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Housing data for January, released today (March 29) by Standard & Poor's/Case-Shiller, show home prices off to "a dismal start in 2011," says S&P economist David Blitzer. San Diego, however, was one of only two metro areas showing gains, but they were extremely modest. "The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery. At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing," says Blitzer. San Diego home values dropped 1.2% in January versus December of 2010. San Diego was only one of two among 20 major metro areas with an increase in values from a year ago. However, that increase was only 0.1%. The other metro area with an increase was Washington, D.C., up 3.6%.

Meanwhile, the Conference Board reported more discouraging news: consumer confidence in March fell more than anticipated to 63.4 from 72 in February. Economists expected a decline to 65.4, according to FactSet. "The decline reverses five straight months of improvement," notes Yahoo! "A reading of 90 indicates a healthy economy. The index hasn't approached that level since the recession began in December 2007."

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Comments

Founder March 29, 2011 @ 9:59 a.m.

As I posted before, we are going to see the housing market wallow deeper in its own "recovery" as mortgage institutions game the system for their own advantage and slowly add additional houses to those already on the market!

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As it becomes harder to qualify for a home loan the numbers of those buying homes will be reduced and further compound the problem.

What we need it another round of income tax benefits for buying additional homes as that would at least create large numbers of jobs buying, fixing and selling homes; until that happens I expect to see many more homes go bottom up!

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Don Bauder March 29, 2011 @ 1:38 p.m.

Most economists I talk with see the huge inventory out there. They see that banks are only dribbling foreclosures into the market, so that they don't depress prices all at once. It looks like a housing double-dip.

Did you notice that stocks zoomed on a day in which housing and consumer confidence data were dismal? Not surprising. The market loves bad consumer news, because it can be confident that the Federal Reserve will splash more liquidity into the system, inevitably pushing up stocks. Fed head Ben Bernanke has said that he will keep pouring liquidity in as long as unemployment is high. Unemployment will remain high for a long time. Don't you think Wall Street would rather have zero interest rates than lower unemployment? Think about it. A sick consumer is just what Wall Street and the Fed want. Best, Don Bauder

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SurfPuppy619 March 29, 2011 @ 2:41 p.m.

Most economists I talk with see the huge inventory out there.

Considering mroe than 25% of ALL maortgages in the USA are upside down, and that we also had a morotorium on forclosers for several months by all the major banks, the inventory of homes for sale at depressed prices is going to be aorund AT LEAST another 2-5 years. Maybe even longer than 5 years.

We have now seen the infamous "double dip" in the housing sector.

Home prices started to decline in late 2006, it is now 2011, and we are several years out from any housing recvoery.

Without housing construction, which always coincides with job creation, we will continue to be stuck in a depression.

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Don Bauder March 29, 2011 @ 10:34 p.m.

Robert Shiller suspects the housing megrims will be around a long time. Best, Don Bauder

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tomjohnston March 30, 2011 @ 11:21 a.m.

surfpuppy619, I agree with you to an extent in regards to new housing and jobs. The problem I see in Ca. is that it way overbuilt now, in my opinion. I don't know how long you have been in SD, but I have been coming down since the 50's, when we went to the zoo for the first time, way back when kids got in for free. A couple of years ago we flew into Lindberg from back east for the first time in probably 10-15 yrs and the amount of ugly,nast tract housing was sickening. And LA is even worse. I have a collection of LA-OC aerial photos that belonged to my father. The amount of housing built over the last 20-25 yrs is astounding. I think 2-5 yrs is way to generous a time frame for any meaningful, steady return to new home construction and I would be suprised if it ever returned to the pace of the early 90's-2005.

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SurfPuppy619 March 30, 2011 @ 12:53 p.m.

Housing has never been in the toilet as bad as it is today, never-ever.

Add to that the fact that we have never had a recession this bad in modern times, not since the Great Depression 82 years ago.

Then throw in all the manufacturing jobs and other semi skilled good paying backbone of America jobs have been sent overseas and we are really at a time in our history that has not been experienced before.

So it could be 2-5 years, it could longer than that as you predict. It is such a wild card prediction based on so many interlocking variables that it is hard to figure out/guesstimate when this depression/downturn will end.

I know one thing is certain, unless (and until) we STOP shipping our semi-skilled, good paying jobs overseas (and stop importing foreign nationals for our skilled tech jobs) we are going to be a nation in decline.

The nation will start to follow in the footsteps of Detroit- which today has a population of 750K people, down from 1 million 10 years ago and 1.8 million (60% DECLINE) from the 1970's. America is going to look like modern day Detroit if we don't get some leadership who knows what the hell they are doing in the White House.

I would not vote for Donald Trump-and his running for President is a gimmick, he won't run, but I sure as hell would make him the Secretary of Labor because he is the ONLY person in the nation today that understands the macroeconomics of our nation. Bushie was about as far on the other end of that spectrum from Trump as you can get. Obama is not focused, he is doing band-aid type healthcare reform when the country is having the biggest economic heart attack in it's history and is on life support.

Someone needs to save us.

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WayneBernard March 29, 2011 @ 10:07 a.m.

Over the next 15 years as baby boomers look to sell their homes or, at the very least downsize, the supply of for sale real estate will rise far more than the demand, pushing prices lower, especially for certain types of real estate since supply. This will be particularly critical for boomers who are looking to cash in the capital built up in their real estate holdings to fund their retirement.

Here is an examination of the coming demographic issues facing the real estate market:

http://viableopposition.blogspot.com/2010/12/next-housing-bubble-is-this-perfect.html

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tomjohnston March 29, 2011 @ 11:34 a.m.

waynebernard, I'm a boomer. My wife and I both turned 60 last fall, Why would I sell my home sometime in the next 15 yrs? I don't understand the logic behind your comment.

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Don Bauder March 29, 2011 @ 1:43 p.m.

I understand what waynebernard is saying, and economists are warning about this. Many boomers, as I said above, want to get out of a large house and into a smaller one, thereby piling up some capital. There is another factor: 20% of homes in Florida are vacant. Prices have utterly plummeted. So boomers, particularly from the Eastern states, will sell their homes and rush to Florida to get the bargains. What Wayne says makes much sense to me. You are already in San Diego so it doesn't make sense to you. But most other boomers do not have such a nice climate. Best, Don Bauder

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tomjohnston March 29, 2011 @ 5:30 p.m.

"You are already in San Diego so it doesn't make sense to you" Actually, I'm a lifelong Angelino, not counting time away at college, not that it matters. I agree about people wanting to move to warmer climes, or wanting to move closer to the kids, or as my parents did, move to a townhome because at their age they simply didn't want to deal with the physical effort needed to maintain a house and yard. But those are not circumstances necessitated by the need for capital to fund retirement, which is what waynebernard wrote. Not every boomer has a "high priced" home to sell off, which is the premise the article he references makes.

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Don Bauder March 29, 2011 @ 10:38 p.m.

I don't remember WayneBernard saying that. I said that one reason boomers want to sell their homes is to get out at a profit and have some more capital. Best, Don Bauder

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tomjohnston March 30, 2011 @ 12:12 p.m.

waynebernard wrote: "This will be particularly critical for boomers who are looking to cash in the capital built up in their real estate holdings to fund their retirement."

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Visduh March 29, 2011 @ 1:48 p.m.

There are many folks who would like to retire to some area that has a slower pace and lower overall costs of living. Usually they're not from California originally, and are tax averse. So, that house they've had for twenty or twenty-five years is highly appreciated (although not to the degree it was about five years ago!) and in fact represents their nest egg. They'll sell a 3000 square foot home here in SD County and move to, say, Nevada and buy a home half that size, and put hundreds of thousands of dollars in the bank.

The fact that neither you and your wife nor my wife and I want to leave the area, and will not sell for a long time doesn't change the equation for many of our age cohort. They will sell and beat feet out of this state, taking their taxable retirement incomes with them.

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Don Bauder March 29, 2011 @ 1:55 p.m.

If you live in a pre-Prop. 13 home, property taxes are no doubt low. That's another factor that might keep you in your current house. But as you say, countrywide, there will boomers putting houses on the market (alas, a depressed one) as they scoop bargains in places such as Nevada and Florida. Best, Don Bauder

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Visduh March 29, 2011 @ 5:08 p.m.

Don, there was a provision added to the California Constitution that fleshed out Prop 13. That allows "seniors" to transfer their Prop 13 limits to another home, so that group can, in fact, sell a home and downsize without losing their Prop 13 benefits. I don't know the details, 'cause we like this house and don't plan to sell.

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SurfPuppy619 March 29, 2011 @ 5:31 p.m.

Visduh-there are certain counties that will let you TRANSFER your TAX BASE from your current property to a new one, but not all counties do it, and I do not know all the details, but I do know that this is a fact b/c I have relatives that have done it within the last 8 years.

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Don Bauder March 29, 2011 @ 10:42 p.m.

Again, that's one that requires more detail. As I said, I certainly was not aware of this. Best, Don Bauder

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tomjohnston March 29, 2011 @ 11:20 p.m.

You are referring to Prop 60 and prop 90. Prop 60 allows an intracounty transfer of base values, which is allowed in all counties. Prop 90 is for an intercounty transfer of base values. I know LA,Ventura, Orange and San Diego counties allow prop 90 transfers and I believe there are a handfull of other in Nor Cal that do also. There are quite a few conditions that have to be met. The Board of Equalization website has a section about it somewhere in there.

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Don Bauder March 29, 2011 @ 10:40 p.m.

I did not know that. I would like to hear the details. Best, Don Bauder

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JustWondering April 1, 2011 @ 1:25 p.m.

. http://www.boe.ca.gov/proptaxes/faqs/reappraisal.htm .

Details on Props 60, 90 and 100 regarding transfers of your real estate property tax base.

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tomjohnston March 29, 2011 @ 6:03 p.m.

visduh, I agree with you that there are people who will "beat feet out of this state", but as Ca. goes is not necessarily how the country goes. I think most people would like to get out of the hustle and bustle and enjoy life at a more leisurely pace and to some that may mean moving away from Ca. We are retiring in 44 days, May 12 to be exact, and a more leisurely pace is exactly what we are looking forward to. I can think of probably close to 100 couples/individuals we know well who are in the "boomer" category. A handful of them have or are going to relocate, but their reasons are similar to what I said previously. One couple we know is moving to Palm Desert because they love to play golf. Another person moved to Sante Fe last fall. She's an artist and there is a pretty vibrant art scene there. We bought our home 30 yrs ago. It's been paid for for a very long time. We have no plans to sell and move because we started prepping for our retirement a long time ago. But more importantly, we love our home, we love our neighbors and our neighborhood and we love living in L.A. My point is that people do sell and move after they retire. It's been happening for generations. I just happen to disagree with Don B and waynebernard that the glut of this will be caused by boomers selling off their real estate because they need the funds for their retirement, which is what they seem to be saying.

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Visduh March 29, 2011 @ 7:29 p.m.

The boomers had a great deal to do with the wild runup in home prices in the 70's, which was only choked off--the first time-- by the double-digit mortgage interest rates of the early 80's. If the boomers were responsible for the big surge, might they not also be responsible, on the back end, for a major downward adjustment as they pass from the scene? I think so.

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tomjohnston March 29, 2011 @ 7:59 p.m.

Sorry, I disagree. You make it sound as if you expect a bunch of us to start dropping dead suddenly and at the same time.I don't think you can say that a major downward adjustment that may or may not occur in another 10-15 yrs, or longer, falls on the backs of us boomers. Hell, it may be 10 yrs before things recover from the current "downward adjustment". I read a study a few months ago that said about 55% of boomers were considering a move after retirement. Of those, over 60% said it was to a home requiring less or no maintenance and about 20% to a smaller home. I don't see those people causing any kind of real estate crisis. I guess I just have a different viewpoint than you.

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Don Bauder March 29, 2011 @ 10:45 p.m.

Historically, in many areas of the economy, the cohort causing the bubble is partly responsible for the bursting of it. Best, Don Bauder

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Don Bauder March 29, 2011 @ 10:44 p.m.

We left San Diego and moved to a town of 5,000 with an amazing amount of culture. It's one of the best things we ever did. Best, Don Bauder

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tomjohnston March 29, 2011 @ 11:25 p.m.

But did you sell your home in SD and move because you needed the capital to fund your retirement or did you do it because you wanted to change your lifestyle?

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Don Bauder March 30, 2011 @ 9:07 a.m.

More a matter of lifestyle change. We put the proceeds of our SD home sale into our new home. So our own experience would help make your argument. Best, Don Bauder

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SurfPuppy619 March 30, 2011 @ 12:55 p.m.

We left San Diego and moved to a town of 5,000 with an amazing amount of culture. It's one of the best things we ever did.

Doesn't it snow there?

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Don Bauder March 29, 2011 @ 1:40 p.m.

You are correct. Boomers looking to retire will want to sell their large homes, partly to raise capital, but also to live in a smaller, more economical home. That will exacerbate the problem. Best, Don Bauder

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SurfPuppy619 March 29, 2011 @ 2:43 p.m.

I don't think the baby boomers down sizing their larger homes is going to have much of an impact-that is a wild card question, but I don't see it happening as much as Wayne does.

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Founder March 29, 2011 @ 3:51 p.m.

I'm with Wayne on this issue although all those with low property taxes are now feeling "trapped" in their homes as they do not want to have to sell in this market even though they might also 1035 exchange or buy in this market in another area!

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tomjohnston March 29, 2011 @ 6:05 p.m.

One question founder, if you agree that people will be selling to fund their retirements, then why would they even contemplate buying, even in this market?

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Don Bauder March 29, 2011 @ 10:51 p.m.

One interesting facet: although San Diego housing prices are down 36% from the peak, I think that most boomers still have a big profit in their homes, because they bought in the 1970s, 1980s, and 1990s. Best, Don Bauder

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Founder March 30, 2011 @ 7:24 a.m.

To downsize, to take some of the equity out of their home, to relocate away from what has become a too-urbanized area or ALL of the above.

For many their home is ALL of their "retirement" that is left...

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tomjohnston March 30, 2011 @ 11:01 a.m.

Perhaps I am misreading your previous comment. It seemed to me that you're saying many people don't want to sell right know because of the depressed values in the current market, but they might want to take advantage of the market to buy now in another area and sell there current home later, when the market improves. Did I read it correctly?

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Don Bauder March 29, 2011 @ 10:49 p.m.

Low property taxes can be a reason to stick around. But high sales taxes could be an offset. And many want to get out of an urban area and to a slower lifestyle. Best, Don Bauder

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Founder March 30, 2011 @ 7:26 a.m.

Right On. Especially if they want to avoid the Urban Blight that is spreading from Downtown SD.

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Don Bauder March 29, 2011 @ 10:47 p.m.

I think boomers relocating will have a bigger effect than you think. Best, Don Bauder

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tomjohnston March 29, 2011 @ 11:22 p.m.

I disagree, but I guess we'll see in about 15 yrs or so

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Founder March 30, 2011 @ 7:31 a.m.

Surprise, it has already started...

The next 5 years will see big movements of folks away from "flyover" states toward the Sunbelt as disappearing jobs and large travel distances force folks to "walk away" from where they have been living.

Now if problems get really bad in Japan, I could envision many of them could relocate to the USA and take advantage of all the housing "deals" available now, especially in Cities with large asian populations!

If we are really lucky, they will relocate their manufacturing jobs with them!

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Don Bauder March 30, 2011 @ 9:05 a.m.

With the potential radiation problems, Japanese emigration is certainly a possibility. They will give plenty of competition to U.S. workers, particularly in technology. Best, Don Bauder

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tomjohnston March 30, 2011 @ 12:29 p.m.

But how much of this "movement" is directly due to boomers retiring? I would surmise it's not as much as you think it is.

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Don Bauder March 30, 2011 @ 9:03 a.m.

I am almost 75. In 15 years I don't think I will give a hoot if I am around. Best, Don Bauder

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jon404 March 30, 2011 @ 2:15 a.m.

Don, wherever you are living now, could you please write another book, along the lines of 'Rancho Scama Fe, America's Crookedest White-Collar Crime Town?' Seems to me that over the years I've read a LOT of your articles about RSF criminals... certainly enough for an amusing and informative book? Not to mention the Heavens Gate folks, who, after all, were 'just renters', according to an RSF realtor. Enjoyed 'Captain Money and the Golden Girl' years ago... PLEASE write another one! FYI, self-publishing is now really moving along, with Lightning Source and Espresso Book Machines... easy now to write and distribute a book while printing only on demand...

Jon Donahue http://jon404.com

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Don Bauder March 30, 2011 @ 9:10 a.m.

Yes, I have done a lot of columns on Rancho Santa Fe crooks -- both when I was with the U-T and now with the Reader. However, the first thing to consider in writing a book is whether there is a market for it. Would that many people really want to read about RSF crooks? Best, Don Bauder

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Founder March 30, 2011 @ 7:34 a.m.

3% fixed would look real good to all those with 4.25% and higher...

How about posting a link to help all those that have higher mortgages!

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Psycholizard March 30, 2011 @ 12:59 p.m.

Some see the housing mess as cause of our recession, I see it as symptom. On one side of town there are large families crammed into two bedroom apartments, on the other side middle aged couples living in nearly empty stucco palaces. This mess won't be cured until families have the money to rent or buy their stucco palace.

Income disparity caused this depression, only wage inflation will fix it. The collapse in demand was caused by a collapse in spending power, not by a collapse in need. The collapse was made more sudden by the policy of sustaining demand by loose credit, the debt came due and the lack of buying power was exposed. Weak buying power, not lack of need, or wacky actions by the banks, is the fundamental problem in the economy.

The good news is our leaders have an unstated policy of running big deficits while sound biting each other for under taxing and overspending. These deficits should restore wage inflation and solve the housing deflation problem.

This may leave may general inflation to our children, but since many are living in cars parked in front of empty tract houses, what choice do we have?

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SurfPuppy619 March 30, 2011 @ 4:26 p.m.

I agree 90% with Psycholizard's analysis. The depression came from multiple mistakes, loose credit and underwriting standards, disastrous economic policy at the national level allowing jobs to be outsourced and hi tech jobs in the states to be given out to foreign nationals instead of Americans, the loss of decent paying semi skilled jobs due to illegal immigration and the illegal immigrants doing that work for peanuts thereby undermining our own middle class, the "too big to fail" policy of allowing moral hazard to run rampant on Wall Street with impunity, the failure to prosecute and punish the Wall Street crooks who brought this once great country to it's knees and may still kill us.

All of the above have a synergistic effect of wiping out the backbone of America.

OK, that is my rant- and I am not the only one stating this, why don't the dorks running this coutnry get it?

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Don Bauder March 30, 2011 @ 8:36 p.m.

Because the dorks running the country are raking in bucks from the crooks that you cite in your first paragraph. One thing is hopeful: it was pretty corrupt in the Robber Baron days, too, and the people did rise up. Then, the crash of '29 and the ensuing Great Depression caused some good legislation to go on the books. Most of it was erased in the 1990s. The oppressed CAN get aroused, as we are seeing in the Middle East and Africa. Best, Don Bauder

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Don Bauder March 30, 2011 @ 1:17 p.m.

Anemic housing is one of the reasons that this is one of the weakest recoveries on record -- an extremely weak recovery from a very deep recession. Housing won't recover soon. I do agree that income disparities were a cause of this recession (there were many causes) and, unfortunately, there are no signs that leadership is doing anything to address income and wealth inequality. In fact, just about everything they do exacerbates it. Best, Don Bauder

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Founder March 31, 2011 @ 7:55 a.m.

Our "Leadership" is very busy making sure that they are going to be "fat" when they get out of Office...

I'd point my finger at GREED as the cause of most the problems in the USA!

If a few folks are greedy then we have continued to prosper but when just about all Leaders (even down to the Council Level) have been borrowing from the future to finance their supporters (and their own) outrageous pensions then at some point the system collapses; which is exactly where we are now!

Housing will wallow then go further down as less and less folks are able to qualify for home loans because the Big Banks are too busy making money from the Fed to loan any of it out!

I also look for a readjustment to the value of the Dollar, like Mexico did after NAFTA, with the NEW Dollar worth about what $100 old Dollars was worth. This would allow America to pay off foreign debts at a fraction of todays debt and to recalculate all the things like Social Security payments that are fixed to inflation but not linked to any Dollar "readjustment"...

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SurfPuppy619 March 31, 2011 @ 8:43 a.m.

The dollar has been debased so much it is going to be worthless very shortly.

I doubt China or anyone else is going to make the mistake of continuing to buy our debt when we cannot pay it back.

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Founder March 31, 2011 @ 9:14 a.m.

Part of my above post got cut off! (Are their word limits now?)

Part2: If I am right, now is the time to really shore up against the tough times ahead, where ever more folks just will just not have enough to make ends meet! Group houses will stretch already stretched public infrastructure, as additional low/low mod housing DENSITY is thrust upon all non wealthy neighborhoods located outside of Downtown.

In many parts of America, the educated ex-middle class (now unemployed) "new poor" will join will the chronic poor to protest in mass against the "Privileged Majority" and all the certain cuts in entitlement programs. Here in San Diego, we will probably see some quiet orderly protests, as some "radicals" (like those commenting on this topic) call for social justice, but all in all, our Leaders will keep doing what they do best, smiling at the voters while counting the days until they too are on the Pension Train.

They will continue to sell out our quality of life via privatization to well connected special interests, deciding to fund Fat pensions, stadiums and convention centers instead of things San Diego desperately needs like a desalinization plant. Example: Water will become 4 times more valuable and it will be sold by the liter instead of the gallon, generating additional money for the City as our Leaders push water saving restrictions while avoiding any and all fiscal (money saving) restrictions!

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Founder March 31, 2011 @ 12:20 p.m.

HA HA

Never been on any!

Looked outside lately?

BTW: Even the Apple store at UTC (on a semi-holiday) was uncrowded today at noon.

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Don Bauder March 31, 2011 @ 12:44 p.m.

Apparently, Founder thinks that coralcay was directing the meds question at him (or her). Best, Don Bauder

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Founder March 31, 2011 @ 2:33 p.m.

Yup, because the comment was listed under and to the right of mine...

BTW: Maybe meds would be helpful, because then I would not care about anything other than myself! Hey, I wonder if all our Leaders are on meds!

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Don Bauder March 31, 2011 @ 12:43 p.m.

Are you asking if I am off my meds, or some other contributor to this blog is off his/her meds? Please explicate. Best, Don Bauder

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SurfPuppy619 March 31, 2011 @ 1:59 p.m.

Are you asking if I am off my meds, or some other contributor to this blog is off his/her meds? Please explicate

It was me, you or Founder, which one is unclear.

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Don Bauder March 31, 2011 @ 12:41 p.m.

I don't believe we have word limits, but I am not in the inner circle. There are multiple reasons why there SHOULD be mass protests. But I am not sure there will be. Best, Don Bauder

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Don Bauder March 31, 2011 @ 12:38 p.m.

Agreed: greed. It's behind the wealth and income disparities that have helped to drive the economy downward -- for the people on the middle and lower rungs, anyway. Best, Don Bauder

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Don Bauder March 31, 2011 @ 12:49 p.m.

Reminds me of the line from the French revolution. Madame Pompadour said to Louis (forgotten which: 14? 15?), "The peasants are revolting!" Said he, "Yes, aren't they." Best, Don Bauder

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Founder March 31, 2011 @ 2:28 p.m.

  1. Suggest that you notify everyone you know and see if any of them can help you in your time of need.

  2. Consider having someone move in with you to help pay the bills.

  3. Contact ALL your congressmen (local and State) and make an appointment to speak to their local Rep.'s , getting them to write a letter to your mortgage company can sometimes do wonders.

  4. Don't give up, seek advice; someone was telling me today about a Lawyer that charges no upfront costs but makes their money suing your mortgage Company for not completing all your required paperwork properly and in a timely fashion!

  5. Network with others in the same situation, to learn from them what works and what does not work.

  6. Stay Positive.

Good Luck!

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Don Bauder April 1, 2011 @ 9:05 a.m.

Make sure that your mortgage documents weren't robo-signed. Best, Don Bauder

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Founder April 1, 2011 @ 4:35 p.m.

Great point, if they are I bet your Mortgage Company will get real friendly real fast!

Good Luck!

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Psycholizard March 31, 2011 @ 2:31 p.m.

I am faced with the awkward task of defending our elected leaders on this blog. Both parties, the idiots and the idiotic bigots, know that rising prices, and especially housing prices are needed. both parties have a plan to cause this inflation by increasing spending power. One party focuses on the rich and corporations only, the other does not neglect the rich, but focuses on the middle class.

Both parties intend to run huge deficits until inflation is restored, especially housing inflation. I endorse this policy as regrettably necessary. Both parties are in tune with the needs of the voters.

Both parties wear the title of idiot proudly, though they are not stupid, because this is in tune with a public that is completely ignorant in economics. They blither in unison with the commentator chorus while marching together in a different direction.

The public is wiser than the talking heads, because the public knows it knows nothing. The talking heads, nodding together, condemn the deficits party leaders know we need.

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Founder March 31, 2011 @ 2:37 p.m.

RE: "I am faced with the awkward task of defending our elected leaders on this blog."

Why is that, are you being paid or what?

I can't believe that someone MUST defend "Both parties, the idiots and the idiotic bigots" because they have nothing better to blog!

Loosen up and tell us what YOU see happening in SD and beyond to our Country in this time of great need (no pun intended).

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Don Bauder April 1, 2011 @ 9:10 a.m.

Lobbyists are paid big bucks to flack for greedy corporations and massage incompetent elected leaders. Best, Don Bauder

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Don Bauder April 1, 2011 @ 9:08 a.m.

The idea is that inflation is easier to tame than deflation. That's what the public is told, anyway. There are a lot of factors in the food and fuel inflation today, and the Federal Reserve's staggeringly easy monetary policy is definitely one of them. Best, Don Bauder

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Psycholizard March 31, 2011 @ 5:33 p.m.

This country needs money, the government is united in its determination to print trillions of dollars in new cash, and the banks will print even more with the government urging them on. Eventually this new money should cause inflation, and when this inflation hits housing, by definition, prices will rise.

Some may find this provocative, but I say this nation, that in the last seventy years has achieved wide prosperity with military and cultural dominance, is unusually well run.

Mostly because we keep an eye on the scoundrels.

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Don Bauder April 1, 2011 @ 9:11 a.m.

I'm sure you have noticed that the value of the dollar has gone down as our central banks keep printing the bucks. Best, Don Bauder

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Founder April 1, 2011 @ 11:28 a.m.

FYI The Mexican Peso has been gaining against the dollar (now 11.8:1) while the Pound, the Euro, the Canadian dollar have remained fairly constant!

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David Dodd April 1, 2011 @ 11:59 a.m.

Founder, a couple of years ago the Mexican peso was above 15:1, so I'm not so sure about the gaining. Also note that the Mexican peso does more of a dance with how the dollar reacts to the Japanese yen than it does to anything else, unless the markets are tanking, in which case Mexican investors buy dollars here much as U.S. investors buy gold over there. It's a lot more complicated than most people think.

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Don Bauder April 1, 2011 @ 1:58 p.m.

The question of what factors affect currency movements has always been baffling. Best, Don Bauder

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Founder April 1, 2011 @ 4:31 p.m.

RFG (Glad you are posting!)

11.8 pesos for 1 dollar is way better for the Mexicans than 15 pesos to 1 dollar...

That is why I say the the Peso is growing stronger!

The change happened when the US Fed started printing lots more dollars to buy US Bonds:-(

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Don Bauder April 1, 2011 @ 1:57 p.m.

The dollar is dropping against a number of currencies and also against a basket of currencies. Best, Don Bauder

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SurfPuppy619 April 1, 2011 @ 2:57 p.m.

Toilet paper is going to be worth more than the dollar in few months........

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Founder April 1, 2011 @ 4:32 p.m.

I guess we will all call it Green TP.

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Don Bauder April 2, 2011 @ 7:12 a.m.

Yeah, but with inflation on the rise, toilet paper may be worth a lot. Best, Don Bauder

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SurfPuppy619 April 2, 2011 @ 6:02 p.m.

Yeah, but with inflation on the rise

90 days ago milk was $2.50 a gallon at the local store, last night it was $3.00 a gallon, a 20% increase in 90 days.

Gas is getting high too.

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Don Bauder April 2, 2011 @ 7:16 a.m.

Well, you can always think of the bright side. As the dollar declines, the stock market goes up these days. Best, Don Bauder

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Psycholizard April 2, 2011 @ 3:31 p.m.

As the wealthy get cashed up, stock and bond prices rise as more money chases the same investments. this is not called inflation, though it is. The rising prices are nearly universally hailed and no one calls for higher taxes to suppress demand.

Should wages rise and cause higher consumer prices, the slightest uptick is front page Time magazine disaster, and the banks collectively raise rates to scoop up the extra buying power. Then we hear renewed talk of balancing the budget and stealing from Social Security and pumping the money into the inflated stock market.

The worker's pay raise is the owner's inflation. Right now, with limited inflation we can run big deficits ignoring the bankers whining. This should cure the housing crisis by raising prices.

Soon we will have recovery and we will have the reverse problems, inflation and shortages. AT THAT TIME we must run surpluses to stop inflation.

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SurfPuppy619 April 2, 2011 @ 5:56 p.m.

AT THAT TIME we must run surpluses to stop inflation.

A budget surplus???

That has not happened in 50 years - Kennedy era- and won't happen again for at least another 20.

And before everyone claims Clinton ran a budget surplus, he had social security off the books.

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Don Bauder April 2, 2011 @ 9:15 p.m.

If memory serves me right, it was Lyndon Johnson who moved SS off the books. Best, Don Bauder

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tomjohnston April 2, 2011 @ 10:48 p.m.

As I remember,from the beginning SS was reported as a separate function in the budget, off-budget. I think Johnson actually put it back on-budget for the 1969FY budget, the one that Nixon had to work with when he took office It was the our old buddy Alan Greenspan whose committee came up with the recommendation to take it back out of the federal budget. I think it was 1985 before it came off the books because the FY 1984 budget had already been implemented. It was early in Clinton's first term when SS became exempt from general budget cuts, but that was due to the SS amendments that Reagan signed into law.

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Don Bauder April 3, 2011 @ 6:59 a.m.

This interesting bit of history is something anyone could look up easily. Anyone up to it? Best, Don Bauder

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Don Bauder April 2, 2011 @ 9:13 p.m.

Surpluses? The last time we had those was in Bill Clinton years. Nobody even thinks of surpluses now. Best, Don Bauder

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Psycholizard April 2, 2011 @ 9:25 p.m.

Kennedy also ran deficits. I endorse the bipartisan policy of deficit spending that was essential component of the amazing economy of the past seventy years. The general fund bled money, as Surfpuppy notes, for over eighty years, and has plundered Social Security since the program started.

The budget is different from fiscal stimulus, which depends on true outflows. George Bush II ran budget deficits, but much was sucked up by the interest paid the federal reserve not passed on to note holders. Those deficits were perhaps inadequate, as evidenced by the lack of wage inflation.

The wild and wacky ride of the housing market was largely caused by money printed by the banks, not by the lesser amount the government printed.

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Don Bauder April 3, 2011 @ 7:10 a.m.

The housing calamity was caused by irresponsible and often fraudulent lending practices by the banks, people buying the line that housing prices never go down and using the equity in their homes as ATMs, the Federal Reserve's and other bank regulators' refusal to crack down on the craze, the Fed's excessively easy monetary policy, the Fed's inability or unwillingness to see that this was a fraud-based bubble, the banks' and other financial institutions' inability to examine the mortgage-backed derivatives and see that they would result in a tsunami, the rating agencies' corrupt and stupid high ratings for the garbage derivatives, and several other factors. What rankles me is that all those who deserve the blame have dodged it. Neither Congress nor the mainstream press is willing to dig hard enough into this sorry history. Best, Don Bauder

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tomjohnston April 3, 2011 @ 8:33 a.m.

That's one LONG sentence there, Mr Bauder, although rather than use the word tsunami, personally I may have chosen something else, in light of recent events.

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Don Bauder April 3, 2011 @ 1:32 p.m.

It's a long sentence, yes, but there is a lot of meat to chew on there. Do you remember the New Yorker back in the 1950s and 1960s? It featured very long stories and very long sentences, but the long sentences were pristine grammatically. Best, Don Bauder

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tomjohnston April 3, 2011 @ 8:39 a.m.

It is a paradoxical truth, that tax rates are too high today, and tax revenues are to low and the soundest way to raise revenues, in the long run, is to cut taxes… Cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus.

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Don Bauder April 3, 2011 @ 1:36 p.m.

I disagree completely. It is that kind of supply side thinking that got us into this mess. The idea that you can slash taxes and raise revenue is just another version of the free lunch. America has to get out of this aversion to taxes. To save us, and particularly to save our children and other future generations, we unfortunately have to raise taxes while making spending cuts, such as getting out of wars that we never belonged in. Best, Don Bauder

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tomjohnston April 3, 2011 @ 2:33 p.m.

Actually, this isn't from me. It was in reference to a couple of people who referred to President Kennedy in their posts. For some reason the following lines did not post: John F. Kennedy, Nov. 20, 1962, president's news conference.

"Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased – not a reduced – flow of revenues to the federal government." John F. Kennedy, Jan. 17, 1963, annual budget message to the Congress, fiscal year 1964

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Psycholizard April 3, 2011 @ 11:46 a.m.

The perps in the fiasco have gone beyond avoiding blame, they have persuaded a movement of morons that the blame lies with the victims. Unions for instance, can be blamed for seventies inflation with justice, blaming today's housing deflation on them is flat crazy. Job insecurity helped cause this price collapse, and for years unions have traded wage gains for empty promises of continued work.

The perps are also gearing up a plan to claim credit for any recovery. The new talking point is that the jobless drop is caused by confidence that the Bush tax cuts will continue, even though they have been in place continuously through the entire malaise and collapse. These believers in the importance of confidence follow the American School of Confidence Artists. This art sells.

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Don Bauder April 3, 2011 @ 1:41 p.m.

Today's housing deflation results from the factors I cited above. Prices soared beyond all reality and are still drifting backward to normal. It's called reversion to the mean. Fortunately, the worst is over. But another 20% on the downside will hurt. Best, Don Bauder

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Don Bauder April 3, 2011 @ 4:31 p.m.

Yes, the lenders are afraid to dump these foreclosures on the market all at once lest prices really crater. So these homes are dribbled onto the market. Best, Don Bauder

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SurfPuppy619 April 3, 2011 @ 9:51 p.m.

Don, there was a segment on "60 Minutes" tonight about the major banks who bought all the Goldman/AIG/Lehman mortgage backed securities, but lost the loan papers, so they PAID a contractor company to FORGE the loan papers. It was fraud by Big Business perpetrated on the working class and poor on a scale I have NEVER, EVER seen before.

Hundreds of thousands of forged loan documents so the banks could go one with the foreclosure process.

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Don Bauder April 4, 2011 @ 7:52 a.m.

That sounds like a terrific story. I didn't see the show and never read about it anywhere. If this is true, some people should go to prison. Prediction: they won't. My guess is the government was complicit in the forgeries. Best, Don Bauder

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Founder April 10, 2011 @ 7:11 a.m.

These are $cary times, unless of course you are wealthy!

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