For this is the reference. That has been an unanswered question for me. It was well documented people were funding the "stay afloat" to survive by tapping into their new evaluations with massive home equity loans. I hear little mention of those, say where the home is paid off or a much older mortgage and so on. How does that play in this debacle?
The chart is technically correct, but it seems that some of those mortgage contracts will reset earlier if the home "owner" goes deeply into a negative equity position first.
For instance, many of those ARMs, which are supposed to reset 5-7 years after creation, allow negative amortization up to 110% or 125%. Millions of those home "owners" are only paying the minimum, and are thus losing equity by the day. With falling home prices they are running up against the negative equity limit sooner than expected.
I will eliminate capital gains taxes for the small businesses and the start-ups that will create the high-wage, high-tech jobs of tomorrow
Ya all, I mentioned this previously but unless someone else can explain something to me, this reeks like a glory hole for hedge funds.
Why, when startups need capital, they are not publicly traded and private do they need no capital gains tax?
They do not even go IPO sometimes for years because they are absorbing capital and building up a business.
One of the huge frauds of the dot con era was hype and fiction as well as an insider game in the IPO offering.
Is this just for corporate entities and not for the individuals and founders who started the company and were compensated with options? What about the alt. minimum tax?
1. Magically every hedge fund and private equity firm is a startup, wala, they pay no capital gains
2. in a traditional startup, there is extensive stock options...so are they saving even in private holdings there is no capital gains? Well, how is that going to keep private equity and VCs from plain trading these like baseball cards and what about the actual profits
beyond creating fictional businesses, labeling them startups and trading worthless options like baseball cards?
This sounds like it can make the Dot Con era look like legitimate business dealings.
This is incredible. This is government? We're having dueling public relations wars in this theater of campaigns. We have the rock star blast for accepting the nomination to rule lead the nation and now we have immediate ads inserted placed on the TV coverage by the other side, along with denials promises to not rain on their parade while promoting leaks speculation, carefully timed repressed on the VP pick.
as I recall the ARM reset waves of the financial tsunami are the 1st wave was a majority percentage subprime and wave 2 is prime. What is the 3rd wave?
HOPE NOW’s monthly data shows that during July, foreclosures were initiated on 105,000 prime borrowers and 92,000 subprime borrowers. Prime foreclosure starts in July were well more than double the 51,000 recorded one year earlier, and up almost 10 percent from June; in comparison, subprime foreclosure starts in July were up 22 percent from one ago, and up 10 percent month-over-month as well.
“It’s easy for lawmakers to paint a picture of poor borrowers taken advantage of by big, bad lenders,” said one source, a bank executive that asked not to be named. “But that story falls apart when you start to see even those higher up the credit ladder struggle.”
[...]
Why this is likely to be the case lies in surging use of repayment plans by servicers dealing with prime borrowers — HOPE NOW’s data shows that 57,822 troubled prime borrowers received a repayment plan in July, equal to 72.3 percent of all workouts completed during the month. In comparison, just 48 percent of troubled subprime borrowers were placed into similar repayment plans, with servicers favoring loan modifications instead.
A similar reliance on repayment plans earlier on in the subprime credit cycle has proven to be at best a mixed blessing for investors, as HW covered in early January. On July 16, Moody’s Investors Service noted that 42 percent of subprime adjustable-rate mortgages modified during the first half of 2007 had become 90 or more days delinquent by the end of March 2008. That number was well north of 50 percent when looking at previously-modified loans 60 or more days delinquent.
Which means that a loss mitgation department’s heavy reliance on repayment plans for prime borrowers — either to keep roll rates acceptable, or because resources are being applied more directly towards subprime borrowers — could be setting up some servicers, and their investors, for a nasty surprise not too far down the road.
I completely missed that. Great, we increase GDP because Americans are getting more squeezed.
Ya know I missed that because when I went looking for details, maybe I didn't look enough or it was BC (before coffee) but I saw nothing attributing to inflation!
I think a great blog post would be the history of corporate tax cuts and how they failed to generate and keep jobs in the United States.
Both parties right now are pushing corporate tax cuts and incentives. Knowing the details, the history would be a damn good wake up call here.
Now I believe, done right tax incentives can be used but my impression is the history US corporations take these things and then do whatever the hell they want to.
If you know the details, specifics, can cite with credible references, cause/effect, that would be a damn useful post.
If they co-opt what you say, you must be having an impact. Nothing we say here goes unwatched by web search agents. So when Big Three ask for subsidies, they were watching what we said. Centerist economic populism is very close to the heart of things in the national debate. The Center itself in U.S. politics is moving towards populism, but it will take time and this is difficult to show except by noting the increasing irrelevance of the 2 Parties and the decisive nature of the Independent vote.
Libertarians forget a great deal of history. Canals were built by the Washington Administration. Railroads got free land grants from the U.S. Not one dime for those subsidies. So, there is nothing wrong with an asset financed subsidy (loans, investment tax credits) tied to domestic manufacturing. Manufacturing subsidies now can be tailored to be the same as the Railroad or Canal subsidies. The Plant and Equipment assets must stay in the U.S. and to hell with any more off-shoring. Otherwise, we should oppose any help to the Big 3.
Big 3 will try to get no-strings loans, then move plants to China and India. Remember the 1986 TEFRA law. Corporate America begged and Congress gave, corporate tax rate cuts. 1986 TEFRA Committee Reports said that this will help keep technology and other jobs in the U.S. As soon as Corporate America got its rate cuts, plants were moved offshore.
Sucker! Reagan and his new foot soldier, McCain were very successful.
Roll forward to today and Phil Gramm and Carly Fiorina are spouting the same tired 1986 TEFRA argument. "Make corporate rate cuts and jobs will stay in America". We are ready this time and same big Con is not going to work twice on their mark: voters.
While they invest billions in new manufacturing and R&D in China and India....
uh, right o.
That's the issue here, they are selling Buicks (considered very cool in China) and cars with less pollution standards than in the US in both of these nations, claiming to capture the market. The thing is, they are selling Aeros in China for $1100 USD. So, ok, now great, they lost $15.5B in a single quarter and now want to expand investment in India, China all the while demanding $50B of US taxpayer money to bail them out.
In a way, this is hardly surprising, US auto makers have been aggressively offshoring US jobs for decades. This article does go to disprove those silly articles about the fuel crunch bringing manufacturing jobs back the USA.
This also goes to disprove the even sillier notion that government subsidies, tax breaks, bailouts, ect. actually create, or keep, jobs for US citizens. Remember what happened with the US airlines after 9/11? The government gave the airlines billions so that the airlines would not have to layoff US workers. The airlines took the money, gave the execs big bonuses, and fired the workers anyway.
So now GM wants a government bailout, and this is supposed to save jobs, or create jobs, for who exactly?
It's also interesting to note that IBM is HQ'd in New York and many, many of the remaining jobs being offshored are/were also in NY.
So, in a major media/financial center of the world, the press and Democrat politicians have been largely silent on this? I recall that Sen. H. Clinton is a senator from NY but has anyone seen a single press account of her discussing the IBM offshoring? Has Sen. "anti-NAFTA" denounced the offshore outsourcing of American IBM jobs to India?
The "free" trade and "free" marketeer crowd are simply employing the same old tactics used by the right wingers - if your argument can't stand on its own merits - resort to name calling and personal attacks.
As the evidence continues to mount of the failures and fallacies of this idealogy their arguments get weaker and weaker - little wonder they are now stooping to name calling
This is Alan Blinder's research. I have it listed in the Studies page (which I'm having a hard time linking up due to we're running out of real estate on the site).
In this page I'm trying to list landmark studies/breakthrough research that is considered highly accurate by their colleagues.
Blinder's study is damning and he is also not a fringe economist in any way so this is one example of breakthrough research.
BTW: If Anyone wants to recommend a landmark/breakthrough economics paper/study please let me know...no fuzzy math papers, let's avoid the "political" papers to research some conclusion, corporate sponsored papers...ones where the statistics, the mathematics, the objective accuracy are thorough and it really stands up.
Okay, let's try and do some math, and remember some history, and demographics.
* The USA has about 5% of the world's population.
* India and China have about 40% of the world's population, and those nations are graduating about 12X as many tech degrees as the USA. And this is to say nothing of Eastern Europe, South America, Africa, etc.
* Offshore workers are much cheaper than US workers - and there are way more than enough cheap offshore workers.
* I would estimate that 75% of US jobs could be either offshored, or done by foreign guest workers, but I will conservatively estimate 50% - just to be more than fair.
So let's offshore every possible job, and thereby save as much money as possible. That would cause a 50% unemployment rate, which I believe is about twice the unemployment rate that the USA endured at the peak of the great depression. Add that to the USA's already beleaguered economy, 9.4 trillion dollar debt, etc. And there is only one logical conclusion: a complete and total economic collapse, the end of the USA as we have come to know it, we would all be dirt poor, from now on.
BTW: I had to do a double-take when the professor essentially said: "oh sure it would cost some jobs, but we would get stuff cheaper so it's more than worth it." It reminded me of Homer Simpson arguing that "the 55 mph speed may saves lives, but millions of people will be late!"
I would rather pay $30 for a toaster than $40, all other things being equal. But, if it's between paying a $10 more for that toaster, or losing my livelihood - well, isn't that a no-brainer?
uh, doesn't texting make a huge amount of money for cell phone companies?
For this is the reference. That has been an unanswered question for me. It was well documented people were funding the "stay afloat" to survive by tapping into their new evaluations with massive home equity loans. I hear little mention of those, say where the home is paid off or a much older mortgage and so on. How does that play in this debacle?
The chart is technically correct, but it seems that some of those mortgage contracts will reset earlier if the home "owner" goes deeply into a negative equity position first.
For instance, many of those ARMs, which are supposed to reset 5-7 years after creation, allow negative amortization up to 110% or 125%. Millions of those home "owners" are only paying the minimum, and are thus losing equity by the day. With falling home prices they are running up against the negative equity limit sooner than expected.
Ya all, I mentioned this previously but unless someone else can explain something to me, this reeks like a glory hole for hedge funds.
Why, when startups need capital, they are not publicly traded and private do they need no capital gains tax?
They do not even go IPO sometimes for years because they are absorbing capital and building up a business.
One of the huge frauds of the dot con era was hype and fiction as well as an insider game in the IPO offering.
Is this just for corporate entities and not for the individuals and founders who started the company and were compensated with options? What about the alt. minimum tax?
1. Magically every hedge fund and private equity firm is a startup, wala, they pay no capital gains
2. in a traditional startup, there is extensive stock options...so are they saving even in private holdings there is no capital gains? Well, how is that going to keep private equity and VCs from plain trading these like baseball cards and what about the actual profits
beyond creating fictional businesses, labeling them startups and trading worthless options like baseball cards?
This sounds like it can make the Dot Con era look like legitimate business dealings.
This is incredible. This is government? We're having dueling public relations wars in this theater of campaigns. We have the rock star blast for accepting the nomination to
rule lead the nation and now we have immediate adsinserted placed on the TV coverage by the other side, along withdenials promises to not rain on their parade while promotingleaksspeculation, carefullytimedrepressed on the VP pick.as I recall the ARM reset waves of the financial tsunami are the 1st wave was a majority percentage subprime and wave 2 is prime. What is the 3rd wave?
Arm Reset Schedule (click to enlarge)
Now it's a general mortgage crisis.
I completely missed that. Great, we increase GDP because Americans are getting more squeezed.
Ya know I missed that because when I went looking for details, maybe I didn't look enough or it was BC (before coffee) but I saw nothing attributing to inflation!
I think a great blog post would be the history of corporate tax cuts and how they failed to generate and keep jobs in the United States.
Both parties right now are pushing corporate tax cuts and incentives. Knowing the details, the history would be a damn good wake up call here.
Now I believe, done right tax incentives can be used but my impression is the history US corporations take these things and then do whatever the hell they want to.
If you know the details, specifics, can cite with credible references, cause/effect, that would be a damn useful post.
The GDP deflator was only 1.2% in the 2nd quarter. That's less than even the cope CPI rate.
It's a joke, and not a good one.
If they co-opt what you say, you must be having an impact. Nothing we say here goes unwatched by web search agents. So when Big Three ask for subsidies, they were watching what we said. Centerist economic populism is very close to the heart of things in the national debate. The Center itself in U.S. politics is moving towards populism, but it will take time and this is difficult to show except by noting the increasing irrelevance of the 2 Parties and the decisive nature of the Independent vote.
Libertarians forget a great deal of history. Canals were built by the Washington Administration. Railroads got free land grants from the U.S. Not one dime for those subsidies. So, there is nothing wrong with an asset financed subsidy (loans, investment tax credits) tied to domestic manufacturing. Manufacturing subsidies now can be tailored to be the same as the Railroad or Canal subsidies. The Plant and Equipment assets must stay in the U.S. and to hell with any more off-shoring. Otherwise, we should oppose any help to the Big 3.
Big 3 will try to get no-strings loans, then move plants to China and India. Remember the 1986 TEFRA law. Corporate America begged and Congress gave, corporate tax rate cuts. 1986 TEFRA Committee Reports said that this will help keep technology and other jobs in the U.S. As soon as Corporate America got its rate cuts, plants were moved offshore.
Sucker! Reagan and his new foot soldier, McCain were very successful.
Roll forward to today and Phil Gramm and Carly Fiorina are spouting the same tired 1986 TEFRA argument. "Make corporate rate cuts and jobs will stay in America". We are ready this time and same big Con is not going to work twice on their mark: voters.
While they invest billions in new manufacturing and R&D in China and India....
uh, right o.
That's the issue here, they are selling Buicks (considered very cool in China) and cars with less pollution standards than in the US in both of these nations, claiming to capture the market. The thing is, they are selling Aeros in China for $1100 USD. So, ok, now great, they lost $15.5B in a single quarter and now want to expand investment in India, China all the while demanding $50B of US taxpayer money to bail them out.
What's wrong with this picture?
For the sake of clarity, let me mention that GM is not investing in an Indian company, rather GM is building a GM plant in India.
In a way, this is hardly surprising, US auto makers have been aggressively offshoring US jobs for decades. This article does go to disprove those silly articles about the fuel crunch bringing manufacturing jobs back the USA.
This also goes to disprove the even sillier notion that government subsidies, tax breaks, bailouts, ect. actually create, or keep, jobs for US citizens. Remember what happened with the US airlines after 9/11? The government gave the airlines billions so that the airlines would not have to layoff US workers. The airlines took the money, gave the execs big bonuses, and fired the workers anyway.
So now GM wants a government bailout, and this is supposed to save jobs, or create jobs, for who exactly?
They arrested a major news reporter trying to cover a private meeting.
Click on the Kos article too. At least the major blogs who are political Democratic party supporters are writing about what's going on.
That is the real story.
It's also interesting to note that IBM is HQ'd in New York and many, many of the remaining jobs being offshored are/were also in NY.
So, in a major media/financial center of the world, the press and Democrat politicians have been largely silent on this? I recall that Sen. H. Clinton is a senator from NY but has anyone seen a single press account of her discussing the IBM offshoring? Has Sen. "anti-NAFTA" denounced the offshore outsourcing of American IBM jobs to India?
NO!!!
Hypocrites ALL!???!!!
The "free" trade and "free" marketeer crowd are simply employing the same old tactics used by the right wingers - if your argument can't stand on its own merits - resort to name calling and personal attacks.
As the evidence continues to mount of the failures and fallacies of this idealogy their arguments get weaker and weaker - little wonder they are now stooping to name calling
http://firedoglake.com/2008/08/27/the-real-battle-in-denver/
Different sides of the same coin. I don't know how we take this money system down.
I'm watching Bill Speech and I notice there isn't any mention of the financial crisis, the biggest economic implosion of this time.
This is Alan Blinder's research. I have it listed in the Studies page (which I'm having a hard time linking up due to we're running out of real estate on the site).
In this page I'm trying to list landmark studies/breakthrough research that is considered highly accurate by their colleagues.
Blinder's study is damning and he is also not a fringe economist in any way so this is one example of breakthrough research.
I wrote about this in the Emperor Has no Clothes.
BTW: If Anyone wants to recommend a landmark/breakthrough economics paper/study please let me know...no fuzzy math papers, let's avoid the "political" papers to research some conclusion, corporate sponsored papers...ones where the statistics, the mathematics, the objective accuracy are thorough and it really stands up.
Okay, let's try and do some math, and remember some history, and demographics.
* The USA has about 5% of the world's population.
* India and China have about 40% of the world's population, and those nations are graduating about 12X as many tech degrees as the USA. And this is to say nothing of Eastern Europe, South America, Africa, etc.
* Offshore workers are much cheaper than US workers - and there are way more than enough cheap offshore workers.
* I would estimate that 75% of US jobs could be either offshored, or done by foreign guest workers, but I will conservatively estimate 50% - just to be more than fair.
So let's offshore every possible job, and thereby save as much money as possible. That would cause a 50% unemployment rate, which I believe is about twice the unemployment rate that the USA endured at the peak of the great depression. Add that to the USA's already beleaguered economy, 9.4 trillion dollar debt, etc. And there is only one logical conclusion: a complete and total economic collapse, the end of the USA as we have come to know it, we would all be dirt poor, from now on.
BTW: I had to do a double-take when the professor essentially said: "oh sure it would cost some jobs, but we would get stuff cheaper so it's more than worth it." It reminded me of Homer Simpson arguing that "the 55 mph speed may saves lives, but millions of people will be late!"
I would rather pay $30 for a toaster than $40, all other things being equal. But, if it's between paying a $10 more for that toaster, or losing my livelihood - well, isn't that a no-brainer?
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