الأربعاء، نوفمبر 14، 2012

Kish Malik

The start of the Jordanian spring?

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غير معرف يقول...

“My life is ruined": Freddie Starr's despair as he is banned from being alone with his own kids

Truth Seeker يقول...

The start of the Jordanian spring?

Let's hope so!

   Lee C.  ―   U.S.A.      يقول...

 
I'm at a loss.  There's no link, no photo, no youtube connection.  Main page says it's finished loading (and it's still none too quick to finish that.).  But I see nothing other than the fairly cryptic text. 
I get the chess reference.  I understand the implications of the text.  But, I don't have a clue what you're posting about.  What am I missing?
 
             ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
      "Let's hope so!"

Jordan would not be my first pick for the next Middle Eastern country to get all fired up and revolutionary.  One might hope for that could be a place that might make the transition to a constitutional monarchy without fire and blood everywhere.

RhusLancia يقول...

Well i don't know... but I read it here first!

Marcus يقول...

I don't get it either. Why Jordan?

Lynnette In Minnesota يقول...

* CheckMate Kish Mat "Chase - dead" (Kish is a warning phrase that must be said whenever the next step kills the king, it basically means "I'm chasing your king so you better move away", Maat means "died", aka your king has already died so don't even try) I'd always heard it coming from Persian, not Arabic, and being shah mat -- death of the king. - Montréalais 03:02, 23 Sep 2004 (UTC) To my knowledge, Arab speakers do not say "Kish Mat" but rather "Kish Malik" when the King is cornered, and "el-Malik Maat" or rarely "al-Shah Maat" when the oponent have no valid moves.

You like chess, Zeyad? I haven't played for a while, except perhaps in debate...but I always enjoyed it.

Lynnette In Minnesota يقول...

Why Jordan?

Personally I think the whole region is a volatile tinderbox.

RhusLancia يقول...

this?

Lynnette In Minnesota يقول...

The violence started on Tuesday night after news spread of the price increases, under which the cost of household gas will rise by 53 per cent and petrol around 12 per cent. The measure aims to rein in a bulging budget deficit and secure a $2bn loan from the International Monetary Fund.

They're raising gas prices 53%?

Have they not been watching Greece?

   Lee C.  ―   U.S.A.     يقول...

 
Looks like things are gonna heat up in Gaza.  The Israeli may invade, at least in some limited fashion; at least strike and retreat.
I have to question Hamas' thinking on this; question why they chose to amp up the rocket attacks in the first place.  Their primary benefactor over the last several years, Iran, is otherwise occupied in Syria just now.  Probably not a good time for Hamas to have been gettin’ adventurous.

Jeffrey يقول...

RhusLancia,

Hey man, I don't drop into the Iraqi blogosphere very often these days, but I do stop by Zeyad's about once a month to see what's up. Well, I hope you and your family are doing well. The Anglophone Iraqi blogosphere is pretty dead, but I have heard that the the Arabic Iraqi blogosphere is doing fine. I'm not sure if that's true or not. It might be nice if Zeyad could confirm that.

Every now and then I take a look at old IBC blog entries. It was a very good run. You and CMAR II posted some great entries that are still interesting to read.

Okay, later. From your old co-blogger, the original Psycho, Sicko American.

Lynnette In Minnesota يقول...

I have to question Hamas' thinking on this; question why they chose to amp up the rocket attacks in the first place. Their primary benefactor over the last several years, Iran, is otherwise occupied in Syria just now. Probably not a good time for Hamas to have been gettin’ adventurous.

Hmmm...possibly. It will prove a bit of a distraction, though, for those who might be ready to take a more...ummm...active interest in Syria. This might be to someone's advantage(not ours).

Lynnette In Minnesota يقول...

Just a small aside from the more important issues of the day...did the unions kill the Twinkie?

May it rest in peace(although I always preferred the chocolate cupcakes myself).

   Lee C.  ―   U.S.A.     يقول...

 
      "….did the unions kill the Twinkie?"

In Benghazi, the unions killed Twinkie in Benghazi.  The Republicans are threatening congressional hearings on the matter.  What did Obama know about the death of Twinkie, and when did he know it?

(Hostess, the company in question, will likely now sell out to a larger company, or maybe sell the name and recipe another company.)

   Lee C.  ―   U.S.A.     يقول...

 
Post Script to the Twinkie story:

According to the AFL-CIO, the Hostess Company was the target of a Bain Capital style leveraged buy-out a couple of years ago.  (Although it was a different vulture capitalist company, not Bain itself.)  The LBO firm has since gotten out (presumably at a profit to the members of that firm) and Hostess soon after collapsed, a not uncommon fate for companies which are subjected to the dubious benefits of leveraged buy-outs.
I'd want more of the specifics before I believed either Glenn Hannibaugh or the AFL-CIO on this one.

   Lee C.  ―   U.S.A.     يقول...

 
Post Script to my earlier musings on Hamas:

According to the Washington Post, Hamas has already successfully completed a transition away from its Iranian alliance to new Sunni allies.  (That was quick.)  This would explain why they thought they could afford to ratchet up the conflict with Israel.  Which they've certainly managed to do. 

Yee يقول...

Hey Jeffley.

Marcus يقول...

An interesting article about drone-weaponry and a possible future of US world power:

http://atimes.com/atimes/Front_Page/NK15Aa01.html

   Lee C.  ―   U.S.A.     يقول...

 
The Asia Times paranoid hyperbole notwithstanding, the citizens of Benghazi have been tweeting complaints that our drone flights tend to wake them up at night.  So much for the supersecret fleets of stealthy, supercomputing, killer drones.
And, the question of ‘vertical extent of sovereign airspace’ was pretty much settled back in the late 50s when Eisenhower was still President.  If it's in orbit, it's not in ones ‘airspace’.

   Lee C.  ―   U.S.A.     يقول...

 
This is from The Weekly Standard, right-winger, neo-cons, so maybe take it with a grain of salt at first.  They are not above publishing stuff they know to be bullshit.
Headline:  Report: Rockets Fired from Egypt Hit Israel

Petes يقول...

Another small aside from the more important issues of the day. This article about the new Texas tollway 130, not a million miles from Zeyad, amused me -- the author sounds so excited :-)

What are all those big cars for, if the fastest road in the country has the same speed limit as the standard French autoroute, which the frogs happily drive in their econoboxes?

Petes يقول...

Here's an oddity from closer to home (for me). There's a structure that I've always known as the "Bottle Tower", although apparently this is by confusion with an imitation of itself elsewhere. I also thought it was constructed as a "folly" -- to provide employment during an 18th century famine -- but apparently it might have had a more serious function.

Anyway, here's the oddity. Its Wikipedia page has a "see also" to the minaret of the Great Mosque in Samarra -- the one that was damaged in an insurgent attack in 2005.

The two structures have a very superficial mutual resemblence, but no clue is given as to why the two pages are linked.

   Lee C.  ―   U.S.A.     يقول...

 
Re:  American politics

(Okay, the presidential election's over, and there's no good reason to keep making detailed updates on the subject of American politics.  And I don't intend to be doin’ a lot of that.  But, I have opened a couple of subjects that haven't quite closed yet, and so I'm figurin’ to be closin’ a couple of those here.)
Startin’ with Benghazi…

The Republicans are coming to the disappointing (for them) conclusion that there's virtually no chance of them drumming this up into a scandal after all.  Hard as they tried, they can't make it come together for them.  Ain't gonna hang anything on Obama after all.  Big bunch of ‘so what?’ and yawns is now greeting their every new foray into far-fetched conspiracy theory.  It just ain't comin’ together for ‘em.  So, this is pretty much gonna go away now, except for one last try to make some advantage out of it.
And, the one last try will bring them a new target and a new plan.
New plan will be to concentrate on the question of whether or not the security for the Benghazi consulate was up to snuff considering the known risks.  This isn't exactly a scandal to exploit, but it does have some possible political benefits.  The first being that it's actually a valid question, not a bunch of hysteria and spin engaged in for the benefit of the presidential election campaign.  The second benefit is that it allows them to go after Hillary Clinton, under whose charge such questions initially fall.  Obama got away; he won the election and won't be runnin’ again.  No point in tryin’ to gin up points agin Obama.  (Not to say they wouldn't love to have points agin Obama if something turns up.)  Hillary, on the other hand, is considered a possible Democratic candidate for Prez come 2016.  So, while they didn't want to screw with Hillary up until now, well, now things are changed.  Hillary is makin’ a more tempting target now than is Obama.  And there's a chance here to scuff her up some before she gets away too.  So, they'll probably be takin’ that chance--small chance of it backfiring on ‘em, but it's a small chance and a long way to 2016, give ‘em time to recover if it does backfire.

And now, back to your regularly scheduled programming…

Lynnette In Minnesota يقول...

According to the AFL-CIO, the Hostess Company was the target of a Bain Capital style leveraged buy-out a couple of years ago.

It looks like Hostess was in trouble in 2009. I don't know if restructuring alone would have been sufficient to pull them out. Mismanagement, probably, but even the Teamsters Union tried to get the Bakers Union to agree to the current company contract offer.

While Twinkies and the other goodies they made are American icons, there is still that nagging question of...what exactly is in that fluffy white goo in the center? Hmmm....?

Lynnette In Minnesota يقول...

According to the Washington Post, Hamas has already successfully completed a transition away from its Iranian alliance to new Sunni allies. (That was quick.) This would explain why they thought they could afford to ratchet up the conflict with Israel.

Would it? Timing is everything.

Some of those allies may find they are watching the wrong ball though.

Train hits school bus in Egypt

Domestic affairs will always trump foreign. Being responsible for the running of a country is not quite the same as being on the outside looking in. You actually have to get things done.

Lynnette In Minnesota يقول...

What are all those big cars for,...

You can haul all sorts of stuff; groceries, people, pets, furniture. The speed, for most of us, is just a happy by-product of the vehicle. I will freely admit to liking speed, though, even though I don't drive the racecar curcuit. I will gladly take a 6 cylinder engine over a 4. :)

Oh, and maybe they linked the 2 towers in that Wiki piece simply because they are similar.

60 degrees today. It feels like spring. :) I should put up Christmas lights just so I don't have to when it's 30 degrees, but I just can't get in the mood. I think I'll go vegitate with a good book instead. One of my favorite passtimes.

   Lee C.  ―   U.S.A.     يقول...

   
      "… but even the Teamsters Union tried to get the
      Bakers Union to agree to the current company
      contract offer.
"

Always easy to ask somebody else to agree to a cut in pay.
I understand the CEO awarded himself a 300% pay increase as his reward for demanding further pay and benefit cuts.  (They'd agreed to one round already.)  So far I don't know how much the LBO firm managed to pull out of the company in the process of the ‘restructuring’, but I'm sure that info will turn up eventually.
The real question is whether or not the new owners really wanted to keep on operating or whether the Bakers' Union dispute was just an excuse to do what they really wanted to do, declare a bargaining impasse so they could avoid getting the NLRB involved and then sell off the last remaining valuable assets (the trademark names and the recipes) and get out with whatever additional money they could still pocket.  Can't answer that one just yet.  Not enough data.

   Lee C.  ―   U.S.A.     يقول...

 
      "Timing is everything."

In that vein, I might remind you that we have come to expect Hamas to try to regain their ‘number one chief Arab victims’ status anytime anybody else in the region threatens to take their audience away.  They've been chomping at the bit for over a year now as problems in other Arab places relegated the ‘plight of the Palestinians’ to the back pages of the news.

Petes يقول...

You can haul all sorts of stuff; groceries, people, pets, furniture.

Believe it or not, you can do that in a fuel efficient car too. And fuel efficient cars can be performant too. I think I'm coming to the conclusion that the sole reason American cars are so inefficient is that fuel is still ridiculously cheap there. (It is here too, just not as cheap).

"60 degrees today. It feels like spring. :)"

Here, that could be summer or winter :) Glad you're not putting up lights though. I'd love to start an international movement to delay the onset of Christmas. This year the shops didn't even wait for Halloweeen before Christmas goods appeared :-{

Here it is 8 C (46 F), raining, and blowing a howling storm. Turned the heating on for the first time, and it's broken again. My single trouble-free heating season in the last eight was clearly just a blip. I'm supposed to be building my observatory, but it seems a bit pointless, other than getting the parts out of the living room. Have hardly seen stars since early summer.

Supposed to be studying maths too, in preparation for heavyweight physics in the spring. Second order differential equations this week. Vector calculus next week. Yikes!

Lynnette In Minnesota يقول...

Always easy to ask somebody else to agree to a cut in pay.

I think the Teamsters had already agreed to cuts, after seeing the books. But you make valid points in regard to the CEO's pay and the possible "hollowing out" of the businees being planned.

My guess would be a perfect storm of problems for the company that all played a role in its demise.

Don't get me wrong, I may have picked on the unions, but I also don't think much of the greed of others in the company.

We will probably see Twinkies return.

Lynnette In Minnesota يقول...

In that vein, I might remind you that we have come to expect Hamas to try to regain their ‘number one chief Arab victims’ status anytime anybody else in the region threatens to take their audience away.

Hmmm...I don't remember them being quite so vocal during the Tunisia, Egyptian, Libya etc. Arab Spring activities.

But whatever their reasons, I think they are still foolish to pursue this type of strategy. It just makes Israel dig in her heels and hurts civilians, which is not popular anywhere.

They would be better off with a settlement, cutting their losses. At least they could move on. As it is they only hurt themselves by incurring Israeli retaliation and leaving themselves open to manipulation by other players in the region.

   Lee C.  ―   U.S.A.     يقول...
أزال المؤلف هذا التعليق.
   Lee C.  ―   U.S.A.     يقول...

 
      "I don't remember them being quite so vocal
      during the Tunisia, Egyptian, Libya etc.
"

Nope, they'd not rearranged their alliances yet.  But, there were several articles written that mentioned their frustration with being relegated to the back pages.  I read some of them.  So, this is not a big surprise to me, aside from the timing having surprised me--but the new alliances explains that.

      "As it is they only hurt themselves by incurring
      Israeli retaliation…
"

They see it differently.  They amped up the rocket attacks on purpose.  They amped up the rocket attacks on purpose.  (The first bombings caught some of them still out in the open; they probably figured to have time to gather their leadership in the hospital basements again and let the civilian population take the hit again, and the Israeli have switched over to using mostly precision smart bombs this time, but aside from those two glitches it's probably workin’ out pretty much as they'd figured it.)

Lynnette In Minnesota يقول...
أزال المؤلف هذا التعليق.
Lynnette In Minnesota يقول...

[Lynnette] You can haul all sorts of stuff; groceries, people, pets, furniture.

[PeteS] Believe it or not, you can do that in a fuel efficient car too.

Ours have been gradually becoming more fuel efficient. But not as much as those in Europe, true.

But we do love a larger size car. There is no getting around that. That's why you see so many SUV's or trucks out there on American roads.

I think I'm coming to the conclusion that the sole reason American cars are so inefficient is that fuel is still ridiculously cheap there. (It is here too, just not as cheap).

It just went down recently. The amounts of oil they are pulling out of ND are pretty substantial, as I've mentioned before, the economy is still not in full recovery mode, and there really is less usasge because of people turning in their gas guzzling cars for more fuel efficient models.

Glad you're not putting up lights though. I'd love to start an international movement to delay the onset of Christmas. This year the shops didn't even wait for Halloweeen before Christmas goods appeared :-{

Here too. Poor Thanksgiving kind of gets lost in the Christmas madness. They are even opening stores on Thanksgiving now, instead of waiting until "Black Friday". I guess we will have "Black Thursday" from now on. :(

Here it is 8 C (46 F), raining, and blowing a howling storm.

We could certainly use the rain, but with the temps the way they are, I'm worried my grass will start growing again. I put the mower to bed for the winter a couple of weeks ago.

Turned the heating on for the first time, and it's broken again.

Time for a new furnace? You could get one of those high efficiency models that take 10 years to pay for themselves. ;)

Supposed to be studying maths too, in preparation for heavyweight physics in the spring. Second order differential equations this week. Vector calculus next week. Yikes!

Oh, give me "Life of Pi" any day. :)

Lynnette In Minnesota يقول...

they probably figured to have time to gather their leadership in the hospital basements again and let the civilian population take the hit again

Some day that may come back to haunt them.

   Lee C.  ―   U.S.A.     يقول...

 
      "Some day that may come back to haunt them."

It's my understanding that Hamas is already considerably less popular in Gaza than they were back in ‘07 when they seized power there.

Lynnette In Minnesota يقول...

That happens. The grass is always greener...

Petes يقول...

"Time for a new furnace? You could get one of those high efficiency models that take 10 years to pay for themselves. ;)"

Fixed. Even the plumber says I'd be mad to spend money on a better model, given my low level of usage. As we discussed it, he oohed and aahed about the giant telescope sitting in my hallway, and the conversation turned to building a foundation for the observatory. Turns out he's a bit of a jack of all trades, and might be prepared to do it. So, my dark furnace cloud had a bit of a silver lining. Now, if only it would stop bloody raining ...

Lynnette In Minnesota يقول...

Don't you love it when you can kill two birds with one stone?

Not to mention get someone else to do the work?

Now that I am (hopefully) done with fall yard cleanup I will have to turn to the hectic rush of Christmas. *sigh* If I can only do a little here and a little there. Of course I think that every year and still find myself sweating the baking projects towards the end.

Marcus يقول...

Pete, I just saw a documentary on the financial crisis yesterday. It was about why so few economist could foresee it and basically a story of how it went down.

What surprised me, about the only thing that was new to me, was the explanation on why it came as a surprise to many: The models for macro economy largely consist of three areas; corporations, the state and households (consumers). But banks were never in the models. They were considered a mere service sector to the real economy. But the financial sector in the past few decades, and its contribution to growth, grew and grew - yet that wasn't in the models. Turns out it should have been. (although a professor in Chicago maintained the previous models "the Chicago schoool of business" were sound as ever most others now question them and look back to Keynesian economics for a starting point to a brand new regime - was my impression)

Anyway, at the end of the program the interviewed economists were given raw data on financial figures for Sweden and they claimed it was pretty clear we too have a credit(mostly housing) bubble, but one that has not yet burst. Of the countries with similar financial figures, especiallt the rate of household debt vs. GDP, all countries but Sweden have had a housing bubble crash.

I know we've argued this before and while I admitted we have a bubble I also pointed out some differences between our economy and housing market compared to Ireland. But that's not to say I think we're immune to a crash. In fact it might be the explanation for how we could hold a crash off for some time but we might still get ours at some point.

My question: when the housing crash hit Ireland how did it play out? I mean, how did you notice it was coming and how fast did it materialize and where in society did it hit hardest?

Follow up question: I understand it your public finances were pretty good up until the Irish housing bubble burst but then the government bailed out Irish banks so those banks could pay off their international lenders and that shot your public finances to pieces. Is that about right?

If so, third question: what could have been done in a different (better) way, and would it have been easier to handle had you had your own currency and not the Euro?

Marcus يقول...

^Americans who have also had a housing bubble are of course also welcome to pitch in. I'm trying to get a grip on what the risks are here at home for some serious economic disturbance and how such a disturbance might play out.

RhusLancia يقول...

Marcus, if you're in a housing bubble that hasn't yet popped and you own your home, sell it and rent for a few years. Then when the bubble pops you can buy two or three houses like yours for the cash you get now. I wish I had done that in '07ish at the height of our bubble, but my crystal ball was in the shop, unfortunately.

Lynnette In Minnesota يقول...

Marcus,

My question: when the housing crash hit Ireland how did it play out? I mean, how did you notice it was coming and how fast did it materialize and where in society did it hit hardest?

I discussed your questions with someone else in my office in an effort to go back and remember. I will attempt to give you an answer from an American perspective.

In our case I think it started with the easy credit the banks were handing out, for both construction firms and individuals. And by "easy" credit I mean out and out fraud as well as above board loans. They were giving loans to people who simply would not have qualified by falsifying documents.

As far as when we noticed, I think many people noticed the irregular types of loans, such as those requiring only the pay back of interest in the early years of the term. Or the people who got loans who obviously did not have the income to back them up. I also think there were people in the banking industry who were quite aware of the fraud, but either joined in or were not high enough in the pecking order to be listened to.

You had huge housing developments being built. Small consctruction firms jumped on the bandwagon to make an easy buck. The peak was in 2006. The one thing those developments needed were people to buy in. Rather like a Ponzi scheme. We think that a lot of those developers simply did not pay attention to demographics. That is, there are only so many people out there actually looking for houses to buy. Once that pool dried up the whole house of cards started to crumble. Developers couldn't pay back their loans, construction workers were layed off, and it started to ripple through the whole economy. Once people started losing their jobs, they too couldn't pay back their loans. Portions of many bank's portfolio of loans, and loans that had been sliced and diced into derivatives and sold to other suckers, turned into liabilities rather than assets.

The ripples from all of this flowed to the stock market, the low point of which was March 2009. People's retirement investments tanked, raising havoc for those nearing or trying to save for retirement. It hit every spectrum of the economy. I remember going to the grocery store during the low point and feeling like I was walking through a ghost town. Nobody was shopping.

The hardest hit were those who could least afford it, those with lower paying jobs, those who were far too deep in debt for their income level, and those on fixed incomes.

If I were in your place the first thing I could think of to do, Marcus, is make sure your debt level is low. We can't always control our job situation, but we can control our debt.

   Lee C.  ―   U.S.A.     يقول...

 
      "Americans who have also had a housing bubble
      are of course also welcome to pitch in.
"

I'm afraid you will discover that even basic economics has become politicized in the United States.  I read some months ago (I believe I've mentioned this before) that among ‘scientists’ (self-described) the political breakdown has them claiming to be 55% Democrats, 6% Republicans, the rest falling into the 'independent/don't know/don't care’ category, a nine to one ratio of Democrats over Republicans.  I did a little further lookin’ into that and discovered that among working economists the ratio was more like four to one (Democrats to Republicans).
The Republican party has adopted what we might call a ‘minority’ theory of basic economics, and most economists avoid calling themselves Republicans because of that (although, even the few who'll admit to being Republicans know that the accepted Republican economic theory is still, ‘voodoo economics’ to quote the first George Bush).  But, that doesn't keep Glenn Hannibaugh Paul Ryan, and most recently, Mitt Romney from stumping for it continuously, nor does it keep the average Republican voter from buying into it.

The gist of all this is that the Republicans have their own fairie tale version of how the housing bubble happened, and how the financial services sector fit into that.  And the question has become highly politicized.

Speaking of things politicized…

      "Tired of presidential politics? Get over it: Upwards
      of 15 prominent Republicans are privately contem-
      plating 2016 campaigns for the presidency — and the
      most serious and ambitious of the bunch are already
      plunging in, some quite publicly.
"
      Politico.com

I, on the other hand, am taking a break from all that.  So, ya'll don't have to cringe just yet.
(I'm currently rather more amused by the right-wingers' continued vigorous attempts to drum up a scandal of some sort in relation to the attack on our Benghazi consulate.)

And, a passing, a word on Twinkies in Arabia.

And, finally, NBCNews is reporting a cease-fire agreement between Israel and Hamas starting at 9:00 PM Cairo time today.  (Gives ‘em both time to get in those important last few licks I reckon.)

   Lee C.  ―   U.S.A.     يقول...

 
Post Script:

In my own often not so humble opinion…  The Israeli would be well served to forgo gettin’ in those last few licks, and should call back any planes they have in the air right now, and just hunker down in their bomb shelters and wait out the next few hours until 9:00 Cairo time.  They can always go up in the air again if the rockets don't stop.

Marcus يقول...

@Rhus: Good advice. Although it's strange that you should have to articulate that advice as it shouuld be more of less common ssense.

@Lynnette: a good summation of the unfolding of the US housing bubbble. I stll maintain ours is a bit different sice we have the same credit bubble but not any real housig bubble since we have a housing shortage. My hunch is that it isnt as much a glut in housig as a glut in credit that is the causse and tyat we'll see a crash in Sweden despite our housing shortage.

@Lee, couldn't quite follow all that but agreed: it's a major problem when economics are used as a bat in party politics.

   Lee C.  ―   U.S.A.     يقول...

 
      "I also think there were people in the banking
      industry who were quite aware of the fraud, but either
      joined in or were not high enough in the pecking order
      to be listened to.
"

The largest investment bankers, Lehman Brothers, Goldman Sachs, etc. began actually paying ‘finders’ to go out and get them real estate loans they could then use to create ‘derivatives’ for them to sell.  I think it finally went over the top when they began marketing derivatives from loans they didn't even have.
In the end they had something like $500 Tn booked into derivatives on an American real estate market worth maybe $19 Tn (pre-bust prices).

   Lee C.  ―   U.S.A.     يقول...

 
      "@Lee, couldn't quite follow all that…"

Okay, short version then:  Republican dogma holds that if we cut taxes on the wealthy, the ‘job creators’ in Republican parlance, they will then use thar additional money to expand their businesses and hire people and thereby fire up the economy.  That's official Republican dogma.
Most economists think that they'll just stash it along with the rest of the trillions they've already got stashed on the sidelines, and wait for the economy to turn around eventually and for an opportunity to make more money to present itself.

Lynnette In Minnesota يقول...

I stll maintain ours is a bit different sice we have the same credit bubble but not any real housig bubble since we have a housing shortage.

Hmmm...and what is all that credit being used for? Industry expansion? If so, who are they marketing to?







Lynnette In Minnesota يقول...

Twinkies and Ho Hos are so popular that the local producer, Edita, no longer bothers to advertise and the treats still bring in a sweet 47 percent of the company's profit. Edita markets to the Arab Gulf, Yemen, Iraq, Syria, Jordan and Lebanon and is expanding to other countries.

Well, there we go. Edita could help save the Egyptian economy and sate America's craving for Twinkies et al by marketing to the United States! Think big, go long Egypt!

Lynnette In Minnesota يقول...

And, finally, NBCNews is reporting a cease-fire agreement between Israel and Hamas starting at 9:00 PM Cairo time today.

Glad to see that someone finally realized that the endless lobbing of rockets, incurring retaliatory fire from Israel, was not a productive situation.

Lynnette In Minnesota يقول...

I think it finally went over the top when they began marketing derivatives from loans they didn't even have.
In the end they had something like $500 Tn booked into derivatives on an American real estate market worth maybe $19 Tn (pre-bust prices).


Possibly the scariest thing in that whole mess. I think the term is unrestrained greed.

Lynnette In Minnesota يقول...

Finally, if I don't get a chance tomorrow to stop by, for everyone who celebrates it...

Happy Thanksgiving!

Marcus يقول...

Lynnette: "Hmmm...and what is all that credit being used for? Industry expansion? If so, who are they marketing to?"

No no, it was still used to buy houses. To explain it better we have a housing PRICE bubble but not a housing UNIT bubble.

There was no construction boom here like in Spain where they added millions of homes and still prices went up and up. That should have been questioned: you add supply but the prices still go up? That's a real housing bubble where both units and the price per unit goes up.

In Sweden at least there was no added supply so it's more logical that the prices went up here. And since people are actually living in the houses they paid dearly for and didn't just buy them as investments there's less likelihood that they will dump them on the market in a panic creating a steep decline in prices, a crash.

That's not to say there isn't a price bubble and that it can't pop. But it won't happen like it did in Spain. Im trying to figure out how it might happen here, what we might be in for.

I'm also considering whether to do as Rhus suggested above - sell, rent for a while, buy back. Problem is there isn't much available to rent.

Petes يقول...

Marcus, I agree with what Lynnette and Rhuslancia said. Many of the causes in Ireland were the same. However, in addition to lax practices and regulation of the banks, Ireland was going through a genuine expansion of the economy from about 1993 until around 2000/2001. Real incomes doubled in a decade, and the population grew strongly while unemployment sank to low levels. At the same time, the euro came into existence in 1999. That meant that eurozone interest rates were set by the ECB, which naturally paid more attention to Germany than tiny Ireland. Germany was still paying the cost of reunification since 1990, and its economy was sluggish. So in Ireland you had:

- A booming economy

- Inappropriately low interest rates

- Lax bank regulation and unscrupulous lending practices

- Zoning of development land controlled by inept (and sometimes corrupt) local councils

- A population with a traditional fixation on owning property

- A populist government determined to give the citizens what they wanted

Property prices in the early 90s were quite depressed. You could buy a typical small 3-bedroom house for under 40,000 euro. Prices rose strongly, throughout the 90s -- perhaps sustainably, although even that is questionable. Having doubled once, and then twice, there was a temporary lull in 2001. The lull coincided with a general uncertainty about the global economy, after the end of the tech bubble and the 9/11 attacks. This was when the credit floodgates were opened in the US and elsewhere. Here, the government introduced additional tax incentives to buy property, both residential and for investment. Between 2001 and 2006 prices doubled again. That threefold doubling (i.e. factor of eight) in a fifteen year period was just an average -- in my locale, some prices between 1992 and 2006 went up by a factor of twenty!

Throughout the entire period, "experts" and vested interests claimed that the whole thing was sustainable and supported by fundamentals. We had a robust economy, a young workforce, rapidly rising incomes. Property was the talk of the town, all the time, and the size of one's mortgage was a measure of status. First time buyers, terrified that they would never "get on the ladder", took mortgages they could barely afford, with heretofore unknown repayment periods of thirty years. The prudent who tried to save substantial deposits saw prices increasing far faster than they could save. People bought tiny "starter homes" with the idea that they would "trade up" in a few years, seemingly not noticing that the gap between their starter home and the one they wanted was widening, not narrowing. Better off people bought second homes, as "investments" and "pensions". Again, they failed to notice that property made zero sense as an investment unless prices never stopped rising, because the rental yields were tiny. By the mid 2000s the Irish property buying mood had gone from rampant optimism to outright insanity.

(cont'd..._)

Petes يقول...

(...cont'd)

I suppose it is the nature of a bubble that nobody notices it, not even so-called experts. In fact, the property market fundamentals were abysmal. People talked about property "investment" when yields were under 2%, less than half what you could earn on deposit in a bank. The experts crowed about affordability because of low interest rates, when average prices were eight to ten times average annual income. In 2000, two thirds of new homes were bought by first time buyers, by 2006 it was only one third. The experts spoke of a housing shortage, whereas second homes were being bought by a large fraction of the population, and hundreds of thousands of them lay empty. Ireland was building houses at a per capita rate higher than Germany during its post-war reconstruction. Twenty percent of employment was in the construction sector. Fifteen percent of the economy was directly in construction, and a huge retail and services sector bubble was supported by property money. In 2006 a quarter of all mortgage lending was "top-up" mortgages, which basically meant people borrowing on the strength of equity in their houses ( - I think it was called HELOC in the States - home equity line of credit - if I remember). Top-ups paid for kitchens, new cars, holidays, general bling.

It all had to end in tears. In 2006, an obscure professor of economic history from University College Dublin wrote an article in the Irish Times. While his speciality might have had more to with the economics of medieval Florence, he had been prompted to do a study of dozens of 20th century property booms. He noted that without exception they all ended in crashes. The size of the crash correponded to the size of the previous boom. In Ireland's case, his optimistic prediction was a 50% fall in prices. In a later article he said it would probably be 60%, but could be as high as 80%. The article caused a big stir but was generally rubbished. Nevertheless, there appeared to be some general uncertainty around the economy, and house price increases slowed toward the end of 2006 (they "only" grew by 12% that year). A few months later, nobody any longer thought that house prices would increase, and the new fantasy being discussed was how the market would have a "soft landing".

Although it didn't become obvious until much later, the turning point was the end of the first quarter of 2007, when prices finally turned downward. The immediate consequence was a slowing of the market, as would-be buyers held off purchase decisions. Meanwhile, the US housing market had tanked, the fiasco of mortgage-backed derivatives was becoming apparent, and the credit crunch began. The chickens didn't come home to roost in the Irish banks until September 2008, when the banks collectively went to the government and said they had run out of liquidity. In retrospect, they were all completely insolvent, but this was either not known, ignored, or lied about at the time. The rest is history. The government guaranteed all bank deposits and wrote a blank cheque for the banks, one which kept getting bigger and bigger. This was partly because of ignorance about the size of the losses, and partly because they were strongarmed into it by the EU and the US, who feared contagion in the banking system. Lots of the hot money that had flowed into Ireland in the early 2000s was German pension fund money looking for a return that they could not find in the sluggish German economy, and the Germans wanted their money back.

(cont'd...)

Petes يقول...

(... cont'd)

Another facet of the Irish disbelief that their invincible property market could be permanently damaged, was a decision to buy the biggest property loans from banks at a discount via a special purpose government vehicle -- NAMA, the National Asset Management Agency. This would relieve the banks of their bad loans to improve their balance sheets so that they could borrow again, while the loans would be held by NAMA until property prices inevitably recovered to their "LTEV" (long term economic value). NAMA, so the theory went, would end up making a profit. This approach had never been tried anywhere before and, of course, it put the state on the hook for even more of the bad loans than they were already paying for through bank bailouts and recapitalisations. What materialised was that the banking disaster was even worse than just the large number of residential mortgages on overpriced property. The big property developers had been buying land for future developments at eye-popping prices, and there were individual developers with loans running to billions, backed by land assets that in some cases were now worth zero. They also had large unsold housing developments at varying stages of completion that were in utterly unsuitable locations and could never be sold. These became the so-called "ghost estates".

Anyway, the story of what has happened since then could run to the same length again. But to cut a long story short, house prices fell very slowly at first for several years, but eventually plummeted. The UCD prof's 50% prediction was surpassed, as was the 60% prediction in some parts of the market. It's still to early to say whether we'll hit the 80%. Prices are generally considered to be back to 1998 levels in real terms. House building has shrunk by over 90% and so has bank lending (as have the bank's share prices). The overall economy has shrunk by 20%, unemployment is at 15%, and in addition to the cost of servicing the bank-related debts we are running a large budget deficit that may or may not be controllable. That's because income taxes fell and public spending hugely increased in the boom years on the back of housing transaction taxes, and it's proving difficult to rein in. We need to manage an almost impossible internal deflation, because of course we have no control over the currency whereby a devaluation would have been the traditional remedy.

------------
Some anecdotal video... notice throughout how the "experts" and even the news anchors poohpah any predictions of doom. One of the amazing things is that a tiny number of commentators saw what was coming with crystal clear clarity, whereas literally everyone else was utterly blind to it.

David McWilliams, a "celebrity economist" was an early prophet of doom, but he peaked far too early. Here he is in 1999, comparing the overheating economy of late 90s Ireland to late 80s Boston:
McWilliams 1999, poor quality video, 3:44

By early 2007 there are a handful of housing market pessimists. Morgan Kelly, the UCD prof is interviewed about his 2006 article. He compares our housing boom to the one in Arizona.
Morgan Kelly 2007, 12:09

By 2008 the game is well and truly over. The bank guarantee has been issued. Here, the financial regulator, Patrick Neary insists that the banks are nevertheless basically sound. It turns out he is talking through his ass, and the following year he resigns in disgrace.
Neary, 2008

Morgan Kelly has a different story, but he is laughed at when he suggests the banks are destroyed. He compares what we've done to Sweden in the 90s.
Morgan Kelly, 2008, 10:17

   Lee C.  ―   U.S.A.     يقول...

 
Marcus,

Your posts would seem to suggest the existance of some sort of structural impediment to the building of more housing units.  I remember you once mentioned rent controls as an impediment to the construction of more rental units.  But, that doesn't explain why they're not being built and sold for owner occupancy.  What's holding that back?

Marcus يقول...

Pete, thanks for the detailed reply. I see many similarities that are kind of scary. I also note some differences.

"That threefold doubling (i.e. factor of eight) in a fifteen year period was just an average -- in my locale, some prices between 1992 and 2006 went up by a factor of twenty!"

Yikes! We've had a huge increase in prices too but it's more like a factor of 3-4 over that period.

"First time buyers, terrified that they would never "get on the ladder", took mortgages they could barely afford"

The same has been true here. I feel sorry for a lot of young people who threw themselves into huge levels of debt that will affect their personal finances for decades, maybe for life.

"with heretofore unknown repayment periods of thirty years."

Ahem. Our current average repayent periods are 100 years for houses and 170 years for apartments. A very large portion of homeowners pay only the interest on their loans.

"The prudent who tried to save substantial deposits saw prices increasing far faster than they
could save."

That's been the case here as well up until 2010.

"People bought tiny "starter homes" with the idea that they would "trade up" in a few years, seemingly not noticing that the gap between their starter home and the one they wanted was widening, not narrowing."

Isn't that a bit funny? How, say, a couple who bought an apartment and are looking forward to starting a family and then buying a house are so, so happy prices go up. They feel richer when the value of their apartment increase 20% but never thinks about the 20% increase in the price of the house they are looking forward to buy.

Only those about to exit the housing market or downsize their accomodation have any real reason to celebrate increasing prices.

"Better off people bought second homes, as "investments" and "pensions"."

At least we haven't had much of that going on.

Marcus يقول...

"In 2006 a quarter of all mortgage lending was "top-up" mortgages, which basically meant people borrowing on the strength of equity in their houses ( - I think it was called HELOC in the States - home equity line of credit - if I remember). Top-ups paid for kitchens, new cars, holidays, general bling."

That was very common here as well. Odinary people with odinary jobs borrowng 95% to buy a brand new house and then adding to the debt eery year so they can have 2 brand new Volvos in the driveway and vacation in Thailand a month every winter. But that's over now. New regulations were passed "strongly recommending" banks never to loan more than 85% of the house value, and demanding people with debt levels beyond that to try to pay down ther loans.

"The size of the crash correponded to the size of the previous boom. In Ireland's case, his optimistic prediction was a 50% fall in prices. In a later article he said it would probably be 60%, but could be as high as 80%."

My very unscientific assessment is that our prices would be reasonable if they fell about 30% from todays levels. (but that's just some basic calculations on what I believe reasonable monthly costs should be and factoring a long term average interest rate at about 5%. Still, I believe if more people did their own calculations it'd be a good thing)

"A few months later, nobody any longer thought that house prices would increase, and the new fantasy being discussed was how the market would have a "soft landing"."

:-)

That soft landing is what we're hoping for right now.

"Although it didn't become obvious until much later, the turning point was the end of the first quarter of 2007, when prices finally turned downward."

Mid 2010 our prices turned down. I'd say we're about 10% down from that peak right now.

"The immediate consequence was a slowing of the market, as would-be buyers held off purchase decisions."

Our market is really slow right now. The homes that are being sold are typically in the market for quite some time before they sell. And few dares to buy until they have sold their previous home which is one reason for the slow market.

Marcus يقول...

"What materialised was that the banking disaster was even worse than just the large number of residential mortgages on overpriced property. The big property developers had been buying land for future developments at eye-popping prices, and there were individual developers with loans running to billions, backed by land assets that in some cases were now worth zero."

That's one area that differs. We have not seen that at all. Few developments are in progress actually, and I'd guess fewer still are planned.

"But to cut a long story short, house prices fell very slowly at first for several years, but eventually plummeted."

That's precisely what I fear might happen here, but perhaps not to the same extent. Prices have been falling slowly, slowly since mid 2010. But there's been no real rush for the exits.

"The UCD prof's 50% prediction was surpassed, as was the 60% prediction in some parts of the market. It's still to early to say whether we'll hit the 80%."

Like I said, I believe we're in for a less dramatic drop in prices. But then I guess banks could, would, get in trouble even if prices drop by the 30% I'd say was "reasonable".

"We need to manage an almost impossible internal deflation, because of course we have no control over the currency whereby a devaluation would have been the traditional remedy."

We might be in for a devaluation of our currency then. I can't say I'd be surprised to see that happening to be honest.

Marcus يقول...

Lee: "Your posts would seem to suggest the existance of some sort of structural impediment to the building of more housing units. I remember you once mentioned rent controls as an impediment to the construction of more rental units. But, that doesn't explain why they're not being built and sold for owner occupancy. What's holding that back?"

First rental units: I'd say the rent controls are one factor. But another one is that rental units have a slow ROI and for the last decade and more a slow ROI is nothing that has been interesting for anyone rich enough to get into property developent. Fast returns to boost the next quarterly and get a nice bonus - that's been the MO.

Also, our market is quite small and cornered to a large degree by our 3 major construction firms. I suspect they have been holding off, happy to see the housiing shortage increase and waiting for it to become an issue in politics. Then some party/parties will run on creating more affordable rental apartments andd to get it done they will offer nice incentives to those builders. Tax breaks, cheap land, etc. It wouldn't be the first time for that to happen.

Why they're not building more to sell directly to owners is because no one is bying now at the prices they sell for. We have a very costly building process with too little competition, too greedy local land owners who got used to getting paid an arm and a leg for the land, insane levels of regulation, and developers accustomed to earning a huge markup when they sell what they built. It's going to take time to reset that whole process at lower prices. Right now the mentality is: let's just wait until we can sell more easily at the same prices rather than lowering them. I don't see that happening.

Marcus يقول...

A case in point: I was talking to a crew boss at a construction site a few years ago. He pointed over to a cluster of (small) houses and said "we built those and marketed them at 3 million (about $450K) and they all sold on the drawing board". Then he pointed to another cluster that was maybe half a year newer and said "we marketed those for half a million more and they still sold out on the drawing board". Then he pointed to the field we were standing in and said "we're gonna build 50 more right here and we're gonna increase the price another half a million for them. I bet they'll still sell right away".

Today however, they are less eager to reduce prices than they were to raise them a few years back. They seem to rather wait and hope the market will pick up again, and lay off the workers in the meantime.

   Lee C.  ―   U.S.A.     يقول...

 
      "First rental units: I'd say the rent controls are one
      factor. But another one is that rental units have a
      slow ROI…
"

I'd have thought that to be redundant.  Rent controls would necessarily suppress return on investment in rental units.  Maybe I'm missing something, but there appears here to be a mere restatement of the problems created by rent controls.  (Commonly, American rent controls, like in NYC or Chicago are imposed only on existing rental units.  New construction is exempted.  This leads to sometimes fierce competition for the older rent controlled units, but allows incentives for new rental units.  Be that as it may…)

      "Also, our market is quite small and cornered to a
      large degree by our 3 major construction firms.  ***
      "We have a very costly building process with too little
      competition…
and etc."

Okay then.  There's an answer I was anticipating as a possible response, one possible response anyway.
Succinctly put then, you don't have a property bubble in Sweden.  By definition your situation, as you describe it, doesn't qualify as a ‘bubble’.  A bubble, pretty much by definition, implies market activity growing rather faster than its economic base would support.  What you've got is a bottleneck.  Some of the same consequences may follow, but, they may not.  You'll be better off analyzing the situation in light of historical cases of bottlenecked activities rather than assuming your case will follow the ‘bubble’ histories of either the U.S or, more locally, Ireland and Spain, which had true bubbles.  I'd reckon your chances of a ‘soft’ landing to be actually pretty good.
(Our price crash has pretty much bottomed out and housing prices have stabilized or are even rebounding many areas.  Home construction was up 42% nationwide last month over the year before.  Of course, it's a big country and there are local variances, but that's the national average.  On average the U.S.A. took a 30% hit on housing prices before it bottomed out and is now slowly turning around.)
 
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(If I were a Swedish journalist I'd be looking real hard right now for collusion/corruption in the relationship between the builders and the politicians.)

Marcus يقول...

Lee: "American rent controls, like in NYC or Chicago are imposed only on existing rental units. New construction is exempted."

Im not entirely sure of wether that's the case here also. It may be. And of course that'd be a major factor.

"What you've got is a bottleneck. Some of the same consequences may follow, but, they may not. You'll be better off analyzing the situation in light of historical cases of bottlenecked activities rather than assuming your case will follow the ‘bubble’ histories of either the U.S or, more locally, Ireland and Spain, which had true bubbles."

You know of any historical scenarios for those bottelnecks? I can't really find any.

Lee: "If I were a Swedish journalist I'd be looking real hard right now for collusion/corruption in the relationship between the builders and the politicians."

I don't think there's going to be much to find. No backroom deals (than can be found out). The builders are waiting out what they assume (and I assume the same) will be some sort of political program to adress our housing shortage. It'll play out pretty much in the open, is my guess. People crave more available housing - politicians who need to find an angle to get reelected will come up with programs* - builders will ramp up their activity under a new building regime where they can make more money - everyone's happy for some time.

*the programs the politicians will come up with will not necesarily be for the long term good of the overall society. Chances are they'll make short sighted decisions since their decisions will not be with the good of the country in mind but with their own ratings in mind. I guess you know all about that from back home.

   Lee C.  ―   U.S.A.     يقول...

 
      "You know of any historical scenarios for those
      bottelnecks?
"

None that seem analogous, I'm afraid.  The ones that come to my mind all have significant distinguishing features.  Most commonly they involve political corruption as those benefiting from the bottleneck sought to protect their privileged positions.  But, you've already rejected the idea of that scenario playing itself out.  (Sweden's population is roughly equal to New York City's population.  Any local bottlenecks that arise over here tend to attract solutions and alternative sources from the rest of the country.)

   Lee C.  ―   U.S.A.     يقول...

 
Post Script:

If I think of something that seems to match up, I'll let ya know.

Petes يقول...

Marcus, the existence of a supply constraint in no way precludes the possibility of a bubble. (Have a look at this definition). In Ireland there were several toxic exacerbating factors. In fact, think about it -- it is almost impossible for a bubble to be driven by irrational exuberance alone. The bubble can only be perpetuated when there is a narrative to explain why this situation is "special" and not bubble-like at all. "There's a supply shortage", "the fundamentals are strong", "the demographics support it", etc. etc. We heard them all here, and they were all partly true, but somehow they eventually all evaporated overnight. And I've heard pretty much the same things about other housing markets that have either crashed or that I expect to crash: Canada, China, Australia, the UK. Oh yes, and Sweden. It's been on my list for several years.

One of the reasons that a housing bubble is hard to detect is because it is hard to determine the intrinsic value of property. But it seems that a decent rule of thumb is that in the long run house prices increase in line with inflation. Apparently that is even born out by statisics from Amsterdam which go back to the 1600s. However, one possible permanent blip in the last forty years is the entrance of women into the workforce in large numbers. (Google for any number of fascinating Elizabeth Warren talks on the subject of double incomes... delighted to see she made the US senate this month). House prices have probably increased to soak up the earnings of two-income families.

However, I see from a quick Google that male and female participation in the workforce in Sweden was almost equal by the end of the eighties, so any recent house price increases cannot be blamed on the two-income effect. In that case, you can expect prices return to the pre-bubble inflation adjusted mean. The big question, though, is whether the bubble rapidly deflates, or whether there is a long drawn out stagnation as with Japan for the last two decades. Do prices fall to meet the mean, or does inflation adjust the mean upward to meet prices over a much longer period? It may well depend on government policy.

Here, we have almost certainly guaranteed ourselves a minimum of a lost decade (which we are half way through) but quite possibly more. This was due to a failure to recognise the problem when it hit, and strategies that were predicated on a return to the "norm" (which, of course, was not remotely normal). Had we accepted the bubble was over permanently, and decisively tackled the resulting holes in the banks' and public finances, we might be on the way to recovery now. (Sweden in the 90s is held up as a role model for this approach). Instead we are in the throes of a deep recession with no end in sight. (Note to self: should I really have given up that well-paid job? ;)

Anyway, even though I have no crystal ball, I think I can safely say that some of your property buying habits are/were batshit insane! Hundred year mortgages? I thought that only happened in Japan in the eighties. 95% mortgages and interest only? Crazy! And remember, all those people who were using their houses as cash machines will suddenly feel poor, sucking money out of the economy. One of the reasons why we don't know if our prices will bottom out at minus 60% is that the bust after a bubble often undershoots the mean. People go from irrational exuberance to a revulsion for property. Here, the number of people renting has increased by 50% since 2006, as people remain shy of the market (helped, of course, by the lack of credit availability).

   Lee C.  ―   U.S.A.     يقول...

 
      "(Have a look at this definition)."

You including the part where it says, ‘Prices…are not supported by underlying demand for the product itself," or you figurin’ to just ignore that part?

Or maybe you're figurin’ most of those Swedes to be irrationally exuberant ‘bout buying housing?  That is in there:

      "The hallmark of an asset bubble is irrational
      exuberance. Nearly everyone is buying that asset!
      And, for a long time, buying that asset seems
      profitable.
"

Or you figurin’ to just ignore that part too?  ‘Cause I sure don't recall Marcus tellin’ us ‘bout all the folks investing in residential real estate in Sweden for the sake of investing in it.  Rather:  He was talkin’ ‘bout the situation as a bit of a housing crunch.

(Or maybe you're just defining as any product that's possibly hit its high price mark as having ‘bubbled’)?
 
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And, on another subject:  Egypt may just blow the hell up, starting maybe as soon as tomorrow.

Marcus يقول...

Pete: "In that case, you can expect prices return to the pre-bubble inflation adjusted mean."

That seems the logical conclusion in the long run. But we'd have to go back a long way because pre-bubble our housing market was arguably undervalued as a result of the 90's crash. Mid-late 90's seems today to have been an ideal time to enter the market. Wish I had done that but I was still in school then.

"The big question, though, is whether the bubble rapidly deflates, or whether there is a long drawn out stagnation as with Japan for the last two decades. Do prices fall to meet the mean, or does inflation adjust the mean upward to meet prices over a much longer period? It may well depend on government policy."

Yes, that's the question. The hard or the soft landing.

Lee: "And, on another subject: Egypt may just blow the hell up, starting maybe as soon as tomorrow."

That's another one of those things that seem inevitable but where both the severity and the timing is hard to predict, just like the bursting of an asset bubble.

Marcus يقول...

Pete: "I think I can safely say that some of your property buying habits are/were batshit insane!"

Yes, that would be safe indeed.

"Hundred year mortgages?"

170 for apartments, 100 for houses, and that's the national average.

"I thought that only happened in Japan in the eighties. 95% mortgages and interest only? Crazy!"

Today a "roof" of 85% has been imposed. That has been one factor for the slowing down of the market because new buyers who can't bring the equity from their llast home into the new one need 15% in cash, and they rarely have that at todays prices and since saving has been... frowned upon the last decade and more.

But those with 15% equity or more can still decide if they want to pay interests only or not. THAT would quickly change if prices were to fall I guess.

The ones already owing more than 85% have had to sit in meetings with the bank and work out how to pay down their loans. Which of course strikes at their general consumption in other areas. Not too much fun for those who got used to go to the bank to get more money from adding to their loans to consume fr more than they earned. Not only can't they do that any more but they have to *shock, horror!* pay off on those loans.

That lots of people are economic idiots is to be expected, but the banks should have known better than to let them get into situations like that.

   Lee C.  ―   U.S.A.     يقول...

 
      "…property buying habits are/were batshit insane!"

      "Yes, that would be safe indeed."

Looks to me to be adaptations to a market that's long time been bottlenecked.  Let me hazard a guess…  Your construction trades are and long have been thoroughly and rigidly unionized.  Have they not?

Marcus يقول...

Lee: "Your construction trades are and long have been thoroughly and rigidly unionized. Have they not?"

Very much so. Plus regulations are insane. Regulations are, contrary to what one might first guess, not to the dislike of our major construction firms. They like that bidding for jobs require rigorous certifications, environmental studies and whatnot. Because they are large enough to have staff for that. Others are not. So smaller firms are de facto locked out of much of the construction market which is just fine with the big ones.

   Lee C.  ―   U.S.A.     يقول...

 
      "Plus regulations are insane."

Yes, of course, but you touched on that earlier.  (And I mentioned in the last thread, when explaining the coalition that supports our Republican Party that businesses tend to favor regulation which restricts entry of new business competition into the field.)  So, we sorta knew this already.
There's one piece missing in my mental picture of this though.  Who's holding those 100 year and 170 year mortgages?  (I'm assuming it's pretty much exclusively Swedish banks making the offers of such mortgages; foreign banks are likely cut out of the mortgage market entirely.)  I know the Swedish banking system was thoroughly wrung out and then restructured in your banking crisis of the early 90s (I think it was the 90s when it hit ya'll.)  But somebody's holding the mortgage on a big chunk of Sweden.  With payouts of that length I'd have to guess that the banks are off-loading that paper to somebody's holding company.  So, who's holding those mortgages?  (The government maybe?)

   Lee C.  ―   U.S.A.     يقول...

 
It appears that the Egyptian opposition is planning protests against Morsi's new decrees come Tuesday.  The Brotherhood is planning rallies in support on the same day.  Things could get interesting in Egypt come Tuesday.

Petes يقول...

Marcus, it sounds like your banking system went in for "light touch regulation" just like everywhere else. Although it's arguably less forgiveable in your case seeing as it's barely twenty years since the shit hit the fan last time... although I guess you could say the same of the UK.

At least the government seems to be attempting to let the air out gradually, with the 85% thing ( - not guaranteed to work, of course). Here, lots people have found themselves in 50% negative equity, some with little hope of ever rehabilitating their mortgage. Something like 15% of all mortgages are in arrears of 90 days or more, and that number is set to rise.

Lynnette In Minnesota يقول...

Marcus,

I haven't read through all the comments yet so forgive me if I repeat what someone else has already said.

Im trying to figure out how it might happen here, what we might be in for.

If you don't have oversupply in the housing sector then my first thought would be if the economy tanks for some other reason, causing people to not be able to make their mortgage payments due to layoffs. How dependent is Sweden on exports? Are you exposed to the US market? At the moment it seems to be slowly recovering. However, if Washington doesn't get its act together and pull us away from the fiscal cliff we could slip back into recession.

Lynnette In Minnesota يقول...

Ahem. Our current average repayent periods are 100 years for houses and 170 years for apartments. A very large portion of homeowners pay only the interest on their loans.

Oh dear, that sounds like renting, not owning, to me.

So smaller firms are de facto locked out of much of the construction market which is just fine with the big ones.

And it is smaller firms that keep the marketplace flexible.

It sounds like you have more of a general consumption bubble, with everyone having access to easy credit for purchasing houses and stuff. As PeteS mentioned we have that as well, with the home equity lines of credit. One of the people I work with used that to do various upgrades to his home and appliances. It's like no one can wait and buy one piece as needed, they have to redo everything and have it just so all at once. So they are then stuck paying off an extra $10,000 or $20,000. Personally I tend to wait until something dies a natural death before replacing it. I've been watching the refrigerator for some time now. It has been making strange clunking sounds. We'll see...










Lynnette In Minnesota يقول...

Speaking of consumption we have again lived through another Black Friday. Well, actually it started on Thursday, sad to say. I managed to avoid it as much as possible by going to the grocery store instead of the mall. Worked quite well too, they weren't busy. The girl at the checkout line in Target today, Saturday, told me she worked the 9:00 p.m. shift starting on Thursday night and they had about 300 peoople lined up waiting to get in. She said it was crazy. Apparently they had a 50" TV on sale for $300. So I guess it's not just about shopping, but about getting a good deal. So maybe they aren't totally crazy, just frugal. ;)

Lynnette In Minnesota يقول...

I don't know, Lee, it looks like people in Egypt haven't waited for Tuesday to make their feelings known. They aren't too happy with Morsi grabbing power, and rightly so.

Petes يقول...

Lynnette, I heard that only a few people got injured in stampedes, and two got shot in an argument about a parking space. Does that mean Black Friday was subdued? :)

Marcus يقول...

Lee: "Who's holding those 100 year and 170 year mortgages? (I'm assuming it's pretty much exclusively Swedish banks making the offers of such mortgages; foreign banks are likely cut out of the mortgage market entirely.)"

First of all we have had a different approach to the whole thing. Here they're called loans, not mortages. We've never had any package deals where a loan is agreed upon with a set timeframe for repayayment like a mortgage you'd be familiar with (at least not in my lifetime). Instead folks get a loan and focus on the interest alone, whether they can cope with another 1% or 2% in interest in the long run (yeah I know it's insane).

Still a lot of households pay off on their loans but it's rarely on a timetable to pay it all off, but rather just a monthly figure they feel they can afford at the moment.

I think this line of thinking goes back to the 60's and 70's when we had 10% plus inflation in Sweden. It was then salary driven due to our booming economy and exports market. It made no sense to pay off your loans because inflation ate them up anyway.

Those economic times are long gone but the habits from them seem to die hard.

"I know the Swedish banking system was thoroughly wrung out and then restructured in your banking crisis of the early 90s (I think it was the 90s when it hit ya'll.) But somebody's holding the mortgage on a big chunk of Sweden. With payouts of that length I'd have to guess that the banks are off-loading that paper to somebody's holding company. So, who's holding those mortgages? (The government maybe?)"

No, it's our major banks holding those loans. We have one of the largest banking sectors in the world compared to GDP, after only Luxemburg and a few others. Surprising for a so called socialist couuntry, no? In fact Swedish banks are big even in other countries, especially in the Baltic nations.

But as long as the "value" of the housing market is kept up our banks are sound, seemingly. The question is what would happen if the housing market were to fall... I have no real idea of what margins they have, if any.

Marcus يقول...

Lynette: "How dependent is Sweden on exports? Are you exposed to the US market?"

One of the most exports dependent markets in the world (excluding some oil natiions who are entirely dependent on oil exports). Sweden has higher exports per capita than Germany.

The US is an important market but the biggest and most important market is the EU. Luckily we're less dependent on the south of Europe and more of the north. Germany is the single largest trading partner for Sweden.

   Lee C.  ―   U.S.A.     يقول...

 
      "Oh dear, that sounds like renting, not owning…"

That was my first thought, then I realized that a renter could walk away after (generally) a 30 day notice (a lease is a little more restrictive).  A 100 years is a lifetime committment and then some.  They had a term in ancient Europe for the system that bound a person to a piece of land for life.  They called it serfdom.  Except, apparently, in Ireland, where they seem to have called it an "asset bubble". 

             ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
      "First of all we have had a different approach to
      the whole thing. Here they're called loans, not
      mortages.
"

Odd, I googled up "Sweden mortgage" and google had no problem finding the subject for me.  Although, I gather that foreclosure always requires a judicial procedure in Sweden.  Some American states do that too, though some use a ‘deed of trust’ arrangement (don't bother to ask; it's not important).  And, I notice what seems to be a provision for deducting mortgage interest from ones payroll tax deductions on a monthly basis (thus bringing in the government early on in the process).  Furthermore, it appears at first glance that the Swedish government still holds a financial stake in the bigger Swedish banks (and that it held a financial stake in them even before the Swedish banking crisis back in the 90s).
In the end though, my brief foray across Google leads me to believe that I was correct in assuming non-Swedish banks didn't do much real estate lending in Sweden.  But, I apparently wasn't correct in assuming the Swedish banks had off-loaded their mortgages and loans.  But, they don't have to.  Apparently the Swedish government has been allowing them to get by with a mere 6% capitalization rate on real estate loans.  So, that's where the risk piles up.  All the bankers risk is 6%, (now we know ‘what margins they have, if any’)  and the presumption remains that the Swedish government is a partner in the risk.

On the bright side, Sweden can devalue its currency if the game goes belly up again.

   Lee C.  ―   U.S.A.     يقول...

 
      "CAIRO — Gaza's ruling Hamas will not stop arming
      itself because only a strong arsenal, not negotiations,
      an extract concessions from Israel, the No. 2 in the
      Islamic militant group told The Associated Press in
      an interview Saturday.
      "The comments by Moussa Abu Marzouk, just three
      days after the worst bout of Israel-Hamas fighting in
      four years, signaled trouble ahead for Egyptian-
      brokered talks between the hostile neighbors on a
      new border deal.
      "Hamas demands that Israel and Egypt lift all
      restrictions on the movement of goods and people in
      and out of the Palestinian territory, which has been
      buckling under a border blockade since the Islamists
      seized the territory in 2007.
"
      from the Associated Press

The new peace process (Hamas vs Israel), as it has unfolded, anticipates that Egypt will cooperate in blocking a rearmament of Hamas.  Morsi's new problems at home call into question his ability to deliver on that point.

Lynnette In Minnesota يقول...

PeteS,

lol!

I heard on the news that it appears to be par for the course this year. :)

After that one awful year where I made the mistake of stepping foot inside a department store on Black Friday afternoon, thinking how bad could it be, I try to only nibble around the edges of the marauding masses. I don't need to buy anything that badly or prove I could find the best deal.

Lynnette In Minnesota يقول...

P.S. I did spend a pleasant Saturday morning browsing the used bookstore and Barnes & Noble Booksellers. That is almost as enjoyable as actually reading. :)

Lynnette In Minnesota يقول...

Marcus,

The US is an important market but the biggest and most important market is the EU. Luckily we're less dependent on the south of Europe and more of the north. Germany is the single largest trading partner for Sweden.

Then I guess the obvious danger lies in the double dip recession they are talking about in Europe. While Germany is probably the strongest country, they are not invulnerable. Perhaps it is time to diversify your export markets a little more.

Lynnette In Minnesota يقول...

Gaza's ruling Hamas will not stop arming
itself because only a strong arsenal, not negotiations,
an extract concessions from Israel, the No. 2 in the
Islamic militant group told The Associated Press in
an interview Saturday.


Funny, that's kind of the thinking that was used back in the old West. Needless to say that his comment flies in the face of what was agreed to in the cease-fire. Apparently there are people in Hamas who really care little about the blockade's affect on civilians. They only care about their guns.

Morsi's new problems at home call into question his ability to deliver on that point.

Morsi is an inexperienced leader who apparenlty spent too much time looking to Hosni Mubarak for examples of how he should govern. Mistake. The international community did not come to Mubarak's rescue and they won't for Morsi either.

Lynnette In Minnesota يقول...

Just a small aside on Minnesota weather. Thursday morning at 10 a.m. I was outside without a coat in 60F (15.55C) degree temps putting up Christmas lights. That evening we were in the middle of a snowstorm. Ain't Minnesota weather grand? lol!

Marcus يقول...

Lynnette: "Perhaps it is time to diversify your export markets a little more."

That's always a consideration and with the rise in China and generally in Asia it'd be nice to tap into those markets. But it's costly and difficult to enter new markets and get a foothold.

Lynnette: "Then I guess the obvious danger lies in the double dip recession they are talking about in Europe."

For Sweden I still believe our credit bubble is the main threat. We could weather a double dip alone pretty well I should think. Not saying it wouldn't be unpleasant but we'd get through it without too many problems.

But add a local banking crisis and the possibility that our government becomes forced to bail out banks and we could end up in a situation more like in Ireland. There'd be differences to the Irish example but it would be much nastier than just a temporary dip in our export markets.

Marcus يقول...

Our finance minister today: "We shall not have rising debt levels and we shall not have rising houseprices. It's of central importance that we gradually over the coming years impose stricter regulations on the banking sector" (my translation)

That's a pretty straigh forward statement. There are some ssuggestions also and one is further increased capitalisation rate. (I believe it's already been raised from the 6% Lee mentions to 85 but I am not prepared to claim that to be a fact right now). Also raised

Marcus يقول...

That should be 8%, not 85, of course.

RhusLancia يقول...

Marcus, what's a typical interest rate on a Swedish home loan?

During the bubble we had 40 year mortgages pop up to allow even more people to buy homes as prices went up up up. Typical mortgages are 30 or 15 years here.

   Lee C.  ―   U.S.A.     يقول...

 
      "But add a local banking crisis and the possibility
      that our government becomes forced to bail out banks
      and we could end up in a situation more like in Ireland.
"

My research was admittedly very superficial, but I got the distinct impression that Swedish banks and Swedish homeowners were quite minimally backed by the big Eurobanks of France and Germany, and that's what Petes keeps harping on as the underlying cause of Ireland's inability to reorganize its finances in a manner that addresses Ireland's troubles, instead of addressing the concerns of Germany and France.

   Lee C.  ―   U.S.A.     يقول...

 
@ Rhus and Lynnette

Sometimes it's good to take in a little good news

   Lee C.  ―   U.S.A.     يقول...

 
@ Rhus and Lynnette

Warren Buffet in favor of the ‘Buffet rule

Marcus يقول...

@Rhus

"Marcus, what's a typical interest rate on a Swedish home loan?"

Today it's about 3.3-3.5% if you go with floating interest. You can tie it down at about 3.2% for 3 years or 3.1% for 5 years. Normally you pay a premium for fixing the rate over a period but today it seems the "market" is in agreement that interest rates will fall further, and therefore you actually pay a premium for sticking with a floating rate.

All those rates are pretty much the listing prices and they are negitioable up to about 0.7%. But to get a better deal you'd have to either have very solid finances and/or have other business with the bank so they can earn more on that (the most common thing being pension plans with lousy fees).

Myself I got a 0.5% rebate and have my loans divided in three parts, one floating, one 3 years, one 5 years. It was tempting to lock it all for 5 years at todays rates but then I'd risk a possible large increase all at once if the whole loan expires and has to be re-negotiated at the same time.

Also it should be noted that interest payments are deductible against your salary earnings (or pension) so for most people you can deduct about 30% of the cost. This is IMO not a good thing as it only really benefits the banks in the long run, but if we were to move away from it it'd have to be gradually over many years since just removing that tax break would kill manys finances. They bought homes counting on that break.

What's a comon rate in the US right now?

Marcus يقول...

Lee: "Swedish banks and Swedish homeowners were quite minimally backed by the big Eurobanks of France and Germany, and that's what Petes keeps harping on as the underlying cause of Ireland's inability to reorganize its finances in a manner that addresses Ireland's troubles, instead of addressing the concerns of Germany and France."

Yes, there's a difference. But our banks would still have to be bailed out if they became insolvent, and the risk for that to happen is almost exclusively (today) due to the risk of a housing market crash here at home. I believe, and hope, our government would insist on stock in any bailed out banks in exchange for any tax payers money. Then to sell off the stock gradually once the banks become sound again. Worked pretty well in the -90s.

   Lee C.  ―   U.S.A.     يقول...

 
      "…the risk of a housing market crash here at
      home.
"

You keep anticipating a price crash for housing in the face of what you claim to be a housing shortage.  The basic rules of supply and demand would seem to mitigate against that.  We're not talkin’ ‘bout luxury items here.

   Lee C.  ―   U.S.A.     يقول...

 
      "But our banks would still have to be bailed out if
      they became insolvent…
"

That's a common fallacy.  One doesn't have to bail out banks just because they're insolvent.  As long as they have a positive cash flow they can be boosted along so long as one keeps the insolvency more or less hidden from the general population and keeps a panic from setting upon them.

Marcus يقول...

Lee: "You keep anticipating a price crash for housing in the face of what you claim to be a housing shortage. The basic rules of supply and demand would seem to mitigate against that."

Yes, if we had had a housing glut I'm sure there would have been a crash already. I'm hopeful we can have a more steady and calm landing with slowly decreasing prices and inflation eating up some of the over-pricing. But I don't rule out a crash. I'm not so much anticipating it as debating the likelihood and trying to foresee the consequences if it were to happen.

   Lee C.  ―   U.S.A.     يقول...

 
Got it.  I think ya'll have a fair shot at a soft landing.  Not guaranteed of course.

Lynnette In Minnesota يقول...

From Lee's Warren Buffet OpEd piece:

Between 1951 and 1954, when the capital gains rate was 25 percent and marginal rates on dividends reached 91 percent in extreme cases, I sold securities and did pretty well. In the years from 1956 to 1969, the top marginal rate fell modestly, but was still a lofty 70 percent — and the tax rate on capital gains inched up to 27.5 percent. I was managing funds for investors then. Never did anyone mention taxes as a reason to forgo an investment opportunity that I offered.

Under those burdensome rates, moreover, both employment and the gross domestic product (a measure of the nation’s economic output) increased at a rapid clip. The middle class and the rich alike gained ground.


A point that many people seem to have lost sight of.

When we all share in the burden we all benefit.

Personally changing the cutoff from $250,000 to $500,000 does not seem unreasonable and would exempt quite a few small businesses.

I loved the last line:

In the meantime, maybe you’ll run into someone with a terrific investment idea, who won’t go forward with it because of the tax he would owe when it succeeds. Send him my way. Let me unburden him.

lol!

That reminds me of what someone once said to me. He said he had no problem paying taxes because then he knew he was making money.

Lynnette In Minnesota يقول...

Marcus,

What's a comon rate in the US right now?

I think a 30 year mortgage is around 3.43% or 3.5%.

   Lee C.  ―   U.S.A.     يقول...

 
Last note of the day re:  American politics

Final counts are coming in.  American voters cast more votes for Democrats for seats in the House of Representatives than they did for Republicans.  The Democratic candidates got a combined 1 million votes more than the Republican candidates.  However, more Republicans got elected than did Democrats.
This may be likened to those instances where one party has won the popular vote for President, but another party has won the Presidency after it's been filtered through the Constitutionally mandated electoral college system.
We've had such a minority President four times in the country's history.  This is the fifth time we've had a minority of the vote produce a majority of seats for the minority party in the House of Representatives.  Like the instances of a minority President, it does happen occassionally.

   Lee C.  ―   U.S.A.     يقول...

 
Egypt:
The Brotherhood has announced that it will ‘postpone’ pro-Morsi demonstrations in Cairo, scheduled for tomorrow, to avoid street clashes between their Brotherhood supporters and opponents of Morsi's newest decrees.  If I were bettin’, I'd bet this means Morsi is feeling confident and that he doesn't need the demonstrations in his favor.

Marcus يقول...

Lynnette:

"a 30 year mortgage is around 3.43%"

That's close to what I'm paying if I add my interest payments (slightly lower) and what I choose to pay off on my loan (about 20 years to go. Yay!).

IMO a 30 year mortgage is a reasonable setup for a house loan. Some countries are stricter. I know Norway has a maximum of 25 years and I've heard Finland, Germany and France also have strict lending rules but I'm unfamiliar with the maximum mortgage periods there.

Anyway, in 30 years you should be able to pay off your house during your career. At least then it's a possibility for many to own their own property when they retire - something I think is one of the better insurances you can have.

Our system that allows people only to pay interest is crazy. Or like Pete said batshit-cracy. The problem is if it becomes the norm it's hard to change.

Let's say a young couple bought a new house at 4 million SEK (about $600K). They enter into it with only 5% down so they borrow 3.8 million. They pay an average interest rate of 3.5% (at the moment) amounting to 133.000 per year. They deduct about 30% off their taxes (tax money to banks) so their de facto interest payments are 93.000 per year or 7760 per month. Then there's maintenance and electricity on top of that so let's say they pay 10.000 in total to live.

What if politicians were to say: "no this regime with interest only is batshit-crazy. We need a maximum mortgage period like they have in so many other countries. Let's pick 30 years"

OK, so suddenly the couple have to pay off their 3.8 million loan over 30 years. That's about 10.500 a month (yeah, I know you can choose either s straight plan or a "ladder" but let's make this easy).

Their living costs then double from 10.000 to 20.500. That would kill many of them. People would be in bankrupcy all over the place. Prices would plummet. Banks would fall. Consumption would be dead. Unemployment would soar. Etc.

Like I said our average mortgage periods are 100 years for houses and 170 for apartments. This is a very serious problem and one that will remain for a long, long time.

Marcus يقول...

A whole other matter: let's talk Global Warming.

The Doha conference is going on and before it there have been reports stating that if we "do nothing" the average temperature will increase with 4 degrees by 2060. If we "do something" it will only increase by 2 degrees - still our fault though, those 2 degrees.

2 degrees is bad enough. 4 degrees would more or less mean disaster.

The most immediate consequence would be rising sea levels 1-2 meters; and drowth that can increase crops ruined by drowth from todays 15% to 44%. But possible the most severe one they mention is if the plankton in our seas die, the basis for the entire aquamarine food cycle. All of these are mentioned as consequences of a 4 degree increase. They are presented as facts. I have no real idea about how accurate they are myself.

Now, I never was a denier of global warming. I get the whole idea with greenhouse gases heating up the planet and that we do contribute to that by burning stuff and releasing CO2 and thus increasing the levels of greenhouse gases in the atmosphere.

But I'm starting to seriously question the level of impact we are told (by some) we have on this planet. 4 degrees warmer in 50 years because of us? Because of our emissions alone? It sounds exaggerated to me.

And that we can, by our actions today, collectively decide wether the globe heats up 2 or 4 degrees. I'm not at all sure I buy that.

Also I'm thinking this focus on CO2 alone is just one piece of the puzzle. Deforestation, over-fishing, dynamiting of Corral reefs, acid rain, water scarcity, waste of food, etc, etc. Admittedly some areas tie into the same issues as global warming but not all of them. And not one single word about over population. From 5 to 7 billion people on the planet in 21 years, how the hell are we supposed to consume less resources!?! The next billion will be added quicker than the last so 8 Billion will happen sometime after 2020. But apparently that's not an issue, not part of any problem?

We are basically told we can grow the global population, improve the lives of all people on earth (reduce poverty), which requires more efficient food production and transports, but we must do this without using those fossil fuels that make efficient food production and transports possible. Am I the only one starting to seriously doubt this?

   Lee C.  ―   U.S.A.     يقول...

 
      "But I'm starting to seriously question the level of
      impact we are told (by some) we have on this planet.
"

I grew up in a rural, backwoods environment, way back in the woods.  My opinion; city folks have no clue how significantly and rapidly human impact on the overall environment, including the climate, can develop.  The fabric unravels real fast.  I don't question the impact we have on this planet.  That said, I don't claim to know whether to expect 2° or 4°.  Either's gonna be a bitch to deal with.
We are not going to destroy the planet.  The planet will survive just fine.  It's the ecological niche that we inhabit that we'll destroy.  It's not about saving the planet; it's about saving ourselves.

      "We are basically told we can grow…[etc.]…
      Am I the only one starting to seriously doubt this?
"

I don't know who's been tellin’ you that's possible.  I don't believe that for a minute.  Mother Nature will strike back; it's gonna happen.  I don't believe even the current population is sustainable at the current level of technology, much less billions more.

RhusLancia يقول...

Lee C: " I don't believe even the current population is sustainable at the current level of technology, much less billions more."

Cheer up, Lee. Sometimes it's good to take in a little good news.

RhusLancia يقول...

re: the Buffet Rule. If Mr Buffet is so keen on paying more to the government, what's stopping him?

   Lee C.  ―   U.S.A.     يقول...

 
You suggesting that taxes ought to be collected on a solely volunteer basis?

Lynnette In Minnesota يقول...

If I were bettin’, I'd bet this means Morsi is feeling confident and that he doesn't need the demonstrations in his favor.

I think I'd disagree. I think it means he and his handlers might be realizing that governing is a little different than being in the opposition. You really have to be careful not to piss off too many people or you might find yourself out on the streets. In some cases this has happened rather unceremoniously.

Petes يقول...

Marcus - that 4 million SEK house that you mentioned ... how much would it cost to rent, typically? Why wouldn't your young couple rent, given that they're never going to own their house on interest only anyway?

   Lee C.  ―   U.S.A.     يقول...

 
      "I think I'd disagree."

Certainly room to entertain that notion.  The big question, I think, well, questions, plural…
  1.  Can the democracy movement sustain the energy needed for a second Tahrir Square uprising?  …and…
  2.  Has Morsi sufficiently cowed the old military men and taken control there such that The Army will support him in the face of a second uprising?
  3.  If the Morsi needs The Army and they cut him loose, will The Brotherhood be strong enough to put down the uprising?
  4.  Will that result in civil war in Egypt?

Petes يقول...

[Lynnette]: "Thursday morning at 10 a.m. I was outside without a coat in 60F (15.55C) degree temps putting up Christmas lights. That evening we were in the middle of a snowstorm."

Uh huh. Must be nearly cannibal season there again. :)

Here, the weather continues to be most strange too. It rained torrentially for a couple of days and there was some flooding just down the road from me two nights ago. However, that was only the very edge of the system that sat over the south west of Britain and deluged the place. They have had incredible volumes of rain and high winds, and there is a lot of flood damage. It seems to have even made the news over there -- I noticed it on CBS evening news.

But it's all about to be replaced by arctic conditions. Hot (or should I say, cold) on the heels of the rain, the temperatures are due to plummet to freezing conditions over the next few days. Here they're predicting -5C overnight. I know that would be balmy by Minnesota winter standards, but it would be an unusuakky hard cold here (if the two winters before last had not redefined "unusual").

Petes يقول...

"unusuakky" -- not what I meant to say ... but it actually sounds quite apt :)

Lynnette In Minnesota يقول...

Marcus,

Is $600K an average cost of a home in Sweden? Here, in Minnesota, that would be considered higher end. What income level would a young couple feel adaquate to invest at that price level? Or perhaps that is not an issue given the low down payment required and the interest only 100 year loans? Which is why those terms exist. Otherwise no one could buy a home.

What happens when you die and the loan has not been paid off? Does it get included in the liabilities of the estate? Passed down to children?

Lynnette In Minnesota يقول...

It's not about saving the planet; it's about saving ourselves.

I think this pretty much sums up my thinking on the matter too.

But I'm starting to seriously question the level of impact we are told (by some) we have on this planet. 4 degrees warmer in 50 years because of us? Because of our emissions alone? It sounds exaggerated to me.

I think that was always the question. How much did humankind act as the catalyst for global climate change? If we knew that we would have some idea of whether or not we could slow it down or reverse it.

From what I have read it is not necessarily a given that global climate change will be a gradual thing. There is a great possibility that it could be an abrupt shift, which would not allow us to adapt properly. So, Marcus, population growth may not be the big issue you might think. Survival will be.

Lynnette In Minnesota يقول...

1. Can the democracy movement sustain the energy needed for a second Tahrir Square uprising? …and…

All good questions. How determined are the Egyptians in their quest for more freedom? And how patient are they for improvements to be made in their living standards? They've been waiting a long time for both. Morsi may be living on borrowed time. They weren't too thrilled with his detour into international relations with the Israel/Hamas standoff. It doesn't put food on Egyptian tables.

Lynnette In Minnesota يقول...

Must be nearly cannibal season there again. :)

:)

We'll see. Here too the weather seems to shift back and forth between normal and weird. It's been feeling like December or January since Thanksgiving evening. But by the end of the week we're supposed to be back to September.

How can anyone expect the poor plants to know what season it is?




RhusLancia يقول...

Lee: "You suggesting that taxes ought to be collected on a solely volunteer basis?"

No, but if Mr Buffet is chomping at the bit to pay more in taxes than he's currently required, why doesn't he just do it?

   Lee C.  ―   U.S.A.     يقول...


So, what makes you think he's ‘chomping at the bit’ to be the only one to pay more?  Where'd you get that notion?

RhusLancia يقول...

I don't know if he's the only one. Doesn't matter if he is or not, I reckon. But he certainly is advocating paying higher taxes. So go for it, Mr Buffet - knock yerself out.

   Lee C.  ―   U.S.A.     يقول...

 
Re:  American politics

The ‘Benghazi scandal’ ain't sellin’ outside of the faithful Republican base.  They're losin’ this one by fourteen points, 54% to 40%, and the White House hasn't even struck back yet.

   Lee C.  ―   U.S.A.     يقول...

 
      "But he certainly is advocating paying higher
      taxes.
"

Ah…  I can see your error now.  You have misunderstood his position.  Perhaps it would help if you actually read his op-ed piece.  (Helpful link repeated here.)  He was advocating that the federal government actually assess higher taxes on those making over $500,000.00.  He was not suggesting that he should pay more on a volunteer plan while others did not.

Marcus يقول...

Pete: "Marcus - that 4 million SEK house that you mentioned ... how much would it cost to rent, typically? Why wouldn't your young couple rent, given that they're never going to own their house on interest only anyway?"

There's a very limited rental market for houses here. And with very limited I mean it's almost insignificant. I simply couldn't tell how much a house would cost to rent because I know of no one who rents one.

Marcus يقول...

Lynnette:

"Is $600K an average cost of a home in Sweden? Here, in Minnesota, that would be considered higher end."

In Sweden in total it would be high. In Stockholm on the lower end. In Malmö it'd be about the average price in a good (but not the most expensive) areas.

"What income level would a young couple feel adaquate to invest at that price level?"

Too low is my opinion, but it's difficult to say.

"Or perhaps that is not an issue given the low down payment required and the interest only 100 year loans?"

It should be an issue but precisely the factors you mention make (or made) many pay more than they should, because they calculated only the lowest possible monthly cost.

"Which is why those terms exist. Otherwise no one could buy a home."

Chicken or egg. The prices went up as far as they did because of lax regulation and stupid buyers habits.

"What happens when you die and the loan has not been paid off?"

Not entirely sure becausse I haven't looked into it. I believe though that the house would be sold, the bank reclaim the loan, if there's anything left that goes to the heirs, but if there's a negative value the bank is stuck with it. Or you take over ownership and the remaining debt. But I don't think you could ever be forced to take over an underwater property. I'm fairly certain of that but not 100% sure.

RhusLancia يقول...

Lee: "He was not suggesting that he should pay more on a volunteer plan while others did not."

I know, he's suggesting other rich people like him pay more in taxes. I'm just saying he doesn't need to wait for the tax code before he himself contributes whatever he thinks is fair.

RhusLancia يقول...

Lee: "They're losin’ this one by fourteen points, 54% to 40%"

22% of those polled don't remember seeing Ben Gazi on 'Merkin Idol but think the bitter racist republictards should just get over him getting voted off the island or whatever.

   Lee C.  ―   U.S.A.     يقول...

 
      "I simply couldn't tell how much a house would cost
      to rent because I know of no one who rents one.
"

In effect you are renting one.  Actually, renting would be an improvement for you, your estate wouldn't be on the hook for any drop in value if you were renting outright.  So, you're not only not acquiring any real equity in the property, you're not acquiring equity while you're simultaneously accepting the primary risk of devaluation. (And yet Petes thinks this is a ‘bubble’ of some sort.)
 
             ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
      "I'm just saying he doesn't need to wait for the tax
      code before he himself contributes whatever he thinks
      is fair.
"

I believe I've mentioned before that I'm leery of any arguments predicated on the notion of what taxes might be ‘fair’.  Nor did Buffet rely upon, or even touch upon, the concept of what's ‘fair’ in making his argument.
But, setting that red herring aside…
What evidence do you have that he has not contributed what he thinks is ‘fair’?
 
             ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
      "22% of those polled…think the bitter racist
      republictards should just get over…whatever.
"

Unlikely to happen.  As usual, they're listening to their own echo chamber on this one, deaf to anything else, and most likely they're gonna push it until they embarrass themselves and their party with the moderate independents.  (In fact, I've been half suspicious that the Obama administration's just been baiting ‘em, and is generally okay with the notion that they're takin’ the bait.)

   Lee C.  ―   U.S.A.     يقول...

 
Post Script, re:  renting property

In the rent-controlled markets that exist in some of our major cities (and I remind folks that those rent controls generally apply only to existing rental housing; new rentals are generally exempted and go on the market at market prices), landlords typically do not make repairs or improvements to rent-controlled spaces.  If the wiring or heat or plumbing or whatever, goes bad--then the renter fixes it himself.  If the renter wants improvements, more closets, different floorplan, then the renter pays for it himself at his/her own cost.
The landlords are generally more than happy to have the space condemned as unfit for human habitation.  Then they can kick the renter out, and refurbish the space themselves, and then re-rent it as a new unit (new to the rental market anyway--it having been condemned and taken off market) and they'll get market prices for it when it goes back on the market.

Petes يقول...

Marcus - what happens at death would presumably depend on whether the loan is recourse (as is common in the UK & Ireland) or non-recourse (common in the US iirc). If it is recourse, the bank would have first call on the person assets or estate. If you have such a loan yourself, it might be an idea to find out!

So if there is no rental market, what do people do who can't or won't get a loan? Is there social housing? How is it funded?

Petes يقول...

Did the White House just throw Susan Rice to the lions?

Petes يقول...

[Marcus]: "But I'm starting to seriously question the level of impact we are told (by some) we have on this planet. 4 degrees warmer in 50 years because of us? Because of our emissions alone? It sounds exaggerated to me."

Why does it sounds exaggerated? What basis do you have to either believe it or disbelieve it?

RhusLancia يقول...

Lee: " I've been half suspicious that the Obama administration's just been baiting ‘em"

Well with four dead Americans and series problems surrounding it before, during, and after the attack I think you may be right. That's the kind of admin we have after all. But when I said earlier they were playing politics you laughed. I guess you're changing your mind? Or just admitting it now in so many words?

RhusLancia يقول...

Lee: "What evidence do you have that he has not contributed what he thinks is ‘fair’?"

Only that I think he'd be singing his own praises about it if he payed more than he legally owed...

   Lee C.  ―   U.S.A.     يقول...

 
      "…or non-recourse (common in the US iirc)…"

Almost never non-recourse. 

             ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
      "But when I said earlier they were playing politics
      you laughed.
"

And I still would laugh at that.  But I sometimes suspect it's gotten personal, not political, personal.  It's been personal for McCain for a long time.  And now I sometimes get the impression Obama's finally had enough of it.  Quoting from his news conference:

      "But when they go after the U.N. ambassador,
      apparently because they think she's an easy target,
      then they've got a problem with me.
      "If Sen. McCain and Sen. Graham want to go after
      somebody, they should go after me.
"
 
             ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
      "I think he'd be singing his own praises about it if he
      payed more than he legally owed...
"

Why have you switched from speculating ‘bout what he thought was ‘fair’ to speculating ‘bout what he ‘legally owed’?  Or do you contend he thinks it's ‘fair’ for him to pay extra on volunteer basis when others in his income bracket pay only what they ‘legally owed’?  And, if you're making a play for that latter notion, where the hell did you get that idea?

   Lee C.  ―   U.S.A.     يقول...

 
      "Did the White House just throw Susan Rice to
      the lions?
"

Don't think so.  I think they tried to make peace and were rebuffed.  (And it is possible that Rice didn't take that well; she has a history of sometimes being rather undiplomatic when dealing with sniping Senators.  McCain has his own history of not taking push-back very well, and I can see how it might not go well towards the end.)  Senator Joe Lieberman, long-time thorn in Obama's side, was also there at the meeting and he said that she was open and forthcoming and that he was satisfied.  But, he's retiring in January and is putting down his political axes.

Marcus يقول...

Lee: "In effect you are renting one."

To a degree yes (but an apartment, not a house). Since I have borrowed money to buy it the bank is part owner. But if you were to assess the current market value and divide it into what I owe and what I own I own about 43% of my place and the bank owns the remaining 57% you could say. Theoretically its value could fall enough so I too would have negative equity but I doubt it.

Lee: "Actually, renting would be an improvement for you, your estate wouldn't be on the hook for any drop in value if you were renting outright."

In interest and service cost I pay 5600 today. Then I pay off on the loan as well but I see that as savings, and I could stop doing that any day I so decided. A similar rental would cost me about 9500, give or take 500. So in one way you are wrong. I'd increase my monthly costs.

But you are right that I could do as Rhus says and cash in my accumulated profits while I have the chance, pay off my debt, rent for a while and then possibly buy something when I think the market is more reasonably priced. But I'd also have to face a seriously bad rental market and would probably have to move to a less desirable area and maybe have a hard time even finding something I like at all. Still, it could be a really good thing financially so I have been toying with the idea. If it was solely a financial decision it'd be a no-brainer.


Marcus يقول...

Pete: "So if there is no rental market, what do people do who can't or won't get a loan? Is there social housing? How is it funded?"

They don't live in houses at all, they are stuck living in rented apartments. And for apartments also it's increasingly hard for people to find a reasonable place to live. Some students can't get accomodations where they got into school, many youngsters are forced to stay at home with their parents even when they wish to move out, families live in too crowded apartments and can't get a bigger one and can't afford to buy something, etc. It's a major social issue and it's talked about a lot.

   Lee C.  ―   U.S.A.     يقول...

 
      "To a degree yes…"

Well, not nearly to the degree I thought.  I was thinking of those 170 year amortizations and 5% down.  And so was erroneously assuming your equity was way below 43% and probably not improving significantly in anything like a reasonable time span.  (We call the purchased apartments condominiums; I do not know why that name got popular.)  So, I'll modify my accusation to say that people who're doing, or were doing, those low and no down-payment deals aren't really buying anything.  They're basically renting, but paying a penalty in freedom and mobility, a penalty imposed by the price controlled open rental market.

   Lee C.  ―   U.S.A.     يقول...

 
Quaere then:

What's to keep you from renting out your current apartment if you buy something else to live in?

Lynnette In Minnesota يقول...

They don't live in houses at all, they are stuck living in rented apartments.

Ahh...I see. When I talk about renting I mean either houses or apartments. Here you can rent or buy just about anything. Many people just starting out will rent apartments or townhomes with a roommate to share expenses and only buy something when they have an idea of what area they will be staying in, or are starting a family. When the market tanked you saw more people moving into the rental market because of foreclosure.

Traditionally you would see people buying "starter homes"(lower priced property) and then moving on when their circumstances changed, family, kids etc. Just recently we have actually started seeing people skipping the "starter home" scenario, because of low prices, and buying something larger even though they don't need the space yet. They seem to have the idea that they will be staying put in that spot for a long time. Financially this may be smart, but I think they don't take into account the fact that other things play a part in where people choose to live, such as job or medical issues.

My Uncle and Aunt, who are both retired, have chosen to rent out the townhome they had bought. My Aunt retired a little earlier than planned, due to layoffs within her compnay, and finances became tight. In the summer they live at the mobile home they have on a golf course, and winter in Arizona. The in-between times they stay with their daughter and her family. That was their solution to how the crash affected them. As the housing market recovers they may choose to try to sell, or not, depending on how things go. But at the moment they are very happy with the two girls they are renting to.

Lynnette In Minnesota يقول...

Some students can't get accomodations where they got into school, many youngsters are forced to stay at home with their parents even when they wish to move out, families live in too crowded apartments and can't get a bigger one and can't afford to buy something, etc. It's a major social issue and it's talked about a lot.

It does sound like you need to look at loosening that logjam you have in housing. I know we have gotten into trouble with this, but some deregulation is not a bad thing. It would encourage smaller companies to dip their toes into the market and boost supply.

Petes يقول...

Ditto ... by housing I meant houses or apartments.

So, Marcus, is there a private rental market on apartments ... and what is a typical rental yield, i.e. annual rental income divided by purchase cost, both before and after tax.

   Lee C.  ―   U.S.A.     يقول...

 
Your guys keep pickin’ losin’ fights Rhus.  As if the longed for ‘Benghazi scandal’ isn't enough…

      "Six-in-10 Americans support raising the marginal
      tax rate on income above $250,000, according to a
      Washington Post/ABC poll. Only 37 percent would
      oppose a tax hike. Seventy-three percent of Democrats
      and 63 percent of independents support such a move,
      while 59 percent of Republicans oppose it
                                      ***
      "Less popular is a plan floated by Mitt Romney and
      some other Republicans to limit deductions. Only 44
      percent of Americans support the idea, and 49
      percent oppose it. That idea is actually least popular
      among Republicans, with 51 percent rejecting it.
"
      Politico.com

And, I saw poll numbers last week that showed the general population was already poised to blame the Republicans if the ‘fiscal cliffs’ negotiations deadlock.  And yet, your guys show every indication of being completely willing to walk straight into that one too.

   Lee C.  ―   U.S.A.     يقول...

 
Back to Marcus:

Figuring you pay something on the principle of the loan, but some folks don't bother to do that, and figuring a comparable rental would cost you 9,500, I figure there's a premium on apartment rentals of roughly one/third over ‘ownership’ payments.  And that's with rent controls in place.  Is that about right or am I missing something here? 

Marcus يقول...

Lee: "I'll modify my accusation to say that people who're doing, or were doing, those low and no down-payment deals aren't really buying anything. They're basically renting, but paying a penalty in freedom and mobility"

I couldn't agree more. Still I have had discussions with otherwise educated and intelligent people who are furiously defending their choice to pay interest only. In their eyes I was the anomaly becaue I have a strong will to actually own my home and a plan to hopefully get there. I've tried to explain that everywhere else in the world except, as far as I know, in Sweden and possibly also Holland the view is completely different. But I believe the coin is slowly dropping. It should be said that many here share my opinion on the matter. It seems a clear dividing line is wether you're old enough to personally remember the 90's crisis or not, which I am.

Lee: "What's to keep you from renting out your current apartment if you buy something else to live in?"

Ah! That's another one of those aspects I believe is unique to Sweden. It'll take a bit of explaining:

When a builder constructs an apartment building to sell the apartments and not to remain landlord and rent out they create a "builders-community". Once the shares in this "community" (can't think of a better word in English) is sold the individual owners take over this community together after due diligence is done, its debts (if any) and its obligations. This concept of apartment building "communities" has its own legal framework and one thing is that individual owners have more limited ownership rights than you'd be acccustomed to. For one thing the owner is pretty much free to rent out the place for up to 1 year, but the community has some limited screening right over the tenant. After one year has passed however the community can say no you may not rent it out any longer. So it'd depend on the particular community and how it enforces those rules. On the minus side it does restrict ownership, on the plus side it does shield you from speculators who might buy up apartments and install... unsavoury tenant neighbors next door to you.

Marcus يقول...

Lee: "Figuring you pay something on the principle of the loan, but some folks don't bother to do that, and figuring a comparable rental would cost you 9,500, I figure there's a premium on apartment rentals of roughly one/third over ‘ownership’ payments. And that's with rent controls in place. Is that about right or am I missing something here?"

That can be the case and it is for me. Because for one thing I got a really good deal on my home, in part because of a lot of looking around and in part by sheer luck. Second the interest rates are below normal right now. I calculated on 5-6% interest rates over the long run when I did my budget and have an average rate of 2,9% at the moment. So for those who didn't over-indulge in the housing market right now are good times with low costs.

Marcus يقول...

Pete: "So, Marcus, is there a private rental market on apartments ... and what is a typical rental yield, i.e. annual rental income divided by purchase cost, both before and after tax."

That's another one of areas where regulation throws a spanner into the works. You're not allowed to charge a market price if you rent out your own apartment but it must be "in line", meaning no more than 10% above, with rental apartments in the surrounding area. Since that market is regulated and since prices in attractive areas are so high, the yield is pathetic precisely in those areas where demand is the highest. There are initiatives to try to change this by our centre-right government but fierce resistance from the left who fear it would be a first step to get rid of rent control all together. (you can probably guess my position)

Marcus يقول...

@Lynnette

Interesting posts.

Lynnette: "It does sound like you need to look at loosening that logjam you have in housing. I know we have gotten into trouble with this, but some deregulation is not a bad thing. It would encourage smaller companies to dip their toes into the market and boost supply."

I agree. But I don't count on it. I believe little will be done until the next election except differennt parties will try to position themselves in different ways on housing. It'll be one of the political issues probably ranking after the economy and alongside schools and immigration policy.

   Lee C.  ―   U.S.A.     يقول...

 
      "builders-community"

Usually called an ‘owners' association’ or ‘home owners association’ here in The States.  I'm not sure what the term might be in Britain or Australia.  Many builders also include them in the deals for their sub-division homes (free standing, individual homes with yards and garages and fences and traditional stuff), especially for up-scale sub-divisions.  Their powers are usually included in the deeds as ‘restrictions’ on usage.

      "I got a really good deal on my home…"

Okay; not the norm then.  ‘Cause I was thinking that a premium of that size should support a rental market. 

   Lee C.  ―   U.S.A.     يقول...

 
Post Script:

      "Usually called an ‘owners' association’ or ‘home
      owners association’ here in The States."

Obviously, not unique to Sweden, as we have a term for it too.  But, sufficient economic incentives (and a 50% premium usually would count as sufficient incentive) would usually get the ‘home owners association’ to be reasonable about approving rentals so long as they retain a reasonable power to disapprove of a tenant both before and after the tenant takes posession.

Lynnette In Minnesota يقول...

[Marcus] builders-community

[Lee] Usually called an ‘owners' association’ or ‘home owners association’ here in The States.

That would be the arrangement that my Aunt and Uncle would be living under with their townhome. They may own the home, but they must get approval for various things from the association board. I don't know what the details were on their renting it out. I will have to ask them about that. I know the associations can be pretty sticky about stuff. One of the people I work with owns a townhouse in AZ and one of her neighbors put in a patio without the association board's approval. Mistake. They made them rip it out. My co-worker was rather irritated about that because it was actually a very nice patio that enhanced the property. That, and her father who sits on the board was instrumental in getting it removed. A little embarrasing for her.

Petes يقول...

Marcus, your property market sounds pretty disfunctional. There is a stranglehold on supply, and regulatory disincentives against improving that. And while changing the regulatory framework is likely to be popular with those seeking accommodation, it will be unpopular with those for whom a softening of the market could mean falling equity and higher repayments. But something's gonna bite you in the ass eventually anyway, because somewhere along the way, external factors will force interest rate changes. So, sounds like your gubmint has a bit of a tightrope to walk ... something that gubmints are rarely good at, seeing as they are elected by vested interests.

Marcus يقول...

Pete, that was a very good description of the property market here in Sweden. I nodded in agreement through the whole text.

   Lee C.  ―   U.S.A.     يقول...

 
So, in the end, all agree that the problem comes down to a bottleneck on the supply of housing units.  And the solution means dealing intelligently with the breakout of the bottleneck, or at least trying to deal with it intelligently.  Who'da thunk it?
 
             ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
Looks like Fatah and the Palestinian Authority are going to get their ‘observer’ status pushed through the U.N. today.

Lynnette In Minnesota يقول...

Hmmm...looks like some very lucky people in Arizona and Missouri woke up very rich today. That is where the winning lottery tickets for the $500 million jackpot were sold.

Take the lump sum. You know what they say, a bird in the hand is worth two in the bush. :)

غير معرف يقول...

 
Re American politics

Budget talks are at an impasse today.  The Democrats still want to raise taxes and have identified the taxes they want to raise.  The Republicans want the Democrats to cut spending instead and are pretty much squat in place, demanding that the Democrats propose specific spending cuts before anything else can happen.  So far nobody's blinked.

غير معرف يقول...

 
Re American politics

Budget talks are at an impasse today.  The Democrats still want to raise taxes and have identified the taxes they want to raise.  The Republicans want the Democrats to cut spending instead and are pretty much squat in place, demanding that the Democrats propose specific spending cuts before anything else can happen.  So far nobody's blinked.

And Glenn Hannibaugh is ranting mostly ‘bout Benghazi today.

Lynnette In Minnesota يقول...

Meanwhile, in Wahsington, it appears we are back to square one on the fiscal cliff negotiations. Will they never learn?

Lynnette In Minnesota يقول...

Hmmm...

Wahsington should be Washington. Although perhaps the first spelling is more appropriate.

غير معرف يقول...

 
      "Will they never learn?"

I believe they have learned, but maybe learned the wrong lessons.  The Democrats still want to raise taxes. The Republicans want the Democrats to cut spending instead, or at least before they consider any revenue increases.
Last time around the Republicans managed to get what they considered ‘a win’ by threatening a debt default.  Obama folded, more or less.  They believe he'll fold again.  They think the threat of an economic slowdown will bend him to their will.
I believe they are mistaken.

غير معرف يقول...

 
      "Will they never learn?"

I believe they have learned, but maybe learned the wrong lessons.  The Democrats still want to raise taxes. The Republicans want the Democrats to cut spending instead, or at least before they consider any revenue increases.
Last time around the Republicans managed to get what they considered ‘a win’ by threatening a debt default.  Obama folded, more or less.  They believe that he'll fold again.  They think the threat of an economic slowdown will bend him to their will.

I believe they are mistaken.

Petes يقول...

Zeyad - what'd you do to your blog page ... it loads about 20 times faster! It's become usable again. (Same browser, same OS, same machine, same network connection on my end).

Petes يقول...

So, what's the USA's big problem with non-member observer status for Palestine at the UN? Apart from Israel is against it, and the US is against whatever Israel is against. Would this not be an opportunity to strengthen Mahmoud Abbas, the nearest thing Israel has to a moderate Palestinian they could negotiate with? The Israeli UN envoy speaking after today's vote came pretty close to bald faced lies. He said Abbas wanted statehood but didn't recognise the Israeli state. Whatever Abbas has said in the past, in a speech before today's vote he specifically said that the Israeli state was established years ago and would not be delegitimised by today's vote. The Israeli envoy also himself referred to Israel as "a state for the Jewish people" ... doesn't exactly gel with the oft heard claims that Israel is the most democratic state in the Middle East for both Arabs and Jews.

غير معرف يقول...

 
      "So, what's the USA's big problem with non-
      member observer status for Palestine at the UN?
"

Mostly borders.  If the Palestinians can successfully negotiate with the U.N. for a declaration of statehood before it has sovereign borders, then there's probably not much keeping the U.N. from going the next step; the Palestinians decide they can likewise designate Israel's borders by vote of the U.N. General Assembly.

      "The Israeli UN envoy speaking after today's vote
      came pretty close to bald faced lies.
"

Pretty close?

غير معرف يقول...

 
      "So, what's the USA's big problem with non-
      member observer status for Palestine at the UN?
"

Mostly borders.  If the Palestinians can successfully negotiate with the U.N. for a declaration of statehood before their ‘state’ even has sovereign borders, then there's probably not much keeping the U.N. from going the next step; the Palestinians decide they can likewise designate Israel's borders by vote of the U.N. General Assembly and the U.N. goes along with that.

      "The Israeli UN envoy speaking after today's vote
      came pretty close to bald faced lies.
"

Pretty close?

غير معرف يقول...

 
      "So, what's the USA's big problem with non-
      member observer status for Palestine at the UN?
"

Mostly borders.  If the Palestinians can successfully negotiate with the U.N. for a declaration of statehood before their ‘state’ even has sovereign borders, then there's probably not much keeping the U.N. from going the next step; the Palestinians decide they can likewise designate Israel's borders by majority vote of the U.N. General Assembly and the U.N goes along with that.

      "The Israeli UN envoy speaking after today's vote
      came pretty close to bald faced lies.
"

Pretty close?

غير معرف يقول...

 
      "So, what's the USA's big problem with non-
      member observer status for Palestine at the UN?
"

Mostly borders.  If the Palestinians can successfully negotiate with the U.N. for a declaration of statehood before their ‘state’ even has sovereign borders, then there's probably not much keeping the U.N. from going the next step; the Palestinians decide they can likewise designate Israel's borders by vote of the U.N. General Assembly and the U.N. goes along with that.

      "The Israeli UN envoy speaking after today's vote
      came pretty close to bald faced lies.
"

Pretty close?

غير معرف يقول...

 
      "So, what's the USA's big problem with non-
      member observer status for Palestine at the UN?
"

Mostly borders.  If the Palestinians can successfully negotiate with the U.N. for a declaration of statehood before their ‘state’ even has sovereign borders, then there's probably not much keeping the U.N. from going the next step; the Palestinians decide they can likewise designate Israel's borders by vote of the U.N. General Assembly and the U.N. goes along with that too.  There are other considerations, but it's mostly borders.

      "The Israeli UN envoy speaking after today's vote
      came pretty close to bald faced lies.
"

Pretty close?

غير معرف يقول...

 
      "Will they never learn?"

I believe they have learned, but maybe learned the wrong lessons.  The Democrats still want to raise taxes. The Republicans want the Democrats to cut spending instead, or at least before they consider any revenue increases.
Last time around the Republican House leadership managed to get what they considered ‘a win’ by threatening a debt default.  Obama folded, more or less.  They believe that he'll fold again.  They think the threat of an economic slowdown will bend him to their will.

I believe they are mistaken.
 
             ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
 
      "So, what's the USA's big problem with non-
      member observer status for Palestine at the UN?
"

Mostly borders.  If the Palestinians can successfully negotiate with the U.N. for a declaration of statehood before their ‘state’ even has sovereign borders, then there's probably not much keeping the U.N. from going the next step; the Palestinians decide they can likewise designate Israel's borders by majority vote of the U.N. General Assembly and the U.N. goes along with that too.  There are other considerations, but it's mostly borders.

      "The Israeli UN envoy speaking after today's vote
      came pretty close to bald faced lies.
"

Pretty close?

غير معرف يقول...

 
      "Will they never learn?"

I believe they have learned, but maybe learned the wrong lessons.  The Democrats still want to raise taxes. The Republicans want the Democrats to cut spending instead, or at least before they consider any revenue increases.
Last time around the Republican House leadership managed to get what they considered ‘a win’ by threatening a debt default.  Obama folded, more or less.  They believe that he'll fold again.  They think the threat of an economic slowdown will bend him to their will.

I believe they are mistaken.
 
             ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
 
      "So, what's the USA's big problem with non-
      member observer status for Palestine at the UN?
"

Mostly borders.  If the Palestinians can successfully negotiate with the U.N. for a declaration of statehood before their ‘state’ even has sovereign borders, then there's probably not much keeping the U.N. from going the next step; the Palestinians decide they can likewise designate Israel's borders by majority vote of the U.N. General Assembly and the U.N. goes along with that too.  There are other considerations, but it's mostly borders.

      "The Israeli UN envoy speaking after today's vote
      came pretty close to bald faced lies.
"

Pretty close?

   Lee C.  ―   U.S.A.     يقول...

 
      "Will they never learn?"

I believe they have learned, but maybe learned the wrong lessons.  The Democrats still want to raise taxes. The Republicans want the Democrats to cut spending instead, or at least before they consider any revenue increases.
Last time around the Republican House leadership managed to get what they considered ‘a win’ by threatening a debt default.  Obama folded, more or less.  They believe that he'll fold again.  They think the threat of an economic slowdown will bend him to their will.

I believe they are mistaken.
 
             ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 
      "So, what's the USA's big problem with non-
      member observer status for Palestine at the UN?
"

Mostly borders.  If the Palestinians can successfully negotiate with the U.N. for a declaration of statehood before their ‘state’ even has sovereign borders, then there's probably not much keeping the U.N. from going the next step; the Palestinians decide they can likewise designate Israel's borders by majority vote of the U.N. General Assembly and the U.N. goes along with that too.  There are other considerations, but it's mostly borders.

      "The Israeli UN envoy speaking after today's vote
      came pretty close to bald faced lies.
"

Pretty close?

   Lee C.  ―   U.S.A.     يقول...

 
Note for Evil Merkins:

Fordham University has analyzed polling accuracy in the last election cycle.  (results here).

Petes يقول...

Israel doing its own bit of border massaging.

Petes يقول...

Lynnette, apparently your garden is becoming more like RhusLancias... at least if they are typical Minneapolitan and Phoenician locations.

http://www.nytimes.com/2012/12/02/magazine/the-wild-life-of-american-cities.html?_r=0

Petes يقول...

Marcus, re: global warming ...
Did you see that report in the last few days about both Arctic and Antarctic ice melting three times faster than twenty years ago, and Greenland five times faster? The Antarctic alone is losing a trillion tons of land ice per decade.

http://www.slate.com/blogs/bad_astronomy/2012/11/30/global_warming_is_melting_greenland_and_antarctic_ice_and_contributing_to.html

There seems to be very little doubt that rapid warming is occurring. There may be a little more doubt -- but not much -- about what is causing it. I'd say there are bigger doubts about what will happen next. CO2-induced warming is pretty basic physics, but General Circulation Models (GCMs) that are used to predict what will happen to the climate as a result have many assumptions built in that may or may not be accurate.

And, of course, the biggest doubt of all is what we should do about it. For better or worse we are wedded to a way of life that seems to be bad for the planet. On the other hand, it's pretty good for us for the time being -- not all of us, but more than ever before. In spite of your population concerns, the percentage of hungry people in the world now is one third less than just twenty years ago, and conflict and political turmoil is to blame for a good deal of what remains (source: UN Report).

My own views on ecological issues are that we could, and should, be doing more to protect the environment. At the same time, I try to avoid the sort of environmental doomsterism that passes for concern in some quarters. My childhood was mostly in the seventies when the doomster flavour of the month was that the world would inevitably be wiped out by muclear war, which was pretty depressing stuff if you let it get to you (and I did). There's always some catastrophe round the corner ... which I put down to human psychology more than concrete reality.

Petes يقول...

Lynnette, apparently the American idea of engine downsizing is going from a V8 to a V6 :-)

http://www.nbcnews.com/business/car-engines-downsized-without-sacrificing-power-1C7301603

Ok, I'm somewhat joking. I was surprised to see that Ford are going to sell a one litre Fiesta in the States. Here, there have been car engines of 900cc and even smaller for at least thirty years. But recently, as the article says, those engines have been higher tech, and higher power output than ever.

My own brother just started driving a 1.2 litre petrol car that replaced last years 1.6 model. And I drive a 1.6 L diesel car by the same manufacturer the replaced the previous 2.0 L model. It's got dramatically better pulling power, as well as fuel efficiency, than the 1.6 L petrol that I replaced with it, and much lower CO2 emissions.

Petes يقول...

Susan Rice might have to sell her TransCanada shares (the Keystone pipeline people) if she gets the State Department job.

Petes يقول...

Mississippi river still heading for record lows, and will become unnavigable this month without intervention.

Water diverted for fracking in the Dakotas

Not enough coordination across Missouri and Mississippi

Rocks to be removed from Mississippi bed

   Lee C.  ―   U.S.A.     يقول...

 
      "Israel doing its own bit of border massaging."

The Likud Party are not being reasonable about those settlements.

Petes يقول...

Hey! My home town in an international oil story! This was all shot a few hundred yards from where I grew up...

http://www.bloomberg.com/video/celebrity-village-braced-for-fight-in-oil-plan-~rHS~96_TmiTiX7yXdnUJA.html

Petes يقول...

It’s amazing how many things in maths and physics came together over a period of a couple of decades, leaving Einstein in the right place at the right time to unify them. I was reading about the background to the invention of tensor calculus. Ricci published the seminal work in 1900 along with his former student Tullio Levi-Civita. The importance of tensor calculus, and Ricci’s contribution, were not generally recognised until after Einstein used them in the formulation of General Relativity. Levi-Civita immediately noticed mistakes in Einstein’s maths (oops!) and started a two year correspondence with him on the subject. Einstein developed a considerable respect for the Italian and wrote to him:

“I admire the elegance of your method of computation; it must be nice to ride through these fields upon the horse of true mathematics while the like of us have to make our way laboriously on foot.”

Classic! Later, Einstein said what he liked best about Italy was “spaghetti, and Levi-Civita”. As a sad footnote, Levi-Civita, a fellow Jew, was expelled from his professorship and all scientific societies under Mussolini’s race laws, and died during the second world war in Rome.

Lynnette In Minnesota يقول...

[PeteS] Zeyad - what'd you do to your blog page ... it loads about 20 times faster!

Really? Everything seems to be slow today(Sunday). But then maybe it's just this computer. We'll see. I may have to do a restart. Sometimes that clears it up.

Lynnette In Minnesota يقول...

[Lee] Obama folded, more or less. They believe that he'll fold again. They think the threat of an economic slowdown will bend him to their will.

Except the problem with that is that I think the Republicans actually have more to lose in this round.

The main sticking point for the Republicans appears to be raising taxes on those making more than $250,000. The problem with that is that it runs counter to what the majority of Americans want, at least according to polls. After the crash you could see that coming a mile away. Strike one. Cutting spending means cutting into programs, such as Social Security, that were set up to help many senior citizens and disabled people make ends meet. Well, retirees are a growing segment of the populaton, so... strike 2. Letting sequestration go forward will mean deep cuts in military spending, always a popular program with Republicans. Not so much strike 3 as shooting themselves in the foot.

No, I think the Republicans have more to lose without a deal in place. Unless, of course, they aspire to become the reigning minority party.

Lynnette In Minnesota يقول...

PeteS,

Interesting article on the ecology of Phoenix and Minneapolis. After this summer I think Minnesota is headed in the direction of Arizona in regards to moisture content of the soil. The concept of "zeriscaping" that they are using in AZ sounds promising. I have always assumed that a city is more damaging to an environment than the natural land, but in this case it sounds like it's the reverse. A good thing, as so many people will be living in cities in the future, as the article pointed out.

Where I'm at I don't think we would get the same heat effect as a city like Minneaplis, because we don't have the tall concrete buildings. So I think if I were to put my yard into natural plants it would be those native to Minnesota that would hold up the best. Unfortunately that can look rather scruffy if not done right. You then run the risk of annoying the neighbors.

Lynnette In Minnesota يقول...

Lynnette, apparently the American idea of engine downsizing is going from a V8 to a V6 :-)

lol! Well, there was a reason we fell in love with the bigger engines. They were usually more powerful and quieter. It's hard to picture pulling a boat or trailer with a little 4 cylinder. And I have to admit that driving a car that sounds a bit like a washing machine isn't really enjoyable.

Lynnette In Minnesota يقول...

PeteS,

That's some very beautiful scenery you have there. It really would be a shame to spoil it with an oil drilling platform. :(

Lynnette In Minnesota يقول...

Who would have thought there would be that much money in sand?

Sand creates wealth, fricton

   Lee C.  ―   U.S.A.     يقول...

 
      "I think the Republicans actually have more to lose
      in this round.
"

But, they don't seem to believe that.  At least their Congressional leadership doesn't, McConnell, Boehner, those guys.  Romney had himself convinced that he was going to win right up until the vote totals started coming in.

Petes يقول...

That's some very beautiful scenery you have there. It really would be a shame to spoil it with an oil drilling platform. :(

Hmmm. Had they swung the camera around ninety degrees from east to north, it would have been pointing into the heart of Dublin city. And the low rise skyline would have been dominated by two tall chimneys of a defunct oil burning power station. It's such a familiar part of the coastline that some people want to preserve them. I suppose beauty is in the eye of the beholder, and personally I don't think oil platforms are ugly.

More to the point, I think there was a schizophrenic motivation for the protest. Did they want to preserve the scenic amenity of the bay, or were they complaining (as the placards suggested) about the low royalty rates from Irish drilling concessions? If they just want a better deal they should come out and say so. Because the guy holding the megaphone in the final scene is a champagne socialist politician who wants to impose a 5% per annum wealth tax on me (not an income tax -- I no longer have any income). I'm inclined to say -- drill baby, drill :-)

"Who would have thought there would be that much money in sand?"

The area around me is all glacial sand, and full of sand quarries, so I'm familiar with the concept of dirt being money :)

Various interesting things in that article about the geology of the midwest. Also the demographics -- I didn't realise Minnesota and Wisconis were Amish country ... I didn't think they went any further north west than the Ohio valley.

Marcus يقول...

Winter came rapidly and without warning this year in Sweden. Friday we had the same weather as we've had the last two months: grey skies, light rain and 10 degrees warm (50 F), today it's clear skies, a decimeter of snow on the ground and -10 degrees (14 F).

It's a bit on the chilly side but I like it. My ideal winter would be that it would remain cold but not too cold, say -5 degrees, with sunny days and just a little bit of snow now and then to replace the kids' snowball supply. Then in March it could all thaw away at once and the temperature increase by 20 degrees fast.

Petes يقول...

It's odd Marcus, because last week we had mostly clear skies and freezing nights, and only on Saturday did the daytime temperature pick up to 10 degrees and it started raining.

Except, it's not that odd at all. We're in one of those periods when Atlantic conditions are trying to assert themselves. We've had freezing air coming straight down from the Arctic, which has presumably now moved a fraction eastward, over you. Atlantic lows are pushing in over us, for more normal (i.e. cool, wet, and windy) winter weather. The interface between the two regimes can be the worst ... moist Atlantic air and cold Arctic air give snow at the boundaries and even some thunderstorms.

We had a "normal" winter last year after the previous two from hell. But literally fifty miles east of us in Wales, and even in the Irish sea, there was regular heavy snow. Britain was having freezing air coming west from the continent (and ultimately Siberia) while the Atlantic influence managed to just about keep it at bay to our east. Whereas the previous two winters, just a little extra kink in the jetstream to our west, keeping the Atlantic depressions a little further south, plunged us into unprecedented cold conditions. The weather seems to be balanced on a knife edge at these times.

   Lee C.  ―   U.S.A.     يقول...

 
Computer climate models suggest that we should expect the northern jet stream to become ‘variable’ in the winter across the Atlantic as the Greenland ice sheets retreat.

Lynnette In Minnesota يقول...

[Lynnette] I think the Republicans actually have more to lose in this round.

[Lee] But, they don't seem to believe that.

Then they are listening to the wrong analysts. I did read a column over the weekend that floated the idea that Obama has more to lose because he is concerned with his "legacy". Apparantly the author never considered the fact that the other members of government also have a legacy to leave. Do the Republicans really want this continual gridlock to the point of risking the US economy and our future economic health to be theirs?

   Lee C.  ―   U.S.A.     يقول...

 
      "Do the Republicans really want this continual
      gridlock to the point of risking the US economy and
      our future economic health to be their
[legacy]?

You're talkin’ ‘bout people who believe that Obama is a Kenyan-born, Muslim Socialist, who believe that global warming is a hoax perpetrated (and somehow kept secret)  by an immense world-wide cabal which includes the National Academy of Sciences, who believe in 'creation science’, who believe that hords of new customers are eagerly waiting to rush to do business with business which receive tax cuts, who believed that the vast majority of public polls were wrong, and the very few which had Romney winning the election were right.  And those are only some of the things they believe.  These people are self-delusional.
Obama folded last time; they've convinced themselves that he'll fold again this time.  They believe it because they want to believe it.

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