"Bailout lament: What about me? Many who played by rules see unfairness" by Robert Gavin and Jenifer B. McKim, Globe Staff | February 22, 2009
Brian Carpenter bought his Woburn home in 1980, and 29 years later, he has never missed a mortgage payment. It wasn't always easy. With three kids, it meant driving old cars, clipping coupons, and brown-bagging it to work.
Now, he sees the federal government committing nearly $1 trillion to bail out banks and struggling homeowners, and nearly $800 billion to offset economic damage caused by reckless lending and borrowing. What's in it for him? Probably $13-a-week, the middle-class tax cut in the stimulus bill....
Carpenter is among the vast majority of Americans who work, pay mortgages, borrow responsibly, and now find themselves facing the bill to bail out those who didn't. Over the years they lived within their means. Now they're asking: What for?
Of course, NEVER MIND the WAR LOOTERS, BANKS, or ISRAEL sucking money out of us!!! It's the NEIGHBOR NEXT DOOR whose a prick!
The anger underscores the dangers government faces in private sector rescues. While such interventions aim to benefit everyone by preventing severe damage to the economy, they also risk encouraging irresponsible behavior in the future. Economists call this "moral hazard."
In other words, if homeowners believe the government will lower their payments if they fall behind, they won't have as much incentive to keep paying mortgage bills on time.
"We're telling individuals, 'Go ahead, buy a bigger house than you think you can afford because the government is going to bail you out,' " said Dan Mitchell, economist at the Cato Institute, a libertarian think tank in Washington. "If you're responsible, if you do the right thing, then you feel like a sucker."
The spending on bailouts and stimulus works out to the equivalent of $11,000 for each of the nation's approximately 160 million tax filers. The total costs, however, are expected to decline when the government sells its bank stakes after the system stabilizes. But most Americans, 67 percent, don't expect this spending to improve their financial positions, according to a CNN/Opinion Research Corp. poll conducted last week.
Randy Schmid, 50, of Worcester, is one of them. A self-employed consultant, Schmid and his wife Dominika are renters. They looked into buying a home a few years ago. They hoped to find a house they could afford on a single income, so if one of them lost work, they could still meet their obligations. They didn't.
"If we would have lived beyond our means," he said, "we would have gotten a handout."
It's NOT YOUR FELLOW HOMEOWNERS that are getting the breaks, ignorant s***ters!!!!!
At one level, the massive government intervention is aimed only at certain segments of the population. For example, 93 percent of homeowners are up-to-date on their mortgages. Obama's $275 billion housing plan unveiled last week aims to help as many as 9 million homeowners who are facing foreclosure or struggling to pay their mortgage. More than 140 million Americans are working, compared with about 12 million unemployed. The $787 billion stimulus signed into law last week extends unemployment benefits and subsidizes healthcare coverage for the unemployed.
Yeah, NEVER MIND the WELFARE for the RICH and ALL the TAX DOUGH SHOVELED at THEM!!!!! Why don't you just dig into each other's throats, s***-eating 'murkn!
But the hope is that this targeted intervention will stabilize, then lift the economy as a whole. Many economists say foreclosures and unemployment will soar without massive government spending. The economy has slipped into a downward cycle of tightening credit, falling spending, and shrinking demand, resulting in rising layoffs and foreclosures that begin the cycle again.
Nariman Behravesh, chief economist at IHS Global Insight in Lexington, agreed that it is unfair that people who made good decisions pay for those who didn't. But the costs would be much higher without government help to boost demand, create jobs, and stabilize the housing market.
"When you get a situation where the economy is in a free fall, the governments role is to fix the system," Behravesh said. "What's in it for everyone is this great recession doesn't morph into the Great Depression, version 2.0."
At its worst, nearly 1 in 2 first mortgages were in default during the Great Depression and 1 in 4 workers were jobless. Double-digit unemployment rates lasted for more than a decade. The current US unemployment rate is 7.6 percent. Not all people in trouble now acted irresponsibly. Some just had bad timing.
Leigh Bigger, a case worker with state Department of Youth Services, thought she was helping herself and the neighborhood when she bought a Brockton three-decker for $357,000 in 2004 and kicked out the drug dealer on the first floor.
But when she tried to refinance her adjustable-rate mortgage a year later, her lender decided a three-decker represented too big a risk and balked at giving her a fixed-rate loan. She got one eventually, but at an 8 percent rate that increased her payments to $3,800 a month from $2,800. She then had trouble filling her rental units, and couldn't keep up the mortgage.
She's been trying, without success, to negotiate a lower interest rate with her lender.
"I'm a Christian, God-believing person, whatever happens in my situation, I am going to be OK," said Bigger, 45. "Overall, we do need a sacrifice and bailout to help people. Somehow we have to help people who are keeping neighborhoods intact."
Representative Barney Frank, the Newton Democrat who chairs the House Financial Services Committee, said he understands people's frustrations and expects Congress to pass laws that would prevent errors and abuses that sparked the crisis.
They said they already had that, and now we find out.... ??
In the meantime, Frank said, government must act to stop the housing slide, which continues to undermine home values, banks, consumer spending and the broader economy....
Jane Cummings, a 34-year-old software engineer from Hamilton, also has mixed feelings. She said she believes the government needed to do something to help the economy. But she added, "I don't think they should be bailing out people who aren't making good financial decisions. It's not fair, but I think we might have to bite the bullet."
You mean, LIKE BANKS?
Many others take a harsher view, objecting to the idea of taxpayer money going to help people who borrowed and spent without regard to consequences. "I don't appreciate paying for someone else's mortgage," said Ashling Gowell, 38, a stay-at-home mother who lives in southeastern Massachusetts. "I almost feel its bailing out someone who overspent on their credit card."
That's NOT WHAT YOU DID! We've paid for BANKS to STUFF THEIR POCKETS -- all when it would have COST a LOT LESS to PAY OFF ALL MORTGAGES!!!!
Certainly, said Steve Pratt, who co-owns a small healthcare consulting firm, there are people who deserve help, such as those who lost jobs and are struggling to pay mortgages. Unfortunately, said Pratt, 49, of Braintree, the bailouts reward people who were greedy, stupid, or both.
"They're not differentiating the people really in need from the people who took on too much debt and pushed it to the limits of what they could pay," Pratt said. "Personal responsibility got lost. Now, we're all going to pay."
--more--"Yeah, NO ONE is ANGRY at the LOOTING CROOKS that CAUSED ALL THIS, huh, lying MSM? How come you are NOT COVERING THOSE PROTESTS, huh?
Now watch them pit old against young:
"Feeling jobbed; Work for teens scarcer as elders defer retirement" by Robert Gavin, Globe Staff | February 28, 2009
.... A worrisome trend. As older Americans, by necessity or choice, work beyond traditional retirement ages, young men and women are increasingly shut out from the job market....
That's why the MILITARY is there, kiddos!!! Ten-hut!
**********************
The implications for the US economy are serious, since young workers will be called on to support a burgeoning population of elderly baby boomers, said Andrew Sum, the center's director and the study's lead author. Work experience at a young age develops skills and habits that lead to greater productivity, employability, and higher wages over the long term, but increasingly, teens and young adults are denied these formative opportunities....
Ah, WHO CARES about the KIDS, anyway?
Industries that traditionally offered work to teens, such as retail, food service, and entertainment, are increasingly filling jobs with older workers.... Sum said the federal government needs to create job programs aimed at teens and young adults, including wage subsidies to encourage employers to hire them. The study calls for programs to create up to 1 million summer jobs for young adults in school and 500,000 full-time jobs for those out of school.
How deep is that taxpayer wallet, and what jobs are they going to "create?"
Mitsouka Exantus, 16, a junior at Boston International High School, began looking for an after-school job to earn money for college and help her family because her mother is out of work. Exantus tried retailers and fast-food restaurants, but a year later, she's still searching....
Been ALMOST TWO here!!!!
In many cases, said Jon Hurst, president of the Retailers Association of Massachusetts, stores can't afford to hire, train, and teach work skills to teens. In Massachusetts, for example, state law requires retailers to pay a minimum wage of $8 an hour and time-and-a-half on Sunday.
That is SUCH a HORSESHIT EXCUSE for not hiring the kids!!! Which is strange, because around here there are nothing but young, dumb, snot-noses that can't help you in the stores.
"A 14-year-old getting $12 per hour minimum on Sundays to bag groceries by and large is not going to be as productive for your wage investment as someone who has years of experience in the job market," Hurst said. "All things being equal, you are naturally going to hire the more productive and experienced worker."
Or WHOMEVER ELSE is CHEAPER, illegal or otherwise!!!!!
Several factors, meanwhile, are increasing participation of older adults in the workforce, starting with longer lives and the need to finance longer retirements, according to economists. Soaring healthcare costs, the demise of traditional pensions, and the erosion of retirement accounts in Wall Street's meltdown have also compelled many to keep working.
So much for those GOLDEN YEARS, 'eh?
John Elwell took an entry-level sales job at L.L. Bean in Freeport, Maine, to supplement his income after retiring more than decade ago as a marketing manager for a manufacturer of store-brand products. Now 73, he's still working on the floor of the women's department. He plans to stay two more years.
"I wanted to stay busy," said Elwell. "With what's happened to 401(k)s lately, it's been a blessing in disguise."
NOT for the KID -- or the RETIREMENT ACCOUNTS of MILLIONS; however, the Globe actually shovels this shit.
With some 78 million baby boomers reaching retirement age over the next 20 years, many companies have launched efforts to recruit and retain older workers because of concerns about future labor shortages....
It'd be nice if you guys used some vaseline before you fucked us, 'eh?
--more--"Of course, here are some guys who don't have to worry about fighting over shit-scraps!
"Venture capital sector makes adjustments" by Scott Kirsner | March 1, 2009
For Boston's venture capital community, headquartered on the placid plateau of Mount Money in Waltham, 2009 will be a year of wrenching change. The stream of capital flowing to venture capital firms, that invest in innovative-but-risky private companies, is turning to a rivulet - and that means the firms themselves will have to get smaller.
"Last year, our industry raised about $28 billion in new investment capital," says Michael Greeley, chairman of the New England Venture Capital Association and managing director of Flybridge Capital Partners in Boston. "I think we'll raise between $8 billion and $12 billion this year, nationally. That's a dramatic reduction. My sense is that the average fund size will be cut in half, and they'll have to cut the number of partners who work for them as a result."
The shrinkage of Boston's venture capital sector will be tough for the venture capitalists, obviously, and also for entrepreneurs who ascend Mount Money with their PowerPoint presentations, looking for funding to launch a company or keep one going. But it could also have a silver lining.
Here's what's happening.
Two local venture capital firms have already put together smaller investment pools than they'd hoped for. Atlas Venture, in Waltham, had aimed to raise about $400 million but wound up with $238 million; as a result, last month Atlas jettisoned two of its partners and shifted two others to less active roles. Boston-based Bain Capital Ventures this year will likely wind up raising between $475 million and $550 million for its latest fund, rather than the $750 million it had set out to collect. Money in a venture capital fund is typically invested over the course of a decade.
Aww, poor babies, huh? ONLY raised nearly half a billion!
Many other local firms are talking to prospective sugar daddies. Among them are Boston Millennia Partners, Highland Capital Partners, Polaris Venture Partners, Prism VentureWorks, Oxford Bioscience Partners, Charles River Ventures, and North Bridge Venture Partners. New firms, like Genovation Capital and a medical device oriented fund called Makaira Venture Partners, are trying to raise their first funds.
Venture capitalists are prohibited by the Securities and Exchange Commission from discussing their fund-raising activities. But one partner at a Boston area firm that's trying to put together its next fund told me last week that fund-raising is happening "on a molasses pace," adding that "universally, everyone is going to be lower than what they'd hoped to raise."
One reason that the limited partners are avoiding commitments to new funds is that many of them have formulas for how they allocate their assets. If a certain percentage is devoted to bonds, stocks, and venture capital and private equity, for instance, things start to look out of whack when the stock portion of the portfolio plunges and the value of the venture capital portion stays roughly the same. (The valuations of the private companies in a venture capital firm's portfolio isn't updated very frequently, unlike publicly traded stocks.)
If a limited partner needs to get the mix of asset allocation back in order, investing in new funds simply doesn't happen. And investors who can't get their money into the best-performing venture firms may simply be disappointed with the financial returns they get. "I've heard limited partners say that the V.C. business, in some cases, is like getting Treasury bill returns with venture capital levels of risk," says Michael Feinstein, a former venture capitalist. "If you look at the median venture capital return over the past eight years, it's about 1 percent a year."
Josh Lerner, a Harvard Business School professor who studies the venture capital industry, describes what's happening among limited partners as "a changing of the guard." University endowments and US pension funds are becoming smaller players in new venture capital funds, Lerner says. But what's not clear is who will take up the slack.
The upshot is that venture capital firms will be managing smaller funds, and some firms will go out of business. Anderson predicts that some funds that aren't in the 25 percent when it comes to delivering financial returns will simply fade into the sunset. "Not everyone is above average," he says.
Fewer firms and smaller funds will obviously mean fewer jobs for venture capitalists and the staffers who support them. It'll undoubtedly get harder for start-ups to raise money. It will take longer, and those that do manage to attract an initial jolt of capital will get less of it than before.
"There just won't be as much money flying around," says Todd Dagres, founder of Spark Capital in Boston. "And there's good in that" because entrepreneurs will run up against fewer well-funded competitors than they once did.
So COMPETITION is BAD?
Still, a contracting venture capital universe isn't going to be as fun to inhabit as an expanding one - at least for most people, at least in the near term.
Yeah, ROLLING in MONEY is fun, isn't it?
