nm505
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Yup...the way things are going. More energy efficient is the future.
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Global Economy Bursting?
- Thread starter Austin
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Yup...the way things are going. More energy efficient is the future.
Randolph Kinney
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Egan Jones Downgrades USA From AA+ To AA, Outlook Negative
Inflection point - when debt to GDP exceeds 100%, a country's financial flexibility becomes increasingly strained. For the first time since WWII, US debt exceeds 100%. From 2008 to 2010, debt rose a total of 23.6% while GDP rose a total of 1.6%. Unfortunately, with an annual federal budget deficit in the area of $1.4T, debt is likely to reach $16.7T as of the end of 2012 while assuming GDP grows 2.5%, total GDP is likely to reach $15.7T. Therefore, as of the end of 2012, debt to GDP is likely to be in the area of 106%. Assuming the federal deficit for 2013 remains at $1.4T and GDP growth is 2.5%, the total debt will rise to $18.1T and GDP will rise to $16.1T, resulting in debt to GDP of 112%. In comparison, France's and Italy's debt to GDP are 81% and 117% respectively. Regarding efforts to address budget problems, the Super Committee was seeking spending cuts of $1.5T over 10 years or merely $150B per year, and was a failure. Obviously, the current course is not enhancing credit quality.
Without some structural changes soon, restoring credit quality will become increasingly difficult. Yields on 10-year treasury notes have fallen to their lowest since early Feb 2010 with US Federal Reserve's aggressive purchases of US Treasuries. A concern is the rise in interest rates placing higher pressure on the US's credit quality. Excess growth of money supply (i.e., debt monetization) harms creditors and ultimately, the economy. Weak debt reduction efforts force a neg. watch.
Inflection point - when debt to GDP exceeds 100%, a country's financial flexibility becomes increasingly strained. For the first time since WWII, US debt exceeds 100%. From 2008 to 2010, debt rose a total of 23.6% while GDP rose a total of 1.6%. Unfortunately, with an annual federal budget deficit in the area of $1.4T, debt is likely to reach $16.7T as of the end of 2012 while assuming GDP grows 2.5%, total GDP is likely to reach $15.7T. Therefore, as of the end of 2012, debt to GDP is likely to be in the area of 106%. Assuming the federal deficit for 2013 remains at $1.4T and GDP growth is 2.5%, the total debt will rise to $18.1T and GDP will rise to $16.1T, resulting in debt to GDP of 112%. In comparison, France's and Italy's debt to GDP are 81% and 117% respectively. Regarding efforts to address budget problems, the Super Committee was seeking spending cuts of $1.5T over 10 years or merely $150B per year, and was a failure. Obviously, the current course is not enhancing credit quality.
Without some structural changes soon, restoring credit quality will become increasingly difficult. Yields on 10-year treasury notes have fallen to their lowest since early Feb 2010 with US Federal Reserve's aggressive purchases of US Treasuries. A concern is the rise in interest rates placing higher pressure on the US's credit quality. Excess growth of money supply (i.e., debt monetization) harms creditors and ultimately, the economy. Weak debt reduction efforts force a neg. watch.
Randolph Kinney
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'Massive Wealth Destruction' Is About to Hit Investors
http://www.cnbc.com/id/46923999
Runaway government debts have triggered uncontrolled money printing that in turn will lead to inflation that will decimate portfolios, according to the latest forecast from "Dr. Doom" Marc Faber.
Investors, particularly those in the "well-to-do" category, could lose about half their total wealth in the next few years as the consequences pile up from global government debt problems, Faber, the author of the Gloom Boom & Doom Report, said on CNBC.
Efforts to stem the debt problems have seen the Federal Reserve expand its balance sheet to nearly $3 trillion and other central banks implement aggressive liquidity programs as well, which Faber sees producing devastating inflation as well as other consequences.
"Somewhere down the line we will have a massive wealth destruction that usually happens either through very high inflation or through social unrest or through war or credit market collapse," he said. "Maybe all of it will happen, but at different times."
http://www.cnbc.com/id/46923999
Runaway government debts have triggered uncontrolled money printing that in turn will lead to inflation that will decimate portfolios, according to the latest forecast from "Dr. Doom" Marc Faber.
Investors, particularly those in the "well-to-do" category, could lose about half their total wealth in the next few years as the consequences pile up from global government debt problems, Faber, the author of the Gloom Boom & Doom Report, said on CNBC.
Efforts to stem the debt problems have seen the Federal Reserve expand its balance sheet to nearly $3 trillion and other central banks implement aggressive liquidity programs as well, which Faber sees producing devastating inflation as well as other consequences.
"Somewhere down the line we will have a massive wealth destruction that usually happens either through very high inflation or through social unrest or through war or credit market collapse," he said. "Maybe all of it will happen, but at different times."
Randolph Kinney
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California Declares War on Suburbia
http://online.wsj.com/article/SB10001424052702303302504577323353434618474.html
Planners want to herd millions into densely packed urban corridors. It won't save the planet but will make traffic even worse.
It's no secret that California's regulatory and tax climate is driving business investment to other states. California's high cost of living also is driving people away. Since 2000 more than 1.6 million people have fled, and my own research as well as that of others points to high housing prices as the principal factor.
The exodus is likely to accelerate. California has declared war on the most popular housing choice, the single family, detached home—all in the name of saving the planet.
Metropolitan area governments are adopting plans that would require most new housing to be built at 20 or more to the acre, which is at least five times the traditional quarter acre per house. State and regional planners also seek to radically restructure urban areas, forcing much of the new hyperdensity development into narrowly confined corridors.
In San Francisco and San Jose, for example, the Association of Bay Area Governments has proposed that only 3% of new housing built by 2035 would be allowed on or beyond the "urban fringe"—where current housing ends and the countryside begins. Over two-thirds of the housing for the projected two million new residents in these metro areas would be multifamily—that is, apartments and condo complexes—and concentrated along major thoroughfares such as Telegraph Avenue in the East Bay and El Camino Real on the Peninsula.
For its part, the Southern California Association of Governments wants to require more than one-half of the new housing in Los Angeles County and five other Southern California counties to be concentrated in dense, so-called transit villages, with much of it at an even higher 30 or more units per acre.
To understand how dramatic a change this would be, consider that if the planners have their way, 68% of new housing in Southern California by 2035 would be condos and apartment complexes. This contrasts with Census Bureau data showing that single-family, detached homes represented more than 80% of the increase in the region's housing stock between 2000 and 2010.
The campaign against suburbia is the result of laws passed in 2006 (the Global Warming Solutions Act) to reduce greenhouse gas emissions and in 2008 (the Sustainable Communities and Climate Protection Act) on urban planning. The latter law, as the Los Angeles Times aptly characterized it, was intended to "control suburban sprawl, build homes closer to downtown and reduce commuter driving, thus decreasing climate-changing greenhouse gas emissions." In short, to discourage automobile use.
If the planners have their way, the state's famously unaffordable housing could become even more unaffordable.
The love affair urban planners have for a future ruled by mass transit will be obscenely expensive and would not reduce traffic congestion. In San Diego, for example, an expanded bus and rail transit system is planned to receive more than half of the $48.4 billion in total highway and transit spending through 2050. Yet transit would increase its share of travel to a measly 4% from its current tiny 2%, according to data in the San Diego Association of Governments regional transportation plan. This slight increase in mass transit ridership would be swamped by higher traffic volumes.
Higher population densities in the future means greater traffic congestion, because additional households in the future will continue to use their cars for most trips. In the San Diego metropolitan area, where the average one-way work trip travel time is 28 minutes, only 14% of work and higher education locations could be reached within 30 minutes by transit in 2050. But 70% or more of such locations will continue to be accessible in 30 minutes by car.
Rather than protest the extravagance, California Attorney General Kamala D. Harris instead has sued San Diego because she thinks transit was not favored enough in the plan and thereby violates the legislative planning requirements enacted in 2006 and 2008. Her predecessor (Jerry Brown, who is now the governor) similarly sued San Bernardino County in 2007.
Ali Modarres of the Edmund G. "Pat" Brown Institute of Public Affairs at California State University, Los Angeles has shown that a disproportionate share of migrating households are young. This is at least in part because it is better to raise children with backyards than on condominium balconies. A less affordable California, with less attractive housing, could disadvantage the state as much as its already destructive policies toward business.
http://online.wsj.com/article/SB10001424052702303302504577323353434618474.html
Planners want to herd millions into densely packed urban corridors. It won't save the planet but will make traffic even worse.
It's no secret that California's regulatory and tax climate is driving business investment to other states. California's high cost of living also is driving people away. Since 2000 more than 1.6 million people have fled, and my own research as well as that of others points to high housing prices as the principal factor.
The exodus is likely to accelerate. California has declared war on the most popular housing choice, the single family, detached home—all in the name of saving the planet.
Metropolitan area governments are adopting plans that would require most new housing to be built at 20 or more to the acre, which is at least five times the traditional quarter acre per house. State and regional planners also seek to radically restructure urban areas, forcing much of the new hyperdensity development into narrowly confined corridors.
In San Francisco and San Jose, for example, the Association of Bay Area Governments has proposed that only 3% of new housing built by 2035 would be allowed on or beyond the "urban fringe"—where current housing ends and the countryside begins. Over two-thirds of the housing for the projected two million new residents in these metro areas would be multifamily—that is, apartments and condo complexes—and concentrated along major thoroughfares such as Telegraph Avenue in the East Bay and El Camino Real on the Peninsula.
For its part, the Southern California Association of Governments wants to require more than one-half of the new housing in Los Angeles County and five other Southern California counties to be concentrated in dense, so-called transit villages, with much of it at an even higher 30 or more units per acre.
To understand how dramatic a change this would be, consider that if the planners have their way, 68% of new housing in Southern California by 2035 would be condos and apartment complexes. This contrasts with Census Bureau data showing that single-family, detached homes represented more than 80% of the increase in the region's housing stock between 2000 and 2010.
The campaign against suburbia is the result of laws passed in 2006 (the Global Warming Solutions Act) to reduce greenhouse gas emissions and in 2008 (the Sustainable Communities and Climate Protection Act) on urban planning. The latter law, as the Los Angeles Times aptly characterized it, was intended to "control suburban sprawl, build homes closer to downtown and reduce commuter driving, thus decreasing climate-changing greenhouse gas emissions." In short, to discourage automobile use.
If the planners have their way, the state's famously unaffordable housing could become even more unaffordable.
The love affair urban planners have for a future ruled by mass transit will be obscenely expensive and would not reduce traffic congestion. In San Diego, for example, an expanded bus and rail transit system is planned to receive more than half of the $48.4 billion in total highway and transit spending through 2050. Yet transit would increase its share of travel to a measly 4% from its current tiny 2%, according to data in the San Diego Association of Governments regional transportation plan. This slight increase in mass transit ridership would be swamped by higher traffic volumes.
Higher population densities in the future means greater traffic congestion, because additional households in the future will continue to use their cars for most trips. In the San Diego metropolitan area, where the average one-way work trip travel time is 28 minutes, only 14% of work and higher education locations could be reached within 30 minutes by transit in 2050. But 70% or more of such locations will continue to be accessible in 30 minutes by car.
Rather than protest the extravagance, California Attorney General Kamala D. Harris instead has sued San Diego because she thinks transit was not favored enough in the plan and thereby violates the legislative planning requirements enacted in 2006 and 2008. Her predecessor (Jerry Brown, who is now the governor) similarly sued San Bernardino County in 2007.
Ali Modarres of the Edmund G. "Pat" Brown Institute of Public Affairs at California State University, Los Angeles has shown that a disproportionate share of migrating households are young. This is at least in part because it is better to raise children with backyards than on condominium balconies. A less affordable California, with less attractive housing, could disadvantage the state as much as its already destructive policies toward business.
Terrel L. Shields
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California is a great place to pack homes together...
[url]http://www.plosone.org/article/info%3Adoi%2F10.1371%2Fjournal.pone.0033954[/URL]
Randolph Kinney
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The suffocation of unsustainable debt
If we look at our own debt, it has gone from roughly $6 trillion in 2000 to a stunning $15.2 trillion in the beginning of 2012. At some point people will collectively begin waking up and realize none of this debt will be paid back. Not exactly a pleasant realization.
QE3 must be around the corner as unemployment levels stagnate or worsen. Wages are not keeping pace with inflation. Money and debt creation is feeding into the banks who use it to leverage themselves to buy derivatives to hedge their assets. A bubble has formed in the U.S. Treasury debt market and commodities, all hedged by 100's of trillion of dollars of derivatives.
The rubber band has been stretched ever tighter.
If we look at our own debt, it has gone from roughly $6 trillion in 2000 to a stunning $15.2 trillion in the beginning of 2012. At some point people will collectively begin waking up and realize none of this debt will be paid back. Not exactly a pleasant realization.
QE3 must be around the corner as unemployment levels stagnate or worsen. Wages are not keeping pace with inflation. Money and debt creation is feeding into the banks who use it to leverage themselves to buy derivatives to hedge their assets. A bubble has formed in the U.S. Treasury debt market and commodities, all hedged by 100's of trillion of dollars of derivatives.
The rubber band has been stretched ever tighter.
Randolph Kinney
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California teachers' pension plan shortfall grows
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/04/09/BUDF1O0U4E.DTL
The California State Teachers' Retirement System, the second-biggest U.S. public pension, said the gap between its assets and projected obligations rose $8.5 billion as investment gains failed to cover previous losses.
The unfunded liability climbed 13 percent to $64.5 billion as of June 30, according to a report from actuaries released Monday. The system had about 69 percent of assets needed to cover promises to current and future retirees at the end of fiscal 2011, down from about 71 percent a year earlier.
The widening gap may require increased state funding, plan officials have said. Public pensions nationwide had a median of about 75 percent of the funds needed to cover obligations in 2010, according to Bloomberg Rankings data. The California fund's overseers said losses on invested assets in 2008 and 2009 added $12.7 billion to the new deficit figure.
"The projected revenue shortfall is due primarily to investment return experience averaging 5.5 percent per year over the last decade that was significantly less than the long-term actuarial assumption of 7.5 percent," Milliman Inc. consultants said, according to the report.
Teachers pay 8 percent of their income toward retirement. Districts add 8.25 percent, while the state's share is about 2 percent. Contribution rates for teachers and school districts haven't changed since 1990.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/04/09/BUDF1O0U4E.DTL
The California State Teachers' Retirement System, the second-biggest U.S. public pension, said the gap between its assets and projected obligations rose $8.5 billion as investment gains failed to cover previous losses.
The unfunded liability climbed 13 percent to $64.5 billion as of June 30, according to a report from actuaries released Monday. The system had about 69 percent of assets needed to cover promises to current and future retirees at the end of fiscal 2011, down from about 71 percent a year earlier.
The widening gap may require increased state funding, plan officials have said. Public pensions nationwide had a median of about 75 percent of the funds needed to cover obligations in 2010, according to Bloomberg Rankings data. The California fund's overseers said losses on invested assets in 2008 and 2009 added $12.7 billion to the new deficit figure.
"The projected revenue shortfall is due primarily to investment return experience averaging 5.5 percent per year over the last decade that was significantly less than the long-term actuarial assumption of 7.5 percent," Milliman Inc. consultants said, according to the report.
Teachers pay 8 percent of their income toward retirement. Districts add 8.25 percent, while the state's share is about 2 percent. Contribution rates for teachers and school districts haven't changed since 1990.
Randolph Kinney
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Since the state, counties, cities and school districts are all funded by taxes, the taxpayer is providing the money.
The point of the article was taxes will have to be increased because the investment returns are 5.5%, not 7.5%, over the last 10 years. That creates an unfunded liability of $64.5 billion for the next 30 years.
residentialguy
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[URL]http://www.calculatedriskblog.com/2012/04/wells-fargo-on-housing-better-days.html[/URL]
"We expect home prices to definitively bottom by the middle of this year, as the backlog of foreclosures finally begins clear" says a Wells Fargo economist.
Yeah..
"It is important to note that Wells Fargo is forecasting a very weak year for housing - just an increase from the weakest years on record. Their forecast would be the 3rd worst year for new home sales since 1963, only behind the 2011 and 2010 - and about half the median annual sales since 1963."
"We expect home prices to definitively bottom by the middle of this year, as the backlog of foreclosures finally begins clear" says a Wells Fargo economist.
Yeah..
"It is important to note that Wells Fargo is forecasting a very weak year for housing - just an increase from the weakest years on record. Their forecast would be the 3rd worst year for new home sales since 1963, only behind the 2011 and 2010 - and about half the median annual sales since 1963."
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