stability is coming to the low-end because of the FHA is giving out mortgage crack to stupid first time buyers. Developers and banks are laughing all the way to the bank, but what happens when the low-hanging fruit is consumed? Not to mention the inevitable defaults because FHA has near-zero credit standards...
I definitely see a pickup of activity and draw down of inventories.
I think it is an open question if this is a temporary phenomenon caused by the tax credit pulling forward demand to the beginning of the year combined with the foreclosure moratoriums preventing new inventory coming on market.
I am not convinced either way yet. If you look at all the houses with Notice of Trustee sales filed on them it sure seems like we are about to enter another leg down as soon as any amount of new distressed inventory come on market. Right now distressed inventory is the majority of sales but now are becoming the minority of inventory. But if the government keeps the giveaways going I guess it is possible to prevent this inventory from coming on market.
Buffet's estimate of inventory absorption depends on new household formation of 1.3 million per year... I would suggest that the depression will cut into that number too... Plenty of anecdotal evidence that college grads are making plans other than entering the job market... so that will slow it down some... but if the kids and their spouses are living with mom and dad, that doesnt count as a household formation... not to mention household destruction when a former household moves in with someone else... I dont think the housing inventory overhang will be gone in 2 years ....
AMF - agree that the great masses are financially ignorant... If we are truly heading into massive inflation, then the place to be is commodities and also money market fund interest rates will be rising along with interest rates in general.. bond prices will fall... Some stocks will rise - probably Exxon etc... but the market overall will probably be flat to down... I dont play currencies so I dont know how that will shake out - We dont have the Swiss Franc any more as the stalwart and I doubt if the Euro will hold up in inflation... I would rather have some gold and also there is an etf symbol GSG which represents commodities based on their consumption in the global economy ... I will be reducing my GNMA bond fund allocation and increasing my commodity allocation if the Fed shows signs that they are not going to hold rates down by buying an infinite supply of tbonds...
"Lincoln wasn't much less of an asshole." [Than Lee]
And Elliot Spitzer wasn't much less of an asshole than Bernie Madoff. I have no problem tearing down the myth of historical heroes. But I get disgusted hearing of 'noble' warriors like Lee or Rommel, just stuck on the wrong side through a fluke of history. Every Union soldier, despite a million caveats, can be said to have fought in part for a just cause. No Southern soldier can. Moral hazard can't be glossed over.
Vonbek - in spite of his cult following, I personally dont understand Buffet or his philosophy... Look at the grannie collection of companies they have assembled with cash from the insurance operations - what kind of strategy is that? Also he is heavy into things like drywall, carpet, furniture etc... which probably made sense when housing was hot, but he wasnt sharp enough to dump those companies at the top - unlike say, Blackrock, which IPO'ed right at the top of the craze... My opinion is that the smart money doesnt pay any attention to him... the market rally is in expectation that the administration spending will pull the economy out, but I think that is rather like squirting some charcoal lighter on a fire that doesnt want to start - you get a few flames which quickly die down and the fire sputters out anyway...
If the congress would take some measures such as eliminating the income tax, and eliminating transfer payments to able bodied adults, and eliminating the minimum wage - or something similar to cut business costs... then we would see a real resurgence in the economy...
If the poor want to stop being poor, the only thing they can do is get up and go to work in the morning... stop waiting for the fairy princess to show up with the gold... Letting them keep what they earn and cutting off their poverty stipend is the only way to motivate them.
Work, earn, plan, save, become financially independent - and it can be done on an aveage income...
Buffett got caught flat footed in this downturn and is only talking his book in order to avoid Berkshire shareholders from forcing him to liquidate holdings at current market values. He's a sophisticated investor who takes full advantage of government bailouts and uses exotic financial instruments.
His comments about household formation and housing adsorption are demographically indefensible and before touting "personal savings" he had best adjust for 401k and similar non-savings activity.
his positions must really be in trouble for him to resort to Wall Street happitalk.
Are Buffett's comments enough to pierce the bubble on Monday
(a) Buffett himself acknowledges making a number of really bad calls recently like ConocoPhillips or Wells Fargo
(b) With most institutional investors remaining on sidelines and much of the NYSE volume coming from Goldman Sachs, it is hard to believe that Buffett's comments will move the manipulated marked one way or the other (not that the market would not move for other reasons)
and in terms of warren, the b-shares have rebounded a good 800 bucks from their lows - BH will be fine. they know how to work a low-margin environment where the 'high-end' consumer has disappeared.
Yearly legal immigration to the US runs at about 1 million. Will people still want to come to the US during prolonged economic uncertinity? What about emigration by baby boomers in order to stretch their savings?
Buffett also seems to ignore exisiting home inventory.
yogi:
Damn right. Just like those Iraqi's fighting to keep their rape-rooms running... our American soldiers fought for a "just cause"; despite a million caveats.
Okay, it was damn snarky of me to open that box and now I'll just kind've backaway from whatever conversation comes from it...
It's just so darn easy making judgments 150 years away in a world that probably resembles little to ours... and with 150 years of spinning...
I remember the late 70's-early 80's and the mantra was all interest rates all the time, it ruled our lives.
Interest rates don't mean squat this go round, you get almost the same rate of return from your mattress, as you would having your money in the "safest" place, UST's.
UST's are akin to a lifeboat that can only carry so many passengers, and the more people on board, the more risk of capsizing...
I've seen similar "low end selling lot hotcakes" postings over on Seattle Bubble. I think this points to two things which are occurring. First, there are a lot of moron first time buyers who held off for a few months, but are now rushing to buy anything (agents are claiming multiple bids are common now). Second, there is incredible compression coming to the market which will insure these folks are underwater by next year, probably by quite a bit. Those $600k-$2m homes which are not selling at all, and those markets now have years of inventory, will eventually have to fall in price to find buyers. As they do, the lower end will have to fall even further to compensate. When that will happen is anyones guess, but with the FHA the only game in town eventually these people will want to fall into their loan brackets.
I wasn't trying to validate Buffett's investing philosophies. Personally I think he is the leader of a cult. His followers sure act like it. I was more referring to the msm types covering this story since Warren and the President are so 'close' and whether his lack of optimism will transfer to the market in general.
I've been getting 4.5% - 5% in GNMA bonds for years... and if this is the GD2 then that's the place to be.... mmf rates have been below 1% for some time now... GNMA bonds are as good as tbonds for risk... But if rates get out of hand then I'll flip into mmf's again and ride the wave.... With an asset allocation strategy you always wind up buying low and selling high, just not always at the pivot points - but hitting a pivot point is all luck anyway... Asset allocation will not save you from cliff diving however.... But I hope we will not have another big cliff dive in my lifetime...
One question I had about TARP repayment. Banks have to repay at current market valuation, right? So it benefits GS, since they have repaid to keep everyone else's repayments bases high, right? Also, if they are working hand-in-hand with the Fed, doesn't it benefit taxpayers that GS is keeping the market afloat?
And could we please stop calling it a "savings rate!" We are paying down debt. Nobody is saving anything. I.e. the paying-down-debt-rate is increasing sounds much more prudenct, and doesn't suggest that there is some pool of savings that will be later spent. Quite the contrary. The debt we are paying down is going away never to be spent again.
A rebound in housing without a rebound in industry? All those buyers have govt jobs? I dont think so... median housing price cant get too much over 3x median income or there is going to be a 'correction'
"It's just so darn easy making judgments 150 years away in a world that probably resembles little to ours... and with 150 years of spinning..."
Justifying behavior as "prisoner of one's context" makes a judgment also. The victors write history, the losers revise it to grab a headline. Sorry, I don't believe in redemption of moral hazard by gentlemanly behavior.
"An aye for an aye is the best we can expect out of the yes men."
Wow, that's quite good, AMF.
I imagine you as a Somalian pirate with an aye-patch.
Aye, aye, sir!
We went to the Seattle Peace Choir's rendition of Carmena Burana last night. I thought about memes as music, the movements as repetitive infections, the symphony as an observer pattern but maybe as visitor. The tenor solo was more focused on his piece than the audience and it seemed to be that good art must mean more to the artist than the audience. The crescendos as peak bandwidth and of course, the inevitable comparison to the opening scene of "Jackass, The Movie".
Is he talking his book a bit? Maybe, but, in his defense, this is the guy who:
sold a ton of FNM years before TSHTF
refused to buy tech in the 90s because he didn't understand it (a concept which would have helped quite a few)
referred to derivatives as 'WMDs' at least once in a public forum
has been correctly paranoid about the collapse of the greenback - a costly sentiment in '08, but one that still might happen
Of course, we haven't seen anything REALLY like this since the 30s - and Warren may be a bit of a young kid to really know how to play that environment.
Interesting Article on Perella Weinberg's Reaction to being Threatened by White House re: Chrysler In fact, let me just say, people have asked me who I represent. That’s a moving target. I can tell you for sure that I represent one less investor today than I represented yesterday. One of my clients was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under the threat that the full force of the White House Press Corps would destroy its reputation if it continued to fight. That’s how hard it is to stand on this side of the fence.
And could we please stop calling it a "savings rate!" We are paying down debt. Nobody is saving anything. I.e. the paying-down-debt-rate is increasing sounds much more prudent, and doesn't suggest that there is some pool of savings that will be later spent. Quite the contrary. The debt we are paying down is going away never to be spent again.
True that.
To put it differently - the consumers are paying for what was purchased in the past 5+ years. That borrow-and-spend binge essentially bought forward purchases that should have been made in the next 5 years or so.
All this demand that the government is now trying to stimulate has already happened. Now we need to figure out a way to pay for it.
With apologies to George Carlin: There's that nasty word "stabilization" again.
But stabilization is a nice word. Think of all the things it sounds like;
"Hey this economy is shit blazin!"
"Stay bullshit nation."
New "Snak Full Excretions." From Nabisco, nobody can cramdown just one!
With apologies to George Carlin: There's that nasty word "stabilization" again.
But stabilization is a nice word. Think of all the things it sounds like;
"Hey this economy is shit blazin!"
"Stay bullshit nation."
New "Snak Full Excretions." From Nabisco, nobody can cramdown just one!
Buffett follows a simple golden rule - discipline. Had financial "titans" follow the same rule, they wouldn't be in the mess they find themselves today.
They're almost the same graph.
Building debt can only be sustained by falling interest rates.
But savings are directly correlated to rates; as rates fall, savings fall.
Eventually debt outruns savings which support the debt.
Boom.
K-wave is real.
Most modern economists discount it (including CR?)
That's why their predictions have misfired so much, as compared to Mish or other commentators using K-wave as a component or guide in their analysis.
Arbitrage_Macht_Frei (profile) wrote on Sat, 5/2/2009 - 12:10 pm reply Ignore user
I tried that 1-800-JESUS number and there was a dishwasher from Oxnard on the other end.
Three cases confirmed. Two schools shut down for a week. Jesus isn't touching a pay phone in Oxnard these days.
Since gold is not used to settle transactions, the concept of devaluation does not really apply.
As an asset class, gold might do better than cash - then again, so far (since 2008) it has not
One nice thing about holding physical gold is that it can be passed along without the govt knowing about it thereby avoiding inheritance taxes... Also gold coins are incredibly beautiful - put a stack on the table and watch your guests get gold fever... But they earn no interest, and a significant amount is really heavy too - then you need a vault etc... So the gold etf is a good choice instead if you just want to play a trading move... but that is really just gambling unless you are prepared for a long holding period and working from long term charts...
May 2 (Bloomberg) -- U.S. Regulators may compel as many as 14 of the nation’s 19 largest banks to raise common equity based on financial stress tests due to be completed next week, said Paul Miller, an analyst at FBR Capital Markets Corp.
Miller, a former bank examiner, said his estimate assumes regulators will require banks to maintain tangible common equity, one of the most conservative measures of capital, equal to 4 percent of their risk-weighted assets over the next two years, to withstand losses in case the recession worsens. The tests, originally scheduled for release on May 4, are set to be disclosed after U.S. markets close on May 7, according to a government official who spoke on condition of anonymity
shadow inventory states:
"If the congress would take some measures such as eliminating the income tax, and eliminating transfer payments to able bodied adults, and eliminating the minimum wage - or something similar to cut business costs... then we would see a real resurgence in the economy...
If the poor want to stop being poor, the only thing they can do is get up and go to work in the morning... stop waiting for the fairy princess to show up with the gold... Letting them keep what they earn and cutting off their poverty stipend is the only way to motivate them."
Exactly which payments to able bodied adults and how much would that save?
What can people making $3/hr. buy that would help the eCONomy. Income taxes? Hey, someone has to pay the interest on those loans from China, don't they. Our gov't gives money only to the rich so spare me the class warfare. The poor have no lobbyists.
Outside of that I almost always agree with and appreciate your comments
"Devaluation relative to what?"
CPI.
Still holding too much of cash when the inflation kicks in by far is not the best idea. However within the next two years, the possibility of inflation is rather small. Fun starts once our economy does recover, : ) However, it all depends on government will to raise taxes or print money. If Gov takes the tax increase path to pay out debt & limits the gov. expenditure to a constant level, inflation could be avoided.
Well I'd say it has been hitting the fan for a while now! But we do transactions electronically now so no matter what you call it some kind of currency will probably stick around... The only question is what you can get with it... If I went out today and tried to buy something with a gold coin, I doubt if anyone would accept it...
Our rural county in Oregon is now in budget talks to figure out how to cut 30% (!!!) from its education budget.
100 teacher and staff layoffs and X number of additional closed days are necessary, besides adding an additional 10 students (!!!) per class...
State and local governments can't print money like the Feds. Retail is the part of the nightmare that Buffett sees, but there's worse to come in small government. This is inexorably becoming a disaster., and all talk of bottoming is just whistling past the graveyard.
May 2 (Bloomberg) -- Billionaire Warren Buffett, whose Berkshire Hathaway Inc. is the largest shareholder in Wells Fargo & Co., said the lender is a “fabulous” company.
“All banks aren’t alike by a long shot, and in our view Wells Fargo, among the large banks, has some advantages the others do not,” Buffett said today at Berkshire’s annual meeting in Omaha, Nebraska.
May 2 (Bloomberg) -- Billionaire investor Warren Buffett, the chairman and chief executive officer of Berkshire Hathaway Inc., said he’s seen no indication of recovery from the real estate slump that helped cause the U.S. recession.
“All banks aren’t alike by a long shot, and in our view Wells Fargo, among the large banks, has some advantages the others do not,” Buffett said
Yeah, advantages like massive exposure to California. You know, California, the place Buffett sold his personal beach house three years ago because prices were not justified by the fundamentals. Just like his use of derivatives. There's what he does and what he says.
Our rural county in Oregon is now in budget talks to figure out how to cut 30% (!!!) from its education budget.
Yup. State and local governments, especially local, are going to be the next shoe to drop. There's absolutely no way to penny-pinch around 20-30% budget cuts, with furloughs, etc.
Structural changes need to be implemented, but these guys are way in over their heads.
//Yeah, advantages like massive exposure to California. You know, California, the place Buffett sold his personal beach house three years ago because prices were not justified by the fundamentals. Just like his use of derivatives. There's what he does and what he says.//
Tegnost - I would say that the Democratic Party has made a political force of the poor, and they are an effective lobby. At least in rhetoric. As for giving money to the rich - there has certainly been plenty of that, especially now in bailout nation... but the whole economy of the poor now is govt checks, food stamps, medicaid, housing assistance - and drug trafficking - ... Before big welfare poor families stayed together and worked themselves out of poverty over time... today there are a lot more fatherless homes that depend on children to bring in income in the form of AFDC payments... And it's not like there is no work out there - 20 million illegals didnt come here for nothing - they found work at an open if illegal market... and the buyer and seller agreed on the terms...
This is probably way to complex a subject with too many nuances to be discussed in a forum like this. There are mountains of material available. That doesnt mean that anyone, including the politicians, the government, or the populace will do anything rational...
My approach is to define the result you want and then work backwards to where you are so you get a series of steps that will lead you to the result. Want no poverty? Then stop subsidizing it, and stop penalizing work. Actually you could make a philosophical case for somehow taxing poverty, because if you want less of something you tax it, and if you want more of something you dont tax it...
Nothing like reality to give delusional mercantile asians a kick in the behind
Joblessness Spurs Shift in Japan's Views on Poverty
Rising Unemployment Gives New Heft to Activist Makoto Yuasa's Campaign to Secure More Government Help for the Poor
MAY 2, 2009
By JOHN MURPHY
TOKYO -- For more than a decade, Makoto Yuasa's efforts to end poverty in Japan were ignored by many as the quixotic campaign of a left-wing radical.
But Japanese including Prime Minister Taro Aso are paying attention to the 40-year-old activist as the world's second-largest economy sinks into its worst recession since World War II, leaving an increasing number of people without work.
...
Mr. Yuasa's rise to fame symbolizes the sea change in Japanese attitudes toward poverty. Since the country emerged as an industrial power in the 1960s and 1970s, it has been proud of its image as a nation of middle-class people.
Many Japanese had little sympathy for the jobless and homeless, regarding their plight as stemming from laziness -- and an embarrassment to the country's profile as an industrial power.
....
Media images of homelessness and stories of unemployment also have struck a chord. Concerned about their own job security, many Japanese are seeing the homeless not as troubled individuals seeking handouts, but as victims of a failing economy and a government system that offered no safety nets.
"Something that was unimaginable is happening now," Mr. Yuasa says of the shift in public opinion. "This is the first time Japan has really been facing the problem of poverty and realizing how thin the glass is that we've been walking on."
Lucifer (profile) wrote on Sat, 5/2/2009 - 3:31 pm reply Ignore user WTF!! WTF???
Bloomberg and Marketwatch have different headlines for the same articles?
I suggest a roast bankster with a braised trophy wife and poached kids.. That should help the sauce market. The trophy wife might not have enough meat on the bones though..
//Buffett Sees No Sign of Recovery in Hoisin Market//
What is amazing is that even with all the govt spending on programs for the poor, there are still charities and soup kitchens... strong evidence that govt programs do not work...
ShadowInventory (profile) wrote:
I've been getting 4.5% - 5% in GNMA bonds for years
I've been riding GNMAs myself for a while, but last weeks interest rate spike in the 10yr has me spooked. I really expected intermediate rates to be stagnant at least through the 2nd quarter. Bernanke clearly controls nothing in the Treasury market.
The reason is very simple.. Government programs only give enough to keep people off the street. If you gave them enough to live a lower middle class lifestyle, it would be different.
Treasury Department data shows that investors in China have sharply curtailed their purchases of bonds in January and February. Representative Mark Kirk, a member of the House Appropriations Committee and co-chair of a group of lawmakers promoting relations with Beijing, said China had “very legitimate” concerns about its investments.
“It would appear, quietly and with deference and politeness, that China has canceled America’s credit card,” Kirk told the Committee of 100, a Chinese-American group. “I’m not sure too many people on Capitol Hill realize that this is now happening,” he said.
Kirk was alarmed at how much debt was being bought by the US Federal Reserve due to absence of foreign investors. “There will come a time where the lack of Chinese participation may have a significant impact,” Kirk said.
What is amazing is that even with all the govt spending on programs for the poor, there are still charities and soup kitchens... strong evidence that govt programs do not work...
CPI is not perfect, true. However, it's reasonably useful in the medium run time frame. It's useful because it compares similar basket of goods and those goods have similar characteristics in the short (!) period of time.
The flat or dropping CPI this year is a good indicator that deflation is real. (CPI might be far from ideal in judging the extend of deflation, however there is no question that general prices are falling.)
The reason is very simple.. Government programs only give enough to keep people off the street. If you gave them enough to live a lower middle class lifestyle, it would be different.
Be careful Lucifer - Nixon proposed that in the late 60s [negative income tax]... look where it got him. Hmmmmm.
Falling prices - some of our regular restaurants have changed their menus - now they have some 'value meals' which are lower price - sort of like letting everyone order from the 'senior menu' ... And at the WB lovefest today the DQ suit was touting a DQ value meal... At the burger joints you can now get the equivalent of a 'slider' for a buck...
Stay tuned for continued pain ( perhaps stagflation ) in America albeit the happy face USA mainstream media shills and Obama’s stellar economic team ( whose #1 priority is bailing out banking oligarchs ) will do their best to try and gloss over this with alot of lipstick i.e. with the Fed already on the hook for about $10 Trillion dollars ( about 10x over what it's commitment should be ) !
Funny thing is, my spending pattern hasn't changed a bit. In fact, if anything, I am more inclined to spend since restaurants are now easier to get in without a wait and vacations are cheaper!
Actually, taxing poverty used to be standard procedure; the nobles had to pay little or nothing, the serf's job being to keep the nobles adequately fed and housed.
Serfs had to work for the lord, give him a pig or whatever when the head of family died, and other customary duties depending on the area.
Look at the efforts made after the Black Plague to keep 'em in their place and underpaid.
Didn't work.
Many if not most of those getting charity/handouts are also working under the table. But neither are enough to live decently, so they do both.
A good case can be made that most of the wealthy are macro-parasites. Not all of course.
And this is ignoring the present example of fraudulent banksters.
'"This is the first time Japan has really been facing the problem of poverty and realizing how thin the glass is that we've been walking on."'
A powerful metaphor. Beneath the glass sidewalk, beneath the soles of your shoes, you can see the poor. You can sympathize, even empathize, but you will be safely separated from them. A literally higher being. But if the glass breaks you will fall down and be among them.
That's the dilema - if you have no restraints on capitalism, everyone winds up working for the Rockefellers, too much restraint and everyone is up at the public trough... the trick is to have enough law to catch the cheaters without impeding the extra hard workers...
Yeah, Chili's has steak fajitas which I like, but is too much to eat, so I would take the rest home and half the time forget to eat it. Now they have a small order!! Perfect for me if not their profits.
And no, I haven't changed my spending habits at all. Course I never did do stuff like buy 1000 dollar purses. I don't see the point. Just bought flats of marigolds and mariyellows and impatiens. Will set out in an interesting pattern over the septic tank, which presently is pretty bare.. Don't know why they put in in the front like that, with not enuf dirt over it.
If you have transparency in the system, it works quite well. Laws can be broken and circumvented. Transparency is much harder to override.. but that is why we have an opaque system!
Soros gave a mostly positive review of the President Barack Obama’s administration. “He’s done very well in every area, except in dealing with the recapitalization of the banks and the restructuring of the mortgage market.
Soros said the U.S. housing market hasn’t bottomed, even as transactions in states such as California have increased.
‘Zombie’ Banks
Soros said the banking system is “seriously under water” with banks on “life support.”
“They are weighed down by a lot of bad assets, which are still declining in value,” he said in the interview in his New York office. “The amount is difficult to estimate, but I think it’s in the region of maybe a trillion-and-a-half dollars.”
Soros said the change to fair-value accounting rules will keep troubled banks in business, stalling a U.S. recovery.
“This is part of the muddling-through scenario where we are going to keep zombie banks alive,” Soros said. “It’s going to sap the energies of the economy.”
Bank Nationalization
The “bugaboo of nationalizing banks,” which the Obama administration wants to avoid, means “we are nationalizing only one side of the balance sheet,” Soros said. “We gradually take over the deficits on the balance sheet. But we aren’t actually going to benefit from the banks recovering.”
When the time is right.. People are still too self-righteous and delusional. Some more reality should help them see the truth.. or break their bones- either way.
//Could very well be right. Say with a name like yours maybe you should run for office?//
"if you have no restraints on capitalism, everyone winds up working for the Rockefellers, too much restraint and everyone is up at the public trough... the trick is to have enough law to catch the cheaters without impeding the extra hard workers..."
Add to that automated factories and robots and things are about to get real interesting...
I grew up in Coral Gables in a house built c. 1935. The septic tank was made of a material resembling thick tar paper. I remember when my folks had it torn out in the mid-60s. It was in the front yard, too.
Will set out in an interesting pattern over the septic tank, which presently is pretty bare.. Don't know why they put in in the front like that, with not enuf dirt over it.
Bombeck's Law* must not apply in Florida...
.
.
.
.
* Bombeck's Law - The grass is always greener over the septic tank.
And that is why we should pay everyone to consume.. job or no job.. you must spend your USCCE.. read my previous post to get the meaning of that acronym.
//Add to that automated factories and robots and things are about to get real interesting...//
Well I really think we are in a transition period with automation... If we had really smart robots, there would be no work... so we would have to adjust our system to give everyone a living allowance... I'm not sure that would be a good thing - it would require quite an adjustment in psyche...
But we are not at that point yet. There is physical work that must be done and able bodied people must be motivated to do it. Wages and fear of starvation are the 2 motivating factors - fear and greed. The more govt interferes with the marketplace the more distorted the economy gets, with the inevitable crash...
Automation takes away drudge jobs but creates higher level jobs - programming, robot maintenance etc.. So the worker should be encouraged to grow with the technology, train themselves for a better higher paying job...
We just had it pumped; doesn't need it very often; first time in 12 years at least. And i don't think they had to unbury the whole thing. The septic tank guy was really well educated, had an interesting discussion with the hub and makes a lot of money.
Cheating is part of the Great Market. Like bluffing in poker or Scrabble. But it can get out of hand, and it obviously has. Charity and some socialism are part of the Great Market too. Ayn Rand wasn't equipped to see that. I remember the first time my son realized I was bluffing in Scrabble. He was shocked, shocked at such a thing. But it's part of the rules sez I!!
Also the thing about the gift being bare is literally true. But even a bare gov't handout is better than nothing when desperately needed.
In poor neighborhoods there is a tipping point when all the wise/good/upwardly mobile have left. Then they turn from poor to slums, quite a different thing.
Liz - well we tried public housing - we tried direct checks - we tried free cheese - and I think what we got from all the free stuff was that people on the margin decided to take the freebies and stop trying to work up... So if we do have to support those at the bottom, it has to be less support than they could make if they worked...
Some people aren't smart enough to do a "higher paying" job.
I personally could never program. No matter how much you trained me, I would never
be very good, and I would hate every single second of it.
And the grass is a bit greener over the drainage fields, but not over the septic tank itself, which as far as I can see is a concrete box. I guess they kept it high so it wouldn't float out of
the ground.
That is why we have to start creating that system now.. initially it will only make sure that nobody has anything worser than a lower middle class lifestyle.
Plus we might want to start on a small scale and debug it, before we reach a production version.
Samdog good point although Soros was very clear with repeated points ( the recap article misses quite a bit ) that Team O has not done well at all with recapitalization of the banks and the restructuring of the mortgage market so The Triumph of the Banking Oligarchs continues at huge taxpayer expense.
I still think this could be turn out to be Obama's #1 nemesis.
Give them enough so that they do not have to work and still consume at moderate levels.. that way jobs where people work can pay more.. and there is an incentive to move up.
//So if we do have to support those at the bottom, it has to be less support than they could make if they worked...//
There is a Heinlein novel, which I can't remember the name of, where everybody got a subsidy--everybody, for the robot etc reasons, but you could work too if you wanted to and most everybody did want to. I think that part of the problem with welfare is the social disgust you are held in.
that said my least grateful clients were the ones I charged the least--they didn't appreciate my advise.
Also there are a lot of people who cant be lawyers, including about 50% of the people who pass the bar... I much prefer programming... So there we have it - we have each followed our muse and created the highest result - a perfect example of the market...
I guess they kept it high so it wouldn't float out of the ground.
Bingo - like coffins in New Orleans.
BTW up here on the tundra they bury them REAL DEEP so they don't freeze up in a cold snap... that happened to my BIL on one almost snowless but MF cold winter in central Minnesota... they went two weeks where they couldn't use their toilets because the septic system was frozen solid [improvised piss buckets]... then in spring they had to dig up the drain field to replace broken pipes - it was completely shattered. The next system they put in they dug it deeper, farther below typical frost line...
Shadow--Why do you have to make it clear that the people who receive the subsidy are inferior? This gift is the barest of the bare.
The flatter the societal pyramid, the happier everybody is.
The desire to acquire all the everything in the world is a Darwinian sickness, rewarded--until it isn't. A certain amount of accumulation is good for people. The bag ladies with the most stuff in their supermkt carts are supposedly the mentally healthiest. It does not follow that there isn't some limit to accumulation and after that the accumulation is unhealthy.
Not zombie banks, vampire banks - keeping them alive is going to suck the life out of the real economy - not an original observation, but one that bears repeating...
'United States Citizen Consumption Entitlement' (USCCE)
Basic Rules
1] Everyone gets the basic amount, no adjustments. (this will keep it reasonably high)
2] You must spend the amount within that calendar year + 3 weeks. No carry overs allowed. 12 monthly or 24 biweekly deposits on an ATM card.. your choice.
3] You cannot use that money to pay any debt nor can you invest that money. (Use previously unemployed IRS agents to make sure that people spend).
and
4] What you make above and beyond that is yours to use/ blow/ save/ speculate as you choose. What you make above the basic amount will not affect the basic amount.
5] Single payer comprehensive healthcare is a must for making this system work.
I read in Sparta, the food was not only minimal, it was disgusting. Only it was rich
Spartans that had to live that way, as well as the poor ones. Of course there were very few actual Spartans; most were heliots.
That's nice. As long as he enjoys his burger and coke, see's candy, and the occasional bridge game.
CR sorry to hijack a comment box, but this was censored on the baseline scenario blog (at least as of 1:31 PM pst). A response to their comment competition, which many here might enjoy. Page not found « The Baseline Scenario
Ok, let's review. Simon worked (works?) at the IMF in a very influential position. He posts a paper put out by the IMF which details a leetle corner of international fraud. This IMF -- doesn't it have a reputation, together with the World Bank and other affiliates, of ruining entire countries? So before we begin... is this just PR? Just a little spin to make us think the IMF is on it? We shouldn't be so jaded -- our fearless leader Hank Paulson is our chief representative over there now. He did not enable one of the biggest thefts in the history of the world, so we should not suspect his activities with at this juncture.
As one get into the paper, one stops and notices the first bit of evidence they present: A report by the "Caribbean Policy Research Intitute." (9A) Here's the link:
Notice: The author(s) are not named; The .pdf has been professionally stripped of any metadata that indicates the creator or anything else; CPRI is located in the "Guango Tree House"
In little tiny letters at the bottom of the web page, you can see who funds the "independent" think tank:
International Development and Research Centre (IDRC) | Canada Fund (from High Commission) | United States Embassy, Office of Public Affairs | The World Bank | Super Plus Food Stores | Jamaica Money Market Brokers | Cobb Family Foundation |
See that last one? Here's Sue Cobb. Council of American Ambassadors > Members > Sue McCourt Cobb Beyond reproach -- she served under Jeb Bush as CEO of the Florida Lottery, and has even given freely of herself to help Iceland (before it died?). She founded the "Public Finance Department of the Greenberg-Traurig law firm" (You know, Jack Abramoff, and stuff).
Btw, why does Capri have two or more websites? This is the first one that comes up in Google and doesn't have any contact info for the think tank at all. Only if you click on their "project" tab do you see the people affiliated with them:
Doesn't it just look like a bunch of spies hiding in plain site? They even have "country specialists."
Back to the paper we were talking about. The first person whose name appears on it is Ana Carvajal. Is this her?: Ana Carvajal - LinkedIn
From the American University business school to a European telecom company based in Virginia to owner of a company that supposedly imports fish from central and south america? Um. If this is her, it's no wonder our spies are getting arrested and killed around the world on a weekly basis. Something is seriously screwed up, and it might have something to do with... hubris? Greed? (Last aside: The Ana featured in LinkedIn attended the Kogut School. Kogut was CEO of the Charles E. Smith companies. Charles, despite having been one of the largest landlords and most well connected background players in the world, has not a word written about him in Wikipedia. Curious, no? Archstone-Smith, Vornado... largest property owner in the Capitol and surrounding area. Can't even find a proper bio on him on the internet).
In short, Simon presents a paper written by anonymous persons at an "independent" "think tank" run by people associated with the IMF, supported by funds from the Canadian and US government, and the ex head of the Florida Lottery / founder of the public finance department at Jack Abramoff's law orifice.
What does the failure to shut down schemes imply about the prospects for normal life? We're doomed until the pitchforks come out.
Is there a better to prevent major crises like these? Yeah, how bout we take all the money away from rotten people and use it keep things honest? How bout instead of trying so hard to look like we care about changing the world for the better, we actually do it? If you're sitting up in the clouds at 40,000 feet, pulling very long strings down here on the earth, you still have people you care about (one would hope) walking around down here who might get hurt when economy comes crashing down around them. So might you.
I recall Milton Friedman proposing the displacement of various subsidies with a 'negative income tax' - but we were too caught up in phase I price controls and Southeast Asia to pay attention at the time.
for 8 years we were able to sustain a myth- rising profits as percentage of GDP because of falling wages and consumption sustained through debt.
Take increasing debt out of the the equation and now you are stuck between a rock and a hard place. Either increase wages (the share of national income) have to rise to sustain consumption which will cause corporate profits to decline and in turn stock prices or keep the pressure on wages and see consumption collapse and in turn ultimately have stock prices decline. Never did figure out how corporate profits could keep growing at double digit rates with nominal GDP in single digits. While possible for a short period hardly something that is sustainable over the long term.
"And it's not like there is no work out there - 20 million illegals didnt come here for nothing - they found work at an open if illegal market... and the buyer and seller agreed on the terms..."
I saw Traurig once defeated by a sobbing lady in a zoning hearing (the lady should have gotten an accademy award). Zoning was Traurig's expertise and he was representing Arvida, which was very big at the time. The lady started quietly enough, broke into tears, and then finished strong, and they voted Arvida down. But I'm sure it was appealed and reversed, but was fun to watch and at least she drove the Corp crazy for a while and cost them money.
Rumor had it about payoffs, but I never heard any basis for that in reality.
"Negative Income Tax' sounds like taking money from peter to subsidise paul.
USCCE sounds much better.. It has the Words "United States", "Citizen", "Consumption", "Entitlement" and it supports all business... What is not to like!
You could also have the US Flag and Emblem on the government ATM Card.. that should satisfy the idiots
I think Ben or Timmy's signature on the card is a bad idea though..
I recall Milton Friedman proposing the displacement of various subsidies with a 'negative income tax' - but we were too caught up in phase I price controls and Southeast Asia to pay attention at the rime.
That was the Milton Friedman 'Radical Commie'... as he would certainly be called today.
Yes - I remember my father describing the plan to me back then... made perfect sense but then my father was rather progressive and would be considered a 'leftie' if he was still alive. When he wasn't plotting to over throw capitalism he was running factories and starting businesses - like Friedman I'm sure he was really just a 'mole'.
Yes - I remember my father describing the plan [negative income tax] to me back then... made perfect sense but then my father was rather progressive and would be considered a 'leftie' if he was still alive.
My dad was a right as they come and he also approved. His point was that it was cheaper than any form of government safety net and essentially left charity up to charitable organizations and not the state. He also mentioned it would never happen as it would result in smaller government.
So there is this TV program on how Russians are dealing with financial crisis. They have been bailing out their "titans' too, however they are getting a board seat with managing rights & an equity stake with absolutely each monetary distribution. Their fin. minister said: "we aren't running a f. charity in here."
I wonder now, who is running bailouts more efficiently, us or them?
We would, if it wouldn't be about unions but would be about taxpayers money.
p.s. got to love Jap TV, the covered eyewitness documentaries on crisis in Japan, China & now Russia. They usually follow some private business manager on his quest to get funding while describing situation. They also take interviews with everyone in proximity of that manager starting from Officials and ending with production line workers. .
We have a negative income tax. It's called the Earned Income Tax Credit. We also have a universal living allowance. It's called the Standard Deduction... Of course both of these things imply that you are working...
Well it looks like a hornet's nest at this point. I dont claim to have the 'right' answer... maybe what we are doing now is the best thing... maybe not... When and where I grew up there were no homeless other than a few hoboes who came through on the trains.. nobody was rich, nobody was poor, nobody was hungry, everyone worked at physical jobs for the most part - I think there might have been a lawyer or 2, a doctor or 2, a banker or 2, but mostly everyone was farmers or mechanics or had other physical jobs... We dont live in that world any more, and if we cant come up with a way to manage ourselves then we will just have to deal with whatever happens...
Lucifer, really I think you've put your finger on it - the name wanted work, didn't it?
Actually, Friedman paid close attention to incentives - both positive and negative. He made a number of speeches on the subject, but it seems never to have found the right sponsorship. Or it had the right opponents.
My dad was a right as they come and he also approved. His point was that it was cheaper than any form of government safety net and essentially left charity up to charitable organizations and not the state. He also mentioned it would never happen as it would result in smaller government.
My father really was a leftie in many respects and came to the same conclusion from the other end - like many lefties of his day he was as paranoid of excessive gov't as any right winger. That is a sword that truly can cut either way - as the recent Bush admin should have shown to lefties had they been paying attention.
The other reason neg income tax was 'better' was it was easily executable and much tougher to game than multiple conflicting state systems.
Any time lefties and righties agree you can be certain the established order won't approve. It will remain a dead issue I'm sure.
I still don't know why people, even theoretically smart ones, keep saying that we are in a 'recession.' This is not a 'recession' -- this is a bursting of a bubble and reset at the, new 'non-bubble' level.
As much as the TPTB would like to re-inflate here in the US, for all the reasons economists (and The Economist) has mentioned, I doubt that they can make it happen.
Unless we invent some new stuff that everyone's gotta have, and that everyone here can participate (gainfully) in making, I think we've got a long haul at the 'new' level.
Buffet owns See's Candies, though, so when folks want to soothe their feeling via chocolate, he's got a %. Good union workforce, solid product. Yum.
Oh, forgot to mention it on Chrysler threads. The UAW only gets one board seat. It seems to me since they are actually the ones with the most at stake, they should get at least a couple.
The UAW can't run anything with only one seat, and one seat isn't even really a figleaf. I'm not sure given the mental training they get even getting the whole board would do anything, but I
would prefer that they at least get a figleaf. So we could blame them if necessary!!
Shadow
Sorry for the delay, not at thecomputer too much today. I found a chart on wikipedia that supports some of your argument. Bill Clinton (famous Dem.) rearranged AFDC into TANF(Temporary Aid to Needy Families) in 1997. At the time there were 12,000,000 plus recipients, 11% poverty rate, and 6%(roughly) unemployment. By 2006 that number changed to a little less than 4,000,000 recipients(a huge decline!)roughly 10% poverty and sub 5% unemployment. Food stamps are also only available for 3 months now, then you're on your own. Putting a cut-off on those programs doesn't seem to have had many ill effects as far as I can see
Wiki Temporary Aid to Needy Families for some nice charts and background
Again, totally agree with you. I paid down all of my debt early (lucky timing of home sale), but savings... well, it is going to be a long road up for me and others. This is especially true considering the likely real UI rate, which I would estimate here in the SF Bay Area is at least 20% (includes all of the independent contractors and consultants who are either not working at all, or just barely working). My own healthcare COBRA cost for me and the kid is a little over 1k month -- so much for savings...
Why should I ignore you? You made some interesting points. If I felt you were stupid or not worth responding to, THEN I would ignore you. I ignore Jas and Michael nearly always.
I used to deal with Greenberg a lot when I worked for Chicago Title many many many years ago. They were all very smart and worked like dogs, to the point of craziness. I had one interview with them. I didn't want to work that hard and they didn't want me.
Traurig is dead now. Most if not all of the ones I worked with have left for one reason or the other. G, T is much bigger than just A.
au contraire, billy, i would argue that the things of which you speak are so transparent and obvious as to need no illumination. however, 50 million americans voted for W in 2004 (along with a similar amount for GOP reps around the time) and BHO thinks that Geithner is doing a heckuva job and that transparency stops at the fed's doors. so what? the real question is to whether or not we deserve better leadership.
as is the business model of just about every large "diversified" law firm, which had the same approach to growth and leverage as your average large homebuilder.
Yeah, they got a decent percentage, but I understand they only got one seat, don't know why.
Maybe they understand they really don't want responsibility?
I meant the person, not the firm. Don't know about the firm. Have an acquaintance at Holland & Knight, he still has a job. Real estate partner. Haven't talked to him recently.
Doesn't the UAW get 55% ownership? If so, can't they stack the Chrysler board as they see fit?
I believe the UAW pension fund thingie - whatever they call it - actually OWNS the stock... in lieu of the payments to it Chrysler was supposed to make. The board that runs the fund is somewhat isolated from the actual rank-and-file... some sort of fiduciary function I'm not sure anyone, myself included, understands.
It will get interesting when their own retirement fund tells the rank and file to stuff it come next contract negotiation. Or they blow up for good. Real interesting.
yes, liz, i got that. and my point is that most of the firms in the "Vault 50" will be just about as dead as their namesake founding partners in the very near future.
guess who actually eats at those $30 entree restaurants that employ dozens, directly and indirectly, buys those high-margin seats at entertainment events, buys those 50K+ cars and 500K+ houses... all of the schadenfreude at seeing those biglaw jobs evaporate has obscured the fact that those hated suits supplied a huge portion of the disposable income that creates hundreds of thousands of jobs.
dryfly (profile) wrote on Sat, 5/2/2009 - 2:07 pm
It will get interesting when their own retirement fund tells the rank and file to stuff it come next contract negotiation. Or they blow up for good. Real interesting.
it would be nice to get another crack at TZA under 28... obviously, we'll get a big rally as the shorts pile on in attempts to short the BAC/C 'stress test' news. The comedown after the crack high will be juicy.
Most of the little guys/als like me seem still be hanging around. I can survive on practically nothing.
I suppose the bigs are salivating over restructuring all those empty towers they helped create; but I don't think there is any there there to pay them for it.
ShadowInventory says - "When and where I grew up there were no homeless other than a few hoboes who came through on the trains.. nobody was rich, nobody was poor, nobody was hungry, everyone worked at physical jobs for the most part - I think there might have been a lawyer or 2, a doctor or 2, a banker or 2, but mostly everyone was farmers or mechanics or had other physical jobs... We dont live in that world any more, and if we cant come up with a way to manage ourselves then we will just have to deal with whatever happens..."
Agreed. And most folks had family somewhere rural with a farm, or at least a garden, to go help and get help from... I'm very worried that we are going to see lots of folks starving in about a year, unless there is some serious organized program to keep people (from the former middle class as well as current working class and homeless) fed.
The board that runs the fund is somewhat isolated from the actual rank-and-file..
For ERISA plans, the fiduciary duty of the plan administrator is to the fund itself and not the members. God help a beneficiary if she tries to sue the plan for any reason whatsoever. Hell, even if an administrator grossly screws up your claims (e.g. wrongful denial) and you die, there still is no case...
yes, liz, even in down economies, divorces, car wrecks, complicated estates left by gramma who gave everything to the nice man from the church who was the only one to talk to her at the end, will still happen.
not so with epic m&a deals, IPOs, patent filings, big RE developments, etc
I suppose the bigs are salivating over restructuring all those empty towers they helped create; but I don't think there is any there there to pay them for it.
That depends, AMF. Have we reached the end of the line as far as the existence of corporate and individual professional negligence, fraud and incompetence? Perhaps you would prefer the Russian system of justice?
Tegnost, I would take the number of recipients at face value long before I took the poverty rate at face value. Lots of ways to game the latter. In any case, we spend far more on the drug war, and that's effectively negative welfare.
Gardens and small farms create a lot of jobs and apparently when there's a will , there's a way. Maybe the economy just rebuilds from the bottom? I love farm work. And maybe this will squelch the lib obsession with gun control as they need to get some protein on the table (pro gun Dem for my lifetime, it's the kansas in me even if it's only a genetic connection to the state), or at least change it to "use both hands"
You are not supposed to get food stamps unless you are practically destitute - no assets - but I dont know if they actually police that... I have never collected any entitlement benefits but people have told me it's not fun - they send little bureaucrats out to your house to count the tp squares...
As a child I had plenty of work to do to help out... one thing about growing your own food, the whole crop ripens at once and you have to harvest and preserve it right then - think up all night canning, out at daybreak picking a truckload of cucumbers by hand etc... and it doesnt end in the winter time either - that is butchering time and if you have never tried to handle a cow carcass that weighs a ton... hang it up, cut it up... This is why I want the govt to do things that will create a sustainable economy, so I can keep going to the market and restaurants, and not have to go back to all that labor...
I don't know what things were like in the early days, but I've heard that if you want something, anything, from Washington, if you put GT on a $1M retainer, it usually happens.
dryfly (profile) wrote on Sat, 5/2/2009 - 4:28 pm reply Ignore user I guess they kept it high so it wouldn't float out of the ground.
Bingo - like coffins in New Orleans.
BTW up here on the tundra they bury them REAL DEEP so they don't freeze up in a cold snap... that happened to my BIL on one almost snowless but MF cold winter in central Minnesota...
dryfly,
I'm confused.
Are you saying your brother-in-law's coffin 'froze up' (like they float up in N.O.), or his septic tank?
Uncle Billy Mental Widget,
Simon Johnson wrote a great read, if it's not true he needs to write novels and make a mint like Grisham.
Travelled and worked abroad plenty. Including a visit to three of the camps you so charmingly reference. Of course, the big one (or big half of one) didn't bother with a wrought-iron gate.
Spend a week in a wheelchair and get back to us on how you feel about ADA nuisance suits. Go in for a vasectomy and get a heart transplant and tell us how you feel about torts.
In many cases, layoffs are quite attractive! Paid for vacation & sick time accrued, severance & extended health care benefits. Now Obama is carrying 2/3 of COBRA, so you can sponge a little there too!
Squirrel, fine, possum, trout, even catfish... but there's no way I'm going to butcher a cow. Willing to create an entire micro-economy around a butcher before I'm forced to do that.
Today is May Day, and while International Workers’ Day (Labour Day in the UK), means little in the USA, its a big holiday in Europe. Banks and markets are closed on the continent, (England celebrates on Monday).
Speaking with Mike Panzner this morning (his clients are mostly Europeans) made me think about this: Which region is the true Socialist state?
-Europe has cradle to grave health care plans, generous unemployment benefits, and free or subsidized college costs.
-The US gives away public assets (oil, gas, mineral rights) for pennies on the dollar, has huge subsidies and tax breaks, and bails out reckless speculators.
It turns out that both regions are welfare states — only in Europe, the natural population (i.e., people) is the recipient, while in the US, the corporate population is the beneficiary.
Loyalty day is one of those knee-jerk reactions to communism that happened in a very scared post-McCarthy America, at about the same time "In God We Trust" was added to the currency, our defense against a godless Soviet Union.
No tort payoffs and we instantly turn into Russia?
ERISA expressly preempts torts suit against benefit plans. The rationale being that any payout or compensation would mean decreased benefits to the other beneficiaries.
We don't need tort reform, we need legal reform
"Tort reform" is a straw man that the legal industry uses to forestall REAL reform
Something like "clean coal" and "hydrogen cars"
Bring back civics classes.
Add law classes to undergrad curriculum
Cut Law School to 2 years (like MA, MBA)
Create a new "legal-lite" class of professional
Seems like we need to restructure almost every industry.
They have ALL calcified because the system rewards those who seek and establish rents
by reinforcing their positions (every industry has big firms that essentially collude - via their
industry groups - to keep the status quo).
If we are going to cut welfare for the poor, lets cut corporate welfare too.
Lots of Geithner glorification going on lately. James Kwak, Yale Law Student and contributor to BaselineScenario.com, wrote a bit of a defense of Geithner the other day. Then there was the big Time 100 most influential vanity piece, written by the son of Judge Guido Calabresi (Yalie extraordinaire). Geithner is on the board of something called "Center for Global Development." Board of Directors : Center for Global Development : About CGD Notice that "C." Fred Bergsten is too. And moreover, he's the head honcho over at the Peterson Institute. Guess who else is big at Peterson? Simon Johnson, who together with Peter Boone, and James Kwak, make up the "Baseline Scenario" troika. Tight little world, and no wonder James was asked to defend Geithner when seen in this light. But wait, there's more: "M." Peter McPherson CBoD of Dow Jones. Not a stretch to tie old "M" to Rupert Murdoch. Then there's Dani Rodrik, prof. of Political Economy at Hahvahd, and blogger extraordinaire. Frequently quoted by the other fellows at the top of the econ foodchain/echo chamber. Then good ol' Larry Summers (on leave), Sir Colin Lucas of Oxford and U. Chicago, Robert Macnamara (worn-out version of Rumsfeld), Amartya Sen of Cambridge & Harvard, and our man Stiglitz. Tons of World Bank types in the mix there. Paulson's there now. What is that fellow up to? Peterson... Peterson... Petros Peterson... how come he never speaks to us directly like Soros?
Add law classes to high school... and economics... and psychology too...
I have tried in vain to get local law enforcement to create something like "Cop lite" which is more of an assistant cop - to do things that dont require a uniform, gun or all the training... for example, vehicle VIN verification... The cop managers dont want to do it of course because it wont enhance their empire...
I agree with most of that, and would add that all except the top 50 or so law schools should be closed yesterday, and all state bars made at least as tough as CA if not much tougher.
Can a night of the long knives be coming sooner than later, as the republican party realizes that it's hitched it's star to radio stars of dubious value?
They've either got to come clean, or risk becoming even more meaningless...
If you bought a farm with multiple structures (house, barn, etc.) are there typically covenants in the mortgage that would prevent you from tearing down a barn?
all state bars made at least as tough as CA if not much tougher.
i think that CA is the only state that will allow non-JDs to sit for the bar. If the exam is hard enough, there's no reason why the state should require that an individual drop $100K just to take the exam, when competency is the primary issue.
......."This is why I want the govt to do things that will create a sustainable economy [so I can go out to eat]"
.....more and more people are thinking this way. But, what do we do with the % that literally refuses to work?
The more our government does for them, the more they take. They have lived off other people for so long, they have no skills. I get one a month that promises the sky but doesn't deliver squat. The next homeless person you see, tell him/her you have a 6-hour job for them - you'll pay them $10. per hour and a meal. See how many bite - ZERO. (Unless they're Latino)
New strategy for betting on horse races: just bet on the longshot. Will likely pay off in the long run. Isn't this the philosophy with small cap stocks?
the notion that we are moving away from a fiat currency to an asset backed currency is playing out in reality. the implications are far reaching for currency valuations and global markets. when i wrote “ALL YOUR STOCKS ARE BELONG TO U.S.” last september i hardly believed the words coming off my fingers:
but now, here we are with an asset backed dollar. most analysts have opined that expansion of the fed’s balance sheet will take down the dollar. i thought this too but i am not so sure anymore. it now looks to me like the fed is creating a new kind of currency.
will people buy it? yeah probably, after it goes on sale. afterwards dollar value will be closely tied to the content of the federal reserve balance sheet.
Worm can open.
"There is physical work that must be done and able bodied people must be motivated to do it. Wages and fear of starvation are the 2 motivating factors - fear and greed."
ShadowInventory: I've read most of this whole thread and all I can say is...I sure don't want to live in your world. Wow! Pretty damn bleak!. Hope you're not in a position of power now or anytime soon.
Some of us like, even love our jobs. Relatives of mine do manual-labor type jobs & you couldn't stick 'em behind a desk if you tried.
There are many poor people who just want a decent job with a decent wage that will support their families. With a decent job, you can send your kid to college so he/she will move up the ladder. The key here is jobs. The inner cities had jobs at one time but no longer. We kicked the lower-middle rungs out of the economic ladder. And we're busy doing the same with the middle rungs.
Dryfly & Byz Ruins (if you're still here): really enjoyed the history thread. Wanted to contribute more but the SO was pulling me out of the study...A list of Honey-do's. I did want to say and didn't have the time to do so, I agree with your assessment of Northern might...eventually the rebel hotheads would have been starved into submission. I have relatives who are Oglala Sioux/Rosebud Reservation residents and know many of the stories not told in our history books. Johnny Rebs would've been dealt with in similar fashion.
And why do you have to go to college first, if you can already read and write and reason a bit?
I could've gone straight to law school, tho I am perfectly happy I went to college.
I suppose most high school grads can't adequately read and write, so 2 years jr college should do it.
And why aren't there courses in high school about areas of law that practically everyone runs into in their life? My civics courses were so incredibly boring I wouldn't wish them on anyone.
As if "how a bill becomes a law" without telling the kids about pork and campaign donations isn't just plain dishonest and boring both.
It will get interesting when their own retirement fund tells the rank and file to stuff it come next contract negotiation. Or they blow up for good. Real interesting.
My thoughts too - this will be an interesting development as far as how workers are represented going forward.
"One of the lessons that investors seem to have to learn over and over again, and will again in the future, is that not only can you not turn a toad into a prince by kissing it, but you cannot turn a toad into a prince by repackaging it. But very imaginative people in the securities market try to do that. If you have bad mortgages they do not come better by repackaging them. To some extent the chickens are coming home to roost for the mortgage originators and securitisers."
Warren Buffett, Financial Times, October 26, 2007
Well we flogged the welfare/workfare/ possiblilties pretty thoroughly in this thread so I'm not going to repeat anything - It would be great if everyone had a job they loved but most people work for the pay... workers need a stable economy and a stable currency even if they dont understand economics... So the way the govt can create a stable economy is to stay out of it as much as possible... I dont have all the answers but I do enjoy the debate and I am always ready to hear everyone's ideas, hoping to find one better than the ones I already know about... but I dont have any patience with the attitude that "we have to help these poor people"... We cant help them other than to show them how to help themselves... as long as they are able bodied that is, I make exception for those who are not physically able to support themselves...
A residential mortgage has language that sez you aren't supposed to trash the property, but in practice nobody ever checks this. I have never, ever, closed a farm transaction where the farm was supposed to keep running, and not be developed into a subdivision. City girl.
I would imagine there would be no prob, unless most of the value was in the barn.
Bond Girl (homepage, profile) wrote on Sat, 5/2/2009 - 6:55 pm reply Ignore user lawyerliz,
If you bought a farm with multiple structures (house, barn, etc.) are there typically covenants in the mortgage that would prevent you from tearing down a barn?
Bond Girl,
The whole 'covenant' yarn will be moot once starving mobs remodel the structures into slaughterhouses to supply edible horse-meat .
Argentina, Peru, Brazil and a few other Latin American countries in the 1980's all changed the names of their currency in an attempt to disassociate themselves from previous failed currencies. It fooled nobody.
Replacing our dollar with a super-dollar or what have you, is a emperor's new clothes gig, nothing more.
Hm well that explains how BB can buy MBS and tbonds, and how Obama can fire a CEO I guess...
I think the Brits are taking CDO's etc onto their balance sheet too... I bet they are really glad they didnt join the Euro now... All the Euro countries have to go beg the central bank for a handout...
Lots of posters wanted backing for the dollar. Now there getting it. It might be crap,
but even manure can have some value. Thanks for making this ummm, transparent, Otis.
I would like to hear that statement from you in a couple of years.. You still do not get it! There has to a floor on how poor can be for a modern society to work, and we cannot go back to the feudal and industrial age even if everyone wanted to.. Complex evolving systems cannot reverse themselves without killing everything in the system.
You cannot dissect a live rat and restitch it back into a lamprey, even if you could keep the organs functioning outside the body for a few hours. We have to create consumers who have income without jobs!
//but I dont have any patience with the attitude that "we have to help these poor people"//
sanity - Presuming you start with someone who is unemployed - 1. Take the first job you can get. 2. Keep looking for a better job and work your way up. 3. Train yourself to get better skills that have market value 4. Save 20% of your income for 20 years and become financially independent.
Notice there is nothing in there about spending $300 for a pair of sneakers...
they are getting out of the fiat regime while the getting is good, utilizing the credit implosion black hole to create mouse click fiats with wild abandon.
those mouse clicks are gonna own half of everything.
"What is the point of spending all this money to save the financial sector, just to restore the financial sector to a lower level?"
I'm not an expert here, but it might be more economical to save the financial sector and lower it, than to let it collapse and then bring it up from nothing.
@Otis,
My understanding is that the Fed is only buying Agency MBS and Treasuries. The other junk on their balance sheet is from loans, not purchases. OTOH, some of those were non-recourse loans. The Fed plans, and needs, to unwind a lot of those loans and purchases, eventually, to soak up the excess money in the system, but I don't think it will be as easy to reduce their balance sheet as it was to expand it. I don't see the Fed balance sheet as backing the dollar.
waha
Repost from last thread: Are Buffett's comments enough to pierce the bubble on Monday? Or do green shoots spring eternal?
stability is coming to the low-end because of the FHA is giving out mortgage crack to stupid first time buyers. Developers and banks are laughing all the way to the bank, but what happens when the low-hanging fruit is consumed? Not to mention the inevitable defaults because FHA has near-zero credit standards...
Still OPM.
I definitely see a pickup of activity and draw down of inventories.
I think it is an open question if this is a temporary phenomenon caused by the tax credit pulling forward demand to the beginning of the year combined with the foreclosure moratoriums preventing new inventory coming on market.
I am not convinced either way yet. If you look at all the houses with Notice of Trustee sales filed on them it sure seems like we are about to enter another leg down as soon as any amount of new distressed inventory come on market. Right now distressed inventory is the majority of sales but now are becoming the minority of inventory. But if the government keeps the giveaways going I guess it is possible to prevent this inventory from coming on market.
You can see distressed inventory here for a couple local So Cal markets:
Effective Demand: Weekly Active/Pending counts SFV & Ventura - 05/01/09
The great unwashed public only starts saving again, just as the dollar is about to get deep-sixed...
Timing was never their forte.
Buffet's estimate of inventory absorption depends on new household formation of 1.3 million per year... I would suggest that the depression will cut into that number too... Plenty of anecdotal evidence that college grads are making plans other than entering the job market... so that will slow it down some... but if the kids and their spouses are living with mom and dad, that doesnt count as a household formation... not to mention household destruction when a former household moves in with someone else... I dont think the housing inventory overhang will be gone in 2 years ....
AMF - agree that the great masses are financially ignorant... If we are truly heading into massive inflation, then the place to be is commodities and also money market fund interest rates will be rising along with interest rates in general.. bond prices will fall... Some stocks will rise - probably Exxon etc... but the market overall will probably be flat to down... I dont play currencies so I dont know how that will shake out - We dont have the Swiss Franc any more as the stalwart and I doubt if the Euro will hold up in inflation... I would rather have some gold and also there is an etf symbol GSG which represents commodities based on their consumption in the global economy ... I will be reducing my GNMA bond fund allocation and increasing my commodity allocation if the Fed shows signs that they are not going to hold rates down by buying an infinite supply of tbonds...
OT then I'll leave it alone:
"Lincoln wasn't much less of an asshole." [Than Lee]
And Elliot Spitzer wasn't much less of an asshole than Bernie Madoff. I have no problem tearing down the myth of historical heroes. But I get disgusted hearing of 'noble' warriors like Lee or Rommel, just stuck on the wrong side through a fluke of history. Every Union soldier, despite a million caveats, can be said to have fought in part for a just cause. No Southern soldier can. Moral hazard can't be glossed over.
Vonbek - in spite of his cult following, I personally dont understand Buffet or his philosophy... Look at the grannie collection of companies they have assembled with cash from the insurance operations - what kind of strategy is that? Also he is heavy into things like drywall, carpet, furniture etc... which probably made sense when housing was hot, but he wasnt sharp enough to dump those companies at the top - unlike say, Blackrock, which IPO'ed right at the top of the craze... My opinion is that the smart money doesnt pay any attention to him... the market rally is in expectation that the administration spending will pull the economy out, but I think that is rather like squirting some charcoal lighter on a fire that doesnt want to start - you get a few flames which quickly die down and the fire sputters out anyway...
If the congress would take some measures such as eliminating the income tax, and eliminating transfer payments to able bodied adults, and eliminating the minimum wage - or something similar to cut business costs... then we would see a real resurgence in the economy...
If the poor want to stop being poor, the only thing they can do is get up and go to work in the morning... stop waiting for the fairy princess to show up with the gold... Letting them keep what they earn and cutting off their poverty stipend is the only way to motivate them.
Work, earn, plan, save, become financially independent - and it can be done on an aveage income...
Buffett got caught flat footed in this downturn and is only talking his book in order to avoid Berkshire shareholders from forcing him to liquidate holdings at current market values. He's a sophisticated investor who takes full advantage of government bailouts and uses exotic financial instruments.
His comments about household formation and housing adsorption are demographically indefensible and before touting "personal savings" he had best adjust for 401k and similar non-savings activity.
his positions must really be in trouble for him to resort to Wall Street happitalk.
Are Buffett's comments enough to pierce the bubble on Monday
(a) Buffett himself acknowledges making a number of really bad calls recently like ConocoPhillips or Wells Fargo
(b) With most institutional investors remaining on sidelines and much of the NYSE volume coming from Goldman Sachs, it is hard to believe that Buffett's comments will move the manipulated marked one way or the other (not that the market would not move for other reasons)
speaking of commodities/inflation, anyone else notice the irony that the historical savings rate spikes follow the big commodity inflation spikes?
and in terms of warren, the b-shares have rebounded a good 800 bucks from their lows - BH will be fine. they know how to work a low-margin environment where the 'high-end' consumer has disappeared.
"Buffet's estimate of inventory absorption depends on new household formation of 1.3 million per year"
http://www.dhs.gov/xlibrary/assets/statistics/yearbook/2008/table01.xls
Yearly legal immigration to the US runs at about 1 million. Will people still want to come to the US during prolonged economic uncertinity? What about emigration by baby boomers in order to stretch their savings?
Buffett also seems to ignore exisiting home inventory.
yogi:
Damn right. Just like those Iraqi's fighting to keep their rape-rooms running... our American soldiers fought for a "just cause"; despite a million caveats.
Okay, it was damn snarky of me to open that box and now I'll just kind've backaway from whatever conversation comes from it...
It's just so darn easy making judgments 150 years away in a world that probably resembles little to ours... and with 150 years of spinning...
I remember the late 70's-early 80's and the mantra was all interest rates all the time, it ruled our lives.
Interest rates don't mean squat this go round, you get almost the same rate of return from your mattress, as you would having your money in the "safest" place, UST's.
UST's are akin to a lifeboat that can only carry so many passengers, and the more people on board, the more risk of capsizing...
I've seen similar "low end selling lot hotcakes" postings over on Seattle Bubble. I think this points to two things which are occurring. First, there are a lot of moron first time buyers who held off for a few months, but are now rushing to buy anything (agents are claiming multiple bids are common now). Second, there is incredible compression coming to the market which will insure these folks are underwater by next year, probably by quite a bit. Those $600k-$2m homes which are not selling at all, and those markets now have years of inventory, will eventually have to fall in price to find buyers. As they do, the lower end will have to fall even further to compensate. When that will happen is anyones guess, but with the FHA the only game in town eventually these people will want to fall into their loan brackets.
Buffett -- "I would not look for any quick rebound in retail, manufacturing and services businesses."
Ummmm, what else is there? Fishing?
I wasn't trying to validate Buffett's investing philosophies. Personally I think he is the leader of a cult. His followers sure act like it. I was more referring to the msm types covering this story since Warren and the President are so 'close' and whether his lack of optimism will transfer to the market in general.
"He's a sophisticated investor who takes full advantage of government bailouts and uses exotic financial instruments. "
The cult worship this year reeks of desperation. (CR is distinguished, as always)
<br>
Buffett my assets!
This relentless storm's left them
So intangible
<br>
I've been getting 4.5% - 5% in GNMA bonds for years... and if this is the GD2 then that's the place to be.... mmf rates have been below 1% for some time now... GNMA bonds are as good as tbonds for risk... But if rates get out of hand then I'll flip into mmf's again and ride the wave.... With an asset allocation strategy you always wind up buying low and selling high, just not always at the pivot points - but hitting a pivot point is all luck anyway... Asset allocation will not save you from cliff diving however.... But I hope we will not have another big cliff dive in my lifetime...
One question I had about TARP repayment. Banks have to repay at current market valuation, right? So it benefits GS, since they have repaid to keep everyone else's repayments bases high, right? Also, if they are working hand-in-hand with the Fed, doesn't it benefit taxpayers that GS is keeping the market afloat?
And could we please stop calling it a "savings rate!" We are paying down debt. Nobody is saving anything. I.e. the paying-down-debt-rate is increasing sounds much more prudenct, and doesn't suggest that there is some pool of savings that will be later spent. Quite the contrary. The debt we are paying down is going away never to be spent again.
A rebound in housing without a rebound in industry? All those buyers have govt jobs? I dont think so... median housing price cant get too much over 3x median income or there is going to be a 'correction'
"It's just so darn easy making judgments 150 years away in a world that probably resembles little to ours... and with 150 years of spinning..."
Justifying behavior as "prisoner of one's context" makes a judgment also. The victors write history, the losers revise it to grab a headline. Sorry, I don't believe in redemption of moral hazard by gentlemanly behavior.
An all you can lose
Buffett doesn't sound very
Appealing to me
"An aye for an aye is the best we can expect out of the yes men."
Wow, that's quite good, AMF.
I imagine you as a Somalian pirate with an aye-patch.
Aye, aye, sir!
We went to the Seattle Peace Choir's rendition of Carmena Burana last night. I thought about memes as music, the movements as repetitive infections, the symphony as an observer pattern but maybe as visitor. The tenor solo was more focused on his piece than the audience and it seemed to be that good art must mean more to the artist than the audience. The crescendos as peak bandwidth and of course, the inevitable comparison to the opening scene of "Jackass, The Movie".
Breakfast, zoo, movie.
Bye.
"Buffett sees some housing market stabilization"
Oh my! There's that nasty word "stabilization" again. It started a pissing contest yesterday and I'm sure it will start another one today.
I'm staying out of it.
Have a good day.
I'm going skiing. Later.
Is he talking his book a bit? Maybe, but, in his defense, this is the guy who:
Of course, we haven't seen anything REALLY like this since the 30s - and Warren may be a bit of a young kid to really know how to play that environment.
Interesting Article on Perella Weinberg's Reaction to being Threatened by White House re: Chrysler
In fact, let me just say, people have asked me who I represent. That’s a moving target. I can tell you for sure that I represent one less investor today than I represented yesterday. One of my clients was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under the threat that the full force of the White House Press Corps would destroy its reputation if it continued to fight. That’s how hard it is to stand on this side of the fence.
And could we please stop calling it a "savings rate!" We are paying down debt. Nobody is saving anything. I.e. the paying-down-debt-rate is increasing sounds much more prudent, and doesn't suggest that there is some pool of savings that will be later spent. Quite the contrary. The debt we are paying down is going away never to be spent again.
True that.
To put it differently - the consumers are paying for what was purchased in the past 5+ years. That borrow-and-spend binge essentially bought forward purchases that should have been made in the next 5 years or so.
All this demand that the government is now trying to stimulate has already happened. Now we need to figure out a way to pay for it.
With apologies to George Carlin:
There's that nasty word "stabilization" again.
But stabilization is a nice word. Think of all the things it sounds like;
"Hey this economy is shit blazin!"
"Stay bullshit nation."
New "Snak Full Excretions." From Nabisco, nobody can cramdown just one!
With apologies to George Carlin:
There's that nasty word "stabilization" again.
But stabilization is a nice word. Think of all the things it sounds like;
"Hey this economy is shit blazin!"
"Stay bullshit nation."
New "Snak Full Excretions." From Nabisco, nobody can cramdown just one!
Best investment advice ever (from a long time ago)....
WHETHER YOU ARE RICH OR POOR, IT'S ALWAYS GOOD TO HAVE A LOT OF CASH!
mp,
I didn't think anyone was beating you up. Can we 'agree to disagree?'
OK, everyone hold hands and sing 'Kum Baya.'
"IT'S ALWAYS GOOD TO HAVE A LOT OF CASH! "
and a little bit of gold
Cash is great, right before the devaluation...
"Buffett sees some housing market stabilization"
Oh my! There's that nasty word "stabilization" again. It started a pissing contest yesterday and I'm sure it will start another one today.
I'm staying out of it.
Have a good day.
Oh sure mp - just do a seagull* on us then go away... [/snark]
.
.
.
.
* 'Seagull Post' - fly in shit all over then fly away.
and my buddy with a very high income who walked away from riverside co mortgage - was he 'paying down debt'?
Cash is great, right before the devaluation...
Devaluation relative to what? Euro? Yen? Swiss Frank? Swedish Krona?
The answer is not all that obvious
1-800-JESUS (profile) wrote on Sat, 5/2/2009 - 1:44 pm
Damn - I keep dialing that number and all I get is Depeche Mode.
The answer is quite obvious about all currencies, not just the dollar...
Gresham's Law: Bad metallic money drives out good metallic money
Sham's Law: Good metallic money drives out bad fiat money
"Oh sure mp - just do a seagull* on us then go away"
Conjure says, "BWAHAHAHA!"
"I prefer 'Lufthansa Post."
"A goose does it better."
I tried that 1-800-JESUS number and there was a dishwasher from Oxnard on the other end.
Buffett follows a simple golden rule - discipline. Had financial "titans" follow the same rule, they wouldn't be in the mess they find themselves today.
Compare that savings rate graph to K-wave interest rate graph from Mish -
http://photos1.blogger.com/hello/101/3984/1024/K-Cycle-Interest-Rates.jpg
They're almost the same graph.
Building debt can only be sustained by falling interest rates.
But savings are directly correlated to rates; as rates fall, savings fall.
Eventually debt outruns savings which support the debt.
Boom.
K-wave is real.
Most modern economists discount it (including CR?)
That's why their predictions have misfired so much, as compared to Mish or other commentators using K-wave as a component or guide in their analysis.
Arbitrage_Macht_Frei (profile) wrote on Sat, 5/2/2009 - 12:10 pm reply Ignore user
I tried that 1-800-JESUS number and there was a dishwasher from Oxnard on the other end.
Three cases confirmed. Two schools shut down for a week. Jesus isn't touching a pay phone in Oxnard these days.
I tried that 1-800-JESUS number and got a call center in Bangalore...
Good metallic money drives out bad fiat money
Since gold is not used to settle transactions, the concept of devaluation does not really apply.
As an asset class, gold might do better than cash - then again, so far (since 2008) it has not
p.s. "how to prevent pandemic."
Edge: HOW TO PREVENT A PANDEMIC By Nathan Wolfe
If gold does really well, we are all in trouble...
M, cherrypick much?
One nice thing about holding physical gold is that it can be passed along without the govt knowing about it thereby avoiding inheritance taxes... Also gold coins are incredibly beautiful - put a stack on the table and watch your guests get gold fever... But they earn no interest, and a significant amount is really heavy too - then you need a vault etc... So the gold etf is a good choice instead if you just want to play a trading move... but that is really just gambling unless you are prepared for a long holding period and working from long term charts...
broward (homepage, profile) wrote on Sat, 5/2/2009 - 3:12 pm
Compare that savings rate graph to K-wave interest rate graph from Mish
Wow! A near perfect fit!
What kind of regression is that anyway-?
It's not so much the appeal of good metallic money, it's what happens when the financial Sham hits the fan.
First it was 6 banks.. then 9 banks.. now 14 banks.. Just call it 19, and get it over with!!
Stress Test May Push 14 Banks to Raise Money, FBR’s Miller Says
Stress Test May Push 14 Banks to Raise Money, FBR’s Miller Says - Bloomberg.com
By Christine Harper
May 2 (Bloomberg) -- U.S. Regulators may compel as many as 14 of the nation’s 19 largest banks to raise common equity based on financial stress tests due to be completed next week, said Paul Miller, an analyst at FBR Capital Markets Corp.
Miller, a former bank examiner, said his estimate assumes regulators will require banks to maintain tangible common equity, one of the most conservative measures of capital, equal to 4 percent of their risk-weighted assets over the next two years, to withstand losses in case the recession worsens. The tests, originally scheduled for release on May 4, are set to be disclosed after U.S. markets close on May 7, according to a government official who spoke on condition of anonymity
shadow inventory states:
"If the congress would take some measures such as eliminating the income tax, and eliminating transfer payments to able bodied adults, and eliminating the minimum wage - or something similar to cut business costs... then we would see a real resurgence in the economy...
If the poor want to stop being poor, the only thing they can do is get up and go to work in the morning... stop waiting for the fairy princess to show up with the gold... Letting them keep what they earn and cutting off their poverty stipend is the only way to motivate them."
Exactly which payments to able bodied adults and how much would that save?
What can people making $3/hr. buy that would help the eCONomy. Income taxes? Hey, someone has to pay the interest on those loans from China, don't they. Our gov't gives money only to the rich so spare me the class warfare. The poor have no lobbyists.
Outside of that I almost always agree with and appreciate your comments
"Devaluation relative to what?"
CPI.
Still holding too much of cash when the inflation kicks in by far is not the best idea. However within the next two years, the possibility of inflation is rather small. Fun starts once our economy does recover, : ) However, it all depends on government will to raise taxes or print money. If Gov takes the tax increase path to pay out debt & limits the gov. expenditure to a constant level, inflation could be avoided.
Can someone tell me why this MoFu is still allowed to talk in Congress ?
US gains from illegal immigrants, H-1B workers: Greenspan- Visa Power-Travel-Services-News By Industry-News-The Economic Times
Well I'd say it has been hitting the fan for a while now! But we do transactions electronically now so no matter what you call it some kind of currency will probably stick around... The only question is what you can get with it... If I went out today and tried to buy something with a gold coin, I doubt if anyone would accept it...
Our rural county in Oregon is now in budget talks to figure out how to cut 30% (!!!) from its education budget.
100 teacher and staff layoffs and X number of additional closed days are necessary, besides adding an additional 10 students (!!!) per class...
State and local governments can't print money like the Feds. Retail is the part of the nightmare that Buffett sees, but there's worse to come in small government. This is inexorably becoming a disaster., and all talk of bottoming is just whistling past the graveyard.
A wise man doesn't rush history, patience.
Lucifer (profile) wrote on Sat, 5/2/2009 - 3:22 pm
First it was 6 banks.. then 9 banks.. now 14 banks.. Just call it 19, and get it over with!!
Sorry, Louis, that's not how it works.
Next they push the release date into June ....
Why is a bank that leads in ignoring foreclosures to minimize book loses a good bank?
Berkshire’s Buffett Calls Wells Fargo ‘Fabulous’ Bank (Update1)
Berkshire’s Buffett Calls Wells Fargo ‘Fabulous’ Bank (Update1) - Bloomberg.com
By Erik Holm and Andrew Frye
May 2 (Bloomberg) -- Billionaire Warren Buffett, whose Berkshire Hathaway Inc. is the largest shareholder in Wells Fargo & Co., said the lender is a “fabulous” company.
“All banks aren’t alike by a long shot, and in our view Wells Fargo, among the large banks, has some advantages the others do not,” Buffett said today at Berkshire’s annual meeting in Omaha, Nebraska.
"Devaluation relative to what?"
CPI.
CPI is a philosophical but elusive concept. Just consider how "Owners' equivalent rent " affects CPI.
Consumer Price Indexes for Rent and Rental Equivalence
WTF!! WTF???
Bloomberg and Marketwatch have different headlines for the same articles?
Buffett Says He Sees ‘No Signs’ of Recovery in Housing, Retail
Buffett Says He Sees ‘No Signs’ of Recovery in Housing, Retail - Bloomberg.com
By Erik Holm and Andrew Frye
May 2 (Bloomberg) -- Billionaire investor Warren Buffett, the chairman and chief executive officer of Berkshire Hathaway Inc., said he’s seen no indication of recovery from the real estate slump that helped cause the U.S. recession.
Newsflash!
Wells Fargo was renamed "Ab-Fab" bank, and it's shares have risen 3% on the Pago Pago aftermarket.
Forgot to Buffet!
The thought made me smile as I
Drove off the cliff
“All banks aren’t alike by a long shot, and in our view Wells Fargo, among the large banks, has some advantages the others do not,” Buffett said
Yeah, advantages like massive exposure to California. You know, California, the place Buffett sold his personal beach house three years ago because prices were not justified by the fundamentals. Just like his use of derivatives. There's what he does and what he says.
Arbitrage_Macht_Frei,
I think WFC must start playing 'torch songs' in all their branches, since buffet thinks they are 'fabulous'.
Our rural county in Oregon is now in budget talks to figure out how to cut 30% (!!!) from its education budget.
Yup. State and local governments, especially local, are going to be the next shoe to drop. There's absolutely no way to penny-pinch around 20-30% budget cuts, with furloughs, etc.
Structural changes need to be implemented, but these guys are way in over their heads.
Minor Details
//Yeah, advantages like massive exposure to California. You know, California, the place Buffett sold his personal beach house three years ago because prices were not justified by the fundamentals. Just like his use of derivatives. There's what he does and what he says.//
Jackrabbit (profile) wrote on Sat, 5/2/2009 - 3:32 pm
Forgot to Buffet!
The thought made me smile as I
Drove off the cliff
nice one, Jack +1!
Tegnost - I would say that the Democratic Party has made a political force of the poor, and they are an effective lobby. At least in rhetoric. As for giving money to the rich - there has certainly been plenty of that, especially now in bailout nation... but the whole economy of the poor now is govt checks, food stamps, medicaid, housing assistance - and drug trafficking - ... Before big welfare poor families stayed together and worked themselves out of poverty over time... today there are a lot more fatherless homes that depend on children to bring in income in the form of AFDC payments... And it's not like there is no work out there - 20 million illegals didnt come here for nothing - they found work at an open if illegal market... and the buyer and seller agreed on the terms...
This is probably way to complex a subject with too many nuances to be discussed in a forum like this. There are mountains of material available. That doesnt mean that anyone, including the politicians, the government, or the populace will do anything rational...
My approach is to define the result you want and then work backwards to where you are so you get a series of steps that will lead you to the result. Want no poverty? Then stop subsidizing it, and stop penalizing work. Actually you could make a philosophical case for somehow taxing poverty, because if you want less of something you tax it, and if you want more of something you dont tax it...
Yeah, it has Buffett to shill for it, rather than somebody else.
Nothing like reality to give delusional mercantile asians a kick in the behind
Joblessness Spurs Shift in Japan's Views on Poverty
Rising Unemployment Gives New Heft to Activist Makoto Yuasa's Campaign to Secure More Government Help for the Poor
MAY 2, 2009
By JOHN MURPHY
TOKYO -- For more than a decade, Makoto Yuasa's efforts to end poverty in Japan were ignored by many as the quixotic campaign of a left-wing radical.
But Japanese including Prime Minister Taro Aso are paying attention to the 40-year-old activist as the world's second-largest economy sinks into its worst recession since World War II, leaving an increasing number of people without work.
...
Mr. Yuasa's rise to fame symbolizes the sea change in Japanese attitudes toward poverty. Since the country emerged as an industrial power in the 1960s and 1970s, it has been proud of its image as a nation of middle-class people.
Many Japanese had little sympathy for the jobless and homeless, regarding their plight as stemming from laziness -- and an embarrassment to the country's profile as an industrial power.
....
Media images of homelessness and stories of unemployment also have struck a chord. Concerned about their own job security, many Japanese are seeing the homeless not as troubled individuals seeking handouts, but as victims of a failing economy and a government system that offered no safety nets.
"Something that was unimaginable is happening now," Mr. Yuasa says of the shift in public opinion. "This is the first time Japan has really been facing the problem of poverty and realizing how thin the glass is that we've been walking on."
.....
Minor details like the myth of his modest house in Omaha while ignoring the multimillion dollar Laguna Beach house.
Wow I thought I was the only one that was seeing WB as Potemkin...
Lucifer (profile) wrote on Sat, 5/2/2009 - 3:31 pm reply Ignore user WTF!! WTF???
Bloomberg and Marketwatch have different headlines for the same articles?
BB is a typo. It should read:
Buffett Sees No Sign of Recovery in Hoisin Market
Either you are a true believer in the "bootstrap" religion BS or you are lying? Which one is it..
//Before big welfare poor families stayed together and worked themselves out of poverty over time//
Sauce for the goose is sauce for the gander...
"We see something close to stability at these much-reduced prices in the medium to lower part of the market."
Two words:
KNIFE CATCHERS
Some didn't work themselves out some did.
Some rich kids and adults sank.
It has been ever so.
But really I have no desire to look at gaunt starving people, even if they did somehow deserve it.
Samdog,
I suggest a roast bankster with a braised trophy wife and poached kids.. That should help the sauce market. The trophy wife might not have enough meat on the bones though..
//Buffett Sees No Sign of Recovery in Hoisin Market//
That is beside the point.. keeping people poor is not good for the economy.
//But really I have no desire to look at gaunt starving people, even if they did somehow deserve it.//
What is amazing is that even with all the govt spending on programs for the poor, there are still charities and soup kitchens... strong evidence that govt programs do not work...
ShadowInventory (profile) wrote:
I've been getting 4.5% - 5% in GNMA bonds for years
I've been riding GNMAs myself for a while, but last weeks interest rate spike in the 10yr has me spooked. I really expected intermediate rates to be stagnant at least through the 2nd quarter. Bernanke clearly controls nothing in the Treasury market.
Tax poverty?
Hunh?
Howsabout debtor's prisons? That would shure incentivize escape from poverty!!
BB did not hold the rates down this week. I think this might be that they think things are going to turn up and rates need to float up a little...
ShadowInventory,
The reason is very simple.. Government programs only give enough to keep people off the street. If you gave them enough to live a lower middle class lifestyle, it would be different.
Hey Warren B. - put this in your pipe and smoke it because you sold out !
China has ‘canceled US credit card’: lawmaker”
The Raw Story | China has 'canceled US credit card': lawmaker
Treasury Department data shows that investors in China have sharply curtailed their purchases of bonds in January and February. Representative Mark Kirk, a member of the House Appropriations Committee and co-chair of a group of lawmakers promoting relations with Beijing, said China had “very legitimate” concerns about its investments.
“It would appear, quietly and with deference and politeness, that China has canceled America’s credit card,” Kirk told the Committee of 100, a Chinese-American group. “I’m not sure too many people on Capitol Hill realize that this is now happening,” he said.
Kirk was alarmed at how much debt was being bought by the US Federal Reserve due to absence of foreign investors. “There will come a time where the lack of Chinese participation may have a significant impact,” Kirk said.
What is amazing is that even with all the govt spending on programs for the poor, there are still charities and soup kitchens... strong evidence that govt programs do not work...
WTF? Equal proof that charities don't work...
devaluation...
CPI is not perfect, true. However, it's reasonably useful in the medium run time frame. It's useful because it compares similar basket of goods and those goods have similar characteristics in the short (!) period of time.
The flat or dropping CPI this year is a good indicator that deflation is real. (CPI might be far from ideal in judging the extend of deflation, however there is no question that general prices are falling.)
I know - I thought that tax poverty thing would probably ruffle some feathers... not yours though liz...
The gift without the gi ver is bare.
Who wrote that?
Lucifer (profile) wrote on Sat, 5/2/2009 - 3:49 pm reply Ignore user Samdog,
I suggest a roast bankster with a braised trophy wife and poached kids
It can be billed: "One meal, three cooking methods!"
Liz,don't forget the diseased part.Gaunt,starving people make nice reservoirs for disease,especially if crowded together.
The reason is very simple.. Government programs only give enough to keep people off the street. If you gave them enough to live a lower middle class lifestyle, it would be different.
Be careful Lucifer - Nixon proposed that in the late 60s [negative income tax]... look where it got him. Hmmmmm.
Liz:
"The gift without the giver is bare."
--James Russell Lowell
Falling prices - some of our regular restaurants have changed their menus - now they have some 'value meals' which are lower price - sort of like letting everyone order from the 'senior menu' ... And at the WB lovefest today the DQ suit was touting a DQ value meal... At the burger joints you can now get the equivalent of a 'slider' for a buck...
Treasury Department data shows that investors in China have sharply curtailed their purchases of bonds in January and February.
The only investor they are really worried about is PBoC & 'SAFE'... Last I saw they were fully on board the Dollar Cycle Express.
Stay tuned for continued pain ( perhaps stagflation ) in America albeit the happy face USA mainstream media shills and Obama’s stellar economic team ( whose #1 priority is bailing out banking oligarchs ) will do their best to try and gloss over this with alot of lipstick i.e. with the Fed already on the hook for about $10 Trillion dollars ( about 10x over what it's commitment should be ) !
Funny thing is, my spending pattern hasn't changed a bit. In fact, if anything, I am more inclined to spend since restaurants are now easier to get in without a wait and vacations are cheaper!
"The banks own the joint"
Actually, taxing poverty used to be standard procedure; the nobles had to pay little or nothing, the serf's job being to keep the nobles adequately fed and housed.
Serfs had to work for the lord, give him a pig or whatever when the head of family died, and other customary duties depending on the area.
Look at the efforts made after the Black Plague to keep 'em in their place and underpaid.
Didn't work.
Many if not most of those getting charity/handouts are also working under the table. But neither are enough to live decently, so they do both.
A good case can be made that most of the wealthy are macro-parasites. Not all of course.
And this is ignoring the present example of fraudulent banksters.
dryfly,
Nixon made the following mistakes..
Try.. something like- "US Citizen Consumption Entitlement"
Now, they are starting to realize that is not true.
Reality has changed.. or to be more precise- moved in the right direction.
ShadowInventory (profile) wrote on Sat, 5/2/2009 - 3:56 pm reply
At the burger joints you can now get the equivalent of a 'slider' for a buck...
When I was an undergrad at Univ of FL back in '76, you could buy a Krystal hamburger for 17 cents.
Great entertainment with about 10 drunk freshmen.
Our spending is the same as well.... but then we live a rather muted and sustainable lifestyle...
'"This is the first time Japan has really been facing the problem of poverty and realizing how thin the glass is that we've been walking on."'
A powerful metaphor. Beneath the glass sidewalk, beneath the soles of your shoes, you can see the poor. You can sympathize, even empathize, but you will be safely separated from them. A literally higher being. But if the glass breaks you will fall down and be among them.
I remember going to White Castle back in the 1960's and getting them by the dozen...
lawyerliz,
Bingo!
//A good case can be made that most of the wealthy are macro-parasites.//
[BB did not hold the rates down this week]
The more ammo he blows holding them down now the less he has later and the more slippery the slope.
That's the dilema - if you have no restraints on capitalism, everyone winds up working for the Rockefellers, too much restraint and everyone is up at the public trough... the trick is to have enough law to catch the cheaters without impeding the extra hard workers...
"WTF!! WTF???
Bloomberg and Marketwatch have different headlines for the same articles?"
3 rd time this week. I am not kidding, it's the 3 rd time I notice the huge difference in conclusions based on the same data.
Must be the sign of times to come : )
BB has infinite ammo - until the tipping point...
Lucifer (profile) wrote on Sat, 5/2/2009 - 3:00 pm
Could very well be right. Say with a name like yours maybe you should run for office?
Yeah, Chili's has steak fajitas which I like, but is too much to eat, so I would take the rest home and half the time forget to eat it. Now they have a small order!! Perfect for me if not their profits.
And no, I haven't changed my spending habits at all. Course I never did do stuff like buy 1000 dollar purses. I don't see the point. Just bought flats of marigolds and mariyellows and impatiens. Will set out in an interesting pattern over the septic tank, which presently is pretty bare.. Don't know why they put in in the front like that, with not enuf dirt over it.
lawyerliz, it's from James Russell Lowell, isn't it?
oh. well. I'm really late w/that.
ShadowInventory,
If you have transparency in the system, it works quite well. Laws can be broken and circumvented. Transparency is much harder to override.. but that is why we have an opaque system!
Liz - so the truck can pump it out without having to drive over your lawn...
Soros more credible than Buffet
Soros Says Gain in U.S. Stocks Is ‘Bear-Market Rally’
(Update2) April 7, 2009
Soros Says Gain in U.S. Stocks Is ‘Bear-Market Rally’ (Update2) - Bloomberg.com
Key excerpts:
Views on Obama
Soros gave a mostly positive review of the President Barack Obama’s administration. “He’s done very well in every area, except in dealing with the recapitalization of the banks and the restructuring of the mortgage market.
Soros said the U.S. housing market hasn’t bottomed, even as transactions in states such as California have increased.
‘Zombie’ Banks
Soros said the banking system is “seriously under water” with banks on “life support.”
“They are weighed down by a lot of bad assets, which are still declining in value,” he said in the interview in his New York office. “The amount is difficult to estimate, but I think it’s in the region of maybe a trillion-and-a-half dollars.”
Soros said the change to fair-value accounting rules will keep troubled banks in business, stalling a U.S. recovery.
“This is part of the muddling-through scenario where we are going to keep zombie banks alive,” Soros said. “It’s going to sap the energies of the economy.”
Bank Nationalization
The “bugaboo of nationalizing banks,” which the Obama administration wants to avoid, means “we are nationalizing only one side of the balance sheet,” Soros said. “We gradually take over the deficits on the balance sheet. But we aren’t actually going to benefit from the banks recovering.”
My wife actually bought some coffee cups and a salt and pepper shaker set, which of course we didnt need at all, but I'm sure the shop was grateful...
dryfly,
When the time is right.. People are still too self-righteous and delusional. Some more reality should help them see the truth.. or break their bones- either way.
//Could very well be right. Say with a name like yours maybe you should run for office?//
"if you have no restraints on capitalism, everyone winds up working for the Rockefellers, too much restraint and everyone is up at the public trough... the trick is to have enough law to catch the cheaters without impeding the extra hard workers..."
Add to that automated factories and robots and things are about to get real interesting...
LawyerLiz,
I grew up in Coral Gables in a house built c. 1935. The septic tank was made of a material resembling thick tar paper. I remember when my folks had it torn out in the mid-60s. It was in the front yard, too.
Will set out in an interesting pattern over the septic tank, which presently is pretty bare.. Don't know why they put in in the front like that, with not enuf dirt over it.
Bombeck's Law* must not apply in Florida...
.
.
.
.
* Bombeck's Law - The grass is always greener over the septic tank.
timmyone,
And that is why we should pay everyone to consume.. job or no job.. you must spend your USCCE.. read my previous post to get the meaning of that acronym.
//Add to that automated factories and robots and things are about to get real interesting...//
Well I really think we are in a transition period with automation... If we had really smart robots, there would be no work... so we would have to adjust our system to give everyone a living allowance... I'm not sure that would be a good thing - it would require quite an adjustment in psyche...
But we are not at that point yet. There is physical work that must be done and able bodied people must be motivated to do it. Wages and fear of starvation are the 2 motivating factors - fear and greed. The more govt interferes with the marketplace the more distorted the economy gets, with the inevitable crash...
Automation takes away drudge jobs but creates higher level jobs - programming, robot maintenance etc.. So the worker should be encouraged to grow with the technology, train themselves for a better higher paying job...
We just had it pumped; doesn't need it very often; first time in 12 years at least. And i don't think they had to unbury the whole thing. The septic tank guy was really well educated, had an interesting discussion with the hub and makes a lot of money.
Cheating is part of the Great Market. Like bluffing in poker or Scrabble. But it can get out of hand, and it obviously has. Charity and some socialism are part of the Great Market too. Ayn Rand wasn't equipped to see that. I remember the first time my son realized I was bluffing in Scrabble. He was shocked, shocked at such a thing. But it's part of the rules sez I!!
Also the thing about the gift being bare is literally true. But even a bare gov't handout is better than nothing when desperately needed.
In poor neighborhoods there is a tipping point when all the wise/good/upwardly mobile have left. Then they turn from poor to slums, quite a different thing.
km4,
I saw that Soros interview. How can he give Obama favorable ratings when he spent the whole time discrediting his handling of the financial mess?
I guess even commies watch each others' backs ....
Liz - well we tried public housing - we tried direct checks - we tried free cheese - and I think what we got from all the free stuff was that people on the margin decided to take the freebies and stop trying to work up... So if we do have to support those at the bottom, it has to be less support than they could make if they worked...
Some people aren't smart enough to do a "higher paying" job.
I personally could never program. No matter how much you trained me, I would never
be very good, and I would hate every single second of it.
And the grass is a bit greener over the drainage fields, but not over the septic tank itself, which as far as I can see is a concrete box. I guess they kept it high so it wouldn't float out of
the ground.
ShadowInventory,
That is why we have to start creating that system now.. initially it will only make sure that nobody has anything worser than a lower middle class lifestyle.
Plus we might want to start on a small scale and debug it, before we reach a production version.
How about open, segregated dormitories and a dining hall with minimum calories, plus mandatory chores for residents..
Samdog good point although Soros was very clear with repeated points ( the recap article misses quite a bit ) that Team O has not done well at all with recapitalization of the banks and the restructuring of the mortgage market so The Triumph of the Banking Oligarchs continues at huge taxpayer expense.
I still think this could be turn out to be Obama's #1 nemesis.
The dormitory concept is equivalent to entry level military..
Liz, with some added soil, maybe raised beds?
Sallygardens Smallholding: Raised Beds
ShadowInventory,
Give them enough so that they do not have to work and still consume at moderate levels.. that way jobs where people work can pay more.. and there is an incentive to move up.
//So if we do have to support those at the bottom, it has to be less support than they could make if they worked...//
There is a Heinlein novel, which I can't remember the name of, where everybody got a subsidy--everybody, for the robot etc reasons, but you could work too if you wanted to and most everybody did want to. I think that part of the problem with welfare is the social disgust you are held in.
that said my least grateful clients were the ones I charged the least--they didn't appreciate my advise.
ShadowInventory,
We could put 'Arbeit Macht Frei' on the gates of that institution.
//How about open, segregated dormitories and a dining hall with minimum calories, plus mandatory chores for residents..//
Also there are a lot of people who cant be lawyers, including about 50% of the people who pass the bar... I much prefer programming... So there we have it - we have each followed our muse and created the highest result - a perfect example of the market...
And I really appreciate my lawyer when I need him...
lawyerliz,
Precisely, that is the major problem! It is a religious problem, not a rational problem.
//I think that part of the problem with welfare is the social disgust you are held in.//
lawyerliz,
What about calling it 'United States Citizen Consumption Entitlement' (USCCE) instead of Welfare?
I guess they kept it high so it wouldn't float out of the ground.
Bingo - like coffins in New Orleans.
BTW up here on the tundra they bury them REAL DEEP so they don't freeze up in a cold snap... that happened to my BIL on one almost snowless but MF cold winter in central Minnesota... they went two weeks where they couldn't use their toilets because the septic system was frozen solid [improvised piss buckets]... then in spring they had to dig up the drain field to replace broken pipes - it was completely shattered. The next system they put in they dug it deeper, farther below typical frost line...
What about calling it 'United States Citizen Consumption Entitlement' (USCCE) instead of Welfare?
Just call it 'stimulus' - that seems to work for the bankers.
Shadow--Why do you have to make it clear that the people who receive the subsidy are inferior? This gift is the barest of the bare.
The flatter the societal pyramid, the happier everybody is.
The desire to acquire all the everything in the world is a Darwinian sickness, rewarded--until it isn't. A certain amount of accumulation is good for people. The bag ladies with the most stuff in their supermkt carts are supposedly the mentally healthiest. It does not follow that there isn't some limit to accumulation and after that the accumulation is unhealthy.
Not zombie banks, vampire banks - keeping them alive is going to suck the life out of the real economy - not an original observation, but one that bears repeating...
How about open, segregated dormitories and a dining hall with minimum calories, plus mandatory chores for residents..
Throw in hot homosexual sex and it sounds like Sparta...
'United States Citizen Consumption Entitlement' (USCCE)
Basic Rules
1] Everyone gets the basic amount, no adjustments. (this will keep it reasonably high)
2] You must spend the amount within that calendar year + 3 weeks. No carry overs allowed. 12 monthly or 24 biweekly deposits on an ATM card.. your choice.
3] You cannot use that money to pay any debt nor can you invest that money. (Use previously unemployed IRS agents to make sure that people spend).
and
4] What you make above and beyond that is yours to use/ blow/ save/ speculate as you choose. What you make above the basic amount will not affect the basic amount.
5] Single payer comprehensive healthcare is a must for making this system work.
I read in Sparta, the food was not only minimal, it was disgusting. Only it was rich
Spartans that had to live that way, as well as the poor ones. Of course there were very few actual Spartans; most were heliots.
That's nice. As long as he enjoys his burger and coke, see's candy, and the occasional bridge game.
CR sorry to hijack a comment box, but this was censored on the baseline scenario blog (at least as of 1:31 PM pst). A response to their comment competition, which many here might enjoy. Page not found « The Baseline Scenario
Ok, let's review. Simon worked (works?) at the IMF in a very influential position. He posts a paper put out by the IMF which details a leetle corner of international fraud. This IMF -- doesn't it have a reputation, together with the World Bank and other affiliates, of ruining entire countries? So before we begin... is this just PR? Just a little spin to make us think the IMF is on it? We shouldn't be so jaded -- our fearless leader Hank Paulson is our chief representative over there now. He did not enable one of the biggest thefts in the history of the world, so we should not suspect his activities with at this juncture.
As one get into the paper, one stops and notices the first bit of evidence they present: A report by the "Caribbean Policy Research Intitute." (9A) Here's the link:
http://www.takingresponsibility.org/pages/findings/CaPRI_AIS_FinalDoc_jan10.pdf
Notice: The author(s) are not named; The .pdf has been professionally stripped of any metadata that indicates the creator or anything else; CPRI is located in the "Guango Tree House"
Can we safely assume the above was authored by one or more of these people? Meet the membes of the CaPRI Team | CaPRI
In little tiny letters at the bottom of the web page, you can see who funds the "independent" think tank:
International Development and Research Centre (IDRC) | Canada Fund (from High Commission) | United States Embassy, Office of Public Affairs | The World Bank | Super Plus Food Stores | Jamaica Money Market Brokers | Cobb Family Foundation |
See that last one? Here's Sue Cobb. Council of American Ambassadors > Members > Sue McCourt Cobb Beyond reproach -- she served under Jeb Bush as CEO of the Florida Lottery, and has even given freely of herself to help Iceland (before it died?). She founded the "Public Finance Department of the Greenberg-Traurig law firm" (You know, Jack Abramoff, and stuff).
Btw, why does Capri have two or more websites? This is the first one that comes up in Google and doesn't have any contact info for the think tank at all. Only if you click on their "project" tab do you see the people affiliated with them:
Page not found | CaPRI
Doesn't it just look like a bunch of spies hiding in plain site? They even have "country specialists."
Back to the paper we were talking about. The first person whose name appears on it is Ana Carvajal. Is this her?: Ana Carvajal - LinkedIn
From the American University business school to a European telecom company based in Virginia to owner of a company that supposedly imports fish from central and south america? Um. If this is her, it's no wonder our spies are getting arrested and killed around the world on a weekly basis. Something is seriously screwed up, and it might have something to do with... hubris? Greed? (Last aside: The Ana featured in LinkedIn attended the Kogut School. Kogut was CEO of the Charles E. Smith companies. Charles, despite having been one of the largest landlords and most well connected background players in the world, has not a word written about him in Wikipedia. Curious, no? Archstone-Smith, Vornado... largest property owner in the Capitol and surrounding area. Can't even find a proper bio on him on the internet).
In short, Simon presents a paper written by anonymous persons at an "independent" "think tank" run by people associated with the IMF, supported by funds from the Canadian and US government, and the ex head of the Florida Lottery / founder of the public finance department at Jack Abramoff's law orifice.
What does the failure to shut down schemes imply about the prospects for normal life? We're doomed until the pitchforks come out.
Is there a better to prevent major crises like these? Yeah, how bout we take all the money away from rotten people and use it keep things honest? How bout instead of trying so hard to look like we care about changing the world for the better, we actually do it? If you're sitting up in the clouds at 40,000 feet, pulling very long strings down here on the earth, you still have people you care about (one would hope) walking around down here who might get hurt when economy comes crashing down around them. So might you.
Sounds good to me, Light Bearer.
I recall Milton Friedman proposing the displacement of various subsidies with a 'negative income tax' - but we were too caught up in phase I price controls and Southeast Asia to pay attention at the time.
for 8 years we were able to sustain a myth- rising profits as percentage of GDP because of falling wages and consumption sustained through debt.
Take increasing debt out of the the equation and now you are stuck between a rock and a hard place. Either increase wages (the share of national income) have to rise to sustain consumption which will cause corporate profits to decline and in turn stock prices or keep the pressure on wages and see consumption collapse and in turn ultimately have stock prices decline. Never did figure out how corporate profits could keep growing at double digit rates with nominal GDP in single digits. While possible for a short period hardly something that is sustainable over the long term.
"And it's not like there is no work out there - 20 million illegals didnt come here for nothing - they found work at an open if illegal market... and the buyer and seller agreed on the terms..."
You got no papers, right?
No papers, boss.
You won't make trouble, right?
No trouble, boss.
I thought the name Sue Cobb was familar.
I saw Traurig once defeated by a sobbing lady in a zoning hearing (the lady should have gotten an accademy award). Zoning was Traurig's expertise and he was representing Arvida, which was very big at the time. The lady started quietly enough, broke into tears, and then finished strong, and they voted Arvida down. But I'm sure it was appealed and reversed, but was fun to watch and at least she drove the Corp crazy for a while and cost them money.
Rumor had it about payoffs, but I never heard any basis for that in reality.
"Living wage"
How long before the living wage is the new "magic bullet" to save the workers in our new workers' paradise ? $20/hr? $ 25?... What will it be ?
burnside,
"Negative Income Tax' sounds like taking money from peter to subsidise paul.
USCCE sounds much better.. It has the Words "United States", "Citizen", "Consumption", "Entitlement" and it supports all business... What is not to like!
You could also have the US Flag and Emblem on the government ATM Card.. that should satisfy the idiots
I think Ben or Timmy's signature on the card is a bad idea though..
I recall Milton Friedman proposing the displacement of various subsidies with a 'negative income tax' - but we were too caught up in phase I price controls and Southeast Asia to pay attention at the rime.
That was the Milton Friedman 'Radical Commie'... as he would certainly be called today.
Yes - I remember my father describing the plan to me back then... made perfect sense but then my father was rather progressive and would be considered a 'leftie' if he was still alive. When he wasn't plotting to over throw capitalism he was running factories and starting businesses - like Friedman I'm sure he was really just a 'mole'.
[/snark]
I would scarcely call Greenberg Traurig Jack A's law firm.
Well, Uncle Billy, if the tin foil hat fits...
I have a wooden stake in a Vampire Bank of the living debt.
Did Vampire Bank puff into tiny bits of smoke as is traditional?
Yes - I remember my father describing the plan [negative income tax] to me back then... made perfect sense but then my father was rather progressive and would be considered a 'leftie' if he was still alive.
My dad was a right as they come and he also approved. His point was that it was cheaper than any form of government safety net and essentially left charity up to charitable organizations and not the state. He also mentioned it would never happen as it would result in smaller government.
So there is this TV program on how Russians are dealing with financial crisis. They have been bailing out their "titans' too, however they are getting a board seat with managing rights & an equity stake with absolutely each monetary distribution. Their fin. minister said: "we aren't running a f. charity in here."
I wonder now, who is running bailouts more efficiently, us or them?
We would, if it wouldn't be about unions but would be about taxpayers money.
p.s. got to love Jap TV, the covered eyewitness documentaries on crisis in Japan, China & now Russia. They usually follow some private business manager on his quest to get funding while describing situation. They also take interviews with everyone in proximity of that manager starting from Officials and ending with production line workers. .
We have a negative income tax. It's called the Earned Income Tax Credit. We also have a universal living allowance. It's called the Standard Deduction... Of course both of these things imply that you are working...
Well it looks like a hornet's nest at this point. I dont claim to have the 'right' answer... maybe what we are doing now is the best thing... maybe not... When and where I grew up there were no homeless other than a few hoboes who came through on the trains.. nobody was rich, nobody was poor, nobody was hungry, everyone worked at physical jobs for the most part - I think there might have been a lawyer or 2, a doctor or 2, a banker or 2, but mostly everyone was farmers or mechanics or had other physical jobs... We dont live in that world any more, and if we cant come up with a way to manage ourselves then we will just have to deal with whatever happens...
Lucifer, really I think you've put your finger on it - the name wanted work, didn't it?
Actually, Friedman paid close attention to incentives - both positive and negative. He made a number of speeches on the subject, but it seems never to have found the right sponsorship. Or it had the right opponents.
Negative income tax?
WTF is the EITC but a negative income tax?
My dad was a right as they come and he also approved. His point was that it was cheaper than any form of government safety net and essentially left charity up to charitable organizations and not the state. He also mentioned it would never happen as it would result in smaller government.
My father really was a leftie in many respects and came to the same conclusion from the other end - like many lefties of his day he was as paranoid of excessive gov't as any right winger. That is a sword that truly can cut either way - as the recent Bush admin should have shown to lefties had they been paying attention.
The other reason neg income tax was 'better' was it was easily executable and much tougher to game than multiple conflicting state systems.
Any time lefties and righties agree you can be certain the established order won't approve. It will remain a dead issue I'm sure.
My thoughts exactly.
I still don't know why people, even theoretically smart ones, keep saying that we are in a 'recession.' This is not a 'recession' -- this is a bursting of a bubble and reset at the, new 'non-bubble' level.
As much as the TPTB would like to re-inflate here in the US, for all the reasons economists (and The Economist) has mentioned, I doubt that they can make it happen.
Unless we invent some new stuff that everyone's gotta have, and that everyone here can participate (gainfully) in making, I think we've got a long haul at the 'new' level.
Buffet owns See's Candies, though, so when folks want to soothe their feeling via chocolate, he's got a %. Good union workforce, solid product. Yum.
Lawyerliz: Neither would they.
Hollywood: Have I got a head-sized ostrich hole for you! Please feel free to hit the "ignore user" button in the future.
Oh, forgot to mention it on Chrysler threads. The UAW only gets one board seat. It seems to me since they are actually the ones with the most at stake, they should get at least a couple.
The UAW can't run anything with only one seat, and one seat isn't even really a figleaf. I'm not sure given the mental training they get even getting the whole board would do anything, but I
would prefer that they at least get a figleaf. So we could blame them if necessary!!
Oh, Spartans.
The 'black broth' or 'black gruel' or however you want to translate it must have been pretty grim. As was the retirement program.
Do you suppose they all really looked like they were designed by Praxiteles?
Shadow
Sorry for the delay, not at thecomputer too much today. I found a chart on wikipedia that supports some of your argument. Bill Clinton (famous Dem.) rearranged AFDC into TANF(Temporary Aid to Needy Families) in 1997. At the time there were 12,000,000 plus recipients, 11% poverty rate, and 6%(roughly) unemployment. By 2006 that number changed to a little less than 4,000,000 recipients(a huge decline!)roughly 10% poverty and sub 5% unemployment. Food stamps are also only available for 3 months now, then you're on your own. Putting a cut-off on those programs doesn't seem to have had many ill effects as far as I can see
Wiki Temporary Aid to Needy Families for some nice charts and background
"Good union workforce, solid product. Yum."
My aunt worked for them for 50 years+
Spoke with a lady last week who works for them currently. Her comment was, "good company to work for... when you're in, you're in for life"
Again, totally agree with you. I paid down all of my debt early (lucky timing of home sale), but savings... well, it is going to be a long road up for me and others. This is especially true considering the likely real UI rate, which I would estimate here in the SF Bay Area is at least 20% (includes all of the independent contractors and consultants who are either not working at all, or just barely working). My own healthcare COBRA cost for me and the kid is a little over 1k month -- so much for savings...
Why should I ignore you? You made some interesting points. If I felt you were stupid or not worth responding to, THEN I would ignore you. I ignore Jas and Michael nearly always.
I used to deal with Greenberg a lot when I worked for Chicago Title many many many years ago. They were all very smart and worked like dogs, to the point of craziness. I had one interview with them. I didn't want to work that hard and they didn't want me.
Traurig is dead now. Most if not all of the ones I worked with have left for one reason or the other. G, T is much bigger than just A.
Doesn't the UAW get 55% ownership? If so, can't they stack the Chrysler board as they see fit?
WTF is the EITC but a negative income tax?
It is.
au contraire, billy, i would argue that the things of which you speak are so transparent and obvious as to need no illumination. however, 50 million americans voted for W in 2004 (along with a similar amount for GOP reps around the time) and BHO thinks that Geithner is doing a heckuva job and that transparency stops at the fed's doors. so what? the real question is to whether or not we deserve better leadership.
"Traurig is dead now."
as is the business model of just about every large "diversified" law firm, which had the same approach to growth and leverage as your average large homebuilder.
Yeah, they got a decent percentage, but I understand they only got one seat, don't know why.
Maybe they understand they really don't want responsibility?
I meant the person, not the firm. Don't know about the firm. Have an acquaintance at Holland & Knight, he still has a job. Real estate partner. Haven't talked to him recently.
(with apologies to Bill Shakespeare)
The first thing we do, is lay off all the lawyers...
Doesn't the UAW get 55% ownership? If so, can't they stack the Chrysler board as they see fit?
I believe the UAW pension fund thingie - whatever they call it - actually OWNS the stock... in lieu of the payments to it Chrysler was supposed to make. The board that runs the fund is somewhat isolated from the actual rank-and-file... some sort of fiduciary function I'm not sure anyone, myself included, understands.
It will get interesting when their own retirement fund tells the rank and file to stuff it come next contract negotiation. Or they blow up for good. Real interesting.
Yep, interesing, dry.
Should I lay myself off?
yes, liz, i got that. and my point is that most of the firms in the "Vault 50" will be just about as dead as their namesake founding partners in the very near future.
guess who actually eats at those $30 entree restaurants that employ dozens, directly and indirectly, buys those high-margin seats at entertainment events, buys those 50K+ cars and 500K+ houses... all of the schadenfreude at seeing those biglaw jobs evaporate has obscured the fact that those hated suits supplied a huge portion of the disposable income that creates hundreds of thousands of jobs.
Sinkhole de Mayo
dryfly (profile) wrote on Sat, 5/2/2009 - 2:07 pm
It will get interesting when their own retirement fund tells the rank and file to stuff it come next contract negotiation. Or they blow up for good. Real interesting.
What happens to the golf course?
Should I lay myself off?
Go on strike - that will show you.
it would be nice to get another crack at TZA under 28... obviously, we'll get a big rally as the shorts pile on in attempts to short the BAC/C 'stress test' news. The comedown after the crack high will be juicy.
Most of the little guys/als like me seem still be hanging around. I can survive on practically nothing.
I suppose the bigs are salivating over restructuring all those empty towers they helped create; but I don't think there is any there there to pay them for it.
I just hate it when the data destroys my argument. As a BHL I was undoubtedly opposed to the changes to AFDC, and that chart surprised me...
ShadowInventory says - "When and where I grew up there were no homeless other than a few hoboes who came through on the trains.. nobody was rich, nobody was poor, nobody was hungry, everyone worked at physical jobs for the most part - I think there might have been a lawyer or 2, a doctor or 2, a banker or 2, but mostly everyone was farmers or mechanics or had other physical jobs... We dont live in that world any more, and if we cant come up with a way to manage ourselves then we will just have to deal with whatever happens..."
Agreed. And most folks had family somewhere rural with a farm, or at least a garden, to go help and get help from... I'm very worried that we are going to see lots of folks starving in about a year, unless there is some serious organized program to keep people (from the former middle class as well as current working class and homeless) fed.
The board that runs the fund is somewhat isolated from the actual rank-and-file..
For ERISA plans, the fiduciary duty of the plan administrator is to the fund itself and not the members. God help a beneficiary if she tries to sue the plan for any reason whatsoever. Hell, even if an administrator grossly screws up your claims (e.g. wrongful denial) and you die, there still is no case...
" ... those hated suits supplied a huge portion of the disposable income that creates hundreds of thousands of jobs."
"... restaurants that employ dozens, directly and indirectly ..."
Isn't trickle down wonderful?
yes, liz, even in down economies, divorces, car wrecks, complicated estates left by gramma who gave everything to the nice man from the church who was the only one to talk to her at the end, will still happen.
not so with epic m&a deals, IPOs, patent filings, big RE developments, etc
Have we reached the end of the line as far as ridiculous tort lawsuits are concerned?
There's no money to pay for lawyers, no money for settlement and soon not so many lawyers.
I suppose the bigs are salivating over restructuring all those empty towers they helped create; but I don't think there is any there there to pay them for it.
Vampires can't live on stones and turnips...
That depends, AMF. Have we reached the end of the line as far as the existence of corporate and individual professional negligence, fraud and incompetence? Perhaps you would prefer the Russian system of justice?
Peak Lawyers! Yes!
[I can dream, can't I?]
Liz THOUGHT she was appreciated.
Sob.
I'm gonna go eat worms, and plant my mariyellows. . . .
No, but they can sue all of the banks that didn't bother checking in with shareholders before engaging in a Ben-and-Hank shotgun wedding.
Awww, Liz. Don't take it so hard. If it makes you feel any better then sue me.
No tort payoffs and we instantly turn into Russia?
Only a lawyer would say something like that.
Tegnost, I would take the number of recipients at face value long before I took the poverty rate at face value. Lots of ways to game the latter. In any case, we spend far more on the drug war, and that's effectively negative welfare.
ROFL - Lay yourself off, that'll show you....
Gardens and small farms create a lot of jobs and apparently when there's a will , there's a way. Maybe the economy just rebuilds from the bottom? I love farm work. And maybe this will squelch the lib obsession with gun control as they need to get some protein on the table (pro gun Dem for my lifetime, it's the kansas in me even if it's only a genetic connection to the state), or at least change it to "use both hands"
@liz,
Do these names mean anything to you?
Dewey LeBoeuf
White & Case
Proskauer & Rose
You are not supposed to get food stamps unless you are practically destitute - no assets - but I dont know if they actually police that... I have never collected any entitlement benefits but people have told me it's not fun - they send little bureaucrats out to your house to count the tp squares...
those are all vault 50 firms, methinks
and only a moron would come to that conclusion from my statement.
As a child I had plenty of work to do to help out... one thing about growing your own food, the whole crop ripens at once and you have to harvest and preserve it right then - think up all night canning, out at daybreak picking a truckload of cucumbers by hand etc... and it doesnt end in the winter time either - that is butchering time and if you have never tried to handle a cow carcass that weighs a ton... hang it up, cut it up... This is why I want the govt to do things that will create a sustainable economy, so I can keep going to the market and restaurants, and not have to go back to all that labor...
Liz, not you... tin foil man from Hollywood.
HH,
Have you traveled much?
Many of our peers in the first world have avoided the charms of tort law, and their countries don't resemble gulags.
Is Dewey, Screwem, & Howe still in business?
"G, T is much bigger than just A."
I don't know what things were like in the early days, but I've heard that if you want something, anything, from Washington, if you put GT on a $1M retainer, it usually happens.
dryfly (profile) wrote on Sat, 5/2/2009 - 4:28 pm reply Ignore user I guess they kept it high so it wouldn't float out of the ground.
Bingo - like coffins in New Orleans.
BTW up here on the tundra they bury them REAL DEEP so they don't freeze up in a cold snap... that happened to my BIL on one almost snowless but MF cold winter in central Minnesota...
dryfly,
I'm confused.
Are you saying your brother-in-law's coffin 'froze up' (like they float up in N.O.), or his septic tank?
Uncle Billy Mental Widget,
Simon Johnson wrote a great read, if it's not true he needs to write novels and make a mint like Grisham.
Travelled and worked abroad plenty. Including a visit to three of the camps you so charmingly reference. Of course, the big one (or big half of one) didn't bother with a wrought-iron gate.
Spend a week in a wheelchair and get back to us on how you feel about ADA nuisance suits. Go in for a vasectomy and get a heart transplant and tell us how you feel about torts.
[Lay yourself off,]
In many cases, layoffs are quite attractive! Paid for vacation & sick time accrued, severance & extended health care benefits. Now Obama is carrying 2/3 of COBRA, so you can sponge a little there too!
I'm picking Dunkirk to win the Kentucky Derby, in a very weak field of horseflesh.
"cow carcass that weighs a ton."
Squirrel, fine, possum, trout, even catfish... but there's no way I'm going to butcher a cow. Willing to create an entire micro-economy around a butcher before I'm forced to do that.
I dont think you get many bennies when you lay yourself off from self-employment...
I have a trifecta of Friesan Fire, Dunkirk, and Mr. Hot Stuff.
well, you do get the beni of no longer paying that 15% SS tax off the top
Once you have butchered a cow or 2, it becomes second nature....
Lambs are a lot easier and just as tasty as beef...
The Who goes to 6...
WHO May Declare Outbreak a Pandemic as Flu Spreads (Update2) - Bloomberg.com
"Listen, comrade, if we jack this thing up there is no limit to the amount of loot we can squeeze out of the proletariat"
From the front page of yesterday's TBP blog:
Today is May Day, and while International Workers’ Day (Labour Day in the UK), means little in the USA, its a big holiday in Europe. Banks and markets are closed on the continent, (England celebrates on Monday).
Speaking with Mike Panzner this morning (his clients are mostly Europeans) made me think about this: Which region is the true Socialist state?
-Europe has cradle to grave health care plans, generous unemployment benefits, and free or subsidized college costs.
-The US gives away public assets (oil, gas, mineral rights) for pennies on the dollar, has huge subsidies and tax breaks, and bails out reckless speculators.
It turns out that both regions are welfare states — only in Europe, the natural population (i.e., people) is the recipient, while in the US, the corporate population is the beneficiary.
So....
Anyone celebrate Loyalty Day?
Obama Recognizes Anti-Communist Forebears | TPMDC
Loyalty Day - Wikipedia, the free encyclopedia
Shadow:
YouTube - MIDDLEFIELD.virals.003 - This is Spinal Tap
How about that - never heard of Loyalty Day... probably because there is no free food...
If the WHO needs more loot, they can go to 7, 8, 9, 10, and then over the cliff to - 11!!
Loyalty day is one of those knee-jerk reactions to communism that happened in a very scared post-McCarthy America, at about the same time "In God We Trust" was added to the currency, our defense against a godless Soviet Union.
No tort payoffs and we instantly turn into Russia?
ERISA expressly preempts torts suit against benefit plans. The rationale being that any payout or compensation would mean decreased benefits to the other beneficiaries.
watched c-span this morning, and wth did they have?
House testimony regarding the BCS v. playoffs. truly important stuff...
Here's another good blog worth checking every so often...
Mish's Global etc.
Today's tidbit - California pensions over 100k - one guy actually collects over $40k per MONTH!!
Dollar Value Menu:
2 Apple pies
2 tacos
1 AIG Salary*
*$460k in "other" compensation notwithstanding.
Uh oh looks like Nascar is going to get rained out tonight - like they need more problems too...
Nemo - found your missing monkey...
Police: Couple Ticketed For Hiding Monkey In Closet - Des Moines News Story - KCCI Des Moines
We don't need tort reform, we need legal reform
"Tort reform" is a straw man that the legal industry uses to forestall REAL reform
Something like "clean coal" and "hydrogen cars"
Bring back civics classes.
Add law classes to undergrad curriculum
Cut Law School to 2 years (like MA, MBA)
Create a new "legal-lite" class of professional
Seems like we need to restructure almost every industry.
They have ALL calcified because the system rewards those who seek and establish rents
by reinforcing their positions (every industry has big firms that essentially collude - via their
industry groups - to keep the status quo).
If we are going to cut welfare for the poor, lets cut corporate welfare too.
I' ve heard those names.
They don't exist in the same legal universe I do.
Actually, I suspect what I do is far more interesting. Tho much much less well paid.
Guitar Fans, man your bubble!
Guitar market strikes a nostalgic chord - Los Angeles Times
Stray thought (last for the day, one hopes):
Lots of Geithner glorification going on lately. James Kwak, Yale Law Student and contributor to BaselineScenario.com, wrote a bit of a defense of Geithner the other day. Then there was the big Time 100 most influential vanity piece, written by the son of Judge Guido Calabresi (Yalie extraordinaire). Geithner is on the board of something called "Center for Global Development." Board of Directors : Center for Global Development : About CGD Notice that "C." Fred Bergsten is too. And moreover, he's the head honcho over at the Peterson Institute. Guess who else is big at Peterson? Simon Johnson, who together with Peter Boone, and James Kwak, make up the "Baseline Scenario" troika. Tight little world, and no wonder James was asked to defend Geithner when seen in this light. But wait, there's more: "M." Peter McPherson CBoD of Dow Jones. Not a stretch to tie old "M" to Rupert Murdoch. Then there's Dani Rodrik, prof. of Political Economy at Hahvahd, and blogger extraordinaire. Frequently quoted by the other fellows at the top of the econ foodchain/echo chamber. Then good ol' Larry Summers (on leave), Sir Colin Lucas of Oxford and U. Chicago, Robert Macnamara (worn-out version of Rumsfeld), Amartya Sen of Cambridge & Harvard, and our man Stiglitz. Tons of World Bank types in the mix there. Paulson's there now. What is that fellow up to? Peterson... Peterson... Petros Peterson... how come he never speaks to us directly like Soros?
Add law classes to high school... and economics... and psychology too...
I have tried in vain to get local law enforcement to create something like "Cop lite" which is more of an assistant cop - to do things that dont require a uniform, gun or all the training... for example, vehicle VIN verification... The cop managers dont want to do it of course because it wont enhance their empire...
I agree with most of that, and would add that all except the top 50 or so law schools should be closed yesterday, and all state bars made at least as tough as CA if not much tougher.
Can a night of the long knives be coming sooner than later, as the republican party realizes that it's hitched it's star to radio stars of dubious value?
They've either got to come clean, or risk becoming even more meaningless...
Can we break the 300 comment mark before CR posts again?
I'm confused.
Are you saying your brother-in-law's coffin 'froze up' (like they float up in N.O.), or his septic tank?
Ba Ding Boom!!!
Good one - septic tank froze.
OK, no one every ask me for advice on a horse race....
ever, I mean
My pick got left on the beach @ Dunkirk.
It's so vewy vewy qwiet ... where are all the wascally wascals....
Mets and Phillies tied up bottom of the 9th...
lawyerliz,
If you bought a farm with multiple structures (house, barn, etc.) are there typically covenants in the mortgage that would prevent you from tearing down a barn?
How did you do, Bond Girl?
I think I managed to pick the bottom three horses....
all state bars made at least as tough as CA if not much tougher.
i think that CA is the only state that will allow non-JDs to sit for the bar. If the exam is hard enough, there's no reason why the state should require that an individual drop $100K just to take the exam, when competency is the primary issue.
I know someone who passed the bar in CA without a day in law school, and now he is a very 'in-demand' arbitration expert...
Well bummer on the horse race, bond girl, but trying to pick the top 3 in a race is like trying to win at Keno...
Abraham Lincoln didn't go to law school either, did he?
......."This is why I want the govt to do things that will create a sustainable economy [so I can go out to eat]"
.....more and more people are thinking this way. But, what do we do with the % that literally refuses to work?
The more our government does for them, the more they take. They have lived off other people for so long, they have no skills. I get one a month that promises the sky but doesn't deliver squat. The next homeless person you see, tell him/her you have a 6-hour job for them - you'll pay them $10. per hour and a meal. See how many bite - ZERO. (Unless they're Latino)
New strategy for betting on horse races: just bet on the longshot. Will likely pay off in the long run. Isn't this the philosophy with small cap stocks?
the notion that we are moving away from a fiat currency to an asset backed currency is playing out in reality. the implications are far reaching for currency valuations and global markets. when i wrote “ALL YOUR STOCKS ARE BELONG TO U.S.” last september i hardly believed the words coming off my fingers:
404 - PAGE NOT FOUND
but now, here we are with an asset backed dollar. most analysts have opined that expansion of the fed’s balance sheet will take down the dollar. i thought this too but i am not so sure anymore. it now looks to me like the fed is creating a new kind of currency.
will people buy it? yeah probably, after it goes on sale. afterwards dollar value will be closely tied to the content of the federal reserve balance sheet.
Worm can open.
"There is physical work that must be done and able bodied people must be motivated to do it. Wages and fear of starvation are the 2 motivating factors - fear and greed."
ShadowInventory: I've read most of this whole thread and all I can say is...I sure don't want to live in your world. Wow! Pretty damn bleak!. Hope you're not in a position of power now or anytime soon.
Some of us like, even love our jobs. Relatives of mine do manual-labor type jobs & you couldn't stick 'em behind a desk if you tried.
There are many poor people who just want a decent job with a decent wage that will support their families. With a decent job, you can send your kid to college so he/she will move up the ladder. The key here is jobs. The inner cities had jobs at one time but no longer. We kicked the lower-middle rungs out of the economic ladder. And we're busy doing the same with the middle rungs.
Dryfly & Byz Ruins (if you're still here): really enjoyed the history thread. Wanted to contribute more but the SO was pulling me out of the study...A list of Honey-do's. I did want to say and didn't have the time to do so, I agree with your assessment of Northern might...eventually the rebel hotheads would have been starved into submission. I have relatives who are Oglala Sioux/Rosebud Reservation residents and know many of the stories not told in our history books. Johnny Rebs would've been dealt with in similar fashion.
Paradigm Lost - I'm with you. Had to run, but really enjoyed belatedly reading that thread.
Buffett on inflation -
"The cost of recent massive government bailouts will likely by paid for through inflation"
"That's the easiest way to pay for these things, so that will probably be what happens..."
Buffett says taxpayers aren’t paying more - MarketWatch
2 years law school plenty.
And why do you have to go to college first, if you can already read and write and reason a bit?
I could've gone straight to law school, tho I am perfectly happy I went to college.
I suppose most high school grads can't adequately read and write, so 2 years jr college should do it.
And why aren't there courses in high school about areas of law that practically everyone runs into in their life? My civics courses were so incredibly boring I wouldn't wish them on anyone.
As if "how a bill becomes a law" without telling the kids about pork and campaign donations isn't just plain dishonest and boring both.
Lincoln read a LOT of books and I think had an apprenticeship. I learned far more working for Chicago Title than I did in law school.
dryfly (profile) wrote on Sat, 5/2/2009 - 5:07 pm
It will get interesting when their own retirement fund tells the rank and file to stuff it come next contract negotiation. Or they blow up for good. Real interesting.
My thoughts too - this will be an interesting development as far as how workers are represented going forward.
Excellent thought, Otis.
If there are income streams from these things.
But it's gotta be better than thin air, which is what we have now. An unexpected consequence of major proportions.
"One of the lessons that investors seem to have to learn over and over again, and will again in the future, is that not only can you not turn a toad into a prince by kissing it, but you cannot turn a toad into a prince by repackaging it. But very imaginative people in the securities market try to do that. If you have bad mortgages they do not come better by repackaging them. To some extent the chickens are coming home to roost for the mortgage originators and securitisers."
Warren Buffett, Financial Times, October 26, 2007
the fed is buying large portions of the U.S. economy, like 25%, with mouse clicks. good deal for them.
like it or not (and i don't) their purchases are the new backing of the dollar.
no way around it.
the implications are huge.
Well we flogged the welfare/workfare/ possiblilties pretty thoroughly in this thread so I'm not going to repeat anything - It would be great if everyone had a job they loved but most people work for the pay... workers need a stable economy and a stable currency even if they dont understand economics... So the way the govt can create a stable economy is to stay out of it as much as possible... I dont have all the answers but I do enjoy the debate and I am always ready to hear everyone's ideas, hoping to find one better than the ones I already know about... but I dont have any patience with the attitude that "we have to help these poor people"... We cant help them other than to show them how to help themselves... as long as they are able bodied that is, I make exception for those who are not physically able to support themselves...
A residential mortgage has language that sez you aren't supposed to trash the property, but in practice nobody ever checks this. I have never, ever, closed a farm transaction where the farm was supposed to keep running, and not be developed into a subdivision. City girl.
I would imagine there would be no prob, unless most of the value was in the barn.
Once you tear it down, what they gonna do?
Bond Girl (homepage, profile) wrote on Sat, 5/2/2009 - 6:55 pm reply Ignore user lawyerliz,
If you bought a farm with multiple structures (house, barn, etc.) are there typically covenants in the mortgage that would prevent you from tearing down a barn?
Bond Girl,
The whole 'covenant' yarn will be moot once starving mobs remodel the structures into slaughterhouses to supply edible horse-meat .
Argentina, Peru, Brazil and a few other Latin American countries in the 1980's all changed the names of their currency in an attempt to disassociate themselves from previous failed currencies. It fooled nobody.
Replacing our dollar with a super-dollar or what have you, is a emperor's new clothes gig, nothing more.
say they end up with a $5 trillion balance sheet.
US GDP was around $14 trillion when all the supposedly worthless assets were fully valued.
that there is over 33% of the former US economy.
i expect other nations to follow suit once they catch on.
the assets they are acquiring have real value.
Is there not some law that prevents the government from buying stocks or otherwise investing in private companies?
Not that I ever heard of, Shadow.
Anybody else??
lawyerliz - thanks
$1.75 trillion in securitized mortgages just last week.
ooga booga they are all over the map buying everything in sight,
with mouse clicks.
every dollar in your pocket is stock in that corporation.
Hm well that explains how BB can buy MBS and tbonds, and how Obama can fire a CEO I guess...
I think the Brits are taking CDO's etc onto their balance sheet too... I bet they are really glad they didnt join the Euro now... All the Euro countries have to go beg the central bank for a handout...
Lots of posters wanted backing for the dollar. Now there getting it. It might be crap,
but even manure can have some value. Thanks for making this ummm, transparent, Otis.
Obama's new paradigm:
Yahoo! 404 - Page Not Found
"We cant help them other than to show them how to help themselves"
Help themselves do what? What demand is there in the labor market of post-industrial America.
ShadowInventory,
I would like to hear that statement from you in a couple of years.. You still do not get it! There has to a floor on how poor can be for a modern society to work, and we cannot go back to the feudal and industrial age even if everyone wanted to.. Complex evolving systems cannot reverse themselves without killing everything in the system.
You cannot dissect a live rat and restitch it back into a lamprey, even if you could keep the organs functioning outside the body for a few hours. We have to create consumers who have income without jobs!
//but I dont have any patience with the attitude that "we have to help these poor people"//
I thought the European central bank couldn't give handouts?
Thanks Pavel, sound good to me, as to O's statements.
What is the point of spending all this money to save the financial sector, just to restore the financial sector to a lower level?
i lost a lot of money betting against the dollar since 2005.
now, i think there still will be a dollar takedown.
but when the dust settles the company that makes the dollars will own maybe 50% of the former U.S. economy.
and thereafter dollar prospects will be tied to the value of those holdings.
is this an improvement over fiat?
probably.
especially when you consider that government debt (which used to be all there was in the fed balance sheet) is going down.
look at it like this:
the fed is diversifying
with mouse clicks.
Samdog’s Haiku Moment™
~~~~
Saint Paul Redacted
Pitchforks, torches, pikes:
These three do not last--true; but
Often change thick skulls
~~~
sanity - Presuming you start with someone who is unemployed - 1. Take the first job you can get. 2. Keep looking for a better job and work your way up. 3. Train yourself to get better skills that have market value 4. Save 20% of your income for 20 years and become financially independent.
Notice there is nothing in there about spending $300 for a pair of sneakers...
for now, for the fed, money = mouse clicks.
probably a model that has limited days.
they are getting out of the fiat regime while the getting is good, utilizing the credit implosion black hole to create mouse click fiats with wild abandon.
those mouse clicks are gonna own half of everything.
"What is the point of spending all this money to save the financial sector, just to restore the financial sector to a lower level?"
I'm not an expert here, but it might be more economical to save the financial sector and lower it, than to let it collapse and then bring it up from nothing.
I think Dewey, Cheatum and Howe are the Tappet Brothers attys.
You know click and Clack?
@Otis,
My understanding is that the Fed is only buying Agency MBS and Treasuries. The other junk on their balance sheet is from loans, not purchases. OTOH, some of those were non-recourse loans. The Fed plans, and needs, to unwind a lot of those loans and purchases, eventually, to soak up the excess money in the system, but I don't think it will be as easy to reduce their balance sheet as it was to expand it. I don't see the Fed balance sheet as backing the dollar.
"The financial sector will make up a smaller part of the U.S. economy in the future "
Talk is cheap.
Coinz, not on purpose, but it may end up that way. Very very insightful.