Bits Bucket for November 17, 2012
Post off-topic ideas, links, and Craigslist finds here. And check out Chomp, Chomp, Chomp by a regular poster!
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
May 2024 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
Hello HBB’ers. Has anyone seen whether their local Trader Joe’s store is carrying the ‘Trader Jose’s ‘ Spicy Hot Cocoa yet? I wait in anticipation of its arrival. Why can’t other places be as groovy as TJ’s ?
“Why can’t other places be a grovy as T.J’s?”
Because T.J.’s is privately owned and don’t have stockholders to please on a quarterly basis?
Same with In & Out Burger.
Buffett often remarks as to how Berkshire’s closely held companies do much better than its public holdings.
1. Share the wealth (and the expenses) or
2. Keep the wealth (and all the expenses) to yourself.
If you choose door number 2 then you have an incentive to keep the expenses down.
If you choose door number 1 then not so much. With door number 1 you get a lot of perks such as corporate jets whose expenses you get to share with strangers. With door number 1 these same strangers also pay your salary. With door number 1 the company can go broke as you grow rich.
“1. Share the wealth (and the expenses) or
2. Keep the wealth (and all the expenses) to yourself.”
1. = communistic incentives
2. = Adam Smith’s invisible hand incentives
“1 = communistic incentives”
Not exactly the term I would use but I think you are on to something.
If you were to call a corporate chieftan - somebody who thinks himself as a Capitalist - a Commie then you would probably have a fight on your hands. But dig into his role and compare his role to the role of a Communist chieftian and you would probably discover very few differences.
“Not exactly the term I would use but I think you are on to something.”
I was just recalling my favorite story about the collective farms of Soviet Russia, which if memory serves I first heard from one of my grade school teachers several decades ago. It seems the collectively operated farms yielded very little production, as the workers shared none of the profits and got paid no matter how much was produced. But the government allowed the workers a small plot of land of their own where they could put in a garden; turns out the gardens had a huge yield per acre compared to the state-run collective farms.
This “sharing the wealth”, as it can be termed, was part of the idea that backed the concept of 401ks and other employee stock incentives. Give an employee a “piece of the rock” and he will take care of the company as if he was a part owner - which he would be.
Same goes for the guys at the top. Give them stock - or options to buy stock - and they will become owners of the very company they are running and thus, as owners, they will have an incentive to run the company as it should be run.
Great theory! The only problem is: The guys at the top usually do not keep the stock they were given or were allowed to buy on the cheap. Usually this stock is treated by these guys as part of their pay and is immediately cashed in and is treated as if it was part of their pay.
Which it is.
Is a “share the wealth” comparison of 401ks and employee stock options being made here?
If so, it shouldn’t.
The first enables employees individual ownership and ownership of investment options. (True, regarding matches, full ownership happens only after 5 years. It shouldn’t. But it does).
The second does not enable individual ownership of investment choices. Much of what you receive from stock options is dependent on company performance.
Yes, all of this is basic. So why are the two being compared? Contrasted, sure.
A 401k truly is “shared wealth” after the full investing period is reached. Stock options - never. They are more akin to the concept of “shared future”.
So what you end up with is employees, those at the bottom who are part owners because of their 401Ks, sharing in the expenses of the people at the top who are the ones who are running the expenses up.
For example: If the corporation has a corporate jet that the top guys get to fly in anytime they feel like it (and it is only THEY who get to fly in it any time they feel like it) and these top guys get to send the bill for the corporate jet’s expenses to the corporation then the owners of the corporation - part of whom are the 401K guys - end up financing the top guys plane rides.
Even though the owners of the corporation collectively OWN the corporation they do not necessairly benifit from their status as owners nearly as much as those at the top who may not OWN much but most certainly CONTROL all.
So how does one get to be one of those in control?
(Hint: It’s a private club and you ain’t a member.)
Which goes back to what I said at the beginning of all this, that there are few differences between Corporate chieftans and Communist chieftans.
I love their lemon curd. The best. It’s usually out during this time of year.
So, basically no Spicy Cocoa this year? I was just at TJ today and they have some namby pamby small tins of melting chocolate stuff. Whatever. I’ll have to dig up a recipe on the internet now. Oh the pain, the pain….
Try Scharffenberger’s cocoa powder and add a touch of cinnamon and cayenne. Make a paste with cream and sweeten to taste.
Go online to McLaren’s Original Scottish Shortbread. Lemon curd nirvana. The shortbread is excellent, too.
The mindset of the free sh*t army and the government that buys their votes.
And it helps the local economy!!!
———————————-
Housing vouchers can benefit local economy, federal official says in Cedar Rapids
The Cedar Rapids Gazette | November 8, 2012 | Rick Smith
The city’s Civil Rights Commission has pushed to bring attention to housing discrimination based on how a tenant pays rent, including low-income tenants who qualify for and use Section 8 housing vouchers to help pay for housing.
At the commission’s Fair Housing Conference here on Thursday, the regional fair-housing director for the U.S. Department of Housing and Urban Development took time to emphasize the value of the sometimes maligned “Section 8″ housing vouchers to both extremely low-income households and to the overall economy.
The discriminatory taint that can come with Section 8 vouchers has surfaced in Cedar Rapids in recent years as neighbors at times have expressed opposition to proposals to build apartment complexes using federal affordable housing tax credits. Such projects must control the amount of rent they charge, and tenants also can use Section 8 vouchers if the rents are still too high. Some of those projects have characterized themselves as “work force housing” and emphasized that most tenants won’t use vouchers.
Oh boy, they’re building these subsidized apartments all over town. But still, we need more affordable housing!1!! to house all the people who are moving here for all the affordable housing and services we offer.
The problem isn’t the fact they’re using vouchers…it’s the kids of the single moms getting into trouble wherever they move, or the loser grown kids who come back to live with their boomer parents.
Not in the news lately so I guess these numbers got a lot better in the last 5 months. Probably like 8 in 10 now.
Mortgage Modification Defaults Occur For 6 In 10 Borrowers, Study Says
The Huffington Post
By Bonnie Kavoussi
Posted: 06/22/2012 2:26 pm
For many homeowners that have fallen behind on their mortgages, a loan modification doesn’t prove to be a cure-all.
Six in 10 delinquent homeowners that recently received mortgage modifications defaulted again within 18 months, according to a new study by TransUnion, a major U.S. credit bureau. (Hat tip: American Banker.)
There is one silver lining: Homeowners that received mortgage modifications fared better on new consumer loans than homeowners that did not receive mortgage modifications. They were roughly half as likely to default on a new auto loan and four-fifths as likely to default on a new credit card loan as those that did not receive a mortgage modification.
The study examined homeowners that had been at least 120 days delinquent on their mortgages. It defined re-default as being delinquent for 60 days or more.
There’s still no consensus on the effectiveness of mortgage modifications. A new study by Amherst Securities Group, a broker-dealer in mortgage-backed securities, found that mortgage modifications that included a principal reduction have been more effective at preventing foreclosures than mortgage modifications that only reduced interest rates, according to CNN Money. Principal reductions bring the amount owed closer to the home’s market value.
The Amherst study found that 12 percent of borrowers who got principal reductions re-defaulted last year, compared to 23 percent of homeowners who received only interest rate reductions and 30 percent of homeowners who only were able to postpone their mortgage payments, according to CNN Money.
http://www.huffingtonpost.com/2012/06/22/mortgage-modification-default_n_1618877.html - 271k - Cached
We had a section 8 rental a block or two over. The renters moved in and proceed to plunder the neighborhood over and over and over. The police kept raiding them and taking out guns and drugs and arresting people for parole violations. The looting continued unabated until one very brave kid nailed one of them and held him under citizen’s arrest. The police got tired of it all and took the house apart from top to bottom ripping out all the drywall and finding contraband everywhere. Finally the landlord was barred from section 8.
Here’s something for you and everyone here to ponder”
“Freedom means never being forced to lie”
I ponder it every day of my life.
Finally the landlord was barred from section 8 ??
Can’t understand why….The lease arrangement is not with the occupant….Its with the county…The owner has no control over who the county chooses to put into the house…Owner still has maintenance obligations that are brought to his attention through routine county inspections…
Right, and this is why section 8 is a bad idea.
The owner no longer cares who is in the house because no matter what, he/she will still get paid.
A friend of mine bought a property for cheap because the owner was afraid to GO TO the property to collect the rent.
When I saw it I understood why because it was like a warzone.
Gunfire, sirens, helicopters…
Gunfire, sirens, helicopters…
All symptoms of gross wealth and income inequality
“All symptoms of gross wealth and income inequality”
You’re living in exhibit A.
You’re living in exhibit A.
Yes. But it’s getting better and the women are sweet.
Is this right? I didn’t know landlords had no say in who rented for a Section 8
Is this right ??
Yes…Your agreement is with the Agency not the occupant…
Although your ultimate agreement is with the agency, this doesn’t mean a landlord has no say in who rents. Not disputing, just don’t know. How does the property get rented out in the first place? Who shows it, county people?
this doesn’t mean a landlord has no say in who rents. Not disputing, just don’t know ??
They really don’t…The Agency selects the tenant…
How does the property get rented out in the first place? Who shows it, county people ??
Basically yes…There is some interaction between the owner and the tenant but that really occurs in the move in phase..
As an owner, you can offer your house or apartment to the Agency…If the agency says yes we will take it, then you enter into a lease with the agency…
The agency selects a occupant for the house/apartment and the tenant moves in…The agency pays the rent although a small portion could be paid by the tenant…
Many owners like section 8…The rent is guaranteed and direct deposited…Any damage is also covered by the agency…The only interaction the owner has with the tenant is to fix something…
Thanks for your helpful comments scdave, didn’t know the part about the agency covering damage either.
I looked up the Phoenix area (maricopa county). Looks like they’ll pay up to $1495 for a 4 br house, can’t tell if that is with utilities or if you get extra for them.
angelo mozillos bank accounts should be confiscated to support Fannie and Freddie.
I wonder why Attorney General Holder didn’t go after Angelo? Or the Fed or the SEC or the comptroller of the currency. Seems like they just played the statue of limitations out. Maybe it has something to do with the fact that he bought and paid for your POTUS. You should have voted for Ron Paul. He would have taken care of this guy. So sad. To bad. You lost your chance.
I wonder why Attorney General Holder didn’t go after Angelo ??
Because thats the way it works in our America…Selective justice…
I have often wondered, what would be the percentage per capita of licensed drivers that have had a DUI…??
Now, what would be the percentage per capita of licensed drivers in law enforcement or firefighting that have a DUI…??
If I had that information, I believe it would suggest by a wide margin that law enforcement & firefighters do not drink & drive as much as percentage which would be total BS…There is a reason why firefighters have there little firefighter stickers on their rear window along with their license plates…
Like I said, selective justice…
For the same reason John Corzine in not in jail.
FOr the same reason not ONE wall street banker is not in jail.
Dennis Kucinich opinion piece in the UK Guardian
Obama administration must account to Congress for targeted assassinations
“The White House will not even release the legal advice about its drone kill policy. The American people needs full oversight
According to news reports, President Obama maintains a list of alleged militants to be assassinated. Some are US citizens. None will get to plead his case. The president tells us to trust that this is all perfectly legal and constitutional, even though Congress is not allowed to see any legal justification. The weapon of choice in these assassinations: remote-controlled planes called drones.
The targeted killing of suspects by the United States is slowly and quietly becoming institutionalized as a permanent feature of the US counterterrorism strategy. Unless members of Congress begin to push back, such killings will continue – without any oversight, transparency or accountability. Victims of drone strikes – including US citizens – are secretly stripped of their right to due process and are arbitrarily deprived of their life, in violation of international human rights law.
The attempted characterization of drones as a precise weapon is irrelevant and chilling because it values the alleged high-tech efficiency of the killing above the rule of law. Drones are a weapon that must be subject to the same constraints and laws as every other weapon employed by the US government.”
http://www.guardian.co.uk/commentisfree/2012/nov/16/obama-administration-account-congress-targeted-assassinations
Wasn’t Romney’s plan to quietly continue this policy, if elected?
And wasn’t Ron Paul’s plan to stop it?
Yup.
Who is “Romney”?
Do you support assassination by Presidential Decree or not?
Whether or not I support it is entirely beside the point, which is that the voters had no choice on November 6.
They had a choice. Come on - it is a free country - democrats could have registered Republican and voted for Ron Paul in the primary. Then voted him in to office. To say they had no choice is ridiculous. People voted in Obama because they wanted Obama.
They still have a choice, Cantankerous.
They could march on Washington.
Isn’t that what good, responsible civil rights activists do?
You’re a university employee. Why not start an uprising yourself? Isn’t that where 1960s-era activists got their start?
How does one march against something their own candidate (President) backs?
Interesting dilemma.
Do you have the guts to sermonize about the issue on your campus grounds?
Cantankerous:
Remember that Obama = Bush and Bush=Obama.
Remember that neocons populate both sides of the aisle in Washington.
It is no longer a “we” versus “they” battle of political parties. It now is a big government versus individual liberties battle. The neocons have won.
Now go write your sermon.
It’s quite disturbing to have a poster who calls himself MacBeth lecture you about what you are and what you aren’t this early in the weekend.
I wonder if today’s conservative college students feel the same?
At the Colorado Republican caucus this February, our precinct table was half Ron Paul supporters, none over age 35.
Is it “disturbing” how, exactly?
Does that kind of thinking shake things up a bit for you? That’s good - purveyors of knowledge such as yourself often are a bit too comfortable with your own belief systems to be of service to students.
You seem to have forgotten that 1960s-era activists marched on Washington while BOTH a democrat and a republican successively held the presidential chair.
Back then, ideals were based on the ethical, not the political.
Seems you’re not ready yet to argue ethics.
Again, the question: Would you march against an Obama White House? Answer it.
Does ethics trump politics?
That’s good to hear, goon.
Please drop the “Republican” bit, however. It’s no longer useful.
The argument no longer is Republican vs Democrat.
It’s Big Government vs. Individual Liberty.
‘Is it “disturbing” how, exactly?’
I’ve read Macbeth many times and seen many performances, so I know the character was a vile fiend and murderer.
Okay.
How about anwering those other questions?
“This is not a deposition, sir.”
“This is not a deposition, sir.”
Hubbard belongs in prison where he can spend his time negotiating his virginity with gansta thugs.
Do you support assassination by Presidential Decree or not?
Let’s tease this out. Say we are watching a group of known terrorists, who have struck us before and openly state they will strike us again, working on a bomb and recruiting suicide bombers. Should we :
a) Ignore them.
b) Attempt to stop them.
If your answer is b, then how do we stop them, if local law enforcement is either unreliable, uncooperative, or nonexistent?
How do we stop them if one of them is a US citizen?
Alpha,
I am a sniper. Teasing out PB is like nailing jello to a tree.
Stop asking those bloody nuanced questions!
For those concerned about paramilitary misuse of the drone program, here’s a must-read by Tom Junod published in this month’s Esquire Magazine:
“I hear that Petraeus likes it,” a source told me. “I hear he likes to be in the room when it happens.”
He wasn’t talking about sex. He was talking to me a good six months before the revelation of the affair between General David Petraeus and Paula Broadwell, and so he wasn’t commenting on Petraeus’s bedroom enthusiasms. He was talking, instead, about killing. He was talking about drones…. To the best of our knowledge, the United States has carried out no drone strikes since his fall.”
http://www.informationclearinghouse.info/article33049.htm
A lot of military personnel get off on killing. I remember an old co-worker, back in the early 90’s, bringing pictures to work of burned and disfigured bodies from the Gulf War. He was absolutely delighted to show them, and talked of how many people he killed. He was clearly deranged.
“He was clearly deranged.”
Combat will do that. From what I have seen once you go there you can’t come back, at least not all the way back.
Everything that “normal life” contains loses its meaning, loses its importance.
Which is how the military perpetuates itself.
There it is.
Was George Washington deranged?
No, just a rabid capitalist with a mission.
But I take your point. We’re talking about two different things here. Territoriality/protectionism/greed are innate human traits. But institutionalizing them by subbing them out to the highest bidder requires suspension of other human traits such as compassion, empathy, and reason.
Only by brainwashing (basic training), indoctrination (our “Heroes”), and reinforcement (bonuses, payment, and benefits), can the latter be overcome in favor of the mercenary. And only by constant reinforcement by one’s primary social group (the military culture) can it be maintained in the face of one’s family and the greater society — which tends to look upon killing people for money as terribly bad manners.
Did George Washington not have compassion, empathy, or reason?
I said “overcome” not “obliterate”. We’re talking perpetuation of a standing army, not GW’s personal attributes vis a vis an impromptu militia. Peer pressure does strange things to the impressionable, neh?
“A lot of military personnel get off on killing.”
As a former grunt I’d have to disagree with you, but maybe it’s the REMFs you are talking about?
When do they raise the debt ceiling again?
Isn’t that a mid-summer ritual, or do they have to do it in the spring as well?
That’s not how it works. They set a maximum debt amount. When they reach it the U.S. treasury can no longer issue debt of any kind not even CMB’s. According to our favorite tax evader in chief we will hit it by the end of this month. So they have to vote to raise it by then -or- Turbo Timmy will have to start selling stuff and raiding pension funds to raise cash. He can do that for a few weeks at best. But eventually he’ll run out of assets to sell and pensions to plunder. And because it is a per-announced fire sale of assets the banks will front run him and give him the lowest possibly price - thus ripping off the treasury. So it’s a really bad way to raise cash in that it can cost the government billions of dollars.
DQNews has just posted the California number for October 2012 for sales of houses and condos. After peaking at a median of $484k in 2007 and dropping to a low of $221k in 2009, the median is now $285k. That’s down 0.7% from the previous month (seasonal) and up 18.8% from last year ($240k). That’s up a whopping 29% from the low!!!
It looks like home owners in California are printing money!
As for volume we had 39k sales up from an all time low of 25k in 2007. This was up 15.4% from the previous month and up 15.2% from last year.
Buyers are everywhere.
17.4% where foreclosures compared to 34% last year. Foreclosure volume was cut in half. Short Sales where 26% up from 24.9% last year so roughly equal.
Mortgage payments came in at $1,009. Holy smokes that is living cheap in California. Can you find a rental that cheap? That’s down 64.4% from the 2006 peak. So instead of spending $3K on a mortgage we are now paying $1K. That is a huge improvement in affordability.
And then this bomb shell:
“cash and non-owner-occupied buying remains at a high”
But no stats given. So we’ve got a flood from cash buyers from who knows where.
Amazing - a 29% return on your money since the lower. Foreclosures cut in half. Mortgage payments now one third of their cost at the peak. Volume up 15%. Cash buyers running around like chickens with their heads cut off.
Isn’t California amazing!
Thank you uncle Ben!
I just went back to yesterday’s threads and gave your Sweden-related posts more than the cursory glance it received yesterday.
Thank you, Area. Very illuminative stuff. There might be some answers for us there.
Interesting how Chile only very rarely gets a public nod by our elected officials. I wonder why.
Perhaps state officials from places such as North Dakota or Tennessee will set up a state model resembling Santiago’s.
BTW:
I know North Dakota has a State Bank. A few other states do as well, and a number are examining the idea.
What protections does a State Bank have against/from federal seizure or interference? Any?
That’s interesting. Why?
Because sales cratered in CA YoY, MoM and QoQ.
http://www.zillow.com/local-info/CA-home-value/r_9/#metric=mt%3D24%26dt%3D1%26tp%3D5%26rt%3D14%26r%3D9%252C394806%252C395057%252C395025%26el%3D0
Oh and price? Prices reversed last month and are now headed down.
DO NOT buy housing right now.
How about selling? Should I? I know I want to even though my lying realtor tenant pays the rent every month. If last month was the height of the dead cat bounce sounds like a plan. How to know for sure; your assurance is only based on your opinion? Rental Watch, has the market topped?
I believe wholeheatedly since I want the principal I paid for my house back in 2009 I better sell soon…
“I believe wholeheatedly since I want the principal I paid for my house back in 2009 I better sell soon…”
You’re catching on.
“It’s as if the US economy is a speeding train heading towards a ravine at 200 mph, and the conductors are arguing about whether they should slow down to 150 or 175.”
“Bottom line– the Fiscal Cliff doesn’t matter. The US passed the point of no return a long time ago.”
(Oh dear, somebody give me free birth control a Twinkie and a bailout for my underfunded pension before it’s too late.)
Submitted by Simon Black
In his farewell address to Congress yesterday, Ron Paul blasted the dangers of what he called ‘Economic Ignorance’:
“Economic ignorance is commonplace. . . Believers in military Keynesianism and domestic Keynesianism continue to desperately promote their failed policies, as the economy languishes in a deep slumber.”
He’s dead right. Around the world, economic ignorance abounds. And perhaps nowhere is this more obvious today than in the senseless prattling over the US ‘Fiscal Cliff’.
Here’s the deal: You may remember the Debt Ceiling debacle of 2011. At the time, the US government was about to breach its debt ceiling, and there was an embarrassing standoff between Congress and President Obama.
As part of their eventual compromise, the debt ceiling increased by $400 billion in August 2011… then again by another $500 billion five weeks later… and finally by another $1.2 TRILLION twenty weeks after that.
In return, President Obama signed into law the Budget Control Act of 2011. The law stipulates that, unless another compromise is reached, a series of tax increases and budget cuts will automatically take place on January 1, 2013, including the expiration of the Bush tax cuts and the temporary 2% payroll tax holiday, plus new taxes related to Obamacare.
They call this the ‘Fiscal Cliff’ because everyone is terrified that all the budget cuts and new taxes will bring the US economy to its knees once again.
I’ve spent days analyzing the bill… and frankly, it’s a joke. You can read the 200+ pages yourself if you like, but here are the important points–
As we’ve discussed before, US government spending falls into three categories.
1.Discretionary spending is what we normally think of as ‘government.’ It funds everything from the military to Homeland Security to the national parks.
2.Mandatory spending covers all the major entitlement programs like Social Security and Medicare.
3.Then there’s interest on the debt, which is so large they had to make it a special category.
The latter two categories are spent automatically, just like your mortgage payment that gets sucked out of the bank account before you have a chance to spend it. The only thing Congress has a say over is Discretionary Spending. Hence the name.
But here’s the problem– the US fiscal situation is so untenable that the government fails to collect enough tax revenue to cover mandatory spending and debt interest. In Fiscal Year 2011, for example, the US government spent $176 billion MORE on debt interest and mandatory spending than they generated in tax revenue.
In Fiscal Year 2012, which just ended 6 weeks ago, that shortfall increased to $251 billion. This means that they could cut the ENTIRE discretionary budget and still be in the hole by $251 billion.
This is why the Fiscal Cliff is irrelevant. The automatic cuts that are going to take place don’t even begin to address the actual problem; they’re cutting $110 billion from the discretionary budget… yet only $16.9 billion from the mandatory budget.
Given that the entire problem is with mandatory spending, slashing the discretionary budget is pointless. It’s as if the US economy is a speeding train heading towards a ravine at 200 mph, and the conductors are arguing about whether they should slow down to 150 or 175.
Oh, and there’s just one more problem.
The government thinks that they will collect a few hundred billion dollars more in tax revenue when all of these new taxes kick in. Again, wishful thinking.
In the six+ decades since the end of World War II, tax rates in the US have been all over the board. Yet during this time, the US government has only managed to collect roughly 17.7% of GDP in tax revenue.
Conclusion? Increasing taxes won’t increase their total tax revenue. Politicians have tried this for decades. It doesn’t work. The only way to increase tax revenue is for the economy to grow… and higher tax rates do not pave this path to prosperity.
Ron Paul was spot on. Economic ignorance abounds. And all the Talking Heads in the mainstream media blathering away about the Fiscal Cliff are only reinforcing his premise.
Bottom line– the Fiscal Cliff doesn’t matter. The US passed the point of no return a long time ago.
http://www.zerohedge.com/news/2012-11-15/guess-what-they-are-not-cutting-fiscal-cliff - 119k
“(Oh dear, somebody give me free birth control a Twinkie and a bailout for my underfunded pension before it’s too late.)”
Good luck with that plan, unless there happens to be an unannounced bailout in the works for the Twinkie makers.
Hostess Brands closing for good
By Chris Isidore and James O’Toole @CNNMoney November 16, 2012: 6:15 PM ET
NEW YORK (CNNMoney) — Hostess Brands — the maker of such iconic baked goods as Twinkies, Drake’s Devil Dogs and Wonder Bread — announced Friday that it is asking a federal bankruptcy court for permission to close its operations, blaming a strike by bakers protesting a new contract imposed on them.
…
Beware of collectively driving your employment bargain too hard…
Hostess to Liquidate, Lay Off 18,500 After Crushing Union Fight
By Matt Egan
Published November 16, 2012
FOXBusiness
…
Pension plans work great when the employees are young, not so well when they are old.
When employees are young the pension can be funded with promises, when employees are old real money needs to somehow get involved.
A money-generating asset - young workers - during one era become a money-draining liability - old workers - in a later era.
A fully funded pension in an expanding economy, plus a high return on the float means never having to say you are sorry.
“Pension plans work great when the employees are young,…”
This is the employer’s end of the deferred compensation agreement…
“…not so well when they are old.”
…and this is the employee’s end of it.
So correct me if Im wrong, but, illegal immigrants are good for central banks because by working for less they give value to the freshly printed money which would otherwise cause inflation?
I may have it wrong but there is some relationship between the two right?
Excellent.
No, you are not wrong.
“A fully funded pension in an expanding economy, plus a high return on the float means never having to say you are sorry.”
Actually, a fully funded pension in any economy makes you a target for a hostile takeover.
“Actually, a fully funded pension in any economy makes you a target for a hostile takeover.”
Isn’t that why the poison pill was invented?
illegal immigrants are good for central banks
illegal immigrants (invaders), cost more than they are worth. they are bad for everyone.
legal immigrants that work (for any wage), are good for everyone including the banks and our currency.
look on ebay and see what boxes of twinkies are bringing.
Seriously, why can’t people just post the info instead of taunting the board? How long does it take to type “30 cakes for $310.” ??
Even quicker if you cut and paste:
“3 boxes of Hostess Twinkies. 30 cakes total. PLUS FREE SHIPPING!!! NEXT DAY!
Item condition:New
Ended: Nov 17, 2012 07:54:01 PST
Winning bid:US $310.00
[ 41 bids ]
Item location:Panama City, Florida, United States”
—————-
I don’t get the hysteria. Are the Hostess recipes considered assets with value, to where they can be sold? If Twinkies are that popular, Little Debbie can buy the recipe and make their own Twinkies.
Even the name Twinkie has value, so the name won’t even change.
“Even the name Twinkie has value, so the name won’t even change.”
Embrace less ambiguity; a twinkie is the guy on the bottom.
Suggesting an ontological argument. Which came first, the nomenclature or the re-purposed dessert snack?
Which came first, the twinkie or the ding dong?
Hah! Nice.
twinkie is an insult Asians use against other Asians (yellow on the outside, white on the inside)
Or an apple….red on the outside white on the inside for American Indians
“twinkie is an insult Asians use against other Asians (yellow on the outside, white on the inside)”
Reminds me of Baldwin . . . that the white man’s ego is like Wonder Bread, nothing wholesome, just puffed up emptiness.
I read that the new contract would have lowered wages to $12/hr. Somehow, I suspect that Hostess would have folded even if pay dropped to minimum wage with no benefits.
The process of making junk food is highly automated, I doubt that there was more than a penny or two of manufacturing labor in a package of Twinkies. There was probably more spent on delivery (ever notice these days how the delivery guys from the bread companies stock the shelves in the stores?)
Also, some of the workers, those who have some skills, say truck drivers and mechanics, would probably have walked out had the contract passed, and given the wages Hostess Management would have whined that “there’s no one to hire”.
What am I getting at? That the Hostess Company was probably so mismanaged that there was no saving it.
The current rumor is that a Mexican baking firm (Grupo Bimbo … I know,what a name!) will probably buy out Hostesses assets and Twinkies will once again be available. AFAIK, Bimbo’s US operations are unionized and include brands such as: Arnold, Boboli, Brownberry, Entenmann’s, Freihofer’s, Stroehmann, and Thomas’
IIRC, the teamsters union( I am assuming the drivers) gave into the companies demands, the bakers did not.
At least it wasn’t Gropo Bimbo.
“Good luck with that plan, unless there happens to be an unannounced bailout in the works for the Twinkie makers.”
I saw the CBS news anchor lady laughing about that this morning as she chuckled through the part about it “not being funny” how 18,000 people were going to lose their jobs.
——————————————————————
Hostess Brands closing, 18,500 workers will lose their jobs
Posted: Nov 16, 2012 3:36 PM by CNN
Hostess Brands is cutting more than 18,000 jobs as it closes its doors for good. Those workers may find it tough to find new work.
All Hostess Brands employees will lose their jobs in the coming weeks, some sooner than others, the company announced Friday. The layoffs span nationwide, and represent a deep cut in mid-wage jobs that often came with benefits. The company had operated 33 bakeries, 565 distribution centers and 570 outlet stores across the country.
Many production workers earned up to $20 an hour, plus had access to medical benefits, according to Michael O’Brien, a former Hostess employee who had worked at the company for 45 years, in various sales functions, before he was offered a buyout last year.
“People inside the plants really made a good living,” O’Brien said. “I feel sorry for them.”
The company has struggled to keep up with competition and keep peace with its union workers. A recent bakers strike was the final nail in the coffin, the company said.
http://www.ktvq.com/news/hostess-brands-closing-18-500-workers-will-lose-their-jobs/ - -
Hostess Brands is cutting more than 18,000 jobs as it closes its doors for good. Those workers may find it tough to find new work.
If Grupo Bimbo does end up buying Hostess’s assets in liquidation (including the bakeries), I suspect that a lot of those people will get their jobs back. From what I’ve read, Grupo Bimbo (a Mexican firm) has had its eye on Hostess for years, knowing that this day would eventually arrive.
Is it good for the managers or sales people? You know the ones over 50 and making over 100k?
By the way, this group of people are the ones that will suffer the most since 90% of these managers/ sales executives do not have unique skills. I wonder how many managers, executives and VPs are there in the 18000?
With sales of 2.5 billion it works out to slightly more than 135k sales per worker (18,500 workers). I don’t know if this is right, but I assume that this company does not have any facilities overseas - an all American company, if you will.
Other than gross mismanagement what else could have contributed to this failure? Me thinks two things: 1) hiring of top executives (with grossly inflated salaries) disproportionate to the actual sales volume and 2) Mismanaging the outlet stores (what is the function of this? and did they need 570 of them?) and distribution centers.
Obviously the more workers they hired the more inefficient they became. This goes back to competent hiring mangers.
Moral:
“Hostess” is for the little people. Elitists believe such things beneath them, hence the laughter.
The anchor clearly needs to spend a few months in Staten Island tearing out molded floor boards with a crowbar.
I Wonder…..maybe the company is worth more dead then alive. maybe it has some very prime properties and the employees will make out just fine pension wise, and other companies will buy them and hire a lot back.
maybe the company is worth more dead then alive.
That’s generally what BK means: more liabilities than assets. With a negative net-worth, the BK gets rid of the excess liabilties, liquidates and divides up the assets, and increases the net-worth to zero.
“…maybe the company is worth more dead then alive.”
Yo dj, didn’t your mother explain that if you’re comparing something use than?
He writes in ebonics.
Mandatory spending = seniors = the Tea Party. They want MORE, not less. And cuts in their taxes.
I see this said frequently.
Where’d you get this idea? Did Suzanne research it after she lost her credibility in real estate?
And how many seniors consider themselves Tea Party?
The question is, How many progressives consider themselves TeaParty?
The TeaParty began as a spontaneous coalition of disparate ideologies in protest to the announced 2008 bailouts. (Recall, “Fifty percent of my constituents say ‘no’ and fifty percent say ‘Hell no!’”?)
For several weeks before the KochBros hijacked the movement for their own ends, progressives rallied with libertarians and disaffected conservatives to audit the Fed, require a public discussion and vote on the matter, and put a stop to what was widely perceived as criminal crony capitalism. The schism began when Ohio Republican Party operative, Joe Wertzehbacher, in a staged confrontation, challenged then-candidate Barack Obama over his proposed tax policy.
The aims of OWS and the TP’s were closely aligned until “divide and conquer” again saved the plutocrat$ from what promised to be an unstoppable intrusion into their corporate finaglings.
The irony here is that said plutocrats’ SooperPacs (a stealth wealth tax if ever there was one) created a buttload of jobs and probably even propped up a few pension funds. The Mittster alone was said to have paid an extra $20M in 501c(4) tax this year, and who knows how much Kochs have thus contributed to the national weal? Better yet, foreign interests like Shelly Adelson got socked for upwards of nine figures.
So, despite our best efforts, everybody gets it in the end….
Excellent, ahansen.
The Tea Party and OWS both had plenty to contribute, had it been “allowed”. Yeah, the fracas would have been loud and long, but potentially worth it.
Don’t agree with your one-sided political take on it, however; the scenario became equally bad for OWS when the leftist political hacks turned OWS into a 1%er versus everyone else class warfare argument.
In any event, darn shame all the way ’round.
Would have loved to see OWS go after Wall Street, with the Tea Party simultaneously going after Washington, D.C.
Well, it can be argued that they did, and that along with the coverage by the media their combined efforts helped redefine the public perception of each.
Change isn’t always obvious as it’s happening, but accountability is indeed returning to our public institutions.
Two recent examples:
-BP got hit with $17-21B+ fines for their mess in the Gulf
-Neither voter fraud on the left, nor election fraud on the right were significant factors in the outcome of the last election.
Please.
Greenspan was quoted as saying something to the affect that the recession caused by the fiscal cliff is a small price to pay to reduce the deficit. This according to Bloomberg. Greenspan works and Pimco and I know the Pimco team is guestimating it will cause about a 4 - 5% drop in GDP.
I say bring it on! I could use a vacation. This recession has cooled things down enough - I’m working too hard.
Strawberry Daiquiri anyone?
Good article moral hazard, sure wish we could’ve had the MSM talking about this during the election. But then, that would’ve made Obama look bad.
Let’s see if Obama is willing to cut back on any of the spending . The word “compromise” is liberal speak for “the Republicans caving to the Dem’s demands.” I’ll bet the spending cuts never happen.
The Twinksters union apparently did not make the appropriate protection payments to the political machine.
If there are any tax increases, or any cuts in spending, the Grow Or Die thing will be in our face.
“The Twinksters union”
LMAO
I think the head of the Twinksters union disappeared about the same time Jimmy Hoffa did. Rumor has it he ended up in a batch of Sno Balls.
Hostess Sno Balls are (or were, of whom I am not quite sure) a favorite at any time of the year! They are chocolate creme filled cakes covered in marshmallow and then covered in coconut flakes.
Don’t forget about the fruit pies.
“The Twinksters union apparently did not make the appropriate protection payments to the political machine.”
Navigate: POLITICOUnion: ‘Bain-style’ killing of TwinkieUnion: ‘Bain-style’ killing of Twinkie
By KEVIN CIRILLI | 11/16/12 1:18 PM EST Updated: 11/16/12 5:29 PM EST
The Bain attack is back.
This time it’s being used against Hostess Brands, the Twinkies and Wonder Bread maker that announced Friday it was closing. AFL-CIO President Richard Trumka drew the comparison in a public statement Friday.
“What’s happening with Hostess Brands is a microcosm of what’s wrong with America, as Bain-style Wall Street vultures make themselves rich by making America poor,” Trumka said in a public statement. “Crony capitalism and consistently poor management drove Hostess into the ground, but its workers are paying the price.”
Trumka’s comparing Hostess to Bain comes after an election in which former GOP presidential nominee Mitt Romney was criticized for co-founding Bain Capital.
The union leader took the workers’ the side, saying Hostess’ leaders and policies were “wrecking America.”
(Also on POLITICO: Petition wants Obama to save Twinkies)
“These workers, who consistently make great products Americans love and have offered multiple concessions, want their company to succeed,” Trumka said in the statement. “They have bravely taken a stand against the corporate race-to-the-bottom. And now they and their communities are suffering the tragedy of a needless layoff. This is wrong. It has to stop. It’s wrecking America.”
Read more: http://www.politico.com/news/stories/1112/83979.html#ixzz2CV2L7tli
Didn`t Pat Benatar do a song about Richard Trumka? I thik she did.
You’re a thumb breaker
Dues taker, bribe maker
Don’t you mess around with me
You’re a thumb breaker
Dues taker, bribe maker
Don’t you mess around
No, no, no
I’ll bet the spending cuts never happen ??
And you would be on the wrong side of a bet yet again…
Touche’
scdave, we shall see, we shall see. I have total faith in the Republicans to roll over on this one.
Republicans to roll over on this one ??
Oh, they will roll over alright but not for the reasons you think…Their cherished military program is in the crosshairs with the fiscal cliff cuts…They would pimp their mother rather than have those military cuts…They will go for tax increases as long as the military is basically spared the cleaver…
“It’s as if the US economy is a speeding train heading towards a ravine at 200 mph, and the conductors are arguing about whether they should slow down to 150 or 175 ??
LOL….That about sums it up now doesn’t it…
. Believers in military Keynesianism and domestic Keynesianism continue to desperately promote their failed policies, as the economy languishes in a deep slumber.”
He’s dead right. Around the world, economic ignorance abounds
If Ron Paul thinks we’re following Keynes right now, then he has more than his fair share of economic ignorance.
The prefix “neo” should be used. It turns everything inside out.
Fed Focus
Bernanke: Minority homebuyers face discrimination
By Annalyn Kurtz
@CNNMoney November 15, 2012: 1:33 PM ET
NEW YORK (CNNMoney) — The housing crisis hurt low-income communities and minorities more severely than other groups, Federal Reserve Chairman Ben Bernanke said Thursday.
“Lower-income and minority communities are often disproportionately affected by problems in the national economy, and the effects of the housing bust have followed that unfortunate pattern,” Bernanke said in prepared remarks presented at the Operation HOPE Global Financial Dignity Summit in Atlanta.
Bernanke pointed to homeownership rates for African Americans, which fell 5 percentage points over the last eight years, compared to a 2 percentage-point drop for other groups.
While there has always been a gap in homeownership rates between white and black households, that gap has recently grown wider. The homeownership rate was 44% for blacks and 74% for whites as of September, according to the Census Bureau.
Meanwhile, in the aftermath of the housing crash, mortgage lending has tightened more dramatically for blacks and Hispanics than it has for whites.
Bernanke also pointed to two types of discrimination that are hurting minority homeowners.
“One is redlining, in which mortgage lenders discriminate against minority neighborhoods, and the other is pricing discrimination, in which lenders charge minorities higher loan prices than they would to comparable nonminority borrowers,” Bernanke said.
“We remain committed to vigorous enforcement of the nation’s fair lending laws,” he added.
The American Civil Liberties Union sued Morgan Stanley last month for predatory lending practices that targeted minorities. It marks the first lending discrimination case to go after investment banks that funded subprime mortgages.
…
didnt they try giving them a loan once? How did that work out?
It’s not favor to shackle people with debt they can’t repay, then repossess their house.
If they want to do favors to minorities, look into why their economic circumstances make owning real estate less common for them.
The answer is not to to simply shackle them to houses and debt they can’t hope to repay.
It’s clear the Bernank has decided to try and fully reflate the housing bubble. The only way left was to debauch lending again, and he’s clearly signaling that’s what he wants to do.
Is he bluffing? Does he really want to encourage and build on that malinvestment again? Or can he really not see beyond the short term? The banks made out like bandits.
Or is he really that solely focused on the banks, and to hell with the country?
“Or is he really that solely focused on the banks, and to hell with the country?”
My impression is that he implements policies that mainly help banks, while pretending the policies help all Americans.
America’s Debt Challenge
Greenspan: Recession ’small price to pay’ to fix debt
By Ben Rooney @CNNMoneyInvest November 16, 2012: 2:36 PM ET
NEW YORK (CNNMoney) — Former U.S. Federal Reserve chairman Alan Greenspan said Friday that a mild recession would be a “small price to pay” for getting the nation’s debt problems under control.
In an interview with CNN’s Ali Velshi, Greenspan said cutting spending on “so-called social benefits” would hurt the economy, but argued that it would cause less damage than raising taxes.
“I think if we have to have a moderate recession to solve this huge fiscal problem that’s in front of us — I think that’s a very small price to pay,” he said. “We’re not going to get out of this thing without pain.”
…
Hey Greenspan, you recommended raising payroll taxes on middle-class and poorer workers in 1983. Where did all THAT money go?
Why has never been grilled about that?
“We’re not going to get out of this thing without pain.”
How did we get into this thing? And who got what share of the benefits? Isn’t that relevant to how we get out of this thing, Maestro?
Um… actually WT if you look at the studies on this before the payroll hikes in the 1980’s the SS/medicare system was out of actuarial compliance and after the tax hikes they were actuarially sound. Not taking into consideration the unlocked trust fund that was raided (a big thing to not consider) the reason it became underfunded was because the actuarially realities changed. U.S. health improved dramatically in the 80 and 90’s with the health kick and a better standard of living and people lived longer. In fact too long. The actuarials of the day were not trying to cheat. They really could not have foreseen that dramatic of a change in such a short period of time. Using the best methods available - the system was fully funded.
But that again does not take into account that the trust fund was raided.
It was all the non smoking ads and added taxes….nobody will acknowledge this
U.S. health improved dramatically in the 80 and 90’s with the health kick and a better standard of living and people lived longer. In fact too long.
Bring it on!
By definition when you use Keynesian policies to prop up the economy with debt you are making a deal to decrease future growth when the debt comes due. This is econ 101. We brought demand forward and borrowed from out future prosperity. The bill is now due. Time to pay. It can’t be more clear than that.
Who gets to decide when the bill is due?
HaHaHa - good point. Greenspan - when he was the big bad voodoo daddy use to say that the bond market would decide. The market would finally vote now and raise interest rates on U.S. debt and that would force congress to bring spending under control automatically. It was a perfect market driven system of self regulation he argued. When the time came and the market spoke the Fed would sit back and let congress feel the pain!
So what happened when that day came? The Fed panicked like a little school girl and bought up all the U.S. debt just as China was bailing and interest rates were going to spike. So congress responding to ZIRP cranked up the spending.
Sweet deal!
“The Fed panicked like a little school girl and bought up all the U.S. debt just as China was bailing and interest rates were going to spike. So congress responding to ZIRP cranked up the spending.”
Moral hazard at its worst.
congress responding to ZIRP cranked up the spending.
What did they crank up the spending on?
Why? Because they could. ZIRP means free money. Interest rates are the feedback mechanism. Had interest rates gone to 15% like 1982 they would have been frozen in their tracks.
Not why. What? What did they crank up the spending on?
“panicked like a little school girl “
Do little school boys never panic?
“Do little school boys never panic?”
Nobody suggested this, and if you think otherwise, you are being as illogical as a little school girl.
“Nobody suggested this, and if you think otherwise, you are being as illogical as a little school girl.”
Why pick on little school girls?
I’m thinking that those who are authorizing the spending are hoping they’ll be taking a dirt nap when the piper has to be paid.
“dirt nap”
I’m going to borrow that.
Yeah - we had one of those in congress that we voted out this year - 82 years old, in office for 37 years. Funny when the guy before him in office for 12 years he bitched and moaned in public at his town meetings on video that he had been in office too long and it was time for him to move over. Then this year, 37 years later, a younger opponent stood up at his town all and recounted the story again on video and asked when he planned to retire after 37 years. His answer - “I have no plans to retire.” The guy had become totally useless. He would spend the entire town hall meeting mocking every person in the audience that had a question or a complaint. Well anyway - he’ll be gone next year - he never saw it coming - it was a complete shock to him. Bye Bye!
We brought demand forward and borrowed from out future prosperity ??
Yep….Cash-for-Clunkers, $7k tax credit and on & on…
It’s so hard to believe that Greenspan still has the gall to open his yap…..yeah, even tho it’s THAT guy.
Greenspan said cutting spending on “so-called social benefits” would hurt the economy, but argued that it would cause less damage than raising taxes.
What a tool. Greenspan said Clinton’s surpluses were “bad” and we should lower taxes on the rich which is a major reason we are facing the fiscal cliff. Lowering taxes on the rich HAS caused serious economic damage. We are facing it now.
I think Greenspan’s statement was part of two-pronged effort. There were people like Rush Limbaugh criticzing the surplus. “You know what a surplus is?,” they asked. “A surplus meana that the government is collecting more in taxes than it needs to pay its bills. The government is taking more money out of your paycheck than necessary! Taxes should be cut immediately!”
Then Greenspan chimed in to let us know that a lot what the Federal Reserve does to run monetary policy involves the buying of selling of federal debt. He warned that the suprluses would eventually the federal debt, making it more difficult for the Fed to do its job.
At the time I was amazed by this. How could this guy be so ignorant of both economics and politics to think that surpluses would last long enought to completely pay off the debt?
The other interesting thing is that this happened a mere 12 years ago and has been largely forgotten by the American people. It makes you wonder why we as a people have such short memories. Maybe it’s the HFCS.
“How could this guy be so ignorant of both economics and politics”
Greenspan is not ignorant. I think a better word might be cunning.
He knew very well what he was doing and saying and he had an end in mind. Only he figured he’d be long gone by the time the SHTF.
Forget real estate, gold, and the stock market—anybody invest in Twinkies this week? Up to $100/box on Ebay right now.
Interesting how an “inventory shortage” can drive up not only the price of housing, but even that of Twinkies merch.
On a related topic: I’m sure some of the more Scroogelike posters here will take great pleasure in reading about how a failed union negotiation led to 18,500 people losing their jobs.
I did.
It’s not like they didn’t have a choice. Now they can negotiate away with their future employer assuming they have on.
There was a lot of incentives for all parties to drive this one into the ditch. And they did.
There also may be a silver lining, if eliminating Twinkies from the American diet leads to less heart disease and obesity.
if eliminating Twinkies from the American diet leads to less heart disease and obesity ??
Is there anything that they make that is even remotely healthy ?
Once upon a time when my father was in diapers they made something resembling food.
Now, who cares?
It’s not even food-lite, it’s food-piffle. No, make that piffle-light. It makes McD’s look like a three-star Michelin restaurant.
I’m almost shocked they survived this long. Never estimate nostalgia and the entirely garbage tastes of the average public.
Ho-Ho-Ho!
“There also may be a silver lining, if eliminating Twinkies from the American diet leads to less heart disease and obesity.”
Mr. Potato head…your opinion of food should have absolutely no bearing on what other people chose to eat in a free country.
I will bet you that I could survive on a hot dog and twinkie diet with my exercise regimen. A sedentary lifestyle is the real killer.
Leave people alone, life is short enough without the effing food, drink and smoke police.
Who are the bag holders here? I mean in a bankruptcy forced restructuring there are investments firms. Who owns what and who loses what?
Scroogelike - you talking about me?
Is it true that twinkies don’t expire for 200 years? Seems like the perfect bunker food.
I think they have the same half life as plutonium.
“Scroogelike - you talking about me?”
I wasn’t thinking of anyone in particular, though I do find it most interesting that you responded first.
Most blowhards do.
GrizzlyBear the personal attacks don’t fly.
If you’ve got something to offer, offer it.
If you’ve got something funny to say - chime in.
If you have an argument to make - make it.
But don’t blow off your frustrations by demeaning other people for no other reason that to make yourself feel superior.
Your post above adds nothing.
“Is it true that twinkies don’t expire for 200 years?”
How long is the shelf life of a Twinkie?
Take Two | November 16th, 2012, 9:05am
If the urban legend that Twinkies have an indefinite shelf life is to be believed, anyone worried about losing their Twinkie fix could just buy a box or two now and save them for the future. But do they really last forever?
I think we’ve all heard the rumor that a Twinkie will last longer than the plastic it’s packaged in, or that the Hostess over-produced the little cakes in the ’80s and have been selling that original batch in new packaging ever since.
That’s all fluff, but Twinkies do have an sell-by window, and it’s only about 25 days. After about a month Twinkies start to get hard and brittle.
Steve Ettlinger, author of the book “Twinkie, Deconstructed,” says Twinkies get hard, but that doesn’t mean you can’t eat them.
“I’ve got some that are 8 years old. They are hard but they are not spoiled,” he said.
So Twinkies could last 30 years, but they just might not be that fun to eat. And one thing different about Twinkies is they don’t rot.
So if you want to stock up now go ahead, but just make sure you’ve got a strong jaw.
http://www.scpr.org/programs/take-two/2012/11/16/29310/how-long-is-the-shelf-life-of-a-twinkie/ -
What sort or freaking chemicals do they use in them? Natural food rots if left in the open for a few days. It is like that burger experiments where the thing did not rot for over 3 weeks… wasn’t enough meat.
What sort or freaking chemicals do they use in them ??
Formaldehyde ??
http://mobile.aht.seriouseats.com/archives/2010/11/the-burger-lab-revisiting-the-myth-of-the-12-year-old-burger-testing-results.html
Put them in the freezer. Twinkies are best eaten when they are frozen, anyway.
“Put them in the freezer. Twinkies are best eaten when they are frozen, anyway.”
It’s common knowledge that Twinkies won’t freeze.
Sounds like there may be plenty more Fed-funded housing stimulus in the works. Better buy an investment home or maybe even ten of them to capture your fair share of the helicopter drops…
Bernanke: Housing Market Still Has a Long Way to Go
Published November 15, 2012
Reuters
The improving U.S. housing market is “far from being out of the woods,” Federal Reserve Chairman Ben Bernanke said on Thursday, arguing that part of the problem are lending standards that are overly tight.
The Fed, which has focused on mortgage bonds in its latest round of asset purchases, will continue to do what it can to support the housing market, Bernanke said in prepared remarks.
A bubble in the housing market was at the core of the 2007-2009 financial crisis and the housing market continues to hamper the world economy. Data in recent months, however, show the sector is on the mend.
“Although there are good reasons to be encouraged by the recent direction of the housing market, we should not be satisfied with the progress we have seen so far,” Bernanke told the Operation HOPE Global Financial Dignity Summit.
The Fed chairman noted that tighter credit standards were an appropriate response to the peak in house prices and the crisis the followed.
“However, it seems likely at this point that the pendulum has swung too far the other way, and that overly tight lending standards may now be preventing creditworthy borrowers from buying homes, thereby slowing the revival in housing and impeding the economic recovery,” Bernanke said. (Reporting by Karen Jacobs; Writing by Jonathan Spicer; Editing by Neil Stempleman)
…
Don’t fight the fed.
Don’t fight reality.
LOL
LOL
Attacking the mess calls for an understanding of what “Mandatory Spending” is and what it is not.
If one is an adherent of Big Government, most things are “mandatory”. Provision of food, shelter, clothing is all mandatory. Healthcare is mandatory. Providing solutions for your neighbor’s sexual and drug misadventures is mandatory.
If one is an adherent of Limited Government, most things are not “mandatory”. You provide for one’s self and family.
The first view causes economic distresss/collapse on a grand scale.
The second view causes economic distress/collapse on a localized scale.
Take your pick.
“Take your pick.”
Didn’t American voters already do so on November 6? What am I missing here?
No, it didn’t.
“The pick” doesn’t start at the government level. It starts at the individual level.
I would wager that several millions of Americans who voted for Obama are not comfortable with (and for smaller numbers of millions) nor need “mandatory spending”.
I don’t see liberals here jumping for joy over massive entitlement deficits, military deficits, etc.
No one here should lose sight of the fact that those “of the loyal opposition” don’t like it either. It’s everyone’s problem now.
Would you say that about yourself, Prof, that for YOU, for your own personal welfare, that mandatory spending by others is a necessity? If not, is it desireable? Do you want others to have to spend their money in order to support YOU personally? Is that really what you want?
I suspect the answer is no.
The same would be true of those who voted for Romney. Most conservatives who voyted for Romney would immediately answer “no” to the question. The problem is that they ran a candidate who doesn’t share their view.
Romney was an improvement over either Bush and McCain in this regard (i.e. let the housing market bottom out with minimal government inference, prevent China from continuing its currency shenanigans, etc.) but not a good enough improvement.
Take your power back, Prof. It’s yours already. The government doesn’t grant it. The Constitution does.
McBeth the only solution to this issue that I know of would be a representative voting system (used in some parts of the EU) instead of a winner take all system like we have in the states now. The problem is right now you can pick between only two parties and with each party you get their whole platform even if you don’t like a lot of it. So people tend to pick one issue and pick a party based on that issue. Then they get the rest of the baggage that they didn’t want. Third party candidates are not viable in a winner takes all system because voters vote strategically and realize to vote for a third party is throwing their vote away or worse possibly hurting their second choice candidate. If you move to a representational system then parties get sent to congress in direct proportion to the total votes they get. So if you get 40% Repub and 40% Dem and 20% party X in votes then those are the ratios you end up with in the house and senate. So even a small party with 20% of the vote will get seats. This means you could for example end up with a party that is socially liberal and fiscally conservative. I know that would be very popular in the Western States. But you also have to set a lower bound - say 5%. If a party can’t muster say 5% as a cut-off they don’t get seats. Otherwise you end up with fractious little wing-nut 1% parties with seats and they fight all day - see Italy. Some EU countries set a lower bound in the 5 - 10% range and the system works quite well in terms of representation matching voters’ interest.
“McBeth the only solution to this issue that I know of would be a representative voting system (used in some parts of the EU) instead of a winner take all system like we have in the states now.”
Why not? It would actually be great for Republicans in places like California, New York, etc which chronically vote Democrat.
Yes to that, Area!
What appears on the ballot seems to be at least one somewhat viable method of attack.
We know that a winner take-all scenario isn’t as effective as it should be; it enables the victor to avoid public demand and accountability on issues.
We also know that true “democracy” can lead to what you referred to as international socialism (communism) and domestic socialism (fascism). To prevent either, we need to keep the Electoral College intact - and re-secure the notion of checks and balances that some elected officials desperately want to erase.
What you suggest is a possibility.
What I’ve long thought, admittedly not deeply, is for the citizenry be able to vote on the issues and not the candidates, per se. While potentially dangerous, it’d certainly force citizenry to take and accept responsibility for the outcome.
The division in our country really is about how to best address the issues and tasks at hand, not the battery of schmucks Republicans and Democrats have foisted upon us in recent decades.
Take your power back, Prof. It’s yours already. The government doesn’t grant it.
Just watch out for drones, especially if you’re outside the US.
The Constitution does.
And who enforces it? Superman? Captain Marvel?
The constitution is but a piece of paper. And what it means is decided by the Supreme Court.
Good questions.
What do you think some of the answers are to your own questions?
Is it the idea/premise that is flawed, or is the execution of the idea flawed? Either way, are you sure? What can be done about it?
Time to get busy around here.
Well in one incident, the Supreme Court made a ruling against Andrew Jackson and his response to the ruling was where’s your army and proceed to go against the Court ruling.
In the past few days, someone here posted something referring to the Lutheran Church - and how the church prescribes that donors and donees know each other personally, and be answerable to each other.
I think this is vitally important.
In the U.S., donors and donees (whether will donors or donees alike) are not answerable to each other. Both donor and donee are “prescribed” to pay and receive from largely gormless and unanswerable groups of government workers, very few of whom have anything personally invested in the success of localized arreas.
I think this is wrong.
My thanks to whomever posted the original information. Perhaps some of our answers can be found in such thinking.
That was me talking about the Swedish Lutheran Church which was a state run church and was the original basis for the Swedish Model of providing support only at the local level not the national level. The Swedish people were Lutheran by law and had to attend the church. They also had a very self sufficient ethic. No one wanted to ask for hand outs they the tended to save for rainy day. But if a family failed they community through the Swedish Lutheran Church would step in and take them in. It was always personal - everyone knew each other and saw each other by law each Sunday. That was the basis of the Swedish model.
“It was always personal - everyone knew each other and saw each other by law each Sunday.”
Sounds like small town agrarian America of a hundred-or-so years ago. It would be easy to do then, tough to do today.
Not the same way - certainly not. But the Feds shouldn’t be in the welfare business (per the constitution) so the Department of free stuff could be closed down on a federal level. A percent of tax rates that pay for that free stuff could be reduced permanently on the federal level and a plan to increase the tax rate on a country level could be enacted to take it’s place. So at least the debate on “free stuff” could occur at local country meetings.
“Sounds like small town agrarian America of a hundred-or-so years ago. It would be easy to do then, tough to do today.”
The Mormons have this large scale private welfare system figured out very well. Romney would have done the country a great service by explaining this during the campaign season, instead of getting bogged down in a failed propaganda campaign.
But the Mormons have common ground - they are all Mormons. They have expectations of each other and if these expectations are not met then they can be excluded from this private welfare system.
But not so with a public welfare systems because public welfare systems are backed by law and participants are granted welfare rights that are not granted in private welfare systems.
If the civil war never occured, black people who escaped would have needed to work, save up and purchase the freedom of their relatives. This would have made us much more valuable and responsible to EACH OTHER.
I see the same thing today.
What is the value and responsability of one black person to another black person when “the government” steps in to provide for them and pull their ___ out the fire?
“George Bush doesn’t care about black people”– Kanye West
If black people don’t care about black people, why should anyone else?
Spook what is your solution to this mess?
“They have expectations of each other and if these expectations are not met then they can be excluded from this private welfare system.”
Actually you don’t have to be a Mormon to participate in their welfare system.
“But not so with a public welfare systems because public welfare systems are backed by law and participants are granted welfare rights that are not granted in private welfare systems.”
The Mormon welfare system requires able-bodied participants to work, thereby providing for themselves and for the less fortunate who are unable to work.
Interesting I didn’t know that.
The modern Sweedish system also has a “work for welfare” system in a sense. You get primary and secondary unemployment benefits that reduce in payout over time as you look for work (over 90% of this is private insurance there now). But then after you fall off of the secondary support system over the course of a year plus or so you end up in a guaranteed government job were they make you do silly stuff all day long if they can’t find a job - bend and unbend paperclips. It makes people at least show up for a job but doesn’t do much in terms of productivity. But it does make the unemployment rate look much lower. Without these blackbox jobs unemployment is around ~20% versus ~8.8% reported.
But the Feds shouldn’t be in the welfare business (per the constitution)
Which Constitution are you referring to? Our Constitution has in its mission statement to “Promote the General Welfare”.
It is a purpose of our Government to Promote the General Welfare of the majority of Americans.
The best way to promote general welfare is to have a system where productivity gains are shared more equally than they are now in America. If productivity gains were shared more equally, the general welfare of America would be in better shape - our middle-class would be thriving as it did in the past. Those days are gone.
America chose to devolve into a banana republic, winner-take-all, rich-get-richer crony-capitalistic oligarchy however that does not relieve the government of it’s admitted duty to promote the general welfare. If the government structures an economy to produce no jobs or low paying jobs which only benefit the few, then it is the government’s responsibility (as per the Constitution) to provide to its people some of the things that the lost jobs have cost them.
Example:
If our government structures an economy where jobs can’t feed our people, it is then the responsibility of our government to pass out food stamps. This is a much worse situation than good jobs, but that’s the path we’ve taken due to right-wing, nutjob, failed, trickle-down economic dogma.
Structuring and economy that can’t feed our people and then letting them go hungry would not be “promoting the general welfare”. And if the Constitution did not have in its mission statement to promote the general welfare, what would be the purpose of our Constitution be anyway? To let a few get rich on the backs of the majority?
If the civil war never occured, black people who escaped would have needed to work, save up and purchase the freedom of their relatives.
Do the math on how many slaves vs free blacks there were in 1861 and how much slaves cost. On the basis of your proposal there would still be slavery today.
The Civil War was the best thing that ever happened to Black slaves in America. And they knew it.
“The Mormons have this large scale private welfare system figured out very well. Romney would have done the country a great service by explaining this during the campaign season, instead of getting bogged down in a failed propaganda campaign.”
Cantankerous -
Romney most certainly could have, and didn’t. What does it tell us? That he was wrong? Or that the belief is that Americans as a whole will not abide such thinking?
Where and with whom does the problem reside? How do we minions address it and fix it? How do determine whether a large enough percentage of the citizenry already agrees with it to make going for it worthwhile (and a great many might agree, to our surprise) - and finally, if so, how do we best push our elected to act?
Thanks for throwing this notion out there for discussion. I appreciate it.
Rio:
Please define “welfare” as you know it to be.
Thanks.
“Actually you don’t have to be a Mormon to participate in their welfare system.”
Nevertheless…
“The mormon welfare system requires able-bodied participants to work …”
Which is my point. The Mormons have a say regarding the dispersement of their money, the American taxpayer does not.
And at the other end of the welfare money flow you’ll find the disincentive to work. If you are going to get paid no matter what you do - or don’t do - then what you choose to do - or choose not to do - doesn’t matter all that much.
And if all your buddies are laughing at you because you want to “do the right thing” (i.e. break away from the clutches of The System) then these disincentives are amplified.
“What does it tell us? That he was wrong?”
No.
Rather it tells us that basing a campaign on propaganda and skullduggery may actually be less effective than raising real issues of great importance to all Americans.
define “welfare”
: the state of doing well especially in respect to good fortune, happiness, well-being, or prosperity
a. Health, happiness, and good fortune; well-being.
b. Prosperity.
The concern of the government for the health, peace, morality, and safety of its citizens.
Providing for the welfare of the general public is a basic goal of government. The preamble to the U.S. Constitution cites promotion of the general welfare as a primary reason for the creation of the Constitution. Promotion of the general welfare is also a stated purpose in state constitutions and statutes :legal-dictionary dot thefreedictionary dot com
“And at the other end of the welfare money flow you’ll find the disincentive to work. If you are going to get paid no matter what you do - or don’t do - then what you choose to do - or choose not to do - doesn’t matter all that much.”
I actually worry far more about enterprising welfare recipients who additionally support themselves by running criminal enterprises under the radar screen of the federal tax system.
I’m guessing the number that falls in this category must be large, though I admit to having no data to back up my conjecture.
Rio:
Is that your definition, or one found online or in a dictionary? I wants yours, in your words.
Also, could you define (in your own words) what “promote” means?
Again, thanks.
SPOOK:
You have a wonderfully original, fertile mind. I hope you stay around a while.
Comment by RioAmericanInBrasil
2012-11-17 10:14:02
Do the math on how many slaves vs free blacks there were in 1861 and how much slaves cost. On the basis of your proposal there would still be slavery today.
—————————-
Oh thank you thank you super white man for having so much confidence in your brown brothers. (((shakin my head)))
Comment by SF Bay Area
2012-11-17 09:25:16
Spook what is your solution to this mess?
*sigh*
Theres a part of me that no longer really cares since Mother Nature has a pretty good batting average and its never over till she gets her turn.
Cantankerous:
Really? It tells you THAT? (And are you suggesting that Obama’s campaign was any less propagandic?)
How different our thought processes. What Romney’s lack of push on said subject tells me that politicians underestimate the minions ability to understand and deal.
———————————————————————–
“What does it tell us? That he was wrong?”
No.
Rather it tells us that basing a campaign on propaganda and skullduggery may actually be less effective than raising real issues of great importance to all Americans.
Is that your definition, or one found online or in a dictionary? I wants yours, in your words.
My definitions of “promote”, “general” and “welfare” do not differ from their definitions.
pro·mote: Further the progress of (something, esp. a cause, venture, or aim); support or actively encourage.
gen·er·al: Affecting or concerning all or most people,
Welfare: Health, happiness, and good fortune; well-being. b. Prosperity.
“Promote the General Welfare” : To further the progress of and support the health, happiness, good fortune and prosperity of all or most Americans.
Also - spook -
Will Obama let us purchase our freedom from ObamaCare?
I wonder how many people, if offered, would purchase freedom from ObamaCare - and for how much.
ObamaCare: Your first foray into modern day slavery.
Oh thank you thank you super white man for having so much confidence in your brown brothers. (((shakin my head)))
You can shake your brown head all you want but it won’t change your bad math. There is no way free blacks could have bought the slave’s freedom. “Confidence” has nothing to do with it. It’s called mathematics.
“How different our thought processes. What Romney’s lack of push on said subject tells me that politicians underestimate the minions ability to understand and deal.”
Not so much as you think, as I confess to wondering the same thing: If Romney had so much to offer, why would he resort to dumbing down his message and hiding it behind a smoke screen of propaganda, rather than speaking forthright?
I wonder how many people, if offered, would purchase freedom from ObamaCare - and for how much.
Why wonder? The purchase price is in the law.
ObamaCare: Your first foray into modern day slavery.
That makes no sense, especially in light of personal responsibility.
Is working to pay for your life’s expenses slavery or your responsibility?
Is taking care of your family slavery or your responsibility?
Is paying for your own health-care instead of leaving it to others to foot the bill slavery or your responsibility?
If you leave it to others to pay your hospital bill, then are you not an officer in the free sh!t army you rail against?
And if you leave it to others to foot your bill are the others footing your bill not your slaves?
There’s an old saying MacBeth: Don’t ask the question if you don’t like the answer.
Rio will do the same thing I would: refer to COMMON and long since agreed upon STANDARDS.
That’s is what a dictionary is for as well other scientific, technological and legal references. They exist for a reason. Because in life, you are not allowed to make up crap as you go along or change the rules when things aren’t going your way.
Contrary to popular idiocy, not everything is relative.
“Don’t ask the question if you don’t like the answer.”
Typical Republican — thinks information grows on trees for free…
Rio is correct… you can purchase freedom from Obamacare simply by not buying insurance. The IRS will “fine” you, or in the words of the Chief Justice of the Supreme Court, “tax” you to pay for minimal emergency room care, based on your income. Here are some numbers:
Less than $9,500 income = $0
$9,500 - $37,000 income = $695
$50,000 income = $1,000
$75,000 income = $1,600
$100,000 income = $2,250
$125,000 income = $2,900
$150,000 income = $3,500
$175,000 income = $4,100
$200,000 income = $4,700
Over $200,000 = The cost of a “bronze” health-insurance plan
Read more: http://www.businessinsider.com/how-much-is-the-obamacare-penalty-tax-2012-7#ixzz2CW5a2kmq
Other people are correct in their assessment of you Rio:
Conversing with you is pointless. People ask you the simplest of questions and you cannot answer with anything remotely coherent. PEOPLE IN THIS COUNTRY NOW ARE BEING FORCED TO BUY A PRODUCT THEY DO NOT WANT - AND IF THEY DON’T WANT IT, THEY MUST BUY THEIR WAY OUT OF IT
Any citizen of the U.S. that doesn’t want ObamaCare now have to pay off the Massahs. Get it now?
What’s next - everyone has to buy a gun?! If Washington forces everypone into gun ownership - is that promoting the general welfare also?
Ecofeco: I suggest you take your own advice. I’m not in the least thrown by Rio’s childish interpretations. His responses to all things are rreadily predictable.
Our Founding Fathers did not have in mind forced reallocation of wealth from those who earn it to those who don’t. That’s not “general welfare”.
If it was, they wouldn’t made such a big deal out of concepts such as individual liberty and freedom.
they wouldn’t made such a big deal out of concepts such as individual liberty and freedom.
And promoting the general welfare.
(Rio’s) responses to all things are rreadily predictable.
Yes, you can predict they will be good and will shut-down right-wingnut’s propaganda.
People ask you the simplest of questions and you cannot answer with anything remotely coherent.
I would say dictionary definitions are pretty coherent.
“If it was, they wouldn’t made such a big deal out of concepts such as individual liberty and freedom.”
Let’s not forget the founding fathers at the time were applying individual liberty and freedom to the white man. Kind of left out women and slaves.
“Let’s not forget the founding fathers at the time were applying individual liberty and freedom to the white man. Kind of left out women and slaves.”
What is your point with that statement? Liberty and freedom are bad?
According to wikipedia, welfare in Sweden is provided by the Ministry of Health and Social Affairs. It might have once been run at a local level by the Lutheran Church (which in Europe is called the Evangelical Church) but that ceased to be the case a long time ago. It is now very centralized.
I can see the allure of of having welfare be locally funded. If you live in a prosperous community there won’t be a lot of welfare taxes because there won’t be many recipients.
Yes this is the history of the system. It evolved and became more centralized. Then spun out of control when it was centralized into hyperinflation through the 1980’s and early 1990’s. In 1992 after the country went bust and they decentralized the system back to the separate states. They have a central administration but it’s like we have a department of education but education is funded and run at a local level. It’s not longer the central system they once had.
So what happens if a jurisdiction is overwhelmed by too many recipients? Do the more prosperous jurisdictions chip in? Or are the poor districts told “Sorry Charlie”?
I recently read an article where a town in Sweden had too many unemployed youth. So they are paying the young unemployed youth to move to Norway. They cover their travel costs and the cost to stay in a hostel for six months.
Norway has more money from oil then people. So they have a massive surplus of cash.
So in this case they export them.
I doubt that is the norm though. But sometimes I’m really shocked that people don’t move to where the jobs are.
In Colorado:
True, but could the internet change the equation somehow? Could localized mean something other than nearby geographic location?
BTW, what I really like about all of this “localized welfare” is that both donor and donee know one another personally. That has serious implications, many of which could be quite positive.
In 1992 after (Sweden) went bust
The main reason Sweden “went bust” in 1992 was because of the deregulation of its banking system in the mid 80’s, which led to a huge hike in bad loans leading to a housing/credit bust. (sounds familiar?)
After the banking/financial bust, Sweden took a nationalized pound of flesh out its banking system in exchange for its “bailout”. (Unlike we did in America)
90% Rio do you just have fairy dust that magically spins any story to match your international socialist fairy tail?
Worthless!
According the the Swedish Government itself as published on the Swedish government’s own home page:
http://www.regeringen.se/sb/d/7672/a/99800
The hyperinflation of the 1980’s and early 1990’s was caused by the unsuitability of the “Swedish Model” of welfare spending by the state. It lead to unsustainable budget deficits which lead to too much monetary expansion which lead to a currency collapse and a 500% interest rate. The inflation in housing and crash was a result of papering over the unsustainable monetary expansion by the Swedish state. The Swedish government’s own web site states this in no uncertain terms. They go on to say this is in spite of Sweden having enjoyed a windfall in wealth by supplying goods and services to armies during WW I & WW II and in spite of Sweden having enjoyed a windfall in wealth by supplying goods and services for the reconstruction after WW I & WW II. Despite the fact that Sweden enjoyed the longest stretch without war of any other nation in the world (over 200 years) and had accumulated a huge fortune before their experiment with socialism. They pissed through all that and kept pissing until they couldn’t piss money any more. And in spite of the “Stockholm Solution” they still are having problems. They then go on to outline the dismantling of the “Swedish Model” of welfare spending by the state the the privatization and free market reforms that they engaged in to fix this.
This is all clearly printed on Sweden’s own web site and it is outlined in many federal reserve papers that I have read. It is a classically studied example of a failed experiment in international socialism and how a country can come back from collapse via neoliberalism (i.e. free market reform and privation).
Please see my detailed posts yesterday which go into the history of the economy of Sweden.
It is remarkable to me the lengths you will go to lie about history to make international socialism and national socialism look like something other than the abject failure it has been in all 133 countries in which has been tried.
I just posted a link to the outline of a paper by the Swedish national bank on Sweden’s government web site that shows the collapse was due to the overspending by the welfare state. This is according to the Swedish state. It’ll take a while to post. Several Federal Reserve and Bank of Japan papers come to the identical conclusion. The case is well studied and is yet another example of a failed socialist experiment - just all all 133 of ‘em.
“…overspending by the welfare state. This is according to the Swedish state.”
Is this somewhat akin to how the U.S. government gives away hundreds of thousands of dollars to individual homeowner households each and every year?
This is according to the Swedish state.
THE SWEDISH BANKING CRISIS: ROOTS AND CONSEQUENCES
PETER ENGLUND Stockholm School of Economics
The article analyses the Swedish banking crisis in the early 1990s. Newly deregulated credit markets after 1985 stimulated a competitive process between financial institutions where expansion was given priority. Combined with an expansive macro policy, this contributed to an asset price boom. The subsequent crisis resulted from a highly leveraged private sector being simultaneously hit by three major exogenous events: a shift in monetary policy with an increase in pre-tax interest rates, a tax reform that increased after tax interest rates, and the ERM crisis. Combined with some overinvestment in commercial property, high real interest rates contributed to breaking the boom in real estate prices and triggering a downward price spiral resulting in bankruptcies and massive credit losses. The government rescued the banking system by issuing a general guarantee of bank obligations. The total direct cost to the taxpayer of the salvage has been estimated at around 2 per cent of GDP.
pdf
http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&ved=0CE4QFjAE&url=http%3A%2F%2Fwww.contrahour.com%2Fcontrahour%2Ffiles%2FTheSwedishBankingCrisisRootsandConsequences.pdf&ei=jfGnUPbSMo3S9ASrh4CIBQ&usg=AFQjCNFx6z9hfHDifFbCFdndzRWszFfSfw
You won’t get any argument from me about how wasteful and dangerous the housing bail outs are.
One clear difference is - the world’s reserve currency. We can debauch the monetary system longer than a country like Sweden (which is the size of about half the SF Bay greater metro area). How long that buys us is anyone’s guess. But it may also mean the ultimate blow up with be of a much larger magnitude.
Sweden is just a cautionary tale. We should heed the lesson.
Stopping a Financial Crisis, the Swedish Way
By CARTER DOUGHERTY
Published: September 22, 2008
The Swedish crisis had strikingly similar origins to the American one, and its neighbors, Norway and Finland, were hobbled to the point of needing a government bailout to escape the morass as well.
Financial deregulation in the 1980s fed a frenzy of real estate lending by Sweden’s banks, which did not worry enough about whether the value of their collateral might evaporate in tougher times.
Property prices imploded. The bubble deflated fast in 1991 and 1992. A vain effort to defend Sweden’s currency, the krona, caused overnight interest rates to spike at one point to 500 percent. The Swedish economy contracted for two consecutive years after a long expansion, and unemployment, at 3 percent in 1990, quadrupled in three years.
After a series of bank failures and ad hoc solutions, the moment of truth arrived in September 1992, when the government of Prime Minister Carl Bildt decided it was time to clear the decks.
Standing shoulder-to-shoulder with the opposition center-left, Mr. Bildt’s conservative government announced that the Swedish state would guarantee all bank deposits and creditors of the nation’s 114 banks. Sweden formed a new agency to supervise institutions that needed recapitalization, and another that sold off the assets, mainly real estate, that the banks held as collateral.
Sweden told its banks to write down their losses promptly before coming to the state for recapitalization. Facing its own problem later in the decade, Japan made the mistake of dragging this process out, delaying a solution for years.
Then came the imperative to bleed shareholders first.
http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html
Sweden’s Model Approach to Financial Disaster
http://www.time.com/time/business/article/0,8599,1843659,00.html
Sweden’s financial crisis in the early 1990s stemmed from a 1985 deregulation of credit markets, which set the stage for overexpansion and bubbles in the real estate and finance markets. When those bubbles burst in the early 1990s, Sweden’s currency crumbled and interest rates spiked to 500% overnight. Of the country’s seven biggest banks, five needed either government bailouts or big injections of money from shareholders. The value of the country’s real estate market plunged 50-60% in 18 months. “The whole Swedish banking system was off-balance,” Lundgren recalls.
It is remarkable to me the lengths you will go to lie about history
There are no lies and the lengths I go to are not remarkable. All I have to do is quote from your own Swedish website link.
Anders Borg, Finance minister:
“….In the mid-1980s had credit market liberalised, and the monetary settlement also was removed….
The crisis of the early 1990s also contributed to increasing recognition that economic policy and its framework was flawed. A consensus emerged on the need to improve regulatory frameworks and to review economic policy objectives. The result was a number of reforms aimed at greater stability and greater predictability. The reforms have meant that both monetary and fiscal policy has been given clear objectives and conditions that also reach them.
…Sound public finances today has a strong support and involvement in politics.
…We know that full employment is the most powerful weapon against growing inequalities and injustices in society….”
http://www.regeringen.se/sb/d/7672/a/99800
500% that’s how high they had to raise rates. 500%.
Well you can disagree with the analysis of the Swedish Government, the Swedish Central Bank, the U.S. Federal Reserve and the Japanese central bank if you want.
LOL
I guess a few puff pieces came out after the U.S. housing market blew on a few tabloids comparing the U.S. housing collapse to others in history.
But the fact of the matter is the real estate bubble popped in Sweden as a result of overspending by the welfare state. As your article points out it was in response to rapid rising in rates of internet (500% that’s how high they had to raise rates. 500%). and taxes due to excess monetary expansion. That was caused by overspending of the welfare state.
500% that’s how high they had to raise rates. 500%. No this was no run of the mill real estate bubble. You don’t need to raise rates to 500% for that. And the reason the tax rates spiked was due to the debts from the welfare state as well.
Do your research. Read the papers by the governments themselves.
The real estate bubble popped in Sweden as a result of overspending by the welfare state.
No, deregulation of the financial markets and the following bubble bust caused a steep drop in the tax revenues. See quote below.
And I just proved you wrong by using your Swedish government website quotes of Anders Borg, Sweden’s Finance minister, PETER ENGLUND of the Stockholm School of Economics and here’s the topper from Lars Jonung—the chief economic adviser to Swedish Prime Minister Carl Bildt in 1992—and now with the Department of Economics, Lund University,The Fiscal Policy Council of Sweden
The Nordic crises have their roots in the process of financial liberalization that was carried out in a monetary regime based on pegged but adjustable exchange rates. In the 1980s, the financial systems of Finland, Norway and Sweden underwent major deregulation. Financial liberalization set off a sustained lending boom, capital inflows, rising asset prices, rapidly increasing consumption and investment and an overheated nontradables sector while the exchange rates of the Nordic countries remained pegged. The boom turned into a bust around 1990, with capital outflows, widespread bankruptcies, falling employment, declining investments, negative GDP growth, systemic banking crises, currency crises and depression. Eventually, the central banks of Finland, Norway and Sweden were forced to move to flexible rates in the fall of 1992 in order to avert the depression.
The crisis in Finland, Norway and Sweden was a financial crisis occurring as part of a boom-bust cycle. It displayed the characteristics of a twin crisis, defined as the simultaneous occurrence of banking and a currency crisis. In fact, in Finland and Sweden the twin crisis turned into a “triplet” crisis when huge public budget deficits emerged as a consequence of the sharp decline in economic activity”
After decades of non-price credit rationing, banks were suddenly able to expand their lending without being hampered by regulatory restrictions. Banks entered into fierce competition for market shares by offering loans to households and firms. A lending boom started, channeling credit to asset markets – primarily to housing, to commercial real estate and to the stock market – causing asset prices to rise….”
This report is based on chapter 12 in The Great Financial Crisis in Finland and Sweden.
The Nordic Experience of Financial Liberalization, edited by Lars Jonung, Jaakko
Kiander and Pentti Vartia, Edward Elgar, 2009.
pdf
https://docs.google.com/viewer?a=v&q=cache:kmEDsrzOr3cJ:www.aeaweb.org/aea/2011conference/program/retrieve.php?pdfid%3D413+Lars+Jonung+banking+deregulation&hl=en&pid=bl&srcid=ADGEESjXbGRu-h5NDvwt6S7KxwSC2wKpGP1t5e4Hyryv7KYDoiRLBrsALPF-u5bi1d5rKwo4_2rVlNYJubdnyzjtTHaRtUz59Cj_jmNn3eFUsm1dz0VmPb53FRkYpWUec-F9mGHtNz1d&sig=AHIEtbQr3O6vnXyh6ZTrG923yo_KN3yATA
Federal Reserve and Bank of Japan papers come to the identical conclusion.
The US Federal Reserve? (Your propaganda is weak-sauce today.)
Lessons from the Resolution of the Swedish Financial Crisis
Tanju Yorulmazer, Federal Reserve Bank of New York
After a comprehensive deregulation of the credit markets in 1985, the Swedish banking system was in unchartered territory. Low interest rates, lax supervision and the expansion in loose credit led to an overheating property market where prices for commercial real estate more than doubled in the latter half of the 1980s.2 In the Swedish crisis, finance companies played a role similar to that of SIVs in the current crisis.
These companies were less regulated compared to banks and many of these companies financed their operations with a new type of commercial paper called marknadsbevis, which the banks had guaranteed. When one of these finance companies, called Nyckeln, folded in September 1990, the market for these securities dried up. When the finance companies ran into liquidity problems, banks found they had to keep funding the companies – to which they were actually closely linked to.
pdf
https://docs.google.com/viewer?a=v&q=cache:3g2wa0KMsAQJ:www.ny.frb.org/research/economists/yorulmazer/lessons-swedish-crisis1.pdf+&hl=en&pid=bl&srcid=ADGEESiD0lB6rHIQshH4hjhhNFoKuW8f5V_0ym4PCWaqftzETFlMkZLtchdJ4HdavQRUJvrITqTJ-UVcY9qn2bBg4LUL0KeH83vWdVT-QsnrO3MGzEPrGspze07bJiD0lb7kabIMX6wl&sig=AHIEtbSAM4Lse46iLC44nkjPbkJ7lKG52Q
SFBay Area- Your link, which you claim proves everything about your claim, is to a Swedish language web site. Would you care to translate it for us?
The kochtopus needs new astroturf.
Rio, If you are the successful wet dream capitalist you say you are, why do you push for communism with such vigor? And why do you need free health care?
You must have money at stake, you must contract for or with governments. Come clean.
“But sometimes I’m really shocked that people don’t move to where the jobs are.”
Moving is expensive. If you move, there is no guarantee you will find a job once you get there. If you know nobody “where the jobs are”, you may find yourself homeless and hungry before you can cash your first paycheck.
If people knew they had a job before they moved, more would be willing to move. But without a job, moving can be quite risky. Adding to the risk is that people have generally exhausted their resources before they will consider such a move.
It’s interesting too that before 1900 the Catholics, Episcopalians, and German Lutherans known as the liturgical groups (because they focused more on religious rituals) voted Democratic. The Democratic party was the party for a small federal government and for self reliance. The Democratic party was also the party of the slave owning South. The liturgical groups were mostly Southern European - Italians, Southern Germans, etc. and some Irish. Many moved to the mid-western states along the great lakes. On Sundays they set up the tuba bands and beer gardens and would have a community shin dig. They didn’t like the state telling them what they could do. And they wanted hard, gold based money.
The WASP’s (White white anglo saxon protestant) in the North East, blue blooded Methodists, Congregationalists, Presbyterians known as pietists were the Republicans. They wanted big government. They believed that the road to heaven laid in saving people from their own sins. No drinking, no dancing on Sunday that sort of thing. They believe in a big military and usually presented a four or five star general as their presidential candidate. Usually it was some war hero from the last great war. They accused the Republicans of dancing, drinking, having free love, homosexuality and children out of wedlock. Oh My! And they wanted fiat money and inflation.
Neither party was really into a welfare state by today’s standard but the Republicans leaned that direction.
This started to change with the expansion into the West. Great plains states became a bread basket. The farmers would get into debt to buy seed and to pay for living expenses before they could cash in on harvests. So they hated debt and love price inflation. After a particularly bad drought a leader arose - a bible thumping fire eyed leader that preached for bail outs, welfare and a fiat money system with high inflation. He also fought to fix prices on crops to keep prices high for export. It was a odd mix of religion and the international socialism. This was at a time when the international socialists were moving to the U.S. A newspaper supporting the party was running pieces by Carl Marx. The owner ran for president as well.
That’s when the parties started to shift.
known as the liturgical groups (because they focused more on religious rituals)
Actually, that description isn’t quite accurate. Liturgical Churches are those where worship is structured, as opposed to non liturgical where worship is more free form. Both have rituals, but in a liturgical church there is a prescribed order during worship, including when and which prayers are said and which passages of the Bible will be read.
In Catholicism this order is prescribed in the Missal. In Anglicanism/Episcopalianism it’s in the Book of Common Prayer, while the Lutherans use various breviaries.
Because in WW1/2 all those farmers and church-goers were fighting on the side of Russian/German socialists….
Citizens of the first half of the 19th century voted the way their churches and ward bosses told them to vote. With the advent of public literacy (courtesy of those socialist public schools) folks began reading daily newspapers and thinking (marginally) more for themselves.
Yes, ahansen, that’s true. With the addition of the great plain states to the union we saw the entrance of international socialism via William Jennings Bryan who ran unsuccessfully for the Democratic Party three times just around the turn of the century. This was the transition from the traditional Gilded Age to the Progressive Era. This is when the Democratic party started to shift away from being a party for a small federal government and for self reliance (and pro-alcohol). William Jennings Bryan come from one of these new states - Nebraska. And the farmers in these states shifted the Democrats from the party of the South and the liturgical groups of the Ohio Valley in a new direction. William Jennings Bryan ran a newspaper that each week ran a column by Carl Marx. He brought international socialism to the Democratic party along with some brimstone and fire of the fundamentalism. Not only did he rally the prairies with his inflationary ideology he also rallied the miners in the West to support him with his “Free Silver” campaign. This was to fix the silver ratio to gold artificially high and allow miners to bring their silver into any local shop to be minted as coins. This would have created a boom out West and the banker hated the idea.
William Jennings Bryan international socialist movement never took off for a number of reasons in the U.S. including the war. There were some small socialist party wins but basically the movement ran out of steam in the U.S. and got absorbed into a U.S. Democratic Party.
What I find fascinating historically is we have these two great New World nations at this point around 1900 - very similar - the U.S. and Brazil. Both vast great powers. Both having ended slavery. Both with similar economies and levels of development. When the Empire of Brazil ended Brazil had modern railways, a modern telegraph system, electricity, factories and a republican form of government. Both had abundant resources and labor. Both had vast trade networks with Europe. At that point an observer would clearly think that these two great nations would have similar fates. But that wasn’t to be the case.
It’s in this period that immigrants flooded Brazil from Eastern Europe, German and Italy. Families brought both totalitarian international socialist (communist) and totalitarian nationalist socialist ideologies (fascist). And the children of these wealthy families went to university and started columns of the communist and fascist parties. International socialism and nationalist socialism found a fertile ground in the minds of these wealthy students. And it took off.
In the following republican periods the government of Brazil is the scene of a factious struggle for power between factions of the international socialist and nationalist socialist. This culminated in the 1960’s with a military coup by the nationalist socialists. They overthrew of the communist government of the João Goulart. That marked the end of the Republic and the formation of a fascist military rule that lasted into the 1980’s.
Brazil progressed into poverty and instability and became the third wold banana republic it is today with closed markets and high tariffs and lost all it’s developmental advantage ending in hyper-inflation until they accepted IMF controls and a conservative fiscal reformer as president in the 1990’s. The U.S. followed a more neoliberal path with more of a consensus between elites and thus a more stable form of government and thus became a world super-power.
Brazil progressed into poverty and instability and became the third wold banana republic
The trend is not America’s friend. The American middle class has been hammered for 30 years and the Brazilian Middle-Class has been growing for 15 years.
Brazil’s middle class now numbers 104 million equivalent to 53% of total population. (38% ten years ago)
In Brazil, income and wealth are up from 10 years ago and in America, income has trended down and middle-class net worth is back to 1992 levels.
Rio
One of my family members was the ***United State Ambassador to Brazil.*** I studied Brazil and Portuguese in college and like you I’ve been there. I know a few things about Brazil. I know everything about its history and economics.
The conservative President Fernando Henrique Cardoso is the only reason Brazil didn’t end as a failed state. At the time he took over the nation was experiencing run-away hyper-inflation.
Brazil had 100 years of totalitarian international socialist (communist) and totalitarian nationalist socialist (fascist) military rule from the end of the Empire of Brazil until the early 1990’s. At that time socialism had failed miserably. The people were in abject poverty. And hyper-inflation was the highest in the entire planet.
In 1993 Minister of Finance and introduced the Plano Real. He had accepted IMF controls. He halted hyper-inflation. The price level increased by a factor of 1.0 trillion over a few years running at over 30,000% in just one year. Money was worthless and floating down the street - no one would even bother to pick it up. I know - I was there and I saw it with my own eyes. It was the day money died in Brazil from socialism.
Fernando Henrique Cardoso was elected President of Brazil two years later and ruled threw the 1990’s. It’s only because of his very conservative (IMF led) government that you have any monetary system today in Brazil at all.
Since than Brazil had coasted along by the graces of his good work in the 1990’s. How long it will last I don’t know. It is a house of cards. If you think the death of the monetary system is a success than I am speechless. Brazil was Zimbabwe on steroids.
Just as we’re seeing today, the socialist movement, as championed by pacifist, Bryan (who also went on to defend science in Dayton, Tennessee), arose in reaction to the extreme wealth disparities of the robber baron era.
Those disparities were addressed by a couple of nasty world wars, but in the end, wealth was, indeed, redistributed. How much nicer for everyone if they’d just listened to Bryan in the first place and bypassed the carnage? And no, I’m not equating Bryan with Stalin or Mao or Pol Pot et al, and neither should you if you want to be taken seriously.
Ironically, we DID end up with international socialism, though it’s an international socialism for the plutocracy at the expense of the populace.
Not sure why I get to be the designated defender of democracy and social responsibility here, as I am both elitist and anarchist (if reluctantly pragmatic), but it’s nice to see you beginning to temper your extremism a bit.
Here’s a fine blended malt back atcha. Cheers.
Fernando Henrique Cardoso
Cardoso rocked. But so did “commie” Lula. And “conservative” Cardoso implemented a lot of social programs continued by Lula.
Your labels are dumb. Life is more complicated than your little mind.
nationalist socialist (fascist)
Fascists are not socialists Rush.
Rio - once again personal attacks. That’s all you got.
Considering that both Brazil and the U.S. 100 years ago started out on the same level of economic development it is amazing the disparity between the two countries now. Both started with similar histories, similar technologies, railways, telegraphs, electricity, etc. One took the path of socialism and one did not. Now let’s look at the results:
IMF GDP per capita:
Rank, Country, GDP/Capita, Year
15 United States 48,328 2011
54 Brazil 12,802 2011
Brazil now has 25% of the GDP per capita as the U.S.
And yes, totalitarian nationalist socialist are indeed fascists.
ahansen wrote: “Just as we’re seeing today, the socialist movement, as championed by pacifist, Bryan (who also went on to defend science in Dayton, Tennessee)”
I think you meant that William Jennings Bryan persecuted and prosecuted science. He died just after the Scopes Monkey Trial where he was part of the prosecution team against Tennessee school teacher Scopes for teaching evolution. Bryan was an opponent of Darwinism on religious and humanitarian grounds. He was an extreme fundamentalist.
Rio - once again personal attacks. That’s all you got.
Yea, it’s “all I got”.
(Along with proving you wrong by using the Federal Reserve, your Swedish government website quotes of Anders Borg, Sweden’s Finance minister, PETER ENGLUND of the Stockholm School of Economics and the topper from Lars Jonung—the chief economic adviser to Swedish Prime Minister Carl Bildt in 1992—and now with the Department of Economics, Lund University,The Fiscal Policy Council of Sweden.)
It’s “all I got”.
ahansen, reading over the rest of what you wrote… I’m not sure I completely follow but that may be because I’m getting antsy - it’s time for me to hit the trails for my run so I’m outta here.
You certainly won’t find me arguing with you regarding socialism for plutocracy at the expense of the populace. This last election was the poster child for this. You had on the one hand the incumbent who *supported* socialism for plutocracy at the expense of the populace. And on the other hand you had the challenger who *supported* socialism for plutocracy at the expense of the populace. So you see we had a choice? We just had one choice not two. I guess that makes it simpler.
The regulated financial industry has completely captured the regulators. In the process they’ve gained complete control and the system is now corrupt. They control most of both political parties.
As for wealth redistribution by the wars and the communists that you list - well I guess I see it more as wealth destruction than equalization. But perhaps that is what you meant - everyone was equalized to zero. By the 1980’s the Soviet Union had a GDP for the entire nation that was smaller than Illinois and larger than Georgia. GDP / capita was completely destroyed. It was much the same result in the theater of the two wars.
Thanks for the catch, I meant to write “deride”. Then “die”. Therein, perhaps, lies a moral?
Anders Borg, Sweden’s Finance minister, wrote the first article I posted. He 100% agrees with me. The overspending by the socialist state caused the credit expansion and via the transmission mechanism (the banking system) that lead to inflation which caused housing prices to form a bubble. Hyper-inflation ensued. They couldn’t keep up with the spending so they raised taxes. The currency collapsed and in an attempt to prop it back up and rose interest rates up to 500%. The 500% interest rate and higher taxes busted the bubble and the housing market collapse with every else. This is the same pattern you see over and over in every socialist collapse. It’s similar to Brazil in the late 1980’s but Brazil was much, much worse.
I’ll post some of Borg’s findings below in quotes.
But first - since you posted something of actual substance instead of pure personal attacks I’ll respond in kind.
The deregulation of the banking system did add fuel to the fire that helped housing prices go up. But the deregulation of the banking system was a policy response to the run away costs associated with the socialist state. They needed to print more money to pay for it all so they got the printing press out when they ran out of money. That was a bad idea. But the inflation was already running away at that point. The spending was out of control. Taxes were already too high. The monetary system was collapsing. And moreover, they didn’t understand entrepreneurship and so industry was not creating productivity advancements. These are Borg’s opinions and I’ll quote him below but he has many excellent papers that go into great detail. I know about them because financial collapse is well a hobby for me - I study it.
And it is perfectly legitimate to dissect each piece of the event and examine it and learn from it and discuss it. I’m not trying to blame you for that. That’s OK. The bank deregulation and the housing collapse are one piece of the whole process and it’s OK to look at papers that look at just that one aspect. But you have to look at the papers that look at the whole event if you want the big picture. And that is how Anders Borg sees it.
Borg writes about the lead up to this long before the housing bubble snapped and these are all quotes from his paper and I’m not cheery picking - I won’t comment below this point this is just one long continuous quote:
“What then were the factors that made the Swedish model stopped working? Of course, Sweden was hit adversely by the international recession that followed in the wake of the two oil crises in the 1970s. But other industrialized countries hit by these shocks and it is difficult to argue that Sweden would be so sensitive to the international economy, this may explain why Sweden fell from fourth place in the ranking of OECD countries’ GDP per capita around 1970 to a ninth place in 1991 and a fourteenth in 1997 (new ranking after revised figures).”
“Instead, I would argue that the explanation is in the economic policies of the 1970 - and 1980’s. Five factors usually cited as particularly significant: ”
“- Budget deficit and high inflation undermined macroeconomic stability.”
“- The tax and benefits system undermined the work line.”
“- A vague competition policy and ignorance of the importance of entrepreneurship and innovation ability in business.”
“- An uncertain investment environment in the wake of macroeconomic imbalances.”
“- A fragmented political system in combination with a weak institutional environment hampered the long-term economic policy.” ”
“Let me also mention that the compressed wage structure that already existed in the 1950s and 1960s created when employer contributions and consumption taxes rose during the 1970s, tax wedges and pulled up the cost of employing people with low qualifications, who often had hard to establish themselves in the labor market. Put simply, one can say that the Swedish model with strong unions and compressed wage structure was not compatible with the high tax wedges that were added in the 1970s.”
ahansen, I know that you digest material with a great deal of care and focus. Therefore I figured that was just a typo - I make more than my share.
But I wanted to correct it just in case anyone was actually trying to use what you and I are writing as a basis for actual learning. That trial - fun stuff.
“Providing solutions for your neighbor’s sexual and drug misadventures is mandatory.”
Sounds like you have fun neighbors.
If one is an adherent of Big Government, most things are “mandatory”. Provision of food, shelter, clothing is all mandatory. Healthcare is mandatory. Providing solutions for your neighbor’s sexual and drug misadventures is mandatory.
That must mean the American people are in favor of a form of Big Government. There is probably no institution in American life as popular as Social Security and Medicare. There’s probably a majority who are in favor of some form of safety net, including fodd stamps, for those who need it. That last part is the conclusion that David Stockman came to when he and Reagan couldn’t safety net spending as much they wanted to cut it.
I can testify in the late 60s food stamps kept my family from starving and welfare kept a roof over our heads.
And that’s the way it should be temporary help….with strings attached…
Toppling Off the Fiscal Cliff: Whose Taxes Rise and How Much?
Roberton Williams, Eric Toder, Donald Marron, Hang Nguyen
Published: October 01, 2012
The looming fiscal cliff threatens to boost taxes by more than $500 billion in 2013 when many temporary tax provisions are scheduled to expire. Nearly 90 percent of Americans would pay more tax, primarily because the temporary cut in Social Security taxes and many of the 2001/2003 tax cuts would expire. Low-income households would pay more due to expiration of tax credits in the 2009 stimulus. High-income households would be hit hard by higher tax rates on ordinary income, capital gains, and dividends and by the new health reform taxes. And marginal tax rates would rise, potentially affecting economic decisions.
I place the chances of the structure of the fiscal cliff being enacted at zero…There is no friggen way that the southern neocons will allow those cuts to the military…NO CHANCE…They will cave on whats necessary to preserve their jobs program…
Entitlements are 55% of the federal budget and growing
The military is 20% of the federal budget and is already stable/shrinking
The US government borrows 40 cents of every dollar it spends.
You could cut the military budget to ZERO and it STILL would not solve the problem.
Your move…
BYW - Funding a military is actually explicitly called out in the US Constitution as a duty of the Government. Giving free housing and medical care to illegals is not.
“You could cut the military budget to ZERO and it STILL would not solve the problem.”
What are you proposing? Stealing back the Social Security bennies that Baby Boomers have paid through the nose to fund since when Ronald Raygun and Alan Greenspan collectively hosed us back in 1983?
Entitlements are 55% of the federal budget and growing ??
First, social security is not some give-away program…Its a earned entitlement…Does it need some tweaking given demographics…Sure…Raise the age…Raise the cap some…Fixed…
Medical/Medicaid is as bad as the military when it comes to waste & abuse…Also, tort reform is desperately needed to help these programs…
Now back to your military…$700 bil a year…It does not matter that its “20%” of the budget…Its bigger than all the worlds countries combined and its a giant work program for the neocons…Cut it in half…Close all the bases…Bring everyone home…If countries want protection, they can hire Blackwater…Close many boots on the ground bases in the USA…Focus on air & sea…Expand the National guard mainly with one or two year mandatory duty…
explicitly called out in the US Constitution as a duty of the Government. Giving free housing and medical care to illegals is not ??
No argument here…
First, social security is not some give-away program…Its a earned entitlement…Does it need some tweaking given demographics…Sure…Raise the age…Raise the cap some…Fixed…
AND a few more things on SS….No more checks sent outside the USA….Working roughly 7 years to qualify is just plain STUPID….Should be a minimum of 20 if not more…
“First, social security is not some give-away program…Its a earned entitlement…”
Why would that stop a plutocrat from trying to steal it, in order to transfer yet more wealth from the 99.99% into the coffers of the 0.01%?
BYW - Funding a military is actually explicitly called out in the US Constitution as a duty of the Government. Giving free housing and medical care to illegals is not.
Since you’re supplying us with all these percentages, can you tell us what poriton of federal spending consists of providing to housing and medical care to illegal immigrants?
Great human interest story about a recent college grad:
http://www.tampabay.com/features/humaninterest/article1261914.ece
Thanks Muggy, the story hits home on three fronts; my youngest is in her second year at New College, my family lives north of Tampa and my wife is a Kiwi.
+1 A sobering reality check!
http://www.redfin.com/CA/Santa-Monica/702-21st-St-90402/home/6770457
2.65M 1100 square feet
Thank you obama for the new housing bubble.
Don’t worry - Five illegal strawberry pickers will pool their $750,000 no down payment FHA guaranteed liar loan mortgages and buy the place…
LOCATION LOCATION LOCATION(?)
The only logical conclusion can be that CA is the heart of DumbAss Country.
That is one money pit POS for 2.65mil.
What is the typical commission on a deal like this?
Envelope please
and the Deadbeat lifetime achievement award goes to……
Miss Patsy Campbell, let`s give her a big hand everybody
Patsy`s acceptance speech
“They’re not going to take this house,” says Campbell. “I intend to stay in this house and maintain it as my residence until I die.”
“In 1985, Patsy Campbell stopped making mortgage payments because of an illness that caused her to lose income and get behind on her bills, she says.”
The 25-year ‘foreclosure from hell’
By mounting countless challenges to her foreclosure proceedings —burying her lenders in stacks of legal paperwork — a Florida woman has lived in her home without making a mortgage payment since 1985.
By Robbie Whelan of The Wall Street Journal
Dec 4, 2010
Patsy Campbell could tell you a thing or two about fighting foreclosure. She’s been fighting hers for 25 years.
The 71-year-old retired insurance saleswoman has been living in her house, a two-story on a half-acre in a tidy middle-class neighborhood here in central Florida, since 1978. The last time she made a mortgage payment was October 1985.
And yet Campbell has”They’re not going to take this house,” says Campbell. “I intend to stay in this house and maintain it as my residence until I die.”
Campbell’s foreclosure case has outlasted two marriages, three recessions and four presidents. She has seen seven great-grandchildren born, plum real-estate markets come and go and the ownership of her mortgage change six times. Many Florida real-estate lawyers say it is the longest-lasting foreclosure case they have ever heard of.
Campbell, who is handling her case these days without a lawyer, has learned how to work the ropes of the legal system so well that she has met every attempt by a lender to repossess her home with multiple appeals and counteractions, burying the plaintiffs facing her under piles of paperwork.
She offers no apologies for not paying her mortgage for 25 years, saying that when a foreclosure is in dispute, borrowers are entitled to stop making payments until the courts resolve the matter.
http://realestate.msn.com/article.aspx?cp-documentid=27145486 - 240k - been able to keep her house, protected by a 105-pound pit bull named Dodger and a locked, rusty gate advising visitors to beware of the dog.
Bet she still pays the property taxes though.
Government doesn’t play the same games they force the rest of us to play.
All of the “foreclosures” in FL that I know of (most with people living there not making mortgage payments for at least two or three years, but some unoccupied) get the property tax paid on time by the bank. They literally pay nothing. The house accross the street (abandoned) has not had a mortgage payment made in over five years, the woman who borrowed the money has been DEAD for four years, and the place is still listed in PRE-Foreclosure! WTF? The scope of the hose-job by our “system” is unfathomable.
She should write a book. Bet it becomes a best seller
Sounds like she is living the new American Dream.