Here is a link to a radio interview with the author of "Urban Meltdown". Clive Doucet is a city of Ottawa (Canada) Councilor, and advocate for livable cities.
Doucet claims many American cities have become disfunctional. People are fleeing them like New Orleans after Katrina. Part of the problem is federal tax grabs, while cities deliver 80 percent of the services to 80 percent of the population.
The whole municipal model depends entirely on growth, and borrowing against future growth. When the big building fiasco stopped, cities begin to crumble. Hospital, schools and pools close down, from Philadelphia to Phoenix.
This 28 minute piece is from the Radio Ecoshock Show, broadcast on 16 college and community stations, plus Green 960 AM in San Francisco on Sunday nights.
It's possible the blog can Democratic the Internet, and assuredly they have enabled many a high quality analysis to be read....but the problem is the majority still watch Cable News and MSM.
Let's face it to dig into many of these issues takes a lot of time and the working poor America just plain doesn't have it.
That's astounding they gave him a column, progress to be certain.
is what shut down that other site I was so prolific on.
-------------------------------------
Executive compensation is inversely proportional to morality and ethics.
Nope, they don't realize it and let us remember that the only people who SERIOUSLY protested the Iraqi war with a day of protest was the Longshoremen's Union (at least on the West Coast).
I tried, over a several year period, to get a local union (which included IT types) to do more than hold signs and protest occasionally, but it was a complete lost cause.
Since I've been actively protesting against the offshoring of jobs - dating back to 1979 or thereabouts - since Congress passed the legislation giving corporations tax breaks for laying off American workers and shipping their jobs overseas - I've personally given up.
I recall just prior to Reagan being elected, I addressed a PATCO meeting (air traffic controllers union) and warned them if they supported Reagan (which they did!) they would soon be losing their jobs....little did I realize how soon I would be proven right!
Americans had a chance, back in 2000, to right things by electing Ralph Nader. It would have meant several years of pain, while the Plutocrats waged economic war against the rest of us, but then things would have gotten back on track and been grand!
Instead, things will be getting ever more terrible for many decades to come because --- remember, they still haven't put in place any financial regulation to halt this ongoing meltdown (re: continued transfer of wealth to the super-rich). Speculation on derivatives, anyone???
With all due respect, Bruce, but I don't think your last paragraph is particularly correct. Actually let me correct myself here also, because really I'm focusing on that first sentence of that last paragraph. Economics has been trying to explain cause and effects of the decisions people make and the costs associated with them.
Regarding efficient market theory, that is not held by the majority of those that follow prices, at most its half. What is being sought is price discovery, prices are shown but do they reflect the true nature of the situation? At best, someone offers a bid or ask on the information they've digested. But to assume the price you see is the correctly valued one, takes into consideration that all the market participants have accounted for all available information equally. History has proven otherwise.
I'm not an adherent of efficient market theory because the primary element behind prices are human beings. Human beings are fallible, and in this light, one must realize that one will not get all the information or even comprehended correctly. They say that computers have taken care of this problem, but it is humans who develop these programs. The only ones I have come across who, though not entirely, as orthodox efficient price adherents have been technicians (chart followers) and those who subscribe to Burton Malkiel's Random Walk theory.
Certainly there is no hard and fast number that fits everybody. And I know of people personally that are nearing the $200K upside down.... with property values still in decline.
So lets take some more realistic numbers. To qualify for an conventional FHA you had to be $417K or less. So lets work right on the margin ... and in CA that was easy to do.
At $417,000 x .20 ..... if somebody was only 20% underwater (and not 50%) they would be down by $83,400.
That would be the break even point for the bank ... to give these borrowers equity it would have to be more ... $100K? Who knows ...
Right now we are pricing homes based, not on the value of the property, but on the mortgage hanging over that property, or the income to debt ratio of the borrower.
Would a bank be interested in $1,250 max.... and write off $83,400 to get it? Regardless of the inventory sitting on their books the numbers don't add up for them to change their behavior.
I didn't see that these were seriously distressed, so better to kick 'em to the curb as motivator but is this really true considering the foreclosed inventory?
you hear that? It's the demographics clock. It's ticking away, Europe edging closer to becoming a land of green pastures where industry once stood, with their mass transit system shuttling the two dominant groups around....the natives now mainly senior citizens and their immigrant caretakers from places like Turkey or Algeria. You don't even want to figure out how the whole thing is being paid for by that point!
In order to give these borrowers some equity ... lets throw out some raw numbers.
The bank has to forgive $200,000.00 in mortgage loans to keep these borrowers in their home. Let's see ... $200K vs. $1.25K.
To induce mortgage lenders to participate, the Treasury is offering lenders a $500 cash incentive for each second loan they modify and additional payments of $250 a year for three years if the borrower stays current. The Treasury will also share the lenders’ cost of reducing the monthly payments.
It remains unclear whether mortgage companies will be attracted to the new offer.
Banks are whores ... but they are not cheap whores. The people can be bought with a few shiny bobbles and trinkets and celebrate their new found wealth .... The banks, after TARP, are going to be reluctant to go into a joint venture with Big Brother.
Sell your soul for a lousy $1250.00 MAX? They will turn their nose up at this paltry offering.
I know over at Open left, Obamamania has left the stage. I just wonder what is going to happen to all of those crazed to the point of insanity Obamamaniacs as reality continues to kick in.
Boy, if this is ever an argument against sales, marketing, imaging, etc. tactics in political campaigns I don't know what is.
I'm not saying McCain was better, assuredly he was worse, but I am referring to the primary season.
Although we didn't have a single candidate running who truly had good policies across the board either from the get go.
Still....it assuredly was the primary season where people should have been demanding real policy change in my view.
Sorry I just am kind of pissed that so many didn't read the policy details or believe the evidence instead of the hype.
I know maybe this snide remark doesn't seem relevant but to me it is.....they came up with all of these debt laden, bubble economies to hide the fact all of these middle classes are being labor arbitraged and losing their wealth.
i.e. Race to the Bottom. and still they are not addressing this fundamental problem that people, their incomes, their ability to earn a living should not be up for swapping, i.e. for trade in order to the benefits of trade to be realized.
No, the idea is to get more people aware of actual policy, economic events, understand what is really going on so we can more people demanding policy that actually works for the national interest.
We sure as shit do not have that now.
And to get more people participating, thinking about economics, reasoning it out, learning, writing about it...
That's why I said when one sees someone who is intelligent, logical, analytic, concerned about economic policy to invite them over.
EP is the only community blog in existence for economics.
In terms of this site turning a profit....ha ha ha....
economics isn't exactly sexy and all economics blogs doesn't generate the traffic numbers to turn a "profit" a few might generate one person's income but it sure isn't any gold mine.
If that happened an EP became a top economics blog, I have software mechanisms to distribute the income of the site to the contributors.
But right now, like I said, it's just a little money to help pay for the server and it doesn't cover those costs, much less paying me at all and that's assuming even minimum wage to maintain the site.
If I wanted to generate a blogging income site....I would do
something with free porn and "entertainment" news...
now that would generate some serious hits. (maybe I should do this as a side business!)...
but economics related blog? What's wrong with that business model! ;)
is that most of the mortgage servicers: JP Morgan Chase, BofA, Citi and Wells Fargo are also the second lien holders. They will benefit the most from this plan.
With 20% of home mortgages underwater, I would guess that most of these second mortgages are worthless. So, why provide an incentative/more money to a mortgage servicer and second lien holder for something that is worthless.
If there is a "distressed mortgage" the second should be wiped out. I don't have any stats but my guess is that most speculators are out of the property at this point. They took their losses and got out to minimize carrying costs. The people who are left are those who anticipated staying in their homes.
"EP gets healthy traffic, we assuredly need more and I hope all promote EP and invite people as you find them..."
Are you trying to run this site at a profit?
-------------------------------------
Executive compensation is inversely proportional to morality and ethics.
Once again, he claimed that CDS data modeled accurate market data. The argument of whether or not using real time market data is valid or not as a general concept is not relevant in this discussion.
CDS data is not isomorphic. That's really want I am saying. There is not an inverse, it is not linear, it is not bounded. That's clear by the parameters, the characteristics of CDS itself, not even going into that much credit default swaps actual values.
A correlation coefficient must have certain properties, number one being a linear relation. That's what i mean by it's not "1:1".
CDSes from everything I have read and I haven't gone mathematical diving into them but by the parameters I am aware of to date, are simply not that relationship.
Therefore, use of CDS values, or 1st order derivatives (i.e. the daily spread), is invalid and an input for a requirement in Copulas by the definition of the Copula theorem itself.
I do not expect most people on EP to be able to read Li's paper and digest what he proposed.
I did it.....because I like to go dumpster diving into various mathematical based research and proofs.
On the other hand, I'm really not interested in arguing with some bizarre philosophy or belief that somehow the = sign is the root of all evil.
One can find plenty of bad math out there, just pull up any corporate lobbyists "research" paper and you can dig it out in no time. But all of this tells me Academia, "research" has become increasingly political and is abandoning the original intent of open, objective scientific method, thorough peer review and debate.
Bad math does not imply all evil lies at some very misunderstood concept, such as what equilibrium actually means.
Again, equilibrium is not the issue I see. It is the correlation coefficient properties and how CDS swaps do not possess those required mathematical properties.
This isn't quite true. Mathematical modeling does come originally from data. One gets a hypothesis, an idea, a "spark" and looks to express that in mathematical terms. One observes a pattern, a suspecision. Mathematical models are also validated against data.
"Natural sciences" I hate to tell you this, use mathematical models in droves. The Human Genome project is just one of those. The patterns of flights of birds.....mathematical models. The pattern of algae in ponds, sea dead zones from too much carbon dioxide....again, mathematical models.
Econometrics is not about "shortcuts". It is about validating current economic theory with mathematical modeling and heavy use of statistics. With the advent of processing power, one can "crunch numbers" to validate, test, disprove, many an economic theory as well as many a mathematical model.
I hope you create an account (upper right) and log in.
Well, I just wish all of the advanced skilled, seriously educated people out there realize what is happening here and finally start protesting and organizing.
Good god, what a bunch of sheep! (although corporations like that quality!)
Here is a link to a radio interview with the author of "Urban Meltdown". Clive Doucet is a city of Ottawa (Canada) Councilor, and advocate for livable cities.
Doucet claims many American cities have become disfunctional. People are fleeing them like New Orleans after Katrina. Part of the problem is federal tax grabs, while cities deliver 80 percent of the services to 80 percent of the population.
The whole municipal model depends entirely on growth, and borrowing against future growth. When the big building fiasco stopped, cities begin to crumble. Hospital, schools and pools close down, from Philadelphia to Phoenix.
This 28 minute piece is from the Radio Ecoshock Show, broadcast on 16 college and community stations, plus Green 960 AM in San Francisco on Sunday nights.
http://www.ecoshock.net/gn960/gn960_090503_Doucet.mp3
No ads, nothing to sell.
Alex Smith
host
Radio Ecoshock
It's possible the blog can Democratic the Internet, and assuredly they have enabled many a high quality analysis to be read....but the problem is the majority still watch Cable News and MSM.
Let's face it to dig into many of these issues takes a lot of time and the working poor America just plain doesn't have it.
That's astounding they gave him a column, progress to be certain.
is what shut down that other site I was so prolific on.
-------------------------------------
Executive compensation is inversely proportional to morality and ethics.
Nope, they don't realize it and let us remember that the only people who SERIOUSLY protested the Iraqi war with a day of protest was the Longshoremen's Union (at least on the West Coast).
I tried, over a several year period, to get a local union (which included IT types) to do more than hold signs and protest occasionally, but it was a complete lost cause.
Since I've been actively protesting against the offshoring of jobs - dating back to 1979 or thereabouts - since Congress passed the legislation giving corporations tax breaks for laying off American workers and shipping their jobs overseas - I've personally given up.
I recall just prior to Reagan being elected, I addressed a PATCO meeting (air traffic controllers union) and warned them if they supported Reagan (which they did!) they would soon be losing their jobs....little did I realize how soon I would be proven right!
Americans had a chance, back in 2000, to right things by electing Ralph Nader. It would have meant several years of pain, while the Plutocrats waged economic war against the rest of us, but then things would have gotten back on track and been grand!
Instead, things will be getting ever more terrible for many decades to come because --- remember, they still haven't put in place any financial regulation to halt this ongoing meltdown (re: continued transfer of wealth to the super-rich). Speculation on derivatives, anyone???
With all due respect, Bruce, but I don't think your last paragraph is particularly correct. Actually let me correct myself here also, because really I'm focusing on that first sentence of that last paragraph. Economics has been trying to explain cause and effects of the decisions people make and the costs associated with them.
Regarding efficient market theory, that is not held by the majority of those that follow prices, at most its half. What is being sought is price discovery, prices are shown but do they reflect the true nature of the situation? At best, someone offers a bid or ask on the information they've digested. But to assume the price you see is the correctly valued one, takes into consideration that all the market participants have accounted for all available information equally. History has proven otherwise.
I'm not an adherent of efficient market theory because the primary element behind prices are human beings. Human beings are fallible, and in this light, one must realize that one will not get all the information or even comprehended correctly. They say that computers have taken care of this problem, but it is humans who develop these programs. The only ones I have come across who, though not entirely, as orthodox efficient price adherents have been technicians (chart followers) and those who subscribe to Burton Malkiel's Random Walk theory.
Certainly there is no hard and fast number that fits everybody. And I know of people personally that are nearing the $200K upside down.... with property values still in decline.
So lets take some more realistic numbers. To qualify for an conventional FHA you had to be $417K or less. So lets work right on the margin ... and in CA that was easy to do.
At $417,000 x .20 ..... if somebody was only 20% underwater (and not 50%) they would be down by $83,400.
That would be the break even point for the bank ... to give these borrowers equity it would have to be more ... $100K? Who knows ...
Right now we are pricing homes based, not on the value of the property, but on the mortgage hanging over that property, or the income to debt ratio of the borrower.
Would a bank be interested in $1,250 max.... and write off $83,400 to get it? Regardless of the inventory sitting on their books the numbers don't add up for them to change their behavior.
It has always been about class warfare.
I didn't see that these were seriously distressed, so better to kick 'em to the curb as motivator but is this really true considering the foreclosed inventory?
you hear that? It's the demographics clock. It's ticking away, Europe edging closer to becoming a land of green pastures where industry once stood, with their mass transit system shuttling the two dominant groups around....the natives now mainly senior citizens and their immigrant caretakers from places like Turkey or Algeria. You don't even want to figure out how the whole thing is being paid for by that point!
You forgot the other side of the calculation.
In order to give these borrowers some equity ... lets throw out some raw numbers.
The bank has to forgive $200,000.00 in mortgage loans to keep these borrowers in their home. Let's see ... $200K vs. $1.25K.
I think they'll take the asset over the payout.
It has always been about class warfare.
let's say they modify something so they lose say $250/yr in interest from the previous loan. With this they get $1k in profit for term modification.
So, let's multiple that times as many home equity loans that are out there...what is that, 1 million, 20 million?
Potential profits are $1 billion, $20 Billion?
Turns the chump change into yet another wealth transfer if my calculations are correct.
Banks are whores ... but they are not cheap whores. The people can be bought with a few shiny bobbles and trinkets and celebrate their new found wealth .... The banks, after TARP, are going to be reluctant to go into a joint venture with Big Brother.
Sell your soul for a lousy $1250.00 MAX? They will turn their nose up at this paltry offering.
It has always been about class warfare.
Caught this also and wrote it up. Another Gift to Financial Conglomerates.
I know over at Open left, Obamamania has left the stage. I just wonder what is going to happen to all of those crazed to the point of insanity Obamamaniacs as reality continues to kick in.
Boy, if this is ever an argument against sales, marketing, imaging, etc. tactics in political campaigns I don't know what is.
I'm not saying McCain was better, assuredly he was worse, but I am referring to the primary season.
Although we didn't have a single candidate running who truly had good policies across the board either from the get go.
Still....it assuredly was the primary season where people should have been demanding real policy change in my view.
Sorry I just am kind of pissed that so many didn't read the policy details or believe the evidence instead of the hype.
I know maybe this snide remark doesn't seem relevant but to me it is.....they came up with all of these debt laden, bubble economies to hide the fact all of these middle classes are being labor arbitraged and losing their wealth.
i.e. Race to the Bottom. and still they are not addressing this fundamental problem that people, their incomes, their ability to earn a living should not be up for swapping, i.e. for trade in order to the benefits of trade to be realized.
No, the idea is to get more people aware of actual policy, economic events, understand what is really going on so we can more people demanding policy that actually works for the national interest.
We sure as shit do not have that now.
And to get more people participating, thinking about economics, reasoning it out, learning, writing about it...
That's why I said when one sees someone who is intelligent, logical, analytic, concerned about economic policy to invite them over.
EP is the only community blog in existence for economics.
In terms of this site turning a profit....ha ha ha....
economics isn't exactly sexy and all economics blogs doesn't generate the traffic numbers to turn a "profit" a few might generate one person's income but it sure isn't any gold mine.
If that happened an EP became a top economics blog, I have software mechanisms to distribute the income of the site to the contributors.
But right now, like I said, it's just a little money to help pay for the server and it doesn't cover those costs, much less paying me at all and that's assuming even minimum wage to maintain the site.
If I wanted to generate a blogging income site....I would do
something with free porn and "entertainment" news...
now that would generate some serious hits. (maybe I should do this as a side business!)...
but economics related blog? What's wrong with that business model! ;)
is that most of the mortgage servicers: JP Morgan Chase, BofA, Citi and Wells Fargo are also the second lien holders. They will benefit the most from this plan.
With 20% of home mortgages underwater, I would guess that most of these second mortgages are worthless. So, why provide an incentative/more money to a mortgage servicer and second lien holder for something that is worthless.
If there is a "distressed mortgage" the second should be wiped out. I don't have any stats but my guess is that most speculators are out of the property at this point. They took their losses and got out to minimize carrying costs. The people who are left are those who anticipated staying in their homes.
"EP gets healthy traffic, we assuredly need more and I hope all promote EP and invite people as you find them..."
Are you trying to run this site at a profit?
-------------------------------------
Executive compensation is inversely proportional to morality and ethics.
Once again, he claimed that CDS data modeled accurate market data. The argument of whether or not using real time market data is valid or not as a general concept is not relevant in this discussion.
CDS data is not isomorphic. That's really want I am saying. There is not an inverse, it is not linear, it is not bounded. That's clear by the parameters, the characteristics of CDS itself, not even going into that much credit default swaps actual values.
A correlation coefficient must have certain properties, number one being a linear relation. That's what i mean by it's not "1:1".
CDSes from everything I have read and I haven't gone mathematical diving into them but by the parameters I am aware of to date, are simply not that relationship.
Therefore, use of CDS values, or 1st order derivatives (i.e. the daily spread), is invalid and an input for a requirement in Copulas by the definition of the Copula theorem itself.
I do not expect most people on EP to be able to read Li's paper and digest what he proposed.
I did it.....because I like to go dumpster diving into various mathematical based research and proofs.
On the other hand, I'm really not interested in arguing with some bizarre philosophy or belief that somehow the = sign is the root of all evil.
One can find plenty of bad math out there, just pull up any corporate lobbyists "research" paper and you can dig it out in no time. But all of this tells me Academia, "research" has become increasingly political and is abandoning the original intent of open, objective scientific method, thorough peer review and debate.
Bad math does not imply all evil lies at some very misunderstood concept, such as what equilibrium actually means.
Again, equilibrium is not the issue I see. It is the correlation coefficient properties and how CDS swaps do not possess those required mathematical properties.
This isn't quite true. Mathematical modeling does come originally from data. One gets a hypothesis, an idea, a "spark" and looks to express that in mathematical terms. One observes a pattern, a suspecision. Mathematical models are also validated against data.
"Natural sciences" I hate to tell you this, use mathematical models in droves. The Human Genome project is just one of those. The patterns of flights of birds.....mathematical models. The pattern of algae in ponds, sea dead zones from too much carbon dioxide....again, mathematical models.
Econometrics is not about "shortcuts". It is about validating current economic theory with mathematical modeling and heavy use of statistics. With the advent of processing power, one can "crunch numbers" to validate, test, disprove, many an economic theory as well as many a mathematical model.
LOL
I hope you create an account (upper right) and log in.
Well, I just wish all of the advanced skilled, seriously educated people out there realize what is happening here and finally start protesting and organizing.
Good god, what a bunch of sheep! (although corporations like that quality!)
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