Bits Bucket for August 18, 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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News from Vancouver Housing Bubble
Residential Activity in the Second Quarter of 2012
Number of Sales – 8,132
Year/Year (%) – -18.8 (from 10,018 )
Number of New Listings – 19,085
Average Price ($) – 724,319
Year/Year (%) – -11.5 (from 818,721 )
(Vancouver Housing Market: Developments in 2012)
That sucker is going down.
“That sucker is going down.”
“But this ship can’t sink!” –Ismay
I know that I heard someone said Vancouver was different.
Looks like they’re running out of physical buyers. I guess there is a limited number of rich Asians willing to pay cash.
http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil107a-eng.htm
Median income in Vancouver is about 70K. Puts the median house price around 250K or so. Current median house price is around 650K.
So, yes, this sucker is going down, and is going down hard. It’s only a matter of when, not “if”.
This, BTW, was the breaking point (10X median income to median house price) in my area of S. FL. Median family income in this area was about 40K, and the median home price topped out at a little over 400K. That’s when all the cards came crashing down.
and is going down hard.
Well, if the PacNW US is any indication of how Canadian PacNW will go, down 20% isn’t in my opinion going down hard.
Lots of people not paying their mortgages, or hanging on by a thread. Most will fold. It just takes time, a long, long time.
“Median income in Vancouver is about 70K. Puts the median house price around 250K or so. Current median house price is around 650K.”
Try to get some of our favorite propagandists to grasp this fact for the US market. Nine times income for a median house is completely insane.
From Counterpunch DOT com - Delusions and Disappointments
Meet Barack Obama:
“At the highest level Mr. Obama codified, through both continuation of, and failure to prosecute, the worst of the Bush / Cheney administration’s war crimes, domestic crimes, civil intrusions and economic policies. When Mr. Obama entered office he had the opportunity to repudiate these crimes and restore the illusion that America has ever been a civilized nation. America’s global torture prisons have been moved out of sight but not out of fact. The wars in Afghanistan and Iraq remain illegal wars of aggression undertaken to boost the fortunes of multi-national oil companies and the slaughter-for-profit military industry. The war in Afghanistan has been expanded under Mr. Obama and the war in Iraq was only ended against his wishes by Bush era treaties. And U.S. foreign policy remains the preeminent force of repression and unjust order overseas.
Mr. Obama’s recently disclosed ‘kill lists’ suggest an unhinged monarch, fully divorced from legal accountability and history, carrying out vendettas against unproven enemies with fevered impunity (if he doesn’t have to show evidence, he doesn’t have to have evidence). With Americans now openly subject to murder at the whim of whoever occupies the Oval Office, the long, inglorious history of domestic power politics carried out through strategic assassination finds a home on our shores. (One need only recall the Bush / Cheney hilarity at putting Ted Kennedy and other prominent Democrats on lists of suspected terrorists used by airlines to imagine where this abuse of power can lead).
Mr. Obama’s signature achievement while in office, his ‘health care reform,’ the ACA (Affordable Care Act), is a Republican plan developed by the right-wing Heritage Foundation and first passed in Massachusetts by Mitt Romney. The plan forces citizens to purchase a defective product from private insurance companies who profit by denying health care to people who need it. The program’s ‘insurance exchanges’ leave individuals to select among inadequate policies to buy protection against future maladies of which they have no foreknowledge. Recourse for health care denied is appeal to under funded, understaffed state insurance commissions that have long histories shielding insurance companies from having to pay legitimate claims.
When Mr. Obama took office the nation was in the throes of an economic meltdown and financial collapse of bi-partisan origins. Mr. Obama rewarded the most culpable of the policy malefactors with top jobs covering up the mess that they had created. Larry Summers and Timothy Geithner set about rendering the right-wing fantasy of corrupt, incompetent government fact by stuffing the housing agencies full of bank detritus. The Federal Reserve set about restoring the fortunes of the sliver of Americans who own financial assets through several trillion dollars of monetary stimulus while adequate fiscal stimulus was deemed ‘unaffordable.’ Corrupt bankers were universally made whole while the rest of the economy was left to rot.
Early on Mr. Obama applied his own unique economic insight to argue that the explosion in unemployment in 2008 – 2009, coincident with the worst economic downturn in modern history, was due to ‘productivity gains,’ and that nothing could be done to help the unemployed. (Even if productivity gains had been behind the decline in employment, which wasn’t the case, Mr. Obama could have revived the nation’s public sphere—teachers, doctors, emergency responders, public works workers, etc. to put people to work, but he chose not to). After passing a tax-cut laden economic stimulus program Mr. Obama appointed the corporate ‘leaders’ responsible for several decades of jobs outsourcing to his ‘jobs’ council. Four years on fully twenty million Americans remain unemployed or underemployed, with no effort to help them in the works.
In his effort to save particular culpable bankers while leaving the banking system corrupt, fragile, predatory and dysfunctional, Mr. Obama spared the victims of banker malfeasance no inconvenience, misdirection, unnecessary effort or cost. As part of the bank ‘bailouts’ Treasury Secretary Timothy Geithner developed an entire program (HAMP– Home Affordable Modification Program) to intentionally dupe hundreds of thousands of homeowners facing foreclosure into wasting a year or more of their lives ‘negotiating’ with banks that had no intention of modifying mortgages. The result was to inflict economic, legal and moral harm onto already distressed citizens solely to benefit the banks. That Mr. Geithner could have accomplished the same goal by fiat without torturing the already victimized citizenry illustrates what utter contempt he and Mr. Obama have for the American people.
A short while later Mr. Obama ‘negotiated’ a mortgage settlement that gave the banks blanket retroactive immunity for illegally foreclosing on several million homeowners using fraudulent, forged and backdated documents in foreclosure proceedings. The deal, under which the banks paid a $25 billion ‘fine’ with other bailout funds, removed any pretense that the banks needed a legal right–past, present or future, to illicitly take homes from the citizenry at will. The hyped ‘investigation’ that was to follow into massive mortgage industry malfeasance is a poorly funded smokescreen with the twin goals of providing Mr. Obama with a faux-populist patina in an election year while preventing any real investigation from taking place.”
Very nice and damning article.
Very much looking forward to the ‘HBB status quo cheerleaders’ response.
Obama sucks because he is too Republican….. I agree.
But I’m not sure that convinces anyone to then vote Republican.
Then why not vote Romney and get exactly like Obama?
But you get to blame Reublicans.
Counterpunch is not a Republican oriented website.
We don’t agree with much of what they publish but agree with their support of a nationalized, single payer, health care system.
I concur with the goon squad. Medicare for all. Everybody in. Nobody out.
And let the private health insurance industry go down in flames.
Everybody in. Nobody out.
I’m not sure what that means. I favor everybody funding it, but I see no reason why people shouldn’t be able to buy additional health care outside of the system, if they so choose.
You make it sound like Mr. Obama runs everything all by his lonesome. How much of the stuff mentioned could go on at all without the consent of Congress?
Are you referring to the DEmocratic Congress under Nancy Pelosi and the Dufus from Arizona, Harry Reid, that took power in the last 2 Bush years and carried the Obama agenda for the first 2 years.
I know what the LEFT says, it was a Republican congress.
That, of course, is a lie. The Republicans took over in 2011.
Obama has carte blanche for 2 years and Bush got sandbagged for 2 years.
So, who? is really behind all the problems???
By the way,
I have a new term for OBAMA:
THE “UNDOCUMENTED” PRESIDENT. IT FITS.
Carte blanche?
They barely had a majority and certainly not the supermajority presented in popular myth.
They also had the publicly stated, no exceptions, no mercy, opposed to everything, lack of cooperation among the Repubs.
They also only had 2 years to undo almost 20 years of Republican mistakes.
As for the Counterpunch article:
DOW at 6600 in 2009, now sustained over 12,000
UE was at 10+, now under 8.5 sustained.
Are the CP facts correct? No, not really. It’s a lot of half truths. It also instantly loses it credibility with the “4 years” statement. 2012-2009 is not “4″.
Is Obama faultless? No, just less damaging than Bush.
Where ARE those $3 TRILLION WMDs?
Harry Reid represents Nevada. A Democrat socialist Mormon. (Not a Republican socialist Mormon)
“A Democrat socialist Mormon.”
Does that make him an oxymormon?
I had to re-read your reply PB! My lapse into dyslexia did not catch your additional “m” in that word the first time!
LOL!
How come the openly Republican posters on the HBB seem so retarded?
Just curious — not meant to be an ad hominem attack.
What happened to your anger toward the ‘demo-rats-?
They don’t post much here, or if they do, it’s not so “in your face…”.
I think you see more of that from people with boring jobs, who listen to angry radio all day and get all wound up by it. The liberal angry radio stations didn’t catch on, so you don’t see it so much from them.
The liberal angry radio stations didn’t catch on
We remember listening to Al Franken on Air America in 2004 and it was a snooze fest, his books are good but don’t translate into radio format.
Rush Limbaugh, regardless of whether one agrees with him, undeniably produces good radio…
Rush Limbaugh, regardless of whether one agrees with him, undeniably produces good radio…
I have listened to Limbaugh a couple of times, can’t stand him. Still have to say much much better than Hannity.
Michael Savage, that’s an interesting show. I listen to him once in a while if I am driving in the evening. Don’t like his politics, hate his belief that Isreal can do no wrong, but that man makes the show interesting by bringing poetry, literature, food, health, etc quite often.
Rush Limbaugh is excellent radio for those without critical thinking skills. But if you’re versed in reasoning and logic, he’s infuriating. Yould could use his show as a textbook on logical fallacies.
He used to be pretty amusing back in the early 90s, but most of the comedy has been replaced with rage.
Rush Limbaugh, regardless of whether one agrees with him, undeniably produces good radio ??
Depends on your definition of what “good” means….If good means ratings (money) then its good….Which prompts the question, who is it that listens to this garbage and considers it valuable…
This guy is no different then the “Shock Doc”….His personal shtick is to inflame and divide…Will see what the election tells us…Will see if the country will “reject” the Limbaughs and the like…If it does, and if it does in any significant way rather than a by the skin of the teeth win, then its a mandate….
The neocons, although kicking and screaming, maybe even violently, will be done…
He used to be pretty amusing back in the early 90s, but most of the comedy has been replaced with rage.
I agree. He had a great sense of timing and a clever way with words. Both are crucial for good radio.
These days? Let’s just say that Rushbo has lost his edge.
” Yould could use his show as a textbook on logical fallacies.”
Kind of like the fallacies of buy now or be priced out forever.
I dislike both parties, and think both are driving us in the wrong direction. I’m a RP supporter, and, in general, a libertarian. I can’t stand the Republican bible thumping morality, and I, in general, disagree with almost all their social policy. However, social policy doesn’t seem to matter much, I abstained from voting last time because I just couldn’t stomach either candidate, but, when BO was elected, I thought he could do some real good on social policy. Like decriminalizing MJ (and other drugs) and perhaps removing restrictions on gay marriage/etc (for the record, I’m married, and not gay, but I do think that gays should be allowed to marry as well).
He’s done exactly zip as far as wide reaching social change. I can’t think of one civil liberty that I have today that I didn’t have under the republicans. But, I do know, without a doubt, that BO wants to tax me more, and, he’s very likely to follow through on that given another term. So, I vote Republican because I hate taxes and, IMHO, that’s the most likely thing that a president will actually do (increase or decrease taxes).
If I thought for one minute that the Dems would get another term and really bring about some progressive social policy, I’d vote BO in a heartbeat. But, much like the Republicans and abortion, the Dems seem to talk “social liberty” and then totally forget about it when they get in office.
And no, before anyone snarks all over this, I’m not a pothead; I haven’t smoked MJ in years. But, it’s a HUGE issue for me; the government telling me what I can/can’t put in my body is a terrible infringement on our rights (IMHO) and, anyone who will honestly stand up and fight against it is going to be my candidate. The drug war is terribly costly (which also irks me to no end) and is a gross failure. That no president is willing to address it just shows how “the same” they really all are.
I agree with much of what you say although I think a push for a national health care system which the dems have tried to do is “good progressive social policy”…
SC,
I would agree with that, although, I’m not a huge fan of all the bureaucracy that’s surrounding the new medical legislation. You want socialized medicine, just remove age limits from Medicare. Done.. No need to go through all this craziness. Or, perhaps you do it in steps (keep reducing the Medicare eligibility age).
All I know, from my thankfully limited experience with medical billing, is that these people make Countrywide’s books look good. I’ve never, in my life, found another system that will send out a bill for 250K when the actual owed amount (by the customer) is 25 dollars (actual experience) and the actual total amount paid (my 25 dollars and insurance payments) was more in the 30K range. Where in the he(( did 250K come from? Just pull a number out of the air and see if they are stupid enough to pay it? Unfortunately, many people are taken in by this, my grandmother, in her later years, needed to give up all control of her finances because of medical billing. They would send her a bill, and she would write a check and pay it. She was of the generation that a bill was an obligation to be paid. Thing was, she was on Medicare, and the bills she was paying (1000’s of dollars) were either entirely or partially covered. She would pay 500 dollars and, because the Dr got payment, they would drop the billing to Medicare. It was/is such a scam it made me sick, particularly as they always (by definition) pray on the weak.
Health care, IMHO, is a basic human right, and should be treated as such. But it doesn’t require more bureaucrats or an entirely new system, just remove the age limit from Medicare, and “bang”, you’ve got socialized medicine. Also, putting the insurance companies out of business, would be a huge side benefit from this, how many lives are wasted toiling away at an insurance company trying to keep from paying bills, or keep from insuring people who are actually sick? I think that might be the only job on earth that provides less value to the country than mortgage brokers/RE agents.
You want socialized medicine, just remove age limits from Medicare.[...] Or, perhaps you do it in steps (keep reducing the Medicare eligibility age).
Reducing the age of eligibility gradually is a better way to go. The industry needs time to restructure, and doing it instantly would cause major shocks. But giving them a 20- or 30-year window in which to restructure would work great.
“Reducing the age of eligibility gradually is a better way to go.”
I agree.
“The industry needs time to restructure”
If, by this, you mean the health care industry, I also agree. If you mean the insurance industry, I disagree; they need to just go away. Healthcare (everything except elective procedures) and profit should not mix; maximizing profit (what we expect a corporation to do) means minimizing the amount of care provided to sick people. The private health insurance industry just needs to shrivel up and blow away.
And, with a system like this, there are really other things that should be done too. We need to encourage more people to become doctors. There should be scholarships available to everyone who wants them (and has the requisite scores/intelligence) that allows them to become a Dr on the government dime. In return, much like ROTC, you have to give a certain number of “years of service”, IE, accept a lower salary and work wherever the government needs you for a few years.
There are certain things that are just not compatible, IMHO, heath care and profit are some good examples. Another good example is national defense, that’s a function that cannot have a profit motive or else you will suddenly find we are in endless wars (which, sadly, is probably partially to blame already).
Marriage laws are state laws. The president and congress can talk about it, but can’t do much else.
Not true. It is _currently_ a state-law matter, but there is no fundamental reason that it must remain so.
IANAL, but my understanding is that Federal law trumps state law where the two overlap; they could pass a federal marriage law if they wanted to do so.
What prevents them from doing so?
I predict that IANAL will not catch on as an acronym.
Overtaxed I agree. Ron Paul has a much better plan than the establishment in regards to fiscal cliff and it involves steeper spending cuts while preserving the Bush tax cuts. I am a registered Libertarian but I think Republicans are embarrassing themselves by crying about defense cuts starting January. The fact is less government spending = smaller government. The mainstream Republicans are proving they are for spending programs . they suck. They act like Democrats.
I knew all along that the social conservative Republicans are NOT for small government. This, sadly includes Ron Paul only because he is not pro choice (that means everyone who is pregnant would be spied on to be sure she carried her baby to term - POLICE STATE!). Now most Republicans are regarding defense spending as a jobs program. They are worried about jobs being cut when the defense spending goes down. This is a Democrat Party trait and should be embarrassing for the true Republicans (Eisenhower, Taft, Goldwater Republicans).
Eventually the social conservative side of the Republican Party will be too threatening for most Americans anyway since atheism and agnosticism is growing at a fast clip in the U.S. Defense spending is going to be the only difference between Republicans and Democrats?
I predict libertarianism will grow faster (that includes voting Libertarian Party members and people who live the libertarian lifestyle and do not vote) while the Republican Party and Democrat party will merge into one party.
Since when does free speech exist in Russia, or anywhere else on the planet, for that matter?
I wish anyone in Russia who wants to change their tzarist tradition, which apparently carried on uninterrupted through the reigns of Soviet leaders Lenin, Stalin, Krushchev, Brezhnev, Gorbachev, and onward into the Soviet Union’s afterlife, the best of luck!
Band member’s husband condemns Xxxxx Xxxx prison sentences
By Laura Smith-Spark, CNN
updated 6:57 AM EDT, Sat August 18, 2012
STORY HIGHLIGHTS
(CNN) — The husband of one of the members of Russian punk rock band Xxxxx Xxxx imprisoned for hooliganism in Moscow is leading a chorus of condemnation after a conviction decried as an attack on free speech.
…
Soon coming to a concert near you!
Xxxxx Xxxx trial gives Russia ‘the image of a medieval dictatorship’
Even some of Putin’s supporters are aghast at the penal term handed out to the feminist punks. Amid a global storm of protest, signs have emerged that they might be released early – but a deep national rift remains
Miriam Elder
guardian.co.uk, Saturday 18 August 2012 12.58 EDT
…
I’d like to see Putin incarcerated, and his billion dollar mansion razed.
You list 75 years of repressive communist government dictators and claim it is in the tradition of a former Orthodox Christian country under the Tsars. Complete idiocy.
The “people’ never had a voice under communism.
AS for your foolish assertion that free speech doesn’t exist anywhere else, you are also misguided.
I would say you can find more truth from PRAVDA these days then American propaganda rags. Russia Today has provided more disclosures of the take-over of the US by BAnksters than CBS, NBC, MSNBC, ABC, NYT, or any of the other rags masquerading as news.
Try using certain words today that are branded as ‘verboten” here in the so-called FREE speech country of America. If they may be considered ‘imflammatory”, you could get picked up.
Insighting a riot? Joking about a bomb in an airport? we knew it was a joke. TSA agents can’t detect any humor. They will arrest you for even muttering anything “suspicious”.
Arrest and detention for “threats”? Violations of “gay rights” for preaching against homosexuality?
Where is the “FREE SPEECH” you say we have??
I guess you mean the guys who go around defacing public and private property with paint cans and the LEFT defends them as “expressing urban art”.
Most other countries don’t tolerate vandalism, which is what it is.
“You list 75 years of repressive communist government dictators and claim it is in the tradition of a former Orthodox Christian country under the Tsars. Complete idiocy.”
You badly misrepresented my point, which was that the Russian tradition of governance by dictatorship, whether theocratic or atheocratic in flavor, continued unabated through the Soviet Era. That’s all.
But feel free to concoct a strawman and accuse me of idiocy, as though it was my idea. Such practices are on the increase here.
The name of the band is Pussy Riot, and, yes, I can say their name on the air. One of our station’s other deejays featured them last night.
I figured it was on the air, but wasn’t sure if it would get past the HBB censors.
they had to use that name because this one was taken:
http://www.youtube.com/watch?v=UEMbTlX99mk
The irony of Moscow citing religious indignation as the reason for the arrest and incarceration does not escape….
Yeah. Can you offend an opiate?
I’m guessing this GSE perestroika will somehow position the Treasury Department to force cramdowns over DeMarco’s and Republican legislators’ objections, though I don’t claim to know the legal details.
And if the move truly is designed to protect (insure) foreign creditors against loss, who absorbs the insurance costs?
Treasury move to entrench Fannie, Freddie
Fannie, Freddie portfolios to be cut by 15% a year
August 17, 2012
Ronald D. Orol, MarketWatch
WASHINGTON (MarketWatch) — The Treasury Department’s announcement that it is changing the terms of its four-year-old financial backing for Fannie Mae and Freddie Mac is a boon for mortgage originators, homebuilders and Treasury bonds as it delays reform of the two giant government-seized firms, experts said Friday.
…
“We see this as positive for housing as it ensures that Fannie and Freddie will remain in business,” said Jaret Seiberg, analyst at Guggenheim Securities in Washington. “Absent Fannie and Freddie, we believe housing finance will become more expensive and less available. That is why this is good news for mortgage originators and homebuilders.”
Mark A. Calabria, director of financial regulation studies at the Cato Institute in Washington, said the new structure makes it harder for a future administrator to place the two mortgage giants into receivership, which would force debt holders such as mortgage-backed securities holders and other investors to take losses.
Fannie and Freddie were placed into government conservatorship in September 2008 at the height of the financial crisis.
He added that this change in support is part of a broader effort by Treasury Secretary Timothy Geithner to ensure that China continues to buy both U.S. mortgage-backed securities and U.S. Treasury bonds.
“To the Treasury Department, this isn’t just about Fannie and Freddie,” he said. “Losses imposed on MBS debt holders would raise concerns by the Chinese and they would have to be compensated more to buy Treasury bonds.”
“There is a perception that if Fannie and Freddie went into receivership then the credibility of the U.S. government as a whole would be brought into question,” he added.
If you don’t question the credibility of our government, you’re naieve.
The distortion all begins with the FED.
Snap it’s neck and the rebirth can begin.
And go back to the pre-Fed times… like the 1800s, when there were 7 major recessions and depressions that consumed more than half of the century?
Things were far from hunky dory pre-Fed.
It would be Armageddon if the U.S. political trajectory veered off the path you think is best.
Having no Fed is bad for politicians. This is why we will have a Fed. The Fed can be a scapegoat for crappy policy.
If we had no Fed, the politicians would be in charge of monetary policy. I can’t help but think that this would be a disaster.
I think we need a Fed, but we need to audit its books, occasionally, and see what it’s doing.
It’s getting ever harder to distinguish between “the Fed” and politicians.
Higher future inflation is a likely consequence…
“Things were far from hunky dory pre-Fed.”
One day you will find yourself on the losing end of one of the endless pump and dump cycles, then you can come back and tell us how we need to keep the system.
A huge shell game that could drag us into a pacific war.
There will be no more wars with 1st world countries. We will have “conflicts” (their words, not mine) with little 3rd world rocks, and, of course, will live under the specter of terrorism forever. But a major war with another superpower?
Not gonna happen, that option was wiped off the table August 6th, 1945 when a city disappeared from the map. The detonation of that weapon (and the one that followed) has ushered in an era of peace that’s never been matched in recorded history. The policy of MAD, for all the jokes, has been a resounding success.
IMHO, it’s our unwillingness to use these weapons against 3rd world countries that puts them into a situation where they are willing to attack us. But, if Russia/China woke up tomorrow and started lobbing nukes our way, they know, without a shadow of a doubt, that all of them and all of us will be dead within a day or so.
Death Tolls (US):
WWI - 116K
WWII - 405K (ended with a nuclear weapon)
Korean War - 36K
Vietnam - 58K
War on Terror - 6K
Nuclear weapons, as horrible as they are, have brought about a peace that our ancestors never could have imagined.
That’s a really bizarre use of “statistics”. There have been wars all over the world on a smaller scale since 1945.
Comparing American deaths with US and England and USSR against Germany, Italy and Japan, with Korea? and Vietnam? isn’t really a “fair” comparison.
All these conflicts have been about war-making money interests. You can’t waste very much ordinance (($$$) if you just lob a single rocket.
AS for “security”, I am just finishing the Book “Red Star Rogue”, that came out in 2005. It’s about a rouge Russian submarine that DID attempt to NUKE the Hawaiian Islands in 1968.
The attempt failed due to fail-safe devices the US had provided to Russia and the submarine sank near French Frigate Shoals.
That is when Richard Nixon started promoting the MISSILE DEFENSE initiatives while Vietnam was on-going. A lot of the public thought this was crazy, but were kept fully uninformed about the blast that sank the soviet sub.
Rogue elements in the Kremlin were considered responsible. China was just emerging as a major power and was a threat to USSR. It is speculated they (USSR) tried to create a conflict, blame it on the Chinese and get the 2 of us to fight it out, thereby eliminating China as the leader of “world communism”.
The world is much more unstable than you suppose. Balance of Power only works when you have sane people in control. Rouge agents exist everywhere, and some just like destruction for the sake of destruction.
Yep.
And those rogue agents can be real pills sometimes, too.
China gets $400B a year of our $600B a year international trade imbalance. What are they going to do with that money?
Are they going to use it to buy more mountains of iron ore to pile up and sit unused?
Are they going to use it to buy more houses in India and Canada?
Are they going to take it to the foreign exchange markets and sell those dollars, causing the exchange rates to adjust? Increase the prices we pay for their goods, and make our goods cheaper there?
I guess they could use the money to construct empty buildings.
What Happens If China Comes In for a Hard Landing?
Published: Thursday, 16 Aug 2012 | 2:15 PM ET
By: Jeff Cox
CNBC.com Senior Writer
Recent signs that China’s economic slowdown is worsening has fueled fears a so-called hard landing. But even if that happens, many investors believe the world’s second-largest economy has a big-enough safety net to contain the damage.
Decelerating growth in China would have substantial effects around the global economy, which is reeling from the European debt crisis and the lingering fears that the U.S. is speeding toward the edge of a fiscal cliff.
…
Hedge fund titan Jim Chanos, at Kynikos Associates, is perhaps the most vocal naysayer on China in the investment community. Chanos cites vacant buildings throughout the nation as evidence that China overbuilt for a stampede that never came.
…
I’m pretty familiar with the Democrat position on GSE writedowns (case in point posted below), but find the Republican position generally obscure. If anyone has better luck finding such information, please post, as I always like to consider two sides to any debate.
Darren O’Connor: Fire the Federal Housing Finance Agency chief
Posted: 08/11/2012 01:00:00 AM MDT
Ed DeMarco has led the Federal Housing Finance Agency since before Obama took office, but Republicans have refused to allow a vote on a replacement.
DeMarco continues to refuse to take action to lower existing mortgages to save American’s homes, despite the fact his own agency, the Federal Reserve, and the Treasury Secretary have all studied this action and found it would save money for the lenders and the homes for the people who are struggling in them.
Economists believe housing debt is one of the biggest, if not the largest strain on our economy, and DeMarco (and the Republicans) have effectively shut down one of the fastest ways to bring relief to Americans at all economic levels.
It is time for President Obama to perform a recess appointment replacing DeMarco and stimulating the economy, showing his potential voters that he is serious about doing whatever he can, despite the Republican stalling tactics he rarely fails to mention.
If the mortgages are not re-negotiated, then that means more defaults.
With major banks basically getting free money from the Fed, they can theoretical cover the losses and wait it out.
The local economies however…
“…while continuing to support the necessary process of repair and recovery in the housing market…”
Could one of the resident experts in Beltway-speak kindly translate?
Bloomberg News
U.S. Revises Payment Terms for Fannie Mae, Freddie Mac
By Cheyenne Hopkins and Clea Benson on August 17, 2012
Companies Mentioned
FNMA
Federal National Mortgage Association
$0.24 USD
-0.06
-25.0%
FMCC
Federal Home Loan Mortgage Corp
$0.23 USD
-0.07
-30.43%
The U.S. Treasury Department is altering how Fannie Mae (FNMA) and Freddie Mac pay taxpayers for the government’s stake in the firms, ending a system that sometimes required them to spend more on dividends than they earned.
The mortgage companies, which have drawn $190 billion in aid and paid $46 billion in dividends since being taken over by U.S. regulators in 2008, will turn over any quarterly profits to the Treasury, the agency said today. The change replaces a requirement that the companies pay quarterly dividends of 10 percent on the government’s nearly 80 percent stake.
Fannie Mae, based in Washington, and Freddie Mac (FMCC) of McLean, Virginia, also will be required to shrink their investments in mortgages and mortgage-backed securities by 15 percent annually, up from 10 percent, the Treasury said.
“We are taking the next step toward responsibly winding down Fannie Mae and Freddie Mac, while continuing to support the necessary process of repair and recovery in the housing market,” Michael Stegman, counselor to the secretary of the Treasury for housing finance policy, said in the statement.
…
Republicans criticize changes to bailout of Fannie Mae and Freddie Mac
By Peter Schroeder - 08/17/12 02:54 PM ET
Congressional Republicans are blasting the White House’s decision to rework the government bailout of housing giants Fannie Mae and Freddie Mac.
The Treasury Department’s decision to modify some terms of the nearly four-year federal lifeline is drawing calls from GOP lawmakers to overhaul the housing system once and for all. They chastised the White House for taking these steps instead.
Rep. Scott Garrett (R-N.J.) called the changes a “slap in the face” to taxpayers and charged the administration with “kicking the can down the road” on reforming the housing system with the adjustments.
“Instead of devoting time and energy towards prolonging bailouts, the Obama Administration should work with Congress to wind these companies down and create a new and sustainable housing finance system where taxpayers are not at risk,” he said in a statement.
… House Financial Services Committee Chairman Spencer Bachus (R-Ala.) said Friday’s changes simply make it less likely the government will ever recoup its bailout funds, all the while cementing the existence of Fannie and Freddie in the housing market no matter their woes.
“Today’s announcement makes it less likely that taxpayers will ever be paid back for their $200 billion bailout and blunts efforts to reform Fannie and Freddie by fostering the false impression they are healthy institutions that should be restored to their previous status,” he said.
…
The system is broken. Taxpayers will get the shaft as usual so the big boys can party on.
I’m trying to figure out when the taxpayer is going to start having to make a serious dent in all this borrowed money? At this point it seems the politicians keep pretending its not there. all they have done is got interest rates down so they can borrow more cheaply.
does there ever come a point where taxes become so high it is favorable to go back to bartering?
Theoretically, there are an infinite number of future generations to plunder.
Could you live without fiat?
I’d sure like to try!
It would mean paying off the debt of previous generations. Right or wrong, I’d rather just take a little for myself and kick the debt down to the next generations. Seems like it’s expected.
Jim Rogers: It’s Going To Get Really “Bad After The Next Election”
By Terry Weiss, Money Morning
In a riveting interview on CNBC, legendary investor Jim Rogers warned Americans to prepare for “Financial Armageddon,” saying he fully expects the economy to implode after the U.S. election.
Rogers, who for years has been an outspoken critic of the Feds policies of “Quantitative Easing,” says the world is “drowning in too much debt.” He put the blame squarely on U.S. and European governments for abusing their “license to print money.” In the U.S. alone, the national debt has surged to nearly $16 trillion, that’s more than $50,000 for every American man, woman and child.
“[They] need to stop spending money they don’t have,” Rogers said. “The solution to too much debt is not more debt… What would make me very excited is if a few people [in the government] went bankrupt…” Rogers added.
Rogers also charged Obama and German Chancellor Angela Merkel with promoting dangerous policies that create the illusion the economy is stable… but are really only intended to buy time before their upcoming elections.
“Mrs. Merkle has an election next year,” Rogers said. “Mr. Obama has an election in November. The Americans and the Germans - they want to do everything they can to hold the world up until after the next election.”
“It’s going to be bad after the next election.” In a newly released documentary that went viral last month, a team of influential economic experts say they have discovered a “frightening pattern” they believe points to a massive economic catastrophe unlike anything ever seen in the history of the world.
…
In a newly released documentary that went viral last month
For those who want to skip the scary music documentary, the long transcript of this documentary can be found here:
http://moneymappress.com/visitors/
It’s a long diatribe which distills the panic talk of today, much of it about peak oil and the usual economic collapse. Many good grapsh. Cutting to the chase, they predict massive inflation, such that
A new survey shows that it could soon take a $150,000-a-year household income for a family to afford basic living expenses, save some money, and have a little left over for an occasional night out.
Then they try to sell you a “Conquer the Pyramid” package for $334. I dunno, if everything is really going to as badly as the morbid music in that documentary implies, then their books aren’t going to do me much good. I’m better off with the canned peas and AK-47. And a mortgage with a low fixed interest rate.
‘Then they try to sell you a “Conquer the Pyramid” package for $334.’
I was wondering what the hook was to their diatribe. Thanks for sparing me the need to view their video.
“I was wondering what the hook was to their diatribe. Thanks for sparing me the need to view their video.”
+1 More stagecoach snake oil.
Cue up the R.E.M….
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
http://www.halfhill.com/inflation.html
You can calculate it yourself.
50K today requires 81k in 20 years… at the lowest rate of inflation, i.e. the bullcrap CPI.
150k in 20 years means 91k in today’s money.
If you need 91k for your family of 4, consider yourself lucky to have it. You live in the 20% income percentile.
And what was the name of this viral documentary?
I saw part of the tape that went viral and it’s basically saying that
PEAK OIL has occurred , the economy is a Pyramid scheme built on infinite expansion ,which isn’t sustainable ,and it’s going to crash and oil won’t be cheap by 2014 . They claim in the tape that the oil producers are lying about their supply and that it is less than they claim . Anyway ,everything is a Pyramid scheme that isn’t sustainable ,especially since the scheme was dependent on oil energy to sustain it ,according to these Experts .
I have problems believing Experts these days ,but who knows ,these guys might be telling the truth ,or maybe not .
“…PEAK OIL…”
Rogers is still banging on that drum?
Recent IEM 2012 US Presidential Election Winner Takes All Market prices suggest an Obama victory in November has become more likely in the week following the Ryan Veep candidacy announcement. With all the money they have backing them up, I’m frankly surprised the RNC doesn’t buy enough Romney futures to change the IEM prices in his favor. If the Libor can lie, then why not the IEM futures prices?
Where’s Romney’s Ryan ‘bounce’? Polls give weak report
Paul Ryan’s presence on the GOP presidential ticket had given Mitt Romney a slight boost in the polls – less than Sarah Palin or Joe Biden did for John McCain and Barack Obama four years ago. But Ryan has put new spring in Romney’s step, and he’s helped loosen Republican wallets.
By Brad Knickerbocker, Staff writer / August 18, 2012
…
Builder confidence booming more quickly than houses
Home builder sentiment in August reached the highest level in more than five years. Yet, housing starts for single-family homes, though certainly on the mend, hasn’t been nearly as strong. One possible explanation is that more builders have gone out of business, so the remaining firms in the business have an improving market share; it can also be that some of these builders are involved in the very real boom in apartment building. Or it could just be a case of irrational exuberance by the builders after several tough years.
Or it could be that they are having a hard time finding land that is cheap enough.
I know this is a disputed view, but we will see how the next year plays out. I expect WEAK housing construction until prices rise further.
You see….. here you slip another one of your misrepresentations under the door. Housing prices are falling so in your world, construction is going to be “weak” for a very very long time. But then again, you got exposed on your lies relating to construction.
The truth is you know nothing about construction and you’re lying about housing because you’re being paid to lie about housing.
Construction is going to be weak until prices rise because it is not economically feasible to build at today’s prices.
If it were, THEY WOULD BE BUILDING LIKE CRAZY to undercut the market and take advantage of the multiple bid situations.
Pimp,
That is precisely what builders are doing. Undercutting the resale market.
Why are you lying about this?
Wait until the finished lots have been exhausted.
Most developers are just smart enough to be dangerous.
Aug. 17, 2012, 1:52 a.m. EDT
China’s softening yuan could block rate cuts
By Chris Oliver, MarketWatch
HONG KONG (MarketWatch) — China might not be able to cut interest rates if the yuan weakens further, according to Moody’s, which says the end of the strong Chinese currency era could limit Beijing’s policy actions.
Markets are coming around to the view that the Chinese currency could now be near its fair value — instead of moderately undervalued, as maintained by the International Monetary Fund — according to Moody’s analyst Alaistair Chan.
Chan said that while an overvalued yuan was once seen as highly unlikely, this possibility is now being priced into the futures’ markets.
Recent data showing that China is experiencing capital outflows as its economy slows could mean an important shift is taking place, he said, noting that the yuan’s long upward march against the dollar appears to have ended earlier this year.
“There is growing evidence that the yuan is fairly valued against both the dollar and a basket of major currencies. As such, continued yuan appreciation is no longer a one-way bet, and there is the possibility of a sharp yuan depreciation in the event of a global financial crisis,” Chan said.
Any efforts by China to lower interest rates could trigger further capital outflows, undermining efforts to rekindle economic activity.
…
CREDIT MARKETS
Updated August 17, 2012, 4:04 p.m. ET
Buyers Find Reason to Purchase Treasurys
By MIN ZENG
It was a bittersweet tale for the U.S. Treasury bond market: Bond prices strengthened Friday yet still logged a fourth straight weekly loss.
The four-week rise in the benchmark 10-year note’s yield, which moves inversely to its price, was the longest since December 2010.
The flight out of the major safe-haven market signaled that fears over the global economic outlook have receded in recent weeks. As consumer sentiment brightened, U.S. stocks posted the longest winning streak since January 2011. Yet in a tentative sign that the selloff might be overdone, buyers returned Friday, when the yield trading near a three-month peak brought in fresh buyers.
“The market has been beaten on for weeks, and the sellers look tired and seem to be waiting for better levels to begin selling again,” said Michael Franzese, head of Treasury trading at Wunderlich Securities in New York.
In late-afternoon New York trading, the benchmark 10-year note rose 6/32 in price to yield 1.817%. The 30-year bond was 13/32 higher to yield 2.936%.
The yield has climbed by about 0.36 percentage point for the past four weeks, sharply higher than a record low of 1.379% set on July 25.
The 10-year note has given up most of this year’s price gain following the recent selloff as the yield now trades slightly below the 1.866% at the end of 2011.
Over the past weeks, investors have ploughed money into stocks as sentiment has swung away from the gloom, boosted by some better-than-forecast U.S. data and hopes that the European Central Bank would roll out measures in September to combat the debt crisis.
…
If you fully funded your asset allocation in Precious metals, T-Bills look darn good. I would not go further than two year notes in any of my new treasury purchases.
In a sincere effort to clear up a never-ending HBB dispute, I went to Housing Vacancies and Homeownership (CPS/HVS)
Table 4. Estimates of the Housing Inventory [xls - 45k], where I found the following rough breakdown:
All housing units 114,200
Vacant 18,518
Seasonal Vacant 4,493
Since “Seasonal Vacant” sounds like a variety of “Vacant,” I took the liberty of adding these to get 23,011 thousand vacant homes overall. Not sure exactly what this number means, or where the other 2M homes which one of our more illustrious posters often mentions (as part of his 25M vacant figure) could be found. Perhaps these are new construction which were never sold, and hence not counted by Census?
What dispute? One poster says something but won’t cite his source. He claims to have posted his source many times, but no one else remembers where it comes from and he refuses to repost. I consider it a fact at about the same level as the fairies that allegedly live in the garden of the house that sfrenter is hoping to buy are a fact. One person sincerely believes it to be true but no one else has any reason to.
Of course you can’t seem to remember. You’ re to busy pimping and backpedalling…. just like you’re doing now. With 25 million excess empty houses, I’d be backpedalling too if I were you.
And Stucco…. thank you for posting the spreadsheet. Job well done.
Maybe you could just post a link to your data one more time? It would be less trouble than shouting down the unbelievers.
Do you find it curious (as I do) that the Census department’s “vacant homes” figure has remained stuck in the 18M-19M range, even as huge numbers of people have lost their homes during the Great Recession, and many of those homes have been “snapped up” buy investors?
My guess would be that unoccupied investor-owned properties are part of the undercount, but that is merely a guess…
So, people that lost their houses… where did they go?
Hint, they are now renting houses that were bought by those investors.
The rate of new household formation slowed to 1/3rd that of the demographic normal, but did not reverse into true negative household formation.
Building dropped to 500K and household formation fell to a low of 350K, and the difference is the number of houses that burn down, are destroyed by other disaster, or are just torn down for being too old and ill maintained. 150K-200K a year is the normal removal rate.
So, the basic math says the number of vacant houses should be “stuck”… at least from 2008-2010. In 2011 household formation returned to 1 million but construction is down in the 600-700K range. Assuming continued destruction of 200K or so houses a year, then we should be eating into the… 5, 7, 9 million excess empty houses at a rate of about half a million a year.
“Hint, they are now renting houses that were bought by those investors.”
Your bean counting is way off, as it doesn’t factor in (1) people who used to live in U.S. housing who left the country; (2) people who used to live in U.S. housing who doubled up; (3) households of people who were raising families a few years ago who downsized to retirement-sized housing not replaced by new household formation, thanks to debt-strapped, jobless recent college graduates who can’t afford to marry and settle down; (4) households that doubled up across generations in order to be able to stay housed.
Oops — (2) should have read “people who used to live in U.S. housing who are now homeless.”
Time for some coffee…
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.
…
Since the census gets its base numbers from sending surveys to actual addresses and if nothing is returned it follows up by sending a human being to the location to find the people living there, if any, I doubt you are correct. I don’t know the exact technique they use to do updates in the intercensus year follow ups, but we are pretty close to a real census year.
It would be interesting to see a statistic detailing how many of those 25 million vacant houses are in habitable condition, or at least in “fixer upper” condition, and how many are just wrecks that need to be bulldozed, and therefore can’t reasonably be counted as inventory. Think Detroit or Cleveland.
“Your bean counting is way off, as it doesn’t factor in (1) people who used to live in U.S. housing who left the country; ”
Wrong. Showed up in reduced household formation numbers.
“(2) people who used to live in U.S. housing who doubled up;”
Wrong, showed up in reduced house3hold formation numbers.
“(3) households of people who were raising families a few years ago who downsized to retirement-sized housing not replaced by new household formation, thanks to debt-strapped, jobless recent college graduates who can’t afford to marry and settle down; ”
What???
Demographically, we should have been forming 1 million households a year. We were increasing the number of households by only 350K.
All your “cases” are included in that number of households.
“(4) households that doubled up across generations in order to be able to stay housed.”
Again, shows up as reduced household formation.
Household formation is the net change in the number of households and is the difference between households created and destroyed.
All your cases are “in there”.
You’re lying Darrell.
Why?
Darrell is correct.
Darrell is a liar…. and so are you. You’re a liar.
Darrell is correct about those cases PBear mentioned already being reflected in the numbers.
But there do appear to be at least 18.5 million vacant houses, although I’m a little dubious about including all seasonally vacant houses in there. So say maybe 20 million total. Which is awfully close to RAL’s number.
And I do agree with polly’s point about the many useless houses in Detroit eg. Eventually those houses will be demolished or will disintegrate into ‘ruins’, which is what happens during a major realignment of the economy.
If you look at the Excel Spreadsheet, you have the following numbers:
A: Vacant = 18,518
B: Year Round Vacant = 14,025
i: For Rent = 3,766
ii: For sale only = 1,595
iii: Rented or Sold, awaiting occupancy = 1,052
iv: Held off market = 7,612
a: For occasional use = 2,413
b: Temporarily occupied by persons with residence elsewhere = 1,271
c: For other reasons = 3,928
C: Seasonally Vacant = 4,493
Now, for the algebraic equations:
iv = a + b + c : 2,413+1,271+3,928=7,612
B = i + ii + iii+ iv : 7,612+1,052+1,595+3,766=14,025
AND
A = B+C : 18,518 = 14,025+4,493
In other words, Seasonal Vacant is included in the 18.5 million.
Now, to RAL’s comment that all of this is excess empty homes that need to be sold to third parties before we get back to “normal”. That’s complete BS.
At NO time in the last 45 years has vacant housing stock been less than 8.3% of the total (1978). That would be 11 million homes based on today’s number of housing units (132.7 million).
The data:
http://www.census.gov/hhes/www/housing/hvs/historic/files/histtab7.xls
So, 18.5-11=7.5 million excess…at most.
Starting in 1986, the number has never been less than 10%, or 13.27 million on our current base of 132.7 million, which would be an excess of about 5.25 million.
5.25 to 7.5 million is not 25 million.
But then you need to see where that excess is located. As I showed yesterday, California’s vacant rate in 2010 was 8%, while Florida’s was over 17%.
Those two markets are far different with respect to supply/demand dynamics. The insane thing is that last I checked, Florida was building more homes than California (on a nominal basis).
And you’re lying.
Why are you lying?
When the census came to my current abode I sent in the form as vacant. A few months later a census worker appeared on the doorstep - I guess to gage long term vacancy. By then I had moved in.
There was a line for vacant awaiting sale and a line for vacant awaiting rental but no line for “being remodeled so the owner can move in”. So who knows. I guess I represent part of the shadow inventory as I’ve had one unit or another (about 6%) sitting empty for remodeling most of the last 6 years. Mostly my current abode that I was fixing to my specifications after 20 + yrs of deferred maintenance. It’s nice that I can afford this as I don’t have the energy level of my younger days.
As a PS - for the units I have available for rental - the vacancy has been the lowest in decades.
Yeah, I see the buyers becoming liars as we move through another step in the unwinding of the mother of all bubbles. In all my years of lurking and posting on this site, I have never seen the amount of statistic massaging and outright lies being posted to support rising prices.
Personal financial interest is a powerful emotional motivator.
“I have never seen the amount of statistic massaging and outright lies being posted to support rising prices.”
Oh no, it was much like this back in 2006, when the more honest posters were predicting massive real estate price collapse ahead, while the shills were saying we didn’t know what we are talking about.
It’s a lot like 2006 again right now, which makes me think we are on the brink of the next major leg down.
“Personal financial interest is a powerful emotional motivator.”
I think even more powerful is the desire to prove, or at least believe that “I am NOT a fool!”
Data massaging?
Data massaging is quoting the US Census, which shows 18.5 million, calling it 25 million, and then saying that the number should be 0, so we have overshot by 25 million.
Data posting is quoting the US Census at 18.5 million, calling it 18.5 million, and comparing it to historic averages to see how far out of whack we are, concluding the number is between 5.25 million and 7.5 million.
Where is the lie in that?
Overstating the vacant housing number by ~30%?
Or overstating the excess by 300-400%?
“Oh no, it was much like this back in 2006, when the more honest posters were predicting massive real estate price collapse ahead, while the shills were saying we didn’t know what we are talking about.”
And I was one of those posters predicting collapse.
“Personal financial interest is a powerful emotional motivator.”
If anyone thinks that posting on this board will move the market, they are a fool.
This board is for sharing information and differing perspectives.
Take your own advice pimp.
“Where is the lie in that?”
No matter how you box it up, you can not escape the fact that houses are STILL too expensive when compared to median incomes. Without ZIRP and FHA you would not be able to stretch the historical ratios, therefore any appreciation at this point is artificial and will result in millions of newly minted underwater borrowers.
In science, if you can’t reproduce it, then it’s bullcrap and too bad for you.
“In science…if you can’t reproduce it, then it’s bullcrap and too bad for you.”
There is an actual number out there (e.g. number of vacant homes), then there are observations used to estimate it. A statistical estimate reflects both the quality of the observations, and the way they are used in estimation. The actual value exists independent of whether anyone attempts to estimate it, or whether the estimates are accurate or reproducible.
Whether those in charge of estimation produce and report systematically biased figures depends on their motivations. For some extreme cases, consider the financial reporting by Enron or the GSEs before their outright collapses.
As to the reported 18.5M estimate of U.S. vacant homes, I have no way to disprove it. I just find it highly curious that this number has remained so amazingly stable over five years of drastic upheaval in the U.S. housing market. And history has provided plenty of examples where political or strategic factors led to deliberate statistical misreporting.
“I just find it highly curious that this number has remained so amazingly stable over five years of drastic upheaval in the U.S. housing market.”
This number would only rise if there were more homes built than households formed and houses condemned/destroyed.
The condemned/destroyed number is estimated to be approximately 400k per year (less than 0.5% of the total housing supply each year).
And household formation has been quite low (less than 500k until 2011).
And new construction has been what, 600-700k per year?
The number should have been pretty stable.
It is worth noting that the number fell by 500k, which is consistent with low new construction, but stronger household formation in 2011 than 2009 and 2010.
And household formation is at WW2 lows and housing demand at 15 year lows.
Pimp….. Why are you misrepresenting these two facts?
But, the claim is not 25 million empty houses. His claim is 25 million EXCESS empty houses.
There is always going to be some level of vacancy. We could argue as to whether the “normal” rate is 5%, 8% or 10%. Today’s 14% is clearly above normal, but how much of the vacancy is “excess”?
And there will always be some people that own vacation homes. My father, for example, owns a cabin in Michigan that he uses a couple months in the spring and a couple months in the fall for fishing and hunting, while spending the ice and bug (winter and summer) in SoCal. This cabin in the woods, while seasonally vacant is not “excess” vacant.
The source of the 25 million number is quite simple. It is the total number of housing units built in the 16 years between 1993 and 2008… 16 years that the asserter of 25 million excess empty houses says is 15 years of overbuilding. And I guess we’re to assume that all of those houses, every single one of them, is excess and vacant.
If we built 25 million houses over 16 years, then there are clearly 25 million, excess empty houses,.
HOW that means 6 years, of 1 million new households a year to fill those “25 million, excess, empty houses”, I have no clue.
“His claim is 25 million EXCESS empty houses.”
Let’s agree that an empty house is an EXCESS house.
Next…
Also, my rule of thumb in life is just accept that the bad news is much worse and good news is not so good.
NO.
My dad’s fishing/hunting cabin in the woods of Michigan is an empty house (this time of year, but won’t be empty for Sept-Nov) but is NOT an excess house.
The number of EXCESS empty houses is the difference between normal level of vacancy, and the elevated level of vacancy of building 5, 7, or maybe 9 million too many houses.
There are always going to be some empty housing units… those are not excess. The excess is the amount above normal.
Meriam Webster dot com.
Excess: the state or an instance of surpassing usual, proper, or specified limits.
If there is usually 10% vacancy, and we’re at 14% vacancy, then the EXCESS is 4% not 14%.
YES.
Your fathers empty shanty in the middle of no where is EXCESS because it is empty and will be liquidated as a result of being EMPTY.
And the fact is that 25 MILLION excess empty houses are an all time record high.
Combine that fact with Housing Demand at 15 year lows and you have falling housing prices.
Why else are housing prices falling? Cratering demand and Massive and growing supply.
Your fathers empty shanty in the middle of no where is EXCESS because it is empty and will be liquidated as a result of being EMPTY.
Huh?? Why would it be “liquidated” if his father wants to keep it, and can afford to keep it?
You’re not making any sense here, RAL…
It will be liquidated along with his full time shanty when he’s dead in the ground.
And guess what? There are 35 MILLION additional housing units (on top of the 25 million empty housing units) that will swamp the market over the coming years as the boomer death rate continues to skyrocket.
“…35 MILLION additional housing units that will swamp the market…”
I was in shock until I realized the numbers are x1000.
I was in shock when I realized they were X1000.
That’s right my friends…… It’s massive and you know what else? The 25 million house number is growing rapidly.
The truth is new construction is grossly underreported as small contractors don’t even pull permits and don’t have to.
Isn’t “seasonal vacant” part of the total?
Add the 14 million number to the seasonal vacant and you get the total of 18 and change. That’s the number.
Oops — you’re right. So where are the other 6.5M vacant homes hiding?
They’re imaginary. The 25 million is made up.
Pimp,
The data has been posted time and time again by myself, Stucco and others.
There are 25 MILLION excess empty houses in the US today.
Why are you lying to the public about housing Pimp?
With all the NAR and NAHB lobbyists in DC, how do you know the frozen-in-time 18.5M number the Census Bureau reports as the number of vacancies isn’t made up and understated?
I personally am quite skeptical this figure could have been so little affected by the worst housing bust in the history of U.S. real estate.
It’s the most credible number we have. Either all government numbers are part of a massive conspiracy, or they are not.
By the way, it was government numbers that we all pointed to as evidence of the bubble…at what point did the numbers cease to be credible? When we didn’t like what the numbers tell us?
Btw, if you look at the number before the census, (2007, 2008, 2009), you see that the vacant number of houses DID increase.
WRONG.
It’s the quantity you pimp to continue your misrepresentations and lies.
You are a liar.
References, please?
US Census data in 2003 shows about 15 million vacant housing units. That swelled to 19 million in early 2010. Now down to 18.5 million. Still too many, but not 25 million too many.
http://www.economagic.com/em-cgi/data.exe/cenHVS/table08c02#Data
How many people have to cite it how many times?
“Either all government numbers are part of a massive conspiracy, or they are not.”
That’s a completely ridiculous statement. The U.S. federal government is constituted of many interconnected but largely independent parts. There is absolutely no reason that some figures could not be systematically misreported while others are not, especially when the influence peddling of the NAR is potentially involved in housing statistics.
The interconnectedness of the government data makes it such that if some numbers become too far out of whack, it would become obvious to anyone studying the numbers.
That aside, it’s getting to a point here where if numbers quoted by private industry data collectors or government agencies don’t fit RAL’s view of the world, a conclusion is that the numbers must be fudged.
Where are the NON-fudged numbers then? They must be somewhere.
And it’s getting to the point where the public will continue to call out liars like you and your lies.
But don’t let that detract from the fact that there are 25 million excess empty houses with an additional 35 million more to be added to the empty inventory.
Then you should really be selling your house and becoming a renter…why aren’t you?
Pimp,
This isn’t about me…. this is all about you, a proven liar and your lies.
“The interconnectedness of the government data makes it such that if some numbers become too far out of whack, it would become obvious to anyone studying the numbers.”
But that can take a long time, especially in command-and-control systems. For instance, think how long it took everyone to realize the Soviet Union was collapsing!
Russia: The Big Lies
…
Soviet accounting practices, like so much else they did, were opaque and self-delusional. It wasn’t until after the Soviet Union collapsed that anyone could get an idea of how large the Soviet defense budgets were, and it turned out they were less than half the size of the American ones. Suddenly, a lot of Soviet military policies made sense. Russia bought lots of weapons, but did not have the money to maintain them, or even allow the troops to train with them. That was known, and in light of how the Soviet defense budget was set up, was understandable, and inevitable.
…
There has never been a better time to ditch stocks for alternative investments!
Curiously, despite the news that some of the world’s largest pension funds are currently ditching stocks, the U.S. stock market has recently been on a tear. Something doesn’t add up.
Cash-strapped US pension funds ditch stocks for alternatives
By Sam Forgione
NEW YORK | Thu Aug 16, 2012 9:17am EDT
(Reuters) - Faced with growing obligations and shrinking returns, many of the largest U.S. public pensions have raised their exposure to alternative investments to record levels this year, despite ongoing criticism of the risks and costs.
Public pension fund managers have poured billions of dollars into alternative investments, ranging from Polish energy facilities to catastrophe bonds, as lackluster stock market returns and historically low interest rates have made it difficult for pensions to earn enough.
Public plans with more than $1 billion had a median of 15 percent in alternatives as of June 2012, the highest ever and up from 9.2 percent in June 2011, according to the Wilshire Trust Universe Comparison Service.
The increase carries risks of unstable performance and high fees amid a funding shortfall of $1.38 trillion as of 2010, according to Pew Center on the States data. Already, the vast majority of states have cut pension benefits or increased contributions from workers, or are trying to.
“There are several ways in which the economics can start to go against you,” Martin Fridson, global credit strategist at BNP Paribas Asset Management, said of pension funds investing in alternative assets. He noted that hedge fund performance varies, while private equity firms may take the reward while shifting more risk onto the pension fund.
The California Public Employees’ Retirement System - the largest U.S. public pension fund, with $237 billion - has a record 14 percent of its assets in alternatives, including venture capital, private equity, buyout funds and mezzanine debt. Calpers does not include hedge funds, real estate or commodities under alternative investments.
The South Carolina Retirement System still had a whopping 53 percent of its assets in alternatives as of May 30 despite a much-publicized debacle last year.
South Carolina’s former chief investment officer made alternative bets that resulted in manager fees of $344 million in 2011. At the same time, the fund had a deficit of about $14.4 billion, raising doubts that the returns were worth the risk and fees.
A $20 BILLION LOSS
…
Don’t buy stocks when they are hot, buy ‘em when they are not.
Wait patiently, then go against the flow.
Bear markets are found during:
1. Good times? or
2. Bad times?
Consider this:
If people (or towns, or pension funds - whatever) are desperate for money then they are forced to take on additional investment risks in hopes of getting additional returns. They will do this because they have no other choice.
This means they will sell a less risky, less return investment to raise money for a more risky investment. If enough people do this then it will push down the prices of the less risky investments and push up the prices of the more risky investments. And because - in the thinking of many people - Price equals Value the perceived value of the more risky investments will rise because they are being chased up. And the perceived value of the less risky investments will fall because these investments are being dumped.
So if a person is not desperate for a return then all he needs to do is to wait until these market distortions present themselves and then step in and buy undervalued stocks as it suits him.
It all sounds great, but somebody seems to already be buying lots and lots of stocks despite the evident move by U.S. investors both large (pension funds) and small (individual households) to dump them. Otherwise, stock prices wouldn’t steadily go up for week after week, would they?
Or are people simply not willing to sell because there isn’t a better place for their capital?
There are two sides to a trade…if you already own stocks and are thinking of selling, where do you put the money? The bank (where the Fed takes 2%+ per year)?
somebody seems to already be buying lots and lots of stocks despite the evident move by U.S. investors both large (pension funds) and small (individual households) to dump them.
There’s a buyer to match every seller; never forget that. There is no such thing as a “net move” out of stocks in the aggregate. Ignoring new issues, it is a zero-sum game.
‘There is no such thing as a “net move” out of stocks in the aggregate.’
Would you say that a central bank move to expand its balance sheet and use freshly-created electronic data blips to support prices of a particular asset class* by purchasing the asset from market participants at inflated prices compared to fundamental value would involve no “net move”? Because in my world, there is a difference between artificial intervention to prop up asset prices versus market equilibrium.
*I’m just throwing this out as an example; not trying to suggest it would ever actually occur.
Treasuries Drop Fastest Since 2010 as Economy Blocks Fed
By Daniel Kruger - Aug 17, 2012 9:00 PM PT
Treasuries posted their biggest four-week decline since December 2010 as signs economic growth is accelerating dimmed the likelihood the Federal Reserve will initiate another round of asset purchases.
Economic data on the job market, the housing industry and consumer purchasing and sentiment showed signs of faster growth, helping reduce haven demand to push benchmark 10-year Treasury yields to the highest level since May 11. The central bank will release minutes from its Aug. 1 meeting where it declined to initiate a third round of monetary stimulus, a policy known as quantitative easing, or QE. Fed Chairman Ben S. Bernanke will address the Kansas City Fed’s annual conference on monetary policy at Jackson Hole, Wyoming, on Aug. 31.
“The market’s saying there is no QE3,” said Charles Comiskey, head of Treasury trading at Bank of Nova Scotia in New York, one of 21 primary dealers that trade with the Fed. “Rates have backed up significantly. QE3 is off the table.”
…
Of course there are other choices:
Cap all public union pensions at $70,000/year
Have public unions contribute MORE to their OWN pensions.
Raise the retirement age to something that approached the private sector.
Etc.
They will do this because they have no other choice.
Most public employees already contribute to their pension.
Those management fees are big .Something wrong with that .
The way the investment market is today it forces entities to
move investments around to much .Churning is the name of the game ,but who does it benefit ?
“Those mamagement fees are big.”
So big that they can eat up all the investment returns - and then some.
Management fees PLUS tax breaks for big corporations = unions fault.
Oh wait…
Cash and gold bullion are co-kings.
TECHNOLOGY
August 15, 2012, 10:31 p.m. ET
California’s Boom Masks State’s Uneven Recovery
By SCOTT THURM and PUI-WING TAM
California added jobs faster than the rest of the nation over the past year. Tech firms are showering riches on Silicon Valley, and home prices are soaring in places like Palo Alto. The Golden State is rebounding, but for a broad swath of residents, it is a lot less golden and is likely to stay that way.
Even in Silicon Valley, many aren’t joining the revival. Tech companies are thriving, but only after shifting much work elsewhere. Internet-software experts are in demand; middle-aged semiconductor executives aren’t.
Among the thriving are people like Pete Curley, who, in six years in Silicon Valley, has twice sold social-networking applications for healthy sums. The recently married 27-year-old is considering buying a home in the region’s pricey market. By contrast, Pat Fasang, who says that he is older than 50, was laid off from a six-figure marketing post at a semiconductor firm last year and says that the Internet firms hiring today have no interest in him. In more than 20 years in Silicon Valley, he has never been out of work this long. “I’m beginning to feel hungry,” he says.
The uneven recovery of Silicon Valley reflects divisions across California. Areas with high-tech clusters, such as Orange County, south of Los Angeles, are adding jobs at a healthy pace. But much of California, including Los Angeles County, lags behind. The state’s 10.7% unemployment rate is higher than all but two other states. Unemployment tops 10% in 39 of the state’s 58 counties.
…
I see the separation of classes advancing here daily. There is another ‘boom’ here, faux that it is. I see people driving the best cars money can buy. I see people, in certain areas of the valley, who man every median at every intersection begging for money. Money that flows like a river for a few.
If this continues, at some point we may end up in a ‘Rio’ type environment where you the wealthy somewhat coexist with peasants. Walled estates, body guards, armored vehicles, topless beaches, fit & tan women, ….Oh sorry, got a bit sidetracked.
You get the point.
Over here the people in overpriced mold shacks drive Honda while many carefree renters drive more expensive imports.
By contrast, Pat Fasang, who says that he is older than 50, was laid off from a six-figure marketing post at a semiconductor firm last year and says that the Internet firms hiring today have no interest in him. In more than 20 years in Silicon Valley, he has never been out of work this long. “I’m beginning to feel hungry,” he says.
He’s in BIG trouble. Old and long term unemployed, he’s now damaged goods. Welcome to Lucky Ducky land, Mr. Marketeer.
He can get another job in “marketing” selling insurance or some other bottom feeder gig.
That semiconductor company should have been forced to keep him on the payroll at his current salary until he decided to retire. Even if he really didn’t have anything to do any more because they shut down the product line that he was marketing manager of, and there’s one less product line than there used to be.
“That semiconductor company should have been forced to keep him on the payroll at his current salary until he decided to retire.”
No one is saying that. But his predicament does illustrate how people who thought they were firmly middle to upper middle class and immune to globalization can suddenly find that they are no longer members of the 100K+ club, even in go-go Silicon Valley.
Let this lesson not be lost on the young pups who say “What recession? I have a great job”.
Exactly, Colorado.
Muni Bonds Not as Safe as Thought
By MARY WILLIAMS WALSH
Published: August 15, 2012
http://www.nytimes.com/2012/08/16/business/municipal-bonds-default-more-than-advertised.html?src=recg
Tease:
The economists said the widely held belief that municipal bonds almost never default is based on only a narrow slice of the market — the safest part, consisting of bonds that are graded by the main ratings agencies when brought to market. When the researchers looked at a much broader sample, which included unrated bonds, they found there have been about 36 times as many municipal defaults over the past 40 years as the conventional wisdom suggests.
For example, Moody’s Investors Service has reported that from 1970 to 2011, there were only 71 municipal bond defaults. But the Fed report counted 2,521 defaults in that time.
Officials of the ratings agencies said that investors should not look at the Fed’s tally and conclude that large numbers of cities are on the brink of default. The data suggests that less than 1 percent of the bonds rated by Moody’s defaulted, while more than 4 percent of the Fed’s bigger, combined pool of bonds defaulted. And individual investors — who hold about half of the $3.7 trillion debt in the municipal bond market — are more likely to buy rated bonds, which are less likely to default.
ask people in stockton how they like munis.
They might have been a fairly good deal for the people of Stockton. They got to spend the money and now they won’t have to pay it back. Like a person who HELOCed the heck out of a house and went to Disney World. They probably regret it now, but at least they had the money while it lasted and if they spent enough to be bankrupt now, they .
Then again, the people who benefited from the Stockton munis may not live in Stockton. But someone got that money - building contractors or whoever.
But the distortions caused by the borowing and spending remain, and this is something Stockton will have to deal with.
If Stockton’s economy grew dependent on borrowed money being spent then what happens to the town when it comes to a halt?
Dunno, but it sounds as though a lot of other California cities may soon have to figure that out.
National / World News
11:16 a.m. Saturday, August 18, 2012
Moody’s: More Calif. cities at risk of bankruptcy
By HANNAH DREIER
The Associated Press
SACRAMENTO, Calif. — One of the nation’s top credit rating agencies said Friday that it expects more municipal bankruptcies and defaults in California, the nation’s largest issuer of municipal bonds.
Moody’s Investors Service said in a report that the growing fiscal distress in many California cities was putting bondholders at risk.
The service announced that it will undertake a wide-ranging review of municipal finances in the nation’s most populous state because of what it sees as a growing threat of insolvency.
The report has both investors and government leaders worried.
Three California cities — Stockton, San Bernardino and Mammoth Lakes — have filed for bankruptcy so far this year. They are not likely to be the last, Moody’s said.
Moody’s reports that some cities are turning bankruptcy as a new strategy to take on budget deficits and avoid obligations to bondholders, an emerging dynamic that could have ripple effects throughout the investment community.
The municipal bond market has long been characterized by low default rates and relatively stable finances, Moody’s said, but that outlook is beginning to change as bankruptcy becomes a tool for cash-strapped cities.
As a result, the agency will reassess the financial position of all cities in California, which issues about 20 percent of the municipal bond volume nationwide, “to reflect the new fiscal realities and the governmental practices.”
The agency also will examine the outlook for municipal bonds in other troubled states, according to Robert Kurtter, managing director of public finance at Moody’s.
Moody’s would not say which states it will review, though Kurtter mentioned Michigan and Nevada as possibilities. Friday’s report noted that cities across the country are in financial distress but said that a greater share of bankruptcies are expected in California.
In California, officials rushed to downplay the report.
“Moody’s has an obligation to review changing circumstances, but we would just suggest that their assessment of the framework and ground activities is perhaps exaggerated,” said Chris McKenzie, executive director of the League of California Cities.
The state treasurer’s office also cautioned against overacting to three bankruptcies among California’s 482 cities.
“No city’s going to blithely skip into bankruptcy court to avoid its obligations,” said treasurer’s office spokesman Tom Dresslar, who called the report “a little hyperbolic.”
More than 10 percent of California cities have declared fiscal crises, according to the Moody’s, with the most troubled areas lying inland in the middle of the state and east of the Los Angeles area.
Kurtter said the declarations of emergency were “a reflection of the broader fiscal stress in the state.”
…
Why don’t you just say it.
The PUBLIC UNIONS benefited from the free money and huge debts.
Then again, the people who benefited from the Stockton munis may not live in Stockton
They did, but so did the contractors that built the new roads, stadiums, schools, courthouses, bubble era houses. etc.
The contractors exchanged services for money, you are pointing at the wrong group.
The public benefited from free money to build roads, stadiums, schools, courthouses, ..etc.
True, but without the “fun money” the contractors wouldn’t have had work. But yes, you are quite right, the public also benefited from the largesse.
Your still not getting it. The public got things ( expensive things: roads; stadiums; schools; courthouses; …) for FREE where the contractors worked for and risked time and money for their compensation.
In one case a group benefits because they don’t live up to their obligations. Chapter 9 is a different animal, municipalities can default with almost zero down-side. ( The only downside is a ding to credit rating but by the time the muni is thinking BK they have already destroyed their credit rating ) Even a BK court can’t tell a muni what to do and creditors thought they held safe debt. In the case of the public unions there is a poetic justice, the public unions should not have even existed and they used their leverage to obtain promises that can’t be kept so the pension defaults will have a level of karma. Other municipal creditors became so in good faith, it will be interesting to see what floors are established for creditors.
In the other case contractors benefited by trading services for compensation.
The latter case there is no wrong doing, the former case municipalities made commitments from which they benefited without ever having the means to uphold their promise to pay.
They did, but so did the contractors that built the new roads, stadiums, schools, courthouses, bubble era houses. etc……………..
A silly comparison. they got paid for their work…..ONE TIME. When they finished it.
The government ‘workers’ want to get paid in perpetuity, even when they don’t do anything.
After all, they have a “contract”.
So are contracts sacred or not? Because if they are not, and current events show they are not, then everyone is in serious danger.
Every. One.
Your still not getting it.
Yes, I get it. It wasn’t a “freebie” to the contractors. There was work involved. But it provided an opportunity to make money that otherwise wasn’t there (that’s the part you don’t want to get). Some people call it “pork barrel spending”. It’s even worse when it’s done with borrowed money.
Do school district bonds qualify as “municipal,” or do they fall in another category?
HIGH COST OF SCHOOL BOND SHOCKS POWAY
Repayment to exceed 9 times the principal under financing plan
Written by Ashly McGlone
12:01 a.m., Aug. 17, 2012
Updated 9:03 p.m. , Aug. 16, 2012
Poway residents are dealing with a bad case of sticker shock after realizing a $105 million bond deal struck by school officials last year left them on the hook for nearly $1 billion.
Last August, Poway Unified School District officials obtained $105 million for school construction with the promise to repay investors more than nine times the principal under long-term financing known as capital appreciation bonds, or CABs.
Under the deal, the district does not pay anything on the bond for 20 years as interest compounds, and repays the bonds in the 20 years after. The final payment will be made in 2051, reaching the maximum 40-year term permitted for bond repayment under state law.
Officials made the move based on the assumption that recent slumping real estate values in the district will grow over the next two decades and beyond. They say the bond gives them immediate use of the funds and that interest rates should work in their favor over the long haul.
The bond program was first reported by Michigan blogger Joel Thurtell in May and then last week by the news website Voice of San Diego.
Michigan banned CABs in 1994 following a series of reports by Thurtell, then a writer for the Detroit Free Press, documenting how Michigan school debt had risen from $2 billion in 1988, when the state’s first CAB was issued, to $4 billion.
While Poway Unified is not the only district in the county or state to utilize the financing, details of the $981 million repayment are creating waves of mistrust in the community.
Clariece Tally, whose child graduated from the district, alleges there was a “legitimate effort to hide” the financing, which she likened to a subprime mortgage loan.
…
Do school district bonds qualify as “municipal,” or do they fall in another category?
All special assessment districts including school districts use Chapter 9.
Damn public union pensions.
Oh wait…
Liberals are experts in thinking about issues of victimization, equality, autonomy, athe rights of individuals, particularly those of minorities and nonconformists.
Conservatives, on the other hand, are experts in thinking about loyalty to the group, respect for authority and tradition, and sacredness. When one side overwhelms the other, the results are likely to be ugly. A society without liberals would be harsh and oppressive to many individuals. A society without conservatives would lose many of the social structures and constraints that Durkheim showed are so valuable. Anomie would increase along with freedom.
A good place to look for wisdom, therefor, is where you least expect to find it: in the minds of your opponents. You already know the ideas common on your own side. If you can take off the blinders of the myth of pure evil, you might see some good ideas for the first time.
http://blog.gaiam.com/quotes/topics/liberal
I don’t care for a definition of conservatism that boils down to “superstitious sheep.”
I know, but it was written by a liberal so I wasn’t expecting too much and decided to add it as it was written.
Conservatism is much more than a religious faith, and in fact you don’t have to be very religious to be conservative. But our liberal brethren are so intellectual (in their own minds) that they can’t even consider something that they’ve never heard before.
Have you ever heard the definition of Atheism? (from GG)
It’s the belief that there was once absolutely nothing.
And nothing magically happened to explode (for no reason at all).
Then a bunch of the exploded stuff magically rearranged itself (for no reason) into biological matter that magically figured out how to replicate itself.
And the rearranged matter magically became complex organisms that eventually evolved into ever increasing intelligent beings.
And they mock us for our beliefs!!!
…and it’s not obvious why they do?
“Magically figured out how to replicate itself?”
Wow. Just, wow.
You’d make a great juggalo. “Magnets: how do they work?”
Sorry, don’t like needles therefore don’t like tattoos.
What do magnets have to do with anything?
What caused the first spark of life? A touch from God or a bolt of lightning into the primordial ooze?
A touch from God
Where did god come from?
“It’s the belief that there was once absolutely nothing.”
Is that any more preposterous than “There was once nothing except an omipotent being, that at some point decided to create everything?” Where did the omnipotent being come from?
Anybody that says they have any certainty about what happened that long ago is a fool or a liar.
loyalty to the group……….
you mean like the BLack Panthers, Nation of Islam, NAACP, Obama-bots……that kind of “loyalty”??
I would restate the definitions to be that conservatives want things to remain as they are now and liberals are more open to trying new things. I would agree that a society needs both kinds of thinking. Conservatives provide stability and liberals provide adaptability.
It is also why youth tends to be more liberal and age tends to be more conservative. Having tried new things in their youth, many come to find that some of their parents’ ways had more merit than they gave them credit for in their youth. In addition, some of the successful new ways become accepted as part of society. They become conservative positions.
I am not complaining, I know many people are struggling and I am lucky to have a job…
I may have crossed the threshold of “can be a good dad/husband” and entered the realm of “always working.”
It’s my first year at this level, so I’ll become more efficient, but holy moly my inbox/voicemail fills up by the minute.
I didn’t even read HBB all week. That’s how bad it is, you see?!
Muggs,
I recently took a promotion that’s got me in the same boat. Not complaining, I knew the deal when I accepted. A s-load of work and responsibility.
I’ll give it two years or so and if it doesn’t lead to a partner position they can have it.
Churn ‘em and burn ‘em.
Why pay them in cash when they’ll accept promises?
Trust me o’ monacled one, I am fairly compensated for my time. I am not in dire straights financially. My plan is to upgrade my department demonstrably in both profit and performance.
Then? If I go, so do the aces I bring.
They’re not stupid.
Don’t be so certain. Greed accompanies stupidity so frequently that I have to wonder of it’s a byproduct.
Are you a lawyer?
My bud left Cravath a year ago to join a smaller firm since he did not make partner.
No Mugs, not a lawyer.
Do you always get paid for always working?
Some (most?) of the salaried folks where I work also are always working, the problem is their extra pay (which is none) doesn’t track the extra hours (which are many).
A company edict was circulated about saying that state law requires that all work be fully compensated. Bla, bla, bla. Trouble is these salaried folks do not get paid for TIME, they get paid for RESULTS. The way to measure time is by a clock, the way to measure results is by some other method. If it takes a whole lot of time for the results to be obtained then the salaried person needs to become more efficient - so goes the thinking of the upper-management suits.
I have seen the future and it is led by Six Sigma and it sucks- at least it sucks for some but not for others. Some - the salaried - get to fully indulge themselves in the wonders of Six Sigma. Others - the non-salaried - get to watch.
I used to work long hrs when I started. I soon noticed that I make more or less the same salary no matter how many hours I worked. Why enrich the CEOs more than you need to?
Nowadays, I only work 37.5 hrs a week and fully take the advantage of 4 weeks of vacation. Sure, there are a week here or week there you have to work 45/50 hrs to meet a deadline, but not much. Can’t complain.
and fully take the advantage of 4 weeks of vacation
How un-American of you!
Well I am always selfish.
Weird enough, all compnies I have worked (4th company right now) allowed me to do so. Not sure how long this will last….
“Well I am always selfish.”
In career tracks where experience and institutional memory matter, it is actually in a company’s interest to make sure employees who have these can recharge their batteries, as the cost of training new workers to replace burned out older workers outweighs that of vacation time.
By contrast, if younger, cheaper workers can do the same work as the old guys, why not just grind your workforce down to the point where they leave, and bring in fresh young blood as necessary to keep vampire squids well fed?
By contrast, if younger, cheaper workers can do the same work as the old guys, why not just grind your workforce down to the point where they leave, and bring in fresh young blood as necessary to keep vampire squids well fed?
This has been HP’s strategy for the past 10 years. We all know how well they are doing now.
HP suffers from an inability to channel all that cheap, youthful energy into producing products people actually want to buy.
“Some (most?) of the salaried folks where I work also are always working, the problem is their extra pay (which is none) doesn’t track the extra hours (which are many).”
sarariman
‘I may have crossed the threshold of “can be a good dad/husband” and entered the realm of “always working.”’
It’s hard to strike this balance during a recession, as the amount of work that needs to get done shrinks by far less than the number of work hours available from a shrinking pool of employed workers. Consequently, those who remain employed soon find that not only has their productivity increased, but also their hours on the job.
During the GD some employees would come to work at 6 AM, work ’till 8 AM - then they would officially check in via the time clock. At quiting time they would do just the opposite; they would officially check out via the time clock then stay to work another two hours.
Work twelve hours, get paid for eight. If you don’t like it then hit the road.
Good times. Good times.
I’d hit the road after the first day. I don’t do such things, ever. I’m not a good little sheep. I have a brain and mouth which combine to produce not-so-friendly utterances towards people and power structures which extract pain and suffering from others.
It’s great to have the option of hitting the road, as needed. That’s a primary reason to rent, not own.
LOL!
“When Lisa Gilmore-Sarnowski and her husband began shopping for their first home, they knew the mantra well: Now’s the time to buy.
Having moved last year from Chicago, the couple believed Florida held, as Gilmore-Sarnowski said, “this amazing abundance of little gems” tossed aside in the market crash.
Their hunt quickly turned frustrating. Most homes they found were already under contract or outside their $150,000 price range. Their best find, a St. Petersburg bungalow, was practically falling apart.
“Honestly, it feels like we’re a day late and a dollar short,” said Gilmore-Sarnowski, 26, an interior designer whose husband, David Sarnowski, is a Tampa police officer. “All that’s left is leftovers.”
http://www.tampabay.com/news/business/realestate/tampa-bay-housing-inventory-hitting-new-lows/1246229
‘…“this amazing abundance of little gems” tossed aside in the market crash.’
They done all been snapped up by investors, honey.
Listening to Ryan speech.
Lying liars lie.
Talks about how stimulus was promised to keep unemployment belwo 8% and didn’t BUT seems to have forgot to mention that that promise was based on flawed BLS data and that the day it was passed, unemployment was already above 8%.
Stimulus did bend the line the way it was promised to, the line was just in a different place that we thought.
Obama put us on the path we are on. Oh, yeah.. Right. Obama was in charge when SS and MC were created, we caused the Baby Boom and following bust. Obama was in charge from 1980 to 2008 when each household’s share of total debt exploded from 3x median income to 6.5x median income.
We have to keep the promise of SS and MC to today’s seniors because they based their retirement planning around that. However, those under 55 have time to plan for a different SS and MC plan.
What a bunch of crud. Today’s retirees got company pensions, or pension buyouts. Those under 55 get jack. Today’s retirees got to ride the gains from the debt funded stock boom of the 80s and 90s. Today’s under 55 got the brunt of the tech wreck, housing crash, and stagnant economy.
We get higher payroll taxes, higher unemployment, higher education costs, and the burden of paying their pensions.
Today’s seniors are the richest in history, but they have to get full SS and MC. GenX is the poorest at this point in their life, of the last 3 generations, but they have time to “plan” for retirement.
What is our plan supposed to be? Stockpile dog food and pray to mythological gods that we die younger than our parents?
Lying liars lie.
Darrell ,I agree ,they are giving the younger generations BS while at the same time lower wages and benefits and all that . It’s not right . Don’t worry however ,they will screw the baby boomers also ( I don’t think they will be able to deliever on the Health Care ) .
People 50 and older are the least likely to be hired now ,so how is that age group going to make up for the shortfalls on what was promised ( unless your a firefighter that retired early ) . The people between ages 50 and 62 are at a disadvantage no doubt .
I got screwed on pension funds because of BK’s ,and more of that is to come no doubt . They are going to screw everybody that isn’t them ,
“…Both Medicare and Social Security cannot sustain projected long-run program costs under currently scheduled financing, and legislative modifications are necessary to avoid disruptive consequences for beneficiaries and taxpayers.
“Lawmakers should not delay addressing the long-run financial challenges facing Social Security and Medicare. If they take action sooner rather than later, more options and more time will be available to phase in changes so that the public has adequate time to prepare. Earlier action will also help elected officials minimize adverse impacts on vulnerable populations, including lower-income workers and people already dependent on program benefits.
“Social Security and Medicare are the two largest federal programs, accounting for 36 percent of federal expenditures in fiscal year 2011. Both programs will experience cost growth substantially in excess of GDP growth in the coming decades due to aging of the population and, in the case of Medicare, growth in expenditures per beneficiary exceeding growth in per capita GDP. Through the mid-2030s, population aging caused by the large baby-boom generation entering retirement and lower-birth-rate generations entering employment will be the largest single factor causing costs to grow more rapidly than GDP. Thereafter, the primary factors will be population aging caused by increasing longevity and health care cost growth somewhat more rapid than GDP growth.”
http://www.ssa.gov/oact/trsum/index.html
Why does addressing the challenges have to involve “protecting those already over 55″ and giving those under 55 the Joshua Tree treatment?
” giving those under 55 the Joshua Tree treatment?”
It should be the opposite. We should kill everyone 55+
http://en.wikipedia.org/wiki/Logan%27s_Run_%28film%29
Bring down the cost of medical by 50% and that will help a lot
in terms of unsustainable obligations to baby boomers and
the generations that follow .
I don’t think a 55 year old has enough time to prepare either
in that many of the 55 year olds are getting prejudice in
the job market now ,as well as a lot of cuts to benefits without wage increase ,or wage cuts if anything . It’s all BS
and nobody between 45 and 60 is really buying it .
“…forgot … unemployment was already above 8%.”
In the spirit of disclosure that Romney and Ryan have embraced, shouldn’t they come clean on the fact that it was on George W. Bush’s watch that unemployment rocketed to well over 8%? It seems like unemployment has trended down over Obama’s entire presidency.
If R&R think unemployment hasn’t come down fast enough over the past four years, why don’t they explain what they would have done differently, rather than pretending that Obama didn’t inherit a stink bomb economy from his Republican predecessor?
4 years of power in the White House
Super majority in congress
Filibuster proof majority in the Senate
And STILL…
There is NOTHING obama is responsible for for the kool-aid drinkers…
You still can’t do 1st grade math.
Obama’s been mediocre. Of that there’s no doubt. I just question the wisdom of giving the keys back to the party that rolled the car into the ditch in the first place.
“…giving the keys back to the party that rolled the car into the ditch in the first place.”
Especially when the concussion that resulted from hitting their head on the steering wheel erased the memory of the accident that happened while they were driving.
” shouldn’t they come clean on the fact that it was on George W. Bush’s watch that unemployment rocketed to well over 8%? It seems like unemployment has trended down over Obama’s entire presidency. ”
Sheesh… Basic research man.
We were “on the trajectory” to be over 8% when Bush left office, but we were not yet above 8%. We past 8% in the month between Obama taking office and stimulus being passed.
http://data.bls.gov/timeseries/LNS14000000
Unemployment peaked 10 months after Obama took office, just as the stimulus (that didn’t work) worked exactly as expected/predicted and bent the 2nd derivative negative.
Most of the decline in unemployment since has been from increasing disgruntled, no longer working. Not in the labor force is up from 79 million to 88 million. Put those 9 million back into the labor force and the unemployment jumps to 13%.
(The same demographics that should have us adding 1 million households a year should have us adding 2 million workers to the labor force. In reality, in the 5 years since 2008, we’ve added 1 million to the labor force and 9 million to the not even bothering to look for work force.)
Just because the Republicans are being misleading about the effects of the stimulus does not mean that it is a conversation that the Democrats really want to talk about either.
Romney and Ryan like to bring up the 23 million that don’t have jobs. Well, that number should be about 14 million anyway, so really the number of people that do not have jobs, but would in an ideal economy is like 9 million.
So, what is that number going to be 2 years after Romney wins?
Oh, it is a lot easier to point out that it is bad under Obama than to go on record with what the number will be under you…. Which is where the Obama admin messed up. They went on the record with actual numbers that were based on highly flawed estimates of the time.
Sununu is on the record saying that within a year, there will be 12 million jobs created, if Romney wins.. but he’s old and retired and that number really can’t come back and haunt him.
Darrell — I should have checked the numbers before posting — my bad. While it is true that unemployment did not cross the 8% level until Obama was in the WH, the trajectory was firmly established on GWB’s watch:
Dec 2006 4.4%
Dec 2007 5.0%
Dec 2008 7.3%
Feb 2009 8.3%
Oct 2009 10.0%
April 2012 8.1%
The trajectory of the unemployment rate was up and accelerating for the last two years of GWB’s second term in office. It has trended down, albeit slowly, for most of Obama’s time in office.
But that won’t stop R&R from heaping all the blame for current economic problems on Obama.
But that won’t stop R&R from heaping all the blame for current economic problems on Obama…………………you mean like the Undocumented President has spent his entire term blaming on everyone and everything else?
Get real. As another poster pointed out, those BLS numbers are jiggered in favor of looking better than they are. MORE People are considered “no longer in the work force” to get the 8.2% or 8.3% number being bandied about.
You need to look at Percent of working-aged americans (and illegal aliens) not in the work force. It tells a different story.
Employment is DOWN.
They’ve been “jiggered” since Ray Gun was in office.
In fact, it was Reagan’s admin that re-calculated unemployment, as well as inflation.
Google “U6″ for better idea. Also look at the statistical history of it.
“…those BLS numbers are jiggered in favor of looking better than they are.”
The BLS jiggering goes back to the 1960s. Hence the relative comparison over time is still relevant to the point that the damage was already baked into the cake during GWB’s presidency.
‘They’ve been “jiggered” since Ray Gun was in office.’
Way earlier; the statistical lie of “discouraged workers” dates back to JFK’s presidency in the 1960s — the Democratic president who screwed Marilyn Monroe behind his wife’s back.
the Democratic president who screwed Marilyn Monroe behind his wife’s back.
He was so cool.
‘Sharpie parties’ fuel rampage on foreclosed homes
REUTERS
Last Updated: 3:10 PM, August 16, 2012
Posted: 3:10 PM, August 16, 2012
LOS ANGELES — In the age of Facebook and Twitter, a new crime has hit America: “Sharpie parties,” gatherings of party revelers armed with “Sharpie” magic markers and lured by social media invitations to wreak havoc on foreclosed homes.
Five years into the US foreclosure crisis, Sharpie parties are a new form of blight on the landscape of boarded-up homes, brown lawns and abandoned streets. They are also the latest iteration of collective home-trashing spurred by social media.
At least six Sharpie parties were reported in one California county in recent months, where invitations posted online drew scores to foreclosed homes.
The partygoers are handed Sharpie pens on arrival by their hosts and urged to graffiti the walls - a destructive binge that often prompts other acts of vandalism including smashing holes in walls and doors, flooding bathrooms and ripping up floors.
The California spree follows a similar outbreak earlier this year, when teenagers wrecked homes in states including Texas, Florida and Utah after seeing the movie Project X. The film features a house wrecking party sparked by online invitations.
…
Andy Krotic, a Californian realtor, said: “It’s a growing fad among young people, especially the Twitter crowd. They throw a big party, everyone gets a Sharpie, and they are invited to write on the walls and spray paint.”
Krotic said in one recent case partygoers shot arrows through the wall, hitting a room in a neighbor’s house.
Banks that own the foreclosed homes are reluctant to pursue the perpetrators, Krotic says, because they don’t have the resources to hunt down the miscreants. Even if they’re caught, the unwanted publicity from their prosecution would likely incite more parties.
“Usually they leave the damage and just drop the price,” Krotic said.
Hey, I have an idea! Don’t foreclose!
Allow the FBs to live in the houses and thus keep the houses occupied AND maintained AND guarded from the house strippers UNTIL the time is convientient for you to toss the occupants out into the street.
How do you manage to do this? Well, first off, you convince the occupants that they, in some manner, OWN the house. After this is accomplished everything else will fall into place.
How about severe punishment, like jail and fines for vandalism, as an alternative.
Caught vandalizing a vacant house…….90 days minimum and $1000 fine PLUS damages.
There.
That’s a much better “deterrent”.
Traffic tickets and drug busts pay more.
One party rule exists in both cases (guess which?) with the outcomes that are very similar
In the case of Detroit, the producers fled to escape insane liberal policies/laws and moved to other communities/counties. This left the city with a declining “revenue base”. Similarly, in California the producers are moving to other states.
———————————
IS CALIFORNIA THE NEW DETROIT?
newgeography.com | August 17,2012 | Robert J. Cristiano
There is no mystery why California’s population and economy boomed after the Second World War. Education in California became the envy of the world. California’s public school system led the nation in innovation with brand new schools and classrooms. An efficient highway system moved California’s automobile driven commerce while fertile soil of the Central Valley became the fruit and vegetable basket of the world.
California’s business climate now ranks dead last according to 650 CEOs measured by Chief Executive Magazine. Apple will take 3,600 jobs to its new $280,000,000 facility in Austin Texas – jobs that California would have had in the past. Texas ranked first in the same survey.
California’s public education system, once the envy of the world, now ranks 46th in the nation in per pupil spending and faces a $1.4 billion cut in the fall. In the last month, three California cities declared bankruptcy. More will follow.
Californians should take a look at Michigan. In the 50s greater Detroit was the fourth-largest city in America with 2 million inhabitants and the world’s most dominant industry: the automobile.
Now Detroit’s Mayor has proposed razing 40 square miles of the 138 square miles of this once great American city returning 70,000 abandoned homes to farmland. Even such a draconian plan may not be enough to save the city.
Like Detroit, California now has one party rule. The Democrats of California did not need a single Republican vote to pass their budget. Governor Brown’s plan is to address the nation’s largest deficit by raising taxes instead of cutting spending. If passed, the deficit would drop from $20 billion to a mere $16 billion. The budget does nothing to cure the systemic problems of a bloated bureaucracy. It does not eliminate one of California’s 519 state agencies.
California’s public education system, once the envy of the world, now ranks 46th in the nation in per pupil spending
Thought this was a good thing for you?
California now has one party rule.
Where were Nixon and Reagan from? What fecund swamp of conservatism did they arise from? How long has this disaster been building?
This disaster has been building since they went to a full-time legislature. The first year they went full-time was the first year the budget was late, and it remained so until they changed the law a couple of years back to require a simple majority to pass a budget.
The 6 Most Popular Stocks Owned By Congress
Townhall.com | August 18, 2012 | Paul Tracy
Congress is rich — unbelievably rich. According to the Center for Responsive Politics, 249 of the 535 congressmen are millionaires. That’s 47%. By comparison, about 5% of U.S. households are worth more than $1 million.
And until recently, insider trading laws didn’t apply to congress. They could buy or sell investments based on non-public information they learned from their privileged positions.
As you would expect, that’s led to some great returns for Congress’ investments. In a study cited by Barron’s, members of the U.S. House of Representatives beat investors like you and me by 55 basis points a month. That comes out to an extra 6.8% per year.
I don’t know which is worse: the fact that insider trading was legal for some of our nation’s wealthiest politicians… or that Congress refused to do anything about it for decades.
I even wrote about this problem back in July 2011, after doing research into how congressmen invest.
GE
PG
CSCO
BAC
MSFT
T
Amazing how they just don’t show how all the REPUBLICANS are “millionaires and billionaires” and all the Democrats are Poor, middle-class, and just plain folks, like Obama.
Pelosi, Reid, Schumer, Frank, et. al., yes they are “For the Poor”
They are not Millionaires. No. Just republicans.
Why didn’t they break it down by Party.
The Press always accuses the R’s of being the party of the RICH.
I can take a wild guess: The numbers won’t support their case.
Former NFL Head Coach Dennis Green Suing Nancy Pelosi’s Husband
Published: 17th Aug 12 12:27 pm
Former NFL head coach Dennis Green, most famously known for his press conference tantrum after the Arizona Cardinals lost to the Chicago Bears in 2006, is suing Paul Pelosi, husband of House minority leader Nancy Pelosi.
Green is suing for breach of contract after Pelosi and his business partner Bill Hambrecht allegedly failed to pay the $1.5 million owed to Green for coaching the Sacramento Mountain Lions. Pelosi owns the United Football League team and apparently contracted a deal that would pay Green $1.5 million to coach over a required period of time.
Unfortunately, the story gets even worse for Green who sold his home in San Diego and moved his family, including uprooting his children from their school, to Sacramento where he purchased a new home.
Hambrecht is the founder of the UFL with its sole purpose to have professional football teams in cities that currently do not have the luxury of an NFL team. Pelosi, a real estate developer, joined forces with Hambrecht in 2009 where purchased the Mountain Lions for $12 million, as well as, bought a $1 million stake in the UFL. Pelosi’s full intentions were to create a profitable business and not have the team just for show.
Green was required to receive a bi-weekly check of $62,500 in full from Pelosi in 2011. For reasons unknown, the checks dropped in amount with some being as low as $5,000 for several weeks throughout the year. Some speculate the reason behind this is because Pelosi sold stocks in order to pay for the team’s expenses opposed to running it like a normal business.
http://www.i4u.com/2012/08/dennis-green/nfl-pelosi-s-head-former-nancy-green-coach-dennis-husband-suing -
NON EMPLOYMENT rate at 41.6%, Obama Stimulus a Massive Failure
Confounded Interest | 08/18/2012 | Anthony B. Sanders
There was an interesting article in Bloomberg on Friday entitled “U.S. Joblessness Rise Broad-Based as 44 States Show Gain.” that’s gain as in a rise in unemployment.
In a nutshell, the jobless rate has exceeded 8 percent for 42 consecutive months, the longest stretch in the post-World War II era.
Then there is the Gallop poll. Gallup’s Daily tracking of the unemployment situation is based on interviews with more than 30,000 adults over the 30 days ending Aug. 15, and shows essentially no change in the unadjusted unemployment rate at 8.3% compared to 8.2% in July. In turn, this suggests that the government’s unadjusted unemployment rate could increase to 8.7% in July from 8.6% in June.
There are at least two daunting facts in the chart. First, Obama predicted a 6% unemployment rate for July 2012 if there was NO STIMULUS. And 5.6% unemployment IF STIMULUS PASSED! $700 billion to get an anticipated 0.4% improvement in unemployment?
The second daunting fact is that the unemployment would be 11% as of July 2012 if labor force participation was the same as in January 2009 when President Obama took office.
The civilian employment to population ratio remains stuck at 58.4%, the levels of the Carter recession. Stated differently, we have a 41.6% NON EMPLOYMENT rate in the US.
All in all, the unemployment picture looks miserable. Hence, any housing recovery will be muted by the poor unemployment situation.
10% in 2009. 8.2% now.
Again, you can’t even do 1st grade math. 10 is NOT greater than 8.
BTW, link to your numbers?
Unemployment Rate Falls To 8.1 Percent As People Give Up On Looking For Work
Posted: 05/04/2012 8:32 am Updated: 05/05/2012 9:05 am
While the U.S. unemployment rate in April was the lowest it’s been in more than three years, the unemployed may simply be falling off the government’s radar as they give up looking for work.
Meanwhile, job growth has slowed sharply after a fast start to the year, suggesting another bump in what has been an agonizingly long road to recovery for the job market.
Unemployment fell to 8.1 percent in April, the lowest since January 2009, the Bureau of Labor Statistics reported Friday morning. But the decline was mainly due to 342,000 people leaving the labor force, meaning the BLS had stopped counting them as unemployed. The number of employed people in the nation actually fell by 169,000.
About 12.5 million people are still unemployed, and a record 88.4 million people are considered “not in the labor force,” according to the BLS. The labor-force participation rate — the percentage of the work-age population either working or looking for work — dropped to 63.6 percent, the lowest since December 1981.
“It’s hard to see the good news here,” David Semmens, senior U.S. economist at Standard Chartered, wrote in a research note.
The White House pointed out that the job recovery is the legacy of a recession that started on the Bush administration’s watch.
Whatever the reason, U.S. payrolls are still nearly 5 million jobs lower than they were when the recession began. This labor-market recovery has been arguably the most sluggish since World War II — though the job losses in the recession were also the deepest.
More than 5 million people have been unemployed for 27 weeks or more, and the average length of unemployment is more than 39 weeks, according to the BLS.
Many workers are leaving the labor force because of retirement or to collect Social Security disability checks. But an untold number have simply given up looking for work after long months or years of unemployment.
http://www.huffingtonpost.com/2012/05/04/unemployment-rate-april-jobs_n_1477014.html - 418k
Anyone know where you can get a 24 percent return on investments these days?
Municipal budgets, services hinge on pension returns
Written by Craig Gustafson
8:32 a.m., Aug. 18, 2012
Mayor Jerry Sanders stood before reporters in February to declare that San Diego’s “decades-long structural budget deficit is history,” a feat accomplished in large part because of a 24 percent investment return from the city’s pension fund.
Those robust returns helped shave $25 million off what would have been a $256 million annual pension payment and gave city leaders the breathing room to hire additional public-safety workers and increase library hours for the first time in years.
A similar spending spree for next year isn’t likely. The pension fund had a lackluster investment performance — a gain of 0.3 percent — for the fiscal year that ended June 30, which means the city can expect a multi-million-dollar increase in its pension payment next year.
The city’s changing fortunes illustrate how fickle finances can be for public agencies with massive unfunded pension promises that require significant and successful investments in the stock market to have any hope of meeting those obligations. If they don’t meet their investing goals in a given year, costs go up and budgets get squeezed.
The nation’s burgeoning pension crisis and sputtering economy has led some financial experts to call on public agencies to toss out their projections for investment returns — typically 7 to 8 percent annually — for more conservative and attainable goals. The problem is that lowering those investment assumptions, even slightly, increases costs for the taxpayers and employees who provide the seed money for pension funds. That could impact services.
‘Pensions hit their mark’
Proponents of the status quo point to the fact that pension systems have always hit their investment return targets over the long haul and therefore the existing projections are appropriate. Setting the bar lower would be equivalent to leaving money on the table, they say.
…
Setting the bar lower would be equivalent to leaving money on the table, they say…………………..
oh, really. who is “they”????
Having more money in a fund than estimated means you don’t have to reach for higher returns the next year, or you can pay out more in future years.
Having it UNDERFUNDED assures that TAxpayers will be called upon to pay the pensions of government employees.
If Ryan as VP would crash the stock market, why hasn’t it crashed yet?
It seems like Mr Market is dumb and dumber these days.
8/13/2012 @ 8:07PM
Paul Ryan And Fiscal Cliff Fears Could Derail Stock Markets
Paul Ryan will put the focus on fiscal consolidation, making it more difficult for both parties to compromise on the fiscal cliff - Image credit: Getty Images via @daylife
Mitt Romney’s decision to pick House Budget Committee Chairman Paul Ryan as the Republican candidate for vice president will bring to the fore concerns over the looming fiscal cliff. This, in turn, “may be a headwind for risky assets in coming months,” Nomura’s Lewis Alexander said, noting concerns over the fiscal cliff “may affect markets somewhat sooner than we had earlier thought.”
Markets hate political uncertainty. They apparently also despised the debt ceiling deal that brought months of political bickering to an end in 2011. The Budget Controlled Act, signed into law on August 2, 2011, only four days before the U.S. lost its coveted AAA rating with Standard & Poor’s, preceded a massive decline in equity prices.
On July 22, 2011, when the Democratic Senate voted to table the Cut, Cap, and Balance act passed by the Republican House, the S&P 500 hit 1,345 points. Less than three weeks later, on August 8, the stock index had collapsed 16.8% to 1119 points, as markets bottomed out in the aftermath of the fateful credit downgrade.
Both Alexander and LPL Financial’s Jeff Kleintop agree that the Paul Ryan VP pick has the potential to make a grand compromise very difficult, possibly sending the U.S. down the fiscal cliff and into recession. According to Goldman Sachs’ economics and commodities team, the full impact of the spending cuts under the “sequester” and the potential drag on growth from tax increases in mid-2013 could shave nearly four percentage points of real GDP next year; Wells Fargo‘s Ron Florence, a managing director, thinks GDP could fall 5% over the next two years under the adverse scenario.
The Romney campaign has “effectively endorsed the fiscal plan originally proposed by Chairman Ryan in the spring of 2011,” Nomura notes, adding that the plan calls for substantially smaller deficits in 2013 and 2014 than President Obama’s plan, but that it comes with big spending cuts. Indeed, those spending cuts will take a big hit on Medicare, which is one of the points the Obama campaign will focus on to hit at the young Congressman from Wisconsin.
While Nomura’s Alexander believes that Romney’s “choice is unlikely to have a material impact on the outcome of the presidential election,” he accepts that Ryan’s presence will have a meaningful effect on the platform by highlighting the role of fiscal consolidation in the campaign. “This will tend to highlight core differences between Republicans and Democrats on tax and spending priorities,” he wrote, adding “this choice, and its impact on the content of the campaign, is likely to reinforce political support for fiscal consolidation.”
…
The democratic senate - 1200 days and counting without passing a budget of their own.
Note - in the senate the rules allow for passing a budget with a simple majority.
They did reject two of obama’s budgets at 99-0.
And shoot down republican budgets from the house.
And PS - Since when did it become the job of the congress to PROP UP the stock market????
———————-
On July 22, 2011, when the Democratic Senate voted to table the Cut, Cap, and Balance act passed by the Republican House, the S&P 500 hit 1,345 points. Less than three weeks later, on August 8, the stock index had collapsed 16.8% to 1119 points, as markets bottomed out in the aftermath of the fateful credit downgrade.
I know this is hard for all you necocon Randroids to accept, but EVERYTHING is this nation IS subject to government control.
That how “nations” work.
Business, capitalism, trade, call it what you will, does NOT have some divine right to be free from rules and regulations.
Ever.
The IRS Agent Who Squatted in Her House
By Al Lewis
Published August 17, 2012
FOXBusiness
IRS Agent Beverly Hood testified in federal court Tuesday against a gaggle of mortgage-fraud defendants she had investigated.
What didn’t come up was that she had once been investigated for mortgage fraud herself.
Ms. Hood and her husband filed for bankruptcy in December 2009, and they lived in a half-million-dollar home in Greeley, Colo., for nearly two years without making a mortgage payment.
At the IRS, Ms. Hood supervised several agents. One of them, she said, filed an internal whistleblower complaint against her and she was summoned by investigators.
“I had no idea why I was being called in,” said Ms. Hood, who is 49 years old. “I couldn’t figure out what I could have possibly done wrong on my tax return…They said, “You’re being investigated for mortgage fraud.’”
…
Tough call. Is it fraud if you have a very good paying job and money in the bank but stop paying your mortgage? You did sign a contract pledging to do just that and you still have the means to fulfill that contract.
Or just a good business decision?
And do IRS agents need a clearance or pass a back-ground check to get and keep their government jobs?
All through the bankruptcy, Ms. Hood maintained her six-figure income at the IRS, and her family lived mortgage-free as the bank initiated mortgage-foreclosure proceedings. In addition to her income at the IRS, bankruptcy records show she held more than $200,000 in a government employee 401(k).
While many middle-class families cannot find anything to buy as a place to live in that fits their family budgets, the superrich are literally living ever higher.
HOMES
Updated August 17, 2012, 1:09 p.m. ET
Living The High Life
Developers are erecting super-skyscrapers for the very wealthy, selling apartments with helicopter views for massive price tags. Why everyone’s looking up; plus, the realities of life on the 90th floor.
Romney-Ryan See Fed QE as Inflation Risk Amid Low Prices
By Jeff Kearns and Joshua Zumbrun on August 14, 2012
Representative Paul Ryan, writing less than a month after the Federal Reserve announced a new round of bond-buying in 2010, said the move to purchase another $600 billion in securities risked stoking inflation and pushing down the dollar.
Since that prediction by Ryan, who has been chosen by presumptive Republican presidential nominee Mitt Romney to be his running mate, the dollar has risen against major currencies and inflation has stayed below the Fed’s goal of 2 percent.
While off target so far, the warning by Ryan parallels Romney’s criticism of the unprecedented Fed program known as quantitative easing to spur growth by purchasing a total of $2.3 trillion in securities. Romney and Ryan oppose the policy even as Chairman Ben S. Bernanke says he stands ready to provide more accommodation if necessary to achieve a steady decline in the 8.3 percent U.S. unemployment rate.
A Fed led by a Romney-Ryan administration appointee “would be less inclined to frequently fiddle with the knobs” of economic policy, said Stephen Stanley, chief economist for Pierpont Securities LLC in Stamford, Connecticut. “There would be a strong sense in the markets that a different strategy is probably forthcoming,” with higher odds the Fed would raise interest rates and a lower probability it would buy more bonds.
…
A friend of mine just left Florida and moved back to upstate NY.
I’d love to, but I am still not convinced I can get work up there.
Why?
Family?
Missed the winters? However - the summers are amazing.
Better work or better salary?
Lower taxes? (that was satire)
Etc.
———————————————–
A friend of mine just left Florida and moved back to upstate NY.
I miss the brilliant autumns, driving aimlessly around the Finger Lakes, being a 1/2 day from Toronto and NYC, all of the awesome hiking mountain biking, nice people, easy commutes, reasonable housing, sledding, having a basement, etc.
I could go on forever.
FWIW, the winters are long, but they only drive me crazy for a few weeks in March. Late September through early November? Best place in the world.
I’m seriously penciling out what it would be like to have my wife be a SAHM if I could make a decent salary up there. I’m tired of being busy all of the time.
2ban, in all seriousness, I would not let taxes hold me back. Not even public unions!
It’s simply a nice, beautiful place to live. Life is short, even in right-to-work states (probably shorter).
Romney slams Obama over Medicare
Now if that wasn’t bad enough, his healthcare law also put in place a board of 15 unelected bureaucrats and gave them the power to make additional cuts to Medicare without even having to get approval from Congress,” he said.
“This means they could deny elderly Americans the care they’ve worked for their entire lives — all because President Obama trusts bureaucrats more than he trusts seniors and their doctors,” he said.
http://nbcpolitics.nbcnews.com/_news/2012/08/18/13347755-romney-slams-obama-over-medicare-pledges-more-help-for-poor-and-sick?lite
Yawn.
“…As for the cuts, they come from eliminating a massive subsidy to private insurers and gradually reducing the rate of growth in payments to some providers. These changes, while not catastrophic for Medicare, are important. Under the ACA, the federal government will substantially reduce the amount it spends funding Medicare Advantage, which is privately administered insurance offered to Medicare beneficiaries.
In exchange for these kinds of reductions in Medicare spending, funding for the program was bolstered in other ways by the ACA. Preventive care is now covered at 100% for Medicare beneficiaries and a gap in Medicare prescription drug coverage will slowly close under the law. Some Medicare beneficiaries, primarily wealthy Americans, will pay higher Medicare premiums and taxes under the ACA.
The idea, however, that the Affordable Care Act struck a dangerous blow to Medicare that will change the program in fundamental ways is untrue. Under the new law, Medicare will remain a wildly popular, public single-payer health insurance system that provides comprehensive coverage to millions of Americans.”
“Yawn.”
Burp.
Grexit debate stirs in Germany ahead of Greek PM visit
BERLIN | Sat Aug 18, 2012 2:01pm EDT
(Reuters) - Greece will not leave the euro zone unless the country “totally refuses” to fulfill any of its reform targets, the head of the Eurogroup said on Saturday, as Germany insisted the crisis-stricken country must stick to the agreed reforms.
“It will not happen, unless Greece were to violate all requirements and not to stick to any agreement,” Eurogroup President Jean-Claude Juncker was quoted as saying in Austria’s Tiroler Tageszeitung newspaper days before meeting Greece’s prime minister.
“In case of such total refusal by Greece with regards to budget consolidation and structural reform, one would have to look into the question.”
…
Check out the recent moves on the Baltic Dry Index. Would this be a bullish or a bearish indicator for the trajectory of the global economy?
Baltic Dry Index
Add to Portfolio
BDIY:IND
714.00 6.00 0.83%
As of 08:08:22 ET on 08/17/2012.
More on BDIY
Snapshot for Baltic Dry Index (BDIY)
Open: 714.00
Day Range: 714.00 - 714.00
Year To Date: -58.92%
Previous Close: 720.00
52-Week Range: 647.00 - 2,173.00
1-Year: -51.16%
The BDI and the Trash-haul Indicator both portend economic disaster dead ahead, but so long as the U.S. stock and housing markets keep going up, I suppose there is no reason to worry.
Tracking the economy and GDP through trash
Peter Macdiarmid/Getty Images
A truck empties its load of waste at the Shelford Landfill, Recycling & Composting Centre.
Interview by Kai Ryssdal
Marketplace for Thursday, August 16, 2012
Kai Ryssdal: Sure, there were some economic numbers out this morning. First-time claims for unemployment benefits: Meh. And housing starts: Also meh.
But how ’bout this? Trash. Garbage. Waste. Refuse. Therein, my friends, lies the economic truth. It came to me in a chart I saw online the other day — railroad carloads of trash, as correlated to GDP. And the correlation is pretty close, too.
…
Ryssdal: Michael McDonough, he’s a senior economist at Bloomberg Briefs. We got him in Hong Kong. The graph that we’re talking about, it’s kind of crazy, the correlation. Michael, thanks a lot.
McDonough: Thank you.
Ryssdal: Mike said there’s something wrong in the underlying economy? As bad as it’s been since Lehman brothers is how wrong is what he figures. Have a look yourself at the chart above.
I confess to a near-obsessive fascination with divergence between headline economic indexes (DJIA, BLS unemployment figures, U.S. housing prices, etc) and fundamentals-based measures like the BDI. This relates in part to my extreme interest in learning the real underlying story, instead of accepting official statistics at face value.
Forget the Baltic Dry Index – Take a Look at the Container Market
by Stuart Burns on August 16, 2012
The Baltic Dry Index (BDI) usually steals the headlines when it comes to discussion of the world’s shipping fleets, and is often quoted when analysis of the global economy refers to international trade.
The Dry Index is a measure of bulk shipping rates and although the Baltic Exchange quotes a range of vessel sizes and types, it is often the large dry bulk carriers carrying iron ore, coal and grains that steal the limelight.
This is hardly surprising; the volume of such bulk commodities is a measure of global economic activity and the rates charged for carrying such commodities are in part a reflection of the level of demand or volumes. But not in total, of course: the supply of space also plays its part as is the case in the current market.
Baltic Dry Index rates for shipping bulk commodities are way down on a year ago, as seen in the graph below:
[GRAPH SHOWING BALTIC DRY INDEX RATES WAY DOWN ON A YEAR AGO,AND STILL DECLINING]
After a brief rally in the spring, rates are back to post-crisis levels, but in large part this is due to a dearth of new vessels ordered during the boom period in the middle of the last decade and not wholly the result of a collapse in trade.
According to Reuters, the index this week has fallen for 26 straight days in a row. The average daily earnings of capesize vessels, which usually transport 150,000-ton cargoes such as iron ore and coal, slid $173 to $3,590. It has fallen almost 87 percent so far this year. So to what extent are the very low BDI rates a reflection of a global trade malaise?
If bulk trade is down, we would expect all trade to be down; if emerging economies are not buying as much raw material it is probably because they are not producing and exporting as many semi-finished goods (think China) and in turn, mature higher-tech markets are not exporting finished capital goods (think the US and Germany).
While bulk commodities reflected by the BDI are shipped in bulk carriers, higher-value goods tend to be shipped in containers. Here a Telegraph article (”World shipping crisis threatens German dominance as Greeks win long game“) paints a dire picture of the state of the container market. The true picture is confused by the same issues as the bulk carrier market, namely overcapacity, but the ramifications could be more serious than for bulk products.
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A good time to check in to see how my old friend DryShips (DRYS) is doing.
http://finance.yahoo.com/q/bc?s=DRYS&t=1y&l=on&z=l&q=b&c=
Oooops, it’s not doing all that well. What a surprise!
Back in late February-early March volume exploded and took price up with it. (Pssst somebody must know something - Buy all the DRYS you can get your hands on).
Price equals Value: If the price is going up then the value is also going up, no? Never mind looking into the fundamentals: The Market is always right; The Market will tell you all you need to know.
(snort)
Well, in a sense it is telling you all you need to know. In this case it just took a while.
I screwed up by missing out on DRYS but I made up for it by going all in on Facebook.
(snort squared)
So long as the U.S. stock and housing markets keep going up, these worrisome reports from the rest of the world’s economy can be safely ignored.
World shipping crisis threatens German dominance as Greeks win long game
By Ambrose Evans-Pritchard
10:04PM BST 13 Aug 2012
Over 100 German ship funds have already shut down as the long-simmering crisis in global container shipping finally comes to a head. A further 800 funds are threatened with insolvency, according to consultants TPW in Hamburg.
They are not alone. Britain’s oldest shipowner, Stephenson Clark, dating back to 1730, went into liquidation last week, closing the final chapter of Britain’s coal trade and the industrial revolution.
WHOA! — A THREE-CENTURIES TROUGH!!!
It cited “incredibly depressed” vessel rates. The firm over-invested in the boom four years ago, betting too much on the China syndrome.
Germany is the superpower of container shipping, controlling almost 40pc of the world market. The Germans also misread the cycle and have been struggling to cope ever since with a legacy of debt and a glut of ships. Now everything is going wrong at once.
BwaHahHAhahAHAHAHAHAHAHAHAHHAHAAAAAAAAAAAAAAAA!!!!
Container volumes arriving at European ports plunged in June, dashing expectations of a summer rebound. Imports fell 7.5pc from North America and 9pc from Asia. Flows into the Mediterranean region crashed by 16pc, reflecting the violence of the recession in Greece, Italy, Spain, and Portugal.
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Methinks Greek ship owners are going to look like the smart players through the lens of history’s rear-view mirror.
And unless I misread this article, then the seeds of a future slowdown that “nobody could have seen coming” have been planted in the German economy, thanks to trickle-down from ship funds to everything else.
Commentary
Container Shipping Crisis Between Germany and Greece?
by Stuart Burns on August 16, 2012
According to the Telegraph, over 100 German ship funds have already shut down as the crisis in global container shipping comes to a head, while 800 more funds are threatened with insolvency, according to consultants TPW in Hamburg.
In the UK, Britain’s oldest ship-owner, Stephenson Clark, dating back to 1730, went into liquidation this month, closing the final chapter of Britain’s coal trade and the industrial revolution, citing “incredibly depressed” vessel rates. Like large parts of the German container industry, the firm over-invested in the boom four years ago, betting too much on Asian growth rates.
Germany, however, is said to be the superpower of container shipping, controlling almost 40 percent of the world market; so if collectively they get it wrong, it goes wrong in a big way.
Faced with massive overcapacity following a boom in new vessel construction ordered during the last decade, and correspondingly high levels of debt to fund those vessels, owners are in trouble as volumes are way down as a result of the European crisis and a slowing Asian market.
Container volumes arriving at European ports are said to have plunged in June. Imports fell 7.5 percent from North America and 9 percent from Asia, while flows into the Mediterranean region crashed by 16 percent, reflecting the extent of the recession in Greece, Italy, Spain, and Portugal.
Meanwhile, cash-rich Greek ship-owners who had sold vessels at the top of the market are now buying them back from German owners at rock-bottom prices — the Greek shipping market appears curiously isolated from the rest of the Greek economy.
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Did I ever mention here that I don’t much care for lies, or the lying liars who tell them?
Inventory is low, looser! Enjoy your mom’s basement.
Thank you for spelling “looser” correctly in this context
So the question remains;
Why buy a house when grossly inflated housing prices and interest rates are falling?
Try your hands at pimping this story, real estate pimps!
U.S. Birth Rate Not High Enough To Keep Population Stable
The Huffington Post | By Bonnie Kavoussi
Posted: 08/15/2012 4:03 pm
Updated: 08/18/2012 6:40 pm
Thanks to the weak economy, Americans are having fewer babies than the British and the French — not enough to maintain the size of the U.S. population without immigration, according to the Economist.
The U.S. birth rate now is 1.9 births per woman over her lifetime, when 2 births per woman is necessary to sustain the population on its own. Because of immigration, the population is still growing, but the birth rate has been plunging since the recession started in 2007 and fell below population-sustaining levels in 2010. It’s projected to fall to a 25-year low this year and not recover to pre-recession levels anytime soon, according to the consulting firm Demographic Intelligence.
Many young Americans are postponing starting their own families because they are struggling to stay afloat. Some 22 percent of 18- to 34-year-olds say they have delayed having a baby because of the weak economy, and another 20 percent have delayed getting married, according to a recent survey by the Pew Research Center. Roughly one in four adults in that same age range have moved back in with their parents during the economic downturn, after living on their own.
And because of their worse earnings prospects, a growing number of young Americans are getting priced out of having kids. While Americans’ incomes have failed to recover from the recession, the cost of raising a child keeps rising. It will cost a middle-income family nearly $300,000 to raise a child born today from infancy to age 17, when accounting for projected inflation, according to the Department of Agriculture.
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I see no problems here, provided America keeps its doors open to talented young Asians who want to settle here.
Demography
Virility symbols
American fertility is now lower than that of France
Aug 11th 2012 | from the print edition
CONSERVATIVE Americans like to contrast the vigour and virility of their own country with the decadence and decline of Europe. Demography is exhibit A in their argument. Mitt Romney, for example, talked about Europe’s “demographic disaster” as he ended his presidential bid in 2008, calling it “the inevitable product of weakened faith in the creator, failed families, disrespect for the sanctity of human life and eroded morality”.
Americans especially like to focus on the total fertility rate, or TFR, the average number of children a woman can expect to have during her lifetime. For years, America was unusual among rich countries in having a relatively high TFR of around 2.1, the so-called “replacement rate”, at which a population stabilises over the long term. European countries were typically below that rate, sometimes far below it.
So it comes as something of a shock to discover that in 2011 America’s fertility rate was below replacement level and below that of some large European countries. The American rate is now 1.9 and falling. France’s is 2.0 and stable. The rate in England is 2.0 and rising slightly.
American fertility reached its recent peak in 2007; its fall has coincided with the economic crisis that began at the end of that year. Recession seems to have reduced fertility through at least two channels. First, migrants often cannot find work and go back home. Since they tend to have slightly larger families than native-born citizens, this reduces fertility. It has happened in Spain in the past two years, and may be happening in America as Mexicans leave.
Second, loss of income, compounded by the housing crisis, is causing young people to postpone marriage, the setting up of new homes, and having children. In 2011 the Pew Research Centre asked 18-to-34-year-old Americans about their reaction to recession: 22% said they had postponed having a baby and 20% said they had postponed marriage as a result. This reaction is evident in Europe, too, but the response seems to have been sharper in America.
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“Roughly one in four adults in that same age range have moved back in with their parents during the economic downturn, after living on their own.”
And what should this be doing to rents? And why isn’t it doing it?
Or, maybe, it is doing it?
Who is responsible for foreclosed homes?
Tess Vigeland
LAPD Officer Eric Young views the trash-strewn backyard of a foreclosed home in Watts, California.
by Tess Vigeland
Marketplace Money for Friday, August 17, 2012
Tess Vigeland: I lost track, a long time ago, of how many reports we’ve done on the foreclosure mess. How many homeowners we’ve talked to, banks and politicians. How many solutions have been proposed and ignored. Four, five years after the bubble popped, the narrative hasn’t changed much.
But today, a perspective that maybe you haven’t heard before from Officer Eric Young of the LAPD Southeast Division.
Eric Young: OK, I’m gonna go to the east side of division, which is north of the Imperial Highway and east of Wilmington Avenue.
Vigeland: So as we head over there, talk us through what you have seen over the last four years as the housing bust has hit this divison.
Young: You know, several years ago, property crimes took a back seat; all the violent crime we had. But now as our violent crime goes down, the department, the city, we’re focusing more on our property crimes.
Property crimes. Burglary. Trespassing. Vandalism. All hallmarks of the foreclosure crisis.
Young: Just real quick where we’re goin’ is we’re goin’ into Watts and it’s not, you know, I’m not gonna say something terrible’s gonna happen, but you never know what’s gonna happen around here. I mean on occasion, police cars get shot up.
We were heading out on a tour of what the foreclosure crisis has wrought in Watts, an area of Los Angeles infamous for riots and gangs — and these days, boarded up, vacant homes. More than 1,500 foreclosure actions over the last year in a single zip code, according to RealtyTrac. And before we arrive in that zip code, a warning:
Young: You know I’m not gonna be doing any traffic stops or anything like that with you guys in the car. For safety reasons, though, if anything happens, push this orange button on my radio. If I can’t do that, this little orange button right here, and they’ll find us, OK?
Officer Young has served in southeast division for 12 years. His area of responsibility is the smallest in size, highest in crime. But it’s the evolution in the type of crime he battles that brought us to this ridealong.
Young: Four years ago — no, I’d say three years ago — it was probably at its worst. On any given day, I’d probably have 45, 50 vacant homes in my area. And they blight it brings to the street, they just look like crap.
There are 68 documented criminal street gangs in LAPD southeast division. Because of the foreclosure crisis, those gangs and the area’s homeless population have a whole lot more housing to choose from.
Young: This is an interesting place right here. It’s been vacant for about two and a half years. There was a homicide in that garage that went unnoticed for quite some time.
Vigeland: What is “quite some time”?
Young: Probably a couple weeks before we got to it.
Vigeland: Two weeks?
Young: Probably. It was pretty much based on the smell that it created. We’re gonna park the car here.
We parked in front of a boarded up, split-level house, fronted by a wire fence w ith a big hole cut out of it. The lawn was dried up and brown.
Our story was prompted by lawsuits filed by the City of Los Angeles against the banks that own these kinds of foreclosed properties. The city claims the banks should be responsible for the upkeep of abandoned homes. Courts have yet to rule.
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