Bits Bucket for March 11, 2013
Post off-topic ideas, links, and Craigslist finds here.
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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Name:Ben Jones
Location:Northern Arizona, United States
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Y’all play nice today.
Buy a house today and your losses will be incalculable.
No way, Jose’!
Why buy a house today? Rent for half the monthly cost and buy later, after prices crater for 65% less.
If prices crater by 65%, I doubt the state of the economy would be such that people would want to buy. It would be even more important to be mobile and also to avoid being on the hook for property taxes.
On the other hand, if prices go up by another 10%, I doubt the state of the economy would be such that people would be able to buy, at least unless Subprime Sam fluffs them with downpayment assistance, federal guarantees, ultra-low interest rates, and compromised underwriting standards.
From yesterday:
“Comment by AbsoluteBeginner
2013-03-10 11:26:19
Hey, how’s the tiny house revolution doing? Admittedly, they remind me of a human birdhouse, but if those suckers can be paid off in no time, screw the government real estate complex.”
Tiny houses — under 500 sq ft — will never catch on. Nobody wants to get water from a jug and use a chemical toilet … AND they cost $25-$30K! — mainly so that they are sturdy enough to transport. You’re much better off buying a storage shed from Home Depot and outfitting it yourself.
Small houses — 500 - 1000 sq ft — have been built as starter ranches and cabins-in-the-woods for a long time. They do well as 55+ community houses or Oil City houses or “pocket neighborhoods” in treehugger paradises like Seattle.
But at the end of the day, they are still SFH. They will never be built in quantity anywhere near jobs. It’s much more profitable to pack people into equivalent 500-100 sq ft attached product.
“Tiny houses — under 500 sq ft — will never catch on.”
They might once Grandma and Grandpa Boomer are too old and decrepit to clean and otherwise afford the cost of maintaining an empty-nest 2000+ sq ft house. I remember the apartment my maternal grandma lived in after she hit the age of 80, and it was definitely under 500 sq ft.
permit and fee costs are rising much faster than bens claim of 2%. The costs before a 2×4 is thrown up are a barrier to entry for the avg joe.
^^^^^^^^
LOL. Ok RentalPimpJr.
A 600 sf house permit in Locaville is $207, Azdude.
That’s about 30-45 6 packs for Joe.
No charge for utility connections if it’s the site of a house that, well, deprciated to zero a couple of years after the owner depreciated herself.
CIBT, you confirmed what I was saying:
I remember the apartment my maternal grandma lived in after she hit the age of 80
Apartment, i.e. “attached product.” There are tiny apartments everywhere because it’s easy to put 800 of them in a high rise on a city block. IKEA, being based in Europe, has a lot of practice furnishing such apartments. But you won’t see many sub-500 detached tiny houses like what Jay Schaffer of Tumbleweed Homes builds.
As for easy-care retirement 500-1000 SFH in the sticks, they’ve already caught on. They’re called “trailer parks.”
The Amish make quite a successful business of these little shelters in my neck of the woods. $15/ft2, overpriced, but very popular.
google woodtex
You don’t need a “trailer park”, if you are a real redneck, you only need an acre of ground and you call it a “campsite”.
In my case, watertight aluminum construction and you call it a yacht. If you want to live cheap, you have to operate outside of the system, because government welfare programs put a price floor under anything considered an SFH.
$15/ft2, overpriced
They won’t give a number officially, but it looks like their cabins are more like $100 to $150 ft2, judging by the $60,000 model shown, which looks tiny. I assume their sheds are cheaper, but I can’t imagine them being $15 ft2.
You could get a lot cheaper with a mobile home.
I was doing the price calculator for a garden shed, not one of the grandiose cabins. I see those things frequently from the road and am not suprised they are outrageous. They display just about everything they offer at roadside.
No one will pay $150/ft2 for a garden shed, but we are programmed to think that a “house” must cost that much (OK some of you are programmed way beyond that). The Amish are not reluctant to overcharge when they can.
It’s to those tiny apartments and retirement-sized housing that demand will flock after Grandma and Grandpa Geezer are too old and decrepit to take care of a single-family home.
I loved my tiny house. It was like a 1 bed apartment on a lot with a garage.
It was perfect for one, so-so for two and not good for three. So we moved. But I wish I had that place now that Jr is gone.
“..or “pocket neighborhoods” in treehugger paradises like Seattle.”
You like to stereotype a lot, and are increasingly wrong in your assumptions.
Met the neighbor who walked away from being underwater, got an FHA loan 2 years later, and after 2 years of owning our same floor plan is remodeling (not what we did but moving walls around).
They got a tour of our home and wanted all my sources, and wanted to copy us. Talk about no imagination and being users.
Nice to know we live among deadbeats.
And he’s underwater again.
Tears of Joy.
Other than an occasional hello, these neighbors aren’t my flavor. We’ve paid our liabilities and taken our “hits” through life. What’s that word…”integrity”.
My newest neighbor is the opposite of this underwater deadbeat. He bought the house across from me for straight cash ($70/sq ft, so yes he was robbed according to RAL). He owns a very popular restauraunt and crab pier in Baltimore (Captain James’ Landing on Aliceanna Street in Fell’s Point) with 2 of this brothers. He also buys severely beaten down houses on the side (paying trivial amounts) and then rehabs them to sell or rent. His wife was pressuring him to move to White Marsh, a suburb that Bill in LA used to live in that is fast becoming an overdeveloped McMansion-y yuppie Hell Hole. But my new neighbor nixed that idea. The guy is a millionaire several times over but spends like he’s living on J6P money earned from digging ditches. I very much support this.
My neighbor on my right basically does nothing but save money. I expect when he dies some distant heir is going to get a massive windfall. He has no kids, has lived in the same house his entire life (took it over when his parents died), and works basically 7 days a week.
The guy on my left is never home; his wife died of cancer shortly before we moved in and I think it really threw him for a loop. He stops in at the house ocassionally but is usually at his daughter’s.
Most of my neighborhood has gone from old retired managers from the big manufacturing plants in the area (Westinghouse, Bethlehem Steel) - mostly German and Polish - to mostly Greeks who have moved over from Greektown where there are no SFRs. As in, zero SFRs in the entire neighborhood.
Thanks for basically posting your address here. Now I know where you live and I’m coming over to steal your gay-azz bicycle from your garage.
Take the bike but don’t touch his harpsichord.
uh-oh, selfpwned.
cue the sad trombone sounds.
wha wha wha wha
You have to push play:
http://www.sadtrombone.com/classic
SCHWEEEEEEEEEEEEET!
‘You have to push play:’
Thanks! That was for me what the Schrodinger equation is for quantum mechanics!
After I moved out of the Baltimore area, my sister moved to Fell’s Point. I have been to the Inner Harbor numerous times since the early 90s but never to Fell’s Pt. Turns out it’s a good walk from there. I visited her once and yes we did some bar hopping on Aliceanna St. My sister lived along the waterfront in a loft.
My guilt is from bugging her to move back to California. She loved her job. A commute to a hospital, but she had a good 4WD jeep Wrangler. Now she’s back in California and working in the gay area (oops Bay area). She does not like her job. Hence guilt.
Like me, she found Baltimore people much more hospital than our native California types.
“Nice to know we live among deadbeats.”
Aren’t you better off knowing? I mean if X% of neighbors are crooks, and now you’ve identified someone who is not trustworthy or at minimum is financially ignorant, that means you’re down to X minus (something) % of unknown scum.
That’s something I’ve always disliked about HOAs making cookie cutters… I really want to know, for my own safety and my families safety, who the local dirtbags are, and lack of property maint (with an elderly correction factor) superficially seems to help.
Or if you think it doesn’t help, for example I’ve got a 8 time DUI neighbor (although when he’s sober he’s actually a really fantastic guy… now if only I could predict when that is?) and a 1%er biker gang guy who might be a crook but he’s a smart enough crook not to S where he sleeps, so I kinda like having him around, oh I’d prefer an off duty cop, but he will do. And there’s the (nice) guy running an illegal cash only zoning violation home based car repair shop across the street. That brings up the other thing I don’t like about HOAs is I’ve learned over many years that being a crook is not black and white (whoops that sounded more racial than I wanted it). Everyone’s a little bent. The DUI guy, the gang member, and the mechanic are great guys 99% of the time. Its that last 1% of the time thats problematic, not some old widow having a lawn cut too high or the wrong species of flower in the garden. I wouldn’t want to run into (literally) the DUI guy on the road or give him a key to my liquor cabinet, or meet the gang member in a dark alley, or have the crooked mechanic “help” with my taxes, but then again I’ve never seen HOA rules that would help with any of that anyway.
Your neighborhood sounds like a real sh*thole. If I was renting there, I would move. Because renting is always better. Always.
Renting is certainly much less costly considering the current massively inflated prices of resale housing.
Renter Watcher
Depends on the variables.
We don’t have a mortgage, so our monthly overhead is cheaper than renting a room. Amortize that over the next 40 years, and in our case, we’re sitting pretty.
Our neighbor is in a great renter deal, but he is waking up to the fact he is getting older, and has no long term solution to housing.
Nonsense. You conveniently left out the fact that you’re already losing money with each passing month.
“We don’t have a mortgage, so…”
You have imputed income, which should place you in a higher tax bracket according some modern thinkers.
I’m going to stock up on some groceries, so that I can enjoy free food next week. Free! Zero cost! Envy me!
And don’t forget to fill your oil tank so you get some free heeeeeet over the next 6 months.
And I’m prepaying for my housing so that I can get 20 years of freeeeeeee rent. Even if renting is half the cost of buying, buying for 20+ years and living free for 20+ years cancels out, right?
buying for 20+ years and living free for 20+ years cancels out, right?
No, it doesn’t. Your losses will be incalculable.
“Because renting is always better. Always.”
Well, my cost basis was the Clinton era so its at least debatable rather than “always”. “Almost all the time” would be more literally correct.
You had a succesful strategy during the years of big inflation and credit expansion, but your original cost basis is meaningless in the analysis of your current financial posture in a deflation and credit contraction.
What do you mean 1% biker gang guy?
He works at Blackstone during the week and rides a Harley on weekends?
The term predates the Occupy Wall Street phrase.
http://m.urbandictionary.com/#define?term=one%20percenter
lol…that’s what i thought too.
the harley riding community is filled with tons of “posers”. some member of some club made a comment once hat only about 1% of the harley biker clubs contain a criminal element. those that are started wearing a 1% patch supposedly distinguishing them as such.
a 1%er is supposed to be “the real deal”.
Which makes me think of the day on a project in NJ when one of the equipment operators…. say 55 years old overweight slob, a bit of a hot head, came in one morning and said, “Yup I bought a Harley yesterday”.
me: Did you get the costume with it?
him: Huh?
me: The costume. Did it come with a costume?
him: WTF are you talking about buddy?
me: The Village People costume. What character are you?
him: #@$%$# $%$# $%&&*@!!!
me: Yeah yeah yeah… You’re all tough guys until it’s time to get off your rickety scooters.
I thought that 55, overweight, and slob WAS the costume.
well…. yeah… that goes without saying. Pig in a suit?
*snerk* Right?
Also, if the guy running an illegal garage will do good work for you, who cares? So long as he’s not Captain Obvious about it and his property doesn’t look like s***.
That said, most mechanics I know really don’t care about appearances at all, even for social convention’s sake. I’d care much more about if his property looked awful than what he does in his garage.
I grew up three houses from a de facto (ad hoc?) home mechanic shop. It’s not one car in a closed garage. The garage door is never closed during repairs because you want an escape path from the potentially fatal fumes and/or fires. There are various beaters in various states of driveability or lack of same in the driveway, on the street, or up on the proverbial blocks on the lawn. So the entire neighborhood is treated to the noise of air compressors, the smell of oil, the sight of pieces and parts, all accompanied by the type of many-decibled music you would expect in quality establishments.
With any kind of competent city government, this guy would be facing serious fines. And it wouldn’t require anyone attaching their name to the report. Baltimore and New York have 3-1-1 systems to call in violations like this. Inspectors come out, take some pictures, and then levy an initial fine and give the person a fixed period of time to redress the issues. The system relies on inspectors, not on citizens wasting their time in court. And you know what, it’s a much fairer and objective system because it weeds out people reporting their neighbors to “get back at them” or somesuch.
Renters living next door to neighbors like that have the option of moving. For owners who live next door, the losses will be incalculable.
That’s exactly why I like that neighbor. First of all that’s a bit over the top, this guy is not all that annoying, certainly not all the time, although he does occasionally resemble your remarks. He’s actually pretty civilized about it all. We’re roughly the same age, so I happen to like his music… The clown house down the street with 20 illegals occasionally blasting mariachi music is 10x more annoying.
Annoying is the elderly neighbor who makes my yard look terrible in comparison because his retirement hobby is apparently being an 8 hr/day gardener/peasant/subsistence farmer. I find that guy 10x more annoying than Mr Fixit. Come on dude you edged your lawn last week, find something else to do today that makes my yard look bad. Go till a field somewhere. Why are’t there any xeriscape / natural landscaping HOA anywhere, only goofy golf course landscaping style HOAs? “Sir you already mowed your lawn twice this week, I’m sorry but I’ll have to issue you a HOA violation for mowing a third time”
Also you don’t close the garage door because its hot in the summer and if you’re regularly setting your project car on fire, you’re an arsonist not a mechanic.
I will admit to feeling inadequate when I’m merely changing the oil in my driveway and he’s swapping an entire engine on his driveway complete with multiple engine hoists and stands. I think this feeling is fundamentally the root of about 90% of “I hate mechanics”. The walk of shame is walking across the street with a “gift” can of beer to beg to borrow an impact socket because my chinese one cracked half way thru rotating my tires while he’s rebuilding a 40 year old carburetor on his bench. Exotic to me is a brake job replacing rotors and pads, but exotic to him is replacing a transmission with a different model.
I’m not sure if there is a politically correct way to describe his specialization, but the politically correct very long description is he mostly works on Japanese cars that normally sold for about $20K but now have $100K of custom turbos and exhausts and bodywork bolted on. I did not know carbon fiber ash trays existed, he’s installed under car lighting systems, that kind of thing. “street cars” with 5 point safety harnesses, giant spoilers, racing decals instead of bumper stickers. The 5 inch diameter exhaust system is of course mandatory. So what he has laying around actually looks kinda interesting or at least novel rather than offensive. I’d rather see a carbon fiber car hood kit laying around than boring rose garden #235232.
So the entire neighborhood is treated to the noise of air compressors, the smell of oil, the sight of pieces and parts, all accompanied by the type of many-decibled music you would expect in quality establishments.
Reminds me of occasional Saturday or Sunday car guy get-togethers where everybody descends on one person’s house for a few hours to work together. They try to rotate houses so that no one neighborhood gets too stressed about it. But yeah, every day would get old…not so much because of the things you list, but because of the customers.
The 5 inch diameter exhaust system is of course mandatory.
Ahhh, the Japanese cantaloupe shooter :-).
5 inch? That’s nuthin!
I ordered up a new Hoverround for my elderly mother. I already have it torn down and ready to pimp it out with a Detroit Diesel with four… count’em…. FOUR 10″ stacks… one stack per corner! I’m gonna wire in a smoke switch next to the joystick so she can really choke out the competition.
Corb Lund - Hard on the Equipment:
————————————————
They love to see him comin’ at the lumberyard store
Fixed the leak in his roof with a two by four
Drilled holes in his boards with the wrong kinda bit
And when they don’t line up he blames the gover-ment
He got the whole front yard full of fix ‘em up cars
Three don’t run and the rest won’t start
Everything’s fine with his rebuilt motor
Except of course for the couple spare washers left over
Baler twine tie downs goin’ down the road
On two bald tires and an oversized load
He ain’t never read a manual ‘cause that’s like cheatin’
He don’t mind the grease on his hands while he’s eatin’
He’s the hired man, my neighbor and a cousin in law
He’s a jerry riggin’ fool, he got the tool for the job
I’ve never heard that song, but the lyrics are dead on.
For the rural dwellers, there’s this:
Forty Acres and a Fool
This is one of the better threads here that I’ve read in a while.
“Forty acres and a fool”
–Ha, must be the guy in this song: (”60 Acres”, James Mcmurtry)
Turned off the TV, sat down to dinner
Phone rang, we was sayin’ grace
Grandma died left us sixty acres
The last of the old home place
Sixty acres up on the cap rock
What am I supposed to do with that?
Uncle Claude got a eight wheeled tractor
Plow it under in nothing flat
We could plant some maize,
we could plant some cotton
Plant some oats just to see if they’d grow
But I don’t like farming, can’t take the hours
Don’t like a life that goes so slow
Glory glory, Hallelujah
Right back atcha, hope that’ll do ya
Don’t look at me like there’s something I shouldn’t have said Just ’cause that old bird’s dead
Now, cousin Clifford, he got the good land
Right off the highway out by Air Base road
Looks like a Wal-Mart waiting to happen
I mean to tell you it’s a pot of gold
It’s in the city limits and zoned commercial
City water and a sewer line
With the base expanding, consolidation
It’s worth a fortune and it oughta be mine
Glory glory, Hallelujah Right back atcha,
don’t she look natural?
Don’t look at me like there’s
somethin’ growing out of my head
Just ’cause that old bird’s dead
A nation of obese, broke loosers:
“Hospitals’ fast-rising sticker prices are adding to the financial burdens of the 49 million Americans without insurance, more than 20 million of whom won’t be covered under President Barack Obama’s Affordable Care Act.
So-called full charges at hospitals grew an average 10 percent a year between 2000 and 2010, according to Gerard Anderson, a Johns Hopkins University professor who analyzed hospital financial reports. The charges went up at four times the pace of inflation, and faster than hospital costs, which Anderson said increased an average 6 percent a year.
While the charges appear on hospital invoices across the U.S., the amounts people actually pay vary widely, depending on their health coverage. The system is so irrational that those without any insurance can get stuck owing the most money”
http://mobile.bloomberg.com/news/2013-03-11/uninsured-americans-get-hit-with-biggest-hospital-bills.html
“The system is so irrational that those without any insurance can get stuck owing the most money.”
That’s because the insurance companies know how to work the system and those who are going it alone don’t. And since the insurance companies can cut out much of what they are billed to pay those who go it on their own have to make up the difference.
So the insurance companies - the ones that have the most money - don’t pay as much as the uninsured - the ones who don’t have much money at all.
So whether you pay or not doesnt depend on whether you can afford to pay or not, rather it depends on how well you know how to work the system.
If somebody who had no money could hire somebody who knows how to work the system just as the insurance companies know how to work the system then he would benifit just as the insurance companies benifit. But since he has no money he wouldn’t be able to afford to hire such a person.
Once you tell a hospital or their collection agency that you have a lawyer, they are obligated to stop calling you and deal with the lawyer. The lawyer will, of course, tell the pimple-faced kid from the collection agency to go pound sand (probably even some more colorful things). There are lawyers who will provide this “service” for a couple hundred bucks. All they have to do is answer the phone every so often and confirm that they are representing the debtor. I know a lawyer in Bel Air, MD who will do this for about $500. And when it’s time for bankruptcy or divorce or a workman’s comp claim, he’ll pass you along to a guy down the street. Not surprisingly, problems tend to “snowball” once a person racks up tens of thousands of medical bills.
Sure about all that?
Lets say you know a guy with no insurance is not going to pay a penny, the medical equiv of judgement proof. I’ve seen this play out with several older relatives… Now if you decide to provide services, you have to account for the expense… Given a choice of marking $60K off on your tax forms as a loss, or $125K off on your tax forms as a loss, which is “better” for you?
The only real limitation on charges for judgement proof / uninsured is avoiding tax fraud charges. If it were not for tax fraud avoidance you’d have uninsured being “charged” $1M for each bandaid to eliminate profit on the tax forms.
Your analysis is largely correct. It’s been a while since I took Health Law (which largely dealt with accounting and organizational issues like this, surprisingly little time was spent on med-mal) but I do remember the vague outlines of what’s going on when hospitals come up with large bills for uninsured people. First off, they want to take big tax deductions–nothing stops a nonprofit from having extra cash swishing around. Second, they want to justify high salaries, which are based on wholesale prices for procedures (which are obviously not the price most patients pay because most patients have insurance). Thirdly and finally, to remain a nonprofit, a certain amount of charity care must be provided.
This analysis doesn’t deal with for-profit hospitals. I actually don’t remember if we covered for-profit hospitals/offices/clinics in that course. There was a lot to cover and only limited time.
It really isn’t that complicated. The high charge is the first number the medical provider throws out at the insurance company as a starting point in the negotiation for the schedule of charges for that company. They have to charge someone that number, or they would be lying to the insurance companies that the inflated number is their “regular” charge. The individual is literally caught between the negotiation of the giant hospital and the giant insurance company. Hospital knows it isn’t going to get the charge very often. Insurance company knows the hospital isn’t going to hold out for that number because if they don’t get it they will have to close the doors. But the person without insurance is just a pawn in the game. They would throw out the same number even if there was just one person (or zero persons) who ever got charged it.
I still think there is a giant black hole in the process if your medical charges are purchased by a collection agency. Medical providers shouldn’t be able to provide your medical information to a separate collection agency because of HIPPA, though I bet they can if the agency is just acting as an agent of the medical service provider, not as a purchaser of the debt. I’m pretty sure you can demand a list of what makes up the debt from the collection agency to check for fraud and such. So, they can’t get the list and you don’t have to pay until they provide it. Is that the hole the lawyers are exploiting?
This drives me nuts and is so easy to fix. The solution is, for any procedure in a hospital that’s paid out of pocket, the payee must get the most preferential insurance rate. A pill with a 100 dollar list cost that BCBS pays 10 dollars for, should, if you’re self pay, cost 10 dollars.
I had an accident years ago that (round numbers) resulted in a 250K hospital bill. They sent that bill to me directly (even though I had insurance) which I promptly threw away. This continues for a solid 18-24 months, every month I’d get a bill, and every month the number would go down (as insurance paid). Finally I get the final bill, I owed 250 dollars (my co-pay for ER care) and the insurance company paid something like 30K.
That; right there, is what’s ailing the medical system. Why would you send out a bill for 250K when it’s really 30K? What would have happened if I just paid that bill? Why does the medical system prey most on the weak and unable to defend themselves (those without insurance or the means to pay the outrageous bills)?
Frankly, although I’m not generally in favor of more laws, this behavior should be illegal. You should not be permitted to bill any individual until you’ve gotten full payment from the insurance company. You also should not be able to bill 250K when you’ll take 30K from the insurance company for the same procedure. And who knows, I had really good insurance, maybe they would take 15K from another company (which, if so, is what anyone paying out of pocket should pay).
Why would you send out a bill for 250K when it’s really 30K?
——————
Because our economy is not based on real capitalism, it’s based on rules written to protect the largest players who can afford the most expensive lobbyists and lawyers. Every time we allow more money into the political system this will get worse. SuperPACS are only the beginning.
The S. Ct. is hearing a case this term that would allow individuals to make unlimited contributions to political campaigns. Before “Citizens United” I would’ve scoffed at the chances of the Court allowing this. For now, I think it is 50-50. It all depends whether Kennedy thinks limiting individuals to approx 120k/election cycle is an unconstitutional restriction on “free speech”. Kennedy baffles me.
our economy is not based on real capitalism, it’s based on rules written to protect the largest players who can afford the most expensive lobbyists and lawyers.
Rent seeking run amok.
This bears repeating.
They prey on the weak because that is nature’s way.
This is the closest to the truth.
Think about the phrase “for-profit hospital.”
Re: “for profit hospitals” - - I’m convinced this is why Bill Frist’s political career didn’t have the upside people were predicting in the 90s. He went from being a young Senate Majority Leader to… nothing, so far as I can tell. I’m sure he’s OK with it, the guy is a billionaire thanks to his family’s business, HCA (Hospital Corporation of America)
nothing, so far as I can tell. I’m sure he’s OK with it, the guy is a billionaire
Only in America!
There are reputable third-party companies who will, for a fee, negotiate with the hospital to get you the same rates as if you had good insurance.
Google it; I did! -
So the insurance companies - the ones that have the most money - don’t pay as much as the uninsured - the ones who don’t have much money at all.
Which means that to try to live without insurance means you have to be judgement-proof…or you soon will be.
The system is so irrational that those without any insurance can get stuck owing the most money.
And, let me guess, those people are just sitting on piles of money. Yeah, right.
No defense contractor left behind:
“Lockheed Martin Corp. and Raytheon Co. are vying with telecommunications companies to defend banks and power grids from computer attacks, in a program that gives them access to classified U.S. government data on cyber threats.
President Barack Obama’s Feb. 12 cybersecurity executive order authorized the Department of Homeland Security to let new companies get the government intelligence. Obama and U.S. officials have said sharing classified threat data with companies is essential to help prevent cyber-attacks that could cause deaths or economic disruption.”
http://mobile.bloomberg.com/news/2013-03-11/raytheon-lockheed-to-get-u-s-secrets-for-cybersecurity.html
I would not be surprised to find out later that half the money is spent on ways to attack systems. This is war by any other name.
The internet started tiny but soon the number of addressable nodes will explode to trillions. A complete failure of the internet could be similar to what a massive solar X class flare would do to our national electrical system and every thing that’s attached to it.
Is there any useful explanation of why the power grid’s controls have to be linked in any way to the internet? The grid is vulnerable enough as it is.
I would imagine it’s cheaper to run it all remotely than to have guys at each station… until the Chinese blow it all up one night.
how much will we need to print to get the DOW to 20K? When does the law of diminishing returns kick in? Will this new found wealth ever hit the avg joe workn at walmart?
1. Who knows, but I wouldn’t bet on 20k
2. Depends on who you are and how much you got
3. Uh, never. Is this a trick question?
Pimping the fake recovery:
“If you’re one of the millions of Americans who have been unemployed, underemployed or just languishing in a job you hate ever since the financial crisis, there were plenty of reasons last week to think you may finally be out of the woods. (You’re not)
… the number of job openings (for Lucky Ducky) continues to rise, albeit still slowly.
Clearly the frozen job market is thawing.” (The only thing melting is the USA middle class which is living in an endless stagflationary depression)
Some stats from the Bloomberg article posted above: Average income for households with incomes under $50,000 fell 9.6 percent between 2000 and 2010 and incomes for households over $50,000 fell 5.5 percent in the same time period.
The only “recovery” happening is that of the 0.1%. Welcome to the recoveryless recovery. The future belongs to Lucky Ducky.
http://m.us.wsj.com/articles/a/SB10001424127887324582804578344770797318656?mg=reno64-wsj
some crumbs are suppose to trickle down sooner or later.
Who says?
jamie dimon and abby joseph
Been exactly the same after the last 5 recessions I’ve lived through.
It’s gonna get worse, and then it’s gonna get more worse
You’ll see.
Already seen it AND the trend.
The trend is not your friend
“the last 5 recessions I’ve lived through…”
This one seems to have elephant legs under it. Not quite like the “recessions” we’ve lived through.
As has been posted on HBB before, the concept of a middle class lifestyle and retirement was a historical anomaly that lasted a few decades after WWII.
The future will be like Charles Dickens’ 19th century but with smartphones.
Yeah. Pretty much. Until the cities burn.
Then the goose will be cooked.
“The only “recovery” happening is that of the 0.1%”
I’d expand that a bit. Certainly the 1% are seeing a big recovery. And probably even further, I’d hazard a guess that most of the top 10% are seeing income rise.
Even if it’s the top 10%, it’s far too low a number. And, unlike most things, I don’t even have a comment on how to fix it. Seems almost like trying to keep buggy whip makers employed during the era of the Model T. A huge swath of this country needs to retrain, and, frankly, a large majority of them aren’t suitable for the “new work” that we need done in this country.
IMHO, the end conclusion here is that we need a lot (a whole lot) fewer people at the lower range of the intelligence spectrum and the same number or more at the higher range. Manual labor and low skill jobs are going away (and have been for 100+ years), replaced by machines. Thing is, the machines continue to creep up the stack. First we had a plow, now we have a robot that can assemble a car. Next we’ll have a robot that can build a house. Or a robot that can run other types of heavy machinery.
There are 2 eventual outcomes here. A utopian and distopian future. Robots do all the work for us and we relax and enjoy life. Or (more likely?) a relatively small group of people “control” the robots and use them to suppress the wages/opportunities/etc of the majority (ie, Detroit and auto manufacturing).
Oh, and finally, looping back to the original point.. A large majority of those in the .1% aren’t doing useful work either. They just make others think that what they do is useful (IE, bankers/stock traders/etc). Many of those masters of the universe on Wall St will soon find their jobs being replaced by robots as well (see, HFT and electronic order routing vs open cry). However, as those folks are generally some of the brightest, they will retrain to other roles (hopefully that have some more benefit to society!).
Yes, but within that top 10%, the majority of the “recovery” is going to the top 0.1%.The top 3, 2, 1 percent are mostly employed as professional fluffers for the 0.1%. They are not self-made “bootstrappers” or small business owners as the meme goes. As a reward for their service of fluffing the 0.1%, they enjoy a relatively comfortable upper-middle class lifestyle of “aspirational luxury”.
Reported in Washington Post piece, The stock market strikes back:
“in 2010 the wealthiest 1 percent of Americans owned 35 percent of households’ stocks, including retirement accounts and mutual funds, and that the next 9 percent had 46 percent.”
The top 10% are nowhere NEAR “middle class.” They are wealthy, not middle class. Do not confuse the 2.
The 1% are filthy stinking rich.
“The 1% are filthy stinking rich”
That right there, that is confusion of volume and flow.
The 1% have high income but that does not speak to their wealth (or stench). To be sure, many of them have a negative net worth.
Consider also that many of the lower half of the top 10% are living paycheck to paycheck to pay for overpriced housing and a “lifestyle” they can’t afford but feel they are entitled to, or even feel as if they have to live in order to display that they’ve “made it”.
Sigh, LOOSERS.
The top 10% are nowhere NEAR “middle class.” They are wealthy, not middle class. Do not confuse the 2.
The 1% are filthy stinking rich.
Depends on your perspective…and your definitions of things like “middle class”. Obviously a 10%er should be upper middle class just from the number. But the way we define our expectations for what an “upper middle class” person should be able to afford, they are not “upper middle class” unless they bought their house long ago.
I would only consider someone a 1 or 2%er if they have the assets (or combination of assets & passive income) to provide income in the absence of earned income.
To me, a guy making in the 2 or 3 hundred K’s is only slightly less of a piker than someone with a Lucky Ducky job, because if there ever comes a time he/she can’t work, she’s just as screwed, if not moreso (probably has higher living expenses).
I’ve also come to the realization that even a few million dollars in assets can quickly be disipated in the face of a family tragedy, to say nothing of raising a few children.
It has nothing to do with perspective.
These are the numbers and categories as defined by the Census and the IRS.
Where do they define it?
For the love of god, Google it people!
“It has nothing to do with perspective. These are the numbers and categories as defined by the Census and the IRS.”
——————
The Census still doesn’t answer whether we should use income or assets for purposes of our discussion here. IMO, assets (minus primary residence) would be a lot better measure than income.
It’s mostly a distinction without a difference. It’s not like there are many people out there with huge amounts of assets but very low income because the carrying costs on substantial real assets would and does wipe the low-income people out after just a few years.
^This.
Poor people don’t have the hairs to split.
Retrain? To what?
There are no jobs. Period. There are no raises. Period.
The future = there is no future.
The best the USA middle class can hope for is a slowing of the irreversible, stagflationary death spiral.
The best the USA middle class can hope for is to get off the debt hampster wheel of this phoney credit based interest bearing consumer crap economy and find a more sustainable way of living in future.
WTF kind of hippie-dippie commie talk is that?
Well Blue Sky. I’m sure most would… if they had been getting raises that kept up with inflation so they could save money for those rainy days.
Instead, most were losing jobs to lesser paying ones, let alone getting a raise. But nobody told the landlord, mechanic, grocer, doctor, school, clothes makers, etc.
I meant to say that there is a future. Yours can lie in the path of a steamroller, or not. Your choice.
“nobody told the landlord, mechanic, grocer, doctor, school, clothes makers, etc.”
Credit warps the Supply/Demand continuum.
Your choice
For recent used house buyers in suburban Maryland and in San Francisco, the losses will be incalculable.
They chose the losses, they dug their own financial graves.
The supply/demand world ceased to exist in the 1980s.
Voodoo economics was coined to described the new policy of supply side economics. Got that? Supply side. Not demand. Supply.
Offshoring then began in earnest and decimated entire industries labor pools and has done so about every 7-10 years since. (2-3 year recession followed by 6-7 years of recovery followed by another recession)
In order to cushion the blow, people HAD to turn to credit until they stabilized at their new LOWER PAYING job… if they could find one.
This has been the cycle since the 1980s. Everything else is just a distraction from the REAL economic engine the big boys use and affects us all: speculation.
‘Much of Mexico’s recent strength has come from manufacturing. Factories are opening to produce auto parts, televisions, and refrigerators. A decade ago, the picture was very different, as businesses left to find cheaper costs in China. According to HSBC HSB , workers in China cost employers 32 cents an hour in 2000 vs. $1.51 in Mexico. But then in the next decade, China boomed, and labor costs skyrocketed, reaching $1.63 in 2011. At the same time, Mexico grew at a slower pace, and costs increased to $2.10.’
‘Even though wages may still be a bit higher in Mexico, the country now has an edge over China because of transportation costs. While it takes up to three months to ship products from China to the U.S., Mexican goods can arrive north of the border in two days.’
http://finance.yahoo.com/news/betting-mexican-markets-boom-143800350.html
Even though wages may still be a bit higher in Mexico, the country now has an edge over China because of transportation costs.
If petro gets over $200 a barrel, what will happen to transportation costs?
That trend is no one’s friend.
Retrain? To what?
Exactly.
For instance: The media keep harping about a shortage of software engineers. Yet I see a stark contrast in the job market for said profession today vs. 20+ years ago.
Today the interview process, even at smaller firms where you are referred by an insider is a day long technical gauntlet where you are asked to write non trivial sample code, solve screwy gotcha brainteasers, get grilled on non trivial technical concepts, give technical presentations, sit through “behavioral” interviews, etc.
Flub any of these and you’re out. I once flunked an interview because I was unfamiliar with a very obscure and corner case bit of C++ syntax (I was told later that I aced the rest of the interview). That would not have been a show stopper 20 years ago.
I remember when the interview process would last 1-2 hours and consisted mostly about talking about your past experience and projects with the hiring manager. The kind of stuff you now do in the 2 hour “phone screen” interview.
That employers can be ultra picky when hiring SW Engineers tells me that there is no shortage of people to hire.
That employers can be ultra picky when hiring SW Engineers tells me that there is no shortage of people to hire.
Yup. And if I’m just looking around but still currently employed, I don’t bother with the technical gauntlet interviews. Sorry, no time for that. Seems to make some places want you even more. And the places that aren’t interested if you refuse the gauntlet probably aren’t that great to work at anyway…but when times are tight you gotta do what you gotta do.
“That employers can be ultra picky when hiring SW Engineers tells me that there is no shortage of people to hire.”
Either that or it’s a pretense so that the SW industry can argue that more H1b’s are needed.
There is NO shortage of any skill and knowledge base. None.
The only shortage is those willing to work for less and less money and HR people who know WTF they are doing.
And if I’m just looking around but still currently employed, I don’t bother with the technical gauntlet interviews.
Everyplace I’ve interviewed at since 2000 has done the gauntlet. Which means you have to burn a whole vacation day to do it. I don’t bother looking anymore unless I believe that a layoff is coming. Oh, plus almost all the jobs are of the “contract to hire” type.
I’ve managed to avoid it…but I’ve only changed jobs once in that time.
Unemployed can get ahead in Saudi Arabia:
I wonder what the technical gauntlet is for getting hired.
“There are no jobs. Period.”
That’s simply not true. My company has open hiring of CCIE and VCP certified individuals (IT certifications). All those jobs are 100K+. Typically 5+ years of experience. However, there are only “thousands” of the people we’re looking to hire, and, generally, they are all well employed today.
If you’re going to retrain, medicine, IT, and law seem like some fields that are very unlikely to see any significant loss in demand over the next couple of decades. Business is another one, but, it’s a “softer” skill, so, I’d tend to focus on the more concrete “here’s what I can do for you day 1″ type skills.
Law school graduates are having a terrible time getting jobs. And some of the high volume grunt work is being outsourced to India. Law schools are setting up law firms to hire their graduates to up theie employment rate.
Typically 5+ years of experience.
typically for skills that didn’t exist more than 3 years ago.
. However, there are only “thousands” of the people we’re looking to hire, and, generally, they are all well employed today.
Does your company end up hiring a lot of HB-1s?
“Does your company end up hiring a lot of HB-1s?”
In some areas of the company, we do. In my department, none. Native English skills are very important, we’re talking with clients who are spending a lot of money with us, they want to speak to people that “they can understand”.
“typically for skills that didn’t exist more than 3 years ago.”
5 years of IT datacenter and consulting experience, not 5 years of specific technology experience. Although, yes, most of these technologies did exist 5 years ago. I’ve been a VCP for that long, and the Cisco certifications (CCIE) has been around for over a decade.
If you have the aptitude for it, getting a CCIE and VCP, even with no experience at all (although, it would be near impossible to pass the CCIE with no experience) will almost guarantee a 100K job in most of the country. Shoot, you could work directly for Cisco or VMware and make more than that. If you work for a manufacturer, prepare for liftoff.. You’ll spend a lot of time on the road. I work for a service provider and still wind up traveling 100+ days a year. So, yes, it’s a tradeoff; it’s very hard to find a job that pays big bucks that’s not going to have you on the road a significant amount.
A huge swath of this country needs to retrain,
OK…
and, frankly, a large majority of them aren’t suitable for the “new work” that we need done in this country.
So we’re going to create a system unsuitable for the actual people that inhabit it. How is that likely to work out?
Maybe it will work in Lake Wobegon, where all the children are “above average”. For everyone else with an average IQ, it’s a Lucky Ducky future that’s waiting for them.
Perhaps we can breed people a la “Brave New World” to get the right mix of IQs. We do need some “average” people to scrub the toilets after all.
We do need some “average” people to scrub the toilets after all.
But they better be on the high end of average and highly motivated. There’s plenty of other people ready to take their place if not.
But they better be on the high end of average and highly motivated
You left out the absolute necessity of a college degree for this kind of work.
So we’re going to create a system unsuitable for the actual people that inhabit it. How is that likely to work out?
Umm, the last time I checked, a few years ago, I found a system ALREADY unsuitable for its actual inhabitants.
We are currently learning how that is ‘working out’, or ‘borking out’, as the case may be.
The time frame is a lot more gradual that I thought it would be.
I think the societal machine is winding tighter and tighter, and at some point will go “BANG! KERWHACKETAWHACKETAWHACKETA!”
“The Housing Market “Recovery” Is A Complete Myth”
http://seekingalpha.com/article/1151771-the-housing-market-recovery-is-a-complete-myth
Is that the proper use of the word “myth”?
A myth is a traditional story explaining something. If there is no housing recovery then wouldn’t “lie” be more appropriate?
Good point. But then again, a “housing recovery” is prices falling to dramatically lower and more affordable levels by definition.
Oh boy ! Another article written by an unpaid amateur crackpot who gets 2 cents for every time some paranoid sucker clicks on his link.
Have I got a book for you: Trust Me, I’m Lying: Confessions of a Media Manipulator by Ryan Holiday. It’s all about click-seeking for higher page views and increased ad revenue.
It’s a must-read, courtesy of your HBB Librarian.
Currently linked at the very tippy top of the Drudge Report:
“On Friday, the United States Department of Agriculture quietly released new statistics related to the food stamp program, officially known as SNAP (Supplemental Nutrition Assistance Program). The numbers reveal, in 2012, the food stamps program was the biggest it’s ever been with an average of 46,609,072 people on the program every month of last year. 47,791,996 people were on the program in the month of December 2012.”
Hope and Change
http://m.weeklystandard.com/blogs/46609072-people-food-stamps-2012_706745.html
No wonder that demand for housing is at a multi generational low.
The future belongs to Lucky Ducky in Europe:
“Europe has spent hundreds of billions of euros rescuing its banks but may have lost an entire generation of young people in the process, the president of the European Parliament said.
… That crippling level of unemployment has led to protests and outbreaks of violence across southern Europe, raising the threat of full-scale societal breakdown, including rising crime and anti-immigrant attacks that can further rattle unstable governments.”
http://mobile.reuters.com/article/idUSBRE92A08W20130311?irpc=932
‘“Whom does the money belong to? Who does its ownership belong to? To the State fine…then to us, we are the State. You know that the State doesn’t exist, it is only a legal entity. WE are the state, then the money is ours…fine. Then let me know one thing. If the money belongs to us…Why…do they lend it to us??”
- Beppe Grillo in 1998
Note: some F words here and there -
http://www.youtube.com/watch?v=dWWw-cgxndQ
If the money belongs to us…Why…do they lend it to us??”
- Beppe Grillo in 1998
I’m surprised he’s still alive. Questioning the Banking Clan like that and you might find yourself fitted with cement shoes.
1% to the 99%: Drop dead
“Even as the nation’s life expectancy has marched steadily upward, reaching 78.5 years in 2009, a growing body of research shows that those gains are going mostly to those at the upper end of the income ladder.
In 1980, life expectancy at birth was 2.8 years longer for the highest socioeconomic group defined in a research study than the lowest, according to a report by the Congressional Budget Office. By 2000, the gap had grown to 4.5 years.”
http://m.washingtonpost.com/business/economy/research-ties-economic-inequality-to-gap-in-life-expectancy/2013/03/10/c7a323c4-7094-11e2-8b8d-e0b59a1b8e2a_story.html
1% to the 99%: Drop dead
0.01% to the 0.99%: Don’t be getting uppity or you’re next.
Life expectancy at birth….
So, if you want to live longer you should have rich parents. I’ll try to find a use for that information.
They are probably clarifying that they are including infant mortality in their statistic. Life expectancy number are useless if you don’t say whether you’re including a bunch of 0’s in your average.
Drop dead is probably literal. Rep. Alan Grayson put this in terms of the health care plan for the 99%: Don’t get sick. If you do get sick, die quickly.
a growing body of research shows that those gains are going mostly to those at the upper end of the income ladder.
You mean the ones who can afford healthy, nutritious food and quality medical care?
More evidence of the effectiveness of DC’s gun ban:
“A drive-by shooting early Monday on a D.C. street corner that has frequently been touched by violence left 11 people wounded, one of them seriously, police said.
Gunman in two cars opened fire about 2:45 a.m. on a crowd of people outside Tyler House (what was a “crowd” doing there at that hour? maybe they all woke up really, really early to fill out job applications together), an eight-story, subsidized residential building on the south side of New York Avenue at North Capitol Street.
The shooting occurred across New York Avenue from the Big Ben Liquor store, on the northern edge of the District’s up-and-coming “NoMa” (north of Massachusetts Avenue) district.
Cranes loom overhead, marking new construction that is rapidly filling the empty lots that once dotted the area. New condos, stores and office complexes are being built among apartment complexes that for decades have housed lower-income city residents.”
http://m.washingtonpost.com/local/crime/up-to-11-people-shot-on-dc-street-corner-overnight/2013/03/11/d7c5197e-8a39-11e2-a051-6810d606108d_story.html
“south side of New York Avenue at North Capitol Street”
This is like two blocks from the DC Convention Center (maybe even less, it might be diagonal or adjacent block?). When I interviewed for my current job, I accidentally walked right by there when I got off teh Metro at Mt Vernon Square and made a wrong turn.
There are a bunch of nightclubs right there, along both sides of 7th Street near NY Ave. The headquarters of “Living Social” is also about a block from there (I hate Living Social, FWIW - so annoying, give them your email once, they spam you for life).
DC Convention Center is between 7th and 9th just north of Mount Vernon Square and the Penn District. North Capitol Street is basically 0th (zero) street. How is that 2 blocks? Closest metro is NOMA-Gallaudet on the red line.
火山口!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
The losses in suburban Maryland and in San Francisco will be incalculable.
You better believe it mister.
unfathomable
inconceivable
Oh…the humanity!
Wisconsin Avenue in Bethesda will look like 8 Mile Road in Detroit. Just give it time.
Bethesda will look like Dresden 1945 after all of the incalculable losses.
You can’t count? I thought losses were solidly pegged at 65%
LMFAO
Americans waking up to the reality that breeding children is a loss:
“Pew Research Social & Demographic Trends reported in December that the overall birth rate in the U.S. fell to 63.2 births per 1,000 in 2011, the lowest level since records began in 1920. By contrast, in 1957 — the height of the baby boom — the overall birth rate was 122.7.
Higher divorce rates, cohabitation outside marriage, effective birth control, legalization of abortion, women in the workplace, delayed marriage and motherhood and the exploding costs of raising children have pushed Americans into having fewer kids”
http://www.denverpost.com/news/ci_22761931/no-kids-no-worries-doesnt-work-after-few
But not nearly the massive losses associated with paying grossly inflated prices depreciating houses.
Loanownership = incalculable losses
With kids you can choose to end your losses on their 18th birthday.
Somebody might want to alert Jim Bob Duggar (real estate agent AND father of 19). Double LOOSER!
I want to see a version of that show with the same number of kids but the parents decided to give them all names starting with X or Z or Q instead of J.
Higher divorce rates, cohabitation outside marriage, effective birth control, legalization of abortion, women in the workplace, delayed marriage and motherhood and the exploding costs of raising children have pushed Americans into having fewer kids
Don’t forget “friends with benefits”. Now you don’t even need to have any emotional attachment to your bed buddie. Kids? Fuggedaboutit!
And the result: “The Social Security Administration reports that in 1940, 159 workers supported each U.S. retiree. By 2010, just under three workers supported each retiree.”
In 2050? Maybe a 1:1 ratio?
Next time I see my paystub I’m going to stare long and hard at the SS and MC taxes, as I realize I’ll never get any of that sweet entitlement money.
Why not?
He probably believes that he’ll be means tested.
Because with 1 worker per retiree, what kind of SS could we possibly receive? And what will MC cover?
I’m going on the assumption that anything that’s left will be an unexpected bonus. I expect the current and next generation of retirees to bleed the system dry.
Because with 1 worker per retiree, what kind of SS could we possibly receive?
More than nothing, I presume.
This would work fine if we could just tax the productivity of robots and automated assembly the way we tax the productivity if humans.
This would work fine if we could just tax the productivity of robots and automated assembly the way we tax the productivity if humans.
That would require including capital gains in the payroll tax.
Seems reasonable to me. It was always unfair not to, but not doing so was said to make the claim on SS and MC inviolable- ie we had paid it up front.
If they want to take it away from us now, then the gloves are off, and capital gains are fair game.
Oh, and remove the income cap on SS.
‘not doing so was said to make the claim on SS and MC inviolable- ie we had paid it up front’
Oh but your precious government spent all the social security money and the medicare/medicaid money too. Dang, your hero’s let you down, huh?
‘If they want to take it away from us now’
No, it’s gone. Blown on wars and stimulus and interest payments. How let down you must be voting for these thieves.
‘then the gloves are off, and capital gains are fair game. Oh, and remove the income cap on SS’
Ha ha, why don’t you call your “public servants” and tell them the “gloves are off”?
‘Seems reasonable to me.’
Yeah, and just recently you were going to “take” all the guns and confiscate “wealth”. My, your schemes aren’t advancing far are they? But at least you’ve scaled down your greed and fascist ambitions.
Yeah, and just recently you were going to “take” all the guns and confiscate “wealth”
When was this?
Just proof that debt results in loss of virility.
To be fair, the people who still are having kids tend to have horrible credit and income, probably a bunch of debt too. Most of the kids born in America today are born to abject losers. We’re headed for an idiocracy.
I can do math and know that raising children well requires a lot of trade offs and expenses. No thanks. Only one for me. I’ll let Bucky the Retarded Fundamentalist have a bunch of kids with different women to make up for my supposed “loss of virility”. It seems to be what our government wants.
BTRF usually manages to keep it down to one woman, I think.
You would think so, but it seems like there’s often an early kid or two with someone else before BTRF really settles down.
Even worse is when BTRF gets stuck paying for someone else’s kids when he settles down with Betty the Prodigious Procreator.
Edited to say –>
You would think so, but it seems like there’s often an early kid or two with someone else before BTRF really settles down. Especially if BTRF does a stint in our armed forces.
Fundies don’t seem to have a problem with serial marriages. And if their Pastor does object, they just shop around until they find a Pastor who doesn’t care.
born to abject losers
Tell us what you really think about the 99%.
DOW 14,418.
The 0.1% made whole by the Bernank.
And for the rest of you, stagflationary depression.
Housing and stocks climb higher every day. Buy now or get priced out forever!
‘Blackstone Group (BX) is betting heavily on residential real estate, Chairman and CEO Stephen Schwarzman told CNBC on Monday. “Blackstone is now the largest owner of individual houses in the United States,” Schwarzman told CNBC’s “Squawk on the Street” Monday, pointing to his company’s $3 billion portfolio of residential real estate.’
http://finance.yahoo.com/news/were-betting-big-real-estate-171222223.html
Ha! Sorry Mr Schwarzman, you aren’t even close. You stand behind Fannie Mae, Freddie Mac, HUD, Bank of America, just to name a few.
How could anything go wrong with the bastard child of Lehman Brothers leading the way?
betting?
“Blackstone is now the largest owner of individual houses in the United States,”
It’s not really betting. They read Ben Bernanke’s QE3 tea leaves. With a newly reaffirmed commitment to pump $40 bn a month into MBS purchases, the Fed has clearly signaled that real estate is going to go up some more. It makes sense for those with deep pockets to grab as many residential real estate assets as possible, as the more you grab, the larger the capital gain you realize when real estate goes up.
Blackstone = Fed’s money launderer
There was a CNBC 60 minutes show about Davos last night. I’m pretty sure it was a rerun from a year or two ago. It really struck me how breathlessly these journalists suck up to people like Queen Rania, various Middle Eastern anti-democratic “princes”, and people like Soros. Not that they should have contempt for them… but maybe show some skepticism and try to figure out if what these people want is really what the average person in the world should want?
I think when people start out in journalism, they’re still idealistic and interested in finding “the truth”. Then if they advance a few runs, they start to think they “fit in” with the people they’re covering so they stop asking tough questions or reporting on questionable issues. Martin Wolff of the Financial Times was a good example. The guy couldn’t shut up about how “great” Davos is because there are “so many great people in one place” or whatever. Nevermind the fact that half the people are ruthless despots and a big chunk of the rest are market manipulators.
My impression always been:
1. the western media is relatively tough on western “right wing” politicians.
2. the western media is mostly ignores or at worst covers for the western “left wing” politicians.
3. like you said the western media sucks up to any type of despots (right or left) abroad.
Well, being that the MSM is corporate owned, one would expect that the journalists who want to rise in the ranks would know which side of the bread is buttered. Seriously attack the PTB and you’ll be stuck at some podunk newspaper.
Plus the cult of celebrity doesn’t help either. I mean, if they’re royalty they have to be cool, and by definition better than us, right?
You ever met a lot of celebs? Some are cool, some are stuck up SOBs I wouldn’t piss on if they were on fire.
Those are the ones that cause trouble.
There was a CNBC 60 minutes show about Davos last night. I’m pretty sure it was a rerun from a year or two ago.”
I saw it too very lame if Davos is half as lame as the reporter made it seem like with his ” gee whiz isn’t this neat look at the ice car racing” interview style no wonder we are so F$d
http://www.cnbc.com/id/100543189
This is remarkable, and depending on the down payment requirements (I’m confident that Jumbo loans still require higher down payments), an indicator that the Fed’s ZIRP is now causing non-GSE lenders to make GSE-type loans.
Opinion: Fortress of Lies - Jim Kuntsler this week
I love Kunstler. I have been following him for years. 1998 to be exact.
Minor nitpick: I think he misused the term “dead head,” or am I missing the Cold War connection here?
LOL. “Dead Hand.”
I was thinking about Jerry Garcia today, coincidentally.
I’m watching flipping vegas. Buy low sell high? Flipping is back in style. The profits are uncalcuable.
The plumber on the show says, ” all you have to know is sh@t flows downhill!”
And ‘don’t chew your fingernails’
“They prey on the weak because that is nature’s way.”
Nature doesn’t always work like that.
http://www.forkparty.com/wp-content/uploads/2010/05/croc-pug1.jpg
Janet Spielberg
The last time interest rates were this low was caused by what? I am trying to figure out what the market will have to do with all the cash on the side. Just can not see people and WS sitting on its hands for very long. For jeebus’s sake, there is money to be made!
McDonalds is hiring in Mojave CA. At least 12 people were at the various tables filling out applications.
Lucky ducky land
Back in the recession of the early 1970s, I worked in a McDonald’s. I was amazed at the steady stream of applicants for such dirty, greasy jobs.
Have you been able to profit off the Fed’s monetary machinations?
Financial Times
March 11, 2013 6:39 pm
High vaultage
By Alice Ross and Claire Jones
Central banks have become crucial but controversial participants in currency markets
Traders of Japan’s currency became unusually fond of the Tokyo night air last year. Long after their colleagues had gone home, the traders left the grand investment houses that dominate the skyline of the Marunouchi financial district and strolled north for a block or two.
Once they reached the Beaux-Arts style Bank of Japan building, they would count the taxis parked outside. A lot of cabs meant the officials were working late. This, the traders speculated, meant they were planning an intervention in the currency market.
To aid Japan’s exporters, the central bank has loaded up on foreign currency in recent years to lower the yen’s value against the dollar. Although these interventions are not known in advance, the BoJ declares its foreign exchange purchases soon after making them.
What happens next with the money, however, is shrouded in secrecy. Little is known about what the reserve managers at the BoJ, and their counterparts in central banks around the world, buy.
Trying to fathom what secretive central banks do with their huge forex reserves – Japan, the second-largest reserves holder, had $1.28tn at the end of last year – has long been a headache for traders and investors.
But the influence of central banks has now grown to critical levels. Currency wars and global monetary easing have filled the vaults of the world’s central banks with record amounts of reserves. Since 2006, those have doubled, making central banks crucial participants in markets. Yet there is little accountability or transparency over their holdings.
With fears of currency wars on the rise and no end to monetary easing, the reserves could swell even further.
The $4tn-a-day forex market is the largest in the world but covert activities by central bank reserve managers have the clout to move it.
“They pose a lot of distortions in the market,” says one hedge fund investor who asked not to be named. “As an investor I can find out what Pimco is doing in the bond markets. But we’re made to feel we can’t ask what central banks are doing and there’s something uncomfortable about that. I’m afraid that this may lead to more volatility in the global economy in the years ahead.”
Many acknowledge the immediate effect that currency interventions have on financial markets. The G20 group of nations said in February that “excessive volatility” of financial flows and disorderly movements in exchange rates had “adverse implications for economic and financial stability”. Yet there is far less focus on the longer term impact of the surge in foreign exchange reserves.
The International Monetary Fund estimates that central banks held $10.8tn in assets at the end of September, more than four times as much as global hedge funds. China alone holds $3.32tn – the largest reserves of any central bank. After Japan come Saudi Arabia and Russia. In fifth place is the Swiss National Bank, which has amassed reserves worth $468bn, mostly in the past year as it has sought to cap the Swiss franc’s gains against the euro after its currency became a haven for investors fleeing the eurozone crisis. With the threat of more currency wars looming, other central banks could follow the SNB’s lead.
Central banks’ newly found riches are pushing them towards adventurous diversification into more unusual currencies. Unknown to many, they often use third parties, such as BlackRock and other private-sector companies, to manage their assets and conduct transactions. The SNB last year outfoxed markets by buying euros through a prime brokerage service at Rabobank.
“‘Safety, liquidity, return’ has long been the traditional mantra of central bank reserve managers,” says Terrence Keeley, global head of BlackRock’s Official Institutions Group. “But today that’s an oxymoron. Not even the safest assets are that safe.”
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Dang pessimists are trying to crash the stock market again!
I can tell by my urge to pour money into the stock market that it must be nearing crash time.
Who’s afraid of an S&P 500 triple dip?
March 11, 2013, 6:06 PM
The stock market hasn’t been this carefree since early 2007. Should we be worried about that?
As the S&P 500 Index moves toward an all-time high and volatility sits at multiyear lows, investors should remember we’ve been here twice before, with the index just below 1,600 both in 2000 and 2007 only for it to take a dive soon after.
So is a third dip on the horizon? Or will the U.S. stock benchmark power to a record?
There are similarities between those times and now.
For instance, on Monday, the CBOE Volatility Index VIX -8.18% closed down 8.2% to 11.56, its lowest level since Feb. 26, 2007, when it closed at 11.15. The so-called “fear index,” which saw a brief surge in February of this year, is currently down 36% year to date.
Also on Feb. 26, 2007, the Dow Jones Industrial Average DJIA +0.35% closed at 12,632.26 and had another 12% to gain until it ran out of gas less than 6 months later. Similarly, the S&P 500 Index SPX +0.33% closed at 1,449.37, and had another 8% to run-up before it tanked.
The multiyear low in volatility coincides with the Dow industrials closing up for a seventh-straight day Monday, its longest streak in a year and a fifth consecutive record close. The S&P 500 was also up for the seventh-straight day, closing at 1,556.22, just 9 points shy of its all-time high.
Also raising suspicions about the current rally is that it’s being supported by fairly low-to-average volume levels. On Monday, NYSE-listed shares topped a composite volume of 3 billion, with Nasdaq-listed shares at 1.6 billion. March volumes are about 8% below year-ago levels, and composite average daily volumes have run around 3.6 billion for NYSE-listed stocks and 1.9 billion for Nasdaq-listed ones year to date, according to Barclays.
“It might be emotionally difficult to buy when fear reigns, but it usually proves profitable,” said ConvergEx Group in a recent note. “Conversely, putting new money to work when complacency rules — as it does now –- is seldom a recipe for success.”
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