Bits Bucket And Craigslist Finds For November 1, 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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“As products of the split between man’s soul and body, there are two kinds of teachers of the Morality of Death: the mystics of spirit and the mystics of muscle, whom you call the spiritualists and the materialists, those who believe in consciousness without existence and those who believe in existence without consciousness. Both demand the surrender of your mind, one to their revelation, the other to their reflexes. No matter how loudly they posture in the roles of irreconcilable antagonists, their moral codes are alike, and so are their aims: in matter—the enslavement of man’s body, in spirit—the destruction of his mind.”
John Galt
That Ayn Rand was a great one for setting straw man arguments against people with simplified positions that don’t really exist and then extolling her own simplistic philosophy.
Sadly, the simpletons are in charge.
They’re not simplified; we are living them now.
That quote from from Ayn Rand reminds me of the cheerleaders and the quick sound bites .You can just see all the drones running around chanting “buy now”,while the crooks take their profit . Americans are such debt slaves today because they bought into false myths of what makes a person happy ,only to find out it was a ponzi scheme .
WAKE UP, FREAKIN’ UMERIKA! When are people gonna realize that this whole house of cards, called the ‘MERIKAN economy is a house of cards? This country has become a nation of debt slaves and as long as I have breath I will continue to point this out! Why do people get their panties in such a twist whever Rand or Galt is quoted?
WAKE THE FREAK UP! Nationally, 9 TRILLION in debt. Another 2.5 TRILLION in personal debt, inc. mortgages. Entitlements are another 45 TRILLION. Don’t you get it?
GAME OVER. What are you going to do when are money is worth zilch? Oh, we’ll just buy everything here with our own little monopoly money. Sounds great until you realize we produce so little here. Sure, we make some great stuff. However, that isn’t going to pay the ARCO man for my gas, now is it? That John Deere tractor, great that we make it here, but it isn’t going to get me the cash to buy my groceries is it? Come on. Wake up.
We are broke, a nation of debt slaves, and haven’t closed the shop of manufacturing in this country.
Alas, I guess all is well when you can make a couple of grand every day on the market. Nice. You are no better than ESPN’s Endless World Series of Poker players. Same concept, gambling. Same result, lose money, make money all for sitting around making nothing of real value.
This rant is off.
Meant to say, have closed the shop of manufacturing in this country.
on the lighter side, in Kobe, Japan ther is the MERIKEN park, where in the 1870s the ‘Americans’ docked in the port.
See for instance here:
http://www.japan-guide.com/e/e3552.html
Would you be referring to Kobe of LA?
God I hope the Bulls get him!
OCDan; it was the Randian Greenspan who put us into this mess while he was in charge of the economy.
Most of us here did not go into debt, but rather saved so we can afford a home. Most of us here wish the Fed had regulated mortgages and lending to stop the bubble. Most of us here think Rand is full of crap!
Yet aladinsane keeps posting Rand quotes.
Well as Ziggy Stardust said “Oh no, not me I never lost control.”
I’m not interested in the uninterested.
Ed, where do you get that most of us think Rand is full of crap? care to take a poll? I think our current financial fiasco could have been pulled straight outta Atlas Shrugged.
Just from the replies I read here whenever some Randian bullshit is spewed forth.
I haven’t taken a poll, so I could change my mind if i see some objective evidence(pun intended)
yourmindisclosed
I love it when after you take a rational look at something, then don’t accept it, those who believe say your mind is closed. I’ve run into to this with new-age thinkers and paranormal followers.
You just have to accept that someone who disagrees with you may be wrong or has assessed the facts and may be right. But it seems that some one who refuses to acknowledge a difference of opinion truly has a closed mind.
You misunderstood…
I said you disclosed much~
Having done a stint in Wurstwood with Nathanial Brandon in the late 60’s, I can state that most of the people I know who were enamored of Ayn Rand grew out of it by the time they:
a. Grasped the concept of “monopoly.”
b. Graduated from High School
“You misunderstood…
I said you disclosed much~ ”
As Gilda Ratner would say on SNL; Oh, that’s different, well nevermind.
translation:
blah blah blah blah blah
Who is John Galt and why do you have a hard-on for him?
“I say there is no darkness but ignorance.”
Shakespeare
“MOcha choco-latta ya-ya…
I’ll be your Lady Marmalaahaahhhdddd…”
Patti LaBelle
oh, wait, I’m sorry - I forgot to translate the last line of the Galt quote:
“BLAH”
You do so much better hanging with the your cadre of immigrant bashers on here, that are all in lockstep with one another, and nobody else ever chimes in those parts of threads, except for the chosen few, you.
LOLOLOL I’m with you Philly
I liked Rand’s stories but her objectivist movement gave a facial tic.
Agreed. It’s one thing to present arguments from an “objectivist” point of view if that’s what you’re into. We can all learn from different viewpoints, even if we ultimately disagree with them. But quoting a fictional character every few days is just silly.
Ayn Rand loved the concept of pure capitalism ,but in this world the crooks take advantage of this concept and play it for what it’s worth because of the lack of law and order and capitalist being willing to play a fair game . Ayn Rands concepts can’t flourish in a society where everybody doesn’t play by the same rules and where everybody doesn’t have the same moral structure . All the crooks want to keep people mindless and all the mindless want big daddy to take care of them .If you had a Nation of honest people ,it would be a productive Nation .
The “faults” you describe are human characteristics; they are reality. If a philosophy does not pan out because it conflicts with reality then it’s the philosophy that is faulty, not the reality.
Personally, I’m not a big Ayn Rand fan. Most of the philsophical concepts are recycled, but in her version, they appear angry and bitter. Sociologically, she strikes me as a reactionary against the USSR. In my opinion, her biggest contribution is serving up philosophy for the masses by putting it into popular fiction form.
What you say is so true Annata. If a philosophy can not work in reality ,than it’s just a dream ,and I think that is what I was trying to say .
Excellent post, Annata. You’ve got real skill for plucking the point of something out of a whole bunch of blather. Like a blueberry out of a muffin.
(that’s what I’m eating.)
Rand was precisely a “reactionary against the USSR”. It’s what she was born to, loathed, feared. Her literary style has the subtlety of a bludgeon, but she said what she wanted to say, and the flaw is the same as countless other philosophies: utopian aspirations/human participants.
I perceive her as an ethical person. Ethics was highly regarded culturally here only a couple decades ago. Today our culture barely blinks at the Enron-Worldcom-Tyco debacles and their cousins.
Has our American civilization “peaked”?
Capitalism would work if we had it.
But an economy with a fiat currency which can be printed at will in order to prop up wall street banks is not a free economy.
Ayn Rand is not for me, either.
Seems like Ayn Rand’s philosophy can be boiled down to this: “exceptional” people can create their own morality and do whatever they want; selfishness is a virtue, compassion is weakness. The Exceptional Man doesn’t want or need to have the same morality as the general populace. The unwashed masses will come to realize the inherent superiority of The Exceptional Man, genuflect before his awesome power, and beg him to lead society. Everything will be totally awesome when Exceptional Man takes over!
Hah.
(Wonder if Dick Cheney fancies himself a Randian hero? … I wonder.)
As a side note, Rand’s a pretty mediocre writer. I’d describe her prose as long-winded and turgid.
Take a look aways down in this thread, about how Germany decided to do away with the swords and turn them into solar plowshares, for all citizens.
Brains, not brawn.
Aladinsane, the German solar story is good — I’m all for it. I wish we would try something similar.
But I’m not sure what that has to do with Rand’s Objectivism.
There are only two types of people in the world:
1) those who believe there are only two types of people in the world, and
2) those who don’t
“You’re either with us–or you’re with the terrists.”
Reminds me of a t-shirt that I had in college:
There are 1 0 types of people in the world: those who understand binary and those who don’t.
Nice.
Now finally we have the meaning of the word “contained”
http://biz.yahoo.com/ap/071101/foreclosure_rates.html
“There was one foreclosure filing for every 196 households in the nation during the most recent quarter, RealtyTrac said.”
1/50 on a yearly basis. In California it was 1/22.
More foreclosures than sales?
RE: “Contained”
Crude prices have reached inflation-adjusted highs set in early 1980. Depending on the how the adjustment is calculated, $38 a barrel then would be worth $96 to $101 or more today.
Havin’ built my first house in 1981, all I can say is “hold on to your tin-foil hats”.
Praise God I had no small kids at the time.
Fuel oil alone here in Mazzland is $3.00 per gallon.
And winter hasn’t even started.
This US economy is gonna blow like Mt. St. Helens.
I too bought my first house in 1981 and believe me if you weren’t buying land contract or purchase contract with seller financing, you weren’t buying. The very peak rate thru a bank where I lived was 21%.
Around 1976 and 1977 there was such energy conservation that here you couldn’t buy gas except on certain days depending if the last digit of your license was odd or even numbered. Forget going anywhere, theaters, restaurants & shopping centers closed on the weekends to save energy. I was dating my husband then and he thought he’d died and gone to heaven, because there was no where to go on a date. Sure saved him a lot of money. By the early 80’s by the time you paid your outrageous heating bill you didn’t have any money to go anywhere, anyway. I know this is going to be a lot worse than that this time around. I could see the signs in our area about 3 1/2 years ago.
My barometer used to always be my brother in law, who’s an engineer. Their business seemed to be the first to go, followed by everything else. If his company hadn’t had him in Brazil most of the last 2 years, they probably would have shut the doors.
I think people just haven’t shut off the high life mentality yet, but they will when they have to start living lower than they can even imagine. It won’t be just going from the high life back to a middle class life. For some of them it’s going to be much worse, and I’m sure they’ll come out of this with a better appreciation of what’s it’s like to be poor. They won’t be doing their charitable duty serving in the soup kitchen, they’ll be eating there.
Spot on Ghostwriter. What people seem to forget is that almost everything you see in this country is fueled, pun intended, by cheap energy. And nothing comes close to cheap, easy to move, and easy to get to as oil. As this oil becomes more and more expensive, you bet you are gonna scale down. And don’t give me the line about alternative energy. Nothing is even close to the scale of use or inplace as oil that packs the wallop of oil. Nothing. Hydrogen. Great idea. When is Ahhnold going to get those stations up and running? Yeah, it’s is coming. So are the aliens.
Oh, solar power. Great, I am sure all those in the northern states in winter can’t wait. Endless days of overcast or no sun for months on end. That is gonna work. Oh, we;ll store in the summer. Great idea. Do you realize just how much of that solar storage is required to make the same amount of energy as those states use in oil? Didn’t think you thought of that.
Bottom line is that this country might be ready to some degree if we had started 20-30 years ago, but no one wanted to take the lead and here we are with oil finally reaching inflation equivalents of 25 years ago. Sure, you can argue that part of that is Peak Oil, which I tend to agree with, but you can also argue that it doesn’ help that our money is toast and is slowly evaporating from being the world’s reserve currency.
Whatever you decide know this, oil is only going to get more and more expensive. More people want it and it is so simple. When demand outpaces supply things will get more expensive.
There was a great program on pbs a week ago, in regards to solar power.
Well known sunny spot-Germany…
Has really shown the world what can be done, as their government made it feasible for all.
What has our Federal Government done for us, in regards to solar power?
(full disclosure: the electricity to transmit these words, comes from the sun)
I saw that show - Germany puts us to shame in that dept.
What have you done for yourself in regards to solar power? Stop crying and DO something rather than complain about the government not taking care of you.
As a renter, mathguy, I’m not able to install solar. But, when the time comes to buy, if my house isn’t already solar powered then I’ll pony up and make it so. Same with full wall and roof insulation and a grey water tank and drip feed lines for landscaping.
BTW: don’t know if you were getting irate with aladinsane, or just having a good rant, but IIRC The Lad announced a few weeks back on here that he’d just had his solar panels installed.
And, yes, for industry, solar may not make much sense, but if the govt. made subsidies available for people to insulate, and install solar and wind power in thier houses, it would certainly take a load off the national grid.
Maybe allocate some of the gargantuan amount of money needed to create a nuclear power station into creating subsidies?
Sometimes thinking small and local is the best solution.
Two things:
1. “Bottom line is that this country might be ready to some degree if we had started 20-30 years ago but no one wanted to take the lead….”
IIRC, Jimmy Carter did. But everyone thought he was (is) a loon.
2. I don’t think Lad is looking for a gov’t handout. I think it is a broader statement that the gov’t should consider other options given that they negotiated energy policy behind closed doors (with Ken Lay present, to boot) and wrote huge subsidies to the oil industry.
“high life mentality.” It’s okay because Miller Beer promises me the High Life.
Ya got it all down Ghostwriter…
I was homesteading in Maine at the time.
Self-sufficiency was still in vogue.
Built a 1800SF solar home heated with 2.5 cords of wood which contained a thermo-siphon system for the hot water.
Cut my wood off the back 15 acres; bought a cow and a pig for butchering from the farmer down the street and always patronized the local pick-your-own berry farmers. With a mess permit you could go down to the coast and dig a few peck of clams. You bought lobster at the local co-op for a quarter of what the slobs were doling out in retail venues.
Plus there was always somebody with too much salmon and moose meat on their hands.
Whitewater rafted and rode a 40mpg motorcycle for entertainment. And drank $1.50 per six-pack Budwiesers.
Life was OK.
Man-compared to people’s expectations and consumptive patterns today, there are a powerful lot who don’t a have fookin’ clue and are gonna get their heads handed to them
as this debacle picks up steam
Sounds like bliss to me. This is what my husband and I plan, adding lots of garden stuff.
A lot of inflation is due to the rising price of petroleum. Adjusting the price of oil for inflation is kind of like adjusting the level of inflation for, well, inflation. It’s all good.
Soar in 3rd Q….
http://biz.yahoo.com/ap/071101/foreclosure_rates.html?.v=4
“filed a class action complaint ….against Countrywide Financial Corporation (“Countrywide” or the “Company”)”
“The lawsuit is brought on behalf of all persons or entities who purchased Countrywide Financial Corporation Series A Floating Rate Convertible Senior Debentures …..from May 17, 2007 through and including August 9, 2007 (the “Class Period”).”
“Countrywide allegedly misrepresented its position in the mortgage market by stating that the current downcycle in the housing market would actually place the Company in a “superior competitive position” based on the strength of its “capital liquidity positions, superior business model, and best in class workforce.”
hahah what a joke. The bond holders suing the stock holders before the company goes bankrupt.
Of course they said they are in a superior positing with a great workforce. All companies think and say that.
No surprise,
As commented a while back, when I asked my wife when we’d see the suing start her reply was “the lawsuits *have* started, the lawyers are collecting info at this point… they’ll start the actual filling once they decide how and what they are going to go after…”
I’d consider this just one of what will eventually be many, many more.
Trick Or Treat! Look what CFC got in their candy bag!
http://biz.yahoo.com/bw/071031/20071031005873.html?.v=1
After Mozilo’s outrageous comment regarding the government standing on the sidelines while people lose their homes, I am delighted the company got slapped with the lawsuit. Frankly, CFC ought to go under, never to return. And Mozilo should have to spend the rest of his life paying out his stock sale money to attorneys to defend his worthless a$$.
“Mozilo and the other “defendants caused Countrywide to engage in unlawful business practices and to disseminate false and misleading statements to the public while simultaneously using more than $2 billion of Countrywide’s assets to prop up the price of Countrywide stock via a share repurchase plan,” the pension fund said in the complaint.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=avos6a_QIVNo&refer=home
OMFG. I’m peon, completely outside the finance industry, and I could have told you they were doing that for over a year now. People getting burned for buying crap from CFC over this summer have no one to blame but themselves.
This is what constitutes news to the MSM? Many REI associated companies have been doing this over the last 2 years including most of the public builders.
RE: did not follow Countrywide’s reportedly strict underwriting and loan-origination practices;
LMAO…Yeah, sure strict underwriting.
Anytime you sent an appraisal figure under the valuation number some L/O wanted, they dumped the report in the toilet and went and found a number hitter to do their deal.
But first they’d sic some azzhole processor on you, to try and browbeat you to change the contents of your report.
Some would upon getting the number immediately inform the loan applicant that you had “killed” their deal, so you could then expect another nasty call from an irate, belligerant FB’er who knew all there was to know about what his goddamn house was worth.
Let ‘em all the CFC racketeers swing from the yardarm.
Susman Godfrey is a kick ass Houston litigation firm, originally known for antitrust litigation. I almost went to work there in the 1980s and am still kind of sorry I didn’t. One of my husband’s law school classmates and best friend was a partner there. IIRC Mr. Susman also has a lovely architect designed gigantic McMansion in Galveston. They will inflict some pain on Countrywide.
All thought one of the mantra’s on this blog is personal responsibility. The stupid litigation is on the behalf of people that bought crap from CFC this summer. We all new way before this summer that CFC was a rotten company run by a rotten CEO.
Let the markets deal with this, not the courts.
correction: I thought…
The suing process is part of the market process…
“They will inflict some pain on countrywide.”
Music to my ears: “Oh, what a beautiful morning”.
Let’s sing it together!
“Oh, what a beautiful daaaaaaaaaay…’
“Mr. Susman also has a lovely architect designed gigantic McMansion in Galveston.”
That ought to do it. Watch your behind, Mr. Mozilo.
Mr. Susman also has a lovely architect designed gigantic McMansion in Galveston
If it’s a one-off custom build then by definition it’s not a McMansion, right? Even if it’s in bad taste.
Perhaps “McMansion-like”? As in, “I paid trophy house prices and all I got was this lousy McMansionesque crapbox.”
IANAL [I am not a lawyer], but do FB’s have any legal standing based on something Mozilo merely “said” to the media? And I would imagine that earnings guidance is not legally binding either, hence the term guidance. But, THIS does interest me:
the SEC has commenced an inquiry into millions of dollars in stock sales by Defendant Mozilo, the Company’s Chief Executive Officer. In particular, the SEC is investigating the timing of such sales by Mozilo and changes Mozilo made to his arranged stock selling program.
Yes, I liked that one, too. This Mozilo is such a blatant crook, he’s Capone without machine guns.
The man belongs in jail.
Yet nobody in the media takes him to task with his comments. That’s what pi$$es me off.
Exactly. Whats outrageous is that misdirection, misleading and fraud disguised as “business” is acceptable. We’d be in jail if we did the same thing on our own.
The moral hazard of corporatism is obvious. I’ll never understand those who apologize for it.
“Yet nobody in the media takes him to task with his comments. That’s what pi$$es me off.”
The media is bought and paid for by Countrywide. Note the amount of money spent on adverstising. Don’t expect anything but positive spin from the MSM.
The plaintiffs are buyers of CFC convertible debentures, not FBs or stock holders.
Perhaps it is time to invest a little in paper manufactuing companies as the legal eagles will be burying each other in paperwork for YEARS to come
“…the SEC has commenced an inquiry into millions of dollars”
Let’s see Crissy Cox (Sargent at Arms) at the SEC… resides in Newport Beach CA…is a Republican…is in the last months of ” Dickey Boy” Cheney & Yale “Cheer Leader” Texas “bush popper” administration…and Crissy is suppose to pull down the “shorts” of the “Tan Man” so all the world can see his shriveled little wanger?
Bugs: “eh, …I don’t think so”
I want to sue the government for making misleading statements about social security and medicare. Their taking money out of my pay check and they probably won’t give it back in 25 years. waaaaa
I want to sue the fed for inflating the currency and making gas, housing, food, etc more expensive. waaaa
I want to sue the president for screwing the country beyond belief. waaa
Of all the things to sue, this is not the one I would choose.
yes, there are so many opportunities for suing the government…
The Dutch press reports today that ‘class action’ case is starting against the Dutch government, because they used a far too low gulden-euro conversion rate when the Dutch had to convert to the new euro currency. Government and burocrats knew the exchange rate was at least 10-20% lower than it should be, but lied about it in parliament. Effectively they stole 20% of every savers money and gave it to debtors, one of the reasons that real (e.g. home price) inflation got pretty much out of hand in Netherlands just before and after the euro conversion. Of course, in the years that followed savers were punished again, this time by artificially low interest rates.
The lawyer is claiming huge damages from the EU (ECB). Of course that will never happen, but I’m sure the millions will keep flowing in at the lawyers office …
If people get all Shakespearey on lawyers, I wouldn’t be surprised…
Ah, yes, but the Bard was actually making fun of those that think that getting rid of lawyers would be a good thing. Actually, it was to supplant the rule of law. On the other hand, I can think of some nominees.
I want to sue you for wasting my time with that post!
and i want to sue you for suing me
and a boy named sue wants to sue his father too…
I have a sister named Sue
Your sister was an only child.
Yeah. Right. You can’t sue the gov’t unless they give you permission.
Following my saga of CFC puts, I rebought yesterday on the upswing just after the Fed announced a quarter-point cut 5 April 08 puts. I shortened my time horizon from Jan09 but bought more contracts. Already up 15% today. I think reality is setting in for CFC bagholders–there is no way they can make a profit next quarter, and if they do, it’s not enough to sustain a $30 / share price. Not even a $10 a share price. They said they are not doing subprime etc etc so that means they are going back to their business model of early 2000, which means they deserve a share price at best of $5, except now they have much higher debt.
Thanks for spreading the love, CCC.
From Massachusetts, resident Realty Clown and NAR lackey Karl Case again pokes his head from his hole in the ground, claiming “The market is not a bubble in most of the country”. Right-o, Karl!
http://www.bostonherald.com/business/media/view.bg?articleid=1041825
The whole county had a housing bubble, it was just bigger in some areas. Easy money was everywhere, and now lending standards will tighten up everywhere too.
It’s always hard to tell whats going on from a Herald article. That one sounds like somebody called Case and asked him if the NAR was wasting its money, and he said maybe not. He has done a lot of sudies on affordability, and is well aware of the relationship between income, home prices, & location.
The main point of the NAR ad campaign is to keep the TV stations quiet, anyhow, not to get people to run out & buy a house. TV stations aren’t known for aggressively investigating their advertisers.
Okay, so all real estate is local,and yes, the bubble got the biggest in places like CA and FL, but with lenders tightening up, and WI being ranked quite high in foreclosures, We are seeing real estate prices drop here also. I’ve seen a 15% drop in lots of listings, and they are still sitting empty. The median home price in my small town is $151K but median household income is only about 41K. And property taxes on a 151K home here are $3000. We sold our house in another state and moved here in 2005. Had FIL in another state dying and couldn’t even think about looking at houses, so signed a lease for a year, figuring we’d buy after that. Too many vacant houses and rent costs $750, property taxes alone would run me $250/month. Nah, think I’ll rent. I do believe when it is all said and done, this will effect EVERY community in America, and obviously in many other countries too where they are having the same bubble.
No one is safe bwahahahaha
Hey Mid!
I’m in Eagle…haven’t seen much of a drop in areas I’m looking at, of course, we want a bit of land.
Leigh
Sheesh Leigh..you’re really putting Eagle on the map lately
Mid and Leigh,
I’m just a bit away from you two! Realtors in Dane and Rock Co’s are still drinking the kool aid. A realtor selling new construction told me sales in spring will really pick up, so I should buy now. He didn’t understand when I said there will be fewer buyers because mortgages will be more difficult to get, more houses on the market so prices MUST fall. But, he replied, they will all be real buyers.
Also, he had a nice sheet outlining what the monthly payment would be. Given the payment, you would need an annual income of $85K. Median annual income in the area - $45k - $65K.
Hi Mad!
But, he replied, they will all be real buyers–yeah, just not qualified ones!
We have several realtors chasing us around.
We are honest with each of them. We may purchase in Feb 08, but they won’t or can’t hear this simple statement!
They also seem hell bent on trying to sell us property we’re not interested in.
We gave them simple instructions: ranch w/walkout basement; outbuilding for woodshop; 10+acres w/some wood.
I force them to e-mail me, and won’t take their calls. I call them if I’m interested in a property they sent via e-mail.
Ya just can’t make this stuff up!
Leigh
Oh no, we’re competing with each other - Ranch w/walkout! JK - If you’re looking in Eagle, we won’t have any overlap.
10 acres may be a bit much for us to take on, but at least one acre would be nice!
I fully understand about being chased - one realtor was almost jumping up and down with joy when we said we didn’t have a house to sell.
There was another realtor that called me when their listing went down 5K. I asked what the identical house across the street had sold for and was told it wasn’t relevant as it was a relo. I replied, it sounds like a comp to me, but I wouldn’t want to insult your sellers with my offer.
There was another realtor that called me when their listing went down 5K. I asked what the identical house across the street had sold for and was told it wasn’t relevant as it was a relo. I replied, it sounds like a comp to me, but I wouldn’t want to insult your sellers with my offer…
Good night Irene…ya think they’d want to feed the kids and make a deal!
P.S. We’re looking to be about an hour out of Milwaukee,
North to West—no way south!
Smiles,
Leigh
Actually, the realtor would be the new next door neighbor.
To make it better - the husband is a mortgage broker!
“Okay, so all real estate is local,and yes, the bubble got the biggest in places like CA and FL”
In supposedly invincible LA (CA) there are cracks showing up all over the dam/dike. IN dataquick Ca cities sept chart for LA County 75 out of 115 communities are negative YOY: many are 10-20 % negative YOY. This is showing up especially in the crapzone burgs and in such large plain vanilla mid=lower end burgs such as Van Nuys, whittier, Glendale, long beach,lakewood,downey,norwalk,carson,gardena,northridge,reseda,ect.
LA is getting creamed as we speak, though the hi-end miniscule coastal/hollywood hills enclaves such as Manhatten beach,Hermosa, Bel-aire, S monica, brentwood,Venice, Bev hills are only staying afloat thru a few sales of mega homes to the mega rich.
I wonder if Beckham is going to lose money when he sells his LA Mansion in a few years (you don’t really think he is going to stay once he hangs up his cleats)?
$900 Billion Pound White Elephants…
“The doomsday scenario would play out something like this: Just like CDOs and other asset-backed securities, credit card debt is sliced, diced, and sold off again as packages of securities. Rising delinquencies would hurt not only the banks involved but the securities backed by the credit card receivables. Those securities would decline in value as consumers defaulted, leading to bank losses as well as portfolio losses in the hedge funds, institutions, and pensions that own the securities. If the damage is widespread enough, it could wreak havoc on the economy much as the subprime crisis has done.”
http://money.cnn.com/2007/10/29/magazines/fortune/consumer_debt.fortune/index.htm
So Easy
http://www.stockmania.com/index.php?showimage=83
LOL, nice! Rate cut? Won’t help. I just think that Ben and the Wall Streeters are into punishing the “shorts” a little before the bears actually take over.
Give it time. It’s a done deal: Bear Market straight ahead!
Roidy
I feel pretty punished.
Bernanke is following the market instead of leading it now. It used to be that somebody would cut a rate and the market would respond upward. Now, the market responds upward and bascially DARES Bernanke to not cut rates. “See, this is what will happen if you cut the rate, the DOW goes up. You want this DOW to stay up, DON’T YOU, Bennie boy? So, you’ll cut the rate like we anticipate, RIGHT?”
Rinse and repeat until the Next Depression. How does HeliBen sleep at night? Ambien?
“Bernanke is following the market instead of leading it now.”
Yes, the numbers we’re seeing from every corner of the country suggest BB (yesterday & Spet. 18 ) brought a warm sixer of Old Milwaukee’s Best to a cocktail party.
RE: Yes, the numbers we’re seeing from every corner of the country suggest BB (yesterday & Spet. 18 ) brought a warm sixer of Old Milwaukee’s Best to a cocktail party.
(laughing mightily!)
Unfortunately, as it turns out it was Schafer, “The one beer to have when you’re having more than one.” (rate cut that is….)
“…How does HeliBen sleep at night?”
Well, after eating Wagyu beef short ribs from the steakhouse, “Dickey Boy” Cheney & President Push & Sir “you can call me Al” Greenspent “retired” to the “gentleman’s lounge” for a cuban cigar hand dipped in “sweet sauce” by Ms. Ann Coulter and an economic update from Ben Shalom Bernanke. Ms. Karen Hughes will be serving “Texas spicy Cheese Cake”… followed by a solo dance performance by Karl Rove.
Stock sell off this morning. Down 1.32% by 10:00AM. Gee, Ben. They didn’t appreciate the rate cut? Ungrateful SOBs.
Mark my words here: the traders and investors are going to get tired of the speculators churning the market like the past 3 or 4 months. They WILL pull back and sell off - really sell off. It may be today or next week or next year. It will happen, and it won’t be that long either. PPT? LOL, won’t help.
Roidy
LOL
Stock market up 200 one day ,stock market down 200 the next day . When are people going to get sick of the profit taking after the cheerleaders spin their magic,than report the bad news . As you can see the rate cut was only good for about 12 hours of spin and down it goes again . Now the cheerleaders and profit takers will be demanding a 1/2 point cut .
Ha, sounds like good toon material!
http://tinyurl.com/379brg
“San Diego County’s mushrooming number of foreclosures is starting to hobble homeowners associations large and small as cash-strapped owners cease paying their monthly dues.”
“No homeowners association seems immune to the rise in delinquencies, from small condo associations in older neighborhoods to upscale high-rises in downtown San Diego. Even large, single-family-home communities, where monthly fees cover the cost of maintaining greenbelts, swimming pools and community centers, are feeling the pain.”
“Especially vulnerable are smaller condo-conversion projects and developments in more affordable areas, such as eastern Chula Vista, where first-time homeowners stretched themselves financially to buy, using loans with low teaser rates that have since reset upward.”
Two years ago the U-T was cheerleading condo conversions for addressing “affordable” housing. Not working out so well and none of this is surprising in the least.
Thanks for pointing this article out SDGreg. I’ve described these problems to people I’ve had bubble discussions with, but they have always scoffed at it. With 60% of the housing utilizing an HOA of some sort, that’s gotta hurt.
I can think of one conversion project specifically which was offering no HOA fees for a year or two. It’s full of foreclosures now, with a nasty monthly fee surprise for the owners coming soon, along with whatever ARM adjustments are heading their way too.
The U-T may finally get the affordable part that they were waving their pom-poms about when these shoeboxes are 70% off.
So the HOA’s lein is subordinate to the first and second mortgages?
Save Christmas?
http://biz.yahoo.com/cnnm/071031/103007_fedrate_holidaymoney.html?.v=3&.pf=banking-budgeting
What will save Christmas is less stuff, more relaxed time with friends and family, and a quality religious service. If there is something I want for Christmas, I have already bought it.
Ditto.
pssst…
Want to avoid our version of xmas?
Slip down under, Mexico way.
Wonderfully low key.
Easter is the big religious holiday there.
When I was a younger man I used to spend a couple of weeks in Mexico around X-mas. Unfortunately, I cannot give a recommendation due to the fact I can’t remember a thing about it. Ah, what fun.
For some reason, they think Easter is a bigger gig…
We celebrate the birth (big deal, we all get born) of somebody, by showering “baby” gifts upon one another.
The native Indians of the Northwest did this for a long time as well, it’s called a Potlatch.
http://en.wikipedia.org/wiki/Potlatch
They celebrate somebody coming back from the dead.
Sounds like a happy problem.
Why go anywhere. Mexico is already here.
i know where i go Christmas…Chinatown
Ringle bells, ringle bells… ringle awrrll the wrayyy.
I love that movie.
Gwynnster, you probably won’t see this ’cause it’s posted so late, but it’s actually “jingo bears, jingo bears, jingo arrr the way”, appropo to our current leadership, I think.
I agree - I’ve told my family that I will not be accepting gifts this year. I just want to relax, have a couple drinks, and watch the kids tear into the gifts. Adults giving each other stuff that they don’t want is stupid.
I just do Christmas for the grandkids . I don’t want anything for myself because I have already had everything I wanted in my lifetime .Maybe a bowl of fruit or nuts would be a good gift ,or a nice bottle of wine ,at least it would be something I could use .
Reminds me of my dear departed grandpa, all he ever wanted for Christmas was a jar of Macadamia nuts. He acted like you gave him $500 when he opened it
i celebrate festivus instead
I celebrate the Saturnalia. Right along with the birthday of my boy, the Big J, who doesn’t seem to mind if I spend time around bonfires before arranging the Nativity scene.
Do you and your family compete in the “Feats of Strength” and the “Airing of Grievances”?
Every single day, baybee. It’s Christmas all year round, for my clan.
Somebody can’t count.
There was the emergency .5% cut to the discount rate, then the scheduled .5% cut to the fed funds rate and the discount rate, then this .25% to each rate.
That is 3 times the fed cut rates, not 2.
11 of 18 in burn unit undocumented
The fact that 11 of the 18 wildfire victims lying in UCSD Medical Center’s burn unit are illegal immigrants with no apparent health coverage highlights the daunting financial challenge hospitals face in providing long-term, intensive care for all those who need it.
Is this not the greatest nation on earth?
http://www.signonsandiego.com/news/metro/20071031-9999-1n31burn.html
I wouldn’t blame the hospitals in this country if they just shut down. Then maybe people will see the results of condoned illegal immigration. The developers made money on the illegals, while the citizens and businesses provide benefits.
there’s that pesky “privatize profits and socialize losses” thang again. Damn!
yea, sounds exactly like Europe. Here too illegals get free healthcare, free housing, loads of other free goodies etc. without ever paying a cent for it. But if you are a legal citizen on low income the government will do everything they can to steal your last money - and for healthcare and many other services that you paid for you will have to wait until they are done helping the illegals (they usually get top priority).
Of course the real winners are the businesses (mostly agriculture and builders) that use the illegal low-pay workers to get even bigger profit margins while cheating the tax office.
Where are the Dutch illegals from? Eastern Europe?
“Here too illegals get free healthcare, free housing, loads of other free goodies etc. without ever paying a cent for it. But if you are a legal citizen on low income the government will do everything they can to steal your last money - and for healthcare and many other services that you paid for you will have to wait until they are done helping the illegals (they usually get top priority).
This is almost the exact scenario out here in LA-except that the illegals don’t get free housing but do cram 10+ to a house or apt. Everything else they get free-primary schooling complements of the LAUSD and the generous CA citizenrey who voted billons in bonds to build 20+ brand new inner city schools in the worst LA inner city dumps to provide free schooling for childen of illegals. Free Hosptal ER.
Free Use of roads and police/fire services payed by local bonds/ property owners. Clogging of courts and jails.
Heres another free benefit for illegals-they get to drive without insurance here in SCAL-the Law-abiding insured citizens foot the bill thru higher premiums -in part because of claims payed out by insurance companys because of illegal-alien auto accident fraud rackets.
This is a old broken record which i have played before but let me say that if you are a Law-abiding Citizen taxpayer here in CA/LA you get screwed by the system. If you are an illegal you can screw the system.
“Heres another free benefit for illegals-they get to drive without insurance here in SCAL-the Law-abiding insured citizens foot the bill thru higher premiums -in part because of claims payed out by insurance companys because of illegal-alien auto accident fraud rackets.”
Also a major problem in FL. They finally fixed it with revision of no-fault, but someone came out of nowhere and convinced the legistature to re-enact it via special session. I’m so pissed.
Dutch illegals: probably most of them from new/aspiring EU countries in Eastern Europe. Also many illegals from Africa, but I think we have less problems with them than countries like Spain/Italy where the numbers are really huge. Dutch situation sure sounds similar to what peter m describes for CA (of course political incentives for allowing this massive fraud are similar too).
RE: “Heres another free benefit for illegals-they get to drive without insurance here in SCAL
NY wants to give illegals driver’s licenses- a move supported by Hillary.
No shame for the politicos.
“NY wants to give illegals driver’s licenses- a move supported by Hillary. ”
They tried that here in CA-our progressive leftist legislature keeps on bringing up this bill for licenses for illegals and so far-cross your fingers-Arnold has vetoed it.
I went to war against this back in 2003 when then governor G Davis passed a law giving licenses to illegals. Wore out the keyboard with tons of faxes e-mails letters and CA did evict G davis from office and got Arnie in office who then rescinded the measure .
I will go to war again if any proposal to give licenses to ilegals pops it ugly head. I was one one of those who thru mulitiple messages to John and KEn show (AM Talk Radio Scal 640 3-7 pm), likely got them to hew a constant illegal -alien line.
An illegal hit my MIL’s car (in TN) while it was parked in a bank parking lot. Someone witnessed it and saw it was a guy who was working construction nearby. Police said nothing they could do, because he was illegal and didn’t have a license and insurance and also it was on private property. So needless to say, the inlaws had to pay to have it fixed.
This story x hundreds of times a day, countrywide=
the tip of the iceberg.
If these a-holes stole a thousand bucks from you, they’d go to jail. But shell out $500/1000 bucks for a deductible to fix damage caused by an uninsured driver? Not a problem.
Nobody does squat about anybody (illegal or not) driving around w/o insurance
“wouldn’t blame the hospitals in this country if they just shut down. Then maybe people will see the results of condoned illegal immigration. The developers made money on the illegals, while the citizens and businesses provide benefits. ”
This has been one of my peeves against the entire illegal immigration issue: here in LA 11 hospital trauma centers have shut down due to having to treat too many uninsured illegals. Martin Luther KINg Hospital, located in one of the poorest illegal alien overrun areas of the USA(Scentral LA, Compton)has completely shut down due in part to handling too many uninsured).
In CA by law hospitals/ER’s have to provide basic ER treatment to all folks regardless of ability to pay or if they have no insurance, and regardless of their legal/illegal status.
The LA County public health system foots a $400 million yearly bill for free medical services provided to illegals and uninsured green carders/uninsured children of illegals. THe taxpayers of the city foot the bill.
The way that Medi-Cal here is scammed and fleeced by low-cost clinics providing services to the undocumented and green Carders is a whole story in itself. CA is scammed out of billions each year through Medi-Cal fraudulent claims.
Have a good day!!
Locally here in the Central Valley of California
We continue to have problems keeping medical staff, from orderlies right on up to doctors~
They are being lured away to work in many of the fine prisons, that are nicely hidden away from your view, all over the place.
For a doctor, it’s heavenly…
Up to twice as much pay, and no malpractice insurance to worry about!
Meanwhile we the innocent, are a victim of “market” conditions.
It’s a Bizarro World, baby.
“CA is scammed out of billions each year through Medi-Cal fraudulent claims.”
Gee, maybe California should have a civil war, so the Feds could spend $2.4 Trillion building our hospitals, schools and paying for a private police force.
‘…Martin Luther KINg Hospital, located in one of the poorest illegal alien overrun areas of the USA(Scentral LA, Compton)has completely shut down due in part to handling too many uninsured).’
Well, they also shut down because they kept accidentally killing people and stuff, and eventually that brought them some grief.
“Well, they also shut down because they kept accidentally killing people and stuff, and eventually that brought them some grief. ”
Yeah, massive imcompetence there at MLK Hosp. MLK is/was located in one of the nastiest ilegal-alien.gang overridden slums in America just outside one of the most corrupt imcompetent cities in America(Compton). MLK has gone thru much legal problems, has been investigated by state and feds for those ‘accidental’ killings of patients by imcompetent hospital staff . Finally the authorities closed it down.
That entire area of SCentral LA is a nasty cesspool=a few b-52 runs and you would’nt know the difference.
Agreed Palmetto. If ALL the hospitals closed for even just a week, you’d see some movement by this country to get some containment on the illegal issue. BUT NOOOOOOOOO. Gotta help everyone, every where. That’s great, but it will cost you, and you, and you, and you the taxpayer, and me, and our children. Meanwhile, south of the border padre gets tens, if not, hundreds of thousands of free health care. Try that in Mexico or China and see what happens to your butt.
I call b/s on the illegal issue.
If you look at periodicals from 100+ years ago you’ll see that a lot of the exact same immigrant sentiments (”they’re taking our jobs!” “they’re using our community’s resources/ money/etc for free!”) are right there.
That’s how we subsidize cheap labor.
“That’s how we subsidize cheap labor.”
It’s the most expensive labor in the country…it costs you everyday in rising health care bills, local taxes, state taxes, fed taxes, welfare benefits, property taxes, jail and incarceration costs et. al.
Who cares about the taxpayer. It’s good for business (who don’t have to pay a red cent)! Isn’t that what makes this country great? Entrepreneurship?[sarcasm off]
Expensive to everyone except the employer.
“…The fact that 11 of the 18 wildfire victims lying in UCSD Medical Center’s burn unit are illegal immigrants”
My best friend Sam caught his PJ’s on fire playing with matches when he was 9years old…really, really bad scars all over his body…
I really don’t care about the “legal” status of burnt people in a US Hospital or the cost…because…you could total it all up for the last 50 years…and it would pale in comparison to the total $$$$$$$$$$$$$$$$$$$$$ US taxpayer dollars awarded to the corp likes of Halilburton / Carlyle / Blackwater for “no bid” contracts issued for these Legendary Wars in Afghanistan & Iraq
illegals getting “free” medical care… or… taxpayer Cash $$$$$$$$$$ for keeping Iraqi’s & Afghani’s from ruling the world… while we teach their children the economic necessity of having McDonald’s & Starbucks & a device that plays HALO 3
As Jack Benny once said while being held up by a robber:
Robber: “Your money or your life”….well?
Benny: “I’m thinking…I’m thinking!”
i thought is was “your money or your WIFE?”
I think it was “Your money or your wife”….Well?
“I’M thinking it over!”
Yes. Tough answer in one case.
So, America…
You’re down to your last card/s, in this house of cards~
Mr. McGuire: I want to say one word to you. Just one word.
Benjamin: Yes, sir.
Mr. McGuire: Are you listening?
Benjamin: Yes, I am.
Mr. McGuire: Plastics.
The graduate ?
I had to think about that one.
Is Countrywide talking to Countrywide?
Home is purchased for 420, about 415 is still owed. Countrywide appraises the property and agrees to a short sale price of 325. Ten days before escrow is due to close, Countrywide sends the following offer to the current owner/borrower/debtor:
“Our records indicate you may have up to $95,205 in home equity. By refinancing, you may be able to access a portion of this equity as a source of needed cash.”
Also, Countrywide holds both the primary and secondary liens (both the original loans) and both are in default.
Are different parts of Countrywide not talking or is something else happening here? Since when would a lender do a short sale on a property part of it thinks (wrongly, in this case as no buyer is willing to pay what is still owed much less 95K more than what is owed) has 95K in equity?
When $14K/year strawberry pickers can get home loans for 700K maybe nothing should surprise me, but still…
Welcome to Credit Suisse peak subprime reset month. And you thought yesterday was Halloween.
Got rate-cut?
I saw a “new and improved” version of this chart lately, but I cant seem to get my hands on it..
Goldman Sachs has the major resets beginning late 08 early 09…
This leads me to believe we may be perhaps 3 months from the actual situation…. when individuals start getting the 23A exclusion letter…We will all know more.
Im jesting of course, everyone here knows the resets are happening right now, and will continue for at least 18 months regardless of dialog between borrower with lender, and lender with bond market.
the fear is coming back, the euphoria will not.
The trend I see in my midwest town is small to medium sized used car lots closing with a seemingly equal number of pawn shops opening up. The Boomers liquidation of material things begins now.
In the original Conan The Barbarian movie an old king laments his prospect of spend the remaining days of his life alone with riches, “There comes a time in a mans life when gold looses its luster… and all that is left is the love of a father for his daughter” Is that called an epifianny? Can Boomers even have epifianny’s?
Yep, I’d call that an epiphany…
I’m surprised that the used car lots are closing; you’d think people would be trying to sell off their excess cars, and others would be more interested in buying used than new. However, maybe they’re just holding onto their old cars, instead. Hm.
Nice report Clark. I see this thing gaining momentum in NY and New England. Price drops are happening, though not substantial enough to forestall the inevitable.
In the little midwest town I live near, the drug store is going out of business while a cabinet maker’s shop just opened for business. Figure that one out.
Who quotes Conan the Barbarian? Please lay off the Ishtar quotes.
Robert Howard was a wonderful writer. It is no different than quoting Chaucer, Shakespeare, Ayn Rand or any other real and semi-mythological character. If the quote has value and is relevant, it does not matter if it was said by Goofy.
Max: “Why are you doing this to me, Dad?”
Goofy: “Cause, I don’t want you to end up in the electric chair.”
Agreed. A good quote is a good quote.
‘I really think I like avocados. No, wait. I think I like pineapples more’.
Erik Estrada, C.H.I.P.S.
See, like that.
Actually, I made that up. Sorry.
I think it was more like:
‘I really think I am like avocados. No, wait. I think I am more like pineapples’.
Actually, I made that up too.
The explosion in these predatory emergency lenders - paycheck loans, auto title loans, pawnshops, etc. - breaks my heart whenever I visit my parents in Alabama. One of the big streets there has one of these every block. When you consider that each store requires multiple tragedies per day to make money (which they obviously do) - that’s a lot of hurt. It’s been going on for a while - but I’m sure they will deteriorate even more now. I see a lot where I live in California but it’s not as prominent and painful - yet.
We were in Hurricane, Utah this time last year, and passed a pred joint, that had proudly posted in their window, an article from some SLC paper, proving that their rate of 365% per annum was the lowest in the Beehive State, amongst about 8 statewide lenders
The high end a.p.r. was 812%, up in SLC
I like Hurricane, UT.
Can you pronounce it?
When I saw one open in Sunnyvale (a “Check-in-to=Cash” place) I knew it was the beginning of end. Previously, they were mostly in south San Jose and on the East Bay.
I really don’t want to regulate what people do with their money, but maybe there should be a big sign in the window required by law showing how much a $400 loan will cost you if you roll it over for a few months.
Utah’s a bundle of drive-by riddles and is probably the most beautiful State overall, in the country…
Worth a road trip~
But you wouldn’t want to live there.
And I would know; about living there.
Truly, though, Utah IS beautiful. It is horrifying to see what this housing/credit bubble has done to parts of it. There are parts of Utah I stopped going to, because I simply and absolutely could not bear to watch.
I’m from the Midwest too and I also have seen lots of used car lots closing. Towns that would never even allow pawn shops and tattoo parlors have them springing up everywhere. I guess sell your stuff and get a tattoo as a momento. (You know a picture of your classic car, motor home, foreclosed house on your arm, just to remember) When we get a bar then I’ll know times are bad. We’ve been dry forever.
Plus Cash Advance and other check cashing services are everywhere now. Our small city of 5500 has 2 check cashing places and we don’t even have a poor area in town. Everything is small town middle class housing. Tells me we have some middle class people not quite living pay day to pay day.
I’m also in the midwest (SW MO) in a town of 7,000. There are 2 (maybe 3) payday loan places. Some of the local businesspeople are so concerned about this they are creating an alternative system of making loans. The attorney general of Missouri (Jay Nixon) has made payday loan interest rate regulation one of his main projects and a platform issue for his run for governor.
On one hand I agree that the interest rates (on payday loans) are sometimes usurious but on the other hand isn’t controlling them just more of the “nanny state”? If you want to (and are dumb enough) take out a payday loan at whatever rate why should the government step in? You don’t have to take out that loan. I’ve been wondering if the problem is that people don’t “pay” for their dumb mistakes anymore…they don’t go to the poorhouse, or get tossed onto the street, or truly suffer (e.g. go hungry) for dumb mistakes. And they keep having kids regardless of financial situation.
The price I pay for gas, doesn’t seem to jive with the current price per barrel of crude, worth around $95.
When it was $65, I paid $2.99 per gallon, now it’s 50% higher and I paid $3.39, yesterday.
Any oily types out there know what a barrel of crude has, in content?
I’m looking for the answer to this myself.
If I put my tinfoil hat on, prices at the pump will sky rocket after the 2008 election.
IMHO That’s easy … conspiracy till after the holidays. What would happen if gas was say $4 about where it should be relative to crude at 75. They will do everything they can to support consumer spending through the holidays. Then watch out.
A barrel of crude is 42 US gallons.
I said last week that gasoline would be much more if not for the fact that we have a democratic congress. Who has talked about windfall profit taxes. That has scared the oil companies and that is why gasoline is not as expensive as it should be.
BTW I use premium gas and I only paid $3.31 yesterday.
Sorry, your car does not run on oil. It runs on gasoline. There is no and never been a one to one correlation.
As far as democratic congress keeping the prices down, that’s another pile of BS. Even with Shillary spouting her idea of “nationalization” profits, everyone knows what would happen should it ever come to vote.
A barrel of crude is 42 US gallons, but only about 19-21 gallons of gasoline can be refined from it. The rest of that barrel (50%+) becomes some other petroleum product. It would be interesting to see if those products have had price increases to compensate for the smaller increase in gasoline cost.
I work in a factory. we do vinyl. Pool liner, Auto interior, Flooring and other items. YES YES prices are going skyhigh for the items we need. Resin, oils, additives, colors, most are petroleum based in some way shape or form. Some items we need are hard to get at times now on a regular schedule and/or in quantities needed. So R/D and production labs scramble at times to reformulate to use cheaper and/or available items. Rolling layoffs right now with possible reductions in the plant I work in. Word is if business does not pick up in month or two decision will be made about reductions and more permanent layoffs. Goody, just in time for christmas and the post-holiday bill paying season. In my house have always been cheap and crafty for christmas, will be more so this year. I wonder how many of my co-workers will cut back as well?
Another reason we should cut back on this ethanol boom and put some of that corn into bio-plastics. You’re exactly right - the costs of every plastic product have risen. Trying to save some $$, I bought the cheapest package of bottled water I could at WalMart, only to have a bunch of them bust on my arm when I was carrying them out to the car due to thin bottles.
Why buy bottled water? Tap water is better in most places, and it doesn’t have the nasty chemicals that leach out of those plastic bottles. If you’re living in a place with truly bad water, you should be agitating for a decent municipal water supply. Even if the tap water is bad you’re probably better off treating it yourself with filters.
The barrel of oil is 42 gallons, but there is a volume expansion in the processing, yielding about 48 gal of product. Volume expansion is easy money since the products are sold by the gallon (in the US). Half of that ends up being gasoline, more or less depending on what’s in demand. Add some ethanol and you get more like 25 gal of gas from a barrel of oil.
Something is wrong here. If I buy oil for $100/barrel, and can only get 20 gallons gas from it, then I have to sell it at $5 to break even, not including refining and transport. Somebody ought to be losing money, not making profits. What am I missing???
The fact that you can also sell the gasoline byproducts of the fractional distillation.
If you have looked at earnings recently, refiners are getting dinged pretty good due to the high cost per barrell of oil and the low cost of gasoline. I’ve heard that one of two things are going to happen soon: oil down or gas up. What do you think is going to happen?
Well theoretically, since it all gets made into SOMETHING, the difference between the prices of what gets distilled from crude should depend on the demand elasticity. If the demand for say, Tar is much less elastic than the supply for gasoline, the price of tar would change more than the price of gasoline. They’re not going to throw away the tar because people want more gasoline.
A barrel of crude has 42 gallons. After it is refined the total amount of product is greater than 42 gallons because the lighter refined products have a greater volume. The exact amount of the expansion depends on the grade of crude and the refining process and the products produced.
The difference is the crack spread; the refiners have not passed along the price increase of oil yet, but they will.
Oil is to us, what Bread was to a late 18th century Frenchman…
Why would any good American capitalist not raise the price, to it’s true price level, immediately?
Let them not eat price increases?
talking about bread (and potatoes) in the 18th century, wasn’t that where the French Revolution started?
Because oil consumed by oil companies is largely hedged. Until they hedges unwind the price refiners pay for oil is not the current spot price.
How much lag time?
I never got the impression that prices charged at the pump have any relation to real cost for the producers; they simply charge what they can get away with. I think there might be some political pressure at the moment to keep the prices at the gas pump a bit lower than they should be based on the fundamentals.
Wholesale gasoline is up about 35 cents in the last month. We should be over $3 in the national average pretty quickly. Right now heating oil/diesel is 25 cents above gasoline. It’s seasonal - gasoline next summer could get insane.
How much lag time?
I’m shooting in the dark here as I no longer play with the software platforms that are used to do it… A few years ago the mean was longer than a quarter to allow companies to issue financial guidance.
The solution, renounce US citizenship and become an illegal. IT pays
“The difference is the crack spread;…”
“Crack Spread” Sounds like a Rap Title
The cost of crude is only a function of the cost of producing gasoline. The costs of refining, transportation and trade of gas have stayed relativily the same. We pull 20 gallons of gas out of a barrel If the barrel raises by $10 the cost of gas should raise by fifty cents.
But I’m still not sure why it hasn’t skyrocketed the past month.
You win the kewpie doll.
Good info!
Around here it just jumped 30 cents so maybe it’s catch-up time now.
I do the books at a station…prices at main terminal hiked $.10 yesterday night. When prices are rising look for a low volume station that is slow to match the street.
Look at Exxon’s earnings. Before, gas prices would have skyrocketed. So why haven’t they? Could it be a conspiracy to keep gas prices in check until the FED cuts rates?
Read SEC filings of oil companies or airlines. It is all spelled out there.
RE: But I’m still not sure why it hasn’t skyrocketed the past month.
Tin foil hat time.
The fix is in.
Supplies are bein’ taken from US strategic reserves because of the upcoming elections.
Incumbents are terrified of a riled up consituency payin’ $5.00 per gallon for gaz.
Whew…$150.00/$200.00 to fill that big ‘ole 35/40 gallon Chevy suburban or quarter ton GMC.
Gives me shivers just thinkin’ about it.
There are 43-44 gallons of products made out of one barrel of oil. With a good crude & intense cracking, 25-26 of them will be gasoline. The other 18 gallons is everthing from diesel to asphalt to plastics to food coloring. Right now, gasoline is at 2.30, oil at $94. Refiners margins are the worst they’ve been in a long time - but that can turn on a dime.
The price everyone is bidding up is spot market futures. If you’re not buying on spot and your a producer you’re not paying that price and your costs of getting the pdt to market is not influenced by spot. But you will charge what the market is willing to pay, right now consumers are willing to pay 3 USD/gallon of finished pdt. If a refiner has to buy on spot to meet demand then you’ll see prices skyrocket. Spot has little to do w/ big oil pricing, its all just a big marketing myth to justify price gouging.
One more point–we don’t buy all of our oil at that price. Half of our consumption comes from oil drilled by the oil companies, not purchased.
It’s disinflation. Refiners across the globe are absorbing the costs. Most are reporting smaller and smaller refining margins. Plus, there is politics, lots and lots of politics.
Nov. 1 (Bloomberg) — Crude oil’s surge beyond $95 a barrel and a lack [shortages] of diesel and gasoline forced the Chinese government to reverse a decision not to increase fuel prices this year, JP Morgan Chase & Co. said.
…
China unexpectedly increased fuel prices by as much as 10 percent effective today in what the government said was an “urgent step” to help the nation’s oil refiners cover rising costs as crude touched records above $96 a barrel. The country is the world’s second-biggest energy consumer.
http://www.bloomberg.com/apps/news?pid=20601089&sid=aYcutyIM5jRM&refer=china
As others have noted, oil has 42 gallons of crude. From that you get about 1 gallon of chemical precursors, 20 gallons of gasoline, 15 gallons of distilates (Diesel, heating oil), 5 gallons of fuel oil, and 4 gallons of tar. When a barrel of oil is refined you end up with more products than you put in.
There are three main reasons the price of gas fluctuates from the price of crude.
The first is that crude is priced by WTI, which is about the easiest to refine oil, low in sulfer, and light (or low viscosity). Most oil produced today isn’t WTI, but very old refineries can only used light grades of oil. So the price for other grades of crude can be much lower.
The next is chemistry, those amounts can vary a little but basically that’s what you get when one barrel is distilled. So if there’s a change in demand for one of the products other products will be made when that demand is filled. Currently the squeeze is in distilates, as trucking hasn’t fallen off too much, but a certain amount of heating oil is needed at the start of each winter.
The last is refining capacity. Globally most oil is shipped as crude and refined close to the end user. There is some trade in refined products, but it’s not very comparable to trade in crude. It’s expensive to build new refineries (especially in the developed world where location can be impossible to find). As a result capacity is very slow to respond to demand (and because the market isn’t as developed it’s costly to ship gas post refining). So when demand for total refined products exceeds capacity refining margins shoot up (this can be pretty substantial).
To come up with the oil price in gallons divide the price of a barrel by 42. Currently this is about $2.25 wholesale. Refining margins right now are fairly tight for gasoline, but they were very high early in the summer instead of being a nickel a gallon they were more like $1-$2/gallon.
Great info…
What happens to the “tar”?
tar = asphalt
roads, shingles, carbon black
One factor earlier this year was that a lot of refining capacity was offline, allowing those still running to charge large premiums. As far as I know all the majors are back to normal capacity.
We haven’t had any extreme weather or disasters in the Gulf lately.
Those of you working with the oil refining industry might note that this year there have been no major hurricanes disrupting US refineries, nor have (thankfully) there been any big blowups at refineries.
Hence, unlike in some previous years, there could well be more refining capacity in actual operation in this late summer/autumn than other years. This is good for drivers, not so good for refiners’ margins as they need to compete with each other on price.
In Eureka, CA, the oil/gas ratio has been even more lopsided: at $70/bbl retail gas price for octane 87 was $3.79; now at nearly $95/bbl, it is $3.39.
Are you taking into account the time of year? Last year at this time gas was down from summer highs almost to $2.00/gal. So, gas is 50% higher.
One more comment from Massachusetts. A story in today’s Boston Globe about raging home heating oil prices.
Local fuel-oil dealers buy in the same markets as global hedge funds, lightly regulated investment vehicles that use complex strategies to boost returns for wealthy clients. Before hedge funds poured into energy markets, dealers say, they could reasonably forecast prices based on fundamentals like supply, demand, and weather. Then they would put together a mix of futures contracts, which guarantee prices several months in advance, and spot purchases to offer fixed rates to customers without risking their business.
Now, local dealers say that strategy is too risky.
“How do you explain hedge funds to Mrs. McCarthy?” Melia asked.
The poor, who spend a higher share of income on heating, will bear most of the pain, economists said. Though prices have soared, federal fuel assistance has declined. In 2005, when the average price of heating oil in Massachusetts hit $2.49 a gallon, a family of four earning $21,000 qualified for about $1,100 to help cover heating bills, according to Action for Boston Community Development, a nonprofit that administers the program locally.
http://www.boston.com/business/globe/articles/2007/11/01/heating_oil_users_face_costly_winter/
Hedge funds rake in the cash on commodities trades while the poor and middle class (soon to be poor) shiver and cut back on food for their kids. Fed lowers rates to stoke even more inflation and grease the wheels for even more wealth transfer. What world are we living in?
This economy is morally bankrupt.
It’s funny how many people who sincerely care about the poor don’t know a damn thing about inflation and its disastrous effects.
Who are those people “who sincerely care about the poor”?
“Who are those people “who sincerely care about the poor”?
I see them every day. the guy who throws the dollar in the poor mans cup. the woman who sits and talks with the mentally ill person on the street. the worker in the soup kitchen who volunteers. the person who delivers food to the house bound sick and elderly. the people who help build homes for Habitat for Humanity. They are all around us, countless unsung heroes, generous folks-all across our land.
Exactly! Not one of those you mention is in government.
Ok. but the need is not being met. (dare i say the word) We COLLECTIVELY should be as the Constitution indicates ‘promote the common good’ by taking care of the 35 percent of our kids who go without health care and the mentally ill who roam our cities in rags. It’s a matter of priorities. Frankly taxing the corporations fairly, and limiting salaries to CEO’s is where I would begin. I’d zero in on them weapons makers next and slash ‘em. That’s where I stand on it. Just my opinion.
Melvin, Melvin, Melvin…
How terribly unJohn Galtian of you.
Cheap fossil fuels is the problem, not the solution. Every time people start conserving or investing in alternatives the price goes down. Every time the price goes down, the market disinvests in alternatives and consumers go back to wasting fuel. Next thing we know, OPEC has us by the balls again, and prices soar.
Or we have an explosion in the size of homes and personal transportation. One would think that the 1970s taught us something, but nope.
Cheap fossil fuels is the problem, not the solution.
Yes.
I firmly believe that a significant and persistent rise in fuel costs — though it’ll cause a lot of short-term pain — will be a long-term boon to this country, kickstarting conservation on the consumer side and innovation on the energy supplier’s side. High gas prices (eventually) will have a transformative effect on the industrialized world. We have yet to reach the tipping point, as you’ve noted.
“Fed lowers rates to stoke even more inflation and grease the wheels for even more wealth transfer. What world are we living in?”
It’s the new reality Craven. Where war is really peace, spending is really saving, harming is helping, anger is kindness.
Welcome to 1984. 50% wanted it, now they got it.
more like Brave New World (1932), except that the Ministry of Truth (BLS/Eurostat etc.) sounds very familiar. Quote from Neil Postman:
What Orwell feared were those who would ban books. What Huxley feared was that there would be no reason to ban a book, for there would be no one who wanted to read one. Orwell feared those who would deprive us of information. Huxley feared those who would give us so much that we would be reduced to passivity and egoism. Orwell feared that the truth would be concealed from us. Huxley feared the truth would be drowned in a sea of irrelevance. In 1984, Orwell added, people are controlled by inflicting pain. In Brave New World, they are controlled by inflicting pleasure. In short, Orwell feared that what we hate will ruin us. Huxley feared that what we love will ruin us.
Nice contribution, nhz. The golden handcuffs are the strongest shackles of them all.
Orwell feared that the truth would be concealed from us. Huxley feared the truth would be drowned in a sea of irrelevance.
Seems like they’re both right.
How apropos. We are indeed amusing ourselves to death. I do miss Neil Postman. What would he be saying about our society today? (Besides “I told you so.”)
kids and adults are obese in America anyway. They need to eat less. Higher food prices may solve the obesity problem in America.
Not likely. People will substitute healthy, but pricey, food with cheaper food that is mostly empty calories. Out with veggies and fruits, in with Mac-n-Chesse and soda pop.
not likely either…the cheap stuff is going up in price because the price of corn has been rising. Since everything is laced w/ high fructose corn syrup, the price of even the cheap stuff will inevitably have to rise. the story behind ethanol is that is driving up food prices. This is why prices of the stuff at Trader Joe’s and other alternative stores has remained relatively stable. The paradox is the cheap food will actually catch up to the price of the higher end quality food. All things being equal, people will be forced to eat less.
So a box of Mac-N-Cheese goes from 70 to 90 cents Or more). Its still cheap compared to good food.
The problem is not the amount of food we eat, but the quality of food we eat. If higher food prices affect fruits, vegetables, legumes, and low-fat meats more than they affect processed junk, obesity will get worse, not better.
“Higher food prices may solve the obesity problem in America.”
I kinda doubt it. The cheapest foods at the grocery store are often the unhealthy foods. You can thank sugar subsidies for that one.
Now if high food prices encourage more people to grow their own fruits and veggies, that might make a difference. But most people will not take on the task.
Sugar subsidies?
Think corn subsidies. We should be so lucky to get real cane sugar in our processed food — these days, high fructose corn syrup is the big player in the obesity game.
Exactly my point. With the demand for corn based energy products going up, it will have unintended consequence of driving up corn based foods which is nearly everything at your local grocery store. If prices of these products rise enough so that they are on part with healthy foods, then all things being equal, people will pick the healthier choice or just be forced to eat less since their incomes aren’t really keeping up with inflation.
Mexican Coca-Cola ftw!
That’s a big assumption that quality food won’t go up in price.
Florida’s foreclosure rate amounted to one filing for every 95 households, RealtyTrac said.
1 in 95
can someone compare this to 1991 or 1931 ?
Superstar realtor found murdered. This is getting ugly.
A woman who helped pioneer the punk music scene, influenced the careers of Madonna and the Ramones and went on to become known as a real estate agent to the stars was found bludgeoned to death Tuesday night in her apartment at 965 Fifth Avenue, the police said yesterday.
NY Times: http://tinyurl.com/3c6tcb
beat on the brat,
beat on the brat,
beat on the brat
with a baseball bat
oh yeah, oh yeah
“Notices of default, issued if a borrower stops making payments, also jumped from 290 in third-quarter 2006 to 581 this year.” “One member of the community group ACORN, Estela Baldovinos, told the board she went from paying $2,700 a month at 6.5 percent interest in 2004 to facing a payment of $8,200 at 12.5 percent interest next month.”
This was in the last Post from yesterdays blog.
Her oustanding balance went from about $415k to 770k in three years! WTF did she do? And now poor little me. She needs to be held accountable for what she did!
WTF did she do?
Sounds like one of those “make your own candles” schemes.
Consumer Liguidity for FBs:
1. Tapped out
2. Maxxed out
3. Equity? What equity?
4. Ring..ring..ring.. um Dad?, can I borrow money? click…
5. Ring..ring..ring.. um Bro?, can I borrow money? click…
6. Credit Card Application- “You are now approved for a $500 credit limit at 45% APR” YES!
Yesterday the Fed’s move seemed wrong to me, but I could at least see the reasoning behind it. On this blog there was a lot of toilet humor about Bernanke and Paulson and I think that is an ineffective way to disagree with bad policies. If you care you then you be trying to be reasonable and engaging in order to build support instead of petulant and childish thus driving people away. Toilet humor gets old and stinky very fast, so could we maybe just flush it?
There was a claim on the California thread that open space preservation was about pressing values up. The USGS has had proof otherwise for more than a decade now. If it matters and there is good data on land use patterns and their implications then isn’t it obvious that shooting from the hip is not a real way to influence policy?
The San Mateo County hold request got derided angrily, but people here should be glad. There was a political uproar, and the Supervisors admitted they couldn’t really do anything in a way that diffused political tension. You should have seen the video of a room full of emotional people petitioning the Supervisors. At some level they just wanted officials to acknowledge their pain or whatever. Yeah, that is insufferably lame, but what people here seem to be advocating is shouting “Ha, ha, you are loosing your home!” at a room full of very upset people who’s lives are coming all undone. Blame games are huge fun, oh boy, but in the real world angry crowds have to be handled or deflected in some way, and someone is going to end up being elected Supervisor. Will the new Supervisors be the kind who pass “so sorry, we can’t do anything for you” rules like this, or will they be from the angry crowd and throwing wrenches in the works for real?
The lesson of the bubble is absolutely not, not now and not ever, that emotionality and simplistic analysis prevails. What wins out in the end is the most realistic and balanced approach. Even if you are right you must not only show that you are right so clearly that dummies can see that, you also have to kindly repeat arguments from various points of view the same way feeding a baby may mean giving them the spoon over and over again from different angles.
“you also have to kindly repeat arguments from various points of view the same way feeding a baby may mean giving them the spoon over and over again from different angles.”
yeah, because FED believers and FB’s have zero intelligence … I tell you, it will not matter from how many angles you try explaining the lunacy in the B-52 logic. If people want to believe in fairy tales (like Goldilocks or The American Dream) it is their choice; it might prove to be a nightmare instead, but it was their choice so no need to complain after the fact.
Right, you are trying to feed nuanced argument to a populace raised on Southpark and the Simpsons.
I’d rather have a populace educated by _South Park_ than by the MSM or ivy-league pinko professors.
“Kill the wise one!!”
And if they get sick of that, they’re educated by Paris Hilton and Pamela Anderson. There is always a difference between intelligence and wisdom and unfortunately, the populace doesn’t understand the difference.
I might concede that TV is dumbing us down; however, I’d say that Southpark and Simpsons are a bit more nuanced than The Dukes of Hazzard or That Girl.
Roscoe P. Coltrain
I dunno, both the Simsons and South Park show a lot more ‘truthiness’ than most of the MSM.
Great post. I think it will be fairly lost on this blog tho, simple emotional responses abound here. Joshua tree anyone? or can I interest you in a trout? how many different derisive variations exist on Greenspan alone?
Right, JP. It was a simple emotional response by me when I told my wife we wouldn’t be buying an SFH in 2004 because they were priced crazy and the rent/own numbers made no sense. We had a combined six figure income and a newborn baby and so it was an emotional response to NOT BUY A HOUSE, when all our friends and peers were stretching to buy at that time.
It was an emotional response to buy a 4-family that actually cashflowed, live in one unit and rent the rest out during the height of the boom, right? It may wrong to celebrate another’s misfortune, but their misfortune means my family’s prosperity and hapiness in the near future re affordable house prices. It means my family’s DELAYED GRATIFICATION and sound FINANCIAL PLANNING will pay off… so yes I will laugh when someone derides Greenspan or Ben B. and the jackasses who pull the FED’s strings on Wall Street. I will laugh at the FB’s and “investors” getting wiped out because they gambled and lost and I will love every single minute of it.
I humbly disagree. Although many use disparaging language with regard to Mssrs Greenspan, Bernanke, Paulson et al., the general tenor of the site is significantly above such mundane opinions.
Many of the emotional responses are justified. People want a measure of financial stability to make a decision regarding the purchase of a home not a house. Instead after a mere few days on this site, questions of the stability of the US and the multi tiered system on which our economy functions become readily apparent. That there are open and public debates such as in San Mateo does little to help somebody in financial jeopardy and is a canard. I truly question the motives of any individual running for political office (with the exception of Dallas prior to the Supreme Court ruling that said the city of Dallas must pay a salary).
I do dislike emotionally charged words, but after 30 years of lies I can understand it.
too bad we don’t have Joshua trees in the Netherlands; we could use some, especially near the International Court of Justice in The Hague.
I see plenty of rational, reasoned, well-informed analysis here on a daily basis.
Then again, it’s a blog, not a symposium. It’s informal by its very nature. If you want dry analysis and unemotional responses, that’s best found elsewhere.
When the Fed is in the process of using poorly-understood dilution of the currency to engineer a mass wealth transfer from Main Street to bail out bad Wall Street bets, toilet humor and other forms emotional venting are warranted. Take your highfalutin analysis and stuff it where the sun don’t shine.
Mole Man,
I do not think that cool heads will prevail as this unwinds. It isn’t lack of intelligence that most people suffer from, it is Denial. Denial has nothing to do with intelligence. Denial is an obstacle to self correction and it cannot be overcome by external reasoning, only by painful injury. The FB cannot accept that they have done this to themselves, they must blame someone else with all their strength and anger, until reality finally whacks them over the back of the head.
good point; I’m glad guns are illegal in the Netherlands, because I think the average Dutchie will be a very unpleasant person when the home equity magic stops working.
nhz…
That’s the question that nobody wants to talk about~
There will be 10’s of millions of easily concealable handguns, in the hands of the newly homeless, over the next few years…
Uh, where to start.
1. You begin with “I could at least see the reasoning behind it.” The only reasoning behind the Fed decision is that it provides a crutch for the investment banks who can now borrow cheaper. Thereis NO sensible reason.
2. The USGS data is disputed. If you’re going to quote one side provide both sides.
3. People should be glad because the San Mateo board caved in to people who - like the person quoted - must have increased her loan from $425K to $775K, probably by HELOC, and then complained about it? The actions of the board were capitulation in a manner that assured nothing would get done. They knew their action was not binding on anyone. They also knew that most people realized that. They did it anyway, to give the appearance of ‘doing something.’ The Fed has cut rates now two times to give the appearance of ‘doing something.’
There is a serious problem… a problem which may shove our nation into a depression. We don’t solve the problem by giving an appearance of ‘doing something and then doing nothing. I’m not suggesting there is anything we can do, but just maybe it is time for the Fed or the Treasury Secretary or the President to simply say, “Hey, people. We - all of us - made a big mistake and now we’re going to have to pay for it, and there is absolutly nothing the Federal government can do about it. The only thing that will work is for the system to rid itself of the excesses.
By the way, the toilet jokes which so offend you derive from the actions of the above mentioned people. Perhaps it’s telling that the natives - who do understand the problem - are getting restless.
All in all, you might want to consider lightening up a bit, skipping the comments you don’t care about, and stop trying to change the hearts and minds of those who abide here.
“Toilet humor gets old and stinky very fast, so could we maybe just flush it?”
Ummmmmm, no. The only thing that has enabled most of us to carry on through this mess is the ability to laugh at ourselves and others. You need to lighten up Senor Puckerbutt. Go get drunk or laid, or both. Get naked and laugh at yourself in the mirror. Fart in a crowded elevator. Do something soon because I’ve seen the plight of those who suffer from acute puckerbutt syndrome. It’s not pretty.
You should be a lobbyist, Mole Man. You seem to know how people think. Except you seem kinda grouchy sometimes.
Personal Experience Note-
Visited with family friend of inlaws. Retired with cash in the bank, owns 2 houses. Asking 300k for little tiny 900sq.ft. place. “I won’t drop my price because ‘joe’ down the street got $325k two years ago.”
– I should note that this guy has 800k in the bank, state pensioner and monthly social security, owes nobody, 80 years old and failing health, uneducated, and doesn’t need the money but knows he doesn’t need 2 houses. Clearly, it is a pride thing with a certain segment of those who don’t have to sell.
The fear of “giving it away” is a powerful fear. Anyway, his heirs might be more open to a quick sale.
Home ownership is heavily tied up in self worth and social status for most people. If he “gives it away” that means that he lost to some other player and lost social status as a result, at least in his own mind. I think most financially bad moves come from letting ego get in the way of math.
Looks like the market is going to get pounded at the open. Good thing we have restrictions on program trading and the uptick rule in place.
Guess my puts will revive. I actually think I got it right yesterday a.m. 25 bps and no guarantee of any more.
I think if things get bad enough they will be forced to cut again in December. These fools have proven they don’t give a damn about inflation since their definition of it doesn’t include “volatile energy or food prices.”
Lot of damage can be done between now and then ;_)
Doubtful, they are done.
Emergency cut will be forthcoming, maybe next week, if the financials continue to implode. Housing crash is now a sideshow. Are we in the midst of a systemic financial collapse? Moving liquid funds from Etrade to BAC then cash, au and treasury direct now. Why take chances.
They can’t really let the system collapse. The regional banks will continue to provide liquidity as necessary in order to ensure there isn’t a panic. Just expect higher inflation and maybe hyperinflation followed by a deep recession. Its amazing how even economic systems follow the rules of nature. right now we’re in a bubble that keeps getting more air pumped into it..eventually the bubble of debt will have to collapse. Just a matter of when not if. I expect a massive selloff at some point say 10-20% down as an indicator that the bear market is here and economy is in recession. There will be a lot of pain but these are usually the best times to invest in equities.
Yippee! It looks like the Dow has fallen off a cliff.
Check out the put/call ratio for XLF, Jan 09. I have some, figured puts expiring on the other side of the presidential election might have some bang for the buck.
how is this different from any other day that started down big ? Has anyone else noticed the 2pm money drops from the Fed the last 2 months ? Oddly enough 2pm is also when they issue their FOMC statement.
by the way check out the banner on the Federal Reserve’s new homepage. The quote on the masthead is one big lie.
From the New York Sun:
“The fact is that the value of oil has been remarkably steady against the most venerable measure of value — an ounce of gold. In January of 2001, when Mr. Bush acceded, a barrel of oil was selling for 8.25 100th’s of an ounce of gold, and today it is selling for about 8.32 100th’s of an ounce of gold. In other words, instead of tripling in the past 7 years the value of oil has barely budged. What has budged — if that is the word — is the value of a dollar, and it has gone through an astonishingly rapid collapse.”
http://www.nysun.com/article/65703
The problem with the gold standard is that gold has no actual economic value, and is diminishing in scarcity. Oil has value, and may be about to become more scarce. So if the dollar was backed by the Strategic Petroleum Reserve, they wouldn’t be able to inflate, or the reserve would be emptied.
Oil & Gold are all you need to follow, to show you the money.
Forget M3, gdp, employment, et al
Value has two components, use-value and exchange-value. Both of them are obviously subjective since any value is dependent on each individual at each specific instant in time.
Gold to me was not worth $300 six years ago, but it was to someone else. It is worth more than that to me now, but obviously not to you.
The price of something is simply a rough determination of what a very large number of folks think the total “value” is.
The fact that gold hasn’t had much interest affecting its exchange value for the last 36 years has surely had a dramatic impact on its price (due to the exchange value dropping rapidly). This same phenomenon is happending to the Fed Note. It’s use-value is obviously very small, and we’ve been witnessing its exchange-value dropping rapidly.
(This same phenomenon is happending to the Fed Note. It’s use-value is obviously very small).
If this keeps up it will have use value as wallpaper.
NYC became the world’s financial capital when the U.S. became the world’s biggest creditor. Foreign firms listed here to tap our savings. Well, the only way NY will retain that role is the way London has gotten it back — by attracting the people with money, who aren’t from the U.S. anymore.
Nov. 1 (Bloomberg) — Citigroup Inc. may have to cut its dividend, raise cash or sell assets to raise more than $30 billion to shore up its capital, CIBC analysts led by Meredith Whitney wrote in a note to clients dated Oct. 31.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aN7OpI2yLm2g&refer=home
I believe Hoz has raised the issue of dividend restrictions on banks due to impaired earnings. Something to consider going forward.
dividendend?
My better call was Smith and Wesson. Or at least it was faster. Not sure if banks won’t go down a greater percentage.
“…sell assets” relate to this:… “has given storage tank owners a financial incentive to sell their oil”
Now for the HBB quiz of the day:
1. Who “owns” the crude oil “storage capacity” world wide?… Hint: it’s NOT the oil companies!
Cushing supplies have been under pressure in recent months due to differences in the price between front-month oil contracts and those for delivery in future months. This price difference, or spread, has given storage tank owners a financial incentive to sell their oil, rather than hold it in inventory. Analysts have also blamed falling Cushing supplies, in part, for the rally in which oil prices have jumped 35 percent since August.
“It’s all about Cushing,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Ill., “That’s going to just keep … investment capital roaring into this market.”
http://biz.yahoo.com/ap/071031/oil_prices.html
Dateline 2022: The Fed today surprised the financial world by slashing its main inflation fighting interest rate by a nearly unprecedented 2% today. Sources say that this was due to a large drop in the SPI - the secret Fed “Single Product (Inflation) Index”. Honed after years of research, other sources claim the (secret) single product measured by the SPI had previously remained predictable and very controllable for over 10 years. They are at a loss to explain the SPI’s surprise downtick.
In local news, the Missler Manufacturing Company, Missler, Kansas, has dropped the price of their “Widget Maker” line of machine tools for the first time in 10 years. “The “Going Out Of Business” sale at the MMC is a sad event for the community and manufacturers everywhere (all 4 of them) that depend on the Widget Maker Deluxe 2020.”
the secret Fed “Single Product (Inflation) Index”.
HD TV’s?
Well, financials are taking a real dump this morning. I just levered up the SKF. Wish I had bought more, but it’s never too late. How’s that “kitchen sink” theory working out for you??
kitsch-and-sink
So sweet. I doubled up on SKF yesterday. Unfortunately, double of small is still pretty small.
The major stock indexes are bernaking all over the place.
As the Fed cuts, gold rises, oil rises, exchange rates soar, and the stock market rises-or used to. The “Dow” is down 200 this morning, bringing to light the impotence of the Fed to control things anymore.
When the financial markets no longer respond to the rate cuts, what more can the Fed do? Continue to pull things down around it in an increasingly fruitless and desperate attempt to pull itself out of the quicksand?
Bernanke is convinced (more) free money is the solution for every economic problem. He will stay the present course until he is removed from office (which probably requires a lot more turmoil in the markets; I think up to now his masters are extremely satisfied with the outcome).
No worries — the DJIA has already hit its usual maximum 2 percent loss on selloff days. Traders can rest assured that it is time to buy the dip now.
Reading this article in the LA Times back in April 2005 was what finally made me wake up and realize the bubble for what it was and led me to this blog (Thanks Ben!). I have had “November 1, 2007″ and this girl’s day of reckoning in the back of my head for 2 1/2 years! And I’m so relieved that this kind of article would (hopefully) never be written in such a “glass is half full” way today.
Some homeowners may be on borrowed time
Adjustable-rate ‘interest only’ loans are a ‘buy now, pay later’ strategy
By David Streitfeld
Los Angeles Times
Hoping for Low Rates: Rachael Herron holds her cat Adah in her recently purchased condominium in Oakland, Calif. As long as the interest rates stay low she is in good shape. If they rise, she might be in trouble financially.
OAKLAND, Calif. - Rachael Herron’s new condo will assure her financial salvation - unless it provokes her ruin.
Herron put no money down for her tidy one-bedroom, borrowing the entire purchase price of $211,000. To keep her monthly payments as low as possible, she got an adjustable-rate mortgage that won’t require her to pay any principal for three years.
Thanks to her “interest-only” loan, the 911 police dispatcher was able to afford, barely, her first home. She now has a stake in California’s sizzling real estate market. As her home increases in value, she plans to use some of that equity to pay down her credit cards.
But Herron is also setting herself up for a day of reckoning: Nov. 1, 2007.
http://www.amarillo.com/stories/040905/bus_homeown.shtml
Looks like she got married-
http://www.knitoneone.com/teachers.html#rachaelherron
OT Texas Chick, Need family law attorney in Austin. A really good one.
Daughter, new baby, no marriage, custody fight.
Give me an email address to send you info.
Hey Txchic,
What plays in Texas…stays in Texas!
Texas town up for sale on eBay
http://news.yahoo.com/s/ap/odd_town_for_sale
I recommend strongly getting a lawyer referral from somebody you don’t know, who probably is a 17 yr-old boy in Waco, and enjoys talking on the phone, signing yearbooks, and throwing rocks at cars.
Gee, I hate it when I get outed like that.
LOL
Second.
Mellow Yellow’s like a cat on a hot tin roof, today.
As I look at the market this morning, I think we should set aside the cynicism that sometimes permeates this blog and observe a moment of respectful silence for all those who bought CFC at 17 last week.
40% of the S&P 500 is finance. That should give one a decent sense of direction of how screwed we are. I will observe a moment of silence for the shuttered manufacturing facilities littering the cities.
Hoz…
In a mythical death pool, which financial titan goes down last?
Goldman Sachs Group Inc.
85 Broad Street
New York, NY 10004
No other financial institution has placed as many people in government. Not a good thing.
I guess the revolving door between GS and top positions at Treasury makes it much easier to twist BB’s arm into putting Wall Street interests first.
Dollar Ben
Word Count: 824
Watching the U.S. currency continue to decline in value, our irreverent friends at the New York Sun have stopped referring to the dollar. They now call it “the Bernanke,” in mock honor of the Federal Reserve Chairman who is presiding over the greenback’s plunge. With another rate cut yesterday, Ben Bernanke and the Fed are continuing to act as if they like the Sun’s moniker.
http://online.wsj.com/article/SB119387944491678507.html?mod=opinion_main_review_and_outlooks
The Bernanke
New York Sun Editorial
October 19, 2007
http://www.nysun.com/article/64914
OK! I must have missed a day here because there’s an “in joke” I’m not getting.
I know all about Suzanne (she researched it!) and feeding the squirrels, but can someone explain the “Joshua Tree” thing?
Thanks!
IMHO there is nothing the Government or related entities can do internally to prevent the credit bubble collapse (including the housing bubble). My thoughts are externally can the US do something to reflate the bubble. e.g. Germany after its reunification lost 10 years of productive GDP by raising the standard of living of the former German Democratic Republic, the US was a beneficiary of the reunification. Is the US now willing to cede moral standards so that the Democratic People’s Republic of Korea (North Korea) will reunite with the Republic of Korea? This would cost trillions of dollars and the US would be a major beneficiary (albeit short term - 10 years). If they reunify in 5 years, the major beneficiary will be China.
I hypothesize that the direction the US government will take will be towards reunification of these countries over the next year. This will be done solely for the purpose of reflating the bubble. Moral consequences be damned.
There is.
1) If you stated on a loan doc that you make X then you get to file X on your taxes.
2) If you buy a house for Y then your house value for tax purpuses must be set to be Y.
3) No bail-outs… Let the lenders and investors that did not do their job get wiped out.
#1 is completely fair! I’m shocked that no politician has dared to mention this (despite all the letters I’ve written.) It’s a great source of income
#2 isn’t quite fair, especially for people who bought houses they could afford.
but a good way of collecting from people who “overbought” is to start eliminating the mortgage interest deduction from people with second mortgages, HELOCs, and/or who have no equity. (They should eliminate it across the board, but the least controversial way to get started may be to eliminate it if you have any second mortgages or lines-of-credit on your home.)
I think #2 is a great idea because of a very simple thing - buyer -valued- house at X. That’s why he/she paid X for it. The idea that house is worth to buyer X when he buys it but is worth only a fraction of X when it is time to pay property taxes is absurd.
Your ideas are good for some homeowners but they will not reflate the credit bubble. Our entire economy is based on people borrowing.
If we cannot borrow, somebody else will have to pick up the slack.
Meanwhile, in suburban Denver…
Builder goes bankrupt, homeowners on their own:
http://tinyurl.com/yprnq3
“…’We heard water dripping,’ Hartman said. ‘It was raw sewage in the light fixtures.’”
ewww…
..
A couple of times I have shared the following related story on this blog; and in light of the above post it deserves repeating:
In a nutshell-
Young twentysomething couple here in Florida gets shoehorned into a stucco 4 bedroom 2-1/2 bath McMansion on an ARM. Big house for a first home if you ask me..
Couple has a “pre-housewarming” cocktail party, which my girlfriend and myself attend. Couple had just moved in the house the day before.
Young twentysomething hottie / trophy wife goes upstairs to showoff the jacuzzi bath in the Master bedroom upstairs to the girls. Bath holds a LARGE volume of water, swirling about to the oohs and ahhs of the girls.
Maenwhile we are downstairs, drinking beers and watching football on the plasma.
Young lady pulls the plug on the bath upstairs. I look up and immediately notice water dripping around the ceiling fan fixture….strike that…POURING OUT OF THE CEILING FAN FIXTURE.
Water then finds its way to the seams where drywall ceiling meets the walls and pours down the joint; ruining a diploma or two in the downstairs study along with some family pictures…this while we are all frantically running around trying to figure out where ~ 50 gallons of hot, soapy water is coming from…
Turns out the illegal Mexicans forgot to connect the tub drain to the sewer pipe.
Took the kids a month before the contractor would send back some workers to fix the problem and replace the drywall. Took ‘em about another two weeks to get it fixed back to normal.
This is a story that will probably get repeated again here in Florida:)
..
That is a great story! It’s also why I always was of the opinion that a 10-year-old house may be a better bet than a brand-new house. For some reason, in Florida, everyone wanted a brand-spanking-new home. (OF course, most Florida slab/cinderblock/stucco construction probably won’t last 30 years, so there is a risk there.)
A CIBC World Markets analyst downgraded Citigroup to “sector underperformer,” saying the bank may have to raise $30 billion. The CIBC analyst wrote she expects Citi to be forced to sell assets, raise capital or cut its dividend to improve its capital ratios.
Market falls as Citi revives subprime woes
http://biz.yahoo.com/rb/071101/markets_stocks.html?.v=10
I thought they had to raise $80 billion (or at least that was the figure I thought was tossed around as the amount Citi wanted to offload into a toxic subprime SIV Superfund)?
Uh-oh
New York State Attorney General Andrew Cuomo’s office charged today in a civil lawsuit that the nation’s largest mortgage and property services corporation, its home appraisal subsidiary and the nation’s largest savings and loan giant conspired to inflate the value of home appraisals, earning higher profits for the bank but leaving homeowners holding potentially risky debt loads.
And the attorney general says his office has the e-mails to prove it.
http://blogs.abcnews.com/theblotter/2007/11/ny-attorney-ag-.html
RE: Uh-oh…
No need to uh-oh.
Why should this come as any surprise?
This is the form of insider financial racketeering I’ve been mouthing off about every since comin’ on this blog.
AppraiseIT…Whatta bunch of number hitter hacks!
And this is why the mortgage insurers will never pay off.
This measly rate cut of .25 has done the exact opposite of what the .50 rate cut of last month did, so says Wall Street…
Imagine if Cagey B and Co. had gone the full monty again?
It’s “normalized”, “stabilized”, & “contained” …. babeeeeeeeeeeeee
Oh garçon, some more Single Malt Scotch…and some imported:
“Neil’s *Natural* Hot Buttered Derivative Popcorn”
MSM is distributing some “independent” thinking & “foresight”:
“…Investors and economists are worried about whether the economy will be able to sustain a variety of setbacks from a deepening housing slump, to the severe credit crunch which hit in August and now record-high oil prices.”
http://biz.yahoo.com/ap/071101/economy.html
AP
Fed Intervenes in Financial System
Thursday November 1, 12:45 pm ET
By Jeannine Aversa, AP Economics Writer
Fed Injects $41 Billion Into US Financial System to Help Ease Credit Problems
WASHINGTON (AP) — The Federal Reserve pumped $41 billion into the U.S. financial system Thursday, one of its largest cash infusions to help companies get through a credit crunch that took a turn for the worse in August.
Is there some kind of sump-pump that eventually is used to remove the billions of dollars worth of liquidity the Fed is pumping in to shore up confidence?
And can we safely assume the pump will serve to deliver said liquidity back into the hands of Wall Street investment banks and hedge funds?
It seems to my untrained eye that the end result of all this liquidity pumping will be a dilution of the dollar which implicitly taxes savers and retirees on fixed $US pensions to pay off hedge fund and Wall Street subprime gambling debt. Or am I missing something?
It seems to me that that all this loan pumping by the feds to Wall Street lenders is going to go on the long list of debt to the tax payers in the final analysis . Oh ,the players will tax some write downs ,but the set up is to somehow pass the bulk of the mess on the the general public . What form the bail out this will take is the question ,but I would be surprise if the “to big to fall “will fall. My guess is that they are trying to set it up so the debt will be passed on to government backed loans to free up Wall Street ,but that’s just the hunch I have .
All rollover.
Foreclosures do not appear to be much of a problem — in North Dakota, South Dakota, Montana or Wyoming, that is (places where not many people live cause the living ain’t easy).
November 1, 2007, 11:43 am
Foreclosure Rates Surge in Third Quarter
Foreclosure rates soared in the third quarter, according to data released Thursday by RealtyTrac Inc., and reported by the Associated Press.
A total of 446,726 homes nationwide saw some kind of foreclosure activity from July to September, up 100.1% from 223,233 properties in the third quarter last year, according to the Irvine, Calif.-based company.
http://blogs.wsj.com/developments/2007/11/01/foreclosure-rates-surge-in-third-quarter/
>>>”The Federal Reserve pumped $41 billion into the U.S. financial system Thursday, one of its largest cash infusions”
Question: is this really a cash infustion as claimed? Or is it a credit infustion?
I think it’s a loan to the financial systems based on junk paper that will never be repayed .
Are you suggesting the Fed is now the subprime lender of last resort?
Sorry I took so long to respond PB . Yes, I think the taxpayers will end up being the holders of a bunch of bad loan paper ,one way or another .
Haven’t posted in awhile. Just thought the folks here would love to hear how the Housing Bubble BUST has affected Trick or Treating for the kiddos.
It seemed that 1/4 of the homes we went to were empty so the kids had to skip many. Add that to the people who just don’t hand out candy, the kids had to go farther than previous years to get their candy. One of my daughters friends went running up to a house that was all lit and turned around before ringing the door bell. I asked her why she didn’t ring the bell she told me it had a lock box on the door. Pretty sad! It was actually lived in but to an 8 year old lock box=empty house=no candy. We actually called it quits pretty early as the distance between the dark houses and the lit up houses was pretty creepy!
That is truly sad. It is the little pleasures in life that get destroyed.
I realize in many areas this idea is not realistic, in my rural community trick or treating is done at the local school along with the fall dance. Driving between friends farms can be 20 miles. Safer and easier. A couple of single moms were there and when they saw me they quietly left, oh well - maybe next year.
ROTFLMAO!
Co-worker in sub division with acre lots had few kids. Theory is they didn’t want to walk that far between houses
GOOG is as good as gold…
http://www.marketwatch.com/tools/quotes/intchart.asp?symb=GOOG&time=20&freq=1&comp=&compidx=aaaaa%7E0&compind=&uf=0&ma=&maval=&lf=1&lf2=&lf3=&type=2&size=1&txtstyle=&style=&submitted=true&intflavor=basic&origurl=%2Ftools%2Fquotes%2Fintchart.asp
One major builder is back to pre-2001 share price levels, but the others have a ways to go. How long until the forward-looking drop in home builder stock prices is followed by a backward-looking drop in home prices?
http://www.marketwatch.com/tools/quotes/intchart.asp?symb=BZH&time=20&freq=1&comp=&compidx=aaaaa%7E0&compind=&uf=0&ma=&maval=&lf=1&lf2=&lf3=&type=2&size=1&txtstyle=&style=&submitted=true&intflavor=basic&origurl=%2Ftools%2Fquotes%2Fintchart.asp
The T-bond market is trying to price in a recession from now until at least two years out, as reflected in a near-20bps drop in the 2-year note yield so far today. (Maybe 5 years is more like it, as even the 5-yr T-bond yield is down by over 16bps.) Does this reflect the signal the Fed sent against a backdrop of strong GDP growth?
http://www.bloomberg.com/markets/rates/index.html
Prof,
Perchance you are looking at the wrong indicators with regard to recession. This is flight from crappy corporates to US Ts. It appears to be foreign selling in treasuries.
http://tinyurl.com/3exyqt
Bloomberg
Please explain. How can foreign selling of Treasuries make the yield go down on new ones? I took it as a rush to buy Treasuries.
US investment houses are selling US corporate bonds and buying US treasuries. Foreign interests are selling US treasuries to the US investment houses and pension funds.
I think what Hoz meant is that a flight to quality out of crappy corporates into super-safe U.S. Treasurys has more than offset any effect of net foreign sales of Treasurys?
Empty house statistics.
Apparently the Census numbers for empty housing (headline from yessterday) does indeed include second homes/vacation homes.
http://www.census.gov/hhes/www/housing/hvs/qtr307/q307ind.html
Homeowner Vacancy Rate. The homeowner vacancy rate is the proportion of the homeowner inventory which is vacant for sale.
Range from 1960.Q1-2005.Q3 = 0.9 to 1.9
And then…
2005.Q4 2.0
2006.Q1 2.1
2006.Q2 2.2
2006.Q3 2.5
2006.Q4 2.7
2007.Q1 2.8
2007.Q2 2.6
2007.Q3 2.7
According to the chart on the Census site, rental vacancies are up there at 10% nationwide. I don’t think we’ll see a squeeze on renters in the near future.
……The Road Warrior
Bravo…
I saw the 2nd Mad Max in Melbourne, way back when.
Still the finest chase scenes of any film i’ve ever seen~
Dow down 320 pts, yipppeeeeee!
FTSE down 160 pts, lead by financials.
Down 375 pts
The bender is over. Looks like Wall Street woke up and realized Goldilocks is a SIV infected skank. Now, everyone is heading for the exit.
Oh, the humanity
Oh, oh, oh, the humanity
This time it’s different.
SIV = Simian Immunodeficiency Virus
Lot of blood on the Street today. See if we get some follow through on the morrow.
Best reference for the future, from a literature standpoint…
http://en.wikipedia.org/wiki/Lord_of_the_Flies
Okay, time to fess up. Who gave Linda Stein the ass-kicking she so royally deserved?
http://www.cnn.com/2007/SHOWBIZ/11/01/stein.obit/index.html
Now That Housing Has Soured, Renters Are Glad They Didn’t Buy
http://finance.yahoo.com/real-estate/article/103796/Now-That-Housing-Has-Soured,-Renters-Are-Glad-They-Didn‘t-Buy;_ylt=Aj2Wv4omaWX98Fa2B599fhC7YWsA
Nov puts are golden. Wow, I thought this might work but seeing it happen is a real rush. Money made on the downsider is faster and sweeter.
I have been wondering why the DJIA seldom moves down by more than 2 percent, and it appears these trading curbs may pretty much explain why, and may also help explain today’s larger-than-expected sell-off. But I am puzzled by the news item that says the curbs were activated today, given other recent stories indicating they will be eliminated? Got vega?
NYSE to remove trading curb born out of ‘87 crash
Fri Oct 26, 2007 7:17pm EDT
NEW YORK, Oct 26 (Reuters) - The New York Stock Exchange said on Friday it has proposed removing a rule limiting program trading on the grounds that the rule, put into place after the 1987 stock market crash, is no longer effective in curbing market volatility.
The proposed rule change will remove current buying and selling curbs — called “trading collars” — on brokerages using computer-assisted program trading when the NYSE Composite Index moves up or down more than 2 percent, the exchange said in a note to member firms.
http://www.reuters.com/article/companyNewsAndPR/idUSN2622461320071026
———————————————————————————-
Big Board imposes stock trading curbs
Thu Nov 1, 2007 10:45am EDT
NEW YORK (Reuters) - The New York Stock Exchange said on Thursday it instituted downside trading curbs at 9.38 a.m. EDT as U.S. stocks fell sharply in early trading.
http://www.reuters.com/article/hotStocksNews/idUSN0137853220071101
It almost appears as though some brave soul decided to take away the trading curbs a little past 3pm today, just to test the theory of whether trading curbs can affect volatility?
http://www.marketwatch.com/tools/marketsummary/
BULLETIN>> DOW INDUSTRIALS SUFFER 363-POINT DECLINE; CITIGROUP, WORST-PERFORMING COMPONENT, FALLS 7%
I think that’s effective 11/6. Can’t wait. It will be a bear bonanza down the line.
What makes me think the FOMC will make an exception to the rule for meeting days?
“I think we are in a recession in both the U.S. and San Diego.
NBER’s Business Cycle Dating Committee cites two ‘real-time’ monthly statistics that it monitors to establish business cycle peaks/troughs (para. five):
http://www.nber.org/cycles/recessions.html
– Real disposable personal income
– Employment
Real disposable personal income has been declining since March (Table 1, line 75):
http://www.bea.gov/newsreleases/national/pi/2007/xls/pi0507.xls
And, we all know the frailties of the monthly employment figures reported by BLS. I’m guessing that the Q4 06-Q2 07 employment figures will be revised downward, from their upward bias due to the adjustments from the Birth-Death model.
I think that, ultimately, the NBER BCDC will deem that the recession started in March/April ‘07.
And, San Diego’s economy is clearly on tenterhooks, with employment flat since March:
http://data.bls.gov/PDQ/servlet/SurveyOutputServlet;jsessionid=f030caf83d8a5E3FD
‘Fun’ times here in San Diego, indeed.
Posted by: Anonymous at July 25, 2007 02:54 PM”
http://www.econbrowser.com/archives/2007/07/san_diego_index.html
I am neither for nor opposed to Mr. Stephen Colbert, frankly I find him boring. I am dismayed that SC has decided that he cannot be on the ballot. He is a ready and willing candidate that has applied to be on the ballot and put his moneys down. I really do not see the difference between the comedians running for political office and Mr. Colbert.
So much for a fair republic. “If you don’t profess our ideals you cannot be on the ballot.”
Big Colbert fan here…
Quite frankly if he went all the way, the run for the presidency could have turned him into one of “them”, an unfunny, unthinking human bean.
–
CNBC Talking Heads: “ Employment Is a Terrible Indicator of the Economy” and “Housing Is a Leading Indicator of the Economy”
Holy pig!
Denial could last only for so long. Finally, the reality is setting in. Sometimes one needs Halloween scare to set a guy straight.
Jas
Now that the favorite crash month of October is behind us, I guess Wall Street traders don’t have a care in the world?
Wow, I just found out the dow went down 360 points . Will be funny watching the stock cheerleaders try to spin out of this one . Hope alot of my fellow bloggers were short . Let’s face it ,the sell off was bound to happen . I have been amazed that a bigger sell off didn’t take place sooner . What is going to happen tomorrow ?
I expect trading curbs to continue beyond Nov 7, whether or not they are announced. Otherwise whoever removed them would naturally catch the blame for a stock market crash.
Big losses, especially at insurers of debt instruments, are a natural consequence of fading bailout hopes.
Western banks suffer big losses
By Gillian Tett and Paul J Davies in London and Stacy-Marie Ishmael in New York
Published: November 1 2007 19:55 | Last updated: November 1 2007 20:37
Global investors succumbed to a new bout of jitters on Thursday amid concerns that a host of big western financial institutions are nursing additional, serious problems related to America’s troubled mortgage markets.
Equity markets tumbled and bond prices rose in the US and Europe. There were particularly sharp falls in the share prices of big banks and other financial groups, such as those that insure mainstream debt instruments – the so-called monoline insurance companies.
http://www.ft.com/cms/s/d0b545bc-88b1-11dc-84c9-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fd0b545bc-88b1-11dc-84c9-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
4/2/2 home in San Jose for sale in auction: “$395,000 is the minimum price, any final bids after this will be accepcted by seller.” Homes in street valued in 600-800k range (zillow).
http://sfbay.craigslist.org/pen/rfs/466137744.html
Only bloggers sporting tinfoil hats can spot bubbles ex ante.
Central banks should prick asset bubbles
By Paul De Grauwe
Published: November 1 2007 17:58 | Last updated: November 1 2007 17:58
The credit crisis that hit the world economy in August teaches us many lessons about the workings of integrated financial markets. It also teaches us something about the responsibilities of central banks.
Until the crisis, the consensus view was that central banks should target inflation and that is pretty much all they should do. In this view, central banks should not target (or try to influence) asset prices either, as was stressed by the former Federal Reserve chairman Alan Greenspan, because central banks cannot recognise bubbles ex ante. Or, if they can, the macroeconomic consequences of bubbles and crashes are limited as long as central banks keep inflation on track. Inflation targeting, we were told, is the new best practice for central bankers that makes it unnecessary for them to try to influence asset prices.
http://www.ft.com/cms/s/479f24ba-8892-11dc-84c9-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F479f24ba-8892-11dc-84c9-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
Scary Halloween Edition: Maricopa County Arizona (Phoenix metro) Notice of Trustee’s Sale:
Aug 05 795
Sep 05 669
Oct 05 728
Nov 05 704
Dec 05 749
Jan 06 726
Feb 06 687
Mar 06 790
Apr 06 638
May 06 764
Jun 06 797
Jul 06 851
Aug 06 1019
Sep 06 1114
Oct 06 1238
Nov 06 1493
Dec 06 1407
Jan 07 1624
Feb 07 1577
Mar 07 1720
Apr 07 1709
May 07 2007
Jun 07 2325
Jul 07 2501
Aug 07 3248
Sep 07 2834
Oct 07 3458