By The Tim on May 26, 2010
Here is your open thread for the mid-week on May 26th, 2010. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.
Be sure to also check out the forums, and get your word in the user-driven discussions there!
Posted in Open Thread | Tagged open_thread
Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.
This is the MOST AMAZING BS I HAVE SEEN THIS WEEK!
http://www.coldwellbanker.com/buyerbonus
Rate this comment:
0 
0
Not sure if this was posted earlier – but patrick.net had this link today to Roubini’s Crisis Economics/Future of Finance talk:
http://www.c-spanvideo.org/program/293525-1?source=patrick.net
Calm voice, depressing message.
Rate this comment:
0 
0
I love the “What does this mean for you?” sidebar at that Coldwell Banker link. Touted as a benefit to sellers — who under this program will be ponying up the $8K themselves — is the ability to “do your part to keep the momentum of the government tax credit going.” Wow. Nice find, Ray.
Rate this comment:
0 
0
Ray look at what New Jersey is trying to do:
The New Jersey Assembly on Thursday voted in favor of a bill that would allocate $100 million in tax credits to buyers who purchase a new or existing home in the Garden State this year.
The bill, A-1678, would give individual home buyers, on a first-come first-serve basis, tax breaks up to $15,000, or 5% of the selling price of the house, whichever is less. The credit would be distributed over a three-year period, starting in 2011. There are no income limits for eligibility.
The bill sets aside three quarters of the $100 million for buyers of newly constructed houses, and 25% for buyers of existing homes. “People will look at this as the last ingredient that goes into their equation that it’s a great time to buy a house,” Joseph Riggs, group president at K Hovnanian, New Jersey’s largest home builder, told the Asbury Park Press.
http://www.builderonline.com/legislation/new-jersey-assembly-approves-2010-tax-credit-for-home-buyers.aspx?source=patrick.net
Gee…. I thought their state was trying to avoid bankruptcy……..
Rate this comment:
0 
0
Hi Everyone,
I’m a longtime reader of Seattle Bubble and a lifelong resident of Seattle. It looks like I will be moving Las Vegas. We’re very excited as it seems that my wife and I will be rewarded for living within our means, renting the last 7 years and waiting out this crazy market.
We are going to be buying a house when we move down to Las Vegas. We have $30,000 saved and plan on buying as big of house as possible within budget on the outskirts of town. We have been researching and have found the area that looks best for what we need. The primary criteria is large house (i work from home, we have 3 kids, and family that visits us), and pool. We will move as far as 45 minutes from the airport to get the most house for our dollar.
Heres my problem. House valuation. Nobody knows what housing is worth down there. Investors are paying cash and getting things much less than buyers with a mortgage. So I’m looking for some resources to help value stuff. Also, there’s a chance that I could put together 100K in cash from family. Should I go that route? If I got the cash, who would I work with? A real estate agent? Bank?
Any and all help is greatly appreciated. Thanks guys!
Rate this comment:
0 
0
Obama Butcher Axes All the Rocket Scientists
Article in part:
“…Projections show that President Obama’s proposed budget for NASA, which would cancel development of new rockets and spacecraft, would cost 23,000 workers their jobs at Kennedy Space Center and outlying areas….”
http://www.employmentspectator.com/2010/02/shuttered-shuttle-program-would-end-23000-jobs/
Even the Constellation Program is cancelled. This is extremely grim news for America and Seattle, considering space R & D in the 60s accounted for almost all the base inventions on product lines used to date.
Rate this comment:
0 
0
softie @ 6
Guess they didn’t have a strong enough union unlike GM. Besides we can use the Russians to launch our secret satellites.
Rate this comment:
0 
0
By Ira Sacharoff @ 13 (May 19):
Good thing I didn’t take that bet. http://www.dinorossi.com/
Rate this comment:
0 
0
There’s something about Rossi that just exudes sliminess. Maybe it’s the real estate industry in him.
Rate this comment:
0 
0
RE: Peter @ 5 –
I would rent for at least a year in Vegas. Look into North Las Vegas in particular.. The last development of Beazer homes up against the Mountain. I have NOT been there for awhile but that was a nice development and very quiet. After a year of looking around you will have a good gauge on whats a smoking deal…
Look into Congress Realty. If they won’t rebate you on the purchase they will forward to someone who will.
Lastly, go to the Bellagio Buffet and tell me what you think. I think its the BEST in the world for Buffet. Instead of waiting in line go to the adjacent poker room and ask for a line-pass. It will get you to the front and you will look like royalty.
Rate this comment:
0 
0
RE: The Tim @ 8 –
I’m pretty unbeatable when it comes to predicting politics. What a home will sell for or what interest rates will be in a month, I’m wrong more often than not, but in politics, if you bet against me you’ll almost always lose.
Rate this comment:
0 
0
RE: ray pepper @ 10 –
I too think the Bellagio buffet is the BEST. Worth a half hour wait to get in; I’ll try your trick next time, thanks. Although my friend who lives in Vegas has made me promise to try a new buffet there, that he says is even better. We’ll see!
I concur that Peter should rent in Vegas for a while. Doubtful that house prices will pop back up during that time. I wouldn’t borrow a penny from family.
Rate this comment:
0 
0
Heh. This kid must be stressed out by the current economic news. . .
http://www.youtube.com/watch?v=p20rxK5IGRo
Rate this comment:
0 
0
RE: Ira Sacharoff @ 11 –
Uh, what about that bet we had about the health insurance reform public option? It was callable the moment Pelosi said she wasn’t adamant, politicalspeak that she was open for business for campaign contributions from health insurers. *I* claim the title of best political forecaster. :)
Rate this comment:
0 
0
By Peter @ 5:
I follow the world markets religiously — about four hours a day. I know what is happening and have known for many years, having predicted all the major market moves well in advance, during this time. Let’s just say that some information sources are much better than others, and it takes time to figure out what these are. The average Joe is absolutely clueless and will defend uneducated, nonpredictive cluelessness to the death — aka, the big American ego.
The US and world economies are getting ready to tank later this year. Expect the US dollar to hyperinflate within the next one to three years. You should be preparing for depression, and riots in the metro areas. Buying the biggest home you can find in a metro area is the exact opposite of what you should be doing. Buy a piece of land you can do some gardening on, and raise some livestock, as you will not be able to afford to eat within two years. Buy away from the city unless you like firing weapons at people trying to loot your home.
Rate this comment:
0 
0
RE: Gruel @ 15 –
Won’t be that bad, I say. There will be Great Depression II, but the investors (e.g. the Chinese elite and teachers’ pensions) will eat most of the losses. People en masse won’t be working 3 jobs until they die, nor will they take up pitchforks. There’s plenty of money and stuff to go around (like 19 million vacant houses). The rich will lose even more if they try to hold on to all of what they’ve essentially stolen so far. They’ll negotiate for pennies on the dollar, like gov’ts are doing now on behalf of investors who lost money in Icelandic banks.
Rate this comment:
0 
0
RE: Gruel @ 15 –
“Expect the US dollar to hyper inflate within the next one to three years”
Good luck with that. We’ve already spent $trillions in stimulus and have had near zero interest rates for years and it’s all we can do to stay even let alone hyper inflate. Collapse/reset will happen long before severe inflation has a chance to take hold.
It’s like trying to start an abandoned car with a weak battery- you run out of cranking power long before the engine has a chance to fire up and over heat.
Rate this comment:
0 
0
RE: Gruel @ 15 –
Dang, I hope that won’t close down the Bellagio Buffet…Depression, Hyperinflation…Rioting…..I better go there soon.
We don’t have to fear. Just keep the faith:
http://www.youtube.com/watch?v=bZWq6k5TA7s&feature=related
Rate this comment:
0 
0
Tim,
This is ripe for some sort of discussion on here. How do you think these tolls will hit the region’s real estate prices? Both the near-term 520 toll and the longer-term more ominous “all freeways”?
http://seattletimes.nwsource.com/html/localnews/2011952287_tolls26m.html
I find so many things wrong with this “plan” it hurts.
Rate this comment:
0 
0
RE: Scotsman @ 17 – Scotsman – Can you explain why you think we will get into the Great Depression era in spite of printing? When will you buy your house? Are you investing in stocks at all?
Rate this comment:
0 
0
Gruel @ 15 said:
“I follow the world markets religiously — about four hours a day. I know what is happening and have known for many years, having predicted all the major market moves well in advance, during this time.”
Can you show us how accurate your predictions were, or are we supposed to just take your word for it?
You mention the clueless average Joe and how he will with futility defend his ” big American ego.
The guy who broadcasts how much he has known for many years, and predicted all the major market moves well in advance? Who is he? Just a selfless egoless humble servant?
Rate this comment:
0 
0
RE: JJG @ 19 –
A good question. My sense is that if they toll one of the floating bridges, they will also toll the other to stop evasion/gridlock.
Tolling the bridges will help work out the kinks of electronic tolling. At that point, our magistrates will have $$ in their eyes and you can expect additional thoroughfares to be tolled thereafter.
As someone who rides the train I welcome user fees for roads. What don’t you like about the plan?
Rate this comment:
0 
0
RE: Scotsman @ 17 – Good analogy. I always think of it as trying to fill a bathtub while the drain is open.
Rate this comment:
0 
0
By Ira Sacharoff @ 21:
Hi Ira — i have posted the proper data to support my predictions many many times in the past. Always the same reaction. Very predictable. People are the same throughout the US — same media brainwashing.
They require significant data validation from human beings just like themselves, yet they require zero (0), nada, zip evidence from authority figures on TV who have absolutely horrible rates of prediction, and who lie repeatedly to the general public. You assume I am wrong but by doing so you automatically assume someone else is correct. What are that person’s qualifications? Would you even bother to examine them in depth in an objective manner?
Until you are willing to do so, it is a complete waste of time for me to post any level of data analysis here. I would have to undo brainwashing spanning 30, 40, or maybe 50+ years. I reach those I can reach, and that is all I can do. Been there, done that — but thanks for the invitation.
I’ve learned to stop throwing extravagant parties for inanimate objects.
Rate this comment:
0 
0
RE: Gruel @ 24 –
*whole head eye-roll*
Rate this comment:
0 
0
RE: Gruel @ 24 –
What total B.S.
Rate this comment:
0 
0
Treasury bills clearly illustrate the market’s view on inflation. Currently the 10 year T-Bill has a 3.18% interest rate and the 10 year inflation indexed T-Bill has a 1.33% interest rate. So the market is pricing in an inflation rate of just under 2% per year.
http://www.federalreserve.gov/releases/h15/update/
If you’re certain of inflation you should get busy exploiting the inefficiency in the market! (e.g. short the regular T-Bill and buy the TIPS) Good luck with that.
Rate this comment:
0 
0
RE: Trigger @ 20 –
Trigger- raw printing is a fantasy solution. The minute they try it the game ends- everyone who has dollars either sells them, collapsing the currency, or seeks higher interest rates to compensate for the falling value of the currency (dollar). Should interest rates jump up, or the currency fall, then the government needs to print even more to pay the ever increasing costs of devaluation/interest. You can never get ahead of the markets and their compensating behavior. Once and a while you might e able to “sneak’ a bit in now and then, but we need a gob to resolve current issues. And that just can’t happen- it’s financial suicide for the country.
It looks like I won’t be buying a house for some time, at least not in Seattle. We are looking in more rural areas, eastern WA and ID
I don’t own any stocks at this time. I am looking into picking up some LEAPS. No short term trading in this heavily manipulated market.
I would like to go for a hike- just waiting for some sun and an opening in my daughter’s schedule to hit on the same day. ;-)
Rate this comment:
0 
0
RE: Gruel @ 15 –
Let me help you with the world market thing, because I follow it about an hour a day.
Once you get outside of the United States markets it’s really murky. Bribery, corruption, war lords, drugs, prostitution, and violence rule the market place. There are no rules, no data, no play fair, let’s be nice. It’s nothing personal, it’s just ….
The Euro was an attempt to reign in corruption. Currency trading can be a dog if you don’t belong to the right club, gamble at the right casino, or know how to forge documents. Europe was a play ground with rules only for the wealthy.
Now if you wanted to talk about skimming pension funds, or knowing which pension fund still had money in it, then you would have data.
Seriously, explain China, Russia, India, or Afghanistan. How about Singapore? Did you really see Dubai? Because everybody did, from the first shovel of sand.
It’s not what you know in the world it’s who you know. Who do you know?
Rate this comment:
0 
0
RE: Scotsman @ 17 –
You may say they can’t do it, but so far, they already have. I think that the FOMC’s response was somewhat measured with purchases of 1.3 trillion in GSE paper and 300 billion in Treasuries. If you check the tape from 15 months ago when the purchasing program was announced, the dollar dropped a couple of percent in a matter of minutes. Deflation as measured by CPI from Q4 of 2008 or Q1 of 2009 was stopped dead in its tracks. That may not be the preferred measure, but it’ll do for me. I didn’t think that they could be that accurate at targeting low inflation with open market operations and I still think it was luck. So far they’ve done it and they can resume purchaseing again if need be. But that was the past. As to tomorrow, we’ll see.
As to hyper-inflation, that’s not what the FOMC had in mind either and it doesn’t look likely. First, they don’t want to purchase more GSE’s or Treasuries. And second, with the current level of unemployment and the debt problems in Europe, they can buy a lot of paper before they tank the Dollar.
The remaining issue is whether this administration can and will rein in spending and debt. If they do that they’ve got a chance to run the table. As we all know, not many Dems have been credited with cutting spending so it would seem unlikely. But then again, maybe the Big Bama will get some help from a new mix in congress to do that after November. Once again, we’ll see.
Rate this comment:
0 
0
RE: One Eyed Man @ 30 –
“they’ve done it and they can resume purchasing again if need be.”
Really? I seriously doubt it- they are out of ammo thanks to budgetary and balance sheet restrictions. As for your last two paragraphs, I sense an internal conflict between what you know and what you wish. Best work that out. Hope may spring eternal, but reality and cash flow still win in the end. The facade is coming down.
Rate this comment:
0 
0
RE: Gruel @ 24 –
Just a couple of questions Gruel. First, where’s your wheel barrow? You know, the one you need to carry around those big brass balls you apparently have. ;-) Just a joke so don’t get too offended. But if you don’t think we’re smart enough to learn, why did you post anything here. I can’t promise that I’ll agree with you, or even that I’ll recognize any pearls of wisdom you might lay before me. But I will try to be fair and objective in evaluating what you say.
I can’t speak for anyone else, but for an arrogant prick, I consider myself surprisingly open minded. Probably because much to my embarassment, I’ve been wrong before, not to mention the incredible humiliation I’ve learned to enjoy after being spanked by my spouse. If your up to it, feel free to educate me, but no spankings please. I’m open minded, but I have my limits.
Rate this comment:
0 
0
RE: Scotsman @ 31 –
“they are out of ammo thanks to budgetary and balance sheet restrictions.”
Correct me if I’m wrong, but I thought the only restriction on the FOMC was the amount of outstanding Treasury debt. If 3 or 4 trillion is owed to other government accounts including social security and federal pensions, that leaves another 7 or 8 trillion they can buy (not that they will or course).
Rate this comment:
0 
0
RE: Ira Sacharoff @ 11 – I thought Kary was the one who loved making predictions.
Rate this comment:
0 
0
The problem with the inflation argument is that any money dumped into the system just goes into a black whole of debt, equity debt, or is that, all equity has turned into debt.
People aren’t paying mortgages, businesses are closing, suppliers are losing customers, and any discretionary money should be paid to debt. Banks are holding reserves, and investors are dumping money into cash is king schemes.
Money is truly being lost.
It’s like a giant cloud that is holding the water yet to be trickled down, rained down. Larger, and larger, mega holdings of gigantic billions of dollar business interests are holding onto cash. The governments are asking banks to lend when that’s who has the holdings of the cash reserves.
The most logical solution at this point is to not give banks any more money. Stop paying debt to banks. The more money we give them the more they hoard.
In plain English the federal government, and it looks like governments around the world, are paying because the large cash holding companies refuse to circulate the money supply. Government give cheap money to banks to lend, and the banks want a sure return.
That brings us back to the equity. Banks won’t lend because there is no equity to lend on. No asset equity, a shaky job market, and less interest in lending, so they buy gold, or oil with the reserves. They get more cash, they hoard more reserves.
Rate this comment:
0 
0
get used to this with climate change.
Stunning NOAA map of Tennessee’s 1000-year deluge
15 sites had rainfall exceeding maximum associated with Hurricane Katrina landfall
http://climateprogress.org/2010/05/26/nashville-katrina-tennessee-superstorm-1000-year-flood/
Rate this comment:
0 
0
By David Losh @ 35:
no it doesn’t, it goes into stocks, bonds, commodities, homes or whatever the asset mania de jure is.
Rate this comment:
0 
0
By Scotsman @ 17:
ok GDP growth is staying even? you can’t call that staying even because you’re so bearish. there is no way you thought we’d be where we are. you don’t have the luxury of downplaying this recovery. it is a recovery.
Rate this comment:
0 
0
By Scotsman @ 28:
have you ever studied the 1970s? interest rates lag, that’s why you get inflation. interest rates do move up but they lag inflation, commodities and gold.
Rate this comment:
0 
0
By ray pepper @ 1:
Yes, the seller paid $8,000 incentive doesn’t make much sense. I don’t use it myself. If the seller wants to make his home sell a bit faster, and if it is already looking attractive and is being marketed well, it is usually better just to lower the price a bit. This way it looks more competitively priced.
Rate this comment:
0 
0
RE: One Eyed Man @ 33 –
I see your point- technically they could, but I really think that conventional expectations on how their balance sheet is structured would put a damper on any more significant purchases/expansion. The Fed is still a bank, and although they have access to money others don’t, they can’t just make up the rules as they go along.
But then there’s this- the greatest contraction in the money supply since the 1930s?- so who knows?
http://www.telegraph.co.uk/finance/economics/7769126/US-money-supply-plunges-at-1930s-pace-as-Obama-eyes-fresh-stimulus.html
Rate this comment:
0 
0
RE: David Losh @ 35 –
This can be a bit much at times, but Charles has expanded on some of what you touch on in your post. While he jumps around, there are some great points made, things to ponder, especially near the end:
http://www.oftwominds.com/blogmay10/go-long-deep-broke05-10.html
Rate this comment:
0 
0
RE: pfft @ 39 -
“have you ever studied the 1970s?”
Why yes- in fact I was studying economics in college during the 1970s, and we talked quite a bit about current events- including interest rates I went on to graduate with highest honers in economics and math, even wrote a senior thesis about market psychology verses fundamentals that received the highest possible grade.
What were you doing in the ’70s? ;-)
Rate this comment:
0 
0
RE: Gruel @ 24 –
Nah, I don’t trust the so called “experts” either. I don’t assume anybody is correct.
Rate this comment:
0 
0
RE: Scotsman @ 43 – What were you doing in the ’70s? ;-)
LOL. I distinctly recall walks in the 70′s around my Capitol Hill neighborhood and smelling very strong odors coming from certain houses on a semi-regular basis. In fact, I also recall lots of music too wafting along with those odors: Greatful Dead, Hendrix, Led Zeppelin, Simon and Garfunkel, Fleetwood Mac, etc..
Sometimes it smelled like incense, other times….well I’m not sure some elements of the 70′s remember much. Just saying. :)
Rate this comment:
0 
0
By Brent Fosso @ 40:
There’s a little more to this than knocking $8k off the price. Since it’s a rebate, it’s like knocking $8k off the price AND refunding part of the down payment.
Example: Joe Broke wants to buy a $200,000 house. But woe is Joe, he needs to come up with a 3% ($6,000) down payment. Coldwell’s seller rebate to the rescue! Joe hocks his truck for a $6,000 loan, then gets it back after his house closes and he cashes his $8,000 rebate. Now Joe has his house, his truck, AND $2,000 in the bank!
But, too bad. Joe gets fired the next week. And he already spent his $2,000 on smokes and beer and can’t make his first payment. Oh well, at least he didn’t have any money tied up in the house. Joe lives rent free for 6 months until his foreclosure finalizes, then lives in his truck.
I’m sure my scenario isn’t 100% accurate, but maybe that’s why the Coldwell ad suggests you talk to your bank about the impact this rebate could have on your ability to qualify for financing.
Rate this comment:
0 
0
RE: Herman @ 46 – The $8,000 is a gimmick. That’s why I don’t use it. The standard format of a purchase and sale agreement works best, that is, when the seller makes a contribution to the buyer’s closing costs. This has been used for many years and is often used when a buyer doesn’t have enough cash. This can even be stated in the marketing comments of the listing. But it is better left out, and then addressed if needed in negotiations.
Rate this comment:
0 
0
RE: Brent Fosso @ 47 –
Exactly. The buyer can always ask for the seller to contribute 8000 in closing costs. In the Coldwell Banker program, I suspect that that the listing agents are recommending the prices be 8000 dollars higher, and then “give” it back as a rebate.
Rate this comment:
0 
0
RE: Brent Fosso @ 47 –
Its these types of programs that give Real Estate Agents a bad name for deceptive practices…Look at this:
For Sellers:
Add “prominence” to your listing with an $8,000* incentive, applied at closing, for interested buyers (Okay sellers jack up your price 8k!–you net the same)
Increase exposure on coldwellbanker.com searches (Can you explain this one Brent or Ira?–How will an 8000 seller credit increase my exposure?–Maybe I’m missing something?)
Do “your part” to keep the momentum of the government tax credit going. (Coldwell Banker are you doing your part to keep the momentum going? Surely you cannot ask your client to carry the whole load,,can you?)
I just get so sick of this crap from fellow Agents/Brokerages. Time keeps ticking away on this profession…I can hardly wait till this sham is up..
BTW Ira and Brent. ” I will buy your home in 60 days if it doesn’t sell.” That was a classic as well.
Rate this comment:
0 
0
RE: pfft @ 37 –
“Or is it all equity has turned to debt.”
You’ve probably missed my claims that the stock market see saws the way it does to suck every dime out of day trading. It’s like a casino that gives you winnings, you stay in, until you go home broke. Commodities like gold, oil, corn, and cattle have been one of the biggest losers for those that were looking, or are looking, for a safe haven.
When you throw in homes, or property you really have the perfect example of lost equity.
Bonds I’ll go along with as a savings account.
What I’m really saying is that Institutional Trading, especially bank holdings, are driving the market place. They win, you lose, and they build to hold cash positions. The liquidity is lost, the velocity is lost.
To have inflation you need the money in the market place, you need wheel barrows of cash going down the sidewalk to buy a sandwich. We don’t have that, so governments can print all the money they want, but if you, or I don’t ever see it there’s really no point.
Rate this comment:
0 
0
What I learned on SB today…the world is coming to an end but they can’t decide if it’s due to inflation of deflation.
Oil well….at least it appears the GOM oil leak has been stopped.
99 bottles of beer on the wall, 99 bottles of beer, take 1 down, pass it along, 98…
Rate this comment:
0 
0
RE: Pegasus @ 7 –
Actually The AFL/CIO Supports the NASA Rocket Scientists
A strong union compared to the rest of them, what good it did.
Rate this comment:
0 
0
RE: Scotsman @ 17 –
The Bailout Money’s Going Into a Giant Dry Bad Debt Sponge
That’s why it produces no jobs, causes no inflation and isn’t lent out.
Rate this comment:
0 
0
RE: Trigger @ 20 –
Its Simple to Me
Before, we’d go into debt and borrow more to go into more debt; but there was a big difference back then compared to now…..we had a fishing and logging industry as backup colateral for monthly payments….with overpopulation hitting us now, the fish are gone, the trees are stumps and we’re out of potable water.
Same with Portugal and Greece, they had their fish industries as colateral, now they have nothing.
Rate this comment:
0 
0
By One Eyed Man @ 32:
What I am repeatedly finding is that people in the PNW are relatively “smart” as compared to most Americans. The core issue is that even smart people do not know how to back out of their own paradigm to see it for what it is, so their intelligence is limited by the box they place it in. An individual is only as smart as the container they place themselves in. The container most individuals in the US adopt is a carefully crafted container. To create one’s own containes, based on deep exploration and examination above all else, is when one realizes something beyond mere “smart” has arrived. It’s called “practical.” Some wise individual once said that metaphysics is the basis for all logic.I have arrived at the point where I realize my posts here are generally fruitless. Thank you and have a good life.
Rate this comment:
0 
0
Sweet! Gov “stimulus” actually leads to a reduction in jobs over time:
http://corner.nationalreview.com/post/?q=NDI2ZjliNDExMDM3MjI4ZGE5ZDBhZjUwYTY3YWU2MjU=
“The average state experiences a 40 to 50 percent increase in earmark spending if its senator becomes chair of one of the top-three congressional committees. In the House, the average is around 20 percent.
For broader measures of spending, such as discretionary state-level federal transfers, the increase from being represented by a powerful senator is around 10 percent.
In the year that follows a congressman’s ascendancy, the average firm in his state cuts back capital expenditures by roughly 15 percent.
There is some evidence that firms scale back their employment and experience a decline in sales growth.”
Rate this comment:
0 
0
A second quote/summary from the above article:
Recent research at Harvard Business School began with the premise that as a state’s congressional delegation grew in stature and power in Washington, D.C., local businesses would benefit from the increased federal spending sure to come their way.
It turned out quite the opposite. In fact, professors Lauren Cohen, Joshua Coval, and Christopher Malloy discovered to their surprise that companies experienced lower sales and retrenched by cutting payroll, R&D, and other expenses. Indeed, in the years that followed a congressman’s ascendancy to the chairmanship of a powerful committee, the average firm in his state cut back capital expenditures by roughly 15 percent, according to their working paper, “Do Powerful Politicians Cause Corporate Downsizing?”
http://www.people.hbs.edu/cmalloy/pdffiles/envaloy.pdf
Rate this comment:
0 
0
By Scotsman @ 43:
I wasn’t born for most of the 70s!
are you going to answer the question?
“I went on to graduate with highest honers in economics and math”
you weren’t an english major?
Rate this comment:
0 
0
RE: Gruel @ 55 –
Ah, what ever happened to the noble premise that “to whom much is given, much is expected?” Not willing to put forth the effort to share your exceptional wisdom and elevate all of mankind? Rejecting responsibility for comfort and ease? Hell- in this universe or another, has a special place for such people.
Have a great day!
Rate this comment:
0 
0
By softwarengineer @ 53:
weren’t you just saying the gov’t did produce jobs?
Rate this comment:
0 
0
RE: Gruel @ 24 –
I don’t know why but reading this makes me sing Metallica:
”
You just stood there screaming
Fearing no one was listening to you
They say the empty can rattles the most
The sound of your own voice must soothe you
Hearing only what you want to hear
And knowing only what you’ve heard
You, you’re smothered in tragedy
And you’re out to save the world
…”
Ah now I know what it was: The empty can rattles the most.
But you gave me a good laugh.
Rate this comment:
0 
0
RE: pfft @ 58 – RE: pfft @ 58 –
“you weren’t an english major?”
“What we have here is a failure to communicate.”
Reading is hard, but important. Stick with it, Grasshopper, until you succeed.
Rate this comment:
0 
0
RE: Gruel @ 55 –
You are speaking of transcendence or enlightenment. You are correct you have no business posting here, or being among us. The mere fact that you feel you are above the normal human experience because you have a self awareness that others don’t is laughable. More evolved beings get past themselves, lack of ego is one of the first indicators. You may be able to perceive or anticipate market and economic activities, but that has nothing to do with self awareness. Too bad there is not the equivalent of a world series of poker for self awareness – I would take all of you money, as well as get you on the juice for some payday loans. Creative people have to by nature have more open minds, you certainly aren’t since you spend 4 hours a day following the market. Your an analytical, the furthest thing from an open mind. At any rate women are more evolved beings, I doubt you are one, or have any functional women in you life. Don’t let the door hit you on the way out!
Rate this comment:
0 
0
RE: pfft @ 60 –
Yes Pfft, It Created Some Jobs
Citi’s board is still working, AIG still has CEO too, etc, etc…
Isn’t it funny [not], the ones that created the overpopulation debt mess get to keep their jobs….LOL
Rate this comment:
0 
0
RE: Gruel @ 55 –
Thanks Gruel, and a good life to you too! But just remember, even if the intellectual seeds you plant appear fruitless they may merely be laying dormant before they germinate. I agree that people’s ability to learn is limited by their paradigm. And in America, cultural prejudice is a self reinforcing phenomenon. As a generalization, Americans wallow in their belief that the high level at which they consume the worlds resources proves the superiority of their paradigm.
But American culture also possess a certain disrespect for authority and reverance for independence of thought a la Huckleberry Finn that gives it the potential to adapt and survive in a changing environment. This is a country where just when you think all reasonable hope is lost, they change direction just enough to make you think things might turn out OK.
Rate this comment:
0 
0
Thanks for the feedback guys. I appreciate the feedback regarding renting, however it seems like it makes more sense to buy with how much rent is. I know that there are risks of the market tanking even more but from what I’m seeing and where we are financially I think its the right time. It appears that we can get a home that has a value the same as 10 years ago with a house payment on a 30 year that should be at most 25% of monthly income. Thanks again for the feedback.
Rate this comment:
0 
0
I’m pretty sure that Gruel is the same dude that has been ranting about Agenda 21 under a dozen or so different screen names for a while now.
I highly doubt he’ll stop posting.
Rate this comment:
0 
0
Hey Pfft- have you noticed my new avatar? Clear your cookies if needed and check it out. I know you want it- the Skittle pooping unicorn is every bull’s idea of perfection. So tell ya what- I’ll give it up, just for you. Click and save the pic to your hard drive, then check out the avatar site at gravatar. http://site.gravatar.com/signup After a few clicks you’ll be golden, pooping bull-speak skittles under the rainbow. And I’ll be free to put up something new. Cheers!
Rate this comment:
0 
0
pfft @ 58
“I wasn’t born for most of the 70s!”
Trust me we are all well aware of that, Grasshopper. You and Gruel seem like a good match, being similar enlightened beings.
Rate this comment:
0 
0
looks like reflation friday started early. don’t worry bears I’m buying again!
Rate this comment:
0 
0
By Scotsman @ 62:
you spelled honor wrong math genius.
Rate this comment:
0 
0
I wasn’t for a lot of the measures but they worked. I can’t deny that.
“We’re slowly moving from a policy-driven recovery to a self-sustaining recovery”
O.E.C.D. Sees Risks to Recovery From Europe and Asia
http://www.nytimes.com/2010/05/27/business/global/27oecd.html?ref=global
Rate this comment:
0 
0
RE: pfft @ 71 –
Yup, not even close. Left out a period too, I see. Must have been the excitement of the moment- it’s not often I get to respond to my favorite poster! At least I, ah, managed to capitalize the first letter of each new sentence. Thanks for the correction!
Now, how about that spiffy new avatar? Do you relate/associate more with the unicorn, the rainbow, or the skittles?
Rate this comment:
0 
0
pfft @ 72
Yes, yes Its all good. Not!
If your reciting a known fabrication were really true……why are we now pumping yet another stimulus package to be foisted up the gullible American masses by our complicit CONgress and administration?
“The Obama administration made a strong plea to Congress yesterday to grit its teeth and pass a new set of spending measures – dubbed the “second stimulus” by some economists – in order to help dig the economy “out of a deep valley”.
The call for action, which was made by Lawrence Summers, Barack Obama’s senior economic adviser, who urged Congress to pass up to $200bn (£138.9bn) in spending measures, came at the same time as Mr Obama asked Capitol Hill to grant him powers to cut “unnecessary spending”.
The combined announcements was made amid rising concern that centrist Democrats, or those representing marginal districts, might vote against the spending measures, which include more loans for small businesses, an extension of unemployment insurance and aid to states to prevent hundreds of thousands more teachers from being laid off.
It also comes at a time when last year’s $787bn stimulus is wearing off. Mr Summers argued that it would be a premature move at this stage in the cycle to move to fiscal discipline. “I cannot agree with those who suggest that it somehow threatens the future to provide truly temporary, high-bang-for-the-buck jobs and growth measures,” he said. “Spurring growth, if we can achieve it, is by far the best way to improve our fiscal position.”
Hmmmmm….could they be lying to pfft? It does not sound like any meaningful recovery is underway.
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102×4396645
Rate this comment:
0 
0
By Scotsman @ 73:
you just can’t admit that the economy is recovering despite the global nature and the clear evidence.
Rate this comment:
0 
0
By Pegasus @ 74:
the recovery is happening and it’s global. it’s just not robust enough. they’ve backed out the stimulus and GDP is still growing without it.
Rate this comment:
0 
0
By softwarengineer @ 64:
“One year after the stimulus, several independent macroeconomic firms including Moody’s and IHS Global Insight estimated that the stimulus saved or created 1.6 to 1.8 million jobs and forecasted a total impact of 2.5 million jobs saved by the time the stimulus is completed.”
http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009#Developments_under_the_Act
you have a good point about citi and AIG, but not having those banks go under probably saved hundreds of thousands of jobs. both companies are hobbled compared to their former selves. citi and AIG have sold many units. their stocks fell hard. their market caps are probably a fraction of what they were.
Rate this comment:
0 
0
RE: pfft @ 75 –
“you just can’t admit that the economy is recovering”
No, I can’t. Because unlike many I fully comprehend the impact of compounded exponential interest on debt. Through debt we have pulled far too much consumption forward, leaving little enough for the future. When the future becomes the present there won’t be enough income generated to service said debt. It’s really that simple.
Here’s my bold prediction- less than a year from now, by 6/11, our economy will be in complete turmoil having collapsed to a point where everything is “on the table” for discussion and reform. Make a note of it, and be sure to check back. One or us will surely be humbled.
Rate this comment:
0 
0
RE: Scotsman @ 78 –
Scotsman says:
“Here’s my bold prediction- less than a year from now, by 6/11, our economy will be in complete turmoil having collapsed to a point where everything is “on the table” for discussion and reform. Make a note of it, and be sure to check back. One or us will surely be humbled.”
With all due respect Scotsman, I’d like to give you the opportunity to clarify and perhaps hedge the above statement a little. First, what does “everything on the table” mean that doesn’t already exist. You and others are already talking about the fact you believe our economy crossed the event horizon and is being sucked into the black hole of increasing carry costs. In that respect, its already on the table. If it just means that the country will be seriously talking about reform to pension, entitlements and military spending to avoid future fiscal implosion, I’ve been concerned about those issues for years and I’ve said on the bubble several times that I think the US government should generally do an across the board spending cut including military spending, pensions and entitlements. But that’s different from saying that we aren’t currently in a very slow real growth economy and that we won’t be in a similar condition a year from now.
Second, less than a month ago you wouldn’t bet me whether federal income tax receipts for the next 12 months would be up or down. I know that’s not the same thing as climbing out of the debt hole or having a continuing economic recovery, because they could raise taxes without recovery and they can increase tax revenues without affecting the debt to any great degree. But it is generally incongruous with a statement that economic collapse will be so close that say real GDP will be down say 2% or more in 2011 or that headline unemployment will be over 12% in 2011.
Let’s move from talking trash to talking specific problems and solutions. What specifics do you want on the table and how do you want to fix them? Would you like all current holders of Treasuries to take a 20% haircut as part of the fix? The guy whose military pension I’m suggesting should be cut (including my father and my wifes mother) probably thinks so just like the GM unions thought the bond holders should take a hair cut. Why wait till next year. What do you think we should do?
Rate this comment:
0 
0
By Scotsman @ 78:
Huh? What are you talking about? Where do you see compounded exponential interest on debt?
Rate this comment:
0 
0
RE: Kary L. Krismer @ 80 –
He’s talking about the $12 Trillion Fedral Government debt.
http://useconomy.about.com/od/fiscalpolicy/p/US_Debt.htm
Rate this comment:
0 
0
RE: David Losh @ 81 – Yes, I assumed that. I was responding to the terms “compounded” and “exponential.”
Per that link the debt is now 80% of GDP. If you had a family with debt at 4x their income (e.g. $50,000 of annual income and $200,000 of debt) would you say they had compounded exponential interest?
Rate this comment:
0 
0