Bits Bucket And Craigslist Finds For November 22, 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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Name:Ben Jones
Location:Northern Arizona, United States
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Ha! Ben, do you ever take a day off, my friend?
Happy Thanksgiving!
I never know what I’m going to do on holidays, just make it up as I go along.
Sounds like you’ve learned something from Wall Street Ben
Thanks again for all you efforts and Happy ThanksGiven to you & your family.
Happy “T” Day to Ben and all the Fav’s and Reg’s!
HAPPY THANKSGIVING!
Happy turkey day everybody
gobble gobble
danni
Happy Thanksgiving, Ben. Thanks again for creating a blog that’s made mine a lot happier than it might have been!
Happy Thanksgiving!
Check out the poster in the article linked below. This article suggests to me that the housing bubble is getting past the denial stage and is morphing into the more dangerous anger phase. How will CFC’s PR team deal with protest marches?
“got turkey?”
http://www.signonsandiego.com/uniontrib/20071122/29.html
Are all turkeys as well-tanned as the one depicted in that poster?
“The group also asked company executives to donate money from bonuses to create a fund for people at risk of foreclosure.”
Perhaps they could also ask for company executives to donate money from the proceeds of massive stock sales that were carried out before CFC’s share price crashed?
Look, I’m no fan of countrywide or the whole industry for that matter but there comes to a point where borrowers have to be responsible for their decisions. If it were up to me, I’d not allow anyone with a big credit card balance to go buy a new plasma TV on credit, but in our market economy people are free to make their own decisions, for better or for worse. I’ll admit I tried to make a few bucks buying puts against CFC but was foiled twice, once by B of A, and once by the Fed - I’m probably one of the few who actually lost money playing CFC but I’m not whining for a government bailout since I made my own decisions.
Lenders like CFC, who exploited financially unsophisticated borrowers by encouraging and enabling them to borrow amounts they could never reasonably hope to repay in order to enrich top level CFC executives, should face the full consequences of the mess they have made. I am not in favor of a govt bailout, as this would force innocent third parties (U.S. taxpayers with no connection to CFC or their clientele) to share the costs.
“…I’ll admit I tried to make a few bucks buying puts against CFC but was foiled twice, once by B of A, and once by the Fed…”
Oh to have purchased CFC leap puts about six months ago…
Better yet, LEAP puts on FNM, FRE, ABK & MBI. It’s not like there wasn’t plenty of warning (especially from Mish).
“Lenders like CFC, who exploited financially unsophisticated borrowers by encouraging and enabling them to borrow amounts they could never reasonably hope to repay in order to enrich top level CFC executives, should face the full consequences of the mess they have made.”
I fully agree.
I have a CFC mortgage, 45% down, 30yr fixed at 5.5% APR. I was constantly pressured by each mortgage lender toward a hybrid product, which meant more fees. I finally told the CFC folks that I’d walk away from the closing table if I saw anything other than a 30yr fixed. Today, my monthly CFC statement includes credit card offers linked to my equity as well as (auto, health, home, etc.) insurance offers. America’s “Flim-Flam Man” financial predators have no shame.
I wish everyone on this blog A happy thanksgiiving and to Ben who’s blog has given me great insights into the RE Markets and penetrating analysis of economic forces.
The link was intercepted…with a questionaire…so now I guess I’d don’t have an identity crisis anymore because…I’m now listed as 101 year old female living in Chula Vista born on April 1st!
A very Happy Thanksgiving to you all, especially Ben.
Cheers!
Happy Thanksgiving to All!
Happy Thanksgiving everybody. And Ben, for heaven’s sake, take the rest of the day off. By tonight we’ll all be to bloated to read anything anyway
Happy Thanksgiving, Ben and everyone.
Don’t forget to hug your loved ones.
Happy Thanksgiving to all. I’m so thankful for the education and laughs I’ve received from the blog. Ain’t got much money, ain’t got a job, none of he plans worked out quite right, really not too interested in investing but still want to know how it all works. On the other hand, no debt, healthy, getting ready to eat good food, take a swim and watch movies with family - what’s not to love. I hope everyone enjoys their day.
CHEERS!
Happy Thanksgiving!!!
Happy Thanksgiving to all the HBBers out there!
Check this out. Two wrongs make a right? OMG. This is wrong on soooooo many levels!
http://www.freep.com/apps/pbcs.dll/article?AID=/20071122/BUSINESS01/711220337/1014
BTW, my sis is cooking dinner this year. A first for me in countless years! I bought wine…yes, just wine!
I feel like a slacker!
(((Ben)))
GM losing money via GMAC, so they’re gonna buy Northern Rock to dispel the buzz about an imminent bankruptcy. Yeah, that makes a lotta sense. NOT
Ya know Az, they are freeking nutcases!
This does NOT make sence to a ten year old! (Doing fuzzy math!)
Sigh,
Leigh
AZ it does make sense, I will have a good Thanksgiving and my Dec. rent paid by selling “illegal” 15,000 song collections of my dj music in mp3 format on 25 dvd’s, to other dj’s who just want to load up their computer.
George Bush is the GREATEST president we ever had in creating UNDERGROUND JOBS!!!!..dang anyone want to pay me on the books in NYC?
PS: check out the GF website on my handle…Thanks!
Perhaps Ben will do you a big favor and remove this foolhardy post.
Yeah, I don’t quite get it either.
Are you trying to get yourself arrested?
I got that covered…the Riaa doesn’t sue black people….never happens…so a good reverse discrimination lawsuit would be just the thing to even the score with Jesse Jackson.
But i must add i owned well over 1000 cd’s before Napster even existed……and close to 6000 records, all paid out of my hard earned cash.
Since cd were price fixed until recently, and we all were overcharged $4-5 each…plus a lot of the music transfered to cd just sounded awful.
The truth is i just stared downloading songs this year, mostly obscure rock northern soul…stuff that is rare…
And I agree all the McMusic being made today is garbage mostly you use it once or twice then throw it away, so why pay for it? How many “artists” will be around in 5 years?
The real true FANS want the original article and will pay the $15+ to order the cd from the website…i don’t see that changing anytime soon. The casual user probably wont pay to see the performer live, so the file will get deleted soon anyway.
So in reality its “illegal” because i am selling a copy that i OWN…so what about all you people who copied cassettes on those double cassette decks we all had in the 80″s….hmm
“I got that covered…the Riaa doesn’t sue black people….never happens…”
It must be nice to play the race card, at least in certain situations. White boys don’t enjoy such advantages in post-civil-rights-era society.
RE: “illegal” 15,000 song collections of my dj music
I’ve been collecting music since 1961 and never stole a song in my life.
Then again, given the garbage that’s bein’ passed off today as music…well- I guess you get what you pay for.
Lennon lives.
So true hd: When people get hip to the fact that the only way artists get paid if if people buy music, then they’ll realize why there’s not much new music worth listening to. Most people don’t understand the business and how the participants get paid, they only supposedly know big corporations making big profits. Then again, the general public doesn’t understand how any business operates.
RE: When people get hip to the fact that the only way artists get paid if if people buy music,
ATC…There’s music in my collection that I could not even put a price on given all the memories and pleasure the songs have provided…like 69 cents for a 45rpm of Roy Orbison’s “Pretty Woman”. I mean WTF!
It all boils down to having no respect for the artist or the efforts of those (aka George Martin) to bring it all to fruition.
But you are so right. Nobody has a clue.
Actually if you have ever purchased a used recording versus buying it new, technically you are depriving the artist of their money. There was a short movement to outlaw used CD sales, but it didn’t go far.
I’m really not sure who has more power, the RIAA/MPAA or NAR. I’d say the first two.
One of the biggest underground torrent sites was busted last month. It was interesting to see artists like Trent Reznor of Nine Inch Nails say that they used the site, and miss it, and it was better than iTunes. A good number of artists are moving to a model where they directly release their music. This is going to seriously threaten the power music companies. They aren’t in control anymore, and none of them are willing to admit that the product they sell just isn’t worth as much as it once was. Theh are in the denial phase like home sellers.
anycdj should be careful though, there is an organization that verifies that DJs have legal copies of the music they play, and also verify that some yearly royalty is paid.
If you want to support local, and national music, buy tickets to see their show. And while you’re there, buy some of their merchandise AT the show. More and more artists are taking control of their merch, and they make a killing. Gwen Stefani, John Legend, Dave Matthews are a few of the artists who are really leading the way. MusicToday is a company that alot of artists are now using, check them out. http://www.musictoday.com/
When I was a college student at UCDavis, we used to tune in to KZAP at midnight on Friday nights when they would play the latest LP so listeners could record it. I also had recordings from the Cow Palace when Led Zepplin, Janis Joplin, CS&N, and the Dead would perform… those were the days.
O/T — my best friend has a collection of 5-10,000 vinyl albums. He has bought records, then CDs, by the dozen, weekly, for the 40 years we’ve been friends. He really proud of himself — just acquired a turntable that apparently converts the output directly to MP3. Nifty technology, particularly to me since I can’t hear frequencies beyond MP3 level/quality anyway. N.B.: He is not going to sell the MP3s — it’s so he can play the music in his car.
You have heard the saying “two wrongs don’t make a right.”
Perhaps they believe two money-losing corporations can make a profitable business?
Hi P’Bear!
egggggggggzakly. I’m roaring this morning!
Seriously, how on God’s green earth will this profit?
Grrr…
Leigh
There must be a plan for injection of government moneys at one end or the other (maybe both?).
Another thought: Perhaps it would be easier for the merged firm to hide pooled balance sheet (or off-balance-sheet) losses than for them to hide them separately?
What’s next, acquire some hopeless homebuilders? GM/Beazer homes, built by the UAW?
Maryland home sales tumble nearly 30%
“Despite the tumbling sales, the median sale price of existing homes in the Baltimore area managed to rise 1.7 percent in the July-September quarter compared with the same period last year”
Should’t this number be related some how?
I don’t understand!!!
this the link
http://www.baltimoresun.com/business/realestate/bal-te.bz.homesales22nov22,0,4654561.story?coll=bal_tab01_layout
A lot of localities have gone through this (rising medians, falling sales) before the median starts to go down. To give the shortest possible answer to your question: the sales volume and the prices are related, but there’s a time lag.
Also, the changing “mix” of homes that actually get sold may prop up the median even when prices are falling across the board. Check out the Case-Shiller index to see if repeat sales of the same house in the Balto area are rising or falling.
Sorry, I guess Baltimore is too small for Case & Shiller. However, the C-S index for Washington DC has been falling since May of 2006.
Thanks for the explanation.
May be we will see price drop in the near future. Real state agents keep saying that Baltimore is different. But I can see houses list from the summer with newly “”Reduced” signs added and still not moving.
Baltimore is not different. It’s going to drop like a rock.
It looks like Balto took the same hit NY state did last month for Sept. 07 sales. I’ll continue to stand by my contention that Q3 of 2007 is/was a significant milestone in the wheels coming off the housing lunacy.
Median Sales Price is totally worthless in evaluating this bubble market. Try selling a similar house 40 miles and 2 hours travel time from an employment center with $4.00 a gallon gas vs. the same house 10 miles away. Both houses in the same city fall into the median price, but one house clearly is more desirable than the other.
How soon we forget the #1 valuation fpr homes is Location, Location, Location
“Median Sales Price is totally worthless in evaluating this bubble market.”
Not so. Though it is not an accurate measure of current market value, the median is broadly indicative of underlying trend (witness the declining national median in the wake of the housing bust, for example).
“the median is broadly indicative of underlying trend”
The median trend in Salt Lake City is positive (+) for Oct..based on your assertion, the broadly underlying trend is Plus. I know for a fact 30% of all home sales for Las Vegas came from 4 zip codes out of 66 Zip Codes in Clark County. The median for Las Vegas is down 7.7% for Oct..doesn’t it help to know even in this declining market, 4 zip codes have some activity. I will put my money on the 4 active zip codes in negavitve Las Vegas before I would invest my money in positive Salt Lake
Hey, Ben, be sure and see the Morning Snooze article about house prices being down YOY in Dallas now. ABOUT FREAKING TIME. If I had to read one more article about Dallas being immune to this crash, I was gonna heave.
OK, good morning Scott Burns!
and here’s another one. Food pantries facing big shortages. Cost of housing, food and gas a factor in need.
http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/112207dnmetpantries.14f902c.html
wonder if any hedge fund kings with six Porsches in the garage ever think about this or donate a few bucks. Doubt it.
I drove by a food pantry in downtown Clearwater last Monday during the afternoon and there was a line around the corner. Until then I had no idea it was even a food pantry.
It seems that demand has increased.
Florida is getting whacked hard. I am donating a lot to the food pantry this winter, like, going to the store and buying stuff (already cleaned out the cupboard months ago).
In the last month we’ve seen a major uptick in robberies. Most of these are poorly planned and the perps don’t tend to get away with it. Desperation is finally hitting home. RE advertising has also fallen off a cliff, but strangely they keep bleating “unemployment low, good time to buy…”
SOMEBODY must be unemployed, or they wouldn’t be ripping off stores at the mall and trying to pawn the stolen goods across the street!
Happy Thanksgiving ya’ll !
Maybe going to jail for these perps is what they are counting on..
food,
shelter,
and a paycheck for doing “license plates” ?
Let the foreclosures handle themselves?
SOMEBODY must be unemployed, or they wouldn’t be ripping off stores at the mall and trying to pawn the stolen goods across the street!
They don’t count as unemployed because they aren’t looking for work. As far as the gov’t is concerned they are self employed and all is well.
Scott Burns…grrr.
RE: Scott Burns…grrr.
What’s wrong with Scott Burns?
Cripes, the guy was way ahead of the housing bust.
Runs around in a used AirStream trailer for half the year to get out of property taxes and maintenance of a SFDH which I always thought as pretty astute.
$516 Trillion…
http://www.bloomberg.com/apps/news?pid=20601087&sid=aM.Dn6UPbtfs&refer=worldwide
Hello wmbz,
This is going to end well. I am going to take another shower (shudder).
Investors have been turning to credit derivatives as a way to speculate on a growing risk of defaults amid record U.S. mortgage foreclosures. The Markit CDX North American Index of credit-default swaps on 125 investment-grade rated companies has almost tripled since February to 90 basis points from 33.
Leigh
Oh yes! I completely agree that this will end well. We will have a wonderful recovery from this credit crunch, gas crisis, and global housing mess before the turkey leftovers are gone. Leave it to Ben and Co. They know what to do.
If we don’t recover by then, I feel much better listening to Jim Rogers of Beeland brag about how he will divest of dollars and THEN Jim R. - at least - will avoid all problems.
$516 trillion is only 10 times the whole global economic output. I just don’t see what could go wrong! All of you on this blog and all of the others are a bunch of pessimists.
Credit crunch indeed! You can avoid risks if you just invest in another hedge fund or two.
Roidy
P.S. We are “diverse” on this blog and do not discriminate, so for those of you who are “sarcasm impaired”, please email and I’ll explain.
P.S.S Got popcorn, medium coke, Raisinettes?
LOL ACH
Don’t forget to add to your P.S. “not had their first cup of coffee yet”
What comes after trillion….
LOL
crying ever so softly.
For future reference, what is the next order of numeric magnitude beyond “trillion”?
“Quadrillion” One petabuck. Coming soon to a total derivative exposure near you.
Thanks — that was my daughter’s guess (and I guess she was right!). $1 quadrillion in derivatives outstanding, here we come?
The Money Quote: “Credit-default swaps, contracts designed to protect investors against default and used to speculate on credit quality, led the increase, expanding 49 percent to cover a notional $43 trillion of debt in the six months ended June 30, the BIS said in a report published late yesterday.”
Surely there is no counter-party risk there.
Yikes!
Good morning Baltimore!
…median sale price…
Rich people…er…those that don’t fit into normal demographics…pushing the median upward.
OK. Let’s do math.
Ten homes sales for a month?
Eight sale for $200,000.00. One sale for $100,000.00. One sale for $1,000,000.00. Median sale = $270,000.00.
Clearly eight sold for $200,000.00. But that pesky high one drove up the median. Medians are clearly misleading! Welcome to NAR reporting. (pardon sarcasm on such a giving day).
Leigh
Good morning to you too Leighsong !
That’s make sense. I saw a lady the other day barging about a house they bought with 1$ million that is twice the one the one they sold in California with the same price. I guess she will bite her hand when the price goes down to 700K
Maybe I don’t know what I’m talking about, but it seems to me that your example is confusing the median with the mean.
Blush. Ask Dr. Math. Need more coffee!
The MEAN is the arithmetic average, the average you are probably used
to finding for a set of numbers - add up the numbers and divide by how
many there are: (80 + 90 + 90 + 100 + 85 + 90) / 6 = 89 1/6.
The MEDIAN is the number in the middle. In order to find the median,
you have to put the values in order from lowest to highest, then find
the number that is exactly in the middle:
80 85 90 90 90 100
^
since there is an even number of values, the MEDIAN is
between these two, or it is 90. Notice that there is
exactly the same number of values ABOVE the median as
BELOW it!
Curtsey,
Leigh
The MSM refers to the median as a way to window dress the housing sales slump situation. If the median goes up, it may well be because there is a skew to homes selling that are the higher priced ones. No price reductions have to be stated by the MSM. They can gloss over lower prices by saying the median has risen. It is this way up here in ME I bet. The median has gone up 0.6%:
http://tinyurl.com/35oynd
Thus to extend your previous comment, Median is even more deceptive than mean, because
100K, 100K, 400K, 410K, 500K = median of 400K, mean of only 300K
This is the reporting case here in San Diego, especially since sales have dropped from 100’s in a zip code to almost single digits.
Since in the current credit conditions only “a healthy mix of the wealthy and ignorant” appear to be making purchases, this drives the median artificially upward, even with dropping sale prices.
At least, this is the case in San Diego right now.
Good to see B’more finally getting hit. I’m from the area and my friends and family have been in denial saying prices will never fall due to DC jobs and the stupid BRAC thing. I just spoke to a friend living there and I think I converted him to a housing bear. Smart guy but it’s amazing how many people aren’t aware of all the reindeer games that were going on, especially with lending. He couldn’t believe lenders were doing ’stated income’ loans………
The home builders are sitting on a ton of inventory. Check out the balance sheet of any builder and it will look like this:
DR Horton Total Inventory
(in millions)
11,343.10 (2006
8,486.80
6,567.40
5,082.30
4,343.07
2,804.38 (2001)
They have to sell this inventory some time.
Freddie, Gets worse…
http://www.washingtonpost.com/wp-dyn/content/article/2007/11/21/AR2007112102335.html
Dang. No law degree…snort.
“Accurate appraisals are fundamental to our effective credit risk management as well as to the long-term success of the homebuyers we are chartered to serve,” Palombi said in an e-mail. “Freddie Mac has no incentive to accept inflated appraisals on the loans we purchase and guarantee. Indeed, Freddie Mac has a long-standing commitment to fighting mortgage fraud, as evidenced by its leadership role in the industry through our active internal fraud investigations, quality control activities, Freddie Mac-instituted remedial steps, and assistance with criminal prosecutions”
Wake me up when this train wreck is over!
Leigh
Who needs comedy writers from Hollywood when we have this piece of comedy from Freddie Mac.
“we have no incentive” …. hahahaha
RE: “Freddie Mac has no incentive to accept inflated appraisals on the loans we purchase and guarantee.
Excuse me, while I reach for my wastebasket to barf in.
The greed, ignorance and damage of this bubble provides all the material and backdrop a budding writer needs to write a great novel in the style of Tom Wolf.
“Indeed, Freddie Mac has a long-standing commitment to fighting mortgage fraud, as evidenced by its leadership role in the industry through our active internal fraud investigations, quality control activities, Freddie Mac-instituted remedial steps, and assistance with criminal prosecutions.”
hahaha. Did he say this with a straight face?
The Government is investigating, shareholders are suing, Goldman and Lehman Brothers are charging consulting fees.
Freddie might as add Blackwater to the list, for protection.
I hope the class action suit against Freddie Mac and the subpoenas delivered to both Fannie and Freddie are signs of more legal actions to come.
RE: I hope the class action suit against Freddie Mac and the subpoenas delivered to both Fannie and Freddie are signs of more legal actions to come.
Cuamo’s investigation into eAppraiseIt appears to be really blowning the roof off the facade of the GSE’s as clueless bystanders- as it should (enormous grin).
On the news last night, it was reported that the nation’s mayors have gotten together (or are getting together) to come up with solutions to the foreclosure crisis and mortgage meltdown, which I gather is cutting deeply into inflated real estate tax revenues. This is the same bunch that last year or the year before decided we needed MORE illegal immigrants to do cheap city labor. I guess public officials are being scaped from the bottom of the barrel these days.
It’s interesting that they think they have the authority or power to do anything about foreclosures or bad mortgages, but, then, big fish in little ponds do tend to take their imaginary importance seriously.
On all the news’/views programs I heard in the background yesterday, the holders of ARMS and other loan time-bombs were depicted as a pitiful victims. This was true on Lou Dobbs Tonight, as well, which was surprising. Somebody needs to get in touch with Dobbs and his staff and educate them about the millions upon millions of criminal Americans who knowingly took out BIG bad loans thinking they were hoodwinking the system on the way to instant riches. If millions of families are going to be homeless, as the Dobbs’ staff reported, then I want pictures of these people camping it out. Truth is, few if any are going to be homeless; they’re just not going to be living in HOMES THEY FAILED TO PAY FOR and NEVER intended to pay for. How can they lose what they didn’t invest in with their own money to begin with?
“The nation’s mayors” - that’s a hoot. Wonder what organization is behind this meeting of “the nation’s mayors”.
The United States Conference of Mayors, and here is a pdf. file on their mortgage plot:
http://tinyurl.com/2r29m7
long url:
http://www.usmayors.org/uscm/news/press_releases/documents/mortgage_111907.pdf
Maybe they can start a Million Mayor March…start at Wall Street with an armored car leading the way…end at the Capital in D.C.,… holding tin cups with “lead” pencils (made in China) & signs that say: “We need the “FED’s” help”
Have faith, I think NBC nightly news is fair in reporting both sides and is ahead of the curve on reporting about the bubble compared to other MSM. They said something last night about renter’s getting screwed in MInnesota because landlords couldn’t make the mortgage - they went on to say the 1/3 of the foreclosures in the profiled neighborhood were “investors.”
This part of the bubble angers me. I don’t mind Joey Long Island losing his ass on a spec home in Florida, but these knuckleheads that bought in “undervalued” neighborhoods are really screwing those people over. The ones featured on the news last night were portrayed as victoms and they are… arrest the damn perps.
“If millions of families are going to be homeless, as the Dobbs’ staff reported”
Dobbs reported that these families will be HOMELESS? What ever happenend to RENTING? Has this country gone totally bonkers? I give up. (Throws hands in the air).
The total lack of ethics even the front line media exhibits is just astounding.
“The total lack of ethics even the front line media exhibits is just astounding.”
the front line media’s ethic is not to upset their sponsors and owners interests, Period. for the most part the major media in this country is owned by oil companies and the “defense” industry. the job of the media nowadays is to get us to consume and not pay attention to matters that affect us (just move on) while we’re being robbed blind and put in harms way.
That’s a terrific, succinct summation. Where did the U.S. rank this year in worldwide free press ratings? I believe we landed at 13th. That’s embarrassing. Not to mention terrifying.
“HOMELESS? What ever happenend to RENTING? ”
Arroyo — excellent point. We should bombard relevant newspaper comment sections with just this statement, with caps as you have them. It is succinct, unambiguous and powerful.
“A government that robs Peter to pay Paul can always depend on the support of Paul.”
George Bernard Shaw
tee hee…
That’s good. Hadn’t heard that one.
OK bubbleheads. Just remember, unless you are ABSOLUTELY SURE about the financial choices of everyone around the dinner table, you know what topic to avoid this holiday right?
Back in the early 1990s recession, I compiled a spreadsheet comparing economic, social and environmental conditions in the “good old days” — the 1940s and 1950s — vs. the “recent bad years.” Wish I still had it, but it was a few computers and formats ago.
I used to hand it out on Thanksgiving, because with the exception of family disintegration and crime everything had gotten better, and of course now crime has gotten better in many places too. Although we were in a recession I had a “glass half full” view, because I felt we were on solid ground moving forward, which we were.
Fifteen years later, we are not yet in a recession, but my view is glass half empty. We have all that additional debt, public and private. Baby boomer retirement is approaching, and 15 years went by without the public saving needed to pay for it. We have another housing bubble, and whereas the fallout had already happened when I made my spreadsheet, it is yet to come today. Energy efficiency has tanked; global warming is more certain. And, the minimum amount of spending Americans require to be thankful for their situation has exploded beyond what they could afford.
I’m still thankful. But in a couple of years, I think I’ll need another spreadsheet for everyone else.
WT, you big geek. ROTFL (kind of admiringly) at the thought gravy and cranberry stained spreadsheets on your t-giving table.
Darn, you sound like a guy I “know”.
Spreadsheet mania..
Happy turkey day. I can only imagine your past thanksgivings!!
Oops, dont’ have to..will be sitting next to the same fella.
I think he still wears his Pocket protectors. LOL
You forgot to mention we used up 15 more years of oil and that the Indians and Chinese are going to add a couple hundred million new motorists in the next 20 years. They will be competing even more for the finite resource. And the kukes such as Jane Fonda and her ilk thwarted the attempts of us becoming energy independent. France is 70% nuclear. It takes 10 to 20 years to bring new nuclear plants on line.
That’s why this 48 year old invests like a 72 year old is supposed to invest. A good amount of money in municipal bonds, CDs, T-bills and precious metals, international stock mutual funds, and hedged (in case I’m wrong) into American equities.
You can build a nuclear plant in around 36 months, if you have all the permits in hand. My Dad used to do it…
RE: You can build a nuclear plant in around 36 months, if you have all the permits in hand. My Dad used to do it…
Just don’t hire the Big Dig construction crew.
But OIL the biggest OIL field was located in Brazil a yr ago and “proven” out to be biggest..so there will be another
‘playa’.. and that may change up a few charts /graphs and but will money actually switch hands?
And the kukes such as Jane Fonda and her ilk thwarted the attempts of us becoming energy independent. France is 70% nuclear. It takes 10 to 20 years to bring new nuclear plants on line.
strawman.
how many suv’s are going to be powered by ‘nukular’?
don’t let that thought get in the way of your Two Minut Hate.
“you know what topic to avoid this holiday right”
I know absolutely nothing about a housing or credit bubble, just load my plate up with some turkey.
Half full to half empty…
Who will “profit” from all the “useful” houses?
Chapter 11 Tao Te Ching:
Thirty spokes share the wheel’s hub;
It is the center hole that makes it useful.
Shape clay into a vessel;
It is the space within that makes it useful.
Cut doors and windows for a room; It is the holes that make it useful.
Therefore profit comes from what is there;
Usefulness from what is not there.
Was talking to a friend yesterday and he told me of his friend the Realtor, in Hawaii…
He’s been in the game since the late 70’s and this was the 3rd bubble there, for him, so he knows the score. his small office of 8 Realtors was consistently in the top 1% in sales, he is good at what he does.
He saw my friend in September and told him:
“In June we sold $10 million,
In July we sold $2 million,
In August we sold 1/2 a million…
If i’m in the top 1% in sales consistently, how is the other 99% of Realtors doing?”
I have a serious question.
If money is increased based upon credit, what will happen if people stop borrowing and thus the amount of credit/money is reduced? Will the Fed to a reverse split (10 dollars turns into one dollar?) or is the amount of money reduced by reduction in value of hard assets and credit instruments through the marketplace?
I ask, because I am saving a raining day fund of cash and gold. I do not want this to be automatically reduced by govt. decree! If this is a possibility, then I guess my only alternative is canned food and ammo.
Best to all on Thanksgiving!
error!
should say “due to be” not “to do be”
Sorry, up early, still asleep”
“… what will happen if people stop borrowing and the amount of credit/money is reduced?”
Deflation will ensue. The amount of money will be reduced but the amount of stuff for sale will remain, thus prices will drop. That’s what’s going on in housing, autos, boats, etc. now and will probably spread out through the rest of the economy in the near future.
“Will the Fed do a reverse split (10 dollars turn into one dollar?).
No, Mr. Market will handle the reverse split via deflationary forces. One dollar will still be one dollar, it will just be worth more - it will buy more stuff.
The trick during deflationary times is getting hold of the dollar and deciding on a safe place to keep it.
My opinion is that if we reach the point where the country is bankrupt in that we no longer can pay our debts and other countries are no longer willing to lend us the money to pay our debts because they know that we don’t have the ability to pay them back; then the only way to pay off the debt is to monetize it - that is to just print money out of thin air. The government would be buying its own bonds. That’s why I think gold is one of your few protections because the dollar will collapse in value. Me thinks that we are already past the point of no return. This is the big one. There will never be a bigger credit bubble in our lifetime. I think monetization has already begun. They didn’t get rid of the M3 statistic for nothing.
The problem with your logic is that the Fed already knows this, and they know that people like you and me (and anyone else with a modicum of financial sophistication) know this. Certainly they have an exit strategy for the moment when the world concludes the gig is up? (I refer you to the Volcker era for a case in point.)
Surely you jest.
OK, the Fed *should* know this, as one of the main employers of PhD economists in the U.S.
The PTB have already ignored most of the economic lessons of the early 20th century, I guess I wouldn’t put it past them to try to fix this Weimar style.
That said, I’m still thinking we’ll see depression style deflation. The PTB operates in reactionary fashion. Deflation happens in real time.
We already have credit deflation — witness the contraction in ABCP, among others. The rest is coming…
Jim Rogers:
“This is worse than the S&L crisis. This is the first time – this is the worst credit bubble we’ve ever had in American history. No – never in American history have people been able to buy a house with no money down…never. That’s never happened anytime in the world. So, we have the worst credit bubble . It’s going to take a long time to work its way out. You don’t cure a bubble in five or six months… It takes five or six years.”
It has been 7.5 years now since the Nasdaq bubble popped and the index has barely regained half its bubble value.
and like that is gonna last
I guess it might depend on what currency you use to measure the index’s value.
High 5048 March ‘00. Post crash low 1114 in Sept ‘02.
Drop = 3934.
Now: 2562
Gain from low = 1448
So, we’ve gotten back 37% of the drop.
Take the 1114 and adjust up for inflation = 1241
2562-1241 = 1321 gain adjusted for inflation = 33% of the drop.
So, the recent NASDAQ bubble was about 1/3rd the size of the last one.
are you using a closing price? I thought the nasty got to 5300 intraday.
“…the recent NASDAQ bubble…”
Dead cat bubble
according to this clown, you can still buy with no money down
reply to this post email it rate flag
do you know that you can still buy at 100% 11/22 03:00:25
100% finance
no money down or 3% down
580 fico score
Jackson Georges
Lending consultant
CiTimortgage
I saw Jim Rogers on CNBC a few mornings ago. He’s spot on. Also saw a few analysts saying that the $100 per barrel oil is the peak. They act as if oil is infinite and only high because of the weak dollar. If so, how come the weak dollar did not raise wages or computer prices as well? No one wants to say the “P.O.” phrase. If Hubbert’s peak prediction for the U.S. was right in 1970 how come the same methods to predict world peak oil CANNOT be right? For many years, Hubbert was ridiculed. But he was proven right.
We will never run out of oil. We will run out of cheap oil.
People who speak their minds as freely as Jim Rogers fill me with shock and awe.
You hit one of the core problems of the current housing mess, with no money down any schmuck that had been locked out of the market by the down payment “problem”. Who wouldn’t take a chance to own instead of renting / p!ss!ing the $ away? Also, take a look in the investing section of the local bookstore & you will find the wet dream of RE “investing” is … no money down. The books say you would never be able to do it (time frame of the late ’90s). They never imagined the likes of CFC, WAMU, LEND, Option One, … and the resulting mortgage crisis.
The investing book section in bookstores are laughable. They are always late on bubbles. There were lots of tech stock investing books and day trading books displayed on the shelves for a year and a half following the NASDAQ collapse of 2000.
Even if it takes two days to write a book, it takes a year for it to hit the market.
was planning to go shop for a new dodge mini van.love the new look.today & pick up my ‘free’ butturball turkey,with the test drive.Backed out after some thought,just can’t take that kind of pressure.Buying or looking at houses is nothing compared to what they put you through at the local ‘friendly’ new car lots..how come?
Went by a Wal-Fart…on the north end of the 120 acre parking lot… what could be found?…hundreds of “new” Ford vans & trucks parked in perfect rows…the local dealers “cup runeth over”? …and the Walton family finds yet another way to collect more…..
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
“space for lease”
When I picked up my rental in Victorville at the Ford dealer there were at least 5 of the new 302 mustangs on the lot. I remember being told during the summer that if I didn’t get on the wait list I wouldn’t get one.
Got cash
Got debt
Victorville?
…near a military base…twenty nine palms…bankers & pawn shops love gov’t issued paychecks used for “needed” items.
Walsmart.
http://www.youtube.com/watch?v=7KFdRxASP6A&feature=related
Find the car/van you want on the lot, walk past all the salesmen to the fleet sales office, and buy it for the fleet price.
OK bouncing off WT’s spreadsheet story (which I still am laughing about) — let’s just say your relatives and friends finally decide to ask you this Thanksgiving about how to navigate this very scary market.
In the spirit of the holiday, how about a thread on non-snarky advice you would give?
My lips are sealed! My hubby said he will get Tx frozen trout and straight to the head with said trout!
Chortles,
Leigh
Our CraigsList has exploded with real estate listings this holiday — so what are they thinking? I guess the MSM has finally hit home in middle America and folks are thinking, “I better sell now, things might be bad in the Spring.” It appears to be an awakening.
Yes, I’m seeing that in the Tampa Bay area. But it seems to be a weird mix of desperation combined with ridiculous wishing prices. Seems like our own FBs don’t want to give up on the idea that “We’re like California” and can charge accordingly for real estate.
Happy T-Day Mr Palmetto. It does seem strange that these idiots can’t seem to come to grip with the fact that they need to lower their price below comps to get a sale. How one becomes desparate without even an attempt to lower the price is rather telling about the state of affairs in your neck of the woods. They must be heloc’d up the wazoo.
Your are right, Mr. SixPack.
If and when you sell, you will certainly get what the current market of Greater Fools feels it is “worth”.
It may not be what you “owe”; but it will certainly sell for what its “worth”…..
Wait much longer to make a drastic reduction in price (..if you can..) and you will see “what its worth” drop even further.
For “what its worth”….
Same here in Pensacola, FL. Also, realtors are posting there MLS listings on craigslist.
Our CraigsList has exploded with real estate listings this holiday — so what are they thinking?
Maybe they’re thinking, “While everyone’s out buying turkey’s anyway, maybe they’ll buy mine too.”
Pretty funny Ric … you might be right on target.
It all got raptured away…
Manna to Heaven
Twas the day before Black Friday, when all though the house
Not an ATM was stirring, not even for small amounts…
Happy Thanksgiving~
Ode to Khan…
ACA ACA ACA
ACA gone
ACA gone
ACA gone
ACA gone
ACA gone
Let me rock you
Let me rock you
ACA gone
That’s all I want to do
http://www.youtube.com/watch?v=NLVW1ZaH5Ec
If i’m not mistaken, these were going for 400k last year.
http://chicago.craigslist.org/chc/rfs/486321719.html
Just want to send a Happy Thanksgiving out to all you nuts that regularly visit this site. I’m feelin’ all giddy and shit this morning, so I wanted to take this time to thank Ben for his blog, and to thank all of you junkies for both enlightening me with your knowledge and humoring me with your bullshit.
I am the CFO for a small community bank. My most important duty is to present interest rate forecasts to our Board of Directors. After interest rates dropped to historic lows in 2003, I boldly predicted that both long-term and short-term rates would stay relatively low over the next few years. My thinking was that globalization and the massive shift of wealth from the working class to the Walmart kids would result in low investment returns across the board - whether it was in stocks, bonds, or tulips. There was just too much money in too few hands chasing too few investments.
Well, the Fed then proceeded to raise rates 17 consecutive meetings, and my interest rate forecasts spontaneously combusted. It soon became apparent that the explosion in home building was the driving force behind the economic expansion that I thought was impossible. So one day in the fall of 2005,. I googled “housing bubble”, and Ben’s site was the first thing that popped up.
Eureka!
I went from being the village idiot to Nastrodamus in the space of 18 months, although it took a while to live down my “running down the street naked” moment of indiscretion.
But now, boys and girls, we must set our sights higher. We have to figure out how to do our part in fixing all the shit that’s been broken over the last few years due to greed, incompetence, and ignorance. Not only does the entire world think we’re morons, but the middle class standard of living, with which we’ve grown accustomed, is dropping faster than Jersey Joe Walcott after a Rocky Marciano uppercut. (Thanks, Hazard)
In 1982, the average CEO’s salary was 42 times greater than the average production worker.
In 2004, the average CEO’s salary was 431 times greater than the average production worker.
In 2010, there will be no production workers in this country.
Wall Street’s got us by the boo-boo, boys. And every where I look, I see my working-class brethren bent over at the waist with an Andy Dick smile on their faces, oblivious to the giant dildo that is poised in the ramming position.
Dean Vernon Wormer: Fat, drunk, and stupid is no way to go through life, son.
What are we gonna do about it? Are we just gonna rant back and forth amongst ourselves, or are we gonna grab the bull by the balls and do something?
D-Day: War’s over, man. Wormer dropped the big one.
Bluto: Over? Did you say over ? Nothing is over until we decide it is Was it over when the Germans bombed Pearl Harbor? Hell no
Otter: Germans?
Boon: Forget it, he’s rolling.
Bluto: And it ain’t over now. ‘Cause when the goin’ gets tough…
[thinks hard]
Bluto: the tough get goin’ Who’s with me? Let’s go
“Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.”
Anyone got any ideas?
Anyone?
Bueller?
“Game over man! Game over! What we gonna do?
We are REALLY screwed man! Game over!”
_great underated movie
“_great underated movie”
Hey, A2 is a *classic*…”in the pipe, 5×5″.
I say we take off and nuke the entire site from orbit. It’s the only way to be sure.
LOVE that movie.
Happy Thanksgiving Sweeny!
When someone post(s) a link on any form of fraud, I e-mail the SEC, FBI, CIA, and for good measure my representatives and the White House.
The pen is mightier than the sword?
I wonder how many *lists* I’m on…LOL.
Smiles,
Leigh
P.S. Great rant/insight
“In 1982, the average CEO’s salary was 42 times greater than the average production worker.
In 2004, the average CEO’s salary was 431 times greater than the average production worker.”
It’s time to bring out the guillotine
yes, that is very similar to my country (NL) and probably most of Old Europe. The difference increased by a factor of 12 over the last 20 years or so; factor number one for that was obviously adopting the US finance/business economy model (based on debt, ever decreasing interest rates and stealth inflation).
My theory is that eventually, when the police and security people become the “have nots” they will cease to protect the “haves” from the other “have nots” … and the “have nots” could overthrow.
I know it’s bad, but when that sniper thing went down in Richmond/DC (malvo?) I couldn’t help but think “why didn’t they go after enron execs? They would have been heros to some.”
interesting post! sweeny texas
there are millions who feel like you. that ‘we have had enough and we’re not going to take it anymore!’ keep posting, keep talking, keep informing people around you, keep joining organizations with those with similar views. talk to people who might not know how they are being ‘herded’. sooner rather than later, if enough of us keep communicating, we might have the change we need to survive as a democracy. one last thing. Happy Thanksgiving!
“I am the CFO for a small community bank.”
How much gold & cash you got in that Texas bank vault? …just wondering…like you … about the Future
“nuts that regularly visit this site”
Speak for yourself.
…as PB clumsily attempts to hide his tinfoil hat.
Everyone is wearing tinfoil hats these days. One might even say that tinfoil hats are the new black!
Not only does the entire world think we’re morons,
Yes, the rest of the world (minus maybe a few other countries that are experiencing some bubble trouble) is wondering how the heck these Americans managed to pop their housing bubble and kill the goose with the golden eggs. Europe is sooo much smarter, our bubble is 20 years old and still going strong! Just today Dutch Rabobank predicted that Dutch homeprices will keep rising for the next two years, although just by 4 and 3% yoy respectively. 1000% appreciation is not enough, we can do much better!! And of course, there is no housing bubble in the Netherlands (or other EU countries), it’s all strictly based on fundamentals.
I realized all that a long time ago. Taught myself to live on what the average WS asshole spends on beer annually and to eat what I kill myself. I don’t care what any of them do.
How much savings is enough? According to the attached link, someone 55 years old who wants to have a retirement income of 80% of their working income should have savings equal to 6.5 times income (NOT including the value of their home) and debt of no more than .5 times income (INCLUDING the mortgage). The author gives similar benchmarks for all stages of one’s working life. Outside of this audience I doubt there’s many who even remotely approach the targets. I recommend the article and hope you have some time this long weekend to digest it. Happy Thanksgiving.
http://tinyurl.com/mgbah
How long do you plan to live past age 55? And are you willing and able to keep working? And do you plan to hold your savings in a stable currency?
How much you need to save depends crucially on questions like the above.
You are right. Have you seen that commercial on cnbc in the mornings about this woman who has a house in Palm Beach, a villa at some resort, a flat somewhere else, and a home in Ohio? I laugh. I like to add the words “and only $5,000 in her retirement plan!”
I am astounded that these ‘geniuses” ignored financial advisors’ advice in all types of publicaions, in community college Personal finance 101″ etc, and ignored the fact that the Vanguard S & P 500 index fund earned an annual 12% per year since 1976 (31 years), and then overweighted all their personal investing into real estate. It’s crazy!
My dad always advised me to never be a slave to your possessions. One house is enough. Two houses - well they are inefficient unless you rent one out. If you rent one out you have to spend some time talking with property manager several times a week. I know - I have seen a colleague spend working hours talking with his property manager about his rental in another state. Whatever happened to the KISS principle? You have more freedom when you have fewer material possessions.
“…the Vanguard S & P 500 index fund earned an annual 12% per year since 1976 (31 years)…”
The period since 1976 might not constitute a sufficiently representative sample off which to predict future returns, due to:
1) the growth of 401(K) plans (which resulted in many individual retirement contribution streams hard-wired into the S&P500);
2) 20 year bull market in stocks and bonds due to the falling-long-term-rate environment after Volcker (1982-?);
3) the Greenspan put (which rewarded anyone who bought the dip in S&P500 and other headline U.S. stock market indexes);
4) the apparent recent increase in take-the-money-and-run business plans, which enrich retiring corporate executives through accounting gimmicks that mask losses which are only revealed long after bonuses have been paid, retirement contributions have been made and stock options have been granted and exercised;
5) recent shift from an easy money conundrum, where financial market participants collectively behaved as though there was no credit risk, to a once bitten — twice shy credit market, wherein nobody with loanable funds trusts the ratings agencies to honestly and accurately gauge credit default risk;
6) steady growth of twin deficits (trade plus fiscal) creating a chimeric “wealth effect” in the overall U.S. economy which masked a long-term deterioration in our household and government balance sheets;
7) falling $US, which tends to make foreign investors (who face the double risk of falling $US share prices plus currency conversion risk) quite reluctant to invest here.
How well a dumb index investing strategy (e.g., automatically hard-wiring your 401(K) contributions into your employer’s S&P500 fund choice) does going forward may depend heavily on how the above and similar factors evolve post-credit-crunch.
P.S. Unless this time is different, we are in a 16-year-plus secular bear market that began when the DJIA topped out in 2000 (like the ones that started in 1901, 1929 and 1966). This is not the kind of environment where dumb index investing does well.
Good heavens —
I just realized that I blathered on through my seven-point diatribe without ever mentioning that we have also thrown our collective credit rating (relative to savers in other nations who have been recently been funding our credit boom) on constructing 17m+ vacant homes!
The period since 1976 might not constitute a sufficiently representative sample off which to predict future returns…
I partly agree and partly disagree. However I am confident in the next 20 years of investing in Vanguard index funds (mostly S&P 500) that I will do better than the inflation rate. Jeremy Siegle says it well in http://www.amazon.com/exec/obidos/ASIN/007058043X/motleyfool-features :
“In 123 rolling five-year periods since 1870, stocks had positive returns in more than 90% of these stretches.
In 90% of 10-year periods, the after-inflation annual returns from stocks were at least 2.8%, and in 90% of 20-year stretches, were at least 5.3%.
Over 20-year periods back to 1802, stocks have never generated less than 1.0% annual returns above inflation, and stocks have never failed to beat inflation over any period of 17 years or longer.
Over five-year periods back to 1802, stocks outperformed bonds and T-bills more than 70% of the time; over 10 years, more than 82% of the time; over 20 years, more than 94% of the time, and over 30 years, 99.4% of the time (and 100% of the time since 1870).”
The 31 period is well more than enough time to get above average returns.
“However I am confident in the next 20 years of investing in Vanguard index funds (mostly S&P 500) that I will do better than the inflation rate.”
I guess one has to be confident of a working assumption before adopting a hard-wired investment strategy. Perhaps I am unduly concerned about the experience of the U.S. stock market from 1929-1945, after a debt-fueled boom in the 1920s that resonates quite strongly with the debt-fueled boom of the 1990s?
http://www.amazon.com/Roaring-Nineties-History-Worlds-Prosperous/dp/0393058522
Ignore that Dow theory “sell” signal.
“Over five-year periods back to 1802, stocks outperformed bonds and T-bills more than 70% of the time;…”
This lengthy quote amounts to a more sophisticated version of ‘it’s always a good time to buy stocks, because the stock market always goes up, over the long run.’ Highly regarded financial economists like Burton Malkiel (A Random Walk on Wall Street) argue against trying to time the market, as stock price movements are essentially unpredictable. And clearly the current Fed and the Treasury would like to keep the party on Wall Street going as long as possible.
But evidence in Shiller’s Irrational Exuberance suggests that over long time horizons, high price earnings ratios have been reasonably good predictors of subsequent stock price movements. The PE ratio (as Shiller calculates it) peaked out in 1901, 1929 and 1966, leading to 16+ year secular bear markets thereafter. Perhaps the similar peak in 2000 will not turn out this way, as it is different this time.
And as to the Fed/Treasury’s ability to reflate the stock market, they I suppose they might have more success than past such efforts in the face of a credit crunch have been able to achieve.
The “outperformance” of the stock market is a widespread myth perpetuated by Wall Street. It’s the Street’s version of NAR’s “Housing only goes up”.
Once you adjust real returns for survivorship, transaction fees, taxes and the occasional principal wipeout the perceived advantage disappears. The biggest fallacy owes to human nature — the market returns are calculated based upon an investing strategy that almost no common investor will ever follow. Nevertheless, that’s okay, because the brokers keep their cut (and their yachts).
Historically most people are better served by Treasuries.
I am astounded that these ‘geniuses” ignored financial advisors’ advice in all types of publications
I’m not astounded at all, in my country (NL) all the financial and lifestyle magazines are full of articles explaining that you should put the biggest portion of your assets into real estate (first of all because that worked extremely well over the last 20 years or so, far bigger gains than in the stockmarket); and of course because it is about the only tax heaven left for private investors (all costs are tax-deductible and, all gains are taxfree). Although some of these advisors are sharks, I think many of them believe the RE mantra and personally have most of their assets in RE as well.
As for the index fund with many years of 12% yoy gains - for me that would be a good reason to get out right away. The top five performers of Morningstar etc. are nearly always tomorrows big loosers.
“The top five performers of Morningstar etc. are nearly always tomorrows big loosers.”
On the simplest level, that is the reason that fund track records are so bogus. Generally speaking, past performance is not a guarantee of future investment returns. Moreover, there is a natural mean-reversion effect thanks to GFs who believe that past performance is a strong indicator of future returns, and hence bid up an asset’s price until it is overvalued.
P.S. Markets with lots of (dumb) noise traders, like the U.S. housing and stock markets, both offer classic examples of this bubble up / bust down market behavior, which provides fertile grounds for sophisticated financial market playas to fleece sheeple of their life savings.
And don’t forget the survivor effect on mutual funds. The ones that fail aren’t counted…
“…are nearly always tomorrows big losers”
Grab them by their adams Apple and Googlize their brains
Wife and I are 30 so we get the benefit of being in the “starting out” category. We have the recommended savings and a total debt of 0.72 yearly income.
I like the guy’s realistic assumption that people in their 20s don’t know sh!t and are still worried about love, life, school, children, etc. and cannot reasonably save for retirement. Give me a break MSN money people–we were in school up until 27 and were blessed with good jobs by 28. So we have a head start, but my God, we couldn’t save anything prior to that and don’t know how anyone else could either (unless they took a job and didn’t bother with education).
Not to worry. You are doing a great job! I started seriously saving 19 years ago at age 29. That was all in a tax deferred retirement plan.
Oh my goodness. Did you dig into this article? The authors hold that debt load should be no more than 1.7 times annual income–mortgage and cars. (Ugh, car debt.) So, for an income of $100K, they suggest a mortgage of $145K. Then they do a budget, showing that even with this modest (for the income) mortgage, it’s still hard to save.
1.7–that’s friggin’ HALF of the 3.5 figure we get quoted all the time. I knew there was something fishy about it.
RENTING AND LOVING IT!!
Hurry up and eat, so you can get to shopping!
http://biz.yahoo.com/ap/071122/thanksgiving_day_shopping.html
“Retailers Open Doors, Offer Online Deals on Thanksgiving to Give Shoppers a Holiday Head Start”
Got Desperation? Got Fear?
No $hit!
Is it just me, or has anyone else noticed that the xmas buying season (and related ads on TV) started in earnest at least two weeks before frikking Thanksgiving?
When I was a nipper, xmas started at Advent - 1st december. Now I see ads before Turkey Day, with Santa Claus (Father Christmas where I come from), fake snow and the ubiquitous red and green livery weeks before I’ve even sit down for my turkey dinner…its almost as if the two, distinct, holidays have been glommed in together for the ease of the advertisers.
In the next few years, if the ad companies have thier way, Santa will have his sled pulled by Turkeys, rather than Reindeer….and the run up to “Thanksmas Day” will start the day after Labor Day Weekend.
I really feel for people with kids - how can you withstand the almost abyssal pressure to buy your kids everything in the world, with over two months of hard, continuous sell?
Seriously, I feel for you - how hard is it to instill decent values in your kids - like, not expecting the Moon on a Stick every december 25th - when the whole world is shrieking at you to just buy, buy, buy, or be a ‘crappy parent’.
Why not make it easier for everyone, and declare Jan 2nd the start of xmas shopping season, and just pile on the pressure for the next 360 days.
(/sarcasm off)
PS: Happy Turkey Day!
Being English, I should really withdraw my support for this obviously seditionary holiday (damn colonies), but I’m sucker for a roast dinner
However, I will be doing my citizenly duty tomorrow, by not leaving my house, and not buying a damn thing. Black Friday- not in my house!
got stupidity?
Any thoughts on what effect a bad Thanksgiving shopping weekend will do to the stock market?
Retirement-What the hell is that? Unless you are defusing IED’s or digging ditches I see no point in or reason for retirement. I have seen countless people retire and they are dead in a year or two. I am going on with it and hope to take advantage of the youngsters coming on line. Age and treachery will win out over youth and inexperience every time.
I’m 48 and look forward to working another 20 years in software engineering. After that, maybe work as a clerk in Barnes and Noble somewhere.
Bill — I see eye-to-eye with you on your retirement plans. I hope to stay healthy and sufficiently mentally fit so that retirement is merely a relaxation of constraints on my work activities, rather than a termination thereof. My father is nearly eighty years old, and has never stopped working since his official retirement fifteen years ago.
ditto. But instead of working in a large bureaucracy building some monstrous creation devised by IBM or Oracle, I want to work on something that is small, innovative and truly helpful. I want to ‘retire’ from the rat race.
yep, getaway from this current job and work with something meaningful..100 yr olds thrive in my family, so I Know I will be working …like you said at least at something innovative and truly helpful.
“a clerk in Barnes and Noble”
20 years from now…2007?
The only one you’ll find will be inside a Planet Bollywood in Macua
I quit honest employment in my 30s and would shoot myself if I ever had to go back to that.
The best “job” I had was the two years I spent renovating a 1926 Storybook Tudor cottage I bought in 2001. Of course I worked my a$$ off but was my own boss with my own schedule and I sold it in 2003 with a net profit of $150,000 tax free. I might add I am of the female gender so getting down and dirty and learning the workings of a house is not for all of the fairer damsels among us. A happy Thanksgiving to all!
I’m 45. I expect to work 5 more years full time. Then do something part-time, like Bill In Maryland. I have a somewhat high pressure job - consulting. Just tired of the putting in the time. Want more time for ME.
Thanksgiving Inflation: 11%
http://seekingalpha.com/article/55107-thanksgiving-inflation-11?source=feed
Fed should raise rates by 100bp NOW!!!!
Time to buy the dip in financial stocks, now that all the bad news is out?
Sell-off led by financials, GE
REUTERS
November 22, 2007
NEW YORK – Financial services companies, including Goldman Sachs, led yesterday’s sell-off on Wall Street alongside economic bellwether General Electric.
Stocks fell on signs that trouble in the housing market could worsen and further harm the economy.
The Dow Jones industrial average fell 211.1 points to end at 12,799.04. The Standard & Poor’s 500 Index was down 22.93 at 1,416.77. The Nasdaq Composite Index was down 34.66, to 2,562.15.
Treasury Secretary Henry Paulson underscored a major theme for the week, telling The Wall Street Journal that the number of potential U.S. home-loan defaults will be significantly bigger in 2008 than in 2007.
Shares of mortgage lenders, including Countrywide Financial, tumbled while fears of even more subprime exposure at American International Group pushed the insurer’s shares down as much as 6.58 percent.
“There just seems to be more evidence that financials are just in bigger trouble than we continue to think, and the write-offs are going to be worse than initially estimated,” said Peter Dunay, investment strategist at Leeb Capital Management in New York.
Risk aversion drove investors to seek a safe haven in U.S. government bonds. The yield of the benchmark 10-year Treasury note was 4.01 percent, down from 4.1 percent Tuesday. The note’s price, which moves inversely to its yield, rose 15/16 to 101 29/32.
Earlier, the 10-year note’s yield had dipped below 4 percent for the first time since September 2005.
http://www.signonsandiego.com/uniontrib/20071122/news_1b22market.html
buy the dips and sell the rips
Due for a short squeeze, oi was up in the dec dow futures. Short some gm and amr with puts, should have closed out amr on wed. Will add gm on any bounce, think it’s headed to 20.
Hey folks…gotta go…my 5 year old son Cole, just told me to: “Get off my Blog” ;-)…Happy ThanksGiven you all!
Maybe after the writers strike…I can find him a job & retire
My kids are vegging in front of the boob tube while I rant away…
Yes so are mine time to give up the computer. happy Thanksgiving to all !!
Check out this huge opportunity
The first photograph is an absolute classic that Ben might want to “snap up” for the gallery. There is some person sitting right there on the edge of the sidewalk under the overgrown tree in front of the house all doubled up with head on knees. Not just West Oakland, but West Macarthur Blvd. in Oakland. Without drinking a drop just seeing that picture gave me a severe hangover and nausea. Yuck!
In that first photo, it looks like a homeless guy is sitting on the curb and curled up in the fetal position.
5 bedrooms…
Looks like a prefect “opportunity” for a “hippie” family or x8 fresh recruits form the “Jesus Saves” junior college.
1 too many zeros
Oh yeah, “Lots of potential.”
I would think that the purpose of hiring a realtor is getting advice like: “Paint over the grafitti”.
Here is another classic. Mountain top dominating mansion in progress not even completed and facing winter weather, in this case lots of rain.
Forced as is sale in Aptos
Claims winterization completed and “rough plumbing and electrical completed”. It seems a real shame to loose a pristine site like this to such blundering. Some knife catcher who wants to choose paint and carpets is likely to “snap this up”, but who knows?
Wow, almost 1.9 million for a shell.
Funnily enough, I lived in Aptos in the mid-70’s.
Back then, it was a sleepy, slighty rundown beach town, full of students from UCSC and Cabrillo who surfed the almost pristine beaches. Housing was cheap, the lots were big…
Went back there to say ‘howdy’ to the Concrete Boat a few years back and almost didn’t recognise the place.
From Hippie to Yuppie in three decades.
Wonder how they’re going to sell that place, unfinished, for almost 2 million.
Check out the “Property Features” section of the listing. “Dishwasher, microwave, washer, dryer” Huh? From the photos looks like they are “imaginary” property features.
500k for Park Ridge?
http://chicago.craigslist.org/nwc/rfs/486417916.html
“It’s at the borders of pain and suffering that the men are separated from the boys.”
Emil Zatopek
http://www.youtube.com/watch?v=d44tCjd6reg
Don’t know if this has been posted before: by looking at the record bonuses for bankers, one might think they have been doing a great job this year.
http://www.bloomberg.com/apps/news?pid=20601087&sid=ahE8xVisWsbE&refer=home
Bankers have done a heck of a job!
“Power does not corrupt men; fools, however, if they get into a position of power, corrupt power.”
George Bernard Shaw
Beware the Jabberwock, my son!
The jaws that bite, the claws that catch!
Beware the Jubjub bird, and shun
The frumious Bandersnatch!
`Twas brillig, and the slithy toves
Did gyre and gimble in the wabe:
All mimsy were the borogoves,
And the mome raths outgrabe.
Thanksgiving seems a bit early to me for Carrolling.
Imagine the ’ssshrubery of down under, being gone tomorrow?
“JOHN HOWARD faces annihilation in tomorrow’s election, with Labor on track to record one of the biggest swings against a government since World War II, the latest Herald/Nielsen poll shows.”
Expect Aussie troops to leave Mess-O-Potamia, exit stage left.
http://www.smh.com.au/text/articles/2007/11/22/1195321949364.html
That could have an interesting effect on most of the “windsock” politicians running for prez, except for RP of course.
U.S. markets are closed today, but Asian nations’ are not…
Signs of bubble deflating as Chinese shares tumble
By Andrew Wood in Hong Kong
Published: November 22 2007 17:57 | Last updated: November 22 2007 17:57
Shares in Shanghai tumbled 4.4 per cent on Thursday, and the smaller Shenzhen market dropped 4.6 per cent, in a fresh sign that the bubble in Chinese stocks may finally be deflating.
Shanghai’s composite index closed below the 5,000 level for the first time since late August, at 4,984.16.
http://www.ft.com/cms/s/8953cca8-9922-11dc-bb45-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F8953cca8-9922-11dc-bb45-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
So much for the theory that an export-led boom will fully offset the effects of a deflating housing bubble…
Investors cool to US multinationals
By Francesco Guerrera in New York
Published: November 22 2007 22:00 | Last updated: November 22 2007 22:00
Investors are losing their appetite for US multinationals amid mounting worries that the weak dollar and growth in the rest of the world will fail to offset a slowing domestic economy.
The market’s lack of enthusiasm for companies that had underpinned recent rallies highlights growing pessimism over the prospect that exports and global trade would help large US companies weather a slowdown in their home market.
http://www.ft.com/cms/s/909edeb6-9937-11dc-bb45-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F909edeb6-9937-11dc-bb45-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
US economic worries weigh down Asia
By Andrew Wood in Hong Kong and Jonathan Soble in Tokyo
Published: November 22 2007 05:13 | Last updated: November 22 2007 09:15
Asian stock markets were broadly lower on Thursday, with Hong Kong and Shanghai hit particularly hard, as investors fretted about the global effects of an apparent slowing in the US economy.
Concerns that consumer spending may slow in Asia’s biggest export market were fuelled by a National Association of Realtors report that home prices fell in one third of US metropolitan areas last quarter.
http://www.ft.com/cms/s/0e72a3c2-98b6-11dc-8ca7-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F0e72a3c2-98b6-11dc-8ca7-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
Three-headed dog on the road to perdition…
Business and the credit crunch
At the gates of hell
Nov 22nd 2007 | NEW YORK
From The Economist print edition
Banks and brokers are having a terrible time. Now the misery is spreading
Illustration by David Simonds
NAMING yourself after the three-headed dog that guards the gates to hell was, perhaps, asking for trouble. Cerberus, the private-equity beast in question, now finds itself at the centre of a fierce debate about whether corporate America is in for a hellish time, as the credit crisis spreads from financial services to the rest of the economy.
http://economist.com/business/displaystory.cfm?story_id=10181281
Buttonwood
Serial crunching
Nov 22nd 2007
From The Economist print edition
Credit problems refuse to go away
NO LONGER can the credit crunch be dismissed as a blip or an isolated phenomenon. Every other financial wobble since 2003 has lasted just a few weeks. This time, even two rate cuts by the Federal Reserve have failed to do the trick.
http://economist.com/finance/displaystory.cfm?story_id=10191738
Perhaps three is a charm? I guess we will find out next month…
Dollar jumping off the cliff:
http://quotes.ino.com/chart/?s=NYBOT_DX&v=s
Happy Black Friday to everyone who reads here!
$300 Billion in Write-Offs Is Predicted
By CARTER DOUGHERTY
Published: November 23, 2007
FRANKFURT, Nov. 22 — Losses in the distressed mortgage sector of the United States could reach $300 billion, only a portion of which has so far been accounted for by write-offs at major banks, according to a study released on Thursday by the Organization for Economic Cooperation and Development.
Major financial institutions, including Citigroup, Merrill Lynch and Swiss Re, have estimated losses of about $50 billion, but the O.E.C.D. cautioned that a rougher period may yet await financial markets, which have swooned in recent days as traders try to calculate the impact of mortgage-sector losses on the overall economy.
http://www.nytimes.com/2007/11/23/business/23oecd.html?ref=worldbusiness
Don’t worry about all these gloomy warnings. Widely-anticipated disasters seldom turn out nearly as badly as predicted.
In fact, I would just pay attention to MarketWatch’s Hulbert and buy the dip tomorrow!
OECD’s Dire Credit View
Report Says Worst Isn’t Over and Losses May Hit $300 Billion
REUTERS NEWS SERVICE
November 22, 2007
LONDON — Overall losses caused by the U.S. subprime-mortgage-market crisis could feasibly hit $300 billion, and the broader credit crunch could inflict more damage on equity markets, the Organization for Economic Cooperation and Development said.
“Thus far, equity investors seem to have shrugged off the negative sentiment that prevailed over the summer, but it may be too soon to draw firm conclusions,” the OECD said in a report.
“As adjustments have often occurred in waves, and as higher funding costs take typically several months to have their full impact on companies or consumers, it may well be that the recent correction is only a precursor of a more protracted downturn.”
http://online.wsj.com/article/SB119568675939001081.html?mod=googlenews_wsj
Got Treasurys?
Investors Shed Stocks on Fears Of a Slowdown
By Peter A. McKay and Lingling Wei
Word Count: 661 | Companies Featured in This Article: Freddie Mac
In their intensifying search for havens, investors are bidding up Treasury securities and thumbing their noses at just about everything else, from stocks to municipal bonds to government-sponsored enterprises.
Reacting to fears of a U.S. economic slowdown, investors dumped stocks on Wednesday. Not even low-risk sectors such as utilities or consumer staples were spared. Then in Asia yesterday, the Shanghai Composite Index dropped 4.4%, leaving it down 16% this month. Hong Kong’s Hang Seng Index, which includes a number of China plays, lost an additional 2.3%, bringing its loss for November to 17%.
http://online.wsj.com/article/SB119578166761001707.html?mod=hpp_us_whats_news
David Cee, open your wallet and pony up…
PAGE ONE
THE END GAME
Clinton Hits Rough Patch As Iowa Showdown Nears
Rivals Strike From Left As She Courts Center;
‘Responsibility Gene’
By JACKIE CALMES
November 23, 2007; Page A1
http://online.wsj.com/article/SB119577999706601663.html?mod=hpp_us_whats_news
The Upside to the Downturn
Contractors Return Calls, Materials Cost Less;
Mr. Bowes’s Half-Price Renovation
By SARA LIN
November 23, 2007; Page W8
It’s not the best time to be selling a house in much of the country. But increasingly, it’s a good time to build or renovate one.
The housing slump has pushed down prices on everything from lumber and drywall to labor and design fees. Legions of carpenters, tile layers and landscapers are idle. Architects are taking on small renovation projects they once would have sniffed at and contractors are offering their services at a discount. Some people in the building trades are even posting fliers at construction sites to drum up business.
It’s a striking contrast from the heady days of the real-estate boom, when builders and contractors could hardly keep pace with demand, prices of materials soared and a six-month wait to start a kitchen renovation was commonplace.
http://online.wsj.com/article/SB119578061831901674.html?mod=hpp_us_personal_journal
Renters beware of deadbeat landlords…
Tenants Pay as Landlords Default
By Kelly Evans
Word Count: 692
FALL RIVER, Mass. — In August, Jeffrey Carreiro, a 43-year-old apartment dweller in this old textile town, got a nasty surprise: an eviction notice.
The letter, from a real-estate company representing a bank, said his building was in foreclosure and he had to “vacate the premises.”
The company offered Mr. Carreiro and the other residents of the three-unit building, including the landlord, a payment to help with moving expenses if they left within 30 days. But he says the firm wouldn’t disclose the size of the payment unless he agreed to leave.
http://online.wsj.com/article/SB119577799439601624.html?mod=hpp_us_whats_news
Why Freddie’s Loss Didn’t Clear the Air
By James R. Hagerty
Word Count: 731 | Companies Featured in This Article: Freddie Mac, Fannie Mae
Freddie Mac earlier this week reported a $2.03 billion loss for the third quarter and jacked up its provisions for loan losses. But that doesn’t mean all the potential bad news is out.
Questions remain about the value of the U.S. government-sponsored mortgage company’s securities backed by subprime mortgage loans. These are “nonagency” securities, issued by Wall Street firms rather than Freddie or its main rival, Fannie Mae. Freddie says it has $105.4 billion of these bonds, accounting for about 15% of its holdings of mortgages and related securities.
http://online.wsj.com/article/SB119577901767801634.html?mod=hpp_us_whats_news