January 1, 2013

Predictions For The New Year

What are your predictions for the coming year? Here’s some from one year ago. “It will be another year spent trying to find out how much debt governments can rack up without causing economic collapse. Another year spent trying to protect flawed debt markets which make so much money for politicians via their big donors. Will this be the year of the Black Swan? Stay tuned.”

A reply, “Governments going deep into debt is the only thing that stopped the collapse of the private financial/consumer debt-based economy. Governments didn’t cause the collapse. The question now is, can governments stop going into debt before they themselves collapse, without causing the private economy to collapse?”

“If the answer is no, then governments should have allowed the private economy to collapse the first time and saved themselves, as in Iceland. That’s the perfect test: Iceland vs. Ireland. Same situation, radically different choices.”

One said, “If 2011 was Occupy then 2012 will be long hot summer…”

Another, “Predictions, your predictions are worthless, remember, 2012 is the end of the world according to the Aztec calendar.”

And another, “I predict Congressional gridlock will continue in 2012.”

A reply, “For one I am glad Congress is not productive. The framers intend it difficult to pass legislation to protect the governed.”

One said, “I predict a decent year for the economy, despite a continued slow decline of housing prices. Obama gets re-elected as a result. The sub-3.0% GDP growth, falling income relative to inflation (except for the rich and retired public employees), and small employment gains will become par for the course, but people will get used to it.”

“I don’t think the long term problems have been solved. These include an excess of consumption in the U.S., an increasingly unequal distribution of income here, and the reliance of producers across the world on U.S. workers who no longer have money or the ability to borrow. An aging population that didn’t save. And a poorer younger population which cannot pay as much for houses and other assets as those coming before. These problems will take decades to overcome as the country gradually de-leverages, asset prices fall, and Generation Greed passes on.”

“In the short run, however, the housing bubble and bust has done most of the economic damage it is going to do. Construction can only go up from rock bottom levels, generally in smaller units in locations that provide short commutes, and no one is borrowing against homes to finance short term consumption anymore.”

One had this, “There is still so much money sloshing around this state. Every time I turn around there is some announcement that Lockheed has won another contract or such and so has won a grant. These grant announcements seem to be made quite regularly w/higher education and medical being (I think) the usual beneficiaries. I have to say I am really surprised because I thought the stimulus money was supposed to be drying up right about now. I’d really like to follow the money back to it’s sources and also do a little digging as to who specifically is benefiting. Somehow I don’t expect to find out it’s the average Joe on the street.”

“The Lockheed contracts have been particularly interesting. I don’t want those people to lose jobs, believe me. It’s just there’s a sense of disconnect when you hear the government is broke and then every few months you hear of a new contract being awarded. Aren’t the federal and state governments supposed to be out of money? Where is all this funding coming from?”

A reply, “It’s only broke when it comes to our benefits. Remember there is an infinite supply of currency available to them. The variable being confidence in the Fiat.”

Another, “The economy will continue to divide Americans into two classes. 1) Americans with money and or good jobs. 2) Americans with crummy jobs or no jobs and no future. Home prices will go up in areas aligning with No1 above and continue down in the No 2 areas. Wild card: government debt how long can it continue without problems?”

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Comment by Combotechie
2012-12-29 09:25:05

Yawn. My prediction remains the same as last year’s and the year before and the year before …

Cash will be king and cash flow will be king.

Since a good-paying job generates a good cash flow then a good-paying job will also be king - especially since the the return on invested cash is so low.

And because The Bernanke pledges to keep interest rate to near zero not only returns on invested cash will be near zero but returns on other investments will remain very low which will hose up the planned delivery of a lot of promised money, such as pensions.

Low returns on pensions translates to pensions getting cut one way or another, which adds value to a good-paying job - a good generator of cash flow.

A good-paying job is a terrible thing to waste but nevertheless millions of people will waste them because they had a birthday and turned sixty-five or some other age and do not understand that times have changed and what used to be true during The Great Expanison that started before they were born has now turned into The Great Contraction and many of the luxuries granted by The Great Expansion are being yanked back - retirement and pensions being a couple of them.

Comment by Mo Money
2012-12-29 09:48:10

“retirement and pensions being a couple of them.”

Nope, on plan to retire at 62. Been constructing my own dividend income portfolio for some time now as well as taking advantage of 401K’s at work. It’s not fair to younger people to keep clinging to a job that I no longer really need.

Comment by scdave
2012-12-29 10:11:22

It’s not fair to younger people to keep clinging to a job that I no longer really need ??

+1 for you…I agree….

Comment by Happy2bHeard
2012-12-30 02:48:14

It is easier to keep working and maintaining a marketable skill set than to try to get back in the work force if retirement plans go south.

It would take more millions than I can save in the next 5 years for me to feel comfortable about retiring. 30 years is a long window of time and a lot can go wrong in that span.

It is entirely possible that multiple things will go wrong in the next 30 years - stock market crashes, municipal bankruptcies, inflation, failing health that requires expensive care, theft and scams perpetrated by trusted individuals (see Madoff).

If I had a family history of death before 75 or an acute or chronic disease that would limit longevity, I might feel better about retiring early. But I have to plan as if I will live to 95. So I plan to work as long as I can, preferably into my 80s.

If I won the lottery, I would still have to do something. I wouldn’t be happy sitting around all day.

Comment by AmazingRuss
2013-01-01 10:15:35

Perhaps you could take up base jumping.

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Comment by AmazingRuss
2012-12-30 15:47:47

I wish more people were like you. I hope I can be when I reach that point in life.

Comment by GrizzlyBear
2012-12-29 11:06:13

“Yawn. My prediction remains the same as last year’s and the year before and the year before …Cash will be king and cash flow will be king.”

Credit continues to be king. House prices are bid up by credit junkies sporting 3.5% (borrowed, of course) down payments, and borrowing high multiples of yearly income. To make matters worse, inventory has been artificially limited by Megabank, Inc. holding properties off the market subsequently pushing up prices which diminishes cash purchasing power. It makes no sense to use hard-earned cash to compete with credit (and its junkies). Cash is not king. One day, cash will be king, but not until the easy credit is gone.

Comment by Professor Bear
2013-01-01 10:46:06

Good luck waiting out the reign of King Credit. My impression is that the current leadership of the Fed intends to extend it indefinitely by whatever means necessary. So the question gets down to what developments in the real economy might thwart current plans to immortalize King Credit through QE-to-infinity-and-beyond and other top-down interventions in the financial system.

Comment by You're Underwater... And Sinking
2012-12-29 09:27:54


The misinformative media messaging and reality will continue moving in opposite directions and a growing number of people will begin to see that. It’s already happening. Ask around….. J6P will tell you “housing isn’t getting better around here”. Of course we have to define “getting better” but you get the drift.

Contractors will continue to eviscerate comps and anyone who bought a house 1998-2012. Schumacher is already advertising nationally “why buy someone’s used home when you can buy a new one for less.”

You debt-junkies are going to get some schooling this year.

Comment by Mo Money
2012-12-29 09:49:54

“You debt-junkies are going to get some schooling this year”

Really ? with interest rates at all time lows ?

Comment by Pimp Watch
2012-12-29 09:54:18

You mean with housing demand at 1997 lows and falling?

Comment by Ben Jones
2012-12-29 10:19:46

‘with interest rates at all time lows’

It’s so easy to focus on rates. But compare a $40,000 loan at 7-9% paid in 15 years versus a $150,000 (or more) note at 4% paid over 25 or 30 years. I regularly see people here say a $350-500k house is ‘do-able’. What were typical credit card balances when houses cost $40k? Or student loans? What amount of taxes went to cover interest on government debt? All this while inflation adjusted incomes have been flat or falling the whole time.

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Comment by In Colorado
2012-12-29 10:46:19

I regularly see people here say a $350-500k house is ‘do-able’.

I have been saying that I’m not seeing houses in that price range move, except perhaps in markets like Silly Valley. Out here the 200K house rules. They sell quickly, with multiple bids, while the 300K+ houses sit and languish.

I also know that my younger colleagues are dying to buy real estate, though they are very picky as to where and what price point. And it does no good to explain to them why now might NOT be a great time to buy, that the shortage is artificial, that when interest rates go back up, prices will drop, that they might get stucco when they have to relocate, etc. They aren’t interested. They are convinced that buying a house is sure thing, with built in profit guaranteed. And IMO, it’s the artificial shortage that is driving the new frenzy.

Comment by Ben Jones
2012-12-29 10:51:28

‘it’s the artificial shortage that is driving the new frenzy’

It is probably more of this:

‘They are convinced that buying a house is sure thing, with built in profit guaranteed’

Comment by Rental Watch
2012-12-29 11:06:24

The pendulum does swing the other way as well. It is easy to say not to get lured by low rates because higher rates will crush home values. But we can see what happens when rates go very high (as they did in the early 1980’s). People still found a way to buy, despite the monthly math looking very ugly. Prices didn’t fall as much as people would predict based on the higher rate math constraining household budgets (which overall is what you are talking about)

Not trying to evaluate individual decisions, only looking at the broader market, I continue to believe:

1. Sentiment is more powerful than interest rates;
2. Prices are set on the margin;
3. The highest earning renters have the potential to drive the market–other renters get hosed by higher rents and home prices…ultimately forcing them to double-up, etc. if their salaries are not high enough.

Consider CA as an example (you can do the same exercise elsewhere):

Total Households: Approximately 12.4 million
Total RENTER Households: 45% of 12.4 million, or about 5.6 million renter households
“Normal” housing unit growth in CA (currently is WAY less) is approximately 200k (we actually rarely achieve this number), let’s say, 125k are for-sale (my estimate)…

This means that there is the potential for the top 2.5 percent of renters to set the market for single family housing, even in a “normal” market…IF they decide they want to buy–that sentiment is critical for these folks to make the move.

Sentiment is much more important than doing the math on the average renter and seeing if there is a budget constraint.

And yes, I’m aware that there are other sellers than those building new homes, but there are also other buyers besides renters turned owners, and not all new homes are overall net new homes (some replace existing structures).

Comment by scdave
2012-12-29 11:07:58

with built in profit guaranteed ??

Which is something that I have never quite understood…Yes, I suspect that the past has much influence on ones thinking about what one can expect in the future on housing prices but what if I asked the following question;

If I told you with absolute guarantee that your house would not go up or down 10-cents in value in the future would you still be inclined to buy it ??

My answer would be yes….

Comment by Combotechie
2012-12-29 11:08:21

“‘They are convinced that buying a house is a sure thing, with built in profit guranteed.’”

This attitude can be viewed as a type of capital that has been accumulated over the years and can be, and is, regularly cashed-out (or busted out if you prefer).

Once the attitude is gone then the capital will also be gone.

Comment by Ben Jones
2012-12-29 11:16:58

‘because higher rates will crush home values’

Over priced houses fall under their own weight. People are leaving California and have been for many years. It’s probably a good thing as when I go out there, the places that don’t look like west Texas (probably 80-90% of the state) are packed like sardines. When I was a controller for a dot-com, we had an office in the bay area. Those three lazy 20 somethings cost us more than 13 people in Austin. Now I understand taxes are going up even more in California. $500k for a house in La Jolla that doesn’t even have a driveway? Sign me up!

Comment by Rental Watch Is A Liar
2012-12-29 11:17:03

“Prices didn’t fall”

You’re a liar.

Comment by Rental Watch
2012-12-29 11:46:20

“Prices didn’t fall as much as people would predict based on the higher rate math constraining household budgets (which overall is what you are talking about)”

How about the whole quote (and in the context of the rest would be even better…talking about the early 80’s).

Comment by In Colorado
2012-12-29 12:02:02

‘it’s the artificial shortage that is driving the new frenzy’

It is probably more of this:

‘They are convinced that buying a house is sure thing, with built in profit guaranteed’

Hmmm… a bit of both, probably, but they keep saying “there’s nothing to buy!” It doesn’t help to point out all the empty space in the Westminster/Broomfield area and say “Why do you think so few houses are being built?” They go into “I can’t hear you” mode.

One thing I will give them credit, they aren’t buying McMansions. My 100K per year colleagues are buying (or tying to buy) smaller houses.

Comment by SV guy
2012-12-29 09:46:28


Can we revisit last years predictions? I’d be curious how accurate the HBB was.

Comment by Pimp Watch
2012-12-29 09:50:57

Click on the link and read them.

Comment by SV guy
2012-12-30 08:40:08

Doh, I didn’t see the hyper-link.

Comment by Pimp Watch
2012-12-30 12:40:47

I thought that too.


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Comment by Rental Watch
2012-12-29 10:13:25


I think there were mid-year predictions as well…can you post a link to that?

Comment by Ben Jones
2012-12-29 10:22:17

Mid-Year Predictions

Comment by SV guy
2012-12-30 08:34:51

Thanks Ben.

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Comment by Rental Watch
2012-12-29 10:11:47

1. Judicial states as a whole will begin to get through their distress faster than 2011/2012, in part because older foreclosures will finally get through the system, in part because laws will allow faster foreclosure, and in part because more homes will go the short sale route, some will do this much faster than others, pushing prices down, or flat in those states;
2. AZ will see their price increases flatten out as supply created through development restarting eases price pressures;
3. CA will see their price increases continue (and accelerate to faster than 4% annually on the whole) as non-current loans shrink toward normal levels by the end of 2013;
4. At least 2 companies will be taken public who own rental homes;
5. The Federal government will substantially kick the can on deficit reduction early in 2013…the stock and housing markets will like this;
6. New housing development will be at approximately 1.1MM to 1.2MM annualized by the end of 2013, helping with growth in blue collar and generally lower skilled jobs;
7. Due to #’s 5 (the stock and housing market doing better) and 6, the Feds will continue to kick the can on deficit reduction–pressure will be off slightly with better economy–no big deficit deal in 2013;
8. The unemployment rate will fall faster than tepid job creation would otherwise indicate.
9. By the end of 2013, the Fed (Bernanke and co) will signal earlier than 2015 rate increases (if the then trends in unemployment continue).
10. Reported inflation will remain tame (<3% reported CPI) through 2013.
11. Europe will continue to be disfunctional (The World Cup of Can Kicking).
12. Downward pressure on the Yen will continue throughout 2013, but no Yen crash…yet.

Comment by Leighsong
2012-12-30 19:15:21


Comment by goon squad
2012-12-29 10:22:39

“If 2011 was Occupy then 2012 will be long hot summer…”

We were incorrect on this in that there was not a Los Angeles 1992 type event. However, we recently posted about Chicago hitting 500 homicides for the year. Add on the numerous “get whitey” Justice-For-Trayvon© incidents that the multiculturalist corporate media refuses to report, and it’s more of a slow burn than a massive flareup. Consider also all the crazy white men with guns going postal.

Amerikwa is an inherently violent culture. And it will only get worse, not better :)

Comment by Ben Jones
2012-12-29 10:32:46

From a year ago:

“Comment by jeff saturday
Predictions for 2012:

Anger, lots and lots of anger.

Comment by Sammy Schadenfreude
And precious little reflection, soul-searching, or personal accountability.

Comment by 2banana
‘Anger, lots and lots of anger.’

If even the predicted GROWTH of government free cheese gets cut…

We are…Greece

Comment by Faster Pussycat, Sell Sell
It’s gonna get cut. Count on it!

What can’t get paid won’t get paid.

Comment by Cantankerous Intellectual Bomb Thrower©

Only work or successful gambling activities will pay. Good luck to those who don’t work or gamble successfully.”

There is a lot of frustration. We see it here on this blog. It’s in politics, the media. (Heck, if you think things get heated here check out some of those CNN threads with 100k comments).

Here’s something I mentioned from last year:

‘The thing about predictions is do people compare these thoughts to reality? Like the NAR having to admit they overstated sales for years, and now they can say ‘we’re up from last year!’

‘Never has critical thinking been more necessary and at the same time, never have people been less capable of it. We’ve become so numb to spin, that the plain truth seems odd or is unrecognizable. Everything gets spun these days; unemployment numbers? 50 different interpretations, all with an agenda behind them. House sales; boom or doom, depending on who you ask.’

‘The US is the most powerful economy in history, but if we let some corporation (which most people have never heard of) fail, we’re all going down baby!’

‘It seems like we’re kept in a perpetual false reality, waiting to be told what tomorrow means.’

Comment by goon squad
2012-12-29 15:54:22

When Occupy first started, we were totally on board with:

1) Jail the financial terrorists / economic rapists

2) Slap a transaction tax on the Wall Street pigmen’s trades

But they sadly morphed into every hippie-dippie COEXIST wannabe “social justice” demand, including total 100% bailouts for the loanowner Free Sh*t Army, and then we could no longer support them.

At least the state of Colorado has legalized weed now :)

Comment by AmazingRuss
2012-12-31 10:27:57

Much like the Tea Party, they were taken over by loons.

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Comment by Leighsong
2012-12-30 19:24:19

“Never has critical thinking been more necessary”

Ben, one of my favorite sayings.


“Check, recheck your sources”


Comment by Bill in Los Angeles
2012-12-30 20:25:58

Ayn Rand’s was “Check your premises!”

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Comment by ahansen
2012-12-31 00:44:44

Nice to see you again, Leigh. :-)

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Comment by Bill in Los Angeles
2012-12-29 10:34:28

I predict my Adjusted Gross Income for the 2013 tax year will be less than half of 2012. I’m a radical proponent of giving yourself a tax cut and not having to depend on a political movement to do it for you. Congress can raise taxes for Obamacare if they want, but I will be paying less.

I have been extended on my contract to June but I will leave earlier and take another contract elsewhere. Going month to month on my lodging.

Comment by Happy2bHeard
2012-12-30 12:09:56

Good for you, Bill. Someone else who needs the money more will pick up the slack for you.

Comment by Bill in Los Angeles
2012-12-30 13:59:37

I’m glad they will. Note my income in Florida was higher, my taxes were lower, and my expenses were lower than my current situation in California.

The question is if my shop tries to deal with me and throw me some bucks to keep me in L.A. My hourly rate two years ago in L.A. was higher by $8. They will have to raise it for me to stay. I have enough of the company stock and will close on over 300 more shares by the end of March and be haggling with other job shops who have been regularly tracking me and trying to steal me for 10 years.

Comment by Leighsong
2012-12-30 19:27:05

Happy New Year Bill!!

Sincere congrats,


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Comment by Bill in Los Angeles
2012-12-30 20:24:38

Thank you Leigh! I haven’t seen your posts in awhile!

Happy New Year to you and I hope you and your family had a joyous Christmas or Hanukkah or solstice!

Comment by scdave
2012-12-29 10:58:50

We have got major changes in policy that must be adressed both in spending & revenue…I predict we can’t/won’t “grow” are way out of our debt/revenue problem which are the hopes & prayers of every person in D/C because none want their cherished program or philosophical postion touched…

Bug will meet windshield…Something radical will be done…Framework put in place this year, possibly pass but implementation pushed out a year or two or even beyond the 2016 election to give everyone time to prepare for whats coming…

Comment by Rental Watch
2012-12-29 11:36:27

A very reasonable, bipartisan designed framework (Simpson/Bowles) has been around now for more than 2 years, and virtually nothing has been done on it.

I would like to think that a big deal like this can get done, but I have no confidence in Obama’s ability to negotiate a big deal (no trust from the other side, no experience getting big things done in a bipartisan way).

I think we are going to get a piecemeal solution…we will be lucky if all pieces have been agreed by 2016.

Comment by scdave
2012-12-29 11:47:08

and virtually nothing has been done on it ??

Bug “has not” met windshield yet….

Comment by Rental Watch
2012-12-29 12:10:45

“Bug “has not” met windshield yet….”

And as long as the Fed buys treasuries, Bond Vigilantes will be no where to be seen, and the bug will be happily flying along (with Congress allowing it).

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Comment by oxide
2012-12-29 13:34:09

How is Obama “failing to negotiate?” What he is doing is failng to cave. And the R’s know it.

Comment by Rental Watch
2012-12-29 14:02:32

Where did I say “failing to negotiate”?

I said “I have no confidence in Obama’s ability to negotiate a big deal”.

That stems from his failure to get something done with the debt ceiling debate (part of the reason the can was kicked to now), his “jobs” program, the damage he did to his relationship with the Republicans starting from his first stimulus package in 2009, etc.

All of his big legislation was done before the 2010 election, and in his book, Woodward pretty well documents his negotiation missteps during the debt ceiling negotiations.

Again, I have no confidence in Obama’s ability to negotiate a big deal. We will see, but for right now, it looks like the Senate is trying to put together some can kicking legislation.

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Comment by In Colorado
2012-12-29 14:05:38

It’s kind of hard to negotiate a deal with someone is unwilling to negotiate.

Comment by Rental Watch
2012-12-29 14:22:11

You should read Woodward’s book…you make it sound like the Republican’s won’t budge from their postion. The reality is that the Democrats are being just as stubborn in proposing cuts.

The art of negotiation is getting both sides to move (Democrats to cut/reform, and Republicans to add revenue).

Obama is trying to raise revenues now, and promises entitlement reform later…a terrible way to negotiate a big deal.

Furthermore, Obama and his team like to say that you can’t raise revenues by cutting deductions and lowering rates…however, that is EXACTLY what the Simpson/Bowles commission proposes.

From Obama’s acceptance speech: “Now, I’m still eager to reach an agreement based on the principles of my bipartisan debt commission. No party has a monopoly on wisdom. No democracy works without compromise. I want to get this done, and we can get it done.”

That commission’s recommendations include reforming entitlements, lowering tax rates, cutting deductions.

So, let’s do it.

Comment by Rental Watch
2012-12-29 14:44:50

And the “unwilling to negotiate” tripe fed by the MSM is getting to be an overused talking point:

From WSJ (as recounted from Salon.com)

“Mr. Obama repeatedly lost patience with the speaker as negotiations faltered. In an Oval Office meeting last week, he told Mr. Boehner that if the sides didn’t reach agreement, he would use his inaugural address and his State of the Union speech to tell the country the Republicans were at fault.

At one point, according to notes taken by a participant, Mr. Boehner told the president, “I put $800 billion [in tax revenue] on the table. What do I get for that?”

“You get nothing,” the president said. “I get that for free.””

Comment by Skroodle
2012-12-30 12:48:53

Do they really have reporters sitting in on the fiscal cliff negotiations??

Comment by Bill in Los Angeles
2012-12-29 11:57:55

I think any tax increase will backfire, the backfire will be particularly visible if it is focused on the upper income folks. They have the money to get the best tax accountants to shift assets to lower taxable investments. In essence, the funds these “progressives” assume (har har) they can steal (oops tax) from the upper income types will be far short in reality.

This will be known for sure in 2014 when the revenue from the confiscations of 2013 will be known.

2013 will be a muddle-through year. But 2014 will be a repeat of this fiscal cliff crisis and two years from now the idiots in congress will be realistic and know they they will have to only make major spending cuts, not tax increases. In fact they may even do across the board tax decreases combined with major spending cuts and make government shrink in power to a level several decades ago.

This is going to be an economic force not through citizens voting in an election booth, but through citizens sheltering their assets.

Comment by In Colorado
2012-12-29 12:04:34

Doesn’t that imply an exodus out of the “undesireable” investments, causing realized losses. And what if the AMT gets tweaked and cancels out the new sheltered investments?

Comment by Bill in Los Angeles
2012-12-30 10:49:03

If you live cheap, maintain as short a lease as possible and have very little baggage you can adjust quickly to the new tax laws. There will always be new loopholes open up and your flexibility will make you switch fast to the new loophole. My enemy is big thugernment and I enjoy using their own play book to reduce optimally what they steal from me.

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Comment by Ben Jones
2012-12-29 10:59:06

Country Comparison > Unemployment, youth ages 15-24


Comment by scdave
2012-12-29 11:16:13

Spain @ 38%…Makes you wonder how long that can exist before some serious problems start to happen…

Comment by Ben Jones
2012-12-29 11:37:56

That’s the Spanish government number. Some say it’s 50%. It’s understated in the US too.

I’ve heard in the media that when young people start off a career in a serious recession, it lowers their earnings from then on. I can attest to that having gotten out of college just as the Texas economy collapsed. It’s hard to describe, but IMO it’s true.

So where are the buyers of these baby boomer houses going to come from at these prices?

This is why the current policies from the Fed and government are so baffling. I heard the President mention in a press conference yesterday that housing markets are ‘recovering’. So how do higher house prices help these young people?

Comment by scdave
2012-12-29 11:53:02

I can attest to that having gotten out of college just as the Texas economy collapsed. It’s hard to describe, but IMO it’s true ??

I would agree totally Ben….It effects everything a twenty-something does from marriage to to buying a car…I think it also ingrains a degree of cynicism in that the implied life opportunities were hollow…

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Comment by X-GSfixr
2012-12-29 12:39:04

The economy has been in “recession” (officially) well over half my working life.

“Unofficially”? Probably 3/4. The whole airplane business has been working the “Screw the Troops” plan since airline deregulation.

Comment by goon squad
2012-12-29 15:34:41

it also ingrains a degree of cynicism in that the implied life opportunities were hollow…


Comment by Happy2bHeard
2012-12-30 12:18:35

“The economy has been in “recession” (officially) well over half my working life. “

I think it is trying to get that first job in recessionary times that most impacts future earnings. Instead of having 2 years experience on later graduates, you either bring 2 years of unemployment or underemployment to the table. Both of those make you look more like damaged goods than the later graduates who start with a clean slate.

Comment by In Colorado
2012-12-29 12:16:22

Spain has always been a high unemployment nation. The housing bubble was a temporary break from the situation.

Comment by DennisN
2012-12-29 23:49:56

Spain’s never had much of an economy since they kicked out the Moors and Jews in 1492. They got by in the 16th and 17th by stealing gold and silver from the Americas. The Spanish-American war in 1898 proved they were a 3rd world country.

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Comment by Rental Watch
2012-12-29 11:38:27

Mexico at 10%…because the youth are coming here? Or because there are better job prospects there? From what I’ve been reading, I think it’s the latter.

Comment by In Colorado
2012-12-29 12:07:35

There are lots of jobs in Mexico … they just don’t pay squat. The reason there youth are staying home is because the word is out that there are no jobs in “El Norte” and that the cost of living here is horrid.

Comment by X-GSfixr
2012-12-29 12:32:07

Ahhh, the joys of being a trendsetter, and living in a formerly upscale, Red State “there ain’t no crime here” suburban area, that is rapidly going down the crap tube……..

Someone tried to steal my car in September. Was on TDY out of town, so I had to take it to the shop to fix the tore-up ignition switch…..$500, plus the stuff they stole from the car.

Night before last. Got hit again. Kissed the last of the pitiful remmnants of my CD collection goodbye, plus a Nikon camera I bought in September.

Might as well move to the big city ghetto, and save some money on rent. I’ve run out of stuff to steal.

Or I can go full Galt-bootstrapper, quit my job, and guard my stuff 24/7/365.

Comment by moral hazard
2012-12-29 13:01:43

“I’ve run out of stuff to steal.”

Is this a prediction or a statement?

Comment by X-GSfixr
2012-12-29 15:05:12

“I’ve run out of stuff for people to steal from me.”

Sorry. Fixed.

Comment by Skroodle
2012-12-29 13:59:27

A friend that lives in south Dallas had his house broken into and they even stole his liquor bottles.

Comment by Mot
2012-12-30 22:04:27

Had my house on the market in Indiana. It got burglarized twice. They took the water softener the first time, and copper wiring and pipes the second time. Strangely enough it got an offer one week after the copper was stripped contingent upon the wiring and plumbing getting fixed.

Comment by goirishgohoosiers
2012-12-31 16:10:48

Stealing copper wire out of empty houses has replaced basketball as Indiana’s favorite indoor sport.

Comment by ahansen
2012-12-31 00:54:34

That sux, Gulfie. Kinda twists the knife a bit when some lowlife invades your sanctity– even more than just nabbing your stuff. I’m sorry you have to deal with this.

Comment by Professor Bear
2013-01-01 16:00:37

Where are you?

Comment by Skroodle
2012-12-29 13:08:57

1: Price of oil will go down below $80/brl due to dropping demand of US consumers and European consumers + new sources being brought online.

2: US officially enters recession

3: Gold goes down below $1,500/oz

4: Canadian real estate begins to crater and Canada bails out its banks

5: China experiences another Tianamen Square incident as their economy cools.

Comment by Albuquerquedan
2012-12-29 17:58:28

I disagree with 1 and 3 but agree with the rest. I think that Assad falls and Iraq is destabilized causing higher oil and gold prices.

Comment by robin
2012-12-29 21:15:50

Oil drops and natural gas, solar, and wind production all increase.

Not sure how the fracking debate will go. Or fricking - :)

Some farm subsidies may be dropped as “pork”.

Fewer “bridges to nowhere”.

Comment by Professor Bear
2013-01-01 16:03:59

The price of oil is largely controlled by OPEC, no? Your prediction seems to assume they will lose their ability to control the price by manipulating the supply side to align with demand.

Comment by moral hazard
2012-12-29 13:15:48

As I have said the PTB have allowed prices in some neighborhoods to fall all the way back to 80s or early to mid 90s prices. The story below is one of those neighborhoods.

Prediction: In 2013 the PTB will allow house prices in neighborhoods like these to remain at 80s or early to mid 90s prices.

Posted: 2:35 p.m. Saturday, Dec. 29, 2012

Woman found shot in abandoned building in Jupiter

By Kevin D. Thompson

Palm Beach Post Staff Writer

A woman was found with gunshot wounds in an abandoned building around 3:35 a.m. in the Kennedy Estates apartment complex on Roosevelt Road in Jupiter, about one mile east of I-95 and Indiantown Road, according to Teri Barbera, Palm Beach County Sheriff’s Office spokeswoman.

Barbera said the woman was airlifted to St. Mary’s Medical Center where she remains in critical condition.

There was no more immediate information on the victim or the circumstances surrounding the shooting.

Comment by goon squad
2012-12-29 15:38:25

We love, LOVE, LOVE the South Florida crime stories.

Squad family has been slowly escaping South Florida, mostly to the Tampa / St. Pete area. Only cousin and her husband left in Broward now.

Comment by Bill in Los Angeles
2012-12-29 19:16:04

If I were to go back to Tampa, I would choose New Port Richey area, Treasure Island, Seminole Bay, and the like

Comment by tresho
2012-12-29 13:40:35

I predict surprises are in store for 2013.

Comment by nickpapageorgio
2012-12-29 17:46:20

The nanny statists (global progressives) will continue their assault on our liberties in the same cherry picked manor we’ve grown to know and love.


Certain foods will be labeled as hate foods, then taxed out of existence for all but the elite.

The assault on Tobacco will accelerate while marijuana smoking and drug use are legalized.

Hate speech laws will expand to include any words or phrases deemed offensive to global progressives.

Islamist speech and Sharia law will be protected by our court systems while Judeo-Christian speech, law and practices are routinely ruled against.

New laws will be passed to jail and prosecute makers of any Film or Game deemed to be offensive to the global progressives.

Call for global gun bans will intensify.

Domestic drone surveillance will be expanded…you know, for our own safety.

Consumer choice will continue to dwindle in certain areas as products and services deemed offensive, dangerous or unnecessary to the global progressives will be outlawed or litigated out of existence.

Old people will become a new enemy to global progressives due to health care and retirement costs vs. benefit to society.


The global progressives will push these agendas in our schools as they have been doing for years, thereby making these types of draconian changes gradually acceptable by larger segments of our society.

The statists will eventually get something or someone you love…mark my words.

Comment by Houses Depreciate Rapidly
2012-12-29 19:08:34

I’m sure the our progressive pigs will crawl out of their sty and slobber over your post shortly.

Comment by nickpapageorgio
2012-12-29 19:58:26

Truth is a progressive’s Kryptonite.

Comment by Bill in Los Angeles
2012-12-29 20:40:27

Of course I’m not a so-called “progressive,” but leaping ahead to a couple of years, I think their philosophy of statism is doomed. They had the power since 1913. They were the same group that made the income tax permanent, when it was meant for emergencies. They were the same group that made the Federal Reserve. They were the same group that started the USA as the world cop (DEMOCRAT Wilson’s “Make the world safe for Democracy”). Teddy Roosevelt, Republican, was too a “progressive.” Andrew Napolitano has a book out about those two.

The ills of America are all from that group. Anyone these days who identify themselves as a “progressive,” I think they are full of shinola.

Comment by Bill in Los Angeles
2012-12-29 20:41:46

I meant to make the point clear. The so called “progressives” had a big cycle of big government. Their cycle is at its peak with Obamarx. It’s downhill for them from this point on.

Comment by nickpapageorgio
2012-12-29 21:27:01

Hope so.

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Comment by AmazingRuss
2012-12-31 10:35:30

Not if the conservatives keep flogging the bible, running people like Romney, and kicking people out of the party for lack of ideological purity.

Especially not if they don’t stop deluding themselves that “the pendulum” owes them power.

Your response will likely prove this out.

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Comment by Diogenes (Tampa, Fl)
2012-12-30 16:37:19

I am sorry Bill, but you are thinking too small. Nick is on the right course, but you need to think globally, as that is the “new world order” that is being promoted.
You think the FED is dead. I don’t. Note that ALL the “central banks”, while representatives of “sovereign” nations have been working in collusion throughout the so-called “crisis”.
I’ve touched upon the globalist agendas a few times, but most people here haven’t a clue of how far down the rabbit hole the conspiracy unfolds.

So, I’ll go a bit further than Nick. I think 2013 is a Satanic year. The New Age movement in the United Nations, promoted by Alice Bailey of Lucifer Trust (now Lucis Trust) will be working diligently to promote “communion” in both religion and government and economics. That is what the World-wide council of churches is promoting: Unity. To achieve unity, we must all have global ideals about property rights, individual rights and the role of government.
The globalists will follow the Pope’s admonitions about “fairness” in all things economic. The teachings of the Vatican is that “stealing” is not a sin or crime if people are in need. Additionally, All material goods were intended by God to be universally distributed. People who oppose any “redistribution” will be considered “extremists” and guilty of Hate Crimes.
There is already a Catholic priest working south of the Border (story on DeutchWelle news) bringing up 10’s of thousands of Guatamalan, Mexican, Salvadoran and Hondurans by train to the southern Border of the U.S. He says their “need” makes them rightful to enter here and take what they need.
In the new year, I expect Obama to certify illegal aliens as “new Americans” and the floodgates to open wide.
All those empty houses…. Think Bandos nationwide.
That solves the foreclosure vacancies, and the United Nations will sanctify the Stealing.
South Africa is the model. Remember all the hand-wringing and news stories about the horrors of “apartheid”. The stories of Whites being murdered, their property stolen and them driven off their land didn’t make much news. It still goes on today. Crime is excused as the claim of “need” justifies outrageous criminal activity. I expect the same here. Obama has no religious or moral compass, just a desire to “redistribute”. The same thinking has dominated South Africa for decades. The result has been social, economic, and moral decline. It’s coming here.

Comment by TheNYCdb
2012-12-30 18:35:46

This isn’t really a new concept. U.S. law has long recognized necessity as both a defense as well as an exculpatory factor. You just need to be able to show that your actions were to prevent a greater harm. For example stealing bread to feed the starving (if Jean Val-jean had been in the U.S. he likely wouldn’t have gone to prison).

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Comment by Professor Bear
2013-01-01 16:07:45

‘…the so-called “progressives”…’

Good on you to qualify that, as Nick’s misuse of the term adds confusion to his every post.

Comment by Happy2bHeard
2012-12-30 12:35:55

“The assault on Tobacco will accelerate while marijuana smoking and drug use are legalized.”

This is an interesting trend that I expect to continue as well.

“Domestic drone surveillance will be expanded…you know, for our own safety.”

I expect this trend to continue as well, regardless of whether progressives or conservatives control our government. The drone makers will lobby Congress to expand usage and will market to other lower level government entities to expand their markets.

It will be really interesting when corporations begin to employ nano drones for corporate spying. Drone pilot as the new growth job?

I have also seen for many years that personal privacy is dwindling. This is as much due to technological change as to any political philosophy. Be prepared to live your life in the full light of day.

“Consumer choice will continue to dwindle in certain areas as products and services deemed offensive, dangerous or unnecessary to the global progressives will be outlawed or litigated out of existence.”

Consumer choice in some areas will dwindle due to market forces as profit margins dictate which goods get produced. Which choices do you see being limited by law, aside from guns?

“Old people will become a new enemy to global progressives due to health care and retirement costs vs. benefit to society.”

Are Republicans progressive now?

Comment by Neuromance
2012-12-31 14:24:32

“The assault on Tobacco will accelerate while marijuana smoking and drug use are legalized.”

I heard an interesting joke on the radio: “I sell cigarettes to buy weed.”

Comment by Pete
2012-12-29 21:29:32

My prediction: It has been said for decades that “As California goes, so goes the nation”. Two things have happened here in Ca since last year. We have raised taxes on the wealthy and severely cut govt. spending, the highspeed rail debate notwithstanding. The result is that regardless of the potential consequences of “austerity”, we will see ourselves as getting our fiscal house in order. This drives confidence. Second, the lieutenant governor was dispatched to Texas to find out exactly what it is that makes them so “business friendly”. Lieut Gov. Newsom took alot of heat for that, not sure why. But when I put those two together, I see hope. Might take longer than a year, but it wouldn’t surprise me if the UE rate in Ca ticked down quicker than expected. Any ‘California effect’ on the nation’s
economy would take a couple of years to be visible.

Comment by Bill in Los Angeles
2012-12-29 22:12:29

The taxes were hiked in California. I’m from California. I know the mentality of the politics there. They keep raising taxes because they keep spending. They know no limits.

I posted a link a week ago and Cantankerous reposted it. 225,000 Californians per year over ten years moved out of California. This was before the November election and tax increase. Companies left, taking high paying jobs with them.

“Progressives” point to Silicon Valley big wigs and stars in Hollywood as evidence that rich people are not leaving. Maybe so. But the middle class has been leaving. The ones coming in are third worlders.

The piece about the lieutenant governor having to visit Texas to see what they are doing is priceless! He knows very well Texas has no income taxes and no capital gain taxes.

Comment by DennisN
2012-12-29 23:41:30

The really really rich - like Barbra Streisand in her beach-front villa - are so rich that they don’t care about CA taxes. It’s the upper middle class that probably will seek an exit. I did. I live better not working in Boise than I did working 50 hours weeks in Silicon Valley.

Comment by scdave
2012-12-30 12:24:14

I live better not working in Boise than I did working 50 hours weeks in Silicon Valley ??

Exactly what I am thinking about now…

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Comment by Happy2bHeard
2012-12-30 12:54:08

” I live better not working in Boise than I did working 50 hours weeks in Silicon Valley.”

Would you be able to live better in Boise if you had not first worked those 50 hour weeks in Silicon Valley?

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Comment by Lemming with an innertube
2012-12-30 13:41:30

That’s a really good question. I wonder if it’s easier to appreciate a simplier life ONLY after living a very hectic one chasing the brass ring. I know for me, it is. But, maybe it’s just part of getting older.

Comment by Bill in Los Angeles
2012-12-30 13:52:07

We are forgetting that years ago the taxes in Silly - Cone Valley were lower. Also expenses. So Dennis is far better off now in Boise. The sales taxes in California have increased.

I think it would be a nice move for me to be in Vancouver Washington (umm…I have an Arizona license plate) and working some software there and shopping across the Columbia River in Portland.

I’ll take returning to Florida though, which is more likely. My income was higher in Florida, my taxes far lower (Arizona state income tax) and my expenses were lower.

Comment by DennisN
2012-12-31 13:14:23

People forget there were people whose family was FROM Silicon Valley. I didn’t work there to “chase the brass ring”, but it was where my family was from and just wanted a job. My grandparents life in Santa Clara county was much easier and pleasant - the pace of life was different in the early 20th century.

Comment by Skroodle
2012-12-30 12:51:41

Tax breaks are why Texas is so business friendly.

Comment by Happy2bHeard
2012-12-30 12:52:16

What impact will this California exodus have on politics in flyover country? Will social conservatives become less viable in red states? Presumably, the emigrants will retain their aversion to taxation and support fiscal conservatives. Some of them will be economic refugees who will retain a liberal bent on all fronts.

Comment by Bill in Los Angeles
2012-12-30 13:54:19

I read some reports that the people over the years fleeing blue states have been voting for more and more socialism in the red states they flee to. New Hampshire folks are up in arms about creeping socialism. Nevada is going that route and I think will eventually have a state income tax - thanks to more Californians “fleeing” California but bringing their wish for the nanny state with them.

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Comment by SaladSD
2012-12-30 22:21:47

The folks fleeing California are carpet baggers, so good riddance. Texas attracts big business because they subsidize big business. It’s a handout of epic proportions for corporations that pit one state against another, not a tax “break.”

Comment by Ben Jones
2012-12-30 23:24:08

‘Texas attracts big business because they subsidize big business’

All I know directly is from when I was an accountant for a company that had offices in Texas, Georgia and California. We “had” to pay these people in California a heck of a lot more than anyone else in the company (even the owners, BTW) because “housing was so expensive.” Plus the related taxes, which people other than accountants may not notice as much. Keep in mind this was web related stuff. There was nothing special about the bay area when it came to this work; it could have been done anywhere. The owners were simply foolish enough to think we weren’t a competitor unless we had a California address on the letterhead. They went bankrupt after a while.

Comment by AmazingRuss
2012-12-31 12:42:03

I have been approached about gigs in California recently, and I always add 30% to my rate for them. So far no takers… apparently they can find people to work in the bay area for 60k.

Comment by ahansen
2012-12-30 01:01:09

I predict a significant rise in municipal and pension defaults with subsequent fallout to domestic bondholders. Ironically, these bondholders will be the very pensioners and municipal unions holding the funds, so expect a lot of strikes and walkouts and sit ins. These will be noisy but mostly ineffectual, because Federal reserve funds will not adequately cover the shortfall and the US credit rating will drop again as a result.

As austerity kicks in for real and entitlement spending is reduced across the board, the public taste for military endeavors will wane as the State Department becomes ascendent. We may have to do some fancy horse trading (in the form of permanent residence visas and loosening of trade restrictions) to assuage some foreign creditors, but at the same time, a new biotechnology (most likely genetic modification of some cancerous disease) will develop commercially in the US that will suck some of those foreign funds back into US for development and possibly even first phase treatment protocols.

Major corporations, sensing blood in the pension waters, will follow governmental lead by declaring bankruptcy in order to discharge pension obligations, then reform and be bought up under the aegis of foreign conglomerates with US Boards of Directors using foreign labor. Small-time private investment in the stock market will come to a virtual standstill. The possibility of Citizens United going on the national chopping block will hit the media as states begin to line up to repeal it in advance of the next Presidential election. Gay rights will become federal law.

I also expect to see a significant (and organized) rise in college loan defaults which will be addressed politically with some sort of bailout (most likely in-kind public service.) And Wall Street will have a very bad year. Dow at 8500 again would not surprise me.

The White House will announce funding for a major university-based program to train public health service workers, physicians assistants, technologists, nurses aids, home health and outreach workers, to support our over-stretched medical care system and bring care into underserved areas of the country. And there will be a resurgence of funding for space (and upper stratospheric) exploration to compensate for the defunding of several redundant military hardware products. There might even be a resurgence of federal funding for the highly cost-effective Mars programs at JPL and Lawrence Livermore.

Potential Big bummer 1: -Solar flare hits when the magnetosphere is misaligned to attenuate it. (See communications satellite clusterfrack for two years as systems struggle to relaunch.)
Potential Big Bummer 2: A 7.4+ temblor hits Stockton or Sacramento which cracks levies and allows brackish sea water to go pouring down into Los Angeles water supply. Oops. California insurance companies will not be anywhere near able to cover claims (at market valuation), and their reinsurers will hem and haw before admitting that they’re in no position to do so either. A mad scramble will reveal that the vast portions of the losses are owned by AIG/China Bank– and we want our money back. Could be amusing.

Cheers all, and happy 2013!

Comment by Happy2bHeard
2012-12-30 15:52:57

I agree with the pension and college loan predictions, although they might not fully play out in 2013. Pensions will be bankrupted away both in government and corporate realms. That will continue for the next 5 years at least. College loan defaults will increase, but action may not be taken for a few years.

A major push in public health would be wonderful. Those of us who cannot afford major medical expenses and need mostly preventive or chronic disease care can be well served by well trained nurses and PAs. I would like to see physical therapists included in that push.

I would also support funding for space exploration. I am not sure that our current Congress would support it.

Comment by Professor Bear
2012-12-30 15:14:30

Bye-bye Mayan doomsday. Hello ‘Fiscal Cliff.’

Comment by Carl Morris
2012-12-30 16:37:59

There’s always something to be scared of.

Comment by Professor Bear
2013-01-01 11:00:33

Looks like we dodged the ‘fiscal cliff’ dive…for now.

Comment by Professor Bear
2013-01-01 16:45:33

Spoke too soon.

I’m pretty much missing the purported connection of the cliff deal to the stock market, though. Isn’t it plainly obvious that the market has been propped up in the face of the ‘fiscal cliff’ negotiations?

Comment by Professor Bear
2013-01-01 16:53:28

House Republicans balk at “fiscal cliff” deal
By Rachelle Younglai and Thomas Ferraro
WASHINGTON | Tue Jan 1, 2013 6:23pm EST

(Reuters) - Last-minute efforts to step back from the “fiscal cliff” ran into trouble on Tuesday as Republicans in the House of Representatives balked at a deal that would prevent Washington from pushing the world’s biggest economy into a recession.

House Republicans complained that a bill passed by the Senate in a late-night show of unity to prevent a budget crisis contained tax hikes for the wealthiest Americans but no spending cuts. Some conservatives sought to change the bill to add cuts.

That would set up a high-stakes showdown between the two chambers and risk a stinging rebuke from financial markets that are due to open in Asia in a few hours.

The Senate would refuse to accept any changes to the bill, a Senate aide said, and it appeared increasingly possible that Congress could push the country over the fiscal cliff after all, despite months of effort.

Strictly speaking, the United States went over the cliff in the first minutes of the New Year because Congress failed to produce legislation to halt $600 billion of tax hikes and spending cuts that start kicking in on January 1.

But with financial markets and federal government offices closed for the New Year’s Day holiday, lawmakers had a little more time to work out a compromise without real-world consequences.

The Senate bill drew overwhelming support from Republicans and Democrats alike when it passed by a vote of 89 to 8.

But Republicans who control the House expressed wide dismay with the measure, which includes only $12 billion in spending cuts along with $620 billion in tax increases on top earners.

Majority Leader Eric Cantor, the No. 2 Republican in the House, told reporters after huddling with other Republicans that he does not support the Senate’s bill.

“The lack of spending cuts in the Senate bill was a universal concern amongst members in today’s meeting. Conversations with members will continue throughout the afternoon on the path forward,” said Cantor spokesman Rory Cooper.

Republicans returned for a second meeting at 5:15 p.m. EST (2215 GMT).

Republicans could face a backlash if they scuttle the deal. Income tax rates rose back to 1990s levels for all Americans at midnight, and across-the-board spending cuts on defense and domestic programs would begin to kick in on Wednesday.

Economists say the combination of tax cuts and spending cuts could cause the economy to shrink, and public opinion polls show Republicans would shoulder the blame.


Lingering uncertainty over U.S. fiscal policy has unnerved investors and depressed business activity for months.

Financial markets have staved off a steep plunge on the assumption that Washington would ultimately avoid pushing the country off the fiscal cliff into a recession.

Several Republicans said the fight could spill over until Wednesday, at which point they could be pressured by financial markets to accept the Senate bill.

“Everyone knows once the markets open tomorrow our courage drops in direct proportion to the market fall,” said one Republican lawmaker who spoke on condition of anonymity.

The bill passed by the Democratic-led Senate at around 2 a.m. would raise income taxes on families earning more than $450,000 per year and limit the amount of deductions they can take to lower their tax bill.

Low temporary rates that have been in place for less-affluent taxpayers for the past decade would be made permanent, along with a range of targeted tax breaks put in place to fight the 2009 economic downturn.

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Comment by Cantankerous Intellectual Bomb Thrower©
2012-12-31 10:41:32

Here is a 2013 prediction for you:

Special U.S. government giveaways and unfunded financial protections for the homeowner class, which are generally unavailable to relatively poorer renters, will be extended and augmented without bounds.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-12-31 10:44:21

It must be sweet to qualify for $100K+ in tax-free income, just for having blown all your home equity wealth gains on fancy vacations and toys, putting you far underwater on your mortgage.

Fiscal cliff will hurt home prices, housing recovery: BofA Merrill Lynch

December 31, 2012, 12:03 PM

Going over the fiscal cliff has nasty “under the radar” tax consequences, including one that would slam underwater homeowners, according to a Monday research note from analysts with Bank of America Merrill Lynch.

Specifically, a tax break for struggling homeowners who faced foreclosure or received a loan modification expires in the new year, and the recovering housing market could get hit, according to the research note.

“This relief has helped to boost short sales—a smoother way to sell a distressed property, helping the recovery in home prices. If this is not extended, a greater share of delinquent borrowers will likely be resolved through foreclosure instead of short sale, which would depress average home prices,” BofA analysts wrote in a research note. “Going over the cliff has many secondary, largely ignored, negative impacts, including tax changes that could damage the housing recovery, as well as negatively impact education and alternative energy, among many others.”

U.S. lawmakers continued their already protracted fiscal-cliff negotiations Monday, and analysts say there could be some short-term patches for current laws and programs. However, there’s also a good chance that U.S. lawmakers will miss their deadline.

“Once the cliff deadline has passed, something has to convince politicians that what they are doing is not worth the price…The catalyst for action will likely need to be market weakness and severe public criticism,” according to BofA analysts.

The Mortgage Forgiveness Debt Relief Act of 2007, signed by President Bush, has enabled struggling homeowners to avoid taxes on mortgage-debt forgiveness. Without the break, forgiven debt can be treated as taxable income.
Bank of America Merrill Lynch analysts provided this example: An underwater homeowner in the 25% tax bracket could pay $12,500 in taxes for a short sale in which his house is sold for $150,000, but he previously owed $200,000. With the tax break, the homeowner would not have to pay taxes on the $50,000 of forgiven debt.

Comment by jane
2012-12-31 12:00:12

I know it’s a little early. Happy New Year, all!

On a housing-related matter: my older son the Marine went to visit friends in the LA area in August. He emailed his resume to a couple of staffing agencies, and within two weeks was hired as the logistics coordinator in a small company in Long Beach. He is the only logistics (warehousing; parts; supply) person there. The pay is not great, but he was tickled to have found something on his own. The added advantage is that he is the FIRST logistics person in this 30 year old firm, and will be able to set things up right. A good resume stripe.

He makes enough that he was able to rent a 1 BR garden apartment in Long Beach that is within a couple of blocks of the water, less than a mile from his work. COMPARATIVE RENTS FOR SAME SQUARE FOOTAGE are $350/mo less in Long Beach than in similar type of apartment in NOVA. OXY IS RIGHT ABOUT THE RENTS IN THIS AREA.

He says things are tight, but he’s managing. He’s already b*tching about the taxes there. The important thing is, he’s pleased as punch, he feels appreciated on the job, and he’s making it on his own. Having been a Marine did wonders for him in the application and interview process, he said. In comparison to when he was job searching as a recent graduate last time, before he enlisted. Long Beach, he says, is a bustling place, one of the largest ports in the country. Lots of homeless people, though - you don’t want to leave anything in sight or it will be snatched.

He made do for the first four months he was there with a borrowed bicycle as transportation to get to work, get the grocery shopping done, get to the gym, etc. I am so pleased with is resourcefulness!

He came “home” for Christmas to pick up his truck and consolidate the must-have belongings he had scattered between his father’s house, his sister’s house and my apartment. Took my younger son back with him in the cross country drive as navigator, they got back fine despite the residue from the post-Christmas snow storm. Their first big-boy road trip!

In any case, all - Happy New Year!

Comment by ahansen
2013-01-01 02:49:46

Congratulations to you and your son on his successful launch; you’ve a lot to be proud of this last year. Sometimes a little intergenerational competition works wonders. ;-) A very happy new year to you both!

Comment by Downturn
2012-12-31 13:49:40

The US will run out of land.

Comment by rms
2013-01-02 02:51:34

“The US will run out of land.”

The moral foundation is eroding. We’ll run out of honest hard-working people before we run out of land.

Comment by goon squad
2012-12-31 19:13:04

One last prediction:

Corporate media and academia will continue to Hate Whitey.

Whitey backlash as demonstrated by massive gunz and ammo sales will continue.

Coastal elitists, keep hating on whitey. And whitey will keep buying lots and lots and lots of gunz. Whitey is not buying your LIES, whitey is buying gunz. And lots and lots and lots of gunz :)

When TEOTWAWKI happens, don’t count on flyover feeding you. We will be looting your 2nd homes in Aspen and Telluride, eating your pets and your children…

Comment by jane
2012-12-31 20:27:16

geez. gooonie - that’s awfully dark. Can you send me a get out of jail free flag, medallion, or whatever? I’se just a hardworking duckie. Tx.

Comment by Happy2bHeard
2012-12-31 21:07:59

I wonder how long it will be before we are involved in a land war in Mali? Or will it be a drone war?


MOPTI, Mali (AP) — Deep inside caves, in remote desert bases, in the escarpments and cliff faces of northern Mali, Islamic fighters are burrowing into the earth, erecting a formidable set of defenses to protect what has essentially become al-Qaida’s new country.

Comment by SUGuy
2012-12-31 21:23:50

2012 turned out to be the most lucrative year for us. We will be celebrating 29 years in business in April of 2013. My prediction is that more experienced, highly educated professionals will be starting their own businesses. One can sign a one page application and get a 100K loan for business with low credit scores. This trend is already happening and will continue to gain momentum. “Own your own business” is the next mini bubble as confidence in the job market and corporate America is dwindling.

Good luck and Happy New Year.

2012-12-31 21:47:31

Here were my predictions from last year:

[1] Very bad year in the EU zone. Possible breakup of the currency or massive monetization. (Either way short the euro.)

Jawboning worked. Minor monetization Grade: C

[2] Bad year in China. Desperate efforts to have an unsustainable thing going but basically fail. Commodities crash.

Somewhat right. Wrong on commodities. Grade: C-

[3] Very bad year in India. Basically fail at every level.

Basically correct. Grade: B-

[4] Moderately bad year in Russia.

Yep. Grade: B-

[5] Moderately bad year in Brazil. Everything looks OK but the first derivative still portends doom for 2013.

Correct. Grade: A-

[6] Epically bad year in Australia. Total crash.

Complete wipeout. They did manage to postpone everything. Consequence of commodities. Grade: F

[7] Bad year in Canada (you get to hear “we’re different” more than a few times) and then you get a very bad 2013.

Very good. Grade: A-

[8] Oddly enough, the US kinda muddles through it fine. (Logic is based on the ol’ “if you’re gonna devalue, devalue first.”)

Good. Grade: A

I’ve left out Japan which is ironic since I speak the language but I don’t have a good read for it.

Accurate enough. They’re jawboning the Yen lower.

Overall. Grade: B-/C+

Not very good. Let’s hope 2013 is better.

Comment by moral hazard
2013-01-01 09:32:12

The $9 billion Constellation program will be reinstated in time to send Michelle, Malia and Sasha to the moon for Sring Break.

By Tariq Malik
Managing editor

updated 2/2/2010 10:12:51 PM ET 2010-02-03T03:12:51

NASA and President Barack Obama’s administration expect to spend months working out the specifics for their new plan for U.S. space exploration, even as some within the space agency mourn the loss of its current effort to send astronauts back to the moon.

President Obama’s 2011 budget request for NASA cut the agency’s Constellation program completely, effectively canceling a five-year, $9 billion effort to build new Orion spacecraft and Ares rockets.

The new space vehicles were slated to replace NASA’s three aging space shuttles (due to retire this year) and launch astronauts into orbit and on to the moon.

Comment by Housing Analyst
2013-01-01 09:54:23

2013- The long delayed and overdue correction in housing prices to dramatically lower levels in the northeast will resume full force.

In fact it’s already happening. Look out below.

Comment by Professor Bear
2013-01-01 16:11:13

Why do you think 2013 will be the year that myriad government interventions to support housing prices will suddenly fail?

Comment by Resistor
2013-01-01 20:47:29

I’m curious to hear this answer.

Comment by Resistor
2013-01-01 20:44:31


- I *might* buy a house. Depends.
- I will spend WAYYY too much precious free-time playing Angry Birds Star Wars (especially the levels with multiple gravity fields).
- My son will start K
- Another 20% drop in house prices
- Long-timers of the HBB will continue to be frustrated at the stickiness of this whole fustercluck. (Homes we looked at in 2008 are just now showing up as homepath foreclosures. Slooooooooooooooooooowwwwww-motion.)
- I will realize that I actually, truly have a good job (that I love) and subsequently accept Florida as my fate.

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