Recession is over. You've heard of a jobless recovery, get ready for a stock-market-less recovery !

I have friends who manage factories in the far west end of the 'Philly Region'... they would say it is weaker than those numbers indicate. But then they might be feeling additional pressures from Midwest automotive [very weak].

what is the down draft of that?

This is America son.

Companies filing BK is a positive for Mr. Market.

ajax.googleapis.com --WTF is this, and why does it make my CR page load endlessly?

Companies filing BK is a positive for Mr. Market.

I forget which poster mentioned yesterday: The fact that the treasury let them go bankrupt will be viewed that the economy is strong enough to forego bailouts. Rally time.
(paraphrased a lot...)

ajax.googleapis.com --WTF is this, and why does it make my CR page load endlessly?

kcoop would have a better answer, but it's probably your autorefresh.

From the last thread:

During the big rally in the financials yesterday, this little news item disappeared pretty quickly from Bloomberg:

JPMorgan, Goldman 2008 Mortgage Resecuritizations Cut to Junk - Bloomberg.com

(begin article)
JPMorgan, Goldman 2008 Mortgage Resecuritizations Cut to Junk

By Jody Shenn

July 15 (Bloomberg) -- Originally top-ranked securities created in repackagings of home-loan bonds last year by JPMorgan Chase & Co. and Goldman Sachs Group Inc. had their ratings cut to below investment grade by Moody’s Investors Service.

The securities were among the 15 classes of five so-called Re-REMICs from 2006 or 2008 whose grades were lowered by Moody’s because of the “deterioration in performance and ratings” of the underlying bonds, the New York-based ratings firm said in a statement today. One class rated Aaa in the JPMorgan deal from December was cut to B2, or five steps below investment grade.

Securities firms have stepped up the use of such resecuritizations this year in order to create more valuable debt to sell or restructure investors’ holdings, expanding last month from home-loan bonds to commercial-mortgage securities and collateralized loan obligations backed by company loans. More than $27 billion of home-loan bond Re-REMICs have been issued this year, up from $17 billion for all 2008, according to a report last month by Bank of America Corp.

Re-REMIC stands for “resecuritizations of real estate mortgage investment conduits,” the formal name of mortgage bonds. Some of the new securities created in the deals offer investors an additional layer of protection from losses and downgrades, which boost the capital needs of banks and insurers and can force some investors to sell debt.
(end article)

More financial alchemy from our best and brightest. Does anyone know if we, the taxpayer, are the proud owner of these formerly AAA securities via the Fed. Did selling this crap to investors (again) contribute to their stellar profits and coming bonuses? Normally I am a calm person, but it is getting to be pitchfork and torch time.

do you think it is because Im using adblockplus, and it ends up being a stalemate vs the power of google?

OT: MikeMorgan wins a round. LOL@goldman for providing free advertising for his site.

In a surprising conclusion in what has been a real life David vs Goliath battle, Florida-based estate agent and investment adviser, Mike Morgan, will be allowed to keep his GoldmanSachs666.com site up and running.

I had a problem with google-analytics yesterday on HCN but it appears to be gone...

thanks w.w.n.m. - Im using firefox and will look into it. (and now, back to our show....cricket cricket.)

Or meeting to decide how to close up shop.

That was happening before the CIT BK, and it will happen after.

Oh and don't take my word for it as well. I'm just someone with the same thought as you. I think the conflicting news stories in the past couple days re: CIT should expose just how shilly business reporter are. A week ago CIT bankruptcy was portrayed as small business doom. Yesterday into overnight its now being treated like a sore throat and there was one article saying the failure wouldn't have much impact. So I guess what I'm saying is that my guess is as good as any.

I just kind've think of CIT like a bank. If they make bad loans they deserve the pain of not getting paid back. Taxpayers shouldn't be responsible for making them whole. That's just what we've done with TARP. We are the ones covering up for the banks bad loans.

10:30am Natural gas extends gains, up 4.5% to $3.427

10:30am U.S. natural gas inventories rise 90 bcf last week

At 2,886 billion cubic feet, stocks were 589 billion cubic feet higher than last year at this time and 454 billion cubic feet above the five-year average.

Supply and Price both go up?
Can someone explain this to me?
I'm confused.

Okay, here is a black swan event....the world goes to war over swine flu vaccines?

Fight for swine flu vaccine could get ugly

What a weird year 2009 has been.

CIT made loans on receivables. Lots of companies have to wait 90 to 120 days to get paid from buyers, so they keep afloat by borrowing against the receivables. That is very common in many sectors, even Drs offices.

It will become less common. Having 6-9 months of operating expenses in the bank will become fashionable again.

CIT made loans on receivables. Lots of companies have to wait 90 to 120 days to get paid from buyers, so they keep afloat by borrowing against the receivables. That is very common in many sectors, even Drs offices.
It will become less common. Having 6-9 months of operating expenses in the bank will become fashionable again.

From 3-6 months behind to 6-9 months ahead = 1 year of GDP.

That is the crux of the matter.

HomeGnome,
That first line: The Year of the Earth Ox evokes stability and dependability....okay I just poured coffee down my shirt...not funny to make me choke...I think 2009 will be remembered as the year of the Return to Slavery or Serfdom...take your pick.

Supply and Price both go up?

No, inventory and price. When this happened with oil I assumed it was a sign of speculators building their holdings. Could be the same here, people buying up the stuff to try and profit later. Haven't checked the markets for contango though.

Sorry for slowly catching up from a previous thread.

There was great interest about Elizabeth Warren's scholarship earlier.

Have you considered that:

Using the very data from her book “The Two Income Trap”, Todd Zywicki ( The Volokh Conspiracy - Evaluating The Two-Income Trap Hypothesis: ) shows a clear example of “tax myopia” by reversing the book’s findings by taking taxes into explicit consideration.

His analysis shows that the average single income family in the early 1970s had more discretionary income as a percent of their budget (46%) than the average dual-income family in the early 2000s (25%).

In contrast to the conclusions of “The Two Income Trap”, he shows that this not caused by rising health, mortgage and automobile costs but that it is caused by rising taxes (from 24% of budget to 34% of budget).

To quote Todd’s post: “Overall, the typical family in the 2000s pays substantially more in taxes than in their mortgage, automobile expense, and health insurance costs combined and the growth in the tax obligation between the two periods is substantially greater than the growth in mortgage, automobile expense, and health insurance combined”.

Taxes are the problem.

Why do we seek salvation from those who cannot see that taxes are the problem? - even when it shows in their own data.

These two decay so much in a year, this has to be a sure thing.

IT: Sure things aren't.

JP - I just checked the option volumes on those... yup... it sucks. It's a casino.

So no chance in hell are we going to get a blu-ray release of Fight Club anytime soon...

Police: 'Fight Club' inspired NYC Starbucks blast

I am still surprised we got Dark Knight...Heath Ledger's Joker is one of the most dangerous characters to be portrayed since Fight Club...but it was a comic book, not to be taken seriously. Of course I am the only one who cheered at the end of Fight Club when I saw it at the theater...so maybe it is just me.

To quote Todd’s post: “Overall, the typical family in the 2000s pays substantially more in taxes than in their mortgage, automobile expense, and health insurance costs combined and the growth in the tax obligation between the two periods is substantially greater than the growth in mortgage, automobile expense, and health insurance combined”.

Taxes are the problem.

On the other hand, if I get sick, the hospital can do much, much more than provide me with clean sheets and a bedpan.

"I think 2009 will be remembered as the year of the Return to Slavery or Serfdom...take your pick."

.....I see it from the other side of the bowl........it will be remembered as a time when more people "returned to personal independence" - LESS reliance on anyone else. If not, lets hope most of those serfs or slaves don't breed.

The dramatic event must be the immaculate recovery...

Bunning Says FDIC Warned Lawmakers of Banks at Risk (Update1) - Bloomberg.com
Federal Deposit Insurance Corp. Chairman Sheila Bair told lawmakers that 500 more banks are at risk of failure “unless something dramatic” happens, Senator Jim Bunning said.

GDD9000, if you are on windows, change your hosts file for that url to point to 127.0.0.1. If it is for ads, you won't care. If it is for the other blogs' headlines(on the right), you would not load them anymore (you should find out quick what they are accessing at any rate).

BSR,
Where are you seeing evidence of all this self-empowerment and return to self-reliance...from my neck of the woods, it seems we the programmed masses jump right in tune with the pied piper. I see very little evidence of independent thought or a desire to be free...I mean for godsakes can't even go to the grocery store without men and women discussing which brand of toothpaste to buy over the damn cellphone...all decisions by group think. That is what I see all around me every day. I hope your view is the truer.

Thanks uncle...i'll give it a go.

Businesses who rely heavily on loans and mortgages are no different then many underwater home owners. Underwater mortgages Heloc's and CC debt. Responsible business uses credit wisely and not for leveraged profits today.

“Overall, the typical family in the 2000s pays substantially more in taxes than in their mortgage, automobile expense, and health insurance costs combined and the growth in the tax obligation between the two periods is substantially greater than the growth in mortgage, automobile expense, and health insurance combined”.

I doubt that is accurate - show me some data.

My guess is it is true for high income individuals but NOT for median & below who (1) have much lower marginal tax rates and (2) spend every penny they earn on basic expense [like the ones you list].

For most people it ISN'T about taxes... for a few it is.

I'm guessing Crocs is not too big to fail...

Once-Trendy Crocs Could Be on Their Last Legs
Last year the company lost $185.1 million, slashed roughly 2,000 jobs and scrambled to find money to pay down millions in debt. Now it's stuck with a surplus of shoes, and its auditors have wondered if it can stay afloat. It has until the end of September to pay off its debt.

"The company's toast," said Damon Vickers, who manages an investment fund at Nine Points Capital Partners in Seattle. "They're zombie-ish. They're dead and they don't know it."

Vonbek...tooth paste and cell phones..

I actually look forward to the day the cell phones die...

So die die american cell phones die,
drove my chevy to the levee and I didn't hear a ring nearby
this good old boy was drinkin whiskey and rye
singin this will be the day cell phones die
this will be the day I wave good bye
to cell phones that occupy
everyones life

we have now officially entered the world of "crony capitalism"

The Obama administrations policies are reminiscent of the Vietnam war- "we have to destroy the village to save the village"

Lets destroy the free market so that we can save it !!!

Businesses who rely heavily on loans and mortgages are no different then many underwater home owners. Underwater mortgages Heloc's and CC debt. Responsible business uses credit wisely and not for leveraged profits today.

Also not true... true for services [like nail salons] but NOT true for production based industries who are (1) very capital intensive and (2) low margin and (3) cyclical.

The wet mill I worked in had a replacement cost of a billion dollars - who is going to have that in cash sitting around? GS maybe... if they leverage.

On top of that the tax code makes it impossible to 'save' at the corporate level to fund out of cash... they are allowed to set aside some reserves for future cash needs but not a lot - they either have to pay it out someway OR pay taxes on any pile of cash.

As a result 'working capital lines of credit' are absolutely the life blood of modern enterprises. Without them we'll all be running hot dog stands and no one will be producing electric power, drilling for oil, milling wheat, etc. All capital intensive & low margin.

Vonbek,
prisoners getting pc's while kids dont eat...

I see why we have fallen as a nation right there....

papillon take me away....

Vonbek777,

The use of credit wisely the point. If the business has been around for some time some profits should have been retained for self financing. We even personally loan our businesses money. We made lots more money by keeping banks out of our day to day cost. Taxes are not the problem to making money for small business.

Charles Kiting (profile) wrote on Thu, 7/16/2009 - 8:28 am

Obama got elected because he was in tune with the majority who want to become more dependent on government.,

Don't conflate a plebiscite for an expression of popular will.

creditcriminalslovetarp,

I would have agreed with you before going into the prisons. I have said this before, but my view of the world changed after putting those labs in. Most of the inmates were just kids. Mostly Hispanic and Black...all of them looking scared and lost, and medicated. These labs were set up for remedial elementary learning software. Basic reading and math. These kids don't have a future, many don't have a past worth remembering. Not saying people shouldn't do time for crime, but these inmates weren't the scary criminals I was expecting...

RE: Cell Phones

Keep the cell phones but get rid of those who think that everyone around them cares what they are talking about.
LOUD TALKERS!

I just got back from the pet store and had to wait in the one line while a woman WADDLED out to her car for the remaining .18 on her purchase.
No common courtesy these days.

All I know is, they can't take my home - it's paid for.

Sure they can. Eminent Domain is one way. Raising your property taxes beyond what you can pay is another.

Basel - that really makes companies sound like vampires, doesn't it?

Go Basel, it's your birthday!

But seriously...get that CIT trigger finger ready. The announcement of BK could come while you are making coffee.

It might be true for something like average household.

Not everyone pays a mortgage or insurance premium and people pay all sorts of taxes hidden in daily products from gasoline to phone bills.

How big is this news about MGIC not writing any new policies?

stock is up 14%

hmm

Well, of course they can, GDD. There's no viable reason they would want my old run-down place, but who knows? This is not a typical area. No big homes, no freeways, no malls, no industry, no commercial - hell, we didn't even have electric run out here till the mid-60s nor phones till then. It's an old Indian hideout with a bunch of derelict trailers that hasn't changed much in the last 150-years. I'm just hoping to be left alone for a while, is all.

CIT- company in turmoil....

bad underwriting of small business loans is the cause of their demise..nothing more, nothing less..

Cinco -....$3 bil. is pocket change for GS..and supposedly, they passed after taking a sniff. Youd think if there was any meat on that carcass, the vulture would have picked at the bone.

Vonbek777,

That is the short term right thing to do. It advanced the business growth and the action justified the project. Lots of up side profit for him. Now does he save to reduce the next big project or slow time? The businesses that run completely on bank money daily including payroll are the problem.

Those of you that persist in playing 3-Letter-Monte...

If it was common knowledge that a Vegas casino was cheating it's clientele (dealing from the bottom of the deck, rigged dice, slot machines that take in 3 times as much as they give out, etc) you wouldn't want to gamble there, would you?

The veneer of respectability on Wall*Street is mere microns thick~

This County (Nye) gets a BUNCH of Fed Money every year because of PILT (payments in lieu of taxes) - and tends to be pretty tight with its pocketbook by modern standards. They allow gambling, drinking, brothels 24-hours a day, and have open and concealed carry rights (and many DO), so it tends to attract a "harder" crowd than some. I'm a choir boy compared to most around here.

I gotta go to work............happy shopping......

Trillions of dollars to back stop financial/non-financials yet Marines short on food, uniforms, waste disposal bags and ammo in Afghanistan

U.S. Marines pushing deeper into Taliban territory in Afghanistan’s Helmand River Valley are short of basic equipment and supplies ranging from radios and vehicles to uniforms.

Here in Garmsir District, critical supplies of food, water and ammunition are being dropped to troops by helicopters ferrying sling-loads to bypass roads implanted with bombs, leaving little room to carry other gear.

Several Marines from one company, for example, ripped their pants during an arduous foot march and are still waiting for replacements — some in boxer shorts, officers said.

“We’re short vehicles, we’re short frog-suits [uniforms] ... radios are trickling in,” said Gunnery Sgt. Robert Larosa of 2nd Battalion, 8th Marine Regiment. Larosa said that the lack of basic gear is unprecedented in his experience, which includes seven other deployments. “This is a first,” he said.

Battle for Helmand
- Marines Waiting on Basic Supplies

I doubt that is accurate - show me some data.

The data was in the article that you didn't read.

Then they are either wrong or liars.

The income of median earners and below do NOT face high rates... considering personal deduction, progressivity, etc. Even with state income, sales & property taxes thrown in most people [median & below] do not spend as much on taxes as other expenses.

For the wealthy - probably true but not the majority of individuals. It just doesn't add up.

Now somebody could make the case that median & below should carry more of the load - but currently they don't.

Actually, the net income taxes paid by the bottom 60% of tax filers is 0, so I don't think this could possible be true for the typical family.

Thank you... my point exactly.

Actually, the net income taxes paid by the bottom 60% of tax filers is 0, so I don't think this could possible be true for the typical family.

That would put the median tax payment at zero. That sounds as correct as the original tax post.

zywicki is a wannabee-Mankiw, but i think his argument is not based solely on income tax, but rather all taxation: sales, property taxes, government fees, etc.

"Region's manufacturing still experiencing weakness"

Still !? C'mon you guys everyone else is "recovering". Anyone think we will hit 10% on the next UE report?

So,

Dogface G.I.'s join up a few years ago when money is flowing like water in the USA, perhaps they joined up on account of patriotism or jingoism or jobism, or maybe an undetermined ism?

They are fighting an invisible foe that refuses to identify himself, in 110 degree heat-with the supply chain broken, as an added bonus.

Just how upset are these guys gonna be when they come back to the world?

" JP (homepage, profile) wrote on Thu, 7/16/2009 - 11:52 am

Actually, the net income taxes paid by the bottom 60% of tax filers is 0, so I don't think this could possible be true for the typical family.

That would put the median tax payment at zero. That sounds as correct as the original tax post."

Read it and weep:
The 0% Tax Rate Solution - WSJ.com

More JPM Comments on Modifications and Foreclosures

Someone did not realize that Aghanistan is on the opposite side of the planet in the middle of the world's largest continent.

Amateurs study tactics. Professionals study logistics.

" Charles Kiting (profile) wrote on Thu, 7/16/2009 - 11:58 am

It's an old Indian hideout with a bunch of derelict trailers that hasn't changed much in the last 150-years. I'm just hoping to be left alone for a while, is all.

Sounds like a perfect spot for a solar and windmill farm."

Can you eat those?

I specified "Income Taxes", not all taxes. See:
http://online.wsj.com/article/SB124753094923135901.html

I saw that but the poster above I believe said 'taxes' as in unspecified. Your point is still valid though - just that even with property & sales & FICA thrown in the tax burden on lower income isn't huge relative to other cost of living items.

RE 60% pay nearly 0% income tax:

That figure subtracts the poor's EITC from what a typical middle-class family pays but the middle-class is still paying maybe $5k (if 10% @ $50k), not $0.

About 60% of families pay $0 mortgage because they have no mortgage so it is not hard to have taxes higher than $0 mortgage (60% was from the 1990s, might be different now).

$50k income =
$5k federal income tax (if net 10%)
$3.8k FICA ($7.6k if count employer match lowering wage)
$3k property tax (if $200k @ 1.5%)
$300 gas tax (if 12k miles, 20mpg, $0.50 tax per gallon)
? state/local income/sales taxes
...

You are making the mistake of conflating "median earners" and "households". For a two-median-income household, the tax rate is higher than a one-median-income household. That was the point of the article you still haven't read.

Doesn't change anything - their analysis doesn't add up. The rates aren't that high for EITHER.