patrick.net

OurBroker says

What we have today was made possible by the failure to regulate.

The regulators were encouraging people to take out variable interest loans, non-amortizing loans, lending money to unworthy borrowers, etc. etc.. It's a farce to argue now that they did not have enough regulatory power or did not use their regulatory power: they used what they had to carry out mission in the exactly wrong direction!

That's the nature of bureaucratic management of the economy: while entreprenuers playing with their own money have the incentives to play contrarian to the market sentiment thanks to the rich rewards if they are later proven right, the bureaucrats' incentives are exactly the opposite: they lose nothing for being trend followers in a mania, and would have eggs on their faces if they take a contrarian position regardless whether their prediction is right or wrong. Greenspan's "irrational exhuberence" comment in late 1996 just before the dot-com bubble and immediate excoriation by the Congressional hearing proved the point in spades.

Regulations do not mitigate bubbles and manias; they exacerbate the bubbles and manias.

gromitmpl says

"Though the "Solid South" had been a longtime Democratic Party stronghold due to the Democratic Party's defense of slavery prior to the American Civil War and segregation for a century thereafter,"

The point is, and believe me, Bob knows, there were a lot of racists in the democratic south. These people who used to be conservative southern democrats have all been absorbed by the republican party.

This is not disputed by anyone.

I'm not trying to say that there isn't a single racist democrat. But the racist segregationist southern democrats are all now republicans. Fact.

The interesting thing is that you seem to look back fondly and with pride to a time when the republican party was progressive (or more liberal ?). Wouldn't that mean that maybe you should consider switching your allegiance.

The reason for toxic loans -- interest-only financing, option ARMs, no-doc loan applications -- was to create the feedstock necessary to build mortgage-backed securities which yielded huge profits on Wall Street.

The reality is that toxic loans were not made by community banks, credit unions or most S&Ls. Some larger banks also refused to make them -- BB&T, Hudson City Bancorp, etc.

The public has no direct contact with the Federal Reserve, the OCC, etc. The public -- in the form of borrowers -- has no voice in Washington. Don't believe it? Name the largest borrower association in Washington? Name the largest borrower PAC?

OurBroker says

Marcus --

Where did you get the graphic?

Thanks.

I made it, a while back, right after the whole debt ceiling fiasco, although I didn't invent the meme (the most whatever man in the world). It's been widely used for other humor (I don't always ..............., but when I do.................)

I tried to put it on Reddit, but it just faded rather than becoming popular. I thought it would be my 10 seconds of fame on reddit, but maybe later.

http://imgur.com/SqGqC

Marcus --

The graphic is great. May I use it? Is it in the public domain?

Thanks

Government spending can largely be seen as a form of a bribe or a way to pacify people for a given period of time.

Bismark created programs because he was afraid of communist revolution. The USA had a red scare in the 20's and 50's but they had them constantly

The Russian revolution of 1905 replaced the absolute monarchy with a constitutional one and created the Duma. For the hard left it wasn't enough so they banded with others in 1917 and overthrew the czar putting in a weak provisional government. A massive battle in ww 1 caused around 90k deaths which lenin then overthrew the provisional govenrment. lenin overthrowing the czar alone is one of the greatests myths of human history.

In the 70's Iranian shah Reza Pavlavi tried the "white revolution" which tried to assist the poor. It failed. He was removed and after two years of anarchy the islamic government was put into place..which ironically funds even more government spending to the point where few people can start up their own businesses.

Few people that advocate for more spending have ever said specifically how much is enough. The ills of society are not totally removed with more spending. Europe still has unemployment, significant crime, protests and even riots. What can be advocated as a safety net can create a system of dependency.

srschrs says

Even here in the US we have an insane immigration policy. Does anyone believe this can really be sustained? No, this is how countries are destroyed. We are importing jobless people and paying for their medical and education at a time when no jobs are being created thanks in part to an over regulated gov't.

Even more government regulation and enforcement on people's voluntary movement and exchange wouldn't help either. Jobs are not manana falling from sky or a finite resource doled out by governments. A space alien willing to do yard work for $1/hr in a society where nobody is willing to do manual labor for less than $20/hr while homeowners can not afford to pay more than $10/hr does not take job from anyone, but actually add jobs to the society: more garden tools would be bought, the homeowner is not only happier for having a better yard/garden but also have more money to spend now that he spends less on the yard.

Contrary to that natural market exchange that makes everyone happier, additional government bureaucrats hired at $50/hr at the homeowner's expense to keep out space aliens from Mars would only leave the homeowner with even less money to spend at the garden store. The cost of the bureaucrat is even worse than hiring people to dig ditches and fill them back up: it's like hiring people to break people's windows to "stimulate" economy through window replacement: people would have even less money to spend other things after they spend on replacing the broken window. Likewise, consumers and employers would have less money to spend on other things after wages are artificially jacked up, regardless via minimum wage law or immigration law. The result is higher unemployment.

Yes please feel free. Of course I didn't ask for permission to use the 2 xs
guy, but I don't think you can get in trouble for that.

http://imgur.com/SqGqC

I put it on igmur back when I posted it on reddit.

OurBroker says

The reason for toxic loans -- interest-only financing, option ARMs, no-doc loan applications -- was to create the feedstock necessary to build mortgage-backed securities which yielded huge profits on Wall Street.

The reality is that toxic loans were not made by community banks, credit unions or most S&Ls. Some larger banks also refused to make them -- BB&T, Hudson City Bancorp, etc.

Now you see why legal tender laws and the federal reserve act were put in place: so that whatever paper the Wall Street monopoly conjures up the rest of the society has to take it at face value.

In the absence of legal tender law regarding "federal reserve note," the paper generated by the malfeasant banks would be quickly discounted in the market place. e.g. a "dollar" proffered by CountryWide would be worth less than a "dollar" from a sound bank; that would put a quick stop to the bubble.

The public has no direct contact with the Federal Reserve, the OCC, etc. The public -- in the form of borrowers -- has no voice in Washington. Don't believe it? Name the largest borrower association in Washington? Name the largest borrower PAC?

The whole point of centralizing everything to DC is so that the local people are deprived of voice. Even PAC's are far easier to manipulate than millions of people in their own hometowns free to do their own things.

Marcus --

Thanks. Your art is very clever.

OurBroker says

What we have today was made possible by the failure to regulate.

We should have bought more White Collar FBI agents. What we did instead is shift all the white collar FBI agents from tracking fraud in the US to tracking down Terrorist money and bank accounts.

The Republicans biggest strength is Obama, and nobody paying attention to this thread, should best not forget that.
Obama is going to elect the biggest republican douche-bag, it's already in the cards, the name and moniker wont matter, not even the running mate will matter.

Romney, Paul, Perry, Palin, take your pick.

But understand, they aren't going to win, because of their political prowess.

We need to start over again with our government and financial system. Both architectures have become a giant kludge. I'd like to think that all Americans, nay all people, want the same basic things: food, shelter, healthcare, education and infrastructure. Develop a sliding tax system that taxes all people fairly, present a budget and make these things happen using that budget. Get out of all things financial.

Tenouncetrout says

Romney, Paul, Perry, Palin, take your pick.

Wow, what a list. I will be doing some serious research on these candidates before I vote. I would hate voting for Obama, but I will if Palin, Bachman, or Perry are standing on the stage after the primary. Matter of fact, anyone endorsed by the Koch Tea Party will not get my vote.

Bellingham Bob says

People making $300,000+ are making a good living but 39.6% income taxes are pretty tough, that's 6% more than currently, so for a $350,000 income that's a $9000 hit.

No, it would only be a $3000 hit. Marginal tax rates means you only pay the higher amount on income above that level. So in your example, the extra 6% is only applied to the $50,000 above $300,000, not the entire amount.

This is another way the right-wing noise machine tries to distort the tax debate, by not acknowledging how marginal tax rates actually work.

Patrick - I really wish you would stay off politics because you are terrible at it and it drags the reputation of this fine blog down. Your comments come off as partisan and shallow as watching the screamers on MSNBC or even Fox.

Republican's "fatal weakness" is racism? We "want" old people eating cat food? Really? This is so dumb, my head hurts just reading it.

Sadly, I expect more of this type of 3rd grade nonsense from all corners as we come closer to the 2012 election. Libs will stamp their feet, scream and throw shit at Republicans hoping that some of it will stick.

mike2 says

Like Social Security as we know it has been run well and fair? GIve me a break. So a worker pays into it for 40 plus years with no interest and collects $1000-$1300 per month and that is a good thing? You could take that same amount of money ( it is yours ) and have it put in your name drawing a nominal amount of interest and over the same time period have $400k in your account when you are 60 years old and have twicw the amount per month for the rest of your life. The point isn't Social Security which is just a savings account for people. The point is how are they handling your money and are they ripping you off with it nd the answer is they have done a horrible job abd they are ripping you off

Amen to that. Imagine if I'd have invested all of those social security tax payments into a personal retirement account. Social Security is a Welfare program, plain and simple. Why do you think the Democrat base hates the idea of privatizing part of SS, i.e. personal accounts?

Yep, I would rather manage my retirement myself. What I am paying for in SS is the inability of others to manage their retirements. I am paying a human tax of sorts because to er is to be human.

srschrs says

The housing market will never recover until the gov't stops meddling and allows it to fail. It would not have been in this shape it were not for Fannie and Freddie and bleeding heart democrats insisted on giving loans to many undeserving people.

I agree with you there.

srschrs says

Obama has more than doubled the money supply weakening the dollar.

No, money supply is up to the Fed, not up to Obama.

srschrs says

Obama himself stated that he will side with his Muslim friends if politics turn against him.

No he didn't. Please show some proof. "Rush Limbaugh says so" doesn't count.

srschrs says

Even here in the US we have an insane immigration policy.

Right. We have complete lack of accountability by EMPLOYERS, who know full well they are employing illegal immigrants. Send a few employers to prison for that, and the whole problem will stop very quickly.

socal2 says

We "want" old people eating cat food? Really?

I said dog food. But what do you think they're going to eat when you've eliminated Social Security?

The constant harping that that Republicans and the Tea Party are racist is intellectual laziness at its finest.

Patrick can we stick with your area of competence and talk about housing prices? We get that you live in the SF/Bay Area and that every dinner party is an "OMG, Repubs suck!" event but come on. I am not a Republican but the constant bashing makes me wonder if they have something.

I said dog food. But what do you think they're going to eat when you've eliminated Social Security?

It will really depend on the supply side of econmics on your choice for dog food or cat food. I mean, if cat food tastes better it might get more expensive so the elderly may have to dine on dog food and occasionally have some cat food. Or, AF might say cannibalism could really break out at that point. You might be better off attracting rats with Dog food, and rats taste better than both, so Dog food could go up. Another thought is the ability to eat your neighbors pet, so we could see a total drop in dog and cat food since the easier choice is to consume the dog and cat which frees up Dog and Cat food completely. Then, we wouldn't have to worry about putting down all those animals at the shelter. and so on, and so on....

Where does my mind go today?

Also "hatred for blacks"?!!! What century/country do you live in? I have met exactly one white person in my very unsheltered life who hates black people (and Jews, Asians etc) and the guy was Eastern European. If the old people in your family sit around talking trash about black people I can assure you they are weird.

If the content of this thread is too "political" then rather than fall to the lowest possible denominator of exchange and eliminate it, those who are discomforted by the conversation need not read it.

Patrick makes the forum available without a required cost to participate. There are a wide variety of views. What's not to like?

I don't see why we can't talk politics in the Misc forum. It gives me a break from the horrible housing market news so I can get wrapped around horrible political conversation.

I guess we could start another thread. What party is better for housing; Republican or Democrat?

Wouldn't privatized social security be just like Obamacare?

In Chile, you're forced to give 10% of your income to a handful of government approved Funds. And, there are administration fees, just like any mutual fund.

Among the complaints most often heard here is that contributors are forced to pay exorbitant commissions to the pension funds. Exactly how much goes to such fees is a subject of debate, but a recent World Bank study calculated that a quarter to a third of all contributions paid by a person retiring in 2000 would have gone to pay such charges.

Wow, financial institutions sucking up 25-33% of all your privatized SS contributions. Who woulda thunk it! Does the US Social Security Administration costs eat up 25-33% of contributions over time? Nope.

Even many middle-class workers who contributed regularly are finding that their private accounts - burdened with hidden fees that may have soaked up as much as a third of their original investment - are failing to deliver as much in benefits as they would have received if they had stayed in the old system.

Dagoberto Sáez, for example, is a 66-year-old laboratory technician here who plans, because of a recent heart attack, to retire in March. He earns just under $950 a month; his pension fund has told him that his nearly 24 years of contributions will finance a 20-year annuity paying only $315 a month.

"Colleagues and friends with the same pay grade who stayed in the old system, people who work right alongside me," he said, "are retiring with pensions of almost $700 a month - good until they die. I have a salary that allows me to live with dignity, and all of a sudden I am going to be plunged into poverty, all because I made the mistake of believing the promises they made to us back in 1981."

But, but but... given the tremendous growth of Chile over the past few decades, surely Mr. Saez invested in crap, right? Not really. Only government-approved companies can take privatized Chilean Social Security money, and they are limited to low-risk investments. Saez didn't pick Cold Fusion High Risk startups to invest in, he wasn't allowed to.

Some have estimated that after factoring fees and the average performance of the approved pension administration companies, the average yearly ROI was Note also that Pinochet left the military and intelligence employees in the public social security system. Free Markets for thee, Guaranteed Income for me.

http://www.nytimes.com/2005/01/27/business/worldbusiness/27pension.html?ex=1264482000&en=42c98585c86afe88&ei=5090&partner=rssuserland

m1ckey6 says

Patrick can we stick with your area of competence and talk about housing prices?

Nah, this is too much fun.

Anyway, Democrats have been too prissy about standing up for the rights of working people, and about our obligations to each other as a society. Someone's got to do it.

I said dog food. But what do you think they're going to eat when you've eliminated Social Security?

The food that the big agro conglomerates are paid by the government not to grow;

The corn that is being burned as fuel can be used for raising more animals;

The undocumented aliens and their employers could raise more food and process more food if they are not hassled by gun-toting thugs in government uniforms;

The local farmers and food processors could bring more food to the market place and make food less expensive if they are not hassled;

Letting go all the thugs getting in the way of food production and not taxing people to pay for their wages will go a long way towards enabling more resources available for real charities instead of wasting resources on mandatory "Mafia charity."

thunderlips11 says

Wow, financial institutions sucking up 25-33% of all your privatized SS contributions. Who woulda thunk it! Does the US Social Security Administration costs eat up 25-33% of contributions over time? Nope.

The SSA is only the front reception desk of the financial institution called the US government: it's only responsible for receiving money and cutting checks, well not even that, as SS tax collection is carried out by IRS. What SSA is responsible for is generating Madoff-like fake statements. SSA is not responsible for the real investment of the money. That money is exchanged for "special" non-marketable Treasury IOU's. Because it is non-marketable, the IOU's are completely worthless. The SSA is essentially a fraudulent shell company that helps the rest of the government steal the entirety of the SS tax revenue minus the current-year payout. That's why it has to be "reformed" every time the net cash flow threatens to go negative. There is no "trust fund"; it's money already stolen and spent.

Truthplease says

Yep, I would rather manage my retirement myself. What I am paying for in SS is the inability of others to manage their retirements. I am paying a human tax of sorts because to er is to be human.

Agree with the sentiment except one crucial factor: why should the charity to help out the less fortunate be run like a Mafia-run orphan-and-widow fund instead of letting donors choose among competing charitable organizations?

"Republicans would be very happy to make the elderly poor eat dog food and go entirely without medical care, because Social Security and Medicare run on tax money, and anything that runs on tax money is GODLESS COMMUNISM to Republicans."

This comment alone disqualifies your opinion

Look man. Obama's race has zero to do with the Rights dislike for this man. It's the awful, stupid, unconstitutional, central planning, big government, corruption, union organizing, job killing, anti-gun, anti-business, anti-liberty, Big-Brother, government knows best bureaucracy that we can't stand. We are sick of his holier than thou, finger in your face, they bring a knife you bring a gun, global warming religion nut job and condescending BULLSHIT!

The clear reason health care is so expensive is because of regulatory capture in the industry. If you cant buy it, it cost more. Plain and simple.

Pap smears for men? Prostate exams for women? Hair transplants? These are your insurance mandates.

As far as SSI and Medicare, what the hell did people do for millions of years without it? Come on. If people were taught that they cannot rely on government cheese, they would find another way. The only reason healthcare is in such a mess is due to the involvement of the government. Everthing the government gets involved with turns to shit. Trillions wasted. Crony capitalism does not work.

Let Doc in the Box offices open. Free up nurse pratictioners to immunize and dereugulate some pharmaceuticals.

OH NOOOOO!!!!

It's not that the government isnt doing enough...

It's that they've done to much already.

dtower1 says

As far as SSI and Medicare, what the hell did people do for millions of years without it? Come on. If people were taught that they cannot rely on government cheese, they would find another way. The only reason healthcare is in such a mess is due to the involvement of the government. Everthing the government gets involved with turns to shit. Trillions wasted. Crony capitalism does not work.

They died at 35 from bad teeth, raving incoherently as common dental problems became infections that spread to their brain.

Or they were drawn and quartered at the age of 11 by the Lord's knights, for taking a goose from the Lord's Forest during a famine, as per the glorious rule of law.

Reality says

as SS tax collection is carried out by IRS.

SS Checks are written from the SSA, not the IRS.

How much does it cost the IRS to collect SSI payments? I doubt more than 1 or 2%.

What's the advantage to private accounts? If they stole SSI, they can steal your IRA, 401k or Roth money too.

"They died at 35 from an infection of the mouth, raving incoherently as common dental problems became infections that spread to their brain."

And your point?

Was sit that thet didnt have insurance or they were too stupid to get the dentist earlier?

Do you work for free?

if you believe that health care is a right, the?
What have you done today to make another persons health coverage more affordable?

Put your money where your mouth is.
Where does the church come to play here?
Free clinics work right? Let's all just go there.

I hate this topic.