Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Posted By: Ben Jones @ 12:29 am
Catalan President Artur Mas, who has implemented unpopular spending cuts in an economic crisis, had called an early election to test support for his new drive for independence for Catalonia, a wealthy region in northeastern Spain.
Voters handed almost two thirds of the 135-seat local parliament to four different Catalan separatist parties that all want to hold a referendum on secession from Spain.
But they punished the main separatist group, Mr Mas’s Convergence and Union alliance, or CiU, cutting back its seats to 50 from 62. That will make it difficult for Mr Mas to lead a united drive to hold a referendum in defiance of the constitution and the central government in Madrid.
“Mas clearly made a mistake. He promoted a separatist agenda and the people have told him they want other people to carry out his agenda,” said Jose Ignacio Torreblanca, head of the European Council on Foreign Relations’ Madrid office.
If Catalonia goes, can they take Texas with them?
take Texas with them?
Shut yer commie talk mouth. Nothing says bootstrapping, invisible hand of free market, rugged individualism like being the leader in rates of child poverty and infant mortality.
Don’t mess with Texas.
Speaking of Spain, I was reading over the weekend and while I cannot remember the source, I think either the WSJ or Business week, I found the debt to GDP for both the U.S. and Spain. It was actually a projection for the end of fiscal year 2013. The Spanish ratio was actually at 93% and the U.S. at 113%. That is right, we are much worse than Spain. A product of adding more than 6 trillion in debt during the last four years.
So how are we getting away with it? Printing money. Right now the Fed is printing more than 40 billion per month not even including operation twist which is around another 45 billion. So right now we are monetizing around half our deficits. Of course, BB is talking about converting operation twist to a straight purchase of debt which means we will be monetizing all of our debt. I don’t care if some is going for mortgages it has the same impact. Of course, the Continental Congress did the same and the South during the Civil war also used this funding mechanism. Since history shows that there were no problems caused by this, I guess we can continue the policies of the last four years. (sarcasm on). I do not see how this country avoids hyperinflation since there is no way the Fed can raise interest rates rapidly when each one percent increase in the interest paid on government debt will cause 164 billion dollars in additional expense. We are so much worse off than four years ago.
There won’t be hyperinflation, because the wretched refuse aren’t seeing any inflation in their paychecks.
The only inflation is food and fuel.
Fuel inflation is being held down because of lack of demand, which will fall even more with $4-5 hour gas prices.
Food prices will be suppressed/controlled, because governments don’t want starving and/or rioting people in the streets.
“We are so much worse off than four years ago.”
An economy in free fall is better than today’s economy? I might agree that we have fewer options than 4 years ago. I might agree that we are worse off than 8 years ago, but I would not agree that we are worse off than 4 years ago.
And I am not certain that we will be better off in 4 years than we are now. On top of structural problems in our economy, there are a lot of troubling signs in the world economy - bubbles in China, Australia, and India; the Euro crisis; Iran and the Middle East could come to a head in the next 4 years.
I guess we can continue the policies of the last four years. (sarcasm on)
Last 4 years? Were you born in 2008? As you know, Bush’s spending rose much faster than Obama’s while he was cutting taxes for the rich. Instead of “Guns and Butter” it was “Guns and Caviar”. (with paycuts and none of the jobs promised)
A product of adding more than 6 trillion in debt during the last four years.
“Deficits don’t matter” (Especially in elections)
That is right, we are much worse than Spain
I didn’t know they call it the “Spanish Dollar”.
The free fall ended on its own in the Summer of 2009 prior to any of Obama’s policies meaningfully starting. That is when the recession ended by the government’s own data.
Sorry recessions are normal and cyclical. Assuming that the layoffs would have continued ignores that recessions use to start and end without govenment interventions prior to the 20th century. Obama just prevented the markets from working including the housing market. Housing prices would have adjusted to a price to clear the market. Many hedge funds and big banks would have bit the dust but regional banks which sold off the housing paper and credit unions could have taken their place. You are buying the Wall Street lie that what we have done needed to be done. For them, yes, but for the middle class no.
From where I sat (and anyone remotely involved in anything other than real estate, banker manipulated businesses, or Silicon Valley), there was no recovery from the 2000-2001 recession.
My tinfoil hat theory is that the housing bubble was enabled, to camoflage the fact that our manufacturing base was being exported/offshored at discount prices.
“The free fall ended on its own in the Summer of 2009 prior to any of Obama’s policies meaningfully starting. That is when the recession ended by the government’s own data.”
Four years ago was not the summer of 2009. Ask me again in summer 2013 and you may get a different answer as to whether we are better off now than four years ago.
Knowing that the President and Congress were willing to take measures to stop the free fall may have had an impact on layoffs by giving businesses the confidence to hang onto employees even before the stimulus dollars started to flow. I can’t state that with certainty, because we can’t replay the past. Neither do I believe that you can state with certainty that government stimulus played no part in the end of the recession in summer 2009. Government stimulus started in the fall of 2008, before Obama took office.
I do find it irritating that no matter what the issue, Republican partisans will blame Democrats for all ills and claim all credit for anything good. E.g. Clinton didn’t balance the budget, the Republican Congress did. But trillion dollar deficits are all Obama’s fault. And Bush’s deficits don’t matter.
“From where I sat (and anyone remotely involved in anything other than real estate, banker manipulated businesses, or Silicon Valley), there was no recovery from the 2000-2001 recession.
My tinfoil hat theory is that the housing bubble was enabled, to camoflage the fact that our manufacturing base was being exported/offshored at discount prices.”
I would agree and include 2 unfunded wars as well. I think Bush saw 9-11 as a blow to the economy that would kill his chances for re-election unless he did a massive government stimulus. Perhaps this is the source of Cheney’s “deficits don’t matter” statement. They don’t matter to the electorate if the economy is booming.
Unfortunately, what we really needed was a deflation in real estate (not just housing) to compensate for declining wages. But where is the profit in that?
“Sorry recessions are normal and cyclical. Assuming that the layoffs would have continued ignores that recessions use to start and end without govenment interventions prior to the 20th century.”
23 years like the Long Depression (1873–96)? Politicians can’t wait that long.
1873 to 1896, you mean the period where the U.S. became an industrial giant and due to deflation people that saved money were rewarded? Sorry if Keynesians do not like deflation but just the opposite of what is occuring today happened, we were becoming a manufacturing power.
“Sorry recessions are normal and cyclical.”
The 2008 financial collapse suggested that too much buffering of the economy against normal cyclical recessions can result in a massive buildup of irrational exuberance. A bubble in optimism can lead to bubbles in prices and fuel malinvestment. When all these systemic risk bubbles blew up at about the same time, the economic damage was far worse than what would have occurred with less central bank intervention to protect the economy from risk.
I view Greenspan’s “buffering” efforts as similar to wildfire suppression; if you let the fuel build up, when the fire _does_ get started you are in for a far worse one.
Depends on the price of oil and gas. Texas wants to secede when they are up and they don’t want to be subsidizing the rest of the country. It changes its mind when the prices go down.
It changes its mind when the prices go down ??
And that mind change could last for awhile….Fracking has brought a whole new competitive force into the energy sector…
New York is no better. When the stock market is up, NYC wants to secede from the rest of the state. When the stock market is down, Staten Island wants to secede from NYC.
And all across the country, people secede from their families when they can get a better deal elsewhere.
Rick Perry has no where to go.
Even the Republicans don’t want him in the Govornors office for 20 years.
it sure seems like the public got a good education in foreclosure laws during the past 5 years. I wonder if they will use it to their benefit in the next downturn?
Seems all that cash made it to Black Friday…. No more looking up to Lincoln Washington FDR….now children our next exalted leader:
DEADBEATS on a Pedestal….
“I wonder if they will use it to their benefit in the next downturn?”
They got that same education in the Savings and Loan disaster.
Didn’t help this time either.
“The rate will most likely go UP over the next 5 years. The typical turnaround time is has traditionally been about 5 years. What then? What if rates rise to 6%?
The payment will DOUBLE. You might find the $150,000 purchase price is just too high, so we start this nightmare of foreclosures all over again”
Diogenes, here are some numbers for you:
100K amortized over 30 yrs: at 3% is $399, at 6% is $586 - a 47% increase.
100K amortized over 15 yrs (which I recommend) : at 3% is $634, at 6% is $799.
If your replacement buyer wanted a 15 yr PI of $634 at 6% interest the loan amount would be $69,900
With the 15 year loan, after 5 years you would owe $75,175. So if wages remain stagnant you would be underwater but not by as much as you think.
I’m not saying you should buy a 100K house, despite what PW will predictably pop up to assert. Just using a round number so you can do comparisons.
For cheap houses you might look into estate sales.
I’m not saying you should buy a 100K house, despite what PW will predictably pop up to assert. Just using a round number so you can do comparisons.
So you can operate a keyboard on bankrate.com. What is your purpose?
PW, if you had taken the time to inform Dio how to work a mortage calculator it would have saved me some time and you some aggravation. But I think you like being aggravated.
What is your purpose?
I’ve always used $100k borrowed for 30-yrs at 6% fixed, which is roughly $800 per month for PITI as a napkin estimate. FWIW, one can always make additional principal payments.
I could easily afford to make add’l principal payments but I don’t think it makes sense for us right now. The mortgage on our house is now less than 1x income. And the interest rate is ~3.9% (fixed). Perversely, if we pay off the house in the next 4 yrs (5 yrs from purchase) we would invalidate all the state and city incentives we got because my wife is a teacher. The purchase assistance was in the form of a forgivable loan, which means after 5 yrs of owning, the 11k we got from state/city is forgiven. (Because of this, we also can’t refi down to 15 yr mortgage.) In any case, my mortgage is such a pittance, I rarely think about it other than to point and click “pay from checking account” on the Wells Fargo screen once a month. Our PITI is something like 12% of our net (not gross) monthly incomes.
“Our PITI is something like 12% of our net (not gross) monthly incomes.”
+1 A great place to be these days.
+1 A great place to be these days
And where, may I ask is that great place ??
Joesmith is a young lawyer in Baltimore. He is better than the rest of us mere mortals.
And he still thinks that Princeton is going to give his hypothetical offspring free tuition because there are people who go to Ivy League schools who have parents who make even more money than he and his wife do.
Oxide does make a good point that I’m in an arbitrage situation, working at a big firm in an expensive city but living in an average neighborhood in a different city. I think it’s kind of hilarious, I never implied it indicates some special knowledge. I came to the conclusion after a while that this would maximize my upside while minimizing my downside.
Polly, obviously if I make partner I won’t care if Princeton charges full tuition. However, for right now I would not assume this. I would rather assume the opposite. Assuming I don’t make partner at a big firm, or if I have to take a gov job, I absolutely do count on geting tuition assistance. Less than half of HYP parents combine for under 250k/yr in income. These kids do get money, to varying degrees.
One last possibility is going to small firm or self-employed route, where structuring my income could open up a lot of possibilities, all of which are legal. I forget whether HYP do asset checks or only income checks (my parents were high income, low asset so it didn’t come into play). Even if they do check assets, I’m sure you realize there are ways to get around these checks.
I wasn’t referring to “knowledge.”
“I forget whether HYP do asset checks or only income checks”
And there it is. I posted numerous links to the information on the Princeton website about financial aid and ran a few scenarios for you several months ago. You ignored it all.
ur PITI is something like 12% of our net (not gross) monthly incomes.
Shhh, don’t tell the Pimp, he’ll recommend that you should sell and rent.
And you’re paying 50%+.
The last rent increase our landlord gave us pushed us into paying close to 35% of our gross on rent.
Our PITI is 23%.
Our PITI is under 10% of gross. If we both get pay bumps like last yr it will be pushing down towards 5% in a few yrs. The biggest problem at that point is going to be convincing my wife not to demand a larger/more expensive house. Also the temptation to have more than one child.
I have planned ahead for these two curveballs: I plan to ramp up other forms of consumption and emphasize that these are largely possible as a result of the conscious choice to opt out of the top ZIP codes and “nicest” houses.
The last thing is, it makes a lot more sense to have a personalized, tailored space to call home. Having spent a year customizing this house, it hardly makes sense to move. When you move, you have to recreate the ideal environment. Even for athletes and movie stars, this is a pain… for normal people who don’t have a team of helpers, it’s a nightmare.
“Our PITI is 23%.”
And you got suckered and ripped off.
Isn’t it a Piti.
Our PITI is $2,170 per year.
Plus the last I of around $1,000 (forgotten).
My PITI is $840 a year. Do I win the thread?
Only if you admit to being in BF Egypt.
“Only if you admit to being in BF Egypt”
Our neighborhood diner was transformed into an Egyptian restaurant so I guess I am! Never thought of it that way ;-).
This Boomer paid $1000/mo/100K borrowed in 1984. Good for you, joesmith.
I’d also ask the question: “under what general economic conditions will the Fed allow rates to double?”
1. Inflation, in which case fundamental demand for hard assets will rise (including real estate); and
2. Strong job and economic growth, in which case more people will have the ability and confidence to step off the sidelines.
IMHO, circumstances other than these two under which rates will rise are fairly limited…can anyone think of any? The dollar loses “reserve currency status” might be one…
Any thoughts on for how many more years we should expect housing to keep “bouncing along the bottom”?
Like global warming, the housing recovery is real.
The Housing Recovery Is Getting Real
Published: Tuesday, 20 Nov 2012 | 9:39 AM ET
By: Bob Pisani
On-Air Stocks Editor
Home builders up 2 percent on strong housing starts data. October housing starts at 894,000, the highest level since July 2008.
Single-family home starts were basically flat, but there was a big increase in multifamily home starts.
Bottom line: The housing recovery is real, and housing starts are approaching the psychologically important 1 million level. This is far below the record of 2.2 million set in 2006, but those were unrealistic levels — the 10-year average is close to 1.2 million units.
Just across the ticker….”Moody’s”
Home Owner lines of Credit (HELOC) increase 30% and are now @ 2008 levels….Back to the future….
Indeed. We posted the same story two minutes after you did.
Back in 2004-2005, we had a brief gig slinging HELOC’s for TARP bank. Our small but proud contribution to the bubble.
“Home Owner lines of Credit (HELOC) increase 30% and are now @ 2008 levels….Back to the future….”
Except in 2008 that HELOC was probably for granite countertops and stainless or a trip to Tahiti. Most likely now it’s for education or healthcare costs after a lay-off.
Or just plain re-fi’s.
If all those who could refinance their dwellings did, it would be a huge boost to the economy in terms of spendable dollars at higher velocity. If they were in positive territory.
Not for granite and stainless, but for surviving the painful but (?) inevitable revaluation of their underwater property/investment/house/home/second home.
Survival, not the teased scant modification.
Pretty big “IF”, don’t you think?
What would it take for the repeat of lax qualifying standards to repeat? Absolutely nothing.
“If all those who could refinance their dwellings did, it would be a huge boost to the economy in terms of spendable dollars at higher velocity. If they were in positive territory.”
I posted on this a while back, approximately 11 million loans date from before 2005, and have interest rates at above 4.5%. There are a lot of these loans that could be refi’d into lower rates (ie. not underwater).
I for one would be supportive of government supported outreach to these borrowers to refinance. However, this is unlikely to occur, as every refinance hurts some investor out there (bank or otherwise).
House Prices Are Nowhere Near a Bottom, Says Analyst
Published: Tuesday, 20 Nov 2012 | 9:15 AM ET
By: Henry Blodget
In recent months, most economists have come to believe that U.S. house prices have finally bottomed after a horrible five years of declines.
Most of the major house-price indices, including the monthly Case-Shiller report, have turned higher. And yesterday’s Existing Home Sales report showed an increase in the median house price of a startling and encouraging 11 percent year over year.
In the past couple of years, there have been periods in which house prices have risen temporarily, only to soon begin falling again. These “head fakes” caused many analysts and real-estate agents to prematurely call the bottom. And they have likely left some home buyers and investors sitting on losses that they didn’t expect.
One analyst, Keith Jurow, who writes about the housing market for finance site Minyanville, thinks that the current price rebound is just yet another head fake. Jurow thinks the bottom for house prices is “nowhere in sight.” And he thinks that homeowners in some markets like New York, which haven’t experienced price declines that are as sharp as in some other markets, will get particularly clobbered in the next few years.
I wonder if this same analyst was screaming “BUBBLE!” in 2005, 2006, and 2007…
He is basing his theory on the AMOUNT of Shadow Inventory, and that when it comes on the market, it will put downward pressure on prices.
I agree that prices could be negatively effected by shadow inventory, but the AMOUNT of shadow inventory is irrelevant. The PACE at which the shadow inventory is released to the market is what matters.
Until states like New York change their foreclosure laws to speed up the pace at which these homes are foreclosed, I don’t see how the mere existence of shadow inventory will negatively impact home prices.
We will see what happens in NJ, as a recent law (yet to be signed by Christie) will allow faster foreclosure of abandoned properties…this will most definitely speed the pace at which shadow inventory is released into the NJ market…we will see what happens there…I predict downward pressure on prices.
Until other states take action to allow faster foreclosures, their shadow inventory won’t have much of an effect on prices.
Apparently some analysts never heard of inventory manipulation for price fixing purposes.
The ‘Mortal Enemy’ of Home Prices: Excess Housing Inventory
By Morgan Korn | Daily Ticker – Thu, Oct 18, 2012 10:42 AM EDT
Housing data this week continue to point to a market recovery.
Housing starts surged to 4-year high last month the Commerce Department reported. New home construction increased 15% in September compared to August and building permits — a number that reflects future building — jumped 11.6% last month. Housing starts reached a seasonally adjusted annual rate of 872,000 units in September and single-family housing construction last month grew 11% to an annual rate of 603,000. New home building grew in three of four U.S. regions.
Forecasting firm IHS Global Insight called the housing starts number a “blowout.” The National Association of Home Builders said its monthly builder sentiment survey was 41 in October, the highest level since June 2006. A reading below 50 represents negative sentiment about the market but the index has risen steadily over the past year.
Rising home prices and year-over-year increases in new and existing home sales have contributed to the turnaround in the housing market.
The latest positive numbers in the housing market have not persuaded economist Gary Shilling, a longtime housing bear, to change his downbeat forecasts. Shilling holds fast to his prediction that home prices will fall another 20% and dismisses talk that the market has bottomed. He cites the high number of shadow inventory in the market as support for his pessimistic housing thesis.
“Excess inventory is the mortal enemy of home prices,” Shilling says in an interview with The Daily Ticker.
Shadow inventory refers to the number of distressed homes that have not yet been listed by a realtor but are expected to hit the market soon; a number of the properties are in the process of foreclosure or are seriously delinquent or behind with loan payments.
Shilling contends that the uptick in housing data could very well be a head fake for the market. He says the “huge” overhang of excess inventory — he pegs the number at 1.5 million — will continue to hamper the recovery.
Seems like high long-term unemployment would be the “major enemy” of home prices, but I’m still operating in the 20th century. My bad!
And for those Lucky Duckies who still have jobs, median household incomes are down $5,000 over the last five years (not everybody in Amerikwa is rich like all the HBB’ers who like to toot their own horns here).
Welcome to the recoveryless recovery.
Gonna name names?
like all the HBB’ers who like to toot their own horns here
What’s that? I can’t hear you! I’m too busy running my incredibly successful internet computer thingie business, which I built from nothing with tons of my own blood, sweat, and tears. And now I want to enjoy my hard-earned success, without being taxed for my brilliance by the herd- and oh yeah, I would be twice as successful without all this burdensome government regulation.
But I might just shut it all down because of Obamacare. Just go relax on an island somewhere. It’s not worth making a bunch of money if I have to share too much of it with my deadbeat workers.
Anyway, you were saying?
Comment by alpha-sloth
2012-11-26 08:52:10 = commie talk.
Or maybe you could just remove yourself from one of the 10-15* worst states and conduct your business in one of the ten best states for business climate.
*couldn’t remember which Carolina you were from
And that’s why the squad will never have a successful internet computer thingie business. The syntax should be “== commie talk” not “= commie talk”.
Seattle = commie.
And our weed law is better than yours, we can grow six plants per person.
The syntax should be “== commie talk” not “= commie talk”.
It’ll still compile. If you’re lucky nobody will run into the bug until after you’ve been laid off.
If the number of serial bottom callers picking bottoms this fall is a reliable indication, then perhaps a bottom is “in.”
JP Morgan’s Dimon Says Housing Has Turned the Corner: Is He Right?
By Jeff Macke | Breakout – Fri, Oct 12, 2012 9:55 AM EDT
Mega-bank JP Morgan (JPM) reported record profit of $5.7 billion in the third quarter, up 34% year-over-year . With the size of JPM and the diversity of its business lines, the company can report almost whatever it wants on any given quarter. The most salient takeaway for investors as a whole was something CEO Jamie Dimon said in the management discussion portion of the press release:
Importantly, we believe the housing market has turned the corner. In our Mortgage Banking business, we were encouraged that credit trends continued to modestly improve… Despite this improvement, the absolute level of charge-offs remains elevated. We also expect to see high default- related expense for a while longer.
Dimon didn’t exactly issue the all-clear but a steady improvement in housing would be exactly what the doctor ordered for the country.
How can you tell when his a COE is lying?
His lips are moving.
House pimping in the WSJ - Will 2013 Be the Time for Home Buyers to Jump?
(Jump off a cliff to financial suicide, perhaps)
“This New Year’s, you may want to make a resolution to go house hunting.
Home buyers are finally starting to recover, but they’re still low enough to get a great deal. Add to that interest rates are at historic lows, and 2013 may be the time for first time buyers to finally get in the game.
A bevy of data suggest housing prices have finally begun to climb back. So there’s a window of opportunity before prices start a faster upward march.”
The same old lying Realtor® lies from 2005 are lies in 2012 and will be lies in 2013.
“The same old lying Realtor® lies from 2005 are lies in 2012 and will be lies in 2013.”
But not to worry. They’re cementing their reputation as liars.
Because more debt is the path to Recovery®
Bloomberg - Home Equity Loans Make Comeback Fueling U.S. Spending:
“Home equity lines of credit that fueled a spending spree during the U.S. property boom are back.
After six years of declines, lending for so called HELOC’s will rise 30 percent to $79.6 billion in 2012, the highest level since the start of the financial crisis in 2008, according to the economics research unit of Moody’s Corp. Originations next year will jump another 31 percent to $104 billion, it projected.”
$104 billion buys a lot of meals at Applebee’s, better go get in line for a table now.
As I said last week, it is the only way to sustain a consumer based economy with no wage growth.
with no wage growth.
How do we get wage growth?
New York Times piece on housing for Lucky Duckies - Mortgages - Factoring In Commuting Costs:
“Mortgage lenders do not figure in a household’s likely commuting costs when weighing loan applications, but a recent study suggests that borrowers of moderate means would be smart to calculate these costs themselves before buying (thank you Captain Obvious).
The study … looked at transportation and housing costs in the 25 largest metropolitan areas. It found that transportation costs rose faster than incomes in every area over the last decade (fortunately “volatile” energy costs are excluded from lying liar core CPI inflation).
That has added to the financial burden shouldered by moderate income homeowners, defined as households earning 50 to 100 percent of a metropolitan area’s median income. Transportation consumes 30 percent of their income, on average. Add housing costs to that and the combined cost burden rises to 72 percent.
The study also found that some metropolitan areas generally considered more affordable than New York became less so after transportation is figured in. For example in Houston, where housing development is more sprawling, transportation consumes 32 percent of income, compared with 22 percent in New York, which has a more robust transit system.
Mortgage underwriters sometimes look at a home’s location relative to where the buyer works, but in most cases a long distance between the two is only an issue if it suggests that the buyer isn’t actually going to live in the house”
30% of income on transportation? I hope to God they mean net income, as opposed to gross. I also hope that includes insurance and routine maintenance, not just car payments, tolls, and gas.
Even then, still way too much.
Even then, still way too much
Again, not everybody in Amerikwa is rich like all of us HBB’ers.
The majority of the Lucky Duckies are not creating software startup companies, are not Ivy League lawyers, are not overpaid government contractors.
The majority of Amerikwa are poor or working poor. After thirty years of trickle down and outsourcing, the future belongs to Lucky Ducky.
The study also found that some metropolitan areas generally considered more affordable than New York became less so after transportation is figured in.
The cost of commuting is major, and something many people do not fully consider.
Everyone chimed in about how much cheaper it would have been to buy in the East Bay, but the cost of commuting would have almost eliminated any savings.
$5.00 a day for the Bay Bridge. Sheesh. Public transit ‘aint cheap, either. $3.50 R/T from Berkeley to San Francisco.
Not to mention the psychological cost of hours of your life spent in traffic. No thank you.
I ran several scenarios based on my own situation. The main conclusion is that the bulk of transport costs come from just owning the car, not from commuting. The only way these lucky duckies could save money on transport is if they could ditch the car entirely and ride a bike for everything.
I rode my bike to work and hauled groceries in a crate-and-bungie for almost 15 years. This is viable only if you’re young, single, rent, and live in either a very small town or a very big town with very good transport. Not a common situation for most.
I rode my bike to work and hauled groceries in a crate-and-bungie for almost 15 years. This is viable only if you’re young, single, rent, and live in either a very small town or a very big town with very good transport. Not a common situation for most.
And that’s the problem. American infrastructure is designed to promote driving, not walking or biking.
The main conclusion is that the bulk of transport costs come from just owning the car, not from commuting.
The cost of owning a car is the bulk of it, but my 2004 Honda has only 62,000 miles on it and has needed nothing except maintenance and tires and brakes in 8 years because I drive less than 10K per year. If I were on the road for 2-3 hours every day I would have worn that car out by now.
In most of Flyover, there is essentially NO public transportation.
A semi decent used car runs $5K…..insurance (liability only) for a 18-21 year old runs $1500/2K a year. A typical drive from school to work is 10 miles each way.
A kid would have to work 875 hours @ $8/hour to pay for a $5K car and insurance, never mind fuel, tags, property tax and maintenance. Hence, the indirect subsididies of the restaurant/minimum wage paying industries by the First National Banks of Mom and Dad.
Want to know why people stay at home, unemployment or not? Because most $8/jobs are a money losing proposition, when costs are calculated.
Would YOU work for a couple of bucks an hour (after expenses)? You would make more money begging/picking up cans.
Our main problem is that the wretched refuse have been brainwashed about having a “work ethic”, and don’t know how to do the math.
San Francisco = commie
Washington DC = commie
A good chunk of owning my car is for insurance. I think I have expensive stuff.
So the plan worked?
Fixer, I got away with biking in a small college town. The grocery store was 1 mile away, the school was 2 miles away, the mall was an all-day operation with the meager bus system. Forget about social life or Home Depot.
Yes, Carl, the plan did work. Corporations get away with having the gov pay some of the living expenses such as food stamps, school lunches, and Section 8. Wal-Mart is famous for this.
And BONUS, making the people think it’s their own fault opens up the door to cut their entitlements too… lazy bums.
30% of income on transportation?
Have you priced new cars, gas and insurance lately? And forget about saving 50% by buying a 2-3 year old car, that doesn’t work anymore. You’ll pay 80% of new price for one of those.
0% financing sometimes makes buying a new car cheaper than a used car.
You can still get some serious depreciation on some luxury models, but on the normal, reliable stuff…no. If I were buying new I’d probably just buy a Honda Civic. I think those things are still getting the benefit of once being cheap, reliable, and an easy transplant with a Prelude motor even all these years later when none of the above may apply. They just don’t depreciate.
But I do look forward to playing with a plug-in hybrid that can power a house someday when they are cheap enough.
One of my cars is a Honda Civic. I don’t own any luxury cars and due to a lot of driving I tend to get a car every three to four years and then give my old one to my girlfriend or her son. They get many years out of them since they are well maintained.
90% of car buyers can’t get 0% loans.
Carl, what you want is a house that powers your car, not the other way around except when required by emergencies.
Most new cars have incredible reliability and gas mileage compared to 15 years ago. Too bad most people can no longer afford even a new economy car and are stuck driving the 15 year old car.
Yes, 30% transport cost are normal these days. Much like 50% shelter costs. For those of you who have never lived in a city without just plain decent public transit, you either own a car or you die. Literally.
Well…yes…but it’s the emergencies that I’m focused on.
Many years in real dollars. The question is, what will the inflation rate be? Inflation seems to be the only way we’ll be getting nominal growth in the price of anything as delveraging continues, and the only way to deleverage without “liquidate, liquidate, liquidate.”
That is why buying a home with your own money is probably a bad idea. However, buying a home with a low fixed rate mortgage might work out quite well with high inflation.
might work out quite well with high inflation
Inflation for prices of food, energy, health care, et cetera? Yes.
Inflation of Lucky Ducky wages? Never.
When inflation accelerates, wages will increase nominally. However, a two percent wage increase does not cover a 4% increase in the cost of living. Of course, even these numbers will be using the government’s inflation numbers where a doubling in the memory of a computing device is counted as the device costing about half the cost, thus hiding the rising costs of the non-essentials like rent, food and energy.
Federal Reserve Crime Syndicate Bankster William Dudley said it well with his “let them eat i-pads” comment.
There is no “hiding the rising costs” for Lucky Ducky. The majority of Amerikwa are poor or working poor. Go visit Wal-Mart at midnight on the first of the month (when SNAP cards get reloaded by Uncle Sugar) to see the reality of this.
The recoveryless recovery is here.
Go visit Wal-Mart at midnight on the first of the month (when SNAP cards get reloaded by Uncle Sugar)
Here in the Centennial state they stagger the recharge day to the day of the month matching the last digit of your SS # (on the 10th if it’s 0)
“When inflation accelerates, wages will increase nominally.”
They didn’t for the last 30 years. What’s different now?
You can use this to calculate and trend.
“buying a home with a low fixed rate mortgage might work out quite well…”
The expectation that going into debt to buy assets will enrich you is the foundation of the housing bubble.
It is also the reason that major players are starting to buy houses and renting them out. These players are tapping into 1% money to finance these transactions. Your government is waging a war against savers and for debtors. The premise of the housing bears is that housing prices can resist this force, I do not and have not for the last three years believed that housing prices can fall meaningfully under that circumstance and now I cannot see how they cannot rise in nominal terms. If people had their mortgages in gold, I would find it is still a stupid time to buy, but in U.S. fiat currency it is not.
Elections have consequences and BB was given more paper and ink due to the results.
These players are tapping into 1% money to finance these transactions
Wed Oct 17, 2012 3:39pm EDT
* U.S. two-year swap spread near record tight
* Cheap rates boost company borrowing, not hiring
* Three-month Libor falls to lowest since Aug 2011
By Richard Leong
NEW YORK, Oct 17 (Reuters) - Private U.S. borrowing costs neared record lows on Tuesday in a market awash with Federal Reserve cash aimed at pinning short-term interest rates near zero.
Hope that Europe would contain its debt crisis also helped push down the benchmark rates, at which top-notch banks and companies can borrow short-term dollars, to levels last seen in the 1990s.
The bottom line is the big boys can borrow almost as cheaply as the U.S. and you have to go out to around the seven year bond to get to over 1% interest. Not hard to make a deal work with that type of deal. Not exactly apples to apples but the prime rate in April 18, 1980 was 19.5%, hard to make money in real estate with short term money back then.
Not sure if posts are real slow today or I have exceeded my allowable posts but I will try one more.
The stock market collapse primarily impacted the rich. It is ironic that many on this board are concerned with the concentration of wealth but cannot see that if the free market would have been allowed to work, a great deal of this concentration would have been eliminated. The masters of the universe over leverage themselves. Without a government bailout they would have had to go bankrupt with no possibility of recovering their wealth. We were sold that the only way out of this mess, was to adopt policies of printing money and large deficits which shifted the burden from the rich to the middle class both in the immediate term and in the future. Without the easy money the stock market would not have recovered quickly but gasoline and other prices would not have gone up either. Savers would have gotten a high return on their money since money would have been scarce as debt was extinguished by bankruptcy. People waiting to buy a house at a reasonable, in fact bargain price, would have gotten their chance. Yes, people would have suffered that were not rich but they would have been primarily people that voluntarily took on too much debt.
The nation would have learned a valuable lesson about saving vs. acquiring debt. While unemployment would have increased more initially, by now we would have been back to where we are without the private and governmental debt. Obama’s policies have served the wealthy well. Whether that is by design or accident, I do not know. However, the concentration of wealth has been accelerated not reduced under his watch and that is the bottom line.
Which part of “end of the world” don’t you understand?
End of the world for whom? The masters of the universe on Wall Street? Wouldn’t it be terrible if this country had to rely on making things instead of printing money which enriches the top first and then what is left trickles down to the rest of society. If it was the end of the world the recession would not have ended in June 2009.
To a paraphrase one of the first multinational bankers, allow me to control the money supply and I do not care who runs the government.
I agree…just being sarcastic.
The “free market” (i.e. lack of banking regs and oversight and gelding of federal oversight agencies) CAUSED the concentration.
We don’t see the “free market” as solving anything because some of us have been around for more than a few decades and have seen the process FIRST HAND.
“Free market” means one thing and one thing only. Free to eff you up the butt without consequence.
However, buying a home with a low fixed rate mortgage might work out quite well with high inflation.
What he said.
how many more years we should expect housing to keep “bouncing along the bottom”?
About 4 more. 2016 will be the bottom. Stock market too.
2036 sounds more realistic. Japan has been in “recovery” for 20+ years now.
Cycles, goonie. Cycles.
I’m not saying RE or stock prices will have ‘recovered’ by 2016. Only that they will have bottomed.
Consider the possibility that the downhill slope may bear some symmetry with the preceding rise. 2016 may be a bit short of the trajectory.
downhill slope may bear some symmetry with the preceding rise.
I bet you think everything since the New Deal is smoke and mirrors.
Ha, the New Deal, biggest smoke and mirrors ever!
It also has essentially closed borders. When population is declining it is much easier to have declining housing prices. The illegals may not being given mortgages as easily as they were during the bubble but they can put ten people into a rental. I would not want to buy that house after that occurs but with carrying costs low enough you can rent it and then bulldoze it later on. Particularly where it is the land and not the house that has the real value.
How many additional lives do dead cats have?
Bernanke’s Bazooka: Open-Ended QE3 Is ‘Very Aggressive,’ Says da Costa
By Stacy Curtin | Daily Ticker – Thu, Sep 13, 2012 1:33 PM EDT
Ben Bernanke brought the monetary bazooka Thursday when the Federal Reserve’s policy-making committee announced it was taking action to further dampen interest rates with its third round of quantitative easing. This time, the QE will take the form of purchasing $40 billion in mortgage-backed securities a month until the labor market improves (i.e. indefinitiely).
“If the outlook for the labor market does not improve substantially, the committee will continue its purchase of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability,” the FOMC statement said.
While another round of QE was highly anticipated by most economists, the structure of the new asset purchase program wasn’t known.
The open-ended nature of this round of QE is a “very aggressive move,” says Reuters reporter Pedro Nicolaci da Costa, who joined The Daily Ticker’s Henry Blodget to discuss the statement ahead of Ben Bernanke’s press conference scheduled for 2:15 p.m. ET.
The Fed also pledged to keep Operation Twist in effect through year-end and to keep interest rates low through mid-2015, months longer than the central bank had previously indicated.
Now that the Fed has spoken, the big debate remains over how successful its initiatives will be in jump-starting the economy.
“We’re not sure what the economic effects of this program will be — it should help growth and employment on the margin — but of all the announcements the Fed could have made today, this is very nearly one of the most accomodative that could have been reasonably expected,” writes BTIG’s chief economist Dan Greenhaus in an e-mail note.
Since each new asset program has delivered diminishing returns, many economists and analysts believe QE3 will follow suit with reduced efficacy.
Broken window stimulus on the way in “Superstorm” Sandy’s aftermath:
Sandy’s aftermath: Awaiting the economic storm surge
Reconstruction and related spending in the Northeast could total $240 billion.
By JEFF KEARNS, SUSANNA PAK and NOAH BUHAYAR Bloomberg News
John Cataneo is working his 20 employees overtime and still can’t keep up with demand from customers who need plumbing repaired after superstorm Sandy. He says he’s hired two new workers and may need more.
Ray Marten poses by his destroyed home in Queens, N.Y., which burned when Sandy hit the area. Rebuilding is expected to provide the region a huge economic boost.
“We’re just not getting to some people that are asking for help,” said Cataneo, co-owner of Gateway Plumbing & Heating in Manhattan. “But we’re doing the best we can.”
Cataneo’s experience shows how the storm is giving the Northeast — and the rest of the country — an economic boost that may eventually surpass the loss of business it caused. Reconstruction and related purchases and hiring may range from $140 billion to $240 billion and increase U.S. economic growth by 0.5 percentage point next year, assuming $50 billion in losses, according to Economic Outlook Group a Princeton, N.J.-based forecasting firm.
“Construction costs to rebuild all that was lost will be more than simply replacement because a lot of the work will also involve fortifying structures,” said Bernard Baumohl, chief global economist at Economic Outlook. “We’ll see construction ramped up, and that’s going to bring in jobs and an increase in demand for material of all sorts, and that’s going to further stimulate the economy.”
Estimates of insured damage caused by Sandy range from $7 billion to $25 billion. When lost wages and sales are added, the total comes $50 billion, according to Oakland, Calif.-based catastrophe risk modeler Equecat Inc. — a figure that may be recouped next year as repair and reconstruction efforts spur new building and sales of household goods.
Sandy may reduce economic growth by 0.25 percent to 0.5 percent in the fourth quarter after it disrupted industrial production, retail sales and employment, according to economists at Goldman Sachs. Most of the reconstruction will take place in the first quarter of 2013, adding as much as half a point to growth, according to a Nov. 21 note to clients.
It is a BIG maybe.
Insurance doesn’t cover everything. Many of those with good insurance will be paying out of their own pocket for some of what they lost. That is money that won’t be spent on other things.
Many people had NO FLOOD insurance at all. When was the last time a hurricane hit NJ/NY/CT and caused major flooding even miles inland?
They are hoping for a miracle or FEMA money from the sky.
I could see insurance premiums skyrocket after Sandy. (just like in Florida). Many may become leery of buying “shore properties.” Maybe TARP and the stimulus part II finally die. Maybe then the insane housing bubble in the NE finally dies.
Today’s local news is about how some homeowners in Jersey are getting the shaft over the difference between “hurricane” and “flood” insurance. I’m sure some people from Louisiana and Mississippi can give them a quick education.
How insurance adjusters can tell the difference between floodwater coming in thru a blown off roof, and water that came in via storm surge, or torrential rain, is beyond me.
Simply bringing up the subject is going to reduce the amount they pay on claims.
America’s new business paradigm. Not reinventing the wheel. Not developing a better or improved product.
No, you make it by using legalese to put the screws to your customers.
My last cellphone contract had more paperwork than my first car purchase. And it was all designed to limit my options if I got lousy service, or to make it easier for them to extract money from me.
“America’s new business paradigm. Not reinventing the wheel. Not developing a better or improved product.
No, you make it by using legalese to put the screws to your customers.”
There nothing new about this.
The only thing new is it being not only allowed, but codified by law as ethical and heavily promoted by people who call it “free market”.
November 26th, 2012 05:00 AM ET
1 minute ago
CNN Poll: Two-thirds say fiscal cliff poses major problem
CNN Political Unit
Washington (CNN) - A new national poll suggests Americans understand that the “fiscal cliff” is no joking matter.
Two-thirds of people questioned in a CNN/ORC International survey say that the U.S. would face a crisis or major problems if the country went off the “fiscal cliff” at the end of the year, and if that happened, Republicans in Congress would probably receive the greater share of the blame.
The poll also indicates that more than seven in ten Americans call for compromise on this issue, but they are pessimistic about that actually happening, with two-thirds predicting that Washington officials will act like “spoiled children,” not “responsible adults,” in the upcoming negotiations.
Sounds like the American public has figured it out. Too bad we’ve got such a bunch of gerrymandered, legally bribed knuckleheads in Congress who won’t execute our will.
Is it a certainty the economy will go over the fiscal cliff if no agreement can be reached in the next five weeks, or does the option remain to simply punt on reaching an agreement until the point in 2013 when negotiations resume?
More generally, can the negotiating parties keep punting again and again, as predictably recurs in the Eurozone debt talks?
November 25, 2012, 1:21 p.m. ET
Talks Over Fiscal Cliff Stay Stuck in Low Gear
By JANET HOOK And DAMIAN PALETTA
Congressional leaders return to Washington this week facing the prospect that talks with the White House over the country’s budget impasse have barely progressed, a reminder of the philosophical divisions that remain despite both sides’ early professions of optimism.
In a sign of the slow pace, a senior administration official said President Barack Obama and congressional leaders aren’t expected to reconvene this week, in order to give their staff more time to work through differences. The aide said Mr. Obama could instead hit the road this week to mobilize public support for his proposal to raise taxes on upper-income earners.
Inconclusive talks among high-level aides have done more to define the differences between the two parties than bridge them, according to people in both parties. Republican leaders have agreed to boost tax revenue by capping deductions rather than raising rates. And senior Democrats have agreed to modest changes to programs such as Medicare. Each side has resisted ceding too much ground and views their adversaries’ concessions as inadequate.
With each passing day, the government moves closer to the “fiscal cliff,” the combination of $500 billion in tax increases and spending cuts that begin in January, and if not averted, economists have warned, could tip the country back into a recession.
One veteran Democratic aide said he wasn’t surprised major concessions hadn’t been made, given that real deal making usually happens at the last minute, which the aide put at “two weeks away.”
Republicans are trying to coax Democrats to agree to larger cuts in entitlements, in part by portraying their own concessions on taxes as a big retreat from past anti-tax pledges. “Elections do have consequences,” said Rep. Jeb Hensarling of Texas, a member of the House GOP leadership. “The bottom line is the president is getting his revenues. We can negotiate how much; we can minimize the damage to the economy.”
Democrats, meanwhile, don’t want to concede too much on entitlement programs before figuring out what will become of the current top income-tax rates, which they would like to raise.
When Mr. Obama and congressional leaders last met Nov. 16, they agreed to meet the week following Thanksgiving to gauge progress. No follow-up meeting has yet been scheduled, and financial markets have remained jittery, worried that brinkmanship will take hold.
Both sides are eyeing a framework that would include some initial deficit-reduction measures by the end of this year and more substantive changes to the tax code and entitlement programs like Medicare and Medicaid in 2013. The biggest stumbling block: The White House wants to allow the Bush-era tax cuts for wealthier Americans to expire, and most Republicans don’t.
Bring it. Are we cutting, or are we not?
Right. Bring it on. The rich will pay more in taxes. And there will be at least some benefit cuts for todays’ seniors, not just tomorrows.
We may have a recession, and we may suffer for it, but that’s baked in. Escaping the “fiscal cliff” means exempting the powerful from the sacrifices needed to get out of this mess.
We may have a recession, and we may suffer for it, but that’s baked in.
My only concern in this case is the “too much spending” complainers then complaining about the economy getting worse. Duh! The economy HAS to get worse before anything gets better, as the excesses are finally wrung out. Too bad. So sad.
Bailouts are coming.
Bulletin European stocks weaken as euro-zone finance ministers debate Greece
Nov. 26, 2012, 8:48 a.m. EST
Greece, fiscal cliff weigh on U.S. stock futures
Yahoo and Facebook both get upgrades from analysts
By Kate Gibson and Barbara Kollmeyer, MarketWatch
NEW YORK (MarketWatch) — U.S. stock futures fell Monday as U.S. lawmakers readied to resume efforts at reaching a deal to avert the so-called fiscal cliff and euro-zone finance ministers considered Greek aid.
“On the most pressing issue for the markets into year end, that of the tax and spending issues in the U.S., the Sunday morning talk shows didn’t reveal that we’re on the cusp of a deal as more horse trading will go on in the weeks to come,” Peter Boockvar, an equity strategist at Miller Tabak, wrote in a research note.
Futures for the Dow Jones Industrial Average fell 42 points, or 0.3%, to 12,919, while those for the Standard & Poor’s 500 index shed 5.6 points, or 0.4%, to 1,399.7.
Futures for the Nasdaq 100 index dropped 5.5 points, or 0.2%, to 2,628.75.
The post-Thanksgiving Dow industrials post a triple-digit rise, led by rebounds from a trio of tech stocks, in an abbreviated session.
“We could see U.S. markets start positively, but they’re a bit nervous about Greece,” said Henrik Drusebjerg, senior strategist at Nordea Bank. He said prospects for a so-called Santa Claus rally lie in the hands of global politicians.
The price of oil declined as a truce between Israel and Hamas reportedly held in the Gaza Strip, with crude futures for January delivery off 43 cents at $87.85 a barrel.
The Dow industrials DJIA rose 1.4% on Friday, marking its first close above 13,000 since Election Day on Nov. 6. The blue-chip benchmark netted a 3.4% weekly gain, as the Standard & Poor’s 500 index rose 3.6%.
“U.S. stock futures fell Monday as U.S. lawmakers readied to resume efforts at reaching a deal to avert the so-called fiscal cliff and euro-zone finance ministers considered Greek aid.”
Hey buddy, can ya spare €100 billion?
Greek debt jubilee coming soon?
Nov. 23, 2012, 4:01 a.m. EST
Your tax money is about to be blown in Greece
Commentary: Debt forgiveness is the only way out of this mess
By Matthew Lynn
LONDON (MarketWatch) — How much has the Greek crisis cost taxpayers in the rest of the world so far? A billion? Fifty billion? A trillion? Actually, the answer is nothing.
For all the drama, panics in the markets, and late night crisis summits, the whole saga has yet to cost a bean. Indeed some countries — such as Germany — have actually made a profit out of it.
Greece and the rest of the bankrupt peripheral countries have been propped up with loans, guarantees and all kinds of fancy sounding schemes. But not much in the way of hard cash has been spent.
European Union leaders are headed to Brussels for a big showdown over the bloc’s spending budget. Learn what they are arguing over and the many flashpoints in the negotiating process.
The International Monetary Fund and euro-zone governments have stepped in with support programs. But although private bond-holders had a ‘haircut’ imposed on them in the last bail-out, the fiction has been maintained that all the taxpayer support for Greece will be re-paid.
That is about to change.
Debt forgiveness = somebody’s money goes poof.
Poof = shrink, contract, less - whatever you want to call it.
If you are on the right side of this poofiness then you are smart, lucky - whatever.
If you are on the on the wrong side of this poofiness then you are hosed. And you may be on the wrong side but not know it.
If a pension, for example, holds a lot of debt that it on the wrong side of and this debt poofs then a part of the pensions assets also poof. And if the pension assets poof then the scheduled payouts will diminish, maybe even vanish. Thus a pensioner may have a passing interest in what goes on with debt forgiveness (or defaults, or bankruptcies), or no interest at all because IT DOES NOT CONCERN HIM while actually IT DOES.
Isn’t ‘debt forgiveness’ a euphemism for ‘default’?
Call it what you want. If you are owed money because it was borrowed from you or owed money because it was promised to you and you do not get this owed/promised money then you are hosed.
Thank God no. The biggest bubble since Tulips is no place to be.
Default is a technical term for whenever the amount scheduled to be paid is not paid according to the required schedule.
If you want to bring the emotional stuff into the picture, default is when you stop paying without 100% agreement from the people who are supposed to be paid and debt forgiveness is when the people who are supposed to be paid do agree to not getting paid.
You have to figure out if you are in the emotionally laden definition or the technical accounting definition by the context.
“Debt forgiveness = somebody’s money goes poof.”
Depression = your own money goes poof.
Unless you have a public pension.
Taxpayers and ever rising property taxes will make up ANY losses in the market.
It is only fair.
Chris Christie goes commie:
“It’s got to be paid for,” he said. “There’s no magic money tree.”
“Granny pods” arrive on the market - WaPo
Viola Baez wouldn’t budge.
Her daughter’s family had just invested about $125,000 in a new kind of home for her, a high-tech cottage that might revolutionize the way Americans care for their aging relatives. But Viola wouldn’t even step inside.
She told her family she would rather continue living in the family’s dining room than move into the shed-size dwelling that had been lowered by crane into the back yard of their Fairfax County home.
Then the air conditioner blew. As temperatures and tempers soared in the main house, Viola’s family coaxed her into the cottage to cool off. Viola stayed the night, then another, and another, until summer had turned to fall.
As the first private inhabitant of a MedCottage, Viola is a reluctant pioneer in the search for alternatives to nursing homes for aging Americans.
The MedCottage, designed by a Blacksburg company with help from Virginia Tech, is essentially a portable hospital room. Virginia state law, which recognized the dwellings a few years ago, classifies them as “temporary family health-care structures.” But many simply know them as “granny pods,” and they have arrived on the market as the nation prepares for a wave of graying baby boomers to retire.
Might be an investment opportunity for someone.
Did someone check to see if the AC really blew or if they shut it off for a few days to get granny and her hospital bed and all her medical monitoring equipment out of the dining room and into her pod?
$125K????? You gotta be kidding.
Who put the grannies out??
This is why pre-fab will never take off. A process that is supposed to lower cost, doesn’t.
Why? My best guess, based on years of research, is greed, not the manufacturing process itself.
It may lower the cost. It just doesn’t lower the price. Not until the pre-fabs are competing against each other instead of stuff that is built in place. Plenty of areas of Fairfax County have yards large enough for a small studio to be built in the backyard.
I expect that part of this business model is that the company buys it back after granny dies (for a lot less than you paid), updates the embedded equipment and sells to the next person.
Bloomberg - UnitedHealth Forecasts Profit Below Analysts Estimates:
“UnitedHealth Group Inc, the biggest U.S. health insurer, provided a forecast for profit next year that was below analyst estimates as the company prepares for a poor business environment and reductions in government revenue.
Earnings in 2013 will be $5.25 to $5.50 a share, while revenue will be $123 billion to $124 billion, the Minnetonka, Minnesota based company said today in a filing with the SEC. Analysts anticipated $5.58 a share and $119.4 billion, based on the averages compiled by Bloomberg.”
Unrelated useless factoid, per the CIA World Factbook, 2011 GDP for the entire nation of Vietnam (population 88 million) is $122.7 billion.
What is the limit to “American Exceptionalism”, when we spend 20% of GDP on health care? 25%? 33%?
More medical news from the Washington Post - Professional Pill Pushers Pimp Their Pills:
Conflict of interest has been PROVEN for decades.
New York Times article about flyover - With Ban on Drilling Practice, Town Lands in Thick of Dispute:
“Longmont, CO — This old farming town near the base of the Rocky Mountains has long been considered a conservative next door neighbor to the ultraliberal college town of Boulder, a place bisected by the railroad and where middle class families found a living at the vegetable cannery, sugar mill and Butterball turkey plant.
But this month, Longmont became the first town in Colorado to outlaw hydraulic fracturing, the oil drilling practice commonly known as fracking. The ban has propelled Longmont to the fiercely contested forefront of the nation’s antifracking movement, inspiring other cities to push for similar prohibitions.
But it has also set the city on a collision course with oil companies and the state of Colorado.
Gov. John W. Hickenlooper, a Democrat, has warned Longmont residents that the ban is likely to mean a lawsuit from the state, which insists that onlyit has the authority to regulate drilling.
The ban does not outlaw all drilling, only the specific practice of hydraulic fracturing within the city limits, as well as the storage and disposal of waste created by the process.
The Colorado Oil and Gas Association, the main lobbying group for the energy industry here, criticized the ban as confrontational and encroaching on the private property of companies that have rights to oil and gas buried deep beneath Longmont’s streets, parks and reservoirs.
Supporters of the ban call it a “citizen uprising” against a rush of drilling that has spread like brush fire through towns across the plains of northern Colorado.”
and Butterball turkey plant
It was closed and everyone was laid off.
Longmont does have some high tech, but not many good paying jobs for non STEM types.
That’s where I’m working. I’d probably move here if my son didn’t like his school so much. I miss walking to work.
Smart move. Most fracking destroys everything it touches.
Longmont became the first town in Colorado to outlaw hydraulic
Okay then, no new hotels or housing for you….
What’s the law say about fracting under a town, or under anywhere else? Is there anything like mineral rights issue involved? Anyone know?
In terms of the estates, the mineral estate is the dominate estate over the surface estate. So if you own a house and land but not the mineral estate, the person that owns the mineral estate can drill whether you like it or not. In terms the ability of the town to create fracking rules, usually state law will preempt local law and the state and not the town will decide on drilling. I would have to look at Colorado state law but I would be very surprised if they would allow a town to regulate oil and gas production a historical state agency function.
MarketWatch - Will I be able to retire?
(to the half of this country’s workforce who make less than $500/week, NO!)
“The sad truth is that most people have no idea if they are saving and planning sufficiently and correctly for a fully funded retirement. Their idea of “retirement readiness” is pretty abstract, most probably represented by a magic number, some accumulated dollar amount that unlocks the main gate to the happy land of retirement security.”
MarketWatch - Health-care bill in retirement: $240,000:
“Fidelity Investments, which oversees some 12 million 401(k) accounts, has seen a bellwether in setting expectations on this topic. This spring, for example, it released a study saying that the average 65 year old couple retiring in 2012 would need to have saved up to $240,000 to pay for out of pocket health care costs in retirement … Fidelity has found the rate of health care inflation to average 6% per year; assuming that rate stayed constant, a 2022 retiree would need about $430,000 set aside.”
Note that average 401(k) balance in Amerikwa reported as of end of Q3 2012 is $75,900.
The future belongs to Lucky Ducky.
I have seen people being urged to “invest” their 401Ks in real estate.
I can’t say I know anyone who’s been able to save up $240k just to pay for out of pocket health care costs.
You can pull your cardboard box next to mine.
We can go half-sies on the Metamucil.
Health care is commie.
Real American rugged individualists die prematurely from easily treatable conditions.
So said an HBB poster who “would rather have 60 years of freedom than 80 years of tyranny.”
“Real American rugged individualists die prematurely from easily treatable conditions.”
Every year going out in a blaze of glory is starting to sound more and more desirable than slowly deteriorating. I’ve been thinking. Might be good to push myself in some crazy sport event until the ticker pops. I’ve heard cancer, alzheimer’s and some of the other alternatives really, really suck. So the massive heart attack that takes you out in minutes is starting to shake out as my death of choice. Then the kids can just share the paid off house.
Why should the medical community get it all?
We’ve got the $240K. It’s all the extra money we have received as a result of the Bush and Reagan tax cuts, plus interest.
Trouble is, we’re just under the magic age 55 mark to be pandered to or screwed. So what they gave us they will take away double, and then take double that from our kids.
I saw that coming. Not many in Generation Apathy, which followed Generation Greed, caught on, however.
A visit to DC for FotoWeek next year is very doable. My work schedule tends to be less flexible in November than in the spring, but you would be very busy with the activities they have planned, so you probably wouldn’t need quite as much tour guiding as I had originally thought. My place is VERY convinient to public transportation.
I saw the desert photos exhibition at National Geographic Explorer’s Hall that was part of FotoWeek this year. Absolutely stunning.
“This spring, for example, it released a study saying that the average 65 year old couple retiring in 2012 would need to have saved up to $240,000 to pay for out of pocket health care costs in retirement.”
Anyone with the income to save $240,000 ($480K per couple) for old age health care will be means tested out of Medicare. Thereby increasing the out of pocket health care to more than they have.
Are you confusing medicare with medicaid or assuming means testing in the future?
will be means tested out of Medicare ??
Means testing is coming although I think there will be huge AARP push-back…If it comes in the form of a larger deductible for some then that makes sense to me…
If the idea is to means test people completely out based on some metric like having $400,000. then Houston we have a problem….
If they add means testing to Medicare, it’s going to hurt the middle class the most. The upper middle class will avail themselves of ways to get around the asset/income checks. There will be loopholes, people will be able to put assets into trusts, put them into childrens’ names, etc. The rich won’t be affected nearly as much because they’ll just buy private insurance–even 10k/yr premiums and 20% coinsurance won’t bother the truly rich.
I want to have a child (just 1) but even if I didn’t, I think having a child would pay big dividends simply for moving around assets in income in the latter parts of our careers. I want my child to have a lot of assets/cash… in the Jersey Islands.
You give lawyers a bad name. Grow up and develop some ethics. You seem to have missed it somewhere along the way.
We had a Presidential candidate who did far worse than anything I contemplate. And justified it by pointing out what a large amount of taxes he paid, despite the low rate. He received 48% of the vote and his virtues were extolled by all the “bootstrapper” cheerleaders around our fair nation.
For the record, I wish our government would clamp down on everyone and make people decide whether they want to be American or not–if not, go become a citizen of the Caymans. I wish the Buffett rule (or some variation) was the law of the land. However, if the government can’t act like they’re serious about taxation, I don’t think I’ll have ethical qualms about whether I should set aside money for my child using the Mitt Romney Gameplan (TM).
Also, what does being a lawyer have to do with it. BiLA and Northeasterner make similar claims about avoiding/hating taxes. Is it OK for them to make these arguments because they are “bootstrappers” but not OK for me to take the same approach?
because they are “bootstrappers”
BiLA is exactly the kind of bootstrapping, rugged individualist, invisible hand of the free market, Horatio Alger, for profit, private sector, government contractor that we aspire to become someday.
And to bill Uncle Sugar at Bill’s hourly rates
Is it OK for them to make these arguments because they are “bootstrappers” but not OK for me to take the same approach?
They get slammed too, especially BiLA.
You won’t have anywhere near enough money to pull off the Romney game plan. Seriously, Joe. If you think you can, then you simply don’t have any idea what he actually did.
By law (securities), you have to have $1.5 million of liquid assets before the hedge funds can even let you read their information. You need a heck of a lot more than that for them to take you seriously. And then, guess what? If you have control over an investment account (or even an insurance policy with cash value) of more than $10,000 that is located outside the US, you have to disclose it to the Treasury Department. Every year. Which means you have to pay taxes on the realized gains. And disclose it on financial aid forms. And all that this implies. Welcome to FinCEN.gov.
“I want my child to have a lot of assets/cash… in the Jersey Islands.”
-1 Kids do better in life if one kicks ‘em off the branch empty handed to see if they can fly on their own for a while. Once they’re soaring the parent’s gifts are better appreciated and yield better results.
The truly rich don’t need no stinking insurance. They pay cash for whatever they want.
Seriously, I met an Amish farmer once who paid cash for his heart transplant and for all his followup care. That was 20 years ago. I doubt Amish incomes have kept up that well with rising health costs.
“The truly rich don’t need no stinking insurance. They pay cash for whatever they want.”
No they don’t. They buy on credit and then stiff the creditor.
And that’s NO exaggeration.
“No they don’t. They buy on credit and then stiff the creditor. And that’s NO exaggeration.”
Just a bit of uninformed hyperbole smoke. Generalizations are almost always not… well general.
7 TRILLION dollars to bail out Wall St. is not what most people would call “hyperbole”.
‘7 TRILLION dollars to bail out Wall St’
Link to data please.
“They buy on credit and then stiff the creditor.”
I heard a talk today by a polymath academic who served on a team with top U.S. financial policymakers to develop models of financial collapse, in the wake of the 2008 episode. I asked him whether the models they developed considered bailouts and associated moral hazard issues. He looked at me like I was from Mars.
4.6 TRILLION. More or less direct
Googled “total wall street bailout cost”
12.8 TRILLION “According to a team at Bloomberg News, at one point last year the U.S. had lent, spent or guaranteed as much as $12.8 trillion to rescue the economy”
14 TRILLION overall.
9 TRILLION in emergency overnight, super-low interest loans.
Googled “total government bailout spending”
9 TRILLION in gov direct investment
I’ve tried to use the more mainstream and more or less conservative references as the more “fringe” sources say 20+ TRILLION.
Best Black Friday ever! The U.S. economy is saved!!!
Retailers hail holiday shopping weekend as best ever
8:39 AM, November 26, 2012
Shoppers rush to grab electric griddles and slow cookers, on sale for $8, shortly after the doors opened Friday at a J.C. Penney in Las Vegas.
The biggest holiday shopping weekend of the season still has one day left, but retailers can already consider it their best yet.
More shoppers came out Thanksgiving night, more shoppers hit stores on Black Friday, more shopped online and everyone spent more. The result: more than $59 billion in estimated sales from Thursday through Sunday, according to a BIGInsight survey conducted for the National Retail Federation.
That’s up from $52.4 billion last year. And all signs point to a huge Cyber Monday, as more consumers turned to their computers or mobile devices to shop during the weekend.
Yes, $6.6 billion in a $15 trillion economy will make all the difference. Even to get that the big boxes had to open up on Thanksgiving, no added costs to those sales.
Black Friday is a bunch of meaningless hype, in one chart
Posted by Neil Irwin on November 23, 2012
Tease (But go to the link so you can see the chart and read the rest of the analysis):
Black Friday is here, and if you happen to derive pleasure from streaming around big box stores or mega malls as part of a teeming horde, well, who am I to judge another person’s sources of enjoyment.
Let’s just not pretend that it means anything.
When television news crews and newspaper writers go to cover the holiday crowds, they try to give the festivities some great economic import. Standard aspects of the genre include noting that holiday sales can account for about a third of retailers’ annual sales; cite authoritative-sounding projections from the National Retail Federation about what this year’s sales will be, and perhaps even note that consumer spending accounts for 70 percent of the U.S. economy (conveniently leaving out that most of that spending has nothing to do with gift-giving or holiday cheer).
In fact, sales over Thanksgiving weekend tell us virtually nothing about retail sales for the full holiday season—let alone anything meaningful about the economy as a whole. Paul Dales of Capital Economics analyzed the relationship between retail sales during the week of Thanksgiving against the overall change in retail sales for November through January. As the chart shows, the relationship is a very weak one, with dots all over the grid. But if there is any conclusion to draw at all, the relationship is actually negative! (That’s why the line is sloping downward).
At the risk of making a few heads explode ;), I present this link. In addition to major coastal flooding, the report predicts that effects of ocean acidification will be devastating to much of the planet’s population.
We hope global warming happens and is much worse than the doomiest doomster predictions. Infinite growth within a finite ecosystem is not possible. The humanoid species is a cancer to this planet.
Yes, but too bad that a lot of other species will go down along with us.
The real “victims” of global warming:
There used to be rain forests and crocodiles in Alaska.
NYC was once covered under 1 mile of ice.
What is your point? The Housing market may suffer?
So what if global warming is not real or is not caused by human activity?
Would it really be such a bad thing if we took the steps to 1) end our dependence on foreign oil 2) switch to non-polluting renewables 3) learn to use less oil, etc. etc.
Maybe we oughtta do all those things anyway, global warming aside.
More commie talk from the land of fruits and nuts.
Yeah, I guess most people would just as well live in treeless, cemented-over housing developments and drive 3 hours to work on clogged highways while their tax dollars pay to support foreign wars that keep the black stuff flowing.
Those crazy fruits and nuts, wacky people like me who worry that my grandchildren might not ever be able to swim in the ocean because it’s too polluted…
I think he was being sarcastic.
I love how all these years, the drill-drill-drill crowd was lobbying for “energy independence”.
Now, it seems that most of this increased production we are seeing is going to be exported to China, at market rates.
Of course when the costs of dealing will polluted aquifers hits the fan, we’ll hear whining about “over-regulation”, and demands that the costs be paid/passed down to Joe Q Taxpayer.
“Those crazy fruits and nuts,…”
The crazy fruits and nuts people love sitting in horrendous freeway traffic, where their cars blow more greenhouse gasses per mile driven into the atmosphere than almost anywhere else on the planet…
At what cost? Laying off miners, increasing electric rates how much? When California started its green policies, it shutdown a coal plant in Nevada. That was partially supplied by coal from the Hopi reservation in Arizona. The tribe had to make devastating cuts to people that live in abject poverty. A tribe in Montana had its coal to liquids project due to it being shot down for a similar reason.
People act like all the costs of getting the policy wrong are all on the other side but they are not. Even California residents have to endure higher electricity rates and the lost of businesses due to the state’s green policies. Many people can afford this but many of the people that can least afford it pay the highest price. They cannot afford to buy the subsidized solar panels but the poor pay the higher prices for electricity that sometimes make the subsidy possible.
I have no problem with considering pollution when making a decision on how much we should pay for electricity but it should be backed up by real science, not religion posing as science.
We generate 20% of our electricity using windmills in the Centennial state. And I paid 7.9 cents per kwh last month.
Colorado how much of the 80% was coal and what price was paid for that coal power compared to the 20%?
“Even California residents have to endure higher electricity rates and the lost of businesses due to the state’s green policies.”
CA’s biggest problem is PG&P and its lobbyists.
California’s largest energy user is the Department of Water Resources. Water is heavy stuff, and it’s uphill from Tracy all the way south to the top of the Tehachapi mountains. Those penstocks you see while heading south on I-5 at the grapevine are part of a 2,200-ft lift carrying 4,500-cfs. Think power!
The price we pay now is pretty comparable to the pre windmill days.
I agree sf and I’ve said it here before. Getting off the liquified, fermented dinosaurs (or whatever organic matter it is that becomes the oil) is a national security issue and always has been.
Getting off it should have been the primary reaction to 9/11.
“So what if global warming is not real or is not caused by human activity?”
It matters to enviro-extremists, who enjoy self-flagellation over human-caused environmental harm.
Predicting warmer is easy. But until we see some meaningful warming in the combined ocean and land temperatures for the globe, the AGW crowd just has more and more egg on their collective faces. We can’t even get an El Nino to develop.
Here it what it is really about from the same article:
The World Bank doubled lending for climate change adaptation last year and plans to step up efforts to support countries’ initiatives to mitigate carbon emissions and promote inclusive green growth and climate-smart development. Among other measures, the Bank administers the $7.2 billion Climate Investment Funds now operating in 48 countries and leveraging an additional $43 billion in clean investment and climate resilience.
I have not posted numerous articles in the last few weeks about carbon taxes, one of the most regressive taxes ever, and articles suggesting that more money needs to be transferred from the developed world to the developing world. It is a big money racket and an attack on what is left of the U.S. middle class that many do not want to let go despite the models failing by predicting rapid warming when we have been flat for more than 15 years in the average yearly global temperature.
Al Gore is a commie. Global warming is for commies. Toyota Prius is for commies.
The most obvious solution to all of this would be for humanoids to stop breeding.
The globe could easily support a population of 500 million humanoids.
It’s not working out so well with 7 billion eaters. With 10+ billion eaters it will be worse.
Anyone ever study ecology and population dynamics in college? When populations exceed carrying capacity, the population dies off in a J-shaped curve… a big, quick die-off. The big question is what is the sustainable carrying capacity of earth given our continued advancement in technology (in medicine, agriculture, etc.)?
a big, quick die-off
Which could happen from several consecutive years of worldwide crop failures thanks to Al Gore’s global warming. May not happen in our lifetime, but it could in your kids’ lifetime, which matters not to us as we’ll be dead by then.
And we’re no green hypocrite, we burn carbon like there’s no tomorrow, because there is no tomorrow. We will happily burn up your children’s future to drive halfway across the state to ski on some dumb mountain every weekend.
“when we have been flat….”
This doesn’t prove or disprove anything. You can’t dsiprove the global warming thing. I mean you could, but it would take a thousand years, so actually you can’t.
This is exactly why those Climate Scientists are not scientists at all. They are dealing with the unprovable, the untestable. I am thinking that some of them have been exposed to science stuff at least enough to know that what they are doing isn’t science. Yet they insist.
So while we fight over a tax on the “rich” over an increase that at best will raise $50 billion, groups on the “left” and the “right” want to impose a tax of $150 billion which will primarily hit the working and middle class since the poor will get some type of rebate, nice scam:
Global warming talk heats up, revisits carbon tax
November 14, 2012
WASHINGTON (AP) — Climate change is suddenly a hot topic again. The issue is resurfacing in talks about a once radical idea: a possible carbon tax.
On Tuesday, a conservative think tank held discussions about it while a more liberal think tank released a paper on it. And the Congressional Budget Office issued a 19-page report on the different ways to make a carbon tax less burdensome on lower income people.
A carbon tax works by making people pay more for using fossil fuels like coal, oil, and gas that produce heat-trapping carbon dioxide.
The idea was considered so radical that in 2009, when President Barack Obama tried to pass a bill on global warming, that he instead opted for the more moderate approach of capping power plant emissions and trading credits that allowed utilities to pollute more. That idea, after passing the House, stalled in the Senate in 2010 and has been considered dead since.
Even so, the Obama administration has no plans to push for a carbon tax now, said a White House official who spoke on condition of anonymity because there are no discussions about the issue.
The whole issue of climate change was virtually absent during the presidential campaign until Hurricane Sandy hit the East Coast. The devastating superstorm — a rarity for the Northeast — and an election that led to Democratic gains have shoved global warming back into the conversation. So has the hunt for answers to a looming budget crisis.
So the carbon tax idea has been revived by some on both the right and left and is suddenly appearing in newspaper and magazine opinion pieces and in quiet discussions.
“I think the impossible may be moving to the inevitable without ever passing through the probable,” said former Rep. Bob Inglis. The South Carolina Republican lost his seat in 2010 in a primary fight, partly because he acknowledged that global warming exists and needs to be dealt with. Now he heads a new group that advocates a carbon tax and the idea is endorsed by former Ronald Reagan economic adviser Arthur Laffer.
The right-leaning American Enterprise Institute held an all-day discussion of it Tuesday. At the same time, the more liberal Brookings Institution released a “modest carbon tax” proposal that would raise $150 billion a year, with $30 billion annually earmarked for clean energy investments. Brookings senior policy fellow Mark Muro called it a “perfect storm” of science and politics.
The conservative Competitive Enterprise Institute is so concerned about a carbon tax that on Tuesday it filed a lawsuit seeking access to Treasury Department emails discussing the idea.
There’s no question a carbon tax would stir huge opposition. A tax of $20 per ton of carbon dioxide emissions would add up to 9 to 10 percent to the price of gasoline and electric power, said Muro of Brookings.
Experts on all sides of the issue have watched climate proposals fail in the past. Congress is still split and many in the Republican party deny the existence of man-made climate change, despite what scientists say. Congress also on Tuesday blocked the European Union from imposing a tax on American airliners flying to the continent as part of an effort to reduce greenhouse gases.
Energy industry lobbyist Scott Segal said many utilities will fight a carbon tax. “The conditions are far from ripe for a carbon tax, if for no other reason than a carbon tax is a tax on economic growth.”
But environmental advocates are seizing the moment, determined not to let the interest in climate change subside with the floodwaters.
On Wednesday, former Vice President Al Gore launches a 24-hour online talkfest about global warming and disasters. Another group, 350.org, headed by environmental advocate and author Bill McKibben, is in the midst of a 21-city bus tour.
Gore compared the link between extreme weather and “dirty energy” from coal, oil and natural gas to the links between cigarette smoking and lung cancer or the use of steroids and home runs in baseball.
“Mother Nature is speaking very loudly and clearly,” Gore said in a phone interview from San Francisco. “The laws of physics do apply and when we put 90 million tons of global warming pollution into the atmosphere every day, it traps a lot of heat.”
Climate change worries have had a high profile in New York, post-hurricane. Mayor Michael Bloomberg, who had not planned to endorse a presidential candidate, changed his mind after Sandy struck, throwing his support to Obama and citing climate change as an issue.
On Monday, New York Gov. Andrew Cuomo in a news conference said he had seen extreme weather with Hurricane Irene and Tropical Storm Lee in 2011 and now Sandy: “I get it, I’ve seen this movie three times.”
“Climate change is real, it’s here, it’s going to happen again,” he said. “What do we do about it and how do we harden our systems, how do we make sure this doesn’t happen with the fuel system again? How do we make sure it doesn’t happen with the cellphone system? Wanna talk about chaos!”
Gore said he’s been pushing a carbon tax for decades. But his idea is not to use the money to lower the deficit, but to reduce payroll taxes in a revenue-neutral way.
“We should tax what we burn, not what we earn,” he said.
Princeton University climate and political scientist Michael Oppenheimer likes the attention the issue has suddenly gotten, but isn’t optimistic that a solution will be struck.
“Given the paralysis in U.S. politics, I really wonder if we’re up to the challenge,” Oppenheimer said. “And regrettably, it might take more than one Sandy to get people awake.”
If China and India don’t buy in, all this talk about carbon taxes and global warming mediation is pointless.
Yup. There’s 2.5 billion of them and they all want to live like us, and who are we stoopid Amerikans to tell them they can’t?
I read an article yesterday about legal work offshored to India. The law firm profiled pays its lawyers in India a whopping $8000/yr. Those guys and gals won’t be buying Escalades (or cars) anytime soon. HP sends buses to pick up its engineering workforce as if they were school children in Bangalore. Only managers can afford a car.
Yes. I told my law school classmates years ago that they would not be immuned from outsourcing. The same is true for doctors, a lot of procedures do not require direct interaction with the patient. Such as evaluating an x-ray. Also, people travel to India for medical procedures.
China is now the world’s biggest user of coal. And it shows, in their massive pollution problem. Their leaders are actually concerned about the effect of all this toxic airborne crud on the average citizen. China may yet become a leader in green(er) energy.
They are currently the world leader is the manufacturing of solar panels.
“Clean energy” means let the pollution happen over there.
Expensive in terms of life and property for sure. The thing was rated below hurricane when it made landfall. Tropical storm I think is the appropriate term, yet the sheep herders are calling it “superstorm”. Oh, and there is a tax they would like us to pay.
It could be that Bernanke is just that stupid. Or he’s wearing oversized blinders.
He sees jobs and prosperity during the housing bubble and thinks, “What’s not to like?” So he’s pursuing policies to spark another bubble. Greenspan sees jobs and prosperity during the tech bubble and thinks, “What’s not to like?” After its implosion, he follows policies to spark another bubble. Healthy banks plus jobs and prosperity. What’s not to like?
I’ll tell you what’s not to like:
1) Bubbles make most people poorer. A housing bubble resulted in people with massive debt. More and more of their money was focused in servicing debt. That’s not improving the standard of living of the population. Although that’s not really Bernanke’s concern. The health of the banks is Bernanke’s unstated primary concern. And then employment and stable prices per the mandates. Actions speak louder than words.
Also as far bubbles making people poorer, how many people were all-in when the tech bubble started deflating? I remember NASDAQ’s descent from 5000-plus to its 1000-level lows. The entire way down, the stock “analysts” were screaming, “Buying opportunity!”
2) Bubbles result in mal-investment. Money is not being spent buying and selling products because people want to consume them. Rather money is spent buying and selling products so a greater fool will buy them, yielding a profit. Eventually, someone becomes the greatest fool when there is a collective realization that the price of the item in question will not continue rising indefinitely. That the greatest fool may be themselves.
So, while a central banker might like bubbles, as they benefit the financial sector, politicians should not, as they harm the public. However, with our current political funding system, the group that profits from bubble also funds the politicians heavily, so any changes are nixed.
That Bernanke is urging a loosening of lending standards is very informative.
One thing I’ve seen, without fail, is that people who have never held a job on the bottom rungs, or suffered sever economic distress and hardship, really are “that stupid”.
Empty lots in the middle of Phoenix being turned into farmland. LOL at the mayor saying that now-devalued lots in Phoenix are “canvances of possibility”. Interesting story:
The refugees are accidental farmers in an unlikely urban field that is part of an ambitious plan to transform vacant land. The lot sits on one of the busiest corners of this expansive city, across from an English pub, near a light-rail stop and in sight of the glimmering high rises that punctuate downtown.
In Detroit or Buffalo, empty lots are ubiquitous reminders of what once was, places where buildings stood until they were abandoned during rough times that still endure. Here, the lots are a sign of what could be – promise and eyesore wrapped together in undeveloped slices of weeds and packed dirt.
In his inaugural speech in January, Mayor Greg Stanton spoke about the fields as empty canvases “filled with opportunities.” Last Monday, he broke ground on the lot where, on Friday, the refugees were preparing the land for farming and where, soon, shady trees and murals painted by local artists will color the barren landscape. Food trucks will operate there someday, he said in an interview, and there will be plenty of space for children to play and adults to socialize.
Uh … don’t you need water for farmland? Last I heard Lakes Mead and Powell were kind of … low. As in critical shortage low.
I thought Phoenix was a desert.
That’s some serious stupid, right there.
They were farming in Glendale before the housing developments rolled over them. It’s just not the same as farming in New England.
Everything seems back to normal down Florida-way.
Cockroach-eating competition man ‘choked to death’
A Florida man choked to death in October after eating dozens of live cockroaches in a contest to win a python, an autopsy has found.
The body of Edward Archbold, 32, tested negative for drugs and Broward County medical examiner ruled the death was an accident caused by “asphyxia”.
Archbold collapsed and died soon after the promotional event at a pet store in Deerfield Beach, Florida.
No other illnesses were reported among some 30 competitors.
Archbold died of “asphyxia due to choking and aspiration of gastric contents”, the Broward County medical examiner’s office found.
His airway became obstructed with “arthropod body parts”.
The grand prize for the contest winner was a python, and Archbold had planned to sell the snake to a friend, according to the owner of the Ben Siegel Reptile Store.
“We feel terribly awful,” said Ben Siegel, the owner, said after Archbold’s death.
I’ve known a few folks who liked and collected big snakes. Without exception, none of them were “right in the head”.
Will it soon be time for dips to buy?
Why investors should buy the stock market’s next dip
Commentary: The market’s bulls were desperate for a win, and they got one last week. Any overly aggressive bear who shorted last week will tell you the bounce certainly felt real, but can it last?
Can it last?
Of course it can! It’s different this time! Cycles, schmycles!
It is interesting how long people will accept slips of paper. I read a few days ago how Russia had printed up currency for Syria recently so Assad could fund his war. Yes, inflation is taking off in Syria but the fact that anyone would accept the currency is quite telling.. Of course, he only has about a year and a half of hard currency left, f he survives that long.
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