Bits Bucket And Craigslist Finds For July 23 2007
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How low can it go?
http://www.ft.com/cms/s/e3dd78ec-3872-11dc-bca9-0000779fd2ac.html
“You get the sense the administration wants a weaker dollar,” said Mr Strazzullo.”
Gee, now, why would that be? Of course, if something is destructive, the administration is probably all for it. I just don’t want them taking the rest of us down with them.
Hmmm we owe 9 trillion in debt? Hmmm what is the best way to pay it off? Oh yes, grow the economy via inflation, bring in more tax revenue, and even though it is worth less, the debt technically becomes “easier” to pay off.
Inflation is a tax in and of itself, on holders of dollars and dollar obligations. High rates of inflation also help encourage people to spend money before its value erodes. This is a key policy tool in the Fed’s War on Savers.
I also thought about this theory.
Suppose the US keeps interest rates here low. Now, imagine as growth slows here, in other places it speeds up. Will more borrow money here, invest it elsewhere, then bring it back with a favorable exchange rate (falling dollar), pay off the debt, and still have money left over? Sounds like hedge fund, private equity strategy. I guess this keeps the dollar somewhat relevant.
Thanks, Tom. As I’ve said often, I’m not the sharpest tool in the shed when it comes to financial manipulation, the stock market, etc. Makes sense about this hedge fund/private equity strategy. After all, Paulson is Goldman Sachs first, Treasury second, IMHO.
You also know that Blackstone CEO and Chairman Stephen Schwarzman was George Bush’s roommate in college at Yale. They both also belong to the Skull and Bones.
That won’t work. We need to borrow billions of dollars a day just to keep things running. We have no savings to lend, the way Japan or China do. The dollar would collapse and you would have hyper-inflation.
that would be even better for some people: in a few years they can buy up what is left of the US for pennies on the dollar. Look at what happened in Weimar, there are always people who profit from a hyperinflation, usually the financial elite who hold most of their funds in foreign accounts and foreign currency (and with their debts probably in dollars).
“…the financial elite who hold most of their funds in foreign accounts and foreign currency (and with their debts probably in dollars)…”
Sounds to me like a good hedge fund strategy. And only the financial elite qualify to invest in hedge funds. The rest of us get a lovely menu of $US- and MBS-heavy 401(K) fund choices.
Buy FXE.
Let me repeat.
Buy FXE.
Once more for good measure.
Buy FXE.
it probably keeps the stock market (and to some extent wages, pensions etc.) rallying into the elections; most voters never check the asset values in foreign currency so why worry …
and maybe the weak dollar policy even puts some kind of floor under the housing market (convince the markets that they don’t care about the dollar, rates will NOT rise to defend it and the easy credit will keep flowing as always).
not “probably”, a depressed dollar with low interest rates will keep the market in rally mode.
Nominally, while in real terms you lose more and more. The Zimbabwae stock market was the best performer last year but no one is getting rich in it.
No problem inflation is against the law in Zimbabwae.
As long as the stock market keeps hitting new records, a weaker dollar helps concentrate the world’s wealth in the top 1/2 percent of the U.S. household wealth distribution. So where is the problem?
this sure is the main selling point of the Bernanke/Paulson policy. As long as the financial elite likes what they see we will continue on this road to Weimar. Probably the US financial elite is behind the huge flows of diversification out of the US$ too, they couldn’t care less about the greenback.
Well, if the goal is a truly global eonomy, then it makes sense to destroy the dollar and eventually replace it with something else.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aAvJcDT9u8NU&refer=news
Dollar Bear Market Slide More Boon Than Bane for Bush (Update1)
By Bo Nielsen
“A stack of U.S. one dollar bills
July 23 (Bloomberg) — Everyone from Nobel Prize laureates to the world’s biggest bond investor says the Bush administration has reason to cheer the dollar’s slide to historic lows.”
“…the Bush administration has reason to cheer the dollar’s slide to historic lows…”
Are they also crowing about 2m+ vacant homes on the U.S. market and the collapse of the subprime lending sector?
If you think about it, a long drawn out period of deflation (rising dollar) would be unthinkable to a lot of people:
1) government debt becomes more of a burden than it is (federal interest payments alone is currently about 1/5 of revenue, debt is about 4 years of revenue)
2) overextended homebuyers get killed, having to pay stronger dollars to pay their old debts on depreciating homes
3) people become unwilling to borrow money
4) financial instruments meant to hedge against inflation (e.g. gold) don’t grow numerically and become deductions instead of taxable income
5) corporate debt becomes an absolute beast to pay off. BKs galore follow
6) foreign consumers generally shun American products due to their high prices
Take all that, plus the fact that the Fed can’t influence inflation by rate-setting when inflation is actually deflation, and you have what scares the poo out of some people.
Therefore, I would concur with a great many who say the government has a strong interest in keeping inflation high. In fact, one could almost guarantee continued high inflation for a long time. The clever trick will be in preventing everyone from actually thinking there’s any inflation.
in summary:
OBEY
CONFORM
CONSUME
follow that and all is well.
“They Live”! One of my favorite films. I must have watched it a dozen times.
Is that the one with Piper and the sunglasses. I love the line about being all out of bubble gum.
Longest non-boxing fight scene ever?
All is well and fine with the funny-money game of inflation until people realize that their salaries are not keeping up, and as more jobs are outsourced or insourced, they grow poorer each year. I wonder how that will factor into the game plan - or maybe that is the plan.
Ideally, Americans will invest all their money abroad in hard currencies while the Asians invest all their money in dollar denominated assets. Then we can inflate away our debt and their savings.
Is the subprime shakeout to blame for the weakening dollar? Or is it the Fed’s policy response? Would the dollar weaken if the Fed tightened interest rates to match other CBs’ efforts to stem building inflationary pressures?
From p. C4 in today’s WSJ:
Dollar Is on Defensive Amid Subprime Shakeout
By Dan Molinski
The snowball effect of U.S. subprime mortgage problems keeps barreling forward, and that is likely to extend the dollar’s recent decline into this week.
The dollar hit another lifetime low against the euro Friday and fell to a six-week low against the yen as more rating concerns warned of downgrades on debt related to the subprime sector. It was just a taste of what’s coming, analysts said:
“Risks are continuing to build and you’re probably going to see the dollar back under pressure,” said Ian Stannard, senior foreign-exchange strategist at BNP Paribus in London.
at least this proves wrong all the financial gurus who predicted a strenthening of the US$ as soon as the housing/credit bubble would falter.
It’s all up to the Fed to decide whether to defend the dollar. It looks like they have thrown in the towel on that plan…
PETER BRIMELOW
Gold to test $720?
Commentary: What a difference a month makes in prices
By Peter Brimelow, MarketWatch
Last Update: 12:01 AM ET Jul 23, 2007
NEW YORK (MarketWatch) — Gold’s on a roll (again). And the gold bugs are gloating.
http://www.marketwatch.com/news/story/gold-test-720-ounce/story.aspx?guid=%7B9B99950A%2DD500%2D4105%2D8777%2DADB8BF207E7E%7D
I see that Jewelry store robberies in Phoenix are up big time. Is this what former mortgage brokers and realtors resort to in order to pay the bills?
In our area the jewelry thievery is actually the jeweler. One of our former neighbors who lived life to the hilt, used a sold diamond he was holding for someone as collateral on a debt for his store. When the owners of said diamond wanted to have their diamond, he then substituted a $10,000 ring which was not a diamond as the collateral. Trouble was he said it was the same value as the $1.9 million dollar ring previously used as collateral and that it was a green diamond. Hope he gets what’s coming to him.
Can’t these peopse sue him for that? I’d be very interested to learn what the law is on that one.
I get rather confused thinking about how money works so I thought I would ask about my latest struggle here. I remember reading somewhere, and I may be wrong, that when a person takes out a $100,000 loan that somewhere around $900,000 is generated for the economy. That is, the person who takes the loan purchases something and that money is deposited into a bank and the second bank uses the deposited money as reserves and loan out more money. And so on.
So my question is, if a person defaults on the loan does it actually reduce the money supply by more than the value of the loan? And if so how does this relate to the no longer reported M3? i.e. could a high number of defaults actually result in less money in the economy even though the fed is printing full speed?
Good analysis. Hmmm not sure. But if your theory holds true, then it would definitely mean higher inflation.
Are we seeing that now? You betcha.
Actually, that would imply deflation, not inflation. The $10 Trillion question is whether the Fed will be able to inflate faster than the defaults cause deflation. If they can’t, we’ll have a deflationary collapse. If they can, we’ll have a hyperinflationary collapse.
no, because no physical money is destroyed and no deposits vanish. a person simply doesn’t pay a debt and the bank loses some receivables and assets on it’s balance sheet
Are you being sarcastic, or was this a serious response? The booking of the loan (DR loan receivable [asset], CR customer deposits [liability]) is what created the money in the first place. Fractional reserve lending. Gotta love it.
Well, maybe $900k of transactions (activity) is generated for the economy. That’s not the same as $900k of new money.
A loan of $100k will generate new money in the sense that the mortgage bond’s holder thinks he has “$100k” in the same sense that you think you have $100k in the bank when you buy a CD. However, the $100k you borrowed from him now goes to the person you bought a house from, for example. So the home seller also thinks he has $100k, now in the sense of cash in the bank. Now he could go and buy government bonds with that $100k, and he’ll think “I have $100k”, but in reality the money goes to the government and is spent.
So far, there’s been $200k new money (in some sense of people thinking they have money) generated from the original $100k.
That process expands in times of easy credit. Problem is, if credit conditions weaken, much of that “money people think they have” disappears.
Yes, but not immediately. When a borrower defaults (and for the sake of simplicity let’s assume the loss is total), what bank has is a bad loan. That bad loan reduces assets of the bank. Now they have less assets than they thought they did. It unfavorably changes capitalization ratios for the bank. What the bank does in this case? It originates fewer loans going forward until the situation “normalizes”.
If you look at the filings of smaller banks (they have simpler finances) you will notices that in 2004/2005 the amount of loans they originated exceeded (sometimes by a wide margin) the amount of loans paid off. In other words, banks were creating money. In 2006/07 the situation reversed - most of them originated fewer loans than they had paid off. The money is being destroyed.
money is being destroyed? while M3 is still rising at something like 14% yoy - sounds counterintuitive.
This has my head itching on what happened to the other end of the transaction.
That $100k loan is made up of $10k that the CDO fund put up as equity and $90k the borrowed from someone else. They also bought insurance at about $20k.
If you made a first payment default along with a good number of others in the CDO, the hedge fund that manages the protfolio has to unwind the posistion because no-one is going to buy this junk.
That means he goes to the guy he gave $20k to and files a claim for $90k. This underwriter has been passing out guarantees like candy at Christmas. Obviously these guys don’t have the funds to cover these loses because they also borrowed money when they took that $20k to buy $100k of high yield junk debt. He tells them to get in line with the rest of his creditors.
Meanwhile that guy that loaned the CDO $90k is asking for it back.
Where this guy got the money from depends upon who he is.
If he is a manager of a Pension Fund, someone is not going to be enjoying the golden years.
If it was a private equity fund, they borrowed a majority of that $90k also. Good luck following that down the rabbit hole.
If it was a foreign investor, he is really mad and is probably going to take whatever he has left in US investments and go someplace else. Say hello to a US dollar index of 30 to 40.
An obscene amount of money was borrowed every step along the way to giving you $100k.
Now this get’s rolled over and mutiplied again by the guy you gave the $100k for the home. He either levereged up his purchasing power on an more expensive house and repeated the same leverage process, or he blew it on a fancy car, or he invested it into an institution or fund that finances more housing purchases.
It is a never ending loop of borrowed money.
I remember as a child trying to design a board game similar to monopoly. A problem was that the money supply was fixed, each player started with $2000, and if one player made money another player lost money. A zero-sum money supply, does not make an interesting game. In Monopoly the money supply expands as the game is played, mostly due to the $200 as you pass Go. This makes it so everyone gets richer as the game progresses. The houses and hotels adds some instability so that one player can take a large amount of money at one time from another, this allows for the possibility of bankrupty even with an expanding money supply.
Everything you need to know about money supply can be learned by playing monopoly.
Actually I know a few real people who have unstable finances, due to their houses and hotels (apartment buildings).
When people default, the funny money just comes out of the system. The real money stays put.
But here’s the thing: Posters on this blog keeping talking about how the Fed “prints” money, but they don’t really print money. The Treasury Department prints money, and the Fed is like a sponge that can soak it up or set it free when it wants to. One of the way that it “sets it free” is by reducing the required reserve ratio (so that the bank only has to keep, say, 5% instead of 10% of your deposit in its stores). The other is by reducing interest rates, which subtracts fewer of the total dollars at the end of the equation.
If people start defaulting, then banks have to start keeping more and more of your deposit in storage in order to meet their reserve requirements (since they can’t meet the requirements using what would have been payments), and interest rates don’t mean a hill of beans when the borrower isn’t paying anything at all (effective rate = 0%). What all this means to me is that the Fed can only control money so much. If they go overboard, then natural pressures will simply build up, and eventually the money will have to flow back to equilibrium.
I’m not sure if what I said was clear to everyone, but if someone here notices a fault in my thinking please speak up. The bottom line message (from my point of view) is that the Fed can neither create or destroy money.
The private federal reserve “prints money out of thin air”. Their only costs is 4 cents per dollar bill of any face amount. Remember there is real cost of paper/ink. Today, the majority of money is electrified desposits with the backing of promise to pay government notes. How much paper is out there in the world and billions created every month makes the paper dollar become less as “inflation” debases the currency. Anyone ask what the dollar will buy in 2008? Think the banks know the value and what it will buy/value next year? History tells it all but since 98% don’t care or read, let the good times roar.
I thought that at present, there is NO (0%) required reserve ratio.
I think that is correct; I remember reading some time ago that Canadian banks still have reserve requirements in the 1% range, so their customers have a slightly bigger chance to get some money back when the brown stuff hits the fan
Here’s the way I look at it. I’m not sure if this is right or wrong.
Let’s take a simple example where we have only one bank. Let’s also say that this bank is owned by those who have deposits in the said bank. They are both equally responsible for the gains (interest paid by borrowers) and loses (interest paid by bank and defaults) of the bank.
This bank must have 10% cash in reserves. The bank gets $100 from individual A. The bank loans out $90 to individual B. Individual B buys something from individual C and C puts that $90 back in the bank. Now the bank now again has $100 hard cash and can loan out $81 again. (They must keep $19 in reserve to satisfy the reserve requirements for A and C.)
This keeps going until the bank has $100 hard cash, $900 loaned out, and $1000 deposited in the bank.
Now let’s say individual B defaults on her $90 loan. The bank loses out on the $90. This $90 must be a shared loss between all depositors. So, now the bank has $100 in hard cash, $810 loaned out, and $900 deposited in the bank (down from $1000). The depositors lost some money but the bank still has $100 in reserves and now only $810 in deposits. Now its reserve percentage is high enough that it could again loan out $19 and start the chain again until it again has $1000 in total deposits.
The contraction doesn’t really occur until someone demands cash. At that point you would have a 10 to 1 unwinding for every dollar of cash you have to pay out.
Oh, JJ, I think you hit the nail on the head. It’s the part where depositors actually ask to get their money out. Then the money supply goes right back to where it started from, but no lower right? That is, as long as everyone keeps their money in the bank and doesn’t just hide it under the bed.
This is getting really tricky. I think maybe the real problem will be when the holders of real estate, MBSs, and CDOs realize that the money they “had” was never really in a bank. Then, all of the sudden, it will seem like the money supply has been reduced, but really it was just the supply of “possible future money” as displayed in some brokerage account that was reduced. Then, if these investors try to borrow money from the bank in order to make some new investment , they won’t be able to because their aren’t enough people making deposits or paying off their old loans to finance the new ones. The new loans would have to carry much higher interest rates to make it work, which would of course subtract more dollars from the equation.
I just keep coming back to this point where everything corrects itself regardless of Fed interest rates and reserve ratios. It seems that the Fed just helps make things more/less severe, depending on how it reacts, but can’t actually force more money permanently into the system.
Am I on to something, or just going off into left field here?
Test
I saw a link on the Implode-O-Meter about the foreclosure process. It suggested that most folks still don’t really understand how that process works.
Well, thanks to this blog among other things, I saw this coming many moons ago and made arrangements to teach a public CLE on foreclosures in Virginia. If you’re interested, it will be on August 7, 2007 in Rosslyn. The link is here: http://www.lorman.com/seminars/seminar_details.php?pid=173940
Are you Kevin or Thomas?
I’d be Kevin.
OT, but for those of you with strong opinions about the “benefits” of globalization, you may get a kick out of this film noir inspired comic strip that lampoons Thomas Friedman
http://www.salon.com/comics/tomo/2007/07/23/tomo/
Here’s some fuel for our fires as the real estate naysayers. I’ve got a good friend in the real estate business who made a very good comment the other day. The anti-bubblers say only the worst will drop their prices, the rest will hang on. My friend says the people who are actually selling are the ones who never saw bubble prices. Examples are people in homes that would have sold in 2005 at $400,000 are listing at $295,000 and selling in less than 60 days. That will only work to pull prices down faster.
Nobody cares if wishing prices are stable when actual selling prices are down.
I would like to pick the brains of some of the more knowledgeable members here if you don’t mind. I have been keeping my eye on one particular style of house at a new construction and unfortunately it is no longer being built. However there is one house that has been for sale for over 11 months (it seems 2 different investors bought it and did the whole cash back thing) and has now been foreclosed on. According to records it shows that it has gone to the trustee and the loan amount is 416k and it had a second of 104k on it (total price he paid is 520k that is WAY overpriced as new would be 391k). Now it has sat empty for 2+ years and has never been lived in and it does have some upgrades to it but not enough to justify anywhere close to that price. It does need some work but nothing I can’t handle and it looks like the only major thing is new landscaping front and back. I am considering offering 350k for it but don’t know if the bank would just laugh at that as it is a fair clip lower then what is owed on it but the fact that these people overpaid is not going to mean that I will over pay as well. I am just wondering if any of you have experience in dealing with foreclosures and what kind of markdowns are considered “normal”
The bank may laugh at your face, but they’re doing some real “oh crud”s behind the scenes.
My problem with your deal is that it is still probably way too high. $350K when new are listed at $391K???
Do this exercise…. Walk in to the builder and say you’re intrest in new, but not at $391K. See how low they”ll go!!!! My bet would be on them going much lower than the the $350K. Friend at work recently closed for 40% off list here in phx.
You never know until you make an offer - it costs you nothing. Spend some bucks and talk to a r/e lawyer familiar with foreclosures before making an offer, and have the lawyer review and/or draw up the offer. Ignore r/e agents - I seriously doubt they are qualified enough to help you through any legal hurdles regarding foreclosures and/or dealing with REO.
D dude- If you can buy a brand new one for 390 and you MIGHT get this for 350 with no builder warranties, then you are probably paying too much. That’s a little more than 10% discount. Do you think the market is only going down another 10%?
I would shock them with a 300K offer and have one of your friends offer them 290K a month later. After they turn both of you down, wait a few months and give them another offer near 300K and this time, tell them there will be no more offers after this.
Pay for a home inspection first, BEFORE you make the offer. You may be able to use the findings to justify your low-ball, or you may find problems so serious you’ll want to walk away.
We bought our foreclosure here at well below replacement cost. I figure the bank took about a 20 to 25 percent hit, when you account for the fact our offer was below the outstanding mortgage balance, and then add ten months worth of taxes and insurance, some cosmetic fix-up costs, and the realtor’s commission. Oh, and they paid for a buyer’s title insurance policy.
That was in 2005. Discounts should be even better now.
If you offer them anything over a 75% of asking your nuts (IMHO).
Offer $300. They’ll reject. Wait. They’ll come back to you when it doesn’t sell in a month. Reject their new offer and counter at $250. That’ll rattle their cage. If they aren’t getting ANY offers you’ll win big this way. A friend did this in 90 and cut his offer three times over a few months. Seller had NO OTHER BIDDERS. Think about it, NO OTHER BIDDERS. This is a game of musical chairs now and the cycle is in your favor. Use it.
Most people worry about their offer being “rejected” or being “insulting”. In a bear market all the “normal” buyers are hibernating but for a few who stumble out into the cold…..being obviously willing to go back to your cave, making it clear your’s is strictly a business deal without emotion, that’s how you have to play it to get a real bargain.
Banks don’t get “insulted.” They may say no, but when they call you back in a couple of months tell them that offer is long gone. Now your offer is xxx less.
If you’re not embarrased presenting an offer, your offer is too high.
If your first offer is accepted, you left money on the table.
Good points Bad Chile.
Here is another ARM reset graph, this one by Banc of America Securities (as published by Business Week). It shows the peak in ARM resets happening in March 2008. Looks like the only spring bounce we’ll see in 2008 will be a bounce in foreclosures…
http://www.businessweek.com/magazine/content/07_30/b4043051.htm
I saw a similar graph. ARM resets get big again in 2009-2011.
I thought the 2009-11 time frame was the neg-ams maxing and forcing full amortization payments?
I thought that the later bump was for prime ARMS, which often have a longer period before reset.
Not explained in this interesting WSJ p. C1 sidebar article, but critically important: If the Fed took away the punchbowl, there would not be so much cheap debt (aka easy money) sloshing around in the Wild Wild West hedge fund industry.
The article also hints at the next shoe to drop on the global credit bubble: covenant-lite loans, which are the corporate analogue to subprime mortgages.
Subprime Mess Is New Challenge For Regulators
By Jon Hilsenrath
Word Count: 544
The mess in the subprime mortgage market is shaping up as an important test of the globe’s new financial architecture.
A generation ago, when the U.S. real-estate market seized up in places like California and Texas, banks and savings and loans felt the pain. The government fixed the problem at a huge cost to taxpayers. Since then, financial markets have replaced banks and regulators. Mortgages get bundled into products with strange names — like collateralized debt obligations or residential mortgage-backed securities — and sold to investors around the world.
Because the risk gets spread so widely, regulators can do little but watch and try to reassure everybody it’s under control.
…
When LTCM collapsed in 1998, the Fed called a handful of banks to the carpet to fix the problem.
Whom do you call today? Subprime problems are popping up all over the place: an Australian hedge fund, a little-known investment unit of Bear Stearns, European banks.
In many ways, this is the beauty of the system. Risky investments are dispersed around the globe the way a sprinkler system distributes droplets of water around a lawn. In theory, when trouble hits, the risk is evenly divided and the overall financial system remains stable.
It seems to be playing out that way so far. Subprime losses could hit $100 billion, yet the Dow Jones Industrial Average reached records last week. “The fears about the kind of spread of this to other markets hasn’t really occurred,” says Wharton School finance professor Gary Gorton.
But there are worrisome downsides to this financial architecture. The system hides risk and concentrates it in hedge funds that regulators and other investors don’t understand. The hedge funds have access to huge amounts of debt, allowing them to make big bets on investments that can go wrong very quickly.
“We don’t really know where the bodies are buried until after the fact,” says Andrew Lo, an MIT professor who also runs a hedge fund.
A system designed to distribute risk also tends to breed it. At their core, subprime loans and other mortgage innovations — “piggyback” loans, Alt-A mortgages, “no-doc” loans — brought credit to people who wouldn’t otherwise have gotten it. Few of these products would have become so popular if they had not been packaged into securities and sold widely to investers.
Something similar happened in the corporate-debt market. It saw an explosion of loans with few performance requirements for borrowers, known as covenant-lite loans. Like subprime mortgages, covenant-lite is essentially debt with borrower-friendly terms. And like subprime mortgages, Wall Street bundles and distributes them to investers around the world.
The corporate takeover boom has been financed by such things. How will it play out? Watch the subprime story unfold, and you might get some clues. You can be sure that’s what they’re doing at the Fed.
Hey, nothing to worry about! The CLOs are all rated AA.
for A$$ Auguring
Oops, that should be “Augering”. So much for my spelling police career.
CLO = collapsed loan obligation?
And I am guessing S&P’s and Moody’s are still turning a blind eye to the AA-rated CLOs?
“Alt-A mortgages, ‘no-doc’ loans — brought credit to people who wouldn’t otherwise have gotten it.”
******
What a simple little assumption - that doesn’t fit reality.
For here in the Alt-A Bay Area there were plenty of people who could have “gotten credit” of some kind, but used the exotics instead.
Why?
Because, at the very least, housing became unaffordable (due to the enablers: the Fed, REIC cheerleading and the hedgie / Pig Men gorging at the trough of excess global liquidity) and something to speculate in - so even the best credit candidates (and of good incomes) couldn’t or wouldn’t use traditional financing to join the mania.
[Alt-A Bay Area = San Francisco Bay Area]
More like the exotic loans brought ownership of big houses in expensive parts of the country to people who wouldn’t or couldn’t have afforded them using traditional financing.
Or in the case of the Alt-A Bay Area, ownership of small, expensive houses in expensive areas…
Mass housing “slump” continues.
http://www.boston.com/business/ticker/2007/07/mass_housing_sl.html
Note that the liars from the Boston Globe, MAR and Warren Group no longer add hopeful one-liners like “we expect the worst is behind us” to the press releases. They dump the (bad) numbers and run.
and the MAR numbers get further and further away from the Warren numbers. The average SFH sold for 364K according to MAR while the Warren group says 318K (a 12.6% difference). If the MAR numbers are even remotely accurate why would any buyer use a realtor?
The Warren Group has struck me as being more realistic than the Globe or MAR.
And since it’s obvious DataQuick’s sound bites are often a sham (Karevoll, Le Page), where is an analogous organization for the Warren Group for California?
That little shot of smack at the opening doesn’t seem to be enough to get the U.S. headline indexes on to their next high today…
http://www.marketwatch.com/tools/marketsummary/
The 10am intervention paid off handsomely on all the headline indexes…
Who kicked the DJIA ball back into the air at 10:15am and 2:15pm and how?
http://www.marketwatch.com/tools/quotes/intchart.asp?intflavor=advanced&symb=INDU&sid=1643&freq=9&time=1dy&dist=TQP_chart_image
Is this guy the chief placekicker for Fed bubble-reflation operations?
http://www.newyorkfed.org/aboutthefed/orgchart/geithner.html
GetStucco, this one’s for you:
MarketWatch is reporting that Cerberus “nabs” United Rentals. Apparently, private equity doesn’t snap up companies, they nab them.
Does anyone know what private equity firms usually do with a company that they buy? Outsource as many operations as they can and lay off the employees? Do they get their money by taking them public again in a few years?
Just curious.
One thing the buyers often do first is pay themselves a fat dividend, using the borrowed money. By coincidence, dividends are only taxed at 15%. So everyone wins. Well, except the long-term shareholders. And the taxpayers. Also, eventually everyone loses. Except the P.E. guys who got the dividend.
That used to be the plan, but it’s a little different nowadays. In the 80’s, the rationale was that they could create shareholder value by (1) breaking up conglomerates that were inefficiently managed and (2) rationalizing operations. In the latest buyout boom, the rationale given is more often that SOX and agency problems have made it preferable to run companies as private rather than public entities. I think the real reason for both booms was easy credit. The other reasons are important, but not really the underlying cause. More money chasing a limited pool of productive assets. The only way the bidding will stop going higher and higher is if the easy money stops.
the game is still the same. the equity firms buy up the companies, combine, eliminate, consolidate. then they pump up the top line to the max, work the people like dogs while eliminating benefits, raises, etc.
that of course jacks up the bottom line at which point the company is sold off to the highest bidder. it’s generally a three year cycle. quick in quick out, and the only thing we lose is our jobs.
Not true. Many people in this economy are not only overemployed and they’re also overpaid. Corporations spend years adding layers of fat and management that suck up expenses and add nothing to the business. Thus, the case for private equity firms, because public firms are subject to public ridicule and disclosure about hiring/firing. Private equity firms come in, install new manangement, cut the fat, and sell for a profit.
I’ve provided consulting to a number of companies, one of which was bought by equity. That particular case of inefficiency was mindboggling. They had dedicated people to create speadsheets calculating pay, processes that could easily be automated. The situation is that the person making the spreadsheet has the qualifications of a McDonalds employee but the salary of an accountant. Thus it’s a double negative when the person is let go because their expense structure is built around a $50k a year income instead of the $25k that they would make at the free market wage.
The economy would be more efficient for us all if we were placed in positions where our skills and brainpower dictated wages instead of seniority and social safety net dictating them.
To bash private equity as corporate raiders is wrong; some are, but many of them are doing a hidden public service.
“To bash private equity as corporate raiders is wrong; some are, but many of them are doing a hidden public service.”
*********
I can agree up to a point.
However, I did notice that when a PE firm bought Hertz they immediately paid themselves a big, fat (speaking of “fat”), greedy bonus and vehicle quality and service went right into the crapper.
It was so predictable it was laughable.
I’m trying to avoid them whenever I am able to do so.
I had a discussion with a Senior Engineer at a Semiconductor company recently purchased by a group begining with “B”.
They are in process of reducing ALL costs with a focus on their future re-launch IPO price. A common way to reduce costs is to cut R&D. That will mean their future products will suck.
So, so true. Unfortunately, this is a problem not just with buyouts, but with the short-term focus of the capital markets in general. Anything to make the numbers look good now. Forget that we’re actually supposed to be doing something or making something that is of value. Many firms like the “B” group are financial engineers. They don’t really add value.
Also, people aren’t really talking about the fact that there are no real exit opportunities for these private equity buyouts. For companies taken private over the last few years, the only way to get cash out is to do a dividend recap or sell to another PE firms. The IPO market is still pretty dead. These companies keep going into one end of the pipeline while the other end is still covered. It’s getting pretty jammed up. Even aside from debt availability, unless there are either exits or continued increases in allocations to PE, the buyout boom isn’t sustainable.
Money magazine has a Clearwater (FL) family as their money makeover candidates. The family has 150K in ‘home equity’. I can’t believe the editors at Money magazine are stupid enough to believe that. If they tried to sell today, that $150k in equity would quickly become $75k at best, and that is assuming they could even sell. If it’s a townhouse, not a chance in hell. A house, maybe, but it will take months and very aggressive price setting.
Entry in Craigslist in 4cloSure Ranch:
“$3800 / 5br - Gorgeous former model house for rent”
http://sandiego.craigslist.org/apa/380026715.html
The Other Side: Can a Black Swan have an ARM?
http://www.minyanville.com/articles/arm-mortgage-black+swan-subprime/index/a/13417
A housing bubble contrary case: what if Alt-A FBs are really savvy equity liberators? The negative savings rate doesn’t matter because it doesn’t account for everyone’s massive unrealized capital gains, and ARMs make sense because interest rates can decline as well as rise. Wake up and smell the kool-aid!
Equity liberator??? Awesome.
Some local “really savvy equity liberators” are beginning to have trouble liberating anything. At least at their wishing prices.
“We’re selling. But we’re not selling ’til we get our price.”
Since “our price” (nominally) usually translates into sometime around 2012 to 2014 in the inner Bay Area (with inflation, much later), I usually refrain from saying anything other than “good luck!”
More good news! I am sure these displaced workers will hve no trouble selling their Colorado Springs homes in order to accept transfers to other plants (as if more than a few will be so lucky).
http://www.coloradoan.com/apps/pbcs.dll/article?AID=/20070723/BUSINESS/707230304
Oh, and I love the spokeswoman’s Colgate smile in the photo: “Kiss your jobs goodbye. Have a nice day!”
Geezlouise, she looks like more of a spokesperson for Mary Kay Cosmetics (the “after” shot where they’re all posed out and where you suspect they actually looked better before they plucked their eyebrows, put on the fake jewelry, twisted their hair just perfect and all that). LOL
Rule number 3 in business: Don’t let the company spokesperson smile in a photo that is attached to a newspaper article regarding layoffs.
She’s smiling because she still has her job…
True: for another two months. Wooohoooo!
And these are the kind of “businesses” that supposed to be filling in the void:
http://www.coloradoan.com/apps/pbcs.dll/article?AID=/20070723/BUSINESS/707230303/1046
That’s “family fun?” Cleaning dirty sports gear? Glad my DNA didn’t land there.
Some job.
I have family in Colo. Spgs. (niece) who bought as it was cresting, did absolutely no research. When I ask how the housing market’s going, they say, “Well, it’s not so great, but we bought in a good area that won’t go down.” Then I find out the house next to theirs has been on the market (empty) for 2 years. I have a friend who may still work for Intel, if so, this will be his third or fourth layoff in high-tech in the Front Range area.
I think I remember you writing about your neice a long time ago before they actually bought. Was that you, or are my memories misplaced? If it was you, then you must be DYING to say “I told you so”, but I’m sure you won’t.
Yup, that was me - good memory! I won’t say “I told you so” cause she’s a real sweetheart, but I’m thinking it. LOL
Has anybody heard of (Franchise) Cartridge World? I saw one in Valencia, CA when I was on my way to Office Max, Depot, so I stopped and had my ink cartridges refilled. They worked OK.When they went dry a few weeks later, I went back and Cartridge World was gone. I found out later from an ex-employee that the owner lost $250K on the business. Cartridges? How many cartridges do you have to fill just to break even? I think this is going to be the next big scam. Desperate people and iffy fanchises.
Heard of it and more: Next to a Taco Bell/KFC in Burlington, MA there is a tiny store called “Battery World”. All kinds of batteries: car, motorcycle, cell phone, camera, you name it, they have it. Well, not exactly, but there is a chance they’ll have the battery you need: their in-stock inventory is pretty low judging from looking through the windows.
Don’t think it will survive long.
I’m reminded of “The Scotch Boutique,” routine on SNL, about a store that only sells tape. The sticky kind.
http://snltranscripts.jt.org/78/78bscotch.phtml
There is a local battery supply place. I think they do okay. When I call them, the quotes are generally $100-200 per battery order (computer UPS units). Larger UPS units (small 3 phase ones) can easily demand $6000+ in batteries for a single replacement on a single unit. Wait until hybrid cars need new packs, then they are really going to do okay.
Sounds like “Spatula City.”
Remember that from “Kentucky Fried Movie”…or am I the only person here who remembers the ’70s?
I remember… No, wait. I forget.
You buy ten spatulas and get the eleventh free…
Spatula City was from UHF with Weird Al.
What better way to say “I love you” than with the gift of a spatula!
I have lost track of all the people that I know who are trying to start a business. Many are middle aged discards from corporate America who used their severance pay and savings to start some kind of business: windshield repair, printing shop, computer repair, pet grooming, bagel shops, soccer gear, coffee shops, photography, picture frame store, you name it. Many are people who were pulling down close to 6 figures or more before getting the heave ho (”You’re fired, have a nice day!”). Most of them fail within a year and end up working multiple menial jobs to survive.
On a related note, an interesting read is “Bait & Switched”, written by the same author who wrote “Nickeled and Dimed”.
“Bait and Switched” is the white collar version of Nickeled and Dimed. The author goes undercover as a middle aged job seeker, and its not pretty. Career coaches (again, self employed characters who also can’t land a real job) try to sell her expensive coaching packages. Endless networking mixers that lead nowhere (she just met other people who have been un/underemployed for years). She even learned that some proseltyzers create bogus netwoking meetings to create a captive audience!
In the end the only “job” she can get is either selling insurance (AFLAC) or Mary Kay, both of which are commission only with no benefits.
I know that we like to kick realtors around, but I know a few who are realtors because they are corporata America discards and they couldn’t find any thing else. Barbara Ehrenreich (the book author) met more than a few failed Realtors during her networking meetings.
The real estate industry is filled with folks that meet that criteria. After 40 you’re done in Corporate america for the most part.
Franchises are great for those who have money but lack original thoughts. You are buying a package; manuals, products, brand, and in return for slave labor you make the company a large profit and yourself a modest wage. Some people do really well, but that’s only a sign of a good operator, while many of them are average dolts who never turn a profit and end up bankrupt.
I was friends with a couple who owned a handful of Subway restaurants 10 years ago, back when it was a novelty. They were making about $100,000 in income off their stores each year, or $50,000 a person. Not too shabby, but not that great either considering they worked 60 hours a week running the stores and had constant headaches. Frustrated, they finally sold the business for a modest profit and got into sales.
Some church friends bought into a pizza shop franchise. While they turned a modest profit (about equal to what they would make working for ‘the man’, they suffered constant hassles from the franchisor, such that I got the strong impression they were practically slaves working for someone else.
Subway shops require minimal investment. I know a Vet School student who owned and ran 4 Subway shops while she was an undergrad. She sold them when we moved to attend Vet school at CSU.
One of the problems with franchises is that people fail to do their homework. I have met more people (acquaintances) that have not sought out the help of a qualified CPA or attorney to assist with things like contract review and market feasibility studies, etc. Then when the business does not work, and they have lost $150,000, they wonder what happened. I know of a couple I have only know a couple of months and they are trying tounload two franchises right now. People dont understand you ususally work much harder on your business (unless it is a large corp) managing employees and watching the cash register. Most franchises are also relying on disposable income (like the things that were listed above such a pet grooming and bagel shops). So when the economy slows, expect them to go first since generally the owners are undercapitalized anyway, and thus the bigger players can undercut them price-wise and put them out of business.
I drove past a shop yesterday that specializes in bar stools. wtf ?
I had the same experience with “Save On Inks” in Cambridge, MA. I wasn’t too shocked when they closed.
Printer ink is a huge portion of HP’s profits, and I believe it’s worth more than it’s weight in gold.
That’s why Dell moved big into printers.
money.cnn.com has an article today (”Losing the American Dream”)wondering why, with the economy so great, so many people are worried.
“As Third Way documents in its reports, the American middle class isn’t really shrinking, so much as it is anxious. The median household income for workers aged 25 to 60 is nearly $62,000. If both spouses work, it’s close to $82,000. As Kessler notes: “That is not an extravagant living. But it is not drowning. And it is not one step away from losing your home.” The same Third Way report noted: “The bottom line is that the middle class is shrinking not because the bottom is dropping out; it is because more people are better off.”
So, are they saying the middle class is disappearing because more middle class people are now rich? Say what??? Also, the middle class isn’t shrinking as much as it’s anxious? How do these two concepts (anxious and shrinking) even go together?
And it is not one step away from losing your home
It is if you are one step from losing your job and are up to your eyeballs in debt.
And you have no health insurance and no pension.
And your kids want to go to college.
From Bloomberg, Wall Street CEOs say subprime is contained.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aP8R7z4eB_cU&refer=home
Did they mention who is containing it and how? Don’t tell me it is Mr. Market — I just don’t buy that…
I think they’re approaching it with the grade-school mentality: “It’s contained by the gravitational field of the earth.”
40 years ago I wrote to the Social Security Administration asking if I could opt out and provide for my own retirement:thank you very much. Needless to say, they didn’t dignify it with a response. Well, give it back you say. Well, guess what? I do, and then some. I use it to pay the taxes on my RISK based assets. Sigh…
(40 years ago I wrote to the Social Security Administration asking if I could opt out and provide for my own retirement:thank you very much. Needless to say, they didn’t dignify it with a response.)
Here is the response: you aren’t paying for your retirement. You are paying for your parent’s retirement, who put very little in (the program started paying soon after it started collecting) but are getting a lot out. Since the current generation is smaller than yours, you are getting a good deal — lower taxes now, good benefits later.
Your children will get a less good deal when they pay for you. But we don’t want to tell them that.
I think rougevalleygirl is retired now, right? Either an old baby boomer or just a little too old to be a baby boomer. The children of baby boomers are currently getting an extremely bad deal, and we all know it. However, we also all know that said boomers will get their way no matter what because there are more of them and it’s all based on the vote.
So, in a nutshell, if you’re a boomer, not to be mean, but please stop complaining. You have gotten the best deal ever on Earth.
Boomers were the first generation to live with the knowledge that they could all die en masse with no warning. A prominent psychologist once remarked that because of this, Boomers are in a perpetual state of PTSS. Of course, the following generations were likewise affected, though I think it may be a bit more surreal now (nothing like hiding under your desk from an atomic bomb strike when you’re in grade school to bring something home). This would explain a lot of behaviors. (Tried to post this earlier, sorry if it’s a double post.) 911 and subsequent fears have brought it home again.
You’re right. pre boomer (1943). I still think the system should be income limited and need based. However we did lead a very frugal and conservative life. I have never owned a new car. I financially support my very old and financially distressed parents who by the way only owned new cars. They did take very good care of us, and I do appreciate that.
A thing to keep in mind is that SS is not just a pension plan, it also provides a disability benefit and a death benefit (to you survivors). This is not unusual for state pension programs. From what I understand, Euro J6P’s do not buy life insurance like we do here in the states (nhz - correct me if I’m wrong).
sorry, don’t know anything about it except that all my pension money and life insurance went into a black hole, and that seems to be fairly normal for selfemployed people in the Netherlands … Probably government workers get a much better deal because whatever goes wrong (like gov pension funds speculating in US mortgages and CDO paper…) gov. will tax the citizens to fill the pension fund again.
Repeat after me, “The mortgage mess is contained to sub prime”
http://tinyurl.com/2kcsj9
Big homes, large loans raise rate of foreclosure
Weed complaints are up in Highland Park, and so are foreclosures.
Fitting music for the end of an era…
http://www.youtube.com/watch?v=1LnOjTvsp-8
Just wanted to say thanks for the replys all, give me some things to think about. I also like the idea of throwing the lowball offer out there and just waiting. Thank God my wife is not house crazy and is willing to wait.
Please keep in mind that prices could easily go back ten years or more. You don’t want to catch that falling knife!
A question for the financially more astute out there…
If synthetic CDOs are collections of CDSs (Credit Default Swaps), doesn’t that mean that the owners of the CDOs (hedge funds, etc.) are collecting income from the CDSs, in return for paying off if there is default in the securities that the CDSs “insure”.
In other words, is it true that the hedge funds, etc., buy owning synthetic CDOs, are acting as “insurance companies” to investors in mortgages?
If so, what happens when these hedge funds collapse? Is the mortgage investor then left without insurance, on an investment where he was *paying* for insurance through the CDS?
Look, it’s like the guys who come into a store with a twenty-dollar bill, ask for change, then hustle it around until they have the cashier so confused that they walk out with thirty bucks. I’ve seen it attempted. As long as the cashier will only do one transaction at a time, the hustler won’t get extra money. Unfortunately, this market has allowed, literally, millions to do just that. They walked away with money to which they should not have been entitled by virtue of lies, fast talking, and shenanigins. Businesses aren’t exempt. The insurers have been taking premiums, but they can’t possibly pay all of the debt if defaults exceed a certain percentage. Do you think they’re giving that money back?
Yeah, the writers of the CDS are collecting income on them (it’s not dissimilar from an insurance company with annual premiums). If you are buying synthetic CDOs, usually you are writing the CDS (it pays the spread on the CDO). Think of it a little like covered calls. Essentially a Synthetic CDS would be not unlike the structure of a single security that represented a covered call unit (technically everyone knows that puts and covered calls have the same exposure–the only difference is leverage, but I’m refering to combining two securities here).
To create a CDO you need two things, high quality debt and short CDS positions. To give an example. Let’s create a SynCDO of $1000 million (or $1 billion). So we begin by buying $200 million in treasuries, then we CDS on a portfolio having total face value of $1000 million. Now we create the tranches, the first tranch is an $800 million “super senior tranch” this is essentially a CDS that will only cost a few basis points a year because we’ve got a diversified portfolio of $1 billion of bonds that have to have 20% defaults before this tranch doesn’t get paid (rather than a cash CDO that only has a single (or single group) credit risk. The next tranches are exactly the same as those of a normal CDO (they are capitalized and rated according to similar standards).
As defaults on the insured bonds occurs, it eats through the $200 million collateralized levels first. If the defaults were to reach the CDS, the payouts would depend on the financial guarantees in place between the creator (frequently a large bank) if the most senior tranch (the effective CDS) is sold (one reason for the creation is that under global banking rules capital charges for those guarantees are effectively 0 so they are a nice asset to retain (the bank makes money but do not have to retain additional capital).
Bluto, I took 2 years of differential equations in college and got A’s, but this stuff you’re talking about makes my head hurt. LOL
Banks starting with “W” make great candidates for selling short. Such as Washington Mutual, Wells Fargo, and Wachovia.
Banks starting with the letters “A” to “V” also make great short sale candidates also.
So does that mean that a market neutral postion would be long Zion’s bankcorp by your strategy, then?
LOL.
DQ (DataQuick) has the new California numbers out for June 2007:
LA Times SoCal chart:
http://www.dqnews.com/ZIPCAR.shtm
Cali select cities chart:
http://www.dqnews.com/ZIPCAR.shtm
I haven’t even looked at the data yet…
Off the top…
LA County median price up 5.8% from same time last year…
But get this…the median $/sq. ft. has gone DOWN from $405 a square foot last June to $403 a square foot this June. Might not be significant, but interesting none the less…
More…
Venice:
Last year: $1,124 sq. ft. median
This year : $873 sq. ft. median
La Canada/Flintridge:
Last year: $635 sq. ft. median
This year : $564 sq. ft. median
Los Angeles - Bel-Air:
Last year: $621 sq. ft. median
This year : $562 sq. ft. median
Los Angeles - Mar Vista:
Last year: $798 sq. ft. median
This year : $670 sq. ft. median
Again, I don’t know how significant these are, I’ll try to play with all the data I have (1 1/2 years of DQ numbers) later tonight or tomorrow…
The biggest developer in Silicon Valley, and one of the wealthiest people on the planet, sold all of his real estate holdings in 2006:
http://en.wikipedia.org/wiki/John_Arrillaga
Disclaimer: Wikipedia is not always the most reliable source I realize, but it is an interesting start for some research.
Wells Fargo pulls popular subprime loan from mix
http://biz.yahoo.com/rb/070723/wellsfargo_mortgages_subprime.html?.v=3
“The company in an e-mail said it ended on Friday retail offerings of so-called 2/28 loans, which at 65 percent of all subprime mortgages last year are the staple of the industry.”
And the tightening continues…
THE RATINGS GAME
Fox-Pitt says MBIA, Assured are undervalued
Valuations argue for financial guarantors’ upgrades
By Greg Morcroft, MarketWatch
Last Update: 10:01 AM ET Jul 23, 2007
NEW YORK (MarketWatch) — A Fox-Pitt Kelton analyst upgraded the financial-guaranty sector Monday, saying that companies that insure bonds have sold off too much because of what he considers overblown worries about exposure to subprime mortgages.
“The financial guaranty stocks have been hit hard by subprime concerns, but we believe the reality is far less severe than current perceptions. Reality will eventually beat perceptions,” analyst Gary Ransom told clients.
“Buying these stocks when fear is greatest has been a winning strategy,” he added in a research note.
http://www.marketwatch.com/news/story/fox-pitt-kelton-analyst-says-mbia/story.aspx?guid=%7B3174B9E9%2DAEDE%2D4478%2D8AC1%2DBBCD42F22260%7D
“Reality will eventually beat perceptions,” analyst Gary Ransom told clients.”
Which is why we are at where we are now, as opposed to the “home prices only go up” exuberance of the past 4 years.
“Buying these stocks when fear is greatest has been a winning strategy,”
Which is why it might be a good idea to buy them 3-4 years from now.
Here’s a great Craigslist find:
“After living in this city for 8 years, living in a lot of horrible neighborhoods, and doing the eternal run-around to find a decent apartment I have become fascinated with the San Francisco rental market. At the end of the August 2006, I was dealing a really shady landlord whose house was going into foreclosure as he (like a lot of the city) had speculated on an adjustable rate mortgage…and he was desperately trying his best to get as much money as he could out of me in any illegal way possible.
Not wanting to deal with such a shady landlord, I broke the lease, and fled to find a new place. As I started looking for places, I noticed everything that used to be for rent was now for sale due to the same forclosure effect that happened to my landlord.
It also appeared that the rents were going up….. but… were the really? or am I just paranoid and bitter?
Since I was waiting to get my research published, I figured I could waste ample amounts of time coding perl scripts and learning google maps. ”
http://mullinslab2.ucsf.edu/craigstats/
“when fear is greatest”
I forgot to add…”You haven’t seen anything yet…”
from Grand Junction, Colorado comes yet another hazard for empty houses: (www.gjsentinel.com/news/content/news/stories/2007/07/23/7_23_1a_storm_fires.html)
“Another lightning strike ignited the top floor of 398 Summer Glen Drive, according to witnesses.
No one was living at the house at the time of the blaze. A “for sale” sign could be seen in the yard.
Omar Aguiano, who lives at 383 Summer Glen Drive, said he heard lightning strike the home and quickly walked outside to see what had happened.
“We just saw a lot of smoke coming into the house,” Aguiano said. “It smelled like burnt rubber.”
Aguiano said the home’s previous owners, Jared and Jessica Steep, according to Mesa County Assessor records, were fortunate they moved out last week.”
If they have a mortgage doesn’t the bank get the insurance check? If it’s replacement cost won’t the check be lower since building costs are down? Do the owners owe the difference to the bank?
Gulf consumer spending soars
By Javier Blas in London and Simeon Kerr in Dubai
Published: July 23 2007 22:01 | Last updated: July 23 2007 22:01
The days when Gulf Arabs would pass the long summer days in Europe are increasingly on the wane, partly because of the rising cost. Many Gulf families are eschewing London, Paris or Geneva for summer holidays in Cairo or Dubai, where their dollar-linked currencies go further.
With the US dollar at its lowest against the euro and at a 26-year low against sterling, consumers in some member states of the Organisation of the Petroleum Exporting Countries have begun to adapt their spending patterns to the new environment.
http://www.ft.com/cms/s/faa05882-3959-11dc-ab48-0000779fd2ac.html