Hoarding is exactly what the government is doing right now by filling the SPR, and frankly it's the best thing that could happen. It drives prices up. High prices encourage demand destruction. They also finance new well development. The hoarded oil gives us a buffer to fall back on once shortages become more prevalent. High prices are what we need in order to adapt to what's coming, and the sooner they happen, the better.
Joined: Apr 13, 2005 Posts: 2727 Location: St.Louis, Mo
Posted: Thu Apr 24, 2008 4:33 pm Post subject: Re: Housing & Economic Collapse - In Progress
I read somewhere that China is adding 9,000 cars per day to the streets. I am not sure about India. But I am sure whatever demand being lost here in the US will be gained in those two countries. It's mind boggling the amount of oil needed to run this planet on a daily basis, yet people want to blame Bush or the greedy oil companies. It's funny listening to talk radio and hearing people reasons and answers for the high prices.
Posted: Thu Apr 24, 2008 4:38 pm Post subject: Re: Housing & Economic Collapse - In Progress
jdmartin wrote:
hironegro wrote:
Food prices are killing me too as well, but when in history have people paid about 18% of their income for food!? We are still producing/consuming cheap food in the west.
Oh I don't disagree with that. Still, when you see food prices jumping 50% in a couple of months on a lot of items not only does it make a dent, it makes for some serious concern as well.
I agree. Not a concern for us westerners yet, but people in developing nations are going to suffer for a long time yet.
Stocks & Bonds don't reflect the economy. A lot companies will be continue making profits because of business in emerging markets and corporate re-structuring in America.
Posted: Thu Apr 24, 2008 4:41 pm Post subject: Re: Housing & Economic Collapse - In Progress
Taxes remitted to the MBS holders for their losses...
Quote:
Fannie, Freddie May Pay Lower Taxes After Rule Change (Update2)
By Ryan J. Donmoyer and Dawn Kopecki
Enlarge Image/Details
April 23 (Bloomberg) -- Fannie Mae, Freddie Mac and other companies suffering as mortgage delinquencies rise won a two-year battle with the IRS yesterday, allowing them to use those losses to reduce their tax burden.
The Internal Revenue Service withdrew proposed regulations that had asserted that mortgage loans are capital assets and any losses from them could be used only to offset capital gains. The agency also said it wouldn't challenge companies that count such losses against ordinary income.
The action also clears the way for Fannie Mae, Freddie Mac and some other holders of defaulted loans ranging from auto lenders to credit card issuers to benefit from Senate-passed tax legislation that would allow companies to apply those losses against previous tax years to get immediate refunds. So far, 70 of the world's biggest banks, securities firms and mortgage companies have taken about $290 billion in asset writedowns and credit losses since the beginning of 2007.
``This is a serious windfall,'' said Christopher Whalen, managing director of Hawthorne, California-based Institutional Risk Analytics. ``Essentially, the Street gets a $290 billion tax shelter they did not have available'' under the earlier IRS position.
...
Bloomberg _________________ “I'm completely in favor of the separation of Church and State. My idea is that these two institutions screw us up enough on their own, so both of them together is certain death.” George Carlin
Joined: Dec 27, 2004 Posts: 11217 Location: Village of Idiots
Posted: Thu Apr 24, 2008 5:22 pm Post subject: Re: Housing & Economic Collapse - In Progress
DAMN those baby boomers!
*kicks self and husband*
DAMN them!
(in the 80s I was in high school and college, and starting my career, busily throwing the poor overboard) _________________ "...powerdown so soft and fluffy you'll think you're living in a pillow..." - jboogy
Posted: Thu Apr 24, 2008 5:45 pm Post subject: Re: Housing & Economic Collapse - In Progress
hironegro wrote:
Here in America lower income people were thrown over-board by the baby boomers back in the 80s. They've been Fark ever since.
And exactly how did the average American baby boomer throw people "overboard"?
You're not going to make friends and influence people with your over generalizing.
mark _________________ "If we lose confidence in the ability and the willingness of the Fed to deal with inflationary pressures and sustain confidence in the dollar, we'll be in trouble." Paul Volcker, May 15, 2008
Posted: Thu Apr 24, 2008 6:07 pm Post subject: Re: Housing & Economic Collapse - In Progress
Quote:
The Federal Reserve's cash loans to commercial banks rose over the past week, a sign of persisting funding strains in money markets.
Loans to commercial banks through the traditional discount window primary credit facility rose $2.89 billion in the week ending yesterday to a daily average of $10.7 billion. Lending to Wall Street dealers fell $2.17 billion in the week ending yesterday to a daily average of $22.6 billion from the previous week.
As of Wednesday, April 23, $18.6 billion of overnight loans through the primary-dealer program were outstanding with Wall Street firms, while commercial banks had $13.5 billion of discount-window loans, the Fed reported.
Quote:
Bear Stearns Borrowing
Bear Stearns had borrowed $32.5 billion from the Fed as of March 21, according to a JPMorgan regulatory filing on April 11. The central bank doesn't disclose who is borrowing from the discount window or other facilities.
Quote:
The Fed's holdings of U.S. Treasury securities were nearly unchanged, rising $29 million for a daily average of $548.7 billion.
The Fed also reported that the M2 money supply fell by $15 billion in the week ended April 14. That left M2 growing at an annual rate of 6.6 percent for the past 52 weeks, above the target of 5 percent the Fed once set for maximum growth. The Fed no longer has a formal target.
The difference between the rate of three-month loans in London relative to the overnight index swap rate, known as the Libor-OIS spread, is 87 basis points. The gap reached 90 basis points on April 21, the widest since Dec. 12.
Quote:
The persistence of banks' need for cash and increase in Libor rates has triggered speculation that the Federal Reserve will increase, for the third time, the amount it loans through its Term Auction Facility, which is known as TAF. The Fed has auctioned a total of $360 billion in temporary funds through TAF since its debut in December. This month, both TAF auctions were for $50 billion each in 28-day loans.
Posted: Thu Apr 24, 2008 7:13 pm Post subject: Re: Housing & Economic Collapse - In Progress
Quote:
Tens of thousands of Californians lost their homes during the first three months of the year as foreclosures soared more than 300 percent across the Bay Area and the state. Many experts expect those numbers to climb higher this year and beyond. "The problem isn't going away anytime soon," said Andrew LePage, an analyst with DataQuick Information Systems. "We're still looking for some sign of a peak in foreclosure activity." Lenders took back 6,579 homes in the nine-county Bay Area during the first quarter, up from 1,493 a year ago and 4,573 in the fourth quarter, according to a report released by DataQuick on Tuesday. Throughout California, 47,171 homes were foreclosed on, up from 11,032 a year ago. The regional and state figures are now at their highest level in more than 15 years.
Quote:
Yale University economist Robert Shiller, pioneer of the widely watched Standard & Poor's/Case-Shiller home price index, said there's a good chance housing prices will fall further than the 30 percent drop in the historic depression of the 1930s. Home prices nationwide already have dropped 15 percent since their peak in 2006, he said.
Quote:
The federal deficit hit an all-time high of $311 billion for the first half of this budget year, reports the Treasury Department, up from $162 billion in the prior year!
Looks like tax revenues are plunging along with housing prices!
Quote:
U.S. home prices rose 0.6% in February from the prior month, the Office of Federal Housing Enterprise Oversight reported Tuesday. For the 12 months ending in February, prices fell 2.4%.
Posted: Thu Apr 24, 2008 7:19 pm Post subject: Re: Housing & Economic Collapse - In Progress
dorlomin wrote:
So basicaly the credit crunch is not over.
Their strategy appears to be to print money and cause inflation until general prices rise high enough to be proportionally equal to the high price of homes and real estate. The benefit of this strategy to the powers that be is that it will maintain their wealth. One of the problem that I notice, however, is that salaries will not adjust upwards as fast as costs (if ever), which will be very painful for Joe Six Pack in the interim.
Joined: Oct 23, 2004 Posts: 5167 Location: New Jersey
Posted: Thu Apr 24, 2008 7:20 pm Post subject: Re: Housing & Economic Collapse - In Progress
dorlomin wrote:
Quote:
The Federal Reserve's cash loans to commercial banks rose over the past week, a sign of persisting funding strains in money markets.
Loans to commercial banks through the traditional discount window primary credit facility rose $2.89 billion in the week ending yesterday to a daily average of $10.7 billion. Lending to Wall Street dealers fell $2.17 billion in the week ending yesterday to a daily average of $22.6 billion from the previous week.
As of Wednesday, April 23, $18.6 billion of overnight loans through the primary-dealer program were outstanding with Wall Street firms, while commercial banks had $13.5 billion of discount-window loans, the Fed reported.
So basicaly the credit crunch is not over.
So not only are banks getting below market loans, but brokers are getting them too.
Basically this is an unvoted interest rate subsidy for two industries, since the Federal Reserve surplus - if any - goes directly to the US Treasury.
As of April 23, the Fed also gave cash - with a very small fee - in exchange for about $176 billion in derivative securities of questionable value. This is another even greater subsidy, but also a very risky step in the event of any more bankruptcies like Bear Stearns. Yes, let's make this clear - BS was bankrupt so shareholders getting $10 were getting $10 more than it was worth through the Fed's $29 billion bailout.
Anyway, the Fed dollar is now 65% backed by loans and various securities and derivatives and only 35% backed by US treasuries.
It's insane to think the dollar will rally in value much in these conditions.
Joined: Jun 13, 2007 Posts: 2951 Location: Minniesotuh
Posted: Thu Apr 24, 2008 7:24 pm Post subject: Re: Housing & Economic Collapse - In Progress
hironegro wrote:
Here in America lower income people were thrown over-board by the baby boomers back in the 80s. They've been Fark ever since.
Try and be specific-HOW were they "overthrown?" They didn't get enough welfare?
hironegro wrote:
Look at the voting patterns and lifestyle choices boomers made.
Oh, pla-leeeze! When one is old enough, one is eligible to vote. If they didn't vote, whose problem is that?
And, since when does one's lifestyle determine the lifestyle of another?
All adults are free to make their own choices-it is up to each person to exercise their right to vote, to support themselves by getting employment, to determine their own lifestyle.
This greedy sense of entitlement, demanding that others make the lives of lower income people responsibility-free, has gotten waaayy out of hand. _________________ "RRrrruuuunnnn!!!" ~Apocalypto
Posted: Thu Apr 24, 2008 7:34 pm Post subject: Re: Housing & Economic Collapse - In Progress
Ferretlover wrote:
hironegro wrote:
Here in America lower income people were thrown over-board by the baby boomers back in the 80s. They've been Fark ever since.
Try and be specific-HOW were they "overthrown?" They didn't get enough welfare?
hironegro wrote:
Look at the voting patterns and lifestyle choices boomers made.
Oh, pla-leeeze! When one is old enough, one is eligible to vote. If they didn't vote, whose problem is that?
And, since when does one's lifestyle determine the lifestyle of another?
All adults are free to make their own choices-it is up to each person to exercise their right to vote, to support themselves by getting employment, to determine their own lifestyle.
This greedy sense of entitlement, demanding that others make the lives of lower income people responsibility-free, has gotten waaayy out of hand.
I can think of a few:
white flight.
Remember the al quade of 80s, welfare queens with cadillacs.
Raging against Hilary's health care reform in the early 90s.
Last edited by hironegro on Thu Apr 24, 2008 7:35 pm; edited 1 time in total
Posted: Thu Apr 24, 2008 8:04 pm Post subject: Re: Housing & Economic Collapse - In Progress
Hironegro,
I try and give everyone a fair shake at presenting themselves, but I believe that your accusation and place of blame is unwarranted. You are falling prey to the dangers of mass generalization, which is a risky tool to use in the best of situations.
But more seriously, your blame may be misplaced as well. Have you thought that local and state governments may be more of a causative factor in the changes of which you speak? Public policy and taxes/subsidies seem to be more of a culprit than you give credit.
Also, this seems to be off-topic. This is tangential ranting.
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