patrick.net

If it wasn't for the run up fuel and grain etc., Would the GDP be negative and therefor an official recession?

If it wasn’t for the run up fuel and grain etc., Would the GDP be negative and therefor an official recession?

I wonder that all the time.
If People have to squeeze in every penny earned just to get by.
FB's foreclose on house and spend a good chunck of money saved from mortgage on other stuff.
Inflation as high as it is.
Tax Rebates mostly plowed back into system.

GDP and Consumer will be strong.

should we say 2-3% GDP growth as just inflation?

Richmond,

>>I have a neighbor whose family gasoline bill is over $1800.00 a month and rising.

It is truly obscene how much oil these people have been wasting. It must be on the order of 400-450 gal/month. If it wasn't for the cost, they would merrily continue until oblivion.

What really stings is that it is more than his mortgage.

400-450 gal/month---

When you put a volume to it, it's even worse. Sounds about right. Big trucks, long commutes, it adds up fast. Ouch.

justme Says:
I didn’t say it was remarkable. What is it YOU are trying to say?

Just saying that there is _always_:
1. a "bottom of the economic ladder"
2. pain at the b.o.t.e.l.

So I don't see how bringing that up makes any difference. :-)

You may have great suggestions to fix specific issues (like oil taxes being used to fund alt.energy development), but 1 and 2 ain't going away.

Government today is controlled by an oligarchy of cronies, who are great at pissing away money with little public benefit to show for it - so I don't happen to have a lot of faith in the idea of depending on the same bunch of criminals to solve anything, but that is a different topic altogether. Getting this kind of government to regulate "the market" is just asking for more pain for the b.o.t.e.l.

Just to be clear, I am not questioning the value - positive or negative - of government regulation, nor am I taking a dogmatic position for or against it.

Instead, I am questioning the integrity and quality-of-leadership in the government before entrusting more power to them.

BAP,

Garage baby, garage..............and a locking fuel cap. If that doesn't do it, I give up. I should probably get a carbide fuel tank too. Drill that! Heh,Heh.

And chain mail fuel lines.

If you would like to believe it

Fed: Size of Bear Stearns Loan Unchanged at $29 Billion

I have a neighbor whose family gasoline bill is over $1800.00 a month and rising.

Something's odd about this statistic. At $4/gal, that's 450 gallons a month. Even with 12 mpg that's driving 5,400 miles a month! That's an average of 180 miles a day. Who in the HECK drives that much?

SP/TOB

>>Instead, I am questioning the integrity and quality-of-leadership in the government before entrusting more power to them.

>>coming up next… declining quality of education, creating a dearth of suitable leaders.

The "quality" of our leadership isn't due to lack of education or ability. It is a structural problem. The way our government is regulated is flawed, starting with a severely substandard election and representation system. This is the fundamental problem of US politics. It needs proper regulation, with proper incentives for principled and consistent behavior.

For government to work correctly there must be fair and proportional representation. As long as we have essentially just two political parties that have a chance of influence, this will NEVER change. The United States political system is suffering from bipolar disorder, and is always oscillating and never settling down where the people want it to be.

DennisN,

Yes, 450 gals is an awful lot, maybe 20-30x what I use. But they seem to have multiple cars as well?

A thousand miles a week is nothing for alot of commuters nowadays. Mom, Dad, couple of spoiled kids with mom and dad footing the bill, boat, jetskis. Total gas bill. Got all the toys. Might as well run 'em.

You figure anyone coming over the hill to work in the East or South Bay does a grand a week by the time you add in normal running around on top of the commute. That's how crazy things have gotten. It just isn't worth it.

My F-150 gets ave. 19 mpg and my Miata about 30 mpg. Say my mixed use gets 27 mpg (I try to drive the Miata as much as possible). With 450 gallons a month, that's 12,150 MILES per MONTH. There's something really off-wack here. That's about what I drive in a year.

A thousand miles a week, times three trucks, times 4.2 weeks, that's 12,600. Sound pretty darn close to me.

Contractors go where the work is.

OT

Something that will be very impactful for the next decade to come is happening in Australia. Australia just implemented a sweeping tax cut, for businesses, individuals and overseas investors. Oz used to have one of the highest tax in the world, but the commodity boom and enormous immigration flow that accounted for 10% of the population base has enabled the country to enjoy big budget surplus at state and federal level, as well as trade surplus.

A $250K family in the BA originally will most definitely be worse off in tax if they migrate to Australia, no longer the case. In fact, if I were to run through my spreadsheet carefully, you may even come out ahead, due to the multiple child benefits you can receive from the state and a better standard of living at the same cost. For overseas investors, the 10% tax on government bonds is waived, making the high yield even more enticing. Their ATO (IRS) is also very progressive to make the tax codes easier and simpler. I can easily cope with my non-resident alien cap gains in Oz just by reading the ATO tax codes online, it is virtually impossible to navigate the IRS website, you most definitely need an accountant well versed in international taxation in a non-resident alien situation for the US. Our tax rate has only ONE direction to go.

If I were in my 20s, not yet a homeowner, skilled and ready to start a family (more than 2 kids), I would definitely migrate to Australia. Everything that is happening in that country is pointing to a great future in the next decade. My money will be going that way for sure.

Australia's home loan rate is around 10% now, which is much more normal than the US. The fact that its housing market hasn't crashed (only slowed down) means that it is less likely to crash as ours. Can you imagine what will happen to the US housing market if our mortgage rate is above, 8%? There will be riots all over the place.

So you figure a couple of trucks and crappy milage you can eat it up pretty quick. A hundred miles each way for a job is not at all uncommon.

Mind you, their immigrants are mainly skilled labor from Europe (UK, Ireland, Eastern Europe), New Zealand, China and India who have jump through the education and job experience hurdles. So the more immigrants they have, the better off the entire society will be. They don't have any illegal immigration problem, because frankly if anyone can survive the extremely venomous stinger, shark and high sea to arrive at the Australian coastline, his courage and physique obviously should be appreciated.

On average, their immigrants are much richer and skilled than ours, because they only allow people with enough job experience to migrate. So most immigrants arrive with years of savings.

The US immigration has a lot to learn from the Australian immigration policy.

TOB,

I do plan to visit Brazil sometime in 2009, this is one country that intrigues me. Too bad that I am already married, I heard that Brazilian girls are very attractive :-)

TOB,

of course there are lots of rich Asians, but they are not coming to the US any more.

I am not biased against any race, I like rich Arabs, rich Latinos, rich Marsians, anybody who can bring money to my country, I welcome them, even if it is drug money they accumulated in their home country. As long as they are coming here and abide by our law, I don't care how they become rich in the first place.

You are also not familiar with Australian's immigration policy. You can go to their website. Poor Asians, Europeans, whatever you are with no skills no money and only relatives have an extremely slim chance of making it into Australia nowadays. I like immigrants who can bring either money or skill, and I am for getting rid of all humanity-based or politically-motivated immigration programs.

You probably have no idea how much money rich immigrants can bring to a country of small population base like Australia. There was a survey on the newspaper saying that on average a skilled immigrant manage to buy a home within 2.5 years, with most money coming from savings in their home countries. If you have not met many moneyed immigrants, it's because the immigration policy of the US is f*cked up. US gets all the wrong kinds of immigrants, elderly (poor elderly I may add), family-based reunion (more poor relatives from poor countries). And not to mention the illegal immigration problem we are facing.

A country's growth is based on grabbing the right kind of people. I believe in immigration, because a person who is courageous and smart should be able to pick and choose the best country as he sees fit, at different stages of his life, and he has to remain desirable in skills or money for the countries that he intends to migrate to. Only the uncompetitive ones are stuck in one country in which he is born. The sad thing for America is we are increasingly getting a wrong mix of immigrants who are just pulled in through family not by their individual merits.

I have thought about immigrating to Australia. My only hope is that Australia starts making use of those massive deposits of uranium. I sort of put all my eggs in one basket by earning a degree in nuclear engineering and working at a nuke plant as an operator for the last 3 years.

The one thing I thought was funny about their online questionnaire was my inability to select "fluent in English". I kept getting a rejection saying that my country of origin, the USA, does not have English as the official language.

The only problem would be giving up my guns. I guess I could always pack them in cosmoline and give them to my brother for safe keeping :)

All,

What does Australia NOT have, i.e what do they need to import?

Calling EBGuy.

Here is the most recent H3.

What does the following paragraph mean?
"On June 26, 2008, the Federal Reserve Bank of New York (FRBNY) extended credit to Maiden Lane LLC, as discussed in the notes to the Board's
H.4.1 statistical release, "Factors Affecting Reserve Balances of Depository Institutions and Condition Statement of Federal Reserve Banks."
Consistent with generally accepted accounting principles, the assets and liabilities of the LLC have been consolidated with the assets and
liabilities of the FRBNY because the FRBNY is the primary beneficiary of Maiden Lane LLC. As a consequence of this consolidation, the
extension of credit from the FRBNY to the LLC is eliminated from the Federal Reserve's balance sheet, and, thus, the loan is not included in
borrowed reserves."

Is that a way for the Fed to make borrowed reserve OFF balance sheet? So in the future, they can continue stuffing the Maiden Lane LLC with borrowed reserve?

Hi, I was busy last couple of days. OO, I think your scenario is very possible. It is on of those recurring questions as to whether prices will drop quickly or hold for years with no growth. I can't help but think that a lot of these desireable areas have owners who own businesses and will be hurt in a downturn. That's why I'm still leaning towards severe price declines still to come. My loan servicing broker has told me that they are in negotiations to pay 50 cents on the dollar for non performing mortgages. I might invest in that deal. They are going to buy a block of 40 properties from a bank.

A friend of mine in the industry is telling me in Southern La Jolla prices have dropped from 1 million to about 800K. I told her I'm a player at $500K.

FormerAptBroker Says:
July 1st, 2008 at 7:35 am
Malcolm Says:
> Yes, I agree with Richmond, truly wealthy people
> use loans as a tool, not just out of necessity.
"I hear this often, but in real life the number of people that do not “need” a loan to buy a home is very small (it is really statistically insignifigant)…"

Maybe, but it's still true. I saw my old mentor make his final mortgage payment on his La Jolla home. It was literally like $300 a month. The guy was worth about 10 million before he died a couple of years ago. That mortgage was from the late 60s on a La Jolla house that cost $50,000. That was a lot in 1968. It is probably worth 2 million now.
Sure most buyers aren't in the category, most of these guys that we're talking about already own their dream house. I would caution against thinking that they flaunt it. I personally know people who are very wealthy but you wouldn't know it from looking at how they live their lives.

OO Says:
I do plan to visit Brazil sometime in 2009, this is one country that intrigues me. Too bad that I am already married, I heard that Brazilian girls are very attractive

Nice place, Rio is fun, but Brasilia was amazing for an architecture-geek like me. http://www.geocities.com/thetropics/3416/imagenes.htm

OO,

No clue about the Maiden Lane LLC shenanigans. I thought the JPM BS was all covered in H.4.1 under "other credit extensions". See the H.4.1 report from March 20.
The release also includes data on other credit extensions. This category includes credit extensions such as the arrangements involving JPMorgan Chase & Co. and The Bear Stearns Companies Inc. that were approved by the Board of Governors on March 14, 2008, and March 16, 2008. That line item has been zero for quite some time after some initial borrowing that went on. I guess Maiden is all about the Feds "limited liability" from the BS deal.

Yesterdays TSLF auction fell off only slightly, so we should still be above $100 billion next week.

Bap33,

I have to admit, I would not have guessed that.

I agree Bap. When asked to fill in my "race" on a form, I always select other and write in human.

im white btw.

I would've never guessed.

I am me as you are he as you are we and we are all together....I am the walrus!

ku ku cachu

Gesundheit. ;)

Ooch ooch achook......it's Duke!

(That's my kitty Duke, not the poster here.)

Wait, are we doing some gerrymandering now?

Oh, TOB, maybe you are just joking, but there is someone by that name listed in Wikipedia.
Is that you :-)?

Bap33,

When I said, "I would not have guessed that", I was thinking along the same lines as TOB and stereotyping your views and writing as more likely to come from a white person. Apart from that, no offense intended.

I have always tried to find reasons why trailers are looked down upon with such disdain. It all has to do with the 11:00 PM news stories about the redneck that beat up his wife/ blew his hand off with a firecracker/ discharged his firearms in the air while in a drunken rage.

My only problem with a trailer is with the tornado dangers. If you can solve this issue with a storm cellar, the trailer can be one of the cheapest methods of providing housing for yourself.

I am debt free and currently live in a duplex with my landlord living next door. I pay a very small amount for it. I get crap at work for living in this place. I do admit that it is not the greatest place. The price however is right.

I sometimes want to compare net worths with these obnoxious assholes and see the difference.