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Tuesday, July 31, 2012
Bits Bucket for July 20, 2012
Given how badly the Housing Bubble has turned out for Western nation economies, you’d think policies to pin economic hopes on housing would be soundly renounced.
But so far, all I have seen and heard have amounted to hair of the dog hangover cures.
Monday, Jul 16, 2012 06:58 AM PDT
Unemployed generation threatens Spain
No end’s in sight to Spain’s economic crisis as the government embarks on new austerity measures
By Paul Ames, GlobalPost
This article originally appeared on GlobalPost.
MADRID, Spain — Beatriz Martinez graduated with a degree in art history three years ago. She’s worked only eight months since then, mostly telemarketing.
Twenty-three-year-old Andrea Gonzales, newly qualified in specialized teaching, works stacking shelves in a supermarket.
And Diego, who declined to give his full name, is a freelance photographer. He’s spent most of his time volunteering with a protest group that tries to protect families from eviction since his commissions dried up.
Meet Spain’s lost generation.
More than half of people under 25 here are out of work. That’s Europe’s highest rate, ahead of even Greece, which has come close. Spaniards are worried the strain it’s exerting on society is putting stability at risk as the government prepares to cut unemployment benefits, among other tough measures aimed at meeting the obligations of a eurozone bailout.
The country’s largest labor union, Comisiones Obreras, or CCOO, says 1.73 million people under 30 are unemployed.
However, it says the real situation is worse than the figure shows. Of the 2.4 million under 30 who have jobs, half of them are working on precarious short-term contracts. Another 200,000 are believed to be on unpaid or poorly compensated “internships” the union criticizes for offering no real training. It says many are schemes for unscrupulous businesses to exploit cheap labor.
Hanging out with friends in Madrid’s gritty Lavapies neighborhood, Martinez says “nobody” entertains hopes the situation will soon improve. “I lost my last job a week ago, and more than half of my friends are in the same situation,” she elaborates. “And the ones who aren’t probably will be in a couple months.”
Like so much that’s wrong with Spain’s economy, the soaring youth unemployment has its roots in last decade’s property boom.
Skyrocketing real estate values prompted construction companies to increase wages to attract workers. Many young men dropped out of school to earn good money working on building sites.
By the height of the boom in 2007, more than a third of Spaniards between the ages of 18 and 24 had dropped out of high school, more than double the European Union’s average.
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Bits Bucket for July 17, 2012
Drove by my DBLL`s place today, grass turning brown, weeds sproutin` up and there about 2 weeks away from being $5,100 out of free money they had been counting on. I can see their financial situation just like a WW2 fighter plane that has been hit with smoke coming from the tail as it spins out of control twoards the ground.
But a Mayor DBLL? LMAO Somebody strike up the band and play.. Hail to the Beats…
UNITED STATES PRESDENTIAL ANTHEM (HAIL TO THE CHIEF …
http://www.youtube.com/watch?v=LAsycMvZde4 - 128k
Updated: 11:04 p.m. Monday, July 16, 2012 | Posted: 12:49 p.m. Monday, July 16, 2012
Suspended Boynton Mayor Rodriguez faces three new felony charges; trial date moved
By Eliot Kleinberg
Palm Beach Post Staff Writer
BOYNTON BEACH —
Suspended Mayor Jose Rodriguez — already facing corruption charges that led to his suspension from office — has been hit with three new felonies alleging he defrauded a bank by short selling a Palm Beach condominium to a relative.
He also allegedly falsified an affidavit in October saying the condo had been his primary residence for four years, even though he was renting it out at the time and living miles away at his Boynton Beach home, and had been mayor for nearly 18 months.
According to the Palm Beach County Property Appraiser’s Office, Rodriguez bought the 44-year-old, 640-square-foot condo at Palm Beach Whitehouse in May 2005, paying $230,000. Prosecutors say he obtained a $184,000 mortgage.
Property records show he “quit claimed” it in December 2005 for $10 to his first wife, Lynn Sue Shumate, 46, of Wellington — whom he divorced in 1996 — as well as the former couple’s 16-year-old son, who is listed in state corporate records as vice president of Rodriguez’s Reguez Investments real estate firm.
On Sept. 5, property records show, Shumate quit claimed the property back to Rodriguez for $10.
According to a probable cause affidavit released Monday, Rodriguez had applied on Oct. 10, 2009, to Chase Bank for a loan modification, saying he had only $2,000 in the bank. Investigators later determined that he had more than $250,000 in an American Express Bank account.
The bank declined the modification, saying Rodriguez didn’t qualify. Less than a year later, on Aug. 27, 2010, foreclosure proceedings began.
Then, in August, an attorney for Rodriguezasked JP Morgan Chase Bank to approve a short sale for $74,000 in cash to Eric Molares of Royal Palm Beach. Prosecutors don’t detail Molares’ relationship to Rodriguez. The bank agreed and the deal was struck Oct. 18.
Rodriguez and Molares each signed an “affidavit of arm’s length transaction,” in which Rodriguez said he was neither a relative nor business associate of Molares and they shared no business interests.
Investigators later discovered that on Sept. 8
Rodriguez deposited $75,000 in one of his accounts, then wrote a check for $74,000 to Molares. Molares then gave a cashier’s check to cover the short sale.
Molares told investigators Thursday that Rodriguez gave him $75,000 to pretend to buy the unit.
The condo’s tenant later told investigators she’d received an email purportedly sent from Molares, saying he was the new owner and landlord, telling her Rodriguez would be managing the property and directing her where to send the $950-a-month rent.
Reading Rates: MBA Application Survey – June 27 2012
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Magazine Living: Think Pink...
× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Monday, July 23, 2012, by Sarah Firshein The all-American characters of Gary and Elaine have wormed their way into households aplenty thanks to the ingenuity of Molly Erdman, whose Catalog Living blog points to styling curiosities within catalogs. Here now, Erdman does the same for shelter magazine photos.
Aware of their friend Wayne's delicate stomach, Martin and Gareth made the wise choice to start the meal with a Pepto amuse bouche.Photo by Laurey W. Glenn/Southern Living
Aware of their friend Wayne's delicate stomach, Martin and Gareth made the wise choice to start the meal with a Pepto amuse bouche.Photo by Laurey W. Glenn/Southern Living Bits Bucket for July 21, 2012
Lots of economists seem fine with the “screw the seniors and bond owners” easy way out of the Great Recession.
To his credit, Ben Bernanke is not among them.
Those who advocate higher inflation seem happy enough to overlook the moral hazard problem associated with painlessly letting debtors off the hook, which is that another generation of profligates will feel encouraged to assume unrepayable financial obligations, recognizing that they, too, will soon enjoy a credit bailout in one form or another.
Not only seniors and bond owners will get shafted, but also American workers. This isn’t the 1970s, when union contracts covered many American workers with COLAs. Raise wages now, and the production effort will simply shift elsewhere in the global economy.
July 21, 2012, 5:00 AM
Number of the Week: Could Inflation Revive the Recovery?
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In a speech last fall, Chicago Fed President Charles Evans laid out the argument this way: The Fed’s implicit inflation target is 2%. The Fed doesn’t have a widely cited numerical target for unemployment, but a conservative estimate of the “natural,” or underlying, rate of unemployment is 6%.
“So, if 5% inflation would have our hair on fire,” Mr. Evans said in September, “so should 9% unemployment.”
Unemployment has come down some since last fall, but it’s still at 8.2%, nowhere close to the Fed’s “maximum employment” mandate. By Mr. Evans’s logic (which he explains more fully in his speech), the current rate of joblessness is equivalent to inflation running at 4.2% — more than double the Fed’s target rate.
Mr. Evans has argued the Fed should consider allowing inflation to run above its target until unemployment falls to some pre-determined — and pre-announced — level. He got more support for that position this week from economists Menzie Chinn, of the University of Wisconsin (and also the blog Econbrowser), and Jeffry Frieden, of Harvard. In a new article in the Milken Institute Review, the two economists argue that if fiscal stimulus, quantitative easing and an alphabet-soup of mortgage relief programs haven’t been enough to kick-start the recovery, it’s time to try inflation.
The big factor holding back economic growth in both the U.S. and Europe, the two economists say, is debt: Consumers, companies and governments are all struggling under the burden of huge debts run up during the boom years, making it harder for them to spend, borrow and invest.
That diagnosis of the problem — they cite “This Time Is Different,” Carmen Reinhart and Kenneth Rogoff’s now-famous study of financial crises — is fairly mainstream at this point. But their prescription isn’t: Ease the burden on debtors by allowing inflation to rise.
“Raising the expected rate of inflation would reduce the real burden of debt on households, corporations and governments, spurring both investment and consumption,” Profs. Chinn and Frieden write, arguing the Fed should allow inflation to run “in the 4 to 6 percent range for several years.”
The authors recognize their proposal will likely be “met with howls of indignation” from creditors, who would see a policy of intentional inflation — which would reduce the value of their bonds — as an expropriation of their assets. “To an extent, they are right,” the economists say.
But one way or another, they continue, those debts aren’t going to be repaid in full, whether it’s through inflation, default, bankruptcy or negotiated settlements. Better to do it in a way that’s quick and, because it treats all debts equally, at least relatively fair. The logic is the same as in bankruptcy proceedings, they write: “For creditors, something is better than nothing; for debtors, relief is better than default; for both, certainty is better than uncertainty.”
Messrs. Chinn and Frieden join other prominent economists, including Mr. Rogoff and left-leaning economists such as Paul Krugman, in arguing for more inflation. But one important economist they don’t look likely to win over: Mr. Bernanke. In this week’s testimony, Mr. Bernanke left little doubt that he opposes raising the inflation target, even temporarily. (Mr. Bernanke has plenty of prominent backers for his position, too, including former chairman Paul Volcker.)
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Monday, July 30, 2012
Recovery-less Recovery: Unemployment Duration June 2012
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