Here's recent history of the Fed’s policy committee and its Fed Funds rate. Next Fed decision is June 24/25.
Insider Q&A sees if Fed can cool ‘nasty’ mess
March 15th, 2008, 12:01 am · 117 Comments · posted by Jon Lansner/O.C. Register columnist
What will central bankers do at Tuesday’s meeting? These are times that try the Federal Reserve chairman’s soul, as shaky financial markets put Fed boss Ben Bernanke in a tough spot. Will cheaper money, or even flooding the market with extra cash, get people (from small fry to global giants) to take risks again, such as from buying stocks and homes or lending money. They’ve even had to bailout a Wall Street brokerage. Amid this mess, we asked five experts around town what they thought the Fed could do to get themselves, and the global economy, out of this pickle and what the effort might mean for local housing:
Economist Chris Thornberg, Beacon Economics: “They will cut (rates.) Everything is falling apart. Their $200 billion injection provided at best a temporary relief to a market that is getting absolutely pummeled. Think about it: those mortgage bond pools were valued with a model that said that the possibility of price declines in the housing market is zero. According to Case-Shiller, the national housing market lost 4.5% of its value in the 4th quarter ALONE. Given the pace of home sales and the current stock of foreclosed homes in California would take 5 months to burn off if every home sale in the market was of a foreclosed property. Wow. This is getting very, very nasty. Mortgage rates are irrelevant at this point in time. In fact I would argue that Bernanke is primarily worried about the health of the financial system. What might work at this point in time? A Federal Bureau of Foreclosed Home Purchases: buy them up and, I don’t know what.”
Lender Kevin Budde, Countrywide Bank: “Based upon the tame inflation numbers reported (Friday) it opens the door for an immediate cut by the Feds before they meet if they choose. Otherwise the Fed funds futures have priced in a three-quarters of a percentage point cut. Prior to the low inflation number a half-point cut was priced in. The Fed’s cutting of rates isn’t making a difference on home loan interest rates. It’s all about liquidity of mortgage-backed securities and the lack of buyers. If it wasn’t for the $200 billion Treasury swap for securities (that) the Feds allowed this last week, our interest rates would be even higher than they are today. The concern of the Federal Reserve Board has moved quickly from helping the housing market to preventing a complete meltdown of the U.S. financial banking system. Expect to see extreme organized moves by central banks around the world over the next several weeks. We are in the throngs of the abyss right now for the housing market. In time historians will look back and mark this current period in time as the worst of the crisis. It will be fixed and it will improve but it will begin as confidence is restored in the financial system not by the sheer act of cutting rates.”
Lender Rich Simmons, Nationwide Lending: “Same old story, Jonathan. Mortgage rates are having little correlation to the Fed’s lowering of the short term rates. Who wants to be the bank holding mortgage loans? It is like wanting to be Spitzer’s campaign manager. We just need to be patient, let the market take its course, and our local market will then start to make a comeback. It is going to be a hard fall, but O.C. will recover, it always has.”
Investment adviser Chip Hanlon, Delta Global Advisors: “The market is usually correct in predicting what the Fed will do with interest rates, and futures are currently saying the Fed will cut rates by three-quarters to a full point next week, a panic-type of move. Because the Fed can only control short-term rates, not the long end, there is no guarantee it will bring down mortgage rates. Even if such a move does bring rates down a bit, however, the real estate market will not be saved. Prices are still far too high, especially given a completely changed lending environment in which the sub-prime buyer essentially no longer exists. The Fed might be able to inflate strongly enough to prop up home prices in nominal terms, but in real terms prices will keep coming down.”
Investment adviser Charles Rother, American Strategic Capital: “The Federal Reserve is likely to reduce the discount rate and federal funds target rate by a half point. If there is a surprise, it will be the larger-than-expected decrease of a full point. Currently, the nation’s economy is going through a de-leveraging process. As a result, at this time, inflation risk is only a secondary concern. Any decline in interest rates would benefit the California housing market. Given the current housing market, interest rate cuts would likely reduce the subsequent housing price declines and shorten the housing market recovery time.”
March 15th, 2008 at 1:43 am
My only question is , are the financial problems going to spread beyond subprime?
March 15th, 2008 at 6:39 am
Jake,
The problems have already spread way beyond subprime….
have you taken a look at the stock market lately? there is no rosy picture to paint there, and it’s going to get a lot worse in the coming months…… we are going to see a couple “Black *insert day of the week here*” We are going to see more bank runs.
Orange County is cutting teachers across the board because we no longer have enough tax money to pay for them all. The social issues in the OC will take center stage as this progresses. We lived in excess now we will have to live without.
Consumer spending is way down. The home ATM is shut off. This is just the first step. Some jobs have already been lost, but as this progresses there will be more job loss.
If we are lucky we will just have the worst recession in the history of the US and avoid the Great Depression Part II
March 15th, 2008 at 6:59 am
Irony and T r o l l s are seldom recognized in blogs.
But w i fe will always be screened for.
March 15th, 2008 at 7:04 am
jake I think what is ironic is that in a couple years many people in the OC will only be able to purchase goods with cash
hard earned cash !
credit is going to get so tight the price of plastic is going to go down
March 15th, 2008 at 8:59 am
The illusion of democracy….
The $200 billion bail-out for predator banks and Spitzer charges are intimately linked.
by Greg Palast Global Research, March 14, 2008
GregPalast.com
While New York Governor Eliot Spitzer was paying an “escort” $4,300 in a hotel room in Washington, just down the road, George Bush’s new Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion in a tryst with mortgage bank industry speculators.
Both acts were wanton, wicked and lewd. But there’s a BIG difference. The Governor was using his own checkbook. Bush’s man Bernanke was using ours.
This week, Bernanke’s Fed, for the first time in its history, loaned a selected coterie of banks one-fifth of a trillion dollars to guarantee these banks’ mortgage-backed junk bonds. The deluge of public loot was an eye-popping windfall to the very banking predators who have brought two million families to the brink of foreclosure.
Up until Wednesday, there was one single, lonely politician who stood in the way of this creepy little assignation at the bankers’ bordello: Eliot Spitzer.
Who are they kidding? Spitzer’s lynching and the bankers’ enriching are intimately tied.
How? Follow the money.
The press has swallowed Wall Street’s line that millions of US families are about to lose their homes because they bought homes they couldn’t afford or took loans too big for their wallets. Ba-LON-ey. That’s blaming the victim.
Here’s what happened. Since the Bush regime came to power, a new species of loan became the norm, the “sub-prime” mortgage and it’s variants including loans with teeny “introductory” interest rates. From out of nowhere, a company called “Countrywide” became America’s top mortgage lender, accounting for one in five home loans, a large chuck of these “sub-prime.”
Here’s how it worked: The Grinning Family, with US average household income, gets a $200,000 mortgage at 4% for two years. Their $955 a month payment is 25% of their income. No problem. Their banker promises them a new mortgage, again at the cheap rate, in two years. But in two years, the promise ain’t worth a can of spam and the Grinnings are told to scram - because their house is now worth less than the mortgage. Now, the mortgage hits 9% or $1,609 plus fees to recover the “discount” they had for two years. Suddenly, payments equal 42% to 50% of pre-tax income. Grinnings move into their Toyota.
Now, what kind of American is “sub-prime.” Guess. No peeking. Here’s a hint: 73% of HIGH INCOME Black and Hispanic borrowers were given sub-prime loans versus 17% of similar-income Whites. Dark-skinned borrowers aren’t stupid - they had no choice. They were “steered” as it’s called in the mortgage sharking business.
“Steering,” sub-prime loans with usurious kickers, fake inducements to over-borrow, called “fraudulent conveyance” or “predatory lending” under US law, were almost completely forbidden in the olden days (Clinton Administration and earlier) by federal regulators and state laws as nothing more than fancy loan-sharking.
But when the Bush regime took over, Countrywide and its banking brethren were told to party hardy - it was OK now to steer’m, fake’m, charge’m and take’m.
But there was this annoying party-pooper. The Attorney General of New York, Eliot Spitzer, who sued these guys to a fare-thee-well. Or tried to.
Instead of regulating the banks that had run amok, Bush’s regulators went on the warpath against Spitzer and states attempting to stop predatory practices. Making an unprecedented use of the legal power of “federal pre-emption,” Bush-bots ordered the states to NOT enforce their consumer protection laws.
Indeed, the feds actually filed a lawsuit to block Spitzer’s investigation of ugly racial mortgage steering. Bush’s banking buddies were especially steamed that Spitzer hammered bank practices across the nation using New York State laws.
Spitzer not only took on Countrywide, he took on their predatory enablers in the investment banking community. Behind Countrywide was the Mother Shark, its funder and now owner, Bank of America. Others joined the sharkfest: Goldman Sachs, Merrill Lynch and Citigroup’s Citibank made mortgage usury their major profit centers. They did this through a bit of financial legerdemain called “securitization.”
What that means is that they took a bunch of junk mortgages, like the Grinnings, loans about to go down the toilet and re-packaged them into “tranches” of bonds which were stamped “AAA” - top grade - by bond rating agencies. These gold-painted turds were sold as sparkling safe investments to US school district pension funds and town governments in Finland (really).
When the housing bubble burst and the paint flaked off, investors were left with the poop and the bankers were left with bonuses. Countrywide’s top man, Angelo Mozilo, will “earn” a $77 million buy-out bonus this year on top of the $656 million - over half a billion dollars - he pulled in from 1998 through 2007.
But there were rumblings that the party would soon be over. Angry regulators, burned investors and the weight of millions of homes about to be boarded up were causing the sharks to sink. Countrywide’s stock was down 50%, and Citigroup was off 38%, not pleasing to the Gulf sheiks who now control its biggest share blocks.
Then, on Wednesday of this week, the unthinkable happened. Carlyle Capital went bankrupt. Who? That’s Carlyle as in Carlyle Group. James Baker, Senior Counsel. Notable partners, former and past: George Bush, the Bin Laden family and more dictators, potentates, pirates and presidents than you can count.
The Fed had to act. Bernanke opened the vault and dumped $200 billion on the poor little suffering bankers. They got the public treasure - and got to keep the Grinning’s house. There was no “quid” of a foreclosure moratorium for the “pro quo” of public bail-out. Not one family was saved - but not one banker was left behind.
Every mortgage sharking operation shot up in value. Mozilo’s Countrywide stock rose 17% in one day. The Citi sheiks saw their company’s stock rise $10 billion in an afternoon.
And that very same day the bail-out was decided - what a coinkydink! - the man called, “The Sheriff of Wall Street” was cuffed. Spitzer was silenced.
Do I believe the banks called Justice and said, “Take him down today!” Naw, that’s not how the system works. But the big players knew that unless Spitzer was taken out, he would create enough ruckus to spoil the party. Headlines in the financial press - one was “Wall Street Declares War on Spitzer” - made clear to Bush’s enforcers at Justice who their number one target should be. And it wasn’t Bin Laden.
It was the night of February 13 when Spitzer made the bone-headed choice to order take-out in his Washington Hotel room. He had just finished signing these words for the Washington Post about predatory loans:
“Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which he federal government was turning a blind eye.”
Bush, said Spitzer right in the headline, was the “Predator Lenders” Partner in Crime.” The President, said Spitzer, was a fugitive from justice. And Spitzer was in Washington to launch a campaign to take on the Bush regime and the biggest financial powers on the planet.
Spitzer wrote, “When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners the Bush administration will not be judged favorably.”
But now, the Administration can rest assured that this love story - of Bush and his bankers - will not be told by history at all - now that the Sheriff of Wall Street has fallen on his own gun.
A note on “Prosecutorial Indiscretion.”
Back in the day when I was an investigator of racketeers for government, the federal prosecutor I was assisting was deciding whether to launch a case based on his negotiations for airtime with 60 Minutes. I’m not allowed to tell you the prosecutor’s name, but I want to mention he was recently seen shouting, “Florida is Rudi country! Florida is Rudi country!”
Not all crimes lead to federal bust or even public exposure. It’s up to something called “prosecutorial discretion.”
Funny thing, this “discretion.” For example, Senator David Vitter, Republican of Louisiana, paid Washington DC prostitutes to put him diapers (ewww!), yet the Senator was not exposed by the US prosecutors busting the pimp-ring that pampered him.
Naming and shaming and ruining Spitzer - rarely done in these cases - was made at the “discretion” of Bush’s Justice Department.
Or maybe we should say, ‘indiscretion.’
Greg Palast, former investigator of financial fraud, is the author of the New York Times bestsellers Armed Madhouse and The Best Democracy Money Can Buy.
Greg Palast is a frequent contributor to Global Research. Global Research Articles by Greg Palast
March 15th, 2008 at 9:04 am
Nice cut and paste job of irrelevant information, Scott E. ( Snore.)
Rants ( related to B-Rant? ) asked Sighburbirdbrain ( whoever THAT is.) Does he ever read or watch anything that happens outside of OC?
While I do, I don’t give that National or Worldly news as much credence as some people on this blog. ( Does the name NationalBubble ring a familiar note? )
Here are some excellent reasons why I don’t: ( Courtesy of the U.S. Bureau of Labor, California Employment Development Department, U.S. 2006 Census, DataQuick, Realfacts, California Department of Finance, Southern California Governments, Forbes.)
“Defaults and Foreclosures:
The media is great at announcing record foreclosures but, as the year ( 2007.) came to an end, the average monthly defaults were at 1,149; lenders only foreclosed on 347 of those homes. Homeowners in default emerge successfully 70% of the time by either refinancing their home or successfully selling it. Approximately 69% of the foreclosures were under $500,000 and almost 94% are under $750,000. The numbers may seem large but, when you realize that Orange County has 634,000 homeowners, the percentages become very, very small.
Incomes and Wealth:
Orange County has a median income of approximately $75,000, which is the 6th highest in the State. This is amazing when you consider how many workers earned less than $36,000 last year. The median income is really much higher, because more than 12% comes from investments, interest and capital gains - not wages and salary!
Merrill Lynch has 6 offices in Orange County with $24.2 billion under management. There are 42,120 families with $1 million to invest (excluding primary residences), and 11% of households have a net worth exceeding $1 million dollars. Orange County is home to 8 billionaires; ranks #3 in the U.S. with 116,517 millionaires; 67,729 earn more than $200,000; and 30% of households earn in excess of $100,000. In Orange County, 14% of our market is 2nd homes or income properties, and 22% of our properties have no loans!
Population and Employment:
Orange County’s population only grew by 23,000 in the past 12 months, but still ranks 2nd in the state with a total population of 3,098,000. This county is a net in-migration county; 16% of immigrants are Asian and 33% are Hispanic. The California Department of Finance predicts our population will grow to 4 million by 2050.
The counties work force has 1.57 million workers and ranks 5th in the NATION in the total number of jobs. The county’s unemployment rate is 4.3%, ranking it the 3rd lowest in the State. Income growth for ‘07 was 4.5%.
Housing and Rents:
Orange County is one of the most densely populated counties in the United States. Builders are phasing out the single family detached home, with very few being built after 2010. Planners are developing more clustered housing and vertical unit developments. This dynamic county ranks 3rd in the U.S. for apartments (due to the high median price of homes) and retail growth (solid economic prospects). OC ranks 4th in the U.S. in rental rate increases at 6.4%, due to strong demand verified by the high occupancy rate of 95.5%.
Source: U.S. Bureau of Labor, California Employment Development Department, U.S. 2006 Census, DataQuick, Realfacts, California Department of Finance, Southern California Governments, Forbes”
After living here for 40 years, I have come to know OC as God’s Country, a totally unique area, that people have continued to flock to, just like me, and that phenomenon is NOT going to change anytime soon. You want to talk about Detroit, you’re talking to the wrong person. I’ll opt for relevance every time.
March 15th, 2008 at 9:27 am
Sighburrdood - the difference between you and I is that you still believe what the government tells you.
March 15th, 2008 at 9:49 am
Thanks for the stats Sighburrdoood but Scott E makes a good point. These are mostly government sources and definately deserve to be looked at with some suspicion. Regardless of that, the current economic situation and current real estate data show that the OC is, and will continue to be, negatively effected. Believing otherwise is very odd from a person who appears to be into data, trends, etc.
March 15th, 2008 at 9:58 am
The big problem with the above argument is it ignores the fundamental problem, which is that housing prices were not buoyed by the high income of OC dwellers ($75,000 while high for the country, is still way out of proportion to the housing price relative to other regions), or by population growth (even assuming immigrants are coming in, how many of these people can actually afford a house? They are probably struggling to rent!) but instead by a speculative furor.
More people in the past 4-5 years have bought houses not just for a place to live but because they wanted to jump on the bandwagon of the investment that never goes down. And indeed it did go up tremendously and WAS a ‘good’ investment. Until now.
What has happened is those same people who bought for these reasons have very little at stake in these houses, particulaly exacerbated by the no money down, stated income loans, that they are essentially walking away and letting the banks take the loss.
Which is why the Fed is scared out of its wits end as this is and will probably take down some major banking and investment players in the financial system who have big stakes in real estate.
No investor with any sense is wanting to touch real estate right now as more and more people are realizing that there is indeed a housing bubble which is on its way to deflating.
Although the number of foreclosures are a very small percentage of overall homes in the region, this is misleading. Because it is these foreclosures which are actually selling and creating the price point/comps for the rest of the housing, thus bringing down prices.
http://calculatedrisk.blogspot.com/2008/03/dataquick-socal-home-sales-uitra-low.html
This will start in the lower priced housing, but eventually trickle into the higher priced neighborhoods as the differential between prices grows to such a point that people will not want to pay that much of a premium to live in a so called “better location” (newport beach vs. say irvine or orange).
Orange county is not immune to housing deflation; in fact it is likely more prone as there was more speculation here than say in North Carolina.
Real estate is in big trouble; that’s a given. The big question is, how big is this going to get for the rest of our economy? I think people are getting very scared at this point, including our own Fed. They will probably lower rates 0.75 to 1 percent, but what will that do? Not much. The Fed and the government simply do not have the tools or the power to stop the deflation of a giant speculative bubble.
March 15th, 2008 at 10:19 am
Sighdude- Unemployment was up in Feb. and will be higher in March.
http://www.calmis.ca.gov/file/lfmonth/oranpds.pdf
No insult here but I believe you must be paid by the NAR. Who cant get a forecast right! Weather forecasters are more accurate.
By the way-This storm is only getting stronger.
OC pricing has 30% downside risk. No upside gain for years.
ticker Assets Equity Lev (Assets/Eq)
——————————
GS $1100B $37.7B 29.2
MS $1000B $27.2B 36.8
MER $1000B $26.8B 37.3
LEH $690B $18.3B 37.8
BSC $395B $11.8B 33.5
3% decline wipes out everyone of them. Ya think it’s going to happen.
As Scott says you still believe what the govt tells ya. That is being kind of naive in this moment.. Good luck to ya. I hope your buying homes as someone needs to..Thanks for supporting the NAR and your local real estate agent. They need it..
March 15th, 2008 at 10:21 am
Thanks for the facts, Sigh. All those things are why every last person here is itching to own Orange County property.
March 15th, 2008 at 10:27 am
And I DO believe your stats are accurate. I am not one who buys into conspiracy theories. I keep hearing how OC has become a ghosttown, but I see just the opposite in my daily life. Someone is wrong.
March 15th, 2008 at 10:39 am
Not having a ton of time to go through dudes numbers. A few things stand out.
1. Most of these numbers appear to be 2006 #’s. Alot has happend in the last 2 years that make much of this information useless.
2. Even at the current median of 520K that is still not affordable for a family that makes 100K. So that means that more than 70% of the families in the OC cannot afford a median priced home. This would lead me to think that less than 30% (2.1 Million people) of the population is supposed to be able to buy up 70% of the homes in the county. It is still not affordable.
3. The economy of Orange County may not be being hit as hard as others. That being said, there is no true Orange Curtain. People who live in other counties, shop, play and do business here. With layoffs, and rising prices our economy here will be hit just as much as anywhere else.
Im not sure where Dude lives, but some here need to drive away from the beach cities go to santa ana, stanton, parts of anaheim, garden grove, etc. etc. You will see the “real OC”. The people who keeps life churning for those on top.
This place is not that special…for certain there are some areas that are, but it isnt reflective of the county as a whole.
March 15th, 2008 at 10:42 am
Slight error above. The 2.1 Million people are those that cannot afford to buy a median priced home or above.
March 15th, 2008 at 10:50 am
“So that means that more than 70% of the families in the OC cannot afford a median priced home.”
Over 60% of people currently own homes, so your stats are a little bit flawed.
March 15th, 2008 at 10:53 am
“Thoughtful Says:
March 15th, 2008 at 10:21 am
Thanks for the facts, Sigh. All those things are why every last person here is itching to own Orange County property.”
Not at currently highly inflated and unsustainable prices. $104K for a traditional 20% downpayment based on the current median price? $60K downpayment for a “starter” 300K house. Yeah right. I’d like to know what the government stats say about the median cash worth in OC.
March 15th, 2008 at 10:58 am
Thoughtful Says:
March 15th, 2008 at 10:50 am
“’So that means that more than 70% of the families in the OC cannot afford a median priced home.’”
Over 60% of people currently own homes, so your stats are a little bit flawed.”
Probably more like 70% of OC families could not afford a median priced home if they started from scratch. What would be interesting to find out is what percentage of new home buyers could afford an entry-level house. As with any open-ended systems, the RE market must replenish or perish.
March 15th, 2008 at 11:05 am
Except they are not starting from scratch. I get so tired of the “how many people can” rhetorical questions. The answer is a lot. Now, if you have hard facts, please share.
March 15th, 2008 at 11:09 am
Thoughtful Says:
March 15th, 2008 at 11:05 am
“Except they are not starting from scratch. I get so tired of the ‘how many people can’ rhetorical questions. The answer is a lot. Now, if you have hard facts, please share.”
And I get so tired of people forgetting that move up buyers need new home buyers who do start from scratch. That’s a hard fact. These “rhetorical” questions highlight how highly unbalanced the current RE market is.
March 15th, 2008 at 11:23 am
DQNews just relaeased OC price per square foot data for resale homes. (Again, this only takes into account RESALE HOMES and not new homes).
If you want to look at the current price per square foot data then follow the link below, scroll down to Orange County and read the first bold-faced line.
http://www.dqnews.com/ZIPLAT.shtm
2006 $/SqFt
Jun 444
Jul 433
Sep 435
Nov 420
2007
Jan 427
Feb 420
Mar 418
April 424
May 415
Jun 419
Jul 413
Aug 404
Sep 379
Oct 381
Nov 369
Dec 353
2008
Jan 345
Feb 335
So looks like prices have dropped from $444 to $335 per sqft - which calculates out to a 25% drop in prices since June 2006.
Median price continues to be a lagging indicator of the real drop in home prices.
March 15th, 2008 at 11:30 am
To think the government can fix the problem is similar to the Fed thinking that easy money can solve all problems — when, to repeat, easy money is what brought us to this sorry state in the first place. I would just say that in order to prepare for what lies ahead, we need to understand the path that brought us here.
Housing is a phony market set up by the fat cat banks, Federal Reserve, greed investors, Wall Street goofs, and Master George W. Bush and Wizard Alan Greenspan. These toxic loans are going to continue to prop up artificially inflated housing prices. California is speculator-driven demand with cheap and easy money that triggered a boom in home construction, sales and prices.
The Fed cuts will nosedive the general economy and stock market, but it will only slow the inevitable market corrections which will simply take an extra year to reach bottom as a result of the interest rate cut. The laws of economics can’t be avoided indefinately. Because of cash liquidity, Wall Street can sink or rise in a matter of days or weeks.
Because of the lack of liquidity, real estate markets take multiple years to work-out the economic inbalances.
Finally, in light of all the government bailout attempts: Let the government get out of the way, enforce the rules that exist, and let the housing markets takes its own course.
Here we are, tenants, paid our rent on time, went through credit checks and everything else, and now, all of a sudden, the landlord’s going bad on a mortgage. We end up to pay for bailout.
Home prices vs. the ability to pay for it still needs to be worked out in a big - big way. They treated their homes as piggy banks instead of as savings accounts. Piece by piece, some gave away their homes by tapping equity to take out cash to pay for big cars, new TVs, expensive weddings or vacations. The Bush administration has cooked up for foreclosure-facing mortgage holders and their lenders. So how are we going to pay for this? Is the president going to suggest that we raise taxes to pay for it? Doubt that!!!
So I guess we’ll just print some more money, put our children deeper into debt and let someone else worry about it… Banks and Lenders are homeowners. The rich, powerful, and greedy get what they deserve–NO BAILOUT.
March 15th, 2008 at 11:33 am
This discussion between sighborhood and the rest is pretty useless.
If both parties do not agree to discuss with some good faith then it is easy for either side to constantly use the inaccuracy of the English language to essentially filibuster. And with the ability to have multiple names of the same person filibustering you get an endless filibuster.
The bears should stop debating whether OC housing is affordable or not. The filibustoring bull will and has argued that it is for months. He will do so until he gets tired of blogging or someother reason forces him to retire. No amount of evidence or well constructed arguments will effect him in the slightest.
The real question for the bears should be how unaffordable is it. A little , a lot , an awfully lot. This is where the argument or discussion should proceed.
Look we can speculate and perhaps show that OC employment is decreasing. But then the question is not whether it is but by how much. And given how much , how many of these people will leave OC and when. It is this kind of argument that will give a clearer picture of how bad it is rather than a debate of it is good or bad. I know the one bull will say this is a bitter renter. Like I say it is a fillibuster.
So again if you can make inroads into making a picture of OC residents balance sheets and incomes you can figure out some of where this thing is going.
Or you can debate with the filibuster bull under his many names with his many forms of insult, some about renting some about your intelligence and some about your sex lives.
That where “THE BULL ” is going.
It is not a conspiracy , it takes two to conspire. This is one guy with a lot of time on his hands and a lot of anger.
Oh and I am looking into gold , so that keeps me busy.
March 15th, 2008 at 11:35 am
sighburdude doesnt give “that national news much credence”
but he posts “facts” from the government LLOOLLL
the same government who told us that there was NO INFLATION last
month as gas prices hit record highs yeah youre a real a man of genius lloolll @ribsplitter
http://www.latimes.com/business/la-fi-petruno15mar15,1,5280862.story
March 15th, 2008 at 11:45 am
Carlos,
The federal reserves mandate may be stabilize markets. If a bank loses all its capital than the bank may shut down and this could cause everyone to stop working and that could essentially cause a culture to break down. So we agree we don’t want that.
The fed is suppose to step in stop the bank from failing. But not by making the investors of the bank whole but by maintaining the functioning of the bank. In other words the bank essentially goes out of business as a private concern but the fed steps in to make sure that the business of the bank continues. It does so by using public money to recapitalize the bank if required, but the public money used is owned by the public, it is not transfered to the control of the insovlent bank.
This is in general how the fed should act with the shadow banking system like Bear Stern. Bear Stearn loses its equity and the government steps into keep the transactions that Bear Conducts flowing.
Capital flows are needed by the market place. If they go away because private entities made mistakes, then the government steps in to provide capital flows but it does not give the capital to the private orgs.
This stops a shutdown of the economy and it means that those who made bad bets lose those bets. Just like before this those who made good bets kept the winnings.
It really is pretty much that simple. IF you disagree or want to add to this story please explain.
I am not so interested in the “THE BULLS&