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I actually read that the other day. But I thought I missed some part of the big picture after reading it, the explanation of how or why the fed sees it's way clear to give away $200 B to investment banks in exchange for some obligations that, in the past were worth $200 B, but no longer are. Maybe the title says it, A Bailout. For Everyone.Quote:
Originally Posted by Stu Gotz
From what I read, the Fed will trade treasuries for the most AAA rated bonds.Quote:
Originally Posted by Nobody Famous
Currently, many lenders have the safest, full doc, Jumbo mortgage pools that have no market for them to be sold in (all the normal investors are hiding) which has caused a huge credit crunch. Consequently the yield spread between conforming and Jumbo loan amounts is at all time highs. I am sure this is the case with commercial paper, student loans, you name it. This is a big problem and this idea is a small step to try and unfreeze some of the liquidity lock up all the markets are dealing with currently.
The Fed will not be buying worthless 100% stated income subprime loans, so don't worry about a big bail out. Just my 2 cents.
Meatdrink thanks for sharing your gameplan, it seems very sound to me. I am wondering though if there are any big liabilities you have to watch out for in your properties. I am not experienced in house buying but am thinking underground tanks, radon, termites stuff like that. What do you think are the things in a house that could become a big problem in a hurry? Is it easy enough to rule out these risks when you go to view a property?
Wow. That $200 billion was a move to bail out Bear Stearns.
The Fed should just let those fuckers fail. Lying through their teeth about liquidity problems.
They should be bailed out, .... of jail. Or not.
Fat chance when the head of the Treasury is the ex-head of Goldman Sachs.Quote:
Originally Posted by Stu Gotz
If you think we're spending a lot of money on Iraq, just wait and see how much money we're going to spend bailing out Wall Street.
The longer this goes on, the more obvious it is that Ron Paul has been right for decades, and the fact that you didn't vote for him means we are all going to be paying for this bailout for the rest of our lives and our childrens' lives, whether through taxes or (most likely) raging inflation.
But that's OK, because Barack Obama has HOPE and CHANGE! (Never mind that he, as well as Clinton, McCain, and Giuliani, are 100% financed by these same Wall Street firms, and will continue these bailouts indefinitely.)
The president doesn't dictate fiscal policy.
Moreso when the Chairman of BearSterns was a PioneerQuote:
Originally Posted by Spats
Quote:
Originally Posted by Spats
I was talking with the owner of the company I work for about the economy today. I brought up R.P. and how he's the only sane man in Washington D.C. who could turn this mess around and he says "who's Ron Paul?" .:rolleyes: Apathy will kill the U.S. eventually.
Keep crashing baby.
And Ron Paul no matter how fucked up he say's the government is was a wacko in my book. His rhetoric if acted upon would have totally disrupted the country. Let it go, the guy is a Douche.Quote:
Originally Posted by rideit
If you want to get upset, there was the dem from Alaska and I already forgot his name. I think that dude would have been good for the country but he just wasn't flashy enough to outshine Obama and Hillery. Dude should have run as a Republican as he should have smoked McCain.
Well, what confuses me at this point is visiting a place like Moonlight, right next to Big Sky, and learning that little "cabins", and, trust me, they were cabins, although slopeside, are selling for 900,000 at the moment. I mean, damn, if there is a bubble, that's a fucking bubble.
I think that can be contributed to the old verbage, "the rich are getting richer, and the poor are getting poorer".Quote:
Originally Posted by Benny Profane
He appoints the Fed's entire Board of Governors, which amounts to the same thing after a few years. (100% of the current board is Bush appointees.)Quote:
Originally Posted by rideit
Hoping beyond what's reasonable here I know but - If real estate prices keep crashing maybe some reassessments will be done that would lower property taxes a bit :rolleyes2 I mean, I know that incomes won't rise to cover costs of living and all but lower taxes would be a help...
Tell that to Paulson after Bushie Boy tells him to get out there and hand out some beer money to the public in an election year.Quote:
Originally Posted by rideit
You actually thik Georgie came up wth those ideas, up late at night with a mug of tea?
No, but he signed off on them, and sent Paulson out to implement. He's been out there a few times this week being interviewed and speaking on the subject, too. He's trying to prop things up so that the economy is somewhat functioning come 11/3 when McCain may carry his flag.
You are correct. Except the middle class, and even the upper middle class, are getting poorer, too.Quote:
Originally Posted by enlosandes
That is what even a "low" rate of inflation does to us over time: makes the rich richer and the middle and lower classes poorer. Here's how it works:
If you are from the upper middle class on down, you earn income primarily from your salary. (Or, in the case of the poor and retired, from govenment payments.) They amount to the same thing: a fixed payment to you every week or two. The value of this fixed payment is reduced, and destroyed over time, by inflation.
Even using the official inflation numbers (which are dramatically understated since about 1996), a professional who earned $40,000/year in 1980, and earns $100,000/year now after a long, successful career, actually earns the same amount of real money she earned in 1980.
The rich, by contrast, earn money primarily through the transfer and sale of assets. They buy and sell commercial and residential property, food, metals, oil, stocks, bonds, companies that produce them, and all sorts of complicated financial instruments tying them together. The value of these assets increases with inflation, because that is what inflation is: an increase in asset prices. (This increase is not the *cause* of inflation: we'll get to that later.)
Therefore, we can see how a controlled amount of inflation makes the rich richer and everyone else poorer: it constantly decreases the value of salaries, while the value of assets stays constant.
But how can the rich make sure that there is always inflation? Stay tuned for the next installment of "Understanding the Money Supply".
Expect the opposite. Towns, cities, and states have come to depend on the extra money they've received from inflated valuations during the real estate bubble. Now that these values are decreasing towards more normal, sustainable levels, local governments everywhere are in huge fiscal trouble.Quote:
Originally Posted by gravitylover
When's the last time a local government in trouble cut spending instead of raising taxes?
That's not a verbage. That's an adage.Quote:
Originally Posted by enlosandes
Quote:
Originally Posted by Spats
Well, right now, in my lovely state of New Jersey, the Governor is actually trying to do this on a massive scale, and shock the voters out of their complacency. It's pretty fucking unreal how obligated the state and local governments are for present and future pension and health benefits for it's past and present employees. Buffett even boo-hood this situation in his annual address last week. But, it's what you'd expect from a state government that allows it's legislators to hold three or more "jobs", all paid for by you and me.
And, Spats, that above explanation about stagnant wages vs. buying and selling things was explained to me at a fairly young age. Why, Oh why, didn't I listen and jump on it sooner is beyond my lazy ass. "You don't make money by working for it." duh.
Is there a short explanation why inflation is underestimated?Quote:
Originally Posted by Spats
The cost of almost everything a consumer buys in life has gone up quite a lot in the past 9-12 months, but the CPI is what, 2.1% or something like that?
I'm sure Wikipedia or some similar tool has some useful more detailed insights. But the super short version is that the numbers are computed based on weightings - how much are rents vs how much are house prices? And what percent of a person's expenses do these things reflect? What percent of the average consumer's expenses are energy costs? To the extent the formulas reflect an average "reality", then the numbers are meaningful and "accurate". Etc. OTOH, if something is under-weighted but rising rapidly in price, "real" inflation will be understated. Sound familiar?Quote:
Originally Posted by Nobody Famous
And then there's that wonderful "hedonic adjustment" introduced during the Clinton era (I actually think he was a great pres, but this definitely bends the numbers). The notion is simple - even if the price of something goes up, it hasn't really gone up if you are getting more for your money. So even if the average car costs more - that does not show as inflation if you are getting more on average - say AC standard or traction control standard or a nav system...
If you are not already familiar with the issue - google various combinations of "auction(s)", "failed", "bond(s)". It is a great mother of a storm brewing...Quote:
Originally Posted by Spats
Truer words have never been spoken.Quote:
Originally Posted by spindrift
Greenspan.
That is all.
In ten years the Greenspan/Bernake relationship will be similar to Bush Sr. and Bush Jr..
You are being too kind to Greenspan. Way too kind. And Bernanke, well - maybe GWB will throw his trained monkey a few bananas to make him feel better. Note the warning on the famous Ben doll ad. Never more timely.Quote:
Originally Posted by Benny Profane
http://www.businessweek.com/the_thre...helicopter.jpg
I can only imagine the whining and finger pointing if Greenspan DIDN'T lower interest rates. Like, where was everybody the past 8 years when all this absurd housing inflation was going on? Why weren't they complaining then? Nope, they were off cashing in the equity and traveling off to Chile for a nice little summer ski fling.
And I can only imagine the whining and finger pointing times ten that will happen because he did...Quote:
Originally Posted by Benny Profane
Sorry! You've got the process all wrong... Your local government does NOT collect your property taxes based on the assessment each year, quite the reverse... they set the tax rate based on assessed values each year.Quote:
Originally Posted by gravitylover
The process varies by State of course, but in general the first step is each department (police/fire/library/etc) in the municipality (city/village/town/etc) sets a budget based on the services they provide. For example, if the police department budget was $11 million last year, it might be $11.5 million this year to account for expenses (raises/increase cost of gas/etc)... Then the total for all those departments is added up to get to the entire municipal budget amount.
That full budget amount will be raised each year by taxing each property it's proportionate share of the total valuation of the community. Even assuming the assessments were changed to market value each year (often they are not), it won't matter if the communities average appreciation is +20% or -20% in a year... they will raise or lower the mill rate (tax percentage in dollars per thousand) each year to match what their budget needs are. So even if values fell by 50%; the mill rate would be raised by 100%, you'd pay the same total property tax amount and they'd collect the same full budget amount needed. Edit: Note this also works the other way; if somehow total assessment value doubled in a year... the mill rate would be cut in half to raise that same budgeted total.
The only times your property taxes are likely to go down are when the values for the rest of the community go up in relation to your home (Their new assessment is +20% but yours only goes up +10%), or when for some reason the municipality decides to lower the budget amount (don't hold your breath). Again, not because property values have fallen, but because say... they've just bought 5 new fire trucks over the last 5 years and won't be buying another new one this year. I suppose you could lower your assessed value in relation to your neighbors homes and have your property taxes go down by tearing down half your house, but no one seems to use that approach? :D
What else is new. :confused:Quote:
Originally Posted by timvwcom
I just know that as long as it keeps going the way it's going and our property/school taxes keep taking a larger percentage of our income along with all the other costs of living rising the way they are our quality of life is really beginning to suffer.
are there any mag realtors in ogden? or does anyone know one you would recommend? i'm looking at houses in the area and its pretty rough going alone.
You've got a PM.Quote:
Originally Posted by kokomas
Yes indeed, investing in the future earning potential of the people who will be writing your social security checks is the root of all suffering! Yup. No doubt about it...Quote:
Originally Posted by gravitylover
I'm pretty disgusted with lots of things about schools these days - but I think you have the basic model backwards. The bigger reason "your" quality of life is about to suffer is because some dimwit regime slashed taxes while hiking expenses & relied on others - notably China - to extend credit. And encouraged similar individual consumer behavior - with, once again, predictable results. And facilitated that by goosing consumer spending with artificially free-flowing capital turning houses into ATMs. All of which made things worse.
One inevitable (well, very likely) result of this is that prices go up while wages stagnate and the global buying power of dollar denominated savings accounts shrivels. Oh yeah - not only that, but given the resulting situation in bond world, expect your municipality (etc) to need to snag a ton more money just to cover increased interest payments...
So why not try getting annoyed at the bogus "lees government, less taxes" crowd who can't do grade school arithmetic and then cry "mommy" every time the economic winds are not blowing their way...
Heh. That's a good one.Quote:
Originally Posted by spindrift
Don't worry too much about your SS. You'll be getting it, although maybe a little later than 62 or 65. I'd worry a whole lot more about Medicare. We're pretty much fucked on that one. So, stay in shape, eat better, save your money in the IRA or 401K.
Hillary in a speech today says the prez should form "an emergency working group on foreclosures" ... and should be led by ... experts such as Robert Rubin, ... and former Federal Reserve chairmen Alan Greenspan and Paul Volcker.
Comments? I'll start with the obvious, some of these guys were in the drivers seat, at the Fed most recently, when the makings of this mess were in their infancy.
She's campaigning. She's pandering to the people who lost or will lose their houses. She'll say anything at this time to get nominated. Doesn't matter, by next January, and, well, probably April or May, when and if the new president can get their policy train rolling, we'll be one more year deeper into this mess.