patrick.net

While neither concept is one I feel should be supported, I find it a sad state of this country that more people would rather spend their money to blow someone up than to help their neighbor.

That is just being human.

DennisN,

Thanks for the link. I think Len Burman of the Tax Policy Center said it best when he noted that policy is ALREADY biased towards housing!

FuzzyMath Says:

> There certainly is not a 20 to 1 ratio
> disapproving welfare… especially in SF.

It depends on how you ask the question…

If I ask “Do you think that we should allow able bodied people to sit around living rent free doing nothing other than buying liquor and drugs with the money and food stamps we give them?”

You will probably get 20 to 1 saying no (even in SF).

If I ask “Do you think we should have a system in place to help people down on their luck to they have food to feed their children and a place to stay while they get things together?”

You will probably get 20 to 1 saying yes (even in a GOP County in TX).

In reality most of the people on welfare are horrible drug addicted people that breed more welfare recipients when they are not on drugs or shooting each other.

Since Welfare is a racket where people make Billions of dollars a year (and pay of the politicians in both cash and votes) we will probably just see the number of people on welfare increase.

P.S. I just re-read one of my favorite short books on line “War is a Racket”:
http://www.ratical.org/ratville/CAH/warisaracket.html

I guess builders are longing for the good old days of multiple bids, breaking buyer's agreements and employing illegals at everyone else's expense?

HARM, if banks are not bailed out, a deflationary depression may occur.

And why is "deflation" such a bad thing, when it raises, not lowers the purchasing power of my cash? As Randy H pointed out on the last thread, a "Depression" is primarily a political --not economic-- term for a deflationary recession. We're not going to avoid job losses in this recession --especially in housing, finance and retail-- so why does this unavoidable and necessary recession "have" to be an inflationary one*?

(*Note: I already know the answer to this question, but I'm rhetorically asking it anyway.)

And why is “deflation” such a bad thing, when it raises, not lowers the purchasing power of my cash?

Fine. When it comes, just don't hope for another FDR to confiscate gold and create the next Mega Welfare Deal.

A recession is unavoidable, but a depression can be, and should be, averted.

RE welfare:

Public spending on Corporate and Bankster welfare in its many forms, including direct subsidies (Medicare, prescription drugs, oil, gas, corn ethanol, sugar, milk, military boondoggles, bridges to nowhere, etc.), "special" industry-targeted tax breaks (REIC), and taxpayer risk underwriting (GSEs, FHA, HUD, Sallie Mae, etc.), so far outweighs "welfare" spending on individuals & families that it's not even a close race.

Why bother fighting against what the powers want to do?

Just ride along and profit from it, get into commodities, let them trash the dollar and bail everyone out. Because if they are going through with such a large scale bailout, we will be seeing $500 oil and $10,000 gold, and I won't mind that.

In fact, this is the best ending. Because when we get to $500 oil, housing value is bound to crash hard. Salary growth always lags that of the necessity commodities, so if you have to allocate 1/2 of your income to food due to $500 oil, you will have no money left for mortgage. One can keep renting, or double up on space, or even move in with parents, but one HAS TO EAT, HAS TO DRIVE TO WORK.

Then all the bears on the site can easily turn around and buy a house with cash, oh, I mean, merely a few barrels of oil or a few ounces of gold.

Just ride along and profit from it, get into commodities, let them trash the dollar and bail everyone out. Because if they are going through with such a large scale bailout, we will be seeing $500 oil and $10,000 gold, and I won’t mind that.

Exactly. Gold is making another record high today.

@Peter P,

I don't want to see unemployment hit 35% either (though according to HelloKitty, it already has ;-) ), but I'm sick and tired of this "inflate or die" mentality that has gripped the PTB. Our Dear Leaders seem to think a little deflation, coupled with some fiscal responsibility would be this huge CALAMITY we must *avoid at all costs*. Ridiculous.

Oh, and welcome back, Randy H. I am volunteering my place for the next blog event, if the East Bay isn't too far for most people.

Our Dear Leaders seem to think a little deflation, coupled with some fiscal responsibility would be this huge CALAMITY we must *avoid at all costs*.

I am pretty sure they cannot stop the decline of real asset prices. However, I believe they are working to ensure the stability of the financial system, which is essential to even the most bearish bear.

I say F**k our current "financial system", which primarily exists to serve the top 2% at the expense of practically everyone else. It's not the least bit "essential" to me. If we had to go back to a gold & barter-based economy for a while (until a better financial system gets built), that'd be fine by me. People with real skills --who know how to actually make and fix things-- would be in high demand. People who only know how to create "innovative" debt products, peddle influence, shuffle paper, and transfer wealth from other people to themselves would be screwed.

Works for me.

Well said HARM.

I wish it would turn out like that. But in reality, the mobs of people that don't have any real skills will just end up rioting and resorting to violence.

@FuzzyMath,

True. There's that old saw again: "If you're going to do something stupid, do it with large numbers of other people." Everything counts in large amounts*.

(*Apologies to Depeche Mode)

Really THAT is what concerns me if the sh%t really goes down. A reckoning of sorts is sorely needed, and in many ways could be a good thing. But the paper peddlers would not sit idly by in a new world I fear. The same angst and greed that got us here in the first place would get funneled into some other evil endeavor.

My concern comes with the sheer numbers of people that appear to be of that vein. The mob mentality can be a scary thing.

With that said, it might be better to avoid such a reckoning, and let it happen naturally as the Boomers retire.

I would like to keep our current financial system, thank you; although, I would not be against siccing some regulators on the banksters.
I noted that the newscasters, when talking about the Ohio debate, mentioned that the housing crisis was not talked about by either candidate. Maybe some progress is being made.

Great quote over at CR, apropos to our "financial system" discussion:

Tom Stone writes:
"Never Before Have so Few Lost so Much For So Many."

Several Nov 08 CME San Francisco Housing Futures traded hands a couple of days ago at 166.00. As of Dec. 07 the SF Index stood at 189.23. By my calculations this is predicting a mindbending 1.11% decrease per month! Try yelling that at an open house. I suppose a creative agent could use this figure to "unstick" a relucatant seller.

Can you imagine the press coverage of the altercations breaking out between the left-wing bicycle nuts and the anti-mortgage-bailout guys?

Wait, what side would I be on? I'm both: a left-wing bicycle nut and an anti-mortgage bailout guy!

@Patrick,

You could argue with yourself, I suppose.

I thought when I wrote it of that scene in Life of Brian where the two direct-action groups slugged it out over who would get to kidnap Pilate's wife.

"We get to tie up SF traffic!"

"No, we thought of it first!" :)

I am against physical protects because they are economically disruptive.

We should "protest" by investing in commodities.

Not investment advice.

Administrator Says:
February 28th, 2008 at 1:18 pm
"Can you imagine the press coverage of the altercations breaking out between the left-wing bicycle nuts and the anti-mortgage-bailout guys?

Wait, what side would I be on? I’m both: a left-wing bicycle nut and an anti-mortgage bailout guy!"

Then just start randomly punching whoever is closest to you.

"go back to a gold & barter-based system"

I keep telling you HARM, m-o--v-e... to Oregon! :)

Why I'm proud to say it's never been out of fashion here?

I DO share your frustration. Everyone on my end of the industry is as fed-up and then some. Virtually every research firm on the street (along with the mutual fund co's) were strongly advocating muni bonds for '08. With the implosion at the insurers, people that followed that advice are already down 15-20%, and we've only started the year!

This could be the last straw for a lot of guys in the bank/wire-house distribution channel. I won't say I'm *not down b/c I'm such a "visionary" or any think of the like. (I just refuse to buy muni's!) Yet I feel for the rep's and their clients that did.

The real problem is that ETF's are making advances on at least a weekly basis and muni's.... OTOH, haven't changed since the Civil War. Good luck w/ that guys!

I'm thinking Sweden looks like a nice place. I'm watching a show about it. They were showing Volvo crash tests and I got the impression that they genuinely care about safety. An American car company has to have standards forced upon it. I'm starting to think that I really don't like this country.
They haven't had a war in 200 years.

Sweden is indeed a nice place. Volvo saved my life.

Volvo is now owned by Ford

Volvo is now owned by Ford

My last Volvo was pre-Ford.

It is sad that cars are made so light nowadays. I want a non-luxury 2-ton RWD sedan and there are not that many on the market. :(

The cops all buy those Crown Victoria sedans. That's a non-luxury 2 ton RWD sedan.

"HARM, if banks are not bailed out, a deflationary depression may occur."

This is so much nonsense. Even in the current corrupt system, its is possible to prevent a depression AND to allow banks to fail.

The proper policy would be, ()
(1) Allow the corrupt banks to fail. Bailout only the depositors to FDIC limit.
(2)Nationalize the banks (stockholders and stock-owning execs get zilch), if needed ONLY FOR continuity. But preferable would be (3) below
(3) Grant charters and provide liquidity for new banks to come into being. I'm sure that Buffet would be glad, or many like him. In the very least the surviving banks should be allowed to expand rapidly, and provided liquidity by the Fed.

This "if banks are not bailed out, a deflationary depression may occur" is exactly like going to threat level red by the TSA before elections. It is a ruse to make you stop thinking and make decisions based in fear.

The cops all buy those Crown Victoria sedans. That’s a non-luxury 2 ton RWD sedan.

You're right. :)

I prefer the style of a Grand Marquis though. Convincing my wife to let me get one is another issue.

The 2008 Taurus comes in at close to 2 ton. It has more power and has AWD. Perhaps I will take a look later.

cranker,

Well said. I for one think the gap left by these clowns would be filled in a minute. That's part of the problem. Unless we change the way the people view banks, it'll just be more of the same. I've openly asked why we need 30 year (let alone 40 or 50! yr. mortgages) Why... of ALL the english speaking countries is our relationship w/ lenders is the most abusive?

E'f 'em.

Hey folks,
I need some help. Does anybody know which banks/financial institutions are most or least affected by subprime mess? Please give a rating from 0 to 10. 10 being worst affected and 0 being no impact.

I tried to find it out, but I couldnt. It seems to be a top secret maintained by FDIC.

HARM Says:

February 28th, 2008 at 11:20 am
I say F**k our current “financial system”, which primarily exists to serve the top 2% at the expense of practically everyone else. It’s not the least bit “essential” to me. If we had to go back to a gold & barter-based economy for a while (until a better financial system gets built), that’d be fine by me. People with real skills –who know how to actually make and fix things– would be in high demand. People who only know how to create “innovative” debt products, peddle influence, shuffle paper, and transfer wealth from other people to themselves would be screwed.

Works for me.
-------------

You should study the end of the Black Plague in Europe. The big winners were the skilled laborers that survived. They squatted on lands that was not theirs and tilled away making large profits. The elite upper class had no skills and were starving to death. Later, they figured out they could pay mercs (lord-less knights) to put the laborers to the sword until they became surfs again....the little guys never win.

DinOR:
"...I for one think the gap left by these clowns would be filled in a minute. .."

Exactly, provided the Fed gave the necessary support for it.

The same kind of fear and irrational thinking goes on about the monolines like AMBAC and MBIA et al. If those rackets collapse, a lot of reckless fools and institutions will lose, nothing will happen to muni insurance. Capable institutions with enough funds (as Buffet amply demonstrated) will step in to fill the void.

Bailing out the banks is the lesser evil only for the richest 0.2%

I say letting the richest 0.2% eat their losses is the lesser evil.

If I ask “Do you think that we should allow able bodied people to sit around living rent free doing nothing other than buying liquor and drugs with the money and food stamps we give them?”

You will probably get 20 to 1 saying no (even in SF).
------------

Ghetto welfare is a bribe paid to the angry and violent underclass to keep them from kicking your ass and taking your sh!t. Does not work all the time but for most intents and pruposes it does ok. Section 8 has taught generations that they don't have to pay to live somewhere. Take Sect 8 away and you will observe a huge loss of equity from multi-family bldgs. Land lords will not be able to get the inhabitants to pay market rate rents, bec they have not had too in decades. The LL's will just fold up their tents and say good by to their equity. Same with food stamps. Recipitents will eat one way or and other. You will pay one way or another in blood, tears, or dollars. Which do you have more to lose?

Sweden and Canada are on my short list for where to go when all hell breaks out! I have ancestry from both (1/2 Swedish) plus I understand you can buy your way into Canada.

Australia is a good place too.