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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Buy a house today and your losses will be incalculable.
Is this the year without summer in the East ? Like in 1816-1818 .
Probably not , though it seems spring just won’t come . Last year this time we were already camping at the local State park , with tents and comfortable , campfires at night.
We in this part of upstate SC have had no snow this year , but real chilly mornings , down to freezing .
Compared to the snowstorms still raging in the northeast, we have got it good , I suppose.
The weather on earth is so screwed up that even the sun is acting wierd.
The debt clock is leaping forward.
Report your stealth inflation here.
The store brand of prepackaged cold cuts at the grocery store “contain up to 15% solution.” *sigh* I long for the good old days when cold cuts contained up to a 7% solution. At least the name brands of cold cuts are better. They “contain up to a 14% solution.”
bought a kit kat lately?
I don’t know Kit Kat specifically, but candy bars label ounces to 2 decimal places now.
I took my daughter to the mall last weekend and was distressed to realize that in all but one store everything we looked at looked like absolute junk. Very poorly constructed, the materials practically see through. Funny, Macy’s was the one store the downgrade in quality wasn’t quite as extreme.
I keep getting these flashes in my mind of a decade or more back when I used to look at magazine photos of Asian women in China or The Phillipines, notice their cheap shoes and clothing and feel sorry that was all they had. Now I feel close to living that reality myself. As items wear out the options to replace are less and less desirable. It’s a real lesson in currency debasement.
We still enjoy having a butcher shop here. Cold cuts are 100% meat, with no liquid injected (if you choose). I hate paying meat prices for saltwater.
I hate paying meat prices for saltwater. Would it ease your mind if you thought of it as ‘hedonic quality adjustment’?
Seems like Eric Holder’s admission that the largest investment banks are too big to jail is further proof that the Geithner Doctrine will continue despite his departure. Our venal congress can’t be counted on to do what Obama should have done, i.e., break up the To Big To Fail banks.
when did he admit this?
i must have missed that.
http://www.marketwatch.com/story/holder-admits-mega-banks-are-too-big-to-jail-2013-03-07
thanks for the link…i guess elizabeth warren got her answer.
Obama is a failure.
How about a national “Make It Go Wrong” day for the rest of us?
I was thinking about the 1%, or the hellish alliance of Washington and Wall Street and how failure at that level just seems to get repeatedly rewarded, while the whistle blowers are punished within an inch of their lives and livelihoods. Non-enforcement of immigration laws, stagnant or decreasing pay for many, foreign H1-Bs brought in to compete with citizens in the better paying fields, lousy products from China, crap that doesn’t work or falls apart, internet services forcing their “customers” into crappy situations while dealing with all sorts of glitches(ebay, FB, Google, etc.), lousy paying service jobs, companies reneging on pay raises, pensions, etc. major cities in the US becoming bombed-out slums. Paying more, getting less. Manipulated gas prices every day. Rotting infrastructure. I can go on, but feel free to add to the list. My point is that there’s an awful lot of “make it go wrong” at the “elite” level and has been for a while.
But, somehow, things still work in day to day life. Why? Because the “Main Streeters” still do a relatively good job at grunt level. They manage to get to work despite the rise in gas prices, accept less job security, deal with financial problems, crappy school systems, all that. But they still do what they’re supposed to do, ring those cash registers, help customers or clients, teach and care for kids, make sure the traffic signals work, the computer systems going, close the deals, install the equipment, do the clerking, enter the information etc. etc. All these people, the despised 99% (or maybe it’s 55%, if you take away those on public dole) make it go right, under constant threat. There seems to be some sort of compact that the elites can screw up all they want and still get paid, but the rest of us have to do their jobs. Why is that?
What if, for one day, they made it go wrong? Just didn’t code properly? Just “forgot” to enter some piece of crucial information? Jammed the cash registers? Messed up the travel reservations? Cut the wrong trees, installed the equipment improperly? Screwed up the bank deposits? “Lost” the necessary part for the job. Just, whatever grunt work they do for lousy pay, they just didn’t do it right?
It’s been suggested that a “national” strike by regular working folks would never happen, and I agree. But a national “Make It Go Wrong” day might work. It’d be even better if folks weren’t obvious about it. Go ahead, show up for work. Do your job. Mess things up, but covertly. You can always say you “made a mistake”. Or “misspoke”. Happens to everyone, right? After all, the example is set from the top and we’re just following the examples set for us. Even more fun would be not knowing who was going to participate. And hey, it’s only for one day. The “elites” do the nasty EVERY. SINGLE. DAY!
I do realize that such an event would perhaps penalize fellow members of the 99%. (or 55% or whatever). But I think it would be interesting to see how it affects the elites. They expect “stuff” to work and computer glitches and inconvenience drives them bug-fark. How can we drive them even more bug-fark than they already are? We can’t trust them, but THEY sure trust us to be schmoes and do our jobs right. Maybe it’s time to return the favor.
I’d say April Fools Day would be an awesome date. And if you’re Jamie Dimon’s barber, could you see your way clear to give him a lousy haircut? By mistake, you understand.
I can go on ??
Oh my goodness please don’t Palmy…That first paragraph was bleak enough… :>)
Hey, it probably wouldn’t work. Because it’s the natural inclination of most decent people to do things right and take into consideration their fellow man. At least here in the US. Which is probably why we even still have a US.
Might be more constructive to have a national post-a-bumper-sticker-on-a-1%’ers- car day. I did not just endorse doing that……
I could see a bumper sticker that says ” My 2nd grade child got beaten up by some 1%’ers child.”
Combo’s bleak first paragraph reads remarkably like a paragraph in 1984. I don’t have the book with me so I can’t quote it, but Orwell’s paragraph has much the same language of [parapharse] “boots falling apart, socks with holes, filthy Tube stations, cigarettes where the tobacco fell out, never enough to eat, bad-tasting coffee, tinny music, all the while listening to Telescreen reports about filled quotas and the abundance of our glorious future.” (something like that.)
Was there anything in my first paragraph that you feel is false, exaggerated or untrue?
Or should we perhaps confront the fact that 1984 is here?
(even though it might not be “quite that bad yet”)
I think Gerald Celente was on point when he said, “When people have nothing left to lose, they lose it.” Just flip that over. The majority still do have something to lose. While they still have a house, food, their cars, a sort of working credit card, their income, they will not lose it. They will suck it up out of fear of losing even the more imporant things and not just the discretionary.
“They will suck it up out of fear of losing even the more imporant things and not just the discretionary.”
I agree, which is why I’m making this a modest proposal. It gives the fearful a buy-in, a way of protesting without becoming a target. Who’s to know WHO it was who really screwed things up and after all, it could have been a mistake. “I’m sorry, Mrs. Gotbucks, I thought you said_____________, not _______________”.
“No, no, driver, LaGuardia, not Kennedy!”
“Who was the idiot who forgot to save the file?”
“I’m sorry, officer, I don’t know why the engine died. They just don’t make cars like they used to, can you help me push it out of the intersection?” (Lol, I was in that situation one time. Had a cop screaming at me to get that %^&*# car off the road, never seen anything like it and the traffic back-up was awesome. BTW, the officer won’t help you.)
“I’m as mad as hell and I’m not going to take this anymore”
http://www.youtube.com/watch?v=ThB0uAbjhGY
But a national “Make It Go Wrong” day might work.
In Europe those are called “strikes”
“In Europe those are called “strikes”
But we are not Europe and although the idea of a national strike by regular working folks has been floated over the decades, a strike as such wouldn’t work. You’re always going to have those folks who won’t participate, even if they may want to, out of fear or whatever.
What I’m suggesting is a far more modest proposal: a national day of incompetence and unfairness, so to speak. For us. It’s only one day, after all. Nothing like the 24/7 grinding down we get from the elites in Washington, Wall Street and the media, even from the middle managers who like to ape their betters. Nothing overt like a strike. The beauty of it is, it’s a suggested sort of thing. One that people can chew around and decide if they want to participate or not, even in some small way. Part of the fun is not knowing who is really participating, or who really screwed up the computer system or the phone system or the traffic lights or the wireless network or the sprinklers or the deliveries, etc.
I think just the idea of such a thing might get some attention and create a little anxiety for the big boyz and girlz. Kind of like Y-2K.
a national day of incompetence and unfairness, so to speak Every day is like that in New Mexico!
Ha-ha, yes. But I’ve had the opportunity in recent years to observe, albeit somewhat vicariously, attitudes of management in both small business and chain retail settings. Mind you, I’ve seen some great managers. But the majority, not so much. How they got their gigs, I have no idea. And if it weren’t for their underlings, they’d be nowhere. In fact, the general operating basis for some of these mopes seems to be to see how difficult they can make it on their underlings, for no good reason. Disgusting.
I try to Make It Go Wrong every day.
I don’t borrow.
It’s a lonely battle.
But it’s your little way of sticking it to the man! Good on ya!
This is brilliant, Palmy! “Make It Go Wrong Day.” Let’s see if America’s disgruntled inner vandal can ruin what’s left of its infrastructure, supply and distribution chain, research-in-progress, emergency services, communications networks, etc., all to spite the face of its .1%. (That’ll show ‘em!)
And of course we proactive anarchists will all have the restraint and thoughtfulness to limit ourselves to inconsequential and non-idological mischief only.
Guy Fawkes Lives!
Well, to be sure, I will very much miss the HBB that day if it goes off line.
I guess it would be a form of civil or social disobedience. But, not to worry, this is purely an intellectual exercise here. Your reaction to such a modest proposal does foreshadow that it would be greatly frowned on, even by those being ground down. Why, the VERY idea that regular folks should do the same as their “betters”, and only for a day, no less!
What would you suggest, then? Oh, wait, I forgot, your preference is surgically precise drone attacks. Yeah, that’ll show ‘em.
And don’t panic, hansen. No way this is going to end up as the weekend topic and you know it. I just think it would be interesting to contemplate what would or could happen if regular working folks screwed up on a massive basis like the elites. The road goes both ways. And I guarantee you John McCain and Lindsay Graham would have an aneurysm if their drivers were late or the car wasn’t clean enough or the staffer messed up the speech.
Don’t we have a day for the 99% already? I believe it’s called Labor Day. We could just all participate by either not going to work and/or not participating in activities(shopping, dining out, movies, etc.) that eventually result in trickle-up (to the 1%) economics.
“Don’t we have a day for the 99% already? I believe it’s called Labor Day. We could just all participate by either not going to work and/or not participating in activities(shopping, dining out, movies, etc.) that eventually result in trickle-up (to the 1%) economics.”
Wouldn’t be a bad idea, except it seems like there’s nothing a business likes to do more than schedule their personnel to work on Labor Day! You know, to squeeze some consumer $$ out of those who have the day off and go shopping.
I just wonder if anyone has some data on how Labor Day as a shopping day has reached the point of diminishing marginal returns.
I just wonder if anyone has some data on how Labor Day as a shopping day has reached the point of diminishing marginal returns.
This whole economic crisis/disaster illustrates how we have gone PAST the point of diminishing marginal returns. We have a long way to go before the majority realizes that and acts accordingly. There is still a lot of juice for vampire squids & their wannabees to suck out of the system before it’s GONE.
Who said I disapproved?
And I favor treachery over violent response any day….
You did, although not in so many words. But I’ll grant that you do have a point, and I actually agree with you there (gasp). How do you pull this off without seriously damaging your fellow man who did no harm?
If anyone has any ideas, I’d like to hear them. Lol, how does that surgical drone attack work again?
Writing of treachery:
Was gonna say, confronting a grizzly with a Beretta would likely be about as useful as coming at it with a SooperSoaker. Quite possibly the most inaccurate firearm since the dueling pistol.
As to Palmy’s query, gross inconvenience leading to job creation would likely be the best use of one’s malicious creativity.
Offhand one can think of, but strongly disavow:
-Replacing the golf course grounds keeper’s spray-on turf-builder with Roundup.
-Adjusting the auto-paycheck code slightly in favor of the rank and file
-Running out of gas at the bottom of the Wilshire off-ramp at morning rush hour
-”Clean up in aisle 3…7…14…”
-Superglue in appropriate keyholes
-Reprogramming the “your call is very important to us; please make your selection from the following menu” playlist
and so on
Palmy’s picks:
Replacing the golf course grounds keeper’s spray-on turf-builder with Roundup.
Oh, what the heck, they’re all brilliant. Especially running out of gas at the bottom of the Wilshire off-ramp at morning rush hour. Although something tells me the vehicle would be stripped in a wink.
Peggy Noonan in the WSJ wrote of this situation:
I see our economic crisis as debt/deflation causing economic stagnation causing cost-cutting & a refusal to hire, complicated at multiple levels by ever-increasing energy costs, but that’s just me.
“I see our economic crisis as debt/deflation causing economic stagnation causing cost-cutting & a refusal to hire, complicated at multiple levels by ever-increasing energy costs, but that’s just me.”
I agree. The 24/7 business cycle is a big part of it, I think. That’s an awful lot of lights and heating/cooling systems to keep operating, among other things. And probably unnecessary.
And the amount of plastic used. Sheesh. For EVERYTHING, just about.
The Peggy Noonan essay is good, sort of expresses what’s going on.
It also speaks to the situation of people being made to do more while getting paid less, with less support or back-up. And folks cheerfully do this, and try to keep the show on the road.
I’m sort of a Craigslist junkie, it’s an occupational hazard of the “stuff” business. I once saw an ad on there for what I call a “zombie job”, you know, one of those “performance-based” jobs where you work on commission only or mlm or some such bogus pseudo-employment. (And I suspect those commissions sort of magically evaporate, too.)
Anyway, the prick who wrote the ad said something about America adjusting to the reality of the “new, performance-based economy”. (in other words, commission only for selling our crappy product or service) What an a-hole. We USED to have a performance-based economy. What we have now is a grifter-based economy.
“It also speaks to the situation of people being made to do more while getting paid less, with less support or back-up. And folks cheerfully do this,…”
That’s my life. I stick to it, though not cheerfully.
Nobelist Doris Lessing wrote a novel “Memoirs of a Survivor” published in 1974.
From wiki:
I first read this novel long before the economic crisis was noticed, and it formed my comprehension of our situation as it has unfolded.
Another strong influence on me was the movie “Little Big Man” which I saw on its first run, especially this scene:
Old Lodgeskins, holding up a white man’s scalp:
But it’s not about white men vs. everyone else.
“What that hotel looked like is America without its muscle, its efficiency, its old confidence.”
Actually, that hotel is America *with* its efficiency. If people will stay in a hotel with only a bare bones staff, then why should they spend the money to provide better? Only the share holders matter.
that hotel is America *with* its efficiency
“Efficiency” is being defined “down.”
This topic is not new to us here but its coming front & center in D/C….We are going to get something big IMO…Its going to deal with the tax code and entitlements….
So, what will be the short and long term impact…What if the Mortgage interest deduction goes away…@ 3%, it may not have that much impact on housing…What if those interest rates were 6% or 7%…
What will happen if the $500k exclusion is eliminated starting in 2014 or 2015…Could we see a rush to the exits ??
Or here is another topic;
The Federal Reserve’s ‘Fiscal Crunch’ Trap - Wall Street Journal
online.wsj.com/…/SB1000142412788732433860457832603125545…16 hours ago – In The Wall Street Journal, David Greenlaw, James D. Hamilton, Peter Hooper and Frederic Mishkin write that high debt loads and rising …
“$500k exclusion is eliminated starting in 2014 or 2015…Could we see a rush to the exits ??”
Chances are high that any such change that is adopted would be phased in gradually in order to avoid a rush to the exits…
Yeah, I suspect your right Pbear…But, even with that, would their not be significant motivation to get out earlier rather than later…
I wouldn’t be surprised if it was a 10 year phase out. If they do it at all.
That would fit with the “we’ll reduce the deficit over 10 years” theme.
Exactly
Question, you only get the $500k exclusion for your primary residence…wouldn’t any “rush for the exit” also include a “rush to enter” in the same market?
If you are sitting on a big gain in the house you live in, and decide to sell to lock in the free $500k, you then need to find another place to live.
Would love to see this discussed. Second homes…NO! Limit of $417,000…YES!
Chances of compromise?….NEAR ZERO!
Whose job is it to “set the price right” when the gold price crashes through the plunge protection floor?
Wouldn’t a strong jobs report normally be good for gold prices, due to sparking inflation fears? My hunch is the gold bugs smell a stronger case for ending QE3 sooner.
March 8, 2013, 8:44 a.m. EST
Gold tumbles after better-than-expected jobs data
MADRID (MarketWatch) — Gold prices dropped sharply on Friday after data showed a much stronger-than-expected rise for nonfarm payrolls. Data showed the economy added 236,000 jobs in February and the jobless level fell to 7.7%, the lowest level since Dec. 2008. Economists had been calling for gains of 160,000. April gold (GCJ3 -0.03%), up $1.70 and a hair under $1,600 an ounce ahead of the move, fell $9.70 to $1,565.40 an ounce. May silver (SIK3 +0.63%) fell 37 cents, or 1.2%, to $28.45 an ounce. Silver was down 1 cent ahead of that data.
Gold down 7.5% since one year ago. Beautiful for us gold buyers!
http://www.kitco.com/ind/Trendsman/20130308.html
For how much longer is the sequester stock market rally going to continue?
March 8, 2013, 11:52 a.m. EST
Fed’s Bullard sees continued bond buying
By Greg Robb
WASHINGTON (MarketWatch) - The Federal Reserve is likely to continue with its $85-billion-a-month bond buying program, said James Bullard, president of the St. Louis Federal Reserve Bank, on Friday. “I think it’s going to be a while on the QE program,” Bullard said in an interview on Bloomberg Television. The Fed has said it will review its asset purchase program, known as quantitative easing, at its two-day meeting on March 19 and 20. Some Fed officials are worried that the program is fueling financial instability. But Fed Chairman Ben Bernanke and his allies have signaled that tapering the purchases too soon could damage the recovery.
Is there anyone who can offer a reason to not go 100% into stocks at this point? After all, the Fed is all-in with QE3 for the next several years, the jobs picture is improving, and soon there will be a lot more Mom and Pop investors crawling back into the stock market to profit from the rally.
Where is the downside to gambling in stocks?
Where is the downside to gambling in stocks?
Just that the real crash might happen so fast you can’t get out. The managed crashes of the recent past have made it look like you can always get out any time you want.
Yup. They can suspend trading for a few days and then when it reopens you get a Southpark “Margaritaville” moment (Aaaand its gone!)
“Just that the real crash might happen so fast you can’t get out.”
Well yeah. And being the true believer I am in Murphy’s Law, I just KNOW the real crash would start shortly after I went 100% long into stocks. Think of the Japan experience from 1989-2013, for example. I’d doubtless be like the guy who put 100% of his savings into the Japanese market in 1989.
Good topic, IMHO.
Keep relatively tight stops if you are afraid of big drops in the overall market if you are going all-in. I’m all-in, but have been for a while, and so I don’t want to be stopped out into paying a big tax bill…but if I were going to get into the market now, I would be wary of a big 10%-20%+ move downward.
I was just at a conference with a lot of very experienced people…the consensus was storm clouds ahead…although no one felt they were so smart as to be able to call a top.
One guy was notably fairly positive. Noting, among other things:
Equity flows have been below the long-term trend (by about $1T over the prior 3-4 years)–flows into Bonds have been way above the trend–any reversion to the mean would help equities/hurt bonds.
Foreign flows are going into bonds and selling equities…historically you would do well if you did the opposite of what foreign money does.
Noting in the C + I + G + Net Exports equation, you have:
C: Up with housing improvement…4% increase in home prices results in 1% increase in consumption–increase in home construction will improve job formation. He spent about 1 minute on housing in a 30-40 minute timeframe…he wasn’t boosting housing, but just noted the trends in the market.
I: Factory utilization is 4 points higher than in 2004 (before the last boom in corporate spending)…he thinks business investment could surprise to the upside…currently the US investment as a percent of GDP is the lowest in the world…bank lending is up also.
G: While government spending is down, C+I increases should offset
Net Exports: Shale Boom, increasing exports, and cheap natural gas leading to being able to produce more chemicals here
Now, he was the lone voice–most others were noting everything that we more typically read (higher taxes, lower government spending, etc.)–which is why I noted this guy as a contrary opinion.
The irony of investing in stocks and such is in this environment is the perception that the higher the price the more attractive they seem to become.
Drag out chart the shows a rising line and people can be enticed by the two-and-twenty crowd to jump in and ride this rising line. The higher and steeper the rise of the line the more attractive the line becomes. The more attractive the line becomes the greater the number of people that are enticed to ride the line, and as more people are enticed to ride the rising line the furthur the line rises. There is a positive feed-back loop in operation here which will keep on working to push the line up until at some point it doesn’t push it up any more. And at this point the buyers will become sellers.
The next question that needs to be asked is: Sellers to whom?
If the main attraction of buying stocks is a rising line and the line is no longer rising then what becomes the main attraction to buying stocks? The answer may be fundamentals and if fundamentals is the answer then the price will have to drop a whole bunch in order for fundamentals to make sense and assert itself. IMHO.
If there is no end to a rising line then it would make good sense to put all of one’s money onto riding the line because if the line is forever rising then it would not be possible to lose money - the line could never be overpriced as long as it is forever rising.
But if the line is not forever rising then that must mean that the line has a top. And if the line has a top then that means the higher the line rises the closer to the top it gets. The closer to the top the greater the risk. And at the top the risk becomes 100 percent.
Financial Times
March 8, 2013 1:21 pm
Stock market hares sprint to record highs
By Michael Mackenzie and Arash Massoudi in New York and Michael Stothard in London
Stock market hares have sprinted into March, sending global equities towards multiyear highs and New York’s venerable Dow Jones Industrial Average to a new record this week.
US, Japanese and German shares are setting the pace. After a pullback in late February on renewed crisis fears in the eurozone, stocks have recovered their footing this month, underpinned by central banks affirming their support of the global financial system via “quantitative easing”.
Indeed, with the world’s biggest central banks covering the exits in an environment of slim returns on bonds and savings, the main argument in favour of equities is that they are the only asset class worth owning in such a yield-starved environment. And as the Dow hit an intraday record high, some even began to ask, slightly tongue in cheek, if the US stock market was the new haven for investors.
Purely from a valuation perspective, the case that equities look reasonably priced, even after their recent strong gains, is compelling.
In a world of artificially low bond yields, stocks look compelling with an earnings yield of the S&P 500 above 7 per cent. While QE is distorting bonds, the point made by bulls is that stocks are a better long-term bet, notwithstanding their rebound since 2009. “We think the market has room to go. It’s still just best option out of any asset class,” says Andres Garcia-Amaya, global market strategist at JPMorgan Funds.
…
I don’t get the argument that “central bankers cannot trump fundamentals.” It appears that is their primary modus operandi.
Stock Market Rally Holds, Central Banker Put Firmly in Place
Thursday, 7 Mar 2013 | 2:07 PM ET
By: Bob Pisani
The Bernanke-Draghi put: still very real, still very effective. It’s happening again: a central banker (ECB’s Draghi) speaks, confirms he is keeping rates low; the currency and stock market moves up.
Why haven’t the sequester and budget debates knocked down U.S. stocks? Why hasn’t the uncertainty of the Italian elections knocked down Europe? Because the Bernanke-Draghi put–loose monetary policy–remains in full effect.
And what a success it has been: the last truly rocky period was in August 2011, when S&P downgraded U.S. debt and Europe looked like it was falling apart. But both of these problems were due to government inaction, not central bank inactivity.
What happened? Bernanke and Draghi again stepped up with more monetary easing.
And they are continuing to execute the put option. Bernanke did it last week when he reiterated that it was essential not to begin an exit strategy too early. Draghi did it today when he reiterated rates would remain low.
Central bankers might be able to calm markets–and to influence stock prices–but they cannot, by themselves, trump fundamentals.
…
I don’t get Roubini’s argument that bad fundamentals will somehow sink the stock market. Doesn’t he realize central bankers are working 24/7 to lean markets against the wind of fundamentals? Or is his argument that such efforts are eventually doomed to fail?
Roubini sees market correction in 2nd half of 2013
March 8, 2013, 6:06 AM
Dr Doom says the U.S. fiscal drag will eventually catch up with the stock market.
In a CNBC interview on Friday, economist Nouriel Roubini, who is known for his pessimistic outlooks, hence earning his nickname (Remember, he called the global financial crisis back in 2006), says investors should prepare for disappointment later this year.
Speaking at an international economic conference, the Ambrosetti Forum, held on the shores of Lake Como, Italy (poor guy), Roubini warned that higher taxes and spending cuts will knock U.S. economic growth this year.
“Payroll taxes, taxes for the rich, are going to significantly reduce disposable income, and retail sales have been a disaster,” Roubini said.
Well he must be pretty concerned, because he said something similar to Bloomberg last week. He also gave an interview to Bloomberg News on Friday in which he predicted a bigger economic bubble coming in 2013 than 2004.
“And there are already signals of consumption growth slowing down, as well as the sequester, and the fiscal drag this year will be 1.5% of [gross domestic product] for an economy that was barely growing last year,” he told CNBC.
At best, the U.S. economy will grow 1.5% in 2013, Roubini predicted.
…
Bill Gross just increased his GDP growth projection from about 1.5% to 3%…
Will Gross be right? Or Roubini?
As I once heard someone say, Roubini predicted 5 out of the last 1 recessions.
Stock market taking on those who sold gold. Stocks going up, gold going down. There will be a switch sooner or later.
If Rand Paul keeps his momentum and his word, this is just the beginning. The drone stuff for one. Obamarx is a lame duck. McSame proved to be a bedfellow of Obamarx. The Goldwater side of the are publican Party must come back or the RP will die. This is what Rand Paul suggests. Judging by the million tweets during his filibuster, he resonated with the populace upset with the mainstream politicians.
If Rand Paul succeeds we will see a good change in 2016. In both parties.
Will the duopoly GSEs soon be replaced by a too-big-to-fail monopoly GSE?
Fannie And Freddie Enter Merging Their Failures
Posted 03/07/2013 06:44 PM ET
Too Big To Fail: Finally, something is being done about Fannie Mae and Freddie Mac five years after they caused the mortgage crisis. Downsizing? Privatization? Nope, they will enter into a megamerger of failure.
It was years ago that President Obama pledged to “reform” the toxic twins.
But his regulator is combining them into an even bigger Democrat piggy bank for “affordable housing.”
…
How do prospects look for breaking up too-big-to-jail banks into small-enough-to-prosecute parts?
SAFT ON WEALTH-How you are paying for ‘too-big-to-jail’
Fri Mar 8, 2013 11:36am EST
By James Saft
(Reuters) - Now that it is official that the U.S. Justice Department pulls its punches when it comes to prosecuting the largest banks, it is time for investors to understand why they, too, are the losers.
Attorney General Eric Holder came right out this week and told the Senate Judiciary Committee what many observers have long suspected - that his department has refrained from more aggressive criminal prosecutions of the so-called too-big-to-fail banks, exactly because of their special status.
“I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that … if we do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy,” Holder said on Tuesday. “I think that is a function of the fact that some of these institutions have become too large.”
Lawmakers have expressed surprise that no corporate or personal criminal prosecutions emerged from the HSBC Holdings Plc case, in which the bank was fined $1.9 billion over money laundering, including money from Mexican and Colombian drug cartels.
Justice Department officials also cited economic stability concerns in December when announcing a $1.5 billion fine, but no criminal charges, against UBS AG, in a multiyear scheme to manipulate Libor and other benchmark interest rates.
In short, we have the top law enforcement official in the United States admitting that if a bank is big enough and systematically important enough, it will not be subject to the same laws as the rest of us.
First of all, it is Holder’s job to enforce all laws - not just the ones that he thinks are consistent with financial stability.
Secondly, he is almost certainly dead wrong that slamming a too-big-to-fail bank with a criminal prosecution would hurt the global economy. Indeed, it is quite the reverse.
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First of all, it is Holder’s job to enforce all laws - not just the ones that he thinks are consistent with financial stability.
Secondly, he is almost certainly dead wrong that slamming a too-big-to-fail bank with a criminal prosecution would hurt the global economy. Indeed, it is quite the reverse.
First, Holder could have already been impeached by the House of Representatives, but hasn’t been.
Second, I believe Holder IS right. Cracking down on the Vampire Squid WOULD hurt the national & global economy. For a while. Pain, hatred & discontent would be bad for a while. IMO, biting the bullet would be less destructive than continuing to kick the can down the road until a full-out economic collapse occurs.
“Pain, hatred & discontent would be bad for a while. IMO, biting the bullet would be less destructive than continuing to kick the can down the road until a full-out economic collapse occurs.”
I finally got around to tackling Les Miserables, one short chapter at a time (makes for good bedtime reading!) — 45 pages down, 1418 pages to go.
Victor Hugo wrestles with similar issues regarding the French Revolution, given how the people suffered as a result.
QE3 is working!
March 8, 2013
Household net worth highest since 2007
Thanks to higher U.S. stock prices and rising home values, U.S. households’ net worth rose almost $1.2 trillion in the fourth quarter to reach $66 trillion, the highest level since the fourth quarter of 2007, when the Great Recession began, according to Federal Reserve data released this week. As shown in the chart to the left, households’ net worth in the fourth quarter increased 9% from the same period in the prior year. Net worth measures the difference between assets and liabilities. According to the Fed, the value of households’ holdings of stocks and mutual funds rose $130 billion, while the value of households’ real estate increased $480 billion. Read more about net wealth. Read the Fed’s report.
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Here’s a little data point for y’all: Among other things, I write copy for websites. Which means that I get more than a few inquiries from the SEO (search engine optimization) companies.
Now, truth be told, I did have a site that was ranked #1 in Google for several years, and that wasn’t just my doing. (I had a great SEO guy who was also a dear friend. Alas, he died in 2006.)
So, let’s just say that I know enough about SEO to be dangerous.
Earlier this week, I got an inquiry from a company wanting to know about my level of expertise in:
- Real Estate
- Automotive
- Chiropractic Care
- Laser Hair Removal, skin care, tattoo removal, etc
- Custom Window Treatments
What do all of these industries have in common? Well, they’re highly competitive. Meaning that it’s difficult to get your website to rank well in the search engines.
They also have way too many people in them for the amount of business that’s out there. That’s especially true in real estate. You’ve probably heard that expression, if you don’t have any friends in real estate, you don’t have any friends.
However, they could be indicative of a growing economy. After all, window treatments weren’t exactly in demand back in 2008 or 2009. Likewise, autos. Sales haven’t exactly been booming for a while.
So, I told this particular company that the above industries are not within my area of expertise. Instead, I concentrate on STEM (science, technology, engineering, and math) and green (meaning environmentally-oriented) businesses.
“Chiropractic Care”
With the rise of HD plans, Chiropractors must be sweating bullets.
I’m getting a lot more “50% off your first visit” cards from dentists in the mail these days. They all mention their cosmetic services as well.
That’s probably why they’re turning to search engine optimization. They really need to ramp it up on the promotion.
And people tend to search for chiros when they REALLY need one. Sort of like how people used to use the Yellow Pages.
I posted before but this could be a good weekend topic
favorite “oil city ” ie low cost city without big problems
Good question.
I’m thinking something in Middle Tennessee, North Georgia?
Michael Bloomberg nanny state: has the mayor gone too … - YouTube
http://www.youtube.com/watch?v=drhhxSUk99w - 216k - Cached - Similar pages
1 day ago …
Is It Inevitable That the United States Will Default?
By Paul Solman
With all the talk of the fiscal cliff and the sequester, I respond to a reader who wants to know if the economic dominoes are likely to fall, causing a government default, and I weigh in on why the NewsHour rarely reports on other stock indexes besides the Dow Jones.
Paul Solman frequently answers questions from the NewsHour audience on business and economic news on his Making Sen$e page. Here are Friday’s responses:
Todd Lofton — Lincoln, Neb.: If we must never default, why must we have a president or Congress put our country into a position in which default is a possibility? What will stop them from forcing it? I have seen nothing to convince me it will not occur.
Paul Solman: Nothing to convince you? See if this will this do it: The current price of a bet will pay you $10,000 in the next year if the U.S. does default is $39. On the open market. It’s called a “credit default swap,” which I tried to explain on the NewsHour a few years ago, much to John Stewart’s subsequent merriment on The Daily Show.
In other words, investors who put their money where their mouths are think there’s less than a half-percent chance, Todd, that your country will default in the next 12 months. If you think strongly otherwise, you might ask a broker how to take the other side of this bet. Me, I think the odds are a little higher — that the bet ought to cost even less.
We do not need to default to get out of our debt hole. Various benefit and tax changes could fix the problem. To the extent they’re not made, we can inflate by creating more money, and pay back our loans in devalued dollars.
Hey, come to think of it, isn’t that what we’re doing already?
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If the u.s. defaults, gold will skyrocket.
With regard to the debate on whether U.S. housing prices are destined to go up or down from here, is there any argument over whether the main points of discussion are:
1) will the Fed continue with its extraordinary measures to support housing prices, and
2) is there any chance such ongoing extraordinary measures could fail?
Premiering in the late summer of 1997, South Park took American pop culture by storm with its no-holds-barred examination of social and political issues and its lewd yet unique brand of cartoon humor. Created by Trey Parker and Matt Stone, South Park is the lynchpin of cable network Comedy Central’s original programming lineup. Centered around the lives of several kids in the small Colorado town of South Park (a place prone to odd and paranormal occurrences), the series presents itself in the form of crude animated drawings, yet the concept works, playing home to innumerable well-written shows filled with boundless wit, well-timed one-liners, and an endless array of politically-incorrect humor. Love it or hate it, South Park is a truly original animated series with relentlessly off-the-wall plot twists and comic relief. If you love oddball humor, then this is the show for you….
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