Bits Bucket for December 31, 2012
Post off-topic ideas, links, and Craigslist finds here. And check out Chomp, Chomp, Chomp by a regular poster!
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
December 2024 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
Report from the Tules:
So I had a long convo with an area realtor yesterday who tells me that here in the southern central valley of California, (Bakersfield, Tehachapi) small consortiums of real estate agencies and local banks ($1M-$10M funds), had been busily buying up 3/2 short sales and foreclosures at 50% off “market” value, and “selling them almost immediately” in the 100K-130K range — often with bidding wars. Buyers, she said, were almost exclusively first-time homeowners.
But in September “all of a sudden” these same homes started selling in the 60K-90K range, a 30% drop in just the last quarter. She attributes this to a “too-sudden release of shadow inventory into the market”, but says that the rental market is stronger than ever and that they have a waiting list for their properties (SFH). She agrees that the market is in for a huge drop in 2013, “at least another 30% and probably more”.
Furthermore, she’s seeing a “big increase” in the number of “Asset Agencies” who, for a percentage of the sales commission (typically 1% of the sale), clean up a property and manage the upkeep and maintenance until it’s rented or sold. She told me that she and her husband (who is a property manager) are getting $1300 a month rent on their several $400/month flipper mortgages, (her husband did the renovations), but have no intention of buying anymore rental properties until prices drop again.
She also mentioned that they have zero problem with late-paying tenants because before they move in her husband tells them “the last thing you want on your doorstep every morning is an angry three-hundred pound man (him) asking ‘where’s the rent?’. If you can’t make the rent, call me, and I’ll bring my truck and help you move out before it comes to that.” ( I’ve seen him; he’s right.)
So my question is, does anyone remember something dramatic happening at the beginning of September to make people stop buying low-end “starter” houses, or is this just a local phenomenon?
Follow the money, or, where were the $100K to $130K buyers getting their financing. If the description of the market is accurate, there was probably some change in the loan requirements for the final use buyers. Also look for whether CA ran out of money on some sort of down payment assistance program.
“does anyone remember something dramatic happening at the beginning of September to make people stop buying”
Rmoney nominated a couple days earlier, then the famous “47% video” released in mid September? Also the hurricane trying to attend the R party convention (no not codeword for Ron Paul I mean literally a hurricane), resulting in endless jokes about diety apparently not being very happy about what they’re trying to do in his name?
Also if I go to google and type in “layoffs 2012 september” I get “About 7,400,000 results (0.62 seconds)” which is 5% to 10% more than july or august. Regardless if the actual numbers were higher or lower, there was obviously more talk on the internet about it. Anxiety or whatever.
I googled for “house prices 2012″ and got endless reports about 3rd month of declining prices, of course not reported until after the fact. What was being heavily reported in September was prices had fallen to the same level as roughly one decade ago. You know Americans, buy high sell low, so its not a good time to buy when prices are low.
As we discussed, housing prices resumed falling in October.
Now is NOT the time to buy housing.
“…“selling them almost immediately” in the 100K-130K range — often with bidding wars. Buyers, she said, were almost exclusively first-time homeowners.
But in September “all of a sudden” these same homes started selling in the 60K-90K range, a 30% drop in just the last quarter. She attributes this to a “too-sudden release of shadow inventory into the market”, but says that the rental market is stronger than ever and that they have a waiting list for their properties (SFH). She agrees that the market is in for a huge drop in 2013, “at least another 30% and probably more”. …”
And I, in turn, attribute the phenomenon of first-time buyers getting suckered into overpaying by more than 30% to the ready availability of low-down payment, federally-guaranteed FHA loans to first-time buyers who would never consider paying this much for a home if they had to come up with a down payment in the 10%-20% range.
“So I had a long convo with an area realtor yesterday who tells me that here in the southern central valley of California…”
Gotta wonder what’s happening in big Agriculture. A few years ago the irrigation water had been reduced by 30% because of the Delta Smelt, IIRC. Just about every business is somehow linked to Ag in the Central Valley, so it can’t be good for household income.
The water hasn’t been reduced, the FREE water has been reduced and the small farmers are bearing the brunt. Big AG is still drinking the milkshake. Basically, one Central CA family/cabal has owned the rights for the last hundred years, but they’ve sold and leased it into so many orders of magnitude that the it’s become it’s own Prop 13.
Meanwhile, Northern CA is laffing.
In 2007, federal judge Oliver Wanger imposed limits on the amount of water pumped from the San Joachin-Sacramento River delta to farms in California’s Central Valley in order to protect a two-inch endangered fish called the Delta Smelt. As a result, several hundred thousand acres of farmland on the west side of the Central Valley now lie fallow, and many thousands of jobs have been lost. In the city of Mendota, for example, the unemployment rate exceeds 40%.
Today, the US House of Representatives debated H.R. 1837, a bill that would turn the pumps back on. House Speaker John Boehner said on the House floor today that using the Endangered Species Act to protect a fish at the expense of food production and economic growth is “a perfect example of the overreach of government.”
If the bill passes, Obama says he’ll veto it.
Hint:
It’s not about the smelt.
Then what is it about?
That’s a real question; I really don’t know.
Well if we zoom-out a bit I see two large issues: 1. The folks who couldn’t get the peripheral canal built now have a desire to build two large diameter 37-mile long siphons beneath the San Joaquin Delta; 2. Old farm-water rights holders are currently allowed to sell those rights to high-paying municipal entities during drought years.
Both of these issues involve lots of money.
Same thing the West has always fought over, water rights.
“Delta’s path has tunnel right ahead”
Here’s a nice concept graphic (2354 × 2838)
“Gov. Jerry Brown is expected this week to announce a plan to siphon water beneath the Delta with a pair of large tunnels, although the science supporting the $13 billion project is uncertain and final decisions about how much water can be taken may not be made until after construction is complete.
Meanwhile, San Joaquin County supervisors will consider formally opposing this modern-day incarnation of the peripheral canal on Tuesday. Their draft resolution calls the plan “destructive to the economy, habitat, water rights, water quality, land-use governance and way of life” of the county.”
http://www.recordnet.com/apps/pbcs.dll/article?AID=/20120723/A_NEWS/207230318
Republican senators withdrew a demand over a new way of calculating inflation that would have cut social security and other social programmes, but the concession failed to bridge the gap between the two sides.
http://www.guardian.co.uk/world/2012/dec/30/fiscal-cliff-deal-peril-senate
Nice to see them subscribing to the quote attributed to Winston Churchill
“The only statistics you can trust are those you falsified yourself.”
although it’s more likely the quote came from another source
“Traue keiner Statistik, die du nicht selber gefälscht hast.”
The latest news we have here is that the Senate, with help from Biden, are still haggling over estate taxes and the 250-400 threshold and the fate of the sequesters. Even if this gets through the Senate, then it has to go through the Boehner and the House, who reserve the right to add amendments.
Ha, you know what would be cool? A Mr. Smith-style filibuster in the Senate. It’s pretty clear that this will literally go to the 11th hour. All it would take is one super-liberal with nothing to lose (Bernie Sanders… where are you?) to read a romance novel out loud on the Floor. He’d run out the clock even before the initial bodice-ripping. If nothing else, that would teach Congress a lesson about taking it to the wire.
Actually holding the floor with a speech is no longer required for Senate filibusters. All they have to do is say they are doing one. That, all by itself, is all that is needed to require 60 members to vote to break the filibuster.
That strikes me as some sort of gentleman’s agreement, though. If the gloves ever actually come off, I would think that it would still be necessary to hold the floor.
Not a gentleman’s agreement. The rules of the Senate. They can change them, but they would have to pass the change of rules themselves. Not sure if changes of rules are subject to filibuster, but even if they aren’t the majority doesn’t do it because they know they will be in the minority again eventually.
Polly, I know. Usually D’s want a bill to come a vote. But in this case, there may be a few cliff-loving D’s who want to BLOCK this bill because it has too many concessions (for them).
Using the cloture rules, it takes 40 Senators to block a bill.
By holding the Floor, it only takes ONE Senator to block a bill.
Holding the Floor is only a temporary block, because the Senator holding the Floor gives out after a few hours. However, if the bill doesn’t reach the Floor until, say, 8 pm or so tonight, the bill will give out before the Senator does. Run out the clock.
(of course, it’s a very ballsy/eggy stunt. Any Senator who tries it will likely be excommunicated from politics forever.)
“…new way of calculating inflation…”
The ‘new’ part is inaccurate. The chain-weighted indexes were rolled out in the early-1990s, as the geometric average of the Laspeyres price index and the Paasche price index. Since the Laspayeres price index uses the quantities in the base year to measure price changes, it tends to overstate inflation, by not reflecting that consumers tend to shift expenditures away from things which are going up in price (e.g. gas, food, medical care, college tuition) and towards things which are decreasing in price (e.g. computers, houses). By contrast, using the quantities in the later period for which the price change is measured to compute the Paasche index tends to understate inflation, by putting more weight on goods whose falling prices attract an increasing share of consumption over time.
And they were invented by Irving Fisher, the Yale economist who famously said “It appears the stock market has reached a permanently high plateau” during the early stages of the Great Depression. I believe he is no longer around.
…or you just use this:
http://www.halfhill.com/inflation.html
“Who wants to buy all of those overpriced buildings in an overtaxed city in an overtaxed state?”
This quote brought to you by the edububble blog, more or less on topic here. The quote is WRT a very specific individual situation on a blog hyperfocused on the education bubble (that was caused by the credit bubble, same root cause as our housing bubble discussed here). The quote applies across the whole country, not just one little situation in NY. The quote is amazingly information dense, short, precise, accurate, better than my own comments about it. I like this quote.
my first post from.33000 feet … everyone i saw over the holidays justbought oris.buying unreal…. typing onkindle sucks
“my first post from.33000 feet… typing onkindle sucks”
http://pixelbark.com/559
happy new year, btw!
Over the cliff we go! WHEEEEEEEEEE!!!
Merry Cliffsmas!
And a Happy New Shear to all…
“And a Happy New Shear to all…”
+1 Hehe, is that a realtor with the clippers?
Crisis averted! I was starting to get worried that all the additional tax I am going to have to pay in 2013 was going to paydown debt!
Well thankfully it will just be spent in the most prudent manner possible! I mean the gubmint knows how to use my earnings smarter than I do!
Of course they do Bobby. I suggest sending them an extra few thousand bucks with your taxes this year, we all know they’ll spend it wisely.
Wait! I want to send in more money too. But I’ll going to send in as much as Obama and Warren Buffett send in. They keep saying that even they should be paying more taxes. But funny they don’t lead by example. Guess not the thing for limousine liberals*
*recently rebranded as “progressives”
Heck the community organizer who wants to force government run health care on everyone in the country won’t even trust government to teach reading and writing to his kids. They go to private school. Guess at DC public schools his daughters might rub shoulders with poor black children. Eeeewwwww!!!!!!
Would you honestly send your kids to public school in DC? (I wouldn’t…)
Anon, it’s a security issue.
Maybe if they posted armed guards at the entryway to every DC school…
And what’s with the President riding in a limo? Why doesn’t he take the bus?
Why doesn’t he take the bus?
Yeah, no sh*t. What an elitist! There was an opinion piece in the Washington Times (linked from Drudge Report) about this. Typical limosuine-liberal, caviar-commie hypocrite!
My problem is not the president sending his children to private schools but doing so while he opposes a voucher program to allow the poor and middle class to also send their children to private schools. Even Sweden uses a voucher program:
http://www.clarkhoward.com/news/clark-howard/education/scandinavias-vouchers-for-education-elder-care/nDB9/
Part of article which will post later:
Clark recently created a stir when he spoke about the Finnish educational system. Finland has the world’s highest achieving students. Teachers are treated as entrepreneurs in the classroom and can teach whatever they want. There’s little emphasis on standardized testing, and there’s no state-controlled curriculum.
In fact, they’re a great example of free enterprise in the education field. What makes it odd, however, is that Finland has a long socialist background!
The equally socialist Sweden is also letting the free market work in their schools. They’ve adopted vouchers. Sweden’s voucher system allows parents to opt out of the public schools and send their kids to private school regardless of family income.
…and yet you don’t see the connection.
You mean how Sweden has been moving for decades away from socialism towards the free market and doing better because of it?
The core idea of mandated coverage in Obamacare and Romneycare came from the free market champions at the Heritage Foundation. What did your health insurance company say when you told them to cut your premium for the same coverage? Here in Texas they tell you contact you state representative since they set the rates. Republicans have controlled the government here for the last 20 years and not once have they lowered rates.
Providing the security necessary to safeguard the President’s daughters (and by extension everyone else at a public school)would be intrusive to the max and unfair to everyone involved. But then you knew that.
Never overestimate a Republican propagandist’s IQ.
I’ve been to the Sidwell upper school a few times. It is on a major road, but the buildings are set well back from the street. And there is an area for pick up/drop off of kids in a car that isn’t observable from the street. No way would you have that with a public school in the areas closer to the White House. They just don’t have that sort of set up.
Comment by oxide
2012-12-31 09:45:22
Anon, it’s a security issue.
Nonsense. The Secret Service can’t protect the president’s kids in a building that is publicly owned but can do so in a private building???? The community organizer does not want his kids rubbing shoulders with poor black kids. Naturally every parent wants their kids to have a good / best education. Since he is president no matter what public DC school Obama sent his kids to they would get an excellent education because of the scrutiny. MORE important the classmates of the president’s kids would also get an excellent education that they probably would not get otherwise. But sending his kids to public school would take leadership. An alien concept to community organizer.
Polly the president and the first family go globe trotting like there is no tomorrow. Surprised to see you defending the “security” nonsense.
There is a LOT of security when they go globe trotting at substantial expense to the American taxpayer and the country that they visit. Remember the agents who were caught in South America doing pre-scouting (and other less savory activities) before an extremely short visit? In addition, a child’s school schedule can’t be kept secret in any way. The other children, their parents, all the people the kids and parents talk to, etc. would all know quite a bit about their movements on the campus of the school.
First families sending their kids to a place where the physical plant means their security doesn’t cost the people of DC and the US as much is polite. I haven’t seen that many of the DC public and middle schools, but the schools I have seen have all their entrances right on the public sidewalk with possibly 100’s of people looking over the area from windows. I can’t imagine what the secret service would have to do transfer the kids safely from the school to a car every day at predictable times.
the first family go globe trotting like there is no tomorrow.
There’s that continuing right-wing meme: the President has gotten the keys to the car and the wine cellar, and you know how ‘those people’ will react to such things. Living it up on our dime, when previous presidents were happy just to spend a week at the econolodge in Myrtle Beach.
Anon,
Stop and think for a moment. What do you suppose would be the national security implications of a kidnapping? A rogue teacher with a bomb belt? A plant amongst the cafeteria ladies with a vial of hemorrhagic fever virus? A bread-delivery van full of explosives? How do you suppose a public school with a constantly-changing student, teacher, and vendor population would be affected by the daily threat of any of this?
Have you ever attended a Presidential meet-and-greet? The public has to arrive hours before the event and each individual must go through several checks and screenings. Then stay put. For hours. Anyone who is expected to get close to the President or his family must have a thorough background check and security clearance, anyone who does not is detained. Can you imagine any parent submitting themselves and their relatives to this sort of scrutiny on a regular basis? How about the threat to their children by having them attend a school with an international target?
Then there’s the cost of implementing all this on a daily basis as opposed to sending the girls to an exclusive private school that specializes in uber-security for the children of high-profile parents. Children who are all used to the scrutinized lifestyle and trained in security counter-measures?
It’s for this same reason that celebrities are hustled through VIP entrances at airports, hotels, and other public places. It’s not to pay them homage, it’s to ensure their safety and that of the people around them. Maybe try thinking beyond your resentments for a change?
I don’t know about specializing in uber-security - you can download a campus map right from their website. I would think that uber-security might require that they get deleted by google maps and google earth, never mind providing the details themselves.
The biggest thing is that they have a campus that is not surrounded by lots of tall buildings with tons of windows across the street from the school buildings. In addition, they do have the experience that ahansen mentions and there is enough space that the perimeter can be watched without the kids being too disrupted.
Polly: I can’t imagine what the secret service would have to do transfer the kids safely from the school to a car every day at predictable times.
Your imagination is limited. Schools have more than one entrance. Security details (Secret service and other routinely and quickly (2 - 5 minutes) close streets (halt traffic) when VIPs make entrances and exits. Many public schools like the one in Newtown keep their doors locked. Many public schools especially high schools have metal detectors al la the airport. Etc…. Your imagination is limited.
The community organizer does not want his kids being taught by union government teachers and attending class with children from the wrong kind of community.
Kids who come to school with their own drivers/bodyguards are uber-securitized.
And you think it is a good idea for several blocks of downtown DC to have be shut off for half an hour twice a day? Do you have any idea what that would do to the traffic that is already close to disasterous? Oh, and the secret service having to clear all the windows that have a line of sight to at least one (possibly more than one) entrance to the school? And for the kids not to be able to step outside at any time during the day without the traffic being shut off and surrounding buildings cleared again?
At Sidwell, the car goes into the underground parking garage and the kids go up the staircase that can’t been seen from the street. Done. No requirement to incovience thousands of people who live and work in DC for hours every single week. Don’t be obtuse on purpose.
Oh, and your claim that people who believe taxes should go up on the rich should have their opinions ignored until they voluntarily donate funds to the government when there is no requirement that they do so? It sounds pretty hollow when you haven’t yet promised to nver collect Social Security despite saying it should be elminated.
There’s that continuing right-wing meme: the President has gotten the keys to the car and the wine cellar, and you know how ‘those people’ will react to such things. Living it up on our dime, when previous presidents were happy just to spend a week at the econolodge in Myrtle Beach.
Yup. Haterz don’t wanna see the black man living it up on whitey’s dime
“Oh, and your claim that people who believe taxes should go up on the rich should have their opinions ignored until they voluntarily donate funds to the government when there is no requirement that they do so? It sounds pretty hollow when you haven’t yet promised to nver collect Social Security despite saying it should be elminated.”
I’d be happy to promise never to collect SS if I could stop paying into the system. However, your argument doesn’t hold water; the elites saying “we should pay more taxes” while at the same time retaining an army of tax accountants to make sure they pay the least possible amount in taxes is clearly not consistent. If these people were willing to lead by example I’d be much more interested in their ideas.
Yes, I know that Gates and Buffet are going to (or already have) given away most of their fortunes. However, neither one of them has bequeathed (to the best of my knowledge) as single red cent to the federal government. In fact, almost all rich people who make huge endowments look to do so in the most tax efficient manner possible, making sure that their money goes to the “Bill and Melinda Gates Foundation” and NOT to the Federal Government.
I’m sorry, but, in my book, crying for higher taxes and, at the same time, doing everything possible to pay as little tax as legally possible is the mark of an absolute hypocrite. Giving your money to a charity instead of the government says “I think somebody else can spend my money better and help more people than the federal government” in as clear and loud a voice as possible.
do the wall street big boys now have first dibs on foreclosures because they can buy in bulk?
“do the wall street big boys now have first dibs on foreclosures because they can buy in bulk?”
Old adage: “Money talks, and bull chit walks.”
New adage: “Money walks, from the Federal Reserve’s virtual printing press to Wall Street bankster bonus checks.”
The Obama Fed, six out of the seven voting members appointed by him.
So? Who was running the show when it all collapsed?
The same people that are running it now. Only you, not me, thinks anything that matters has changed under Obama.
Obama appointed Fed members before he was president?
How did happen?
There were banksters on the Fed before and there still are after Obama’s appointments including the reappointment of BB. I do not know why that is such a difficult concept to understand.
“do the wall street big boys now have first dibs on foreclosures because they can buy in bulk?”
Has it ever been any different?
“Get what you can get for your house today because it’s going to be much much less tomorrow for many years to come.”
u should hire a realtor and buy a house so you can get some benis of home ownership.
Why do that when housing prices are grossly inflated and falling?
Bloomberg - U.S. on Pace for Slowest Decade of Population Growth Since 1930s:
“The Census Bureau estimates there will be 315.1 million people living in the country on New Year’s Day, a 0.73 percent rise from last year’s estimate and 2.05 percent more than the most recent census count in April 2010. At the current pace, the nation’s population will grow by 7.3 percent during the decade, the lowest level since the 7.25 percent increase recorded between 1930 and 1940, according to data compiled by Bloomberg.
The slow rate of growth during the first part of the decade indicates the U.S. continues to emerge slowly from the worst economic downturn since the 1930s. The nation’s birth rate and immigration fell in the aftermath of the 2007-2009 recession. Between 2000 and 2010, the Census Bureau reported the nation’s population grew by 9.7 percent.”
Now back to your regularly scheduled NAR-scum pimping about “pent-up demand”.
The future belongs to Lucky Ducky
That’s right. And there is a massive demographic bulge already heading to the grave leaving 35 MILLION excess empty houses in addition to the 20+ MILLION excess empty houses in shadow inventory.
One of my target hoods is Lincoln, MA - suburban Boston. Even the town’s own website predicts a decline of population of about 17% over the next decade. Lincoln is upscale very large lots - a few acres many of them. Very bucolic. But sky high property taxes. No buying for me not at current prices.
I see prices here and in similar hoods falling 30% over the next few years. Actually in all east and west cost markets. Aging baby boomers, higher and higher property taxes, possible elimination of mortgage interest deduction, etc….
When denial about the collapse of end-user (fundamental) U.S. housing demand gives way to acceptance, the price declines are going to be epic — a crash for the record books.
“#####“######““`#““#######`#######`######“###`
`#““`#`#““`#“`#`#“““#““#“““`#““`#`###`
`#“““`#““`#“#“`#““`#““#“““`#““`#`###`
`#“““`######“#““`#““#““#####“`######“`#“
`#“““`#“`#“`#######““#““#“““`#“`#“““`
`#““`#`#““#“#““`#““#““#“““`#““#“###`
“#####“#““`#`#““`#““#““#######`#““`#`###`
““““““““““““““““““““““““““`
ASCII lolz FAIL!
….again
CRATERRRRRRRRRRRRRRRRR!!!!!!!!
Wordpress smushes spacing so that ASCII art doesn’t work.
But if you want to have some fun with ASCII text art, try this. They have over 300 fonts!
http://patorjk.com/software/taag/#p=testall&f=Graffiti&t=CRATER!!!
What Does the Fiscal Cliff Mean for You?
Are you a low-income, retired person who relies overwhelmingly on Social Security benefits for money? If so, you just hit the fiscal cliff jackpot.
Do you supplement your labor, pension, or Social Security income with dividend income? To the extent that you do, you’re totally screwed.
Do you build wind turbines? Bad news. The production tax credit on which your industry depends is going away, and work may all but vanish for a while.
Are you a full-time student with no job? You’re in the clear.
Have you been collecting Unemployment Insurance for more than 26 weeks? You’re out of luck.
Do you have a job? Get ready to pay higher taxes. (IMO the cumulative effect of all the taxes is going to be shocking)
Are you self-employed? Same deal. (Ditto)
Do you directly or indirectly work for the government? If so, you’re set to be hit by the sequestration provisions of the Budget Control Act of 2011. That means about $1.2 trillion in cuts over the next 10 years, divided about equally between defense and non-defense provisions.
This is basically bad news all around. But note that it’s especially bad news for rich people and people living in the Washington, D.C., area. You’ll probably have noticed that high-income individuals living in the D.C. area have disproportionate influence over the political press, which is one reason there’s been so much fiscal-cliff hype. A deal to at least relieve the middle-class tax aspect of the cliff will probably pass in January when the new baseline lets everyone call the deal a “tax cut” and undo much of the harm to the non-rich.
http://www.slate.com/articles/business/moneybox/2012/12/fiscal_cliff_and_you_how_daily_life_will_be_affected_for_retirees_working.html
$1 Trillion Obamacare Tax Hike Hitting on Jan. 1
Obamacare contains twenty new or higher taxes. Five of the taxes hit for the first time on January 1. In total, Americans face a net $1 trillion tax hike for the years 2013-2022, according to the Congressional Budget Office.
http://www.atr.org/trillion-obamacare-tax-hike-hitting-jan-a7393
It was clever to postpone implementation of these Obamacare Tax Hikes until after the 2012 election.
Not nearly as clever as putting 2 wars on the credit card. Oh and don’t forget, you get the interest expense of 450,000+ PTS vets to take care of.
And now that the two wars and the Bush tax cuts are baked into the credit card balance, the next clever move is to hammer ‘entitlements’ like Social Security, for which Baby Boomers have paid dearly since 1983 and before.
clever=devious
I still can’t tell how the Cliff is going to affect the lucky duckies. All the income numbers start at 50k, when the LD’s are nowhere near that.
If they’re on extended UE, that’s over. But I agree, it mostly hits the middle class and up.
This doesn’t let you set your choice of income, but it does show some results for lower incomes:
http://www.washingtonpost.com/wp-srv/special/business/tax-cut-scenarios/?hpid=z1
More FUD.
http://www.snopes.com/politics/taxes/realestate.asp
As for the rest, not a single one affects me in any way. None. No way whatsoever. It will not raise the price of anything I need or use. Not does it affect the average person in anyway whatsoever not any business with less than 50 employees.
The scare mongering is strictly BY and FOR the 1%.
“(IMO the cumulative effect of all the taxes is going to be shocking)”
Unless the Fed succeeds in their efforts to restart the housing wealth effect ATM machine, consumption is likely to take a substantial hit. I’m already mentally prepared for household-level austerity…
Ditto, we have a choice, many others don’t. It’s gonna hurt a lot of people and once they figure out that they can’t argue with a government bureacrat regarding services, unhappyness with Obamacare will grow.
These MF’ers posing as legislators in Washington need to take a xanax or have a couple of beers and put together some kind of a budget. This is getting ridiculous, how many years have we gone without a budget being passed?
“I’m already mentally prepared for household-level austerity…”
Why? Do we not already pay enough taxes? Should I really be stuck for another $400/mo or so because these overpaid ideological windbags can’t talk to each other like human beings and come up with a compromise plan?
I find the whole thing very disturbing. All of you progressives that worry about how the rest of the world views our country…how do we look now?
Also…what’s the deal with Harry Reid? If that guy was in any other industry, he could not qualify for a job in the mail room.
Have you considered the cumulative effect of all the refinance efforts of people NOT underwater?
Small Example: my parents refinanced a home (small, 33% of value mortgage). Their savings are approximately $100 per month.
How many millions of people did something similar, but with much larger monthly benefit? This is completely independent of the housing “ATM” restarting.
ft dot com
Last updated: December 30, 2012 10:58 pm
US budget talks falter as clock ticks down
By Richard McGregor in Washington
Last-ditch talks in Congress over the US budget have faltered a day before the deadline for a deal, leaving financial markets facing the prospect of entering the new year in a highly unstable economic environment.
Democratic and Republican leaders gave pessimistic updates on the talks to the Senate on Sunday afternoon, scotching earlier hopes that a deal was in the offing.
Mitch McConnell, the Republican Senate minority leader, said
“no one issue” was separating the two sides, adding that he had called Joe Biden, the vice-president and a former senator, to help break the deadlock.
Harry Reid, the Democratic majority leader in the Senate, said there were “still significant differences between the sides” but added there was “time to reach an agreement and we intend to continue negotiations”. The Senate will resume its session tomorrow at 11am Washington time.
The two parties in the Senate appeared closer to agreement on an issue that has divided them for years – ending George W. Bush’s tax cuts for high-income earners.
…
Filed under: Invisible Hand Of Free Market
Bloomberg - For-Profit Nursing Homes Lead in Overcharging While Care Suffers
“A report by federal health care inspectors in November said the U.S. nursing home industry overbills Medicare $1.5 billion a year for treatments patients don’t need or never receive.
Thirty percent of claims sampled from for-profit homes were deemed improper, compared to just 12 percent from non-profits, according to data Bloomberg obtained from the inspector general’s office of the U.S. Department of Health and Human Services via a Freedom of Information Act request.
At nursing homes, 78 percent of $105 billion in revenues went to for-profits in 2010, up from 72 percent in 2002, according to the latest available government breakdowns.
“Research shows for-profits are more likely to pursue money in all kinds of ways than non-profits are, even by pushing the legal envelope,” says Jill Horwitz, a professor at the School of Law at the University of California, Los Angeles, who has written 30 papers on health care.
Investor-owned facilities earn a 20 percent profit margin on Medicare patients compared to 9 percent for nonprofit operators, according to Medpac. Medicare pays nursing homes about a third of their revenues, while Medicaid, the state-federal health insurance program for the poor, accounts for roughly 50 percent. The bulk of the rest is from private payers.”
http://mobile.bloomberg.com/news/2012-12-31/for-profit-nursing-homes-lead-in-overcharging-while-care-suffers.html
Click the link for more graphic examples of feces and bedsores.
Disclosure: the squad’s first job after grad school with Big Firm was to prepare Medicaid and Medicare cost reports for large nursing home chain clients. Nothing in this article surprises us
““A report by federal health care inspectors in November said the U.S. nursing home industry overbills Medicare $1.5 billion a year for treatments patients don’t need or never receive.”
Says it all right there.
As I have said the democrats do not want to cut anything including defense since they know the only thing holding up this economy is the trillion dollar a year deficit:
Democrats were also demanding that across-the-board cuts to military and domestic programs — known as the “sequester” — at least be delayed.
“We’re not here to defend government, we’re here to make sure of the defense of our country,” said Senator Barbara A. Mikulski, Democrat of Maryland, whose state would be hit particularly hard. “Sequester has consequences.”
No defense contractor shall be left behind. Not a single one of them!
As much as I think entitlements should be cut defense is a good target too. As someone at dinner noted last night the US has been supporting the entire world ever since the war. (WW II) Might be a slight exaggeration but if Europe and other parts of the world did not have the support of the US military and paid for their own defense (France has one aircraft carrier) they could not have afforded all the social spending that they have. The same social spending that US liberals pine for.
France has a well developed pharma industry not sure about other countries so the US foots the bill for so much of the advances in medicine and you could make the same claim for a lot technology innovations too.
How would you rectify the intergenerational inequity which enabled geezers who retired from 1983 to the present to live high on the hog off the Baby Boomers’ hefty payroll taxes, while potentially limiting said Boomers to a paltry “return” on a working lifetime of punitive F.I.C.A. “contributions”? Is this just tough luck for the Boomers, who were forced to hand over a large share of their permanent incomes to long-lived “Greatest Generation” retirees who probably didn’t really need that Winnebago their Social Security benefits enabled them to purchase?
Gradually raise the retirement so the children of the boomers don’t get stuck in the same situation as their parents. Better yet phase out social security completely.
When you are in a hole stop digging. The austerity imposed by fiscal cliff is needed to ensure that the national debt as a percentage of the gdp does not keep growing. In fact, we need to cut even more. It would be better to put something like Simpson/Bowles in place and make more intelligent cuts. But going over the fiscal cliff is still better than kicking the can down the road. Yes, we will have a recession but it is better than bankrupting the nation as we are now doing. We have been paying our house payment with our credit cards for too long.
“When you are in a hole stop digging.”
So you are suggesting to end the Bush wars and tax cut on the wealthiest Americans, then?
Breaking news, Bush is no longer president. I am not a time traveler. I am worried about adding 6 trillion of debt in the last four years with no plan to cut the deficit in the future. A president should lead, where is his plan to cut the deficits in a significant manner?
Old news: The damage inflicted by a president’s policies can long outlive their tenure in office. Everything that has happened since 2008 is not Obama’s fault. In fact, quite a lot of what he has had to deal with was set in motion by his predecessor.
We are still paying for Carter’s foreign policy so that is true but it does not relieve Obama from the obligation to lead and give the nation a plan to reduce the trillion dollar deficits. Obama stated that Afghanistan was a good war and the Iraq war is over. Bush’s deficits over eight years were about the same as Obama over four. I do not defend Bush but Obama needs to take ownership of his own policies and results which are poor.
“http://www.cbpp.org/cms/index.cfm?fa=view&id=3873″
Interesting chart here showing the effects of the wars, Bush tax cuts, and recession on the budget deficit. If we eliminate those 3, then we eliminate most of the deficit.
I suspect the wars and tax cuts served two purposes for the Bush administration. The first was political capital. Being at war favors sitting presidents. Cutting taxes is always a good political move. The second was economic stimulus. After the dot bomb, the administration needed to do something to stimulate the economy. Both the wars and tax cuts are stimulative and war spending is palatable to Republicans.
Eliminating war spending and tax cuts would reduce the deficit at the expense of recession. Recession reduces revenues, increasing the deficit. Congress is in a Catch-22 with regards to deficit reduction. And they know it. Hence the difficulty in the current cliff negotiations. They know they are in the business of picking winners and losers. They each want the other side to get the blame when voters go to the polls in 2014.
“We are still paying for Carter’s foreign policy…”
Please expand on this. Thx!
The Carter who didn’t involve us in a single war? The Carter who majorly downsized the US military? The Carter who brokered the Camp David Accords? That Carter?
Please, do tell….
The Carter who pushed Iran into the hand of the Islamists. The Shah was not saint but his white revolution allow women to have rights and limited the power of the mullahs. Carter’s policies allow them to come back into power. Of course, we will be paying for the Moslem brotherhoods rise to power in Egypt under Obama for decades to come. Funny Egypt is playing out just like I said it would and not like you said, A Hansen.
The Shah was put in place by the CIA. Funny thing happens when you impose a puppet dictator on a country. Eventually they get sick of it and get rid of him. If you have done what you can to keep him in place for a long time, the resentment will be higher and the “blow back” regime will be someone who is even worse for your interests than you would have gotten if you had just left the country alone in the first place.
But you knew that already, didn’t you?
Darn that democracy.
You ignore the role of the Soviet Union had in supporting the overthrow of the Shah along with the role of outside Islamic interests. The return of the mullahs hardly was in the best interest of the people of Iran. The only revolution Obama did not support was when the Iranians tried to push out the Mullahs. The only revolution we should have supported.
Hansen what democracy are you talking about? Surely you do not believe that Iran is a democracy.
Iran may not be what we think of as a democracy, but the revolution agains the Shah was a popular revolution. If they had had an election between the Shah and Mullahs at the time, the mullahs would have won.
My father spent time in Iran in the early 60s when he was in the US military. The people were terrified of him. He wasn’t all that safe either.
A revolution supported by the Soviet Union, Iraq (Saddam Hussein) and the Islamists. The people of Iran today are worse off then under the shah and yet Obama gave the true democracy movement no support. Those are the facts. The facts that the people might have voted against their own interests does not impress me. In fact, that is why I knew that Egypt would end badly. The majority of people in the middle east believe that anyone leaving Islam should be killed. A popular vote is not a good way to pick a leader over there.
Carter was the biggest idiot ever to run this country until Obama. Iran did not have to slip back into the 6th century. Naïve policies no matter how well intentioned only cause problems. The economic policies of this president can and will lead to the bankruptcy of the country. Printing money to obtain prosperity has never worked and never will.
Did you read back then, Dan? Pahlavi was as universally detested as fellow CIA-installed dictators, Duvalier, Marcos and Ceausescu.
I was taking PHD classes on Islam back then. Unlike those dictators he had the support of the military and many secular Iranians who knew that the rise of the mullahs would set back a country that had raised the standard of living and the educational levels of Iranians to some European countries.
PhD. And just not to mislead, I took the courses in Middle East history and Islam as an undergrad by special permission. In most classes I was the only person not from the Middle East.
From Wikipedia about the White Revolution created by that terrible Shah:
Mohammad Reza Shah had intended it to be a non-violent regeneration of Iranian society through economic and social reforms, with the ultimate long-term aim of transforming Iran into a global economic and industrial power. The Shah introduced novel economic concepts such as profit-sharing for workers and initiated massive government-financed heavy industry projects, as well as the nationalization of forests and pastureland. Most important, however, were the land reform programs which saw the traditional landed elites of Iran lose much of their influence and power. Nearly 90% of Iranian share-croppers became landowners as a result.
Socially, the platform granted women more rights and poured money into education, especially in the rural areas. The Literacy Corps was also established, which allowed young men to fulfill their compulsory military service by working as village literacy teachers.
The White Revolution consisted of 19 elements that were introduced over a period of 15 years, with the first 6 introduced in 1962 and put to a national referendum on January 26, 1963.
1.Land Reforms Program and Abolishing “Feudalism”: The government bought the land from the feudal land lords at what was considered to be a fair price and sold it to the peasants at 30% below the market value, with the loan being payable over 25 years at very low interest rates. This made it possible for 1.5 million peasant families, who had once been little more than slaves, to own the lands that they had been cultivating all their lives. Given that average size of a peasant family was 5, land reforms program brought freedom to approximately 9 million people, or 40% of Iran’s population.
2.Nationalization of Forests and Pasturelands: Introduced many measures, not only to protect the national resources and stop the destruction of forests and pasturelands, but also to further develop and cultivate them. More than 9 million trees were planted in 26 regions, creating 70,000 acres (280 km²) of “green belts” around cities and on the borders of the major highways.
3.Privatization of the Government Owned Enterprises, manufacturing plants and factories by selling their shares to the public and the old feudal lords, thus creating a whole new class of factory owners who could now help to industrialize the country.
4.Profit Sharing for industrial workers in private sector enterprises, giving the factory workers and employees 20% share of the net profits of the places where they worked and securing bonuses based on higher productivity or reductions in costs.
5.Extending the Right to Vote to Women, who previously did not enjoy suffrage. This measure was criticised by some of the clergy.
6.Formation of the Literacy Corps, so that those who had a high school diploma and were required to serve their country as soldiers could do so in fighting illiteracy in the villages. In 1963 approximately 2/3 of the population was illiterate, with 1/3 found mainly in the capital city of Tehran.
7.Formation of the Health Corps to extend public health care throughout the villages and rural regions of Iran. In 3 years, almost 4,500 medical groups were trained; nearly 10 million cases were treated by the Corps.
8.Formation of the Reconstruction and Development Corps to teach the villagers the modern methods and techniques of farming and keeping livestock. Agricultural production between 1964 and 1970 increased by 80% in tonnage and 67% in value.
9.Formation of the Houses of Equity where 5 village elders would be elected by the villagers, for a period of 3 years, to act as arbitrators in order to help settle minor offences and disputes. By 1977 there were 10,358 Houses of Equity serving over 10 million people living in over 19,000 villages across the country.
10.Nationalization of all Water Resources, introduction of projects and policies in order to conserve and benefit from Iran’s limited water resources. Many dams were constructed and five more were under construction in 1978. It was as a result of these measures that the area of land under irrigation increased from 2 million acres (8,000 km²), in 1968, to 5.6 million in 1977.
11.Urban and Rural Modernization and Reconstruction with the help of the Reconstruction and Development Corps. Building of public baths, schools and libraries; installing water pumps and power generators for running water and electricity.
12.Didactic Reforms that improved the quality of education by diversifying the curriculum in order to adapt to the necessities of life in the modern world.
13.Workers’ Right to Own Shares in the Industrial Complexes where they worked by turning Industrial units, with 5 years history and over, into public companies, where up to 99% of the shares in the state-owned enterprises and 49% of the shares of the private companies would be offered for sale to the workers of the establishment at first and then to the general public.
14.Price Stabilization and campaign against unreasonable profiteering (1975). Owners of factories and large chain stores were heavily fined, with some being imprisoned and other’s licenses being revoked. Sanctions were imposed on multi-national foreign companies and tons of merchandise stored for speculative purposes were confiscated and sold to consumers at fixed prices.
15.Free and Compulsory Education and a daily free meal for all children from kindergarten to 14 years of age. In 1978, 25% of Iranians were enrolled in public schools alone. In that same year there were 185,000 students of both sexes studying in Iran’s universities. In addition to the above there were over 100,000 students pursuing their studies abroad, of which 50,000 were enrolled in colleges and universities in the United States.
16.Free Food for Needy Mothers and for all newborn babies up to the age of two.
17.Introduction of Social Security and National Insurance for all Iranians. National Insurance system provided for up to 100% of the wages during retirement.
18.Stable and Reasonable Cost of Renting or Buying of Residential Properties (1977). Controls were placed on land prices and various forms of land speculation.
19.Introduction of Measures to Fight against Corruption within the bureaucracy. Imperial Inspection Commission was founded, consisting of representatives from administrative bodies and people of proven integrity.
Were those military educated at the US War College? What percent of the population was secular? What sort of government would Iran have ended up with if the CIA had never put the Shah in place. It might have been more Islamic, but would it have been as reactionary as the one we got when the Shah was overthrown?
When my dad was on missions in Iran, he was doing stuff related to fighting the cold war. We imposed a leader who would do what we wanted with respect to the Soviet Union on a country and a people who didn’t want him. Who the heck do you think they were going to look to for support when they finally decided to kick him out? There were two sources of funding at the time - us and the Soviets. We were denying them the right to pick their government. They got support from the superpower that wasn’t us. How surprising…
So Dan You think it’s a religious Jihad, and we should have been aiming at the mosques and mullahs not the government and the military.
Boy do we need this in Detroit and Gary and far rockaway and wash dc…..compton….and the list goes on
6.Formation of the Literacy Corps, so that those who had a high school diploma and were required to serve their country as soldiers could do so in fighting illiteracy in the villages. In 1963 approximately 2/3 of the population was illiterate, with 1/3 found mainly in the capital city of Tehran.
“PhD. And just not to mislead, I took the courses in Middle East history and Islam as an undergrad by special permission. In most classes I was the only person not from the Middle East.”
It must be difficult to obtain an unbiased version of middle-east history on a U.S. campus. FWIW, Carter was effectively barred from speaking about the middle-east at several Ivy League universities because the content didn’t sit well with those running the place. A university is supposed to be a place where anything can be discussed no matter how distasteful; enter the tenure system.
What an incredible crock. Those ungrateful Iranian peasants were able to overthrow their benevolent “Shah” (who was backed by the unlimited resources of American oil interests) simply because their village Mullahs told them to. No overwhelming sense of oppression, tyranny, or massive corruption played into it at all. Right.
Where did you go to school? Oral Roberts U?
And in the interest of not “misleading” us, (since you studied it and all,) why not go ahead and tell us how the “White Revolution” (!) was implemented?
Should we also mention the Shah’s secret police?
RMS, it was sometimes difficult but the source material was available. Now, getting back to how U.S. paid for Carter’s policy. The overthrow of the Shah was needed by the Soviet Union since it wanted to invade Afghanistan and did not want the U.S. to a hostile force on its flank, particularly one friendly to the U.S. Without the fall of the Shah, there would have been no Afghanistan invasion and subsequent rise of Osama. We would not have had to invade Iraq either time since the Shah contained Saddam Hussein. All that has gone wrong including three wars is a direct result of Carter’s policies.
As far as Polly, I went to law school and undergrad at the same school. A school that prepared me to take the multi-state bar exam and score in the 99% of test takers. My score was higher than the highest score in some states. I am sure you did not score that high. It also allowed me to pass the California Bar on the first attempt without taking any commercial bar prep. I can assure you that it was not Oral Roberts.
God for you. You should stick to what to you know, because science and geopolitics isn’t it.
Now about the Shah’s secret police and the fact that Iran was a monarchy, despite all the progressive programs.
Really Eco, and 2012 is going to be warmer than 1998?
BTW, are you going to ignore that right after the revolution Khomeni “needed” to execute tens of thousands of people to retain power, far more than the Shah killed during his entire tenure and most of the people the Shah shot were Moslem extremists just like the Talaban that shoot young girls for getting an education.
BTW, here are some posts from the past on this blog when we were talking about Egypt:
Comment by albuquerquedan
2011-01-30 12:26:41
No it was not out of our control in Iran. We made a decision not to support the Shah by making it clear we would not support a crackdown. It was a disaster for our country and ironically for the people of Iran, who were progressing under the Shah.Even though he was a dictator, he had raged a tough war to break the power of the mullahs and could have done it again but it would have been ugly. In the real world tough choices have to made. We give over 1.5 billion dollars to Egypt a year and the military will back up a friendly regime, if we give them a green light. The sad reality is true democracy in that region leads to radical Islam. Neither Carter, Bush II or Obama understood that reality and they have all paid for it, as has this country. Reagan, Clinton and Bush I only wanted cheap oil and friendly regimes. The cheap oil during their terms was not by accident. The question for Obama is whether he will reverse course.
Ironically, Iran just put down a similar revolt and Obama seemed less critical than he is of Mubarak. BTW, I think he will need to go but the question is whether the new government is going to use the methods used by Iran to put down their revolt.
(Comments wont nest below this level)
Comment by Rancher
2011-01-30 13:48:47
Bingo. The nail has been hit.
Comment by ahansen
2011-01-30 14:39:18
Excellent summary, dan.
Thanks for this.
Sorry Polly, I thought you were the one that wrote the insulting comment about Oral Roberts, when it was A Hansen. You did not make it personal and I should not have.
Dj, not a war on Islam but a recognition that Islam has gone backwards the last three decades and not is reflective of beliefs that the West left behind hundreds of years ago. Attaturk kept Islam out of the government and because of that Turkey advanced, Unfortunately, even in that country Islamic extremists are on the rise,
BTW, I think a blast from the past post(s) was/were lost so I will re-post it/them.
Comment by albuquerquedan
2011-01-30 12:26:41
No it was not out of our control in Iran. We made a decision not to support the Shah by making it clear we would not support a crackdown. It was a disaster for our country and ironically for the people of Iran, who were progressing under the Shah.Even though he was a dictator, he had raged a tough war to break the power of the mullahs and could have done it again but it would have been ugly. In the real world tough choices have to made. We give over 1.5 billion dollars to Egypt a year and the military will back up a friendly regime, if we give them a green light. The sad reality is true democracy in that region leads to radical Islam. Neither Carter, Bush II or Obama understood that reality and they have all paid for it, as has this country. Reagan, Clinton and Bush I only wanted cheap oil and friendly regimes. The cheap oil during their terms was not by accident. The question for Obama is whether he will reverse course.
Ironically, Iran just put down a similar revolt and Obama seemed less critical than he is of Mubarak. BTW, I think he will need to go but the question is whether the new government is going to use the methods used by Iran to put down their revolt.
(Comments wont nest below this level)
Comment by Rancher
2011-01-30 13:48:47
Bingo. The nail has been hit.
Comment by ahansen
2011-01-30 14:39:18
Excellent summary, dan.
Thanks for this.
…a non-violent regeneration of Iranian society through economic and social reforms, with the ultimate long-term aim of transforming Iran into a global economic and industrial power. The Shah introduced novel economic concepts such as profit-sharing for workers and initiated massive government-financed heavy industry projects, as well as the nationalization of forests and pastureland. Most important, however, were the land reform programs which saw the traditional landed elites of Iran lose much of their influence and power. Nearly 90% of Iranian share-croppers became landowners as a result.
Socially, the platform granted women more rights and poured money into education, especially in the rural areas. The Literacy Corps was also established, which allowed young men to fulfill their compulsory military service by working as village literacy teachers.
So, let’s just be clear here. You’re saying all these goals- which you would call socialism/communism if they were implemented here- prove that the Shah was a good guy?
Can you see the amazing hypocrisy?
“I went to law school”
If you’re an attorney then I’m a bellydancer.
I’m trying to keep score here. If the cuts happen as they are now then which economic policy will be in effect? Supply Side or Keynesian economics?
I’m trying to keep score here. If the cuts happen as they are now then which economic policy will be in effect? Supply Side or Keynesian economics?
Neither. Zimbabwe economics where you run massive deficits and pay for them by printing money.
Raising taxes and reducing gov spending during a recession/depression goes against Keynesian theory. Raising taxes on the wealthy goes against Supply Side theory.
As long as we keep the financial sector flush with easy money, we’re practicing monetarism.
Pay should be fund. However, the result is always the same a complete collapse of the economy.
Actually I think this falls under the Keynesian model. Using market based indicators like stock market levels, rising home prices and the latest GDP numbers it’s time to cut stimulus and raise taxes. Adjusted for technology boosted standards of living and productivity it’s better to apply austerity when the economy is growing. Sure it might growth back down to zero but it won’t be the end of the world ether.
falls under the Keynesian model
Keynes wouldn’t cut with unemployment as high as it is.
“Keynes wouldn’t cut with unemployment as high as it is.”
Why not? The huge gains in productivity mean less workers are needed for a given level of GDP.
PS: Obama just caved in on the tax brackets. $250K now looks like $450 and he’s not done yet. Well there goes his campaign promises.
Why not? The huge gains in productivity mean less workers are needed for a given level of GDP.
Because Keynes had the radical idea that the economy should “support the general welfare”, not just make shareholders and corporate chieftains rich.
“Breaking news: the House of Representatives won’t vote on any plan to avert the Fiscal Cliff, leaders have told members.”
(cnn)
Question is: how much will today’s negotiation mean tomorrow? Will they start dealing again at Square 1?
how much will today’s negotiation mean tomorrow? Will they start dealing again at Square 1?
I think they’ve pretty much worked out the agreement now, and could pass it if they wanted. But the agreement involves what would count as tax increases if done now, but will count as tax cuts if done after we go over the cliff .
Going over the cliff, even just for a day, lets them live up to Norquist’s pledge, and gives them a defense at the next election.
That’s why I always thought they’d let it go over the cliff.
I guess we’re in for a national voyage bound in shadows and in miseries. Dang. I guess the Mayans were right after all.
And this would be different from the last 30 years…. how?
http://www.nytimes.com/2012/12/31/us/politics/obama-accuses-republicans-of-blocking-tax-deal.html?pagewanted=all
The article quoted above.
Settlement Expected on Past Abuses in Home Loans
By JESSICA SILVER-GREENBERG
Published: December 30, 2012
Los Angeles police officers stood guard this month at a Wells Fargo branch that had been briefly occupied by protesters. Wells Fargo is one of the banks in the negotiations.
Kevork Djansezian/Getty Images
Banking regulators are close to a $10 billion settlement with 14 banks that would end the government’s efforts to hold lenders responsible for foreclosure abuses like faulty paperwork and excessive fees that may have led to evictions, according to people with knowledge of the discussions.
Under the settlement, a significant amount of the money, $3.75 billion, would go to people who have already lost their homes, making it potentially more generous to former homeowners than a broad-reaching pact in February between state attorneys general and five large banks. That set aside $1.5 billion in cash relief for Americans.
Most of the relief in both agreements is meant for people who are struggling to stay in their homes and need the banks to reduce their payments or lower the amount of principal they owe.
The $10 billion pact would be the latest in a series of settlements that regulators and law enforcement officials have reached with banks to hold them accountable for their role in the 2008 financial crisis that sent the housing market into the deepest slump since the Great Depression. As of early 2012, four million Americans had been foreclosed upon since the beginning of 2007, and a huge amount of abandoned homes swamped many states, including California, Florida and Arizona.
Federal agencies like the Securities and Exchange Commission and the Justice Department are continuing to pursue the banks for their packaging and sale of troubled mortgage securities that imploded during the financial crisis.
Housing advocates were largely unaware of the latest rounds of secret talks, which have been occurring for roughly a month. But some have criticized the government for not dealing more harshly with bankers in light of their lax standards for making loans and packaging them as investments, as well as their problems with modifying troubled loans and processing foreclosures.
A deal could be reached by the end of the week between the 14 banks and the nation’s top banking regulators, led by the Office of the Comptroller of the Currency, four people with knowledge of the negotiations said. It was unclear how many current and former homeowners would receive money or when it would be distributed.
Told on Sunday night of the imminent settlement, Lynn Drysdale, a lawyer at Jacksonville Area Legal Aid and a former co-chairwoman of the National Association of Consumer Advocates, said: “It’s certainly a victory for consumers and could help entire neighborhoods. But the devil, as they say, is in the details, and for those people who have had to totally uproot their lives because of eviction it may still not be enough.”
…
$10 billion? What a JOKE.
Angelo Mozilo is laughing at all of you
Mr Market seems to be pricing in a ‘fiscal cliff’ compromise.
Either that, or the Plunge Protection Team has stepped in again to prop up asset prices.
Dec. 30, 2012, 2:14 p.m. EST
Obama: Failure to pass deal will hurt markets
Lawmakers scramble to reach agreement as fiscal cliff looms
Stories You Might Like
U.S. stock futures show sharp declines
U.S. stock futures swing back higher
Senators race to meet fiscal-cliff deadline
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch)—A failure by Congress to extend tax cuts on the middle class in the next 48 hours and avert the fiscal cliff will likely hurt the economy and financial markets, President Barack Obama said Sunday.
Speaking on NBC’s “Meet the Press,” Obama said there was no agreement yet to avoid the fiscal cliff.
With two days remaining to avert billions of dollars in automatic spending cuts and the expiration of Bush-era tax cuts, Senate leaders on Sunday were scrambling to hatch a bipartisan deal that could clear both the Democratic-led Senate and Republican-controlled House of Representatives.
Obama took to the airwaves to urge lawmakers to come up with a compromise, and Senate leaders were expected to meet with their caucuses at 3 p.m. Eastern on Sunday. Word of an agreement, and a possible vote, could follow.
Higher taxes on the middle-class would depress consumer spending and “hurt our economy badly,” Obama said.
“It is going to be very hard for the economy to sustain its current growth trends if, suddenly, we have a huge bite taken out of the average American’s paycheck,” Obama said. Read more MarketWatch fiscal-cliff coverage.
Midafternoon Sunday, U.S. stock futures were showing sharp declines ahead of a holiday-shortened trading session on Monday and after declines for U.S. equities on Friday.
Senators said that the talks between Senate Democratic Leader Harry Reid and Senate Republican Leader Mitch McConnell are focusing on extending the tax breaks, renewing unemployment insurance for 2 million unemployed workers and enacting alternative minimum tax relief.
“If we can get that done, that takes a big bite out of the fiscal cliff,” Obama said.
…
Given that the “fiscal cliff punt” option is already on the table, why not just call it a day and agree to revisit the budget negotiations in 2013?
Why the urgency on December 31, 2012, just a few hours before Ryan Seacrest heralds the arrival of 2013?
It’s good to at least know that the Mayan doomsday scenario is off the table.
POLITICS
Updated December 31, 2012, 11:09 a.m. ET
Cliff’s Edge Draws Close
By JANET HOOK And SIOBHAN HUGHES
Talks between Senate Minority Leader Mitch McConnell (R., Ky.) and Vice President Joe Biden continued through the night and into Monday morning, as Washington tried to do what it has promised for months: engineer an alternative to the so-called fiscal cliff.
A White House official said Monday morning the talks made “progress overnight.” A spokesman for Mr. McConnell said Monday the two men “will continue to work toward a solution.”
According to a McConnell aide, the senator’s last two conversations with Mr. Biden were at 12:45 a.m. and 6:30 a.m.
On taxes, one of the thorniest issues on the table, the two sides appeared to be converging. President Barack Obama has called for raising individual income-tax rates on family income above $250,000. In the latest round of Senate talks, Republicans proposed a $550,000 threshold, which Democrats moved to $450,000, according to Sen. Dick Durbin (D., Ill.).
On the estate tax, Democrats are no longer insisting on an increased rate and instead have agreed to put the matter to a separate vote, which suggests current rates will likely continue. That’s a concession to the GOP and a number of farm-state Democrats in the Senate. Absent action, rates on estates will jump and the threshold at which they would hit is set to fall.
Other fundamental divisions remained, including primarily a disagreement of principle between the parties: Republicans wanted any tax increase, which they only reluctantly accepted, to go toward reducing the deficit. Democrats wanted any increased tax revenue to offset spending cuts that are scheduled to kick in as part of the fiscal cliff, and to pay for extending unemployment benefits, among other items.
New Year’s Eve, however, dawned with no solution to Washington’s budget impasse, setting up a 24-hour scramble. What happens Monday could go some way to determining the short-term fate of the U.S. economy and the reputation of the government, both of which have been dinged by the spectacle of endless seemingly circular negotiations. In the past two weeks, at least three different sets of negotiation teams have sought a way out.
Before noon on Monday, Senate Majority Leader Harry Reid (D., Nev.) said on the Senate floor that discussions continue, but he also warned “we really are running out of time,” adding that “There are a number of issues on which the two sides are still apart.”
The Senate had set itself a goal of hatching a deal by midafternoon Sunday, a deadline that slipped by as both sides instead bickered in public and tried to apportion blame for the continuing impasse. Late Sunday, Mr. Reid recessed the Senate until Monday at 11 a.m., leaving the McConnell/Biden talks to take the lead.
“There is significant distance between the two sides,” Mr. Reid said Sunday. “There is still time left to reach an agreement and we intend to continue negotiations.”
In the absence of a bipartisan deal, Mr. Reid is preparing for a Monday vote on a bill to carry out Mr. Obama’s backup proposal, which tackles only a few items on the legislative agenda, including extending current tax rates for income up to $250,000 for couples filing jointly. Democrats are confident they could pass the bill through the Senate. A key question is whether the House, which returned Sunday evening, would approve it if it doesn’t enjoy broad bipartisan support in the Senate.
Some senators seemed almost resigned to the prospects of Congress missing its deadline, on the grounds that spending cuts and tax increases that take effect Tuesday and Wednesday, the first two days of the new year, could be reversed.
“The world won’t end,” said Sen. Tom Harkin (D., Iowa.). “Things can be made retroactive.”
…
POLITICS
Updated December 30, 2012, 8:05 p.m. ET
Unthinkable Cuts Almost a Reality
By DAMIAN PALETTA, CHRISTOPHER WEAVER and DION NISSENBAUM
Mandatory federal spending cuts designed to be prohibitively drastic will become a reality on Wednesday if negotiators remain unable to reach an agreement to avert the reductions.
The cuts would hit a broad array of departments and programs, from the military’s purchase of mine-resistant vehicles to government food inspections. They would slash funding for Secret Service details and cut rental housing subsidies in rural areas.
Illustrating the gravity of the cuts, the Pentagon plans to notify 800,000 civilian employees that they could be forced to take several weeks of unpaid leave in 2013 if a deal isn’t struck, and other agencies are likely to follow suit.
The cuts, which members of both parties have referred to as a “meat ax,” are the product of a hastily designed 2011 law that required $110 billion in annual spending reductions over nine years to reduce the deficit. Their severity, representing close to 10% of annually appropriated spending, was intended to force Democrats and Republicans to come together on a broader package of deficit-reduction measures, which would replace the cuts. That effort failed, raising the prospect of the cuts’ taking place.
Complicating matters, the White House hasn’t informed federal agencies or contractors of precisely how the cuts might be administered, leading to confusion about the potential impact. Several federal agencies referred questions about the cuts to the White House’s Office of Management and Budget. OMB didn’t respond to questions.
“The biggest challenge is just the uncertainty,” said Steven Glass, chief financial officer at the Cleveland Clinic, a medical center and health-care system that expects to see a $22 million cutback in its Medicare payments in 2013 if the government doesn’t reverse the cuts. “It’s really hard to plan when you’re literally looking a few days out and you don’t know what Washington is going to do.”
Facing the sequester and other financial pressures, the Cleveland Clinic may squeeze costs by consolidating services such as inpatient psychiatric units and skilled nursing among its numerous locations.
With a federal budget close to $3.6 trillion, $110 billion in annual cuts seems like a rounding error. But some of the largest parts of the federal budget are exempt from the cuts, including benefits under Social Security, Medicare and Medicaid, and interest payments on federal debt.
…
If contractors get furloughed too, can we at least wait a few more weeks to get more snow so our month-long ski vacation has better conditions and more terrain open?
Send the squad out west, we have a 12′ base already.
Gonna try to get up there next week. Save me some sno?
I’m quite impressed by how steady the stock market is in the face of ‘fiscal cliff’ uncertainty. It is remarkable, no?
Almost like there is no fiscal cliff. Or the fix is in the bag. Or as someone said, they know we went off the fiscal cliff years ago and this is just the “fiscal impact”.
It’s hard for me to believe that anything negative is “priced in” at these prices, though.
“Or the fix is in the bag.”
Either they sign off on some kind of token resolution with a promise for follow-up action on the real deal, or else we go over the ‘fiscal cliff.’
Perhaps the market already priced in this rather bleak scenario last week?
“…the fix is in the bag…”
Yes.
Too late now to get on board the ‘fiscal cliff’ avoidance rally rocket?
Obama to speak at 1:30 p.m. Eastern
Progress cited as fiscal-cliff deadline draws ever nearer
Negotiations aimed at averting the tax increases and automatic spending cuts are making progress, lawmakers say, as Washington stares down its midnight deadline for action.
So uh… what happens if the economy actually gets stronger?
Interest rates are low right now. This puts upward pressure on house prices as the monthly payment remains the same for a higher price. Conversely of course, higher interest rates would force prices down in order to maintain the same monthly payment.
Or is the system which the Fed has engineered such that keeping the crony sectors flush with cash means undermining the rest of the economy? Would it ever throw the crony sectors under the bus to support a recovery? Or does its responsibility begin and end with the crony sectors?
“Or is the system which the Fed has engineered such that keeping the crony sectors flush with cash means undermining the rest of the economy?”
You’ve just described the last 30 years. And just the Fed.
So what do you think will happen with 30 years of momentum?
Oh man, listen to this:
‘A longtime Navy chaplain and Seventh-Day Adventist minister, Senate Chaplain Barry C. Black launched Monday’s proceedings…Almighty God, we praise your name. You are high over all the nations and your glory is greater than the heavens. Let your spirit move our lawmakers to do your will. Teach them valuable lessons from hardships and adversities as they work to be worthy of the sacrifices of those who have already given so much for freedom.’
‘Lift them from the darkness of hopelessness so that they may take steps toward your light. May your presence and grace bring comfort as you inspire them to choose what is right and just.’
‘May they take the tide that leads to fortune, rather than risk a national voyage bound in shadows and in miseries.’
‘We pray in your powerful name. Amen.’
Meanwhile:
‘According to Lou Dobbs, if we ‘do nothing’ the U.S. national debt will be approximately 25.8 trillion dollars in 2022. If ‘Obama wins’, the U.S. national debt will be approximately 25.4 trillion dollars in 2022. If ‘Boehner wins’, the U.S. national debt will be approximately 25.2 trillion dollars in 2022.’
http://www.youtube.com/watch?v=WBGOxmCIxhY
Some comments:
‘The real national debt is greater than 80 trillion dollars, counting the liabilities Social Security, Medicare, and all federal employee’s future retirement benefits.’
‘80 Trillion? you mean 200+ Trillion.’
So let’s get ready for the exciting conclusion! Will we borrow 600 billion more over 10 years when we are liable for 200 trillion? Gosh, I don’t know if I can make my heart slow down! Maybe there’s some professional wrestling on TV.
I.e. the exciting conclusion to this Grand Kabuki theater production will have absolutely no impact on fiscal reality.
Like I said. It’s theater for international consumption. Meanwhile the Fed moneychangers carry on excavating the monetary mooncrater that will become our financial grave.
Son of a bitches.
Sons of bitches is the correct term.
Should we short bonds yet?
That’s the question of the decade…
It is hard to imagine bonds going much higher, but then again, it is very difficult to determine when/if they will crash, especially the Fed has expressed a willingness to buy huge numbers of the same.
Would you short IBM if the Fed said they planned to buy a huge amount of the company? Even if the stock was dramatically overpriced?
“…May they take the tide that leads to fortune, rather than risk a national voyage bound in shadows and in miseries.”
Setting aside the oxymoron of a military chaplain, how are we supposed to take our country seriously when our legislators start each session with some nitwit appealing to a magic Daddy to fix things?
Cheer up, Ben. At least you’re assured of plenty of business for the foreseeable future. And you’ve an enormous and far-flung family who love you.
“…to a magic Daddy to fix things?”
Can’t tell ‘ya how many ladies I’ve met that were looking for this guy.
What does this tell us about Congress?
They’re the kings of telling people what they want to hear?
Better to trust in the “magic daddy” than Obama is my mama and will take care of my every need.
Stop being such a drama queen, Jonesy.
KimK is having Kanye’s baby! Let’s talk about what really matters please.
The “cliff” in spending (sequester) is approximately 2.5% of the total Federal Budget.
If we have such handwringing about this amount of the budget, you can see why a big deal is desperately needed…and so far, there is no one willing to play.
Filed under “Hypocrisy of land owners who get gas royalties”.
http://www.star-telegram.com/2012/12/29/4513807/fort-worth-considers-restrictions.html
The nerve of these people who are happy to collect $$ for royalties and then scream to the city council to block gas compressors from being built near their homes.
DOH!
Stuff like this is why America is the greatest country ever. God shed his grace on we:
http://sports.yahoo.com/blogs/nfl-shutdown-corner/monkeys-riding-dogs-herding-goats-monkeys-riding-dogs-230438185–nfl.html
“GO AWAY! I’M BAITIN’!”
“They are embroiled in two of Florida’s most troubled and controversial industries: homeowners insurance and subprime mortgages.
Yet both Homeowners Choice Inc. and Walter Investment Management Corp. broke out from the pack and doubled in value to become the best performing Tampa Bay stocks of 2012.”
http://www.tampabay.com/news/business/markets/homeowners-choice-and-walter-investment-are-best-performers-of-2012-among/1268464
A quick google shows Walter Investment Management Corp buying and consolidating some pretty shady mortgages companies such as Rescap and GreenTree.
Homeowners Choice Inc. is heavily involved with failed takeout companies.
Sounds like Florida “business as usual.”
I lost my bet with a colleague today. It was close, could have gone either way. I bet the S&P 500 would finish below 1416.18 by the end of trading on the 31st. He bet the other way. Around 11:15 I still was ahead.
So it finished up to 1426 and some change and I now have to bring in pastries to work Wednesday.
But my own net worth increased today by nearly what I paid for my nwe 2003 Toyota.
Good job Bill. I had a good day today too but not by as much as you.