I think shits getting better. (economy)

[TahoeJ]

You're right - I got my dates wrong.

errrr TahoeJ deary - shit hit the fan back in March of '08 (perhaps earlier, depending on your def, the spigot shutoff early in that year) - and shit collapsed in the fall of '08.

[liv2ski]

^^^^^Pfffft, don't sweat it. 9 out of 10 douches think Hughes a Douche

[SkiCougar]

its not getting better.

"Eurozone Services and Composite PMI Back in Contraction; Italy, Spain, France at New Lows"

Nations ranked by business activity (February)

•Ireland 53.3 12-month high
•Germany 52.8 2-month low
•France 50.0 3-month low
•Italy 44.1 4-month low
•Spain 41.9 3-month low

(if its less than 50, it means the economy is contracting or slowing)

http://globaleconomicanalysis.blogsp...ntraction.html

and china just slowed their growth expectations monday. all this stuff is just going to drag the US down with them.

[Hugh Conway]

all this stuff is just going to drag the US down with them.

ding ding ding

[ass-to-mouth]

Amex increased my blue card limit from $9500 to $12500.

Now if they'll just do something about that annoying 19.99% APR.

[liv2ski]

In CA things are not getting better. I work in residential lending. Normally, when the economy gets weak, the fed lowers rates a bit (I remember when they were 14% and dropped to 11%) and us lender doods do well, while the economy gradually comes back over a 12-18 month period.
I guess over my 28 year career they have played this game once to often, as even with rates at 3% on a 15 year loan, we just are not very busy. Look at the new home sales that came out a few days ago (touted as a big increase) and we are 250k units short of the 600k units sold in a normal economy over the last 50 years. O and that doesn't factor in the increase in population, so normal should be about 700-800k units sold.
Problem is the price. In the past, mark to market rules had forced banks to liquidate their REOs which rebalanced prices at a level closer to 3X annual income and off we went again. Well not this time. The FED told the banks they would suspend the mark to market rules indefinitely, as the banks would have been pretty much bankrupt in 2008.
So the FED and the banks are trying to keep the RE bubble as inflated as possible and not letting market forces take housing down to a healthy level (based on today's lower incomes).
As long as housing languishes, the economy will have a huge weight tied to it's leg to prevent it from getting running again.
The real game changer compared to the past is our ever expanding deficits and the debt to GDP issues around the world, but most talked about in Europe recently and the counter party risk we are all exposed to that could eventually cause a 1932 economy all over again.
This is really the scariest time I can remember, in my 30+ years of being an adult and we have done this to ourselves.
I am walking the dogs down to the beach to see if there is any surf to be had.

[OldLarry]

In CA things are not getting better. I work in residential lending. Normally, when the economy gets weak, the fed lowers rates a bit (I remember when they were 14% and dropped to 11%) and us lender doods do well, while the economy gradually comes back over a 12-18 month period.
I guess over my 28 year career they have played this game once to often, as even with rates at 3% on a 15 year loan, we just are not very busy. Look at the new home sales that came out a few days ago (touted as a big increase) and we are 250k units short of the 600k units sold in a normal economy over the last 50 years. O and that doesn't factor in the increase in population, so normal should be about 700-800k units sold.
Problem is the price. In the past, mark to market rules had forced banks to liquidate their REOs which rebalanced prices at a level closer to 3X annual income and off we went again. Well not this time. The FED told the banks they would suspend the mark to market rules indefinitely, as the banks would have been pretty much bankrupt in 2008.
So the FED and the banks are trying to keep the RE bubble as inflated as possible and not letting market forces take housing down to a healthy level (based on today's lower incomes).
As long as housing languishes, the economy will have a huge weight tied to it's leg to prevent it from getting running again.
The real game changer compared to the past is our ever expanding deficits and the debt to GDP issues around the world, but most talked about in Europe recently and the counter party risk we are all exposed to that could eventually cause a 1932 economy all over again.
This is really the scariest time I can remember, in my 30+ years of being an adult and we have done this to ourselves.
I am walking the dogs down to the beach to see if there is any surf to be had.

Looooong story short: people are freaked the fuck out on a million levels. Nobody knows whether to shit or go sailing. Bad stuff- markets are like sharks- they need to keep moving fwd to wash oxygen over their gills. Or something. I'm out of analogies. It's THAT bad.

[char]

Shopped for houses awhile back. Some deals to be had certainly, but alot of over priced ticky tacky crap in bad locations.


Loan rates a fantastic if you know you are going to stay in one place.

[Benny Profane]

Yeah, well, I don't see no end of the world clearance sale pricing in the ski condo market yet.

[OldLarry]

Still just a bizarre amount of inventory on the mkt in our area. Growing up in NJ I don;t ever remember seeing a for sale sign on my road.

Not sure where all these people are going-

[Benny Profane]

Still just a bizarre amount of inventory on the mkt in our area. Growing up in NJ I don;t ever remember seeing a for sale sign on my road.

Not sure where all these people are going-

There's probably at least a few million Boomer owned homes in NY metro that are now empty nests, and all they want to do is get out from taking care of a 5/4 on a half acre with property taxes approaching an average American's income.

[SkiCougar]

There's probably at least a few million Boomer owned homes in NY metro that are now empty nests, and all they want to do is get out from taking care of a 5/4 on a half acre with property taxes approaching an average American's income.

absolutely, thats another drag.

the boomers downsizing is going to keep new housing down, which is the biggest boom to economies.

also, i was reading today that house rentals are going to get worse as more foreclosures are dumped on the market and more people havent had raises in forever, or are even still getting cuts or laid off; this will make the housing market even worse.

we're still 3 years away from a real recovery and europe is going to drag the US thru another recession before we get there.

shit is not getting better.

[ass-to-mouth]

superblurredtacochronicles is buying a house. shit must really be getting better.

[OldLarry]

I usually insist on on a condom but then I thought, "when am I going to have the chance to bang a crack whore again?"

http://online.wsj.com/article/SB1000...115674034.html

[Benny Profane]

I usually insist on on a condom but then I thought, "when am I going to have the chance to bang a crack whore again?"

http://online.wsj.com/article/SB1000...115674034.html

I swear, if I find out my pension fund or some fund I own has bought that shit, I'm buying an AK47 and going late night Batman on some fucker. Will this never end?

[powder11]

I usually insist on on a condom but then I thought, "when am I going to have the chance to bang a crack whore again?"

http://online.wsj.com/article/SB1000...115674034.html

shit has to be a joke, right?

[Benny Profane]

shit has to be a joke, right?

Actually, far from it. The large part of the housing market right now is lower end homes being bought up in quantity by cash investors. Phoenix is the epicenter of this. Warren Buffet has said more than once that he would love to do it, but doesn't know how to profitably swing the maintenance. He's right, and these guys know it too. The only way they'll make money when hiring managers is rapid price appreciation, which ain't gonna happen. So, they bundle it up, slice it into tranches, and gear up the sales force to hunt for muppets starving for AAA returns. This is what happens when nobody goes to jail for this crap.

[liv2ski]

I usually insist on on a condom but then I thought, "when am I going to have the chance to bang a crack whore again?"

http://online.wsj.com/article/SB1000...115674034.html

Shit, I can't read the article to get to Larry's quote.

[liv2ski]

So, they bundle it up, slice it into tranches, and gear up the sales force to hunt for muppets starving for AAA returns. This is what happens when nobody goes to jail for this crap.

True dat Benny. Another day, another scam to shear the sheeple.

[Benny Profane]

True dat Benny. Another day, another scam to shear the sheeple.

This is what happens in a zero interest rate world. We're all desperate for return. Bring on deflation, I say.

[iscariot]

This is what happens in a zero interest rate world. We're all desperate for return. Bring on deflation, I say.

Agreed.

I think deflation is inescapable...for the reasons (quoted below) I posted long ago when I used to post in Polyasshat.

If this is too political for the padded room, let me know and I'll delete it.

Much of the beginning of the interview is what I've been telling my friends, specifically the part about the last boom being created with borrowed money, and therefore not a real or sustainable boom. There was no real growth, only fake growth on borrowed money. When you reach the end of the credit line, you reach the end of the boom, and you also reach the beginning of high interest, to pay back the debt for living above your means. This further stalls the economy. The real and base problem is that the capitalist economic system is based on unending growth and consumption. This is a flawed foundation. It is doomed to eventually fail; any system based on unending growth on an inescapable planet with finite resources is…

I found this advice on a website and kept it, although I've lost the original source, so you'll have to forgive me for not citing it properly.



This is why you can't solve problems solely through the government cutting taxes and slashing spending. This defers the social problems to your children and your children's children (if they can afford to have children), and they will pay with less safety in daily life as crime, poverty, sickness, and death increase without reasonable safety-nets.


The baby boomers have manipulated the western world (and the world in general) to serve their own needs, and have basically told everyone else to fuck off. They generally inherited money from their parents, destroyed the environment, reduced their taxes to historic lows, and borrowed to maintain a standard of living from the early 1960's, that was unsustainable in reality, and generally based on nostalgia. Eventually they came to control the system and further tipped the scales to their own advantage, all the while shouting like infants that they’d earned it, and that their children, future generations, and everyone not exactly like them needed to fend for themselves. When they could no longer generate wealth from nothing, the boomers began preying not only on their children, but on each other. We have seen this in the last meltdown and will see it again.

As the boomers age, they will pull their money out of investments to pay for their living expenses. As they do this, investments will collapse as money cascades out of the stock market, as no boomer wants to be the last one out, left holding the bag of worthless stock. The only one buying will be large corporations and the very rich; a massive consolidation of wealth and power. Unfortunately, in an economic system based on unending growth of consumption, and the boomers consuming less as they reach fixed incomes (or worse start losing in investments), there will be fewer boomers and people in general that can afford to consume. Companies will fall, causing further wealth and power consolidation.

As the boomers retire, but still require services, they will have to pay more for those services they need, as there are less people to perform them. The price of services will rise, as the demand increases and the supply dwindles. This may be the final and ironic twist of justice for the boomers as they age...the "die broke" generation who inherited from their parents and plan to leave nothing to their children, the grey wave that have prayed on the next generation destroyed the environment and the economy, all the while claiming they’ve worked hard and earned it, will pass money onto the next generation through ever increasing costs for services. The generation servicing the boomers will spend much of this increased income on paying the higher taxes necessary to provide for the grey wave and increasing inflation as income increases, and not on consumer trinkets.

The only solution is to open the floodgates to immigrants and reset the playing field, although this will also only kick the can down the road if nothing changes as far as government spending, social programs, and taxes. Countries need social programs, or this pattern will repeat itself; government spending must be cut. Health and education are NOT the places to do it. The war machine and subsides to corporation must go; taxes must be increased on everyone, including the wealthy and the necessary flood of new immigrants. That is how you catch up and eventually fix the situation, while avoiding a messy revolution.

Unfortunately, most of the boomers are xenophobic, even though many have families that arrived here in just the last century or so, and they fear anyone not exactly like themselves. Think of it as the “never trust anyone over 30” mentality that the boomers had in the 60’s. What they were really saying was “never trust anyone who isn’t exactly like us.” It is evident in their selfish warmongering and theft. And so the flood gates of immigration will remain closed and the bulk of the boomers and middle class will turn into the poor and destitute class; the current people to which the boomers extend no sympathy. As the "lower my taxes" generation, that hasn't actually paid enough tax to take care of itself, will provide no further taxes, this burden will also be passed onto their children and future generations.

The aging population will have to accept that they have a choice,…share the burden by opening the gates to immigration, pay higher and new taxes, and fix the economic situation while being able to afford services they need,…or pay an increasingly unaffordable rate for services they need, supplied by their children’s generation and in doing so pass an “inheritance” to their children in that way. Either way, in order to survive the boomers will have to do the very thing they fear the most, they will have become accountable for their collective actions, they will have to share the wealth that they themselves have not earned or created, but only borrowed and stolen from previous and future generations. The boomers are the first generation in centuries that will not pass a higher standard of living onto their children; the boomers have earned little, and taken more than their share.

Additionally, if you think the housing market is depressed now, wait til the boomers, who own a primary property plus several rental properties or "vacation" properties, either need to sell to fund their retirement, just want to downsize, can't deal physically/mentally with renting and associated upkeep/tasks for their rental/vacation properties. There will be a glut of houses on the market with no one to purchase them for a decent price. Supply will be much greater than demand, and the boomers will realize the need to get out of their properties before they lose massive amounts of money on them. The cascade of housing sales will make the current housing bust look like a minor dip.


Again, the answer is that they need to open the immigration gates to maintain both their house prices and keep relatively cheap labour for the services they need. The alternative, keeping the immigrants out, will result in many that won't be able to sell, because they can't afford the loss. In the latter case you will likely have the empty homes going to relatives or some such, but empty homes in deserted neighbourhoods are fodder for crime and further general degradation of suburbs.


There are examples like this all over the economy...vehicles as the boomers age and are no longer legal to dive; furniture as estates are sold off and people downsize; jewellery as people sell to retire, get sick or go into homes, and die off; use of oil products will reduce in North America, as boomers stop driving, and as people can move closer to cities from the suburbs, given housing for less expense with a glut of houses on the market; etc etc etc...


We will have more trinkets than we know what to do with, which will be worth very little, while the cost of labour and services will increase dramatically. If the boomers were smart, and not so xenophobic, they could avoid this and maybe even manage to save the economy and the environment in the process, but I'm not holding my breath. I suspect many will go clutching their money, until you pry it from their cold, dead hands.


One of the only safe investments will be in drug and bio-tech companies as, in addition to services, that's where all of the boomers money will be going, while they desperately try to extend their lives and health until the money runs out. The trick is to get out of drug companies before the boomers die off, and the demand for drugs dies with them. The upside is that by the time the following generations are in need of bio-tech and medications for old age, the experimenting/testing/guinea-pigging will have been done on the boomers, and we will likely have good treatments for relatively cheap.

[powder11]

I've said this before... the next big thing is nursing homes, geratol, depends, funeral homes and cemetary plots.

[Benny Profane]

You see, you have to understand one thing. It isn't generational, although, if you're in your twenties or early thirties, it may be hard to swallow that one. The Boomers, in a way, are more fucked by all this than their kids. Contrary to popular myth, they have no money. Most of their "forced savings" was put into the no fail never go down in value house, and then they got talked into what, you have to admit, was a pretty good deal, that they extract equity from said house to pay for a good life. And, a very very good life it was. Look around any major ski mountain in the country, and you see the equity of suburban homes in the form of luxury townhouses, ski in, ski out. But, they didn't save anything otherwise, even if their employer had an incredibly easy to contribute to 401k or IRA (in the eighties), and spent like drunken sailors in a whorehouse. If they had any money, why are their kids in hock for college to the tune of 25 grand, average? They couldn't even save for that. They thought the house would pay for everything, I guess. Now, they're fucked. At least the kids will deal and figure it out. Don't worry, all that "debt handed down to the grandchildren" is bullshit. It will be forgiven, one way or another, mainly, because it simply can't be paid. People in power, like the San Bernardino city council, will just throw up their arms and say, sorry, that's it. Game over. So, who gets fucked then? The retiree, because he/she is the most expensive and without any power, at the same time. We are going to have a LOT of very poor old people in this country very soon (five to ten years). It's going to be the major campaign issue in 2020 and beyond. That is, if we still have a democracy by then.

[iceman]

Jesus Benny mix in a paragraph break and a linefeed now and then.

[liv2ski]

^^^Thanks, that was a good laugh.