Bits Bucket And Craigslist Finds For October 3, 2007
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Condo Buyers
http://www.stockmania.com/2007_10_03_archive.html
I am so jealous of your talent! IMO, envy is the sincerest form of flattery…
Just 1 generation ago, the Soviet Union came apart at the seams and does a similar fate await?
http://energybulletin.net/23259.html
The answer to your question is no. If we were doomed there wouldn’t be millions of people trying to get here by any means possible.
We’re just darned.
People’s own decisions will make them much worse off as individuals, and our collective decisions mean the next generation will be worse off. But there is no need for anyone to starve.
Remember, an excess reliance of free enterprise nearly killed the U.S. after the 1920s, while excess regulation and a diminished work ethic nearly did us in during the 1970s. We recovered.
Americans are no longer guilty of sloth. We just have to get beyond gluttony.
I thought is was raising the fed funds rate 300 basis points in 33?
And Smoot-Hawley had nothing to do with it, of course.
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“And Smoot-Hawley had nothing to do with it, of course.”
No. tariffs were very common in America to help domestic producers.
BTW, I knew a niece of Sen. Smoot (she passed away 5-6 years ago). She said that uncle Smoot did to help the family business.
Great Depression had everything to do with the consumer debt during the 1920s.
Jas
Jas writes “Great Depression had everything to do with the consumer debt during the 1920s.”
I would like someone to dwell on the fact that things really ARE different this time. My understanding of America circa 1929 is that a large majority of Americans still lived and worked on farms. The debt was not necessarily “consumer:” it was capital investment. If a farmer’s negative net worth was 6 times the value of his annual farm product (I’m just pulling numbers out of my but,) that was still a farm that he could work and produce something (let’s disregard the drought and the Dust Bowl) Today, people will have negative net worth, with nothing to work.
You answered your own question. The dust bowl drove people west. Farmers walked away from their farms, because they were covered in … well… dust! There was nothing to work.
“My understanding of America circa 1929 is that a large majority of Americans still lived and worked on farms.”
Nope, most Americans lived in cities. However, a larger percentage of the population lived on farms (in 1932 25% of the population lived on farms) than today ~3%. This actually made the depression less harmful than a similar event today. In 1932 most families in the cities had relatives with a working farm able to provide additional support.
Don’t forget the real culprit of the depression was excess lending (sounds familiar). Twin booms in both real estate and the stock market made people take silly risks (sounds familiar). The difference is that the government let the credit market dry up, causing massive bank runs (see Northern Rock bank, U.K.) and a downward spiral as no one would spend anything if they could even get money from the banks.
I recommend last weeks article in the Economist for anyone needing more information on where we are today vs. 1929. In short, I’m not worried about another cataclysmic meltdown but the possibility remains.
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“I would like someone to dwell on the fact that things really ARE different this time. My understanding of America circa 1929 is that a large majority of Americans still lived and worked on farms.”
As has been answered above it was not the majority by a long shot. What needs to be pointed out is that there were many farmers who had loans secured by farms. I don’t recall the % but it was substantial.
The consumer loans (installment purchases) got started in a big way during the 1920s (and what is happening in India today). Pushing debt is very good for corporations and stock prices as long as it can be kept up (more and more debt can be pushed on households). But it borrows consumptions and growth from the future. But when that futures arrives…
Jas
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“The difference is that the government let the credit market dry up, causing massive bank runs (see Northern Rock bank, U.K.) and a downward spiral as no one would spend anything if they could even get money from the banks.”
Yeah, yeah, yeah, faith in the govt. to prevent the next depression has a very long tradition in the US. It is quite amusing to see this much faith in govt’s ability to manage, or manipulate, the economy.
Q: To whose benefit would govt manipulate the economy to the extent that it can?
Jas
PS: More power govt has to manage the economy more likely people are to suffer. Govt. simply tries to postpone the disaster and in the process makes it much worse than otherwise.
I don’t disgaree with you, Jas Jain. However, the Fed made this mess and they need to clean it up. I don’t want to be homeless and jobless because some asshat overspent on a Expedition and McMansion and three condos in Miami.
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“However, the Fed made this mess and they need to clean it up.”
LOL! The same guys that made the mess should be “responsible” for cleaning it up? At whose expense did the Fed make the mess and at whose expense is it going to clean up? You like to pay twice?? For creating more mess, of course.
Jas
If we were doomed there wouldn’t be millions of people trying to get here by any means possible.
Oh wow!
We’re better than Burma or some African dungheap.
BFD.
“USA! USA!
We can whup Panama!
We’re number1!”
But it seems that “the most powerful nation on Earth” can’t whup a major power like Afghanistan or Iraq.
Some fleas carry plague.
Its one thing to “whup” (we’re actually pretty good at that) and its a whole different animal to occupy and keep the trains running on time.
hd74man hits a homerun with bases loaded.
hd74man, I’ve lived in a bunch of countries. As a resident, not as someone under the wing of the US government or corporations, so I know how life is, how people handle it, etc. I wouldn’t put the US way up and above all the other “first-world nations”, but it ain’t half bad, roughly on par with Europe, depending on what you want out of life of course. Comparisons with Burma are of course completely ridiculous.
Too many people think this place (USA) sucks and is doomed, but there’s a lot of opportunity and even the average J6P’s lifestyle in the USA is pretty darned good compared to the average in most countries — depending on what you want, of course. If you want to work hard, get a house, two nice cars, lots of material things, it’s good. If you want to have a big social safety net, and you’re happy with your family in a two-bedroom flat, maybe some other countries are better for you.
However, the lifestyle you say is pretty darned good is built on a house of cards. Like most everyone here says it’s all built on the sham of credit. And the entire financial systems is gamed in the favor of the rich and usually to the detriment of the working folks. The fact that people outside the US may still be operating on the “land of opportunity” script from days gone by, doesn’t mean it’s reality.
RE: If you want to work hard, get a house, two nice cars, lots of material things, it’s good.
Hmmmm…doesn’t seem like that plan doesn’t seem to be workin’ out too good for a couple of million at the moment.
And relative to a “big social safety net”.
You gotta be kiddiing me.
Take out the income one spouse in each household is grabbin’ from some form of government employment and see what happens to the economy here.
21st century ain’t gonna belong to the biggest debtor in the world.
I think a bubble (like the current US economic/financial bubble) tends to attract the maximum amount of suckers before it collapses; suppose that applies here too.
DING DING DING we have a winner! Wow, nhz, do I EVER agree with you on this one. You hit the nail on the head. Simplest explanation, and the truest. Well, you just made my day, thanks!
And it attracts the maximum amount of swindlers to swindle the suckers. Ben — and we — are like Benjamin the Goat in “Animal Farm.”
Donkey, man. Donkey.
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Yes, fire burns itself out after it has devoured everything its path.
Jas
I’ve been reading how Chinese and Indian nationals are returning to their homelands in strong numbers now that opportunities to utilize their education and gain wealth are now available.
Are the intellectuals leaving while those of lesser intelligence pour in for our safety nets?
My brain will be drained out of this country, just before push meets shove…
I’ll leave a dozen slackers, in my place.
Fair Trade
One word: outsourcing. Instead of importing professionals on H1 visas, they just move the operation!
we see exactly the same in the Netherlands and probably other EU countries with people from Morocco and especially Turkey. The people with higher education or money, and real entrepreneurs (obviously, just a small percentage of them all) are returning to their country (or their parents country) because there are opportunities there, but most of all because of the hatred and discrimination against them in old Europe. Despite the fact that they worked hard to get and education and/or business capital they are usually treated like retarded idiots or terrorists just the same. Obviously this makes the situation in Europe worse, because what is left is definitely ‘below average’.
I think a bubble (like the current US economic/financial bubble) tends to attract the maximum amount of suckers before it collapses; suppose that applies here too.
nhz, I couldn’t agree more. I just got the info on the properties sold within 2 miles of my area in LA. Wanna see a list of knifecatchers within 2.0 miles of where we rent?
04/11/2007, $436,000, 740 sf (condo)
06/22/2007, $639,000,1,108sf (condo)
07/31/2007 $749,000 1,530sf (condo)
07/25/2007 $1,435M, 1,705sf (SFH)
05/31/2007 $720,000, 1,394sf (condo)
07/13/2007 $1,292,000, 2,446sf (SFH)
04/12/2007 $850,000, 1,769 sf (condo)
08/02/2007 $730,000, 1,959sf (condo)
04/02/2007 $872,000, 1,769sf (condo)
04/10/2007 $899,000, 1,769sf (condo)
Neighborhood High: $1,435,000 Neighborhood Low: $436,000
Neighborhood Avg: $862,200
What millions are those will be the question. Looks like uneducated poor people. In general white Europeans are now staying put. And so are booming economies of Chian and India. So the millions you are talking about are uneducated low wage millions.
That’s correct…they are coming to visit..enjoy two dollars for every one of theirs..and then..they leave…
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Race to the bottom, gentlemen. When the living standard in the US falls to level of the rest of the world there wouldn’t be much incentive for people to come here. Until then there are going to be people who will come here to level the playing field. This all applies to the bottom 80%, of course, as those at the top are not impacted negatively.
Jas
My posts do not appear. I’ll try again.
What millions are those will be the question. Looks like uneducated poor people.
You have described the vast majority of people who stepped off the boat at Ellis Island.
“You have described the vast majority of people who stepped off the boat at Ellis Island.”
We seldom hear the history of nativists’ complaints about the immigration of the late 19th/early 20th century. Sure, we hear about the prejudiced remarks about the “Polacks” and the “Wops” and “No Irish Here” and anti-Catholic stuff (and lets not forget the Jews and the Chinese.) But I’ll bet if we were to dig deeper we would find that then, as today, the quality of life, wages, etc. for native-born Americans in that period deteriorated commensurate with an explosion of wealth in the hands of the robber barons. Does anyone remember their history books, about the anarchist movements before the First World War? Luckily we had that war to pare some of our “surplus” population, and then an even “better” sequel. So, yeah, I’m going to speculate that maybe America would have been better off without those massive immigration waves. And my ancestors were among them.
RE: You have described the vast majority of people who stepped off the boat at Ellis Island.
All unaided without resort to their “anchor” babies providing them access to a lavish array of domestic taxpayer welfare entitlements.
But certainly aided by the largely “whites only” immigration policy practiced by the US till not so long ago, and aided by coming from imperial countries that enslaved much of the world’s populations.
Puhleeze, let’s not get moralistic here.
RE: imperial countries that enslaved much of the world’s populations.
Yeah, like Africa’s done real well since they kicked all the “imperialistic” Europeans out.
And what’s moralism got to do with payin’ your own way?
“If we were doomed there wouldn’t be millions of people trying to get here by any means possible.”
Sure, since all those millions have such a deep understanding of macroeconomics, we should look to them for confirmation that we are not in fact doomed.
You would be surprised just how many poor people operate in efficient ways, and not surprised how many rich idiots blow all their money.
Being better-off than Mexico is not a major achievement.
Mexico is even more doomed… they’ve squandered their oil income which is now decreasing somewhat rapidly.
I believe that you are wrong.
Budget:
Definition Field Listing
revenues: $196.5 billion
expenditures: $196.2 billion; including capital expenditures of $NA (2006 est.)
Public debt:
Definition Field Listing Rank Order
20.7% of GDP (2006 est)
Looks pretty balanced compared to the US
Budget:
Definition Field Listing
revenues: $2.409 trillion
expenditures: $2.66 trillion; including capital expenditures of $NA (2006 est.)
Public debt:
Definition Field Listing Rank Order
64.7% of GDP (2005 est.)
Source CIA World Fact Book
Skimmed over the article and will give it more of a thorough read later. Thanks for posting, someone on this blog posted a similar or maybe even the same one a while back. Fascinating. Two thoughts come to mind under this scenario:
1) If you live in CA or parts of the Southwest, be prepared. If the US breaks up, these areas will want independence. No, I don’t think they’ll revert back to Mexico, most of the people who came here did so because they wanted to escape economic repression in Mexico. But I darned sure think they’ll try to start their own separate (Aztlan) country. And that could get really nasty. If you think fighting between the Middle Eastern sects is bad, you ain’t seen nothing yet.
2) Dang us for not insisting on better public transportation. This has really frosted my patootie over the years. We have a very forward thinking local political gadfly in Tampa Bay who has devised a brilliant public transportation plan for the region. But of course he is shouted down by the development lobby, through their bought and paid-for county commission members.
I think you seriously underestimate the appeal of US culture to teenagers. Immigrants might try to keep their families loyal to where they come from for a gneration or two, but they are doomed to fail. Kids who are young enough when they start school learn english no matter what they speak at home. And then they are part of us. The only thing that could stop it is a total hijack of the public schools. Possible with charter schools, but unlikely.
I love public transportation. But it has to be really, really good for people to really use it in an area where stores and other destinations have adequate parking. And it does encourage people to concentrate development around the public transport making land further out less valuable.
“the appeal of US culture to teenagers.”
Does that culture include gangs? We have plenty of home-grown kids in deadly gangs. Now include the Asian and Hispanic gangs. “And then they are part of us”?? Comforting thought.
Unless there is a sea change in public sentiment and behavior, public transit in the U.S. will merely limp along with only spotty and very limited success stories. For instance, here in No. Illinois everytime a transportation spending package comes up you can bet that for every $1 slated for mass transit the highway lobby/Detroit makes sure there’s $50 or more for road construction.
Well there’s a certain degree of circularity at work here. We’ve concentrated on infrastructure designed around most people using automobiles, and almost everyone uses automobiles because in most places you need one to get around. In the post-war period, a far greater percentage of people were able to own* their homes than was the case before, despite the shrinking of the agricultural workforce and the small towns to support it. OTOH, sprawl is a less efficient use of resources than urban construction.
Polly, the public transportation issue starts with good planning and good zoning.
Not only is public transit underfunded in most places, but we as a society made policy decisions over the last 60 years that consistently favor the automobile over foot traffic, bikes, trains and subways.
These policy decisions are both large — the interstate system, expressways that cut city neighborhoods in half, subway or train lines that don’t provide service to the entire population of a city, the stereotypical suburban sprawl — and small — strip malls, the growth of big box stores (and their big parking lots), towns with pro-car zoning, suburban developments with extra wide roads and no sidewalks (a personal pet peeve).
I guess my point is that post-WWII, we as a people made a conscious choice to be less of a mass transit culture and more of a car culture. There are exceptions, of course, and there is often a push-pull dynamic as planning commissions and regional governments re-align their local priorities. In order for mass transit to really work, however, we need to re-think development goals from the ground up.
ET - if you have the chance once, sit in on a C.A.T.S.* meeting sometime. Usually they are held in the Loop but during the workday. Very interesting to see the considerations that come into play in transport planning. They have some great ideas but you can also sense enormous pressures to accomodate sprawl - for example a “super” loop expressway paralleling IL-47 through the exurbs.
*Chicago Area Transportation Study
Edgewaterjohn, if I have time, I’d love to check one of their meetings out. I’ve gone to some neighborhood-level planning / development meetings in the past, but never a citywide one.
Palmetto: Dang us for not insisting on better public transportation.
Right now we (Canada and the US) are still in la la land. We think that the suburbs can expand indefinitely. Well they cannot and they are not. We have reached the limits of expansion, significant numbers of people have mortgaged their lives to the dream of suburban living and are now discovering that they cannot pay! We need to intensify the cities - apartment buildings/condos and public transit. A part of the Iraq/Afghanistan war is a war to defend the suburbs - a losing struggle.
James Howard Kunstler advocates building more railroads instead of highways. He is right.
Reached the limits of expansion?!? In Canada and the US? Oh please! Take a look at the crowded UK, where they still have only urbanised/suburbanised roughly 20% of the land. In North America we still have a LOT of room in most places. (Can’t speak for NYC area, mind you.)
What’s happened in North America and was happening in England when I lived there is that people were CHOOSING to forego public transport because they’d rather have their detached house on a small plot of land and pay the expense of cars and expensive-as-heck petrol than live in a flat where there’s enough density to support public transport. I personally loved the trains there, and wanted and paid extra to live near a line, but many of my co-workers didn’t feel that way.
NoVa Sideliner: they’d rather have their detached house on a small plot of land and pay the expense of cars and expensive-as-heck petrol
yes they would rather and in the US and Canada we would rather but TOO BAD! The supply of oil is not a function of what we would rather do.
Suburbs and ex-urbs exist only by the grace of cheap oil. Otherwise . . . Ghostown, U.S.A.
“City living” - no offense, but have you SEEN a US inner city? Endless run-down buildings, everything is paved over, the trees are all dead, druggies on every corner, etc. I think many people would take very drastic action before being forced to live in the filthy cage of a typical city, crawling with one’s “fellow man” like ants in an anthill.
And who says cities are environmentally friendly? They produce horrific amounts of pollution, litter everywhere, all the food has to be carted in, the waste carted out, and so on. I’d bet we’ll see small-town farming and local living before people return to the cesspools of the cities if oil vanishes.
If you live in CA or parts of the Southwest, be prepared. If the US breaks up, these areas will want independence.
And expect the new PTB to invite you to kindly remove your “white” keister from Aztlan.
“And expect the new PTB to invite you to kindly remove your “white” keister from Aztlan.”
LMAO!
Exactly where do the Aztlatanians expect to get their water? No more water for the Calif central valley, or Arizona, or NM, since in one form or another this is all made available and distributed- and most of all subsidized- by US taxpayers.
If it comes to that, they’ll demand a treaty that guarantees them the Colorado River.
We already guarantee Colorado River water rights to Mexico…
Palmetto:
You and me both, it is staggering how many people here in NYC have never been farther west then Jersey…or how many have never even been to the Hamptons. Even for a day trip.
I loved to drive when i was younger drove to CA 3 times went thru Canada and Mexcio, but sad to say i wish i had more time to drive to Alaska…when gas was still 30 cents a gal…..Damn summer vacations were short.
And why didn’t all those developments out in CA and AZ be built along a light rail line? At least the rail system in NY and CT lent itself to development and terminated at Grand Central and the subways.
=========================================
Dang us for not insisting on better public transportation. This has really frosted my patootie over the years.
i searched that thing.. no hits on “home” except homelessness.. nothing for “house” except warehouse.. house warming..
one hit on “real estate”: they need an income to pay real estate taxes
i fail to see why this anti-USA diatribe (”Hated Evil Empire” gets a hit) was offered for consumption on the blog.
joey, it’s just a point of view. We have much to clean up in this country, those of us who care about it, and I do. The US is basically an idea, held in common by the citizens, based on the Constitution, the basic policy of the country. The further away we get from the Constitution, the less of a US there is.
There is no question that much has been done abroad in our name that shouldn’t have been done.
Palmetto, I have a post that didn’t make it through yet. I don’t know if it will. That article is garbage. It’s not a point of view. It’s junk.
Agreed. Interesting, but irrelevant. Actually a waste of my time.
In the words of Winston Churchill.
“Americans will do the right thing, after exhausting all other possibilities.”
I think the times we live in now are living up to this sentiment. In the end we will pull our heads out of our politicians arses and get our ship righted. It is the hell in between that we are going through now.
Give me a break, aladinsane. Even posting such garbage puts your credibility in question. To compare the Soviet Union of the ’80s with us today is just silly. We have some very severe problems but we are not the Soviet Union. Yuri Andropov’s biggest concern was getting people to go to work, instead of going out to get drunk. They actually had squads of people whose sole task was to round up the drunks and get them to work. The Soviet Union had no economy left in the 1980s. We made them out to be much much stronger than they were.
Don’t forget the Soviet Union was a conglomeration of nations cobbled together at gunpoint. No matter what you say we have now, we don’t have that. Americans still like being Americans.
I think the U.S. has massive problems right now. I am a huge bear on housing. We need to quit spending like poets on payday. But your article is crap, plain and simple.
NYCityBoy, when it comes to the US, I am about as partisan as you can get, I have a deep affection for this country and for my fellow citizens, even when they become obese and annoy the snot out of me, as many did during the bubble. But rather than continue to flame them, I’d prefer to see better education, stronger families, etc.
Yep, we’ve got problems, not the least of which is the gross departure of the US from Constitutional principles. The article is food for thought. No, we are NOT and never were, the Soviet Union. But if you don’t think for one minute this country isn’t fragile and couldn’t be dismantled, take a look around. It’s in a decline that needs to be reversed.
“But if you don’t think for one minute this country isn’t fragile and couldn’t be dismantled,”
Dang, palmetto, watch those double negatives. More cawfee.
I don’t think the parallel drawn between the US and the USSR is viable, either, but I think it’s an interesting read. Our economic and political infrastructure is vastly more stable (even though many of us are nervous about the direction things are going). But, as Palmetto said, the article is food for thought. I’m glad AladdinSane posted it.
Personally, I think a more interesting comparision would be to our brothers across the pond in the UK. The UK is still a world player, but no longer The World Player. Our “empire,” such as it is, is much more likely to suffer from erosion and decline rather than outright collapse. Many of us would argue that erosion is already underway.
they have oil. period
Correct. The collapse of the USSR was caused by the collapse of the price of oil. The rise of Russia has coincided with the rise of the price of oil. This is not a coincidence.
Interesting that this story comes out today:
http://news.yahoo.com/s/ap/20071003/ap_on_re_us/secessionist_movement_1
Wow. That just shows how far the federal government has sunk. It now has common enemies with completely different political and social views.
It’ll be interesting to see what happens with this convention - if it becomes an annual thing and grows.
FWIW - this is why the founding fathers realized that states’ rights were so important, and ingrained them in the constitution. Giving the fed huge amounts of power just pisses *everybody* off and makes them want to secede. States’ rights placates regional needs and desires, while allowing for a cohesive national unit.
“The enemy of my enemy is my friend.”
LMAO, that oughta get the National Guard back from Iraq in a jiffy! That Potok guy must be crapping his pants, if states secede, there go his federal grants.
Secessionist movements seem to be more likely in the near future (unfortunately). I do not wish to live in a theocracy and if such were to continue to develop I would advocate secession in Wisconsin. I certainly can understand states such as Alaska, Montana, Vermont and New Hampshire wishing to separate, nor do I believe there should be any impediments to separation.
We currently have a national government that has called the Iraq war “a crusade”, that maintains secret prisons, that uses torture on prisoners, that funds a private army - Blackwater - not under the control of Congress and curtailment of some civil liberties from the Bill of Rights. The US It rhymes with a lot of other dictatorships beginnings and suggests the formation of a Tyranny.
The US world ranking with regard to Democracy currently rates #15 (prior to 2000 , the US was always #1) out of 150. Last year the US was 7th. The biggest drop was in freedom of the press.
source: WorldAudit.org
http://tinyurl.com/3yf4nj
Your cheese-based nation would be quickly and brutally crushed under the boot of the Midwest Alliance, headquartered in Chicago. Will you send your children to fight for the glory of the great state of Wisconsin or perhaps flee to the perceived safety of Minnesota?
Tiny ‘nations’ don’t last for a reason, and most Americans don’t want to try to form Biafra, or see their country Balkanized. Fortunately your foolish daydream will not become reality.
Its more likely that we will see a North American Union than see a sessionist movement succeed.
That said, it is conceivable that a future NAU could be formed after the US is broken up, and that The member states could include Mexico, Canada, Quebec, Aztlan, the US remnant, the new Confederacy, etc.
Watcher, we will be sure to send you all our tainted cheese!
We will continue to bar the illegal aliens from Illinois in the way we always have, speed traps on I 90/94. Then we will institute mandatory ‘breathalizer tests’ on Sundays for you illegals. Lock you up and charge you a few thousand Canadian dollars. And then the NFL would be truly international, as the Packers beat the Bears and Vikings, the whole international world of independent countries in the former US would be looking! LOL
Tiny nations: Switzerland, Lithuania, Latvia, Estonia, Finland, Tuvalu, Monaco, San Marino, Liechtenstein, Malta, St Kitts, Andorra. Let me opine that Switzerland with a population of 8M has been independent for 800 + years. Wisconsin is a lot larger than Switzerland. (But due to the FDA our cheese is not as good as Switzerland’s cheese, maybe next year.)
Well, I was referring to tiny in population, not the geographic sense. AFAIK, and my European history is not good, none of those nations you name seceeded from others, at least not recently. But even so, those European nations are all part of the EU, not truly independent (does San Marino field an army?) The taxes, military spending needs, and bureaucracy necessary to be a nation drove them to join the EU.
Secession is a bloody process, driven by hatred and it either fails or results in an essentially failed state. I point again to East Timor, Eritrea, Biafra, Serbia, and soon Iraq; those are the real secessionists and they are hardly winners. Even if you establish the Republic of Wisconsin it would hardly be paradisical if you must arm to the teeth, institute a military draft, raise draconian taxes just to support your nation-state, etc. Have you ever lived in a Balkanized state?
Who audits “WorldAudit.org”?
You’re not supposed to ask that, Simi.
“This survey of 194 countries and territories expands a process conducted since 1980 by Freedom House. The findings are widely used by governments and international organizations, academics, and the news media in many countries.”
from Wikipedia
“Freedom House is a non-profit organization headquartered in Washington, D.C. with field offices in about a dozen countries. It is best known for its annual assessment of the degree of democratic freedoms in each country.
The organisation was founded by Wendell Wilkie and Eleanor Roosevelt in 1941, and describes itself as “a clear voice for democracy and freedom around the world”. It is predominantly funded by the United States government, but also receives funding from the Lynde and Harry Bradley Foundation, the Sarah Scaife Foundation and the Soros Foundation. The organization has been criticized for having ties to state power and supporting U.S. international military interventions.”
If anything it is not critical enough.
Hoz, I would hate to see the US break up, but as I’ve often said to friends, if we don’t clean up our own act, others will do it for us. This should be a wake-up call that we need to adhere to the Constitution, Bill of Rights, etc. Somedays, I think the break up is inevitable, because so many in the US don’t adhere to the basic principles and when that happens, we don’t have a country, just a taxation system. And I, for one, am weary of taxation without representation. One good thing about a break-up would be that so many special interest groups would lose their feed at the trough.
Yes, there certainly is a long list of small, successful secessionist nations; Eritrea and East Timor come to mind and I am sure the Basque terrorists have a perfectly workable plan for creating a nation in Spain.
How would you like to cross a national border instead of a state border, with new laws, currency, etc.? Got your passport handy? It’s not much fun which is why the EU is going the other way.
If your state can secede from your nation, shouldn’t your county be allowed to secede from your state, and the town from the county? Ask residents of Baghdad how they like separating by neighborhood.
I would hate to see the US break up.
I also do not wish to live under any tyrannical regime. If it requires threats and acts of secession to eliminate the possibility of tyranny, then so be it.
The US Shouldn’t be ranking at all in regards to Democracy since its supposed to be a Republic, not a Democracy.
Are Iran, Russia, China behind dollar’s free-fall?
Some see ‘Currency Cold War’ meant to bring U.S. to its knees
The hottest selling book in China right now is called “Currency Wars,” which makes the case that the U.S. Federal Reserve is a puppet of the Rothschilds banking dynasty and it has persuaded some top officials Beijing should resist America’s demands to appreciate its own undervalued currency, the yuan.
“As the bombs started falling on Iraq in 2003, I wrote and circulated an appeal entitled ‘Boycott the Dollar to Stop the War!,’ arguing that although the military strength of the U.S. was enormous, its economy was in a mess; with a massive gross national debt, the only reason it could finance its foreign wars and occupations was because of the inflow of over a billion dollars a day from countries accumulating foreign exchange reserves in dollars because it was the world’s sole reserve currency.
http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=57936
Chuck Norris vs Joshua Tree
Who wins?
What the hell is with this “Joshua Tree”? Does it get shoved up somebody’s ass or something?
One can only hope…
Depends on who’s wielding it………….Neil or
ex-nnvmtgbrkr
It is a running joke on this blog that the worst RE offenders should indeed suffer some form of anal insertion of a JTree.
Chuck Norris, hands down. Especially if he’s hopped up on some Dew. And I don’t think a collapse of the U.S. is ridiculous at all. Oil or no oil, this country cannot continue to hobble around the way it is much longer. Whether it be voluntary, organized secession,or a revolution, I do not know. But the fact remains that the U.S. government is functioning for and by corporate America, and is virtually indifferent to its citizenry. When the masses are in enough pain to wake up and realize what is going on, they will rise up. Until then, we are all merely pawns.
Chuck Norris visited the Virgin Islands and now they are just “The Islands”.
Who cares? It’s bound to be a better quality show than ‘Walker: Texas Ranger’ was. I watched 15 minutes of one show before convulsing myself sick with laughter. Only it wasn’t supposed to be a funny part.
W.W.C.N.D.?
Are Iran, Russia, China behind dollar’s free-fall?
Some see ‘Currency Cold War’ meant to bring U.S. to its knees.
Let’s see. Iran, Russia and China join up to destroy America. By accomplishing their mission successfully they would:
1) Eliminate China’s main customer
2) Cause the price of oil to crash, devastating the Russian economy and completely burying the already devastated Iranian economy.
Doesn’t seem like a very smart course of action for them to follow. It’s a pretty weird goal if you ask me, and I doubt very much the results would be very popular amongst the masses in those countries.
Maybe what is really going on is Russia is quietly encouraging Iran and other players (like Nigerian “rebels”) to act up and make the oil markets nervous, thereby keeping oil prices higher than they should be. Energy prices are clearly in a bubble, and when the energy bubble collapses it won’t be pretty for Russia or Iran or the real estate industry in places like Dubai that cater to the oil oligarchs. It won’t be pretty for my town either, but I’ve seen it before and I am prepared for when it happens again.
What’s with all the tin foil hats and conspiracy theories today???
It’s Wednesday, hump day for most workers and the Three Lone Gunmen are running the country.
‘Woverines’!
Avenge me, boys. Avenge me!
rob
Every day is a good day for conspiracy theories.
De-programming from the “official” conspiracy theories maybe?
[Got WMDs, mushroom clouds, cakewalks, freedom-hating Muslims, slam dunks, plus useful idiots and their propaganda?]
Tighten up your tin-foil “I Love Rudy” beanie, Clutus, them Eye-ranians come’n ta gitchya!!
Any bubble collapse in oil would quickly be restored as short-sighted Americans trade off Priuses for Suburbans and once again waste billions of $$ on gasoline to power a vehicle the size of a camper trailer
Lou, you might be looking at Russia and China from the wrong perspective.
Russia is late to the carbon based energy game. They are motivated to keep this carbon party going long enough to cash in. Developed, forward thinking, nations (unlike the US) have established, funded and mandated goals of getting OFF carbon based energy and developing domestic renewable sources for energy production.
Russia needs customers who will keep using oil and natural gas for at least another couple of generations.
The easiest way to achieve this is to destabilize their competition (OPEC) and gain control of energy distribution to the customers. They are very busy doing both things. Neither one of these goals is difficult to achieve.
China has a vested interest in making sure none of their citizens get upset enough to kick them out of power. If that means giving 1 billion Chinese people tube socks & lead toys, in lieu of selling it to the US, I doubt they will be hurting for customers. (we gave them all our money, remember)
The US has 5% of the worlds population. You really think 95% of the rest of the world doesn’t want this cheap krap too?
The coupling of these two objectives would be best served if the US imploded to a point where our consumption of oil and goods fell of a cliff. Oil would tank to a point that OPEC nations would get embroiled in internal strife, disrupting supplies. Russia comes to the rescue of Europe and Asian with stable deliveries of oil and gas. OPEC nations spend all their efforts controlling domestic chaos. The biggest threat to Russia is allowing Saudia Arabia the luxury of having a world with a high demand for oil and a majority share of a huge market.
China transfers US bound production to domestic consumption, Capital flight from turbulent global markets flee to China following the eventual stability offered by a 1 billion strong consumer market flush with real purchaing power and real jobs making real things. Korea and Japan sell PSP’s, Wii’s, HDTV’s to Chinese and Indian youth (dont’ forget India, they like shinny things also).
China will suffer short term, while weening the US off their junk, but the world is a much bigger place than the US market.
Markets are not about high prices, it is about limited supply and excesive demand.
Why is bad news good news? Since multinationals gain a substantial portion of their earnings from abroard, a drop in the dollar increases their earnings. If more bad news surfaces, the expectation is additional Fed rate cuts, which will crush the dollar even further and increase earnings even more. Welcome to the banana economy. From the FT:
Multinationals have emerged as the main drivers of the current US stock market rally as investors move to capitalise on the weak dollar by buying into companies with large overseas earnings.
…
The weakness in the dollar, which has hit a series of all-time lows against major currencies, benefits multinational companies in two ways: it makes their US-made products cheaper on international markets and increases the dollar value of their overseas earnings.
http://tinyurl.com/23cw2e
Not So Fast…
http://www.reuters.com/article/reutersEdge/idUSN0222862220071002
“…Of the five top leveraged loan bookrunners — JPMorgan Chase & Co (JPM.N: Quote, Profile, Research), Bank of America Corp (BAC.N: Quote, Profile, Research), Citigroup, Deutsche Bank (DBKGn.DE: Quote, Profile, Research) and Credit Suisse (CSGN.VX: Quote, Profile, Research) — only Citi has quantified writedowns related to leverage loans as part of a pre-earnings announcement.”
“However much they write down, there’s no doubt that leveraged loans, which once made healthy contributions to banks’ bottom lines, are now a drag on them. Banks will have to offer favorable terms to investors in order to unload them.”
So they aren’t making money on house mortgages or leveraged loans, they must be really raking it $$$$$$$$ in with all those credit card over limit & late fees.
“…With nearly $700 billion in ARMs in negative equity facing interest-rate resets, “depending on how much lenders can ultimately recover, this implies (bank) losses will be more like $210 billion to $346 billion,” she said.
“And that’s assuming the situation doesn’t get worse.”…”
I really hate to assume anything. It is stunning to see numbers bandied about of $210B to $350B in losses which is as much as the “leveraged loan bookrunners” made over the last 7 years. The size of the losses are not surprising, any 5th grade student can subtract present value from purchase price.
I really like the term “leveraged loan bookrunners”, it reminds me of Uncle Vinnie’s gambling book.
“…With nearly $700 billion in ARMs in negative equity facing interest-rate resets, “depending on how much lenders can ultimately recover, this implies (bank) losses will be more like $210 billion to $346 billion,” she said.
“And that’s assuming the situation doesn’t get worse.”…”
Guess DB and C’s $3B writeoffs aren’t going to make a dent in that… 5 million houses at $200K is a trillion bucks… where is the other $994B?
Hoz…
Which flash paper do accountants swear by, nowadays?
And if you have noticed the fees and charges are getting more creative and confusing by the day. I just got something from Amex regarding minimum payment adjustments that I had to read thrice because it is so obtuse. Also note that now if you miss a payment on anything all or most of your credit card account rates can jump to the usury rates and stay there for a while. I would say that raking it in is an understatement hwy50.
AmEx is going to start charging me a fee on my “Free” gold card next year. Bye Bye from a “deadbeat” (industry term) you trained.
test
This is likely just the beginning of the job pain in housing related sectors:
Job Cuts Worst Among Mortgage Companies
http://tinyurl.com/2h5gur
Housing-related layoffs totaled 26,465 in September, while overall layoffs for the month totaled 71,739, according to Challenger, Gray & Christmas.
Releatively low job cuts described in that article. I have a feeling quite a few 1099’s were overlooked…
Got popcorn?
Neil
You know the job cuts in So Cal are much greater than reported. The illegal portion is completely off the radar and not even close to being reported.
I was looking at 127,000 job cuts - as reported in the news media. If a company announces plans to cut 3000, I count 3000. So I count LaSalle Bank as layoffs even though BofA has not filed a mass layoff action report yet. Challenger Gray counts by using Mass Layoff Action reports.
A mass action layoff report has to be filed if the layoffs involve 50+ employees.
And that probably doesn’t include all the illegals who can’t find construction work.
“The weakness in the dollar, which has hit a series of all-time lows against major currencies, benefits multinational companies in two ways: it makes their US-made products cheaper on international markets and increases the dollar value of their overseas earnings.”
I have to say this is a much more credible explanation of the recent strength in the equity markets than the “Plunge Protection Committee” conspiracy scenario.
“than the “Plunge Protection Committee” conspiracy scenario.”
The PPT goal is to keep the “Good Ship Lollipop” with “Goldilocks” on board from sinking into the sea…they’re merely the “bailing bucket”…bailing, bailing, bailing…until they can effect damage repairs at “dry dock” or find “shallower waters” or, if need be…find a safe beach to run aground on.
The Dow is “unsinkable” :-)… In the cargo hold: millions of St. Joesph’s made in China.
‘I have to say this is a much more credible explanation of the recent strength in the equity markets than the “Plunge Protection Committee” conspiracy scenario.’
http://www-personal.umich.edu/~lilyth/strawman.html
It’s not an either-or situation; both can be true.
…which explains why the post utilized a straw man argument.
Wow, looks like she read some of the letters people sent her.
http://www.boston.com/realestate/news/blogs/renow/2007/10/subprime_borrow.html
So, who’s ultimately responsible? I’d like to hear from both sides.
both sides? As if it’s an either / or question?
Not that at least 10 seperate entities could be considered culpable?
well.. although she’s not ready to hear it, the answer lies at the core of the matter.. at the beginning.. with the one and only person who can get the ball rolling.. the catalyst.. the consumer who signed on the dotted line.
joey,
Couldn’t agree more. Each horrific loan was an individual family choice. Were there no internet available for broadbased FREE and immediate information to research all the factors in rationally chosing a mortgage and buying a home it could be argued that people didn’t have the ability to think through the process. Heck, there are even tons of non-profit groups available to counsel novice and low income buyers for free.
Sadly, too many people simply acted thoughtlessly when acquiring hundreds of thousands in debt. Yes, it was easy to do. Too easy. But each person pulled their own trigger with little RESPECT for the risks they were taking.
Even when people knew better, they didn’t care. I have friends who simply would not listen to any of my “paranoid, risk-averse” views, and they put it.
Like my view that “If your rate adjust way up because interest rates went up, you won’t be able to refinance cheap again like you just did.” For some reason, people just couldn’t grasp that, thinking instead that 5% was a normal fixed refi rate, and credit scores didn’t matter so much. The thought that their house might appraise for less in two years than it does now was particularly ridiculous to most.
And some people just came flat out and said “Look, we’ll worry about it then because we really need this money now.”
Morgan Stanley cutting 600 jobs. Merry Christmas!
I am so glad I liberated my retirement holdings from the grips of Morgan Stanley, 6 months ago…
Yes, aladinsane. My dear dad “invested” his IRA with Morgan Stanley. They called him a “gold” investor because he generated more than $5000 in fees per year. That monniker got him bupkis.
At least they announced well before Christmas. Many companies, for some reason, like to do this just around Christmas time. I’ve never understood this, must have something to do with taxes. It always seemed nasty in the extreme to me, why choose the Christmas season to bring such pain? Why not do it in the spring, summer or early fall?
Hope none of them spent their bonus ahead of time. That would certainly be a temptation, what with this “buyers market” we have now, lol.
“Hope none of them spent their bonus ahead of time”
Oh, you just KNOW they did. Can we get a list and send them all sympathy cards with fake Monopoly money in it?
I got a very nice piece of Tiffany jewelry last night on Ebay. Brand new, bought a few years ago as an “investment” and now sold because of “financial distress” (you know what that means - trying to save the McMansion). 55% off retail and it is not a fake, I checked the dealer out throroughly.
One guy I know who does estate liquidations told me his assessment of re-sale for estate jewelry is half and then half again. My mother’s Tiffany necklace sold under 50% of Tiffany’s current retail, but at about what it appraised for when she purchased it in the late 70s.
I think I could have gotten it for a little less but it was late and I was going back and forth with the guy. I did get 25% off his original asking price.
if you bought it on ebay it’s probably fake, there are people on ebay with 1000s of sales and good reputation that deal primarily in counterfeit
Not necessarily. My mother’s Tiffany necklace was sold on ebay and I know for a fact it was genuine, I remember when she bought it and it had the original appraisal. Hated like hell to let it go, too, but what’s old palmetto going to do with a Tiffany necklace? If it was the 70s maybe I could have had it made over to wear with a disco shirt, but those days are long gone.
Also, Tiffany is now very hard to sell on ebay if you are a re-seller. You have to be verified by the manufacturer to sell it, even if it is an older piece. Otherwise, ebay just deletes your listing, with no appeal or recourse.
Right. I checked this every way but Sunday and obtained a written agreement to refund my money if there’s any problem. I”m not worried at all.
You can be almost 100% sure that you have the genuine article. I know this from hard experience with my mother’s estate. Even reputable dealers with genuine items on ebay are having listings deleted arbitrarily because of the VERO (Verified Rights) merchant program that Ebay has put together. It is VERY difficult, almost impossible, to sell certain items on ebay, even if genuine, unless you have the blessing of the manufacturer or intellectual property rights owner, if you can even get them to communicate to you. Let me tell you just how extreme it is: if you put a watch up for sale on ebay and describe it as a “Tank” watch, the listing will be deleted. Cartier holds the rights to that term as it applies to watches. Total shock to me, because I always refer to a rectangular watch as a “tank” watch, just like using the word “Kleenex” for a tissue. Ebay doesn’t even give you a chance to appeal it, they refer you to the rights holder. And, they also restrict your account for a period of time for violating policy you didn’t know existed and they won’t even clarify for you. How’s that for corporate fascism?
Buying trinkets when you should be stocking up on survival goods — nice plan.
And just to give a little more background on this, the whole problem started when ebay dropped its drawers for China. Just following the trend, doncha know, emerging markets and all that bunk. Not that there weren’t US and European peddlers selling fakes here and there (like artwork) but Ebay’s foray into the Asian markets opened the floodgates to fakes on steroids. As a result, they got slapped with lawsuits from deep pocketed companies with their knickers all in a twist about “intellectual property rights” and reputation (in the ultimate irony, many of those companies manufacture in Asia, LMAO). Anyhoo, ebay pulled up its drawers and unloaded its Asian business and started the VERO program, which ended up penalizing decent, long time sellers who just wanted to sell the odd item here and there that they found at a garage sale or the family heirlooms. Ebay got all hotsie-totsie about “selling fakes” a problem they created themselves, and now have all these restrictions and punitive crap on long time, decent sellers (ebay’s customers). They handed a loaded gun to the buyers (who don’t pay ebay’s freight, by the way) recently with their ridiculous ratings system. Thank God I don’t depend on ebay for income, as some people I know do. Did my heart good to read yesterday about the charge ebay had to take for Skype. Yep, that really worked out for them, NOT!
LOL. I don’t need much to survive.
Survival goods? You can keep your freeze-dried Ramen noodle crap.
“Buying trinkets when you should be stocking up on survival goods — nice plan.”
A Tiffany necklace is hardly a “trinket”. Trust me, if the brown stuff hits the fan, a Tiffany necklace could come in very handy as trade goods, because of the metal content.
Now, if tx had bought some Kenny Jay Lane POS, that would be a different matter.
Actually it’s a platinum and diamond ring but I get your drift . . .
Dang, right, I was the one with the necklace, LOL! Anyway, a platinum and diamond ring will be worth more than top ramen. Good on ya, txchick, I wholeheartedly approve of your transaction.
Me, too, and at last you told us what it WAS, tx. I was all in a dither to know. I like rings but I don’t wear any, because they annoy my fingers. I stick mostly with earrings, necklaces and I have a very pretty tiara that I often wear, like to kayak or go get the mail.
It’s just sad that tiaras aren’t worn more.
O-Girl. Tiaras are he best. Bought one for daughter’s HS grad party (Bar B Que at our house) last year (wish it could have been real, but it was a beaut). She wore it on the plane back east from CA when we took her to college last fall. I was amazed at how many people stopped to talk to us through 2 planes and 3 airports.
SUPER! I approve of that! Your daughter was obviously raised right. Good job on ‘ya.
What is the going rate on plat/diam rings these days? I know sale price and appraised price are very different.
CEO’s tend to be on vacation on the holidays, so they can leave all the firing to the HR department and if the press calls for a comment their secretaries can truthfully say they are unavailable. CEO’s want someone else to be associated with that announcement.
Well, I’ve known Companies that have done it after New Year’s…not even giving a warning to the workers before they buy gifts for X-mas,
Welcome back…you’re laid-of.
Maybe they think the depressed laid off workers will drown their sorrows at the mall - and help out retail sales?
Well, they might also figure that if they hung onto the workers through December, they workers would just spend lots of time at the mall or online shopping anyway. Mid-December onwards can be a low-productivity time in many offices. Why not cut then? Let’s the poor sods cut back on Christmas expenses, too, rather than have to pay the credit card hangover with unemployment checks.
The down side of it, though, is that if you get laid of in early-to-mid-December, unless you want to do temporary retail for $8/hour, there’s not much in the way of places looking to hire you on that month.
(I was at one job where they did a 20% layoff. One guy got laid off while he was on a long vacation. Boy was he livid when he got back, since the boss surely knew beforehand that he’d be letting the poor guy go during the time he was spending $thousands. Trouble is, the boss himself would have been sacked for letting anyone know ahead of time.)
Hey, that happened to my friend. (Also an ex- Morgan Stanley-ite)
I worked as a software architect for Morgan Stanley’s conduit division in Boca Raton until mid-September. I left for reasons other than the impending meltdown. I haven’t heard from my former co-workers as to whether or not they’ve been given the pink slip, but most of the ones I confer with regularly are already out job-hunting. The line-of-business staff had already been let go several months ago, but most of these were contingent workforce, and the contingent workforce doesn’t merit a layoff announcement.
I do have to say that I’ve been told on some days, only a single loan would enter the pipeline. It’s hard to keep headcount in place when there is more staff than mortgages!
Amusing article about Countrywide in the WSJ, with the execs trying to fire up depressed employees. “It’s Personal.”
Those folks are probably getting chewed out at parties.
Can These Mortgages Be Saved?
Sylwia Kapuscinski for The New York Times
Borrowers like Shannon Rivas-Spivey have had trouble negotiating with Countrywide to save their loans. She is shown with one of her sons at her home in Somers Point, N.J.
By GRETCHEN MORGENSON
Published: September 30, 2007
ON Christmas Eve two years ago, as Shannon Rivas-Spivey wrapped gifts for her two young sons, she was interrupted by a knock at her door. Standing on her front steps in Somers Point, N.J., was a man from the Atlantic County sheriff’s office, delivering foreclosure papers on the three-bedroom home that she and her fiancé, Harold Spivey, had owned for almost 10 years.
The visit was unwelcome, but not a surprise. Ms. Rivas-Spivey had been battling foreclosure for over a month, ever since the Countrywide Financial Corporation , the huge lender that services her loan, charged her escrow account for flood insurance she did not need and could not afford to pay. During the months it took to have Countrywide fix the error, she said, she fell behind on the loan.
Now the sheriff’s office had come calling. “It totally destroyed our Christmas,” she said. “I feel like a failure. I let my sons down, I let my dogs down. It’s senseless.”
http://www.nytimes.com/2007/09/30/business/30country.html?em&ex=1191384000&en=18bdcb9568a5d1ff&ei=5087%0A
Crisis for New Class of Funds
October 3, 2007 — Hedge-fund executives say the next blow to hammer their industry will likely come from a wave of hedge-fund redemptions driven by highly-levered funds that invest in other hedge funds.
One bellwether of how this may play out in coming months can be seen in the performance of two key European-hedge funds that have sustained sharp losses because of their exposure to some of the most problematic investment strategies in this summer’s hedge-fund sell-off.
Fix Asset Management’s Canary Fund Ltd. and Fairfax Fund Ltd. - each of which have $3.5 billion under management - have suffered a brutal three months.
Their fund-of-fund portfolios have dropped between 16 percent and 18 percent between June and August.
A fund-of-fund invests capital across a series of hedge funds on behalf of pension funds and endowments.
http://tinyurl.com/2wex89
The last informal gig I had with the pension investor - that guy was just in love with this fund of funds idea. They drink their own brand of Koolaid.
This is good reading but takes a few belts of something before you can stomach most of it:
http://www.pionline.com/apps/pbcs.dll/frontpage
Just read “The Halo Effect”. This book should be required reading for everyone in business. Every few years a great business book comes out that claims to have found the silver bullet to all business problems. The Halo Effect dispels all of those books and clearly explains why there never was, is or will be a silver bullet.
Our solar system is up and running, and the meter is running backwards in Alice in Wonderland fashion…
Going solar as recently as a year or 2 ago was more of a green decision, but now with oil approaching $100 a barrel, it’s a no-brainer economically.
Wall Street is taking notice~
http://earth2tech.com/2007/10/02/is-2007-the-year-of-the-solar-stock/
A few years ago, I was judging a jr/sr high school science fair, and one jr high kid was trying to develop a mechanism to get a solar panel to follow the sun (throughout the day, and with the change across seasons) to increase the intensity of the radiation received in the panel. One of the best projects I saw. Wish I’d written down his name…
He’s now working for Google’s solar division…
Just steal the idea, patent it and be done with it already.
Yes, I’m kidding, relax.
Not really hard to do; for a long time you could purchase a device that moves a telescope in tandem with earth’s rotation so an object can stay in view. The fact that a jr high kid is aplying the idea to solar panels gives me hope that not all kids at that age are morons.
Why all technology?…they’ll be plenty of “stawberry pickers” & “sign twirlers” who’ll sit in the shade with a piece of string and move it “manually”. Heck, you’ll be help out the unemployed citizenry
…maybe have them work in the “garden” on cloudy days. ;-)… we have to maintain those Gov’t full employment numbers!
I had one of those installed 10 years ago. It only tracks in one dimension (east and west), but it seems to work.
*stirling solar* had this for years.
I’m waiting for the price to come down — there is a shortage of solar panels, but big plants coming on line. Maybe next year.
The stumbling block of the production silicon solar cells is the supply of silicon of the proper purity. Although silicon is one of the most abundant elements on earth it’s difficult to get it to the purity needed for manufacturing silicon solar cells. Once this problem becomes economically whipped the world will be well on its way to cheap and abundant solar power. IMHO.
Is this what you are waiting for?
http://www.industryweek.com/ReadArticle.aspx?ArticleID=14932
I don’t know if this is still true, but a few years ago a guy from the National Renewable Energy Lab told me that the manufacture of solar panel (photovoltaic) requires as much energy as it will produce in its life time, making them only practical for remote applications
I think that is dated info. There are new processes underway utilizing different elements that apparently deliver much better efficiencies in solar generation (at least that was what I took away from several articles that I read).
could be, similar arguments are made regarding nuclear reactors and ethanol/biofuel …
there are ways to generate photovoltaic energy without silicon, e.g. with certain organic dyes (less efficient but cheaper, and you could use the film on your windows) or using biochemical/biological conversion. It just takes time and money, and current oil prices will help to speed up the transition.
An interesting article about a windmill farm in northern Colorado:
http://tinyurl.com/2qd5ro
the Netherlands exists thanks to windmills (16-18th century) and was early in developing the technology of current wind turbines. But now it is behind in wind energy compared to other EU countries, as a result of many years of rightwing government that tried to kill of everything related to alternative energy. There is a new surge now in construction of big wind turbines, but it seems mostly driven by the huge subsidies that farmers get to put these giant windmills on their land. Just have a few of these 120 meter turbines on your property and you can retire early. So suddenly most farmers are strongly in favor of wind energy … maybe the situation in Colorado is similar?
People are only going to “go green” if it costs them less money.
I equate the happenings with the price of solar cells with what happened to the price of transistors. In the Fifties a transistor cost several dollars apiece. Today the cost of one transistor on a chip is next to nothing.
Something similar will come to pass for solar cells.
I seriously doubt that, because the major reason transistors went down in price is that they kept shrinking. Shrinking solar cells to put more of them on a wafer is not going to help at all.
My point is the techology for the production of transistors became well developed and drove down their price and thus the world became flooded with them.
The same phenom will happen with solar cells.
But nhz has a point. The main driver in transisitor cost reduction was miniaturization. Not saying that solar panel costs can’t be reduced, but they are a different beast than transistors or IC’s.
Miniturization was the method used to reduce the cost of transistors. If miniturization wasn’t the best method then whatever else was the best method would be the method used.
The best method for producing solar cells may not as yet been invented/discovered; The best method may not be based on silicon at all. The smart minds are still churning out their ideas.
I read recently that scientists have developed a spray-on solar ‘paint’….
http://tinyurl.com/3t5s8
Imagine your sweater having enough embedded solar panels to power your cell phone…..
Zimbabwe hikes rates to 800%
Still 800% behind inflation. A shining example of where fiat currency takes you.
yep…this is like closing the barn door after the horses are out…hmm…sound like anyone else you know that may have done this recently ?
Zimbabwe also has the best-performing stock market in the world this year. Coincidence? I think not.
But who gives a crap when it is denominated in their currency anyway?
On a lighter note, I was watching the movie WarGames (1983) a few nights ago and had a good laugh about this. The mother of the main character is a Century 21 realtor (in Seattle). During a phone conversation, she tells a prospective buyer about getting him/her into “some creative financing” and later mentions a balloon payment after 5 years.
Had to laugh at the way the realtor was portrayed (snooty, out of touch with reality), but I was surprised to hear the comments about the financing. Were such toxic loans common back in the 80s housing boom?
Today’s ARM locks you in doesn’t it? Serious pre-pay penalty? I always thought the point of a traditional balloon was to let you refinance easily… not to “lock you in”?
gotta pass a law requiring trigger locks on all creative finance tools..
You forget what the rates were back then. Back in the early 1980’s sellers had to provide financing in order to get close to the price they wanted. This financing was usually about 12% and ran 2-5 years. In the future everyone assumed bank financing would be available at better (meaning lower) rates.
ARMs were popular back then as fixed 30 year rates were 15% or more. Uncle Sam was paying 13%-14% on long term paper.
One big difference, seller financing required the buyer to have a stiff down payment, usually 20-30%.
Yes, thinking about the inflation+interest rate conditions in the late 70s/early 80s makes me laugh when I read about the war-on-savers nonsense. We haven’t even seen a fistfight-on-savers in 20 years by comparison.
Yep. I’m old enough that I keep thinking “Inflation! Where?” Back then some state chartered banks had difficulties because mortgage rates were intersecting with state anti usuary laws. Those laws are WHY virtually all credit card companies are based in Delaware or South Dakota.
because mortgage rates were intersecting with state anti usuary laws.
Interesting point, I wonder if those still exist (because I suspect that rates will have to go up there again.)
JP, banking has become nationalized enough that the only effect would be the mortgages setting up their phone centers and mailing their bills form South Dakota and Delaware like CC companies.
JP
Volcker raised the FF rate to well above the level of inflation - high as it was. The current CPI data do not reflect inflation at all. According to many economists, changes in methodology make today’s 2.5% inflation comparable to 5.0% in the early 1980s and prior. For a good bit of the last 15 years and nearly all of the last 10 years, the real FF rate and T-bill rates have been negative if inflation is properly calculated. That wasn’t true under Volcker.
Volcker raised the FF rate to well above the level of inflation - high as it was.
Of course. But it took a looong time for the fed to come around to get to that state. There were several years in there where things made today look like the cakewalk that it is.
If you’re talking about the early or mid-1970s I would agree with you. But the FF rate went above 8% in 1978 and didn’t drop below that level again until 1986. From 1979 to 1983, it was in double digits for all but a couple of months, with quite a few moves above 15%. The cakewalk years were 1971-73 and 1975-77, when the FF rate was consistently in the 5% range - well below inflation.
The idiot Arthur Burns followed the Greenspan-Bernanke playbook of negative real rates. This ensured sustained higher inflation in later years. It’s no coincidence that Greenspan now cites this as a major concern. He created the problem.
The cakewalk years were 1971-73 and 1975-77, when the FF rate was consistently in the 5% range - well below inflation
LOL. Lemme guess, you weren’t reading financial pages then? Didn’t sit in gas lines either?
The Cleveland fed has a good inflation history tool, can’t find the link quickly.
Inflation from 75-77 started at 11%, dropped to 4.9% and finished the period at a low 6.7%.
I say again, this war-on-savers nonsense is from people that must have started earning a decent paycheck in the late 80’s.
LOL, I meant to say that the early to mid-1970s were the bad years, while the years you originally cited were a cakewalk.
Not sure why you had to drag gas lines into a discussion of real interest rates. That was the result of price controls but I guess you can’t stick to the topic, which is interest rates. I sat in the gas lines, but that data doesn’t support your position that the war on savers was worse in 1978-1982 than today. There was a significant positive return after inflation in those years. Which hasn’t been true since the early-1990s. CPI calculated using the same method used until the mid-1980s shows 5% inflation on average for several years now. During that time the FF rate has been between 1% and 5.25%. War on savers indeed.
Found the link for the cleveland fed:
http://www.clevelandfed.org/research/inflation/US-Inflation/chartsdata/index.cfm
There was a significant positive return after inflation in those years.
??? What do you think the real return was?
CPI calculated using the same method used until the mid-1980s
??? You seem to be under the impression that the CPI manipulation is a recent invention?
Balloon payments were quite common then.
YES! Ask anyone from Citicorp
Countrywide starts campaign to protect reputation:
http://online.wsj.com/article/SB119137467698747210.html?mod=hpp_us_whats_news
To counter criticism that its lending practices are to blame for a surge in foreclosures, Countrywide plans to emphasize its “mission” of helping Americans become homeowners, the transcript says. “I want employees to look down at their wristbands and remember our fundamental mission to help customers achieve the American Dream, and to help them withstand those malicious outward attacks and to motivate them to continue on our journey with unwavering conviction,” the transcript quotes Mr. Gissinger as saying.
“Let’s call it like it is, as I mentioned earlier, it’s gotten to the point where our integrity is being attacked. NOW IT’S PERSONAL!” says the transcript of a talk made last week by Mr. Gissinger. “… And, WE’RE NOT GOING TO TAKE IT!”
Naaa… we’ll keep saying like it is.
Actually, this is the biggest fluff piece I’ve seen in the WSJ in a month, but its funny. 
Got popcorn?
Neil
Friend who worked at Fannie Mae praised Countryslide
GF had a loan w/ them at 10%, outrageous. She’s since refied w/ a new lender.
They are the poster child of sub-prime and rumor has it that they play hard ball with the people the sold toxic loans to because of the fee income generated from foreclosure.
They are going to go down & hard, this article is an indicator of a company thrashing in quicksand which just quickens the sink into bankruptcy!!
Wristbands, or tethers??
And do the 12,000 that got laid off get one too??
What reputation?
MSM commentary suggests that many are puzzled about why the Fed’s “surprise” 1/2 point FFR decrease has not had a stronger effect on auto sales. IT’S THE HOME EQUITY, STUPID!
More Business news
Ford, Toyota sales fall in weak September, but GM, Honda buck trend
By Dee-Ann Durbin
ASSOCIATED PRESS
2:39 p.m. October 2, 2007
DETROIT – Weakness in the housing market and flagging consumer confidence made September another tough month for the auto industry, although General Motors, Honda and Nissan bucked the trend with hot-selling new vehicles, according to U.S. sales figures released Tuesday.
Ford Motor Co.’s U.S. sales plummeted 21 percent for the month, largely due to a 62 percent reduction in sales to rental car companies. Toyota Motor Corp. posted a 4 percent decline but still outpaced Ford for the month and for the January-September period, continuing its drive to replace Ford as the nation’s No. 2 automaker in sales after GM. Toyota had sold 28,654 more vehicles than Ford as of the end of September. Chrysler LLC also was down 5 percent for the month.
Overall U.S. sales were down 3 percent from last September, according to Autodata Corp.
…
Ballew said the Federal Reserve’s interest rate cut in the middle of September didn’t have an immediate impact on sales but helped calm the market and ensure that the tightening mortgage market won’t affect automotive credit.
“For us as an industry, we support and applaud the Fed’s move because we cannot have the spillover effects into other categories,” Ballew said.
http://www.signonsandiego.com/news/business/20071002-1439-autosales.html
Thread alert — this was supposed to be a standalone comment, not related to the CFC story…
What a lot of people seem to be ignoring, including in the news around here, is that even when you factor out sales to rental car companies, that Ford is still down 15% yoy in retail sales.
But hey, the economist on a local talk show was touting how well auto stocks have done this year. So I guess everybody should be happy.
So long as the stock market keeps going up, the U.S. economy will do just fine.
Uh oh…
http://www.marketwatch.com/tools/marketsummary/
I suspect the new Bernanke put strike price of 14K will hold up by day’s end…
At least now they are admitting that they are “calling a bottom” on the housing market. Once they have egg on their faces, I’ll be calling them a lot worse than that.
“I want employees to look down at their wristbands and remember our fundamental mission…”
PBC Correctional Facility 6748689365
They don’t want to become the “Example”.
A couple of things (from MN): The people in the townhome next to us moved out this weekend - no evidence of selling the place, no evidence of trying to sell the place. Garbage was left out on the driveway, I doubt the place was winterized.
USAA magazine came yesterday. Yep, you guessed it. Kendra Todd (USAA member) is in the issue spewing verbal diarrhea about housing. I have my letter to the editor ready to go. Why do I suddenly feel ill being a USAA member? Why did they have to ruin it for me?
Please tell, Kendra Todd was never a military officer. Hopefully, she’s just a daughter of a military member.
I haven’t received my magazine yet, but I’m sure my letter to the editor will not be far behind yours.
Ahh yes… I read it too and was just as shocked and awed as you guys. I wanted nothing more than to slap her upside the head and say: “get a dose of reality”. Pull your head out of the sand and take a look around! I would bet she was/is not an officer, probably a military dependent. She should sign on with the NAR’s bandwagon of experts or start her own “get rich off real estate with no money down” infomercial. What a piece of work!
In regards to your “sand” comment you’re way too polite, but I think we all know where her head has been lately based upon her comments in the article. My opinion of USAA has gone down immensely after seeing her on the cover of USAA magazine being touted as an expert in RE.
Does anyone know if USAA Federal Savings Bank sells its home loans or keeps them?
I have a friend at the office who has an 80/20 piggyback with them, but the first reset is 7 or 8 years from loan origination, not 2. Also, her income was going up in leaps and bounds at the time they got it, so I’m very confident that the two of them could afford the reset rate now though it is still 5 or more years away. But I’m sure they wouldn’t enjoy it.
I think she said that USAA still owned the loan, but maybe didn’t do the processing? Not sure about that either. USAA is where I have my non-retirement savings. I’d like to know a bit more about their business model.
USAA Keeps all loans on their own books as they guarantee borrowers that they will service the loan for its entire duration. Seven year ARMS are usually the type obtained by prime borrowers. Plus Seven years is usually the time horizon by which a borrower recovers all costs incurred in purchase and ownership of a home and would have sufficient equity to sell the home w/o suffering a loss, barring extenuating circumstances. The higher prices of today push that number to year ten of a loan. So I think your concerns can be set aside.
However, what disturbs me is the fact that USAA would get involved in this 80/20 piggyback and thus lose the safety net of PMI.
Bank United Financial warns. Housing problems. EPS to be half of estimates.
NPA +116 - 120M
Added 8-10M to loan loss reserves.
That’s so 1989
Bank United has being losing money for a couple of years now, but because of their huge position on NegAmOptARMS they have been booking unpaid interest as earnings to “say” they are in the black. Now all this toxic waste is hitting their recast date & defaults are spiking. Anyone with money in this bank needs to get out now they will be America’s “Northern Rock” and everyone will act like it came out of the blue when in reality it came out of the toxic financial alchemy of NegAmOptARMS being sold to regular folks who were not suitable for any sort of homeownership let alone a product meant for the uber rich who use it to manage cash flow & optimize tax efficiencies.
“…toxic financial alchemy…”
“medicine…economics…chemistry”
Joe, you’ve got a poet’s touch.
Yesterday’s RAMS story from the Australian makes a great case study. It describes the failed business model RAMS and other lenders used.
Apparently RAMS was borrowing short from the ABCP market by rolling paper every 30 days. When the ABCP market imploded, the cost of funds spiked to above normal levels and more importantly above the rates RAMS had already loaned. As a result, according to one report, RAMS had to be sheared.
RAMS claims not to be a subprime lender and it’s possible it is not. However, with a name like RAMS, and its target lending market, the great unwashed sheeple, coupled with worldwide investor fleecing, it does not have to be subprime to get a bleat.
http://tinyurl.com/2s7l34
93552 Palmdale has now hit 100+ NODs for the 3rd month in a row. That’s 4X monthly sales at current rate, and 3 months worth means it’s no fluke. The number doesn’t normally finalize until the end of the first business week, so it could still go higher.
What kind of weather drives up inflation? Perhaps a blizzard of liquidity?
P.S. If ethanol production involves converting food into fuel, that could also drive up food prices, especially if energy-intensive corn production rises in anticipation of higher demand for its use as an input.
USDA chief says oil prices, weather conditions driving up U.S. food prices more than ethanol
By Dan Caterinicchia
ASSOCIATED PRESS
2:31 p.m. October 2, 2007
WASHINGTON – Increased production of corn-based ethanol has raised U.S. food prices this year but not nearly as much as high oil prices and weather problems, the head of the Agriculture Department said Tuesday.
Acting USDA Secretary Chuck Conner said “clearly ethanol demand is having some impact” on food price inflation, but the fuel is getting too much of the blame “for what’s happening in grocery store aisles.”
http://www.signonsandiego.com/news/business/20071002-1431-ethanol-foodprices.html
According to this weeks Economist, the price of food over the last 12 months has risen 40%.
According to the Wisconsin Department of Agriculture, dairy exports from the state of Wisconsin are up 120% the first 6 months of this year compared to last year.
We had some problems here in the States but there were severe problems in other grain-exporting regions that are driving prices up everywhere. Southern hemisphere drought, especially Australia and flooding in Europe were the big ones IIRC.
Careful what you wish for, Pigmen
More Business news
Buyout firms root for buyout bust, to help boost credit markets
By Rachel Beck
ASSOCIATED PRESS
11:23 a.m. October 2, 2007
NEW YORK – An unlikely group may be quietly hoping for more buyouts to go bust: The same private-equity firms and investment banks that have been fueling much of the takeover activity.
http://www.signonsandiego.com/news/business/20071002-1123-allbusiness.html
More Business news
Index that forecasts near-term home sales fell in August to a low amid mortgage market woes
By Alan Zibel
ASSOCIATED PRESS
9:06 a.m. October 2, 2007
WASHINGTON – An index that forecasts near-term home sales fell in August to a record low as would-be homebuyers had difficulty getting mortgages. Economists said the housing market’s woes show no sign of improving soon.
The National Association of Realtors said Tuesday its seasonally adjusted index of pending sales for existing homes fell 6.5 percent from July and 21.5 percent from a year ago.
The pending home sales index has done a farily good job of predicting sales levels over the following two months said Joshua Shapiro, chief U.S. economist with MFR Inc. in New York.
http://www.signonsandiego.com/news/business/20071002-0906-pendinghomesales.html
There’s No Inflation (If You Ignore Facts)
By Daniel Gross
Newsweek
Oct. 8, 2007 issue
Imagine that a cardiologist told you that aside from the irregular heartbeat, the stratospheric cholesterol count and a little blockage in your aorta, your core heart functions are just fine.
That’s precisely what the government’s cardiologist—Ben Bernanke, chairman of the Federal Reserve—has just done. The central bank is supposed to make sure the economy grows fast enough to create jobs and make everybody richer, but not so fast that it produces inflation, which makes everybody poorer. “Readings on core inflation have improved modestly this year,” the Federal Open Market Committee said in justifying its 50-basis-point interest-rate cut last month, while conceding that “some inflation risks remain.”
http://www.msnbc.msn.com/id/21047604/site/newsweek/
Testimony by Robert Kuttner yesterday to the House Financial Services Committee:
http://tinyurl.com/3bkqgl
Interesting and disturbing parallels with the 1920s.
“The Senate Banking Committee, in the celebrated Pecora Hearings of 1933 and 1934, laid the groundwork for the modern edifice of financial regulation. I suspect that they would be appalled at the parallels between the systemic risks of the 1920s and many of the modern practices that have been permitted to seep back in to our financial markets.”
“Although the particulars are different, my reading of financial history suggests that the abuses and risks are all too similar and enduring. When you strip them down to their essence, they are variations on a few hardy perennials – excessive leveraging, misrepresentation, insider conflicts of interest, non-transparency, and the triumph of engineered euphoria over evidence.”
“The most basic and alarming parallel is the creation of asset bubbles, in which the purveyors of securities use very high leverage; the securities are sold to the public or to specialized funds with underlying collateral of uncertain value; and financial middlemen extract exorbitant returns at the expense of the real economy. This was the essence of the abuse of public utilities stock pyramids in the 1920s, where multi-layered holding companies allowed securities to be watered down, to the point where the real collateral was worth just a few cents on the dollar, and returns were diverted from operating companies and ratepayers. This only became exposed when the bubble burst. As Warren Buffett famously put it, you never know who is swimming naked until the tide goes out.”
“A second parallel is what today we would call securitization of credit. Some people think this is a recent innovation, but in fact it was the core technique that made possible the dangerous practices of the 1920. Banks would originate and repackage highly speculative loans, market them as securities through their retail networks, using the prestigious brand name of the bank – e.g. Morgan or Chase — as a proxy for the soundness of the security. It was this practice, and the ensuing collapse when so much of the paper went bad, that led Congress to enact the Glass-Steagall Act, requiring bankers to decide either to be commercial banks—part of the monetary system, closely supervised and subject to reserve requirements, given deposit insurance, and access to the Fed’s discount window; or investment banks that were not government guaranteed, but that were soon subjected to an extensive disclosure regime under the SEC.”
“Since repeal of Glass Steagall in 1999, after more than a decade of de facto inroads, super-banks have been able to re-enact the same kinds of structural conflicts of interest that were endemic in the 1920s – lending to speculators, packaging and securitizing credits and then selling them off, wholesale or retail, and extracting fees at every step along the way. And, much of this paper is even more opaque to bank examiners than its counterparts were in the 1920s. Much of it isn’t paper at all, and the whole process is supercharged by computers and automated formulas. An independent source of instability is that while these credit derivatives are said to increase liquidity and serve as shock absorbers, in fact their bets are often in the same direction – assuming perpetually rising asset prices – so in a credit crisis they can act as net de-stabilizers.”
“A third parallel is the excessive use of leverage. In the 1920s, not only were there pervasive stock-watering schemes, but there was no limit on margin. If you thought the market was just going up forever, you could borrow most of the cost of your investment, via loans conveniently provided by your stockbroker. It worked well on the upside. When it didn’t work so well on the downside, Congress subsequently imposed margin limits. But anybody who knows anything about derivatives or hedge funds knows that margin limits are for little people. High rollers, with credit derivatives, can use leverage at ratios of ten to one, or a hundred to one, limited only by their self confidence and taste for risk. Private equity, which might be better named private debt, gets its astronomically high rate of return on equity capital, through the use of borrowed money. The equity is fairly small. As in the 1920s, the game continues only as long as asset prices continue to inflate; and all the leverage contributes to the asset inflation, conveniently creating higher priced collateral against which to borrow even more money.”
“The fourth parallel is the corruption of the gatekeepers. In the 1920s, the corrupted insiders were brokers running stock pools and bankers as purveyors of watered stock. 1990s, it was accountants, auditors and stock analysts, who were supposedly agents of investors, but who turned out to be confederates of corporate executives. You can give this an antiseptic academic term and call it a failure of agency, but a better phrase is conflicts of interest. In this decade, it remains to be seen whether the bond rating agencies were corrupted by conflicts of interest, or merely incompetent. The core structural conflict is that the rating agencies are paid by the firms that issue the bonds. Who gets the business – the rating agencies with tough standards or generous ones? Are ratings for sale? And what, really, is the technical basis for their ratings? All of this is opaque, and unregulated, and only now being investigated by Congress and the SEC.”
“Yet another parallel is the failure of regulation to keep up with financial innovation that is either far too risky to justify the benefit to the real economy, or just plain corrupt, or both. In the 1920s, many of these securities were utterly opaque. Ferdinand Pecora, in his 1939 memoirs describing the pyramid schemes of public utility holding companies, the most notorious of which was controlled by the Insull family, opined that the pyramid structure was not even fully understood by Mr. Insull. The same could be said of many of today’s derivatives on which technical traders make their fortunes.”
“Although the particulars are different, my reading of financial history suggests that the abuses and risks are all too similar and enduring. When you strip them down to their essence, they are variations on a few hardy perennials – excessive leveraging, misrepresentation, insider conflicts of interest, non-transparency, and the triumph of engineered euphoria over evidence.”
That about sums up the Roaring 20s and the Roaring 90s in a nut shell. It is taking the Roaring 90s much longer to unwind than it took the Roaring 20s to unwind, thanks to lessons digested about what caused the Great Depression. (Not that there is anything wrong with that — I would much rather have lingering euphoria slowly unwind than 30 percent unemployment!)
Without all the government transfer payments we have vs. the ’30’s we probably would have close to 30% unemployment - all those people would be counted. Government is just bigger.
In the near future…”they” will refer to this single “act” as…The “Root Cause”
“Since repeal of Glass Steagall in 1999,”
“… after more than a decade of de facto inroads, super-banks have been able to re-enact the same kinds of structural conflicts of interest that were endemic in the 1920s – lending to speculators, packaging and securitizing credits and then selling them off, wholesale or retail, and extracting fees at every step along the way. And, much of this paper is even more opaque to bank examiners than its counterparts were in the 1920s. Much of it isn’t paper at all, and the whole process is supercharged by computers and automated formulas. An independent source of instability is that while these credit derivatives are said to increase liquidity and serve as shock absorbers, in fact their bets are often in the same direction – assuming perpetually rising asset prices – so in a credit crisis they can act as net de-stabilizers.”
B.I.N.G.O. was his N.A.M.E…O
SDGreg…Thank you for your post . Leverage was the name of the game in this RE bubble and it’s the same thing as the margin buying of the 1920’s, packaged a little different ,but the same thing IMHO .
Give me a big enough lever, and I will move the globe… And drop it on my foot.
These things happen. It’s countrywide. From the link:
When big banks lost many tens of billions on third world loans in the 1980s, the Fed and the Treasury collaborated on workouts, and desisted from requiring that the loans be marked to market, lest several money center banks be declared insolvent. When Citibank was under water in 1990, the president of the Federal Reserve Bank of New York personally undertook a secret mission to Riyadh to persuade a Saudi prince to pump in billions in capital and to agree to be a passive investor.
In 1998, the Fed convened a meeting of the big banks and all but ordered a bailout of Long Term Capital Management, an uninsured and unregulated hedge fund whose collapse was nonetheless putting the broad capital markets at risk….
It’s probably safe to conclude it was not the Russkies:
In the 1994 legislation, Congress not only gave the Fed the authority, but directed the Fed to clamp down on dangerous and predatory lending practices, including on otherwise unregulated entities such as sub-prime mortgage originators. However, for 13 years the Fed stonewalled and declined to use the authority that Congress gave it to police sub-prime lending. Even as recently as last spring, when you could not pick up a newspaper’s financial pages without reading about the worsening sub-prime disaster, the Fed did not act—until this Committee made an issue of it.
Anybody looking for a POS that is quietly trying to break through a multi-year downtrend - JDSU. It’s riding the coattails of Ciena, etc. and has a tendency to do well in the Oct - January period.
I’m in. Don’t think it has much downside.
Ug. Their competition (avnx, bookam, etc) are walking dead, and have been walking dead for years. It’s still a crappy margin industry that is screaming out for major consolidation.
Yep, I got a lot of that sort of feedback when recommending SUNW at 4.55, now up over 20% since August.
Also buying XHB (homebuilder index) for a trade.
Now that one should get some howls!
I’m not saying it won’t go up… hell, lots of high-beta tech is up 20% since august (including jdsu).
I’m saying its still a crappy market in optical components.
Well, you have to take anything I say as a trade and trade only. I don’t invest in nuttin
Except for Tiffany rings.
I don’t invest in nuttin
I’m sorry, were my optical scars showing?
I am staying out of US stocks. If I do not understand how a company makes moneys, I do not invest my moneys. At some point the music stops. Although the US stock market is a world laggard, it is trading at a high P/E ratio relative to potential earnings.
Today, I am taking positions in JPY/EURO. I am running a stop loss at 168.13, I am looking for a drop to 150. This trade is for me, myself and I and is not suitable for any and all investors. I believe the Yen to be the most undervalued freely traded currency in the world.
“I believe the Yen to be the most undervalued freely traded currency in the world. ”
Why is that Hoz? Japan has relatively high budget deficits (something like 7% of GDP). They are a very strong exporter with high current account surplus. And although their savings rates are high, they are dropping.
The Yen is 30-40% undervalued on purchase power parity. That is why they are such a strong exporter. The carry trade is still in effect. There are at least $900B in short Yen outstanding. Borrow moneys at 1% in Japan and convert to Euros, buy British Gilts and US stocks. When the ECB cuts rates or threatens to cut rates, or when Japan raises its rates the YEN will soar.
The last time this unwound the YEN rallied 20% (a 25YEN/US move in less than a month) and this occurred in October 1997 after the Asian debt crisis of September. The current size of the Carry Trade market is about 10X the size it was in 1997.
The public debt is huge, the budget deficit is less than 5% of GDP but their current account surplus/external debt is unbelievable.
However the current global imbalances between the Euro, dollar and Yen are so out of whack that any minor change in foreign interest rates can result in Billions of dollars changing hands. Expect the unexpected.
Hoz, thanks for the explanation.
More evidence subprime is no longer contained and the credit crunch is not over…the topics get their own separate thread on marketwatch.com.
bulletin
U.S. SERVICE-SECTOR INDEX AT LOWEST LEVEL SINCE MARCH
SUBPRIME TODAY
Job cuts spread on Wall Street; Prince awaits report
By Greg Morcroft, MarketWatch
Last Update: 8:30 AM ET Oct 3, 2007
NEW YORK (MarketWatch) — Welcome to MarketWatch’s daily roundup of subprime and credit-crunch related news.
http://www.marketwatch.com/news/story/job-cuts-spread-wall-street/story.aspx?guid=%7B4E0B25D3%2D25F6%2D4205%2DAE27%2D84733666DCBC%7D
“U.S. SERVICE-SECTOR INDEX AT LOWEST LEVEL SINCE MARCH”
That should be enough reason for the stock market to go up today. Whenever any measure of anything is at its lowest level, it naturally means that we are at the bottom and can only go up from here…
Yep, means the FED might cut rates and stocks might take off. We know earnings of the stock has nothing to do with the stock price. It’s all about the rate cut.
Awwww, 3 condo projects have gone into foreclosure in dt Minneapolis.
http://www.startribune.com/535/story/1460924.html
I distinctly remember being told Minneapolis was different, something about boomer who love the metro envorinment.
Got debt?
I am a little late to the central Denver discussion yesterday so I figured I would post this here…
Anyways I am considering 80205 if/when prices go down to a reasonable level. I came across this:
http://www.recolorado.com/Search/propertyDetail.asp?mls_number=517481
and then I did a zillow on it:
http://www.zillow.com/search/Search.htm?addrstrthood=2882+monroe+street&citystatezip=denver+co&GOButton=GO
ouch! I knew zillow was sometimes inaccurate, but $120K inaccurate?
What is the appeal of that tiny, 100+ year old house, other than being close to city park (don’t they have a gang problem there)?
I think that the zillow estimate is probably closer to reality than the 320K asking price for that POS.
Good lord!!! I wouldn’t pay $320 for that place even in Golden!!! Why on earth would you want to live that far east of the 25? Even the Zillow is very, very high, IMO. Would someone making six figures really want to live in a place like that?
$539000 Carmichael Jewl for Only $539,000!!!!!!
These are clearly the “childrens” that shrub is talking about.
http://sacramento.craigslist.org/rfs/438453575.html
Want a stellar real estate investment?
If California gets another iffy winter snowpack, 30 million of us are going to have to find Plan B, as in water somewhere else. The drought is THAT bad.
25% of the world’s fresh water is clinging to the rust belt cities, in the Great Lakes…
And housing there is buy 1, get 5 free
It coincides nicely with the demise of our auto industry.
I see a Phoenix rising, and it’s not in the desert.
People underestimate the importance of the availability of fresh water. People just assume that if they open the tap that the water fairy will provide it.
Wars will be fought over access to fresh water in the not too distant future.
Absolutely! Water! Water! Waterwaterwater!
Nothing more important, hardly. I used to get all ranty on this blog about the subject, but I’m trying to be less high-strung.
And look how we choose to manage our vital and finite resources, too!
On the thread posted today after bits thread I told palmy that MY town–Olympia–does care about the future, but that the next town over, Lacey, is a chancred leprous blot of pulsing, etc etc, anyway, Lacey whored themselves out to DR Horton et al, and now are out of water and water rights. They have to come begging Olympia, who, foolishly, gave them some, so they can keep the party going. For awhile…
“…Wars will be fought over access to fresh water in the not too distant future”
Isn’t water a needed item in making: “bubbles” ?
Wars are already being fought over water. Sudan. It will only get worse.
Lake Superior at record low
http://tinyurl.com/37svws
Can you say “dust bowl”?
Too true, aladinsane. Took the family to Yosemite this August and the waterfalls were about 1/3 full. One tour guide said to us that another summer like this one and there will be nothing flowing.
Put it this way, no water=death to So Cal. Our rainfall was what this past year 2 inches, when it is normally 14-16 inches. All I can say is OUCH!
And let’s not forget places like Las Vegas or AZ. W/O access to water and electricity, who in their right mind would even consider that place.
Don’t forget, they are using beetles to kill trees along the Colorado up in Moab so that AZ will have water.
Does anyone know anything about living in duplexes? We are moving to Princeton and it seems like most of the places (both rentals and for sale) that are in town and in our price range are duplexes. What are some pitfalls we should be aware of? Are there any advantages?
My BIL lived in one in Sayreville, dumped it right at the peak (Jan 2006), then he rented one in New Brunswick, now bought another one. Personally, I think the space utilization is terrible. Kitchen/LR downstairs and BR’s upstairs, with huge vertical spaces over the BR. It felt like less room than a 2BR apt. On top of that, the construction (cardboard and plastic) is really crappy in both his old TH and his new one. I find them insulting, but to each his own.
Slim here with an etiquette question:
Yesterday evening, I went over to the neighborhood gym to lift ways. After such a workout, I like to take a one-mile cool-down walk. During my walk, I encountered a dear old friend as she was getting into a car driven by one of her neighbors. The driver introduced herself to me, and I recognized her immediately.
She’s the same lady who’s pictured on the real estate agency business card that my friend has on her refrigerator. And you don’t have to ask about my opinion of real estate agents. Suffice it to say that it isn’t good.
The lady’s boyfriend, a real estate specu-vestor who’s currently trying to unload a house near mine, was also along for the ride. I think his game plan was to buy the place, fix it up, then flip it. Unfortunately, we know how that one’s working out. He’s only asking about $20k more than he paid for the place in ‘05, which tells me that he’s probably going to break even at best.
Well, you can probably guess that I don’t consider these two neighbors to be the most trustworthy of people. And the boyfriend’s invitation for me to join them at a Team National meeting didn’t exactly raise their credibility. Do a quick Google on that company — it’s an MLM like Amway.
So, here comes the etiquette question: Do I warn my friend, who’s 86 years old and living on a very tight budget, to beware? Or do I keep my mouth shut and allow events to unfold?
Warn without expectation. Clear your conscience.
Yes, absolutely. 86 year olds cannot afford to lose their nest egg generally. I’d also warn the MLM maven to leave the old lady alone.
Thanks, Chick, and everyone else who’s on this HBB. You truly have my back.
I just sent the following e-mail to my 86-year-old friend:
Subject: About that meeting you went to last night
Message: I did some research on this company — via Google — and I think you should too. Among other things, I found this:
http://forums.kiplinger.com/showthread.php?t=5416
So, be careful. Be very careful.
[ End of message ]
Az Slim,
mlmsurvivor.com is another good link for the deep, dark secrets that happen in most MLMs.
Amway and Blackwater are related by marriage. Blessing their union is neoconservative Christianity. Look up http://en.wikipedia.org/wiki/Erik_Prince for the missing links.
Why am I not surprised?
Yes, I would talk to the friend. That’s EXACTLY what TEAM is…..a baby Amway. She’s going to end up with a basement full of energy drinks for her money and trouble, plus be expected to work her butt off to build her “line.” 86 yr. olds don’t need this BS.
Then if she ignores you, your conscience is clear. Maybe if you got the chance you could mock the others about TEAM too.
Warn the old lady, and if at all possible warn any sons/daughters or other family members she has, about the wolves stalking her.
What?! Hell yes you warn! Ain’t no question of it! Do it right now, while there’s time!
An update: I sent my friend an e-mail, but her ISP took offense to it and bounced it back at me.
But Slim is nothing if not determined. I sent the same warning e-mail, with a preface, to the lady who lives to the east of my friend. (She’s on a different ISP, and her message went through.) The neighbor-to-the-east was also invited to last night’s meeting, but she did not attend.
I urged her to warn my friend to be careful. And I advised the neighbor-to-the-east to take the same approach. She’s in a transition point in her life, and I know from past experience that MLM-ers prey on such people.
So, my friend and her neighbor have been warned.
Thanks again, everyone!
Hey Slim,
Her’e my thoughts:
If…you could in any way possible…find the parent’s (if they’re still living) of the the reality estate gal & the parents of “The lady’s boyfriend,” a real estate specu-vestor and inform them that their “children” are making “a pitch” to an 86 year old…that would be…like… “totally awesome dude”
Yes - it’s the new etiquette for people that know what’s going on. You give others the information and then let it go. You’ve done your part without getting into a useless debate.
1 in 4 homes for sale are distressed properties:
http://www.bakersfield.com/hourly_news/story/250893.html
Yes - the lovely Leslie comments again. At least this one isn’t as stupid as usual. Fastest going up is fastest going down - what a total brainiak.
Developer defaults on $74 million dollar loan from Lennar:
http://www.bakersfield.com/hourly_news/story/250896.html
Sorry Ben, I can’t resist:
“…bringing Bakersfield to its knees”
I’m updating my Bakersfried motto:
Bakersfield,
Oil, carrot, pesticide dust and foreclosed houses
I’m re-updating my Bakersfried motto:
Bakersfield,
Oil, carrots, pesticide dust and foreclosed houses…& free blanket & free one way bus ticket to WeedPatch
I’m re-re-updating my Bakersfried motto:
Bakersfield…2007,
Oil, carrots and pesticide dust & 1 new Lennar built house.
Heard the news about Ford yesterday and I didn’t think too much about it until I pulled in to the service garage at Folsom Lake Ford this morning. The place was completely empty, especially for this time of the year. I asked the attendant if it had been slow recently, his eyes opened up a little and he said “Oooh yeah, reeaal slow. Let me put it to you this way man, I wrote up 4 tickets yesterday!” I asked him what his normal figure was “about 15-20”.
We signed the paperwork, and he directed me to the counter to sign up for a shuttle. As I’m picking up the pen to fill in my name, the clerk jumps up and asks me where I’m headed. I told her my destination and she grabbed the radio and barked “John, we got one going to Folsom!”, “10-4 I’m right out front!” They were both so excited about it. I shook my head and walked off.
I step outside and there’s the shuttle, the door is wide open and the driver is sitting there smiling at me. Like one of the oompa loompas that was driving the crazy boat in the chocolate factory. My new friend struck up a conversation with me about how everyone is moving to Sacramento from Los Angeles / San Francisco because of the prices. Then he goes right into housing, and I mean full force. Not exactly any pearls of wisdom that I remember specifically, but he generally blamed the lenders for the housing collapse. “I hope they burn in…” etc etc. Turns out his nephew was caught up in the subprime mess, to which I conveyed my condolences.
Customer service has always been important to me, I provide desktop support for a small company so it’s a part of what I do. There was a book called “Raving Fans” that I read a few years ago that helped me put it into perspective. Only lately have I really seen the effect that all the recent economic problems are having on the average worker. Everyone is standing up a little bit straighter and realizing that a job is not something you should take for granted. The customer service industry is experiencing a much needed “correction” as well.
“Customer service has always been important to me…”
“…The customer service industry is experiencing a much needed “correction” as well.”
Please enter you’re 16 digit number and press pound,…please choose from the following selections…0 is not a valid selection…to speak to an Indian with a Bronx dialect, select A…S…S…and hit… #
“Indian with a Bronx dialect”. Classic.
RE: Ford
Seen the new ‘08 F-150 F’s traditional bread and butter vehicle?
It’s one ugly cheap lookin’ POS.
The company is definitely toast.
I need a favor. I have to give a speech in a couple days. A group wants to take our schools and consolidate them into county schools. Every thing I’ve researched shows county schools have a lower graduation rate. I’d appreciate any and all comments on countywide schools. Let me know what’s worked and what hasn’t either here or you can email me at ghostwriter007@sbcglobal.net
Either not tallied, or undercounted: (1) Realtors; (2) residential construction workers (esp. the illegal immigrant variety); (3) workers in upstream industries (Home Depot, Lowes etc)
Housing layoffs
Struggling companies in the mortgage and housing sectors have cut nearly 100,000 jobs this year.
http://www.marketwatch.com/news/breaking.asp?id=news/story/2007/08/layoffs_page.htm
Oh, and I have adequate canned goods, water, and bullets, too, along with my tiara and my other ‘trinkets’. I will be very adorable during Armageddon. Anyhow, bubbleglum, I bet you don’t even HAVE a tiara.
That tiara might be worth something if it’s made out of metal.
It’s worth something NOW. It’s worth it’s weight in pretty.
I got it at an antique store, and it came from Louisiana. It’s a bit chipped here and there, actually, and it’s plain old metal. The rest of them, the lesser tiaras, I just got here and there. You know how it is. They just add up.
Kind of like shoes?
Wha…? Guh…? You understand! You sensitive man.
Yes. Just like that.
Olympiagal,
Color coordinated accessories to accent your M4A1? Please post pix. No pink because it just isn’t in the fall color fashion this year.
Question dear: How does the tiara interface with the night vision gear and kelvar helmet/body armor ensemble?
Roidy
First of all, pink is ALWAYS in style, at least on me, and secondly, I detect mockery, Mr. Roidy McSnarky and I am making a note of it on my ‘Vengeance Deferred’ list, and thirdly, if such a situation ever arises, remember–tiaras go with everything, and I’m sure that includes kevlar and night-vision gear–I’ll just tape it firmly around the head strap. Then, if I have to run away through the trees, I’ll ditch the gear but cling to the tiara. No way am I parting with it. It’s my pretty tiara.
lol
“…remember–tiaras go with everything,”
This IS true…just ask Dennis Rodman.
My son advises that when the Apocalypse begins, we should head over to Big5 Sporting Goods store (to grab the guns) then to CostCo for the Mormon-style sustenance. I argue that all the meat will go bad once the power shuts down, so there’s the chance of disease. What does everyone else think?
Olympiagal, the tiara is a nice post-apocalyptic touch, but I would remind you of the French Revolution…
Top Ramen has a very long shelf life.
Ah, yes, the ol’ French Revolution…
However, THIS princess has plenty of bullets, and was raised in red rocks Utah, where shooting is taught in P.E.
I’m not parting with my tiara for nothing! Let them eat lead!
Well, it’s true. I DON”T have a tiara.
Roidy
P.S. Darn
Let them eat loans
Whenever I read these FB stories (section 8 or SSD freeloaders whining that they didn’t get rich quick), that old Melanie song keeps going through my head:
“They only put in a Nickel and they want a Dollar Song”
(Yes, I’m old, so Melanie was my pop culture. But I’m still a huge Melanie fan. I’m going to see her in South Korea later this year)
All I can say is: Melanie…”far out” & “way bitch’in”!
If anyone is planning to attend the Real Estate Disposition Corp’s auction in Chicago this weekend or next, would you please report on the events? I’m curious to see if there are many buyers and the interest level, but I’m unable to make the trip myself. TIA
http://www.ushomeauction.com/auction_details.php?auctionID=H-007
Hadn’t heard about it until your post. Downloaded the property list in Excel format from the website and parsed through it.
I don’t know an awful lot about the suburbs, but the Chicago listings came as no surprise. Plot them all on a map and then overlay the city fraud map and you have a perfect match. There are about 5 units up for auction that are in nice parts of the city, the rest are in places you don’t live in unless you have to. Sorry to say, but the 50+ years of recovery after racist real estate practices were finally ended have been set back at least 15-20 years by the 100% colorblind fraud that was incredibly easy to pull off in these neighborhoods. These units up for auction are a byproduct.
Anyone considering bidding on these needs to inspect the properties carefully. Much of the fraud involved buying habitable buildings in need of a lot of maintenance, kicking the paying tenants out, and then not doing anything to them. By now many of them have been stripped or vandalized and are better off meeting a bulldozer.
Thanks, Brian. Exactly what I figured. I am more familiar with the burbs than the city itself. If I was there, I’d attend for my own entertainment, but all I can hope for is to gather more “street stories” on the market conditions there.
The one in Barrington looks pretty nice.
I got an answer from “Gretchen Morganson” who wrote a Mortgage “victim” sob-story in last week’s New York Times:
Dear Mr. S******:
Thank you so much for your thoughtful and incisive email. Great idea to
focus on those who never got sucked into the easy money vortex but that are
victims of it nonetheless. If I write about them, shall I give you credit?
Thanks, really, for taking the time to write.
Best,
Gretchen Morgenson
At 03:32 PM 10/1/2007, you wrote:
>Email: S******@gmail.com
>Name: Reuven S******
>Hometown: Sunnyvale, California
>Comments: Dear Ms. Morgenson:
>
>I appreciated your article Can These Mortgages Be Saved. Certainly some
>lenders are not doing the best job then can supporting the products they sold.
>
>But I’m puzzled why nobody ever writes about the true victims of the
>mortgage crisis. Balanced reporting would cover:
>
>1. Responsible Savers who have never purchased homes because they would
>only consider something they can put 20 down on and get a fixed mortgage.
>
>Because house prices were bid up by those who only cared about being able
>to pay teaser-rates–sometimes interest-only teaser rates–people in this
>category either couldn’t afford to buy or wisely decided not to because
>they knew the market was overpriced
>
>2. Retired people–careful savers their entire life–who are seeing their
>property taxes rise in because of inflated house valuation based on prices
>set by people who really couldn’t afford to pay and diminished returns on
>their fixed-income investments because of the weak dollar and efforts to
>prop up hosing by keeping the interest rate low
>
>3. People with paid-up houses who can’t move! In states like CA or FL
>where property tax is inflation-protected a good thing when there are
>bubbles caused by irresponsible borrowing people who may wish to sell a
>large home to downsize into a small condo in their later years can’t.
>Their property taxes would double.
>
>These people deserve some attention, too. Sadly, all our representatives,
>both Democrat and Republican, seem more interested in keeping the party
>going, than helping responsible people who saved their money and would
>never consider a risky mortgage.
Good job, reuven! Let’s keep up the drumbeat on the MSM to let them know we’re not rolling over for their sob stories and victim glorification. They’re like the kid who has to show everyone the nasty wound under his bandage…
I’m glad you asked:
This was me last week: http://www.flickr.com/photos/tppllc/1438369761/
The year was 1981:
http://tinyurl.com/2asfqg
The year is 2007:
http://www.winmywpbhome.com/rules.html
MLS #: FX6555115
damn thats gonna be sore in morning.
21% haircut in one of northern VA’s hottest marekts.
Why do I feel a sudden urge to throw up?
Political Rhetoric Heats Up On Mortgage, Housing Issues
By DAMIAN PALETTA and HENRY J. PULIZZI
October 3, 2007 2:52 p.m.
WASHINGTON — Top Democrats in Congress traded barbs with the White House Wednesday, with both sides accusing the other of failing to do more to prevent major mortgage market problems and rising foreclosure levels across the country.
Speaker of the House Nancy Pelosi (D., Calif.) and Senate Majority Leader Harry Reid (D., Nev.) held a joint press conference calling on the Bush administration to appoint a senior adviser charged with limiting the record number of homeowners entering the foreclosure process.
“This is a national crisis,” Mr. Reid said, standing before a large sign that said “Protecting the American Dream.”
http://online.wsj.com/article/SB119143335150147818.html?mod=googlenews_wsj
Bear, I really wouldn’t worry too much about it. They can’t do anything to cure this. It’s too big and bad.
Regards,
Roidy
I strongly agree that govt-created moral hazard should be avoided, but how would temporary tax relief help someone who bought a house they cannot afford?
UPDATE 1-
Bush wants temporary tax relief for subprime ills
Wed Oct 3, 2007 4:00pm BST
WASHINGTON, Oct 3 (Reuters) - Legislation being considered by the U.S. Congress to provide tax relief to people facing foreclosure on their homes should be temporary, the White House said on Wednesday.
“The administration strongly believes this relief should be temporary to assist homeowners during the current mortgage market transition period and to avoid distorting consumer and lender decisions on new mortgage loans,” the White House said in a statement.
http://uk.reuters.com/article/marketsNewsUS/idUKN0322091520071003
AFX News Limited
Bush administration, Congress headed for fight over new mortgage debt provisions
10.03.07, 12:03 PM ET
WASHINGTON (Thomson Financial) - The Bush administration and Congress are headed for a fight over whether legislation offering tax relief to struggling homeowners should be permanent, as Congress prefers, or only temporary, which is what the White House wants.
The legislation, the Mortgage Forgiveness Debt Relief Act, which the House Ways and Means Committee approved in September, should be voted on by the full House on October 4.
http://www.forbes.com/markets/feeds/afx/2007/10/03/afx4182509.html
These stories get better by the day…
Mortgage lenders in subprime ‘traffic jam’
By Saskia Scholtes in New York
Published: October 3 2007 18:54 | Last updated: October 3 2007 18:54
US mortgage companies are being overwhelmed by the large numbers of homebuyers who need to renegotiate their loans to avoid default, creating a “subprime traffic jam” that could frustrate efforts by regulators to prevent foreclosures, experts say.
http://www.ft.com/cms/s/0/b7b4d912-71d5-11dc-8960-0000779fd2ac.html
Subprime: Bailout backlash
Not everyone favors helping troubled homeowners, lenders and investors stung by the subprime crisis.
By Jeanne Sahadi, CNNMoney.com senior writer
October 3 2007: 1:33 PM EDT
NEW YORK (CNNMoney.com) — As the list of proposed remedies to the subprime crisis has grown longer, the chorus against helping troubled borrowers has gotten louder.
On Wednesday the Democrats called on the White House to increase funding and implement proposals for foreclosure prevention.
But judging from the hundreds of reader responses CNNMoney.com has received in recent weeks, “foreclosure prevention” sounds a lot like “bailout” to many Americans, and they don’t like it one bit.
“Let the lumps fall where they may. No bailouts! The greedy banks, local gov’ts, realtors and developers caused it and they deserve this beating.” - posted by John, Richmond, Va.
“No rewards to the people that [k]new buying was way out of [their] means. They get rewarded for [being] irresponsible and I get nothing for being responsible!” - posted by Kurt, Torrance, Calif. (see more comments)
Joseph Mason, an associate professor of finance at Drexel University and a senior fellow at Wharton, argues in a research paper released Wednesday that proposed remedies could actually make things worse and even that troubled borrowers have gotten some benefit from their loans.
“It’s tough to find the harm,” said Mason.
http://money.cnn.com/2007/10/03/real_estate/bailout_backlash/?postversion=2007100313
Bear Stearns Will Cut 310 Jobs
As It Shuffles Mortgage Business
By KEVIN KINGSBURY
October 3, 2007 1:02 p.m.
Bear Stearns Cos. said it will cut 310 jobs by combining its two mortgage-origination businesses, becoming the second Wall Street investment bank in two days to announce such layoffs amid industrywide retrenchment.
http://online.wsj.com/article/SB119143044578847812.html?mod=googlenews_wsj
I also have some great news to tell: THE HOUSING BUBBLE HAS POPPED!
Don’t know nothin’ about no turnaround, though…
Treasury official says markets on the mend
By Krishna Guha in Washington, and Michael Mackenzie and Saskia Scholtes in New York, and agencies
Published: September 26 2007 22:17 | Last updated: September 26 2007 22:17
Credit markets are on the mend, Robert Steel, the Treasury under-secretary for domestic finance, said on Wednesday, in the most upbeat remarks by a senior Treasury official since the turmoil began two months ago.
“The good news is that things are starting to get better,” Mr Steel told CNBC, pointing to signs of improvement in the markets.
“This week we are seeing the first of the leveraged loans being sold,” he said. “I think really that we are seeing this start to turn around now.”
http://www.ft.com/cms/s/0/57de751c-6c70-11dc-a0cf-0000779fd2ac.html
Not long ago, there officially was no housing bubble. Next subprime was contained. And now, I’ve got to admit that things are getting better… they’re getting better all the time.
Here is an article which might be worth recalling to see how far the consensus has evolved in just two years…
Bernanke: There’s No Housing Bubble to Go Bust
Fed Nominee Has Said ‘Cooling’ Won’t Hurt
By Nell Henderson
Washington Post Staff Writer
Thursday, October 27, 2005; Page D01
Ben S. Bernanke does not think the national housing boom is a bubble that is about to burst, he indicated to Congress last week, just a few days before President Bush nominated him to become the next chairman of the Federal Reserve.
http://www.washingtonpost.com/wp-dyn/content/article/2005/10/26/AR2005102602255.html
This week’s top sectors are homebuilders and financials. Call it “bubble nostalgia week”. Take your hits (or trade, if you dare) and get back to reality next week.
I call it “mortgage bailout anticipation week.”
Just got an e-mail for a CD solicitation from my brokerage. I never get these. Nothing sexy about CDs.
Que? Credit crunch makes Spanish splash!
The Valencia property developer Llanera has become the first high-profile victim of the credit crunch in Spain, declaring insolvency yesterday after failing to meet payments on €748m of debt.
…
Llanera said it faced “extreme difficulties” as a result of reliance on short-term borrowing. Credit costs have shot up since the collapse of the market for commercial paper and CDOs….
Telegraph: http://tinyurl.com/2oc62j
Moody’s said property prices had risen 280pc since 1997. While most banks are well able to weather a downturn, the regional cajas, or savings banks, are vulnerable. Many of the cajas have leveraged their risk by launching their own property ventures, much to the horror of the Bank of Spain.
…
Eight rate rises by the European Central Bank since December 2005 have taken their toll, but the final blow was the sudden widening of Euribor spreads by an extra 70 basis points over ECB rates since the summer squeeze.
Heads rolling at Merrill.
Oct. 3 (Bloomberg) — Merrill Lynch & Co., the world’s biggest brokerage firm, fired the global chief of its fixed- income division and one of his top two U.S. deputies after losses in credit markets.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aYIofso25oso&refer=home
Merrill Lynch: Layoffish on America!
Merrill Lynch: We’re Bullsh*t on America
Oh my! The Democrats want a “Mortgage Czar!” From today’s Wall Street Journal:
I wonder if he’ll be as effective as our “Drug Czar?”
As a former Dem, it’s time to declare that the dems are now a menace to the economic well-being of the country.
Have they lost their freaking minds??
KAI RYSSDAL: We’ve got one for drugs, we’ve got one for the war… And now the majority party in Congress wants one for the mortgage industry. Democrats lined up behind the microphones on Capitol Hill today and called on the president to appoint a mortgage czar.
It’s not so much about the credit crunch, they said, as it’s about the homeowners likely to face foreclosure in the coming months — and having somebody at the federal level to coordinate the government’s response. House Financial Services Committee chairman Barney Frank agreed something should have been done long ago.
REP. BARNEY FRANK: First, it is a legitimate question people ask, “Why did Congress not act?” And I want to give the straighforward, honest, non-partisan answer: Because the Republicans were in control, and they didn’t want to do that.
There’s plenty of blame to go around, and who should have done what, when, as the subprime mess bubbled to the economic surface. But a special dose of scorn has been reserved for mortgage companies.
http://marketplace.publicradio.org/display/web/2007/10/03/countrywide/
“And I want to give the straighforward, honest, non-partisan answer: Because the Republicans were in control, and they didn’t want to do that.”
I would like to offer a straightforward, honest, non-partisan statement of my own:
The bailout proposals D-ratic Congressmen have cooked up would do nothing to save people facing foreclosure, but would do much to keep housing unaffordable, pricing out the labor force in coastal cities and pretty much guaranteeing a long-term economic malaise ahead. They would further serve to bail out lenders and home builders, which could pay handsomely in terms of future campaign kick backs, er, I mean, contributions. Finally, they would stick the U.S. taxpayer with the cleanup costs for the mess left behind by bad actors, and by rewarding financial stupidity, encourage more of the same going forward.
How do you undo the PR damage from having made a gazillion toxic mortgages? Hmmmm…(a light bulb goes on!).
If a PR firm’s resume is any indication of a company’s woes, it looks like Countrywide fears it has trouble — it’s hiring Burson-Marsteller, a veteran of Johnson & Johnson’s poisoned Tylenol debacle. The firm also handled the U.S. Postal Service’s anthrax crisis and recent corporate embarrassments over Chinese toys.
Boston PR executive Larry Carpman says the standard playbook for companies in crisis has three elements:
LARRY CARPMAN: They need to explain what happened. Two, they need to try to make people whole. And the third thing is to create a plan, to show customers and regulators that this won’t happen again.
But today’s Journal says Countrywide’s taking a very different tack: digging in its heels. The company’s reportedly going to claim that it’s scrupulously ethical, and simply on a mission to help more Americans own their homes. Alan Caruba says in that case, they’d better be able to show that the allegations of sleazy tactics are hogwash.
CARUBA: There’s an old expression that just because you put lipstick on a pig, it doesn’t change the pig. And there is really no amount of public relations that can reverse the facts.
http://marketplace.publicradio.org/display/web/2007/10/03/countrywide/
Open House Blitz-Price Reductions-1 Day Only
NW chicago burbs.. wherever you see the red balloons
http://chicago.craigslist.org/nwc/rfs/439245097.html
October 3, 2007
Paul Campaign Raises Over $5,000,000 In Third Quarter
FOR IMMEDIATE RELEASE
ARLINGTON, VIRGINIA - The Ron Paul 2008 presidential campaign raised $5,080,000 during the third quarter of 2007. That is an impressive 114 percent increase from the second quarter.
Cash on hand for the Paul campaign is $5,300,000.
“Dr. Paul’s message is freedom, peace and prosperity,” said Paul campaign chairman Kent Snyder. “As these fundraising numbers show, more Americans each day are embracing Dr. Paul’s message.”
Ron Paul’s 114 percent increase is in stark contrast to the decrease suffered by Mitt Romney, Rudy Giuliani, and John McCain. Romney’s fundraising was down 29 percent. Giuliani was down 40 percent. McCain was down 55 percent.
They trade “housing futures” on the Chicago Mercantile Exchange:
http://online.wsj.com/article/SB119146645724948646.html?mod=hps_us_whats_news
There’s a chart that shows Miami dropping 27% over the next four years. (I wonder if that include the correction for inflation over the next four years)