Bits Bucket for July 21, 2014
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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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Suburbs are done here. High embedded costs, increasing minority populations, hellish clown car commutes, etc. Not to mention that even with redevelopment costs, there’s a lot of potential spaces to redevelop near urban cores. In other words, YUMM’ies* are going to be growing demographic.
* Young urban millennial males
———————–
“See ya, suburbs: More want to live in the big city”
http://www.usatoday.com/story/news/nation/2014/03/27/census-cities-metro-growth-population/6863219/
“Mostly an empty space until the middle of the last decade, the neighborhood is now one of Baltimore’s most densely populated areas, bristling with restaurants, hotels, shops and condominiums. It has more in common with the glass-clad high-rises of Manhattan than the marble-stooped row houses of Baltimore.
Harbor East symbolizes a population shift taking place across the nation, reflected in new data released today by the Census Bureau. It finds that population growth has been shifting to the core counties of the USA’s 381 metro areas, especially since the economic recovery began gaining steam in 2010. Basically, the USA’s urban core is getting denser, while far-flung suburbs watch their growth dwindle.
Driven by young professionals and retiring Baby Boomers who like living in cities, the trend is “180 degrees” from the last decade’s rush to the exurbs, says William Frey, a demographer at Washington’s Brookings Institution, a research and policy group.
“People are hanging tough in urban areas,” he says. “Some of them are going to stay there for the long term.”
The trend also is driven by increasing numbers of young people delaying or foregoing marriage and childbirth, which often prompt moves to the suburbs.”
High walk score > clown car commuting
The demand for city living now is far in excess of the supply, because most cities with transit and walkability collapsed in the suburbanization/urban decline era.
Baltimore is a good example. Harbor East may be booming, but most of the city continues to be a hellhole that drags the rest of the city down.
If Baltimore didn’t have such awful crime, schools, and taxes as a share of income, it would instead have the problem of the limited number of viable cities — soaring rents and prices.
yeah, the city is definitely split 50-50. white parts are booming. blacks in particular are moving to the suburbs. all but the best suburbs are becoming sh**.
Balt doesn’t have zoned schools for middle and H.S. you take a test and then apply. (there are some elementary schools that are on basis of application as well, e.g. Roland Park Elem.) so it kind of makes it worse for blacks because they’re most likely going to get sent to a “failing” HS which, in reality, is failing because any decent student goes to a magnet school.
DC is even worse. 3/4 of the city is terrible, bc whites still largely live in MoCo or NoVA. And the whites/asians who live in Georgetown/NW DC just send their kids to Natl Cathedral School or similar bc 30-40k/yr is a drop in the bucket to those people.
Segregation in these cities is nuts. The “dividing lines” are very clear to even a n00b in the area.
You are telling the truth, that is racist.
Whites will be a minority someday, even in the NE corridor. I’m laying the groundwork to become a scholar in the White American Studies Department at some university.
“White American Studies Department”
Hah! It may come sooner than expected…
Meet America’s emerging minority group — whites
By David Anderson, Special to CNN
updated 8:16 AM EDT, Thu August 22, 2013
(CNN) — While on a television program several years ago, I recounted a story about moving with my family into a new home in the suburbs of Washington.
As a black family, we were welcomed to the neighborhood with a shocking sight. My mother and I looked out the kitchen window the morning after we moved in to notice that someone had driven across our new lawn, skidding over mom’s cute dogwood tree, and placed a cross there to intimidate us. Not being wanted in this neighborhood based on the color of our skin made a fearful and lasting impression on me as a 9-year old.
About a week after the show a letter came to my office. Penned by a man who identified himself as a “White Fundamentalist Supremacist Christian,” the letter was a fiery missal responding to my television appearance and underscoring his disdain for black people and his glee over the fact that I had a “burning cross” (I never said it was burning) in my front yard.
…
I still contend there never was anything called White Flight….that’s racist
Instead parents saw the new crop of kids on a Jail track and not on a College track so they moved…and guess what?? so did Blacks
part of it is suburbs are expensive to maintain (far more pipes, roads, drains, and wires on a per capita basis) and they’re also starting to have legit pension obligations. suburbs that got built up in the 80s and 90s didn’t actually have many retirees or near-retirees to support, many of their cops were new hires who had retired from the force in a nearby city.
A county that needs money will raise the prop taxes (although counties often hide this by calling additional revenue “special assessments”). To keep from having to raise prop taxes too much, they allow development of ever-crappier housing stock in places that cause gridlock. You start to run into problems that negate any perceived advantage from living in your avg suburb–the yards become small, your kid still has wildlings in his/her class at school, you’re clogged in traffic, and QOL erodes significantly.
Joe its just like I95 in Fairfield county CT. (Stamford Greenwich)…massive traffic jams morning and afternoons.
Yet i propose many years ago to eliminate all business subsidies and incentives if your employees work 9-5 M-F. Base all tax breaks on the number of 2nd 3rd shift weekend holiday workers.
No different then a Wedding DJ No deals in June but ill do 1/2 price in January
Here in Long Island city there is so much FREE parking after 6pm and weekends and holidays are dead dead dead.
To keep from having to raise prop taxes too much, they allow development of ever-crappier housing stock in places that cause gridlock.
I’ve heard of some suburbs where the only new housing allowed to be built is condos or townhouses that have one or two bedrooms. The assumption is that those units would too small for families with kids. So the community gets the property tax revenue without adding students to the school district.
It’s a crappy assumption. With 2-beds, you won’t get quiet retirees or yuppies. What you’ll get is families who shovel the kids into a 2-bed unit because it’s all they can afford. And given that many are immigrants, they consider a 2-bed to be spacious. Which would the county rather have:
5 sfh = 10 kids/acre
400 unit high rise = 30 kids /acre (I saw them every morning getting onto buses)
That’s a good point. It probably only works in the more expensive suburbs.
“…and guess what?? so did Blacks…”
I’m sure it’s the same story in the vast majority of old US cities east of the Mississippi River and more than a few to the west. Once the freeway system was built in the 1950s, those who could afford to relocate to the spanking new suburbs on the outskirts of town and drive in to work, did. Those who couldn’t afford it were left behind in what was soon to become a poverty trap.
But most people don’t really want to live in a place that was not designed for living. Loud noises, stinky smells, no yard, and high crime do not attract normal people.
There are trade offs, obviously. Some areas of cities have good public parks, a water front, good social scenes, public libraries, walkable grocery shopping, etc. Some flat out blow and you might as well just live in the suburbs, sure.
All around the world though, trends show urban growth is strong. It’s a lot less true in the US than other places, actually. I still think it’s the future in the US. Living smaller, having less dead-weight costs, and being able to do things locally is actually liberating, brother. Can’t wait til I can dump DC and just bike or walk to work.
I’m not a guy.
I remember attending my cousin’s wedding reception at the World Trade Center in Baltimorgue. Upon leaving late that night, we were greeted by thugs, pimps, crackheads, etc. It was way sketchy.
Liberace,
Why buy when you can rent for half the monthly cost?
There is no terrain too forbidding for the consumption of Cheetos:
http://www.picpaste.com/IMG_20140720_093526_696-sdYa2DBR.jpg
Wait a second. I could have sworn that bag was full the last time I saw it. Did you EAT the cheetos, goon?
a) Speaking of rent, I’m living rent free in your skull apparently.
b) I just posted the “why buy when you can rent for half the cost” on the other thread for today. Stop repeating me.
Exert some effort Liberace.
“Speaking of rent, I’m living rent free in your skull apparently.”
No, he’s living rent free in YOUR skull. He coined the phrase.
Living in urban clown union goon cities controlled by democrats for the last 50 years (Philly, Cleavland , Chicago, Baltimore, etc.).
Insane property taxes
Poor and failing schools (despite records amount of educational spending)
High crime
City income taxes
Insane car insurance rates
Massive corruption
It is all pretty fun if you are single male whose only goal in life is chasing tail and drinking and you don’t mind three room mates.
It wears pretty thin very fast.
Especially if run the numbers if you ever want to save some money or start a family.
I reading it’s a mixed bag on the Suburb thing.
Why Millennials Are Headed To The Suburbs - Forbes
http://www.forbes.com/…/the-geography-of-aging-why-millenials-are-headed-…Dec 9, 2013 - Manhattanite Leigh Gallagher, author of the dismally predictable book The Death of Suburbs, declares that “millennials hate the suburbs” and …
Millennials Prefer Cities to Suburbs, Subways to Driveways
http://www.nielsen.com/…/millennials-prefer-cities-to-suburbs-subways-to-driv...
Mar 4, 2014 - Millennials are the social generation, both online and in-person. As the founders of the social media movement, they’re never more than a few …
Millennials Are Suburbanizing, While Big Cities Are Having a Baby Boom
http://www.trulia.com/trends/2014/06/millennials-suburbanizing/
Between 2012 and 2013, population growth for 20-34 year-olds was highest in Colorado Springs and San Antonio, while Austin and Raleigh were tops for 50-69 year-olds. But New York, Washington D.C., and Boston all had among the highest growth for 0-4 year-olds.
This morning the Census released its 2013 population estimates by age group for counties, which reveals which local areas are gaining or losing millennials, boomers, and other age groups. Earlier this year, the Census released 2013 population estimates for the overall population – not broken out by age group: at that time we pointed out that the most urban counties had slower population growth than the more suburban counties, even though the most urban counties were growing faster than they did during the housing bubble. (This post and this article explored the broad urban versus suburban trends.)
Today’s new data tell us whether key demographic groups – like millennials (20-34 year olds), boomers (50-69 year olds), and young kids (0-4 year-olds) – might be bucking the broader trend of more suburban counties growing faster than the most urban counties. To measure this, we use the same approach of dividing all U.S. counties into four quartiles based on their household density so that each quartile includes around one-fourth of the total population (see note on county definitions and age groups). Going from the highest to lowest density, the four categories correspond roughly to (1) big, dense cities; (2) big-city suburbs and lower-density cities; (3) lower-density suburbs and small cities; and (4) smaller towns and rural areas.
The punchline: millennial population growth in 2012-2013 in big, dense cities was outpaced by big-city suburbs and lower-density cities and even by lower-density suburbs and smaller cities. Boomer growth in big, dense cities also fell just short of growth in the big-city suburbs and lower-density cities. But the population of kids under the age of 5 grew fastest in big, dense cities. Let’s take a look at each of the age groups.
Millennials Not Flocking to Big Cities
From 2012 to 2013, population growth for millennials (20-34 year-olds) was highest outside big cities. The fastest growth was in the second quartile of counties ranked by density (big-city suburbs and lower-density cities). Furthermore, the third quartile (lower-density suburbs and smaller cities) edged out the top quartile (big, dense cities) for millennial population growth
Today’s new data tell us whether key demographic groups – like millennials (20-34 year olds), boomers (50-69 year olds), and young kids (0-4 year-olds)
I guess I don’t exist.
Millennials can’t flock to cities because the decent ones and decent parts of others are full, and expensive.
Even if they want to stay in cities, as polls show, they can’t unless someone builds more of them somehow.
Young parents who grew up in the suburbs don’t send their kids to city schools.
Young people are enticed to buy in the city because it’s cheaper - at least in Baltimore. But they’re not going to have kids there or send their kids to school there.
This paid message sponsored by the Texas Chamber of Commerce.
2B
Sure the urban areas have high taxes and housing costs. But in many of them the rents are cheaper than owning by far. And the jobs pay far higher than in rural areas. Opportunities for career advancement are golden in liberal-controlled cities. The smart conservatives and libertarians understand this and squirrel away savings in 401ks and IRAs, then at the end of their career move to places such as Wyoming, New Hampshire, Texas, Nevada, Alaska, and Washington.
Harbor East is an awesome area. My sister lived in Fells Point, right around there. I’ve been there a few times, while living in White Marsh a few years ago (known around here at the time as Bill in Maryland)
* Young urban millennial males
Right up your alley Liberace.
BB&T falls on weakness in the mortgage market (B…b…but I thought housing was going to lead us out of the recession!)
http://www.marketwatch.com/story/bbt-profit-revenue-fall-on-weak-mortgages-2014-07-21
I guess subprime is back in the auto market with a vengance. Lenders are going after the weak with 25% interest rates on pos cars that wont make it through the loan length. loans being packaged and sold to bond investors. Bailout ?
I wonder when they will lower credit standards to rope more buyers into housing?
What would have done wonders for this economy would have been to drop credit card rates to zero and all the money used pay down the principle and lower the credit limit the same amount….
people would have had some extra cash (interest saved) each month to spend
Borrow our way to prosperity. Great plan.
Argentina is trying it. lucky the Chinese have so much money:
http://www.chinaeconomicreview.com/china-agrees-lend-struggling-argentina-75b
Excerpt:
The residential mortgage default rate for China Construction Bank Co., the biggest provider of home loans in the country, was only 0.17 percent last year, compared with 0.99 percent for all types of lending, according to the bank’s annual report.
The relative safety of mortgages stems in part from the 30 percent minimum downpayment requirement for first-time home buyers. That is a high percentage globally, according to CBRE’s Chen.
“Risks of China’s RMBS are very low, in our view,” Chen said. “In China, mortgage default rate is the lowest among all types of bank loans. Also, China’s homebuyers are required to pay a minimum down payment of 30 percent, which is a high percentage globally.”
That excerpt is for another link from China Daily that will appear soon.
“The relative safety of mortgages stems in part from the 30 percent minimum downpayment requirement for first-time home buyers. That is a high percentage globally, according to CBRE’s Chen.”
Yep.
4:17 pm HKT
May 29, 2014
Economy & Business
Zero Down Payment? China’s Developers Get Desperate
On an empty street in a remote suburb of Beijing, a huge golden unicorn stands guard over Season Joy City, a half-finished development of a dozen tower blocks set in 50,000 square meters of manicured parkland.
About a third of the apartments are sold, but with increasing signs that China’s property market is turning sour, the developer behind the project is trying to hurry things along.
Season Joy City offers a party bag of bonuses to lure potential buyers. The development’s original selling point was “buy one floor, get one free.” When China Real Time visited last week, helpful sales assistants also offered to throw in kitchen fittings and four air conditioning units for nothing.
But the biggest draw is a “zero down payment” scheme, available for a two-and-a-half-week period only. At first sight this seems to go against government regulations, brought in to keep house prices under control, which stipulate a minimum 30% down payment on ordinary residential purchases.
Zero down payment schemes have popped up around China as developers go to ever greater lengths to shift apartments, but Season Joy City may have the distinction of being the first to try it in Beijing, said Tang Li, an analyst at North Square Blue Oak, an investment bank.
“They will help homebuyers to apply for this consumer loan that they can use as a down payment,” said Mr. Tang. “It’s very difficult to judge whether this is in line with the regulations or not. So far there’s been no punishment from the government.”
…
We already knew that the 30% down-payment with “saved money” was a lie.
$25 Trillion credit mania. You don’t do that with “saved money”.
But the biggest draw is a “zero down payment” scheme, available for a two-and-a-half-week period only
Two and half weeks? Clearly this is very uncommon and is an exception that proves the rule, as does the very low default rate. Chinese have put down between 30 and 60% on home loans hence the low default rate and the loans are for ten years, if you cannot see the difference between 2006-07 in the U.S., you truly are clueless.
” this is very uncommon…”
So you say. We think the biggest credit bubble on the planet involves a lot of borrowing.
“…if you cannot see the difference between 2006-07 in the U.S., you truly are clueless.”
Thank you for lowering yourself to grace us with your brilliant insights.
Some junkmail addressed to a former tenant I received from Springleaf Financial Services offering a personal loan at 25.61%
http://www.picpaste.com/IMG_20140721_062622_742-1HuvqZK3.jpg
Only a debt donkey would need to borrow at these rates
Only $1882 in interest charges over the life of the loan…what a deal! /sarcasm
Zero-interest loans worked out great for the Wall Street investment banks. Why not try it out on individual consumers?
Actually it would have helped the little people get out of debt. increased fico scores and heck the fed threw away a few trillion, and almost none of it tricked down
The max credit limit on each card would go down with each months payments…pay 2% of the outstanding debt in 50 months its all paid off..which should be very easy if you are not paying 18-24% interest.
Expanding credit makes the little people more poor dj, not less poor. The money has to be paid back, which makes their spendable cash just that much less in the future.
Something new: Lots of radio ads have been popping up in the L.A area offering small businesses overnight loans. I don’t remember ever hearing them until just recently.
A._Fraud…… Imagine the tsunami of lightly used new cars on the horizon.
That’s great, as I plan to buy a lightly used new car next time we need an upgrade. I’m guessing the shadow inventory problem won’t restrict the number of used cars on the market the way it has the number of used houses? (As I typed that, I vaguely recalled something called “Cash for Clunkers” which made me doubt myself…)
Whac, I don’t think it will work that way. Bc relatively more people can’t afford to buy new or can’t quality for a standard rate, more will continue to be on the market for used cars.
When we were buying cars, we were told it was rare for anyone our age (or younger) to actually buy. They tried to talk us into a lease or a used car (at 90% of the new price) because I kept staying firm on what I was willing to pay to buy. They wouldn’t stfu about used/leased cars until I said it was going to be cash purchase.
I actually ended up NOT doing cash at the time of sale bc to get them to drop the price more, we agreed to finance it. And then, we paid it off the next month. But you’d be surprised how willing they were to drop the price further when they can explain it to their manager as they have you signed up for a 48 month loan.
Wrong Liberace. Subprime auto borrowers outnumber prime borrowers 5 to 1.
“When we were buying cars, we were told it was rare for anyone our age (or younger) to actually buy. They tried to talk us into a lease or a used car (at 90% of the new price) because I kept staying firm on what I was willing to pay to buy. They wouldn’t stfu about used/leased cars until I said it was going to be cash purchase.”
Are you, perchance, interested in some swampland on the moon? You sound like a rube. This is completely OPPOSITE of what’s actually going on. I was talking to a gal who works for Ford, and they are approving young people with credit scores in the 400s for new car loans. There is massive demand for new cars from young folks in their 20s, not to mention 30s. You don’t get out much.
Well…… Liberace isn’t exactly known as a bastion of truth.
how many natty lights today? pick yourself of the floor.
Housing A._Fraud housing my boy!
Ventura, CA Housing Prices Dive 27% As Inventory Explode 71%
http://www.movoto.com/ventura-ca/market-trends/
loans being packaged and sold to bond investors.
With housing, the taxpayer/printing press was the greatest fool. But there is no Fannie equivalent for car loans. Is the secondary market really retaining the risk to itself?
I was doing these deals for major US car manufacturers in the early 90s. As far as I know they are still all private. Back in the day, we made the issuers retain the worst 10% as the equity tranche. I don’t know when that evaporated, but it certainly has. Check the box regulations (for choosing partnership or corporate treatment for tax purposes) killed the need for an equity tranche as a back up.
Thank you, Polly. If I were an investor I would stay far far away from car loans for two obvious reasons:
1. F&F bought mortgages indiscriminately, so banks were free to originate them indiscriminately. For cars, all the tranches are held by entities who look for profit, not some nebulous taxpayer’s children and grandchildren. It seems to me that even cursory underwriting will self-limit the loans that the private secondary market will buy.
2. Houses appreciate over the long term. If all else fails, inflation on the land alone will be greater than the mortgage. But after 15 years, cars are worth nothing. Nothing to repo or sell.
“Houses appreciate over the long term. If all else fails, inflation on the land alone will be greater than the mortgage.”
Tell that to a Japanese household who bought in 1990.
= ridiculously high used car prices
bought a new one a year ago as used were way high
I was never into leasing but if u can stay in the mileage limits I think its a feasible option these days.
I guess you only pay sales tax on your payments.
Sales tax on a 30k car can be ~ 2300.00.
We no longer have a car, but may want one for our daughter’s last two years in college.
I wonder if previously leased cars are ever re-leased for a couple of years?
“Buyers like (Adam) Gilgis shun long-term loans associated with outright purchases because increasingly they see cars as smartphone-like gadgets to be upgraded every few years.
“Like an iPhone, one can get a new vehicle with all the new technology and have a similar payment as before,” said Jessica Caldwell, an analyst for auto researcher Edmunds.com.”
This:
“Leasing was once considered tacky and financially frivolous, letting posers drive cars they could ill afford.”
You’re still a poser.
http://www.bloomberg.com/news/2014-07-21/leases-entice-drivers-to-upgrade-cars-as-often-as-iphones.html
Sunday’s B’more Sun had a full page ad for Towson Lexus/Porsche/BMW noting that they’re now also a Maserati dealer.
Apparently you can lease a Maserati Ghigli (or whatever it’s called) for $850 **** (there were a handful of asterisks on that price, I didn’t care to read the fine print, I’m sure the true total cost is one arm, both legs, and your gonads).
“So far this year, leases have accounted for about 27.7 percent of new-auto sales…” Yet, nearly every car ad on TV shows the lease price?
Why buy a used up car when you can buy a new one for 10% more?
“Why buy a used up car when you can buy a new one for 10% more?”
+1 Indeed. Truth!
T R O L L
Don’t get all mad at yourself A._Fraud. Stick with the data!
Sherman Oaks, CA Housing Prices Crater 20% YoY As Demand Collapses Across State
http://www.movoto.com/sherman-oaks-ca/market-trends/
Buying a used car these days doesn’t make that much sense to me. I shopped around numerous dealers and used car places. It seemed that the discount for used cars just didn’t fully take into account the beating they take. Like a 3 yr old, 35,000 mile Accord was only maybe 5k cheaper than brand new with <100 miles. I ended up buying new bc of the combo of planning to keep it for 8-10 yrs and knowing it will still have decent resale at that point bc we drive like 7k miles/yr these days.
Our old civic had 13 yrs (my wife had it since HS) but I can’t see keeping a car that long again. Cars have improved a lot since the 90s/early 00s and will probably make another leap by the 2020’s. Our ‘14 accord gets the same mpg as our ‘01 civic did. The features are much better and both were the same trim level. The Fords I test-drove last fall had even better features but my wife’s the one who uses the car and she didn’t like the look of the Fusion or Escape (LOL @ women and superficiality). On the other hand, Toyotas were clear for people who don’t like driving at all. I’m sure they get the job done, but they felt like ride-on lawn mowers by comparison.
she didn’t like the look of the Fusion or Escape (LOL @ women and superficiality).
Like men don’t pay attention to the “look” of a car? From what I’ve seen, that’s ALL they do.
Sure, but what color is it?
We’re test driving a Tesla Model S Friday evening. Looking forward to meeting other Tesla enthusiasts.
The Model III (2017) is too far out to replace my 332,000 miles Volvo. I’m driving 5-6,000 annually, but she’s really tired.
I hope the MSRP holds at $35K (w/o incentive games?). Recharging Stations are going to be free (solar) and plentiful. We’re on the cusp of smart vehicles. It’s about time. Go Elon Musk!
All based on a serious reduction in battery prices, don’t hold your breath.
Dan
Hopefully Tesla’s Gigafactory will work out the battery prices. Tennessee Tuxedo will not fail!
I follow plug in cars dot com.
Um, Toyotas drive way better than Fords, dear Joe.
Chinese mortgage default rate is .17% of loans, what is the U.S. rate, those 30% down payments sure help:http://www.bloomberg.com/news/2014-07-20/first-mortgage-debt-since-crisis-shows-li-concern-china-credit.html
High IQ, well educated population causes this:
http://usa.chinadaily.com.cn/us/2014-07/21/content_17863183.htm
Link will soon post, Excerpt:
Chinese students rank highest in financial literacy test:
Updated: 2014-07-21 04:24
By AMY HE in New York
Chinese teenagers scored highest on a global test of financial literacy, with Shanghai youngsters ranking No 1 and teens from the US ranking ninth, according to the Organization for Economic Cooperation and Development’s financial literacy assessment.
Paris-based OECD tested students on their financial knowledge for the first time as part of their Program for International Student Assessment (PISA), conducted once every three years.
Students from Shanghai scored on average 603 on the financial literacy test, beating the global average of 500. American teens scored 492 and ranked behind Latvia.
The financial assessment portion is a 60-minute test of 29,000 15 year-old students from 18 countries that was held in 2012 with results released this month.
It tested them on their ability to solve financial problems and make financial decisions.
“Developing financial literacy skills and knowledge is critical now that individuals are becoming increasingly responsible at an ever earlier age for financial risks affecting their future,” said Angel Gurría, OECD secretary general, at the launch of the report on Jul 9 in Washington.
“Some governments have started developing strategies and policies so that people have the skills they need throughout their lives. More need to move this up the policy agenda so that citizens are prepared for an ever-more complicated financial world,” he said.
Annamaria Lusardi, chair of the financial literacy expert group that designed the financial literacy portion of the PISA assessment, said that it is “critically important” to measure students’ financial skills.
“If you’re thinking about what’s happening in all countries, there is an increase in individual responsibility, so the individuals are much more in charge of making decisions than in the past, where they were made by, let’s say, the government or employer,” Lusardi told China Daily. “Imagine a person who is unable to read or write today, you would not be able to operate in society. The same I think is happening for financial literacy.”
The OECD said in its report that its assessment of Chinese students includes data available on their saving habits: students in China save money when they have money to spare, and students who do so outperformed on this test than those who save only when they want to buy something.
The results “suggest that for students in Shanghai-China, setting money aside regularly or when they have some to spare, is associated with higher financial literacy than saving only if students need to buy something, even after comparing students of similar socio-economic status,” the OECD said.
The assessment showed that 38 percent of students from Shanghai answered that they save money at regular intervals, 19 percent save the same amount every week or month, 17 percent only when they have money to spare, and 16 percent when they need to buy something.
“The fact that a majority of students indicated that they would save is encouraging for their future,” the OECD said.
Lusardi said that China’s ranking is not surprising, since scoring highly on financial skills is correlated with strong math skills, a topic that students from China have traditionally done well on in past PISA assessments. In the 2012 test, Chinese students from Shanghai ranked No 1 in math scores.
“Some of practice [in saving] might also help, but I also think that knowledge of math, what people learn in school, can be equally important,” she said. “Given the high correlation between math and financial literacy, I think that this is a sign that what they teach in those schools can be pretty important to increase financial knowledge
Too bad they couldn’t use those math skillz to calculate what day the meat goes bad
Bloomberg - McDonald’s, Yum Halt Buying From Chinese Meat Supplier
“McDonald’s Corp and Yum! Brands Inc halted buying meat products from a Shanghai supplier while authorities investigate allegations that the company sold chicken and beef past its expiration date.
This is the second time in less than two years the two fast-food chains have been hit by a food safety issue involving Chinese suppliers.”
Think meat beyond is expiration date does not get sold in the U.S.? Think again:
http://www.fda.gov/AboutFDA/Transparency/Basics/ucm210073.htm
China pimp.
Why?
‘Tis a puzzlement…
As stated previously, I have worked with plenty of Chinese people. Some have been smart, but most are NOT, just like everyone else. The majority of people (including Chinese ppl) do not have the ability to reason their way to a solution. Asians are particularly bad at coming up with anything innovative.
How many is plenty?
All the Chinese woman I have dated have been smarter than you.
women (auto correct)
It may appear so to you, but only because you are not capable of recognizing intelligence. Furthermore, you need to ask your PR-company employer to get you a new gig. Your China-pumping routine is getting old.
I am glad you have a high opinion of yourself but your intelligence is only recognized by you.
“Your China-pumping routine is getting old.”
You can say that again.
“The economy’s slowdown and the property market’s weakness are quite obvious in the first half…”
Yes, compared to ten percent growth just about anything is a slowdown. Here is a balanced article on the present status of real estate in China, sorry Whac the sky is not falling:
http://usa.chinadaily.com.cn/business/2014-07/21/content_17870961.htm
You do realize that your outlook on China is spoon fed propaganda direct from the PRC Ministry of Truth, don’t you?
You do realize that your view is spoon fed by the MSM working for the fiat promoting big banks of the U.S don’t you?
You do realize that your view is spoon fed by the MSM working for the fiat promoting big banks of the U.S don’t you?
Makes no sense. Big banks/MSN would promote debt and China/Globalization and not tell much truth about any China troubles.
Try to keep up.
Not 7 days ago, A-dan’s agenda was to promote fossil fuels like natural gas and the anti- AGW that goes with. Whence this sudden interest in China? Change in paymaster?
“MSM”?
Not 7 days ago, A-dan’s agenda was to promote fossil fuels like natural gas and the anti- AGW that goes with. Whence this sudden interest in China? Change in paymaster?
As a good contrarian my priority has changed. CAGW is pretty much discredited now. We should be 1 Celsius warmer by now if the models were correct. If a combination of revising past numbers and El Nino leads to a “new” record of .01 degrees higher for this year no one will care. Now, people believe that China is about to crash since their housing market is in a correction, it is a bad joke and I am rebutting group think caused by the lame stream media.
Seriously, I think rebutting the little bits and pieces of information posted here indicating that there are big problems brewing with official communist party press releases is way too much a sad joke. We are here to watch and understand the biggest global credit event ever and you are screaming “lalalala” at us.
This may be in a Chinese paper but it is from a Western bank:
http://www.chinadaily.com.cn/business/2014-07/21/content_17872967.htm
It has increased its prediction for Chinese growth this year. As I have said before many on this board seem to be contradicting their beliefs. Housing bubbles are not good for sustained GDP growth and a deflating of a bubble does not have to result in a recession. I have always believe that and China is proving it. Supply side economics is the solution, not first time home buyers’ credits etc.
Excerpt:
BEIJING - Banking giant HSBC has upgraded its forecast for China’s year-on-year gross domestic product (GDP) growth to 7.5 percent from 7.4 percent, saying recovery has been stronger than expected.
The Chinese economy expanded 7.5 percent year on year and 2 percent quarter to quarter (seasonally adjusted) in the second quarter. In the first half of 2014, China’s economy expanded 7.4 percent from a year earlier.
GDP growth in the second quarter “surprised on the upside relative to our forecast” owing to stronger-than-expected government support measures, HSBC Chief China Economist Qu Hongbin said in a report on Monday.
Activity data suggests that most of the improvement came in June, with monthly fixed asset investment and industrial production growing 17.9 percent and 9.2 percent, respectively, compared with 16.9 percent and 8.8 percent in May.
Seriously — what is up with all the China pimping? Is somebody paying you to blow smoke in would-be investors’ eyes?
Only a complete moron would miss the epic real estate crash underway over there.
I think the really interesting part in the Chinese Bubble will be the family dynamics being strained and downstream impacts of assets falling in value…my understanding is that the “30% down” frequently comes from loans from other family members.
How much of that money has different strings attached (borrowed on other assets and needs to be repaid)?
How much of that money was borrowed from relatives with the promise it would be paid back with a refinance since prices were going up and up and up? Do the relatives NEED the money back?
In other words, whatever impact there is in China from a popping bubble, it may not look the same as it did in the US. It may not be a direct hit to the financial system (given the high down payments), but it may be an indirect hit to the financial system, since leverage is leverage, regardless of whether it comes from a bank or relatives…falling asset prices will have an impact–it’s just a question of where the impact is felt, and the magnitude of the problem.
The other way it might be different is that in the US, with the loans causing foreclosures, and thus hitting values, there was a massive negative feedback loop that played itself out relatively quickly (abrupt crash that fed upon itself). If bank lenders in China aren’t impacted as much as they were in the US, the direct negative feedback loop will be weaker–will there be an indirect negative feedback loop? What will THAT feedback loop look like?
One such negative feedback loop could be related to fraudulently obtained business loans (”laws” in China seem to be more “suggestions” than enforced rules).
Example.
Rich uncle Johnny borrows money from the bank to expand his business. However, before investing that capital in the business, it takes a detour to provide the down payment to the nephew to buy the condo so he can get married.
The nephew ensures Uncle Johnny that he’ll pay him back in time to invest the money in the business, so he can pay back the business loan (or at least make payments on the business loans).
Economic downturn, linked to residential values falling leads to weakness in Johnny’s business, and limits nephews ability to refi.
So…bank is hit based on asset values falling, but not directly tied to the home loan…indirectly tied to home values due to inter-family borrowing/lending.
I’m sure this kind of loan has taken place…it’s just the question of how common it is.
They aren’t allowed to default; they’re trapped paying a mortgage on their lease. Their kids are trapped. It’s absurd. This sort of thing creates major long-term drag.
Dan, china could well have a huge collapse in housing. but that doesn’t mean that the overall economy would be damaged. housing would participate in an economic collapse, but a housing collapse alone wouldn’t cause an economic collapse.
this is an excerpt from an article written yesterday..
“Although China’s economic growth remained unchanged in 2013 from 2012 at 7.7%, the country’s electricity data tell a more positive story.
Chinese electricity production grew 7.6% last year to 5.2 trillion kilowatt hours, according to data released Monday by the National Bureau of Statistics. That was faster than growth of 4.7% in 2012.
The country’s electricity consumption also corresponded with the increase in production. Electricity usage grew 7.5% last year to 5.3 trillion kilowatt hours, faster than a pace of 5.5% in 2012, according to data released last week by the country’s National Energy Administration, as energy-intensive industries such as steel production boosted power demand.
Most of the increase in last year’s power consumption was due to the industrial sector, which accounts for nearly three-quarters of total power consumption. China’s industrial sector consumed 3.9 trillion kilowatt hours of electricity last year, up 7% from a year earlier and accelerating from a growth rate of 3.9% in 2012. China’s steel output, for example, grew 7.5% in 2013, faster than a pace of 3.1% in 2012.”
the bolded last part is extremely bullish for china’s economy.
still, i’m not saying an economic collapse in china is impossible. just that from what i’m seeing it’s not likely. china is still a communist country. but as long as they keep inching to free market capitalism, their economy will continue to improve. but if their government starts to interfere, as in gets more controlling, their economy will suffer accordingly.
it’s hard to trust any government’s numbers these days, but electricity usage is a pretty fair indicator of a growing or shrinking economy.
as always, don’t let the socialists get you down.
Like usual we agree and that has been my point. While China is still poor since it still has way too much government interference in the economy, the people’s embrace of capitalism is making it rich and a housing bubble burst will not change that.
SO WHAT? This (you may note) is the housing bubble blog. A place where people ponder and pontificate about housing bubbles. It is not the global warming blog, the Republican blog, the Chinese women are into ABQDan blog, or anything else. We can tolerate deviation from the strict definition, but my lordy your horse is dead. Stop beating it, dude. Just. Stop.
And don’t even think about making a joke out of what I just said, either.
He’s been getting too many “happy endings.”
“…housing would participate in an economic collapse, but a housing collapse alone wouldn’t cause an economic collapse.”
Sounds remarkably similar to the U.S. economic picture back in August 2007, when subprime was contained.
P.S. Where do you guys buy the st00pid pills? Do they make you feel good?
speaking of st00pid.. yer still takin’ those little brown nasty tasting ’smart’ pills, right? don’t worry.. keep taking them. they’re bound to kick in sooner or later.
July 22, 2014, 1:47 a.m. EDT
China real estate dominates the economy: official
By Laura He
HONG KONG (MarketWatch) — About 60% of China’s manufacturing and financing activities are related to the property sector, China’s state media quoted a senior government economist as saying Monday. …the property sector remained a worry, said Zhu Baoliang, head of the State Information Center’s economic forecast department. The state-run China News Agency quoted Zhu as saying that the property sector has “too great an influence” on China’s economic health. “If any big problem occurred in the real-estate industry, it would have a great impact on the economy,” he said. The State Information Center is a government policy think tank affiliated with the National Development and Reform Commission, which is China’s top economic planner.
define ‘great impact’..
only morons believe that real estate ‘dominates’ an economy.
Indeed… Morons and liars.
“…as always, don’t let the socialists get you down.”
…nor the Chinese communists.
“Dash for trash” junk-bond investors starting to get spooked…cue the stampede for the exits in 3-2-1….
http://www.marketwatch.com/story/a-junk-bond-warning-investors-exit-as-yields-rise-2014-07-21
Is wealth redistribution a part of the Fed’s mandate?
Yes Obama’s Fed is moving money from the masses to the .01%.
Why do you keep referring to the independent U.S. central bank as “Obama’s Fed”? Are you really as clueless as your posts suggest?
When you appoint people to the NLRB or the Fed or any other entity because they have a certain view and they act consistent with their known views, as a President you have to take some responsibility. If you think that Obama is not getting the Fed he wants you are whacked.
More probable that the Fed got the Obama that they wanted.
Why do you keep referring to the independent U.S. central bank as “Obama’s Fed”?
Because it’s Adan’s ADD snapshot pattern of thinking. (My post hasn’t posted in 20 seconds so here’s the gist yada yada)
Adan (conveniently or connivingly) doesn’t see trends, thinks that every president gets a total reset on economic policy -thinks if 2013 is cooler than 1937 then C02 is good for the earth - thinks Decl of Indep, US Const and The Rights of Man were unrelated points of history etc.
Now he says that the 34 year trend of TrickleDownSupplySide enriching the .01% at the expense of everyone else is only Obama’s fault. It’s like listening to a chili.
(chili= child)
No because I understand what an independent agency really means. Funny the Supreme Court is independent too but the Democrats always run of the need to elect a Democratic president to avoid the overturning of Roe v. Wade. You and Obama just want to avoid taking blame for anything while taking credit for things that he had nothing to do with like the increased oil production from private lands due to fracking.
You and Obama just want to avoid taking blame for anything
BS. I posted 2 posts yesterday that criticized Obama and it’s Obama’s fault when I get sand in my shoes at Ipanema Beach.
the increased oil production from private lands due to fracking.
Fracking rocks dude! It’s always good to pump chemicals into the ground when our aquifers are falling because it’s on private lands so it’s A-OK.
Hey, be nice. HBB has a Bad Chile, and a Mini-chili, and a Micro-chili. But it’s been a while since we’ve seen the Chilis, so by now the mini is probably a chili and the micro is probably a mini.
it’s been a while since we’ve seen the Chilis, so by now the mini is probably a chili and the micro is probably a mini.
Nice. That reminds me. I nominate this as the HBB Theme Song.
Johnny Cash - The One On The Right Is On The Left
https://www.youtube.com/watch?v=76CpZgOKHOQ
Rio, any thoughts on this article?
http://www.nytimes.com/2014/07/20/upshot/income-inequality-is-not-rising-globally-its-falling-.html?_r=0
Free market capitalism sucks, but it may very well be the best system that we’ve got.
Free market capitalism sucks,
Capitalism is great when properly regulated to benefit more equally more people than it is doing now. (More equally not totally equally.)
Rio, any thoughts on this article?
Firstly, that article address income inequality and not wealth inequality which is imo a sly way to hide a huge part of the problem.
The author leans to the right and is seems to me, a subtle apologist for TrickleDown and globalization which has failed most America but has benefited mostly China (and other poor countries) so of course income inequality globally lessens when 1.3 billion Chinese make $10 more a month than they did 20 years ago, especially when the American middle class income has fallen because of it. Math.
What he also does not well address, is that global income inequality would have lessened even more, if most of the gains from the globally lessening income inequality had not gone into the pockets of the super rich - the .01%.
For every dollar more a Chinese makes making products for America (that America used to make) more money goes into the pocket of the .01% because he’s paying less than paying an American.
Bottom line that he does not address or hides:
Global income inequality would still have lessened or lessened even more if the .01% were taxed much higher or if the benefits of globalization were shared much more broadly.
There’s more if you have any questions for me.
In three sentences or less, define “properly regulated”.
How do you do so in a global economy?
So, are you more in favor of 1) “wealth redistribution”; or 2) increasing the income of those least fortunate?
I’ve heard your point over and over again about the disparity in the US in part coming from globalization (shipping jobs overseas to low wage countries)–and a solution being certain types of trade laws to restrict some of those jobs moving.
Are you saying that if there were such protectionist policies in place in the US that would slow the movement of these jobs overseas that there would be even less global income inequality? How?
“Global income inequality would still have lessened or lessened even more if the .01% were taxed much higher or if the benefits of globalization were shared much more broadly.”
It seems you are mixing “wealth redistribution” with economic development. If you tax a rich guy in the US more, how does this bring up the income of the least fortunate in China–because you tax the suffering middle class in the US less and they can buy more crap from China? How does implementing trade restrictions in the US allow globalization to be shared more broadly?
Q: What did ABQDan’s GF say when they were participating in “extreme snuggling”?
A: “I feel a little chili”
Here’s another way to look at it.
Just Because the World’s Poor Benefitted Partly at the Expensive of the Middle Class, Doesn’t Mean It Could Not Have Been Otherwise
Sunday, 20 July 2014 06:55
Suppose a mob boss has his thugs go around and shake down a bunch of small business people. Imagine he then gives a portion of the haul to poor children. When the business people complain, the mobster then tells them they are being greedy, after all don’t they care about the poor children?
This is esentially the argument that Tyler Cowen gives us in the NYT this morning. There is little doubt that hundreds of millions of people in developing countries like China and India have benefited from the growth in the world economy over the last three decades. To some extent their gains have come from displacing workers in rich countries, especially the United States. However we did not have to structure the world economy this way.
People in developing countries could also have experienced enormous gains if their doctors and other highly educated professionals were allowed to compete on an even footing with their counterparts in the United States and other rich countries. Similarly, there would be enormous gains from allowing India’s generic drug industry to sell low cost drugs like generic Sovaldi in the United States and elsewhere. And, we all would benefit from taxing the financial industry like other sectors of the economy and ending too big to fail subsidies for Wall Street banks. Furthermore, in a period of secular stagnation like the present, everyone could benefit from just handing large amounts of cash to the world’s poor, since it would generate demand.
Just because the world’s poor benefited at the expense of the middle class in rich countries does not mean it had to be this way. We could help poor children without having a mobster shake down small businesses to finance his charitable contributions
http://www.cepr.net/index.php/blogs/beat-the-press/just-because-the-worlds-poor-benefitted-partly-at-the-expensive-of-the-middle-class-doesnt-mean-it-could-not-have-been-otherwise#comments
define “properly regulated”.
USA properly Regulated capitalism: First it has to be acknowledged that modern capitalism is dependent on government.
Here are some examples that would more properly regulate American capitalism to more equally benefit the majority. Americans. (Anyone calling these things “socialist” would mean America of the 50s and 60s was socialist)
1. Corporations are not people and massive business money affecting elections is not “free-speech”
2. Public financing of elections.
3. Raise the minimum wage to keep up with inflation/productivity.
4. Single payer health care with private insurance option.
5. Revert laws regarding private sector union formation back to what they were 40 years ago.
6. Much higher progressive taxes on the very rich with investment income taxed as income. .01% tax on every financial transaction. Revenues to be invested back into the USA in education, tax cuts for the middle-class, health-care, infrastructure, basic science research, small businesses, social safety nets, worker training etc.
7. Revert intellectual property law expiration terms to what they were 30 years ago.
So, are you more in favor of 1) “wealth redistribution”
I am absolutely in favor or wealth redistribution because it has percentagewise already been redistributed from the middle-class to the .01%. How to redistribute it? Please see my post on regulated capitalism.
or 2) increasing the income of those least fortunate?
Please see my post on regulated capitalism.
“Global income inequality would still have lessened or lessened even more if the .01% were taxed much higher or if the benefits of globalization were shared much more broadly.”
In this, I’m referring to real income after taxes, and the income (and wealth) for the .01% or the .005% of the world and America is so off-the-charts that it greatly affects global income inequality. Therefore if the real income for the .01% were greatly lessened in a steeply progressive taxed manner, and then redistributed in the ways listed in my “regulated capitalism” post above, then global income inequality would still have lessened imoor lessened even more. (Note the word “or” used in a “could have” usage)
The redistribution of the wealth gained by the .01% in the manners listed in my “regulated capitalism” post would also have greatly lessened the USA income inequality ratio which is massive and has a great affect on global income inequality.
I am also partially conflating the wealth inequality issue here and a multiplier affect massive income has on increasing great wealth and vice-versa, which the author of that article neglected to address.
Thank you. I forgot. Please add to the list of “properly regulated USA capitalism above”
8. Higher USA import duties to reflect fair-trade, not “free-trade”.
Are you saying that if there were such protectionist policies in place in the US that would slow the movement of these jobs overseas that there would be even less global income inequality? How?
You are mixing two issues at two different times. Until right now, I really did not bring into today’s conversation my past views and expressions on USA protectionism - and/or if I thought it should have been used as a tool to reduce global income inequality. And as you know the .01% did not give away our manufacturing to reduce global income inequality. They did it to line their pockets. If most my “regulated capitalism” ideas were in place, USA would have pursued fair-trade and not “free-trade”.
Today until now, I was addressing the issue as our trade laws currently stand, and how their negative impact still could have been lessened on the American middle-class while still lessening global income inequality.
My first concern is America on these issues more so than the world, because the world could and should have done things differently too. Yes, I think the USA should have pursued FAIR trade at a measured pace and not the wholesale giveaway or our industrial base.
Every country can’t better itself by exports and currency manipulation alone as did China mostly. There are other ways for countries to become great without grabbing USA manufacturing. USA did not just become great because we exported.
hi comrade! long time no see.
is that global income inequality would have lessened even more, if most of the gains from the globally lessening income inequality had not gone into the pockets of the super rich - the .01%.
income inequality is a natural function of prosperity, comrade. if you want income equality, (except for the connected elite) go to n. korea and pay tribute to the dear leader.
First it has to be acknowledged that modern capitalism is dependent on government.
n. korea would have collapsed without china’s help. the soviet union actually did collapse. you can’t have government without past wealth created by capitalism. but government is great at destroying that wealth.
so as usual comrade, you have it backwards.
@komrade.. i could go on, but it appears RW is already kicking your socialist butt.
Who farted?
RW probably knocked one out of you.
The Brazilian socialist economy and it truly stinks.
The assumption that you make is that with higher marginal tax rates, investors would still take exactly the same risk with their capital (investing in new enterprise, etc.). That is simply not true. Tax rates impact investment in risky ventures (and new enterprises are risky).
The other factor that you don’t seem to incorporate into your thinking is the natural rebalancing of the system.
You are right, businesses sought the cheapest way to build their product, and that drove them overseas. AND because the wealthy disproportionately own those companies, they benefited the most. Those without ownership in those companies only benefited with lower cost goods.
You are also right in that the US did not become great because it exported. It became great because of the freedoms the system allowed people to pursue lofty goals even with the tremendous prospect of failure.
All of this means that wage inflation in the US is non-existent, unlike China, India, etc.
What will happen next? It’s already happening. The competitive landscape shifts, American companies innovate in order to make manufacturing more competitive in the US, manufacturing comes back to the US.
Believing in the benefits of the “invisible hand” of free markets is not the same as believing in “trickle down” tax policy. Too much monkeying with the invisible hand in order to protect your workers can look good for a while…until it’s not (see France and Spain with respect to labor laws, see GM).
Yes, the creative destruction of capitalism is brutal. But the benefits of free markets has lifted more people out of poverty than any other system in the history of the world.
You disagree we me clearly…fine. Perhaps I like the elegance of a self-correcting system far more than you, and don’t believe in the ability for government to make such a system better. Perhaps it’s also why I believe in evolution, and not intelligent design.
All of this means that wage inflation in the US is non-existent, unlike China, India, etc.
What will happen next? It’s already happening. The competitive landscape shifts, American companies innovate in order to make manufacturing more competitive in the US, manufacturing comes back to the US.
The wage inflation that you mention in China, etc. is probably the more important factor in bringing a small amount of manufacturing back to the the US. I read an example of that couple of years ago. A company moved some manufacturing from China or Mexico back to Ohio. That created a bunch of jobs paying $8 per hour.
Why would “American companies innovate in order to make manufacturing more competitive in the US”? They’re really global companies who have fiduciary responsibility to maximize profits, not patriots. If they’re going to innovate, it’s more profitable to improve their Asian or Mexican factors, where labor is still mostly cheaper.
The assumption that you make is that with higher marginal tax rates, investors would still take exactly the same risk with their capital (investing in new enterprise, etc.).
There is no doubt in my mind that Bill Gates would have accomplished the same type things if the net result of progressively higher taxes would be that right now his net-worth were a quarter of what it it is now.
And this is not an assumption. History bears it out. When wealth inequality were far far less than it is now, USA’s middle-class were doing relatively far better and much more shared in increased productivity.
And median net-worth by country prove it. Western countries with far less wealth inequality and progressively higher taxes have a far higher median net worth per capita.
Americans have been trained to think growth for growth’s sake is the cure all but growth does not mean squat when the gains pool in so few hands.
The other factor that you don’t seem to incorporate into your thinking is the natural rebalancing of the system.
But capitalism is not “natural”. It does not exist in nature. It is a man-made system made by man to serve man, and modern capitalism is regulated by government policy.
In capitalism’s man-made system regulated by rules, highly progressive taxes ARE an important form of “natural re-balancing” The unnatural form of re-balancing in the man-made system of Capitalism governed by rules is total collapse, civil wars and revolutions.
The Great Depression could have been avoided and was in no way shape or form “natural” when dealing with the man-made system of capitalism governed by rules.
The Housing bubble could have been avoided and was in no way shape or form “natural” when dealing with the man-made system of capitalism governed by rules.
If companies could bring their capital back to the US without double taxation they would and they would invest it to take advantage of cheap energy but the liberals would rather say no and not receive any taxes. Talk about cutting off your nose to spite your face.
But the benefits of free markets has lifted more people out of poverty than any other system in the history of the world….
I do not disagree with that at all, but “Free-markets” have been regulated by government policy in the entire modern history of the world. Right now USA is not doing a good job of it from the point of view of the majority of our people.
it’s also why I believe in evolution, and not intelligent design.
I believe in God and evolution because God created nature. But God did not directly create capitalism. Capitalism is not “natural” in the sense of nature. Capitalism is a man-made system designed to serve us, not vice-versa. Creative destruction is one thing, but in capitalism there is nothing “natural” about great depressions and economic national and global calamities.
Absent of actual nature and wars causing economic depressions and calamities, depressions, calamities and gross wealth inequalities are directly caused by poor regulation of capitalism - and in America’s case today, as it was before the Great Depression, this poor regulation has totally favored the rich over the rest of us. Because of that, we are heading for a calamity. In fact the middle-class is experiencing a calamity right now.
And there is nothing natural about that.
If companies could bring their capital back to the US without double taxation they would and they would invest it….
The problem is not lack of capital. The USA is flooded with capital, but almost all of it is pooled in too few hands. (The Supply) Much more capital needs to be in the masses hands. (The Demand)
Heck even Romney’s old vulture-capitalism company (Bain) came out with a report in Nov 2012 (a week after the election) telling it’s clients basically they had too much money to know what to do with.
And companies are sitting on hundreds of billions not investing squat comparatively in productive enterprises. They just churn hot-money trillions speculating on assets.
And hot-money trillions speculating on assets is mostly what caused the reason for the HBB and the calamity we face.
There is no doubt in my mind that Bill Gates would have accomplished the same type things if the net result of progressively higher taxes would be that right now his net-worth were a quarter of what it it is now.
the reason there’s no doubt in your mind is because you don’t have the slightest idea how the free market works.
When wealth inequality were far far less than it is now, USA’s middle-class were doing relatively far better and much more shared in increased productivity.
wealth doesn’t magically appear from nowhere. it takes time to build. when there’s more wealth, the disparity will be larger.
Western countries with far less wealth inequality and progressively higher taxes have a far higher median net worth per capita.
you’re just seeing a snapshot of wealth destruction in progress by the socialists.
Americans have been trained to think growth for growth’s sake is the cure all but growth does not mean squat when the gains pool in so few hands.
pure rubbish comrade. wealth can accomplish more good things when it’s concentrated. when one person can’t afford to build a factory, he finds others who have some wealth to risk for a share in the profits. they pool their wealth for their benefit, which ends up benefiting everyone. you continue to prove that you don’t understand the first thing about economics.
this is sure fun when you keep ignoring me. have you figured out what ‘demand’ is yet comrade? you’ve had a really long time to.
but “Free-markets” have been regulated by government policy in the entire modern history of the world.
much to the detriment of the world.
Right now USA is not doing a good job of it from the point of view of the majority of our people.
no kidding. the problem is free markets are no longer ‘free’ if they’re regulated. laws against polluters should made so that they are easily exposed to expensive lawsuits and then the pollution would mostly come to grinding halt. free markets do not mean being allowed to injure people.
Capitalism is not “natural” in the sense of nature.
yes it is. capitalism is the natural product of an evolving free market.
Creative destruction is one thing, but in capitalism there is nothing “natural” about great depressions and economic national and global calamities.
do you know what causes boom/bust cycles?
gross wealth inequalities are directly caused by poor regulation of capitalism
true. but wealth inequality is good. it’s a natural outcome of increasing prosperity.
this poor regulation has totally favored the rich over the rest of us.
still on the hate the rich mantra. do you hate yourself? you have more money than most people on the planet. they’d think you’re rich by their standards. you want them to burn you at the stake?
In fact the middle-class is experiencing a calamity right now.
thanks to the steady march into socialism.
And there is nothing natural about that.
it’s natural for socialism.
And companies are sitting on hundreds of billions not investing squat comparatively in productive enterprises.
who wants to risk their money in the hostile business environment that our dear leader has created?
And hot-money trillions speculating on assets is mostly what caused the reason for the HBB and the calamity we face.
yes, caused by the government you love so much.
When it comes to Bill Gates it’s important to remember that his industry was built on corporate welfare from its earliest days.
“You and Obama just want to avoid taking blame for anything…”
Anyone who disagrees with any of ABQDan’s opinions is obviously in league with Obama and Beelzebub, too.
Druckenmiller: Fed Is Making Rich Richer
Wednesday, 25 Sep 2013 08:20 AM
By Michelle Smith
Rich people should not be upset the Federal Reserve didn’t taper its quantitative easing (QE) last week. That means the Fed will shift more money from the poor and middle class to the wealthy, says Stanley Druckenmiller, founder of Duquesne Capital.
Many claimed to be disappointed when the Fed announced it would not taper its $85-billion per month bond-buying programs. But Druckenmiller told CNBC the news “is fantastic for every rich person.”
Part of the Fed’s QE strategy is to drive money out of U.S. bonds. Its approach of purchasing massive quantities of Treasurys drives down interest rates, making the debt an unattractive investment option for yield seekers. They, in turn, put their money into riskier assets.
“Who owns assets — the rich, the billionaires. You think Warren Buffett hates this stuff? You think I hate this stuff? I had a very good day yesterday,” Druckenmiller told CNBC after the Fed decision.
“This is the biggest redistribution of wealth from the middle class and the poor to the rich ever” he said.
…
That means the Fed will shift more money from the poor and middle class to the wealthy, says Stanley Druckenmiller, founder of Duquesne Capital.
This would be mostly fine if only we had the extremely progressive tax rates of the 50’s and those revenues were invested back into the USA in education, tax cuts for the middle-class, health-care, infrastructure, basic science research, social safety nets, worker training etc.
This is what irks me the most there is literally no funds for this anymore, and they want to import illegals and H1B? I’ll bet they miraculously find money to educate and train those “kids” infiltrating our borders.
worker training etc.
worker training etc…..there is literally no funds for this anymore,
Even if one does not like the ACA in total, here’s a good example of how $83.4 million of public money benefits America way more than would an $83.4 million tax cut for billionaires.
Obamacare addresses growing physician shortage
……(Doctor to be) Lescauskas, a Lithuanian who graduated from the Chicago College of Osteopathic Medicine, is one of four residents specializing in family medicine under the program at CHI, which began July 1. Another four residents are focused on obstetrics and gynecology and five on psychiatry.
The training, much of it at the Doris Ison Health Center in Cutler Bay, costs $1.95 million a year, a grant administered by the U.S. Department of Health and Human Services.
The money given to CHI is part of a package of $83.4 million in grants nationwide to train new primary-care doctors next year under the Teaching Health Center Program, which expands residency training for medical students in community-based settings. CHI and other organizations must apply for the grants every year.
“This is a huge step forward,” said Dr. Saint Anthony Amofah, chief medical officer at CHI. “The physician shortage is becoming more and more real — it’s worsening. So this becomes a pipeline. By doing this, they increase the chances that there will be more doctors staying in health centers in underserved areas. I thought it was genius, actually. It showed incredible vision.”
Read more here: http://www.bradenton.com/2014/07/21/5264109/obamacare-addresses-growing-physician.html#storylink=cpy
if only we had the extremely progressive tax rates of the 50’s
with so many deductions that nobody ever paid those high rates. today, the effective rate is even higher, comrade.
Also, our competitors also had high taxes which made our high taxes less of a burden on our competitiveness. Today the Asian countries would eat our lunch, in fact, our rates are already too high to compete.
Also, our competitors also had high taxes which made our high taxes less of a burden on our competitiveness.
no, our burden didn’t change in relation to someone else. our burden was ours and theirs was theirs. and increased competitiveness doesn’t hurt us, it spurs us on to innovate.
Today the Asian countries would eat our lunch, in fact, our rates are already too high to compete.
true.
This was my point to my left-leaning MIL (retired teacher who votes lock-step with teachers union…no matter what). The discussion was in the context of the Simpson-Bowles plan, and why it was so critical to get started on fixing the deficit early. With a deficit, you have money printing, with money printing, “stuff” starts to cost more money (assets and/or goods). This benefits those who own assets, and harms those who do not.
I was amazed that she was so adamantly opposed to Simpson-Bowles. Perhaps the fact that she didn’t read it had something to do with the opposition. Perhaps the fact that Obama didn’t push for it (and thus, Rachel Maddow didn’t push for it), had something to do with her opposition.
Perhaps the fact that she didn’t read it had something to do with the opposition. Perhaps the fact that Obama didn’t push for it (and thus, Rachel Maddow didn’t push for it), had something to do with her opposition.
If you were curious, you could have asked her.
I did.
Given that she’s a teacher, I tried to go through it with her, piece by piece.
I started by explaining that SS was only going to be collecting about 75% of what they needed to pay out by the time I was ready to collect. Her response was “you can’t believe everything you read”, with the NOT so subtle implication that I got the information from some right-wing media outlet. She gets her news from Maddow and the like, where they gloss over the issues. She had no response when I told her that the Social Security Administration was the source.
Her best response was that she liked Bernie Sanders’ solution (more taxes). She had no response when I described why I liked Simpson Bowles solution.
I then turned to Medicare–and described the problem; that each person pays in a small fraction of what they take out, and then went through piece by piece was Simpson Bowles was proposing.
She stopped responding to my e-mails as I was going through the detail. She doesn’t want to explore the problem in detail–
To preserve family peace, I didn’t press too hard as to why she didn’t like it, but the discussion I had with her told me that it was NOT because she read it and had logical opposition. She got her reasons from other sources.
You’re probably one of the few people who read the plan in much detail. I took a quick look at the Wikipedia entry on it and found some interesting things. The proposal was supported by Nancy Pelosi and Chsrin Van Hollen and opposed by Paul Ryan and Grover Norquist. So it’s a mistake to a think that it was supported by Republicans and opposed by Democrats.
I also found this:
On March 28, 2012, Representatives Jim Cooper (D-TN) and Steve LaTourette (R-OH) put a bill modeled on the plan, with, according to analyst Ezra Klein, “somewhat less in tax increases,” to a vote in the House where it was rejected 382 to 38. 22 Democrats and 16 Republicans supported the bill.
So it had little support from either side of politics.
The idea of such a commission was good one. Something like it will probably be necessary in the future. It would be good if the person who was supposed to represent the Democrats was not a former Morgan Stanley/private equity guy.
I then turned to Medicare–and described the problem; that each person pays in a small fraction of what they take out
Medicare and Soc Sec are not really huge “problems” to freak out about now, because if and when they really become a problem they will be fixed and changed in fundamental ways that will still deliver similar products but in different ways.
For example:
By the time Medicare is ready to “collapse”, the USA will probably have a public-option, maybe a form of single-payer and medical costs will have been much more contained. Why and how will medical costs be more contained? Because Medicare will be close to collapsing and the years leading up to that will see forced fundamental changes because of it. And some of this will involve a needed re-redistribution of wealth to fund a continued civilized society - in this case continued health-care.
Politically and economically, until Medicare really starts falling apart, not much will fundamentally change therefore the problems can’t and won’t be properly addressed at this time.
““This is the biggest redistribution of wealth from the middle class and the poor to the rich ever” he said.”
When a billionaire is saying this, it can no longer be denied.
I would say Yes, Whac-A-Bubble™, Fed is helping “poor” 1% of U.S. population by redistributing “wealth” of middle class to 1% of suckers…
check the stock market gains please…
Washington Post has a piece today titled “Two Americans were killed fighting with the Israel Defense Forces in Gaza Strip”
Dual citizenship and divided loyalties? No problem if you’re a Red Sea Pedestrian™.
If Americans were caught fighting for the Palestineans, they and their whole families would get wiped out in a drone strike or sent to Guantanamo Bay.
Because my Sky Wizard is better than your Sky Wizard.
More Sky Wizard Follies
Business Insider has a piece titled “Jewish Businesses In Paris Are Being Looted And Destroyed By Protesters Over Israel Gaza Offensive”
People get too emotional about their Sky Wizard
More Sky Wizard Follies
Breitbart piece linked from Drudge titled “Christian Holocaust Underway In Iraq, USA And World Look On”
At least this gives some balance to the Sky Wizard Follies, lest one think that only two of the three major Abrahamic belief systems get caught up in all this disagreement over Sky Wizardry.
People that believe in the sky wizard live longer happier lives. That is a proven fact not a belief.
Sky Wizard is supposed to be capitalized, Dannyboy.
And for the truly reverant, who dare not speak the name of, it should be written as S*y W****d.
Leviticus and Deuteronomy are my favorite Sky Wizard books.
I prefer believing in the spaghetti monster. Red wine goes well with spaghetti and marinara sauce.
Ezekiel and flying saucers….yes we been visited by other people who look like us….
marinara
Even the Pastafarians have schismed into a Marinara Sect and an Alfredo Sect. Lucikly they are too fat and happy to engage in sectarian violence.
How about the Pesto variations? They totally are at odds with the Marinaras.
This is true. Marinaras like their basil sane, no (pine) nuts. The Pestos seem to fit better with the Alfredo sect.
“Red wine goes well with spaghetti and marinara sauce.”
Never.
http://www.webmd.com/balance/features/spirituality-may-help-people-live-longer
Dannyboy spreads the Good News™.
My favorite part of Leviticus or Deuteronomy (can’t remember which one) is the law requiring that women go stay in a tent outside the village during their time of uncleanliness.
That would be a winning platform for a 2016 Perry/Huckabee ticket
BULL.
The fallacy of those studies is that there are people who cannot believe in something that cannot be detected. It’s like becoming an anarcho capitalist: once you went through the door, you cannot get back. And we get along just fine thank you. The other fallacy is the idea that atheists are all communists. Two words for that: Ayn Rand.
I developed my core metaphysical outlook at an early age. It’s based on primacy of existence. It’s Aristotelian. Religion is based on primacy of consciousness, and to claim you can consistently function on primacy of consciousness is easily refuted. If you say otherwise, please take a drive on a winding mountain road, close your eyes, and tell the road where it should turn.
To go against your core is to lie to yourself. Lying to yourself is not only absurd but can be seriously mentally unhealthy.
Everything in my everyday life is verifiable by the evidence of the senses. Including those things I have ad hoc (empirical evidence) experience with and have not verified myself. Anything else is BS. Francis Bacon’s words: To command nature, you have to obey.
Red wine also goes well with chocolate, which is all the evidence I need to prove that the Sp*****ti Mons**r is the one True God.
the law requiring that women go stay in a tent outside the village during their time of uncleanliness
You have a problem with women getting several days off from ALL household chores every month?
Information for males to use in their daily lives:
The illness-like symptoms of the menstrual cycle occur predominantly BEFORE the time of uncleanliness. That’s why it’s called PMS (premenstrual syndrome).
Glad to be of use,
AFWWYLM
+1 ROTFLMAO! True!!
BTW, I see Ms. Lean In this morning “adding value” to the boardroom.
‘Though shocking by nearly any standard, the murder was not unique. It was not even uncommon in pockets of rural India.’
‘In places where superstition and vigilantism overlap and small rumors can turn deadly, nearly 2,100 women accused of witchcraft have been killed between 2000 and 2012, according to crime records gathered by the Indian newspaper Mint. Others placed the number at 2,500; others higher still. “Like the proverbial tip of a very deep iceberg, available data hides much of the reality of a problem that is deeply ingrained in society,” according to New Delhi-based Partners for Law in Development. “It is only the most gruesome cases that are reported — most cases of witch-hunting go unreported and unrecorded.”
But they’re not Muslims, so no drones will be launched.
India? Isn’t that where they have the female Sky Wizard with all the extra arms?
and swastikas too…
http://www.religionfacts.com/hinduism/symbols/swastika.htm
It’s not a female. The multiple breasts are actually testicles. I think it is supposed to be bi, though.
I always knew you did not know the difference between your azz and a hole in the ground but I thought at least you knew the difference between breasts and testicles, while many figures have both, they are breasts not testicles:
http://www.asianart.com/articles/durga/index.html
I guess I was thinking of a different one, but I could have sworn there was like a Hindu equivalent.
http://www.philipharland.com/Blog/2009/09/30/ancient-greco-roman-deites-artemis-of-ephesus-1/
Wait, maybe they are the heads of men that she killed:
http://www.exoticindiaart.com/artimages/db09.jpg
nearly 2,100 women accused of witchcraft have been killed between 2000 and 2012 — most cases of witch-hunting go unreported and unrecorded.”
What’s up with the lousy way a lot of India treats their women? Not acceptable. They need to join the 20th Century.
(21st is too much to ask of them right now)
“Because my Sky Wizard is better than your Sky Wizard.”
Have you ever seen what happens when somebody talks bad about Allah?
“Have you ever seen what happens when somebody talks bad about Allah?”
Probably a bit shorter?
Have you dumped your junk bond funds yet?
July 21, 2014, 6:49 a.m. EDT
A junk-bond warning: Investors exit as yields rise
Investors pull most money from high-yield bond funds since last summer
By Ben Eisen, MarketWatch
NEW YORK (MarketWatch) — Weeks of falling junk bond prices have started to spook some bond investors, signalling that the record run for the riskiest part of corporate debt may be ending.
Bond investors have been piling into high-yield debt for years as they search for income in a low-rate environment, but yields had dropped so much that even the Federal Reserve, normally not one to comment on asset prices, has raised concerns .
“Those valuations are very, very lofty right now. We’re talking to clients about taking everything they own and paring back credit risk from the weakest part of the credit universe,” said Richard Sega, chief investment officer at investment manager Conning, which manages $92 billion in assets.
Investors may be taking all that advice to heart. In the week ended Wednesday, mutual funds and exchange-traded funds that invest in high yield bonds saw a total of $1.68 billion in redemptions, marking the largest outflow since August 2013, according to data from Lipper.
However, the selloff hasn’t extended to other parts of the bond market. While investors have been pulling money out of junk bonds, they actually increased exposure to investment-grade corporate debt.
…
So was Ukraine trying to cause the incident or just very stupid:
http://www.businessinsider.com/source-malaysia-flight-mh17-was-being-escorted-by-ukrainian-su-27-fighter-jets-2014-7
Hey Oxide get your lazy government co-workers over at NOAA to post the latest El Nino update, it was due hours ago.
May have to repost link but excerpt:
July 17, 2014 - By Wayne Lusvardi A majority of the Richmond City Council still wants to use eminent domain powers to to seize “underwater mortgages” even though the bond market refused to sell $34 million in municipal bonds for the city last year due to Richmond officials’ interest in the novel proposal. Prices are soaring in the blue-collar Bay Area suburb. The Zillow.com home price index is up 33.7 percent this past year in the city, reducing the number of homeowners who owe more on their loans than their homes are worth. And some homeowners have already gotten help. Twenty percent of all Richmond homes with underwater loans have had the principal on their loans reduced as of January 2013. -
http://calwatchdog.com/2014/07/17/richmond-pols-continue-posturing-on-underwater-mortgages/
If you like your adolescent diabetes, you can keep your adolescent diabetes
Linked from Google News - Waistlines of U.S. Kids Seem to Be Holding Steady, Study Finds
“Kids are not getting fatter,” said researcher Lyn Steffen, an associate professor of epidemiology at the University of Minnesota in Minneapolis. “Abdominal obesity has been stable over the years.”
Abdominal obesity fell significantly among children aged 2 to 5 years during that time frame, the study found. But one-third of kids aged 6 to 18 years remain abdominally obese — “too many,” Steffen said.
It was easy for me to break out of childhood obesity in the 70s when most kids my age were thin. But now there is no peer pressure for kids to break out.
Also these days you see in almost every high school cheerleading squad there is one fat girl in it. WTH?
If you think that’s bad, a few months ago I went to see the American Ballet Theatre dance Don Quixote. Some of the background matadors were outright chunky. I thought I was hallucinating. Maybe they weren’t exercising enough?
Al Jazeera reporting Israel has hit three hospitals in the Gaza war. So if Putin is responsible for shooting down an airliner due to weapons given to the rebels, is Obama responsible for the bombing of hospitals due to US weapons given to Israel?
“is Obama responsible”
He’s responsible for alot of things, some of which would require a time machine and God-like powers to control nature, as evidenced by the 29% of Louisiana Republicans who blame him for Hurricane Katrina
The people who pulled the triggers are partially responsible. But yes, Obama is also partially responsible for supplying some of the most advanced weapons on the planet to a country which regularly uses them against civilians.
Of course, you have to keep in mind the fact that the people who say that there’s not a dime’s worth of difference between the two parties have a point when it comes to foreign policy, especially as it regards Israel.
We are starting to see inflation, so does this mean that the Federal Reserve will actually raise interest rates? Inflation normally sends stocks upward, but if the inflation causes a reduction in spigot flow, then this time it should send stocks downward, right?
I’m pretty sure that banks don’t like inflation very much, since it reduces the value of future (fixed) interest payments.
Banks don’t like inflation, but governments and debtors do. I imagine there will be somewhat less hawkishness for a while if price inflation does tick upward.
So, the bank engineered inflation of the past 50 years actually weakened the banking system?
The Fed relies on inflation hence the almost 99% decline in the dollar since it was created in 1913. And the Fed is a bank creation.
now everyone has to finance major purchases thx to the printing press to bailout wall street constantly, its a joke.
That’s not inflation my friend. Learn the difference.
And whatever you do, stay out of debt and save every penny you can. You’re going to need them.
Region VIII checking in.
Your drone confirms your location.
The friendly, helpful DHS agent told me all I need to do is turn over all my weapons and get on the bus. He said they’ll have hot food, showers, beds, all the modern amenities once we get there. It sounds too good to be true, but nobody from the government ever lied to me before.
If they are from the government they are there to help you.
http://www.latimes.com/business/realestate/hot-property/la-fi-hotprop-barack-obama-20140721-story.html
POLITICO poll: Stay out of Ukraine, Middle East
“Amid deepening violence across Eastern Europe and the Middle East, Americans are recoiling from direct engagement overseas and oppose U.S. involvement in Afghanistan, Iraq, Syria and Ukraine by large margins, according to a POLITICO poll of 2014 battleground voters.
The survey provides a unique look at the foreign policy attitudes of voters who will decide the most competitive Senate and House races this fall. It shows an intensely skeptical view of American military intervention
http://www.politico.com/story/2014/07/politico-poll-ukraine-middle-east-109155.html?hp=l2
The stock market is falling up again. For instance, the DJIA has recently fallen to over 17,000.
July 21, 2014, 4:19 p.m. EDT
U.S. stocks end lower amid geopolitical tensions
EMC rallies on Elliott Management Corp stake news
By Barbara Kollmeyer and Anora Mahmudova, MarketWatch
Reuters
Israeli soldiers take position in the southern town of Sderot during infiltration by Palestinian militants on Monday.
NEW YORK (MarketWatch) — U.S. stocks closed lower on Monday as investors remained jittery amid escalating war in Gaza and possible tougher sanctions against Russia.
The death toll inside Gaza mounted over the weekend as Israel stepped up its ground war, while European policy makers debated tougher sanctions against Russia in the wake of the downing of a Malaysia Airlines passenger jet.
The S&P 500 (SPX -0.23%) closed 4.6 points, or 0.2%, lower at 1,973.63, with 9 of 10 sectors in the red. The Dow Jones Industrial Average (DJIA -0.28%) shed 48.45 points, or 0.3%, to 17,051.73. The Nasdaq Composite (COMP -0.17%) slipped by 7.44 points, or 0.2% at 4,424.70.
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