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Regarding the housing numbers, Bernanke is printing $85B per month to buy mortgage-backed securities as part of Operation Twist/QE3. He's pumping the bubble bac

by temphn 14y ago

Regarding the housing numbers, Bernanke is printing $85B per month to buy mortgage-backed securities as part of Operation Twist/QE3. He's pumping the bubble back up; feels good now but the final pop is going to really hurt. http://qz.com/14060/qe3-is-forcing-banks-to-lend-and-its-working It’s never been so profitable for US banks to give mortgages. Yet they’ve almost never been so reluctant to do it. So now, the Fed is forcing them. Much has been written about the Fed’s announcement of its latest effort to support the US economy with a new round of money creation and mortgage-bond buying—QE3—on Sep. 13. But few have recognized that it amounted to a shot across the bow of some of the biggest financial institutions in the country. Here’s why. The Fed is aiming its unlimited buying power (since it can literally create money) at the market for mortgage-backed securities (MBS), the pools of mortgages where nearly all American home loans eventually end up. And the one of the largest holders of these MBS are the banks. Speaking of rails, California is still building a $68 billion train to nowhere. The state will still declare bankruptcy within years, Prop. 30 or no Prop 30. Most of the people entering CA are not YC founders, but rather high school dropouts, and most of the people and companies leaving are net taxpayers. Further taxes will only increase this exodus. All of Prop 30's projected revenue is based on the fallacious idea that smart, high-earning people are stationary targets. They will leave, just as many companies have left. http://money.cnn.com/2011/06/28/news/economy/California_companies/index.htm http://money.cnn.com/2011/06/28/news/economy/California_comp...

melling 14y ago
I thought the train was going between LA and SF? Seems like an ideal distance (350miles/550km) to build a bullet train, right? It's a lot of money and it'll be completed about the time Japan finishes it's 300mph (500kph) maglev, but considering how long it takes to get things done in the US, I guess people should be happy for now. Someday, SF to LA will be about 1hr. http://www.bbc.co.uk/newsround/20512131 http://www.bbc.co.uk/newsround/20512131
- temphn 14y ago
  The train will never connect LA and SF. http://www.nytimes.com/2011/11/27/us/california-rail-project-advances-amid-cries-of-boondoggle.html?pagewanted=all The first phase would be a 130-mile stretch from Bakersfield to just south of Chowchilla in central California, at a cost of just over $6 billion; of that, $2.6 billion would come from a $9 billion high-speed rail bond passed by California voters in 2008, and $3.5 billion from federal stimulus money. ... The authority said it chose the relatively remote section in the Central Valley as the first leg to be built, even though few people there are looking to use a railroad, so that construction could begin next year and meet deadlines for using federal money. But critics suggest that the real motivation was to get the spur in place, calculating that future legislatures would not be able to abandon the project before it reached major population centers. “What they are hoping is that this will be to high-speed rail what Vietnam was to foreign policy: that once you’re in there, you have to get in deeper,” said Richard White, a professor of history at Stanford University. “The most logical outcome to me is we are going to have a white elephant in the San Joaquin Valley.” There is no plan on how to finance the project once the bond and federal money is exhausted, beyond a hope of private investment and public money during flusher times. ... Beyond that, several experts suggested that the train would never attract the promised ridership, in no small part because unlike, say, the Amtrak Northeast Corridor, the bullet train would go into cities that do not have particularly extensive public transit networks, forcing people to rent cars once they arrived. Low ridership would undercut the economic and environmental benefits that are part of the argument for the project.
  - melling 14y ago
    What will it connect after all $68 billion dollars is spent? Don't millions of people already fly between LA and SF? HSR is 50 year old technology that has been proven to work in several countrues. People in CA seem hell bent on building more roads. One of the main excuses why it won't work seems to be because no one thought it was important to build better mass transit. Btw, I was in SF last summer. BART and the trolley seemed sufficient.
    - rprasad 14y ago
muzz 14y ago
> Further taxes will only increase this exodus. All of Prop 30's projected revenue is based on the fallacious idea that smart, high-earning people are stationary targets. They will leave, just as many companies have left. The fallacy is that will be an exodus of high-earners: http://www.cnbc.com/id/49884352/Super_Rich_Flight_From_California_Not_So_Fast http://www.cnbc.com/id/49884352/Super_Rich_Flight_From_Calif... The assumption is that those earners can produce the same income anywhere they go. While that appeals to Randian ideals, it's simply not the case in reality.
- temphn 14y ago
  This is like Oracle thinking they can raise the price of something forever due to lock-in. That is true until it suddenly isn't. The wealthy of CA are particularly mobile as movies and software require no natural resources. All you need is a few people to start defecting. Is it really "Randian" to believe that people will increasingly use the internet/cloud/telecommuting/Skype/Anybots to work remotely?
  - muzz 14y ago
    No, it's nothing like that at all. It would be foolish to assume that all locations are equivalent when it comes to generating income. The differences in different areas far exceed a 1.3 increase in tax rate.
- deleted 14y ago
  [deleted]

by temphn 14y ago

melling 14y ago

I thought the train was going between LA and SF? Seems like an ideal distance (350miles/550km) to build a bullet train, right? It's a lot of money and it'll be completed about the time Japan finishes it's 300mph (500kph) maglev, but considering how long it takes to get things done in the US, I guess people should be happy for now. Someday, SF to LA will be about 1hr. http://www.bbc.co.uk/newsround/20512131 http://www.bbc.co.uk/newsround/20512131

temphn 14y ago
The train will never connect LA and SF. http://www.nytimes.com/2011/11/27/us/california-rail-project-advances-amid-cries-of-boondoggle.html?pagewanted=all The first phase would be a 130-mile stretch from Bakersfield to just south of Chowchilla in central California, at a cost of just over $6 billion; of that, $2.6 billion would come from a $9 billion high-speed rail bond passed by California voters in 2008, and $3.5 billion from federal stimulus money. ... The authority said it chose the relatively remote section in the Central Valley as the first leg to be built, even though few people there are looking to use a railroad, so that construction could begin next year and meet deadlines for using federal money. But critics suggest that the real motivation was to get the spur in place, calculating that future legislatures would not be able to abandon the project before it reached major population centers. “What they are hoping is that this will be to high-speed rail what Vietnam was to foreign policy: that once you’re in there, you have to get in deeper,” said Richard White, a professor of history at Stanford University. “The most logical outcome to me is we are going to have a white elephant in the San Joaquin Valley.” There is no plan on how to finance the project once the bond and federal money is exhausted, beyond a hope of private investment and public money during flusher times. ... Beyond that, several experts suggested that the train would never attract the promised ridership, in no small part because unlike, say, the Amtrak Northeast Corridor, the bullet train would go into cities that do not have particularly extensive public transit networks, forcing people to rent cars once they arrived. Low ridership would undercut the economic and environmental benefits that are part of the argument for the project.
- melling 14y ago
  What will it connect after all $68 billion dollars is spent? Don't millions of people already fly between LA and SF? HSR is 50 year old technology that has been proven to work in several countrues. People in CA seem hell bent on building more roads. One of the main excuses why it won't work seems to be because no one thought it was important to build better mass transit. Btw, I was in SF last summer. BART and the trolley seemed sufficient.
  - rprasad 14y ago

muzz 14y ago

> Further taxes will only increase this exodus. All of Prop 30's projected revenue is based on the fallacious idea that smart, high-earning people are stationary targets. They will leave, just as many companies have left. The fallacy is that will be an exodus of high-earners: http://www.cnbc.com/id/49884352/Super_Rich_Flight_From_California_Not_So_Fast http://www.cnbc.com/id/49884352/Super_Rich_Flight_From_Calif... The assumption is that those earners can produce the same income anywhere they go. While that appeals to Randian ideals, it's simply not the case in reality.

temphn 14y ago
This is like Oracle thinking they can raise the price of something forever due to lock-in. That is true until it suddenly isn't. The wealthy of CA are particularly mobile as movies and software require no natural resources. All you need is a few people to start defecting. Is it really "Randian" to believe that people will increasingly use the internet/cloud/telecommuting/Skype/Anybots to work remotely?
- muzz 14y ago
  No, it's nothing like that at all. It would be foolish to assume that all locations are equivalent when it comes to generating income. The differences in different areas far exceed a 1.3 increase in tax rate.
deleted 14y ago
[deleted]