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  • Tracking The Housing Recovery  [View article]
    JP Morgan is expecting 1.2 million new foreclosures and 650,000 loan modifications that will re-default. With the horrible lFHA loans this should come as no surprise. Also, the numbers include another 530,000 new mods, 1 million foreclosure sales, and 700,000 short sales. By the end of 2013 we should see the shadow inventory decline by 380,000 leaving us still with about 4 million properties. Morgan also reports there are 1.2 million new delinquencies, which is simply more prolonging the inevitable forclosure.

    How can we expect a housing recovery without an improvement in emplyment. The media proclaims that the decline of the official unemployment rate to 7.7 percent is evidence that the. economy is improving. Sadly, the truth is that unemployment in America is not going down. The truth is the percentage of working Americans with a job dropped in November. During this recession, Americans with a job fell from about 63 percent to under 59 percent and it has stayed there for 39 months. In September 2009, the middle of the recession, 58.7 percent of all working age Americans were employed. In November 2012, 58.7 percent of Americans were employed. In 3 years we are in the exact same place! Yet we are told that the "unemployment rate" is steadily going down. How easily we accept these lies. As with the statistically manipulated data employed with medical research, it is a math trick. When a worker leaves the workforce, we pretend that worker is no longer looking for work. Diffeent reports show that 350,000-500,000 workers left the labor force in November. Each month that workers stop looking for work or 'Drop out of the workforce" the "unemployment rate goes down. Barack Obama has been president for four years. During this time the number of Americans "not in the labor force" has increased by nearly 8.5 million! I am not blaming him or dismissing Obama's responsibility in this matter. But he is as big of a liar as anyone regarding these blatant reporting false hoods. Official unemployment rate is so manipulated that it is of very little value, except for possibly U6.
    Dec 18, 2012. 12:41 PM | 1 Like Like |Link to Comment
  • Jobs Growth Steady But Slow  [View article]
    I am seeking the light, but finding illumination can be difficult when the horizon is filled with dark clouds. I have become a pessimist after 40 years as an optimist, and it is a role I do not enjoy. In the last month, more than 500,000 people dropped out of the labor force. Many of those that withdrew were forced out from early retirement, a harbinger of the demographic tsunami that is reaching our shores. In the last year the non-institutionalized population (which exclude the Senate, Congress, and White House) grew by 3.7 million. During this same period, the labor force grew by only 1.3 million. Those not in the labor force grew by 2.3 million. To suggest that 140,000 new jobs is reason to celebrate is ridiculous and will not sustain a country that lives paycheck to paycheck. Those leaving or being forced from the workforce due to early retirement, are in poor financial health. One third have no savings. The likelihood that their spending will contribute to recovery represents living in denial.

    This is not an ordinary cyclical recovery. If we employ metrics that were collected since 1920, the data samples are too small and are statistically irrelevant. While it is easy to memorize the small data sets from 80 years, the demographics present a more clear conceptual view of what the future holds.
    For at least the last decade, with data to support two decades, US incomes have experienced little to no net growth. Instead of hunkering down, we borrowed our way to prosperity, both publicly and privately. These debts have to unwind in one of two ways: written off, or paid off. Either method is deflationary.
    Dec 9, 2012. 11:22 PM | Likes Like |Link to Comment
  • Car Sales Surge  [View article]

    You read factual material? According to those frivolous folks at the CDC 40.8% of all births are out of wedlock in 2010. In 2012, the problem grows worse According to government stats published by the Business Insider, babies born out of wedlock are soaring. ( According to the US Bureau of Justice Statistics, violent crime jumped 18%, and property crime jumped 11% between 2010 and 2012. ( These data contradict the political stats offered by the FBI data, because of the continuing concerns that police departments face pressure to show continually falling crime rates, leading to underreporting of crime. I assume that you ignored those previous post links that show crime is accelerating?

    You state, "My problem is with those who have so much and want to balance the budget on the poor/middle class vice having a really swall impact on their wealth.." Your ability to memorize the Obama leftist play book is impressive. But do not confuse a good memory with conceptual thought and originality. The 2% do not benefit from government spending. The 2% fund the government spending. What qualifies you to determine the acceptable level of wealth? You think Warren Buffet is a role model? Are you talking about the guy that got $5 billion in the Wells Fargo Bailout? Or are you talking about the guy that owns the majority of Northern Pacific and stands to benefit from denying the Keystone pipeline? Is he your role model? If he is so eager to help, why hasn't he written a check? The funds to provide for spending come from confiscating the wealth of the 2%, and you think they deserve greater confiscation! And when the proceeds from the next tax hike are squandered, you will seek greater confiscation from the producers.

    You state, "Just because they are not in the upper half of economic wealth does not make them failures." The only person using the word failure is you. I come from a poor family. None of the seniors in my family (parents, aunts, uncles, grand parents) graduated high school. They were all blue collar hard working success stories. A success story based upon self respect, character, a solid work ethic, and independence. They did not complain about working as custodians and brewery laborers. They were not financially wealthy, they were rich in character and personal values. They did not have tattoos or whine about people that did well. That thought it was of poor character to take a government hand out. Oh, and one more thing; they were all Democrats. Compare them to the Democrat leftist of today that believe they are owed a handout from the government, and vote for a president that guarantees the dole. (Do not confuse the last statement as defending Republicans. The only thing worse than a Republican is a Democrat.)

    Dwrench, you are obviously a bright man or woman. Your rationalization skills and enragement in denial is well developed based upon your conformation bias to defend the left. As I am irreverent toward the left and the right, my critique is greater of you lefties because you are one. It is not personal. It is fear. People like you are frightening to me in the same way skinheads are and the Nazis would have been. You are so entrenched in ideology, you are missing the big picture. My concerns are with the big picture. If a bright person like yourself can be fooled into believing the socialist shovelfuls coming out of PA Avenue, imagine how those of lesser intellect will follow even more blindly than you. Indeed, it is a time for concern.
    Dec 7, 2012. 07:20 PM | Likes Like |Link to Comment
  • Car Sales Surge  [View article]


    Thank you for this delightful exchange. While I disagree with your views, I appreciate the discourse.

    You ask, "What has tattoo parlors have to do about anything? " Does your orthopedic surgeon or cardiologist sport tattoos on their necks? Your priest, rabbi, or pastor? Does the CEO of Microsoft? Do you believe that tattooed persons represent the higher standards of the most accomplished individuals? When a nation aspires to lower standards it is not a fluke. Your refusal to admit the obvious is representative of not recognizing the changes that occur before your eyes. Tatoo parlors are only a small representative of the lowering of standards. Do you have one?

    Your statement, 'Almost all Americans are contributing to our society, some contribute more financially, some socially, some by raising children," is naive beyond comment. How many of those having children are born out of wedlock? Why is it that the criminals, many with tattoos, are from single family homes? Producing children that become wards of the state, dependent on food stamps and Medicaid, are looters from those they pay the freight (work). However, they do contribute to the booming industry of private incarceration facilities. is that what you mean by contributing?

    Your assessment of the Boomers is more on target than your conceptual views of the state of affairs. Blaming the Bush tax cuts and not mentioning the spending is lunacy. You should run for office. The revenues squandered on war were a problem under Bush, and they remain unresolved under Obama. But if the Great Lord and Savior Obama believes its OK to bomb other countries it must be the correct action. Please.

    Regarding 'The better Angels' recommendation, please read 'The Road to Serfdom' and the story of Jamestown. The divisions that you imply are fabricated have been historically recognized for centuries by those that established the foundations for success long ago. Our success resulting from these basic principles is now exploited by the 'Hangers on' looters can only drain so much from the well before it runs dry. Investing in human capital does not mean subsidizing poverty. Whatever we subsidize poverty we increase its prevalence.

    You view of the 2% is typical of a media groupie. How many 2% ers do you know? I know and have served many. The overwhelming majority were working while you were watching Monday Night Football. They worked on vacations. They missed vacations. They worked 60-70 hours per week while the tattoo types were at the sports bar or watching reality TV. They put their asses on the line by going into debt to start a business. They took part time jobs to pay employees when there was no cash flow. They put their homes up as collateral to pay the staff that will not show up if they miss a pay. I go to work for 9-12 months without pay, living off of savings and borrowed funds to start the company, but I am greedy if I succeed. The 2% did and do all the things required to succeed, the things the most people refuse to consider, or do not posses the ability to execute. They did not screw other people over to get where they are. But you think it is just to punish their initiative. You believe you have the right to determine the rewards for their efforts. You think they should have risked it all to "Share their good fortune or luck." It was not luck. It was, 'going in early and staying late', that made it happen. The 2% are not draggin' the country down. The 2%, which you obviously deplore, pull the country up. Its not fashionable to state in a country where everyone gets a trophy, or where the President is a socialist. The race to the bottom continues, and your thinking leads the charge.
    Dec 7, 2012. 12:43 PM | Likes Like |Link to Comment
  • Car Sales Surge  [View article]

    I disagree with your assessment, "This has nothing to do with the lack of savings of the baby boomers, it is a fact that as we age over 55, our consumption falls off fairly quickly (~25% every decade).." The fact that boomer have lost trillions in home equity will exacerbate the normal reductions in demographic spending patterns.

    Your points on immigration are misdirected. We allow immigration of laborers, fruit pickers, and drug dealers because of poor immigration policy, and with the current administration, the tendency of these lower class immigrants to become Democrats will not assist the impotent Republicans to reform this conundrum. We do not encourage the immigration of highly skilled and educated immigrants, nor do we encourage those students from abroad that study at our universities to become residents or citizens.

    Your comments on our natural resource use and SUVs are trite and memorized Pollyanna. Need some third worl evidence that we spiral downward:
    1. A San Bernadino city attorney told residents to, "Lock your doors and load your guns.'

    2. In Oakland, burglaries are up 43%. More than 11, 000 homes have been broken into this year.

    3. In Detroit, there are 1,000 fewer police officers than in 2008. A police union warned its members to "Enter Detroit at your own risk!" Homicide is up 79 %.

    4. Chicago's Gang Enforcement Unit has 200 officers. However, there are an estimated 100,000 gang members. It is ever hits the fan in Chicago, Hurricane Sandy will look like a Sunday picnic.

    5. Speaking of Sandy, looters, the fastest growing segment of the US (especially if we employ the Ayn Rand definition) struck the NY homes that were ravaged by the storm.

    To deny this increasing trend is the ultimate deployment of the ostrich principle; hiding your head in the sand. Are we ripe for civil unrest? Do you believe our economic and cultural standards have improved since the Rodney King riots? Have you missed the number of tattoo parlors that open everywhere you go? As our President encourages the "I am a victim' crowd by engaging in class warfare, the acceptance of less desirable behavior increases. Obama, like Bush before him, offers no effective solutions to long term problems. Obama instead encourages the looters, those Jamestown-like freeloaders, both private and corporate alike. If you have the money (large banks and corporations), or the block voters (unions, blacks, government employees) you have the president's ear. If not, you get a great speech, photo, but no substance.

    I admire you ability to see the world through rose colored glasses. Your belief that our ability to provide for a larger number of freeloaders (you know, the 47%) is a sign of future prosperity is not the substance for positive future economic prospects. Obama's ideology does not understand small business. He has never started a company. He has never put his home up as collateral and risked everything. He has never taken out a personal loan to pay employees on Friday, because they would not show up on Monday if they were not paid. He has never had a job that was not funded by taxpayers. He has never had a paper route! Third world? Stop setting the bar so high. Our current circumstances, the current administration, tare representative of the potential for continuing declines and are the substance of a surrealistic novel. Few authors could make this stuff up.
    Dec 6, 2012. 01:10 PM | Likes Like |Link to Comment
  • Car Sales Surge  [View article]

    Let me guess. You are a Keynesian democrat. You thought Bush was horrible, and like that famous economist Jamie Foxx, you think 'Obama is Lord and Savior.' I remember thinking, "We will never have a president as economically incompetent as Bush." Clearly, I was wrong. Obama is about four times as bad as Bush because he has quadrupled all of Bush's actions. Therefore, if you are a supporter of the current group of clowns, you are a de facto Bush supporter.

    The Fed can only do one thing, increase liquidity. Therefore, it makes more money available. After the 2008 occurred, the OCC told those of us in the banking community to buttress lending standards. For example, 25% down on a home purchase. The result was no one qualified for a mortgage. As the economy slowed we were told it is permissible to loosen standards, especially on auto loans, which we all know are an Obama favorite because of the corrupt unions that support the president. So what if 40% of the auto loans would fall into the sub-prime category. The current boom in auto sales is reminiscent of the sub-prime mortgage debacle. Instead of getting rich on homes we cannot afford, you support the idea that country will prosper purchasing autos we cannot afford. The immediate gains of this shallow, short term, simplistic thinking is treating the symptoms while the disease continues untouched. You do not treat a diabetic by adding sugar to their diet. We will not solve the debt problems of the private and public sectors by adding more debt.

    The demographic time bomb of under saved and retiring Boomers, the largest demographic in the country, does not bode well for the future growth that will be required to pay down our debt. Unlike the past, when boomers were in their peak earning years, we are not going to grow our way out of this mess (upon which is what the Fed and Obama are depending). The Fed and Krugman types continue to base our future upon the past where demographics enabled us to grow out from under our mistakes. This view is akin to driving forward by looking exclusively through the rear view mirror. I understand that these are big picture concepts and may be difficult for many to understand. Synthesizing information is not a easily recognized concept because it relies more on lateral thinking than regurgitation of memorized metrics touted by most economists. As stated, the thinking typified by Bush and Obama is shallow, short term, and simplistic, intended to satisfy a public that has their delayed gratification ability exterminated by a declining education system and culture. Your guy is in the White House. While he does not sport a tattoo (yet), I am sure there will be subsidies to reimburse those that wish to engage in such displays of self expression. When the tattoo recipient is 85, he will tell his grandchildren that he got that tatto when he was an impatient young man and did not consider that it would look like crap when he was old and wrinkled. It is unlikely that Obama will be that honest about accelerating the reduction of standards in the US to third world status. As we descend, I hope we just stop at mediocrity.
    Dec 5, 2012. 02:11 PM | Likes Like |Link to Comment
  • Wells Fargo, Other Payday Lenders Draw Scrutiny Of New Fed Agency  [View article]
    I am now retired but worked in the PDL business three years ago. There are many misconceptions about this service and the article above does not clear things up.

    First, the APR of a two week loan, by law, must be calculated on an annual basis which totally distorts the APR. For example, lend a person $200 for two weeks and charge $15 dollars interest and you earned approximately 7.5 % in two weeks. Annualize that rate and it is near 400%. No collateral, no security, and default rates that make sub prime mortgages appear favorable. Gino Verza is totally clueless. Those that operate ethically and within the law display a complete TILA with every advance.

    Second, compared to the rates that banks charge for NSF fees payday loans are cheap! If the banks were forced to post NSF APRs, bank fees are in the neighborhood of 1500%. Where is the CFPB on that item? Oh, that's right. Banks donate a lot more to the president than the PDL industry can donate.

    The PDL loan industry does have warts. There are unscrupulous lenders that are fly by night operations. Though these toads are in the minority, they are the fodder that headline grabbers and politicians employ to feather their beds and tarnish an entire industry. When I was involved, the thank you emails outnumbered the complaints by 50 to one. I suspect those numbers have not changed. People with no where to go, that need money in a day (not after a three week loan review) to pay the electric, gas, or fix a blownout tire will have no where to go if the government screws up the PDL industry like they have screwed up everything else they touch.
    Jun 3, 2012. 01:05 PM | 2 Likes Like |Link to Comment
  • The Economy Grows Under The Shadow Of Recession  [View article]
    A reliable data set produced by the government is the IRS daily tax receipts. If you earned income it is taxed and the Service calculates that number daily. Since January 2012, tax receipts have been falling steadily. If the consumer driven US economy were in a growth phase, tax recipts would be growing. You can calculate real out put, the phony U-3 numbers, the more realistic U-6, or use the best comparison-Shadow stats Real UE (near 20%), or any other hypothetical argument you choose and it will not alter what this data represents; we are contracting.
    May 20, 2012. 12:06 PM | Likes Like |Link to Comment
  • 10-Year U.S. Treasury Is Heading For 6%  [View article]
    I do not disagree with your statement, "The idea now is apparently cheap money can stimulate economic growth, I don't buy that ...when I started out someone said to me ...when the money chases the projects rather than the other way...that's the time." My point was deleveraging destroys dollars. When we write off debt, we reduce the number of dollars and they become more valuable (Japanes Yen for 20 years). These circumstances do not cause interest rates to rise from current historical lows to 6%.
    Mar 29, 2012. 03:48 PM | 1 Like Like |Link to Comment
  • 10-Year U.S. Treasury Is Heading For 6%  [View article]
    My concerns, though not data driven, are with the levels of private debt that must be unwound. Though symptomatic treatment measures (Stimulus and Fed balance sheet expansion) provide an inflationary boost, the amount of private debt outstanding to be de leveraged (approx. $42 trillion) is deflationary. This level of private debt dwarfs the Fed or Administration intervention amounts. Base on these issues, if 6% materializes, it should be a great opportunity as we travel down the deflationary path established by Japan for the last two decades. Also, as with Japan, the demographic trends of boomers exiting peak earning years and entering peak saving years, at a time when their nest eggs have been severely diminished does not provide much support to inflationary, rising rates. Because the globe suffers this malaise to a greater degree than the US, we are essentially the cleanest of the dirty T shirts in the laundry.
    Mar 29, 2012. 12:15 PM | Likes Like |Link to Comment
  • Seeing The End Of The Real Estate Death Spiral  [View article]
    Markets do not go straight up or down. While quantitative data can provide insight upon which to assess an issue, data collection does not guarantee qualitative conceptual thought which this article appears to lack. The recent revisions of the January new home sales down 5.4% tell a different story than the author presents above. That most sales are cash sales do not show that real estate as we know it is making a comeback (the buyers are investors not home owners). That BOA wants to turn delinquent homeowners into renters does not bode well for a comeback. The facts that average wages are down and jobs are scarce do not support home buying. The Shadow inventory held back by banks that will be released now due to the foreclosure settlement will only reduce home prices is not supportive of RE value. The fact that 80 million Boomers are to be replaced by 65 million in the next Generation that are less affluent, less productive, under employed, and saddled with tuition debt means there will be less people to buy the existing glut of homes. The temporary blip up is more likely a gathering of momentum for the next leg down.
    Mar 25, 2012. 12:06 PM | 5 Likes Like |Link to Comment
  • Country Default Risk  [View article]
    CDS? Are they really broke people insuring other broke people? Therefore, the CDS premium reduction means that the broke banks , institutions, and the countries wherein they are located are feeling better about their less awful condition. Could this be a reflection of improving conditions? Sure. Could this also be a reflection that the same people that missed the last crises are re-digging that hole? Sure .
    Mar 14, 2012. 04:56 PM | 1 Like Like |Link to Comment
  • Describing A Good Jobs Number Report  [View article]
    You state, "What we really need is a healthy economy. The way we get there is a fiscal stimulus by any means necessary, aggressive monetary policy, and putting the housing market in order. What are the chances we’ll see changes on any of these fronts?"

    I believe that the above statement is a reflection of recency bias. The statements above and the perspective they reflect are cyclical solutions that have worked successfully in the past. The reason they are not working now is because we are not experiencing a cyclical downturn, we are in a structural change your above statement totally ignores. The interest rate manipulations and monetary policies of the past worked as long as boomers were borrowing and buying. As the boomers exit their peak earning years and enter peak saving years consumer activity declines. However, several factors are amplifying this normal contraction in purchasing and economic activity:

    1. Last estimates are that $11 trillion of personal wealth has evaporated.

    2. Private debt is estimated at $42 trillion, which exceeds the current levels of public debt ($14 trillion). Therefore, making more credit available will not help when the private sector is already so deeply under water.

    3. Eighty (80) million boomers are headed for downsizing of their homes. Gen X has approximately 60 million in their ranks. Who will purchase these outstanding boomer homes? We could turn the money faucet on full blast and such actions will not fill this demand gap!

    4. Making matters worse, of those 60 million from Gen X, they are less prosperous than the Boomers they will replace. Forget about building more homes. Aside from the glut of existing homes, there will be plenty of homes available for years to come. The housing sector will not be coming back for at least another decade. To bet on that horse is sheer folly.

    You recall history well and that skill is an admirable trait. But it should not be confused with critical thinking or analysis. Reciting the conquests of history is a valuable skill for bean counting and mechanical implementation of ideas and policy, that which is taught in the majority of our Universities. Sadly, today's education values this task driven approach more than critical analysis because in the proper environment, it works. However, despite the penchant toward repeating the mantras from the past, from which most Krugman types and left leaning politicians and economist suffer, your diagnosis of a suffering jobs market describes a symptom not the cause of our problem. Sadly, your intervention for this disease is useless. Creating more credit is akin to giving a diabetic more sugar. Doughnuts anyone?
    Nov 7, 2011. 10:47 AM | Likes Like |Link to Comment
  • The Inflation Monster Is Tame  [View article]
    Recency bias, favoring events with which we have recent experience, is preventing many from viewing the current inflation-deflation debate more clearly. Our most recent experience of the dollar crashing and gold rising was when Carter was president. Viewing today's events through that prism is akin to driving through the rear view mirror instead of looking through the windshield. For example, the recently released Federal Reserve Z.1 Flow of Funds Report that measures debt held by different groups revealed Total Household Debt fell to $13.358 trillion which is down $200 billion since 2009, and is down $445 billion from the top which occurred in 2007. The mainstream media cheerleaders are claiming this data is a sign of improvement, proclaiming that lower levels of indebtedness give consumers the motivation to increase spending. Hmmm. No mention of debt reduction and the relationship to foreclosures, write-offs, and consumers spending their savings to pay down debt. If you choose to believe that the consumer is ready to ramp up their levels of debt based on this Fed report, you have learned nothing since 2007. Where would consumers find collateral for this new debt? Certainly not from home equity! Reductions in debt are part of the de-leveraging credit contraction that is occurring with the consumer, and with companies that are repairing their balance sheets. These events are deflationary.

    Credit outstanding in the financial sector contracted which is also a sign of deflation. When credit contracts, there are less funds available to spend (consumers) and invest (companies). This contraction is also deflationary. If we combine the household contraction and the financial credit contraction, the total is approximately $3.4 trillion, which is greater than the Fed has printed. Again, these incidents are deflationary.
    Mar 12, 2011. 10:39 AM | Likes Like |Link to Comment
  • The Inflation Monster Is Tame  [View article]
    Different views are an assault on those that live with confirmation bias, the majority of those that have offered comments above. Another deflationary influence that was omitted from this post is the demographic deflationary train that is rumbling our way. The boomers that drank the other Kool aide myths, stocks return 8% and real estate always goes up, have had a large portion of their net worth eliminated. This fact compounds the demographic facts that the boomers are exiting peak earning and spending years and rapidly entering their saving years. The more people save, the less they spend, which leads to lower demand which leads to lower prices, which is.......Deflationary.
    Mar 11, 2011. 11:48 AM | Likes Like |Link to Comment