Mortgage Delinquencies and the Unemployment Rate [feedly]

Mortgage Delinquencies and the Unemployment Rate
http://www.calculatedriskblog.com/2016/08/mortgage-delinquencies-and-unemployment.html

In the press release for the MBA quarterly National Delinquency Survey for Q2, Marina Walsh, MBA's Vice President of Industry Analysis, wrote: 

"The mortgage delinquency rate tracks closely with the nation's improving unemployment rate. In the second quarter of 2016, the mortgage delinquency rate was 4.66 percent, while the unemployment rate was 4.87 percent. By comparison, at its peak in the first quarter of 2010, the delinquency rate was 10.06 percent and the unemployment rate stood at 9.83 percent."

Here is a graph comparing the mortgage delinquency rate and the unemployment rate. The unemployment rate is in Red, the mortgage delinquency rate (excluding in foreclosure) is in Blue, and the combined delinquency and in foreclosure is in Purple.

Click on graph for larger image.

As Ms. Walsh noted, the delinquency rate has pretty much tracked the unemployment rate since the great recession.

In 2002, the mortgage delinquency rate was below the unemployment rate, probably because house prices were rising even as the unemployment rate was still recovering from the 2001 recession.

A huge difference between the great recession and prior periods was the large number of homes in the foreclosure process (Purple is a combination of the mortgage delinquency rate and the percent of homes in foreclosure). 

The combined rate of delinquencies and in foreclosure is now below the combined rate in 2002.  The mix is different (more in the foreclosure process now).   These rates are getting close to normal (foreclosures are still elevated).

 -- via my feedly newsfeed

Re: [socialist-econ] My socialism [feedly]

Really good, pragmatic article with clear steps outlined. In this piece you see the absolute overriding necessity of worker organizing. 

Sent from my iPad

On Aug 10, 2016, at 5:27 PM, John Case <jcase4218@gmail.com> wrote:

My socialism
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2016/08/my-socialism.html

Geoffrey Hodgson poses an old question: what is socialism?

I share his dissatisfaction with Corbyn's definition as a way of living in which "everybody cares for everyone else." For me, socialism is not about being well-meaning busybodies. Rather, the care must be expressed via institutions which meet people's needs whilst treating them with dignity. On this score alone, our welfare state and immigration system fail.

So, can I come up with a better answer to Geoffrey's question? Here's my personal and idiosyncratic take.

First, a caveat. Like Marx, I'm not keen on detailed blueprints. Capitalism did not spring fully-formed from a single great mind, but rather evolved over centuries. The same will be true for socialism. Yes, there's a place for utopian thinking insofar as it reminds us that there are alternatives to the present system, and insofar as they ask us how we might betterembed values into institutions. But they can be a menace if they encourage sectarianism – "my utopia is better than yours" – and make the best the enemy of the good.

Instead, for me, socialism is a set of institutions which reconciles three principles.

First, real freedom. For me, socialism means giving people control to live their lives as they want. A basic income (pdf) and worker democracy are key features here.

Secondly, substantive equality. Rightist cliché-mongers will sneer here that full equality is impossible. But few leftists mean that everyone must have identical incomes, any more than that they must all wear Mao suits. Instead, two possible guidelines are envy-freenessand Rawls' difference principle – that inequalities be acceptable only if they are to the greatest benefit of the least advantaged members of society.

For me, what matters here isn't just inequalities of income, but of power and respect too. For this reason, whilst redistributive taxes are necessary they are far from sufficient. What's also needed (among other things) is an end to the "messiah complex" - our moronicfaith in bosses and leaders. One reason why I doubt that Labour party is an adequate means of achieving socialism is its obsession with leaders' personalities to the detriment of sensible institutional reform.

Thirdly, we must recognise that knowledge and rationality are tightly bounded. For this reason, Geoffrey's right to say that "relatively little can be planned from the top." Markets, therefore, have a big place in socialism – not least because, as Adam Smith said, they are a means whereby people provide for others without caring. (The best counter-argument to this I've seen comes from Matthijs Krul).

This principle has another implication. Socialism should be achieved by evolution, bycreating stepping stones – small institutional tweaks that create the potential for bigger ones. For example, small acts of empowering people – such as worker directors or patients' groups – might create a demand for greater power.

In this context, expansionary macro policy and job guarantees are important in two different ways.

First, economic growth makes people more liberal and tolerant and hence supportive of beneficial change; the notion of some ultra-leftists that recessions create demand for socialism has surely been refuted by history.

Secondly, full employment would greatly undermine capitalist power. In my socialism, awful working conditions such as those at Sports Direct wouldn't exist not because they have been outlawed but because workers have the real freedom – via a basic income and good jobs elsewhere – to reject such conditions. One step to socialism consists in enabling people to follow Johnny Paycheck's example.

Yes, full employment would squeeze profits. But this would, I'd hope, create conditions for more worker ownership. Capitalism might thus wither away.

Now, you might object that all this isn't too far away from Sam Bowman's "neoliberal"manifesto. I couldn't give a toss*. If we are to move towards socialism, we must take as many people with us as a far a possible – although of course there'll come a time when Sam and I prefer different paths.

For me, socialism requires building support for institutional change. It's not about narcissistic sectarianism. As I said, this is an idiosyncratic view.

* It's a lovely paradox that it is now the right rather than the left that wants to abolish (one form of) money.

 -- via my feedly newsfeed

--
You received this message because you are subscribed to the Google Groups "Socialist Economics" group.
To unsubscribe from this group and stop receiving emails from it, send an email to socialist-economics+unsubscribe@googlegroups.com.
To post to this group, send email to socialist-economics@googlegroups.com.
Visit this group at https://groups.google.com/group/socialist-economics.
To view this discussion on the web visit https://groups.google.com/d/msgid/socialist-economics/CADH2idKu7ByTY%2BkkFvnGeuVErfropUZSTD5n%2BTyQLpeUMjq9Xg%40mail.gmail.com.
For more options, visit https://groups.google.com/d/optout.

Albano: Don’t fall for it: Trump’s economic plan a fraud [feedly]

Don't fall for it: Trump's economic plan a fraud
http://peoplesworld.org/don-t-fall-for-it-trump-s-economic-plan-a-fraud/

Republican presidential nominee Donald Trump tried to change the conversation yesterday away from his campaign's self-inflicted wounds of the last two weeks with a major speech on the economy. After attacking the Khans, Gold Star parents who spoke at the Democratic National Convention, and comparing running a business to the sacrifice military families make when they lose a loved one, Trump continued his habit of boldly telling lies and offering nothing but coded America First rhetoric instead of serious proposals that could make a positive impact on the lives of working people -- of all backgrounds, races and ethnicities. In fact-check after fact-check, experts agreed that Trump plays fast and loose with the truth.

In its fact check story, The Associated Press reported, "Donald Trump changed some of his facts to fit his agenda Monday, pitching shades of truth and misconceptions in what was billed as a major economic policy speech." Whether on Hillary Clinton's record as senator from New York, or President Barack Obama's economic record, or on taxes, trade, regulations, infrastructure, the auto industry and jobs, Trump created his own reality show where he calls the shots and packages himself as some savior of workers.

Richard Trumka, president of the AFL-CIO, the nation's largest union federation, unmasked the New York real estate mogul's speech as "deceitful" and "offensive."

Trumka said, "Donald Trump will say he speaks for all Americans, but his all white, all male, Wall Street banker economic team proves his intentions. Trump has chosen to get his real advice from people just like him - people who have made millions off the backs of hardworking families."

After he "has spent his life getting rich by hurting working people. Now he returns to Michigan for an economic speech almost one year to the day after he suggested automakers move production from Michigan to states with lower wages. It's ironic, deceitful, and simply offensive," Trumka said in his Aug. 8 statement.

Trumka was referring to an interview Trump gave to the Detroit News last year, which "notoriously revealed his ideas for assaulting the wages of supposedly overpaid autoworkers by closing and re-locating plants: 'You can go to different parts of the United States and then ultimately you'd do full-circle-you'll come back to Michigan because those guys are going to want their jobs back even if it is less. We can do rotation in the United States-it doesn't have to be in Mexico,'" wrote Tim Libretti in his Feb. 2 story Union workers ... for Trump?.

In his speech yesterday, Trump never mentioned raising the minimum wage or the crucial role of unions and collective bargaining in winning higher wages for America's working people. Instead Trump wrapped Republican establishment economic policies of tax breaks for the wealthy and corporations, as well as deregulation giveaways to auto, Big Oil and Wall Street into his coded-coated divisive brand of populism. Like all good pickpockets, he distracts with fabricated arguments while pinching your wallet.

"Trade has big benefits, and I am in favor of trade. But I want great trade deals for our country that create more jobs and higher wages for American workers. Isolation is not an option, only great and well-crafted trade deals are," he said.

This is the man whose "line of ties is produced in China, and his signature line of menswear is manufactured in Mexico," wrote Libretti, suggesting that Trump be judged by his actions.

"Even as he rails against the Trans-Pacific Partnership, Trump's own behavior undermines U.S. workers by exploiting cheaper labor abroad.

Trump apparently believes that working people cannot spot a con when they see one. On taxes, he figures by inserting the word "workers" or "jobs" that people will be fooled. He promised to repeal the so-called "death tax."

"American workers have paid taxes their whole lives, and they should not be taxed again at death and it's just plain wrong and most people agree with that. We will repeal it," he said.

In reality, the "death tax" is called the "estate tax" because it affects millionaires and billionaires, and in general, workers do not fall into that category of taxpayers.

The New York Times fact check on Trump's speech said, "Only a very few American workers are subject to estate taxes, and those subject to the tax are usually not termed "workers." Under current law, a married couple can shield up to $10.9 million of their estate from any federal taxation."

In an obvious play for working women's attention, Trump also announced a tax deduction for child care costs. The slight of hand here is a tax deduction is not the same as a tax credit and therefore will not be of use for most working families.

"On surface, this sounds like a good idea. Since the cost of daycare can be a huge cost for many families, the plan has the potential to help many Americans. But Trump is proposing a tax deduction, not a tax credit-and that's a problem. A deduction subtracts from a person's taxable income while a credit reduces the amount of taxes a person owes. These tax expenditures, as they are known, are the same as spending but they happen through the tax code. Congress has grown very fond of spending through the tax code; in the last fiscal year, tax expenditures totaled around $1 trillion," writes Politico's Danny Vinik.

Clinton responded to Trump's speech in real time. "His tax plans will give super big tax breaks to large corporations and the really wealthy, just like him and the guys who wrote the speech, right?" she said. "He wants to roll back regulations on Wall Street. He wants to eliminate the Consumer Financial Protection Bureau, which has saved billions of dollars for Americans. He wants to basically just repackage trickle down economics."

Clinton will unveil her own economic program Thursday, also in Detroit, but is expected to emphasize progressive policies based on the Democratic program, including infrastructure investment, debt free college education, $15 an hour minimum wage, union and worker rights and trade deals that create jobs, raise wages and protect the environment.

Photo: Even Trump didn't seem too happy with his speech at the Detroit Economic Club as he left the podium.  |  Evan Vucci/AP

 -- via my feedly newsfeed

West Virginia Budget Back in Deficit Already [feedly]

West Virginia Budget Back in Deficit Already
http://www.wvpolicy.org/west-virginia-budget-back-in-deficit-already?utm_source=feedly&utm_medium=rss&utm_campaign=west-virginia-budget-back-in-deficit-already

WOWK – The devastating floods of 2016 have only added to the budget storm that hovers over West Virginia. After just one month in the new fiscal year, tax revenue in the Mountain State is already down by nearly 33 million dollars. But even without the floods, money troubles were already coming. Read/Watch

"Yes, absolutely. We have a structural revenue problem. They keep making one-time patches to ongoing expenses, and that means we are going to have to put those important priorities up front. And we are going to have to deal with our budget crisis that we are still in," said Ted Boettner, of the WV Center on Budget and Policy.

That means less money available for road repairs, school expansion, and economic development. If the situation gets worse, there may have to be more cuts in state programs:

"It's time for us to look at what we are spending, not just in trying to back fill with more taxes," said State Sen. Ed Gaunch, (R) Kanawha.

Lawmakers did raise the tobacco tax this year; but plans to levy a cell phone tax never got a hearing. Rather than raising taxes, one idea might be to eliminate loopholes and tax breaks.

VISIT WEBSITE
 -- via my feedly newsfeed

MiB: Danny Kahneman on Heuristics, Biases & Cognition [feedly]

MiB: Danny Kahneman on Heuristics, Biases & Cognition
http://ritholtz.com/2016/08/mib-kahneman-heuristics-biases-cognition/

In this week's "Masters in Business" podcast, we chat with Danny Kahneman, professor of behavioral & cognitive psychology, and winner of the 2002 Nobel Price for economics. He is also the author of the highly regarded Thinking Fast & Slow.

In a wide-ranging discussion, Kahneman discusses how he met Amos Tversky, who became his long time research partner. He notes "we" won the Nobel Prize, referring to his sharing of the prize with Tversky, who died prior to the Nobel Prize being awarded (Nobel prizes cannot awarded posthumously).

Kahneman explains how he and Tversky first discovered the heuristics of Representativeness, Availability, and Anchoring. He tells why going first in a negotiation is – contrary to common opinion – a huge negotiating advantage, as the human brain tries to make sense of the number it receives, regardless of how ridiculous it may be.

The Availability heuristic – "WYSIATI" aka What you see is all there is – reveals how people are unaware of what they do not know, and use whatever limited information may be available to create a coherent narrative, even when there is none. Hence, "Availability bias" allows people to use what looks to be salient info to fabricate narratives that seem to make sense.

You can hear the full interview, including the podcast extras, by downloading the podcast at iTunes, SoundCloud or Bloomberg. All of our earlier podcasts are atiTunes, Soundcloud and Bloomberg. (Masters in Business broadcasts all weekend on Bloomberg radio and SiriusXM, at Friday at 9pm, Saturdays at 10am, 6pm, and 11pm, and Sundays at 3am).

Next week, we sit down with Michael Mauboussin, head of Global Financial Strategies at Credit Suisse, adjunct professor at Columbia University's school of business, and author ofUntangling Luck and Skill in Sports, Business and Investing.

 

 

The post MiB: Danny Kahneman on Heuristics, Biases & Cognition appeared first on The Big Picture.

VISIT WEBSITE
 -- via my feedly newsfeed

My socialism [feedly]

My socialism
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2016/08/my-socialism.html

Geoffrey Hodgson poses an old question: what is socialism?

I share his dissatisfaction with Corbyn's definition as a way of living in which "everybody cares for everyone else." For me, socialism is not about being well-meaning busybodies. Rather, the care must be expressed via institutions which meet people's needs whilst treating them with dignity. On this score alone, our welfare state and immigration system fail.

So, can I come up with a better answer to Geoffrey's question? Here's my personal and idiosyncratic take.

First, a caveat. Like Marx, I'm not keen on detailed blueprints. Capitalism did not spring fully-formed from a single great mind, but rather evolved over centuries. The same will be true for socialism. Yes, there's a place for utopian thinking insofar as it reminds us that there are alternatives to the present system, and insofar as they ask us how we might betterembed values into institutions. But they can be a menace if they encourage sectarianism – "my utopia is better than yours" – and make the best the enemy of the good.

Instead, for me, socialism is a set of institutions which reconciles three principles.

First, real freedom. For me, socialism means giving people control to live their lives as they want. A basic income (pdf) and worker democracy are key features here.

Secondly, substantive equality. Rightist cliché-mongers will sneer here that full equality is impossible. But few leftists mean that everyone must have identical incomes, any more than that they must all wear Mao suits. Instead, two possible guidelines are envy-freenessand Rawls' difference principle – that inequalities be acceptable only if they are to the greatest benefit of the least advantaged members of society.

For me, what matters here isn't just inequalities of income, but of power and respect too. For this reason, whilst redistributive taxes are necessary they are far from sufficient. What's also needed (among other things) is an end to the "messiah complex" - our moronicfaith in bosses and leaders. One reason why I doubt that Labour party is an adequate means of achieving socialism is its obsession with leaders' personalities to the detriment of sensible institutional reform.

Thirdly, we must recognise that knowledge and rationality are tightly bounded. For this reason, Geoffrey's right to say that "relatively little can be planned from the top." Markets, therefore, have a big place in socialism – not least because, as Adam Smith said, they are a means whereby people provide for others without caring. (The best counter-argument to this I've seen comes from Matthijs Krul).

This principle has another implication. Socialism should be achieved by evolution, bycreating stepping stones – small institutional tweaks that create the potential for bigger ones. For example, small acts of empowering people – such as worker directors or patients' groups – might create a demand for greater power.

In this context, expansionary macro policy and job guarantees are important in two different ways.

First, economic growth makes people more liberal and tolerant and hence supportive of beneficial change; the notion of some ultra-leftists that recessions create demand for socialism has surely been refuted by history.

Secondly, full employment would greatly undermine capitalist power. In my socialism, awful working conditions such as those at Sports Direct wouldn't exist not because they have been outlawed but because workers have the real freedom – via a basic income and good jobs elsewhere – to reject such conditions. One step to socialism consists in enabling people to follow Johnny Paycheck's example.

Yes, full employment would squeeze profits. But this would, I'd hope, create conditions for more worker ownership. Capitalism might thus wither away.

Now, you might object that all this isn't too far away from Sam Bowman's "neoliberal"manifesto. I couldn't give a toss*. If we are to move towards socialism, we must take as many people with us as a far a possible – although of course there'll come a time when Sam and I prefer different paths.

For me, socialism requires building support for institutional change. It's not about narcissistic sectarianism. As I said, this is an idiosyncratic view.

* It's a lovely paradox that it is now the right rather than the left that wants to abolish (one form of) money.

 -- via my feedly newsfeed

Must-Read: This, from Paul Krugman, is 100% correct. The last eight years have taught us that as long as the distributi... [feedly]

Must-Read: This, from Paul Krugman, is 100% correct. The last eight years have taught us that as long as the distributi...
http://www.bradford-delong.com/2016/08/must-read-this-from-paul-krugman-is-100-correct-the-last-eight-years-have-taught-us-that-as-long-as-the-distribution.html

Must-Read: This, from Paul Krugman, is 100% correct. The last eight years have taught us that as long as the distribution of near-term possible outcomes includes at least a 10% or so chance of landing back at the zero nominal safe interest rate lower bound, the policies we should follow now are pretty much the policies we ought to follow at the bound.

Of course, this is the situation we will be in until the trend and expected inflation rate hits 4%/year: we are going to be in this situation for a looooooonnnngggg time:

Paul Krugman: Murky Macroeconomics:

we're not in the simple, depressed-economy world of 2011 anymore...

But here's the thing: we're not in what we used to call a normal macroeconomic situation either. Maybe we're close to full employment, but maybe not, and that's with near-zero interest rates; also, it's all too easy to imagine adverse shocks in the near future, and not at all clear how the Fed could or would respond. We are, if you like, half-out of the liquidity trap, with one foot on dry land — but the other foot is still hanging over the edge, and it wouldn't take much to topple us right back in.

What I would argue is that in this murky, fragile situation we should be conducting policy largely as if we were still in the trap--because we badly need to get both feet firmly on dry land with some distance between us and the quicksand. (And if I'm mixing metaphors--am I?--never mind. Throw the jackboot into the melting pot!) But it's not the crystalline case we used to be able to make.

Still, we need to deal with this murky situation right, which means embracing the uncertainty as part of the argument. Make murkiness great again!

 -- via my feedly newsfeed