.7% of recent auctions. Direct bidders, a group which includes domestic money managers, purchased another 6.5%, compared with 12.2% on average. After the auction, the broader bond market held onto gains. Yields on 10-year notes 10_YEAR +1.15% , which move inversely to prices, stayed down 6 basis points to 1.71%, near their lowest closing level ever.
In related news:
Market Pulse Archives
May 24, 2012, 10:00 a.m. EDT
30-year mortgage rate hits record low of 3.78%
By Ruth Mantell
WASHINGTON (MarketWatch) - Mortgage rates hit record lows in the week ending May 24, with the 30-year fixed-rate mortgage average ticking down to 3.78% from 3.79% in the prior week, Freddie Mac said Thursday in its weekly report. These data go back to 1971. The rate was 4.60% a year earlier. To obtain the latest 30-year rate, payment of an average 0.8 point was required, according to Freddie, a buyer of residential mortgages. The 15-year fixed-rate mortgage remained this past week at 3.04%, a record low set in the prior week. These data go back to 1991. Meanwhile, the average rate on the 5-year Treasury-indexed hybrid adjustable-rate mortgage held steady at 2.83%. The 1-year Treasury-indexed ARM declined to 2.75% from 2.78%.
And my wife says, “Do you think we should try to refinance to get a lower rate?”
I think to myself “What rock you living under?”
I actually say “We owe $150K on a house that will appraise for $110K, if we are lucky”.
And the $150K is non-recourse if it was purchase money, right Darrell? Was it?
Your refi might be recourse. But IANAL.
I’m pretty sure that AZ refis are recourse loans. Original purchase loans are non-recourse.
I have not worried about recourse or not as we have no intention of walking.
My understanding is that the amount of the original purchase/closing costs/points or other (related to purchase) is non-recourse, even if refi.
It is only the amount above that which becomes recourse.
So, let’s say be bought for $140K, but got a loan for $145K to cover points and closing costs. Then, 5 years later still owed $140K and refi-ed to $200K with $50K cash out and $10K closing costs.
Then $50K becomes recourse of the $200K.
What I do not know is if you pay for 10 years and have the balance back down to $150K, is the $50K still recourse, or have you “paid off” the amount you cashed-out and are down to the $150K non-recourse.
“I have not worried about recourse or not as we have no intention of walking. ”
Underwater and not walking? Hmmm. When I revealed that I had purchased in March, HBB practically had an office pool as to when I would walk. Y’all said I would walk the moment my house went a farthing underwater.
Yet Darrell’s statement gets a free pass.
[I'm just having fun today.]
So far as I am aware, Darrell did not recently bite the bullet and buy.
So yes, he gets a free pass.
Greece will leave the euro zone next year and the country’s new currency will “immediately fall by 60 percent,” according to Citi chief economist Willem Buiter.
Greek officials have repeatedly stressed that the country will be running out of cash by the end of June, after which it would be unable to make debt payments and pay civil wages and pensions. An election is scheduled for June 17 after inconclusive results of the May 6 polls meant a government could not be formed.
The Troika of international lenders - the European Union, the European Central Bank, and the International Monetary Fund - are waiting to see what government will result from the elections next month before disbursing more aid.
and just like when US congress voted on TARP the WS elite and leading gov officials spouted on about how the end of the world was coming if you don’t vote our way. My guess is a lot of this is directed at the Greek people. My guess is that those who are unemployed with no money are fine with the currency dropping, as are those in the tourism and manufacturing sectors. Those with money in Greek banks or fixed income not so much.
Holy Jeebus, just let it go already. Please. It’s worse than Chinese water torture.
Not yet - there are still some bank loans that need to be unloaded onto the taxpayers…
As long as the bad Greek loans are offloaded onto German and other EU taxpayers I’m fine.
Longest. Death scene. Ever.
A show worthy of the Greeks and their classical plays
A show worthy of the Greeks and their classical plays
Or pee wee herman at the end of ‘Buffy the Vampire Slayer’
There’s a great joke in there somewhere, Neuro!
From Bloomberg - Consumer Comfort In U.S. Hovered Near Four Month Low Last Week:
“Consumer confidence in the U.S. improved last week for the first time in a month as falling gasoline prices helped stem dismay over household finances.
Bigger gains in employment and wages will be needed to further spur consumer sentiment and spending, which accounts for about 70 percent of the economy.
One bright spot in the survey was the ninth consecutive positive reading among Americans earning more than $100,000. Sentiment for most other income categories worsened last week.“
“One bright spot in the survey was the ninth consecutive positive reading among Americans earning more than $100,000. Sentiment for most other income categories worsened last week”
Join the managerial class or die trying.
There’s a reason the Biz Schools are packed to the gills.
join the managerial class or die trying.
That’s method 1.
Method 2 is join the entrepreneurial class, get rich, or die trying.
Currently working both methods in parallel. One of them is bound to succeed…
I think method #1 is more popular. You don’t have to risk any personal assets trying to start a business. Heck, you can even get bonuses when the biz isn’t doing that well.
“One bright spot in the survey was the ninth consecutive positive reading among Americans earning more than $100,000.”
YA THINK?
Half of this country’s workers make less than $500/week.
How’s that consumer spending accounts for 70% of the economy kind of thing working out for The Recovery® so far?
Of course the $100,000+ crowd is more confident. They no longer have to compete for luxury goods with the $500/week crowd’s MEW and CC.
But it would seem they still have to compete with them for a $150k house.
i heard romney say yesteday he is going to get unemployment down to 6% his first year in office.
What’s the plan: Hire more government contractors?
Or is it just one of those “trust me, I have a plan to get this done” type of announcements?
Kinda like obama care?
Probably more like Haliburton.
Kinda like obama care?
No, Romney never takes credit for its creation anymore.
Success has a thousand fathers; failure is an orphan.
“Hire more government contractors?”
Got a recruiting call from another one this week. Invisible hand of the free market, bootstraps, rugged individualist, John Galt, et cetera. Paid for with your tax dollars of course!
“What’s the plan”
NGDP targeting coming to a theatre near you.
inflation rate targeting - print a whole ton of money to maintain a certain inflation rate.
nominal GDP targeting - print a crap ton even more money to maintin a certain GDP growth rate.
(he didn’t advocate this…it’s just whats gonna happen)
Targeting inflation isn’t going to improve unemployment unless they spend that money creating jobs. If they had a way to make every dollar in existance become two dollars unemployment would sky rocket. Food and fuel would rise and the service based economy would collapse. Manufacturing might increase if exports increased but of course our trading partners would do the same thing so maybe not.
Did he say how?
Rhetorical question. Of course he didn’t.
I bet I could glom a few talking points together and come up with his plan….
Get government out of the way, deregulation, tax cuts for the highest wage earners, lower the rate and broaden the base, reign in EPA and fair labor relations board, unshackle business, blah, blah, blah…
Loved the post yesterday mentioning how they’re called job “creators” to make them sound more God-like
So the answer is to grow government even bigger, more regulations and raise taxes?
The problem is the private sector won’t create enough jobs. Technology has destroyed jobs in manufacturing distribution etc. First the Big box stores destroyed mom and pop, now the internet is destroying big box stores. Just think how many people were involved in distributing movies, then netflix reduced this # by 90% or so and now internet distribution should reduce it further. Manufacturing jobs are just not there globally. Canon was talking about going to 100% robotic camera manufacturing. The few manufacturing jobs that are left are often shipped to slave labor countries. The credit bubble artificially increased demand but that is crashing down and technology has marched on. At some point governments around the world are going to have to create jobs, by subsidizing services, and rebuilding infrastructure.
“The problem is the private sector won’t create enough jobs.”
And this isn’t just an American problem. Some countries, like China, resort to all sorts of inefficiencies to provide as much employment as possible. For example, my boss was in China last week. He mentioned how parking lots and garages there lack the automated ticket dispensers that you see in the US. The check in booths are all manned. And even with this approach, China is struggling to provide full employment.
200 million unemployed worldwide:
http://www.globalissues.org/news/2011/10/07/11447
And automation is only going to make it make it much worse.
Everybody needs a butler and a maid.
Did he say how?
Hey In Co, did you see the recent Bloomberg article about HP preparing to lay off 27,000? Quite a few techies going to get hurt…
Question to the board: What are the top 3 reasons US employers don’t want to hire additional US workers/expand US businesses?
Here’s my take, your’s may be different:
1. Lack of demand for product/service (it’s the economy…)
2. US labor costs too high in comparison to other trade partners
3. Too much government regulation
Here’s why I think this:
1. Should be apparent. Fix the economy and consumer spending will increase. Increase consumer spending and businesses will increase spending to meet demand.
2. I have an underfunded startup. I have to “pay” my US co-founders in equity as I can’t afford to pay going rates for US engineers out of my pocket. To supplement our founding team, I am in the process of hiring an overseas contract firm for programming labor. The difference in cost: $10-15/hr vs $75-100/hr. No choice for me until we have deep-pocketed investors throw some cash our way so we can pay US labor rates. Mine is just one example of wage disparity.
3. I am holding off incorporating as long as possible because of the cost to do so. Between the legal and government fees to incorporate, tax compliance and reporting, the cost to unwind if the venture fails, the cost of compliance for HR, health benefits, etc. Bottom line, it costs a bit of money to start a business, and time and money to run it that have nothing to do with the business we’re in. Again, this is being done on a shoestring, so my specific problems don’t apply to larger firms, though I can see how having to hire additional staff or services to comply with regulation would cut into your bottom line regardless of size…
HP’s pain is self inflicted by its incompetent management. Silly Valley is full of tech employers who are hiring like gang busters.
Hopefully most US based HP employees let go will be in Silicon Valley, as they should have no trouble finding a new job there. Heck, even in Denver my Silly Valley based employer is having a hard time finding people to hire.
I have heard on the news that many let go will be those acquired with EDS last year.
HP also has 340k employees worldwide…I wonder what countries the layoffs will be in.
1. allow housing to crash so its cost to u.s. worksers will be less…making them more competitive with foreign workers.
2. see 1.
3. i think there could be more regulations in some areas and less in others. the “all or none” meme suggested by both political parties is irrational.
“allow housing to crash so its cost to u.s. worksers will be less”
Then they won’t be buried under enormous debt. How do you expect Obama’s banker friends to make a living? They have to keep the price of everything high to force working and middle class Americans into a lifetime of debt misery.
1. Unless raw material and energy prices crash, having housing stay at low prices for any extended period is a dream. To get that, we need a completely different monetary policy, which is an extreme dream given the current debt load of the US.
Perhaps by January of 2014 so few people will be eligible for unemployment that his number will be reached no matter who is in office.
That isn’t how they measure unemployment.
I thought once you used up your benefits you were no longer counted as unemployed? Or is the problem that once you’ve used up your benefits you no longer have a reason to report that you’re still looking?
No. There are two unemployment numbers. One from a business survey. One from a household survey. The only number that is widely reported that is from actual unemployment insurance numbers is the number of new claims.
OK, so are U3 and U6 BOTH determined from those surveys?
i also thought that if i were unemployed but were not looking for a job…i would not be counted as part of the unemployed.
Correct, that’s what the surveyors ask in the household survey.
i heard romney say yesteday he is going to get unemployment down to 6% his first year in office.
By building and filling more prisons?
Starting a war with Iran would put more people to work.
we could revamp the the tax code to favor exports.
but that would create a trade war with the big “C”…and we sure as heck can’t have that.
At $1,000,000 a year to get a pair of boots on the ground in the middle east, I can think of more cost effective (and beneficial) ways to spend that kind of stim money.
I read a column recently in which the writer compared Romney’s unemployment pledge to Richard Nixon’s in 1968. During the campaign that year he claimed that he had a secret plan to end the war in Vietnam.
Teach the unfortunates how to speak English would be a good start.
Once Americans master the English language, then job training becomes pretty cost effective.
Train? Train for what? The bulk of the jobs are low paid, P/T, unskilled Lucky Jobs.
Face it DJ
You speak English
You have skills
And you still can’t find a job.
Well, it would create a lot of jobs for ESL teachers.
I’m of the mind that our deejay should find some primary skill to pay the bills. Do the deejaying on the side.
Because unless you’re one of those name-brand people who can pack a dance floor and are internationally renowned for this skill, there’s no work in the field.
The problem these days is that the “skills” that can land you a middle class paycheck increasingly require an above average IQ. It’s not like you can attend some trade school for 4-6 months and land a job that pays 60K+. If it was that easy the kids wouldn’t be lining up to join the military.
“Teach the unfortunates how to speak English would be a good start.”
Considering your point, you might want to reword that.
This is actually one of his better efforts, Pete. Don’t spoil the fun.
Love you guyz.
It seems like at least half the people I have to contact daily uses Ebonics as their first language, yes even the white folks. And what’s so sad, is they were born in America,.
Hi. I still wonder (and I don’t want one) why more people don’t work as servants? I think we will know when the job market /ecomony really hits bottom when the unemployed / those who no longer get unemployement benefits work as servants. Back during the major immigration periods think of the Irish in the 1800s lots of very middle class people had servants. Polly and Muggy and others should very easily be able to afford a servant.
Why don’t they?
Because it really doesn’t pay worth a damn and most people really don’t want strangers in their house. It’s not a very safe idea in this day and age. Too much potential for abuse by both sides.
Why don’t they?
Because it really doesn’t pay worth a damn and most people really don’t want strangers in their house. It’s not a very safe idea in this day and age. Too much potential for abuse by both sides.
It’s called “nannying” and many many people with kids hire women to live with them or be in their homes all day long.
Folks who need 2 incomes to keep up (and who do not have free childcare from grandma) will hire a nanny.
Not all of those people will father a child with their help like Ah-nold.
Hi. I still wonder (and I don’t want one) why more people don’t work as servants?
Because there aren’t enough rich people who can afford to pay them minimum wage?
Back during the major immigration periods think of the Irish in the 1800s lots of very middle class people had servants.
Again, there was no minimum wage back then.
Polly and Muggy and others should very easily be able to afford a servant.
Surely you jest. With payroll tax it would cost close to $400 a week, and you’d still only get 40 hours a week out of the servant.
“Polly and Muggy and others should very easily be able to afford a servant.”
Lol
You must be one of those trustafarians.
BTW, Anon in DC, I see what you’re doing here. Very sneaky trying to make us feds look like one percenters. Let’s see how much money you had in 2006, when I was making $37k.
Comment by Anon in DC
2006-03-18 19:48:27
Joe,
I have been out of school and working ten years. I have $250K saved for a place. Never bought ’cause I have moved 3 times for work and the markets been high. I make $80K a year - good $ but not astronomical. It’s not easy to save for a house or other goal but can be done. Also for a couple it is even easier to save if there are two income. Patience.
“You must be one of those trustafarians.”
I had a suite at the Bellagio for one night and it came with a limo driver. There I was, 23 years old, with a driver for the day.
That was as close as I’ll ever come to having a servant.
Some dude that knows my property manager mows the lawn. Does that count?
Speaking as someone who came from a family where there were servants for some of the older relatives, there’s a limit to how long they’ll work.
I can recall my great aunt’s maid being very insistent on this point. When she was done working, she was DONE.
A servant to do what? Sit around my apartment all day? I have a one bedroom apartment with one bathroom. I am gone approximately 10 hours a day.
If I wanted the equivalent of a servant (I don’t) I would order groceries on-line and have them delivered. I would have a cleaning service come in once a week and…ummm…I can’t think of anything else. Maybe have someone deliver ready made meals instead of the groceries? Public transportation is my “driver.” I don’t have kids. The other servant job that some people still need is a dog walker. Servant work is done piecemeal now, not by a dedicated person or persons. And central heat and indoor plumbing eliminated a lot of what they used to do. Can you imagine how much dirtier the inside of houses were when you had wood or coal fires going all the time?
indeed… and why did the servant industry wither in the first place? the prevalence of egalitarian philosophy in the 20th century? uh uh. cheap refrigerators, vacuum cleaners, microwave ovens, prepared food, paved roads and affordable vehicles, yada yada. when and if those consumer labor saving devices become expensive relative to cheap labor, well, yeah, maybe you’ll see the return of household help. there will always be a segment of the population that just plain enjoys ordering other people around, but as an economic decision, no one, even the well off, will bother with human help unless you are getting a real “chef”, not a mere “cook”.
Harassing people for money on old debt purchased on the cheap is a growth industry in this country with employment in debt collection boiler shops close to 750000 a couple of year ago when I last checked. In many cases they are actually toothless since often the statute of limitations for suing on the debt has expired before they buy it. I’ve had collection agencies come after me for old debt in situations where I made a decision not to pay something like an early cancellation charge for a services contract, etc. and in many cases the debt keeps getting sold cheaper and cheaper to a descending sequence of different agencies who have no basis to collect other than bothering people. You’re better off hanging up without a word when people like that call, or if you like you can get their mailing address for you to “mail them a check” and send the certified mail cease and desist letter invoking your rights under Federal Law to require them to terminate all efforts to contact you…
Not saying anything is a good strategy. Another one to try is to ask them to send you a detailed letter explaining the basis of the debt they think you owe. Don’t acknowledge it, but say the debt that *they* think you owe. This is especially interesting with medical debt, as the collector may not have the right (under HIPAA) to have received any of your personal medical information.
This is especially interesting with medical debt, as the collector may not have the right (under HIPAA) to have received any of your personal medical information.”
hey you’re right !! I never thought of that
It would depend on the exact wording of the waiver you signed when you went to the doc, but since they “sell” the debt for it to be collected, it likely would not be covered as information they have to share to get the bill collected. It isn’t their bill once they sell it. I think that a narrowly worded one would only cover their own billing department.
I haven’t heard this mentioned in public, so I may be totally wrong. It seems sort of obvious to me, but that means I would expect it to have been mentioned in various articles. Then again, a person who invoked this right and then didn’t pay the bill isn’t anywhere near as interesting as a person who is paying $20K for an emergency room visit for stitches and will be paying it for a dozen years.
“…and send the certified mail cease and desist letter invoking your rights under Federal Law to require them to terminate all efforts to contact you…”
You would be surprised at how many collections agencies AND lawyers don’t know of this.
I posted a video link yesterday of Cenk Uygur and Karl Denninger lamenting how quickly the Tea Party freshmen had been coopted by the banks.
And then I realized something: Winning state or national political office is an extremely arduous process. No wonder elected officials hold on so tightly to their prize. The journey is arduous and the prize is very sweet.
On top of that, our current system has warped to be utterly beholden to big money. It makes perfect sense that anyone other than a saint is going to be co-opted by big money.
The fact that the Republican Tea Party freshmen were so quickly co-opted made me realize that humans will be humans. And that we need a system that is built around the realities of human nature.
If our system needs altruistic, ascetic saints populating it in order to function correctly… well, it’s not going to function correctly.
Money in the system has been growing for a long time now. The Citizens United case was just the icing on the cake, de facto acknowledgement of the corruption of the system.
I don’t see the system being able to change this, or even being motivated to change this, from inside DC. The journey to elected office is too arduous and the prize is too sweet. The only way to make politicians more responsive to citizens versus big money, will have to come from outside DC.
December 16, 2007 (anniversary of Boston Tea Party) was the date of Ron Paul’s “money bomb” which was to that date the largest single day fundraising event.
Since Rick Santelli’s televised CBOT floor rant in 2009, the “Tea Party” has been astroturfed, sanitized, neutered to make its platform less threatening to the 1%ers.
Instead of being opposed to government spending to bail out the criminal cartel banksters, now the “Tea Party” opposes government spending that benefits seniors and poor people (especially black and brown poor people) while working as the fluffers of the 1%.
And voters that are blind to this hijacking of the “Tea Party” movement yet continue to support it shall deservedly be called teabaggers, because they are nothing but fluffers now.
“And that we need a system that is built around the realities of human nature.”
I believe this has been Alpha’s point all along, and I agree.
Besides the fact that they are cherry picking, I would agree you’ve got to have some serious statesman like will power to resist the money in Washington. I see both parties sticking it to us from all sides and not even trying to hide it any longer. Which party has come out against the reflation of the housing bubble?
“I would agree you’ve got to have some serious statesman like will power to resist the money in Washington.”
… hear hear….
…. This is the #1 cause.
The Few, the (too) Proud, the Bailed Out…
U.S. banking industry posts highest quarterly profit since 2007
http://www.latimes.com/business/money/la-fi-mo-banks-profit-20120524,0,3994281.story
WASHINGTON — The U.S. banking industry posted a $35.3-billion profit in the first quarter of the year, its best performance since 2007….The industry continued to recover from the financial crisis and deep recession, ….The number of so-called problem banks — those at risk of failure — also declined to 772 in the first quarter, from 813 in the previous quarter, the lowest level since the end of 2009, the FDIC said.
“The condition of the industry continues to gradually improve,….”Insured institutions have made steady progress in shedding bad loans, bolstering net worth and increasing profitability.”
But the news was not all good. Banks lent slightly less money in the first quarter, $56.3 billion, down 0.8% from the previous quarter,….”The overall decline in loan balances is disappointing after we saw three quarters of growth last year,” he said. “But we should be cautious in drawing conclusions from just one quarter.”
The first-quarter profit for FDIC-insured banks was up $6.6 billion, or 23%, from a year earlier and marked the 11th straight quarter that profits have shown a year-over-year increase, the FDIC said.
The profits were driven in large part by banks setting aside less money to cover bad loans. Banks set aside $14.3 billion in so-called loan-loss provisions, nearly one-third less than a year ago.
Private the profits, socialize the losses… because most people are too stupid to understand it.
so the answer is to grow the size of government even larger, more regulations and more taxes???
so the answer is to grow the size of government even larger, more regulations and more taxes???
How else can we pay for our beloved military machine? Those F-35s aren’t free, you know? The total cost per fighter jet is going to be $625 million. As in one fighter.
That’s a lot of food stamps.
Oh I would much rather have the jet than people on food stamps Even if the jets mean government largese at least the jet people are earning the money.
at least the jet people are earning the money
Then why not have people dig ditches and rebury them? Can we really afford to buy $600 million dollar jets when we have to borrow half the money to pay for them? Why is it OK to spend borrowed money on that?
I would argue that even the unemployed on food stamps are of greater service to our country than people who build and operate its war machinery.
More regulations and more taxes?
Why would we do that when deregulation and less taxes have worked so well so far?
The latest real estate snooze from Tucson’s leading daily fishwrap:
Despite more buyers, home values still decline
Money quote:
The lenders were stung when the appraisals done at the market’s peak proved to be much higher than they could recoup when the buyers defaulted and the homes were sold in foreclosure.
And that makes a big difference in Arizona, where homebuyers are generally not liable for the difference between what the home brought at auction and the amount outstanding on the mortgage.
Andrew Leventis, principal economist for the Federal Housing Finance Agency, said he also believes the figures may represent “appraisal conservatism.”
But Leventis said those lower numbers on the appraisal side of the equation also may also reflect that a glut of appraisals from distressed neighborhoods will bring down the overall average.
“We may be seeing appraisals from parts of Arizona that may have suffered more, and are just showing more weakness than the rest of the market,” Leventis said.
Even with the boost in sales prices, the Arizona market still has a long way to go to get back to what it was before the housing bubble burst. The current sales prices are still only slightly more than half of what they were five years ago.
“So the answer is to grow government even bigger, more regulations and raise taxes?”
Einstein said that insanity is doing the same thing over and over expecting a different result. We’re told that the path to prosperity for all is the path of free trade, deregulation, and lower top marginal tax rates.
That path has been wonderful for the top 1%, and even the top 10%. However, for the 90%, that path has not worked out so well. So, we’re told that the problem is that we have not gone far enough in that direction. What we need is even freer trade, more deregulation, and even lower taxes in the insanely rich.
Because, as you know, deficits do not matter, whether they be federal spending, international trade, or even domestic flow of funds from poor to rich via unsustainable debt expansion.
Or… perhaps…. Perhaps we were wrong. Perhaps free trade, deregulation, and widening wealth disparity made possible by low top marginal tax rates is not the path to prosperity for all, but is rather, the road to societal bifurcation into rich and poor.
Since that bifurcation has been the result, I ask, which is more likely? Are we on the correct path that will lead to prosperity for all, and just have not gone far enough? Or is it more likely that we are on the path that leads to societal bifurcation into rich and poor and destruction of the middle class.
Looking at the results of the last 50 years, I have to say, we’re not on the best path that will lead to optimal prosperity for the masses. I believe that the problem is not one of not having gone far enough. It is my opinion that we are on the wrong path. We are on the path that leads to middle class destruction and societal bifurcation into rich and poor.
But what do I know? I use data to form opinions rather than political dogma wrapped about vested self-interest.
nixon never should’ve went to china.
nixon never should’ve went to china.
+1 Nixon should have pulled-out in 1913.
“That’s about a 12th of my annual income ….I’m trying to do an on-my-own retirement kind of thing.”
Wonder what “I’m trying to do an on-my-own health care kind of thing” will look like? Surgery at home anyone?
When the ex’s hand was cut by a glass that broke during dish washing, that’s what we did.
Hydrogren peroxide and butterfly closures. Constant, regular disinfection, fresh closures. Fortunately it turned out OK, no infection. Barely a scar, certainly no worse than had a doctor stitched it up. But I don’t recommend it.
To quote George W Bush: How uniquely American
In 2005, I accidentally poked a finger. The culprit was one of the agave plants in my front yard.
Darn if that finger didn’t swell up to twice its normal size. Then, as now, I wasn’t exactly in the mood to shell out several hundred dollars of that high-deductible money to see a doctor.
So, I determined that the swelling wasn’t caused by anything other than fluid. Time for Slim to lance the finger.
The worst part of this process wasn’t the pain. It was the gross-out factor. I just couldn’t keep at this lancing thing for very long. So, I had to spread the lancing sessions out over several days.
Finally, one evening while I was having dinner, the finger let loose with a flood of fluid. I don’t know what in my consuming of a meal brought that about. Maybe I held the utensils in a certain way, and that was enough.
Fortunately, I had no dinner guests that night. My finger swelling all but disappeared a few hours later.
So, here’s another member of the HBB DIY Medical Corps.
So many things do just take care of the themselves in time. Americans are such babies running to the doctor with every little thing. But such health care is “right” according to those on the left. I am supposed to pay more taxes for some unwed teenager with three kids by three different guys to take said kids to the doctor for every cold or bloody nose or spliter.
Why is it again that Democrats who want to provide such services don’t just start a charity or pay extra taxes like Warrent Buffet and Obummer want? For some reason Buffet and Obummer have yet to send in any extra taxes. Nor have most of the Democrats who believe in health care rights sent in extra money. You would think the treasury would just be overflowing with extra funds. Apprently Buffet and Obummer really want to do charity. But on someone else’s dime.
So many things do just take care of the themselves in time. Americans are such babies running to the doctor with every little thing.
Actually, we’re pretty tough nuts compared to the Japanese. They go to the doctor for every little ache and pain. And I do mean e-v-e-r-y.
Medical marijuanna. Jack Daniels. Legal assisted suicide.
Medical marijuanna. Jack Daniels. Legal assisted suicide.
Way way too much money
Faith based medicine - That’s where the real savings are. 5 bucks for a prayer cirlce. Plus it weeds out all the non believers.
Jack Daniels.
I gotta go out drinking Tennessee piss-water? Hell, no! [shoots squirrel rifle into the air]
Eff all that. My attitude is that ultimately, the money I have is ultimately meant for taking care of the vessel that I’m meandering around the planet in (the body). I don’t buy too many non-necessities. However, if it came down to spending a good chunk of change on a necessary procedure to keep the ship in working order, I wouldn’t bat an eye.
No idea why that posted down here …
I recall talk on this board of Americans seeking to work overseas.
Where I work, I see the opposite. Here is my anecdote:
We had a manager in our Beijing office who just quit to take a job in Silly Valley. He’s Chinese, as in from over there, not an ABC (American Born Chinese). He has worked in the US before.
His reasons for moving to the states?
Healthier environment to raise his family
Better pay
and this one was unexpected:
He wants his children to attend American schools
He probable means, Stanford.
You don’t have to live in the USA to attend Stanford.
I meant UCI. In state tuition.
He has more than one kid?
Just a little RE news from the ground here in the land of fruits and nuts.
Offer #4 rejected, although this one was different.
The first 3 offers we put in were for larger houses in the 500-600K range. Outbid on all by all cash, all went for 50K+ over asking within a week with multiple offers.
We found a tiny house with killer views that did not show well. Seller still lives there and just filed for bankruptcy and is in financial straits.
List was 65K over the only comp (identical house 2 doors down that sold last month). 3 offers all 60-65K under asking. Seller rejected them all.
Too bad, cuz at the right price (comps) PITI on this house would be $400 month LESS than our current rent. I would be happy to live in this house for 20+ years.
What I am noticing is that larger SFH that can be divided up into small units/bedrooms (Chinese boarding house) sell quickly. Cheaper fixer-uppers sell fast, too. Lotta flipping going on.
But a smaller house that no one can flip or subdivide or make a killing on rent will just sit and not sell until the price is low enough for non-investors.
We’ll see if the seller comes to her senses. I am almost tempted to put in a higher offer, knowing that it will not appraise. Or, I guess just wait and if we still haven’t found anything in a few months, make another offer at the same price.
the amount of risk banks are taking lending money to homebuilders in the 22180 zip code is bind boggling.
is DC and northern va the last bastion of the bubble economy?
Bubble? That’s just business as usual there.
Google the construction projects going on in DC right now.
is DC and northern va the last bastion of the bubble economy?
No, San Francisco is going strong with some neighborhoods back to bubble prices. Not all nabes, though. Many parts of the city are at about 2002 levels.
I’m puttin’ in for two different jobs. Both would be promotions. It’s that musical chairs time of year in school districts.
Fingers and toes crossed, locked, and loaded. Best of luck to you!
I can’t decide on a third — it would be AP at a reassignment school. When I was younger and childless I would have jumped in, but with kiddos at home it feels short-sighted.
Does anyone know someone in the homebuilding industry in Arizona?
I just spoke with a guy who made some pretty impressive comments about the speed at which lot prices are rising in the greater Phoenix market, and I’m trying to get a sense as to whether it’s BS, or reality. And no, he isn’t a broker, and didn’t have anything to sell…
Greater Phoenix? Where they have to truck in water?
We have water. If people would cut down on the Bermuda Grass lawns, lakes and waterfalls we would be doing much better. If TSHTF out here, not sure how we will get by without electricity for more than a day or two during the 5 to 6 hot months. That creepy feeling of unsustainability lurks in the back of my mind quite often, if Mrs. Nickpapageorgio and I move elsewhere that will be one of the major factors.
I remember reading that the grass is a far bigger water user than lakes…the surface area where water can evaporate is much greater for the grass. Think both sides of a blade of grass multiplied by hundreds of blades in a single square foot versus simply a flat square foot of water.
How’s this for more specificity: within a 15 minute drive of any of the major freeway loops that surround the urban core of Phoenix.
“Pinellas property values fall, but not as dramatically as feared”
http://www.tampabay.com/news/localgovernment/pinellas-property-values-fall-but-not-as-dramatically-as-feared/1231918
Hi everyone
I’m noticing housing prices jumping $10K-$40K after they are listed. Total micro bubble (selling season premium) or is this round two? I am totally pissed off. These low interest rates are old news. Why is there such madness? (east Ventura County-So Ca)
Any predictions as to the fall maket?
For Ventura County? Lack of supply combined with sentiment change.
We’ve had massive negative sentiment for years which reduced demand.
If there is belief that prices won’t go down much more (if at all), and you add to that a little bit of fear of prices rising and low interest rates, and sentiment (and demand) changes on a dime. When combined with low supply…price increases…
I had a chat with our buyer’s broker (30 yrs in the biz/great at structural stuff) and he thinks the inventory issue is really about the live frees. 12M IIRC, concentrated in bubble states. The REO’s already done are actually secondary in his opinion.
I’m assuming that living free=delinquent or in foreclosure.
If so, how does anyone get to 12 million people living free?
Total number of non-current (not paying or in the foreclosure process) is a bit less than half that at about 11% of all mortgages in the US (about 50 million mortgages), and there are fewer and fewer of those non-current borrowers in AZ and CA since AZ and CA are non-judicial states, and working through their issues.
REOs are secondary in my opinion also. I think that the non-current loans outnumber REOs by 3-4 to one or better.
http://www.foreclosureradar.com/california/ventura-county-foreclosures
To check out some information on the city in which you are seeing the changes. I generally track the amount of REO from this, as well as how much REO is going back to the bank.
I think what happens in the fall will depend on whether the trends begin to reverse themselves. If the trends continue in the current direction, there will be less and less distressed sales (reducing supply).
Have heard a few co-workers mentioning the word bubble and expressing fear of buying right now. No matter how easy it is to buy a loan (house), the fear of being stuck has to present in the minds of many. Will there be a continuous stream of willing buyers at higher and higher prices? Time will tell.
I think the metrics that matter are the same ones that we all looked at during the peak:
Price/Rent and Price/Income ratios. If those get too far out of historic norms for the markets in which you are looking, then I think it’s wise to be very careful. If they are out of whack now, then be careful now.
I’m frankly most concerned about a re-emergence of excessive prices in early recovery markets (non-judicial states).
How will the Fed react to excessive home price inflation in some markets (non-judicial) when others are still working through their excess distressed inventory (judicial)? My guess is that they won’t tighten until national numbers are showing excessive inflation, which could be too late for the first recovering markets.
Is it getting crazy in Phoenix? As I noted above, I spoke with a guy today who was talking about land values skyrocketing, and builders selling out quickly of new subdivisions.
Frankly, I’m waiting to see that show up in the numbers, but that will be a few months…is this what you are hearing from your co-workers?
I have witnessed it myself, not sure about the land skyrocketing. Any builder that was lucky enough to have an active subdivision going this year hit the jackpot. I am sure the builders are off to the races now trying to acquire land and get the sales office opened.
The problem with phoenix is that you have to drive everywhere, gas is still high, unemployment is still on the high side and other costs of living have increased dramatically. The building is happening in the abandoned developments from 2008 and they are way out from the work centers. My 21 years of experience in the valley tells me that the money has already been made and this could turn the other way on the fortune seekers in a heartbeat. But, I am a very patient bubble sitter, so take my words with a grain of salt.
Then the story hangs together. Builders hitting the jackpot=land values going up quickly.
The reason the building is happening at the abandoned developments first is that those lots were able to be acquired by builders at less than the finishing costs (ie. bought at distressed prices).
It will be interesting to see what happens when the finished lots have been built upon, and people need to start grading new lots…part of the discussion yesterday was that some builders are buying raw land in Gilbert/Chandler again…the earthmovers may be closer to starting up again than we think (or at least sooner than I thought).
I generally expected a quick jump up on prices simply due to land economics (cost of finishing new lots vs. depressed values of homes keeping supply low until prices rise), the stories I’m hearing imply prices moving faster than I thought.
fall market?
Realtors Are Swindlers®
Sell, sell, sell!! HURRY, RUN FOR THE GREXIT!!!
ft dot com
May 24, 2012 9:29 pm
Big European funds dump euro assets
By David Oakley and Alice Ross in London
Some of Europe’s biggest fund managers have confirmed they are dumping euro assets amid rising fears over a possible Greek exit from the eurozone and single currency turmoil.
The euro’s sudden fall this month caught many investors by surprise. Europe’s single currency has lost 5 per cent in the past three weeks after barely moving against the US dollar for much of the year. On Thursday, the euro hit a fresh 22-month low at $1.2514.
Amundi, Europe’s second-biggest private fund manager, and Threadneedle Investments, the big UK manager, have cut their exposure to the euro in recent days as frustration grows with political leaders’ efforts to resolve the crisis.
US-based Merk Investments, the currency specialists, has cut all of its euro holdings in its flagship fund this month.
“We sold our last euro on May 15,” said Axel Merk, chief investment officer. “We’re concerned about how dysfunctional the process is. No one is there to talk to in Greece.”
Amundi, which manages money for some of the continent’s biggest pension funds and companies, said the risk of the crisis spreading to the bigger economies of Spain and Italy was growing because policy makers had failed to convince investors it had built a sufficient firewall.
…
How’s that old decoupling theory holding up these daze?
ECONOMY
Updated May 24, 2012, 7:26 p.m. ET
New Signs of Global Slowdown
Weak Reports in U.S., Europe and China Suggest Economies Are Slipping in Sync
By JON HILSENRATH and JOSHUA MITCHELL
New signs of a global slowdown are darkening the economic outlook.
On Thursday, the U.S. reported that businesses were slowing their orders of computers, aircraft, machinery and other long-lasting goods. Measures of business sentiment in Europe slipped, and reports from purchasing managers at manufacturers around the globe turned down. Among them, China, the world’s second-largest economy, registered its seventh straight drop in an important manufacturing index.
With the latest reports, a new economic threat is emerging: That activity is slowing in sync around the globe and not just in a few markets with their own isolated problems. Europe, struggling with the risk of a Greek pullout from the euro area and broader fiscal problems, is the epicenter of global economic concerns right now. But reports of economic trouble are turning up in China, India, South Africa, Brazil and elsewhere.
When the global economy is performing well, synchronized growth reinforces itself and spreads prosperity wide and far. But slowdowns can become interconnected and self-reinforcing, and the global economy has been plagued by them since the financial crisis of 2008.
Protesters opposed to Spanish labor reforms scuffle with police on Thursday in Madrid.
The Organization for Economic Cooperation and Development earlier this week cut its 2012 forecast for growth in developed economies. The International Monetary Fund sees the global economy growing more slowly than 2011’s 3.9% rate.
Economic weakening, in turn, means investors are taking it on the chin. The MSCI World Index for stocks, which tracks markets around the globe, is down more than 9% since mid-March. Crude oil prices, another proxy for global demand, are down 15% so far this month.
Taken together, this could lead to new pressure on policy makers to respond with growth-boosting measures. The Federal Reserve so far has been noncommittal about whether it would launch any new measures to stimulate the U.S. economy. European officials are under intense pressure to back away from austerity measures, and the Chinese are looking for new ways to boost growth.
…