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mithridates
Joined: 03 Mar 2003
Location: President's office, Korean Space Agency
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 Posted: Tue Feb 17, 2009 8:51 am Post subject: |
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| asylum seeker wrote: |
| mithridates wrote: |
| Looks like there's $8 billion there for high-speed rail. Where do you (Americans) think this should be spent? KTX was supposed to cost $5 billion, ended up at around $15 billion I think, and China's proposed route from Beijing to Shanghai (over 1000 km I believe) is projected at $30 billion or so. Think $8 billion (plus an extra $1 billion a year apparently) could do something like Chicago - Detroit plus, oh let's say...Baltimore and Philadelphia? I have no idea which places need high-speed rail the most though so I want to hear from those who know. |
It does seem a ridiculously small amount for a country the size of the US. |
That's what I was thinking. I have no idea where to begin. With China it's obvious - Beijing and Shanghai. Korea too - Seoul to Busan. Japan is Tokyo and Osaka. Canada would be Montreal down into Toronto and a bit south of that. But the US, I have no idea. |
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Hater Depot
Joined: 29 Mar 2005
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mises
Joined: 05 Nov 2007
Location: retired
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Tue Feb 17, 2009 10:14 am Post subject: |
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Obama doesn't know what he is doing.
http://www.khon2.com/home/ticker/39696427.html
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Even before President Barack Obama signs the $787 billion economic stimulus bill into law Tuesday in Denver, congressional democrats are already focused on how to stabilize the battered housing market.
Obama is scheduled to announce details of the housing plan in Arizona on Wednesday. Rep. Neil Abercrombie, a Hawaii democrat, says the legislation will focus on keeping people with troubled mortgages in their homes.
�We're going to see what we can do to enable people to be able to bridge the mortgage gap that they have to handle right now because of unemployment, because of under employment (or) because of rate changes that they hadn't anticipated.�
Abercrombie says the housing plan is �phase 2� of President Obama�s plan to right the sinking American economy.
�I think we're going to have to do some adjustment in mortgage rates,� said the congressman. �I think it's always better to do that and keep people in their homes then to simply let the whole housing situation collapse.�
The president hinted last week that in order to stabilize the high rate of foreclosures in some parts of the country, bankruptcy judges would be allowed to renegotiate the terms of troubled mortgages.
There�s also discussion of reducing the debt-to-income ratio that homeowners pay toward their loans. One idea floated by FDIC Chair Sheila Bair is to lower mortgage premiums to between 31 and 38 percent of a household�s gross income.
Another proposal calls for raising the maximum amount on government backed mortgages in areas of the country where home prices have fallen, but remain high. Typically, such government loans cannot exceed 115% of median home prices in a certain area.
�It's a realistic assessment of what prices are actually at here,� said Abercrombie, when asked what the proposal would mean to Hawaii. �That will enable people to get mortgage loans at a reasonable interest rate.�
Abercrombie says Congress may have to go beyond the $50 to $100 billion currently being discussed as part of the housing plan.
However republicans still reeling from what they say was too much wasteful spending and too little tax relief in the economic stimulus bill, are wary of any more government meddling in the free market system.
"Every time the government interferes with the market you're going to have a problem not a solution,� said Willes Lee, chairman of the Hawaii Republican Party.
�What we'll see potentially is people just taking a couple more months before they fail on their mortgages or companies that shouldn't have let (out) the loans in the first place getting the benefit of this so called bailout.� |
To stabilize the housing market, you have to keep prices unaffordable. Is this really a policy of a left-leaning government?
The ibanks are dead. Hedge funds are dead. CDO's etc are dead. The housing market as a means of economic growth is dead. Detroit is dead. Obama is trying to keep the 90's party going by spending money that apparently will be created in the future. This is absurd.
We know how to "stabilize" the housing market. People and banks go broke and the homes decline in value. Presto! Stable housing market. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Tue Feb 17, 2009 10:22 am Post subject: |
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This stimulus is coming at a stupid time. Last night there were some very severe movements in currency markets and 'talk' is that Eastern Europe is set to implode. That will take down Sweden, Switzerland and others with it. Korea is in serious trouble, and Woori might fail. Japan contracted at 12.7%/yr last quarter.
We are heading off a cliff. A "Stimulus" is so damn naive. This isn't a consumer spending problem. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Tue Feb 17, 2009 10:34 am Post subject: |
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This is likely to become much worse than the 1930s. We are in danger of slipping into a high tech, economic dark age thanks to the fascist-socialist Ponzi economists.
So, what can we do NOW to prepare?
The survivalists are ready, maybe. The rest of us ... |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Tue Feb 17, 2009 11:13 am Post subject: |
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The post below is about the so-called "stress testing" (usually called auditing, but not called that now, because the banks were audited by PwC et al, and to expose that they weren't audited would also expose the extent of financial fraud, but anyways) taking place at the big banks:
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http://www.nakedcapitalism.com/2009/02/william-black-there-are-no-real-stress.html
By way of background, William Black is a former senior bank regulator, best known for his thwarted but later vindicated efforts to prosecute S&L crisis fraudster Charles Keating. He is currently an Associate Professor of Economics and Law at the University of Missouri - Kansas City.
More germane for the purpose of this post, Black held a variety of senior regulatory positions during the S&L crisis.He managed investigations with teams of examiners reporting to him, redesigned how exams were conducted, and trained examiners.
Via e-mail, he has confirmed our suspicions about the bank stress tests announced by Treasury Secretary Timothy Geithner: they simply cannot be adequate, given the number and experience of the staff, and perhaps as important, their relationship with the banks (see detailed comments below).
I also asked him about the fact that bank examiners examine banks (duh) and would not have much (any?) experience in the capital markets operations or sophisticated products that the big investment bank, now banks, participated in. Goldman and Morgan Stanley ought to be subject to these exams; Citi, JP Morgan, and Bank of America have large capital markets operations. These firms are where the biggest risks and exposures lie. Do the examiners what to look for in a even the low-risk operations, like repo desks, much the less derivatives and proprietary trading books? He agreed (as presented below) that it was a near certainty that this was beyond their skill level.
Now this begs the question: why has the Treasury Secretary set in motion an obviously bogus process? It suggests the result is pre-ordained.
One possibility is that even a very quick and dirty look at many of the big banks' books will reveal them to be in very bad shape. In fact, the inadequate staffing could be part of the private conversation: "You know we didn't send in enough bodies to do this right, and even using your numbers, which we can assume in some cases will be flattering, you look like a goner."
But all of Geithner's actions to date are inconsistent with him taking a tough stand. Having a lot of people party to a process that finds that some of the big banks are in trouble would be hard to keep secret (to my knowledge, none of these people have high level security clearances. Government employees and contractors in those cohorts do keep their mouths shut). So I think it is more likely that the banks will get scorecards that show them to be in various stages of peril, but none will be found to be terminal. (They can't be given a clean bill of health, that would call the whole rationale of the TARP and its various injections into question, and also would put Geithner at considerable risk if any bank declared OK fell over in less than 12 months).
But even the designation of "sick but not ready to be hospitalized" carries with it risk to the Administration. If the banks get sicker than anticipated, how can they explain it? They can't say, "oh, things got worse than we contemplated". The whole point of a stress test is to anticipate worst case scenarios. And it is pretty certain a fair number of the big banks will be on such large-scale life support by year end that it will be hard to make a case not to put them in receivership.
Whatever statement Geithner puts out about the results of the stress test is likely to come back to haunt him, as did Colin Powell's "there are WMD in Iraq" speech before the UN did. And Powell had a better reputation going into Iraq than Geithner has in prosecuting his war.
From William Black:
There are no real stress tests going on.
1) If you did a real stress test, as Geithner explained them, you wouldn't just have a $2 trillion hole -- you'd impose regulatory capital requirements of 50%. (FYI, the regulators have the power to set HIGHER individual capital requirements based on unusually large risks at a particular bank.)
Yves here. By implication, the results of anything approaching a true stress test, plus reasonable regulatory responses, would dictate radical action. We have not seen any corresponding groundwork laid for that sort of thing. Back to Black:
2) You can't conduct a meaningful stress test without reviewing (sampling) the underlying loan files and it seems likely that the purchasers of securitized instruments (not just mortgages) do not even have the loan file data. Moreover, loss ratios vary enormously depending on the issuer, so even a bank that originates (or has purchased a bank that originates) similar product cannot simply take its own loss rate and extrapolate it to the measure the risk on the value of securitized credit instruments.
3) The regulators are overwhelmed because of personnel cuts (particularly heavy among their best, most experienced examiners that had worked banks that had engaged in sophisticated frauds. Buyouts were common, because more experienced examiners appear more expensive. This isn't true when you consider effecitiveness and productivity, but management didn't care about that. Treat what I write after the colon as hearing from me at my most serious and thoughtful: it is vastly more difficult to examine a bank that is engaged in accounting control fraud. You can't rely on the bank's books and records. It doesn't simply take more, far more, FTEs -- it takes examiners with experience, care, courage, and investigative instincts and abilities. Very few folks earning $60K are willing to get in the face of the CEO and CFO making $25 million annually and tell them that they are running a fraudulent bank and they are liars. FYI, this is one of the reasons why having "resident examiners" never works. The examiners don't even get to marry the natives. They get to worship God's annoited. Effective examination is good for you, but it is very unpleasant, ala a doctor's finger up your rectum. It requires total independence.
So, the examination force doesn't have remotely the numbers or the relevant experience and mindset to examine the largest banks with the greatest problems.
Yves here. Black is not using the fraud word lightly. He believe that we have Enron-level accounting fraud happening, now, in the financial services industry. And we have asked repeatedly, why has there been no investigation of fraud at Lehman? There was a $100 billion plus hole in its balance sheet, meaning a substantial negative net worth, when its financial statements presented a completely different picture. Back to Black:
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Is this failure to act fear? Fraud? A bought and paid for government? Incompetence? Bad advice? |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Tue Feb 17, 2009 1:15 pm Post subject: |
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| I have no idea which places need high-speed rail the most though so I want to hear from those who know. |
I'd heard someone mention a high speed train between LA and Las Vegas, but Hater Depot says it's a myth. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Wed Feb 18, 2009 7:42 am Post subject: |
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From Financial Sense Newshour:
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| This bill is detrimental to the economy long-term. Even the Congressional Budget Office, in its latest analysis, has said that. And what it does is it�s diverting dollars away from people that produce to non-productive areas in the economy. And whenever you do that, the fundamental difference of what we�re doing is, we�re taking from one group, and doling it out to another, in investing in something that sparks actual wealth production. We�re not doing that. Paying someone to build a school, a bridge, a government project, does not tend to add substantially to the productive output of an economy that follows it as much as investment in capital, new factories, capital improvement, that can improve the productive capacity of a nation. So you have to think of this stimulus bill, whether the spending proposals are really planting seeds for increased productivity, or wealth consumption through re-distribution. The former makes the country weak, while the latter is simply a long-term drain. And that is where I think we�re going with this bill. In terms of does it actually create something� I really don�t think so� It is so strewn and filled with pork, and special projects. It�s a great idea to have a dog park. But, you know, is that really sustaining, does that add to the productive capacity or wealth of the country? I really don�t think so. |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Wed Feb 18, 2009 2:49 pm Post subject: |
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"And now the question is, where will the expansion be? Matthew Yglesias reports on possible new high speed rail expansion:
In a last-minute change, the total quantity of funds available was increased. But there's no special plan for Las Vegas. The money will be spread all across the country."
Map of proposed routes here: http://www.huffingtonpost.com/2009/02/18/map-of-potential-high-spe_n_167804.html |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Wed Feb 18, 2009 3:07 pm Post subject: |
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| So you have to think of this stimulus bill, whether the spending proposals are really planting seeds for increased productivity, or wealth consumption through re-distribution. |
The writer is missing one whole major aspect of the bill, maybe the most important part of all.
Howard Fineman reported that 27 minutes after Obama signed the bill there was a video clip put out of workers in Missouri starting work on repairing a bridge over the Osage River. As Fineman said, it was purely symbolic and was probably arranged by Rahm Emanuel. We need the media to disseminate hoards of reports like these....a modern version of those old Soviet 'worker of the month' awards, pictures of Russian women driving tractors and building dams.
A significant part of governing is symbolic. It's role is to both inspire and reassure people that things are getting done and that someone is in charge. Not everything is about efficiency. I'm reminded of the thousands of ajummas who pull weeds and grass along the highways here. It would be faster and more efficient to buy a few lawn mowers to do the work--but then what do those ajummas do for a living? There aren't enough jobs elsewhere for them or they would already be doing them. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Wed Feb 18, 2009 9:04 pm Post subject: |
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| Ya-ta Boy wrote: |
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| So you have to think of this stimulus bill, whether the spending proposals are really planting seeds for increased productivity, or wealth consumption through re-distribution. |
The writer is missing one whole major aspect of the bill, maybe the most important part of all.
Howard Fineman reported that 27 minutes after Obama signed the bill there was a video clip put out of workers in Missouri starting work on repairing a bridge over the Osage River. As Fineman said, it was purely symbolic and was probably arranged by Rahm Emanuel. We need the media to disseminate hoards of reports like these....
a modern version of those old Soviet 'worker of the month' awards, pictures of Russian women driving tractors and building dams.
A significant part of governing is symbolic. It's role is to both inspire and reassure people that things are getting done and that someone is in charge. Not everything is about efficiency. I'm reminded of the thousands of ajummas who pull weeds and grass along the highways here. It would be faster and more efficient to buy a few lawn mowers to do the work--but then what do those ajummas do for a living? There aren't enough jobs elsewhere for them or they would already be doing them. |
Ah, such revealing honesty. From the mouths of the ignorant, naive babes in the woods, waiting to be devoured by the realities of life...
The Soviet Union collapsed. It was the total failure of fascist-socialist economics - a Ponzi economy based on smoke and mirrors that only survived because of totalitatarian controls, the murder of over 50,000,000 innocent people and the use of the controlled media ... "to disseminate hoards of reports like these...."
Brilliant.
Obama sparkling. |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Thu Feb 19, 2009 1:01 am Post subject: |
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I knew you'd like that one. I had visions of you frothing at the mouth when you responded. Did the veins on your forehead stand out?
My point remains: I hope the media goes out of its way to highlight the construction jobs to balance the negative predictions that so many make. There should be interviews with 'formerly unemployed Bob the Bricklayer' being ebullient over his new job. |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Thu Feb 19, 2009 4:09 am Post subject: |
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Traditionally a simple majority was needed to pass a bill in the US Senate. Under certain circumstances, a minority could filibuster (the word seems to come from a Dutch word for freebooter or pirate�a hijacking of a bill by talking it to death). To stop a filibuster presently, the Senate has to vote �cloture� which is 60 votes (3/5�s of 100 senators�it used to be 2/3�s).
The filibuster was used sparingly by a committed minority; even the threat of a filibuster was used sparingly. In the 1991-�92 session, twice as many were used as in the entire 19th Century (Wiki). The most famous depiction was in �Mr. Smith Goes To Washington� (1939( with Jimmy Stewart single-handedly and heroically fighting the corrupt politicians with his filibuster.
In the 80�s and early 90�s there were 20 or 30 cloture votes each session. In the mid 90�s that went up to about 50. In �05-�06 the Democrats forced 54 cloture votes. The outraged Republicans threatened to invoke �the nuclear option� to end the filibuster rule on judicial nominees by having the President of the Senate, Vice President Dick Cheyney declare the filibuster rule did not apply, but were stymied by the Gang of 14. In the next, Congress when the Republicans were in the minority, they forced 112 cloture votes.
All of this background illustrates why Obama wanted/needed 60+ votes on the stimulus bill. One month ago public approval (Gallup Poll) of Congressional Democrats was 18%; now it is 43%. The same poll reports Independents were at 17%; now 29%. And Republicans: 23% in January and 19% in February. Obama�s bipartisanship campaign has paid off: Dems up 25%; GOP down 5%. The Just Say No strategy isn�t working so far for the Congressional Republicans any better than it did for Nancy Reagan.
(Some of that came from Rachel Madow, some from Wiki and some from me.) |
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