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on loan modifications and redefault risk: Link
I think the problem is that mortgage system cannot afford to truly make the modifications affordable for people. This would require reduction of principal and that is just on the ones that are in danger of default. The people with home mortgages are underwater may require a more dramatic restructuring which again the mortgage system probably can't afford.
I say can't afford because it will expose the true level of insolvency of the financial conglomerates.
And exactly how do you see Congress leading a wage growth recovery? Minimum wages don't work, maximum wages are outside of their bailiwick.
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Executive compensation is inversely proportional to morality and ethics.
One thing that CNBC does which I find despicable is they have these sandbaggin' non-debate "debates" on things like H-1B guest worker Visas. They are clearly biased, promoting whatever corporate lobbyist wants them to, not even hiding this fact, while pretending to be "moderators" and they allow the most absurd accusations and just complete falsehoods spewed as fact when it is completely inaccurate.
They are a joke.
The Big Picture has an interesting blurb:
Who is Fitch and up to 3/4th of all refinancing deals? Yoozer.
Most of my trader pals utilize their services (which are REALLY good) and generally have a better respect for them than say CNBC. Most have Bloomberg on their televisions in the background more than CNBC (no one has Fox Business News). I just wish they were in HD. :P
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www.venomopolis.com
I read BoA, through the acquisition of Countrywide, about 10% of their new portfolio, refinanced 64k of the loans and there is high demand. Now the new terms of those loans or the percentage left to go into foreclosure, etc. the article did not say.
So, I think we need to find out the current statistics...
I mean when people are broke, out of a job and not getting one, or never had the income in the first place to support the mortgage payments or the home price...well, ya know and I believe a lot of America is sliding into poverty right now. So maybe we can do more digging and find out some real statistics and specifics.
We were told that $12.8 trillion would encourage lending but it doesn't appear it has done that. So, that middle class family who is struggling and wants to refinance may not be able to do so.
NC is also covering the Bloomberg article, but you are going into much more analysis.
Anyone else notice that Bloomberg as a MSM financial outlet seems to be doing a better job than most and won't necessarily just reword some corporate press release or even government press release? I don't understand why cable packages cough up CNBC and you can only get Bloomerg on the "full" package...anyone else notice this?
Thanks for the post, RO. Gonna do my best to buy American.
We've gone literally decades where the average non-food tangible product has not been made in this country, that when you say "Made in America" you get a funny look. I remember a friend of mine many years ago saying "wow we made TVs here once?". What has happened is we have lost a heritage. There are generations now, as crazy as this sounds, that are unaware that we used to make radios or televisions or even toys! They know that we made something, and that it was good quality (Though to many younger folks, this doesn't seem to apply to cars..dunno why, considering even "Japanese" cars are made here for the most part).
Indeed, if I may be so bold, I would say that "Made in America" has taken on this almost..well mythical standing. One of those "ooohs" and "ahhs" where the products they have found to be of such good quality that it now carries such premium weight. Of course, this also has to do with the fact that the average consumer hasn't purchased a cheap plastic thingy/toy made in this country in decades. Most of that type of item has always has "Made in China" or "Hencho en Mexico" on it.
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www.venomopolis.com
... recovery has to be led by wage growth, rather than by credit expansion, which implies a long, slow, sweaty process, if we ever elect a Congress with the cajones to pursue it.
I'd rather phrase it like this: all the TARP money, bailout money (both banks and the insurance industry), and a large portion of that "simulus" fund, appears to be exponentially increasing the offshoring of American jobs.
I believe Corporate America has reached critical mass in this regard, with 7% or less of the federal tax base derived from corporate (non-)payment of taxes, and the bulk coming from "working" Americans, which is dramatically shrinking, thanks to all that offshore, etc.
And since that shrinking fed tax revenue base will be used as an excuse to further reduce the New Deal programs which have slowed down the absolute collapse of the American pseudo-economy (that is, Unemployment Insurance, food stamps, etc.) it's beginning to appear more and more like Team Bush was unable to "privatize" social security (that is, actually corporatize it) so now they've sent in Team Obama to complete the job (sort of like when Bush didn't pass NAFTA, so Clinton comes in and passes NAFTA, GATT, China's entrance into the WTO, the National Telecommunications Act, the Financial Services Modernization Act and the Commodity Futures Modernization Act).
If all of the malls are closed?
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Executive compensation is inversely proportional to morality and ethics.
What does that mean exactly? Seriously we had liar loans, absurd predatory loans, even mortgages to dead people, people with stolen identities obtained loans....
So, does tightening credit mean that middle class family x who got themselves into a bad mortgage but can afford a reasonable one cannot get a loan or does it mean that the dead guy trying to buy a house cannot get a loan with no money down?
In this age group? There's a name for them- the Homeless.
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Executive compensation is inversely proportional to morality and ethics.
When I realize that I'm ahead of the economic curve.
My consumer debt load was paid off this year. I did so without using additional equity from my house, so I'm still right side up on my mortgage. And suddenly, the jobs program has kicked in, so my wife's daycare looks like it will be full this summer (all slots spoken for right now, but three of the six available are spoken for by family).
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Executive compensation is inversely proportional to morality and ethics.
Buy American pledge.
Looks like they are doing a campaign to show just how many Americans want to support US workers and buy an American made car.
Anybody want to show support can click on the link.
But on an analysis score, I wonder just how much does "Made in America" really influence consumers? I know in conversation it's a big deal, from blue collar people to executives but does it really show up in the statistics as a purchase decision factor?
(I think it should but hell, I also know I shop cheap at the store!)
Given the way their theories worked out in the last 8 years, I think we can dismiss Ayn Rand and Milton Friedman from any economic theory whatsoever. In fact, I'd say that reality has destroyed their theories to the point that they should lose any respect as human beings; it is now clear that they were idiot-savants with no connection to reality whatsoever.
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Executive compensation is inversely proportional to morality and ethics.
I also went to a BBQ this weekend and hear much the same story. What struck me most: Here in FL, people that have lost (or are losing) their home are less shy about talking about it now. And everyone is struggling to stay afloat.
we can get a true assessment of what is happening.
I feel deeply sorry for people in Chicago. I left Chicago several years ago but still have family and friends back there and it is amazing that they are surviving but I know they are hurting.
I have to say this was a pretty interesting piece. Another one shot out of the park, my friend. I'm just curious on a couple of things here. First, I agree that that real infrastructure investment needs to be made. That stimulus plan was a joke, in my opinion. The Chinese will spend more on "Shovel-ready" jobs than we will.
Anyways, when you mention "taxes" on debit and credit transactions, what are you referring to? Fees? Interest rates? I won't argue that some folks are paying some crazy rates out there. Usary laws of some sort should be in place. But lenders should be able to charge something, they are taking the risk. Regarding fees and debit cards, I would shop around, that's what I did. Also, if your bank suddenly starts charging fees call them up and complain. If they won't change, then you change banks. Otherwise, if consumers do nothing and agree to open up accounts with the fees made known, then banks have a right to charge.
You mentioned pairing up industrial capacity of GM factories with GE's wind turbine systems. Can every factory GM owned be converted to make wind mills? Last I checked, some factories the costs of conversions are so cost prohibitive that it may not be doable. In fact, this may be an opportunity instead to help entrepreneurs start up manufacturing firms, assuming GE has enough demand.
This country hasn't had a sound industrial policy since I think the Second World War. While I'm not an advocate of government intervention all the time, I also realize that we're not living in some Libertarian's dream. Certain realities dictate rational decisions and action. We really don't have a true free trade system, and our "trading partners" aren't really playing fair. We have to adapt and, if I may be so bold, to counter-attack.
Now all this government "investing" has to come from somewhere. That means either taxes, printing more cash, or borrowing money. Frankly, I would hate to see Uncle Sam borrow more money. Taxes wouldn't be enough, where would you raise it and by how much (and please don't just say "We'll tax the rich" or something that simplistic, I have WAY more respect for you than that)?
Like I said, perhaps we need an industrial policy. What I'm wondering is, why just GE? Personally, I would try an use the carrot route, and introduce incentives for green jobs. Actually, not just green jobs, if manufacturing is our goal, then it should be that period (Green or not). At the end of the day, this (be it wind mills or what have you) can't become a massive government project, some 21st Century WPA or state enterprise. Domestic manufacturing must become a growth industry again, and that means incentives for demand and investment.
My fear with the subsidies is that we would be hauled into some court. Now there is a snowball's chance in hell that we would leave the WTO, so we have to deal with it. Is what you're proposing a way around such an incident?
I know this may sound like herasy on this site, but how about this as an idea, an addendum of sorts. Why not eliminate corporate taxes on new domestic manufacturing enterprises? Zero capital gains on anyone investing in such ventures. It doesn't have to be permanent, it could be for example for revenues for the next decade. The prerequisite being that the product (or to borrow something from the Chinese) a certain percentage of it be made here (I would say north of 70%). You could even have it be a graduated system for the corporate income tax, the more it's made here , the less you pay in taxes.
The government can pump money into this, but eventually you have to make the damn thing economically viable. Do you really want to keep pumping money essentially into General Electric? The taxpayers don't want to subsidize GE, they want to see new jobs in companies earning a profit, which they would like to invest in.
I'm not bashing your proposal, I'm simply saying that having government as the sole investor/subsidizer won't help in the long run. We need more and more start-ups in manufacturing, that want to sell items here. Most small manufacturers that I know don't even bother selling overseas, they focus on markets here. If there is demand for Wind Turbines, then they will sell. Same with other items.
Solar Panels? Why not introduce tax credits (not tax deductions) towards placing them on your home? You mentioned electricity co-ops. Green technology would essentially allow home owners be their own co-op or sell excess juice to a local co-op. If that municipal co-op has extra power, then let it participate in the market place and sell it to earn extra revenue.
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