Bits Bucket for July 23, 2012
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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This story never seems to get old:
Europe again wobbles at the edge
Updated 07:15 a.m., Monday, July 23, 2012
FRANKFURT, Germany (AP) — The Europe debt crisis is flaring up again. Bad news about Spain’s economy and finances are feeding fears it will be the next European country to need a bailout.
The Spanish government’s borrowing costs hit an alarming 7.56 percent Monday for its 10-year bond. That’s a key benchmark suggesting Spain may soon find itself unable to borrow affordably — and need outside loans.
…
That is still a very low interest rate for a borrower that will not be able to repay.
Luckily for the execs that are buying them with OPM, their bonuses get paid on interest accrued, not payed.
The latest headline: “Francisco Franco is still dead”
Fortunately, we still won’t have to suffer seeing Andie MacDowell naked.
From the amount of hand ringing over the market reaction to the Spanish debt crisis, you would think the world was about to end. Nonetheless the loss on U.S. stocks today was negligible in the big scheme of things.
What gives?
It’s the end of the world as we know it!
It’s the end of the world as we know it!
And I feel fine…
(With apologies to R.E.M.)
At what point will Spanish debt fears give way to a bigger bailout and a collective shrug?
ft dot com
July 23, 2012 7:47 pm
Investor fears rise over Spain
By Robin Wigglesworth in London
Spain’s borrowing costs rose dramatically on Monday as the prospect of the country’s regional governments asking for financial rescues amplified fears that Madrid may be forced to request an international sovereign bailout.
The country’s two-year bond yield saw its biggest one-day move since the eurozone debt crisis broke out in early 2010, jumping almost a percentage point at one stage to 6.74 per cent, the highest level since November 1996, before closing at 6.53 per cent.
“Spain is close to losing access to markets entirely,” said John Stopford, a senior fund manager at Investec Asset Management. “It’s not sustainable to borrow at these levels for very long.”
Yields, which move inversely to prices and reflect the market price of borrowing, also set a fresh euro-era high on Spanish 10-year bonds, climbing as high as 7.56 per cent.
The dominant European clearing house for settling bond trades, LCH.Clearnet raised the margin, or extra deposit, it requires from clients to hold some Spanish and Italian government debt – further increasing the pressure on those bond markets.
…
An interesting question: How do you stop a housing bubble?
What’s a Country Supposed To Do About a House Price Boom?
By Matthew Yglesias
Slate
Ever since American house prices started declining, people who predicted that this would happen have been crowing and slagging policy elites who failed to see it coming. I think in some ways the better question is what are you supposed to do about these situations? Right now everyone seems to agree that Norway is experiencing an unsustainable house price boom. You may have recently heard the factoid that Canadian household wealth is now higher than U.S. household wealth, but this too certainly looks like an unsustainable house price boom.
To adopt a sensible prophylactic remedy there would need to be overwhelming public and political consensus that current prices are unsustainable. But if that was the locally prevailing conventional wisdom, then prices would fall on their own. I don’t know what story Norwegians or Canadians are telling themselves to justify current prices, but they obviously have something in mind. And the very same thought processes that lead to current prices would naturally block political remedies.
Raising interest rates was enough to get it done in the U.S.
Raising interest rates was enough to get it done in the U.S.
If the solution is so simple, why did we have a housing bubble?
Because those in charge of the till were idiots.
There used to be a philosophy of yanking away the punch bowl once the party got started.
There used to be a philosophy of yanking away the punch bowl once the party got started.
Yes, it was called Keynesian economics. It was replaced by Reagan and Greenspan with monetarism/trickle-down economics.
But that was the result of a democratic election. The people wanted to believe in such things, just as they wanted to believe that RE always went up, and would make us all rich.
The punch bowl should have been pulled during the Clinton years because that is when the artificially low interest rates began which created the first real bubble the dot com bubble of the modern era. Greenspan was the blame but no one called him on it. During the Reagan years interest rates were allowed to rise to a point where inflation was broken. Yes, Volcker did it but with support. Sorry you cannot rewrite history both Clinton and Bush II supported bubbles to keep them elected that is the problem.
Credit expansion, it’s like narcotics.
Greenspan was the blame but no one called him on it.
Why did no one call him on it?
‘no one called him on it’
One guy was letting everyone know at every opportunity; William Fleckenstein. Check out his book, Greenspan’s Bubbles, The Age of Ignorance at the Federal Reserve. He makes a good case for the one-bubble-lead-to-another scenario. Like Japan’s twin bubbles in the 80’s.
There used to be a philosophy of yanking away the punch bowl once the party got started.
Which, ISTR, was the terminology used by Fed Chair William McChesney Martin when describing the role of the Fed.
We’re way beyond punchbowls… modern parties have tables covered in lines of coke and crank.
One guy was letting everyone know at every opportunity; William Fleckenstein.”
yes I remember reading his stuff I think you have to pay now to get it though?
I used to read Fleckenstein as one of the commentators on MSN. Just out of curiousity I checked out their site and he’s still contributing, but didn’t find a link to his older work. Haven’t been there in a while.
Because those in charge of the till were greedy criminals or controlled by criminals.
Don’t say idiots it lets them off. They want you to think they were idiots.
“They want you to think they were idiots.”
And they did a fine job of convincing me.
An efficient parasite won’t kill the host but apparantly an idiot parasite will.
These guys had a good thing going for themselves until they went and blew it.
An efficient parasite won’t kill the host but apparantly an idiot parasite will.
These guys had a good thing going for themselves until they went and blew it.
1. These aren’t parasites, they’re dictators on a global scale. The top 0.01% will control everything at some point those in the top 1% to top 0.1% will find they too will become food.
Seriously dictators keep their countries from becoming productive. They do it because it gives them perpetual control and they get to consume everything. The elite in this country are no different. They have been hampered by our constitution and strong labor and a middle class but these are quickly being taken care of.
“They want you to think they were idiots.”
Yep.
Dimon: “We Were Stupid”
By Mark Halperin | May 11, 2012
JP Morgan topper to David Gregory for “Meet the Press” in Friday recorded interview:
“We know we were sloppy. We know we were stupid. We know there was bad judgment. We don’t know if any of that is true yet. Of course regulators should look at something like this, that’s their jobs. So we are totally open to regulators and they will come to their own conclusions. But we intend to fix it and learn from it.”
…
“So we are totally open to regulators and they will come to their own conclusions.”
Jamie Boy welcomes the involvement of bought-and-sold prostitutes.
Why did people want to buy mortgage debt? It was runaway demand for mortgage debt that drove the bubble. It was why the loan production industry was reduced to cranking out so much garbage. Because the end market couldn’t get enough of it.
Mortgages were safe, reliable and higher interest relative to everything else of its perceived safety. In a low interest environment, money is going to crowd into higher interest investments, blowing bubbles.
The people who thought houses were the actual item of investment value found out the hard way that wasn’t true. They are like the gamblers flocking to Las Vegas thinking their daring and skill will enrich them in the casinos. But the real money is being made by the people running the casino, and the vast majority of gamblers just get fleeced.
“The people who thought houses were the actual item of investment value found out the hard way that wasn’t true.”
A better question would be “why did we turn something so basic, such as shelter, into an investment vehicle?” Housing needs to go back to being shelter first, not a means of investment.
A better question would be “why did we turn something so basic, such as shelter, into an investment vehicle?” Housing needs to go back to being shelter first, not a means of investment.
Ding, ding, ding! We have a winner!
“why did we turn something so basic, such as shelter, into an investment vehicle?”
Uh, so the scheming scam artists could rape the American Treasury for bazillions of dollars?
It tends to be a bit difficult to avoid crashes if you insist on driving while looking out the rear-view mirror.
Dot-com bust was sure to follow with a recession. PTB decided we can’t have it so created a new bubble, but like any good junkie they didn’t know when to stop.
To adopt a sensible prophylactic remedy there would need to be overwhelming public and political consensus that current prices are unsustainable. But if that was the locally prevailing conventional wisdom, then prices would fall on their own. I don’t know what story Norwegians or Canadians are telling themselves to justify current prices, but they obviously have something in mind.
This is the paradox: If the market is rising, then the political will to stop it isn’t there. If the political will were there, the market would fall without need for political action.
Interestingly enough, higher interest rates would have just allowed the current system, wherein the lender does not retain any repayment risk, to metastasize further.
Having housing and finance become such large components of the economy, and combine that with having low interest rates so that mortgage debt becomes the only game in town, created a focused explosion of bad debt.
It’s like suffering an injury which unmasks a more serious condition.
The more serious condition is allowing lender to make loans without retaining any repayment risk. However… this situation is self-correcting. People will simply demand much much higher interest rates to hold debt, if they don’t believe it’s reliable.
Investors were fooled. They thought modern mortgage debt was as reliable as pre/early securitization mortgage debt.
The government can try to step in and buy all this generated debt, as it tries to currently via the Fed and the GSEs. And that game can continue for a while. But, it’s a route fraught with peril, as it adds to the national debt through a backdoor process.
What’s a Country Supposed To Do About a House Price Boom?
Blame the central bank, of course.
As regulators of the large banks, they already had the necessary tools to stop the bubble.
Simply regulating away the excess leverage would have done it. No buyers who can afford to buy is the inevitable condition that brings a bubble to its end; they could easily have caused this condition to occur much sooner than it would have. Ergo, bubble stops in its tracks.
Simply by limiting LTV, this could have been accomplished.
They chose not to do so. I still think that was because they didn’t want to take action to price it, and thus be blamed for causing the economic downturn. So they waited until the pain was widespread before taking action.
Blame the central bank, of course.
But the central bank- especially a semi-independent one like the Fed- was supposed to answer the paradox of the lack of political will to end a bubble. That is, just because the peeps were enjoying their assets’ ride to the top, the top policymakers/bankers were supposed to now better and to nip it in the bud.
I don’t know what story Norwegians or Canadians are telling themselves to justify current prices, but they obviously have something in mind.
In Canada , Jim Flaherty Minister of Finance has reduced amortizations from 30 to 25, effectively raising monthly payments, cut out properties that cost over $1 million from CMHC insurance. HELOCs are reduced from 85% to 80% loan-to-value.
In the midst of one of hottest driest summers, I think Canadians are telling themselves that there may be a decline but they hope they can ride it out.
Over 133,000 foreclosures are coming California’s way, though very, very slowly, thanks to government-sponsored extend-and-pretend.
Meanwhile, you have been repeatedly assured that the housing market has bottomed out. Go and buy yourself two or ten investment homes, if you can find them in your local MLS inventory.
Slowing foreclosures will harm housing market
John B. Taylor and Douglas Holtz-Eakin
Published 08:16 p.m., Monday, July 2, 2012
…
Foreclosure is tragic, painful and sadly necessary. Excess inventory of foreclosed homes or distressed properties has an adverse effect on the overall market, depressing home values and preventing a recovery. Homeowners who have been truly wronged should seek redress. Homeowners have a right to take advantage of the relief provided by the National Mortgage Settlement, but lenders have already contacted potential candidates about that relief.
Intervening into this process to try to delay foreclosures will add uncertainty to the market and slow down the recovery process.
…
Take, for example, the forestalled foreclosure process plaguing Florida. While foreclosure inventory in California has fallen to 2.4 percent, it stands at 12 percent in Florida. It will not help Floridians to keep borrowers in homes they are unable to afford.
With about 133,000 foreclosures completed in California in the past year, it is important not to clog the pipeline. Obstructing distressed properties from clearing the market will prevent the overall market from stabilizing.
Californians have been hit hard by the burst of the housing market bubble as well as the recession and the weak economic recovery. The unemployment rate in California, at 10.8 percent, remains higher than the national average. And in some cities, like Fresno at 14.9 percent, the level of unemployment is even higher.
Moving forward, it is sustained job creation through a strongly growing economy that will be key to housing market recoveries. That should be the focus of California’s elected officials and, indeed, public officials across the country.
John B. Taylor is a senior fellow at the Hoover Institution and professor of economics at Stanford University. Douglas Holtz-Eakin is president of the American Action Forum and former director of the Congressional Budget Office.
oxide,
Thanks for your explanation yesterday of what you meant by not being able to save while paying rent. Makes a lot more sense when you specified that you meant that you can’t save more than you could while renting rather than you can’t save at all. I understand the desire to actually live on your salary, rather than live frugally and save as much as you can. I just have never done it and I don’t think I ever will. Not in my nature. But I understand wanting to do it.
You can’t take it with you!
“I understand the desire to actually live on your salary, rather than live frugally and save as much as you can. I just have never done it and I don’t think I ever will. Not in my nature.”
You probably wouldn’t enjoy the role of a family’s breadwinner either.
” I understand the desire to actually live on your salary, rather than live frugally and save as much as you can. I just have never done it and I don’t think I ever will. Not in my nature. But I understand wanting to do it.”
How about a happy medium. Live well and put a little aside. Life is short, enjoy it.
I already do live well. There is a lot of crap that some people value that I don’t. If I wanted to, I could probably over a long time develop a taste for some of those things (though I expect that I would always be lauging at myself inside), but I choose not to put in the effort.
For example, oxide’s little 3/2? Wouldn’t want it in a million years. Doesn’t fit my lifestyle. I can’t imagine wanting my space divided into so many little boxes. I’d much rather have my space more open. This also happens to be cheaper since it requires fewer items of the sort you need to have in each room (like art, furniture and electronics). Could I force myself to get used to living alone in a 3/2. Yeah, I suppose. But I wouldn’t want to.
The things I do value (closer to the city center and cultural resources, walkable neighborhood, not having to drive every day, etc.) I have. They cost a pretty penny too. I value them, so I pay for them.
Polly, in all the years on HBB, I never picked up the impression that you wanted to buy or nest. Lots of folks enjoy the rental lifestyle. And this is a perfectly legit lifestyle.
And you know what? I want to meet both polly and oxide when I make my next trip to DC.
BTW, if you’re ever out in Tucson-town, look me up!
If I could find the “perfect” spot, I would want to buy. I always seem to end up living at the edge of urban spaces - easy to end up in the center of the city, but also easy to get out to wider open spaces and the convinience of suburban stuff accessed by car. And my actual perfect living space would be a modified loft, I guess since I like having multiple living zones without walls getting in the way but also want a separate bedroom. My current apartment felt good the instant I walked in the door. Not perfect, but close enough for a rental since I have a lot of space, but most of the main living area is integrated. Not sure if I would want to buy a place like this. It might happen eventually. It might not. I’m taking it one frugal year at a time.
Until then, I save so that I’ll be ready if I both figure out what I want and find it. I just know that a house like the one I grew up in (a small suburban 3/2) isn’t it. It would drive me nuts to be in one room and know that all the other ones were empty.
Other things that some people value and I don’t are outrageously expensive hand bags, high heeled shoes and expensive watches. Never have understood any of it.
Polly, you should hie thee to apartmenttherapy dot com, or Dwell magazine, or even the *sigh* IKEA stores. The IKEA showrooms have three complete apartments inside. One is about 700 sq ft, one is 500 sq ft, one is 300 sq ft. Lots of integrated living.
I already did the 400 square foot thing. I was right out of law school and in debt up to my eyeballs. I’m all grown up now. I don’t need to do that anymore. I have 1000 square feet in my apartment. Living areas (office , living room, dining area) are together. Kitchen, bedroom and bathroom are separate. It works very well. Not perfectly, but very well. Everyone who has seen it (or even just the floor plan) has commented on how well the space works. And I have not over furnished it which is the biggest problem. I have some work to do on getting rid of old stuff (like video tapes and even more financial papers). That will make it even better. I’d still like a little more open space and wood floors. Might get it someday. Might not. What I have works. I can’t host a dinner party for 20, but I can invite them over for a casual dessert party. It is enough for now.
“It is enough for now.”
Too many people cannot understand this concept.
In Econ 101, “Unlimited Wants” was a basic assumption.
I loved econ 101. It puts things in perspective in a world of ‘expert’ economists that make shtuf up. But reasonable beings will span those wants over their lifetime. ‘Reasonable’ was a word that came up time and time again in econ, although I don’t believe it described a majority of the subject population.
Polly,
My comment wasn’t about housing, but spending in general. You said you try to be as frugal as possible and save as much as possible. Regardless of whether your rent or own or live in an apartment or house. Just saving for the sake of saving is no way to live, IMO. I don’t think anyone’s last thought before dying was “I should have saved more money”.
” I don’t think anyone’s last thought before dying was ‘ I should have saved more money’ “.
I can tell there are no smitherettes running around the Smither’s household. You’ll find out soon enough that whatever you saved for college, won’t be enough. Next, you’ll wonder where your retirement money went. Then you’ll wish you saved more for the grandchildren. Why does it surprise everyone that 41% of 64-75 yo still have a mortgage?
I don’t think anyone’s last thought before dying was “I should have saved more money”.
Unless the reason they’re dying is that they ran out of money while treating some health issue…
New Report: One Million California Tenants Directly Impacted by Home Foreclosures
by Aileen Joy, Tenants Together‚ Jul. 20‚ 2012
NewsTrust
Tenants Together, California’s statewide organization for renters’ rights, has released its fourth annual report on California renters in the foreclosure crisis. The report reveals a shocking statistic: over one million California renters have been directly impacted by their landlord’s foreclosure since the mortgage meltdown began. According to Leah Simon-Weisberg, Legal Director at Tenants Together and principal author of the report, “We are five years and a million tenants into this crisis in California. Anti-eviction laws and aggressive enforcement efforts are needed to protect tenants from further abuse.”
Tenants are innocent victims in a foreclosure crisis they did nothing to create. Tenants and their communities have continued to suffer from banks’ and investors’ poor maintenance of foreclosure properties and their inhumane and irrational eviction policies.
…
From the article:
“Renters occupy an increasing percentage of the homes in foreclosure in California as apartment building foreclosures have stayed stubbornly high, even as single-family homes foreclosure have declined”
It is not just accidental landlords that you have to watch out for. Even large complexes are in forecolusre. You can’t even count on commercial apartment complexes remaining rentals. I know some folks who had to relocate due to conversion to condos during the boom. Apartments were really in short supply at that point.
” I know some folks who had to relocate due to conversion to condos during the boom. Apartments were really in short supply at that point.”
Apartments were in even shorter supply during the dot-com boom. Supply is much better now, but rents are much higher. The main reason I bought at the worst possible time during the peak of the housing bubble was trying to stay one step ahead of the condo conversion monster. I’ve since lived in two places that are potentially subject to conversion. Local conversion laws are now much stronger than during the bubble so hopefully I’ll never again get forced out of an apartment being converted to an overpriced condo.
Also from the article:
“The Merced City Council passed the Central Valley’s first anti-eviction law to stop the arbitrary eviction of tenants after foreclosure”
I wonder what that will do to banks’ willingness to lend for the acquisition and/or development of rental properties. Will they simply raise interest rates to compensate for the additional risk?
Five years into the “Mortgage Crisis,” and the first state to pass a law to stop robo-signing is not even scheduled to go into effect until next January. For those who post here to claim the housing bottom is in, I have some unfortunate news: We are in the middle innings of this ballgame, and this and (most likely) other similar laws in other states will definitely send the game into extra innings.
Landlords and second mortgages are offered no protection by the California Homeowner Bill of Rights. That should exclude a large share of California homeowners from eligibility for special treatment under the law.
2 July 2012 Last updated at 22:36 ET
California approves homeowner mortgage law
Foreclosure sign in California (file pic)
California has one of the highest rates of foreclosure in the entire US
Lawmakers in California have approved new protections for homeowners facing foreclosure and abusive bank practices.
They passed a law to stop foreclosures during mortgage renegotiations, with a ban on “robo-signing” - the bulk-approval of foreclosures.
The deal includes much of a $25bn federal settlement with five banks and would be the first such state law.
The bill, opposed by many banks, has been sent to California Governor Jerry Brown to be signed into law.
The governor of the western US state, one of the states to be hit hardest by the US housing crash, has not given an indication of whether he supports the measures. But correspondents say he is unlikely to veto the legislation.
‘Transparency and fairness’
California Attorney General Kamala Harris, a key architect and supporter of the law, has estimated that 700,000 people in the state are facing foreclosure.
“They will now have a system that will offer them transparency and fairness,” she said after the vote.
…
The law would take effect on 1 January and apply to all mortgage lenders in the state.
The bill has been criticised by banks, mortgage providers and some real estate companies, who say the changes would impose new burdens on their companies.
They also say the law would only delay foreclosures rather than prevent them, and and lead to a slow recovery in the housing market.
In a letter to lawmakers on Friday, opposition groups said they were concerned the bill would “encourage frivolous litigation” from people who could not afford to continue staying in their homes.
The law was amended to reflect some of these concerns and now offers protection only to first mortgages and to homeowners who are still living in their houses.
There’s only one cure for Californians: leave that state of idiots.
“There’s only one cure for Californians: leave that state of idiots.”
California sorely needs a return to meritocracy though I don’t know how since socialism’s metastasis has spread to every political organ.
CA’s problem isn’t a problem with systems, it’s a problem with the people.
“CA’s problem isn’t a problem with systems, it’s a problem with the people.”
And people implement systems.
GIGO
Remember that one?
“…leave that state of idiots….”
Please. You know you hate it here. Best leave as quickly as you possibly can and go back to where you’re safe from all the self-actualizers and totalitarian socialists and lady homosexuals with tiny purse dogs.
Run!
Aw, stop it ;). Because if they run away from California, they’ll come over here to Arizona. And we have enough haters here already.
BTW, speaking as someone who has been in all 50 of these United States, I can personally attest to the fact that the idiocy is all over. So, sorry, if you bail on one state to get away from its idiots, you’ll encounter a different variety somewhere else.
And, as some wise old sage once said, “Everywhere you go, there you are.”
So more people will foreclose, but it will just take longer to get ‘er done. Sure, it scores points for the good guy — theoretically. But in a practical sense, how does this affect the market? Kamela Harris is doing a better job of holding the homes off the market than the banks. Instead of a cratering, we’ll just watch prices bounce along an even longer bottom, and pay rent the entire time.
As for house condition, I think all this delay will make it worse. Houses do better lived in and maintained; the house doesn’t care if the occupant is paying the morgage. What good is it (for the house) to kick the FB to the curb only to leave the house empty? Especially if, after he realizes that the courts and laws won’t coddle him, the FB gets angry and trashes the place on the way out?
One thing is for certain, where there is a goverment program, there will be those who take advantage of it in a negative way.
Not if my co-workers and I stop them first.
That what’s gets me polly. The conservatives seem to think that there are no checks against the abuse, therefore the whole system is broken, so let’s toss the baby out with the bathwater, when in fact, it’s a matter of funding being blocked to the enforcement agencies (depts) by someone/groups who wants to surreptitiously protect the abusers.
Me? I don’t like antifreeze in my toothpaste, rocket fuel in my baby formula, poison in my dogfood, lead on my child’s toys, cars that catch on fire for no reason or suddenly won’t stop or go without warning, clothes that will me from the smoke instead of the fire, building that stay up, plumbing that causes cholera and morons who don’t follow traffic and think they are on jet skies on the street and banks and stock brokers who are robbing me blind
But I’m just sorta socialist that way.
I’m not dealing with consumer safety. Just a bunch of people who want to get special treatment because of what they do. I make sure they are actually doing it. The rules are there. Some are good rules. Some are silly rules. Some are horrible. But I’m not elected so I don’t get to change the rules. I do make sure that as far as it is possible to check, that people who don’t follow the rules don’t get the benefit of following them.
As for people in areas of the government who only get to look at stuff after it has happened? Well, I take my hat off to them. Much harder job. I help with that end of things sometimes, but I’m ususally brought on to help after others have already found it.
OK! It’s been forever, dude. Nice to see you again!
now offers protection only to first mortgages and to homeowners who are still living in their houses.
Seems pretty reasonable to me.
Polly even told me to do what it takes to keep my kids protected. Meaning the dole. Cuz she gleaned enough from my blathering that I am going broke for real and need to stow away my dignity and get some bennies.
We payed for my wife’s surgery without selling the house BTW.
Will pay the piper later as it is on a 18 month 0% credit card.
Lots of homes(about 5) in our Beverly Hills of Prineville hood are on the market now at 100/sq ft. They are 70s vintage; Ours was built in 2006. Many are short sales or foreclosures as well; still asking $100/ft, though. Personally, I hope they sell to set up comps, so we can sell next year if needed. Facebook has a data center there; Apple bought property and should follow suit.
Not getting the masters right now either. Can still sub 1/2 time without it. Wife is looking for full time employment to replace her lunch lady/checker combo. With health benefits we would be able to save the house as our primary shelter.
OK, gotta chime in regarding banks. WF has this major fixer REO with an added master w/o a permit. The house was in foreclosure for 7 yrs. 7 yrs they lived there free and left the place a broken up mess. WF is experimenting with a new business model for REOs. A blind auction. If your bid is pick you pay $195 + a $12,000 FEE for buying the REO. WTH?
We passed due to the permit issue and the $12,000 fee. Also, the area has a soil/ 5 yr replaster walls built in expense issue. It pays to talk to neighbors. $12,000 for a fee? (can you say extortion!)
Banksters for sure.
Comment by Blue Skye
2012-07-22 18:32:58
OK, so your PITI is way more than rent. It took a long time to tease this out. You are betting on rents going up, up, up and your PITI will stay the same.
I need to clarify this from yesterday. My PITI on the 3/2 SFH house that I bought is $500 less than the PITI on the 3/2.5 townhouse* that I was renting.
However, when I made the calculation of whether I could eventually buy a house by saving the difference between rent and PITI, I compared the PITI on the house I bought to the rent on a 1-bed apartment. In that case, PITI would be more $500 more than the rent — at least for now.
——————
*This is a commercial complex. For an individual house, rent is probably a less for an individual landlord. However, I didn’t want to rent a house that could be sold out from under me.
Don’t ya know that buying is always an emotional process and then we rationalize it afterwards?
Case closed
Case closed on what? That oxide’s decision to buy included some element of emotion? Why do you care so much?
I think SUguy is being sarcastic, based on a couple posts from last week. So don’t sweat it.
I made my rent vs. buy calculation using the $1200 1-bed apartment as a conservative straw man. It’s not too impressive if buying a 3/2 works out better financially than renting a 3/2. But if buying a 3/2 works out better than renting a 1/1, that makes the 3/2 purchase look like a no-brainer. But it wasn’t enough to convince HBB.
I’m not sure that anyone knew that until you spelled it out today. I know that I still thought you were comparing your actual rent (and I remember you saying you were renting a townhouse to see what you thought of having and taking care of that much space) to your PITI. Maybe you wrote it before and I missed it. I certainly don’t catch up every evening.
Might have shut a few people up if they had known. Might not have. On the internet people only have what you write and they actually see and they actually understand to go on. Makes life interesting.
Enjoy your new home, Oxide, you deserve it.
My PITI on the 3/2 SFH house that I bought is $500 less than the PITI on the 3/2.5 townhouse* that I was renting.
And at historically low interest rates; she’ll probably have it paid for in 20 years and 20 years fly by nowadays because they’re making them shorter as we get older.
I need to clarify this from yesterday. My PITI on the 3/2 SFH house that I bought is $500 less than the PITI on the 3/2.5 townhouse* that I was renting.
Good buying should be less than renting because buyers assume more risk. Just hard to get a loan now and if it wasn’t we know what would happen.
I just re-read a news story from FEB 2005 about CA equity fueling a Phoenix housing boom. for example some bozo in Ojai bought 4 new tract homes in Mesa , another sold their CA home for 1.65M and bought in Mesa for 1M. Article was in Feb so the pictures of the newly transplated looked pretty good standing out in their big yards with arces of grass… they need a new follow up do it right now in August, How equity transplants are doing 7 years later. How the grass looks ..
Does it strike anyone else as odd that five years into the “Mortgage Crisis,” states are just getting started on foreclosure regulations? Especially given that, at least according to many posters here, housing has already bottomed out?
25 States Propose New Bank Foreclosure Regulation
By Stacey Bumpus
Posted in Financial News, Foreclosure, Mortgage Rates
July 2, 2012
The latest foreclosure news could result in a change to banks’ foreclosure rules one state at a time, if proposed legislation is allowed to pass around the country. A number of states are looking to hold major banks accountable for wrongful foreclosures by forcing changes to the home loan modification process and presenting new robo-signing penalties.
Various states around the country are looking for ways to ensure that mortgage lenders are always fair to homeowners, especially those who are facing financial difficulties.
According to the National Conference of State Legislatures, this foreclosure news involves 25 states currently working on various types of legislation to regulate the processes by which banks are able to initiate or follow through with home foreclosures.
The proposed changes are arising from concerns that lenders have not been effectively restructuring mortgages, as required by various settlements. Some of the settlements identified include the $25 billion foreclosure settlement imposed by 49 states on five major mortgage servicers, and a separate Independent Foreclosure Review that impacted 14 servicers.
Of the 25 states that plan to propose new bank foreclosure regulation, California is the first to get started. As early as Monday, the state could vote on an overhaul detailing new requirements banks will be asked to follow in the foreclosure process, including improving its home loan modification process.
If the California bill passes, it would prevent foreclosures from moving forward while a borrower is attempting to have a mortgage modified. It would also require large lenders to provide a single point of contact for borrowers seeking a home loan modification, and allow homeowners to sue mortgage lenders that fail to abide by the rules established by the recent foreclosure news.
Other states set to propose new rules in the near future are Oregon and New York. Oregon’s bank rules could include similar guidelines on how banks are to handle loan modifications, while New York’s assembly is considering a measure that would criminalize foreclosure paperwork forgeries, also known as robo-signing.
Odd? Not when you consider that most legislatures have a substantial part of their portfolios tied up in investment RE and needed the bank bailouts just as bad as the banks did.
Then, and only then, were they going to tackle “reform.” (HA!)
“legislators”
Dang spell checker.
But I also did mean CAFRs. Google it. Be sure you are sitting down.
Look out below, Wall Street.
Fortunately for U.S. home owners, Main Street and Wall Street are fully decoupled these days. You needn’t worry about a plethora of stock market declines diminishing the value of your real estate investments.
BULLETIN Wall Street to open deep in the red: Dow futures down more than 200 points
New York Markets Open in: 0:33:37
Pre-Market Indications | Analyst Ratings
Futures:
S&P 500 -1.4%
DOW -1.6%
NASDAQ -1.6%
U.S. stock futures tumble
Friday’s bearish sentiment carries over as Wall Street girds for a fresh round of Europe-inspired selling.
Yawn. PPT goes into action in 3, 2, 1….
Well, maybe not that fast, but tomorrow for sure.
What a joke.
The DOW is still holding steady above 12,000.
Panic at your own risk.
How many times have we seen this movie?
Day 1: Europe fears cause market panic. All hell breaks loos
Day 2: ECB and/or Ben Bernanke announces some new plan. Dow up 300.
Day 5: New fears emerge in Europe dampening spirits on Wall St.
Prediction: Dow is up 2% tomorrow.
If one had the stomach for it, it seems there could be money to be made by buying on the panics and selling on the rebound.
It will work until it doesn’t.
Oh dang! It also takes some spare cash.
Imagine employing this strategy circa August 2008. If you tried to exploit the panic at that point, you could have enjoyed 50% subsequent declines in headline U.S. index levels to March 2009. The problem with trying to profit on panic is threefold:
(1) Guesstimating when a bottom is in;
(2) Pulling the trigger at the bottom;
(3) Getting lucky enough to see prices come back (talk to a Japanese stock market market investor if you want to understand the alternative possibility).
The panic today is primarily from Europe… Italy and Spain both implemented Short Sale Bans to try and mitigate the hemorrhaging of their financial markets. Short sale bans doesn’t inspire confidence in traders… if you can’t profit from a downtrend, or at least hedge your long risk, you reduce your risk: aka short sale bans create more selling.
The panic today is primarily from Europe…
IMO, Western economies do not need the number of workers per population as they used to need. This is the fundamental problem. 40 years ago we thought we’d all be working less and making more. Instead, a very few are rich, many are working the same making the same and many have nothing to do.
Well, they told us long ago all this technology would result in more leisure time. They just didn’t tell us it would come out of our paycheck.
Exactly. All the technological advances were to make workers lives easier. What wasn’t talked about was how that was complete bullshit, and the savings would go straight into the pockets of the wealthy minority at the expense of society as a whole.
“IMO, Western economies do not need the number of workers per population as they used to need. This is the fundamental problem.”
It’s part of the problem, to be sure.
The other part of the problem is the 1% masters of the universe prefer to make more money for themselves by pushing the more efficient workers to work longer, harder hours and laying off the less efficient workers, rather than reducing the length of the average work week for the masses and sharing the efficiency gains with them.
FU in advance to anyone who calls me a communist or socialist for pointing out this fundamental truth.
“1% masters of the universe”
In case there is any doubt in anybody’s mind, I count Mitt Romney in this group.
Don’t fall for the scam, America! Romney wants to outsource your job to China!!!
Elizabeth Parisian
Policy Analyst, Stand Up! Chicago
GET UPDATES FROM Elizabeth Parisian
Welcome to the Romney Economy — Making Millions by Shipping Our Jobs Overseas
Posted: 07/21/2012 3:12 pm
A couple of weeks ago, the Washington Post published a report detailing how Bain Capital, under Mitt Romney’s leadership, invested in companies that specialize in outsourcing American jobs, creating a surge of media and public interest in his relationship to the private equity firm. Since then, the Romney campaign has offered one lame comeback after another — from splitting hairs over the terms “outsourcing” and “offshoring” and trying to drum up VP speculation, to flat out “whining” as Karl Rove put it — in an attempt to distract voters from the real issue: Mitt Romney has personally made, and continues to make, millions from shipping American jobs overseas.
Decimating American jobs through offshoring is a main element of what we’ll call the Romney Economy, an economic ideology that focuses exclusively on enriching America’s wealthiest individuals via tax cuts for the rich, and a business ideology centered on taking over companies, siphoning off the profits, laying off workers, and leaving crummy low-wage jobs for everyone else. Exemplified by Bain Capital, the Romney Economy involves sacrificing the jobs, security and well being of working Americans in order to funnel wealth to a relatively few extraordinarily rich folks in the financial industry. In a recent blog post, Robert Reich describes it this way:
…
This guy has an interesting sense of timing, posting this article a few days before the stock market opens with a 200 point drop on Dow futures.
July 20, 2012, 12:02 a.m. EDT
Volatility just ain’t what it used to be
Commentary: Opportunities exist for bold investors
By Howard Gold
NEW YORK (MarketWatch) — Investors are terrified of volatility. Turn on the television, pick up the paper, log on to the Internet, and you’ll hear about how scared people are of the wild gyrations in stock prices. It’s just one more reason retail investors have abandoned the market like the plague.
Only problem is, it isn’t true.
…
If the fellow is making money on the transactions, he’s going to try to get people to execute transactions. He wins or loses whether the market goes up or down.
These tales of the skill and daring of the individual outsider day-trader making a killing are absolutely laughable. The information, by the time it reaches the small retail individual has already been acted upon by the insiders.
Is it possible that someone can find the gold nugget in the ground? Sure, it happens. That’s what keeps people coming back. But, the type of nugget most people are going to find is not made of gold.
I have a friend who was investing in Forex. After a while, he felt that his trades were not getting executed timely. So some of that may play into the unlevel playing field, too. The big players may get to time their trades more finely than the smaller ones.
It’s like we are the slow, dumb kid on the field playing against the quicker, smarter ones. If we were playing for fun, it wouldn’t matter so much.
If Libor can be manipulated, isn’t there at least some potential the VIX and other derivative indexes are as well?
VIX up as markets prepare for manic Monday
July 23, 2012, 9:02 AM
With the 10-year yield at all-time lows, and stock futures indicating a 200-point selloff in the Dow at the start Monday, you’d think volatility indexes would be popping.
And indeed the Chicago Board Options Exchange volatility index VIX +5.31% is up more than 5% Monday morning.
…
Potential? You mean they aren’t already?
The comparisons made here to the financial markets being casinos is in fact, right on the mark.
Game theory has been used on Wall St ever since it was invented. Game theory combined with computers meant the rest of us never stood a chance.
The way to win is not to play.
…and to cheerfully mock the players.
“Potential? You mean they aren’t already?”
Well, yeah, I was pretty much suggesting that.
“If Libor can be manipulated, isn’t there at least some potential the VIX and other derivative indexes are as well?”
So you’re under the impression that the libor fraud isn’t an outlier? Come on Bear…the markets are the modern world’s store of wealth, and the folks who run them are moral paragons, exemplars in thought and deed for the entire human race.
There is a difference. LIBOR was uniquely subject to manipulation because the data collected to create it was not public. When stuff is created off public data (like how much prices are going up and down on publicly traded exchanges), it is harder to manipulate.
“There is a difference. LIBOR was uniquely subject to manipulation because the data collected to create it was not public.”
There was also the matter of a small number of top banksters involved, opening the door to collusion.
“So you’re under the impression that the libor fraud isn’t an outlier?”
Cockroach Theory rules in the financial world, dude!
Unlike in the ivory tower realm of classical statistics, a sample of size one can be quite revelatory in the real world.
Can China Hold Things Together?
July 1, 2012
Recently, there have been a number of alarmist stories coming out of China. I had pointed out a number of concerns (see Focus on China, not Europe and Ominous signs from China). In addition, Patrick Chovanec had highlighted the rising systemic risks that could lead to a “crash landing” rather than just a “hard landing” in China:
In that post, Chovanec went on to detail how the shadow banking system is unraveling:
He went on to detail how one credit guarantee company named Zhongdan had tanked and cratered the loan books of a bunch of banks. This account brings to mind the Cockroach Theory. Where you see one cockroach, there are probably more around. Now Chovanec followed up in a new post detailing further problems with the shadow banking system with a quote from this Caixin article:
Other “cockroaches” are appearing. Bloomberg ran this story about the shaky finances of local governments, which depend on land sales to finance their budgets:
Listen to the market
The problem with China is that it’s very opaque and economic statistics are unreliable. Outside investors have no idea of the size of the problem and therefore cannot gauge the impact of any problem. What we have left are anecdotes like the ones above that can be highly alarmist.
…
Our Ridiculous Approach to Retirement
http://www.nytimes.com/2012/07/22/opinion/sunday/our-ridiculous-approach-to-retirement.html?src=me&ref=general
tease:
To maintain living standards into old age we need roughly 20 times our annual income in financial wealth. If you earn $100,000 at retirement, you need about $2 million beyond what you will receive from Social Security. If you have an income-producing partner and a paid-off house, you need less. This number is startling in light of the stone-cold fact that most people aged 50 to 64 have nothing or next to nothing in retirement accounts and thus will rely solely on Social Security.
And this one:
Not yet convinced that failure is baked into the voluntary, self-directed, commercially run retirement plans system? Consider what would have to happen for it to work for you. First, figure out when you and your spouse will be laid off or be too sick to work. Second, figure out when you will die. Third, understand that you need to save 7 percent of every dollar you earn. (Didn’t start doing that when you were 25 and you are 55 now? Just save 30 percent of every dollar.) Fourth, earn at least 3 percent above inflation on your investments, every year. (Easy. Just find the best funds for the lowest price and have them optimally allocated.) Fifth, do not withdraw any funds when you lose your job, have a health problem, get divorced, buy a house or send a kid to college. Sixth, time your retirement account withdrawals so the last cent is spent the day you die.
Startling? Not if they’d been paying attention over the last 30 years.
Ridiculous? It’s Marie Antoinette ridiculous. But we deserve the government we have.
Those over 75 hit hard by foreclosures. Forget saving for retirement. How about borrowing for retirement?
http://www.marketwatch.com/story/retirees-hit-hard-by-foreclosures-2012-07-19?link=mw_home_kiosk
“While the AARP report does not pinpoint precisely why older Americans faced this predicament, it cites data that helps explain why so many more people had trouble paying their mortgage bill.”
“For one, older Americans greatly increased their mortgage-debt load in the two decades preceding the housing-market crash, with the 75+ age group notching the greatest increase in mortgage debt over the past 20 years.”
“While financial planners often advise people to pay off their mortgage before they retire, fully 24% of households headed by a 75-year-old or older person had mortgage debt in 2010, up from 6% in 1989, according to the AARP report, which cited the Federal Reserve’s Survey of Consumer Finances.”
“Mortgage debt also increased among other 50+ Americans: 54% of families headed by a 55- to 64-year-old had mortgage debt in 2010, up from 37% in 1989. And 41% of families headed by a 65- to 74-year-old owed money on a mortgage, up from 22% two decades earlier.”
Good God. WTF!
You of all people are asking the WTF? You see, contrary to your dogmatic mantra against boomers, many boomers got the shaft just as hard and everyone else. Especially the tail end ones.
No pensions. No raises. No steady income thanks to 5 recessions in the last 40 years. Jobs sent overseas. REAL inflation in the double digits.
That’s “WTF”.
As a “tail end” boomer I know exactly what you mean.
As a tail end boomer, I consider myself the in the first recent generation of Americans to be worse off than those who went before, the 1960s generation.
But not the last. Each generation has become worse off. And it has marched up the socio-economic scale. After the 1970s and early 1980s recessions, the non-college educated were worse off. Then after the 1990s those with regular college degress were worse off. Until a few years ago it was everyone but the one percent. Now it’s everyone but the 0.1 percent.
Borrowing was not the right response to it. The rising debts of most Americans = the rising wealth at the top. They would not have been able to pay less and sell more without it.
I was born in 1960 last of the boomers. I think by the time I was born the Country had enough of babies, burned out on them. 40 kids to a class room and early graduation from High school, just get them out of here already. Best spots in the work force being filled rapidly and little chance of a promotion, at least we were not outsourcing so much back then, although it did start in electronics by the time I was working.
maybe this is why we all grew up so cautious ?
I think by the time I was born the Country had enough of babies, burned out on them.
I was born in 1957. I can recall a lot of kids my age who were the younger siblings, and trust me, their parents were worn out.
Me? I was an only child. By the choice of my parents, and, oh, did my mother have to fend off a lot of personal questions about that decision.
To the nosy people who asked, she’d simply say, “I had a perfect child the first time, so what could I possibly do for an encore?”
Touche, Mom.
I was born in 1952. Graduated college after the 1973 Arab oil embargo into the inflation of the 1970s. It bred a buy now or pay more later mentality in many of my cohort.
My mother has worried that we won’t have as good of a retirement as she did. I told her that I don’t expect to retire anytime soon and can’t see the sense in a 30 year retirement.
WT, you are not the first generation to experience this. The generation that came of age during the depression also experienced it, at least in the first 10-20 years of their adulthood. And in the Victorian era, many experienced the Long Depression for most of their adult life.
And in some ways you are better off than previous generations, just due to advances in technology. There were opportunities in the 80s and 90s that were not available 10 years earlier.
Yep. This ain’t this nation’s first rodeo.
More’s the shame.
“I had a perfect child the first time, so what could I possibly do for an encore?”
You had a sweet mom.
My sister also has an only child. He always seems a bit shell-shocked when coming into contact with my agitated swarm of three boy cousins.
“Especially the tail end ones.”
Hello.
I’m reminded of “Gramps” who lived next door with his daughter and her family while I was a kid growing up. I have to wonder whether “Gramps” was some kind of “foreclosure victim” during Great Depression I.
” If you earn $100,000 at retirement, you need about $2 million beyond what you will receive from Social Security.”
So what would most people make on SS, $20K? That would imply a phantom net worth of $1M invested @ 2% minus taxes on a percentage of the SS income based on you total yearly taxable income. Yes, SS is taxed, the more you make the larger percentage of SS is taxed.
A $100K retirement income means that you are like Bill LA and would need $2M making 5% or have a defined benefit retirement plan that has a phantom $2M making the same 5%. Under the defined benefit situation the income is guaranteed in deflation. Bill LA would have to go into his savings if he could only get say 2% interest. With inflation say Bill LA could now get 7% have his income and grow his savings at the same time.
The third situation is ideal for the defined benefiter’s and that would be to have a Roth or deferred comp plan with about $500K that would go up with inflation to off set the rise in cost of living losses incurred if you only had the income from SS and defined benefit plan.
The difference between the Bill LA plan is that Bill LA has any left over monies when he dies to donate, the defined benefiter has nothing left to donate. The defined benefiter’s income is free from lawsuits and Bill LA (?).
Keep your expenses low and you won’t need a $100,000 retirement income, hence you won’t need $2 million beyond what you will receive from Social Security.
To keep your expenses low, pay off your house and then downsize. What were these people thinking? Dead meat.
pay off your house
So you shouldn’t be renting?
You can’t control inflation. And real inflation has been double what the official numbers are.
Just 20 years from now, you WILL need 100k just to maintain a 45k lifestyle of today.
Use this inflation calculator.
http://www.halfhill.com/inflation.html
Maintain your lifestyle, ridiculous. Peak working years: Mortgage or rent up the wazoo, several nice cars and several insured drivers, groceries for five, clothes and shoes for an army. On the verge of retirement: A modest paid for house & shop, an old truck without comprehensive, kids now buy me gifts, zero commute expenses, a good pair of jeans lasts for years, one of those rolly carts for groceries on foot instead of backing up the SUV at Sam’s club. I can afford to be boating for half the year and total is less than $20K.
Oil City, baby!
(as long as you don’t have to commute to a job.)
Wireless technology has been good to me.
I’m sure lots of CA baby boomers plan to downsize and move inland at retirement. There should be plenty of empty family-sized domiciles around for my kids to choose from, should they decide to stay put when they grow up. For now, my plan is to continue renting for cheap and save up a downpayment for any of them who decide to stick it out here.
May the next generation prosper better than I have!
To maintain living standards into old age we need roughly 20 times our annual income in financial wealth.
LOL. Everyone is a winner. Everyone is special. Everyone deserves to live 30 years in retirement as comfortably as the previous 30 years was while working, and if you fail at that, the government should help me out…
The US population is not special. There are 6+ Billion people on the planet that can attest to this, and most live a subsistent existence. Anyone who thinks they deserve cradle to grave care and support paid for the government can go talk to our former Communist friends in Russia and all the former Soviet republics about how well that worked out for them. Better yet, they can go travel to North Korea, or Venezuela, or China and see how the majority of the population lives. Lastly, they can travel to Spain, Italy, or Greece and see how that economy is doing when the majority of the population don’t work, don’t pay taxes, and expect the government to take care of them.
There’s a saying in sales, primarily commission jobs: You only keep what you kill. I suggest the US population gets acquainted with that saying real quick… if you want a secure retirement, you better figure out how to generate some reliable income streams that aren’t in the “self-help, how to become a millionaire and retire rich, invest like Buffet, make millions in Real Estate” book section at the local bookstore.
I’d rather talk to the folks in the Scandinavian countries because whatever they are doing wrong* with their dang commie government, I want it as well.
(*best social programs in the world AND best business growth)
Norway, Sweden, etc., have a very small population relatively speaking.
Low population sitting on top of a lake of oil.
All those other nations are so stupid for not sitting on top of a lake of oil.
Winners and losers in every game and chance is always a factor…
Norway, Sweden, etc., have a very small population relatively speaking…..sitting on top of a lake of oil
Why would size or population be a determinate factor in Scandinavia’s success when USA’s GDP per capita is higher than Sweden, Finland, Denmark and similar to Norway’s?
No. It’s not lack of luck, wealth or production. What hinders America is gross wealth inequality.
What hinders America is gross wealth inequality.
There is a good article on Mises.org on the economy of Norway, Sweden, Denmark and why they are doing well when they are considered heavily socialist. The reality is that they have opened up their markets considerably since the 70’s. They have less regulation than the US and the majority of Europe. While they still have very high taxes, the fact that regulation doesn’t get in the way of businesses means capitalists can actually make money…
The problem with the US is that a considerably portion of our population is unproductive, we have too much business regulation, and a tax code that is overly complicated. Why does population size matter? Because we have far too many collecting government benefits vs. the number actually paying taxes and paying into those government systems. That should be obvious…
The problem with the US is that a considerably portion of our population is unproductive,
False. When there were jobs in the 90’s we had “full employment”. What 4.5% unemployment? Americans are productive when an economy is structured to provide jobs and not structured just for a few to get rich.
we have far too many collecting government benefits vs. the number actually paying taxes and paying into those government systems.
Because the wealthy in the USA pay much lower taxes than in other countries while they reap much more benefit than in other countries. That should be obvious…
When there were jobs in the 90’s we had “full employment”. What 4.5% unemployment?
Lies, damn lies, and statistics.
Let’s start by saying the U3 unemployment rate does not describe all of the working age people in the US who could work.
As far as tax rates go, the top 10% of wage earners pay over 70% of all taxes collected. The bottom 50% of earners don’t pay taxes at all.
Let’s put that in perspective:
US population: 300 Million
67% age 15-64 (working age): 200 Million
Labor Force (those working or looking for work): 155 Million
Top 25% income pays 87% of Federal Taxes: 38 Million
So, 13% of the population is paying 87% of the Federal tax burden for the remaining 87%… but taxes are too low? Fail.
While they still have very high taxes, the fact that regulation doesn’t get in the way of businesses means capitalists can actually make money…
I’m trying to figure this out. People like to complain about regulations, but it seems that the moment some regulator lets his guard down, all hell breaks loose. As X-gs fixer says, every FAA regulation is backed up by a smoking hole in the ground. Poison dog food was a regulatory failure. Repealing the Glass-steagal regulations led to a banking failure, to put it mildly. Cutting corners led to an explosion on an oil platform in the Gulf. The regulators in Japan were a little too cozy with the Tokyo Electric Power Corp (TEPCO) and we see what that led to.
What is Scandinavia doing that we aren’t?
What is Scandinavia doing that we aren’t?
Providing a strong social safety net that allows people to be entrepreneurs or work for start-ups, unlike our system, which discourages both things with our employment-tied health insurance.
That’s how the Scandinavian countries are ’socialist’- the large businesses aren’t owned by the gov, as in classical socialism.
“Norway, Sweden, etc., have a very small population relatively speaking…..sitting on top of a lake of oil”
We in the U.S. sit on top of many a lake of oil, which the environmental whackos prevent us from exploiting.
“The problem with the US is that a considerably portion of our population is unproductive,…”
Less folks working = more of our population is unproductive.
But it’s all good, as the 1% can profit more when the unemployment rate is higher, by saving employment costs.
So, 13% of the population is paying 87% of the Federal tax burden for the remaining 87%… but taxes are too low? Fail.
You’re the “fail” dude. Yes taxes are way too low for the rich. The poor pay more of a percent of their income in TOTAL taxes than the rich.
Low taxes on the rich have greatly contributed to extreme wealth inequality and federal budget deficits.
Compared to OECD countries, USA is a low tax country, especially or the rich. And you know it.
Tiny homogeneous populations based on Judea-Christian law with massive energy reserves.
ANY governmental system would work.
I’d rather talk to the folks in the Scandinavian countries because whatever they are doing wrong* with their dang commie government, I want it as well.
Like Nigeria?
What 2Banana didn’t mention is that peace is also required for prosperity. War, conflict, and anarchy is the bane of prosperity and Africa has been in a constant state of conflict since most countries received independence from their colonial masters.
Nice try though…
Indeed, thanks to its “neutrality” during WWII, Sweden was never bombed or invaded.[1] This left Sweden’s industries intact and unharmed, which, along with its free-market-oriented economy, enabled the country to profit extensively from the reconstruction of war-torn continental Europe: Sweden exported huge amounts of goods and natural resources to the rest of Europe, fueling an economic boom in Sweden that lasted for over two decades
Mises.org.
1. Norway was occupied, bombed and had a pretty good resistance war going in WWII. Same with Finland. Same with Denmark. They seem to be doing as good a Sweden today.
2. Nigeria. I know to you they are all black. But there are about 350 tribes that pretty much hate each other in Nigeria.
Nice try though…
They seem to be doing as good a Sweden today.
My thought on this is that because of the proximity to each other and the relative homogeneity of the populations, rebuilding was easier with support from Sweden…
Nigeria. I know to you they are all black. But there are about 350 tribes that pretty much hate each other in Nigeria.
Okay, call the Star. This is news. I’m about to agree with the dual banana person.
College friend corroborated the above when he was the Washington Post Africa bureau chief during the 1990s. Guy went to Africa with the best of intentions. Getting in touch with the African side of his African American heritage and all that. And reporting the on-the-ground story about things like the Rwanda massacre.
What he found was that he was forever being accused of being part of the wrong tribe. Hutu in Rwanda, the wrong clan in Somalia, that sort of thing.
Long story short: After three years, he was very glad to get on board a British Airways jet and get the h-e-you-know-what out of Africa.
relative homogeneity of the populations
I keep hearing this bandied about as proof of why ’socialism’ (really welfare-capitalism) works in some places, but not others. How does it explain Canada or Switzerland, not to mention Brazil? (Since I’m sure everyone being white will be the subtle unspoken reason for Canada and Switzer).
You said “Any” and now you make conditions.
Uh huh.
DO NOT make me call the spirit of OlyGal down on you!
I keep hearing this bandied about as proof of why ’socialism’ works in some places
Not sure if I gave that impression, but it wasn’t in regards to the success or lack thereof of socialism. More to do with internal conflicts and polarization of politics. I think in general societies that are homogeneous tend to be less polarized.
2B has a point. I think homogeneity helps. In our country, there are different groups that have been systematically pissed on over the decades. So it’s natural that there is some residual anger there from both the subjugated and the subjugators. Not a good recipe for a collective consciousness that socialism probably requires. As for Canada, my first wife was Canadian. Most Canadians (from my observation, anyway) don’t just accept their socialist side, they are proud of it. Quote from her dad, “January to June, we’re working for the government, from July to December we’re working for ourselves, and we like it this way”. If most people are proud of how they pool their resources for a common goal, they have a good chance. Anyway, homogeneity, a shared history, relatively small population, national pride, these all make for successful socialism. The small population part also makes it harder to commit fraud. It might work here, but it would be much harder (more complex) to implement.
Anyway, homogeneity, a shared history, relatively small population, national pride, these all make for successful socialism.
Your first wife didn’t teach you much about Canada. Have you heard there are some Frenchies up there?
Ah yes, the last time we were there, Quebec took a secession vote that lost 51-49%. Always seems to end up that way. I guess the odds are that one of these times, they’ll actually do it.
Did I NOT say… (*best social programs in the world AND best business growth)?
DO NOT make me call the spirit of OlyGal down on you!
Agreed. You don’t want her whacking you from the beyond with a geoduck.
Friend(crazy narcissist that I have to get away from) just went to NZ to avoid getting served in his divorce. And to spend his $$, “cuz the lawyers are gonna take it all anyway”.
I would love to elaborate on his spiral into decrepitude and squalorous living, but will save it.
Have you heard of container homes? My acquaintance says that in NZ they are all the rage. Get a piece of land, plop down a couple 3k shipping containers on piers, customize/ insulate them for a few $k more.
BTW if Maori, you get the dole and reasonable health care. Beyond that they hunt for shellfish. Subsistence level; no blue light keeping them up all night. But even they need some social security bux. Not as pathetic as what goes on on our local rez; where they don’t leave the trailer unless for drugs, booze, cigs. Not too many aspire to get out. In NZ the indigents seem better off.
Sorta like the yurt; or a pole barn +slab and septic where you could park your motorhome. Would that be even more “oil city” than just having a paid off home? Feasible in unicorporated areas. Or just pie in the sky hippydippy idealism? I vote the latter
Have you ever been in a cargo container in the middle of August? Or January? By the time you get them insulated, ventilated, wired, and secured you’ve reduced your 8′ wide living space to a 6′ hallway– and then there are the plumbing and sanitation issues.
There ’s a good reason you can’t get these past the planning commission (here or in NZ) without a couple hundred thousand dollars worth of mods. Why not just buy a used double-wide and be done with it?
Double wide it is. After we sell our 3/2. guess the north end of nz is temperate enough to not get too hot or cold. Like the motor home in the pole barn. In eastern OR there are lots of trailers with “additions”.
Next step down the property ladder is coming for us. At least with manu’s cash goes a long way cuz the bank does not want to lend on such a rapidly deteriorating structure.
What goes up; surely comes down. Still need shelter and insurance(it has helped pay for many services that would have broken the bank despite my bitching about what they did not cover); wife is applying at Costco today…
There are some good designs out there.
http://dornob.com/40-foot-cargo-containers-into-stylish-small-home-spaces/
I’m voting for viable alternative.
The US population is not special.
But we are exceptional and God shed his grace on us.
But we are exceptional and God shed his grace on us.
We are lucky, plain and simple. We are lucky by virtue of geography, natural resource allocation, and that our founding fathers were exceptional men…
You have to read the other verses, too.
I’m rather fond of “God mend thine every flaw.” Next line is “Confirm thy soul in self- control.”
“…Thy liberty in law.”
Oops. Sounds like an implicit endorsement of governmental regulation to me….
Anyone who thinks they deserve cradle to grave care and support paid for the government can go talk to our former Communist friends in Russia and all the former Soviet republics
That’s a pretty common, current strawman but most Americans don’t want that jive. They just want a fair system where most can thrive. You know…..like it used to be.
They just want a fair system where most can thrive. You know…..like it used to be.
Ah, but like when? The 50’s… where the US, by luck of geography, had the only infrastructure left in the world to rebuild Europe and thus generate jobs and wealth here.
The geopolitical variables which led to the prosperity of the 50’s are no longer present…
The geopolitical variables which led to the prosperity of the 50’s are no longer present…
So you’re saying USA’s current form of capitalism being sold to us is a lie.
So you’re saying USA’s current form of capitalism being sold to us is a lie.
No, I’m saying that the “Average American” who just wants a fair system like it used to be doesn’t understand that the economic prosperity of the 50’s was an anomaly. That those conditions are no longer present, so the average American will continue to lose in the competition with foreign labor, at least until some level of protectionism/parity is found. Capitalism was always a system where some benefit and some don’t economically.
Who’s being lied to? I understand capitalism quite well. You? The poor? The middle class? Who needs to be educated as to how capitalism works? I’m pretty sure the only lies being told are how Socialism isn’t just watered down Communism and that Socialism actually works as an economic system (it doesn’t)…
I’m saying that the “Average American” who just wants a fair system like it used to be doesn’t understand that the economic prosperity of the 50’s was an anomaly.
So what you’re really saying is that the USA’s current form of capitalism being sold to us is a lie.
Capitalism has losers and winners. Capitalism allows for governments to set rules to keep the competition as fair as possible. When government starts meddling with who wins and loses, then it’s adding in a flavour of socialism.
I like the Capitalist ideal. Bailing out banks or car companies are not capitalist actions; pure stupidity by any theory except fascism. Setting up government sponsored or run organizations to help people buy houses they can’t afford is more stupidity. Government should stay out of the way here. I’m less enamoured of Capitalism when the application leaves people uneducated and unfed.
The 50s saw the US with an unprecented strategic advantage (infrastructure not bombed.) That’s faded over time. Whether we like it or not, jobs leaving to other nations is an aspect of Capitalism. The West can be the losers in Capitalism. We can argue that our governments are making us play by the rules while others don’t, but the price advantage of foreign labour is still a powerful incentive.
So what you’re really saying is that the USA’s current form of capitalism being sold to us is a lie.
Capitalism isn’t perfect, but I’ll take that over the failed premises of socialism and communism any day. Socialists need to ask themselves why every socialist/communist country has either failed or has attempted to adopt some form of capitalism, to include Scandanavian countries. (Having deregulated business since the 70’s from their socialist utopia). Even Cambodia is opening up it’s state run utility businesses to private investment on a stock exchange…
but socialism works, it really does…
“Infrastructure not bombed”
Neither was Great Britain’s, for the most part. Neither was the Soviet Union’s. Or Australia’s. Or Canada’s. Or Brazil’s.
Germany and Japan’s economies were well on the road to being rebuilt by 1955. Exports of cars from Japan and Germany to the USA started in the early 1950’s.
Our government has been throwing our manufacturing under the bus for years. For geopolitical/”big picture” reasons. The Big Three could have crushed the Euro and Japanese manufacturers like a bug, if they wanted to. They didn’t because the markets (at the time) were too small to set up distribution networks, and it was felt that viable industries and “free markets” would save Europe and Asia from the Godless Communist/socialist heathens.
So the Euros and the Japanese (and later, the Koreans) were allowed to grab US market share, while building serious trade barriers against US products at the same time.
A few million sales here, a few million there, and pretty soon, you don’t have a US auto industry anymore.
Compare the choice you had in 1965, vs today.
GM-Ford-Chrysler-AMC, then VW, then a few percentage points (or less) of the market to the Japanese and Euro nameplates. Nothing from Korea. No “domestic imports” from Mexico. Almost all production in Canada stayed in Canada.
Now? The imports started out in “niche” markets, then leveraged their way into more market share. GM-Ford-What’s left of Chrysler have significantly less market share. Toyota, Nissan, Honda, Mitsubishi, Hyundai, Kia occupy the spot where Chevy and Ford used to sit. BMW occupies the same place in the market that Pontiac used to. Subaru has taken the “weirdo liberal” market from Saab and Volvo. The high end Chryslers have been killed off, Cadillac and Lincoln compete with Audi, BMW, Lexus, Infiniti, Mercedes Benz.
All of this “choice” may be good for the free market consumer, but it’s screws your US manufacturers. There isn’t another market big enough to justify setting up the infrastructure to go head-to-head on sales. Except China.
And as we’ve seen, the Chinese have zero intention of allowing any kind of “free market” to exist in their home market. They are pulling the classic “Let the capitalist sell you the rope you will hang him with”, by letting the dumbazz Yankee businessmen dream about the Chinese market that may eventually exist, but require you fork over money and intellectual property now. Soon to be followed by a new Chinese-government owned competitor.
50’s weren’t too great if you were black.
Socialists need to ask themselves why every socialist/communist country has either failed or has attempted to adopt some form of capitalism, to include Scandanavian countries.
The people you accuse of being socialists generally don’t believe in government-control of business. What we’re really talking about when we say socialism is welfare-capitalism. The free market exists in the Scandinavian countries- anyone can open pretty much any kind of business there. They just have strong social safety nets, which actually encourage entrepreneurship, unlike our employment-tied benefits, which encourage people sticking with their jobs with the big boys.
The free market exists in the Scandinavian countries- anyone can open pretty much any kind of business there. They just have strong social safety nets, which actually encourage entrepreneurship, unlike our employment-tied benefits, which encourage people sticking with their jobs with the big boys.
Which is why I keep saying that when our country gets national health insurance, the National Anthem will temporarily become “Take This Job And Shove It.” I’m especially fond of the Johnny Paycheck version.
In the Pacific Northwest, Subarus are favored because they are reliable, gas efficient, and have AWD. It makes them a good choice for people who have to or want to cross snowy mountain passes. You can also find a 20 year old Subaru for not very much cash money that will still be reasonably reliable, gas efficient, have AWD and get you across a snowy mountain pass.
“The people you accuse of being socialists generally don’t believe in government-control of business.”
And this is the big lie about Socialists in America. There really are very few of them. Most people who are called socialist by talk radio are not really socialist, including our current President. They are really capitalists who just want a fairer system - one that doesn’t favor large players over smaller ones.
“When government starts meddling with who wins and loses, then it’s adding in a flavour of socialism.”
Which flavor of socialism to benefit Wall Street banks would you prefer, Romney’s or Obamney’s?
“Which flavor of socialism to benefit Wall Street banks would you prefer, Romney’s or Obamney’s?”
Try reading my second para.
A little story:
So I’m out and about and I hear two guys talking about how they started their individual businesses and didn’t need no stinkin’ handouts, especially from Obama! (bear with me, I know it already doesn’t make any sense)
They proceed from there to bash Obama and his economic policies, all the while braggin’ how great their businesses are doing without his handouts!
You can’t fix that kind of stupid.
My favorite question in that situation is to ask if they had to teach their employees to read.
“You can’t fix that kind of stupid.”
But your kind can be fixed?
My favorite question in that situation is to ask if they had to teach their employees to read.
Like education was non-existent before the Federal Government created the Department of Education. Like public schools were the only way anyone could receive an education. Like public schools aren’t primarily funded by LOCAL REAL ESTATE TAX DOLLARS. Not the Federal or State government.
Fail. Try again.
Where is there anything in the above statements that says that it has to be federal tax dollars providing the education? We have infrastructure in this country. That includes physical infrastructure. Also the legal system (try enforcing a contract if you don’t have functioning civil courts). Also the fact that most of our citizens have basic education and are not sick. You can’t have that without government. Think about it really, really hard. If we dismantled the structures, we could coast along for a few decades maybe, but that is it. Business would fall apart without the support. Who would business hire? How would they enforce contracts? How would goods get to market?
Libertarianism sounds great if you imagine everyone voluntarily following the rules that aren’t there anymore. Guess what? They wouldn’t.
Guess what? They wouldn’t.
Heck, people can’t even be trusted to use their turn signals to let other highway users know what their plans are when navigating a two ton hunk of metal and plastic.
Yeah, the “You didn’t get there alone” speech by Obama was a great one. Government provides the foundation from which everything else is built. That’s why we pay taxes, to build and support that foundation.
That was never in question. What is in question is where does the role of government end and where does the extent of taxation stop.
And those business owners Turkey was deriding? It’s their hard work and risk-taking that employs Americans and pays taxes to the government. Without them, Obama is just a guy in a suit who can read from a teleprompter. Without them, he has nothing to tax, nothing to protect, nothing to regulate and legislate…
It’s their hard work and risk-taking that employs Americans and pays taxes to the government.
Ah, yes. Those job creators. All bow down to the almighty job creators.
Thanks for proving my point Hi-Z.
I am about to die laughing at who got the point here and who didn’t.
You can’t blame economic success on bad economic policies.
Turkey, how’s this for a conclusion:
When businesses succeed, they credit themselves for hard work and ingenuity while ignoring the environment that government created for their success.
When businesses fail, they blame government for the toxic environment they created.
When the economy is faring well, the government claims credit.
When the economy is failing, the government blames forces beyond their control like the Chinese or the previous administration.
Northeastern,
Well said! I think I am in love with you! OMG you get! It seem like so few do.
you get it!
Contagion is ragin’…
BULLETIN Euro falls to a two-year low, breaking below $1.21
July 22, 2012, 7:59 p.m. EDT
Greece reportedly faces IMF aid cut-off
By Michael Kitchen, MarketWatch
LOS ANGELES (MarketWatch) — The International Monetary Fund is set to stop aid payments to Greece, raising the odds that the nation will become insolvent as early as September, according to a German press report Sunday citing unnamed European Union officials.
The “Troika” of international groups overseeing Greece’s aid — the European Commission, the International Monetary Fund and the European Central Bank (ECB) — are due to send inspectors to Athens this week to gauge progress toward the requirements of its assistance program.
However, Der Spiegel reported that it’s “already clear” to the Troika that the Greek government won’t be able to trim spending to 120% of economic growth by 2020, as required, according to a Bloomberg News translation.
And if Greece were allowed more time to reach its spending-cut goals, it would need a further €10 billion-€50 billion ($12.1 billion-$60.5 billion) in aid, Der Spiegel reported.
The report said the ECB could step in with aid in the interim.
Separately, German Finance Minister Wolfgang Schaeuble was quoted in the daily Bild that as saying Greece must redouble efforts to comply its aid terms.
“If there were delays, Greece must make up for them,” Schaeuble told the Bild, according to a translation by Agence France-Presse.
…
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Greece seeks billions of euros more in cuts: WSJ
Asia stocks slump on raging euro-zone fears
Spain, Greece fears push Europe stocks lower
I will believe it when I see it.
For all those applauding the kick the can down the road approach, here is the result. Take credit for saving us from a depression; this is on you:
‘(AP) — The ranks of America’s poor are on track to climb to levels unseen in nearly half a century, erasing gains from the war on poverty in the 1960s amid a weak economy and fraying government safety net.’
Well played, Mr. Bernanke, well played.
This is what “the future belongs to Lucky Ducky” means.
“Poor” in America today means you only have 100 channels instead of 300 channels.
With food stamps, Section 8, WIC, EBT, LIHEAP, Medicaid, head start and the 1000 other govt freebies available, there are no poor people in this country. There are poorER people compared to others. But that’s not the same thing as being poor. The govt will feed you, give you a house, provide you with free health care, give you a phone, heat your home, educate your children. And in some state, give you a cell phone and even high speed internet (in WA state if you have kids in the free lunch program you get free high speed.)
The govt will feed you, give you a house, provide you with free health care, give you a phone, heat your home, educate your children.
Sounds dangerously close to civilization. We should dismantle it at once! We need begging street urchins!
“Sounds dangerously close to civilization. We should dismantle it at once! We need begging street urchins!”
I hope your strawman is nowhere near a fire
Well, what do you get when you take away the programs that provide food, shelter, and medical care to the poor?
Riots?
Riots?
Probably. And definitely street urchins.
It’s not a strawman when it’s true.
This is what the Lucky Ducky future looks like:
http://m.rollingstone.com/?redirurl=/culture/news/the-sharp-sudden-decline-of-americas-middle-class-20120622
The conservative answer is that you will get people willing to get motivated, get trained, and get a job.
In theory.
Too bad there are no jobs.
In theory.
Yep, but they can never give you a real-world example. In the real world, there are many countries that have little in the way of social safety nets, and plenty of street urchins.
This is what the Lucky Ducky future looks like:
http://m.rollingstone.com/?redirurl=/culture/news/the-sharp-sudden-decline-of-americas-middle-class-20120622
Somehow, I doubt that lady has 100 channels, or even a TV. The story also highlights that the “free sh*t army” isn’t all that, especially if you are middle aged and don’t have kids. And the woman used to own her own business.
Smithers,
The fact that these programs exist does not necessarily mean that they are accessible or availed of. Moreover, over-crowding, dirt floors, lack of plumbing, electricity, or schooling for girls over the age of ten is a sad reality in this country, and you’re kidding yourself if you think America’s urban and rural poor don’t mirror with the poor of the rest of the developed (and developing) world.
There are plyboard shanty towns all along the railroad tracks paralleling Hwy 58 here in Central CA. A decrepit RV/cab-over camp site using water from a cattle tank sits not five miles from me. And our National Forests are full of day-camping transients who go from site to site as their two week permits expire. Many have children in tow.
Again, you demonstrate a political naivety and lack of real-world knowledge that is simply breathtaking in a person who presumably graduated from high school. Maybe you should get out more often?
Too bad there are no jobs.
There are plenty of jobs if you have the right skills and experience. I just talked to a recruiter today and had to turn down a potential job paying $110k… wasn’t an interesting technology to me and that is considerably less than I currently earn.
This was an unsolicited call as technically I’m not in the market for another job. On Thursday of last week I was offered some contract work, but had to turn that down because I don’t have the time… contract would have paid $95/hour.
Most of the long-term unemployed don’t have the skills to compete in an information-based economy. That is slowly being addressed as they are aging out of the workforce and younger workers are entering…
Every time I walk by a McDonald’s there is a Help Wanted sign in the window. Same for Starbucks, Chili’s etc. There are jobs. Tons of jobs. Nobody’s willing to work for $8/hr. And why would anyone do that when the govt will provide you with everything you need.
Not everyone can be a techie.
And why would anyone do that when the govt will provide you with everything you need.
And there it is… the bane of socialism.
“Nobody’s willing to work for $8/hr.”… because those are below-poverty-level wages.
Fixed that comment for you Smithers!
And why would anyone do that when the govt will provide you with everything you need.
And there it is… the bane of socialism.
Gotta keep the hamsters running in their wheels. More hours every day, more days every year. All benefits accruing to the elite.
“There are plenty of jobs if you have the right skills and experience.”
How many of them are there? Would they still pay $95/hour if there were a lot of people with your skill set? How long would it take and how much would it cost for someone to acquire that skill set? Does the employer want 5 years of experience?
“Riots”
I take this news of riots in the LA area as a sign that a real estate bottom is a few years out — just as it was during the early-1990s riots.
Caught on camera: The moment police fired at women and children with rubber bullets in LA ‘riot’ and as they battled angry mob over man’s shooting
* Police dog rushes into crowd and bites man in fight on the street
* Riot started after fatal shooting of man, 24, who was running from officers
* Two policemen suspended in aftermath of protests
By Daily Mail Reporter
PUBLISHED: 21:29 EST, 22 July 2012 | UPDATED: 05:04 EST, 23 July 2012
Shocking video has emerged which depicts police officers firing rubber bullets into a rioting crowd which includes women and children.
The footage also shows a police dog rushing in to the fray and nearly knocking over a mother who was pushing her baby in a stroller.
The violent scenes came in the wake of an incident where a 24-year-old man was shot dead after running away from police, two of whom have now been suspended.
Scroll down for video
…
You really have NO clue what you are talking about, Smithers.
Which is why said person is sometimes referred to as Mr. Slithers.
His real name is Eddie.
Even Eddie wasn’t as willfully obtuse as Smithers. Either he’s regressed, or Limbaugh’s bought himself a new gerbil. Given the handle, I have to suspect the latter.
Is that thanks to Mr Gates?? Throw some of that signal south to OR. Wife is a lunchlady; she says almost 50% of the student body is on free lunch bennies. All of these people get $60/month/kid extra $$ for the three summer months thanks to SNAP; plus free lunch programs in places such as Sisters, Depoe Bay, Prineville(and most other counties here in OR). For ALL kids 0-18. Nobody should be starving. Nor are there food lines. So much prettier to have a credit card looking thingy. And buy Monsters on the dole.
As far as my family leeching off this system; we did not take aid until it became painfully apparent that we needed it for the kids.
When I had money; I spent lots of it. I paid cap gains taxes when “investing”(200k in state and federal taxes, by the time I sold out of CA, the property had been a rental for too long to claim exclusion), and have paid $3k/yr in uncovered medication(nerve pain deemed fibromyalgia; insurance would pay for an antidepressant plus another drug that I stopped taking cuz it did nothing. Thanks but no thanks); $45,000 in an uncovered surgery, deemed to be “experimental” surgery after receiving pre-approval, no birth control coverage, plus 15 yrs of premiums(100k) in health care coverage that did pay for around 60% of my 3 other surgeries(shoulder, neck, and ankle). Premiums were up to 10k per year(used to be half that though); until we got the kids on OHP., now it is $7200/yr for wife and I. Her recent hysterectomy cost 8k out of pocket. Probably half million all told in misc. costs. Now they are not offering our plans anymore($1000 deductible). $2500 deductible is the closest we can come. Obamacare gives us a grain of hope and change; but why are $1000 deductibles going the way of the dinosaur in the waiting period?
So to those of you peeved we get food stamps (3k/yr for 1 yr so far), and OHP (substandard care; 6 months to get a filling for example), or foreclosed, please know that we will be losing our healthcare or our house unless I or my wife gets a job with benefits. And have lost more than we have gained by paying our own way thus far.
But we still have cable, internet, cell phones, food, shelter, so I am not bitching about being poor; we are not living that level just yet. If I stir things up here; so be it. Its the internet; people can and will say mean things and attack, or call me a liar. Which makes me say, how am I lying?
I am not Batman crazy, have orange hair, a vacant glaze, or a batman mask and a booby trapped home (watched a few minutes of the Aurora guy today in court). So what if you hurt my feelings. Is the pen really mightier than the sword? I met a guy who always travels with three things: a coke can, a sock, a bic pen. To take down potential terrorists. Kerrazy!
So to those of you peeved we get food stamps
If you need it, take it. I don’t disparage anyone who thinks they need it to get by, especially if you have children. The problem has always been the fraud of those taking advantage of the generosity of the system when they clearly don’t need it.
Case in point. My best friend’s sister-in-law has two young children and is on SNAP. She was bragging to her sister (my friend’s wife) this weekend how she has over $10k saved for college for her 4yo and 2yo. That is more than what my friends have saved and they earn 3-4X what the sister-in-law and her (separated) husband earn. SNAP doesn’t look at assets, just income. Since much of the sister-in-law’s income is off the books, as she is a bartender, she “qualifies” for the SNAP program. I’m sure everyone has a similar story about SNAP, Section 8, Unemployment, Disability…
Is this fair? Is this a good use of taxpayer dollars? Polly made a point a while back that it would cost more to have food banks run by the government than to just give the poor money for food and deal with the fraud. How much does fraud and waste cost? How much is the price of “fairness”? No one ever said people should go hungry, at least in the US, where the government subsidies for farmers are huge…
By the way, the fact that it would cost more is not a reason not to do it that way. It is just one of the considerations and for cash strapped states, it is more important than retaining the asset test to make things seem more fair. When my uncle’s kids were eligible for WIC (they were in foster care until they were adopted), actual food was delivered to their house. The local dairy delivered milk. They had a box for other food deliveries. Diapers were left next to the back door. Worked in Vermont, though I expect it was pretty expensive, expecially in more rural areas where the houses were further apart. It also guaranteed those families got food even if their transportation was broken. It wouldn’t work in a lot of other places.
“there are no poor people in this country.” Marie Antoinette, 1792
“Hope you are not on the kill list.” Barack Obama, 2012
And if the common “poor” Frenchman of 1792 had free housing, free food, free medical care, free education provided by the govt, that would have been an accurate statement.
Straw man troll alert.
Well played, Mr. Bernanke, well played.
Take a close look at the PIIGS of Europe. 20+% unemployment and governments on the brink of failure. Bernanke has managed to get the US economy and the stock market back from the brink (DOW 6000 in 2008 anyone?).
Within my circle of family, friends and acquaintances, no one is jobless and people are making money and getting by. For many in the US, that is the case. That was preferable to those at the top levels of government and finance than the alternative which is playing out in Europe right now. TPTB bought time for many of us, and I’ll take that over the complete collapse of the economy any day.
So again, I say “Well played, Mr. Bernanke, well played”.
It’s the magic of borrowing to maintain the lifestyle. Some of us think the payback will cause whiplash.
It’s the magic of borrowing to maintain the lifestyle. Some of us think the payback will cause whiplash.
Was at a Red Sox game Sunday. Parking was $35. Tickets were $90 a piece. A hot dog was $5 and a beer $9. The stadium was packed. Traffic on a Sunday afternoon was backed up from Boylston all the way down 93S to the Rt3 split, about 15 miles.
People were out, living life, enjoying a ball game, spending money. The economy in action… but for some, it should all have collapsed because the bailouts were wrong. It should all have collapsed because the middle class has shrunk and the poor have increased. TPTB bought time, and I for one will take every minute of it… you only need to look at the misery and unrest in the PIIGS to understand.
TPTB bought time, and I for one will take every minute of it…
But at what cost that has yet to be paid?
“The economy in action”
“The bankster bailout economy in action”
Fixed.
Nothing illustrates the rich/poor divide better than this depression we’re in.
Every major city has it’s pocket of Starbucks drinking, BMW driving, Abercrombie and Fitch wearing prosperity.
Spend some time in the mid-size and smaller cities in Flyover.
Steady trickle of foreclosures. Nobody buying houses, or anything else, for that matter. Malls half empty, vacant storefronts all over. Any business opened in the past 5-10 years is dead, or dying. The only thing keeping the economy going around here is the government employees/management, and all of the National Guard freeloaders/double-dippers, and 18-24 year old soldiers from the nearby US Army post.
The only new businesses around here are the “Cash for Gold” and “Payday Loan” stores. These used to be in the “ghetto”, but are spreading to most neighborhoods……all of those, except for the neighborhoods the local 1%ers live in.
The kids with money (or scholarships) continue to go off to school. The rest join the military, or work at fast food places. No “entry level” jobs of any kind.
Years ago I was privelaged to run the crawfish traps of a friend in the basin. Some things were a little new to this yankee. One was the baseball sized red balls floating on the flood waters. My Cajun friend told me not to touch when I was looking closely at one. Fire ants. They ball up when the water rises. The ones on the bottom die. The rest go to the ball game.
The ones on the bottom die. The rest go to the ball game.
Life isn’t fair. It only takes a few minutes of watching the Discovery Channel and nature in action to see that.
Having said that, yours was a great story.
We already have 15% or 16% unemployment. Actually we are in much worse shape than EU.
Yup. The key difference is that Americans have been conditioned to feel ashamed if they are poor, and to despise the poor. Which is one reason why we don’t see riots here.
We already have 15% or 16% unemployment.
That’s U6: The U6 unemployment rate counts not only people without work seeking full-time employment (the more familiar U-3 rate), but also counts “marginally attached workers and those working part-time for economic reasons.” Note that some of these part-time workers counted as employed by U-3 could be working as little as an hour a week. And the “marginally attached workers” include those who have gotten discouraged and stopped looking, but still want to work.
Big difference between 20% U6 and 20% U3. U3 is currently around 8%. And no, we’re not in worse shape than the EU. When the Feds start bailing out states like California and our unemployment rate is twice what it is currently, we’ll be getting there, but not yet.
Where are the people not in labor force? I suppose EU can lower there unemployment with some statistical gimmicks that we use.
their
Northeasterner
Respectively I disagree with you because;
Protecting overleveraged gambling banks without ultra strong conditions was a severe mistake because BB has introduced cheap money to do it which is now a forced commodity and will wreck all sectors of the economy instead of just the financials if it comes back into adjustment suddenly - eg euro bond rates. Another example - manufacturing would lose it’s current profitability with interest rates of 7% vs current rate. At 7% the govt deficit would be 2.5T.
Cheap interest has only made it easier to keep spending without fixing the core problems.
Deleveraging banks has only slowed the velocity of money and the QE programs could never hope to replace the velocity lost.
This is not a confidence problem. It is a job problem.
And no apparent efforts are being taken to recapture those jobs from Chindia.
Wonder if Laura Fritz has a lower-back “tramp stamp?”
“For all those applauding the kick the can down the road approach, here is the result. Take credit for saving us from a depression; this is on you:”
And what would the world look like now if we had let it crash? How many jobs would we have lost if nothing had been done? Can you be certain we would be doing better now or in 10 years?
The theory is that if you rip the bandaid off, you get it over with and heal faster. If you take the tourniquet off, you bleed out and there is no healing.
Happy
I am not saying to have let it crash. My thesis is that the wrong levers were pulled by a conditioned (BB’s depression studies) response instead of a well thought out one to address the crisis as it stood.
Remember, after the first vote nothing crashed. The thinking was that with up to 50 leverage if the banks were not helped there would be a domino effect. Hogwash. BB et al just panicked.
The banks should have been forced to beg and then had all kinds of conditions applied. There was no overnight emergency. Geithner’s mergers were reckless and will be the single biggest cause for failure in the future. He gave new meaning to TooBigToFail.
Direct help to homeowners by enforcing the law would have been a nice response. A ring of duties around Canusa too. And a lending fund that the banks would have been forced to provide industry with. Not the gamblers.
The problem was there was no plan, the kids simply panicked and I think that is what history will say too.
“Well played, Mr. Bernanke, well played.”
[Golf claps]
Blame BOOSH!! Errr, about that….
Two-thirds of likely voters say the weak economy is Washington’s fault, and more blame President Obama than anybody else, according to a new poll for The Hill.
It found that 66 percent believe paltry job growth and slow economic recovery is the result of bad policy. Thirty-four percent say Obama is the most to blame, followed by 23 percent who say Congress is the culprit. Twenty percent point the finger at Wall Street, and 18 percent cite former President George W. Bush.
The poll, conducted for The Hill by Pulse Opinion Research, found 53 percent of voters say Obama has taken the wrong actions and has slowed the economy down
I think the stocks will go in negative territory before election day and Romney will be elected. Not that I like Romney. I do hope Ron Paul and loyal Paulists raise a ruckus in Tampa next month though. Even if they have to rally offsite from the convention!
It’s funny. Ron Paulians whine about not being taken seriously. And how to they combat that? By making asses out of themselves at the RNC. Good luck with that guys.
IIRC, a campaign slogan in the fairly recent past said something like, “It’s the economy, stupid.”
It’s funny. Ron Paulians whine about not being taken seriously. And how to they combat that? By making asses out of themselves at the RNC.
We know who you work for now.
“We know who you work for now.”
LOL. Who is that?
“By making asses out of themselves at the RNC.”
You do a damn good job of making an ass of yourself right here on the HBB, Eddie.
Pulse Opinion Research = Fox News/Rasmussen
Nope. No slant there.
LOL. Turkey. I see you’ve been reading the WH Talking Points Memo.
Better to rely on NBC polls with a D+8 slant.
Cross tabs:
Republican 35%
Democrat 34%
Other 31%
White 76%
Black 11%
Other 13%
18-39 41%
40-64 44%
65+ 15%
But you go ahead and think Blame BOOOOOSH is still working.
Nope, just used the Internet. It’s on the record from more than one source.
It seems to me that for 30 years the future selling decisions made by our government have been very much like the future selling decisions made by Americans themselves. And pandering has been the way to get elected.
George Bush I and Bill Clinton both raised taxes and cuts spending, and the deficit went down for a while. But both promised to do the opposite when running for office. If they didn’t lie, they would not have been elected. Clinton got a second term because he was a better liar than Bush I.
Clinton got a second term because the economy REALLY WAS better.
He also had a weak Republican opponent in Bob Dole. Who oversaw one of the lamest campaign organizations in recent history.
“Vote for me, Bob Dole, because Bob Dole says so and Bob Dole approves this message.”
Mr. 3rd Person himself.
Bob Dole,
Bob Dole was the Republican party’s last socialist presidential candidate.
Candidates don’t matter as much as policy. The neocons have pursued destabilization in Asia and the Middle East, consequences be damned. Here’s one slice of the blow back to come:
‘The first online statement from the new leader of al-Qaida’s affiliate in Iraq claims that the militant network is returning to strongholds from which it was driven by U.S. forces and their Sunni allies before the American withdrawal at the end of last year.’
‘Al-Baghdadi warned the United States that it would soon suffer militant attacks on its territory.’
‘Al-Baghdadi devoted almost half of the 33-minute speech to the uprising against the regime of Syrian President Bashar Assad, member of a Shiite offshoot sect. The rebels are largely Sunnis, and fighters from al-Qaida, including Iraqis, are believed to have taken an increasingly active role in recent months.’
Oh yeah, did anyone here know the US and its allies are arming and funding al-Qaida fighters in Syria? Some of them were/are in Libya too. Then, when the inevitable blow back occurs, we can count on both parties to use that to justify more wars, more tearing down of liberties, more billions for the Pentagon.
Romney or Obama; they both stink because they both for perpetual war. But where this is leading the US doesn’t look good to me. You Republicans out there; how will it feel when the US can’t defend itself because of war spending borrowed from China? You Democrats; how will you like it when we close every school, clinic and other ’safety net’ because we are broke? Get ready, because we got another ‘lesser of two evils’ vote. And if you elect evil for long enough, it will do you in.
We have always been at war with Eurasia.
On a side note, supposedly the Free Syrian Army (resistance) is clamoring for direct aid from the US military to counter the Assad regime’s armor, artillery, and helicopter gunships.
Yes, the same resistance that is also using Al-Qaida fighters in Syria. War makes for strange bedfellows… the enemy of my enemy is my friend and all that.
Anyway, why hasn’t the US embraced a hands-on, direct intervention policy? Because it’s an election year and Obama can’t take another war with “boots-on-the-ground and planes-in-the-sky” and win, not after 10 years in Iraq and Afghanistan and the blow-back over Libya.
The Assad regime is supported by Iran, Russia, and China. Direct intervention by the US will be frowned upon to say the least, and no one wants a broader conflict in the Gulf, at least not yet. Also, Turkey, Saudia Arabia, and the UAE are our surrogates in this battle, for now.
Lastly, the Assad regime has chemical weapons, including Mustard Gas, Sarin Gas, and VX Gas. They have threatened to use it on any foreign power who interferes directly in their internal affairs. No administration wants dead US troops shown after a gas attach on the nightly news.
Remember, global diplomacy in the ME is chess, not checkers…
‘the enemy of my enemy is my friend and all that’
Typical nonchalant throw off of an issue that to this day, our govt kills people over, including any poor bystander. The US has killed tens of thousands in the name of wiping out this group. Read what this man says in the same speech:
‘Al-Baghdadi warned the United States that it would soon suffer militant attacks on its territory.’
BTW, we are arming these people through Saudi Arabia and others in the Gulf Counsel.
‘global diplomacy in the ME is chess, not checkers’
This isn’t a game. It’s mass slaughter. It’s a level of stupidity and hypocrisy that’s indescribable. That it isn’t a huge topic, a few months from a major election, shows how insane our system is today.
When guys like this take a few of our millions and use it against us, watch the PTB use it to choke even more of our liberty off.
Yep. That’s pretty much the game.
Ain’t geopolitics fun? Like water moccasins in a pool, fun?
This isn’t a game. It’s mass slaughter.
Of course it’s a game. It’s a game that has been played by nations since before recorded history. What was the cold war, but a game of chess between two super powers. Regional conflicts fought via proxy governments to some political end… and yes, the poor have always been the pawns, sacrificed on the fields of battle.
BTW, I don’t disagree with anything that you said. Personally, I would rather we stay out of Syria completely. Same goes for Iran. The problem is that those in power here and there are playing a game, to what eventual end, I can’t say. I don’t see a pleasant end to the Arab Spring, the rise of radical Islam in formerly moderate and friendly Arab states, the Sunni/Shiite conflict, Israel/Hezbollah, etc.
I don’t see how the US comes out ahead in any of it… every scenario I’ve thought through leads to regional war, with oil prices going up considerably.
“Lastly, the Assad regime has chemical weapons, including Mustard Gas, Sarin Gas, and VX Gas….No administration wants dead US troops shown after a gas attach on the nightly news.”
Gas attacks aren’t particularily effective against soldiers. Training, equipment and the tendancy to be found in open ground makes them poor targets. It’s the civilian populace riding subways that needs to worry.
‘It is well known that Syria engages in systematic torture. That is precisely why the US took Canadian citizen Maher Arar there, in one infamous and well-documented case of extraordinary rendition. Former CIA officer Robert Baer has explicitly stated that if you want detainees tortured, you send them to Syria.’
http://www.guardian.co.uk/world/2012/jul/08/syria-tourism-and-torture
“53 percent of voters say Obama has taken the wrong actions and has slowed the economy down”
I guess there are lots of stupid oafs out there who don’t realize the Great Recession was over a year in progress on Booosh’s watch before Obama got stuck with it.
Smithers, you aren’t a stupid oaf, are you?
Why didn’t anyone take down the shooter? I think had this been a movie audience in the 1940s there would have been several brave heros who would have stopped the shooter within 30 seconds.
Have we become passive? This guy thinks so.
http://lewrockwell.com/adams-m/adams-m21.1.html
It was a “gun free’ zone and as we all know ‘gun free’ zones are the safest places around.
It was? I’ve never seen signage indicating that guns are not allowed nor have I ever seen metal detectors at the local multiplex. If no one had a gun, it was because they chose not to bring one.
Wasn’t someone the other day bragging about how Colorado had the highest per capita concealed permits issued in the country, and how that made it safer?
I was waiting for someone to bring this up. I believe the discussion was sometime last week, and the argument was that once Colorado basically allowed almost anyone who wanted it to get a concealed carry permit that gun violence in the state pretty much disappeared because the bad guys rationally knew that they would get blown away if they tried something.
“because the bad guys rationally knew that they would get blown away if they tried something.”
Which of course doesn’t help if the gunman doesn’t mind getting blown away, which seems to be the case here.
Plus when you’re watching a movie you aren’t gonna be ready to shoot back at a guy with a machine gun, because … you’re watching the movie.
Plus he didn’t stick around and was wearing SWAT gear. It’s not like he entered the theater and said “this is a stick up!” He began shooting before anyone knew he was even there.
And it was a dark theatre with a heavy-duty soundtrack. Many people thought the gunshots were part of the movie.
And it was a dark theatre with a heavy-duty soundtrack. Many people thought the gunshots were part of the movie.
Theatres also crank the sound systems way up. A literal case of “It goes to 11!” on the mixing board.
So, if people were a little too slow to react, there are good reasons why.
“Which of course doesn’t help if the gunman doesn’t mind getting blown away, which seems to be the case here.”
Sigh….
This is the leftist argument….doesn’t matter if other people had guns because they couldn’t have stopped him from shooting due to reason XYZ.
Well, no, they couldn’t have stopped him entirely. But they could have killed him or wounded him or distracted him by shooting back. Meaning he would have done less damage. The argument from the left is like saying don’t wear a seatbelt because that won’t prevent an accident from happening.
Smoke bombs and tear gas + dark theater gun range
But they could have killed him or wounded him or distracted him by shooting back.
Let’s review, shall we?
1. Dark theatre.
2. Heavy-duty soundtrack.
3. Couple hundred people (it was opening weekend).
4. Guy in swat gear with a couple thousand rounds of ammo.
These budding John Waynes probably couldn’t locate the shooter’s general direction, much less shoot back without hitting even more innocents in a crossfire. The guy probably popped off a couple dozen rounds before anyone realized it wasn’t part of the movie.
“Sigh….This is the leftist argument”
Don’t worry, there have been plenty of shootings where an armed civilian would have been helpful. My only point was that this doesn’t seem like one of them.
Aurora has a high proportion on minorities which is why Holmes, as a Tea Party member (who are all racists), targeted Aurora. This is true, it was reported on ABC News.
Well … he did live nearby.
As much as I dislike the Tea Party crowd, I think he did it because he was nuts, and not because he was a Tea Bagger. And IIRC, almost all of the victims were white.
I think (hope) GS was being sarcastic as the ABC News report was quickly retracted as invalid.
Goon, you almost had me going with that one…
ABC had to retract because they were completely wrong. The Tea Party member was a different person than the shooter.
Interesting article. I personally wondered why the PROJECTIONIST didn’t immediately stop the film and turn on all the house lights.
Do they still have projectionists? Even the name seems quaint and dated.
I was a projectionist in college for Regal. I ran 13 screens. Threaded the films, pressed start, verified sound and focus, walked away.
BTW, that used to be a union job that paid well. Now it’s an hourly job that gets assigned to whatever tech savvy asst. mgr. is on hand.
When the start times lined up just right, I would have about an hour of nothing to do, so sometimes I looked in on films, but not often.
The booths are well sound proofed to prevent the clatter of the film from entering the theater, so it would be very hard for a projectionist to discern gunshots from film sounds, especially from an action flick.
This is completely inappropriate given the nature of this discussion, but it was a sweet job. I smoked cigs on the fire escape and, uh, shared time with my girlfriend in her car (she worked at the mall and stopped by on break).
A few random thoughts:
- If the clatter is too loud, the projectionist is inexperienced. There’s a slack sweetspot in feeding the film. Too much, and it slaps around, not enough and the film may snap.
- My biggest screw up was assembling Titanic with one reel in reverse (they arrive in canteens, and are usually all heads out, or tails out. Sometimes that’s not the case, and if you’re not paying attention…).
- The light cues are added by the projectionist. They’re little reflective strips that get placed on the film at key points. I can’t remember, but I think it was 1 strip dim, 2 strips off, 2 more strips on.
- It’s somewhat dangerous. There are a lot of moving parts to get snagged on. When you’re transferring reels, you have these massive rounds of metal, haulin’ ass at the table.
My understanding is that in most theaters, the projection systems, many of which are now fully digital, are automated. There probably wasn’t a “projectionist”.
Thanks for ruining it for us.
Huh, they did:
http://www.slashfilm.com/regal-cinemas-to-go-4k-digital/
My understanding was that he began firing during a shooting scene in the movie so people didn’t catch on immediately, plus he threw smoke bombs so people couldn’t. Had anyone with a concealed permit shot back, they probably would have missed him and possibly hit someone else. He also didn’t linger in the theater.
He wore a gas mask with very limited visibility and could have been jumped. Where was “let’s roll” when it was needed?
Had he been standing in a crowd, which he wasn’t. IIRC, he was standing next to the emergency exit. He probably used up his ammo and exited stage right before anyone could even react.
He was prepared, he did his homework.
I saw the movie on Sunday. Had someone tried an encore, I wouldn’t have noticed until it was too late. And being that I like to sit near the top, I would have been able to “jump him”. All he had to do was mow down the people near him with his machine gun and there would have been no one left to “jump him”.
He had a machine gun?
Ok, it was a semiautomatic, which thankfully jammed before he could fire all his rounds. Had that not happened I suspect the death tally would have been worse.
Semi-automatic with 100 round drum on it. It is a *very* good thing that it jammed.
Semi-automatic with 100 round drum on it. It is a *very* good thing that it jammed.
Indeed. We’re very lucky he didn’t do his homework regarding magazines. The 100 round drum mags are prone to jamming and mis-feeds. Much better going with 30 round mags with no-tilt followers and heavy springs. They jam less often and it only takes a few seconds to switch mags on an AR and continue to fire…
Had he done even more research, he would have chosen an AK. Significantly more reliable than AR’s… we’re lucky on both counts.
“Where was “let’s roll” when it was needed?”
Flight 93 Options:
1. Do nothing and die.
2. Try something and probably die.
Batman Options:
1. Run like hell and most likely live.
2. Let’s roll and probably die.
Plus the people on Flight 93 had an eternity to make their move.
They didn’t “move” until they found out about the other planes crashing into the Pentagon and WTC (via cellphone).
At that point, what else are you going to do? They had about a one in 10,000 chance of actually surviving. One in 10K, is still better than ZERO.
If anything, Flight 93 shows that we aren’t the nation of pansywaists that BiLA thinks we are. And for all we know, maybe some guys did try to jump him, and got mowed down.
I have heard the flight 93 people accomplished nothing and bad flying crashed the plane.
I was going on a flight with a bunch of other soldiers (in uniform), and before hand put my basic pocketknife in my pocket out of habit. Got to security and they were concerned about that little knife. I pointed out that after 911 anyone who pulled a little knife (or nail clippers) was going to get pummelled beyond belief by all the passengers who don’t want to have the plane flown into this or that building. I also pointed out that my government approved role in life was to combat enemies both foreign and domestic. My little knife ended up in the trash can. Meh.
Too bad my acquaintance wasn’t there with his sock, coke can, and bic pen! No levity implied; the world is already scared of USA culture. It’s all “flash” to them; all they know is Kardashians, killings, and Jersey Shore.
And he was wearing body armor.
Armored and Dangerous
The scariest innovation in the Aurora mass shooting isn’t guns or ammo. It’s SWAT gear.
http://www.slate.com/articles/health_and_science/human_nature/2012/07/the_aurora_shooting_bulletproof_vests_swat_gear_and_body_armor_refute_the_nra_.html
tease:
Holmes’ outfit blew these jokers away. He wore a ballistic helmet, a ballistic vest, ballistic leggings, a throat protector, a groin protector, and tactical gloves. He was so well equipped that if anyone in that theater had tried what the National Rifle Association recommends—drawing a firearm to stop the carnage—that person would have been dead meat. Holmes didn’t just kill a dozen people. He killed the NRA’s answer to gun violence.
“He killed the NRA’s answer to gun violence.”
No, he did not.
how did he get in dressed like that ?
Just walked right by the ticket counter ?
What is the person at the ticket counter supposed to do? Say, “Pardon me, sir. Where are you going dressed like that?”
He said, “I’m Batman……”
how did he get in dressed like that ?
Just walked right by the ticket counter ?
I heard he entered as a paying customer in normal clothes, left through the emergency door, got all his stuff, and came back in through the same door.
He killed the NRA’s answer to gun violence.
I think we’re going to need a bigger gun…
Note to all. Ballistic armor (soft armor) and ballistic helmets are only rated to stop bullets up to 9MM in caliber, unless he was also wearing trauma plates (heavy ceramic plates) in the front chest and back of the chest carrier. The plates only cover the vital organs and are usually rated up to 7.62MM rifle cartridge.
Bottom line, even if he was wearing ballistic armor, a bullet in the .40, .44, .45 caliber would most likely have penetrated, and if not, provided enough knock down at that range to put him on the ground gasping for air and probably with internal injuries. This is another reason why I shoot a .40 caliber automatic… .40 cal (10mm) will penetrate most body armor. That’s also why most police and government agencies have upgraded to .40 or .45 from 9mm. The only guys still packing 9mm are the regular Army.
Oh, and keep in mind that ballistic armor only prevents bullet penetration. It doesn’t stop internal injuries like broken ribs, bruising, internal bleeding, etc. when shot. The force of multiple bullet impacts may still break bones and damage internal organs.
Smoke
3D glasses (I think it was 3D)
Dark
That’s why.
2D.
Ah. Thanks.
I am thinking of the movie “Tombstone” when Wyatt says “are you going to do something about it or are you going to stand there and bleed?”
Passivity is America’s soft underbelly. To have to depend on police for protection is stupid. We need to carry to protect ourselves and strangers from maniacs such as Holmes, and such as Loughner in Tucson who tried to kill Congresswoman Giffords and killed seven people.
First of all, it was a movie theater. A dark venue. Second, there were a lot of innocent people in the theater. Third, in a crisis situation, your aim goes all to hell.
And, for all of you quick-on-the-draw folks, here’s a tale from January 8, 2011.
You may recall that day from the news stories coming out of Tucson. Guy named Jared Lee Loughner pulled out a gun and started firing on his Congresswoman, Gabrielle Giffords. When it was all over, six people were dead. A dozen more were injured.
Many more were traumatized for life. I know this because I’ve met them around town since the day of the shootings.
One of the people who’s been traumatized was a man at the scene who had a gun. He drew. And almost fired. Good thing he didn’t, because he came very close to shooting the people who were subduing Jared Lee Loughner.
Good response. I am a pro gun person but I agree with you.
Arm chair quarterbacking have led to much worse than this…like Iraq war.
All of these John-Wayne types who think there should have been “heros” make me laugh.
Ever have anybody just walk up, and start blasting? In a dark theater? At best, the gunfire flashes are going to screw up your “night vision”. The shooter didn’t care, he could shoot in any direction and hit targets, even if blinded temporarily.
The kid was an amateur. Given the weapons and the scenario, he should have been able to whack more than 10-11 people.
He did people a favor by using an AR-15. I’ll bet a lot of the wounded are “through-and-through” wounds.
Apparently the AR-15 jammed.
He did people a favor by using an AR-15. I’ll bet a lot of the wounded are “through-and-through” wounds.
Good point. 5.56 FMJ is a fast round that tends to over-penetrate. Had he gone with Hollow point ammunition, the death toll would most likely have been much higher. Again, while he may have been very intelligent, he was a novice shooter and didn’t get everything right (thank God).
As I said in an above post, we’re lucky he didn’t choose an AK instead of an AR. That heavy 7.62 FMJ has enough power at that range to penetrate multiple targets and 30 caliber bullets do enough trauma on impact to kill immediately. It also rarely jams…
I heard it put thusly: “It annoys me that the gun huggers and gun grabbers both want to dictate to me whether I should be armed or disarmed.”
I don’t want to be armed at all times. I don’t want to be disarmed at all times. I want a society which allows me to make that choice.
And a society like that means preventing people like Mr. Holmes and your typical street criminal from getting weapons in the first place.
And figuring out how to EFFECTIVELY do that (not just writing laws that disarm law-abiding citizen but have no impact on the criminal) is the 64,000 dollar question.
A few questions to ponder: Who is going to pay for the medical bills for all of the victims? Are all of these innocent people who made the bad decision to see the movie in that theater on that night going to be ruined financially, (I’m not even going to get into the physical struggles many will face)? What about the cost of the trial or subsequent mental institution expenses for the shooter? I am going to assume that the taxpayer will be stuck with these costs. In that case, should there be a tax to owning a weapon to cover the costs of these sorts of rampages, similar to the tax levied on cigarettes?
Here in Tucson, the people who were shot at the Congress on Your Corner event that Gabby Giffords hosted were reported to have health insurance. However, there was a fund set up to cover the expenses not covered by insurance.
Last I heard, that fund was still taking donations. And, yes, it has been making disbursements.
Who is going to pay for the medical bills for all of the victims? Are all of these innocent people who made the bad decision to see the movie in that theater on that night going to be ruined financially
Yes. Because in America it is a very bad “decision” to get sick or hurt.
Only no tax payin’ welfare cheats get sick or hurt.
It’s kind of hard for me to believe that anyone is even asking why no one took down the shooter. Given, you know, that he was wearing full body protection, had an automatic weapon, threw smoke bombs first and shot into a dark theater that almost certainly did not even have a human in the projection booth. But hey, that’s just me.
It’s kind of hard for me to believe that anyone is even asking why no one took down the shooter.
Couple of points…
1.He didn’t have an automatic weapon, it was a semi-automatic AR15.
2. Standard army infantry training dictates that when a unit is ambushed, you fight through the ambush. Retreat is the wrong decision because in any ambush, it is assumed the enemy has most likely cut off your retreat.
From my perspective, retreat to “safety” was the wrong response. Attack would have been the only logical response for me. Those that retreated were very lucky he was a lone gunman and that there weren’t multiple shooters like in Columbine.
Having said that, I wouldn’t expect teenagers and non-combat vets to think in those terms during a surprise attack… armed or not.
Attack would have been the only logical response for me.
Talk is cheap.
Whatever.
I did my part for God and country. How about you?
Tell yourself that. That’s what your masters do while they’re laughing at you at their dinner parties….
On a cheerful note, I am smug that I bagged about $4500 gains at market opening and added over $21,000 to my pile of cash!
Cash! It be king!
Just don’t forget to also tell us about the days when you lose your ass.
lol
I had some days of that. A few years ago. I think I’m improving. Earlier this year I sold some of my company stock for a $14,000 gain. Two days later the share price went up 30%.
My biggest losers were in the year 2000. I think I lost about $25,000 total.
Another good gain I had was the former America West stock, AWA and gained $3000 long term (just over a year) and it paid for my flights back to Phoenix that year.
This year my gains on stock sail are at a minimum of $18,500 long term.
Smug.
I am smug
You??
Smug. Read above.
Bungled Bank Bailout Leaves Behind Righteous Anger
Bailouts
Illustration by Tim Lahan
By Neil M. Barofsky Jul 22, 2012 3:30 PM PT
In the year since I stepped down as the special inspector general of the Troubled Asset Relief Program, the sadly predictable consequences of the government’s disparate treatment of Wall Street and Main Street have only become worse. As the banks amass size and power, Main Street continues to get pummeled.
…
It’s good to see more and more folks are “getting it”, but sad to know that it’s not going to change until there is real trouble in the streets.
From a very reliable source, I’ve heard that the Occupiers are going to start camping again. Other actions are also in the works.
Clean shaven, business suits, dead silent stares. I wish they would try it.
“Clean shaven, business suits, dead silent stares. I wish they would try it.”
Agree100%! Occupiers listen up: If you want to be taken seriously, please, please, please don’t form a freackin’ drum circle!
Agree100%! Occupiers listen up: If you want to be taken seriously, please, please, please don’t form a freackin’ drum circle!
Or please, for the love of God, take music lessons. MissMouse, you probably remember the Occupy drum circle in Armory Park last fall. They had zero, and I mean ZERO, sense of rhythm.
And, MissMouse, I’m ready to start planning the Tucson HBB meetup. Do you prefer a lively brewery? I’m rather partial to Borderlands on Toole Avenue at 7th Avenue. Not just because two neighbors are among the trio of co-owners.
Or, if you prefer a coffeehouse, there’s a very good one at the corner of 7th Street and 6th Avenue. Sorry I don’t know the name. It’s new.
Tag, you’re it!
“… don’t form a freackin’ drum circle.”
No, no, no … DO form a freackin’ drum circle; Form it in front of the mansions where the One Percenters live.
Not where they work but where they live. And where they shop. And where they play. And everywhere else that they can be found.
Think in these terms: Wherever they go, there you are.
Better yet, wherever their wives shop or lunch or their kids go to school, there you are with a stack of fliers with Daddy/Hubby’s face on them explaining why you’re not happy with his actions.
“The answer more likely lies with the Justice Department’s lack of sophistication and the timidity that set in after it lost a high-profile case against two Bear Stearns Cos. hedge- fund executives in 2009. In any event, it seems unlikely that an 11th-hour task force will result in a proliferation of handcuffs on culpable bankers.”
That case was the great “get out of jail free card” of the era. Someone ought to write a book about it.
This is why our biggest failure was not baling out CIT which provided loans to small business, bridge loans to cover account receivables and payrolls
instead AIG got the loot….
Barofsky is an American hero, for sure. Unfortunately, evil villains are firmly in control of the U.S. financial system. Nothing has changed, and our children can expect more of the same kind of top-down screwings the present generation of Main Street Americans have endured.
Neil Barofsky, Special Inspector General for the Troubled Asset Relief Program (TARP), speaks during a hearing of the Senate Finance Committee on Capitol Hill July 21, 2010 in Washington, DC.
Behind the scenes of the bank bailouts
Interview by Tess Vigeland
Marketplace for Monday, July 23, 2012
Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street
Author: Neil Barofsky
Publisher: Free Press (2012)
Binding: Hardcover, 288 pages
Purchase from Amazon
Tess Vigeland: It’s been almost four years since Lehman Brothers went under and the world’s financial system started to spin out of control. The fall of 2008 was all about Henry Paulson’s bazooka, the Troubled Asset Relief Program — TARP — a $700 billion bailout for the banks. The bailout legislation created a special inspector general at the Treasury Department to oversee where all that money was going.
Neil Barofsky performed the job until he resigned early in 2011. Now he’s out with a tell-all book of his experiences in Washington, including the time he was pretty sure Treasury Secretary Tim Geithner was about to haul off and punch him. It’s called “Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street.” Neil, welcome to the program.
Neil Barofsky: Thank you for having me.
Vigeland: You know, I have to tell you, reading this four years after the fact, it’s amazing to remember that the original TARP document was all of three pages and it was completely designed to help homeowners by buying up troubled mortgages.
Barofsky: There was a remarkable transformation as the bill made its way through congress, and it’s important to remember that this was part of the legislative bargaining. TARP doesn’t get passed just to help Wall St., the economists insisted that there be foreclosure prevention and homeowner oriented programs as part of TARP, and those promises were, of course, both subsequently abandoned. And part of it was there was never the same type of ferocious commitment to help homeowners, in addressing the housing crisis, as there was was to saving banks.
Vigeland: You talk about TARP essentially just becoming a giveaway. Can you talk about what you mean by that?
Barofsky: Well when the TARP money was exspended, hundreds of billions of dollars were provided to the banks under the Capital Purchase Program. We were told that it was for certain purposes, it was going to help restore lending, and one would assume since those were the goals of the program — that when providing the money in the contracts and the policies — there would be something to advance those goals. But, none of that was present, so essentially the money was given with a very low market interest rate and with no conditions to accomplish those goals, and the banks were pretty much allowed to do anything they wanted with it.
And when I started pushing back on that, when I suggested that we needed to have some additional conditions, I was told essentially that I was advocating something that would drive the banks out of the program that would end TARP. I was told that I was stupid, I was told that I was being political, and it’s just another example of this deference and defense of the banks over what were some pretty common sense policies to accomplish our goals.
Vigeland: I want you to explain the concept of reputational risk for us — essentially this said that the banks would not commit fraud with TARP money because they would be too concerned about their reputations to do so, right?
Barofsky: Well, over and over again, I heard that arguement, but I didn’t understand. Just that these banks would never, ever take advantage because it would harm their reputations. It was almost as if they didn’t realize there had been years preceeding the crisis in which banks proved their reputation was perhaps the least important thing when it came to the opportunity to make rapacious profits. I mean, it got so bad, Tess, that at one point in another TARP program a New York Fed official said to me, when they were describing the Treasury’s refusal to adopt some really basic concepts to reign in the TARP participants, he said to me, ‘you know, Neil, it seems as if Treasury’s lips are moving, but,’ the CEO of one of the investment houses, ‘Larry Fink’s words are coming out their mouth.’
Vigeland: To be fair, this was a crazy time back in 2008 and 2009, financial armageddon upon us, no one seemed to know what was going to happen. So it is easy to criticize now, but can’t you maybe just believe that people were trying to do their best under pressure of very difficult circumstances?
Barofsky: That is actually part of the fundamental problem. The lack of diversity of thought, the fact that so many of these officials come from a Wall Street background — Goldman Sachs, Bear Stearns, Merrill Lynch — meant that when confronted with a crisis they went with the only thing that they knew. You know I don’t think that these people are necessarily fundamentally evil or bad people or sinister, I think they are patriotic people who went to serve their country in the middle of a financial crisis. The problem is they don’t know anything else. They just don’t know anything other than, ‘wow, if this is what the high lords of finance are telling us, this is the best thing, then therefore it must be the best thing, and what’s good for Wall Street is what’s good for America.’ And that’s why if we have another financial crisis, we’re going to have these same problems.
…
For some reason, this story deeply upsets me. Maybe it is the realization that outlaws are in control, with no higher administrator of justice available to bring them to justice.
Interesting development behind me.
House was a rental when I moved in. Then it was sold to a University of Arizona business student after the previous owners cut the asking price from $165k down to $135k.
Back in 2006 was when it sold to the UA b-schooler, and a $30k was quite the haircut back then. What was especially interesting was that it was an all-cash deal. I suspect that a parental HELOC was involved.
Mr. B-School tried to sell for $165k during the spring and summer of 2007. Epic fail. So much for getting that real estate license and listing your house, kiddo.
He started renting the place in September 2007. For the most part, his tenants were all right.
He tried to sell it again in 2010. Started out with a real estate agency. No, he wasn’t the listing agent this time around. ISTR that $165k price. Didn’t work.
Later in 2010, he tried selling it as a rent-to-own. That flopped too.
So, he started renting it to a bunch of, shall we say, inconsiderate college kids. I called the cops on them more than once. Wasn’t sorry to see them move out in the summer of 2011.
Well, who should arrive back in this house but Mr. B-School! And a lady friend/wife/whatever. I checked the University of Arizona directory, and it didn’t show him as an enrolled student. It still doesn’t.
Any-hoo, Mr. B-School and his lady were the ideal back-door neighbors. I never heard a peep out of them.
Until Saturday.
I heard a bunch of thumping and banging behind my house. Late in the day, I discovered the reason. They had moved out.
Don’t know what happened. But I do know that, during the spring of 2009 when I needed to have my water line replaced, the president of the neighborhood association helped me research the properties that the line traverses, and Mr. B-School’s property was one of them. According to Madame Presidente, he was delinquent on his property taxes.
During the line replacement, my plumbers found that his line was leaking like a sieve. So, they got in touch with Mr. B-School about replacing it.
The lead guy on my crew said that Mr. B-School was very sensitive about not spending a nickel more on his water line then he had to. Both the crew leader and I suspected that he was, ahem, a bit pinched for money.
Methinks that his college era in-VEST-ment has not worked out as he had hoped. I can’t help thinking that Mr. B-School and his lady have let their love shack go back to the bank.
How does the place rank on Zillow these days?
Never been a better time to own Treasurys!
July 23, 2012, 10:52 a.m. EDT
U.S 10-year yields hit new low on Europe problems
Thirty-year-bond yields also reach record lows
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices rose on Monday, pushing long-term yields to another new low, as investors sought out safer market vehicles in the face of mounting worries about a Spanish a bailout.
“If anxiety levels and the situation in Europe continues to worse, U.S. yields will continue to move lower,” said Chris Ahrens, head U.S. rates strategist at UBS.
Yields on 10-year notes (10_YEAR -1.85%), which move inversely to prices, fell 4 basis points to 1.43%, after touching an all-time low just under 1.4%, according to FactSet. A basis point is one one-hundredth of a percentage point.
Yields on 30-year bonds (30_YEAR -1.69%) dropped 5 basis points to 2.50% — after hitting 1.47% and breaking their record low from December 2008.
Yields on 5-year debt (5_YEAR -2.07%) slid 1 basis point to 0.57%, also touching the lowest ever.
…
Though it can change the pace of equilibrium adjustment to fundamental value, a short selling ban cannot change the underlying fundamental picture.
BULLETIN Italian stocks close at lowest level since March 2009
Investor Alert
July 23, 2012, 12:23 p.m. EDT
Europe stocks tank on Spain, Greece worries
Banks tumble; Royal Philips Electronics surges after earnings
By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — Italian and Spanish stocks tumbled on Monday, as government bond yields skyrocketed and bank shares fell on renewed uncertainty over Greece and growing fears that Spain may require a full bailout.
Trading in major Italian banks was suspended for about an hour during the morning after their shares incurred steep drops, while authorities in Spain and Italy imposed a ban on short selling to stem market volatility. European-listed resource firms also headed south, as oil and metals prices traded lower across the board to start the week. Read more about the short-selling ban
The Stoxx Europe 600 index (XX:SXXP -2.49%) tumbled 2.5% to close at 251.75, outpacing a 1.4% loss sustained Friday, when concerns over Spain’s debt situation dragged markets lower. U.S. stocks were lower on Wall Street.
“It is possible that we are entering the period that will determine the future of the euro zone,” said Gary Jenkins, managing director at Swordfish Research. “On Friday it appeared that the market gave up on Spain,” he wrote in a note.
…
House prices are directly tied to the amount of debt an individual can take on. The Great Creative Financing Experiment sought to increase that level. Sellers dutifully raised their house sale prices in response of the buyers to take on greater and greater amounts of debt.
Separating lenders from repayment risk was the magic which allowed this experiment to come into being and continue.
House prices increased with the increasing amount of debt the individual could take on. Before securitization, which was the first step in separating lenders from repayment risk, house prices were lower. When securitization matured and lenders were totally divorced from repayment risk, house prices went nuclear. Buyers of mortgage debt still thought it was as secure as pre/early-securitization mortgage debt. They were in for a rude surprise.
So - looking forward. I keep hearing news stories about house prices “strongly rebounding” and just continuous stories about how house prices are poised to keep moving back to historic appreciation levels (of 2 to 5 percent a year - wow).
My question is - how can the individual now take on sufficient debt to support those kinds of projections? I think we reached “Peak Debt” - the maximum amount of debt the individual can reliably service for a long period of time - in the mid-late 2000s.
I’m not saying it’s impossible, but I wonder what kind of scenario will allow the individual to take on a yet greater debt load than he had in the 2000s.
And… think of the student loan debt growing crisis. House prices being directly linked to the amount of debt the individual can service, and with a significant number of people already servicing a large amount of debt, this reduces the additional debt they can service, thus putting another drag on house prices.
“House prices are directly tied to the amount of debt an individual can take on.”
And much of the nation’s economy - and much of the world’s economy - was directly related to how much of the rising house prices could be cashed out and spent.
Rising debt produced rising house prices which produced rising equity cash-outs which produced a rising economy. This rising economy generated jobs that otherwise would not have been generated. These jobs produced income that otherwise would not have been generated. And much of this income went into buying houses.
There was a positive feedback loop at work.
Put the whole thing in reverse and - presto! - here we are.
The mentality that infused the PTB and caused them to lose their minds is still intact. The borrowed-money economy (the only economy they seem to understand) to their minds needs to be restarted, which to their minds means the housing mania needs to be restarted.
But once these manias have run their course and have reached the burn-out phase and have exhausted themselves they cannot be restarted. But nevertheless this is where the PTB will concentrate their efforts because this is all they’ve got, it’s all they know.
The 1.2 QUADRILLION in derivatives isn’t just based on baseball trading cards.
I’m almost certain there is some RE in that portfolio.
Educational Financing
Subprime Private Student Loans: No Way Out
By Martha C. White | July 23, 2012
Although private loans make up a relatively small slice of the roughly $1 trillion in outstanding student debt, a new report from the Consumer Financial Protection Bureau in conjunction with the Department of Education shows that these loans have the ability to harm borrowers’ credit and future financial security at a disproportionately high rate.
A $5 billion industry just over a decade ago, the private student-lending market ballooned to four times that size before the economic crisis hit. It shrank back to $6 billion last year, but that contraction still leaves a huge number of students and former students saddled with debt they can’t afford to repay. It’s gotten so bad that government officials are calling on Congress to permit private student loans to be wiped out in bankruptcy.
How did we get to the point where even some people in government are suggesting bankruptcy as a fix-it?
As with subprime mortgages, private student loans were handed out to people who could never realistically be expected to repay them, then bundled into securities for which there was a seemingly endless appetite. In the run-up to the financial crisis, lenders went out seeking increasingly high-risk borrowers to meet this demand.
(MORE: Going Away to College This Fall? You’re Now the Exception)
For-profit colleges fed into the demand: during the 2007–08 academic year, nearly half the students at four-year, for-profit schools had private student loans. These schools need private loans to augment the federal student aid they accept, so their top priority was getting students to borrow as much as possible — whether or not they needed it. The dismal rate of employment for graduates at many of these schools compounds the problem. Former students are stuck with a slew of loans they might not have needed, and a degree that’s worth little.
It gets worse. The key difference between the student-loan debt bubble and the mortgage meltdown is that if a person who never should have qualified for a mortgage defaults, the lender — or the investors who buy securities full of the loans that went bad — is the one who loses money. Homes can be foreclosed on, and consumers can declare bankruptcy. This element of risk is supposed to be what motivates lenders and the investors who buy securities to be diligent in their underwriting and risk assessment. Student loans, on the other hand, can’t be discharged in bankruptcy. With few exceptions, the borrower is stuck with the bill until he or she pays it off.
That leaves lenders with less incentive to make sure they’re lending to qualified borrowers. It’s true that many were burned by defaults after 2008, which is why roughly 90% of private loans now require a co-signer and why the market contracted so severely. The other reason for the market shrinkage is that, after 2008, investors no longer wanted to buy what they realized were financial time bombs, and lenders certainly didn’t want to keep them on their books.
…
Too bad all of the college students couldn’t organize an en mass boycott until tuition is adjusted to reasonable levels. When these grossly upside down students enter the workforce they will not be eligible to secure a security clearance until their loan balance(s) are reduced to a modest risk level.
Today’s commentary from the -fixr front.
-Was out of town all weekend, didn’t hear about the Colorado shooting until Sunday night.
Open my e-mail this morning, and my in-box has been carpet-bombed with “Obama is going to take your guns” letters from my Red-State friends.
One actually claims that Cerberus Capital Management is a George Soros owned front company, buying up all of the gun manufacturers, just to shut them down.
-Visiting a school buddy of mine I’ve known for 30 plus years. Works in the energy industry. Like about 98% of the people in corporate aviation, he hates Obama. Plans on voting for Romney, or anybody else, as long as Obama gets thrown out.
Among other highlights……
-Fracking is a conspiracy by Obama to undermine coal prices, and put the coal industry out of business.
-When I pointed out that tax policy gives capital a (relatively) free ride, while taxing the crap out of labor, his reply was “Well, I don’t want anyone taxing my dividends either……..”
-Started spouting all of the FauxNews/Republican talking points about Obamacare, and how the “free market” was so much better.
Told him he should actually try going out and get some of that terrific free-market health care (he’s over 50), then get back with me and tell me how that worked out for him.
And oh yeah, he’s “upside down” on the $350K (or thereabouts) house he bought in 2010.
That’s Obama’s fault too.
Electing Romney will get all of the candy-crapping unicorns out of the stables.
How, I asked, is Obama fundamentally any different that any Republican?
-Continued the bankster bailouts, in all it’s forms.
-Continued the “War on Terror” on terrorists with rusty Kalashnikovs living in mud huts in the ’stans”.
-Continued the “War on Terror” against US airline passengers.
-Continued looking for an excuse to put the smack-down on Iran.
-Continued fracking. Didn’t oppose the Keystone pipeline, until he had cover from the environmental community.
-Gave BP the “Get out of Jail free” card for trashing the Gulf of Mexico.
-Hasn’t lifted a finger on “taking people’s guns”…( a subject that is now Kryptonite to Democrats)
-Didn’t do much of anything about “jobs” being our #1 export.
Loves charter schools and privatizing education
Romney signed an assault weapon ban while Govornor of Mass.
I’m sure hes flip flopped on that by now.
“-When I pointed out that tax policy gives capital a (relatively) free ride, while taxing the crap out of labor, his reply was “Well, I don’t want anyone taxing my dividends either……..”
Whatever’s the matter with Kansas, may soon well be the matter with the United States.
Is it too late at this point to assume the crash position?
ft dot com
July 23, 2012 7:05 pm
We have entered the world of disaster economics
Gillian Tett
…
During most of the past few decades, Fulcrum argues, investors and economists did not discuss “disaster” much. Little wonder: if you use the definition of “disaster” advanced by the economist Robert Barro – namely at least a 10 per cent decline in national gross domestic product per capita – there were 58 disasters in the 20th century. But crucially, only two of these occurred between 1950 and 2000; most modern investors built their careers in a world without disaster risk.
But now the world has changed. And so investor behaviour has shifted too, Fulcrum says. For the key point to understand about investing is that assets have two functions: they can produce returns, but they also offer protection. When disaster risk is low, investors stress the former; when the risk rises, they focus on the latter.
However, the nature of this approach can vary across markets. In countries where government default risk is deemed low, bonds are better than equities for “protection”; but in markets where default risk is higher, equities and bonds are correlated. Fulcrum thinks there is a clear statistical way to tell which country is in which camp: when the sovereign CDS spread jumps above 200bp, bond and equities move together. But when CDS spreads are below 200bp, government bonds retain their “safe” status, and yields and CDS prices are uncorrelated. Spain and Greece are in the first camp, and France is almost in that group too. But the US and Germany are in the second group. Hence bond yields can fall – even as default concerns rise in a moderate way.
This argument has shortcomings. It does not take account of how expected inflation or deflation affects bond prices. Nor does it recognise other asset classes. Frightened investors might choose to buy commodities or corporate bonds, instead of government bonds. And while a 200bp “tipping point” seems to work well in the eurozone, it is unclear how it applies to the US.
If this disaster theory has a grain of truth – as I suspect it does – there are at least three implications. First, it suggests that governments may have overstated the degree to which quantitative easing, not fear, has reduced bond yields. Second, it implies that the investor grab for safe assets may not be a short-term phenomenon; “disaster risk” could influence asset prices for a long time. Third, there is a bigger point: the financial world may need to overhaul its investment frameworks.
When portfolio theory developed in the second half of the 20th century, financiers assumed that the world would always be fairly stable; but as Mr Barro’s work shows, this low-disaster period may have been an exception to the norm. The idea that investors always want to maximise returns in a rational way, not “insure” against Armageddon, may have been a function of an unusual time, not a timeless truth. Perhaps the world will return to that era; but do not bet on it soon. In a world of “disaster” economics, in other words, bond markets could remain “baffling” for a long time; unless, of course, an inflation or political shock creates an explosion of default fears in Germany (or the US) – and those bonds and credit derivatives markets finally come into line.
“Is it too late at this point to assume the crash position?”
The crash position? How about the cash position.
Position yourself in cash; The demand for the stuff never seems to dwindle.
Why did Willy Sutton rob banks?
I’ve got a large part of my financial assets in cash (and lord forbid I’ve got money in my primary dwelling.) I can’t go all in on cash because it might just not be the right call. Some stocks and some gold and the house, just in case the PTB manage to hyperinflate.
Fiatscos!
ft dot com
July 24, 2012 12:19 am
Moody’s warns eurozone core
By Michael Mackenzie in New York, James Wilson in Frankfurt and Gerrit Wiesmann in Berlin
The city of Frankfurt, seat of the European Central Bank (ECB), the Frankfurt stock exchange and several large banks, is the financial centre of Germany
Moody’s has lowered its outlook for triple A-rated Germany, the Netherlands and Luxembourg to negative from stable, in a move that highlights the dangers the core of the currency union faces from the eurozone debt crisis.
The rating agency said the outlook had changed because of both the increased likelihood of an exit by Greece from the single currency and the need for greater financial support for struggling eurozone countries from the strongest members of the bloc.
“Moody’s now has negative outlooks on those Aaa-rated euro area sovereigns whose balance sheets are expected to bear the main financial burden of support,” it said.
…
I swear this stuff is scripted.
The name of the game is seizing political and banking control of the peripheral countries. They are using the stick to get the people and smaller politicians to go along.
This article is aimed at Germany. The German population is being fed a grain that will make them compliant when the time comes to get them into the slaughter house so their blood can be used to save the whole system. Last month there was a lot of talk about how much more Germany would loose if they allowed the Euro to collapse vs just bailing out the peripheral countries.
When Spain and Italy capitulate the flood gates will open and they will be saved. Their bonds will be guaranteed by the Germans.
All of these gyrations are just a dog and pony show. No different then when GW and Hank Paulson got up and told us all that the ship was going down unless we got TARP. A bailout could have occurred in a much different fashion that would have made the gamblers and wealth strippers pay instead of the average American.
Yawn…
July 23, 2012, 11:24 p.m. EDT
Asia stocks slip as European worries stir
By Virginia Harrison, MarketWatch
SYDNEY (MarketWatch) — Most Asia stocks markets fell Tuesday as fresh worries about Europe drained investor confidence, though some losses moderated after data showed Chinese manufacturing activity recovered slightly in July.
Japan’s Nikkei Stock Average lost 0.4%, while Australia’s S&P/ASX 200 index and South Korea’s Kospi each slipped 0.2%, as the region extended sharp previous-session losses.
In China, the Shanghai Composite added 0.1% while trading on Hong Kong’s Hang Seng Index was delayed until the afternoon due to a typhoon.
China’s manufacturing activity rose slightly in July, with the initial reading of an HSBC survey hitting a five-month high.
Hongbin Qu, HSBC chief China economist, said the modest lift “suggested that the earlier easing measures are starting to work.”
He added, however, that the “July reading implies demand still remains weak and employment under increasing pressure.” Read more on HSBC China manufacturing data.
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Snore…
Global shares, euro capped on Spain contagion fears
Traders work on the floor of the New York Stock Exchange, July 2, 2012. REUTERS/Brendan McDermid
By Chikako Mogi
TOKYO | Mon Jul 23, 2012 11:28pm EDT
(Reuters) - Asian shares were capped on Tuesday after the previous day’s deep losses as a surge in Spain’s borrowing costs, to levels seen as unsustainable, triggered alarms indebted regions could push the euro zone’s fourth-largest economy to seek a bailout.
The euro was not far from a two-year low against the dollar and a near 12-year low against the yen, as the single currency was undermined by Moody’s Investors Service changing its ratings outlook to negative for Aaa-rated Germany, the Netherlands and Luxembourg amid Europe’s ongoing debt crisis.
With market sentiment so fragile, data showing China’s manufacturing output in July grew at its fastest pace in nine months offered some relief, helping Asian shares trim some earlier losses and also slightly boost the commodity-linked Australian dollar to $1.0288 from around $1.0265.
The HSBC Flash China manufacturing purchasing managers index (PMI) rose to 49.5 in July to its highest level since February, driven up by a jump in the output sub-index to its best showing since October 2011.
It is the first significant Chinese data in the third quarter and signals that pro-growth government policies are supporting improvement in the world’s second-largest economy.
“The data gave a slight boost to markets, but whether such effects are sustainable are doubtful as Europe struggles with its problems,” said Hiroyuki Kikukawa, general manager at trading company Nihon Unicom.
“Government policies will underpin the Chinese economy over the longer term, but in the short-term, instability in the European situation will keep a drag, especially as Europe is a big export market for China,” he said.
…
Both the Iowa Electronic Markets, including the 2012 US Presidential Election Vote Share Market and the 2012 US Presidential Election Winner Takes All Market, put Obama squarely ahead of Romney to win the Fall 2012 election, with a wider spread in the “Winner Takes All” market (not sure if this is an anomaly or typical?).
With so little to distinguish the candidates, apart from empty rhetoric, it’s best to stick with the Devil you know.
July 23, 2012, 2:57 p.m. EDT · CORRECTED
Italy and Spain revisit folly of short-sale bans
Commentary: The one-day bounce isn’t worth longer-term pain
By MarketWatch
Corrects duration of short-sale ban in Italy, and also clarifies that existing short positions can be held.
WASHINGTON (MarketWatch) — Banning short selling must be to a regulator what the Sirens of Greek lore were to sailors: incredibly irresistible despite the damage these temptresses wreak.
Spain on Monday said it would ban short sales of stocks for three months, while Italy’s ban was only for the financial sector and for one week.
Enjoy the one-day bounce, Spain.
The logic is there on the surface for both those moves. Spain’s Ibex 35 (XX:IBEX -1.10%) has dropped 29% this year, and Italian financial stocks (XX:IT8000 -1.99%) have dropped by 27%. Ouch.
Banning shorts of course triggers an immediate upturn, as hedge funds and others betting against all these companies buy the securities to close out their negative bets. (They are by law permitted to keep the positions, but many close out their positions, as Monday’s price action showed.)
But beyond that one-day move, short-sale bans have lasting negative impacts. As discovered during the U.S. financial crisis, short-sale bans don’t prevent stocks from going down; moreover, they also take liquidity away, and that diminished volume increases the bid-ask spreads.
They also make investing more risky and volatile. Here’s one comprehensive study that shows just how damaging these bans are. See external link to short-sale ban study.
Markets offer no way out for Spain
Spain continued to cast a long shadow over financial markets. Dow Jones’s Martin Essex discusses the latest data plus the increasing problems faced by Spanish regions.
And the broader point is stocks in Spain and Italy aren’t dropping because there was the capacity to bet against them; they dropped (and will drop again soon) because of the debt crisis still raging in Europe, which is engulfing the region in a recession, not to mention putting the very euro foundations at risk.
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What Wall Street needs: MORE WORRIERS!
July 24, 2012, 12:02 a.m. EDT
Get ready for more days like Monday
Commentary: Wall of worry needs rebuilding before rally can go on
By Mark Hulbert, MarketWatch
CHAPEL HILL, N.C. (MarketWatch) — Monday’s triple-digit Dow decline was not an aberration.
On the contrary, the market will not be able to mount a sustainable rally until the Wall of Worry gets rebuilt — and that, unfortunately, will take a lot more days like Monday.
To appreciate why, we need only compare advisors’ reaction to the rally that began in early June to their behavior in the wake of the rally that began last fall. Over the last six weeks, they have exhibited far more eagerness to jump on the bullish bandwagon than they did in the first four months of the earlier rally.
And that’s amazing, since the rally that began last October was far stronger and more impressive. It eventually added nearly 3,000 Dow points, after all, and brought stocks to a new bull market high.
In contrast, the recent rally — even at its high point — was barely 800 points or so higher than where it stood at the early June low. And, at least so far, it has failed to propel the market to a new bull market high.
Despite this recent rally being so much more anemic, the short-term market timers tracked by the Hulbert Financial Digest have far more eagerly jumped on the bullish bandwagon. Consider the average recommended equity exposure among those timers (as measured by the Hulbert Stock Newsletter Sentiment Index, or HSNSI). In just six weeks following the early June low, this average grew from minus 28% to plus 53% — an 81-percentage-point jump.
Rarely have I witnessed a wall of worry crumbling this quickly.
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