Tue 20 Oct 2009
From the Star Ledger:
Solomon Dwek, the key witness in the massive federal corruption and money laundering sting that rocked the state’s political landscape, is expected to plead guilty today to charges in connection with a $50 million bank fraud in 2006 that first brought him to the attention of authorities.
Dwek, 36, is to appear first in federal court. Later in the day, he is expected to be in Superior Court in Monmouth County to plead to similar state charges, according to a person familiar with the investigation who did not want to be identified because he was not authorized to speak about the matter.
Officials at the U.S. Attorney’s office issued an advisory saying only that “a central figure” in the July 23 arrests of 43 people on public corruption and money laundering charges would appear in federal court Tuesday before U.S. District Judge Jose L. Linares in Newark. A spokesman for the office declined to answer questions and Dwek’s attorney did not return calls to his office.
Dwek was initially arrested on the fraud charges in May 2006 after he deposited a bogus $25.2 million check into a closed PNC Bank account he controlled. According to the original criminal complaint, Dwek went to a drive-in window at the bank’s Eatontown branch. The check was drawn on an account he controlled, but the account had been closed and had no money in it.
From the Times of Trenton:
Housing defaults in N.J. still high
The number of residential foreclosure filings in Mercer County was up 39.1 percent in August over the same period last year, keeping pace with a statewide increase of 40 percent, according to the latest figures available from the state judiciary.
Lenders started 5,757 foreclosure proceedings against New Jersey homeowners in August, up from 4,107 during the same month last year.
In Mercer County, the August foreclosure figure was 249, up from 179 a year earlier. The August 2009 figure also is up sharply from July of this year, when the county notched 198 foreclosure filings, a 25 percent increase.
Burlington County foreclosure filings jumped to 289 in August of this year from 206 a year ago. In Monmouth County a striking increase also was seen, to 375 from 268. In Hunterdon County, filings in August climbed to 49 from 42 a year earlier.
From the APP:
Bad N.J. budget news: $190 million short and growing
New Jersey’s state budget has a revenue shortfall of $190 million and growing, state officials announced Monday.
The first-quarter gap in tax collections of 3.1 percent, if maintained over the rest of fiscal 2010, would yield a shortfall approaching $915 million. Revenue collections in September were further behind target than in July and August.
…
Gov. Jon S. Corzine’s administration appears to be anticipating more difficult financial news ahead. It detailed $206 million in reductions to the budget, and the governor directed Cabinet officers to identify another $200 million by Dec. 1.
“As has been the case for virtually every other state that as reported revenue activity in the new fiscal year, New Jersey is experiencing the continuing effects of the global economic downturn,” said state Treasurer David Rousseau.
…
The budget changes detailed Monday include $113 million in savings from lowered projected spending, such as spending $35 million less than anticipated on property tax rebates, $23 million less for retired teachers’ health care and $15 million less for inmates’ health care.
From the WSJ:
Home-Buyer Credit Is Focus of Inquiry
The Internal Revenue Service is examining more than 100,000 suspicious claims for the first-time home-buyer tax break, another sign of potential trouble for the soon-to-expire program.
The measure, adopted in February as part of the economic-stimulus bill, gives first-time buyers an $8,000 tax credit in an effort to boost sales and stimulate the moribund housing market. The program is set to end Nov. 30, but housing-industry leaders are lobbying Congress to extend it.
More than a million claims for the credit have been received so far, and housing-industry experts estimated that the credit has helped generate about 350,000 home sales that wouldn’t otherwise have occurred. But some lawmakers and tax experts now say there is evidence that a significant number of the claims might prove to be unjustified, or even fraudulent.
“I am concerned about recent reports that there have been fraudulent schemes involving the credit,” Rep. John Lewis (D., Ga.), chairman of a House Ways and Means oversight subcommittee, said in a statement. The subcommittee is planning a hearing on the problems on Thursday.
The IRS said it was investigating 167 “criminal schemes” involving the credit, according to the subcommittee. IRS officials on Monday declined to describe the suspected schemes or provide additional details.
From Bloomberg:
Wall Street 40% Bonus Rise Feeds Spending on $43 Steak, Co-ops
A 40 percent jump in Wall Street bonuses this year may bring relief to New York City and Albany as the state and its biggest metropolis struggle with a combined $14 billion in budget deficits this fiscal year and next.
New York investment houses will dole out $26 billion in bonus checks by the end of March, said Alan Johnson, president of compensation consultant Johnson Associates Inc. The money will probably boost sales of multimillion-dollar co-op apartments and generate extra income-tax revenue for state and city governments.
“I don’t think this is going to make everybody think, ‘Oh, good times are here again,’ but it may ease things a bit,” said Lawrence White, professor of economics at New York University’s Leonard N. Stern School of Business.
From the Record:
Cedar Crest’s owner files for bankruptcy
Erickson Retirement Communities, which developed and operates the Cedar Crest community in Pequannock, filed for bankruptcy protection Monday, saying its real estate business has been hurt by the recession.
…
The 26-year-old company said separating the two business will protect residents from the volatility of the real estate business. Erickson serves 23,000 residents in 19 communities nationwide, including a second New Jersey community — Seabrook in Tinton Falls. The company said Redwood would continue Erickson’s mission of serving community residents.
From the Daily Record:
Economy hits NJ nonprofits as hard as people they serve
As job losses batter New Jersey residents, demand for services provided by the state’s nonprofits — everything from health to jobs to housing — has soared, organizations report.
But the economy has also taken its toll on the nonprofit industry, which has seen a decline in donations and grants and has had to reduce staff, freeze salaries and rely more on volunteers.
From the Record:
Budget fix not in the cards this time
PASSAIC — In the face of declining revenues, the City Council has arrived at a crossroads: Dip into reserves to cover costs or cut spending next year by firing 14 police officers, 11 firefighters and six public works employees.
For now, the council chose the latter, but layoffs could be averted if the state comes through with increased aid in 2010.
It’s essentially the same debate the council faced four years ago. But instead of making the difficult decision to cut spending, the city’s fiscal gatekeepers devised a plan to borrow $2 million to balance its books.
In the process, the council added another level of government with new salaries, took on hundreds of thousands of dollars in interest payments and created an agency that can survive only by raising parking fees and ticketing residents for parking violations.
From the Jersey Journal:
Bayonne Medical Center plans to lay off 35 employees
The Bayonne Medical Center plans to lay off 35 more employees on the heels of closing its third floor ward and letting 34 workers go in September.
BMC spokeswoman Allyson Miller refused to provide details of who would be affected by newest layoffs, but said the hospital has been making its operations more efficient.
“The reduction is due to increased productivity and improved efficiencies in operations,” said Miller in a statement. “Our services will not be affected.”
From the Thread:
Manic Monday at Conde Nast’s Fashion Titles
The wave of layoffs at Conde Nast has finally hit the core fashion departments of the building, including staff reductions at Glamour, Lucky, and even Style.com.
The mood throughout the building was quiet and somber as word spread that there had been at least a half-dozen layoffs at Glamour, five layoffs (including a few editors) at Lucky, and several high-profile layoffs at Style.com — most prominently the much-beloved Candy Pratts-Price, whose contract with Style.com will apparently not be renewed, though she will remain on Vogue’s masthead in a contributor capacity.
From MarketWatch:
New York Times to cut newsroom staff by 8%
New York Times Co. will reduce its newsroom staff by 8%, or by 100 jobs, at its flagship paper by the end of the year, the New York Times reported on its Web site Monday. The newspaper will offer buyouts to union and nonunion employees, but will resort to layoffs if there are not enough takers, according to the Times.
From HousingWire:
2.7m Distressed Properties in Market Pipeline: RBS
Recent months of “nascent” housing recovery remain overshadowed by the delinquency pipeline that threatens to put as many as 2.7m distressed sales on the market, according to weekly commentary on US economics by Royal Bank of Scotland (RBS) economists.
Single-family housing starts jumped 38% from February to July, while new home sales jumped by 28% from March to July and existing home sales rose 15% over the same time frame, RBS said. The heavy use of the first-time homebuyer tax credit in summer ahead of its November 30th deadline may have contributed to the rise in sales.
…
The economists noted an estimated 1.2m loans are 90 plus days delinquent and another 1.5m homes in the foreclosure process but not yet possessed by the bank. While much of this 2.7m-unit overhang in potential foreclosure inventory looks likely to enter the market at some point, the timing of these foreclosures hitting the market will play a key role in continued recovery.
“A housing market that is just beginning to climb from the ashes would be unable to handle influx of nearly 3 million additional homes for sale all at once,” RBS economists said. “However, if the rise in foreclosures extends well into 2010 and beyond, which seems a distinct possibility given the lengthened foreclosure timeline, then the additional supply might be more easily absorbed, particularly if the economy and jobs are growing relatively robustly.”
From the WSJ:
Employers Hold Off on Hiring
Companies across the economy are holding off on hiring even as the profit outlook improves, amid economic uncertainty and their own success at raising productivity in rough waters.
Hiring always lags behind in economic recoveries, but the outlook this time is worse, many economists say. Most forecasters now expect a prolonged period of high unemployment, even though the government is expected to report next week that the economy grew in the third quarter, after four quarters of contraction. That is sure to frustrate the jobless and could be a problem for the Obama administration.
I am still amazed that Dwek was able to get all those knuckleheads in tape. 44 and counting. What will his sentence be. A year for stealing 50 million????
Govt bought each arrest for a million or so. Truth is much stranger than fiction. He is evidently a great salesman.
That said I am happy they were caught, maybe a million a crooked a govt official isn’t such a bad deal.
New Jersey’s state budget has a revenue shortfall of $190 million and growing, state officials announced Monday.
Very simple, raise the sales tax by 14%, make route 80 a toll road and enact a state-wide property tax surcharge of 1%. Problem solved. After all, we live in a prestigous area and are in proximity to NYC so we can afford it.
italics off I hope
Ojama has a big $30K a plate fundraiser tonight in NYC. Anybody else going?
From late last night:
“I am not sure the govt should be in the business of entrapping wannabe spies”
I disagree for this reason, that has application to NJ and contributes to the high cost of governmentat the state and local government.
When one holds a security clearance, one is obliged to report attempted recruitments. If one is approached and does not report the incident it indicates that one may be willing to accept money (or sex, etc) in exchange for information, but that the particular offer was not enough. F&ilure to report also prevents counterespionoge folks from running a double operation.
At the local level, NJ has such a culture of corruption, failure to report attempted bribes (money for information, access, action — not unlike spying) allows people intent on bribing an official to silently probe for the weak ethical link.
From Panzner:
“Less than What They Make Out
Ours is a large and relatively diverse economy, so it shouldn’t be surprising to anyone that some parts are doing better than others. Regardless, the signs of life we are seeing nowadays suggest, paradoxically, that the so-called recovery is less than the optimists keep trying to make out. Consider the following:”
http://www.financialarmageddon.com/2009/10/less-than-what-they.html
Most forecasters now expect a prolonged period of high unemployment, even though the government is expected to report next week that the economy grew in the third quarter, after four quarters of contraction. That is sure to frustrate the jobless and could be a problem for the Obama administration.
I call BS on this one. The proletariat voted for the Annointed One based on hope and change; they never said anything about job creation, private expansion or entrepreneurial spirit.
From CNNMoney:
Homes: About to get much cheaper
National home prices are forecast to shrink another 11%. Miami, Las Vegas and Phoenix will record steep declines, but a few cities will actually post gains.
By Les Christie, CNNMoney.com staff writer
Last Updated: October 20, 2009: 7:38 AM ET
NEW YORK (CNNMoney.com) — If you thought home prices were bottoming out, you may be wrong. They’re expected to head a lot lower.
Home values are predicted to drop in 342 out of 381 markets during the next year, according to a new forecast of real estate prices.
Overall, the national median home price is predicted to drop 11.3% by June 30, 2010, according to Fiserv, a financial information and analysis firm. For the following year, the firm anticipates some stabilization with prices rising 3.6%.
In the past, Fiserv anticipated the rapid decline in home-sale prices over the past few years — though it underestimated the scope.
Mark Zandi, chief economist with Moody’s Economy.com, agreed with Fiserv’s current assessments. “I think more price declines are coming because the foreclosure crisis is not over,” he said.
In fact, those areas with high concentrations of foreclosure sales will experience the steepest drops, according to Fiserv. Miami, for example, is expected to be the biggest loser. Prices are forecast to plunge 29.9% by next June — after having already fallen a whopping 48% during the past three years.
If Fiserv’s forecast holds, Miami real median home price will tumble to $142,000 by June 2011.
In Orlando, Fla., the second-worst performing market, Fiserv anticipates a 27% price collapse by June 2010, followed by a less severe drop the following year. In Hanford, Calif., prices are estimated to drop 26.9% and continue falling 9.5% in 2011; in Naples, Fla., they’re expected to fall 26.8% and then flatten out.
Other notable losers include Las Vegas, where prices have already fallen 54.6% and are expected to lose another 23.9% by June 2010. In Phoenix values have already collapsed by 54% and could fall another 23.4%. In both cities, Fiserv anticipates the losses to continue into 2011, but they will be less than 5%.
Prices had stabilized
The latest forecast is at odds with the past few months of the S&P/Case-Shiller Home Price index. That report has given hope that most housing markets may have already stabilized because the composite index of 20 cities rose in May, June and July. Nationally, it found that home prices have gained 3.6%.
Brad Hunter, chief economist for Metrostudy, which provides housing market information to the industry, however, expects a change in fortunes, however.
“I’m afraid Case-Shiller may be just a temporary reprieve,” he said.
He pointed out that the tax credit for first-time home buyers helped support prices during the three months of Case-Shiller gains. By the end of November, the credit will have been used by 1.8 million homebuyers, at least 355,000 of whom would not have bought a house without the tax break, according to estimates by the National Association of Realtors. But the market assistance ends when the credit expires on Dec. 1.
Hunter also sees a new wave of foreclosure problems coming from higher priced loans and prime mortgages. He expects a high failure rate for option ARM loans that were issued to prime customers so they could buy homes in bubble markets, such as California and Florida. In those areas, prices for even modest homes had skyrocketed.
Winners
A handful of metro areas will buck the trend, according to Fiserv. Six markets will remain flat, and 33 will actually post gains. The biggest winner will be the Kennewick, Wash., metro area, where home prices have ramped up 8.9% over the past three years and are expected to increase another 3.4% by June 2010.
Fairbanks, Alaska, prices are anticipated to rise 2.5%, while Anchorage will climb 2.1%. Elmira, N.Y., prices may inch up 1.8%.
The nation’s biggest metro area, New York City, will underperform the nation as a whole over the next two years, according to Fiserv. Prices, which have already fallen 21.7% to a median of $375,000, are expected to fall 17.4% by June 2011.
Home values in the nation’s second largest city, Los Angeles, have fallen 43.3% since June 2006 to a median of $313,000. They are expected to dive another 20.2% over by June 2010, and then start to climb in 2011. Chicago prices, which have fallen 25.2% to $227,000, will drop only 4.1% over the next 12 months and then starting to climb.
The Detroit metro area now has the dubious distinction of having the lowest home prices in the country. Prices have dropped 51.7% to a median of $50,000. They’re expected to fall another 9.1% and then stabilize.
http://www.cnbc.com/id/33375999
Chicago - Didn’t know what “melt up” meant so I found this recent article.
Do the powers that be understand that much of the “sideline” money they discuss may never reenter the market because a contingency of customers pulled their funds for good?
The over 55 crowd became pretty leery this last time around. I doubt many can afford to lose track of their funds again.
“Overall, the national median home price is predicted to drop 11.3% by June 30, 2010″
It is a good thing that FHA requires a whopping 3.5% down.
“The over 55 crowd became pretty leery this last time around. I doubt many can afford to lose track of their funds again.”
Better to earn minimal interest in a savings account than risk losing 40-50% in the stock market. Sick thing is that the FED is murdering them with the low interest rates.
“It is a good thing that FHA requires a whopping 3.5% down.”
So when the FHA goes belly up what agency due they then use as a conduit to prop up the housing market.
http://finance.yahoo.com/tech-ticker/article/356867/Robert-Shiller-We-Could-Have-Another-Housing-Boom-But-I-Doubt-It;_ylt=AlaBIzHg8S4wKKeMh4Hwv6pk7ot4;_ylu=X3oDMTE3NTRvcmw0BHBvcwM5MARzZWMDYXJ0aWNsZUxpc3QEc2xrA3JvYmVydHNoaWxsZQ–?tickers=XHB,TOL,LEN,RYL,DHI,PHM,MAS
Robert Shiller on Tech Ticker
I have two instincts and they conflict…
#14,
Don’t forget to raise the gasoline taxes and tolls on GSP and Turnpike.
He @ 23 - Yes, so then…. if they paid higher interest, folks would be making more on their accounts and would have an extra buck or two to spend because they wouldn’t have to slam every last cent into their savings account.
I mean you have a goal, X amount of dollars in your account. If you can’t get there with interest, you just have to raise the amount you pull out of circulation to deposit in your account.
http://www.forbes.com/2009/10/18/inflation-deflation-dollar-opinions-columnists-john-tamny.html?feed=rss_opinions
Recent Inflation vs. Deflation article from Forbes.
So driving Lil Gator to school today we saw our very first Montclair Prius proudly displaying a “Daggett for Governor” bumper sticker. Apparently the latte swilling liberal contingent here might not be drinking the kool-aid this year.
http://www.wnd.com/index.php?fa=PAGE.view&pageId=113343
Last article - Darn it - It is from a very conservative site, WorldNetDaily, and I try not to post from one-sided venues but the title - Jobs - got to me and the message is one I agree with…
Focus on JOBS.
re: #23 - How long before the retirees go all Mrs. Wantabe in search of yield?
As some of you may know, Japan has kept its interest rates extremely low for an extraordinarily long time in the hopes that it could escape a deflationary spiral.
Suffice to say, it hasn’t been solved their problems, it only kicked the can down the road. The average Japanese household has piled on bigtime into the carry trade to gain additional interest income.
What should we make of this? Will FX become the new black in bridge clubs and sewing circles?
Here is an old article on the subject.
http://www.nytimes.com/2007/09/16/business/worldbusiness/16housewives.html?_r=1&em&ex=1190260800&en=555f9a2800dcc8c4&ei=5087%0A
gator (29)-
In the end, all the usual Politburo members will be re-elected.
HE (24)-
At that point, there will be no housing market. Probably won’t come back for 20-40 years. Anybody who wants to buy a house at that point will just have to fork over cash.
BTW, this is what I believe will happen.
its a “jobless recovery”, DOW 10,000 baby!
if you believe that, your a sucker.
and the moon is made of cheese.
SAS
If NJ Transit sold beer at the Secacus Junction stop during Giants and Jets games when we get stranded there for no apparant reason you could solve your budget problems. Also a celeb boxing match with John Corzine would bring in money, plenty of people would pay millions to beat the snot out of him.
[201, 202] [prior thread] PGC and meter
When it comes to assumptions, you two are doing no better.
Meter, if you are gonna state my position, state it correctly.
Well I took the plunge today and paid off my mortgage. As much as I moan about how real estate is a bad investment the funny part is I am one of the few on this site who actually own a home. You really don’t own it till the mortgage is paid off. Now I enter the world where I complain about my homeowners insurance and RE taxes as they are no longer hidden in my monthly mortgage statement.
Gaor,
I don’t know if Daggett is THE answer, but I know that continuing to elect people from the same corrupt machines is NOT the answer. I have long thought it would shale the system to its foundations if assorted write-in canddated got 70% of the vote and the other 30% were split between the mjor-party candidates. This year, with Daggett, people have a choice better than a write-in candidate. Whether one likes him or not, or whether one believes he can win, anyone who has been frustrated with the current circumstances has an obligation to vote in a way that maximizes the chances of prompting change. Corzine sure is not that way snd I doubt C.C. is either.
29.NJGator says:
October 20, 2009 at 9:03 am
So driving Lil Gator to school today we saw our very first Montclair Prius proudly displaying a “Daggett for Governor” bumper sticker. Apparently the latte swilling liberal contingent here might not be drinking the kool-aid this year.
Gator,
Daggett support IS the NJ liberal kool aid flavor this year. Turns out the only way to ensure the re-coronation of King John is to divide the protest vote. When have the papers endorsing Daggett EVER endorsed any platform plank he’s running on?
#14 and Frank, don’t forget liquor and cigarette taxes! Better yet, a new tax on soda.
John,
Welcome to the club. Now when it comes to writing those county/town taxes, school txes, etc., I suspect that you will indeed see them in a different light.
John,
Paying down a mortgage gives you about a 3% after-tax IRR these days. Can’t you find something with a better ROI than that? Mortgage interest is about the only thing left to offset the AMT.
I think of my mortgage as a short position in the US dollar, with a 5% cost of carry. My income, related to global investments, rises when the US$ falls, and most of my personal assets are invested overseas, other than my house. So I don’t mind so much that the Fed and Treasury to continue devaluing the global purchasing power of the dollar.
Taxes are my main concern, given the political desire to make sure that nobody escapes the ravages of bad US government policy and welfare statism (so ineloquently expressed by PGC).
Not a recommendation, just a description.
#36 Got Ball?
If there is an incorrect assumption, feel free to correct.
Financial thug Neel Kashkari on CNBC, getting serviced with softball questions.
Why is this person not in jail?
It should be cut 100%.
grim says:
October 20, 2009 at 6:34 am
From MarketWatch:
New York Times to cut newsroom staff by 8%
Shore,
What’s the story with this guy. Is this just sour grapes for getting passed over, or is the party infighting creating an implosion.
http://blog.nj.com/njv_paul_mulshine/2009/10/why_the_republican_party_in_ne.html
A. West, I have under a 100K balance so I could not refinance as most banks wan’t above 100K. Just had 4.1% CDs rolling due from ING this month that I could either re-roll at 2.1% or buy bonds, stocks or commodities. I think all three are currently short term overpriced. Remember paying off a mortgage you really need to compare almost risk free rates, A rated Munis, Treasuries, FDIC insured CDs etc. Paying off a mortgage is risk free. Yea I could have loaded into more Junk but that could blow up. I loved Junk like Ford Bonds at 40% in Feb, I don’t love junk like Ford at 10% or investment grade at 5%. Also I may buy a house in the next year or two if market will cooporate. Easier to move quick without a mortgage.
I really think, maxing out your 401K and Flex Spending for most people yields better tax advantages than a mortgage. Yet I often hear this sentence “I bought a house to save on taxes and I cut back on my 401K contributions so I can make my monthly payments”. HA HA>
A West, any suggestions would be appreciated on where to put my future cash. Bonus season is upon us soon!
PGC,
I do not know.
We’re sitting here fighting about taxes, fees, healthcare “reform”?
C’mon already. The real topic is that the gubmint of Amerika has declared war on every single one of us. The taxes and the policies are their weapons of choice.
They won’t stop until they’ve drained each and every one of us dry. The beneficiaries of the grand wealth re-distribution scheme are doing no less than committing treason, no matter how unwitting the individual beneficiary.
#42 A West
Me talk pretty some day … :*)
Paul is right. NJ is a lost cause.
Corzine get the job again, continues to
take NJ to the third world.
look on the streets of NJ,, already
just about their
#40,
They just raise liquor and cigarette taxes, let’s not get too crazy, but gasoline taxes have not gone up in years. Let’s go Crozine what are you waiting for?
Look at your kids. Then, know for a certainty that there are specific people in both Trenton and DC who have dedicated their lives to the goal of making them slaves.
#51,
Got a problem with NJ? Move out. Take grim’s lead and head to TN.
Shore: If Daggett was elected and appointed McGreevey as his Lt. Governor, what would be have?
Shore Guy says:
October 20, 2009 at 9:56 am
I don’t know if Daggett is THE answer, but I know that continuing to elect people from the same corrupt machines is NOT the answer.
freedy (51)-
We already are Third World. Only question now: does it get Argentina-type bad…or Mogadishu-bad?
we have?
(54)-
Everyone here should remember that Frank is one of the people who has publicly laughed in our faces as he sells us down the river.
IF he’s actually a hedgie and not some wannabe in a coldwater basement flat.
The wolves are starting to circle:
October 20, 2009
BY STEVE HUNTLEY
Have you heard the news? President Obama inherited an economic mess from the Bush administration.
You say that’s hardly news? But it’s been the message sounded over and over by the White House. Top Obama adviser David Axelrod said on one of the Sunday news shows, “He walked in the door, we had the worst economy since the Great Depression.” In San Francisco, Obama talked of being “busy with our mop.” White House heavy hitter Rahm Emanuel used the worst-economy-since-the-Depression line on a public TV news show.
You’d think it’s October 2008, the final month in the Obama presidential candidacy, rather than October 2009, nine months into the Obama presidency. Yet the Obama White House is in full campaign mode — maybe because it needs to mask the shortcomings of the Obama presidency.
Take, for example, all the talk of inheriting the worst economy since the 1930s crisis. That came in response to the news that the federal deficit hit $1.4 trillion.
Yet just a few months ago, the Obama camp was singing a little different tune. It was under criticism for the $787 billion stimulus package it bulldozed through Congress on grounds that massive spending was needed to keep the unemployment rate from breaching 8 percent. When joblessness hit 9.5 percent in June, Vice President Joe Biden said, “We misread how bad the economy was.”
They inherited the worst economy since the Great Depression, or the economy turned out to be worse than they thought. Which is it? It can’t be both — unless your brain is completely addled by the Obama charisma.
Obama is still popular, but polls show the public losing faith in his policies. Another indicator was a ”Saturday Night Live” skit lampooning Obama for the major accomplishments of his administration — “jack and squat.” If the honeymoon is ending with the American voter, it isn’t for obsequious elements of the mainstream media. CNN prostrated itself by fact-checking the ”SNL” comedy skit.
[snip]
http://www.suntimes.com/news/huntley/1834209,CST-EDT-HUNT20.article#
When I lived in NYC, the scariest thing I feared was crossing a 14 kid with a gun. I just experienced the suburban equivalent….
Driving a loaner car, slowing down at a stop light, looking in the rear view mirror, and seeing an 18 year old girl texting while driving with her knees (I could see both her hands)……
49 Schumpeter
“They won’t stop until they’ve drained each and every one of us dry.”
Happy ending for all!
John,
They’ll be other times to bust your chops but congrats on the future mortgage burning ceremony you’ll have.
When is a talking head going to ask a politician or a CEO of a bank why they think high housing prices are a good thing? Then follow up with the funds that go to pay the PITI for an overpriced house could go towards retirement, saving for college, and discretionary spending that would provide jobs.
already packed.
#60 chifi,
I was almost hit head on by someone texting while driving in Dunellen in May. They crossed into my lane at 40 mph. I slammed on the brakes and hit the horn and the texter looked up at the last second and swerved back into his lane.
I just moved to Essex County. I thought it was illegal to talk on a cell or text while driving. Yet in Essex it seems that it is mandatory to do one of those while behind the wheel.
The board of the Federal Deposit Insurance Corp. voted to extend the backing of some bank debt by another six months, according to media reports Tuesday. The current program is set to expire Oct. 31. Banks that can show they are unable to issue debt without government backing would reportedly qualify for the extension.
“(I could see both her hands)……”
Chi,
There is nothing to worry about unless you also see her feet at the same time. Remember, physics does not apply to those in Gen Y, or whatever we are calling the sub 25 year old set — if they crash, they just hit reset and start to game over.
(30) Cindy,
I feel there is one huge disconnect between my world and the elected reps in D.C. I am trying to understand why Obama is fixated on healthcare reform right now while the more immediate concern of many of us is getting or keeping our jobs. What new ideas has he had about job creation? Maybe he doesn’t have any?
Chi,
You are lucky you moved out of Hoboken; not a week goes by where I or my dog don’t nearly get hit by some woman in her 20’s in a luxury car driving through a stop sign while she babbles incessantly on her cell phone.
67 Shore
What? No restore points?
69 HEHEHE
I was nearly hit my a cop car in a pedestrian crossing in Hoboken.
He wasn’t even speeding.
Cindy,
Don’t underestimate the power o the following statement in motivating the current administrstion: Bill Clinton did not accomplish it.
#67 Shore Guy,
That’s why I drive a crossover. I would prefer to drive an Accord or Camry, but it seems like most of the cars on the road are SUVs, minivans, or crossovers, and a significant percentage of them have drivers talking on the phone or texting. I’d rather have the grille of one of those hitting my vehicle around my shins then mine and my family’s chests/heads.
My favorite are the ones who talk/text while driving down the wrong side of the road in parking lots at 25 mph+, especially if it is in a school parking lot, they get bonus points for that.
“I was nearly hit my a cop car in a pedestrian crossing in Hoboken.
He wasn’t even speeding.”
He was probably checking out some woman walking by on the sidewalk. I think the police in Hoboken get paid on a sliding scale based on the number of women they ogle.
John-
Welcome to the club. The real weight off the back is when the kids college and grad school is all paid for. Whew.
I think we need to get Booya Bob back to comment on the Friskie eaters
http://www.npr.org/templates/story/story.php?storyId=113791908&sc=fb&cc=fp
“The real weight off the back is when the kids college and grad school is all paid for.”
Indeed. We are still facing that hurdle and it makes a mortgge seem like child’s pay, especially while saving for retirement at the same time.
“[201, 202] [prior thread] PGC and meter
When it comes to assumptions, you two are doing no better.
Meter, if you are gonna state my position, state it correctly.”
How about you state it for me like Shore Guy did so I’m not misrepresenting you.
My impressions from your cardboard cutout online persona over the past 2 years:
1) You’re Republican and
2) Anti-tax (for social programs only it would seem with your “get your hand out of my wallet” comments ad nauseum, but please correct me where I’m wrong).
That and that you fancy yourself some kind of rough rider (albeit with a silver spoon up his nose). Amusing though.
““get your hand out of my wallet” comments ”
It seems there is a one-two approach to eliminating such comments from those in the upper 5% of earners who are shouldering, what, 90-odd percent of the tax burden:
1) Establish a flat tax, which treats wages and investment earnings the same;
2) Constitutional limits on taxation, including via “authorities.”
If we all shoulder the same relative burden, there is nothing to kveth about. If we place some limit on runaway taxation, we reduce the likelihood that the “same relative burden” will not be an oppressive amount.
When Nom and I, and many others are paying twice the percentage rate as most other people, why should the majority be surprised to find out that we are not happy about it?
#79 - Establish a flat tax, which treats wages and investment earnings the same
I assume we’re going to apply the same standard to corp entities?
Also, no taxes on those earning under, say $10k per year.(I’m pulling that number out of my a**, but you get the idea).
Constitutional limits on taxation, including via “authorities.”
From what I understood the constitution already limited the Fed’s ability and power to tax.
Other than this I would agree.
“Also, no taxes on those earning under, say $10k”
Corporatons, wage earners, investors, they are all “persons” so lets treat them the same, you bet. As for exempting the first $10,000 I don’t know that I would do that, because I think EVERYONE should feel the sting of taxes. Now, if one wanted to tax the first $5,000, then exempt $5,001-$15,000, then resume taxation, I would go for that. We have a problem right now, though, where about 50% of earners pay NOTHING in income tax. That breeds contempt for constraints on spending and is dangerous; what do you cara about the price of the meal if someone else is paying?
“From what I understood the constitution already limited the Fed’s ability and power to tax.”
I don’t think David Stockman would agree with that.
Some Begin to See a Gold Bubble
http://moneynews.newsmax.com/streettalk/gold_price_bubble/2009/10/20/274308.html
Focus on JOBS.
Cindy, did you read the article? it starts with ‘…the #1 priority of the people is jobs.’
I wish that was so. Here’s Rasmussen:
“For nearly two years, economic issues have held the top spot in terms of importance among voters.
But the latest national telephone survey shows that 83% now view government ethics and corruption as very important, placing it just ahead of the economy on a list of 10 key electoral issues regularly tracked by Rasmussen Reports. “
There are proposals for the Flat Tax and the Fair Tax (which is more like a VAT, but not exactly) - they are not one in the same - but I believe they both call for a floor. Thus, those under a certain threshold would not pay the tax.
I don’t personally like the Flat Tax as it’s regressive and hurts the middle class the most.
The Fair Tax isn’t much better.
I would rather we focus efforts on cutting government spending first and then cut tax rates across the board.
#82 - Shore - Not too familiar with Stockman in anything other than a passing manner. Odd, seems like he would have supported limited the Fed’s taxation abilities in order to starve the welfare state.
“I would rather we focus efforts on cutting government spending first ”
I would rather taht addicts just stopped using; however, when an addict refuses to get clean, one must cut off his or her access to his or her drug in order to cure him or her. Congress is addicted to revenue and has proved itself incapable of not spending when revenue sources are available. “But the people can afford it”; big friggen deal, just because we can afford something does not mean we should buy it.
I am all for the flat tax. But the girls at Scores will end up paying no tax at all.
shore (87)-
Wake me up when it’s time to enforce this discipline in the only form they can understand.
Is Chris Christie’s campaign the worst-run in New Jersey history?
Back in June, when Chris Christie looked to be a lock for governor, the New York Times carried an analysis of the Christie campaign strategy.
The article quoted top strategist Michael DuHaime as saying, “You’ll know if we won on election night not by how much we win Ocean and Sussex by, but how much do we lose Hudson, Essex and Camden by.’’
I think it’s safe to say we now know how much Christie will lose Hudson, Essex and Camden by: A lot….
As for Christie’s efforts in the suburbs, they have been almost invisible. He spent the summer dodging questions about what should have been his best issue in the ‘burbs, property taxes, for fear of antagonizing urban voters.
Not everyone’s ducking that issue, though. As I was clicking through the channels Saturday searching for the Notre Dame football game, I happened to chance upon a Democratic Assembly candidate tackling the issue head-on.
Robert Brown is a former Old Bridge cop who was shot in the line of duty and retired from the force. He ended up attending Seton Hall law school the same time as Christie, but he seems to have accumulated a bit more street sense. On the News12 program, I watched as he told two talking heads that he endorsed the sole practical approach to property tax relief. If elected, Brown said, he would work to ensure that all of the towns in his district, which includes both working-class Keyport and posh Holmdel, get the same level of state school aid as the cities.
If a Democrat can endorse this sensible strategy, why can’t a Republican? I’ve never gotten a straight answer out of Christie. But last week I heard him assign some of the blame. After the debate Friday night at William Paterson University, a reporter asked Christie why his campaign failed to anticipate the emergence of independent Chris Daggett, who is cutting into Christie’s margins in the aforementioned Sussex and Ocean counties that his campaign had been taking for granted.
“That’s what I hire other people to do for me, is to help to make those decisions for me,” Christie replied. He added, “I’m out there working 14, 15, 16 hours a day. So the strategy decision is not something I’m generally engaged in.”
That was quite a stunning admission. Most pols prefer to at least pretend their strategy flows from their principles. Christie is the first candidate I’ve ever seen admit he’s being spoon-fed his strategy.
Even the liberals are laughing at the ineptness of this campaign. In a column on the left-leaning “Politics Daily” blog, veteran commentator Walter Shapiro quote an unnamed conservative political insider (not me) as stating, “Christie is running the worst campaign I’ve ever seen. Everyone knows that there’s a tax revolt going on except the Christie campaign. Instead, he wasted a month talking about mammograms.”
Bad as that sounds, the reality is worse. In the middle of that month, Christie was asked by a Star-Ledger staffer if he knew how much a mammogram costs. He didn’t — even though a quick Google search could have told him.
That’s what happens when you put strategy over substance. And whoever authored that strategy has a short memory as regards Republican efforts in the cities. The last two GOP gubernatorial contenders, Bret Schundler and Doug Forrester, both went after the urban minority vote. Both failed miserably.
http://blog.nj.com/njv_paul_mulshine/2009/10/is_chris_christies_campaign_th.html
Am I a prude?
I am in a Dunkin’ Doughnuts getting a coffee when I notice a heavyset woman with a baby carriage out front smoking a butt. I think to myself….”ahhh you fcuking b….”…..then a man comes out of the rest room and walks outside. He grabs her by the shoulder and with the other hand starts yanking at something on her back. I get concerned and am about to say something. Then they turn and I realize that he is pulling the security tag of the coat she is wearing…..apparent they just shoplifted it. WTF?…and to do such a thing in a public place….are they clueless or am I just a clown and need to grow up?
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https://www2.gotomeeting.com/register/312501938
## 23, 24, 25 - Dis and Cindy - the issue on how savers have been messed up by the Fed’s low interest rates - since 2001! is never discussed enough IMHO. I do not understand why the media does not discuss this more - it is the most insidious form of warfare on the middle class I’ve ever witnessed - you add to that the fact that in 10 years the Dow has returned nothing and you see a recipe for disaster for working people. If they can’t save in banks, and they can’t save in stocks, then what are they supposed to do with their money - except consume (remember GWB’s “go out and spend”) and buy homes - encouraged to do both together. Add that there are now no defined benefit retirement plans - and we KNOW lots of people will be eating cat food.
Clearly a recipe for disaster. I’d like to see someone ask Timmy what normal people are supposed to do - and see if his fast friends have an answer to that…
chi - you are confused. Dunkin makes Donuts. Krispy Kreme makes Doughnuts.
Richard Heene told his 9, 8 and 6 year old kids to lie about going up in a balloon to law enforcement, the media and the known world to try and seal up movie rights. So yeah, you might be clueless about what passes as acceptable behavior for some people. The number of people who have an appropriate concept of right and wrong is diminishing rapidly. They take their signals from the US Government though so can we blame them?
#93 - BeachBum - You are exacty correct. The destruction of savings via inflation should be a major issue. It isn’t, but should be.
I’ll leave it to your imagination as to why this isn’t discussed.
Beach,
Carpe Diem. Tomorrow will take care of itself, don’t you know?
Besides, people can always turn to their pensions. Now go out and buy something, will ya.
Another day closer to oblivion.
Tosh - not just inflation - we’ve had little of that but if you’re getting 50 bps over inflation that’s not going to pay for a managed care facility in anyone’s future…and for the last 10 years savings has been yielding not much more…
94 Seneca
What are the odds they did this because their home was underwater?
(Not that that’s an excuse!)
re: my comment on Richard Heene
Never mind - just found this through Google news.
http://gawker.com/5383858/exclusive-i-helped-richard-heene-plan-a-balloon-hoax
I took littlest safe to Turtle Back Zoo today. I heard one woman complaining about the hills at the zoo and when are they going to do something about them. I heard another person complaining about not seeing any animals and they were going to complain to the zoo about that. WTF?
I really need to develop a business that will make people dumber, more selfish and materialistic while making them feel superior to everyone else.
Guys,
Please, think of the Canadian hunters!!!
Hunters face ammo shortage
New Brunswick hunters may soon have trouble locating their favourite brands of ammunition as a continental shortage begins to affect the province.
‘With shortages and people not being able to hunt, this is bad news for rural Canada.’— Ross Faulkner, owner, Gun Dealer
The province’s deer hunting season is only a week away and Ross Faulkner, the owner of the Gun Dealer in McAdam, N.B., said many hunters may soon start noticing that their favourite brands of ammunition and primers may be limited.
http://www.cbc.ca/canada/new-brunswick/story/2009/10/20/nb-ammunition-shortage-hunters-547.html
From some of the threads we get around here, I’d say several on this board are the reason behind this shortage…
You bum, people should only have their emergency fund in FDIC insured products. Lets see 1999-2001 you could have locked in higher cd rates and again during 2006 to 2008. Those time periods should have been going with 3-5 year cds. 2003 and late 2008 and early 2009 Junk was on sale and Pretty much munis were a good deal in 2000/2001 and 2008/2009. Ten year treasuries were also a great deal from 1999-2002 and October 2006 to 2008. Investment grade bonds were a good deal 2001/2002/2003 and most of 2008 and 2009.
I know people, in particular indian people, don’t know why who leave money in money market or do six month or one year cds and moan when rates are low. I kept telling this girl I know in all of 2007 and 2008 to lock in at least a two year cd, she is still in ING and HSBC money markets at 1.75%.
When CDs were high in 2007 and 2008 she refused to lock in on a 2-5 year cd and when Munis were 6%, Junk 30%, Corporates 10% and CDs 5% during late 2008 and the first half of 2009 she refused to buy. The Fed Telegraphed rate cuts from back in the summer of 2007 that there would be several and they would leave rates low for longer than usual. Heck rates fell for almost two years straight in bank cds. No one has a right to complain who had money sitting in a money market or low yield short term cd and watched this unfold. Plus if you have a 6% mortgage like a lot of people why do you have money in a taxable acount anyhow at 1.5% just pre-pay and you can get 4x the yield.
BeachBum says:
October 20, 2009 at 12:56 pm
## 23, 24, 25 - Dis and Cindy - the issue on how savers have been messed up by the Fed’s low interest rates - since 2001! is never discussed enough IMHO. I do not understand why the media does not discuss this more - it is the most insidious form of warfare on the middle class I’ve ever witnessed - you add to that the fact that in 10 years the Dow has returned nothing and you see a recipe for disaster for working people. If they can’t save in banks, and they can’t save in stocks, then what are they supposed to do with their money - except consume (remember GWB’s “go out and spend”) and buy homes - encouraged to do both together. Add that there are now no defined benefit retirement plans - and we KNOW lots of people will be eating cat food.
Clearly a recipe for disaster. I’d like to see someone ask Timmy what normal people are supposed to do - and see if his fast friends have an answer to that…
The end is nigh…..
http://www.youtube.com/v/KihPKUZni8Y&color1=0xb1b1b1&color2=0xcfcfcf&hl=en&feature=player_embedded&fs=1
BTW somewhere in my junk drawer I think I have an old WIN Whip Inflation Now button from when Ford was President, if inflation gets out of hand we can just wear those buttons again.
#98 - for the last 10 years savings has been yielding not much more…
They won’t either. A low yield on savings forces you to chase yield. In other words, if you can’t save with regular savings you’re now forced into various other investments to keep up with inflation. It should be obvious who this benefits (not me or you).
I’m not saying it’s engineered this way, but you’d be forgiven for thinking it was.
And no, I don’t know any way out of it.
From some of the threads we get around here, I’d say several on this board are the reason behind this shortage…
The ammo makers have been pushing “Obama’s going to take all your guns and ammo” since late last year. It’s genius marketing.
We have a winner!
California sues bank, claims overcharges
Hint: it’s the “world’s largest asset manager for institutions.”
http://www.bloomberg.com/apps/news?pid=20601103&sid=ae6_a8VcZBrU
“Global Companies should look at processes that are material to them, not processes that really don’t make that much difference. We need to focus on areas that could create a real risk for institutions.”
John A. Thain, CEO of the NYSE
I ran across this old quote, I am still laughing
BeachBum,
I do remember that time in 2001 when GWB asked people to go out and spend as their patriot duty.
Someone even wrote an article about it back then titled “Some Patriotic Economic Advice: Save”
http://www.capmag.com/article.asp?ID=1148
I’m amazed how prescient that author was.
re: taxes.
there should be no such thing as a wage tax, only a tax on consumption and passive income. Taxes are punitive by nature, but a necessity. Why punish work?
“I would rather taht addicts just stopped using; however, when an addict refuses to get clean, one must cut off his or her access to his or her drug in order to cure him or her. Congress is addicted to revenue and has proved itself incapable of not spending when revenue sources are available. “But the people can afford it”; big friggen deal, just because we can afford something does not mean we should buy it.”
Need I remind you that Bush tax cuts were met with more spending?
Bill Clinton and a Republican congress were the best mix we’ve had (in fiscal terms) in my lifetime.
Here’s an actual real estate related article:
cnnmoney
Homes: About to get much cheaper
If you thought home prices were bottoming out, you may be wrong. They’re expected to head a lot lower.
Home values are predicted to drop in 342 out of 381 markets during the next year, according to a new forecast of real estate prices.
http://finance.yahoo.com/news/Homes-About-to-get-much-cnnm-699910894.html?x=0
Babara - taxes punitive in nature - I actually think that is funny. I tend to think that taxes are equitable in nature. You get something out of society, you have to put something back into society. I don’t feel like I’m being punished. Now there are certain incentives built in, and we can argue about those, but the very nature of taxes, in MHO, is not punitive.
The nation’s biggest metro area, New York City, will underperform the nation as a whole over the next two years, according to Fiserv. Prices, which have already fallen 21.7% to a median of $375,000, are expected to fall 17.4% by June 2011.
BeachBum,
they are punitive by nature because the harder you work, the more they take. How is that not punitive when what I receive is the same if not less than if I earned less. Please try to make sense.
More Deflation? Think not!
College tuition cost rising again this fall.
“Average tuition at four-year public colleges rose 6.5 percent, At private colleges, the average list price for a year of coursework rose 4.4 percent.”
http://news.yahoo.com/s/ap/20091020/ap_on_re_us/us_college_costs
117 Sean.
College is our new church. It will save us all, most especially the children. Now how can you put a price on that?
I don’t do the sarcasm off sh*t.
congrats John, welcome to the sucker club.
i paid off my mortgages moons ago.
For sure it was a good feeling.
back in my day, we had block parties for such events.
now, no one pays off debts, racks up some more, while their daughter shoots up heroin, and they drive a BMW or Lexus. .. and the kicker, these type think they are rich?
man, at this point, I’d even dig up Nixon and put in back in the White House.
SAS
“College is our new church”
many college will go way of “privatization”.
costs go up, quality of education foes straight down the drain.
privatization, remember that word, and if its ever associated with your state pension funds…. look out!
SAS
Barbara,
I undertand that you may feel punished, but the nature of tax, again, in my view is not “retaliatory, in retaliation, vindictive, in reprisal, revengeful, retaliative, punitory”, i.e. punitive. The costs of society must be apportioned somehow, and most societies do so according to how much one earns. The costs could have been apportioned based on another criteria, but that doesn’t change the nature of the apportionment of the costs, i.e. tax.
Barbara (111) -
there should be no such thing as a wage tax, only a tax on consumption and passive income. Taxes are punitive by nature, but a necessity. Why punish work?
+1000
100% Agree. However, this is not a good plan for the oligarchs who make most of their money through capital gains and other rent seeking activities.
I would probably add property taxes and appreciation taxes to that mix, which will should decrease house flipping. Buying and selling houses add no economic value to the country (IMO).
SAS (120)
many college will go way of “privatization”.
costs go up, quality of education foes straight down the drain.
Nonsense. The free market will never allow that to happen.
BeachBum,
at this point, 21st century, that academic definition of taxation has been rendered meaningless. Its like when Republicans claim to be the party of Lincoln.
Taxation is doled out in a punitive fashion and has been done so long enough that it has become its very nature.
I’d even dig up Nixon and put in back in the White House.
While I’m pretty sure this is a hyperbolic statement, isn’t Nixon the one who got this whole mess rolling, ending Bretton Woods?
“Nonsense. The free market will never allow that to happen”
then, you better check the news, cause the push for it is already underway.
SAS
Victorian,
I’m a landlord and you can structure part of that as wages. Its not 100% passive and what is passive I’d be willing to be taxed. For example, I don’t just sit back and collect checks, it is at the very least a steady part time job. During the warm months its even more.
” isn’t Nixon the one who got this whole mess rolling, ending Bretton Woods”
Nixon was a patsy, from day one.
but, you wouldn’t know that from the incorrect history books.
Just like Ollie Stone.. CIA owns him.
and like those silly deadheads… duped.
why? Garcia was a god damn front, to make the drug counter culture look cool.
so you would buy that crap, and the bank could fractional loan out they money.
SAS
Victorian,
“Buying and selling houses add no economic value to the country (IMO).”
I don’t put a moral value to the work being done, I’ve renovated houses and its work, a lot of work. I just value work, period, I don’t care if you are selling ShamWows at the flea market.
128
I’m Uncle Sam,
that’s who I am;
Been hidin’ out
in a rock and roll band
Shake the hand
that shook the hand
of P.T. Barnum
and Charlie Chan.
Shine your shoes,
light your fuse.
Can you use
them ol’ U.S. Blues?
I’ll drink your health,
share your wealth,
run your life,
steal your wife.
Wave that flag,
wave it wide and high.
forget RE & commercial RE bubble. Serious, but small potatoes.
The bubble that on one wants to address, the cheap over production of crap. The world (thanks to cheap labor and deskilling of American workforce), the world has prodcued was too much stuff.
who is going to buy it?
SAS
wow, i better check my spelling. :)
say, Juanita is maken some stuffed cabbage rolls.
SAS
“INSIDER TRADE OF THE DAY”
http://prorev.com/2009/10/insider-trade-of-day.html
SAS
Barbara-
By “rent seeking”, I did not mean the literal sense of the word, but more in terms of a toll-booth, where the people just collect money by virtue of just erecting a booth on the road you travel on.
Examples of rent seeking, is the way debt was pushed on to the serfs wherein most of their income was diverted towards servicing this debt instead of doing something more productive. Extracting an economic “rent” out of their income.
Your work is definitely work, wherein you provide a service for people who are looking for a place to live and the value of that service is mostly decided by the market.
However, I should not be seeing gains in the value of my house just because there is abundance of credit out there and Wall St wants to make sure that more houses are sold via loans so that they securitize them and sell them off for more capital gains, while enslaving the serfs with more debt.
I don’t think I am making a coherent enough statement, but hopefully you got the gist of it.
Victorian,
I get what you are saying and agree, that would certainly be passive income.
Qwerty says:
October 19, 2009 at 2:32 pm
RE: “its a home not an investment”
Those who write PITI checks in the thousands each month, and believe they’re not investing (or possibly harming) in their financial future, are fooling themselves.
no PITI check if you put enough $ down
:)
to those who say putting 20-35% down is too much
a) prepare to live there for 10-15 years
b) only buy (with big $ down) if you still have 6-12 months living expenses left over AFTERWARD
yikes,
there’s another option. Put the 3.5% down for now and if things recover (big IF) and you want to loose the insurance, dip into your big savings and pay down the principal. You then apply to have the insurance lifted, I did this successfully three times in the 90s.
loose = lose
“somewhere in my junk drawer I think I have an old WIN Whip Inflation Now button from when Ford was President”
We just turned it over to read NIM.
Okay, geezers, what did THAT stand for?
#93. BeachBum for you.
From CNNMoney
How Uncle Sam is killing your savings
Ultralow rates are hurting the nation’s prudent savers as they bear the brunt of Wall Street.
By Allan Sloan, senior editor at large
Last Updated: October 20, 2009: 1:02 PM ET
(Fortune Magazine) — This is a quiz. What do the record-high Wall Street bonuses have in common with the record-low yields for savers?
Answer: They show yet another way that prudent people, especially those living on fixed incomes, are being screwed by the government’s bailout of the imprudent.
Here’s the deal. The government is spending trillions to keep interest rates down in order to support the economy and prop up housing prices, and those low rates have inflicted collateral damage on savers’ incomes.
“It’s a direct wealth transfer from savers and retirees to overly indebted borrowers,” says Greg McBride, senior financial analyst at Bankrate.com.
Since October 2007, when government intervention in the financial system began picking up speed, yields on the ultrasafe one-year and five-year investments that many retirees favor have tanked.
Two years ago the average yield on a five-year federally insured bank CD was 3.9%, according to Bankrate.com. Now it’s 2.2%, a drop of more than 40%.
Yields on one-year CDs have almost vanished: 0.92%, compared with 3.6%. On five-year Treasury securities, yield is down to 2.3% from 4.4%. On one-year maturities, you get a minuscule 0.3%, down from more than 4% in 2007.
The rates on AAA-rated one- and five-year tax-exempt bonds, another safe saver haven, are down sharply, too, for bailout-related reasons that we’ll get to in a bit.
As for money market mutual funds, fuggeddaboutit — the average is about 0.06% (no, that’s not a misprint) according to Crane Data, down from 4.6% two years ago.
It’s become customary practice — a wise one — that when the U.S. economy falters, the Fed cuts very short-term rates, the only ones that it controls, to stimulate business. But this time the Fed hasn’t confined its rate-suppression activities to the short-term markets.
It’s been a huge buyer of Treasury securities with maturities of up to 10 years, as well as mortgage-backed securities and Lord only knows what else. This buying pressure forces up the securities’ prices, and thus reduces their yields.
The Fed, which declined to talk to me, is the major buyer of mortgage paper, in what’s clearly an attempt to hold down mortgage rates and prop up house prices. The Fed has also been a huge buyer of Treasury bills — securities with a maturity of less than a year — that Uncle Sam has issued to help fund the federal deficit and pay for various bailout programs.
But wait, there’s more. As part of the economic stimulus package, the federal government is promoting Build America Bonds, under which the Treasury pays 35% of the interest costs of project-related bonds issued by state and local governments. These BABs, as they’re known, are taxable securities rather than being tax-exempt as normal state and local bonds are.
The BAB program has sharply reduced the supply of new tax-exempt muni bonds. Almost $40 billion of Build America Bonds have been issued since the program began in April, according to Bloomberg.
Chip Norton, a muni maven at Wasmer Schroeder & Co., says that by reducing the supply of new munis, Build Americas have been a major factor in driving down yields on one- and five-year triple-A munis to 0.5% and 2.3%, respectively, from 3.4% and 3.6% two years ago.
One day, the federal government won’t be able to keep all these interest rates artificially low, as it’s now doing. The Chinese government, our major financier, is growing restless. The dollar’s falling sharply relative to other currencies is an ominous sign. If this problem accelerates, it will put pressure on the Fed to let interest rates rise to protect the dollar from a collapse.
But until rates go up, Wall Street will be chowing down on essentially free money, while fixed-income people living off their investments will have to eat into their capital, take more risk, or reduce their standard of living. A nice reward from their government for a lifetime of saving. Thanks for nothing, guys.
First Published: October 20, 2009: 9:57 AM ET
http://money.cnn.com/2009/10/19/news/economy/low_rates_savings.fortune/index.htm?postversion=2009102013
The secret Paulson-Goldman meeting
When Paulson learned that Goldman’s board would be in Moscow at the same time as him, he had [Treasury chief of staff] Jim Wilkinson organize a meeting with them. Nothing formal, purely social — for old times’ sake.
For fcuk’s sake! Wilkinson thought. He and Treasury had had enough trouble trying to fend off all the Goldman Sachs conspiracy theories constantly being bandied about in Washington and on Wall Street. A private meeting with its board? In Moscow?
For the nearly two years that Paulson had been Treasury secretary he had not met privately with the board of any company, except for briefly dropping by a cocktail party that Larry Fink’s BlackRock was holding for its directors at the Emirates Palace Hotel in Abu Dhabi in June.
Anxious about the prospect of such a meeting, Wilkinson called to get approval from Treasury’s general counsel. Bob Hoyt, who wasn’t enamored of the “optics” of such a meeting, said that as long as it remained a “social event,” it wouldn’t run afoul of the ethics guidelines.
Still, Wilkinson had told [Goldman chief of staff John] Rogers, “Let’s keep this quiet,” as the two coordinated the details. They agreed that Goldman’s directors would join him in his hotel suite following their dinner with Gorbachev. Paulson would not record the “social event” on his official calendar…
“Come on in,” a buoyant Paulson said as he greeted everyone, shaking hands and giving bear hugs to some.
For the next hour, Paulson regaled his old friends with stories about his time in Treasury and his prognostications about the economy. They questioned him about the possibility of another bank blowing up, like Lehman, and he talked about the need for the government to have the power to wind down troubled firms, offering a preview of his upcoming speech.
http://blogs.reuters.com/felix-salmon/2009/10/20/the-secret-paulson-goldman-meeting/
#140 - they’re listening to this Board - I swear! Finally people are talking about it - but they need to put it in perspective against no stock market gains for the last 10 years, no housing gains for the last 10 years - and no pensions - so how are people going to be growing old with dignity in the US of A?
I’ll take socialism any time - I get tax free interest of 4% on my savings here in France - the most productive OECD country in 2008.
My saving should be earning 5% within some kind of investment. It isn’t. I’m pissed. 5% was a modest expectation, now its impossible without taking on large risk.
Beach,
Give my regards to Lyon.
That BAB stuff is bunk. Senior Citizens buy tons of 10-20 year munis and buy and hold. They only re-invest when one matures. THE BAB issuance has reduced tax free munis hence causing prices to rise. If a retiree rolls 5% of bonds each year at a much lower rate it is more than offset by the fact 95% of his bonds have gone up in value due to BAB. My Munis are all spread out from 1-30 so something like 3.3% mature each year. some years rates are down some years they are up, big deal. Most likely people will go short when rates are low and long when rates are high. In 2000 people were buying 30 year munis but in 2004 more like 5 year munis. In December 2008 when long term munis were 6% I was only buying 20-30 year munis. This article only applies so someone who is only investing all their fixed income money today.
That BAB stuff is bunk. Senior Citizens buy tons of 10-20 year munis and buy and hold. They only re-invest when one matures. THE BAB issuance has reduced tax free munis hence causing prices to rise. If a retiree rolls 5% of bonds each year at a much lower rate it is more than offset by the fact 95% of his bonds have gone up in value due to BAB. My Munis are all spread out from 1-30 so something like 3.3% mature each year. some years rates are down some years they are up, big deal. Most likely people will go short when rates are low and long when rates are high. In 2000 people were buying 30 year munis but in 2004 more like 5 year munis. In December 2008 when long term munis were 6% I was only buying 20-30 year munis. This article only applies so someone who is only investing all their fixed income money today.
re #142 - Barbara - that discussion is being held all across this country right now. It has been a long enough time for the sheep to wake up and realize that they cannot get decent yield without major risk. Many are smarting with 201k’s right now so they know the risk is real.
The question for the Board is will people go all Mrs. Watanabe and risk moeny in FX and the local neighborhood pochino parlor over the fast talking horse toothed desk jockeys in three piece suits?
chi fi - are you telling your clients that the dow is more likely to NEXT hit 11k-12k or 6k-7k?
The secret Paulson-Goldman meeting
When Paulson learned that Goldman’s board would be in Moscow at the same time as him, he had [Treasury chief of staff] Jim Wilkinson organize a meeting with them. Nothing formal, purely social — for old times’ sake.
For fcuk’s sake! Wilkinson thought. He and Treasury had had enough trouble trying to fend off all the Goldman Sachs conspiracy theories constantly being bandied about in Washington and on Wall Street. A private meeting with its board? In Moscow?
For the nearly two years that Paulson had been Treasury secretary he had not met privately with the board of any company, except for briefly dropping by a c0cktail party that Larry Fink’s BlackRock was holding for its directors at the Emirates Palace Hotel in Abu Dhabi in June.
Anxious about the prospect of such a meeting, Wilkinson called to get approval from Treasury’s general counsel. Bob Hoyt, who wasn’t enamored of the “optics” of such a meeting, said that as long as it remained a “social event,” it wouldn’t run afoul of the ethics guidelines.
Still, Wilkinson had told [Goldman chief of staff John] Rogers, “Let’s keep this quiet,” as the two coordinated the details. They agreed that Goldman’s directors would join him in his hotel suite following their dinner with Gorbachev. Paulson would not record the “social event” on his official calendar…
“Come on in,” a buoyant Paulson said as he greeted everyone, shaking hands and giving bear hugs to some.
For the next hour, Paulson regaled his old friends with stories about his time in Treasury and his prognostications about the economy. They questioned him about the possibility of another bank blowing up, like Lehman, and he talked about the need for the government to have the power to wind down troubled firms, offering a preview of his upcoming speech.
http://blogs.reuters.com/felix-salmon/2009/10/20/the-secret-paulson-goldman-meeting/
RE: “no PITI check if you put enough $ down”
No PI, but Taxes, Insurance, Opportunity Costs, Transaction Costs, and Maintenance remain.
People are angry but they continue to vote in the same D’s and R’s.
I’ve seen more articles about a crash in MSM. Makes we think that the powers that be will continue to march us higher.
Chi seems to be the only one outraged at the insider trading scam. It’s scary because most of us are so desensitized to this crap that there’s no surprise or outrage. That’s sad.
Never go car shopping with your wife.
yikes says:
October 20, 2009 at 4:44 pm
chi fi - are you telling your clients that the dow is more likely to NEXT hit 11k-12k or 6k-7k?
y: No one asks that question. The gist of most of my conversations is “..am I still on target for X…” or something specific about a current issue they face.
Since you are asking…first off the Dow is useless now, so you have to talk S&P, or some other relevant index. That said, you are asking do I think the market will go up 10-20% or down 30-40% first, yes?
I think the market can go up, but not because the growth story here is good. In fact, it is horrible. However, much of the US-based multi-nationals are exposed to other countries with majority cash flows in other currencies that make top line growth possible.
I think for U.S. investors, stock are fairly or richly priced…however, for non-USD investors, the market looks cheap.
All that said, do not mess around with garbage companies or securities. Move back to global companies with strong balance sheets. It is not black and white. Just given the choice, cheat towards more stable companies that have good (explosive) growth prospects outside the U.S. However, if things blow up, they are not nuked.
I would stay underweighted financial companies at this juncture.
yikes: monitor the Fed’s rhetoric like a hawk…they are going to try a “jawbone” the market….
http://en.wikipedia.org/wiki/Jawboning
But until rates go up, Wall Street will be chowing down on essentially free money, while fixed-income people living off their investments will have to eat into their capital, take more risk, or reduce their standard of living. A nice reward from their government for a lifetime of saving. Thanks for nothing, guys.
Spot On.
Cheaper homes?
http://finance.yahoo.com/news/Homes-About-to-get-much-cnnm-699910894.html?x=0
When Bill Gross is sellin’…you’d best not be buyin’. So stay away from the billions in agency paper that he’s dumping (on us, of course):
“As always, PIMCO, which itself is a key participant of virtually every Fed and Treasury program as an agent, manages to eek out a decent living, while stuffing Uncle Sam with the worthless refuse, whose true worth will only become evident once (if ever) the printing presses are shut.”
http://www.zerohedge.com/article/pimco-dumps-80-billion-fed-sponsored-agencies-taxpayers-lap-makes-over-1-billion
watching frontline on derivatives… seems like Brooksley Born would be welcome on this site…
watching frontline on derivatives… seems like Brooksley Born would be welcome on this site…
watching frontline on derivatives… seems like Brooksley Born would be welcome on this site…
We need the French to provide us with the moral authority to design the right healthcare system for the U.S. as well as be our guide to Middle East diplomacy….
http://www.bloomberg.com/apps/news?pid=20601039&sid=amHd8LLJ_jAE
“Brooksley Born”
that Brooksley can take a hike.
tries to direct you from what is really going on:
centralize local capital.
done by
-consolidate daily transactions (retail & food trade)
-outscource labor and deskill existing labor
-privatize governmental functions i.e tolls, lotto, parking meters, water, electric, prison system (hell, even aspects of military).
-devalue dollar, and pump & dump real estate so you can buy it at a firesale.
-use drug trade, human trafficing & organized crime to help finance all of the above. This allows you to eliminate competition, expand operations while simultaneously lower the price of start up capital.
-you then use kickback, bribes, buyouts, blackmail to leverage all of the above with tax shelters, private tax-exempt bonds, municipal bonds, government guarantees, and government subsidies.
-then, you cherry pick companies, mutal fund holders, and crime syndicates access who will you can allow to carry out all of the above. i.e “you pick whom will play ball and follow your rules”
Wa…La…
You extract capital from communities, towns, countries at high rate of return, and negative rates and risk back on the communities and taxpayers.
THAT!!!
my friend is whats going on, and its getting to a tipping point where its ugly head is really starting to show.
anything else, or if anyone tells you anything else….
well, there just slingin’ cain.
SAS
PS-don’t get me started about Afgan & Opium.
SAS: I think you need some warm milk and cognac!
and you think Omama is going to bring “change”
ha ha ha….
he ain’t nothing but a marketing ploy.
same as all those politicans, matter not if Republican or Dem. They are both bought and paid for and use you…the guinea pig sap… to divert you from looking under rocks.
SAS
“SAS: I think you need some warm milk and cognac!”
hey, thats a good idea about now.
:P
SAS
I do love fall & the chill in the air, so refreshing.
btw: my post at 160 ties right into the main article of this thread.
SAS
Does anyone here remember a band from NJ from the 70s named Trigger?
I hear theyare playing some Meadowlands Octoberfest.
SAS,
I have been looking under rocks for about 6 months. UN Agenda 21? Let me know if Im getting close.
Better get armed people. NJ can take 6 months to get a FID.