If you really, really want it to be true, it usually isn't.
Codetalkers: The IMF says it is “considering participating” in the European bailouts by providing the “leverage” to the EFSF, which is just another way of saying the Fed is going to saddle up and ride... the US taxpayer... to the rescue?
Receding Horizons: Consumers - burdened with lower wages, falling home equity, worries about unemployment, fear for the global economy, and pressured from rising prices - has a decidedly sour outlook on the near future, as reflected in the latest consumer confidence survey, which is at one of its lowest points on record. Frugality is not quite what the retailers were looking for this season.
Pig/Lipstick: Some are saying that the 3.8% y/y decline in house prices reflected in the latest Case-Shiller report is Good News because it was not worse. Not to rain on the parade, but this makes 14 out of 15 consecutive declines for the C/S index.
Map Reading: One of the hidden aspects of the new-and-improved HARP plan is that those bright new mortgages with the shiny new interest rates will be recourse loans. That means you can't walk away. That means that if you are forced to sell your underwater house, you will owe the bank – forever – the amount you cannot pay back. The debt will follow you to the grave. (Or until bankruptcy?) That's just one improvement. Another is that the FHFA will not force lenders to buy back fraudulent loans if “underwriting problems” surface at a later date.
Ignorance is Bliss: Citi has tried to answer the question: Can Europe ruin the world? Don't know, don't want to find out.
That's A Baby! When is someone going to look in the stroller and say that a 60% haircut on Greek bonds is a “credit event” and force the unwinding of trillions in Greek and other European sovereign bonds CDS?
Just In Time For Christmas: Corporations are lobbying hard for a “tax holiday” that would let them bring their overseas profits back to the US with little or no taxation. It would be a reward for their off-shoring jobs and dodging US taxes for years. The corporations claim this will permit them to create more jobs here. Pull the other one, it's got bells.
Last Words: The Economic Cycle Research Institute says the US is headed back into another recession. Worse, they say “there’s nothing that policy makers can do to head it off.”
Napalm in the Morning: Proving once again that statistics have a Democratic bias, the CBO reports that the incomes of the top 1% of the US population increased 275% between 1979 and 2007, the 60% in the middle saw their incomes grow nearly 40%, and the bottom 20% got an increase of less than 1% a year.
Hat Tip: Police and NY State troopers in Albany declined to enforce orders from the governor and the mayory to arrest #OccupyAlbany protesters because – in their view – arresting peaceful protesters would do far more harm than the protesters were causing. Cops in Oakland, CA, did not see things that way.
A Little Help, Please: Does the paradox of thrift – the idea that saving is a good thing for me to do but a bad thing for everyone to do – apply to all savings? Certainly if my 'saving' goes to pay off a debt, it is deflationary. But what if my 'saving' is in the form of investing in some productive enterprise? I'm not spending to encourage the economy, but my savings are being spent by the enterprise, which should have the same effect as my buying another salad spinner.
Porn O'Graph: Read 'em and weep.
7 comments:
My understanding is that hapless HARP refinancers are converting their mortgages to recourse loans - which means, as you say, that if there's still money owed after the lenders get the house, they can get the money out of your hide. Nevertheless, you don't owe it FOREVER - you can still get out from under via bankruptcy. This is in contrast to student loans, which can in fact never be shed.
Thanks, charley, I thought that the recourse mortgage was a diamond.
ckm
If they really want to make a difference for those drowning masses they could lop off a chunk of principal and drop the APR without all the re-closing. But that would deprive the banks of their pound o flesh, which is the ultimate purpose of all these crappy mortgage programs.
At some point gravity has to prevail, and the mess has to hit the floor. Whether it be consumer or corporate.
here's something of a counterpoint to the debunking of the paradox of thrift:
http://www.nytimes.com/2011/10/26/opinion/its-consumer-spending-stupid.html
"investing in some productive enterprise".... YOU IMPUDENT WENCH!!!!!!
If you think for one minute that you can use your capital to invest in productive capacity, you are going to have to do it over Wall Streets dead carcass. We got laws for people like you. You can't do anything with your money except spend it or give it to wall street to "invest" it for you. If you try to make productive work that will return your capital with dividends, we will tax the ever living shite out of you, unless you hire Wall Street to "manage" your investment nearly tax free.
rjs - I'd already seen (and dismissed) Livingston's op-ed pimping his book. A agree with Dean Baker's comment, that "when one writes on economics, it does help to have some familiarity with the topic."
See:http://www.cepr.net/index.php/blogs/beat-the-press/a-bit-of-confusion-on-consumption
ckm
ckm,
i dont know; rereading livingston's article, i dont find anything i'd strenuously object to, though i couldnt say that would be true of his book...his dismissal of the trade deficit, that dean objected to, was almost an aside...
investment in equipment & software is the only component of GDP that's held to trend thru the past few years, but that alone is unsustainable...no one continues to spend on more plant & equipment if no one buying the output...
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