French president says Peugeot layoffs are unacceptable

[Philippus Flavius Homovallumus]

DING DING DING! Spot on.

It's obvious that property needs to be less profitable, while production needs to be more profitable. I do not claim to have a miracle recipe on how to accomplish that, of course. I do know I'm very skeptical of solutions which smells of ideological blindness though, like solutions that focus entirely on tax raises or entirely on tax cuts.

Actually, business just needs to be more profitable for the same effort. The second is an important point.

Property taxes in the UK are basically out of date, they don't scale up so that for your really huge mansions you're still just paying the same as a Georgian townhouse - that's not a question "increasing" taxes, just removing the cliff drop at the extreme end.

Beyond that, you could tax people for leaving arable land fallow for more than two years, punatively, that would at least encourage either use or development rather than fields being bought up and then sold when they become valuable as real estate for a housing estate.

Proper town planning is a part of this too, by which I mean not just tacking bits on willy nilly and hollowing out the centre of a town while all the wealthy people move to the suburbs.

[HoreTore]

Repackaging the debt was not of itself the problem, it was the credit rating it was given that was the problem. Was it the banks or the credit agencies that awarded them the AAA ratings?

The credit agencies...

Norway has a sort of banking service called "Exportfinans"(export finance), which is a semi-government controlled agency/company which gives credit to exporting companies. A year or two ago, it had some problems with its funding, causing its credit to dry up, The government solved it by basically putting the oil fund up as safety for the company.

How did the credit agencies react to that move? They downgraded it. Apparently, the trillion dollar oil fund isn't very credit-worthy. It was at that time the last bit of confidence I had for credit agencies evaporated. They are completely clueless.

Actually, business just needs to be more profitable for the same effort. The second is an important point.

Property taxes in the UK are basically out of date, they don't scale up so that for your really huge mansions you're still just paying the same as a Georgian townhouse - that's not a question "increasing" taxes, just removing the cliff drop at the extreme end.

Beyond that, you could tax people for leaving arable land fallow for more than two years, punatively, that would at least encourage either use or development rather than fields being bought up and then sold when they become valuable as real estate for a housing estate.

Proper town planning is a part of this too, by which I mean not just tacking bits on willy nilly and hollowing out the centre of a town while all the wealthy people move to the suburbs.

All good ideas.

[Fragony]

Rating agency's are private company's with their own clients, the effects of the nervousness on the markets they can create is a little bit too big for our own good. As it is now they can make or break what is perfectly fine or absolutely rotten. Friend of mine called it the lemming-constance which I thought was pretty accurate.

Problem with the modern world is that we no longer plan ahead, nownownow.

[HoreTore]

Problem with the modern world is that we no longer plan ahead, nownownow.

This is as accurate as one can get it.

[Fragony]

Edit

[lars573]

No, it's the other way around.

Home(every kindm, including cabins and the like) ownership is barely taxed at all here. This was one of a dozen measures taken by the government to turn us into a nation of tenants to a nation of home owners - and it did work. The only ones who don't own their homes today are those withiut stable employment, students and those who need a place to live for a short period of time. Heck, I'm still a student working 50% in the public sector, and I own my apartment.

However, I live in the suburbs, not in the city centre. Why? Because the prices there have shot through the roof, and it's completely impossible for young people to buy homes there unless they have parents with money. And getting my apartment would be impossible without my uncle as safety.

The current situation is one where young people are finding it extremely hard to buy homes, and is slowly turning us back into a nation of tenants again. The reason for that is because people who have a little extra money use that money to buy a second home, which they then sublet. This in turn creates a false demand for houses, which causes house prices to skyrocket. The high prices makes it impossible to buy homes, etc etc.

Sure, a higher taxation on homes means an extra expense for home owners. But extra taxation means that the amount of money people can spend on a home is lower, which lowers the price, and that means you have a lower loan. It also reduces the demand for houses as people no longer see home ownership as an investment, thus further lowering the price.

So, as well as being beneficial to the home owner, it is also beneficial for society as a whole, as it keeps the money in the production sector, providing clothes, food, jobs, cars, etc. A win-win for all.

In North America owning an apartment (AKA condos) is a rich mans pass time. And yes it's true many young people of modest mean own their first home in the sub-urbs. My brother-in-law owns a house (well a right side of a duplex) on a couple scholarships and a TA job. And he and my sister have 2 toddlers. Had they wanted a house closer to the Uni in the city centre it would have cost them double or triple the $100K they spent. The problem I'm speaking of is exemplified by my brother and his wife (plus their infant and toddler), they pay ~$650 in rent for 2 bedrooms in a crappy neighbourhood. And he and I both now it's crappy, as it's the one we grew up in before moving to the suburbs. Higher property taxes means they'd have to move to the really bad part of the city. When you consider that the property taxes on his building would be $2.65 per $100 of assessed value (2009 rates). Where as in the area that the property my grand father bought (and I live in the slummy apartment) is $1.65 per $100 of assessed value.

You mean people who have an apartment they share with their mistress and a house they share with their wife and children?

Don't look at me like that - that's exactly where the practice came from, and everybody should remember that.

If house ownership (property speculation) is more profitable than actually engaging in business then you have a problem. Contrary to popular belief there are enough houses in most Western countries - in a lot of places in the UK whole streets are effectively deserted and turned over to squats. The problem is that these arears are not profitable for business. There are a couple of things you can do about that - in some instances you just need to accept that the area is too far away from the economic centre or other trade links (mill towns in the North of England have this problem) if you aren't going to keep them on life support you might be better served actually allowing the town to wind down, breaking up the deserted sections and turning them back to greenfield. That's a kind of infastructure project nobody bother with - despite the fact that a lot can be recovered from such sites.

Of course, we'd just rather leave all that to rot and build more shoddy cardboard houses on green field and let people winge about how they have no jobs, because that's their "right".

The problem isn't that there is a lack of houses. The problem is the lack of them where people are. Rural communities being gutted is nothing new. The problem is that these areas are too far from where people work. Unless your like my uncle and willing to drive 2 hours to and from work. Halifax has an issue with affordable housing, a buzz word the hippies love. That is many people can't afford to live close to their job due to property taxes and values, and really can't afford to own a car. Don't bother mentioning mass transit. This is North America, mass transit is for pinkos, commies, and euroweenies.

[HoreTore]

100k for an apartment?

You can probably get a run-down hut somewhere in the backyards of northern Norway for that amount... I just checked the listings, and the cheapest apartment in Drammen(populatiln around 50k) costs 115k usd. For a massive 14m2... And that apartment has a nasty joint-debt thingy, making it risky...

[Greyblades]

is there a solution?

damned if I know...

Yup, If all the third world countries' workforce were allowed to unionize to the extent of the west that would solve it. Of course making that happen is probably impossible.

[HoreTore]

There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible. - Henry Ford

Increasing wages drives the economy forwards, not backwards.

[lars573]

Unfortunately inflation made that mind set obsolete.

100k for an apartment?

You can probably get a run-down hut somewhere in the backyards of northern Norway for that amount... I just checked the listings, and the cheapest apartment in Drammen(populatiln around 50k) costs 115k usd. For a massive 14m2... And that apartment has a nasty joint-debt thingy, making it risky...

Well my sister and family has more of an attached house* than an apartment. But yes as I said owning an apartment is a rich man's (or at least a white collar professional or retirees) undertaking here. Condos are just large apartments and they run 100k on the low end. To over 200k for the really fancy ones is desirable locations. And here you rent an apartment and buy a house or condo. I should also add that real estate values in Nova Scotia aren't that high.







* If someone from North America says a duplex think of something like this:

[drone]

According to my limited quick research, I own 1.8% of PSA Peugeot Citroen. GM owns 7% and is the second largest shareholder after the Peugeot family. US taxpayers own 25% of GM through the bailout.

So, um, freedom fries and cheese eating socialist surrender monkeys?

[Sir Moody]

There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible. - Henry Ford

Increasing wages drives the economy forwards, not backwards.

sadly that is no longer the case - modern industry instead works towards "Make the best quality of goods possible at the lowest cost possible, paying the lowest wages possible."

basically they are only interested in maximising their profits and that's the best way

[HoreTore]

Unfortunately inflation made that mind set obsolete.

Inflation was just as much of a factor in Henry Ford's day as it is today.

It was also a factor during roosevelt and the post-war years, yet it always went just fine.

And it's funny how only wage increases for workers cause inflation according to the right - the extreme increases seen in upper management, the finance sector, etc is apparently no problem at all...

[HoreTore]

sadly that is no longer the case - modern industry instead works towards "Make the best quality of goods possible at the lowest cost possible, paying the lowest wages possible."

basically they are only interested in maximising their profits and that's the best way

....and that attitude is the reason the US finds itself on the bottom heap when it comes to levels of social problems, health problems, etc etc.

[Philippus Flavius Homovallumus]

The problem isn't that there is a lack of houses. The problem is the lack of them where people are. Rural communities being gutted is nothing new. The problem is that these areas are too far from where people work. Unless your like my uncle and willing to drive 2 hours to and from work. Halifax has an issue with affordable housing, a buzz word the hippies love. That is many people can't afford to live close to their job due to property taxes and values, and really can't afford to own a car. Don't bother mentioning mass transit. This is North America, mass transit is for pinkos, commies, and euroweenies.

So there aren't a lack of houses - most Western Nations have economies which are a mix of high tech and high-quality services. You can just as easily run a tech company from Durham as London - people just don't want to.

So far as I'm concerned, government shouldn't be authorising new housing builds unless it has an actually house shortage - which means doing something with all the brown field sites first.

[Fragony]

According to my limited quick research, I own 1.8% of PSA Peugeot Citroen. GM owns 7% and is the second largest shareholder after the Peugeot family. US taxpayers own 25% of GM through the bailout.

So, um, freedom fries and cheese eating socialist surrender monkeys?

You wut, seriously?

[HoreTore]

You wut, seriously?

25% of 7 is roughly 1.8. He's saying he owns 1.8% as an american taxpayer.

[Crazed Rabbit]

This is hilarious, coming from someone who believes the financial crisis was caused by too much regulation.

Please show where I said that.

CR

[HoreTore]

Please show where I said that.

CR

Like I'm going to plow through two-three year old threads....

Anyway CR, are you of the opinion that government regulation played less of a part in causing the financial crisis than government deregulation?

[Fragony]

Like I'm going to plow through two-three year old threads....

Wasn't that the thread where you claimed that the holocaust is a zionist myth

[HoreTore]

Wasn't that the thread where you claimed that the holocaust is a zionist myth

I stand by my words.

The holocaust is a lie invented after the Jews destroyed the most brilliant, peace-loving and fair state the world has ever seen to give legitimacy to their crimes.

You're just brainwashed if you believe otherwise.

[Fragony]

http://www.dumpert.nl/mediabase/8674...ld_poesje.html

[HoreTore]

http://www.dumpert.nl/mediabase/8674...ld_poesje.html

I wasn't able to play that video.

You need to up your game if you want to advance in the ranks as an NWO-agent. But you won't ever get me, my specially designed head-protector is made from material designed to block your brainwashing waves, and I don't drink the water you have laced with drugs.

[Fragony]

I wasn't able to play that video.

iPad hipster

[gaelic cowboy]

Nobody told them to repackage them and sell them while pretending the packages were risk-free. The risky mortgages was what caused the bubble to burst, it was not what caused the bubble in the first place. And every bubble will burst eventually.

Indeed the bursting of any bubble merely reveals the extent of wealth that has already been destroyed through overinvestment, overcapicity or overconsumption. The bubble period is when the wealth is destroyed as it's just masked so long as said bubble inflates some more.

Basically there was a banking model based on easily available interbank credit which suffered a heart attack when the flow stops.

Repackaging the debt was not of itself the problem, it was the credit rating it was given that was the problem. Was it the banks or the credit agencies that awarded them the AAA ratings?

The credit rating agencies gave them the ratings because it was all wound up with potential extra business that they were touting for.

The credit rating agencies were therefore shall we say incentivised to give a good rating or they might not get business again.

But the banks had people selling loans regardless of the fundamentals because there compensation depended on new business.

This means even if a rating agencies had been more conservative they still would have been unable even to stand over there ratings.

[rory_20_uk]

When Mr McKinsey (a founder of McKinsey unsurprisingly) was on an early project he was asked to present his findings to the board. His conclusions was to sack the CEO and other board members. I am sure that didn't help his immediate business, but he did the odd thing of putting principles (and long term business) about merely placating the client.

The rating agencies historically are the companies that state whether things are any good or not. Giving something a poor rating would not have a knock on on this business as they run a monopoly. Loads of industries are based on payment for selling. But if you get a call for junk bonds one's attitude is different to that of AAA rated material.

[gaelic cowboy]

When Mr McKinsey (a founder of McKinsey unsurprisingly) was on an early project he was asked to present his findings to the board. His conclusions was to sack the CEO and other board members. I am sure that didn't help his immediate business, but he did the odd thing of putting principles (and long term business) about merely placating the client.

The rating agencies historically are the companies that state whether things are any good or not. Giving something a poor rating would not have a knock on on this business as they run a monopoly. Loads of industries are based on payment for selling. But if you get a call for junk bonds one's attitude is different to that of AAA rated material.

The rating of mortgage backed securities was effectively a separate business to rating of the health of the bank so effectively the agencies touted for it by giving favourable ratings.

Credit rating agencies and the subprime crisis

Critics claim that conflicts of interest were involved, as rating agencies are paid by the firms that organize and sell the debt to investors, such as investment banks.[9] John C. Bogle wrote in 2005 that there is an inherent conflict of interest when a professional firm is also publicly-traded, as the pressure to grow and increase profits is relatively stronger, which may detract from the quality of work performed.[10] Moody's became a public firm in 2001, while Standard & Poor's is part of the publicly-traded McGraw-Hill Companies.

In the heel of the hunt the problem could be said to be one of ignoring the risk or being unable to see said things as ricky.

Banks and countires in the west hadnt gone belly up for such a long time that they all thought these things dont happen anymore. Unfortunatlely none of these Very Important Men ever sold a bullock at the mart or they would know the real reason something has a value.