Bits Bucket for August 1, 2012
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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http://www.schwab.com/public/schwab/resource_center/expert_insight/todays_market/sonders/sonders_073012.html
The household formation discussion is interesting.
The graph I have never seen is the Fed Funds vs. HMI graph (although the graphs aren’t all that complex, so the match could be a coincidence).
Hey Pimp,
Household Formation is at WW II lows and falling.
Could we have a link for that? Preferably one that covers the same time period as RW’s data?
It’s on Ritholtz website.
I asked for a link. When you make the same assertion over and over again, you have a responsibility to be able to support it rather than demand other people do your research for you.
I’ve already done my “research” and I haven’t made the same assertion “over and over again”. Go do your own “research”. In the meantime, Household Formation is at WW2 lows.
Ya gotta love the cranks on this blog. In their eyes everyone who doesn’t pass their purity test (in other words, they don’t see things exactly as the cranks do) are are either “goons”, “thugs”, “commies” or “pimps”.
Whatever.
They have every right not to provide any evidence for their claims. I just don’t get why they don’t WANT to support their assertions. How does anyone expect to pursuade me when all he does it parrot something over and over again and never provides any numbers?
Given the rise in population, the idea that household formation is “at WWII lows” is laughable in absolute terms. I suppose he might mean in percentage terms compared to something like number of people graduating from high school or turning 18. But given the acceleration of college attendance, that is a pretty dumb comparison. You need context to interpret statistics. When I don’t have context and someone refuses to provide it, I assume that the context would prove them wrong or deceptive in some way or other.
Rise in population? Seriously?
Population growth is the lowest in US history per the 2010 Census.
And I’m not going to do your work on that one either.
My understanding is that the record low happened in 2010, but that 2011 was much better, almost 3x better than 2011.
In any case, what really matter is what kind of incomes do these new households have. My guess is that it isn’t very good.
Population growth is lowest in absolute terms? Or percentage terms? And if as a percentage, what is the denominator?
Your statements are meaningless without context.
The assertion was about ‘HOUSEHOLD FORMATION”, not population growth. You are assuming that higher population= higher household formation.
Kids living at home longer. Illegal aliens moving in with other illegal aliens. Kids moving back home. Friends “house-sharing”.
Homeowners taking on tenants. Moving into a camper van.
Living on the street.
There are ALL KINDS of things that detract from “household formation”, meaning, Married couples buying houses and having children, although, the new meaning of the left for household is anybody living with anybody and whoever’s kids, so long as they have a common address.
Seek and you will find.
Polly, it was percentage terms, but still something like an increase of 25 or 30 million people over the decade.
By the way, you do at least admit that there are more people living in the US now, than there was at the end of WWII, right? That is what I am talking about when I say “absolute terms” since you don’t seem to be familiar with the concept of comparing numbers vs. percentages.
YOU invoked “population” to backstop the “growing” household formation lie, not me.
Household formation is at multi decade lows and population growth is the lowest in US history. Those are truths you can’t seem to accept.
I don’t have any opinion at all about whether the statement is true or not. I can’t evaluate it because you refuse to define the terms you are using and you refuse to provide the numbers that could back up your statements once you define them.
Do you mean absolute number of new households being formed over a certain period of time? If so, what is that period of time? per week? per month? per year? And what week, month, year, etc. is your most recent data from? If you are not talking about actual numbers but instead mean that number in comparison to some other number (like total population, or population over 18 or whatever), then define exactly what you are you talking about?
It is that easy. Just tell me what you mean and provide links to properly collected data (preferably census since they use the same methods over time, but I will look at data collected by some other entity if you can find a good one) to prove it.
Polly I don’t need to prove it but it’s really as simple as going to wikipedia to see the data it but you already know that. You’re just being obtuse.
Why is that?
I’m not being obtuse. I’m honestly interested in what you have been saying and what implications it might have. Or, at least, I used to be interested in it. I’m not anymore. You aren’t interested in having a discussion. You don’t want to explain exactly what you are saying and you won’t provide any information to support your statements. If you aren’t willing to do even that much to have a conversation, then I’m not going to bother either.
It is a little odd, this wanting to share your opinion with people and not wanting to convince them you are right. I don’t get that. But if you just like reading your own posts, that is fine.
And wikipedia isn’t a scholarly source. Plus just saying that something can be found in wikipedia isn’t a reference.
“They have every right not to provide any evidence for their claims. I just don’t get why they don’t WANT to support their assertions. How does anyone expect to pursuade me when all he does it parrot something over and over again and never provides any numbers?”
Lawyering and politics are both preoccupied with convincing and persuading. By contrast, science is about objective truth, independent of data or forensics; not to suggest here that data is not useful to those interested in seeking the truth.
But whether or not household formation is at a post-WWII low is not in the least bit affected by the evidence presented here, or whether Polly or anyone else finds it convincing.
“You’re just being obtuse.
Why is that?”
Got lawyering?
It is a little odd, this wanting to share your opinion with people and not wanting to convince them you are right.
And that’s where we depart. I’m not attempting to persuade you Polly. Secondly, I’m not trying to be right. I know what the truth is and the truth exists irrespective of who is right(Thanks for that valuable, free lesson EvilDoc).
…. and there is another truth Polly whether you’re aware of it or not. There are powerful people using their resources to do everything possible to keep this charade from falling apart. They’re administering their PR in every media outlet. They’re here on the blog… they’re reading, monitoring and writing.
PR sucks. Politics sucks. Realtors© suck.
Any others?
Low Rate of Household Formation Hurting Housing Market
By: David Dayen
Thursday June 21, 2012 6:54 am
A new report by the US Census shows why it’s going to be so difficult to get a housing recovery going. We already have seen that the 9 million families locked out of the market by virtue of a recent delinquency or foreclosure dampens supply. The up to 16 million families who are underwater have almost no chance at being “step-up” buyers, purchasing a bigger home or a home closer to a new job. The only way to generate demand, then, would be to have a run of first-time homebuyers with good credit, typically young people just getting into the housing market. But the Census report shows that household formation just isn’t happening these days:
This is not about the marriage rate rising, it’s about multi-family shared homes, roommates, etc. So the rate of shared households, defined thusly, is going up. And considering the stagnating wages, high unemployment, and lack of purchasing power in the broad middle, this stands to reason. And it will continue to be a problem, even if the banks keep enough homes off the market to constrain industry and lower months-of-supply.
The big stat here is that additional adults living with a relative rose from 2007 to 2010 by 2.4 million, accounting for 68% of the increase in this metric of shared households. That just goes right to affordability. People cannot afford to live on their own, so they move back in with their parents or another relative. Household formation remains low as a result.
…
Maybe people are becoming smart and moving away from a large debt aka 30 yr mortgage. Renting and joint family living may seem a bit more attractive.
I used to hear a lot about buying a 2 family from our 30 something employees. Not anymore.
joint family living may seem a bit more attractive
I can only see this as being done out of sheer economic necessity. From my experience, having roommates when I was single was a monumental pain the butt. I can’t even begin to think about rooming with another family, putting up with their screaming kids, etc. Even sharing with relatives would be a major pain.
“I used to hear a lot about buying a 2 family from our 30 something employees. Not anymore.”
The young pups I work with keep talking about buying. Of course, most have near 6 figure salaries, plus a working spouse pulling down a decent paycheck as well.
I suppose that for the Lucky Duckies, it’s a different world.
Low 2010 housing formation is not inconsistent with Sonders’ piece. Your piece ignores the large increase in household formation in 2011.
In other words, Household formation is no long at post WW2 lows, and no longer falling.
Household formation is at multi decade lows.
Why are you lying to the public about it?
You scream.
I scream.
We all scream,
For ice cream.
you phone
I phone
we all phone
with iphones
That would be Apple’s wet dream.
Never understood the appeal of a smart phone with its useless tiny screen.
I love it when it saves me from having to take a laptop somewhere.
For all the bootstrapping, invisible hand of the free market, Galt Gulch dwelling, Grover Norquist fetishists out there, the squad just changed from one government contractor to another government contractor. And yes, they are hiring! The invisible army of government contractors will NEVER stop growing. And the new one is unlikely to be affected by election results BWA HA HA HA HA HA HA HA!
* posted outside of government contractor business hours
The private sector is more efficient.
One thing it particularly efficiently, even compared with public employee unions, is fleece the government.
Maybe it’s because it’s so easy to do. Taxpayer’s money is just another form of OPM, and OPM tends to be treated a bit differently than one’s own money.
Plus there is the thinking from the OPM tax spenders that there is an endless supply of the stuff.
And this thinking - this thinking that there is an endless supply of money of spend - is driven by the idea that what these “public servants” (choke) cannot tax they will simply borrow. And they can simply borrow because they’s the guvmnt and da guvmnt will make good on da borrowing.
It always has made good on the borrowing until, er, lately.
Lately something strange has been happening …
‘yes, they are hiring! The invisible army of government contractors will NEVER stop growing.’
Ben this pic is for you. No, I don’t work at Raytheon, they’re just some of the folks in our neighborhood…
http://oi45.tinypic.com/2wpt4×4.jpg
Hey…. I see a Heep in that picture.
“The invisible army of government contractors will NEVER stop growing.”
Because privatizing the government is a good thing, right?
I know a gal who works in IT at the USDA. From what she tells me, all the real work is done by contractors. She has a Masters in IS or something like that, and landed her management job as a USDA employee, with no prior experience, because her husband is in the military. I’m certain that she couldn’t program her way out of a paper bag, but she makes around 100K.
I see that in private sectors as well. Contractors do most of the work and FTEs just goof around. In Government, it’s got to be much worse. Government employees need contractors as much as contractors need them. It’s a mutually beneficial relationship.
YMMV. I’ve worked at places where contractors handily outnumbered FTE’s. In my current place of employment contractors are quite rare.
“In Government, it’s got to be much worse.”
Whatever you say, strawman god.
Imagine it’s the same in all slots. Take the engineering department in my (red)neck of the woods.
They can’t keep a director in the position because they either make them quit or sabotage their position into oblivion.
civil engineers on staff, multiple assistant positions…full road and construction crews.
Full time head engineer couldn’t engineer her way out of a wet paper bag….survey staff is from the “close enough” class….
Tards. In the desert. That can’t do their jobs….making 6 figures to sit in the AC and contract engineering staff from Reno. They don’t even design their own local roads.
Meanwhile, positions are filled by friends and family members. Most of which drool at work.
Yay CALPERS. :/
How long have you been around here Dave?
How is the “sequestration” going to affect that invisible army? My understanding is that as things stand, the number 2 million is being thrown around for defense industry layoffs if sequestration isn’t prevented.
Also, the active military is no allowing soldiers/sailors/marines/airmen to re-enlist once their enlistment is up, requirements for enlistment are being raised, and new recruits are being turned away… all with the goal of reducing headcount in the military because of budget cuts to the Pentagon from sequestration.
I personally think Congress and the President won’t allow this to happen, but stranger things have happened, especially in an election year…
If they prevent it (via some stylish can kicking), it will be done not to save jobs, but to keep the military machine rolling. They don’t seem to care about non military related jobs after all.
The people in northern Virginia are screaming bloody murder over the possibility.
http://www.npr.org/2012/08/01/157699866/lawmakers-face-off-on-pentagon-spending-cuts
RENEE MONTAGNE, HOST:
And members of Congress, this week, are head-lining rallies meant to inspire public outrage, outrage over potential cuts to Pentagon spending. Military contractors say they could lose a million jobs if Congress goes ahead with across-the-board spending reductions known as sequestration. As NPR’s Larry Abramson reports, the fuss is about budget cuts that were never intended to actually happen.
LARRY ABRAMSON, BYLINE: For months now, House Armed Services Committee Chair, Buck McKeon, has been predicting chaos will result from the $50 billion in Defense cuts scheduled for January. The Republican leader’s Web site features ominously scored videos like this one, in which a businesswoman from McKeon’s home district in California warns that the sky could fall.
(SOUNDBITE OF A POLITICAL AD)
UNIDENTIFIED WOMAN: To lose contracts of this nature could eradicate the Antelope Valley as we know it today.
ABRAMSON: McKeon’s message is that President Obama is to blame for this devastating prospect. Of course, both Republicans and Democrats agreed to let automatic cuts set in, if Congressional negotiators could not agree on reductions on their own.
(SOUNDBITE OF CONVERSATIONS)
ABRAMSON: On Monday and Tuesday, three Republican senators visited a series of rallies in areas heavily dependent on defense spending. At their first stop, Senator Lindsay Graham told a crowd in Tampa that a key military base in their town would face a hammer blow.
SENATOR LINDSEY GRAHAM: Bottom-line, MacDill Air Force Base is toast if this goes through.
ABRAMSON: Actually, the Pentagon has refused to say exactly what will be cut. But Republicans appear convinced they will gain political advantage from dire prognostications. At the Tampa rally, New Hampshire Senator Kelly Ayotte, said only the president can save the day.
SENATOR KELLY AYOTTE: I’m very concerned that we won’t be able to resolve it without presidential leadership. And you would think that that’s the foremost responsibility to the American people of being commander-in-chief.
ABRAMSON: But not everyone is buying the idea that defense spending cannot be touched. Gene Jones of Sarasota Florida, a member of Florida Veterans for Common Sense, came to the rally to call for lower Pentagon spending.
etc.
I would actually suspect that the reenlistment changes are more about the winding down of Iraq and Afghanistan.
Govt contractors go bye-bye, unless Romney is elected, in which case they may perversely increase in number, as they are “private sector” workers and all good Retardicans “know” the “private sector” does it better.
Regulator says no to Obama mortgage write-down plan
By Rachelle Younglai | Reuters – 11 hrs ago.
WASHINGTON (Reuters) - The top housing regulator rebuffed a plan by the Obama administration to cut mortgages held by struggling homeowners, a blow to the White House, which is keen to show voters it can help fix the housing market.
The regulator for government-run housing finance giants Fannie Mae and Freddie Mac said on Tuesday that using taxpayer-funded bank bailout money could encourage defaults and not make a big improvement in reducing foreclosures in a cost-effective way for taxpayers.
“The anticipated benefits do not outweigh the costs and risks,” said the Federal Housing Finance Agency’s head Edward DeMarco, who has come under intense pressure from the government to agree to the plan.
http://news.yahoo.com/regulator-rejects-govt-mortgage-write-down-plan-181123003–business.html - -
send them all a check so they can pay down there mortgage?
How about some finance classes in high school?
I get the feeling they want to roll out a new group a sheep to corporate america every so often.
Oh poop. My moniker was misspelled.
How about finance classes in business schools?
Oh, wait. They already have them.
No “blow” at all. They made a show of trying and can now blame it on the regulators.
Didn’t I just say yesterday that it wasn’t going to happen?
It’s been about five years since some anonymous HBB poster wrote, “Cramdowns are coming.”
So are they still coming, or is it pretty clear now that serially repetitive post was bunkum?
It’s been about five years since some anonymous HBB poster wrote, “Cramdowns are coming.”
They’re not coming. They’re just breathing hard.
OTOH, that heavy breathing could be a prelude to the real thing.
’some anonymous HBB poster wrote, ‘Cramdowns are coming’
It wasn’t just here, there were several blogs that made it a theme. But if you read what the regulator said, it’s the reality of the situation; it would cost a ton of money and wouldn’t solve a thing. You still lower comps, and even more FB’s would come crying for similar treatment. Plus, the GSE’s don’t own all the loans. I doubt they even own the majority. They just service them.
This is the same old ‘turn back the clock, make the housing bubble go away’ wishful thinking. That it’s become a political ploy is deplorable.
At what point does the political ploy become a wedge issue between Romney and Obama? I don’t pay close attention to the campaigns, but I can’t recall this issue coming out into open debate just yet. My impression is that the Democrats are holding off until DeMarco relinquishes his position, which BTW I don’t expect him to do, given he has held out thus far under withering political pressure.
If he is senior executive service (probability of that is about 99.9999%), they can reassign him. The question whether this is politically possible this close to an election when the issue has been so widely reported that the move would also be highlighted.
“…they can reassign him.”
That would pretty much end the facade that DeMarco’s position is whatsoever ‘independent,’ wouldn’t it?
It would do that. But there is an argument that he is going beyond the scope of his role as agency head - the loss that he is basing his decision on is not a loss to his agency, but to the federal government as a whole (not really his job) and it is somewhat speculative. I don’t think he has any data to back up the idea that X many people will then decide to strategically default simply because it has never happened before. Where would the data come from?
I don’t think he will get reassigned for the reasons I mentioned above, but it will be very interesting to see where this is going to go. The right to reassign people under SES is absolute. You go into that program and you have no right to protest a new posting no matter where it is located or how out of your area of expertice it is. It is like being in the military.
“But there is an argument that he is going beyond the scope of his role as agency head - the loss that he is basing his decision on is not a loss to his agency, but to the federal government as a whole (not really his job) and it is somewhat speculative.”
Anyone who disagreed with the Treasury Secretary’s position would pretty much be going beyond their role as agency head, no es verdad?
Is there enough time between now and election day to force a change in this decision? What arrows remain in Geithner’s quiver?
Geithner Vows to Press for Writedowns for Underwater Home Loans
By Clea Benson on August 01, 2012
Timothy F. Geithner, U.S. treasury secretary, speaks during a Senate Banking Committee hearing in Washington, on July 26, 2012. Photographer: Andrew Harrer/Bloomberg
Bloomberg News
U.S. Treasury Secretary Timothy F. Geithner, twice rebuffed, is vowing to try a third time to persuade the Federal Housing Finance Agency to allow principal forgiveness on mortgages backed by Fannie Mae and Freddie Mac.
“I urge you to reconsider this decision,” Geithner wrote to FHFA Acting Director Edward J. DeMarco, who yesterday announced that Treasury Department financial incentives would not be enough to make it financially worthwhile for the two taxpayer-owned companies to write down debt on troubled loans.
DeMarco’s decision came three months after an April speech in which he signaled that he believed the technique would not work and could encourage additional defaults. Geithner yesterday offered technical assistance should DeMarco change his mind.
“Treasury stands ready to provide any additional analytical support to make a targeted principal reduction program at the GSEs successful,” he wrote to DeMarco.
…
The only thing that can be done is vote obama out of office.
And then press the new President to pick someone with some sanity.
Is there enough time between now and election day to force a change in this decision? What arrows remain in Geithner’s quiver?
Why would you expect a new president to act any differently, given that Romney thus far has been a total wimp on housing issues? Whether you agree with his policies, you have to admit that Obama at least makes his intentions clear.
Someone here yesterday nailed it for both candidates.
“Liar In Chief”
Why is it when republicans are in office they must be voted out at any cost so that we can have hope and change…
and
when democrats are in office it really doesn’t matter who is in charge because they are all the same so why bother and we may as well just keep the devil we know…
Because your brain and possibly your financial interests allow you to see it in no other way.
My three year old is the same way in regard to his older sister. In his mind he is always getting the short end of the stick.
Right on Measton! You’re the only one in the world who has everything right, understands everything correctly, has all the right sources, sees everything from the right angle. You are my hero and I bow to you! Just give me directions to your church…
“And then press the new President to pick someone with some sanity.”
And then be totally ignored. Again.
Bingo
The free sh*t army is NOT happy…
At first glance I thought this was a new program…..
Kids for Clunkers
Woman accused of trading baby for pickup truck
The Associated Press
Posted on Tuesday, 07.31.12
PALATKA, Fla. — Authorities say a 30-year-old woman sold a baby boy for a 1999 Dodge Dakota truck in Kentucky and then fled to Florida.
The Putnam County Sheriff’s Office says Heather Ann Kaminsky was arrested July 18 at a Winn-Dixie supermarket. She has been extradited back to Kentucky where she’ll face charges of human trafficking.
Authorities say Kaminsky sold the baby shortly after his birth in January.
Deputies say the couple accused of trading their truck for the baby - Jeremy and Jamiee Brown of Laurel, Ky. - were arrested July 12 and also face human trafficking charges.
According to deputies, Kaminsky sold the truck for $800 and some methamphetamines.
http://www.miamiherald.com/2012/07/31/2923103/woman-accused-of-trading-baby.html - -
Why does the government get involved in an exchange of private property between two citizens?
Can’t we let the free market work?
It’s against their religion, I think…
Good grief. She didn’t even get a new truck out of the deal.
You don’t get much trade in value on a meth baby.
They should have framed it as a rental agreement.
Meth heads. Losers forever.
Scary, ain’t it? And no matter what the reputation of the stuff the demand for it seems to keep on growing.
Actually meth use is in decline
For example, while it’s true that methamphetamine “lab incidents” have dropped by 90 percent in Oregon since 2004, the report points out that the bulk of that decline took place before the state’s prescription requirement took effect in 2006. Moreover, the report points out that six other states near Oregon showed similar declines in meth lab incidents over the same period, despite not having a prescription requirement. The report also notes that while Oregon did experience a 23 percent drop in methamphetamine-related admissions to substance abuse treatment centers from 2006 to 2009, that figure mirrors a similar drop across the entire country.
As I recall Oregon had a big public relations campaign showing before and after shots.
“As I recall Oregon had a big public relations campaign showing before and after shots.”
Ah yes, my friends and I spent an inordinate amount of time photoshopping each other’s face into these.
The decline in domestic meth labs is due, in part, to it being produced in Mexican superlabs.
Scary doesn’t begin to describe it. Disaster is more like it.
I will never understand the need for so many people to feel twitchy and paranoid. I’ve been told that speed drugs make people feel more in control of their life. Like they can stay one step ahead of their problems or opportunities.
Thank god 24/7 media bombardments telling how unhappy we are without product/service XYZ doesn’t have any effect. Nope. No siree! Nor businesses constantly stealing from us and government lying to us. Nope. No siree!
If we legalize it - these things would not happen…
lol
Hey montana are you near Bozeman? Why not see Rosie Ledet
8/5/2012 BOZEMAN MT LINDLEY PARK
I don’t go to Events.
Human trafficking? oh, pleeze. More trumped up charges by government bureaucrats…..District attorneys.
I guess if she went to an adoption agency, then getting money for giving her child to another couple would be just fine, wouldn’t it?
I understand that we need to have some registration as to where and with whom people are living, particularly children (unless you are an illegal alien), but really, human trafficking?
I think the law was made to prevent slavery and forced servitude, and bad things like kidnapping.
She did none of these. she just didn’t go about the “transfer” the right way.
They should slap her wrist and make her sign the proper papers.
she just didn’t go about the “transfer” the right way.
Exactly! It’s just like when those Feds told us we couldn’t keep slaves anymore. Our property was none of their business.
While I’m assuming it is as well, the article doesn’t actually say that it was “her baby,” just that it was “a baby,”
SNARP
LOL…
Rental rates are falling in Chicago…… and in Denver…. and LA
http://www.rentcafe.com/blog/cities/chicago-il/rent-in-chicago/
Not falling in the 4th largest city in the nation:
http://www.metrostudyreport.com/category/houston-market
(only goes to May 2012, but the overall trend is up for the last 8 years)
Give it time. Houston will crater when the energy boom busts.
And when might that be?
History is your friend…. unless you want him to be your enemy.
I was in Houston in the early 1980s when the bottom fell out of energy.
It was not pretty. Not pretty at all. Geophysicists were working as waiters… if they were lucky.
But I can guarantee you there is not one single oil business (or any older business for that matter) in Houston who does not remember that time and will do whatever it takes to keep oil from ever being that cheap again.
I have to visit Houston a lot and they weathered this recession pretty damn good. You would never know there was one there.
Houston who does not remember that time and will do whatever it takes to keep oil from ever being that cheap again.
And how did that work out for them in 2009-2010 when oil fell from $150 to $30/barrel?
I notice how it shot back up just as fast as the stock market, too. And never ever tested the lows again. A bit odd, when you think about it.
That’s right. Very odd as if there were some intervention because it certainly wasn’t demand when supplies stayed at 20 year highs as prices mysteriously escalated again.
Good memory Carl.
I have to visit Houston a lot and they weathered this recession pretty damn good. You would never know there was one there.
I have a friend in Houston. His attitude has been “what recession”? His wife makes 120K a year as a nurse and he’s basically Mr. Dad and works part time doing English/Spanish translating, pulling down about 40K himself (he used to be a Pastor until he was fired and now no church will touch him).
“I notice how it shot back up just as fast as the stock market, too.”
That’s how.
Strange huh?
Fracking is on a roll….Roof tops necessary for workers…
Fracking. Offshore drilling. NatGas. No end in sight from what I’ve seen. (friends, articles, reports)
The world is thirsty for carbon based energy.
Not just energy, but synthetic materials.
This is interesting. Found this searching for the ratio break out:
http://www.gizmag.com/breakthrough-promises-150-per-gallon-synthetic-gasoline-with-no-carbon-emissions/17687/
Very interesting. I wonder how much energy it takes to produce?
Very interesting. I wonder how much energy it takes to produce?
Dang it, why do you have to ruin everything?
Kind of like “Where did the electricity for that plug-in electric car come from?”
There is a lot to like about this. Portable, less polluting than gasoline, no conversion of current fleet required. It could be part of a post-carbon future.
my rent has not rose in 4 years.
not bothering your landlord with every rinky dinky issue works wonders.
identical townhouse accross the street is renting for $ 800 a month more than what i am paying.
Your place was not vacant for four years?
Your landlord made out, and apparantly so did you.
A win-win all around.
Congrats: one for you, one for your landlord.
let me re-phrase….the owner of the indentical condo across the street is asking for $ 800 a month more than what i am paying.
If he manages to get it, your landlord will find that very interesting…
And buying either one of them is double what you’re paying in rent.
Why buy when rental rates are half the total monthly cost of owning the same square footage?
Asking ain’t getting. Many desperate flippers discovered THAT fact a few years ago. Some are still learning it.
Ok - so your city is broke.
What do you do?
Cut spending? - No.
Layoff employees? - No.
Reign in the insane public union contracts? - No.
Raise property taxes a minimum of 33%? - YES!!!!
—————————————-
Scranton pays up owed income plus interest to city employees
David Lee Miller - July 31, 2012 - FoxNews.com
City employees in Scranton who earlier this month saw their pay slashed to paid minimum wage over a dispute between city leaders will soon get the money owed them, plus interest.
With the pay reinstated, John Judge, president of the local firefighters union, said he was “cautiously optimistic” the city’s latest financial crisis is over.
Last Friday, the mayor and city council, all of whom are Democrats, reached agreement on a financial recovery plan that among other things calls for a minimum 33 percent increase in real estate taxes.
subsidized by the taxpayers of america though the real estate tax itemized deduction.
totally sustainable.
party on wayne!
That, of course, is a lie put out by promoters of real estate.
ALL deductions, reduce your income by the deduction. If you are in a 25% bracket, you will get your “income” reduced and still pay the biggest portion of the “tax”.
In other words, if you deduct the “interest” portion on your taxes, let’s say it’s 10,000. and you made made 100,000, then you have taxes on 90,000.
On a 25% tax rate, your tax would go from 25,000, to 22,500.
I.e. you say 1/4 of the amount of the tax or 2500, not 10,000.
That is the stupidity of “borrowing” because you get a “tax writeoff”.
You get your tax rate x the amount deducted.
IF you are in a 15% bracket, your “savings” is even less.
calls for a minimum 33 percent increase in real estate taxes ??
With a commensurate drop in real estate values….Not sure of total net worth of real estate in Scranton but there is likely some serious loss of equity with that decision…
Cut spending? - No.
Reign in the insane public union contracts? - No.
No? Says they did right here the second paragraph.
“City employees in Scranton who earlier this month saw their pay slashed to paid minimum wage over a dispute between city leaders will soon get the money owed them, plus interest.”
LOL! That’s probably why he didn’t provide a link.
1. I usually never put in a link due to HBB filters
2. I usually ALWAYS provide the source, author and date (easy to google)
3. How is cutting the pay for union goon workers to minimum wage for a few weeks and then PAYING BACK every cent owe to them PLUS interest cutting ANYTHING?
Only in a union goon world is that “Reign in the insane public union contracts”
Hey - we can always raise taxes to cover the costs of union goon contracts. It is the American way.
So a contract is a contract until it’s inconvenient?
And that’s good, free market business, how, exactly?
You really have no clue how union goon contracts work.
Especially in closed shop union goon controlled cities and states.
So a contract is a contract until it’s inconvenient?
But you didn’t provide any information about why the pay was brought back. I strongly suspect a judge ordered it. Because it is a contract.
And the filters only delay your post. They don’t prevent it. If your point is completely dependent on being posted within a couple of seconds, maybe you should reread it.
Every good contract explains how it is to be dissolved.
Dissolved? You mean ended if both parties agree? Or how the defaulting party is forced to make the other party whole plus any penalties that will be required?
It is not a “contract” because the people being “fleeced” by the UNIONS never signed on as a party to the contract. did they?
No. I did not agree to any of the terms and conditions that the “elected” bureaucrats agreed to pay out on my behalf, into perpetuity, providing the taxpayers NO oversight or Input into the negotiations process.
It is not a contract because the party made responsible for the payment is the taxpayer.
In reality, the City Council is the party responsible and they should be required to get voter approval for tax hikes.
When they can’t, the “contract” is unenforceable, therefore void.
The contracting party is the city or county or state or whatever itself. And yes, the elected officials are allowed to act on behalf of that entity just like corporate executives are allowed to act on behalf of companies that they don’t own and obligate the shareholders to make good on the contracts they sign on behalf of the company.
Polly, please consider your argument. As a public employee, you reflect a certain viewpoint. That is, ALL GDP IS YOUR GDP. Existing for your pleasure, to be expropriated from the great unwashed, and dispensed for the betterment of society according to the dictates of your enlightened judgment. The old droit de seigneur, divine right of kings (or princesses), as it were.
That you collectively leave families in ruins, scattered to the four winds due to the loss of their houses (in the case of the Scranton property tax expropriation) and livelihoods (in the case of the family farms) is of no import to you because you just KNOW better than them.
Better that the Polenski parents (in Scranton) just get with your program and go out and collect cans to recycle in between shifts at their six part time jobs to come up with the vig. Or that Granny, Ma and Pa, and the six kids and grandkids living on the homestead are foreclosed or evicted, and all work at 7-11s and pay separate rents in distant urban hellholes far away from one another. Better that (according to the likes of you), than to be left in peace to continue their longstanding collective folkways.
The spirit moves. I’m gonna preach it again. Many of us disagree with your position wrt who, exactly, has the rights to the fruits of our labor. Many of us disagree vehemently with your presumptive right to dictate our livelihoods and our terms of existence by expropriation.
Government at all levels has grown into an entrenched fascist state (in the classical sense - bought and paid for by klaptocrats). All the better to “help” the citizens of Scranton. And the 300 acre family farmers who are so benighted that they don’t know what they’re missing by not wanting to be surrounded by asphalt stink and bedbugs (courtesy of jobless, hot bunking neighbors - the previous generation of family farmers kicked off their farms via estate taxation - crammed into neighborhood tenements).
Yes, yes, you can simper and whine all you want about the finer points of union contracts. Brava!
Go to the next layer of the onion. The contracts are founded on a fraudulent premise - that the likes of you are free to dictate taxation by fiat, with no accountability, and from a position that is morally and ethically impoverished, such that you neither understand nor care about the consequences.
.
“that the likes of you are free to dictate taxation by fiat, with no accountability”
I have to disagree with you here. Polly is not an elected official, so the likes of her do not dictate taxation. Our elected representatives do that.
The elected local government is beholden to the electorate who are free to unelect them in the next election. That is the accountability built into our system of governance.
certain viewpoint. That is, ALL GDP IS YOUR GDP. Existing for your pleasure, to be expropriated from the great unwashed, and dispensed for the betterment of society according to the dictates of your enlightened judgment.
Your viewpoint concerning what you think is her point is at best ignorant, and at worst idiotic, and you did a good job proving it.
But I applaud your good spirit in doing so.
Jane,
While I disagree substantially with your premise, (Polly’s taking no ideological stance, merely explicating a legal one that affects us all– which I find immensely helpful), I applaud you for the eloquent way you’ve stated it.
Would that everyone on this blog had your tempered passion, we need more rational conservatives. Nicely done!
Last great hope for global economy: Central bankers will flood markets with cash…
BIG WEEK AHEAD FOR ECONOMY IN U.S., EUROPE
Investors hope central banks flood markets with cash
By PAUL WISEMAN & CHRISTOPHER S. RUGABER Associated Press
12:01 a.m., Aug. 1, 2012
Updated 5:28 p.m. , July 31, 2012
The world’s top central bankers have said they’re willing to rescue the economies of Europe and the United States. This week we’ll find out if they are ready to act.
The Federal Reserve wraps up its two-day policy meeting today. Chairman Ben Bernanke has pledged to act if unemployment stays high. The European Central Bank meets Thursday, a week after ECB President Mario Draghi vowed to “do whatever it takes” to save the European common currency, the euro.
“If the ECB comes through and follows up with what Mr. Draghi said a couple of days ago, that’s big,” said Nariman Behravesh, chief economist at IHS. “That would minimize the risk of a nasty scenario.”
Investors are hoping the Fed and ECB will announce plans to flood markets with cash through large-scale bond purchases. But economists caution that the hopes might be dashed. The Fed might not be in a hurry to act. And investors might be expecting more of Draghi than he can deliver.
Economies on both sides of the Atlantic need help. Unemployment in the 17 countries that use the euro remained at a record 11.2 percent in June, the European Union reported Tuesday. The International Monetary Fund expects the eurozone economy to shrink 0.3 percent this year.
The U.S. government announced last week that the American economy grew at a listless 1.5 percent annual pace from April through June, even slower than the 2 percent rate in the first three months of the year. On Friday, the Labor Department will reveal just how bad the American job market is. Economists expect the unemployment rate remained at 8.2 percent for the third straight month in July and that the economy generated just 100,000 jobs, not enough to keep pace with population growth. The first three months of 2012 job growth averaged more than 225,000 a month.
…
Last great hope for global economy: Central bankers will flood markets with cash…
Unfortunately, the “little people” won’t get to see much of that cash.
I just had my annual review. Was rated as “exceeds expectations”. I still don’t know if I’m getting any kind of raise. Even though the company made 10 billion profit off of 40B in sales, money is apparently too tight to mention.
Colorado this is my argument for a $3000 debit card….lets try for once a bottoms up approach.
I hear you. It was tried once (sort of) with the so called stimulus checks.
The point I was trying to make is that all of that cash is being created for the benefit of the Masters of the Universe, hence they will get it all. No soup for you ! (or me)
Dj,
How will you administer it?
Do those under 18 get one? What about illegal aliens? What about legal residents? How do you make sure that people whose identities have been stolen get theirs? What do you do (if anything) about the inflation that might follow? How do you deliver them? Do you allow people to sell theirs to another person for cash? If not, how do you guarantee that the owner is the one who is using the card? Do you require a photo id to use it? What if the person doesn’t have one? If you don’t require some sort of identification and you deliver them through the mail, how do you keep them from being stolen? Who runs the debit card itself? Mastercard? Visa? AmEx? Do you let them take their normal 2% to 5% fee out of such a boondoggle?
And most importantly, how are you going to pay for it?
Offering up something as a serious policy idea because you want to go on a shopping spree is moronic.
And most importantly, how are you going to pay for it?
The same way our feckless leader does it…dump it on the next generation…
What inflation? If we are dropping helicopters of money why not give this load to americans instead of bankers?
And our idiot leader can’t figure out that millions HAD very good credit before the crash, and with a real job again it will come back,but that doesn’t count in getting a loan today.
Ok some people will pay for a lap dance instead of a laptop, but most just need basic items fixed or upgraded…..how many still use windows XP or ME?
The reason inflation has been so limited is because the banks aren’t lending out the money. We are adding to the supply, but velocity is stagnant. If you put that kind of cash into your hands, it will spur a huge surge in inflation at least temporarily.
well anything is better then what we have now….and people will just feel better when they are up to date and applying for a new job.
Well I think that we’ve seen a real split between the financial economy and the “real” economy. The huge amounts of money being poured into the system are going more and more into wall street and the bond market rather than into people’s hands through payrolls. Too much money, sure, but it’s chasing financial assets rather than the consumer products that elements of the CPI. The only reasons that the stock market isn’t shooting up is that the “real” economy is tanking and that much of that money is “replacing” all the money lost on all those bad mortgages (both directly and through CDOs and other gambling on FBs)
Just as I said you were winning the state-tax arbitrage game yesterday, your global company is playing the local-labor arbitrage game. MA tech companies are giving raises and in most cases, bonuses, because they have to… tight tech labor market here in Boston.
But there is a “shortage” of tech folk in Denver. I know because we are trying to hire and it’s hard to find people. And yet, no one is giving raises. So people play the job hopping game to get that 2-3% raise.
My boss did say that there “should” be raises this year and maybe bonuses for a few, but there is nothing official. I should know in a few more weeks
In any case, if I moved to the Boston area not only would I get hammered by higher taxes, I would probably have to pay 2-3x times for the same house.
Agreed. Aside from the eerily strong economy of Boston inside of 128, my family and my wife’s family are here… really the only thing keeping us in this state.
Speaking of which, it looks like I’ll be in Boston the last half of next week to train a customer. I drove through a long time ago but I’ve never flown into Logan. Kind of looking forward to seeing it again.
Carl if you can get away, we should have a HBB soiree.
I only have one time that I can get away and that’s Thursday evening. I plan to head in what I assume to be your direction to see a historical/ancestral landmark. One of my ancestors is Hannah Dustin and there is some kind of landmark near/at an island where she killed a group of Indians that had kidnapped her and her baby and killed the baby. It’s just north of Concorde, NH. If you have any desire to meet me there that evening, let’s set it up.
With all of the uncertainty in Europe, China, and India recently, I might be cautious about giving raises if I were in management. Not to mention elections here and the potential for the fiscal cliff in January.
And then there is the whole Mayan end of the cycle thing.
Not just uncertainty elsewhere…our orders have slowed a lot this summer. I wasn’t here in 08-09 but I guess the company was really hurting early in the down cycle but came back nicely before most others did. Definitely possible we’re going there again even though we’re at a good place in a hot new product cycle (PCI-e “hard drives” are ramping up fast).
David Wismer, Contributor
8/01/2012 @ 6:52PM |1,216 views
Bernanke Fails To Win A Medal
The market went on a fairly wild but somewhat typical show of volatility on announcement day for the FOMC.
When the results were finally tallied, the market was far from awarding a gold, silver or bronze to Fed Chairman Ben Bernanke and team.
After some strong algo selling immediately after the Fed announcement, markets recovered somewhat and put in a mild down day, with the SPX off -0.29%, the Dow down -0.25%, and the Nasdaq off -0.66%.
But what were they saying today?
…
What will the QE cargo cult do if neither the ECB nor the Fed delivers the money flood? Will hints of future QE stimulus suffice to keep the faith alive?
Aug. 1, 2012, 1:48 p.m. EDT
Bundesbank rains on Draghi’s ambitions
ECB seen unlikely to resume bond buys in face of opposition
By William L. Watts, MarketWatch
FRANKFURT (MarketWatch) — When it comes to the notion of the European Central Bank buying government bonds, no means no.
That appears to be the message from the powerful German Bundesbank. The central bank reiterated Wednesday, on the eve of the ECB’s August policy meeting, that it thinks such practices are misguided, threaten the institution’s independence and potentially overstep its narrow mandate of keeping inflation in check.
While the ECB has acted without the Bundesbank’s blessing before, “it would be very difficult right now for Mario Draghi to do these things while presenting to the world a unity of purpose” among European policy makers, said Stephen J. Lewis, chief economist at Monument Securities in London.
As a result, strategists say investors are poised for disappointment a week after ECB President Mario Draghi put his own reputation on the line by declaring the institution ready to do “whatever it takes” within its mandate to preserve the euro, adding for good measure: “And believe me, it will be enough.”
…
Don’t “better than expected” jobs numbers reduce the chances for QE3?
Aug. 1, 2012, 8:47 a.m. EDT
Stock futures retain gains after ADP data
By Kate Gibson and William L. Watts, MarketWatch
NEW YORK (MarketWatch) — U.S. stock futures held modest gains Wednesday after ADP Employer Services said U.S. companies added a better-than-expected 163,000 jobs in July.
ADP also revised its June count slightly lower, to 172,000.
“It appears that the labor market is picking up somewhat after a bit of a spring swoon,” Dan Greenhaus, chief global strategist at BTIG LLC, wrote in a note.
Another analyst cautioned against reading too much into the report ahead of the government’s nonfarm payrolls data on Friday.
“While we should take note of this better-than-expected figure, its monthly correlation to the government payroll data is very sketchy,” emailed Peter Boockvar, equity strategist at Miller Tabak.
Futures on the Dow Jones Industrial Average DJU2 +0.49% rose 47 points, or 0.4%, to 12,996. S&P 500 Index futures SPU2 +0.41% gained 4.6 points, or 0.3%, to 1,379.2, while Nasdaq-100 futures NDU2 +0.19% advanced 15.75 points, or 0.6%, to 2,651.75.
The jobs data come ahead of a Federal Reserve policy announcement in the afternoon.
…
Judge: S.D. pension overhaul can move forward
Injunction sought by labor to delay implementation of Prop. B is denied
Written by Craig Gustafson
3:15 p.m., July 31, 2012
Updated 4:58 p.m.
San Diego’s voter-approved pension overhaul will move forward after a Superior Court judge on Tuesday denied a request to put the city’s implementation of Proposition B on hold while a state agency investigates its legality.
Proposition B, which voters overwhelmingly passed in June, calls for replacing pensions with 401(k)-style plans for most new city hires and proposes a five-year freeze on the pensionable pay of current workers.
…
More sanity from the mid-west.
Yeah, I’ll applaud this so-called sanity when it is applied to the banks.
San Diego is the mid-West?
All things are possible in 2banana’s world.
“…for replacing pensions with 401(k)-style plans…”
The plan moves forward.
Once the last pensions are gone, they WILL take away your Social Security and use it to play the Wall St. casino.
Here is a hint.
Your Social Security has ALREADY been taken.
There ain’t no lock box and there are no accounts in your name with any money in it.
But we do have plenty of IOUs (well, at least for the next decade or so)
The promise is still there, regardless of whether the funds are sequestered. I would prefer to have SS invested in US treasuries than in the stock market or Spanish bonds. What would you recommend they do with the money collected?
Oh, that’s a good one. Treasuries, paying 2%, maybe?
How do you get a $25,000 annual payout for 25 years with a 75,000 initial investment at 2%?
YOU can’t. You can’t do it in the market and you can’t do it with “treasuries”, which is just borrowed money from the government.
There is NO understanding of the lack of resources to support all the promises made to so many people from the government.
More bullcrap.
The money IS there and there is plenty until the end of the century.
I too am a trust fund “skeptic” but I would characterize it a little differently. The wealthy were perfectly happy to use those “excess” SS contributions to fund their tax cuts, but now that the demographic easy times are over (The boomers start to retire rather than being in the highest earning years) they are quite reluctant to pay the taxes necessary to redeem the “special treasury obligations,” held by Social Security. The irritating thing, is this was predicted by some back in the 80s when they came up with the idea using the trust fund as a way to deal with long term demographic issues.
July 31, 2012, 3:35 p.m. EDT
What should Fed do? See charts and vote
The charts of data that Fed policy makers will confront
TODAY’S MARKETS
Updated August 1, 2012, 2:26 p.m. ET
Stocks Fall After Fed Inaction
By JONATHAN CHENG
NEW YORK—Investors sent stocks lower after the Federal Reserve held back from announcing any new stimulus measures, adding to uncertainty on a day clouded by trading irregularities and mixed readings on the strength of the U.S. economy.
The Dow Jones Industrial Average sank 39 points, or 0.3%, to 12972 immediately following the Fed’s statement. Prior to the announcement, the blue-chip Dow was up about 30 points.
The Standard & Poor’s 500-stock index dropped four points, or 0.3%, to 1375. The Nasdaq Composite lost 14 points, or 0.5%, to 2926.
…
Someone mentioned household formation? Here is an article on the coming suburban war, between exclusionary homeowners worried about taxes and property homeowners and desperate homeowners who can’t sell and need income.
http://online.wsj.com/article/SB10001424052702303612804577533060009451088.html
“The suburban single-family home is becoming a misnomer as economic reality collides with shifting demographics. Many suburban communities have long made it difficult, or impossible, for homeowners to convert underused space—barns, garages and basements—into rental apartments. But across the U.S., homeowners are pressing for changes in zoning laws to allow rentals while home builders report a rise in demand for houses with in-law suites or quarters with separate entry.”
Add in a touch of racial hostility, more common in older homeowners than in younger generations, and you could get quite a stew.
They’re pushing for that here, again..the problem is not the families doubling up now, it’s the trashy congested neighborhood that results 20 years later when it’s all strangers living in the house, the basement apartment and the bungalow (or 4-plex) out back. That setup characterizes all the worst neighborhoods here and in every other town.
But it’s coming, and the current owners and Realtors use the excuse that the new unit is for Granny or those sweet young kids just starting a family.
Wow - What’s this? The Tea Party is alive and well?
When do the OWS candidates start winning?
————————
Cruz victory a wake-up call for Washington
Houston Chronicle | August 1, 2012 | Richard S. Dunham
WASHINGTON - Ted Cruz’s stunning come-from-behind victory over David Dewhurst in Tuesday’s Republican Senate runoff sends an unmistakable message to the political establishment in Washington that the next U.S. Senate, like the Republican-controlled House, is going to be more conservative and less willing to compromise with President Barack Obama or even a possible President Mitt Romney.
“This is going to reverberate around the Capitol in Washington and around the country,” said Republican strategist Matt Mackowiak. “If you can do this in Texas, you can do it anywhere. This is a hell of a wake-up call for the establishment.”
Oh, yeah, they’re also messing themselves over Marco Rubio, who is about as “Tea Party” as Pinochet. OK, maybe that’s an exaggeration, but considering Rubio is Jeb Bush’s proxy.
I had the most insane conversation with some mouth from Michigan spouting the Marco Rubio spew. Those of us who live in Florida are a little more cognizant of who and what this guy is. Like many politicians, he had some good ideas that were quickly nixed by his sponsors. Such as protecting his constituents from the effects of illegal immigration.
Anyway I’m looking forward to crushing Romney’s hopes and dreams.
As my accountant once said, he likes the idea of having a Congress at loggerheads with the Executive. Although we’ve seen that the Expletive now takes the Imperial road around Congress. Not much of a surprise there, I’ve been telling my Congresscritters for a couple of years now that they’re fast becoming obsolete. Here’s why: their power derives from the people. They’ve abandoned the people in favor of corporations and assorted special interests. So they’ve flushed their power down the drain.
But try explaining that to some dimwitted staffer.
It isn’t their job to understand you. It is their job to say something vague that will placate you. If that is not possible, it is their job to get you off the phone. They are exactly like the complaint line at a cable company but they don’t have the option of crediting your account $5.
This study was compiled from the Club for Growth’s Congressional Scorecard, which evaluates lawmakers based upon their commitment to limited government and pro-growth policies. What we found was that while some freshmen have lived up to the promises they made to the tea party movement, dozens of them are big-spenders and are no different from many of the veteran Republicans they serve with.
SNOOZE
Since when did the Tea Party movement become “more right wing” than moderate Republicans? The whole point of the Tea Party was that the Republican party had abandoned fiscal conservation and been co-opted by the Religious Right and the NeoCons.
To the MSM of America:
Cutting one dollar of government spending is equal to “extreme right wing”
Questioning the size and scope of government is equal to “Nazi”
Trying to understand why the US Constitution can be ignored without consequence is equal to “rabid racism and homophobia”
I hope I have cleared things up.
The whole point of the Tea Party was that the Republican party had abandoned fiscal conservation and been co-opted by the Religious Right and the NeoCons.
But that was when Ron Paul and CNBC dude were talking. Sadly soon enough “Tea party” was co-opted by RR and Neocons.
Which was the point of my post.
Hmm..Of course my take was that the tea party was mostly about the Moral Majority types becoming tired of being sucked up to during elections and than ignored while governing by the financial/business wing of the Republican Party.
Cruz victory a wake-up call for Washington
Not buying it. May be a wake-up call for republican fossils. Democrats are more than happy to rubber stamp their old, tired and corrupt.
Interesting result. Even support of the ultra-conservative governor, Rick Perry, and more than double the available money couldn’t swing the election Dewhurst’s way. Did Perry’s presidential campaign reduce his influence in Texas politics? Is the effect of Citizen’s United overrated?
http://news.yahoo.com/blogs/ticket/tea-partier-ted-cruz-wins-texas-senate-runoff-012636444.html?_esi=1
In some states, the Tea Party takeover has hurt Republicans in the general election - Angle in Nevada, O’Donnell in Delaware, Miller in Alaska. Conventional wisdom is that that is not likely for Cruz in Texas.
It appears that Dewhurst’s campaign was mostly self funded. Was he unable to get anyone else to contribute? If so, he might have taken a hint that perhaps he was unelectable.
http://content.usatoday.com/communities/onpolitics/post/2012/08/ted-cruz-david-dewhurst-self-funding-texas-senate-/1
This is interesting to me; certain markets such as California overbuilt during the housing boom… what we see now is a large number of unoccupied homes. Those people must live somewhere now, right? But where would they go? They are migrating to places where there are jobs (Boston, Austin, NYC, DC).
Migration is driving prices of rentals up in some markets… Builders are now trying to catch up with demand and building as many units as fast as possible; what funny is that nobody is building ‘affordable’ housing; all new units are ‘luxury’ apartment communities targeted to ’successful young professionals’.
—————————
Austin apartment market on record-setting hot streak
The Austin-area apartment market is continuing on its hot streak, with rents and occupancies hitting the highest levels in the 21 years that a local expert has been tracking the numbers.
The area’s midyear apartment occupancy rate stood at 97.8 percent, said real estate consultant Charles Heimsath, president of Capitol Market Research.
Although more than 10,000 apartment units are under construction in the area, demand is still easily outpacing supply, experts say.
Driven by job growth and a robust influx of newcomers — more than 50,000 a year — along with a recession-caused dearth of new units being built, the region’s apartment market has become one of the nation’s hottest over the past two years in terms of rising rents and occupancy. And experts expect the rental squeeze — and the escalating rents — to continue through next year.
In far Northwest Austin, HPI is under construction on Lakeline Boulevard with a project called Indigo. Rents will average $1,116 a month, he said.
This week, HPI started construction on a second project planned for 334 units on Spectrum Drive and Parmer Lane. Monthly rents will average $1,085.
They include Lakeshore Pearl, a $20 million project planned for 230 units along Elmont Drive off East Riverside, where the first 82 units and clubhouse will be ready in mid-November. Rents will average $1,275 a month.
Heimsath and others say they don’t think the market will be oversupplied with the current level of construction. That’s because the projects in the works represent a variety of product types — from garden-style units in the suburbs to mid- and high-rise towers — and they have staggered completion dates.
“Everyone is worried that now we are going to overbuild,” said Judson of Trans-western, “but that’s unlikely.”
In fact, Willett said, the danger of an oversupplied market “probably doesn’t come until 2014 or 2015, when deliveries could be quite a bit more substantial than they will be in the next year or so.”
……. in the meantime rents started cracking in New England and the Northeast
http://www.eagletribune.com/latestnews/x748660882/Rent-prices-dropping-in-Southern-N-H
Because people are migrating to this part of this country looking for jobs
Meanwhile:
Seasonal trends send Austin unemployment rate up to 6.4 percent
http://www.statesman.com/blogs/content/shared-gen/blogs/austin/theticker/entries/2012/07/20/seasonal_trends_send_austin_un.html
Nowhere is magic. No matter where the Joad Family 2.0 loads up their truck to head for, the depression will still be waiting for them. The more people who move to Austin looking for work, the more unemployed people there will be.
My wife works at the local library, and the number of transients who come in to use the PCs in the new and expanded computer lab (I think they have 50 machines there now) is steady and large.
They have to get a library card to use the computer lab. Apparently most move on after not finding steady work as the number of “dormant” accounts dwarfs those that are regularly active, and that number is pretty respectable in and of itself (the local library is a busy place). IIRC, they purge the dormant accounts after 10 years or so.
Nowhere is magic. No matter where the Joad Family 2.0 loads up their truck to head for, the depression will still be waiting for them.
But in some places it isn’t as bad as others. Of course, landing aa $10/hr job in a metro areas where the average rent is $1200+ won’t help.
This reminds me of the claims of how the free sh#t army lives large and get lots of “swag”.
If that is true, then why are so many families on the move like gypsies? Why not just find a nice place (say, like Loveland), settle down and start collecting those fat government checks?
I do know that when new section 8 vouchers become available in our county, which happens once or twice a year and usually numbers from around 20 to 30 new vouchers, that hundreds of people line up in the vain hope that they might be chosen to get one (I suspect they are the same people who come to library to use the computers to view Craigslist for jobs).
But in some places it isn’t as bad as others. Of course, landing aa $10/hr job in a metro areas where the average rent is $1200+ won’t help.
Yup. I don’t think word has gotten out that the cost of living in Austin is now comparable to SF or DC. How many people would move to one of those areas for the prospect of $10/hr and splitting an apartment with two roommates? I guess people still do that to live in NYC, but Austin ain’t New York City.
The comments are the most interesting, and they almost all say the same thing: where did they get their data as my rental rates are going up.
Also, there is no way rental rates are going down with vacancies running at 2% (according to the article)… so I would say something may be off in the data.
Rental vacancy rate is at an all time record high. Don’t believe me? See for yourself.
http://img192.imageshack.us/img192/7616/vacancym.jpg
Your link doesn’t display anything.
Works for me.
Big differences region to region.
“Rental vacancy rate is at an all time record high. Don’t believe me? See for yourself.”
The article you posted quotes the spokesman for the Housing Finance Authority as saying, “One reason vacancies are low in New Hampshire is people coming into the rental market after foreclosures, Law said.”
If this is true, and if the foreclosures continue at their current pace, might this not work to keep vacancy rates from tanking?
Of course, by “tanking”, I mean rising.
Don’t know. What we know now is rental rates are tanking along with housing prices.
Try finding your data on a site not called “imageshack.”
You know, like from a place that can explain how they collected and analyzed the data.
The chart is Census Bureau data. You like them either?
what funny is that nobody is building ‘affordable’ housing; all new units are ‘luxury’ apartment communities targeted to ’successful young professionals’.
I’m seeing the same thing here in podunky Loveland. All new construction is “luxury” apts that rent for as much as $1600 a month. You can buy a McMansion out here for $1600 a month, and a regular house for much less.
$1600 is nothing here in Austin. You can barely, if you’re lucky, get an apartment in the 78701 zip code for that amount.
For example, look up MLS 5128549… 750 sw ft 1b/1b condo rental for $2200 a month
Or MlS 7681358, a 3b/3b condo rental for $10,000 per month
Just curious, where do your Lucky Duckies live? In trailer parks?
This should answer that question:
Slumlords Exposed
Are california-based property owners being held responsible for the infestation and decay of their Austin investments?
By Brandon Roberts | Published: July 1st, 2012
http://austincut.com/2012/07/slumlords-exposed/
$1600 thats more then we are paying in queens and i can see the new WTC from my band new anderson double pane windows..
What a difference in noise reduction and heat, seems to have a UV filter in it too. The LL had his and our apartments done.
When I was living in Texas a decade ago, we had people who worked in Austin commute 60 miles north to the Killeen and Temple areas. They lived like kings because a decent single-family home could be had for well under $100,000.
On what basis do you say that CA was overbuilt?
Check the census vacancy rates in CA and population relative to housing units. You’ll find that CA did among the LEAST overbuilding based on those numbers (~5% rental vacancy rate and 1.8% homeowner vacancy rate).
“Check the census vacancy rates in CA and population relative to housing units.”
The overbuilding, at least from my vantage point of the Sacramento Valley, was in the valleys. Not much room to put stuff in the bay area proper, and people were being priced out by the late ’90s. The building we saw here was incredible. For a while, Elk Grove was one of the fastest, if not THE fastest growing “cities” in the country. Anything inland was fair game. So, Elk Grove, Fresno, Tracy, Natomas, Woodland and most in between. Which helps explain why the bay area hasn’t crashed. You might be asserting that if the homes had been priced reasonably, then the building was almost justified. Have you been to Elk Grove?
Lots of building doesn’t mean overbuilding. Homes being priced too highly doesn’t mean overbuilding.
Overbuilding means that there was too many houses built for the population.
This is admittedly old data, but the vacancy rates were pretty low in Elk Grove as of this post: http://www.arausa.com/ncalifornia/pdf/ARA%20Sacramento%201Q11.pdf
The Elk Grove rental vacancy rate was in the low 3% range at this time.
Most of the growth in California housing will need to happen in inland locations, which is why places like Elk Grove, Sacramento, etc. will experience far more housing development than locations farther west.
Heard this on NPR yesterday, didn’t see anybody post it. Don’t know if there’s a need to, but here ya go, anyway.
NAR, Yun, spin, yadda yadda yadda. They do talk to a couple of people who mention shadow inventory, though, and who take a SLIGHTLY less rosy view. Only slightly, though. But hey, it’s something, I guess…
http://www.npr.org/2012/07/31/157598225/is-housing-recovery-real-not-everyone-is-convinced
Hey drumminj,
The Joshua Tree Extension seems to have stopped working with the upgrade to Firefox 14.0.1.
Just FYI…
Its working for me 14.0.1
You probably don’t have the latest version.
I have version 2.0.1 of the extension. You?
I’m also using it on a Mac (gasp!), after many years of using PCs. Maybe that is a factor.
I have 2.1 I think for FF 12 or better you need 2.1
I have version 2.0.1 of the (Joshua Tree Extension)
I’m also using it on a Mac….Maybe that is a factor.
Same here and it’s not working now on Firefox 14.0.1 on my Mac.
Other people have said that and then found that if they had the latest version it wasn’t an issue. Don’t have the link handy, though.
I installed this one today and it works on 14.0.1.
Joshua Tree 2.1
In the future, you simply Google “drumminj thehousingbubbleblog” and find his posts. You can click on his screen name to take you to the page with JT links.
PC, here.
I installed this one today and it works on 14.0.1.
Thank you. The 2.1 Joshua Tree Extension is now working on my Mac with Firefox 14.0.1
And thanks again drumminj!
Pimco’s Gross says cult of equities dying
Bill Gross’ August Investment Outlook
By Bill Gross
August 1, 2012
* The long-term history of inflation adjusted returns from stocks shows a persistent but recently fading 6.6% real return since 1912.
* The legitimate question that market analysts, government forecasters and pension consultants should answer is how that return can be duplicated in the future.
* Unfair though it may be, an investor should continue to expect an attempted inflationary solution in almost all developed economies over the next few years and even decades.
The cult of equity is dying. Like a once bright green aspen turning to subtle shades of yellow then red in the Colorado fall, investors’ impressions of “stocks for the long run” or any run have mellowed as well. I “tweeted” last month that the souring attitude might be a generational thing: “Boomers can’t take risk. Gen X and Y believe in Facebook but not its stock. Gen Z has no money.” True enough, but my tweetering 95-character message still didn’t answer the question as to where the love or the aspen-like green went, and why it seemed to disappear so quickly. Several generations were weaned and in fact grew wealthier believing that pieces of paper representing “shares” of future profits were something more than a conditional IOU that came with risk. Hadn’t history confirmed it? Jeremy Siegel’s rather ill-timed book affirming the equity cult, published in the late 1990s, allowed for brief cyclical bear markets, but showered scorn on any heretic willing to question the inevitability of a decade-long period of upside stock market performance compared to the alternatives. Now in 2012, however, an investor can periodically compare the return of stocks for the past 10, 20 and 30 years, and find that long-term Treasury bonds have been the higher returning and obviously “safer” investment than a diversified portfolio of equities. In turn it would show that higher risk is usually, but not always, rewarded with excess return.
…
forget about stocks and bonds it real estate because they aren’t making any more land
Really Gross is all over the place he claimed bonds were done in last year and switched to equities. whatever. Growth is slowing in many areas and that’s not a bad thing if growth equals increased population. what are we 7B now and doubling to 8B in 10 years and 9B 2 years after that? time to stop.
Moves to stuff money under mattresses exact a cost on world trade and economic growth.
Aug. 1, 2012, 11:45 a.m. EDT
Warning signs when global investors stay home
Commentary: What’s most needed is freer trade
By Michael Casey
NEW YORK (MarketWatch) — Since the end of the Cold War, foreign exchange has been a barometer of globalization’s progress.
As both cross-border trade and capital flows increased, lifting incomes and living standards along with them, currency trading volumes grew fivefold to average more than $4 trillion in daily transactions last year.
But now there are signs that this rapid growth has stalled. For the sake of the global economy, that’s a worry.
Central banks overseeing six of the world’s busiest foreign-exchange markets released the results of their semiannual surveys Monday and disclosed that overall average trading volumes were down by about 5% in April from a year earlier. In North America and the U.K., spot market trading in the euro-dollar pair was off by 40% and 24%, respectively.
Market professionals painted the decline as the byproduct of a general reluctance to invest internationally. Investors, nervous about what lies in store for the global economy, have taken to keeping their money at home, they said.
It is the latest manifestation of a breakdown in international investor confidence, a malaise that first took root after the collapse of Lehman Brothers in September 2008. This pernicious condition later seemed to resolve itself, but it never really went away and simply resurfaced with the onset the euro-zone debt crisis.
When repatriation of capital occurs on this scale, the danger is that other nationalizing trends aren’t far behind. The souring investment climate spills over into real economic performance, as seen in Wednesday’s dismal manufacturing reports from around the world, and the same instinct to avoid having one’s money offshore can give rise to a similarly defensive posture in trade policy. Thankfully, few countries are following the lead of Argentina, which has adopted strict import and foreign-exchange controls in response to a mounting domestic crisis, but its all-out lurch into extreme protectionism offers a cautionary tale.
…
We sure haven’t run out of gloomy prognostications just yet!
Markets
Pimco’s Gross: Death of Equities Is Imminent
Bill Gross, Pimco co-founder and bond king, says stocks are dead. Steven Russolillo discusses reader reaction to Mr. Gross’s statements. Photo: Bloomberg.
Are Expectations Set Too High for Fed and ECB?
8/1/2012 11:05:30 AM3:03
Equities are dead.
LONG LIVE EQUITIES!
I “tweeted” last month that the souring attitude might be a generational thing: “Boomers can’t take risk ??
There it is right there….75-mil of them…All going to sit on their hands regarding risk….Thats a hell of a lot of money to be removed from the poker table…
That’s ok… all those gen Y barristas are going to plow their massive 401ks into the stock market any second now.
Contrary to popular myth, many boomers took a big hit in the last recession as well. A big hit to their paychecks, pensions and whatever small investments they had.
Not to mention the 5 previous ones.
Nobody in their right might wants to have to start over YET AGAIN, in their old age.
“…right minds…”
How dare the retired need to withdraw their retirement money during this temporary setback… they need to be in it for the long run!
Getting Technical
The Weakness Lurking Within the S&P 500
By MICHAEL KAHN
The stock index’s resilience may suggest all is well with equities. But beneath the surface, the average large-cap stock is struggling.
Although the Standard & Poor’s 500 has been able to bounce back from bad news and bad technicals, the average large-cap stock has been losing ground since March.
If we just look at a few “household name” stocks such as Apple (ticker: AAPL) and Wal-Mart Stores (WMT), we do not see any problems. Both have been performing well. But due to the way market-weighted indexes are created, they are also masking the struggle of the average large-cap stock.
And that doesn’t bode well for stocks.
…
“Cult of equities dying”
Which favors the buyers of equities.
Mister Obvious says: “Buy when the P/E drops below eight. Stay in cash until then.”
But that requires that you BELIEVE the P/E numbers. Somebody wiser than me once said, “the only number that I believe from management is the one on the dividend check.”
Trust, but verify.
$475,000 3 2 (1 1 0 0) 1530 10927 sf (Public Records) 1987 SFD 7/31/2012
Over priced they were going for less than 400K in Dec jan
I guess its 2004 ramping to 2006 again ?
1530 sq ft 10927 lot size 475K
Address: 15376 Seitz Ct Tract Code: Campus Hills Classic-341
Moorpark 93021
Public Remarks: Private park-like setting on end of cul de sac street. Awesome views of rolling hills and open space. Very light and open feeling. New carpet installed on stairs and bedrooms. Beautiful wood flooring in living and dining rooms, tile flooring in baths, family room and kitchen. Other improvements include newer kitchen appliances, replacement of window and door screens, newer garage door and opener, installation of outdoor lighting, recently painted exterior. Air conditioner and water heater replaced in 06′. Balcony off master bedroom. Huge backyard w/ patio area, large grassy area and newer storage shed. No need to preview-home is ready for a quick escrow.”
Hey Colorado Rosie ledet is going to be in your area why not see her???
8/7/2012 DURANGO CO DURANGO ARTS CENTER
8/8/2012 COLORADO SPRINGS CO STARGAZERS THEATRE
8/9/2012 PAONIA CO PAONIA TOWN PARK
8/10/2012 GOLDEN CO THE BUFFALO ROSE
8/11/2012 DENVER CO BLUES AND BREWS
Not in Fort Collins though. I wonder why?
Oh,who is Rosie Ledet?
(I just looked her up on Wiki)
come on take a chance the Dj knows good talent……
I’m guessing the proposed 20 percent across-the-board “tax plan cuts” avoids the “Third Rail” of FICA contributions?
UPDATE 1-Romney tax plan helps rich, hurts middle class-study
Wed Aug 1, 2012 10:23pm IST
* Romney tax plan cuts 20 percent for all income groups
* Those making over $1 million benefit most under plan
* Romney calls study biased
By Kim Dixon
WASHINGTON, Aug 1 (Reuters) - Republican U.S. presidential challenger Mitt Romney’s proposal to slash income taxes by 20 percent across the board would boost income for the wealthiest taxpayers while reducing it for the middle class, according to a nonpartisan analysis released on Wednesday.
The report by the centrist Tax Policy Center found that Romney’s tax cuts would boost after-tax income by an average of 4.1 percent for those earning more than $1 million a year, while reducing by an average of 1.2 percent the after-tax income of individuals earning less than $200,000.
…
Obama Supporters Barraged With Pleas for Cash
nytimes.com | August 1, 2012 | MICHAEL D. SHEAR
Each plea for money from President Obama and his allies has become more urgent and desperate than the last.
His campaign’s chief operating officer said on Monday that “we’ve gotten our behinds handed to us.”
Vice President Joe Biden warned on the same day that Mr. Obama would lose if “the other side spends us into oblivion.”
Michele Obama worried aloud about waking up on election day “wondering if I could have done more.” And Al Gore, the former vice president, said victories by the “extremist fringe” would “spell disaster” for the country.
The answer, according to all of them? A donation of $3 (or more) by midnight on Tuesday. (The e-mails don’t say “Pretty please!” — yet.)
Hey, how do I get on to the “$3 or more” list? My e-mails always ask for $12 or more.
I starting to think that the massive amounts of money that are still to be spent are of diminishing returns….I mean, Probably 90 percent of the people who are going to vote have already decided…The remaining 10% are independents and they are not going to be influenced by Rhetoric that they have already heard at nauseum..
The e-mails are not meant for the undecided. You don’t ask for money from those people.
The money is for lots and lots and lots of ads in the last few weeks, though they are spending now too. They are targeting a very, very nerrow groups of people: those who will vote, who will choose one of the major candidates, who haven’t decided yet and who live in states where there is less than 5% (guess could be a lot less than that) difference in the polls that they trust (not necessarily the ones you see). These people can be pursuaded in a few ways: convincing them who the winner will be as people like to vote for the winner (don’t ask me why), etc.
Me? I decided a long time ago. I don’t live in a swing state. And I mute TV ads anyway. The e-mails are what the campaign sends to me to convince me to send them money. Repeating them on-line seems to be doing the campaign’s work for them to me, but I don’t understand bananas mind set most of the time.
The PPT is trying to hold the line at DJIA = 13K after the Fed’s non-QE3 announcement…
Sadly for goldbugs, The Precious™ is not a protected asset class.
I guess it’s all up to the ECB now to invoke QE?
Why does Mr Market favor those round support levels (DJIA = 13K, gold = $1600/oz, etc). Is there something “special” about round figures?
Didn’t work… dang those market forces!
Realtor says “get what you can get for your house while you still can because the price declines are going to accelerate.”
https://www.youtube.com/watch?v=e4F8euyzubo
I find it highly ironic that you are posting a YouTube video from a Realtor to support your view.
Pimp,
It’s got nothing to do with me and everything to do with the link. Speak to the link Pimp.
Mortgage applications(purchase) DOWN 2% last week
But but but….. everybody buys a house this time of year!!!!! (Oh that’s right…. lying Larry Yun said we’re running out of houses)
http://online.wsj.com/article/BT-CO-20120801-705978.html
Maybe sales are down due to lack of inventory on the market.
Yes Darrell….. (fun)Yun said that we’re running out of houses.
The article says they are up 0.2%.
Here is the headline:
Mortgage Application Volume Up 0.2% Last Week - MBA
And the article says purchases are down 2%.
You just don’t like those facts do you barrister….
Headline still says up 0.2%.
And the data shows down 2%. Pretty cool huh?
The topline only matters if you think people refi-ing has an impact on houses for sale.
I have been crazy busy with work and watching olympics, so haven’t had much time to post….. However, some updates.
In our condo search, we went the better part of a week without seeing a listing we are interested in. Today a new listing came in… 924 sqft for $50K. nice area, across the street from the community college. The complex is very nice with grass, trees, well kept pool, etc. Then we go inside. yikes.
One of the ceilings has a badly patched ceiling. Laundry room has water damage that has not been repaired at all. Ugly tile floor. Original 1972 sinks, cabinets, etc.
So, we’re going to put in a lowball offer of $40K and be happy if we don’t get it.
There is simply nothing on the market that we are interested in.
On the plus side:
My son finally got a job. Burger flipper at a new restaurant, and he’s happy to have it. The restaurant is still remodeling, but will be open in a couple weeks.
My wife just got a new job, with a $15K a year raise. woot woot.
Why don’t you offer $20K and be happy if you get it? Sounds like th fixes might be very pricey. And some of them might mean fighting with the condo board (like fixing the underlying problem that caused the water damage).
We put in a cash offer for a GMAC property. The owner has moved out to SC and was renting it out. This owner did not pay his mortgage for 3 years and is doing the same thing with 5 other properties. To hold off the foreclosure he has filed bankruptcy. The owner is trying a short sale with stipulation for no recourse back to him for deficiency. The bank had a broker price opinion (BPO) and the property was listed for 280K last October. This summer they relisted the property for 327K. Our dual realtor told us that he would pay 260K and we went with his BPO. The bank came back asking full price. We have declined to inch up our offer. The house will need painting, carpeting, wifey will make me get a new kitchen and two baths. By the time I do all these renovation I will have at least 30K into it. So if I pay 327K + 30K = 357K. I can buy nicer homes for that kind of money.
http://www.zillow.com/homedetails/6400-Randall-Rd-Syracuse-NY-13214/31725406_zpid/
Look at the price history. Btw taxes are 13.5K and the last time this property sold was for 278K in 1997.
Besides walking any advice is appreciated.
Doesn’t bankruptcy protection stop everything including sales?
Don’t know as this was not their primary residence. The owners have Heloced the hell out of this house. Over 500K plus mortgage etc
Yeah - but he is a victim and deserved a bail out.
Don’t know as this was not their primary residence. The owners have Heloced the hell out of this house. Over 500K plus mortgage etc
Burn the house down.
I like it Mugz.
“The owner has moved out to SC and was renting it out. This owner did not pay his mortgage for 3 years and is doing the same thing with 5 other properties.”
I hope the IRS drives a Joshua Tree up this scammer’s tailpipe someday.
Where do the main two candidates fall on regulating government-sponsored predatory lending to lead the financially clueless down the path to future foreclosure?
Editorial
Mortgage Reform, Continued
Published: July 19, 2012
The Dodd-Frank financial reform act of 2010 took aim at the deceptive and unsound lending practices that roped borrowers into risky, high-cost loans they could not understand or afford. But the reform effort will ultimately hinge on whether federal regulators, including the Consumer Financial Protection Bureau, translate its provisions into tough rules, and that, in turn, will require the bureau — which has made a good start — to stand its ground against an industry that clearly wants the lightest possible regulation.
The bureau earlier this month proposed two new disclosure forms that should help borrowers navigate the mortgage process. The first form, known as the loan estimate, would be furnished to the borrower within three days of the loan application. It would clearly outline the terms of the loan, including the shifts in costs that come with adjustable rate mortgages and other exotic instruments.
A companion form would be furnished to the borrower three days before the closing; the borrower would have time to contest unreasonable charges or negotiate a compromise, instead of being ambushed at the closing.
Another proposed rule would change the way the industry handles high-cost loans; it would ban prepayment penalties and, in most cases, “balloon payments” — the large, lump-sum payment due at the end of the loan.
Dodd-Frank also requires lenders to make a good-faith judgment about the borrower’s ability to pay or face the possibility of fines or lawsuits. But the statute also allows the consumer protection bureau to define a category of loans known as “qualified mortgages” that are presumed to meet the ability-to-pay standard, thus reducing the lender’s risk of being sued in the event of foreclosure.
Mortgages included under the “qualified” designation should meet two important criteria. They should be affordable to people of moderate means. And they should be safe, understandable and simply structured mortgages, like 30-year, fixed-rate loans that have no bells and whistles. But consumer advocates worry that the bureau will succumb to industry pressure to bless as “qualified” some predatory mortgages that could result in borrowers losing their homes.
…
ft dot com
Last updated: August 1, 2012 9:13 pm
Global slowdown bites across Asia
By Robert Cookson in Hong Kong, Simon Rabinovitch in Changsha and Neil Hume in Sydney
An employee of the Korea Stock Exchange reacts in front of a screen showing the falling Korean benchmark stock index in Seoul, South Korea
Manufacturing activity slowed or contracted in Asia’s largest economies last month, reflecting stronger headwinds from the eurozone crisis and weaker growth in the US.
China and India recorded slower manufacturing growth for July, while Japan posted its worst performance since last year’s earthquake and tsunami. South Korea also saw its sharpest fall in exports this year.
“Asia is getting caught up in the European mess with trade finally starting to buckle,” said Frederic Neumann, regional economist at HSBC. “The latest data suggest there is much more pain to come on the export side.”
…
What’s to stop Draghi from punting if he sees fit, the same way as Bernanke punted?
Draghi Risks Market Wrath as Pressure for ECB Intervention Grows
By Jeff Black and Jana Randow - Aug 1, 2012 4:00 PM PT
Investors are looking for the European Central Bank President to make good on his promise to do whatever is needed to protect the euro, interpreted by most as a signal that the ECB will intervene in bond markets. Should Draghi fail to overcome the objections of Germany’s Bundesbank to such action, the disappointment could spark a selloff. He holds a press conference at 2:30 p.m. in Frankfurt.
“If Draghi just comes out with a do-nothing, markets are going to react extremely badly and the ECB will have a full- blown crisis on their hands,” said James Nixon, chief European economist at Societe Generale SA in London. “I can’t see what form of words Draghi can come up with that would replace concrete intervention.”
…