More transfers of wealth to reinforce the largest misallocation of capital in the history of the world.

Nemo - How was your date?

As to this, everything helps. Forgive my age but I sense in all of this, the writing is on the wall.

So does California give you the credit in the form of an IOU?
Nemo | Homepage | 02.22.09 - 12:30 am | #

The California tax package was the most regressive we've had in a long time. At least the 12 cent gas tax got removed. The new home tax deduction is a tax break for the "rich" as well; most people in CA don't pay much income tax as it is between the EIC and the child deductions.

we should get a tax credit for every purchase. Like a negative sales tax.

Ah I love it when pandering to the masses trumps basic economics.

Is there a legal or industry standard for a new home? I see homes that were built in 2006 and have yet to sell.

Barley --

Not a date; a family commitment. Traveling home tomorrow.

yogi:

Do you know if they are eligible for the tax credit? I'd imagine the credit is written so that its land/home and not just home.

The absolute entirety of every single proposal to date can be summarized in four words; "incur debt, encourage debt." 

Et tu, Europa?

NEW YORK, Feb 20 (<a href='http://uk.reuters.com/article/marketsNewsUS/idUKN2028553720090220"> Reuters) - European Central Bank member Lucas Papademos said on Friday that countries should strive to avoid nationalizing banks even though it may not always be possible as the financial crisis drags on.

Nationalizations should be avoided "to the maximum extent possible," he said after speaking on a panel at New York's Columbia University.

First time homebuyer has a unique definition. I think you only have to be out of the market 3 years.

OT: The music on SNL tonight proves just how f'n stupid (in the traditional sense of that word) the people in this country have become.

Comrade Bear (tj & the bear) writes:

Don't do that -- I have Anonymous filtered out and I like to read you stuff!

Geez, you just might be the only one -- thanks!

I just did an inventory of my "$10,000 friends," that is, friends who I would hand 10,000 with the expectation that it would be returned to me after three months' custody.

One has a full machine shop with functioning parts.

One has a collection of 40 different handguns and 20 long arms and a father with vietnam experience

One has a full ham radio setup, police scanner, land and house on the edge of town in the country (with first friend's machine shop tools).

One is an electrician.

This makes me feel a whole lot better.

As a life long democrat and Cal resident it pains me to say that our legilators might the dumbest pack of fools in any body in the US. I have been to many fund raising events for dems and have to admit that the most prominent group of donors are always the contractors -- big, small and everthing in between. If they don't give, they are not players. This is particulary true for IE and the central valley. I doubt that the republicans are much different, but they do not control the legilature.

I wonder when we will have our first suicide on CR?

FFDIC writes:
I wonder when we will have our first suicide on CR?

I want to believe this is not the real FFDIC but a handle-thief
Yet another reason to introduce registratio

1. We have always had a "surplus" population since the begining of the industrial age.
2. However, without a "surplus" population there are no "real" jobs.

Anonymous | 02.22.09 - 1:08 am | #

absolutely. moreover, many of those "real" jobs created by the "surplus" population in turn create even more "real" jobs, and so on, endlessly. things are far more interconnected and interdependent than a coterie of a few hundred thousand self-selected predatorial elite would like to believe. we managed to build an incredibly massive economy (false or not) ultimately amounting to little more than leveraged bets on the predictable behavior of the bottom rungs of society.

You should probably add: shift debt from one hand to the other.  But, above all else, don't write any debt off.
MLM | Homepage | 02.22.09 - 12:49 am | #

Exactly and that is what will keep us chained to the millstone.  Until we learn... AND control our aggressions.

I think the evidence is growing that you were wrong,
ShortCourage | 02.22.09 - 12:58 am | #

I don't think I'm wrong - they still want credit like crazy - cheap, plentiful and irresponsible credit. They just can't get it.

I was 'wrong' in that I didn't think we'd see this severe of a tightening this fast... I admit to that... but if somehow magically they turned the spigot back on - the public would be lined up with buckets ready.

The spigot isn't gonna turn on though and their cards have been snatched from their cold [economically] dead hands.

I see NO evidence of a 'moral' or 'philosophical' change in mindset toward thrift - none - just a realization that what once was is no more.

The SVP said gold stored by the Swiss National Bank in the United States should be repatriated and Switzerland should ban the sale of U.S. funds in the country to protect Swiss investors after the failure of U.S. regulators.
Anonymous | 02.22.09 - 12:54 am | #

They are desperate.  Because their political platform is married to the success of the banks.  If Swiss bank secrecy laws go the way of the dodo bird, their only appeal will be a nationalistic one which will make them far less powerful.

Thread music;
4 Non Blonds
Whats Up

YouTube -

I wonder when we will have our first suicide on CR?
FFDIC | 02.22.09 - 1:14 am | #

Never.

dryfly writes:
I don't think I'm wrong - they still want credit like crazy - cheap, plentiful and irresponsible credit. They just can't get it.

A small tweak - those who can still get credit are afraid to use it, those who would use credit aren't getting it

The usual story

The fact that it is on NEW houses is a travesty, utter and complete.

It ought to be limited to foreclosures.

Why on earth would you be building new houses in a state that is now losing population and had whole subdivisions barren and empty.

If targeted at foreclosures, you begin to put a floor under equity loss.

I can go buy a "new" foreclosure at a $10,000 discount anyway. There are thousands of homes that foreclosed before the owner ever occupied them.

This is a disaster...another one.

Third grade paper my wife is grading right now:

Q: Does having money always make people happy?
A: No because it mite change their life the way they don't want it. Some people like money like me. I love money. Money is my love.
Q: Suppose someone gave you a lot of money. How would it change your life?
A: It would change my life because it would make me happy. I would go to Toys R Us and buy the store.

It is our needs, cravings and wishes that make the world real and creates purpose.
Anonymous | 02.22.09 - 1:27 am | #

The Buddha says you're wrong.  And I think he's on to something.

My point is that human existence has no meaning or purpose by itself.

It is our needs, cravings and wishes that make the world real and creates purpose.
Anonymous | 02.22.09 - 1:27 am | #

can't disagree with you there. biologically, evolutionarily, argue from a social science or even a religious perspective if you feel so inclined, but in some manner or another we need other people as part and parcel to that purpose and meaningfulness. I would also have to agree that life is suffering, and desire is its ultimate root. I don't find these observations contradictory in the least.

dryfly,

My posts to you are not meant to be impolite...just a challenge to one of your premises.

You certainly always show class, and I appreciate it.

When women stop wearing their hair strait and mini skirts are en vogue again, we will have reached a bottom.

Their entire economy is married to the success of their banks.  The U.S. is playing serious hardball here, and the Swiss are desperate for anything that might balance the scales.  Unintended consequences have to be a possibility here.
MLM | Homepage | 02.22.09 - 1:30 am | #

Their entire economy is married to the banks but the middle/left wanted to move away from bank secrecy laws for many years.  Note that it was also the middle left that wanted to join the EU which would have lifted the bank secrecy laws right then.

However, the right (FTP and SVP) were adamantly opposed because their moneyed constituency (in the case of the SVP) were profiting greatly from a very independent Switzerland and primarily from the banks.  The farmers, there other base are mainly attracted to their nationalistic/racist stance.

Unintended consequences are getting just about inevitable, as the present U.S. moves cause significant outflows from two major banks that could be a systemic risk worldwide.  De facto, Swiss bank secrecy laws are dead IMO.  I will get interesting.

Zeitgeist usually isn't well articulated by the people who live it.
albrt | 02.22.09 - 1:41 am | #

Good point - me too. But if that is the case everywhere 'the numbers' should show it - savings going WAY over recent trend line - back to say 1980s levels or beyond and not just a small bump above 'net zero'. Show me the numbers and I'll be more likely to believe the anecdotal testimony.

dryfly,

I bet you'll see those (savings-rate) numbers in the next few years. Just think what unemployment will do. And also the realization by folks that their house and stock wealth is not coming back anytime soon. That fact has not been accepted by the majority of people yet.

People will save, just like the Japanese folks in that story I linked above.

I think that we have entered another phase in our evolution as a species. We have to adjust to a new reality in which reason and objectivity will be essential to our survival as a species. We cannot afford to follow the old ways- based on blind faith, religious type morality and self imposed limitations.

The real question is- how do we get the majority to be somewhat rational and objective?
Anonymous | 02.22.09 - 1:35 am | #

we also can't base a society on situational ethics, economic opportunism without regard to long-term or systematic consequences, and an absolute faith in the power of mathematics and rationality, especially when their assumptions contradict the reality that anyone can observe. we tried that in applying real-world economics "science" and look what it got us

The compromise will be for Swiss or EU citizens only?

dryfly | 02.22.09 - 1:48 am | #

The problem for them at this point is that the U.S. branch of UBS is essentially held hostage.  And that's big $$ on the line.  Either they throw their customers under the bus, or they lose more money than they can afford on their U.S. operations.  No good choices.

Sorry, I don't quite understand what compromise you mean.
RE | 02.22.09 - 1:52 am | #

They keep secrecy for EU & Swiss customers but as MLM suggests throw US customers under the bus.

The problem for them at this point is that the U.S. branch of UBS is essentially held hostage.  And that's big $$ on the line. 
MLM | Homepage | 02.22.09 - 1:53 am | #

It's not just the U.S.  The EU wants the abolition of the Swiss bank secrecy laws as well.  They immediately picked up the baton.

The perception by customers that Swiss bank secrecy laws are in danger will make a significant number pull out their money no matter where these customers reside, IMO.

Fixed that..

tax credits are meaningless if you have little income but loads of cash

The perception by customers that Swiss bank secrecy laws are in danger will make a significant number pull out their money no matter where these customers reside, IMO.
RE | 02.22.09 - 1:56 am | #

Sorry I wasn't clearer.  Agree that if they throw their U.S. customers under the bus, all the others will clearly see the writing on the wall.

Can't do that.  OECD guidelines want the abolition of Swiss bank secrecy laws and the Germans in particular want them gone, NOW!
RE | 02.22.09 - 1:58 am | #

Interesting.  Have to watch.

G'night all.

EDITORIAL; The Government and the Banks - NY Times
NYT Sunday Editorial
The Government and the Banks

They are mortal.

//By nature I am not a defeatist. The banking families are smarter and more ruthless then we will ever be. //

yogi,

Check out this version of Smoke on the Water...

Very cool...

Nostrovia,

should add that i do not mean those as personal questions, but as rhetorical questions in the abstract, for all to think about.
joe shmoe | 02.22.09 - 11:14 am | #

Very good points. I guess I meant in the more direct 'check in my hand' way, but my state is getting some stimulus money that should help a lot of people directly and indirectly.

If there were some way to manage and/or oversee our tax dollars better, I'd have no problem paying out much of my income. Some of the European countries looked like they were doing a good job, but this current unravelling has dented my faith in ponies.

Long waits, big reductions for homes not priced right in Whatcom Co. January was a slow month for local home sales, with drops in prices and volume continuing the trend from last year. Setting a price that's too high can really hurt the home seller, too. Gragg Miller of Coldwell Banker Miller-Arnason wanted to show his agents the importance of pricing a home to reflect current market conditions, so he did some research about what happens when a seller is forced to reduce the original price. He suspected that it would take longer to sell the home, but he was still surprised by how much. Looking at January sales, Miller split the number of homes sold into two categories: Homes sold where there was no price reduction and homes sold that had at least one price reduction. He factored out newly constructed homes, since those tend to be difficult to price correctly. For homes that were "priced right," the home sold at 95 percent of the list price, averaging 55 days on the market. The homes that needed at least one price reduction sold at an average of 80 percent of the list price, taking an average of 200 days to sell. The average price reduction was $68,000. In January, there were 28 homes that fell in the "priced right" category, while 44 homes had at least one price reduction. "It just shows that if you start off too high, it becomes very difficult once you start doing price reductions," said Miller, noting that there is sometimes a psychology that sets in where buyers will wait to see how low a price will drop. Miller did this research because he expects this year to be a very challenging in terms of figuring out the right price for a house, particularly in the high-end market, which has dropped off dramatically in recent months. "It is very difficult to figure out the value of anything above $500,000 right now," Miller said. "We don't have people moving into the area looking at that price range like we once did. It's also difficult to tell someone the price of a house might not be what they think it is, but more sellers are being flexible. They read the news and see what's happening in the market." The news about dropping home prices is having an impact nationally as well. Earlier this month Zillow.com came out with its Zillow Q4 Homeowner Confidence Survey, which found that 70 percent of people in the west region believe their own home lost value in 2008. According to Zillow, 90 percent of homes in the west region lost value in 2008. The disparity between perception and reality was much wider earlier in 2008. In trying to price a home correctly, Miller said the key is looking at the most recent sales and comparing similar homes. Six months - before the financial meltdown - won't work. It needs to be sales within the past 60 days. "Even with comparables, pricing a home is still more an art than a science," Miller said. "There are other factors, such as neighborhood and the price range, which also make a difference." He said so far in 2009 there has been an uptick in the number of people at open houses, but it hasn't translated into increased sales yet. So it appears there are people, looking for that right price. As we head further into 2009, we'll soon see what that right price is.

Now I know why they call it the Golden State..we're either pissed off or pissed on or both!
JK | 02.22.09 - 1:06 pm |

LOL!

What is the nature of a society that would compel it's citizens to lend money to it's lending institutions only to have the same institutions lend the money back to the citizens for a fee?

Kleptocracy? When it's compelled at the point of a gun it isn't lending. It's theft.

this is a test

I'm going to start a blog called "Houston, we don't have a problem". It is hard to read this blog knowing that the world is in so much trouble, and trying to reconcile it with the boom-time-as-usual world that is all around me. Huge retail, housing, and CRE projects continue to go up left and right. Shops and restaurants are packed. Roads are jammed with plenty of new vehicles. People are happily chattering about nothing while they spend spend spend. It makes me feel like I'm either incredibly over-informed, or crazy. But alienated either way.

Can somebody tell me WHY Houston is such an island of prosperity?

"People are happily chattering about nothing while they spend spend spend. It makes me feel like I'm either incredibly over-informed, or crazy. But alienated either way."

....that's the way we felt in the mid-90s - our first years becoming debt-free & "frugal". Since then to now frugality & self-sufficiency has become a life-style - the alienation, whining & hand-wringing is long past. We figured it was upon us 15+ years ago.

We figured it was upon us 15+ years ago.
Black Star Ranch | 02.22.09 - 9:27 am | #

Wow BSR - you were early. You must've felt a little 2nd guessing during some of the upturns?

.....I imagine it will be a short period before states start withholding monies normally sent to the FedGov.
Black Star Ranch | 02.22.09 - 9:38 am | #

Help me out here, BSR. What money do state governments send to the FedGov? My understanding is that the FedGov receives money primarily from individuals and corporations.

California recieves 0.78 for every dollar it sends to the federal govt. Some of the reddest 'tax-hatin' states like alabama,alaska and missisipi get 1.64,1.84 and 2.02 respectively. So its ok to beat up on cali 'liburals' but keep some perspective. Cali pays for some of the reddest states "conservative" way of life...

Clinton says U.S. and China are in the same economic boat
China is the world's biggest holder of U.S. treasuries and Clinton said continuing to invest in them was "a very smart decision" for two reasons.

Uh-Huh,
Anonymous | 02.22.09 - 5:05 am | #

WaPo had the story too. Frightfully candid assessment.

Some of the reddest 'tax-hatin' states like alabama,alaska and missisipi get 1.64,1.84 and 2.02 respectively. So its ok to beat up on cali 'liburals' but keep some perspective. Cali pays for some of the reddest states "conservative" way of life...
sartre | 02.22.09 - 10:03 am | #

you obviously havent't been to the south.

Let's call Santelli and get up a tea party to shut the spigot on the welfare queen states of Alaska, Alabama, Kentucky, Lousiana, and a few more.
joe shmoe | 02.22.09 - 10:12 am | #

Copy Sen Shelby on any & all correspondance.

BTW I lve in Minnesota and even w/ ag subsidies we fall in the 68-72 cents returned. 'Bama must be sucking on more then one tit.

OT: ING's rates tell a very sad story.

Savings account down to 1.85% APR. They are now updating the yield down almost every few weeks. You need to buy a 48 month CD to get a whopping 2% APR with a 6 month CD yielding 1.25%.

This tells me that we will continue to see yields drop off a cliff over the next 6 months and at least 2-4 years before recovery.

Outlook for pirates in 2009, from Pacificshipper:

you obviously havent't been to the south.
RockyR | 02.22.09 - 10:13 am | #

Wife's from southwest missouri does that count? The hipocrisy of it all boils over some time, but now its done...so lets continue bashing them liburals

...."What money do state governments send to the FedGov? My understanding is that the FedGov receives money primarily from individuals and corporations."

You are absolutely right - I'm wrong. I doubt individual companies might redirect Highway Funds, etc. to the state. I stand corrected.

I wasn't paying enough attention to what I was typing - nor thinking, obviously. We have no state income tax here, so some of the exercise isn't natural.