OK. I have now done more than an "initial consideration", and the idea sounds even better!
1. As an investor, I would love to buy a house with HPIM and leverage the mortgage/rental income difference that exists in many markets now.
2. This greatly limits profits/losses incurred by the home buyer due to price swings. By removing the speculative "investment" piece from home purchase, HPIM can enable home buyers to get all the advantages of home ownership vs renting while not taking on a large gamble. If combined with technology-induced lowering of buying/selling costs it would enable many people to own vs rent even if they are unsure of their medium-term plans. In a changing economy that is a big plus. Essentially the decision-making process becomes similar to buying vs renting a car, with all the attendant efficiency of the latter.
Thank you Inflation Trader, I had not heard of HPIMs. From reading your views and upon my initial consideration of it, it does sound like a good idea.
Besides getting some buyers off the sidelines, it would make loans with less than 20% downpayment from buyers possible (with equally attractive loan terms) as there is less risk due to index-adjustment. That enables many more buyers as well.
I look forward to more commentary from you on HPIMs. They really do sound like a better idea to me, than any of the programs that the white house has put forward thus far.
File under perhaps the less I know, the better: Starbucks (SBUX -1.1%) draws fire from vegans over how it puts the red into its Strawberry Frappuccinos. In January, the company moved to using crushed up cochineal beetles - instead of artificial flavoring - with a goal of removing unnatural ingredients. Despite the shock value, the bugging-up of food products is common practice and government-approved. [View news story]
Lawsuit city. McDonalds was sued successfully for having animal fat in its fries and hash browns without disclosing.
The SEC approved Egan-Jones as a credit-rating agency in 2007, but sources say regulators had serious concerns about the firm's internal procedures and staffing levels. Egan-Jones sparked a sell-off in November of Jefferies Group's shares after downgrading the company in a report that may have contained inaccuracies. [View news story]
Regardless of how sloppy Egan Jones' procedures were, I find it extremely troubling that retaliation was so blatant and swift after they downgraded US. That must mean the big three are also being muzzled.
The shale gas boom will contribute $118B to GDP by 2015 and low prices will create another 809,000 jobs, says the Natural Gas Alliance, a coalition of 30 drillers. However, points out Gregory Meyer in the FT, that's not all that much when you consider that GDP is $15T and the number of unemployed is 12.7M. [View news story]
This number of jobs and GDP, if true, is a very large contribution from just one commodity in the energy sector. One has to be an extreme pessimist to see this as glass-half-empty.
"High taxes help the richest, too" asserts Cornell economics professor Robert Frank, as the increased public spending would "produce clear gains in satisfaction for the wealthy," such as better-maintained roads. And besides, what difference does it make it if you have a home that's 15,000 square feet or one that's 10,000? [View news story]
"what difference does it make it if you have a home that's 15,000 square feet or one that's 10,000?"
Wow, thats a communist socialist line if I ever heard one. If someone had asked 50 years ago "what difference does it make if you want color or B&W TV? Why do the rich need color?" .. then we'd all still be watching those clunky B&W 10 inch boxes.
But, as you so eloquently put, what difference would it make if we were a society like North Korea?
"High taxes help the richest, too" asserts Cornell economics professor Robert Frank, as the increased public spending would "produce clear gains in satisfaction for the wealthy," such as better-maintained roads. And besides, what difference does it make it if you have a home that's 15,000 square feet or one that's 10,000? [View news story]
Best comment I heard. You should run for Congress!
Has GM really claimed the title of world's largest automaker? It depends on how you count. Volkswagen (VLKAY.PK) argues it was the top-seller last year if sales of affiliates are included, and its figures don't yet include majority-owned truck makers MAN and Scania. Some analysts dispute GM's total, which includes vehicles sold in China by Wuling, a partner in which GM doesn’t have a controlling stake. [View news story]
GM should really refrain from such hubris, considering they would have been about 100% smaller if not for the benefit of US taxpayer largess in 2009.
The WSJreports that the FBI arrested a number of money managers in a major insider trading investigation. A portfolio manager with Diamonback Capital, an employee with SAC Capital Advisors' Sigma Capital unit, and a former hedge fund manager at Level Global are among those in custody or being sought. The FBI is slated to hold a press conference later today to detail the charges. [View news story]
Stop going after the small fry and put Corzine behind bars
Euro 'Crisis' Or Alarmist Dialogue Amongst The Talking Heads And Where Are U.S. Assets Headed? [View article]
I agree with much of the article, except the part where reunification of Germany and potentially Koreas is an economic negative for the more prosperous half. Since when did influx of cheap labor hurt an economy? If the central bank of that country were astute it would recognize this large deflationary force as an opportunity to expand money supply without the threat of inflation and hence boost the standard of living for all its citizens and become more competitive in the global arena.
La Stampa reports the IMF is considering loaning Italy up to €600B to give Mario Monti's new government a 12-18 month window with which to push through fiscal reforms. As this would put a strain on IMF resources, the report suggests assistance from the ECB, i.e. the idea previously floated of the ECB lending to the IMF which in turn lends to needy EU states. [View news story]
Before we get too far in this lightning round, I'd like to point out that TARP wasn't printed money. It was actual tax payer money that was paid back. Separately Fed has 'printed' ~$2Tr in buying up RMBS and Treasuries which it still holds on its books and hence has not recouped..
La Stampa reports the IMF is considering loaning Italy up to €600B to give Mario Monti's new government a 12-18 month window with which to push through fiscal reforms. As this would put a strain on IMF resources, the report suggests assistance from the ECB, i.e. the idea previously floated of the ECB lending to the IMF which in turn lends to needy EU states. [View news story]
Well, if "La Stampa" says so then this must be the ultimate truth.
The problem here is one of messaging. Merkel and other clowns need to announce a plan that is realistic and describes the endgame clearly. The plan should not include unrealistic hopes and assumptions like "assistance from China" and other such unsubstantiated nonsense. Then, no matter how harsh the plan seems, the market will absorb it and move on.
Without such a plan, we are reduced to reading reports from the likes of "La Stampa" and the drip-drip of markets going lower with the constant fear of a "Lehman event" hanging like a sword over our necks.
European Spreads Down, But Not In The Right Way [View article]
Well the obvious thing to do there is not treat bunds as the golden reference any more, and start measuring spreads to US Treasuries instead (don't ask me what makes US the golden reference :-)
Is Geithner in a Position to Make Demands on China? [View article]
Two issues here: First the US needs to actually make more things that world wants and its exports will go up regardless of currency. Too many regulations, environmentalits, taxes, healthcare costs, government ineptitude make it difficult to produce world-class products in America even if the dollar gets cheaper. Germany does not depreciate its currency, has higher wages, and yet is an export powerhouse because the Chinese are running over each other to buy their cars. Why can't US be the best, cheapest, largest car maker in the world when we INVENTED cars? Why can't we substitute large proportions of our gasoline cars with alternatives, meanwhile drill for more oil, and become a net oil EXPORTER in 10 years? Just stopping oil imports will hugely improve our trade balance and create millions of jobs. If we dont want to make sacrifices, take solid action then no amount of currency depreciation will help.
SECOND problem lies with China. Its now the world's second largest economy, and growing at 10% a year. How long does it need the 'protection' of cheap currency to help its growth? Common government sounds ridiculous when it whines about losing jobs due to currency appreciation, while its policies are causing large-scale destruction of livelihoods world over. It is also a lose-lose game where by it destroys other economies which are its customers, and simultaneously subjects its poeple to high inflation and hence terrible living standards. I have talked to many Chinese and been to China many times, and no one believes their official inflation numbers. Real inflation is running well over 10%. They are distorting the balance of world trade and causing depression on one end (West) and inflationary bubbles on the other (East)
Economy In Transition: Be Careful [View article]
1. As an investor, I would love to buy a house with HPIM and leverage the mortgage/rental income difference that exists in many markets now.
2. This greatly limits profits/losses incurred by the home buyer due to price swings. By removing the speculative "investment" piece from home purchase, HPIM can enable home buyers to get all the advantages of home ownership vs renting while not taking on a large gamble. If combined with technology-induced lowering of buying/selling costs it would enable many people to own vs rent even if they are unsure of their medium-term plans. In a changing economy that is a big plus. Essentially the decision-making process becomes similar to buying vs renting a car, with all the attendant efficiency of the latter.
Economy In Transition: Be Careful [View article]
Besides getting some buyers off the sidelines, it would make loans with less than 20% downpayment from buyers possible (with equally attractive loan terms) as there is less risk due to index-adjustment. That enables many more buyers as well.
I look forward to more commentary from you on HPIMs. They really do sound like a better idea to me, than any of the programs that the white house has put forward thus far.
File under perhaps the less I know, the better: Starbucks (SBUX -1.1%) draws fire from vegans over how it puts the red into its Strawberry Frappuccinos. In January, the company moved to using crushed up cochineal beetles - instead of artificial flavoring - with a goal of removing unnatural ingredients. Despite the shock value, the bugging-up of food products is common practice and government-approved. [View news story]
The SEC approved Egan-Jones as a credit-rating agency in 2007, but sources say regulators had serious concerns about the firm's internal procedures and staffing levels. Egan-Jones sparked a sell-off in November of Jefferies Group's shares after downgrading the company in a report that may have contained inaccuracies. [View news story]
The shale gas boom will contribute $118B to GDP by 2015 and low prices will create another 809,000 jobs, says the Natural Gas Alliance, a coalition of 30 drillers. However, points out Gregory Meyer in the FT, that's not all that much when you consider that GDP is $15T and the number of unemployed is 12.7M.
[View news story]
"High taxes help the richest, too" asserts Cornell economics professor Robert Frank, as the increased public spending would "produce clear gains in satisfaction for the wealthy," such as better-maintained roads. And besides, what difference does it make it if you have a home that's 15,000 square feet or one that's 10,000? [View news story]
Wow, thats a communist socialist line if I ever heard one. If someone had asked 50 years ago "what difference does it make if you want color or B&W TV? Why do the rich need color?" .. then we'd all still be watching those clunky B&W 10 inch boxes.
But, as you so eloquently put, what difference would it make if we were a society like North Korea?
"High taxes help the richest, too" asserts Cornell economics professor Robert Frank, as the increased public spending would "produce clear gains in satisfaction for the wealthy," such as better-maintained roads. And besides, what difference does it make it if you have a home that's 15,000 square feet or one that's 10,000? [View news story]
Has GM really claimed the title of world's largest automaker? It depends on how you count. Volkswagen (VLKAY.PK) argues it was the top-seller last year if sales of affiliates are included, and its figures don't yet include majority-owned truck makers MAN and Scania. Some analysts dispute GM's total, which includes vehicles sold in China by Wuling, a partner in which GM doesn’t have a controlling stake. [View news story]
The WSJ reports that the FBI arrested a number of money managers in a major insider trading investigation. A portfolio manager with Diamonback Capital, an employee with SAC Capital Advisors' Sigma Capital unit, and a former hedge fund manager at Level Global are among those in custody or being sought. The FBI is slated to hold a press conference later today to detail the charges. [View news story]
Euro 'Crisis' Or Alarmist Dialogue Amongst The Talking Heads And Where Are U.S. Assets Headed? [View article]
La Stampa reports the IMF is considering loaning Italy up to €600B to give Mario Monti's new government a 12-18 month window with which to push through fiscal reforms. As this would put a strain on IMF resources, the report suggests assistance from the ECB, i.e. the idea previously floated of the ECB lending to the IMF which in turn lends to needy EU states. [View news story]
La Stampa reports the IMF is considering loaning Italy up to €600B to give Mario Monti's new government a 12-18 month window with which to push through fiscal reforms. As this would put a strain on IMF resources, the report suggests assistance from the ECB, i.e. the idea previously floated of the ECB lending to the IMF which in turn lends to needy EU states. [View news story]
The problem here is one of messaging. Merkel and other clowns need to announce a plan that is realistic and describes the endgame clearly. The plan should not include unrealistic hopes and assumptions like "assistance from China" and other such unsubstantiated nonsense. Then, no matter how harsh the plan seems, the market will absorb it and move on.
Without such a plan, we are reduced to reading reports from the likes of "La Stampa" and the drip-drip of markets going lower with the constant fear of a "Lehman event" hanging like a sword over our necks.
European Spreads Down, But Not In The Right Way [View article]
Is Geithner in a Position to Make Demands on China? [View article]
SECOND problem lies with China. Its now the world's second largest economy, and growing at 10% a year. How long does it need the 'protection' of cheap currency to help its growth? Common government sounds ridiculous when it whines about losing jobs due to currency appreciation, while its policies are causing large-scale destruction of livelihoods world over. It is also a lose-lose game where by it destroys other economies which are its customers, and simultaneously subjects its poeple to high inflation and hence terrible living standards. I have talked to many Chinese and been to China many times, and no one believes their official inflation numbers. Real inflation is running well over 10%. They are distorting the balance of world trade and causing depression on one end (West) and inflationary bubbles on the other (East)