Bits Bucket And Craigslist Finds For November 29, 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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The new NAHB/Wells Fargo housing affordability data for the 3Q of 2007 was released Tuesday, November 27. Link.
For the Long Island market, housing affordability is as follows:
– Long Island ranks #203 nationwide, out of 215.
– Also ranks #5 in top 10 least affordable areas, with population over 500,000.
– And ranks #41 out of 42 least affordable areas in the Northeast.
– Only 9.5% of families can afford median priced home.
And as many of my neighbors and family will tell you…..”You have to pay more to live on Long Island. It always has been this way and always will.” As if it’s one giant country club!
See - that’s the myth…it HASN’T always been that way!! There’s a wake-up call coming for these folks!
Though I’m only in my mid thirties, I have to say it was like this for as long as I can remember (or atleast,was aware of)
Mind you, I think the housing market on LI is off kilter (big time) Also, I don’t see any real cutting back with friends or neighbors. I guess I sometimes feel LIers live in their own lala world where it doesn’t effect them. Their attitude is -Yes, there will be a handful off people that should’ve been more conservative but in the long run LIers are impervious to such major down turns. There will be a dip (like now) but will bounce back without dropping to the lows the rest of the nation suffers through.
Sorry, I’m feeling negative right now. The hubbie and I were discussing the possibility of moving out of my home town because if this is the bottom of the market for us (lowest (crappy) houses for 329k) then we have no business living here.
Danni, don’t give up yet. Their are many just like you, waiting for the shoe to drop on housing…
Jobs are the key. When the economy falters and businesses begin layoffs enmasse, when local and state governments are running in the red and begin to cut services and staff, then the pain will begin. Then the serious price adjustments outside of FL and CA will begin. Of course, the trick at that point is not becoming a statistic and keeping your job, credit, and savings.
Barring a massive, hyperinflationary government bailout (which I’m not ruling out), the point of severe pain won’t come for at least another year. Now is not the time to buy, but to sit back, watch the sheeple squirm in discomfort, and save for the right time to enter the market. You’ll know it’s the right time when an RTC-esque entity is formed by the government for the purposes of liquidating inventory…
I think arm resets will lead Long Island price declines much like the rest of the country.
My father told me that he bought a house in Long Island in 1969 for $30k. He said it was the completion of the LIE that allowed people from the city to move further out and housing prices to skyrocket.
Danni - I’m the same age as you. I’m on Long Island . I live on a street where a lobsterman bought his house for next to nothing and now young people are paying $400K+ in the same neighborhood for fear of missing out. People tell me all the time they wouldn’t be able to afford it now if they bought for the first time today…so I don’t buy the “it’s always been expensive” argument. Go on Zillow and see what these houses sold for in the 80’s and you will know that it always hasn’t been this way vs what people’s incomes were.
In the delusional minds of the average Bubble-Believer, EVERYWHERE is “special” and thus should not be affordable, especially if you’re one of those silly people who want to live in areas with jobs, without rampant crime, etc.
Thanks for posting this. One thing this does not take into account is taxes. Here in Texas, we have no income tax - so our property taxes are very high. Consequently, our house payments are much higher than normal.
Well here in NY we have income tax and high property taxes. L.I. and Westchester have taxes so high I could not afford to live there even if I could afford a house. My guess is they average $8k to $10K a year.
True, Texas has a high percentage (mill rate) for property taxes, but considering the price of the houses, it isn’t all that terrible.
Friends of mine in the DFW area are paying around $3k/year for property tax on their single family houses. But here in the DC Metro area, even though the tax rate is lower, the houses are assessed much higher, so almost all of my friends here are paying at least that in tax.
Soar 94%…
http://www.reuters.com/article/ousiv/idUSN2863185720071129
However up just 2% from a month earlier. Perhaps this is the level we well stay at for five years or so, month after month.
It would be interesting to find out whether the smaller rate of increase in the month you are referencing is just seasonal. I.e., this is the season when snowbirds are arriving, so maybe more FB residents were able actually to sell their places just now. My guess is, the trend will still be towards more repo’s.
“Nevada, once one of the hottest real estate markets and a favorite among investors, led the nation with one foreclosure filing for every 154 households…up 20 percent from September”
1/154 for one month! On a yearly basis that’s 1/13. Talk about an iceberg.
Basin & range geographically, a giant suckhole financially.
OT, but I read that Baby Grace story and it makes me sick to my stomach that someone could do such a thing to a child. Just because she didn’t say “please” and “yes sir” to her stepfather.
As discusted as I have ever been.
I’m more disgusted that this kind of crap also happens to children of color, but somehow the MSM only deals in stories of white blonde girls, be it “Baby Grace,” Natalee Holloway, etc. This is the kind of news that shrew Nancy Grace lives for.
What’s the Baby Grace story?
And is she related to Nancy?
It really is a sad story… http://www.upi.com/NewsTrack/Top_News/2007/11/28/baby_graces_mother_speaks_to_police/2081/
Those parents deserve to fry on the TX electric chair.
“…TX electric chair”
Probably won’t happen since they’re getting tried in Galveston. They didn’t even convict that rich murderer a few years back who chopped up his neighbor. Now if the trial was in Harris County they’d fry for sure.
Every time a story like that makes headlines I think what if one of my little girls was the victim and get sick to my stomach. How could anybody do such a thing to a innocent little girl? Death is too good for the perpetrator of such a crime.
The dad/perp
attempted suicide a week ago by overdosing on blood pressure medication and anti-depressants.
Not giving the guy a pass, but I wonder if his rage was due to anti-depressant side effects.
(side effects include the big pharm harvesting record profits)
I would guess the other way: He realized what a scumbag he was and tried to end it. Too bad he failed.
Devildog,
I understand your comment. I do disagree with it. Here is why: he should live with this for 6 or 7 decades. He will see this in his sleep. He will have flashbacks. He will suffer remorse and regret his whole life. He will never be able to come to terms with this.
His life will be a hell of his own making. Lock him up, and let him provide his own justice. I swear it works. I’m even pro-death penalty! He will be reminded about this every day.
That response is why the police try not to let people see the results of traffic accidents they cause. It does no good and will cause that person to go off the deep-end eventually. It is a matter of damage control. In this asshat’s case (stepfather) an ongoing remorse response is what we want - forever.
Roidy
Roidy,
I too understand your comments, but disagree. I want people like that dead not to punish them, but to keep them from doing it again. Our “justice” system is totally corrupt and you know there are very few people who actually do life.
If I’m around something like this would only happen to one of my girls over my dead body (although in that case it’s much more likely that the other guy(s) would be the ones dead). It’s what could happen while I’m gone at work that makes me scared. We have sex predators in our neighborhood and our since neighborhood is pretty nice it makes me think no place is truely safe. But at least out in the country you have a little more seperation.
“He will suffer remorse and regret his whole life. ”
Unless he has additional diagnosis of antisocial or narcissistic disorder.
DOC
I’m guessing the opposite - so many people wandering around that are mentally ill. Say what you will about big pharma, but meds can and do work for many and can be life changing. I remember a shrink telling me about bipolar ex - talk therapy is a waste of time with someone who is psychotic and in la la land. As to this worthless piece of scum - if he really wanted to die, he could have - rare for men to go the pill route - usually they’re much more showy.
These cases sometimes cry out for justice administered via alternative methods. Or at least they can drive one to have such thoughts.
This looks like a fascinating weekend topic; not in and of itself, of course (dead babies being something of an overall downer,) but as a test of our predictive powers. Given the diverse personalities and orientations represented on this blog, the comments so far are tracking exactly as one might expect.
“Devilgod” is on his Wrath of Jehovah kick,”Roidy” offers practical, reasoned advice, “DiplomatBob, is philosophical and, well, diplomatic…
As this thread develops throughout the day, one suspects it will provide a fascinating peek into our motivations for flocking to this diverse little microcosm. Thank you, Ben. The check is in the PayPal.
I’m with Devildog. Makes me Old Testament all over…
Fisher, Very concerned…
http://www.dallasnews.com/sharedcontent/dws/bus/stories/112907dnbusdallasfedinflation.ab5e0d.html
I watched the debates last night and the dollar wasn’t mentioned once. Now they did talk about taxes and entitlements, etc. But if they don’t wake up about the dollar, the biggest part of the budget (SS Medicare, etc) will have jumped 30% plus. And these are almost immediate costs. Wake up Washington!
Guns and babies. Hot button pandering. Gimme a break.
Kudos to R. Paul last night on the question from the tax guy. He simply said that it’s meaningless to make a pledge not to raise taxes if you are simply going to borrow more money to increase spending.
It was a small thing, but it showed viewers how meaningless that pledge is. Hopefully viewers got a small education on the two sides of the coin.
For disclosure: Currently, undecided
The plan is to get all those who were “at or over 55″ when Bush said the words on SS & Medicare. Then eliminate the entitlement for those coming after, while raising payroll taxes on those still working (since retirement income is not subject to payroll taxes).
The only thing I an unsure about is the cutoff birth year for privilege.
Without asking your age or telling mine, I am pretty sure the cutoff year was before you or I were born.
It’s about 6,666 days before I can claim my 1st Social Security payment…
“about 6666 days before I can claim”
— about 3 1/2 weeks for me, but I won’t do it.
(a) Soc Sec stmt shows big delta between 62 and 70
(b) I might screw up Forex, need untouchable insurance
(c) Heirs not dependent on estate, more impt to make sure I don’t outlive my income
(d) Fed income tax bracket still high. Maybe it’ll be low if/when I buy a house! Then I’ll take Soc Sec(?)
Anyone who was not already near retirement when AG hiked entitlement taxes through the roof in the early 1980s was screwed.
Ah, but those extra taxes on working people and that increase in the retirement age “saved” social security, right?
az_
What would push you over the edge, to start taking payments?
There will be no entitlement monies for anyone.
Illegal anchor babies and their mothers will get it all.
http://www.statesman.com/news/content/news/stories/local/11/29/1129immig.html
I don’t hear anyone talking about the fact that there would be plenty of money to fund SS if the contributions hadn’t been stolen. Everyone made fun of Al and his “lockbox” in 2000. Again with the swipe at illegals when the real bad guys are getting away with it all. Central Bank, Fed, Government, housing crooks - none are illegals. Keep focusing on the bottom of the food chain while the top is robbing everyone blind - that’s a plan that will work.
‘Ah, but those extra taxes on working people and that increase in the retirement age “saved” social security, right?’
They paid for lots of Winnebagos to help current retirees enjoy their golden years. Not sure about saving SS, though.
“Keep focusing on the bottom of the food chain while the top is robbing everyone blind - that’s a plan that will work.”
BULLSEYE! BINGO! RIGHTO!
RE: Keep focusing on the bottom of the food chain while the top is robbing everyone blind - that’s a plan that will work.
Nothin’ new here.
The middle is gettin’ fooked from both ends.
I don’t know how much play this got in the national media, but locally the TV news stations were reporting on the protests by the homeless population in St. Petersburg that preceded and accompanied the debates. St. Pete has had a very unified and persistent homeless coalition that has had its own tent city, etc. In light of Florida’s participation in the housing bubble, it seems to be fitting that the debates were accompanied by protests on the part of the homeless.
The Republican party has come up with a clever way to stop the Ron Paul bandwagon. Have you noticed that at the last two Republican debates they filled the room with pro-war types who boo everytime he opens his mouth? I’m sure that the party was afraid when polls showed that Paul won the first two debates.
not really a reply to your post palmetto but a contrast.
“The ousted CEO of Citicorp, Chuck Prince, who had to own up
to approximately $17 billion in write downs and Cayman Islands’ black holes, is receiving a bon voyage package that includes a performance bonus of $12.5 million, salary and stock holdings of $68 million, a $1.7 million pension, an office, car and driver for up to five years.”
the disparities are just much more than i can fathom. what in hell is going on here? and one in 4 of our homeless are amongst our bravest and best-Vets of Iraq and Afghanistan!
Crony-Capitalists Fiddle While Main Street Burns
http://tinyurl.com/38mwr9
Check it out…
Rubin got his own Official U.S. Mint medal, is it too late for the bonny Prince to get one, as well?
http://catalog.usmint.gov/webapp/wcs/stores/servlet/ProductDisplay?catalogId=10001&storeId=10001&productId=10862&langId=-1&parent_category_rn=10144
I have a bone to pick with the 1 out of every 4 homeless are Vets. I believe this stat is WAY off. As a military officer currently serving in Iraq. I have talked to many homeless about their experiences and either they have fried their brain on alcohol and don’t remember their facts or they were never in the military but they know it is an easy way to pander for money so they lie.
“30% plus” sounds right to me. I indulged in a bottle of a popular Scotch at the duty free shop last week. I noticed it had been repriced. The label underneath indicated the change was +35%. I know that’s not health care, but it seems a pretty naked gauge of the cost of things in general.
Why the greenback & the economy gets short shrift @ the debates?
Finances for most Americans are a Debbie Downer affair…
You know if you look into yours, you’re not gonna like what you see.
So our so-called leaders never go there.
Republicans don’t really care about the deficit and the dollar, just look at the last 7 years. It’s the most dissapointing part of this administration. (which I admittedly voted for) The sad thing is you know the Democrats aren’t going to balance the budget either.
Vote Ron Paul!
Can someone explain to me why Ron Paul is part of the Reps? Why is he running as a Rep? He ran for President in 88 as a Libertarian - why the change of party?
‘Can someone explain to me why Ron Paul is part of the Reps? Why is he running as a Rep? He ran for President in 88 as a Libertarian - why the change of party?’
Actually, he got the nomination twice.
I had a long talk with Dr Paul about this very subject the first time I met him. He was running for congress again after the presidential runs, and I was volunteering. He gave me a long, detailed explanation, which could be boiled down to, ’so I can win and be effective.’ And he was right. He won and has been re-elected ever since.
But why stick with them now when the party doesn’t really represent his values, are in a losing position, and he has little chance of getting the nomination of that party? Why not run as an independent?
He is actually the only true Republican; the party left him.
Amen to that. I’m also a true Republican, who is disgusted with these Wall Street marionettes masquerading as Republicans. The party left me, not the other way around. Ron Paul in 2008!
I agree with Bronco. That’s why I left the Rep party several years ago and became a card-carrying Libertarian. RP has to be in one of the two major parties to win the office. He’s just being very practical.
I finally abandoned the dem party last year and support Ron Paul. I don’t care what flag he sails under.
Pardon me while I laugh sardonically:
Market Signals
“We need to do what’s right for the economy,” Fisher told reporters today. “The Fed will not be bullied by markets, the Fed will not be ignorant of markets. The Fed will take into account the signals that we’re getting from markets.”
Hey, GDP revised to 4.9%, the markets not gonna ignore the Ministry of Truth either.
Recession cancelled due to lack of interest.
…..rising inventories….. kinda like the bloated payrolls.
Without prepositions…economy in recession.
Ever talking head says heading to recession, but how does one know whether we are in a recession or not? What are clear signs?
Officially you need two quarters of declining GDP. Since those books are cooked, look at stuff like the absolute length of the “help wanted” section in your local paper.
Thanks. It’s scary that the ones potentially responsible for a situation are also the ones that analyze whether the situation has happened or not.
Every newshound currently wants to be the 1st with breaking news about much ado about nothing, but is terrified of speaking the truth about pressing matters, financially.
Recently a Walmart opened in Cleveland. 6,000 people lined up to interview for 300 jobs. Financial newsguy said what I was thinking “Wow, that looks like a picture you would see in a history textbook about the great depression”.
1 job per 20 applicants, for a wally world job!
The recession will not be right back after a message
about a white tornado, white lightning, or white people.
You will not have to worry about a dove in your
bedroom, a tiger in your tank, or the giant in your toilet bowl.
The recession will not go better with Coke.
The recession will not fight the germs that may cause bad breath.
The recession will put you in the driver’s seat.
The recession will not be televised.
The recession will not be televised.
The recession will not be televised.
I talked to my broker 2 days ago and he admitted he thought we were in a recession. This is a huge turn around for him. He did believe the Fed cuts would make everything OK and we would be back on track in a year or so. This is where I differ and am considering shorting the market in the next couple of days.
As an aside to Fed President Fischer’s comments yesterday about inflation concerns: are we seeing Fischer and Kohn setting themselves up to be Bernanke’s eventual replacement (with opposing viewpoints)? It seemed like when Greenspan’s chairmanship was in its twilight years, we started hearing quite a bit from Bernanke.
Nothing concrete here. Just going with a hunch, and wondering if anyone else shares it…
(single-b rated) is such the perfect fall guy, for the powers that be.
A tweedy professorial type, that rues the day he took the job, methinks.
The current choice was pretty much between BB and Kohn. Kohn was also a Greenspan confidant. To an interested Fed outsider like me, he appears to be a likely successor (but insiders may have better info).
I don’t have inside information, but it seems Greenspan’s legacy is somewhat tarnished right now, and not just by us tinfoil types. Seems a lot of other people are finally starting to catch on. I’m not sure appointing someone with the idea that he will be another Greenspan would be a good political move. Public opinion has turned.
BTW, did you happen to see Al Hubbard’s comments on Bloomberg yesterday? I couldn’t decide whether to laugh at the absurdity of the fact that this guy was advising the president, or cry over the fact that if this guy is any indication, no one in the White House has any clue what’s really going on. What a dolt. That he’s leaving (perhaps at someone’s suggestion?) tells me that maybe, just maybe, the pols are looking for different opinions, not more of the same. Who knows.
“BTW, did you happen to see Al Hubbard’s comments on Bloomberg yesterday?”
No but I heard them on Bberg Radio yesterday on the way home. I almost ran off the road from the massive dose of bullshit coming over the radio. “The economy is solid” sez the whitehouse economic ideologue.
“The economy is solid” That was yesterday. But look what showed up in Tuesday’s news (right before the resignation announcement)…
http://www.reuters.com/article/ousiv/idUSN2749251320071127
U.S. will avoid recession in 2008, White House says
Formal forecast sees steady growth, tick up in unemployment rate
By Greg Robb, MarketWatch
Last update: 12:13 p.m. EST Nov. 29, 2007
WASHINGTON (MarketWatch) - The U.S. economy will be able to walk across the minefield of the housing downturn, possible credit crunch and rising oil prices without blowing up, according to the official White House economic forecast released Thursday.
http://www.marketwatch.com/news/story/us-avoid-recession-2008-white/story.aspx?guid=%7B079CA591-22E6-476C-A807-B4FB00DC122C%7D
“But job growth should average a healthy 109,000 per month next year. This is down from this year’s estimated average of 29,000 jobs created per month.”
Up is down,
Black is white,
Debt is wealth,
Wrong is right.
Fair is foul
and foul is fair,
Hover through the fog and filthy air.
NEW, DARKER WORLD
“It is a completely different world now and we expect GDP to actually contract over the final three months of this year,” said Paul Ashworth, an economist with Capital Economics Inc in London. “The chances of an outright recession — two quarters of negative growth — are probably as high as 50-50.”
http://www.reuters.com/article/ousiv/idUSMAR96797720071130
SHADES OF GREEN
Trash talk
Commentary: Five signs we’re jawboning ourselves into a recession
By Chris Pummer
Last update: 7:31 p.m. EST Nov. 28, 2007
SAN FRANCISCO (MarketWatch) — As the U.S. economy was sliding into recession in December 1957, a Dallas bank executive suggested to Time magazine the key to how bad things might get: “Psychology is the joker in the economy’s deck of cards.”
Indeed, two months after our Cold War nemesis beat us into space with Sputnik, America suffered a crisis of confidence to which our post-9/11 loss of spirit paled by comparison. In the following three months, the economy slowed 10.4% in the worst quarterly contraction — by an almost twofold margin — from the Great Depression to today.
http://www.marketwatch.com/news/story/shades-green-five-signs-we/story.aspx?guid=%7B08E730CA-73E4-4C80-B664-00501FD85D26%7D&dist=hplatest
“Chris Pummer”
There is no credit crunch or housing bust in this dude’s corner of the universe. The whole recession scare is due to trash talk and negative psychology.
On the other hand…
As credit dries up in U.S., concerns mount about recession
By Peter S. Goodman
Published: November 29, 2007
NEW YORK: Credit flowing to American companies is drying up at a pace not seen in decades, threatening the creation of new jobs and the expansion of businesses, while intensifying worries that the economy may be headed for recession.
The combined value of two key sources of credit - outstanding commercial and industrial bank loans, and short-term loans known as commercial paper - peaked at about $3.3 trillion in August, according to data from the Federal Reserve. By mid-November, such credit was down to $3 trillion, a drop of nearly 9 percent.
Not once in the years since the Fed began tracking such numbers in 1973 have these arteries of finance constricted so rapidly. Smaller declines preceded three recessions going back to 1975.
http://www.iht.com/articles/2007/11/29/business/28lend.php
San Diego’s Economy Continues to Worsen
Nov 29, 2007
KPBS News
The Index of Leading Economic Indicators for San Diego County fell 1.2 percent in October, the third significant decline in a row. University of San Diego economist Alan Gin compiles the forecast. The forecast for the San Diego County economy has been in negative territory for 18 of the past 19 months.
Gin says the decline was led by sharp drops in building permits, consumer confidence, help-wanted advertising and the outlook in the national economy, coupled with a rise in the number of initial claims for unemployment insurance. He says the outlook for the local economy remains unchanged, with weak growth and continued pressure on the housing market through at least the first half of next year.
A recession in the local economy is possible, but not likely as San Diego has few of the industries that are severely impacted by the economic downtown, such as automobile and steel production, he said.
What about HOUSING, HOUSING and HOUSING?
http://www.kpbs.org/news/local;id=10343
Paulson Seeks Accord With Banks to Refinance Subprime Mortgages
By Alison Vekshin and Craig Torres
Nov. 29 (Bloomberg) — U.S. Treasury Secretary Henry Paulson is trying to forge an agreement with lenders to stem a surge in foreclosures by giving troubled borrowers more affordable loans, according to people familiar with a meeting he led today.
Paulson, who addresses a housing conference on Dec. 3, presided over a one-hour gathering at the Treasury Department in Washington with federal regulators, bankers and lobbyists. Executives of Citigroup Inc., Wells Fargo & Co. and Washington Mutual Inc. attended, said a person present, who spoke on condition they not be identified.
http://www.bloomberg.com/apps/news?pid=20601103&sid=amDcMiOEQjHU&refer=us
The Short View
By John Authers
Published: November 29 2007 17:43 | Last updated: November 29 2007 17:43
What happened? Financial stocks have enjoyed a huge bounce in the last three days, surfing on renewed optimism that the Federal Reserve is coming to the rescue and that an end to the credit squeeze is in sight. That optimism does not look justified.
http://www.ft.com/cms/s/12837d06-9ea1-11dc-b4e4-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F12837d06-9ea1-11dc-b4e4-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
Bernanke clears way for Fed rate cut
By Krishna Guha in Washington and Daniel Pimlott in New York
Published: November 29 2007 16:16 | Last updated: November 30 2007 00:54
Ben Bernanke put the Federal Reserve on a path towards a December rate cut in a speech on Thursday night in which he said the relapse in financial markets had resulted in a “tightening in financial conditions” that had the potential to harm the real economy.
The Fed chairman also said recent data on household spending had been “on the soft side” and warned that the combination of higher petrol prices, the weak housing market, tighter credit conditions and declines in stock prices seem likely to create some headwinds for the consumer in the months ahead.
http://www.ft.com/cms/s/86516d38-9e92-11dc-b4e4-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F86516d38-9e92-11dc-b4e4-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
Recession? No.
Full blown panic? Yes.
Time to get real. In case it is still difficult to discern, subprime is not contained.
The dollar
The panic about the dollar
Nov 29th 2007
From The Economist print edition
A full-blown dollar collapse would be disastrous. Thankfully, it need not happen
http://economist.com/opinion/displaystory.cfm?story_id=10215040
God forgive me. No more hurting children, please Tom. Too much rage.
Amen,
Leigh
jesse jackson was just on fox news. he plans to march on wall street because of the foreclosures on peoples homes.
Yep… Caught the tail end of the Race Pimp. Watch for the call for direct government lending to save all of these “victims”. This is just the beginning.
“Reverend” Jesse Jackson
“Reverend” Jerry Fallwell
“Reverend” James Dobson
“Reverend” Pat Robertson
I can’t tell which one is which.
You left out a main “playa”
The “Reverend” Al Sharpton
Let us not forget Ralph “I don’t support gambling” Reed.
Elmer Gantrys, one and all.
He doesn’t support gambling cause it cuts into their bingo nights. The church doesn’t like competition.
You forgot “Reverend” Ted Haggard.
http://youtube.com/watch?v=Fe-XSItxhCs
RE: You left out a main “playa”
The “Reverend” Al Sharpton
Imus Lives…paybacks will be a bitch.
FWIW Falwell is dead.
Not until the coroner admits that it wasn’t because of a wooden stake through his heart, will I ever believe he’s gone.
To all those reverends I would add a small time reverend who stole $24,000 worth of business equipment from my father in the 1970s. I have been an atheist for decades. The best way to not be swindled by the Bible thumpers is to use reason as your guide, not religion.
Is that because blacks were “targeted” for this bubble by the lenders? Because, if he honestly believes that, I have a lovely, bubble built community to show him in FL with maybe 1% of the entire population here being black. And trust me, these people are losing “their” homes at an alarming rate here too!
Some things are worth marching on Washington for; how about the war on savers Jessie?? But marching because lots of your “followers” made bad financial choices? Come on, they had a choice, just like we all do. I thought that is what equal rights were all about?
I’m not a fan, but I don’t think some of his rhethoric is related to race at all but also class (similar to the Rainbow Coalition). I think here is an issue related to poor people, whatever color. Who are his followers? That’s funny.
Oh it’s a bout race. He might throw in something else to try to look more legit but without a race component he’d be out of a “job”.
Have you spoken with him to be sure of this? I have a friend that doesn’t know what her teenager is really thinking, but is so sure she knows what people she never met are thinking.
To be fair, it might not be about race. His coffers might be low, or he might have another illegitimate son needing a job, too.
Just food for thought. I think we spend so much time demonizing people that we miss the forrest for the trees.
In 1983, Jackson traveled to Syria to secure the release of a captured American pilot, Navy Lt. Robert Goodman who was being held by the Syrian government.
In June 1984, Jackson negotiated the release of twenty-two Americans being held in Cuba after an invitation by Cuban president Fidel Castro
In April 1999, during the Kosovo War, Jackson traveled to Belgrade to negotiate the release of three U.S. POWs captured on the Macedonia border while patrolling with a UN peacekeeping unit. He met with the then-Yugoslav president Slobodan Milošević, who later agreed to release the three men.
On February 15, 2003, Jackson spoke in front of over one million people (estimate) in Hyde Park, London at the culmination of the Anti-War Demonstration against the imminent invasion of Iraq by the U.S. and the United Kingdom.
I don’t recall Falwell or Robertson negotiating the release of POW’s or doing anything positive like JJ did.
One of the biggest ways to avoid discussions is to turn someone into a demon. I’ve seen this time and time again. If you demonize someone successfully, you can avoid paying attention to anything they say (whether right or wrong) because you ignore the message and focus on the messenger. This is very dangerous. We create a world where some can do no wrong and others can do no right, when the truth is more in the middle for both.
But Pat Robertson used his operation smile planes to transport diamond mining equipment. He also deals with gov’ts that are evil. I used to live next to their huge compound in Virginia Beach, not much action though. I only ever remember one set of protesters, and that was over the diamond mining. Religion is silly, but it keeps the proles in check.
How and why was ol’ Pat involved in diamond mining??
There are definitely bubbles where minorities were targetted by scam brokers. I seem to remember a map in the new england area that showed a predominance of black foreclosures in that area. Also single mothers of any race were targetted as well. My gut feeling tells me it was because they were easy marks, but it may have had to do with simple demographics.
It’s not like scam artists turned away traditional white families though. It’s pretty obvious they were out screwing anyone they could for their own proffit due to greed. It would be interesting though to see what affect borrower education levels had on them taking out loans (both to purchase and HELOCs) though, as well as their economic situation.
I don’t think blacks alone were targeted by lenders. I think the target was bad credit, no down payment people of all races who otherwise couldn’t buy a house. They were lured with the promise of the American dream no matter what their finances.
Actually, blacks and minorities were targeted in the sense that they ended up with ‘worse’ loans than their white counterparts.
Just for fun, I can’t resist answering your post for Jesse.
Mr. Fink….
” …….1% of the entire population here being black. And trust me, these people are losing “their” homes at an alarming rate here too!”
Jesse..
That ummm, is what they ummmm, get. You see, the land-ah, was not theyas anyway, as you know-ah, they took it from the Indians.
Wow, when I read that I could almost hear his voice…
“jesse jackson was just on fox news. he plans to march on wall street because of the foreclosures on peoples homes.”
A hugh no of marginal subprime borrowers in inner city hoods
all across America, many if not most of them minorities /recent immigrants, are losing their homes to foreclusures. Thus Jesse Jackson’s planned march on Wall St. I personally think he is a racial panderer. Lots of white middle class or working class folks also losing their homes or in deep financial mess with the mew’s and being badly underwater but does he have their interests at heart?
I don’t think so!
I don’t know one way or the other. Could you really tell this from his time on Fox News? A lot of people were blasting Kanye West for saying that GW doesn’t like black people and I wonder how they can then turn around and say JJ doesn’t like white people. How can you make this analysis? Also, there are not only white middle class or working class folks, but there are also white very, very poor people. Many people forget this. He also marched against the War in Iraq. Do you think that was only for black people?
I think it’s a class issue and minorities and immigrants happen to be at the bottom. The middle class really didn’t care much about the poor until they became the poor with all the offshoring and loss of good middle class jobs. Now it’s like a food fight with everyone trying to find blame and finding it easier to blame those below than above. Wage slaves are beholden to those farther up the food chain for everything.
The Rev’rend Jes’ Me Jackson and his Operation PUSH are ever alert for new shakedown opportunities. That said, the predatory mortgage sharks preyed disproportionately on blacks and Hispanics, and I for one would be delighted to see the tables turned on the sharks. Of course, the way it works, Jes’ Me will pocket his obligatory payoff from the Man, then forget all about the so-called “victims” he supposedly is advocating for.
E*Trade Gets Help From Citadel
Hedge Fund to Buy Notes,
Portfolio for $2.55 Billion;
CEO Caplan Steps Down
http://online.wsj.com/article/SB119630834657507587.html?mod=googlenews_wsj
I forsee bad writedowns for other banks. 73% writedown? Yow.
E*BK
Does anyone have insight on the amount of petro dollars in hedge funds? As in, ‘those foreign investors’.
I talked to a friend not long ago. She is middle class, even traveled abroad a lot in the past, as part of airline crews. She honestly thought that Dubai was an environment like Iraq, dangerous & consisting of something like mudhuts and bedouins on camels. I showed her the photos on the web, and I was as much shocked about her distorted beliefs that she was about what she saw.
I mean, petro dollars were always recycled back into global (US) investments. The oil producing states always had armies of Western and US investment bankers working for them, over there (have visited friends who did just that in Dubai in early nineties).
I wonder if there is now a mindset in the US which is kind of, well, insular? As in, a kind of distorted view of the world?
If you mean do Americans not care what the world thinks of us, and do we generally feel that if it doesn’t happen in the USA it’s not all that important, then yeah.. we’re kinda “insular”..
85% of us don’t have passports, which means there is no way to meet the other 95% of the world. And that’s when stereotyping is born.
No man can be an island, but he sure can build walls.
But, on the other side of the cliche coin, good fences do make good neighbors.
Is the U.S.A. the “Great Satan” or not? My insular viewpoints can’t let me answer that question in a wordly way…
My opinion is that the U.S. is not a great Satan, but does a good impersonation at times…
I think we are kind of where the British Empire was 50 years ago. Facing a long decline, degree of Satanism irrelevant.
I’d go back further…
1917, when England realized it was broke, because of World War 1.
Not a great Satan in any way, just apparently run by a bunch of f**kups.
Wells Fargo
http://www.thestreet.com/s/analysts-question-wells-loan-loss-provision/newsanalysis/banking/10392096.html?puc=_tscana
I don’t think some of this banks know where to begin with setting their write-down provisions. I think in many cases is probably more “best hope” versus “worst nightmare.” Even worse than the S&L debacle, it will take years maybe decades to figure the true cost.
Guess, I so want you to be correct!
Unfortunately, these “write downs” are happening by the minute.
I prefer the slow easing vs the improbable implosion.
The true cost is easy to figure!
Financial institutions may take a decade to disclose.
Party on dudes.
I recall Hoz saying that Wells Fargo made more HELOCs than any other bank. 12 billion sounds low to me, too. Any way to estimate the real amount of HELOCs made by Wells?
I read through a Credit Suisse mortgage report several months ago, and the most surprising thing that I saw was how conservative WF was in their loan underwriting. LTV, and number of subprimes was very low relative to almost all other banks.
It wouldn’t surprise me if they are coming clean with their total exposure.
When the CEO says (paraphrasing): “I don’t understand why they needed to come up with new ways to lose money when the old ones worked just fine.”, I can just about believe that they stuck to their underwriting more than most.
Bloomberg Radio reported this morning that E-trade is getting a $2 billion “cash infusion” due to sub-prime problem.
Stealth bailout of the wealthy elite and corporatists continues.
How is this a bail-out? Do you suppose this corporation is just giving them the money?
You got that right. One need only look at some of the telecom equipment companies that took “investments” from hedge funds and how long their stocks stayed in the dumper. Years.
I dunno Ben. Where is the $$ coming from? What are the terms of the “loan”? Is the end result a restructured mortgage note between FB and creditor so as to keep the charade going? A bailout is a bailout irrespective of which end gets bailed out first.
Where does it come from? When I was an accountant, we usually used bank accounts, etc. And yes, for a couple billion, there are likely to be terms.
Terms or no, the fact is that there is just not money/”liquidity” around to pay off all the debt that was incurred. I could easily imagine something like:
Citadel bails out e*trade, Goldman Sachs bails out Citadel, Carlyle bails out Goldman, Freddie Mac bails out Carlyle, Bernanke drops the discount window again so Freddie Mac can borrow from the Treasury, Freddie Mac ultimately defaults, so that Freddie is bailed out by my tax money which should go to my future SS income but instead is now just plain ol’ taxes.
If all this happens at 90-day intervals, with plenty of MSM stories about Baby Grace and OJ Simpson in between to keep J6P occupied, it will all go down just in time to blame it on Hillary.
It seems like politics in America has degenerated into a high spped game of “gotcha” chicken. The Dems fudge economic numbers and leave a mess for the incoming Repubs who then up the ante and make an even bigger mess, pulling all kinds of strings and shennanigans to push off paying the piper until the Dems are back in office.
As far as I’m concerned they’re all a bunch of crooks who couldn’t care less about this country and we’d all be better off without them.
From a consumer standpoint, when you mismanaged your money the typical results are:
1. Living paycheck to payecheck.
2. Credit is shot
3. Can’t get anymore credit
3a. If we do get more credit, we pay enormous fees with higher interest rates and very little capital.
4. Will have to cut expenditures to payoff debt.
5. Maybe file for bankruptcy and wait it out for 7 years to start over.
If you are a Corporate Investment Firm that mismanaged its money, you get easy money thrown at you from a Helicopter.
“As far as I’m concerned they’re all a bunch of crooks who couldn’t care less about this country and we’d all be better off without them. ”
Don’t worry…
When the s**t really hits the fan…
(1.) Haliburton will bid for a huge fed grant to buy up all the vacant homes as the US’ biggest corporate landlord. Of course, making a tidy profit off of the “necessary” rent subsidities.
(2.) Blackstone will be contracted out for security.
Sarcasm off
DOC
Sarcasm? Unfortunately you just enunciated the basic plan. (I never have figured out what those Halliburton detention centers are for)
if it drops much lower i’ll be sorely tempted to give them a little “cash infusion” of my own..
Doesn’t this set a price for the asset backed paper of .27 on the dollar since they bought 3 billion for 800 million?
Ah, a reasonable person might think so, but alas, each little package of loans is just different enough that the shenanigans will undoubtedly continue.
To auditors:
“But their junk is much different from our junk. Our junk is worth much, much more. I promise. I pinky swear promise.”
http://www.washingtonpost.com/wp-dyn/content/article/2007/11/28/AR2007112802196.html
Ms. Leigh,
I read this last night and having been on both sides of BODs, I was personally disgusted.
There are some goods reasons to keep ‘activist investors’ out of the board room, but the tax laws favor get rich quick type of investments. Force the company to get rid of marginally profitable manufacturing, move jobs overseas, borrow moneys to do share buybacks. A recent example is TXU take over. Screw long term plans for short term profits, strip the company and then do a new IPO.
In the meantime, the benefits of being able to challenge the role of the BOD has been one of the few things that has been a positive force for concerned citizens on corporate responsibility.
Morning Hoz,
Perhaps there is a way to strike a balance.
I agree you cannot have the investors challenging each BOD decision, and I honestly do not know how to strike a balance.
BOD are too out of control–they seem to act as if they are above their investors.
Maybe that’s the answer, pull out the investments?
Best,
Leigh
“BOD are too out of control–they seem to act as if they are above their investors.”
Hmmm Government and Industry unresponsive to the people they “serve”.
The Fed Cuckoo Clock
http://www.stockmania.com/index.php?showimage=102
Given that Kohn made the capitulation announcement, should the policy properly be termed the “Kohn put” at this point?
Yeah, did you read the quote of his about not little a small group hold the economy hostage? Geez.
Loved the cartoon.
I believe Bernanke is going to be speaking later this afternoon or this evening. The market lately has not done too well when he has spoken. Maybe that could be subject of one of your cartoons (maybe another cuckoo clock moment)?
Gotta love our fedcentric FREE economy where everything turns on the words of one guy.
I’d like to wish (single-b rated) into the cornfield.
Ha. Me too.
This was headline news here in Dubai today - UAE is about to break their dollar peg due to social and economic pressure. The paper says it’s likely going to be on Sunday which is a holiday here due to the uae national day
http://www.emiratestodayonline.com/
It probably will appreciate against the USD as fast as it did for Kuwait earlier this year. I wonder how long before the Saudis follow suit.
And to think one of the reasons for Iraq was Saddam asking euros instead of dollars for oil.
Thank you for the info and link!
Last month, bank officials thought IKB’s problems were contained, but they discovered new issues as it prepared to report its first-half financial results Friday.
uh oh.
http://online.wsj.com/article/SB119633050747107844.html?mod=googlenews_wsj
“but they discovered new issues ”
Sure is a lot of that going on.
Banks and brokers are having a terrible time. Now the misery is spreading:
The Economist
http://tinyurl.com/2y387g
The only truly upbeat firms in America nowadays are the accounting giants, which for once are not being blamed for a financial disaster (this time that honour belongs to the rating agencies). They are determined to keep it that way, and are said to be racking up huge fees by challenging every assumption in banks’ financial models to make sure they cannot be accused of optimism. The banks are thus having to disclose ever bigger write-offs, contributing to fear of recession in America both indirectly, by delivering a stream of bad news, and directly, by constraining banks’ ability to lend.
Gee, I would hate to see the banks have to be honest about their finances.
The pickle they are in is this…
Imagine skating through high school, cheating all the way?
Everything is going great, until you get caught a week before you are supposed to graduate, as a senior.
To graduate, you must cram almost 4 years of learning into 1 week.
“To graduate, you must cram almost 4 years of learning into 1 week”
“Options”:
Johnny Cravenmore, skate-boarding past the principles office, sees his creative language teacher, Ms Monica, come out buttoning up her blouse. Startled, she says to him with a firm tone, “Johnny what are you doing on campus at 11pm?”
Johnny: “Getting my “Civics” book, so I can try to graduate next week…by the way…you have your blouse on inside out, see you tomorrow Ms. Monica & Principle Rachel!
RE: They are determined to keep it that way, and are said to be racking up huge fees by challenging every assumption in banks’ financial models to make sure they cannot be accused of optimism.
LMAO…the ultimate pay-back.
Who says there’s no divine retribution!
The post has made my day!
Municipal Bond Deals Squeezed By Credit Crisis
By David Cho
Washington Post Staff Writer
Thursday, November 29, 2007; Page A01
http://www.washingtonpost.com/wp-dyn/content/article/2007/11/28/AR2007112802486.html?hpid%3Dtopnews&sub=AR
The widening credit crunch is making it harder for cities and school systems to get money for buildings, ballparks and other vital projects from the $2.5 trillion market for municipal bonds, a sector of Wall Street that rarely sees trouble.
That is leaving them with a tough choice: either put off the projects, or pay higher interest rates on their bonds, a cost that ultimately would fall on the backs of taxpayers.
The problem is affecting municipalities with lower credit ratings, which require them to pay more to borrow money.
Faced with the prospect of paying higher interest rates this month, Chicago canceled a $960 million bond. Miami-Dade County pulled a $540 million offering for its airport. And the District has a $350 million bond for schools, parks and roads scheduled for next month that could be delayed if credit conditions continue to deteriorate, a top D.C. finance official said.
Several finance directors said it is unusual for turbulence to hit municipal bonds, a tax-exempt investment that has long been considered safe.
“There’s some unique and maybe even unprecedented dynamics that have been occurring because of the credit crunch,” said Lasana Mack, the District’s treasurer.
“That is leaving them with a tough choice: either put off the projects, or pay higher interest rates on their bonds, a cost that ultimately would fall on the backs of taxpayers.”
Put off the projects, same as people who are now tapped out and wanted to put that game-room addition on their house, or whatever. Put off the projects, please.
P,
Agreed on putting off the projects.
However, these projects are seen as the cash infusion that will get the economy going and create jobs. It’s an awful idea and painful to watch.
Yikes! This is the first thing in this whole mess that has given me chills about my parents’ situation. My dad is a foreman for a construction company that has nothing to do with housing, specializing in schools, hospitals and other large, generally reliable projects.
Trying to decide if I should point this out, as they discuss whether he should buy into the company as a partner (about $60,000, I’d guess).
YikesYikesYikes…
Bavaria: point it out. Point it out. Point it out. You can politely lie to social acquaintances, you should be honest with your father in this case.
If they are well-run and have some kind of competitive advantage - they may thrive where others fail in a tougher environment. A slowdown in this kind of construction may hurt in the near term, but it might also winnow out some of the competition. Good luck to him in any event.
RE: My dad is a foreman for a construction company that has nothing to do with housing, specializing in schools, hospitals and other large, generally reliable projects.
Trying to decide if I should point this out, as they discuss whether he should buy into the company as a partner (about $60,000, I’d guess).
I’m readin’ various blurbs about muni’s in financial trouble doin’ “the check is in the mail dance” (meaning to stiff or dribble out the payments) to small vendors so as to make the budget monies stretch out longer.
Only one’s makin’ out these days are lawyers.
I wouldn’t take on any biz related to construction until this coming whopper of a recession blows thru.
According to the reporter a ballpark is a “vital” project. I thought vital municipal projects were water, sewage, public health, and emergency services. The problem with municipalities is that people who run them (and vote for the officials) can’t distinguish among vital, nice-to-have, and frills.
It is vital because the developer that owns the land around there has pledged huge kick backs to the politicians should the project go through and make the value of his land double or more.
As Lenders Tighten Flow of Credit, Growth at Risk
By PETER S. GOODMAN — NY Times
Published: November 29, 2007
http://www.nytimes.com/2007/11/29/business/29lend.html?_r=1&hp&oref=slogin
Credit flowing to American companies is drying up at a pace not seen in decades, threatening the creation of jobs and the expansion of businesses, while intensifying worries that the economy may be headed for recession.
The Fed’s vice chairman, Donald L. Kohn, spoke to the Council on Foreign Relations today in New York.
The combined value of two leading sources of credit — outstanding commercial and industrial bank loans, and short-term loans known as commercial paper — peaked at about $3.3 trillion in August, according to data from the Federal Reserve. By mid-November, such credit was down to $3 trillion, a drop of nearly 9 percent.
Not once in the years since the Fed began tracking such numbers in 1973 has this artery of finance constricted so rapidly. Smaller declines preceded three recessions going back to 1975; at other times such declines tended to occur in conjunction with an economic downturn.
Policy makers at the Federal Reserve are growing increasingly alarmed about the problem, which is an outgrowth of the woes of the housing and mortgage industries. Just yesterday, the Fed’s vice chairman, Donald L. Kohn, said that the latest market turbulence appeared to be reducing credit to businesses and consumers, hinting that the central bank, in response, was prepared to cut interest rates further.
“As Lenders Tighten Flow of Credit, Growth at Risk”
“Growth” is not always a good thing, ask anyone who has had cancer.
“Growth for the sake of growth is the ideology of the cancer cell.” (iirc) –John Nichols
I can tell you with certainty that this is what worries the Fed, not the stock market or even the housing market.
This is the flipside of “disintermediation,” companies floating bonds rather than borrowing from banks. Bank lending capacity has shrunk as a result, with losses on real estate shrinking capital further. So now that no one wants the bonds, bank loans cannot make up the difference.
The question remains, given the shortage of money (because Americans don’t save) and the risk of inflation, why are rates so low? It doesn’t seem sustainable.
because everyone has begun to catch on that the dollar is increasingly worthlesss and they all think that it is better to pump it back at us and get whatever they can.
My mantra continues: Cash is King. Sell your stuff and get into cash, delation is at hand.
Gold is king.
Cash is only king if you think the Fed and the American public has a stronger stomach than you do (in the face of declining output and rising unemployment). They don’t. Gold is almost certain to win out over cash or bonds over the next 3 years.
Cash may devalue, but when it comes to buying what one needs cash is always king. Can’t take those paper investments on gold or gold bars to the market or gas station.
“Cash may devalue, but when it comes to buying what one needs cash is always king. Can’t take those paper investments on gold or gold bars to the market or gas station.”
No, but I can take it to my local gold coin dealer and get the cash I need.
“Gold is king. ”
And the price of Gold over the last 3 months has been UP…
DOWN …., SIDEWAYS …., or BUBBLEISCIOUS ????
Good point. If the home price vs median income chart shows a bubble, then why isn’t the same perceived to be true for gold? Gold has gone up more than median income over the last couple of years, just like housing from 00 to 05 in the US. hmm…
Gold is up 15% (over 60% on an annualized basis) over the last 3 months. Hardly down or sideways. Gold’s strong move in the last 4-5 years has gotten it all the way back to 1/3 of its inflation-adjusted value in 1980. Has underperformed every other financial asset I can think of since 1980, or 1970 or 1960, for that matter.
Gold should always be a part of an investor’s overall portfolio. The question is whether everything falls apart and if it does, Gold will be what is accepted worldwide regardless. That will always make it king.
I think it was Gary Klott’s book (New York Times Guide to Investing) that influenced me to cap my precious metals holdings to 10% of my net worth. Everyone on this board knows precious metals are cyclic. How far up will gold go? After the bubble bursts in gold, how far down will it go? I don’t care whichever way.
Bill - 10% is a pretty healthy cap. Wish I had that much — would have, but it was not worth the domestic unrest. Mine is more like 3.5%.
This is sort of OT, but with the housing market collapsing at a glacial pace (especially in NYC) this seems to be a financial story now.
I just read in the WSJ that corporate profits are down 4.4% year-over-year WITHOUT the write offs, and down big time with them. Profits have been at record levels relative to the economy, levels only made possible by paying American workers less and having them buy more by borrowing. That didn’t seem like something that would work in the long term.
Well, looking at the table in the WSJ, it says that while current S&P 500 earnings are 18 times past earnings, they are only 15-16 times next year’s earnings. Because earnings always go up?
What is the real P/E ratio, and (the inverse) rate of return on stocks?
“Profits have been at record levels relative to the economy, levels only made possible by paying American workers less and having them buy more by borrowing. That didn’t seem like something that would work in the long term.”
So the idea of borrowing our way to prosperity aka “supply side” isn’t sustainable?
It is likely that there will be a tax-payer bail out after the near-certain demise of GSEs.
This is from today’s WSJ:
“With portfolios of almost $3 trillion, capital of $65 billion, and no obvious end to the fall in home values, the continued solvency of Fannie Mae and Freddie Mac has to be in question. Last week, Freddie shocked Wall Street with a quarterly loss of over $2 billion, and in their subsequent discussion with analysts, Freddie’s management indicated more and larger losses could be expected.
…it is important to recognize that a loss of, say, 3% on portfolios of $3 trillion would easily wipe out what is left of their capital.
If this comes to pass, … Congress will have no choice but to bail out the institutions — possibly with as much or more taxpayer money than it used to bail out the S&L industry only 15 years ago.”
(If this comes to pass, … Congress will have no choice but to bail out the institutions).
These institutions were founded by the goverment to buy conforming loans and securitize them. After privitization, they diversified into other things to aid executive and shareholder enrichment.
Well, the Feds still own Ginnie Mae. How about expanding its mission to include what Fannie and Freddie were set up to do, and then founding a second mortgage securitizer with a temporary U.S. government guarantee and all the rules?
And then letting Fannie and Freddie go under.
Hear, hear. Those two are nothing but trouble.
“it is important to recognize that a loss of, say, 3% on portfolios of $3 trillion would easily wipe out what is left of their capital.”
This reeks of Long Term Capital, only the people involved might be more greedy and less intelligent.
Back from the conference in Chicago where I got to hear James Glssman talk about the economy. I took notes. I don’t have time to write them up now, but here is a very brief summary of the first one tenth or so of my notes:
Treasurey yields going down the way they have is a sign of “trauma”. There is lots to worry about BUT, consumer’s don’t cause recessions. Only reduced capital spending (by businesses) can cause a recession.
Believe me, there is a lot more. Evidently the world is going through a change equivalent to the renaissance - I think he meant huge quantities of people joining a world economy who didn’t participate before, not new developments in art and architecture.
Like I said more later, or more likely, tomorrow.
I’m glad you decided to stay the extra day to listen to him speak. Global participation comparable to the Reinaissance! That’s a perspective worth staying for.
But, global participation, i.e. rise in standard of living, requires water and energy and cooperation between cultures. Not sure if we have it.
Oxide,
I did not stay an extra day to hear him. Nobody would ever have allowed that. I stayed an extra three hours to hear him and eat rubber chicken and be available for conference participants to ask a few private questions and feel “listened to” by the government. Well worth doing, but I never could have gotten approval to stay for an extra overnight.
I was back at work yesterday. No time to post here. It happens.
Is this the same James Glassman who wrote “Dow 36,000″?
Yes.
Bwahaha!
He was the Lereah of the ’90’s stock bubble.
James K. Glassman. The bad one.
“There is lots to worry about BUT, consumer’s don’t cause recessions. Only reduced capital spending (by businesses) can cause a recession.”
The problem with the argument is that consumer spending and capital spending are subject to simultaneous causality. In laymen’s terms, they are “attached at the hip”; in economists’ terms, they are both endogenous.
Consumer spending = 2/3 of GDP
Capital spending = X of GDP, w/ X
(finishing that truncated thought)
with X less than 1/3 of GDP.
An exogenous drop in consumer spending (say, due to shut down of the home equity ATM machine or tightening of credit card financing) would not only lop off a chunk of consumption expenditures, but anticipation of lower consumption expenditures would tend to encourage less capital spending, as less business sales imply a lower level of demand, profits, production, and employment of labor and capital.
At the end of the day, it is hard to find variables in the economy that exist in a vacuum.
Just heard an “analyst” on CNBC say that the most of the subprime mess is behind us now and the market rallies from here. He said that nearly all write downs have already taken place. Don’t most of the resets happen next year? If so, wouldn’t there be more write downs in the future.
It’s amazing, $7.5 billion Arab dollars and a hint at a rate cut and “poof”, credit and subprime crisis is over.
Perhaps we have entered a New Era where Arabs coming in and snapping up U.S. financial assets at fire sale prices will save the day going forward?
Don’t mean to stir up Professor GS Bear but I heard earlier this morning on CNBC that the Treasury is disapointed in the speed of progress on the Super SIV and may take direct action. Just sayin what I heard…
I forget again where in the constitution it says the executive branch is responsible for “taking direct action” to try to keep commercial banks solvent despite mismanagement, at the expense of citize- er, consumers.
They have to do something, or else D-rats will accuse them of doing nothing.
Super SIV was dead the moment HSBC announced it simply transferred its SIV’s balance sheet onto HSBC’s books. The immediate question was “Why on earth do we need a super SIV when C, JPM, BOA etc can simply do the same if they aren’t trying to swindle Super SIV investors?”
They do not have the adequate assets to put $300B in CDOs on their books, let alone $83B in unfunded corporate loans unsold since August (BAC stands to lose $2B on that fiasco), They are all short CDO liquidity Puts that are now deep in the moneys, and now corporate loans are defaulting faster than subprime home buyers.
That should read $283B in unfunded loans.
“Bonds that helped Kohlberg Kravis Roberts & Co., Bain Capital LLC and Apax Partners Worldwide LLP pay for LBOs this year have dropped 15 percent below face value as record U.S. mortgage foreclosures sap demand for all but the highest-rated government notes. Banks have about $283 billion of LBO debt they planned selling, according to research by Bank of America Corp. in Charlotte, North Carolina….”
Bloomberg
29 Nov
That’s the point - i was addressing why no one that runs fresh money needed for SuperSIV would ever want to invest in it
Of course they won’t. C/BOA/JPM want us all to believe that they have the assets but dont want to put their money where their mouth is.
How would the direct action serve to identify and implicate bagholders?
Hey, you’re stirring me!
It makes me wonder if the $7.5B investment in Citi is going to look as good as BofA’s $2B investment in CFC. It’s dangerous business trying to catch the falling knife. Sometimes it’s better to let the whole thing crater and then sift through the rubble, than it is to try and help pull the thing out of a nose-dive…
Nope. C is a bond deal. Short the underlying and use the proceeds to buy bond. Bond pays 11% interest rate. Margin rate is 8%.
“If this comes to pass, … Congress will have no choice but to bail out the institutions — possibly with as much or more taxpayer money than it used to bail out the S&L industry only 15 years ago.”
What taxpayer money? We’re broke. Party’s over.
“Congress will have no choice but to bail out the institutions”
Congress will have no choice. Malarkey.
Our grandchildren’s tax monies.
That’s why I keep saying give a loan instead of a bail out and at least in the process of 10 to 15 years the taxpayers would get a yield on the money as well as the equity loaned back .
If lenders and banks can survive by spreading out losses for years ,than why shouldn’t the taxpayers get interest ,just like the Arab guy (7.5 billion )is doing with Citibank .
Right now the Feds have 300 billion or more in short term loans to lenders outstanding .Make those loans into longer term loans ,rather than just bailing out the lenders ,(after the banks have marked to market as much as they can of course to pay for their loss ).
Am I not seeing something here . The lenders will likely default (especially Countrywide )on those short term Fed loans anyway ,so why not just make them long term loans and charge a higher interest rate.The lenders should pay for the folly spread out for many years . Why just a outright taxpayers bail out for free ?
Maybe I’m missing something here .
Let them “Refinance”
There are fewer children and much fewer grandchildren!
Unless we import some more.
Pensacola, FL
Affordable housing? Finally, Florida homes for under 100K. Disclaimer: Not responsible for damage caused by coffee, or other beverages, being spilled, spat, or spewed while viewing these properties.
http://tinyurl.com/32g5sf
http://tinyurl.com/2zaxta
The theme song from the Beverly Hillbillies came to mind when I looked at these.
What’s the point of taking a picture of a couple trees??
That’s the professional landscaping.
Folks, now this is the REAL Milton and the reason why there is now way in h-e-l-l that someone would pay $300,000+ for that house that was posted up the other day. I would estimate that the real price of these two jewels is about $20,000 depending on how much land comes with the shack i.e about the cost of a very used double wide.
I heard the beaches are beautiful in Pensacola, FL.
Especially this time of year.
Is it possible the following will do any good???
http://www.detnews.com/apps/pbcs.dll/article?AID=/20071129/BIZ01/711290371
30,000 pissed-off, entitled and “victimized” homeowners get to talk face-to-face with their lenders? I hope they are planning at having LOTS of security personnel at the event!
I hope they bring lots of auditors and announce that they are going to be looking over all the loan applications for fraud. That should clear the place out.
Hope springs eternal in Missoula, Montana.
Why, some AZ developer wants to built a whole new ski are near Park City, and he is very pushy about it too. Did I say there was no snow in the Wasatch so far?
wow, we’re doing better than Utah?? We’ve actually got a foot of snow on the ground, not even Dec. yet. Woohoo!
Not a snowflake in the High Sierra yet, either…
Dug around and found this report from Nov 10:
http://www.kutv.com/news/local/story.aspx?content_id=2c450912-7c18-4022-9b44-c499f605ad33
From wikipedia:
The median income for a household in the city was $30,366, and the median income for a family was $42,103.
I’d love o hear what the median house price is in Missoula. Something tells me that its a lot more than $120K.
Median is about 220k.
I’m confused about median family here - your number and 54k are being thrown around.
With this new development south of town, I notice no one’s even talking about “affordable” or “inclusionary zoning” so they’ll probably be 300s to 400s like the subdiv. next door.
U.S. Initial Jobless Claims Climb to Nine-Month High
http://tinyurl.com/yvhkgg
Initial jobless claims increased by 23,000 to 352,000 in the week that ended Nov. 24, the most since February, the Labor Department said today in Washington. The number of people staying on benefit rolls was the highest in almost two years.
Everything is fine, please move along, there is nothing to see here. Go buy more stuff for the holidays.
Hello,
Random observations from No. VA.
1. The UPS store was dead. No one except me.
2. Asked the Fedex guy at the office - Ya. Volume is down.
3. The Nutcracker (a ballet, not an ex) Not sold out and ticket prices have dropped significantly.
4. Co-worker bought on an ARM that resets next month. $1,500 increase but they will refiance. Shes not worried but was suprised at the increase! This is not a stupid person by any means. It’s like there is a huge blind spot when it comes to this. Oh yeah, if “worse comes to worse I will rent it out.” This is from someone a few years from retirement.
5. My Mom sold her house in 7 days and got her price? Damn, good for her but a dent in my credibility.
oops - messed up the “block quote cite” thing. Trying this again:
The market is still quite robust. Sales at 1999 levels from what I understand. The market was doing great back then in terms of non-bubble markets. Relative to the bubble market of 2005, yes, it’s lower, but it’s not low. It’s far from frozen up.
It will take a lot more credit tightening for the market to actually slow to historically low price/quantity levels.
Is this true HBBers? Are sales the same as 1999, as neuromance claims?
Previously owned homes:
http://www.bloomberg.com/apps/news?pid=20601087&sid=asA1te0prPOg&refer=home
http://www.marketwatch.com/news/story/supply-homes-market-22-year-high/story.aspx?guid=6774FAFE-FDF6-4C70-B1D0-55A7709ED89E&dist=SecMostRead
New home sales (no data yet - perhaps lowest in 12 years):
http://www.bloomberg.com/apps/news?pid=20601087&sid=ajjk1cSZ2ZlY&refer=home
http://www.businessweek.com/ap/financialnews/D8T7AGPO0.htm
Just in: New home sales up, prices down - sales pace at 1996 levels:
http://www.usatoday.com/money/economy/housing/2007-11-29-new-home-sales-october_N.htm
I bought my fixer upper 1850 square foot house in 1996 for 116,000 in Lodi, Ca. I remember the market was very slow. That was truly a buyers market after 6 years of price declines. I was a residential electrician (Americans did that work back then) and remember the devastation in peoples faces when there houses in nicer areas ( Danville, San Ramon, Walnut creek) were losing 100,000’s in value. The Builders would B.K.. And then another builder would buy the unbuilt lots and build much smaller, and lower price housing in the rest of the tract. It is amazing that people forget so soon.
Tell me a little more about Mom’s house. SFR in good neighborhood? Close-in to DC? How did she price it?
Stuff still “unaffordable” by most objective measures in Alexandria, which I follo pretty closely — although I’m seeing lower asking prices on pretty much everything — stuff that would have fetched 900k in 2005 (average Old Town townhouse, nice-ish Del Ray/Rosemont house) now available in 800’s. Not dramatic - but definitely lower.
Mandatory reading for subscribers to dead tree edition of the WSJ:
“Citi of Arabia” (p. A18)
“Don’t Bail Out Fannie and Freddie” (p. A19)
Citi of Arabia
November 29, 2007; Page A18
Investors seem delighted that Abu Dhabi is injecting $7.5 billion into Citigroup, bidding up stocks in general on new confidence that the mortgage solvency crisis might ease. We hate to spoil the party, but it strikes us as unfortunate, if not a tragedy, that America’s largest bank had to go hat in hand to Arab sheiks because of bad management and blundering U.S. monetary policy.
The Citi play is being spun as a master-stroke by Robert Rubin, the chairman of the bank’s executive committee. The bank gets a capital infusion without having to cut its dividend, and gives up only a minority stake while Abu Dhabi gets no seat on the board. Even better from a political point of view, Abu Dhabi will be able to convert shares for no more than a 4.9% stake, which comes in just below the 5% level that requires approval by the Federal Reserve. Mr. Rubin even seems to have greased the skids on Capitol Hill, with New York Senator Chuck Schumer already forgetting his campaign against Dubai Ports World.
http://online.wsj.com/article/SB119630344845307407.html?mod=googlenews_wsj
If the bank did not receive the $7.5B, they would not have enough moneys to pay any dividend. With the infusion, they can pay current dividend, but the dividend is going to be cut after Christmas.
Don’t Bail Out Fannie and Freddie
By PETER J. WALLISON
November 29, 2007; Page A19
With portfolios of almost $3 trillion, capital of $65 billion, and no obvious end to the fall in home values, the continued solvency of Fannie Mae and Freddie Mac has to be in question. Last week, Freddie shocked Wall Street with a quarterly loss of over $2 billion, and in their subsequent discussion with analysts, Freddie’s management indicated more and larger losses could be expected.
…
The GSEs are nothing more than huge S&Ls, but in one respect they are more dangerous. The S&Ls were fueled in their risk-taking by federally insured deposits of up to $100,000, but Fannie and Freddie have what the capital markets consider to be government backing for all their debt.
Thus, as long as they are permitted to operate, they will do so without the tempering effect of market discipline and under the supervision of a regulator that has fewer powers than the Federal Home Loan Bank Board, the late and unlamented regulator of the S&Ls. Under these circumstances their managements will, as the S&Ls did in their day, “gamble for resurrection,” with the U.S. taxpayer ultimately on the hook if the risks don’t pan out.
http://online.wsj.com/article/SB119630488772207416.html?mod=googlenews_wsj
Prof G.S Bear,
Fannie and Freddie have a “core-assets” statement well above default value. They could be $50B in the hole, but if the “core-assets” are adequate they will continue to operate in the black. It is ’soft moneys’ vs ‘hard moneys’.
The GSEs have a bigger problem: Congress mandates to help FBs.
Hey! I can almost afford this one under the new GSE limits!
http://chicago.craigslist.org/wcl/rfs/493018150.html
Is that what “successful” looks like nowadays?
Man, that’s some primo landscaping for $1 million plus.
I’m also pleased to note that it comes with a four-car garage.
Hey, the neighborhood even comes with its very own mosquito multiplication mechanism! You better not put an offer in on that one - its MINE!
(j/k)
Ha! You can get something like that over here in the mid 400’s, and that is still too expensive.
i like how the lot size varies from .25 to .49 acres. and the 4.1 bathrooms?
Yeah, I liked the “4.1 bathrooms” too. The .1 must be a Dixie Cup in a corner of the basement.
And the place is only one-side brick. The builder deserves what he won’t get.
AND…it comes with it’s own elementary, middle and high schools!
http://www.larouchepub.com/other/2007/3446dollar_dump.html
“Starting a Run on the Bank of a Bankrupt System” - the global flight out of the dollar system and what it means for the US economy.
It is probably worth mentioning that Larouche has been predicting financial meltdown since the mid 1970s if not earlier. Even a stopped clock like this is right about once per economic cycle.
“…was warned by Chinese representatives at a reception in June, that the combination of U.S. Senate strategic provocations against China over the Taiwan Strait, and relentless pressure from bankers and Treasury Secretary Henry Paulson for a reckless floating of the Chinese currency, could lead to such a reversal for the dollar…”
Don’t see anything incorrect about that. And if we think the Chinese are getting to be a bit obnoxious, wait until the Olympics are behind them.
From today’s SF Chronicle:
Bay Area median prices rise, but overall home sales news grim
Despite the market slump and lenders tightening standards for jumbo loans (those over $417,000), the Bay Area is home to seven of the 10 California cities with the highest median prices. They are: Cupertino, Danville, Los Gatos, San Carlos, Redwood City, San Ramon and San Mateo. Five of the 10 cities with the greatest price appreciation were also in the Bay Area: Redwood City, San Ramon, Cupertino, San Carlos and Sunnyvale.
“You’ve got the technology center still doing well,” Appleton-Young said. “With all the money in Silicon Valley, there are a lot of all-cash transactions in exclusive areas where demand seems to outstrip supply. It’s kind of rarefied air.”
Even the air is different here!
My mortgage friend in that hood says the same thing. They’re oblivious to the rest of the country, or even the country a few blocks away.
About 2 months ago I looked at a place in Los Altos. 2000 sq ft, 10k lot, 1950s house with some 80s remodeling. Cupertino schools, actually not as good as Los Altos schools there but still very good. Asking 1.475m. Multiple offers, sold for 1.7m. I don’t think these were phantom offers, if so someone really followed through and plunked down the cash.
so good location houses are still selling.
otoh a house in Saratoga, but next to high-voltage lines and a freight train track (used 3x week) has been on the market for about 2 months priced at 1.448. Just lowered the price to 1.399 but that location is a tough sell.
I went to that open house in Saratoga. Right, the problem is the power lines. Another house, also open on that same Sunday, was next to Cox Ave (busy road) and had been remodeled on the outside to Craftsman and on the inside to classic Chinese. The high quality of materials and workmanship was clear, but marble pillars in the middle of the living room of a ranch house seemed kind of weird. I heard they pulled it off the market.
I’m in Walnut Creek which is a step or so behind Danville in terms of prestige. As txchcick wrote, towns like Danville are completely oblivious.
One Countrywide office closed here (Walnut Creek) a few weeks ago. Mortgage friends finally agreed that price declines were possible when they got laid off.
This stock market seems like a giant bellows.
With every expansion/intake, it sucks money from outsiders. And with every compression/outflow, it blows money to insiders.
Spot on. I liken it to a perpetual money pump. The dips who bought yesterday must be cr@pping their pants about now.
http://www.marketwatch.com/tools/marketsummary/
Nah. They’re back gunning the beta stocks again like nothing ever happened. Expect this to continue through Dec. 11 unless a big bad headline comes out.
Like this
“..Oil surged more than $4 a barrel, the most in a month, after an explosion cut Canadian oil shipments through Enbridge Inc. pipelines that typically provide about 15 percent of U.S. crude imports….”
Bloomberg
29 Nov
Naah, that line was shutdown for maint anyway. I think oil will trade back down to 80.
Oil is inversely related to the dollar, if the dollar gets weaker oil will go up.
Negative corr. -0.80
Pulled the trigger on my djw calls. Still not willing to short the index yet. Tomorrow on spls (jan 25) and bby (jan 55) for a short pop down.
I have that sinking feeling again today (same as Tuesday). Bill Gross must be patting himself on the back about now…
http://www.marketwatch.com/tools/quotes/intchart.asp?submitted=true&intflavor=advanced&symb=TYX&origurl=%2Ftools%2Fquotes%2Fintchart.asp&time=3&freq=7&startdate=&enddate=&hiddenTrue=&comp=tnx&compidx=aaaaa%7E0&compind=aaaaa%7E0&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=1&optstyle=1013
WHACK! There goes another 10+ bps across the T-bond yield spectrum…
Notes/Bonds
2-Year 3.125 100-06¾ / 3.02 0-07¾ / -.128
3-Year 4.500 103-16+ / 3.00 0-09½ / -.125
5-Year 3.875 102-07¼ / 3.38 0-16¾ / -.116
10-Year 4.250 102-24½ / 3.91 1-00+ / -.123
30-Year 5.000 111-10+ / 4.32 1-30+ / -.110
Market volatility is accelerating and becoming more difficult to contain in the process.
New homes sales up 1.7 percent for October.
After downward revised Sept number though, right? That’s f’d. I’m sorry, as much as everyone is saying that the market is “headline driven” I don’t know how anyone can take these numbers seriously. My head is spinning from spin.
I have to share this:
Friend of my wife is trying to sell her home in the Seacliff region of Huntington Beach, Ca for a move to San Diego. Her wishing price is 1.1 to 1.2 million (she bought at 500-600K). Well low and behold, her neighbor just sold her house for 100k below her price. She’s bitching about how that’s destroyed the comps!!! Now she has to keep the house and rent in San Diego until the “market improves”. Hahaha…I love scheudenfraude!
Mission acCOMPlished
U.S. Foreclosure Activity Increases 2 Percent In October
Charts:
http://www.recharts.com/foreclosures.htm
Numbers:
http://www.realtytrac.com/ContentManagement/pressrelease.aspx?ChannelID=9&ItemID=3664&accnt=64847
U.S. New-Home Sales Lower Than Forecast in October
http://www.bloomberg.com/apps/news?pid=20601103&sid=a8jNuw9Dnk6Y&refer=news
I like how they compare the unrevised bull crap number from October to the revised, and much lower, number from Sept. Making it look like there is a slight increase in new home sales.
Totally agree, I just posted the same thing above. I’d love to be able to revise my numbers as well, I wonder where else I can apply this backward thinking in my day to day routine?
How about this one (from the world of sports):
I shot a 34 on the back nine, but after further review and adjusting for the affects of wind, lack of heat, ambient noise, and the loss of yardage caused by dew on the grass, that 35 I shot on the front nine this morning has been revised downward to a 28. So my 18-hole total is 62 (which is a new course record!)
http://www.msnbc.msn.com/id/22023814/
Sears third quarter net income dropped 99% compared to a year ago.
They blame this on increasec ompetition, a weakened housing market, credit concerns, and Global Warming.
Sears, where America apparently doesn’t shop.
I was working at one of their warehouses. (mar to june, not there anymore) Saw this coming but didn’t have enough play money.
What was the 1% that kept it from becoming 100% drop in third quarter net income? I can’t imagine that $500 vaccum cleaners had ANYTHING to do with that.
I haven’t walked into a Sears in I don’t know how long. I wouldn’t even know where to find one.
Ah, but profits are going up! Just look at the S&P 500 P/E in the WSJ!
Did anyone hear Dave Ramsey last night?
I like him overall and I think he offers sound advice to idiots deep in debt, but his head is so deep in the sand about housing it is laughable. Near the end of the show he responded to an email question about the mortgage crisis. In a nutshell his response was: “media hype, does not exist, RE market is fine except maybe for a few small areas, as evident by our callers”. I guess he doesn’t hear the same callers I do. It seems to me at least half of his callers nowadays have a house they cant seem to sell.
dave ramsey tells people the only mortgage he likes is a 15 year with 20% down that is no more than 25% of your take home pay. what price home is that for the average income ?
Talking his book as they all do.
IN my case according to Mr.Ramsey I can afford $130,000 home wich is $230,000 below median in palm beach county
and your income is probably well above the median income.
and there in lies the problem. i have a coworker that brags about his house being worth 1 million dollars.
then i ask “would you pay 1 million dollars for your home, today?”.
then i get this blank stare.
19 Blenheim Ct. PGA national sold 173,000 in 1988 sold 166,000 in 2000 sold 250,000 in 2003 currently for sale 239,000 fannie mae
My actual income in 5 years, (if my niche job is outsourced abroad) will be $80,000. So I could afford a $200,000 house at that point. But then I don’t want to move to flyover country. Renting is still far cheaper.
–
New Homes For sale, COMPLETED, at All-Time High
At 191K we have a new all-time high. In previous cycles the high was 125K and average is 65K
No, builders are NOT working off inventory as cancellations are overwhelming any cut downs in construction of homes.
Jas
market conditions haiku…
M-LEC or Heimlich
The world has gone mad today
And anything goes
Subprime fiasco
A churning global tempest
“Hey man, it’s contained.”
Oh no, CDOs!
The ugly little monsters
Used to be so cool.
No, seriously. It is contained!
We’re gonna need a bigger boat…
Apropos to earlier comment about ETrade deal. I think there are some real parallels between this and some of the telecom “financings” that happened in 2000 and beyond.
http://www.minyanville.com/articles/C-fre-fnm-ETFC/index/a/15041
“Runaway corruption in China, says a compelling new report, poses a lethal threat to the nation’s economic development and “undermines the legitimacy of the ruling Chinese Communist Party.”
“Evidence from official audits, press articles and law enforcement data, the report says, indicates that “corruption in China is both pervasive and costly.” Bribery, kickbacks, theft and fraud, particularly by party and government officials, are said to be rampant.”
http://english.pravda.ru/business/finance/29-11-2007/101918-corruption_china-0
“Bribery, kickbacks, theft and fraud, particularly by party and government officials, are said to be rampant.”
Is this a new development? Or business as usual?
–
In America we have legally sanctioned fraud because “Gangs of New York” (title of a movie about NYC during 1860) control the Fed and the politicians. In China and India we have more of outright corruption. I don’t know which of the two types of corruption is worse. The world economy is in deep trouble regardless. When the current boom ends, any time now, watch out the bust.
Jas
The corruption in India is blatant and in your face. The corruption in China… well I don’t see any. I’m sure it is happening in a small section of society but by and large people are fearful (really, really fearful) of consequences.
Japan’s empire in the late 1930’s came to the point where they felt they needed to attack us @ Pearl Harbor, because of oil embargoes against them…
Will oil be embargoed against us in a similar fashion?
Foreclosures up in Wisconsin - Article in Today’s Paper
Foreclosures increase in state
http://www.madison.com/tct/business/259418
Its because most of Wisconsin will not be able to watch tonights football game!
70% of the state has no access to watch the game.
It took most of the morning to short more financials. Another sucker rally dies. Wicked rally, that caused a lot of short covering. If previous Fed rate cuts haven’t helped the markets, why should a December rate cut help?
In particular, why should a pre-announced December rate cut help?
From your lips to God’s ear.
I started put buying yesterday, knew it was early but I can’t bear the thought of having none of the other shoe drops before the Fed meeting.
I have decided to just stay in my short ETFs. Although yesterday was hard, I am still up over 30% in Skf and I picked up the emerging market and Chinese short ETF’s yesterday. I am afraid if I get to smart and try to take profits and reinvest (I will outsmart myself) and will miss the other shoe dropping.
Fraud from the getgo- As an appraiser I have seen a lot of fraud but for the first time I am in at the beginning. I have been asked to appraise a number of condos and I know them well as they I drive past them in my PUD everyday. In fact I lived in one as an apartment.
They converted about 2 years ago and sales have been dead slow. Suddenyl I got these appraisals in and there are 2 people buying a bunch of them. How about that.
After my shock wore off I began to review the contracts and noticed that the sales price was at least $50 per square higher than anything I had seen in my area. The contract stipulates that 2 commissions are to be paid. 1 of $12,000 and 1 of $37,000 to brokers in far flung places. Whoa-now that is the business I want to being.
As part of the research effort I pulled the sales in the project and found that suddenly this year units started selling for over $50,000 more than last. Huh?….it seems that apartment dwellers living 200 miles from here are buying investment condos like crazy.
Next step was to pull the developers site. He has none. That is weird. Craigs list has a place for me to go tho. I pull it up and it is under a brokers name whose address is the same as the sales office in my project.
Clearly the first line is this- 21% of sale to be given back to the buyer to use as you see fit. Back to the contract I go. 21% of the purchase price adds up to the exact amount of the 2 commissions. Wow!
I begain to look thru the mortgages already closed on the units sold this year and everyone is 100% financing for the full $240,000. Do you think the lenders knew about this commission part? It is in the contract surely they read it. BS….my guess is there are 2 sets of contracts. Here is the rub. The appraiser was given thsi contract and should have deducted the usurious part of the commission to adjust for favorable financing which would kill the deal altogether and bring the units to market. Isn’t that marked to market? Same thing as Wall Street right? Sh*t…well folks I am going to do my job and appraise them as I was sked to do. Then I am going to contact every lender who has made a loan in this place and alert them to their exposure.
I thought about the authorities and I am investigaing the channels to got thru to actually get someone’s real attention. Those condo sles figures you see out there. Most are bogus. Believe me this is just one of many. I will keep you posted.
Good work
On BloombergTV, CFO from Jefferson cnty Fla can’t get money from the closed investment pool for teacher payrolls due tomorrow. He’s obviously scared. It feels like things are spinning out of control doesn’t it?
Buy the dips and sell the rips (hint, we’re ripping)
http://www.thestreet.com/s/kass-this-dead-cat-wont-keep-bouncing/newsanalysis/investing/10392141.html?puc=_tsccom
It seems to be a good exit point for us long time horizoners as well…time will tell. Thanks for the bounce boys…I don’t think that the cat is only “mostly dead” any more.
Got greenbacks?
Dark cloud inside the silver lining: In 1990, Japan got lower rates and a stronger currency, but also got a 15 year recession in the deal.
Dollar Gains on Euro, Pound
Amid Bets Against Recession
REUTERS NEWS SERVICE
November 30, 2007
The dollar rose against the euro, pound and Swiss franc in midday trading in New York as investors bet that the perceived likelihood of more rate cuts will help avoid a U.S. recession.
http://online.wsj.com/article/SB119637895859508667.html?mod=googlenews_wsj
Dreaded `R’ Word?
Hummmm… Republican-election-defeat?
Dreaded `R’ Word Starts Tripping Off the Tongue: Caroline Baum
By Caroline Baum
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_baum&sid=afkPLnWT6×64
ECONOMIC REPORT
Number of Americans on unemployment nears two-year high
Initial jobless claims also shoot up to highest since early February
By Robert Schroeder, MarketWatch
Last update: 11:05 a.m. EST Nov. 29, 2007
WASHINGTON (MarketWatch) — In a possible sign of a weakening labor market, the number of Americans receiving state jobless benefits rose to a nearly two-year high in the latest week, the government reported Thursday.
Continuing jobless claims - the total number of individuals collecting unemployment benefits — rose by 112,000 in the week ending Nov. 17, to 2.66 million, the highest mark since Dec. 24, 2005, the Labor Department said.
Initial jobless claims - individuals applying for unemployment benefits for the first time — also shot up in the latest week, the data show. Those claims rose by 23,000 to 352,000 during the week ending Nov. 24, their highest level since Feb. 10.
“This is the first time initial claims have broken 350,000 since February and thus perhaps an early sign of a more severe deterioration in the labor market,” said Andrew Gledhill of Moody’s Economy.com.
“At the moment, these two indicators are consistent with weakening labor market conditions,” said Joshua Shapiro of MFR, Inc.
http://www.marketwatch.com/news/story/number-americans-unemployment-close-two-year/story.aspx?guid=%7BC47FB070%2DD0AF%2D486A%2DA203%2D48B63ECD52F4%7D
Fiat currency inscription: “In
GodRate Cuts We Trust”Bernanke hints at another rate cut
The Fed chairman says worsening economic problems probably will create ‘head winds for the consumer.’
From the Associated Press
November 30, 2007
http://www.latimes.com/business/la-fi-bernanke30nov30,1,6987112.story?coll=la-headlines-business