JayB

Never been there - but sounds like Australia's version of Bayou country, only hotter and muggier for most of the year. London has had it's ups and downs, but it's been a global hub of commerce for a few centuries, is right next to the most significant commercial block in the world, etc, etc, etc. I also suspect that it has enough incomes on the right side of the distribution curve, in aggregate, to drive the mortgage-to-average-income metrics well beyond the averages that prevail elsewhere. Ditto for Tokyo, New York, San-Francisco, etc. Same deal for resort cities/towns, although the money behind the loans that distort the ratio is imported from somewhere else. Not sure that either can explain Darwin, or most other cities on the list. I'm sure that's happening to a certain extent in Vancouver, particularly in the more glamorous/desirable neighborhoods, but I don't think there's enough commerce or glamor-chasing money to keep the party rolling indefinitely for the entire metro area and hinterlands. 33 Years of Price-History for Vancouver...

Or other stolid real estate markets like Southern California and Florida! will be interesting to see how real estate missile attack plays out in recourse Countrys like Canada and Australia Darwin, Oz with a higher debt-to-income multiple than London...

Sounds like Vegas. Not sure that's quite as convincing an argument for Surrey, Coquitlam, Moose-Jaw, etc as Canada's answer to FNMA/FMAC rolling out the zero-down, 40-year mortgage. IMO take a ruler to the slope of the line generated by plotting the mortgage-to-income ratio from 1965-1995, extend the plot for 20 years, and you get a pretty good basis for determining whether property values in a given major-metro area are under or over their sustainable long-term levels. Not sure where that's at for Vancouver, but I doubt Vancouver was anywhere near the number one spot in the "least affordable city in the world," during that period. "Vancouver most expensive place to own house Vancouver, Jan 26 : Vancouver is the most expensive city in the world to own a house today, says a report on worldwide housing markets released Monday. The annual report on housing affordability around the world by Canada's Frontier Centre for Public Policy said, "Vancouver is the most unaffordable of the 28 housing markets measured in Canada and the most unaffordable of the 272 metropolitan markets ranked in Ireland, the UK, New Zealand, Australia, the US and Canada.'' Vancouver is followed by Sydney, Melbourne, Adelaide, London , New York and San Francisco as the world's least affordable places to own a house today, according to the report. Toronto and Montreal, two biggest Canadian cities, were "severely affordable'' and "seriously affordable'' respectively, the sixth annual report - titled Demographia International Housing Affordability Survey - said. With the median sale value of a house at USD 540,900 and the median household income just at USD 58,200, Vancouver was the most unaffordable place on earth to own a house today, according to the report by the Winnipeg-based centre. "The recent increases (in housing prices) to almost ten years' income are thus unprecedented in modern history,'' said the study. http://www.newkerala.com/news/fullnews-38179.html

The mortgage-to-income metrics have looked pretty alarming in most of Canada, Australia, and NZ for quite a while. Vancouver and the major cities in Australia look particularly bad on that front.

W T F . . .

Not very surprising when virtually the entire media and right wing wage a 40 year long anti-government propaganda campaign. You can't spread lies about an essential institution like government forever without nasty blowback. We also won't discuss how the perennial anti-intellectualism/anti-science of the right wing and corporations contributes to folks distrusting scientists. I'm just surprised you didn't implicate Karl Rove here. You're slipping, my friend.

Yup. Just finished "Autism's False Prohpets," by Paul Offit, M.D. Great guide to understanding how this particular wave of idiocy got started, and for pwning any anti-vaccination tards that you encounter. Worth noting that Vashon Island and Ashland, Oregon boast some of the lowest vaccination rates in the developed world. Quite an amazing ideological convergence between the mothers of 1930's Appalachia and high-end organo-mom's with college degrees or higher today. Breast feed way past the time when your kids have teeth and walk on their own, shun vaccination, etc, etc, etc.

http://www.npr.org/templates/story/story.php?storyId=125570056&ps=cprs

Word is there's a nice little measles outbreak brewing in BC. 44 cases and counting....

There was a guy at my high school who inherited good looks, height, intelligence, a charming disposition, and lots of athletic talent - but his family seemed to be on the very low end of middle-class, at least income wise. There were also rich dweebs that inherited none of these attributes from their parents. Methinks the rich dweebs would have traded places with the other guy in a heartbeat, but perhaps if they spent enough time with academic sociologists they'd succeed in convincing them that they got the better deal from the birth-lottery.

Contemplating the web of connections and circumstances behind spoiled rich kids that crash and burn through that framework is kind of an interesting exercise. It's worth asking whether increasing marginal tax rates will always lead to a higher tax yield, and more revenues to pay for programs that help those that are struggling. Ditto for rates of capital formation that ultimately translate into real productivity gains and real wage increases, etc, etc, etc. What's revenue-optimizing for the long-term may not jive well with popular conceptions of fairness. Taxing interest income at the same rate as regular income will probably work well on the fairness front, but anyone trying to raise money from the market to finance a new factory, wind-farm, power-plant, refinery, etc, will find it harder to do so than they would otherwise and will likely create less capacity or chose to finance and build it elsewhere. Not entirely sure that will be a net plus for the folks who have no interest income to speak of, and suspect the net increase in tax-yields that it generates will be well below forecasts. The "luxury tax" that on boat purchases over 100K was probably a winner on the perceived fairness front, and it's conceivable that it succeeded in crimping the style of the folks who could actually afford those boats a bit, but the most decisive impact was on the people who made their living fabricating the said boats. I'm not entirely sure that they'd agree that the subjective satisfaction that the fairness camp derived from sticking it to their customer base was a social good sufficient to warrant their collective employment losses. Fewer boats, lower industrial output, fewer jobs, fewer payroll and business taxes, lower sales tax receipts....but more fairness. Probably seems like a worthwhile trade-off if you don't make your living building big boats, or depend on the lost tax revenue that the big-boat business generated in some fashion or another. Who knows - maybe the subjective benefits of perceived fairness will be more than sufficient to offset the effects of the taxes on drugs and medical devices. Not likely, but we can hope.

If you're not ready to admit you have a problem, you're not ready to get well. What does rock-bottom look like for the neoliberal fundamentalist, I wonder? Somalia is a deregulated/small government paradise to market fundamentalists like JayB so there is likely a way to go before reaching rock-bottom as far as he is concerned Hong Kong, Singapore, Australia, and New Zealand are actually at the top of the list. http://www.heritage.org/index/ranking.aspx

that's rich coming from the guy who claims that SS is responsible for the debt crisis, when in fact it is solvent for at least another 30 years. Intellectual honesty seems to be an entirely foreign concept for JayB. I'd say that the consistently spending more than you take in, and making fiscal promises you can't keep are responsible for the debt, the current and projected magnitudes of which have risen to levels that cause people to invoke the word "crisis" when discussing it. Anytime you want to discuss where the money will have to come from to fund the conversion of accounting ledger entries that constitute the SS assets into cash benefits, let me know.

Don't think any are on the state payroll except for perhaps the state patrol.

A government run by people who divert the finite pool of tax revenues available to serve the public interest away from their most efficient allocation to provide the said services doesn't look terribly pretty, from an ethical or fiscal perspective. "Consider what happened in Washington State. After helping Democrats win full control of the legislature in 2002, the state affiliate of the Association of Federal, State, County, and Municipal Employees (AFSCME) and other unions persuaded lawmakers to lift the collective bargaining restrictions. Within three years the number of union members had doubled. With more state employees paying dues, the amount of union dollars flowing into the coffers of Democrats running in state elections also doubled. A prime beneficiary of such union generosity was Christine Gregoire, who became governor in 2004 after one of the closest elections in the state’s history. (AFSCME gave $250,000 to the state Democratic party to help pay for the recount that handed her the election by 129 votes). Once in office, Gregoire negotiated contracts with the unions that resulted in double-digit salary increases, some exceeding 25 percent, for thousands of state employees" Even a cent of what someone like the average short order cook makes going into the pool of public money and being diverted away from its most beneficial use and put instead towards funding a benefits package infinitely superior to his own, for someone much better off than he is - is a travesty. It's kind of funny and sad that financing your own retirement in with the same vehicles available to the vast majority of private sector workers, and bearing the same proportion of one's health care expenses is considered to be an unthinkable hardship for the current crop of public servants. Worse yet, one that warrants cutting essential services rather than the compensation of those that are tasked with delivering them. It wasn't always thus.... "What produced the enormous expansion of public sector unions? In a case of unintended consequences, government unionism ironically developed from actions taken by those hostile to it. Many of the icons of the labor-left like New York’s great mayor Fiorello LaGuardia and President Franklin Roosevelt were adamantly opposed to public sector unions. LaGuardia, who pledged to make New York a “one hundred percent [private sector] union” town, had a civic vision of public employees as the people’s workers, exemplars of the common good. Famed for dropping in unexpectedly on city offices and dressing down slackers, LaGuardia explained that he did “not want any of the pinochle club atmosphere to take hold” in his city government. “The right to strike against the government,” he insisted, “is not and cannot be recognized.” In 1935, Roosevelt signed the Wagner Act, the first peacetime effort to support the growth of private sector unions. Its aim in the words of its sponsor, New York senator Robert Wagner, was “encouraging the practice and procedure of collective bargaining.” But like his close ally LaGuardia, Roosevelt drew a definite line when it came to government workers. “Meticulous attention,” the president insisted, “should be paid to the special relations and obligations of public servants to the public itself and to the Government. The process of collective bargaining, as usually understood, cannot be transplanted into the public service.” Both men feared that liberalism would be compromised by the unavoidably self-serving nature of public sector unionism."

Amazing. Like Pertinax after Commodus. Hopefully he lasts longer. He's my early long shot bet for POTUS in 2012. Like WH Taft--only with the beat down directed at the new big govt oligarchs and their union leeches. If a guy like that can get elected in New Jersey, perhaps there's a prayer for Washington, but I'm not optimistic. As long as the public is convinced that the PEU's are "the little guy" we're a long way from the day when short-order cooks don't have to fork over their wages to finance health and pension benefits far more generous, secure, and substantial than anything they'll see for their entire working lives. We're also a long, long way from widespread public disgust at cutting public services, particularly for the most vulnerable, before even marginally tweaking health and benefit expenditures for *future* public employees. I'm voting against every single tax increase until the 60% of public spending that goes straight into public employee bank accounts gets dealt with, and their retirement and health benefits are on par with the private sector average. Probably means I'll be voting no forever, but I've had it.

More like the road to...the last Farm Bill. Guess who Uncle Sugar took the best care of in that one. Not the likes of the organic carrot farmer that shuttles his wares to the boutique market in his home-brew biodiesel fueled pickup. BTW, bit dramatic there, what with the "late-capitalism" and all of that. Not even sure Marx would have persisted in singing this tune much beyond the 1890s, but I'm sure he'd be touched by your devotion.

Agree about the perverse incentives for everyone except the ultimate bag-holders, at least those that weren't bailed out by the taxpayers - which might be the most important of the perverse incentives in the whole game. If you haven't checked them out already, there's a series of about ~ 15 conversations about the financial crisis over at Econtalk. Very good conversation about risk-modeling with Ricardo Rebonatto, and I think you'd particularly enjoy the conversations with Nassim Taleb as well. http://www.econtalk.org/archives/financial_crisi/ FWIW I respect the host, Russ Roberts' conclusions on the whole thing quite a bit, and from what I gather your take on this thing is pretty consistent with his.

The most touching article of faith here is the notion that the power that the government amasses to distort commerce won't ultimately be deployed for the benefit of the interests that have the most to gain from having it exercised on their behalf.

That "ramble" is way more on the money than the vast majority of commentary out there. My hunch is that the losses on their MBS portfolio would have ultimately put them under even without the bank loan, but that's just speculation on my part.

Maybe a "Honk if I'm paying your mortgage!" bumper sticker will take the edge off.

A fool and his money are soon parted. Anyone who bought anything having to do with mortages other than credit-default swaps covering the default risk on the repacked toxic sludge was a 'tard. This entire "no one saw this coming" business concerning the housing bubble in general, and the MBS fiasco in particular, is an astonishing claim. That is, its astonishing that anyone gives it any credence. There were thousands of average joes, asset managers, and even a few prominent economists - most notably Robert "Irrational Exhuberance" Shiller who saw what was happening clearly and were shouting warnings to anyone that would listen. There were even a few non-tard, plain vanilla investment companies like T. Rowe Price saw the trainwreck coming and did a pretty good job of shielding their clients from the damage. The folks who bought the toxic waste were either 'tards, morons, or gamblers who got stuck without a greater fool to hand their hot potato to. Ditto for 90% of the folks who bought with non-traditional mortgages and find themselves underwater. One aspect of this fiasco that no one thinks about much is the extent to which it was driven by pension fund managers trying to cover the promises made to future retirees. When you are desperate for the yield necessary to cover the gap between what can actually be funded with sound investments, and what they're legally obliged to pay out, apparently you do silly things. Like buying billions of dollars of repackaged no-doc, neg-AM, Alt-A or subprime mortgage paper. Tards.

Smartest money that moveon.org et al could spend would be checks sent directly to the Palin campaign.

I suspect the folks who peered into the WAMU balance sheet well before the merde hit the fan and shorted the bejezus out of the stock didn't get hurt too badly.

If you're not ready to admit you have a problem, you're not ready to get well. What does rock-bottom look like for the neoliberal fundamentalist, I wonder? North Korea, Zimbabwe, Cuba, Eritrea, Burma, Venezeula, Libya, DRC, Turkmenistan, Solomon Islands, Republic of Congo, Iran. Numbers 179-168 out of 179 in this year's Index of Economic Freedom.