Weekend Topic Sugestions
Please post topic ideas here!
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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’cause everyone wants to live there…
Hoboken Homes Gone in 60 Minutes Signal U.S. Recovery: Mortgages
For the latest sign of a U.S. housing rebound, Toll Brothers Inc. Chief Executive Officer Douglas Yearley points to Hoboken, New Jersey: A couple torn between two condos last month at the sales office for its Hudson Tea complex decided to think about it over lunch. When they returned an hour later, both units were gone.
“People feel like now is the time to buy and they aren’t isolated to one building in Hoboken,” Yearley said in a May 23 conference call with analysts after the Horsham, Pennsylvania- based luxury homebuilder reported that quarterly orders for new homes surged 47 percent. “Confidence is up. The interest rates are there and they’ve been waiting so long to move on with their lives that they came out this spring.”
http://finance.yahoo.com/news/hoboken-homes-gone-60-minutes-040001907.html;_ylt=ApDyKKJ_Vjp773NccEEZa.miuYdG;_ylu=X3oDMTQ0dDNrNmVyBG1pdANGaW5hbmNlIEZQIFRvcCBTdG9yeSBSaWdodARwa2cDMWZhMWU5N2EtZDNkZS0zMDExLWI0M2MtOWZmZWE3M2E2OWQ5BHBvcwM2BHNlYwN0b3Bfc3RvcnkEdmVyAzBhZDIzZWMwLWE2NTQtMTFlMS05YWU3LTYxMjljYzFiNTgzMw–;_ylg=X3oDMTFpNzk0NjhtBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25z;_ylv=3
Tea building is awesome. I looked at a rental in there back in 2001.
So many angles with this I don’t know where to start.
The three directors who oversee risk at JPMorgan Chase & Co. (JPM) include a museum head who sat on American International Group Inc.’s governance committee in 2008, the grandson of a billionaire and the chief executive officer of a company that makes flight controls and work boots.
http://finance.yahoo.com/news/jpmorgan-gave-risk-oversight-museum-000100890.html
Those directors need immediate tax cuts and less regulation. Clearly.
Yours Truly has served a one-year term on a corporate board. I had to take my father’s place after he was no longer of sound enough mind to serve.
I’m pleased to report that this company’s board was nothing like JPMorgan Chase & Co. The people were very knowledgeable about the company’s operations and its industry. I don’t think they would have let substantial risks slide the way JPM’s board members did.
I might add that the board I served on was for a manufacturer, and they take risk management very seriously. They have to. Because if safety isn’t given the utmost attention, all sorts of bad things could happen. And those bad things would announce themselves by going boom.
In short, there are boards that are on the ball. And, alas, in the case of JPM, there are boards that are asleep at the wheel.
“in the case of JPM, there are boards that are asleep at the wheel.”
Yeah, they take the sleeping pills provided by “management”, deliberately, so they can keep their lucrative gig as a board member.
And to think I wasn’t paid one red cent for my board service. However, you know me. If some other reputable company came along, offered me a board seat that included a stipend, I’d definitely consider it.
What are the odds at this point of a Grexit, and what are the implications of the outcome for U.S. housing?
Persistent Greek fears hobble European equities
May 25, 2012 7:37 AM ET
By Sudip Kar-Gupta
LONDON (Reuters) - Relentless worries over a possible Greek exit from the euro zone checked European stock markets on Friday after a brief rally following sharp losses earlier in the week, and traders said markets would remain volatile over the coming month.
The FTSEurofirst 300 index initially rose some 0.8 percent, but then fell into negative territory after Belgian Deputy Prime Minister Didier Reynders said central banks and companies would be making a grave error if they were not preparing for Greece to leave the euro zone.
The index, which had fallen to a five-month intraday low of 964.66 points on May 21, was down 0.3 percent at 979.81 points by 7:05 a.m. EDT (1105 GMT).
Traders said that in spite of a two-day rally which occurred as bargain hunters sought out beaten-down stocks, the underlying outlook remained negative.
“Europe is in a recession, China is slowing down and the United States is slowing down as well,” said Michel Juvet, chief investment officer at Swiss bank Bordier & Cie.
Juvet said his firm had cut its European equities exposure earlier this year and was considering re-investing in the sector, but would hold off at present since he felt equities markets could decline further in the near term.
Juvet said he would wait until the European STOXX 600 index fell to below the 220 mark from its current level of around 240 points before buying back into European equities.
Royal London Asset Management’s European equities fund manager Neil Wilkinson also said he had been waiting on the sidelines this week, despite brief rallies in stock markets, due to lingering uncertainty over the Greek crisis.
“I haven’t had any trades in the market over the last couple of days. Markets will be volatile over the next month,” he said.
…
What would be the likely impacts on U.S. housing of a potential post-election U.S. recession in 2013?
I’m thinking the impact on housing would be failed intervention efforts and falling prices, but then I am a known pessimist.
ECONOMY
Updated May 23, 2012, 5:15 p.m. ET
CBO Sees 2013 Recession Risk
By DAMIAN PALETTA
WASHINGTON—The U.S. economy will likely fall into recession in the first half of 2013 if large tax increases and scheduled government spending cuts are allowed to go into effect in January, the Congressional Budget Office said Tuesday.
The nonpartisan agency’s finding could ramp up pressure on policy makers to reach a broad budget deal later this year to avoid such an outcome.
The combination of tax increases and spending cuts, often referred to as a “fiscal cliff,” would sharply reduce the federal budget deficit but would temporarily arrest the economic recovery, said the CBO, which serves as Congress’s budget calculator.
The CBO projected the economy would contract at a 1.3% annual rate in the first six months of 2013, likely meeting the definition of a “mild recession,” if certain tax increases and spending cuts are allowed to take effect next year. The economy would stabilize in the second half of 2013 and grow by 0.5% over the year.
The economy has grown at an average 2.4% annual rate since the recovery began in mid-2009.
“The idea of piling another recession on top of such a slow and incomplete recovery is quite horrifying from the standpoint of the well being of average families in this country,” said William Galston, a senior fellow at the Brookings Institution in Washington. “It would be unconscionable to permit that to happen if there were obvious policy alternatives.”
…
The U.S. economy will likely fall into recession in the first half of 2013 if large tax increases and scheduled government spending cuts are allowed to go into effect in January,
Then why not do it gradually over 3 years instead of all at once?
Because any attempt to do it gradually will end in deadlock. The Republicans will insist on no tax increase and indeed futher tax custs and increasing spending on the military and turning Medicare into a vouchers, cutting Social Security and getting rid of ACA (assuming the Supremes don’t take care of it). Democrats will want to allow the tax increases to happen on some portion of the high earners and fix some of the wealthy loopholes and probably cut some military and fiddle with some other stuff.
Neither side really wants it all to happen at once, but they are so far apart on what they want to happen instead that there is no way to get to a compromise. That is why the super committee “failed.” I don’t think it really did. It was set up to see if the committee could come up with something that both sides would like better than the default. It couldn’t. Serious analysts didn’t really expect it to absent really clear polling that the overwhelming majority of the electorate would blame one side or the other for the economic results of the default. It tried. It didn’t come up with anything. We get what the default.
Haven’t any of you guys ever worked on a project where no one could come up with a good name for it? So you pick a name so terrible that you figure that no one will let it stick; someone will have to come up with a better one. But no one does, so the bad name just ends up being the default. You picked it to be so bad it couldn’t last, but you get stuck with it, even so. That is what we are getting in January. Probably.
If they increase taxes (reducing disposable income), GDP goes down. If the government spends less (which means borrows less, since we are broke) GDP goes down.
So if one is willing to take on more debt (or lower tax rates further) for another 3 years, they can put off the recession for another 3 years.
That is, unless we have actual growth that isn’t just increases in debt. But that hasn’t happened in many, many years.
that both sides would like better than the default.
Yep. We, being the entitled society we are, have become intolerant of any pain. Afterall, even the losers get to go for ice cream and get participant trophies.
Oops, posted as a response to SFC, but with wrong quote.
The media will put up statistics from the REIC or other special interest, and act like there are few that deny it’s true. But when I look at articles around the world, I see in the comments that many people aren’t buying it. An example:
‘HOBART’S Eastern Shore suburbs could be set for a revival as savvy home buyers snap up the cheapest properties in the nation within 20km of a capital city. The suburbs of Herdsman’s Cove, Gagebrook, Clarendon Vale, Bridgewater and Risdon Vale often get a bad rap but house hunters have been told to look to these areas if they want a cheap property with a short commute to the city.’
‘Online real estate analysts RP Data says it was tough to find a house in reasonable condition close to Tasmania’s capital at the height of the property boom in 2009. But research analyst Cameron Kusher said bargains could now be had in these fringe suburbs. The five suburbs are the most affordable within 20km of Hobart with houses up for grabs for less than $180,000.’
Now from the comments:
‘Nice try….but not believable l guess the greedy real estate agents whoacquired so much profit from us all over the better years are feelingthe pain..ouch!
Posted by: l.louise cram of rosny park 5:55pm Saturday
Is this advertising? Why is the reporter saying “as savvy home buyers snap up the cheapest properties in the nation within 20km of a capital city.” There’s no evidence offered that this is happening, in fact the reverse is happening, sales have fallen, along with housing finance and listings are still climbing. Why don’t we start talking about how far underwater that last crop of first home buyers in 2009 are on their mortgages?
Posted by: pete vernon of moonah 2:22pm Saturday
You’re all looking at this a bit simplistically. The “value” of a place has almost nothing to do with the price - it’s but one factor in a relationship involving possible rental returns, property appreciation, interest rates and outgoings. If at the end of a period a $200k property has returned $50k and a $500k property has returned $100k, the $200k property was the better choice. So whilst it’s tempting to decry these areas because of the reputations, they could be good investments.
Posted by: Steven Vanderneit of Hobart 2:12pm Saturday
Hogwash, prices are relative to location,socio economics & growth potential. Generally house prices are way overpriced in Tasmania for almost the same reasons. The bubble has burst and the market will determine where prices land. Taxpayer subsidised grants are over & the real market will now have its say,as it Always does!!!
Posted by: lee smith of bohol,philippines 1:15pm Saturday
Those houses now priced at 180 thousand dollars were selling for less than 80 thousand dollars in 1999 still too much. Back to 1999 prices please! These so-called people would they be interstate investors again buying up properties who were the major cause for house prices to be inflated over last ten years. Hold off buying for another year or so and the prices will fall even more.
Posted by: William Spence of Glenorchy 10:46am Saturday
This must be an ad’ for the Real Estate Institute of Tasmania. You are getting “ripped off” if you compare these prices to non capital cities with similar or better amenities.
Posted by: Jeffro Geeves-Woolley of Glen Huon 8:44am Saturday
The property is cheap for a reason. Who wants to live in suburbs full of feral bogans roaming around torching properties? Raze the whole area and start again.
Posted by: Susie Colly of West Hobart 8:31am Saturday
Not really bargains when compared to other cities in Australia that are not capitals. Tasmania is treated by most things federally as a regional centre, its good to see our real estate reflects this too.
Posted by: Barry Knott of Queenstown 8:19am Saturday
I think “savvy” people know exactly why these properties are the “most affordable”. Please desist with this spuiking nonsense and wait for prices to gravitate back down to prices where those on an average wage can purchase them.
Posted by: Felicity Marks of Sandy Bay 8:05am Saturday
Of course Hobart properties should be worth less than properties from any other capital city: Hobart is the capital city with the smallest population, highest unemployment & lowest wages! Nice try, but it won’t fly.
Posted by: Mathew Munro of Hobart 7:44am Saturday
I’ve gotta say that the Hobart Comment Strike Force is pretty good. To the point where they give us a run for our money.
Come on, HBB-ers, it’s time for us to lift our game. On the commenting front, we have some serious Aussie competition.
“Who wants to live in suburbs full of feral bogans roaming around torching properties?”
That sounds like it’s straight outta HBB. I had to look up “bogan.” It’s the Aussie equivalent of trailer trash.
They all use full names too.
Ya’ll need to get out and start knocking this stuff down in the media and on main street.
So clearly we nailed the bubble, but miscalculated (misunderestimated) the impact of the shadow inventory.
Can it be controlled?
Is it being controlled for political purposes?
How big is it?
Who really owns these homes?
I think with shadow inventory, we first need to define it. I define it as future distressed home sales that are not currently on the market in excess of a “normal” level. For me, I include:
1. Homes in the foreclosure process;
2. Homes that are not current;
3. REO
I exclude:
1. People who have decided not to sell at today’s prices (that’s just normal inventory, not shadow);
2. A “normal” amount of non-current borrowers. Even in the healthiest markets, there are some non-current borrowers (about 5% historically).
Some people would argue that some percentage of loan modifications should be included. Others will argue that some percentage of underwater borrowers should be included.
On the first point, Fannie noted in its most recent report that their more recent modification efforts are much better in terms of redefault rates.
Secondly (which also deals with the second point), new delinquency are near “normal”. If there was still an abnormal number of defaults based on modification redefault, OR a significant number of walk-aways from underwater borrowers, it should show up in the new delinquency (meaning we settle into a number that is greater than “normal”, as opposed to simply getting to “normal” levels of new delinquency).
So, to get to my estimate of shadow inventory, I use the LPS data:
1. It is estimated that 11% of all mortgages are non-current, which is approximately 5.5 million loans;
2. REO: I thought this number would be approximatly 1 million, but Calculated Risk has it at about 500k as of Q3 2011, and trending downward; and
3. “Normal” non-current loans is about 2.5 million (5% of 50 million).
So, with these components, I get 5.5+0.5-2.5=3.5 million homes as “shadow inventory”.
Let’s add in a factor for re-defaults on Modifications just for fun. I think there have been something like 5 million modifications completed per the “Hope Now” data, and let’s pick a high number of future re-defaults…50%. I think this is VERY high, since a lot of re-defaults have already occurred, and currently, the redefault rates for Fannie are running at <50% after 2 years. But for the sake of argument, this adds another 2.5 million loans in the “shadow inventory” pool.
Again, I think this is very conservative, since if we were to have this number of re-defaults, they should be showing up in the non-current loans as new delinquencies right now…and they are not.
So, on the low end, I get shadow inventory of 3.5 million home loans. On the high end, I get 6 million.
Remember, I’m not counting people who are choosing not to sell…they aren’t going to be a source of sellers that will push prices down, only a source of sellers that will slow price increases. It is illogical for them to wait until prices fall to list their home for sale…they are waiting for prices to be higher.
What components am I missing of shadow inventory?
Definitely need to include some % of underwater borrowers, but I have no idea how much. The % probably varies from city to city and depends on the job base.
I’m trying to put into words my thinking on this…not easy after a long drive and a few beers…
I think of it this way:
Any any given level of “underwaterness” (5%, 10%, 20%, 40%, etc.):
Some underwater borrowers will never walk away.
Some underwater borrowers will walk away immediately.
Some underwater borrowers will give up at various times (some after 6 months, some after 2 years, etc.).
If you wave a magic wand on day one, and have 100 borrowers 20% underwater, and there are 35 who will never walk, on day one a potential of 65% will walk away at various times…let’s say that 10 people walk after one month, now you have 35 of 90 who will never walk away, and 55 of 90 who will walk away at some point (<65%)…there is an march toward 35, with a smaller and smaller percentage of the remaining walkers who go away with the passage of time.
It is more complex than that, since as prices marched downward, the pool of underwater borrowers (and thus walkers) grows. However, prices have been flattish now for about a year (if not longer), so there is a smaller percentage of underwater borrowers walking away today than there were a year ago. And there will be a smaller percentage next month, and the month after, and the month after.
If confidence worsens, the percentage of underwater borrowers who walk rises.
If confidence improves, the percentage of underwater borrowers who walk decreases.
So, long story short, it seems like where we are today, the percentage of remaining underwater borrowers that walks goes down with time.
All that said, it leaves us with the question:
What percentage of underwater borrowers is walking away today?
No one can say…however, if the percentage was large, it would show up as an high number of new delinquencies…which aren’t there today…meaning, the percentage of underwater borrowers who are walking away today must be relatively small…
If it was a large number, why don’t they show up in the data?
Weekend Topic.
As the banksters/1%ers/government’s latest “fleece the sheep” scheme seems to be buying up all of the low end residential property in the country and turning it into rentals, at what point does it start making sense to either
- Buy, or
- Activate the “Cardboard Box under the Overpass” (C-BUTO) plan?
“- Activate the “Cardboard Box under the Overpass” (C-BUTO) plan?”
I’d call that the “Blue Plan.” You can disconnect with a little more style than a box. If I didn’t have an uppity wife, we’d be living in a tent on a campground in Florida by now…
I’m aiming a little bigger. While it requires gas and more maintenance, I’d join the guys in Maui who live in their vans near the beach.
The Carl Morris plan (trailer park) is probably the best option.
It frustrates me that it’s come to this, but yeah…it still seems like the best option. I own the house free and clear. They can raise the lot rent on me but they can’t raise it very far without losing tenants. Really the biggest risk (besides to my ego) is that they close the whole thing and build condos. But Boulder being the bleeding heart place that it is does NOT want to see that happen and would never give them the permits. Boulder LOVES low income housing as long as it’s not too close to the expensive stuff.
Simple question:
Are those who are buying homes at current prices and renting them acting irrationally from an economic perspective?
How long until the Treasury bubble pops?
MarketWatch
The Tell
Why the world still loves U.S. Treasury bonds
May 25, 2012, 12:45 PM
There are plenty of reasons to throw a tirade about how U.S. bonds are far from safe – the deficit is out of control, the central bank is basically printing money, inflation will go out of control one day, and so on.
And yet, they keep rallying. Someone is buying them.
For global bond investors, it’s all relative. For one thing, they still offer higher yields than a lot of other countries with large bond markets. For example, Japan’s 10-year notes yield 0.9% — yep, barely half of what U.S. 10-year notes yield 10_YEAR -2.25% .
That’s also tops Germany’s 10-year yield of 1.37%.
U.S. Treasury bonds are one of the asset classes that Scott DiMaggio, director of global fixed income at AllianceBernstein, said he still likes.
Compared to other global markets he looks at, Treasury bonds “still look attractive, even at these yields, because they’re still really the only risk-free assets out there,” DiMaggio said.
He said other government bond markets considered very safe — he named Germany, Canada, Norway and Australia — are more richly valued already, and are smaller markets, so they can’t offer the liquidity available in U.S. bonds.
And Germany, somewhat obviously, is rather closed tied up in the European sovereign-debt debacle — and the deepest pockets in the euro zone keep ending up on the hook for other counties’ indiscretions. That’s not good for their own credit quality. See Bond report.
- Deborah Levine
They will rally until the sheeple get restless, and start dropping hints that we’re going to go “Iceland” on their azzez.
“We suck, but suck less than everyone else”.
Yeah, that’s a real positive endorsement.
All this money and no one knows where to put it
Maybe thats why RE is going up too much money printed which needs a home ?
Could invest in factories and hire workers have it trickle down but instead invest in cheap homes and turn them into rentals.
pretty messed up
have it trickle down
What’s that definition of insanity again?
Related question: How long until we have a Japanese debt crisis?
“Will this legislation cause more money to be extracted from taxpayer pockets, in order to pay for investor profits?”
I see discussions about various bills moving through Congress, various initiatives designed to buoy the housing market. I read recently that over half of first time buyers are using FHA loans, while the FHA is in deep trouble.
I appreciate that Congress responds first and foremost to its paymasters. But it’s still something they can’t admit out loud because it would be admitting to bribery.
With the various legislation moving through Congress, what kinds of questions should the legislators be asking? They always ask, “How will this impact investors” aka the FIRE sector. What kinds of tests / questions should they have for housing-related legislation?
This move would instantly secure my vote for Obama this November.
Donald trumps up self as VP pick for Mitt
By Katy Jordan
Saturday, May 26, 2012 - Updated 42 minutes ago
Reality TV titan Donald Trump is making political waves again, saying he’s ready to be hired if Mitt Romney needs him for vice president, but the GOP presumptive presidential nominee isn’t tipping his hand.
The Romney campaign is staying mum on whether the wispy-haired Trump will be on the short list for a top-tier post in a Romney administration.
Trump, who floated the employment opportunity during television and online appearances this week, hasn’t abandoned his White House aspirations after all.
For a vice presidential running mate, “Donald Trump would be the best bet,” Trump told Newsmax.com after laying out potentials such as New Jersey Gov. Chris Christie and Ohio U.S. Sen. Rob Portman.
The Romney campaign, though, is keeping a lid on any VP news, and told the Herald yesterday that it won’t discuss political appointments until after the nomination.
The Donald dished with the ladies of “The View” yesterday, saying his friendship with Romney was the real reason to step away from the presidential race.
“I was doing fantastically in the polls, but I really became friendly with Mitt Romney and liked what he was saying about China, about OPEC” and all the other institutions around the world that are “ripping us off,” he said.
…
The guy just never runs out of BS. I’m an Adam Carolla fan so I watched this season of Celebrity Apprentice despite my distaste for The Donald. One nice side effect was that I got to have an in-depth conversation with my 11yo son about how he’s not a financial genius as he’s portrayed in the show.
Got fear?
May 25, 2012, 3:33PM ET
Euro falls below $1.25 on Greek fears
By The Associated Press
The euro fell below $1.25 for the first time Friday in nearly two years on concerns that Europe won’t be able to keep Greece in the single currency union.
The euro fell to $1.2518 late Friday from $1.2525 late Thursday. The euro fell as low as $1.2495 in morning trading, its lowest level since July 2010. It fell 2 percent this week and over 5 percent so far this month.
…
Opening Remarks
Who Lost the Euro?
By Clive Crook on May 24, 2012
The arc of Europe’s postwar history is turning toward tragedy. It isn’t just that much of the Continent has fallen into a new Great Depression, or that in some countries things will get worse before they get better. It isn’t even that the whole mess was avoidable in the first place. It’s that the crisis is dividing Europe along the very lines the European project was intended to erase.
Decades of clichés about European “solidarity” and “the European idea” are being held up to ridicule. The notion that Greeks, Spaniards, Britons, Germans, and Italians are instinctive partners whose commonalities transcend their cultural differences and historical enmities—that “Europe” is a real community, not just a heavily worked-over blueprint in Brussels—turns out to be, let’s say, disputable. Ancient stereotypes are as livid as ever, framing conversations about the crisis right across the European Union. Germans are bossy and severe. Italians are idle. Greeks are corrupt. Brits are arrogant. The French are vain. So much for 60 years of European unification.
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Should it be against the law to point out that Goldman Sucks?
Op-Ed Columnist
Egos and Immorality
By PAUL KRUGMAN
Published: May 24, 2012 758 Comments
In the wake of a devastating financial crisis, President Obama has enacted some modest and obviously needed regulation; he has proposed closing a few outrageous tax loopholes; and he has suggested that Mitt Romney’s history of buying and selling companies, often firing workers and gutting their pensions along the way, doesn’t make him the right man to run America’s economy.
Wall Street has responded — predictably, I suppose — by whining and throwing temper tantrums. And it has, in a way, been funny to see how childish and thin-skinned the Masters of the Universe turn out to be. Remember when Stephen Schwarzman of the Blackstone Group compared a proposal to limit his tax breaks to Hitler’s invasion of Poland? Remember when Jamie Dimon of JPMorgan Chase characterized any discussion of income inequality as an attack on the very notion of success?
But here’s the thing: If Wall Streeters are spoiled brats, they are spoiled brats with immense power and wealth at their disposal. And what they’re trying to do with that power and wealth right now is buy themselves not just policies that serve their interests, but immunity from criticism.
…
Beware of Wall Street lies, and the lying liars who tell them.
“…let me take a moment to debunk a fairy tale that we’ve been hearing a lot from Wall Street and its reliable defenders — a tale in which the incredible damage runaway finance inflicted on the U.S. economy gets flushed down the memory hole, and financiers instead become the heroes who saved America.
Once upon a time, this fairy tale tells us, America was a land of lazy managers and slacker workers. Productivity languished, and American industry was fading away in the face of foreign competition.
Then square-jawed, tough-minded buyout kings like Mitt Romney and the fictional Gordon Gekko came to the rescue, imposing financial and work discipline. Sure, some people didn’t like it, and, sure, they made a lot of money for themselves along the way. But the result was a great economic revival, whose benefits trickled down to everyone.
You can see why Wall Street likes this story. But none of it — except the bit about the Gekkos and the Romneys making lots of money — is true.”
Ron Paul has already won
The media ignore the success of Paul’s delegate strategy, and they don’t realize that whatever happens in Tampa, he’s already won.
Associated Press
Tuesday, May 22, 2012 - Political Potpourri by Kevin Kelly
WEST CHESTER, Pa., May 22, 2012 — The mainstream media continue to discount Ron Paul as a factor in the race for the Republican nomination, even though he and his supporters could become serious contenders when the convention meets in August. Paul continues to rack up delegates in such states as Iowa, Minnesota, Missouri and Colorado.
Strangely, in spite of the success of Paul’s strategy in accumulating delegates, many pundits insist that Paul remains a nonfactor. These same pundits continue to claim that electorally Ron Paul cannot win the Republican nomination, and while the media miss the mark by discounting Paul as a contender, they miss the truly “big story” of the 2012 election. That is, that Ron Paul, mobilizing both young and old with his message of liberty tempered by personal responsibility, and government power tempered by accountability, has already won far more than the election. He has won the trust and the imagination of the people, Rocky Balboa-style.
Consider the issue of the Federal Reserve, where Dr. Paul has been an outspoken critic of the Fed’s policies for years. When Paul proposed a bill to audit the Federal Reserve in 1983, he had not a single Republican or Democrat who was willing to co-sponsor the measure. When he reintroduced it in 2011, every Republican and several Democrats in the House signed onto Paul’s bill.
Almost every Republican candidate vying for the nomination this year supported a full independent audit of the Federal Reserve, and many demanded that Chairman Bernanke be fired. Texas Governor Rick Perry, when asked about future quantitative easing by the Fed, went further than most Republicans when he said, “If this guy prints more money between now and the election, I dunno what y’all would do to him in Iowa but we would treat him pretty ugly down in Texas. Printing more money to play politics at this particular time in American history is almost treacherous – or treasonous in my opinion.” Paul’s views on the Federal Reserve are no longer outside the mainstream. According to a survey published by Bloomberg in 2010, most Americans believe that the Fed should be severely reigned in or altogether abolished. These numbers are probably higher in 2012 considering that Fed policies have not pulled us out recession.
…
The media does a better job of reporting on previous events, rather than predicting future ones.
Is America fiddling while Athens burns?
As Europe Threatens to Implode, America Shrugs
Fears of a eurozone collapse make for scary headlines and worries in Washington, but the American public isn’t convinced
By Danielle Kurtzleben
May 25, 2012
European workers are caught in a crisis that could hurt global recovery. Meanwhile, Americans’ thoughts are elsewhere.
Americans are increasingly inundated with news about the debt crisis rocking Europe, but that doesn’t mean they care. According to data from the Pew Research Center’s Project for Excellence in Journalism, the European crisis was the No. 3 story in the news media last week, its biggest week since early December. And during the first 20 days of May, the crisis’ level of news coverage has well exceeded all other monthly levels seen thus far in 2012.
Still, the issue doesn’t register with the American public as particularly troubling. According to the Pew Research Center’s News Interest Index, only 17 percent of Americans polled earlier this month said they are following the European situation closely; more than twice that figure, 37 percent, said the same of the president’s gay marriage views.The week prior, the crisis was much less important to Americans than the death of former NFL star Junior Seau, who was the top story for 11 percent of Americans, versus Europe’s 3 percent.
In some ways it’s relatively obvious why Americans aren’t paying much attention—people only have so much capacity to worry, and Americans have plenty of other, more readily apparent problems to fret over.
“There are plenty of worries here at home in terms of difficult times and unemployment, so why spend your mental energy worrying about Europe, when you’ve got unemployment problems at home?” says Gary Hufbauer, senior fellow at the Peterson Institute for International Economics.
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I used to get disgusted when a former girlfriend’s father pejoratively referred to his fellow Americans as “the poor slobs.” Three decades later, upon reading this story, I finally agree with him.
“The week prior, the crisis was much less important to Americans than the death of former NFL star Junior Seau, who was the top story for 11 percent of Americans, versus Europe’s 3 percent.”