Opinions: …a second economic crash


Michael Moore: There’s Going to Be a Second Economic Crash (and Glenn Beck Can ‘F–k off’)

Michael Moore lets loose on Beck, the Democrats, and the state of our economy as he unrolls his DVD release of capitalism.

March 4, 2010  |  

We interviewed Michael Moore on The Young Turks today and he was not shy about sharing his opinions. Anyone surprised? He had very strong words for the Democratic Party, the state of our political system and Glenn Beck.

What he thinks of Democrats and Republicans:

You know, I tell you, these Democrats are disgusting. Wimps and wusses and weasels. You know, get some spine. This is why I have to admire the Republicans. They at least stand for something. They at least have the courage of their convictions. They get elected to office, they come into town, and they go “Get outta my way, there’s a new sheriff in town. This is the way we’re doing things. Get outta here.” And then they do it. You know. I mean what they do is crazy. But dammit, they are good at it. We should take a page out of their book.

Can we fix the broken political and economic system in America?

It’s not going to get fixed. There’s going to be another crash. The commercial real estate bubble hasn’t burst yet. That’s going to burst. The credit card debt is so huge right now, it will never be repaid. That’s a house of cards waiting to fall. So the crash of ’08 is going to look like coming attractions. And we’re in for a much, much worse time.

What he would have said to Glenn Beck if he was in Van Jones’ place:

Fuck off! That’s what I would have said. But again, you mentioned Glenn Beck, and of course, he’s the guy that’s called for my removal from the planet Earth, so…

(part 2)

Michael Moore: There’s Going to Be a Second Economic Crash (and Glenn Beck Can ‘F–k off’)

Michael Moore lets loose on Beck, the Democrats, and the state of our economy as he unrolls his DVD release of capitalism.

Continued from previous page

Cenk:  So you think that campaign finance reform is the critical part of this.

Michael:  Cenk, there’s nothing else will happen.  Look at right now.  Here we are guys, we’re a year and a half away from the crash.  A year and a half since the big crash.  Not one single regulation has been put back in place.  Not one rule.  And for Wall Street, they’re back to doing the crazy derivatives.  They’re back to the credit default swaps.  They’re back to all the crazy loony bin casino stuff that got us in the mess that we’re in.  And the Congress has not done one single thing to stop it.

Cenk:  You know in the movie you talk about Chris Dodd, and of course he’s the head of the Finance Committee.  And now he’s retiring.  But that might be a worse thing, Michael, because now’s he’s got a payday coming just a couple of months from now.  That’s going to give him a lot of incentive to not to be so tough on the banks, isn’t it?

Michael:  Well, yeah, I guess that’s one way to look at it.  But, a boy can hope.

Cenk:  Because part of the problem is the implicit bribe that these guys are getting.  The Treasury official just left yesterday, Damon Munchus, I believe is his name.  And he’s got a great lobbying gig now with the Cypress Advisory Group.  So it’s not just the campaign money they take, it’s not just their advisors that leave, but themselves–they leave at some point and they get huge money.  So how do we ever fix a system that’s broken, especially given that it appears that Obama has no intention of doing so?

Michael:  Well, you want the honest answer?

Cenk:  Yes, definitely.

Michael:  It’s not going to get fixed.  There’s going to be another crash.  The commercial real estate bubble hasn’t burst yet.  That’s going to burst.  The credit card debt is so huge right now, it will never be repaid.  That’s a house of cards waiting to fall.  So the crash of ’08 is going to look like coming attractions.  And we’re in for a much, much worse time. That’s how I honestly feel.  

But you don’t want to hear that from me, do you?  I mean, I’m only the guy who said that there weren’t going to be any weapons of mass destruction in Iraq and that we were being lied to.  And I’m the guy who 20 years ago made his first film saying that General Motors was a piece of crap company that was going to slide down the hill and bring us all down with it.  So don’t listen to me.

Cenk:  Part of the problem, Michael, is if it does crash–and I have the same fear as you do–right–is that then what the right wing media is going to step in and say “Hey, listen, you know what, it was too much government, and it was too much regulation, and it was the progressives who were the cancer, etc., etc.”

Michael:  Oooohhhh, I know I’m so afraid of the right wing saying that.  Oooohhhh.    Typical Democrats.  That’s the way the Democrats think. Oooohhhh, ooohhh,  they’re gonna say bad things about us.  Oooohhhh, we better not do too much.  Oooohhhh.  

You know, I tell you, these Democrats are disgusting.  Wimps and wusses and weasels.  You know, get some spine.  This is why I have to admire the Republicans.  They at least stand for something.  They at least have the courage of their convictions.  They get elected to office, they come into town, and they go “Get outta my way, there’s a new sheriff in town.  This is the way we’re doing things.  Get outta here.”  And then they do it.  You know.  I mean what they do is crazy.  But dammit, they are good at it.  We should take a page out of their book.

Cenk:  I couldn’t agree more with that.  So to finish that thought, if you were, for example, Van Jones, how would you have responded to Glenn Beck?

Michael:  Fuck off!  That’s what I would have said.  But again, you mentioned Glenn Beck, and of course, he’s the guy that’s called for my removal from the planet Earth, so…

Cenk:  So, it’s someone you’re familiar with, so apparently you had that refrain ready.  All right, Michael Moore is the director of ‘Capitalism: A Love Story‘, it’s coming out on DVD.  Thank you so much for joining us on The Young Turks, we really appreciate it. 



America’s Most Underwater Housing Markets

by Luke Mullins
Friday, March 19, 2010

Negative equity–what you have when you owe more on your home loan than the property is worth–is one of the defining features of the still-unfolding mortgage crisis. It’s a particularly nasty problem because it can lead to all sorts of unpleasant outcomes for the real estate market and the economy as a whole.

Having negative equity, which is also known as being “underwater” on a mortgage, makes homeowners more likely to end up in foreclosure. It restricts a borrower’s ability to refinance or buy another home, which in turn stifles demand for housing. It even reduces the flexibility of the labor market, since underwater homeowners are less willing to leave town to take a different job, says Stan Humphries, the chief economist at Zillow.

“We have never had negative equity like this at the national level in as many different regions as we have now,” Humphries says. To get a better sense of the cities with the greatest concentrations of negative equity, Zillow provided U.S. News with data that detail the percentage of mortgage borrowers who are underwater in 142 distinct markets throughout the country. Based on this research, we compiled the following list of America’s most underwater housing markets. (Please note: We chose no more than one city per state.)

1. Las Vegas

Las Vegas was ground zero for the housing market’s historic boom and bust. Loose lending standards and speculative fervor helped send home prices surging more than 104 percent from 2002 to their 2006 peaks, according to Moody’s Economy.com.

“We all knew in our hearts it was unsustainable and there had to be a correction,” says Larry Murphy, the president of SalesTraq. That correction came as the housing bubble popped and the economy tanked: Home prices in Las Vegas fell more than 56 percent from 2006 to the third quarter of 2009. This steep decline has pulled a vast swath of mortgage borrowers underwater.

“If you bought a home in Las Vegas since 2004 up to about 2007, whatever you bought–I don’t care if you bought a big house or a little house, in a great neighborhood or a crummy neighborhood–it’s worth about half what you paid for it,” Murphy says.

More than 81 percent of single-family home mortgages in Las Vegas had negative equity in the fourth quarter of 2009, according to Zillow. And it may take 20 years for some of these home values to climb back to the levels they hit at the peak of the housing boom, Murphy says.

2. Merced, Calif.

The housing crisis that has rocked Merced, Calf., was initially linked to rising property values in relatively nearby metropolitan areas like San Francisco. As real estate became increasingly unaffordable in the bigger cities, many would-be home buyers started exploring options in smaller markets, such as Merced.

“A number of people said, ‘Hey, I have got a couple of choices: I can get a 1,000-foot condo in San Francisco, or I can move east and I can get myself a fairly significant home for the same price,’ ” says John Walsh, the president of DataQuick. Although this trend increased real estate demand in Merced, prices appreciated even faster as exotic mortgage products and investor interest hit the market.

Area home prices jumped nearly 129 percent from 2002 to 2006. But after the euphoria subsided, home prices crashed more than 72 percent through the third quarter of 2009. This rapid deflation dragged about 64 percent of single-family home mortgages underwater by the fourth quarter of 2009, according to Zillow. Walsh says it could be 10 to 20 years before Merced home prices reach former peak levels.

3. Phoenix

As exotic mortgage loans and investor demand swept through the market, home prices in Phoenix jumped more than 101 percent from 2002 to their 2006 peaks. Jay Butler, an associate professor of real estate at Arizona State University, says many people who purchased property in Phoenix during the boom felt pressure to get in on the action. “You had [real estate] seminars all over the place, you had ‘flip this’ shows,” Butler says.

“You were constantly being fed a barrage that if you weren’t actively participating in this thing, you were not only denying yourself a great bit of wealth but your kids [and] your grandkids.” But once the music stopped, the housing market in Phoenix was clobbered. Home prices dropped more than 52 percent from their peaks through the third quarter of 2009. And as of the fourth quarter of last year, nearly 62 percent of single-family home mortgages were underwater, according to Zillow.

4. Orlando

Like other cities in Florida, the Orlando market saw tremendous demand from investors during the first half of the previous decade. Some were looking to cash in on the appreciating market through short-term property flipping, while others were buying properties for vacation homes. Although the market attracted interest from buyers in the Midwest and Northeast, condo developers also marketed developments specifically to foreign buyers, particularly in the United Kingdom, says Jack McCabe, CEO of McCabe Research & Consulting.

“It’s almost like [the British] were setting up another colony in the United States,” McCabe says. Abetted by easy credit, such demand helped send home prices surging by more than 102 percent from 2002 to the market’s peak in 2006. But the subsequent crash has been painful. The nearly 48 percent drop from the peak through the third quarter of 2009 has pulled 58 percent of single-family home mortgages in Orlando underwater, according to Zillow. And McCabe isn’t optimistic about a quick rebound. “For the condo or condo conversion owner, literally they may carry them out feet first before they ever see that property reach 2006 values,” he says.

5. Greeley, Colo.

With 45 percent of single-family mortgages underwater, the Greeley, Colo., market has among the higher concentrations of negative equity in the nation. The predicament is rooted in an increase in smaller homes built during the first half of the previous decade that were purchased with risky, subprime mortgages, says Randy Moser, the president of the Greeley Area Realtor Association.

“If you had a 550 credit score, you could maybe even get 110 percent financing [and] roll in your closing costs,” he says. But after many of these buyers began falling behind on their payments, area foreclosures surged, and home prices fell about 15 percent through the third quarter of 2009. “We were probably one of the first counties in the United States that went into the foreclosure mess,” Moser says.

6. Bend, Ore.

From 2002 to early 2007, home prices in Bend, Ore., jumped by 99 percent, as second-home buyers and retirees were drawn to this community. But after the housing bubble popped and economy eroded, home prices have slumped some 32 percent through the third quarter of 2009. “We are seeing homes that people bought for $2.5 million now selling for under $1 million,” says Kathy Ragsdale, the CEO of the Central Oregon Association of Realtors.

Ragsdale says the initial phase of the downturn was triggered by evaporating demand from second-home buyers. But more recently, as unemployment has surged, many residents have found themselves unable to make their mortgage payments. Today, more than half of the residential property transactions in Bend are distressed sales, Ragsdale says.

“It’s huge when somebody stands up in a meeting and says, ‘I have a home for sale, and by the way, it’s not a short sale,’ ” she says. As of the fourth quarter of last year, roughly 41 percent of single-family home mortgages were underwater, according to Zillow.

7. Minneapolis-St. Paul

Although this area is far removed from the cities most closely associated with the housing bubble, home prices in Minneapolis-St. Paul inflated significantly in the early part of the previous decade. Real estate values increased nearly 34 percent from 2002 to 2006. Brad Fisher, the president of the Minneapolis Area Association of Realtors, says subprime lending played a key role.

“Outside of the coasts, the Minneapolis-St. Paul area was one of the higher areas [of] subprime loans,” Fisher says. “We have paid a price because of that.” The subsequent 29 percent price decline through the third quarter of 2009 pulled nearly 39 percent of single-family home mortgages underwater by the fourth quarter of 2009, according to Zillow.

8. Memphis

Home prices in Memphis didn’t surge as aggressively as other markets during the boom. But pockets of subprime mortgages–coupled with a modest slump in prices over the past three years–have created a notable concentration of negative equity. Real estate values increased about 12 percent from 2002 to 2006, but prices then fell nearly 18 percent through the third quarter of 2009.

And as of the fourth quarter of last year, roughly a third of all single-family home mortgages were underwater, according to Zillow. Glenn Moore, the president of the Memphis Area Association of Realtors, argues that the negative equity is concentrated in a small part of the overall market. “It is limited to mostly suburban areas and maybe some areas where there was maybe some predatory lending going on,” Moore says.

9. Cleveland

Home prices in Cleveland increased 13 percent from 2002 to 2006 but then fell nearly 16 percent through the third quarter of 2009. “There was a little bit of overinvestment in housing, and the economy started weakening,” says Celia Chen of Moody’s Economy.com. “[Cleveland] entered recession before the rest of the U.S., and I think weak economic conditions have pulled down home prices.” Exposure to subprime lending has also played a role in the real estate market’s decline. Roughly 32 percent of single-family home mortgages were underwater as of the fourth quarter of last year, according to Zillow.

10. Grand Rapids, Mich.

Real estate values in Grand Rapids, Mich., increased 15 percent from 2002 to 2005 and then fell about 13 percent through the third quarter of last year. As of the fourth quarter of 2009, roughly 29 percent of single-family home mortgages were underwater, according to Zillow. The weakness in the housing market is linked to the area’s deteriorating economy, Chen says.

Source: http://finance.yahoo.com/real-estate/article/109131/americas-most-underwater-housing-markets



Jay Hanson and Dieoff.org

Posted by Nate Hagens on July 24, 2006 – 11:37am
Topic: Miscellaneous
Tags: dieoff, evolution, net energy, peak oil, thermodynamics [list all tags]

There are many layers of the Peak Oil onion. One man who has peeled away most of them, largely out of the public eye, is Jay Hanson. Jay is the quintessential Peak Oil autodidact. After a successful career in software design, his ongoing quest for knowledge about energy, evolution and the environment culminated in a massive internet reference hub for these topics called DIEOFF.ORG. In 1997 he predicted we would invade and occupy Iraq for their oil. (link). Jay has been intensely studying and researching topics central to energy and evolution nearly full time for 15 years, (4 of which spent solo on a yacht in the Pacific). I know many of the readers of theoildrum got their first exposure to the concept of Peak Oil through Jays writings and research and were active readers of his dieoff listserv( GreyZone, Darwinian, Angry Chimp and Totoneila, to name a few).

As such, I feel privileged that Jay will be visiting Robert Rapier, myself and some friends in August to discuss his latest ideas, research and predictions regarding society in the face of peak oil. He is particularly interested in working out a ‘logic’ framework on the human behavioral aspects of everyday life, and believes we can parse much of our behaviour into a simple set of ‘if-then’ analog algorithms, evolutionarily designed, context dependent.

The geology and alternative energy situations will play themselves out naturally in the coming years but insights into our evolutionarily constructed behavioral switches are rarely talked about in decision-making circles. In my opinion (and Jay’s), progress in this area thus offers the greatest leverage in understanding and promoting successful approaches to Peak Oil adaptation and mitigation. (Jay would also say that its just fun to learn and debate because of the dopamine.)

Human behavior is a product of our genes and our environment (culture). Jay has often pointed out that culture is only relevant so long as it has the ability to punish. Many of the dieoff.org viewpoints are difficult to envision let alone accept (like a 50%+ human dieoff in the coming decades). Yet Jay Hanson has connected many dots with research and insight difficult to refute. Below is Jay’s farewell summary to his dieoff listserv from 2003. It offers a unique perspective on societies possible reactions to a decline in energy availability. (If there is interest, and we haven’t started WWIII, I’ll follow this post one month hence with a synopsis of our mini retreat on human evolutionary constructs.)



Jay Hanson 01/12/03

I am turning the dieoff website over to the moderator of the “energyresources” mailing list — a fellow named Tom Robertson t1r@bellatlantic.net. If you are so inclined, Tom could make use of any support you could give him to keep the dieoff web site going.

I would like to bid you all farewell and present a brief synopsis of my work over the last ten years or so. Like everything else, it’s all very simple when you really understand it. Unfortunately, I doubt that more than a few hundred people worldwide (perhaps far less) would be able to really understand the issues I raise in this paper. Probably no more than one or two who actually receive this mailing will really understand it — for reasons I will attempt to explain…

I developed an interest in “sustainability” about fifteen years ago when it became clear to me that our present economic system was totally unsustainable and self-destructive. It seemed little more than a well-organized method for converting natural resources into garbage. I studied modern economic theory on the assumption that our political leaders would work to change the flaws once I was able to point them out.

I became aware that something was fundamentally wrong in our political system when I ran for public office. The more I studied politics, the more bizarre it looked. I finally realized it wasn’t anything like the “democracy” it claimed to be. It turns out that America is actually a stealth plutocracy http://www.dieoff.org/page168.htm !

Working full-time for more than a decade, I studied it all: the history of our so-called “democracy”, the fundamentals and history of modern economics, sociology, cybernetics, system theory, biology, ecology, microbiology, evolution theory, physics, and so on.

After several years of research, I concluded that little — if any — of the so-called “social sciences” (including economics) taught in our universities had anything relevant to say about the real world. Instead of discovering facts and principles, most social science is little more than a program designed to “rationalize” (invent socially-acceptable excuses for) the current plutocracy. Moreover, I was astonished to find that the global economy is based upon Catholic religious dogma that I was able to trace back to St. Thomas http://www.dieoff.com/page243.htm ! Eventually I discarded social science altogether because it had absolutely nothing worthwhile to say about sustainability.

By placing the results of my research in order of importance for sustainability, I can simplify over ten years’ work down to two sets of physical “laws”. These laws place harsh limits on what is possible for us: #1 ENERGY LAWS, and #2 BIOLOGICAL EVOLUTION LAWS. For purposes of sustainability, nothing else matters.

Once I was able to understand Odum’s “eMergy” metric (actually very simple, but difficult for old minds), I realized there are only three relevant principles concerning energy: the First Law of thermodynamics (no creation), the Second Law (always a loss), and the “Net eMergy” principle (“net energy” converted for “quality”) http://www.dieoff.org/synopsis.htm .

Once one understands the three simple principles outlined in the paragraph above, then one understands that the only way our society could actually be “sustainable” would be to continuously reduce our aggregate energy footprint — less consumption AND less people — until the global population level is back to a couple-a-hundred-million people swinging through the trees. This is also Georgescu-Roegen’s conclusion http://www.dieoff.org/page148.htm . That’s the easy part…

With great reluctance (because it has worked so well for me), I was forced to conclude that our present system of capitalism is incompatible with energy laws and can never be sustainable. My only hope was that some new form of sustainable society might be possible. So I began studying human nature, intending to discover what kinds of sustainable societies might work…

Human nature is much more difficult to understand than energy laws for two main reasons: it’s not taught, and we are genetically biased against self-knowledge. In other words, teaching human nature to someone is something like teaching a dog not to bark http://www.dieoff.com/page193.htm .

I will reduce several years’ research on human nature down to the essentials: A COMPUTER ANALOG, and A SOCIAL PRINCIPLE. For purposes of sustainability, everything else about human nature can be ignored — it simply doesn’t matter.

Computer software cannot function before it is enabled by the hardware. In other words, functioning hardware MUST precede functioning software.

Human thought is analogous to computer software. Any particular thought (software) cannot precede the neurons, dendrites, neurotransmitters, etc (hardware) that make that specific thought possible. Like all computers, human hardware is the physical prerequisite to human software — but that’s where the similarity with everyday computers ends.

Human brains are much different than the stored-program, digital, binary, single processor PCs we use every day. Instead, human brains are wired (not stored-program), analog (not digital, not binary), multiprocessor (not single processor) “state machines” (program logic may permanently modify itself depending upon the data). A human cannot have a specific thought unless it has been enabled by earlier brain “wiring” (e.g., pre-programmed, formal education, reflection, critical thinking). Moreover, older brains are much harder to “wire” than younger brains.

Brains are mostly hardwired by age 25. By middle age, people may need two or three years of hard work to understand something completely new (grow the brain hardware required to think the thought).

The human brain comes from the factory with a set of empirically designed pre-programs that have historically (over a billion years) tended to maximize “inclusive fitness”. One of these pre-programs was specifically designed to inhibit self-knowledge with respect to social issues. By remaining unaware of our true motives, we are much more effective at deceiving others. We evolved this way because the more convincing liar has the advantage in sexual competition (e.g., Bill Clinton).

In short, people cannot think a thought unless the brain has been previously “wired” to think it. This is why civilization after civilization runs out of energy and collapses http://dieoff.com/page134.htm . This is also why we are presently running out of energy and hell-bent for collapse.

Contrary to the received wisdom, people do not think and then act. They act and then rationalize. New data from the environment is routinely plugged into existing mental hardware (like entering a number into a spreadsheet), which is then followed by an appropriate thought. Since people have no wiring for “peak in oil and gas production”, news of the present energy crisis cannot generate the appropriate thought. Only prolonged reflection can grow the required mental hardware to place this critical piece of news in perspective. Unfortunately, only a few people can invest the thousands-and-thousands of hours necessary to see both the energy and evolutionary aspects of the human condition clearly.

Individuals come from the factory pre-programmed to seek inclusive fitness in ways that have actually worked in the past. In modern society, economic growth serves as a proxy for increasing fitness. This is why we “feel good” when we make money, buy a new SUV, and so on. Unfortunately, when our pre-program determines that inclusive fitness is best served by violating social norms, we will violate those norms and seek a fitness advantage. This explains the higher crime rates in our lower income populations and why nations go to war.

Societies can remain reasonably stable as long as their economies continue to grow — continue to serve inclusive fitness for the majority. But when economic growth becomes physically impossible — as it must — societies will disintegrate into anarchy and war, as individuals and groups seek advantage.

Once one understands the three simple energy principles outlined in this paper, then one understands that the only way our society could be actually be “sustainable”, would be to continuously reduce our aggregate energy footprint. Put differently, energy laws will force us to continuously reduce our aggregate footprint whether we choose to or not.

Once one understands human nature as outlined in this paper, then one also understands that continued social stability requires us to continuously INCREASE energy use, which we now know is impossible! It should not come as a surprise that we have been pre-programmed to overshoot and crash just like other animals http://www.dieoff.org/page80.htm .

There are absolutely no humane solutions available to the ruling elite because it is impossible to solve the problem of human corruption (i.e., the genetic pre-program to violate norms and seek advantage). Unfortunately, the best the poor can hope for is a painless death.

Since human nature is so terribly difficult to understand (I needed about five years), I am willing to participate in a moderated discussion group to explain the contents of this paper — providing enough people are interested — and someone volunteers to do the moderating. There will be no “political” discussions on the list. Go somewhere else if you want to talk politics.

It will be a few weeks before I can get the list started. Send a note to me at j@qmail.com if you are interested. Be sure the word “farewell” is in the title of your email so I won’t delete it as spam. (I use a “white list” spam filter.)

Farewell and good luck,



I dont profess to agree with all of Jay’s ideas, but everytime I’ve thought I logically or verbally cornered him in the past, he replied with “Nate, you still haven’t read enough biology, not by a longshot”. After starting here, I’ve recently buttressed my biology background with the following titles: The Tangled Wing, by Melvin Konner, The Moral Animal, by Robert Wright, Biological Anthropology- The Natural History of Humankind, The Selfish Gene by Richard Dawkins, The Extended Phenotype by Richard Dawkins, The Red Queen by Matt Ridley, The Spirit in the Gene – Humanities Proud Illusion and the Laws of Nature – by Reg Morrison, and Evolution, by Colin Patterson.

Biology and behaviour are underrepresented in discussions of resource depletion.

Source: http://www.theoildrum.com/story/2006/7/13/21018/2121


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