Ominous numbers are plentiful

Robert Holt ~ Sept. 1, 2010

Some of those that read these articles have asked me why I write so much about the economy in an article about real estate. Well, simply put, the two are so closely connected and intertwined that as one goes so does the other. Because the economy and the real estate market influence each other, we cannot speak of one without speaking of the other. When real estate is going up or down it is because the economy is doing the same.
Last week I pointed to some of the most recent housing numbers and by all accounts, they were dismal at best. This past week we had more of the same, but despite the gloomy numbers, the stock market rose 163 points on Friday. Clearly there is a major disconnect between the real world and how the market responds. The rise in the market also tells me the blind bulls are searching for any bit of good news they can find. This is made obvious when we see investors rejoice and the market go up despite some pretty scary economic numbers. I cannot find the same comfort in these numbers nor do I find reasons to celebrate just because the numbers are not as bad as they could have been.
For example, investors were delighted to hear that there were 473,000 initial jobless claims filed in the week ending Aug. 21, down from 504,000 the previous week. Now don’t get me wrong - I want to see the glass as being half full, but there were still nearly half a million people who lost their job last week. Am I missing something here? I mean that is bad – right?
Wall Street also jumped for joy as the nation's gross domestic product (GDP), was revised sharply lower to an annual growth rate of 1.6 percent in the three months ending in June. This means the economy is nearly at a standstill despite billions of dollars in stimulus from the government. However, since the 1.6 percent was not as low as the 1.4 percent, some economists had forecasted the market surged higher.
Meanwhile the U.S. consumers, who account for more than 70 percent of U.S. GDP are keeping their wallets and purses snapped shut.
Someone should remind the experts that while 1.6 percent shows the economy has a pulse, it is still in the intensive care unit. Growth this slow is not going to encourage any business to start hiring anytime soon and as long as we have high unemployment, the economy is not going to expand.
Because unemployment remains high (now estimated as high as 20 percent when factoring in under employment and those who have stopped looking for work), the number of people falling behind on their mortgages is on the rise. The Mortgage Bankers Association’s latest report estimates that nearly 14 percent of all homeowners with a mortgage are behind on their loan and are in danger of foreclosure.
Even more unsettling is the number of U.S. homes lost to foreclosure surged in July. Lenders repossessed 92,858 properties last month, up 9 percent from June and an increase of 6 percent from July 2009.
Meanwhile, the MBA reports demand for mortgages is at a 14-year low despite the historically low rates.
Also this week we saw reports that showed new home sales dropped 12.4 percent unexpectedly in July to the lowest level on record. The Commerce Department reported Wednesday that sales year-over-year fell 32.4 percent.
On Tuesday, the breaking news from the National Association of Realtors was that existing home sales were bad…historically bad as sales sank 27.2 percent in July. This was twice as much as analysts expected and the lowest level since May 1995.
It was also last week when the number of federal banks that had been taken over by the FDIC so far this year reached 118.
In other economic news, the Baltic dry index is falling off the cliff with the biggest drop in history (quarter over quarter). This index is a measure of goods being shipped around the world that now shows no one is buying much of anything, anywhere.
There was another report released by the ECRI (a company that offers cyclical forecasting) and the results were dismal. This index slumped to -10.5 percent. The main thing to know about this number is that every single time this indicator has slipped into double-digit negative territory, a recession has followed. Every single time.
Another ominous number was reached recently as the U.S. debt rose to more than 13 trillion dollars.
If you could count to a trillion at one number per second, it would take you nearly 36,000 years to reach a trillion. Now multiply that by 13.
Ironically, as the national debt clock ticked past the $13 trillion mark, Congress pressed to pass a host of supplemental spending bills.
Didn’t a guy by the name of Einstein once say “the definition of insanity is doing the same thing over and over expecting a different result”? Well, I guess we all can’t be Einsteins.
I also just found this disturbing data: The US has only $490 billion in cash compared to more than 13 trillion in debt. However, our friends in China have $5 trillion in cash and only $400 billion in debt. China is communist – right?
A note to Obama and all those running this country: The burning of Rome and The French Revolution were both sparked by massive levels of government debt.
So, for those that ask about a rebound in housing, you need only follow the economic numbers. When those turn around and people go back to work, then you will see a turn in housing. Until then, keep in mind that the only thing scarier than the truth is doing nothing about it. Robert Holt, CDPE/SFR and Christina Holt, GRI/ CDPE/SFR of The [HOLT] Group, RE/MAX Sonoran Hills. For info, visit www.TheHoltGroupAZ.com or call 623-748-9583 and tell us your thoughts.

The Declaration of Independents

Mark Shields ~ Sept. 1, 2010 ~

How influential in the most recent national elections were the three out of 10 actual voters who declare themselves to be not Democrats or Republicans, but rather independents? The answer in two words: decidedly and disproportionately.
Consider this: Prior to 2008, Indiana, having voted Republican in 16 of the 17 previous presidential elections, was about as reliably red as any state. But Democrat Barack Obama carried the Hoosier state by 28,391 votes out of more than 2.75 million cast. Because Republican John McCain and Obama each predictably won roughly nine out of 10 of the votes of his respective party members and because more Indiana voters were Republican (41 percent) than Democrat (36 percent), McCain would have won — except for the 23 percent of self-described Indiana independent voters whose 51 percent to 43 percent preference for Obama provided him an advantage of some 69,000 votes over McCain — or more than twice his entire statewide margin
Obama's winning margins among independent voters were key to his carrying Colorado, Florida, Nevada, New Mexico and Ohio, among other battleground states. But for independent voters' landslide (57 percent to 39 percent) backing of Democratic House candidates nationally in 2006 and by their 51 percent to 43 percent support for them in 2008, Democrats would not have gained 55 House seats in those two elections and the resulting majority control of the House.
But that was — most definitely — then, and that is certainly not now. Today, just 16 percent of independent voters, according to the latest Wall Street Journal-NBC News poll, are confident (either "extremely confident" or "quite confident") that President Obama has the "right set of goals and policies to improve the economy." In the Aug. 17 Gallup poll, registered voters by seven points (50 percent to 43 percent) say they "would vote for the Republican candidate for Congress" in their district. But in that same poll, independent voters — by a thumping 47 percent to 33 percent — now back the GOP House candidate.
In fact, when voter group preferences in congressional voting are compared, as Gallup has done, between September of the big Democratic year of 2006 and this not-so-currently promising year, the results are truly sobering for the current majority party. Democrats' advantage among independent voters has gone from plus 46-31 percent then to minus 47-33 percent now — a drop of 29 percent, contrasted to a 12 percent drop in the overall electorate.
Alone among winning presidential candidates in the last quarter century, according to an analysis by political journalist Ron Brownstein, George W. Bush in 2004 was able to prevail despite losing the independent vote to John Kerry by a single point. Bush had carried independents in 2000 just as Bill Clinton did in both 1992 and 1996 and George H.W. Bush had in 1988. As the independents go, so very often go American elections.
It is a mistake for Democrats to dismiss these alarming numbers by arguing that independents are unrepresentative of the electorate and are somehow Republicans traveling under an alias. Forty-three percent of independents, according to the Wall Street Journal-NBC News poll, describe themselves as moderates, and just 38 percent as conservatives.
As every baseball fan learns, the key to winning is being strong "down the middle" — which translates, in addition to having strong pitching, into the successful team having strength at the catcher's position as well as at shortstop and second base and in center field.
This may be even more true in this time of polarized politics. For a Democratic White House facing long odds in November, this means not firing their verbal shots at the liberal-left, but instead turning all its power of persuasion at courting and re-winning the decisive middle. To do otherwise guarantees failure on Nov. 2.
To find out more about Mark Shields and read his past columns, visit the Creators Syndicate web page at www.creators.com.

 

Carefree woman disagrees with judge’s interpretation

~ Sept. 1, 2010 ~

Judge Williams has done it again: under the guise of "explaining" so-called judicial activism he takes a political stand, this time on 1070 and gay marriage (Aug. 18),. And, worse, especially for a judge, he shows an alarming and basic misunderstanding of our Constitution and political process. The majority can only rule to the point that such a majority buts up against a constitutional right or principle. Then the court's job is to say - no! That is why we are a nation of law and not men; why we are a constitutional republic and not a democracy; and why the majority was never intended to rule by the Framers. All of law and freedom is based on this concept, and conservative Republicans like Williams used to understand and promote it - until courts recognized rights they appalled and made rulings with which they (and the majority) disagreed. So, Judge Williams, you may claim a certain right is not in the Constitution and decry a courts' reasoning, but, as a judicial officer in a liberty based system, you should not advocate mob rule over rule of law and rights.

Linda Rawles
Carefree

 

Voting system overhaul makes sense

~ Sept. 1, 2010 ~

The CD3 Republican U.S. House Race created losers out of 78 percent of the voters. With a very low turnout rate of only 20 to 25 percent and a large field of candidates, Ben Quayle’s GOP win was far from a majority of support at only 22 percent. That would be bad enough if it were not overshadowed by the fact the crowded race was characterized more by dirt-slinging and polarization of the party than by garnering popular support.
Dan Quayle wrote in an email to Ben’s supporters “I have never in my 35 years of politics seen such an ugly, slanderous-assault in the closing days of a campaign against a fellow Republican.”
“Primary elections have turned out to be one of the causes that contribute to the extreme polarization of politics today,” says Richard Pildes, professor of constitutional law at the New York University School of Law (and author of ‘Why the Center Does Not Hold: the Causes of Hyperpolarized Democracy in America’). “The people who show up for primary elections tend to be much more extreme, much more the activist wings of the political parties."
To win in this race of ten candidates, the winner only needs to gather the largest subgroup. The result is that a candidate could conceivably win with only 11 percent of the vote. While we all want self-appointed electors who are interested and willing to vote, the issues of low turnout, vitriolic mud-slinging and winners with very little support is a challenge to overcome.
A solution to all three of these problems exists – a ranked choice voting (RCV) system. It has many other names, preferential voting, choice voting, alternative voting or instant runoff voting (IRV). These systems elect the candidate with the greatest overall support, remove the spoiler effect, save money by not requiring an actual second runoff election, and have been shown to engender more collegiate races with far better turnout.
According to Steven Hill in 10 Steps to Repair American Democracy, when using IRV “Observers … were amazed to see some candidates forming electoral coalitions, downplaying negative attacks, even urging their supporters to rank a like-minded opponent as their second choice. … For those tired of polarized politics and mudslinging campaigns, IRV has much to offer.”
Best of all might be having candidates who can garner more than 22 percent of the vote. Ranked Choice Voting can be used to eliminate primaries altogether or can be used by the party for their primary. Either way it is superior in electing candidates that are supported by more of the voters.
FairVote-AZ is a non-partisan organization made up of Republicans, Democrats, Libertarians, Greens and Independents who all want a more fair method of voting in Arizona. Its goal is to educate Arizonans about Ranked Choice Voting (RCV) and to promote its use in municipal and state elections.
Tim Mavrides
Media Committee Chair of FairVote-AZ