Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
Post off-topic ideas, links, and Craigslist finds here.
Posted By: Ben Jones @ 1:09 am
From yesterday’s Bits Bucket:
Comment by look out down below
Okay, have all the fun you want after you listen to this:
This supercilious creep EPITOMIZES everything we detest about lying realtresses. In fact Ms. Parasite p’d me off so badly, I took the time to transcribe her smug little screed to post here along with her aol.com address (GerriGCRE at…) so we can let her know just how much we appreciate her helpful suggestions. Thanks, lodb, for reminding us to be ever-vigilent against this ongoing public menace.
“I’m Gerri Cregnotti owner/broker, and I had 39 agents respond to this, so I’m gonna read part of this…
Buyers, if you wanna buy a house today, when your agent tells you that the house you are offering on has multiple offers…believe her.
When you agent tells you your price or terms are not strong enough ta get the house…believe her.
If your agent tells you you are offering all cash and you still need to raise your offer…believe her.
When your agent tells you to present a strong pre-approval letter and proof of funds, just because you think you are a strong buyer and don’t need it… believe her
If you are looking at Zillow for the pricing value of the home you are interested in, give it up. Zillow is irrelevant today.
If you pick the comp for this property, chances are you picked the three lowest comps to work in your favor and that’s not gonna help you either.
If you have a relative that’s bought teeeeen homes in the past and tells you to offer below this market, tell them to put on their leisure suit and go home because that’s not relevant either.
If you have your client tell you that the guy at work told you to offer 10% below the market because his brother just got a home like that, tell him it’s irrelevant. What used to be relevant is not relevant in this market.
Please buy a professional agent that will help you through this process. Believe them.”
“Please buy a professional agent…”
Do they clean windows? Vacuum? Chop mushrooms? Can you give them as gifts?
Clearly the reference is to prostitutes.
that’s what ric edelman sounded like on his radio show this past weekend…cept he was talking about the stock market.
He is entertaining, I’ll give him that. Dave Ramsey, not so much.
it seems like ramsey’s system takes into account psychology and is very workable for the average person. he doesn’t overcomplicate things or try to teach J6P too much. just tries to make them aware of the big picture. his “envelope system” has a certain appeal to it as well.
there’s a good EconTalk podcast about Ramsey’s system. i believe the guest was megan mccardle but it’s also possible it was laura vanderkam. i forget. either way check out econtalk dot org
I like how he rails against banks. And credit card companies. He loves real estate. Wish I loved real estate.
He “made his fortune” as a slumlord. I called into his show in 2006 and he about cut me off when I said housing was in a massive bubble and major price declines were in store.
You should also believe everyone who is trying to sell you anything. To do otherwise is just un-American!
Especially if it’s on TeeVee!
Reading books is for communists.
“Reading books is for communists.”
which is why the government, via the patriot act, needs to protect us and keep tabs on our library check outs. if they don’t already check our amazon purchases and google downloads as well, i’d be surprised.
keep tabs on our library check outs
Not gonna happen. Librarians are freedom-loving commies, and the ALA (American Library Association) will fight ’til the end to protect your privacy.
Takes one to know one.
I hope this is true, but I suspect with some hacking the gov’t could get whatever info it needs. And governments have shown they are not above this. I don’t think it’s widespread by any means but the fact Congress told us they want to do it (via Patriot Act) should raise alarms.
Libraries don’t keep records of your previous check outs. Someone started to make noises about Homeland Security asking for records of who checked out certain books and the librarians had a fit and made sure their record systems wouldn’t keep the information once the book is returned.
University libraries might have that info on record longer, but regular public libraries just don’t. It is actually a little odd to go onto the MoCo on-line system and realize I can’t call up a list of books I have previously checked out or authors whose books I have borrowed in the past. Have to add a book to an Amazon wish list if I want to keep an electronic record of it or the author. Fortunately, you can access your Amazon lists at the library for reference.
The librarians have your back:
They are shilling heavily in our local market too. They’ve got the financial reporter doing the heavy lifting of buy, buy, buy, before it’s too late. He’s got to have the background to understand the truth. Man, it’s really sickening to see a grown man on such a tight leash. Every time I see him, my stomach rolls at his patheticness.
sickening to see a grown man on such a tight leash
Suzanne researched it.
It should be a crime to push anyone to buy real estate in upstate NY.
It is truly moribund up there. But I guess sheep exist to get sheared.
You pretend to know upstate but in reality, I don’t believe you know a thing about it. Even though you are quite correct about the economic conditions there.
Obviously upstate NY is quite large. I know Ithaca, Albany, and Syracuse a bit. I also have friends from the Buffalo area and they will flat out tell you that upstate NY is dead. Lastly, it’s astonishing how many people my age are originally from upstate NY down here because of jobs. Their friends back home in N Y state typically have lucky ducky jobs or are stay at home moms.
And I’ve driven through Hudson River valley enough to get an idea. I actually don’t consider that to be “upstate” but I consider it to be a longish commute to NYC, which is why it astonishes me RE prices are still so high in that area.
I go to LI a lot for family stuff, but Suffolk County (Quogue). I consider the elevated prices up there to be mainly a function of 2nd homes for Wall St types, so I never expect Hamptons prices to bear much resemblance to the larger reality of our economy.
The markets been on fire this could all be true My co-worker delayed and now his wife is on war path to buy. I looked on Zillow couldn’t beleive it !!
I told him to quit the company and move to Texas. I told him to buy last year when I did but nobody around here listens to me.
Now its too late its all going to go bad again
Do I have the four and a half years I need to get oldest through high school?
Then sell and bail again
Mariano Rajoy gave a televised address on Saturday in which he emphatically denied reports that he had personally benefited from a secret slush fund and pledged to provide “complete transparency” over his financial dealings.
Alfredo Perez Rubalcaba, the socialist opposition leader, has now called on Mr Rajoy to resign for the good of the country.
“Rather than the solution for this country, Rajoy has become yet another problem,” he said.
“He should give up his role as the head of the government and cede his place to another leader because he cannot tackle the very difficult situation confronting Spain.”
Detailed excerpts of accounting books that belonging to disgraced former Popular Party treasurer Luis Barcenas, who is separately under investigation after it emerged he had amassed 29m euros (£25 million) in a secret Swiss bank account, were published by left-leaning newspaper El Pais last week.
Alcohol sales slumped at Christmas as households slashed their spending, a survey has found.
Off-licence trade dropped 4 per cent in supermarkets and slightly more in smaller outlets.
The figures form part of a bigger picture of decline as volumes for the year were down 2.9 per cent.
The poor plebs what will they do without alcohol.
“Alcohol sales slumped at Christmas as households slashed their spending, a survey has found.”
I had no idea the situation in the U.K. was that dire!
That’s a shocker to me too. Because if there’s one thing the U.K. knows how to do, it’s drinking.
You’d think they would steal if necessary to get the cash to buy booze, wouldn’t you?
They’ll be a lot more Booze Cruises going on.
Booze cruise is a British colloquial term for a brief trip from Britain to France or Belgium with the intent of taking advantage of lower prices, and buying personal supplies of (especially) alcohol or tobacco in bulk quantities. Within limits, this is a legally acceptable process and should not be confused with smuggling.
The term is also used in other countries to refer to a pleasure outing on a ship or boat involving a significant amount of drinking, or an outing to purchase large amounts of alcohol in bulk for a party or outing.
Odd, I thought alcohol and cigarettes did better than usual during economic downturns, wars, and zombie invasions. Guess we all need to through out that stash of single bottles of scotch we’ve been saving as currency.
Apparently you need to have money around home even to buy alcohol, which is a problem when everyone is a homedebtor with negative equity. Who’d've thunk household budget constraints would matter so much?
“Sin” purchases keep up longer than larger purcahses. So if sales of electronics are down, people will still buy alcohol or other small luxuries. Also, alcohol in bottles and consumed at home is a lot cheaper than drinking in bars (if the amount consumed is the same). But the downgrade purchasing doesn’t last forever. If you gave up larger luxury purchases 3 years ago, then the next level of belt tightening will be whatever is left that you are still buying.
Gawd, that’s serious!
My parents talk about having people over for coffee and dessert only when they first married, which was in the mid 50s. No huge dinner parties like we have now. That was all they could afford. She said there was no alcohol served. The wedding dress she wore had already been worn by 2 other women in the family. This from a family where both fathers were fully employed during the Depression. I figured at some point we were heading back to that.
People like to romantize about the past and one income households, but in reality, most people were pretty poor and most households already had 2 people working.
On the other hand, the government, both local and federal, helped on many levels, from free immunizations to education grants. You know, socialist commie stuff that now costs money. A LOT of money.
I figured at some point we were heading back to that.
Yeah, but not until all the wealth has been harvested first. So we can truly start again with nothing.
Just saw steve bisciotti backing up a brinks truck with about 120 mil in it. Good thing he’s a good natured billionaire (bananaboy would say socialist) not a d-bag like the teabillie who owns the redskins. flacco raised his price from 70ish mil to over 110 mil just since mid november. Very bubble-y. Its ok, the rookie contract he just played out was a bargain.
There’s about to be a housing price surge in owing mills area. Elsewhere, i predict continued CRAAAAATERRRR-ing!!!1
“Good thing he’s a good natured billionaire (bananaboy would say socialist) not a d-bag like the teabillie who owns the redskins.”
Please remind bananaboy that you are posting from across the pond so that he realizes your perspective is formed from a safe distance away.
Bananaboy is in Europe?
In my pre-coffee torpor, I thought this was one of frankie’s posts…time to go back to bed I guess.
Interesting wsj article on how i.t. and nations are aligning, what china gains from it’s close control of its i.t. infrastructure, etc. Worth a read.
I forgot to point out… the Huawei angle has already been discussed elsewhere (60 minutes, for one example). But its important to note that this is Eric Schmit (CEO of Google) dishing on this stuff… interesting that he’s admitting the entanglements between IT and Gov’t that will threaten our liberties… I would’ve expect him to downplay the fears.
Please note the suggestion of a segregated internet in the future. Cyber espionage will force the hand of the government - zap the right database and the market flash crash will look like a rounding error. Eventually we will zoned into economic blocks. Wonder who will benefit from building and managing the portals?
Google has flourished because the internet has been open and, for the most part, free (ISP/Mobile providers being the exception). Google as a company was founded with the ideal of “Don’t be evil”. A closed, partitioned and segregated internet lends itself very well to government and corporate control and goes against everything Google has stood for. This shouldn’t surprise anyone…
“Google as a company was founded with the ideal of “Don’t be evil””
Founded like this, sure, but then they went public. I don’t believe Google (or any other business that needs to show profits) has especially strong interests to look out for our privacy rights, financial wellbeing, etc.
Nor should they, as they are a corporation.
I would argue that the only thing that matters to shareholders (and thus boards of directors) is growth and profitability, so in that I agree with you. Where I disagree is with the executive team.
It is up to the CEO and his senior managers to instill a moral corporate culture, which includes values like “Don’t be evil”. Unfortunately, too many senior executives exhibit sociopathic tendencies and are only concerned with self-preservation and wealth accumulation, so the only thing they concern themselves with is growth and profit at all costs, regardless of the morality of the strategy used.
Call me an idealist, but responsible corporatism (and through this, responsible capitalism) can be accomplished, and Google seems to be a good example to follow.
The Don’t be evil thing has never been official from google.
I think they’re overrated.
Comment by Bill in Los Angeles
“Most people do not look beyond the obvious. Home ownership is many traps in one. Emotional, financial, political to name a few. A few days ago I posted that most people who own homes or are paying for homes are sitting ducks for property tax increases. A renter with a one year lease can decide every year if he should move to another state. Emotional: everyone must build a nest and reproduce. My own neighborhood where I bought a brand new house - across the
street in an apartment complex was a meth lab - that was in the high desert of California. Years later a young colleague and his girlfriend
bought a new $200,000 house. Right away they hated it because a neighbor teenager rode his motorized razor up and down their street at
11pm. Why would you committ yourself to many years of living with rude neighbors by buying? Financial: I became far more financially
free by not being obligated to stay in one small community, by renting instead of owning.”
^ this. All of this.
To be fair, didn’t you just discuss looking at condos last month?
By the way, i posted this comment to make conversation, not as a swipe. I own a “rapidly depreciating shack” so I am morally compromised as it is.
Your rapidly depreciating shack owes you.
Dude check your coffee level. I think your comment pwned you.
‘Your rapidly depreciating shack owes you.’
Just had work done on my car. Depreciating asset it is. Just so I could keep it on the road legally…..safely…..for another year. I think it is fair to suggest a house is like a really big car without the wheels (most cases).
Except the losses on a house are much more massive. Especially at the current grossly inflated asking prices of resale housing.
And, you can live in your car and take a shower at the 24 hour gym.
I would rather not pay a landlord, and get a fixed price, and be able to have a place that suits me, and be able to pay down the principal and have something that could be sold.
I hate renting?
Buying is twice the cost of renting at current inflated asking prices of resale housing.
But eventually pay off the mortgage, early if you’re not an imbecile -
And all that money you repaid is irrecoverable.
We just renewed our lease for another six months, as we’ve been doing for the last three years. And (sorry coastal bubble renters) no rent increase. After throwing money away on rent we had so much money left over we picked up another pair of skis to add to the quiver. And looking forward to the renovated rooftop deck to grill out on this spring
I wasn’t being a hater, have fun grilling
Who’s hating? We loved skiing at Loveland yesterday, first day this season with lift #9 up to the Continental Divide open, under bluebird sky.
Had we flipped the wrong page in our Choose Your Own Adventure book some years back, we would still be in the Midwest paying the ex-squadette’s albatross mortgage and spending our weekends at Home Depot, Bed Bath & Beyond, and some restaurant ending in apostrophe s.
I rent my equipment when I go skiing.
“Choose your own adventure.”
I died. I always, ALWAYS died in those things, usually in some horrible way. It got to the point where I read the back of the book first to identify the Page Numbers of Death, and then read the book reverse engineering how to avoid the Death pages.
Goonsquad, you ever head up to Waterton Canyon for a run? I wax nostalgic about the Colorado Trail. Man, what an incredible trail.
We usually go to Mt Falcon, one of the Jefferson County Open Space parks, that is right near Red Rocks in Morrison. On the weekends we spend a lot of time in the Lost Creek Wilderness. Here, the Alpine Squad Task Force as seen on Saturday at about elevation 12,000′ in unseasonably snow-less conditions:
““Choose your own adventure.”
I died. I always, ALWAYS died in those things, usually in some horrible way. It got to the point where I read the back of the book first to identify the Page Numbers of Death, and then read the book reverse engineering how to avoid the Death pages.”
LOL! How we read those says a lot about us. I always read every choice.
Oh don’t feel bad. I threw away so much money on the mortgage compared to rent, that I gave my kitchen and entry hallway a quick face-lift and will be face-lifting my main bath piecemeal.
I don’t feel bad at all, I’m fully aware that if I don’t live in my house for ~20+ years, RAL will have been right and I would’ve been better off renting.
So RAL is right about my situation… for now. If HBB exists in another 18.5 yrs, I’ll have some ground to say it worked out.
I will say this about the conversation, the older I get the less I care about comfort in retirement. I work w/elderly people. They slow down. They get sick. Some avoid going out at all because they have such a fear of falling. They think they’re going to do things but then often can’t. At 50 I have already lost a frightening number of friends and classmates, too many w/little or no warning at all.
If I lived a sparse lifestyle or only worked all day which I did in the past, I churned huge amounts of account work, it would kill me, because at some point you’ve gotta have something to show for your life besides earning and saving money. Now, I’d respect what makes any one of you feel fulfilled for most assuredly, for each one of us, it is different. For me it’s experiences w/valued friends and loved ones. I’m not going to do some of these things when we retire because much of what it takes to have these experiences the way I want to enjoy them will be gone (hearing, vision, energy level). That’s how I feel in my 50s. Certainly it would be a different approach in my 30s. I’d still be that workohaulic. We all have to decide what’s best for us and our own situation. There is no one size fits all.
I can only speak for myself but the reason I work hard now is my underlying assumption that I won’t want to work very hard when I am 50. I will work, I’m sure, but will I be passionate about it anymore? Not sure. And perhaps,due to the economy or other events, the same opportunities won’t exist. I doubt a “Mad Max” scenario because everyone will lose since our modern economy depends on a well-ordered supply chain and medium of exchange. But surplus workers due to automation of jobs could result in even “knowledge workers” taking it on the chin.
Saving money isn’t about the money, it’s about the options.
Our R22 HVAC system needs to be replaced this spring with an R410 system. Another $5k I won’t ever see again.
at some point you’ve gotta have something to show for your life besides earning and saving money
Some point shouldn’t be the future, either. Any one of us could contract a fatal disease, get hit by a bus, or leave this mortal coil without a moment’s notice.
Plan for the future, but live your life like it might end tomorrow.
Just renewed my Los Angeles lease…today. It’s an increase, $1240, which is up from $1100. Over 10% increase. Ten years ago same amenities in same complex (different building) at $1,000.
BUT (and as Pee Wee said, “and a BIG BUT,”) I have one month penalty for breaking the lease and the last month to pay. So if I’m fired, I’m out at most 2 months. If I find another contract and am allowed two weeks notice, I am out at most a month and a half.
Other apartments in this area are 12 month leases with no exception. So this is essentially a 2 month lease.
My taxes are going up for the payday two fridays from now. So I feel the squeeze. But..I am a free man. I love it!
New York Times - In Hard Economy for All Ages, Older Isn’t Better … It’s Brutal:
“In the current listless economy, every generation has a claim to having been most injured. But the Labor Department’s latest jobs snapshot and other recent data reports present a strong case for crowning baby boomers as the greatest victims of the recession and its grim aftermath.
Their retirement savings and home values fell sharply at the worst possible time: just before they needed to cash out. They are supporting both aged parents and unemployed young-adult children, earning them the inauspicious nickname “Generation Squeeze.”
New research suggests that they may die sooner, because their health, income security and mental well-being were battered by recession at a crucial time in their lives. A recent study by economists at Wellesley College found that people who lost their jobs in the few years before becoming eligible for Social Security lost up to three years from their life expectancy, largely because they no longer had access to affordable health care.
Unemployment rates for Americans nearing retirement are far lower than those for young people, who are recently out of school, with fewer skills and a shorter work history. But once out of a job, older workers have a much harder time finding another one. Over the last year, the average duration of unemployment for older people was 53 weeks, compared with 19 weeks for teenagers, according to the Labor Department’s jobs report released on Friday.
The lengthy process is partly because older workers are more likely to have been laid off from industries that are downsizing, like manufacturing. Compared with the rest of the population, older people are also more likely to own their own homes and be less mobile than renters, who can move to new job markets.
In a survey by the center of older workers who were laid off during the recession, just one in six had found another job, and half of that group had accepted pay cuts. Fourteen percent of the re-employed said the pay in their new job was less than half what they earned in their previous job.”
“New research suggests that they may die sooner, because their health, income security and mental well-being were battered by recession at a crucial time in their lives.”
Here is a scenario which you heard first here: The Great Recession leads to evolution of American society by jerks.
1. Jobless, debt-strapped young folks don’t form households or start families at anywhere near the normal rate.
2. Debt-strapped, pensionless seniors die off at much younger and faster than expected.
3. Barring a massive immigration increase, the American population in 2030 turns out to be much smaller than demographers had projected, resulting in plenty of tract homes around for anyone who wants one.
4. The mid-term shrinkage in America’s population leads to more rapid expansion than average by the mid-21st century, both due to a 2nd Baby Boom and faster immigration. The complexion of American society changes overnight in the process (remember the 1960s?).
I also expect to read about more heavily-armed old coots shooting twenty-somethings by mistake due to a lethal mix of bitterness, penury, and senility.
Georgia man, 69, accused of fatally shooting 22-year-old who drove into wrong driveway
By Crimesider Staff
Topics Daily Blotter
Phillip Sailors / Gwinnett County jail
(CBS/AP) LILBURN, Ga. - A 69-year-old suburban Atlanta man faces a murder charge after authorities say he shot and killed a 22-year-old man who had mistakenly driven into his driveway.
An arrest warrant states that Rodrigo Abad Diaz of Duluth, Ga., was fatally shot in the head Saturday as he tried to drive away from Phillip Sailors’ home in Lilburn, northeast of Atlanta.
According to Diaz’s friends, who were in the vehicle at the time of the incident, the 22-year-old had received incorrect directions from a GPS device which led him to Sailors’ driveway, the Atlantic Journal-Constitution reports. They were in the area to pick up a friend.
Sailors’ attorney, Michael Puglise, tells The Atlanta Journal-Constitution that he was home with his wife late at night, and assumed the young man arrived to commit a home invasion. Puglise says Sailors was defending his home and maintains his innocence.
Gwinnett County Jail records show that Sailors was being held on a murder charge.
A lot of missing information in that story. Hard to believe the guy just turned around in the driveway and got shot. There must have been some sort of “engagement” not reported here.
“They were in the area to pick up a friend.”
Uh-huh. I don’t see anything in the story about the “friend”, who he or she is or where they might live.
The Atlanta area is a major hub for drug trafficking.
Lol, I just read the AJC story at the link. More information, but twice as confusing.
Yes. There have been a lot of home invasions in the area and they were still sitting in the driveway after he went into the driveway. Still looks like excessive force but I would like to see a real test of the GPS device before I call this one.
There’s a number of things I’d like clarified. For example:
“The couple, accompanied by two other friends, had pulled into Sailors’ driveway by mistake, thinking it was the home of another friend. The group had planned to go ice skating.”
Like I said, where’s the “friend” and where do they live? Where is the rink where they were going to go “ice-skating”?
“The Colombia native who attended Gwinnett Tech and worked at his brother’s cargo shipping business”
But, the “Colombia native” was earlier identified as a “Duluth man”. Which is it?
“Rebolledo said she was in love with Diaz, her boyfriend of seven months. Her father, Gregory Rebolledo, said Diaz was more responsible than most his age, eschewing gangs and partying and rarely drinking alcohol.”
They’re always saints. Always. Just because he wasn’t some tattooed MS-13 grunt terrorizing neighborhoods, doesn’t mean he wasn’t involved in a more sophisticated operation. Like “cargo shipping”.
“Puglise dismissed suggestions by some who’ve followed the case that Diaz’s race may have been a factor.”
LOL, look at the guy’s photo. He was white!!!!!!!!!!
“Sailors was wary when he spotted two people in his driveway getting into their car.”
Definitely needs more clarification. Had the two people gotten out and were getting back in? Or were they loitering and were being picked up by these folks? If so, where did they come from? In one story, there are three people. In this one, four.
“But the police report indicates that the vehicle was leaving Sailors’ property when Diaz was shot.”
Like to know more about that police report. Police these days don’t want to get “Trayvonned”. Can’t say as I blame them.
Normally I’d say “stay tuned”, but I have a feeling that this one’s going to quietly go away.
Hey palmetto, great observation on how the MSM sugar coats the non-COEXISTyness of reality. Another favorite phrase they use is “turning his life around”, to distance an alleged “victim” from their history of thuggery when reporting on their violent ending.
Also suspicious is the cell phone, which was readily used to call 911, but not, apparently, to contact the “friend” they were going to pick up.
The reporting on this story majorly stinks.
LOL, I just read another story on this where the vic was identified as a “Lilburn motorist”.
ROTFLMAO! Now that’s some serious PC mental gyrations there!
plenty of tract homes around for anyone who wants one.
Yes, and all of them will have been lived in for decades by near-destitute elderly aging in place. In other words, the houses will be in dire need of updates and repair, if not outright tearing down.
You point out one of many reasons why I don’t want to own one, as there is a good chance home values in many parts of the U.S. will be in steep future decline due to widespread blight of entire communities.
I’m not just painting a bleak picture off the top of my head, but rather speaking from direct and vicarious experience:
1. I recall as a child the look of horror on my grandma’s face when we showed her a picture in our local paper of her childhood home burning to the ground.
2. My parents live in a community where surrounding blight has dragged down their property value by $10Ks within the past few years.
3. Do you recall when I posted the story about Mitt Romney’s childhood home in Detroit getting bulldozed?
If you don’t lock your life savings into the value of one house in one community, you can avoid these risks.
So here you grew up in this 5,500 square foot home in a very lovely neighborhood - and with all your vast wealth you couldn’t find it appropriate to donate some money to renovate your childhood home???? Really???? How pathetic is that!!!! You are so out of touch with the working class Americans and unemployed people in this country. You have no clue what normal working people go through every day - living paycheck to pay check - hoping they can pay their bills from one check to the next and feed their families.
People in this country deserve more than lip service from all the weatlthy politicians. Not to mention that all the big businesses in this country who have their cars, etc., manufactured outside of the USA just so they can save money because they don’t want to pay Americans a better wage here - should be penalized big time for doing this because if they kept their business here then more Americans could be working and supporting their families - and also supporting America’s economy. Wake up America - let’s give notice that we are mad as hell and aren’t going to take it any more!!!!
Deterioration is a very legitimate reason for not buying a home. But rentals deteriorate too, and who will pay for those repairs? By the time my house falls in, I’m hoping it will be paid off and I’lla tleast get a land value out of it. I don’t expect DC to go the way of Destroit.
I remember Romney’s house being bulldozed, and I was surprised that he didn’t put up a half-mil of chump change into saving it as a future “boyhood home of President Mitt” pilgrimage site/tax writeoff.
“I don’t expect DC to go the way of Destroit.”
Maybe not. But stranger things have happened. I think Rome would be the model for DC. A second rate Rome, with second rate ruins. But, I think real estate has held its value in Rome, lol.
““I don’t expect DC to go the way of Destroit.”
It *could* happen, but I don’t think anyone reading here will be around long enough to see it.
“Could” happen? It *will* happen….It’s happened in large city after large city…. yes…. just like Detroit, Cinncinati, Columbus, Buffalo, Philly, Newark, Albany, Hartford, Springfield, etc etc….. and it occurred quite rapidly too.
What’s a lot worth in any one of those cities? A couple thousand.
property values could drop, but DC becoming detroit? seems unlikely. at least in our lifetimes.
if it does happen, it means the U.S. Empire really has fallen and probably taken NYC, SF, and every other decent place with it. it would take a collapse of the government, of banks, etc.
in this case, screw the US, time to move to Auckland or Wellington but they probably won’t want us
SF and DC’s price declines will occur regardless of the countries fortunes or misfortunes.
price declines sure. becoming detroit? no.
detroit isn’t a s***hole because of the cheap housing, it’s a s***hole because it doesn’t provide essential services, its neighborhoods are decayed and unsafe, and most of its jobs have long since left. it also lacks good human capital and doesn’t have the educational system to create any.
Housing prices falling to dramatically lower levels equals Detroit?
Joe- I’m not sure it’s appropriate to refer to SF as a “decent place”. All the signs of decline are readily apparent on visiting The City. The physical infrastructure is falling apart, the population of poor/homeless has expladed, and the middle class has pretty much dissapeared for cheaper/more family-friendly locales. Sad really.
“price declines sure. becoming detroit? no.”
Could actually be even worse than detroit, if some pissed off enemy decides they should do the world a favor by vaporizing it.
It already went there. Check out the history of the 1960s DC riots some day when you have spare time on your hands.
the signs of decline are readily apparent on visiting The City
“Joe- I’m not sure it’s appropriate to refer to SF as a “decent place”.”
Haven’t been to SF since college (and I mostly spend time in Berkeley anyway–interesting place). You could be right. It’s a beautiful city but people pay for it.
The last time I was in CA I was in San Diego and Carlsbad/Oceanside (my brother was at Pendleton). The wheels were falling off in SD. The nice areas were ridiculously overpriced so people were paying big money for very mediocre areas. SD also does not seem to have any of the network effects you see in areas with real downtowns. The place is very sprawl-y.
When was the last time you were in Detroit? You say that there are good, safe areas in Baltimore, even though it’s famous for tis ghettoes, crime, gangs, etc. Maybe there are some nice sections of Detroit, too.
it also lacks good human capital and doesn’t have the educational system to create any.
soylent green is people.
“But rentals deteriorate too, and who will pay for those repairs?”
We have a good division of repair costs going with our landlords.
We handle minor, inexpensive repairs. They handle the big-ticket items, like replacing roofs and garage doors and paying the exterminator when we get infested with noxious insects.
And if we ever have a really big repair need which the landlord is unwilling to cover, we have the option to move out at the end of our next annual lease.
I’m not sure it’s appropriate to refer to SF as a “decent place”
Then you haven’t spent any real time here. It might not be your cup of tea, but there’s a reason why millions visit here every year, why it is a destination for young people looking to relocate, and why SF is often rated highly for quality of life, best food, beauty, outdoor recreation, etc.
My biggest gripe is the cost of living, esp. housing. But other than that, it’s an awesome place.
If you don’t like city living (or gays and Asians and Mexicans or fog), then you won’t like it here. But like any other major city, there are slums, grime, crime, etc. Even Toronto, which is spic and span, has its grit.
You better believe plenty of us have spent time there. FPSS even said the streets of Calcutta are nicer than the slum that is SF.
“1. Jobless, debt-strapped young folks don’t form households or start families at anywhere near the normal rate.”
I don’t buy this. As Alenna pointed out the other day and I’ve said many times, the most educated in our society have the lowest fertility rate. Having 2 or more children is something Bobos/youngish professionals simply don’t do.
The people having 2, 3, 4 (etc) kids in our society are the lower socioeconomic rungs plus the religious people. They may have less than before, but they’ll still out-reproduce the high earners.
Yes, there are exceptions, CEOs who have 5 kids, etc. Lots of Mormons like this. But, by and large, people at the top want to put a lot of resources into their kids and have more to lose (high income means you pay for everything, don’t get any gov’t support for your kids, get less college aid, etc.)
Tuition at the best colleges is approaching 50k/yr. That’s a serious cramp on how many kids the “producers” will be willing to have. “Producers”, as a class, will not be sending their kids to some random state school or religious school. (Obvious exception is Mormons at BYU, but that’s an exception that proves the rule.)
The real “big picture” about U.S. demographics is that the people we’d want to have 2+ kids aren’t doing it. And the people at the bottom aren’t nearly as affected by having children, because the children aren’t cramping their medical/law/business career *and* the gov’t will pay for them to take care of kids. Idiocracy isn’t a theory, it has been in motion for 10-15 yrs, perhaps more.
“Having 2 or more children is something Bobos/youngish professionals simply don’t do.”
We did it and I have plenty of counterexamples in my immediate circle, all of them either professionally successful or LDS.
However, I postponed getting married and starting a family until after the decade of economic hardship that was the 1980s.
then you say:
“However, I postponed getting married and starting a family until after the decade of economic hardship that was the 1980s.”
i am not sure you are who he is talking about.
Men can put off having kids for a long time. Women, not so much.
And both can choose to put it off forever.
The happiest people we know are DINKs
My co-worker tells me she drops $800/month on her son’s private kindergarten. Not much compared to what coastal elitists pay, but $800/month that could fatten up a savings account, and/or buy a lot of FUN.
LOL @ private schools, especially for K-8 (and even most 9-12). What percent of private schools confer any real advantage? Very few.
Most private K-12 schools have science teachers who are woefully underequipped to teach their subject; very few have a master’s degree and most of them have a B.S. type of undergrad degree, which can become outdated over the course of a decade or so. And this doesn’t even get into the inadequate facilities. The rigor is just not there in general.
And then you have the private religious schools that “teach the controversy” or teach “ID”. ‘Tis a joke.
“Men can put off having kids for a long time. Women, not so much.”
A man can also marry a younger woman (like I did).
“A man can also marry a younger woman (like I did).”
‘The real “big picture” about U.S. demographics is that the people we’d want to have 2+ kids aren’t doing it.’
This is what happens when you skew policy to favor the poor and the wealthy at the expense of middle-class families.
The fertility rate for women with grad degrees is very low, something like 1.3.
That’s a Japan type level, well below 2.1 (replacement rate for population stability).
The fact is, the higher up on the continuum of education/career success you go, the less kids you get. Of course there are counterexamples, but the plural of anecdote is not data. The number simply show that the less educated and less employed/employable someone is, the *more* children they will have.
Think of a random stay at home wife… what reason does she have to *not* have a bunch of kids? What else is she going to do? I’m not saying she should have a lot of kids (there should be budget constraints, ideally) but how does someone like that fill their time?
Then you have the religious people… much more likely to have multiple kids.
Part of this is also generational… all these trends seem to be accelerating. Women outnumber men in many formerly male-dominated professional schools these days. Including medicine and law. This was not the case in the 80s or 90s. In fact, females were a very underrepresented minority in both those fields.
I guess this is a problem if you believe that the children of the wealthy are born more intelligent than the children of the poor rather than simply born being more rich.
Yeah, I don’t think so, but who knows?
If you disagree with wealth breeds intelligence, then the simple solution is to more equitably redistribute income and the intelligence of the US will be just fine. Funny how so many problems with the US could be fixed by that.
‘the simple solution is to more equitably redistribute income’
I talked about that some this weekend. Think about it; the government doesn’t take rich people’s money and give it to you or me. They only keep non-rich people from accumulating wealth. And when you consider the interest on government debt we are incurring, it’s a transfer to super rich people, not the other way around.
“I guess this is a problem if you believe that the children of the wealthy are born more intelligent than the children of the poor rather than simply born being more rich.”
I’m not saying that at all. It’s a problem because more kids are being born to people who are in a worse position to raise the kids responsibly. Of course you can have a high school drop out with a lucky ducky retail job be a great parent to 3 or 4 kids. I guess it is theoretically possible.
But, obviously this person will need gov’t assistance and some form of child care help.
There are also issues of language, culture, and responsibility. Language acquisition is extremely important to a child’s success much later in life. This happens primarily in the home, with caretakers. It’s been shown repeatedly that adults who don’t read do a very poor job of raising kids who can converse and read effectively. And from there, it all snowballs. Same thing with culture and responsibility.
The intelligence argument really isn’t that necessary. I’m sure it plays a part, I don’t think Murray & Hernstein have been entirely discredited. However, even an intelligent kid reared by parents with limited resources is up against great odds. And *that*, my friend, is the story of most of today’s children.
The intelligence argument really isn’t that necessary. I’m sure it plays a part, I don’t think Murray & Hernstein have been entirely discredited.
Far from it. The Economist has an article this week about how we should follow the Nordic model. However, as the world runs more and more on intellectual capital, countries such as Sweden have an advantage due to its high average IQ. The immigrants to Sweden do not have that advantage so despite having the same access to good schools etc, they do not perform as well. We should continue to protect children from lead exposure. poor diet etc, which do impact IQ but to expect the same result across all populations is PC run wild and an example how many on the left can act like fundies when their religion conflicts with the facts.
Yup. As our grad school econ prof who is a bankster at the Cleveland Federal Reserve explained to us, for the Lucky Ducks, the opportunity cost of having that third, fourth, fifth child is so low, they may as well keep on breeding them regardless of the consequences.
that story is so chock full of stupid that I don’t know what I’m supposed to take away.
I know I’m going to get accused of insensitivity, but the 55-65ish people in this article could’ve put away some money during boom times, could’ve paid down all their debts during the middle of their working careers, and should really not still be having significant mortgage balance.
I bet many/most of them operated under the assumptions (that do NOT match historical realities) that:
1. houses always go up in “value”, hence no need to pay down the mortgage,
2. I’m a special snowflake, so of course I will work until age 65 or 67, have no major health issues, etc.
3. my skills are unique, no need to update them or build a network,
4. my home has “gone up in value” so of course I should refi or “trade up” to a mcmansion in the exurbs,
5. no need to pay off credit card debt, i can always just pay a fee and move it to a 0% interest-for-12-months deal,
6. my kids will do great so of course they’ll happilly support me in old age, since they’ll have easy 9-to-5 jobs with great job security and pay.
These assumptions were bolstered by media portrayals of “affluent baby boomers” retiring in style thanks to a booming economy in the early 00’s. All those commercials about retiring couples leaving their corporate jobs to start vinyards.
“Displaced boomers also believe they are victims of age discrimination, because employers can easily find a young, energetic worker who will accept lower pay and who can potentially stick around for decades rather than a few years.
“When you’re older, they just see gray hair and they write you off,” said Arynita Armstrong, 60, of Willis, Tex. She has been looking for work for five years since losing her job at a mortgage company. “They’re afraid to hire you, because they think you’re a health risk. You know, you might make their premiums go up. They think it’ll cost more money to invest in training you than it’s worth it because you might retire in five years. ”
I hate to belabor the point, but these “assumptions” the older worker is complaining re: health and training costs about are largely true. The age and health issues of your employees *do* change the costs for the entire company, particularly any company with less than a few hundred people. It shouldn’t be this way (single payer can be done very smartly) but it is. And companies need to operate in the real world of dollars and cents. Mittens lost the election but American capitalism is still very Mitten-y.
“…but the 55-65ish people in this article could’ve put away some money during boom times, could’ve paid down all their debts during the middle of their working careers, and should really not still be having significant mortgage balance.”
There have been 5 recession over the last 35 years. There have been millions of jobs sent overseas. There was so much turmoil over the last 30 years that unless you were lucky or in the top 20%, no strategy was good enough to leave anyone unscathed.
Boom times? Boom times lasted about 6 years. Just enough time to get out of the hole from the last recession before going right back in to another one.
Had you told anyone 30 years that there would be a recession almost every 6 years, you would have been thought a complete wacko.
Don’t get me started on REAL inflation and wages.
Yup. And as the squad correctly predicts, it’s gonna get worse, and then it’s gonna get more worse
Welcome to the recoveryless recovery.
The future belongs to Lucky Ducky.
I don’t think that that is the case. The decade of the 1970s had couple of pretty miserable recessions, along with a lot of inflation. Then, in the early 1980s, we had the worst recession since the Great Depression, and unemployment got close to 11% at the end of 1982.
The real problem is that people don’t want hear the truth. Imagine a person who is 30 or 35 years old and has an income that can pay for a middle class standard of living - nice house, nice car, vacations. Imagine telling that person that he needs to do is save at least 20% of his income and live a sort of working class life with all of the necessities of life, but few luxuries. Then tell that person that he needs to do this because there’s a decent change that a recession will come along when he’s between the ages of 55 and 65 and if that happens he’ll probably be out of work for a long time and then only find a job at a much reduced salary.
It’s just not something that your typical American wants to hear.
But in an economy that is 70% consumer spending, it will never happen. And most of the sheeple are so lulled into complacency by TeeVee and advertising they can’t really think much beyond their next bag of cheez doodles or can of Duff.
The real problem is that people don’t want hear the truth. Imagine a person who is 30 or 35 years old and has an income that can pay for a middle class standard of living - nice house, nice car, vacations. Imagine telling that person that he needs to do is save at least 20% of his income and live a sort of working class life with all of the necessities of life, but few luxuries.
Yeah, that was my big epiphany a few years ago. Even though I’m an engineer with in demand skills and an MBA making “good” money, I can’t live the middle class lifestyle without going broke. Which means that either my peers who ARE living well are slowly going broke, or have a source of money in addition to their incomes. I didn’t understand that 10 years ago.
We didn’t understand until we found this blog that people were taking on debt to live so far ahead of us. Those years were so weird. I remember feeling like we were in some sort of crazy dream. We were within a few years of paying off our house, a nice house on a really comfortable lot, and the vehicles were almost paid off too. This at 42 years old. But even though the income was not bad at all we probably looked like paupers compared to the rest of the community. And believe me, we paid for that.
“Yeah, that was my big epiphany a few years ago. Even though I’m an engineer with in demand skills and an MBA making “good” money, I can’t live the middle class lifestyle without going broke.”
+1 This Civil Engineer sensed the debt/income disconnect in California during the “dotcom” boom, so it was off to flyover country. Second “shining” occurred around the time Bear Stearns “fell down and couldn’t get up.” Time to cut the fun and start making double and triple mortgage payments. Debt free and never going back.
Anyone who thinks this is wacko needs to read up on the business cycle.
The real history over the last 150yrs: the typical expansion has lasted on the order of 1.5 yrs; the typical contraction has lasted on the order of 3.5 yrs.
Put the two together, and what do you get? Yep, a 5-year cycle.
The quoted “5 recession[s] over the last 35 years” suggests a slightly longer-than-average cycle-time.
The New America …..Well the kids move back in with moms paid off house, work 2 lucky ducky jobs wait the 5 years on asset transfers…and then get mom into a nursing home….and stay in the home since no place else is any better…..why pay rent somewhere else.
. my kids will do great so of course they’ll happilly support me in old age, since they’ll have easy 9-to-5 jobs with great job security and pay.
Or maybe all that money they put away over the years got siphoned off in the crash. Maybe they suffered catastrophic medical events. Maybe a family member was falsely arrested. Maybe Mom and Dad both needed skilled nursing. Maybe they mis-timed the real estate market. Maybe maybe maybe.
Not everyone was hauling in money during the “boom years”. Relative wages dropped for that entire 30 year period.
A lot of what people think of as the 80’s was hype, smoke and mirrors pushed by a complacent media. For every Gordon Gekko or IT tycoon, there were thousands of factory workers, farmers, mom and pops who got hammered. And I don’t think people “assumed” as much as you seem to think they do. I’d argue that a lot of stupid spending was a function of desperation, not optimism about the future. I.E.; “If I don’t buy it now, I’ll never get another chance”.
Welcome to the last 30 years.
And the next 100
“Fourteen percent of the re-employed said the pay in their new job was less than half what they earned in their previous job.”
This implies that at least 14% were making more than twice minimum wage. Other numbers I’ve heard are almost all “new jobs” are minimum wage lucky ducky jobs. Can’t decide if 14% seems too high or too low. It is an amazing display of downward mobility. They’ll get angry sooner or later, the riots will be interesting to watch.
A factory I worked at had been re-organized just a few years before I worked there. All the old itmers had been “re-hired” and their wages frozen… for 6+ years.
Many of the newer hires told stories of making up to 30% LESS than they were making 10 years ago at another jobs.
Goon predicts another 100 years, but I’m with you. The cities will burn. Very likely within the next 20 years. I remember the riots of the 1960s.
The cities will burn
And while the lower nine tenths of the 1% fight over who gets the last lifeboats, the 0.1% shall remain immune to the chaos and violence. The rest of you can all just drop dead for all they care
In fact it would be kind of nice if those who don’t make stuff the 0.1% want would just hurry up about it.
the 0.1% shall remain immune to the chaos and violence.
Well, maybe not all of them….
Missing Irish property developer Kevin McGeever, who was found wandering at the side of a rural road, was mutilated and had an insult carved across his forehead.
Mr McGeever, who is currently in hospital, has told gardai he was abducted eight months ago by armed men but he cannot recall what happened to him after that.
Read more: http://www.belfasttelegraph.co.uk/news/local-national/republic-of-ireland/missing-irish-developer-found-wandering-on-road-had-insult-carved-in-forehead-16268743.html#ixzz2Jz1T74p6
In a closed system, there would be periods of time where labor had the upper hand and periods of time where capital, had the upper hand. However, in a system where labor shortages are very rare and labor surpluses are engineered with excessive immigation both legal and illegal and cheap capital from the Fed displacing workers, the system always favors the .02%. Increase wages to levels seen in ND and cut off the cheap credit to the .02% and the old America reappears and the Social Security system is solvent due to higher tax payments into the system and better returns on the trust fund.
The Times got it wrong. It has always been the case that those who lose jobs in recessions in late middle age have problems. That isn’t the right comparision.
When the early boomers were in their 20s, they were better off on average than those who are in their 20s today. And when those who are in their 20s today hit a recession in late middle age perhaps 30 years down the line, they will be worse off than the Baby Boomers are today.
That’s been the direction of things for 40 years.
You got that right.
And this point is lost on some people when they discuss Social Security. Yes, the system is built like a ponzi scheme but it could be a ponzi scheme that could have paid out for a lot longer time that it will. First, by keeping interest rates artificially low for decades, we robbed the trust fund. Blame Greenspan and the helicopter Ben for that. Additionally, while people concentrate on the number of workers per people on social security, they ignore what falling real wages has done to the system.
A person making $17 an hour is paying into the SS system twice what a person making $8.50 is paying. Thus, the low wage workers of today, have a difficult time paying for people that made better wages during their lifetimes. Just think if what is going on in ND was happening across the rest of the U.S, and it would be happening without all the immigration. In a country where Walmart paid $17 an hour and interest rates were normal, the social security system would be solvent despite the demographic changes.
Sorry, I thought this post was lost. But my second post made a slightly different point.
“That’s been the direction of things for 40 years.”
+1 Agree with you completely.
And today we are devouring our young energetic families by saddling them with $80k educations and $450k spec homes, so those now in their fifties can forget about a retirement because those younger families who would be working to make it happen will be finished.
“Their retirement savings and home values fell sharply at the worst possible time: just before they needed to cash out.”
+1 Cash-flow is what’s needed.
The alleged electricity outage in New Orleans was an intentional ploy to sell more ad time during the Souper Bowl.
And what did we learn from the four hour long commercial fest also know as the Souper Bowl? White males are crossdressers (Doritos) and bumbling incompetents (Century 21). If the corporate media and their coastal elitist adverstisers in New York City and Los Angeles hate white males so much, why should they expect them to buy their products?
Costly electrical problem indeed, if new Jersey meadowlands turns out to be a good site next year, new orleans is going to have to bid lower to get the super bowl in the future.
Who wants to go to Jersey for the Super Bowl?
Denver is going to bid on hosting the Souper Bowl. The stadium does NOT have a roof. Bring your parka, you might need it.
Actually, I thought the coastal elitist ad campaigns hated everybody, not just white males. People of color didn’t do so well (voodoo and reggae). I saw maybe one regular-looking woman in the entire lineup (Amy Poehler in the Best Buy ad). And I didn’t see any Latinos/Hispanics at all (strange given the results of the elections). Maybe I missed it..
Check out this NBC online vote for favorite Superbowl ads:
Guess which ads are getting the votes? Not the ones with the carefully posed long-legged anorexic 18-year-olds waifs. Nope, it was the down-home farmers and horse trainers. I couldn’t find any other good online polls, but comments on CBS, FOX, and Yahoo also praised the horses and farmers. I guess we learned that audiences are sick of edgy sexy citified yuppified “humor.”
Yes, we did note the Dodge truck commercial targeted toward “Real Americans” (racist dog whistle) amid all the other multiculti propaganda.
Dio consulted on that commercial when they were fine-tuning their dog whistle.
Admittedly it was a throwback to the mythical simpler time. But how would you make it less “racist?” Midwest grain farmers pretty much ARE white.
I suppose it would be interesting to do a similar “And so god made a farmer” commercial featuring Hispanic migrant tomato pickers, southern tobacco workers breaking their backs, Amish pruning apple trees in Pennsylvania, a medical Mary Jane greenhouse somewhere outside Boulder, turkey slaughter in Alaska, Asians growing mini “perfect” vegetables for high-end Japanese restaurants, African Americans shoveling chicken poop ont the Eastern Shore in MD, 6-year-old kids harvesting coffee beans on the edge of a slash-and-burn forest in Central America, middle-age women growing vegetables for the farmer’s market, genetic scientists in the lab, and throw in a Monsanto lawyer for good measure. Betcha that Dodge wouldn’t DARE.
The average pickup driver works in a cube farm, but I suppose that showing a guy heading home in his pristine, unscratched Dodge Ram after a hard day’s work in his cubicle doesn’t come across quite as manly as the commercials where the burly voiced guy tells you how the truck is tough while a ton of gravel is dropped into the bed.
Even tougher - Dodge Ramses
“The average pickup driver works in a cube farm”
There are real farmers in Iowa and Oklahoma that have side jobs in cube farms.
I suppose. But I’ll bet most pick up drivers in LA have never seen a farm.
That was inspired, oxy. Brava!
Also worth noting was the Bud Light “lucky chair” commercial. In which the perfectly COEXISTy roommates seek the services of the Magic Negro (or in this example, Negress) for blessings. Read more about that here:
+1 Great find!
A sign of apocalypse? On Saturday, there was a power outage in a real football match between Fulham and ManU.
Coincidence….I think not…..
I think one of the Century 21 agents was black.
The grotesque spectacle of waste that was Beyonce sucked the grid dry. Let that be a lesson. I predict that yesterday marked the apex of the Superbowl as an American institution; it’s all increasingly irrelevant from here on out.
Our country needs some new heroes. (And some new ad agencies.)
“I predict that yesterday marked the apex of the Superbowl as an American institution”
I agree. Last year was probably the apex, actually. Kinda like the bubble, which had started pretty much reached its limit in summer/fall of 2005, but sorta went into a freeze before the real decline hit.
Football may once have been considered the “American pastime” (or was that baseball?).
Soccer is the global sport of choice.
And, it wasn’t lost on me that Beyonce’s “show” was really nothing more than a Madonna redux. SSDD.
I predict that yesterday marked the apex of the Superbowl as an American institution…
You heard it here first! The Superbole has offcially “jumped the shark”
Michael Lewis wonders why America still does not “get it” when it comes to Goldman Sachs.
Good essay in the new republic.
Goldman has done a relatively better job of staying out from under the radar screen of MSM glare in recent daze than during the height of the Great Recession. Not so much its rival, JPMorgan.
The Real Story Behind JPMorgan’s Infamous “Whale” Trade
By Shah Gilani, Capital Wave Strategist, Money Morning
February 3, 2013
Here’s an insight for you - along with a trademark indictment, of course.
Take it with a grain of salt, because it’s just an educated guess on my part.
It’s about how the infamous London Whale may have been harpooned by spawn from his own pod.
For those who haven’t heard, the London Whale is one of the latest traders to make the headlines. Bruno Iksil was the top trader at JPMorgan Chase’s Chief Investment Office (CIO) in London.
He got the nickname “the London Whale” for the outsized bets he became known for.
But this is no fish story…
Last year JP Morgan’s Chief Investment Office bet the house. They invested untold billions of dollars of the bank’s excess money - mostly depositors’ dough it hadn’t lent out - by putting on a whale-sized trade in credit derivatives.
The bank’s loss on that trade is over $6.2 billion… and counting.
Now, it appears that, besides the lucky hedge funds on the other side of the Whale’s bleeding bet, there were JPMorgan traders elsewhere in the bank betting against the Whale’s position.
According to Reuters on Tuesday, “The U.S. Senate Permanent Committee on Investigations, which launched an inquiry into the trading loss last fall, is looking into the how different divisions of the bank wound up on opposite sides of the same trade, said one of the people familiar with the matter.”
The people don’t “get it” because
1. The concepts have, like, MATH.
2. People can’t do much about it except elect politicians, who are then outvoted, filibustered, or bought off.
The most glaring deficit in American education, IMHO. The fact that there are a lot of college educated people out there that can’t take 20% of 200 without a calculator (can’t even tell you “about” how much it is).
Percentages are so fundamentally important to society today and yet they seem to totally baffle 80% of the population.
IMHO, with the exception of the very highest track (gifted), high schools should drop pre-calc and calc as “normal” classes that all students have to take. They should replace them with a curriculum more like this:
9th - Algebra
10th - Geometry
11th - Practical math (using algebra and geometry in everyday situations)
12th - Personal finance (mortgages, time value of money, stock market concepts, 401K planning, etc)
Yes, pre-calc and calc “teach you to think” in a certain manner. However, for the VAST majority of the population, figuring out the area under a curve is simply not useful; I’ve NEVER used it since leaving college, and I work in a highly technical/math driven field.
What do I use? Percentages. Margin calculations. Spreadsheets to determine very complex cost calculations.
IMHO, going into “high math” in high school is a waste of time for 90% of the students that go through it. We should concentrate the teaching into areas where it is most useful today, not just keep continuing the system because “that’s what we’ve always learned”.
Also, one of the most important classes I took in high school? Typing. I type 70-100WPM, I’m fast and reasonably accurate because I spent an entire year having it drilled into my head. It gives me a HUGE leg up in the high tech economy, I can answer more e-mails more quickly, I can conduct several IMs at once, and I’m vastly more productive because I can quickly get from thought to “paper” through a keyboard.
I’ve never run an integral since college, but I use the concepts of calc, m.v. calc, and linear alg from time to time. Of course, I mean the general principles, such as identifying how variables fit together, whether one variable is a dominant factor over another over time, etc. And while actually integrating log or trig function isn’t necessary to drive home some of these concepts, it certainly drives the point home. There are a lot of hidden relationships that can be exposed and it really drives home the point to apply the methods when you are young.
That said, you are right, probably only 25-35% of people could handle these concepts in even good schools.
The reason your plan will never happen is that the top .1% of society *needs* a society that is largely drones. Thus they secretly want to undermine public schools, which could have a very big role in “leveling the playing field”. All the standardized testing seems to be part of the same game. Much time is turned over from instruction to testing and test prep. Less time is then available during the day to spend on previewing, teaching, and re-teaching concepts. Then, when (shocker!) scores don’t improve dramatically, the .1% can use it as fodder to rail against the system and break it down further.
IMHO, going into “high math” in high school is a waste of time for 90% of the students that go through it.
Except that we insist they have it in order to qualify for a “good job” even though they don’t need it. Just another filter to help reserve the “good jobs” for those who “deserve” them.
I always thought they should teach Accounting instead of Calculus in High School to the majority of the kids. Likewise, a course in Logic is move valuable than Sociology.
Your personal finance class would be a disaster. Let me guess how the special interests would enforce NCLB style “teaching to the test”… to graduate high school you would have to mindlessly give the correct answers to questions along the lines of “its always a good time to buy a house” and “dollar cost averaging aka maximum commission is always the best strategy” and various BS like that. Kids are brainwashed enough, they need less not more. Now a philosophy class, or the classics, or maybe college level history, there you might stand a chance of accidentally educating a kid into actually thinking… TPTB may not like the results of that so much.
I did the whole calc series all the way up to diff eqs a long time ago. The purpose is to successfully complete a fairly strenuous mental exercise. Even in STEM fields, you’re going to solve a diffeq on the job about as often as you do a pushup on the job… That doesn’t mean diffeqs and pushups are not good exercise and good filters. If you got rid of math you’d merely need another filter to enforce that only the “smart” kids are designing bridges and rocket engines. Smart in quotes as in you have to be pretty dumb to go into STEM in America given the financial and lifestyle rewards pretty much anywhere else, not to mention STEM ageism, etc etc.
You can dollar cost average into Vanguard (and others -they are just my personal favorite) mutual funds and there are no commissions.
Yes and I participate in the stock plus investment plan for Wisconsin Energy since the 80s where at least purchases are commission free if you live in our great cheddar utopia… but you know that’s not what they’re looking for.
Besides churn = profit. You wanna bill them for churn as a commission line item? Fine. you wanna bill them for churn by providing a slightly dumpier rate of return? Fine, although a little less honest. Its not like shuffling paper magically gets cheaper because of some financial slight-of-hand trick to “hide” the cost.
“IMHO, going into “high math” in high school is a waste of time for 90% of the students that go through it.”
Yes. If you don’t use math for your profession and you are not studying math for educational or experimental reasons, it leaves your brain at an alarming rate, especially the more advanced mathematics.
“Also, one of the most important classes I took in high school? Typing.”
Double yes. I am sooooo glad I had one year of Jr High typing (on an old manual typewriter) and one year of high school typing (on the IBM Selectric).
I wish I had. What I think and what I type is, often, two different things.
I purposely did not take typing in HS or college, because I did not want to be slotted into secretarial work. When I started typing 8 hours per day for my work, I quickly became proficient at it.
Granted, I went to HS in the dark ages, but in my HS, the sequence was
9th - Algebra 1
10th - Geometry
11th - Algebra 2
12th - Trigonometry
Advanced students started Algebra 1 in 8th grade and took pre-Calculus in 12th grade (logarithms, etc,).
My mother’s generation got Algebra in college and those were the folks that got us to the moon with their slide rules.
There are some students that are capable of doing higher math at earlier ages. I know of one who went to John Hopkins during the summer before 7th grade and taught himself Algebra in 3 weeks.
The general population would be better off with a stronger foundation, but the more capable and more driven ones should have the opportunity to pursue math whenever they are ready for it. And I say more capable AND more driven, because I have known folks who were capable but not driven.
7th (Gifted Program) - Pre-Algebra - Liked it
8th - Algebra 1 - Seemed useless except for programming the mind for logical links and conclusions.
9th- High School! - Kinda fun to explore spaces in Plane Geometry.
10th - Algebra II - No excuse to exist for most students outside of brain patterning.
11th - Analytic Geometry - Dropped it.
12th - Trigonometry - Dropped it. Gifted, maybe. Stupid, no.
we need to convert to the metric system and we can’t even seem to do that
“we need to convert to the metric system and we can’t even seem to do that”
+1 Exactly right!
I also prefer using 24-hr time and calendars that start on Monday and end with the “week-end.”
One big reason people don’t get it is because they can in no way, shape or from relate to having investments.
They can’t afford them.
But believe me, they are aware just below the conscious level. Like an itch they can’t scratch and don’t know what caused it.
“One big reason people don’t get it is because they can in no way, shape or from relate to having investments.”
+1 I know people in debt up to the white of their eye-balls, and they’re out buying the latest snow-mobile; this spring it’ll be the latest Jet-ski. Always smoking and downing those spendy 20-oz micro brews too. I wish I could figure out how to make something off of them, but my role will likely be involuntarily carrying them later in life.
Do you plan to buy the dip?
Can anyone recall what happened next after October 2007?
Stock futures dip after 5-year highs with data, earnings due
February 4, 2013 8:15 AM ET
By Chuck Mikolajczak
NEW YORK (Reuters) - U.S. stock index futures slipped on Monday after the S&P 500 hit a five-year high and the Dow rose above 14,000 last week as investors waited for factory orders data and another round of corporate earnings.
The benchmark S&P index is up more than 6 percent for the year, with nearly half of the gains coming in the session after U.S. legislators successfully sidestepped the “fiscal cliff” of tax increases and spending cuts which threatened to derail the economic recovery.
The gains have left the index roughly 60 points away from its all-time intraday high of 1,576.09.
“We are coming off an economic data hangover from Friday and the market was on a bullish spree. This is an opportunity for investors to take advantage of the bull run,” said Andre Bakhos, director of market analytics at Lek Securities in New York.
The Dow’s march above 14,000 was the highest October 2007. (SIC)
wall street picks up scraps from investors in a panic then waits for FED to give the all in signal. Then when mom and pop jump in at the top all of a sudden were in another recession no one saw coming.
Risk on: “Buy! Buy! Buy!”
Risk off: “Sell! Sell! Sell!”
Global shares, euro, oil fall as caution returns
By Richard Hubbard
London | Mon Feb 4, 2013 8:40am EST
(Reuters) - World equity markets and commodities fell on Monday after last week’s strong gains, with a rise in political uncertainty in southern Europe worrying some investors and sending the euro lower.
U.S. shares were poised to join the slide when Wall Street reopens as the market retreats from the five-year highs hit on Friday.
The global economic outlook brightened substantially last week when data showed U.S. factory activity quickened in January and hiring increased, while a euro zone business activity survey suggested the worst of the region’s downturn may be over.
On Sunday, China added to the optimism by reporting that its services sector had grown for a fourth straight month in January, although the slim gain also signaled that the global recovery underway is a modest one.
In Europe, political developments in Spain and Italy reminded investors that there were still many risks ahead, dampening the positive mood and encouraging some sellers.
Over the weekend Spain’s opposition Socialist Party called on Prime Minister Mariano Rajoy to resign over a corruption scandal, as an opinion poll showed the lowest support on record for his centre-right People’s Party (PP).
“If Rajoy were really forced to resign, if we were to have new elections in Spain, that would not help the improvement we’ve seen in financial markets,” Tobias Blattner, European economist at Daiwa Capital Markets, said.
gasoline has risen 50 cents a gallon around here in the last 3 weeks.
Same here. The FOMC’s QE-to-infinity-and-beyond policy must be working.
No Banker Left Behind!
Which is the name of a very good song by Ry Cooder.
It is? Hell, we coined that term here!
And I’ll bet it took 3-4 month to drop those 50 cents.
Free market my azz
The station where we paid $2.59 less than a month ago is now $3.19. Now that’s Hope and Change you can believe in!
$4 in CA. and corp profits are at ALL time highs! Go Obama!! A true capitalist!!!!
We had a record price for gas last year averaged over the entire year. How long before we match the inflation of Argentina with its similar policies:
FWIW, the price oil is set by global markets. As for doing an Argentina, we aren’t even close yet. I’ve lived in a country with 50%+ inflation. Imagine, every time you go to the store, the price of everything has gone up.
I’ve also lived in a country where prices were frozen. You would have to hoard when prices were briefly unfrozen. Lots of fun.
But oil is priced in dollars so what the Fed does to the value of the dollar always impacts the price of oil both to us and the rest of the world.
I’ve lived in a country with 50%+ inflation. Imagine, every time you go to the store, the price of everything has gone up.
If you’re the guy with the store it seems you can’t raise prices fast enough to be able to replace your inventory. Back in the 1970’s I can remember the UPS guy bringing us new manufacturer price sheets every week. Eventually our customers ran out of money. Stagflation.
What the “Fed does to the value of the dollar” _ALSO_ correspondingly impacts the exchange rates with every other currency, so the cost of oil in those other currencies should be relatively unaffected.
Blue Monday as stocks face worst day of 2013
U.S. stocks retreat from five-year highs and Dow industrials fall back below 14,000 after cracking the key level last Friday. Political uncertainty in Europe is hurting sentiment due to pressure in Spain and Italy.
America’s Debt Challenge
U.S. can afford $500 billion in (smart) defense cuts — opinion
By Lawrence Korb and Max Hoffman @CNNMoney February 1, 2013: 5:32 AM ET
If phased in and done in a smart way, defense cuts would not damage the nation’s security, the authors argue.
NEW YORK (CNNMoney)
Military officials are presenting all kinds of apocalyptic scenarios about the looming automatic, across-the-board reductions in defense spending.
And make no mistake: The way the so-called sequestration would make the defense cuts — $500 billion over 10 years — would be damaging.
Lawrence Korb and Max Hoffman are with the Center for American Progress.
Every item in the defense budget except for military personnel accounts will have to be cut by the same percentage. That is no way to run a school board, let alone the world’s largest organization and greatest military power.
Moreover, by the time sequestration would take effect, in March, the fiscal year will already be half over. Therefore, cuts in every defense budget item in the FY 2013 budget will have to be twice as drastic to get the roughly $50 billion in cuts in the remaining months of the fiscal year.
The GOP loves to spend money they don’t have, they will never cut the military budget. See (Reagan-Bush)
The Pentagon budget will continue to grow for the duration of Obama’s second term. As it will during the subsequent eight years of President Hillary Clinton. You’ll see
Of course, military contractors are much more powerful than us regular people. That is why taxes are going up, those drones are not cheap.
Just stop complaining… ya cant have more military and not pay for it.
So, to paraphrase Margaret Thatcher, you can grow the military and keep taxes on the rich low until you run out of other people’s money to borrow.
If you buy housing at current inflated asking prices, you’re going to lose a lot of money…. A LOT of money.
isnt this a chance to gamble in the casino. You can use leverage and buy with no money down and if prices go up you take some cash off the table.prices go down you give house back.
That gamble is always available for those who don’t mind “paying rent” for a few years at above the price of comparable rental housing…
you should put on your bird dogging shirt and find us some deals in san diego.
And you’re still on the hook for the loss as a result paying a grossly inflated price for what is always a depreciating asset.
how are you on the hook? The bank agrees to take the house back and you have no recourse in CA or AZ and several other states. If the bank wants to make the loan in a silly market then they are on the hook.
Sure they do. An refi automatically makes the mortgage a recourse mortgage.
Worse yet, When CA becomes a full recourse state(which is very soon), look out below.
Got any links to people buying with “no money down?” I haven’t seen any.
3% programs, not sure of zero down. At “liar” loans are back with 30% dn.
“liar” loans are back with 30% dn
Interesting, so the banksters think that there’s negligible risk with 30% down.
Well what risk is there with 30% down? Even if the FB walks and never pays a penny in interest, the bank can easily take the house and sell at 30% below market and break even.
3% down doesn’t sound like a lot, but remember that some high % of Americans can’t come up with $5K if they need it. Doesn’t include closing costs. Also doesn’t factor in that FHA adds a hefty fee to the PITI.
You Don’t Need A 20% Down Payment To Buy A Home
January 30, 2013 | Vol. 8 Issue 5
With interest rates still low and the housing market appearing to have stabilized, conditions could arguably be creating a great buying opportunity. I think there is about a six to twelve month window of “perfect” before interest rates begin an inevitable increase and the increase in property values begin to accelerate. You can see that rates have already slightly increased since December using the trend box above.
Fortunately there are many options for you if you don’t have a large down payment. My favorite program is the FHA mortgage because that is the all-round most flexible in terms of a small down payment and the ability to qualify. Zero down is available in certain areas with the USDA Rural Guaranteed program, and veterans have access to the VA home loan. Even the standard Conventional loan through Fannie Mae and Freddie Mac is available with as little as 5% down. And these low down options are not by exception. It is very common for someone buying a home, even their second home, to put less than 20% down.
NYC Foreclosures Skyrocket
Nobody could have seen it coming!
P.S. I got a call out of the blue two weeks ago from an old friend who is a professor at a school in upstate NY. We last were in touch before the housing market collapsed. Back in the day we used to have endless discussions about the bubble and why to not buy a house.
Turns out he bought in 2007 and is now underwater…go figure!
Why would he buy in upstate NY? That’s insanity.
Was there a big subsidy involve? Thus perhaps luring him in?
The foreclosure action will increasingly be in judicial states (Northeast and Florida, with a little Illinois sprinkled in), and less so in the West (with the possible exception of Nevada, who delayed reckoning with their foreclosure prevention legislation).
Hello Mr. “The Baby Boom Started in 1941″
We’ll school you in truth whether you like it or not.
+1 Love it!
Hope and Change
I am in Total Shock this morning the Unthinkable has happened!!!!
Chicago marchers urge Obama to come home to address gun violence
Reuters) - Civil rights leader Jesse Jackson and relatives of victims of fatal shootings in Chicago urged President Barack Obama on Saturday to come back to his hometown and address the gun violence plaguing the city.
Ban the guns?
I know they will never demand a minimum of 15 years no parole added to any other sentence, for using an unregistered gun in a crime.
That would be so racist.
“minimum of 15 years no parole added to any other sentence”
It’s unconstitutional more than it is racist.
Also there was big to-do a few years ago under the Bush43 admin when they tried to make the federal sentencing guidelines mandatory to get “tough on crime”. The whole point of having a judiciary as a separate co-equal branch is that a legislative branch can not mandate that a judge do x, y, z.
If you want to sentence someone for using an unregistered gun, you need to prove it as a separate offense.
I can’t recall the case unfortunately. I took 2 semesters of crim procedure largely because:
1. it was a small seminar course that was exempt from mandatory grade curves (law schools generally limit the % A’s and B’s can be given in courses with >15 students).
2. the professor was the most cool, conversational, and relaxed. this is very rare in L school where most faculty are stuck up pr*cks.
Also, ridiculously, crim pro course was entirely focused on *Federal* crim procedure, which is probably .1% of the criminal cases in this country. We talked endlessly about RICO and financial crimes, for example… which is an area that less than .01% of lawyers will ever work in.
Just another reason L school should only be 2 yrs…
The majority of the states in this nation sentence murderers to life imprisonment without parole and you say that sentencing someone to gun offense without parole would be unconstitutional? Now, I do not think you could give someone a life sentence for using a gun but that would be based on the eight amendment not separations of powers.
Someone committing a gun offense
BTW, you would not have to make using a gun a separate crime, you would, probably, have to have it as an element of the crime and prove that beyond a reasonable doubt.
From the way dj phrased his comment (always hard to navigate) it seemed like he wanted an escalation in sentences for using an unregistered gun. Escalation is allowed under the federal guidelines but there are rules about what a judge can/can’t considered, whether the escallating factor must be proved at trial based on admissible evidence, etc. These are technical issues and I’m sure states differ. Perhaps DJ was saying that the unregistered gun should be charged as a separate count and proven, then obviously that can be sentenced however a state wants. I was just saying that using the gun to escalate the sentence for another crime would be a constitutional problem.
As I mentioned in a different post, this isn’t something I do and I admittedly only took crim procedure for the interesting professor and his liberal grading.
Yes Joe you pretty much said it. a separate action/sentence for the unregistered gun.
So they will serve some time even if they are acquitted.
If Jesse is involved, the blame will be pinned on Whitey. And a shakedown will follow. Maybe he can pick up another Anheiser Busch distributorship for one of his relatives.
Two from Bloomberg. And remember kidz, it’s one set of rules for them, and another for you. Pwned by the 0.1%
‘it’s one set of rules for them, and another for you’
It goes a lot deeper than that.
‘The Clinton doctrine was that the United States is entitled to resort to unilateral force to ensure “uninhibited access to key markets, energy supplies, and strategic resources.” That goes beyond anything that George W. Bush said. But it was quiet and it wasn’t arrogant and abrasive, so it didn’t cause much of an uproar. The belief in that entitlement continues right to the present.’
‘If you apprehend a suspect, he’s a suspect until proven guilty. He should be brought to trial. It’s a core part of American law. You can trace it back to Magna Carta. So there were a couple of voices saying maybe we shouldn’t throw out the whole basis of Anglo-American law. That led to a lot of very angry and infuriated reactions, but the most interesting ones were, as usual, on the left liberal end of the spectrum. Matthew Yglesias, a well-known and highly respected left liberal commentator, wrote an article in which he ridiculed these views. He said they’re “amazingly naive,” silly. Then he expressed the reason. He said that “one of the main functions of the international institutional order is precisely to legitimate the use of deadly military force by western powers.” Of course, he didn’t mean Norway. He meant the United States. So the principle on which the international system is based is that the United States is entitled to use force at will.’
‘the core principles haven’t changed very much. But the capacity to implement them has been sharply reduced. That’s why you get all this talk about American decline. Take a look at the year-end issue of Foreign Affairs, the main establishment journal. Its big front-page cover asks, in bold face, “Is America Over?” It’s a standard complaint of those who believe they should have everything. If you believe you should have everything and anything gets away from you, it’s a tragedy, the world is collapsing. So is America over? A long time ago we “lost” China, we’ve lost Southeast Asia, we’ve lost South America. Maybe we’ll lose the Middle East and North African countries. Is America over? It’s a kind of paranoia, but it’s the paranoia of the superrich and the superpowerful. If you don’t have everything, it’s a disaster.’
‘And no one else has that right.’
‘Of course not. Well, maybe our clients do. If Israel invades Lebanon and kills a thousand people and destroys half the country, okay, that’s all right. It’s interesting. Barack Obama was a senator before he was president. He didn’t do much as a senator, but he did a couple of things, including one he was particularly proud of. In fact, if you looked at his website before the primaries, he highlighted the fact that, during the Israeli invasion of Lebanon in 2006, he cosponsored a Senate resolution demanding that the United States do nothing to impede Israel’s military actions until they had achieved their objectives and censuring Iran and Syria because they were supporting resistance to Israel’s destruction of southern Lebanon, incidentally, for the fifth time in 25 years. So they inherit the right. Other clients do, too. ‘
‘But the rights really reside in Washington. That’s what it means to own the world. It’s like the air you breathe. You can’t question it. The main founder of contemporary IR [international relations] theory, Hans Morgenthau, was really quite a decent person, one of the very few political scientists and international affairs specialists to criticize the Vietnam War on moral, not tactical, grounds. Very rare. He wrote a book called The Purpose of American Politics. You already know what’s coming. Other countries don’t have purposes. The purpose of America, on the other hand, is “transcendent”: to bring freedom and justice to the rest of the world. But he’s a good scholar, like Carothers. So he went through the record. He said, when you study the record, it looks as if the United States hasn’t lived up to its transcendent purpose. But then he says, to criticize our transcendent purpose “is to fall into the error of atheism, which denies the validity of religion on similar grounds” — which is a good comparison. It’s a deeply entrenched religious belief. It’s so deep that it’s going to be hard to disentangle it. And if anyone questions that, it leads to near hysteria and often to charges of anti-Americanism or “hating America” — interesting concepts that don’t exist in democratic societies, only in totalitarian societies and here, where they’re just taken for granted.’
charges of anti-Americanism
“To those who scare peace-loving people with phantoms of lost liberty, my message is this: Your tactics only aid terrorists for they erode our national unity and diminish our resolve. They give ammunition to America’s enemies and pause to America’s friends. They encourage people of good will to remain silent in the face of evil.” — Attorney General John Ashcroft, December 2001
Because socialism needs more “other peoples’ money”
“President Barack Obama said there is “no doubt” the government needs new revenue from closing tax “loopholes” and limiting deductions, along with enacting spending cuts, to reduce the federal deficit.”
My guess he will also try for a carbon tax despite more and more evidence reducing co2 roles in warming between 1978-98.
This talks about the sun playing a role in 25% of the warming despite the models placing its role at much less. It does address that the warming would continue despite the numbers peaking about 1960. Still we had a 70 year period of solar activity which as the highest in 8000 years. Does this article mean that 75% was man made. No. Lets break it down:
Warming between 1978-98 and possible causes:
PDO (Pacific warming) in warm phase and many el nino events 50%?
Amo (Atlantic warming) 10%?
Man-made warming 14-15%?
That would make my estimate of 1/7 of the warming spot on. It was based on a study in the 1980s that had co2 being 1/7 as potent a gas as was figured in the models used then to predict as much as a 1 degree C warming per decade without massive caps on Co2 emissions which never happened.
BTW, Rio if you are out there, looking at the global raw numbers, I keep seeing Brazil as a hot spot. How hot is it there?
“How hot is it there?”
So hot that….
(fill in the blank)
First I wish he would levy a financial transaction tax. That would remove huge amounts of leverage in the synthetic debt/credit markets. If the banks want to bet billions on the futures markets there ought to be some way we can push their leverage down.
I would love to see a carbon tax to recover the costs we incurred for our massive military interventions in the middle east. Carbon taxes are applied at the producer level while the consumer (end user) gets a credit to offset the cost increase. If we don’t pay a price for our mistakes (Iraq) we are likely to make the same mistake again.
I think the military interventions all over the world are the price we pay for getting the privilege of being the reserve currency and oil being priced in dollars. That would continue to be the case even if we were oil independent.
Speaking of how we get to independence, NG cars should be promoted as well as NG filling stations. Government could fix the chicken or egg problem; people don’t buy enough NG cars since they are worried about filling them and the gas stations do not provide the pumps due to an insufficient numbers of cars. However, I see this as an interim step to fuel cell cars. They can be run on NG and if the pumps are already in place it will facilitate their use. They get about 80 miles to the gallon of oil equivalent so they will save resources and emit water, so they burn quite clean.
The electric car has the lithium battery problem which the 787 groundings has shown to the world. Full disclosure as I have told the board, I own platinum and palladium stocks. Speaking of that these metals have done quite well over the last two weeks as I predicted on this board. Of course, they are used in pollution control on regular cars so they do not need this transfer to fuel cell cars to do well.
Please don’t try to justify the Iraq war. It was a huge blunder and there will be blow back to deal with for decades.
I am with you on fuel cells but I would prefer hydrogen over NG since I can use my solar power to convert water to H & O and cut out the middle man.
I am not justifying the Iraq war, I am explaining it. Saddam Hussein had vast oil deposits and the ability to produce lots of oil. He also decided to price his oil in currencies other than dollars to punish us. We cannot maintain budget and current account deficits unless we can borrow in dollars, that we print.The U.S. needed to remove Saddam’s threat to the reserve currency and get more oil production out of Iraq before the world’s demand for oil exceeded production. Ironically, this has occurred but too late for W. However, if you remove Iraq’s present production from the world’s production, you would see oil north of $200 a barrel.
Now the average person would have been better off if the fiat currency system was not running the world since a trade deficit would have eaten all our gold and caused us to find a way to produce goods to compete before we hollowed our industries. However, the elites on the coasts would not have made nearly as much money under that system. Thus, they have sent a clear message that deviating from the fiat system can get you invaded and destroyed.
Of course, the transition back to producing goods to pay for our imports will be very painful for this country and the average person. So I agree with those on this board that say it is going to get worse much worse.
“I am not justifying the Iraq war, I am explaining it.”
Paul Wolfowitz and the AIPAC neocons saw an opportunity to oust Saddam Hussein who had earlier ordered scud missiles to be fired on Tel Aviv. Recall Colin Powell’s scripted U.N. fabrications? Another lame excuse was hatched for entering Afghanistan, “The graveyard of empires.” The unspoken goal was to “sandwich” Iran with U.S. controlled airbases to enhance Israel’s security.
‘The U.S. needed to remove Saddam’s threat to the reserve currency and get more oil production out of Iraq before the world’s demand for oil exceeded production.’
I thought it was to keep away the mushroom cloud. And Osama Bin Laden. Is this how we went from fighting the North Vietnamese Army to the Viet Cong, kinda like going from Al-Quaida to the Taliban, without missing a propaganda step. I’m confused. And I understand the US kills more people in Pakistan than anywhere, and Pakistan is an ally.
levy a financial transaction tax
One of the first “demands” made by Occupy Wall Street.
Which happened before they go co-opted by the Free Sh*t Army. And before the corporate media created the false OWS vs Tea Party ideological chasm. And before they discredited OWS by sensationalizing crime at the OWS camps and incidents like the dude taking a dump on a police car. And most importantly, before there was a coordinated crackdown with municipalities in collusion with the Department of Homeland Security to destroy OWS.
The 0.1% will NOT be challenged.
Well…maybe they will, but not for long.
I love how when the left talks about raising taxes, it uses the meme “closing tax loopholes”, as if a legal tax break or deduction is a “loophole” that was never meant to actually provide tax relief…
I also appreciate how the left recently released a picture of Obama shooting a Browning shotgun and the media has jumped all over it in an attempt to show moderates that he isn’t really anti-gun or anti-second-amendment, rather just anti-military-style-semi-auto-gun, which any reasonable moderate knows should be banned.
Know your memes…
Abundant LULZ to be found at following link:
That made my day!
Laugh of the day: well sort of…….
NPR is covering the foreclosure problems that Florida just can’t seem to shake. The usual weeping, wailing and gnashing of teeth about depressed prices. Money quote:
“Real estate agents say the backlog of distressed homes makes it tough for the Florida housing market to recuperate. Those homes depress prices and create uncertainty in neighborhoods.”
Nary a word about the housing bubble and the too-easy credit and massive overbuilding that accompanied it.
“Those homes depress prices …”
Lol. People don’t want to buy houses there because the prices are too low?
I love America.
Low prices = slum-like surroundings, low-life neighbors, and never-ending financial losses as prices go ever-lower.
Haiti is cheap too.
And I’m guessing unless a major natural disaster has recently played out, Haitian home prices are more stable than U.S. prices.
I heard the story coming into work today. A 2.5 year process does seem excessive.
FL has another “shadow inventory” problem beyond foreclosures. FL, more than any other state, experiences a lot of death & disability related to its demographics (FL easily the oldest state in the nation). Over the next 10-20 yrs, there are going to be even more houses entering the inventory. Baby Boomers will not live forever.
(Might be smart to open a casket supplier or funeral home in FL, but not buy a house there!)
“NPR is covering the foreclosure problems that Florida just can’t seem to shake. The usual weeping, wailing and gnashing of teeth about depressed prices.”
You have to give them credit for recognizing who butters their bread.
Who are the NPR corporate donors?
In 2008, NPR listed the following sponsors:
$250,000 - $499,999
National Association of Realtors
They have to worked through approximately 14% of their mortgaged properties through their broken system to get to normal…(non-current loan rate is 19%, “normal” is 5%).
They also have the headwind high vacancy rates: 11.9% for rentals, and 2.2% for owner/occupied…vs. the US as a whole at 8.7% and 1.9%.
Why buy housing now? Because a realtor said you should? Buy later, after housing prices crater for 65% less.
Or buy never
Remind me again…why are we the people subsidizing interest rates for multi-family property owners?
Because we are the proles. We exist so our productivity may be harvested for the benefit of others.
It’s the “corporations are people too”/ boot strapper/ job creator meme as usual. Tax breaks for people who can afford to lobby for them.
Need revenue? Just increase sales taxes and other taxes primarily paid by the middle class.
Why are we subsidizing any large business, especially billion dollar ones?
Because we have the government we deserve.
Why I’m thankful for Bush and the NRA:
As discussed on NPR today, the 2005 Protection of Lawful Commerce Arms Act pushed by the NRA, passed with bi-partisan support by congress and signed into law by Bush in 2005, protects firearms manufacturers and gun dealers from civil lawsuits.
As is typical of the left, they attempted to bankrupt the firearms industry as an end-run on the 2nd Amendment, through civil legal action in the 90’s. This is now untenable by virtue of the 2005 law and is one reason why the firearms industry is one of the strongest domestic industries in this country today.
It must come as some surprise to the families of Newtown, CT and Aurora, CO that they can’t sue Bushmaster or S&W because a deranged criminal broke the law and murdered a family member with one of their guns. I mean, some for-profit, commercial company is to blame and should be held liable, right? It must come as no surprise then that the owners of the movie theater in Aurora, CO are being sued by victims’ families… as the families cant’ sue the firearms manufacturers and someone other than the criminal must be liable and made to pay in today’s litigious society.
I thank Bush for our recession and debt every day too.
Nonsense. Don’t be such a buzzkill!
“This is the strongest global economy I’ve seen in my business lifetime” — Treasury Secretary Henry Paulson, July 2007
Corporate Profits Hit Record High While Worker Wages Hit Record Low
By Pat Garofalo on Dec 3, 2012 at 9:25 am
A constant conservative charge against President Obama is that he is inherently anti-business. However, businesses keep defying the storyline by making larger and larger profits, rebounding nicely out of the Great Recession.
Manufacture a gun that someone uses to commit a crime - indemnity.
Write software that someone uses to infringe copyright over the internet - bankruptcy, fines and possible jail time.
Ebay and paypal seller fees are a complete ripoff.
There is a reason eBay bought PayPal… and you just experienced it. Having said that, high pricing leaves room for cheaper competition. Sounds like what we need is to develop a better/cheaper commerce platform for buyers and sellers to exchange goods and money.
Seriously…. It’s like a realtor crawled through my bedroom window at nite and molested me. $27 later, I haven’t even paid for the shipping on a $225 item.
LOL. Great imagery… was it Suzanne?
Could have been. Both genders of realturds are sodomizers.
Elon Musk was/is a genius. Selling to eBay maximized his value and allowed him to pursue other things. Elon is a true bootstrapper - - NOT the pathetisad faux bootstrapper type.
No argument from me… he did it right, from Zip2 to x.com/Paypal. Tesla certainly looks promising.
“Sounds like what we need is to develop a better/cheaper commerce platform for buyers and sellers to exchange goods and money.”
You are exactly right, but the problem is one of capital. Nobody is willing to throw the kind of money that was being tossed around during the dot com boom days like they used to.
You are NOT going to start a low priced competitor to ebay on your laptop.
But we sure as hell need one.
Guestimated start-up cost for a competitor? 10-20 million.
10-20 mil? Maybe to write the code, but the compliance expenses, the legal fees, and the marketing budget would need to be several times that amount. You’ll need your own money to start up as well; otherwise if you need to raise the money you’ll need a legal team in place from the very beginning. This explains why there are angels and VCs to fill this niche, it’s not like people *want* to share their creations with the VC, but the VC already has lawyers and bankers at a lower incremental cost.
I used eBay a lot for a while, but between their cut, weighing and boxing things up, and trekking to the post office, it was just too much hassle.
Craigslist all the way. Cash only, you pick up, first come first served. Couldn’t be easier.
My motto: if you can’t buy it used on craigslist, you don’t need it.
SF you made my point its hard to sell things on CL for top dollar….but if you have cash and be the first on there, what great steals i’ve gotten over the years….
The trick with shipping is to recycle all your boxes and bubble wrap then charge them for it….very seldom do i have a buy boxes but Staples has the right box for records 14×14x14 just enough room to stuff cardboard and bubble on all sides, sometimes i double box with a 13×13x13 box which they have at the self storage place..
And those uspo flat rate boxes are good you can get 40-42 cd’s and the medium box and 60-62 in a large one ….and free
“Ebay and paypal seller fees are a complete ripoff.”
Have been for almost 13 years.
Where have you been?
Not true. We did a few cha-chings worth of business in 2002-2004 and our costs were substantially less…. almost half.
Cost? I rememeber when there was only a sold percentage fee and THAT was only if it sold!
Heck, I remember when there was just a FLAT fee! (I remember when there was no fee!)
so are credit card fees if you are an online seller? they advertise 1.99%, but they could be 3.65% for some of your buyers with certain cards.
The basic fees are OK when they have a special like no fee buy it now…..but what pizzes me off was them adding the postage charge to the total price and basing the fees on that.
sure there were lots of idijits selling cd’s for 1 cent and $6.99 shipping, but they could have dealt with it another way.
“You have to have rocks in your head to buy a house in the current environment”
When I was a kid I had a bad downhill bicycle accident. I ended up in the emergency room for hours being workred on for among other things, having gravel scraped out of my face and body.
I never did think they got all that gravel out.
We can now discern more or less when the catch-up growth miracle will sputter out. Another seven years or so - enough to bouy global coal, crude, and copper prices for a while - but then it will all be over. China’s demographic dividend will be exhausted.
Beijing revealed last week that the country’s working age population has already begun to shrink, sooner than expected. It will soon go into “precipitous decline”, according to the International Monetary Fund.
Japan hit this inflexion point fourteen years ago, but by then it was already rich, with $3 trillion of net savings overseas. China has hit the wall a quarter century earlier in its development path.
The ageing crisis is well-known. It is already six years since a Chinese demographer shocked Davos with a warning that his country might have to resort to mass suicide in the end, shoving pensioners onto the ice.
Less known is the parallel - and linked - labour drain in the countryside. A new IMF paper - “Chronicle of a Decline Foretold: Has China Reached the Lewis Turning Point?” - says the reserve army of peasants looking for work peaked in 2010 at around 150 million. The numbers are now collapsing.
…and the labor riots and actions against local dirty politcos have begun.
I wonder if this was the master plan all along?
I remember 15 years ago, where the prediction for the United States now was an acute labor shortage, so I take the labor shortage prediction with a grain of salt. However, the overall theme that China is going to grow old before it grows rich I think is spot on. Probably will not have to put the old people on ice, since the air will probably kill them.
What is happening societally around the world is mirrored in our own individual lives; not enough anticipated getting old, or coming on hard times, or the devastating results of succumbing to greed.
We all got suckered by con men.
And some women actually marry them….
My question is, Why didn’t Lanny Breuer stick to the script? Just sticking with saying with the cases are too complicated, they couldn’t get convictions etc, instead of admitting that the cases weren’t pursued due to fear of destabilizing the financial system?
“In the documentary “Inside Job,” when asked why there have been no such investigations, economist Nouriel Roubini replied: “Because then you’d find the culprits.”
Also - very amusing - read this hagiography of Breuer from the Washington Post. In recent years, the MSM has made some attempt to conceal its biases via a bit more neutral reporting, but sometimes, they forget and let it all hang out again:
Sorry folks, in addition to the criminal cases against Wall Street simply being too complex and impossible to prosecute, Too Big To Fail is also impossible to dismantle.
Sincerest regrets, glad you understand.
Too Big to Fail Too Hard to Fix Amid Calls to Curb Banks
By Craig Torres & Cheyenne Hopkins - Feb 4, 2013 10:32 AM ET
The Dallas Fed’s Fisher, who keeps a breeding bull named “Too Big to Fail” on his Texas ranch, proposed in a Jan. 16 speech that regulators be explicit about what kinds of banking the government will backstop. Deposit insurance and discount- window loans would be available only to a firm’s commercial and consumer-banking operations. Fisher’s proposal would push other risk-taking businesses, such as investment banking, away from government support, raising their cost of funding.
“Fisher and other breakup proponents overlook major provisions of the Dodd-Frank Wall Street Reform Act that effectively end the problem of ‘too big to fail,’ as well as significant action taken by large banks that has dramatically strengthened the U.S. financial system,” wrote Nichols, whose group includes the heads of some of the world’s largest banks, including Credit Suisse Group AG and Goldman Sachs Group Inc. (GS)
Breaking up large banks would put U.S. financial institutions at a competitive disadvantage, according to a report being published today by Hamilton Place Strategies, a Washington-based consulting firm founded by Tony Fratto, a White House and Treasury Department spokesman during the administration of George W. Bush.
“Ultimately, breaking up U.S. banks will not improve the safety of the global financial sector and would reduce U.S. influence over the financial sector globally,” the firm wrote.
Don’t worry, it’s just the construction worker, or retail worker that gets hammered by the government and Fed directed malinvestment. The top executives get hefty salaries regardless of their fecklessness and venality.
This whole government response to the financial crisis has truly been “A tale told by an idiot, full of sound and fury, signifying nothing.”
But, like Shakespeare, watching it does make for interesting theater.
‘…who keeps a breeding bull named “Too Big to Fail” on his Texas ranch…’
“Breaking up large banks would put U.S. financial institutions at a competitive disadvantage, according to a report being published today by Hamilton Place Strategies, a Washington-based consulting firm founded by Tony Fratto, a White House and Treasury Department spokesman during the administration of George W. Bush.”
Forget about putting Megabank, Inc at a competitive disadvantage.
Why wouldn’t you want to put oversized, failed financial institutions out of existence, in favor of fostering competition in the financial services industry which enables all Americans a shot at an affordable slice of the American dream?
Here’s a report from the field from my nabe. A house that had a zestimate of $305K just sold and closed for $271K. This is what I would expect as that house was well above the local sweet spot of 200K.
$270k? For that? Someones got rocks in their head.
It’s that or 2k/mo in rent with no mortgage deduction or the trailer park. And you don’t want to be one of “those” people, do you?
That house would probably fetch another 100K in Denver.
$79/sq. foot. Seems like a steal to me.
I guess you paid an inflated price.
Jut a note, that about 1000 sq feet in that house is a finished basement.
Odd how the same crowd that is for guns for everyone so they can fight off the evil gov if need be, is also for more money for the military.
then… these same people are for lower taxes, yet they want us to go to war.
is it me or do half of all Americans need a class in common sense??
And some of us would like to reduce the size and cost of the military industrial complex, but also believe in the individual’s unlimited rights to own guns. It doesn’t fit as neatly in a little box as you may think…
It is interesting because the same thinking that provided for the second amendment rights, saw a large standing army as a threat to a democracy.
Yeah, we don’t talk as much about that.
is “half” a tidy little box? seems vague and huge to me.
“is it me or do half of all Americans need a class in common sense??
Oh they’ll get one all right. The class of hard knocks. You ain’t seen nothin yet.
Here’s a really nice $2.65m Phoenix Arcadia Highlands home.
Check out the walk-in closet in photo #11. Nice!
Now for the washer and dryer in photo #18. WTF?
This 2013 Super Bowl Ad was clearly racist.
http://www.youtube.com/watch?v=o2prAccclXs - 228k -
Anheuser-Busch *IS* racist. So racist, in fact, that the only way they could absolve themselves of their racism was to give a beer distributorship to two of Jesse Jackson’s sons.
Marsh on Monday Archives
Feb. 4, 2013, 4:00 a.m. EST
Germany’s economy pulls away from euro partners
Commentary: Peripheral economies becoming more irrelevant
By David Marsh, MarketWatch
WASHINGTON (MarketWatch) — Shortly after the fall of the Berlin Wall in November 1989, President François Mitterrand’s Parisian experts calculated that reunified Germany would experience a 10-year period of economic weakness before recovery set in. Then maybe it would once again become Europe’s dominant power — unless France took corrective action.
Mitterrand’s officials got it wrong.
The weakness in the German economy, when annual growth lagged almost permanently behind the French numbers, continued from the early 1990s until 2005, the last year of Chancellor Gerhard Schröder’s seven-year term.
There was a combination of reasons for this. The post-unification rise in German labor costs, an overvalued deutsche mark for conversion into the euro when economic and monetary union (EMU) started in 1999, and successful structural reforms during the 1990s in France.
Over the last decade, especially since the trans-Atlantic financial crisis of 2007-08, the picture has changed dramatically. Labor market and budgetary reforms under Schröder eventually produced results. Other euro (EURUSD -1.02%) members slacked their reform efforts, but could no longer compensate through devaluation. So Germany was able to exploit to the full the big advantages of its industry-oriented economic base and its growing price competitiveness.
The painful phase of economic shrinkage in over-indebted peripheral states, made sadly inevitable by numerous home-grown mistakes among EMU countries, has produced fewer disadvantages than expected for Germany as an export Weltmeister.
This is because, during the last 15 years, the Federal Republic has cannily diversified its export markets far and wide beyond the borders of the euro area. So it’s much less dependent on demand from its stricken neighbors.
The resulting rise in German economic power, and accelerated decoupling between Europe’s biggest economy and other euro members, is exactly the opposite of what the euro’s initial supporters wanted and proclaimed would happen.
The U.S. Consumer Financial Protection Bureau is weighing whether it should take on a role in helping Americans manage the $19.4 trillion they have put into retirement savings, a move that would be the agency’s first foray into consumer investments.
“That’s one of the things we’ve been exploring and are interested in in terms of whether and what authority we have,” bureau director Richard Cordray said in an interview. He didn’t provide additional details.
The bureau’s core concern is that many Americans, notably those from the retiring Baby Boom generation, may fall prey to financial scams, according to three people briefed on the CFPB’s deliberations who asked not to be named because the matter is still under discussion.
The Securities and Exchange Commission and the Department of Labor are the main regulators of U.S. retirement savings vehicles and funds. However, the consumer bureau — established by the 2010 Dodd-Frank Act — sees itself as a potential catalyst for promoting a coherent policy across the government, the people said”
“The U.S. Consumer Financial Protection Bureau is weighing whether it should take on a role in helping Americans manage the $19.4 trillion they have put into retirement savings,”
I think the E TRADE Baby shows how the U.S. Consumer Financial Protection Bureau would manage the $19.4 trillion that has been put into retirement savings.
Super Bowl Save It - E TRADE Baby Commercials - YouTube
http://www.youtube.com/watch?v=FLrncuqRxKU - 210k -
Don’t look now but the government has filed charges against S&P for fraud in their securities ratings. Could it possibly be that in Obama’s second term he takes the gloves off and beats the sh*t out of the Wall St. criminal class? If he does would that change your mind on the Consumer Financial Protection Bureau?
McGraw-Hill Companies, Inc. (MHP) 50.30 Down 8.04(13.78%)
Moody’s Corp. (MCO) 49.45 Down 5.90(10.66%)
I’m crying tears of joy!
I JUST now read that on the google news aggrator page. Awesome. The ratings agencies were so complicit in this whole debacle.
But I also think it has something to do with their downgrades of US gov financial instruments and sadly, I think if they hadn’t done that, they’d be left unmolested.
I don’t buy the spin this is payback for the downgrade. Bonds went UP after the rating cut, kind of weird huh?
I hope this dominoes down to the local level. Remember, it was local housing appraisers that let the banks and tax assessors just run wild with prices. A good appraiser should refuse to be an accessory to fraud. The appraisers are/were the last line of defense for the majority of consumers who must buy or sell RE.
Agreed, shoot the messenger.
“But I also think it has something to do with their downgrades of US gov financial instruments and sadly, I think if they hadn’t done that, they’d be left unmolested.:
this would be the case…if they don’t “sue” anyone else.
you mean i can stop calling him ohbewanna…..will hellll freezer over soon?
I am noticing a new scam by our local realtors. A 2800 sq ft ugly house built in 1959 with wood paneling and 25 acres was sold for $200K in 04. The realtor listed the house for 425K for a month then removed the listing knowing very well that the house would never sell for that price. The houses around Syracuse NY listed for $425K are usually newer built 3500 to 4500 sq ft with a swimming pool in decent school districts. The realtor a month later lists the same house with a price drop to $269K. The mortgage owed to the bank is $268K in this case bank of America. The house had been refied in 04 as it had been bought the previous year for $150K. She also lists sold as is. Out of curiosity I spoke to this fat old ugly stupid women realtor and she was very upbeat saying that they had dropped the price from $425K. I chuckled and asked her about comparing to houses that were listed and sold for $425K. She got quite and then said the land was the reason for the higher price and the wood beams and siding inside the house were unique. The unfinished renovated bathroom had a pedestal sink. I pointed out the farm land near this house was $500 an acre at tops. She then mentioned that she was showing the property to 2 other perspective buyers.
I wanted to say the hbb saying “ box of stupid and bucket of money” however the gentleman in me refrained.
Heads up. SUGuy is on to something.
I received this email from a realtor THIS AFTERNOON(different state) with the same SCAM.
Im going to send you a listing that is a foreclosure in [redacted]. It is a very big home and has [redacted]; bordering [redacted] The development rights are sold so it will always be preserved. This is a very desirable location. This home was listed in 2006 for 450k it will be re-listed for 294. It will need under 30k to make it nice. Im going to send you an old MLS sheet so you can see it. I will send you the new MLS sheet tomorrow.
This scamming realtLiar sent the cut sheet link from the supposed listing in 2006 which I PDF’ed. Time to do some digging.
Folks….. this is desperation. It really is that bad out there.
Look at the price drops. This house was owned by the local free news paper owner.
This one below was lowered to $535K and it has not sold. The new realtor who is the wife of the owner also the local builder has raised the asking price by $50K now claiming they will renovate the kitchen. However no kitchen has been renovated. Another realtor BS. The lies these realtors tell are amazing and dumb. IMHO
Not sure if this has been posted but I don’t think many would disagree with this:
Already posted, but worth reposting a few times, as he is one of the few high-level commentators not sticking to the official script.
Regarding the following, what appears to be missing from his analysis is the Fed’s best response to the risk of popping the reflated housing bubble. If raising interest rates would create such a dire picture, why would they ever raise rates again?
And everyone knows by now that the Fed has full control over the full range of durations on the yield spectrum — right!?
“As soon as the Fed has to normalize interest rates, housing prices will stop appreciating and they’ll probably head down,” he explains. “The fast money will sell as quickly as they can and the bubble will pop almost as rapidly as it’s appeared. I don’t know how many times we’re going to do this, and the only people who benefit are the top one percent - the hedge funds, the LBO funds, the fast money people who come in for a trade, make a quick buck, and move along to the next bubble.”
I was looking for a Tony the Tiger They’re Grrrreat! to go with your CRATERRRRRRRRRRRRRRRRR!!!!!! but I found this and liked it better.
Photospeak - Tony the Tiger - YouTube
http://www.youtube.com/watch?v=bZsUoVwWn-M - 128k - Cached - Similar pages
Corporations made a record $824 billion in profits last year as well, while the stock market has had one of its best performances since 1900 while Obama has been in office.
Hey you…. exit here——–> http://www.dailykos.com
The ‘nobody could have seen it coming’ defense is facing some well-deserved scrutiny.
February 4, 2013 7:57 pm
S&P faces DoJ lawsuit over ‘rosy’ ratings
By Kara Scannell in New York
The US justice department is expected to file a civil lawsuit alleging that Standard & Poor’s defrauded banks and national credit unions in the lead-up to the financial crisis by issuing overly rosy credit ratings for mortgage-related securities to win business.
The civil lawsuit would be the first by the federal government against a credit-rating agency. Rating agencies, which are fighting private lawsuits, have argued that the ratings are opinions and are protected by the First Amendment.
S&P, a unit of McGraw-Hill, disclosed it had received a letter alerting it to the DoJ lawsuit, and said it “would be entirely without factual or legal merit”. The agency added: “DoJ would be wrong in contending that S&P ratings were motivated by commercial considerations and not issued in good faith.”
Shares in McGraw-Hill fell 13.8 per cent.
Some state regulators, including California, are expected to join the lawsuit, people familiar with the matter said. S&P has already been sued by the states of Illinois and Connecticut over its ratings and is fighting those allegations.
Credit rating agencies have come under scrutiny for allegedly giving rosy ratings to structured credit products, including collateralised debt obligations, in order to win fees.
The DoJ is focusing on about 30 CDOs issued in the first half of 2007, a person familiar with the matter said. S&P said its rivals also gave triple-A ratings, the highest available, to the same CDOs. No other agencies are expected to be charged at this time.
Not sure I have my facts straight here, but wouldn’t a bull run in the value of the dollar potentially open some great stock market bargains for anyone who didn’t already go all-in on stocks?
Must be getting close to the time for dips to buy…
Feb. 4, 2013, 8:36 p.m. EST
Consequences of a strong dollar
By Andy Xie
BEIJING ( Caixin Online ) — Since the end of the Bretton Woods system in 1971, the U.S. dollar has experienced a bull market twice. The first one in the 1980s was due to Paul Volker’s high interest-rate policy to cure chronic inflation. The second began in the mid-1990s as the information technology revolution sucked investment into the United States.
The coming dollar bull is due less to the United States’ strengths than the weaknesses in other major economies.
Since depegging from $36 per ounce of gold, the dollar has been in bear market 70% of the time. The reason is that the Federal Reserve has a dual mandate of maintaining price stability and full employment. Hence, the Fed is more tolerant of inflation than other major central banks.
Its dual mandate is helped by the dollar’s unique status as a global reserve currency. Its loose monetary policy doesn’t trigger capital flight like in an economy with a normal currency.
Regardless of economic strength, a central bank more tolerant of inflation tends to produce a weak currency in the long run. Germany and Japan were vigilant against inflation. Most of the appreciation of the yen and mark against the dollar could be explained by the inflation differences with the United States.
Paper money not anchored to gold is a recent phenomenon. During its 40-year experiment, paper currencies have depreciated greatly against gold. When we say a currency is in bear or bull market, this is relative to other currencies.
Paper currencies as a whole have been depreciating in value due to inflation. This is why gold is up 45 times against the dollar since the gold standard was abandoned four decades ago. While gold fluctuates in price and enters bear or bull markets alternately, its value will appreciate against paper currencies in the long run because, without a firm anchor, central banks inevitably expand money supplies to fix short-term problems and worry about inflation later.
The dollar bull market ahead is one of those episodes that will see the dollar outperform other major currencies. In the long run, the dollar will still underperform, and paper currencies in general depreciate in value.
Countdown to Sequestration: One Month to Go!
By Mark Thompson
Feb. 04, 2013
OK. If you want to get picky about it, this is the same headline we ran two months ago here.
But some things have changed since that original headline went up. Congress, in its infinite wisdom, chose about a month ago to kick the sequester can down the road until March 1.
That means something like an additional $600 billion in Pentagon and related security-spending cuts over the coming decade were delayed by some 60 days. The only way to avert them is if Congress and President Obama can come up with a $1.2 trillion deficit-reduction package by then.
Attended a great talk tonight at USD on the history of Price Club and Costco stores, both San Diego inventions. Robert Price, the son of warehouse shopping visionary Sol Price, was on hand to sign copies of the newly released book he wrote about his dad.
I had to fight off a strong urge to buy a copy of the book for $20 and get it signed…but I know I will be able to buy it for 50% off in just a few months, so why hurry?
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