December 17, 2007

Depending More On Luck Than Judgment

Some housing bubble news from Wall Street and Washington. Bloomberg, “IKB Deutsche Industriebank AG, the German lender bailed out by KfW Group, fell to its lowest in more than a decade on concern about further losses from U.S. subprime mortgage investments. The rescue of IKB may cost the German development bank KfW more than 5 billion euros ($7.2 billion) if market conditions worsen, KfW CEO Ingrid Matthaeus-Maier said in an interview with Sueddeutsche Zeitung newspaper today.”

“The bank has also written down the value of its 38 percent stake by 400 million euros, she told the newspaper.”

The Associated Press. “Securities in Australian property trusts Centro Properties Group and associate Centro Retail Trust crashed Monday after they cut their earnings forecasts because of increased debt financing costs linked to the U.S. subprime mortgage crisis.”

“The losses stripped a total of A$4.78 billion (US$4.12 billion; €2.84 billion) off the market capitalization of the two.”

“‘We never expected, nor could we reasonably anticipate, that the sources of funding that had been historically available to us and many similar companies would shut for business,’ CEO Andrew Scott told reporters in a conference call.”

“‘Centro has been lax with tying down its debt and is now paying the price,’ said Jonathan Kriska, property analyst at Patersons Securities in Sydney.”

From The Age. “Five weeks after telling shareholders the US subprime housing crisis has not had any impact on the operation of Centro’s US portfolio, Centro Property Group is in turmoil.”

“Yesterday, the group announced it had obtained an interim extension until February 15, allowing the group time to negotiate the refinancing of $A1.3 billion in maturing debt, which arose from the group’s exposure to the US subprime mortgage market.”

The Sydney Morning Herald. “Staring down the barrel of at least $2 billion in expensive short-term debt, Centro is facing its version of the St Valentine’s Day massacre. Its financiers have given the tottering property group just eight weeks to put in place new financing to replace borrowings the company sourced from the now-crippled United States commercial credit markets.”

“Centro took a gamble in August that ensuing chaos would recede, when it managed to get away a $US300 million 10-year term issue at ‘reasonable rates’ through a tightening CMBS market, which had been providing about $US80 billion in funding every month.”

“Despite all the overwhelming evidence to the contrary, Centro believed a few days ago that it could find a way to replace its crippling debt, including $2 billion due at the end of the month.”

“‘Up until late last week, we were of the view that our short-term debt obligations could be refinanced on a long-term basis,’ chairman, Brian Healey said.”

“But, in saying that, it appears the Centro board and its executive team were depending more on luck than judgment.”

From Reuters. “National City Corp, the ninth-largest U.S. bank, said on Monday it expects its provision for loan losses for the fourth quarter to be about $700 million. The bank said that home equity loans and non-prime mortgages transferred to its portfolio in the third quarter have shown further deterioration beyond what the company anticipated at the time its September 30 loan loss allowance was established.”

“‘The areas of elevated risk continue to be in the run-off portfolios of First Franklin non-prime mortgages,’ the bank said in its filing.”

“National City sold its First Franklin Financial Corp subprime unit to Merrill Lynch last December, for $1.3 billion, but kept several billion dollars of loans and is winding them down.”

From CNN Money. “National City said it will take $200 million in charges related to mortgages on its warehouse lines that it either sold to investors or transferred to a portfolio in October and November.”

“Total charge-offs, or loans written off as not being repaid, increased to $102 million in November, from $87 million in October. Charge-offs on residential mortgages and home equity products accounted for a combined $51 million during the month, a 13 percent increase from the $45 million in October and more than double the $21 million written off during November 2006.”

“U.S. investment bank Lehman Brothers is facing possible legal action by local councils in Australia who bought collateralised debt obligations (CDOs) from its local unit, Grange Securities, the Financial Times newspaper said Monday.”

“The FT said one Lehman-originated CDO exposed to the U.S. subprime mortgage market was marked down to just 16 cents in the dollar by the bank last month.”

“Mizuho Financial, one of the largest Japanese banks, last week stopped helping create U.S. collateralized debt obligations containing asset-backed securities or high-yield corporate loans. It also stopped trading such securities. Five people were fired.”

“‘Due to changes in the global market for structured-credit products, Mizuho Securities has decided to suspend U.S. asset-backed CDO and CLO activities,’ said Seth Martin, a Mizuho spokesman.”

“Mizuho said Dec. 5 that it would invest ¥150 billion, or $1.4 billion, in its investment banking unit to shore up its balance sheet amid losses tied to rising U.S. mortgage defaults. The unit may post a loss of ¥92 billion for its fiscal year because of subprime-related investments, the bank said.”

“At Mizuho, the group underwrote $4.4 billion worth of CDO deals before the markets seized, according to an industry newsletter. Mizuho, the 18th-largest underwriter of mortgage-bond CDOs during 2006 and 2007, may have retained about half of the debt, which may produce $700 million in losses, according to JPMorgan Chase CDO analysts.”

“Japan’s top three banks are expected to resist a request to put up a total of $15 billion for a U.S.-led subprime rescue fund, a move that could further cloud prospects for the bailout plan.”

“Executives at Japan’s top three megabanks have meanwhile been wondering why they were asked to shoulder such a comparatively large part of the fund, whose size has recently been estimated by media at $30-60 billion.”

“‘It could prove quite difficult for us to put up funds for this,’ said an executive at one of the megabanks, adding that he did not think the fund would be able to sell the commercial paper that would in theory be supported by Japanese credit lines. ‘Logically, it just doesn’t make sense for us.’”

“Nomura Securities bank analyst Keisuke Moriyama said he expected Japan’s top three banks to offer to pay less than the requested amount or even refuse to help altogether.”

“The issue could yet become political, the megabank executive said. ‘What did America do when we had our non-performing loan problem? They just pushed us into the corner. European banks also ran away. Why should Japan now shoulder this burden?’ said the megabank executive. ‘But this is a decision made at a high political level and could end up defying logic.’”

From AFP. “It is time for the banks to fully disclose their US home-loan losses to prevent fear from making a tough credit crunch worse since the central banks have done about all they can to restore confidence, analysts say.”

“Central banks ‘can’t do any more’ to boost confidence in the financial markets, Commerzbank economist Michael Schubert warned, while Bank of America’s Gilles Moec urged the private sector to state clearly ‘who lost what and how much.’”

“Clear statements by finance houses about how much damage the US home-loan crisis has done to their accounts ‘is really the key to the crisis,’ economist Moec stressed.”

“A solution depends on confidence because banks have stopped lending to each other since they do not know the extent of potential losses incurred by the banks they trade with.”

“‘If you are a medium-sized bank trying to borrow for three months in the interbank market you can more or less forget it,’ said Investec Securities chief economist Philip Shaw, who is based in London. ‘I’ve heard of institutions that won’t lend beyond one week, to anybody, it doesn’t matter who the name is.’”

“‘When in doubt, people tend to abstain,’ Moec said. ‘The problem for everyone is they don’t know if their counterpart belongs to the winners or the losers.’”

“Only transparent disclosures could convince market players a potential partner was solvent, the economist explained. ‘It’s beyond the reach of the central bank,’ he said.”

“The Federal Reserve’s plan to provide $20 billion in cash to the world’s money markets failed to reduce the cost of borrowing in euros.”

“The rate banks charge each other for three-month loans in euros stayed close to a seven-year high, rising 1 basis point to 4.95 percent, the European Banking Federation said today. That’s 95 basis points more than the European Central Bank’s interest rate. It was 4.58 percent a month ago.”

“The Fed will today make funds available to banks and financial institutions in an effort to increase the amount of cash available to the banking system.”

“‘It’s going to take a long time for these problems to go away,’ said Nick Stamenkovic, a fixed-income strategist at RIA Capital Markets Ltd. in Edinburgh. ‘These auctions might help stem the pressure until year-end, but the bottom line is until we get a clearer picture of how deep the problems are, the banks are going to hoard cash.’”

“Representatives of five of Wall Street’s dominant investment banks gathered around a blonde wood conference table on a February night almost three years ago. Their talks led to the perfect formula for a U.S. housing collapse.”

“The host was Greg Lippmann, then 36, a fast-talking Deutsche Bank AG trader who aspired to make mortgage securities as big a cash cow for Wall Street as the $12 trillion corporate credit market.”

“Those meetings of the ‘group of five,’ as the traders called themselves, became a turning point in the history of Wall Street and the global economy.”

“The new standardized contracts they created would allow firms to protect themselves from the risks of subprime mortgages, enable speculators to bet against the U.S. housing market, and help meet demand from institutional investors for the high yields of loans to homeowners with poor credit.”

“This is the story of how Wall Street transmitted the practices of southern California’s go-go lending industry and the inflated U.S. real estate market to the global financial system.”

“In Orange County, California, a mortgage lender named Daniel Sadek was among those who took notice of the increase in Wall Street’s appetite for subprime loans. He turned the staff at his firm, Quick Loan Funding, into a subprime mortgage factory. ‘You can’t wait,’ said his ads, aimed at high-risk borrowers. ‘We won’t let you.’”

National Mortgage News. “Alan Greenspan, the former Federal Reserve chairman, has found the roots of the current ‘liquidity’ crisis (which is really the subprime crisis but with a different name).”

“In an recent op-ed piece Mr. Greenspan – once a big fan of ARMs – wrote: ‘The root of the current crisis, as I see it, lies back in the aftermath of the Cold War, when the economic ruin of the Soviet Bloc was exposed with the fall of the Berlin Wall.’ Huh?”

The Philadelphia Inquirer. “On a recent weekday, stress-management guru Loretta LaRoche delivered her message in Hall A of the Atlantic City Convention Center to a standing-room-only audience of men and women who, of late, seem to be some of the most stressed-out Americans of all. Realtors.”

“LaRoche strutted across the stage for 45 minutes wearing feathered boas and silly hats. She cajoled her audience into grinning, laughing, shouting ‘Whoop! Whoop!’ as loudly as possible, then joining hands as she led in a sing-along of ‘That’s Amore,’ with Dean Martin crooning in the background.”

“The Internet is defining seller attitudes, said Roger Turcotte, a New Hampshire real estate broker and educator.”

“‘You meet with a seller and he wants to list at $390,000, even though your market analysis says to start at $345,000? That’s the Internet talking,’ Turcotte said. ‘Before they call you, [sellers] spend hours looking at Web sites, collecting information from sources that aren’t necessarily reliable. You show them the data, and they counter that they are not desperate and they are not going to lower the price.’”

“What should a listing agent do? ‘Walk away,’ Turcotte said. ‘You don’t need the listing that badly, and you know what’s going to happen. Someone else who tells the seller what he or she wants to hear will get the listing, and then the property will stay on the market until the price drops to what the market will bear.’”

“Turcotte blamed a lot of the current market downturn on an overwhelming emphasis on home purchase as an investment, even though the industry’s own rhetoric over the last several years also has focused on it.”

“In fact, the NAR’s 2007 Profile of Buyers and Sellers says the ‘motivation for home ownership often includes an investment component,’ which most of those surveyed believed to offer a better return than stocks.”

“‘We are trapped in a media mess,’ Turcotte said. ‘Eighty to 90 percent of buyers are looking for a lifestyle asset, not a financial one.’”




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117 Comments »

Comment by Sobay
2007-12-17 10:32:10

‘What did America do when we had our non-performing loan problem? They just pushed us into the corner. European banks also ran away. Why should Japan now shoulder this burden?’ said the megabank executive.

Mr Executive, you need to shoulder the burden so that we can continue to buy your Datsuns (Nissans?).

Comment by mojo
2007-12-17 11:36:20

Honda

Comment by Rintoul
2007-12-17 12:49:19

Toyota?

 
 
Comment by joe momma
2007-12-17 14:34:58

And I do remember us lecturing them repeatedly on the mistakes they made by not fully realizing those losses. Japan would have to be insane to bail us out now.

 
 
Comment by Home_a_Loan
2007-12-17 10:35:57

Here’s an idea for a government-sponsored bailout: everybody gets a 100 point increase in their FICO score! Instead of a check for everyone for $300, we’ll just send out a credit report to all American taxpayers showing their new FICO adjusted up 100 points.

Comment by Professor Bear
2007-12-17 11:19:37

I think the big credit rating agencies tried a similar approach with respect to their bond rating system (everything is AAA or something of that nature). It did not work out all that well.

Comment by aladinsane
2007-12-17 11:31:39

Sweet…

My new FICO score will be 916.

Comment by Flatlander
2007-12-17 11:54:35

and my dog’s is 825 :)

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Comment by passthebubbly
2007-12-17 12:26:56

Casey Serin’s will be 7.

 
Comment by CAsellerCOrenter
2007-12-17 12:38:27

mine will be 100
never had a credit card, never will
I bought a truck 4 years ago, they said
they could not accept my GOOD check
because I had no credit
I asked for the check back, they gave me
the keys instead

 
Comment by az_lender
2007-12-17 12:53:07

CAsellerCOrenter’s anecdote is a little like mine. I never have any “credit references” to provide, except for my Merrill Lynch account number. Typically, I get a letter saying I’ve been disapproved for whatever it was someone was trying to sell me. Then a few days or weeks later I get approved by magic.

 
Comment by Rintoul
2007-12-17 12:55:39

If you don’t mind me sayin’… well, hell, I don’t care if you mind…it’s only the Intarweb. Not having a credit card doesn’t show you’re fiscally savvy…kinda puts you in the black helicopter crowd to me…

 
Comment by az_lender
2007-12-17 13:17:56

Rintoul, I have to have a card so I can rent a car. It’s the ML card that debits my brokerage acct. Why have 2.

 
Comment by Arwen_U
2007-12-17 13:17:56

I used to work as a librarian for the DoD and did LexisNexis searches when they had the brilliant idea to allow everyone’s social security numbers and former addresses on their database. This was in 1997 or 1998. I looked up my friends for fun but didn’t record their SS numbers of course. (Too bad ;-) )

Anyway, I knew that close relatives of mine had never applied for credit in any form and it was notable that they were the only people who weren’t in the database.

LexisNexis did away with that feature shortly afterward. It wasn’t a very good idea, you see.

 
Comment by CAsellerCOrenter
2007-12-17 15:39:11

If you don’t mind me sayin’… well, hell, I don’t care if you mind…it’s only the Intarweb. Not having a credit card doesn’t show you’re fiscally savvy…kinda puts you in the black helicopter crowd to me…
Rintoul ,
My debit card will rent cars, reserve plane tickets, buy a car.
I don’t have a credit card cause i dont needs one.
It has nothing to do with the black helicopters I used to ride in.
True Story
When I was in the marine corps we used to leave XXXX base in full russian military gear in - you guessed it black helicopters. And then fly to far away places, meet new
people and keell them.
I’m not afraid of the black helicopters, there my friends.

 
Comment by Chip
2007-12-17 16:46:30

Great anecdotes. When I was in a rental car office last year, a customer wanted to use a debit card and as I recall there was a lot of discussion about putting a hold (or whatever the term — fencing off) on a significant amount of her money. didn’t seem like they did the same with my credit card.

Never really thought about it, but I gather from the above debit cards have no or negligible influence on your credit score?

 
 
 
 
Comment by Flatlander
2007-12-17 12:09:58

I floated this idea out several months ago like a big “do-over” for an FB. Seriously though, this idea is just whack. Again, just like any other FB bailout proposal, it is rewarding the wrong behavior and only delaying the inevitable. Lipstick on a bunch of pigs.

If an individual bank wants to lower its standards by 100 FICO points, fine with me, but all shouldn’t be required to accept this crap. And if the banks that lower their standards also charge a higher rate for the increased risk, that is what the banking system should be about - risk vs. reward.

Comment by aladinsane
2007-12-17 12:33:15

When I was alad…

Pinball machines would give you a replay by scoring around 1,000 points, 3 plays for a Quarter.

Now it takes like 40,000,000 to get a replay, and 1 game costs 50 Cents.

Pinflation, in action.

Comment by JP
2007-12-17 12:58:16

Pinball machines would give you a replay by scoring around 1,000 points, 3 plays for a Quarter.

Old person alert…

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Comment by aladinsane
2007-12-17 13:00:53

OPM (old person’s memory)

 
Comment by Paul in Jax
2007-12-17 19:58:42

I’ll go you one better (just for old times’ sake): I remember when games were a nickel (we thought of it as a penny a ball) and winning scores were in the 600-700 range - when you got the bumpers lit they were worth 10 rather than 1 and if you got a couple hundred on a ball it was a great ball. Everything was much more mechanical, though, and a skilled player could “catch” the ball on his flipper as well as figure out methods of jostling the machine without tilting it (sometimes we jacked it up on matchbook covers to make the ball roll more slowly). The secret was making the opening shot such that you didn’t go down the center gutter and got the ball onto a flipper, and then you were basically in control. If you were good you could sell off games, and then of course we also had the payoff machines too with the holes and no flippers where the opening shot and shaking the machine were the whole game. And I ain’t all that old!

 
 
 
 
 
Comment by combotechie
2007-12-17 10:36:43

The title of this thread should be: “We Are Screwed”.

Comment by Rally Mitigation Team Member Bob
2007-12-17 11:59:03

If that were the case, it would be the title of every housing bubble news thread. ;-)

Comment by combotechie
2007-12-17 12:27:30

You are correct.
So the title of this thread should be: “We Are Really Screwed”

Comment by Chip
2007-12-17 16:49:02

LOL.

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Comment by Jas Jain
2007-12-17 10:38:03


“A solution depends on confidence because banks have stopped lending to each other since they do not know the extent of potential losses incurred by the banks they trade with.”

Isn’t it nice that the Federal Reserve still trusts the banks! Now we know who created the Federal Reserve and why.

Jas

Comment by Professor Bear
2007-12-17 11:21:17

Too bad that dumping more liquidity onto the money markets will not restore anyone else’s trust (including other banks!).

Comment by Hoz
2007-12-17 11:50:52

This is an interesting week from the Federal Reserve.

Since March, total Federal Reserve additions are $18 B.

This week, $39 B is expiring ($5B tues, $34B on Thurs). The Fed through the TAF is adding $20B today and $ 20 B on the 20th. If the Federal Reserve is going to add any additional liquidity, it will have to roll over the expiring. Cool headlines this week “Fed adds $39B in new liquidity as well as $40B in TAF”. I do not believe this can help the doomed mortgage and corporate finance markets.

A side note, I know not the answer. Since the TAF will allow illiquid, CDO’s to to be accepted at 85% of par as collateral, can banks use this value as Level 3 accounting to keep Tier one levels over 7.5%?

Until I see the new Federal Reserve figures, treat the TAF as “rollover”.
Federal Reserve Temporary open market activities
http://tinyurl.com/yn6u53

Comment by vozworth
2007-12-17 15:06:24

im treating it as capitulation.

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Comment by Groundhogday
2007-12-17 12:15:48

The fact that banks won’t lend to one another says it all.

Comment by Professor Bear
2007-12-17 13:33:23

For some reason, this image keeps popping in to my mind of a bunch of gunslingers playing poker in an old western saloon, each with his pistol out on the table within ARM’s reach…

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Comment by AKron
2007-12-18 01:14:39

I think I see the devious (and insane) strategy the central banks are contemplating. To quote (and I apologize for using this quote on another thread):

“One of Britain’s leading economists, Peter Spencer, issued a warning on Saturday:”

“The Government must suspend a set of key banking regulations at the heart of the current financial crisis or risk seeing the economy spiral towards a future that could make 1929 look like a walk in the park.”

“Spencer is right. The banks don’t have the money to loan to businesses or consumers because they’re trying to raise more cash to meet their capital requirements on assets that continue to be downgraded. (The Fed may pay $.85 on the dollar, but investors are unwilling to pay anything at all.)Spencer correctly assumes that the reason the banks have stopped lending is not because they “distrust” other banks, but because they are capital-strapped from all their “off balance” sheets shenanigans. If the Basel regulations aren’t modified, money markets will remain frozen, GDP will shrink, and there’ll be a wave of bank closings.”

“Spencer said: The Bank is staring into the abyss. The Financial Services Authority must go round and check that all banks are solvent, and then it should cut the Basel capital requirement level from 8pc to about 6pc. (”Call to Relax Basel Banking Rules, UK Telegraph)”

In other words, decrease reserve requirements so that banks can inflate the currency in the absence of the other magical source of liquidity, er, debt: CDOs.

 
 
 
Comment by txchick57
Comment by combotechie
2007-12-17 10:48:51

The title of this article should also be: “We Are Screwed”.

Comment by JP
2007-12-17 11:04:56

I sense a reoccurring theme with your posts. lol.

 
 
Comment by matt
2007-12-17 11:03:13

The market is going nowhere as long as the financial ied’s keep popping off. There has to be a mother of all ied’s out there waiting to detonate.

Comment by Professor Bear
2007-12-17 11:46:37

Just buy the dip and don’t worry about ieds.

 
Comment by Rintoul
2007-12-17 12:58:08

Maybe there’s a currency that can be devalued or a bond to default on to kinda take the sting out…

 
 
Comment by Tom
2007-12-17 11:26:54

These comments from that article I find quite funny.

Frankly, it is almost comical to watch “free market capitalists” complain that the Fed did not do enough last Tuesday. From my perch, the Fed is acting responsibly; the critics of monetary policy, on the other hand, are acting irresponsibly by asking for higher and higher concentrations of interest rate opiates.

As I mentioned in my synopsis of my Thursday night appearance on “Kudlow & Company,” many talking heads in the media and several economists still have visions of Goldilocks despite what appears to be ample growth and inflationary evidence pointing to the conclusion that we lie at recession’s door.

The current credit crunch is unlike anything we have seen in modern financial history. The availability of credit will be markedly reduced in the years ahead.

Fourth-quarter credit writedowns at the world’s major financial institutions remain elevated, and the prospects look no better into early 2008. This permanent loss of shareholders’ equity will have negative lending repercussions, and the infusion of high-cost equity at these institutions will do little to encourage the banks to lend more.

According to Merrill Lynch, the slope of the yield curve and the value of credit spreads point to a 100% chance of a recession.

Last week’s trade report indicates that the rate of increase in imports is declining and now stands at the lowest level in over five years.

Last week’s trade report indicates that the rate of increase in imports is declining and now stands at the lowest level in over five years.

Leading indicators — such as durable goods and shipping rates (Baltic Dry Index) — point to a domestic economy that might be moving in a southerly route posthaste.

Inventory growth is at a standstill, which is an early warning signal that a drop in business fixed investment is the next shoe to drop.

Adjusting last week’s retail sales figure for the calendar year and food and gasoline inflation produces a lukewarm picture of retail, despite the permabulls’ cheerleading. Same-store comparisons have now been relatively weak for six months, especially at the malls. Target (TGT - Cramer’s Take - Stockpickr - Rating)), Sears Holdings (SHLD - Cramer’s Take - Stockpickr - Rating) and others have recently exhibited disappointing guidance. Just look at a chart of the Retail HOLDRs (RTH - Cramer’s Take - Stockpickr - Rating) if you need a harbinger of continued poor retail news. Last night, SpendingPulse provided a decidedly weak outlook for apparel sales during this holiday period.

Job growth is punk vs. one year, two years or three years ago.

A Democratic presidential victory, indicated almost universally by the current polls, means higher corporate and individual tax rates, which will provide an unneeded break on business capital expenditures and personal consumption.

Even the greatest works of fiction — that is, the Bureau of Labor Statistics’ chronicling of headline CPI and PPI rates — are signaling inflation levels not witnessed in several years.

Inflation implied in the five-year TIPS market has moved up to close to 2.30%, a gain of 0.15% in only a week.

Some Fed governors and former Fed Chairman Greenspan are beginning to look at food and energy price inflation as recurring. (I am still looking for a “core” consumer.)

Crude’s stubborn rise has resumed as the price of a barrel increased to over $92 last week.

The CRB Index rose to within 3% of its all-time high on Friday, as the growth in emerging economies continues to place pressure on commodity prices despite a weakening domestic non-export economy.

Comment by Professor Bear
2007-12-17 11:58:39

100% chance of a recession = we are in one

 
Comment by Rally Mitigation Team Member Bob
2007-12-17 12:05:13

“A Democratic presidential victory, indicated almost universally by the current polls, means higher corporate and individual tax rates.”

As opposed to a Republican victory, which would still result in huge earmarked spending bills without the concomitant tax revenue, not too mention in further intrusion of religion into politics and even greater loss of personal freedoms.

Both parties suck.

 
Comment by Ed Bear
2007-12-17 13:17:18

“A Democratic presidential victory, indicated almost universally by the current polls, means higher corporate and individual tax rates, which will provide an unneeded break on business capital expenditures and personal consumption.”

You mean kleptocracy and financial craziness? Who would have thought you couldn’t keep an economy going forever on delusions?

 
 
 
Comment by aladinsane
2007-12-17 10:40:00

“But, in saying that, it appears the Centro board and its executive team were depending more on luck than judgment.”

From my travels around the globe, Asians win the title of most compulsive gamblers as a people, with Aussies coming in 2nd.

Comment by Aqius
2007-12-17 13:19:08

” . . . Centro believed a few days ago that it could find a way to replace its crippling debt, including $2 billion due at the end of the month.
Up until late last week, we were of the view that our short-term debt obligations could be refinanced on a long-term basis,’ chairman, Brian Healey said . . . but, in saying that, it appears the Centro board and its executive team were depending more on luck than judgment.”

And the average, non-financially sophisiticated, NON-MBA holding mortgage holding borrower gets mocked & crucified by everyone for playing the same game of wishing n hoping n praying for somehow that things will magically all work out well.

HIlarious! EFFIN HILAROUS I SAY !!!!

(sidenote; of course when joe citizen shrugs & says ” who coulda known ” ?! he loses his home to foreclosure as a penalty, but what penalty do the big fund boyz pay when they gamble with OTHER PEOPLES MONEY ?!?! Oh well, its all play monopoly money anyway, right? The central banks will just ” inject more liquidity” into the system & all the bankers just merrily say “my bad” as they collect ANOTHER BONUS this year while millions of lives on the other end are ruined.
Just another day at the office for our financial elite )

 
 
Comment by flatffplan
2007-12-17 10:41:57

commision rates in the future ?
I’m thinking much lower and almost non- existant for morts as it gets regulated to death
seem to be some of the most stressed-out Americans of all. Realtors.”

 
Comment by mrktMaven FL
2007-12-17 10:48:09

“In an recent op-ed piece Mr. Greenspan – once a big fan of ARMs – wrote: ‘The root of the current crisis, as I see it, lies back in the aftermath of the Cold War, when the economic ruin of the Soviet Bloc was exposed with the fall of the Berlin Wall.’ Huh?”

ROTFLMAO!

Comment by crispy&cole
2007-12-17 10:54:31

Did you guys see “this week with George S”?

The stuttering old fart - wants taxpayer dollars to bail out this mess. Where is my lotion at???

Comment by mrktMaven FL
2007-12-17 11:19:35

We don’t call him comrade Greenspan for nothing.

 
 
Comment by Devildog
2007-12-17 11:05:28

I can just hear the victims now…”Those darn commies made me pay twice what my house was worth using an option ARM replete with balloon payment.”

So which system is worse, communism where if you want to be free they just kill you. Or our current system where people never get the option of freedom, but are just born into a consumer matrix run by the elitist who control the megacorps? At least our system wants to keep the consumers alive until they reach retirement age (at which point it would be nice if they’d just die off quickly and not make a fuss).

And what system are we currently under now anyways? It’s not pure capitalism, and it certainly doesn’t resemble anything the founding fathers came up with (although it resembles what they warned against). So what’s a good term for what we have today - anyone care to coin a phrase?

Comment by SaladSD
2007-12-17 11:24:01

Consumer Cropperism?

 
Comment by SaladSD
2007-12-17 11:25:03

Feudal Capitalism?

 
Comment by Steve W
2007-12-17 11:26:07

Oligarchy

 
Comment by Bellevue Ave
2007-12-17 11:51:00

and yet people still mock those that don’t participate in the consumerism game. step one is convincing other people to define themselves by something other than totems.

 
Comment by Devildog
2007-12-17 12:01:17

Robber Barons II: Dude Where’s my Country?

 
Comment by aladinsane
2007-12-17 12:03:14

Bad finance has come line, a cropper…

7 out, line away.

http://idioms.thefreedictionary.com/come+a+cropper

 
Comment by passthebubbly
2007-12-17 12:28:41

Mandatory Prosperity

Comment by az_lender
2007-12-17 13:05:18

my fave. As I contemplate assuming a CA residency, I see how the enormous state income tax practically forces a person above the poverty level to become a Homedebtor. Well, not yet. I figure there’s another $100K or so to be made by waiting. That’ll pay some years of CA income tax.

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Comment by caveat_emptor
2007-12-17 14:26:59
Comment by Thomas
2007-12-17 16:16:17

Unless the political opposition is getting murdered, calling a any government “fascist” is juvenile.

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Comment by peter m
2007-12-17 15:31:50

‘exploitative Hobbesian Capitalism’
]
‘Darwin’s survival of the fittest within the ruthless capitalist society’

 
Comment by Kid Clu
2007-12-17 18:32:42

Bananna Republicianism ?

 
Comment by Chip
2007-12-17 20:35:22

“Crapitalism”

 
 
Comment by joe momma
2007-12-17 14:37:41

Greenspan is senile. It’s like FDR being crippled or Rock Hudson being gay.

How long before the sheeple figure out Greenie is off his rocker?

 
Comment by aladinsane
2007-12-17 14:47:57

The Fall of the Berlin Wall Street axis of the 20th Century, is upon us…

 
 
Comment by aladinsane
2007-12-17 10:55:24

“U.S. investment bank Lehman Brothers is facing possible legal action by local councils in Australia who bought collateralised debt obligations (CDOs) from its local unit, Grange Securities, the Financial Times newspaper said Monday.”

“The FT said one Lehman-originated CDO exposed to the U.S. subprime mortgage market was marked down to just 16 cents in the dollar by the bank last month.”

We are making financial enemies @ a furious rate of exchange…

 
Comment by Frank Giovinazzi
2007-12-17 10:57:07

President Bush said the B word during his Rotary Club talk today.

He called it the “Housing Bubble.”

Apologies if this was already posted, I nearly fell off the treadmill while watching it on CNBC.

He also seemed to revert to his hard line stance, saying banks, speculators and people who bought too much house shouldn’t be helped. Then he repeated the FHASecure and Hope Now rhetoric for the reggalar folks who deserve help. His words, not mine.

Comment by Gwynster
2007-12-17 11:51:37

Watching TV last night, I heard “in a bear market” in the voice over of a financial investment commerical. I almost fell over. I wish I had caught the name of the firm but I was too busy being stunned.

 
 
Comment by txchick57
2007-12-17 10:58:01

Five Things You Need to Know About Stagflation

http://www.minyanville.com/articles/index.php?a=15238

Comment by Groundhogday
2007-12-17 11:16:25

These folks seem to support Ben’s stance, that we are really heading for deflation at the end of a massive asset inflation cycle. Inflationary signals reflect the past, not the future. The Fed might very well try to inflate, but they will be pushing on a string.

 
Comment by flatffplan
2007-12-17 11:16:36

good to know keyens was discredited in the 60’s
how come pols still follow his ideas?
cause socialism is an easy sell

Comment by Professor Bear
2007-12-17 12:02:05

“easy sell”

- Be good and you’ll get to heaven.

- Be nice and you’ll get some presents.

 
 
 
Comment by crispy&cole
2007-12-17 11:00:09

These Centoro clowns gobbled up a bunch of US Malls in the beginning of the year. Bad timing Mates! They bought CRE at the peak and will go down…

Comment by matt
2007-12-17 11:05:41

It sure is looking like the 80’s, isn’t it?

Comment by hd74man
2007-12-17 11:39:24

RE: It sure is looking like the 80’s, isn’t it?

It’s worse…

Debt levels for all sectors weren’t as high; there was no foreign war goin’ on; there was still some semblance of a diversified US manufacturing economy; Greatest Gen Grammie and Grampies weren’t in nursing homes; and 80 million boomers were in their prime earning years.

It’s all upside down now.

We’re 25 years down the pike, infrastructure is coming apart; there’s no savings and no one left to cover
the bets and debts save for 40 million illegals.

Comment by aladinsane
2007-12-17 11:46:43

We actually have a prolonged 2 front war going on…

Afghanistan and Iraq are far apart from one another, to make things even costlier.

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Comment by scdave
2007-12-17 14:05:27

Right on the money HD….

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Comment by crispy&cole
2007-12-17 11:07:11

From this thread - it appears the Japanese have learned their lesson from the last but, meanwhile the Aussies will end up holding the Pebble Beach, Rockerfeller Center, etc.. bag this time around…

 
Comment by tuxedo_junction
2007-12-17 12:09:36

A REIT that financed its property holdings with commercial paper? That is truly insane.

Comment by Flatlander
2007-12-17 12:16:58

GMAC also does this . . . they are purely a yield play, financing long-term assets with short-term money. As long as the short-term rates remain low and there is plenty of liquidity, it’s all good. Or . . . maybe they purchase interest rate swaps to offset the risk of rising rates. As S & L’s found out years ago, when borrowing costs rise over the earning power of the assets . . . you are screwed and need to be bailed out.

 
 
 
Comment by aladinsane
2007-12-17 11:25:54

“At Mizuho, the group underwrote $4.4 billion worth of CDO deals before the markets seized, according to an industry newsletter. Mizuho, the 18th-largest underwriter of mortgage-bond CDOs during 2006 and 2007, may have retained about half of the debt, which may produce $700 million in losses, according to JPMorgan Chase CDO analysts.”

Here’s to being # 18, in the World-Wide CDO Finals…

http://www.youtube.com/watch?v=5f9VHHqE4A0&feature=related

 
Comment by mrktMaven FL
2007-12-17 11:30:50

“‘We never expected, nor could we reasonably anticipate, that the sources of funding that had been historically available to us and many similar companies would shut for business,’ CEO Andrew Scott told reporters in a conference call.”

Right, they never saw it coming. Why do all the FBs say the same thing?

 
Comment by Ken Best
2007-12-17 11:44:10

“‘You meet with a seller and he wants to list at $390,000, even though your market analysis says to start at $345,000? That’s the Internet talking,’ Turcotte said. ‘Before they call you, [sellers] spend hours looking at Web sites, collecting information from sources that aren’t necessarily reliable. You show them the data, and they counter that they are not desperate and they are not going to lower the price.’”

“What should a listing agent do? ‘Walk away,’ Turcotte said. ‘You don’t need the listing that badly, and you know what’s going to happen. Someone else who tells the seller what he or she wants to hear will get the listing, and then the property will stay on the market until the price drops to what the market will bear.’”

No, no, you should stick with what you’ve been telling them: RE always goes up, a home is an investment. Check with Gary Watts to see if 6% up is still in the bag. Quote NAR’s Yun that price is going to rise in 2008, don’t lower it now. Plus the usual “they don’t make any more land”, “a thousand people move here each day” and we are in “permanently high plateau”.

Comment by Arizona Slim
2007-12-17 12:03:14

Walking away can actually be a good strategy. In any service business, there are good clients, mediocre clients, and bad clients. You want to fill your client roster with the good ones.

So, kudos to Turcotte for telling it like it is.

Comment by az_lender
2007-12-17 13:09:03

Slim! Ken Best knows all this. He was kidding. (I guess you knew that too.)

 
 
 
Comment by WantsOut
2007-12-17 11:49:33

The value of foreclosed property held by South Florida banks soared by 21 times in the year ended Sept. 30, according to a Daily Business Review analysis of Federal Deposit Insurance Corp. data.

OUCH!!!

Comment by SDGreg
2007-12-17 12:18:03

NAR press release: “The increase in the total value of foreclosed properties would not have been possible without rapid price appreciation of these properties. This bodes well for a recovery in housing in 2008.”

 
 
Comment by Leighsong
2007-12-17 11:52:23

I read the Bloomberg article on the group of five and my hair caught fire! The quants are not merely engineers, they’re effing nuclear physicists playing the entire global financial system like it’s a fracken monopoly game! grrr…

“The host was Greg Lippmann, then 36, a fast-talking Deutsche Bank AG trader who aspired to make mortgage securities as big a cash cow for Wall Street as the $12 trillion corporate credit market.

His allies included 34-year-old Rajiv Kamilla, a trader at Goldman Sachs Group Inc. with a background in nuclear physics, and 32-year-old Todd Kushman, who led a contingent from Bear Stearns Cos. Representatives from Citigroup Inc. and JPMorgan Chase & Co. were also invited. Almost 50 traders and lawyers showed up for the first meeting at Deutsche Bank’s Wall Street office to help set the trading rules and design the new product.”

Cripes!
Leigh

Comment by Professor Bear
2007-12-17 12:00:32

Crikey!
PB

 
Comment by crispy&cole
2007-12-17 12:01:14

Were these really that smart? DId they invent something new - I think not. Just scammers who found a “new way” to package debt, no different that past speculative mania. I have read every book on this subject and these “smart” guys never do anything new in the beginning and it always ends exactly the same way…once the credit cycle ends the bubble bursts…ALWAYS!

Comment by MacAttack
2007-12-17 12:46:37

The trick was in the marketing, and greed sells well for a while. Then it doesn’t sell at all.

 
 
Comment by Hoz
2007-12-17 12:19:45

“… Until recently, early repayment was perceived as the biggest risk faced by Wall Street’s mortgage desks….

To this point, some of the biggest mortgage underwriters — Lehman Brothers, Merrill, Bank of America Corp. and Morgan Stanley — hadn’t been included in the negotiations. These firms heard about the talks and demanded to be let in…..

The new derivatives were a hit among the group of five’s customers — the banks and other institutional investors that bought them to lock in high yields.”

I like the auto mechanic’s story, why he started shorting the ABX market. The Mr. Joseph Kennedy symptom.

Enough.

 
Comment by nomad_guy
2007-12-17 14:38:12

A couple of other excerpts from the Bloomberg article…

For a while, the subprime boom enriched investment bankers, lenders, brokers, investors, realtors and credit-rating companies…

Another example of who the latest bailout schemes are really intended to help.

Also,
In New York, the ratings companies Standard & Poor’s, Moody’s Investors Service and Fitch Ratings put their stamp of approval on securities backed by loans to people who couldn’t afford them.

I know this is a silly question, but, Where is the accountability?

 
 
Comment by kckid
2007-12-17 12:08:12

http://www.nahb.org/news_details.aspx?sectionID=148&newsID=5805

SENATE APPROVES BILL TO ELIMINATE TAXES ON FORGIVEN MORTGAGE DEBT

Comment by Flatlander
2007-12-17 12:25:44

Ugggghhhh, thanks for the link kc. If this passes, I want my mortgage reduced by $50k with no adverse consequences too!

Comment by Arizona Slim
2007-12-17 12:51:16

Yeah, me too!

 
 
Comment by reuven
2007-12-17 12:46:39

Now to call my accountant to see if I can have my company pay me in “mortgages”

Don’t laugh–this is how the ENRON execs shifted money to themselves–via forgiven loans from the company

Comment by Rally Mitigation Team Member Bob
2007-12-17 13:30:49

“this is how the ENRON execs shifted money to themselves”

And you believe that worked out well for them?

 
 
Comment by Frank Giovinazzi
2007-12-17 12:56:41

For example, to keep a struggling borrower with a generally solid credit history from losing their home, a bank could elect to reduce the amount of the loan by 20 percent – from $250,000 to $200,000. While substantial, the $50,000 reduction would still be considerably less than the 30-to-50 percent loss that would be likely if the home were repossessed. The outcome, obviously, would be better for the home owner, who otherwise would lose the property.

This is crazy transparent — essentially says we’d rather have the FB eat the loss and keep the alligator, rather than let the bank take the loss — even though it’s the bank’s loss to take!

I know, Ben, don’t get worked up over bailout measures that won’t work, but everything that’s getting floated is blatantly to save the banks.

 
Comment by reuven
2007-12-17 13:00:01

I just want to cry! Here’s the letter I just dashed off to my senator:

Dear Senator Feinstein:

I pay a lot of taxes. I’m fortunate to be in the 1% of the population that pays 20% of the nation’s income taxes.

I get no deductions because of AMT. Even the Mortgage Interest deduction was shut out for me (when I still had a mortgage) because it starts to phase out after incomes above $150K through a mechanism separate from AMT.

Why did you vote to eliminate income tax on FORGIVEN MORTGAGE DEBT? This is very real income that in many cases was borrowed on to pay for everything from Hummers to plastic surgery.

PLEASE! I don’t want a form letter. I want an answer to these two questions:

1. WHY IS IT “FAIR” FOR Reuven S******, who saves each year, pays taxes, and has zero debt to have to “cover” irresponsible deadbeats who borrowed too much money?

2. Why do you hate me? I voted for you. Do you want to chase the tiny fraction of responsible saving taxpayers out of California?

I have an idea: Why don’t you give a $5000 tax credit to every taxpayer who has zero debt–including mortgage debt–and, say, over 200K in savings. Instead of rewarding bad behavior that brings down the economy, why not reward good behavior?

Sincerely,

Reuven S******

—-
Most likely I’ll get a form letter like this:

Thanks for your concern about the Housing Crises! The Senator will do everything she can to preserve the property values! Think of the Children!

Comment by az_lender
2007-12-17 13:13:39

Interesting, Reuven, that you chose to address the semi-rational Senator from California rather than Ms Looney Tunes Boxer, who (I would assume) also voted for it. Oh, I get it. You never voted for BB (I wouldn’t either).

Comment by joe momma
2007-12-17 14:59:14

Barbara Boxer is awesome! Best Senator in the country. Do you care to enlighten us with your reasons for calling her Ms Looney Tunes?

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Comment by mrincomestream
2007-12-17 15:29:00

Yea, she voted for it, she got a nice little zinger in her inbox from me…

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Comment by SDGreg
2007-12-17 13:16:19

Does anyone have a link to the bill other than the summary provided by the NAHB? This seems altogether different than providing tax relief for forgiveness of debt for properties that have been sold through foreclosure or short sale. I wasn’t aware that lenders were willing the reduce the principle. Most previous “bailout” measures seemed to focus mainly on modifying loan terms, not the principle.

 
Comment by scdave
2007-12-17 14:08:02

REALY PISSSSSSSSSSSSSES ME OFF !!!!!!!!!

 
Comment by TulipsAllOverAgain
2007-12-17 14:48:13

Across the board interest rate freezes “brokered” by the Dept. of Treasury.

Direct cash-payments proposed to be made to “distressed” borrowers.

Limits on the amount of home loans theoretically guaranteed by the government proposed to be raised to $1.0 million.

Tax breaks for forgiven indebtedness.

Mortgage interest rate deductions.

Zero capital gains taxes on house appreciation.

Can a free-market economy stand any more meddling by the government? These constant efforts to fix things is enough to make me scream. Don’t they realize they are only making the problem worse?

Why is it SOOO important to have society full of mortgage slaves?

 
Comment by joe momma
2007-12-17 14:52:43

No bailouts! Right.

Speculating REALLY DOES PAY in this country. I won’t forget it.

 
Comment by vozworth
2007-12-17 18:41:29

just because the Senate passed a housing gas bubble doesnt means you can really smell it yet.

capitulation continues.
debt is contracting.
all global economies are pulling back…seriously. This ones so big its gonna hurt the Martians.

 
 
Comment by aladinsane
2007-12-17 12:08:52

“The issue could yet become political, the megabank executive said. ‘What did America do when we had our non-performing loan problem? They just pushed us into the corner. European banks also ran away. Why should Japan now shoulder this burden?’ said the megabank executive. ‘But this is a decision made at a high political level and could end up defying logic.’”

Comes around goes around, always seems to have bad connotations when it comes your way…

 
Comment by flatffplan
2007-12-17 12:43:07

WTF ? the rest think were going up ?
The percentage of Americans homeowners expecting a decrease in their home price has grown to 16% from 9%.

Comment by az_lender
2007-12-17 13:14:46

it’s different here and here and here and here and here and here

 
 
Comment by Blacque Jacques Shellacque
2007-12-17 12:59:31

Representatives of five of Wall Street’s dominant investment banks gathered around a blonde wood conference table on a February night almost three years ago. Their talks led to the perfect formula for a U.S. housing collapse.

Are there rooms waiting for these guys at the graybar hotel?

 
Comment by WT Economist
2007-12-17 13:12:59

Just in case federal money is required to help the borrowers, from Bloomberg: Merrill to cut bonuses 40%. “On Wall Street, ‘they expect to get paid more every year,’ Gerson said. ‘When that doesn’t happen, people get upset.’”

http://www.bloomberg.com/apps/news?pid=20601087&sid=av.X6yfQTkg8&refer=home

Comment by Flatlander
2007-12-17 13:22:35

I’m guessing no sympathy from this crowd . . .

 
 
Comment by vozworth
2007-12-17 15:44:20

good stuff:
Failure Beyond Finance
james howard kunstler
Today, 08:25 AM
Events are driving us now, not personalities or even policies. Ben Bernanke, Hank Paulson, and the other characters in the headlines might pretend that they are managing things, but the truth is that problems in the financial sector have spun wildly out of control. The wheels are coming off and we are in that long sickening moment of sideways sliding motion when no attempt at steering will avail to avoid the crash. That it is happening at the very height of the Christmas season, when events have previously been controllable — the season of manufactured Santa Claus rallies and $50 million bonuses — shows how perilous the situation is.

The reason the financial sector is crashing is really pretty simple: it created too many fraudulent securities. What has been conspicuously absent so far is any sense of accountability for what may go down as history’s greatest swindle. It’s really impossible to imagine that a bunch of low-ranking worker bees in the banking hives spun out all these bundles of collateralized debt obligations, mortgage-backed securities, and similar trash on their own without the say-so of their bosses — a group that includes the current Secretary of the Treasury, Mr. Paulson, formerly CEO of the Goldman Sachs organization. And, of course, the questions naturally follow: what about those in charge of the ratings agencies that awarded AAA status to high-risk junk investments; and where were the banking regulators when outfits like Countrywide Financial, Washington Mutual, and Ditech were handing out miracle mortgages to borrowers without normal qualifications; and where was the Securities and Exchange Commission when the wholesale trade in creatively-engineered debt instruments ramped up to high volume, and what was the board of directors at Merrill Lynch thinking when it allowed disgraced CEO Stan O’Neal to back a truck up to the company loading dock and fill it up with $160 million in bonus-and-termination payments after O’Neal presided over at least $8 billion in losses?

What we’re also seeing is a crisis of authority on top of a crisis of capital, and it will probably lead to a crisis of legitimacy — by which I mean a catastrophic loss of faith that this society can govern itself at any level. Leadership across the board has failed, in government, in business, in what used to be called the press, and in education. Leadership in every sector went along with the program, marveling stupidly at their society’s ability to get something for nothing.

The general public did not perform any more honorably — due to whatever failure of civic norms they operate within — and indeed the nation as a whole may deserve all the suffering it faces. But however bad the general public’s behavior, or dark their fate, a failure of civic norms is ultimately a failure of leadership, which is about clearly stating the boundaries and terms of behavior. When anything goes, nothing matters. Since that was our leaders’ attitude, the public did what it naturally does: it follows the example set by leadership.

We haven’t begun to see where all this will lead yet. Since what is happening is basically the evaporation of trillions of dollars in supposed wealth. At the very least we’re likely to see an impoverished nation very soon short of money to buy necessities. Historically this is known as a ruinous deflation. The last time America went through such an experience was the Great Depression of the 1930s. Like this situation, it came at the end of an extraordinary expansion of credit — loans largely made in that day for the purchase of stock “on margin.”

One difference between then and now is that in 1929 a relative small minority of Americans were involved in stock purchases. Today, a relative large number of ordinary citizens own overpriced houses bought using extraordinarily risky loans, and a large number of institutions such as pension funds, banks, hedge funds, and money markets own fraudulent securities based on these house loans, worth a fraction of their face value. Some other differences this time around: in the background is a “real” economy of depleting natural resources (oil, soils, aquifers, etc) and the systematic disassembly of an industrial manufacturing infrastructure. In the 1930s, many people could return to family farms and get by, even with little money. Today there are far fewer family farms.

The nation is acting just now like a crowd of bystanders watching a car wreck that has nothing to do with them — as though they were just occupying the Nascar grandstand on a particularly bad day. They’ll discover soon that it’s their own society that’s hit the wall out there on the track. It raises the question, under the circumstances, as to whether the next presidential election will have any legitimacy.

Comment by SaladSD
2007-12-17 19:09:52

Leadership American Style:

First it was:
“Energy conservation is a personal virtue”
then it was:
“Provisions of the Geneva Conventions are quaint”
which morphed into:
“Waterboarding and organ failure is not torture”
and the ol’ chestnut:
“Brownie you’re doing a heckava job.”

FYI, immediately following 9/11 Bush didn’t tell us outright to just “go shopping”. Here’s an excerpt from his speech on 9/20/01 which is the basis for that interpretation:

“Americans are asking: What is expected of us? I ask you to live your lives, and hug your children. I know many citizens have fears tonight, and I ask you to be calm and resolute, even in the face of a continuing threat.
I ask you to uphold the values of America, and remember why so many have come here. We are in a fight for our principles, and our first responsibility is to live by them. No one should be singled out for unfair treatment or unkind words because of their ethnic background or religious faith. (Applause.)
I ask you to continue to support the victims of this tragedy with your contributions. Those who want to give can go to a central source of information, libertyunites.org, to find the names of groups providing direct help in New York, Pennsylvania, and Virginia.
The thousands of FBI agents who are now at work in this investigation may need your cooperation, and I ask you to give it.
I ask for your patience, with the delays and inconveniences that may accompany tighter security; and for your patience in what will be a long struggle.
I ask your continued participation and confidence in the American economy. Terrorists attacked a symbol of American prosperity. They did not touch its source. America is successful because of the hard work, and creativity, and enterprise of our people. These were the true strengths of our economy before September 11th, and they are our strengths today.”

 
 
Comment by Real Estate Refugee
2007-12-17 19:23:45

Did anyone else have a vision of the band playing as the Titanic sunk?

“LaRoche strutted across the stage for 45 minutes wearing feathered boas and silly hats. She cajoled her audience into grinning, laughing, shouting ‘Whoop! Whoop!’ as loudly as possible, then joining hands as she led in a sing-along of ‘That’s Amore,’ with Dean Martin crooning in the background.”

Comment by Professor Bear
2007-12-18 05:41:29

“Nearer, My God to Thee”
by Sarah F. Adams, 1805-1848

1. Nearer, my God to Thee,
Nearer to Thee.
E’en though it be a cross
That raiseth me,
Still all my song shall be.
Nearer, my God, to Thee,
Nearer, my God, to Thee,
Nearer to Thee.

2. Though like the wanderer,
The sun gone down,
Darkness be over me,
My rest a stone,
Yet in my dreams I’d be
Nearer, my God, to Thee,
Nearer, my God, to Thee,
Nearer to Thee.

3. There let my way appear
Steps unto heaven;
All that Thou sendest me
In mercy given;
Angels to beckon me
Nearer, my God, to Thee,
Nearer, my God, to Thee,
Nearer to Thee.

 
 
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