Evilbore's Official Political\Media Crap Thread

[Flannel Boy]

Why aren't you asleep?

[ToxicAdam]

I slept from 8pm-3am. :O Now, I have to goto work in 60 minutes.


Also:

[ToxicAdam]

So, there are some rumors going around some blogs that the new stimulus bill triples each Congresspersons "petty cash" fund to 93,000 dollars. Hasn't been confirmed by anyone of note, but if it is true, it's just ridiculously arrogant.   

[Ganhyun]

http://politifact.com/truth-o-meter/

Seems like Obama broke his first campaign promise.

http://politifact.com/truth-o-meter/promises/rulings/promise-broken/

I bet this got/gets alot of angry responses.

[Mandark]

The most efficient way to get money back into the economy is a (temporary) reduction in payroll tax across the board. Congressional Democrats will never do it because it would leave out some of their core constituents.

Well, that's not true.  Unemployment insurance, food stamps, transfers to state governments, and presumably things like COBRA and Medicare funds are more efficient.  Higher multipliers and quickly disbursed.

Infrastructure spending has a high multiplier but is harder to spend quickly.

Why would Democrats oppose a FICA holiday?  Because it would starve Social Security.  I suspect that's also a reason you see people like Larry Lindsay proposing it (secondary to a general distrust of government spending, natch).

If the GOP proposed replacing the current tax cuts in the stimulus bill with a FICA holiday and directed that an equal amount of the general fund revenue go towards the SS trust to make up for the shortfall, you'd probably wind up with a lot of Democratic support.

[ToxicAdam]

I didn't even think about that. That would be a good compromise and include the vast majority of Americans.

[Mandark]

Would never happen, though.  If the other tax cuts were taken out, Republicans would demand cuts to the parts they consider welfare (any funds going to income tax non-payers), and those programs are probably sine qua non for Democratic support (and rightly so).

I think the GOP miscalculated.  They don't have the horses to stop passage, and Obama's riding too high right now for them to win a PR fight without him screwing up badly.  If they have a chance to make some modifications to a bill that's going to pass anyway, they should take it.

Remember when they scuttled the auto bailout and Bush wound up doing it through the TARP, without the restrictions they could have put in place?  I think it's the same dynamic.

[ToxicAdam]

GOP knew they didn't have the votes or political power to do anything. Reading what Steele has said, they are going to turtle up and try to gain back their "fiscal responsibility" cred that Bush and co. have obliterated.

They are merely hoping for an anti-incumbent backlash to propel them back if this thing lingers on.

[AdmiralViscen]

Not looking good for that, over 80% of Americans polled feel that this will take more than a year to work, yet they still support its passage (by a lower percentage).  That's a pretty big window for the Dems


http://www.usatoday.com/news/washington/2009-02-02-poll-stimulus_N.htm

WASHINGTON — Americans overwhelmingly want Congress to pass an economic stimulus bill, a USA TODAY/Gallup Poll finds, but expectations are low that it will have much of an effect on their own finances or turn the economy around this year.

About two-thirds of those surveyed predict that a package would make the nation's economy a lot or a little better. When it comes to their own family finances, however, just over half say it either would have no effect or even make things worse.

"It's sort of paradoxical: They're both supportive and pessimistic," says Charles Franklin, a political scientist at the University of Wisconsin at Madison who studies public opinion. Still, "you have your political leaders saying this is going to be a long process, so maybe it's not so surprising that voters would pick up the idea that there's no quick fix."

That pragmatic attitude could give President Obama some breathing room to show results after passage of a stimulus. By 85%-15%, Americans say the package will take longer than this year to improve the economy.

There are divisions over just what the package should include. While just 17% of those surveyed say Congress should reject a stimulus bill altogether, the rest are divided almost evenly over whether Obama's plan should be passed as proposed or undergo major changes.

[siamesedreamer]

All this talk about cramdowns, 4% 30-year mortgages and $15k tax credits for home purchases is fucking infuriating. Why can't they leave the market alone? Home prices were way too high. This is a much needed correction for the next generation of home buyers. Let the bad debt (all of it - mortgages, credit cards, student loans, etc.) come out into the open and either pay it down or default on it. Its extremely painful, but how the hell else are you going to fix this:

[Rman]

Yeah.  Just the prices fall.  I don't get home buyers credit at all. 

Time Magazine has a great article on why banks are now worth much less after the receiving the TARP funds.

http://www.time.com/time/business/article/0,8599,1874702,00.html

[ToxicAdam]

The housing market is so locked up, AT ALL LEVELS, you need to add some grease somewhere. You really think a mere 15k tax credit is going to influence someone to buy an overpriced home (in the +400k range)?!

No. But it could nudge the people to buy the 100-200k homes and are currently languishing on the market for a year+.

[Beardo]

The housing market is so locked up, AT ALL LEVELS, you need to add some grease somewhere. You really think a mere 15k tax credit is going to influence someone to buy an overpriced home (in the +400k range)?!

No. But it could nudge the people to buy the 100-200k homes and are currently languishing on the market for a year+.

Whats wrong with letting prices fall to what the homes are worth i.e. what people would pay for them.

[ToxicAdam]

I guess it depends what you deem as acceptable losses.

I think 15k is a mere pittance to get some people to come out of their shell and breathe some life into the housing market. Like I said, it's not going to be a huge incentive for people living in the McMansions or boomtowns, but it will greatly help the people in most of America that didn't share in the great real estate bubble of the past decade, but are being punished anyways.

 

[Beardo]

The way I see it, the people who didn't participate in the housing market in the past decade should and are the real winners. They can now buy houses for much much cheaper than all the other bozos who bought properties that couldn't afford them.

[ToxicAdam]

You're not very smart.


Not be mean, but people living in areas that had modest growth during the boom years were not able to gain any windfalls from selling their homes. Now they are sitting on homes that have the value they had in the late 90s (or even later) and are locked into them.

[siamesedreamer]

The only way they're being punished is by the government trying to artificially prevent a full market correction.

All these things they're implementing ignore the longterm demographics of the housing market. Boomers are going to be downsizing for years. This thing isn't going away. A 4% government backed mortgage is absolutely fucking absurd. Anyone here really think 30-year treasuries are going to stay below 4% for more than the next six months? With all the debt we're about to unload on the market? After that, will they ever be that low again? In the very likely event of a bond rating downgrade? Gimme a break. They're creating another bubble in which they're going to lose a shit-ton of money and all of us who've been prudent will once again foot the bill.

[ToxicAdam]

Here's an example:

Somebody that bought a 20 year old house in 1995 for 200k, maybe saw their home value raise to about 240-270k at the height of the real estate boom (in a modest region of the country). At some point, they had their taxes and insurances adjusted off of that inflated figure.

Now they are looking at a home that has dropped back to the original 200k (and maybe lower if they really need to sell it). So when you consider all the extra money they paid in taxes/insurance and home improvements that are worthless .. how were they not punished?

So, now it's 15 years later and you have a couple that either wants to move down or move up the property ladder (either through family growth or they want to downsize their lifestyle) and they can't because everyone is locked up. You can't move until you sell.

 

[Brehvolution]

Or how does it help a smuck like me who bought his house 5 years ago and probably owe more than it is worth now. Any bank going to renegotiate that?

[ToxicAdam]

Or how does it help a smuck like me who bought his house 5 years ago and probably owe more than it is worth now. Any bank going to renegotiate that?

Some people are just walking away from houses like that.

That's the danger of letting house prices fall even further than they are now. It will trigger off another wave of bank bailouts to cover the new toxic debt.

[Mandark]

Subsidizing house prices to keep them artificially high is just a bailout through a different venue, with a different set of side effects.

If the banking system really is insolvent or close to it, there might not be any good options.  When this started I was hoping the US would be able to come out of it making a profit, like the Scandinavian countries in the 90's, but I think that's out the window now.

[ToxicAdam]

Is offering a 15k tax credit really "subsidizing housing"? I see it more as a minor incentive for people to take the plunge on a house.

To me, it's far worse to absolve people of their past "toxic debt" than offering the prudent people a break in moving up/down the property ladder.

[siamesedreamer]

Or how does it help a smuck like me who bought his house 5 years ago and probably owe more than it is worth now. Any bank going to renegotiate that?

That's the point of the cramdowns. The problem with them though is that they are theoretically repricing the house in the middle of the correction.



I need to update the chart because I believe its more like -22% now after the latest numbers. But, you get the point. The government is trying to prevent prices from reverting back to historical norms. Get a cramdown now and you could be underwater again by this time next year. Maybe they would cram it down enough to take that into account though. Not sure...

(sorry chart is so big...can't resize it for some reason)

[Mandark]

Sure it is.  Offering people an incentive to buy something, in the form of the government giving them money (or interest-free loans or loan guarantees or insurance), is subsidizing that product.

[Ganhyun]

wow, where did that housing bubble chart come from?

[ToxicAdam]

Sure it is.  Offering people an incentive to buy something, in the form of the government giving them money (or interest-free loans or loan guarantees or insurance), is subsidizing that product.

Technically you are right. But government subsidies are traditionally ones that last for years and years. The 15k proposal from the Republicans was rumored to only last for a year. Hardly enough to "artificially inflate" a market.

[Mandark]

wow, where did that housing bubble chart come from?

IF ONLY THERE WERE SOME HINTS INCLUDED ON THE CHART, LIKE A PARAGRAPH TELLING US WHO MADE IT OR INFORMATION ON WHERE IT WAS PRINTED.

[Ganhyun]

wow, where did that housing bubble chart come from?

IF ONLY THERE WERE SOME HINTS INCLUDED ON THE CHART, LIKE A PARAGRAPH TELLING US WHO MADE IT OR INFORMATION ON WHERE IT WAS PRINTED.

Well my snarky friend, just because it says robert J. Shiller made it and it was originally from the Times, that doesn't mean thats where HE got it from.

Sorry, can't piss me off today. I'm in a good mood.

[siamesedreamer]

I got it from a guy on another board who I think is an economist on Wall Street. Not sure where he got it from.

[ToxicAdam]

[youtube=560,345]KogebxJkHig[/youtube]

Here's the funniest/saddest thing you will ever see.

[Beardo]

Is offering a 15k tax credit really "subsidizing housing"?

Yes.

[ToxicAdam]

Or how does it help a smuck like me who bought his house 5 years ago and probably owe more than it is worth now. Any bank going to renegotiate that?

Some people are just walking away from houses like that.

That's the danger of letting house prices fall even further than they are now. It will trigger off another wave of bank bailouts to cover the new toxic debt.

I thought this story tied into this...



ORANGE COUNTY, Fla. (WOFL FOX 35, Orlando) -- Foreclosed homes are already a tough sell in some neighborhoods. But now some homes are being trashed.

Homeowners angry with the banks over foreclosure are ripping items out of the home to sell. One house just off Lee Vista in South East Orange County is missing the air conditioner.
 
Inside the 2,400 square foot home is missing the counter tops, all the appliances and even the kitchen sink. Someone also left stains on the rug throughout the home and punched holes marked up the walls with crayon.

The home is only two years old and back then sold for close to $400,000, now the bank is hoping to get $169,900 if they are lucky

Keller Williams’s realtor Josh Dubin says this kind of mess is what he’s seeing more and more.

“It’s these people on their way out who will sell all their appliances for $500 because they need the cash rather than leave it,” Dubin said.

He added trashed houses are harder to sell and they bring down the value of neighboring homes.

Dubin and his colleagues say one in five foreclosed homes is found in some form of disarray

[siamesedreamer]

The beginning of the end:

The US Treasury on Wednesday opened the floodgates of government bond issuance, revealing plans for a record debt sale in February and more frequent auctions in the months to come.

The announcement came amid growing fears about US government deficits and sent the yield on the benchmark 10-year Treasury note rising to 2.95 per cent, up from just over 2 per cent at the end of December.

http://www.ft.com/cms/s/0/bdf4ee70-f2e4-11dd-abe6-0000779fd2ac.html?nclick_check=1

Heard they're also bringing back the 7-year treasury to sell more debt.

[siamesedreamer]

Updated using the latest numbers released last week:



Still a long way to go...