Wednesday, December 7, 2011
Home Prices Are Still At The Top Of Their Historical Range Before The Bubble
Note the inflation-adjusted similarity of the current index value to the late 1980s and the late 1970s.
This means prices could continue to fall at least another 7-8 percent from April 2011 levels, and easily overshoot to the downside as the imbalances continue to correct.
And it could take a very long time.
(source)
The Day The Jobs Stood Still: Obaamu Baracka Nikto
About 2 million fewer total non-farm workers are employed today than in January 2009, despite growth in the population.
Homeownership Under Obama Hits a New All-Time Low of 59.2 Percent
Even a broken clock is right twice a day:
"This is a make-or-break moment for the middle class and all those who are fighting to get into the middle class. At stake is whether this will be a country where working people can earn enough to raise a family, build a modest savings, own a home and secure their retirement."
-- President Obama, quoted here, Dec. 6, 2011
The fact is the moment has already broken against the middle class.
Nobody is fighting to get into the middle class. The middle class is fighting to stay middle class, and is losing.
The president, who only now protests that he would rescue the middle class as the election season heats up, has actually presided over its demise, turning the middle class into the working class renters of yesteryear, and worse, according to this story from August 5, 2011 at CNN Money (link):
"This is a make-or-break moment for the middle class and all those who are fighting to get into the middle class. At stake is whether this will be a country where working people can earn enough to raise a family, build a modest savings, own a home and secure their retirement."
-- President Obama, quoted here, Dec. 6, 2011
The fact is the moment has already broken against the middle class.
Nobody is fighting to get into the middle class. The middle class is fighting to stay middle class, and is losing.
The president, who only now protests that he would rescue the middle class as the election season heats up, has actually presided over its demise, turning the middle class into the working class renters of yesteryear, and worse, according to this story from August 5, 2011 at CNN Money (link):
Home ownership is on the decline and, according to a recent Morgan Stanley report, the United States is fast becoming a nation of renters.
Last Friday, the Census Bureau reported that the percentage of people who owned a home had dropped to 65.9% during the second quarter -- its lowest level since the first quarter of 1998 and a far cry from the high of 69.2% reached in late 2004.
Yet, in a research paper issued a week earlier, Morgan Stanley (MS, Fortune 500) analysts Oliver Chang, Vishwanath Tirupattur and James Egan argued that the home ownership rate is even lower than the Census Bureau statistics say.
In fact, once they factored in delinquent mortgage borrowers (the ones who are likely to lose their homes at some point), Morgan Stanley calculated that the home ownership rate is more like 59.2%.
That's the lowest level since the Census Bureau started keeping quarterly records back in 1965 (before that, it recorded home ownership rates once a decade). The Census Bureau's statistics, however, do not factor in mortgage delinquencies.
When it comes to savings, the president speaks of modest savings and secure retirement as his goals for us, when the actual picture is a grim present and a worse future.
A survey using 2009 data and making the rounds in May 2011 said nearly half of Americans couldn't come up with $2,000 for an emergency within 30 days (link).
And just two days ago a story (link) reported on a different survey which suggests that over half of the 151 million American workers have less than $25,000 saved while over half of the already retired are in the same boat:
More than half of all workers, 56%, say they have less than $25,000 in savings, according to a survey by the Employee Benefit Research Institute. ...
More than half of retirees, 54%, report they have less than $25,000 saved. That's up dramatically from 2006, when 42% said they had less than that.
The most recent data from the Bureau of Economic Analysis (link) confirms that there has been a steady decline in the personal savings rate under Obama from 5.3 percent in 2010 to an annualized rate of 3.8 percent in the third quarter of 2011, a nearly 30 percent decline from what was already an inadequate level.
Some unemployed and now homeless families in hardest hit states like Florida are reduced to living in their cars, trucks and vans because shelters are already full. Their plight was the subject of a recent story (link) on 60 Minutes.
The American middle class is under siege on every front, from jobs, to homeownership, to family formation, to savings, to retirement. All this has unfolded under Obama's watch, who vacations, golfs, parties, fund-raises and speechifies, railing against business and the rich at every opportunity. But it is the middle class which is disappearing as he speaks, and he's done nothing to stop it.
The true meaning of class warfare.
When it comes to savings, the president speaks of modest savings and secure retirement as his goals for us, when the actual picture is a grim present and a worse future.
A survey using 2009 data and making the rounds in May 2011 said nearly half of Americans couldn't come up with $2,000 for an emergency within 30 days (link).
And just two days ago a story (link) reported on a different survey which suggests that over half of the 151 million American workers have less than $25,000 saved while over half of the already retired are in the same boat:
More than half of all workers, 56%, say they have less than $25,000 in savings, according to a survey by the Employee Benefit Research Institute. ...
More than half of retirees, 54%, report they have less than $25,000 saved. That's up dramatically from 2006, when 42% said they had less than that.
The most recent data from the Bureau of Economic Analysis (link) confirms that there has been a steady decline in the personal savings rate under Obama from 5.3 percent in 2010 to an annualized rate of 3.8 percent in the third quarter of 2011, a nearly 30 percent decline from what was already an inadequate level.
Some unemployed and now homeless families in hardest hit states like Florida are reduced to living in their cars, trucks and vans because shelters are already full. Their plight was the subject of a recent story (link) on 60 Minutes.
The American middle class is under siege on every front, from jobs, to homeownership, to family formation, to savings, to retirement. All this has unfolded under Obama's watch, who vacations, golfs, parties, fund-raises and speechifies, railing against business and the rich at every opportunity. But it is the middle class which is disappearing as he speaks, and he's done nothing to stop it.
The true meaning of class warfare.
Tuesday, December 6, 2011
Lawyer for Joshua Clough of the Hutaree Militia Turned His Client for The State
If you were 29 and your lawyer offered you 5 instead of life after 20 months in the slammer, what the hell do you think you would do?
On Monday, nearly two years later, Clough cut a deal with the government in admitting to his role in the plot -- a confession that will land him in prison for five years. The deal spared him a potential life sentence.
"This was a difficult choice. I guided him to this decision, and he's comfortable with it," said Clough's lawyer, Randall Roberts, who wouldn't say whether Clough is cooperating against the remaining defendants.
This is why they don't release you on bond, so they can grind you down, working on you day after day, week after week, month after month, until you crack.
None dare call it tyranny: "the accused shall enjoy the right to a speedy and public trial."
Read the whole story in The Detroit Free Press (link).
John Tamny Believes The Mad Dream of Libertarian Ideology
 |
| Briggs forgets his limitations |
-- John Tamny (link)
Just taken at face value the statements are a self-contradiction because the first logically excludes the second.
To qualify the range of permissible action is to limit the range, which therefore cannot be infinite, by definition. In fact, the very resort to so qualifying the range in the first place is a sort of back-handed compliment to the limitations which the underlying order places on all the constituent elements of the world.
Conservatives recognize in the underlying order the divine, which is the basis of the rights. Accordingly the rights themselves have limitations, just as also do we. As surely as our common end is the grave, no one is at liberty to shout "Fire!" in a crowded theatre and to hope to escape arrest. The right to free speech is not absolute.
Conservatives recognize in the underlying order the divine, which is the basis of the rights. Accordingly the rights themselves have limitations, just as also do we. As surely as our common end is the grave, no one is at liberty to shout "Fire!" in a crowded theatre and to hope to escape arrest. The right to free speech is not absolute.
And to qualify infinite natural rights as somehow American reminds one of nothing so much as the unreflective boosterism of the by-gone era of manifest destiny.
Conservatives recognize their own limitations. Libertarians do not. Therefore the latter are dangerous, especially at the movies.
Conservatives recognize their own limitations. Libertarians do not. Therefore the latter are dangerous, especially at the movies.
The Next Bailout: Think Fed Leverage at 53:1 is Bad? Try the FHA at 417:1.
The second catalyst [for government support of housing to decline] is the FHA, which looks increasingly like it will need a bailout. In its annual report to Congress, released a few weeks ago, the FHA reported estimated economic net worth of $2.6 billion backing $1.078 trillion insurance in force, for a capital ratio of just 0.24% (or 417x leverage). One year ago, the capital ratio was 0.50%, and in 2007 it was 6.4%. The FHA's annual report claims it's adequately capitalized, but this conclusion relies on home prices not falling at all from here. ...
The government will have to pony up to recapitalize the FHA. FHA mortgages are fed into Ginnie Mae MBS, and Ginnie Mae MBS are explicitly backed by the full faith and credit of the United States government. So if the FHA runs out of funds, the government will have little choice but to step up. To do otherwise would be a default – not out of the question these days, but not very likely either.
 |
| FHA and VA loans fill void left by private lending |
Dr. Housing Bubble weighs in with the big picture (link):
The trend for lower home prices has been baked in for nearly a year now. Last summer we had a mini burst of buyers thanks to artificial tax credits and low interest rates. I still view the current market as being designed for the nothing down leverage happy mentality that is present in our society. You have a large number of buyers purchasing homes with 3.5 percent down FHA mortgages and the default rates are soaring in this category. ...
Over half a decade ago I knew the bigger issue would be the cognitive dissonance that would linger from a post-bubble world. Many now realize that what occurred in the housing market was a once in a lifetime spending binge induced by debt. Yet some still think those days are only around the corner. The global debt crisis will not allow that. This is why most of the mortgage market is now dominated by the government. How many foreign governments or investors are going to trust Goldman Sachs or Morgan Stanley when they drop by their door steps with new mortgage backed securities? I think some have learned their lessons well and the data reflects this.
The housing market was bound to have a day of reckoning and it looks like it is slowly unraveling. It was simply impossible to have a shadow inventory growing with banks just ignoring the reality. We are now going into year five of the housing bubble bursting. You have millions of those in foreclosure who have not made a payment in one to even two years.
Ultimately the burden falls largely on the middle class. The Federal Reserve has a primary mission to protect banks. That is their bottom line. They are not looking out for the best interest of homeowners or working Americans. For the cost of the bailouts and shadow loans, they could have paid off close to every mortgage in the country. Yet even principal reductions were never on the radar because to do that, it would be to admit a financially broken system. Instead they opted to give out $7.7 trillion in backdoor loans to banks and forced the public to deal with “free market” solutions. An interesting situation no doubt but the problems we are now facing are based on this two-tiered system.
Confounded Interest points out (link) just how high the FHA default rates are:
As of October 2011 17.02% of FHA loans were at some stage of delinquency. The serious delinquency rate is 9.05%.
Clearly another government sponsored enterprise is repeating the mistakes of the past as we speak, having destroyed its capital base with non-performing loans swelling its balance sheet. FHA obviously should require down payments which are much higher than 3.5 percent in order to strengthen its bottom line, but it's probably too late to avoid bailing it out for the mistakes it has already made.
The trend for lower home prices has been baked in for nearly a year now. Last summer we had a mini burst of buyers thanks to artificial tax credits and low interest rates. I still view the current market as being designed for the nothing down leverage happy mentality that is present in our society. You have a large number of buyers purchasing homes with 3.5 percent down FHA mortgages and the default rates are soaring in this category. ...
Over half a decade ago I knew the bigger issue would be the cognitive dissonance that would linger from a post-bubble world. Many now realize that what occurred in the housing market was a once in a lifetime spending binge induced by debt. Yet some still think those days are only around the corner. The global debt crisis will not allow that. This is why most of the mortgage market is now dominated by the government. How many foreign governments or investors are going to trust Goldman Sachs or Morgan Stanley when they drop by their door steps with new mortgage backed securities? I think some have learned their lessons well and the data reflects this.
The housing market was bound to have a day of reckoning and it looks like it is slowly unraveling. It was simply impossible to have a shadow inventory growing with banks just ignoring the reality. We are now going into year five of the housing bubble bursting. You have millions of those in foreclosure who have not made a payment in one to even two years.
Ultimately the burden falls largely on the middle class. The Federal Reserve has a primary mission to protect banks. That is their bottom line. They are not looking out for the best interest of homeowners or working Americans. For the cost of the bailouts and shadow loans, they could have paid off close to every mortgage in the country. Yet even principal reductions were never on the radar because to do that, it would be to admit a financially broken system. Instead they opted to give out $7.7 trillion in backdoor loans to banks and forced the public to deal with “free market” solutions. An interesting situation no doubt but the problems we are now facing are based on this two-tiered system.
Confounded Interest points out (link) just how high the FHA default rates are:
As of October 2011 17.02% of FHA loans were at some stage of delinquency. The serious delinquency rate is 9.05%.
Clearly another government sponsored enterprise is repeating the mistakes of the past as we speak, having destroyed its capital base with non-performing loans swelling its balance sheet. FHA obviously should require down payments which are much higher than 3.5 percent in order to strengthen its bottom line, but it's probably too late to avoid bailing it out for the mistakes it has already made.
Monday, December 5, 2011
Talking Tough While Armed Is Now A Crime of Violence in Hutaree Verdict
The plea bargain merely establishes that this poorly advised misguided soul mistakenly agrees that intemperate talk of a plot while armed is itself a crime of violence.
What material difference such talk makes whether armed with a "gun" or merely with one's two arms is now brought into question. The 2nd Amendment is what is under attack here, in order to get at the 1st.
He should get a new lawyer.
The Detroit Free Press has the best coverage (link) of the plea bargain reached with Joshua Clough, 29, who is set to spend five on ice and testify against his brethren:
Joshua John Clough, 29, formerly of Blissfield Township, pleaded guilty today to the use of a firearm during, and in relation to, a crime of violence. ...
Clough went on to admit that, as part of their plot, the Hutaree conducted military-style training in Lenawee County, where they engaged in weapon proficiency drills, patrolling and reconnaissance exercises, and demonstrations on how to assemble and use explosives.
Clough admitted that around Feb. 20, 2010, he participated in a Hutaree training exercise that focused on an upcoming, covert reconnaissance exercise, which was scheduled for April 2010.
During this training, Clough used and carried a firearm.
Perhaps the NRA should take up the case and argue that carrying a firearm is a form of speech, which it most certainly is. Just ask anyone deterred from a crime by the sight of one, as happens everyday.
Sunday, December 4, 2011
Saturday, December 3, 2011
Obama Must Be Crackin' a Cold One Tonight: Herman Cain Finished Off in Record Time
The very likeable black Republican with the easily understood tax proposal was neutralized in record time by making him very unlikeable with half of the electorate.
It isn't just that our politics have degenerated into playing the race card, but also the gender card.
Herman Cain didn't help himself when on top of inspiring no confidence on some of the issues he mismanaged the lynching. The thing is, no one expected it would be a female lynch mob, probably Herman most of all. Men are stupid that way. That Herman should have known the Obama m/o in Illinois only demonstrates another disqualification for the big leagues.
What was he thinking?
The LA Times has the story of the end of the Herman Cain for president campaign here.
"In God We Trust" Passed the US House 396-9 on November 1
Even liberals like Nancy Pelosi, Jan Schakowsky, and Barney Frank voted FOR it, along with a boat load of other Democrats and Republicans.
This mostly blue map shows the very few pockets in red which voted against the national motto, as reaffirmed, supported and encouraged by House Continuing Resolution 13:
Here are the nine members of the US House who just had to vote AGAINST it, all Democrats except for Amash, last pictured (MI-3): Ackerman (NY-5), Honda (CA-15), Stark (CA-13), Judy Chu (CA-32), Scott (VA-3), Johnson (GA-4), Cleaver (MO-5), and Nadler (NY-8):
Friday, December 2, 2011
The Nation's Motto Dates to 1814 and the Fourth Stanza of a Song We Still Sing
Oh! thus be it ever, when freemen shall stand
Between their loved home and the war's desolation!
Blest with victory and peace, may the heav'n rescued land
Praise the Power that hath made and preserved us a nation.
Then conquer we must, when our cause it is just,
And this be our motto: "In God is our trust."
And the star-spangled banner in triumph shall wave
O'er the land of the free and the home of the brave!
The Feeble-Minded, Libertarian Crank, Rep. Justin Amash Can't Encourage "In God We Trust"
Resolved by the House of Representatives (the Senate concurring), That Congress reaffirms ‘In God We Trust’ as the official motto of the United States and supports and encourages the public display of the national motto in all public buildings, public schools, and other government institutions.
There is nothing binding in this resolution whatsoever.
It does not require the motto be displayed, anywhere. It merely supports the motto and encourages its display where and when it happens. A wise man, even an atheist, would regard this as a mere trifle, a sop to the parochial interest of an unenlightened but harmless population, a one-off costing nothing to a politician with any sense.
But Amash still couldn't stomach it. Prudence is not a subject of the law schools, which know with Socrates that virtue cannot be taught, but especially to the ilk it attracts.
That said, it is sheer misrepresentation for Amash to say, “There is no need to push for the phrase to be on all federal, state, and local buildings.”
The bill pushes nothing, unless you're an over-sensitive freak, an un-American ideologue like Justin Amash.
George Washington, on the other hand, not only found it unobjectionable but recommended for the mere American politician to cherish and respect religion and morality:
Of all the dispositions and habits, which lead to political prosperity, Religion, and Morality are indispensable supports.—In vain would that man claim the tribute of Patriotism, who should labor to subvert these great pillars of human happiness, these firmest props of the duties of Men and Citizens.—The mere Politician, equally with the pious man, ought to respect and to cherish them.—A volume could not trace all their connexions with private and public felicity.—Let it simply be asked where is security for property, for reputation, for life, if the sense of religious obligation desert the oaths, which are the instruments of investigation in Courts of Justice? And let us with caution indulge the supposition, that morality can be maintained without religion.—Whatever may be conceded to the influence of refined education on minds of peculiar structure.—reason and experience both forbid us to expect, that national morality can prevail in exclusion of religious principle.—
I have seen no evidence that Justin Amash cherishes or respects religion and morality as a politician, nor that he understands their priority over him as a Christian legislator and American, which he claims to be.
Rather is it evident that his loyalties are to a narrowly conceived creed of a different kind.
The do-gooder's work is never done.
Rather is it evident that his loyalties are to a narrowly conceived creed of a different kind.
The do-gooder's work is never done.
Ratio of Employed to Population at 58.5 Mired at Levels from Early 1980s
 |
| up-to-date through 11-30-11 |
The Fed's Dollar Swap Operation in Europe is a Sign of the Desperation of Monetarism
So says Jeffrey Snider, here:
Rising credit equals rising economic activity, so the advancement of the banking system necessarily and uniformly leads to advancement in the real economy. This is a pervasive belief that is accepted in too many places without critical questioning, especially in the political arena.
As I (and many others) have said numerous times, it is a deliberate prevarication. The Fed and central banks around the world coordinate dollar swap lines to save the banking system from its umpteenth moment of illiquidity simply because the banking system, through credit creation, equals control over the economies those central banks are supposed to serve. ...
The Fed, the economics profession and the financial media spread the idea that this unfettered credit creation paradigm is part and parcel to the basic economic philosophy of capitalism. It is not. Capitalism represents the free expressions of a free society, so leeching onto it achieves another shortcut to allow free people to accept a degree of economic central control. ...
The central control of modern economics seeks to control credit independent of actual demand; indeed, it seeks to create demand from nothing.
If a housing bubble achieves the philosophical aims of "stimulating" the economy to some predetermined target or range, then the political aims of the central bank are fulfilled no matter how shortsighted that may be. ...
The detachment of credit money from actual money demand to engage in productive transactions is both the glaring difference between capitalism and monetarism, and the ultimate weakness of superimposing the latter on the former. ...
As the façade plummets to earth in the messy aftermath of what it, not capitalism, has wrought, the central authorities cling desperately to their system. It matters little if bailing out the eurodollar market for the fifth time actually advances the real economy. All that matters is that the tools for maintaining the elitist utopia are preserved for future use. They just want us to accept that they know better, having already crowned themselves Lords of the global economy.
Thursday, December 1, 2011
Obama Hasn't Had One Week of Initial Claims for Unemployment Below 375,000
LOOK IT UP: here.
The ONLY time it got that low was ONE week in February of 2011.
Every other single week has been HIGHER. In fact, I count just 13 weeks in the below 400,000 category for Pres. Obama, all of which have occurred in 2011. By contrast, Pres. George W. Bush had 318 weeks below 400,000.
Obama's entire presidency to date, nearly three years, is defined by doing NOTHING about unemployment at catastrophic levels: WORKERS COVERED BY UNEMPLOYMENT INSURANCE UNDER OBAMA HAVE DECLINED BY 8 MILLION.
President Obama is an unmitigated disaster to the American worker, who suffers silently because of Obama's policies.
Is Limbaugh High on Painkillers Again?
After telling us repeatedly in recent weeks that the banks were NOT bailed out, today, 45 minutes into the show, Rush Limbaugh is quoting approvingly from Dan Hannan here at the UK Daily Telegraph, telling us capitalism hasn't been practised here for three years, what with all the bailouts and the like.
Talk about turning on a dime.
Rush's defense of the banks has been that American banks didn't need bailouts (TARP), took them and paid them back because they were intimidated by the Feds.
This continues to misrepresent TARP, and miss the scope of the bailouts, which were a series of massive, sustained behind-the-scenes loan operations at rock-bottom rates in the trillions of dollars. TARP was a puny fraction of the total loaned by the Federal Reserve.
The same pattern is now repeating in the EU crisis, with the Fed loaning dollars ultra-cheap to EU banks.
This is not a free market in banking, and it hasn't been since 1913.
Taxpayers shouldn't be backstopping any banks, who have been cut loose by Republicans and Democrats to play with your money, your bonds and stocks, and your mortgages. When they succeed, they pocket the profits. When they fail, you pay.
You are subsidizing the success of the business model of the banks, and accepting the risk for its failure.
You are subsidizing the success of the business model of the banks, and accepting the risk for its failure.
Rush appears to be too goofed up to grasp this, besides the fact that to do so means to repudiate the accomplishments of Republicans like Phil Gramm and Newt Gingrich, whose power and influence were exercised to pass the legislation in the 1990s which has brought us to this pass.
It's Not the Fed's Job to Bail Out Europe's Banks and Governments
So says Kevin Williamson, here:
"Congress should make it clear — today — that the Fed’s mandate does not extend to bailing out Europe’s banks and Europe’s governments. This is especially true after the secrecy and unaccountability with which it conducted the $7.7 trillion shadow bailout on top of TARP."
A voice of sanity.
Occupy LA: 30 Tons of Trash and Treason. Tea Parties: Zero Trash and 100 Percent American.
 |
| Occupy LA's used props 2011 |
 |
| Michigan Tea Party 2009 |
Subscribe to:
Posts (Atom)