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There's an average/median income in every local real estate market that includes unemployed and underemployed workers. So "all in" the demand for those local homes and the prices families can afford SHOULD be highly correlated to that number.
What our politicians, corrupt bankers and all the sleazeballs in the real estate industry did was tamper with some basic hard truths with any and every sleazy, confusing gimmick they could conjure. I'm not just talking about the sub-prime loans. You have to have economists, statisticians, journalists and regulators all selling the same coordinated set of lies about GDP, employment, inflation and the general health of the economy to cause the massive delusion.
Many, if not most people are still deluded in that they refuse to see that home prices HAVE to reflect the local income base. Where the hell is that 30 year mortgage payment supposed to come from?
Maybe I'll buy a book of stamps now. I wouldn't before because every time I'd stock up there's be raises and I'd have to go buy one and two cent stamps.
"Prices have already adjusted, and are probably undervalued in most cities," said Newport. "This will make them even more undervalued."
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I'm amazed at how cheap homes are in the rust belt but those prices are a reflection of the lack of decent paying job opportunities, deteriorating neighborhoods and horrible public school systems.
In the bubble markets of Florida, California, Vegas, Phoenix and elsewhere home prices are still WAY out of line with household incomes even after losing 50%+ off their peak high valuations.
Gas and food go up, cars stay expensive, but a house isn't worth anything, just dosen't make sense to me.
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Don't those seemingly small, creeping costs of the most essential living expenses squeeze ever more families out of the marginal home ownership market? Median household income was $52K last official reading. There's simply not going to be a bid under those modest homes in modest neighborhoods at prices that the lenders are not secure in the expectation that the family buying the home can support that mortgage or at least be liquidated at a reasonable recovery rate.
So real estate, being a local market everywhere has to, in my opinion adjust back to those local median household incomes. You're implication that home prices should be running up with general cost of living inflation seems flawed to me on the basis that the higher costs are reducing the families ability to cover high end mortgages.
I think there's a longer term trend down in home prices that can't be broken out of in REAL terms (see shadowstats.com and NOT BLS nonsense)without significant and long term wage gains.
The Hearst Castle is worth stopping for.
http://www.hearstcastle.org/
Certainly there's going to be reductions in benefits for MOST, if not all pensions, both public and private. I was objecting only to the idea that the reductions could or should be uniform across the board. People's problems in Alabama shouldn't impact federal pensions. If the U.S post Office is in a bind that shouldn't impact the International Longshoreman or City of Pasadena. Corporations have to deal with their legal obligations to the pension plans.
The primary issue as I see it is the conflicts of interest between those managing the pensions and those who depend on them.
""i think the fair criteria is to lower the pension plan benefits equal to and reflective to what the average individuals retirements benefits have been diminished to.
ex: if the average person has been affected 25%, then the pension plans need to be lowered that exact degree. why should an individual keep receiving pension benefits that are outdated when everyone else is eeking by on (ex.) 25% less."
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With no relationship to the city, state, federal, county, corporate or institutional pension fund assets?
Only Uncle Sam can actually print funny money from thin air to cover it's promises. The rest of the world has to actually have a dollar in assets to deliver a dollar of pension benefits to a retired worker. If Illinois or California are the worst case scenarios and let's say they've got 40-50% saved/invested for their participants how do you propose they pay 75 cents on the dollar?
Other entities certainly have managed their funds competently and honestly and can provide some much higher benefit------maybe even 100%. So shouldn't the criteria for paying out pensions be related to the actual assets of the fund? It sounds like your proposal is fair to some who worked for irresponsible agencies at the expense of the rest of us. As if we should ignore the last 50-75 years of actual investment results and just shuffle the deck and start over. Good luck with that idea.
The point being that the pain can't necessarily be spread evenly at this point. Both those responsible for funding the pensions and those receiving benefits have to recognize that the rest of society isn't a party to their contract.
OK, I'm just talking about the very immediate, obvious consequences of trying to "throw off the shackles" of our financial overlords.
I believe we're in full agreement that the elite in our society are more than useless to us. They've just got a stranglehold on the flow of money......which equates to food, water, fuel, housing, health care and everything else you need today, tomorrow and every day after that.
I'm not quite prepared to live "off the grid" for the time being.
How about we consider maybe just maybe letting the defunct businesses, well, go out of business, spend less and otherwise get our financial house in order (in order, in the historical sense not the Allen Greenspan/ Benny Hill B dysfunctional sense).
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The list of failed institutions is very long and because the survivors are not really solvent without the pretend assets of the failures who owe the survivors $$TRILLIONS$$ they chose to consolidate the failed financial firms or pump hundred of billions here and there to keep the ATM machines working, our paychecks cashing and the VISA and Mastercards valid. Without credit, paychecks and ATM machines our economy, military and civilization collapses. The terrorists would win.
They weren't kidding about that part.
Yes, over some time frame the whole Ponzi culture could be restructured but not by trying what we did with Lehman Bros. again. From that episode, and I suspect it was well contrived and understood in advance how it would play out, we know what your suggestion leads to in the short term.
"The public has largely given up on the market psychologically"
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That seems kind of an absurd statement to me in the context of what percentage of "the public" can really pay attention to and even pretend to understand what's going on with the stock market.
I understand the point you're making that LESS traders have any confidence in buying stocks for long term holds outside of pension funds, insurance annuities, mutual funds and automatic 401K contributions.
There's much less interest generally in stocks the same way there's much less interest in real estate. Once many, many millions of households have been SEVERELY burned in our corrupt casinos it's really hard to get them to stick their hands back into the open flame.
Bought MMG @1.05
Under the plan, Citigroup and the government have identified a pool of about $306 billion in troubled assets. Citigroup will absorb the first $29 billion in losses in that portfolio. After that, three government agencies -- the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp. -- will take on any additional losses, though Citigroup could have to share a small portion of additional losses.
The plan would essentially put the government in the position of insuring a slice of Citigroup's balance sheet. That means taxpayers will be on the hook if Citigroup's massive portfolios of mortgage, credit cards, commercial real-estate and big corporate loans continue to sour.
In exchange for that protection, Citigroup will give the government warrants to buy shares in the company."
http://online.wsj.com/article/SB122747680752551447.html
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This equity position is NOT the main component of the bailout package------it's more like a footnote or apostrophe on the whole deal. So cashing out this stock doesn't close the book on the taxpayers' problems with the bad paper Citigroup has hidden off the books. That's the problem. They'v legalized the whole Enron scheme of off balance sheet debt for the select few financial entities that are politically too connected to be allowed to fail.
They're playing the same nonsense game with the General Motors situation where the corporation throws a token amount towards paying back it's bailout package and the press writes a headline as if somehow we're making out good on the deal.
I hate being mocked like that.
"You see they are ALL crooks"
I'm glad we could agree on at least one thing.
"you have earned my pity because while the shackles may be on me too, at least I feel their weight and struggle against them while you have come to accept and not even notice them."
I can't persuade you that a discussion of taxation can be distinct from one of government spending. Let's move on.
I don't feel it is ethical to take from those who have earned to squander it on waste and corruption. No matter how much they earn.
That's a little bit silly. No one should have to pay for waste and corruption. But we're talking about raising the top tax rates from 35% to 39.5%. What impact will that have on the competence and integrity of your Congress and the money they spend? I'll tell you. It's zero impact regardless of what happens to our tax scheme.
If I got up and worked for it or risked money and managed to do well or have a talent that people are willing (or stupid) enough to pay huge sums for, what right does a Charlie Rangle who just decides he doesn't have to obey the tax laws he wrote have to take it from me?
Your first objection about waste and corruption is irrelevant in my opinion. Now you're using the politics of personal destruction to throw out another irrelevant objection to higher marginal tax rates. Was Ton Delay an honest arbiter of Congressional largess? How about we focus on the actual discussion of marginal tax rates and our progressive tax system?
It doesn't matter if I create job 1, it is mine, I earned it, I should get to reap the benefits of those earnings. And if the people on Wall Street did something illegal in earning that money, put them in jail.
No, you only get to keep the income that's not subject to taxation and that amount will be determined by Congress and your tax accountant. Wage earners have money withheld from their paychecks and business owners make estimated quarterly payments. That's not their money until they settle up with Uncle Sam. There's a difference between what you think and what you want from what is the reality.
Do you think that the taxing will stop with "the rich"? Does it ever? If you set the parameter that it is OK to take from the earner and dish it out to those who haven't (and yes I know we already have, doesn't mean we should keep it up) soon you will have fewer and fewer people willing to bust their humps or take risks and more and more who feel they have a "right" to that ever shrinking pie. That is the bigger long term danger. That is a house of cards that will collapse and cause the world to burn when it does. If you want something, get off your duff and earn it on your own, don't take it from someone else. There is where we have gone wrong. IMO
Gee, you make it sound like only the highest 2-3% of income tax earners are working for their money. I've actually experience running crews of very well paid men who refused to work weekends because the taxes WITHHELD from their checks was pretty extreme when they make a couple thousand bucks a week. The IRS didn't recognize that some of those fellows only worked six months a year and so with held more than half their pay. They were also having state and city income taxes with held. Those guys were dolts and I just replaced them with other guys who were smart enough to realize that they would be due a very large refund check at the end of the year. People making less than $250K have much more incentive to "work a little harder" if they can keep more of their paycheck. Overwhelmingly the 1.3M or so households with annual incomes over a quarter million dollars will do nothing different as far as actual work or spending should we change their tax rates. It's something their accountants will address by shifting around their liabilities and income streams. In other words its a red herring to think "small business owners" are closing up shop or otherwise restructuring ACTUAL OPERATIONS because of a 4.5% increase in their tax liability on their NET income over $250K
Seems really silly and absurd to me. Why does the media take it seriously and make it out to be such a hysterical subject? Is there anything more to the "Tea Party" than a nonsensical bunch of Joe the Plumbers who aren't smart enough to grasp how marginal tax rates work?
According to U.S. Census reports 1,324,000 reported incomes above $250,000.
So who are these 1,324,000 people?
http://money.gather.com/viewArticle.action?articleId=281474977453286
Again, it's hard to narrow it down. Most of the statistical charts deal in median income, which means it throws out the top and bottom wages to calculate the average. So perhaps we have to go with our collective knowledge. What groups can we identify, off the top of our heads, that earn $250,000 a year?
Entertainers and Athletes. These guys are pulling down millions (OK, not the D-list actors, but you know what I mean). Does giving them a tax break generate more jobs? Does reducing their tax bill by, on average, $15,000 a year, create a new job? Or does it buy another Rolex? Or, on the other side, does increases their taxes by, on average, $23,000, destroy an existing job? They might have to fire their housekeeper or gardener...no, that would mean they would clean their own houses or mow their own yards. Besides, most of the Hollywood types are supporting Obama anyway, so obviously they aren't concerned about the $23,000.
Corporate CEOs. Not the guy who incorporates his business and gives himself the title to sound important. We're talking about the big boys from the big corporations. These are the guys running those big banks, mortgage lenders, investment firms, and such that the taxpayers are currently bailing out to the tune of billions of dollars. These are the guys that make the decisions to move jobs overseas, close plants, and fight giving employees a living wage. Will putting an extra $15,000 on average in their pockets suddenly inspire them to move jobs out of China and back to the U.S.? Or will increasing their taxes on average $23,000 help offset some of the economic problems their lack of forethought caused?
Health Care professionals and attorneys. While the median doctor income is around $150,000, some earn hundreds of thousands of dollars. Now don't get me wrong, I respect the work these folks do and believe they earn that money. But will giving them a $15,000 tax break create a new job?
Marketing/Sales professionals. Though the median income for these folks is around $90,000, those that work for the major firms can pull down MILLIONS! Of course, their income depends on the average American being able to afford to buy the stuff they are marketing. When the economy bottoms out, these guys stand to lose a lot. So will giving them a $15,000 tax credit save their jobs? Or would increasing their tax by $23,000 in order to provide a tax credit to the middle class actually help them make MORE money, because the average American would have more disposable income to spend on Xboxes, clothes, and cars?
Investment Brokers and Speculators. Have you seen the chaos on Wall Street lately? Would giving them a $15,000 tax credit fix the problem? Enough said.
The Wealthy. The folks who come from "Old Money." Those that inherited money from their families. The select few like Bill Gates that pulled themselves up and launched their own empires. Will giving any of them a tax credit inspire them to do anything they aren't already doing? The wealthy that already give back to the community will continue to do so. The wealthy that do not will continue not to. A tax break is not going to change the behavior of either group. Neither is a tax increase.
Yes, I remember this day in 1963. It's the oldest memory I have. What I remember is Mom crying in front of the TV. It's her birthday. She was scared and upset. We lived in a housing project in downtown Pittsburgh. The floors were concrete with paint on them. The walls were cinderblock. Dad was in graduate school with 3 kids. He was 22. I was 3 1/2.
What's good for General Motors is good for America
Therefore.............
America should declare bankruptcy.
AT THE CLOSING BELL ON March 18, 2008
Dow... 12,392.66 +420.41 (+3.51%)
Nasdaq... 2,268.26 +91.25 (+4.19%)
S&P 500... 1,330.74 +54.14 (+4.24%)
Gold future... 1,004.30 +1.70 (+0.17%)
30-Year Bond 4.33% +0.05 (+1.10%)
10-Yr Bond... 3.45% +0.14 (+4.13%)
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[EDIT]
March 19, 2008 was the day of the Visa IPO
watch out shorty!
3/22/1944 concerning the U.S. involvement in the Middle East oil fields---"this gigantic long-distance venture into imperialism."
"It would terminate the inspiring period of America’s history as a great nation not resorting to intercontinental imperialism. This venture would end the influence exercised by the United States as a government not participating in the exploitation of small lands and countries…. It may be that the American people would rather forego the use of a questionable amount of gasoline at some time in the remote future than follow a foreign policy practically guaranteed to send many of their sons, if not their daughters [!], to die in faraway places in defense of the trade of Standard Oil or the international dreams of our one-world planners."
Howard Homan Buffet
Congressman (R) Nebrasaka 2nd District
Shanghai was down over 5% last night.
That kind of thing is now ganz verbotten in this country.
Just as an American has to expect a certain wage to pick lettuce in the fields, scrub toilets or hang drywall a university graduate with a degree would have to have a minimum wage they could accept that would cover their college debt and support a decent life.
If a corporation has a thousand of these jobs that an American would expect $75K a year plus pension and health care benefits when you add in taxes and insurance you're going to be no less than $100K per year. If you break that down to a 50 week work week of 40 hour weeks it's 2000 hours. It's $50 an hour COST to the corporation.
Now if they can have those same skills shipped over here on containers at 1/3 to 1/2 the price displacing those 1000 American workers it's $25 an hour savings (PROFIT) times 1000 workers for every hour of the working day all year long amounting to a savings of $50 million or a MILLION dollars for every dollar per hour of savings.
Now understand that they don't have to displace their entire workforce to achieve such an extreme savings that goes right to the bottom line Just keep in mind that with a thousand employees every dollar per hour in savings equals a million dollars per year cost to the company.
So bringing in even a few immigrants INTO ANY WORKFORCE that are willing to work at a substantially lower wage rapidly acts to debase the market value of the labor being done in that company generating millions in net profit to the bottom line------at least until their competition follows the lead in the race to the bottom.
It was true for field workers and it's true for computer techs with advanced degree. Americans WANT every job out there at a certain, fair and reasonable price point. Lower wages in an industry forces middle class workers to find better opportunities. Our problem is all the workers want to be middle class and all the employers want to pay immigrant wages.
* When you create voluminous amounts of money out of thin air, it will cause inflation and destruction of currencies. My belief is that hyper-inflation is just a matter of time: 2011 or early 2012 very likely. Where are all these monies going to flow to? The emerging market is the likely destination, besides commodities and precious metals.
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Where will the money flow? There's still a huge black hole where our internet bubble, housing bubble and industries like General Motors and Enron used to be. So creating money out of thin air is at this point a process of trying to fill the hole. I don't see the bottom of that Money Pit yet but the Federal Reserve and Congress need us to think that they're managing things just fine---------so go ahead and plan that vacation, make that next mortgage payment and start getting yourself in the Christmas spirit. Holidays are just around the corner and the commercial real estate market can't afford anymore stores to close up shop down at the mall because they desperately need those lease payments. Now get out there and spend, better yet those of you with jobs and credit cards BORROW AND SPEND.
GOD BLESS AMERICA
I was rooting for Texas but in the end I was glad to see a guy like Renteria get the MVP and I'm happy for the Giants in general. I don't care if Renteria's made a hundred million or so in his career. Very few of them can manage their lifestyle's and investments to walk away------"set for life" after playing any professional sport.
So I didn't want to presume that he had the luxury to exit stage left on a high note just because it would be so cool and so appropriate for all concerned if he could.
Let's hope so.
There's been talk of Renteria retiring
So could anyone in his shoes ever go out on a better note?
If he's all set financially he should really think about calling it a career. THAT'S the way to walk off the field and call it a day
tie goes to the runner?
that was awful close
Yes it's time to put 2 and 2 together.
http://finance.yahoo.com/news/AIG-Chief-diagnosed-with-apf-3549966666.html?x=0&sec=topStories&pos=3&asset=&ccode=
Looked like he got in under that tag.
I like seeing Nolan Ryan laughing and enjoying himself.
BACK TO BACK
bad calls
I put half my fortune on SDS and the other half on SSO. I can't possibly lose that way. I'm diversified!
"Bring it on....doesn't every one want to pay $6/gallon as the dollar gets shredded?"
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Given the hurricanes and hailstorms of corruption and idiocy from Wall Street and Washington perverting market signals of efficiency what's to say $6, $.60 or $600 gasoline isn't a fair and reasonable price? Insanity is the rule not the exception.
I'm just saying........
It is much do about nothing in the context of the trillions of dollars in fraud ALREADY perpetrated against the pension funds, mutual funds and insurance funds. Everyone with a pulse has to know the name of the game is EXTEND AND PRETEND. Any bureaucratic hassles that slow down LOAN LOSS RECOGNITION saves the industry from marking down those failing debt securities on their balance sheets. So I don't see how this is anything that actually hurts them.
Makes me think of B'rer Rabbit and the Briar Patch
What drives Wall Street?
Other People's Money
Conventional assets under management of the global fund management industry increased by 14% in 2009, to $71.3 trillion. Pension assets accounted for $28.0 trillion of the total, with $22.9 trillion invested in mutual funds and $20.4 trillion in insurance funds. Together with alternative assets (sovereign wealth funds, hedge funds, private equity funds and exchange traded funds) and funds of wealthy individuals, assets of the global fund management industry totalled over $105 trillion, a increase of 15% on the previous year. The increase in 2009 followed a 18% decline in the previous year and was largely a result of the recovery in equity markets during the year. Part of the reason for the increase in dollar terms was the depreciation in the value of the US dollar against a number of currencies in 2009.
The US remained by far the biggest source of funds, accounting for around a half of conventional assets under management or some $36 trillion. The UK was the second largest centre in the world and by far the largest in Europe with around 9% of the global total.[1]
http://en.wikipedia.org/wiki/Investment_management
You can't fault a UK journal article for not using USA spelling.
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Pardon me sir, but have you got any Grey Poupon?
I saw Wall Street Money Never Sleeps yesterday.
It was disappointed. It didn't meet the standards set by the original in any aspect. It was more than just the weak script. They're preaching at you with so many tired cliches and such a shallow narrative it's boring. You hear the voice of someone with an agenda and just enough comprehension of the market to be dangerous. To summarize, it was shallow and pedantic.
This review summed it up better than I could.
http://wedgeblog.net/?p=474
Good points.
"how does a weaker dollar impact a family who is heavily invested in stocks but never travels farther from the US than Niagara Falls? If the dollar drops by half and the stock market doubles in dollar terms, the family I described above benefits, do they not? What am I missing?"
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If you had zero income and depended wholly on your net wealth then in your scenario you are probably break even essentially------assuming the currency collapse stops there. That would really depend though on your particular purchasing needs and where inflation was rearing it's ugly head. While the dollar may drop 50% it doesn't mean all goods and services will double in lockstep inverse correlation. As we've seen over my lifetime (50) individual goods, services and commodities can scatter with the wind, zig and zag and explode pricewise in somewhat irrational and incoherent market frenzies.
So for example if you didn't own a home and were renting then what your concerns would be are housing costs. If you had health issues then health care inflation affects you disproportionately. Everybody has to eat but depending on your net worth the price of a sack of beans may not be significant. Some day the price of a sack of beans may be very significant. Let's hope not.
Since most famiies with or without assets in the stock market depend on income the purchasing power of the dollar is critical to their living standard. So it's going to be a very few instances of people "breaking even" where our currency collapses to half of today's value.