Massive fraud, with collusion by banks, real estate salespeople, appraisers, brokers, AND government. If we are to have real reform, let the Fed and the administration take a bite of this fecal sandwich. People seeking a place to live and raise their families were herded like sheep into a marketplace where housing values were exaggerated by collusive practices, and paid $400K for a house that should have sold for perhaps 230K. Take it or rent forever.
Their bite of this sandwich should be a write-down of mortgages -- a shared haircut with the homeowner, the Fed and the GSEs. What do the banks get? A 20% down payment requirement on new mortgages and a recomputation of principal amount on existing mortgages they hold. Otherwise, let the existing mortgages be subject to a one-time mark-to-market and require the banks to come up with capital, just as you would in a margin call. An alternative might be Federal Home Reninance Trust with original mortgages put back to originator and families keeping their homes based on a new mark-to-market principal.
Or we could send those who dealt this mess to jail for fraud.
Anyone notice the second worse detraction from Q4 GDP was the reduction in state and local government investment and expenditures?
So, in other words, when people are laid off and governments reduce economic activity, that negatively impacts GDP.
It's #2 here in terms of the difference between revisions.
Also, GDP will be revised at least one more time and this is not a conspiracy, what happens is economic data dribbles in, plus the advance report has some outright estimates on the last month in it.
Is that "thanks to" or "despite"? I always thought it was the American consumer who made the world go round. So is high unemployment good for consumption?
"
American experience is unparalleled. According to a July OECD report, the U.S. accounted for half of all job losses among the 31 richest countries from 2007 to mid-2010. (2) The rise of U.S. unemployment greatly exceeded the fall in economic output. Aside from Canada, U.S. GDP actually declined less than any other rich country
"
Consensus agrees entirely. USA is at the top of the pile-on. We and Canadian Neighbors can afford more than ever to share with the unemployed who are now taking the rap for our economic efficiency windfall. We can now get them back onto career paths by generating enough profit for the rehiring process. Those of us with positions should start working, start generating that profit, go to work early, but leave after hours. We should tell our Congressional Rulers to stop taxing the hell out of the impoverished, close down the income-prisons, auction higher-interest-longer-term treasuries to penny-pincher-s who are afraid of buying the flaky stocks now being barker-ed by the Wall-Street-Shell-Game. Our tax code is the best that money can buy. We need to stop selling tax-code to the excessively wealthy. Stop corporate welfare. Stop idiotic-Congressional-overspending. We need a $16,000 personal exemption and a $64,000 standard deduction. Do the preparers of tax forms have huge lobby to tell Congress not to simplify taxation? Then trash the IRS. Finance everything by bond auction, but close down the highly-political-income-prisons.
We got to take our country back, all the way back to 1934.
There is a user guide to the right and a rich text editor, to use click on the link for it at the bottom of the text.
I request all URLs be properly formatted and images locally hosted. The user guide shows you the XHTML tags or the rich text editor is a WYSIWYG editor and has buttons.
This is important for layout as well as others finding the site, and it make the site look professional.
That's my only criticism and I will help people learn formatting, XHTML tags via email.
For example, corporate profits percentage increases, quarterly or annual, as an aggregate or even by sector, a graph of this would really help drive the point home.
Graphs get a little tougher to make but if one has one, you can upload it and format it on the site.
This article is just damning really and some nice economic eye candy would spell it out.
I think Citigroup in the midst of TARP signed a $2.1 Billion offshore outsourcing deal, JP Morgan Chase a > $5 billion one recently. All I.T./backoffice and no there is not a shortage of I.T. workers in the U.S.....
In other words, it looks highly suspect they used the excuse and cover of Economic Armageddon to offshore outsource even more divisions.
Robert Oak, I’m an advocate replacing income taxes with a general consumption tax to whatever extent feasible.
VAT is a superior method of sales tax administration and is particularly advantageous when crossing political borders.
I’m a proponent of a trade policy that would be of no government expense, requires no additional taxes or debt, and would not deny resources from other programs to improve our nation.
This trade policy proposal is not mutually exclusive to VAT. It does not itself negate existing or future laws or regulations that our congress is likely to enact.
If you look at the equation, which is in the post, you see imports are subtracted. This is because GDP means Gross Domestic Product. Domestic means "within our borders".
I'd say this is what is implied, that if one has the same amount of domestic production, yet imports declined, it implies a substitution effect to create that other domestic activity by buying o raw materials, or "core" materials, i.e. "stuff to make more stuff".
I'd also say that's true, that the post production contribution to GDP is lower that a similar domestically produced version, in real GDP, but there are import and export price deflators in real GDP...
Let's say something costs $10 to make in the U.S. but $1 dollar in China. So, instead of 10 items available for post production, you now have one. Let's say that item is critical to post production, say, hammers to build houses. Then by importing, you have 10 people working instead of one on that house.
Yet you also lost that worker(s) who used to make the hammers. So, there is a scenario where it might be possible post production domestic economic activity is greater than the original item.
Real GDP has had inflation removed and their are price deflators for this as well...
Robert Oak, as you wrote, it’s incorrect for me to state that imports contribute nothing to the nation’s economy.
Unlike domestic production of products, (prior to the goods having entered the nation), the production of imports contribute noting to the nation’s economy. After products have been produced and reach a domestic producers’ shipping platform or the importing nation’s receiving dock, there is no additional advantage between them.
To the extent that we choose to purchase foreign products, we have refrained from purchasing domestic products. The distribution, servicing and use of ANY products, (i.e. the products post-production contributions to the nation’s GDP) are the similar for both imported and domestic products.
An Imported product’s post-production contribution to the nation’s GDP is not greater than that of a similar domestic produced product. The choice of quantities of similar domestic or imported products purchased are mutually exclusive; If you choose to purchase a total of 10 items, 10 of them cannot be fully domestic AND additionally 10 of them cannot be fully imported.
Unlike domestic products, the production of foreign products contributes extremely little or nothing to our nation’s GDP.
Robert Oak, production not reflected within the prices of globally traded products are fully accounted for within their producing nations’ GDPs but they are not attributed to global trading.
Thus to the extent that there are occurrences of such items and their cascading effects within nations’ economies, trade surpluses contributions or trade deficits detriments to nations’ GDPs are under reported because their effect is not identified and quantified as being due to their nation’s global trade imbalance.
I agree completely. It takes a rare form of political cowardice to sweep into power with the massive majority Obama had and then simply to waste it - one can only assume that this is deliberate. He took on all of the dictatorial powers Bush had and adds some; he looks at the catastrophic damage caused by the financial crisis and then puts the same people in charge of 'reforming' the sector that caused the damage in the first place, allowing them to reward themselves massively in the process. 'Health Care Reform' is no such thing and we then learn that Obama had betrayed the public option before the fight even began. Perhaps that's what's so despicable about this administration - it isn't so much that it brings a knife to a gunfight, it enters every policy initiative waving a white flag, unprepared to fight for anything.
That's why I voted for Obama as worse than Bush. I think that Bush simply replicated the cruel, vicious policies of his class because he actually believed in them. He was a simple-minded bully who was just there to front for Daddy's friends, but I think he really believed in all of the free market, USA-all-the-way, war-on-terror rubbish, apart from anything else because he simply lacks the intellectual furniture and the will to think beyond his indoctrination - plus he personally does very well out of it. Obama on the other hand (I think) is doing some ruthless calculations a la Tony Blair - he'll be a young man (relatively) when he leaves office and that's when you start making the real money. He's not about to offend the people he hopes will be making him a very wealthy man when he leaves office by regulating them and so if the Goldman-Owned-Party puts up even the merest vestige of resistance the administration collapses with a sigh of relief, turns to the American people and says: "See, we can't do anything - those goshdarned Republicans are just too strong for us!"
The christo-fascist tail thereby wagging the 'bipartisan' dog...
I am a Canadian businessman (economist) living in Shanghai.
It is true that China has done much copying, but mostly small and low-cost consumer items like DVDs. In the overall scheme of hundreds of billions of trade, the net effect of this is minor if not trivial. Although not necessarily so to those involved...
But in fact, in substantial areas of technology, China has more than paid its way. One notable example is China's HSR record - the high-speed trains.
China paid Kawasaki, the creator of the original bullet train, more than 750 billion for all the IP, the rights, the know-how, everything. Chinese engineers went to Japan to study with Kawasaki, and Kawasaki engineers came to China to assist in designing and building the first factories for train sets, and helped supervise the ocnstruction of them.
China did the same with Alstom, Siemens and Bombardier, spending in total more than 3 billion dollars in the money of those days. And they were given only the old technology - not the latest versions.
Much of the complaining we hear today can be attributed to what I call 'seller's remorse'. Kawasaki in particular, but the others as well, believed they were so clever, had such great R&D and such a big head start, that they could sell China their old technology and still stay far enough ahead to sell all of China's needed trains.
They believed they had a 30-year head start and were astonished to find that the Chinese combined all the best parts of their newly-purhased technology and created a much superior product in only 5 years. And now Kawasaki's only sales point is that China's faster and cheaper train is a copy of their slower and more expensive one.
Here's a link to an article on my website blog on China's HSR. You might find it informative.
The independent trade union movement was a key to the Egyptian revolution. Of course, you'd never suspect that by the corporate media coverage. But it was union activity to provide wages with which to buy food and other necessities. That's a bit of encouragement, the intentionality of organizing for the greater good.
The same labor movement that staged the 2006 strike and a follow up in 2007, called for a national strike on April 6, 2008 to raise the nation's minimum wage and protest high food prices. Mubarak's government sent in police who took over the factory in hopes of preventing the strike. Conflict broke out with violence on the part of police toward the union members calling for the strike. Police arrested workers. Trials, convictions and prison sentences followed quickly. Other members continued to protest.
Crony-Capitalism must die. My fellow Americans are being dispossessed in a relentless assault on unions, worker's rights, diversion of productivity gains, ad nauseum.
My customer base has been destroyed. Thank you, Bernanke.
I'm going to summarize an incredible empirical study of foreclosures Monday. It shows how utterly shoddy the courts are in observing contract law. If the courts don't dot the "i's" and cross the "t's", what chance is there that quasi legal actions will be honest and in accord with the law? You should get your money back. The homeowners who got taken for a ride by the contrived real estate bubble should get some relief too. People should be in jail for this. We would but we're not part of the "select" - those who screw up again and again on a massive scale and get fat bonuses and, if it's really bad, the Medal of Freedom.
Lets call this Health Reform, the Sequel. They'll make a big deal out of the settlement, Obama and his handlers. Then it will turn out to be nothing much with a big fat zero retroactively for home owners. Of course, it's all about retroactive goodies for the perpetrators.
There will be two major 'mission accomplished' moments for the craters of this bill:
1) Contract law, hundreds of years in the making, will become largely meaningless across the board since a retroactive "save" of the perps sets a precedent that can't be ignored - contracts are meaningless;
2) The fallout will be blowback from the public in epic proportions - you can't do a give-away like this and keep it secret.
Mission accomplished! You're right. We are doomed. Time to start over and the first step is everybody who cooperates with this deal goes, plus the incumbents in the three branches of the federal government that allowed this to go on since 1995.
I bought a house for $230,000, this was an FHA loan with a deposit of $73,000, they charged me $2,500 for insurance....when questioned they told me I had to pay this amount...I was lead by a bunch of liars and thieves...papers were signed before I got to the settlement table when the lawyer was phoned 3 times about the issue I had with these people...the lawyer was to no avail...sent another one I knew nothing about...nothing was handled properly...I found out that I should never have paid this to FHA for the loan because of the large deposit...I hope they all rot in HELL where they think there is no HELL....the story is so true and there is more to this than that...one I can't wait to write about in a book soon to appear on the press....AMEN
Massive fraud, with collusion by banks, real estate salespeople, appraisers, brokers, AND government. If we are to have real reform, let the Fed and the administration take a bite of this fecal sandwich. People seeking a place to live and raise their families were herded like sheep into a marketplace where housing values were exaggerated by collusive practices, and paid $400K for a house that should have sold for perhaps 230K. Take it or rent forever.
Their bite of this sandwich should be a write-down of mortgages -- a shared haircut with the homeowner, the Fed and the GSEs. What do the banks get? A 20% down payment requirement on new mortgages and a recomputation of principal amount on existing mortgages they hold. Otherwise, let the existing mortgages be subject to a one-time mark-to-market and require the banks to come up with capital, just as you would in a margin call. An alternative might be Federal Home Reninance Trust with original mortgages put back to originator and families keeping their homes based on a new mark-to-market principal.
Or we could send those who dealt this mess to jail for fraud.
Anyone notice the second worse detraction from Q4 GDP was the reduction in state and local government investment and expenditures?
So, in other words, when people are laid off and governments reduce economic activity, that negatively impacts GDP.
It's #2 here in terms of the difference between revisions.
Also, GDP will be revised at least one more time and this is not a conspiracy, what happens is economic data dribbles in, plus the advance report has some outright estimates on the last month in it.
Is that "thanks to" or "despite"? I always thought it was the American consumer who made the world go round. So is high unemployment good for consumption?
"
American experience is unparalleled. According to a July OECD report, the U.S. accounted for half of all job losses among the 31 richest countries from 2007 to mid-2010. (2) The rise of U.S. unemployment greatly exceeded the fall in economic output. Aside from Canada, U.S. GDP actually declined less than any other rich country
"
Consensus agrees entirely. USA is at the top of the pile-on. We and Canadian Neighbors can afford more than ever to share with the unemployed who are now taking the rap for our economic efficiency windfall. We can now get them back onto career paths by generating enough profit for the rehiring process. Those of us with positions should start working, start generating that profit, go to work early, but leave after hours. We should tell our Congressional Rulers to stop taxing the hell out of the impoverished, close down the income-prisons, auction higher-interest-longer-term treasuries to penny-pincher-s who are afraid of buying the flaky stocks now being barker-ed by the Wall-Street-Shell-Game. Our tax code is the best that money can buy. We need to stop selling tax-code to the excessively wealthy. Stop corporate welfare. Stop idiotic-Congressional-overspending. We need a $16,000 personal exemption and a $64,000 standard deduction. Do the preparers of tax forms have huge lobby to tell Congress not to simplify taxation? Then trash the IRS. Finance everything by bond auction, but close down the highly-political-income-prisons.
We got to take our country back, all the way back to 1934.
Grazia
!
Yves picked up this piece in the links, which is good, everybody needs to read this.
There is a user guide to the right and a rich text editor, to use click on the link for it at the bottom of the text.
I request all URLs be properly formatted and images locally hosted. The user guide shows you the XHTML tags or the rich text editor is a WYSIWYG editor and has buttons.
This is important for layout as well as others finding the site, and it make the site look professional.
That's my only criticism and I will help people learn formatting, XHTML tags via email.
For example, corporate profits percentage increases, quarterly or annual, as an aggregate or even by sector, a graph of this would really help drive the point home.
Graphs get a little tougher to make but if one has one, you can upload it and format it on the site.
This article is just damning really and some nice economic eye candy would spell it out.
I think Citigroup in the midst of TARP signed a $2.1 Billion offshore outsourcing deal, JP Morgan Chase a > $5 billion one recently. All I.T./backoffice and no there is not a shortage of I.T. workers in the U.S.....
In other words, it looks highly suspect they used the excuse and cover of Economic Armageddon to offshore outsource even more divisions.
Robert Oak, I’m an advocate replacing income taxes with a general consumption tax to whatever extent feasible.
VAT is a superior method of sales tax administration and is particularly advantageous when crossing political borders.
I’m a proponent of a trade policy that would be of no government expense, requires no additional taxes or debt, and would not deny resources from other programs to improve our nation.
This trade policy proposal is not mutually exclusive to VAT. It does not itself negate existing or future laws or regulations that our congress is likely to enact.
Respectfully, Supposn
If you look at the equation, which is in the post, you see imports are subtracted. This is because GDP means Gross Domestic Product. Domestic means "within our borders".
I'd say this is what is implied, that if one has the same amount of domestic production, yet imports declined, it implies a substitution effect to create that other domestic activity by buying o raw materials, or "core" materials, i.e. "stuff to make more stuff".
I'd also say that's true, that the post production contribution to GDP is lower that a similar domestically produced version, in real GDP, but there are import and export price deflators in real GDP...
Let's say something costs $10 to make in the U.S. but $1 dollar in China. So, instead of 10 items available for post production, you now have one. Let's say that item is critical to post production, say, hammers to build houses. Then by importing, you have 10 people working instead of one on that house.
Yet you also lost that worker(s) who used to make the hammers. So, there is a scenario where it might be possible post production domestic economic activity is greater than the original item.
Real GDP has had inflation removed and their are price deflators for this as well...
Robert Oak, as you wrote, it’s incorrect for me to state that imports contribute nothing to the nation’s economy.
Unlike domestic production of products, (prior to the goods having entered the nation), the production of imports contribute noting to the nation’s economy. After products have been produced and reach a domestic producers’ shipping platform or the importing nation’s receiving dock, there is no additional advantage between them.
To the extent that we choose to purchase foreign products, we have refrained from purchasing domestic products. The distribution, servicing and use of ANY products, (i.e. the products post-production contributions to the nation’s GDP) are the similar for both imported and domestic products.
An Imported product’s post-production contribution to the nation’s GDP is not greater than that of a similar domestic produced product. The choice of quantities of similar domestic or imported products purchased are mutually exclusive; If you choose to purchase a total of 10 items, 10 of them cannot be fully domestic AND additionally 10 of them cannot be fully imported.
Unlike domestic products, the production of foreign products contributes extremely little or nothing to our nation’s GDP.
Respectfully, Supposn
Robert Oak, production not reflected within the prices of globally traded products are fully accounted for within their producing nations’ GDPs but they are not attributed to global trading.
Thus to the extent that there are occurrences of such items and their cascading effects within nations’ economies, trade surpluses contributions or trade deficits detriments to nations’ GDPs are under reported because their effect is not identified and quantified as being due to their nation’s global trade imbalance.
Respectfully, Supposn
Obama needs to fire Walsh at OCC. He is not a regulator, he is a lobbyist for the bank.
The AG needs to indict Dimon and Loman at Chase for all the fraud, forgery and theft and put them next to Madoff.
Stop all foreclosure immediately and let the bankruptcy judges oversee them just like commercial RE.
Come on Obama, grow some big ones or go home.
I agree completely. It takes a rare form of political cowardice to sweep into power with the massive majority Obama had and then simply to waste it - one can only assume that this is deliberate. He took on all of the dictatorial powers Bush had and adds some; he looks at the catastrophic damage caused by the financial crisis and then puts the same people in charge of 'reforming' the sector that caused the damage in the first place, allowing them to reward themselves massively in the process. 'Health Care Reform' is no such thing and we then learn that Obama had betrayed the public option before the fight even began. Perhaps that's what's so despicable about this administration - it isn't so much that it brings a knife to a gunfight, it enters every policy initiative waving a white flag, unprepared to fight for anything.
That's why I voted for Obama as worse than Bush. I think that Bush simply replicated the cruel, vicious policies of his class because he actually believed in them. He was a simple-minded bully who was just there to front for Daddy's friends, but I think he really believed in all of the free market, USA-all-the-way, war-on-terror rubbish, apart from anything else because he simply lacks the intellectual furniture and the will to think beyond his indoctrination - plus he personally does very well out of it. Obama on the other hand (I think) is doing some ruthless calculations a la Tony Blair - he'll be a young man (relatively) when he leaves office and that's when you start making the real money. He's not about to offend the people he hopes will be making him a very wealthy man when he leaves office by regulating them and so if the Goldman-Owned-Party puts up even the merest vestige of resistance the administration collapses with a sigh of relief, turns to the American people and says: "See, we can't do anything - those goshdarned Republicans are just too strong for us!"
The christo-fascist tail thereby wagging the 'bipartisan' dog...
I am a Canadian businessman (economist) living in Shanghai.
It is true that China has done much copying, but mostly small and low-cost consumer items like DVDs. In the overall scheme of hundreds of billions of trade, the net effect of this is minor if not trivial. Although not necessarily so to those involved...
But in fact, in substantial areas of technology, China has more than paid its way. One notable example is China's HSR record - the high-speed trains.
China paid Kawasaki, the creator of the original bullet train, more than 750 billion for all the IP, the rights, the know-how, everything. Chinese engineers went to Japan to study with Kawasaki, and Kawasaki engineers came to China to assist in designing and building the first factories for train sets, and helped supervise the ocnstruction of them.
China did the same with Alstom, Siemens and Bombardier, spending in total more than 3 billion dollars in the money of those days. And they were given only the old technology - not the latest versions.
Much of the complaining we hear today can be attributed to what I call 'seller's remorse'. Kawasaki in particular, but the others as well, believed they were so clever, had such great R&D and such a big head start, that they could sell China their old technology and still stay far enough ahead to sell all of China's needed trains.
They believed they had a 30-year head start and were astonished to find that the Chinese combined all the best parts of their newly-purhased technology and created a much superior product in only 5 years. And now Kawasaki's only sales point is that China's faster and cheaper train is a copy of their slower and more expensive one.
Here's a link to an article on my website blog on China's HSR. You might find it informative.
http://www.bearcanada.com/science/vehicles/trains.html
There are also many articles on Trade, International Finance, the RMB and other current topics.
... the inverse relationship between the size of the flag on Wall Street and it's furtherance of benefits to the nation and workers.
The independent trade union movement was a key to the Egyptian revolution. Of course, you'd never suspect that by the corporate media coverage. But it was union activity to provide wages with which to buy food and other necessities. That's a bit of encouragement, the intentionality of organizing for the greater good.
Crony-Capitalism must die. My fellow Americans are being dispossessed in a relentless assault on unions, worker's rights, diversion of productivity gains, ad nauseum.
My customer base has been destroyed. Thank you, Bernanke.
I'm going to summarize an incredible empirical study of foreclosures Monday. It shows how utterly shoddy the courts are in observing contract law. If the courts don't dot the "i's" and cross the "t's", what chance is there that quasi legal actions will be honest and in accord with the law? You should get your money back. The homeowners who got taken for a ride by the contrived real estate bubble should get some relief too. People should be in jail for this. We would but we're not part of the "select" - those who screw up again and again on a massive scale and get fat bonuses and, if it's really bad, the Medal of Freedom.
My error. They're there now.
Lets call this Health Reform, the Sequel. They'll make a big deal out of the settlement, Obama and his handlers. Then it will turn out to be nothing much with a big fat zero retroactively for home owners. Of course, it's all about retroactive goodies for the perpetrators.
There will be two major 'mission accomplished' moments for the craters of this bill:
1) Contract law, hundreds of years in the making, will become largely meaningless across the board since a retroactive "save" of the perps sets a precedent that can't be ignored - contracts are meaningless;
2) The fallout will be blowback from the public in epic proportions - you can't do a give-away like this and keep it secret.
Mission accomplished! You're right. We are doomed. Time to start over and the first step is everybody who cooperates with this deal goes, plus the incumbents in the three branches of the federal government that allowed this to go on since 1995.
I bought a house for $230,000, this was an FHA loan with a deposit of $73,000, they charged me $2,500 for insurance....when questioned they told me I had to pay this amount...I was lead by a bunch of liars and thieves...papers were signed before I got to the settlement table when the lawyer was phoned 3 times about the issue I had with these people...the lawyer was to no avail...sent another one I knew nothing about...nothing was handled properly...I found out that I should never have paid this to FHA for the loan because of the large deposit...I hope they all rot in HELL where they think there is no HELL....the story is so true and there is more to this than that...one I can't wait to write about in a book soon to appear on the press....AMEN
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