Posted by: Timothy Ellis (The Tim)

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.

74 responses to “Weekly Open Thread (2013-11-18)”

  1. redmondjp

    Boeing wasting no time; will decide location of 777x production within three months:

    http://www.heraldnet.com/article/20131118/BIZ/711189919/Boeing-says-it-will-make-777-site-choice-within-3-months

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  2. Blurtman

    RE: redmondjp @ 1 – Bullish!

    Rate this comment: Thumb up 1

  3. Macro Investor

    I’m pretty sure the government will step in and make sure Boeing stays, just like they did with the Sonics. Oh, wait…

    Rate this comment: Thumb up 7

  4. softwarengineer

    RE: redmondjp @ 1
    That Leaves the 787 and the 767 Tanker

    Left in Everett? The 787 already has other assembly alternatives outside of Washington State. The Tanker assembly tools moved?

    This is what happens when you remove producibility from manufacturing; IOWs move the manufacturing far away from design engineering. The bottom dollar replaces building on time. They may want to transfer a lot of Seattle engineers with the manufacturing move too?

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  5. Kary L. Krismer

    50 people dead because their pilot was apparently an idiot.

    http://seattletimes.com/html/boeingaerospace/2022288542_apxrussiaplanecrash.html

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  6. Erik

    RE: softwarengineer @ 4
    I wouldn’t doubt it

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  7. ricklind

    JP Morgan hit with $13 Billion fine, no bankers go to jail.

    http://www.latimes.com/business/la-fi-jpmorgan-doj-deal-20131120,0,1814328.story#axzz2lCfMGLH5

    Fel Temp Reparatio

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  8. Kary L. Krismer

    RE: ricklind @ 7 – That’s a civil action, so to go to jail you’d need to tell the judge he looks fat in his robe. And even then it would likely only be 24 hours. ;-)

    I believe there’s still a criminal action outstanding, based on one TV report I saw, and the article you linked.

    I find it a bit odd that part of the money for that particular activity is going to homeowners still in trouble. Ignoring the long delay and not compensating those already foreclosed, yes bundling and selling the bad loans without disclosure would make it easier for consumers to obtain the loans in the first place, but the harm is indirect. I think they should continue the benefit further, and compensate people who bought who are not in trouble, because they probably paid more for their properties. And then there were others, such as maybe car salespeople and autoworkers, who didn’t earn as much money because consumers were borrowing money for houses instead of cars. Everyone should be compensated by the bank because everyone was probably hurt in some way. But there should be a limit–I would suggest to claim the funds you would need to prove you are within “Six Degrees of JP Morgan.”

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  9. Blurtman

    RE: ricklind @ 7 – Here is the story as reported by the WSJ. Note their take on the headline. Imagine reporting “John Dillinger Haunted by a Decision on Unauthorized Cash Withdrawals.” Imagine Dillinger negotiating returning a portion of the stolen money in a civil settlement. Eric “Place” Holder’s comments in the WSJ story are even more troubling, and representative of a purchased government official.

    J.P. Morgan Is Haunted by a 2006 Decision on Mortgages

    http://online.wsj.com/news/articles/SB10001424052702303755504579208350707595282

    Kary continues his red herring argument that this is a civil judgment. “Look over here.” Odd that so many banks would reach multi-billion dollar civil settlements, when there was no evidence of fraud. Odder yet that is was individuals who committed fraud, and yet individuals are not held accountable.

    The 1 trillion pound elephant in the room is why there are no criminal charges, in spite of admitted wrong doing? Why cannot the DOJ even bring criminal charges against admitted drug money launderers?

    It does not escape most Americans that you can do life for selling illegal drugs for the Mexican cartels, but you can evade justice if you launder the drug money for the cartels. This has a profound corrosive affect on the average citizen’s view of this country.

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  10. Kary L. Krismer

    Apparently I’m not the only one who doesn’t want to work for Microsoft!

    http://www.reuters.com/article/2013/11/20/us-china-protest-idUSBRE9AJ0LC20131120

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  11. Kary L. Krismer

    RE: Blurtman @ 9 – There is a criminal action pending. Read the article.

    It’s not a red herring argument. You’re not going to get jail time from a civil action. And in any case, I could turn it around on you. Why do you not want there to be civil penalties? It doesn’t have to be one or the other.

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  12. Blurtman

    RE: Kary L. Krismer @ 11 – Yes, great, let’s see more criminal charges, even for non-fraud crimes, such as drug money laundering.

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  13. softwarengineer

    RE: Blurtman @ 12

    I Can Agree With Your Outrage

    I also agree with Kary, that our civil justice system is toothless to prosecute, without the necessary criminal charges our spineless politicians avoid.

    Since we can’t fight city hall, join ‘em. Buy some QE driven stock and try to calm down as long as the market keeps drastically escalating from QE welfare to the rich elite. That’s what I did…..I’ll admit, I had no idea that the QE over the years would boost the stock market this long and this large….then its like the “Gambler” Kenny Rogers song…”know when to pullout”….

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  14. Blake

    An end to US household deleveraging… or maybe not:
    http://www.macrobusiness.com.au/2013/11/an-end-to-us-deleverageing/
    – conclusion – the NY Fed characterised the September quarter as potentially being the turning point in the household deleveraging story. While it is true that deleveraging relative to income has slowed and that household debt in dollar terms rose in the September quarter, it should be clear that the underlying sectoral breakdown of debt gives little support to the idea that the US is about to embark on a new leveraging episode. Rather, what is most likely is that total household debt will remain at or around current levels as student and auto debt and poor labour market outcomes preclude younger households from leveraging up further, and, all the while, existing mortgage borrowers continue to pay down their outstanding balances. As alluded to last week, poor income growth will make this process painfully slow.

    >> The whole piece is worth reading. I was shocked that from 2007 to now student debt doubled to over $1 trillion… while mortgage debt dropped from $9.9t to $8.4. Student loan debt is 1/8th as big as mortgage debt! And auto loans are at highest pt ever…
    And note: “The point to take from this discussion is that the positive impetus to consumption growth from auto loans is of questionable credit quality and therefore susceptible to a sudden shock. Further, there is a non-trivial probability that some of these loans will turn sour in time should macroeconomic conditions remain as challenging as we suspect.”

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  15. pfft

    seaonsally adjusted inflation fell. yikes.

    Earlier today, the BLS reported that the seasonally adjusted CPI for all urban consumers fell 0.1%

    Read more at http://www.calculatedriskblog.com/2013/11/key-measures-shows-low-inflation-in.html#uC2rYhxYTXWefwW7.99

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  16. Macro Investor

    By pfft @ 15:

    seaonsally adjusted inflation fell. yikes.

    When you buy something, offer to pay more than the posted price. There — you can breathe a sigh of relief now.

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  17. softwarengineer

    RE: Blake @ 14

    So True

    I was going to reply back to the SB blogger who alleged low income non-union jobs aren’t so bad, you can still buy SUVs on like 6 year 0% loans….but didn’t bother.

    Every dollar ya pay on student and car loans [2nd mortgages too] reduces your monthly mortgage loan qualification. Its especially bad if your credit rating isn’t in the 700s.

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  18. softwarengineer

    RE: Macro Investor @ 16

    Perhaps Pfft is Going to be One of Those Cold/Tired Folks Camped Out at the Walmart Door to Grab Up the 32″ LCDs for $98 on Black Friday?

    But this bogus inflation allegation excludes the $5/lb bacon, $4/box cereal, $3/lb tomatos, $4/lb fatty hamburger, etc….1/2 of the households are spending like half their net pay for groceries on [the other half goes for the high Seattle rent?].

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  19. Kary L. Krismer

    More on that Snohomish County occupancy permit without paying builder fees issue:

    http://seattletimes.com/html/localnews/2022301494_snohomishhomesxml.html

    Note is says some title companies did pay. I wonder if it’s different levels of coverage (owner’s vs. homeowner’s policy) or just different company positions?

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  20. Dirty Renter in Banjo Country

    Tonight @ 7p, the Michael Mastro story will be on CNBC’s American Greed.

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  21. Kary L. Krismer

    RE: softwarengineer @ 18 – When you combine: (1) More Americans getting food stamps; and (2) Using food to create Ethanol you will get higher prices at the grocery store, all other things being equal. More demand and less supply equals higher prices.

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  22. Kary L. Krismer

    I wonder how the loss of one of these Boeing cargo planes, used to move 787 parts, would impact production, and how long it would take to make a new one?

    http://www.cnn.com/2013/11/21/travel/kansas-cargo-plane-wrong-airport/

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  23. wreckingbull

    Wow, Kary is back! Welcome. Been busy and have not checked in for a while. I just wanted to check in and see if all of you heard the sad news about David? I’d imagine corndogs feels like a real a-hole, but then again, that is probably how he feels every day, so I am sure he is fine.

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  24. Kary L. Krismer

    RE: Dirty Renter in Banjo Country @ 20 – Thanks. I’ll watch that just to see if anyone I know is in it.

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  25. Blake

    Actually…a little inflation woudl be good – - especially for us debtors!
    Deflation is very dangerous and difficult to root out…
    http://www.bloomberg.com/news/2013-11-13/central-banks-risk-asset-bubbles-in-battle-with-deflation-danger.html

    While declining costs for everything from gasoline to coffee can be good news for consumers, disinflation makes it harder for borrowers to pay off debts and businesses to boost profits. The greater danger comes when disinflation turns into deflation, which leads households to delay purchases in anticipation of even lower prices and companies to postpone investment and hiring as demand for their products dries up.

    “There is definitely a whiff of disinflation again taking hold globally,” Robert Sinche, global strategist at Pierpont Securities Holdings LLC

    Federal Reserve Chairman Ben S. Bernanke and his central-bank counterparts are trying to avert the deflationary danger by pumping up their economies with lower interest rates and monetary stimulus. They have bet the run-up in stock and home prices they’ve engineered would boost consumer and corporate confidence and spur faster growth and higher inflation. Now they’re having to maintain or intensify their aid — running the risk those efforts do more harm than good by boosting equity and property prices to unsustainable levels.

    “You have a wall of liquidity” that’s “leading to asset inflation and eventually to bubbles,” Nouriel Roubini, chairman of Roubini Global Economics LLC.

    “We have seen, in the last months, deflationary tensions building up,” Laurent Freixe, executive vice president of Nestle SA, the world’s biggest food company, said in an Oct. 17 conference call. “There is no growth in the marketplace, so everyone is fighting for a share of a shrinking pie.”

    The European Central Bank surprised investors last week when it unexpectedly halved its benchmark rate to a record low 0.25 percent to combat what President Mario Draghi called “a prolonged period of low inflation.”

    Helped by the Fed’s loose money, the Dow Jones Industrial Average (INDU) will rise to 18,000 in the next year or two, said Allen Sinai, chief executive officer of Decision Economics Inc. in New York. The gauge climbed to a record 15,783 on Nov. 11. “I’ve never seen a central bank that has been so open” to a rising stock market, he said.
    ..
    The region most at risk is the 17-nation euro area, where banks are deleveraging and wages are falling in nations including Spain. The ECB already is turning more aggressive after inflation slumped to a four-year low of 0.7 percent in October, less than half its target of just below 2 percent. Prices may not pick up any time soon, Draghi has warned. Unemployment is a record 12.2 percent, and the European Commission said last week it anticipates growth of just 1.1 percent in 2014.

    “Deflation is not imminent, but it has to be on the mind of central bankers,” ECB Governing Council member Ewald Nowotny said yesterday in Vienna.

    The central bank still needs to do more because “a ‘Japanification’ of the euro area is a clear and present danger,” Joachim Fels, co-chief global economist at Morgan Stanley in London, said in a Nov. 10 report to clients.

    Avoiding that fate may be hard. While Draghi has raised the possibility of charging banks to park cash at the ECB, colleagues have warned a negative deposit rate could hurt banks’ profitability and make them even less willing to lend.

    And yesterday:
    http://www.telegraph.co.uk/finance/financialcrisis/10463513/Euro-plummets-as-ECB-mulls-negative-deposit-rate.html
    http://www.bloomberg.com/news/2013-11-19/nikkei-futures-gain-on-weak-yen-after-u-s-stocks-retreat.html
    -snip- “European Central Bank policy makers would reduce the rate for commercial lenders who park excess cash at the bank to minus 0.1 percent from zero, said people familiar with knowledge of the debate who asked not to be identified because the talks aren’t public. A negative ECB deposit rate is “one of last quivers they can draw from for weapons to combat sluggish economic growth…”

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  26. softwarengineer

    RE: Kary L. Krismer @ 21
    Yes Kary

    I blame the recent foreign control of our farms for this ethanol BS. It takes more oil to make ethanol than just use pure gasoline. Then the livestock grain sky-rockets in price, so does meat….shortage of corn. The foreign farm co-ops are smiling now. Then these same foreign controlled farms are screaming for more illegal slave labor into America to overcharge us at the grocery store anyway….its totally out of control. Our paid off politicians do nothing.

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  27. softwarengineer

    RE: softwarengineer @ 26
    We also lose 30% of of our auto’s gas mpgs using ethanol too.

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  28. Erik

    Inventory is below 4000 today in king county!!! Hooray!

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  29. Blake

    RE: softwarengineer @ 26 – “I blame the recent foreign control of our farms for this ethanol BS.”
    Ethanol is horrible – - drives up food prices, forces marginal land into production, uneconomical, and ruins car engines… but it is not a foreign problem. It was created by and locked into our Congressional/crony capitalism system and is now almost impossible to root out! There are lots of millionaire farmer’s in the midwest who want to make sure the subisides keep coming… not to mention the big refineries. $$$$$$$$$
    Made in the USA.

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  30. softwarengineer

    RE: Kary L. Krismer @ 22

    The 787 is Mostly Composite Body Panels, the 767 is Mostly Aluminum

    There may be some structural part similarities for aluminum on both, since the 787 needs a metal frame too….but forget about it helping our local economy.

    We basically don’t cut aluminum piece parts in America anymore….its basically all been outsourced out of Seattle anyway.

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  31. Kary L. Krismer

    RE: softwarengineer @ 30 – I’m not sure what any of that has to do with my question, but since asking it I discovered that originally they only wanted 3 “Dreamlifters” and now they have 4, so I assume they could get by with 3 for some period of time.

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  32. pfft

    By Macro Investor @ 16:

    By pfft @ 15:
    seaonsally adjusted inflation fell. yikes.

    When you buy something, offer to pay more than the posted price. There — you can breathe a sigh of relief now.

    deflation is sure working working in southern europe!

    optimal inflation is 2-4%.

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  33. pfft

    By softwarengineer @ 18:

    RE: Macro Investor @ 16
    But this bogus inflation allegation excludes

    no it doesn’t. it includes food.

    please source your allegation that a lot of people are paying half their paycheck for food.

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  34. softwarengineer

    RE: Blake @ 29RE: Blake @ 29

    Its Not Just SWE, Its the WSP Too

    http://wallstreetpit.com/5019-peak-soil-investment-this-quiet-land-grab-is-just-beginning/

    Notice the 2009 chart showing foodstuffs sky-rocketing with the foreigner grabbing up our farmlands, simultaneously….and you’re telling me the foreigners that are controlling more and more of our food aren’t lobbying for ethanol too?

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  35. pfft

    The Dow closed for the first time above 16,000. Socialism what?

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  36. Blake

    RE: softwarengineer @ 34
    SWE: No doubt that foreign money is pouring into US farmland, but it is still a minority by far and I think you reverse cause and effect. Land values and food prices rise not because foreign investors come in, but foreign investors come in because prices are rising and it’s a good investment! And they don’t have to lobby (legally foreign corps can’t – - but they do!) because all the entrenched US ag interests are quite adept at getting what they want! I lived in the upper midwest for 25 years and BigAg gets what they want no matter Dem or Repub…

    btw… SWE: What do you think of this?
    http://www.nakedcapitalism.com/2013/11/bob-goodwin-software-engineering-in-crisis-healthcare-gov-is-just-the-dead-canary.html
    -snip- For all the specific handicaps facing government software, the root cause of the problem is that complexity has overtaken convention. Healthcare.gov is just the dead canary. The ominous point is that while policy makers may have ceded control of their institutions to software, it is no longer obvious to me that even the software engineers have control of the software anymore. It is 1995 all over again for the software industry. And it is bigger this time.
    (btw: I supervise several large and small govt software dev projects… one hugely successful, the others struggling. I try to limit complexity and design changes, but… it always happnes!)

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  37. Blake

    By pfft @ 35:

    The Dow closed for the first time above 16,000. Socialism what?

    pft… No surprise there’s been an ongoign Wall Street party since ’09… Obama’s been the Wall Street bankers’ boy ever since Bob Rubin and others picked him to give the opening speech for their Hamilton Project in 2006:
    http://my.firedoglake.com/fflambeau/2009/12/07/obamas-smoking-gun-his-hamilton-project-speech-shows-his-links-to-goldman-entitlement-tuts-part-1/

    back in April 2006 David Sirota noted: “This move today is nothing more than the beginning of a frontal attack by Corporate America on the progressive movement, using the Democratic Party as an all-too-transparent cloak of legitimacy.”
    Obama was their man…

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  38. Blurtman

    RE: Blake @ 37 – It was all over when Obushma appointed Summers and nominated Geithner.

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  39. pfft

    By Blurtman @ 38:

    RE: Blake @ 37 – It was all over when Obushma appointed Summers and nominated Geithner.

    yellen isn’t going to be wall street’s favorite and he did pass financial reform that has saved American’s tens of billions. it’s not everything but it’s not nothing.

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  40. Dirty Renter in Banjo Country

    RE: Kary L. Krismer @ 24
    Well Kary, did you know anyone?
    I think the AmericanGreed programs are must-viewing for everyone. Why….because everyone will, at some time, be approached by family or friends, for loans or with investment schemes.

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  41. Dirty Renter in Banjo Country

    RE: pfft @ 39 -
    Pfft – you just got out-lefted by Blurt & Blake. hahaha

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  42. Blurtman

    RE: Dirty Renter in Banjo Country @ 40 – The show is actually being turned into a course at the Harvard Business School – Investment Banking 101.

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  43. Blurtman

    RE: pfft @ 39 – Yes, new material for “Place” Holder and captured regulators to avoid enforcing. Hooray! Their current acts were getting a bit stale.

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  44. Kary L. Krismer

    RE: Dirty Renter in Banjo Country @ 40 – I know Rigby, the trustee. I was expecting more bankruptcy attorneys, but most the people on the show seemed to be investors/victims. I don’t know the bank’s attorney.

    You’re right about that situation being somewhat common and a program good to see to avoid being hit by friends/family with investment schemes. The facts they gave on this program about Mastro reminded me a bit of a large bankruptcy I worked on. The differences there were that they paid much higher interest (24%) and gave out deeds of trust like candy. At least one title company quit writing policies for a time on any property that debtor had been involved with because it was too difficult to find them all! ;-)

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  45. pfft

    By Dirty Renter in Banjo Country @ 41:

    RE: pfft @ 39 -
    Pfft – you just got out-lefted by Blurt & Blake. hahaha

    no. I have problems with Geithner and not prosecuting wall street too. we shouldn’t act like obama’s done nothing just because he hasn’t done enough. unless you want street cred on zerohedge.

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  46. pfft

    By Blurtman @ 43:

    RE: pfft @ 39 – Yes, new material for “Place” Holder and captured regulators to avoid enforcing. Hooray! Their current acts were getting a bit stale.

    speaking of acts getting stale…

    financial reform has saved tens of billions.

    Card Act Cleared Up Credit Cards’ Hidden Costs
    http://www.nytimes.com/2013/11/08/business/economy/a-credit-card-rule-that-worked-for-consumers.html

    the law is saving American consumers $20.8 billion a year.

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  47. Scotsman

    RE: pfft @ 15

    Thank gawd our soon to be increasing health care costs will drive the inflation number up! We are saved! (along with the millions who didn’t have insurance but now do- assuming they could ever log on. And that the payment structure for the back end ever got built. And….)

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  48. Blake

    By Dirty Renter in Banjo Country @ 41:

    RE: pfft @ 39 -
    Pfft – you just got out-lefted by Blurt & Blake. hahaha

    It’s important to have some clarity about who or what Obama represents. Those of you on the right who think Obama is a lefty have sh*t for brains… been shoveled in there by Faux News and the corproate media for years..
    S’funny… a tea bagger I know well told me 4 years ago “You know, Bill Clinton wasn’t such a bad President!” I replied; “Bob, you right wingers should have noticed that in the 90s… you just wait, cuz you’re gonna love Obama!”
    Obamacare is the right’s model for Medicare and Social Security!
    http://www.salon.com/2013/10/28/what_the_tea_party_misses_if_you_hate_obamacare_youll_really_hate_what_the_right_wants_to_do_to_social_security/

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  49. Blake

    RE: Scotsman @ 47
    O’care’s rising costs might drive up general inflation if these costs didn’t just go into the deep pockets of the Medical Industrial Comlex (MIC) and investors (ie. their savings accounts). Inflation comes from “money velocity” and we’ve seen rising healthcare costs for 20+ years while inflation has been dormant and sinking!
    http://www.oftwominds.com/blogjan13/velocity-deficits01-13.html
    … see all that “inflation” in M2? Me neither…
    No… the MIC has been sucking the life out of our economy for years and the US is crippled by this huge overhang of costs that other countries do not have. Here’s the report JAMA issued this week: Check out Figure 4…
    http://jama.jamanetwork.com/article.aspx?articleID=1769890
    Nat’l health expenditures as % of GDP have risen from less than 8% in 1970 to 18% today! Every car, plane or thing US workers make has that extra “tax” to pay for the outrageous healthcare costs for the workers.

    Reminder: O’care was designed and written by the private health insurance industry (i.e Liz Fowler and friends).
    http://firedoglake.com/2010/03/29/baucus-thanks-wellpoint-vp-liz-fowler-for-writing-health-care-bill/
    http://www.theguardian.com/commentisfree/2012/dec/05/obamacare-fowler-lobbyist-industry1

    …oh, that’s right! It was “socialized medicine!!!””‘ Bwah ha ha ha!!!

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  50. pfft

    By Scotsman @ 47:

    RE: pfft @ 15

    Thank gawd our soon to be increasing health care costs will drive the inflation number up! We are saved!

    um healthcare costs are slowing down. keep up.

    why are you so concerned about costs that have always been increasing. no mention of the tens of millions people w/o insurance and the 40,000 that die due to lack of insurance each year?

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  51. Kary L. Krismer

    By Scotsman @ 47:

    Thank gawd our soon to be increasing health care costs will drive the inflation number up! We are saved!

    I’ve been referring to Obamacare as being inflationary in the healthcare thread, but that’s using the term a bit loosely. Healthcare costs and apparently insurance costs will skyrocket, but the impact on the overall economy is a bit harder to pin down. Since the increased costs will reduce spending in other areas, and since there will be likely a more direct adverse impact on employment, overall spending could drop significantly as Obamacare is fully implemented. Obamacare could even trigger the depression that some were expecting from the mortgage crisis.

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  52. Kary L. Krismer

    RE: pfft @ 50 – Higher insurance costs don’t result in more people being insured. Basic economics. Obamacare will just result in a different group of people being uninsured–those who actually earn a living.

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  53. Scotsman

    RE: Blake @ 49
    If you want to have a serious discussion instead of just my snark that’s fine, but it’s late. so here are three quick points.

    Your first paragraph mixes three points- the MIC, money velocity, and inflation into a stew no one could digest. And what exactly are you claiming Charle’s graphs support? Sounds like stream-of-consciousness talking points to me. Tell me what happens to all that money in the evil investor’s savings accounts. If you really think it’s that simple god help you.

    Second paragraph- since the dollars spent stay in the local economy any growth in healthcare expenditures is more a re-allocation than a tax. The better question is whether such levels of expenditures are the best use of capital. Since we’re more of a service economy now than in the past one could make the argument that there’s no net loss.

    Yes, Obamacare started out as crony capitalism with a nasty twist. It was compromised to serve too many masters. But now that it’s failing, as expected, it seems some sort of bail-out for the insurance cos (more cronyism) will be needed. And the ongoing threat of single payer as the solution to previous government failings and this ever growing embarrassment will lead us closer to socialism. Assuming the democratic party survives 2014/2016. Change we can believe in!

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  54. Kary L. Krismer

    RE: Scotsman @ 53 – I’m not sure why you have the hostility to single-payer. Providing health care would seemingly be a much more basic government function than a lot of the things government is doing which is keeping it from paying for other even more basic government functions.. And done right it wouldn’t need to totally take over the entire healthcare field.

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  55. Blurtman

    RE: Kary L. Krismer @ 54 – Should help US employers, too.

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  56. whatsmyname

    By Scotsman @ 53:

    RE: Blake @ 49

    Second paragraph- since the dollars spent stay in the local economy any growth in healthcare expenditures is more a re-allocation than a tax.

    Why do I want to quibble that the billions sucked off by insurance company part of the MIC do not stay in the local economy? That is to miss the bigger insight to your thinking on pricing changes, to wit; dollars going from poor to rich = re-allocation (neutral at worst), while dollars going rich to poor = re-distribution (bad, bad, bad).

    better question is whether such levels of expenditures are the best use of capital. Since we’re more of a service economy now than in the past one could make the argument that there’s no net loss.

    The better question is whether capital exists to serve humans (don’t want to get hung up in the definition of people), or whether humans exist to serve capital?

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  57. Blurtman

    My favorite foreclosed home: http://www.zillow.com/homedetails/49091908_zpid

    I was going to ask Losh to check out its refurb potential. Guess that will have to wait.

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  58. Scotsman

    RE: Kary L. Krismer @ 54

    Hostility to single payer? You bet- because there isn’t a single example of a single payer system providing the timely and comprehensive service I currently get through private insurance. Why you think that a government that can’t even put together a web site for insurance when given 3 years and over half a trillion dollars is going to do a better job than the private sector astounds me. Single payer is supported largely by people who think they are going to get something for nothing, even though that’s not the case. Look at Canada or Great Britain where everyone says “free healthcare”- but of course it isn’t free at all. the cost is just buried in other taxes and fees, expenses that the bottom half of society doesn’t feel. My greatest political dream is that everyone would be required to write out an old fashioned check every month for the taxes and fees they pay- no more withholding or hidden taxes. Let everyone see what the “free” stuff is costing them. There’d be a revolution within weeks of implementation.

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  59. Scotsman

    RE: whatsmyname @ 56

    Here are some facts about those evil insurance companies- the average ROI (return on investment) for the last several years. They would have made more money (sorry- stolen more from the poor in return for nothing to line the pockets of the rich) if they just bought mutual funds. Thank gawd they took on the risks of running companies that managed to get health care to millions of people- unlike Obamacare which is currently uninsuring ten people for every person who does get insurance.

    Cigna: 3.50%

    United Health Group: 4.56%

    Aetna: 3.64%

    WellCare: 4.08%

    Amerigroup: 3.51%

    Humana 2.56%

    WellPoint: 5.49%

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  60. Scotsman

    RE: whatsmyname @ 56 -

    It’s pretty clear capital serves humans. If you don’t think so say good-bye to 300 years of progress and move back into your sod hut before heading out to hunt for something to eat. I’m sorry if some people made a lot of money- or got control of some of that capital because they were smarter, more industrious, and occasionally a bit more hard-azzed than you or your friends. Seems like a decent trade-off to me.

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  61. Ira Sacharoff

    RE: Scotsman @ 58
    They’re just not asking for the right kind of help:
    http://www.cnbc.com/id/101221123

    Rate this comment: Thumb up 1

  62. Blurtman

    RE: Scotsman @ 60 – You left out accumulation through fraud, murder and land theft.

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  63. Scotsman

    RE: Blurtman @ 62

    Oh please- you get all of those with the full meal deal, whether it’s capitalism, socialism, communism, terrorism, etc…… Part of the cost of living on this planet. Heaven is different- so I’m told. Not sure if it’s streets of gold, 62 virgins, or all the Chunky-Monkey one can eat- but it’s better.

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  64. Scotsman

    RE: Ira Sacharoff @ 61

    Hey- at least his website works! Whoa!

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  65. whatsmyname

    RE: Scotsman @ 60
    Nice dodge. The question was “should”, not “does”. I think capital should serve humans, but the paragraph I was responding to seemed to place primacy on capital for its own sake. Perhaps lack of a good answer is why you needed the distraction of a speculative personal swipe. (and to include my friends?)

    RE: Scotsman @ 59 – So if the American system delivers poorer results at a higher cost than European single payer systems, and even the insurance companies are getting poor returns; this must be a classic example of “malinvestment”, which I know you detest.

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  66. Scotsman

    RE: whatsmyname @ 65

    What? Gazing deeply into shallow ponds. What is capital and where does it come from- there’s your answer. Do men serve men? I’ll take economics for $500 Alex. “What is labor?” Besides the foundation of everything.

    Now about the American system and its poor results. Really? Where would you prefer to be sick, to rely on their pharmaceutical industry, to face the vagaries of political and bureaucratic control? We have the best medicine and healthcare in the world, but….. not everybody has access, and way too many people don’t take care of themselves. It’s another example of a general lack of personal responsibility. Too many are waiting on an incompetent government to fix all that goes sideways in their lives, everything from a lack of effort to a lack of self control.

    American health care has a couple of extra hurdles to overcome. A third of our population is obese. O.B.E.S.E. Fully another third is classified as over weight. That’s four times the levels found in Canada or most of Europe. It kills us in spite of the cutting edge care available. Our “big pharma” invests in the creation of the world’s leading drugs- then for a variety of reasons hits us with the costs and gives the rest of the world a huge break. And finally the whole market is structured as a fractured set of independent monopolies resulting in massive cost overlays and inefficiencies. For a final nail in the coffin, we’ve got the government at multiple levels involved in the regulation (read protectionism) of the major players, everything from building the hospitals to insurance to labor law to the advertising.

    If we ever got a chance to try something closer to a competitive free market I bet it would work. Even basic stuff like selling insurance across state lines, promoting transparent pricing (like the required calorie counts on menus?), training for specialties that don’t require a MD, some tort reform, standardized billing, etc. In short if you put the incentives back in the system to improve care at reduced prices that’s what you’d get. What we have now is the result of corrupted incentives, distorted price signals, and a lot of protectionism. But trust me- more government is never the answer. If the current mess can’t convince you of that nothing will and you’re lost forever.

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  67. Kary L. Krismer

    By Blurtman @ 57:

    My favorite foreclosed home: http://www.zillow.com/homedetails/49091908_zpid

    I was going to ask Losh to check out its refurb potential. Guess that will have to wait.

    If you’re planning on talking real estate after you’re dead, I can only assume you’re planning on going to Hell! ;-)

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  68. Kary L. Krismer

    By Scotsman @ 58:

    RE: Kary L. Krismer @ 54

    Hostility to single payer? You bet- because there isn’t a single example of a single payer system providing the timely and comprehensive service I currently get through private insurance.

    What I was trying to say is single-payer wouldn’t have to take over the existing system. It would be more like Medicare–existing along side the existing system.

    Of course that would require that politicians not lie when they say you can keep your existing insurance, so it’s a total fantasy. /sarc

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  69. Kary L. Krismer

    RE: Scotsman @ 59 – Insurance companies are like the utilities during the California energy crisis. They were blamed by consumers for the situation because they were the entities that the consumers were dealing with.

    Prior to Obamacare, if insurance rates were rising it was largely due to the fact that the prices charged by providers and drug companies were rising, but the insurance company would be blamed while doctors and drug companies were laughing all the way to the bank.

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  70. whatsmyname

    By Scotsman @ 66:

    RE: whatsmyname @ 65

    What? Gazing deeply into shallow ponds. What is capital and where does it come from- there’s your answer. Do men serve men? I’ll take economics for $500 Alex. “What is labor?” Besides the foundation of everything.

    I’m sure this seems deep to you, but as an argument it is high on rhetoric and low on coherence. Your reference to Locke’s view of labor is most appropriate, as he did very well in the slave trade though. If you have an argument, please feel welcome to make it.

    On the medical insurance:

    Firstly, my initial point was the money going to insurance companies does not stay in the community as you claimed. You were wrong on the facts, and shame on me for getting distracted by your straw man, but since we are there now:

    To judge a system that serves hundreds of millions, we must look at its overall effectiveness, not just the effect on me, me, me, me. By your standard, North Korea could be deemed the worlds most accommodating society as based on the experience of Dear Leader (the real one).

    Did you know they have medical tourism in Mexico? Just across the Arizona border are big medical and dental clinics aimed at Americans. Business is big in the winter because a lot of their clientele are very comfortable snowbirds.

    I’ll grant you there’s a lot of anti-consumer protectionism built into the MIC. If you’d like to get rid of that, I’m on board, but isn’t that just the result of clever, hard azzed entrepreneurs you identify with?

    Our system makes rapacious medical prices acceptable for a plurality of our people via an insurance lottery which relies on changes of employment to weed out users of more than minimal insurance. This becomes especially noticeable in periods of large economic disruption. Bottom line; our system is inaccessible to tens of millions of Americans. That’s not success.

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  71. Dirty Renter in Banjo Country

    RE: Blake @ 48
    Simmer down, Karl. No reason for a hissy-fit, nor the name-calling.
    I vote Democratic , oh, about 90% of the time.
    As I’ve said many times, the neo-clowns caused the current mess by foisting Bush upon this great nation, which, in turn, led to the election of an incompetent community organizer.
    We can only hope moderation and sanity, one day, will find its place back into the Whitehouse.

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  72. Scotsman

    RE: whatsmyname @ 70

    Where to start. Of course the money collected by insurance companies comes back into the community. Follow along. I pay a premium to my insurance company, typically a legally chartered sub-company (under the umbrella of a national name) headquartered in my state. That’s where most of the administration of my plan takes place, so those administrators are spending earned income back into their communities. Being highly regulated, health insurance companies pay back over 93% of every premium dollar collected in claims. These claims are paid to local hospitals in the insured’s community. Hence, the dollars paid do indeed come back to the community, either as administrative wages or as benefits/claims paid. In fact, health insurance is barely profitable. If the parent companies didn’t also sell life, home, and supplemental policies they would go broke. It is the long term investment income from non-health policies and required reserves that keeps them alive. And even then the returns are average at best.

    You write well, you have some vocabulary, but your brain is stuck on canned talking points and further constrained by an apparent disinterest in dealing with facts as opposed to propaganda. Take fifteen minutes to listen to this if you haven’t already. It offers some limited insight to the real problems with healthcare, all of which are the result of government meddling and market distortions. I’m sure it will be eye opening for many:

    http://market-ticker.org/cgi-ticker/akcs-www?post=211323

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  73. Blurtman

    “Take fifteen minutes to listen to this if you haven’t already. It offers some limited insight to the real problems with healthcare, all of which are the result of government meddling and market distortions. I’m sure it will be eye opening for many:
    http://market-ticker.org/cgi-ticker/akcs-www?post=211323

    N = 1 qualifies as anecdotal evidence. But this is a bit more real – the Repubs block the Medicare Drug Price Bill. Now we know the Repubs also fellate big business, in this case the pharmaceutical industry, but this extraordinarily hypocritical, even for the Rethugs, as hospital buying groups typically use their might to negotiate lower drug prices.

    http://www.washingtonpost.com/wp-dyn/content/article/2007/04/18/AR2007041802338.html

    Rate this comment: Thumb up 1

  74. whatsmyname

    By Scotsman @ 72:

    RE: whatsmyname @ 70

    You write well, you have some vocabulary, but your brain is stuck on canned talking points and further constrained by an apparent disinterest in dealing with facts as opposed to propaganda. Take fifteen minutes to listen to this if you haven’t already. It offers some limited insight to the real problems with healthcare, all of which are the result of government meddling and market distortions. I’m sure it will be eye opening for many:

    http://market-ticker.org/cgi-ticker/akcs-www?post=211323

    This from the guy who must have graced SB with the phrase “kicking the can down the road” 100 times over the past 6 years.

    Well, I did take fifteen minutes to listen to your video. Then I took another ten so that I could finish it, (I didn’t bother listening to David Stockman a second time). There was some good stuff there. My first response was a question: This is Scotsman’s idea of the best system in the world?

    Let’s look at some particulars:

    Minutes 9 and 10 discuss how both “nonprofit” hospitals and insurance companies are incented to charge ridiculously high prices to create false losses and receive claims repricing payments respectively. I was already familiar with the nonprofit issue. This isn’t regulatory overreach. This is bad law though, and shows need for change quite independent of choice of systemic payment.

    The anecdote about the two doses of $100 Mexican Scorpion medicine turning to $80,000 screams for more regulation. Kind of like usury which also needs to be brought back under control.

    The medical tourism from Canada for joint work is entirely believable, and addresses the fact that some people can and will want better than basic, and any basic medical system will have budgetary constraints, and should prioritize more life threatening issues over less threatening issues. It is an interesting parallel to Americans getting medical and dental work in Mexico. I support the idea of independent providers such as this doctor for that better service for those who want it and can afford it. I’m not a communist, you know.

    Although this doctor worries about Obamacare, he does not take insurance patients already, and shouldn’t really be affected. I will say that this is the first time I have heard an Obamacare opponent complain about the costs of Romneycare. Kudos there.

    Lets now leave the show and deal with a fact that a lot of people seem disinterested in. If we are honest, we all know that the “good” insurance we get (yes, I get it too), and the rates we pay are based on an inconstant employer mandated system that gets those sickies and poor folks out of the potential payment stream to the best of our ability. It’s structural, it’s purposeful. It puts tens of millions at risk, ruins hundreds of thousands, (maybe millions), and likely kills thousands so that you and I can save $50 or $100 per month. That is not an attribute of a great nation.

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