Bits Bucket for June 2, 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
-
May 2024 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 31
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
FYI Darrell, you have used enough of my bandwidth on your money topic, so please move on to something else - like maybe housing.
Yeah Darrell….cause no one is going to use money to buy a house….since it will be worthless…though they might bale up some bricks of $1 bills and try to build one using money! ….a little Sat morn Jingle humor!
Whoa, how Wiemar of you.
Weimar? Why, ma?
…… and a big fawkin’ thank you to you Ben. Jiminy cripps……
To be fair, it is all related.
Huge trade imbalances need to be funded by mass amount of new money. Mass amount of new money require loose monetary policy. Loose monetary policy create asset price bubble, whether they be junk bonds, commercial real estate, DotBomb, or real estate.
If you want to talk about the surface symptom, okay. Personally, I would rather examine the underlying cause and effect.
I realize that my explanations of why gold and silver no longer being currency (because they are not in common circulation as a medium of exchange) are unpopular with people who found this blog via your other blog on precious metals and how they are the only “honest” foundation for money.
However, perhaps those people could accept that I only intend to be descriptive with money, not prescriptive when I say gold and silver are not money.
We had to leave the gold standard because our massive global trade imbalances, and desire to rapidly grow the money supply so that the rich could accumulate more money, was putting strain on foreign exchange markets and creating drastic price discrepancies.
Attack and reverse those underlying trade imbalances that created the need to go off a gold standard is a necessary prerequisite to returning to a commodity based monetary system.
It would also remove the need for loose lending that is creating asset price bubbles, like the housing bubble.
I felt like I was watching a looped infomercial.
Still are, apparently.
I count 36 posts as of my last refreah. 5 of which are in any way related to real estate. 2 of those are more about the effects on government tax receipts. So really, less than 10% real estate.
I thought bits buckets was for all this “off-topic” stuff.
Oh, off topic is okay, EXCEPT answering questions of the gold bugs in ways they do not like. My bad.
Most things are related, but you have more than exhausted that topic. I asked you nicely, and there are plenty of other things to examine.
No matter what the dumsh!t U.S. electorate thinks, presidents have little direct influence over the number of jobs. Hence basing the election outcome on the employment situation is moronic, though completely understandable, given a long line of U.S. presidents who have pandered to the specious notion that they can somehow directly and immediately control the employment situation.
Reagan, swept in by massive popular support, and well funded by the bankers, actually did have a MASSIVE effect on the economy.
The dudes we’ve had since then? Meh, not so much.
Bush Sr? Happened to be in charge when the USSR fell. Defense cuts triggered a recession. Bye bye Bush.
Clinton pushed through big cuts in government, meaning there is a lot less fat to cut now. His biggest “effect” was not firing Greenspan while he had his foot on the accelerator of loose monetary policy which inflated the tech bubble.
Bush Jr? Despite insane price increase, kept his foot firmly on the FHA, GSA, FDIC, and other regulatory agencies to ensure the cheap money kept flowing into the housing bubble.
Clinton could have seen the tech bubble, and slowed it down. Where is the profit in that?
Bush Jr could have stood against the insane real estate price bubble. Where is the profit in that?
Obama has been in pure Delay and Pray mode. His biggest accomplishment was getting the lobbyists of the doctors and drug makers that want more people to have insurance so they can make more money, together with the lobbyists of insurance companies so that the two sets of lobbyists could come up with a plan to increase their own profits while dumping the costs onto other businesses and individuals via mandates to buy insurance.
I actually think, if elected, Romney could have a huge impact. He will be pushing big time to remove the shackles from business so they can pillage and plunder what little wealth remains in the hands of anyone except the billionaires.
Clinton’s major effect on the economy was removing the final restrictions on governmet NETs networks and releasing the internet to commercial service 1995. I’m not sure he did it personally, but it was on his watch.
The tech “bubble” was a lot more than the value of the NASDAQ. That was just at the tail end. You had real innovation which created real jobs done by real people making actual salaries. The rise in productivity and knowledge jobs , and all the jobs which rose from from the salaries buying stuff, was enough to hide the continued offshoring of manufacturing. The pop of the tech bubble was simply consolidating the basic capabilities of the Internet into a few companies.
What’s very sad is how quickly that jobs that could be done over the Internet were offshored withint 10 years.
It was the information infrastruction and technology act of 1992 that opened ARPANET to commercial traffic, creating the internet as we now know it, based on infrastructure that was paid for with the High Tech blah blah act of 1988, which Gore had also pushed for.
Yes, in 1993, soon after election, Gore continued to push bills to get more information onto the internet, but the core technology and infrastructure was in place before Clinton was elected.
“Reagan, swept in by massive popular support, and well funded by the bankers, actually did have a MASSIVE effect on the economy.”
Yep. He was a Keynesian Republican who, with his Fed chair appointee, Alan Greenspan, used deficit-financed military spending to send us down the path whose terminus we finally reached over the past decade or so.
A vote for Romney is a vote to try to move even farther down this terminal path.
I wonder how much rope Ben will give me on this….
Federal Reserve Z.1, D.3 shows that money created from federal government deficit spending amounted to $1.4T in the 8 years under Reagan.
It also shows that new money was generated by household debt increasing by $1.8T and business debt by $2T.
Keynesian philosophy says the government should step up when the private sector is not providing the money/debt that an otherwise sound economy needs to function.
Government generating mass quantities of money/debt, at the same time the private sector is generating mass amounts of money/debt, all to fund massive trade imbalances that were developing in a fundamentally unsound economy, is NOT Keynesian economic philosophy.
“…all to fund massive trade imbalances that were developing in a fundamentally unsound economy, is NOT Keynesian economic philosophy.”
Then let’s call it Reaganism and agree to lay Keynes to rest. In the long run, his theory is dead, anyway.
Reaganomics….
The biggest problem with it, is that it took 20-25 years for the unintended side effects to come home to roost. It is going to be nearly, if not totally, impossible to convince the masses that the TechWreck and HousingCrash were the direct, and INEVITABLE, end game of an economic philosophy of embracing rather than fighting trade imbalances.
Tech Wreck? Oh, that was Clinton’s fault.
Housing Bust? Oh, that was the poor people lending act of Carter and Clinton.
No peeps, it is the inevitable end result of attempting to live above our means by simultaneously off-shoring our means while making debt available so that we could continue to pretend our means had increased. It stated in the 1960s, but we REALLY embraced it in Reaganomics.
“The biggest problem with it, is that it took 20-25 years for the unintended side effects to come home to roost.”
Thanks for mentioning the biggest economic moral hazard problem facing every American president. In fairness to Republicans, we may as well bring Clinton into the discussion here as another example, as the Glass-Steagall Act was scrapped on his watch, setting the stage for the Fall 2008 collapse of the U.S. banking system, and the $500,000-per household capital gains exclusion for the sale of a primary residence served to kick the housing bubble into overdrive over the 2000-2006 period. Generally speaking, each president faces the temptation to support short-term stimulus measures which light the slow-burning fuse of a ticking economic time bomb for his successors to handle.
Agreed. Every president since Reagan has continued, and even advanced his policies.
Under Bush Sr, the secularization of loans during the S&L cleanup created the business model for detaching origination of loans from the risk of loss. The created the foundation that lead to the insanely loose lending standards.
Heck, you can go back pre-Reagan to the creation of the GSE structure, establishing the “privatize the profits and socialize the losses” mentality. Well, I guess FDIC did that too, but with TONS of regulations.
Gents,
The information bestowed is appreciated. Since the problems are known, is there any way they can be solved?
“…is there any way they can be solved?”
1. Quantitatively ease enough to avoid deflation (not saying it’s a good plan; merely that it is the plan).
2. Muddle through the financial crisis and hope for the best.
“Since the problems are known, is there any way they can be solved?”
Yes, when people realize that money is borrowed into existence ….. Just kidding. I think that at SOME point, after much pain, there will be a true recovery that results in *temporary* large surpluses for federal and state governments. We just need to realize that when it happens, leaders from both sides of the aisle will have their pet programs they’ll want to piss it away on. We have to be ready to not let it happen. Tall order, I know. I don’t know what level of debt is acceptable, but I’m sure there is a psychological threshold that, once crossed, would make even the eternal optimist proclaim, “Oh god, we’re screwed”. At which point, we are.
The answer is punish the fraudsters. That answer is not palatable to the PTB, because they are the fraudsters. So, the answer is off the table.
By punish the fraudsters I mean let banks go bankrupt, let failed businesses fail, and of course prosecute any violations of the (very limited) laws that we have. But my expectation is if you just did the first two, you’d solve the problem.
If you want a banking sector and all the existing banks go belly-up, no problem — make a list of all employees and associates of the banks going belly-up, ban them from working in banking or any securities entity for life, capitalize the small banks that remain, and you’re back in business.
As I said, the PTB cannot accept their punishment, so this solution is not in the set of (politically) viable solutions. Of course, this means the only solution is, ultimately, revolution — either a smart one, or, more likely, a violent nasty destructive one that probably won’t produce a solution in the end.
IAT
ok_land_lord said: “Since the problems are known, is there any way they can be solved?”
Of course. Step by step.
1. Accept that you can’t fix it. Gangrene means amputation, not “corrective surgery” or “drug treatment” or any other such attempts to “fix” it. The limb is lost and the longer you pretend that it isn’t, the more it turns black, smells bad, and poisons your bloodstream. Follow the metaphor?
2. Once you accept that you can’t fix the system, you have to fix yourself. THAT, you can fix. Save money instead of spending it. Saving money makes the system worse, but you already gave up on that in step #1. The system gave up on you a long time ago. Don’t bother sacrificing even a little bit to make anyone else’s life better. Look to your own.
3. Keep reducing your expenses and exposure to economic catastrophe. After all, this is the Greatest Depression, or Great Depression 2.0, or the Second Great Depression, or whatever you feel like calling it. There’s nothing under the U.S. economy at all, now, and it all must come crashing down, turning into police riots, property confiscations, and disappearances of citizens into government hands.
4. Learn to be independent. Grow a garden. Get good with a pistol and rifle. Learn to repair what you have, or do without it. Take on all those old New England ways of living.
5. Once you feel secure enough at any particular step, keep spreading the gospel. Reject the people who believe that petroleum and money are in infinite supply. Belittle them. Out-argue them (NOT hard to do once you understand real economics). And if necessary, eject them from your life.
Clinton pushed through big cuts in government,
BAHAHAHAHAHAHAHAHA - oh stop it - yer killing me.
Government greatly expanded under Clinton except for the military (which took a 40% hit).
The general budget still expanded and went up every year (yep - all the peace dividend was spent in the year it was “saved”)
And IIRC, the Clintons accepted huge bribes from the Chinese to facilitate technology offshoring.
Darrell, did a frenemy faceeating cokewhore just endow you with
all of the coke and bath salts needed for a 24hr. rant?
Chill, man.
Rational discussion is not rapid-fire in nature.
Jobs report deals blow to Obama’s re-election bid
View Photo Gallery — The Labor Department reported on Friday that the nation’s economy added only 69,000 jobs in May, bringing the unemployment rate to 8.2 percent. Here, by attending job fairs and fighting foreclosure, Americans cope with the fallout from the troubled economy.
By Mike Dorning, Published: June 1
June 1 (Bloomberg) — An unexpected slowdown in hiring last month deals a blow to President Barack Obama’s re-election bid and reinforces Republican Mitt Romney’s main line of attack just as the two men directly engage in the election campaign.
Jobs in the U.S. grew by 69,000 in May, the fewest in a year and less than the most pessimistic forecast in a Bloomberg News survey of private economists. The unemployment rate increased to 8.2 percent, the first rise since last June.
The jobs data “keeps the focus on the president’s performance and on the Obama record,” said Stu Rothenberg, editor of the nonpartisan Rothenberg Political Report in Washington. “It simply makes it harder for the president to say it’s not about me and it’s about a choice between two men. It’s much easier for Romney to say, ‘Now, wait a minute, is he doing a good job?’”
…
November is still far off. But unless things improve, he might find himself a single termer.
Article on CNBC yesterday about how the Fed will have to act, with more QE and more twist.
Really? To what effect?
All they can possibly do is lower interest rates or flatten the curve. Well, with 10 year treasuries at 1.5% and 30 year at 3%, seriously, how much lower can they go?
You can get a 15-year mortgage at 2.75% and a 30-year at 3.5%.
When do we accept that it is not a monetary policy problem, nor is it a fiscal policy problem. There must be something else going on. I wonder what that could possibly be.
Perhaps we should stop trying to bandage up the gunshot wound, and move into the OR to actually stitch up the bleeding.
Totally agreed. You’d think the genius trust at the Fed could figure out the futility of further pushing on a string when long-term Treasury yields are at their lowest levels in recorded history, but I’m not very confident.
The alternative is? What?
Ben Bernanke walks up to the lectern, leans into the mic, throws his hands up in frustration and says “My attempts to reverse trade deficits via debasing the dollar have proven totally ineffective. We’re totally and completely fooked!”
Dow drops 5000 points….
Couldn’t they let him say this, but secretly prop up the Dow? That would represent a sort of psychological version of Operation Twist. Chaotic markets seem preferable to markets which predictably always go down (aka asset price deflation).
“We’re totally and completely fooked!”
P.S. Some readers may have already forgotten by now (I haven’t!), but this approach was already taken, when George W. Bush, Henry Paulson and Ben Bernanke all appeared in close succession on national television to make an announcement to this effect during the Fall 2008 financial crisis. That announcement got the ball rolling on a collapse in the Dow Jones Industrial Average to the 6K-7K range by the end of March 2009. I believe it was the announcement of QE1 which ended the selloff.
Given the Fed’s precedent, is there any chance they will take a similar approach this go-round, of letting the DJIA do a major, months-long bungee dive before announcing QE3 at the point of maximum pain?
That was when they were arguing for TARP.
It was more like “We’re fooked without TARP”.
TARP failed, DOW crashes. TARP comes back and passes, DOW continues to decline.
No $700B ever loaned into existence out of thin air has ever been enough to cover up $5T+ in potential losses….
The DOW continued to slide right up until the VERY WEEK that FASB proposed easing rule 157 that required financial institutions to tell the truth about the market value of the assets on their books.
It is amazing that being legally authorized to LIE, is a much more effective means of making bad debt go away than $700B in bailout.
Oh, did I say go away? I meant, be swept under the rug for awhile.
“No $700B ever loaned into existence out of thin air has ever been enough to cover up $5T+ in potential losses….”
You must have missed the memo that the real figure was closer to $4T.
Or was it more like $7 trillion + $770 billion? Secretive central bank accounting is hard to parse!
Explosive Bloomberg Report Details Fed’s Monster Bank Bailouts: $7.77 Trillion
By: Scarecrow
Sunday November 27, 2011 9:00 pm
In a monster report for its January issue, Bloomberg Magazine compiled previously secret Fed data on the size and scope of the bank bailouts during 2008-2009. Among other things, we learn that the Federal Reserve under Ben Bernanke and Tim Geithner (previously head of the New York Fed) secretly loaned over seven trillions dollars to arguably insolvent banks and financial institutions to keep them afloat, while concealing the scope of the lending from Congress and even member of the Treasury Department charged with allocating TARP bailouts.
Much of this information on the Fed’s lending programs was already known in summary form as a result of the successful “audit the fed” legislation pushed by a coalition that included Firedoglake. That effort led Bloomberg to further successful Freedom of Information Act requests that retrieved another 29,000 pages of more detailed documents.
The Bloomberg report compiles and analyzes this information to reveal the staggering effort undertaken by the Federal Reserve in 2008-2009, both to keep the financial system, including the nation’s largest banks, from collapsing and to keep the details secret from Congress as it was considering the TARP legislation in 2008 and the financial reform legislation and regulations in 2009-11.
Among the most dramatic findings:
– While the the Fed and Treasury frequently boast that virtually all the TARP money was paid back, the major banks also received a “gift” of an estimated $13 billion in profits resulting from the difference between near zero interest rate loans and market rates.
– The publicly debated TARP funding request was for $700 billion to be administered by the Treasury, but the Federal Reserve Bank had committed 11 times that much — $7.77 trillion — to its secret guarantees and lending facilities by March 2009. (Eventual totals may have been over twice that much.)
…
“Among other things, we learn that the Federal Reserve under Ben Bernanke and Tim Geithner (previously head of the New York Fed) secretly loaned over seven trillions dollars to arguably insolvent banks and financial institutions to keep them afloat, while concealing the scope of the lending from Congress and even member of the Treasury Department charged with allocating TARP bailouts.”
This is SOOOOOOOOOOOO misleading.
It isn’t like there was $7T in loans outstanding at any given time?
I think the max loans outstanding was just over $100B. But they were like 1-day, 3-day and 7-day loans.
$100B loaned out for 2 years, 1 week at a time, is $10T in loans…. Well, not really. It is $100B loaned out for 2 years.
As I recall from many of Ben’s posts about life in Texas during the mid-1980s, an oil crash preceded a local housing market depression.
I’m sure it is different this time, though, and an epic crash in oil prices will have little effect on local housing markets supported by oil-dependent local economies.
June 1, 2012, 3:37 p.m. EDT
Oil ends well below $84, loses over 8% on week
Global economic data dulls demand outlook; nat gas sinks 4% on day
By Myra P. Saefong and Sarah Turner, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures settled below $84 a barrel Friday, losing more than 8% for the week as the latest economic data from the U.S., China and Europe dulled global prospects for energy demand.
Natural gas led the losses in the energy sector, dropping 4% after posting a gain for the month of May.
The benchmark July contract for light, sweet crude oil CLN2 -3.78% shed $3.30, or 3.8%, to settle at $83.23 a barrel on the New York Mercantile Exchange. Futures prices, which closed at their lowest since Oct. 7, were 8.4% lower for the week.
“Oil and the entire energy complex has finished substantially lower this week due to the [deluge] of negative news and uncertainty on outlook on the worldwide economy in the near term,” said Tariq Zahir, managing member at Tyche Capital Advisors.
…
Demand$ goes … down, down , down
$torage! $torage! $torage!
What could po$$ibly go wrong?
Crude Oil, Gasoline, Heating Oil Plunge: Commodities at Close
By Aaron Clark - May 30, 2012 / Bloomberg
CRUDE OIL
Oil tumbled to a seven-month low on speculation that U.S. crude stockpile$ climbed to the highest level since 1990
Here’s a chart showing gasoline supplied/consumed per average day since 1993. The chart also shows total yearly miles driven over the same period. Hidden due to the inappropriate selection of the two vertical scales is the impact of improving average MPG over the years. On a percentage basis, miles driven increased more than fuel consumption over the same period of time.
But you can’t help but notice the big drop-off in consumption in the last year or so.
http://www.ritholtz.com/blog/2012/02/what-does-declining-gasoline-consumption-mean/
Unlike normal cycles, where the gold price is driven by flight-to-quality moves out of risk assets (like stocks), this time, the gold price’s yo-yo string is the very same one the Fed is pushing on.
I hope the gold bugs enjoy the yo-yo action while it lasts, as once the Fed is done with QE3, QE4, QE5, …, the yo-yo string is certain to break.
June 1, 2012, 4:42 p.m. EDT
Gold futures score biggest gain since August
Gold futures see nearly 4% weekly gain, buoyed by QE prospects
By Myra P. Saefong and Sarah Turner, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures rallied almost 4% Friday, scoring their largest single-session increase since August and finishing the week higher as disappointing U.S. payrolls data raised the likelihood of a fresh round of quantitative easing.
Gold for August delivery (GCQ2 +4.05%) climbed $57.90, or 3.7%, to settle at $1,622.10 an ounce on the Comex division of the New York Mercantile Exchange. That marked the biggest single-session percentage and point gain for a most-active contract since August 2011, according to data from FactSet Research.
For the week, futures prices were 3.4% higher, based on a closing basis for the most-active contract.
“The stalled out job growth keeps hope alive for further quantitative easing by the Federal Reserve in the near term or at a minimum, will stifle talk of the Federal Reserve going in the other direction as [has] been mentioned in recent days,” said Jeffrey Wright, a senior research analyst at Global Hunter Securities.
…
“once the Fed is done with QE3, QE4, QE5…”
Unless you expect the string of QE’s to stop sometime soon, gold is probably as good a hedge as any, and better than most.
When is it time to get out? Ah, that’s the question. I’m sure Goldman Sachs will give you adequate warning!
So long as investors realize that buying gold is a bet on an endless future string of quantitative eases, I encourage them to try their hand at this flavor of financial gambling. It seems about as sound a strategy as parking your money in safe government debt earning 0% or so, or investing in stocks that are prone to selling off almost every day of an entire month.
Or you could have humbly set an asset allocation percentage on precious metals and sell off some to keep the percent even once a year. Then don’t be in a hurry to buy if your asset allocation is 1% or 2% under. But start buying more gold if the level is more than 2% below your asset allocation percentage.
I think if we have QE3, QE4, QE5 through the next ten years, blue chip stocks will be the top performing asset class. Not gold, but gold will probably be doing a 5% per year annual rate of gain.
Reasonable guesses; accordingly, I see no reason to buy gold now.
The idea that the president controls unemployment in a globalized, interconnected economy is just dumb. Why can’t the MSM figure this out and enlighten the American people, so they don’t make a mistake again and base their November 2012 vote on the Republican lie that the high unemployment rate is solely Obama’s fault?
The Associated Press June 1, 2012, 12:23PM ET
Eurozone unemployment stays at record 11 percent
BRUSSELS
Unemployment across the 17 countries that use the euro stayed at 11 percent in April — the highest level since the single currency was introduced back in 1999, piling further pressure on the region’s leaders to switch from austerity to focus on stimulating growth.
The eurozone’s stagnant economy left 17.4 million people — out of an active population of around 158 million people — without a job. Unemployment rates are also continuing to climb in struggling Spain, Portugal and Greece. The EU’s Eurostat office said 110,000 unemployed were added in April alone. In the U.S. the unemployment rate in April dropped from 8.2 percent the previous month to 8.1 percent.
Menawhile, in recession-hit Spain, unemployment spiked to 24.3 percent, the worst rate in the EU. It was up 0.2 points since March, and 3.6 percentage points compared to last year. Youth unemployment ballooned to a 51.5 percent, up from 45 percent last year.
Friday’s seasonally adjusted figures follow on from last week’s European Union summit, where leaders including the new socialist President of France Francois Hollande called for measures to boost growth and employment to offset the impact of stringent austerity policies. Experts argue that targeted measures could help get people, especially youngsters, off the unemployment lines.
Austerity has been the main prescription across Europe for dealing with a debt crisis that’s afflicted the continent for nearly three years and has raised the specter of the breakup of the single currency. Three countries — Greece, Ireland and Portugal — have already required bailouts because of unsustainable levels of debt.
Investors are concerned that Spain, which is the eurozone’s fourth-largest economy and is currently struggling to contain a banking crisis in the middle of a recession, may soon be joining them in seeking international assistance.
Financially shaky countries such as Spain are facing rapidly rising borrowing costs on bond markets, a sign that investors are nervous about the size of their debts. Austerity was intended to address this nervousness by reducing a government’s borrowing needs, but there has been a side effect: Economies are shrinking across the eurozone as governments cut spending and raise taxes to reduce deficits.
This has prompted economists and politicians to urge European policymakers to dial back on short-term budget-cutting and focus on stimulating long-term growth. Pro-growth measures can include reducing red tape for small businesses, making it easier for workers to find jobs across the eurozone and breaking down barriers that countries have created to protect their own industries. Some economists go a step further and say governments should actually increase spending while economies are so weak — and make reining in deficits a longer-term goal.
…
We have been good boys and girls can we have our reward now!
The Republic of Ireland’s government is to push European leaders to slash the cost of its crippling bank bailout after it secured resounding support for the Fiscal Treaty.
Read more: http://www.belfasttelegraph.co.uk/news/local-national/republic-of-ireland/republic-of-ireland-premier-kenny-wants-eu-to-slash-bailout-costs-following-treaty-vote-16167419.html#ixzz1wdT7Svwt
Don’t think the Germans will be too keen though
Germany’s banking associations voiced their opposition to a pan-European deposit guarantee scheme on Friday, pouring cold water on efforts to create such a safety net by the European Central Bank and the European Commission.
http://www.reuters.com/article/2012/06/01/germanbanks-depositguarantee-idUSWEA326620120601
Here’s how the game of chicken works. Germany wants Spain to formally accept a bailout package. It would be just on the edge of affordable for Germany right now, but it would give Germany control of Spain’s budget. Not so surprisingly, this doesn’t sound like a good deal to Spain. So instead, Spain has more or less asked the ECB to print some money and give it to their banks. There is precedent for this: It’s basically what the ECB has done with some Greek and Irish banks — although that was after those countries had already accepted bailout programs. The ECB doesn’t want to do this as a substitute for an outright bailout, so it has said no. Hence, the standoff.
http://www.theatlantic.com/business/archive/2012/06/spains-game-of-chicken/257933/
Ireland is the only one of the PIIGS that does not have a large international trade imbalance. If any can be saved, it is Ireland.
Darrell,
But how much of that is due to there cooperate tax rate and how long do you think they’ll be allowed to keep that?
http://www.businessandleadership.com/business/item/32076-low-corporation-tax-rate-ha
The results also suggest that the reduction in the corporation tax rate gave rise to the relocation to Ireland of a substantial amount of profits through transfer pricing.
Comcast home page for Saturday, June 2
Syria denies Houla killings, UN condemns attack
AP IMPACT: Almost half of new vets seek disability
Inmates, corruption rule Honduras’ deadly prisons
NATO disputes report of casualties in airstrike
Tropical Storm Beryl strengthens, nears US coast
Bieber Says He Can’t Move Eyebrow
What? What was that last one?
Oh God I’m hit! MEDIC! I can’t move my eyebrow!
Now this is where you need Patton to slap this little weasel and say….
Look son, you are going back to the front. You may get your face chewed off or you may get killed in an airstrike but I will not have an eyebrow cryer stinking up these headlines of honor!
“Justin Bieber got into a fight with a glass wall Thursday…and the wall won.”
“After accidentally running into a totally see-thru panel at his concert in Paris yesterday evening (and suffering a concussion as a result), the “Boyfriend” crooner is showing off his battle wounds of sorts, in the vain of an immobile eyebrow.”
Do ya think justin will be ok to perform? man that must hurt….and get this
And Snooki almost fell off her super high heels while still PG
http://www.tmz.com/2012/06/01/snooki-pregnant-high-heels-jersey-shore/
Is it just me or does there seem to be a Cannibal bubble?
Sat, 02 Jun 2012
Cannibal on run after warning The Sun: I can’t stop killing
Today a former transexual girlfriend of the Magnotta told how the suspected killer was obsessed with Madonna and James Dean - and would “do anything to be famous”.
And Interpol issued a “Red Notice” most wanted persons alert for Magnotta to its 190 member countries.
Police also said Magnotta could even be travelling secretly disguised as a WOMAN.
The headless male torso was found in a suitcase dumped in rubbish behind Magnotta’s shabby apartment in Montreal.
Cops today said Magnotta’s victim is Chinese student Lin Jun, 33, and that body parts were still missing.
Jun - from the east-central Chinese city of Wuhan - was last seen on May 24 and was reported missing on Tuesday.
Today at a press conference Canadian cops said Magnotta took a flight from Montreal to Europe on Saturday May 26.
They believe he carried out the murder between May 24 and 25.
But police in Canada refused to say what identity he flew under.
Marie-Élaine Ladouceur, a spokeswoman for Montreal Police, also added that Magnotta was “definitely” in Europe.
And she did not rule out he was back in England.
She told The Daily Mail: “I can’t confirm that he is in England, but he is most definitely in Europe.”
Meanwhile a French police official believes Magnotta flew to Paris before the case emerged.
Montreal Police Commander Ian Lafreniere said the fugitive could be disguising himself as a woman.
He said: “What will hinder him the most is what he used to glorify himself, the web, with all the photos we have of him.”
He added that Magnotta was someone who can disguise himself, he can change into a woman, wear a wig”
Last night the baby-faced weirdo was placed on the FBI and Interpol “Most Wanted” lists — as police discovered a grisly video thought to be live footage of the murder.
The ten-minute film shows the victim being stabbed in a frenzy with an ICE-PICK, before being dismembered, sexually abused and his flesh EATEN with a knife and fork. We investigated bisexual Magnotta, 29, when he was in Britain last December after the vile kitten video was posted on the internet.
http://www.thesun.co.uk/sol/homepage/news/4349654/Cannibal-on-run-after-warning-The-Sun-I-cant-stop-killing.html -
There will be no bottom to the international bubble until the news of cannibalism and other human travails is far more dire than the recent occasional story.
How does the Fed’s logic to buy assets in order to tamp down long-term interest rates work when Treasury yields are already at a record low, and yields on government debt have dipped to negative in Germany?
Perhaps logical incoherence doesn’t matter, given the Fed’s political impetus to “do something” about the bad labor market situation.
June 1, 2012, 12:53 PM
Stock Market Already Beating the Drum for QE3
By Paul Vigna
When’s the drumbeat for QE3 going to start? Listen carefully.
That’s right. It already has.
This morning’s Awful Awful, the May nonfarm payrolls report, is giving new life to the old stock market call for the Federal Reserve to “do something,” especially if that something happens to be another big bond-buying program, a so-called QE3.
We’re approaching “just stay alive” territory here for stocks. The S&P 500 is clinging to its 200-day moving average (1284). The Dow’s blown all of 2012′s gains. Just about everybody is running screaming for the safety of U.S. and German debt. The market will be beating the drums for QE3 not because it’ll help the economy, which is a very debatable point. The market will beating the drums for QE3 because it will help the stock market.
Brian Bethune of Alpha Economic Foresights put it this way:
Simple, right? The market has become completely addicted to the idea that when things get bad, the central bank, any central bank or all of them together, will “do something.” That something often gives the market a short-term jolt. it’s long-term effects aren’t as obvious.
There’s one other thing to consider, though. Look at interest rates. What’s the point of some Fed program designed to lower interest rates when they’re already this low? Dow Jones managing editor Neil Lipschutz hit on this theme:
Regardless of its benefits, the weakening economy is going to start a frenzied round of the market’s favorite parlor game, reading the Fed tea leaves. They’ll get a big jump start next week: the Big Kahuna himself, chairman Ben Bernanke, is scheduled to testify Thursday at 10 a.m. before the Congressional joint economic committee.
Every Fed speaker’s words are going to get raked with the proverbial fine-tooth comb for any sign, any hint, that QE3 is coming. Or something. Anything.
…
“Just about everybody is running screaming for the safety of U.S. and German debt.”
My first big laugh for the day.
At these yields, why not just go to cash? You get even more liquidity than with government debt, at about the same yields.
This comment applies doubly-so for German bonds, which currently pay a negative yield.
You don’t get paid big bucks to manage cash.
I agree. At this point it is pure “DO SOMETHING, ANYTHING!” policy.
I do not even understand how it helps the stock market, unless it is purely psychological.
Since a QE would presumably originate with purchases of bonds and other assets off the books of money center banks (Goldman Sachs, JPMorgan, Morgan Stanley, etc), they presumably would have more money on hand to invest in the stock market.
Another QE (more liquidity created out of thin air injected into the monetary system) would also presumably weaken the dollar relative to its current ultra-strong safe haven status. Since stocks represent the real value of companies, a weaker dollar translates into higher share prices (more dollars per share).
I am sure I have oversimplified the picture; would be interested in fancier explanations if anyone has some to offer.
It doesn’t put money into their tier-1 capital, which I think is all they can use to buy things like stocks.
I think the only things they can do with the reserve accounts is buy bonds, make loans, or deposit it with the federal reserve.
How is the economic recovery looking by now?
Stocks post their worst day of 2012
Shares fall sharply in their worst day of the year. The Dow has erased its 2012 gains.
By Andrew Tangel, Los Angeles Times
June 2, 2012
The stock market is now in correction territory, and investors fear the worst may be yet to come for the global economy.
Investors headed for the exits this week amid fears about Europe’s continuing debt woes and concerns about China’s economy weakening. But a dismal U.S. jobs report released Friday seemed to push investors to a breaking point.
Major U.S. indexes all posted sharp declines of more than 2% in what was the worst day for stocks this year.
The Dow Jones industrial average lost 274.88 points, or 2.2%, closing at 12,118.57. The broader Standard & Poor’s 500 index lost 32.29 points, or 2.5%, to 1,278.04. The Nasdaq composite dropped 79.86 points, or 2.8%, to 2,747.48.
Some $525 billion poured out of U.S. stocks during the last week, when the blue-chip Dow erased its gains for the entire year. The S&P was still up 1.6% for all of 2012. Both indexes were on the verge of an official correction — a decline of 10% from their recent highs — while the Nasdaq ended the day down 12% from its March 26 high of 3,123 points.
“We are correcting, without a doubt,” said Robert Verderese, a managing director at Knight Capital Group. “It’s really just chaos on a global scale right now, and today’s economic data out of the U.S. just really put the nail in the coffin.”
…
Meh. Sort of interesting to see that the media didn’t do as much moaning over the situation as it usually does, at least not that I saw. Sort of business as usual, sell in May and go away. We’ll be up to 12,500 again next week.
“The worms crawl in, the worms crawl out…”
It is beginning to seem that perhaps… and I’m going to go out on a limb here…
Perhaps building 10s of millions of condos in China, and trading them amongst speculators, driving prices into the range of 30-50 times median household income of the target market (affordable is what? 3-5x median income), letting them sit empty because no end user demand existed at the 10x inflated prices, then using the “money” earned off the price inflation to buy up real estate in India, Canada, Australia, etc, creating property bubbles there, then rolling those profits into real estate in Arizona, the Caribbean, and pretty much EVERYWHERE else in the world…
Perhaps this may not be a sound foundation for a global economy?
I do not understand how asset price bubbles may not be a sound, long-term financial strategy. They make the rich, richer, which we are told is good for all since it will trickle down.
We need a large stock of empty housing all over the planet to give the jobs creators places to invest their horde of central-bank-created wealth during the time up until when they use it to create jobs.
love it…..
The housing bubble originated to give us an asset to borrow against to allow the money creation. Now, that same housing has become a way for those that have the money, to convert it into hard asset in anticipation of mass money poofage from cascade debt default.
Amidst the month-long global market crash, I have almost forgotten about that JPMorgan trading debacle. Is the London Whale’s trading position still bleeding billions in losses at this point, or is it all contained?
JPMorgan’s Iksil Said to Take Big Risks Long Before Loss
By Bradley Keoun - Jun 1, 2012 2:44 PM PT
JPMorgan Chase & Co. (JPM) trader Bruno Iksil, known as the London Whale because his bets this year were so large, has been a leviathan of a risk-taker since at least 2010, a person with knowledge of the matter said.
Iksil’s value-at-risk, a measure of how much a trader might lose in one day, was typically $30 million to $40 million even before this year’s buildup, said the person, who wasn’t authorized to discuss the trades. Sometimes the figure, known as VaR, could surpass $60 million, the person said. That’s about as high as the level for the firm’s entire investment bank, which employs 26,000 people.
Investigators are examining how long senior executives knew about Iksil’s swelling bets at the chief investment office before losses approached $2 billion. One focal point is why the formula used to calculate Iksil’s VaR was altered early this year, cutting the reported risk by half. The change followed an internal analysis in late 2011 and was approved by top risk executives, said a person close to the bank. About the same time, half a dozen managers typically involved in such decisions moved to new jobs.
“If it was something that had that large an impact, it would have to be agreed to at the very-most-senior level within risk management,” probably including the bank’s chief risk officer, said Steve Allen, a former head of risk methodology for JPMorgan who retired in 2004. “You’re not going to make a change of that magnitude on the basis of one risk manager.
…
Apparently last week was rough on the 0.001%.
World’s Richest Lose $24 Billion as Adelson Fortune Drops
By Devon Pendleton - Jun 1, 2012 3:16 PM PT
The world’s richest people lost a combined $24.4 billion this week as concerns over Spain’s rising borrowing costs and the sputtering American job market caused global markets to tumble.
Casino mogul Sheldon Adelson lost $2.2 billion. Shares of his Nevada-based Las Vegas Sands Corp. (LVS) fell 10.3 percent during the week. On Friday, Macau casinos reported gambling revenue rose 7.3 percent in May, its slowest pace since July 2009. Adelson, 78, is the 22nd richest person in the world, according to the Bloomberg Billionaires Index.
“We seem to be bogged down in a very sluggish pattern,” John Carey, who helps oversee about $220 billion at Pioneer Investments in Boston, said in a telephone interview on June 1. “The jobs report was discouraging, and it’s been discouraging the past several weeks. It reaffirms this fear that the economy is slowing.”
…
The krill is dying off.
I don’t need no stupid krill. I eat whale.
Do you use a harpoon to target it?
Nathan Vardi, Forbes Staff
Business|5/16/2012 @ 1:42PM
London Whale Harpooned: Iksil On His Way Out At JPMorgan
The London-based trader at the center of JPMorgan Chase’s $2 billion trading loss will be leaving the bank, according to reporting by The New York Times, although he still remains employed there.
Bruno Michel Iksil has been referred to as “The London Whale” and “Voldemort,” and has been the subject of intense scrutiny since early April, when it emerged he was pursuing a daring trading strategy involving credit derivatives for JPMorgan’s chief investment office. Jamie Dimon, JPMorgan’s chief executive, last week said the trading strategy that produced his bank’s losses was “flawed” and “poorly executed.” Now, the man who pulled off many of those trades is on his way out. The departure has been widely anticipated.
Iksil’s boss in London, Achilles Macris, is also expected to leave and Ina Drew, the head of JPMorgan’s chief investment office, has already resigned as heads role as a result of the trading debacle.
…
Pure propaganda.
The authors have no idea what holdings these elite people have. Just because they own 1000 shares of X stock and that stock is down doesn’t mean they lost money. I would imagine that many are hedged or are up in treasuries. This kind of article is designed to say see the rich are struggling too. I imagine some are but this is a PR piece.
I believe you are right in some cases; in the other cases, the excess wealth is so extreme that a short-term fluctuation up or down of a few billion makes little difference. It’s not like the superrich are going to have to sell off their asset holdings to buy bread.
China Slowdown Ripples Through Hong Kong as Sales Weaken
By Paul Panckhurst - Jun 1, 2012 4:12 AM PT
China’s slowdown is rippling through Hong Kong, with the city’s retail sales rising at the slowest pace since 2009 as mainland visitors cut spending.
Sales rose 11.4 percent in April from a year earlier, the government said yesterday. That’s the smallest gain since October 2009, excluding January and February numbers distorted by the Lunar New Year holiday. The median estimate in a Bloomberg poll of economists was for a 16.4 percent increase.
The smaller-than-estimated gain came the same day as jewelry retailer Graff Diamonds Corp. shelved a $1 billion initial public offering in Hong Kong, blaming “consistently declining stock markets.” Graff’s rivals are feeling the effects, too. Chow Tai Fook Jewellery Co. billionaire Cheng Yu Tung’s net worth dropped about 26 percent this year to $15 billion, according to the Bloomberg Billionaires Index.
“Less extravagant spending by mainland shoppers is part of the issue,” said Donna Kwok, a Hong Kong-based economist at HSBC Holdings Plc. (HSBA) “Local households are also being more prudent because of increasing turbulence in financial markets.”
…
Good Morning to you all.
I think I figured out why a short sale we offered on was taken off the market. I believe the homeowner put the house on the market to get a bidding war (at least 20 offers) going to have as a backup for her BK filing.I doubt any of the offers were close to the closed comps. The house was nice, but a fixer. She already had a NOD and the house was scheduled to be auctioned June 11 (7 business days at the time.)I believe she used all us buyers, with no intention of really closing a short sale. It was not a pre-approved SS.
Although the BK isn’t going to save her house, it does postpone it in Ca from the auction. Any legal eagles have any comments or insights?
Usually when short sale gets a selected offer, it goes pending, no?That’s what I’ve seen over and over.
The lady homeowner was watching a movie in the middle of the day on the couch, and seemed nice but dysfunctional. Dirty home and clutter all over the place. The sad part was the house was actually a nice place. Short Sales are out. We blew through a lot of time on her little plot.
BTW, I heard JPMC is handing out up to $30K for homeowners to do a short sale. It is a way around the robo-signing fiasco, I heard. Trust Deed becomes refreshed (replaced), so to speak.
Short sales being fast-tracked in Palm Beach County; banks approve 54% more
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 1:25 a.m. Thursday, May 31, 2012
Short sales are being fast-tracked in Palm Beach County this year with banks approving nearly 54 percent more during the first quarter compared with the end of 2011.
Realtor Cindy Speering of Coastline Realty in Lake Worth worked on a short sale recently where the seller got $45,000 from the bank on a property that sold for $725,000.
“I think sellers are pleasantly surprised that banks are willing to work with them,” said Speering, who estimates the average short sale is taking three to four months to complete. “It used to be a very tedious and lengthy process, but that has really picked up and the time from getting the contract to closing has decreased.”
Short sales have been increasing as lenders seek to avoid lengthy foreclosures.
Q1 Change from short sales Q4 2011
Palm Beach County 1,777 +53.8%
Miami-Dade County 3,041 +32.0%
Broward County 1,831 +36.8%
Florida 15,949 +21.0%
U.S. 109,521 +16.0%
Source: RealtyTrac
14 COMMENTS
Been “in foreclosure” for years now,foreclosure mill just offered me 10s of thousands to git,I say no,they have no right.Who is dumb enuf to buy a short-saled house-clearly the paperwork/deeds/contracts are all phony now and will be forever.Criminals selling property they don’t own after stealing it–aren’t those major felonie?—I,for one,won’t be in collusion w that.
Hoys headache
4:40 AM, 6/1/2012
I’m a real estate agent who deals with short sales daily. All banks are a little different and as long as the Seller is willing to provide the necessary financials to their lender they can be done in a timely manner. Some Sellers have caught onto the lengthy foreclosure process and don’t cooperate w/ the agents in showings etc, so they can say they are trying to sell when in fact they are living rent free for as long as possible. Frustrating for buyers & agents alike.
kb
3:22 PM, 6/1/2012
‘foreclosure mill just offered me 10s of thousands to git’
See, I don’t get this. Sure, I know the servicer’s do this sometimes for publicity, but why not just send the sheriff over there for a small fee and tell them to ‘git.’ One the one hand, we are told they won’t foreclose, won’t cut the grass, etc. Then they magically offer many thousands to the FB who stopped paying what they owe? These stories are mostly BS, IMO.
“These stories are mostly BS, IMO.”
Probably, the one quote from Realtor Cindy Speering says the seller got $45,000 from the bank on a property that sold for $725,000. So I would guess that it had a $1.5 million mortgage or higher that had not been paid in years. I don`t think someone who owes $300k on a house that will sell for $150k is going to get much more than the $2k that was talked about in the settlement.
On the norris grp’s radio show, there was an interview where the guest said that many of the banks are offering some big bucks for short sale deals. That is what I heard from an escrow officer, who was pissed because the offers for a SS were more than her annual salary, and she works her tail off.She also said more banks were signing on to the BS. Foreclosures are probably getting some financial massaging as well. As an honest human, this kind of news hurts. I guess my crystal ball needs recalibrating. If I only knew then…(when we sold our home -regular sale)
“That is what I heard from an escrow officer, who was pissed because the offers for a SS were more than her annual salary, and she works her tail off.”
Ad hoc, taxpayer-funded, household-level bailouts tend to come at the expense of throwing any notion of fairness out the window…
Why do insurance companies settle, even frivolous law suits?
It is cheaper to settle than to fight and win.
They offer the deadbeat $10K to leave, because the legal costs of recreating paperwork and pushing the foreclosure through the court, to get to the point where they can legally send over he sheriff, costs much more.
“These stories are mostly BS, IMO.”
A support staff lady I know is getting $3k to “leave” the house she left a year ago.
How many times can a rent-free owner collect bribes to leave before they finally are evicted?
How many times can a rent-free owner collect bribes to leave before they finally are evicted?
Which party do they vote for?
“I believe the homeowner put the house on the market to get a bidding war (at least 20 offers) going to have as a backup for her BK filing.”
Easily done: Just list the home at 20% below market value, and a bidding war is a sure thing.
Awaiting said: “I believe she used all us buyers, with no intention of really closing a short sale.”
So? You’re supposed to use her too. Do any of you remember in the dim dark ages (before 1998) when you were supposed to bid LOW on an asset as part of the process to establish the real market price? Bid low and don’t care if you get it. It’s not like there’s a shortage of housing, anywhere. You were still living in a place while you were bidding, right?
After all, the seller is going to bid HIGH. Somewhere between high and low is the market price. Sound familiar? Like maybe something you heard in a college course on economics?
Today, sellers are particularly delusional. That means you should be bidding even LOWER. Markets can’t function if everyone tries to bid UPWARD.
How to make sure your bank is too-big-to-fail: Join the board of the NY Fed, which is the regulatory authority which decides which other banks are too-big-to-fail.
May 31, 2012, 5:00 am
Jamie Dimon and the Fall of Nations
By SIMON JOHNSON
DESCRIPTION
Simon Johnson is the Ronald A. Kurtz Professor of Entrepreneurship at the M.I.T. Sloan School of Management and co-author of “White House Burning: The Founding Fathers, Our National Debt, and Why It Matters to You.”
The historical evidence is overwhelming. Many societies have done well for a while — until powerful people get out of hand. This is an easy pattern to see at a distance and in other cultures. It is typically much harder to recognize when your own society has an elite less subject to effective constraints and more able to exert power in an abusive fashion. And given the long history of strong institutions in the United States, it appears particularly difficult for some people to acknowledge that we have serious governance issues that need to be addressed.
The governance issue of the season is Jamie Dimon’s seat on the board of the Federal Reserve Bank of New York.
Mr. Dimon is the chief executive of JPMorgan Chase, currently the largest bank in the United States. This bank is “too big to fail” — meaning that if it were to get into difficulties, substantial financial support would be provided by the Federal Reserve System (and perhaps other parts of government) to prevent it from collapsing.
I am well aware of the moves afoot to carry out the intent of the Dodd-Frank reform legislation and to make it possible for such banks to fail, with consequent losses for their creditors. In my assessment, we are still a long way from putting in place the necessary resolution mechanisms and backing them up with sufficient political will.
If Greece were to default tomorrow — a hypothetical scenario, although I am worried about the current European trajectory — and this had devastating effects on the European and thus the United States financial system, would JPMorgan Chase be allowed to go bankrupt in the same fashion as Lehman Brothers? It would not.
The Federal Reserve Bank of New York would be a key player in the decision on how to provide support and on what basis to huge financial institutions in distress — although the final determination would presumably rest with the Board of Governors in Washington.
…
“The historical evidence is overwhelming. Many societies have done well for a while — until powerful people get out of hand.”
Yeah, and some powerful people start acting very odd, calling for things like mass relocations of immigrant populations and banning Big Gulps. I hope the Bloomer keeps it up, because it so nicely illustrates the sheer insanity of some of these folks.
Bloombergs rule is crazy.
I can see putting a tax on soft drinks with the rationale that they create a lot of disease that is eventually paid for by the state and society but to outlaw large drinks is insane.
Ever try and navigate NYC…..its not for the fat let alone the obese Not many subway stations have handicap access elevators to street level.. hard putting a wheel chair on an escalator….
And buses sure they kneel but all the old buses still require you to pull yourself up 3 steps to get in..only the new low ride buses are at curb level…
Same now with cabs..the big old checker cabs are getting hard to find even the mini vans are small…But NYC has an extensive access a ride program..
I think it was a stupid idea to ban large drinks…because you just don’t see many “People of Walmart” living in Manhattan
You cannot buy a 17+ oz soda because it will make you fat. You CAN still buy a 17+ oz milk-shake or frapachino, even though those beverages can have 2-3x the number of calories.
Can only buy a 16 oz, 200 calorie, soda not a 32 oz, 400 calorie, soda to wash down your 1200 calorie burger and 800 calorie super sized fries.
Who in the corn sugar market POed Bloomburg?
How does this affect 40’s? I was going to have a Brass Monkey in memory of MCA next time I’m up there.
It is not “corn sugar.” It is high fructose corn syrup. Don’t fall for the industry propaganda.
“corn sugar” is basically Caro corn syrup, which isn’t quite the same.
Bloomberg is acting more and more like the king of NYC, issuing totally illogical decrees about what kind of food or drink are OK for the peasants to consume.
This is yet another reason to thank God I don’t have to live there.
“that funky monkey”
Mayor doucheberg reminds me of the Dr. Raymond Cocteau character in the Movie Demolition Man.
Comment by measton
2012-06-02 07:35:29
Bloombergs rule is crazy.
I know! He sounds like a liberal.
“Financial Innovation$” … requires … “Financial Nutrition$”
“Hey where’s the Lehman gang? Anyone see where those Lehman Bro$ went?”
http://i1.trekearth.com/photos/2543/hungry.jpg
“If Greece were to default tomorrow”
Tomorrow! Tomorrow! I love yah, tomorrow!
You’re always a day away!
Evidently some other societies are holding their leaders accountable where malfeasance occurred. Time will tell whether the trend catches on here in the U.S.
Egypt’s Mubarak sentenced to life in prison
By HAMZA HENDAWI, Associated Press – 35 minutes ago
CAIRO (AP) — Hosni Mubarak was sentenced to life in prison Saturday for failing to stop the killing of protesters during the uprising that ousted him, offering his opponents a measure of justice. But he and his two sons were acquitted of corruption in a verdict that did not satisfy public demands for accountability after what the chief judge called 30 years of “darkness” under the old regime.
The mixed ruling set off street protests and by nightfall, a large crowd of up to 10,000 was back in Cairo’s Tahrir Square, the birthplace of the uprising, to vent anger over the acquittals. Similar protesters were held in other cities, including the Mediterranean port city of Alexandria and Suez on the Red Sea.
“Justice was not served,” said Ramadan Ahmed, whose son was killed on Jan. 28, the bloodiest day of last year’s uprising. “This is a sham,” he said outside the courthouse.
Protesters chanted: “A farce a farce, this trial is a farce” and “The people want execution of the murderer.”
…
How often anywhere over the course of history have government bond yields gone negative?
The Euro Crisis
Real-time updates and analysis of Europe’s debt crisis
June 1, 2012, 11:18 AM
Negative German Yields Highlight Euro-Zone Woes
By Tommy Stubbington
Yields on ultra-safe government bonds from U.S. Treasurys to German Bunds plunged to record lows Friday, turning two-year German yields negative, as weak economic data exacerbated mounting concerns over the fate and composition of the euro zone.
Treasurys, Bunds, U.K. gilts and French, Dutch, Finnish and Austrian government bond yields all hit all-time lows, as a further manufacturing slump in May added to the list of woes in the currency union.
Spanish bond yields, already at levels considered unsustainable in the long run, continued to rise as fears about the country’s troubled banking system and highly indebted regions persisted.
Yields on the two-year German note, known as the Schatz, sank to an all-time low of -0.005%, according to Tradeweb, as investors increasingly warm to the idea of paying to park their cash in times of trouble.
But even more ominously, negative yields may be a sign that many investors are betting on a break-up of the euro area. The end of the single currency could have a silver lining for some investors, if assets acquired in euros were redenominated in a new German currency that would be likely to gain in value against its peers.
“The market is pricing an increased probability of a break-up of the European monetary union and a subsequent strengthening of a new Deutschmark,” said Mark Schofield, head of interest rate strategy at Citi Investment Research.
With this in mind, two-year yields could sink as low as -0.4%, and negative yields could extend to maturities of up to four years, Schofield said.
…
Except for some sophisticated trading strategies, why on earth would anyone with 1/2 a brain buy a bond that has a negative yield? Just keep it in cash seems to make a lot more sense to me. When the yield is negative, what the heck, people expect it to be more negative (leading to bond appreciation)? I guess that’s the game, but, man, what a crazy idea.
Cash can be stolen. Checking accounts have government guarantee limits. Brokerage accounts have fees, not to mention the risk of a MF Global.
Where are you going to put your money that is safer than a German government bond? Real estate in Phoenix AZ?
1. F.D.I.C.-insured U.S. bank accounts, for amounts smaller than $250,000.
2. U.S. Treasury bonds, for amounts exceeding $250,000.
Except for some sophisticated trading strategies, why on earth would anyone with 1/2 a brain buy a bond that has a negative yield?
Think large money-flows. It may be practical to go to cash with thousands of dollars, but it is fairly impractical with hundreds of millions or billions.
I guess the other question (to which I don’t know the answer) is whether the German banking system offers deposit insurance. Without deposit insurance, if there is some risk your bank deposit would go POOF in the event of a worst-case financial scenario, it might be preferable to incur the insurance premium of a negative government bond yield in exchange for the assurance that your money will be returned.
And now for a dumb question: Do German bunds pay out in Euros? If so, how will investors be made whole in case the Eurozone collapses? I suppose a more likely outcome than all-out collapse would be for some countries to leave the Eurozone, at least until they get their sovereign finances into order; for instance, perhaps a contingency plan to kick Greece out temporarily with terms for returning after a few years of existence in financial purgatory could work. Meanwhile, the Euro would be representative of the economies that stayed in the Zone, which on average would be stronger than the current constitution of the Eurozone. The increase in value of the Euro upon Grexit would partially explain the negative bund yields, but it still would appear more logical to simply buy Euros and stash them under a proverbial mattress.
Ahansen: Dang, Charlie. I skip one itty bitty little season up there and the whole place goes under….
Seriously, if you get a chance, what happened? I didn’t see any over-spending on the mountain last time I was there, although the town seemed overbuilt and under-occupied.
Ian closed Restaurant Skadi just last week, but ski area spending, and overbuilding the town ( workforce housing is an exception ) and our private buisness issues are all unrelated.
The town (8,400 pop) brings in about $15M on a bad year and is highly dependent on TOT taxes which fluctuate with snowfall amounts. A small group of investors bought a judgement that required the town to pay Hot Creek Aviation $30M, that judgement today is worth $43M and the investors, MLLA now have a writ of mandate requiring payment in 29 days from today.
The town’s position is that we are unable to pay the judgement or even a $2M down payment on a 30 year deal that was offered so we are headed into a “fiscal emergency” and a chapter 9 filing this month.
What is interesting is that there is no leadership and no local control of our destiny. Though BK is clearly the only reasonable option it is generally opposed and being forced upon us due to no action on our part other than kicking the can down the road.
We remain somewhat full of ourselves, saying that tourism marketing is clearly an essential service that can’t be taken away and much other similar silliness. In my view this town has existed to benefit the town staff and to a degree local politicians. The town staff has always behaved in a dishonest and corrupt manor and in the case of Hot Creek Aviation the staff refused to honor a development agreement because the resulting development would prevent the FAA from participating in future airport development.
It has been alleged that the ski area’s CEO had the town manager replaced with a yes man that would “get rid of Hot Creek” so that we could plan on having 757s flying in here.
This corrupt town govt has personally cost me a fortune and we have had to suffer under a corrupt police force as well and I have been an advocate of dis-incorporation for many years.
In the process of budget cutting last year we fired the assistant town manager because she cost something like $150k and this year we hired a new one that costs more like $250k.
Who will this all land on? Town residents, 2nd home owners and skiers.
If enough services are cut some residents will not be able to work and live here? Snow removal is a huge cost here, are we entitled to that?
2nd Home owners always get screwed here because they have no write to vote in local elections so tax measures can be assessments on properties and can’t be opposed by the majority of home owners.
Skiers might be subject to an entertainment tax.
Its all speculation at this point.
When government goes insane - they always look to what can be taxed even more.
The insanity can be a corrupt administration, public unions or someone’s insane pet project (incinerators, light rail, etc.)
Housing is usually the answer. Skiers can go to other slopes. Business can move.
Homeowners are stuck. They can either pay higher and higher taxes, sell or declare BK. None of these options are easy.
That is why you will never really own your house. That is why it is not your private property. You just rent the place from the state. There are many areas of the NE where an average 4 bd/2 bath house has property taxes of $15,000.
That is why you will never really own your house. That is why it is not your private property. You just rent the place from the state. There are many areas of the NE where an average 4 bd/2 bath house has property taxes of $15,000.
n. dakota has a measure up for vote in the november elections, to totally eliminate property taxes. if it passes, i believe it will be the only state without property taxes. it would be a giant blow to socialism that would have many liberals howling about how ‘unfair’ it would be to everyone else in the USA that had to pay property taxes.
if it passes, i believe that real estate prices will rise faster than they are now in n. dakota. no more renting from the state. no one can take it from you if you suddenly hit hard times, and can’t pay your property taxes.
There is at least one township in NJ where property taxes average $23,000 for a 3/2.5 bath.
There is at least one township in NJ where property taxes average $23,000 for a 3/2.5 bath.
yep, and if you don’t pay your nearly $2,000 a month in rent to the state of NJ, you lose your home. how much uglier can it get? wait.. i don’t want to know.
or whatever government one has to pay in that township.
There is at least one township in NJ where property taxes average $23,000 for a 3/2.5 bath.
yep, and if you don’t pay your nearly $2,000 a month in rent to the state of NJ, you lose your home. how much uglier can it get? wait.. i don’t want to know.
*********************************************************************
People due lose their homes over propterty taxes…but have no fear as a new NJ law only allows your taxes to go up 2% per year. Cities and Townships now require “user fees’ or services.
So you get a 2% property tax raise every year and have to pay for services you used to get for free.
Once you decide that you are not going to tax the people with the money, because the sole purpose of the economy is to ensure those people can accumulate ever more money, then yeah… finding things and people to tax becomes more and more difficult.
what??
It is a freedom thing.
Some people just don’t get it.
Freedom from military protection, good roads, an educated population, police and fire protection…
Sounds like life in a Third World country!
Amazingly - we had ALL those things before income taxes. Before state taxes. Before property taxes. Before sales taxes. And before $15,000/year property taxes.
Liberals/socialists are so predicable. Cut ONE government program and we starve children, throw grandma in the street and pollute the air.
Except liberals really don’t care about kids, grandma and the air.
They care about POWER.
The bigger government is, the more taxes it takes in - the MORE power they have…
“Cut ONE government program and we starve children, throw grandma in the street and pollute the air.”
Why not post your strawman bullsh!t on the Rush Limbaugh blog?
well said 2banana. in addition, all the above except the military could be done privately. some claim even the military could be, but i see that as being problematic.
we don’t want anarchy, just a government that is as small as possible, while maintaining its proper constitutional role.
hmm.. i answered this post quite some time ago and it hasn’t appeared yet, so i’ll try again.
well said 2banana. in addition, all the things you mentioned except the military, could be supplied better by the private sector. some even claim the military could be done privately, but i think that would be problematic.
we don’t want anarchy, just a government as small as possible that can fulfill its constitutional role.
Before income taxes, there were no antibiotics, surgeries were done without even sterilizing the bone saws, no X-ray, no MRI, no cancer treatment to speak of, no treatment for heart disease.
High child mortality combined with near total lack of healthcare meant life expectancy from birth was all of 39. If you managed to make it through early childhood, to 10 years old, you could expect to live to a ripe old age of 58.
Before income taxes, the army was fractured into state militias that were funded through a wide variety of state taxes.
Social Security, healthcare, defense and interest are $2.7T of $3.7T national budget. Higher if you add in retirement and healthcare of federal government employees.
So, what is your plan for smaller government? Return to archaic healthcare, state militias and a life expectancy of 40-50 years?
I wish Republicans would run on the platform, we want to end Social Security, Medicare, Medicaid, DoD, and VA.
Before income taxes, there were no antibiotics, surgeries were done without even sterilizing the bone saws, no X-ray, no MRI, no cancer treatment to speak of, no treatment for heart disease.
and we would have made even faster progress in all those areas if we’d have stayed without economy hindering income taxes.
High child mortality combined with near total lack of healthcare meant life expectancy from birth was all of 39. If you managed to make it through early childhood, to 10 years old, you could expect to live to a ripe old age of 58.
by that logic we should keep raising income taxes to raise life expectancy. let’s also add some regulations that demand that we live to at least 90 while we’re at it.
So, what is your plan for smaller government?
start reducing taxes and make it permanent. start to abolish entire government departments. start carefully repealing regs beginning with the latest and most unnecessary like dodd-frank, and obama care. keep in mind that we need regs like glass-steagall as long as there is an FDIC.
that’s a start.
Return to archaic healthcare, state militias and a life expectancy of 40-50 years?
that’s what we’ll return to with the march into socialism.
I wish Republicans would run on the platform, we want to end Social Security, Medicare, Medicaid, DoD, and VA.
means test for all of it. after that slowly move completely out of it (might take 2 decades). if we did all that, we’d a stronger economy with more and higher paying jobs. as the economy strengthened, so would the dollar. and a strong dollar is nothing to fear even for exporters. with a stronger dollar they can make their products even cheaper. and the money you saved all your life would be worth more than when you began to save it.
and we would have made even faster progress in all those areas if we’d have stayed without economy hindering income taxes.
A big claim, yet the societies with good infrastructure are the ones with “taxes” whereas the 3rd world nations, where hardly any taxes are paid, are … third world nations
Return to archaic healthcare, state militias and a life expectancy of 40-50 years?
that’s what we’ll return to with the march into socialism.
Funny how “socialist” countries have higher life expectancies than the John Galt paradises.
And BTW, I’ve lived in a 3rd World country. Taxes were rock bottom. I think our property tax on the house was something like $50 USD a year.
I would never go back there.
A big claim, yet the societies with good infrastructure are the ones with “taxes” whereas the 3rd world nations, where hardly any taxes are paid, are … third world nations.
the taxes are low because you can’t get blood from a turnip. the poorer a population becomes, the less taxes they can afford.
Funny how “socialist” countries have higher life expectancies than the John Galt paradises.
even if that’s true, correlation doesn’t prove causation.
I’ve lived in a 3rd World country. Taxes were rock bottom. I think our property tax on the house was something like $50 USD a year.
they were probably high as a percentage of average income. at any rate, poor countries simply can’t pay high taxes. that doesn’t mean that a rich country’s taxes should be high.
“in addition, all the above except the military could be done privately.”
Wrong.
“So, what is your plan for smaller government?”
As I understand it, the Republican plan is to bitch about the government being the root of all problems until they get a Republican back in the WH.
What they do after that point is anyone’s guess.
My guess is spend a whole bunch of money and nobody will question them on it.
You so called liberal democrats kill your brand with social justice, nanny statism , globalism, Communism/Marxism, open borders (to expand your dependent voting block) and corporate-government fascism.
You so called conservative republicans kill your brand with Uber Religious nanny statism, global Militarism, globalism, open borders (to bring in low wage worker slaves) and corporate-government fascism.
Just a few points and just my view, but notice how some of those issues cross. We are getting it from both sides.
“You so called liberal democrats…”
Only a black-and-white thinker would assume that someone who criticizes Republitard thinking is automatically a liberal Democrat. I’m not.
“wrong”
not wrong. that article proves nothing either way.
As I understand it, the Republican plan is to bitch about the government being the root of all problems until they get a Republican back in the WH.
sounds like a liberal whining about losing the coming elections.
Only a black-and-white thinker would assume that someone who criticizes Republitard thinking is automatically a liberal Democrat. I’m not.
your use of ‘republitard’ and ‘democrat’, show exactly how biased you really are.
I know a guy who was driven to bankruptcy by the corrupt administration near Big Bear. His development project was strung along and along with ever changing requirements. He had completed a couple of homes and couldn’t move them. Wiped him out.
He obviously failed to make the correct campaign contributions.
Campaign contributions is the only way to things done in NJ.
“Pay to Play”
“…Ian closed Restaurant Skadi just last week,…”
GAAAAAAAAA! This brings me great sadness. Please thank him for his many years of service to the community and for too many fabulous meals to count?
That airport has been a legal pain in the hmmm hmmm since it was an airstrip back in the 1950’s. I can only imagine how the consortium now suing the town managed to get the judgment, but have no doubt that town management demonstrated the same cronyism it always has in the whole sordid affair.
I think Mammoth’s problem has always been that that it takes itself too seriously as a ski resort. The LA people who truly have money go to Aspen, Beaver, and points abroad, while Mammoth attracts the laid back surfer dude and valley riff-raff crowd. In the summer, all you really have to offer is fishing, and “sight-seeing” yet the management envisions itself as some sort of “destination resort” and tries to bill itself (and charge) accordingly. Hint: Rednecks aren’t into golf and tennis.
Don’t get me wrong, I love the place; but not for the “industrial” atmosphere. It is, at its heart, a good old boy town, so second-homers shouldn’t be surprised when it’s run that way. I’ve always seen it as a microcosm of America at large. It will be fun to see how it outwits these big-city scalpers with their 757 dreams.
Thanks for the post, CT. Should be an interesting summer!
I believe Ian took a job as executive chef at the White Bark at the Weston so you can see how he’s doing post Walking Beam.
I have always refereed to Mammoth as the “K-mart” of ski areas.
Below is my exchage with a lying realtor…. word for word… I took out his/her reply inbetween…. look at the dates. Since then, the seller reduced the price in $10k increments from $380k to $340k.
WTF did I say? What did I tell you? Guess what??? The place is still sitting there…. for sale at a grossly inflated price with no buyer in sight.
Now tell me…. with a buyer ready(me) at $225k cash(that’s all it’s worth), a seller servicing two mortgages in two different states, and a realtor attempting to sell it at an inflated price, just who is this realtor representing? Certainly not the seller. Between the price declines and servicing a mortgage payment on this dinosaur, their losses are in the tens of thousands of dollars.
So tell me realtors….. You’re reading this….. just whose interests are you representing?
——————————————————————————————–
Thursday, September 22, 2011 7:53 PM
There is nothing “nasty” or rude about a short sale and you’re taking this all too personal. It’s the reality of things and it will continue as this *is* “the market” and will be for a very very long time. Again, when you’re ready to short, please contact me. There is no sense in your seller defaulting.
—————————————————————————————
Date: Thu, 22 Sep 2011 16:12:43 -0700
xxxxxx,
Chasing the market down with minuscule adjustments is a failed strategy and makes for a painful ride down. Mail me when you’re ready to advise your client to short.
Here in Monterey county we are seeing a lot of infrastructure building going on.Small business owners are getting large contracts on government installations (perhaps year end spending, use it or lose it).More small niche businesses going out of business.
What I am seeing is old strip malls, with half their shops empty, doing remodels in hopes of bringing in more businesses.
There are 2, on opposite corners of Central and Thomas, in what was once considered Phoenix’s “midtown” financial district (lol) with half their space sitting empty, doing these remodels.
There are large office towers, more than half-empty, along Central Ave along this stretch.
The shopping center by my house, anchored by a grocery store, is also remodeling. New paint, new facades, repaving, etc. They are chopping up their old Blockbuster into 3 smaller units.
Across the street from that strip mall is another one, also anchored by a grocery store. It too is half empty. I wonder when it’s remodel will begin.
In Phoenix, we doubled the amount of retail space in less than 5 years. And now these retail space owners think they can fill their half-empty strip malls with new paint, signage and a parking lot repave?
Games realtors play
Details of the house
http://www.zillow.com/homedetails/1330-Owahgena-Rd-Cazenovia-NY-13035/30827854_zpid/
http://www.cnyhomes.com/Listing/Search/info.cgi?mlnum=S271758
Well realtors? Why the lies, mispresentations, misinformation and obfuscation?
Exquisite first floor master bedroom and family room will be added to the existing floor plan and will take advantage of the dramatic cow pasture views from every window.
Moooooo.
………PLOP….
Martha…. I’m headed down to pick up a dozen pasture pastries.
SUGuy, is there any chance if my family moving back? What’s happening up there? We still look, but we’re shut out on education, so we’d have to do something else, but I have no idea what.
Any input of who’s hiring and for what — if at all — would be appreciated. I’d make like my dad and be a salesman, but even that seems dead.
I think you’re nuts for going back and recreate a career Mugz. You left for a reason and I’ll wager that reason was due to evaporating economic opportunity which is the same reason I left. I don’t know when you left but there is even less opportunity there now.
“I don’t know when you left but there is even less opportunity there now.”
Very well, where do I begin? My father was a relentlessly self-improving boulangerie owner from Belgium with low grade narcolepsy and a penchant for buggery… I graduated from UB in 2000, and since my lady friend, now wifey, was a year behind me, I tried to stay in Buffalo but only had one job offer: part-time waiter. At the time, one of political fellas was running a “Keep our Kids in Buffalo” campaign. Ha! So much for that.
So, in the fall of 2000 I got an inside tip and took a job in NYC in a music production house and quickly ascended from studio gopher to staff composer. It was a lot of fun, and being in NYC with a little spending cash in my early to mid 20s was a trip. But then 9/11 happened, and that got me thinking… I knew I was going to be a family guy, and I was looking at all these composers that were working under crazy deadlines and hours, thinking, “if I am lucky, this is what I’ll be like in ten years.” Plus, housing was expensive.
So, in 2003 I moved back to Rochester and bought a modest 2/1 condo and did some freelance music stuff and worked as a Title I Computer teacher at a school my friend worked at. I loved it, and knew that teaching wold be a great fit for me and my family.
In 2005 my FIL sent us a newspaper article about alternative teacher certification in Pinellas County, and here I am.
So, yeah, I left because there was no opportunity.
and a penchant for buggery…
Hopefully said penchant was not exercised upon you, Muggy!
My father was a relentlessly self-improving boulangerie owner from Belgium with low grade narcolepsy and a penchant for buggery…
LOL! That’s some eulogy, Muggy.
Syracuse is a city that will one day become a village. It just needs time
Magna is closing and 400 people will be going out soon. Carriers tore down their biggest building and what is left is a big park where the grass won’t even grow much. Lockheed Martin is going to layoff. I see lot of small to mid size companies closing up shop and selling their inventories via the auction block. Commercial buildings for sale are increasing in numbers. The local property taxes are a killer to most people. The young educated kids who grew up here have no choice but to leave the area. The worker –bee Billy bob’s are fighting over $10 to $12 per hour jobs. We are also getting an influx of immigrants from Africa and the Middle East who usually end up on welfare.
Su, Upstate hospital has been getting money from the State and are building a few buildings. That is about it. The towns are also getting money and they are replacing their equipment.
If you can get stable income the area is decent to live. Manlius, Cazenovia, Dewitt, Skaneateles are nice towns except for property taxes.
Sorry about the not so happy outlook.
“Sorry about the not so happy outlook.”
No prob, I asked…
Upstate New York is gorgeous. Absolutely jaw-droppingly beautiful.
Too bad that the property taxes are so ridiculous.
It’s not my style of living but I could totally see why other people who like it could easily fall in love with the area.
Bonus: They are never running out of water. Something that is guaranteed to be a problem down the road.
“Upstate New York is gorgeous.”
Late summer/fall in the Finger Lakes = best thing in the world.
“Absolutely jaw-droppingly beautiful.
…
Bonus: They are never running out of water. Something that is guaranteed to be a problem down the road.”
Similar comments apply to the Pacific Northwest. So long as you don’t mind rain and love the color green, it’s a great place to live. I won’t be too shocked if we eventually go there…
So long as you don’t mind rain
Some people find the number of grey days oppressive.
But if you can adjust to that, it is a great place to live. Summer is perfection.
“The worker –bee Billy bob’s are fighting over $10 to $12 per hour jobs.”
Woa…. there it is. This is stunningly accurate.
If the MSM is worrying about June auto sales in light of the dismal month of May’s jobs and stock market indications, then what about summer 2012 housing sales?
Though autos are big ticket items, houses have far bigger tickets.
U.S. economic concerns could mean trouble for June auto sales, analyst says
Published: Saturday, June 02, 2012, 9:30 AM Updated: Saturday, June 02, 2012, 11:31 AM
Michael Wayland
AP File Photo
According to industry experts and analysts, the industry’s annualized sales pace is expected to come in at about 13.8 million vehicles — the lowest of the year.
DETROIT, MI- On the surface, the U.S. automotive industry appeared to continue its triumphant return to pre-recession levels in May.
However, the devil is in the details.
May sales totaled 1.3 million cars and trucks, up 26 percent from the same month a year earlier, but the industry’s annualized sales pace was about 13.8 million vehicles — the lowest of the year.
Jesse Toprak, vice president of industry trends and insights for TrueCar.com, said the industry didn’t do as well as it has been this year, but it could have been worse.
“If you look at what happened in May in terms of macro economy trends that typically correlate with new vehicle sales … all were dismal in May,” he told MLive.com. “Based on historical correlations, if the new car market acted the way it traditionally acts, it should have been far worse.”
Those “economy trends” include the stock market, Dow Jones industrial average, which erased its 2012 gains; U.S. unemployment, which rose for the first time in 11 months; and consumer confidence.
…
I have always wondered are the sales numbers for individuals or sales which include companies such as rental firms. I would think that individuals purchasing would be an indicator of the financial health of the average person.
A lot of those ’sales’ are from leasing and that is just a financiar’s fancy term for ‘renting’.
Warren is the only high profile person who’s talked about trying to clean up the core of the financial crisis - shoddy lending.
Whoa - this was supposed to be in response to Unknown Tenant’s Elizabeth Warren post. Mea culpa.
That’s why Republitard hacks like our Two-ti-fruity are attacking her. The Wall Street banksters provide them with lotsa campaign contributions.
I just thought of something. Romney really is Wall Street’s horse in this race. So they’re going to pull whatever levers they can to get him in. I wonder how that’s going to look.
Don’t get me wrong - Obama… he talks a good game. But he doesn’t actually do anything of substance. He chose Eric Holder as his head of the Justice Department. Holder was a partner in Covington, a major law firm with the big financial firms as clients. Partners are the ones who bring in business. He made millions annually. What’s he make now, a couple hundred grand? He’s going back to that world after this. He’s not going to jeopardize that by doing anything substantive on the prosecutorial front and alienate the clients.
So… the single issue voters are going to move predictably to their parties. Economic issue voters… I dunno. If Obama really gets little support from Wall Street, would he be more willing to bring it under control?
I’m a little surprised Wall Street would be so one-sidedly supporting one candidate, typically they throw big money at both sides. I wonder if the donations will even out as we get closer to the election.
It comes down to the electoral math. A candidate must receive a majority of electoral votes. Based on the electoral maps I’ve seen, Obama is a juggernaut with the electoral college.
The political season is always interesting. The best I can hope for is the marginally least bad candidate wins.
Did someone say a few weeks ago one of their kid(s) goes to BASIS? It’s up there:
http://www.usnews.com/education/best-high-schools/national-rankings
Records: Prof profited by buying, selling homes
By Jerry Kronenberg and Christine McConville
Saturday, June 2, 2012 - Updated 13 hours ago
Elizabeth Warren, who has railed against predatory banks and heartless foreclosures, took part in about a dozen Oklahoma real estate deals that netted her and her family hefty profits through maneuvers such as “flipping” properties, records show.
A Herald review has found that the Democratic U.S. Senate candidate rapidly bought and sold homes herself, loaned money at high interest rates to relatives and purchased foreclosed properties at bargain prices.
Herald columnist Howie Carr reported yesterday that Warren and her relatives also profited from two additional Oklahoma City foreclosures — in both cases showing triple-digit percentage gains.
Warren’s campaign issued a statement last night: “Elizabeth and (her husband) Bruce are fortunate to be in a position where they can help their family. They have been able to help relatives buy their homes and her nephew — a contractor — fix up houses.”
However, Warren and her family’s private investments don’t seem to square with her public statements about the latest real estate boom and bust.
“We are in the midst of one of the greatest economic crises in our country’s history — a crisis that began one lousy mortgage at a time,” the Democrat wrote on her campaign website, which also decries “a deregulated credit industry (that) squeezed families harder, hawking dangerous mortgages.”
http://www.bostonherald.com/news/politics/view.bg?articleid=1061136010&srvc=rss - -
I do not understand. How is a quote about bad mortgage lending in any way contradictory with buying, fixing up, and selling houses?
Is there evidence that the people she was selling to were using crud loans? Was she encouraging people to buy with $0 down, interest only, no doc, ARMS?
And, they talk about how she profited, but no where does it talk about closing costs, refurb costs, etc.
Buying a house for $50K and selling it for $55K is NOT a 10% profit.
Take the story for what it is: A political smear campaign.
Yeah - cause engaging in house flipping and ensnaring people in predatory mortgages are great things to do.
We all here on this blog had NO ISSUES with that.
Go ahead a defend her all day. What a laugh it is.
Maybe the dems can get Mozilo to run for senate too…
What the F is wrong with house flipping? I have zero problme with it as long as you are willing to pay the dues if your bet sours and didn’t lie to get a loan. There is zero evidence she did this. Are you saying 2b that you wouldn’t buy a house for 100k if you thought you could sell it later for much more. Is there something wrong with this? Isn’t this the capitalists dream buy low sell high. There is absolutely no difference between house flipping and buying and selling stock zero. You really are a knuckle dragger.
“What the F is wrong with house flipping?”
Spot on. I think the problem is if anyone does it except for Megabank, Inc, the PTB think there is something wrong with it.
Megabank, Inc also thinks they should be the only short sellers; the rest of us are supposed to always be long assets, to give them better sheeple shearing opportunities.
Viva la laissez faire!
RETURN ON HER INVESTMENT: Elizabeth Warren purchased this Oklahoma City home at 200 NW 16th Street for $30,000 in August 1993, then sold it for $145,000 five months later.
She ain’t no Mother Teresa.
Do you know any attorneys who resemble Mother Teresa? The only ones I know who resemble her are public defenders…
Do you know if they did any renovation of the house?
Nope
It is fun to watch the liberals here bend over backward here on this blog to defend the 32/32 house flipper of a senate candidate who can’t keep her story straight for 2 days.
Anyone here remember Casey Serin?
It is the same with obama. They will defend him to the last no matter how much he tanks the economy, no matter how many banks and “friends of obama” he bails out, no matter how many wars he starts/expands and no matter how much debt he racks up.
Blind kool-aid drinkers. They will never see the landslide coming in November.
Ignore the Republican troll.
Single issue voters will flock reliably to either party.
Economic issue voters… that remains to be seen.
My god man! This woman and her family are clearly criminals.
Pay no attention when the “tribe” loots the treasury for 1,000 Billion +, it’s people like this serial flipper that must pay.
The truly sad thing is many, many people will fixate on this non story and remain oblivious to the criminality that surrounds us daily.
Only Wall Street’s Megabank, Inc is legally allowed to do whatever the hell it wants to in transacting financial deals. The rest of us are all immediately suspect…
Nice straw man.
See those guys over there. They do really bad things so let’s just ignore the bad stuff over here cause it is less of bad stuff.
It is the logic of 2nd graders.
How about we punish both of them (in proportionality)?
The bankers and cronies of obama get 10 years in prison.
Elizabeth Warren gets to spend 5 years on reservation running a casino to figure out what it means to be an indian…
and PAY BACK every affirmative action program she used to get ahead.
“It is the logic of 2nd graders.”
With all the Republican party line canards you serve up here, you certainly are the expert!
I don’t care if someone flip houses in a RE Boom.
I do care when the game of musical chairs ends and, now, they are victims and want some kind of personal bailout all the while those who play by the rules get screwed. Just take your house flipping loses and go live in your car.
Yes, no one should claim “American Indian” ancestory without the documentation. A liberal Professor in Colorado got booted out for it, whats good for the goose is good for the gander.
Actually Ward Churchill got canned for academic misconduct:
“Mr. Churchill was dismissed by the university in July 2007 on grounds that he had plagiarized and falsified parts of his research on the persecution of American Indians. But he has always claimed he was punished because of the essay. ”
http://www.nytimes.com/2009/03/24/us/24churchill.html
2b please tell us what’s wrong with buying a house as an investment, fixing it up, and selling it for a profit. What’s wrong with loaning people even family members money to make investments?
Absolutely nothing…
As long as it is your money…
No liar’s loans..
No “no-doc” loans…
No “friends of Mazilo” loans…
No affirmative action loans…
No over-leverage loans that the average guy could not get..
No “government” loans that tails you win and heads the taxpayers pays loans…
No straw man buyers…
No fraudulent buyers…
Etc.
And lending mortgages to people at 9.5% while interest rates are at 4-5%…what is the name the Cherokee Senate candidate had for bankers that did that again?
Nothing at all wrong with it.
Just explain it to the voters in full detail.
And how you can square your small fortune for the regulations and laws you now want to implement.
“How about we punish both of them (in proportionality)?”
Dos Chiquita,
I’m very much in favor of prosecuting the financial criminals and those that enable them. Politicians too, but I repeat myself.
I’m not sure E. Warren has broken the law. The only thing I have seen is political mud slinging. Surely due to her watchdog ideology. The boyz don’t like that.
As for affirmative action? Well, when you promote people based on skin color and not excellence you end up with the pile o’ $hit you see before us. A system collectively dumbed down to damn near third world status. And when does the AA end?
Well, never of course.
Both political parties, skunks.
“Politicians too, but I repeat myself.”
I am going to go way out on a limb here and say that there is a HUGE difference between flipping houses in 1993-1997 than 2004-2007.
“I am going to go way out on a limb here and say that there is a HUGE difference between flipping houses in 1993-1997 than 2004-2007.”
It was probably easier when you have interest free money from Harvard to loan and flip with.
By Hillary Chabot
Tuesday, April 24, 2012
“Warren disclosed the 20-year interest free loan from Harvard, which lent her between $15,000 and $50,000 in 1996, in financial disclosure forms filed with the Senate last September.”
“Brown’s campaign also pointed out that tuition has increased by at least $16,000 at the Ivy League university since 1996, when Warren’s loan was granted. She also earned a $350,000 salary from the University last year, according to her disclosure forms.”
“A Harvard University spokesman didn’t immediately respond to a request for comment.”
Elizabeth Warren: New sh#t, same as the old shit
Wednesday, 25 April 2012 09:45 Staff
Last year, Warren earned $350,000 as a professor at Harvard Law. Now, we have absolutely nothing against people making a lot of money. We’d love to make a lot of money, money is awesome, it can buy you stuff, sometimes awesome stuff. But not all money is earned equally. Tuition at Harvard is nearly $49,000 a year, 82% of Harvard Law students had to take out loans, and the average debt load was $118,500. That tuition level, and Warren’s salary, are artificially inflated by the endless stream of government backed student loans.
Harvard graduates are of course better situated than most to get jobs that will allow them to pay off those loans, but with an above average debt load and an endowment large enough to cover all costs for another 50 or so years, it’s somewhat distasteful for Harvard to ask students to take out bigger loans to pay Elizabeth Warren so much money.
It’s especially distasteful when, according to Harvard’s course catalog, Elizabeth Warren taught only a total of 4 credit hours in the 2011-2012 school year, and no classes in 2010-2011. She earned over $6000 an hour for her time in the classroom. If someone offers you that rate, for the love of God take it. Just don’t be surprised when it hurts your credibility when you portray yourself as a champion of the middle class and complain about a lack of economic support for students.
BILA, we need an update on your stock portfolio.
Ouch! He has been mighty quiet as of late. The month of May 2012 was quite unkind to anyone whose portfolio is long on stocks and gold.
You guys are cruel!
Note who’s saying it.
Wow, called cruel by FPSS.
I’ve arrived.
Here’s the soundtrack to BiLA. His own personal national anthem.
http://www.youtube.com/watch?v=8aRor905cCw&ob=av3e
I did not click on the link of course. Last time someone said “Here’s Bill…” was in junior high. What maturity level is FPSS?
Negative 7,000. (It’s funnier in Japanese.)
Wow — a New York City compliment! I wonder how often it happens that a New Yorker compliments someone who doesn’t live there?
More often than you think!
That’s just mean.
Then there’s this:
“Young software engineers are setting themselves up for dead-end careers, said Norman Matloff. Newly minted computer-science graduates are now among the best paid and most highly sought young professionals, but their employability starts to decline around age 35….” ”
“…If you choose a software-engineering career, just keep in mind that you could end up working for one of those lowly humanities majors someday….”
http://theweek.com/article/index/227304/the-half-life-of-software-engineers
Churn ‘em and burn ‘em.
Tip of the day: Select a career field that:
1. Is something you don’t mind spending the rest of your life doing
2. Is not overly popular
3. Cannot be outsourced
4. Can be worked well into old age
5. Increases your employment value in step with your experience.
Plumber or electrician
If you are good at it and find that kind of work interesting, fine.
No and no on my account…
Great advice!
Generally speaking, it’s wonderful if you can target the sweet spot between relatively easy for you to do but difficult for others, relatively enjoyable for you but distasteful to others, very difficult if not impossible to outsource, likely to continue or grow in value to society, with opportunity to grow the value of your skills through increased experience into your old age years.
Generally speaking, it’s wonderful if you can target the sweet spot between relatively easy for you to do but difficult for others
Speaking of which, I have a strange sweet spot, but it’s working so far. Compared to the average population I’m good at software/tech stuff. But compared to serious software/tech people, my strength is the squishy people stuff. So I know where my niche is, and slip into it easily wherever I work, but I’m always a likely layoff candidate because in hard times they’ll always take the hardcore techie over the people person even though the aspergers-lite people love having me take care of their human interface problems for them.
I had a great conversation earlier with my son’s trumpet teacher. The guy is the very embodiment of my comments above: He plays beautifully, has all the work he has time for, is a genuinely nice guy, and enjoys what he does.
Not only is he nonchalant about his success, but he also recognizes how lucky he is to be able to make a living doing something he enjoys.
Good tips on career selection, combo. Here are my tips on picking a wife.
Pick one that is
1) Rich
2) Beautiful
3) Faithful
4) Generous
5) Charming
6) Great in the sack
Do you believe in candy-crappin’ unicorns?
There is away around this career decline problem. That is to keep changing jobs every 2 years, and spend a couple hundred hours a year learning whatever is the newest buzz.
With these aggressive techniques, can probably extend this point where the career prospects start to decline until about 40, maybe 45.
The worst thing you can do, is stay in a job, using the same technology, for 10-15 years.
I’ve seen it with COBOL programmers, Natural programers, C programmers, thick client programmers…
You cannot let yourself get too comfortable (Darrell says as he has been in the same job for over 5 years, a good twice as long as he should… I still have stock options maturing over the next 9 months.)
The flip side to the changing jobs every 2 years is that you will end up at a lot of start ups that do not make it, so will find yourself unemployed frequently.
40? 45? I’m getting head hunter calls still. Three different 12 month contracts. One of them with 500 hours overtime on top.
I’m 53.
I think you stayed in one community too long. Read my post below. If you have very little baggage you can move to the next consulting job within a week. In my case this was over a weekend four times since 2000. Thanks to modern aviation.
Limit yourself to one community and the best you can get is the best of that community. Make your next job anywhere in the U.S. and the best opportunity you can get is the best in the U.S.
Software engineer employability ends at age 35? Shoot. You could have told me that 18 years ago when I was 35 and then I would cry like a woman! Ha! Instead I was blissfully ignorant and went contracting and had a sad total of seven weeks of downtime between jobs. Boy I was suffering those seven weeks. Um…they were not consecutive.
Balderdash on that article. I’m in the trenches and I am enjoying the software tools that I download free and use to learn with. I’m preparing to go commercial, but note I am big on C language and embedded systems already, which is in demand commercially anyway. If you don’t believe that, you don’t have a smart phone or a car built in the last five years and you are not using internet (lots of internet devices use embedded software).
BTW: The key is to be able to move very fast and take a job thousands of miles away:
No downtime from June 1985 to March 2002.
Three weeks downtime from late March 2002 to early April 2002.
Three weeks downtime between late February 2003 and March that year.
Worked for one firm or its headquarters for over 7 years.
December 3 Friday, 2010 shook hands with my manager at 3pm and gave him my badge after I took my signed timesheet. In Los Angeles.
December 5 Sunday 2010: Flew to Tampa.
December 6 Monday 2010 8:00am. Started my new contract working in Tampa.
One week downtime in February 2012 as I flew back to work for the client which I left in 2010!
I am ready to move again with less than a week notice if needed. I have a cheap air mattress and a barstool as my only furniture in my L.A. studio. One carload back to my base address in Phoenix then a flight from Phoenix Sky Harbor to whereever and live in a hotel for a couple weeks before getting a new place.
No Problem!
I dont know about BILA, but I’m man enough to say I gave back just under $5,000 of previous profit in two day trades in May. My only losses (so far) for 2012.
I also sold a position of Apple (profitable) one trading day before it rocketed $40 per share.
Just “Sell in May and go away” something I do every year except this one.
April 30, 2013 I am OUT!
The above comment is in response to this…
“Comment by Florida Is Going To Kill Me ®
2012-06-02 10:14:51
BILA, we need an update on your stock portfolio.”
Don’t know why it is way down here.
Oh since you asked for it, my total gains right now if I cashed out would be $92,000 (I just calculated it because I was determining what it would be like being a resident of Nevada). My loss of roughly $800 is in the Vanguard emerging market fund. So my net gain would be a tad above $91,000
$81,000 of that gain would be my company stock.
In other words my cost basis is very low. Remember folks, I’ve been buying over the years. My favorite days were in 2009.
I did not mention my tax deferred accounts. I’ve been investing in them over 20 years. So my cost basis is ridiculously low in those.
I did not mention my gains in gold. I sold off a good chunk of that and some platinum in 2010 to drop my asset allocation of precious metals down to 10%.
I’m focusing on building up more T-bills and will really accelerate into them in 2013 as I have to save up for a new car such as a Genesis or a five year old Porsche. It will take two years to get enough cash for the toys. My current car is still reliable. So maybe I will be driving a 2016 Hyundai Genesis in three years.
“In other words my cost basis is very low.”
Sorry to chide you; I figured as much, given that you have always suggested DCA here.
For the record, I DCA’d my way through the stock market trough of Spring 2009 as well…
I did not take it as chiding from you, but yes from others. I’m aware you are into DCA too.
Actually it’s always a great time to dollar cost average. The last of my big tax deferral contributions will be in October. Then I will just go for company match in 2013. Could save $25,000 or more cash in a year from November. But could be working a new contract on east coast.
Arguably, the ripest time to DCA is when the market is tanking, no?
I responded ten min ago but do not see my post yet. Patience!
Wither the Occupy movement?
Posted at 07:58 AM ET, 05/22/2012
The Occupy movement is going nowhere
By Jonathan Capehart
The massive protests over the weekend in Chicago during the NATO summit have folks wondering if that marked a resurgence of the Occupy Wall Street movement. But I have to tell you, if those demonstrations are any indicator, OWS is going nowhere fast.
Let me give OWS its props. When it burst onto the scene last year, it singlehandedly change the national debate from deficits to the 99 percent and their anger over the excesses of Wall Street. Just like the tea party, OWS is an organic movement that resists having recognized leaders. But unlike the tea party, OWS continues to resist having a clear goal that can be achieved through the political process. And it doesn’t help that it has an aversion to the political process.
Think about it. When the tea party got real angry, folks who adhered to its overarching concerns about federal spending and overreach made their voices heard in protests in Washington. But they weren’t content to simply protest. Whether out of conviction or co-opting by Dick Armey or the Koch brothers, those protesters became office seekers. They upended the Republican establishment by running primary challenges to the right of sitting members of Congress — and winning. Sen. Richard Lugar (R-Ind.) is the most recent example. They provided the GOP the majority it needed to take back the House in 2010. And their resistance to raising the debt ceiling last summer put the full faith and credit of the United States at risk, called into question House Speaker John Boehner’s ability to control his caucus and forced President Obama to make a debt-ceiling deal that was less than ideal.
For all the power it exhibited last fall in changing the national conversation, I’m hard pressed to see what OWS has accomplished since then. Occupy Chicago had a list of grievances that included protesting Boeing for its role in war, climate change, income inequality, gay rights, women’s rights and foreclosures. All legitimate concerns. But if OWS is going to transition from protest to real political power that translates to the change it says it wants, the movement must field candidates who proudly carry the OWS banner. The Tea Party of the Left, if you will.
…
OWS is a conglomeration of 1000 failed movements.
If all the special interests could give up their doomed pet peeves, and focus on 2 or 3 key issues that resonate will with the general population, they have a chance of doing some good.
Unfortunately, there is little to no chance of that.
Are you saying that the “islamic institute sharia law now” can’t work with the “abort children 1 sec before birth and sometimes right after” can’t work with “teach 1st graders about gay sex” can’t work with “tax everyone and every company into oblivion” can’t work with “ban every company except Apple” can’t work with “just give people free houses and free health care” can’t work with “public union goon deserve free health care and $200,000/year pensions” can’t work with “black reparations” can’t work with “give all illegals citizenship” etc….
I guess the beauty of the tea party is that it has one unifying message “shrink government into something we can afford” and has actually ELECTED candidates into office.
Now we can argue these candidates they have been effective or not (I give them a “C” at best) but at least they are in office.
OWS - it will never happen.
OWS is a conglomeration of 1000 failed movements.
Tea Party = People that want to cut government spending 50%, except the 85% of government they like.
Do you honestly believe all the old people would be supporting the Tea Party if the TP candidates said that we need to cut Social Security, Medicare, Medicaid and Defense by at least 50%.. and not 20 years from now… NOW!
“2 or 3 key issues”
1. Corruption
2. Glass–Steagall Act
3. Tax structure
1. End the Fed
2. End the Fed
3. See 1 & 2
Solution: See #1.
The three that Occupy Phoenix was pushing toward were:
1) Campaign Finance Reform to get the big money out of politics.
2) Break up the big banks and/or let the big banks go under.
3) Homeless right to live and sleep anywhere they want, Animal rights, no genetically modified crops, legalize marijuana, citizenship for illegals, universal healthcare, admit 9/11 was an inside job, end the wars, end representative democracy, end capitalism, Native American rights, BGLT rights, end free trade, end the Fed, jail the bankers, stop foreclosures, buy local, buy from small businesses, anti-corporatism……
Whoa, I just saw an ad for this (End of America) on TV, so I went to the site and watched the video:
http://pro.stansberryresearch.com/1205PSI79UPD/6PSIN547/
Alright, way too long for me to finish. It’s basically about the loss of USD as reserve.
Umm…The economic collapse? Has been predicted back in the mid-70s as well and look what happened!
How many camouflage-wearing hippies in 1978 later regretted going back to live on the land “Mother Earth Magazine” style, before the big tech boom of the following 34 years?
Harry Dent in his “Roaring 2000s” predicted the next GD “will” happen in 2009 or 2010. Well it’s late. I still get e-mails from the H S Dent foundation. I haven’t gone to the web site in several months to look at the latest excuse as to why the GD did not happen.
It really happened right under the nose of HD but it started in 2000 and it’s been going on through the end of 2011. The S & P 500 chart looks not unlike the bad years during the 30s depression. But even then, those were good years to dollar cost average in stocks!
Someone or the other is always predicting an incipient depression. Usually they are wrong.
To satisfy my curiosity about what people thought at the onset of the great depression, I once went to a library and researched old WSJ articles from the late-1929 through early-1930 period.
What do you know: People at the time thought the stock market collapse was temporary, and business as usual would soon resume.
Quite similar to the recent episode, in fact!
I found the book cited below interesting to read in the early 1990s. The prediction never came to pass, and used copies of the book now sell for a penny.
The Great Depression of 1990
[Mass Market Paperback]
Ravi Batra (Author)
3.3 out of 5 stars See all reviews (11 customer reviews) | Like (1)
14 new from $7.13
122 used from $0.01
2 collectible from $2.83
PB, there were lots of people who bought in 2000 as well, thinking that collapse was temporary. I had $400,000 into the market going into 2000. Then got a windfall inheritance of $58,000 that I did not expect and lost half of that (my first time dabbling in individual stocks, and I did not return to the dabbling until 2005).
My total assets dropped to $250,000 by the bottom of 2003. But I kept buying stock mutual funds. I don’t regret any of that. Small loss compared to the long haul.
Over the 23 year period since I put weekly pay amounts into stock mutual funds, I can easily say I came out ahead and recovered the fastest by this point when I bought $500 worth of stock funds the week in 2000 when the S&P 500 index was at its highest compared to the FB who bought a house in Fresno or Las Vegas at the peak in 2006 or 2007. Of course because the FB did not dollar cost average into that house. It will be over two or three decades before they break even on their houses. But there are still cheerleaders and FBs who think RE is an investment! They don’t think!
“Of course because the FB did not dollar cost average into that house.”
You’d think the sheeple would catch on to that drawback of using housing as an investment vehicle. You’d be wrong, though…
Florida,
be careful. porter stansberry is a fraud.
Hey, no problem, I’m a natural skeptic, so yes, I see that he is a fraud now that I’ve had a chance to poke around the interwebs.
However, the wiki does say this:
“In an August 2011 online debate with James Altucher, Stansberry predicted that Europe’s debt crisis will only intensify in the coming year, with Italy’s Unicredit being “the next big domino to fall.”[6] Stansberry predicts that once Unicredit falls, Germany will not bail them out, and that in fact Germany will leave the European Union within the next twelve months (by August 2012).[6] Additionally, Stansberry predicts that the U.S. Dollar will lose its reserve status and the U.S Treasury “bubble” will burst.[6] As a result of these oncoming financial calamities, Stansberry recommends that investors convert their assets to 50% gold and 50% cash, if they are not willing (or able) to actively acquire short stocks.[6]”
Is there anything crazy/fraudulent here?
Is there anything crazy/fraudulent here?
he makes lots of predictions after the fact. that is, he claims he made predictions that in truth he didn’t make. even if he hits one, it’s when it’s obvious to anyone that cares that it’s going to happen, and even then he pushes the prediction date back further than there’s any proof he made it at the time he claims.
“Stansberry predicts that once Unicredit falls, Germany will not bail them out, and that in fact Germany will leave the European Union within the next twelve months”
if he’s wrong, he’ll just drops it like he never said it. he’s made a lot of predictions like this that never came true.
i think he reads guys like schiff that really do make some good predictions, and then claims he made the same prediction earlier. schiff exposed him for that on his show. he could have sued schiff if what he said was false. but stansberry never sued him.
in his tv commercials, his web address has changed several times. just speaking for myself, i’d never believe a word he said.. ever.
I said: Clinton pushed through big cuts in government,
2Banana says:
“BAHAHAHAHAHAHAHAHA - oh stop it - yer killing me.
Government greatly expanded under Clinton except for the military (which took a 40% hit).
The general budget still expanded and went up every year (yep - all the peace dividend was spent in the year it was “saved”)”
Not sure where you think this 40% cut to defense is. Defense 1992 = $298B. 2001 = $305. Doesn’t look like a 40% cut to me. Even adjusted for inflation and population = get $406-305 = $101B drop, which is 25% drop from the inflation and population adjusted baseline.
What else was down from inflation and pop adjusted levels?
Energy down 10%
Commerce and housing down 60%
International affairs down 25%
general sci and space down 11%
General government down 18%
Net interest on debt down 24%
So, what was up under Clinton, at a rate faster than inflation and population?
Medicaid up 30%
Medicare up 34%
Social Security up 10%
Transportation up 20%
Community development up 25%
Ag up 28%
Justice up 52%
In terms of the magnitude rather than %, Social Security was up $42B, Medicare up $55B and Medicaid up $30B… Those three line items absorbed all the $100B cuts from DoD plus an extra $20B.
Stupid Clinton letting old people get older, and not doing anything about healthcare costs increasing at 3x the rate of inflation!
I’m not sure what he could have done about the former, but he really should have tried to do something about insane increases in healthcare costs.
The things that he cut, are the things people say we need to cut now… Well guess what? There is less there to cut now.
The things that went up, are the things that largely remain the untouchables, that even the Republicans won’t seriously talk of cutting.
In 1940, the federal budget was $9 billion. 67 years later, it had risen to $3700 billion. That’s almost 9% yearly inflation in the cost of the federal government. But the generative inflation (growth in wages and population) was only almost 4%. So our federal government was going to grow beyond our ability to pay for it, no matter what happened. And so it did, with constant borrowing, which then started to grow, then became massive (40c on each dollar spent today). That $15000 billion in direct federal debt? That’s the feds covering up for the economy not being able to actually pay taxes to support such a monstrous government.
Since nobody’s willing to cut all this, except Ron Paul (who has no chance), then we’re doomed. We’re going to end up with a government that costs use hugely, yet does nothing for us, as it only feeds parasite programs. So a Tax Revolt is brewing. And it’s going to become catastrophic; ask Greece.