Bits Bucket And Craigslist Finds For October 20, 2007
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
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I am going to a “open house” today here in suburban Nashville for a “resort neighborhood” with lots priced between “$70K and $270K. Why am I going? They are offering all kinds of free things (food, entertainment for the kids, etc.) The prices are ridiculous as most lots in nice neighborhoods can be had for around $40K.
My question: Any ideas on what to ask the sales personnel while my family is being entertained?
I want to ask questions that do not so much poke fun as probe the situation. For example, I know that HOA fees will have to be high, so one question I was going to ask was how they are going to divide the costs of running the “resort” if they do not sell all of the lots.
Any other ideas?
Ask what restrictions on freedoms the HOA will have on owners and what restrictions regarding to who an owner can sell out to.
Ask them if they have any restrictions on modular homes. It will note how desperate they are. If they say - “we’ll try to work things out” - then you know they are desperate.
LOL - I can only imagine the look on their face if I posed that question.
Ask if their contract requires you have to waive your right to sue (and instead must agree to arbitration) should there be something wrong with the house.
What happens to owners HOA fees if the houses ARE all sold and then half are repossessed and the banks don’t pay HOA fees for a year or two.?
October 19th comments on inflation from Peter Schiff:
http://tinyurl.com/34xb7o
“For example, on Wednesday the government told us that consumer prices as measured by the CPI rose by only 2.8% over the past year. My estimate is that the actual rise was at least three times as great. The report showed that energy prices only rose by only 5.3%. Given that crude oil prices are up over 35% and heating oil prices are up 20% during that time period, how is it possible that energy prices are up only 5%? Are other energy costs falling to compensate — firewood perhaps? The same CPI report claimed that medical costs rose by 4.6%. As a small business owner, I can’t remember the last time my company’s health insurance premiums rose less than 5% per year, and they typically rise at an annual rate of more than twice that. Perhaps the most incredulous of all the data in this week’s CPI report is that food prices only rose by 4.5% during the past year. I don’t know where the guys at the Bureau of Labor Statistics buy their groceries, but I’m spending at least 15% - 20% more for food this year than last. Wheat prices alone have practically doubled in the past year! The last time I checked, people tend to eat a lot of wheat. Does anyone really believe food prices are only up 4.5%?”
“Still, the intoxicating effects that inflation has on nominal asset prices and GDP figures will eventually fade. When this happens Wall Street will sober up to the reality that the U.S. economy has actually been mired in recession for years, and that U.S. stocks have been in a stealth bear market all along. Priced in gold, euros, or Canadian dollars, (which are more accurate ways to adjust for inflation than phony government numbers) both the U.S. stock market and U.S. GDP have declined by approximately 58 %, 17 % and 21% respectively since January 2000. No wonder the government and Wall Street hang their hats on official inflation measures.”
“Like a student allowed to grade his own report card, he can ditch his classes, not do his homework, flunk his exams, yet still bring home straight A’s. As long as Wall Street and the media continue to represent government inflation numbers as if they had any validity whatsoever, inflation is only going to get worse.”
Thanks for that, Greg. Ever since the 2000 election, it seems that lying and misleading has become the status quo, in business and in government. I’m not saying there wasn’t any misinformation before that, it’s just that it seems to have become so over the top and so blatant, and so accepted as an operating basis. And it permeates all sectors of society.
As a pup, lying was one of the worst things you could do, in my family. I got my backside lit up good if I even told so much as a “fib”. I think my parents wanted to impress on me that a kid who lies, if not disciplined, could one day grow up to be someone in a position of responsibility whose lies could lead to much destruction. I wish another Connecticut family had felt the same.
Retired people live on fixed income and therefore are the greatest victim of the Fed’s failure to control inflation.
And a 2% increase on their Social Security doesn’t help them at all.
IMO the majority of working Americans have been living on a “fixed income” with meager wage raises of
Sorry, post was cut off.
…less than 4% and real inflation significantly higher.
The insulting 2.8% inflation increase figures for last year don’t just affect SS recipients. Most employers give “cost of living plus” wage increases if they give any.
So this data is also used to depress wages
More Corporate welfare.
Yes, definitely. My mother and her husband complain about being on a “fixed income” (GM pension in his case, plus retirement savings), and I say, “I’m on a fixed income, too, only I have to go to work for it everyday.”
Now, I will say that I’m a relatively well-paid engineer. But I’m struggling to get back to my year-2000 salary, when you take into account inflation/cost of living - there are no guaranteed cost-of-living increases in my industry!
Another engineer here on a “fixed income” that is ever decreasing thanks to run-away inflation. No guaranteed raises in my field, unless you’re one of our wonderful executives, who typically get raises of 20+% each year. But I am sure they “deserve” it… right!
And the retired people on fixed income consistently vote to maintain the military-industrial-congressional complex that is like a vampire sucking us dry. They seem to have little regard for the well-being of future generations. They also plopped their kids in front of the TV for hours at a time, ensuring that their children were thoroughly brainwashed and incapable of answering simple questions like: What is money? What is a dollar?
What age group are you speaking of? I’m 56 and it was normal when we were kids that TV was restricted - most of us were only allowed to watch limited TV and none of us had TVs in our rooms. There’s only been TV for about 2 or 3 generations.
“And the retired people on fixed income consistently vote to maintain the military-industrial-congressional complex that is like a vampire sucking us dry.”
God forbid some one speak the truth like this quote. I’ve never seen such a large voter bloc consistently and repeatedly vote AGAINST their own interest like this group. My father, a WW2 vet, mother and ALL their friends and acquantances in the 76-90 year old age group will whine how tough things are economically. At the same time, the Fed govt. has them absolutely shuddering in stricken fear that a Mohammed MagooblyBoo is hiding behind every tree ready to strike. And what do these elderly do when they vote? The vote on the fear instead of reality. Many including myself are befuddled by this phenomena.
“At the same time, the Fed govt. has them absolutely shuddering in stricken fear that a Mohammed MagooblyBoo is hiding behind every tree ready to strike.”
The shills at MSNBC have this loop of some Islamic fighters running a calisthenics course. They play it about once a week to remind everyone to live in fear. The GOP is finished, IMHO, having proudly marched so far to the right that their moral compass can no longer provide a reliable heading.
Having grown up in florida (Naples… ouch) never underestimate how much fear of dying exhibits itself as being afraid of nearly everything.
Those gates in the gated communities aren’t really trying to keep out criminals psychologically-speaking!
The Fed manages to crap on both ends of life’s spectrum at once - the elderly and those just being born. Unless a person is a hyper-consuming 18 to 34 y.o. there’s not much need for them I guess. iPods for everyone! A new model every six months!
You parents did a great thing for you palmetto .Also ,if you don’t lie ,you won’t lie to yourself either . We live in a society now that the messenger is killed or not considered “positive “.
Positive thinking is all well and good as long as you keep your feet on the ground and don’t ignore the true facts .In fact ,I can’t imagine that one can be productive unless they can see the truth and speak the truth . It’s interesting to watch how the powers attempt to solve the housing crash in every way but a truthful approach ,like trying to make victims out of greedy speculators . Now the dollar is being trashed and the stock market goes in bubble cycles all because nobody wants to face the truth of the real estate mania and why it came about to begin with .
AHHH! Space *after* period/comma, please! So hard to read your post.
“I’m not saying there wasn’t any misinformation before that, it’s just that it seems to have become so over the top and so blatant, and so accepted as an operating basis.”
The problem today is that one’s patriotism and faith are challenged when serious questions are asked.
RE: As a pup, lying was one of the worst things you could do, in my family. I got my backside lit up good if I even told so much as a “fib”.
Sorry, Big-P., not much chance for you in the appraisal biz where lying and misleading is an art form.
having no conscience about lying and other misdeeds is the definition of a sociopath
I’d become accustomed to spin, not that I liked it. I just accounted for it. Since 2000, the disinformation seems more deliberate. Another key factor, I think, is the amount of media consolidation that’s occurred in the past 20 years:
http://tinyurl.com/2zzxd
It’s stunning the amount of the media that’s now controlled by a handful of corporations, corporations that seem all too happy to support the government in power in order to maintain their privileged positions.
This feeds in nicely to an interesting essay by Charles Hugh Smith earlier this week chronicling how this very U.S. media failed homebuyers:
http://tinyurl.com/265rkl
U.S. economy has actually been mired in recession for years, and that U.S. stocks have been in a stealth bear market all along.
I love it! So my 21% gain in the markets from a year ago is not really there?
So my 21% gain in the markets from a year ago is not really there?”
That’s right. Adjust your gain for inflation and currency devaluation and what do you have? 5 or 10%?
Be sure to note this fact to the IRS the next time you file your taxes.
Doh!!
Check vs Canadian Dollar: 1.13/0.9663=1.1694. That’s about 17%. Leaves you with 4% before inflation.
When you can’t get honest statistics from your government, when you have to go to foreign publications and pundits to learn the truth, you have a big problem. We have a dishonest government that is working against the interests of ‘we the people’.
And a mainstream media that responds not as a “watchdog of the republic” but as public relations arms of the same corporatist agenda. Again, you need foreign reporters and news outlets as well as the blogosphere to have any idea of what is really being done.
Why would you expect the MSM to act any different today? The majority of them are owned by corporations.
RE: Are other energy costs falling to compensate — firewood perhaps?
No way, Jose…A cord of seasoned firewood in the north country (north of Nashua NH) is now over $200.00.
And that’s if you can find a supplier. With fewer harvesting companies now operating; fewer commercial woodlots; and new paper technologies utilizing hardwood, pickings for the average homeowner is getting slimmer by the season.
I’d easily say cost is up 75/100% over the last 5 years.
I remember when we lived in Portsmouth, NH in the early 70s and wood spiked to those same prices.
CPI measure is a government propaganda but the reality is very grim if they reported real CPI, SSI payments would have to go up by that much and where would they find the money. I feel bad for all the retirees but who can afford to give them a 10% raise.
10% CPI would mean US Productivity (and I do mean Productivity, not Productivity growth) is declining quite sharply, about 5% a year.
Just sayin’.
yes, please check shadowstats.com for the real numbers.
I would love to see similar honest statistics for the European Union, I’m sure our data are just a distored as those from the US (maybe even worse).
It’s all about making people think things are fine so they can continue to lower interest rates.
–
Peter Schiff is an A$$ when it comes to inflation. Inflation, as measured by the CPI, is very close to what it is reported. In short-term it could be off by +-2%, but long-term it reflects the consumer level inflation quite well.
Propagandists know that if you repeat a lie hundred times, people, who are biased in your direction to begin with, will start to believe it.
Jas
look at shadowstats.com where the CPI and other statistics are calculated using the pre-1987 methods, so you can compare them with pre-Greenspun numbers. Then judge for yourself … I am convinced that inflation, both in US and Europe, has been in the 8-10% range or even higher for at least the last 10 years. And please forget the gadgets and a few other totally unnecessary items that are declining in price.
–
“… I am convinced that inflation, both in US and Europe, has been in the 8-10% range or even higher for at least the last 10 years.”
If this were true then the US economy would have been in depression “for at least the last 10 years,” no? This is because the nominal GDP has grown at less than 8-10%.
“And please forget the gadgets and a few other totally unnecessary items that are declining in price.”
If people consume more of them they count! Not only that if they have money to buy the “gadgets and a few other totally unnecessary items” then the necessities must not be as expensive as you think.
I have an iron clad proof that the CPI inflation is NOT higher than reported since 1980 — the resturant prices, where 80% of the population goes to it, have risen less than the CPI. Restaurants incur most of the costs reflected in the CPI, no?
Jas
In the past 5 years the average cost of a coke at a restraunt has gone from 0.99 to $1.50 (some places even $1.99). At 3% inflation those prices should only be $1.15. Most restraunts don’t even put the prices of drinks on their menu because people order them by “default”. The main labor force for restruants is tip based so wage inflation isn’t a problem for restraunts.
Inflation is directly related to the money supply and the demand for money. Money supply (M3) has been growing at 10-13%.
to Jas: for the citizen with median or lower wage the costs that count are housing, taxes (state and local), healthcare (insurance), energy, education / child care, other insurance, clothing and transportation ( I probably forget some important items, but to get the idea). Most of these have gone up here for 10-15 years at 5-10% yoy, usually in the high end of that range; the only exceptions in my country are clothing, transportation for those with their own car and food (because of an exceptional supermarket war in the Netherlands until about 2006). There cannot be any doubt that the average citizen is spending far more on these required items compared to 15 years ago, while wages and pensions for ordinary citizens have risen by only 1-2% yoy. The difference has been bridged with home equity and all kinds of special subsidies and free loans.
Of course, if you are a software programmer taking home over 5x median income, and you have a partner with a high paying job and maybe no children that need paid education, you probably enjoyed all the benefits from the Greenspam era like skyrocketing home values, lower gadget prices, lower internet cost, lower cost for far away vacations, lower cost for expensive cars and boats etc. I can understand that these people are not seeing the same picture …
–
I am sorry, Dan, inflation is not based on what careless people pay for but what a prudent buyer would pay. I have been able to buy 12-can pack of Classic Coke for $2-3 on sale at least once a month in on of the 3 stores nearest to me. This regularly scheduled sale price has not changed for the past 10-15 years.
Tips are a % of the menu prices and, hence, they don’t go up more than the menu prices. BTW, the prices of beer and common wines, by the glass, in restaurants have NOT gone up more than the CPI.
I eat and drink quite well and I can tell you that my cost of eating and drinking has gone up lot less than the CPI. The best pizza that I like, Uncle Ernie’s, has gone up in price less than 30% in 19 years! At Costco I can buy an honest large pizza with 6 toppings for $10.xx. I don’t ever remember paying $5-6 for such a pizza since I have been in the US (32 years).
Inflationists can’t see and can’t think!
My cost of living, for the past 27 years, has gone up lot less than the CPI. Most of the inflation is caused by stupid buyers, or poor shoppers.
Living a good life with less than 1% inflation rate (excluding the sickness care insurance premium that is based on the age) for the past many years,
Jas
Keep drinking those classic cokes, Jas, and you’ll soon find out how much medical care has gone up. The price of oil is now $90/barrel, and headed up. Oil isn’t just gas, it’s plastic, energy to make the basic things we need, diesel for delivery, it’s in everything, which means everything is due to additional ramping up. Take off your blinders, you’ll see we’re already in a recession.
–
“Keep drinking those classic cokes, Jas, and you’ll soon find out how much medical care has gone up.”
One can’t be an inflationist and not have a mean streak. I keep soft drinks and beer mostly for my guests. I only have them occasionally, but I like to keep most of the beverages that my guests, including kids, like. My grandson asks for coke.
Jas
Costco still charges $1.50 for a hot dog and a Coke. That means inflation has been at 0% for the past 20 years or so. Of course, I paid about $2.75 a gallon for gas vs about $1.05 average in 2002.
Jas - I apologize. I didn’t mean to hurt your feelings. It’s just that ever since I saw my mechanic cleaning engines with coke, well, I just don’t think they are fit for human consumption. You’d be doing your grandson a favor by saying “no” when he asks for them, and giving him club soda with juice instead.
What are you talking about? What CPI inputs are as low as reported? You should be able to back up your statement when reality looks very different from government statistics.
It’s the same story all over the Western world, the Ministry of Truth is in full control (far more than in 1984).
Example from the Netherlands: in a recent newspaper article about the housing market a picture shows home price statistics over the last 40 years, stating that ‘real home prices’ in Netherlands have increased only 50% from 1990 to 2007 (or for that matter, from 1965 to 2007, because the curve is nearly flat for the first 30 years). Official CPI in Netherlands has been 1-2% for many years (it was higher in the eighties). I’m surprised how they even dare to print such severely distorted lies, as homeprice gains over the last 15 years are close to 1000% in many areas (taking inflation into account the real gains are at least 500%, not 50%). The message of this statistic seems to be that there is NO housing bubble in the Netherlands.
Everyone can easily check the official average home price statistics from the ‘Kadaster’, which report a nominal appreciation (which seriously underestimates the real gains for individual homes) of 400% between 1993 (where the data starts) and 2007, so starting from 1990 probably around 500%. Something does not compute, but probably these government manipulators and/or newspaper editors think readers are stupid enough not to notice…
another trick they use here is that our Ministry of Truth stopped reporting real (median) incomes last year and has now switched to some kind of ‘disposable income’ which is reported as being 12.000 to 20.000 euro for more than 95% of the population. Great isn’t it, everyone is getting nearly the same! Of course it is a total lie as well, the income gap in Netherlands is at an all time high (not sure about the Middle ages though …).
The conspiracy theory angle on this is not reasonable. Basic food and energy cost data is simply too noisy to use as guidance. Following this implied suggestion would result in central banks raising and lowering rates by large amounts every few days. Finding a useful index for measuring inflation is well known to be a difficult problem. If anyone here can find a better index or calculation to use as a basis for deciding on currency moves and so on then it will likely be adopted and could also result in a Nobel Prize. These posts about a conspiracy against the truth have no basis in reality whatsoever. The process by which inflation indexes are calculated and which ones get attention is essentially transparent. The obvious flaws have to do with the complex nature of the problem of observing and reacting to inflation. Reading these posts here I get the impression that the posters here have long experience in managing national currencies and central banks never publish records of their meetings.
Straw man.
No one is suggesting interest rates should be changed ‘every few days’. However, to cut rates when inflation is rising, to stop publishing money supply data while increasing money supply, to ‘hedonically’ adjust inflation measures by systematically removing from the calculation everything which rises in cost is baldly fraudulent. To announce that inflation pressures are decreasing when the cost of every basic necessity (food, housing, medical care, education)is at historic highs opens the government to scorn and ridicule. Either they are liars or fools. Which is it?
That doesn’t make any sense. Either you have an index that indicates an action should be taken, or you don’t. What you call “systematically removing from the calculation everything which rises in cost” is what others call calculating core inflation. Core inflation has been quite moderate, and in his last address Ben Bernanke described how anxious they are about the whole matter and how they are following all of the top indexes. When you talk of every basic necessesity being more expensive, you are denying a huge amount of real elasticity. If commuting is costing money, then get a cheap apartment near work since available units and transportation corridor density are more common than ever. If food is costing money then eat out less and eat least expensive stuff like meat. Medical care is a great example of this. The Office of Management and Budget has quite a bit of detail now on how the amounts being paid do not correspond with quality at all any more, and simple steps toward prevention are often ignored.
The liars and fools here are the ones claiming that inflation is a simple calculation. Ifyou actually do what is being suggested and add up what people are paying based on their whims for food, housing, meds, and so on then you end up with a gittery index that is not really usable by central bankers. If you actually make an effort to hone a measure of core inflation then you find that a lot of price drops are real which is in part a measure of just how cheap all the junk we import from China is as long as we don’t take into account any other costs, environmental, social, or otherwise.
If you are completely and fundamentally hostile to economic analysis and what it takes to manage a currency as a central banker then of course you will see everything as a twisted plot to drive us all into ruin. That is a straw man and a half.
“what people are paying based on their whims for food, housing, meds”
you mean the substitution model, where the CPI drops if people can no longer pay for meat and buy dog food instead?
I’m very surprised how these economists are always busy revising prices down because of more megapixels (over the last years more megapixels usually ment less quality, but they don’t know), more functions and buttons on a gadget (less user friendly, but who cares) etc. and fail to include a compensation for the 50% extra water content in chicken meat or ham, the service level in most supermarkets that drops every year (at least in Europe) and the decline in general quality of many products that are replace by cheaper made-in-China lookalikes, just to give a few examples.
“Medical care is a great example of this. The Office of Management and Budget has quite a bit of detail now on how the amounts being paid do not correspond with quality at all any more, and simple steps toward prevention are often ignored.“
When I buy life insurance, it is priced according to a number of factors like height to weight ratio, tobbacco use, age, etc., but healthcare insurance doesn’t subscribe to this sort of ranking, so costs are out of control. It doesn’t appear that any politicians are interested in a few “simple steps toward prevention” either.
Mole Man: I have the impression that the Dutch statistics office (and their evil friends abroad) are constantly busy with “finding a better index or calculation”, that is: finding the calculation that yields the lowest CPI value possible, probably because the kleptocrats at the top pressure them to lower the values. There is nothing transparent about the calculations, they are usually secret and change on a whim; even the data they use for the calculations is secret (nobody else gets to see it). Last year there was a TV programme where the president of the Dutch statistics office was interviewed about the huge gap between CPI and real life prices (with many actual price examples) and the whole story was painful: not one honest answer from this buy, he either refused to answer, produced blatant lies or said he didn’t know or couldn’t explain. A few days later the sheeple have forgotten about these crooked guys and life continues in the fantasy world of low CPI (ours officially is 1.3% yoy). For the European Eurostat statistics office we already know from fast experience and lawsuits that corruption and lies are daily practice, so no need to comment on that.
Mole Man,
That was great! You gave me the best laugh of the week! But I fall into the deflationist camp. The car I bought 15 years ago (still have) could be replaced for 20% more than orginal cost.
go away, troll.
It looks like the troops are getting restless with CFC’ “the tan man”
LA Times 10/20/07 news report
http://tinyurl.com/2y2255
I don’t register with these newspapers, but does it have something to do with the fact that CFC is having a little difficulty with payroll? If so, I can understand it. Imagine being a CFC employee and you either can’t get paid or your payment is delayed, meanwhile Mr. Tan has been selling stock based on false information and he’s all set. I’d be really, really pissed. No wonder some of these guys need private security.
I apoligize for saying the troops, I meant the stockholders want to oust the “tan man”.
http://tinyurl.com/2y2255
Interesting. I suggested action to those stockholders on this radio show in 2005.
Wow Ben ,had people listened to your sage words, back in August of 2005 ,alot of bad loans would not of gone on the books .
And a lot of folks all across the country would not be facing foreclosure and bankruptcy.
As ever, kudos to Mr. Jones.
It is quite amazing that so many bright people who accurately foretold the current mess were roundly ignored.
People have started viewing their houses as gigantic ATMs. Take out a home equity loan, which the banks are eager to offer you, …and all of a sudden you have an extra $70k to play with. You can put on an addition, you can go through the roof, you can take several trips to Hawaii, and still have large amounts of money left over.
Brad DeLong
Afterlife Mortgage?
http://www.itulip.com/forums/showthread.php?p=18011#post18011
I choose BofA
Wamu, about 15 minutes before they implode.
Is the debt forgiven if you outlive the lender?
The receivership most likely will sell your debt.
People in debt is the hottest thing on the market.
“People in debt is the hottest thing on the market.”
It seems that the only way to get even is to die with a negative net worth. I wonder if this has been factored in? I expect that an NPV calculation still shows the banks coming out way ahead, even if you drop dead owing a on of money.
Quote should be changed “The only things that are certain are DEBT and taxes”
‘Finance ministers and central bankers from the Group of Seven industrial nations urged China to allow an ‘accelerated appreciation’ of its currency. ‘In view of its rising current-account surplus and domestic inflation, we stress its need to allow an accelerated appreciation of its effective exchange rate,’ the G-7 officials say.’
‘The G-7’s toughest call for change in four years of lobbying China comes as Canada and Europe increasingly join the U.S. in complaining that an undervalued yuan is hurting their trade balances. ‘The attention on China is growing wider,’ Gilles Moec, who used to work at the Bank of France and is now senior economist at Bank of America Corp. in London, said before the meetings.’
‘The G-7’s toughest call for change in four years of lobbying China comes as Canada and Europe increasingly join the U.S. in complaining that an undervalued yuan is hurting their trade balances.”
I’m no fan of China, but they should be free to do what they want to do with their currency. And so should we. This global thing isn’t working out. The US should declare its own independence from the “global” system of fiat money, with a currency backed by something of real value, metals or whatever.
“The G-7 stuck to their view that currencies should reflect economic “fundamentals” and that disorderly or excessive movements are “undesirable,” according to the draft.”
LMAO! Someone forgot to send the memo to Bernanke.
I agree, but these guys have a playbook, and we should pay attention to what they put out. China doesn’t want to do this and it is the greatest tension amongst the globalist, IMO.
I believe Japan did this back around 1989, which may have something to do with why China does not want to do this.
In addition to some of the commodity rich countries, some countries pegged to the USD are experiencing raging inflation. If they produce commodities and are pegged, it’s even worse. Every time BB cuts the FFR, their prices spiral. It’s funny how that works.
Historically, when you export a lot of stuff, the trade imbalance makes your currency stronger and your goods more expensive to other countries. The money you bring in you spend on infrastructure, raising your standard of living. China has held their currency artificially low, buying US dollars in the process, helping this housing inflation along, BTW. The cold war never ended, they just changed their methods.
“No state shall make anything but gold and silver coin a tender in payment of debt.” [US Constitution, Art. 1, Sec. 10]
Last I checked, it’s still there.
Is any state in violation?
Every state is in violation. Every state requires taxes and judgments be paid in fiat “dollars”. Can you define “dollar”?
Study the history of Art. 1, Section 10.
“Congress shall have the power to ‘coin’ ‘money’ and regulate the value thereof.” (Not ‘print’ ‘money’.)
Speaking of the Constitution, paying income tax is voluntary. Don’t believe me? Well, here’s your opportunity to make $300k:
Freedom Law School is offering $100,000 to the first person who can demonstrate any of the three propositions listed below. The winner can collect up to $300,000 if he or she can prove all of the propositions below.
1. Show what statute written by the Congress of the United States requires Americans to file an income tax “CONFESSION” (return) and pay an income tax.
2. How can Americans file an income tax “CONFESSION” (return) without giving up their 5th amendment right not to give any information to the government that may be used to prosecute them.
3. Prove that the 16th amendment to the United States Constitution, which, according to the IRS and modern American courts permitted the income tax to exist was, lawfully added to the United States Constitution.
go to livefreenow.org for more information.
ps Of course, we pity the fool (re: Ed and Elaine Brown) who fail to pay income tax. It will take more than just a couple of people to not pay, but if we ALL got together… well, then, things might change.
I’ve visited a country where pretty much no one pays taxes. I didn’t like the result much.
Here’s an angle for you. Strange it wasn’t picked up by the MSM?
http://www.nowpublic.com/crime/media-blackout-161-federal-tax-charges-0-convictions
I just read article 1, section 10 and I read that “No State may…” It says nothing about what the US Congress can or can not do…
first of all, they are lying about hurting trade balance, the EEC trade balance has improved over the last months despite a surging euro (not really of course, the euro is sinking too, just not as fast as the dollar). The problem is that some EU exporters with too much political connections (like EADS) are complaining. And of course, yuan revaluation won’t change a thing. It’s all China bashing, the kleptocrats that rule the old world are not happy that power is shifting to Asia and want to find a scapegoat; would be nice to blame China for the US subprime woes and the coming stockmarket crash too.
I think they should install heavy trade sanctions on China (and the rest of SE Asia) this monday so we can start the 20th anniversary celebration of Black Monday in style
It’s vitally important to US interests that we maintain a manufacturing capability. If we lose all of our manufacturing know how, we will be totally dependent on China.
Oops, too late……
Because the dollar isn’t sinking fast enough? We want more inflation now?
a lot of politicians want more inflation to try and get them out of the hole they have dug for themselves, you bet! Many of the new leaders in Europe (like 95% of the EU parliament, french pm Sarkozy and proposed EU emperor B.Liar) are inflationists with zero economic insight.
Ben I have a suggestion for next April Fool’s day. Go back to 2005 and find a bunch of choice links from the MSM, and post them as you would links from the current day. Put the information that the articles are from three years ago in the first comment.
And on behalf of those who made out in the bubble, say “April Fool!”
Great idea if you had sent me an email, but now you’ve let it out.
it’s OK, Ben, go ahead, we’ll probably have forgotten with all the terrible housing news that will have come out by then
We’ve got 6 months to forget. Who knows where we will be in 6 months.
Ben: That would be a good topic - what will we be chatting about 6 mos. from now? What do we think will really be happening (not necessarily what we think SHOULD happen) with housing, inflation and elections.
Could not believe the traffic yesterday friday at 4pm in Phoenix on I-10. Does this have anything to do with the sprawl (rhethorical question). Or, is this place suffocating itself (real question).
I drove to Orlando (from Tampa Bay Area) last night to meet a client for dinner. I-4 is the Wild West. It was bumper-to-bumper going 80 mph+. I was almost run off the road by a Lamborghini easily doing 100+. We also witnessed a white van that had skidded off the road. Behind it were about 15 Mexicans huddled along the hedge row. They appeared to be confused and deciding whether or not to wait for help or flee into the Florida wild. A tanker truck drifted into my lane and abruptly over-reacted causing it to swing onto the shoulder. This was on the way over and only a few miles outside of Tampa. One would think that by midnight the insanity would have been less. Wrong. It was even crazier on the way home… like some sort of hillbilly uber wealthy Mad Max NASCAR race.
Florida is truly leading us into uncharted territory.
Florida is like looking into a cloudy crystal ball to see what happens when globalization and suburbanization literally collide in the form if a jacked-up F-650 and Bentley with spinners.
Mad Max is a prophetic film. It only had the colors and fashion wrong.
Yuck.
RE: Florida is truly leading us into uncharted territory.
From all you you describe you are simply witnessing an independant former American state descend into a 3rd world, dungheap of lawlessness fueled by a rampant influx of illegals; narco/corruption dollars from south of the border; and domestic mortgage scam monies.
Move along now…nothing more to see here.
Can southern California be far behind?
I think that its there as well.
go NAFTA! Rah!
Driving home last night in Chicago at 7 pm was also bumper to bumper, but i was only going 5mph. I had a RAV4 zoom by me at 8 mph at one point.
In all seriousness, the craziest drive I ever made was on vacation driving from LA to Vegas on Friday afternoon. I-15 in the desert, two lanes, nothing around you, bumper to bumper traffic going about 80, and every 5 minutes slamming on your brakes to avoid an accident. Turned to the wife and said I couldn’t believe there weren’t more accidents.
We found out later there was a multicar pileup that was about 1/2 an hour behind us that blocked all lanes.
I have experience the exact situation on I-15, Vegas bound, last year. Everyone hauling 80 mph+, then slamming on the brakes. We had the same thought regarding the lack of pileups.
Yeah, the I-15 run from L.A to Las Vegas is notorious - try not to do it on a friday or saturday! Or coming back to L.A on a sunday, either.
Seems that the ‘cream’ of L.A drivers go there, taking their horrible driving habits with them. They like to ’share the love’ with the neighbouring states…
Seems that Orlando and Chicago are not the only places with congestion - anecdotally, I’ve been seeing a lot more ‘gridlocks’ in Westside (always horrible) and San Fernando Valley these days.
I was doing some errands yesterday in Sherman Oaks, and was bummed to find out that the friday commute seems to start at 3pm now.
Yet, apparently, people are leaving L.A in droves - no sign of that on the roads - more cars, more congestion, even worse ‘L.A Driving’ too. Get off your cell phones and stop driving your single occupant Navigator like a defense weapon, please.
I live in Mobile and your experiences driving on the expressway sounds about normal for here. I drive in the far right lane at 5-10 over the speed limit when possible (holding back traffic sometimes) and let the nut-jobs go for it in the other lanes. They invariably do the results being miles of grid-lock trying to get past the wreckage.
The first film, Mad Max, had nothing to do with oil. It was about the degradation of society.
Imagine how bad it would be if all those empty homes were filled with people!
Friday afternoon is always bad on I-10. You have the usual rush hour traffic, plus people heading out of town for the weekend.
Step one) move your industry to a communist country to save money
Step two) make insane loans on overpriced houses to people who cannot
afford to repay to destroy your financial sector
Step three) don’t have any energy policy
Step four) put all government resources into an unnecessary war
Step five)??????????????????
Step six) profit
http://www.youtube.com/watch?v=OCZaKSko5I8
@chilidoggg,
If the $60K YOY OC median drop was a record, it didn’t last long. The Dataquick Bay Area numbers posted a couple of days later showed Napa down from $610K to $544,250; a drop of over $65K.
And while Marin’s median might still be up YOY, it’s down $150K since June.
So housing hanky panky doesn’t luv’s footie any more? I wonder who (s)he barracks for. :twisted
Maybe I should change my handle to something like CatsRule for the next 12 months.
I saw several people say nasty things about Hillary Clinton in the past week. I cannot understand why people would say these things? What has she done that is so bad? I would really like to know why people think she would be a bad president.
That’s pretty funny.
Guess it’s time to send off another donation to Hillary for President. I thought this was a real estate blog?
And it’s always funny that you think that is some kind of threat!
David Cee,
John Mack of Morgan Stanley has sent letters to his 56,000 employees telling them that he is supporting Hillary. As are all the other Wall Street Titans. She is Wall Street’s choice.
Unless you’re playing in Mack the Knife’s league, do you think your couple of bucks matter?
Ben,
We should be careful, or we will be responsible for making poor David Cee go broke making too many contributions in response to all the nasty comments we make here about Mrs. William Jefferson Clinton.
WAman, your sarcasm is so thick that it is almost impossible to tell you are trying to be sarcastic.
Any opinions here on Huckabee? He appears to be consistent with his conservative credentials (unlike our sitting president.)
Huckabee is still for big government control and war. He also has no grasp on economics and his debate responses are full of logical falacies.
If you want someone who will but the Fed in its place and end government bailouts then your want Ron Paul. If you want someone to run your life and continue wars vote for anyone else.
“I saw several people say nasty things about Hillary Clinton in the past week. I cannot understand why people would say these things? What has she done that is so bad? I would really like to know why people think she would be a bad president.”
Why? I could write a book. Oh wait, about a dozen people already have.
You are kidding right?
WAman, in my youth, I always thought I’d vote for any woman who could make it into the finals of the U.S. poltico-monied race. Seems I was wrong.
Politicians make horrible presidents.
Let’s hope we don’t have to find out how bad politicians’ wives do.
I’m still not convinced she’s a she. I think a public pantsing is in order for the truth to be revealed.
The electorate is 54% female, a clear majority, and yet this group has so far been consistently underserved by our democracy. Her being female is very likely the key to her success so far.
I don’t like her either, but I base my opinion on her policies and public speeches instead of schoolyard humor. Observing our current political leaders it seems like unconstrained masculinity might not be the best basis upon which to build a government.
Her being well-connected to the Wall Street/Corporate crowd is very likely the key to her success so far.
The Bush and Clinton families are very comfortable with each other.
I thought that was true of most (if not all) politicians ? I am sure the love of the corporate advocates on capitol hill knows no bounds….
Woment don’t like her. Trust me.
Last post lost in cyberspace.
Hillary: can she be trusted? (Google Peter Paul and his Hillary campaign contribution).
A friend of mine said, “I’ll vote for Hillary because it will be like getting two presidents in one.”
Using that logic, what about Bush 1 and 2 (and puppetmaster Cheney). That didn’t work out so well…
I don’t like Colbert jumping into the race because he’ll steal votes from Ron Paul, Huckabee, and Hillary. I mean a joke is a joke, but we’re fighting for our lives here…
Will Jeb Bush enter the race? My crystal ball says… yes, you can count on it.
Was cleaning out my files this past week and came across a paper from June 21, 2002 of the Executive Intelligence Review “Fannie and Freddie Were Lenders’: U.S. Real Estate Bubble Nears its End” by Richard Freeman.
Starts off with “The U.S. financial system is now dependent to an unprecedented degree upon one prop: the greatest housing-real estate bubble in human history.”
Now Mr. Greespan what do you have to say? Wall Street, what do you have to say?
Greenspan does not say anything unless he gets a $100,000 speaking fee or if you let him flog his book.
hows about flogging him… I’d pay a 100k spanking fee
Greenspan will learn humility the first time he can’t make it to the bathroom in time.
“Wall Street, what do you have to say?”
Wall Street: I’m not full yet. What’s for dessert?
Complex investments known as SIVs are roiling Wall Street and the world of high finance. But the investment vehicles also are threatening trouble in a seemingly unlikely place: money-market funds, the choice for many individual investors seeking safety.
In recent years, the short-term debt issued by such structured investment vehicles, or SIVs, had become a favorite for many money-market funds, thanks to their attractive yields, high credit ratings and added diversification.
As a result, many money-market mutual funds were holding 10% to 20% of their portfolios in debt issued by SIVs. Funds overseen by Bank of America Corp.’s Columbia Management Group, Credit Suisse Group’s Credit Suisse Asset Management, and Federated Investors Inc. recently held big stakes in SIVs, including some of the most troubled names.
WSJ: http://tinyurl.com/3dxnaw
The argument today: If you don’t buy the junk, it will become worthless and you lose; so, buy more junk or you lose.
Scare the market into buying. That should work.
“Scare the market into buying. That should work.”
It worked in the housing market(priced out forever), that is until it stopped working
Isn’t that a confidence scheme?
As long as we all believe (and most importantly, act as if) these items (whatever they are) have value, others will follow our lead and also pay for these items.
I think I am going to start my own scheme like this. I just need a few 100M dollars to start the buying of my valueless asset..
Reminds me of the diamond market. A total confidence game; diamonds really are not that rare, and should supply/demand be allowed to take it’s normal course, would dramatically fall in value. But we all BELIEVE they are valuable, and therefore, are willing to pay big money for them.
Ahh.. To be on top of a pyramid like that.. That’s the place to be!
“But we all BELIEVE they are valuable, and therefore, are willing to pay big money for them.”
Gems are one of the biggest scams around. Get yourself a retailer’s (or wholesaler’s) license and go to the Tucson gem show held each Feb. It’s like watching a bunch of crows trying to all grab the same glittery shiny crap. Lots of Asians there, dressed to the 9’s, trying to make money as middlemen, lots of dealers from all over, buying stock for their stores. Exhausting. Anyone with a resell license (very easy to get) can buy gems and findings (settings) wholesale and save a fortune. I bought my sister a 20 caret high-quality topaz and 14k gold setting for $70 (had to assemble, very easy). She had it appraised at $1000. Jewelry retailers are the biggest scammers around. Bought my daughter beautiful high-grade Aussie opals for almost nothing - $50 each. Had a silversmith set them, beautiful and cheap. (Disclaimer - have a gemologist license.)
My brother the jeweler has been going to Tucson for the show for as long as I can remember. He says it’s become a total circus. Used to be a small industry trade show and now it’s huge and commercial.
Is your Money Market SIV positive?
Interesting article in the SF Chron. yesterday by Greg Rislising.”Man pleads guilty in lawsuit kickback case.”
“A man prosecutors say was paid about $2.6 million to be a professional plaintiff who helped a prestigious New York law firm get lucrative class-action lawsuits pleaded guilty on Thursday to obstruction of justice and two other charges.”
“Lazar was the latest person to plead guilty in a seven-year federal investigation that accuses the firm, previously known as Milberg Weiss Bershad & Schulman, of secretly paying $11.3 million in kickbacks to get people to take part in more than 225 class-action and shareholder lawsuits.
Prosecutors believe the firm now known as Milberg Weiss made an estimated $250 million by filing lawsuits against some of the nation’s largest companies, including Lucent, Microsoft, Prudential Insurance and AT&T.”
(www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2007/10/15/financial/f095348D47.DTL&hw=greg+risling&sn=004&sc=782)
Maybe this will be the next bubble, everyone will get rich by suing each other.
We can have TV programs called ‘The lawsuit ladder” and “Flip this lawsuit”.
Oct. 19 (Bloomberg) — National Bank of Canada may lose banking customers including Jean Coutu Group Inc., the country’s second-biggest pharmacy chain, after advising them to buy commercial paper before the market collapsed in August.
…
“If we take a haircut on this, we’ll have to ask ourselves if we still want to do business with National Bank,” Jean Coutu Chief Financial Officer Andre Belzile said in an interview. “We want our money back, and we’re evaluating all our options.”
…
Canada’s sixth-biggest bank has no plans to buy back commercial paper from its business customers, said Brian Davis, executive vice president at National Bank Financial, the lender’s investment-banking unit. He said corporate clients were making their own calls on what to buy.
“We were simply the means in which they got it,” Davis said in an interview from Toronto today. “We’re not feeling that this is our responsibility.”
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aV_I3qp9wZLU
That’s because this commercial paper was supposedly a “safe, sure” investment. Well not so much. This has turned the credit market on its head. Then BofA thought it was safe to buy Countrywide at $18 per share when it was $22. People called BofA CEO Ken Lewis a genius. Well, now they are calling him a moron and predicting he could be out of a job.
–
Update — Market TOP Watch
2007-10-11 12:07:01 — Jas: “NASTYQ! down 32 points and counting. Today could have been the top.”
Index Future Change From TOP on 10/11/07
NDX -64
SPX -81
Dow -710
So far the TOP was not violated. This top, if it holds for another 9 weeks (Dec. expiration) would prove to be THE TOP for years and we are looking at a minimum of 50% down during or before 2009.
Jas
Quit scaring serious investers, Jas. This is obviously a great opportunity to buy the dip!
“This is obviously a great opportunity to buy the dip! ”
I thought we already bought the dip?
P.S. If you put yesterday’s stock market drop into context of the rest of 2007, it looks like a great buying opportunity, as similar-magnitude selloffs in Feb and Aug lead to fantastic bull runs. Don’t foolishly worry about Jas’s bearishness or the gloomy tone of this WSJ report — buy the dip and run with the bulls!
TODAY’S MARKETS
By JOANNA OSSINGER
Dismal Anniversary for the Market
Stocks Mark 20 Years Since the ‘87 Crash
With Plunge Fueled by Credit, Profit Fears
October 19, 2007 7:45 p.m.
The credit-market crisis came zooming back into investors’ consciousness on the 20th anniversary of the Black Monday stock-market crash, sending shares plummeting amid uninspiring earnings reports and high oil prices.
The major indexes all ended down more than 2.5%, closing with their biggest weekly declines since the week ended July 27th. The Dow Jones Industrial Average dropped 366.94 to 13522.02. The S&P 500-stock index lost 39.45 to 1500.63, and the Nasdaq Composite Index was down 74.15 to 2725.16.
http://online.wsj.com/article/SB119279405399364771.html?mod=hpp_us_whats_news
“Daddy, what was the war on savers like?”
Successful.
VERYsuccessful, the FEDs won without a fight.
what this blog predicted many moons ago…
“NEW YORK (CNNMoney.com) — With crucial holiday sales on the line, Sam’s Club is laying it on thick this year, giving shoppers free breakfast on top of its Black Friday “doorbuster” deals.
No doubt, an ongoing housing market slump coupled with credit market woes have left many Americans with less discretionary income to shop.
As stores brace for the all-important November-December holiday shopping period, which accounts for as much as 50 percent of merchants’ annual profit and sales, retailers are especially nervous about whether or not they’ll be able to make their year-end financial targets.”
Sam’s Club free breakfast: would that consist of simply placing a few more food sample stands throughout the store?
What could possibly go wrong with this plan?
Price, schmice.
“MY CLIENTS ARE NEAR FORCLOSURE. TAKE OVER PAYMENTS AND YOU CAN BUY THIS HOME WHENEVER YOU QUALIFIY. CALL ME FOR DETAILS. IF YOU WANT TO OWN A HOME THIS IS YOUR CHANCE. CALL ME AT 602-705-4276. DETAILS: THey are $2793.86 in late payments. Their monthly payment is $1830 per month. HOA is $85 every 3 month. The bank will work with us on the late payments. You would take over the payments and make up the late payments. When you qualify, then you can purchase the home. EVERYTHING WILL BE DONE THRU A BANK AND ESCROW. DO NOT GIVE MONEY TO ANY OTHER PARTIES. When the market cahnges, you will have a ton of equity in this home.”
http://phoenix.craigslist.org/rfs/451347717.html
“take over payments” not same assuming the loan. and surely, the loan is not at a fixed rate.
of course, if you had some money, but super-lousy credit - this might be appealing.
Hurry, hurry! Sharp knife falling! Catch it now!
–
Please see the attached ‘Why I am Still Bullish” by my friend George Ure, a long-time permabear, that seems to confirms my call of the TOP.
-x-x-x-x-x-x-x-x-x-x-
Updated: Saturday October 20, 2007 07:55 CDT
Why I am Still Bullish
We need to have us a little chat about the markets here. While one headline this morning modestly claims that “Wall Street Remains Bullish Despite Data”, I’d remind you that I’ve been one of those bulls for nearly a month now. Several readers have sent me emails like this one in the wake of yesterday little sell off in the markets:
“A favor please? Could you stay bullish a couple more weeks please, it is really helping my puts :)”
No problem! As I explained before, I am a steadfast Bull until the first of November. From there, I expect to be changing my tune 180 degrees. So, while I will outline the bigger picture - and my specific target number this weekend for Peoplenomics subscribers (Hint: It’s under 10,000), I’ll just say in passing that “You ain’t seen nothing yet” and tell you that by the end of next week, that’s when we should get our solid bounce and that’s where I stop being bullish. That bounce, I think, will be the one to be sold into - aggressively.
…
http://www.urbansurvival.com/week.htm
The dead cat is baked in? Ew!
Bulls love to eat dead cat pie.
Last night I broke out the LIFE special decade in pictures, I like to bring out the old stuff every now and again…. from critics at large:
VOICES:
“Thoughtful Americans understand the highest patriotism is not blind acceptance of official policy, but a love of one’s country deep enough to call her to a higher standard”
-Sen George McGovern
Palmetto made a very brief comment yesterday that really struck a chord, reffering to the globilazation doctrine that is being followed, and the relation of the standard of living to most Americans. Why are many countries including Peru, Columbia, and Panama not wanting trade “deals” with the US? This is a rejection of US policy and doctrine. This is the third world REJECTING globalization, why? No Trust, No Leadership, Hope is not a plan.
The apathy in America is palpable. The commercial interest in America is crushing any hope individual freedom that once played in the lives of the middle masses. It takes great courage to resist this system. Who will have the courage? Who will speak out? Who will change the course of this country, it is not one, it must be many. People are starting to get angry, and angry minorities are crushed by the collective will of the tyranny of the majority.
TRUTH, LIBERTY, HAPPINESS.. come forth to lead this nation.
–
The other side of the “short squeeze.” — Jas
-x-x-x-x-x-x-x-x-
http://online.barrons.com/article/SB119284249217965682.html?mod=9_0031_b_this_weeks_magazine_main
MONDAY, OCTOBER 22, 2007
Margin Debt — and Risk — Is Growing
By JACK WILLOUGHBY
EVEN AFTER A RECENT DROP, margin debt remains within spitting distance of the all-time high it hit in July, and 43% higher than it was a year ago. It’s become a source of concern to some investors who worry that it makes the stock market more vulnerable to a nasty tumble, particularly if equities’ resurgence continues.
“High margin debts show the effect of over-leveraging and mispricing of risk in our financial system,” says Scott Schermerhorn, chief investment officer for Choate Advisors, which runs about $2.7 billion. “It indicates that, despite the August runoff, there’s still more problems out there. This will take a long time to work through the system.”
…
The Bottom Line:
Heavy margin debt can be a sign of an overleveraged market, vulnerable to sharp declines. And it tends to show up closer to the end than the start of a big bull-market rally.
…
There were rumors of big bond funds practicing unsafe investing and although the test results have not been made public, recent events seem to support the claim that PIMCO and Fidelity may be SIV positive…
“Fund giants PIMCO and Fidelity have joined the so-called super SIV fund set up by three big U.S. banks, boosting confidence in the plan, Bank of Italy Governor Mario Draghi said at the close of a meeting of finance officials from the Group of Seven rich industrialized nations”
http://tinyurl.com/39jujy
First it was going to be a $100b fund, then $75b, now $60b (today’s WSJ). The toxic mortgage Superfund is down by 40 percent in the week it was proposed!
As long as Vanguard doesn’t get involved. If I had any money in PIMCO or Fidelity, i would get it out.
Willing participation in the SIV Superfund should be viewed by investors as a signal to divest ASAP.
Why would anyone keep their savings in an uninsured money market mutual fund that suffers from SIVs, and does not pay a compensating risk premium? Anyone with a brain would either opt for FDIC-insured accounts or T-bond money market funds.
P.S. How come there is not a risk premium on “money market account” returns? I find this conundrum rather mysterious, as “money market” suggests market-based returns, which normally should compensate investors for default risk (as in SIV defaults). Maybe the prospect of a SIV bailout has put investors at ease?
SIVs Pose Risks for Money-Market Funds
By Tom Lauricella and Diya Gullapalli
Word Count: 1,026 | Companies Featured in This Article: Bank of America, Federated Investors
Complex investments known as SIVs are roiling Wall Street and the world of high finance. But the investment vehicles also are threatening trouble in a seemingly unlikely place: money-market funds, the choice for many individual investors seeking safety.
http://online.wsj.com/article/SB119284110355565545.html?mod=todays_us_nonsub_money_and_investing
What about the “government bond fund” selection in many (like all) 401K plans which most people believe are limited to US Treasury Bonds based on the brief top level description but actually allow the fund manager to invest in MBS when one drills down deep into the prospectus and are in fact stuffed with MBS!
Heads up for an interest rate cut on the 30/31st! Cess Poole is up to his games again…
Fed’s Poole: cut only if confident won’t rue move
“Federal Reserve Bank of St. Louis President William Poole said on Friday that interest rates are about right and if the Fed decides to cut again, it ought be confident it will not have to quickly reverse course.
“I think that, given the information set that we have, we are approximately in the right place,” Poole, a voting member of the Fed’s interest rate setting committee this year, told Reuters in an interview. The next meeting is on October 30-31.
“If I thought that we were way off the right place, what evidence would I offer? Well, I think the market would be looking at the same thing that I’m looking at, and then we wouldn’t be there, we’d be in a different place,” he said.”
http://tinyurl.com/2wlqt3
“If I thought that we were way off the right place, what evidence would I offer? Well, I think the market would be looking at the same thing that I’m looking at, and then we wouldn’t be there, we’d be in a different place,” he said.”
Poole is channeling Animal Farm. Or, he might be nuts.
The quotes in the article make Poole out to be like one of those fellows who in his youth was a genius but later after a life ravaged by disease, alcohol, and drugs is reduced to half thoughts and “stubbed” speech due to the needle “skipping” on the brain.
Good thing this guy is retiring.
brain damage by drinking too much from the punch bowl, I guess …
Rate cuts are in the bag. The only reason for the Fed honchos to suggest otherwise is that they believe the surprise factor helps increase the impact of a rate cut (i.e., if everyone knew for sure a rate cut was on the way, the stock market would not get the nice bounce it gets when the rate cut comes in the form of a surprise).
And rate cuts will be good for precious metals too. Got Platinum? I am guessing platinum will cross over $2000 per ounce in the next couple of years.
“When he moved to Grey’s Riverview Terrace three years ago, Christopher Rocco figured the town home association that runs the complex was in good enough shape. It had about $25,000 on hand, and most of the units had just been reroofed.
He never envisioned the jam Riverview Terrace finds itself in today. The wave of foreclosures sweeping across the Twin Cities has hammered the little community on St. Paul’s West Side.
Of the 21 town homes, nine are in foreclosure, according to Rocco, the association’s 37-year-old president. The group can’t fix Riverview’s rotting siding because it has just $37 - plus $5,000 in debt it can’t pay and a ledger filled with unpaid monthly dues and late fees totaling more than $35,000.
“We are on the verge of losing everything,” Rocco said. “It’s a lot of stress.” ”
Full article at http://www.twincities.com/
Homoaner, this thread is long since dead, but I gotta say - that was one gawd awful story - and sadly there will be many, many more just like it across this country.
Craigslist post from San Diego. This one is in 4clo$ure Ranch in an area particularly full of stuck flippers and REOs. What is this person babbling about?
“THINK POSITIVE!!!!! This is an absolute WIN-WIN for all parties involved. It’s time to put the media-induced fear behind us all. THIS IS A TOTALLY DIFFERENT APPROACH THAT OFFERS ALL THE COMFORT, SECURITY AND SAFETY YOU COULD EVER ASK FOR.
SELLERS HAVE AUTHORIZED AND ARE PARTICIPANTS IN UNIQUE STRUCTURING W/ JP MORGAN CHASE TO CREATE SECURITY AND CALM OF PERMANENT PAYMENT RELIEF AND/OR HELP W/ CLOSING COSTS”
http://sandiego.craigslist.org/rfs/453647341.html
Gee whiz… I feel so calm, comforted, safe and secure now.
What is “permanent payment relief” ?
I’m leery of any deal on a half-million dollar property that somehow offers a $1,300-ish payment (as the hard-to-read flyer would indicate) — even if that was just P & I.
Is it just me, or does anyone else think they probably aren’t using the word “permanent” the same way most of us would?
“What is “permanent payment relief” ?”
9 grams of lead applied to the head at high velocity.
Royal Bank of Scotland joins the club and gets a 23A Exclusion Lettter this past week bringing the total issued to date to a Lucky Seven!
Warning PDF at Fed.gov site
http://tinyurl.com/3457xu
it’s nice that we now get an official list of all the big gamblers that are crashing the world economy:)
Barclays got one of those letters too. According to the Telegraph, Barclays can borrow up to 20 bn from Fed window. This is very unusual. Why aren’t they knocking on The Old Lady’s door?
maybe they already received the maximum amount from the BOE?
today, Sunday….Royal Bank of Scotland allowed access to the discount window….hmmm.
Superfund SIV turning into a dutch auction….100b 80b, 60b
as GS said today,
do I hear 45b?
G-10 market whisperers to investers: Remain calm.
Analysis: Finance leaders grapple with oil prices, falling dollar, credit crisis
By Martin Crutsinger
ASSOCIATED PRESS
12:41 a.m. October 20, 2007
AP
WASHINGTON – Faced with soaring oil prices, a falling dollar and the worst credit crisis in nearly a decade, the masters of global finance have a simple message for jittery markets: Be calm, we are keeping an eye on things.
It probably didn’t help, however, that the new assurances came exactly 20 years from the date of the worst market meltdown in U.S. history.
http://www.signonsandiego.com/news/business/20071020-0041-financemeetings-analysis.html
Google me back to 1999, please.
Venture capital stays strong
Levels compared to dot-com wave, making some antsy
By Bruce V. Bigelow
UNION-TRIBUNE STAFF WRITER
October 20, 2007
Venture capital funding for startup companies continued at a strong pace during the three months that ended Sept. 30, both in the San Diego region and nationwide, according to two surveys released yesterday.
One report said investments by venture firms hit $8.07 billion nationwide during the third quarter, an 8 percent gain over the same quarter last year and the highest total since the first quarter of 2001.
…
Experts disagreed, however, whether the pace of venture investing reflects another frenzy of irrational exuberance or merely sober spending on a grand scale.
“It’s gotten ridiculous again,” said Jeb S. Spencer, managing partner of TVC Capital, a small private equity firm in San Diego that specializes in software investments. “There seems to be a direct correlation between the number of venture deals and Google’s stock price.”
http://www.signonsandiego.com/news/business/20071020-9999-1b20venture.html
Me confused. Does AG still work at the Fed?
Anyway, I think it is a great idea to let some subprime assets find the floor. Letting a few of the subprime lending kingpins feel the full brunt of their folly would greatly reduce the chance of going through another crazy lending episode like the recent one over the remainder of the 21st century.
P.S. Last I heard, the proposed fund size had shrunk down to $60b. Do I hear $40b? $35b??
Greenspan questions ‘superfund’
By Krishna Guha in Washington and David Wighton in New York
Published: October 19 2007 17:12 | Last updated: October 20 2007 01:51
Alan Greenspan on Friday raised serious doubts over the plan to create a $75bn-plus investment fund to buy the assets of troubled investment vehicles, warning that it could prevent the market from establishing true clearing prices for asset-backed securities.
“It is not clear to me that the benefits exceed the risks,” the former chairman of the Federal Reserve told Emerging Markets magazine. He added, “The experience I have had with that sort of intervention is very mixed.”
His comments came amid growing speculation on Wall Street that the current Federal Reserve has mixed feelings about the superfund plan, which was put forward by Citigroup, Bank of America and JPMorgan Chase with the active encouragement of the US Treasury.
Analysts believe the Fed sees potential benefits in the plan in terms of preventing a possible firesale of assets, and does not think it is designed to allow financial institutions to avoid recognising losses. But they think the Fed is worried the plan could be feeding investor anxiety, and thinks markets might normalise faster if some assets in the troubled vehicles were sold in the market and prices were allowed to find a floor.
http://www.ft.com/cms/s/0/0f79b248-7e5c-11dc-8fac-0000779fd2ac.html
Credit markets
Curing SIV
Oct 18th 2007 | NEW YORK
From The Economist print edition
A bail-out fund raises more questions than answers
YOU know a market has seen better days when some of its leading actors are compared to a deadly virus. With many traditional buyers of commercial paper (short-term corporate debt) still on strike, Wall Streeters with more wit than taste have branded the sickliest of the structured investment vehicles (SIVs) that issue such paper to punt on longer-term assets “SIV-positive”.
As the feeble struggle to roll over their debt, the banks with the most to lose from their demise are reaching for a palliative. Citigroup, JPMorgan Chase and Bank of America plan to set up a fund, expected to be worth up to $100 billion, that would buy assets from troubled SIVs. Though no government money will be available, the Treasury played a key role in its creation.
http://economist.com/finance/displaystory.cfm?story_id=9993423
Stocks Fall Sharply on Credit Worries
By MADLEN READ
NEW YORK - Wall Street dropped in volatile trading Monday as investors pulled away from stocks amid worries about the credit and housing markets and disappointing corporate earnings.
…
Though the Fed is willing to help boost liquidity, concerns about problems in the financial industry are running high _ concerns that make the record highs reached last week by the Dow and the Standard & Poor’s 500 index appear unreasonable.
“It may take a little time here, a week or two, of trying to heal,” said Steven Goldman, chief market strategist, Weeden & Co. “As we enter the last two months of year, we have a better opportunity to get back to those levels by year end.”
http://nctimes.com/articles/2007/10/22/ap/headlines/d8sec0b81.txt