Showing posts with label housing market. Show all posts
Showing posts with label housing market. Show all posts

Sunday, December 3, 2023

December, 2023, Political Class Insanity, Part 1: New York City and Chicago Race To Bankruptcy Court, The Housing Market In A Funk, and the Chinese Communist and Mexican Cartel Illegal Drug Enterprise

  Every month we devote posts to just general political class insanity that is running rampant through the country. The members of the American political class continue to show that they are incapable of operating any level of government in this country. 

Even their best efforts are almost always inefficient and ineffective at resolving any problem facing Americans. They spend a great amount of time not trying to improve the lives of their citizens but continually ensuring their reelection and enriching themselves, their families, and their friends in the process, all at taxpayer expense.


1)One of the dumbest and most fatal political movements of the past few years has been the inane “defund the police” movement.  Politicians with no understanding  of reality and the criminal mind went about bashing, demeaning, and  defunding their police forces in mostly liberal  cities across the country. As a result, crime has skyrocketed  as limited and reduced police resources have not been able to keep up with the crime wave. This has resulted in incremental American citizens being murdered, robbed, raped, carjacked,  etc.


This has resulted in demoralized police forces across the country such as the New York Police Department:


  • The New York Post reported that 2,516 NYPD police officers had recently quit the force.

  • This is the fourth highest resignation number in the past decade.

  • It is 43% more than who had resigned in 2018 before the crime rates spiked in the city.

  • Of the 2,516 who quit, 1040, about 40% of them were short of their 20 years for full pension and retirement, a 104% increase since 2020.

  • According to Police Benevolent Association President, Patrick Hendry:  “The workload is a leading factor driving people away from the job. If the NYPD is going to survive these staffing reductions, it cannot just keep squeezing cops for more hours.”

  • The fact that assaults on police officers are up 25% this year over 2022 is also not a motivating force to stay employed as a NYC police officer.

  • The process becomes a self feeding death spiral: politicians reduce the workforce and budget forcing existing police officers to work more which disheartens them and causes them to leave which forces the remaining police officers to work even  more which results in more leaving and the death spiral for staffing is in place.

  • And things are going to even worse very quickly as the mayor, Eric Adams, has announced further cuts to the police force and the canceling of five police recruiting classes in order to divert police tax dollars to feed, shelter and care for the illegal  immigrants that Biden has allowed to enter the country and who ended up in NYC.


We have  often  discussed the possibility of which major U.S. city will  go bankrupt first, which city will start a financial death spiral and never get out of it until it collapses financially. For a long time the leading candidate for that “honor” was Chicago. 


However, as the NYPD  police force gets decimated by city politicians, crime will  rise, businesses and residents will continue to leave the city. This will reduce the tax base and tax revenue which will further reduce the quality and safety of life in the city and before you know it, the movie, “Escape from New York,”  becomes a reality.


2)And while NYC may be teetering on the edge of a financial death spiral,  do  not rule out Chicago as the next major American city to go bankrupt. The violence in the city and the politicians’ inability to even make minor progress against the murders and crime engulfing the  city is driving that city’s residents and businesses to leave and take their tax dollars with them for better opportunities in less violent places around the country.


Consider a recent weekend violence summary in the city:


  • In a mid-November weekend, 24 Chicago residents were shot.

  • Four of those shot died from their wounds.

  • Those wounded and  killed included kids.

  • Many of these shootings and fatalities happened in the middle of the day, not in the dead of night.


People are not stupid, they are not going to live and do business in places where their lives at all hours of the day have a decent chance of being a victim of violent Chicago crime. They leave, reducing the city’s tax revenue and tax base, which results in lower tax revenue, leaner police forces, more crime, and the  spiral  is underway. The betting question is which city,  New York or Chicago, gets to  bankruptcy court first.


3)Meanwhile across the rest of the country, Biden’s economic policies continue to create pain and havoc with Americans. Too many times we have pointed out the bad economic situation that Biden has imposed on the country: high food prices, high gas prices, high utility prices, trillion dollar deficits, high mortgage rates, etc.


And his failed economic policies are crunching the housing market also:


  • Existing  home sales in October were 4.3% lower than in September according to the National  Association of Realtors.

  • This is down a whopping 14.3%  from the same time a year ago.

  • And yet Biden has somehow managed to  defy economic principles in that although sales/demand  is down prices are up, completely contrary to logic and economic history and yet that is the reality of how screwed up his economic policies are.

  • New home sales are also in a tailspin, down 5.6% from a month ago.

Just another example of how Biden and the rest of Washington have no clue when it comes to economic principles and management.

4)While the Mexican drug cartels, in partnership with the Chinese Communist government, have been flooding the southern border with unheard of tonnage of deadly fentanyl, the Chinese have also been busy elsewhere in the country, creating illegal drugs all the way up into Maine:

  • The Department of Homeland Security has identified 270 suspected Chinese and illegal marijuana operations in Maine.

  • These grow operations are estimated to have garnered almost $5 billion in revenue that is both sent back  to China or used in this country for other illegal activities.

  • While the state has legalized marijuana, these Chinese grow operations are outside the legality of the Maine legalization law.

  • According to Maine state representative Austin Theriault: “This is a failure I believe of both the state government and the federal government, and it’s time people start taking this more seriously. This is a lack of political will, there’s many other areas the government’s not afraid to get involved, but for some reason they’re not willing to put their foot down and start to crack down on some of these illegal operations and I want to see that happen.”

  • The DEA suspects that the Chinese are working hand in hand with the Mexican drug cartels who help with laundering the proceeds from the marijuana sales and help the Chinese to purchase properties for the marijuana growing.

If someone wants to smoke marijuana, no problem, go ahead. The problem here is that these operations enrich the Mexican drug cartels which are also getting incredibly wealthy from smuggling drugs and human trafficking. They are an international criminal  enterprise that negatively affects Americans in any number of ways. Unfortunately, Biden and the current Washington political class continue with failed policies and idiocy that continue to enrich, and embolden, the cartels and the Chinese.

Enough insanity for today: Chinese and cartel elements getting rich as American as continue to suffer drug addiction rates that are rising rapidly, the housing market in a funk, and Chicago and New York City continue to degenerate into a race to bankruptcy court while their residents suffer higher and higher rates of violent crime.

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Friday, June 1, 2012

Economic Update - Part 2: An Imploding Euro, Nancy Pelosi School Of Economics, And More

Yesterday, we started our periodic review on the state of the economy. Unfortunately, bad news and expected economic downturns, based on various experts' opinions, seems to be the prevailing trend. Even more unfortunate, we could not finish reviewing all of the bad news yesterday and needed another day for the other dire economic news in today's post.

- Relative to the housing industry, as measured by the Case-Shiller housing price index, even though 12 of 20 metro areas showed housing price gains in March, a good sign for the housing industry, the pricing trends in the other eight metro areas were so bad the overall price index edged down to its lowest level since the housing bubble burst four years ago. Thus, while the housing market might be starting to bottom out, the industry is probably very far away from really contributing to a growing economy.

- According to a report from Bloomberg News on May 23, 2012, Hewlett-Packard recently announced that it will reduce its workforce by 27,000 positions over the next year or so. Not a good sign for the economy when a large U.S. company is reducing its workforce by 8%.

- Economist and fund manager John Hussman says we are entering a recession now, according to an interview he gave to Moneynews on May 14, 2012: "The joint deterioration in the growth of real personal income, real personal consumption, real final sales, and employment, coupled with our inference of leading economic pressures from 'unobserved components' methods, creates not only the concern but the expectation that the U.S. economy is entering a recession — not a quarter or two from today, but most likely at present. Indeed, Europe already appears to be in a broadening recession, which the U.K. has now joined, and the confluence of economic weakness and already strained government debt conditions in Europe is likely to produce disruptive outcomes in the coming quarters."

- In a May 21, 2012 CNBC sponsored article in USA Today, New York University economist Nouriel Roubini stated that the U.S. economy is not growing close to what it should be in a healthy environment, barely hitting the 2% level: "We have positive economic growth, but it's below trend — barely 2 percent."

- We have already covered the following economic story under our recent Political Class Insanity posts but it is worthwhile going through it again. White House Senior Advisor Valerie Jarrett recently spoke at the Student Summit at North Carolina Central University where she hilariously claimed unemployment benefits stimulate the economy: "Let's face it, even though we had a terrible economic crisis three years ago, throughout our country many people were suffering before the last three years, particularly in the black community. And so we need to make sure that we continue to support that important safety net. It not only is good for the family, but it's good for the economy. People who receive that unemployment check go out and spend it and help stimulate the economy, so that's healthy as well."

Valarie Jarrett is one of President Obama's closest and most trusted advisor. Given that, it should come as no surprise that the vast majority of his economic policies and programs have failed if they are based on this type of inane economic theory. If Ms. Jarrett's theory is correct, then we should strive to ensure that every American DOES NOT have a job and is collecting unemployment checks, which they can then spend to create jobs. Stupid logic and theory.

Since we have been sending out record setting numbers of unemployment checks over the past four years, and there are still about 14 million Americans who are unemployed or under employed, this does not look like a good stimulus program if after four years we are in this type of dire situation. Obviously Ms. Jarrett a graduate of the Nancy Pelosi School Of Economics.

- One of the biggest economic time bombs waiting to go off is the mess in Europe and the Euro currency. This should be one of the biggest economic disasters we will see in our lifetime unless someone over there comes up with a plan, the likes of which no one has come close to formulating so far.

For those of you that are not too familiar of what is about to happen, I recommend you read the handful of lead articles in the most recent issue of Business Week for the week of May 28, 2012. The articles go into enough detail of what is pending, from various perspectives, without overwhelming the reader with financial minutiae.

The following facts will give you an idea of what the black clouds in Europe are all about, black clouds that will eventually rain some bad news on our economy:
  • UBS has told it customers that the chance of Greece leaving or being kicked out of the Euro currency is about 20% within the next six months while Citigroup has stated their opinion that the likelihood of this happening within the next 18 months is between 50 and 75%.
  • If Greece does go back to its drachma and gets out of the Euro, UBS predicts that the new drachma would devalue to about 25% of the Euro's value, making every Greek citizen and business about 75% poorer. Greek citizens have already started to take money out of Greece banks, in case they should fail, with Greek banks showing that their deposits are down about 33% since 2009.
  • The bigger concern is that investors might start to believe that Greece is just the first domino and make a rush to withdrawal money from the banks of the other weak economies, Portugal, Spain, Ireland, and Italy. These banks have seen their deposits shrink by 3.2% over the past 15 months.
  • France's Societe' Generale forecasts that a Greek exit from the Euro could result in about $1.1 TRILLION worth of currency and loan losses in the U.S. and Europe.
  • The value of the Euro vs. the dollar is at it slowest level since five months ago. This means that the hundreds of billions of Euros support the rest of Europe has put forth in the past six months to prop up the Greek economy is not building up investor confidence in the value of the Euro.
  • Spain is already in a recession, with unemployment at 24% and the number of bad loans currently on the books in Spain standing at 8.4%, the highest level in eighteen years. Thus, at least in Spain, there is not a dynamic and growing economy that might be able to lift that country out of its economic abyss.
  • In Greece, the unemployment rate is about 20% and the unemployment rate for young adults is about 50%. Both figures are causing young Greeks to leave their country for a better life and better chance for employment elsewhere in the world, further weakening the chances for a Greece economic revival anytime soon.
Not a pretty sight. If the dominoes do fall, then even Germany might fall into recession since a lot of the exports their companies ship out end up in Spain, Greece, Italy, and Ireland. If those countries continue with their recessions and high unemployment, they will not be buying as many products from German businesses and factories. Remember, England is already officially in a recession.

If Germany goes into a recession, the whole Euro zone will fall into a recession and a major market for U.S. imports will dry up, probably forcing the U.S. economy into a recession, if we are not already in one. And if the entire Euro currency should collapse, I do not think anyone has a clue how bad the economic damage would be throughout the world, just not Europe. And history teaches us that when the economic damage is that bad, the political consequences can be bad and lengthy, e.g. the hyperinflation and German economic malaise that led to Hitler and the Nazis.

That is more than enough economic news, views, opinions, and statistics for one month. An imploding currency, ignorant economic advisers, 27,000 more Americans about to lose their jobs in one fell swoop, low economic growth, an impending return to recession, almost $16 TRILLION in debt, and a housing market that is getting worse at a slower pace. Have a good day!

Oh, by the way, Monday I promise we will be done with the bad economic news since a whole raft of new bad news showed up yesterday!


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The United States of Purple is a new grass roots approach to filling the office of President of The United States by focusing on the restoration of freedom in the United States, focusing on problem solving skills and results vs. personal political enrichment, and imposing term limits on all future Federal politicians. No more red states, no more blue states, just one United States Of America under the banner of Purple.

The United States Of Purple's website also provides you the formal opportunity to sign a petition to begin the process of implementing a Constitutional amendment to impose fixed term limits on all Federally elected politicians. Only by turning out the existing political class can we have a chance of addressing and finally resolving the major issues of or times.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

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