Bits Bucket for November 29, 2012
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Maybe I mi$$ed it but anyone know the reason for Hyw50’s absence ?
Joined the Obama adminstration as secretary of Emoticons?
George Soros stopped paying him to post. Don’t really believe that but everyone that writes anything against Obama has been accused of being paid by the Koch brothers so I though I would provide some balance.
“everyone that writes anything against Obama has been accused of being paid by the Koch brothers so I though I would provide some balance”
Not exactly true. NYCdjwhatever posts racist anti-Obama screed, but he can barely write at all, let alone well enough to be paid by a Koch Brother.
I would like to point out that I’m not being paid by anyone; but I’m open to offers
I’m looking to enhance my flexible morality.
Joe
You need to refocus….Obewannas legacy is the death of political correctness… so it’s only racism when it’s NOT true.
Obama is a lawyer with 2 Ivy degrees who is married to another lawyer with 2 Ivy degrees who was GC of a major hospital system. He has two pretty and intelligent daughtrs. He was elected to state office in his 30s and to the Senate the Presidency in his 40s. Meanwhile you’re hoping to parlay your decades-outdated paralegal skills into a job so you won’t stay unemployed in your 50s. Good luck with that. Seriously. You’re going to need it.
Ever heard of Affirmative Action? I’m sorry but his ideas are so wrong for America but then 99% voted for Oh cause he bee black….
We all talk about leadership here, but Oh is a Wussie….and now he is going on a 2 week vacation costing the taxpayers millions while Oakland rots
http://sanfrancisco.cbslocal.com/2012/11/28/phil-matier-oakland-crime-rate-worries-city-officials/
My beef is he cant talk to black people so we whites get the job by default. And you call us racists
Correction: Obama is an EEOC appointee who got into Ivy league schools because he is a “Minority”, not because he was intellectually superior. He isn’t.
As for his wife, she got the hospital job, because he got into the Senate and lobbied for her to get a “made up” job with a huge salary. No one replaced her when she left, the “job’ just disappeared.
Obama is, and has alway been a fraud, protected by the “politically correct” folks like yourself that want to attribute some kind of glorified intellectual capacity to Obama that doesn’t exist.
Where are the school records??? Humm?
Under Seal. Where are the Legal Papers?
Where is the intellectual grandeur that was displayed as President of the Harvard Law Review??? There is NONE. Obama got appointed because Harvard never had a Black President. He provided NO evidence of a legal scholar.
He is a fraud. Give him a telepromter and he can read well. That’s his only talent.
So, please, stop the Obama worship. He’s gotten everywhere by racial preferences, and that is why he likes more government intrusion. It worked well for him. Take a look at all his appointees. It’s worked for them, too. EARNED? Forget about it.
Lol!!
Obama may not be intellectually superior??
He did manage to get elected President twice and become very wealthy.
Or did you really just mean he’s black and your still bitter the brainiacs Romney and McCain got beaten?
Obama eats dogmeat.
http://abcnews.go.com/blogs/politics/2012/04/obama-as-a-boy-ate-dog-meat/
Obama is taking are guns away.
http://www.examiner.com/article/confirmed-obama-s-small-arms-treaty-would-take-away-2nd-amendment
Obama hates white people.
http://cofcc.org/2012/03/proof-that-obama-hates-white-people/
He did manage to get elected President twice and become very wealthy.
So did GWB. Getting reelected means nothing.
With all the credentials Obama has, he never really comes of as an intellectual. He sounds very sophmoric to me. May be it’s a calculated move because I don’t think you can be a politician and philosopher/intellectual at the same time.
Whether Obama is an ideal President isn’t my point. It’s ridiculous to argue his intelligence. The same thing could be said for Mittens, by the way. And again, I’d stand up for him. Setting aside the fact that Mittens was born into money, what Mittens did to amass his wealth is disgusting but also fairly brilliant. He should also be commended for his self confidence and generally being an alpha guy. Meanwhile, a lot of you people sit around sticking up for bootstrappers like Mitt while you work for someone else and work on some small-time ipad app “start up” or some other nonsense. Ha ha ha.
Bottom line–Both Obama and Mittens’ intelligence are first rate, regardless of what you feel about their policies. I would also put Ron Paul and Gary Johnson in this category as well. Weak minds sit around and critique these guys, imagining that they are somehow not intelligence, while they themselves are getting pwned by life (e.g. DJ). A better strategy would be to realize what reality is and learn to deal with it to your benefit (e.g. DJ realizing no decent firm wants a middle aged guy with 20 yr outdated paralegal “skills”, thus he chooses another profession or goes back to school).
Yes, the sad part is he got where he is by deceiving people and many people bought the lies.
I’m disappointed that so many people have fallen for the lies. I was never a supporter of Romney, or especially that useless “reach across the aisle” apparatchik, McCain.
It is truely sad that Americans believe that a man whose entire modus operandi is pointing his finger at other people, criticizing them, and saying he will “fix it”, with his only solution deficit spending for his cronies. Anyone can direct money from government to special interest groups. the more spending the better. That’s not leadership. It’s a sham.
No Steve the Black racist element was a lot bigger then any of us realized…….
Not voting for the candidate who will kick you in the nutz is not racist.
Barack Obama certainly was not ELECTED, not “appointed” President of the Harvard Law Review (by both his peers and his professors) because he was, as you so quaintly put it “a minority”. His writings of the time reflect an uncommonly agile mind and a hugely expansive (some might call it inspirational) spirit. In a hyper-competitive environment like Harvard Law School, no one gives away their claim to such an influential post out of “political correctness”.
In any case his unscripted press conferences on CSPAN are apt demonstration that he’s the smartest guy in the room — your seething resentments notwithstanding. More to the point, he was smart enough to get himself elected POTUS over the most powerful political machine on the planet, the Clintons. And he did so by enlisting public intellectuals and private thinkers, one by one, all over the country back before most people even knew his name. Academics don’t impress easily.
As for Michelle, she was Michelle long before Barack was Barack. If you’d care too look beyond your propagandists, here’s a link: http://www.factcheck.org/2009/05/michelle-obamas-salary/
Regardless what you think of his politics or his performance, you only brand yourself a hateful fool with your spurious inferences and misinformed speculation. Your criticisms would be a lot more convincing without them.
“Obama is a lawyer with 2 Ivy degrees who is married to another lawyer with 2 Ivy degrees who was GC of a major hospital system. He has two pretty and intelligent daughtrs. He was elected to state office in his 30s and to the Senate the Presidency in his 40s. Meanwhile you’re hoping to parlay your decades-outdated paralegal skills into a job so you won’t stay unemployed in your 50s. Good luck with that. Seriously. You’re going to need it.”
got a buddy of mine who is a certified genius with one ivy league degree.
guess what…he doesn’t know shit about the federal reserve, monetary policy, the economy, or the housing bubble…hell he bought at the top.
me…i have a degree in in a cow state university form Mississippi…saw what was going on (apparently it didn’t take a genius) and got out at the top.
Guys, I voted for Obama solely because he is not White, because there are bigot Whites like you, who still think We are superior race, like the guy with mustaches (remember in 40’s). All we saw in several thousand years of white culture is distraction, billions of murders all these years, because of simple greed … I thought I will give a chance… Give Peace A Chance guys..
you only brand yourself a hateful fool
Yeah, but he still ate dog meat!
Yes, goods squad it is easy to locate your type on the streets of the cites around the world , white American tourists who eat only Big Mack ( or lets call it black caviar), oversize with big bellies…
“Where is the intellectual grandeur that was displayed as President of the Harvard Law Review??? There is NONE. Obama got appointed because Harvard never had a Black President. He provided NO evidence of a legal scholar.”
You have obviously never been to law school. It is a hyper-competitive place where people will remove or hide reference materials that everyone needs for an assignment just to get an advantage over classmates.
Do you really believe he was the only black man at Harvard Law when he was elected president of the Law Review? Surely if affirmative action was in play they could have elected a black woman and killed two birds with one stone.
Harvard Law School does not have to accept unqualified black people to fill quotas. They get the cream of the crop of all races and socioeconomic classes.
You might argue that there are more qualified white men that did not get accepted because Obama did, but it is unreasonable to say that he was unqualified. And if someone was passed over, they would have been only marginally more qualified.
In a similar way, it could be argued that someone more qualified than George W. Bush was passed over for entrance into Harvard Business School due to his family connections.
It is almost certain that someone in Obama’s class at Harvard Law had family connections that gave them an unfair advantage over applicants of similar ability.
We’re toast. I am just going to enjoy the ride down. Thanks to all of the egg head, self loathing guilty white intellectuals for hastening our demise.
Thanks to all of the egg head, self loathing guilty white intellectuals for hastening our demise.
You’re welcome. Enjoy it.
Freak.
“Freak.”
Ahem…
Joined the Obama administration as secretary of Emoticons?
I always thought he might be Joe Biden. Maybe he actually has to do some work this term, or maybe the Petraeus thing has scared them all off the internet.
All the above is only funny if nothing serios has happened to him…You guys need to get-a-grip…
Ahansen….Have you heard from HWY… ??
Eyes sez he’s got his a$$ kicked by real street talkers.
Hi dave,
I’ve written to him several times over the last few months and gotten no response (unlike him). Neither have I seen him truckin’ along the proverbial Hwy 58. Let’s hope he and Mr. Cole are enjoying a long train ride in some remote outback and will come in from the cold as soon as the snows hit. This blog has been devoid of his quirky poetry for far too long….
I am a little concerned….
I too am concerned and miss his postings.
The dollar key got $tuck on hi$ computer, $o he doe$n’t have anyway to expre$$ him$elf. Mo$t of the po$t$ didn’t make much $en$e, anyway. @@@ but it’$ fun ju$t to Po$t non-Cents.
Yes but he was whimsical and non-threatening to some of the bigger egos here.
Hwy met up with some of us at a San Diego gathering way back before the bubble popped (for the first time). Very pleasant and engaging fellow in person…
Greenspan of the North.
Here’s What’s Happening In North America’s #1 Housing Bubble
Carney has been praised for embarking on aggressive easy monetary policy in his effort to keep Canada from sinking with the rest of the global economy.
However, some are now concerned that his policies are reinflating a massive housing bubble. Capital Economics warned that Canadian home prices will fall 25 percent from here, and Robert Shiller warned that Canada looked like the slow-motion version of the U.S.housing bust
Read more: http://www.businessinsider.com/canada-housing-market-2012-11?op=1#ixzz2Dc4oXbru
“Here’s What’s Happening In North America’s #1 Housing Bubble”
Thanks to overdoses of every flavor of federal housing subsidy known to man, plus a record velocity of housing economics bullshit, the U.S. Housing Bubble is back in the running.
Well there’s a great effort to re-inflate by the housing pimps*. I don’t believe the hype. All I see around me in suburban Boston is overpriced housing sitting and sitting with slow price decreases.
*From the NYT RE Section of what you get for $X weekly series. This week what you get for $2 million. You can get a ~ 100 year old in Minneapolis! Spitting distance to the neighbors! Wait there’s more! $24K in property taxes. Or there is the $2 million dollar place in Dallas. This is all to make the $2 million dollar place in Wash, DC (Chevy Chase, MD) look reasonable. The housing pimps need to protect the core markets much the way politicians play to their base. Or in business there is the concept of creating a moat to protect chief markets / customers / core product or service lines.
http://www.nytimes.com/2012/11/29/greathomesanddestinations/real-estate-for-2-million.html
Speaking of politics and business even in France the socialists are realizing other people’s moneys eventually runs outs. Wonder if that will ever occur to the tax and spend liberals (rebranded progressives) in Washington.
A Rude Awakening
The Economist
France - Strategic Planning
Earlier this month, the French received three wake-up calls in less than 24 hours. On November 5, Louis Gallois, a businessman, unveiled a government-commissioned report on French competitiveness, in which he wrote of an “emergency situation.” The same day the IMF urged France to cut public spending and reform the labor market - or risk falling behind Italy and Spain. And on November 6 Jean-Marc Ayrault, the Socialist prime minister, announced big new tax breaks for companies, urging the French to back the measures or face the “certitude of decline.” This collective alarm call is long overdue, given France’s recent struggles and its decline in competitiveness against Germany. However, it is not yet clear whether the government will take the necessary steps to implement proposed reforms, especially if the public resists some of the measures. For instance, the public-spending cuts that Ayrault promised to pay for the new tax breaks have yet to be spelled out in detail, let alone put to public-sector unions that form the backbone of Socialist party support. (587 words)
what you get for $2 million
Median household incomes have dropped by $5,000 in the last 5 years.
Half this country’s workforce make less than $500/week.
The NAR-scum’s pimping never abates.
Has the median income of the top 1% dropped in the last 5 years?
the top 1%
No, it has increased significantly.
But any discussion of that is “class warfare”.
Next meme, please.
No, it has increased significantly.
And still many voted for Obama to carry out the same policies that made the rich richer.
That’s not a bad price for the Maryland house. They will probably get that price, maybe even a little more. Chevy Chase/Bethesda area is one of the wealthiest in the country so it’s not outrageous. Plenty of dual-earner households in the 500k+ range can afford that place. I would never want to “consume” that much housing, but I know plenty of people who can afford it without batting an eyelash–2MM is 2-3x income for a partner where I work.
The real question is, does 2MM make sense in flyover country? In Chevy Chase, you can send your kids to public school, not sure I’d want to do that in Dallas in Minnesota. You’d probably have to shell out for a top private school.
plenty of people who can afford it
A trend unlikely to reverse anytime soon, fiscal cliff be damned:
http://m.washingtonpost.com/local/seven-of-nations-10-most-affluent-counties-are-in-washington-region/2012/09/19/f580bf30-028b-11e2-8102-ebee9c66e190_story.html
From discussions I’ve had, it seems like the average associate here has a 400-500k mortgage, well within 3x income. In some cases more like 2x income. I’m the cheapest by far at 140k mortgage
I’m not embarassed by the small mortgage, actually sort of proud. Because I spend an extra 20 min driving each way, I also get the same amount of house for the money. In some cases, more house (some of the colleages are in condos, although most are townhomes)
You do not want to send your kids to the schools next to your $2 million house(but the house is also very close to the gay area if Dallas)
Nor do you want to take them to the park on top of the freeway unless you enjoy the smell if carbon monoxide.
I’ve only been to Dallas once (also Houston 2x) and it’s another of those places I’d really really never want to live. Good for mindless consumerism, maybe.
There are plenty of $2 million houses in the area where I live (Chicago north ‘burbs). Most of them are very nice. The property taxes on those places are more than my mortgage payment, when I had one. No thank you.
No way on the uninteresting four-square Chevy Chase house. For all the prestige of the “location,” bottom line is that you just spent two million for the priviledge of running for the bus every morning. There are better places to put $2 million.
For Dallas and Minneapolis, you’re better off buying a $500K house and hiring a governess.
I didn’t say the Chevy Chase was what I’d want. I would rather spend 1/10th of that amount and commute the extra 20 miles.
What I was saying is, that’s not a bad price for that size house in Chevy Chase (or Bethesda or Potomac, etc). Plenty of people can afford it without it being a big deal. And most people who can afford it would rather pay more to live in Chevy Chase than save some money and live in Hyattsville, Beltsville, Germantown, etc.
$250/wk gets you a nanny in Dallas.
Plus your kids learn to speak Spanish at a young age.
And most people who can afford it would rather pay more to live in Chevy Chase
For a lot of hotshot professional types, where you live is an advertisement of your success and therefore (we’re told) your ability.
Do you think living in a normal nabe may have an effect on your making partner, joe? Maybe you’ll not be seen as a team player, one of the guys, yadda, yadda? Maybe even a damn nonconformist.
Maybe I’ll go to Dallas when I have a kid and get a 250/week nanny to relocate for 300/wk.
Another great arbitrage opportunity.
I live where I live bc it’s close to family and my wife teaches down the street. I have a long way to go before I have to prove I’m a team player. I generally do think that for most of these people it’s really their preference to live around people like themselves, whereas I am less conformist and don’t care. So if I don’t make partner (very likely, by the way) it will be more as a result of being non-conformist overall, rather than anything specific to housing spending.
“you just spent two million for the priviledge of running for the bus every morning”
That is the transportation information the article provides, but in DC the people who live in houses like that (or at least the ones who buy them at their current price point) don’t take the bus to the Metro. They drive. Parking is $15 a day downtown. Roundtrip on Metro (and the bus) would be $10 or more. The people who will buy it don’t take public transportation. Count on it.
That house looks like it was pretty nice before they added on all the extra space. It probably had 4 bedrooms (maybe 3), not 6 and a lot more yard. You can see the addition in the picture of the back.
“So if I don’t make partner (very likely, by the way) it will be more as a result of being non-conformist overall…”
You remind me of what my HS math teacher told me long ago:
Where’s the next peak ?
Soon to be the Greenspan of the Thames
By BetterRenter in yesterdays bits bucket;
Cry me a river. Now these white collars are starting to understand what my life is like. You’re replaceable. There are a lot of people looking to have your job. In an economy when production is very efficient (made possible by social stability, cheap oil and high technology), this is NORMAL. Your reaction must be to withhold consumption in order to avoid being impoverished by bills, and that will drive deflation.
In a world of smoke and mirrors and media-driven lies resulting in mass delusion, this post is a refreshing dose of reality. This is not our parents working and living environment yet the advertising arm of the media barrages the public with idealized themes that reflect our parents life. It’s gone and it’s never coming back.
According to my mom (85), what is coming back is the world of our grandparents. Well, for most of you it would be the great grandparents. Debt hampsters and manic spenders will have a hard time adjusting. Those who can enjoy life without a lot of toys and bling will be better off under any scenario.
Those who can enjoy life without a lot of toys and bling will be better off
And those who already have a lot of paid-off toys and don’t want any more, will be fine as well. (But if they get rid of a lot of their junk they will be better off.)
“And those who already have a lot of paid-off toys and don’t want any more, will be fine as well.”
So few that it’s negligible.
See this image of a tar paper shack being used in the 1950’s.
It used to stand about 4 miles from where I live. Applying modern standards would mean its condemnation as unliveable & razing by local authorities. Housing like this were tolerated until rather recently.
The problem is, tar paper just isn’t as good as it used to be.
People in government are psychos. They want to help people by destroying houses that they consider “not fit for human habitation”. This will eliminate poverty, since no one will have a “substandard” house. Mostly it makes houses more expensive.
Look at the posts on this blog. Many posters have a “minimum” cost per square ft of $100 and think that’s cheap.
Conversely, I’ve seen $2000 trailers that were perfectly livable.
It’s a real sore point for me as I spent a number of years working on “code” committees. You wouldn’t believe the stuff that gets proposed.
The committees don’t care too much about the effect it will have on the owner/builder, although they say they do.
They want to claim it’s all about health and safety. How is it more safe or more healthy by razing a shack and having the occupants live under a bridge??
I understand they simply want to outlaw poverty. That’s the simplest government solution.
Look at the posts on this blog. Many posters have a “minimum” cost per square ft of $100 and think that’s cheap.
BINGO
Fawkin crazy isn’t it? Sadly, these people are a lying realtors dreamdate. And they’re everywhere.
Friend just sent me a link to Resource Furniture, an Italian design firm that makes stuff for small spaces. It is truly amazing. Expensive, too.
Our new place is 1300 sq. ft., which for a family of 4 is just big enough as long as we don’t collect too much crap. The more space I have, the more crap I collect. Been purging for the last 9 months, and it feels good to get rid of stuff.
I feel sorry for my neighbor, who is clearly a hoarder, because I suspect that much of the stuff I post on craigslist and put out for free ends up in his house.
I agree that now many governmental bodies want to outlaw obvious poverty like that tarpaper shack — but back then, it was tolerated, the inhabitants worked their way out of poverty & the shack was abandoned for quite a while before it was torn down. Times have changed.
Same as tearing down the slums, breaking up neighborhoods to build Cabrini-Green.
The holier-than-thou dogooders who propose these solutions wouldn’t dream of living anywhere near the inhabitants, in any case.
You could get that stuff from Ikea. Heck, Ikea even has sample furnished apartments right in the store for you to walk through.
The problem is, tar paper just isn’t as good as it used to be.
Maybe we could get some Chinese tar-paper to build these shacks cheaper? Hope it’s not toxic…
Today’s tar paper is vinyl.
I’ve been shopping for roofing materials lately. They still have “tarpaper” which isn’t vinyl, but it isn’t quite what I think of as real tarpaper. The current version is very thin, has as little tar in it as possible due to the cost of petro, & feels flimsy. The plastic substitutes cost only a little bit more & feel like they would serve the purpose better.
Tresho, you can get 30 lb tarpaper which is a lot more durable, FWIW. Not that I’d use it for siding but it is a lot more sturdy for a roof underlayment.
Back in the ’40s to ’60s a lot of cheap houses were “improved” with siding of a material similar to roofing shingles in the pattern of cedar shingles or slate; or roll roofing stamped with a pattern like brick. It’s still there today.
Just use what your supposed to use and get some Grace sheet waterproofing delivered to your site.
I have an option to go with tar paper or the plastic stuff at a level above where I must use some kind of self-adhesive sheet waterproofing. Will go with the plastic stuff at the upper level & the Grace sheet waterproofing lower down & in the valleys.
According to my mom (85), what is coming back is the world of our grandparents. Well, for most of you it would be the great grandparents.
I don’t know about your grandparents, my grandparents told me about how they grew up and it sucked. Many Americans worked hard to so that we in the younger generations could live in a better country than they experienced.
Bill in Los Angeles is our role model. We have never worked at the same job for more than 2 years. We have never lived in the same place as an adult more than 2.5 years. If the price of food and gas doubled tomorrow, it would be a lifestyle adjustment but not an extreme hardship.
Having witnessed other thirty-somethings spin the hamster wheel of the debt-driven lifestyle only to end up in divorce and/or bankruptcy, we know better than to drag that albatross with our name inked on a 15 or 30 year note.
Although our current gig is stable for the next 5 years, we plan to change jobs again in the next 2 for more money, and will likely relocate.
The Bill in Los Angeles lifestyle is the only way to live.
BiLA lifestyle could be OK in certain industries but you can’t get anywhere in law or finance moving around the country every few yrs of leaving for short term reasons. It is probably the same in medicine and a few other fields that I don’t know about. Screw a 10k-20k/yr raise, that is chump change.
My version of the BiLA lifestyle is to arrange my life so I get the most out of each day and have a PITI that is a nonfactor in my life. At the same time, my house assists me in getting the most from my life, because it’s super close to my wife’s work (so she commutes less, exercises and enjoys life more) and everything is arranged just as we want it. Family is close by (blocks away). The house took some time to set up perfectly but is again de minimus compared to the years we spend using it.
‘a 10k-20k/yr raise…is chump change’
I agree, and this being the internet, I’m gonna hop into my new Ferrari and zip over to Las Vegas for some $5,000/bottle wine with my billionaire buddies. What biz did you say you were in? If you every get sick of slumming it, you can earn more washing my cars.
LOLZ!
10k will not change your life, I’m sorry. If you want to reach any sort of “escape velocity” where you can have real control over your career, you need to focus on what skills you can learn, what connections you can make, etc.
I can’t develop clients if I’m hop-scotching the country every few yrs for slightly better pay. You can’t pick up the phone and call someone and way, “hey, want drinks after work” or “want to play some tennis this weekend” from 1000 miles away. Moreover, there is a lot of trust that gets built up over time. Partners here only come in the office a few days a week, but it’s still necessary to talk shop, prep for oral arguments, and so forth. And as an associate, no one cares if I come in late/leave early, but if you don’t show up at all for an entire week, eventually people will notice.
“I can’t develop clients…”
Can we agree that law and IT have completely different industry structures and related career strategies? For instance, how many folks do you know who outsource their legal service needs to India?
Prof Bear, if you read, I specified that BiLA is best suited to IT or low/middle-level government contracting. Remember, even in IT, BiLA is dependent on a) his government issued security clearance and b) Federal budgets.
I said that law/banking/medicine would be particularly ill-suited to flitting around the country every few yrs to chase the next raise. As I’ve worked a few yrs now, I have noticed that doing business with big corps means you need to provide some level of trust and familiarity (our firm calls in intimacy). Something beyond just doing routine work. This is cultivated by demonstrating to the client that you’re close by, your kids go to the same schools, you eat at the same restaurants, you have interests in common, etc. Some additional indicator that you’d go the extra mile for them and that you’d pick up the phone and tell them what new regs are coming out or what new case precedent they might want to know about. I wish it wasn’t the case, because I do not want to move to DC, overspend on a house, etc.
For instance, how many folks do you know who outsource their legal service needs to India?
More than you know. 10/15 years from now the Lawyers in this country will be in same position as most IT folks.
Comment by joesmith
11-29-2012 10:25:24
So your job is being a fluffer for the 1%?
What about the idea of trials done by video cam?
Do you really have to be in a court room during bankers hours day after day after day running up the legal fees and Court costs?
More than you know. 10/15 years from now the Lawyers in this country will be in same position as most IT folks.
So your job is being a fluffer for the 1%?
Actually it’s much worse. Lawyers in today’s America are the thugs that used to work for the mafia families. The families are Government, Big Coporations, etc. in this case.
That’s why I say bring back the duel. At least I have a 50% shot of winning a duel. I have no chance in the rigged legal system.
Bill is very lucky to have found a tech niche that has not become obsolete or outsourced to India.
It also seems a life style were you can’t have any attachments to places or people.
It also seems a life style were you can’t have any attachments to places or people.
“Attachments to places and people” are what I call “family and community”, which, for me, is what makes life worth living.
I will allow that I shouldn’t have said “chump change”. But my observation is that proximity still matters in some industries and job types. Not everyone wants to be nameless and faceless and be known for just filling a need/being a cog in the machine.
That’s interesting. I read an article a few years ago by a professor at Harvard Law School who wrote that most of their graduates ended up working as a cog in the machine that is Corporate America.
BiLA lifestyle could be OK in certain industries but you can’t get anywhere in law or finance moving around the country every few yrs of leaving for short term reasons. It is probably the same in medicine and a few other fields that I don’t know about.
I used to work in a research hospital in Boston that is considered one of the top 10 hospitals in the country. The doctors in the department that I worked in were constantly sending out CVs looking to see if there better opprtunities. I imagine that a specialist a any of the top hospitals in the country could easily move to another hospital in another part of the country every few years.
Bila lifestyle doesn’t work very well at all for hands-on cattle ranching….
“Suitcase farming” didn’t work out all that well in the Dust Bowl, either.
Okay fine, but Mrs. Gandhi doesn’t care for that lifestyle.
The Bill in Los Angeles lifestyle is the only way to live.
I prefer the modified Oil City plan. Less moving, less job switching. Mellower, and you can garden.
the modified Oil City plan
We want that too maybe in 15-20 years, but don’t know where our Oil City is yet.
Detroit should have hit bottom by then.
The beauty of Oil City is that it’s already hit bottom.
I’ve posted some Oil City stuff here, and from what I can tell, the rock bottom price for a livable SFH is $30-35K, no matter where in the country it is. Even a $1 Detroit house would need $30K to be livable, so it washes out.
If we get any kind of public-option single-payer health care, I predict that we will see MASSIVE amounts of people going modified Oil City.
I’m afraid Oil City is going to see a housing bubble in 10-20 years, given the large number of folks planning to escape from the Big City to pursue the Oil City lifestyle…
The oil city (post industrial corridor) area is actually quite vast.
It is 20 years later for me and I do know where.
The Oil City gameplan, at least the true version, requires housing prices so low that they’re almost giving the houses away. That only exists in places where there really are no jobs with good pay within 75+ miles. This does not seem like a good trade for anyone under 55 or so (too early to forego earnings/career). And once you’re over 55, I would think you’d want to be closer to good health care.
One other problem I’ve always had with Oil City is that there are no cash-flowing assets in places like Oil City. The lack of other people with money makes it hard to start some type of small business. It really has to be predicated on accumulated past earnings, self-sufficiency, thrift, and having good growing seasons (to reduce food cost).
That’s why I call it the modified Oil City plan. I couldn’t handle living in a dead factory town or the sticks, so I went with a college town in flyover where prices were higher but still laughably low when I bought. I’m less than two miles from three regional hospitals.
“requires housing prices so low that they’re almost giving the houses away.”
LMAO.
I’m glad we have guys like JoeSmith posting here.
Joe :
Exactly right for example any DJ equipment cd’s high tech LED lighting, Macbook pro, costs the same in NYC as in say South Carolina, but the pay you get for weddings is at most 1/2 of what you get here.
So to have everything paid for and then move, you can live on 1/2 the money
The lack of other people with money makes it hard to start some type of small business.
You really, REALLY need to find another line of work.
Even an updated paralegal doing clerical work in a podunk county courthouse is a more viable career than doing weddings.
You really, REALLY need to find another line of work.
Even an updated paralegal doing clerical work in a podunk county courthouse is a more viable career than doing weddings.
Agreed on the need for another line of work.
And I speak with a bit of experience on the deejay front. It’s hard to make it work on a full-time basis unless you’re some big name like Skrillex.
Go ahead and be a deejay on weekends. But please do something else that pays the bills during the weeks. You’ll be a much happier fella and we’ll be a much happier blog.
With regards from Slim, who’s in acting school whilst not quitting her day job.
aNYCdj spinnin’ da hitz!
“so I went with a college town in flyover where prices were higher but still laughably low when I bought. I’m less than two miles from three regional hospitals”
Hush alpha, these people need to think we live miserable lives. It will help them feel better about paying the high rents on the coasts.
these people need to think we live miserable lives
Oops! Did I mention I live in a tar paper shack?
Chinese tar paper.
“Bill in Los Angeles is our role model.”
Correct. Besides…. contract employment is far more lucrative.
Bill in Los Angeles = WIN
The Bill in Los Angeles lifestyle is the only way to live.
FOR YOU.
The belief that everyone should or would want to live the same lifestyle is what starts wars.
Bill in Los Angeles is GOD.
“Rise Above” - CNBC’s campaign slogan for a ‘compromise’ on the fiscal cliff
translation:
“Kick the Damn Can Already” - the status quo is depending on you.
yep, their hype is craven. ‘pweeeeze don’t hurt The Markets pweeeze…’
“Rise Above”
http://www.youtube.com/watch?v=Fsbvo5GVK10
Obama ain’t gonna kick any cans on this one. He’s going to sit and watch the clock. The tax hikes on the rich may not “make a dent” in the deficit, but it’s a huge moral victory for the middle class, which can be used to break the R lockstep in Congress.
“No” plan? Barack and Harry and Nancy have been planning this for two years.
LOL…by Power Lunch time it was MARKETS HELD HOSTAGE!
Just thought that a little data would be interesting on this topic.
Do millionaires move to avoid high taxes?
Posted by Dylan Matthews on November 28, 2012 at 11:25 am
http://www.washingtonpost.com/blogs/wonkblog/wp/2012/11/28/do-millionaires-move-to-avoid-high-taxes/
…To see if high taxes are actually causing, rather than coinciding with, lower millionaire filings, you need to do some econometrics. Those who have reach much more equivocal conclusions than Baldwin. The best recent studies on the question have concerned millionaire taxes imposed by states in the United States. In those cases, it’s more likely you’d see millionaires fleeing. You’d expect more people to, say, leave New Jersey for Connecticut when the former imposed a millionaire’s tax than to move from Britain to the United States when the former raises rates. People are generally more willing to move within their country of residence than between countries.
But even in those cases, researchers haven’t found much evidence that millionaires flee in the face of high taxes. Roger Cohen, Andrew Lai, and Charles Steindel at the New Jersey Department of the Treasury and Cristobal Young and Charles Varner of Stanford released studies in 2011 and 2012, respectively, evaluating the effects of New Jersey’s millionaire tax, which governor Jim McGreevey signed into law in 2004.<
Cohen, Lai and Steindel found that the rate increase caused 25,000 residents to leave the state by 2011, and cost the state about $150 million in tax revenue. But that is dwarfed by the $1 billion the rate increase brought in. The overall revenue effect of the tax, then, is still positive. Young and Varner found still smaller effects, estimating that 69.7 millionaires left — not 69,700, but a little short of 70 people. This cost the state $16.4 million, the vast majority of which was due to the flight of the top 0.1 percent, or those making over $3 million a year.
Varner and Young have also studied taxes on millionaires imposed in California, and reached similar conclusions. A 2005 high-income tax hike to pay for mental health services was actually associated with a decline in out-migration of millionaires, and cuts to high income taxes in 1996 had no effect on the number of millionaires in the state. By far the most important determinant of whether millionaires move, Varner and Young found, was whether they get divorced or not.
These three studies are in line with the previous literature on millionaire flight, which has found either no effects or very small ones. And if there are no effects within the United States, it’s extremely doubtful there would be any between countries.
What’s more, it’s not clear that any effects the British law had would be relevant for the U.S. tax discussion. Even if the top income tax rate went back up to 39.6 percent, that would still be lower than that of most European countries, which would leave potential tax exiles fewer places to flee. Countries with unusually high rates, by contrast, have more to worry about.
Yes.
researchers haven’t found much evidence that millionaires flee in the face of high taxes.
Avoiding taxes is just one issue involved in moving.
Moving means you have to move.
Given that the truly wealthy own multiple properties it might not be so much the case that they physically “move” but rather that they move their legal residence. So while they might officially “move” to low tax Wyoming they probably spend most of their time at their digs in Manhattan, Malibu or Maui.
Yes, I have some 1% friends probably less than 1% who have two homes. They are legal residents in the more tax advantageous state though they spend most of the time in the other.
Polly, the fact that we are taxed less than Europeans does not make me feel any better about being over taxed. It’s that same argument used by those always promoting high gasoline taxes. The gas costs X in Europe….
What do I think is a fair income tax? 10% for everyone.
CUT THE SPENDING.
WE are not taxed less than Europeans,in general. Where did you get such an idea?
They collect a lot of their revenues in VAT taxes, which are much higher than sales tax.
How can you pursue military intervention all over the planet without “overspending”?
Yes, I have some 1% friends probably less than 1% who have two homes. They are legal residents in the more tax advantageous state though they spend most of the time in the other.
I think that Polly has written that that is illegal. Your friends are taking a risk there.
It is sometimes a little more flexible if they are not working anymore and states have different rules about how much it takes to be a resident. For example, in NYC (this is for the city, not the state) if you have a permanent place to live in the city (rented or owned) and spend any portion of 30 days or more per year within city limits you are a resident of NYC. That means that even if you legitimately live in NJ (big house where you and your spouse and kids live and sleep 95% of the time), but work in NYC and have a studio pied-a-terre that you stay in on some weekends, you are a resident of NYC for tax purposes.
States that border each other often have rules so that you can’t be stuck as a resident of both even if you qualify under each state’s rules as a resident. States that don’t share borders rarely have agreements like that.
Bill is a different case. He says he is a contractor and that he has the huge tax dodge that means a lot of his income isn’t taxed at all. The only dodge that an IT contractor working on classified stuff can have is his “away from home” living expenses. It isn’t like you can do classified work from a home office or on your own equipment. He is either lying about being a contractor or violating the rules about his tax home as they impact his ability to deduct his living expenses. There isn’t any other choice.
I’ve heard from a number of sources that people fly into Palm Springs/Palm Desert/Rancho Mirage, etc. from out of California, and then fly home before they hit 6 months staying…then they drive back for a bit longer…careful to use cash while they are there. Love the desert, just don’t want CA to be their primary residence…
Two-thirds of millionaires left Britain to avoid 50p tax rate
The Telegraph | 27 Nov 2012 | Robert Winnett
Almost two-thirds of the country’s million-pound earners disappeared from Britain after the introduction of the 50p top rate of tax, figures have disclosed.
Last night, Harriet Baldwin, the Conservative MP who uncovered the latest figures, said: “Labour’s ideological tax hike led to a tax cull of millionaires.
Far from raising funds, it actually cost the UK £7 billion in lost tax revenue.
“Labour now needs to admit that their policies resulted in millionaires paying less tax and come clean about whether they would reintroduce this failed policy if they were in power.”
Hmmm…saw a story yesterday about tons of millionaire Russians fleeing to the UK.
Pretty sure the Russians keep their money somewhere else…
Yeah, we read some Drudge Report links that confirm this 100%.
Wealthy Russians are moving to London is such large numbers that local commentators have coined the term “Londongrad.” Roman Abramovich, the Russian multi-billionaire who owns the Chelsea Football Club is the highest-profile rich Russian in Britain, but he is only one of ten Russian billionaires living there, while an estimated 1,000 Russian millionaires now call London home.
http://m.cnbc.com//id/47599766/The_Mass_Migration_of_the_Super_Rich
Republic of Nauru
One man’s ceiling is another man’s floor.
Anybody know if those Russians have to pay British taxes?
My partner’s father left the UK in the 70’s to come to the US, largely over massive taxes.
What were the US marginal rates in the 70s? A heck of a lot higher than they are now.
Except NO ONE paid 70% or 90% with all the loopholes.
The Effective Tax rate was about 35%.
And government in the 1970’s spent 1/2 (as a percent of GDP) of what it does NOW…
With WAY more loopholes. The Tax Reform Act of 1986 served to…
1. Lower marginal rates; and
2. Cut out deductions.
The 50% marginal rate was cut to 28%, but with the removal of deductions intended to make it all revenue neutral.
See any similarity to what the GOP is asking for, and the Simpson Bowles commission recommended? The only difference is that NOW the GOP is willing to, and the S/B commission recommends making it revenue positive, not neutral.
I didn’t ask about the effective rates, bananas. I asked about the marginal rates. The marginal rates that applied to the extra income earned by becoming a US doctor, not a UK one. I’m sure they have deductions in the UK as well.
“No one really paid those high tax rates back when we had high tax rates and a successful economy!”
The official response. Never backed by evidence.
Polly, before Thatcher came in, the highest marginal rate for things like “unearned income” in the UK were 90%+…he left and brought his investment capital with him.
any of you seen that new show moonshiners? pretty funny folks out in the carolinas.
I guess business has dropped off a cliff at the mustang ranch thanks to the housing bust. No more equity for the good times.
Either no more money from home equity loans is coming in, or they’re getting competition from amateurs trying to make their own loan payments.
Amateur professionals?
Are you suggesting that Mustang Ranch has fallen on “hard times”?
“I’ve had to learn to adjust, my ladies have had to learn to adjust,” said Susan Austin, the madam who operates the ranch. Many of her clients lost jobs, and those with jobs have held back discretionary spending. Austin fears the fiscal cliff will only make that worse. “It’s definitely going to hurt me in the end.”
Not everyone in this part of Nevada may suffer if the cliff creates chaos. Uncertainty is good for one booming business: mining. There is more gold in the Silver State than anywhere else in America. “The gold industry, I think, celebrated the election,” Gilman said.
http://m.cnbc.com/us_news/50000572
“It’s definitely going to hurt me in the end.”
There is some great comedic potential in this story!
I think that the business is getting soft.
All of these shows about moonshiners, hog hunters, and pickers are training films for the wretched refuse in Flyover.
And the Zombie shows are training the Coming apocalypse/societal breakdown-types on what to do with the 47%, when the government cheese goes away
All of these shows about moonshiners, hog hunters, and pickers are training films for the wretched refuse in Flyover.
These shows are some kind of propaganda campaign, although I’m not what the point of it is underneath the B.S.
It’s to get the pond scum used to the idea of going back to a 19th Century way of life.
It’s to get the pond scum used to the idea of going back to a 19th Century way of life.
A little of that, but also it strokes the egos of those who consider themselves above the pond scum, if only by a little bit.
“It’s to get the pond scum used to the idea of going back to a 19th Century way of life.”
And your clan is taking us there at light speed.
They’ve exhausted the rich and famous, the young and beautiful, and the dashing and the daring. The only reality demographic now left to exploit is the old and the toothless.
Ignore the man behind the curtain pulling the levers: Those “homes” are single-handedly fueling the U.S. economic recovery!
ECONOMY
November 27, 2012, 7:58 p.m. ET
Now, Homes Fuel Economy
Real Estate, Once a Drag on Growth, Reverses Course as Other Sectors Tail Off
By CONOR DOUGHERTY, NICK TIMIRAOS and NEIL SHAH
The U.S. housing market, which plunged the economy into recession five years ago and was a persistent drag on the recovery, is now a key economic driver at a time when other sectors are slowing.
Economists project U.S. gross domestic product growth will slow in the final three months of the year from the sluggish 2% annual rate in the third quarter. Businesses, unnerved by the prospect of federal tax increases and spending cuts known as the “fiscal cliff” taking effect in January, have slowed their pace of investment spending. Defense spending also is expected to slow, further weighing on growth.
But while those economic pillars weaken, an improving housing market is buoying consumers’ spirits and giving the economy its biggest lift since the real-estate boom. Macroeconomic Advisers projects the economy will grow at a 1.4% annual rate in the fourth quarter, with housing contributing 0.4 percentage point. IHS Global Insight is projecting a 1% growth rate, with housing contributing 0.53 of a percentage point—the largest contribution since 2005.
“Housing seems unfazed by the uncertainty that is plaguing other parts of the economy,” said Ben Herzon, an economist with Macroeconomic Advisers.
The real-estate recovery is just beginning, of course, and housing’s role in the overall economy remains diminished by five years of rising foreclosures and falling prices. New loans aren’t easy to come by as lenders grapple with distressed mortgages. Millions of homeowners owe more than their property is worth. Still, housing’s steady improvement is “going to offset some of the slowdown in manufacturing, and it is one of the reasons we think we’re likely not to see a double-dip recession,” said Doug Duncan, chief economist at Fannie Mae (FNMA -0.73%).
Home prices rose 3.6% in September from a year ago, according to the S&P/Case-Shiller National Index out Tuesday. Prices are up 7% through the first nine months of 2012, which is the strongest rise since 2005 and puts prices on a trajectory to beat even the most optimistic forecasts from earlier this year. The gains also are broad-based, with the 20 cities tracked by the Case-Shiller index—except Chicago and New York—showing year-over-year gains.
The housing turnaround has been a boon for real-estate brokers and home builders, some of whom have seen their stock prices more than double this year. Retailers have seen a new stream of customers ready to decorate, furnish and upgrade their homes while investors are spending at hardware stores to renovate previously foreclosed homes. Banks, meantime, have posted record mortgage profits amid high refinance volumes and stronger demand for new loans.
Beyond those direct benefits are a number of indirect effects. Rising home values make homeowners feel better about their finances—making them more likely to spend and, with interest rates low, more comfortable about taking on debt. An index of confidence released Tuesday by the Conference Board rose to 73.7 in November, the highest level since February 2008.
“Housing’s share belies its importance to the economy,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank (DBK.XE +1.80%). “The confidence effects are massive.”
Rising home prices are making consumers feel flush, which may eventually spur them to spend more: New home-equity lines of credit are projected to grow by 22% this year to $77 billion, a three-year high, according to Moody’s Analytics. “We can start to see the housing market as an assist to our growth rather than an anchor,” said Frank Blake, chief executive of retailer Home Depot Inc. (HD +1.03%) on an earnings call this month.
…
Not surprised about the hype more amused. Since the election it seems like news coverage has gotten very rosy. Just the other day a practically glowing front page article in the NYT about California. Unemployment down! Housing Market Recovery! No data on why the unemployment is down - my guess fewer people in the job market.
+1 Relax, take the blue pill, and go shopping.
Stockton, CA now has a housing shortage. Because everybody want to live in Stockton!
http://mobile.bloomberg.com/news/2012-11-29/foreclosure-wave-averted-as-doomsayers-defied-mortgages.html
“Stockton, California, has the highest U.S. foreclosure rate. It also has a housing shortage. Homes that are seized by banks are attracting investors, many of which aim to turn them into rentals. New York- based Blackstone, the world’s biggest private-equity firm, has been buying $100 million of houses a week.”
I didn’t think Stockton was a hot rental market; I don’t know the area, but this sounds as daffy as a business idea I heard this week. A company was going to sell condoms and for every condom it sold here, it was going to donate one to a developing country. They thought it would be a big draw. This was actually proposed to a Silicon Valley VC.
The Fed’s housing price support policy must be shoveling beaucoup buckaroos into the coffers of the Blackstones of the investing world, while pricing out end-user households from being able to afford either renting or owning.
Next time you see a homeless guy begging for change, think of the Fed’s housing price support effort!
Bond bubble stretches all the way to Mongolia:
ASIA MARKETS
Updated November 28, 2012, 7:17 p.m. ET
Credit Markets
Mongolia Binges on Bond Bonanza
By ALEX FRANGOS and PRABHA NATARAJAN
Mongolia, a country that has been rescued five times in 22 years by the International Monetary Fund, sold $1.5 billion in debt Wednesday in its first government bond offering.
The sale, equal to nearly one-fifth of the size of Mongolia’s economy, is akin to the U.S. government borrowing $2.5 trillion in one bite.
“This is a big-bang entry into global capital markets,” said Jan Dehn, co-head of research for Ashmore Investment in London, which manages $68 billion and had planned to buy the bond.
Mongolian officials, who have been visiting investors this week to drum up demand, sold more than 80% of the two-part deal. A $500 million, five-year bond sold at its launch price of 4.125% yield. A $1 billion, 10-year bond sold at 5.125%, according to people familiar with the deal.
The interest was a sign of the hunger among global bond buyers for any investment that offers a relatively high yield.
Buyers defied nagging worries about whether Mongolia, a country wedged between China and Russia, is a good investment. The nation’s foreign-exchange reserves are shrinking, inflation is at double digits and the stock market has fallen 30% this year. The government also has made several decisions seen as unfriendly to business.
Best known for its founding father, Genghis Khan, Mongolia was the emerging-market world’s wunderkind just a few years ago. Gross domestic product rose 17% to $8.6 billion in 2011, just two years after the country needed a loan from the IMF to bailout its banking system.
“Mongolia was the hot place to be two to three years ago,” says Laurent Ettedgui, a portfolio manager at Quam Asset Management in Hong Kong.
…
Resource rich and high IQ people, its bonds are probably a better investment that U.S. bonds but that is damming with faint praise.
Did you miss the headline story about how the Fed plans to keep plowing money into the bond market into 2013?
What if it turns out that all this bond buying has absolutely no impact on the labor market, and merely serves to drive housing prices back towards unaffordable heights, rewarding deep-pocketed investors and punishing households who just want a home to live in?
U.S. NEWS
November 28, 2012, 3:24 p.m. ET
Fed Stimulus Likely in 2013
Bond Buying Is Expected to Continue in Effort to Spur Slow-Growing Economy
By JON HILSENRATH
Three months after launching an aggressive push to restart the lumbering U.S. economy, Federal Reserve officials are nearing a decision to continue those efforts into 2013 as the U.S. faces threats from the fiscal cliff at home and fragile economies elsewhere in the world.
Federal Reserve officials are nearing a decision to continue stimulus efforts into 2013 as the U.S. faces the fiscal cliff and fragile economies elsewhere in the world. WSJ’s Chief Economics Correspondent Jon Hilsenrath reports. Photo: AP Images.
The U.S. economy has been growing at a skimpy rate of around 2% for much of the year. While Fed officials have been encouraged by progress in the housing and banking recoveries, business uncertainty and hiring restraint are still holding back growth. And if President Barack Obama and lawmakers fail to reach an agreement before year-end, the fiscal cliff’s roughly $500 billion in tax increases and spending cuts could kick in next year and throw the economy back into recession.
For now, investors have shown optimism over the fiscal negotiations, with stocks rising early Wednesday and continuing higher after The Wall Street Journal reported the Fed’s likely intentions. The Dow closed up 106.98 points, or 0.8%, to 12985.11. Asian markets edged higher on Thursday morning, with Japan up 0.6% and South Korea up 0.9%.
Central bank officials face critical decisions at their next policy meeting Dec. 11-12. The most pressing is whether to move forward with bond-buying programs in which the Fed is accumulating immense stockpiles of long-term mortgage-backed securities and Treasury bonds. The bond-purchase programs are meant to drive down borrowing costs, and in turn boost the prices of assets like stocks and homes, and stimulate hiring, spending and investment.
The Fed signaled strongly in September that it was inclined to sustain these programs and markets have anticipated some combination of bond purchases will continue next year. Several Fed policy makers have suggested in recent interviews and public speeches that they support more bond buying. At their meeting next month, officials will debate extending the programs and hear staff presentations on their impact.
The Fed has been experimenting with different bond-buying programs since late 2008. In all, it has accumulated $900 billion in mortgage securities and more than $1 trillion in long-term Treasury securities since then. Critics of these policies inside the Fed and out worry that the programs could cause inflation or asset bubbles.
Moreover, Fed officials acknowledge that the programs aren’t as powerful as they were during the financial crisis. But they believe they are still helping the economy, especially housing, and the risks are manageable.
Fed Chairman Ben Bernanke said at his news conference in September that the central bank would review all its asset purchases at the end of the year, when one of the bond-buying programs expires.
…
Don’t look now, but the Chinese stock market is tanking to levels last seen in the wake of the Fall 2008 financial meltdown.
I guess it is up to the Chinese government to turn the situation around, at least according to this writer.
November 29, 2012, 3:00 a.m. ET
China Shares End Down Led By Brokerages On Share Glut, Earnings Fears
By Esther Fung
SHANGHAI–China’s shares ended down Thursday for a fourth consecutive session, led by brokerages, on unabated concerns over a possible share glut and weak corporate earnings despite some signs of bargain hunting during the session.
The benchmark Shanghai Composite Index, which tracks both A and B shares, ended down 0.5%, or 10.03 points at 1963.49, its lowest close since Jan. 16, 2009 when the index closed at 1954.44. It lost some steam from an intraday high at 1980.56. The Shenzhen Composite Index fell 1.0%, or 7.54 points to 743.43.
“The market is likely to stay weak until the government launches significant market-friendly measures, such as more buyback plans from state-owned companies and another cut in banks’ reserve requirement ratio,” said Amy Lin, an analyst with Capital Securities.
The Shanghai index is tipped to consolidate between 1950 and 2000 in the coming sessions, as there aren’t any foreseeable catalysts that could boost the severely depressed market, traders said.
Securities companies were down, on expectations of weaker earnings amid the sharp declines in the stock market in recent weeks.
…
China, is the one of the few countries in the world that could afford more stimulus but they do not do it since they know such sugar eating only hurts an economy over the long run. Maybe the new leaders might if the people get restless but that has not happened yet.
I seem to recall that the last time they tried sugar that it fueled food inflation in a big, problematic way. Of course if people get laid off that could create other problems.
China, is the one of the few countries in the world that could afford more stimulus but they do not do it
They don’t? Since when? Seen their ghost cities?
Alpha, I said more. As Colorado said they had problems with the last one, which included food inflation and ghost cities. We keep doing it over and over. Meanwhile China has not done a new one despite many calling for it.
What do the chinese know that we don’t?
That they have about 1 billion poor people who would be decimated by food inflation?
I just came back from a month long trip to South Asia and couple of middleeastern countries. Talk about inflation. India and Nepal see about 10% inflation every year if the people I taked to to be believed. Kathmandu is more expensive today then your typical midwestern cities (outside of Chicago).
Things are different in UAE and Qatar. They are kicking extremely well. Dubai is really impressive, I must say. Lots and lots of ex-pats.
2 things that was common in all these four countries. Everybody’s on Facebook and everybody wants an iphone.
Go long FB and AAPL.
If you have a billion mouths you can’t feed, decimation may be an economical option. If it were still Mao n charge, I think the big question would be is whether or not decimation was enough?
One way to increase dry bulk shipping rates: Scrap more ships.
Oh, and it looks like QE4 may be on the way, or at least a beefed-up QE3-to-infinity-and-beyond.
BREAKING NEWS
Dudley Sees Unacceptable Joblessness as More Bond Buying Weighed
Iron Ore Transport Rates Seen Surging as Ships Scrapped: Freight
By Isaac Arnsdorf - Nov 5, 2012 4:01 PM PT
The beaches of Bangladesh are filling with unwanted ships waiting to be scrapped, driving up prices for transporting iron ore and halting losses for STX Pan Ocean Co. (028670), South Korea’s biggest owner of the carriers.
The cost of shipping iron ore in Capesize vessels will increase almost sixfold to $14,900 a day in December from the 2012 low, according to prices of swaps used by traders to hedge freight costs that reveal the direction of the market accurately about 60 percent of the time. Prices are rising as the fleet shrank 0.6 percent last month, its first contraction since November 2008, according to data from IHS Inc. (IHS), an Englewood, Colorado-based research company.
Enlarge image Iron Ore Transport Rates Seen Surging as Ships Scrapped
While the fleet has diminished, STX Pan Ocean’s earnings will rise more slowly because there are still too many vessels, the company said in an e-mailed response to questions. The market will likely improve next year, it said.
Earnings for Capesizes tumbled 94 percent from the 2008 record after the supply of vessels rose three times faster than demand, leading owners to sell ships. Carriers with total capacity of 12.8 million deadweight tons — enough iron to build 150 Empire State Buildings — will be dismantled this year, estimates Clarkson Plc (CKN), the world’s largest shipbroker. So many ships are being broken up that Bangladesh, the world’s second- largest recycler, is low on space on its beaches.
“Yards are pretty close to capacity and Bangladesh is running out,” according to Anil Sharma, chief executive officer of Global Marketing Systems Inc. in Cumberland, Maryland, the largest buyer of obsolete carriers. “This is the biggest boom for scrapping of Capesizes we have seen in history.”
STX Shares
Rates for the vessels rallied more than fourfold since the end of August to $15,074 a day, according to the Baltic Exchange, the London-based publisher of shipping rates used as benchmarks for about 75 percent of commodity cargoes. The ships need $16,400 to break even, Pareto Securities AS estimates.
Shares of STX Pan Ocean, based in Seoul, dropped 44 percent to 3,410 won ($3.13) this year and will rebound 45 percent to 4,929 won within 12 months, the average estimate of 15 analysts compiled by Bloomberg showed. The company will report net income of $1.8 million for 2013 after losing $221.3 million this year, according to the average of three estimates.
The company’s fleet, which includes oil tankers and container ships, comprises the highest proportion of Capesizes among the world’s five largest owners, Clarkson data show. The three biggest are Nippon Yusen Kaisha K.K., Japan’s largest line, Kawasaki Kisen Kaisha Ltd. (9107) and Mitsui O.S.K. Lines Ltd.
Dismantled on Beaches
Capesize demolitions will rise 22 percent this year, Clarkson estimates. A 15-year-old vessel was worth $4.4 million more than its scrap value in October, the smallest premium since at least 2001, the shipbroker’s data show. The fleet shrank 0.6 percent to 272.9 million tons last month, according to IHS data compiled by Bloomberg.
Ships sold for scrap are driven onto beaches and dismantled. The hulls and machinery are turned into steel for local industries, supplying half of Bangladesh’s needs, the World Bank said in a December 2010 report. Rising demolition demand is resulting in more ships being scrapped in India, which still has spare capacity, Sharma said.
While the fleet has diminished, STX Pan Ocean’s earnings will rise more slowly because there are still too many vessels, the company said in an e-mailed response to questions. The market will likely improve next year, it said.
..
So much for the price of steel.
Texas scraps ships too maybe just high tech ones though
A former Navy vessel that served in Operation Desert Storm is expected today to begin its final voyage - towed from its home in the James River Reserve Fleet, also known as the “ghost fleet,” to a Texas scrap yard for disposal.
The Cape Cod, a destroyer tender measuring 643 feet long, is slated to start down the James River about 7:30 a.m. on its way to Brownsville, Texas, where it will be stripped, cut up and recycled, according to the U.S. Maritime Administration.
Esco Marine, a Texas scrap yard, paid the government $3.1 million for the rights to the Cape Cod. It must pay for the towing but gets to keep all profits from scrap steel and other metals salvaged
I’m missing the logic of federal student loans with no underwriting. How could it not end in a catastrophe?
How could it not end in a catastrophe?
Those loans were underwritten, by the feds, i.e. all of us. Part of a long effort to pimp & boost continuously higher expenditures on education. It amounts to slavery, but fair & square.
Slavery = involuntary servitude.
Students loans = voluntary servitude.
Ticket to the big leagues = begin lifetime of debt sevice
U.S. NEWS
Updated November 28, 2012, 11:48 a.m. ET
Federal Student Lending Swells
By JOSH MITCHELL
[Max Whittaker/Prime for The Wall Street Journal
Josanne Baxter-Engish, at home in California with her son, above, said she stopped repaying $2,900 in student loans because she can't afford it.]
The federal lending program designed to make college education available to everyone is creating a pile of debt so large it is fanning worries that it has become too easy to borrow too much.
U.S. student-loan debt rose by $42 billion, or 4.6%, to $956 billion in the third quarter, the Federal Reserve Bank of New York said Tuesday. Overall household borrowing fell during that period.
Payments on 11% of student-loan balances were 90 or more days behind at the end of September, up from 8.9% at the end of June, a rate that now exceeds that for credit cards. Delinquency rates for all other consumer-debt categories fell or were flat.
Nearly all student loans—93% of them last year—are made directly by the government, which asks little or nothing about borrowers’ ability to repay, or about what sort of education they intend to pursue.
President Barack Obama championed easy-to-get loans during the campaign, calling higher education “an economic imperative in the 21st century.” A spokesman for Education Secretary Arne Duncan said the goal is “to make student loans available to as many people as possible,” and requiring minimum credit scores would block many Americans from going to college.
But rising student-debt burdens and stories about students and parents drowning in debt, coming just a few years after aggressive mortgage lending triggered a financial crisis, is focusing attention on risks to the government and borrowers.
“Is there any way the federal government could possibly come out to the good?” Sen. Bob Corker (R., Tenn.) asked at a Senate Banking Committee hearing in July on student loans, noting that the government demands no collateral and has no underwriting requirements. “What we’re really doing is piling up debt down the road the same students are going to have to pay off.”
…
“…which asks little or nothing about borrowers’ ability to repay, or about what sort of education they intend to pursue.”
Sounds like a surefire way to throw money away. No private lender could operate this way and stay in business.
TBTF private ones could like GMAC, Countrywide, BofA, Wells Fargo, JPMorgan-Chase, etc.
Real actual private lenders? No.
Aren’t the TBTF lenders technically arms of the U.S. government, given how much federal bailout money is available to provide them with free insurance?
Arms of the federal govt, yes. With the top brass and CEO making outrageous bonuses - also yes. The best of both worlds. Go USA.
Further confirmation: I’m sure all of you have seen photos of Jamie Dimon’s presidential seal cuff links.
Whenever government gets involved/subsidies an industry it will eventually destroy that industry.
See the housing market.
See the health care market.
See the education market.
When did these markets last work?
When government left them ALONE except for enforcing basic anti-fraud and good accounting practices.
If a bank, hospital or college took on too much risk or made bad decisions - it went BANKRUPT.
BTW - during these crazy “good old days” the government actually threw bankers in jail. It happened quite often.
Nowadays???
That’s Bush’s fault too.
Does that mean the existence of state universities is a bad idea, an unnecessary interference in the “education market”?
Engish?
I am curious why they decided to drop “l”?
And the NAR-scum will continue to pimp overpriced real estate and “pent-up demand” from the broke-a$$ Lucky Ducklings. Because the solution to drowning in debt is more debt. LOOSERS!
I’m missing the logic of federal student loans with no underwriting.
Oh, you can be turned down for Federal Student Loans. They do credit checks. They might be more lenient than the bank, but people do get turned down, especially for the Parent Plus loans. I know people who have had loans denied due to poor credit. Even people with credit scores in the high 600’s.
There are no credit checks for federal Stafford loans made directly to students.
But IIRC the student direct loans are limited to about $6000-7000 a year. Which means parents have to sign on the dotted line for Parent Plus loans for anything above that. I should know, as I have done that. And they ran a credit check on me.
We were probably among the last generation that could work 25 hours a week while carrying a full-time undergraduate course load, paying very cheap rent with roommates, and afford food. And we did not have a car the first three years of college. In state tuition and fees at State U where we went is now $10,000 (excluding room and board).
This option is now basically gone.
The only good options left are a) Ivies/MIT/Duke/Stanford (very generous financial aid, but worth the cost even if you have to write a check), b) West Point/Annapolis/USAFA (excellent education, free) or c) full ride or very substantial scholarship to a flagship state u. (decent education, worth it if free or nearly free)
The rest is pretty hardscrabble. I have no idea what I’d do if it came down to it. Luckily, birth rates among educated people are falling dramatically, so it’s going to be much easier for my [future] kid to get into a top school in 2035 than it was for me in 2000. Dramatically easier. This is the one and only reason I am thanksful for educated white people no longer breeding.
If not for a US government loan, I’d have never been able to go to tech school.
Applied at every local bank, they all told me to go pound sand.
The government got their money back in less than 5 years, plus interest. And 30 years of better tax receipts vs. what I could have earned as a ditch digger.
Just because it sucks now, doesn’t mean it always sucked.
In state tuition and fees at State U where we went is now $10,000 (excluding room and board).
My kids are paying $5000 each, but they did get some scholarship money from the school.
c) full ride or very substantial scholarship to a flagship state u. (decent education, worth it if free or nearly free)
I seem to recall reading once how upper middle class kids in California are more likely to go to UC than to Stanford or USC, and the UC was considered to be more than “decent”. Not all State U’s and colleges are the same.
Just because it sucks now, doesn’t mean it always sucked.
The devil is always in the details.
“Luckily, birth rates among educated people are falling dramatically, so it’s going to be much easier for my [future] kid to get into a top school in 2035 than it was for me in 2000. Dramatically easier.”
If the education bubble bursts, the top schools may be the only ones left and their standards may be higher than they are now.
If you already have marketable job skills (the ability to repay a loan) then you don’t need a student loan. Kids coming out of high school don’t usually have 800 credit scores. At some point, there has to be a way to bootstrap this. Otherwise, only people with good jobs would be able to get good jobs.
Perhaps “investment in individuals” would be a better answer in some circumstances. I’ll pay for your college education, mentor you, help you find a job, etc… in return for this “investment”, I’ll get ~3%? of future gross earnings. Such an arrangement would give me a real incentive to ensure you got a valuable, successful education - and I would probably do everything I could to help you have a successful career. “I” might be big corporation.
Some old guy made an offer like that to one of my daughters.
Offered to pay for her college, since what she is currently doing is a “waste of talent”.
Left unsaid was how she was going to pay this loan back.
She told him she would pass……
Now that’s what I call the free market at work!
Having three relatively “hot” daughters, and a brother who played football for a Big 12 school has really been an eye opener.
All kinds of old lechers trying to do the daughters “favors”.
All kinds of good-buddy deals for athletes in the Sport/TV/Entertainment complex, that the average, untalented/unathletic Joe Schmoe has ZERO access to..
All kinds of good-buddy deals for athletes in the Sport/TV/Entertainment complex, that the average, untalented/unathletic Joe Schmoe has ZERO access to.
I did my little bit to fight back … I cancelled my satellite service. I realize that in the big picture it’s a futile act as J6P absolutely has to watch his beloved Broncos play, not to mention the countless hours of sports talk shows talking about his beloved Broncos. So those turnip brained jocks will get their jobs at ESPN.
A person at 18.
Illegal to drink by law
Can get married and have kids legally
Can fight and kill for his country legally
Can go $200,000+ in debt for his/her education and be a debt slave for the rest of his/her life.
Hope and change.
Hope and change
It’s Bush’s fault!
FWIW, few undergrads get into that kind of debt. Most graduate with about 20K of debt, which is still a lot.
Thanks to MADD.
Can go $200,000+ in debt for his/her education and be a debt slave for the rest of his/her life.
So you don’t like our free market system? Are you calling for a return to the days when state U’s were funded and tuition was low? Right now in the Centennial state State U’s only get about $3000 per student from the taxpayers, and the way things are going it will soon be zero. Our State U’s spend less than half per student than the local Private U’s.
Meanwhile our competitors have affordable, state funded, higher ed.
The free market DIED with massive government intervention in the educational system.
The good old days of low cost college EXISTED precisely because of the LACK of massive government subsidies and loan guarantees.
Colleges had to EAT their bad loans and their bad decisions.
So they were very prudent with their resources and spending money.
Liberals and socialist are funny people. They destroy everything they touch and their SOLUTION to what they have destroyed….
EVEN BIGGER GOVERNMENT AND EVEN MORE GOVERNMENT INTERVENTION.
You think you guys would have learned by now with the housing bubble, green energy bubble and the medical care industry…
http://www.breitbart.com/Big-Government/2012/08/03/Obama-administration-paves-the-way-for-sharia-law
So you don’t like our free market system? Are you calling for a return to the days when state U’s were funded and tuition was low?
2banana would presumably consider the founding of state universities to be a corruption of the free market in education. Unless it’s only federal government intrusion that so terrible. Sometimes it’s hard to keep that straight.
A person at 18.
Illegal to drink by law
Can get married and have kids legally
Can fight and kill for his country legally
Another case where the blue states held money over the heads of the red states to force their will on them. Wyoming’s drinking age was the same as the draft age until the Feds threatened to withhold highway funds.
Good argument for reducing the size/influence of the federal government…
funds aren’t taken/redistributed just to be more “fair”. It’s also to force behaviors/legislation at the state level.
The only way to be “fair” is not to have any underwriting. Otherwise it would be biased. The same thing happened with housing. It didn’t matter that the ONLY criteria was ability to pay, and credit-worthiness, meaning, if whenever you got a loan, you had a record of actually paying it, upon the terms agreed.
Turns out, that the criteria was racist, so needed to be scrapped.
That got the real lending going….and the “bubble”.
Dumb questions of the day:
1) At what point did Uncle Sam decide to crowd out the private banking system by offering myriad flavors of loan with no underwriting?
2) How much longer can this continue before it ends?
Naked Capitalism serves up a major can of whoop-ahhh…
Escalating Delinquency Rates Make Student Loans Look Like the New Subprime
Is now the time to buy, before the Fiscal Cliff gloom disperses?
Is there a more cloyingly self-sycophantic financial writer in print than this one? “There has never been a better time to buy stocks because, according to my ruminations,…”
Nov. 29, 2012, 7:34 a.m. EST
Why the fiscal cliff is bullish
By Michael A. Gayed
I’ve been noting in my writings and in my various tweets since Monday of last week that intermarket trends have been behaving more positively following the elections.
The post-QE3 corrective period has thus far, with hindsight, looked stunningly similar to the May “mini-correction” which was my base case for how the decline would play out, within the context of the “Fall Catalyst” idea of new all time highs in the Dow by end of year.
Stock market resilience cannot be denied. The S&P 500 is still on track for being the third best year in a decade performance-wise, and the German DAX is bumping up against 25% returns for the year. For all intents and purposes, equities have indeed behaved in a reflationary way.
…
Zimbabwe. If you just look at nominal prices he might be right. Was looking at the just released GDP number looked good if you do not dig into it. Why the increase from 2 to 2.7%. Two main factors, one: much more government spending in the quarter, I am sure the upcoming election has nothing to do with it. Two: much more inventory building. How many Volts did Government Motors add to its lots? (sarcasm) BTW, building inventory in one quarter usually means a cut back in production in the next. Just like the falling inventories when Obama took office, meant an increase in production the following quarters.
time to buy
Time to buy more of these. Oops, they’re sold out!
http://www.cheaperthandirt.com/product/AMM-649
Psshh. CTD are a bunch of rip-off artists anyway. Yeah, I know, charging what the market will bear, but seriously? Their prices tend to be way out of line for most stuff. And the won’t ship to CA, so F ‘em.
Never bought from CTD, just sharing the link. We reluctantly navigate the land whales at Wally Mart to stock up. It’s fun seeing the reaction of the clerk and other customers when we empty the case of all their available Wolf 7.62×39
Pick a card, any card.
You have been a renter for the last 10 years?
No soup for you!
Thursday, November 29, 2012 Connect with HUD
Avoiding Foreclosure
The Obama Administration has implemented a number of programs to assist homeowners who are at risk of foreclosure and otherwise struggling with their monthly mortgage payments. The majority of these programs are administered through the U.S. Treasury Department and HUD. This page provides a summary of these various programs. Please continue reading in order to determine which program can best assist you.
Making Home Affordable
The Making Home Affordable © (MHA) Program is a critical part of the Obama Administration’s broad strategy to help homeowners avoid foreclosure, stabilize the country’s housing market, and improve the nation’s economy.
Modify or Refinance Your Loan for Lower Payments
•Home Affordable Modification Program (HAMP): HAMP lowers your monthly mortgage payment to 31 percent of your verified monthly gross (pre-tax) income to make your payments more affordable. The typical HAMP modification results in a 40 percent drop in a monthly mortgage payment. Eighteen percent of HAMP homeowners reduce their payments by $1,000 or more. Click Here for more information.
•Principal Reduction Alternative (PRA): PRA was designed to help homeowners whose homes are worth significantly less than they owe by encouraging servicers and investors to reduce the amount you owe on your home. Click Here for more information.
•Second Lien Modification Program (2MP): If your first mortgage was permanently modified under HAMP SM and you have a second mortgage on the same property, you may be eligible for a modification or principal reduction on your second mortgage under 2MP. Likewise, If you have a home equity loan, HELOC, or some other second lien that is making it difficult for you to keep up with your mortgage payments, learn more about this MHA program. Click Here for more information.
•Home Affordable Refinance Program (HARP): If you are current on your mortgage and have been unable to obtain a traditional refinance because the value of your home has declined, you may be eligible to refinance through HARP. HARP is designed to help you refinance into a new affordable, more stable mortgage. Click Here for more information.
Underwater” Mortgages
In today’s housing market, many homeowners have experienced a decrease in their home’s value. Learn about these MHA programs to address this concern for homeowners.
•Home Affordable Refinance Program (HARP): If you are current on your mortgage and have been unable to obtain a traditional refinance because the value of your home has declined, you may be eligible to refinance through HARP. HARP is designed to help you refinance into a new affordable, more stable mortgage. Click Here for more information.
•Principal Reduction Alternative: PRA was designed to help homeowners whose homes are worth significantly less than they owe by encouraging servicers and investors to reduce the amount you owe on your home. Click Here for more information.
Assistance for Unemployed Homeowners
•Home Affordable Unemployment Program (UP): If you are having a tough time making your mortgage payments because you are unemployed, you may be eligible for UP. UP provides a temporary reduction or suspension of mortgage payments for at least twelve months while you seek re-employment. Click Here for more information.
Managed Exit for Borrowers
•Home Affordable Foreclosure Alternatives (HAFA): If your mortgage payment is unaffordable and you are interested in transitioning to more affordable housing, you may be eligible for a short sale or deed-in-lieu of foreclosure through HAFA SM. Click Here for more information.
•“Redemption”is a period after your home has already been sold at a foreclosure sale when you can still reclaim your home. You will need to pay the outstanding mortgage balance and all costs incurred during the foreclosure process. Click Here for more information.
FHA-Insured Mortgages
The Federal Housing Administration (FHA), which is a part of the U.S. Department of Housing and Urban Development (HUD), is working aggressively to halt and reverse the losses represented by foreclosure. Through its National Servicing Center (NSC), FHA offers a number of various loss mitigation programs and informational resources to assist FHA-insured homeowners and home equity conversion mortgage (HECM) borrowers facing financial hardship or unemployment and whose mortgage is either in default or at risk of default.
http://portal.hud.gov/hudportal/HUD/topics/avoiding_foreclosure - 49k -
Which one of these has the Obama Administration not implemented as a program to assist homeowners who are at risk of foreclosure?
(MHA)
(HAMP)
(PRA)
(2MP)
(SNORK)
(UP)
(HAFA)
(HARP)
The free sh*t army is quite happy.
Free money!
Free houses!
Even more free money in principal reductions.
No moral hazard here!
We love Santa Obama Clause!
So sorry for you dirt-bags that are renting or bought a house you could afford.
See the youtube google search terms posted below.
And there’s a lot more of these people than there are of you
The free sh*t army will never lose! They will get more and more and more free sh*t forever and ever and ever. This is your children’s future Amerikwa. Don’t fight Idiocracy, embrace it, as it’s the only future we have
Until we end up like Greece…
I have always wondered how Rome fell.
Now I know.
Too many moochers, government playing Santa Claus and the people that actually work or produce something eventually just stop and either leave or become part of the moocher class…
http://www.obamasrealfather.com/frank-marshall-davis/
http://obamaphone.net/how-do-i-get-an-obama-phone
Talking to a guy at the gym yesterday who has a rental apartment building that accepts HUD renters. He said there is a 23-year old single mom with seven kids that gets $3800 a month from the government for housing and an additional $2800 a month worth of food stamps. Free phone and free electricity. No job for her. This country is f*cked.
Seven kids at age 23? That is awesome! Idiocracy in action, baby!
Do a google search on:
“youtube obama gas mortgage”
“youtube detroit obama money”
“youtube obama phone”
Now that’s Hope and Change we can believe in!
“youtube obama gas mortgage”
“youtube detroit obama money”
“youtube obama phone”
If you took everthing else out and just left “detroit” that would still be racist!
Africans are “sun people” and whites are “ice people”. Ice people are Racist®.
http://en.wikipedia.org/wiki/Leonard_Jeffries
23 years old and seven children, it is not just the country that is getting f*cked. Some day, we may just decide that it would just make sense to offer these people $30,000 or $50,000 to be sterilized. Easier on the tax payers in the long run and easier on society for other reasons such as crime. Want to bet how many of her children are going to turn out gang bangers and be incarcerated at $30,000 a year?
I am pretty sure saying “tax payers” is also racist.
This is one of many reasons I am pro choice.
There is no better reason to kill kids because they had stupid parents!
Well when one of those 7 misunderstood teenagers break into your car and rip out your expensive stereo and smash all your windows for good luck……your going to be mad at yourself for not having full glass coverage.
PS … my old Ford SW still has its original cassette stereo….i use a cassette adapter to run the ipod.
OR
They could have been put up for adoption
OR
If this woman had to PAY for her own kids maybe she would not have so many of them
OR
If she got no benefits unless she was married she would have alot less kids
OR
If she had not gone to a failure of a public school run by the state and controlled by public unions she would have had the tools to make the correct decisions about her life.
OR
If we had school vouchers instead of failing public schools run by the state and controlled by public unions her kids would turn out OK
OR
you get the drift.
There are alot more decision points than just KILL THEM while they are young because they MIGHT turn out to be hoodlums…
They could have been put up for adoption
What if no one wants them? Especially the chocolately colored ones?
If we had school vouchers instead of failing public schools run by the state and controlled by public unions her kids would turn out OK
I doubt it. Most private schools do well because they have great kids in them and they don’t have to deal with special needs, illegals, gang bangers, etc.
My kids’ private school expelled a kid for bringing an ordinary knife to school. He wasn’t threatening anyone with it. It was one strike and you’re out. So what do you do with all the kids who be expelled?
There is certainly more to this story of the young woman with all the kids that has not surfaced. It is possible for a qualified person to be paid for caring for special needs kids, both with food & rent aid. If she is already stuck at home with a few of her kids, she may have decided to make a career out of raising kids, her own plus someone else’s. For the government, making these payments is cheaper than institutionalizing the special kids.
What if Black families dont want the chocolate ones??? Thats where the problem is….black families will not adopt other peoples kids…..so most wind up in many foster homes and state institutions….sad but true…….
They could have been put up for adoption
What if no one wants them? Especially the chocolately colored ones?
“What if no one wants them? Especially the chocolately colored ones?”
Got white guilt?
I once advocated on this blog that the government scratch out a $50K check to every kid in America when he/she hit 21 and managed to:
-Stay out of Jail
-Avoid having Kids.
All the Repubs asked why they should be rewarded for doing the “right” thing.
I hate to say this because I like you so much but this post is obviously racist.
Now if you would like to say anything negative about rich or white tea party people that would be fine.
PS
It`s probably best for everyone if you stay away from that racist at the gym.
obviously racist
Only registered Race Hustlers® in the Media-Academia-White-Liberal-Guilt-Complex get to decide what’s Racist®.
98% black support for Obama? Not Racist®.
Romney’s comments about “gifts” to Obama voters? Obviously Racist®.
Blank Panthers outside polling stations
Black Caucasus
La Raza
Not racist.
You are a Racist® if you click on this link:
http://jessejackson.org
and an additional $2800 a month worth of food stamps
I call BS on that.
Even in liberal California, her food stamp benefit would top out at $1202
http://foodstampguide.org/maximum-food-stamp-allotment-levels/
$3800 a month from the government for housing
Yeah, right. And they give her an Escalade too.
Dude, you can’t un-meme a meme. Nice try…
I agree the numbers seem high. However, it must cost the taxpayers quite a bit to support seven children and at 23, she is capable to produce quite a few more.
Idiocracy really did sum of the problem. The problem in this country and most of the world is that we think we can solve these issues with environmental solutions. All she needs is more education etc. These policies are costly and increasing ineffective since programs such as the GI bill removed the most intelligent people from the poor pool.
At its core these policies are based on a Marxist belief that people are primarily shaped by their environment and not their genetics. The easy answer to the question of nuture or nature is both. The harder and better answer is to try to determine which is the primary factor. I am in the genetics camp. The U.S.S.R shot its best farmers and went from a food exporter to being chronically short of food. Similarly, Cuba never recovered from the exodus of its smartest people to the U.S.
I always love these “I know someone who heard from someone else” stories about how the FSA is robbing the “producers” blind.
All of the kids I know are too busy shuttling between three minimum wage jobs, fighting the Taliban, or struggling thru school/college to get knocked up once, much less eight times.
I love the Repubs and their convoluted, inconsistent, logic…… (Essentially) Ban/limit abortion and birth control, because every live is precious. Then bitch about the supposed FSA, and insist that (fictional) single mom and her eight kids get zero assistance, and live under an overpass. Or a tarpaper shack, if she is lucky.
-Cut public education funding, and let the kids fall back into old-school cultural habits, instead of helping them stay in school and maybe teach them another way of doing things.
-They want to fight religious fundamentalism in the Middle East, but give our religious fundamentalists the keys to City Hall.
-Scream about their “Right to Bear Arms”, even if it means sacrificing someone else’s right to “life, liberty, and pursuit of happiness”, and sticking up for some sleazeball’s “right” to sell weapons at guns shows with no background checks to God knows who, instead of requiring that gun show buyers follow the same rules as people buying new guns at retail shops……..not only that, but fight against developing a system that gives someone else that option.
But to be fair, I’m an equal opportunity cynic. (True) Liberals have a bad habit of badly underestimating the costs of their policies, and over-estimating the benefits. Too many want a no strings attached, blank check from the US taxpayer.
Both sides don’t really want to solve the “poverty” issue, just spend enough money to string the problem along. Too many constituencies depend on it for money.
Liberals want to be seen as defenders of the underclass, without requiring some of the constructive cultural changes the underclass should ba making.
Conservatives want to walk the line between street riots and actually spending enough money to fix some of these problems, because they have set themselves up as being the only protection taxpayers have from the supposed “FSA”
“I love the Repubs and their convoluted, inconsistent, logic…… (Essentially) Ban/limit abortion and birth control, because every live is precious. Then bitch about the supposed FSA, and insist that (fictional) single mom and her eight kids get zero assistance, and live under an overpass. Or a tarpaper shack, if she is lucky.”
Also, insist that the child be born, but provide it with no prenatal care or nutrition for its mother while it is in the womb.
And prosecute drug addicted pregnant women for harming the children they don’t want to bear, even where there is no evidence that the drug of choice harms the fetus.
If the “life begins at conception” folks were really interested in preventing abortions, they would be promoting free birth control.
X, I think you better bring that IQ up a few notches before you submit another post. Fifty years of Progressive indoctrination at all levels has permeated your hollow skull. Get a grip.
“$3800 a month from the government for housing”
$3,375 a month here in SE Florida, where is liz pendens? I know there are a lot higher rents in some places around the country than here.
Some fancy neighborhoods open gates to Section 8
September 13, 2012|By Megan O’Matz, Sun Sentinel
The Sun Sentinel examined federal housing subsidy data from housing authorities in Broward and Palm Beach counties and found 230 homes commanding rents of $2,000 or more, up to $3,375 a month, from Section 8 families. Typically, tenants pay about one-third of their income toward the rent and the government pays the rest.
http://articles.sun-sentinel.com/2012-09-13/news/fl-high-hud-rentals-20120907_1_judith-aigen-white-neighbors-neighborhoods - 46k
I checked the local website. The maximum benefit where I live is $900 a month.
Then again, Florida is a wacky kind of place.
And as usual, Section 8 really didn’t take off until it became a profit stream for the REIC class.
Bingo!
“And they give her an Escalade too.”
I am pretty sure her drug dealer boyfriend has to supply that.
Web Search Results
1 - 10 of about 573,000 for my boyfriend is a drug dealer
Today`s local boyfriend drug dealer search.
Booking Blotter - Palm Beach Post
http://www.palmbeachpost.com/s/blotter/ - 76k - Cached - Similar pages
Browse photos of new arrivals at the Palm Beach County jail.
$2565/month is the most a landlord can receive for Section 8 in California.
Is that all?
That’s $30k+ per year.
The link you provided shows that there is no maximum.
…and an additional $2800 a month worth of food stamps…
I call BS on that.
The whole story is “talking to a guy at the gym yesterday ” hearsay. Right-wingers tell stories like this to one another all the time. It’s what they do. Veracity has nothing to do with it.
The whole story is “talking to a guy at the gym yesterday ” hearsay. Right-wingers tell stories like this to one another all the time. It’s what they do. Veracity has nothing to do with it.
I agree with this. This selective attention is mirrored by the MSM whenever they write about deadbeat FB’s - they always omit the most important details.
$80,000+++ per year in free sh*t from the government!
Wonder who she votes for??
So sorry for all you dirt bags who work, live below your means, scrimp and save and pay off your debts.
Hope and change.
“Hope and change.”
Panem et circenses.
Faith based sex education is expensive in the long run.
Yeah - faith in the government will always take care of you and be your daddy and husband no matter what bad decisions you make…
Interesting that Akin, Mourdock, etc support policies that will lead to breeding more free sh*t army voters who will vote against them
And don’t forget allowing illegals to sneak in to keep wages down, while beating their chest about being against them. They also get to breed future Dem voters.
But the angry white men will continue to complain about them,while Jose mows their lawns, Pedro busses their table at Applebee’s and Manuel paints their house.
A friend who is a retired social worker for Cook County corrected me recently when I was sputtering about women who have children for the gubmint benefits. She assured me that these women have all those kids mainly out of ignorance, benefits are capped after 3 kids and those women are struggling. Hearing this anecdote makes me wonder.
makes me wonder
Yeah, but the dozens of copy-and-paste Drudge Report links posted on HBB confirm all of the above. Every recipient of food stamps, disability, unemployment lives a life of luxury on the taxpayer dime.
You can’t un-meme a meme.
I am sure it’s possible to get multile benefits at the same time. Children benefits, disability, uneomployment all at the same time?
I’m sure it is possible, but I’m also sure that they affect each other. So if you’re collecting UE you’ll get fewer foodstamps than if you weren’t, or maybe none at all.
And don’t forget about the 20% extra benefits paid if the recipient is black.
It’s true. It was in a story in the Washington Times linked from Drudge Report.
Bet they would NEVER ask how can you afford an Iphone and collect welfare….now that’s racist!
Also know a woman who is getting $6k/mo alimony and child support from her ex and also has a SNAP card with $1200/mo food stamps benefit. People (aquaintences) living in houses without paying the mortgage for several years. People (aquaintences) still collecting UE benefits after three years. Dirtbags all. Even heard about a local black dude who files multiple tax returns each season and lives (well) off the proceeds.
But carry on with your shill tone.
a local black dude who files multiple tax returns
White people never do this.
“Dirtbags all. Even heard about a local black dude who files multiple tax returns”
Well, I of course I assumed he was black, but it was nice of you to confirm it.
Hearing this anecdote makes me wonder.
Stop wondering. We all know they live like kings.
BTW, I checked the local Section 8 website. The maximum benefit in my neck of the woods is $900 a month, and only applies if you qualify for a 4 bedroom house, otherwise it’s much less.
I must have been a real slacker when I was unemployed in 2009.
$400/week. No SNAP card. No Free $hit.
Just think of the fat hog I coulda been cuttin’………..
It’s your own fault for not getting in line for your free iPhone and Escalade.
Obama voters get 25% more free sh*t than people who didn’t vote at all. It’s true, it was in a New York Post article linked from Drudge Report.
She’ll be a grandma before 30….up i met a few in South Carolina like that…rare but they do exist.
Why You Should Rent To Section 8 tenants:
http://www.biggerpockets.com/renewsblog/2010/11/04/5-reasons-why-rent-to-section-8-tenants/
“Particularly in these tougher economic times, we are enjoying the benefits of Section 8 and here are 5 key reasons why we will continue to leverage this government funded program.”
“We’re able to get $1200-$1600/month in lower income neighborhoods (we don’t do war zones though….) where the purchase prices are less than $75K.”
i thought abortion was good because we are not willing to take care of them if they are born?
More than three million Britons are “underemployed” and want to work more hours, making them the hidden victims of the recession, official figures have revealed.
Modest decreases in the total number of jobless has masked the fact that one worker in 10 is being denied the chance to put in more hours and earn more money, Office of National Statistics (ONS) figures show.
One million more workers have reported being underemployed since the start of the economic downturn in 2008, with the total now standing at more than three million. More than three-quarters said they wanted to increase their hours, and many had asked their employers for more work but were turned down.
http://www.independent.co.uk/news/uk/home-news/working-but-not-for-long-enough-uks-3-million-underemployed-feel-the-pinch-8363656.html
I sure the increase is only due to people trying to improve their work life balance.
Is there a British equivalent of Applebee’s? How are the wait times for a table lately?
Little Chef?
unlikely my BIL refers to them as little theft and you never have to queue.
There are no queues at the local Applebee’s either. Their food is wretched, which is why Little Chef came to mind.
Wimpy’s!
‘What’s the wait at Wimpy’s?’, we wail.
Indian Palace?
And who do these people vote for?
The guy who promises more free cheese.
Until we end up like Greece. Then they riot.
————————————
When Work Is Punished: The Tragedy Of America’s Welfare State
Zero Hedge | 11/27/2012 | Tyler Durden
In Entitlement America, The Head Of A Household Of Four Making Minimum Wage Has More Disposable Income Than A Family Making $60,000 A Year.
…
For every 1.65 employed persons in the private sector, 1 person receives welfare assistance.
For every 1.25 employed persons in the private sector, 1 person receives welfare assistance or works for the government.
The punchline: 110 million privately employed workers; 88 million welfare recipients and government workers and rising rapidly.
Search result for “youtube obama detroit money”
http://www.youtube.com/watch?v=YfGLB8LO1aM
So about eight million private sector jobs disappear, thanks to lack of demand, and/or offshoring by the Masters of the Universe/Producer class.
Then they bitch about the private sector job count dropping.
No. It’s Obama’s fault.
Offshoring - its the American way!
<MoneyWatch) It’s one of the fundamental truths of real estate: Home prices and desirability are all about location, location, location. According to recent data from Coldwell Banker, there’s a $1.6 million price difference between similar homes in the nation’s most expensive real estate market, Los Altos, Calif. and the most affordable, Redford, Mich.
The average list price for a four-bedroom, two-bathroom home in Los Altos is $1,706,688, while the average price for a similar home in Redford is listed at $60,490. Nationwide, the average list price for a four-bedroom, two-bathroom home is $292,152.
http://www.cbsnews.com/8334-505145_162-57556067/the-most-expensive-real-estate-market-in-the-u.s/
Gambling is using mathematics to fleece people out of money.
Debt is using mathematics to fleece people out of money.
And maybe some people think they can outwit the system. And maybe they can. Great. I just want the government to stop insuring the House against losses. Adults want to engage in consensual contracts? Great. Just stop picking my pocket to pay off the House when it blows up.
http://www.bloomberg.com/news/2012-11-29/foreclosure-wave-averted-as-doomsayers-defied-mortgages.html
For folks’ reading pleasure. Again, I HATE when people call “listing shortages” actual housing shortages…THEY ARE NOT. A housing shortage is when there are not enough homes for the people who want to live in an area (without overcrowding, prices rising too quickly, etc.).
I want to learn more about the roughly 4,000 abandoned homes in Stockton. Are they in the good part of town (the north)? Or the bad part of town (the south)? How many homes in Stockton total (there are close to 300,000 people there)? What does this 4k represent as a percentage?
What is the overall vacancy rate? In 2011, the Census bureau estimated it at 9% (#27 out of 109). What is it now? For Grupe who apparently now has 1,000 rentals in that area, what is their vacancy rate?
No doubt Stockton has its foreclosure problems. But does it actually have a shortage of homes, or just a shortage of listings?
Well, if they are unavailable, even if it’s done artificially, it’s a shortage. Of course, artificial shortages can’t last indefinitely.
All true. What interests me is the magnitude of any artificial shortage and whether the making available of those unavailable homes would make a difference.
4,000 empty but unavailable homes in the context of a market that has been selling approximately 1,200 per month over the past year (approximate data for Stockton per Redfin) is different than a market with 4,000 empty and unavailable homes in a market that has been selling 400 per month over the past year.
You’d think a listing shortage could be easily remedied by cracking down on collusion to withhold listings from the market, no?
Yes, but again, magnitudes matter.
Of 100 empty and abandoned homes, how many are actually on the books of the banks, with them ABLE to list of they want?
How many are abandoned after the NOD, but before foreclosure sale date has been established?
How many are abandoned after the foreclosure sale date has been established, but before the sale occurs?
What about redemption periods (if applicable–CA, such a thing is only if judicial path is taken…less likely)?
The October data on Foreclosure Radar for Stockton gives the following foreclosure inventories:
Preforeclosure: 1,155
Scheduled for sale: 794
Bank Owned: 938
If every bank owned property were put on the market tomorrow, it would be 3-4 weeks of supply given the current sales pace. How many of those 938 need fix-up before they can be sold?
My point is that any “listing shortage” might be remedied in some places by changing foreclosure laws, or forcing in some way the banks to act more quickly. However, that listing shortage being remedied could be very short-lived if there isn’t a large supply of homes in shadow inventory. This is especially in states that are non-judicial in nature.
The listing shortage would go away for years in places like Florida, where there are a TON of homes in the shadows, but since they are a judicial state, the laws are giving the banks plenty of cover to not act quickly.
I’m paying close attention to what happens with New Jersey Senate Bill 2156 (a law yet to be signed by Christie that will allow much more rapid foreclosure of abandoned properties–even though it is a judicial state). This bill got support from both sides, and is even supported by the New Jersey Builder’s Association.
IF, following the signing of this law by Christie there isn’t a big uptick in foreclosure sales in New Jersey within 6 months, and REO listings in that same timeframe, I think we can all conclude that the assumed mass slow-playing of REO by the banks is real.
IF, following the signing of this law there IS a big uptick in foreclosure sales in NJ, and REO listings also go up pretty considerably, well, wouldn’t that be evidence that there is something else (other than collusion) slowing the sale of REO currently?
Because if collusion was the reason for lack of listing supply, the passage of this law won’t increase supply at all…
Like wheat is separated from chaff, the grassroot HBB’ers are parsed from the NARscum liars.
And like the whirlwind drives the dust, Pimpy is there to grind it into our eyes.
Only in the eyes of those who lie.
It’s still Bush’s fault.
true.
Looks like the NARscum lobbyist concerns may carry the day in the fiscal cliff negotiations.
Nov. 29, 2012, 3:50 p.m. EST
Why mortgage deduction may sail by fiscal cliff
By Ruth Mantell, MarketWatch
WASHINGTON (MarketWatch) — As Washington battles over fiscal-cliff compromises, it’s likely that lawmakers will kick the can or at most make only small adjustments to one tax break that analysts say is ripe for reform: the mortgage-interest deduction.
The popular tax break allows homeowners to deduct interest on the mortgage debt of first and second homes up to $1 million and the interest on debt from up to $100,000 on home equity loans or lines of credit. But critics say the enshrined deduction skews benefits in favor of wealthier home owners, and that there’s been inadequate thought on the break’s policy objectives.
The stakes are high: Phasing out the deduction could increase revenue by $215 billion through 2021, which would make a serious dent in achieving the kind of revenue that leaders including President Barack Obama and House Speaker John Boehner are seeking.
But there are better ways to support the economy, according to industry officials who say the break is of particular importance now given a still-fragile housing market. The National Association of Realtors, the heavyweight trade association, opposes any changes to the law, saying that most homeowners use the deduction at some point, and cutting the break would lead to a decline in home values of 15%.
…
But there are better ways to support the economy, according to industry officials who say the break is of particular importance now given a still-fragile housing market. The National Association of Realtors, the heavyweight trade association, opposes any changes to the law, saying that most homeowners use the deduction at some point, and cutting the break would lead to a decline in home values of 15%.
…
Imagine that. The crooks that manufactured phoney data every month for 5 years straight is out there misrepresenting the MID too.
So that makes the national housing market overvalued by what, 45%? 55%?
How to make lemon aid from climate ‘lemons’,
““You really can’t time Mother Nature,” he said. “We’re taking advantage of what she’s providing, which is low water.””
http://www.businessweek.com/news/2012-11-29/mississippi-s-pinnacles-of-thebes-should-fall-shippers
The Corps of Engineers by Nov. 30 plans to issue its request for proposals to remove almost 7,000 cubic yards of submerged rocks located on a stretch of river between St. Louis and Cairo, at the southern tip of Illinois.
In my first post on this subject I joked about buying some rain but this will be a lot cheaper. Some interesting info at that link. Barge traffic is the worlds leader in energy efficiency in moving tons of bulk material.
We’re Number One!
November 28, 2012
America’s 10 best- and worst-run states
California
California is 24/7 Wall St.’s “Worst Run State” for the second year in a row. Due to high levels of debt, the state’s S&P credit rating is the country’s worst, while its Moody’s rating ranks No. 2 — from the bottom. Much of California’s fiscal woes are tied to the economic downturn. Home prices plunged by 33.6% between 2006 and 2011, worse than all but three states. The state’s foreclosure rate and unemployment rate were the third- and second-highest in the country, respectively. But efforts to get finances on track are moving forward. State voters passed a ballot initiative to raise sales taxes as well as income taxes for people who make at least $250,000 a year. While median income is the 10th-highest in the country, the state also has one of the highest income-tax burdens. According to the Tax Foundation, the state is home to the third-worst business climate in the country.
…
And Arizona is #4 on the “Worst Run” list. Dang, I’m disappointed.
Debt ceiling can be held off until early March, CBO says
November 29, 2012, 4:39 PM
Raising the U.S. debt ceiling — one of the contentious pieces of ongoing fiscal cliff talks between the White House and House Republicans — can wait until mid-February or early March at the latest, a new report said Thursday.
The Congressional Budget Office says that the Treasury will be able to keep funding government operations without an increase in the debt limit “until mid-February or early March.”
The Treasury has estimated that it would hit the debt ceiling by the end of the year. In the past, Treasury has been able to put off reaching the borrowing limit by using several accounting gimmicks.
The timing of the increase is playing an important role in the fiscal cliff talks, since House Speaker John Boehner is demanding a “price tag” — spending cuts — for raising the limit. White House spokesman Jay Carney said that would be “deeply irresponsible.” Senate Democratic Leader Harry Reid says raising the limit must be part of a fiscal cliff deal.
The U.S.’s total outstanding debt is about $16.3 trillion, a level both parties want to bring down. The current debt limit is $16.4 trillion.
– Robert Schroeder
It’s
Bushes
Fault
Minot, ND - severe labor & housing shortage prompts Menard’s to take desperate measures.
Menard’s Inc., a competitor of Home Depot & Lowe’s, has taken an unusual approach to a shortage of labor & housing at its 16-year-old Minot ND branch. They will fly workers from their headquarters city in Eau Claire Wisconsin to Minot, provide them housing & give a stipend for their meals. Menard’s will fly a crew of workers 500 miles one way to North Dakota once a week to work four- or five-day stints at Minot, then return them home and bring in another crew for the next stint.
In Minot, “Everybody is looking for workers,” said John MacMartin, president of the Minot Area Chamber of Commerce. “Everybody is doing whatever they can to beg, borrow and steal employees.”
The latest unemployment rate in Minot is 2.2 percent, as many workers flock to higher-paying jobs in the Bakken oil fields.
MacMartin said he is aware of oil companies that arrange charter flights to bring work crews to the area every two weeks and recalls that Olive Garden brought in workers from other locations temporarily to staff a new restaurant in Minot, but he hasn’t heard of other retailers going to such lengths to find employees.
“In Menards’ case, they are reacting and trying to do whatever they have to do to make their business model work,” MacMartin said.
While Menards officials acknowledge they don’t know of other retail operations pursuing a similar strategy, their response appears to be a modern economic example of an old saying: “Desperate times call for desperate measures.”
The challenging labor situation was made more difficult by a massive June 2011 flood of the Souris River that displaced about 4,100 households — nearly 1,000 families are still living in FEMA trailers — and has left the city with a scarcity of hotel rooms and affordable housing.
As a result, discount hotel rooms are going for up to $169 a night, and the vacancy rate for apartments is less than 1 percent, with rents often too high for even employed residents to afford, forcing companies to come up with creative ways to find places for employees to live, MacMartin said.
http://www.weeklystandard.com/blogs/mcconnell-burst-laughter-geithner-outlined-obamas-plan_664210.html
Who was it on this board that said during the campaign that Obama’s plan was clear and “balanced” to include both spending cuts and tax increases?
This is double the tax increases he campaigned on, and no spending cuts.
I understand the art of negotiation, but we don’t have a lot of time to get something done…they better start moving toward a “balanced approach”, or we’ve going right over that cliff…
There is no cliff.
There might be a reckoning though. For now, probably only a circus.
Yes.
How does a cliff differ from a reckoning?
“mcconnell burst laughter”
McConnell has a chronic nervous titter/guffaw, coming out of his mealy mouth. He’s one of the most awkward, peculiar men in politics, at a top level.
Ashes to ashes,
Dust to dust,
trashing housing pimps,
Is a must.
Whirlwind drive dust into Realtors’™ eyes.
Force them to recant their unending lies.
Given all the Fed’s various confiscatory and redistributive monetary policy schemes, I’m very confused about why Uncle Sam needs to bother with rejiggering tax rates to address the fiscal cliff.
Why not just let the Fed continue with its stealth taxation and redistribution policies? So far, they have worked just great…
Op/Ed
3/04/2012 @ 3:29PM
The Fed and The Power To Redirect and Redistribute Wealth
A butterfly flapping its wings in a rain forest is nothing compared to a central banker flapping his lips. Federal Reserve Chairman Ben Bernanke recently told a congressional committee that, although he wouldn’t rule out another round of quantitative easing, he did not foresee another round in the near future. With this statement, the dollar rose compared to other assets, as reflected in a sudden 5 percent drop in the price of gold. The silver price also plunged, as did stock prices and Treasury securities.
Other than the good news – that the Fed won’t be inflating the money supply as much as it has been recently – it highlights the economic impact of one of many government-created agencies. The Federal Reserve Board, through its statutory power to create currency, does not create wealth but has the power to redirect and redistribute wealth.
When it inflates the money supply to hold down interest rates, it ensures that those who sell bonds get a higher price (at the expense of buyers) and that those who buy and hold bonds receive lower income streams than they would have. Investment choices and patterns are different than they would have been under a different monetary regime. Interest rates no longer reflect the preferences and decentralized market knowledge of millions of market participants. Instead, interest rates are manipulated by a small group of government-appointed individuals according to their much narrower judgment and preferences.
The exercise of such powers usually results in some kind of seemingly unconnected crisis or reversal. This is why periods of deliberately low interest rates are eventually followed by periods of deliberate and systematic increases in the Fed’s targeted interest rates. During the period of artificially low interest rates and expanding money supply, credit seems cheap and resources are directed into investments and uses where they might not otherwise have gone. It looks and feels like a boom of prosperity, but it is also a time when businesses are misled by low interest rates to invest as though capital is less scarce than it really is.
What can’t go on forever must stop. Expansion of the money supply eventually causes prices to be higher than they would have been. When inflation goes above the Fed’s preferred level, as it is now, they must slow or stop the expansion of money supply. Interest rates will rise commensurately. Families and businesses that can’t handle the higher rates might have to postpone future plans or reverse previous decisions.
If such reversals are widespread, we call that a recession. We recognize that something is wrong; we change our plans; and while we reorganize, people and resources are often unemployed. All this unfolds because some central planners thought that they could improve on the market.
…
All this unfolds because some central planners thought that they could improve on the market.
Maybe they did. This is their horrific result:
“Families and businesses that can’t handle the higher rates might have to postpone future plans or reverse previous decisions.”
Scary stuff. Maybe we should have a major depression instead? They were such character builders, in the Good Old Days.
POLITICS
November 29, 2012, 9:23 p.m. ET
Obama’s Cliff Offer Spurned
GOP Criticizes Proposal for Tax, Spending Increases With Limited Entitlement Cuts
By JANET HOOK, DAMIAN PALETTA and CAROL E. LEE
President Barack Obama made an opening bid in budget talks with Republicans that calls for a $1.6 trillion tax increase, $50 billion in infrastructure spending in 2013 and new power to raise the federal debt limit, a provocative set of demands that Republicans said represented a step backward in efforts to avoid looming tax increases and spending cuts.
The proposal marked an opening salvo in negotiations over the fiscal cliff and represented a particularly expansive version of the White House’s wish list, with a heavy focus on tax increases and spending proposals—including keeping in place a payroll-tax cut and extended unemployment benefits.
Republicans haven’t put any comparable offer on the table. They have indicated willingness to accept $800 billion in revenues over 10 years, half the amount Mr. Obama proposed. And they have sought far more in spending cuts in exchange for their concessions on taxes.
“No substantive progress has been made in the talks between the White House and the House over the last two weeks,” House Speaker John Boehner (R., Ohio) said after meeting with Treasury Secretary Timothy Geithner Thursday and speaking to Mr. Obama by phone Wednesday night. “The White House has to get serious.”
…