Bits Bucket And Craigslist Finds For January 4, 2008
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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Now you don’t…
http://www.nytimes.com/2008/01/04/business/04norris.html?_r=2&ref=business&oref=slogin&oref=slogin
Misnomer: “outstanding asset-backed commercial paper”
Is anyone else having deja vu all over again looking at that chart, and reminiscing on the ABX charts about 1-year ago?
On the other hand, perhaps there has never been a better time to buy?
“Perhaps, just perhaps, it also shows that some investors have overreacted to the credit squeeze of 2007, and that there really are buying opportunities around.”
Slightly OT, but really interesting: LDS roots
http://magazine.byu.edu/?act=view&a=1901
I’m less financially sophisticated than many of the folks here, I’m sure. Looking at that article, I just get the sense that there is so much hot steaming financial garbage out there that is going to hurt almost everyone - even people who are financially conservative.
I have a solid financial situation, no debt beyond fixed (and affordable) mortgage, and 401k and conservative and decently performing stock investments. Nothing fantastic, but probably above average (at least from what I read about the dearth of american savings).
Nonethless, I’m really starting to get concerned that financial behaviors like this are going to screw up the economy in such a way that damage everyone - whether they participated in risky financial behaviors or not.
It’s like living in a neighborhood of wooden houses, and the neighbors let their kids play with matches all the time.
What to do?
no answers, but I think you are correct. I’ve sold most of the mutual funds that are less transparent and put the funds in Treasuries (earning virtually nothing, by the way). But stocks that I know what/how they invest and what producce I am oddly comfortable holding: Microsoft/Oracle Walmart, P&G etc.
I have significant dollars in AAA CA municipal bonds bought long ago and have very high, tax free returns, but I am considering dumping those as well. My broker says “are you nuts”? you cannot get that sort of return these days and we will always need water/utilities/schools, roads - there is “no way those will default”. So, I’m still thinking about what to do on those. What do you guys think about CA triple A municipals?
I think that any financial investment that somebody else controls, is not for you…
That rules out most everything.
Pretty much all my cash is in a Schwab CA Muni Money Market fund. I moved it there after I looked at the underlying investments of their other more traditional MM funds several months ago. In reading the holdings, I didn’t know what they were invested in–there were a lot of creative sounding names that didn’t explain what the instrument was.
The CA Muni Bond MM Fund on the other hand has more understandable bonds, many of which are short term (so have been paying for a number of years already). This gave me comfort, and tax advantaged it makes a lot of sense.
I wouldn’t hang your hat on the AAA rating, but if the source of repayment is homeowners, with the bond being in second position behind property taxes, I’d feel pretty safe.
CA muni funds are great if the Governator can fund the rest of the budget with proerty and sales taxes.
Since both of those are circling the drain, I expect lot’s of creative ways to pull funds from bond issues.
No clue how that will impair their ratings.
Dang, guys… if someone offered me CA muni’s today, I would not buy them. In fact, if I were holding CA muni’s, I would sell (and go to treasuries).
State governments can and do default!
The bond insurers don’t look to healthy, either.
“I wouldn’t hang your hat on the AAA rating, but if the source of repayment is homeowners, with the bond being in second position behind property taxes, I’d feel pretty safe.”
Since fire is cheap the poor’s entitlements are 1st priority. No such thing as being greatful for the previous aid or understanding the current financial crises. Recall Wendy’s client, “Just give me my check!”
appreciate the input everyone.
The tight mortgage market is affecting the sale of my $49,000 house
in Southern Oklahoma. Three people have been turned down for
financing so far. This is a really nice house on 1/3 of an acre in a
nice neighborhood near Lake Texoma and the Red River. One fellow has applied for a VA backed loan and hopefully he will
qualify. He wants the house but has not made an offer. He is waiting for the VA approval first. You can see that people are
not getting in any hurry to make offers today.
VA approvals can take several weeks to a month to get the approval.
But VA will still do 100% loans and will stretch on underwriting. Get this dude on the hook NOW subject to approval of financing. Also be prepared to pay some of his closing costs to get the deal done.
Good Luck
I have the house listed with a Realtor and they said it has been about a month since he applied to the VA. Hopefully he will hear something soon.
What’s the mls listing #? Just curious about what 49K buys in your neck of the woods.
I just talked to the realtor and it is not on the MLS just yet. It will be soon. This URL will take you to the listing on his web site but there is no photo yet. Sweet Little Home is the title on his site. He thought it was sold which is why it is not listed on the MLS. That was one of the deals that fell through. http://www.royboatner.com/Homes.html
I thought Realtors were required to have the listing in MLS within 3 days of their sign going up out front?
Do you owe anything on it?
Can the buyer make a downpayment acceptable to your needs right now?
If no and yes, respectively, what about selling it on contract and holding the note yourself if they can’t get financed?
I own the house outright. The realtor asked me if I wanted to finance it myself and I said no. I may have to change my mind on that if no one can get regular financing. I hate to do it because many people will ruin the house and move out.
I’d start the RE lawyer search now, just in case. Mine was worth his weight when I sold on contract, although I only carried it for about 6 months.
Good luck to you.
GEEEZUS, $49K for a house? I thought maybe you missed an extra “0″ on that. I’ve got that much saved up just for a downpayment here in Southern Clownifornia. Frack it all, I need a new state.
Remember… Oklahoma is OK!
And near Lake Texoma is kind of nice, if you don’t mind the crazy summer heat.
Or Tornadoes?
Aunty Em…theres no place like home.. A little snow.wind,sleet,hail balls the size of, well you name the size, they growem big in these states.
Check on Homeowners insurance for tornadoes, water/floods/ and hail damage.
Signed yer friend,Ado Annie.
The house has 960 sq. ft. with new high efficiency heat pump,
new kitchen appliances and new high efficiency 50 gallon hot water heater. Completely remodeled. I bought it for my 25 year old daughter. She had it remodeled while she lived there. It has a new roof and new carport too. In the utility building which is 12X20 and matches the house, she built a very nice bar and had it completely stocked. The liquor stock went with her when she moved to Houston, Tx. The house is located 1 mile North of the Texas border on highway 75. About
90 miles North of Dallas, Tx. We really have not had much of a price bubble in this area. Homes have gone up with the inflation rate. Most jobs are not high paying in this area.
$10.00 per hour is pretty good. I think Lowes pays about $8.00 per hour.
Wow…49k sounds so cheap! But I remember when it sounded like so much, circa 1990 here in Missoula. I bought my first, a 500 sf dump, for 21k.
My senses of expensive/inexpensive is just so warped now.
NPR did a “Expensive place, cheap place” story about a year ago. The cheaper place was in South Dakota. The expensive house was the cheapest in some bay area city (San Mateo?): it was an 800 sq ft adobe being sold for over $400,000
OK is nice. Lived there for almost 4 years. Very nice people, low taxes, affordable, lots of space. In my small town very little for a single professional to do as I am not religious, but if you are not single or like church there is much more opportunity.
Had to put a couple new roofs on because of hail (covered without question by State Farm.) Weather not too bad - hot but dry in summer, rare snow or flurries. Never great weather but never blizzard conditions either and a great place for solar. I won’t go back to that small town (great people but boring) but I would move to Norman or Tulsa in a heartbeat. Hot summers did kill my ability to handle heat, but at least not humid.
If I moved back a basement or cellar would be mandatory. But I’m not more afraid of a tornado than I am of an earthquake. Fire, however, scares the hell out of me! (One of my top five reasons for thinking about leaving San Diego.)
Anyway, if you are thinking about moving someplace more affordable and can handle heat but not blizzards or humidity, don’t count out OK.
http://boise.craigslist.org/rfs/527895455.html
Today I bring you an Idaho foreclsoure sale for only $1.5 million! 85% complete. Yesterday was a listing for 850k, so some builder or investor must have bit it hard.
Short sale?? What the eff was it originally bought for??
Idaho sure has changed the last 10 years I’ve been traveling there….
The potato farmers must be raking in the dough
I have a brother in law who owns a potato farm in Eagle Idaho. He is trying to sell his property since property values are so high and subdivisions popping up all around him. I think they missed the opportunity to sell but on the bright side he won’t have to worry about any more subdivisions popping up either
Looks like a builder spec to me. Ran out of money before he finished or used construction loan $$ for something else (groceries, toys, etc.). The lender sure doesn’t want this albatross back, so has agreed to the short sale. Still, the pool of buyers for this thing has to be pretty small.
You want to sell something for 1.5 mil, at least have the sense to hire a photographer instead of taking pictures with your cell phone. Geez, what an idiot
It appears he text-messaged the description as well.
u want 2 buy?
“Excellent views” - hah. And, yet - some scrubby (and likely future developed) neighbor’s yard/pasture is the best picture they could provide. (4.5 acres is nice - but, it’ll just look like any given spot of loudon county (va.) once all the neigbors houses on 5 acres go in as well).
This house looks soooo ugly, outside and the living room pic.
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Breaking News… UR (Unemployment Rate) AT 5%!!!!!!!!! Up 0.6% from the cycle low.
RECESSION FULLY CONFIRMED. When the UR rises 0.5% from the low in the cycle the economy was is recession every time.
Jas
Booyah!!! Big azz red candle on the futures.
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And I love it! Only because I have correctly diagnosed the situation for the several months.
Jas
We’ll see how much you love it if it visits your family. I’ve said before that anyone that welcomes severe financial problems hasn’t lived through it before. I have and it’s no fun.
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Hello Ben,
I was referring to the reds in the Scam futures and not to loving the hard times. I am loaded for big bear in Scams.
Knowing that hard times are coming soon can only be helpful.
Jas
I agree Ben. It’s our Gov’t meddling that messes all of this up. If they would just let the free market take care of itself instead of always trying to prevent every little recession then we would be better off.
At this point the “free market” is holding a big hammer.
I have lived through the early 80s recession. I remember trying to find any job during that time to save for college and it was really really bad. I also remember the gasoline crunch in all it’s glory, living in car-dependant OC.
I also got slammed hard by the dot.com bust - lost 63% of my stock holding and my job. I had to live on savings for 9 mo. This chickie knows exactly what hard times looks like in Sacramento.
I understand why Jas is happy because I am too. I tired of being called chicken little for the last 4 years. Now I get to say “told you so” to the people who were firmly in denial.
It also means I need to get ready to open out the sofa bed for the friends who are going to need it. I’m prepared to weather the storm because I used commonsense. Many of the people around me didn’t.
This has been my biggest question all along - what can be done because no one will be safe from the ravages of a bad economy regardless of the cause. It will devalue our currency and other assets. And though most have individually set themselves up to survive the mess, surviving is not the same as living a rich, productive, rewarding life. Also, the folks that will be hurting are family, friends, neighbors, and coworkers and when you are surrounded by so many people that are so frustrated and stressed, it’s going to effect you, too in some way or another. Went through recession of mid 70s and it was ugly and everything just seemed depressing and gray, even if you were OK. Also, psychologically, it just seems to feed on itself and get worse.
Jane: little pig number 3
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“what can be done because no one will be safe from the ravages of a bad economy regardless of the cause. It will devalue our currency and other assets. And though most have individually set themselves up to survive the mess, surviving is not the same as living a rich, productive, rewarding life.”
You are crazy!
People who are aware and prepare, as best suited to their current circumstance, will do far far better than those who are not. Stupid will pay a far bigger price than those who have a good idea of what is to come.
Jas
I welcome a recession only as a means for folks on Main Street to snap out of it and hold the corporate elite/Wall Street accountable for the mess they’ve created. /just dreaming
A recession would be tough medicine, but it could root out much of the cancer pervading our government and corporate world today. And no, I do not personally wish a recession on myself. Software engineers tend to have a much harder time during them, and pressures to offshore will only mount in all areas. There are depression senarios out of all of this, and even economic collapse of the dollar ones, but for that time will tell.
Software engineers tend to have a much harder time during them
My brother-the-software-engineer lost his job at Unisys in the ‘91 recession and never worked again. Combination of age, advent of PCs & Windows that he missed out on, plus a wife with MS. Lost everything, but he survived thanks to my father’s money.
USD cratered against the yen. Tokyo will have another rough day on Monday if this holds through the day.
Agreed with Ben, this isn’t something we should get too excited about on the economic front. If we have a “real” recession like the 80-81′ deal or 73-74′ it won’t be pretty and folks in EVERY industry will lose their jobs. Hopefully it will just be another mild recession with the brunt of the hurt being felt by folks in the housing industry and realated industries.
If I understand Jas and others on the board correctly its more about the truth of the situation finally emerging through all the hedonistic data manipulation and dealing with reality rather than joy over the economy sliding into recession.
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“If we have a “real” recession like the 80-81′ deal or 73-74′ it won’t be pretty and folks in EVERY industry will lose their jobs.”
You are way too optimistic. The coming recession-that-will-slide-effortlessly-into-a-depression will make the Great Depression look mild in comparison. How could I be so sure? I have spent more time in researching debt in the US since 1890s over the past three years than anyone I know, including the two Fed Chairmen.
It Is the Debt, Stupid!
Jas
Popper is right - we just want this scam economy exposed. For years now, each of us in our own experiences, have seen total pukes buy stuff we know they can’t afford - and then be touted by the MSM as role models. Enough is enough - let common sense prevail…for the first time in the 21st Cent.
I think it was Lennin (SP?) who said:
Sometimes it has to get bad to get good!
I have tried to tell everyone I know to “keep their powder dry” but they keep spending and think I am some sort of fool.
Jas, I’m afraid I agree with you.
We can only hope that the coming desperation of the working class will get them off their collective ass and demand some real change in our government.
There are some simple solutions to most of our problems if we can find a way to subdue the rampant greed that’s in every nook and cranny of both our government and this capitalist pig system of ours.
Exactly - the joy is not over the recession itself, but that the truth is finally breaking through the lies and manipulation. Maybe, just maybe, the “sheeple” will wake up angry and demand accountability.
“We can only hope that the coming desperation of the working class will get them off their collective ass and demand some real change in our government.”
Yeah, change for the sake of change, and it won’t be pretty. The folks don’t understand enough to make changes that work. It should be blindingly clear that the PTB don’t know what they’re doing and each new bunch that gets in power flies by the seat of their pants and kick the problems down the road.
Jas
What would you recommend we do with regards to investing to protect any savings or investment from collapse considering your researcehed predictions.
I am 41 years old. My grandmother is now 91. She is as sharp as she was when she was 18.
This is a woman - whose parents lived in the big “McMansion” - in Oklahoma in the 1920s - whose parents then lost everything they had in the early 1930s - whose parents took her and her 8 brothers and sisters to a very small shack in Tulsa so my previously well-off great grandfather could work 12 hour shifts for 6 days a week in a refinery for minimum wage. Before it was over - all of the kids were sent to live with wealthy people to be indentured slaves for 1-2 dollars a week. This is the same grandmother whose twin brother was killed on Iwo Jima. This is the same grandmother whose older brother was killed on D-Day.
I had the privilege of taking my grandma to the store over Christmas. I just love to sit and soak up all the wisdom. While in the store, a 30ish young woman was in line in front of us - with two of the most hideous vases I have ever seen in my life. When the total rang up $750 I almost dropped my jaw. Then, she proceeded to go through 5 credit cards - all declined. That was not enough - for to escalate her humilation, she began calling the innocent cashier all kinds of names - until the man behind her called her out. Nevertheless - I was stunned. My grandma got back in the car - and the tears began to flow. SON - I never ever would have dreamed I would have heard myself say this - but this country NEEDS another depression in the worst way.
That is representative of her wisdom - and I will always love and cherish her and her husband - granddad - for they made certain that their grandchildren would survive should it happen again - I thank God every day for them. I still hear them everyday “Debt is sinful. Your house is NOT an investment. Work hard - then play hard. Have just one luxury in life. Life is more than things and money. Remember - give to the man on the street - he may be an angel in disguise watching to see what you will do. Do not eat luxuriously in life while your neighbors are starving. It is better for you to eat food that you have raised yourself - you appreciate it more. Do unto others as you would do for yourself. The most important thing in your life is your family.” My sisters and brothers and I are ready - but I look out on the great majority of my peers and realize that this is going to get very very ugly.
Thanks grandma - I love you.
Thank you for this story dagan, heartbreaking as it was.
I too think we need an economic disaster for people to realize how shallow we’ve become, how unappreciative, and how wasteful. I think this will be a very bad recession as the excesses are so huge. Debt is a growing problem and people walk blindly through life ignoring massive debt that would put me (and many of us) in the hospital for stress.
I am angry that the woman abused the clerk because she couldn’t buy her crap. I am angry that an elderly lady had to witness it and absorb the negative emotions from it. I am angry that the woman felt she “deserved” the vases because she had a piece of plastic in her hands. I suspect she buys lots of crap, recycles nothing, goes through life looking down at people who don’t consume like she does, and does not have a single emotion that does not revolve around her and her lifestyle. Mostly I am angry that she and her ilk made homes so expensive I cannot afford one (with traditional definitions of affordability) even though I have saved the money for one.
I am not looking forward to the coming correction, but I know it is coming and I am resigned. I do hope some good comes out of it. People learned to save and live frugally after the Great Depression - how many stories of saving used foil did you grow up with? I will up my contributions to food banks, help out individually the people in my circle of concern, continue to buy lunches for the guys who look hungry and ask me for spare change, and work to help all the animals being made homeless and turned into shelters (and it is starting) as their owners lose their homes.
No, this is not good for anyone except maybe the environment and (long-term) our souls as we realize the best things in life are free. I wish it had never gotten to this point, but it did and we have to deal with the reality that is coming.
Key point here — the unemployment rate is based on the household survey, and thus includes the self-employed. The number of people employed, according to this survey, has been weakening for some time, but so has the number of people in the labor force, which is why unemployment isn’t higher.
The establishment survey only includes employees. The young, and the immigrants, are increasingly not employees. It also relies on models to predict the number of new establishments. During shifts in the economy, when tax data comes in, there are often big revisions. It is very hard to call turns in the economy based on this survey.
The rebenchmarked establishment data comes out in early March. Watch that revision.
Another thing that the household survey won’t include in the unemployment rate is people who call themselves “retired”. I have noticed quite a few people getting laid off who are near retirement deciding to “retire”.
Somehow I suspect that most of them aren’t really prepared financially to retire, but most of them will probably never show up in the unemployment rate again.
Another systematic error. Lots of people, including those under 30 dont have a landline phone. and we are completly ignored in a household survey.
Jas be sure and look at the link I left for you on the Weekend thread (near the bottom)
Yeah, spin those numbers! It’s Mourning in Amerika.
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Thanks, Chick!
How did you know?
Jas
A local Detroit paper yesterday reported that the Wayne County unemployment rate was 9.2%, and 15% within the city of Detroit.
As a general observation - there seems to be a lot more talk in the MSM about recession expectations. Just a few months ago those stating 50% chance of recession were considered on the fringe - now that’s the mainstream prediction, with the fringe stating that a recession is certain and/or we’re already in it.
Jas - when you state the 5% number - is that USURTOT (total unemployment) or UNRATE (civilian unemployment)? Seems that both are flirting around 5% now. Do you have good links to historical data? (not just graphs, but #’s)? I have some links with historical graphs, and with current numbers, but not historical numbers. Thanks.
Found historical numbers for UNRATE, though USURTOT seems elusive.
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Data that I used –
Title: Civilian Unemployment Rate
Series ID: UNRATE
Jas
Wow.
January 4, 2008 9:15 A.M. EST
BULLETIN
Unemployment rate hits 5%
Jobs touch off shock waves
Stock futures fall off a cliff in the immediate aftermath of the pivotal U.S. employment report for December. Treasurys rally as the dollar tanks.
http://www.marketwatch.com/
Another rough first session of the year…
Tokyo stocks plunge during first session of 2008
By Chris Oliver, MarketWatch
Last update: 12:00 a.m. EST Jan. 4, 2008
HONG KONG (MarketWatch) — Japanese shares started the first day of trading in the New Year by plunging to a 17-month low in a shortened half-day session that export saw stocks pressured by concerns over the stronger yen and fears of a slowing U.S. economy.
http://www.marketwatch.com/news/story/tokyo-stocks-plunge-during-first/story.aspx?guid=%7BEE9BB6E6%2DA3ED%2D4C85%2DA120%2D7E15508BA91B%7D
Oof! Bubble stalwarts are getting hammered today…
http://www.marketwatch.com/quotes/quotes.aspx?symb=tol+kbh+len+ctx+dhi+fnm+aapl+goog+bzh+phm+sbux+peet
“With the odds of a recession increasing, President Bush is exploring a package to stimulate the economy. The president, who has been coping with low marks for his handling of the economy, isn’t expected to make any decisions until later this month; He delivers his State of the Union address to the country on Jan. 28.”
If Bush wants to do something, I would recommend doing away with AMT tax. That screwed last year. I ended up paying about $30K to the IRS. Can I ask for a bailout?
Let me guess - more tax cuts for the top and for business with some mumbo jumbo that is supposed to placate the common folks about trickle down effect. Throw in some mention of illegals and national security and it should be same old same old.
smirk, is that the format for all his speeches?
guessso
January 4, 2008 2:06 P.M.EST
BULLETIN
Bears delight in jobs report
Stock indexes take a turn for the worse after U.S. nonfarm-payrolls data are released. Treasurys rally as the dollar tanks against its rivals.
• Vitner foresees slower growth — but not recession Audio
U.S. ECONOMY
Lower hiring signals slowdown
Unemployment rate jumps to 5% for the first time in 25 months.
• Services-sector growth cools | Stagflation watch (Greenberg blog)
‘Since 1949 the unemployment rate has never risen by this magnitude without the economy being in recession.‘
— John Ryding, Bear Stearns
http://www.marketwatch.com/
To Ryding’s point, I reiterate one I have raised on this bb since at least late 2006: Since 1955, there have been seven times (preceding the present episode) when U.S. residential construction investment dropped off by 25 percent or more, and each time, there was a concurrent U.S. GDP recession. This is known in the econometrics business as a perfect predictor.
Now that 2/3 of Americans believe a recession is in the bag, a big name Harvard economist cautiously nudges his subjective probability north of 50:50.
AFX News Limited
Feldstein says chance of US recession now ‘probably over’ 50 pct
01.04.08, 1:41 PM ET
NEW ORLEANS (Thomson Financial) - The chances of a recession in the US economy are likely above 50 pct after this morning’s employment report, said Harvard economics professor Martin Feldstein.
He was already predicting a 50/50 chance before today’s report, but now ‘I’m probably over, I’m probably over,’ he told Thomson Financial News on the sidelines of the American Economics Association meeting here.
http://www.forbes.com/markets/feeds/afx/2008/01/04/afx4495952.html
The U.S. Peso
http://www.stockmania.com/index.php?showimage=126
Manhattan an island of strength in housing slide
http://tinyurl.com/2qr4zm
“Like the previous three quarters of 2007, Manhattan has continued to benefit from the weak dollar and a solid economy,” said Jonathan Miller of Radar Logic, who compiled the data. “The weak dollar has effectively doubled the demand from the foreign contingent over the last couple of years.”
“There’s not much to buy and a lot of people want in,” said Jim Gricar, executive vice president at Brown Harris Stevens.
Foreign buyers have been one of the key reasons that the Manhattan market has avoided the stagnant and falling prices across much of the rest of the US.
Those “solid economy” days appear to be ending. And it looks like “foreigners” are hoping to catch the falling knife.
Are there enough billionaires and foreigners to fill Manhattan? Maybe. But the can’t fill the whole NY metro, a region with 20 million people.
“Are there enough billionaires and foreigners to fill Manhattan? Maybe.”
Why did “Escape from New York” pop into my head when I read that? Yeah, let ‘em all buy there…and then send in Snake Pliskin!
I remember reading somewhere that the median income in my zip code (on the Upper East Side) is around $50,000. This is the median, not the average, and the data might be a few years old now… but still… $50,000! And everyone tries to live like they’re rich.
I remember growing up in Queens/Manhattan in the 60’s/70’s. The number of empty/abandoned stores was amazing and if anybody thinks it can’t happen again I just chuckle in their general direction. The unemployment back then hovered around 7-8% and the amount of new construction was miniscule.
Granted that New York City presently has some “draconian” environmental/anti-capitalist laws that hamper construction but if there’s a buck to be made, builders WILL build there.
When the cranes start disappearing is when you’ll know the real trouble has begun. Foreign buyers won’t mean sh!t.
dumb question, I know, but I have never quite gotten the
Median vs the Average.
Plz gv a 5th grader version…
Thx.
Median the number in the middle. 7, 14, 93, 178, 376 - the median is 93.
Average - the numbers added up and divided by the number of numbers so 7+14+93+178+376 = 668/5 = 133.6.
Hope that helps.
Thanx,SDREBEAR.
Too bad about David Cee’s girlfriend
http://www.signonsandiego.com/uniontrib/20080104/news_1n4caucus.html
Don’t get excited yet. Things changed pretty quickly in ‘04.
Then again, maybe this time around they changed BEFORE the primaries.
Here is the part that excites me…
Barack Obama declared a “defining moment in history” on Thursday as he rode a wave of support from young and independent voters to defeat Hillary Clinton in the Iowa caucuses, putting him in pole position to win the Democratic presidential nomination.
http://www.ft.com/cms/s/67e4c418-ba5c-11dc-abcb-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F67e4c418-ba5c-11dc-abcb-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
That’s what I meant by things changing before this primary this time. I think this time around people might not be allowing CNN to decide who to vote for and that is VERY encouraging. Still like to see Dr. Paul have a better showing, however.
Super Tuesday should be quite the spectacle.
I’m not a huge paul supporter (although am always glad to have some semi-Libertarian voice in the race), but I was really ticked last night as nobody gave him any credit for being only a few percentage points below thompson and mccain. I don’t think he did much campaigning there at all, and still picked up 10% of the vote. I kept seeing that piechart CNN had up and there was this huge “other” block that was almost all Paul and they wouldn’t put his name up. He’s ticked off somebody high up in the media world. Or maybe just scared the establishment.
If Paul lost his social conservatism, he’d have far better numbers - hell he’d propbably even get my vote.
Steve W - I watched the whole of the CNN coverage and wondered the same thing.
C’mon, the guy got 10% of the vote! If that doesn’t warrant a slice of the pie chart, then I don’t know what does.
And, on the Dem side - Richardson got a slice, even though he only got 2% of the vote!
If Paul lost his social conservatism, he’d have far better numbers - hell he’d propbably even get my vote.
——————
Agree. His extreme anti-choice position pretty much seals his fate.
I’d love to vote for him and do send him money (because I’d like to see somebody shake up “the establishment), but not sure if I could vote for him, largely because of this one issue.
16 years ago it would have been:
Bill Clinton declared a “defining moment in history” on Thursday as he rode a wave of young and independent female voters to defeat whoever it was in the Iowa caucuses, putting him in pole position to win the Democratic presidential nomination.
…I miss him, I miss America as it used to be, sigh…
Obama is much more like BC than the other C is.
You said it.
eassssssssssssssy now.
Behave …smirk.
I find it amazing that someone who would have been called a Mulatto, (probably derisively) 50 years ago, and would have had no chance whatsoever of being President, just might be now.
Obama/Paul ‘08
“Obama/Paul ‘08″
Now that is a tag-team I could vote for!
Hear hear!
Also seen on the Marketwatch.com home page:
• Sen. Barack Obama hails victory
• John Edwards edges out Clinton
• Sen. Hillary Clinton on finishing third
That opportunist deserves her fate.
Obama: What a fate, to have a surname like that these days. Too many stupid people thinking it’s spelled with an ‘S’ in the middle. He could use a little more seasoning, though.
I’ve tried, I really have, but after weighing the statements, actions and dirty tricks of each of the candidates, They are all cr@p. Each one of the leading contenders (Obama, Clinton and Edwards) will do whatever they think will get them the imperial presidency. One of my favorites was Obama’s statement that if he didn’t win Iowa he would probably drop out of the race because, as he said it, it hasn’t been that long since he and his family were struggling to ‘make it’ and he didn’t think he could ‘relate’ to the American People for very much longer. So, as he sees it, he and his family are moving up into the elite of America, and he won’t be able to ‘relate’ to the average American anymore. The only thing worse than the Democrats running for President are the Republicans.
On another forum: young kid got incensed when someone used Obama’s full name, including his middle name. Claimed the original poster was a racist for doing so. Obviously, he thought the O.P. was making some play on words. Kind of funny, and sad. Luckily the untutored brat is too young to vote
Fugly shot of HC on FT home page…
Clinton on ropes as Obama takes lead
By Edward Luce and Andrew Ward in Washington
Published: January 4 2008 19:04 | Last updated: January 4 2008 19:04
Hillary Clinton was on Friday planning an increased campaign role for her husband and more direct attacks on Barack Obama’s political inexperience as she battled to prevent her rival for the Democratic nomination building up an unstoppable momentum.
Her supporters recognised that she was fighting for survival as she headed into next Tuesday’s crucial New Hampshire primary, which she must now win to stop the Obama bandwagon from building on its striking success in Iowa on Thursday.
http://www.ft.com/home/us
Op-Ed Columnist
The Two Earthquakes
By DAVID BROOKS
Published: January 4, 2008
Ottumwa, Iowa
I’ve been through election nights that brought a political earthquake to the country. I’ve never been through an election night that brought two.
Barack Obama has won the Iowa caucuses. You’d have to have a heart of stone not to feel moved by this. An African-American man wins a closely fought campaign in a pivotal state. He beats two strong opponents, including the mighty Clinton machine. He does it in a system that favors rural voters. He does it by getting young voters to come out to the caucuses.
This is a huge moment. It’s one of those times when a movement that seemed ethereal and idealistic became a reality and took on political substance.
http://www.nytimes.com/2008/01/04/opinion/04brooks.html?em&ex=1199595600&en=763f9b684a6402cf&ei=5087%0A
ot
WOS war on savers to heat up
W to offer “help” and candidates will have FREE-er everything
Too late, this thing is outrunning them all.
A tale of two yield curve charts. One dropped through the floor this morning and remains at negative levels; the other dropped as well, but by a lesser amount, before reverting to an increase off of yesterday’s close. What could this portend?
http://www.marketwatch.com/tools/quotes/intchart.asp?submitted=true&intflavor=advanced&symb=TNX&origurl=%2Ftools%2Fquotes%2Fintchart.asp&time=2&freq=9&startdate=&enddate=&hiddenTrue=&comp=tyx&compidx=aaaaa%7E0&compind=aaaaa%7E0&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=1&optstyle=1013
“A tale of two yield
curvecharts.”call me cynical but I’m buying this gap down on the futures, particularly the nasdaq
cynicalpracticed and practicalthey’re doing it right this time for the fed to cut 50-75 bps. that would cause a short squeeze. At this point, I won’t make any money no matter what happens
Long and short at the same time, lol.
The Fed will be running short on ammunition if it goes 75 bps. And whither the dollar if they do?
Dunno. Personally I work in the very short term.
Dude, where’s my January effect?
Seems a reasonable bet to me that there are people out there ready to buy the dip and provide a boost. I’m solely in longer-term positions now, though, so I’m just going to hold tight and go along for the ride.
And where’s my Santa Claus rally, for that matter?
Santa got forclosed on his mortgage
The 10-yr and 30-yr T-bond yields were flatlined from noon on. This IMO is prima facie evidence of price targeting by the man behind the curtain. Many market participants will naturally assume that this is a sign that all the day’s bad news was priced into the yields, but I am skeptical — why would price movement go horizontal and stay there on a day when one would expect higher-than-normal volatility? I am not sure whether this sort of intervention occurred pre-1988, but I have serious doubts.
http://en.wikipedia.org/wiki/Working_Group_on_Financial_Markets
Dire jobless figures fuel fears of US recession
· Upbeat White House tries to talk up economy
· Oil price falls back from record highs
Larry Elliott, economics editor
The Guardian, Saturday January 5 2008
President Bush sought last night to boost confidence in the flagging US economy after a virtual stalling of the country’s job-creation machine triggered fresh fears that the world’s biggest economy is on course for recession in 2008.
Amid signs that the spreading malaise from the plunging US housing market will dominate this year’s presidential election, Bush held talks with the country’s two leading economic policymakers - Ben Bernanke, chairman of the Federal Reserve, and Hank Paulson, the Treasury secretary, at a meeting of the President’s Working Group on Financial Markets. The working group, originally set up by Ronald Reagan after the 1987 stockmarket crash, discussed ways of boosting growth .
http://www.guardian.co.uk/business/2008/jan/05/oil.useconomy
Down 119 at open….where is my reserve chute?
13,000 . . . it was nice knowing ya
The Kohn-Heads are coming!
Fed Vice Chairman Donald Kohn will be speaking about the economy at 11:15 ET.� On Nov. 28, the S&P 500 surged more than 2.8% after Kohn hinted at a Dec. 11 rate cut during a speech.
Will be interesting to see what kind of effect Kohn has today since the market is in a different position today (just a bit oversold on a down wave) vs. where it was on November 28th (just completed a major oversold position on Nov. 26th and beginning an up wave). Also the FOMC meeting was much closer on November 28th.
I’m getting real short term bullish here and getting longer
(still have the spring puts though)
I just took some profits on SKF to be safe. I’ve already “lost” a few bucks not having that position anymore. If Kohn doesn’t spark a rally, I’ll jump back in and treat the price difference and commissions as an insurance policy.
“I’ve already “lost” a few bucks not having that position anymore.”
I sold out of SRS yesterday to take profits. Regret sucks.
Regret sucks, but greed is even worse
Agreed Brian, that’s why I got out of SLW @ 19 flat. I KNEW after the couple of days it had, it’d correct, regardless of the fact that it happened to get a downgrade the morning after I sold.
The PTB are in panic mode today with a Kohn speach, Kudblow pulling afternoon CNBS duty, and plans to wheel out the Shrub for a meeting with Skeletor and the PPT at 1 pm Eastern. Stay tuned. Rumors of Scooby Doo to put in an appearance between 3 and 4 pm.
Imagine this meeting of the minds?
Tweedles: Dumb, Fee & Numb
“Mr. Bush plans to meet Friday with his working group on financial markets, a panel that includes Treasury Secretary Henry M. Paulson Jr. and Ben S. Bernanke, the chairman of the Federal Reserve.”
http://www.nytimes.com/2008/01/04/washington/04bush.html?_r=1&oref=slogin
Oh, to be a fly on the wall @ that meeting…
THe PTB are in a panic mode. PTB?
PTB Part Time Basis
PTB Partial Test Ban (nuclear weapons)
PTB Partido Trabalhista Brasileiro (Brazilian Labor Party)
PTB Pass The Buck
PTB Patellar Tendon Bearing
PtB Paul the Bankie (Scottish football fan)
PTB Peer Transaction Bus
PTB Penn Treebank
PTB Personal Touch Banking
PTB Petersburg, Virginia (airport code)
PTB Phosphotyrosine-Binding
PTB Physikalisch Technische Bundesanstalt (Germany)
PTB Place to Be
PTB Please Text Back
PTB Portland Trail Blazers
PTB Portuguese Brazilian (language)
PTB Pounds Per Thousand Barrels
PTB Power Turbine Balance
PTB Powers That Be
PTB Pre-Term Birth
PTB Prevent the Bite (dog bite prevention program)
PTB Program Time Base
PTB Protective Technology Branch
PTB Proto-Tibeto-Burman (languages)
PTB Ptahhotep’s Team Balancer (Counter-Strike)
PTB Pulmonary Tuberculosis
PTB Puro Tango Blast (Texas street/prison gang)
PTB Push the Button
What does anyone think of SCC now that the consumer appears to be tapped out. I am thinking of waiting for the short term ‘bull’ to buy but not sure the bull rally is ‘in the bag’
PTB = Powers That Be. Left off the “T” as in “The Powers That Be”.
I booked my profits in QID… can’t bet against Txchick.
It could go either way. So far, we are still holding above the Nov. low of 1407.
If one of the unwritten and undisclosed goals of the MSM has been to minimalise the economic import of the housing bubble bursting, maybe they have succeeded. How can anyone be surprised at the jobs report? How can anyone not think this country will have at least 4 quarters of negative growth? To use an analogy, cutting off the EZ credit to propel RE prices ever skyward has been like cutting the heart out of the patient! The U.S.A. has been a F.I.R.E. economy since the dot-com bust, and many, many economic units used MEW $$$ to finance anything larger than a I-pod purchase. That is done and over with! If people want to pretend the economy will somehow just be “allright”, they are delusional.
This will be the hardest crash since the Great Depression, and should likely be known as the New Depression. Be prepared for it, is my message. Without a heart or a heartbeat, this economy will convulse and die and then decompose. The MSM is only reporting that the body is still warm but cooling off, not to worry.
OK, don’t worry, but be prepared.
Yes and I’m real surprised they’re not using it as more of a hammer to beat Bush upside the head with. Is it only a matter of time?
I agree with what you and others have said on the blog - that things will be really bad. Yet, on the other hand, I see people still shopping like there is no end!
I went to Santa Monica, CA for the holidays; went to the different shopping areas - just to look; they were packed. Yes, a lot of the shoppers were Europeans; but still, I saw a lot of women walking with bags from different stores.
Spent the new year’s in Marina Del Rey, CA; saw plenty of the folks that live in those $700K+ condos off the marina.
I know some people have good paying jobs; folks who work for the local and stat govt. jobs, folks in the field of education - college professors, administrators.
Personally, I am afraid to spend any money (except on food and other essential bills) because I know it will get really bad.
I work in the software industry and they are constantly bringing in folks on H-1 and L-1 visas. Every day, I am aware that I could lose my job.
So when I see the malls crowded, I just don’t see why.
I have a question about the payroll creation employment number:
Does this number include the creation / elimination of people whom work on commissions or as subcontractors. A lot of people from real estate agents, mortgage brokers, construction workers are employed on a “paid by job basis” instead of getting a weekly paycheck.
It somewhat common for a real estate agent not to actually get fired but to simply not have enough work to constitute a full time job. Same is true of a home construction inspector. It’s also somewhat common for a laborer to have his hours cut back enough to justify that he simply take another job somewhere else. Technically, these people are not laid off but they really don;t have jobs in a 40-hour a week sense.
So, how are these people counted in the payroll statistics???
scrutinize:
WASHINGTON (AP) — The securities industry’s self-policing organization has sent a detailed request for data and documents to more than a dozen Wall Street investment firms as part of an inquiry into sales of complicated mortgage products to senior citizens.
While complex mortgage securities that suffered massive losses last year typically were bought by large, global institutional investors, the Financial Industry Regulatory Authority is focusing on the sale of those investments to individuals, especially retirees.
http://tinyurl.com/2yd6tg
office space:
A sluggish economy, credit crunch and rampant construction took their toll on San Diego’s commercial real estate market in the fourth quarter, with office vacancies spiking to their highest level since 1996.
http://tinyurl.com/28vjgn
Lots of comm vacancies on the Hwy 111 through Palm Desert.
And the 111 corridor is high traffic, high visibility. So, why all the vacancies?
And still not enough T-Shirt stores to fill in the empty storefronts on Palm Cnyn in Palm Springs.
I am curious. Is there a way to track the California commerical real estate market over the last five years? I have hunted around on the web a bit and can’t find any useful stats. Thanks.
inflation:
Jan. 4 (Bloomberg) — European inflation stayed at the highest in more than six years in December as food and energy costs soared, heightening concern among central-bank policy makers that rising prices will fuel bigger wage increases.
The inflation rate in the euro area was 3.1 percent, unchanged from November and the highest since May 2001, the European Union’s statistics office in Luxembourg said today. The rate has never been higher since the launch of the euro in 1999.
http://tinyurl.com/2y93g4
http://www.bankrate.com/brm/news/mortgages/mortgage_update.asp
Holden Lews:
What’s in my crystal ball for 2008? Falling house prices, rising foreclosures and a presidential election will collide. It’ll probably be ugly.
To be more specific: House prices and home sales are going to fall faster and deeper than most observers expect. Through most of 2007, a few housing markets — Charlotte, Dallas, Seattle and Portland, Ore. — saw climbing prices, while most other urban markets had declining prices. But Seattle and Dallas turned in October or November, and Portland is likely to follow. This is a national downturn.
The National Association of Realtors is fond of saying that prices aren’t falling everywhere. That’s true. But prices are falling in the big metro areas, where most of us live. The Mortgage Bankers Association likes to say that the foreclosure rate isn’t so bad if you exclude California, Florida, Ohio, Michigan, Indiana, Arizona and Nevada. Yes, those are just 14 percent of the states, but 3 in 10 Americans live in those states. When you have a foreclosure crisis in four of the eight biggest states, you have a problem.
Prices are going to keep falling in 2008, and that’s going to reinforce a self-sustaining cycle of stricter underwriting, slower home sales and lower prices. Realtors and other cheerleaders will declare numerous times that housing has hit bottom, and they’ll be wrong every time. Nationally, housing won’t hit bottom in 2008.
Lots of ordinary Americans — the same folks who quit their jobs in 1999 to try to make a living at day trading — will try to make a living at investing in foreclosures.
It’s hard to get a mortgage with less than 5 percent down. Later this year, it will be hard to find a mortgage wth less than 10 percent down. The exception will be mortgages insured by the Federal Housing Administration. People will clamor for FHA-insured loans with 3 percent down. The FHA won’t be able to handle the demand, and purchase deals will go bust when loans can’t close on time because of FHA delays.
The Democratic presidential nominee will wade into this mess first, demanding investigations into dumb lending practices, dishonest appraisals and FHA delays. At first, the Republican nominee will say that the foreclosure crisis demonstrates that the market is efficient, and will point to the FHA’s problems as evidence that the government can never do anything right. Driven by polls, the Republican nominee will change his tune, blaming the foreclosure crisis on illegal immigrants and pledging to privatize the FHA.
Don’t even think about getting a low-documentation mortgage in 2008. Bring your W-2s and tax returns and bank statements.
I’m rarely correct when I predict mortgage rates, so view this forecast even more skeptically than the above soothsayings: Rates will be higher in 2008 than they were in 2007, even if there’s a recession, because mortgage investors will demand compensation for their risks.
In 2007, the average rate on a 30-year fixed was 6.4 percent. The average in 2008 will be higher. The median rate in 2007 — half the time it was higher — was 6.32 percent; the median in 2008 will be higher.
Jumbo rates will remain stubbornly elevated.
A year from now, one group will stand supreme. These people will be smug. At work, you’ll be able to identify them by their coffee mugs emblazoned with the words: “I told you so.” They will wax lyrical about the joys of not having to do yardwork and not having to pay to replace a broken air conditioning compressor. I’m talking about renters, and especially about renters who could have bought, but wisely chose not to.
Renters will be the winners of 2008.
Nice article. Sweet vindication.
He could have as easily said: …filled with whining renters stories of the foreclosure of their landlords causing them to make the disruption of a move through no fault of their own.
Love that article. Holden Lewis used to post here from time to time, but some of the HBB posters got a bit too snarky (and downright mean) and chased him off.
Too bad, because a number of really good contributors came here and ended up receiving very abusive treatment from some people.
Holden was on this early on, and I wish him the very best!
Today’s heavily-advertised (on DC sports talk radio, at least) - realeasyprofits dot com (not going to put in link and help them improve search results). Takes you to something called peiuniversity - radio ads claim they can help you make big profits buying foreclosed real estate — but, of course, the site wants a bunch of personal/contact info first.
I get frustrated thinking these a-holes are probably making money off the financially less-spohisticated.
Just picking up on something from yesterday’s Bits Bucket about getting into the Taj Mahal.
Maybe I’m missing some deep, big-power-cultural-imperative here, but why the heck would anyone ever assume in the first place that you can pay an entrance fee in India using US Currency (as distinct from a credit card)?
When an Indian tourist rolls up to the Grand Canyon or Yosemite, are they allowed to pay in Rupees? I think not.
Note that they don’t accept Euros, either.
That whole pay in USD thing went out in the late 90’s in Russia but you still get some people coming over here trying to pay in dollars and packing a few pairs of Levis in their baggage to trade.
Word up: If you are coming to Russia don’t forget to bring Benjamin. Make sure he is crisp and clean with no tats. Leave George and Abe at home. You will be able to exchange Benjamin for Rubles at any of the hundreds of exchange points across Moscow and at any bank in Russia.
True in all of Latin America as well: once you get your stack of 100s, go through them one by one and exchange all marked, torn, or overly worn bills for new ones - is usually about 1/3 of total at most banks.
Can’t wait for the new fancy hundreds coming. Asian money changers are supposed to scorn 1993 hundred dollar bills (IIRC. more counterfeits of that year?)
Trying to confirm my memory of the anti-1993 predjudice, found this article from today. It seems that new bill fears are flailing the hoarders market in Russia. Lots of interesting psychological stuff goes on in the black markets.
——–
http://query.nytimes.com/gst/fullpage.html?res=9A02E0D61639F937A35752C1A963958260&sec=&spon=&pagewanted=all
Russians in a Panic Over New Currency: The U.S. $100 Bill
It is unlikely that most Americans will pay much attention when the United States Treasury introduces a redesigned $100 bill in January. The old bill will still be accepted everywhere of course, and it’s not exactly as if hundred-dollar notes are the coin of the realm.
But things couldn’t be more different here, because Russians are completely obsessed with C-notes. They covet, hoard and trade them more than in any country other than America itself.
Rats. The dang NYT fooled me again. Tiny 1995 date on the article, under their large today’s date in the header.
At this rate we will soon need a Reagan ($1000 bill).
At this rate, we will soon need a Reaqan ($1000 bill).
(I’m trying to game the filter here)
When the Soviet Union fell apart in the late 80’s, an unusual item came out of the wreckage…
Decent quantities of pre-1929 larger sized USA Gold Certificate Banknotes started coming back to America, many thousands of them.
These banknotes lost their Gold backing in 1933, but kept their face value, and all of them are collector items, worth much more than stated face value.
Interesting. Can you give a link of where those might be sold? I may have to pick one up.
This was in the early 1990’s, and the notes have been well dispersed now…
I once bought a lot of 60 1922 $100 Gold Certificates from a Russian. All in average circulated condition.
There is no shortage of Dollars, Euros, or Roubles at the many ATMs around the cities. They commonly charge .5 percent of the withdrawl amount plus what your bank charges you.
Mixed messages re: Maine foreclosures (from the Lincoln County news)…
http://tinyurl.com/2kcwxy
kool-aid in california:
A building industry trade group predicted the state’s housing production slump will bottom out this year, a report met with heavy skepticism by several economists.
In a forecast released Thursday, the California Building Industry Association said developers will secure permits for 128,400 single-family and multifamily units this year, up from an estimated 116,250 in 2007. The 10 percent gain would stand in sharp contrast to the 29 and 21 percent drops in housing permits in 2007 and 2006, respectively.
http://tinyurl.com/27wb2d
auction:
MEMPHIS, Tenn., Jan. 3 /PRNewswire-USNewswire/ — America’s housing boom once overflowing with double digit price appreciations has soured into a stagnate market hobbled by persistent price declines and foreclosures. But for buyers priced out of the market during the boom years, the current housing slump is an opportunity to find bargains. Over 150 foreclosed (bank-owned) Tennessee homes will be auctioned by Hudson & Marshall, America’s largest foreclosed real estate auction firm, on January 12th-16th in various cities throughout the state. Nearly 100 homes are located in Memphis alone
http://www.earthtimes.org/articles/show/news_press_release,249471.shtml
taxpayers on the hook?
They don’t know it, but taxpayers stand to lose billions as the housing bubble bursts. And in a bipartisan effort to “do something” to save the housing market, President Bush and the Democratic Congress appear set to put taxpayers on the hook for billions more.
Until now, losses in the housing world have been confined to homeowners, mortgage lenders, banks and investors in toxic mortgage securities. But by virtue of the implicit federal guarantee backing mortgage giants Fannie Mae and Freddie Mac, U.S. taxpayers may be one of the largest mortgage lenders in the world - set to lose billions, like all the others.
http://tinyurl.com/27s7my
from the ministry of truth, the big lie:
NEW YORK, Jan 4 (Reuters) - U.S. inflation pressures
reached a 31 month-low in December due mostly to
disinflationary moves in measures of commodity prices, loans,
jobs and interest rates, a report said on Friday, paving the
way to further interest rate cuts by the U.S. Federal
Reserve.
http://www.reuters.com/article/marketsNews/idUKNAT00357920080104?rpc=44
Luckily for the Fed, food and energy are not part of the inflation equation…
REVIEW & OUTLOOK
Oil and the Dollar
January 4, 2008; Page A10
http://online.wsj.com/article/SB119941453085566759.html?mod=googlenews_wsj
That’s exactly how I feel about the gov’ts economy related numbers: its 1984. I can’t wait for the 5g increase in the chocolate ration.
Bed Bath & Beyond Warns on Profit; Shares Plunge- i was in this store the day before xmas. the shelves were loaded with merchandise. anyone?
Just another superflous store that rode the housing bubble. Bye Bye BBBB.
BB&B is going to be badly hurt in this downturn. A huge percentage of their stock is stuff that people want but don’t need. At BB&B you can get the inexpensive versions of various home related items (kitchen gadgets, bathroom stuff, sheets, cleaning supplies, etc.), but the mid-price stuff is sitting right next to it and with your 20% off coupon (they ignore the expiration dates) I bet a lot of people trade up even if they can’t really afford it. With that business model, it makes a lot of sense for them to take a huge hit.
That being said, there is one very near my apartment and I go there regularly for all sorts of stuff: bar stools, travel size toiletries, hair dryer, wedding and engagement presents (they allow the 20% off coupons in all deparments), toilet plunger, cookie sheets, etc.
They even gave me an extra discount on the toilet plunger when it was an emergency. My father clogged the toilet late on a weekend. I ran over to the store with a twenty looking for a very basic model and they only had nice ones with special “hide the plunger” cases included. I asked a manager where the cheap ones were. He told me to pick any brand I wanted, walked me over to the register and told the girl to ring it up below the marked price. I appreciated the customer service, but good service won’t help if their customers can’t afford to buy the high margin items.
A kitchen-aid mixer in every house!
Once reality sets in its going to be pretty hard to sell those fancy Circulon pots and pans.
Another brand that I think will be hurting is CutCo knives. They make great stuff (we have some), but its expensive. I must have been getting a promo email from them 2-3 times in December. Didn’t buy anything this time.
I will be buying this brand new unused stuff on evay. Not gonna take it on the chin over shipping either.
Similar notion occured to me was that all the STUFF will be in garage sales, Craigs,estate sales and pennysavrs all across the nation for cheap.
75 yr old mom, BD today! said she wanted a smaller tv (note original one is 20yrs old and HUGE) by summer time. I said, probably no problemo with craigs/garage etc coming up. Pretty cheap times for stuff we might “need”. And the tv isn’t needed, so much as the GOV allowed the new law to pass and lots of fixed income,seniors who can’t afford new tvs will have to buy a thingy to address the channel receptions. And not enough coupons for a discount for seniors to be had.
What corp cronie got that deal?
Same as the Passport change in early 07. ALL people from newborns “Must have” a legal new passport to travel.
Well, LEGALLY, only people crossing borders, huge masses of water, and that doesn’t include Detroit to Minneapolis either, just the countries not US.
So, the back up for getting a new passport that cost families $100.s of dollars as well, was ridiculous.But you Know, some cronie got the deal for all the new passport printing etc and the Security strip in the PP.
A sweet gov no bid contract, for sure.
rant off.
BD today! said she wanted a smaller tv (note original one is 20yrs old and HUGE) by summer time.
gotta be digital or it’ll be NG in ‘09
Should have bought the passport in the year or two before the rules changed. They last 15 years you know…
We bought our Dyson vacuum there with the 20% off coupon - worth every penny if you have lots of carpet. Talked one couple out of buying one because they only had carpet in two little used rooms in their house. The whole chi chi bedding craze will go down the tubes with the housing craze. Tired of everyone wanting their bedroom to be like a so called high end hotel and their bath like some swanky spa.
You don’t really need a plunger. Just fill up a big bucket with water, and try to pour water as fast as you can without overflowing. (Repeat two or three times if you have to, wait for water to recede after each attempt.)
(The plunger manufacturers of China r gonna hate me.)
Maybe more Raisin Bran and a courtesy flush from Dad would help too.
You know, I wanted to be angry at Dad, but I couldn’t. S*** happens sometimes - this time it was literal. And the toilet is a somewhat fussy low flush version - maybe more medium flush.
And thanks, everyone, for the other ideas, but now I own the plunger, I’ll just keep using it.
Use hot water. Will take care of the problem.
vinegar as well.
The retail model of charging 2-3 X in a fru-fru store for what perfectly serviceable competitors (here, Target) charge is fracked. Who wants to pay $39.99 for a generic tablecloth made in China? Their problem is simple - prices are too high.
Forget oil, the new global crisis is food
“The greatest challenge to the world is not US$100 oil; it’s getting enough food so that the new middle class can eat the way our middle class does, and that means we’ve got to expand food output dramatically,” he said.”
“The impact of tighter food supply is already evident in raw food prices, which have risen 22% in the past year.”
“Mr. Coxe said in an interview that this surge would begin to show in the prices of consumer foods in the next six months. Consumers already paid 6.5% more for food in the past year.”
“Wheat prices alone have risen 92% in the past year, and yesterday closed at US$9.45 a bushel on the Chicago Board of Trade.”
“At the centre of the imminent food catastrophe is corn - the main staple of the ethanol industry. The price of corn has risen about 44% over the past 15 months, closing at US$4.66 a bushel on the CBOT yesterday - its best finish since June 1996.”
http://www.financialpost.com/story.html?id=213343
Yeah, its kind of hard to raise food production overnight. Cows take time to breed and grow into adulthood.
Of course, now there is no excuse for corporate welfare for agribusiness in the US. They should be able to sell everything they raise and grow for top dollar on the global market.
Hey aladinsane!
Speaking of food/agriculture - how’s that drought theory you’ve been promulgating look right now?
http://img.snow-forecast.com/images2/ncalsnownext3days.44c7.jpg
It was all predicated on this winter being as bad as last winter, and i’m thankful that these storms are coming through, and we’ll need more of them, to be out of harm’s way, water-wise.
My skis are waxed and ready the hit the backcountry, about 4 days after the last snow hits. They didn’t get much use last year.
Yeah, I’ve been listening to the news, and it seems that places like Truckee are getting up 12 FOOT of snow over the weekend!
Not much use in the short-term, but it’ll be great for CA come the spring thaw.
BTW - just started raining here in the San Fernando Valley - my cats are more interested in climbing in my lap than going outside - always a good indicator of [rappy weather on the way.
sf jack..
From the San Jose Mercury News:
“What would you do if you were told to prepare for a 75 percent cut in water deliveries next year?”
“That’s essentially what the state Department of Water Resources told water agencies last month when it announced an initial supply forecast of just 25 percent for 2008. Water managers knew this would be a tough year for water deliveries, with court-ordered cutbacks, drought conditions and climate change all creating problems for the state’s water system. But few expected the state’s initial forecast to be so low.”
“Despite this weekend’s storms, water supplies are critically low. And, although there has been intense media coverage and attention by the governor and legislators, it has been difficult to get the public to focus on the state’s water problems. In the fall, a statewide coalition of 450 public water agencies decided to launch a public education program to inform people about critical challenges now confronting the state’s water supply and delivery system. The good news is that the education program is working - the public is beginning to understand not only the variety of issues facing the state, but the severity of the problem as well.”
http://www.mercurynews.com/ci_7879248?source=rss&nclick_check=1
It’s a good thing the American middle class has been “storing” food energy to get them through this.
diets enforced economically.
Went to the Republican caucus last night. The turnout was higher than they anticipated. This was in Council Bluffs, Pottawattamie county. I am district 11, and they combined 5 districts at Iowa School for the Deaf. There was very strong support for each candidate except for Rudy. In my district, Mike came in first with 24, Ron with 13, Fred with 11, John with 10, and Mitt with 6 and Rudy with 2 (my district is small, there were probably 1,000 plus at this event). A couple of things were noticeable. Ron’s audience were young, Mitt’s were elderly, Fred’s were veterans, and Rudy’s was tiny. The only candidate that seemed to have mass appeal (as showed by results statewide) was Mike Huckabee. Another thing to note: each candidate had a speaker who was prominent, except for Ron and Rudy. The others had governors, business people, and retired state department employees. I forget who had who. Though it is a shame that Ron Paul did not get more votes, I am happy that he had SOME.
My DH used to be a political operative in Ill. He was stunned by the turnout in Iowa. All last night and this morning he was muttering under breath about wanting fresh polling data - some habits die hard.
I also told him if he touches CA politics, he’s getting a divorce >; )
It just boggles a mind that sleeping fred would have that many ‘fredheads’. The guy is a bad actor for petesake.
And “Rudy’s was tiny”…
not touching that one.
thanks for the info.
–
“With the [index] falling to a 31-month low, inflation pressures should not be a serious concern,” ECRI Managing Director Lakshman Achuthan noted in a press release.
Let us see how my forecast of outright CPI deflation at the end of 2008Q3 develops. This assumes that the US economy is already in recession and it should enter depression in 2008Q4, led by housing price decline of 10-15% annual rate from the Dec’07 level.
Jas
-x-x-x-x-x-x-x-
ECRI US Inflation Gauge 117.1 In Dec Vs 119.8 In Nov
Fri, Jan 4 2008, 14:40 GMT
http://www.djnewswires.com/eu
ECRI US Inflation Gauge 117.1 In Dec Vs 119.8 In Nov
NEW YORK (Dow Jones)–An index designed to anticipate cyclical turning points in inflation fell close to a three-year low in December, to 117.1 from 119.8 in November, the Economic Cycle Research Institute said Friday.
The smoothed annualized growth rate of the index also dropped heavily, to -4.6% in December from -0.7% the previous month.
The institute attributed the declines to gentler moves in commodity prices, loans, jobs and interest rates.
“With the [index] falling to a 31-month low, inflation pressures should not be a serious concern,” ECRI Managing Director Lakshman Achuthan noted in a press release.
Why would the government miss a God-given opportunity of deflation to re-inflate the economy by doing the following:
1. reducing interest rates to zero or thereabouts
2. bailing out everyone, except the savers
3. increasing spending on useless programs (and maybe even some useful ones)
In fact, in the deflation scenario you predict, the government would be perceived as being amiss if they were to not do 1, 2 and 3.
Deflation will be gamed by the government to suit their interests. Damn the USD, it’s already taken one in the groin and honestly at this point in time I don’t think it is any weaker than its counterparts in terms of purchasing power. Damn gold/commodities, they have already gone up and can’t go any higher in a recessionary period.
To all you deflationists out there - I would love to see your predictions come true, but all signs point to that not happening. Deflation = credit contraction, which means that banks should all be falling over each other to give me, the saver, the best of interest rates. They sure aren’t doing that, and with the Fed loosening yet again they will not be. Where am I wrong?
“Deflation = credit contraction, which means that banks should all be falling over each other to give me, the saver, the best of interest rates. They sure aren’t doing that, and with the Fed loosening yet again they will not be. Where am I wrong?”
This is a hard concept for most Americans to accept however I would think of it more along the lines of there is money around however there is no demand for money because nobody knows how to use it or wants to take the money due to demand destruction therefore the interest rates fall.
You’re right it’s a hard concept because:
1. credit contraction to me implies that there is demand for money - if no demand, why would there be a contraction?
2. you assume that people are not debtors - may be true in Japan but j6p needs to borrow money for everything right?
Now if the government forgives j6p’s debts and j6p becomes a financially responsible adult not needing debt (and heaven forgive, starts saving) then we will be in the situation you describe.
Even with deflation, not all purchases can be deferred - examples being medical procedures and college tuition. Some would argue that a home purchase is hard for the j6p family to put off. So there is indeed a steady demand for debt.
The short answer that addresses both point 1 and point 2 above is that individuals and organizations that previously qualified for credit cannot make the grade when lending standards and qualifications tighten considerably and are therefore excluded from the demand pool although interests rates are low.
MarketTicker has a good explanation of deflation=credit destruction.
I would love it if Ben could arrange a round table with Denniger, Peter Schiff and himself.
Between the three of them I am hoping to figure out what to do.
it wont be decided by three:
check on:
Roubini
Mish
Tanta
black swan
london banker
chick’s always got somethin to say
HOZ I KNOW YOU LURK COME BACK HOME!
–
“In fact, in the deflation scenario you predict, the government would be perceived as being amiss if they were to not do 1, 2 and 3.”
And the Japanese govt. did all three!
Households and small businesses that want to borrow wouldn’t get the money. Money will sit in the banks or used for speculation by hedge funds, etc., but not come into real economy for spending, i.e., “aggregate demand” will go down and remain down for a very long time. Even tax cuts to households will go into savings! I know that it is hard to believe.
Jas
It is hard for me to believe the Fed would not already have financially engineered a plan to obviate your gloomy prognosis.
P.S.
To A Mouse, On Turning Her Up In Her Nest With The Plough
(1785)
…
But, Mousie, thou art no thy lane,
In proving foresight may be vain;
The best-laid schemes o’ mice an ‘men
Gang aft agley,
An’lea’e us nought but grief an’ pain,
For promis’d joy!
http://www.robertburns.org/works/75.shtml
The future is bright, according to the white house.
http://www.reuters.com/article/marketsNews/idUKN0430111320080104?rpc=44
Anybody catch the big meeting with Bush and the PPT on CNBS? If you missed it I got a transcript below:
Bush: “gonna git together wit congress. discuss solutins. maybe eat some corn. i like mine creamed. some like ‘em kerneled. some folks autta pay taxes. gonna talk about being better conservers of money. that colored feller’s workin on the Hope.”
LOL! You make him sound far more erudite than he really is.
I actually can’t listen to him for more than 5 seconds without wanting to throw my remote at the TV and scream obscenities.
I’ll wait until a transcript comes along, or someone on the news parses it for me…
Funny, though I have heard far better vocal imitations…
http://economist.com/daily/kallery/displaystory.cfm?story_id=8857324
popper, your killin me
Don’t think of it as a stock market correction — think of it as an opportunity to buy the dip.
January 4, 2008 2:55 P.M.EST
BULLETIN
Bears dancing on jobs data
Stock indexes take a turn for the worse after U.S. nonfarm-payrolls data are released. Treasurys rally as the dollar tanks against its rivals.
If we keep going down Monday, I’ll believe it. I got stopped out in record time this a.m. trying to go long the Nasdaq.
Friday humor……….David Lerah.
The whole post is interesting and well worth the read, but this part is most on topic:
“The NAR is simply not an entity to be taken too seriously, due to the obvious conflict of interest exemplified by their ex-economist, David Lereah, who published some of the most absurd BS I have ever seen come from a nationally reknowned organization. Examples of his work from Wikipedia: Are You Missing the Real Estate Boom?: Why Home Values and Other Real Estate Investments Will Climb Through The End of The Decade And How to Profit From Them was published in February 2005 at just about the tippy top of the bubble (that takes some talent). One year later in February 2006, as the market is already on it’s way down, Lereah retitled his book Why the Real Estate Boom Will Not Bust and How You Can Profit from It. Lereah’s previous book The Rules for Growing Rich: Making Money in the New Information Economy touting investment in technology company equities was published in June 2000 at the onset of the collapse of the dot-com bubble. This extreme cheerleading has died down substantially, but the overly optimistic spin is still evident with their new economist, Lawrence Yun.”
http://seekingalpha.com/article/58989-concerning-the-case-shiller-housing-index
I’m one of those non-verbal engineering types and that made even me wince.
“David Lereah, who published some of the most absurd BS I have ever seen come from a nationally reknowned organization.”
renown: the state or quality of being widely honored and acclaimed
(not reknown)
I hope the author meant “nationally known”, not nationally renowned, anyway!
Not everyone is so enthusiastic about preemptive bailouts as is Prof. Summers. (When assessing his policy recommendations, it is always good to keep in mind that he works for a hedge fund, and thus represents other interests besides the greater good of all Americans.)
America’s economy
Aspirin, not morphine
Jan 3rd 2008
From The Economist print edition
America’s economy will be weak in 2008, but policymakers should dispense the pain-killers with care
…
In a recent speech Mr Summers argued that America risked the worst downturn since the early 1980s. Failing to deal with this, he argued, would be far costlier than loosening policy too much to avert it. If overly loose monetary policy created “undue inflation pressures”, they could be countered at a “moment of much less financial peril”. A “timely”, “temporary” and “targeted” fiscal boost could complement more monetary easing without compromising America’s long-term budget health. This argument hinges on three questions: How vulnerable is the economy? What is the price of overdoing monetary easing? Will politicians design a sensible stimulus package? Each, on closer inspection, argues against rushing to action.
Cold-shower treatment
No one doubts that 2008 will be hard. The combination of a weakening labour market, slipping house prices, tighter credit and higher fuel costs will weigh on domestic spending. The price of oil hit $100 a barrel this week (see article). House prices have fallen by 5% from their peak and by all accounts have far further to go. A pessimistic survey of manufacturing published on January 2nd only deepened the gloom.
And yet, although tumbling house prices and a sharp credit contraction could indeed pull the economy into a noxious downward spiral, the evidence of such an economic disaster is, as yet, slim. The last reading of consumer spending, in November, was surprisingly strong. The stickiness of house prices suggests the drag on consumer spending will be long and grinding, not sudden and sharp. And it is worth remembering that slower domestic spending and higher saving is exactly what America needs to correct its current-account deficit.
Anyway, insuring against calamity can be costly. The last time the Federal Reserve slashed interest rates to shore up the economy, between 2001 and 2003, it sowed the seeds of today’s housing mess. Although a housing and credit collapse would be deflationary, pre-empting that risk too dramatically could be inflationary.
http://economist.com/opinion/displaystory.cfm?story_id=10430273
Just put together year-end stats for our building department here in the rural mountains of Colorado. Total building and renovation valuation is down 38% in Town and about half in the County. New construction in the county in 2007 was about 15% of what it was in 2006.
Well, we held above the Nov. low of 1407 but suspect we’ll gap under it Monday a.m. But still, we have never had follow through on a Monday following a Friday like this since ‘87. Maybe this is the time.
Maybe not, as it is different now.
http://en.wikipedia.org/wiki/Working_Group_on_Financial_Markets
Well, I hate to admit it but I was around in ‘87. It should be interesting.
So was I. My point is that I suspect the PPT has safeguards in place to prevent the long weekend of hand wringing after a Friday selloff from mushrooming into a replay of Black Monday. In fact, I expect by Sunday afternoon the Marketwatch.com home page will be confidently forecasting a higher open on Monday, with some reassurance that Friday’s selloff is a fading memory.
You’ve seen that movie too? LOL.
The most bullish thing that could happen is a big gap down. That could put the bottom in. Short term bottom that is.
I expect Monday to be the last red day of this current down wave myself and it may only be down for the first half of the day.
I’m going to attempt long positions again on Monday. My puts are way way up and I should sell them but I’m afraid of not being able to get them back at the same prices.
Expect a major policy announcement on tax cuts next week, followed by a surprising rebound on the headline U.S. stock market indexes…
http://ap.google.com/article/ALeqM5heWSF9tlVbX2wAVCi7sLAxTfo2hAD8TVBGSO0
we’ll see what Australia, Japan, and SWF of China has to offer Sunday night……..
I expect poor conditions rolling in….Europe will be flat at best… this helps the bull case. Expect Futures to be strong, but will sell off during the day…an annnouncment of some such, wont mean anything.
What am I looking for?
high volume down…after the open. pushing and shoving.
oil back to 100, gold surging…
consumer staples…..stronger.
CRE weak….no news.
long end of treasuries should start to push and shove as the bond vigilantes return……
help me Obi Wan, Your our only hope.
http://www.santacruzsentinel.com/story.php?sid=64616&storySection=Business
“Becker: In California, we need 250,000 homes a year, and we produce 200,000 so demand outstrips supply.”
That just ignores that sales are 40% down (reflecting the actual demand). He reminds me on Bagdad Bob.
Also ignores that the 200,000 or so produced are only affordable to less that 10 percent of the populace, at least based on recent seller wishing prices.
Not able to post anymore. Ummm