Arkansas City will not be the focus now, but we can still talk about the town. For now the blog is a blog in search of an identity. Considering what the new niche will be.
I first heard about this on TPM about 2 weeks ago. The Target CEO says his company dropping 150 grand on a Republican's campaign is free speech but that boycotts of Target are "sad."
A new stimulus program really got me riled up. Not because it's unlikely to work and will cost billions -- although both are true -- but because it's desperately clinging to the same bubble mentality that's cost this economy so dearly: the idea that homeownership is a universal birthright.
I'm talking about the Obama administration's recent plan to grant $3 billion to unemployed homeowners in 17 states and the District of Columbia, partly through $50,000 interest-free, non-recourse loans that can be used to cover mortgage payments, insurance, and taxes.
In essence, this is a generous extension of unemployment benefits. In itself, that's fine. But the plan targets unemployed homeowners, while explicitly and outrageously leaving out the 33% of the country that chooses to rent.
The message from Washington could not be any clearer: If you have a mortgage on the roof over your head, your well-being is backed by the nation's full faith and credit. If you have a lease on the roof over your head, well, best of luck to you.
Renters have feelings, too! This reminds me of a Wall Street Journal article responding to Rep. Barney Frank's analogy that homeowners facing foreclosure before the passage of a bailout bill were akin to soldiers being killed before hearing news of a cease-fire. "Readers who don't equate moving into a rental with death in combat should direct their comments to Mr. Frank's office," the Journal said.
Without a doubt, losing your home in foreclosure is emotionally devastating. But doesn't the same hold true for renters who face eviction? So much has been reported about the foreclosure crisis that few noticed the nationwide eviction rate soared 127% in 2009. Don't these struggling renters deserve equal treatment among their homeowning neighbors?
We have to acknowledge that the government has already extended unemployment benefits to 99 weeks and spent untold billions on foreclosure mitigation programs, three years after the financial crisis struck. If someone can't keep up with their monthly mortgage, that's tragic. But maybe it's time to accept that many of these homeowners never should have gotten into such arrangements in the first place.
Ironically, legions of unemployed homeowners may be jobless in part because they're homeowners. The inability to sell your house, usually because it's underwater, chokes off mobility, which is an absolute necessity when looking for a new job. This is especially true in a recession, when job opportunities are fragmented region by region. If your home prevents you from moving to where the jobs are, you'd be better off without it.
This partly explains why a wide body of research shows that high homeownership rates are counterproductive to economic growth. As University of Toronto professor Richard Florida finds: "The most innovative, most productive, and most highly skilled regions have rates of homeownership of 55-to-60 percent, while those where homeownership exceeds 75 or 80 percent are economically distressed."
The stigma against renting is incredibly overrated. Yet programs like the Obama administration's fight tooth and nail to uphold the idea that homeownership is a treasure that should never be forfeited. It's so backward it hurts.
Check back every Tuesday and Friday for Morgan Housel's columns on finance and economics.
The Fed's most vocal hawk questioned the now-popular notion that the U.S. economy faces a deflationary bust.
Thomas Hoenig, the president of the Federal Reserve Bank of Kansas City, renewed his call for the Fed to end its promises to hold down interest rates.
He said in a speech Friday that the Fed's promise to keep its short-term interest rate target near zero isn't aiding the economic recovery, which he contends is stronger than commonly believed.
This trend isn't Hoenig's friend "In fact, we are experiencing a better pace of recovery this time than at this point in our previous two economic recoveries," Hoenig said. "The current recovery in its first year saw GDP grow an average of 3.2%. The GDP growth rate for the 1991 recovery was 2.61%; and for the 2001 recovery, it was 1.92%."
What's more, Hoenig said, the promise to keep short-term interest rates near zero risks "inadvertently adding to 'uncertainty'" that tends to reduce consumption and business investment.
It also puts the Fed on the path to repeating the errors it made in the last recovery, when then Chairman Alan Greenspan kept the fed funds rate at 1% even as the economy expanded at high single-digit rates, he said.
The remarks come as policymakers grapple with persistently high unemployment and popular frustration that the economic rebound hasn't been stronger.
"There may be ways to accelerate GDP growth, but in my view, highly expansionary monetary policy is not a good option," Hoenig said. "Remember, high interest rates did not cause the financial crisis or the recession."
The comments come days after the Fed, expressing growing concern about the economic outlook, unveiled a plan to buy more Treasury bonds with the proceeds of maturing mortgage bonds. The Fed did so to make sure that the money supply wouldn't start contracting at a time when cash-strapped states are cutting spending to close their budget gaps.
That plan, together with Fed chief Ben Bernanke's remark last month that the economic outlook is "unusually uncertain," pushed investors out of riskier assets like stocks and into the safety of U.S. government bonds. The yield on the 10-year Treasury note has dropped as low as 2.7%, from 4% just four months ago.
The plunge has amplified worries that the economy is stumbling into a period of deflation, marked by a falling price level that increases consumers' debt burden.
But Hoenig noted that news reports were full of similar claims in the early stages of the last recovery, and said a look at the consumer price index over time should allay fears about price declines.
The consumer price index was a mere 18 in 1945 but was 172 at the start of this century. Today, despite our most recent crisis, the CPI is over 219. Not once during more than half a century has the index systematically declined. I find no evidence that deflation is the most serious threat to the recovery today.
Hoenig stressed that he isn't calling for an interest-rate rise now. Instead, he recommends that the Fed drop its promise to keep rates low for an extended period and then begin raising rates as the recovery picks up steam.
Hoenig, who is one of the 10 voting members of the Federal Open Market Committee this year, has been making that case for some time, to no apparent avail.
Hoenig also warned that policymakers, while recognizing the risks of surprising market players and leading to unrest, should be wary of giving traders a free pass, as he contends the Fed is doing now.
"I wish free money was really free and that there was a painless way to move from severe recession and high leverage to robust and sustainable economic growth," he said, "but there is no short cut."
11:16 and 6:50 Do you have any thoughts on those articles? Pro/con and why?? Also, you obviously don't know this, but to copy a link, highlight the web address(usually in the browser), hit CTRL+C, then, instead of copying an entire article, which nobody reads, just paste the website! Easy peasy.
I don't think its the Federal Governments place to decide who gets bailed out and who FAILS! Especially using borrowed or someone elses money!
Do I feel that No One should be helped?
Not at all - but the best medicine of all is to help people help themselves! Not all people are capable of the same things at the same time all the time!
One of my biggest complaints about the housing bubble? Was that they took a form of long term investing that was traditionally used as a means of creating wealth (often over the course of a whole lifetime) and made it a FARCE!
I already know about posting the web address, but like with the article from CNN in a previous post - sometimes you get a redirect and sometimes you get a little ad on like a virus! (Especially on the real controversial articles on the MSM websites!) Better keep that antivirus up to date!
I think I'm going shopping at Target ASAP!
ReplyDeletehttp://www.snopes.com/politics/immigration/mexicoangry.asp
ReplyDeleteHooray for Target!
ReplyDeleteI first heard about this on TPM about 2 weeks ago. The Target CEO says his company dropping 150 grand on a Republican's campaign is free speech but that boycotts of Target are "sad."
ReplyDeletehttp://tpmdc.talkingpointsmemo.com/2010/07/target-faces-backlash-for-supporting-tom-emmer-in-post-citizens-united-world.php
What's pathetic is this is how GOPs actually think.
12:59 What's your point?
ReplyDeleteI think as long as the Silent Majority chooses to be "Silent" then they deserve what ever the minority does to weaken Society!
ReplyDeleteOK, then check this out.
ReplyDeleteThe Home Depot fires patriotic Christian, approves homosexuals
Employee wearing patriotic button is fired. Employees wearing pro-homosexual buttons praised.
http://action.afa.net/email/online.aspx?cid=1002&mid=14064898&tid=aa&utm_source=smAFA&utm_medium=email&utm_campaign=1002
Guess where I WON"T be buying my Lumber supplies? You guessed it. H.D.
ReplyDeleteI was planning a trip to Wal Mart for back to school, but now Target will get my business.
ReplyDeleteFrom Motley Fool Article Today:
ReplyDeleteA new stimulus program really got me riled up. Not because it's unlikely to work and will cost billions -- although both are true -- but because it's desperately clinging to the same bubble mentality that's cost this economy so dearly: the idea that homeownership is a universal birthright.
I'm talking about the Obama administration's recent plan to grant $3 billion to unemployed homeowners in 17 states and the District of Columbia, partly through $50,000 interest-free, non-recourse loans that can be used to cover mortgage payments, insurance, and taxes.
In essence, this is a generous extension of unemployment benefits. In itself, that's fine. But the plan targets unemployed homeowners, while explicitly and outrageously leaving out the 33% of the country that chooses to rent.
The message from Washington could not be any clearer: If you have a mortgage on the roof over your head, your well-being is backed by the nation's full faith and credit. If you have a lease on the roof over your head, well, best of luck to you.
Renters have feelings, too!
This reminds me of a Wall Street Journal article responding to Rep. Barney Frank's analogy that homeowners facing foreclosure before the passage of a bailout bill were akin to soldiers being killed before hearing news of a cease-fire. "Readers who don't equate moving into a rental with death in combat should direct their comments to Mr. Frank's office," the Journal said.
Without a doubt, losing your home in foreclosure is emotionally devastating. But doesn't the same hold true for renters who face eviction? So much has been reported about the foreclosure crisis that few noticed the nationwide eviction rate soared 127% in 2009. Don't these struggling renters deserve equal treatment among their homeowning neighbors?
We have to acknowledge that the government has already extended unemployment benefits to 99 weeks and spent untold billions on foreclosure mitigation programs, three years after the financial crisis struck. If someone can't keep up with their monthly mortgage, that's tragic. But maybe it's time to accept that many of these homeowners never should have gotten into such arrangements in the first place.
Ironically, legions of unemployed homeowners may be jobless in part because they're homeowners. The inability to sell your house, usually because it's underwater, chokes off mobility, which is an absolute necessity when looking for a new job. This is especially true in a recession, when job opportunities are fragmented region by region. If your home prevents you from moving to where the jobs are, you'd be better off without it.
This partly explains why a wide body of research shows that high homeownership rates are counterproductive to economic growth. As University of Toronto professor Richard Florida finds: "The most innovative, most productive, and most highly skilled regions have rates of homeownership of 55-to-60 percent, while those where homeownership exceeds 75 or 80 percent are economically distressed."
The stigma against renting is incredibly overrated. Yet programs like the Obama administration's fight tooth and nail to uphold the idea that homeownership is a treasure that should never be forfeited. It's so backward it hurts.
Check back every Tuesday and Friday for Morgan Housel's columns on finance and economics.
From CNN/Money Fortune
ReplyDeleteColin Barr
The Fed's most vocal hawk questioned the now-popular notion that the U.S. economy faces a deflationary bust.
Thomas Hoenig, the president of the Federal Reserve Bank of Kansas City, renewed his call for the Fed to end its promises to hold down interest rates.
He said in a speech Friday that the Fed's promise to keep its short-term interest rate target near zero isn't aiding the economic recovery, which he contends is stronger than commonly believed.
This trend isn't Hoenig's friend
"In fact, we are experiencing a better pace of recovery this time than at this point in our previous two economic recoveries," Hoenig said. "The current recovery in its first year saw GDP grow an average of 3.2%. The GDP growth rate for the 1991 recovery was 2.61%; and for the 2001 recovery, it was 1.92%."
What's more, Hoenig said, the promise to keep short-term interest rates near zero risks "inadvertently adding to 'uncertainty'" that tends to reduce consumption and business investment.
It also puts the Fed on the path to repeating the errors it made in the last recovery, when then Chairman Alan Greenspan kept the fed funds rate at 1% even as the economy expanded at high single-digit rates, he said.
The remarks come as policymakers grapple with persistently high unemployment and popular frustration that the economic rebound hasn't been stronger.
"There may be ways to accelerate GDP growth, but in my view, highly expansionary monetary policy is not a good option," Hoenig said. "Remember, high interest rates did not cause the financial crisis or the recession."
The comments come days after the Fed, expressing growing concern about the economic outlook, unveiled a plan to buy more Treasury bonds with the proceeds of maturing mortgage bonds. The Fed did so to make sure that the money supply wouldn't start contracting at a time when cash-strapped states are cutting spending to close their budget gaps.
That plan, together with Fed chief Ben Bernanke's remark last month that the economic outlook is "unusually uncertain," pushed investors out of riskier assets like stocks and into the safety of U.S. government bonds. The yield on the 10-year Treasury note has dropped as low as 2.7%, from 4% just four months ago.
The plunge has amplified worries that the economy is stumbling into a period of deflation, marked by a falling price level that increases consumers' debt burden.
But Hoenig noted that news reports were full of similar claims in the early stages of the last recovery, and said a look at the consumer price index over time should allay fears about price declines.
The consumer price index was a mere 18 in 1945 but was 172 at the start of this century. Today, despite our most recent crisis, the CPI is over 219. Not once during more than half a century has the index systematically declined. I find no evidence that deflation is the most serious threat to the recovery today.
Hoenig stressed that he isn't calling for an interest-rate rise now. Instead, he recommends that the Fed drop its promise to keep rates low for an extended period and then begin raising rates as the recovery picks up steam.
Hoenig, who is one of the 10 voting members of the Federal Open Market Committee this year, has been making that case for some time, to no apparent avail.
Hoenig also warned that policymakers, while recognizing the risks of surprising market players and leading to unrest, should be wary of giving traders a free pass, as he contends the Fed is doing now.
"I wish free money was really free and that there was a painless way to move from severe recession and high leverage to robust and sustainable economic growth," he said, "but there is no short cut."
11:16 and 6:50
ReplyDeleteDo you have any thoughts on those articles? Pro/con and why??
Also, you obviously don't know this, but to copy a link, highlight the web address(usually in the browser), hit CTRL+C, then, instead of copying an entire article, which nobody reads, just paste the website! Easy peasy.
My thoughts?
ReplyDeleteI don't think its the Federal Governments place to decide who gets bailed out and who FAILS! Especially using borrowed or someone elses money!
Do I feel that No One should be helped?
Not at all - but the best medicine of all is to help people help themselves! Not all people are capable of the same things at the same time all the time!
One of my biggest complaints about the housing bubble? Was that they took a form of long term investing that was traditionally used as a means of creating wealth (often over the course of a whole lifetime) and made it a FARCE!
I already know about posting the web address,
but like with the article from CNN in a previous post - sometimes you get a redirect and sometimes you get a little ad on like a virus! (Especially on the real controversial
articles on the MSM websites!)
Better keep that antivirus up to date!
AND
Its safer to copy the main parts/points!