NEMO

I'm still waiting for the calculation / multiplier that shows probability of a FC based on UE.... My guess is 0.25 to 0.33 because of leverage and extra long unemployment stretches..

Lots of those HELOCs are adjustable prime ± a few basis points. That so many are in trouble at such low rates is a harbinger for when the Fed is forced to raise FFR. We have definitely turned Japanese in this respect.

Rich, gold, silver, and commodities have been getting hammered, SLW down anoter %7 yesterday. Are they finished or are you still optimistic?

I'm still waiting for the calculation / multiplier that shows probability of a FC based on UE.... My guess is 0.25 to 0.33 because of leverage and extra long unemployment stretches

You should probably adjust for a given area - ie: Phoenix would have a higher multiplier than an area with less home price depreciation since presumably those homes have a chance at being sold for prices that don't require cash at closing.

HELOC delinquencies are still about a third of CC delinquencies. I think it's safe to say both are going much higher.

WFC on the hook for a lot of HELOC. Good luck in court, Uncle Warren.

AS:

Between 1628 and 1973 (the period of Eichholtz's original study), real property values on the Herengracht -- adjusted for inflation -- went up a mere 0.2 percent per year, worse than the stingiest bank savings account.

Amsterdam House; This Very, Very Old House - New York Times

“Delinquencies won’t improve until companies start hiring again and we see a significant economic turnaround.”

Question: Why would companies start hiring again in the absence of demand, and where will demand come from in the absence of employed consumers?

Answer: There will be fewer companies and fewer consumers and we will define economic turnaround as 'when you've bled all the blood you can bleed.

--bh

Vonbek, which quote would you prefer, P.T. Barnum or Oscar Wilde?

Blaming the minimum wage increase is a non starter. It does not have a significant negative impact. Just another conservative bullsh*t myth.

"A fool and his money are soon invited everywhere."

We forget, I think, that you don't have to be a cynic to see the world plain and then manage your affairs accordingly.

Vonbek, your generations's fault is in making excuses like children do. I just can't remember the last time when a banker or lender broke into my home with a shotgun and yes forced me...oh G_d...against my will..to borrow and buy. There is a word for pushers of anything...NO! You are in control of 95% of your life so take responsibility for it. You can change your decisions and life and, hence, change the consequences. The whole aregument of "they tempted me so I had to do it and it's their fault" reminds me of some al queda type saying it's a fault of the women who gets raped because she tempted me. NO...is it so hard?

Angry Saver:

Re: Your comment about houses always lose value

Typically, the house itself will lose value, but the land it sits on typically goes up in value. The land plus inflation usually just keeps up with the house depreciation. But, of course, these are not normal times.

Steelhead, re read, i was asking if it will cause more individual layoffs. I mean you are talking almost , what 75 cents an hour. or what 1/8th of the wage, will that be enough for some to lay off? Is the economy at the halmark carsd store at the mall or at borders or at the grocery store going to lay off, I was jsut asking, take off the colendar..

Rob Dawg:

If minimum wage had kept up with inflation, it would be in the $15 / hour range. So an increase to $7.25 (which has been baked in the cake for a long time as the law was passed at least a couple of years ago) is nothing that businesses that planned ahead couldn't handle.

Besides, how many of the lost jobs were minimum wage jobs?

The Pope on the global economic crisis, and proposals:

Yahoo! 404 - Page Not Found

“The number one driver of delinquencies is job loss,”

The number two driver of delinquencies is negative equity. Why throw good money after bad?

Burnside, I grew up with the personal responsibility mantra. I still have a lukewarm devotion to it. Ultimately you are responsible for your own happiness, and success and failure in life. But that assumes you have a field to play on. The banks have dug up that field, one great big hole all the way to China. How do you have hope for your future or your children when you see your country sold out from underneath you with no way to exercise your political choice since both sides are responsible.

nodhannum: I was speaking for my generation, not for me personally. I am okay, due to upbringing, but since most of the rest of my generation do act like children (I agree) who is at fault for not letting them grow up? There is a reason I am a stay at home dad who is home schooling my children, I don't think the way most of the people my age were raised, is the right way to go.

Still hold that when you have whole segments of a population acting without good judgment it is a systemic problem. Banks are pushers, enablers, whatever... sure we could say no, but we didn't. So keep blaming us as we go down in flames. Doesn't fix the problem.

"nimum wage had kept up with inflation, it would be in the $15 / hour range. So an increase to $7.25 (which has been baked in the cake for a long time as the law was passed at least a couple of years ago) is nothing that businesses that planned ahead couldn't handle."

Head, meet wall. if COMPANIES had kept up with inflation, then every worker at MickeyD's would be getting paid $15/hour and a hamburger would cost $8 (or some other some such high amount for pseudo food). Any company that is paying minimum wage will pass the increase on to you. To the extent that their product is subject to price elasticity of demand, they will see decreased sales and will, consequently, have to eventually trim staff to maintain their target margins.

Off to do some pseudowork in what passes for the real world.

OT, but a personal McNamara story:

I was in Moscow in the fall of 1985, and had a conversation with then Colonel (later General) Geli Batenin. It took place at the headquarter of the Novosti Press Agency (APN). I had with me some open-source information from Howard Morland, which asserted that the US would have a first-strike capability against the Soviet Union by 1990.

Batenin exclaimed: McNamara was here ten days ago with the same information.

Things happened in Washington, perhaps partly as a result of this conversation.

Batenin, btw, commanded a unit of SS-18s, and later became adviser to the Russian government on nuclear weapons.

States with the highest minimum wages

Washington $8.55
Oregon $8.40
Vermont $8.06
California $8.00
Connecticut $8.00
Illinois $8.00
Massachusetts $8.00
Nevada $7.55
WashingtonDC $7.55
New Mexico $7.50
Michigan $7.40
Rhode Island $7.40
Ohio $7.30
Colorado $7.28

"Higher minimum wage coming soon
Federal wage floor will rise to $7.25 an hour on July 24. Hike will be felt in 29 states. Can the job market handle it?"
Minimum wage increase slated for July 24 - Jul. 6, 2009

Alaska update:

Legislators raise Alaska minimum wage
By Rena Delbridge

Published Monday, April 20, 2009
JUNEAU — The Legislature approved a bill boosting Alaska’s minimum wage and permanently keeping it 50 cents higher than the federal standard.

On Jan. 1, the will be boosted to $7.75 per hour, and it will always sit at least 50 cents above the federal minimum wage.
File not found

pavel,

In response they had Perimetr.

Running to this day.
--bh

OT, and sorry if this has been posted before:

Big Banks Don't Want California's IOUs - WSJ.com

WF, BoA, et al won't take CAIOUs after Friday.

Goldman Says Morgan Is All Wrong About Fed’s Quantitative Exit - Bloomberg.com

Meltzer’s View

“I agree with Morgan Stanley that the markets are too sanguine about inflation,” said Allan Meltzer, a Fed historian and economics professor at Carnegie Mellon University in Pittsburgh. “The Fed absolutely has the tools and know-how, but the question is, will they have the guts to use them? I don’t think there is a snowball’s chance in hell they will be willing to tighten to slow inflation down.”

Goldman Sachs says the risk is in the other direction, that the Fed may have a tougher time easing credit further should the economy deteriorate. Jan Hatzius, the company’s chief U.S. economist in New York, said in a July 1 research note that it’s “very unlikely” the Fed will “lose control” of inflation and that the Fed should err on the “accommodative side” of monetary policy.

‘Screw-Up’ Scenario

“The market seems to have a bias in its thinking that somehow the Fed is going to totally screw up,” resulting in inflation, McKelvey, who used to work at the Fed, said in an interview. He cited conversations with clients and what he’s read in the press, as well as the rise in Treasury yields and trader expectations of Fed interest-rate increases in recent weeks.

Buyers of California IOUs will have to prove they are the legal owners of the promissory notes to cash them in when they mature in October.

California Treasurer issues IOU trade rules - Los Angeles Business from bizjournals: 

come on.... this is turning out like a typical CA program....

blackhat (profile) wrote on Tue, 7/7/2009 - 10:19 am

pavel,

In response they had Perimetr.

Running to this day.
--bh

It's a very limited system, no?

Just to be clear, I'm not accepting CA IOUs either.

When Jan Hatzius says something I tend to listen...

@Nate - do you have a link the substantiate that claim about WF, BoA?

So, are we expecting contractors to sue CA for payment in cash instead of IOU?

Nevermind, here it is:
Bank of America sets cutoff for redeeming California IOUs - Los Angeles Times

I have a BS in polysci (yes I was headed for the State Department once upon a time before I came to my senses), the problem with anti-incumbency is it puts more power into the hands of political elites and the incumbents who do get re-elected. There is no one more powerless than a new junior member of congress. Now you get a lot of them together with a platform...maybe, but then they are still controlled by special interests. I still hold the worst thing to happen to our Republic was the introduction of direct election of the Senate. Just my two cents. The bureaucrats really do run the country.

Great read here on Treasuries

Market Skeptics

Yep, houses depreciate alright.
Wood rots, brick deteriorates, nature will take over your place in a hurry if you;re not careful.
When will the media admit the Truth?
I'll say once they are no longer part of the fascist machine known as modern day America.

RockyR:

Head, meet wall. if COMPANIES had kept up with inflation, then every worker at MickeyD's would be getting paid $15/hour and a hamburger would cost $8 (or some other some such high amount for pseudo food). Any company that is paying minimum wage will pass the increase on to you. To the extent that their product is subject to price elasticity of demand, they will see decreased sales and will, consequently, have to eventually trim staff to maintain their target margins.

If executive compensation had been held to inflation, you might have a better argument, but it hasn't. The Pareto distribution of wealth in the U.S. today is far above the "normal" 80% held by the top 20%. The top 20% now control 86% to 87% of all assets. This means that the bottom 80% only own or control 13-14% of all wealth and assets. I believe this is unsustainable.

You know, I am really bothered by the fact that executives who drive their companies into Chapter 11 bankruptcy are allowed to take their worker's pensions and health care dollars as their personal income through "retention bonuses."

Economic boards like this one tend to be dominated by those who are Republican / Libertarian in their thinking. Practice law for 12 years (particularly bankruptcy law, like me) and you will be disabused of that notion pretty quick. Assuming you have a conscience, of course.

I am starting my search for a rental in downtown Minneapolis. I am going to try to negotiate with some landlords who have had high-end units on the market for months now. I will report my experience.

@OkieLawyer

We are in agreement on your points about wealth distribution. And, no, our current situation isn't sustainable. However, the PTBs will fight at all costs to maintain their margins. A minimum wage increase doesn't help the peons in this fight.

I also agree that Chapter 11 is a joke. There is tremendous reform needed. Wait for it, it's coming...

No, you misunderstand what I wrote. Col. Batenin said that the US would offensive capabilities from space against counter-value ground targets in the SU, such as Moscow. He never suggested that McNamara referred to space-based weapons, but rather to earth-based US offensive weapons with the capability of delivering a first strike.

Pavel,

Even on old C-3 boats we had strategic targets in the SU long before 1990. Even the C3 boats warheads were capable of hitting the infield of a Su ball field when using the rubber on the mound as a target.

Given that each SSBn would even get off at least 3 missiles before being shot at by SU subs, and each of those 3 had 10-12 warheads, given what we had targeted and what we had ion the water, i can assure you that some of our missiles were first strike and some were retaitory... 10 targets per missile was ...

We had land based nukes out of Germany positioned in EU and those were easy to program as well...

"......our current situation isn't sustainable. .........A minimum wage increase doesn't help the peons in this fight."

......"Lunchables" have still increased from $1.25 to $1.87 during the last two weeks (from Wal-Mart)

.......Large cans of coffee have decreased in size from 39-oz to 34.5-oz.......and you'd never even know from looking at them.

Who says we don't already have inflation? The pittance minimum wage increase won't nearly address all the increases.

The Russians also had that radio beam weapon that knocked out avionics. I don't know how developed it was, but when my father was stationed in Germany they tested it three times, and downed three blackhawks. Locked the tail stabilizer and caused the bird to dive right into the ground.

It's so nice when the schadenfreude of the commentariat is also a part of the problem, isn't it.

Vonbek777 is absolutely right. Why is nobody asking about supply?

How is that the commercial banks are able to lend as much money as they want?

Yes, if there wasn't a demand for it, they wouldn't be able to do it, and that right there is probably the explanation for the generational effects around this thing.

But even so, it's not the root cause. Not by a long shot.

-- w

Bloomberg.com

U.S. Home Prices to Fall Through 2011’s First Quarter, PMI Says

July 7 (Bloomberg) -- Home prices may fall in more than half of the largest U.S. cities through the first quarter of 2011 as unemployment and foreclosures rise, mortgage insurer PMI Group Inc. said.

Thirty of the 50 biggest metropolitan areas have at least a 75 percent chance of lower prices through March 31, 2011, Walnut Creek, California-based PMI said in a report today. The decline is likely to spread to “all regions of the nation” from California, Florida, Nevada and Arizona, the states most affected by the housing slump, PMI said.

“The housing market has been hit by a demand shock of high unemployment and a supply shock of distressed foreclosure sales,” LaVaughn Henry, senior economist at PMI, the fourth- largest U.S. mortgage insurer, said in an interview.

US Commercial Real Estate Market Volatility Up Sharply

Research Recap » Blog Archive » US Commercial Real Estate Market Volatility Up Sharply

"Please don't feed your family "Lunchables" with all that fresh cheese around."

.....the Mrs eats one a day while slinging $1 drafts at the family pub......She's not gonna start listening to me NOW!

blackhat,
True...MADness still existed.

My comment started as a McNamara story because he's just passed on, RIP. I won't comment any further on the nuclear war-fighting arrangements of the past. But the last thing you want to do is tempt your opponent into a launch on warning, or even worse, a launch on suspicion. There have been two incidents at least in which we almost bought the farm in terms of triggering off something of the kind. God helped us.

I had a subsequent conversation with Gen. Batenin in October of '91. The subject was Russian command and control. He was a worried man.

So apparently accordingly to the kooks, the world is going to end tonight because of this rare penumbral eclipse. I think that this may be the secret sauce of the administration's new strategy-convince the world that the world will end every week for the next few years and we will all party like there is no tomorrow and re-inflate the bubble. Worked once didn't it?

jebus...

headline on Drudge...the irony of timing..

"
4:15 AM: OBAMA SAYS FUTURE DOES NOT BELONG TO THOSE WHO GATHER ARMIES OR PLANT MISSILES...
7:45 AM: Suspected US missiles hit militants..."

@Okie - it's good to see you, been a while!

Assuming you have a conscience, of course.

it's not so much that they lack conscience, it's just that the overriding preoccupation is with "mine". Where does that fit into Erickson's developmental stages?

"You've got a family pub and cows?"

LOL.....I don't have squat other than this pile of sand, a batch or two or three of kids, critters, and cukes - the bars are the Mrs side of the family.

Minimum wage in 1990 = $3.80
link 

$7.25 (2009 dollars) = $4.48 (1990 dollars)
- Wolfram|Alpha 

$3.80 (1990 dollars) = $6.16 (2009 dollars)
- Wolfram|Alpha 

• minimum wage is beating inflation? Or is purchasing power decreased?

[$15.00 (2009 dollars) = $9.26 (1990 dollars)]
- Wolfram|Alpha