Economic News

[JayB]

USA= u stand alone

 

Metrics for greater Vancouver/Calgary are right up there with Vegas, Baby.

 

 

[prole]

Maybe I'm just taking too short-term a perspective here considering the economy is in the shitter and the number of Americans with the "right credit/income/savings profiles" seem to be scarce to say the least and shrinking by the news cycle.

 

Look upon my work, ye real-estate concentrators, and despair...

 

 

"Beware the Foreclosure Allure

Redbrick's Model of Scattered Bets Is Cautionary Tale

By JAMES R. HAGERTY

 

 

Many investors have been tempted by the idea of buying foreclosed homes in bulk from banks, at a steep discount. But the experiences of a Washington, D.C.-based property investment firm, Redbrick Partners LLC, show it can be difficult to manage a large number of single-family rental homes scattered across a metropolitan area.

[redbrick] Reuters

 

Redbrick's business of buying up properties in cities like Trenton, N.J., and outsourcing rentals and maintenance has proved difficult to execute.

 

Though Redbrick was never in the business of buying foreclosed homes, the firm in recent years bought hundreds of properties in working-class areas of East Coast cities including Baltimore, Philadelphia and Trenton, N.J. It hired local managers to handle rentals and maintenance.

 

Now Redbrick, formed in 2003, has concluded that it is too costly to manage those homes and is trying to sell most of them. Tom Skinner, one of Redbrick's managing partners, notes that fixing leaky toilets and other common problems is much more complicated in a diverse array of homes than in an apartment building where fixtures are standard and the manager can walk from unit to unit..."

 

http://online.wsj.com/article_email/SB122222286574070071-lMyQjAxMDI4MjIyNDIyMjQyWj.html

 

I'm sure that working for a landlord can be a real bitch sometimes.

 

[Hugh Conway]

USA= u stand alone

 

Metrics for greater Vancouver/Calgary are right up there with Vegas, Baby.

 

 

I've never heard such sweet love out of your keyboard. Revelstoke here I come baby!

[j_b]

Speaking of history lessons, it might be useful to revisit the saga of the Corn Laws, back in the days before "liberal" and "leftist" meant two entirely different things.

 

This is not an auspicious start for a history lesson. Liberal and leftist mean two entirely different things for people who confuse liberalism with anarcho-capitalism. Liberalism is the product of the enlightenment against religious dogma and for freedom of thought. It is also strongly underpinned by the concept of social contract, which is clearly antithetical to laissez faire libertarianism.

 

 

You could have spared us all of this reading by simply pointing out that your side is rabidly against the breakup of oligopolies/monopolies or never accounts for the collusion between the news business, the militari-industrial complex, politicians, etc.., which are certainly more relevant today to monopolistic activities than your 300 yo Corn Laws. Under Reagan, the glory age of deregulation, antitrust cases against mergers declined to their lowest levels in 80 years. Anyway, it’s enough to hear you expounding the virtues of the deregulation of telecoms and note that customers are paying way more than ever for telecom services, that TV and internet cables services are de facto monopolies today (fact that you keep not answering ...), that 100,000’s of people have lost their jobs in the telecom debacle and that the entire industry still is not profitable, to see there is a serious disconnect between your discourse and the solutions your side preaches.

 

 

I'm still waiting to hear the array of industries that will constitute your pean to the glory days of corporatism, but the gist of your arguments seem to be that consumers were much better off when the government prohibited competition using one mechanism or another. Whether it's corn or cars, when the government shields one company or sector from competition, the consumer invariably pays more and gets less than they would if the government wasn't playing favorites. There's no escape from this.

 

You seriously need to review your arithmetic. The purchasing power of consumers is determined by prices AND WAGES. If you deregulate to the point where you workforce competes with that of developing nations, its purchasing power is bound to tend toward that of the workforce of developing nations, no matter what’s the price of Wal-Mart’s imported plastic junk. 30 years after the beginning of deregulation, the immense majority of households have 2 wage earners instead of one, most of them go from paycheck to paycheck, 99% of them have lost purchasing power, most of them have little savings; I’d say it about time you reassessed your model, because it doesn’t work for 99.9% of us. You guys are like locusts, everywhere your ideology won by free or totalitarian means, the economy tanked.

[j_b]

This is the market correction that's been long overdue. I say let the McMansions and the willfully and ignorantly overextended suck it...just like Barney Frank.

 

I totally agree. We need to protect our assets from foreign takeover but at the same time I think this country needs a hard lesson that as individuals, companies, and government that we can't live off of credit and loans, especially when an increasing amount of our money is leaving.

 

Getting people enslaved to their home and mortgages was part of the republican plan all along. Thatcher did the same thing with great success because she knew that once folks had their nest egg in the market they'd have to support it. Remember the "ownership society"? Nordquist said it'd be Bush's greatest legacy. Well, there you have it.

[JayB]

Speaking of history lessons, it might be useful to revisit the saga of the Corn Laws, back in the days before "liberal" and "leftist" meant two entirely different things.

 

This is not an auspicious start for a history lesson. Liberal and leftist mean two entirely different things for people who confuse liberalism with anarcho-capitalism. Liberalism is the product of the enlightenment against religious dogma and for freedom of thought. It is also strongly underpinned by the concept of social contract, which is clearly antithetical to laissez faire libertarianism.

 

 

You could have spared us all of this reading by simply pointing out that your side is rabidly against the breakup of oligopolies/monopolies or never accounts for the collusion between the news business, the militari-industrial complex, politicians, etc.., which are certainly more relevant today to monopolistic activities than your 300 yo Corn Laws. Under Reagan, the glory age of deregulation, antitrust cases against mergers declined to their lowest levels in 80 years. Anyway, it’s enough to hear you expounding the virtues of the deregulation of telecoms and note that customers are paying way more than ever for telecom services, that TV and internet cables services are de facto monopolies today (fact that you keep not answering ...), that 100,000’s of people have lost their jobs in the telecom debacle and that the entire industry still is not profitable, to see there is a serious disconnect between your discourse and the solutions your side preaches.

 

 

I'm still waiting to hear the array of industries that will constitute your pean to the glory days of corporatism, but the gist of your arguments seem to be that consumers were much better off when the government prohibited competition using one mechanism or another. Whether it's corn or cars, when the government shields one company or sector from competition, the consumer invariably pays more and gets less than they would if the government wasn't playing favorites. There's no escape from this.

 

You seriously need to review your arithmetic. The purchasing power of consumers is determined by prices AND WAGES. If you deregulate to the point where you workforce competes with that of developing nations, its purchasing power is bound to tend toward that of the workforce of developing nations, no matter what’s the price of Wal-Mart’s imported plastic junk. 30 years after the beginning of deregulation, the immense majority of households have 2 wage earners instead of one, most of them go from paycheck to paycheck, 99% of them have lost purchasing power, most of them have little savings; I’d say it about time you reassessed your model, because it doesn’t work for 99.9% of us. You guys are like locusts, everywhere your ideology won by free or totalitarian means, the economy tanked.

 

I've got to get back to packing for a bit, but:

 

-Are you suggesting that increased competition in the telecommunications business would be bad for the consumer?

 

-What, in your opinion, determines both real wages and real wage growth? There seems to be a theory embedded in your final paragraph, but it would be helpful if you'd make that explicit.

[prole]

Getting people enslaved to their home and mortgages was part of the republican plan all along. Thatcher did the same thing with great success because she knew that once folks had their nest egg in the market they'd have to support it. Remember the "ownership society"? Nordquist said it'd be Bush's greatest legacy. Well, there you have it.

 

A fascinating account of this ideological shift and its practical implications with regards to mutual funds, etc. can be found here.

 

The reign of neoliberalism in Britain, Canada and the United States has witnessed the vast expansion of the mutual-fund industry, with a battery of mass-marketing techniques and friendly pundits at its disposal. [1] Neoliberal governments on both sides of the Atlantic have offered tempting tax breaks to draw small savers into the equity market through such funds (known as unit trusts, in Britain). At the same time, the switch from ‘defined-benefit’ to ‘defined-contribution’ pensions has left millions more with their futures dependent on the stock exchange. By the late 1990s, over 50 per cent of US households had a stake in the stock market, up from 25 per cent in 1987 (and from only 3 per cent in pre-crash 1929). This exponential growth, it will be argued, has led to the emergence of a widespread ‘investment culture’ which, in turn, has played a critical role in strengthening the hegemonic dominance of finance capital—linking the perceived interests of tens of millions of workers to its own by embedding ‘investor practices’ in their everyday lives and offering them the appearance of a stake in the neoliberal order. In this sense, the mutual-fund industry can be said to represent the mass marketing of the structures and processes of global finance itself.

[JayB]

This is the market correction that's been long overdue. I say let the McMansions and the willfully and ignorantly overextended suck it...just like Barney Frank.

 

I totally agree. We need to protect our assets from foreign takeover but at the same time I think this country needs a hard lesson that as individuals, companies, and government that we can't live off of credit and loans, especially when an increasing amount of our money is leaving.

 

 

 

Getting people enslaved to their home and mortgages was part of the republican plan all along. Thatcher did the same thing with great success because she knew that once folks had their nest egg in the market they'd have to support it. Remember the "ownership society"? Nordquist said it'd be Bush's greatest legacy. Well, there you have it.

 

'Tis a happy slave who toils in a prison of stainless and granite...or so their Realtor told them.

 

http://www.youtube.com/watch?v=Ubsd-tWYmZw

 

[TREETOAD]

USA= u stand alone

 

Metrics for greater Vancouver/Calgary are right up there with Vegas, Baby.

 

 

Agreed, but alberta is hardly canada. more like texas without the death penalty and vancouver...well its just a big polluted shit hole

[mkporwit]

And it appears that the bailout deal is off, at least for now.

[olyclimber]

[Hugh Conway]

Agreed, but alberta is hardly canada. more like texas without the death penalty and vancouver...well its just a big polluted shit hole

 

Leaving "real" Canada as rusting Ontario and wasting away Quebec and Maritimes?

[pc313]

So much for the big rip-off,I hear China's,and Japan's investors lost alot of money! let them bail it out!!

[olyclimber]

[mattp]

What I don't get about the whole thing is why are the Democrats trying so hard to adopt Bush's proposal in the first place? Should we really be buying out all those bad accounts? I don't understand all the complexity of the banking industry but it seems to me that the populist rhetoric coming from the House Republicans has some appeal to it and may, for once, actually have substance as well.

 

Strange times indeed.

[dberdinka]

Matt please explain how....

 

Eliminating Capital Gains taxes

Deregulating the industry even further!

and

Insuring against losses so that once agin profits are privatized and losses are socialized

 

....has any populist appeal!

 

The Republicans aren't mad about the cost of the bailout plan , their mad that the plan doesn't let the banks keep the profits from taxpayer money!

 

...and... "the bush plan" is radically different from the "dodd plan" both in cost and pain inflicted on the industry.

Edited September 26, 2008 by dberdinka

[glassgowkiss]

i don't buy this bs about issue this issue being so complex, that only a few "chosen" once can comprehend it.

[prole]

If the Dems are maneuvering to create the best possible conditions for Obama to govern under, then it's likely that the Dems realize that the Republican's (actually a fraction's) populist rhetoric is likely to come to shit if the lack of a bailout results in The Great Reset and sinks the nation. At least if they get something through under Bush, they can blame him later and avoid accusations that their inaction created the Depression in the event of an Obama victory.

Edited September 26, 2008 by prole

[dmuja]

 

The repubs are afraid of being called hypocrites for using the gobment to bail out the private sector. They are playing on the "anger of the people" and are pretending that not bailing the shit out will result in those responsible being punished by their own stupid actions.

 

The dems see an opportunity here to change some things. If we don't bail the shit out (even with fake money - ie more debt) the people who will suffer the most are the mid-lower classes as always be the case.

 

The rich fucks who caused the shit will be just fine as always be the case and as most rich folks are republican they don't really give a fuck about a recession or depression that effects mainly poor folk.

[glassgowkiss]

The repubs are afraid of being called hypocrites for using the gobment to bail out the private sector. They are playing on the "anger of the people" and are pretending that not bailing the shit out will result in those responsible being punished by their own stupid actions.

 

The dems see an opportunity here to change some things. If we don't bail the shit out (even with fake money - ie more debt) the people who will suffer the most are the mid-lower classes as always be the case.

 

The rich fucks who caused the shit will be just fine as always be the case and as most rich folks are republican they don't really give a fuck about a recession or depression that effects mainly poor folk.

 

i think the reason there is such a strong push for the bail out is, that for the first time, actually people with money, who are going to fill it. a lot of "rich fucks" were only rich on the paper, not in terms money in hand. you can't take away from people who don't have. i think the real issue here is if the bailout happens the programs have to be cut and it is where the hit on low income is going to come from.

personally the "sky is falling" cry wolf shit is just shit talk of the group of people, who don't want to give up the high life of credit mongers.

[mattp]

Darin, you are right on several points. I don't support eliminating capital gains taxes or further deregulating the industry. I'm not saying I think the Republicans have a good plan, but that there might be something to the idea that it might be cheaper insure against some of the risk rather than to simply wholesale purchase what we know to be a pile of garbage.

 

I understand and appreciate that the Democrats HAVE imposed some accountability on the whole thing and what at this point appears to be the most likely eventual agreement will not offer the blank check sought by Mr. Treasury, but in the sound bite department I have heard more from Republicans about how the average guy like you and me is getting screwed by all of this and it really does stink. I'm not saying sound bites are substance, but at least they are mentioning the idea that this is really going to benefit the banking industry first, and we're hoping for secondary benefits for the rest of us. Isn't this kinda sort of sounding like trickle down economics?

[glassgowkiss]

can anyone LOGICALLY explain how buying a lot of bad debt is good for me?

[tvashtarkatena]

Any bail out plan that requires a large goverment loan to the troubled investment banks will rapidly inflate the money supply and lead to hyper inflation.

 

To stay functioning, the financial industry needs three things:

 

1) capital

 

2) Investor/consumer confidence

 

3) A stemming of mortgage foreclosures, which, after all, is the root cause of all this mess.

 

One plan to address all three might include:

 

1) Federal insurance, purchased by the financial institutions,

to bolster confidence in their long term prospects immediately. This is one part of the House GOP plan.

 

2) The ability to negotiate a reduced mortgage in bankruptcy court. After all, any other kind of debt can be negotiated down in such a court, why not a mortgage? This would hurt banks a bit, but cost no money to the Feds up front, and greatly help to address the stem cause foreclosure problem. Yes, it 'rewards' bad behavior, but everyone's gotta give up something here.

 

3) Executive compensation limits (although this is more punative than substantive, but it's still necessary and this is THE time to do it, when Wall Street's bargaining power is just about zilch.)

 

These two actions should reduce the liquidity problem.

 

3) WIth a reduced infusion necessary, the Feds could make up the difference with successive purchases of investment bank equity in, say 50 billion increments, as needed (randomly chosen number, but much lower than the flood of 350 billion or 700 billion, which seems unmanagealbe, too risky, and frankly, knee jerk to me. If the taxpayers are going to pony up here, they should own a piece of the pie to sell off later.

 

So, a plan of insurance, mortgage relief, and equity purchase, and exec compensation limits, IMO, would seem to balance up front risk with the need to stop foreclosure hemmoraging and boost investor/consumer confidence.

Edited September 26, 2008 by tvashtarkatena

[olyclimber]

imagine a house of cards. then dream if you will a courtyard.

[Gary_Yngve]

I'm just glad the Repubs in Congress had some sense and realized "too much power, too much money, too fast."