Bits Bucket for March 25, 2013
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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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Name:Ben Jones
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Oh no, 3 inches of snow… No work for me today
Dc is such a joke.
Feds are up and running.
don’t you mean slouched at their desks, drooling, looking forward to their two hour lunches, and counting down the days until they can collect lavish pensions at age 52 while collecting a contractor paycheck?
Or, you know, blogging incessantly here at the HBB.
we try to put the ‘cess’ in incessantly.
Yeah. It is reassuring to know our taxpayer dollars pay for oxide to shill for the housing industry.
…counting down the days until they can collect lavish pensions at age 52 while collecting a contractor paycheck?
Are you in Greece? Or France?
That’s in the USA. Just re-posting what we read on Breitbart.
As far as I know the earliest retirement age for feds is 55. And, since the median age to start is mid thirties, you would probably only have 20 years of service and the pension would be….one fifth of the average of your last three years of salary (not bonuses, overtime or other spiking). Less than $1700 a month for a person who retired with a 6 figure average of last three years. How horrible!
Polly,
I appreciate your voice of reason on the pension side, but to think we don’t have a compensation problem for federal workers is a bit out of line:
http://www.fedsmith.com/2013/01/09/average-federal-salary-rises-despite-pay-freeze/
Average federal worker salary is 75k; and this is without giant athlete, business owner, or movie star salaries bringing up the national average. On the other hand, the national median salary for a HOUSEHOLD is $44,389. Individual federal workers are on average earning 50% MORE than an entire average American househould.
If you try to tell me that this is because we have the best and brightest in the feds, I will have to disagree that the statement is correct, or needed. I appreciate the work that many federal workers do, and I agree that the retirement and compensation is not (yet) outrageous. But IMHO, it is overweight, along with numerous of our federal agencies.
Comparatively speaking, the US state worker, arguably one of the most highly paid sets of state workers, are making an average salary of 68k/yr.
http://sunshinereview.org/index.php/California_state_government_salary
This is one of the many reasons we should return operations of government programs and tax collections to the state and county levels, and leave the feds to their intended role as oversight and protection of civil rights (including environmental rights) and national defense (not offense).
contractors make up 70% of the Pentagon’s costs for delivering services:
http://articles.washingtonpost.com/2013-01-14/politics/36343675_1_furloughs-or-other-actions-sequestration-civilian-workforce
“Average federal worker salary is 75k…”
That’s about GS-11 pay meaning a four year college degree. Would be fair to rank the civilian workforce who have four year college degrees as a cohort?
People with four year college degrees are doing WAY better than their lesser educated neighbors according to the BLS numbers that have recently been posted here; technical degrees rank even better.
“On the other hand, the national median salary for a HOUSEHOLD is $44,389. Individual federal workers are on average earning 50% MORE than an entire average American househould.”
I am sure you realize that what people get paid depends on their credentials. The federal government hires many technocrats and experts with graduate degrees, and has to pay a competitive market rate to secure the services of competent staff. The comparison you make with the average American household, without considering the mixture of expertise the federal government hires or what private sector jobs pay the same category of workers, is not valid. And I certainly hope you don’t claim to be a statistician!
To be fair, I am doing work, but from home and definitely not going to spend 10 or 11 hours like a normal day.
It is pretty funny that today = actual snow, but Feds at work versus mid February = zero snow, Feds have day off.
The losses from the “Snowquester” will be incalculable.
Ah, bermuda shorts, t-shirt, sunshine and time working out in the garden listening to the birds chirping, the wood pecker knocking in the trees and the red tail hawks hunting.
Ca dreaming I think we are in another drought though
heard that this am on the radio
This should get a vote for MISLEADING HEADLINE:
—————–
Hong Kong Homes Face 20% Price Drop as Banks Raise Rates
By Stephanie Tong & Kelvin Wong - Mar 22, 2013 4:40 AM ET. (bloomibergi)
Prices could fall as much as 20 percent over the next two years, according to Deutsche Bank AG…
…London-based HSBC was the first among Hong Kong’s lenders to lift rates from March 14. Its mortgages linked to the best lending rate climbed to a range of 2.85 percent to 3.15 percent, while at Standard Chartered, also headquartered in London, they are from 3.1 percent to 3.5 percent.
…and the expected increases in new supply in the medium term
…Chief Executive Leung Chun-ying, who took over in July as head of the government, on Feb. 22 imposed his toughest yet price-curbing measures by doubling the stamp duty on all property transactions higher than HK$2 million ($257,700). The same day, the Hong Kong Monetary Authority told banks to maintain the risk weighting for new home loans at a minimum of 15 percent to help protect them against a drop in home values.
Leung, in October, imposed an extra 15 percent tax on all home purchases by companies and non-permanent residents.
———–
I don’t think it’s the 0.25% increase in interest rates that’s craaaatering home prices in Hong Kong. The new taxes (especially for foreigners), new inventory, and increased risk weighting are doing it.
Become familiar with the usage of the word “as”. It is often used in headlines to point out two things that are coincident, not necessarily cause and effect.
the word “as”. It is often used in headlines to point out two things that are coincident, not necessarily cause and effect.
It’s done to imply cause and effect, while allowing wiggle-room when called out on it. Old journalism trick.
Bloomberg abuses this to the extreme.
Geithner’s Home Under Contract One Week After Listing
By John Gittelsohn - Mar 22, 2013 12:01 AM ET. (bloomibergi)
“Timothy F. Geithner, who finished his term as U.S. Treasury secretary in January, has found a buyer for his house in Bethesda, Maryland, just a week after listing the home for $995,000.
Built in 1954, the 2,500-square- foot (232-square-meter) house has hardwood floors, a family room with a “soaring” ceiling, two recreation rooms and a deck that overlooks the backyard on the 10,000-square-foot lot.”
Prices in the Washington (SPCSWDC) metropolitan area are up 5.1 percent over the period [Aug 2009-Dec 2012], according to the [Case-Shiller] index.
————-
CIBT posted the home address just the other day. One of my friends lives in a house with the same floor plan. The house is NOT all that. In a less tony neighborhood it would fetch half that much if you’re lucky. The real value is in the quarter acre with the Bethesda address, or perhaps Geithner’s house has VERY fine finishes inside.
I wonder how much he lost on the deal?
If he sold it in one week, he did something right. With the sequester in force, DC area prices have nowhere to go but down. This is not the time to hold out for top dollar.
I though someone posted this weekend it was 1.6 million bought in 04. If so, I believe the loss is incalculable!
I think you are confusing the Larchmont home with the Bethesda home.
1.6 MM is his permanent home in NYC suburbs.
He bought a much smaller house in Maryland, for approx 950k.
Larchmont is a large house, 3500 sq ft, 4 or 5 BR. The Bethesda (MD) house is only 2 BR and 2200 sq ft, I believe.
Also, 1/4 acre is a large lot by Bethesda standards. Meaning it actually has room on the sides of the house. Most houses there are 25-30 feet from each other, tops.
The only lots bigger than that are people like Thomas Friedman or other people of similar means. You have to buy multiple lots and do a tear down or else have held the land in your family for generations. Most new-ish stuff in Bethesda is on 1/6 acre, give or take.
I think it was CIBT who posted the address the other day. 5709 Ogden Rd, Bethesda, MD 20816
The article says “Cape Cod” but this address is a Split Level. The description in the listing, especially the “soaring ceiling” and two rec rooms, is consistent with the split level floor plan (my friend lives in the same type house).
Would you pay $950K for this?
House looks like a what we call a ranch, but apparently you guys call a rambler- ie a one-story house. This one has a full finished basement, which they are considering a ’second’ floor. The soaring ceiling is I think in the addition in the back, but you can create one in a ranch/rambler by cutting out your ceiling and vaulting it to the rafters. It’s hard to heat such a room.
This part of Bethesda looks almost exactly like my neighborhood. Similar size and style 1940s and 50s ranches and cape cods, on similar sized lots, close to but not in downtown. His house looks much like several near me. Price range around here is $200,000 to $300,000, about 4x to 6x median city income.
I wonder if that’s his furniture. A lot of it is dorm room stuff.
Maye his rich guy furniture is still in the NY house.
I wouldn’t pay for it, but I also don’t think it’s the absolute worst place to buy. To me, some far-flung McMansion would be much worse.
Thanks for the correction. I was mixing up his million dollar homes.
“Prices in the Washington (SPCSWDC) metropolitan area are up 5.1 percent over the period [Aug 2009-Dec 2012], according to the [Case-Shiller] index.”
And prices are down and falling MoM and QoQ in DC.
Washington Post reports Washington area unemployment rate is rising.
The YOY Case-Shiller figures are next to useless for capturing turning points.
“re up 5.1 percent over the period…”
This is a really pathetic showing, despite the cherry picking of time frame. If one cared to look at the trend in this market over the past decade or two, it would be clear that this is the time that a strong sucker’s rally should be showing. Yet we get this enemic sideways wiggle for the past few years. There isn’t really anything to discuss until the market breaks out of this range in one direction or the other.
Along the same lines; Al Gore calls for urgency in paying him Carbon Taxes because it snowed in DC a few days into Spring. Please Al, it’s not statistically significant.
I would be surprised if housing breaks out of this range at all, Blue. Big-banking forces like low inventory, inflation, and investor demand will cancel out any price drop from J6P forces like outsourcing/sequester job loss or high PITI from rising interest rates. Hence the very long bounce along the bottom.
We are having sucker’s rally right now, and the suckers are the investors. They are pumping up the prices against each other, while most J6P are out of the game because they can’t get enough financing to compete. The investor bubble is likely to pop, but how far? Not down to 2000 prices. They will simply deflate down to pre-investor prices, which is 2011 (same as 2003) prices.
I don’t see anything that would prevent this bubble from acting like all other bubbles…eventually.
I also don’t think the price these bulk investors pay enters into the statistics driectly since they are distressed sales.
“Not down to 2000 prices.”
What year did the bubble begin to inflated in DC?
(this should be easy for you)
Wow… I see a huge difference between this and other bubbles: you don’t need gold, you don’t need commercial real estate, you don’t need internet stocks, you don’t need tulip bulbs, but you do need to live somewhere.
What year did the bubble begin to inflate in DC?
Why does it cost you 20 times as much for shelter as it costs me? Is it because you “need” more?
Skye, it’s more like 5x, not 20x. Your living on a boat is an exception; surely you know that. Even if I lived in the cheapest place I could (reasonable commute relatively safe), it would cost 3x.
Housing analyst (pimp), I only know this from the Zestimates, but the bubble began in about mid-2003. That’s when the price slope turned upward, and turned upward again (near vertical) from late 2004-mid 2007. I also vaguely remember a lot of acquaintances buying condos in 2003.
Oxy, I live on the boat seasonally, but I am living in a rented room in the winter. Just stopped by the marina to ask them to take the shrink wrap off the boat. I share a house with three other people. My share of rent and utilities is a little over $300/mo. Your choice costs way more than this. Is that because you need more than me?
Is that because you need more than me?
I do. Just like I probably spend five times more on food than someone who lives on beans and rice and ramen noodles.
“beans and rice…”
I don’t live on beans and rice either, because I am willing to pay a lot more for what I want to eat. A lot more. It is not because I “need” it.
because I am willing to pay a lot more for what I want to eat. A lot more. It is not because I “need” it.
One could say the same thing about housing. Some choose to live in the cheapest place they can find, some are willing to pay more- because they enjoy it, just as you will pay more for food because you enjoy it.
You can’t expect everyone to shack up with 3 roommates every winter just because you are willing to do so. Some are willing to live on ramen noodles, but that doesn’t mean we all should.
‘Housing analyst (pimp), I only know this from the Zestimates, but the bubble began in about mid-2003. That’s when the price slope turned upward, and turned upward again (near vertical) from late 2004-mid 2007. I also vaguely remember a lot of acquaintances buying condos in 2003.”
What you know is what you’ve been told and what you want to believe to rational your tragic financial error.
The truth?
Prices were flatter than flat for decades right up until 1997….. That’s right. And the bubble began inflating rapidly in 1998.
Yep. You paid multiples of pre-bubble prices. That’s your loss and your loss alone.
http://www.fhfa.gov/webfiles/24978/4q12hpistspo.xls
Skye, you and your roommates are paying $1200 for a 4 BR house in the boonies. Doesn’t sount like particularly low rent. Oh wait, that includes utilities - how warm is the thermostat set?
Assume Oxide has a $2400 mortgage and $200 average utilities. Unless you are a telecommuting tech wizard I’m willing to bet her net income is $27,600 a year more than yours.
Now PW wants us to remember she has maintenance costs. But she could expect a roommate to pay $800/month which would more than cover the maintenace. But what about the Craaaaaaaater? I’ll let her tell us how fast her mortgage would be paid off if she got a 2nd roommate and paid in an extra $800/month.
Now Oxide seems to not like the idea of roommates and as long as she’s making the good money that’s an understandable choice. What I don’t understand is she uses the phrase “shacking up” with such derision. In my day that phrase meant cohabitation and consentual sex. Not exactly a bad thing. Does it mean something different now? Is Oxide the country’s youngest prude?
And she could have rented the same square footage for half the cost.
Your point?
Prices were flatter than flat for decades right up until 1997
You just admitted what you denied the other day - that prices were rising in 1997. I showed you a chart and you denied it. Now you admit it.
Why lie Pimp Watch?
You have a beef with the data my lying friend. Go petition your beloved government with your grievance.
In the meantime, dump that slumside shanty while you still might be able to find a buyer for it.
Pimp and Prime, From yesterday.
Yes…every month when I have to pay less in (housing) total than your monthly car insurance………..That cheap??? How?…..
…..Of course it’s not. He’s a liar.
I’m not a liar. Here’s the math:
Pimp is married so he has a couple cars and probably decent ones. Where he lives car insurance is expensive. If he has a driving teen…. foggettaboutit!
My house is paid for 100%. Property taxes are low where I live and based on low cost’s from years ago. There really isn’t any homeowner’s insurance worth buying here so I don’t. My house is new and built from 100% stone/masonry and reinforced concrete with a tile roof. This house could last 200 years with upkeep but there is very little upkeep costs so far. (Yesterday I did have to spend $10 on D batteries for my flash water heater.)
There is no need to heat houses here and I use big ceiling fans and use air conditioning 4-5 months a year mostly at night in a couple bedrooms with highly efficient window units.
Yes, my monthly fixed housing costs are less than the car insurance on a couple’s decent cars in the expensive parts of the USA - and less than top-knotch insurance on one expensive car around NYC.
But I paid for this reality by paying cash for my new, well built house.
It’s a slumside shanty surrounded by a landfill in a third world country.
Dump it while you still might get something… anything out of it.
It’s a slumside shanty surrounded by a landfill in a third world country.
Dude……..I have to admit that’s funny.
landlord,
You have calculated my income to the third digit? Do you assume everyone lives at their credit limit? I am willing to bet that my net income is multiples of our gal Oxy’s. This is not amazing as I have more years doing what I do than Oxy has candles on her birthday cake, and I have oversight responsibilities that will probably come later for Oxy if she excels. That is not the point. If our incomes were equal, I would have many multiples money left over after paying housing expenses. She justifies paying bubble pricing with a mortgage because she needs a place to sleep and I say that is silly.
I am not shacking up. I am living in part of my son’s house currently and paying his half the rent while I am also paying his back to college expenses. It is enjoyable, not ramen noodles. His significant other is a great cook! The rent on the house is $500 a month. I am also paying the utilities. The house is probably 1500 ft2. For many years (before the living aboard a boat adventure) I rented a similar farmhouse for $400 a month. This one is in the village so there is a premium. If it were lake front it would be that much a week. I will still be shelling out this amount when I move back aboard the boat. I spent a good part of the fall with another of my children in Colorado. I spend significant time in airport and hotels too. I’m living below my means, intentionally. On the weekends I shack up elsewhere. When you are in debt, you do out of necessity. I’m not.
My point is that the price of housing is not because everybody “needs” what they are paying for. It is because so many are willing to pay what they are paying, because they feel they need it maybe, but more likely because they think it will bring them wealth. This is the case for Oxy as she has posted many times.
This is a great country. Only here could my fellows poke fun at me as Ramen Noodle, choosing between living on my yacht, traveling in my motorhome, a spell with one of my children or staying alone in my own house.
“my monthly fixed housing costs are less than the car insurance…”
I hear you! My monthly boat insurance is free. I paid for it last year.
I hear you! My monthly boat insurance is free. I paid for it last year.
You are smart enough to know the difference. Or does your politics cloud your intelligence?
You will never get that money back. Ever, unless you have problems. Right now I will get triple what I have into my house PLUS “free” rent without needing any problems to recoup my money. (Of course I expect this to change someday)
I told you there is a type of bubble here. There is. But it is different - not caused by easy money. There is no “easy money” here.
One time I told about the common practice here of un noted cash trading hands at a sale and you insulted my trustworthiness. Why? I’ve never done it but it is done all the time.
You implied I can’t be trusted because I told you how things are done here in a culture that is not my own and sure as hell is not your own. Because of politics? Weak sauce dude.
Blue, your are blinded. Just like your above post shows, apples and oranges confused because of who you vote for.
The rent on the house is $500 a month. I am also paying the utilities.
Your monetary losses, and your losses in opportunity, personal growth, happiness and what remains of your potential life experiences are incalculable.
Skye, you are to be admired for your frugality and for your innovative living arrangements. Somehow I’d pictured you living the leisure life but you are right - I had no indication of your source/amount of income.
I don’t recall Oxide ever bragging that she would make money on her house - only that the payment was cheaper than renting. She has told us that a similar sized townhouse rented for $2600 a month. Yes she has to consider maintenance costs but there is no way the maintenance on that house will run $2600 a month year in and year out. So, in her case, renting is not half the cost of owning.
Skye, is your son getting an exceptional deal on his house or is $500 the norm? Does that even cover the taxes?
Sorry, at least I can understand Oxide’s vacabulary, so as to disagree with her.
Brazil is in a huge bubble. It isn’t the center, it’s at the tail of the whip. Mind your neck.
landlord,
LOL. When you raise a large family, you yourself are living very modestly. After they are nidicolous it is easy to continue so.
It’s an average deal for a couple of young wage earners. The house is probably marketable for $60K. The villages here are more or less not on the leading edge of the bubble as the easy flip money is seen to be lake side. We have a lot of lake side.
Oxide was pretty adamant on the riches when she was going through the purchase, not so much lately. I do not remember $2600/mo maintenance, but I harp on her for ignoring depreciation (maintenance) in her mortgage to own calculation.
Taxes are 3% of full assessment, so $1500 to $2000/yr for that place. You get a homestead exemption for part if it’s your residence, not so if you are a landlord.
Oxide was pretty adamant on the riches when she was going through the purchase,
The “riches” I recall her describing was her purchase price penciling-out compared to her former rent and what it purchased at the time.
The future is just as much her guess as ours.
Then finish this sentence:
Rent is cash in the…….
Then finish this sentence:
Rent is cash
in thethat pays for shelter….as do mortgage payments.I’ve done both, and I like both for different reasons, regardless of who I vote for.
And I’ve voted for no one here.
Huge bonus points for Skye’s use of “nidicolous”.
To be fair, for Case-Schiller purposes, places like Bethesda are lumped in with places like Hyattsville or District Heights. Looking at aggregates distorts the picture.
The people moving to Bethesda are buying into the community and networking opportunities. If you live in Bethesda, you will have neighbors and acquaintances with the very top jobs in and out of gov’t. Law firms, GAO, world bank, IMF, accounting firms, high tech, etc. If you make the right connections, living in Bethesda will improve your career trajectory immensely. Being a friend or neighbor of someone is a powerful “in”.
I’ve said this before but I’m the only person in my ~20 attorney practice group who purchased housing with an eye towards keeping down costs. More than half of them live in Bethesda, the rest are in similar enclaves like Cleveland Park DC or Falls Church VA. The grand poobah of us all lives in Burtonsville. I’m steadfastly against paying to make connections, time will tell how that turns out.
I live in one of those networking neighborhoods too. But we’re likely to engage in such an activity while laughing at the antics of one neighbor’s chicken flock. Or praying with another who’s waiting for the phone call about his sister’s death.
Business? Sure, we’ll trade with each other. But we also care about each other too.
Your frequent mention of your alma mater belies your last assertion.
Not surprised at all. I said yesterday, that’s an average house in Bethesda and should go for at least 900k. If nice, a million. Those houses rent for 4-5k/month easily. 3 and 4 BR go for 6k/month.
Bethesda is still the gold standard for DC area housing, even though there are nicer areas (West Friendship, Burtonsville, Potomac). All these areas require a legitimate commute, whereas Bethesda is pretty easy in & out, plus all the public options (several metro stations nearby). Most of the people in West Friendship (where my parents live) don’t work in DC, they deal with Fed agencies in Germantown (Nuclear Regulatory Comm), Rockville, or White Oak (FDA).
Welcome to the obama housing bubble v2.0
————————–
Investors Pile Into Housing, This Time as Landlords
The Wall Street Journal - Nick Timiraos - 25 March 2013
LAKE FOREST, Calif.—Jeff Pintar had buyer’s remorse as he purchased 12 foreclosed homes in five Southern California counties on a single day. His regret: that he didn’t buy more homes a year earlier.
“Things have turned around faster than anyone anticipated,” said Mr. Pintar, who first began buying properties here four years ago and now owns or manages 1,700 homes, which he rents out for between $1,000 and $3,800 a month. Here in Orange County, nearly every home listed for less than $400,000 “is being pursued by institutional investor capital,” he said.
U.S. housing recoveries almost always have been ignited by rising demand from families and individuals looking for a place to live. This recovery is different. Investors—including some big Wall Street players—are leading the way, say industry executives and analysts. Their role is noteworthy given that flippers and speculators were blamed for helping to inflate the housing bubble of the past decade.
Today’s investors are mostly buying with the intention of holding on to the homes and renting them out. As they pile into the housing market, they have set off a chain reaction that has stabilized prices and changed market psychology, industry executives and analysts say. Fear of buying homes when prices are dropping has been replaced by the fear of missing out on cheap homes.
Investors have always played a role in the housing market, but their presence was often small. Currently, cash buyers—largely investors—make up about 32% of sales nationally, according to the National Association of Realtors. In Southern California, a favorite target for investors, absentee buyers accounted for 31.4% of purchases last month, up from an average of less than 17% between 2000 and 2010, according to DataQuick MDA, a real-estate research firm.
High maintenance costs traditionally had kept investors out of managing hundreds of scattered-site rentals. But investors set about overcoming those hurdles two years ago because low interest rates engineered by the Federal Reserve generated “a tremendous appetite for yield,” said real-estate consultant John Burns, who advises investor firms. “It really sent capital chasing to figure out this business.”
“We can’t find anything because investors are gobbling up everything that is affordable,” said Gloria Wain, 66, of Costa Mesa, Calif., during a morning meeting with her real-estate agent. After losing out to 18 offers—mostly cash offers from investors, according to her agent—she decided to raise cash herself in an effort to compete. She plans to borrow money from her son.
you need a lot of rent to make a deal work in s cal at those prices.
older homes will eat you alive in maintenance costs.
Check this out:
“High maintenance costs traditionally had kept investors out of managing hundreds of scattered-site rentals. But investors set about overcoming those hurdles two years ago because low interest rates generate by the Federal Reserve generated ‘a tremendous appetite for yield…’”
The high maintenance costs haven’t disappeared, and low interest rates may have generated “a tremendous appetite for yield” but there are still high maintenance costs to contend with.
“But investors set about overcoming those hurdles …”
Good luck with that. High maintenance costs are inherent with the business, it’s a “hurdle” that won’t go away.
It is what it is, low interest rates or not.
I knew a landlord who spent 6 months and a lot of money to get a dead beat tenant out. After getting the dead beat evicted he quickly sold the property (as is) just to be able to sleep at night.
A deadbeat’s delight:
The “investor” (choke) has to come up with regular payments to the lender, so that means he is forced to keep the place rented. This will make the investor a bit desperate, will force him to lower his standards a bit.
“The “investor” (choke) has to come up with regular payments to the lender, so that means he is forced to keep the place rented. This will make the investor a bit desperate, will force him to lower his standards a bit.” An just is bad, what are these rental houses going to do to the neighborhoods. Where we rented for 8 yrs with each house turned into a rental multi-family unit with five or six cars, toys left in the yard, five basketball (moveable) parked in the street curbside and graffiti.
“An just is bad, what are these rental houses going to do to the neighborhoods. Where we rented for 8 yrs with each house turned into a rental multi-family unit with five or six cars, toys left in the yard, five basketball (moveable) parked in the street curbside and graffiti.”
A few years ago my sister was searching for a rental on the San Francisco peninsula. Typical rents were $1800/month plus that came with one parking slot, and the neighborhoods had bars in the windows, graffiti, etc., so they upped their desired rent search to $2500/month plus!
“… low interest rates generated by the Federal Reserve generated a ‘tremendous appetite for yield’” translates to thousands of rentals being put on the market that otherwise would not be there.
And this will do what for rents?
High maintenance costs are inherent with the business, it’s a “hurdle” that won’t go away.
But if you own a lot of properties you can either negotiate good deals with service providers so you get your toilets unclogged much cheaper than the average guy, and/or you can employ your own plumbers, handymen, etc, and cut out the middleman.
A large landlord can therefore have much lower overhead than a smaller one. And never get a midnight backed-up toilet call.
If the landlord is a fund, he can also defer much of the maintenance to make the returns look good right now. Right now is all that matters.
he can also defer much of the maintenance to make the returns look good right now
Yep. But I still think a lot will go rent-to-own once their ‘probationary period’ is over. It’s a great way to stick it to the little guy, so it will appeal to their nature.
Best option: defer maintenance during the holding period, then foist it off onto the sucker who rents it to own when you’re allowed to sell.
ha-ha, just wait.
Someone should tell Mr Pintar about the shadow inventory.
it certainly is the obama housing bubble, because all those renters get 4000 a month section 8 vouchers, in addition to 1500 of food stamps, free obama phones, 20000 a year of earned income tax credits, free school breakfasts and lunches.
the article didnt say whether their free escalade is parked in the garage waiting for them on the first day of their lease, or if they have to go to the dealership to pick out the color and what kind of rims they get.
1. Trillion dollar bailouts of wall street and the banks
2. The FEDs buying trillions of bank assets at “par”
3. Six (6) trillion in deficit spending
4. Interest rates at 0%
5. Too big to fail
6. Too big to prosecute
It has nothing to do with obamaphones.
But it is ALL hope and change
none of which would have happened under a mccain presidency.
and all of which would have already been reversed under a romney presidency.
Yes, yes, I know.
When a republican is in the White House: He is evil and must be replaced immediately. All the bad in the world is his direct responsibility. We need hope and change, as fast as possible, to fix all of his problems. In fact, the problems caused are so enormous that we can continue to blame him six years later with a straight face for all the problems today.
When a democrat is in the White House: Well, gosh, this problem is so big and has been going on for the last 40 years. There is really no difference between the parties. In fact, if the other side had won things would have been just as bad. So we might as well stick with and defend who we have. He is trying really hard.
and this registered republican voted for ron paul in the caucus and gary johnson in the general.
nice try.
“a romney presidency…”
Well we don’t have that, we have Obama. We all have Obama. What do the people want from him?
the problems caused are so enormous that we can continue to blame (Bush) six years later with a straight face for all the problems today.
Or we can blame him with math:
“Tax cuts, Wars, Account for nearly Half the Public Debt by 2019″
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/02/28/the-single-best-chart-on-the-policies-driving-our-deficits-now-updated/?tid=pm_business_pop
That Washington Post chart is lying BS. Obama phones account for half of the public debt. Solyndra accounts for the other half. And Obama’s golf vacations account for the other half.
it’s true it was in the Daily Caller
It’s just sad to see an ex president whining on a blog.
Call the, on their Obamaphones for clarification.
By the end of Obama’s second term, the cost to taxpayers to pay for obamaphones will exceed the costs of medicare and social security combined.
Within 3 years, the sheer mass of Obamaphones will collapse the earth into and Obamaphone black hole, which will devour the solar system.
“She plans to borrow money from her son.”
Yeah, that will end well. Zillow sez: except for a couple trashed trailers, houses in Costa Mesa run about $300K.
But this all-cash investor stuff is VERY intriguing. Whatever happened to micro-second trading and credit default swaps? Surely they can make a better — and faster — ROI on that than on physical landlording. I’m trying to imagine all those young yahoo traders who were sitting at the feet of Rick Santelli during his epic Tea Party rant keeping track of clogged water heaters, sagging gutters, and deadbeat tenants.
I keep a theory that FHA wanted to get as many J6P’s into houses at 3.5% down 3.5% interest as they could before the investors caught the rental bug.
Those young yahoo traders don’t worry about clogged water heaters, sagging gutters, and deadbeat tenants, because IT’S NOT THEIR MONEY.
Somebody gets to worry, but it’s not them.
“…houses in Costa Mesa run about $300K.”
Try 600K
Thank you Allena. I was just looking at the lowest price stuff. If she can put together $600K cash, then IMO she belongs in Oil City. How much would she “borrow” from her son and how would she pay it back? SS?
I was gonna say!
$300K might get you a half-decent modest condo in Costa Mesa, and that’s about it…
At 66 yrs she doesn’t have any money to get into the market without trying to get double financing and is willing to get into bidding wars to just buy anything; we aren’t talking turn key here.
Talked to several people at a party here on Sunday. They know of several properties that went for $750K after a short listing (bidding war); Houses in that area should be selling for $300K but ever since 2008 whenever a house in that area hit the 500K level it went quickly as people thought they were getting a steal. Roads are heavily cracked, raised subfloors (sub standard),fencing falling apart and shake roofs in need of repair. Doesn’t seem to stop people from jumping in when people only focus on winning the bidding.
In my apartments where I rent I have choice of two swimming pools (one heated), jacuzzis, and I get same day maintenance. Why would renting a SFH be better? Although, I am contemplating summers in a VRBO somewhere on the California coast.
http://finance.yahoo.com/news/investors-pile-housing-time-landlords-030000004.html
Let’s look at some numbers:
‘He pulled his Mercedes-Benz up to the curb during a recent visit to a peach-colored three-bedroom on Belgreen Place in Lake Forest that his company bought for $375,000 and plans to rent for $2,600 a month.’
My calculator says if they hit that number right, it’s $31,200 per year. Now about the acquisition cost:
“This one looks like it’s going to need a lot of repairs,” he said.’…Field inspectors visit the homes, interview the owners and assess repair needs. A separate team combs tax and title records to make sure there aren’t additional liens, which the new owner would have to pay off.’
OK, does anyone here know what the approximate property taxes would be on this house? The insurance? And what would you estimate annually for maintenance and vacancies? Overhead/property management: ‘In the past four months, the professional landlord hired 75 new employees. He also looked into buying his own commercial office building for his growing operation, he said.’
A lot of hustle for a low single digit return, if not a loss. Could there be another motivation?
‘At first, he focused on buying rentals in California’s inland counties where there were more foreclosures and lower prices. But as competition there has heated up, yields—or the amount of rent a property fetches divided by its selling price—have fallen.’
And…
‘He is willing to accept lower yields in more expensive coastal markets that have better prospects for price appreciation’
I believe that many of these newfangled landlord/investors expect QE3 MBS purchases and other forms of federal housing stimulus to generate sizable capital gains which more than cover the losses on PITI, repairs, vacancies, etc by the time they cash out in a few years.
Are they the same guys who got the ‘heads up’ that it was time to get back into the stock market a few years ago?
“price appreciation”
Competition will be even tougher at the exits when the music stops.
Ben, Zillow is a really good estimator for all four P I T I in PITI. Just find a house in the same area with a similar list price. Here’s a 2-bed rowhouse in Lake Forest CA for $375K:
http://www.zillow.com/homedetails/14-Mission-Ct-Foothill-Ranch-CA-92610/25663208_zpid/
Find the taxes and insurance estimate by clicking on the “Est. Mortgage” number in the blue box. For $375K in Lake Forest, Zillow estimates taxes and insurance at $484/month. Normal maintenance: probably not that much if the LL has an on-staff handyman and a Lowe’s nearby. $500-$1500 material per year at most, especially if the LL did major fix-ups before renting it out. So if you had the cash lying around and bought the house outright, you can make a killing on rental. If you borrowed the money somewhere else to pay the cash so you’re still paying some form of PI, yeah, the ROI isn’t so hot.
“$500-$1500 material per year at most…a killing…”
Underestimating depreciation by this much is indeed fatal.
“Zillow is a really good estimator”
Huh? You could drive a truck through the ranges they give…precision is not their thing.
Monthly payment at 3.5% would be about $1700 a month plus $500 per oxide for PITI. We’re already up to $2200 on $2600.
Not sure I’d want to spend $375k to make $400 a month at most. Even if you bought it outright, it would require 12 years of payments to get your money back. Ouch!!
Even at 1% interest in the bank with $375k, you would make $3750 for doing nothing vs $4800 renting out some old house…Price appreciation and in the near term is the only business plan I see.
Estimated ownership costs:
Taxes= $4000/year
Landlord liability insurance= $3000/year (likely self-insured or re-insured)
Maintenance=$3000/year + contracted hourly wages from in-house contractors.
So there’s still at least a 10K/year profit/SFH potential. This is simply big apartment complex management in a different medium. Same companies, same employees, same business model.
BUT. I’m thinking that because this demographic shift in house ownership (from individuals to corporate syndicates) is doomed to the same crash as the last bubble, all these will eventually end up as public housing under (further) government subsidy. By the time they’re again privatized, it will be time for tear-down.
These guys are missing the boat by not buying with an eye to conversion to centralized senior housing– which is where the next bubble will be.
BUT. I’m thinking that because this demographic shift in house ownership (from individuals to corporate syndicates) is doomed to the same crash as the last bubble, all these will eventually end up as public housing under (further) government subsidy. By the time they’re again privatized, it will be time for tear-down.”
Exactly its the beginning of the end of SFH for the average worker. These rentals will turn to powder in 20 years.
The future will be a high tech housing hive controled by big government. See “Brazil” the movie and you see the future.
One time we were all farmers and had to maintain everthing.
Then home owners having to maintain some things but not as much work as the farm.
Soon we will all live in apartments and not have to do any maintance.
look like an Ikea showroom 600 square feet family of 4 if people still have families then.
‘He is willing to accept lower yields in more expensive coastal markets that have better prospects for price appreciation’
And there it is. It’s fatally flawed thinking irrespective of the accepted and know fact that housing prices never ‘appreciate’.
That boy is in deep trouble. Deep deep trouble.
What’s a VRBO?
Some people just can’t stand apartments and the lack of privacy. I am one of them, and I have never, ever lived in one.
“Some people just can’t stand apartments and the lack of privacy. I am one of them, and I have never, ever lived in one.”
Gotta ask, if you’ve never lived in an apartment how are you aware of the privacy issues?
Assuming all those landlords manage to fill their places with renters, who will be left to buy?
Also the more rentals saturation the market the more likely rent prices will fall. I see those Robert Kiyosaki wanna best getting low single digit returns at most.
‘Assuming all those landlords manage to fill their places with renters’
$2,600 a month for rent is a lot. I’ve never met someone paying that much in rent. Might be vacant here and there.
‘landlord/investors expect QE3 MBS purchases and other forms of federal housing stimulus’
The critical numbers here are property taxes and insurance. I’m not familiar with California property taxes. Does anyone have a ballpark figure? If it’s as high as I’m guessing, these guys aren’t expecting QE/MBS, they are expecting a greater fool.
“$2,600 a month for rent is a lot. I’ve never met someone paying that much in rent. Might be vacant here and there.”
We pay $2300 for a four bedroom, which seems exorbitant. But we know people who rent places twice the size of our rental home. I’m trying to gently encourage my wife to do a discrete inquiry about what these folks fork out on a monthly basis.
property taxes in CA are 1% of the purchase price and can go up 2%/ year after that. so a 375000.00 dollar home would be 3750/ year or 312.50 / month. If there are any mello roos you have to add that on too. plus add on an HOA fee in applicable.
1% purchase price plus misc city taxes like lights, parks etc.
“…these guys aren’t expecting QE/MBS, they are expecting a greater fool.”
As I pointed out yesterday, the Fed is already ‘all-in’ with QE. For clarification, I didn’t mean they technically couldn’t increase the amount of subsidy they are funneling into housing; rather, they are bumping into political constraints. So far as I am aware, the Fed’s charter doesn’t provide scope for them to subsidize a particular industry (e.g. housing) to the exclusion of others (e.g. geriatric services). They are supposedly neutral with respect to picking winners and losers in the economy. The fact that some regional Fed bank presidents are voicing concerns about this regime change towards favoring particular sectors of the economy is quite telling.
So your ‘greater fool’ theory seems as good an explanation as any for why this huge number of ‘buy-to-let’ investors seems to collectively believe landlordship is gonna make them all rich, as the Fed’s QE3 subsidy is presumably fully priced into purchase prices at this point.
‘collectively believe landlordship is gonna make them all rich’
As we can see from the numbers, and like oxide said, ‘the ROI isn’t so hot.’ And that’s assuming all their projections are correct. The guy says they expect higher prices from here. So if he’s right about that, it isn’t much further to:
‘He is willing to accept a negative cash flow in more expensive coastal markets that have better prospects for price appreciation.’
This is classic mania behavior. Thank you Wall Street Journal!
‘He is willing to accept a negative cash flow in more expensive coastal markets that have better prospects for price appreciation.’
The weird part is that coastal markets appear to be the one place in America with pockets of real estate that held its value while other areas of the U.S. (even inland CA) saw drops on the 30%-40% range. Anyone who believes in the concepts of equilibrium adjustment or mean reversion has to wonder whether many Californians in overpriced markets won’t move to more affordable locales inland, resulting in eventual price declines in the coastal zone.
Maybe it is different this time, but last time, after the early 1990s recession, a whole lot of Californians moved inland when prices dropped in Flyover Country to take advantage of far cheaper housing costs in reasonably nice areas away from the beach. And the priciest coastal areas didn’t see prices bottom out until maybe 6-8 years after the onset of the housing correction. Since the bubble was so much bigger this time and so much more hair-of-the-dog stimulus was applied to slow the correction, one might guess it could take a lot longer for coastal zone prices to bottom out this time, especially considering the ginormous slow-motion dead cat bounce which is currently playing out.
‘other areas of the U.S. (even inland CA) saw drops on the 30%-40% range’
Yeah, it makes less sense the more I think about it. Yields are falling inland, so he jumps into a market where yields are probably even lower. I wonder why he would do that?
if you want to live by the coasts you will pay thru the nose.
personally I dont need to be by the water. couple times a year visits is fine by me. I usually dont stay for long periods of time so renting a room is affordable.
The fees and permits to build anywhere near the coast lines are outrageous too.
CA property tax = 1% per year, adjusted upwards by at most 2% per year (thanks to Proposition 13) plus miscellaneous charges (e.g. Mello-Roos).
So you can see why local authorities might be very supportive of keeping SFR purchase prices north of $500K: A $5000+ annual tax bill per household ain’t chump change.
I frankly don’t understand how my neighbors, the ones who hold a garage sale about once a month, manage to fork out this kind of dough. Maybe they bought when prices were a lot lower than $500,000 for half a duplex?
November 29, 2012
Understanding California’s Property Taxes
Executive Summary
The various taxes and charges on a California property tax bill are complex and often not well understood. This report provides an overview of this major source of local government revenue and highlights key policy issues related to property taxes and charges.
A Property Tax Bill Includes a Variety of Different Taxes and Charges. A typical California property tax bill consists of many taxes and charges including the 1 percent rate, voter–approved debt rates, parcel taxes, Mello–Roos taxes, and assessments. This report focuses primarily on the 1 percent rate, which is the largest tax on the property tax bill and the only rate that applies uniformly across every locality. The taxes due from the 1 percent rate and voter–approved debt rates are based on a property’s assessed value. The California Constitution sets the process for determining a property’s taxable value. Although there are some exceptions, a property’s assessed value typically is equal to its purchase price adjusted upward each year by 2 percent. Under the Constitution, other taxes and charges may not be based on the property’s value.
The Property Tax Is One of the Largest Taxes Californians Pay. In some years, Californians pay more in property taxes and charges than they do in state personal income taxes, the largest state General Fund revenue source. Local governments collected about $43 billion in 2010–11 from the 1 percent rate. The other taxes and charges on the property tax bill generated an additional $12 billion.
…
notorious swindler casey in alaska?
https://twitter.com/caseyserin
[i]The critical numbers here are property taxes and insurance. I’m not familiar with California property taxes. Does anyone have a ballpark figure? If it’s as high as I’m guessing, these guys aren’t expecting QE/MBS, they are expecting a greater fool.[/i]
The taxes in CA are approx 1.15% of the FMV on date of transfer. In the case of the house in the story about 3750/yr. I imagine that eats into Mr. Landlord’s profit quite a bit.
Oh, that’s in an established (20 yrs or older) hood. In many new neighborhoods out here, the direct levies or Mello-Roos as they’re called, can sometimes match the cost of the taxes on the land and improvements. So 3.75K for the property plus ???K for the levies. Brutal.
Good luck finding a decent SFH in coastal CA for $2600 a month. My kid’s cruddy 2/2 apartment is more expensive than that.
I think $2600 would be the low end for a 2/2 in my building. One of several reasons I’m in a one bedroom.
My goodness… I didn’t realize apartment flats were that much! The rent for my former 3-bed townhome, with basement, was less than $2600.
Utilities included. Walking distance to metro. Neighborhood shuttle bus. Neighborhood community center. Don’t need a car. Pool. Gym. 24 hour doorman. On site maintenance. Additional storage unit included. Indoor parking available. Etc.
Oh, and flat means the same thing as apartment. “Apartment flat” is redundant.
High maintenance costs traditionally had kept investors out of managing hundreds of scattered-site rentals.”
these guys will love pin hole failures in copper plumbing
I fixed mine right away made the plumber go right into the wall while I stood there, cutting drywall multiple times until we found it and no the dripping leak did not register on the water meter. But it was wet I dried it out no mold.
Now on the other hand if I was renting….
“High maintenance costs traditionally had kept investors out of managing hundreds of scattered-site rentals. But investors set about overcoming those hurdles two years ago because low interest rates engineered by the Federal Reserve generated “a tremendous appetite for yield,” said real-estate consultant John Burns, who advises investor firms. “It really sent capital chasing to figure out this business.””
I’ve got to hand it to the Bernank and the rest of the pigmen. They succeeded in re-spiking the punch bowl; something I believed was bigger than them. Well played, Bernanke, for now..
So I’m on vacation in Wyoming right now for spring break at the parent’s house. The place across the road sold last year…I’d been keeping my eye on it for years because there are some nice things about it. But like everything else it got very inflated a few years back. When it sold last year it was at a bit of a discount from peak bubble asking prices but nowhere near cheap enough for me to think about picking it up.
So, I ask mom how the new people are doing over there. She says there’s a bit of a problem. They seem nice enough, but he’s a retired cop from California and he doesn’t understand how things work around here, and that he doesn’t actually have any water rights. People upstream were willing to do him a favor and give him a little the same as they did for the people that were there for the last 40 years but this guy thinks they owe it to him. He’s been calling all sorts of government agencies and complaining about what everyone else is doing not realizing they were trying to do him a favor. It’s about to get ugly…
You are dealing with a public union goon.
Entitlements and taking from others is all he has ever known.
Out of curiosity - How old is the retire cop on his fully spiked pension?
And he fits 2banana’s 5th axiom of public union goons.
5. The first things a public union goon does when he retires is move to a low tax and right to work state.
Also lots of Californians in the private sector. They max their 401k and IRA contributions and on retirement leave for a low tax state. I have no problem with that, taxation is theft.
No, using public resources without paying for them is theft.
taxation is theft
(Unless, by some strange quirk, you happen to live in a society.)
commie talk
Without taxation, there is no government.
“We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.” — Preamble to the Constitution
Don’t get me wrong, “excessive” taxation so that politicians can buy votes and funnel money to their favored constituents is an irritant.
Taxation is taking money by force. But without it, there is no government.
And without government, there is anarchy. And out of anarchy, rises the rule of the most ruthless and powerful.
Communes only work with very like minded people. And there are a whole lot of non-like-minded people out there.
‘there are a whole lot of non-like-minded people out there’
there won’t be after Obama’s DHS arrests them all for thought crimes and sends to the re-education camps
Are “hate” crimes the “thin edge of the wedge” for “thought crimes”?
Take your security clearance to Somalia and see how far it gets you.
Out of curiosity - How old is the retire cop on his fully spiked pension?
I don’t know…I’d have to ask my mother. I haven’t met him yet. I guess they are raising a 6th grade granddaughter here who was “having problems” in California, though. Sounds like code for let’s keep my 6th grade son on this side of the road. In the small town west, people have noticed that city kids with problems who were brought out here to try to get them straightened out can cause big local problems.
I believe here in CA safety retirement is age 55 with 20 years and around 70-80 percent of pay. Not base pay but base + overtime+uniform allowance+?.
Not base pay but base + overtime+uniform allowance+?.”
yea overtime so work lots of it your last 3 years, your boss knows what you’re doing so its all good..
LMAO. Water rights are the FIRST thing you look at when buying rural property. Then road access.
This big-city cop is about to get hissef an edumacation in country manners. (”I’m not here to enforce the law, I’m here to keep the peace.” -KC Sheriff, Aloysious (Sonny) Layman)
To head off a full-blown shooting war (or its legal equivalent) I’d suggest having the country water/resources management representative pay the newcomer a little visit and set him straight.
Then tell the idiot to drill a well and STFU.
“This big-city cop is about to get hissef an edumacation in country manners. ”
Yes, and this big-city cop without the full weight of the big-city police force behind him will find out that the locals really don’t care what he thinks. His attitude adjustment will come when he realizes that he will wake up to these same folks day after day as long as he stays there. (groundhog day?)
Doesn’t matter if he’s union or not. About 100% of the retired cops around here are “goons”.
It’s good to be the goon. And a triple-goon post from 2b today, been a while since we had one here.
the ben bernanke and the warren buffet.
http://www.youtube.com/watch?v=xA_glFb0oWs
Warren “Buf-fay” is TBTF…
“Warren “Buf-fay” is TBTF…”
Warren “Buf-fay” is TCTF…
Too Connected To Fail
As opposed to the rest of us who have……
Friends in low places - YouTube
http://www.youtube.com/watch?v=X5HG-skwZ_0 - 130k -
Ah yes Warren Buffett, the man who called for higher taxes on himself. It says the world’s most repected investor but it should say the the world’s most connected investor.
Buffett’s Berkshire Hathaway owes $1 billion in back taxes
posted at 1:25 pm on September 2, 2011 by Tina Korbe
From NewsMax:
Billionaire investor Warren Buffett triggered a major debate over taxes recently when he wrote in The New York Times that he should be paying more to the federal government. He called on Washington lawmakers to up tax rates on the rich.
But it turns out that Buffett’s own company, Berkshire Hathaway, has had every opportunity to pay more taxes over the last decade. Instead, it’s been mired in a protracted legal battle with the Internal Revenue Service over a bill that one analyst estimates may total $1 billion.
Yes, that’s right: while Warren Buffett complains that the rich aren’t paying their fair share his own company has been fighting tooth and nail to avoid paying a larger share.
The story of Berkshire’s years-long tax battle, which is generally known in business circles, took on new life this week when a group called Americans for Limited Government (ALG) reported that, according to Berkshire Hathaway’s own annual report, the company is embroiled in an ongoing standoff over its tax bills.
http://hotair.com/archives/2011/09/02/buffetts-berkshire-hathaway-owes-1-billion-in-back-taxes/ - 52k -
I would bet old Warren supports the newly proposed gun ban laws too. For people like his secretary and her husband.
Meet Dan Clark: Warren Buffett’s Personal Bodyguard For Almost 20 Years
Katya Wachtel|April 25, 2011
His name is Dan Clark. He’s 46. He’s a father of four. He has red hair. And he’s generally clean shaven.
And for almost two decades, he has been Warren Buffett’s personal bodyguard.
17 years ago, Clark was a young police officer in Nebraska.
He was eating lunch at a bagel joint in midtown Omaha, when he was approached by a woman who had been, according to the World Herald, “bothered by breaking news that Wisconsin bank robbers had plotted to kidnap” Warren Buffett.
The woman was Susie Buffett, the Oracle of Omaha’s eldest daughter. She demanded to know why police hadn’t told her family about the threat earlier.
According to the World Herald, Clark told Susie “he was not privy to details, but that the Buffetts should have been contacted.” He then offered his private security services before leaving the cafe. And the rest is history.
Clark’s security company now employs about 150. But back in the day, it was just Clark and Buff.
Clark told the World Herald, which has a profile on the security man today,
The first year it was me, with a protein bar in my pocket, with Mr. Buffett. I didn’t take a meal break, and I didn’t sit down. By the end of the weekend, I was dog-tired.
Clark has since cultivated his security skills, and has safeguarded Sarah Palin, George Clooney, Barack Obama and the Iraqi Judge who oversaw the trial of Saddam Hussein when they visited Nebraska.
So what are some of the security threats — real or imagined — that Clark remembers most vividly.
There was one “spooky admirer with a “blank” stare who followed Buffett from place to place during a Berkshire gathering.” Even though his team managed the situation, Clark says there were all on high alert.
And in 2007, one of Clark’s men disarmed a man in camouflage who was armed with fake gun and a real weapon.
But before Buffett, Clark dealt with some pretty grim situations, which would have prepared him for anything:
His nearly 24-year career with the Omaha Police Department began in 1986, when crack cocaine and gangs were relatively new to town and driving up violent crime, especially in and around north Omaha housing projects.
He patrolled a sprawling low-income complex nicknamed “Little Vietnam” for its bloodshed. Gangsters called him “Red,” and his efforts to quell disorder were criticized publicly by a few African-American community leaders as too aggressive.
http://articles.businessinsider.com/2011-04-25/wall_street/29959526_1_susie-buffett-security-fake-gun - 37k
Buffett earns a hundred thousand dollars a year and this hundred thou is what he pays taxes on.
If you want to measure wealth by income then Buffett isn’t all that wealthy. If you want to measure wealth by assets then Buffett is VERY wealthy. Income is taxed one way, assets another way. Apples and oranges.
In this country a penny saved after taxes is worth more than a penny earned before taxes.
“Buffett earns a hundred thousand dollars a year and this hundred thou is what he pays taxes on.”
Boy that is not a lot of money for a guy that can afford a full time personal bodyguard.
“If you want to measure wealth by income then Buffett isn’t all that wealthy.”
If you want to measure wealth by people who can afford a full time personal bodyguard then Buffett is all that wealthy.
There are two issues here. Buffett says the rich should pay more personal income tax.
The tax battle is for his corporation for which he has a duty to his shareholders to pay the minimum legal amount of taxes.
Apples and Oranges.
The right wing is awfully obsessed with Warren Buffet. You can see why he has a full time personal bodyguard.
wow…his distraction technique is effective.
i think buffet should advocate a wealth tax…kinda like cyprus.
40% wealth tax on the excess of ones net worth over say….$ 50 million?
Buffett doesn’t pay for his bodyguard, Berkshire Hathaway pays for his bodyguard. Buffett controls Berkshire so he gets to expense what he can to Berkshire.
If you are a stockholder of Berkshire then you get to pay for Buffett’s bodyguard. And for his corporate jet. And for lots of other things.
The trick is not to own, or not own all of it. The trick is to control. If you can control then you can set it up whereby the owners - the OPM guys - pay your bills for you.
40% wealth tax on the excess of ones net worth over say….$ 50 million?
Hmm, didn’t we hear this about fourscore years ago?
“We propose to limit the size of all big fortunes to not more than $3 to 4 million and to throw the balance in the United States Treasury; we will impose taxes every year to keep down these fortunes and to also limit the amount which any one may earn to $1 million per year, and to limit the amount any one can inherit to $1 million in a lifetime, throwing all surpluses into the United States Treasury. ” — Huey Long in the Senate, 1934.
Combo nailed it. I call this the Mittens Plan. But all these big guys do it. And while most of the support for these lawyerly games comes from the GOP (esp. Paul ryan) plenty of Dems are willing to join in and nurture the loopholes. At the end of the day both parties have the same master.
sounds good to me…wonder what ole uncle “Buf-fay” would think about that?
“The right wing is awfully obsessed with Warren Buffet. You can see why he has a full time personal bodyguard.”
Just like the TBTF untouchable Bankstas.
Eric Holder Admits Some Banks Are Just Too Big To Prosecute
Posted: 03/06/2013 3:29 pm EST | Updated: 03/06/2013 6:56 pm EST
When the Attorney General of the United States admits some banks are simply too big to prosecute, it might be time to admit we have a problem — and that goes for both the financial and justice systems.
Eric Holder made this rather startling confession in testimony before the Senate Judiciary Committee on Wednesday, The Hill reports. It could be a key moment in the debate over whether to do something about the size and complexity of our biggest banks, which have only gotten bigger and more systemically important since the financial crisis.
Holder’s confession comes after several weeks of criticism from lawmakers about the Justice Department’s failure to prosecute banks not only for potentially hard-to-prove cases involving the financial crisis, but also for cases in which proof wasn’t as hard to find, as in HSBC’s case.
http://www.huffingtonpost.com/2013/03/06/eric-holder-banks-too-big_n_2821741.html - 299k -
Income is taxed one way, assets another way. Apples and oranges.”
Things may change
EU and IMF officials struck a last-minute deal with Cyprus early on March 25 to resurrect a bailout for the island - but one banking chain goes to the wall and major clients, who include many Russians, will take a giant hit.Cyprus and its international lenders on Monday reached a last-minute rescue deal to resolve the country’s financial crisis.
The proposal includes a levy on uninsured deposits over 100,000 euros in the Popular Bank of Cyprus, known as Laiki, the country’s second biggest bank, which is set to be wound down. The deal is expected to contribute around 4.2 billion euros (US$5.5 billion) towards the Cyprus rescue package, Jeroen Dijsselbloem, president of the Eurogroup said.
Russian PM says “stealing continues” in Cyprus
Mon, 25/03/2013 - 11:12
MOSCOW (Reuters) - Moscow reacted with anger on Monday to a European Union bailout of Cyprus that will result in heavy losses for foreign depositors at the Mediterranean island’s banks, many of which are Russian.
“The stealing of what has already been stolen continues,” Prime Minister Dmitry Medvedev was quoted by news agencies as telling a meeting of government officials.
The weekend rescue deal will inflict heavy losses on uninsured bank deposits in Cyprus over 100,000 euros (85,453.23 pounds), much of which is money of Russian origin.
Russia turned down desperate appeals for financial aid last week from the Cypriot government and the final bailout was likely to be more painful for its depositors than an initial rescue plan rejected by the Cypriot parliament.
Speaking after the meeting, First Deputy Prime Minister Igor Shuvalov said losses to Russian investors in Cyprus were not yet clear.
He also said that the Cypriot unit of state-controlled VTB, Russian Commercial Bank, would not be affected by measures taken by the government.
“What is happening is a good signal to those who plan to move their capital to … Russian banks,” he was quoted as saying. “We have very stable banks.”
Russians are believed to account for most of the 19 billion euros of non-EU, non-bank money held in Cypriot banks at the last count by the central bank in January. Of 38 billion euros in deposits from banks, 13 billion came from outside the EU.
(Reporting by Douglas Busvine; Editing by Catherine Evans)
http://www.iii.co.uk/news-opinion/reuters/news/82644 - -
You would think the Russian PTB would welcome the ’stealing’, since that money was parked there to keep it out of Russia, and off its tax books.
You would, wouldn’t you?
But alas, what’s good for the goose is not good for the gander.
Some banks lost their shirts on foolish investments in Greek bonds, and nobody was there to bail them out. Some wealthy Russians with money in the bank got stuck holding the bag on the investment losses.
Unfair, maybe, but is this really stealing? Aren’t bailouts stealing from somebody else who had nothing to do with creating the problem?
Soon, Russian warships are going to be parked off of Cyprus…
Loose fiscal policy always leads to war.
that’s obama’s fault too, right
Obama once bit my sister.
We know he ate dog meat growing up in Kenya or Indonesia or wherever so its not surprising that he would bite and eat people too.
“We know he ate dog meat growing up in Kenya or Indonesia or wherever so its not surprising that he would bite and eat people too.”
Are your Klan Robes at the cleaners ?
Sarcasm meter broken there, Mo?
Are your Klan Robes at the cleaners ?
Goon’s joking.
Some cannibals were black, therefore Obama is half cannibal.
80s/90s band the Fine Young Cannibals were half black and half white too. Obama probably listened to them on his Sony Sports cassette walkman while eating people.
Amazing Russ,
I know it’s late and you’ll probably never see this, but your first comment literally made me spew my beverage all over my keyboard and I needed to pay homage. Nicely done.
“Loose fiscal policy always leads to war.”
One of the few things you ever got right.
Is wanting to sell oil in euros instead of dollars loose fiscal policy?
That’s just godless socialism!
Is wanting to sell oil in euros instead of dollars loose fiscal policy?
no.
how long can the primary dealers trade stocks amongst each other?
It’s their God given right. What would stop them?
As long as nobody else gets hurt…
Exactly.
After all, it’s not like it’s THEIR money, right?
now that is funny. what is your definition of “hurt”.
now that is funny. what is your definition of “hurt”.
It was meant to be funny :-).
what do you call it when you make trades amongst each other with the sole purpose of trying to move the market in a certain direction?
Wall Street Journal - Wash Trades Scrutinized, March 17
http://m.us.wsj.com/articles/a/SB10001424127887323639604578366491497070204?mg=reno64-wsj, 2013
thank you thats exactly what I’m taking about. A big scam.
I would have said “business as usual”, but that’s a good description as well.
what do you call it when you make trades amongst each other with the sole purpose of trying to move the market in a certain direction?
losing money.
“If you buy at house now at these massively inflated prices, you’re going to lose alot of money. ALOT of money.
Buyer beware.
the losses in dc, maryland, virginia will be incalculable.
Indescribably.
Remember when the land under Japan’s imperial palace in Tokyo was reportedly worth more than the entire state of California?
Try to calculate losses like that. If you dare!
It’s too. Horrible. To. Contemplate!!!
Kurtz: “the horror, the horror!”
http://www.youtube.com/watch?v=rDK9MDklzFo
New York Times editorial pimping chain migration:
“But anti-immigration groups and lawmakers have long attacked the practice, using the slanderous and misleading term chain migration, which summons images of a relentless flow of undesirables, usually from south of the border.”
http://www.nytimes.com/2013/03/25/opinion/time-to-strengthen-family-immigration.html?_r=0
Whatever it was last week that drove the price of gold skyward, ain’t anymore.
Gold - Electronic (COMEX) Jun 2013
Market open
$1,597.60
Change -10.40 -0.65%
Volume 43,952
Mar 25, 2013 10:03 a.m.
Quotes are delayed by 10 min
There’s a whole lot of kicking the can down the road going on.
Cyprus still at euro-zone exit risk – Moody’s
March 25, 2013, 7:22 AM
In the wee hours of Monday morning, Cyprus secured a deal with its international lenders to avoid a financial meltdown, but even as the agreement unblocks the way for a 10 billion euro ($13 billion) bailout, it may not be enough to secure the country’s future in the euro zone. Moody’s Senior Credit Officer Sarah Carlson argues in a note that the financial crisis in Cyprus “will have profound long-term negative consequences for the sovereign” and that the ailing nation “will remain at risk of default and exit from the euro area for a prolonged period.”
As part of the bailout deal, Cyprus agreed to restructure the two largest Cypriot banks as well as introduce a substantial levy on deposits above €100,000. Additionally, law makers last week passed legislation to impose capital controls to control deposit outflows from the banking system.
“These measures have already damaged the financial sector’s reputation and business model, and the system’s profile as an offshore financial centre is unlikely to survive this crisis. In spite of the global financial crisis, the sector has consistently made positive contributions to Cyprus’ growth,” Carlson said in a note.
“The potentially irreparable damage to the country’s current drivers of economic growth leaves its ability to sustain its current debt highly in doubt,” she noted.
…
Are these the people Congress meant to hammer?
Federal sequester hits home for many of L.A.’s poor
By Christina Villacorte, Staff Writer
Posted: 03/21/2013 09:35:32 PM PDT
Updated: 03/21/2013 09:41:37 PM PDT
Tens of thousands of Los Angeles County’s low-income renters could see a loss in their housing subsidy because of the federal sequester, leading to higher rent payments and a spike in homelessness, according to local officials.
City and county officials are in Washington D.C. this week lobbying to try to soften the blow of the cuts, pushing for permission to increase rents so they don’t have to throw most recipients off the program altogether.
“This is absolutely going to hurt the most vulnerable people in LA county,” said Sean Rogan, who heads the L.A. County housing authority, HACoLA.
Among those most vulnerable are people like Sylvia Juarez, a 39-year-old single mother of six, who has been on Section 8 housing subsidies for a year, receiving $1,825 in assistance for a three-bedroom Panorama City apartment after escaping an abusive relationship.
Juarez can work only part-time as a hairdresser because her two youngest children have health problems, but she found out last week that she would have to pay $100 more in rent each month, doubling the amount she pays out of her own pocket.
“With six kids, that would definitely make a big impact,” she said while seeking help at the emergency food bank at MEND-Meet Each Need with Dignity, in Pacoima.
“It’s going to be a struggle but I need the housing, so I have to figure out a way to get that money,” she added. “I have no choice.”
…
Didn’t seem to phase biden with his $1+ million two day visit to London/Paris or obama finding $200 million for jordan and $500 million for the palistinians in their last government “listening” tours…
and if you think that’s alot of money wasted, wait until Obama makes us pay for all of the Sharia Law Gay Marriages he wants
‘39-year-old single mother of six’
the ‘base’ of the permanent, democrat supermajority in USA.
Ah, but you missed what I feel is the most salient point: she found out last week that she would have to pay $100 more in rent each month, doubling the amount she pays out of her own pocket.
As in, she pays $100/mo for a 3 bedroom apartment. Now she will pay $200/mo. The government was paying $1800/mo. Now the government will pay $1700/mo.
Only a liberal could think that someone paying approx. 5% of the actual cost of their rental housing and now have to pay approx. 10% would be a bad thing…
Only a liberal could think that someone paying approx. 5% of the actual cost of their rental housing and now have to pay approx. 10% would be a bad thing…
No. That is too shallow and conservative thought. Most liberals think deeper and put the blame on a winner-take-all society that fails to provide living wage jobs to its people.
I’m sorry that’s complicated.
And if the extra work means that one of those sick kids spends one day in the hospital that could have been avoided if their mother was there to provide better supervision/care, then the extra $1200 she pays will be entirely wiped out and then some by the payments made by Medicaid and/or s-chip. The cost is speculative, but it isn’t hard to imagine the problem coming up.
Also, the newspaper editors should be ashamed of themselves. You don’t print name and location details of a person who has gotten out of an abusive relationship that recently (or at all, really).
Most liberals think deeper and put the blame on a winner-take-all society that fails to provide living wage jobs to its people.
As opposed to the “everyone-is-a-winner-and-deserves-a-trophy” society you seem to pining for?
if the extra work means that one of those sick kids spends one day in the hospital that could have been avoided if their mother was there to provide better supervision/care
Maybe she should have thought about all that before she had six kids, two of which have medical problems? Her burden on society isn’t my problem, nor should it be society’s problem. This isn’t Communist Soviet Union… “From each according to one’s abilities, to each according to one’s needs”.
Then again, most liberals and socialists are about a slogan away from being full-on communists.
So what do you suggest she do with those sick kids, N? Reabsorb them? You really don’t see any problem with simply whining after the fact that she shouldn’t have had the kids in the first place? Seven people in a 3 bed apartment isn’t living in the lap of luxury and a woman coming out of an abusive relationship may have had very little choice about how many kids she had without risking getting further abused. Or would you rather she have shot the person abusing her and then all the kids could have been society’s responsibility to raise in foster care while she cooled her heels in prison.
Look at your sentence and look at mine. It well illustrates “conservative” vs liberal thinking - slogans vs reality.
Mine:
“Most liberals think deeper and put the blame on a winner-take-all society that fails to provide living wage jobs to its people.”
Yours:
“As opposed to the “everyone-is-a-winner-and-deserves-a-trophy” society you seem to pining for?”
My sentence is pining for a society as we had in the past - a society that provided a dignified, living wage for most if its population but now has regressed to a winner-take-all, rigidly stratified crony-capitalistic banana republic. My pining involves work and the ability to find gainful employment.
There is no “trophy” mentality and “everyone-is-a-winner” would imply everyone working. This is in fact, a liberal attitude that actually embraces real conservatism more that you neo-cons. Because what could be more conservative than pining for a society (as we had in the past) that more rewarded the average person’s work? Is this not our history that has been hi-jacked by our new, winner-take-all perverted version of capitalism?
Your “everyone deserves a trophy” sentence, on the other hand, is in fact simply a right-wing buzzword slogan that I’ve heard Rush Limbaugh use for 10 years. Instead of addressing America’s economic shift, it simply attempts to cynically demonize those who’ve been cast aside in America’s road to ruin where only the rich prosper. It is a slogan thrown out by the right and accepted by those who refuse to think much.
most liberals and socialists are about a slogan away from being full-on communists.
As I just pointed out, you and not the liberals, are the slogan master and from what you’ve written, it seems you are about one crackjob slogan away from violence.
I don’t give a crap what she does with her sick kids, but it isn’t society’s problem, nor is it mine. And for the record, we are a family of four in a 2 bedroom apartment. We don’t live in the lap of luxury and make a whole lot more money than she does.
When are people going to learn “SOCIETY DOESN’T OWE YOU ANYTHING. THE WORLD DOESN’T OWE YOU ANYTHING”. Or you could just whine about life, fate, bad luck, abusive husbands, or whatever and increase our taxes to pay for someone else’s bad life choices.
When are people going to learn “SOCIETY DOESN’T OWE YOU ANYTHING. THE WORLD DOESN’T OWE YOU ANYTHING”.
Because it’s 2013 and while the world doesn’t owe us anything, ’society’ is what we want it to be and may or may not owe us. And allowing children and abused women in the street because they aren’t productive rather than giving them a few bucks is not ’society’.
When are people going to learn “SOCIETY DOESN’T OWE YOU ANYTHING.
Now that is just plain dumb Northeastener and directly conflicts with some of your “core beliefs”. It is a propaganda cartoon slogan that ignores human history and reality.
Of course society owes its members something. Even the racist secessionists of the Civil War thought that the government portion of the American society owed them something - in their case, the right to own slaves.
You constantly complain that the within the governmental portion of American society, the 2nd Amendment OWES you the right to bear arms (which it does).
Of course the government “owes” us something. We pay taxes and are entered into a social contract with it. That implies both parties in the contract “owe” something to each other. And the members of society are the one’s who decide what is owed to whom.
Our society and the governmental portion of our society absolutely owes us something. Look at the Preamble of the Constitution and then you try to explain to me that nothing is owed.
We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.
Those kids are the people who will live in this society with your kids and with you when you are old. Depending on what they end up doing, they might provide medical care in the society you live in as you age. Or they might program computers. Or they might prepare your taxes. Or they might protect you from criminals. Or they might cook and serve you dinner. Or they might wipe your butt. Or they might sell drugs to your grandchildren. Or they might stab you.
Children are infrastructure. They need to be educated and kept healthy. You can yell and scream that they are only the responsibility of their parents as much as you like. But if they end up as assets to society we all are richer for it. And if they end up as budens on society, we are all poorer for it. A little collective action at the right time saves buckets of money (and other more valuable things) later on.
Children are infrastructure.
Great post polly. Some people can’t see further than their wallet.
“….isn’t society’s problem, nor is it mine.”
It won’t be, until you get your car or house is broken into, or a drunk, uninsured member of the wretched refuse runs into you with their car.
Society does, indeed owe it citizens, something. In fact many things. Chief among those a structure of fairness and justice.
The other thing being ways and means to redress injustice that is accessible to the average person and not just those who can afford it as well as a reasonably safe and healthy living environment. (i.e. no food poisoning, but no reward for self inflicted mistakes)
All things that work to the mutual benefit of everyone.
If think those things exist for J6P in today’s society, you are extremely sheltered.
I think what Northeasterner and most teabillies fail to see is that they are *not* getting the full measure of their labor and they’re not getting a fair shake. In this country (like many worldwide), our economy is tilted so much in the favor of asset owners who control capital. It is infinitely better to be born into a family with assets and who can afford lawyers and accountants than it is to be born into hardworking, earnest parents that really rely on earned income. I have only recently begun to appreciate and come to terms with this. It’s not a GOP or a DEM thing, it’s an asset owners vs. wretched refuse thing. If you rely on your earned income to live in America, you’re a “have not” and very little will change that.
What the “haves” are perfectly fine with is continuing the system, limiting the help available to the wretched refuse. They’re not only doing this for kids of the very poorest, they’re doing it to people like Northeasterner. Middle aged people who are raising a family in a 2 BR apartment even though they work hard (I have no doubt he works hard). Meanwhile, the haves (who support both parties) have it better and better, because the schmuck wretched refuse get all riled up over God, guns, and gays. They are easily divided. They are also easily convinced that they are “better” than the working poor or unemployed, when the reality is that a concentration of resources and rigged economic markets means that the number of decent-paying jobs is limited. Yet, teabilly types really believe they are better than the working poor and single moms, etc. And thus, they will back the “haves”.
In my opinion, it’s all hilarious.
Children are infrastructure.
Pro life kooks were right, then?
LMFAO
joe smith is racis
“Could” - maybe. might.
Fear mongering non-story.
LOCAL HOUSING AID SUSPENDED BECAUSE OF SEQUESTER CUTS
By Roger Showley
12:01 a.m. March 25, 2013
Updated 12:03 p.m. March 22, 2013
Lost in the recent sequester battle in Washington is the hope of more than 30,000 low-income San Diegans to get federal rent relief after years of waiting.
While current aid recipients are not affected, future beneficiaries face more than a year of delay.
When Congress failed to reverse the $85 billion in automatic spending cuts ordered under the 2011 sequestration budget legislation, the Department of Housing and Urban Development advised local housing authorities to cut 5 percent from this year’s Housing Choice Vouchers, or Section 8, program.
Rick Gentry, chief executive officer of the San Diego Housing Commission, said that cut translates locally into nearly $7.4 million deducted from this year’s allocation of $147.5 million. Other housing authorities in the county face similar reductions.
At $850 per month in average rent support, that means 723 families who will not be served by the housing commission, at least for the time being.
…since Jan. 1, Gentry said, no new vouchers have been granted because of the sequester. That moratorium will likely continue for 14½ months, into early 2014, assuming the sequester isn’t repealed and further budget cuts aren’t adopted.
While deficit hawks seek to reduce the federal budget deficit by cutting back on programs and entitlements, housing assistance can be a godsend to financially strapped San Diegans who face a market with dropping vacancies and rising rents.
…
Maybe they ought to sell their Oabama phones and trade in those Escalades for a used Toyota and take out a loan to go back to school.
Escalades are so first-term.
the free sh*t army get free Porsche Cayennes now.
Maybe they ought to sell their Oabama phones and trade in those Escalades for a used Toyota and take out a loan to go back to school.
Or they could stop buying $300 Nike Jordan sneakers and get a job…
Or they could stop buying $300 Nike Jordan sneakers and get a job…
Making sneakers? Where?
McDonald’s maybe… I hear they’re hiring. Of course, so is Google… think maybe they could hack it at Google? I mean, those are good-paying jobs that were created in our Capitalist economy right? So what’s stopping them from getting that Google job?
Lot’s of jobs out there currently… unemployment is 6.8% here in the People’s Republic of Mass.
Here’s the thing, Rio: It doesn’t matter how much you wish it, there will always be people who can’t hack it in life. They don’t have the drive, talent, intelligence, motivation, education, luck, or any number of other factors to “succeed” in life. No amount of pampering by the government will fix that, no matter how much money you try and steal from the rest of us to pay for your grand socialist plans.
Here’s the thing, Rio: It doesn’t matter how much you wish it, there will always be people who can’t hack it in life.
Here’s the thing Northeastener, you can’t hack simple math. Simple math clashes with your distorted perception of what you’ve been brainwashed to think is.
The average wage for the average American has fallen while the cost of living has risen. Most all the benefits of 40 years of economic growth have gone only to the rich. We’ve lost millions of manufacturing jobs to benefit the rich.
When we had “full employment” in the 90’s most people were employed, even poorer and uneducated people. Do you understand the math? All these people working obviously had the “drive, talent, intelligence, motivation, education, luck, or any number of other factors to “succeed” in life.” because they were doing it. This proves that the “lazy” that your ilk stupidly complains about exist in much smaller numbers than you imagine. It’s in your head dude.
You give most of the people you call “lazy” a chance to make a living wage, they will jump at the opportunity. History has proven this no matter your simplistic and borderline moronic Koch Brother’s B.S. slogans that you like to spout.
The average wage for the average American has fallen while the cost of living has risen. Most all the benefits of 40 years of economic growth have gone only to the rich. We’ve lost millions of manufacturing jobs to benefit the rich.
I don’t disagree with any of that. That is the cost of globalization and “free trade”. I’ve said it before I support fair trade, not free trade. That means tariffs on goods coming into our country when our exports have tariffs going into their country.
I support fair trade, not free trade. That means tariffs on goods coming into our country
I agree and this indicates that you believe that we are “owed” fair trade. To accomplish this, the government portion of our society needs to implement tariffs. This means the government owes its people fair trade.
This is a good example of society “owing” its people something.
That means tariffs on goods coming into our country when our exports have tariffs going into their country.
which will reduce trade and increase the costs and lower the profits for everything involved. ‘fair’ trade is simply protectionism and there’s nothing fair about ‘fair’ trade.
Utter bullcrap, tj.
What are you? 12?
yes, it’s bullcrap to economic illiterates like you.
there’s nothing fair about ‘fair’ trade.
Someone gets it. Also we are closer to “fair” trade than “free” trade in today’s world.
When Australia, Japan, and Taiwan add 25% import tariffs to American-made surfboards while surfboards from China, Australian, etc. are imported into the US tariff-free, that is an example of “Free Trade” and that is a problem. That is part of the cause of Rio’s wage declines for the middle class.
Why should another country have free access to our markets while they do not provide free access to theirs? Sorry, but there is nothing free with free trade.
will reduce trade and increase the costs and lower the profits for everything involved.
Just who is the “everything involved” who is making all this profit? It sure as hell ain’t the worker bee employees. They don’t even make enough profit (pay) to buy food at Wal-Mart.
Study after study shows that tariffs affect nothing over the long term.
A great example are the tariffs China charges foreign companies to do business in their country. That sure as hell has stopped every damn company, American companies, that can afford it from trying to get piece of that economic action, now has it?
NOT having tariffs is economic suicide to the retail base, i.e. the consumer and consequently, your manufacturing base.
Stay in school tj.
‘fair’ trade is simply protectionism and there’s nothing fair about ‘fair’ trade.
Says the guy who says a real “free-market” would let people work 20 hours a week for a high standard of living.
Then uses spear making to try to prove his point. Then admits he might have to/want to make those spears in China.
Also implies something like that if that spear making factory were fully automated the former spear making employees would be able to work a week a year for a full years pay.
On what planet?
…has NOT stopped every damn company…
When Australia, Japan, and Taiwan add 25% import tariffs to American-made surfboards while surfboards from China, Australian, etc. are imported into the US tariff-free, that is an example of “Free Trade” and that is a problem.
first Northeastener, i hate to argue with you because we are so often on the same side. i know i probably won’t be able to convince you that the policy of ‘fair’ trade is disastrous. but i’m going to try, and i hope you give it some consideration.
the example you gave is a problem for those other countries, more than it’s problem for us. their citizens don’t get the cheap surfboards that they want. that means that they have less money in their pockets if they buy the boards or that they don’t buy them at all. when they don’t buy because of the tariff, it hurts the american manufacturer. when they pay up for the higher priced boards, they are hurting themselves. when outside authority raises the price of anything (as through tariffs), it’s price fixing, which is antithetical to free markets.
That is part of the cause of Rio’s wage declines for the middle class.
i assure you rio has no idea what causes wage declines.
Why should another country have free access to our markets while they do not provide free access to theirs?
the answer is simple. we benefit from having open access to trade. the freer, the better. the ones imposing tariffs on us are shooting themselves in the foot because they simply don’t understand how free markets and trade works. if the political elite truly understood economics there would never be another trade war, because all tariffs everywhere would be dropped like a hot potato. free trade brings prosperity to everyone.
Study after study shows that tariffs affect nothing over the long term.
studies by ignorant keynesians? how about showing me a study by an austrian economist that says this?
A great example are the tariffs China charges foreign companies to do business in their country.
simply, you don’t understand how tariffs hurt the imposing country. you probably never will.
NOT having tariffs is economic suicide to the retail base
now there’s a clueless statement. explain why not having tariffs is economics suicide.
their citizens don’t get the cheap surfboards that they want.
People would rather have a job that pays well than cheap crap.
Cheap crap is far down the list of what is important in most people’s lives, and what is far more important in people’s lives is provided for by a job that pays well, and not the money saved by buying cheap imported crap.
(Especially when that imported crap has lost you your job)
i assure you rio has no idea what causes wage declines.
Says the guy who thinks automation would lead to a years pay for a week’s work for those who don’t own the means of production. Here’s an “idea” of what caused wage declines.
Report: America Lost 2.7 Million Jobs to China in 10 Years
http://www.usnews.com/news/articles/2012/08/24/report-america-lost-27-million-jobs-to-china-in-10-years
There are roughly 5.1 million fewer American manufacturing jobs now than at the start of 2001. And China is to blame for more than one-third of that loss, says a new report…..
….Wages of American workers have also suffered due to the competition with cheap Chinese labor, EPI says. A typical two-earner household loses around $2,500 per year from this dynamic.
“They have been managing their economy on the back of ours for more than a decade,” says Robert Scott, director of trade and manufacturing policy research at EPI and the author of the report. China imports materials from the U.S., he says, to make cheap exports that it then sells back to U.S. consumers.
Says the guy who says a real “free-market” would let people work 20 hours a week for a high standard of living.
better go look up what i said again. if you try to use my words against me, at least get them right.
Then uses spear making to try to prove his point.
just another unsuccessful try at dumbing it down enough for you to understand..
Then admits he might have to/want to make those spears in China.
again, not what it said. but it doesn’t surprise me that you can carry an argument from one page to another and get it right.
Also implies something like that if that spear making factory were fully automated the former spear making employees would be able to work a week a year for a full years pay.
yeah, ’something like’. keep flailing away. when you don’t have the brains to make your argument, twist words instead. anyone that listens to you about anything will lose big.
doesn’t surprise me you can’t carry..
also “just another unsuccessful try at dumbing it down enough for you to understand..” shouldn’t have been bolded.
People would rather have a job that pays well than cheap crap.
liberal policies costs jobs.
Cheap crap is far down the list of what is important in most people’s lives, and what is far more important in people’s lives is provided for by a job that pays well, and not the money saved by buying cheap imported crap.
your hero’s policies are the reason people don’t have high paying jobs, or any job. and cheap crap is always better than the same crap that just costs more.
(Especially when that imported crap has lost you your job)
another clueless statement by someone that doesn’t understand how jobs get created.
keep flailing away. when you don’t have the brains to make your argument, twist words instead.
I twisted nothing. You are twisting in the wind. Explain it again in your words. You can’t but try. Go ahead. Right now. I’ll illustrate how your jr high level, babbling, psudo-economic “theories” are nonsense.
How can full automation can to a year’s pay for a week’s work?
How can real “fee-trade” lead to high pay for a 20 hours work week? (Even with things made in China?)
You have no worldly examples to support your adolescent drivel.
another clueless statement by someone that doesn’t understand how jobs get created.
I totally understand how jobs get created. In China. And here’s how:
We listen to propaganda spread by people like tj about how “free-trade” will help the economy. Then we lower duties on imports.
This is how jobs are created……IN CHINA.
Need proof? Look around people. Ross Perot warned of this with “free-trade” when he spoke of NAFTA. USA lost almost 3 million manufacturing jobs since 2O01 just to China alone. Those lost American jobs were then CREATED in China.
tj knows how to create jobs…..in China.
The master-minds who pushed for all this “free-trade” garbage abandoned their people and country just to make more money for the rich. There is a lot more involved here than the ability to buy $10 toasters at Wal Mart.
Revitalizing American Manufacturing called “Urgent National Priority.”
http://americanmanufacturing.org/homeland
New report by former Homeland Security Secretary Tom Ridge and former Assistant Secretary for Homeland Security Robert B. Stephan sees the U.S. as too dependent on foreign suppliers in crises.
Washington, DC. The United States is at risk of being dangerously unprepared for serious emergencies because of the offshoring of critical manufacturing sectors and a reliance on foreign suppliers for products needed in the wake of catastrophic events. According to a groundbreaking report released today by the Alliance for American Manufacturing (AAM), the U.S. must revitalize its manufacturing capacity to reduce such vulnerability.
The report was co-authored by Gov. Tom Ridge, the first secretary of the U.S. Department of Homeland Security, and Col. Robert B. Stephan (USAF Retired), a former Assistant Secretary for Homeland Security for Infrastructure Protection.
“There is a direct nexus between a strong domestic manufacturing sector and America’s ability to prevent, mitigate, recover from, and rebuild quickly in the wake of catastrophic events,” said Ridge. “Revitalizing America’s domestic manufacturing capacity must become a clear and urgent national priority at all levels of government and among industry leaders.”
……The report is the first comprehensive analysis of America’s growing reliance on global suppliers – many of whom may not have the best interests of the United States at heart in a time of crisis, or those who cannot meet demand quickly in times of emergency, given the complexity of the global supply chain.
“Relying on a potentially hostile trading partner in a time of need puts our national security at risk,” the report states.
Here’s an “idea” of what caused wage declines.
Report: America Lost 2.7 Million Jobs to China in 10 Years
http://www.usnews.com/news/articles/2012/08/24/report-america-lost-27-million-jobs-to-china-in-10-years
There are roughly 5.1 million fewer American manufacturing jobs now than at the start of 2001. And China is to blame for more than one-third of that loss, says a new report…..
yes, of course. blame mean old china for our own implementing socialist policies on that weaken the value of our labor and drive manufacturing to other countries. clueless as always.
….Wages of American workers have also suffered due to the competition with cheap Chinese labor, EPI says. A typical two-earner household loses around $2,500 per year from this dynamic.
yes, the clueless leading the blind. (you)
“They have been managing their economy on the back of ours for more than a decade,” says Robert Scott, director of trade and manufacturing policy research at EPI and the author of the report. China imports materials from the U.S., he says, to make cheap exports that it then sells back to U.S. consumers.
another clueless hack, and you of course you keep lapping it up. carry on.
Explain it again in your words. You can’t but try.
not only don’t you know how to create jobs, you don’t even know how to make a coherent argument. your tactics are as childish as you are.
i’ve explained it several times in several ways. it’s all there for anyone that wants to go back to the old posts and find it. but rather than try to argue the points, you just deny i made them. to anyone that understands how to make an argument, you look like a childish hack. you are a childish hack.
this has now devolved to a ‘did not’ ‘did to’ worthless diatribe.
so go ahead and spout your drivel. i’ve refuted all of it time and again.
Need proof? Look around people. Ross Perot warned of this with “free-trade” when he spoke of NAFTA. USA lost almost 3 million manufacturing jobs since 2O01 just to China alone.
ross perot was a good business man, but he doesn’t understand economics.
why can’t two entities that want to make a trade, just come together and do it? why do they need rio stepping between them and claim that what they’re doing isn’t fair? does rio want a cut? does rio want to save some business that he has no part of? rio doesn’t mind hurting the people who may want the product at the cheapest price. self-righteous rio will decide what’s fair and how much everyone will pay. that’s because rio thinks he’s a god. but alas, rio is only a demigod.
you are a childish hack.
If your “arguments” can be refuted so easily by a “childish hack”, then you need some better material other than “real free markets would lead to high pay for a 20 hour workweek”.
that’s because rio thinks he’s a god. but alas, rio is only a demigod
LOL…..que the music from the Twilight Zone.
If your “arguments” can be refuted so easily by a “childish hack”
you’ve refuted nothing you childish twit. all you’ve done is stick your fingers in your ears and say ‘na,na,na’.
Sudan Times
Khartoom, March 21, 2013,
Newly Popular War Lord cuts hours, raises pay at his car stripping factory.
Aksish “Spike” Ahmeed tweeted on Friday that he would be doubling the pay, increasing health benefits and halving the hours of his 42 employees at his downtown Khartoom “Value-added Quick Auto Strip” LTDA factory.
“The total lack of regulation and import duties on these stolen cars puts me in the position to give my workers a better life on half the work. Being a true capitalist in Sudan which enables pure, free-market capitalism, I am fortunate to be able to give back to the little people because I already make enough money as it is”.
The Acting Quasi-President of Sudan praised the actions adding “The government of Sudan just want’s to get out of the way and let market do what the market does in Sudan”.
Update: Aksish “Spike” Ahmeed is now said to be missing or in hiding due to a shareholder’s revolt after his recent tweet. Please stay tuned to the Sudan Times for further developments on this (fake) story.
you’re ALL a bunch of racis
Jesse Jackson needs another Anheuser-Busch distributorship for his kidz. Better give him that soon or I’ll wag my finger at you and call you a racis
Gotta love the “little people” like Leona did -
So housing subsidies will be cut. One of the conservatives wet dreams coming true.
Soon, according to dogma, the cost of housing will drop dramatically, because government subsidies are what keep prices high.
Place your bets.
Actually yes. If the cuts were applied across the board, it would gore both the Republican and Democratic oxen. They figured that both R’s and D’s would compromise in order to prevent goring their respective oxen. And oopsie, no compromise. Let the goring begin.
Speaking of Gore, how you Midwest and east coast people liking all that ‘global warming’ in the first week of spring?
BWA HA HA HA HA HA HA HA HA HA HA HA!
I figure it is something we owe the universe since we didn’t get a real hard frost until towards the end of January.
The way Al Gore’s global warming has been going lately, we’ll all be singing the Prince song “Sometimes It Snows In April” soon.
Speaking of Gore, how you Midwest and east coast people liking all that ‘global warming’ in the first week of spring?
Not sure how to answer that. It was over 50 and sunny so I went mountain biking yesterday on the trails in the local state forest, so…
Speaking of Gore, how you Midwest and east coast people liking all that ‘global warming’ in the first week of spring?
Ask me that question again this summer when our reservoirs are half empty and drought restrictions are placed on watering our lawns while there’s yet another heatwave.
Half the state of Colorado can burn to the ground but at least we have cheap gas and can buy cheap plastic sh*t from Walmart. Ain’t capitalism grand?
Lucky Ducky is on disability.
Can’t say I blame him: It is very hard these days to qualify for gainful employment. By contrast, qualifying for a federal disability check is easy.
Unfit For Work: The Startling Rise Of Disability In America
NPR | March 22, 2013 7:22 p.m.
Chana Joffe-Walt
Parts of this story will air on This American Life this weekend, and on All Things Considered today and next week. A version of this story with photos, graphics and a video is online here.
In the past three decades, the number of Americans who are on disability has skyrocketed. The rise has come even as medical advances have allowed many more people to remain on the job and new laws have banned workplace discrimination against the disabled. Every month, 14 million people now get a disability check from the government.
The federal government spends more money each year on cash payments for disabled former workers than it spends on food stamps and welfare combined. Yet people relying on disability payments are often overlooked in discussions of the social safety net. People on federal disability do not work. Yet, because because they are not technically part of the labor force, they are not counted among the unemployed.
In other words, people on disability don’t show up in any of the places we usually look to see how the economy is doing. But the story of these programs — who goes on them, and why, and what happens after that — is, to a large extent, the story of the U.S. economy. It’s the story not only of an aging workforce, but also of a hidden, increasingly expensive safety net.
For the last six months, I’ve been reporting on the growth of federal disability programs. I’ve been trying to understand what disability means for American workers, and, more broadly, what it means for poor people in America nearly 20 years after we ended welfare as we knew it. Here’s what I found.
One In Four
In Hale County, Alabama, one in four working-age adults is on disability. On the day government checks come in every month, banks stay open late, Main Street fills up with cars and anybody looking to unload an old TV or armchair has a yard sale.
Sonny Ryan, a retired judge in town, didn’t hear disability cases in his courtroom. But the subject came up often. He described one exchange he had with a man who was on disability but looked healthy.
“Just out of curiosity, what is your disability?” the judge asked from the bench.
“I have high blood pressure,” the man said.
“So do I,” the judge said. “What else?”
“I have diabetes.”
“So do I.”
There’s no diagnosis called disability. You don’t go to the doctor and the doctor says, “We’ve run the tests and it looks like you have Disability.” It’s squishy enough that you can end up with one person with high blood pressure who is labeled disabled and another who is not.
I talked to lots of people in Hale County who were on disability. Sometimes, the disability seemed unambiguous.
“I was in a 1990 Jeep Cherokee Laredo,” Dane Mitchell, a 23-year-old guy I met in a coffee shop, told me. “I flipped it both ways, flew 165 feet from the Jeep, going through 12 to 14,000 volts of electrical lines. Then I landed into a briar patch. I broke all five of my right toes, my right hip, seven of my vertebrae, shattering one, breaking a right rib, punctured my lung, and then I cracked my neck.”
Other stories seemed less clear. I sat with lots of women in Hale County who told me how their backs kept them up at night and made it hard for them to stand on the job. “I used to cry to try to work,” one woman told me. “It was so painful.”
People don’t seem to be faking this pain, but it gets confusing. I have back pain. My editor has a herniated disc, and he works harder than anyone I know. There must be millions of people with asthma and diabetes who go to work every day. Who gets to decide whether, say, back pain makes someone disabled?
As far as the federal government is concerned, you’re disabled if you have a medical condition that makes it impossible to work. In practice, it’s a judgement call made in doctors’ offices and courtrooms around the country. The health problems where there is most latitude for judgement — back pain, mental illness — are among the fastest growing causes of disability.
…
Have yet to see any stats correlating obesity with being on disability.
If diabetes qualifies you for disability, I am pretty sure there is a correlation, as clearly obesity and diabetes are correlated.
does he look familiar?
https://twitter.com/caseykonstantin
Casey lives!
Our boy is headed for Trumpdom.
In our current labor market, you might as well count being over age 45 a “disability”.
Well jetfixer, that may very be one of the causes of the increase.
Contrary to neocon feudalistic philosophy, people who can’t get a job don’t just go away die out of sight. They usually get creative, just not the approved neocon way.
It’s about 100% of the “cause” of the increase, IMO.
Notice the surge in applicants in the 6 months after people laid off in 2009 lost their unemployment benefits.
If the only thing between me, then losing the house and living in a cardboard box under a bridge, guess what I’d be applying for?
Maybe the government should start sending out “Your leeching days are over” letters, with cyanide pills enclosed.
Another one of my 50 something buddies was let go last week. He too has joined the “Independent Contractor at 50% Pay” Legions.
Over 45, no college degree, and living in a red state = formula for very likely disability claim.
Why? The people can’t get jobs in the digital economy and aren’t the best fit for crappy $8/hr McDonalds or other retail jobs.
Your forgot “part time” because that’s what most of them are.
Actually, some of the states with the lowest unemployment rates are red states, like the Dakotas, Nebraska, etc.
Don’t be such a buzzkill. They can all go re-train for the “Jobs Of The Future”.
http://en.wikipedia.org/wiki/The_Future%27s_So_Bright,_I_Gotta_Wear_Shades
Aside from the most obvious cases, disability is an economic condition.
When the unemployment rate is below 5.0%, employers will hire and put up with workers who are a little hard to train due to mild retardation, have trouble interacting with the public due to mild or episodic mental illness, or have low manual productivity or frequent absences due to obesity, arthritis, asthema, etc.
When desperate young college graduates are willing to flip burgers for nothing as “interns”? Not so much.
The solution to borderline cases that might be scamming the system is a “workfare” program. They’ll get a regular jobs as soon as someone offers it.
“I sat with lots of women in Hale County who told me how their backs kept them up at night and made it hard for them to stand on the job. “I used to cry to try to work,” one woman told me. “It was so painful.”
If unemployment was low enough, someone would be desperate enough to find a way to get something out of these women while they were seated. Now? Why bother.
“I have back pain. My editor has a herniated disc, and he works harder than anyone I know. There must be millions of people with asthma and diabetes who go to work every day.”
These folks have other things going for them, that make their limited disabilities worth putting up with.
These folks have other things going for them, that make their limited disabilities worth putting up with.
For one thing they have jobs that can be done sitting down. What would disable a roofer might not disable a computer programmer.
Trust me, you don’t want to work with many of the people who are on disability. There’s a reason they’re unemployed.
Look at disability as a give-away to the rank and file who don’t have to put up with them in the workplace.
Look at disability as a give-away to the rank and file who don’t have to put up with them in the workplace.
LOL! And, ahansen, you’re speaking the truth. Again.
Pity the public employees who do their jobs. They tend not to get that same giveaway!
“There’s a reason they’re unemployed.”
Because they’re not hungry???
Who gets to decide whether, say, back pain makes someone disabled?”
I think a judge does , case by case. So choose your judge wisely.
Lucky Ducky is on disability.
Yes. It seems lots of people would rather stay home and collect a paycheck than go to work and collect a paycheck… imagine that. Provide a system to get paid for doing nothing and people take advantage of that system. Amazing.
Provide a system to get paid for doing nothing and people take advantage of that system. Amazing.
Provide a system to get decently paid for doing something and people take advantage of that system. Amazing.
(I fixed it for you and history and reality is on my side)
Given that the disability checks are a fraction of the incomes most of these people lost, I suspect that they would rather have their old jobs back.
Red states have a runaway epidemic of people on disability. Look at Hale County, Alabama, for example. 25% of ALL adults in the county are on disability. That means, all people above 18. LOL! (The 25% figure is from a story reported by the WSJ and MarketPlace by American Public Media.)
The racial makeup of the county was 39.83% White, 58.95% Black or African American, 0.17% Native American, 0.16% Asian, 0.02% Pacific Islander, 0.29% from other races, and 0.58% from two or more races. 0.91% of the population were Hispanic or Latino of any race.
A couple of VA dudes that I know of are at full SSDI / PTSD maxed out at $4k/month and when you add in the carpentry work on the side it`s a pretty liveable income.
full SSDI / PTSD maxed out at $4k/month and when you add in the carpentry work on the side it`s a pretty liveable income.
10 to 1 they vote GOP, and b!tch about deadbeats, too.
Half the workforce doesn’t make 4k a month.
That’s better than “liveable”.
So “narc em out”, and win the whistleblower lottery.
Our only “growth” industry.
Ever tried to get paid from those programs?
“It seems lots of people would rather stay home and collect a paycheck than go to work and collect a paycheck”
I suspect this is true as most of us anticipate retiring someday. But it totally misses the dynamic. For a lot of these workers on disability, the job loss came first and the disability claim came later - a strategy born of desperation.
You refuse to acknowledge this dynamic, perhaps because it would interfere with your sense of being in control of your life.
Who moved my rally? The Dow is dropping a lot faster than the Marketwatch peops can keep up.
10:46 AM EDT
March 25, 2013
New York
BREAKING U.S. stocks trim advance; Dow declines 6.8 points
Dow Jones Industrial Average
Market open
14,472.45
Change -39.58 -0.27%
Volume 25.75m
Mar 25, 2013, 10:47 a.m.
Previous close 14,512.03
Day low 14,469
Day high 14,564
DOWn
March 25, 2013, 10:41 a.m. EDT
U.S. stocks rise; S&P near all-time closing high
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) — U.S. stocks scaled back Monday gains, which had the S&P 500 Index less than 1 point from its record high, after an accord was reached to avert financial collapse in Cyprus.
After closing within a fraction of its all-time closing high of 1,565.15, hit in October 2007, the S&P 500 SPX -0.02% was lately up 5.15 points, or 0.3%, at 1,562.04.
Amid turmoil, markets push ahead
Investors have found a new sense of calm amid global economic crises; Cyprus reaches a deal with the ECB on a bailout; Dell receives rival buyout offers - and they may be more valuable; Three stocks to watch. Photo: Getty Images.
Consumer companies led the gains among the S&P 500’s 10 major sectors, all of which climbed.
The Dow Jones Industrial Average DJIA -0.24% rose 8.23 points, or less than 0.1%, to 14,520.26.
The Nasdaq Composite COMP -0.03% added 7.87 points, or 0.2%, to 3,252.86.
…
Mr Market isn’t cooperating very well today with the BS narrative:
…SPX -0.13% was lately up 5.15 points, or 0.3%, at 1,562.04.
…
The Dow Jones Industrial Average DJIA -0.31% rose 8.23 points, or less than 0.1%, to 14,520.26.
The Nasdaq Composite COMP -0.22%…
there is no volitility in these markets. I like the good ole days with 200- 300 pt moves. more exciting. these markets are boring.
Get a clue, Marketwatchers!
MARKET SNAPSHOT
U.S. stocks rise as Cyprus deal averts collapse
S&P 500 is making another run at a record high, after an accord was reached to avert financial collapse in Cyprus.
who will be left holding the bag if retail doesnt take the bait?
What’s the problem? The DOW is still way over 14k.
‘Fed put’ fade to help steer S&P 500 below 1,400: Wells Fargo’s Adams
March 25, 2013, 3:24 PM
With the average S&P 500 Index SPX -0.33% target in the upper 1,500s, where does an analyst come up with a forecast of below 1,400 by the end of the year? Simple: The “Fed put” that stocks have enjoyed for the past four years will fade in the second half of this year.
If the economy steadily improves, expect the Federal Reserve to be more hard pressed in justifying near-zero interest rates and easing efforts. Even though the Fed will stick to its guns, the chatter about the unwind in 2014 will be enough to weigh on stocks in the second half of 2013, said Gina Martin Adams, institutional equity strategist at Wells Fargo Securities, in a Monday note.
Adams has one of the most bearish forecasts on Wall Street. She sees the S&P 500 ending 2013 at 1,390, a little more than 10% below its current level. In 2012, her target of 1,360 was only off by 5%, with only three other analysts at major firms coming up with a more accurate prediction, according to Crain’s Pensions & Investments. She’s stuck by her 2013 forecast as some of her Wall Street rivals upgrade their views for stocks to rally even further.
In looking at past hikes in Fed rates, Adams saw the average decline in the S&P 500 was 8% in the six months preceding the hike. (See chart above). The average was nearly 13% when earnings growth was weak. Also, stocks come under considerable pressure when Fed bond buying programs end.
…
Unlike American oligarchs, it seems Eurozone oligarchs cannot expect bailouts to make them whole on their bad gambling debt.
Damn godless commie socialists! Don’t they know it’s the divine RIGHT of oligarchs to be bailed out of their mistakes!
Hell, if anybody should know this, it’s them after having centuries of kings an queens! What’s wrong with them people?!
After the German election, expect the bailouts to continue.
Specifically Russian oligarchs.
It’s a chess match and the Russians blundered. Hard to believe they wouldn’t have seen it coming. Or they simply didn’t consider the rules to be so malleable.
Just wait. When they cut off the gas supply during the winter, they will have the last laugh……
Actions have consequences. To think one can deliver an unexpected rogering to powerful interests and expect it to have little or no significant consequences seems a bit unlikely.
<May be the ruskies are a lot smarter than we give them credit for.
While ordinary Cypriots queued at ATM machines to withdraw a few hundred euros as credit card transactions stopped, other depositors used an array of techniques to access their money.
No one knows exactly how much money has left Cyprus’ banks, or where it has gone. The two banks at the centre of the crisis - Cyprus Popular Bank, also known as Laiki, and Bank of Cyprus - have units in London which remained open throughout the week and placed no limits on withdrawals. Bank of Cyprus also owns 80 percent of Russia’s Uniastrum Bank, which put no restrictions on withdrawals in Russia. Russians were among Cypriot banks’ largest depositors.
Looks like the “socialists” are better capitalists than us.
Cyprus to be model for future bailouts
http://www.ft.com/intl/cms/s/0/68c9c18e-955e-11e2-a151-00144feabdc0.html
The €10bn Cypriot rescue marks a watershed in how the eurozone deals with failing banks, with European leaders now committed to “pushing back the risks” of paying for bank bailouts from taxpayers to private investors…..
….the relative market calm in recent months, coupled with the lack of market panic following the decision to force private investors and depositors to pay for the entire bailout of two large Cypriot banks, allowed the eurozone to go after private money more aggressively when banks fail.
“Taking away the risk from the financial sector and taking it on to the public shoulders is not the right approach,” …..
……“If we want to have a healthy, sound financial sector, the only way is to say: ‘Look, there where you take the risks, you must deal with them, and if you can’t deal with them you shouldn’t have taken them on ….
This new approach would mark a radical change of course since the crisis began three years ago.
In both the Irish and Spanish banking sector rescues – which were similar to Cyprus in that massive bank failures risked plunging the governments into bankruptcy because of huge bailout bills – several categories of private creditors, particularly senior bondholders and uninsured depositors, were untouched.
Report from my weekend bicycle rides around Tucson: A lot more resale inventory on the market. Quite a bit appears to be the property of real estate speculators who bought-to-rent during the previous bubble.
This year’s reminding me of 2005, when the inventory count just exploded.
Spring selling season has begun.
How much time do we have ?
“Former Budget Director and current deficit hawk David Stockman calls this Housing Bubble part two.
Investors in the housing market also face their own challenges.
“It’s not that great of a business to be a landlord…it’s a little trickier than just a typical investment,” says The Daily Ticker’s Lauren Lyster, noting that landlords have to make repairs to maintain their investments.
Owning real estate as a landlord is also “not a huge return business,” says The Daily Ticker’s Aaron Task. “What if the tenants don’t pay the money or if something goes wrong and you have to fix it…. It’s not as simple a business as it appears on paper.”
Indeed, Och-Ziff, a private equity fund that was one of the first to buy into the housing recovery a couple of years ago, announced late last year it was exiting the business because returns weren’t as big as they has expected. (And they probably also wanted to cash in their profits.)
Here in Tucson, I’m seeing an uptick in the resale SFR market. A lot of what’s for sale appears to be the buy-to-rent houses that were bought during the previous bubble. Methinks that we have a lot of burned-out landlords.
In our nabe of about 500 houses there are about 10 for sale and about half are under contract, selling for well above their 1999 prices. It will be interesting to see how many more come on the market this summer.
i’ve been looking for any economist that warned before the euro was formed, that it would fail. i’m sure someone did because i remember hearing rumblings about it. i found this just today. could the euro have been formed in hopes of forcing a political union?
====
Former German Chancellor Helmut Kohl was warned that the euro was doomed to fail, according to secret documents obtained by Spiegel.
“Documents from the Kohl administration, kept confidential until now, indicate that the euro’s founding fathers were well aware of its deficits,” it wrote May 8.
The Trumpet has long warned that European leaders knew exactly what they were doing when they created the euro. The current crisis is not a mistake. They knew that, as Spiegel writes, “a common currency cannot survive on the long term if it is not backed by a political union.” They pushed ahead because they believed a common currency would force the unwilling European people to form a political union.
===
http://www.thetrumpet.com/article/9408.8274.0.0/economy/euro/german-government-knew-euro-would-fail
“But the Pier got into trouble during the recession in 2009 and went bust in 2011. Today it is valued at just $11m compared with a 2007 appraisal of $210m.”
Then: $210m ==> Now: $11m == “a LOT of money!”
The story:
The $7m “water, light and sound extravaganza” still bursts into life every hour, on the hour at the Pier Shops in Atlantic City. But where once the crowds backed up, scores deep, way back into the mall, these days only a smattering of people come to see the fountains dance in time to the thumping electronic music.
As the water erupts again, all around are the signs of the Pier’s decline. There is an abandoned pizza bar, its old fridges and trolleys piled high behind a barrier, and boarded-up shops, each one with a plaintive little sign: “Leasing opportunities”.
The Pier’s woes are hardly unique, given the weak US economy and the threat from internet shopping, but one ripple effect from its slide into bankruptcy is new. For the first time ever, investors in what was supposedly the safest tranche of a commercial mortgage-backed security (CMBS), a triple-A rated bond backed by properties including the Pier, have been told they will not be paid the interest they were promised.
Investors were informed of the news this month, after the Pier failed to sell at auction, and strategists say that bond payouts could be curtailed for months to come. The wider question is whether the fate of these bonds is a harbinger of things to come for CMBS investors, as America’s malls face unprecedented difficulties.
The $80.5m mortgage on the Pier was the largest in a pool of loans bundled together by Morgan Stanley and sold to investors in a $912m CMBS deal in 2007. It accounted for 7.7 per cent of the loan pool.
Mortgage payments are used to pay monthly interest on all the CMBS, with the “super senior” tranche of bonds being paid first, and the remaining cash cascading down through lower-rated bonds like a waterfall. By certifying that super senior tranche triple-A, the credit rating agencies suggested there was close to zero chance the bonds would fail.
But the Pier got into trouble during the recession in 2009 and went bust in 2011. Today it is valued at just $11m compared with a 2007 appraisal of $210m. Investors were told they would recover nothing on the mortgage, and that the firm which has been administering the loan must be paid back its costs. As a result, there is not enough cash to pay the full amount of interest.
The fate of the Pier demonstrates how, when a shopping centre goes bad, it goes very bad. A kind of contagion sweeps through the building. As major tenants leave, shoppers drift away, making life harder and harder for those that remain.
The seven-year-old development, which boasts a Tiffany and a Gucci among its tenants, was meant to bring some designer glamour to the boardwalk of Atlantic City, the wannabe Las Vegas of the East Coast. There were never enough high-rollers to sustain it.
Robin Amjadi has hung up “Clearance Sale” signs at her store, Design Jewelry – not because she is closing, but because it is the only way to get visitors to stop in. Across the corridor, the shutters have gone up over a boutique by designer Betsey Johnson, and a fancy United Colors of Benetton. The lighting is meant to simulate shopping under the stars, but without open storefronts, the effect is just gloomy.
“This is my livelihood,” Amjadi says. “I love the mall and I love the people here. My husband and I fight for our store every day. You have to give people what they want, and what they want is a sale.”
Fitch, which rated the Morgan Stanley bonds triple-A, said it saw little chance of other CMBS deals suffering interest shortfalls. “The few super-senior classes that are likely to be affected are from transactions that have a high percentage of already realised losses, a large amount of appraisal reductions, and increasing loan concentration,” it said.
But investors and other rating agencies are expressing concern over CMBS deals that include a high concentration of shopping centres, given the online threat, intense competition from a handful of new megamalls, and weak results from major department store tenants such as JC Penney and Sears.
Richard Hill, CMBS strategist at RBS Securities, said there is increased scrutiny of the underlying retail properties among CMBS investors. “Interest shortfalls are not supposed to occur on super senior bonds,” he said, “and in most cases they won’t, but there are likely to be one-off cases among a handful of underperforming CMBS deals.”
Source: “US malls empty CMBS investors’ wallets”
http://www.ft.com/intl/cms/s/0/2f5c9962-9266-11e2-a6f4-00144feabdc0.html
But, but… the Citi Group Plutonomy Report says we don’t need J6P’s pocket change. They can’t possibly be wrong, can they?
This should do wonders for new construction and employment.
Cyprus bailout: Dijsselbloem remarks alarm markets
BBCNews
European and US stock markets have fallen despite the agreement of a bailout deal for Cyprus.
The falls came after the head of the Eurogroup of eurozone finance ministers suggested that the Cyprus model, which involves a tax on bank deposits, could form a template in any future bailout.
Earlier, hopes that the Cyprus deal would solve the crisis lifted shares.
Markets in Europe and the US moved downwards when Jeroen Dijsselbloem, the Dutch Finance Minister who as head of the Eurogroup played a key role in the Cyprus negotiations, said the deal represented a new template for resolving future eurozone banking problems.
“If there is a risk in a bank our first question should be ‘OK, what are you in the the bank going to do about that?’,” he told Reuters and the Financial Times.
The Cyprus deal puts the burden for dealing with problem banks on their shareholders and creditors - in this particular case, customers with large bank balances - rather than the government and taxpayers and bondholders, who lend through financial markets.
Our World Economics Editor, Andrew Walker, pointed out the more usual approach to failing banks in the current crisis has been for the state to inject new capital.
http://www.bbc.co.uk/news/business-21920574
RUN AWAY! IT’S THE BOOGEYMAN!
The DOW is STILL over 14k.
Why the 1% buy bizjets………
Flew an unscheduled trip Saturday. Standard procedure in bizjets is to leave the aircraft where it is at the end of the trip (no “dead-head”/non-passenger legs), and fly the crew home.
Crew got to SoCal Saturday night, tried to get airline tickets. Airlines are booked/over-booked. Their options:
-Fly to Denver Sunday afternoon, then rent a car and drive (8 hours plus, in the tail end of a blizzard) to KC metro.
-Drive to Phoenix today, Fly from PHX to DFW, overnight in DFW, then fly from DFW to MCI on Tuesday evening.
They got home about 7am this morning. Guess that’s the reason they didn’t come in today….
This is the kind of thing that keeps me gainfully employed. I know a bizjet sales guy who looks for pizzed off guys wearing suits in the terminals (and hands out business cards), any time he has the misfortune to fly “commercial”.
My Dad taught me to hunt!? Your gonna teach your kids!? Hey you dumb@ss hired actor maybe you ought to take your finger off the trigger and point that gun in a safe direction! You got kids running around there! $12 Million? Bloomberg got ripped off, the actor had time to grow a beard but he didn`t have time to take a gun safety course? LMAO
Bloomberg to Launch $12 Million National Gun Control Ad Campaign: ‘It’s Time for Another Voice’
Mar. 23, 2013 7:57pm Erica Ritz
Here’s one of the ads, in which a self-described hunter says “background checks have nothing to do with taking guns away from anyone”:
http://www.theblaze.com/stories/2013/03/23/bloomberg-to-launch-12-million-national-gun-control-ad-campaign-its-time-for-another-voice/ - 239k -
They should have consulted the father who had DCF called on him for the Facebook gun photo of his 11 year old son Instead of going with the Joe Biden firearm safety manual for how to handle a gun.
Facebook gun photo controversy: ‘No laws broken,’ police say
This undated photo provided by Shawn Moore shows his son Josh, 10, holding a rifle his father gave him for his 11th birthday, at their home in Carneys Point. The Moore family claims this photo, posted on Facebook, led the state’s child welfare agency to the family’s house Friday, demanding to be let inside to inspect their guns.
Alex Young/South Jersey Times Today’s Sunbeam
March 21, 2013 at 8:00 AM
CARNEYS POINT TWP. — Shawn Moore was at a friend’s house on Friday when he got a call from his wife.
It was about 8:15 p.m. and the police were at his house with Department of Children and Families caseworkers, and they were asking to see his guns.
Moore had recently given his son, Josh, a .22-caliber rifle for his upcoming birthday and posted a picture on Facebook of the 10-year-old showing off his gift.
His lawyer, Evan Nappen, who specializes in Second Amendment law, compared the gun to one used by the Boy Scouts to earn their rifle shooting merit badge.
Carneys Point Police Chief Robert DiGregorio Wednesday said that both his department and DCF received anonymous phone calls that reported the photo. He said their main concern was that a child might have access to weapons and ammunition.
http://www.nj.com/salem/index.ssf/2013/03/facebook_gun_photo_controversy.html - 82k -
The Pacific - Gunny Dominates Lieutenant - YouTube
http://www.youtube.com/watch?v=Mu51rszgotI - 211k -
I earned the NRA rank of Marksman at age 14. A WWII vet taught the class every Saturday morning, and sold me his Rangemaster for $75. I took that rifle to college and broke the regional college team score record. The vets who fought for freedom were our heroes. They expected us to follow them up.
Pax Obama.
I earned the NRA rank of Marksman at age 14.
Congrats.
I earned Sharpshooter at 13 - and got much better for over 2 decades, in handguns too. I respect you shooters. I’m one. Maybe not you, IKD, but I could still out shoot 90% of the “gunners” here. I’d bet on it.
Obama, Biden, Cuomo, Feinstein, Bloomberg aren’t just bedwetters, they are encopretic bedsh*tters.
After Ruby Ridge and Waco gave them Oklahoma City 1995, they are doubling down on their anti-constitutionalist efforts toward: Registration, Confiscation, Extermination.
But keep playing the R vs. D Game, cuz it’s all about the homo-gays getting married or whatever…
I’m sure China would be happy to pay American workers a decent standard of living for a 20 hour workweek. Someone told me that’s how “true free-markets” would work if we’d just get out of the way.
Intelligence Community Fears U.S. Manufacturing Decline
http://www.forbes.com/sites/beltway/2011/02/14/intelligence-community-fears-u-s-manufacturing-decline/
….the U.S. intelligence community has become concerned. Richard McCormack reported in Manufacturing & Technology News on February 3 that the Director of National Intelligence has initiated preparation of a National Intelligence Estimate to assess the security implications of waning manufacturing activity in America.
National Intelligence Estimates are the most authoritative analyses prepared by the intelligence community, definitive interagency products typically reserved for the most serious threats. So the fact that the nation’s top intelligence official thinks a National Intelligence Estimate is needed for manufacturing isn’t a good sign. It suggests that America’s industrial decline is approaching the status of a crisis…..
……The year before China joined the WTO, the United States and China each produced about 100 million tons of crude steel. But once China was in the WTO, its steel output rose rapidly while U.S. production drifted downward. Last year, China produced eleven times as much steel as America (880 million tons versus 81 million).
Stop being such a nattering nabob of negativism.
We don’t need tangible sh*t like steel. We can all just tweet our way to prosperity. The economic fundamentals of future USA are facebook “likes” and Farmville crops.
lol
The US is presently at #6 in world wide steel production. Not a lost art here yet…
If you don’t feel like reading this article on obamacare then just read the last paragraph
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Kerpen: Obamacare is Crumbling
By Phil Kerpen March 25, 2013 6:50 am
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Obamacare is falling apart before our eyes. The long-term care insurance program known as the CLASS ACT was deemed financially unworkable and shut down by the administration’s own actuaries. Taxpayer-funded health care cooperatives never got off the ground and were shut down in the fiscal cliff deal. Last month the federal Pre-Existing Condition Insurance Plan stopped accepting enrollment applications. This week 79 U.S. senators, including 34 Democrats, voted to repeal the law’s medical device tax. Premiums in the individual and small group markets could spike as much as 116 percent next year. The wheels are already wobbling and the worst is yet to come.
The exchanges at the heart of the new Obamacare entitlement are slated to be up and running for open enrollment beginning October 1. Millions of Americans will be dumped into these exchanges by employers dropping coverage and millions more will be forced to enter the exchanges by the individual mandate. But will there actually be functioning exchanges for them to go to? Maybe not.
The Obamacare law was written to incentivize states to do the heavy lifting of setting up and running the exchanges, which are administratively and technologically complex. But more than half the states said no thanks, looking at the proposed regulations and long-term operating costs and choosing to let the feds try to administer their own mess. And the states that did choose to play ball weren’t able to make much progress because the Obama administration stalled key regulations until after the election.
Now the feds are rushing to get the exchanges ready.
“We are under 200 days from open enrollment, and I’m pretty nervous,” confessed Henry Chao, the deputy chief information officer on the Centers for Medicare and Medicaid Services — which is setting up the federal exchanges. “The time for debating about the size of text on the screen or the color or is it a world-class user experience, that’s what we used to talk about two years ago,” Chao said. “Let’s just make sure it’s not a third-world experience.”
So don’t be surprised if open enrollment doesn’t start October 1 as planned. And when the exchanges are up and running, what plans will be available to purchase through them? One effect of stalling the regulations past the election is that the choices offered in most states will be meager simply because there isn’t much time to develop plans and make sure they are compliant.
The plans that are offered are going to be expensive because of the law’s mandates and regulations. Every major insurer is now warning of a huge spike in premiums, especially for younger, healthier people who can no longer be offered significantly lower rates than older people who use more health care. Some people may get subsidies to help pay — after filling out a 21-page form — but others will find their families ineligible for subsidies unless they stop working full-time or, believe it or not, get divorced.
Democrats want to believe that the future of Obamacare was secured by President Obama’s reelection. But if implementation ends up being the disaster that looks increasingly likely, the American people will have the final word.
Two words: Public option.
+1
Planned parenthood doesn’t serve bio identical hormones!
CVS Demonstrates Your Future Under Obamacare
If you ever had depression you won’t qualify for Obamacare at CVS
March 25, 2013 by Bob Livingston
UPI FILE
The consequences of the big lie that is Obamacare and the U.S. deathcare system continue to come to light. From layoffs to hour reductions to business closures to companies being dragged into court over abortion and contraceptive coverage to doctor shortages to rising deathcare costs, Obamacare is a building disaster of rising premiums, doctor shortages and rationing death panels. Now, legal drug pusher CVS Caremark pharmacy is telling its employees they must report specific personal health information or pay an extra $600 per year for their health insurance coverage.
Among the measures employees are required to report are their weight, body fat, cholesterol, blood pressure and blood sugar levels. Employees must also be tobacco-free or enroll in an addiction program.
“These changes aren’t just about costs, they’re about us, each of us taking personal accountability for our own health,” said Lisa Bissacia, CVS senior vice president and chief human resources officer, in a recorded video released by the company.
The irony that a company that peddles to an unsuspecting public pharmaceuticals with a list of side effects as long as your arm and responsible for millions of adverse reaction events and 106,000 deaths annually would actually be concerned about their employees’ health is no doubt lost on Bissacia. On top of that, such a policy is an egregious violation of the employees’ rights.
Employment lawyer Richard Schramm told KPIX 5 News: “(CVS Executives) better get some pretty good legal counsel and decide whether your policy is really legal, because the policy as announced is not legal.”
Schramm told KPIX 5 the company is trying to tell employees what they can and can’t do on their off time.
“If we granted that right to employers, employers could tell employees who to date, who to see, what kinds of foods to eat, what to drink, all kinds of behavior off site could be controlled. And that’s absolutely not the law in California,” he said. Nor anywhere else, except maybe Florida.
“The approach they’re taking is based on the assumption that somehow these people need a whip, they need to be penalized in order to make themselves healthy,” Patient Privacy Rights founder Deborah Peel, M.D., told ABC News.
For the company’s many low-wage in-store employees, it’s essentially blackmail. There’s no way they can absorb an additional $50 per month increase in premiums, so they’ll have to comply.
And what will CVS do with the information? Not to worry; CVS won’t have access to the personal information. It will be given to WebMD.
And therein lies another rub. WebMD is a major propaganda arm of Big Pharma, and Big Pharma and the health insurance cartel wrote the Obamacare law. Drug criminal Eli Lilly was an original investor of WebMD. Eli Lilly has repeatedly been cited, fined and successfully sued for illegal and deceptive marketing, covering up the harmful effects of its drugs and buying the influence of doctors and regulatory agencies (as have all the major drug manufacturers).
WebMD uses subliminal sales tactics to peddle drugs, including harmful psychotropics, according to research by OpEdNews.com.
Lilly is not the only pharma company receiving unmarked product placement on WebMD.
Last summer, a video featured a woman patient confessing she was fearful of life while a voice over said she needed treatment for “general anxiety disorder” and the camera showed bottles of Forest Pharmaceuticals’ antidepressant Lexapro moving down the manufacturer’s assembly line. Get it? No disclaimer on the video or “sponsored content” appeared.
Another unsponsored WebMD video last summer urged people on antidepressants to remain on their therapy “despite side effects” and a third suggested women concerned about cancer, heart attack and stroke risks of postmenopausal hormone therapy should continue their treatment at lowered doses. Hang in there, valued customers.
Also on WebMD is a “depression test.” The test is rigged and the questions framed to elicit “yes” answers to all the questions. But even after answering “no” to all the questions, you are told, “You may be at risk for major depression.” So everyone taking the test is depressed, according to test sponsor Eli Lilly.
As Joseph Mercola, M.D., writes on his site, WebMD and its subsidiaries claim to be independent, but how independent and objective can a company be with its health recommendations when one of its major investors is a drug company?
For example, (WebMD subsidiary) drugs.com has the following statement at the bottom of every web page:
“Drugs.com provides free, accurate and independent advice on more than 24,000 prescription drugs, over-the-counter medicines & natural products.”
And yet drugs.com is owned by WebMD, which has close ties to Big Pharma, and recommends drugs for their advertisers and pharmaceutical partners…
Also counted among its financial backers are producers of harmful processed foods — the type that contain artificial “fruits” that can be, according to the Food and Drug Administration, peddled as fruits. Curiously, or maybe not, there is no mention of natural alternatives and supplements. So much for preaching a healthy lifestyle.
WebMD also has a partnership with the FDA, the first-ever public-private partnership for the agency. Why? To be the agency’s major propaganda arm. WebMD and its subsidiaries are four of the top 10 most-visited health information sites on the Internet.
WebMD’s own announcement stated:
The partnership will enhance the FDA’s ability to get crucial information to the American public, FDA Commissioner Andrew von Eschenbach, MD, said in a news conference.
… “WebMD has been a leader with regard to innovation in the use of the web as a form of communication and service to the public,” von Eschenbach said. “What we will do by virtue of this partnership … is to really be able to present online … content material we at FDA feel is extremely important for consumers to be aware of as they are making critically important decisions for themselves and for their families about their health and the products that they use to ensure their health.”
Of course, the FDA is co-opted and owned by Big Pharma and regularly provides cover for the pharmaceutical companies to peddle drugs with harmful side effects — sometimes for a period of years — until the lawsuits mount to such an extent that the agency is forced to require them be pulled from the market. The drug manufacturers then pay a big fine and/or settlement and move on to the next case, raking in billions of dollars in the meantime on drugs that treat symptoms and create more diseases in a never-ending cycle.
Now, back to WebMD and how it might use the information obtained on CVS’s 161,500 employees.
According to WebMD’s privacy policy, it won’t share any of the information it has on you, with the following exceptions:
To comply with legal requirements, such as a law, regulation, search warrant, subpoena, or court order;
To our vendors and suppliers in the course of their provision of products or services to WebMD;
In the event of a corporate change in control resulting from, for example, a merger, a sale of assets, or bankruptcy; or
In special cases, such as in response to a physical threat to you or others.
So CVS employees can expect their personal information to be shared far and wide. There can be no expectation of privacy and the data can be used by anyone — government included.
With government running healthcare, expect programs like this to expand and the information to be used to force behavior modifications for everyone forced to buy into Obamacare.
But look on the bright side. Nanny Mayor Michael Bloomberg could head the new Federal Agency of Behavior Modification. Telling people how to live their lives seems right up his alley. He’ll be available come November.
If you ever had depression you won’t qualify for Obamacare at CVS
Well then AnnGogh, If you’re not 65, then I would suggest you not get “depressed” about ObamaCare.
But seriously…….most women I’ve seen complaining about ObamaCare have joke healthcare from their work, their husbands or the military or are over 65 and already have universal healthcare. They’ve already got theirs right? So they can complain about others, while they are secure in what they already have. No?
But if they have a child who before Obama was not covered, it was a totally different story. Yes.
The Fed Already Has ‘Cyprused’ U.S. Banks
By THOMAS SOWELL
Posted 05:23 PM ET
Thomas Sowell
The decision of the government in Cyprus to simply take money out of people’s bank accounts there sent shock waves around the world.
People far removed from that small island nation had to wonder: “Can this happen here?”
The economic repercussions of having people feel that their money is not safe in banks can be catastrophic. Banks are not just warehouses where money can be stored.
They are crucial institutions for gathering individually modest amounts of money from millions of people and transferring that money to strangers whom those people would not directly entrust it to.
Multi-billion-dollar corporations, whose economies of scale can bring down the prices of goods and services — thereby raising our standard of living — are seldom financed by a few billionaires.
Far more often they are financed by millions of people, who have neither the specific knowledge nor the economic expertise to risk their savings by investing directly in those enterprises. Banks are crucial intermediaries, which provide the financial expertise without which these transfers of money are too risky.
There are poor nations with rich natural resources, which are not developed because they lack either the sophisticated financial institutions necessary to make these key transfers of money or because their legal or political systems are too unreliable for people to put their money into these financial intermediaries.
Whether in Cyprus or in other countries, politicians tend to think in short-run terms, if only because elections are held in the short run.
Therefore, there is always a temptation to do reckless and short-sighted things to get over some current problem, even if that creates far worse problems in the long run.
Depression Lessons
Seizing money that people put in the bank would be a classic example of such short-sighted policies.
After thousands of American banks failed during the Great Depression of the 1930s, there were people who would never put their money in a bank again, even after the Federal Deposit Insurance Corporation was created to have the federal government guarantee individual bank accounts when the bank itself failed.
For years after the Great Depression, stories appeared in the press from time to time about some older person who died and was found to have substantial sums of money stored under a mattress or in some other hiding place, because they never trusted banks again.
After going back and forth, the government of Cyprus ultimately decided, under international pressure, to go ahead with its plan to raid people’s bank accounts. But could similar policies be imposed in other countries, including the United States?
One of the big differences between the United States and Cyprus is that the U.S. government can simply print more money to get out of a financial crisis. But Cyprus cannot print more euros, which are controlled by international institutions.
Does that mean that Americans’ money is safe in banks? Yes and no.
The U.S. government is very unlikely to just seize money wholesale from people’s bank accounts, as is being done in Cyprus.
But does that mean that your life savings are safe?
No. There are more sophisticated ways for governments to take what you have put aside for yourself and use it for whatever the politicians feel like using it for.
If they do it slowly but steadily, they can take a big chunk of what you have sacrificed for years to save, before you are even aware, much less alarmed.
That is in fact already happening.
When officials of the Federal Reserve System speak in vague and lofty terms about “quantitative easing,” what they are talking about is creating more money out of thin air, as the Federal Reserve is authorized to do — and has been doing in recent years, to the tune of tens of billions of dollars a month.
When the federal government spends far beyond the tax revenues it has, it gets the extra money by selling bonds. The Federal Reserve has become the biggest buyer of these bonds, since it costs them nothing to create more money.
This new money buys just as much as the money you sacrificed to save for years. But more money in circulation, without a corresponding increase in output, means rising prices.
Although the numbers in your bank book may remain the same, part of the purchasing power of your money is transferred to the government. Is that really different from what Cyprus
Read More At Investor’s Business Daily: http://news.investors.com/ibd-editorials-on-the-right/032513-649255-sad-parallels-between-cyprus-and-american-banks.htm#ixzz2Oc49XMvw
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Obamacare’s Online Application Has Democrat Only Option to Register to Vote
We are all dems now!
(PP)- Republican leaders were justifiably angry after they discovered the 61-page online Obamacare application for health insurance includes a question asking the applicant if they would like to register to vote, but only allows the individual to register as a Democrat.
Designers of the application are saying that leaving out the option to register as a Republican was a simple oversight, but Washington insiders believe that the omission raised the specter that pro-Obama groups are the only Americans who are expected to sign up for the free health insurance program.
“This is not really a big deal because we haven’t had a Republican apply for aid since Obamacare passed,” said an assistant intern to Health and Human Services Secretary Kathleen Sebelius. “I suppose we could add a box on the website for people to register as a Republican, but those IT guys are pretty expensive and funding may not be available after the sequester cuts. Besides, I think we are out of 3130 requsition forms.”
Republican leaders also noted that the falsely named Affordable Care Act does not allow HHS investigate into an applicant’s choice to vote. Additionally, the Paperwork Reduction Act mandates that federal agencies ask for only information needed to do their job.
“The Democrats in charge of handing out free stuff to needy Americans may believe that a person’s vote should be part of the deal,” said a House GOP adviser. “I know the DNC was offering the program to inspire people who want government handouts to vote for Democrats as part of their election campaign, but buying voters from inside federal websites seems to cross the line.”
Still others think the Democrat only option for voter registration will lead Obamacare administrators to approve or deny applications based on the political party of the applicant.
“It would make sense that a program run by liberal Democrats would favor people who fall into line with their point of view,” said a Washington efficiency expert. “It’s just like applying for a loan with a bank. The bank wants people who will pay back the loan, and Democrat politicians want to be paid back too.”
Tha Palookaville Post has learned that as health insurance premiums increase and benefits decrease due to the Obamacare regulations, many more Americans will be forced to apply for the government sponsored plan which will require them to register as Democrats to be approved. Many people in Palookaville who voted for Obama did not see that one coming last November.
due to the Obamacare regulations, many more Americans will be forced to apply for the government sponsored plan which will require them to register as Democrats to be approved.
Do you think Democratic leaders are as dumb as the Repub masses who are expected to believe this propaganda?
What is a republican?
Here is a good place to go to find out…
The RetireMentors
Retirement advice from experts in the business
March 22, 2013, 7:01 a.m. EDT
Stocks are too risky to save Social Security
By Henry Hebeler
About a decade ago I was asked to participate in a conference about what to do about the Social Security funding crisis. Then, as now, there were no politically acceptable solutions.
As we all know, each year that goes by makes possible recovery actions more draconian. As more and more Americans start taking Social Security, there is growing reluctance to do anything that would reduce benefits of those who already have benefits. So the standard political line is to “grandfather” these people. Not doing so would be political suicide.
At the time of the conference, there were a number of solutions proposed by experts and economists in the field. One of these proposals involved extending the ages to start Social Security. Another was to reduce the benefits for some wealthier citizens using a progressive scale. Still another was to increase the amount of the payroll tax.
Another solution that was heavily lobbied was to invest about half of the trust fund in stocks.
…
Is the Fed taking on the responsibility to stimulate the economy in order to offset the effect of Congressional budget gridlock?
U.S. NEWS
March 25, 2013, 6:47 p.m. ET
Fed Banker Backs Dialing Down Easy Money
By VICTORIA MCGRANE
A member of the Federal Reserve’s inner circle Monday promoted a plan for the central bank to scale back the pace of its bond-buying program as the jobs market improves, though he stressed that a decision on how to proceed is far from imminent.
William Dudley, president of the Federal Reserve Bank of New York, said in a speech the Fed “should calibrate” how much U.S. debt and mortgage-backed securities it buys each month “by allowing the flow rate of purchases to respond to material changes in the labor market outlook.”
Mr. Dudley described the tapering proposal as somewhat more certain than Fed Chairman Ben Bernanke did last week after the central bank’s two-day policy meeting. Mr. Bernanke stuck with the conditional tense, saying the Fed “may adjust” the pace of its bond-buying to a strengthening job market.
The Fed is currently buying $45 billion in long-term Treasurys and $40 billion of mortgage-backed securities each month—part of an effort to boost the economy by driving down long-term interest rates to encourage more borrowing, spending and hiring.
Mr. Dudley, one of the chief advocates of the bond-buying programs, appeared decisively in favor of tapering off purchases in the future. “At some point, I expect that I will see sufficient evidence of economic momentum to cause me to favor gradually dialing back the pace of asset purchases,” he said, speaking to the Economic Club of New York.
Echoing Mr. Bernanke, he said the Fed could dial purchases back up if economic conditions worsened. Mr. Dudley stressed the labor market and broader economy are still not healthy enough to begin scaling back the bond buying.
Mr. Dudley said uncertainty over U.S. fiscal policy—the product of a continuing fight in Washington—is a key obstacle to faster economic growth, adding that he sees the next three to six months as a critical period. If the economy can get through this period without losing momentum, he said he will be more optimistic about the outlook.
…
OPINION
March 25, 2013, 7:07 p.m. ET
Mortimer Zuckerman: The Great Recession Has Been Followed by the Grand Illusion
Don’t be fooled by the latest jobs numbers. The unemployment situation in the U.S. is still dire.
By MORTIMER ZUCKERMAN
The Great Recession is an apt name for America’s current stagnation, but the present phase might also be called the Grand Illusion—because the happy talk and statistics that go with it, especially regarding jobs, give a rosier picture than the facts justify.
The country isn’t really advancing. By comparison with earlier recessions, it is going backward. Despite the most stimulative fiscal policy in American history and a trillion-dollar expansion to the money supply, the economy over the last three years has been declining. After 2.4% annual growth rates in gross domestic product in 2010 and 2011, the economy slowed to 1.5% growth in 2012. Cumulative growth for the past 12 quarters was just 6.3%, the slowest of all 11 recessions since World War II.
And last year’s anemic growth looks likely to continue. Sequestration will take $600 billion of government expenditures out of the economy over the next 10 years, including $85 billion this year alone. The 2% increase in payroll taxes will hit about 160 million workers and drain $110 billion from their disposable incomes. The Obama health-care tax will be a drag of more than $30 billion. The recent 50-cent surge in gasoline prices represents another $65 billion drag on consumer cash flow.
February’s headline unemployment rate was portrayed as 7.7%, down from 7.9% in January. The dip was accompanied by huzzahs in the news media claiming the improvement to be “outstanding” and “amazing.” But if you account for the people who are excluded from that number—such as “discouraged workers” no longer looking for a job, involuntary part-time workers and others who are “marginally attached” to the labor force—then the real unemployment rate is somewhere between 14% and 15%.
…
I am gonna LMFAO when this echo budget crashes on the come-lately landlord investors!
Can’t believe we are gonna see investors get burned again so soon after the last housing crash!
ECONOMY
Updated March 25, 2013, 10:35 a.m. ET
Investors Pile Into Housing, This Time as Landlords
By NICK TIMIRAOS
Michael Czerwonka for The Wall Street Journal
Jeff Pintar’s company now owns or manages 1,700 homes in Southern California. Above, he stands in one of his properties in Anaheim Hills, Calif.
LAKE FOREST, Calif.—Jeff Pintar had buyer’s remorse as he purchased 12 foreclosed homes in five Southern California counties on a single day. His regret: that he didn’t buy more homes a year earlier.
“Things have turned around faster than anyone anticipated,” said Mr. Pintar, who first began buying properties here four years ago and now owns or manages 1,700 homes, which he rents out for between $1,000 and $3,800 a month. Here in Orange County, nearly every home listed for less than $400,000 “is being pursued by institutional investor capital,” he said.
U.S. housing recoveries almost always have been ignited by rising demand from families and individuals looking for a place to live. This recovery is different. Investors—including some big Wall Street players—are leading the way, say industry executives and analysts. Their role is noteworthy given that flippers and speculators were blamed for helping to inflate the housing bubble of the past decade.
Today’s investors are mostly buying with the intention of holding on to the homes and renting them out. As they pile into the housing market, they have set off a chain reaction that has stabilized prices and changed market psychology, industry executives and analysts say. Fear of buying homes when prices are dropping has been replaced by the fear of missing out on cheap homes.
In Lawrenceville, GA, monthly auctions of foreclosed homes are attracting major real estate investment firms, as investors turn toward single-family rental income for higher yield in a low-interest market. WSJ’s Robbie Whelan reports. Photo: Associated Press.
“Whether they knew it or not, investors helped set a floor. They warmed up the market, and it brought buyers back,” said Lanny Baker, chief executive of real-estate brokerage ZipRealty.
[image]
Investors have always played a role in the housing market, but their presence was often small. Currently, cash buyers—largely investors—make up about 32% of sales nationally, according to the National Association of Realtors. In Southern California, a favorite target for investors, absentee buyers accounted for 31.4% of purchases last month, up from an average of less than 17% between 2000 and 2010, according to DataQuick MDA, a real-estate research firm.
…