Yes, they bought too much house for their current worth and household income.Quote:
Originally Posted by tomder55
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Yes, they bought too much house for their current worth and household income.Quote:
Originally Posted by tomder55
... and were encouraged to do so by government policy.
Andrew Cuomo and Fannie and Freddie - Page 1 - News - New York - Village VoiceQuote:
Perhaps the only domestic issue George Bush and Bill Clinton were in complete agreement about was maximizing home ownership, each trying to lay claim to a record percentage of homeowners, and both describing their efforts as a boon to blacks and Hispanics. HUD, Fannie, and Freddie were their instruments, and, as is now apparent, the more unsavory the means, the greater the growth.
I guess you think your fellow americans are stupid. I guess that explains why advertising is so effective in your country.
right back at you
Canada's coming housing bust - Nov. 12, 2010Quote:
But perhaps the greatest issue looming over Canada's fortunes is its housing market, which has, despite a brief blip, continued to drive higher through the world's economic snow bank due to easy credit, low interest rates and encouraging government tax breaks.
Believers in the Canadian miracle say the country's housing market is not likely to have much of a correction at all, and certainly not the sort of housing swoon seen in the United States or Europe. One reason is that most mortgages were written by one of Canada's six major banks, all of which have existed under tighter regulations than their brethren in the U.S. Another is that sub-prime mortgages were never in vogue. At the height of the American property bubble in 2006, sub-prime mortgages accounted for only 5% of the mortgages taken out in Canada, compared with 25% of those obtained in the United States. Roubini Global Economics says the chance of a "U.S.-style housing bust is unlikely given sound fundamentals of the Canadian financial system and mortgage lending."
But the Canadian housing market is showing signs of strain. Driven by an overhang of supply and by recent government efforts to tighten lending standards, housing starts in October were down 9.2% compared with September, and down more than 12% in urban areas. Also, housing prices have begun to level off after a decade of scaling ever-greater heights. Over the last ten years, housing prices have increased more than 95% nationwide.
Lower housing prices could hit Canadians fairly hard. Housing accounts for more than 20% of Canada's GDP, and its employment gains have been fueled by continued spending in the construction industry, which is one of Canada's largest and fastest growing employment sectors. In October, while the number of workers in Canada's massive service sector declined by 33,000, construction added 21,000 jobs.
There may also be less wiggle-room for Canadian homeowners than many perceive. Canadian banks didn't slice and dice millions of sub-prime mortgages, but they still offered - and continue to offer -- pretty generous terms. Edward Jones wrote in a recent note to clients that the mortgage credit in Canada increased more than 10% a year from 2006 to 2008, more than double the rate of growth from 1997 to 2001. Edward Jones added that "credit is currently more easily available than it was prior to the recent recession."
Canadians easily obtained mortgages with only 5% down and payments running out 35 years. More than 65% of Canadian mortgages are fixed for five years (and now face more stringent renewal terms and likely higher interest payments). But variable rate mortgages offered in Canada were at least as creative as those doled out in the US, with banks allowing terms as short as six months. Unlike in the US, people who default on mortgages in Canada don't just lose their houses, they risk other assets as well.
A fast or unexpected rise in interest rates (Canada was the first G7 country to begin moving them higher following the recession) could leave Canadians with little cushion. Last year the IMF noted that, by some measures, Canadians were paying a larger percentage of their income for housing than Americans did prior to the housing bust.
That level hasn't improved. Recent government data shows that the average Canadian with a two-story home spends almost 50% of his household income on mortgage servicing, with the average is closer to 70% in red-hot markets like Vancouver. "By and large the affordability situation remains within a safe range in Canada; however there are local markets where the share of household income taken up by homeownership costs is at worrisome levels," the Royal Bank of Canada wrote in September, adding that the situation in Vancouver raises "a red flag."
One red flag doesn't make a trend. But it should prick up the ears of investors still hoping for fortune in Klondike country. As the long-time Canada bull James Grant noted in July, "the track of Vancouver housing prices matters far beyond the province of British Columbia," adding that, perhaps, the best place for investors to park their money was in "a country in which a housing bubble has already popped, rather than one -- Canada, for instance -- in which it is just beginning to deflate."
Hello again,
Right winger Michelle Bachman either doesn't know how taxes are levied in this great country of ours, or she's a liar.. I'm going to opt for being a ditz.
When asked on Good Morning America why she supported tax cuts for the wealthy but not extending unemployment benefits, Bachmann said that Americans don't understand who the "wealthiest" are.
“These are people who are carpet layers who maybe employ two or three other guys. Or a plumber maybe himself and his brother and it's $250,000 in gross sales for the business. They're the ones that are looking at massive tax increases,” she said.
She's WRONG, WRONG, WRONG, and even WRONGER than that. Let me explain...
Small businessmen are taxed on the PROFITS of their small business - NOT on the gross sales... Once this mythical plumber deducts the cost of doing business, as ALL small businessmen do on their schedule C, he'll be lucky to have PROFITS of $50,000. So, he's just an ordinary schmoe. His taxes won't be raised if we let the tax cuts for the wealthy expire...
How come a sitting US Congresswoman is SOOOOO ignorant of tax law??
excon
And ignorant of what small businesses make, pay out, and how they balance their books.Quote:
Originally Posted by excon
Can't defend that statement . I do know of business people who puff up their gross sales as if they were some great achievement . The problem is that their margins are garbage... so I ask them if they like working for nothing .
SmartCo Foods announced today they were closing their five Colorado stores today .That means that 500 more people will be joining the ranks of the unemployed .
Imagine how many more businesses like this ,teetering on the brink ,will make the call to shut down if there is a Reid /Pelosi /Obama tax increase at the end of the year .
Hello again, tom:Quote:
Originally Posted by tomder55
It's a painful time for all... Imagine how hard your children and grandchildren will have to work to pay BACK the $700 BILLION we'll have to borrow to plug the hole in the budget, that extending the tax cuts for the wealthiest amongst us will surly do...
On balance, it's better for the country NOT to increase its debt right now. Or it IS. I can't tell WHERE your righty's come down on THAT issue.
excon
Oh it's going to take a lot of pain all right if we continue down this path. All you need to do is look to Europe to see our future if we continue this endless entitlement mentality. What ? The Europeans aren't taxing their people enough ?
I'm saying you cannot tax your way out of this mess. You tax ,you hit the bottom line and your tax revenues stall . I'm still waiting for someone to show me the time when taxing in an economic slowdown fixed the economy .
Hello again, tom:Quote:
Originally Posted by tomder55
It's a Mexican standoff.. You still haven't told me WHY it's GOOD to add $700 BILLION to the deficit during an economic slow down.
excon
Wasn't my idea. It was Bush's TARP and the President's various Keynesian attempts that added the additional debt. I know that solution has never succeeded either.Quote:
You still haven't told me WHY it's GOOD to add $700 BILLION to the deficit during an economic slow down.
But you aren't saying if we don't increase taxes that we'll be adding to the deficit . That is silly . The tax rates have been in place for 8 years... now couching a tax increase in the language of "letting tax cuts expire "doesn't let those off the hook that say they aren't raising taxes. It's silly ;it's like saying... there was no tax cut... it was letting the Clintoon tax increases expire.
Here's a reality check... you cannot possible tax the top 2% enough to do what you want to do even if you confiscated all their money.
Hello again, tom:
So, while we're standing off, I thought I would show how WRONG Michelle Bachman is from another angle...
Let's talk about her mythical plumber who's taxes are going to be affected by the proposed increase... IF, on his schedule C, he winds up with $250,000 of net profit, his business most likely had gross sales of over $2.5 MILLION. This ISN'T a couple of guys sweating it out every day installing carpet... No it's not. It's not even close... He's got LOTS of plumbers on the payroll. He owns LOTS of trucks. He probably owns a BIG building or two. He employs LOTS of people. He's a small business, and a DAMN successful one if he can take home a quarter of a mil every year. His personal car is owned by his business. His wife's car is owned by the business. He could afford an airplane, owned by the business, of course... If he has a boat, that too, could be owned by the business... All of the above stuff is perfectly LEGAL, of course..
And, after ALL those expenses were paid for by his business, he STILL has $250,000 of pocket money every year... That's over $20,000 EVERY MONTH. This is a guy who is a FAR CRY from the poor working schlub that Michelle Bachman is lying about. THIS is a guy, who can afford to have his taxes raised BACK to where they were before George W. Bush. THIS is a wealthy guy.
excon
Or he could be someone who was laid off and is now working as an independent contractor . Yes he does double time and perhaps barely eeks out that $250,000 . But he lives in liberal North East and he pays a fortune in local taxes along with this now bumped up Federal rate that is just short of 40% ;along with his FICA... oh yeah ,and he pays for his families insurance.
He has 2 maybe 3 kids or more . In the North East he may have a mortgage that he is managing to pay on a mothly basis ;but he bought it when the market peaked and he was working for another employer who went belly up. He cannot sell the home because it is underwater for about half the price he purchased it for . But he continues to slog along working those 80 hr weeks .
I submit to you he is not rich and is being unfairly targeted .
Geeze... if your going to have a millionaire's penalty at least target millionaires.
Hello again, tom:Quote:
Originally Posted by tomder55
That's EXACTLY what I'm saying... Only I'm not spinning it... Here's how it is. The tax cuts were temporary. They're going to expire, by law this year. Budgets were made based upon that law - budgets that anticipated $700 BILLION of revenue WHEN the tax cuts expired...
If they DON'T expire, we're going to have $700 billion LESS than we budgeted for. That means we're going to have to BORROW $700 BILLION to cover the expenses that are already in place... If we let them expire, then we don't have to ADD to the deficit.
I'm not going to split hairs about it being a tax increase, or not.
excon
Yea I agree the Dems made a budget based on the fact that they would soak the rich and many other faulty assumptions like $700 billion in asphalt would fix the economy ;or taking ownership of GM would be a money maker. Or that Obamacare would be a bargain .Quote:
. Budgets were made based upon that law - budgets that anticipated $700 BILLION of revenue WHEN the tax cuts expired...
I guarantee the government revenues will be well short of the forecast if they do this because the rich will not be making as much money ,and the unemployed will not be paying any taxes but instead will continue to tap into the unemployment stimulus (Pelosi's words ) .
Hello again, tom:Quote:
Originally Posted by tomder55
You don't have to worry. They'll cave. They won't even argue the great argument I just argued. They'll lay down instead... That's WHY they lost. They ain't got no balls. They suck. In the final analysis, like the Republicans, they're slaves to corporate money too..
excon
PS> I think I mentioned Russ Fiengold making a presidential run under a 3rd party banner. You told me I was all wet... I heard a rumor today that he was going to do exactly THAT.
I didn't say you was all wet. I said I hope you are right. The more primary challenges to the President the better ( I don't think he'd do an independent run but it is possible he could represent a fringe left that amazingly thinks the President isn't "progressive " enough)
I think it's more likely he makes a run for Herb Kohl's Senate seat.
Interesting that the $700 billion number you keep bringing up is almost identical to the amt of currency the Fed is planning on adding to the market with it's crazy QE2 .
Back in 2008 the Fed lent zombies a Trillion and they purchased Treasuries at 3% and then sold them back to the Fed...
Now the die is cast for a repeat performance. Zombies kept alive by Voodoo monetary policy.
Building the house of cards into a highrise... and the taxpayer is told that if they don't open their wallet to Robin Hood some more the house of cards will collapse .
This is a very risky policy that threats not only the US but the rest of the world. We have already been through a period of inflation which is unprecedented. We don't need another to satisfy the averice of the US. Pay the price of your foolishness and leave the rest of us alone.Quote:
Originally Posted by tomder55
Indeed we are putting the world economy at risk. But then again did the EU give a rat's a$$ about the world economy as they forever expanded their entitlement states ? I thought the world wanted the US to follow their lead.
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