Falling real estate prices show depth of crisis
BY BRIAN WILLIAMS
Despite claims played up in the capitalist media about small indications that the housing market is starting to rebound, real estate values have continued to plummet.
Home prices in the third quarter of 2009 were down nearly 9 percent from the same quarter a year earlier, according to Standard and Poor’s Case-Shiller Home Price Index released November 24. In the second quarter the year-to-year decline was 14.7 percent, and for the first quarter prices dropped 19 percent. Though the rate of decline has slowed somewhat, in 20 metropolitan areas prices are down nearly 30 percent from where they were in 2006.
While new home sales were up more than 5 percent from a year ago, they’re down 69 percent from their peak in July 2005, reported the Washington Post.
“Real estate, which has traditionally brought the economy out of recession, seems increasingly likely this time to hold it back,” stated the New York Times. “The housing market’s epic boom early this decade has turned into an epic bust whose effects may take years to shake off.”
According to a report issued by First American CoreLogic, nearly a quarter of all mortgage holders are “underwater,” meaning they owe more on their mortgage balances than their houses are worth.
Working people renting apartments are feeling the impact of the crisis as well, with wealthy owners of apartment buildings defaulting on their loans. In the Bronx, New York, for example, the real estate investment company Ocelot Capital Group bought about two dozen buildings in 2006 and 2007. Ten of them the following year were on the city’s list of most dilapidated rental properties. With the owner defaulting on loan payments last winter, living conditions there have gone from bad to unbearable.
Alfredo Martinez, 35, a truck driver who lives in one of these buildings, “has stretched a garden hose from his kitchen to bring water to flush the toilet; plastered his disintegrated walls, adding metal screens to stop mice from chewing through; and repaired the ceiling twice after a leak caused it to cave in,” the Post reported.
The number of New York apartment units “in buildings at risk of default because of upside down loans—in which the property is worth less than is owed on the loan—could range from 50,000 to 100,000,” according to the Post.
Dubai can’t meet debt payments
In another development, the government of Dubai announced November 25 that it needed a six-month deferment on interest payments on the $59 billion debt owed by the government-owned investment company Dubai World and its real estate subsidiary Nakheel. On December 14, $3.5 billion in Nakheel bonds will come due. The announcement sent shock waves through capitalist markets worldwide.
Dubai World is one of the world’s largest investment groups. The tens of billions of dollars it borrowed in a four-year construction boom were aimed at transforming the city-state into one of the world’s financial centers. Its flashy projects included not just building office towers and hotels, but an indoor ski slope and a man-made island shaped like a palm tree.
Among the largest lenders to Dubai are banks in the United Kingdom. The Royal Bank of Scotland, Standard Chartered, Barclays, and HSBC are owed more than $30 billion, according to a J.P. Morgan report. The largest lender from the United States is Citigroup, with a debt estimated at $1.9 billion.
The threat of default goes beyond Dubai. “The Greek government is grappling with a fiscal crisis, and several Eastern European governments increasingly appear in perilous financial shape, including Hungary, Poland, and the Baltic states,” noted the Post. “Western European banks have lent heavily in those nations, meaning any collapse could send tremors across the continent.”
Rising interest payments on U.S. debt
Meanwhile, interest payments on U.S. debt to wealthy bondholders are projected to rise rapidly. With the national debt now topping $12 trillion, interest payments will exceed $700 billion a year in 2019, up from $202 billion this year, according to White House estimates.
A forecast by the Congressional Budget Office says that total interest payments over the next decade will come to $4.8 trillion, more than half of the projected $9 trillion in debt the government is expected to build up over the next decade.
As debts become due the government rolls them over, borrowing additional funds—most likely at higher interest rates to pay back lenders. A Treasury borrowing advisory committee reported in early November that “approximately 40 percent of the debt will need to be refinanced in less than one year,” reported CNNMoney.com.
Mu
Tuesday, December 8, 2009
Bourgeois analysis of high tech prospects for 2010
from The Cleveland Low Wage Capitalism study group
FYI detailed bourgeios analysis of high tech prospects for 2010. The excerpted 10 points are only an outline. The body of the article has much supporting detail.
IDC's Information Technology and Communications industry predictions for 2010.
Some translation will immediately suggest itself, as the first paragraph shows:
PREDICTIONS
2010 will be a year of slim pickins for the IT and telecom industries.
But you won't have to hire back those workers you fired, Rather, we'll
find new ways to pay less to make more-- Chinese and Indian workers
can buy stuff too, we can rent low wage workers to other capitalists
from our factory in the clouds, those Chinese and Indian folks all need
a new phone and it wont be a landline, with fewer bucks to be made
we'll have to shift pockets faster. When all else fails, and it will, there
is always capitalist consolidation to fall back on.
Excerpt
P R E D I C T I O N S
2010 will be a year of modest recovery for the IT and telecommunications industries.
But the recovery will not mean a return to the pre-recession status quo. Rather, we'llsee a radically transforming marketplace — driven by surging demand in emerging
markets, growing impact from the cloud services model, an explosion of mobile
devices and applications, and the continuing rollout of higher-speed networks. These
transformational forces will drive key players to redefine themselves and their
offerings and will spark lots of M&A activity.
Growth will return to the IT industry in 2010. We predict 3.2% growth for the year,returning the industry to 2008 spending levels of about $1.5 trillion.
2010 will also see improved growth and stability in the worldwide telecommunications market, with worldwide spending predicted to increase 3%.
Emerging markets will lead the IT recovery, with BRIC countries growing 8–13%.
Cloud computing will expand and mature as we see a strategic battle for cloud platform leadership, new public cloud hot spots, private cloud offerings, cloudappliances, and offerings that bridge public and private clouds.
It will be a watershed year in the ascension of mobile devices as strategic platforms for commercial and enterprise developers as over 1 billion access the Internet, Phone apps triple, Android apps quintuple, and Apple's "iPad" arrives.
Public networks — more important than ever — will continue their aggressive evolution to fiber and 3G and 4G wireless. 4G will be overhyped, more wirelessnetworks will become "invisible," and the FCC will regulate over-the-top VoIP.
Business applications will undergo a fundamental transformation — fusing business applications with social/collaboration software and analytics into a newgeneration of "socialytic" apps, challenging current market leaders.
Rising energy costs and pressure from the Copenhagen Climate Change Conference will make sustainability a source of renewed opportunity for the IT industry in 2010.
Other industries will come out of the recession with a transformation agenda and look to IT as an increasingly important lever for these initiatives. Smart meters and electronic medical records will hit important adoption levels.
The IT industry's transformations will drive a frenetic pace of M&A activity.
FYI detailed bourgeios analysis of high tech prospects for 2010. The excerpted 10 points are only an outline. The body of the article has much supporting detail.
IDC's Information Technology and Communications industry predictions for 2010.
Some translation will immediately suggest itself, as the first paragraph shows:
PREDICTIONS
2010 will be a year of slim pickins for the IT and telecom industries.
But you won't have to hire back those workers you fired, Rather, we'll
find new ways to pay less to make more-- Chinese and Indian workers
can buy stuff too, we can rent low wage workers to other capitalists
from our factory in the clouds, those Chinese and Indian folks all need
a new phone and it wont be a landline, with fewer bucks to be made
we'll have to shift pockets faster. When all else fails, and it will, there
is always capitalist consolidation to fall back on.
Excerpt
P R E D I C T I O N S
2010 will be a year of modest recovery for the IT and telecommunications industries.
But the recovery will not mean a return to the pre-recession status quo. Rather, we'llsee a radically transforming marketplace — driven by surging demand in emerging
markets, growing impact from the cloud services model, an explosion of mobile
devices and applications, and the continuing rollout of higher-speed networks. These
transformational forces will drive key players to redefine themselves and their
offerings and will spark lots of M&A activity.
Growth will return to the IT industry in 2010. We predict 3.2% growth for the year,returning the industry to 2008 spending levels of about $1.5 trillion.
2010 will also see improved growth and stability in the worldwide telecommunications market, with worldwide spending predicted to increase 3%.
Emerging markets will lead the IT recovery, with BRIC countries growing 8–13%.
Cloud computing will expand and mature as we see a strategic battle for cloud platform leadership, new public cloud hot spots, private cloud offerings, cloudappliances, and offerings that bridge public and private clouds.
It will be a watershed year in the ascension of mobile devices as strategic platforms for commercial and enterprise developers as over 1 billion access the Internet, Phone apps triple, Android apps quintuple, and Apple's "iPad" arrives.
Public networks — more important than ever — will continue their aggressive evolution to fiber and 3G and 4G wireless. 4G will be overhyped, more wirelessnetworks will become "invisible," and the FCC will regulate over-the-top VoIP.
Business applications will undergo a fundamental transformation — fusing business applications with social/collaboration software and analytics into a newgeneration of "socialytic" apps, challenging current market leaders.
Rising energy costs and pressure from the Copenhagen Climate Change Conference will make sustainability a source of renewed opportunity for the IT industry in 2010.
Other industries will come out of the recession with a transformation agenda and look to IT as an increasingly important lever for these initiatives. Smart meters and electronic medical records will hit important adoption levels.
The IT industry's transformations will drive a frenetic pace of M&A activity.
HOW NOT TO COUNT THE POOR
Though written in 2005, this important paper has been ignored.You know those $1 a day income poverty demarcations that all global studies seem to take for granted-- they stand in the way of our measuring the extent of poverty and evaluating remediation efforts. All this, and some simple but better measures, are explained in great detail in this surprisingly brief paper.
http://www.columbia.edu/~sr793/count.pdf
While I have no reason to believe that the authors are Marxists, the following excerpt recalls a relevant point from Marx's Capital, v.1.
Our rejection of the Bank’s procedure does not support the skeptical conclusion that theattempt to provide a standard of income poverty comparable across time and space isdoomed to fail. There exists a much better procedure which can be easily implemented.This alternative procedure would construct poverty lines in each country that possess acommon achievement interpretation. [the authors go on to explain these common achievements as consisting of, e.g., gaining satisfaction of basic nutritional needs.]
That the authors have got even this far makes this article worth some study. Marx after all pointed way back to Aristotle, on much the same basis as that which might lead us to appreciate this criticism of neoliberal shell games, for recognizing that “Exchange cannot take place without equality, and equality not without commensurability." That neither they nor Aristotle recognized labor as the tertium comparationis in these value comparisons does not render their bit of work completely useless.
This paper calls out such institutions as the World Bank for using distorted money measures where, instead, a focus on "elementary human requirements" is needed. This leads the authors to focus on the common use value of the commodities that the poor need access to (a rationale that has some merit). The Banksters are, not surprisingly, focused only on the other end of the duality (exchange value).
So, to paraphrase Monty Python, if your stick has only one end, and if that end is not covered with shit, you must be a Bankster.
The authors' abstract may provide further inducement for you to read the article in full:
Abstract:
The World Bank’s approach to estimating the extent, distribution and trend of globalincome poverty is neither meaningful nor reliable. The Bank uses an arbitraryinternational poverty line that is not adequately anchored in any specification of the realrequirements of human beings. Moreover, it employs a concept of purchasing power"equivalence" that is neither well defined nor appropriate for poverty assessment. Thesedifficulties are inherent in the Bank’s “money-metric” approach and cannot be crediblyovercome without dispensing with this approach altogether. In addition, the Bankextrapolates incorrectly from limited data and thereby creates an appearance ofprecision that masks the high probable error of its estimates. It is difficult to judge thenature and extent of the errors in global poverty estimates that these three flaws produce.However, there is reason to believe that the Bank’s approach may have led it tounderstate the extent of global income poverty and to infer without adequate justificationthat global income poverty has steeply declined in the recent period. A new methodologyof global poverty assessment, focused directly on what is needed to achieve elementaryhuman requirements, is feasible and necessary. A practical approach to implementing analternative is described.
from The Cleveland Low Wage Capitalism study group
http://www.columbia.edu/~sr793/count.pdf
While I have no reason to believe that the authors are Marxists, the following excerpt recalls a relevant point from Marx's Capital, v.1.
Our rejection of the Bank’s procedure does not support the skeptical conclusion that theattempt to provide a standard of income poverty comparable across time and space isdoomed to fail. There exists a much better procedure which can be easily implemented.This alternative procedure would construct poverty lines in each country that possess acommon achievement interpretation. [the authors go on to explain these common achievements as consisting of, e.g., gaining satisfaction of basic nutritional needs.]
That the authors have got even this far makes this article worth some study. Marx after all pointed way back to Aristotle, on much the same basis as that which might lead us to appreciate this criticism of neoliberal shell games, for recognizing that “Exchange cannot take place without equality, and equality not without commensurability." That neither they nor Aristotle recognized labor as the tertium comparationis in these value comparisons does not render their bit of work completely useless.
This paper calls out such institutions as the World Bank for using distorted money measures where, instead, a focus on "elementary human requirements" is needed. This leads the authors to focus on the common use value of the commodities that the poor need access to (a rationale that has some merit). The Banksters are, not surprisingly, focused only on the other end of the duality (exchange value).
So, to paraphrase Monty Python, if your stick has only one end, and if that end is not covered with shit, you must be a Bankster.
The authors' abstract may provide further inducement for you to read the article in full:
Abstract:
The World Bank’s approach to estimating the extent, distribution and trend of globalincome poverty is neither meaningful nor reliable. The Bank uses an arbitraryinternational poverty line that is not adequately anchored in any specification of the realrequirements of human beings. Moreover, it employs a concept of purchasing power"equivalence" that is neither well defined nor appropriate for poverty assessment. Thesedifficulties are inherent in the Bank’s “money-metric” approach and cannot be crediblyovercome without dispensing with this approach altogether. In addition, the Bankextrapolates incorrectly from limited data and thereby creates an appearance ofprecision that masks the high probable error of its estimates. It is difficult to judge thenature and extent of the errors in global poverty estimates that these three flaws produce.However, there is reason to believe that the Bank’s approach may have led it tounderstate the extent of global income poverty and to infer without adequate justificationthat global income poverty has steeply declined in the recent period. A new methodologyof global poverty assessment, focused directly on what is needed to achieve elementaryhuman requirements, is feasible and necessary. A practical approach to implementing analternative is described.
from The Cleveland Low Wage Capitalism study group
Minimum Wage - Blake Fall-Conroy Sculpture
http://blakefallconroy.com/18.html
"The minimum wage machine allows anybody to work for minimum wage. Turning the crank will yield one penny every 5.04 seconds, for $7.15 an hour (NY state minimum wage). If the participant stops turning the crank, they stop receiving money. The machine's mechanism and electronics are powered by the hand crank, and pennies are stored in a plexiglas box."
http://blakefallconroy.com/18.html
"The minimum wage machine allows anybody to work for minimum wage. Turning the crank will yield one penny every 5.04 seconds, for $7.15 an hour (NY state minimum wage). If the participant stops turning the crank, they stop receiving money. The machine's mechanism and electronics are powered by the hand crank, and pennies are stored in a plexiglas box."
Morbid Symptoms: Current Healthcare Struggles
http://www.feedly.com/home#subscription/feed/http://socialistresistance.org/?feed=rss2[action.subscribe
Leo Panitch and Colin Leys have just brought out the 2010 annual volume of the Socialist Register, Morbid Symptoms: Health Under Capitalism, published by Merlin Press in London, Monthly Review Press in the US and Fernwood Books in Canada. The book provides a path-breaking assessment of health under capitalism, providing a systematic account of the antagonistic relationship between capitalism and human bodies, of how modern healthcare has been deeply penetrated by neoliberal capitalism, and the ways in which healthcare workers, activists and socialists are struggling and pursuing alternatives paths of solidarity in human health.
http://www.feedly.com/home#subscription/feed/http://socialistresistance.org/?feed=rss2[action.subscribe
Leo Panitch and Colin Leys have just brought out the 2010 annual volume of the Socialist Register, Morbid Symptoms: Health Under Capitalism, published by Merlin Press in London, Monthly Review Press in the US and Fernwood Books in Canada. The book provides a path-breaking assessment of health under capitalism, providing a systematic account of the antagonistic relationship between capitalism and human bodies, of how modern healthcare has been deeply penetrated by neoliberal capitalism, and the ways in which healthcare workers, activists and socialists are struggling and pursuing alternatives paths of solidarity in human health.
Satire from Товарищ Х with artwork by Tim Hosler
Cleveland Reds Go Green
Again Drawing PJC Censure
Again Drawing PJC Censure
Pictured above: Alexander reluctantly takes forward position
Cadres of the victorious Marxist Revolutionary Army of Cleveland drew rebuke again today, this time for their CFL light bulb recycling program. The People's Justice Committee took particular exception to their employment of Anthony J Alexander, who as the head of FirstEnergy was responsible for the infamous Cleveland Plan that forced destitute workers to buy $21 CFL light bulbs, in what the Committee termed "a vengeful manner."The recycling, as rendered by an artist at the scene, is pictured above so that readers may judge for themselves if the PJC rebuke was warranted.
_________________________
Товарищ Х is a political activist and composer who lives in Cleveland, Ohio.
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