Sunday, May 13, 2018

I Like This Old Map Better

Dawgifornia, Jefferson, Cascadia, Columbia and Baja have been around a long time. 

Climate alarmists love pictures of future Florida. 

At the end of the last ice age there was a lot more Florida. 
The new range. 

179 comments:

Cinco-X said...

I like the new range. Do you get had from the street or from a tank?

Elizabeth Merceret said...

Ugh, stainless steel. The harvest gold of the future.

Elizabeth Merceret said...

The appliance itself fine.

Rob Dawg said...

You can color stainless. You cannot uncolor painted.

Elizabeth Merceret said...

I think you can color white.

LBD said...

Good Morning!

More rain 3/4" over night!


My onion volcano fizzled. Guess you can't flame cheap wine. LOL!

You can buy appliance spray paint in a can or have a auto body shop paint it. Cheaper and easier just to buy new ones.

Cinco-X said...

My kids could Crayon just about anything

Cinco-X said...

Try Sake

Elizabeth Merceret said...

Not enough alcohol.
Good morning

Rob Dawg said...

Truer words were never spoken than “Not enough alcohol.”

Drive to LAX sucked. Shuttle sucking. May not get my executive lounge mimosa.

Elizabeth Merceret said...

I didn't mean it yhat way, tho I suppose it's true.

LBD said...

Yes Sake is what they use in the restaurants. Never new that wine was so low alcohol content. Isn't alcohol the point of drinking and taste is the diversion.

Elizabeth Merceret said...

Welllll.

Rubygoat said...

Not only is the ocean rising, but the North American plate is like a giant see-saw over the mantle and as the ice melts and the weight is taken off, the northern edge is rising, while Florida and the southern edge is tilting down and sinking into the gulf of mexico.

Elizabeth Merceret said...

My part is tilting up ever so slowly.

Elizabeth Merceret said...

Well, should I sell my house now and move north now?

LBD said...

Our forefathers couldn't change these events so what makes us think we can? I don't think we will have much of an effect overall.

Rob Dawg said...

Venice FL. God’s waiting room. The sky is sad and crying. It rains and the humidity gets worse? What kind of perverse place is this?

Elizabeth Merceret said...

We needed the rain, silly. It is rather gloomy I admit
Floridah is mad at you for sinking it in the sea.

LBD said...

Good Morning!

We got a trace of rain last night.

No more earthquakes here in the flyover lately.

New pool set up coming along nicely. Back to the solar addition and the water heater test today!

Elizabeth Merceret said...

Would you come and replace a few boards and paint for us. Nobody else wants to. Good pay, travel expenses, and hospitality!!!!!

Elizabeth Merceret said...

10 year staying above 3. Too low, way too low. Should be at 5
IMHO.

Elizabeth Merceret said...

Checked Calculated risk, as I do once in a while. Everything headed for the sky. Builder's confidence at 70. Remember the good old days of 9?

Elizabeth Merceret said...

Without us he is very boring. Just mailing it in.

Elizabeth Merceret said...

The volcano is doing its thing. I love to watch it ooze down the road. However the stupid news guys standing in harm's way can't be in harm's way for real, no reality allowed. I actually wish a splatter of lava would briefly set their hair on fire.

Elizabeth Merceret said...

From your map, it looks like no major cities are left.

Elizabeth Merceret said...

Denver, maybe.

Cinco-X said...

In that case, move up to Everclear

Cinco-X said...

In the 30-40s it was a swamp

Cinco-X said...

I've often wondered why they don't look for more signs of human habitancy and civilization from the Ice Age on the shallower portions of the Continental Shelf. My understanding is that almost the entire English Channel was populated during the last one...

Elizabeth Merceret said...

Agreed. If there are hidden civilizations,.that's the place to find them. When flying between the Bahamas and Miami, but.you can see straight line structures that the Authorities say are natural. I'm not convinced.

LBD said...

LOL! I have 20 years worth of projects of my own to finish. I have to live a long healthy life to finish them.

Everclear, Rocket fuel for the discriminating alcoholic. :)

There is a lot of things they don't have answers to, yet.

Elizabeth Merceret said...

I have been reading about Fannie and Freddie. A book by Bethany McLean published in 2015 and The Internet. My eyeballs are spinning and rolling again.
Same arguments for 10 years with different names, no change. But it seems that it's ok if things keep humming along, but if not, oy, oy ,oy. It seems that they had tax deferred credits, which were useful only if you have profits, and not they do, except the Treasury has been taking all the profits. Now they are being allowed 3b$ apiece for a capital buffer, except that's beimg argued against. Anyway for all intents they have no cash buffer (or, less than 1000 to 1, which is effectively zero) banks are 20 to 1. So, if foreclosures increase, we are, with variations, back to 2008.

Elizabeth Merceret said...

Rates are inexorably headed up. Fewer house purchases, lowered house values. Higher amounts to pay treasury debt. Etc.
Plus the tax deferred stuff for some reason has been allowed to be counted as capital, and simce taxes have been lowered
I may not be understamdimng this.

Elizabeth Merceret said...

So required capital has been lowered, so they have to raise money to cover this, and mo way to do so. I hope I don't understand. Eyeballs whirl some more.

Elizabeth Merceret said...

Somebody poke firemane and get him talking.

LBD said...

LOL! The great asset robbery goes on. Little to no money down and take your chances. Less down the more finance profits and stupid high prices give even more lending power for more debt to your bankster. Not to lose out property taxes zoom to unrealistic values to feed the local government piggy banks.

I noticed today a manufactured house in town has repo papers in the window again. Think this maybe the 3rd or 4th time since it was built. Nicely done in a decent neighborhood. Why would any bank lend with a history like that? Oh, forgot the government will eat any bad deal.

Elizabeth Merceret said...

Different families?
The house is innocent, the bank is guilty.

Rob Dawg said...

Not just the capital reqs but classification of capital. A commercial loan to a company that only owns houses is considered a commercial loan.

Rob Dawg said...

Thank god the air conditioning works. Hardly anything else does. I am getting hoarder immersion therapy and this house isn’t even cluttered.

Elizabeth Merceret said...

Hahahahaha. But wouldn't it be an eviction if the company owned it?

Elizabeth Merceret said...

What doesn't work?
Is it because it is old stuff?

Rob Dawg said...

I am in one of my moms “coaches” which is Florida speak for trailer home. This is an extra coach so we are prepping it for sale as we make arrangements for someplace better without stairs and ramps and such. These things are horrible. I cannot wait until every single one is retired in favor of properly located printed cement homes.

LBD said...

My mom and dads coach LOL! was ground level as it was in a dug out and not sitting in the air. Maybe the dry climate was acceptable for this process.

Elizabeth Merceret said...

I never heard the word coach except in relation to Cinderella and English aristocracy.
Never heard of that LBD.

Elizabeth Merceret said...

Dawg is in the same time zone. Yay

LBD said...

My mom was very adamant about it being a coach and not a trailer. The attempt to separate the trailer park trash to a higher class. Works for a while till the trailer gets old and generally not maintained. If you home got their preassembled with wheels it's a trailer.

Elizabeth Merceret said...

Good morning everyone. 😄

Elizabeth Merceret said...

There are even different kinds of licences and different kinds of title searches depending on whether it has an R sticker or not.

Elizabeth Merceret said...

I still wanna buy Home Depot, but it's too expensive.

Elizabeth Merceret said...

Checking New Jersey

Rob Dawg said...

Early morning downpour. Cooled of for almost half an hour. Still 100% humidity. So much to do to get ready. Found a picture of my first day of school.

LBD said...

Good morning!

No rain last night.

Time to test the solar pool heater today. Electric heater works well. Now need to find a cycle timer. Solar blanket should be here today.

Elizabeth Merceret said...

Awwwwww
Were you cute?

I found a copy of my parents' divorce decree.
Not the same

Cinco-X said...

Fannie and Freddie!? Is this a bodice ripper novelette?

Cinco-X said...

I thought firemane was a girl 🤫🤔

Elizabeth Merceret said...

Get ready for what? Moving your mom?

Elizabeth Merceret said...

Now we have a leak, I think in our bathroom. We were planning to have that bathroom ripped to shreds anywau. This will force us. We can use the other bathroom.

Cinco-X said...

If your home is 20-30 years old with the original copper plumbing, it may be time to retirer it. Copper doesn't last very long with that water in that soil

Rob Dawg said...

Is it coincidence that selling one of my mom's extra houses will net the exact amount we are spending on the kitchen?

Elizabeth Merceret said...

I think it's that plastic they use

Elizabeth Merceret said...

Is she giving you the proceeds? A very cheap house or a very very expensive kitchen.

Rob Dawg said...

Proceeds are hers. Yes, kitchen is expensive. Cracked $70k.

Rob Dawg said...

Went swimming in that bathtub you call the gulf.

Elizabeth Merceret said...

Which youhad a turquose bathtub oversized to be 2 inches deeper wider and longer, after the storm. It was delightful. Made a closet into a storm shelter with walls of ply and wallboard both, and durrock on the other side. And a ply and wallnoard ceiling. Have been no hurricanes to test it.

LBD said...

Good Morning!

Went for my first float last night, A chilly 72F. It was 58F three days ago. So yes you can heat a small pool 3300 gallons with a 40 gallon water heater. I up the primary element from 3500 watts to 4500 watts.

Hack of all trades, Master of none!

Firemane said...

Out depressed yesterday. Had a whirlwind 3 week romance and got dumped on Tuesday.

As for feelings regarding Fannie and Freddie. Not my real area of expertise, (though I did read some of the post-crash books trying to explain the mess).

My opinion.

1) 2008 CANNOT happen again for another generation or two - (no matter how greedy and corrupt the banksters are), because the bubble REQUIRED complicity on the part of tens of millions of "normal" people willing to believe the banker BS (because they had no reason not to).

2) While there will always be (and have always been) some people too dumb to know better (or just greedy themselves) - my belief is that because the PAIN of 2008 was so widespread - that every homeowner knew SOMEBODY who got badly burned. And their kids felt the pain, too. So, no matter how they repackage it - we've got a couple of generations of home buyers who simply WILL NOT fall into that same trap.

3) I believe the incredibly low housing inventory nationally right now was a PREDICTABLE outcome from the crash of 2008. The ratio of people viewing houses as WHERE I LIVE - vs. those viewing houses as "an investment" has massively changed - and WILL NOT revert for a few decades at least.

4) The problem in 2008 was not that bankers were willing to make bad loans - the problem was the MAGNITUDE - the total number of stupidly bad loans was what killed housing and the economy overall.

5) Yes - 1st time home buyers are still at risk of over-reaching and potentially listening to bankster idiocy. But, is there any evidence to date that the millenials are running out en masse to overextend themselves with stupid-sized mortgage payments? No. Evidence is all on the OTHER side of that argument - that they are taking MORE time - bringing MORE downpayment - and instead of buying "starter" homes with a plan to "move up" - they are actually waiting until they can actually afford their "forever" house before buying at all.

6) Eventually, yes, the greed and idiocy will return. But, I'll be in my forever nursing home (or dead) by the time that happens.





Elizabeth Merceret said...

I certainly hope you are right. It does take about 10 years to forget, and I have heard a couple of tv ads urging cash put financing. But the GreY R eas soo bad that the forgetting may tam e another 5 or 10 years. The it takes a couple more year for the get rich wuick mentality to lick in.
The son got a VA mortgage, which probably means he put nothing down. Meanwhile he has a 3 3/4 % mtg and zillow, for whatever that's worth has it gping up %17k in a year.

Elizabeth Merceret said...

Great Recession. Quicm. Take.
Going.

Elizabeth Merceret said...

My son was dumped inexpectedly by a female that I never much liked--after he got married. Thank heavens she did. He met a lovely girl on a dating service on the Internet!!!! And they bought the above mentioned house, which was in good shape any way that they are fixing up more. And she's 7 months pregnant. Buck up, there are more fish in the sae.

Elizabeth Merceret said...

Glod, I sound drunk.

Firemane said...

Thanks for the sympathy LL. I'll be okay in the long run, I know. It just sucks for the moment.

A side note regarding my end of year recession call.

Was looking at FRED data on Working age population. First off, they have two different measures (15-64 or 25-64). Anyway, looking at the 25-64 data:

Here are the recent annual changes in WAP (25-64) (using January all years).

2014 +0.1M
2015 +0.5M
2016 (0.2)M
2017 0.0M
2018 +0.7M

Just fyi, here are the norms for the past 40 years:

'80s +19.2M
'90s +21.1M
'00s + 4.9M

So, until VERY recently, the WAP was growing by 2 million a year.
In the '80s and '90s, you ALSO had the addition of women entering the workforce creating an even larger wave of entrants into the workforce.

The last 5 years COMBINED is +1.1M (just over 200k per YEAR).

Because we were still hiring back all the millions unemployed (or who went back to school, etc.) left over from 2008, we could continue adding 2 million workers a year even though WAP growth was stagnating. Problem going forward, since we're at full employment, is there's simply no more surplus to pull from. Going forward, we will be getting ONLY the growth with in the WAP. (plus a sliver on the back-end - post-65 participation have gone from 12% to 21% between 1996 and present). So, we'll get "some" boost there - but that is going to quickly turn to nothing, since life expectancy has flat-lined the last few years.

Elizabeth Merceret said...

I think if you took out the opioid thing, life span might be going up still. Higher salaries might pull some out of hiding. And productivity might go up. Which I care about only if it's shared, which now, it might have to be.

TJandTheBear said...

Yep, it's not 2008... it'll be far, far worse.

IMHO nobody's learned anything from 2008 with plenty of evidence everywhere that people are engaging in all the same bad behaviors. This time, however, the entire world is involved and $20T deeper in debt.

TJandTheBear said...

Regarding demographics...

https://www.youtube.com/watch?v=XK7Gmk93H7s

By 2020, absolute annual growth in working age population will be the same as 1833 when the total population was 14.1M

Rob Dawg said...

Depression plus birth control equals demograohic bomb.

Rob Dawg said...

The floor tile is going down in the kitchen. Without me! No offense Liz but this part of Florida is every day like the previous except one day older.

Elizabeth Merceret said...

Well, they learned for a little while. And their children, perhaps for a longer bit. But when banksters think they can make money with cash out financing. . . . . What can we say.
Never the less, I think juggernaught can keep rolling for a year and a half

Elizabeth Merceret said...

Well, went to yoga last nite, would have gone to excercise, but are waiting for a plumber, not a good kind of excitement. Lunch and shabby chic shopping with a friend and is that enough?

Elizabeth Merceret said...

True, but what is Europe going to do?

Firemane said...

TJ ... I'd be interested to have some references to specific bad behaviors you're talking about.

I'll offer a counter-example. LL mentioned cash-out refinancing. One of the major aspects of the market that led to the 2008 crash was Americans went nuts *IN MASSIVE NUMBERS* in regards to refinancing and cash-out refinancing.

In 2003, refinance activity hit TEN MILLION!

When rates bottomed 18 months ago, yes we had a spike - that rose almost to 3 million.

Mind you - during The Slog, as rates dropped, lots of people who bought in at high rates (and kept paying their insane mortgages anyway, did refinance between 2010-2014 (during the era of millions of foreclosures). Refinancing is not always dumb.

But, my point is - even with rates at 3.5% ... the banksters COULD NOT GET PEOPLE TO CASH-OUT REFI in anywhere close to the numbers that were routine in the early 2000s. And as soon as rates began to rise, the refi market dropped to under a million, (which is only going to get worse as rates continue to go up).

https://3.bp.blogspot.com/-MRmwaoPSqlY/Wvt9ZiDht6I/AAAAAAAAu6A/gv5DYWdNgekoI6gz1AG6A7-QS4zsfW4-ACLcBGAs/s1600/MBARefiMay162018.PNG


But, I am willing to look at any info you have to offer.

LBD said...

Good Morning!

3/" rain last with plenty of wind. Cooler and wet for a few days so no pool activities.

There is never a shortage of weak and financially uneducated any more. We have lost honest financial lessons from parenting to the banksters and they have one goal max profits. Parental education gave children an education in discipline and responsibility. You can't teach what you don't know. Our wrong headed government thinks in terms of votes for reelection and control of the purse strings. Then there is the side deals politicians are privileged to. I think that is why many of the old guard Republicans are running for the door. Little if anything has not changed.

Floor pic?

Elizabeth Merceret said...

My grandmother, the miser, always said, never spend your capital. She could have lived better, but my mother, the heiress, went on a lot of trips to europe, indulged her love for clothes, bought a car for cash when she needed one, paid off her mtg, and still had a fair amount to leave to me. My kids are quite good with money. We used to give my daughter all her money for the semester, and she doled it out to herself and called us for more food money the last week or 2 of the year. She just hired a cleaning lady for a home she designed herself.
The son has school loans but he stays in his gilded cage with the VA for another 6 or 7 years it will be paid off. Anyway I share a little bit of my inheritance money at unexpected intervals, so yhey don't

Rubygoat said...

I bought in 2007 at 6% interest and 3%!?! down. My loan officer was trying to convince me that a 5 yr ARM was a good idea(LOL). She said she and her husband had one, I wonder how it turned out for her. I refinanced in 2010 at 4.25% and got rid of my PMI. Most of my friends that were a little younger and a couple years later to the party have found that what I did is no longer possible. Investors with cash have shoved prices up just beyond reach, and banks prefer 10% down now. I know many who would like to own a home and just feel priced out. Any time they find something in their range they get outbid. I think this means that 2008 won't happen again anytime soon because the consolidation of ownership will help keep prices stable thru a recession. Investors can better afford to keep inventory off the market until prices recover.

Elizabeth Merceret said...

They don't get used to it. They can both easily pay their mortgages at the low rate of 3 3/4%.
Value of both houses have gone up a reasonable amount.
Not everyone's kids are financial mushbrains.

Elizabeth Merceret said...

Son's VA mtg was 100%. But it's gone up 10% in a year plus paid down 2% in a year.

Firemane said...

LBD,

My entire point is EXPERIENCE teaches us what schools and parents fail to teach us.

Even in the early 2000s, not everyone was an idiot. There were millions who knew better and avoided the cash-out madness. But, their numbers were dwarfed by the ones who (as you note), were not taught well by their parents - and who assumed (wrongly) that the banksters wouldn't willingly make loans they knew could not be paid back.

The biggest idiots were the ones hit the hardest. You think Mom and Dad saying - "you should be prudent with your money" is a BETTER teaching tool then - "Pack your bags and be out on Thursday, the bank owns this house, now."?

The madness also wasn't uniform. CA, FL, AZ were the arenas where it was the worst - while Texas almost completely avoided the mess, because Texas had STATE laws written in response to the '86 debacle that prevented the worst of the excesses of the early 2000s from happening there.

I didn't lose my house - or miss a payment. But I knew people who did. And believe me - the KIDS in those families got a major education in finance. When you are 15, and you're yanked out of school, and have to move 300 miles to move in with Grandma and Grandpa -- that WILL have an impact on how you view bankers and finance as you grow older.

It wasn't "as bad" in NC as some places. But, the cash-out refinancing was rampant. During the peak, I was getting 3-5 letters per day - begging me to refi my 100k townhouse. And this was AFTER I actually did a cash-out refi in 2001 to pay off my wife's credit card mess.

In 2003, mortgage rates dipped to 5.8% - and THAT was when we had 10 million people refinancing all at once. Fifteen years later, at 3.8%, less than a third as many at peak.

Existing Home inventory is at levels not seen since the '90s. Nobody is selling "just because" anymore. Refi rates are heading down and will hit '90s levels pretty soon.

Builders won't build "starter" homes anymore (not enough margin).
New Home sales aren't even back to '80s norms, yet.

So, if there really are 50 million idiots out there just waiting to replay the housing idiocy of the early 2000s - what the heck are they waiting for? The lowest interest rates were 18 months ago, and only heading higher. Inventories are historically low - and (locally) anything decent hitting the market is gone in days (usually OVER the posted asking price).

My view? Expecting a replay of the housing madness of the early 2000s makes about as much sense as expecting 8-track tapes and cassettes to replace CDs and digital downloads because at one point in the past 8-track tapes and cassettes supplanted LPs.





Rob Dawg said...

Nevada was hands down the worst. Las Vegas area and Henderson the epicenter. By 2011 it was downright creepy to drive some of those neighborhoods.

Cinco-X said...

We were shocked in 1980 when my uncle spent $35k on a bathroom... It's routine now

Cinco-X said...

That's one of its best features. You only get cold AFTER you get out of the water

Cinco-X said...

P€®©0$€t

Elizabeth Merceret said...

It's getting creepy in some of The malls.

Firemane said...

Cinco-X

The thing is - spending $35k on a bathroom is actually investing time, effort and materials and (potentially) improving the existing home.

In the 2000s - nobody was actually "upgrading" their homes. The whole point was buy today at 200k - sell next year at 250k (without changing a thing) - and repeat the process until you were in a million dollar McMansion still making the same $45k salary you had when you began the process.

Dawg's remodel is the opposite of what was going on heading into 2008.

I think the scene in "The Big Short" where the stripper says she has 5 houses ... and a condo ... pretty much sums up the madness.

Rubygoat said...

We are the same distance from Mallrats as the movie was from the Vietnam War.

Rubygoat said...

My father taught at Santa Fe highshool for 25 years (retired 4 years ago). I went to grade school in the ISD from 1st to 5 grade. You talk about foreclosures being a generation defining event. School shootings are going to have some lasting impacts on society. Something has to change.

Elizabeth Merceret said...

I just found out aboout the latest school shooting.
The mob would be an improvement. At least we'd known why it was happening.

Elizabeth Merceret said...

They showed the various shooters pictures. They all looked somewhat alike.

LBD said...

IMO on remodeling is to sell or stay for 10-15 years. Functionality or eye appeal is the game. I had to do some remod and lipstick to even sell my Mc Mansion in 2002. Amazed at the people even at a low price expected to have a remodel done. Had a neighbor complain to my realtor about trouble getting a refi do to our low asking price. People may shift their buying to cars and other toys but they haven't changed. Currently coaching a nephew on money and how it really works. Parents lived big till the Bankster cut them off. They still don't have a clue. He bought into the student loan, never finished college, car loans, medical bills from kids, finance everything to try and play in the middle class game. He recently paid off $4500 in debt so I guess he is serious. Banksters figured out giving money to anybody still works as long as they can out run the no pays. Student loans haven't been fixed yet and the keep screwing them into useless degrees. Bad Subprime car loans are building up. Builders will dig into their bag of tricks to keep things going and no surprise you can't make money off of people who don't have money or available credit. Banksters need a certain amount of defaults to get the max amount of money out of these poor slobs. No educator is going to teach what they don't know and that is how the rich stay rich.

LBD said...

Nothing changes until they put armed guards in schools. One for every 500 kids to start and then move more electronics to help. There should always be a minimum of 2-3 guards on duty at all time to cover a Barney Fife failure like Parkland. Teachers should be striking for real fixes and not their pay checks. Safety first. IMO

Elizabeth Merceret said...

Well they don't have official slavery, so it's been reinvented under another name.

Elizabeth Merceret said...

Ever happen before?

Elizabeth Merceret said...

Teachers also strike for more school funding and they deserve more funding.

LBD said...

Education system needs fixed not more money. When there are more administrators then teachers something is wrong. Vouchers would fix a lot and crush the union which is a big problem. IMO.

Elizabeth Merceret said...

Fewer administrators agreed.

LBD said...

Good Morning!

1 1/2" of rain and still coming down.

The unions have created a poor me image that never ends. Rewards for failure funds lots of union jobs. When you calculate hours worked under the union contracts Teachers have a part time job. Pretty good pay especially if you have a para or two to assist you. How did we ever educate kids in a rural one room school? Those ladies where Saints.

Elizabeth Merceret said...

Am at the car dealer, to look at Foresters, or he is. My specs are: not black, not white, he's happy, my seat is comfy. That's it.

Elizabeth Merceret said...

At Forrester car dealer. Comments?

LBD said...

I am not a good reference. Worked on their junk when they where first imported, still junk in my mind.

Why would you need a 4wd in Florida? Do they even make just a FWD?

Elizabeth Merceret said...

Helps with traction. Otherwise no

Elizabeth Merceret said...

The test drive made him car sick.

LBD said...

That's not fun. :(

I have kind of lost interest in new cars especially the price for a ton of electronics I won't use.

Elizabeth Merceret said...

Luckily there was a Hampton Inn just across the street. He got sick driving that short distance
. Driving weeeeee!!!

Elizabeth Merceret said...

The test drive made me slightly dizzy, which I never get. Anything happen today?

Rob Dawg said...

Only half the tiles are in. Working through Saturday. May push cabinets to Wednesday.

LBD said...

Rain not quit over but we are at 2 3/4" for two days running.

Haven't paid any attention to the news. Busy surfing YouTube, ordered another solar mat and a cycle timer switch for the water heater pump. Oh a nap and fix buffalo chicken enchiladas with cream cheese. :)

Rob Dawg said...

Had a couple inches in the past half hour it seems but I’m a poor judge or is that pour judge?

LBD said...

I'll Judge, Pour another round! :)

Rob Dawg said...

Almost done with the coach. Chose the trailer park to list. One room left.

I will be traveling Wednesday night sova few more days.

Rob Dawg said...

https://wolfstreet.com/2018/05/18/credit-card-delinquencies-spike-past-financial-crisis-peak-at-smaller-us-banks/

Seems like Firemane’s Recession prediction has new evidence.

Rob Dawg said...

Fascinating beer yeast:
https://medium.com/science-hive/gmo-yeast-are-delicious-but-will-the-brewing-industry-catch-on-1682e5467f6c

LBD said...

Good Morning!

Chatter on subprime cars loans has been floating around for a while.

Road trip to the mountain! Hat a nice day!

Elizabeth Merceret said...

Groooan

Elizabeth Merceret said...

Hello.

Rob Dawg said...

Well the rain is here and going to stay. My sister took the car. Other sister has the third car and the other other car is in the shop getting a minor repair and detailing for sale. There’s nobody to take me to any of the rest of the cars so I’m stuck with the last room to pack and no transport.

Oh btw. Cel service is so bad that in order to post I sit in the corner of the patio and lean towards to window.

Rob Dawg said...

The mighty mighty Volvo is barely broken in at 156k mi. It’s the ‘98 Expedition that I’m hoping qualifies for another cash for clunkers but it won’t natter because the huge number of used vehicles coming off leases that won’t be bought out and the subprime defaults will flood the market at prices that won’t justify even many thousands off new vehicle prices.

Elizabeth Merceret said...

Where is your mom going?

Rob Dawg said...

Family and home care for now. As you might expect the situation is fluid.

Elizabeth Merceret said...

Oh, dear

Rob Dawg said...

We may be poor but we will make her both happy and comfortable.

Nota bene. As an Irish German French New Englander norm the very day President Roosevelt closed the banks, being comfortable is almost antithetical to making her happy. Nothing to complain about would almost be a cruelty.

Rob Dawg said...

Not norm. Born the very day FDR closed the banks.

Elizabeth Merceret said...

Poor hah.

Elizabeth Merceret said...

As long as she is not complaining about you. You are a good son.

LBD said...

Good Morning from the foggy high plains,

Into the burbs today for lunch and shopping.

Elizabeth Merceret said...

Gluten Morgan.

Firemane said...

https://wolfstreet.com/2018/05/18/credit-card-delinquencies-spike-past-financial-crisis-peak-at-smaller-us-banks/

**Seems like Firemane’s Recession prediction has new evidence.**

It's evidence of something ... but precisely what, I'm unsure.

Looks to me like a "false flag" post - apocalyptic click-bait with little substance. Takes them long enough, but they eventually admit that the bottom 4700+ banks hold a tiny sliver of the overall CC debt, and the data makes it look like the Big Banks are continuing to act responsibly.

Mostly, it makes me wonder not about the most recent spike for the small fry - but why the divergence back in 2012 after tracking together for so long after the crash? (Was that when Warren's Consumer Protection Agency got going?)

There's a part of me that sees a spike coinciding with Trump taking office and thinks --- yep, this is the reaction of the "dumb" Trumpers, convinced that it's Happy Days forever - so now that the evil Kenyan Muslim is out of office, it's okay to live large instead of being prudent with one's money. That's probably just my own political biases talking. More likely, the Big Boys just got better at scraping the 'cream' off the top of the small fry CC portfolios - so just your normal elite rich business bifurcation going on.





Firemane said...

Dawg,

Thanks for posting the CC link. IMO, it's a wonderful example of the difference between looking at data and doing analysis.

You look at the chart - and read "bottom 4,700+ banks" - and it's easy to leap to a conclusion that credit markets are suddenly getting shaky, but, based on the text, if you merged the two lines into "all banks" - the line would pretty much look exactly like the Big Bank line - just a hair higher, so no reason to worry.

But - if I were to push this as evidence of my theories - my take would be this. The last people to get hired are the worst employees. As you near full employment, the scourge are the last to get jobs. BUT - because demand is there - they DO get jobs (at least for awhile). And THAT could explain the spike. If the dumbest, laziest, least reliable people are the last one's to get jobs - they are ALSO the first ones who (with a job) are likely to run out and rapidly rack up debt.

While unemployed, they couldn't get credit (or at least couldn't add credit). But, with a job in hand - they can get another card - and being they were the last to get hired - they are also likely the most desperate to catch up to everyone else. But, based on a little apocryphal data from my circle of friends - these are also the people that can't HOLD a job. So ... get a job ... get a card ... run up debt ... lose job ... get delinquent.

It's a nice tidy explanation that completely fits my FECES theory regarding full employment. Which is why I dismiss it out of hand. The "analysis" of the data - the "why" - is the hard part - and the dangerous part with data. Mind you - if I had predicted a spike in sub-prime activity as the economy approaches full employment, I'd be more than happy to use it as evidence. But, I didn't. So, I'm not going to attempt to shoehorn new data into my theory just because I can make a nice narrative to go along with it.



Elizabeth Merceret said...

!!!!

Elizabeth Merceret said...

Some few of the most lazy etc may figure out how to hold a job.
Most to all of bmy clients mlm had jobs, but only half of.them at most knew how to handle credit. Lots of times, the more money they had, the worse debt they got into. But they had good jobs. Not to say that your argument is invalid. It's just not universal.

Elizabeth Merceret said...

Oh, I see you were saying it may not fit.

Anyway older people who werecompetent until 55 may also get jobs.

Firemane said...

LL,

So the point I managed to bury was this:

How does one explain the very recent (starting in early 2017) spike in CC delinquencies?

My tongue-in-cheek narrative "could" explain it. As could any number of other plausible narratives. And this is where I think Fox, MSNBC, the MSM and pundit class are all (regardless of side of the aisle) mostly idiots. None of them even TRY to separate analysis from bias.

My honest belief is that the data in the link is "most likely" a result in changes to the division of CC users at the Big 100 vs. The Rest. But, I don't have actual data to support that view. What I would expect to see (if I am correct about this just being a move of the mix of credit worthiness between the two lines of the chart) - is that there would be some shift in the SIZE of "The Rest" customers.

Basically, the Big 100 just got much better at converting the "best" customers of "The Rest" into their customers. But, it's a targeted migration. Say, back in 2012 the Big Boys said "we've reached our cutoff for CC customers - the rest are too risky. So, the most questionable ones land with the small fry.

But, over the last 5 years, some portion of the "bad risks" in 2012 actually turned out to be reliable. So, by 2017, The Big Boys figure out how to target them and get them to transfer their balances - and they move from Joe Bob's Bank VISA to CITIBANK VISA. But, only the "best" from "The Rest" are moving. So, they don't hurt the Big Guys numbers (enough to matter), but you're culling the best customers the small fry had, altering their mix from say:

25% - Great
20% - Good
30% - mediocre
15% - Bad
19% - disasters

to

10% - Great
20% - Good
25% - Med
20% - Bad
25% - Disasters

At some point, you trigger the desperation button for the small fry banks - they lose enough CC customers where they get desperate and lower their lending standards - and the whole thing just gets worse.

Small random banks go out of business every day without killing the economy. It's when the Big 100 go stupid that they take all of us down the toilet with them.

Cinco-X said...
This comment has been removed by the author.
Cinco-X said...

The wolves are guarding the sheep, and the patients are running the asylum. Everyone's trying to line they're pockets while they can, hoping they'll have enough to save them when the bottom falls out. How did we get here?

Rob Dawg said...

Good points all. To add. If the unworthy run into difficulties they probably get behind on their little bank cards before their big bank cards.

Elizabeth Merceret said...

Very carefully. My grandmother's generation was very careful my mother's somewhat less so. My generatio. Had to contend with incessant advertising revolving credit cards. The hub and I are paragons of financial. Virtue but our immediation ancestors thought we were spendthrifts. My son has bad student loan debts for grad school, but they go away after 6 or 7 more years of bonded servitude. His salary is good, plus disability. If he sticks with it it will be fine. This sort of thing, like hemlines and free sex, swings back and forth like a pendulum.

Firemane said...

Cinco,

This is the nature of Capitalism. Always has been. There were a multitude of crashes and recessions throughout the 1800s. This is not a case of things "getting worse", so much as it is a case of most Boomers grew up in the one (exceptional) era in history when the combination of Depression and WWII combined to create a much more level playing field than normal for most of the next 40 years or so. The boom of the 50's and 60's happened with 90% Top Marginal Rates and 25% Capital gains rates. Today, millionaire's whine about 35 and 15.

In fact, despite the best efforts of the Blind Right (not everyone on the Right - just the extremist all-gov-is-bad-all-corp-is-good branch), just enough of the checks and balances installed under FDR remained to prevent a repeat of 1929 in 2008, (that and a trillion in bank bailouts).

I'm still optimistic about the future. I see vast differences in the actions of those that inherited their billions (Walton's, Kochs, Trump) vs. those who created from scratch (Zuckerberg, Gates, Bezos, Buffet). There's always been an ebb and flow to how successful the rich are in extracting wealth from the working class -- but a hundred years from now, it'll be China's world - not America's. But, it's not like people in Rome and London today are living in thatch huts and eating grubs just because they are no longer "THE EMPIRE" of the world.


Elizabeth Merceret said...

I'm not so sure sure it's China's world then. Plagues often come out of China

However its achievements over the millennia are dazzling. This Chinese massage method I'm trying is reducing pain in my hip joint with spurring. ( Tylenol does too.) Anyway, there are some definitions in the back, and one was a bone instrument from 2700BC or so used for accupuncture, before there was metal suitable for the needles. So I presume accupuncture, which was pressure then, is way older than that. And that's just a couple of things.
What the Chinese have not done, like us, was to figure out how to keep some people from becoming too rich, or too poor.

TJandTheBear said...

Rob,

About time for a comment cleaner post with some new pics!

Firemane,

Been tied up in major systems upgrade the past week (and weekend) so haven't been able to post much, but I'll certainly dig up some points for discussion soon.

Elizabeth Merceret said...

Checking on volcano growth.

Elizabeth Merceret said...

Still exploding.

New post, if you can.

Elizabeth Merceret said...

So mom e Federal agency said the unemployment rate may reach 3.8% by the end of the year. It's nice they think it won't go up, but otherwise, big whoop.
Firemane's thoughts at least aren't a big fat dose of self interest.

Firemane said...

LL,

I see China as inevitable (only other possibility is India). It's simple numbers. They have more.

America was a success in large part because it leveraged all of the technological and societal development that came before it. Yes, the natural resources were vast - but those resources were vast when it was just native Americans roaming the prairies.

China has 3+ times our population - so, bringing 1/3 of it up to 21st century technology levels is enough to zoom past us economically. China also has no cultural barriers to "stealing" every possible beneficial technology they want from wherever they can find it. Once they made the choice to modernize, the economic contest was over.

They also are perfectly willing to experiment with what amounts to government-controlled capitalism -- creating incentives for innovation and expansion - but all with the known threat that if you "go too far", you're toast. (I actually wrote a paper back in 1983 predicting that eventually China, not Russia would be our ultimate economic rival - and managed to easily obtain NY Times stories about the spread of "restrained" Capitalism being not only allowed, but encouraged by the Chinese government).

I think everyone here understands that the markets and Capitalism do help create massive economic good. But, I think we all also understand the ugly underbelly of that beast - and where the path of greed for greed's sake leads. China has a culture and government that is willing to allow "the good parts" of Capitalism with no compunction whatsoever of crushing those that abuse those freedoms.

I'm not saying their system is perfect or even necessarily better. But, currently they have a truly bifurcated economy - 1800s level peasants (several hundred million) - with 21st century modern infrastructure, technology, finance, education, communication. They will likely be pulling the peasants into the current century over the next 100 years.

I won't be around to see it, but in the end, China's economy will dwarf ours the way we dwarf the UK's today.

Elizabeth Merceret said...

I'm surprised that pollution hasn't eaten into the population growth. And the preference for boys. And the malinvestment in expensive housing must come home to roost. And the need for good water.

Elizabeth Merceret said...

And I had the idea there were more peasants, from where, I don't know.

Elizabeth Merceret said...

Oh, and I truly hope they reignite the space race.

Firemane said...

Actually, I do need to revise my statement about the 'peasants'.

It has been too long since I checked on Chinese poverty rates (a reasonable proxy for the % of a population that has not been modernized).

Back in the '80s, the poverty rate in China was 81%. I thought they had gotten that down to under 50%. Actually, it's down to 12%!?!

1980 - 81%
1990 - 60%
1999 - 39%
2010 - 12% (source is World Bank from a WSJ article).

US poverty rate has swung from a low of around 11% up to just over 15% since the late '60s.

So, they don't have as much "easy" growth ahead of them as I thought. But, their per Capita GDP is way lower, so they are still much further from being maxed out compared to the US.

GDP 2008 - 2016 comparison

Chinese GDP: 4.6T - 11.2T
America GDP: 14.7T - 18.6T


Elizabeth Merceret said...

How do we know that GDP for either one is reasonably accurate.

Elizabeth Merceret said...

Dawg, I think, said something about electricity use being a proxy for GDP, and when the Chinese noticed, they suppressed that statistic.

Firemane said...

I get that every GDP stat for every country is a kludge of massive proportions.

And judging GDP across different currencies creates a whole other complicating factor.

But, in the end, the questions to ask are:

1) Is there an overwhelming reason to believe country "A" is lying more (or less) than country "B"? (SAYING you have a big GDP doesn't actually gain you anything. There isn't a Stanley Cup given to the world's #1 GDP).

2) Is there an overwhelming reason to believe country "A" has significantly CHANGED how much they are lying about their GDP?

Companies lie about their profits all the time (to bolster stock prices or to avoid taxes). But, we generally accept the numbers given until an Enron shows up and reminds us.

Yeah, China might be lying about stuff - but we know with certainty how many THOUSANDS of coal burning plants they have built over the past couple of decades - and we got to see the smog problem they created during the Olympics.

But, we have proxies we can check because China does so much importing and exporting.

How many US auto sales? We're doing 17M a year.
How many Chinese auto sales? They hit 17M in 2013 and hit 24.72 million last year. To catch the per capita car sales rate of the US, China needs to get that up to around 67M a year.

I'm not saying they'll get there any time soon. They may well max out at *only* 34M car sales per year, (double ours), or 51M (triple ours). Who knows? Different culture. Different priorities.

But, once they decided they WANTED to modernize and technologically Westernize, our fate was sealed.






Elizabeth Merceret said...

We don't need 10 million new cars. I guess that is partly your point. And year, I never read the reports sent me by the companies whose stocks I own.
I just assume they are mostly lies. I am not qualified to separate the lies from the truth. I read some biz blogs, because I might get info on the really terrible news.
Remember when Fannie and Freddie CEOs said everything was peachy keen, and then the hot taken over like, a week or 2 later?
I take such statements to mean the opposite, and we should run for the hills.
I can see how well Brevard county is doing by the help wanted signs, and dimish6ing of beggars, and old stuff being torn down in favor of new stuff and new space related stuff, and I see the launches. I can't get anybody to do stuff on my house, or even give an estimate. Finally got the roof done after 6 or 9 months of looking for some, and they said they poach other peoples workers.
All this and more says this is an incredibly busy area.
So when they say unwmployment is 3.6%, I believe them, except it's probably less, not counting the under the table people.

Elizabeth Merceret said...

Restaurants are busy, but not stores or the local mall,due to the internet.
They are actually building a big new development near me that the NIMBYS did not succeed in squashing.

Elizabeth Merceret said...

I think our govt lies less, because the Chinese lie so much, we just don't hear about it. Reporters here do ferret out some awful stuff that happens.
Trump is not counted because he alone would escalate the NLR, National Lying Rate.

Elizabeth Merceret said...

And it's really fun, talking atcha.

LBD said...

Good Afternoon! Made it back home from the big Shity!.

China is the US economy post WWII. Time for build out? US has a fake economy now for many and that is it no matter what the data says. News lies? depends on what you want to hear. There is an outlet to fit your taste or you think and make your own decisions on what makes sense.

TJandTheBear said...

Bush & Obama lied through their teeth virtually every time they spoke; the only difference is that they did it with that rarified air of presidential dignity. People completely ignore the message when they're all caught up in the messenger and their slick delivery.

Rob Dawg said...

Managed to sign back. 20 hours to civilization.

If China is the old US c.1950 then the US is England (with better teeth).

Firemane said...

Why I think the "all the stats are lies" mentality is wrong.

1) I worked for National Center for Health Statistics for 20 years. I got to see on the inside how things worked. It's ugly. It's imperfect. But, by and large, it is overwhelmingly run by people doing the best they can to deliver accurate information in a world where doing so is impossible.

2) The people in the government who actually gather and publish the data have ZERO incentive to make things up. While the elected leaders may have great political incentive to puff numbers that make them look good and bury numbers that make them look bad - their ability to actually do that is extremely limited, (mostly, they can curtail publishing - but even that is within limited scope.)

3) The people who work at the BLS and DOL and CDC, etc., are overwhelmingly career people who have done the same jobs under vastly different administrations - and expect to continue doing so years after the current administration people are long gone. Also, Federal workers have a strong union, which makes it extremely difficult for elected officials to get rid of the people actually doing the work.

4) In practically every case where there are PRIVATE efforts to duplicate Federal statistics - the results end up being so similar that they end up confirming the Federal efforts. Gallup employment polling while not identical - ended up producing exactly the same trend lines that BLS data produced. ADP monthly net jobs reports end up showing the same employment trends that the BLS NFP reports show.

5) *ALL* of the major Federal statistical report releases include very detailed and complex explanations of methodologies - including limitations, margins or errors, data gathering limitations, etc. Compared to most private press releases (where proprietary methods are sacrosanct and secret), the Feds are phenomenally transparent - which makes CHANGING anything extremely obvious - (and in fact, the Feds report changes to methodology whenever they do).

It's not like the government was publishing news of how great the economy was in 1982 or 2008.

Even today - with a President screaming at the top of his lungs about the evil "Deep State" - every economic report for the past year has been nothing but sunshine and rainbows.

But - mostly - the thing that annoys me most about the data conspiracy theorists is that in order to believe that all of the government data is "lies" - one has to believe the government has managed to keep the lying a complete secret for decades - and nobody ever leaks anything.

MY reality? There are LIMITATIONS to data gathering. So, all data gathered is imperfect. So, it's silly to think that any of the numbers are "perfect". They are all "best we can do" efforts. And that is as true for all government reports as it is for data reported by the NAR or Wall Street (who actually have a vastly greater incentive to lie than the government).

LBD said...

Data is only the quality of the input, all data is suspect as to the quality. The art of reading the tea leaves is past history that can only show movement. The worst and most useless IMO is confidence survey. Data is not my gig and never has been, Consumer reports of cars has most of the time been in the ditch. Especially when clone cars varied by wide margins. Data just like cooked news when presented has flaws. Funny how I came to the conclusion that Syria is about pipelines years ago and I finally heard a mentions last week of this. Most everyone has not got a clue as to what is going on and why Russia is so involved. So in the end believe what you see or believe what you think. IMO.

Forgot, when China consumer is worn out don't forget India is getting hot now. Then there is the rest of Asia and China's investment in Africa is going well. I mentioned India a very long time ago on CR. Future counts more the data history. IMO.

Elizabeth Merceret said...

I favor India, as I've really liked my Indian clients, and they are very attractive people.

Elizabeth Merceret said...

Also very smart.

LBD said...

India seems to still have the lock on the door but Walmart just bought into India. Mahindra and Tata are here in the US, more coming. India being an English colony has a leg up with language and they have chased education long before the Chinese opened up to the rest of the world. Thanks Dick Nixon! =:o>

Firemane said...

I'm not 100% clear on why India is growing (economically) so much slower than China ... but I suspect it is related to major cultural differences.

India has the remnants of the old caste system baked into the cultural consciousness. I suspect it is as hard (or harder) to undo that base than it is to repair the American damage of slavery and 100 years of a similar treatment of blacks specifically. They also have on-going major religious differences influencing the politics.

I think China has an easier time of getting the masses onto a single page - based both on culture and on economic model and government system.

I do agree with the concept that over time, India should also overtake the US economically. Long term between India and China, I can see the arguments on either side - (beta vs. VHS?) - but my sense is if India ever wins - it'll be a come-from-behind victory - likely long after I'm dead.


Elizabeth Merceret said...

I am being totally invaded by turtles. 🐢🐢🐢🐢🐢🐢🐢. They are digging big ml holes in the flower garden out front. One isn't supposed to molest them. Why there? There is lots of room.

Elizabeth Merceret said...

I think they will get quite both get quite sick if if they don't fix their pollution problem.

Firemane said...

Actually, concerns about the environment may be one of the things holding India back (relative to China). I've read bits here and there that part of the reason India isn't exploiting its natural resources more aggressively is specifically due to environmental concerns. China has "largely" been "we'll deal with that later."

That said, China, even while churning out coal plants faster than Tesla builds cars, is ALSO a world leader in developing green technologies (especially solar). They're aware of the problem and taking steps to address it ... but they don't appear to be willing to slow down their development in that process.

Of course, the US had similar smog problems in lots of places, but thanks to a spate of environmental government regulations, we turned the tide. The Chinese are well aware of our history. It's just a matter of when they actually show signs of being willing to dial back the economic expansion a bit.

LBD said...

Good Morning!

We legislated pollution out of the country more then we addressed it. We also raised labor costs and subsidize income with credit to a higher level. Works till the consumer becomes tapped out. Fun times ahead IMO. The powers of any country will grow as fast as the people will tolerate it and how much profit they can make. India has problems just like any emerging country. That is why the manufacturing will go to the lowest bidder.

Firemane said...

Sometimes, when I start questioning my Full Employment theory, a story appears that convinces me I'm right.

https://www.usatoday.com/story/news/nation/2018/05/24/michael-rotondo-30-evicted-parents-explains-why-he-has-no-job/639948002/

The 30-year old man whose parents had to legally evict him because he refused to get a job. The quote from him is priceless:

"I was an excellent father," Rotondo claimed, saying he had taken his child fishing and skiing. "I was a great father, and [the child] needed me in their life.

"That's why I'm not the CEO of a big company," he added. "That's why I'm living with my parents still."

My interpretation of 4% unemployment is that 96% of people willing to look for jobs already have them. So, that 4% is predominantly the bottom 4% of the existing labor pool. Think of ANY subset of people and consider the quality within that subset compared to the whole.

Now - imagine you were in a position where you HAD to accept the services of the following people - knowing that they are drawn from the bottom 4% of their profession:

Doctor
Plumber
Auto-Mechanic
Brain Surgeon
Accountant
Financial Advisor
Waitress
Cashier

Obviously, some of these choices are going to make you more nervous than others. But, what are the odds you're going to be thrilled with the results? And what is your bet on the continued growth of the national economy if it DEPENDS on the worst 4% of these people getting jobs?





LBD said...

That is where we differ. If you had to sing for your diner you probably would have a completely differ attitude. Free loaders need to be part of the employable group. To late tech is coming!

Rob Dawg said...

Praise be! A new post!

Rubygoat said...

Looking for signs of irrational exuberance Real Estate Investment Advisers is putting on a conference hosted by Tony Robbins and Pitbull.