The Cynical Economist

China ratings house says US defaulting – Washington had already defaulted on its loans by allowing the dollar to weaken against other currencies — eroding the wealth of creditors including China….Heh-heh-heh…. Suckers!

Dow closes below 12 0000 – Investors were dour after U.S. May import prices showed a surprise rise of 0.2%, hinting at an inflation push coming into the U.S. from abroad. Surprised, eh?

JPMorgan Forecasts Another Drop in Home Prices – JPMorgan Chase is forecasting another 4 to 5 percent drop in home values over the next 12 months. The forecast number  is low, if you ask me.

Home prices may drop another 25%, Shiller predicts – Home prices may drop as much as 25 percent, after inflation, over the next five years, economist Robert Shiller, co-founder of the Standard & Poor’s/Case-Shiller home price index, said Thursday

Many of us won’t be able to retire until our 80s – You’ll probably have to work much longer than you anticipated. That is, if there will be jobs out there…

30% Of People With A 401(k) Have Taken Out A Loan Against It – One-in-seven people took out such loans last year — up by double digits from 2009, according to the consulting group AON Hewitt. More people not retiring and working into their 80s.

Ohio restaurant name-checked by Obama to close – The owners of an Ohio restaurant touted last week by President Barack Obama as an indirect beneficiary of the government’s Chrysler bailout said Thursday that tough times are putting them out of business. Obama is toxic any way you look at it.

States considering online lottery sales - Republican New York Assemblyman Clifford Crouch is sponsoring a bill that would allow online sales of Quick Draw and other games, with a goal of expanding the market. Legalising sin to boost revenue…soon to pass – lowering the drinking age to 14 and legalizing drugs and prostitution (I am not saying it is good or bad thing)

Americans’ equity in their homes near a record low – Falling real estate prices are eating away at home equity. The percentage of their homes that Americans own is near its lowest point since World War II, the Federal Reserve said Thursday. The average homeowner now has 38 percent equity, down from 61 percent a decade ago. And some realtors continue to say that the homes are supposed to be our pigi-banks to help our retirement?

US Is Nearing Even Worse Financial Crisis: Jim Rogers – In the last three years the government has spent staggering amounts of money and the Federal Reserve is taking on staggering amounts of debt. ”When the problems arise  next time…what are they going to do? They can’t quadruple the debt again. They cannot print that much more money. It’s gonna be worse the next time around.” Why not?, Why not?

Job Plan With A Page From Marx – Presumably, if enough community college students can be trained for traditionally unionized manufacturers, employers will have no choice but to hire them. That’s a win-win-win-win for educational bureaucrats, unions, jobs and Obama’s political prospects. Below is a different prospective with which I agree more.We can have manufacturing here – high tech innovative manufacturing. Still do not agree with the part where the government gets to decide who is the winner and who is the looser in funding private businesses with grants

Federal data shows troubling unemployment, underemployment trends –

Less than half of African-American men now have full-time jobs, and less than half of all white men will have full-time jobs in 2018, according to post-2000 trends hidden in federal population and workforce data.

There are roughly 14 million people formally labeled as unemployed, but “there’s probably 22 million to 23 million people who are unemployed, mal-employed or underemployed,” said Andrew Sum, an economics professor at Northeastern University in Boston.

O-mama….”Less than half of African-American men now have full-time jobs, and less than half of all white men will have full-time jobs in 2018″

And see the above story should have been first page news everywhere….But what passes for news today are the distraction of the real problems – releasing 24 000 of Palin’s emails while she was governor (who cares?), that Weiner guy is probably going to keep his seat as our employee and we will continue to pay him to twitter his weine (I personally do not care about his private life, but boy if he lie so bluntly, can you trust him to represent you?), Obama to play golf with few other political hacks….probably discussing how to run America down the drain faster…

The Hidden Cost of Ethanol Subsidies – By mandating 40% of our corn crop be dedicated to ethanol, we’ve created domestic shortages that may turn the U.S. into a net importer of corn and destroy our dominance in one more area of the world economy. And as usual the bad news doesn’t come alone…It seems we will pay higher prices for the corn…and the ethanol

Tightening stockpiles drive up corn prices – Corn jumped to the highest price in almost three years after the U.S. Department of Agriculture forecast tighter supplies, as adverse weather hurt crops

What’s up with the youth today in America….Oh, yeah – undereducated and out of work, no body is hiring right now so….-…so, they kill for joy….

Dozens Brawl Outside Downtown San Jose McDonald’s; 2 Stabbed – Witnesses told CBS5 that the brawl was so big it looked like a riot. That kind of behavior isn’t surprising to some. One man, who only identified himself as “Julio,” said the area looks like a “war zone” late at night with groups of youngsters looking for trouble.

Police warn of teen girls committing strong arm robberies - Police have issued a community alert on the Southwest Side warning residents of strong arm robberies committed by two 16-year-old girls.

Heartbreak as ‘innocent bystander’ teen killed and four others wounded in boardwalk shooting at New York beach - ’It’s a bad combination of guns, heat, beer and angry young men,’

NM teens tied up, smothered foster mom – Arrest documents say two 15-year-old girls accused of killing their foster mom in New Mexico put her in a chokehold, tied her hands and feet and then smothered her with a pillow.

Wash. residents warned of ‘bloodthirsty’ dog pack – You know what kind of countries usually have problem with bloodthirsty dog packs? Third world countries. In times of financial hardship some owners let the dogs go out to take care of themselves and feed with the garbage on the srteets. Few eventually will get together and start acting as their brothers the wolf in searching to kill a pray. Now the animal control cannot take care of the problem because the states and county budgets are in red, so they cannot care for them in the animal shelters because of lack of food and neither have enough people to hunt down the dogs. So what we did in my ex-third world country – the residents hunted them down themselves with poison meat and shotguns. May sound cruel, but I bet you do not want to see kids and old people eaten by dogs.

Official: Mexican cartels use money, sex to bribe U.S. border agents – Mexican drug cartels have used cash and sexual favors as tools to corrupt U.S. border and customs agents, an inspector general investigation has found.

Barofsky: S&P estimates that the next crisis will cost $5 Trillion dollars upfront – Video – You should be scared!

It’s Obama’s Economy, Stupid – No president “runs” the U.S. economy, but this president talks like he does

Obama’s Egghead Economic Saboteurs - Official motto of the White House economic team: Those who can, do. Those who can’t, fantasize in the classroom, fail in Washington and then return to the Ivy Tower to train the next generation of egghead economic saboteurs. Life is good for left-wing academics. Everyone else pays dearly.

Professor disaster – Rats, say goodbye to the ship of state: Gone are Christina Romer, Larry Summers, Peter Orszag. Headed out is Goolsbee, who abruptly announced his resignation Monday to return to teaching at the University of Chicago. With the water lapping over the gunwales, the lone holdout is Treasury Secretary Tim Geithner, the former tax cheat, who sails grimly on. Heckuva job, guys.

O’Donnell: Most Voters “Don’t Really Know Anything About The Economy” – MSNBC’s LAWRENCE O’DONNELL: But a recent poll shows that a majority of voters–a majority of whom don’t really know anything about the economy–don’t believe that the economy is recovering and blame President Obama for the struggling economy

Illinois Tax Firesale – Illinois is proving what bookshelves full of studies have found: Handing out special favors one business at a time is politically corrupting and an ineffective economic development strategy. A sounder way to create jobs is to provide a welcome tax and regulatory climate for all businesses. Some states, such as Arizona, constitutionally prohibit politicians from granting special favors to a business or citizen.

New Jersey and New York Ranked as Worst States for “Individual Freedoms” -Freer states are attracting citizens from other states while less-free states are losing citizens — and their tax dollars. The study results also showed that a 0.25 unit increase in economic freedom increases the average annual growth rate in personal income by about 0.25 percentage points.

Fed survey: Economy falters in several US regions – Economy falters because of slower manufacturing and weaker consumer spending. Gee, how do you make consumers spend or manufactures produce if some of them believe we are heading to a depression….

CNN: 48% believe a Great Depression is coming within a year – I guess we can count Barack Obama among the 51% who aren’t worried about it….And I guess this guy is only worried about his golf games

Another must read by the great Thomas Sowell.

He is exactly right about government meddling with the house prices and I have been saying it many times here.

BTW, I remember 2007-2008 when many people who were buying properties to “flip” them for profit, were laughing at me, because I was renting (saving money for down payment for a house)

“How stupid are you?Are you out of your mind paying for something, that will never be yours, making someone else rich, having no tax deductions, not a homeowner…sucka’” – they used to say to me

“Get an ARM or only interest loan, buy a house, get a home equity line of credit, live large, then – sell it. Boom – make profit….easy money” – According to them it was proven method, sure thing of getting rich fast. The house prices always go up….

Riiiight….

These same people got owned by the bank…

Bankrupt, foreclosed, chased by countless collection agencies….

Look who’s laughing now….

From The Washington Examiner
by Thomas Sowell

“Housing Market Setback Forecast,” the newspaper headline said. A recently released report on housing says that home sales are down more than 25 percent and the inventory of unsold homes is about 50 percent higher than it was the same time last year. This is just one of innumerable stories about the woes of the housing market. We all understand about human beings having woes. But how can a housing market have either setbacks or woes? Moreover, why should politicians be riding to the rescue of the housing market with the taxpayers’ money?

We hear all sorts of sad stories about people whose homes are “underwater” or who are facing foreclosure. But why should our attention be arbitrarily focused on these particular people, rather than on the many other people who would benefit from being able to buy those same houses, if the prices came down?

The government is artificially keeping the prices up with subsidies and with pressures on lenders to accommodate the current occupants.

Can we not walk and chew gum at the same time? Is our attention span so limited that we can only think about one set of people that the media and the politicians have chosen to highlight?

Do other people count for less just because the media don’t put their pictures in the paper or on the TV screen? Or because politicians are ignoring them?

Sometimes we are more concerned about some people because they are especially deserving. But this cannot be said about those who borrowed money to buy homes that they could not afford, or who borrowed against the equity in their homes, and now find that what they owe is more than the home is worth.

If anyone is especially deserving, it is those who had the common sense to avoid taking on bigger financial obligations than they could handle, but who are now expected to pay as taxpayers for other people’s irresponsibility.

No doubt some people who are facing foreclosures might have been able to continue making their mortgage payments if they had not lost their jobs. But since when were we all guaranteed never to lose our jobs? People used to put money aside “for a rainy day.” But now people who have spent like there are no rainy days are supposed to have the taxpayers pay to give them an umbrella.

What about the people who saved and put their money in a bank? Those who blithely say that the banks ought to modify the mortgage terms to accommodate people who are behind in making their monthly payments forget that, however “rich” a bank may be, most of its money actually belongs to vast numbers of depositors, most of whom are not rich.

Those depositors deserve to get the best return on their money that supply and demand can offer. Why should people who save be sacrificed for the benefit of those who spent more than they could afford?

Why are politicians so focused on one set of people, at the expense of other people? Because “saving” one set of people increases the chances of getting those people’s votes. Letting supply and demand determine what happens in the housing market gets nobody’s votes.

If current occupants are put out of their homes and the prices come down to a level where others can afford to buy those homes, nobody will give politicians credit — or, more to the point, their votes. Nor should they.

Rescuing particular people at the expense of other people — whether the others are taxpayers, savers or prospective home buyers — produces votes. It also produces dependency on government, which is good for politicians, but bad for society.

That is why politicians give what Adam Smith called “a most unnecessary attention” to things that would sort themselves out better and faster without heavy-handed government intervention.

Why do the media fall in with this arbitrary focus on particular people who are having trouble holding on to homes they cannot afford? Partly because it makes a good story and partly because too many people in the media simply go with the politicians’ talking points. That is a lot easier than thinking.

But the rest of us have no excuse for not thinking — or for letting ourselves be stampeded by rhetoric about “saving” the housing market.

Examiner Columnist Thomas Sowell is nationally syndicated by Creators Syndicate.

If you think you’ve been seeing more people sleep on city streets, statistics back up the perception. The homeless population living on New York City streets has gone up 50 percent in the past year, according to city statistics reported by the HellsKitchenLife.com blog.

The New York City Department of Homeless Services conducts a yearly survey of the streets of the city to count the number of homeless who are not in shelters. The HOPE survey was conducted in January 2010.

The number of homeless in the borough of Manhattan was up 47 percent in the past year, according to the count. The 2010 count had 1,145 people living in the streets. That is up 368 from 2009.

Brooklyn had the biggest increase of any borough. It saw a homeless increase of more than 100 percent in 2010.

read the rest here

The statistics shows that the housing market is recovering and the house prices in my area are growing at 0.6% annual rate …LOL It is just too bad that no one is buying

I made some pictures while driving home from work. These pictures were all made in the last month…

I say we do not need to prop the housing market. We do not need expensive housing, but….some people and the government think otherwise….

Welcome to the USA where $100 down payment  buys you a home (Affordable? It depends by a lot of factors)… But here is the bite…

You do not have the money for the low monthly mortgage payments? You can ask us to negotiate 5/1 ARM deal sealed by the FHA (I shot this one yesterday – 08-10-2010). The sign says: “Ask about our FHA 5/1 ARM”.

After all we live in unprecedented times, when the interest rates are very very low! So low, we have never gone before….And never will again… Now is the time to….

BUY!BUY! BUY!

Sorry for the blur. It is really hard to shoot pictures with a cell phone while driving…

From Bloomberg
By Lorraine Woellert and John Gittelsohn

June 14 (Bloomberg) — The cost of fixingFannie Mae and Freddie Mac, the mortgage companies that last year bought or guaranteed three-quarters of all U.S. home loans, will be at least $160 billion and could grow to as much as $1 trillion after the biggest bailout in American history.

Fannie and Freddie, now 80 percent owned by U.S. taxpayers, already have drawn $145 billion from an unlimited line of government credit granted to ensure that home buyers can get loans while the private housing-finance industry is moribund. That surpasses the amount spent on rescues of American International Group Inc., General Motors Co. or Citigroup Inc., which have begun repaying their debts.

“It is the mother of all bailouts,” said Edward Pinto, a former chief credit officer at Fannie Mae, who is now a consultant to the mortgage-finance industry.

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