The emptiest city in the United States is Orlando, Fla. The 12-month average for rental vacancies stands at a staggering 18.8 percent, while in the first quarter of 2012 this number was 22 percent, highest in the nation. Florida’s third largest city also has an above-average homeowner vacancy rate
Photo: CNBC
We all know the nation’s real estate has been hard hit by the economy’s malaise. Between record high foreclosures and plummeting home values, the nation’s housing market may never fully recover—at least not if the target is pre-bubble prices.
But in the Bay Area, real estate remains strong. In San Francisco and the Silicon Valley in particular, prices have gotten higher along with higher demand. Even Oakland, formerly decimated by foreclosures and short sales, has enjoyed something of a comeback, scoring Realtor.com’s title of “fastest selling city in America” this August.
The rest of the county hasn’t been so lucky. As CNBC puts it, “one of the unfortunate results of a bad housing market are empty homes. Vacant properties have increased by 43.8%.” And where do thee vacancies hit hardest? CNBC released its list of the 10 emptiest cities in the USA. We covered 5 here. To see the complete list, visit CNBC here.
Could It Happen to the Bay Area?
People in Toledo or Houston probably ever planned for their cities to be so vacant. Consider Detroit, once the flourishing center of America’s automobile industry, now a shell of its former glory. What would it take, readers, to empty out one of our Bay Area cities?
What would it take, readers, to empty out one of our Bay Area cities?
A very simple solution: Relocate the residents of Detroit and Newark, NJ. That would turn your city into a crime-infested ghetto, and you would find a net Migration out. People don’t stay where crime runs free. except “gangstas”.
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Comment by turkey lurkey
2012-10-10 11:36:13
I thought that was Oakland’s and Compton’s function?
Sworn police staffing in Stockton, Calif. dropped from 1.52 per 1,000 residents in 2005 to 1.16 today. (Ben Margot, Associated Press)
This is the first in a two part series. Part two can be read here.
By: Eric Schulzke
A stone’s throw away is Stockton’s City Hall. Above the entrance is an “All-American City” banner, reflecting faded glory from awards won in 1999 and 2004, but beneath the banner the lamp post foundations are badly cracked. It’s one of many clues around the city that something has gone badly awry here.
Wells Fargo repossessed an eight-story office building meant to be a new city hall earlier this summer. The city had defaulted on its loans. The bank also seized underperforming parking garages, which the city built when boom times seemed here to stay.
At a city council meeting in that fading city hall on that warm August evening, the word “bankruptcy” is never mentioned but lies heavy in the air.
The council approves a renegotiated pensions deal with the fire unions. The private management company that oversees the shiny new venues reports on its progress filling seats. A 53-year-old retired police officer unloads his frustration about loosing his promised free medical care.
The aftermath of Stockton’s mismanagement will haunt the city’s residents for years to come. Essential services are already being short-changed to pay debts and employee pensions.
Stockton’s path to bankruptcy is an object lesson in how exuberance, naiveté and false hopes can supplant prudence. It’s a lesson that cities, counties and states around the nation are rapidly learning.
Stockton is easily the largest U.S. city ever to file for bankruptcy. The next closest, San Bernardino in southern California, also filed this summer. But it may not hold the record for long. Former Los Angeles mayor Richard Riordan told Fox Business News in August that he expects his city to be insolvent within two years.
…
I strongly disagree. I have kids now, so I live suburban instead of urban because I don’t want the “services” of one of the worst school systems in the country. But before I had kids, police brutality and incompetence were the primary reasons urban real estate (condos, etc) held no value for me. If you paid me to live urban, I’d find a way to escape to the burbs.
Build all the condos you want, until you have a real police system and real educational system, the only people living urban around here are going to be the ones who can’t escape.
Here’s a new local billboard which I saw about 3 times on the digital billboards on the way home (to suburban civilization):
“The message on the billboards beginning Monday: “When police kill, where is the mayor?”"
Yeah, that really makes me wanna buy a condo downtown. Why, my son could be killed by the police, just like his was, and no one will be punished, what a fantastic marketing message for downtown condos.
If you paid me to live urban, I’d find a way to escape to the burbs.
To each his own. I do find it amusing how some adults are really not able to understand that others may not like what they like.
Developmentally, this is something that most humans learn before they are 2 years old:
And at around 18 months, children exhibit the ultimate precursor to empathy — understanding that other people have feelings different from our own. In one study, a group of 18-month-olds were offered crackers or broccoli — and most of them preferred crackers. Then they were set up with a with a group of adults who made “yucky” and “yummy” faces for both foods. The upshot: Toddlers who saw the adults make a yucky face for crackers and a yummy face for broccoli gave them the broccoli, even though the kids preferred the crackers.
Well, I suppose you can politicize any article of information if you like. My intention is not to. I think it is an important piece of information, politics aside, because this style of police work could be brought out of NYC to a town near you.
When are people going to snap out of it and realize enough is enough? War on terror? War on Drugs? How about the one this represents, the war on freedom.
As long as it’s only black and brown people getting stopped and frisked, this is not an issue.
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Comment by Ryan
2012-10-10 08:30:48
You’re so right, I’m white! Why worry, I’ll just move on and forget about it.
Comment by Happy2bHeard
2012-10-10 10:37:35
They can keep doing it as long as black and brown people are a voting minority.
It would be interesting to do an experiment and see if dress makes a difference. Would the kid who was stopped twice in a couple of blocks have been stopped if he were wearing a suit?
What kind of behavior would an old white woman have to exhibit to be stopped?
Comment by sfhomowner
2012-10-10 11:31:19
What kind of behavior would an old white woman have to exhibit to be stopped?
Baggy pants and a hoodie while smoking a joint?
Comment by Happy2bHeard
2012-10-10 22:55:47
I also think the kid needs to be taught the art of strategically picking his nose. Nothing says oblivious like picking your nose and eating it.
Well you dont need a car here..$104 a month and you can go from coney island to yankee stadium….
You learn to live Small…Its hard to be obese here … most subways are not handicapped accessible.. you can work late nights and still can go out for a meal at 1 am…
But the best reason lots of people DO NOT like peace and quiet of the burbs.
Who is going to buy $4.5 Trillion in risky bank assets (cough - sub prime mortgages - cough)???
Heck, it took obama 4 years to spend $5 Trillion in additional debt here in the USA. How are these banks going to do it in a year?
My guess - The EU is holding off doing anything until after the American election to help obama. After the election, bad things are going to happen pretty quickly.
—————————————
IMF Sees European Banks Facing $4.5 Trillion Sell-Off
Bloomberg - By Sandrine Rastello - 10/10/2012
The International Monetary Fund said European banks may need to sell as much as $4.5 trillion in assets through 2013 if policy makers fall short of pledges to stem the fiscal crisis, up 18 percent from its April estimate.
Failure to implement fiscal tightening or set up a single supervisory system in the timing agreed could force 58 European Union banks from UniCredit SpA (UCG) to Deutsche Bank AG (DBK) to shrink assets, the IMF said. That would hurt credit and crimp growth by 4 percentage points next year in Greece, Cyprus, Ireland, Italy, Portugal and Spain, Europe’s periphery.
The IMF said that “both Spain and Italy have suffered large-scale capital outflows” in the 12 months through June, with $296 billion and $235 billion, respectively.
“The present difficulties in the euro area provide a cautionary tale for Japan, given the latter’s high public debt load and interdependence between banks and the sovereign that is expected to deepen over the medium term,” the IMF said.
Biggest Home Lenders Buoyed by U.S. Government-Fueled Mortgages
Biggest Home Lenders Buoyed by U.S. Government-Fueled Mortgages
Biggest Home Lenders Buoyed by U.S. Government-Fueled Mortgages
Wells Fargo & Co. (WFC) and JPMorgan Chase & Co. (JPM), the largest U.S. home lenders, will post third-quarter profit buoyed by government policies intended to help borrowers.
Those firms, along with No. 3 U.S. Bancorp and fourth- ranked Bank of America Corp. (BAC), may report $6.9 billion of mortgage-banking revenue in the period, a 37 percent increase from a year earlier, Christopher Kotowski, an Oppenheimer & Co. analyst, said in a research note. That will help the companies generate a combined $10.9 billion in profit, according to the average estimate of analysts surveyed by Bloomberg.
The figures show the degree to which U.S. lenders have become dependent on revenue from mortgages to cushion weakness in other lending and investment-banking businesses. The banks are benefiting as President Barack Obama’s administration targets housing in an effort to stimulate the economy. They’re earning more on each home loan they sell as Federal Reserve purchases of mortgage debt widen profit margins.
“Government policy is encouraging banks to make mortgages, and they want to keep it that way,” said Nancy Bush, an analyst and contributing editor at SNL Financial LC, a bank-research firm in Charlottesville, Virginia. “For them it’s sort of a beneficent cycle right now.”
…
Lord help you if you own a house in one of these places.
———————————————
Moody’s targets California cities for downgrades
Yahoo News | 10/10/2012
One of the nation’s top credit rating agencies announced Tuesday that it will review dozens of California cities for possible downgrades amid mounting concern over municipal bankruptcies and bond defaults.
Moody’s Investors Service will scrutinize the ratings of bonds in 30 California cities. The agency already had downgraded eight municipal pension obligation bonds.
Cities under review include Danville, Santa Monica, Sacramento and Fresno. Moody’s will examine an array of factors, including falling tax revenue and increased spending.
Downgrades would increase borrowing costs for cities and could hinder their ability to borrow.
Three California cities — Stockton, San Bernardino and Mammoth Lakes — filed for bankruptcy over the summer, although Mammoth’s filing was the result of losing a lawsuit.
Last week, the agricultural city of Atwater declared a fiscal emergency and became the latest embattled community to consider bankruptcy.
The other cities that Moody’s has targeted for possible downgrades are Azusa, Berkeley, Colma, Downey, Glendale, Huntington Beach, Inglewood, Long Beach, Los Gatos, Martinez, Monterey, Oakland, Oceanside, Palmdale, Petaluma, Rancho Mirage, Redondo Beach, San Leandro, Santa Ana, Santa Barbara, Santa Clara, Santa Maria, Santa Rosa, Sunnyvale, Torrance and Woodland.
I would add to this the threatening lawsuit by the re-insurers in the Stockton BK…The re-organization was hands off on the unions while the bond holders are threatened with huge haircuts…The insurers are saying they will take it all the way to the supremes…It may take time but if it goes there and the bond holders prevail it will shake the very foundation of the bullet-proof pay, benefits and pensions in the municipal sector…
The politicians in charge of public union goon controlled cities OWE their job to the support of the public union goons.
They will NEVER turn on them. Even if it means bankrupting and destroying their cities.
But they also sell municipal bonds that BY CONTRACT bondholders get in first in line in any bankruptcy.
I guess they think they can all do a GM and wipe out the bondholders and not touch the unions.
It is not going to work. And if it does - who in their right mind would ever buy municipal bonds from a public union goon controlled city or state ever again?
Going after the unions means tangling with CalPers and this means big legal costs. Our little town speant $4M in the last few months on legal fees.
The threats that got our town council to settle, were
#1 Judge might thow out our petititon and we would lose bk protection and be exposed in state court.
#2 CalPers would get involved and make litigation too expensive.
Now the town is backpedaling, they made a deal that costs $52M over 23 years and want to fund it by cutting the police department in 1/2 and closing a pool / park. The public didn’t get to give input on making a settlement but their input is welcome on how to pay for it. Most object to any cut in police.
We have voted in 4 tax measures that bring in the same amount that will be paid to the judgement holder in this settlement. The reasonable answer is the least popular but here it is. Keep in mind that the judgement holder did not earn his $42M judgement and the town’s citizens had no part in any wrong doing. We should repeal all the tax measures, cut no services, rely on sales tax and tot alone and present a payment plan that reflects that we can pay very little beyond basic services.
All 4 tax measures were voted in to fund specific things, now they will fund payment of a judgement because our town leaders were not willing to keep an agreement.
Looks like we will likely raise taxes even more while we cut services and fight about their importance.
Government Gone Wild.
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Comment by ahansen
2012-10-10 18:53:13
Can’t the townsfolk file a class action suit against the town leaders who screwed up? Or disincorporate and start all over? What would happen if everyone just said “no” and refused to pay the assessment?
Seems to me you could argue this is an illegal tax assessment (inasmuch as you didn’t get to vote on it) and have Howard Jarvis Taxpayers Assn. http://www.hjta.org/ go after the city council singly and severally. I sure wouldn’t lie down and take it….
Yesterday I ran into a town council member in the bank. I told him that we should not honor the deal they just made to pay $52M to a developer to settle the town’s bankruptcy. I said they made this deal because they were afraid of scenario laid out by a mediator and we didn’t get our day in bankruptcy court. The town council member told me they had to settle because of the threat of state bankruptcy court.
I told him there is no such thing as state bankruptcy court and realized that the elected officials that get us into and out of bankruptcy don’t know what they are doing.
This must surely be propaganda. It can’t be true.
WE heard for decades how all the Illegal Migrants from South of the Border were a BOON to Business.
They even set up dozens of “sanctuary cities”. Mutliculturalism (spelled correctly) and ‘diversity’ were going to lead California to a new age of prosperity. Then all the whites started moving out, except those with government jobs and a guaranteed pension plan.
“Lord help you if you own a house in one of these places.”
I disagree that blame should be entirely laid at the feet of public unions. There are other issues in play, including overly rosy estimates of returns on pension money, falling property tax revenues and other property related revenues. Mammoth Lakes got in trouble due to promises made to developers.
And there are issues that are unique to California. Many municipalities saw the arbitration process for union negotiations favoring the unions. So they rolled over without fighting very hard.
That said, I agree with the sentiment. And it is a strong argument against buying. 30 years is a long time and a lot can go wrong in that timeframe that could make buying a bad decision - bad neighbors, deterioration of the neighborhood, property tax increases, economic decline in the local area. Small towns dependent on one business or industry are especially prone to the last.
“Moody’s targets California cities for downgrades”
Did the morons who run these cities ever stop and think about a possible rainy day? No, they doubled down on spending, let the unions run rampant with the budget and they came up with brilliant money saving ideas like “sanctuary cities”….yeah let’s give public services to thousands of illegal immigrants, that should save us a few bucks.
I will say they were successful in one regard, they created enough union workers and dependent poor to assure themselves re-election even under the worst of circumstances…exactly the same template the Obama administration has put into place.
Comment by Cantankerous Intellectual Bomb Thrower™
2012-10-10 05:34:38
Is now a good time to buy the dip?
Stock futures dip after Alcoa results, outlook
Traders work on the floor of the New York Stock Exchange at the opening of the trading session in New York October 5, 2012. REUTERS/Mike Segar
By Chuck Mikolajczak
NEW YORK | Wed Oct 10, 2012 8:21am EDT
(Reuters) - Stock index futures edged lower on Wednesday after Alcoa kicked off earnings season by warning of a slight slowdown in some markets, highlighting concerns about sluggish global growth, even as its quarterly results beat expectations.
Stronger demand for aluminum products from airplane and automobile producers helped Dow component Alcoa Inc’s (AA.N) third-quarter profit beat analysts expectations, but it scaled back its global aluminum consumption outlook for 2012, citing the slowdown in China. Alcoa shares lost 0.7 percent to $9.07 in premarket trade.
Lackluster growth in China, the world’s second-largest economy, is expected to rein in corporate earnings in the third quarter and dent profit forecasts as the Asian nation feels the pinch of the debt crisis in the euro zone, a key trading partner.
Earlier in the week, the World Bank cut its growth forecast for East Asia on concerns China’s slowdown could last longer than expected.
“The slowing global growth story has always been an undercurrent that has been evident in the market place, but it was hard to take that fact and employ it inside of an investor trading strategy when you still had central banks flooding the world with cash and supporting asset prices,” said Keith Bliss, senior vice president at Cuttone & Co in New York.
“So we are at an interesting inflection point in the market place where people could start focusing on the fundamentals and examine third-quarter earnings thoroughly” against a backdrop of slowing global growth and how that will impact the next few quarters’ earnings and equity valuations, Bliss said.
Analysts forecast third-quarter earnings of Wall Street’s S&P 500 .SPX companies would fall 2.3 percent from the year-ago quarter, according to Thomson Reuters data, which would be the first drop in U.S. quarterly earnings in three years.
According to data through Tuesday, 94 companies in the benchmark S&P index have issued negative outlooks, compared with 22 positive pre-announcements, for a ratio of 4.3, the weakest showing since the third quarter of 2001.
…
The future of California can be seen in Detroit Michigan.
50 Years of democrat and public union domination has brought that once thriving city to it’s knees.
And so it will be with California.
————————————-
Bankrupt California
National Review | 10/9/2012 | Victor Davis Hanson
I thought of my fellow Californian Energy Secretary Steven Chu last week, when I paid $4.89 a gallon in Gilroy for regular gas — and had to wait in line to get it. The customers were in near revolt, but I wondered against what and whom. I mentioned to one exasperated motorist that there are estimated to be over 20 billion barrels of oil a few miles away, in newly found reserves off the California coast. He thought I was from Mars.
California may face the nation’s largest budget deficit at $16 billion. It may struggle with the nation’s second-highest unemployment rate at 10.6 percent. It will soon vote whether to levy the nation’s highest income and sales taxes, as if to encourage others to join the 2,000-plus high earners who are leaving the state each week. The new taxes will be our way of saying, “Good riddance.” And if California is home to one-third of the nation’s welfare recipients and the largest number of illegal aliens, it is nonetheless apparently happy and thus solidly for Obama, by a +24 percent margin in the latest Field poll. The unemployment rate in my hometown is 16 percent, the per capita income is $16,000 — and I haven’t seen a Romney sticker yet.
California schools rate among the nation’s lowest in math and English, but our shrinking numbers of teachers are among the country’s highest paid. One-third of the nation’s welfare recipients live in California, and 8 out of the last 11 million people added to the California population are enrolled in Medicaid, but we are also the most generous state in sending remittances to foreign countries — we contribute a third to a half of the estimated $50 billion that leaves the U.S. each year for Mexico and elsewhere in Latin America. It is puzzling in the small towns of the San Joaquin Valley to see both federal and state medical centers and nearby offices that specialize in cash transfers to Mexico. But no one seems to see any disconnect between the public need for free health care and the private desire to send money to Mexico.
No, what brought Detroit down was the offshoring of jobs and auto executives who thought they could continue to sell overpriced crap while the Japanese sold cheaper and FAR better cars.
It’s not just outsourcing it’s technology. The # of workers it takes to build a car has been falling rapidly over the last couple of decades. What we see in Detroit will happen across the globe and it won’t be pretty. At some point gov will have to choose between making jobs and war/police state.
Technology has destroyed a great many jobs and high-paying careers.
There is much discussion about the offshoring of jobs here and elsewhere.
What about job/career dislocation due to both intended and unintended effects of technology?
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Comment by turkey lurkey
2012-10-10 08:38:57
Technology displacement is generally understood as inevitable, but sending jobs to communist or non-ally countries is just plain treason, that’s why.
Comment by MacBeth
2012-10-10 09:06:57
Uh, no.
When you have technology displacing jobs, then those jobs also are going to be displaced geographically over vast distances, not just locally.
Jobs that are being sent overseas are being sent overseas because they can be. It’s technology that has made it possible.
Most tech people are smart enough to understand what their work has done to the rest of industry. They know that their niche actively seeks to destroy others (while creating new ones). However, not all are that bright.
Comment by turkey lurkey
2012-10-10 11:00:04
Uh, yeah. I’ve been up close and person with it for decades from all sides.
Labor displacement as a direct result of technology was an issue into the 1990s and then most people realized it was unstoppable and almost acceptable as long it was OUR TECHNOLOGY.
Labor displacement to foreign countries for slaves wages, however, was not and still is not acceptable.
Comment by sfhomowner
2012-10-10 11:40:46
The former SFrenter was interviewed in this article:
Shaken by the latest digital gold rush, San Francisco struggles for its soul.
Excerpt:
n spite of the obvious urban warts, the word is out: San Francisco is the world’s leading tech paradise. At a rate eclipsing the dot-com boom of the 1990s, tech companies are setting up shop in the city by the hundreds, drawn by its beauty and livability, as well as the deep pool of engineering talent here and, yes, city hall’s increasingly tech-oriented policies.
Young entrepreneurs from as far away as Denmark, Singapore, and France can be seen with real estate agents in tow, roaming through converted South of Market lofts still vacant from when the previous bubble burst more than a decade ago. The city is currently home to more than 1,700 tech firms, which employ 44,000 workers, up a whopping 30 percent from just two years ago. And San Francisco has been the nation’s top magnet for venture capital funding for three years in a row. Consequently, the distinction between Silicon Valley and San Francisco has all but disappeared. It is us, and we are it.
The city is clearly benefiting from this new mind meld. San Francisco’s 7.6 percent unemployment rate handily beats the state’s 10.9 percent rate, and it’s one of the few counties in California that has experienced significant property-tax growth during the economic crisis, driven largely by the hot real estate market in the tech-heavy SoMa area. The new tech boom has helped add $6 billion to the city’s tax rolls over the past year—an increase of more than 4 percent over the previous fiscal year. There’s a sense of pride and excitement in the air, a feeling that—once again—we’re the ones creating the technologies that are driving the digital era. San Francisco is quite literally changing the world.
But despite all this, there is trouble in paradise. The unique urban features that have made San Francisco so appealing to a new generation of digital workers—its artistic ferment, its social diversity, its trailblazing progressive consciousness—are deteriorating, driven out of the city by the tech boom itself, and the rising real estate prices that go with it. Rents are soaring: Units in one Mission district condominium complex recently sold for a record $900 per square foot. And single-family homes in Noe Valley, Bernal Heights, and other attractive city neighborhoods are selling for as much as 40 percent above the asking price. Again and again, you hear of teachers, nurses, firefighters, police officers, artists, hotel and restaurant workers, and others with no stake in the new digital gold rush being squeezed out of the city.
Comment by Montana
2012-10-10 13:24:49
Wow. I too would much rather live in SF and work down the peninsula than the other way around. Is there still great train service there?
Comment by cactus
2012-10-10 13:37:07
But if people like us, who helped make San Francisco what it is, get pushed out of the city, who’s going to teach the next generation of kids? Who’s going to take care of them in the hospital?”
The Chinese and Indians will send their kids to private schools
what you see is the future BTW I work in high tech and its crazy. I thought about moving to headquaters in Santa Clara but decided against it too expensive
Comment by sfhomowner
2012-10-10 14:34:50
Is there still great train service there?
Yeah, peninsula train Caltrans is alright, but who wants to commute? But the MUNI (city buses and trains) are ridiculously unreliable.
I drive 3 miles to work and find even that to be annoying. I’d bike or run or motorcycle if I didn’t have kids.
I think the techies with the buses that pick them up right in their neighborhood are pretty great. I wouldn’t mind that.
Comment by sfhomowner
2012-10-10 14:37:37
The Chinese and Indians will send their kids to private schools
Makes no difference. Private school teachers make even less than public school teachers. Damn those unions.
Labor costs per unit have fallen, yet price per unit has risen.
And cabana boy wonders why he gets no respect from me.
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Comment by MacBeth
2012-10-10 09:09:54
How is it amazing?
It can be expected as exported technology lowers U.S. productivity as a share of either (or both) worldwide productivity or as compared to other individual countries.
Comment by turkey lurkey
2012-10-10 11:04:25
The US still maintains the lead in worker productivity to this day, by FAR, even after decades of these transfers. In fact, it has INCREASED.
If wages had kept up with productivity gains, your average worker would never have had to borrow anywhere NEAR as much as was borrowed over the last 20 years.
Comment by RioAmericanInBrasil
2012-10-10 11:11:29
If wages had kept up with productivity gains, your average worker would never have had to borrow anywhere NEAR as much as was borrowed over the last 20 years.
Good point. In the late 60’s they’d say all the tech and productivity would have us all working 20 hours a week for great money. “Wha Happennd”??
No question that health care for illegals in California has taken its toll .But who benefited the most by these policies ? It was a supplement to Business in that they didn’t have to pay for health care, yet they could have cheaper illegal labor .The medical industry got paid by the Government for taking care of these needs . Mexico benefited by having their Social costs added to
USA or California ,while they got cash flow send back to Mexico .
Business was a beneficiary by the business that illegals gave to business . Tax revenues increased by more illegal business but it didn’t offset pay outs concerning benefits given .
You can’t blame the illegals for trying to improve their life ,and its pretty clear that the Government has been half ass about controlling our borders .
It was a supplement to Business in that they didn’t have to pay for health care, yet they could have cheaper illegal labor..You can’t blame the illegals for trying to improve their life ,and its pretty clear that the Government has been half ass about controlling our borders ?
You can’t blame the illegals for trying to improve their life ,and its pretty clear that the Government has been half ass about controlling our borders .s
I hear this stupid argument all the time. They just want a better lives for their family. You can’t blame them for that…..what part of Illegal don’t people understand.
There’s a reason we have Immigration Laws. They support a stable society and population.
But, my argument is that the guy holding a gun to the cashier and robbing the register, or the hoodlums selling drugs on city streets, well, they all just wanted better lives, too.
Like everyone else. They just chose to gain by “illegal” methods. I guess we should just let them go, too.
I hear this stupid argument all the time. They just want a better lives for their family. You can’t blame them for that…..what part of Illegal don’t people understand.
There’s a reason we have Immigration Laws. They support a stable society and population.
But be honest. If you could make 7 figures in Canada and they really didn’t seem to mind you coming up and doing so except for a few cranks that were easily avoided, even if it was “technically” against the law wouldn’t you do it? That’s why lots of people empathize with the illegals.
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Comment by Housing Wizard
2012-10-10 11:04:58
If you were starving you would especially cross those borders if you knew the USA wasn’t that serious about
stopping you, especially if you knew it was easy to get a
farm picking job or a cheap manufacturing job .
How many do we have now ,about 45 million illegals . But don’t feel bad the same thing has happened in France with their illegals ( of a different race ).
My whole thing is that if we were serious about illegals we would of been serious about illegals ,but apparently we weren’t that serious about stopping it .
The Mexican people feel it was their lands here anyway at one time .
But ,all hands out are getting more and more unafforable these days ,especially health care .
Comment by Montana
2012-10-10 13:27:46
The Mexican people feel it was their lands here anyway at one time .
So their schools don’t teach them about the Treaty of Guadalupe Hidalgo?
You can’t blame the illegals for trying to improve their life
If TSHTF here in the states, and you couldn’t feed yourself or your family, or felt unsafe, most of us would do whatever it takes to get out and, if we had t, sneak into another country where there were jobs, food, and safety.
As well as half-assed about controlling who gets our services. It seems only fair to me that employers who benefit from illegal labor pick up the costs for their health care and kids’ education.
Comment by Cantankerous Intellectual Bomb Thrower™
2012-10-10 05:40:13
Does it seem to anyone besides me like there is a sudden severe shortage of good news on the international financial front?
European shares, euro slip on growth, debt fears
A trader looks at computer screens at Madrid’s bourse August 2, 2012. REUTERS-Susana Vera
Traders work at their desks at Frankfurt’s stock exchange August 8, 2011. REUTERS-Pawel Kopczynski
A man clicks his nails as he looks at an electronic board displaying share prices outside a brokerage in Tokyo September 20, 2012. REUTERS-Yuriko Nakao
By Marc Jones
LONDON | Wed Oct 10, 2012 7:19am EDT
(Reuters) - European shares fell for the third day running on Wednesday and the euro came under fresh pressure along with Spanish and Italian bonds as economic anxiety was compounded by stuttering progress in the euro zone’s battle against its debt crisis.
After rallying between June and September, major markets from equities to commodities have traded more cautiously in recent weeks as the effect of central bank support has given way to renewed growth and debt concerns.
In its semi-annual check on the world’s financial health, the International Monetary Fund summed up the fears, saying the euro zone’s crisis was an increasing threat to global financial stability and that confidence was “very fragile”.
There was also a warning that the plodding progress in the euro zone meant European banks were likely to offload $2.8 trillion in assets over the next two years to cut their risk exposure, a $200 billion increase on its last forecast.
The Euro STOXX 50 index of European bluechip firms, which has lost over 2 percent in the last week, was down 0.5 percent at 2,461.74 points by 1015 GMT (0615 EDT) as it, like the euro, sagged on the IMF’s comments.
London’s FTSE, Frankfurt’s DAX and France’s CAC were all down by mid-morning. The MSCI index of global shares slipped 0.3 percent after Japanese stocks slid 2 percent to a two-month low in Asian trading.
Daiwa securities economist Tobias Blattner noted that the IMF cut its global growth forecasts for the second time since April on Tuesday, undermining the effect of stimulus measures announced by the U.S. Federal Reserve, European Central Bank and other authorities.
“You see positive sentiment is slowly but surely fading away,” he said, citing uncertainty in the United States over the “fiscal cliff” - government spending cuts and tax rises due to take effect early in 2013 unless Republicans and Democrats can agree alternative measures.
“The risks are probably the biggest in the U.S. because you don’t know the outcome of the presidential election which obviously determines whether or not you can overcome the fiscal cliff. And you add to that the uncertainty in the euro zone,” said Blattner.
…
The risks are probably the biggest in the U.S. because you don’t know the outcome of the presidential election which obviously determines whether or not you can overcome the fiscal cliff.
So one party is really going to fix it? Obviously?
Time to get screwed over with a different song on the stereo. Electing Mitt will make things worse. Electing Obama will make things worse. Things haven’t gotten bad enough for an “American Spring” moment. The the Tea Party and Occupy movements realize they have more in common with each other than with the different flavors of plutocrats they’re being manipulated into supporting, THEN things might get better.
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Comment by Carl Morris
2012-10-10 13:27:52
[If] the Tea Party and Occupy movements realize they have more in common with each other than with the different flavors of plutocrats they’re being manipulated into supporting, THEN things might get better.
It will take a LOT of tolerance in both of those camps to resist the attempts to manipulate them into hating each other. Much more than either have shown so far.
Comment by Cantankerous Intellectual Bomb Thrower™
2012-10-10 05:44:18
Apparently the IMF economists doubt the Fed’s ability to keep the lid on interest rates forever. Is there any technical reason behind their doubt, or is it more a matter of superstition?
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.
The International Monetary Fund has a new long-term worry: decades of higher interest rates. Don’t get too comfortable with low borrowing costs, is the downbeat message from the normally overoptimistic fund’s flagship World Economic Outlook. Slightly feebler growth of 3.3 percent for 2012 is the short-term concern. But past fiscal excesses and an ageing population could push up interest rates for a generation.
The IMF is not well suited to delivering bad news. With 188 member nations, the fund is typically eager not to cause offense or rattle global markets. Upbeat economic forecasts also make it easier to justify crisis loans. This bias probably lies behind the IMF’s excessive optimism over economic growth in Greece, which has turned out far worse than the fund predicted.
Little surprise, then, that the IMF’s army of economists have belatedly scaled back their growth forecasts for this year and next. Indeed, given the euro mess, the expectation of 0.2 percent growth in the single currency area for 2013 may still prove too sanguine. More remarkable, however, is the IMF’s longer term gloom – at least for rich nations. While the Federal Reserve is keen to convince markets that low interest rates will last as far as the eye can see, the IMF sees a grim future beyond monetary easing.
The fund warns of a vicious cycle of high government debt pushing up borrowing costs, which in turn raises the cost of servicing bonds. Even without acute sovereign debt crises of the kind afflicting Greece and Spain, ageing populations in most developed economies will reduce available savings for investment and so push up borrowing costs all the way out to 2057. Raising taxes to service pricier debt will also retard economic growth.
In other words, the IMF presents a compelling case for shunning the government bonds of highly indebted rich countries and shifting to faster-growing and less indebted emerging markets. Of course, economic forecasting is not the IMF’s forte, and predicting decades into the future is even harder. But its long-term concerns will give investors something else to worry about.
The IMF’s worry shouldn’t be rising rates it should be wealth so concentrated that the velocity of money collapses. This is what our future holds. Workers with no earning power controlled by masters of the universe with boat loads of money w no good investment options.
The IMF’s worry shouldn’t be rising rates, it should be wealth so concentrated that the velocity of money collapses.
That’s a great observation. The IMF IS actually worried about it. Here’s from 2003 below. But here is what should scare everybody. The demonization of the type of concepts addressed below. The right has been so effective in their PR machine the past 10 years that many would today call the following IMF language hard-core “Soooshalism”. As if.
The IMF is specifically talking about the detrimental effects of wealth/income inequality and the need for redistribution in many cases. This ain’t no “commmmie” talk people. This is rational, capitalistic economics absent extreme political dogma.
Wealth Creation and Social Justice: an IMF Perspective
4. Equity issues are also pertinent. The Fund has come to recognize that growth in the context of high income inequality is not likely to have a large impact on poverty reduction. And furthermore, improvements in income distribution are likely to be an important instrument for the achievement of economic growth.
At the time of the IMF’s 50th anniversary, the then-Managing Director, Michel Camdessus, explicitly emphasized the importance of policies to improve the income distribution and the implications for IMF operations of such a concern. He suggested that public support for a sustained course of adjustment and reform is most likely when “the distribution of income and opportunities to attain economic advancement are seen as relatively fair or at least not outrageously biased toward privileged groups.” Moreover, he described the various channels—economic, political, and social—through which improvements in income distribution may positively affect the growth process and a distributional content.
As such, while noting that income distributional issues are not the central mandate of the IMF, he emphasized that “the IMF cannot but call the attention of the country and the IMF membership to income inequality and its potential adverse consequences for the social fabric and sustainable growth.” Thus, redistributive policies, particularly expenditure policies, are widely recognized and supported as a way to improve the income distribution in member countries.
….it is also clear that growth alone does not eliminate absolute poverty….. Redistributional policies are thus of critical importance in “reducing” poverty or at least alleviating some of its most adverse effects, particularly when income inequality is severe.
Comment by Cantankerous Intellectual Bomb Thrower™
2012-10-10 05:50:09
Lately the correlation between dollar strength and U.S. stock market weakness has been one of the most reliable inverse relationships in financial history. When cash is king, stocks are peasants. The only thing that can save Wall Street now is the Fed, and the future efficacy of their efforts seems doubtful.
Dollar, yen rise on Greece, third quarter earnings concerns
NEW YORK | Tue Oct 9, 2012 4:33pm EDT
(Reuters) - The dollar and yen rose against the euro on Tuesday in a safe-haven bid ahead of upcoming U.S. third-quarter corporate earnings results and on uncertainty about Greece and Spain.
Gains in the safe-haven U.S. and Japanese currencies accelerated after Wall Street stocks .SPX fell further, with technology shares hit by several brokerage downgrades of companies including Intel (INTC.O).
Repeated warnings about the economy - the latest coming from the International Monetary Fund - have left investors cautious ahead of what could be a disappointing U.S. earnings season.
Aluminum company Alcoa Inc, became the first Dow Jones industrials component to report results when it posted third-quarter earnings per share of 3 U.S. cents from continuing operations excluding items. Analysts’ consensus estimate was for break-even.
The reaction to the news was muted on foreign exchange markets but investors may pay more attention when International Business Machines (IBM.N), the first large technology bellwether, reports on October 16. Technology is the largest component of the Standard & Poor’s 500 index.
Weak earnings results could weigh on equity prices and the euro and bolster the appeal of safe-haven currencies. Stocks and the euro move together 90 percent of the time, Reuters data showed, with the euro rising when stocks gain.
“It looks like a risk-off trade here. We saw stocks take a dive,” said Ronald Simpson, managing director of global currency analysis at Action Economics in Tampa, Florida. As markets enter the earnings season, “equities could be a little choppy and that might drive the dollar direction a little bit.”
…
Perhaps they should have just have sent X amount to every one. I suspect if they had very little would be have been used to pay of debts; but it would have increased consumption.
obama has put $5 Trillion in additional debt on our children’s back in just four years, An amazing accomplishment considering the total national debt in America for 225 years was about $10 Trillion.
To put this in perspective - The national debt has increased from $10.6 trillion to $16 trillion, or 50 percent, since President obama took office.
Every man, woman, and child in the United States owes more than $50,000 as his or her share of the national debt.
But I will give obama credit.
His “bail-out a free goodies” policies and loose fiscal discipline has re-ignited the housing bubble.
We now (AGAIN) have bidding wars, easy to get mortgages, no down payment mortgages and even buyers writing letters to take care of the garden fairies if they get the “opportunity” to buy a seller’s house.
Thank you obama for hope and change. I hope we get four more years. Because life was great when America was in a housing bubble as we were ALL rich.
And Representative and Vice Presidential nominee Paul Ryan.
Obama is admittedly a muslim socialist. Ryan is just a hypocrite and a LIAR!
Comment by turkey lurkey
2012-10-10 08:15:34
You forgot something.
President… who?
Comment by X-GSfixr
2012-10-10 14:20:25
“…$50,000 as his or her share of the National Debt.”
Does anyone really believe that they are ever going to get a tax bill for the “National Debt”??????
Hell no. Because if it happened, the government would actually create a fair tax system. Starting with the “producers” paying their fair share. And/or reduction of the multitude of bennies they get, or extort from city/state/Federal governments.
Air traffic control is a good example. They want government services privatized. So the Euros privatized ATC. Now they are bitching about “excessive ATC fees”.
(What’s really fun/started the whining is what started after January 1. Now, not only do you have to pay for private ATC to/from your destination, but you also get charged from ALL of the countries within your aircraft’s range, in case you divert for some reason…….You have an awful lot of countries “within range” when the aircraft can fly 4500 nautical miles…….Go Iceland!)
Lets start with a “Don’t let the door hit you on the Azz on the way out” renouncement of citizenship tax.
Remind us again
1. How much of this is due to Bush tax cut for the elite
2. How much of this is war spending.
3. How much of this is due to decreasing tax revenue that resulted from history’s largest credit bubble.
4. How much of this is medicare prescription drug plan
5. How much is due to mandated spending on unemployment and medicaid that saw increased use due to rising unemployment due to the collapse of history’s largest credit bubble.
How much of this is due to Bush tax cut for the elite….war spending….decreasing tax revenue that resulted from history’s largest credit bubble…..medicare prescription drug plan
A majority chunk of it. Here’s a graph halfway down the story that helps. It’s over a year old but the general magnitude is still valid.
George Bush owns this deficit
Useless news alert: Tax cuts and war contribute more to our burgeoning debt than Obama’s new policies
The total cost of new policies initiated during the administration of George Bush: $5.07 trillion. Barack Obama: $1.44 trillion.
obama has put $5 Trillion in additional debt on our children’s back in just four years, An amazing accomplishment
It IS truly amazing. Especially in light of the fact that Barack Obama has the lowest increases in spending of any recent president. But the BushTaxCutsForTheRich helped Obama a lot in this “amazing accomplishment”.
Rex Nutting, the international commentary editor for the financial website MarketWatch:
“Almost everyone believes that Obama has presided over a massive increase in federal spending, an ‘inferno’ of spending that threatens our jobs, our businesses and our children’s future. Even Democrats seem to think it’s true. But it didn’t happen. Although there was a big stimulus bill under Obama, federal spending is rising at the slowest pace since Dwight Eisenhower brought the Korean War to an end in the 1950s.”
Rated: MOSTLY TRUE at Polifact dot com
“Meanwhile, we would’ve given a True rating to the Facebook claim that Romney is wrong to say that spending under Obama has “accelerated at a pace without precedent in recent history.” Even using the higher of the alternative measurements, at seven presidents had a higher average annual increases in spending. That balances out to our final rating of Mostly True.”
IMO they’re printing to keep the whole ship afloat and if you think about our government’s liabilities, it’s a whole bunch.
When the $61.6 trillion is broken down per household, that equals $534,000 — a figure “more than five times what Americans have borrowed for everything else,” according to USA Today.
By program, it looks like this:
•Medicare: $24.8 trillion
•Social Security: $21.4 trillion
•Federal debt: $9.4 trillion
•Military retirement/disability benefits: $3.6 trillion
•Federal employee retirement benefits: $2 trillion
•State, local government obligations: $5.2 trillion
IMO we should put the Congress on a diet. Until they balance the budget and pay down the debt, the Congressional retirement funds should be shut down. These people will not quit spending unless its in their own best interest.
…not mention that the article, in the interest of hyperbole, barely mentions that this is spread out over the next 20 years, making the actual obligation per household… $26,700 per year.
I love how they like to front load that debt and assume that every American is equally responsible for paying it back. They also ignore the fact that most of that debt is still owned by the US and the part we don’t own is offset by the debt of other countries that we own. Wake me up when US interest rates rise. I’m settling down for nice decade nap.
Yes, it would of been cheaper to just pay the people or the loan investors for the lending crime spree ,rather than the Culprits and Lending Ponzi - scheme promoters .But ,that should of come at the expense of the Culprits first and foremost ,than the taxpayers secondary to that .
The way they have gone about trying to solve the crimes of the Housing Boom easy credit expansion is to prop up the Culprits and make sure the corrupted systems survive and even become bigger ,and try to prop up fake real estate prices that were artificially raised by fraud at the tax payers expense, along with a war on savors and encourage continued mal investment by keeping the Wall Street corrupted casinos alive and kicking .
In spite of Corporations weilding the damage they did ,nobody takes any responsibility ,as if Corporations are above the law ,along with their CEO’s.
I think it’s about time that the rein of the powerful Monopoly Corporations is put under scrunity . The Political influence by these Corps are huge and its almost as if they are the entities that demand the policies ,not the Government .
People have become secondary to Multi-national Corp. America and Wall Street and the Banks and the Military and the RULE OF LAW was thrown down the drain .The corrupted systems are alive and kicking ,and they are designed to make the money flow to these entities . The worker bee middle class has just been thrown under the bus and now they plan to come after Social Security and pensions ,and keep the money flowing to the bribe Politicians Masters ,and any other thing that was promised .
Just give them more and that will stimulate business they say . Yes ,it will stimulate business right into their pockets . Its all BS . Miltary /Industrial takeover ,just like Elisenhower warned about .
‘would it have been cheaper just to pay off every ones mortgage’
Probably, but what would have happened next? House prices would have plummeted as the cost basis would be near zero and there would be no obstacle to sell.
I hypothesized back in 2005; when the Fed creates money, it’s all blips on a hard drive. Being an accountant, I saw that it would have to be in the form of debits and credits. So why not, I asked, couldn’t the Fed just debit this, credit that, and the housing bubble goes away?
This gets to what the powers at the Fed want; to keep their power. Such a move would expose them for what they are. They have to keep the people of the world believing the illusion that they are like the Wizard of Oz, back behind the curtain, pulling levers and pushing buttons, making it all work. When in fact they actually control nothing. They can manipulate, distort, but they can’t create wealth, or sustainable jobs/growth.
Their Flying Monkeys behind the curtain, Washington politicians, work hard to keep the illusion alive too. As the $500,000 liability shows. That number has been calculated (by the Fed no less) since 2005, and it’s probably much higher now. It can’t possibly be paid back. ‘But they have so many monkeys running around serious looking hearings’, you say. ‘Look, they’re on CSPAN, and they look so serious!’ By golly, they’re ‘grilling’ Bernanke, there must be accountability here, the system is real!
But it’s not; it all comes down to confidence. And once masses of people lose confidence in the Fed and US govt, their power goes away instantly, like the illusion it is. And that’s why they don’t snap their fingers and eliminate all our problems, as they would have us believe they could do.
I don’t know that is what will happen. I’m just pointing out that central banks have limits to what they can accomplish and how much of an illusion their so called power is. If central banks could create real wealth, there would be no poverty in the world. The question that should be asked, IMO, is do central banks and their debt based system hinder what does create wealth?
As I stated a few days ago, their confidence game is failing. The election is a mere distraction and the failing confidence will be co-opted by a new presidential term but it won’t work. Half the country have confidence because they want to believe(even to the extent of clicking their heels together). The other half won’t “believe” unless their guy is elected. It’s the biggest bull$hit scam ever.
These guys are moneychangers. If you don’t understand, do some reading as they’ve been around for a few thousand years.
Comment by Cantankerous Intellectual Bomb Thrower™
2012-10-10 05:54:12
I guess now really is the time for dips to buy? At least in India, the latest “flash crash” victim country…
Temporary market correction an opportunity to buy By Ambareesh Baliga
October 7, 2012
Ambareesh Baliga
(The views expressed in this column are the author’s own and do not represent those of Reuters)
Opposition party protests against the UPA coalition government’s economic reforms could not puncture market sentiment in the past four weeks. One domestic brokerage house dealer’s “fat finger” did it in just a few seconds.
Friday’s flash crash at the National Stock Exchange made some people doubt the exchange platform’s stability and the Indian stock market, which was brought to its knees within a few seconds with a 6.5 billion rupee selling order across 59 stocks.
The mood was buoyant earlier on Friday after fresh reforms announced the previous day, and I thought the Nifty was firmly on its way to 5,850/5,900 – until all hell broke loose.
Though the markets tried to recover after the crash, sentiment was spoiled. It was not a question of our economic stability, but the exchange platform stability which occupied the minds of traders.
A number of traders lost their long positions as stop-losses were triggered. Those who were waiting to sell at higher levels lost their nerve when the markets reopened for trading. And those who were waiting to buy at lower levels thought it would be wise to wait a while longer to see how the drama unfolded.
…
Comment by Cantankerous Intellectual Bomb Thrower™
2012-10-10 05:57:12
ft dot com
October 9, 2012 12:58 pm
India flash crash to see tighter controls
By James Crabtree in Mumbai
Indian authorities are set to tighten trading rules as part of a probe into last week’s “flash crash”, which briefly wiped close to $60bn from leading equities and heightened investor concerns about fragile markets in Asia’s third-largest economy.
The Securities and Exchange Board of India announced the investigation after the Mumbai-based National Stock Exchange’s “Nifty” index of leading shares fell almost 16 per cent in a matter of minutes last Friday following an erroneous trade by a local broker.
That a so-called “fat finger” manual error caused the plunge, rather than an automated algorithm, has provided some relief to market observers given global concerns over ultra-fast computer trades following a crash in the US that wiped about $850bn from the Dow Jones index in May 2010.
But even with the prospect of tighter controls, many analysts say the episode raises troubling questions for India’s nascent markets, specifically over who is to blame and whether any mooted reforms would stop a repeat occurrence.
Friday’s drama began at 9.49am local time when the NSE, the larger of India’s two main bourses, saw shares drop sharply after broker Emkay Global accidentally placed dozens of sell orders worth Rs6.5bn ($125.7m).
Although Emkay quickly admitted its misstep, it is yet to explain the nature of the error, which is understood to involve a data entry mistake, confusing the price of shares to be sold for the volume – resulting in a much larger trade than intended.
The resulting fall automatically shut the market, which remained closed for about 15 minutes.
…
ANGELA Merkel defied large protests by flying into Greece last night for a heavily guarded six-hour visit to show her support for the country that is Europe’s economic weak link.
The German Chancellor was the centre of the tightest Greek security operation in more than a decade as 7000 police patrolled streets and snipers were positioned on roof tops in central Athens.
An open-topped jeep carrying two protesters dressed as Nazis and waving Swastikas was cheered by thousands of demonstrators outside parliament, and police detained protesters in several places to stop them disrupting Ms Merkel’s motorcade.
Oh wait - the PEOPLE voted for those corrupt leaders because they promised all sorts of free cheese.
And the people didn’t give a damn how that free cheese was delivered. As long as it showed up they were happy to vote for whatever corrupt leader promised even more free cheese.
You can look at any public union goon controlled state or city to see the same thing happening in America.
Eventually, the free cheese runs out. And all that is left is debt.
And NOW the people get upset.
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Comment by turkey lurkey
2012-10-10 08:24:05
…and you know this for a fact, how?
ALL unions make up only 12% of the entire workforce in this country. Seeing threats from such small numbers is usually not a very healthy sign, cabana boy.
Your paranoia would be comical if it weren’t so scary and blatantly agenda driven.
Comment by goon squad
2012-10-10 08:46:56
$12/hour public union janitors are bankrupting this country!
Comment by measton
2012-10-10 09:41:27
Oh wait - the PEOPLE voted for those corrupt leaders because they promised all sorts of free cheese.
As I recall Goldman Sachs and company helped corrupt politicians hide the debt on their books. My guess is that this was in exchange for some nice campaign contributions and first class tickets to some conference in paradise along with a hefty speaking fee.
Money controls everything now, but 2b thinks the problem is unions. Follow the money and membership and trade policy 2b and you’ll see that unions have been loosing for quite a while now.
Comment by Hi-Z
2012-10-10 20:22:34
“ALL unions make up only 12% of the entire workforce in this country”
You continue to ignore 2B’s basic point regarding PUBLIC UNIONS which are the 800# gorilla in the room.
From BLS:
Highlights from the 2011 data:
–Public-sector workers had a union membership rate (37.0 percent) more
than five times higher than that of private-sector workers (6.9
percent).
Comment by Cantankerous Intellectual Bomb Thrower™
2012-10-10 07:44:43
I’m grateful to my fellow Poway school district parents who willingly pay the Mello-Roos fees that fund the construction costs of our kids’ schools. We appreciate your generosity, and also your future willingness to pay off these PUSD bonds at a 9:1 ratio of debt repayment to principle.
Poway City Council candidates Steve Vaus and Jeff Mangum clashed briefly during Monday night’s candidate forum on the question of Mangum’s role in the Poway Unified School District bond controversy.
Mangum restated his position that he was not on the school board in May 2011 when the board voted to proceed with the issuance of $105 million in school construction bonds.
“I did not vote for the bond, period,” Mangum told about 75 people attending a forum in Old Poway Park. “Anyone who tells you otherwise is not telling the truth.”
Vaus said Mangum voted to issue the bonds at the Oct. 11, 2010 PUSD board meeting, two months before his final term ended.
“He helped light the stick of dynamite,” Vaus said of Mangum.
The exchange took place in response to a question from the audience asking whether candidates felt the bond issue, along with the demise of the city’s redevelopment agency, would strain relationships between the city and the school district.
The capital appreciation bonds, authorized by PUSD voters in February 2008, were sold in 2011 at interest rates of around 7 percent. Since interest was deferred and no payments will be made for 20 years, the bonds will cost taxpayers about $1 billion when paid off. That’s a ratio of about 9:1.
Mangum on Monday night said that non-Mello-Roos taxpayers in the district are paying on average about $165 per year to repay school bonds. At the end of the 40-year period, they will be paying about $500 per year, he said, “not a crushing blow.” Meanwhile, property owners on the west side of the district, in Mello-Roos districts, are currently paying three-to-four times as much for their newer schools, he noted.
…
Probably not as bad as for the bondholders who are going to be getting some serious haircuts.
Comment by Neuromance
2012-10-10 13:07:55
Well… the creditor countries have found it difficult to tell the PIIGS to pound sand. Probably for just that reason, perhaps a version of mutually assured destruction.
On the other hand, the PIIGS countries, while engaging in some austerity, are still growing their deficits, not shrinking them.
A classic Faustian bargain for the creditor countries.
Comment by Cantankerous Intellectual Bomb Thrower™
2012-10-10 06:11:01
I just posted a Reuters video interview with Mr. Dixon. Here is the accompanying article, which apparently was published in a number of influential media outlets.
My personal take on his piece: Hair-of-the-dog stimulus measures currently in play have left us stuck in the denial phase of the global credit bubble.
The credit crisis burst into the open five years ago. The euro crisis has been rumbling for over two years. The term “crisis” is not on everybody’s lips just in finance. Wherever one turns — politics, business, medicine, ecology, psychology, virtually every field of human activity — people talk about crises. But what are they, how do they develop and what can people do to change their course?
The first thing to say is that a crisis is not just a bad situation. When the word is used that way, it is devalued. The etymology is from the ancient Greek: krisis, or judgment. The Greek Orthodox Church uses the term when it talks about the Final Judgment — when sinners go to hell, but the virtuous end up in heaven. The Chinese have a similar concept: The characters for crisis combine parts of those for danger and opportunity.
A crisis is a point when people have to make rapid choices under extreme pressure, normally after something unhealthy has been exposed in a system. To use two other Greek words, one path can lead to chaos; another to catharsis or purification.
A crisis is certainly a test of character. It can be scary. Think of wars; environmental collapses that destroy civilizations of the sort charted in Jared Diamond’s book “Collapse: How Societies Choose to Fail or Succeed”; mass unemployment; or individual depression that leads to suicide.
But the outcome can also be beneficial. This applies whether one is managing the aftermath of the Lehman Brothers bankruptcy, the current euro crisis, the destruction of an oil rig in the Gulf of Mexico or an individual’s midlife crisis. Much depends on how the protagonists act.
Students of crises are fond of dividing them into phases. For example, Charles Kindleberger’s “Manias, Panics, and Crashes: A History of Financial Crises” identifies five phases of a financial crisis: an exogenous, normally positive, shock to the system; a bubble in which people exaggerate the benefits of that shock; distress when some investors realize that the game cannot last; the crash; and finally a depression.
Although there is much to commend in Mr. Kindleberger’s system, it is too rigid to account for all crises in all fields. It also downplays the possibility that decision makers can change the course of a crisis. A more flexible scheme that leaves space for human agency to affect how events turn out has just two phases: the bubble and the crash.
The bubble is typically characterized by mania and denial. Things are going well — or, at least, appear to be. Feedback loops end up magnifying confidence. In corporations or politics, bosses surround themselves with lackeys who tell them how brilliant they are. In finance, leverage plays a big part.
This is not healthy. Manic individuals do not know their limitations and end up taking excessive risks — whether on a personal level or in managing an organization or an entire economy. As the ancient Greeks said, hubris comes before nemesis.
But before that, there is denial. People do not wish to recognize that there is a fundamental sickness in a system, especially when they are doing so well. For example, in 2007 at the World Economic Forum in Davos, Switzerland, the greed was palpable. Market participants had such a strong interest in keeping the game going that they turned a blind eye to the unsustainable buildup of leverage.
The ethical imperative in this phase is to burst the bubble before it gets too big. That, in turn, means both being able to spot a bubble and having the courage to stop the party before it gets out of hand. Neither is easy. It is hard to recognize a sickness, given that there is usually some ideology that explains away the mania as a new normal. The few naysayers can be ridiculed by those who benefit from the continuation of the status quo.
What is more, politicians, business leaders and investors rarely have long-term horizons. So even if they have an inkling that things are not sustainable, they may still have an incentive to prolong the bubble.
The crash, by contrast, is characterized by panic and scapegoating. People fear that the system could collapse. Negative feedback loops are in operation: The loss of confidence breeds further losses in confidence. This is apparent on an individual level as much as on a macro one.
…
From the WSJ - Wall Street Jobs May Shrink Further:
“Wall Street has cut 1,200 jobs since the beginning of 2012 and could contract further over the remainder of the year, while the securities industry’s cash bonus pool is expected to decline for the second consecutive year, according to a report released by New York State Comptroller Thomas DiNapoli.
By Mr. DiNapoli’s count, the securities industry in New York City lost 28,100 jobs during the financial crisis and added just 7,900 during the recovery, resulting in a net loss of 20,200 positions since November 2007.
The average salary, including bonuses, paid to securities industry employees in New York City was $362,950 for 2011, up 0.5% from the prior year, and is still the highest among the city’s major industries, the report said.”
i have been a “person of interest” in the real estate market for about 5 years now. we sold in 2007 and have been renting.
over the years my wife and i would usually do the “leg work”.
but since she just had a new baby and i am working more hours i was surprised that there are realtors that will do that for you…he goes to the town and inquires about coverage rules…easements… and looks into whether variances are possible.
most other ones we have dealt with just send us emails…which we can get on ziprealty.
we are extremely picky…so i am wondering when he will get bored with us.
2. Unless you have a specific contract with this agent - ALL real estate agents WORK FOR THE SELLER.
3. Is this agent going to tell you “NOT TO BUY” a house if it is a crap deal or if a bidding war starts? Is this agent going to tell you “YOU CAN”T AFFORD THIS HOUSE” if the house is above any sane price range? Is this agent going to tell you “YES - YOU CAN BE UNDERWATER in 6 months” when you are about to buy an overpriced house?
4. If not - then he is not your friend or a good agent. He is someone WORKING FOR A COMMISSION FROM THE SELLER. Think used car dealer. Yes, they can be nice. Yes, they can be friendly. But in the end - they WANT the HIGHEST COMMISSION possible.
5. With that in mind - keep everything as a business as possible. Read all documents carefully. And understand that the agent is WORKING FOR A COMMISSION from the SELLER when you make any decision based in the agent’s advice.
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Comment by Pimp Watch
2012-10-10 07:47:23
Good advice.
A step further;
Even a buyers agent wants the highest transaction price possible.
You need to find a pimp you can work with, i.e, aligned interests. Use your imagination.
Comment by michael
2012-10-10 08:38:12
“3. Is this agent going to tell you “NOT TO BUY” a house if it is a crap deal or if a bidding war starts? Is this agent going to tell you “YOU CAN”T AFFORD THIS HOUSE” if the house is above any sane price range? Is this agent going to tell you “YES - YOU CAN BE UNDERWATER in 6 months” when you are about to buy an overpriced house?”
i don’t rely on others to make these decisions for me.
perhaps i should of clarified “he is a good agent for me…doing things i do not have the time to do where others would do nothing.”
Comment by Rental Watch
2012-10-10 09:12:43
Studies have shown that RE agents get higher prices when selling their own home than others (I believe this was in Freakonomics)…they care more about a quick and easy sale, not a more highly priced sale. That last few percent just doesn’t put much in their pockets.
If you are hiring an agent to SELL your house, think about how to provide incentives to change this dynamic (bonus commissions for prices above $x, bar the selling agent from representing both sides of a transaction, etc.).
Comment by redrum
2012-10-10 15:12:59
The most important factor that the agent will work for is to close the sale. No sale == no commission. If there is a sale, a higher price will yield a higher commission. So, given an overlap between the buyers max price, and sellers min price, the realtor(s) will likely try to drive the sale towards the higher end of any such overlap. But, their first goal is to close the sale, exerting pressures on both buyer and seller.
A buyers agent has no allegiance to any property- so (again, working to close a sale) he has an incentive to find a property most likely to meet the buyers needs/wants. Given their resources, contacts, etc., they can be helpful in this regard. Once such a property is identified, the usual dynamics apply.
It’s important to understand their motivations and act accordingly. But there are times when a buyers agent can be useful. When I bought my current house, during the negotiations, I flat out lied to my (buyers) agent, telling him I was ready to walk if the seller didn’t accept the offer I was presenting. I needed him to believe it- fearing that he was about to lose this commission - so that he would act accordingly in subsequent negotiations with the sellers agent.
Comment by Rental Watch
2012-10-10 17:59:02
Well said redrum. The other thing you can do in addition to understanding motivations is setting forth ground rules to minimize other conflicts. The (buyer’s) agent that I used had two rules that made me like her right off the bat:
1. She would never represent both sides of the transaction; and
2. She would never represent two buyers who were seeking a home in the same price range.
This kind of thing has limited her business, but has also allowed her a fantastic reputation in the market, which keeps her very busy (and very attuned to the market).
Absolutely nothing personal intended, but speaking generically you know that old poker saying where if you know who at the table is the fool, then you’re OK, but when you can’t figure out who at the table is the fool, then it seems the fool is you. Whoops.
Seriously, given 10 crooks, if you can figure out the gameplan of 9 of them and can’t figure out the gameplan of 1 of them, stick with the devil you know.
“i know this is crazy…but my wife and i have finally found a good realtor.”
It`s a Demon that has taken human form!
Demonology 101
There is another way in which a demon can cross to the human world without blending with a human host, and that is in the form of a Century 21 agent (Reprise ). … The Demon is a plain and unremarkable looking Realtor, but it permits the sale of over priced houses …. a contract can only be cancelled by the Vengeance Demon before the Realtor has taken a human form.
I enjoyed yesterday’s flamewar, but in the future some kind of posters standard of conduct based on never posting anything violating something on this page might help:
Both sides were guilty of pretty much everything in the article at one point or another.
I’m not pleased with how the article de-emphasizes “Appeal to authority” as a mere subsection of “Irrelevant conclusion”, that sure was a popular one yesterday, but its not a bad list of fallacies to start with.
Bringing it back on topic, the FIRE sector has been trying to create a “doublespeak” where logical fallacies are the primary grammatical structure, which is kinda entertaining and highly educational to watch.
Maybe a useful on topic one liner is “You get a bubble when logical fallacies become the primary mode of communication” Applies to FIRE industries last decade, dotcoms before it, pretty much whenever the ratio of nonsense to sense gets too high that (growing) sector is going to implode soon.
You could probably set up a sector hedge fund where google-mining and graphing relative rates of nonsense vs various sectors indicates which sectors to go short and which to go long. Or you could collect marketing materials for each sector and have a disinterested philosopher type numerically evaluate the rate of fallacy for each piece of marketing, then aggregate and graph over time, etc…
I really hope the public reads between the lines before voting for these propositions?
‘Civil status’ given to over 12,000 employees and make it virtually to fire them based on performance?
Have people not learned anything from California and other states?
————-
Near the bottom of a long November ballot are two proposals that in essence ask: How easy should it be to fire a city of Austin employee?
Propositions 10 and 11 would amend the City Charter to grant most city employees “civil service” status. Under that status, the city would have to prove it has just cause for firing a municipal employee or passing one over for promotion, a much higher legal threshold than the “at-will” standard that allows most Texas employers, including the city, to generally hire and fire as they please.
If voters approve the propositions, the city manager would no longer have final say in cases of city employees who complain of unfair treatment. Instead, most of the city’s 12,000 employees could appeal to an independent board of political appointees, which could overturn management’s decisions. Leaders of the unions representing those workers say the changes are necessary to counter what they see as inconsistent and unfair labor practices — an assessment city management has denied, saying the civil-service commission would complicate managers’ ability to run their departments efficiently.
The city staff estimates the switch would cost $625,000 the first year, $467,000 the next and then $347,000 annually for technology and staffing necessary to support the new civil-service board.
Why should a city clerk be different than any other standard clerk?
Why should the city manager not be able to decide who to fire or not? Why should political appointees have the last say?
Let’s make it such that city employees can’t be fired!
——–
“the city manager would no longer have final say in cases of city employees who complain of unfair treatment. Instead, most of the city’s 12,000 employees could appeal to an independent board of political appointees”
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Comment by turkey lurkey
2012-10-10 08:29:47
Contrary to popular belief, civil employees can be fired and laid off, just not a on whim.
Comment by measton
2012-10-10 08:49:26
Well let’s say party A is elected and has full hiring and firing capabilities w/o reason or cause. They could then get out their employee profiles and fire anyone who was likely to have voted for party B including those that might be whistle blowers. Then every few years a large percentage of gov employees would be fired and new inexperienced people brought in. Sounds like a great plan. I guess at some point party A might become so dominant and in control of gov that party B would never win, there would be no whistle blowers because they would all be fearfull of loosing their jobs. Brilliant !?
Comment by Brett
2012-10-10 08:52:18
It just takes an independent board of political appointees, which most likely gets donations from the union, to approve the firing of a union member…. Conflict of interest?
Comment by turkey lurkey
2012-10-10 11:17:32
“Most likely” is conjecture.
However, IF that becomes the case, then yes, it’s wrong.
“Bloomberg Rankings collected 13 variables of misery for each state in the United States and created a “misery score” to identify the most miserable.
Air pollution, child poverty, infant mortality, poor health, premature death, violent crime, unemployment — all conspire to send Mississippi, Louisiana, Alabama and South Carolina to the top of the list. Want to live in a low-misery state? Head toward Minnesota, New Hampshire or North Dakota.”
Really I thought it was creativity and technology that propelled California to the top. I guess silicone alley didn’t have anything to do with it?
Google Balance of payments to find out how those liberal states have been funding those poor states over the last few decades. If they just got that money back they’d be sitting pretty.
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Comment by Carl Morris
2012-10-10 09:54:50
If they weren’t always trying to tell the red states how to spend money they might not need to send as much.
Comment by turkey lurkey
2012-10-10 11:22:17
Maybe because the red states outnumber them and tend to break the laws and trample over civil rights and poop on ethics every day?
Rhetorical question. I’ve lived in half of those sates and they are as corrupt and backwards as they come.
Comment by Carl Morris
2012-10-10 13:34:24
Whatever. It just seems kind of bogus to send people money on the condition they spend it how you tell them to, and then complain that they took the money.
Comment by measton
2012-10-10 14:15:12
I’m sorry were they forced to take money from the FED’s. That’s news to me. Putting conditions on money you send to states seems reasonable to me. We wouldn’t want that medicaid money flowing to local politicians and crooks would we?
Comment by Happy2bHeard
2012-10-10 15:10:28
“Whatever. It just seems kind of bogus to send people money on the condition they spend it how you tell them to, and then complain that they took the money.”
That is the way a lot of our foreign aid works. Most of the aid comes with strings attached. E.g. buy our military hardware.
Comment by nickpapageorgio
2012-10-10 18:48:38
“Putting conditions on money you send to states seems reasonable to me.”
“That is the way a lot of our foreign aid works. Most of the aid comes with strings attached. E.g. buy our military hardware.”
Keep that moral equivalency excuse factory churning. If you communists says some of this nonsense enough, some people may begin to believe it.
Comment by Happy2bHeard
2012-10-11 00:53:20
You sure read a lot into that. But perhaps it was a bit off topic.
When folks talk about cutting foreign aid, they are really proposing to cut a subsidy to the military-industrial complex. Once you understand that, you will understand why it won’t be cut by either party.
“Want to live in a low-misery state? Head toward Minnesota, New Hampshire or North Dakota.”
Posted: 10:01 a.m. Wednesday, Oct. 10, 2012
Heating costs to rise this winter as cold returns
The Associated Press
NEW YORK —
Americans will pay more to heat their homes this winter as they feel something they didn’t feel much of last year: cold.
The Energy Department said Wednesday that heating bills will rise 15 percent for natural gas customers and 19 percent for heating oil customers as temperatures come closer to normal. Last winter was the warmest on record.
Fuel prices will be relatively stable, but customers will have to use more to keep warm than they did a year ago.
Heating oil customers, though, are expected to pay the highest heating oil prices and the biggest overall heating bills ever, an average of $2,494. That’s 20 percent more than last year.
I can’t feel sorry for people who haven’t upgraded their insulation.
Modern insulation is a miracle of technology. It’s not much of an exaggeration to say you can damn near heat a room with a pocket lighter if you had up-to-date insulation, even in the dead of winter.
San Francisco never gets below 40 degrees, but it gets dang chilly here. Many of the older homes are not insulated. My first big project is to put insulation up on the ceiling of our basement. I can’t stand that damp winter SF chill that gets into your bones. We usually only use the heat a half dozen times per year.
Wow - the American cities ALL seem to have left wing socialists running them for a long time…maybe there is a pattern there.
———————–
4 US Cities made the top 50 most dangerous in the world
The Business Insider - October 10, 2012
Earlier, this year, a Mexican think tank — the Citizens’ Council for Public Security and Criminal Justice — released a study ranking the world’s most violent cities in 2011, and the results were astonishing.
The 20 most violent cities were all in Latin America. The USA had some alarming scores too, led by New Orleans at 21.
The ranking is based on murder rate per capita in 2011.
——————
Four (4) US Cities made the top 50 most dangerous cities in the world and for various reasons but ostensibly for their dangerous murder rate level. I have highly excerpted this article.
#48 Baltimore: Mayor Stephanie Rawlings Blake (Democrat) City has been led by democrats since 1967
#43 Saint Louis: Mayor Francis G. Slay (Democrat) City has been led by democrats since 1949
#30 Detroit: Mayor Dave Bing (Democrat) City has been led by democrats since 1962
#21 New Orleans: Mayor Mitch Landrieu (Democrat) City has been led by democrats since 1879 but that includes several “acting” mayors who did very short terms with no noted party affiliation most recent of them was for only a month in 1936
Wow - the American cities ALL seem to have left wing socialists running them for a long time…maybe there is a pattern there.
May I please play the pattern game too?
Denmark, Sweden, Finland, and Norway, Switzerland and Germany, Australia and Austria all have less public debt as a percentage of GDP than does America. (some less than half) But they still are able to provide great health-care and social program for their people….maybe there is a pattern there too.
Canadian company buys 18 acres west of Lake Worth; land approved for 169 homes
By Kimberly Miller
Palm Beach Post Staff Writer
A plan to resurrect a housing development ditched during the real estate crash could be in the works on 18-acres west of Palm Beach State College in unincorporated Lake Worth.
The property on South Congress Avenue and Melaleuca Lane was bought last month by the Canadian-based Morguard company for $2.07 million. It had been repossessed by Florida Community Bank after a $4.2 million February foreclosure judgment against previous owner Coral Lakes Apartments, LLC.
The land was approved by the county for 169 townhouses in 2007, but Realtor Reese Stigliano, who represented a subsidiary of Morguard in the land purchase, said he’s not sure what the company plans for the vacant property. No one from Morguard returned calls for comment Tuesday.
“Their product is more apartment rentals so they may go back and try to rezone it,” said Stigliano, vice president of Fort Lauderdale-based Brenner Real Estate Group. “Right now there are a lot of people buying apartment land.”
Rental prices increased 3.6 percent in Palm Beach County last month compared to the same time in 2011, according to the real estate analysis firm Trulia. Real estate research firm Marcus & Millichap predicted in May that asking rental prices in Palm Beach County would increase 2.8 percent this year to $1,125 per month, while average rental rates are expected to increase 3.8 percent to $1,055.
Morguard owns or manages five apartment complexes in South Florida, including Village Crossing in West Palm Beach and Emerald Lakes, a 300-unit complex southwest of its new Congress Avenue purchase. In August, the company bought the 408-unit Woodbine Apartments in Riviera Beach for $42.1 million.
Palm Beach County property records show Morguard has also purchased about 40 townhomes in the Emerald Lake subdivision, which is directly west of the 18-acres. Stigliano said concerns about vandalism and a homeless camp on the 18-acres of vacant property also prompted Morguard to buy the land.
“Morguard saw this purchase as a way to secure their property, enhance security and in time, provide an opportunity to expand,” Stigliano said. “Within 24 hours we were in negotiations and within a week we were under contract.”
He should know. He INVENTED mass layoffs for fun and profit.
“During Welch’s reign, hard-nosed success tactics–unblinking downsizing, ruthless acquisition negotiations, and the virtual abandonment of manufacturing in favor of the more glamorous entertainment and financial services industries–coexist with scandals like price-fixing, pollution, and defense contract fraud. ”
I guess my question for you is: What does that have to do with the content of the article? Do you disagree with the content of the article or just find it’s author disagreeable and therefore everything else is irrelevant?
The author is a known liar that created the chronic problem of today’s job insecurity.
It has nothing to with emotion or opinion and everything to with lack of any credibility now or forever.
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Comment by Ryan
2012-10-10 11:45:48
“In August, the labor-force participation rate in the U.S. dropped to 63.5%, the lowest since September 1981. By definition, fewer people in the workforce leads to better unemployment numbers. That’s why the unemployment rate dropped to 8.1% in August from 8.3% in July.
Meanwhile, we’re told in the BLS report that in the months of August and September, federal, state and local governments added 602,000 workers to their payrolls, the largest two-month increase in more than 20 years. And the BLS tells us that, overall, 873,000 workers were added in September, the largest one-month increase since 1983, during the booming Reagan recovery.
These three statistics—the labor-force participation rate, the growth in government workers, and overall job growth, all multidecade records achieved over the past two months—have to raise some eyebrows.”
Numbers that aren’t grounded in reality, that is the point. Not business practices of the author which have no bearing on the unemployment rate.
Bloomberg - Facebook Fought SEC to Keep Mobile Risks Hidden Before IPO Crash:
“On the most critical issue facing Facebook’s future as a public company, whether it could make money from the soaring number of mobile users, who see fewer ads than other customers — the letters show executives holding back crucial details until the SEC pushed for further disclosure.
Only eight days before the IPO, on May 9, did Facebook make clear in a filing that daily mobile customers were increasing faster than advertising growth, potentially hurting revenue and profits. It was the strongest public signal that the IPO could fall short of its high expectations.
The losses were acute for retail investors.” LOOSERS!
The mobile platform is one of the key weaknesses of Facebook. It just isn’t as mobile-ready as, say, Twitter or Google+.
It will be interesting to see how this plays out. Especially since there’s a lot more Internet-related development happening on the mobile web than the desktop web.
Federal effort to combat 2008 crisis only made the problems that caused the crisis worse, according to man who oversaw the program.
• Barofsky slams regulators (The Tell)
• ‘Gloom merchant’ Dylan Grice hits U.S. policies
• Bair talks of battle over bank bailout rules
• Bair, Geithner clashed over long-term bonds
Your HBB Librarian highly recommends Barofsky’s new book, Bailout.
This is the book that has Geithner’s juicy “foam the runways” quote about what the bank bailouts were really meant do. (The runway foam was for the banksters, not us schlubs.)
Hope I’m remembering this right…it’s been a long time.
When a friend of mine was in airborne school (parachuting from C-130s) he said that during training they made reference to situations (usually something to do with you being unexpectedly still attached to the outside of the plane during landing) that would require “Super Suds”. They made it clear that any time the Super Suds were used, it was to reduce damage to their plane and the airfield, not to reduce damage to you.
The 2008 crash still weighs heavily on investor sentiment, as Tadas Viskanta explains: “In the meantime they risk missing out the ongoing return to equities, especially in light of the particularly poor prospect for most fixed income assets.”
…
Warren Buffet, a huge obama supporter, is a large owner.
————————————-
Feds allege mortgage loan fraud at Wells Fargo
NY POST | 10/10/12 | MARK DECAMBRE AND BRUCE GOLDING
Wells Fargo, the nation’s biggest bank and its largest mortgage lender, was charged by federal prosecutors yesterday with running a decade-long mortgage fraud involving recklessly underwritten US-insured home loans to fatten its bottom line.
The San Francisco bank then compounded matters, it is charged, by covering up the toxic mortgages.
“[Wells Fargo] has engaged in a long-standing and reckless trifecta of deficient training, deficient underwriting and deficient disclosure, all while relying on the convenient backstop of government insurance,” Manhattan US Attorney, Preet Bharara, who filed the charges, said in a statement.
The scheme alleges that Uncle Sam is owed “hundreds of millions of dollars” based on Wells falsely certifying tens of thousands of bad loans during 2003 to 2005, which ultimately were backed by the Federal Housing Administration and paid out by the US Department of Housing and Urban Development.
The suit also charges that Wells knowingly hid 6,000 dicey loans from 2002 to as recently as 2010, which resulted in the government mortgage insurer shelling out hundreds of millions in claims.
In a dash for cash, Wells hired temps to “churn out and approve an ever-increasing” pile of mortgages and incentivized staff with fat year-end bonuses linked to how much mortgage sludge they could originate, it is charged.
“As also alleged, Wells Fargo’s bonus incentive plan — rewarding employees based on the sheer number of loans approved — was an accelerant to a fire already burning, as quality repeatedly took a back seat to quantity,” Bharara said.
If everyone is selling, what is propping up the U.S. stock market?
Oct. 10, 2012, 8:02 a.m. EDT Insiders betting on a market decline
Commentary: Insiders overwhelmingly choosing sells over buys
By Mark Hulbert, MarketWatch
CHAPEL HILL, N.C. (MarketWatch) — Corporate insiders are — by at least some measures — even more bearish now than they were a month ago.
And that should worry the bulls a lot, since — as I wrote in early September — their behavior then was already as bearish as it had been at the stock market’s high in late April. ( Read my Sept. 5 column, “More bad news — this time from insiders” )
To be sure, the stock market didn’t decline in September, notwithstanding the insiders’ selling.
But, since historically the insiders have been more right than wrong, it seems risky to bet that the market will continue to escape the bearish implication of their behavior.
Consider an index of insider behavior calculated by the Vickers Weekly Insider Report, published by Argus Research, which is based on the ratio of shares sold by insiders to shares bought. Last week, according to the latest issue of the Vickers service, this ratio for NYSE-listed issues stood at 5.13-to-1. The comparable ratio in early September was 5.97-to-1.
Resist the temptation to read much into this nominal improvement. Over the same period, the ratio for Nasdaq-listed issues deteriorated from 2.96-to-1 to 6.17-to-1.
As a result, the ratio for all U.S. publicly traded stocks — both NYSE- and Nasdaq-listed — has moved since early September from 3.80-to-1 to 5.61-to-1.
To put these numbers into perspective, bear in mind that the sell-to-buy ratio’s long-term average is between 2-to-1 and 2.5-to-1. Vickers consider any ratio below this average to be bullish, and any number above it — like the current level — to be bearish.
At the beginning of the bull market in March 2009, for example, the sell-to-buy ratio got as low as 0.42-to-1, At the stock market’s low in early October of a year ago, at the bottom of that year’s summer/fall correction, the ratio got as low as 1.04-to1.
…
BOSTON (AP) — Even as stock prices rose again in September, investors withdrew money from stock mutual funds at the fastest pace of the year, marking the seventh straight month that withdrawals have exceeded deposits.
Bond funds attracted cash for the 13th consecutive month, according to a report from the firm Strategic Insight, which also said Wednesday that investors showed a preference for exchange-traded funds over traditional mutual funds. The amount of net deposits that stock ETFs attracted last month was about double the total that was removed from stock mutual funds, suggesting that investors still saw value in stocks.
The Standard & Poor’s 500 index rose more than 2 percent in September, ending the month up nearly 15 percent for the year. Despite those strong gains, the last month that investors added new cash to stock mutual funds was February.
It’s further evidence of conservative investing trends dating to 2008, suggesting investors remain anxious about stock volatility and the economy four years after the financial crisis began. Investors are drawn to the income-producing potential and smoother returns that bonds typically generate.
“Insatiable demand for income and a lingering, semi-permanent state of investment anxiety continue to drive the choices for most mutual fund investors,” said Avi Nachmany, research director with New York-based Strategic Insight.
…
I don’t know about the rest of you, but I’m noticing quite the uptick in Vanguard e-mails about investing. I’m not saying that Vanguard is one of the bad guys, but I think the outflow of retail investor money is pinching them too.
Comment by Rental Watch
2012-10-10 13:43:13
I think I commented on this before…does any of this have to do with standard rebalancing between stock and bond funds within 401ks?
If your stock fund goes up, and your bond fund goes up less, rebalancing would tend to sell some of the stock fund, and buy some of the bond fund.
“…does any of this have to do with standard rebalancing between stock and bond funds within 401ks?”
If you ‘knew’ a stock market crash was coming, wouldn’t you want to dump all your stocks and pile into bonds?
Just sayin’
Comment by Rental Watch
2012-10-10 17:55:27
Yup. You’re right, but that lack of confidence should also result in people willing to sell at lower prices to get out before the crash, which would result in lower stock market…just like today…NOT a flat to rising market–which was the conundrum that you were trying to figure out.
LONDON (MarketWatch)—European stock markets dropped Wednesday, as the International Monetary Fund issued a warning about the impact of the euro-zone debt crisis and as Greece’s equity benchmark retreated 3.5%.
The Stoxx Europe 600 index XX:SXXP -0.55% lost 0.6% to 268.71, following a 0.5% decline in the prior session, although bank shares in London advanced on eased capital rules. Investors also trained their focus on the failure of a proposed merger in the defense-aerospace sector.
“It’s ‘glass-half-empty day’ where everybody seems to be picking on any news flow that is negative. We’re also about to go into earnings season, which is a concern,” said Frances Hudson, global thematic strategist at Standard Life Investments.
…
Although many observers predicted that foreclosures would drop off at the end of the third quarter this year, the number of filings indicating the beginning of foreclosure proceedings is still about 400 per month above pre-recession levels.
There were 626 last month, Pima County Recorder’s Office records show. That’s compared with 795 in August and 798 in September last year.
The third quarter was forecasted to mark the end of the foreclosures brought on by five-year adjustable rate mortgages issued in 2005 and 2006, Kneup said.
“It is continuing longer than most models had predicted,” she said. “That goes back to jobs.”
From the story comments:
So from this home owner’s perspective, I lost 43.7% of the assess value of my home from when I purchased it to now. Data is according to Zillow.com. Remaining due on my home loan is 137% of my current zillow value.
So the housing market is doing what?
Do not give us weak minded dribble. Give us statistics that will help us understand Tucson housing market behavior. If you do not know what that is go find a statistician. Not a realtor. Many of those folks have no concept for probability and statistics … they just move houses.
The latest house price index report from Knight Frank shows Brazilian real estate prices are climbing while most of the rest of the global market continues its freefall. Brazil’s house prices increase by more than 18% in the second quarter of 2012 compared to the same period last year,
Brazil has the fastest growing house market in the world at a time when the outlook for residential real estate in many parts of the globe, especially the eurozone, is slowing.
Global house prices increased by an average of 1.1%, the latest index from Knight Frank covering the second quarter of 2012 shows.
It is the index’s strongest quarterly rise since the last quarter of 2009….
….China, which alongside the US has the largest bearing on the world’s housing markets and has largely propped up the index since early 2009, is now providing mixed messages. Although prices here are down 7.1% in annual terms they fell by just 0.1% in the last quarter. A range of cooling measures have helped to curb speculative demand but two interest rate cuts since June are reinvigorating the new homes market with prices now edging upwards in 49 of China’s 70 key cities.
Having seen prices fall by 34.7% peak to trough between the second quarter of 2006 and the first quarter of 2012, the US housing market is gaining traction and prices are finally rising. Mortgage demand is up, new construction levels are improving and foreclosures are at their lowest level since the final quarter of 2007.
I saw India has massive increases even now. There interest rates are like 10% for savings and 11% for mortgages.
In fact Geithner and Bernanke are there in Mumbai and something is cooking. Probably they are wanting mor eprinting by India or how to make their bubble go even higher.
I think India has the buggest bubble worldwide followed by Australia, Singapore, Brazil and Canada.
October 08, 2010 5:05 am •
JOE FERGUSON Sun Staff Reporter
Slow sales of residential wind turbines have forced Flagstaff-based Southwest Windpower to lay off employees in its manufacturing and operations division.
In August, state officials announced Southwest Windpower had received a federal stimulus grant worth $458,918 to upgrade and expand its production facilities, with an emphasis on clean manufacturing.
It is one of seven grants worth $2.7 million awarded to Arizona businesses designed to improve production capabilities and create nearly 180 new jobs.
Manufacturers given the grants were required to create at least two jobs per $100,000 received, provide 50 percent matching funds and ensure equipment will be operational within a year.
Thomson said the company is in the process of reviewing the grant and has not used the stimulus money.
They should have given $2.7 million in tax breaks to the “producers”
But don’t worry. Governor Brownback is going to show all of you “Godless-liberal-diversity loving-freeloader Doubting Thomas” types. His new Kansas State tax plan ends income taxes on businesses and the “producer” class, and shifts all of the burden onto poor people and the Middle Class, mainly by cutting tax deductions for child care, etc.
That low rumble you hear is all of those producers stampeding out here to Kansas, the Promised Land, which will soon blossom with producer-entrepenurial types hiring all kinds of people, paying middle class wages, which will be taxed to perpetuate the cycle.
How is it that we spend 100s of billions annually to keep out any dangerous materials from our ports, airports and shipping lanes using technology, armed guards, xrays, sniffing dogs, yet we willingly let millions cross the border illegally with capability to carry any of these things in their pocket or backpack. How does this make sense.
I had a colleague from Spain about eight years ago who used to compare notes with me on the relative size of the U.S. versus Spanish real estate bubbles. He insisted it was much worse in Spain compared to California.
In retrospect, I suspect he knew that of which he spoke.
SAN FRANCISCO (MarketWatch) — Standard & Poor’s downgraded Spain’s long-term credit rating to one notch above junk, to BBB- from BBB+, because of mounting risks to the country’s public finances. The outlook is negative. The ratings agency said that tensions between Spain’s regional governments and the central government are rising, leading to less effective policy decisions. Also, the country faces a GDP contraction of 1.8% in 2012, and 1.4% in 2013. “The pace of private sector deleveraging, together with the government’s budgetary consolidation measures, is likely to lead to an even deeper contraction of investment and consumption in both the public and private sectors,” S&P said in a statement.
In the United States it takes 70 to 88 hours work to afford a low priced two bedroom apartment on min wage . Some people are working two jobs and still can’t afford low price apartments .
I have not heard much about any talk about raising min wage in light of the rise in prices overall ,especially food going up .
They don’t want to raise wages(any wages) and want to create inflation out of thin air. I was looking and minimum wage in Aussie is like $15 and their currency is even stronger than ours now.
Team Obama, desperate to salvage something from Wednesday’s debate debacle, seized on Mitt Romney’s call to end PBS’ taxpayer subsidy.
It was — horrors! — a gaffe.
Nonsense.
“I like PBS,” Romney said. “I love Big Bird. But I’m not going to . . . borrow money from China to pay for [it.]”
Gaffe? No way.
Romney’s not out to drive Big Bird off the air. He just doesn’t think that he rates a Washington subsidy — and he’s not alone.
President Obama’s own Simpson-Bowles deficit-reduction commission calls for ending PBS’ subsidy — some $280 million — outright. And for good reason.
PBS is now home to numerous lucrative franchises — with “Sesame Street” the most successful, having earned $211 million in merchandising sales from 2003 to 2006.
Indeed, Sesame Workshop’s total assets at the end of last year stood at more than $411 million — and its CEO is paid nearly $1 million a year.
Which certainly makes Big Bird a 1-percenter, earning far more than Mitt Romney — and paying far less in taxes, to boot.
Now, when the Corporation for Public Broadcasing was set up, there was little in the way of educational TV; indeed, all broadcast options were limited.
That’s hardly true in the Information Age, where education outlets are limitless — and well-funded.
PBS contends that Romney “does not understand the value that the American people place on public broadcasting.”
Actually, he does — which is why he figures they’ll voluntarily support it through charitable donations, as many do.
(And by the way, the Obama White House yesterday refused to say if it will preserve tax deductions for all those contributions to “your local PBS station.”)
Big Bird, in short, is doing just fine. But in an era of a $16 trillion-plus national debt, he can pay his own way.
PBS does produce actual news and investigative reporting that fox,cnn, etc don’t. Their kids TV isn’t full of commercials for sugar pops and kids dolls that raise their skirt. Their kids shows are educational as well. We make a big donation every year.
“We make a big donation every year.”
Good for you! Just don’t donate MY money if you don’t mind. Let me decide where my money goes (difficult for a liberal to comprehend).
And please don’t donate MY money to your stupid war and oil concerns. Actually, taxpayer subsidies to PBS are approximately .003% of subsidies to Big Oil/MIC and arguably make a far more positive contribution to the planet every year. But that’s difficult for the simplistic to comprehend.
I should ask for more money except I won’t get it. And once you are out of work you are damaged goods.
What economists call the “skills gap” is one of the leading causes of unemployment today.
Quite simply, the demand for high-levels skills is outpacing the amount of people who have those skills, contributing mightily to structural unemployment, a term that refers to those out of work for reasons that exceed simple economic gyrations.
“Today, there is a significant and growing mismatch between the country’s demand for talent and its current supply,” research firm Deloitte said in a study released last week examining the skills gap issue. “The type of talent demanded today - and needed tomorrow - is increasingly either outdated or out of stock.”
If someone could re-post this in the morning, I’d appreciate it. My theory is the TBTFs have been secretly “nationalized” via being made whole for dead loans. Here’s why…
I get home from work, check the mail…. boomer couple from Illinois rolls up on the abandoned house next to me. We use that driveway for our second car. She asks me, “does someone live here now?”
“Naw, we just use the house for parking”
“Oh, so what’s the deal?
“It’s been abandoned for three years.”
“Yeah, we tried to buy it last year, but BofA said they couldn’t release it yet.”
Comment by Cantankerous Intellectual Bomb Thrower™
2012-10-10 23:13:33
U.S. Fiscal Disasters
Notable cities, counties and stats at or nearing fiscal insolvency
1. California ($16 bn 2012 deficit)
2. Illinois ($43 bn 2012 deficit)
3. Nevada ($1.8 bn 2011 deficit = 55% of general fund)
4. Stockton & San Bernardino, CA (2012 bankruptcy filings)
5. Los Angeles, CA (predicted to go bankrupt within two years)
6. Harrisburg, PA (2012 bankruptcy filing)
7. Jefferson County, AL (2011 bankruptcy filing)
Name:Ben Jones Location:Northern Arizona, United States To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
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Pending Sales in the Bay area are at a 7 year low. Demand is very weak and falling. If you’re in the SF bay area, you might want to be prepared.
Let me guess: Prices are climbing, a clear indication that housing has reached a bottom?
America’s Emptiest Cities
Cities suffering from mass emigration? Here are 5 of today’s most vacant.
#1: Orlando, FL
12-Month Averages:
Rental vacancy rate: 18.8%
Homeowner vacancy rate: 2.2%
The emptiest city in the United States is Orlando, Fla. The 12-month average for rental vacancies stands at a staggering 18.8 percent, while in the first quarter of 2012 this number was 22 percent, highest in the nation. Florida’s third largest city also has an above-average homeowner vacancy rate
Photo: CNBC
We all know the nation’s real estate has been hard hit by the economy’s malaise. Between record high foreclosures and plummeting home values, the nation’s housing market may never fully recover—at least not if the target is pre-bubble prices.
But in the Bay Area, real estate remains strong. In San Francisco and the Silicon Valley in particular, prices have gotten higher along with higher demand. Even Oakland, formerly decimated by foreclosures and short sales, has enjoyed something of a comeback, scoring Realtor.com’s title of “fastest selling city in America” this August.
The rest of the county hasn’t been so lucky. As CNBC puts it, “one of the unfortunate results of a bad housing market are empty homes. Vacant properties have increased by 43.8%.” And where do thee vacancies hit hardest? CNBC released its list of the 10 emptiest cities in the USA. We covered 5 here. To see the complete list, visit CNBC here.
Could It Happen to the Bay Area?
People in Toledo or Houston probably ever planned for their cities to be so vacant. Consider Detroit, once the flourishing center of America’s automobile industry, now a shell of its former glory. What would it take, readers, to empty out one of our Bay Area cities?
“What would it take, dear readers, to empty out one of our Bay Area cities?”
Who cares? The world doesn’t begin and end in California or Silicon Valley. Delusions of grandeur run amok.
Indeed, the emptying out of California might very well be beneficial for the rest of the country.
Got that right.
and where do you suppose the “emptying out of california” will pour into.. AZ may be.. no thanks.. please stay in California, pretty please..
If we empty California, you guys will have to build a LOT of home depots to handle the ’standing in the parking lot’ overflow.
Indeed, the emptying out of California might very well be beneficial for the rest of the country.
I don’t think they feel that way in Oregon.
“What would it take, dear readers, to empty out one of our Bay Area cities?”
An influx of South Orange County folk?
I don’t think they feel that way in Oregon.
Nor WA, ID, MT, AZ, TX, CO, UT, etc. (NV doesn’t count; it was lost a decade ago)
I keep telling people that I should move to CA because if I’m going to live next to this many CAians, I might as well actually be in CA.
What would it take, readers, to empty out one of our Bay Area cities?
A very simple solution: Relocate the residents of Detroit and Newark, NJ. That would turn your city into a crime-infested ghetto, and you would find a net Migration out. People don’t stay where crime runs free. except “gangstas”.
I thought that was Oakland’s and Compton’s function?
“What would it take, dear readers, to empty out one of our Bay Area cities?”
In the red: From California to Pennsylvania, places like Stockton and Scranton run out of money
Posted in Eric Schulzke on September 22, 2012 8:12 pm
Sworn police staffing in Stockton, Calif. dropped from 1.52 per 1,000 residents in 2005 to 1.16 today. (Ben Margot, Associated Press)
This is the first in a two part series. Part two can be read here.
By: Eric Schulzke
A stone’s throw away is Stockton’s City Hall. Above the entrance is an “All-American City” banner, reflecting faded glory from awards won in 1999 and 2004, but beneath the banner the lamp post foundations are badly cracked. It’s one of many clues around the city that something has gone badly awry here.
Wells Fargo repossessed an eight-story office building meant to be a new city hall earlier this summer. The city had defaulted on its loans. The bank also seized underperforming parking garages, which the city built when boom times seemed here to stay.
At a city council meeting in that fading city hall on that warm August evening, the word “bankruptcy” is never mentioned but lies heavy in the air.
The council approves a renegotiated pensions deal with the fire unions. The private management company that oversees the shiny new venues reports on its progress filling seats. A 53-year-old retired police officer unloads his frustration about loosing his promised free medical care.
The aftermath of Stockton’s mismanagement will haunt the city’s residents for years to come. Essential services are already being short-changed to pay debts and employee pensions.
Stockton’s path to bankruptcy is an object lesson in how exuberance, naiveté and false hopes can supplant prudence. It’s a lesson that cities, counties and states around the nation are rapidly learning.
Stockton is easily the largest U.S. city ever to file for bankruptcy. The next closest, San Bernardino in southern California, also filed this summer. But it may not hold the record for long. Former Los Angeles mayor Richard Riordan told Fox Business News in August that he expects his city to be insolvent within two years.
…
I found this quite troubling; it may be a little off topic but it would make a good discussion about something other than R’s and D’s.
http://www.liveleak.com/view?i=320_1349824770
“a little off topic”
I strongly disagree. I have kids now, so I live suburban instead of urban because I don’t want the “services” of one of the worst school systems in the country. But before I had kids, police brutality and incompetence were the primary reasons urban real estate (condos, etc) held no value for me. If you paid me to live urban, I’d find a way to escape to the burbs.
Build all the condos you want, until you have a real police system and real educational system, the only people living urban around here are going to be the ones who can’t escape.
Here’s a new local billboard which I saw about 3 times on the digital billboards on the way home (to suburban civilization):
http://www.jsonline.com/news/wisconsin/regional-0674v7f-173070491.html
“Billboards seek justice in Williams death”
“The message on the billboards beginning Monday: “When police kill, where is the mayor?”"
Yeah, that really makes me wanna buy a condo downtown. Why, my son could be killed by the police, just like his was, and no one will be punished, what a fantastic marketing message for downtown condos.
If you paid me to live urban, I’d find a way to escape to the burbs.
To each his own. I do find it amusing how some adults are really not able to understand that others may not like what they like.
Developmentally, this is something that most humans learn before they are 2 years old:
And at around 18 months, children exhibit the ultimate precursor to empathy — understanding that other people have feelings different from our own. In one study, a group of 18-month-olds were offered crackers or broccoli — and most of them preferred crackers. Then they were set up with a with a group of adults who made “yucky” and “yummy” faces for both foods. The upshot: Toddlers who saw the adults make a yucky face for crackers and a yummy face for broccoli gave them the broccoli, even though the kids preferred the crackers.
other than R’s and D’s
Because Mayor Bloomberg is none of the above, with his gun-grabbing, fascist police state trying to take away our Big Gulps.
Well, I suppose you can politicize any article of information if you like. My intention is not to. I think it is an important piece of information, politics aside, because this style of police work could be brought out of NYC to a town near you.
When are people going to snap out of it and realize enough is enough? War on terror? War on Drugs? How about the one this represents, the war on freedom.
As long as it’s only black and brown people getting stopped and frisked, this is not an issue.
You’re so right, I’m white! Why worry, I’ll just move on and forget about it.
They can keep doing it as long as black and brown people are a voting minority.
It would be interesting to do an experiment and see if dress makes a difference. Would the kid who was stopped twice in a couple of blocks have been stopped if he were wearing a suit?
What kind of behavior would an old white woman have to exhibit to be stopped?
What kind of behavior would an old white woman have to exhibit to be stopped?
Baggy pants and a hoodie while smoking a joint?
I also think the kid needs to be taught the art of strategically picking his nose. Nothing says oblivious like picking your nose and eating it.
http://www.sfgate.com/news/article/Cancer-patient-embarrassed-by-security-pat-down-3932061.php
http://rt.com/usa/news/texas-school-id-hernandez-033/
http://www.youtube.com/watch?v=u8yoSAiwY18
Ed Lee, SF Mayor, tried to get stop and frisk implemented here. Promptly shot down.
Read the studies about it: it doesn’t work. You might like the idea, and emotionally it may make sense, but that doesn’t mean that it’s effective.
http://www.forbes.com/sites/jasonoberholtzer/2012/07/17/stop-and-frisk-by-the-numbers/
Yet another reason I don’t understand why anybody in their right mind would want to live in NYC.
Pay too much for a place to live in a city where you have no rights yet you think you have culture.
Wow.
NYC: 10 million reason and all the proof you need that you can’t fix stupid.
Well you dont need a car here..$104 a month and you can go from coney island to yankee stadium….
You learn to live Small…Its hard to be obese here … most subways are not handicapped accessible.. you can work late nights and still can go out for a meal at 1 am…
But the best reason lots of people DO NOT like peace and quiet of the burbs.
Yet another reason I don’t understand why anybody in their right mind would want to live in NYC.
And all those 10 million New Yorkers would not want to live where you live.
See my post above about toddlers and the developmental ability to understand that not everyone feels or thinks exactly like you do.
Dysfunctional co-dependency is often never acknowledged by the victims who create elaborate constructs of dualism to justify their abuse.
Do toddlers understand big words like that?
So the 10 million stupid people in NYC are victims of dysfunctional co-dependency?
Ditto for Tokyo residents? London? LA?
Anyone who chooses to live a different lifestyle as you is either stupid or emotionally disabled?
C’mon now!
I would have to be “emotionally disabled” in order to endure living in a place like NYC.
Who is going to buy $4.5 Trillion in risky bank assets (cough - sub prime mortgages - cough)???
Heck, it took obama 4 years to spend $5 Trillion in additional debt here in the USA. How are these banks going to do it in a year?
My guess - The EU is holding off doing anything until after the American election to help obama. After the election, bad things are going to happen pretty quickly.
—————————————
IMF Sees European Banks Facing $4.5 Trillion Sell-Off
Bloomberg - By Sandrine Rastello - 10/10/2012
The International Monetary Fund said European banks may need to sell as much as $4.5 trillion in assets through 2013 if policy makers fall short of pledges to stem the fiscal crisis, up 18 percent from its April estimate.
Failure to implement fiscal tightening or set up a single supervisory system in the timing agreed could force 58 European Union banks from UniCredit SpA (UCG) to Deutsche Bank AG (DBK) to shrink assets, the IMF said. That would hurt credit and crimp growth by 4 percentage points next year in Greece, Cyprus, Ireland, Italy, Portugal and Spain, Europe’s periphery.
The IMF said that “both Spain and Italy have suffered large-scale capital outflows” in the 12 months through June, with $296 billion and $235 billion, respectively.
“The present difficulties in the euro area provide a cautionary tale for Japan, given the latter’s high public debt load and interdependence between banks and the sovereign that is expected to deepen over the medium term,” the IMF said.
“Who is going to buy $4.5 Trillion in risky bank assets (cough - sub prime mortgages - cough)???”
Could the Fed step up to do it?
Remember when only congress could authorize spending and appropriations?
Could the Fed step up to do it?
The FedRes isn’t the government.
But they do buy mortgages:
Bloomberg News
Obama-Fueled Mortgages Boost Profit at U.S. Home Lenders
By Dakin Campbell and Hugh Son on October 10, 2012
Biggest Home Lenders Buoyed by U.S. Government-Fueled Mortgages
Biggest Home Lenders Buoyed by U.S. Government-Fueled Mortgages
Biggest Home Lenders Buoyed by U.S. Government-Fueled Mortgages
Wells Fargo & Co. (WFC) and JPMorgan Chase & Co. (JPM), the largest U.S. home lenders, will post third-quarter profit buoyed by government policies intended to help borrowers.
Those firms, along with No. 3 U.S. Bancorp and fourth- ranked Bank of America Corp. (BAC), may report $6.9 billion of mortgage-banking revenue in the period, a 37 percent increase from a year earlier, Christopher Kotowski, an Oppenheimer & Co. analyst, said in a research note. That will help the companies generate a combined $10.9 billion in profit, according to the average estimate of analysts surveyed by Bloomberg.
The figures show the degree to which U.S. lenders have become dependent on revenue from mortgages to cushion weakness in other lending and investment-banking businesses. The banks are benefiting as President Barack Obama’s administration targets housing in an effort to stimulate the economy. They’re earning more on each home loan they sell as Federal Reserve purchases of mortgage debt widen profit margins.
“Government policy is encouraging banks to make mortgages, and they want to keep it that way,” said Nancy Bush, an analyst and contributing editor at SNL Financial LC, a bank-research firm in Charlottesville, Virginia. “For them it’s sort of a beneficent cycle right now.”
…
More cities destroyed by public unions.
Lord help you if you own a house in one of these places.
———————————————
Moody’s targets California cities for downgrades
Yahoo News | 10/10/2012
One of the nation’s top credit rating agencies announced Tuesday that it will review dozens of California cities for possible downgrades amid mounting concern over municipal bankruptcies and bond defaults.
Moody’s Investors Service will scrutinize the ratings of bonds in 30 California cities. The agency already had downgraded eight municipal pension obligation bonds.
Cities under review include Danville, Santa Monica, Sacramento and Fresno. Moody’s will examine an array of factors, including falling tax revenue and increased spending.
Downgrades would increase borrowing costs for cities and could hinder their ability to borrow.
Three California cities — Stockton, San Bernardino and Mammoth Lakes — filed for bankruptcy over the summer, although Mammoth’s filing was the result of losing a lawsuit.
Last week, the agricultural city of Atwater declared a fiscal emergency and became the latest embattled community to consider bankruptcy.
The other cities that Moody’s has targeted for possible downgrades are Azusa, Berkeley, Colma, Downey, Glendale, Huntington Beach, Inglewood, Long Beach, Los Gatos, Martinez, Monterey, Oakland, Oceanside, Palmdale, Petaluma, Rancho Mirage, Redondo Beach, San Leandro, Santa Ana, Santa Barbara, Santa Clara, Santa Maria, Santa Rosa, Sunnyvale, Torrance and Woodland.
Lots of money getting ready to go “pooooooof”?
One person’s (or one town’s) debt is another persons money.
Many are owed, few are to be paid. Many promises were made, not all will be kept.
One cannot change any of this but he just might, if he does a bit of homework, be able to avoid it.
Slowly going broke is a process, declaring bankruptcy is an event.
People don’t react to the process but they are certain to react to the event.
I don’t see your proof it was caused unions.
Santa Clara?
And they are building a staduim for 49ers?
Damn unions!
Oh wait…
Nice post…Thanks 2fruit….
I would add to this the threatening lawsuit by the re-insurers in the Stockton BK…The re-organization was hands off on the unions while the bond holders are threatened with huge haircuts…The insurers are saying they will take it all the way to the supremes…It may take time but if it goes there and the bond holders prevail it will shake the very foundation of the bullet-proof pay, benefits and pensions in the municipal sector…
Yep.
The politicians in charge of public union goon controlled cities OWE their job to the support of the public union goons.
They will NEVER turn on them. Even if it means bankrupting and destroying their cities.
But they also sell municipal bonds that BY CONTRACT bondholders get in first in line in any bankruptcy.
I guess they think they can all do a GM and wipe out the bondholders and not touch the unions.
It is not going to work. And if it does - who in their right mind would ever buy municipal bonds from a public union goon controlled city or state ever again?
Going after the unions means tangling with CalPers and this means big legal costs. Our little town speant $4M in the last few months on legal fees.
The threats that got our town council to settle, were
#1 Judge might thow out our petititon and we would lose bk protection and be exposed in state court.
#2 CalPers would get involved and make litigation too expensive.
Now the town is backpedaling, they made a deal that costs $52M over 23 years and want to fund it by cutting the police department in 1/2 and closing a pool / park. The public didn’t get to give input on making a settlement but their input is welcome on how to pay for it. Most object to any cut in police.
We have voted in 4 tax measures that bring in the same amount that will be paid to the judgement holder in this settlement. The reasonable answer is the least popular but here it is. Keep in mind that the judgement holder did not earn his $42M judgement and the town’s citizens had no part in any wrong doing. We should repeal all the tax measures, cut no services, rely on sales tax and tot alone and present a payment plan that reflects that we can pay very little beyond basic services.
All 4 tax measures were voted in to fund specific things, now they will fund payment of a judgement because our town leaders were not willing to keep an agreement.
Looks like we will likely raise taxes even more while we cut services and fight about their importance.
Government Gone Wild.
Can’t the townsfolk file a class action suit against the town leaders who screwed up? Or disincorporate and start all over? What would happen if everyone just said “no” and refused to pay the assessment?
Seems to me you could argue this is an illegal tax assessment (inasmuch as you didn’t get to vote on it) and have Howard Jarvis Taxpayers Assn. http://www.hjta.org/ go after the city council singly and severally. I sure wouldn’t lie down and take it….
Yesterday I ran into a town council member in the bank. I told him that we should not honor the deal they just made to pay $52M to a developer to settle the town’s bankruptcy. I said they made this deal because they were afraid of scenario laid out by a mediator and we didn’t get our day in bankruptcy court. The town council member told me they had to settle because of the threat of state bankruptcy court.
I told him there is no such thing as state bankruptcy court and realized that the elected officials that get us into and out of bankruptcy don’t know what they are doing.
that’s freakin scary….get this in the newspaper today….
Holy moly! That’s damn scary, Charlie!
This must surely be propaganda. It can’t be true.
WE heard for decades how all the Illegal Migrants from South of the Border were a BOON to Business.
They even set up dozens of “sanctuary cities”. Mutliculturalism (spelled correctly) and ‘diversity’ were going to lead California to a new age of prosperity. Then all the whites started moving out, except those with government jobs and a guaranteed pension plan.
“Lord help you if you own a house in one of these places.”
I disagree that blame should be entirely laid at the feet of public unions. There are other issues in play, including overly rosy estimates of returns on pension money, falling property tax revenues and other property related revenues. Mammoth Lakes got in trouble due to promises made to developers.
And there are issues that are unique to California. Many municipalities saw the arbitration process for union negotiations favoring the unions. So they rolled over without fighting very hard.
That said, I agree with the sentiment. And it is a strong argument against buying. 30 years is a long time and a lot can go wrong in that timeframe that could make buying a bad decision - bad neighbors, deterioration of the neighborhood, property tax increases, economic decline in the local area. Small towns dependent on one business or industry are especially prone to the last.
“Moody’s targets California cities for downgrades”
Did the morons who run these cities ever stop and think about a possible rainy day? No, they doubled down on spending, let the unions run rampant with the budget and they came up with brilliant money saving ideas like “sanctuary cities”….yeah let’s give public services to thousands of illegal immigrants, that should save us a few bucks.
I will say they were successful in one regard, they created enough union workers and dependent poor to assure themselves re-election even under the worst of circumstances…exactly the same template the Obama administration has put into place.
Is now a good time to buy the dip?
Stock futures dip after Alcoa results, outlook
Traders work on the floor of the New York Stock Exchange at the opening of the trading session in New York October 5, 2012. REUTERS/Mike Segar
By Chuck Mikolajczak
NEW YORK | Wed Oct 10, 2012 8:21am EDT
(Reuters) - Stock index futures edged lower on Wednesday after Alcoa kicked off earnings season by warning of a slight slowdown in some markets, highlighting concerns about sluggish global growth, even as its quarterly results beat expectations.
Stronger demand for aluminum products from airplane and automobile producers helped Dow component Alcoa Inc’s (AA.N) third-quarter profit beat analysts expectations, but it scaled back its global aluminum consumption outlook for 2012, citing the slowdown in China. Alcoa shares lost 0.7 percent to $9.07 in premarket trade.
Lackluster growth in China, the world’s second-largest economy, is expected to rein in corporate earnings in the third quarter and dent profit forecasts as the Asian nation feels the pinch of the debt crisis in the euro zone, a key trading partner.
Earlier in the week, the World Bank cut its growth forecast for East Asia on concerns China’s slowdown could last longer than expected.
“The slowing global growth story has always been an undercurrent that has been evident in the market place, but it was hard to take that fact and employ it inside of an investor trading strategy when you still had central banks flooding the world with cash and supporting asset prices,” said Keith Bliss, senior vice president at Cuttone & Co in New York.
“So we are at an interesting inflection point in the market place where people could start focusing on the fundamentals and examine third-quarter earnings thoroughly” against a backdrop of slowing global growth and how that will impact the next few quarters’ earnings and equity valuations, Bliss said.
Analysts forecast third-quarter earnings of Wall Street’s S&P 500 .SPX companies would fall 2.3 percent from the year-ago quarter, according to Thomson Reuters data, which would be the first drop in U.S. quarterly earnings in three years.
According to data through Tuesday, 94 companies in the benchmark S&P index have issued negative outlooks, compared with 22 positive pre-announcements, for a ratio of 4.3, the weakest showing since the third quarter of 2001.
…
Don’t buy the dip unless you intend to sell the hump.
the law of diminishing returns is catching up to all the printing.
Seems like when no one is expecting it the market will tank and flush the mom and pops.
Remember: buy low sell high
They are setting you up again.
The future of California can be seen in Detroit Michigan.
50 Years of democrat and public union domination has brought that once thriving city to it’s knees.
And so it will be with California.
————————————-
Bankrupt California
National Review | 10/9/2012 | Victor Davis Hanson
I thought of my fellow Californian Energy Secretary Steven Chu last week, when I paid $4.89 a gallon in Gilroy for regular gas — and had to wait in line to get it. The customers were in near revolt, but I wondered against what and whom. I mentioned to one exasperated motorist that there are estimated to be over 20 billion barrels of oil a few miles away, in newly found reserves off the California coast. He thought I was from Mars.
California may face the nation’s largest budget deficit at $16 billion. It may struggle with the nation’s second-highest unemployment rate at 10.6 percent. It will soon vote whether to levy the nation’s highest income and sales taxes, as if to encourage others to join the 2,000-plus high earners who are leaving the state each week. The new taxes will be our way of saying, “Good riddance.” And if California is home to one-third of the nation’s welfare recipients and the largest number of illegal aliens, it is nonetheless apparently happy and thus solidly for Obama, by a +24 percent margin in the latest Field poll. The unemployment rate in my hometown is 16 percent, the per capita income is $16,000 — and I haven’t seen a Romney sticker yet.
California schools rate among the nation’s lowest in math and English, but our shrinking numbers of teachers are among the country’s highest paid. One-third of the nation’s welfare recipients live in California, and 8 out of the last 11 million people added to the California population are enrolled in Medicaid, but we are also the most generous state in sending remittances to foreign countries — we contribute a third to a half of the estimated $50 billion that leaves the U.S. each year for Mexico and elsewhere in Latin America. It is puzzling in the small towns of the San Joaquin Valley to see both federal and state medical centers and nearby offices that specialize in cash transfers to Mexico. But no one seems to see any disconnect between the public need for free health care and the private desire to send money to Mexico.
disconnect between the public need for free health care and the private desire to send money to Mexico
It’s Racist® to say this. Diversity is our strength. Our differences only make us stronger.
No, what brought Detroit down was the offshoring of jobs and auto executives who thought they could continue to sell overpriced crap while the Japanese sold cheaper and FAR better cars.
And it’s STILL the problem.
It’s not just outsourcing it’s technology. The # of workers it takes to build a car has been falling rapidly over the last couple of decades. What we see in Detroit will happen across the globe and it won’t be pretty. At some point gov will have to choose between making jobs and war/police state.
Yep.
Technology has destroyed a great many jobs and high-paying careers.
There is much discussion about the offshoring of jobs here and elsewhere.
What about job/career dislocation due to both intended and unintended effects of technology?
Technology displacement is generally understood as inevitable, but sending jobs to communist or non-ally countries is just plain treason, that’s why.
Uh, no.
When you have technology displacing jobs, then those jobs also are going to be displaced geographically over vast distances, not just locally.
Jobs that are being sent overseas are being sent overseas because they can be. It’s technology that has made it possible.
Most tech people are smart enough to understand what their work has done to the rest of industry. They know that their niche actively seeks to destroy others (while creating new ones). However, not all are that bright.
Uh, yeah. I’ve been up close and person with it for decades from all sides.
Labor displacement as a direct result of technology was an issue into the 1990s and then most people realized it was unstoppable and almost acceptable as long it was OUR TECHNOLOGY.
Labor displacement to foreign countries for slaves wages, however, was not and still is not acceptable.
The former SFrenter was interviewed in this article:
How Much Tech Can One City Take?
David Talbot October 2, 2012
Shaken by the latest digital gold rush, San Francisco struggles for its soul.
Excerpt:
n spite of the obvious urban warts, the word is out: San Francisco is the world’s leading tech paradise. At a rate eclipsing the dot-com boom of the 1990s, tech companies are setting up shop in the city by the hundreds, drawn by its beauty and livability, as well as the deep pool of engineering talent here and, yes, city hall’s increasingly tech-oriented policies.
Young entrepreneurs from as far away as Denmark, Singapore, and France can be seen with real estate agents in tow, roaming through converted South of Market lofts still vacant from when the previous bubble burst more than a decade ago. The city is currently home to more than 1,700 tech firms, which employ 44,000 workers, up a whopping 30 percent from just two years ago. And San Francisco has been the nation’s top magnet for venture capital funding for three years in a row. Consequently, the distinction between Silicon Valley and San Francisco has all but disappeared. It is us, and we are it.
The city is clearly benefiting from this new mind meld. San Francisco’s 7.6 percent unemployment rate handily beats the state’s 10.9 percent rate, and it’s one of the few counties in California that has experienced significant property-tax growth during the economic crisis, driven largely by the hot real estate market in the tech-heavy SoMa area. The new tech boom has helped add $6 billion to the city’s tax rolls over the past year—an increase of more than 4 percent over the previous fiscal year. There’s a sense of pride and excitement in the air, a feeling that—once again—we’re the ones creating the technologies that are driving the digital era. San Francisco is quite literally changing the world.
But despite all this, there is trouble in paradise. The unique urban features that have made San Francisco so appealing to a new generation of digital workers—its artistic ferment, its social diversity, its trailblazing progressive consciousness—are deteriorating, driven out of the city by the tech boom itself, and the rising real estate prices that go with it. Rents are soaring: Units in one Mission district condominium complex recently sold for a record $900 per square foot. And single-family homes in Noe Valley, Bernal Heights, and other attractive city neighborhoods are selling for as much as 40 percent above the asking price. Again and again, you hear of teachers, nurses, firefighters, police officers, artists, hotel and restaurant workers, and others with no stake in the new digital gold rush being squeezed out of the city.
Wow. I too would much rather live in SF and work down the peninsula than the other way around. Is there still great train service there?
But if people like us, who helped make San Francisco what it is, get pushed out of the city, who’s going to teach the next generation of kids? Who’s going to take care of them in the hospital?”
The Chinese and Indians will send their kids to private schools
what you see is the future BTW I work in high tech and its crazy. I thought about moving to headquaters in Santa Clara but decided against it too expensive
Is there still great train service there?
Yeah, peninsula train Caltrans is alright, but who wants to commute? But the MUNI (city buses and trains) are ridiculously unreliable.
I drive 3 miles to work and find even that to be annoying. I’d bike or run or motorcycle if I didn’t have kids.
I think the techies with the buses that pick them up right in their neighborhood are pretty great. I wouldn’t mind that.
The Chinese and Indians will send their kids to private schools
Makes no difference. Private school teachers make even less than public school teachers. Damn those unions.
Amazing isn’t it?
Labor costs per unit have fallen, yet price per unit has risen.
And cabana boy wonders why he gets no respect from me.
How is it amazing?
It can be expected as exported technology lowers U.S. productivity as a share of either (or both) worldwide productivity or as compared to other individual countries.
The US still maintains the lead in worker productivity to this day, by FAR, even after decades of these transfers. In fact, it has INCREASED.
If wages had kept up with productivity gains, your average worker would never have had to borrow anywhere NEAR as much as was borrowed over the last 20 years.
If wages had kept up with productivity gains, your average worker would never have had to borrow anywhere NEAR as much as was borrowed over the last 20 years.
Good point. In the late 60’s they’d say all the tech and productivity would have us all working 20 hours a week for great money. “Wha Happennd”??
Fred Willard, Mighty Wind, Wha Happennd?? Clip:
http://www.youtube.com/watch?v=6SHRFhfeLgY
No question that health care for illegals in California has taken its toll .But who benefited the most by these policies ? It was a supplement to Business in that they didn’t have to pay for health care, yet they could have cheaper illegal labor .The medical industry got paid by the Government for taking care of these needs . Mexico benefited by having their Social costs added to
USA or California ,while they got cash flow send back to Mexico .
Business was a beneficiary by the business that illegals gave to business . Tax revenues increased by more illegal business but it didn’t offset pay outs concerning benefits given .
You can’t blame the illegals for trying to improve their life ,and its pretty clear that the Government has been half ass about controlling our borders .
It was a supplement to Business in that they didn’t have to pay for health care, yet they could have cheaper illegal labor..You can’t blame the illegals for trying to improve their life ,and its pretty clear that the Government has been half ass about controlling our borders ?
Spot on Wizard….
You can’t blame the illegals for trying to improve their life ,and its pretty clear that the Government has been half ass about controlling our borders .s
I hear this stupid argument all the time. They just want a better lives for their family. You can’t blame them for that…..what part of Illegal don’t people understand.
There’s a reason we have Immigration Laws. They support a stable society and population.
But, my argument is that the guy holding a gun to the cashier and robbing the register, or the hoodlums selling drugs on city streets, well, they all just wanted better lives, too.
Like everyone else. They just chose to gain by “illegal” methods. I guess we should just let them go, too.
Once you have “The Children” all is justifiable.
I hear this stupid argument all the time. They just want a better lives for their family. You can’t blame them for that…..what part of Illegal don’t people understand.
There’s a reason we have Immigration Laws. They support a stable society and population.
But be honest. If you could make 7 figures in Canada and they really didn’t seem to mind you coming up and doing so except for a few cranks that were easily avoided, even if it was “technically” against the law wouldn’t you do it? That’s why lots of people empathize with the illegals.
If you were starving you would especially cross those borders if you knew the USA wasn’t that serious about
stopping you, especially if you knew it was easy to get a
farm picking job or a cheap manufacturing job .
How many do we have now ,about 45 million illegals . But don’t feel bad the same thing has happened in France with their illegals ( of a different race ).
My whole thing is that if we were serious about illegals we would of been serious about illegals ,but apparently we weren’t that serious about stopping it .
The Mexican people feel it was their lands here anyway at one time .
But ,all hands out are getting more and more unafforable these days ,especially health care .
The Mexican people feel it was their lands here anyway at one time .
So their schools don’t teach them about the Treaty of Guadalupe Hidalgo?
What a surprise, not.
You can’t blame the illegals for trying to improve their life
If TSHTF here in the states, and you couldn’t feed yourself or your family, or felt unsafe, most of us would do whatever it takes to get out and, if we had t, sneak into another country where there were jobs, food, and safety.
As well as half-assed about controlling who gets our services. It seems only fair to me that employers who benefit from illegal labor pick up the costs for their health care and kids’ education.
Does it seem to anyone besides me like there is a sudden severe shortage of good news on the international financial front?
European shares, euro slip on growth, debt fears
A trader looks at computer screens at Madrid’s bourse August 2, 2012. REUTERS-Susana Vera
Traders work at their desks at Frankfurt’s stock exchange August 8, 2011. REUTERS-Pawel Kopczynski
A man clicks his nails as he looks at an electronic board displaying share prices outside a brokerage in Tokyo September 20, 2012. REUTERS-Yuriko Nakao
By Marc Jones
LONDON | Wed Oct 10, 2012 7:19am EDT
(Reuters) - European shares fell for the third day running on Wednesday and the euro came under fresh pressure along with Spanish and Italian bonds as economic anxiety was compounded by stuttering progress in the euro zone’s battle against its debt crisis.
After rallying between June and September, major markets from equities to commodities have traded more cautiously in recent weeks as the effect of central bank support has given way to renewed growth and debt concerns.
In its semi-annual check on the world’s financial health, the International Monetary Fund summed up the fears, saying the euro zone’s crisis was an increasing threat to global financial stability and that confidence was “very fragile”.
There was also a warning that the plodding progress in the euro zone meant European banks were likely to offload $2.8 trillion in assets over the next two years to cut their risk exposure, a $200 billion increase on its last forecast.
The Euro STOXX 50 index of European bluechip firms, which has lost over 2 percent in the last week, was down 0.5 percent at 2,461.74 points by 1015 GMT (0615 EDT) as it, like the euro, sagged on the IMF’s comments.
London’s FTSE, Frankfurt’s DAX and France’s CAC were all down by mid-morning. The MSCI index of global shares slipped 0.3 percent after Japanese stocks slid 2 percent to a two-month low in Asian trading.
Daiwa securities economist Tobias Blattner noted that the IMF cut its global growth forecasts for the second time since April on Tuesday, undermining the effect of stimulus measures announced by the U.S. Federal Reserve, European Central Bank and other authorities.
“You see positive sentiment is slowly but surely fading away,” he said, citing uncertainty in the United States over the “fiscal cliff” - government spending cuts and tax rises due to take effect early in 2013 unless Republicans and Democrats can agree alternative measures.
“The risks are probably the biggest in the U.S. because you don’t know the outcome of the presidential election which obviously determines whether or not you can overcome the fiscal cliff. And you add to that the uncertainty in the euro zone,” said Blattner.
…
The risks are probably the biggest in the U.S. because you don’t know the outcome of the presidential election which obviously determines whether or not you can overcome the fiscal cliff.
So one party is really going to fix it? Obviously?
After four years of Hope And Change now it’s time for four years of Take America Back and Restore Our Future.
Time to get screwed over with a different song on the stereo. Electing Mitt will make things worse. Electing Obama will make things worse. Things haven’t gotten bad enough for an “American Spring” moment. The the Tea Party and Occupy movements realize they have more in common with each other than with the different flavors of plutocrats they’re being manipulated into supporting, THEN things might get better.
[If] the Tea Party and Occupy movements realize they have more in common with each other than with the different flavors of plutocrats they’re being manipulated into supporting, THEN things might get better.
It will take a LOT of tolerance in both of those camps to resist the attempts to manipulate them into hating each other. Much more than either have shown so far.
Apparently the IMF economists doubt the Fed’s ability to keep the lid on interest rates forever. Is there any technical reason behind their doubt, or is it more a matter of superstition?
IMF’s long-term worry: decades of higher rates
By Christopher Swann
October 9, 2012
By Christopher Swann and Martin Hutchinson
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.
The International Monetary Fund has a new long-term worry: decades of higher interest rates. Don’t get too comfortable with low borrowing costs, is the downbeat message from the normally overoptimistic fund’s flagship World Economic Outlook. Slightly feebler growth of 3.3 percent for 2012 is the short-term concern. But past fiscal excesses and an ageing population could push up interest rates for a generation.
The IMF is not well suited to delivering bad news. With 188 member nations, the fund is typically eager not to cause offense or rattle global markets. Upbeat economic forecasts also make it easier to justify crisis loans. This bias probably lies behind the IMF’s excessive optimism over economic growth in Greece, which has turned out far worse than the fund predicted.
Little surprise, then, that the IMF’s army of economists have belatedly scaled back their growth forecasts for this year and next. Indeed, given the euro mess, the expectation of 0.2 percent growth in the single currency area for 2013 may still prove too sanguine. More remarkable, however, is the IMF’s longer term gloom – at least for rich nations. While the Federal Reserve is keen to convince markets that low interest rates will last as far as the eye can see, the IMF sees a grim future beyond monetary easing.
The fund warns of a vicious cycle of high government debt pushing up borrowing costs, which in turn raises the cost of servicing bonds. Even without acute sovereign debt crises of the kind afflicting Greece and Spain, ageing populations in most developed economies will reduce available savings for investment and so push up borrowing costs all the way out to 2057. Raising taxes to service pricier debt will also retard economic growth.
In other words, the IMF presents a compelling case for shunning the government bonds of highly indebted rich countries and shifting to faster-growing and less indebted emerging markets. Of course, economic forecasting is not the IMF’s forte, and predicting decades into the future is even harder. But its long-term concerns will give investors something else to worry about.
The IMF’s worry shouldn’t be rising rates it should be wealth so concentrated that the velocity of money collapses. This is what our future holds. Workers with no earning power controlled by masters of the universe with boat loads of money w no good investment options.
The IMF’s worry shouldn’t be rising rates, it should be wealth so concentrated that the velocity of money collapses.
That’s a great observation. The IMF IS actually worried about it. Here’s from 2003 below. But here is what should scare everybody. The demonization of the type of concepts addressed below. The right has been so effective in their PR machine the past 10 years that many would today call the following IMF language hard-core “Soooshalism”. As if.
The IMF is specifically talking about the detrimental effects of wealth/income inequality and the need for redistribution in many cases. This ain’t no “commmmie” talk people. This is rational, capitalistic economics absent extreme political dogma.
Wealth Creation and Social Justice: an IMF Perspective
http://www.imf.org/external/np/speeches/2003/021303a.htm
4. Equity issues are also pertinent. The Fund has come to recognize that growth in the context of high income inequality is not likely to have a large impact on poverty reduction. And furthermore, improvements in income distribution are likely to be an important instrument for the achievement of economic growth.
At the time of the IMF’s 50th anniversary, the then-Managing Director, Michel Camdessus, explicitly emphasized the importance of policies to improve the income distribution and the implications for IMF operations of such a concern. He suggested that public support for a sustained course of adjustment and reform is most likely when “the distribution of income and opportunities to attain economic advancement are seen as relatively fair or at least not outrageously biased toward privileged groups.” Moreover, he described the various channels—economic, political, and social—through which improvements in income distribution may positively affect the growth process and a distributional content.
As such, while noting that income distributional issues are not the central mandate of the IMF, he emphasized that “the IMF cannot but call the attention of the country and the IMF membership to income inequality and its potential adverse consequences for the social fabric and sustainable growth.” Thus, redistributive policies, particularly expenditure policies, are widely recognized and supported as a way to improve the income distribution in member countries.
….it is also clear that growth alone does not eliminate absolute poverty….. Redistributional policies are thus of critical importance in “reducing” poverty or at least alleviating some of its most adverse effects, particularly when income inequality is severe.
Lately the correlation between dollar strength and U.S. stock market weakness has been one of the most reliable inverse relationships in financial history. When cash is king, stocks are peasants. The only thing that can save Wall Street now is the Fed, and the future efficacy of their efforts seems doubtful.
Dollar, yen rise on Greece, third quarter earnings concerns
NEW YORK | Tue Oct 9, 2012 4:33pm EDT
(Reuters) - The dollar and yen rose against the euro on Tuesday in a safe-haven bid ahead of upcoming U.S. third-quarter corporate earnings results and on uncertainty about Greece and Spain.
Gains in the safe-haven U.S. and Japanese currencies accelerated after Wall Street stocks .SPX fell further, with technology shares hit by several brokerage downgrades of companies including Intel (INTC.O).
Repeated warnings about the economy - the latest coming from the International Monetary Fund - have left investors cautious ahead of what could be a disappointing U.S. earnings season.
Aluminum company Alcoa Inc, became the first Dow Jones industrials component to report results when it posted third-quarter earnings per share of 3 U.S. cents from continuing operations excluding items. Analysts’ consensus estimate was for break-even.
The reaction to the news was muted on foreign exchange markets but investors may pay more attention when International Business Machines (IBM.N), the first large technology bellwether, reports on October 16. Technology is the largest component of the Standard & Poor’s 500 index.
Weak earnings results could weigh on equity prices and the euro and bolster the appeal of safe-haven currencies. Stocks and the euro move together 90 percent of the time, Reuters data showed, with the euro rising when stocks gain.
“It looks like a risk-off trade here. We saw stocks take a dive,” said Ronald Simpson, managing director of global currency analysis at Action Economics in Tampa, Florida. As markets enter the earnings season, “equities could be a little choppy and that might drive the dollar direction a little bit.”
…
how much will they print to restore home prices? would it have been cheaper just to pay off everyones mortgage?
What does it matter when there are 20-30 MILLION excess empty houses?
Perhaps they should have just have sent X amount to every one. I suspect if they had very little would be have been used to pay of debts; but it would have increased consumption.
obama has put $5 Trillion in additional debt on our children’s back in just four years, An amazing accomplishment considering the total national debt in America for 225 years was about $10 Trillion.
To put this in perspective - The national debt has increased from $10.6 trillion to $16 trillion, or 50 percent, since President obama took office.
Every man, woman, and child in the United States owes more than $50,000 as his or her share of the national debt.
But I will give obama credit.
His “bail-out a free goodies” policies and loose fiscal discipline has re-ignited the housing bubble.
We now (AGAIN) have bidding wars, easy to get mortgages, no down payment mortgages and even buyers writing letters to take care of the garden fairies if they get the “opportunity” to buy a seller’s house.
Thank you obama for hope and change. I hope we get four more years. Because life was great when America was in a housing bubble as we were ALL rich.
Remind us again who signed TARP.
Senator and then Presidential Candidate obama.
And Representative and Vice Presidential nominee Paul Ryan.
Obama is admittedly a muslim socialist. Ryan is just a hypocrite and a LIAR!
You forgot something.
President… who?
“…$50,000 as his or her share of the National Debt.”
Does anyone really believe that they are ever going to get a tax bill for the “National Debt”??????
Hell no. Because if it happened, the government would actually create a fair tax system. Starting with the “producers” paying their fair share. And/or reduction of the multitude of bennies they get, or extort from city/state/Federal governments.
Air traffic control is a good example. They want government services privatized. So the Euros privatized ATC. Now they are bitching about “excessive ATC fees”.
(What’s really fun/started the whining is what started after January 1. Now, not only do you have to pay for private ATC to/from your destination, but you also get charged from ALL of the countries within your aircraft’s range, in case you divert for some reason…….You have an awful lot of countries “within range” when the aircraft can fly 4500 nautical miles…….Go Iceland!)
Lets start with a “Don’t let the door hit you on the Azz on the way out” renouncement of citizenship tax.
“This is far and away the strongest global economy I’ve seen in my business lifetime” - Henry Paulson, July 12, 2007
Remind us again
1. How much of this is due to Bush tax cut for the elite
2. How much of this is war spending.
3. How much of this is due to decreasing tax revenue that resulted from history’s largest credit bubble.
4. How much of this is medicare prescription drug plan
5. How much is due to mandated spending on unemployment and medicaid that saw increased use due to rising unemployment due to the collapse of history’s largest credit bubble.
The deficit only matters when there is a black, Kenyan, Indonesian, dog-eating, muslim, communist in the White House.
Restore Our Future!
How much of this is due to Bush tax cut for the elite….war spending….decreasing tax revenue that resulted from history’s largest credit bubble…..medicare prescription drug plan
A majority chunk of it. Here’s a graph halfway down the story that helps. It’s over a year old but the general magnitude is still valid.
George Bush owns this deficit
Useless news alert: Tax cuts and war contribute more to our burgeoning debt than Obama’s new policies
The total cost of new policies initiated during the administration of George Bush: $5.07 trillion. Barack Obama: $1.44 trillion.
http://www.salon.com/2011/07/25/george_bush_owns_the_deficit/
obama has put $5 Trillion in additional debt on our children’s back in just four years, An amazing accomplishment
It IS truly amazing. Especially in light of the fact that Barack Obama has the lowest increases in spending of any recent president. But the BushTaxCutsForTheRich helped Obama a lot in this “amazing accomplishment”.
Rex Nutting, the international commentary editor for the financial website MarketWatch:
“Almost everyone believes that Obama has presided over a massive increase in federal spending, an ‘inferno’ of spending that threatens our jobs, our businesses and our children’s future. Even Democrats seem to think it’s true. But it didn’t happen. Although there was a big stimulus bill under Obama, federal spending is rising at the slowest pace since Dwight Eisenhower brought the Korean War to an end in the 1950s.”
Rated: MOSTLY TRUE at Polifact dot com
“Meanwhile, we would’ve given a True rating to the Facebook claim that Romney is wrong to say that spending under Obama has “accelerated at a pace without precedent in recent history.” Even using the higher of the alternative measurements, at seven presidents had a higher average annual increases in spending. That balances out to our final rating of Mostly True.”
http://www.politifact.com/truth-o-meter/statements/2012/may/23/facebook-posts/viral-facebook-post-says-barack-obama-has-lowest-s/
IMO they’re printing to keep the whole ship afloat and if you think about our government’s liabilities, it’s a whole bunch.
When the $61.6 trillion is broken down per household, that equals $534,000 — a figure “more than five times what Americans have borrowed for everything else,” according to USA Today.
By program, it looks like this:
•Medicare: $24.8 trillion
•Social Security: $21.4 trillion
•Federal debt: $9.4 trillion
•Military retirement/disability benefits: $3.6 trillion
•Federal employee retirement benefits: $2 trillion
•State, local government obligations: $5.2 trillion
http://blog.heritage.org/2011/06/07/governments-unfunded-obligations-now-total-534000-per-household/
$534,000 per household!!!
IMO we should put the Congress on a diet. Until they balance the budget and pay down the debt, the Congressional retirement funds should be shut down. These people will not quit spending unless its in their own best interest.
Or maybe we should stop giving billion dollar corporations tax breaks even when they are making record profits.
As for your source, you could not have picked a more, far right wing organization, on the planet. They INVENTED “neocon.”
USA Today is a far right wing source???
Your link says Heritage, not USA Today.
…not mention that the article, in the interest of hyperbole, barely mentions that this is spread out over the next 20 years, making the actual obligation per household… $26,700 per year.
Still not great, but nowhere near as scary.
I love how they like to front load that debt and assume that every American is equally responsible for paying it back. They also ignore the fact that most of that debt is still owned by the US and the part we don’t own is offset by the debt of other countries that we own. Wake me up when US interest rates rise. I’m settling down for nice decade nap.
Exactly.
Yes, it would of been cheaper to just pay the people or the loan investors for the lending crime spree ,rather than the Culprits and Lending Ponzi - scheme promoters .But ,that should of come at the expense of the Culprits first and foremost ,than the taxpayers secondary to that .
The way they have gone about trying to solve the crimes of the Housing Boom easy credit expansion is to prop up the Culprits and make sure the corrupted systems survive and even become bigger ,and try to prop up fake real estate prices that were artificially raised by fraud at the tax payers expense, along with a war on savors and encourage continued mal investment by keeping the Wall Street corrupted casinos alive and kicking .
In spite of Corporations weilding the damage they did ,nobody takes any responsibility ,as if Corporations are above the law ,along with their CEO’s.
I think it’s about time that the rein of the powerful Monopoly Corporations is put under scrunity . The Political influence by these Corps are huge and its almost as if they are the entities that demand the policies ,not the Government .
People have become secondary to Multi-national Corp. America and Wall Street and the Banks and the Military and the RULE OF LAW was thrown down the drain .The corrupted systems are alive and kicking ,and they are designed to make the money flow to these entities . The worker bee middle class has just been thrown under the bus and now they plan to come after Social Security and pensions ,and keep the money flowing to the bribe Politicians Masters ,and any other thing that was promised .
Just give them more and that will stimulate business they say . Yes ,it will stimulate business right into their pockets . Its all BS . Miltary /Industrial takeover ,just like Elisenhower warned about .
You have problem with Corporate Communist Capitalism, comrade?
No you have it all wrong the problem is unions and their ever growing power.
It’s not should OF…it’s should HAVE…learn to speak English.
‘would it have been cheaper just to pay off every ones mortgage’
Probably, but what would have happened next? House prices would have plummeted as the cost basis would be near zero and there would be no obstacle to sell.
I hypothesized back in 2005; when the Fed creates money, it’s all blips on a hard drive. Being an accountant, I saw that it would have to be in the form of debits and credits. So why not, I asked, couldn’t the Fed just debit this, credit that, and the housing bubble goes away?
This gets to what the powers at the Fed want; to keep their power. Such a move would expose them for what they are. They have to keep the people of the world believing the illusion that they are like the Wizard of Oz, back behind the curtain, pulling levers and pushing buttons, making it all work. When in fact they actually control nothing. They can manipulate, distort, but they can’t create wealth, or sustainable jobs/growth.
Their Flying Monkeys behind the curtain, Washington politicians, work hard to keep the illusion alive too. As the $500,000 liability shows. That number has been calculated (by the Fed no less) since 2005, and it’s probably much higher now. It can’t possibly be paid back. ‘But they have so many monkeys running around serious looking hearings’, you say. ‘Look, they’re on CSPAN, and they look so serious!’ By golly, they’re ‘grilling’ Bernanke, there must be accountability here, the system is real!
But it’s not; it all comes down to confidence. And once masses of people lose confidence in the Fed and US govt, their power goes away instantly, like the illusion it is. And that’s why they don’t snap their fingers and eliminate all our problems, as they would have us believe they could do.
^ Excellent, Ben. But what specifically is the tipping point to a Weimar scenario?
I don’t know that is what will happen. I’m just pointing out that central banks have limits to what they can accomplish and how much of an illusion their so called power is. If central banks could create real wealth, there would be no poverty in the world. The question that should be asked, IMO, is do central banks and their debt based system hinder what does create wealth?
Bravo Jonesy.
Now…. the money quote;
it all comes down to confidence.
As I stated a few days ago, their confidence game is failing. The election is a mere distraction and the failing confidence will be co-opted by a new presidential term but it won’t work. Half the country have confidence because they want to believe(even to the extent of clicking their heels together). The other half won’t “believe” unless their guy is elected. It’s the biggest bull$hit scam ever.
These guys are moneychangers. If you don’t understand, do some reading as they’ve been around for a few thousand years.
it all comes down to confidence.
and guns.
The masses will lose confidence, eventually. Then the question is how much force will the powers that be use to quell any possible uprising?
how much will they print to restore home prices? would it have been cheaper just to pay off everyones mortgage?
But what would have happened to the banks if they had done that?
I guess now really is the time for dips to buy? At least in India, the latest “flash crash” victim country…
Temporary market correction an opportunity to buy
By Ambareesh Baliga
October 7, 2012
Ambareesh Baliga
(The views expressed in this column are the author’s own and do not represent those of Reuters)
Opposition party protests against the UPA coalition government’s economic reforms could not puncture market sentiment in the past four weeks. One domestic brokerage house dealer’s “fat finger” did it in just a few seconds.
Friday’s flash crash at the National Stock Exchange made some people doubt the exchange platform’s stability and the Indian stock market, which was brought to its knees within a few seconds with a 6.5 billion rupee selling order across 59 stocks.
The mood was buoyant earlier on Friday after fresh reforms announced the previous day, and I thought the Nifty was firmly on its way to 5,850/5,900 – until all hell broke loose.
Though the markets tried to recover after the crash, sentiment was spoiled. It was not a question of our economic stability, but the exchange platform stability which occupied the minds of traders.
A number of traders lost their long positions as stop-losses were triggered. Those who were waiting to sell at higher levels lost their nerve when the markets reopened for trading. And those who were waiting to buy at lower levels thought it would be wise to wait a while longer to see how the drama unfolded.
…
ft dot com
October 9, 2012 12:58 pm
India flash crash to see tighter controls
By James Crabtree in Mumbai
Indian authorities are set to tighten trading rules as part of a probe into last week’s “flash crash”, which briefly wiped close to $60bn from leading equities and heightened investor concerns about fragile markets in Asia’s third-largest economy.
The Securities and Exchange Board of India announced the investigation after the Mumbai-based National Stock Exchange’s “Nifty” index of leading shares fell almost 16 per cent in a matter of minutes last Friday following an erroneous trade by a local broker.
That a so-called “fat finger” manual error caused the plunge, rather than an automated algorithm, has provided some relief to market observers given global concerns over ultra-fast computer trades following a crash in the US that wiped about $850bn from the Dow Jones index in May 2010.
But even with the prospect of tighter controls, many analysts say the episode raises troubling questions for India’s nascent markets, specifically over who is to blame and whether any mooted reforms would stop a repeat occurrence.
Friday’s drama began at 9.49am local time when the NSE, the larger of India’s two main bourses, saw shares drop sharply after broker Emkay Global accidentally placed dozens of sell orders worth Rs6.5bn ($125.7m).
Although Emkay quickly admitted its misstep, it is yet to explain the nature of the error, which is understood to involve a data entry mistake, confusing the price of shares to be sold for the volume – resulting in a much larger trade than intended.
The resulting fall automatically shut the market, which remained closed for about 15 minutes.
…
Haste makes Waste.
Breakingviews: crisis, what crisis? (5:57)
Oct. 8 - Crises will always be a feature of life, but the best way to evolve is to be honest about what has gone wrong in a system
The guy interviewed is Hugh Dixon; see the article which inspired the interview posted below.
ANGELA Merkel defied large protests by flying into Greece last night for a heavily guarded six-hour visit to show her support for the country that is Europe’s economic weak link.
The German Chancellor was the centre of the tightest Greek security operation in more than a decade as 7000 police patrolled streets and snipers were positioned on roof tops in central Athens.
An open-topped jeep carrying two protesters dressed as Nazis and waving Swastikas was cheered by thousands of demonstrators outside parliament, and police detained protesters in several places to stop them disrupting Ms Merkel’s motorcade.
http://www.theaustralian.com.au/news/world/angela-merkel-enters-the-athens-storm/story-e6frg6so-1226492337729
The was a short holiday, most people spend two weeks in Greece not seven hours.
Note to the Greeks.
If you hate German money so much then DO NOT BORROW ANY MORE OF IT.
Proverbs 22:7
The rich rule over the poor, and the borrower is slave to the lender.
I find it amazing that a large bank would lend a few billion to a school teacher or baker.
Oh wait, that’s right, They didn’t. They cut the deals with their corrupt leaders behind the citizens backs.
Oh wait - the PEOPLE voted for those corrupt leaders because they promised all sorts of free cheese.
And the people didn’t give a damn how that free cheese was delivered. As long as it showed up they were happy to vote for whatever corrupt leader promised even more free cheese.
You can look at any public union goon controlled state or city to see the same thing happening in America.
Eventually, the free cheese runs out. And all that is left is debt.
And NOW the people get upset.
…and you know this for a fact, how?
ALL unions make up only 12% of the entire workforce in this country. Seeing threats from such small numbers is usually not a very healthy sign, cabana boy.
Your paranoia would be comical if it weren’t so scary and blatantly agenda driven.
$12/hour public union janitors are bankrupting this country!
Oh wait - the PEOPLE voted for those corrupt leaders because they promised all sorts of free cheese.
As I recall Goldman Sachs and company helped corrupt politicians hide the debt on their books. My guess is that this was in exchange for some nice campaign contributions and first class tickets to some conference in paradise along with a hefty speaking fee.
Money controls everything now, but 2b thinks the problem is unions. Follow the money and membership and trade policy 2b and you’ll see that unions have been loosing for quite a while now.
“ALL unions make up only 12% of the entire workforce in this country”
You continue to ignore 2B’s basic point regarding PUBLIC UNIONS which are the 800# gorilla in the room.
From BLS:
Highlights from the 2011 data:
–Public-sector workers had a union membership rate (37.0 percent) more
than five times higher than that of private-sector workers (6.9
percent).
I’m grateful to my fellow Poway school district parents who willingly pay the Mello-Roos fees that fund the construction costs of our kids’ schools. We appreciate your generosity, and also your future willingness to pay off these PUSD bonds at a 9:1 ratio of debt repayment to principle.
Mangum, Vaus clash at Poway forum over PUSD bonds
By Steve Dreyer
Poway City Council candidates Steve Vaus and Jeff Mangum clashed briefly during Monday night’s candidate forum on the question of Mangum’s role in the Poway Unified School District bond controversy.
Mangum restated his position that he was not on the school board in May 2011 when the board voted to proceed with the issuance of $105 million in school construction bonds.
“I did not vote for the bond, period,” Mangum told about 75 people attending a forum in Old Poway Park. “Anyone who tells you otherwise is not telling the truth.”
Vaus said Mangum voted to issue the bonds at the Oct. 11, 2010 PUSD board meeting, two months before his final term ended.
“He helped light the stick of dynamite,” Vaus said of Mangum.
The exchange took place in response to a question from the audience asking whether candidates felt the bond issue, along with the demise of the city’s redevelopment agency, would strain relationships between the city and the school district.
The capital appreciation bonds, authorized by PUSD voters in February 2008, were sold in 2011 at interest rates of around 7 percent. Since interest was deferred and no payments will be made for 20 years, the bonds will cost taxpayers about $1 billion when paid off. That’s a ratio of about 9:1.
Mangum on Monday night said that non-Mello-Roos taxpayers in the district are paying on average about $165 per year to repay school bonds. At the end of the 40-year period, they will be paying about $500 per year, he said, “not a crushing blow.” Meanwhile, property owners on the west side of the district, in Mello-Roos districts, are currently paying three-to-four times as much for their newer schools, he noted.
…
I find it amazing that a large bank would lend a few billion to a school teacher or baker.
Oh wait, that’s right, They didn’t. They cut the deals with their corrupt leaders behind the citizens backs.
Right on.
“If you owe the bank one hundred thousand dollars, the bank owns you. If you owe the bank one hundred million dollars, you own the bank.”
How that working in Greece, Italy, Spain…etc?
Not so good.
Probably not as bad as for the bondholders who are going to be getting some serious haircuts.
Well… the creditor countries have found it difficult to tell the PIIGS to pound sand. Probably for just that reason, perhaps a version of mutually assured destruction.
On the other hand, the PIIGS countries, while engaging in some austerity, are still growing their deficits, not shrinking them.
A classic Faustian bargain for the creditor countries.
I just posted a Reuters video interview with Mr. Dixon. Here is the accompanying article, which apparently was published in a number of influential media outlets.
My personal take on his piece: Hair-of-the-dog stimulus measures currently in play have left us stuck in the denial phase of the global credit bubble.
Political Economy
The Dangers and Opportunities in a Crisis
By HUGO DIXON | REUTERS
Published: October 7, 2012
The credit crisis burst into the open five years ago. The euro crisis has been rumbling for over two years. The term “crisis” is not on everybody’s lips just in finance. Wherever one turns — politics, business, medicine, ecology, psychology, virtually every field of human activity — people talk about crises. But what are they, how do they develop and what can people do to change their course?
The first thing to say is that a crisis is not just a bad situation. When the word is used that way, it is devalued. The etymology is from the ancient Greek: krisis, or judgment. The Greek Orthodox Church uses the term when it talks about the Final Judgment — when sinners go to hell, but the virtuous end up in heaven. The Chinese have a similar concept: The characters for crisis combine parts of those for danger and opportunity.
A crisis is a point when people have to make rapid choices under extreme pressure, normally after something unhealthy has been exposed in a system. To use two other Greek words, one path can lead to chaos; another to catharsis or purification.
A crisis is certainly a test of character. It can be scary. Think of wars; environmental collapses that destroy civilizations of the sort charted in Jared Diamond’s book “Collapse: How Societies Choose to Fail or Succeed”; mass unemployment; or individual depression that leads to suicide.
But the outcome can also be beneficial. This applies whether one is managing the aftermath of the Lehman Brothers bankruptcy, the current euro crisis, the destruction of an oil rig in the Gulf of Mexico or an individual’s midlife crisis. Much depends on how the protagonists act.
Students of crises are fond of dividing them into phases. For example, Charles Kindleberger’s “Manias, Panics, and Crashes: A History of Financial Crises” identifies five phases of a financial crisis: an exogenous, normally positive, shock to the system; a bubble in which people exaggerate the benefits of that shock; distress when some investors realize that the game cannot last; the crash; and finally a depression.
Although there is much to commend in Mr. Kindleberger’s system, it is too rigid to account for all crises in all fields. It also downplays the possibility that decision makers can change the course of a crisis. A more flexible scheme that leaves space for human agency to affect how events turn out has just two phases: the bubble and the crash.
The bubble is typically characterized by mania and denial. Things are going well — or, at least, appear to be. Feedback loops end up magnifying confidence. In corporations or politics, bosses surround themselves with lackeys who tell them how brilliant they are. In finance, leverage plays a big part.
This is not healthy. Manic individuals do not know their limitations and end up taking excessive risks — whether on a personal level or in managing an organization or an entire economy. As the ancient Greeks said, hubris comes before nemesis.
But before that, there is denial. People do not wish to recognize that there is a fundamental sickness in a system, especially when they are doing so well. For example, in 2007 at the World Economic Forum in Davos, Switzerland, the greed was palpable. Market participants had such a strong interest in keeping the game going that they turned a blind eye to the unsustainable buildup of leverage.
The ethical imperative in this phase is to burst the bubble before it gets too big. That, in turn, means both being able to spot a bubble and having the courage to stop the party before it gets out of hand. Neither is easy. It is hard to recognize a sickness, given that there is usually some ideology that explains away the mania as a new normal. The few naysayers can be ridiculed by those who benefit from the continuation of the status quo.
What is more, politicians, business leaders and investors rarely have long-term horizons. So even if they have an inkling that things are not sustainable, they may still have an incentive to prolong the bubble.
The crash, by contrast, is characterized by panic and scapegoating. People fear that the system could collapse. Negative feedback loops are in operation: The loss of confidence breeds further losses in confidence. This is apparent on an individual level as much as on a macro one.
…
Is there real ever a crisis on wall street when there is a printing press?
Every crisis has been met with printing it seems. So why not lever up 100x and try and get the most out of the good times?
It’s now worked twice. Saving & Loan disaster and current events. You can damn well bet it will be done again.
Hair-of-the-dog stimulus measures currently in play have left us stuck in the denial phase of the global credit bubble.
Almost like someone wanted it that way.
No banker left behind!
“The crash, by contrast, is characterized by panic and scapegoating.”
We sure have seen a lot of scapegoating. Somebody should invent a scapegoating index.
From the WSJ - Wall Street Jobs May Shrink Further:
“Wall Street has cut 1,200 jobs since the beginning of 2012 and could contract further over the remainder of the year, while the securities industry’s cash bonus pool is expected to decline for the second consecutive year, according to a report released by New York State Comptroller Thomas DiNapoli.
By Mr. DiNapoli’s count, the securities industry in New York City lost 28,100 jobs during the financial crisis and added just 7,900 during the recovery, resulting in a net loss of 20,200 positions since November 2007.
The average salary, including bonuses, paid to securities industry employees in New York City was $362,950 for 2011, up 0.5% from the prior year, and is still the highest among the city’s major industries, the report said.”
End the Wall Street bailouts and NYC Real Estate will come crashing down…
resulting in a net loss of 20,200 positions since November 2007.
That’s it? Big Corps lay that many off in a week.
The Big Corps lay off the worker bee schlubs.
Laying off 20,200 Masters Of The Universe = $7.3B less income (using the 2011 average) in NYC.
Yep. In a WEEK.
Damn unions… oh wait.
i know this is crazy…but my wife and i have finally found a good realtor. he is in his late sixties though…wonder if that has something to do with it.
Define “good”
And are you a buyer or a seller?
lol banana
i have been a “person of interest” in the real estate market for about 5 years now. we sold in 2007 and have been renting.
over the years my wife and i would usually do the “leg work”.
but since she just had a new baby and i am working more hours i was surprised that there are realtors that will do that for you…he goes to the town and inquires about coverage rules…easements… and looks into whether variances are possible.
most other ones we have dealt with just send us emails…which we can get on ziprealty.
we are extremely picky…so i am wondering when he will get bored with us.
1. You are a buyer
2. Unless you have a specific contract with this agent - ALL real estate agents WORK FOR THE SELLER.
3. Is this agent going to tell you “NOT TO BUY” a house if it is a crap deal or if a bidding war starts? Is this agent going to tell you “YOU CAN”T AFFORD THIS HOUSE” if the house is above any sane price range? Is this agent going to tell you “YES - YOU CAN BE UNDERWATER in 6 months” when you are about to buy an overpriced house?
4. If not - then he is not your friend or a good agent. He is someone WORKING FOR A COMMISSION FROM THE SELLER. Think used car dealer. Yes, they can be nice. Yes, they can be friendly. But in the end - they WANT the HIGHEST COMMISSION possible.
5. With that in mind - keep everything as a business as possible. Read all documents carefully. And understand that the agent is WORKING FOR A COMMISSION from the SELLER when you make any decision based in the agent’s advice.
Good advice.
A step further;
Even a buyers agent wants the highest transaction price possible.
You need to find a pimp you can work with, i.e, aligned interests. Use your imagination.
“3. Is this agent going to tell you “NOT TO BUY” a house if it is a crap deal or if a bidding war starts? Is this agent going to tell you “YOU CAN”T AFFORD THIS HOUSE” if the house is above any sane price range? Is this agent going to tell you “YES - YOU CAN BE UNDERWATER in 6 months” when you are about to buy an overpriced house?”
i don’t rely on others to make these decisions for me.
perhaps i should of clarified “he is a good agent for me…doing things i do not have the time to do where others would do nothing.”
Studies have shown that RE agents get higher prices when selling their own home than others (I believe this was in Freakonomics)…they care more about a quick and easy sale, not a more highly priced sale. That last few percent just doesn’t put much in their pockets.
If you are hiring an agent to SELL your house, think about how to provide incentives to change this dynamic (bonus commissions for prices above $x, bar the selling agent from representing both sides of a transaction, etc.).
The most important factor that the agent will work for is to close the sale. No sale == no commission. If there is a sale, a higher price will yield a higher commission. So, given an overlap between the buyers max price, and sellers min price, the realtor(s) will likely try to drive the sale towards the higher end of any such overlap. But, their first goal is to close the sale, exerting pressures on both buyer and seller.
A buyers agent has no allegiance to any property- so (again, working to close a sale) he has an incentive to find a property most likely to meet the buyers needs/wants. Given their resources, contacts, etc., they can be helpful in this regard. Once such a property is identified, the usual dynamics apply.
It’s important to understand their motivations and act accordingly. But there are times when a buyers agent can be useful. When I bought my current house, during the negotiations, I flat out lied to my (buyers) agent, telling him I was ready to walk if the seller didn’t accept the offer I was presenting. I needed him to believe it- fearing that he was about to lose this commission - so that he would act accordingly in subsequent negotiations with the sellers agent.
Well said redrum. The other thing you can do in addition to understanding motivations is setting forth ground rules to minimize other conflicts. The (buyer’s) agent that I used had two rules that made me like her right off the bat:
1. She would never represent both sides of the transaction; and
2. She would never represent two buyers who were seeking a home in the same price range.
This kind of thing has limited her business, but has also allowed her a fantastic reputation in the market, which keeps her very busy (and very attuned to the market).
a good realtor
There is no such thing as a good Realtor®
Run run run
Absolutely nothing personal intended, but speaking generically you know that old poker saying where if you know who at the table is the fool, then you’re OK, but when you can’t figure out who at the table is the fool, then it seems the fool is you. Whoops.
Seriously, given 10 crooks, if you can figure out the gameplan of 9 of them and can’t figure out the gameplan of 1 of them, stick with the devil you know.
“i know this is crazy…but my wife and i have finally found a good realtor.”
It`s a Demon that has taken human form!
Demonology 101
There is another way in which a demon can cross to the human world without blending with a human host, and that is in the form of a Century 21 agent (Reprise ). … The Demon is a plain and unremarkable looking Realtor, but it permits the sale of over priced houses …. a contract can only be cancelled by the Vengeance Demon before the Realtor has taken a human form.
I enjoyed yesterday’s flamewar, but in the future some kind of posters standard of conduct based on never posting anything violating something on this page might help:
http://en.wikipedia.org/wiki/Logical_fallacy
Both sides were guilty of pretty much everything in the article at one point or another.
I’m not pleased with how the article de-emphasizes “Appeal to authority” as a mere subsection of “Irrelevant conclusion”, that sure was a popular one yesterday, but its not a bad list of fallacies to start with.
Bringing it back on topic, the FIRE sector has been trying to create a “doublespeak” where logical fallacies are the primary grammatical structure, which is kinda entertaining and highly educational to watch.
Maybe a useful on topic one liner is “You get a bubble when logical fallacies become the primary mode of communication” Applies to FIRE industries last decade, dotcoms before it, pretty much whenever the ratio of nonsense to sense gets too high that (growing) sector is going to implode soon.
You could probably set up a sector hedge fund where google-mining and graphing relative rates of nonsense vs various sectors indicates which sectors to go short and which to go long. Or you could collect marketing materials for each sector and have a disinterested philosopher type numerically evaluate the rate of fallacy for each piece of marketing, then aggregate and graph over time, etc…
They haven’t been “trying”, they have done so and it’s been fait accompli since the 1980s.
Like marketing, no one can separate reality from hyperbole anymore.
This is always a precursor to end of empire. And not a pretty one.
As for this board, is you counted all the straw-men that have visited, this would be the most popular blog in the world.
Try applying that to the Presidential “debates” and your head will explode….
I really hope the public reads between the lines before voting for these propositions?
‘Civil status’ given to over 12,000 employees and make it virtually to fire them based on performance?
Have people not learned anything from California and other states?
————-
Near the bottom of a long November ballot are two proposals that in essence ask: How easy should it be to fire a city of Austin employee?
Propositions 10 and 11 would amend the City Charter to grant most city employees “civil service” status. Under that status, the city would have to prove it has just cause for firing a municipal employee or passing one over for promotion, a much higher legal threshold than the “at-will” standard that allows most Texas employers, including the city, to generally hire and fire as they please.
If voters approve the propositions, the city manager would no longer have final say in cases of city employees who complain of unfair treatment. Instead, most of the city’s 12,000 employees could appeal to an independent board of political appointees, which could overturn management’s decisions. Leaders of the unions representing those workers say the changes are necessary to counter what they see as inconsistent and unfair labor practices — an assessment city management has denied, saying the civil-service commission would complicate managers’ ability to run their departments efficiently.
The city staff estimates the switch would cost $625,000 the first year, $467,000 the next and then $347,000 annually for technology and staffing necessary to support the new civil-service board.
Proposition 10 would grant civil-service status to the city’s 8,000-plus clerks, inspectors, librarians and other rank-and-file employees.
You see nothing wrong with them already being employees of a government entity and yet NOT being considered civil servants?
Seriously?
What is the difference?
A public union gets involved.
See the bankrupt cities of Miami, Stockton, Detroit, Newark, Camden, Philadelphia, Cleveland, Chicago, etc. to see how it turns out…
Every city you just listed has a long history of corruption that has cost them millions and is unrelated to unions.
Why should a city clerk be different than any other standard clerk?
Why should the city manager not be able to decide who to fire or not? Why should political appointees have the last say?
Let’s make it such that city employees can’t be fired!
——–
“the city manager would no longer have final say in cases of city employees who complain of unfair treatment. Instead, most of the city’s 12,000 employees could appeal to an independent board of political appointees”
Contrary to popular belief, civil employees can be fired and laid off, just not a on whim.
Well let’s say party A is elected and has full hiring and firing capabilities w/o reason or cause. They could then get out their employee profiles and fire anyone who was likely to have voted for party B including those that might be whistle blowers. Then every few years a large percentage of gov employees would be fired and new inexperienced people brought in. Sounds like a great plan. I guess at some point party A might become so dominant and in control of gov that party B would never win, there would be no whistle blowers because they would all be fearfull of loosing their jobs. Brilliant !?
It just takes an independent board of political appointees, which most likely gets donations from the union, to approve the firing of a union member…. Conflict of interest?
“Most likely” is conjecture.
However, IF that becomes the case, then yes, it’s wrong.
Bloomberg Rankings: States of Misery
“Bloomberg Rankings collected 13 variables of misery for each state in the United States and created a “misery score” to identify the most miserable.
Air pollution, child poverty, infant mortality, poor health, premature death, violent crime, unemployment — all conspire to send Mississippi, Louisiana, Alabama and South Carolina to the top of the list. Want to live in a low-misery state? Head toward Minnesota, New Hampshire or North Dakota.”
What a “coincidence” that the most miserable states are also the most conservative and least educated.
They’re also among the poorest.
Funny how all the Big and Funny Money now is concentrated in liberal parts of the country.
http://www.bizjournals.com/washington/morning_call/2012/09/seven-of-10-richest-counties-are-in.html
Ooops.
Really I thought it was creativity and technology that propelled California to the top. I guess silicone alley didn’t have anything to do with it?
Google Balance of payments to find out how those liberal states have been funding those poor states over the last few decades. If they just got that money back they’d be sitting pretty.
If they weren’t always trying to tell the red states how to spend money they might not need to send as much.
Maybe because the red states outnumber them and tend to break the laws and trample over civil rights and poop on ethics every day?
Rhetorical question. I’ve lived in half of those sates and they are as corrupt and backwards as they come.
Whatever. It just seems kind of bogus to send people money on the condition they spend it how you tell them to, and then complain that they took the money.
I’m sorry were they forced to take money from the FED’s. That’s news to me. Putting conditions on money you send to states seems reasonable to me. We wouldn’t want that medicaid money flowing to local politicians and crooks would we?
“Whatever. It just seems kind of bogus to send people money on the condition they spend it how you tell them to, and then complain that they took the money.”
That is the way a lot of our foreign aid works. Most of the aid comes with strings attached. E.g. buy our military hardware.
“Putting conditions on money you send to states seems reasonable to me.”
“That is the way a lot of our foreign aid works. Most of the aid comes with strings attached. E.g. buy our military hardware.”
Keep that moral equivalency excuse factory churning. If you communists says some of this nonsense enough, some people may begin to believe it.
You sure read a lot into that. But perhaps it was a bit off topic.
When folks talk about cutting foreign aid, they are really proposing to cut a subsidy to the military-industrial complex. Once you understand that, you will understand why it won’t be cut by either party.
Right, because CA’s central valley is so liberal.
Other coincidences shall not be noted.
“Want to live in a low-misery state? Head toward Minnesota, New Hampshire or North Dakota.”
Posted: 10:01 a.m. Wednesday, Oct. 10, 2012
Heating costs to rise this winter as cold returns
The Associated Press
NEW YORK —
Americans will pay more to heat their homes this winter as they feel something they didn’t feel much of last year: cold.
The Energy Department said Wednesday that heating bills will rise 15 percent for natural gas customers and 19 percent for heating oil customers as temperatures come closer to normal. Last winter was the warmest on record.
Fuel prices will be relatively stable, but customers will have to use more to keep warm than they did a year ago.
Heating oil customers, though, are expected to pay the highest heating oil prices and the biggest overall heating bills ever, an average of $2,494. That’s 20 percent more than last year.
Copyright The Associated Press
I can’t feel sorry for people who haven’t upgraded their insulation.
Modern insulation is a miracle of technology. It’s not much of an exaggeration to say you can damn near heat a room with a pocket lighter if you had up-to-date insulation, even in the dead of winter.
Winter and snow are Racist®
San Francisco never gets below 40 degrees, but it gets dang chilly here. Many of the older homes are not insulated. My first big project is to put insulation up on the ceiling of our basement. I can’t stand that damp winter SF chill that gets into your bones. We usually only use the heat a half dozen times per year.
Wow - the American cities ALL seem to have left wing socialists running them for a long time…maybe there is a pattern there.
———————–
4 US Cities made the top 50 most dangerous in the world
The Business Insider - October 10, 2012
Earlier, this year, a Mexican think tank — the Citizens’ Council for Public Security and Criminal Justice — released a study ranking the world’s most violent cities in 2011, and the results were astonishing.
The 20 most violent cities were all in Latin America. The USA had some alarming scores too, led by New Orleans at 21.
The ranking is based on murder rate per capita in 2011.
——————
Four (4) US Cities made the top 50 most dangerous cities in the world and for various reasons but ostensibly for their dangerous murder rate level. I have highly excerpted this article.
#48 Baltimore: Mayor Stephanie Rawlings Blake (Democrat) City has been led by democrats since 1967
#43 Saint Louis: Mayor Francis G. Slay (Democrat) City has been led by democrats since 1949
#30 Detroit: Mayor Dave Bing (Democrat) City has been led by democrats since 1962
#21 New Orleans: Mayor Mitch Landrieu (Democrat) City has been led by democrats since 1879 but that includes several “acting” mayors who did very short terms with no noted party affiliation most recent of them was for only a month in 1936
Wow - the American cities ALL seem to have left wing socialists running them for a long time…maybe there is a pattern there.
May I please play the pattern game too?
Denmark, Sweden, Finland, and Norway, Switzerland and Germany, Australia and Austria all have less public debt as a percentage of GDP than does America. (some less than half) But they still are able to provide great health-care and social program for their people….maybe there is a pattern there too.
source : wiki List of countries by public debt
There are 19,000 cities of various sizes in this country.
4 doesn’t EVEN BEGIN to make a trend.
The 20 most violent cities were all in Latin America.
Those wacky Latins! Ya just gotta luv em…
“Those wacky Latins! Ya just gotta luv em…”
I loved a wacky Latin one night.
Sounds like fun.
Posted: 4:52 p.m. Tuesday, Oct. 9, 2012
Canadian company buys 18 acres west of Lake Worth; land approved for 169 homes
By Kimberly Miller
Palm Beach Post Staff Writer
A plan to resurrect a housing development ditched during the real estate crash could be in the works on 18-acres west of Palm Beach State College in unincorporated Lake Worth.
The property on South Congress Avenue and Melaleuca Lane was bought last month by the Canadian-based Morguard company for $2.07 million. It had been repossessed by Florida Community Bank after a $4.2 million February foreclosure judgment against previous owner Coral Lakes Apartments, LLC.
The land was approved by the county for 169 townhouses in 2007, but Realtor Reese Stigliano, who represented a subsidiary of Morguard in the land purchase, said he’s not sure what the company plans for the vacant property. No one from Morguard returned calls for comment Tuesday.
“Their product is more apartment rentals so they may go back and try to rezone it,” said Stigliano, vice president of Fort Lauderdale-based Brenner Real Estate Group. “Right now there are a lot of people buying apartment land.”
Rental prices increased 3.6 percent in Palm Beach County last month compared to the same time in 2011, according to the real estate analysis firm Trulia. Real estate research firm Marcus & Millichap predicted in May that asking rental prices in Palm Beach County would increase 2.8 percent this year to $1,125 per month, while average rental rates are expected to increase 3.8 percent to $1,055.
Morguard owns or manages five apartment complexes in South Florida, including Village Crossing in West Palm Beach and Emerald Lakes, a 300-unit complex southwest of its new Congress Avenue purchase. In August, the company bought the 408-unit Woodbine Apartments in Riviera Beach for $42.1 million.
Palm Beach County property records show Morguard has also purchased about 40 townhomes in the Emerald Lake subdivision, which is directly west of the 18-acres. Stigliano said concerns about vandalism and a homeless camp on the 18-acres of vacant property also prompted Morguard to buy the land.
“Morguard saw this purchase as a way to secure their property, enhance security and in time, provide an opportunity to expand,” Stigliano said. “Within 24 hours we were in negotiations and within a week we were under contract.”
The all-cash purchase closed in 30 days, he said.
CIBT,
http://online.wsj.com/article/SB10000872396390444897304578046260406091012.html?mod=WSJ_Opinion_LEADTop
He should know. He INVENTED mass layoffs for fun and profit.
“During Welch’s reign, hard-nosed success tactics–unblinking downsizing, ruthless acquisition negotiations, and the virtual abandonment of manufacturing in favor of the more glamorous entertainment and financial services industries–coexist with scandals like price-fixing, pollution, and defense contract fraud. ”
http://www.amazon.com/At-Any-Cost-General-Electric/dp/0375705678
I guess my question for you is: What does that have to do with the content of the article? Do you disagree with the content of the article or just find it’s author disagreeable and therefore everything else is irrelevant?
The author is a known liar that created the chronic problem of today’s job insecurity.
It has nothing to with emotion or opinion and everything to with lack of any credibility now or forever.
“In August, the labor-force participation rate in the U.S. dropped to 63.5%, the lowest since September 1981. By definition, fewer people in the workforce leads to better unemployment numbers. That’s why the unemployment rate dropped to 8.1% in August from 8.3% in July.
Meanwhile, we’re told in the BLS report that in the months of August and September, federal, state and local governments added 602,000 workers to their payrolls, the largest two-month increase in more than 20 years. And the BLS tells us that, overall, 873,000 workers were added in September, the largest one-month increase since 1983, during the booming Reagan recovery.
These three statistics—the labor-force participation rate, the growth in government workers, and overall job growth, all multidecade records achieved over the past two months—have to raise some eyebrows.”
Numbers that aren’t grounded in reality, that is the point. Not business practices of the author which have no bearing on the unemployment rate.
Why are you promoting economic conspiracy theories here?
Bloomberg - Facebook Fought SEC to Keep Mobile Risks Hidden Before IPO Crash:
“On the most critical issue facing Facebook’s future as a public company, whether it could make money from the soaring number of mobile users, who see fewer ads than other customers — the letters show executives holding back crucial details until the SEC pushed for further disclosure.
Only eight days before the IPO, on May 9, did Facebook make clear in a filing that daily mobile customers were increasing faster than advertising growth, potentially hurting revenue and profits. It was the strongest public signal that the IPO could fall short of its high expectations.
The losses were acute for retail investors.” LOOSERS!
The mobile platform is one of the key weaknesses of Facebook. It just isn’t as mobile-ready as, say, Twitter or Google+.
It will be interesting to see how this plays out. Especially since there’s a lot more Internet-related development happening on the mobile web than the desktop web.
The mobile platform is one of the key weaknesses of Facebook
I hate their mobile app. Can’t share posts…
Overseer Barofsky: TARP made banks’ issues worse
Federal effort to combat 2008 crisis only made the problems that caused the crisis worse, according to man who oversaw the program.
• Barofsky slams regulators (The Tell)
• ‘Gloom merchant’ Dylan Grice hits U.S. policies
• Bair talks of battle over bank bailout rules
• Bair, Geithner clashed over long-term bonds
Made is worse for whom? Certainly not the banks who are currently, and have been for the last 2 years, showing record profits.
Your HBB Librarian highly recommends Barofsky’s new book, Bailout.
This is the book that has Geithner’s juicy “foam the runways” quote about what the bank bailouts were really meant do. (The runway foam was for the banksters, not us schlubs.)
Hope I’m remembering this right…it’s been a long time.
When a friend of mine was in airborne school (parachuting from C-130s) he said that during training they made reference to situations (usually something to do with you being unexpectedly still attached to the outside of the plane during landing) that would require “Super Suds”. They made it clear that any time the Super Suds were used, it was to reduce damage to their plane and the airfield, not to reduce damage to you.
I expect this “trauma” to end just before individual investors to pile into stocks immediately preceding the next major leg down in the stock market.
Oct. 9, 2012, 9:10 a.m. EDT
Investors are still traumatized
By Mick Weinstein
The 2008 crash still weighs heavily on investor sentiment, as Tadas Viskanta explains: “In the meantime they risk missing out the ongoing return to equities, especially in light of the particularly poor prospect for most fixed income assets.”
…
Warren Buffet, a huge obama supporter, is a large owner.
————————————-
Feds allege mortgage loan fraud at Wells Fargo
NY POST | 10/10/12 | MARK DECAMBRE AND BRUCE GOLDING
Wells Fargo, the nation’s biggest bank and its largest mortgage lender, was charged by federal prosecutors yesterday with running a decade-long mortgage fraud involving recklessly underwritten US-insured home loans to fatten its bottom line.
The San Francisco bank then compounded matters, it is charged, by covering up the toxic mortgages.
“[Wells Fargo] has engaged in a long-standing and reckless trifecta of deficient training, deficient underwriting and deficient disclosure, all while relying on the convenient backstop of government insurance,” Manhattan US Attorney, Preet Bharara, who filed the charges, said in a statement.
The scheme alleges that Uncle Sam is owed “hundreds of millions of dollars” based on Wells falsely certifying tens of thousands of bad loans during 2003 to 2005, which ultimately were backed by the Federal Housing Administration and paid out by the US Department of Housing and Urban Development.
The suit also charges that Wells knowingly hid 6,000 dicey loans from 2002 to as recently as 2010, which resulted in the government mortgage insurer shelling out hundreds of millions in claims.
In a dash for cash, Wells hired temps to “churn out and approve an ever-increasing” pile of mortgages and incentivized staff with fat year-end bonuses linked to how much mortgage sludge they could originate, it is charged.
“As also alleged, Wells Fargo’s bonus incentive plan — rewarding employees based on the sheer number of loans approved — was an accelerant to a fire already burning, as quality repeatedly took a back seat to quantity,” Bharara said.
…and who’s to say he didn’t call the Feds himself?
Landslide, boys. Hope and Change. Four More Years. Forward.
If everyone is selling, what is propping up the U.S. stock market?
Oct. 10, 2012, 8:02 a.m. EDT
Insiders betting on a market decline
Commentary: Insiders overwhelmingly choosing sells over buys
By Mark Hulbert, MarketWatch
CHAPEL HILL, N.C. (MarketWatch) — Corporate insiders are — by at least some measures — even more bearish now than they were a month ago.
And that should worry the bulls a lot, since — as I wrote in early September — their behavior then was already as bearish as it had been at the stock market’s high in late April. ( Read my Sept. 5 column, “More bad news — this time from insiders” )
To be sure, the stock market didn’t decline in September, notwithstanding the insiders’ selling.
But, since historically the insiders have been more right than wrong, it seems risky to bet that the market will continue to escape the bearish implication of their behavior.
Consider an index of insider behavior calculated by the Vickers Weekly Insider Report, published by Argus Research, which is based on the ratio of shares sold by insiders to shares bought. Last week, according to the latest issue of the Vickers service, this ratio for NYSE-listed issues stood at 5.13-to-1. The comparable ratio in early September was 5.97-to-1.
Resist the temptation to read much into this nominal improvement. Over the same period, the ratio for Nasdaq-listed issues deteriorated from 2.96-to-1 to 6.17-to-1.
As a result, the ratio for all U.S. publicly traded stocks — both NYSE- and Nasdaq-listed — has moved since early September from 3.80-to-1 to 5.61-to-1.
To put these numbers into perspective, bear in mind that the sell-to-buy ratio’s long-term average is between 2-to-1 and 2.5-to-1. Vickers consider any ratio below this average to be bullish, and any number above it — like the current level — to be bearish.
At the beginning of the bull market in March 2009, for example, the sell-to-buy ratio got as low as 0.42-to-1, At the stock market’s low in early October of a year ago, at the bottom of that year’s summer/fall correction, the ratio got as low as 1.04-to1.
…
Aside from the financial version of the Bernoulli principle, as supported by HFT air, is there anything else supporting the stock market?
I’m reminded of that famous aviation quote: “The airplane flies because of Bernoulli, not Marconi.”
People unwilling to sell at lower prices. And willing buyers at higher prices.
Who, exactly, are these ‘people’ of whom you speak?
Cash pulled from stock funds for 7th month in row
By Mark Jewell on October 10, 2012
1 hour ago
BOSTON (AP) — Even as stock prices rose again in September, investors withdrew money from stock mutual funds at the fastest pace of the year, marking the seventh straight month that withdrawals have exceeded deposits.
Bond funds attracted cash for the 13th consecutive month, according to a report from the firm Strategic Insight, which also said Wednesday that investors showed a preference for exchange-traded funds over traditional mutual funds. The amount of net deposits that stock ETFs attracted last month was about double the total that was removed from stock mutual funds, suggesting that investors still saw value in stocks.
The Standard & Poor’s 500 index rose more than 2 percent in September, ending the month up nearly 15 percent for the year. Despite those strong gains, the last month that investors added new cash to stock mutual funds was February.
It’s further evidence of conservative investing trends dating to 2008, suggesting investors remain anxious about stock volatility and the economy four years after the financial crisis began. Investors are drawn to the income-producing potential and smoother returns that bonds typically generate.
“Insatiable demand for income and a lingering, semi-permanent state of investment anxiety continue to drive the choices for most mutual fund investors,” said Avi Nachmany, research director with New York-based Strategic Insight.
…
I don’t know about the rest of you, but I’m noticing quite the uptick in Vanguard e-mails about investing. I’m not saying that Vanguard is one of the bad guys, but I think the outflow of retail investor money is pinching them too.
I think I commented on this before…does any of this have to do with standard rebalancing between stock and bond funds within 401ks?
If your stock fund goes up, and your bond fund goes up less, rebalancing would tend to sell some of the stock fund, and buy some of the bond fund.
“…does any of this have to do with standard rebalancing between stock and bond funds within 401ks?”
If you ‘knew’ a stock market crash was coming, wouldn’t you want to dump all your stocks and pile into bonds?
Just sayin’
Yup. You’re right, but that lack of confidence should also result in people willing to sell at lower prices to get out before the crash, which would result in lower stock market…just like today…NOT a flat to rising market–which was the conundrum that you were trying to figure out.
Sorry, owners of securities unwilling to sell at lower prices, and willing buyers of securities at higher prices.
Confidence and perception come into play, not just flow of funds.
Oct. 10, 2012, 12:08 p.m. EDT
Europe stocks drop as IMF warns over debt crisis
Divergent moves as EADS-BAE merger talks fail; Greece off 3.5%
By Sara Sjolin, MarketWatch
LONDON (MarketWatch)—European stock markets dropped Wednesday, as the International Monetary Fund issued a warning about the impact of the euro-zone debt crisis and as Greece’s equity benchmark retreated 3.5%.
The Stoxx Europe 600 index XX:SXXP -0.55% lost 0.6% to 268.71, following a 0.5% decline in the prior session, although bank shares in London advanced on eased capital rules. Investors also trained their focus on the failure of a proposed merger in the defense-aerospace sector.
“It’s ‘glass-half-empty day’ where everybody seems to be picking on any news flow that is negative. We’re also about to go into earnings season, which is a concern,” said Frances Hudson, global thematic strategist at Standard Life Investments.
…
From Tucson’s leading daily fishwrap:
Mixed outlook for home sales here
Pace of foreclosures yet to slow; luxury market sees some gains
Key point:
Although many observers predicted that foreclosures would drop off at the end of the third quarter this year, the number of filings indicating the beginning of foreclosure proceedings is still about 400 per month above pre-recession levels.
There were 626 last month, Pima County Recorder’s Office records show. That’s compared with 795 in August and 798 in September last year.
The third quarter was forecasted to mark the end of the foreclosures brought on by five-year adjustable rate mortgages issued in 2005 and 2006, Kneup said.
“It is continuing longer than most models had predicted,” she said. “That goes back to jobs.”
From the story comments:
So from this home owner’s perspective, I lost 43.7% of the assess value of my home from when I purchased it to now. Data is according to Zillow.com. Remaining due on my home loan is 137% of my current zillow value.
So the housing market is doing what?
Do not give us weak minded dribble. Give us statistics that will help us understand Tucson housing market behavior. If you do not know what that is go find a statistician. Not a realtor. Many of those folks have no concept for probability and statistics … they just move houses.
You can’t stop this train! It’s going to go up forever! “”Commies” gone wild!” They ain’t building any more land cliches!
Brazilian Housing Market Boom
September 12, 2012 Written by: Property Wire
http://www.nuwireinvestor.com/articles/brazilian-housing-market-boom-59782.aspx
The latest house price index report from Knight Frank shows Brazilian real estate prices are climbing while most of the rest of the global market continues its freefall. Brazil’s house prices increase by more than 18% in the second quarter of 2012 compared to the same period last year,
Brazil has the fastest growing house market in the world at a time when the outlook for residential real estate in many parts of the globe, especially the eurozone, is slowing.
Global house prices increased by an average of 1.1%, the latest index from Knight Frank covering the second quarter of 2012 shows.
It is the index’s strongest quarterly rise since the last quarter of 2009….
….China, which alongside the US has the largest bearing on the world’s housing markets and has largely propped up the index since early 2009, is now providing mixed messages. Although prices here are down 7.1% in annual terms they fell by just 0.1% in the last quarter. A range of cooling measures have helped to curb speculative demand but two interest rate cuts since June are reinvigorating the new homes market with prices now edging upwards in 49 of China’s 70 key cities.
Having seen prices fall by 34.7% peak to trough between the second quarter of 2006 and the first quarter of 2012, the US housing market is gaining traction and prices are finally rising. Mortgage demand is up, new construction levels are improving and foreclosures are at their lowest level since the final quarter of 2007.
And this is happening without 4% interest, 30 year fixed rate mortgages.
Rio:
I saw India has massive increases even now. There interest rates are like 10% for savings and 11% for mortgages.
In fact Geithner and Bernanke are there in Mumbai and something is cooking. Probably they are wanting mor eprinting by India or how to make their bubble go even higher.
I think India has the buggest bubble worldwide followed by Australia, Singapore, Brazil and Canada.
“In fact Geithner and Bernanke are there in Mumbai and something is cooking.”
Is there any connection between their visit and the recent ‘flash crash’?
…and even more efficient and affordable.
http://www.windenergy.com/products/skystream-hybrid/skystream-hybrid-6
Get. Off. The. Grid.
Is that an Arizona-based company? If so, woo-hoo!
“…and even more efficient and affordable.”
Layoffs at Southwest Windpower
October 08, 2010 5:05 am •
JOE FERGUSON Sun Staff Reporter
Slow sales of residential wind turbines have forced Flagstaff-based Southwest Windpower to lay off employees in its manufacturing and operations division.
In August, state officials announced Southwest Windpower had received a federal stimulus grant worth $458,918 to upgrade and expand its production facilities, with an emphasis on clean manufacturing.
It is one of seven grants worth $2.7 million awarded to Arizona businesses designed to improve production capabilities and create nearly 180 new jobs.
Manufacturers given the grants were required to create at least two jobs per $100,000 received, provide 50 percent matching funds and ensure equipment will be operational within a year.
Thomson said the company is in the process of reviewing the grant and has not used the stimulus money.
Joe Ferguson can be reached at jferguson@azdailysun.com or 556-2253.
http://azdailysun.com/news/local/article_d616be75-70bf-5050-95e9-e8411a7d0cc9.html -
“….$2.7 million to create……..180 new jobs.”
What a bunch of losers.
They should have given $2.7 million in tax breaks to the “producers”
But don’t worry. Governor Brownback is going to show all of you “Godless-liberal-diversity loving-freeloader Doubting Thomas” types. His new Kansas State tax plan ends income taxes on businesses and the “producer” class, and shifts all of the burden onto poor people and the Middle Class, mainly by cutting tax deductions for child care, etc.
That low rumble you hear is all of those producers stampeding out here to Kansas, the Promised Land, which will soon blossom with producer-entrepenurial types hiring all kinds of people, paying middle class wages, which will be taxed to perpetuate the cycle.
Or maybe not.
That low rumble you hear is all of those producers stampeding out here to Kansas,
Man, I hope it works as I still have many friends and family there. My bet is on a disaster for state services which used to be pretty good IMO.
http://www.cnbc.com/id/49360773
Article related to refinances that are happening in today’s market (cash out vs. cash in, etc.).
Barofsky: “Wells Fargo is Too Big To Jail”
Bloomberg video (02:26 minutes):
http://www.bloomberg.com/video/barofsky-wells-fargo-is-too-big-to-jail-5h07FjUPSs23T7ecSA9_1A.html
Well maybe they can at least charge them a fine in the $Ms against the $bns in profit from their subprime lending activities?
How is it that we spend 100s of billions annually to keep out any dangerous materials from our ports, airports and shipping lanes using technology, armed guards, xrays, sniffing dogs, yet we willingly let millions cross the border illegally with capability to carry any of these things in their pocket or backpack. How does this make sense.
Mongo has passed…….
Long live Mongo.
Long live Mongo.
…A fellow “pawn in the game of life”.….
I had a colleague from Spain about eight years ago who used to compare notes with me on the relative size of the U.S. versus Spanish real estate bubbles. He insisted it was much worse in Spain compared to California.
In retrospect, I suspect he knew that of which he spoke.
Oct. 10, 2012, 5:10 p.m. EDT
S&P cuts Spain’s rating to one notch above junk
By Wallace Witkowski
SAN FRANCISCO (MarketWatch) — Standard & Poor’s downgraded Spain’s long-term credit rating to one notch above junk, to BBB- from BBB+, because of mounting risks to the country’s public finances. The outlook is negative. The ratings agency said that tensions between Spain’s regional governments and the central government are rising, leading to less effective policy decisions. Also, the country faces a GDP contraction of 1.8% in 2012, and 1.4% in 2013. “The pace of private sector deleveraging, together with the government’s budgetary consolidation measures, is likely to lead to an even deeper contraction of investment and consumption in both the public and private sectors,” S&P said in a statement.
In the United States it takes 70 to 88 hours work to afford a low priced two bedroom apartment on min wage . Some people are working two jobs and still can’t afford low price apartments .
I have not heard much about any talk about raising min wage in light of the rise in prices overall ,especially food going up .
They don’t want to raise wages(any wages) and want to create inflation out of thin air. I was looking and minimum wage in Aussie is like $15 and their currency is even stronger than ours now.
LMAO Big Bird is a 1%er
Big Bird, 1-percenter
Posted: October 06, 2012
Kill Big Bird?
Why the hell not?
Team Obama, desperate to salvage something from Wednesday’s debate debacle, seized on Mitt Romney’s call to end PBS’ taxpayer subsidy.
It was — horrors! — a gaffe.
Nonsense.
“I like PBS,” Romney said. “I love Big Bird. But I’m not going to . . . borrow money from China to pay for [it.]”
Gaffe? No way.
Romney’s not out to drive Big Bird off the air. He just doesn’t think that he rates a Washington subsidy — and he’s not alone.
President Obama’s own Simpson-Bowles deficit-reduction commission calls for ending PBS’ subsidy — some $280 million — outright. And for good reason.
PBS is now home to numerous lucrative franchises — with “Sesame Street” the most successful, having earned $211 million in merchandising sales from 2003 to 2006.
Indeed, Sesame Workshop’s total assets at the end of last year stood at more than $411 million — and its CEO is paid nearly $1 million a year.
Which certainly makes Big Bird a 1-percenter, earning far more than Mitt Romney — and paying far less in taxes, to boot.
Now, when the Corporation for Public Broadcasing was set up, there was little in the way of educational TV; indeed, all broadcast options were limited.
That’s hardly true in the Information Age, where education outlets are limitless — and well-funded.
PBS contends that Romney “does not understand the value that the American people place on public broadcasting.”
Actually, he does — which is why he figures they’ll voluntarily support it through charitable donations, as many do.
(And by the way, the Obama White House yesterday refused to say if it will preserve tax deductions for all those contributions to “your local PBS station.”)
Big Bird, in short, is doing just fine. But in an era of a $16 trillion-plus national debt, he can pay his own way.
http://www.nypost.com/p/news/opinion/editorials/big_bird_percenter_mTV4wbysxoWubffkjSG9tK - 76k
PBS does produce actual news and investigative reporting that fox,cnn, etc don’t. Their kids TV isn’t full of commercials for sugar pops and kids dolls that raise their skirt. Their kids shows are educational as well. We make a big donation every year.
“We make a big donation every year.”
Good for you! Just don’t donate MY money if you don’t mind. Let me decide where my money goes (difficult for a liberal to comprehend).
And please don’t donate MY money to your stupid war and oil concerns. Actually, taxpayer subsidies to PBS are approximately .003% of subsidies to Big Oil/MIC and arguably make a far more positive contribution to the planet every year. But that’s difficult for the simplistic to comprehend.
Ratings agency Standard & Poor’s has downgraded Spain’s credit rating, highlighting a deepening recession and mounting pressure on Madrid’s finances.
S&P cut Spanish debt from BBB+ to BBB-, one level above junk status, and warned of possible further downgrades.
http://www.bbc.co.uk/news/business-19905747
More cuts in Spain, soon be junk.
I should ask for more money except I won’t get it. And once you are out of work you are damaged goods.
What economists call the “skills gap” is one of the leading causes of unemployment today.
Quite simply, the demand for high-levels skills is outpacing the amount of people who have those skills, contributing mightily to structural unemployment, a term that refers to those out of work for reasons that exceed simple economic gyrations.
“Today, there is a significant and growing mismatch between the country’s demand for talent and its current supply,” research firm Deloitte said in a study released last week examining the skills gap issue. “The type of talent demanded today - and needed tomorrow - is increasingly either outdated or out of stock.”
99% of skills that I hire upon can’t be done in a short while.
They talk like it is magic.
But it isn’t. And you can’t fake it.
If someone could re-post this in the morning, I’d appreciate it. My theory is the TBTFs have been secretly “nationalized” via being made whole for dead loans. Here’s why…
I get home from work, check the mail…. boomer couple from Illinois rolls up on the abandoned house next to me. We use that driveway for our second car. She asks me, “does someone live here now?”
“Naw, we just use the house for parking”
“Oh, so what’s the deal?
“It’s been abandoned for three years.”
“Yeah, we tried to buy it last year, but BofA said they couldn’t release it yet.”
5:20am PST OK for ya?
U.S. Fiscal Disasters
Notable cities, counties and stats at or nearing fiscal insolvency
1. California ($16 bn 2012 deficit)
2. Illinois ($43 bn 2012 deficit)
3. Nevada ($1.8 bn 2011 deficit = 55% of general fund)
4. Stockton & San Bernardino, CA (2012 bankruptcy filings)
5. Los Angeles, CA (predicted to go bankrupt within two years)
6. Harrisburg, PA (2012 bankruptcy filing)
7. Jefferson County, AL (2011 bankruptcy filing)