The Housing Bubble

As Palmetto said the other day: how’s that globalization working out for you?

Yikes, that is truly scary, brings up the question where to put your savings, a number of people on this blog have advocated foreign government bonds. Does the inflationary pressure of every country running their currency printing presses at full speed mean that even this recommendation is risky?

Could some of the great minds on this blog comment?

The Plunge Protection Team. Another acknowledgement:

“We are assured all is well since the market “recovered” on Monday. This “recovery” is based upon the belief the Fed will “save” the stock markets at today’s, August 7, 2007’s, meeting. This is the only rational explanation for the rise Monday, although the Plunge Protection Team sure looked active around 2 p.m. to me. The PPT that doesn’t exist of course. The PPT is like dark matter in the universe. You can’t actually see it, but you sure can see its effects.”

From The Fed’s Meltdown by Doug McIntosh
http://www.gold-eagle.com/gold_digest_05/mcintosh080807pv.html

Speaking of “easy” money…Ben just got some new servers. They probably weren’t free. He’d probably appreciate a donation.

What does this part ot the article mean?
“…unlike the Fed and the ECB, most central banks in emerging economies are not independent, and thus free to set interest rates in the best long-term interest of the economy. They are still firmly under the thumb of politicians.”

How independent is Bernanke, really, from Bush & the Repugnant-Ones?

The CBs’ liquidity pumps are running at full bore, as openly reported in the business pages of dead tree papers around the planet, even as The Economist pulls away the curtain from the men running the pumps!

Main Entry: man·da·rin
Pronunciation: ‘man-d(&-)r&n
Function: noun
Etymology: Portuguese mandarim, from Malay menteri, from Sanskrit mantrin counselor, from mantra counsel — more at MANTRA
1 a : a public official in the Chinese Empire of any of nine superior grades b (1) : a pedantic official (2) : BUREAUCRAT c : a person of position and influence often in intellectual or literary circles; especially : an elder and often traditionalist or reactionary member of such a circle

Economics focus
The mandarins of money
Aug 9th 2007
From The Economist print edition
Central banks in the rich world no longer determine global monetary conditions

EXACTLY 30 years ago, in August 1977, The Economist published an article by Alan Greenspan, the former chairman of America’s Federal Reserve, who was then a private-sector economist. It listed five economic “don’ts”. One of these was: “Don’t allow money-supply growth to spiral out of hand.” Yet that is exactly what central bankers have done in recent years. The bubble in credit markets that now seems to be bursting and the frothiness of so many asset prices was encouraged by loose monetary policies which pumped liquidity into financial markets.’

Sigh. When this blog turns political, it really goes to sh*t.

Exactely. CFC in one paragraph laments that they do not have a market for their mortgage loan paper anymore, and in the next pragraph indicate that they have already marked the paper they are forced to hold 20% to account for anticipated losses…Who the hell would ever buy any paper from them again except at pennies on the dollar?

I sincerely hope that CFC is allowed to choke and die on their own vomit (worthless loan paper). They have done the economy no service with their shoddy underwriting and loose standards and deserve capital punishment.

Indeed this is a significant period. Changing by the minute. From insiders, it appears that the toxic loans are gone. This will have a major effect upon the pool of prospective home buyers. No longer will those who can’t afford a home be able to buy one anyway using toxic loans. Now you have to have a down payment and verifiable income sufficient to pay off the loan. And even the non-toxic loans will be hard to obtain because lenders can no longer sell the loans they make, for all practical purposes. Obviously home sales will suffer.
Now we can expect to see meaningful drops in house prices.

I was talking to my parents about this last night. First of all, they said, “Exactly what you said was going to happen did hapen.” Yeah! The reference was to my claim that lending would tighten (referring to standards, not specifically rates).

But this is what I am thinking about now. How can we go back to “traditional” lending standards in the true meaning of the word? Really traditional standards meant you went to your local bank where they knoew you. Going into totally traditional mode, the bank loan officer: Knew if your wife was a spentthrift or a good householde manager. Knew if you drank away a good chunk of your paycheck on payday. Knew if your kids were properly but not extravagently dressed. Knew if your older parents or other family were in a postion to help you out if things got tough. Knew if your job was a steady one, or likely to be short term. You get the picture.

There are no employees to evaluate the intangibles that used to be part of the lending standards. So, you go away from the intangibles to just the tangibles.

Old standard: Substantial downpayment and proof that you saved the downpayment, not just received it as a “gift” (that may need to be paid back) from a relative. OK, you can do that one and it may even be easier than before. You don’t have to have done the saving in the bank where you want the loan and you don’t have to have kept the records yourself. You can call the bank or other institution where you collected the money and get them to print out the computer records for the last 3-5 years. Of course, most Americans don’t save, but the standard can plausibly be met.

Old standard: Steady work in the same job or at least the same company for several years with some proof that you are going to stay and have a rising salary. The standard is gone or meaningless. People don’t stay in the same company. And even if they did, companies have no loyalty to employees so people with long tenure can be laid off easily (see Best Buy). With the coming recession, it will happen a lot. So how to substitute? Check that the progression of jobs have always been a progression of higher salaries without too much time in between? That helps, but it takes a while to check it. That will be a hit on employee productivity. And there will be fraud. If you have a big gap, just claim you were consulting and get your buddy to confirm you were consulting for him. Fraudulent tax documents are harder to create than a false telephone reference, but it is possible. Maybe loan originators will demand that the papers be sent to them directly from the IRS?

Old standard: Reasonable appraisal. How many honest appraisers are there left? Didn’t the good ones mostly give up in disgust? And even if you ID the good ones, how can they work with no realistic comperables around?

Old standard: PITI at no more than 28% of gross salary and PITI plus other debt payments at no more than 36%. Still can be done, but the old standard was generally for families lead by two adults with the mother staying home. If such a family got in trouble, the non-working adult could try to make up the difference with at least some work. With both adults working or single adult households (with or without children) the escape valve of adding another job to the mix is out or much harder than it was.

And mortgage originators just don’t have the employees to do an evaluation of any additional information. The only thing I can think of them to do is boost the FICO score requirements and lower the allowable ratio of salary to PITI payments. Everything else requires immediate changes that can’t happen immediately (saving downpayments and staying at the same employer) or huge numbers of employees with insider information on their communities and the ability to make sophisticated risk decisions.

Good luck outsourcing that to India.

It looks like traditional lending standards are on the way back.

So how much of a value hit is the general US residential market going to take in order to bring the system back to “traditional standards”?

40%? 50% 60??

Last L/O I spoke to before I split the appraisal biz, said 20% down borrowers were extinct as dinosaurs.

Great to be a renter.

Mobility & cash is king!

Muggy, it’s so funny you should mention that. I have a major beef with this, especially here in Florida. For singletons (like myself) and couples, both retired and those starting out, converting a garage to a third bedroom is ridiculous. In fact, where I used to live, the flipper had a three bedroom, two bath and STILL converted the garage to make a fourth bedroom, resulting in a crappy little asphalt apron to park one car, MAYBE two. In the neighborhood in which the house was located, there’s no way he’s ever going to get his “investment” back out.

In Florida, a garage, or at least a carport, is necessary, IMHO, to protect the car from the vicious sun, heat and salt-laden humidity. It also provides extra storage. A third or even fourth bedroom on a little old Florida concrete block is like trying to put lipstick on a pig. The only way I can see this working is if the home is bought by some large immigrant family parking their trucks and beaters on the lawn. Maybe that’s the idea.

This 250 B will be gone with the wind anyway. Banks just needed to do something about. “Fed to the resque”
Give me a break. Next week what, another 250 B ?

“..it is droll that their banks were seduced by Wall Street.”

I don’t know what to make of this.. Are European banks trying to convince the world that they are ignorant fools and can’t be trusted with money?

Or is it just more of the standard fare.. Got a problem? Blame America.

Every foreign country that has lost money, the past few weeks…

Has squarely placed the blame on us.

A rolling stone gathers no moss…

It should be interesting to see what happens at future treasury auctions now that the world is figuring out that US banks resold their toxic subprime CDOs to various institutions around the world.

As the economist article from a previous post indicated, the US and Europe are now no longer in control since many other central banks now are holders of US and European treasuries. I don’t think the comment from Chinese officials last week was accidental !

Maybe a little more Due Diligence next time from the big bankers over in Europe? They are starting to sound like the subprime lending “victims” whining about not knowing what they signed. Would you want people like that handling your money?

Interesting strategies, would it make a difference if you begged the bank to renegotiate, waving money in their faces, and they said no.

Would you be able to add a statement like this to your credit report. “We wanted to pay but the bank gave us the middle finger!”

I decided I’d rather have a friend than be right…. so I only rant to my wife now.

It did happen before….1929!
Don’t worry, be happy.

Been reading here daily and posting regularly for some time and always resisted sharing my past (for soon-to-be-obvious reasons). Your anecdote cheared me up as it reinforces something I’ve been telling friends and family just to get blank stares.

I grew up wanting to work in politics. Senior year in college got offered my “dream job”. Spent the next two years working in the White House - and no I won’t tell you which side, it doesn’t matter since the only difference is what they say on TV.

Anyway, in such a position you really learn fast. I up and walked after seeing all I could stand to see. Literally walked - no letter or anything. I now work for peanuts and am happier.

Whenever people learn these facts about my past and ask why I would do something so foolish, I simply reply: “I went to DC an Idealist and left a Realist.”

There is good information and analysis there, but a fair amount of hyperbole as well.

economics is a qualitative science, not a quantitative science

Economics used to identify market shifts involves ample use of both.

Some of these variables will indeed over very long periods of time “act” like constants in their relationship with other factors and not change much. These are the variables that econometricians plug in as constants to design their equations.

Sort of, but this is actually slight of hand. Which economist and metric? There is none. Earlier in the article Austrian economists and their metrics are lauded. Another paragraph, another world.

The collapse of funds like LTCM … and the current hedge fund blow-ups … always collapse because variables start to dance.

Reliance on models known to be flawed can be problematic, but “variables start to dance” doesn’t actually have any meaning.

There are more troubling errors. The description of subprime is cartoonish at best. Funny money has recently exploded, but historically the failure rate on subprime loans is 5-20% at worse and they are profitable and allow minorities to become home owners. There is no advantage to distorting the record of subprime mortgages which overall is actually pretty good. More troubling is the sloppy reference to Fed money printing. The Fed set the rules that allowed banks to print money by making loans. That level of indirection is critical for understanding how things got out of control.

At a cartoonish level this article is more or less right, but the details matter, and in this case Robert Wallach isn’t seeing the situation clearly.

So funny to see that on Pop Matters. I love their music reviews.

you bet, more saver punishment program

“Did we as a country to just whip out the plastic?”

The value of fiat currency in most of the first world was just collectively and spasmodically devalued, with the effect of charging anyone long fiat currency obligations in one of the affected currencies the bailout costs for keeping the price of debt obligations denominated in said currencies propped up. The longs are those holding cash savings and owning government bonds in the currencies which were dilluted, while the shorts tend to be hedge funds and Wall Street (and other nations’) investment banks who, until quite recently, were making oodles of money through the most reckless use of leverage in history.

P.S. This kind of move does not tend to increase the U.S. savings rate…

What happened is that the banks stopped lending to each other so any bank in need of cash to fund demands under existing loan obligations had to go borrower cash from the Fed.

Where did all these cash infusions come from? Did the world’s CBs have it hidden away in giant vaults?

In case my sarcasm went past anyone, these cash infusions are no more nor less than a poor tax — a reverse-Robin-Hood transfer from those long dollar obligations (like the U.S. labor force for instance) to shore up the collapsing debt empire on Wall Street (which represents the asset holdings of the financially elite). Good thing nobody mentioned that it is a tax on savers and the working class to benefit those who already have more money than they can spend.

Cash steadies markets
Infusion from Fed, central banks calms investors – for a day
By Vikas Bajaj
NEW YORK TIMES NEWS SERVICE
August 11, 2007

Central banks around the world acted in unison yesterday to calm nervous financial markets by providing an infusion of cash into the system. But stocks still fell sharply in Asia and Europe, and in early trading in New York, before they recovered and closed essentially flat for the day on Wall Street.

As in recent weeks, the markets moved in wild swings – sharp drops were followed by steep gains and vice versa – underscoring the uncertainty. Investors weighed concerns that losses in the American mortgage market would deepen and spread against their faith in the ability of a strong global economy to withstand additional shocks.

http://www.signonsandiego.com/uniontrib/20070811/news_1b11market.html

Did zillow count the garage as a bedroom?

Great! Heloc the 12K and go buy furniture for the new bedroom.

“The more dollars the Fed pumps into the U.S. banking system … the more it will devalue the dollar … drive away international investors … and actually create the very credit crunch it’s trying to avert.”

Call me paranoid (of course, most paranoia is just heightened awareness, LOL), but I think this is the idea. However, I see the possibility for good to come out of this. Yes, drive away international investors. Take our dollar and put it on the gold standard. Tell England to go stuff it. Let’s have a little period of separation from international affairs and clean our own house, start producing again our own stuff and put in place our own energy innovations. Repair our infrastructure. And then re-evaluate and see if we’re ready to join again the international arena.

By the way, part of all of this is the huge effort to degrade the citizens of the US, politically, financially and psychologically. Don’t give in to it.

“safe and sound manner”? From fnm and fre? They still don’t know how to count!

Rock on.

This is why you see all the ups and downs in th markets. The Quant models aren’t built for stock market crashes. They are built for corrections. When the market keeps collapsing, they end up becoming the bagholders because the models are told that they are buying a deal.

They have a long way to go before those quant models realize this.

Let’s not be too hard on Bill in Phoenix. Evidently he has been successful in his investing to date and is sharing an investment method (Dollar Cost Averaging or DCA) that has worked very successfully over the past twenty years or so.

I agree with you GS that now is not the time to be long the market but who is wrong and who is right and who loses and who wins is not determined until the end of the game. No one’s crystal ball is perfect.

DCA is a pretty good technique but in my opinion (and my money) says that BIP would probably have better luck if he applied DCA to Option Puts.

I’m alive and kicking and as ornery as ever. I’m loaded with cash and government securities and have taken advantage of some stock bargains in large company cash-rich/good earnings stocks that have been beaten merely because they are in the same industry as some flunkies with poor balance sheets and no earnings.

On another board someone commented that if the selection scks then it may be possible to take a loan from the 401K and reinvest directly into US treasuries using TreasuryDirect. The scheme unwinds at some future point by selling the Treasurys and returning the original principal plus interest earned to the 401K. The transaction needs to remain tax free and the interest on the borrowed funds should be close to the interest earned on the Treasuries

Anybody have any thoughts or advice on this? Pros, cons, pitfalls?

I’m doing something very similar to that; I just haven’t decided where to put the loan proceeds. The only drawback I can see to this plan is that if you lose your job you may have to repay the loan fairly quickly, such as in 90 days, or it becomes a taxable withdrawal. As long as you are liquid enough to do that, then it should work out.

Welcome back PB! I knew you couldn’t give up your handle.

I thought it was contained!

It off?

That is a long post but I decided to read it.

So the FED should not prevent bubbles from happening, but when they pop, the FED should step in to mitigate the decline. That is essentially telling investors to keep making investments, even bad ones (expansion) and if things start to go to sh*t as we see it now, they will then step in with a bailout.

So let me say this. What risk is there in the stock market if you know that when things go sour, the safety net of the FED is there to catch you. Where is the deterence? I clearly do not see it.

Good to see some HBB friendly commentary getting into the WSJ althought the comment probably explains why Mr. O’Driscoll is a former Fed Vice President. Good on you Mr. O’Driscoll!

“It must shore up its own finances and reassure investors that it has plenty of cash to survive the storm.”

The key players in disseminating foolish loans that helped many U.S. home buyers purchase homes they cannot afford now seem preoccupied with efforts to maintain a high level of confidence in their hairbrained loan underwriting practices. Good luck with that plan, Godzilla!

“The Dems. Schumer, Dodd, Clinton etc. want a govt. bailout.”

Who are the new D-rats’ downtrodden constituents?

- Wall Street investment banks
- Subprime hedge fund investors
- Mortgage lending companies that abandoned underwriting practices and are now reaping a bitter harvest of their financial folly

And whom do the D-ratic politicians want to charge for the tab of their proposed bailout? Their old constituency: Middle-and-lower income American taxpayers.

kckid,

for what it’s worth (nothing!) I tend to agree. The Dems want the bailout, W might not see this as a worthwhile hill to die on, the other Repub are worthless (for the most part), so we’ll get some kind of bailout.

Question is, can they stop this bubble from popping? Probably not.

Lip

It’s a no win situation. The fed inflates and stagflation hits, they do nothing and instant recession.

“..the final remnants of regulation, expire..”

Perhaps price controls/regulations expire, but govt regulations that drive up the cost of energy production will not…
Want clean burning gasoline? How about 1 part sulfur per billion.. one part per trillion? Wouldn’t that be wonderful?
The industry will gladly provide whatever we can afford.

Electric heat was a killer in New Jersey. And I was only dealing with a one bedroom apartment with one outside wall. I only heated the room I was in and kept things very cold even with that. You could just about see your breath in the living room in the morning (about 55-58). Bills easily ran $200 a month in the winter. I can’t imagine what it would be like in a freestanding house where you had to keep heat on to keep the pipes from freezing.

Let’s build 40 nuclear plants like the Chinese in the next 15 years and lets see where prices go.

I see growth opportunities in rising milk prices.

i believe it goes something like this:

You’re a bank and lend out a bunch of money.. almost all you can lend is lent and your cash reserves are very low.

The people who borrowed from you used that money to make stupid investments, and now can’t sell them, and these investments are not paying off as planned..
So, your customers can’t pay you your monthly interest on the loans.

You need that money or you can’t remain in operation. Now you have to get a loan… but all the banks are in the same boat as you. Who can lend you money? .. perhaps the FED can be coaxed into it.. or maybe they’ll tell you to go suck an egg.

Think of a giant wealth transfer from anyone unfortunate enough to be long $US obligations to shore up the value of MBS and “agency” (translation: Fannie and Freddie) debt, thereby protecting wealthy Wall Street and hedge fund investors through a tax on savers and the U.S. working class (the same poor slobs who already cannot afford to pay their resetting subprime mortgages!).

In case anyone is still confused about what I mean when I say “Plunge Protection Team,” this is what I mean.

AFX News Limited
US Fed adds another 16 bln usd to markets
08.10.07, 12:24 PM ET

WASHINGTON (Thomson Financial) - The Federaal (SIC) Reserve injected 16 bln usd into financial markets in its second operation of the day.

The Fed first injected 19 bln usd early this morning. In that move, it accepted only mortgage backed securities as collateral, analysts say presumably because of private investors’ current distaste for them in the wake of the subprime debacle.

In the latest move all eligible collateral types (MBS, Treasury and Agency) are being accepted.

Funds were trading at 5-3/8 pct at the start of the operation.

http://www.forbes.com/markets/feeds/afx/2007/08/10/afx4008572.html

Take a look at this website and related links:

http://www.newyorkfed.org/aboutthefed/fedpoint/fed32.html

Only very large member banks can borrow money from the Fed. Smaller member banks can only borrow from other member banks. So we can assume that a large Fed member bank was involved in this action.

The Fed can lend to these large member banks on the banks’ collateral of treasury notes (1st tranche), treasury notes or Agency MBS (2nd tranche) or Agency MBS only (3rd tranche). So this was a normal lending action, although it was for a large amount.

Hedge funds and mortgage lenders who are stuck with unsellable Non-Agency mortgage paper are getting hit with margin calls. So we can make the educated guess that margin calls caused these enitities to pull in available cash from their credit lines at a large bank(s). One or more large Fed member banks then had to borrow funds from the Fed to meet this demand for cash.

The member bank(s) will have to pay this money back to the Fed on Monday. The big question now is will the hedge funds and mortgage lenders, who it is assumed caused this action, be able to pay back the member bank(s) ?

This becomes a taxpayer issue only if a bank fails as the result of hedge fund/mortgage lender debt, and only if subsequently the FDIC’s insurance fund (paid for by member banks-not the taxpayer) cannot cover the cost to repay the deposits of that institution.

The Fed’s actions become inflationary only when and if the Fed starts adding money directly to the system. Overnight lending to a member bank is not inflationary.

As for the dollar, it is valued in it’s relation to other currencies as well as by both the domestic interest rate and by the interest rates of other countries. The has Fed signaled it is protecting the 5.25 interbank rate, so it looks like they are trying to keep the dollar stable.

Bottom line: the Fed’s activities can help ease and liquidity crisis. They don’t do squat for an insolvancy crisis.

My guess is that a number of large banks are already insolvent (obligations greater than assets) but we just don’t know it yet (perhaps even they don’t know it yet). If a bank borrows $1 million at 5.25% and lends it at 6.5% for a home only “worth” $600k, when the loan forecloses the bank just lost $400k. Repeat that thousands of times and you have insolvent banks.

As I walked out in the streets of Laredo
As I walked out in Laredo one day.
I spied a foreclosed house, shuttered with plywood
shuttered with plywood, as cold as the clay.

Oh beat the drum slowly, and play the fife lowly
Sing the death march as you carry me along
Take me to the valley, there lay the sod ore me
I’m a young FB, and know I’ve done wrong

I see by your outfit that you are a banker
These words he did say, as I boldy walked by
Come sit down beside me , and hear my sad story
loaned money to the best, and I know I must die

Go fetch me some money, a whole bunch of money
To boost my assets, then the poor banker said
Before I returned, his spirit had lifted
He had gone to the Fed, the banker was dead

Oh beat the drum slowly, and play the fife lowly
Sing the death march as you carry me along
Take me to the valley, there lay the sod ore me
I’m a young FB, and know I’ve done wrong

With apologies to Mr. Marty Robbins, the finest Texan from Arizona.

Only make believe I love you,
Only make believe that you love me.
Others find peace of mind in pretending,
Couldn’t you?
Couldn’t I?
Couldn’t we?
Make believe our lips are blending
In a phantom kiss, or two, or three.
Might as well make believe I love you,
For to tell the truth I do

And if the things we dream about
Don’t happen to be so,
That’s just an unimportant technicality.

Subprime for a Long Time

And one last difference between 1998 and today. Back then, the problems in the markets became known and were priced into the markets in relatively short order. It is going to be several years before we know the extent of the subprime losses. Remember the table that I used last week which showed the bulk of subprime mortgage interest rate resets was not until the first half of 2008. It is going to take years for the markets to know what the losses on the subprime will actually be.

And it is not as if it should be a total surprise. Any investor can go to their Bloomberg and pull up a listing of subprime Residential Mortgage Backed Securities. There are 2,512 of them. If you sort by the ones with the most loans over 60 days past due, you find that the average RMBS has 12.39% of their mortgages over 60 days, and 2.39% have already been repossessed (REO in the next table), with almost 5% in foreclosure.

The table below shows the RMBS with the highest level of 60 day past due (or worse) mortgages in them. Yes, the worst two offenders are the 2006 vintage of RMBS. But notice that a lot are from 2000, 2001, 2003 and earlier, well before the supposedly lax standards of the past few years. The third listed RMBS, the INHEL 2001-B is selling at 18 cents on the dollar (you can’t see this from the table), and has been dropping since 2003. Over 25% of the mortgages in that portfolio have already been repossessed or are in foreclosure, with another 25% past due for over 60 days. Can you say ugly?

But you can also find paper from 2001 that is not doing badly. It should be clear to anybody who did a little due diligence a few years ago that there were problems in the subprime RMBS markets. There was a great deal of difference in the quality of various offerings. So it paid you to do some homework. If you could not get transparency, then you were taking a gamble.

That being said, many of the European and Asian institutions who bought this paper relied on the credit rating agencies. They relied on the models built by the investment banks that put this paper together. As I have written, they sold their AAA rating but put legal language buried in the documents that basically said, “OK, this is not what we mean by AAA in our other ratings.” The document for the RMBS mentioned above was 300 pages of fine print. I will bet you that the vast majority of people buying this paper did not read it or understand what they were reading if they did.

You can bet lawyers all over the world will look at this same screen I show below. They are then going to ask the bankers and credit agencies how they could put such a high rating on the paper seeing the problems in these securities? “Really, you didn’t look at the lending standards?” It’s all hindsight, of course. But that’s what lawyers do. And in front of a jury, it will be a tough day for the banks and credit agencies.

That being said, many of the European and Asian institutions who bought this paper relied on the credit rating agencies. They relied on the models built by the investment banks that put this paper together. As I have written, they sold their AAA rating but put legal language buried in the documents that basically said, “OK, this is not what we mean by AAA in our other ratings.” The document for the RMBS mentioned above was 300 pages of fine print. I will bet you that the vast majority of people buying this paper did not read it or understand what they were reading if they did.

You can bet lawyers all over the world will look at this same screen I show below. They are then going to ask the bankers and credit agencies how they could put such a high rating on the paper seeing the problems in these securities? “Really, you didn’t look at the lending standards?” It’s all hindsight, of course. But that’s what lawyers do. And in front of a jury, it will be a tough day for the banks and credit agencies.

“Holy spin batman.”

I don’t get it…Dow went up in the middle of the week, then went back down. It ended up “up” a little bit from Monday open to Friday close. What 40 character blurb would have been more appropriate?

I agree that strange and interesting things are going on that J6P isn’t watching, but if we start throwing out our own hyperbole, our credibility suffers. The DOW is about where it was 3 months ago, and is significantly up from where it was 1 year ago. Just because some of us are predicting financial Armageddon, it doesn’t mean that every stock downturn *is* Armageddon. If we keep crying wolf, we lose credibility.

This results in a good game of “wack a mole” on everthing that spikes up green on my screen.

This question arose last March as well.. somehow, there are a few billion in debt that exist separately from the supposed general limit. In other words, there are multiple authorizations from Congress, but there is one that is so big, people have forgotten the others even exist.

Trillion, brother, trillion with a T

Contagion? No — that is too mild. The subprime implosion has sparked an uncontrolled global financial epidemic! It looks as though the cases are concentrated in the world’s financial capitals — New York City, London, Frankfurt, Paris, Sydney and San Francisco to name a few…

Wow! Did he really write, “see you in the soupline.” That’s amazing.