Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Posted By: Ben Jones @ 1:37 am
A buyout, a reorganization and the new face of job security
By Kat Aaron, nbcnews
“Apollo Global Management, a private equity firm, bought the former GE Advanced Material (Silicones & Quartz) in 2006 and renamed it Momentive. Two years later, in the middle of a three-year contract, Apollo slashed the wages of some 450 union workers by up to 40 percent…
Momentive produces silicones for dozens of familiar brand names… Workers used to make 700,000 pounds of silicone gum every week at the factory..they make less than 200,000 pounds.
In addition to its factory in New York, Momentive has factories in Ohio and West Virginia, Japan, Germany and Italy. A finishing plant started up in Chennai, India, in 2010, as did a joint venture in Jiande, China. Another Chinese plant is slated for completion in 2013.
One man, a 35-year veteran of the plant, dropped from $29.11 an hour to $17. Another, closing in on 20 years at the company, dropped from $29.11 to $19.50. A man with two years on the job kept his $29.11 wage rate. The longest-tenured worker, with more than 39 years of experience, went from $29.11 to $24.”
Yes, I know there are union haters on this board. But let me ask the union haters: will getting rid of the union really save these workers’ jobs? My suspicion says no. Even if NY goes right-to-work and each employee is on his own, it’s obvious that this company is going to slash wages for a few more years and then move the operation to China anyway. Why not just move it all now and save the pretense?
As long as there are workers in China, India, or the next tier down, who are willing to work like serfs for their bowl of rice, there really is no solution to this problem.
there really is no solution to this problem
No, there isn’t. And that’s exactly what the 1% want.
Global wage arbitrage = the future belongs to Lucky Ducky!
“… there is really no solution to this problem.”
Hence a young person just starting out should become choosy as to the type of job he selects as a career, keeping in mind just how transportable some of these career jobs are.
IMO two aspects of a career-type job should be given great weight:
1. Is the job transportable?
2. Is the job associated with a project of some sort? (For example: Landing a man on the moon was a project. When the project came to an end the layoffs began.)
3. Is the chosen career an overly popular one? Are there a lot of people choosing the same career that you are choosing?
Unfortunately you left one out:
4. How many H1B Visa workers will they be importing into the country to take your job for lesser pay?
Okay, then I’ll add another one:
5. Choose a career that is a bit hard, one that not just anyone off the street can do, one where knowledge and experience counts a lot.
Eliminate HB1 visas. It’s all a con to destroy American Citizens jobs in their own country.
It’s a sham that anyone would claim that Americans can’t produce enough doctors, nurses, engineers, scientists or whatever kind of workers are needed in industry.
We have lobbying groups that have supported shortages to maintain higher wages.
It’s a very easy way to STOP the take-over of American industries by foreigners.
However, this will be considered “racist” and America, after all, belongs to the “world”, not Americans.
6. Are you transportable?
No. Being a “citizen” means I am permanently rooted here. That’s the reason for citizenship.
If we simply erase all the borders, then anyone is transplantable to anywhere else.
Let us all worship Gaia, together, as we share in the “unity” of the One-World.
Dio, just who do you think these One-Worlders are, who are lobbying for H1-B, lobbying against tarriffs, and preaching closed borders in public while promoting open borders in private?
Eliminate HB1 visas.
However, this will be considered “racist”
Why would eliminating HB1 visas be considered racist? America is now only 65% white. Eliminating HB1 visas would be protecting the jobs of many races in America.
“I want my country (’s jobs) back”
Why would you want to limit the number of highly-skilled workers available to contribute to the American economy?
Because long-term, producing more Americans doing those highly-skilled jobs contributes much more to the American economy than wage-lowering, foreign hired guns.
H1-Bs are not highly skilled. There is a separate visa catagory for highly skilled workers.
H1-B visa applicants are not required to even have a college degree.
OK, thanks for the clarification.
But to reiterate my point, how is it in the U.S. interest to make it difficult for highly-skilled foreign workers to gain access to opportunities here?
Foreign nationals with extraordinary ability in Sciences, Arts, Education, Business or Athletics can qualify for an “O” visa.
I don’t know, what could go wrong if 100 million Chinese workers were imported and replaced all jobs held by native born Americans?
Isn’t the VISA thing a way to pay lower wages? Who would lobby for that? Unemployed US citizens using their expired unemployment benefits?
“…producing more Americans doing those highly-skilled jobs contributes much more to the American economy than wage-lowering, foreign hired guns.”
What’s preventing American young people from obtaining the requisite skills and education to do these jobs?
Owing so much in student loans for obtaining the requisite skills and education that they can’t afford to work for H1-B wages?
Supply and Demand. Cheaper foreign worker visas lower the demand for training high-skilled Americans because they increase the supply of foreign skilled workers.
Off-shoring lowers the demand for manufacturing workers.
Illegal workers lower the demand for American workers. Supply and demand.
American students will require spending $20k per year to get the same degree that an Indian can get from Indian Institute of Technology for $500 per year.
Throw in the fact that H1-Bs are tied to the company that hired them and if terminated must find work within 30 days or leave the country, you have a very “compliant” workforce.
I will give you a quote I heard from a boss:
(after giving me a pile of resumes) “Pick an Asian one, I can get them cheaper”.
H1-B visa applicants are not required to even have a college degree.
Not True, H-1B requires a minimum 4 year college degree to be placed in the lowest EB3 category. EB2 for Masters and EB1 includes the PhD professors who publish papers.
Btw, IIT in India is at par with MIT/Princeton/Caltech of USA. I googled and found that it is very hard to get into IIT. Even Americans cannot compete to get into those colleges easily. They were in fact established by USA and highly subsidised by Indian Govt.
Othern than IITs there are many other C grade universites that produce many H-1Bs that we today in USA.
H1-Bs: Foreign workers taking American jobs is a problem that ONLY government regulation can solve.
Anti-regulation people: Please explain how the free-market alone could EVER solve this problem. In the absence of government regulation prohibiting it, how could the free-market alone keep foreign workers from taking American’s jobs?
Anti-regulation people: Please explain how the free-market alone could EVER solve this problem. In the absence of government regulation prohibiting it, how could the free-market alone keep foreign workers from taking American’s jobs?
I’m not anti-regulation. Obviously the only way the free market can solve this problem is for the costs to equalize. In a bad way for Americans.
Home health aides are both in demand and non transportable. And the median salary according to this is $21,309. The future belongs to Lucky Ducky indeed
They’ll just start warehousing the patients instead of keeping them at home. Plenty of nurses aides can and already do come from other countries.
Hence a young person just starting out should become fluent in Chinese. FIFY
Should have a foreign passport in a country where there are jobs.
Not passport but a work visa is enough.
Once you have the passport, they can’t say no, because you are a citizen. Visas can be denied and revoked. And work visas can be next to impossible to get. Just because we hand out the H1-B’s like Halloween candy doesn’t mean that other countries are as generous.
Several of my nieces and nephews are enrolled in Chinese immersion grade schools.
I think having an American maid and chauffeur will be a status symbol in the future.
Your nieces and nephews will always have a job.
But there is a very high probability none of the kids in question will end up working as maids or chauffeurs…
Bertold Wiesner used to be an actor but as one of the new breed of super-butlers who can command salaries of more than £100,000 a year, his stage is the world.
With his matinee-idol good looks, the 33-year-old from Woodbridge in Suffolk maintains his actor training was “perfect” for becoming a butler.
“You wear a metaphorical mask. It’s the best role you’ll ever have in life because it’s 24 hours a day, 365 days a year.”
Sara Vestin, director of the recruitment agency Bespoke Bureau, said: “It is the accent - Queen’s English - the etiquette and status of the British butler and his style that they are buying into.”
A British butler, a French chef, a Brazilian mistress, and an American…umm…
I don’t think many of them have the luxury of being choosy.
“One man, a 35-year veteran of the plant, dropped from $29.11 an hour to $17. Another, closing in on 20 years at the company, dropped from $29.11 to $19.50. A man with two years on the job kept his $29.11 wage rate. The longest-tenured worker, with more than 39 years of experience, went from $29.11 to $24.”
And collectively, all the people like that are expected to continue spending just as much money as before, to keep the global economy going and executive pay going up.
And to pay just as much in taxes, to fund public employee pensions.
Getting the money from…? Well, borrowing had been the answer. Just how many implants can the one percent get to keep the demand for silicone up?
“And collectively, all the people like that are expected to continue spending just as much money as before, to keep the global economy going and executive pay going up.”
Also to keep up monthly payments on $400K+ mortgages…
“Just how many implants can the one percent get to keep the demand for silicone up?”
Also with the birth dearth, there will be fewer youngish females over the next few decades and hence waning demand for boob jobs, unless the cougar set decides to go all-in for breast enhancement.
Are boob jobs a big contributor to the national economy? I mean, out here in California they are, but the rest of the country? God save us all!
If you think the 1% are the only ones getting boob jobs, you need to get out more. Most are not in the 1%.
I’d guess a fair number of trailer trash gals get boob jobs…
And collectively, all the people like that are expected to continue spending just as much money as before, to keep the global economy going and executive pay going up.
Indeed, the media is now full of stories about stingy Christmas shoppers.
As long as there are workers in China, India, or the next tier down, who are willing to work like serfs for their bowl of rice, there really is no solution to this problem……………………..
I’d be inclined to disagree. World-wide wage arbitrage is a goal of the One-Worlders. Everyone is, after all, the same. No Nation. No Race. No Gender. No Religion is to be considered any better or more worthy of anything than anyone else.
So, yes, as long as we have the “we’re all in it together” ideology in a “one world” philosophy, then I see no solution. Open Borders. Citizens of the “world” (as Obama told his audience in Berlin).
However, we are Americans, and can put tariffs on Trade, keeping world-wide wages from destroying American Industries. Ditto with Europe. Ultimately, we could not support Union Scale for most of jobs, but could maintain a livable wage.
It would be difficult not to start trade wars, but tariffs were to be the primary source of government revenue before the FED and Income taxes.
Salary Raise in India this year is very LOW at only 11.2% as compared to 12% last year. Here in US, despite of inflation I’ve not seen a pay raise in the last 5 years. In fact a total of 5% in the last 10 years. Here in US inflation is not recognised by the Fed. People in India double their salaries in 5-6 years.
Don’t forget to factor in the exchange rate -USD vs Rupee.
It still doesn’t change the fact that in the 90’s, you could get 6-8 employees in India for the cost of 1 in America. Now it’s more like 2-3. Not a good trend for India. I know people outsourcing to South America and other countries looking for that super-sweet low-low pay rates they used to get from India.
India is to expensive for IT and call centres. They are looking for cheaper sites. Egypt and the Philippines are often talked about.
Egypt is on hold at present, but if they manage to work out the politics, expect a call from Chuck in Alexandria next time you talk to a call centre.
India also has an inflation rate of 8 or 10%.
What about inflation in US? Milk is goung to be double of what it is today Jan1st. It was half the price 3-4 years back. Same with majority of food items. Look at Gas prices. Look at all commodities.
Except Apple products, everything is expensive. I think US has big infaltion but not excepted by Govt. due to raises tied in COLA, SS and other entitlements.
(Where) Did you go to school, Martin?
Our government has choices that it refuses to make. Running a business in the US with US workers carries a boat load of extra costs compared to other countries. If our workers can’t be more productive, then the bosses have to make a decision.
Many times the companies leave, discover that they can’t get the quality that they need, then they come back. But if the product quality can be maintained at a reduced price, the bosses are doing their job.
Don’t the laws regarding stocks mandate that the upper management “has to” maximize the return on investment for the people that hold the stock?
And that is the crux of the matter.
Which “law” should we follow? Maximize overall standard of living for the middle class, or maximize profit for the investors? You can’t really have both, and we all know which side is favored at the moment.
The problem was made worse with the introduction of the 401K, which made the middle class both a worker for today and an investor for tomorrow, and thus forced J6P to work against himself. If J6P maintained standard of living at good pay, then his 401K suffered. If J6P endured low-pay, then at least he knows that those savings in labor are enriching him as an investor…
Oh, wait, at low-pay, J6P has no money to invest in a 401K, so profits from his low standard of living don’t reach him. And even when he had a 401K, his share was pretty small so that fluctuations in profit were moot anyway.
Yeah, we’re screwed.
Which “law” should we follow? Maximize overall standard of living for the middle class, or maximize profit for the investors? You can’t really have both
Yes you can have both. Please see the article in Forbes that I posted.
If you have a more protected economy, the rising standard of living for everyone would make for much better customers which would increase the shareholder value.
Shareholder value should be a result and not a goal.
“If you have a more protected economy, the rising standard of living for everyone would make for much better customers which would increase the shareholder value.”
Wouldn’t protectionism reduce the value of U.S. production, thereby decreasing shareholder value?
I’m not following your logic.
Protectionism would increase the value of the US worker’s production. (wages) This would increase the demand because the workers would have more money. Customers with more money would increase sales. Increased sales increases shareholder value. That Forbes article explains part of it.
The USA is still the largest market in the world. Not gutting the wages of the largest market in the world is one way take care of shareholder value.
“Protectionism would increase the value of the US worker’s production.”
Let’s examine that statement objectively.
Worker A = marginally qualified American worker.
Worker B = highly qualified foreign worker who would gladly contribute the value of his production to the U.S. economy, if offered the chance.
Isn’t Worker B’s production quite likely to be more valuable than worker A’s production?
You’re thinking short term. Like when someone says gold is “crashing” when it’s down $20 on the day but has been going up for 10 years.
That statement was not just about foreign visa workers but, yes the skilled foreign worker gives a short term bump to USA’s economy.
However, if the USA did not allow as many as the cheaper hired gun foreign workers, the USA would produce and train more American skilled workers. In the long-term, this would boost the US economy and wages more than cheap foreign hired guns. Why would USA produce the American skilled workers needed? Because of the laws of supply and demand.
If our workers can’t be more productive, then the bosses have to make a decision.
USA workers are the most productive workers in the world. Our productivity rose while our wages dropped. The Social Contract with American employees was broken 30 years ago as per this chart. As the contract was broken, only the rich got richer.
No. Shareholder value should be a result, not a goal. The sole goal of maximizing shareholder value is part of the breaking of the Social Contract between business, wealth, the government and We the People. And it has hollowed out our once great economy.
Is The Tyranny Of Shareholder Value Finally Ending?
…..Maximizing shareholder value: the dumbest idea in the world
Maximizing shareholder value is a powerful idea. It is simple. It is elegant. It is intuitive. It has at least one big problem: it doesn’t work.
As Roger Martin wrote in 2010: “Have shareholders actually been better off since they displaced managers as the center of the business universe? The simple answer is no.” It became steadily more apparent that focusing attention solely on shareholder value in the short term tended to lead to the management to do things that destroyed long-term shareholder value. The stagnation of Coca-Cola after Goizueta’s departure and the precipitous decline of GE’s market cap since Jack Welch’s departure have been startling.
Lorsch and Fox write in HBR: “There’s a growing body of evidence (for example, Rosabeth Moss Kanter’s “How Great Companies Think Differently,” HBR November 2011) that the companies that are most successful at maximizing shareholder value over time are those that aim toward goals other than maximizing shareholder value.”
And even Jack Welch himself had second thoughts. In 2009, he gave an interview with the Financial Times and said, “On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy… your main constituencies are your employees, your customers and your products. Managers and investors should not set share price increases as their overarching goal. … Short-term profits should be allied with an increase in the long-term value of a company.”
Shareholder value morphs into C-suite capitalism
Even worse, shareholder capitalism morphed into something else: C-suite capitalism. “Maximizing shareholder value” turned out to be the disease of which it purported to be the cure. Roger Martin writes that between 1960 and 1980, CEO compensation per dollar of net income earned for the 365 biggest publicly traded American companies fell by 33 percent. CEOs earned more for their shareholders for steadily less and less relative compensation. By contrast, in the decade from 1980 to 1990, CEO compensation per dollar of net earnings produced doubled. From 1990 to 2000 it quadrupled.
Since 2000, the situation has only deteriorated. According to Professor Mihir Desai, the Mizuho Financial Group Professor of Finance at Harvard Business School, over-compensation of the C-suite has produced a giant financial incentives bubble, that is inexorably pushing the US economy into decline. His 2012 HBR article makes clear that overcompensation of the C-suite is not merely an issue of “fairness” or “whining by the 99 percent”. The phenomenon is having disastrous business consequences, including a serious misallocation of capital and talent, repeated governance crises, rising income inequality and an overall decline of the US economy.
Who says the shareholders got the value?
Wherever it went, that wasn’t it.
The entire premise of the article is destroyed by this statement alone:
focusing attention solely on shareholder value in the short term tended to lead to the management to do things that destroyed long-term shareholder value.
“Long term.” Jack Welch is worried about long-term of GE? Sure, only AFTER he made is pile. Coke leveled off? I’m sure the management knew in advance and sold accordingly. Bain Capital kills the goose that lays the golden eggs? No problem, just extract the gold and move on to the next goose.
In an area of yearly bonuses, quarterly numbers, and micro-second trading, “long-term” is for the little people with the 401K. For the people at the cocktail parties, capitalism is working just fine.
“…focusing attention solely on shareholder value in the short term tended to lead to the management to do things that destroyed long-term shareholder value.”…
It does not destroy the premise. It IS the premise. Now in order to destroy the premise, you would have to prove shareholder value is higher now than it would have been if management had acted in the company’s long-term interests instead of trying to maximize shareholder value.
Of course you can’t, therefore the premise deserves to be looked at seriously.
My point was, the premise doesn’t really matter. Let’s say that long-term thinking DOES increase long-term value. So what? The question remains whether to cash out short-term value now, or to wait until the long-term thinking kicks in and cash out a little more later.
Do you want one cookie today or can you wait for two cookies tomorrow?
Would you kill the goose that laid one golden egg a day because it had a dozen eggs of gold inside?
When the short-term cash already buys you a second yacht, is it worth it to wait around for cash that will buy you a third yacht?
Will you live long enough to reap the rewards of long-term thinking? Recall that these execs are generally over the age of 55 and have a yacht.
It’s all the same experiment, isn’t it? The answer every time is the same: gimme gimme gimme NOW.
My point was, the premise doesn’t really matter. Let’s say that long-term thinking DOES increase long-term value. So what?
The point of the article was that the question should not be; so what?
The question should be; So…………..what?
The premise is that maximizing shareholder value is one of the tenets that is corroding capitalism. This cannot be changed easily within the current structure of American Capitalism. The whole point is: So……………what? What needs to be changed withing the current structure of failing American Capitalism to insure Capitalism’s future.
This is why the defenders of our current form of American Capitalism have it all wrong when they think they are defending Capitalism from the “Socialists” who see that American Capitalism is eating itself alive. Blindly defending American Capitalism is doing Capitalism no favor when what they are defending is cannibalizing itself before our very eyes.
Blindly defending American Capitalism is doing Capitalism no favor when what they are defending is cannibalizing itself before our very eyes.
Agreed. It would be interesting to see how future historians review the self destruction of the United States.
“Maximizing shareholder value Maximizing CEO pay structures
I have said it here before, but it bears repeating. When I took the class in taxation of executive compensation, the practitioner half of the team teaching the class told us flat out that our job was to make sure that there was no chance at all that our client would fail to get the maximum bonus allowed under the contract. He said there was no excuse for not getting a contract that was so lenient that the exec would always get the max compensation no matter how badly they failed at their job.
He said there was no excuse for not getting a contract that was so lenient that the exec would always get the max compensation no matter how badly they failed at their job.
It sure does seem to bear out in practice. CEOs who royally screw up walk away with lotto jackpot sized severance packages.
Here at the Housing Bubble Blog, just what does this have to to with you overpaying 150% for a rapidly depreciating house?
Because most people don’t “pay” for their overpriced house, they mortgage it. And, just as in 2007, when the high-flying house-flipping, 0 Down, 1% mortgages began to END, the idea that payment needed to be made on the debts put the “party” in reverse. Time to go home.
And when they got home, they found that they didn’t have a $250,000 annual income to support a $600,000 house.
If all the good jobs are leaving for places where people will take less for similar work, then the idea of High Priced housing needs disappear with the jobs.
Good-bye, Sweet job. ‘Twas but a dream, my house.
According to our DC-area posters, it is hardly uncommon that households in Washington make $250,000 annually.
Meanwhile, the average household elsewhere doesn’t even clear $50,000.
See a disconnect?
Are YOU adequately represented by these $250,000/yr. households?
Why are you disseminating disinformation again?
It isn’t me stating that $400-$750K houses are being “snapped up” in the Washington area.
It isn’t me stating that the three wealithiest counties in the United States are all in the D.C. area.
‘It isn’t me stating that $400-$750K houses are being “snapped up” in the Washington area.’
But how many of these are bought by all-cash foreign investors, hedge funds or other outsiders, rather than local end-users?
I mentioned a co-worker who bought a house for a bit over $600K over the weekend. If his household income is over $125K, I’ll eat my hat. The nice one I bought in London when I was still working for a law firm. I looked at a mortgage calculator over the weekend. If you assume 20% down (not idea if he did or not) and therefore no PMI, his PIT (don’t know what the insurance is) about $3000. With his wife staying home so they have no childcare costs other than private nursery school when that becomes relevant (the public schools will be more than fine in his area), it is doable. Not easy, but doable. Barely.
So, just because you think that everyone is making X amount because that is what you have to make to buy a house that costs Y amount, doesn’t mean it is true. You are making a big assumption.
“If his household income is over $125K, I’ll eat my hat.”
Don’t expect our resident propagandists to accept your figures.
Insurance on a $600K house is probably $120-$150/month. It may be lower in tony Bethesda, where more of the house value is in the uninsured land, not the insured structure.
The disconnect, MacBeth, is in the education of the workers and the fact that these are usually two-income households. Not the location. Even in flyover, two engineer or lawyer spouses will easily clear $170K.
Once again, you don’t know what you’re talking about.
Starting civy/env or any other discipline is well under $60k/yr.
Women in engineering are few and far between.
Yes Ral, a starting engineer is $60K at least. Add in a lawyer wife and now you’re at $140K, even in flyover. Add in a few years experience and you’re easily at $170K. Just like I said.
Those households who make $250K in DC aren’t usually starting either. Maybe this is “rare,” but the $250K DC households aren’t uncommon too, at least in non-management.
“Yes Ral, a starting engineer is $60K at least. Add in a lawyer wife and now you’re at $140K, even in flyover.”
I’m in eastern Washington’s flyover country, and a fledgling engineer starts at roughly $50k/yr and quickly moves up to $80k/yr if they’re bright, and that’s about where you will top-out unless you move into management. Most of these $80k/yr engineers have the stay at home wife if they have children. All possible because a new 1600-sqft 3/2 spec ranch house is roughly $150k and slipping albeit slowly.
Yes Ral, a starting engineer is $60K at least.
You seem to forget who you’re talking to.
Because most people don’t “pay” for their overpriced house
For 150 years, most people didn’t pay massively inflated prices for depreciating assets like house. They knew enough to walk away.
And just what happened to those houses with massively inflated prices? They sat unsold until the price fell to M+L+profit less depreciation.
Oxide, I was also curious by the way the breakdown of this post went on wages. It seems that the “new” ownership looked at the jobs being done and adjusted wages based on a performance criteria of some kind. There seemed to be no correlation to “time in service” with wages.
Many long time employees got cut, but by different percentages.
It seems to me they saw a bunch of dead weight from people who didn’t really contribute much, but were at the high end of the pay scale. Much like Union workers all over America.
The only other place you can get high pay for little to no production is in government. That’s where you can put in your 20 and get your full retirement,
or in some cases 25 or 30, but you can boost your pay the last 3 to 5 years without working much, at all.
It’s good to be on the Politburo’s staff. The budget is unlimited, and you get all kinds of perks that the proletariat just don’t get. All hail government.
Over time, as government continues to siphon wealth from the masses at increasing speed, that which is not productive will get heavily trimmed or cut.
Government Bubble. Fewer and fewer deck chairs aboard the DC Titanic. Union members are increasingly without deck chairs as government continues on its merry way.
Government today is like kudzu.
as government continues to siphon wealth from the masses at increasing speed
Siphon wealth at “increasing speed”? How do you figure? Effective American tax rates have been falling for decades.
Tax Facts: Lowest Rates in 30 Years
Politicians talk about the burden of taxes incessantly. Now comes a rare chance to check the facts. And the fact is that federal tax rates had fallen to the lowest in 30 years when President Barack Obama took office — and fell again in his first year in office.
Memo to Mitt Romney: America Already Has the World’s Lowest Taxes
…..the tax burden on American workers is one of the lowest on Earth.
“The only other place you can get high pay for little to no production is in government. That’s where you can put in your 20 and get your full retirement,
or in some cases 25 or 30, but you can boost your pay the last 3 to 5 years without working much, at all.”
You are talking about state, county and local if it is true at all. Don’t lie to yourself that federal workers are part of that. We aren’t.
“…if it is true at all.”
Don’t give propagandists the benefit of the doubt.
Not sure if it’s all propaganda, I work in the private sector and have no pension plan. So I pay local, state and federal taxes to make sure people retire not only better than I do, but also sooner. Why should I be happy about that?
Because you, too, have the opportunity to apply for a government job and accept lower pay than you would get for the same work in the private sector as part of a package deal with a pension and other bennies…
“As long as there are workers in China, India, or the next tier down, who are willing to work like serfs for their bowl of rice, there really is no solution to this problem.”
Sounds to me like the death knell for end-user housing demand in the U.S. Thank heavens the hedge funds and all-cash Chinese and Canadian buyers are stepping up to fill the gap in demand.
Perhaps the next generation of Americans can find work as gardeners and housekeepers for their new Chinese neighbors.
gardeners and housekeepers
No, you need skill there. Burger flippers and Walmart Greeters for most. Baristas if you are good looking enough and the boys or girls who excelled in video games will be drone pilots.
How much money do you make an hour, oxide?
If I am not very much mistaken, oxide has a science Phd. Her skills and qualifications aren’t easily found in the general population.
It amazes me there are people who actually believe that $250K might represent typical pay for a PhD scientist employed by the federal government.
I actually think a lot of the Phd scientists often get stuck with a top pay of scale of GS12 or GS 13 unless they become managers and end up having to spend a lot of their time doing secretarial work.
Nobody gets $250K on one salary. Even the senior executive service people are required to make less than members of the House of Representatives. And the rank and file has to make less than SES in most circumstances.
I’ve heard of heads of big police departments making serious cash. School system superintendants too. Doesn’t happen in federal service. There might be a few places that actually have overtime that could do it, but we don’t get overtime in my division. Exceptions have to be approved by a woman who is 4 levels of management above me.
“…unless they become managers and end up having to spend a lot of their time doing secretarial work.”
Very insightful comment, from someone who actually knows what she is talking about.
Too bad we still have a bunch know-nothing propagandists on the HBB spreading disinformation…
Nobody gets $250K on one salary.
Have you looked at the salaries of college professors around DC area? there are at least 5-6 big universites and most professors in JHU, UMD, Georgetown, GWU, GMU, AU etc. get paid more than 200K for 9 months in Business, Medical, and Engineering fields at least. That itself says all these are close to thousands of people making more than 250K per year (with 33% extra pay for 3 summer months). Most live in very affluent areas like Bethesda, CHevy CHase etc.
Similarly, a lot of IT contractors make close to $110-$130 per hour. They also account for tens of thousands in DC area. A salary of $110 per hour equals a salary of close to $220K per year with benefits.
Long story short, many people make good money in DC area on a single paycheck. I have not even counted tons of medical professionals in so many hospitals, doctors in practice and even small businesses.
We were talking about federal government salaries. Not contractors. Not private sector lawyers, etc. Not university profs. Look up the GS tables for the Washington area. They are readily available.
“Similarly, a lot of IT contractors make close to $110-$130 per hour. They also account for tens of thousands in DC area. A salary of $110 per hour equals a salary of close to $220K per year with benefits. “
My guess is that a lot of IT contractors are billed at $110-130 per hour. If they are 1099 hourly, the company that contracts with the government gets about 15-40% of their rate. If they are W-2 hourly, the contracting company gets somewhere around 40-50% of their rate. If they are salaried, the contracting company probably takes around 50-60% of their rate. YMMV, DOE. Those who get more of the rate either have rare skills or know someone at the contracting company who is willing to give them a bigger cut.
I did a quick Dice job search for SQL and found pay of 44K to 150K for 5+ years experience, with most in the 80-110K range.
oxide has a science Phd. Her skills and qualifications aren’t easily found in the general population.
Her skills and qualifications are not that hard to find. Her diploma, that’s a different story.
“Her skills and qualifications are not that hard to find.”
From her handle, I’d guess she’s a chemist, but aside from that, I have little idea about her qualifications or duties.
Could we please put a stop to this? Thanks.
“oxide has a science Phd…”
Analyzing lab samples is not PhD work. Not remotely close.
This isn’t about unions. Unions cannot sail against the financial tide. GE is an asset stripper. When Advanced was bought by them it was time to jump ship, because they sell what they can and shred the rest. The pack of dogs that bought the asset from them were just second tier predators.
The US is a house with doors and windows thrown open. We do this because we are feeling guilty about what we have. It is stupidity to think that when the looters have swept the place clean we are going to still have our stuff. Yet the masses cheer the looters on as being our only hope. Evidence of this is everywhere. We are the foolish spendthrift brats of a fortunate and successful people.
The US is a house with doors and windows thrown open. We do this because we are feeling guilty about what we have.
We have NAFTA, GATT etc. and gave away our jobs because “we feel guilty about what we have”?
So the super-rich and powerful came up with off-shoring, union busting, GATT and NAFTA etc. because they felt “guilty about what they had”?
So the super-rich and powerful are now 10 times richer because they came up with off-shoring, union busting, NAFTA and GATT because they “felt guilty about what they had”?
So let’s see. I’m super-rich and powerful and I feel guilty about it. So to assuage my guilt, I’m going to send our jobs to China so I can make 10 times more money. Yea. That’s the ticket.
To assuage your guilt you buy into the line of BS that globalization is a good thing. Same way you buy into all the other BS that voices of authority tell while they are working in a completely different direction. Was any one pissed about globalization 20 years ago, or only now that the lie is obvious.
To assuage your guilt you buy into the line of BS that globalization is a good thing
No. I was there. Regular people bought into Globalization because the propaganda pounded it into peoples’ heads that we’d make MORE MONEY because it would open markets to American products. And because it would lead to more productive American jobs.
There was NO sense of guilt because we had “too much stuff”. We wanted globalization because we wanted MORE STUFF.
We have NAFTA, GATT etc. and gave away our jobs because “we feel guilty about what we have”?
It is not about “Guilt” but about “Greed” to tap into the local markets of those economies. Simple process:
–Have banksters create some ETF and invest that country’s stock market and create a bubble.
–Force easy liquidity and money printing by meeting with their Central bankers and create a housing bubble.
Result: Too much free cash with middle class of those countries and then sell your goods to them.
End Result: It all will burst as RE prices in all these countries have reached unsustainable levels and a burst would mean more printing and interest rates at lowest. It would all end real bad as instead of fixing the problem, they are fuelling the fire further to burn the whole thing.
There is a simple solution to the problem… 99% come together and took over what 1% have and divide equally… all workers of the world united…( it’s a joke)
“From each according to his abilities, to each according to his needs” — Barack Hussein Obama 2nd Inaugural Address
Wow, that’s a sickening quote, goon. Incredible!
Jsut for the people who don’t read too carefully, President Obama’s second inaugural address hasn’t happened yet.
I know the second address hasn’t been given yet; I didn’t miss the sarcasm. The quote though, which I didn’t know was Max, is the most socialist thing I’ve read, IIRC. We’ll be doomed if that’s the path forward.
You didn’t know? That is the single most famous Marx quote ever. How can you miss that? You don’t even have to have read any of the source material to know that one.
“You didn’t know? That is the single most famous Marx quote ever. How can you miss that? You don’t even have to have read any of the source material to know that one.”
That quote didn’t resemble drivel–definitely thought out. I’m serious when I say that I’ve never seen that quote before. I’m still a hands-on sort of person despite my education, and I probably wouldn’t impress you. Trust me, love, you will never see me on Jeopardy.
If you are going to criticize, at least use the truth. Your quote is from Karl Marx, not Obama. Obama said something similar, why not quote that?
Look at the date — 2nd inaugural address, which is 25 days from now. The squad is being snarky.
Hi I’m filling in for ral today.
Reminder–realtors are liars. The best way to lose money is to buy a house today. Staggering losses will result.
Why buy now when you can buy later for 60 percent less?
Not true. Suzanne researched it:
I was asking yesterday, who benefits more from the dole; rich people like your father trying to taste the “real money” out of life. Who has restaurant employees who need welfare to survive. Kinda like Walmart. Why would they pay a living wage if the govt is willing to give their employees benefits that get spent right there at Walmart anyway.
If your dad uses the welfare programs to get richer; the programs won’t ever be shrunk. Why look down on those dependent on welfare if your daddy is dependent on it too?
The rich need welfare to roll in dough; the poor need it to eat. Who would want to reduce entitlement programs? if not the rich and not the proles, either.
Using the term proles makes me think you look down on welfare recipients even though your daddy uses the system to get richer and knows he does not need to pay living wages to his lowlier workers.
Mike, I’m not sure how often you’ve been around lately (I used to see you on HBB more often) but part of my language is to point out the stupidity behind many American’s blind acceptance of the “job creators” and “bootstrapper” memes. After watching this last election and seeing how fervently people (who should know better) defended Mittens, I’ve decided that if Americans can’t wake up then they deserve for this country to turn into slop. We’re well on our way.
As for my own personal views, I do realize that thanks to globalism we need a safety net. I also realize that our biggest problem is the incredible tax preference given to people at the top of our economic system, combined with the fact that our government’s size and focus is ill-suited to the challenges of today. We have a graying population and in 20-30 yrs we’ll have about 2 workers per retiree. So are we making investments in education or infrastructure that will increase productivity of our young people? Or are we fighting the “war on terror”, giving tax breaks to millionaires, and using federal policy to prop up the student loan and housing bubble?
I don’t look down on people who are legitimately struggling, I look down on people who are always pointing the finger at the poor or the “entitled” when they can’t see that this system exists because it serves the “boot strapping” “we built this” class. As far as how to conduct business, if the GOP can nominate someone who quite literally hates American workers and labor, keeps his fortune overseas, uses every tax loophole possible, and truly was an Etch a Sketch on the issue of health care, then why should any other citizen not make some choices along the same lines?
I agree with you that the rich are just as dependent on welfare as the poor. Your posts helped me see that. and they have the clout to keep it that way.
Just trying to inspire debate, no offense towards you.
But saying “the proles love some football” seems a little classist to me. Especially, by your own description, since your father depends on the entitlement system to pad his estate.
Would you be prouder of pops if he bucked the system and paid his employees living wages?
“American’s blind acceptance of the “job creators” and “bootstrapper” memes.”
Similar to the religion-like adherence to the housing lies like throwing 30 years of income at rapidly depreciating assets like a house and paying interest on it to boot.
That worked(15 year note, max) for our predecessors. The difference? Housing prices weren’t grossly inflated.
And you can always count on a liar responding with “but we can afford it”. That’s a complete lie and distortion of the truth when you have to borrow. When you borrow, you CAN’T afford it.
RAL, I agree with probably 80-90% of what you say. I just think that sometimes it does make sense to buy a house. Of course, this does not mean a 90’s or early 00’s era McMansion made out of match sticks and chinese wallboard and situated in a far-flung suburb (high transportation and energy costs)
Even if someone can pay cash for the house, you have to take into account opportunity cost of the money + property taxes + maintenance. Sometimes renovation as well. And a lot of people who can/could pay cash for a house are at a point in their lives where they might not be working much longer…
“I just think that sometimes it does make sense to buy a house.”
You are right. I have a younger colleague whose wife makes more than he does; together their income is easily 2X our household income. They just had their first child. It made perfect sense for them to buy a home, to get into the SoCal market. If they later decide to move up, there is a good chance the value of the house they want to purchase will have declined by even more than the value of their ’starter home.’
Some people also were angry when I said I was not paying for my wife’s mortgage any longer after the value of her house plummetted.
The finger shaking continued even after I explained that the appraisal was corrupt, the sales agent was a liar, the bank loaned my wife money at 60x income. And that we did not even know that the bank’s risks were nil (via securitization) until we were left holding the bag.
The “what’s good for the goose is good for the gander” argument did not hold water with many here on the HBB who blamed me for seeing the writing on the wall too late and realizing that we would not be able to pay back the money she was lent.
Somehow, they argued, it was morally wrong and some kind of breach of contract to stop paying the mortgage. When the contract was fulfilled to the letter. Wife stopped paying; bank got the house. I still don’t see the wrongness of letting the house go back to the bank as the contractual arrangement clearly allowed for that contingency.
I posited that since the banks don’t play fair, why should we feel morally obligated to pay back the loan. Oh well.
“I just think that sometimes it does make sense to buy a house. Of course”
Just saying this and repeating it again and again doesn’t make it true.
The numbers don’t make and they haven’t in 12 years.
And we agree on this. Many more should walk away. But don’t personalize this. The truth is nothing to take personal.
Mike, if you base your morals only around what is legally possible, then you shouldn’t be upset when someone mocks your morality.
“When you borrow, you CAN’T afford it.” 1947, Mr. Potter yelling at his ex-slum-tenant who just got a mortgage from the Bailey Building & Loan.
It’s a Wonderful Life.
if you base your morals only around what is legally possible, then you shouldn’t be upset when someone mocks your morality.
There is nothing he did that was immoral. Nothing. The contract stipulated the options and consequences and the system he operated in was, in fact, immoral.
The numbers don’t make (sense) and they haven’t in 12 years.
There are many areas in the USA right now where it’s the same cost per month to buy as to rent. I’m glad you’re not a Doctor. Your rigid thinking would kill people.
LabTech: But Doctor, the tests show it’s cancer.
Doctor: It’s gallstones dammit. I’m tellin’ you it’s gallstones!
US home prices rise in October from 1 year ago as housing recovery sustains momentum
WASHINGTON — US home prices rose in most major cities in October compared with a year ago, pushed up by rising sales and a decline in the supply of available homes. Higher prices show the housing market is improving even as it moves into the more dormant fall and winter sales period.
The Standard & Poor’s/Case-Shiller national home price index released Wednesday increased 4.3 percent in October compared with a year ago. That’s the largest year-over-year increase in two and a half years, when a homebuyer tax credit temporarily boosted sales.
China has opened the world’s longest high-speed rail line, which runs 1,428 miles from Beijing to Guangzhou.
Prices rose in October from a year ago in 18 of 20 cities. Phoenix led all cities with a 21.7 percent gain, followed Detroit, where prices increased 10 percent. Prices declined in Chicago and New York.
I don’t recall HBB being angry at your walking away from your wife’s dwelling and allowing the bank to take the place back.
Instead, HBB blamed you for stopping payment and then living there rent free while BoA took some time to kick you out. Hardly “walking away.” All the crooked bank actions you mention dealt with the ensuing auction of the property, not the original mortgage which you signed. Then you started planning your next little real estate fiefdom even while you were squatting. HBB has had its arguments about whether it was the banks’ or FBs’ fault for signing the mortgage in the first place, but come on… 60x income? You knew full well you could never pay that back. Hardly pure as the driven snow.
Sure you may have been legal, but if you wanted to be so “moral,” you should known that 60x income was a crock, you should have kept your mouth shut about buying propeties, and you should have moved out within a month of your last mortgage payment.
Kinda like the east coast version of the golden rule(as told to me by a teacher who moved from NY to OR): “Do unto others before they do unto you”
Contract law is more amoral than immoral.
The state may set forth a default consequence if one party does not fulfill certain requirements of the contract, but the parties are almost always allowed to decide to replace the state’s default with their own spelled out terms. Fighting the spelled out or default consequences when you know for a fact that you have not fulfilled your requirements and that the other side has fulfilled theirs raises transaction costs and can be considered bad for society as a whole, but as far as we know, Mike didn’t do that. The bank kept putting off the sale. His wife didn’t fight it.
you should have moved out within a month of your last mortgage payment.
“Should have”? Why? Did his contract stipulate “should haves”?
Did his contract stipulate what B of A “should have” done regarding the morality of the housing market?
Did American society teach Americans that they “should” bend over when they realize they’ve gotten screwed in an immoral ponzi scheme?
Here’s what I think. I think a lot of people got jealous of people who made so much money on the housing market and they didn’t. (me included) Then, when it crashed, many felt joy at the downfallen. Then when they saw squatters, it pissed them off because they hadn’t fallen as far as they “should” have. And then there is the jealousness because of people that should be punished more were getting “free rent”. Am I a bit jealous of people getting free rent? Yes. Do I think most of them are doing something immoral. No.
Why would anyone be “jealous” of banks and lenders?
There are many areas in the USA right now where it’s the same cost per month to buy as to rent. I’m glad you’re not a Doctor. Your rigid thinking would kill people.
Wrong again. As usual.
And you couldn’t qualify to be my laborer foreman. You don’t need to worry about MD’s.
PS- Prices resumed falling from their grossly inflated levels…. again.
Well I won’t escalate then. But mike’s comment at 9:09 does not jive with me.
“The truth is nothing to take personal.”
It’s sad how many HBB posters are confused on this basic point.
“…you should known that 60x income was a crock, you should have kept your mouth shut about buying propeties, and you should have moved out within a month of your last mortgage payment.”
In Mike’s defense, why should anyone else care about how a private contract between his household and a lender was worked out over time?
Dealing with an amoral institution (Banks/business in general) on a moral basis is a sure way to get rear-ended.
You need to deal with these companies as they would deal with you; use the law to your advantage whenever possible, and do whatever is permissible within the terms of the agreement.
Doing anything else is simply asking for a shellacking.
And you couldn’t qualify to be my laborer foreman.
I wouldn’t work for you. Your rigid thinking could get workers killed.
Labor foreman: We need to get that man off that roof. The rain is starting to freeze.
Housing =Massive Losses: It is not starting to freeze. Yesterdays weather report said it was going to be 35 degrees today.
Labor foreman: But sir, I can see the freezing rain with my own eyes.
Housing =Massive Losses: (foaming at the mouth) LIAR! Who’s paying you to tell me these lies???
Labor foreman: Good God. WTF’s wrong with you?
Housing =Massive Losses: You’re fired!
Labor foreman: What about John on the roof with the freezing rain?
Housing =Massive Losses: LIAR!
Why should anyone care about anything? It’s not like any pention funds have bank stocks, or that good people work there far away from the mortgage services department. Or that tax payers back mortgages or that our economy is more connected that we would like to think.
Did his contract stipulate what B of A “should have” done regarding the morality of the housing market?
Rio, I like and agree with you in general, but this is just contrarian. No, it specified what should be done legally. We aren’t calling him a criminal; we are saying he acted immorally. And so did the bankers. I’m not jealous of any of this. I’m sad that this is what society has come to.
So lets’ get around this morality issue and let’s add a time clause to the contract and have BOA hire a bunch of thugs to toss his stuff on the street an hour after he defaults. That’s a great way to spend our limited resources. Right up there with posting an armed guard in every school. But I don’t live in Connecticut, so why do I care about that either?
And why should we care how much a private business pays their top executives or their lucky duckys?
Look Housing =Massive Losses. Look! Who am I going to believe? You or my “lying” eyes??
Case-Shiller Home Prices Show Strong Gain in October 2012
Global Economic Intersection-6 hours ago
“With lower rental vacancy rates and rising rents, combined with still historically favorable affordability conditions, more people are buying …
Apartment rents rise, vacancies fall in St. Louis
STLtoday.com-Dec 24, 2012
Landlords are raising the rent in the St. Louis area, and tenants have to pay up. The market for apartments and rental houses here is swinging …
Home prices and rents continue to rise
San Jose Mercury News-Dec 17, 2012
Home seekers continue to face the twin challenge of rising home prices and rents, especially if they want to live in the Bay Area. In San …
Rents to rise at steady clip, forecast says
USA TODAY-Nov 26, 2012
Rents will keep rising, more than 4% a year for 2014 and 2015, says market researcher Reis. “The pendulum has definitely swung back in favor …
Report: Rising Brooklyn Rents Giving Manhattan A Run For Its Money
Gothamist-Dec 12, 2012
Rents in Brooklyn are getting closer and closer to the rents in Manhattan (Rbudh’s flickr). Once upon a time Manhattanites turned to Brooklyn …
Apartment rents rising in WI, nation
WEAU-TV 13-Nov 28, 2012
Apartment rents rising in WI, nation. EAU CLAIRE, Wisc. … Landlords said with other rising costs, it’s a necessary change. Everett Blakeley …
Rent hikes forecast for industrial, office buildings
OCRegister-Dec 7, 2012
Rents will rise and vacancies will drop over the next two year for Orange County office and industrial buildings, according to the Casden …
ARLA predicts rising rents and sector scrutiny for 2013
Mortgage Introducer-Dec 21, 2012
The Association of Residential Lettings Agents has predicted that 2013 will continue to see rising rents as demand continues to outstrip supply …
Five Things Driving Rising Home Prices in Snellville
Patch.com-10 hours ago
The Rise in Rents: More investors are cashing in on this and more renters are questioning their decision to rent. I have investors now who are willing and able to …
US Real Estate Update: Rents Rise
Live Trading News-Dec 12, 2012
CoreLogic (NYSE: CLGX), a leading provider of information, analytics and business services, today released its December MarketPulse report.
Home sales rise in November
e-wisdom.com-5 hours ago
“With lower rental vacancy rates and rising rents, combined with still historically favorable affordability conditions, more people are buying …
‘New York Magazine’ Explores the Fascinating World of SF’s …
SFist-1 hour ago
… over the fact that the buses have a direct relationship to rising rents and gentrification in certain neighborhoods, like the Divisadero corridor.
39% of landlords expect rents to rise
Landlord Expert-Dec 12, 2012
image landlords polled by LSL Property Services expect to increase rents in the coming 12 months with 10% anticipating rises greater than 5%.
CNBC.com-by Diana Olick-Dec 2, 2012
Mortgage rates will likely rise off their historic lows, but not significantly. Apartment rents will stay elevated and vacancies low despite the …
2013: How Rising Prices Could Boost Housing Demand
Wall Street Journal (blog)-Dec 18, 2012
Meanwhile, rising rents are likely to encourage more renters to buy. Finally, low prices and unattractive returns on other assets have fueled …
Rising demand, scarce supply bolsters home prices
Inman.com-Dec 20, 2012
“With lower rental vacancy rates and rising rents, combined with historically favorable affordability conditions, more people are buying homes.” …
Consumers Climb Out of Debt
Wall Street Journal-Dec 23, 2012
Rents are rising, pushing up the share of renters’ income that goes to required financial obligations to 24.1% in the third quarter, the highest …
Five Reasons Home Prices Have Been Rising
Wall Street Journal (blog)-Nov 27, 2012
Rents are rising. Falling mortgage rates and improving job growth didn’t do much for housing last year, in part because buyers didn’t have …
Upward trend for rents set to continue
FarmersWeekly-Dec 5, 2012
Values have continued to rise on more recently reviewed rents, said Rupert Clark, head of rural management at Smiths Gore. “We have had a …
Soaring Rents Drive Apartment Boom
CNBC.com-Dec 6, 2012
But as part of a national rush to capitalize on rising rents, … While rents are still rising, analysts say the steep increases between 2011 and 2012 …
Grounds for optimism on cliff
Philadelphia Inquirer-Dec 23, 2012
With rents rising strongly almost everywhere across the country, the decision to buy is becoming much easier to make. The main threat to this …
Quoting realtor isn’t going to help you here.
Nice try though.
“Nice try though”. Said the pitcher to the hitter who just hit a grand-slam off him.
Quote some more realtor to demonstrate you dishonesty.
“I wouldn’t work for you.”
You can say that again.
Let’s look who’s being dishonest here. I just posted 21 recent headlines scoured from all over the USA citing facts, figures and observations regarding rising rents and home prices in the USA. (21 articles)
To counter the twenty-one (21) different articles citing rising rents all across the USA, the one-trick poster Housing =Massive Losses characterizes those twenty-one (21) different articles as……(now get this)….as “Quoting (a) realtor”
Is characterizing twenty-one (21) different articles citing rising rents all across the USA as “Quoting a realtor” honest?
No. This is not honest. That is not honest debate. In fact, I think it demonstrates intellectual and actual dishonesty.
You posted realtor tripe.
You’re dishonest and a serial misrepresenter.
You posted realtor tripe.
Housing =Massive Losses,
Wrong. I just posted twenty-one (21) recent headlines scoured from all over the USA citing facts, figures and observations regarding rising rents and home prices in the USA.
You post squat, foam at the mouth and call names. You never back up anything and people routinely demolish your one-trick pony, one line drivel with facts, figures and logic. When your points are demolished, you resort to calling people liars when it is you who are dishonest.
Your characterizing twenty-one (21) different articles citing rising rents all across the USA as “Quoting a realtor” is intellectually dishonest which accurately reflects the description of your increasingly deteriorating, unhinged posts the past year.
I have no dog in this hunt. I live in Brazil but I can read data. You freak out because the reality of the USA housing market no longer conforms to your skipped-record narrative.
Other than that, YOU ROCK!
You posted realtor tripe. You’re a liar and serial misrepresenter.
How much later? 1 year, 5 years……10 years? Our children’s lifetime?
How soon would you like to be ripped off by a few hundred thousand dollars?
Ryan…. you’re untrustworthy.
Why speak for RAL when he is here (no doubt getting paid to post) anyway?
I don’t get to substitute teach unless a teacher is absent.
And that’s the truth!
He emailed me his cut/paste Excel spreadsheet last night and said he might not be able to log on until lunch time. I said I could handle the cut/pasting of the standard warnings until he made it here.
For every misrepresentation paid hacks post here, I will continue to respond the truth.
Why does this confuse you?
Cuz I don’t know who is paid and who is not? Not unless you want to tell me. You are here as much as any; who pays you to be so vigilant?
As you are Truth; your information will be trustworthy and I will no longer be confused by you calling folks liars.
Your judgment is severely impaired. Why are you teaching?
Because I like it. And paid for and earned the state certification. And I am too dumb to use those checkstand scanner thingies. And my back went out so my chosen career in organic vegetable sales did not pan out long term. I am more concerned with relevent people like students and fellow teachers and admins assessment of my judgement than your assessments made with such rancor.
You fail the objectivity test. Not the first test you have failed my fiend.
How did my kids ever make the honor role? Good gawd I homeschooled them for years they oughta be flailing given my propensity to lie, misinform, misjudge, etc.
If you knew how to surf I would tell you to go pound sand. But don’t take the truth personally. I don’t actually know you nor do I wish to, really!
Who cares what you think about my judgement.
It is so impaired that I don’t even like you.
This isn’t about me kiddo.
Au contraire. It’s all about you.
Honor role = Home Schooled?
Relishing being a part of the drain on the system.
Mike, I am ashamed of you.
“Au contraire. It’s all about you.”
Wrong again Cupcake.
Quit taking $hit personally. Life is much easier that way.
Sorry dude, I call it ‘em as I see ‘em. You are a blowhard, plain and simple.
You’re a drama queen, plain and simple.
Talk about value-added.
Do you have any substance to produce? I’m not questioning that housing will go down. I am asking you or anyone else who cares to chime in: How Long?
It’s clear you personally are a know-nothing nit-wit. There’s no need for you to respond. We all get it, housing will go down. Now the real question is for how long?
Do you have any substance to produce?
Only if you consider him calling people liars when he’s factually outgunned productive.
Then quit squealin’ like a whiny sissy about it.
“quit squealin’ like a whiny sissy about it.”
2012, Housing =Massive Losses’ therapist imploring his patient to quit squealin’ about rising home prices.
“Then quit squealin’ like a whiny sissy about it.”
Heh, this dude is Trollcore.
Lets hear you howl some more. Go ahead.
Sorry dude, if anyone here is constantly howling, it’s you.
And in walks the blog drama queen blindly interjecting.
Says the paranoid schizophrenic who accuses everyone of being liars.
When you wages will be worth 60% less tomorrow than today, then buying today makes about as much sense as waiting for a price reduction.
The other alternative is to wait for all the “shovel ready” housing projects being put up all over America for Section 8 and subsidized City housing. The scale of new construction in Tampa is beyond comprehension, and our Housing Authority folks say they are just getting started.
I guess Term 2 is when the Unfunded spending can really get into gear. All the Feeder channels for government money are already gearing up.
There is NO fiscal cliff. We have plans to spend TRILLIONS more on “the poor”.
“When you wages will be worth 60% less tomorrow…”
This is what personal strategy boils down to: Can Bernanke make this come true? It is obvious he wants us to believe that he can.
What will my wages be worth is also a debt slave’s question. The debt slave always assumes that his wages cannot go down, so everything is a question of what is the monthly payment. A saver would ask what his savings will buy today vs tomorrow.
“Housing Authority folks say they are just getting started.”
Huh, same thing going on here, yet the media and pols keep saying there’s not enough affordable housing. I think we’re just pulling people from the rest of the state at this point.
I don’t get it.
I bought a house for cash in 2009(made some $$ flipping houses 1995-2009. Went all in with the leftover savings left from those ventures on a house. Cost around 100k. After extracting 30k in rents I am ready to sell it this year. Did you not also buy a house recently? Looking to lose lots of money or what? We do not wish to take a whopping loss on this house.
Hoping the inventory squeeze, real or imagined, will allow us to sell it for slightly more than we paid for it. Lots of places here are attracting multiple offers. There is less than one month supply of homes in the under $150k price range here in Bend. Makes you wonder why some nice houses have been sitting empty, owned by the bank, and not for sale year after year. Probably the bank wants to keep inventory limited; knowing the effect of that on prices.
Our kids need braces. I need to go to grad school to earn my masters if I am to become the Oregon teacher I hope to. My wife works one of her jobs in a strip mall making the owner of the business richer while the low income and hours provided qualifies us for benefits. win/win, right. Us proles love us some welfare! But only a fool would pay living wages if they expect to get really rich, right?
My initial license expires this spring if I don’t get working on the masters. Only state in the nation that requires its grade school teachers to have Mastersis OR. And the pay is around 35k when I do get the job I want(mostly for health benefits and to get off Oregon Health Plan for the kids; and get off of food stamps). But at least in OR they pay their licensed subs $150/day; in California substitutes make more like $90. Hopefully I can sell it without sacrificing the returns. Before the dead cat lands. It is going to market this spring. To market to market to sell a fat pig!
I did buy a house last yr. I just enjoy being a little colorful at times and sort of enjoy RAL’s standard warnings. I think he makes a good general point.
I’ve said this many times, but we bought our house as a life long shelter. Lots of features we like that are very rare in our area. No plans to make money off it, refi it, or rent it out. It is a good set up for us and adds to the convenience and structure of our day to day activities. I had RAL’s warnings in the back of my mind while we were looking at houses, signing the paperwork, etc. I’m pretty sure it was helpful in keeping things in perspective.
And I know you paid 2x annual income for it so it is not going to be an undue burden on you should the value go to zero.
It still provides stability to your family and a roof over your head. You bought for the right reasons.
Same reason I bought in Santa Barbara in 1995. To lower my expenses I was putting into rent. I just had to get into the game when I realized the house was making us money faster than we could spend it. And one year we made 300k, which is about 1/3 of a teaching career.
But I did get caught up in the buying and selling of property as a means for making dough. Worked until it didn’t. Put the last of the spoils into one house to live in; ended up renting it out to keep the kids in the school they have been thriving in. Now looking to sell it as we can’t figure out how to get the state to pay for braces. Or grad school. Plus I was raised with the stigma attached to taking out second mortgages or being on welfare was great. I would like to live an entitlement free life. Who will promote living wages for workers if the rich like the entitlements more fervantly than those taking the dole?
Our purchase price was less than 1x income. We’re really close to a lot of family, plus my wife’s work. My wife isn’t the kind of have her head in the clouds–we both know people our age who lost houses, declared bankruptcy, got divorced, etc. In many/most cases thanks to the crash (CRATER!!!!) in the housing and job markets.
On the football/prole issue - obviously nearly everyone loves football, but generally the true enthusiasm is strongest amongst the lower economic strata. In some ways I feel like football obsession has replaced true masculinity/being a man.
And just how often does that happen “Joe”? I’ll tell you…1% of them time.
The other 99% of cases are suckers paying massively inflated amounts in excess of 3 times annual earnings.
Our views don’t have to be opposed, RAL. The small percentage of people who purposely buy far less than they can “afford” (by the Realtard/Mortgage Broker metrics) aren’t going to cause a rise in housing prices. Nor will we prevent a collapse/cratering of prices, because we’re a tiny fraction of the market.
I couldn’t care less about concurrence. The truth stands on its’ own. However, your post above clearly indicates you’re thinking rationally about a market forces relating to housing.
Hoping the inventory squeeze, real or imagined, will allow us to sell it for slightly more than we paid for it
Then you better get selling and do it soon.
Lots of places here are attracting multiple offers.
And you’re attempting to fool the public into believe this is sustainable? Or are you that dumb that you believe your own misrepresentation? You know it’s not true. So do we.
There is less than one month supply of homes in the under $150k price range here in Bend.
A *thinking* person would intuitively and immediately understand this is a price structure problem, not an issue of inventory. Your posts are questionable.
You my friend have no business teaching. Not at all.
You are not my friend so I will overlook your advice and listen to the children I enjoy working with.
Who pays you to be here?
Good luck extracting yourself from the investment house Mike. 2012 looked like a good time to catch the bounce, maybe 2013 will be kind to you.
If we can’t get the price we think is reasonable; we will move into it. And let the children have crooked teeth. Granted we may have missed capitalizing on the bounce.
I do not think the inventory squeeze is a sustainable thing, nor did I assert that. I did mention houses that we notice sit empty for years on end, owned by the bank, but not on the market. That does not seem logically sustainable. I don’t know why RAL needs to put words in my mouth and determine what I am saying by whatever portion of my post he decides to take issue with. I am not trying to spread disinformation knowingly. But I did not even know what securitization was before I came here after realizing we had paid too much for a home in 2007.
It is what it is right now, though. realtor dot com has Bend with 845 active listings. Usually the # is more like 2,000. so I may have just enough time to get out of home ownership as I would like. Or not; I am prepared to accept either outcome.
Plus if we accept a low price we could opt to buy a lesser home for an even lower price. You know a lowering tide will affect all the boats in the harbor. Not that we want to be homeowners anymore; but everyone needs to live somewhere. We will look for the cheapest option that keeps us under a roof rather than under the bridge.
Your cheapest option is to move into the house NOW and just be done with it already. Add up all the rent that you’re paying now, along with the taxes and fees associated with selling this house and buying a lesser one. Those costs alone will eat up any gains you would have made by waiting, especially in the $100K - $130K price range.
No offense, Oxide, but you really can’t tell me what the cheapest or best option is for me at this point. I pay less in rent than I collect from my tenant. I will be able to sell the home without paying the 6% realtor fee. Things like that you don’t know. Or that the house is out of the way in terms of where our kids are comfortable and successful in school. I don’t rail on you for your decision to buy a house; to each their own.
I do wish I never sold the first house I bought. I bought it for the right reasons, to lower my monthly expenses. Then I got hurt and had to reconsider what to do for income. I then sold my home, sadly, as I loved living as a surfer and I loved my job.
No money is worth having to give up your passions for, but that is what I did. 50k of my housing bux went to surgery that was retroactively denied by insurance. Three more surgeries were covered but expensive. 20k to medication that allows me to function but insurance won’t cover.
I have struggled with pain and discomfort the last 15 years. Not everyone conquers chronic pain equally. Slowly I get more functional but I still have setbacks.
If my body hadn’t got hurt 15 years ago I never would have left Santa Barbara. It is fortunate I have not been more of a drain on taxpayers because housing was my income when I could not work (or surf). I also took housing bux to earn my teaching license as a new vocation. I could barely sit in a chair but I did it anyway.
I surf now and work now, but I surf occasionally on modified equipment and can barely get out of my wetsuit when done. I still can not do a pull up. For a while I really thought I was dying and just wanted to see my kids grow up. I am sorry to have offended any of you; I thought my roles in the bubble pertinent to the blog. But I could do without the judgement. I have been a buyer for the right reasons,the wrong reasons, a landlord, a speculator, a debtor and an FB. I thought that I was qualified to comment on housing related things. But with broken record RAL around it’s not fun for me anymore. I understand why you think I did wrong but you are not responsible for my kids and you don’t feel the pain of not being able to function. I used to have to pray that I would not pass out in the grocery store, much less go play with my kids or go to school or work. Housing was my savior financially. Not so much anymore. My little fiefdom is not as satifying as the life I led before 1999, the year I got hurt.
That I made some money in housing is nothing. Or lived in a house that my wife owned fair and square until the bank finally decided to take ownership. We were ready to go each time they scheduled a sale, but since it was occupied, the sale of the home kept being rescheduled and my wife remained the owner. It probably benefitted the bank to have the house maintained while others were having their pipes burst or were being looted. Those ones got sold first while we held down the fort, waiting for the bank to act.
But OK it was immoral to take out a big loan on a small income. I guess we should have seen through the dude who was trying to get a commish and tell us that the appraisal gave us 40k instant equity and the home would be worth 100k more in a year. Should have known that securitization was the name of the game and the game had changed from the old ways I was more familiar with. Used to be the bank would only loan money to those who could prove they did not need it; erroneously we thought we fit that bill. Having a 200k house go up to a million will mess with a young person’s mind. I thought housing only went up. I was wrong. Compounding my personal issues at the time; I could not function physically at the time. So I took the money and rolled the dice.
But if I would have been able to keep my old job, I would still be in my first home, surfing every day I was not working and making good money in my first career.
So before you pass judgement I ask you to walk a mile in my orthopedic shoes and see how it feels.
I enjoy reading the differnet perpectives, yours included, mike.
Try to think of RAL as a cukoo clock that just squacks the same thing over and over again - no need to take it personally.
I remind myself that even a broken cukoo clock is right twice a day. If RAL could limit his squacks to twice a day it might even provide a useful service.
‘I remind myself that even a broken cukoo clock is right twice a day’
Ha ha, so funny! Let’s all laugh about stupid people who think house prices are too high, and who think differently than you.
Let me tell you something; this isn’t a joke. If I’m right and this is a bubble, there will be people killing themselves because of it. I know; I’ve seen it before. It will ruin millions of lives if this goes wrong. I’m not running this blog so you guys can sit around and insult each other all day. Show me there isn’t a bubble. Show me we have a normal housing market with normal prices and conditions. But don’t trivialize what is at stake.
“Show me we have a normal housing market with normal prices and conditions. But don’t trivialize what is at stake.”
Good luck with that plan, when prices are increasing again at bubble-era rates, with MSM cheerleaders and a consensus* of economists rah-rahing every price increase back towards another massive collapse.
* Don’t know if “consensus” is the proper collective adjective for a group of economists; maybe alpha-sloth could weigh in on this?
‘when prices are increasing again at bubble-era rates’
That’s what they say (about a few places anyway). I take the time to look at the details. Let’s take Phoenix; the recent sales are much larger houses and much newer. There are fewer foreclosures (like in CA where they don’t count courthouse sales in the median). Jeebus, there is so much BS going on I don’t see how it can be taken seriously. Here’s a HBB nugget of truth from WAY back; the median is a seriously flawed statistic!
I remember in 2006 in Sedona; a UHS was telling me how many sales there were. I replied that’s just that many more foreclosures to come. He thought prices were rising in 2006 when they had been falling for a year. In Denver the median price was going up in the summer of 2005 as foreclosures were skyrocketing, and nobody believed prices were really up. So now sale are up: at these prices, interest rates and down-payments, to me that’s more defaults down the road.
I heard a guy describing what was happening in housing markets as not being ‘organic.’ I think that’s a good description. I’d be happy to see us working through the correction, with natural interest rate responses and the necessary liquidations of debt. But we don’t have that. So I’m worried.
Try to think of RAL as a cukoo clock that just squacks the same thing over and over again
Imagine that…. just like you liars whose entire future is a function of housing prices post your same lies and NAR authored missives… every day.
Don’t take it personally.
Ben, I’m sorry to have offended you. You provide a valuable service with this blog.
I’m well aware that there are parts of the country where house prices bear no relationship to rents or building + maintenance costs. But I live in a part of the country where houses can be affordable for the average family income. At the present time a house can be purchased for less than equivalent rent - even factoring in a 6% APR if need be. I’ll admit that wasn’t the case during the bubble.
Not to say that there aren’t/weren’t people buying houses they couldn’t afford - just that they weren’t forced to if they wanted to be a homeowner.
Your/RAL’s premise seems to be that there is massive deflation to come, in wages as well as house prices. I would love to read a reasoned argument for that but instead we get annoying squacks.
I don’t have to explain anything to you. By virtue of the fact you’re demanding an explanation of the obvious tells me you can’t even be honest with yourself, let alone the public.
Not true in all markets. RE is overpriced is many markets still like DC and Silicon Valley etc. Bt most suburbs have already seen 50-60% downturn. In our nabe, houses are like Buy one get one free
when comapred to bubble prices.
Who cares how far they’ve fallen???
And “your area” never seems to get qualified here on the HBB.
Martin is far-flung DC area. My suburb saw a 40% drop between 2008-2012. My drop was on the lower end because the nabe is relatively close in, and they are SFH, not attached product.
Who cares about “the drop” when you’re comparing to 2008? Get honest.
oxide - PG County or Montgomery? I’m assuming not Howard or Anne Arundel.
Actually I think he was on the VA side, possibly Jefferson Co WV.
Yes, eastern panhandle of WV. Still trying to find something in DC area.
Skip Northern VA for sure. They have 30% to drop even before they match similar homes in Montgomery County.
For you, it’s going to depend on commute. A possible area is to look at is near Andrews, the bottom of the Beltway on the MD side. Yes you have to drive, and cross the Wilson Bridge to get to VA, but the Beltway is pretty calm down there.
Oxide… but that’s the worst area out of the entire DC metro. Worse than Prince George’s County, even. Also, still massive losses to be had there. Crazy foreclosure rates.
I think a better move is to postpone moving for another 2-3 yrs, let things sort out. Could probably save 50k or more on a 2 BR house simply by letting these foreclosures run the course.
Alternatively, instead of buying in some dump like Suitland or La Plata, if he waits 2 yrs maybe he can buy in an area along the Metro for a similar price in 2-3 yrs.
Patience you guys… DC Metro will fall. Places like Potomac and Bethesda will always be expensive but there is plenty of room to drop in the more modest areas. If you don’t mind a pitiful county government and probably the worst school system in MD, just wait for Prince George’s County to drop again. It’s a matter of when, not if.
I think similarly. I’ll wait to buy. Prices are outrageous out there in good school districts like Rockville, Kensington, north potomac etc. I’m not even looking at Potomac, Bethesda, Chevy Chase or McLean etc.
I hope fiscal cliff happens, contractor spending is cut down and market corrects. Too much money is being spent on these contractors.
Too much money is being spent on these contractors
We work on a very small contract to DoD, in a very specialized area which shall remain unnamed. And we just increased our contractor headcount on the contract by 15% in the last two months!
Fiscal cliff be damned. You lose!
I just think that some of the people on this board would appreciate one of Dean Baker’s newest blog posts. For the introductory material, if not for the rest of it:
Mr. Incompetent, the Economy Wrecker Alan Greenspan, Was Central to the Formation of the Campaign to Fix the Debt
Just a bit of the fun stuff:
Alan Greenspan will go down in history as the person who has done more damage to the U.S. economy and society that anyone who was not a foreign enemy. In fact the destruction he wreaked through his incompetence would also exceed the damage caused by almost all would-be enemies as well.
Greenspan accomplished the remarkable feat as Fed chair of ignoring the growth of the $8 trillion housing bubble. This bubble could not have been easier to see if it had been 500 feet high and lit up with huge neon signs saying “Huge Housing Bubble.” But Greenspan insisted the bubble was not there.
And Greenspan somehow didn’t recognize that the collapse of this massive bubble would devastate the economy. The bubble was generating over $1 trillion in annual demand through its direct impact on housing construction and its indirect impact on consumption through the housing wealth effect. This demand would inevitably disappear when the bubble burst, leaving a huge hole in demand.
Yet, Greenspan is revered, looked upon as some sort of genius.
Not so much anymore. And yet they still quote him. He should be flying around the country being forced to testify under oath.
Alan Greenspan is a financial terrorist. He should be as revered as Timothy McVeigh.
Greenspan was never revered by me, or most other intelligent people. Time Magazine declared him “the maestro”, and on another cover they put Greenspan, Robert Rubin and Larry Summers on the cover and declared them “the Team who saved America”. Now, they are making Obama the “man of the year”.
Time Magazine and many other “mainstream” rags put ideas into people’s heads. Unfortunately, most of the “masses” read their hype and buy into it.
Us, contrarian thinkers, are considered Kooks.
If Time or 60 Minutes, or the WSJ, or NYT put out a story, well, you know, that’s the way it is.
We revere the most those who have a loud message with little content.
Also those who are best able to pull the wool over others’ eyes through use of obfuscatory language…
What does that make the bearded Gideon Gono?
Ben is Jamie Dimon and Lloyd Blankfien’s bearded butt-boy, Wall Street’s fluffer-in-chief
“This demand would inevitably disappear when the bubble burst, leaving a huge hole in demand.”
And most amazing of all, to this very day, top economic policy makers at the Fed and other DC governmental institutions with an interest in housing are busily trying their hardest to patch up that huge hole.
Humpty-dumpty sat on a wall.
Humpty-dumpty had a great fall.
All the king’s horses and all the king’s men
Couldn’t put Humpty together again.
Alan Greenspan will go down in history as the person who has done more damage to the U.S. economy and society that anyone who was not a foreign enemy.
I told this to my UPS man in 2002 the day after Greenspan was knighted. He looked at me like I was deranged. I also told him then I was buying gold. (He might have thought I was crazy but he did buy some gold then.)
Washington Post - Federal workers feel unease over potential layoffs, furloughs unleashed by ‘fiscal cliff’
“Federal employees have been skeptical for months that the biggest cuts to government spending in history could really happen. But with the “fiscal cliff” a week away, workers are now growing increasingly alarmed that their jobs and their missions could be on the line.
Many federal workers have become jaded after a two-year pay freeze and congressional fights over spending that keeps agencies lurching from one stopgap budget to another. Until recently, few employees thought it could come to this: Budget cuts of 8 to 10 percent divided equally between military and domestic agencies. Only a few programs, like Social Security, veterans benefits and some services for the poor, are exempted.
Even if there is no last-minute agreement, Jan. 2 would not be doomsday because some cuts could be put off until later in the fiscal year. Most agencies would continue spending, but with caution, eliminating travel and training programs and slowing or halting hiring. Overtime would be phased out, as would temporary help. Managers may have to decide whom to furlough and for how long.
The Budget and Control Act of 2011 gives agencies 30 days to figure out exactly how they would juggle their finances, down to specific contracts and programs that would be eliminated. Union officials say they would demand bargaining over furloughs and possible layoffs. Unions would also want to bargain over the use of contractors to ensure they’re cut before federal employees.”
I know it sucks, but the rest of the country has been living this dream for years. Welcome to our world.
Most of them probably voted for Obama and he wants us going over the fiscal cliff.
Maybe our former colleagues at Dept of Energy yes. Here at DoD the majority supported Romney. And many of these Grover Norquist shrink-the-government koolaid drinkers see no hypocrisy in “double dipping” working as a contractor while collecting a military or federal pension
“And many of these Grover Norquist shrink-the-government koolaid drinkers see no hypocrisy in “double dipping” ”
That’s because they’re boot strapping and taking advantage of the invisible hand of the free market. Obviously.
The shrinking the government types just want to cut off all the wellfare payments to the lazy people. They work hard for thier piece of cheese.
I’ve heard a lot of people (including some personal friends) say that Obama “wants us going over the fiscal cliff.” If so, why did he cut his Hawaii vacation short to fly back to DC in a last-ditch attempt to cut a deal?
Makes no sense, does it?
It makes perfect sense. It is the same reason congress and senate hold votes at midnight. To give a perception that they’re working so hard for the little people. Fools will believe….
For people who can’t think with logic or reason, but who can only follow a linear narrative of Drudge Report headline talking points,it makes perfect sense.
Nice post Rancher…Pbear, WT and others…If you did not listen to the Denninger video in Ranchers post do so…
Hi Rancher — are you still in SW Oregon these days? Hope you are surviving the winter chill…
Yes he is in Grants Pass Pbear….And, I heard from my cousin there…1 ft of snow and lots of damage…Said it was the biggest storm in 40 years…
we got 6′ so far this week
97 degrees today. Last night I joined 500,000 of my closest friends for a sweltering, free Stevie Wonder concert on Copacabana Beach.
He was great but they ran out of beer.
You guys do know how to party Rio…
“Last night I joined 500,000 of my closest friends for a sweltering, free Stevie Wonder concert on Copacabana Beach.”
Is it true, the skimpy wax jobs?
Wouldn’t a two-year pay freeze tend to make one feel poor more than “jaded”?
You mean like trillions upon trillions of dollars in spending might have negative effects on government, too? Really? Wow, man.
The Hill - Time running out on defense industry efforts to avoid sequestration cuts:
“At the Pentagon, administration officials have given Defense Department number crunchers the green light to begin planning for the $500 billion in budget cuts set to go into effect in January.
While lawmakers and the White House may still craft a bargain by year’s end, most in the defense industry are showing pessimism.
The pervasive message of doom and gloom over the fiscal impact of sequestration that came from the U.S. defense sector largely fell on deaf ears on Capitol Hill, according to one defense industry source.
Defense company executives expressed frustration at being pushed aside in the deficit talks between President Obama and congressional leaders, where attention has centered on the fate of the Bush-era tax rates that are set to expire in January.”
“Defence company executives expressed frustration at being pushed aside……”
Nothing fixates the mind like the possibility of your government cheese being taken away.
Bloomberg article about the marriage and breeding patterns of Lucky Ducky:
hmmm…. interesting article. Thank you.
For years, white suburban US American looked down his nose at the lifestyle patterns of his poor urban fellow citizen of color.
Now that the the conversion of the middle class into similar Lucky Ducks is progressing and picking up stream, the same things are happening to the white suburban kids.
I’m witnessing some of this first hand, with my daughters and many of their friends.
I remember that you went to a LuckyDucky/PeopleOfWalmart wedding last year. Any improvement with that couple?
I remember feeling particularly bad for you because you now have Realtor-in-Laws.
Dawkins showing the flag in the back yard of the enemy:
This woman is pretty damn good. You can hear her telepathically telling Dawkins: “go ahead, take your best shot, you’re missin, you got no power, you swingin like a girl, you’re style is weak, you’re missin…”
You gotta give Dawkins credit for seeking out the enemy and doing battle; he could stay in his ivory tower and name call from a safe distance. ( but he’s the Marvin Hagler of atheism)
(That smile she does everytime she finishes talking is infuriating him LOL!)
I don’t know about you guys; sometimes I feel like a monkey, but sometimes I feel like an angel.
Do I have to choose one or the other?
Can’t we all just get along?
Let’s see if I understand her argument:
1. All human beings are unique; therefore God created them.
2. Therefore the ‘Theory of Evolution’ is wrong.
Does that pretty much sum it up?
You have to admire Dawkins’ steadfast patience in repeatedly explaining to her that her ‘uniqueness’ argument actually supports, rather than refutes, the ‘Theory of Evolution.’
Her clueless response each time is to get back to her ‘talking points’ as soon as possible.
All told, it’s a rather humorous, if pointless, conversation.
Dawkins is a bit arrogant and it’s something that troubles a lot of people when they actually do have the upper hand in a debate. Dawkins seems to like smacking his head into a wall talking to people who don’t understand the science at all and have deeply-held convictions about God.
“…talking to people who don’t understand the science at all…”
You have to admit it is a bit humorous to watch the smiley-eyed clueless woman try to hold up her end of the conversation…
You have to admit it is a bit humorous to watch the smiley-eyed clueless woman try to hold up her end of the conversation…
No, its Dawkins who can’t ever convert 3rd and goal. He defends natural selection and then gets all flacid at the thought of applying it to politics. Thats a fail; he can’t have it both ways.
If ape shall not kill ape, then he must defend WHY, even if it stands in opposition to natural selection.
we are on a plane that crashes on take off. We both survive the crash, but Im uninjured and you have a broken leg and you’re blind from a head injury…
There is jet fuel leaking all over the place.
Why should I help you out of the plane.
Why shouldn’t I just save myself?
Why should I risk my life helping someone I don’t even know?
You could be a pedophile?
or a racist…?
Dawkins ain’t landin no bombs because he refuses to throw the punch that will knock her (TF) out.
Thats his fault so don’t hate on her.
Don’t hate the player, hate the game.
I love the game. God created carbon based energy to hasten global warming which in turn speeds up evolution. God knows what he’s doing.
“If ape shall not kill ape…”? What does any of that have to do with natural selection? I don’t understand how your thought experiment fits here.
Bullish Wagers Drop to Six-Month Low on U.S. Budget: Commodities
By Elizabeth Campbell on December 25, 2012
Investors cut bullish commodity bets to the lowest in almost six months as U.S. budget talks stalled, increasing concern that lawmakers’ failure to reach an agreement with push the world’s biggest economy back into a recession.
Hedge funds and money managers reduced net-long positions across 18 U.S. futures and options by 5.6 percent to 758,256 contracts in the week ended Dec. 18, the lowest since June 26, U.S. Commodity Futures Trading Commission data show. Gold holdings dropped to the lowest since August, while those for silver tumbled 14 percent, the most since July 24. Traders turned bearish on wheat for the first time in six months.
House Republican leaders scrapped a plan to allow higher taxes on Dec. 21. Lawmakers won’t vote until after tomorrow’s Christmas holiday on ending the showdown over $600 billion of automatic tax increases and spending cuts scheduled to start in January. U.S. consumer confidence fell to a five-month in December as Americans grow more concerned about the possibility of higher taxes, figures showed the same day.
“What you have is a re-pricing of risk on concerns of no resolution to the fiscal cliff,” said Jeffrey Sherman, who helps manage more than $50 billion of assets for DoubleLine Capital in Los Angeles. “By going over the cliff, for the consumer, you have less money in the system and therefore less economic growth.”
The Standard & Poor’s GSCI Index of 24 commodities dropped 1.8 percent this month. The MSCI All-Country World Index of equities added 2 percent, and the dollar slid 0.6 percent against a basket of six trading partners. Treasuries lost 0.6 percent, a Bank of America Corp. index shows.
The Thomson Reuters/University of Michigan U.S. consumer sentiment index fell to 72.9 in December, the weakest since July. Economists in a Bloomberg survey projected a final reading of 75. Congress won’t reach a deal this year on a budget plan, Representative Kevin Brady, a Texas Republican, said in an interview on Bloomberg Television’s “Political Capital with Al Hunt.” The Congressional Budget Office says failing to avert the fiscal cliff may cause a recession in 2013.
The index of U.S. leading indicators fell in November, pointing to a slowdown in the economy early next year, data from the Conference Board showed Dec. 20. The Federal Reserve lowered its outlook for growth next year to 2.3 percent to 3 percent on Dec. 12, and Chairman Ben S. Bernanke warned that the central bank “doesn’t have the tools” to counter the risks to the economy should Congress not reach a budget deal.
The claim that Obama wants to go over the ‘fiscal cliff’ doesn’t hold water in light of his coming back to D.C. in a final attempt to put together a compromise. Nobody forced him to cut short his holiday break.
Dec. 26, 2012, 10:18 a.m. EST
Obama seeks 60 votes for cliff deal on D.C. return
60 is key number as Obama, senators travel back to capital
By Greg Robb, MarketWatch
President Obama during a Dec. 19 news conference in the Brady Briefing Room at the White House.
WASHINGTON (MarketWatch) — As President Barack Obama and members of the Senate head back to Washington, 60 is the most important number.
It will take 60 votes for any scaled-back fiscal-cliff deal to clear a filibuster in the Senate.
“All eyes are on the Senate in the next 48 hours,” said Chris Krueger, senior policy analyst at Washington Research Group.
There are just five days remaining until automatic spending cuts and the expiration of Bush tax cuts kick in.
U.S. stocks rebounded Wednesday after a two-session retreat on hopes that the resumption in budget talks would avert the cliff. The Dow Jones Industrial Average (DJIA -0.01%) was recently up 24 points to 13,163.
Obama and Senate Majority Leader Harry Reid are expected to put together a small deal to blunt the fiscal drag scheduled for December 31. Read Obama presses for smaller fiscal-cliff deal.
Krueger said the “small ball” bill would extend tax cuts for those making $250,000 or less. This would result in an increase in tax rates for wealthy Americans. The measure is also expected to extend unemployment insurance and set the top tax rates on capital gains and dividends.
The biggest uncertainty remains how Senate Republican Leader Mitch McConnell and his Republican colleagues would react to such a measure.
At least seven Republicans would have to join Democrats to pass any fiscal-cliff plan through the Senate.
McConnell is up for re-election in 2014. Democrats question whether he will be able to work with Obama and Reid to pass a fiscal-cliff deal.
Senate Republicans are not keen to vote to raise taxes if the plan is not going to win approval in the House of Representatives.
The House remains in disarray after House Speaker John Boehner failed late last week to pass his version of a fiscal-cliff deal. See: House Republicans cancel Plan B tax vote.’
If the Senate passes a bipartisan plan, Boehner would face the choice of bringing it to the House floor, where it might pass but be opposed by a majority of Republicans.
So close and yet so far
The quest to avert the fiscal cliff is as uncertain as ever after rival plans are rejected. Here’s a look at how the coming days may play out.
Obama will fly overnight Wednesday back to Washington. The Senate has votes scheduled for Thursday. The House remains in recess. Its members can return within 48 hours if leaders call them back.
“It remains very unclear if there are the votes to pass anything in the next five days,” Krueger said in a note to clients.
Robert Reich, a former member of President Bill Clinton’s cabinet, said the White House’s hope of getting the Senate to pass a small fiscal-cliff deal that raises taxes on the wealthy won’t work because the measure can’t get through the House.
In a column for Business Insider, Reich said Obama should go over the cliff and force the Republicans’ hand. Early next year, Democrats could introduce legislation that restores the tax break for the middle class retroactive to Jan. 1. Republicans would then feel compelled to go along, Reich said.
Krueger said “there is a 70% chance that we go over some form of the cliff at the end of the year.”
“There is a lot of maneuvering between all sides to be sure; they still have a chair when the music stops on Jan. 1 and the blame game could reach full swing by the weekend,” he said.
It says they need 7 Republicans in the Senate to get their version of any Bill put through. I don’t get it.
Is it an automatic assumption that the Democrats will march in “lock step” to vote for the Reid Version of the Bill?
That is the language that the “Press” always uses for Republicans. IF ALL the Republicans vote for or against anything, they are robots, following their marching orders. Rush Limbaugh clones.
If ALL the Democrats vote the same way, then they are patriotic Americans helping usher in a new era of freedom in American, against a tide of right-wing extremists.
And stupid Americans just eat up the propaganda like it’s gravy.
They need 7 to break a filibuster.
Agreed. Also: if the republicans and democrats disagree it is because the republicans are partisan hacks.
“…it is because the republicans are partisan hacks.”
“… it is because the republicans are partisan hacks.”
If ALL the Democrats vote the same way, then they are patriotic Americans helping usher in a new era of freedom in American, against (AN OUTGOING) tide of right-wing extremists.
Fixed it 4 ya Dio.
This “small bill” is still going over a smaller cliff. The small bill would do what Obama wants on taxes, but it doesn’t touch the sequestration. The real question is whether this gets through the House.
I see two scenarios:
1. Pelosi has rounded up enough rogue R’s in the House to join with Dems on cutting taxes on the middle class, and they are waiting on Reid to round up enough rogue R’s in the Senate to vote cloture. In this case, the bill would pass, yay middle class, and they could work on sequestration next month. And it would break the R locksteps in both Houses.
2. The R’s remain lockstep in the House and Senate and refuse to bring the small bill to a vote. In that case, the Senate R’s will be filibustering what is effectively a show bill. Last week’s failure of the plan B showed that the R’s in the House are coddling the rich. Filibustering this show small bill would show the same of the R’s in the Senate. Meanwhile, we go over the cliff and Obama has yet another chance to demand tax cuts on the middle class in January.
It’s a win-win for Obama. No matter what he does, he gets at least his tax hikes on the rich.
demand tax cuts on the middle class in January.
How’s he going to “pay” for that?
By raising the debt ceiling. That’s another issue they’re working on.
I haven’t been paying attention. Oxy, you make it sound like a Soap Opera. Who will end up in bed with whom??? Tune in tomorrow!
Dec. 26, 2012, 12:00 a.m. EST
Chinese rating agency puts U.S. on negative watch
By Chris Oliver
HONG KONG (MarketWatch) — Chinese rating agency Dagong Global Credit Rating Co. on Tuesday put U.S. sovereign debt on a negative watch and highlighted what it said was a lack of political consensus on how to tackle Washington’s debt problem over the long term. In a statement on its website, the rating agency said “each political party insists on the proposition favorable for its own interest. Therefore, it is difficult to form a long-term consensus on solving the debt problem ultimately, which leads to the unceasingly fiscal deterioration of the government.” Dagong said outstanding U.S. federal debt will rise to 105% of GDP and 609% of fiscal revenue by the end of 2012. It warned that the “solvency of the federal government is on a descending trend.” It also warned of a difficult 2013 if there was no resolution on how to avert the fiscal cliff of austerity measures due to take effect at the start of the year. “The U.S. economy will probably fall into recession in 2013, and stay weak in the long term, which will further weaken the material basis for the government to repay debt.” In August 2011, Dagong cut U.S. Treasurys to A from A+, with a negative outlook, saying growth in U.S. debt is still outpacing revenue growth.
Ha! Now that we Americans are facing our own taste of “austerity” by going over the fiscal cliff, everyone in Asia is pooping bricks. Our “trading partners” already saw the dismal Christmas sales numbers, and the idea that we might end up having even less money to buy crap from them is scaring them to death.
I think a lot of people were counting on this being a pretty spectacular Christmas spending season. We don’t often get 5 full weekends between the holidays. I’ve heard the news blaming it on Sandy and the stats they cited about spending being lots, lots lower in the areas that were hardest hit actually support that (despite my natural scepticism of people who blame it on the weather). But in the end, the reason doesn’t matter as much as the fact that the buying just didn’t happen.
But in the end, the reason doesn’t matter as much as the fact that the (Christmas) buying just didn’t happen.
The reason does matter when the reason is structural. And the structural reason IMO is because most American’s income has been hammered by globalization and economic policies that have led to massive wealth and income inequality.
Many have seen this coming for decades.
I don’t think it really does. Not for Christmas spending. If you spend less on your family for Christmas, you don’t make up for it by celebrating Christmas in May. That demand is gone until next year. So the structural reasons may be relevant for people looking at long term policy stuff, but for employees at Best Buy or Toys R Us? They are going to get fired either way.
So the structural reasons may be relevant for people looking at long term policy stuff, but for employees at Best Buy or Toys R Us? They are going to get fired either way.
But they’re getting fired precisely because of the long-term policies’ effect on their Best Buy jobs.
And the long-term policies are why many of them had better paying jobs before they were forced to settle for their current Best Buy type jobs that are now threatened by the same policies that led them to their current threatened job.
Most jobs at Best Buy are for December, only….regardless of how December goes.
I think a lot of people were counting on this being a pretty spectacular Christmas spending season.
Then it just goes to show how out of touch the PTB are. They can’t seem to get it through their thick skulls that long term stagnant wages == less spending, not more.
Sheesh, everyone I spoke with told me the same thing: “We’re spending less this year”, because:
Made less than last year
Bracing ourselves for higher taxes, tuition, healthcare, energy costs, etc. next year
And so on
I spent pretty much the same amount, but that is because it is all pretty minimal. Maybe spent a little more because I bought stuff for the niece and nephew when I found things I knew they would like. Could I have written down the names and looked it all up on Amazon to try to get a better price? Yeah. But when a well edited and well organized store helps me find a book or a toy that is perfect for one of them, I like to reward the service that the owner provided. Even if most of it is made in China.
I am pretty sure I didn’t buy anything made in China as a gift this year. Mostly local artisan stuff. I give what I like.
Who would bear the costs of funding the latest proposed underwater mortgage refinance program?
It amazes me how in an era of ever-tight budgets, there always seems to be enough extra to pay for one more homeowner bailout program.
Banksters need more bonuses!
How is it that there is always sufficient money in the budget to finance yet another housing market bailout?
Updated December 25, 2012, 9:44 p.m. ET
Refi Program Expansion Eyed
By NICK TIMIRAOS
The Obama administration is considering expanding its mortgage-refinancing programs to include borrowers whose mortgages aren’t backed by the government and who owe more than their homes are worth, according to people familiar with the discussions.
Such a move would benefit borrowers and provide a boost to the economy by unleashing cash that homeowners could spend elsewhere. But one proposal being considered would also transfer potentially riskier loans held by private investors into the taxpayer-supported mortgage giants Fannie Mae (FNMA +1.17%) and Freddie Mac (FMCC 0.00%).
About 22% of all homes with a mortgage, or around 10.8 million homes, were worth less than the outstanding balance at the end of June, according to CoreLogic. That number has fallen from 12.1 million at the end of last year as home prices have picked up, but around 10% of all homeowners with a mortgage are still deeply underwater.
Fannie and Freddie own or insure about half of all home loans, and most underwater borrowers with their backing can refinance to get a lower mortgage rate as long as they are current on their loans. That initiative has benefited holders of more than 330,000 underwater mortgages through October this year, up from around 60,000 in all of 2011. “It has been unbelievably successful,” said Scott Simon, who heads the mortgage-backed securities group at Pacific Investment Management Co., or Pimco, a unit of Allianz SE (ALV.XE -0.09%).
Officials at the Treasury Department and the White House now would like to include borrowers who have been locked out because their loans aren’t backed by the firms. Those loans are held by private lenders or investors, and some of them were issued by subprime lenders and bundled into securities by Wall Street firms.
Because such a move would transfer billions of dollars of these mortgages to the government-backed mortgage companies, it would require congressional authorization to temporarily change Fannie’s and Freddie’s charters. Under the proposal, Fannie and Freddie would be allowed to charge higher rates to borrowers in order to compensate for the risk of guaranteeing refinanced loans that are underwater and more likely to result in default. Some economists argue that those borrowers could be relatively good credit risks because they have been paying their mortgages through the financial crisis, and that Fannie and Freddie could turn a profit on such mortgages while helping the housing market.
But industry officials say such a program would work only if banks were given immunity from having to buy back any loans they refinance that subsequently default, and that such a shield would boost the risk for the taxpayer-backed companies.
Fannie and Freddie “have already proved that they really weren’t good at pricing higher-risk assets” during the housing bubble, said David Stevens, chief executive of the Mortgage Bankers Association. “What gives us the belief they can price it better today?” Allowing the firms to “reload up their balance sheets…will ultimately be a taxpayer expense,” he said.
In addition to congressional backing, the plan would need the support of the firms’ regulator, the Federal Housing Finance Agency, which earlier this year rejected a separate administration initiative to permit the firms to write down mortgage balances. The FHFA has indicated its support for the general idea of the refinance program, though many key details have yet to be completed, according to people familiar with the discussions. Representatives of the FHFA and Treasury declined to comment. A White House spokeswoman didn’t respond to inquiries.
Sen. Jeff Merkley (D., Ore.) proposed a similar program this year that would create a government vehicle to purchase underwater loans from mortgage-bond pools. Administration officials have discussed with his office how to structure such a plan using Fannie and Freddie as the vehicle, according to people familiar with the discussions. A Merkley spokeswoman declined to comment.
Such a plan would likely reach no more than a few hundred thousand borrowers, or less than 5% of all outstanding mortgages. Some 24% of outstanding loans in privately issued mortgage bonds, representing around $226 billion in loans to about 900,000 borrowers, are current on their payments and underwater, according to estimates by analysts at Barclays Capital and J.P. Morgan Chase & Co.
Because Congressmen and Fed officials are people just like any of us. They wipe their behinds just like the rest of us. They are as self-interested as the rest of us. They perceive it’s in their self-interest to do bailouts, as they receive tremendous amount of money from the crony sectors, and the crony sectors are the future employers and clients.
The Founders instituted a system of checks and balances because they understood the nature of man to be self-interested and his desire to accrue power unto himself. And power corrupts. And <a href=”people have known Congress to be ethically-challenged for a long time.
So this monopsonist consolidation and exertion of power is troubling.
Political leaders like to present themselves as ascetic, selfless leaders, above the fray, concerned not about themselves but only about the good of the country. But they wipe their behinds just like the rest of us. They’re as self interested as the rest of us, they’ve gotta worry about their families’ financial situations and they are more ethically challenged.
So, more bailouts for the big contributors and inconsequential teeth gnashing for those who actually bear the burden of economic downturns.
Rising home prices lift all economic boats (or so I’ve been told by the MSM…).
Dec. 26, 2012, 10:55 a.m. EST
The news is good on home prices
The trend is the homeowner’s friend when it comes to home prices. Steve Potisk looks at that upbeat news on the home front as well as the latest packaging for your favorite wine and the winners in the category of best Holiday 2012 commercials.
Housing Poised to Bolster U.S. Growth as Sales Rise: Economy
By Lorraine Woellert - Dec 20, 2012 1:52 PM PT
Sales of previously owned homes climbed to a three-year high in November, reinforcing forecasts that the industry is set to contribute to U.S. annual economic growth for the first time since 2005.
Purchases of existing houses increased 5.9 percent to a 5.04 million annual rate, the most since November 2009, the National Association of Realtors reported today in Washington. The median forecast of 82 economists surveyed by Bloomberg projected a 4.9 million rate.
“Housing is going from being a powerful headwind to the economy to what will be a powerful tailwind,” said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “It turned around in 2012, and I think it’s going to take off in 2013.”
Zandi must be gloating these days. Finally after 4 yrs, he ‘appears’ to be right this time. Worse than a broken clock.
The bubble-era notion that rising home prices are good for the U.S. economy is alive and well.
This thinking appears to be one of those consensuses of which alpha-sloth is so enamored.
Does it matter whether the price gains are based on fundamental factors versus behind-the-curtain financial manipulation?
Home Prices in U.S. Rose More Than Forecast in October: Economy
By Michelle Jamrisko - Dec 26, 2012 7:18 AM PT
U.S. Home-Price Gains Accelerate Most in Two Years
Home prices climbed more than forecast in October, indicating a rebounding real-estate market will bolster the U.S. economy for the first time in seven years.
The S&P/Case-Shiller index of property values in 20 cities increased 4.3 percent from October 2011, the biggest 12-month advance since May 2010, the group said today in New York. The median forecast of 30 economists in a Bloomberg survey projected a 4 percent gain.
Property values will probably keep heading higher as record-low mortgage rates, a growing population and an improving economy spur demand for housing. The turnaround in real estate is buoying household confidence and wealth, one reason why consumer spending is improving even as concern mounts that lawmakers will fail to stave off looming tax increases.
“The housing market is definitely starting to recover,” said Ryan Wang, an economist with HSBC Securities USA Inc. in New York, who’s the second-best forecaster of the S&P/Case- Shiller index over the past two years, according to data compiled by Bloomberg. Higher property values have “added about a trillion dollars to household wealth just since the beginning of this year.”
The boost to household net worth “will provide an important benefit for consumers and for the broader economy,” Wang said.
Dec. 26, 2012, 11:35 a.m. EST
Stocks fall as retailers take post-holiday hit
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) — U.S. stocks on Wednesday extended losses into a third session as retailers were hit after the Christmas holiday and as investors looked to the next day’s resumption of budget talks.
“If nothing gets decided by next Monday, the economy will not immediately plunge over the fiscal cliff as employers have not changed payroll-tax withholding rates for January payrolls and federal budget cuts would slowly phase in,” Fred Dickson, chief investment strategist at Davidson Cos., wrote in an emailed note.
That said, the stock market will likely “sell off 3% to 5% from the present level in the event that even a small temporary ‘fiscal-cliff’ bridge deal is not done by early January,” Dickson added.
What is the big deal. 3-5% is like 500 to 700 point low. It will regain those points and even more as soon as some deal is signed.
Proof that the US solar industry is doomed.
Why would any american want to pay 3 times what a german pays for the same thing?
What I read between the lines in that report is that in the USA, vendors and installers are more likely to gouge the customer. Looks to me like Mr. Invisible Hand has once again failed us.
US retailers report weakest holiday sales since 2008
Read more: http://www.foxnews.com/us/2012/12/26/us-holiday-retail-sales-growth-weakest-since-2008/?test=latestnews#ixzz2GBvA4HK0
A report that tracks spending on popular holiday goods, the MasterCard Advisors SpendingPulse, said Tuesday that sales in the two months before Christmas increased 0.7 percent, compared with last year. Many analysts had expected holiday sales to grow 3 to 4 percent.
Two decades ago, I could not have imagined we’d see 30-yr T-bond yields under 3% in my lifetime.
And a 10-year yield well under 2%, to boot. What does it portend?
Dec. 26, 2012, 2:57 p.m. EST
Treasurys gain as fiscal cliff approaches
By Deborah Levine, MarketWatch
SAN FRANCISCO (MarketWatch) — Treasury prices edged up Wednesday, pushing yields lower, amid concerns that lawmakers aren’t even in Washington to negotiate a deal to avert the most severe economic impact from automatic tax hikes and spending cuts.
“Bond yields are temporarily being pulled lower by the fiscal-cliff impasse, as any thought of a ‘grand bargain’ has been exposed as wishful thinking,” said Richard Gilhooly, director of interest-rate strategy at TD Securities.
Yields on 10-year notes, which move inversely to prices, fell 2 basis points to 1.76%. A basis point is 1/100th of a percentage point.
Yields on 30-year bonds declined 1 basis point to 2.93%.
It’s because of deflation.
What about yield suppression (aka a “painless deleveraging process”)?
The Fed Boosts The Economy, But What About The Risks?
by John Ydstie
December 26, 201210:32 AM
Listen to the Story
All Things Considered
4 min 4 sec
The Federal Reserve continued to keep its foot on the accelerator in 2012, using unusual tactics to try to boost economic growth. But there’s disagreement among economists about whether the Fed’s policies were effective or whether the risks to the economy outweighed the rewards.
Chairman Ben Bernanke and the Fed employed two main tools in 2012, to try to boost economic growth — Operation Twist, in which the Fed bought long-term Treasury bonds, and a program to purchase mortgage-backed securities. Both were aimed at driving down long-term interest rates.
A Boost For Housing
Mark Zandi of Moody’s Analytics says the Fed’s effort has been a big plus for the housing market.
“It’s lowered mortgage rates, which has helped lots of homeowners refinance their mortgages and lower their monthly payments,” Zandi says. “It’s certainly been key to turning the housing market around, and housing is vital to the strength of the broader economy. It’s helped to lift stock prices, and stocks are very important to collective thinking and people’s perception about how well we’re doing.”
And, Zandi says, the Fed’s efforts have kept the value of the dollar low, which has helped U.S. exports.
Nariman Behravesh, chief economist for the research firm IHS Global Insight, also thinks the Fed’s policies provided an important boost for the economy in 2012.
“You know people say, ‘Oh, it’s done more harm than good.’ I think that’s nonsense. It has had a small, but nevertheless positive impact in particular on housing,” Behravesh says.
Asset Bubbles Feared
Harvard professor Martin Feldstein says the Fed’s policies in 2012 and for the past few years have created a risk of higher inflation. And he says “there’s serious risk that they’re producing asset price bubbles that, like all bubbles when they burst, could be very damaging.”
Feldstein believes the Fed’s success in pushing long-term interest rates lower is inflating the value of assets like homes and stocks and bonds. And when the Fed has to reverse course, as the economy picks up, the prices of those assets will take a tumble and damage the economy.
“It feels good now while it’s happening but I think it lays a trap for us later on,” Feldstein says.
Peter Fisher, a former Treasury official who’s now senior managing director at the Wall Street firm BlackRock, says the Fed’s policy of pushing long-term interest rates to extremely low levels comes with trade-offs.
“On the one hand you can be holding down the cost of refinancing a mortgage and hope to encourage people to borrow,” Fisher says. “On the other hand by holding down the long end you are discouraging lenders.”
Chicago lags in U.S. housing recovery
by Caroline O’Donovan
Marketplace for Wednesday, December 26, 2012
A group of row houses are under construction in Chicago, Ill. The latest figures on the U.S. housing market show a turnaround is taking hold. But Chicago is a stubborn outlier on the road to recovery.
Scott Olson/Getty Images
No Chicagoan likes to hear the words “Second City.” But when it comes to real estate, Chicago has been vying to keep up with the rest of the country for years.
According to Dennis Rodkin, who writes the Deal Estate column for Chicago Magazine, Chicago’s No. 1 problem is foreclosures — and how long they can take under Illinois law.
“What people refer to as the foreclosure free ride — the time between when you stop paying for your house and when you might be kicked out of your house — can be over three years at this point,” he says.
Illinois is not the only state where foreclosures get caught up in court, but Chicago is also dealing with its notorious winters.
“A lot of these houses have sat through one if not two or three winters,” Rodkin says. “They may have water damage from burst pipes, they may have mold, so its more expensive to convert these low cost foreclosures.”
The recession that keeps on taking
Opening presents doesn’t mean the need for giving has passed
Clients wait in line to shop for food at the St. Vincent de Paul food pantry in Indianapolis in November. (AARON P. BERNSTEIN, Reuters Photo / December 20, 2012)
December 27, 2012
The respectfully nicknamed Great Recession officially ended in June, 2009, and the wounds from that economic collapse have been slow to heal. Yet even a robust recovery, as the nation experienced after the double-dip recessions of the early 1980s, would have helped only so much. Inevitably, human pain lingers.
Using decades of Social Security records, academic researchers have shown that workers who lose their jobs in mass layoffs suffer deep, persistent losses in their incomes and living standards. Losing a job nearly always hurts (we’ll make allowances for people who were planning to quit). But it hurts much more to lose a job during hard times, such as 1980-82, or 2007-09.
Even in relative good times, laid-off workers take a huge financial hit as a result of their involuntary job losses. In a recent study, scholars at the University of Chicago and Columbia University found that men ages 50 and under who were laid off when the nation’s unemployment rate stood below 6 percent could expect to lose the equivalent of 1.4 years of income over the rest of their working lives. That’s money they otherwise could have expected to earn had they been able to continue on their former career trajectories, before layoffs forced them to take jobs that paid less.
And when the unemployment rate exceeds 8 percent, as it did from early 2009 until this September, those thrown out of work lose a staggering 2.8 years of income over the rest of their working lives.
Rasmussen Survey: Recession Likely, Fiscal Cliff Deal or Not
Wednesday, 26 Dec 2012 12:32 PM
By Forrest Jones
Most Americans expect the U.S. economy to slide into a recession next year whether policymakers avoid the fiscal cliff or not, a new Rasmussen Reports survey finds.
The White House and Congress remain at odds over fiscal reforms, and failure to agree on a 2013 budgetary framework would allow sweeping tax hikes to kick in at the same time deep government spending cuts take effect a the end of 2012, a combination known as a fiscal cliff that could tip the country into a recession next year.
Republicans in the U.S. House of Representatives canceled plans to vote on a budget proposal put forth by House Speaker John Boehner, R-Ohio, widely known as Plan B, that called for tax hikes on those with incomes over $1 million, well above a White House plan that would hike taxes on those with incomes topping $400,000.
Editor’s Note: I Wish I Were Wrong — Economist Laments Being Right. See Interview.
Osborne’s vision of grim stagnation sets scene for QE III
The apparent success of quantitative easing in the US means QE will be pursued with increasing vigour in all the main developed markets.
Paper money: the Bank of England is to extend its quantitative easing programme by a further £75 billion - Printing more money won’t work this time
‘The healing process after a financial crisis is a long, hard slog and we are still only part- way through this painful journey.’ Photo: ALAMY
By Tom Stevenson
5:00PM GMT 08 Dec 2012
As they have for years now, markets shrugged off the Chancellor’s Autumn Statement.
The stock market’s biggest mover as he delivered his gloomy message was Tesco – and its shares jumped in response to reports that it was calling time on its loss-making US venture, Fresh & Easy. Gilts, which might have been expected to fall on the back of the bleak economic outlook and the rising threat to Britain’s triple-A rating, actually rose a smidgen on the day.
Clearly, the health of the UK economy isn’t the market mover it once was, but investors would be wrong to think the dire picture painted by George Osborne on Wednesday has no relevance. It does – the grim stagnation he outlined will set the scene for investors for years to come.
What was clear from the Chancellor’s canter through the macroeconomic outlook in his opening remarks was how little room for manoeuvre he has. The fundamental problem for the UK – as for other developed markets – is that five years after the financial crisis began, we remain mired in debt. While the deficit may be on a downward trend, stagnating growth means that the ratio of government debt to GDP will hardly change at all over the next half-decade.
In fact, at 77pc of economic output in 2018, the millstone of government borrowings will be heavier, relatively speaking, in five years’ time than it is today. The healing process after a financial crisis is a long, hard slog and we are still only part- way through this painful journey.
McConnell Pushed Into Fiscal Fight as Congress Faces Deadline
By Kathleen Hunter & Richard Rubin - Dec 26, 2012 9:00 PM PT
Mitch McConnell, the Senate minority leader who has stayed largely outside the U.S. budget fight this year, will be thrust into prominence just five days before the deadline for tax increases and spending cuts.
After the House of Representatives failed to act and the Treasury Department said yesterday it will start taking special measures now to avoid breaking the debt ceiling, McConnell’s next move may influence whether more than $600 billion in tax increases and spending cuts begin in January. President Barack Obama is pressing for lawmakers to craft an interim deal to avert the so-called fiscal cliff as senators return to Washington today.
Should Democrats who control the Senate heed Obama’s call, McConnell will choose from three options: using his legislative experience to help forge a bipartisan deal, wielding his power to block a proposal by Democratic Majority Leader Harry Reid from reaching a vote, or letting Democrats advance their own plan without having to endorse it.
“His instincts and his background have always been to engage more in the legislative bargaining and deal-making,” said Stephen Voss, associate professor of political science at the University of Kentucky. Still, “there are lots of pressures that encourage him to represent the more conservative wing of the Republican Party in these negotiations, and we’ve seen that,” Voss said.
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