The Housing Bubble

You have to remember what the democrats received for agreeing to the bail out. TARP loans were treated as an expenditure. When the loans were paid back it was treated as revenue. Thus, democrats were given a new credit card to use for spending. They could claim Bush had a trillion dollar plus deficit in is last year when it was just actually loans and when it was paid back they could claim they were cutting the deficit. It was great for people that love to spend.

Democrats and Republicans both suck.
I’m a giraffe. I stand straight up, looking above it all, and don’t lean in either direction.

Two establishment candidates can’t be expected to raise a red flag over bail outs and more gas for the fire sector.

“Do it right before the 2016 election and in a bipartisan way like last time so it is a nonissue in the election.”

Should we expect to see Jack Lew grovelling on his knees at the feet of Ted Cruz as a sign that another bailout is at hand?

the rich are getting richer because they have inside information as to what the money printers next move will be. Its a rigged game.

There is no way in h@ll the market would have gone straight up off the lows like it did after the last rigged crisis.

They manipulate the market for themselves.

the biggest economic issue facing the country at the time of the 2008 election, was barely a blip ??

Well sure…We must focus are attention on more important matter that threaten our country like; Birth-Control…

You keep saying this but the weeks, months, and years carry on. Stopped clock predictions are just that. Sure, it will happen sometime, but WHEN? I agree something bad is coming, but nobody seems to be able to explain why it is taking so long, which would make one wonder- is QE actually working?

No.

I’ve been saying it for less than 12 months.

‘nobody seems to be able to explain why it is taking so long’

Let’s review. Shiller called the US a bubble in 2002. I was thinking out loud to people I knew that Austin was in a housing bubble in 1998. I was working for a dotcom and believed the tech boom was for real until late 1999.

I started this blog in December 2004. We all know what happened after that. Then in 2011 or 2012, I’m not sure, I started coming across articles about bidding wars, writing letter to sellers, etc. I thought, I should follow this. It’s grown and here we are today.

Now prices are falling, inventories are growing, foreclosures are rising. The biggest question here is, is this a bubble? I happen to think it’s the same bubble. Bubbles always crash. Bull markets don’t always crash.

I was describing what was going on in Kenya to someone the other day. They asked, “how does a bubble form in Kenya?” I replied, look at what the central banks have done, that money has to go somewhere.

China has printed over $20 trillion worth of currency the last few years. In Beijing there are 3 million housing units not being supplied with electricity. The US central bank has created a few trillion too. And we’re told similar monetary creation has been occurring at 12 other major central banks around the world.

Indonesia didn’t have a bubble in 2006, that I recall. Now they have a raging bubble. This is a country with nearly the population of the US. The Philippines has a newish commercial and residential bubble; population just under 100 million.

We now have a junk bond market yield under 5% in some cases. We have tech companies which are losing money and rake in billions of dollars in IPO’s. We also have a handful of central banks and government that are explicitly putting the brakes on housing bubbles.

How will it end? I guess we’ll just have to wait and see.

It all seems to exist in perpetuity. China’s ghost cities have been news for like 5 years or longer. I seem to recall hearing of their building frenzy back in 1999. We had a bit of a housing correction in the US, only to watch prices whipsaw back into bubble territory, seemingly immune to the economic fundamentals of the people who actually need the shelter. All we hear, no matter what country, is about investors buying houses. I don’t honestly understand, in light of such weak economic fundamentals, how things have been able to continue on for so long.

We were talking about people living off credit cards 7 years ago. What are those people living off of now, especially given the real unemployment numbers? How is this model being propped up? I just can’t wrap my mind around it. It’s like there is an endless supply of money for everybody, though I sure haven’t seen any of it. The shopping centers are packed this year. I passed through Klamath Falls Oregon recently and I have never seen so many cars there in my life. It is usually dead. I am at a loss as to what is going on.

“I started this blog in December 2004. We all know what happened after that.”

I sure as fawk know what happen in the 5 years preceding Dec 04 too.

“Now prices are falling, inventories are growing, foreclosures are rising.”

Yeeeeeeeeeeeeeeeaup!

‘It all seems to exist in perpetuity.’

How long did the bubble in oil states take? I was a boy, so did it start before the first Arab oil crisis? Or the second? Then it took 15 years to find a bottom, even though most of the decline happened in the first 3 years. And there was no HARP/TARP, stimulus, nothing but watching it plummet.

I don’t think much about time. What I think about is that this is something mankind has never seen. IMO, a mania so large and all encompassing that history will refer to it for hundreds of years.

“I passed through Klamath Falls Oregon recently and I have never seen so many cars there in my life. It is usually dead. I am at a loss as to what is going on.”

+1 Klamath Falls agriculture got slammed when their water resources were cut by the Ninth Circuit Court. Not sure what else they do there, a barren sort of place, IMHO.

I would have to defer to you regarding the oil bust in Texas, etc. Being from the area, you know much more about it than I. Speaking of which, when this current oil boom goes bust, we are really in trouble in terms of unemployment. There are A LOT of people making their living off of the oil patch. Perhaps a precipitous drop in crude prices will be the catalyst for the whole shithouse going down.

Can’t wait to hear the O-man spin this as a great success ??

Social Security was controversial when originally proposed, with one point of opposition being that it would allegedly cause a loss of jobs. However, proponents argued that there was in fact an advantage: it would encourage older workers to retire, thereby creating opportunities for younger people to find jobs, which would lower the unemployment rate.[citation needed]

Opponents also decried the proposal as socialism. In a Senate Finance Committee hearing, one Senator asked Secretary of Labor Frances Perkins, “Isn’t this socialism?” She said that it was not, but he continued, “Isn’t this a teeny-weeny bit of socialism

That must be why the Tea Party is advocating the end of Social Security??

No one needs to advocate the end. 3 million are turning 65 every year now the vast majority of whom haven’t saved a penny. Add in the medical care and pass out the recipes for cat food. Dry only.

Because its socialism don’t you know…Tea party would prefer soylent green if you are old with no income or savings even if the BK was caused by a catastrophic illness when you had no or limited insurance coverage…Throw-em under the bus…Whats the big deal…

Social Security…

Originally sold to the people as only a…

1% tax on the RICH

To help “poor elderly women” not starve in the streets.

How did that work out everyone?

How is the Republican’s big business model of importing “guest workers” at less than minimum wage, then passing their health care costs off to hard working citizens working out?

Lola no more?

The frenetic shaming helped him/her see the light.

Now we have to work on his/her LIEberal ways.

Stop it!

Obamacare made us more civilized.

Now please act like it.

Bill Elliot was a cancer patient who lost his insurance due to ObamaCare and couldn’t pay the expensive new premiums.

Lies. “Lost his insurance”? The cancellation take affect Jan 1. It’s November I think.

(His insurance) will be $1,500 a month with a $13,500 deductible. (”just for him”) LOL, what a joke lie. There is no individual insurance at that price on the ACA exchange with such a deductible. FOX lies.

“FOX lies”

“If you like your plan, you can keep your plan. If you like your doctor, you can keep your doctor.”

Here are the 37 instances we could find in which President Barack Obama or a top administration official said something close to, “If you like your plan, you can keep your plan,” referring to health insurance changes under the Affordable Care Act.

http://www.politifact.com/obama-like-health-care-keep/ - 38k -

So fox lies AND Obama lies. Enumerating the lies of one does not exonerate the other: it marks the poster as a discriminating believer of lies.

The more accurate talking point would be

“If you like your doctor, Obamacare won’t cancel your plan. Even if the plan isn’t up to Obamacare standards (as of 2010), Obamacare will grandfather the plan in. Now, if your OWN insurance company cancels your plan or changes it away from the 2010 version, go blame your insurance company, not Obama.”

But that won’t fit onto a bumper sticker.

The more accurate talking point would be

“If you like your cat, you can keep your cat; because you will need something to eat when you can no longer afford cat food.”

ibbots
Is this accurate?
The IRS has THREE years to give you a REFUND, three years to audit your tax return, and TEN years TO COLLECT any tax due. Together, these laws are called the statute of limitations. They put time limits on various tax-related actions that you and the IRS can take.

IIRC, I was taught to hold on to Acct’g /Tax backup for 7 years in school.

How Long Does The IRS Have To Audit Your Return?

By George W. Connelly

The time in which the IRS must conduct its audit is governed by what’s known as a “statute of limitations.” That statute doesn’t begin to run until you actually file a return. Once you file a return, the IRS has three years from the time the return was filed (or, April 15th of the year in which you file, if it is filed early) to conduct and complete an audit. As you might expect, however, there are exceptions.

The first exception involves a situation where a taxpayer, or a husband and wife on a joint return, fail to report 25% of their correct gross income. If the IRS can prove that such an amount of income was omitted, then a six year period – running from the time the return was filed – applies.

The other major exception relates to the presence of fraud – a knowing and willful attempt to evade tax. In order to rely on this exception, the IRS must prove such fraud by clear and convincing evidence with respect to every tax year for which it seeks to extend the limitations period.

Does this mean that after three years or six years or whenever, one should throw out all her records? Absolutely not! There are going to be situations where one has to establish the basis of an asset (for which depreciation or a capital loss is claimed), or the existence of a loss carryforward from well before the normal, three year limitations period. Thus, before you take your old tax records to the incinerator or the shredder, it’s important to go through them and make sure that any documentary material that relates to a transaction that is or will be the subject of a later years’ return be saved, just in case. In most audits, the burden of proving a deduction is on the taxpayer, and that includes proving the basis of an asset for which even capital gain is reported.

The foregoing is of course not intended as legal advice, but just as a summary of the pertinent periods after which the IRS may no longer examine your returns. If you are notified of an examination, you should discuss these rules with your personal tax advisor.

http://taxblawg.net/2010/06/14/how-long-does-the-irs-have-to-audit-your-return/ - 53k -

they can audit any years for underreporting can’t they?

I thought the 3yr time limit for performing an audit was just for errors. My understanding is that the window is much longer if they allege fraud.

“I was taught to hold on to Acct’g /Tax backup for 7 years in school.”

You had a good teacher.

Statue of Limitations is 7 years.

‘Is this accurate?’ Yes, that’s a good summary. There are of course exceptions to the general rule as has been pointed out.

A 25% understatement of gross income doubles the exam statute to 6 years. Interesting to note that this applies to an understatement of income, not necessarily an overstatement of deductions. For overstatement of deductions, there is a split in the federal district courts, with some circuits treating it as an understatement of income (6 yr statute), while others do not (3 yr statute). So, if you’re gonna cheat on your taxes, depending on where you live, you may be better served overstating deductions than not reporting income.

Fraudulent returns - yeah, if you file a fraudulent return, you’re hosed. From my experience, you have to screw up pretty bad before the IRS whips out the fraud allegation. The civil fraud thresholds are pretty high and there is a fair amount of revenue officer discretion in making that charge. Even if you file a return with unsubstantiated deductions, like on a Sch. C, it is easy to keep it an entirely uneventful exam with no fraud allegations.

Most fraud referrals start in normal exams and go from there. It pays to have good representation to keep the scope of the exam narrow.

‘Is this accurate?’ Yes, that’s a good summary. There are of course exceptions to the general rule as has been pointed out.

A 25% understatement of gross income doubles the exam statute to 6 years. Interesting to note that this applies to an understatement of income, not necessarily an overstatement of deductions. For overstatement of deductions, there is a split in the federal district courts, with some circuits treating it as an understatement of income (6 yr statute), while others do not (3 yr statute). So, if you’re gonna cheat on your taxes, depending on where you live, you may be better served overstating deductions than not reporting income.

Fraudulent returns - yeah, if you file a fraudulent return, you’re hosed. From my experience, you have to screw up pretty bad before the IRS whips out the fraud allegation. The civil fraud thresholds are pretty high and there is a fair amount of revenue officer discretion in making that charge. Even if you file a return with unsubstantiated deductions, like on a Sch. C, it is easy to keep it an entirely uneventful exam with no fraud allegations.

Most fraud referrals start in normal exams and go from there. It pays to have good representation to keep the scope of the exam narrow.

There is no 7 year statute with respect to federal income tax law.

ibbots
Thank you. I read your post with precision focus.

phony
Thank you as well. The article was interesting.

Naughty girl.

Do you use other people’s Bitcoin to get ‘er done?

Of course, why should I use my own?

Use other people’s bitcoins and use other people - both done at the same time with the same transaction.

What could be better than that?

Then don’t play my game.

Here’s a clue as to what makes my game work. It’s a selection from the book “Man’s Search for Meaning”, by Victor Frankl (he makes an important point, so pay attention!):

“The existential vacuum is a wide-spread phenonomen of the twentieth century. This is understandable it may be due to a twofold loss which man has had to undergo since he became a truly human being. At the beginning of human history man lost some of the basic animal instincts in which an animal’s behavior is imbedded and by which it is secured. Such security, like Paradise, is closed to men forever; a man has to make choices. In addition to this, however, man has suffered another loss in his more recent development inasmuch as the traditions which buttressed his behavior are now rapidly diminishing. No instinct tells him what he has to do, and no tradition tells him what he ought to do; sometimes he does not even know what he wishes to do. Instead, he either wishes to do what other people do (conformism) or he does what other people wish him to do (totalitarianism).”

“In addition to this, however, man has suffered another loss in his more recent development inasmuch as the traditions which buttressed his behavior are now rapidly diminishing.”

Only to be supplanted by the New Era tradition of Black Friday shopping at Walmart. WE’RE DOOMED!

You got it.

As long as health insurance lobbyist exist, it won’t work.

Fellow comrades.

Populist Resistance to Obamacare Angers Lefties

Posted on November 16, 2012
by Mark Horne

filed under Big Brother, Bureaucrats, Business, Economics, Economy, Employment, Healthcare, Liberalism, Media

You would think that Leftists have a reputation for meekly submitting to election results and waiting their turn in the next campaign season. They certainly act like such behavior is required of us. But it is not! With the radical Obama in the White House, it never stops being campaign season, not only for him, but for his opposition. And by opposition, I do not mean the Republican Party, I mean every producer in the country.

This opposition is growing. An angry tirade was just released to us by the “official ‘token Lefty’” at Forbes.com, one Rick Ungar, under the title, “The Corporate Blackmailing of America Is Now All the Rage.” I hope Ungar is not exaggerating the extent of the “problem,” because it is a beautiful thing. People are using every legal means at their disposal to resist and evade the damage inflicted by the Obama Administration. Rather than acquiescing or whining, they are taking action. Quite frankly, it is a revival of the “Tea Party” in a much more literal way. Businessmen who are being economically damaged by the government are taking direct action that opposed the government’s wishes. The only difference is that the Boston Tea Party involved breaking the law. These new resistors are not violating any law.

Ungar writes,

“For the past week, I have watched with amazement as one restaurant chain after another—the very people who peddle the high caloric foods laden with the fat and sugar that have contribute so mightily to the nation’s health problems and the resulting costs—announced their plans to cut back on employee work hours.”

They haven’t just announced it. They are doing it. When businesses suddenly find themselves facing additional expenses, they try to stop the hemorrhaging any way they can. Otherwise, they go out of business. This was entirely foreseeable. Whoever designed Obamacare either was too careless to notice the damage that would result, or else they just really didn’t care. Of course, in a world where people are judged as evil for selling other people the food they want to eat and are willing to pay for, almost any free action can be condemned.

But what is really angering Ungar is that John Schnatter of Papa John’s Pizza is adding a fourteen-cent surcharge to his pizzas to compensate for Obamacare. Ungar argues on the basis of his fellow Forbes number cruncher, that the surcharge should only be four cents. But why trust him? Ungar has to sell pizzas in a competitive world. Why would he think he could get away with selling more expensive Pizza? Maybe the real truth is that no one knows how much Obamacare is really going to cost or how badly the economy is about to contract under its influence. So Schnatter may be hedging. The bottom line is that consumers will go elsewhere to buy pizza if he charges too much.

But then he lowers the boom:

“By avoiding the health care reform law through paying less to his employees as a result of cutting back their hours, Schnatter is only increasing the costs that you and I pick up when his employees—having no health insurance—show up at the emergency room for basic care because they have nowhere else to go.”

Schnatter as a taxpayer is just as much hurt as any other taxpayer by the way Obamacare has boxed us in. But let’s forget that and other problems so we can identify Ungar’s core moral claim: It is wrong for Schnatter to make us pay for other people’s insurance but it is right for us to force Schnatter to pay for their insurance. That’s not moral at all. That’s pure bullying and enslavement.

Ungar’s arguments are illusionary. He just wants to force some people to pay for other people’s stuff. When they don’t cooperate with his wishes, he browbeats them with whatever words he can think of. But there is nothing behind them except a will to power.

“Corporate Blackmail” is really the new lie for Nancy Pelosi’s fib about “Astroturf.” This is a true grass roots resistance. And every conservative should think about and implement every legal means to resist and frustrate the oppressor class in Washington DC.

If nothing else, we will get to see these wonderful tantrums from “lefties.”

http://politicaloutcast.com/2012/11/populist-resistance-to-obamacare-angers-lefties/ - 68k -