The Truth.... again

[Narcotized]

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OK, I the video I posted was removed by the user. It's one the best videos you'll see explaining just how bad shape we are in. So let me try this again:


Obama is out on some delusional "Recovery Summer Tour." Here is reality, a short movie that won the 'Best Feature Documentary' award at the San Francisco Frozen Film Festival. Sometimes the truth isn't pretty.

The Movie, Parts 1, 2, and 3

http://www.youtube.com/watch?v=m6FNYvC4uyM&feature=related
http://www.youtube.com/watch?v=vYiRMHi_mF0&feature=related
http://www.youtube.com/watch?v=_17ck3Vti8A&feature=related

 

[Narcotized]

I watched the documentary again. I gotta say, I cringe when I hear George Bush speak. He really is a dim bulb. I bash Obama a lot for being extremely intellectually overrated, and for good reason; Obama is completely economically clueless and shows totally inept math skills. But to be fair to both sides, when George Bush speaks about home ownership and other economic issues in the documentary, I'm left speechless. How did somebody so inept get control of the wheel for 8 years?

 

[pgg]

I watched the documentary again. I gotta say, I cringe when I hear George Bush speak. He really is a dim bulb. I bash Obama a lot for being extremely intellectually overrated, and for good reason; Obama is completely economically clueless and shows totally inept math skills. But to be fair to both sides, when George Bush speaks about home ownership and other economic issues in the documentary, I'm left speechless. How did somebody so inept get control of the wheel for 8 years?

He was just a straight shooter, talkin' nuts 'n' bolts sense to the common folk.

Back during the election, when it became clear to everyone except the Palin-Americans that Obama was going to win, I actually took some comfort in thinking that 'at least smart people will be in charge again' ...

Oh well.


I didn't qualify for the homebuyer credit last year, and I didn't have a clunker to cash in ... But with all the stimulus flying around, I'm still getting mine in the form of a 30% federal tax credit and huge state rebate for a photovoltaic system. They're on my roof right now bolting down my government subsidized solar panels.

Even if they weren't 1/2 off at your expense 🙂 it'd probably be money well spent given the near certainty that energy costs will be rising and rising and rising ... I'm not real enthusiastic about putting money into the stock market these days, tips from 2win notwithstanding 😉, so I'm investing in 'stuff' that's going to be useful.

 

[Narcotized]

30% federal tax credit and huge state rebate for a photovoltaic system.... 1/2 off at your expense

Glad we could be of assistance!! 🙂

With AC bills through the roof this year I may just look into that.

 

[pgg]

Glad we could be of assistance!! 🙂

Hey, I'm entitled.

Actually, I was simultaneously disappointed and relieved to discover that the tax credits won't apply to the separate solar heating system for my pool. Thought I was going to get more cheese there, but at least the gov isn't subsidizing swimming pools yet.

With AC bills through the roof this year I may just look into that.

This summer was cooler than last year and we had the AC set higher (~82 most days), but our power bills still went up about 50%. Our power bills are easily 3x what they were a few years ago in Virginia & North Carolina. I'll have to look at last year's bills, but I think what they did was adjust the thresholds at which they raise the rates to encourage conservation. It wasn't too long ago that California had regular rolling brownouts.

We spent most of the summer well into the $.31/kwh tier for electricity.

Maybe I need a less Al-Gore-like house, or kids that don't leave the fridge open or the lights on.

 

[Narcotized]

This summer was cooler than last year and we had the AC set higher (~82 most days), but our power bills still went up about 50%. Our power bills are easily 3x what they were a few years ago in Virginia & North Carolina. I'll have to look at last year's bills, but I think what they did was adjust the thresholds at which they raise the rates to encourage conservation. It wasn't too long ago that California had regular rolling brownouts.

So how much did this stuff cost you after the Obama half-off sale, and what percentage of savings do you expect off future electric bills? Also, is there much storage capability for the electricity, or are you in the dark (literally) when the sun goes down (if you didn't have power company backup)?

 

[gclax30]

Can someone explain (in simpleton terms) what mortgage-backed securities are and how they factored into this whole mess? I kinda missed that part in the video.

 

[pgg]

So how much did this stuff cost you after the Obama half-off sale, and what percentage of savings do you expect off future electric bills? Also, is there much storage capability for the electricity, or are you in the dark (literally) when the sun goes down (if you didn't have power company backup)?

House gets average 5.7 h/day full sun per the insolation maps. Obviously much more in the summer and less in the winter, but that's the average published figure. We're starting off with 4.6 kw of panels.

Given those numbers, expected power production should be roughly 4.6 x 5.7 x 365 = 9570 kwh/year. The panels have a 25 year warranty and retain the great majority of their conversion efficiency over that time, but production will decline very gradually.

It's a grid tied system. Power produced will reduce our grid consumption in the highest tier, so 9570 kwh x $.315/kwh = $3015/year in power production at today's rates. It will likely be a bit less than that though since we don't get into the $.315/kwh tier consistently during winter months. Maybe 1/4 of the production will save utility use around $.27/kwh which I think is the next lowest tier.

$33K system cost. $7/watt is actually fairly pricey by the standards of today's DIYers, but in the end it costs me less to work more hours and pay professionals to put it together than to buy parts and do it myself. After rebates and tax credits our share is just over $17K (parts, installation, permits, grid tie, etc), so the system should break even after about 6-7 years, even if utility prices don't go up (they will). And of course at that point the system will still have 2+ decades of useful production.

Reality may not live up to what the math promises, but it seems a surer bet than the S&P 500.


No battery backup at present, though that's a future option. During a grid outage, the system shuts itself off so utility workers don't get fried. Unfortunately this means that even during daylight, if the grid is down we are too. During a prolonged outage, it could be manually disconnected from the grid and the panels would produce power for just us during daylight hours.

We probably won't ever add a significant battery bank to this system. Even with the subsidies, the grid-tied system barely makes economic sense. Batteries only make sense if utility backup isn't available ... or if you think widespread, prolonged utility outages are likely. I'm not that pessimistic about the USA yet. 🙂



Oh, and it's the environmental equivalent of planting 2.1 acres of trees. Not sure how they arrive at that figure.

 

[pgg]

Can someone explain (in simpleton terms) what mortgage-backed securities are and how they factored into this whole mess? I kinda missed that part in the video.

A bunch of people with no money, whose careers consisted of checking receipts at Walmart, bought houses they had no rational business buying, via mostly no-document adjustable-rate and/or interest-only mortgages they couldn't afford to pay very long.

The banks and brokers who handed out these mortgages made up-front money via origination fees and other points. Today, they are either rich, or richER if they started out rich.

They bundled these worthless mortgages (which were never going to be repaid by the "homeowner") into securities that some not-quite-impartial-and-honest people rubber-stamped with an official seal of approval and quality rating, and sold them so that somebody else would be left holding the bag when said "homeowners" discovered that a Walmart Greeter salary wouldn't cover the mortgage when the rate adjusted or the interest-only period was over.

At some point even the *****s who bought these mortgaged-backed securities clued into how worthless they were. Most of these *****s, however, were clever enough to have the right kind of connections in government.

The federal government, in its infinite wisdom, printed a ton of money and bought up (and is buying up) much of this bad debt through Fannie Mae and Freddie Mac, two organizations dedicated to promoting the American Dream, even to people who need to wake up, quit dreaming, and rent (not buy) a humble abode more within their means.

This is a problem because, well, the federal government printed a bunch of paper money to buy paper securities worth far, far less than the paper money they printed to buy it. Ultimately, this will inflate the paper money you and I earn, save, and invest. Inflation is nothing special; just a sneaky mechanism by which governments transfer actual wealth from its productive/saving/investing citizens to fuel its own spending (which has, of late, focused on bailing out nonproductive/indebted/foolish people and corporations).

I think some people are under the illusion that the crisis passed when the housing bubble popped, but the government is still buying up bad debt and doing other dumb stuff to artificially prop up the housing market (eg, last year's homebuyer tax credit).

But I'm no economist.

 

[GasEmDee]

So, where do you decide to keep your money in this circumstance?

A bunch of people with no money, whose careers consisted of checking receipts at Walmart, bought houses they had no rational business buying, via mostly no-document adjustable-rate and/or interest-only mortgages they couldn't afford to pay very long.

The banks and brokers who handed out these mortgages made up-front money via origination fees and other points. Today, they are either rich, or richER if they started out rich.

They bundled these worthless mortgages (which were never going to be repaid by the "homeowner") into securities that some not-quite-impartial-and-honest people rubber-stamped with an official seal of approval and quality rating, and sold them so that somebody else would be left holding the bag when said "homeowners" discovered that a Walmart Greeter salary wouldn't cover the mortgage when the rate adjusted or the interest-only period was over.

At some point even the *****s who bought these mortgaged-backed securities clued into how worthless they were. Most of these *****s, however, were clever enough to have the right kind of connections in government.

The federal government, in its infinite wisdom, printed a ton of money and bought up (and is buying up) much of this bad debt through Fannie Mae and Freddie Mac, two organizations dedicated to promoting the American Dream, even to people who need to wake up, quit dreaming, and rent (not buy) a humble abode more within their means.

This is a problem because, well, the federal government printed a bunch of paper money to buy paper securities worth far, far less than the paper money they printed to buy it. Ultimately, this will inflate the paper money you and I earn, save, and invest. Inflation is nothing special; just a sneaky mechanism by which governments transfer actual wealth from its productive/saving/investing citizens to fuel its own spending (which has, of late, focused on bailing out nonproductive/indebted/foolish people and corporations).

I think some people are under the illusion that the crisis passed when the housing bubble popped, but the government is still buying up bad debt and doing other dumb stuff to artificially prop up the housing market (eg, last year's homebuyer tax credit).

But I'm no economist.

 

[IlDestriero]

So, where do you decide to keep your money in this circumstance?

He puts his $$ in solar panels.😉
I actually looked into solar as well, but a much larger system. I may still. We'll see. One of my colleagues did, and he's happy. I was looking at about $50k and 7-12 years to recover, than about 10 years in the black. It does make sense on paper, especially with electricity rates on the rise across the board. The real issue is that I don't think I'll get the money back if I sell, and I'm not sure I want to stay in my current home/locale for 15-20 years.

 

[Narcotized]

A bunch of people with no money, whose careers consisted of checking receipts at Walmart, bought houses they had no rational business buying, via mostly no-document adjustable-rate and/or interest-only mortgages they couldn't afford to pay very long.

The banks and brokers who handed out these mortgages made up-front money via origination fees and other points. Today, they are either rich, or richER if they started out rich.

They bundled these worthless mortgages (which were never going to be repaid by the "homeowner") into securities that some not-quite-impartial-and-honest people rubber-stamped with an official seal of approval and quality rating, and sold them so that somebody else would be left holding the bag when said "homeowners" discovered that a Walmart Greeter salary wouldn't cover the mortgage when the rate adjusted or the interest-only period was over.

At some point even the *****s who bought these mortgaged-backed securities clued into how worthless they were. Most of these *****s, however, were clever enough to have the right kind of connections in government.

The federal government, in its infinite wisdom, printed a ton of money and bought up (and is buying up) much of this bad debt through Fannie Mae and Freddie Mac, two organizations dedicated to promoting the American Dream, even to people who need to wake up, quit dreaming, and rent (not buy) a humble abode more within their means.

This is a problem because, well, the federal government printed a bunch of paper money to buy paper securities worth far, far less than the paper money they printed to buy it. Ultimately, this will inflate the paper money you and I earn, save, and invest. Inflation is nothing special; just a sneaky mechanism by which governments transfer actual wealth from its productive/saving/investing citizens to fuel its own spending (which has, of late, focused on bailing out nonproductive/indebted/foolish people and corporations).

I think some people are under the illusion that the crisis passed when the housing bubble popped, but the government is still buying up bad debt and doing other dumb stuff to artificially prop up the housing market (eg, last year's homebuyer tax credit).

But I'm no economist.

You may be no economist, but I think only Peter Schiff could give as clear and as accurate a description of what happened. Most "economists" had no idea what was happening, still have no idea what happened, and have no idea that all these additional government measures are screwing it all up even worse than they already screwed it up initially.

Most government action is centered around how can we get something for free today, and not giving a damn that it costs you just as much to pay it back in the future plus interest. All of those initial measures to ramp up the economy have a one time hit. That is, if government can get people that were living within their means to borrow a bunch of money they could then buy a lot more stuff. This would be a one time hit for the economy; ie, you can't borrow indefinitely. Once you maxed out everyone's credit (including local, state, and federal government), all you are left with is debt plus interest.

That's the initial F-up. The followup F-up is when government then tries to magically make these problems disappear through voodoo; "stimulus," bailouts, handouts, house credits, etc. This takes an initial problem of significant fiscal irresponsibility, and intensely compounds it with massive fiscal irresponsibility. You're not going to borrow and binge your way out of a debt problem caused by borrowing and binging.

It's so damn basic and obvious that if you don't see it, you really aren't trying to see it. If you drop all of your feelings and blinders regarding gays, trees, abortion, republicans, george bush, illegals, healthcare, and wars on the other side of the globe; and focus solely on the economy, the only conclusion is Barack Obama has not made one single intelligent move regarding our dismal economy, but has made countless incredibly stupid moves.

 

[pgg]

So, where do you decide to keep your money in this circumstance?

He puts his $$ in solar panels.

🙂

Majority currently cash and bonds, with the intent to put much of that into something else as opportunities arise (could be a big dip in the stock market, as much as I mock 'market timers' ... but we've also thought about buying some land near my wife's family's land in the Sierra Nevada foothills that may be available in the next couple years, so we want to be relatively liquid). One rental property. We have some exposure to the stock market through TSP (the military's 401k-ish program) but not a lot. Small amount of PM purchases every month (not gold), though still under 20% of everything we've got.

I actually looked into solar as well, but a much larger system. I may still. We'll see. One of my colleagues did, and he's happy. I was looking at about $50k and 7-12 years to recover, than about 10 years in the black. It does make sense on paper, especially with electricity rates on the rise across the board. The real issue is that I don't think I'll get the money back if I sell, and I'm not sure I want to stay in my current home/locale for 15-20 years.

Yeah, the only reason it made sense for us is that we're well into the $.315/kwh tier every month. We didn't get a system large enough to cover 100% of our power use, just enough to routinely get us out of that tier. Another problem with a larger system we considered was that we didn't have enough 'optimal' roof space to fit panels on, and we would've lost efficiency from non south/west facing panels.

It's also something of a bet/hedge against rising energy costs, which seems likely.

I've got another 4 years here in the Navy, and we'll likely stay a few more so our kids can finish high school. Cheap rural area (except for CA taxes), good schools, good pay from growing/expanding anesthesia group. I think we'll be here through 2019, before we permanently escape to someplace in mountainous flyover country.

But even if we move before then, it's not like we can't take the panels with us. The great bulk of the system's cost is components; a couple days with a screwdriver and those components could go with us. Hard to say what it adds to the house's value, but something less than what we paid, something more than zero.

 

[pgg]

It's so damn basic and obvious that if you don't see it, you really aren't trying to see it. If you drop all of your feelings and blinders regarding gays, trees, abortion, republicans, george bush, illegals, healthcare, and wars on the other side of the globe; and focus solely on the economy, the only conclusion is Barack Obama has not made one single intelligent move regarding our dismal economy, but has made countless incredibly stupid moves.

Classic example - Cash For Clunkers.

If, like you said, you set aside political leanings, and take a step back and just think about the overall premise: Take scarce dollars raised through taxes or printing/currency-devaluation, and spend that money to deliberately destroy functioning capital.

It's so heart-stoppingly and bile-regurgitatingly stupid that I can't believe there are people out there who ever thought or still think it was a good idea.


It's like going around breaking windows so the glazier gets more business. Unfortunately, while I'm 100% sure you get this reference, it's obvious that the people who create or support programs like Cash For Clunkers don't. (Or they do, but have cynical ulterior motives and conflicts of interest.)

 

[GasEmDee]

Yep.

I knew people who bought old, junked cars for a few hundred dollars, so that they could cash in on this program for thousands of dollars.

Classic example - Cash For Clunkers.

If, like you said, you set aside political leanings, and take a step back and just think about the overall premise: Take scarce dollars raised through taxes or printing/currency-devaluation, and spend that money to deliberately destroy functioning capital.

It's so heart-stoppingly and bile-regurgitatingly stupid that I can't believe there are people out there who ever thought or still think it was a good idea.


It's like going around breaking windows so the glazier gets more business. Unfortunately, while I'm 100% sure you get this reference, it's obvious that the people who create or support programs like Cash For Clunkers don't. (Or they do, but have cynical ulterior motives and conflicts of interest.)