Bits Bucket And Craigslist Finds For November 4, 2007
Please post off-topic ideas, links and Craigslist finds here.
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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Heads Roll…
http://business.timesonline.co.uk/tol/business/markets/article2797842.ece
Poor f—ing babies. How many millions and millions of dollars did each one walk away with? Corporate America is wretched beyond belief.
“redundancies”
The Brits have the absolute perfect word to deliver a kick in the crotch to our elitist captains of business. Now, if we could only see this term applied to our politicians as well…
You’re not special pig men…you’re merely rednundant, like one of many flies buzzing around a horse’s butt.
This shouldn’t help any.
Someone had posted a few days ago regarding US accounting rule SFAS157 or the valuation of Level 3 assets on banks books. I came across this story on Implode-o-meter. Pretty scary stuff, unless your short financials.
http://www.atimes.com/atimes/Global_Economy/IK03Dj03.html
Following are a few snippets:
Goldman Sachs has disclosed its Level 3 assets, two quarters before it would be compelled to do so in the period ending February 29, 2008. Their total was $72 billion, which at first sight looks reasonable because it is only 8% of total assets. However the problem becomes more serious when you realize that $72 billion is twice Goldman’s capital of $36 billion. In an extreme situation therefore, Goldman’s entire existence rests on the value of its Level 3 assets.
When Nomura Securities sold its mortgage portfolio and exited the US mortgage business in this quarter, it took a write-off of 28% of the portfolio’s value, slightly above the 27% of the portfolio that was represented by subprime mortgage assets. Were Goldman Sachs’s Level 3 assets similarly value-impaired, it would result in a $20 billion write-off, more than half Goldman’s capital, leaving the bank severely damaged albeit probably still in existence.
Wants,
I read that a few days ago and felt sick to my stomache.
What does this mean for our Nation?
I also read an article that said the Super SIV will require less capital…huh? I can’t imagine that would be the case, since many of the big banks have not reported their level 3 (and probably won’t until forced to do so).
http://www.reuters.com/article/gc06/idUSN0261771720071102
Leigh
boom, BOOM
out went the lights.
Pardon my ignorance, but what are level 3 assests?
SIVs; CDOs; ABMS…stuff that is not on the balance sheet
http://www.atimes.com/atimes/Global_Economy/IK03Dj03.html
Warning: Scary stuff
Thanks for the clarity Leighsong
Level 1 assets are assets that have an active market and can be priced according to today’s trade i.e. stocks
Level 2 assets are assets that don’t have an active market and need to be valued according to a model
Level 3 assets are assets that the company is allowed to make up any value they need in order to pretend that they are still solvent.
Short-hand:
1) Mark to market.
2) Mark to model.
3) Mark to meth.
“Chuck Prince’s resignation as chairman and chief executive of Citigroup, while unconfirmed as The Times went to press, appeared a near-certainty last night as the group convened an emergency meeting for the weekend and failed to deny rampant rumours of their head’s imminent departure.”
I gueess Prince won’t party like it’s 1999.
Romeo…
http://www.kitco.com/ind/Lee/nov022007.html
“The experience of living through the Enron scandals earlier this decade means that the audit industry is now terrified that it could face lawsuits if it is perceived to be too lax towards its clients.”
What? Where were the auditors when these Brainiacs got the ideas to create all of this crap in the first place?
Sarbanes-Oaxley compliance has cost an incredible amount of money, and it did not stop massive mortgage fraud which will be seen as Enron-esk.
Auditors are truly worthless.
Sarbanes-Oaxley is Smoot-Hartley revisited.
These are good
http://www.rgemonitor.com/blog/roubini/223214/
http://www.nakedcapitalism.com/2007/11/maybe-real-reason-for-siv-rescue-plan.html
“Prince began making acquisitions after the Fed lifted a ban on deals by the company in March 2006. The “buying binge” increased assets while earnings stagnated, Whitney said.”
And how much will they pay him to resign?
All of these guys should be in the slammer. It is only at the high end of the finance industry where everything is legal. It’s the Wild West out there. They play with the economy like it’s their own personal toy. Fit Bernanke for an orange jumpsuit while you’re at it.
Chuck’s finger Prince are all over this “buying binge”.
my newspaper writes that the US is going to close down Guantanamo Bay; I think I know some very good use for it, although it might prove a little too small.
So that’s where all those unsolicited credit card offers come from.
TxChic
My fiance told me last night he heard of one builder in Phoenix now selling houses for mid 300’s that sold for 600K to 700K in 2005. This was in an area that we were looking. Happy Valley road and about 60th Ave.
How would you like to be 300K upside down in 18 months!
“My fiance told me last night he heard of one builder in Phoenix now selling houses for mid 300’s that sold for 600K to 700K in 2005.”
See, that’s the thing. Those builders were gouging buyers in a most horrific fashion. I can’t believe how stupid people were to be paying, I mean “borrowing” those prices. Anybody who is several hundred thousand upside down should just walk away. Honestly.
I suspected the MILEC was a way to fund the SIVs so it wouldn’t drag down the banks. Throw some money at it from a bunch of sources and presto! no need for the FDIC to pay out as an institution or two fails….
Increased banking regulation is impacting gold purchases/redemption. I have an account with Goldmoney, in which I am able to purchase gold, to be held in an account. To date all transactions have been through my local bank. That is, after establishing the accounts I have been able to buy gold, both one an infrequent basis by having funds withdrawn from my local account and have been able to have a monthly amount taken out of my account to purchase gold.
I have received the following communications:
—–
Dear Sir/Madam,
We regret to inform you that the following services will no longer be provided for bank accounts in the United States after December 15th, 2007:
(1) Processing US dollar electronic check transactions, and
(2) Accepting US dollar wires in a US-based bank account.
After that date all transactions with our customers who use their bank account in the United States must be completed with an international wire transfer.
…
Burdensome regulations in the United States are making it increasingly difficult for international companies like ours that are not based in the United States to operate an account with a US bank…
Have you ever seen “your” Gold, does it really exist?
Many times over the course of my lifetime, these sort of outfits have gone belly up, not to say this firm is honest or dishonest, I don’t know.
Why allow somebody else to have 100% control over something you invested 100% of your money in?
Here’s a recent example of a similar outfit’s downfall:
http://www.securityfocus.com/news/11462
Trust yourself instead, and buy physical metal and hide it away somewhere.
Actually, Goldmoney is a reputable company. I have traded into and out of both gold and silver. No, I didn’t go down into the vaults.
And, I most of the gold I have I hold physically. This was a convenient method of accumulating gold on a monthly ’savings’ program. Twice I have made withdrawals and then used the proceeds to buy physical.
The stated comment is that US banking regulations are getting to the point where an offshore company can not work effectively with banks in 50 states. I think something else may be involved.
Google
international gold bullion exchange
For a teaser taste in what can go wrong, especially when the 24K Gold Bars in their vault, turned out to be gold spray painted 2×4 pieces of wood.
LOL! Living in Ft. Lauderdale during the heyday of that scam, I had a front row seat for the rise and fall of a real Ponzi company. Buncha jewely dealer thugs from Jersey, wearing designer suits, glommed onto a good thing. If people knew the half of what happened there, it would curl their hair.
I checked it out, I think on your recommendation, but it seemed the priceo of gold was considerably higher than tht day’s prices. I don’t really understand that and backed away from it. Twice I redeemed money from Vanguard to do something at Everbank or Goldmoney, and I just get cold feet and send it back to Vanguard. Over my head I guess.
This is what I do, too. Rather than let dollars sit and accumulate each month in a checking or money market, I just buy however much gold/silver I can purchase, and repeat each month.
maybe it has to do with the over-the-top US anti-terrorism regulations. We keep hearing similar stories from very reputable companies like SWIFT (they arrange all the international payment transactions for EU banks). US government tries to meddle with almost everything in the world at the moment because of a perceived ‘terrorism threat’.
Even better, buy “GLD.” GLD is an ETF that holds gold bullion. You can buy or sell with a click. However,my preference is Fidelity Select Gold, which holds mostly gold mining stocks. It’s up about 30% in the last 3 months.
GLD is good. GG (Goldcorp) is very good. They went from $22 to almost $36 in less than 3 months.
They have the lowest cost per counce of getting the shiny metal out of the ground off all of the major mining companies.
I have too many shares of gg. I should have spread the risk out with my other mining companies which I do have but not I have not allocated proportionately. Time will tell if Gold is a bubble too but with the greenback going down the crapper, it may rise for a long time.
How do you know that what they are selling is really gold? Have you checked that it is 19.34 g/cm cubed? Your best bet is US Gold Eagles that you can easily keep in a Safe Deposit Box at your local bank. I have rented a box that is 18 x 10 x 8 for $60 a year and it can hold quite a few eagles although it might get rather heavy.
The Patriot Act states currency and precious metals may not be kept in that oh-so-secure safe depost box…. I’m sick about GoldMoney (if you’re not familiar w/James Turk, then this isn’t the way for you to go)
I’m considering pottering up to Canada and opening an account there….. Should delay things one little bit… Damn.
“Trust yourself instead, and buy physical metal and hide it away somewhere.”
Timely post since I, 1-can’t sleep (I’m sleepless, remember) and 2-have been looking the last few days for other sources for metals.
I feel the same way, pretty much want to hold it myself, except for my GLD “holdings.”
Alad, do you buy from an online site or from a local broker?
Your local coin dealer that handles bullion (find them in the yellow pages…. ha), or one of the reputable firms on the net.
Just google them and find out if they are naughty or nice, as far as how they handle business.
I too, prefer to have my hands on my gold and platinum than to have to trust some institution to claim they own it for me. Ten percent of my net worth is for my own paranoid reasons (SHTF). If we did not have the gold boom of the 70s, I would probably have 30% of my net worth in precious metals. I think we have a few years of precious metals boom before we reach the equivalent of 1980. But after that, gold will probably drop 75% from its high in this boom and stay there for 15 years. Question is, what will be the peak? $2000 per ounce? $3,000 per ounce? I say the peak price of gold will be reached when the 10 year note interest rate is above 8%. Everything is cyclic. Politics the same way. We may have a Democrat president and Democrat-led Congress from 2009 to 2012. Kind of like the malaise era of 1977 through 1980. Then a Ronald Reagan style president in 2013 with a Democrat-led Congress. I think gold will peak in 2012 while real estate will bottom.
As in other markets, I’m unconcerned about hitting the apex of the market, and like this one, I suspect the clues will abound….
“Have you ever seen “your” Gold, does it really exist?
Many times over the course of my lifetime, these sort of outfits have gone belly up, not to say this firm is honest or dishonest, I don’t know.”
Good point, Aladinsane,
It’s been my experience that anything that’s precious and/or big-ticket–such as high end collectables, jewelry, paintings, and of course…gold/silver should be purchased in person or from a dealer you have developed a relationship of trust with. I’d never by from some entity I didn’t know–no matter how “solid” they appeared.
If I can’t touch and inspect it, I don’t buy it. Period.
DOC
Trust yourself instead, and buy physical metal and hide it away somewhere.
Any suggestions on where to safely buy/store physical metal?
Gold won’t rust so just bury some in your flower bed or under your house.
De
Did you get this letter from Goldmoney?
yes
The US has been investigating them on “money laundering” previsions found in the patriot act. It seems like the company is fed up with US regulations that require them to go to extraordinary measures to identify their customers.
Of course we all know that the site doesn’t sponsor money laundering. The real motive is probably to prevent a private currency from gaining ground in the US.
Goldmoney is a good alternative if one starts to bump up against the prudent limits of what one has stored at home. Having assets offshore is an excellent diversification strategy because who knows what the asshats running the gov’t are going to come up with next.
Any affiliate or branch bank in the US has to comply with the US banking regulations which essentially allow the gov’t unfettered access to everyones banking info. THAT is the reason goldmoney is not going to open a branch/affiliate.
Also, to aladinsanes concern, Via Mat is a world reknown precious metals broker/storage company and they are backstopped by lloyds of london. The gold is audited twice a year by a reputable accounting firm and those audits are available for review.
Is it as reliable as gold in your hand? no. Nothing in life is risk free and everyone should realize that having a lot of wealth hidden away at home has risks as well.
My criticism would be that the goldmoney headquarters should be moved to Zurich instead of the channel islands where the privacy laws are stricter. That being said, now that one can also hold their funds in goldmoney in either BP, USD, EUR or CAD (as well as a storage facility now in Zurich), this probably now qualifies as a foreign account and will need to be disclosed to the treasury once a year on form 92.
It’s hard to imagine what pressures lie underfoot, financially?
What if the guy running this firm that honestly stores precious metals for you, is a compulsive gambler, or is living the high life on your dime?
Or bought tons of houses, hoping to flip them, using your money as a catapult?
Jonathon’s Coins, in Inglewood, Ca. was my first glimpse into what could go wrong, when an honest guy, (Jonathon Hefferlin was a neat guy, treated people fair, was civic minded and I could go on and on about his good attributes) became a victim of when push meets shove.
As the metals were flying in 1979-80, Jonathon & co. was cleaning up, they couldn’t lose, as Silver went from $5 to $48 in less than a year, and people were buying lots of metal from them, and many asked if Jonathon could store their metal for them?
And Jonathon being an accommodating guy, obliged them and a whole bunch of pm’s were sitting there, as Silver kept getting beat up in price, not unlike houses are now.
From $48, it plateaued down to $11 in less than a year’s time.
Jonathon & co. suddenly had the Midas Touch in reverse.
They were robbing Paul’s stash to pay Peter’s debt.
In the end who knows how much of the public’s metal wasn’t there, but i’ve heard numbers from $10 to $100 Million.
Be the master of your own destiny…
Trust Yourself
aladinsane,
Still curious about your opinion of The Perth Mint.
“The real motive is probably to prevent a private currency from gaining ground in the US.”
It’s time for me to put my money into hats and tin foil.
Though I understand political motives for limiting gold trade, the US gov’t actions to limit money laundering have been across the board. NETeller was a major transfer service for transferring money to online poker sites, and they were hit too.
“Most people who deposit and withdraw regularly use eWallets, which are companies that are used to transfer money from player’s bank accounts into their favorite poker sites. NETELLER used to be the biggest and most trusted eWallet, but the company decided to leave the U.S. after its two founders were charged with crimes related to online gambling earlier this year. ” -cardplayer.com
Your money is no good here….move along.
Wow…so how legit do you think there reasoning is? Or is it our incredible shrinking dollar?
I’m wondering if they have begun to mis-trust US Banks.
Now, why would anyone do that?
sacarsm off
It may be that they just don’t want to deal with the Treasury reporting on international transfers. Perhaps international wire services handle the paperwork for them, or, the wire service, as the first international recipient, may be responsible for doing the reporting.
Take a look at the FinCEN forms at the top of the forms/publications box here:
http://www.irs.gov/formspubs/lists/0,,id=97817,00.html
international wire transfer organisations have similar problems with current US government financial regulations …
I have a goldmoney account too, and read the new regulations. Face it, there are no “easy” answers to gold ownership/storage.
I have physical gold in a safe deposit box, GLD, and goldmoney.
Here is what they have on their site. This, combined with James Turk’s reputation, are good enough for me. I I am 1/3 in physical gold/silver, 1/3 in energy/resource trusts and etfs (USO), and 1/3 cash time deposit. I will continue to use goldmoney. They have opened a new vault in Switzerland, which provides an added measure of security IMO.
“When you purchase precious metals through GoldMoney, the gold and silver bullion is stored securely at the VIA MAT vaults in London, England and Zurich, Switzerland. VIA MAT International is part of Mat Securitas Express AG, of Switzerland, one of Europe’s largest and oldest armoured transport and storage companies.
Your gold and silver are insured against theft from the vault through a policy underwritten at Lloyd’s of London.
A Big Four accounting firm annually audits GoldMoney’s operational procedures as well as the precious metal bar inventory at the vaults and metal circulating electronically in our system. These SAS 70 Type II reports are made available to GoldMoney customers upon request.
GoldMoney also provides quarterly audits of the metal held for its customers. “
BV,
Through whom did you buy your physical AU?
California Numesmatic Investments. Always very good service.
California Numesmatic Investments
Just DON’T get talked into buying numismatic coins, that are in reality collectibles, that will drop in price substantially.
You want the straight bullion route, keep it simple (ae’s, cml’s, kr’s)
“keep it simple”
KISS - it ain’t just a band with vicious makeup and boots.
Yep, all I want are the Eagles.
most of us like to keep our fishing holes private. Not because we don’t want other people going to those fishing holes, but out of fear for our own personal identity being found. The US Mint website maintains a list of dealers for gold American Eagles/Buffalos, Silver Eagles, and Platinum Eagles. Google for it and find one that accepts cash only for physical bullion.
Yeah, I certainly do mean to be respectful when I ask for advice, so I appreciate the guidance posted here. Thanks to all who replied.
I actually did try that site in the recent past but for some reason couldn’t link to their list. I’ll try again.
Aladinsane,
is there any reason not to go to ScotiaBank or any Canadian Bank and just buy Maple Leafs? Are these not as desirable as American Eagles?
24k is the preferred karat in the far east, so cml’s are a-ok in my book.
I don’t know much about buying yellow in Yellowknife, could Yukon fill us in on the Territory?
Actually, these are pure gold (AE’s aren’t, but they contain the same weight of gold), meaning they are shinier, but softer.
Incidently, East Asians prefer 999 or 24K gold to 22.
If you are a coin collector/drooler, 24K is anathema; also Westerners really don’t like the color (orangey). My engagement band is 18K, which is shiny enough for me (soft enough that it shouldn’t take ALL my flesh off the bone in an industrial accident … I hope).
for Sleeless_near_Seattle:
http://www.usmint.gov/mint_programs/american_eagles/index.cfm?action=lookup
Gold bugs have to be wary. Wages and salaries have been held in check by India and China competition. That could be good news or bad news. Depends on if prices of goods and services will be decoupled from wages. If stagnant wages don’t keep prices of goods and services in check the next few years, it will mean gold prices could go to several thousand dollars per ounce. The Federal Reserve seems to be ignoring gold and oil prices but worried about wage growth instead. So seeing no major wage increases but a downturn in Real Estate, they cut the rate.
Eventually there will have to be wage pressure as energy costs take their toll on Indians and Chinese. Already China increased fuel prices by 10%.
As long as wages are stagnant we have more time to stockpile gold and platinum bullion.
Not worried about Chindia all that much…
The fact is, all Wall Street financial products have the Scarlet Letter of “F” for fraud, tattooed on them, and in my experience people that willingly mark to malarkey their bodies in this fashion, aren’t to be trusted.
Gold is beholden to nobody and is 100% Completely Honest, in comparison.
It’s a No Brainer~
Thanks Bill, I found it earlier after your other post. For some reason the last time I went to their site a few weeks ago, the link to the dealer search didn’t work.
What makes up the difference in spot price and the ask price that dealer’s quote?
I’m seeing $834-$860 for a spot price of $806. I can see paying a commission but $28+ premium PER COIN? Is that a standard handling cost?
I have seen dealers’ commissions vary from 4.1% to 6%. I don’t quibble about paying 6% if my 4.1% dealer is a $500 plane flight and a $800 day off from work away. I buy less than $10,000 worth at a time with cash.
Hmm. Based on your experience then 835/806 = 3.5% commission is a pretty good deal.
Considering some mutual funds charge 5.75% front load in addition to yearly mgmt fees your point is taken.
Aladinsane,
I’ve been holding off on buying a kilo bar, but the time might be nigh. I’d rather just make one transaction to have a chunk of my net worth in gold to hedge against total dollar decline. How can you be sure your gold bar is gold? What if the gold dealer sells you lead with gold paint?
Would a dealer take offense if I put on the ultimate tin foil hat and brought in a scale and a submersion beaker to estimate mass and volume and then compare the density to gold’s known density?
CCC
Gold Bars are so Hollywood-ish and not really traded much anymore, 1 troy ounce coins (or 1/10, 1/4 and 1/2 oz) have been the style for a long time now.
The look and feel of high karat Gold is unmistakable and heavy. I’ve never seen a counterfeit 1 oz Gold Coin in my life, to give you an idea.
If I didn’t feel I knew what I was doing, i’d drag along a little digital scale with me, sure.
The submersion beaker should be left at home though, as my friends and I would be talking about the legend of the doubting thomas, with the submersion beaker, for decades to come.
Very tin hat alley…
I finally broke down and bought some 1 oz. Maple Leafs a while back. I tried to research quite a bit and talked to a lot of gold sellers. To a man, every one of them got very defensive and made me uncomfortable for asking questions about counterfeit bars or coins. Some were practically “get out of my store” rude, others were just impatient about it.
One online broker told me silver is easier to counterfeit because lead has about the same specific gravity. Hollow out the bar, fill it in with lead, pour some silver back over the hole to make it look nice.
For gold to weigh about the right amount using this technique, one would need tungsten, and tungsten is hard to come by in large amounts. Using lead, the gold wouldn’t weigh right at all. I guess if they shaved an ounce of the kilo bar it would be harder to notice.
Some told me there was no such thing as a counterfeit gold coin, others told me there were some that had been made in the middle East. All told me they could recognize a counterfeit a mile away.
We’ll see what happens when I go to sell them.
I’ve never seen a counterfeit 1 oz Gold Coin (reasons mentioned above) and i’ve bought and sold perhaps 100,000 coins…
I think many of you are of the opinion that we that buy and sell the real thing, are akin to the guy in the parking lot that has a “gold” necklace he wants to sell for $40.
Bullion dealers are natural born traders and trust is a must.
Our track record is Sterling, in comparison to the crooks on Wall Street.
Well, hopefully you won’t get defensive, but:
According to http://en.wikipedia.org/wiki/Gold_coin#Counterfeits, there are good counterfeit coins out there. Even if the percentage of good counterfeits is 1 in 100,000, you’ve likely seen a few, according to how many have passed through your fingers. Without testing every one, how would you know? And since “trust is a must”, my guess is you never tested any of them.
And if “trust is a must”, then it seems like it would be even easier to get some counterfeit coins in your possession and think they’re real. A crooked man thrives on trust.
The cost of making a good counterfeit has mostly made it unprofitable, but as the price of gold rises, it becomes a more and more realistic “business” model to counterfeit them.
You strike me as another doubting thomas, and if you are so concerned, do the acid test…
Take the coins you bought, back to where you bought them, and tell them you are a seller, and you’ll see your concern is much ado about nothing. They’ll just count them up and pay you.
Nervous Nellies like you, never question the fact that a $100.00 Banknote costs 25 Cents to print, and that the other $99.75 worth of perceived value is strictly blind faith, but you are concerned about counterfeit high karat Gold Coins being a problem, when i’ve related i’ve never seen one in 33 years of buying and selling?
You strike me as another defensive gold dealer, like all the rest of them.
You have no idea whether I’m a nervous nellie, or whether I question federal reserve notes, or whether I have blind faith. But it’s quite interesting how you imply I have character defect if I have some sort of blind faith in the reserve system, while at the same time you expect me to have blind faith in you when you relate to me that you’ve never seen a counterfeit coin. Quite a double-standard. When I buy a horse, I like to look at its teeth no matter who’s selling, period.
When people assure you that Gawd and Jeebus exist, do you believe them?
And lastly, let me clarify something: I don’t have blind faith in anything.
My 11,000+ days of experience buying and selling coins, mean nothing in the scheme of things, apparently.
“11,000+ days of experience” is just bytes in my computer. You are pushing your agenda so strongly it undermines the points you are trying to make.
I have been buying gold for about ten years now. I am in agreement with Aladinsane. You can tell by the look and feel of a coin if you have a history of buying that same coin. Also you buy from reputable dealers or people who you know you can trust. US Mint’s dealers list is a place to start. Look for membership to numismatic associations, look for links to BBB. Check out how long they’ve been in business. If they sell counterfeits, word would be out fast to the big volume buyers and these people would be out of business.
Agree about the value of fiat money. The government’s been counterfeiting for decades, writing, for example, $100 on the same type of paper and ink that the $1 is on. That is the fraud you should fear most.
You can do an acid test. You can buy a kit from a jewelry supply place. Try Rio Grande in NM or Myron Toback in NY.
A small credit union goes under:
“The weight of defaults on real estate loans has forced the Bay Area-based Cal State 9 Credit Union into federal conservatorship.”
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/11/04/BA7FT67CK.DTL
That is really bad news for UC employees, of whom I know dozens. Another reason to rethink what used to seem like my perfectly reasonable long-term plan of relocating to UCSB…
I read something about them roughly a month ago.
Picked this up off another board:
http://tinyurl.com/2g4yzx
Google trends: How to file bankruptcy
Are the bodies starting to pile up at the exits?
not yet…first the sheeple will rack it up even more for holidays…Jan 2008
I am still thinking about the idiot Irishman that was discussed yesterday. He bought a $750,000 condo, site unseen, in my neighborhood. I think I will walk over to see 75 Wall Street. I bet it is just another nondescript office building they are converting to condos. We have enough of those.
This is what I don’t get. People haven’t figured out that countries with depreciating currencies are an awful place to invest. They are a great place to go on a shopping spree. You sure don’t want to invest your strong currency in a country with a weakening currency. When will foreign investment all but dry up in the U.S.? Does the Fed think about this at all? We hear about the miracle going on with increasing exports (hold back laughter). Why don’t the a##holes on CNBC discuss the destruction of the foreign investment climate here (rhetorical)?
Good luck to that Irishman. Soon his $3,000 in rent will be worth 1,500 Euro.
I was thinking of you yesterday. How did the volunteer project go? Any interesting stories?
Danni
No. It was pretty small. We took 2nd graders to the Natural History Museum. It was very busy. I needed to drink so badly afterwards. There was nobody to really talk business with.
Especially since, so far, americans haven’t had too much trouble keeping up their purchasing, but our investing hasn’t been too great for a while. Hard when you spend every cent you have and then some.
I remember in the early 80s when I lived in Greenwich Village and the tour buses used to stop on Bleecker. The Germans and Japanese tourists would emerge with so many bags of stuff, they could hardly walk, because everything was so cheap here (to them!).
Um, if his monthly 3000USD nut can be paid with 1500, 1400, 1300… euroes, how is this stoopid?
Ode to The Artist Formerly Known as Prince…
Dig if u will the picture
Of u and impropriety engaged in a kitsch
And sink of your bank abhors me
Can it be because of you, my darling Prince?
Can u picture this?
Dream if u can a court date
An ocean of jurors in the room
Animals strike curious poses
They feel the heat
The heat between you, soon to be accused
How can u just leave your standing
Alone in a world thats so cold? (so cold)
Maybe Im just 2 demanding
Maybe Im just like my father 2 bold
Maybe youre just like so many others
They’re never satisfied (they’re never satisfied)
Why do we scream at each other
This is what it sounds like
When doves cry
Participate in the shot heard around the world!
http://www.thisnovember5th.com/
I had a confederate on the inside of the emergency $hitibank meetings, and this is his visual of the proceedings…
http://en.wikipedia.org/wiki/Image:Hisstationand4aces-coolidge.jpg
Headlines in the Fort Wayne, IN Sunday paper: “Housing Glut.” Time on market now 3 months, foreclosures up 20% YOY, median price up 2% to 101K YOY. Also, a crisis in property taxes to be solved by emergency action at the state level. My taxes on an 8 yr old 21000 sq ft custom house on 3 acres are $1,100 per year, so I should get a rebate. In the meantime, the taxes on a 1 acre lot in the woods that my wife a I bought for $20 k 4 years ago in central FL are $900/yr. This is based on last year’s grossly inflated assessment. I am sure that the local gov will be sued next year if the taxes on unimproved property do not drop by about 50%
Lol, keep hoping … the good ol’ boys run their banana republic by extracting wealth from out-of-state suckers like yourself.
Btw, nothing is moving in N. Cen. Fl. empty lot market (dunno what you mean by central fla–Orlando or Ocala?) so how can there be any comps to base an appraisal on?
Wishing prices and no bites. Dead in the water.
Link to Fort Wayne story:
Link
Sorry–that should be 2100 sq ft house–a 4 br, 3 bth with geothermal.
I was going to say . . .
That should be “‘2100 square ft. ” A 4 bd, 3th with Geothermal.
Sure what ever– you can be your “elitest self” here on the blog, we know your watching.
Dean Calbreath is injecting housing bubble blogger economic logic into the MSM. Excellent work!
Think home-price slide is over? The worst appears yet to come
November 4, 2007
After more than a year’s worth of the Great American Mortgage Crisis, some real estate professionals still think the law of supply and demand will kick in to prevent home prices in San Diego from dropping too low.
The rationale goes something like this: There’s a finite supply of homes and plenty of pent-up demand from potential home buyers. That demand will put the brakes on the housing decline before it turns into a rout.
But people often forget that the economic concept of “demand” also includes “ability” – i.e., ability to pay. As lenders tighten their standards on mortgages – standards that never should have gotten as lax as they were in the past few years – fewer San Diegans will have the ability to buy homes at their current prices.
By any standard, even after a year of decline, San Diego’s home prices are still out of whack.
http://www.signonsandiego.com/uniontrib/20071104/news_1b4dean.html
Slowly….veeeery slowly my friends are seeing the light. Which is good, except for the fact that they don’t seem to give me any credit for their education. (I don’t REALLY expect any, but some recognition that I may have helped is always nice) Instead, they act as if “duh, I knew it all along.”
Ah, manias….
GAIL MARKS JARVIS
Distrust of financial system has far-reaching implications
November 4, 2007
The Federal Reserve gave the economy another teaspoonful of tonic last week, and investors gulped it down.
The hope is that it will cure what could ail the economy and keep the doctor away.
But the incubation period for economic remedies and problems is often six to 12 months, and the economy could be sickened by more than tumbling home prices and the potential that house-poor consumers might not spend much.
There remains a hangover from the summer’s credit crunch and ongoing weakness and mistrust in the financial system. The nation’s largest banking firms have been reporting the damage they caused themselves and investors by creating securities backed by undependable subprime mortgages.
Those securities, which were based on homeowners making mortgage payments on time, plunged in value when it became undeniable this summer that many borrowers would not be able to make their payments. And the securities, along with others suffering guilt by association, continue to be shunned by investors because they were based on weak analysis about the mortgage market.
“There is a lot of supply and not a lot of demand because investors are mistrustful of the process,” said Janet Tavakoli, president of Tavakoli Structured Finance.
http://www.signonsandiego.com/uniontrib/20071104/news_1b4marks.html
“Hangover” from the credit crunch?!? Has he looked at the ABX lately? August was the warning shot across the bow.
Abandon ship! Abandon ship!
Low-cost areas are hit hardest by foreclosures
First-time buyers are unable to handle hike in payments
By Roger Showley
STAFF WRITER
San Diego Union Tribune
November 4, 2007
As the rising wave of defaults and foreclosures sweeps like a tsunami over San Diego and the rest of the nation, virtually every neighborhood is being affected, according to the latest figures from DataQuick Information Systems.
But the impact – to no one’s surprise – falls greatest on the areas favored by first-time buyers.
“Entry-level buyers and low-cost areas are generally stretching their finances more and they used these subprime mortgages more frequently than buyers and refinancings of higher-priced areas did,” said DataQuick analyst John Karevoll.
Many buyers in move-up and high-priced communities also used many of the innovative mortgage products lenders invented to generate business in the early-2000s. But when mortgages reset and monthly payments soared, they either cashed in investments to cover costs or rearranged their financing to hang on to their dream home.
“The wealthier you are, the better shape you’re in,” Karevoll said. “For every person losing his home, at least 10 are gritting their teeth and will grind their way through this.”
http://www.signonsandiego.com/uniontrib/20071104/news_lz1h04default.html
Don’t cry for me, Tijuana-adjacent
The truth is, I never loved you…
Currently, about 1,360 listings out of 22,300 on Sandicor Inc.’s multiple listing service are identified as REOs, according to John Hokkanen of Casa Bella Realty & Mortgage in Encinitas.
But a rapid sell-off of the REOs is unlikely as long as the buying public remains on the sidelines waiting for prices to bottom out and the mortgage market to firm up, he said.
“What this has done is spooked a lot of buyers who would have otherwise purchased, because there’s all this discussion about foreclosures,” Hokkanen said. “There are midrange buyers who could afford a $700,000 to a $1 million house who are very, very nervous and who have elected not to buy this year.”
I CALL BS ON THIS REALTOR OPINION. THE NUMBER OF SAN DIEGANS WHO CAN AFFORD A HOME PRICED ABOVE $700,000 IS VANISHINGLY SMALL, ESPECIALLY WHEN GS IS ESTIMATING CALIFORNIAN HOME PRICES ARE 35 TO 40 PERCENT OVERVALUED.
NOBODY IN THEIR RIGHT MIND WOULD BUY A HOME IN SAN DIEGO UNTIL PRICES REALIGN WITH LOCAL INCOMES. ALL RESIDENTIAL REAL ESTATE DEMAND IS LOCAL.
“The wealthier you are, the better shape you’re in,”
Ya think?
I think it depends much on whether one drank of the exotic mortgage and HELOC koolaide over the past seven years.
“For every person(potential voter) losing his home, at least 10(potential voters) are gritting their teeth and will grind their way through this.”
I wonder if we will again hear the American equivalent of the 1990’s Japanese slogan gaman shite hou ga ii: “grin and bear it.”
Don’t buy until this flavor of fraud (and others) is stamped out. One sign of it ending will be a lack of lender willingness to be so gullible.
NATION’S HOUSING
KENNETH HARNEY
‘Piggyback’ tactic in home mortgages hasn’t been halted
November 4, 2007
WASHINGTON – The “piggyback” credit-score inflation schemes for mortgage applicants haven’t been reined in despite industry pledges to do so at the end of summer. As a result, lenders continue to be misled into treating loan applicants with poor credit as prime-credit candidates – worsening already critical fraud and delinquency problems in the mortgage market.
http://www.signonsandiego.com/uniontrib/20071104/news_lz1h04harney.html
Right ,why invest in real estate while the banks/lenders are still making crazy loans / Crazy lending makes the prices unstable in any given area because of the potential for foreclosures or dumping inventory .
The Front Porch
News and notes about real estate and our built environment
November 4, 2007
QUOTABLE:
“In no way do I want to diminish what happened in California because the wildfires are certainly tragic, but it didn’t take down an entire city’s infrastructure (like Katrina). We lost an entire city within a few moments.”
– DOUG THORNTON, REGIONAL VICE PRESIDENT OF SMG, THE COMPANY THAT MANAGES THE SUPERDOME IN NEW ORLEANS.
http://www.signonsandiego.com/uniontrib/20071104/news_lz1h04porch.html
Banks hit again as credit fears spread
Our International Staff
Published: November 2 2007 19:52 | Last updated: November 2 2007 20:54
Fears of a fresh wave of losses arising from the credit squeeze spread around the globe on Friday, depressing stock markets in Europe and Asia and savaging bank shares for the second day in a row.
Despite a surge in US employment growth last month, investors remained worried that banks and other financial institutions still faced heavy losses arising from the troubled US mortgage market and related securities.
http://www.ft.com/cms/s/9ce8e2aa-897b-11dc-b52e-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F9ce8e2aa-897b-11dc-b52e-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
I’m not sure I really believe this employment surge yet. I want to see the numbers when they are revised. Apparently, the Fed doesn’t either.
Also, I didn’t know that credit card debt was being repackaged like mortgage debt. Wait’ll that one hits the fan. Subprime redux LOL.
Roidy
Credit card securitization is ancient history. I did credit card securitization deals in the mid 90’s in NYC. They were considered something of an inovation at the time.
Problem is, that people think they know what the worst case scenarios are on these things because they did them through the last downturn. The coming one is going to be a whole new ball game. The top rated stuff may be a whole heck of a lot less worthy than indicated.
While out hunting this weekend, a few thoughts:
Mssrs. O’Neal and Prince are out near the top.
Citigroup is meeting to determine not only the resignation of Mr. Prince but also to attempt to quantify further writedowns. Merrill will be meeting this week to quantify further writedowns.
In 9 days last quarter, the daily at risk trading losses were exceeded. This was the first time that daily losses exceeded the at risk model since 1998, when there was one day of losses. The daily Value at Risk is 3X greater today than in July because of existing positions.
Merrill denies ‘inappropriate transactions’
By David Wighton in New York
Published: November 2 2007 23:23 | Last updated: November 2 2007 23:23
Merrill Lynch denied engaging in any “inappropriate transactions” involving mortgage-backed securities following a report in the Wall Street Journal alleging that it did deals to postpone the recording of losses.
Merrill said in a statement on Friday that it had “no reason to believe” that it had done deals designed to avoid writedowns. “Such transactions would clearly violate Merrill Lynch policy.”
http://www.ft.com/cms/s/0c4f47ca-8994-11dc-8dff-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F0c4f47ca-8994-11dc-8dff-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
It just gets harder by the day to keep elephants hidden under the living room rug.
BTW, isn’t the Superfund SIV intended to serve the same purpose (delaying Wall Street’s day of subprime reckoning) as these hedge fund deals? Not to mention the similar purpose that was formerly served by Enron’s offshore accounts?
SCRAMBLING BULL
• The Issue: Merrill Lynch & Co. has been off-loading some of its mortgage-related assets to hedge funds as part of an effort to cap its exposures.
• Backdrop: Merrill’s mortgage assets fueled a $7.9 billion third-quarter write-down, leading to the forced retirement on Tuesday of Chief Executive Stan O’Neal.
• Regulatory Question: Did some of Merrill’s recent mortgage asset sales effectively postpone the reckoning for some write-downs?
Deals With Hedge Funds May Be Helping Merrill Delay Mortgage Losses
By SUSAN PULLIAM
November 2, 2007; Page A1
Merrill Lynch & Co., in a bid to slash its exposure to risky mortgage-backed securities, has engaged in deals with hedge funds that may have been designed to delay the day of reckoning on losses, people close to the situation said.
The transactions are among the issues likely to be examined by the Securities and Exchange Commission. The SEC is looking into how the Wall Street firm has been valuing, or “marking,” its mortgage securities and how it has disclosed its positions to investors, a person familiar with the probe said. Regulators are scrutinizing whether Merrill knew its mortgage-related problem was bigger than what it indicated to investors throughout the summer.
In one deal, a hedge fund bought $1 billion in commercial paper issued by a Merrill-related entity containing mortgages, a person close to the situation said. In exchange, the hedge fund had the right to sell back the commercial paper to Merrill itself after one year for a guaranteed minimum return, this person said.
http://online.wsj.com/article/SB119396956371280131.html?mod=US-Business-News
They are just adding more “cups” to the: “three cups and & a pea” game.
Lots of rats appear to be jumping off CFC’s sinking ship.
Countrywide Directors’ Dilemma
By James R. Hagerty and Joann S. Lublin
Word Count: 1,112 | Companies Featured in This Article: Heidrick & Struggles International
Critics have long questioned the outsize pay packages and lucrative share sales of Countrywide Financial Corp.’s chairman and chief executive, Angelo Mozilo. But outside members of the company’s board also have above-average compensation, and three of them have sold more than $2 million of Countrywide shares apiece since mid-2006.
The directors are likely to be in the spotlight in the months ahead as the nation’s biggest home-mortgage lender by loan volume struggles with rising defaults and a drooping share price. They face tricky choices in deciding how much to challenge 68-year-old Mr. Mozilo, who co-founded the company 38 years ago.
http://online.wsj.com/article/SB119404440821681023.html?mod=todays_us_nonsub_money_and_investing
November 2, 2007, 7:00 pm
First O’Neal, Now Prince
Posted by Mark Gongloff
The news that Chuck Prince is stepping down has Citigroup shares jumping in after-hours trade, though volume is light at 7:00 on a Friday night.
According to Nasdaq, Citi shares, which fell 2% in regular trading, are up 2.6% to $38.92 after the closing bell. It’s the most active stock, but that’s not saying much — volume is about 1.8 million shares.
A few days ago, MarketBeat posted a chart of financial-sector CEOs in trouble and wondered when Mr. Prince and Jimmy Cayne of Bear Stearns were going to follow Merrill Lynch’s Stan O’Neal to the sidelines. That chart is reproduced (with a few tweaks) below. My, how things have changed in the days since.
http://blogs.wsj.com/marketbeat/2007/11/02/updating-marketbeats-big-chart-of-ceo-pain/
Putting bold into the middle of the link backfired…
big-chart-of-ceo-pain
http://blogs.wsj.com/marketbeat/2007/11/02/updating-marketbeats-big-chart-of-ceo-pain/
Will Cayne be the next CEO to face mutiny?
(Sorry, it was too good to pass that one up.)
Mr. Cayne should be replaced because he cheats at golf.
or as Mr. Bobby Jones said “You might as well praise a man for not robbing a bank.” when asked about reporting a penalty stroke on himself. If you cheat at golf, you will cheat on anything.
Mulligan $tew
Is Cayne the one who has been twisting up fatties at the club after a round of golf and getting ready to get some serious contract bridge going in the cardroom?
get ready for a stock spliff.
“CNBC has learned that the Hollywood Country Club in Deal, New Jersey is examining whether Bear Stearns ceo Jimmy Cayne changed his golf scores to allow him to win the July 4th tournament at the club.
Cayne’s golf-game had made news earlier in the month after news reports said he had gone on a golf outing during some of the worst days in Bear’s subprime hedge fund crisis.
The Hollywood Golf Club president Harvey York has formed a three person committee to examine a complaint against Cayne, according to CNBC reporter Charlie Gasparino…”
Then he played bridge and is alleged to have smoked marijuana and snorted cocaine. Generally, not regarded as a reputable individual.
“Then he played bridge and is alleged to have smoked marijuana and snorted cocaine. Generally, not regarded as a reputable individual.”
Funny that two out of those three will get you elected President. Point is that I don’t think that we should equate pot smoking with ill repute.
MrBubble
“As long as the music is playing, you’ve got to get up and dance. We’re still dancing.”
Chuck Prince in July…
Describing how he liked to play musical chairs during his passage, aboard the $$ TightAntics
My puts on banks, brokers and mortgage insurers were up about 30% last week. I spent time scouting out midsized banks witht high RE exposure. I’ve had puts acumulated over the last 3 months on the following banks, brokers and mortage insureres (mostly Dec expiration): BKUNA, MER, BPOP, MTG, CNB, NCC, RF, TSFG, FMER, ZION and COF. ZION and BKUNA are the best positions–up over 300% so far along with mortgage insurer bought when bad news was announce a couple of weeks ago (also up 300% or so). Let’s see what the next few weeks will bring.
We are in a strange period…
Think about the biggest fish in the pond, financially?
My guess is, most of them are packing their parachutes presently, and it takes a while to do it in a manner that doesn’t scream PANIC.
The Prankery going on in things Wall Street lately, has been nothing short of a miracle. More bad news and fraud than you can shake a stick at, and more coming, and like the little $team engine that could, it keeps plodding upwards, somehow.
It’s all very entertaining…
Yesterday’s junk mail:
Dear Ms Leigh,
You are invited to enjoy the rewards of Discover More!
Balance transfers: 3.9% until Jan 11; then standard 13.9%
Cash Advance: 22.99%
Default rate: 28.99%
You’re preappoved for a Chase card!
Balanced Transfer: 8.99%
Cash Advance: 24.24%
Default: 32.24%
Overdraft: 13.99%
You’re just a click away for a BOA Platinum Plus MC!
Balanced Transfer: 0; then 15.24% 10/08
Cash Advance: same
Default: 29.99%
Overdraft: depends on $ amount
In as little as 60 seconds online! Gold MasterCard by Air Force Assoc.
Balanced Transfer: 11.99%
Cash Advance: 16.74%
Default: 21.74%
Overdraft: 29.99%
Whew, I’m exhausted
Loan shark rates! Start shopping!
That Discovercard rate for 4 years at 4% is cheap money. You’re a guaranteed winner if you can afford to repay monthly. Just buy a CD or be even more risky and buy something else that’s likely to appreciate.
I posted actual offers I received on Saturday. Thought you ladies a gents would like a good laugh.
I wouldn’t dream of replying to these dolts.
We’ve had the same card for over 10 years and carry a zero balance, even though we use it for almost everything.
1.9% teaser rate for Bank of America Platinum Visa. It’s a winner. Invest in T-bills for the teaser rate period and that’s being “ahead of the game.”
Plus, I was trying to get the information out after the teaser rate, should have made that apparent…appologies.
Chase offered me 0% on balance transfers until November 2008 and no balance transfer fee. Your FICA must be low.
Housing crisis hits Midwest hard
Foreclosures on the rise amid lagging economy in region
http://www.chicagotribune.com/services/newspaper/printedition/sunday/chi-foreclose_bdnov04,0,5988353.story?coll=chi_tab05_layout
“I don’t want to be put out in the middle of winter,” said Pointer, whose renegotiated payment still will not be much of a bargain: $1,300 a month. Said Bond: “She’s not out of the woods yet.”
This woman would have been better off letting the house go into foreclosure and moving into her aunt’s basement. Renegotiating a payment from $1500 down to $1300 is hardly going to help. On the other hand she had a 5.5% fixed and then refi’d to pay off high credit card bills. This is just delaying the inevitable and I wouldn’t unpack any boxes.
Just where are they going to put 3 million new homes?
http://www.timesonline.co.uk/tol/news/politics/article2796810.ece
Two years ago, economists, Realtors and others carried on a lively and unresolved debate about whether skyrocketing housing prices constituted a bubble — a bubble that was destined to burst.
Today, in Stanislaus, San Joaquin and Merced counties, to say the bubble has burst is an understatement. Plummeting prices, a major slowdown in home sales and widespread predictions that things will get worse before they get better suggest that this is something far more serious than a routine market correction.
Housing market now can return to sanity
http://www.modbee.com/opinion/story/111517.html
The last time a pyramid scheme went wrong, and the populace was armed to the teeth, was in tiny Albania, a decade ago…
“The pyramid scheme phenomenon in Albania is important because its scale relative to the size of the economy was unprecedented, and because the political and social consequences of the collapse of the pyramid schemes were profound. At their peak, the nominal value of the pyramid schemes’ liabilities amounted to almost half of the country’s GDP. Many Albanians—about two-thirds of the population—invested in them. When the schemes collapsed, there was uncontained rioting, the government fell, and the country descended into anarchy and a near civil war in which some 2,000 people were killed. Albania’s experience has significant implications for other countries in which conditions are similar to those that led to the schemes’ rise in Albania, and others can learn from the way the Albanian authorities handled—and mishandled—the crisis.”
Can the same thing happen here?
Discuss…
forgotten link sausage…
http://www.imf.org/external/pubs/ft/fandd/2000/03/jarvis.htm
Good read , thanks .
Looks like the Level 3s discussed above?
On a more tinfoiley note
http://www.atimes.com/atimes/Global_Economy/IK03Dj03.html
Many people out there already believe the government is ready to act, should Albania occur here.
And then, there’s also the government arming people with these types of theories by passing scary laws:
http://www.globalresearch.ca/index.php?context=va&aid=7243
My appologies…this is the link for the tinfoil
http://www.google.com/search?hl=en&q=fema+prisons
This is the correct tinfoil link…my appologies.
http://www.freedomfiles.org/war/fema.htm
If it walks like a recession and quacks like a recession, it is probably a recession.
New car sales fall as buyers shun debt
Dealers: ‘Tenuous financial state’ leaves consumers wary
By Dean Calbreath
STAFF WRITER
November 3, 2007
New car sales slumped in San Diego County and the rest of California through the first nine months of the year, as debt-laden consumers stayed away from car lots despite rock-bottom interest rates and other inducements, according to the latest data from the auto industry.
Although some auto brands continue to do well – especially fuel-efficient foreign models – auto sales have been damaged by high fuel prices and a sudden reluctance among consumers to take on too much debt.
The California Motor Car Dealers Association noted that “many California households are in a highly tenuous financial state” after running up credit card bills and mortgage payments over the past several years.
“The subprime mortgage fallout and strained credit markets are identifiable symptoms and consequences of a consumer sector that has overspent and undersaved,” the association said in a statement last week, as it reported that car sales slipped 9 percent in the first nine months of this year compared with the same period last year.
In San Diego County, sales of new vehicles from January through September were 5.1 percent lower than the same period of 2006, with a decline of 2.5 percent for new autos and 7.8 percent for new trucks, according to a report issued this week by the New Car Dealers Association of San Diego.
Since hitting a peak of 163,004 new car sales in 2004, sales have been on the decline in San Diego County, dropping 3.8 percent in 2005 and 8.1 percent in 2006. The association predicts that sales will decline 4 percent in 2007 followed by a 2.1 percent drop in 2008. It will not be until 2010 that new car sales exceed the peak set in 2004, the association said.
http://www.signonsandiego.com/uniontrib/20071103/news_1b3autos.html
without growing demand for credit, our economy shrinks.
If you are in the deflation camp, can handle a bit of lowered consumption, and have all the gadgetry thats necessary…you are in the sweet spot.
If however, you are in the inflation camp, have a load of debt,and love to live beyond your means…. get ready for pain.
I want the pain, we need the pain….the pain is overdue.
The Fed digs us a deeper hole
http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/TheFedDigsUsADeeperHole.aspx
“No shortage of ink was spilled last week about the Fed’s quarter-point rate cut. Yet none of it acknowledged the big elephant in the room: Why in the hell was the central bank easing the federal funds rate with (1) the dollar at a new low, (2) oil at $90, (3) gold at $800, (4) virtually every commodity on the planet going wild and (5), despite government statistics to the contrary, inflation raging?”
Apparently the Fed has rewritten its mission statement, which used to be about leaning into the wind, but has apparently morphed into hiding elephants under the living room rug.
you know prof bear, i could not help but notice some of the language in that article sounded familier to me. me thinks the composer of the article has been reading this blog.
Because they think since wages are not out of control and consumption is low, there is no threat of inflation.
More SLOPPY REPORTING from the NY Times.
I haven’t had a chance to examine the titles that are on-line, but the woman crying her eyes out on p. 16 of the “Week in Review” in today’s NY Times (”The Subprime Landscape”) because she’s “losing her home” owns at least two properties in her name in Orange County, FL, and one in Apopka
http://www.ocpafl.org/docs/record_search.html
(Search by name). And the co-buyer owns a separate property too.
These people seem more like “Flippers” to me. Of course, the Times reporter can’t bother doing an Orange County public records search before printing the photo of a weeping woman.
Mr. Market is sending a clear message to the financial world about the effectiveness of the “too-big-to-bail” business model, embodied in banking giants like big C. I hope someone at the Fed is listening closely.
The systemic risk posed by the dimwitted high-risk subprime gambling strategies employed by these banking behemoths jeopardizes the global financial order. If the global financial system goes up in smoke, the blame should be placed squarely on the shoulders of policymakers who legitimized the too-big-to-fail bailouts that brought about the status quo.
Citigroup chairman is poised to depart
By Eric Dash and Landon Thomas Jr.
NEW YORK TIMES NEWS SERVICE
November 3, 2007
NEW YORK – Citigroup’s embattled chairman and chief executive has told senior officials at the bank that he expects to leave after an emergency board meeting this weekend, a banking industry official with ties to Citigroup said last night.
The chairman, Charles Prince, had indicated that he expected to leave during the board meeting, the official said. Directors are also expected to discuss the possibility of another large write-off.
“The entire organization is in uproar, and people have been looking for leadership,” said one Citigroup executive familiar with the situation. “The organization is waiting for something.”
“At some point, the company is worse off or better off without the guy,” the official said. “That collective point has come and passed.”
People close to the board said a search committee would be formed to find a successor.
Prince’s departure would be a crushing blow to the legacy of Citigroup’s founder and former chairman, Sanford Weill, and will lead to renewed calls to break up the company.
Not only was Prince Weill’s hand-picked successor, he was his chief lawyer who helped engineer a series of big deals that transformed Citigroup into a sprawling banking giant.
http://www.signonsandiego.com/uniontrib/20071103/news_1b3citi.html
The crashing bubble reaches the Sunday comics:
http://www.mrboffo.com/daily.html
RETIRING ON YOUR INTEREST. If a buyer’s credit or financial profile is shaky, mortgage lenders don’t want their business — but individuals who want to juice up their retirement savings may.
About 2 percent of Americans who hold individual retirement accounts opt for “self-directed” accounts that allow more exotic investment choices, including providing a mortgage to someone else.
With tighter lending conditions, more IRA holders are filling the gap, says Katie Lawrence, a spokeswoman for Guidant Financial Group, a Bellevue, Wash., firm that sets up self-directed accounts.
“Since the average account is about $150,000, not many individuals are providing the big, primary mortgage,” says Lawrence. “But they’re doing bridge loans for people who have bought a house and still hold their old one, and they also do home-equity loans.”
These investors expect a healthy return — “most of the loans carry double-digit rates,” says Lawrence.
http://www.chicagotribune.com/business/chi-melia_re_11-04nov04,0,5096863.story
11/5/2007 BBC reviews Cleveland OH foreclosure crisis.