Bits Bucket And Craigslist Finds For January 19, 2008
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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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Cramer Rages on Banks: ‘Where’s the SEC?!’
“Jamming”……….Wall street fraud?
Please listen to this video carefully and then tell me that Wall Street (and Cramer for that matter) were not involved in fraud.
http://www.cnbc.com/id/22706231
cmon cramer? fraud? no way (rolls eyes)
he is a buffoon and as the market makes it way downward maybe so will his ratings and he will go off into obscurity
will j6p watch this idiot with no heloc $$ to invest or his cfc stock in the toilet that cramer told him to buy in the 30’s?
http://www.nj.com/news/index.ssf/2008/01/mortgage_firm_exec_jumps_to_de.html
Mortgage firm exec jumps to death; wife’s body found home
by The Associated Press
Friday January 18, 2008, 7:17 PM
A high-ranking executive of a collapsed subprime mortgage lender jumped to his death from the Delaware Memorial Bridge on Friday, shortly after his wife’s body was found inside their Burlington County home, authorities said.
The deaths of Walter Buczynski, 59, and his wife, Marci, 37 — the parents of two boys — were being investigated as a murder-suicide, according to the Burlington County Prosecutor’s Office.
Prosecutor Robert Bernardi said Evesham Township police went to the couple’s home in the Marlton section of the township around noon after a male caller asked them to check on Marci Buczynski’s welfare. Her body was found in a bedroom.
Authorities would not provide further details on her death, saying only that she was pronounced dead at the scene and that an autopsy would be performed sometime Saturday by the county medical examiner’s office.
About 20 minutes after her body was found, officers from the Delaware River and Bay Authority Police Department received reports that a man — later identified as Walter Buczynski — had parked his car on the bridge and jumped from the span.
Crews continued to search for his body Friday night.
Bernardi said a motive for the murder-suicide was not immediately clear. The couple’s children were being cared for by family members, Bernardi said.
Walter Buczynski was vice president of Columbia, Md.-based Fieldstone Mortgage, a high-flying subprime mortgage lender that made $5.5 billion in mortgage loans and employed about 1,000 people as late as 2006.
Some people care too damn much about money and reputation. What about that guy’s poor kids?
Gotta feel bad for the kids.
Looks like Marci found a rich “older” husband.
RE: Looks like Marci found a rich “older” husband.
And then when the dough ran out for the Benz and health spa visits she told him she’d been havin’ an affair with one of this 25YO employee’s and she was outta there.
I have no empathy for any of these people.
‘And then when the dough ran out for the Benz and health spa visits she told him she’d been havin’ an affair with one of this 25YO employee’s and she was outta there.
I have no empathy for any of these people. ”
This is too much… we are talking about a deceased person here. Please show some respect for the deceased’s family.
RE: I have no empathy for any of these people. ”
This is too much… we are talking about a deceased person here. Please show some respect for the deceased’s family.
SEE BELOW…
“Considering I’m a former employee of Fieldstone Mortgage..he deserved to go to hell with the policies he helped create to screw over consumers in every way possible. He was a crude backstabber where favoritism ran supreme. ”
“This is too much… we are talking about a deceased person here. Please show some respect for the deceased’s family.”
Welcome to the Bits Bucket!
Looks like a case of a high-flier who bagged himself a trophey wife when times were good, but couldn’t hang on to her once his fortunes hit the skids. He probably snapped in the face of failure (and probable verbal and emotional abuse from the wife who saw her gravy train run off the rails). Awful and sad, but not unexpected - in all probability, their moral ruin was complete years before the financial train wreck played out.
“in all probability their moral ruin was complete years before the financial train wreck played out.” Fitzgerald? if not it should be good job!
I mean the murder victim in this case, the wife. So she married a rich older guy, but does that justify her getting shot? The husband/ex-mortgage broker is the shooter and is the criminal. The worst part are the surviving kids, now without mother and father.
Would someone please think of the children?
Taking a life in any situation other than legitimate self-defense is never justified, period. Even if the wife was absolutely vile - which we shouldn’t assume - she didn’t deserve what she got. Obviously hubby was a narcisist of the worst sort, to whom nobody but himself mattered - how else could you murder the mother of your children? One only can hope that the kids will end up with someone who loves and wants them, and will raise them to love their parents but not emulate their example.
After the article, there was a comment from one of his employees and another from a loan officer in the area. Sounds like doing business with this guy was pretty nasty.
too bad for their children, but this sounds to me like a first step for a long overdue cleanup process (because the authorities refuse to act) that could take a long time.
In the Netherlands this kind of people arranged a lot of cleanup among themselves in the last few years, with drive-by shootings, mysterious suicides, etc. Certainly a lot more to come there as well when prices and stock values start sliding in Netherlands.
Posted from another website undercomments:
“Considering I’m a former employee of Fieldstone Mortgage..he deserved to go to hell with the policies he helped create to screw over consumers in every way possible. He was a crude backstabber where favoritism ran supreme. ”
THis guy made a living screwing over others lives thru subprimes. It catches up with U eventually. Sounds like a greek tragedy. Better reread Sophocles to get some perspective in these bad times. A life strictly focused on materalism, aquisition of bling, getting ahead of joneses, gettin into a carreer such as the mort-realty business strictly for the money. Look at the age disparity between him and his wife? This was not a marriage of true love: he went for him because of his apparant material ‘Success’ and he wanted a young trophy wife .
He’s 59 years old and I’ll bet he used every penny he ever made living the good life. I doubt he did this because of his corrupt life style, I’ll bet he did it because he was losing his lifestyle.
Agreed, Ghostrider. Guys like this have a win-at-any-cost mentality, to the point where exiting this life is preferable to losing their possessions (and I’m guessing the trophy wife fit into this category, rather than being the love of this guy’s life). He couldn’t handle losing in the game of “grab all you can, any way you can.”
“Look at the age disparity between him and his wife? This was not a marriage of true love: he went for him because of his apparant material ‘Success’ and he wanted a young trophy wife .”
I wonder who she dumped for this mortgage fraudster?
WOW where is Dr Phil………Calling Dr Phil Calling Dr Phil
It staggers the imagination how so many people commit suicide in America, just because they can’t apologize to people.
Unless Mr Buczynski was just about to be arrested by the feds for mortgage fraud.
“Mortgage firm exec jumps to death…”
At least he had the decency to jump.
we don’t know that for sure yet, do we?
sometimes people get a little help with the decision …
Cramer is speaking as if he has no future in TV, and the cat is out of the bag. He gleefully admits to his glory days of corruption.
When the market goes down he’s screwed because he’s a complete momentum player. He loves to recommend stocks that have gone up 100% in the last 6 months. I’m sure he has cost many small fortunes with his very bad recommendations. His timing in sectors and overseas markets is horrendous -just last Tuesday he went on the absurdly overpriced Ag bandwagon in his CNBC afternoon bit - now there’s a quick 20% haircut. He’s always trying to get people to pile into the riskiest stocks at the riskiest times. I honestly don’t see how a guy like that sleeps at night.
BTW, someone was praising Gasparino, but he along with Cramer is intolerable to me - they’re both pushy, arrogant, and inveterate name droppers, constantly reeling off names of wealthy people who they intimate they are intimate with, for no good reason.
Cramer also recommends biotechnology stocks, which has a history of way-overpromising and way-underdelivering. In many ways, biotechs are the today’s 19th-century gold mining firms, the ones that Mark Twain called “holes in the ground with liars on top”.
And on the issue of “inveterate name droppers”, Donald Trump was widely profiled on Cramer’s show this week - it was one of those cross-promotional deals, in which Cramer appeared on ‘Celebrity Apprentice’.
Trump only wanted to talk about the ‘great’ NY RE market, and how foreigners are crossing the Atlantic with their bags of ‘euros’ to buy up ‘cheap’ Manhattan properties. Interestingly, Trump didn’t mention his other developments, such as his Baja California project which looks moribund.
No worries, Trump is going to make it all back in Panama:
http://internationalpropertyinvestment.com/panama-trump-ocean-club
He now has his minions going on blogs and saying, yes, Panama RE has slowed down but that only makes our project all the more better to invest in! Get involved! Get right with Trump real estate!
Maybe he needs to be sued.
completely losing his hair should be more devastating.
Fannie to Cut Dividend 30%
By KEVIN KINGSBURY
January 18, 2008 2:44 p.m.
Fannie Mae said it will proceed with a planned 30% dividend cut in the current quarter, lowering the payment to 35 cents a share from 50 cents.
The U.S. housing finance giant said last month its board planned to approve the dividend cut in January.
At the same time it announced the planned dividend reduction, Fannie disclosed it would issue $7 billion in non-convertible preferred stock in an effort to boost capital and “conservatively manage increased risk in the housing and credit markets.”
Cutting dividends is a rare move, though Fannie Mae did it in January 2005 shortly after an accounting scandal forced major changes at the company.
http://online.wsj.com/article/SB120068471375901135.html?mod=googlenews_wsj
will Raines still get 100k a month for life ?
RE: will Raines still get 100k a month for life ?
FEDS should be doin’ everything in their power to put this Kenny Boy retread away as a warning to all.
Cutting dividends is a rare move
Ain’t that rare at the moment.
Citigroup (and Ambac) did it only this week.
Point taken, though I believe the comment refers specifically to FNM cutting its dividend.
OK.
By the way, I can confirm your conjecture from a couple of days back. Dataquick’s highest Median Price for the Bay Area was indeed July 2007.
(And has anyone else commented on the fact that DataQuick’s “December 2006″ numbers on the current report are different to the “December 2006″ numbers reported in January last year. Well they are, and it’s not a one-off discrepancy, the year-old numbers are always different from when they were originally reported.)
Thanks so much. The story was very vague on this. If July 2007 was indeed the median peak, then the crash is playing out at a stunning rate of price decline.
Taken from yesterday posting on http://www.perceptionmanger.org
[begin quote]If Ambac and MBIA lose their top ratings, billions of dollars of muni bonds will be downgraded, and the guarantees that have been sold on mortgage-related securities such as collateralized debt obligations, or CDOs, will lose value.
“The destruction of the bond insurers would likely bring write-downs at major banks and financial institutions that would put current write-downs to shame,” Tamara Kravec, an analyst at Banc of America Securities, wrote in a note Friday.
Kravec cut her rating on Ambac and MBIA on Friday because she thinks that ratings downgrades are “highly probable” now.[end quote]
Warren Buffet is licking his chops at the moment
He has just started a muni bond insurance firm. Yes, life will go on BUT it will cost ya! Lord have MERCY on the holders of the MBS and CDO, I am 110% certain, that Berkshire won’t touch em
http://money.cnn.com/news/newsfeeds/articles/newstex/AFX-0013-21931153.htm
“conservatively manage increased risk in the housing and credit markets.”
- This does not sound like good news for Juan 6P. A conservative mind set and J6P are like oil and water, no bueno.
UPDATE 1-M. Stanley cuts US mortgage, specialty finance sector
Fri Jan 18, 2008 9:39am EST
Jan 18 (Reuters) - Morgan Stanley cut its view on the U.S. mortgage and specialty finance sector to “cautious” from “in line,” saying recent economic and housing market data pointed to a “bear case” for mortgage credit.
The investment bank said its bear case was a scenario where rising unemployment, falling home prices, and normalization of bankruptcy filings led to unprecedented loss rates for mortgages (both prime and subprime) and peak-of-cycle losses for credit cards and other forms of consumer credit.
Analyst Kenneth Posner downgraded Fannie Mae to “underweight” from “equal-weight” and cut his price target on the the nation’s largest source of mortgage financing to $25 from $39. He also cut his target on Freddie Mac to $30 from $47, while maintaining his “equal-weight” rating on the stock.
Both Fannie Mae and Freddie Mac stocks will see a sell off if the two firms widen their loss view, as investors would be concerned about the impact of losses on earnings and on regulatory capital, Posner said.
The analyst, however, said he saw value in the credit guarantee business as the government sponsored enterprises — Fannie Mae, in particular — enjoy pricing power.
“With the companies enjoying government-guaranteed liquidity, and with the risk of regulatory capital shortfalls receding, investors will at some point start to focus on growth and margins,” Posner added.
http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSBNG20100320080118
Real value added there. It would have been impressive if they had done this six months ago while their investors could still get out.
I am sure select investors had ample warning six months ago.
“I am sure select investors had ample warning six months ago.”
Nope, doesn’t happen; it’s different here!
Kind of late to the party. This big thing is the downgrades of the insurers like MBIA and AMBAC. They say if they downgrade them, it could cause hell to happen.
They should have been downgraded long ago. These rating agencies suck.
Ambac has already been downgraded.
http://biz.yahoo.com/ap/080119/bond_insurers.html?.v=4
You’re a day late, and dare I say it, a dollar short.
The tax relief for homeowners in foreclosure seems to be working…not for the FB’s, but for the lenders: There seem to be fewer completed foreclosures and fewer sets of jingle mail showing up in the lenders mailboxes. The FB’s have a new gimmer of hope: No tax consequences for a short sale. Unfortunately, when FB’s yield to the banks under the promise of IRS relief, the result is more economic bleeding of the FB, just at a slower pace. The banks get what they want, the taxpayers gets hosed and the FB tosses another $20-30,000 down the drain, before they finally capitulate and throw the keys on the roof. You can’t blame the FB for trying, but the market conditions are still the market conditions.
Of course the slowdown in perfected foreclosures could just be a result of the holiday break. I wonder if the process will pick up speed again after January?
There was a bizarre downward blip in the San Diego November 2007 foreclosure data, but it returned right back to warp speed ascent in December 2007.
http://www.foreclosureforum.com/stats.html
It’s good that the FBs bleed their cash into the system; Their sacrifice of liquidity will help ease the decline, will help divert an outright crash.
Keep hope alive!
Exeter,
I was reading one of your CNY posts yesterday from the “Reverse of the Cycle” thread. I was wondering if you might be able to provide the link to the article that provided your Liverpool Lumber comment. Thanks
Carrie…. The link is in the main body of Bens post.
Ooops. My bad. Thanks for pointing that out.
Sorry if this may have been posted yesterday, but a few paragraphs seem worth repeating:
The ideal home buyer now — in a reverse of what was true for years — is a renter who is not burdened with a house. Such a buyer will need a down payment from somewhere, and he or she will need enough income to meet the monthly payments for the foreseeable future, including any increase in adjustable rates that seems probable.
But not owning a home, which may be hard to sell, is a big plus.
A year ago, having a home that had appreciated in value meant that an owner could trade up to a more expensive home. Now it means that the homeowner cannot move until the old home is sold, and that is getting more difficult.
http://www.nytimes.com/2008/01/18/business/18norris.html
And for good measure, here is a paragraph to read for any pols (or the minions who serve them) who think hiking the GSE conforming loan limit north of $417,000 will provide a viable quick fix:
That reduction of (available loan) supply is particularly threatening to buyers of more expensive homes. Jumbo mortgages, those over $417,000, cannot be sold to Fannie Mae and Freddie Mac, the government-sponsored enterprises that are still buying loans. There is legislation pending to raise that limit in some parts of the country, but it appears that many such loans were so risky that they cannot be refinanced. The only way prices got so high was that people who could not afford to buy those homes were given mortgages they could not hope to repay unless home prices kept rising.
“The only way prices got so high was that people who could not afford to buy those homes were given mortgages they could not hope to repay unless home prices kept rising.”
Big error in an otherwise good article. Even if price kept rising, the FBs could never have repaid. They never had the income to actually pay down the mortgage.
They could have just kept refinancing and going deeper and deeper into debt, until finally they went under. Then the lender would have resold for a profit. IMHO that was the game plan.
Now the lender will resell for a loss.
“Even if price kept rising, the FBs could never have repaid.”
True, but they *could* do even better: Move up to a bigger, fancier McMansion in a nicer neighborhood. This was nicely explained in a 2005 “shoeshine boy moment” story about San Diego with a title to the effect of The City Where People Buy Houses to Make Money. Unfortunately I cannot find a link on Google (but if you are really motivated, it may be in the 2005 blog archives).
Then the lender would have resold for a profit
I would think that if there were a profit to be had, the FB would have sold and walked away with cash. This is exactly the reason why foreclosures are so rare during RE bull markets, even though things like job loss and divorce happen all the time.
It’s funny how the NYT articles referrs to a “POST-BUBBLE” era. These clowns never admited the existence of a bubble through the last 2-4 years. But now suddenly we are all talking about a post bubble?
Bubble, we hardly knew ye!
Even Bernanke said boom-bust cycle when talking about real estate with congress. It is no comonnly accepted we are in a bust cycle.
Problem is, people are still talking about the bust cycle in the scale of the last couple bust cycles…. 15%-20% drop.
Hello you fools… the last bubbles were 20%-25% above normal price so the bust needed to be 15-20% top return to normal.
This bubble was 60%-70% overpriced on average and 100%+ in some areas. A 15-20% drop is not going to get it done.
i agree with you!!!
Pretty soon, I suspect they will similarly be talking about the “POST-RECESSION” era…
That reminds me of another MSM “truism” that I keep hearing that doesn’t make sense: instead of saying that the start of the recession will only be recognized in retrospect, I hear them saying that we’ll only know we’re in a recession after it is *over*. What the heck? If that’s what recessions are like, why would anyone even worry about it? Sounds pretty painless to me.
More like economists will keep saying the risk of recession is 50:50 until it is over…at which point NBER will retrospectively date its duration.
Adding a link to support:
http://www.rockymountainnews.com/drmn/money/article/0,2777,DRMN_23908_5695758,00.html
“Recessions are identified, after they have concluded, by the National Bureau of Economic Research. They need not be two consecutive quarters of negative growth. Instead, a recession occurs when the economy goes from a peak to a trough, as measured by several economic indicators.”
Europe is still years removed from that situation; buying a whole street without any cash is easier over here than renting a single home on the free market, even if you have enough cash in the bank to buy that home right away
nhz, can you please differentiate between what you call Europe and what you see in your country.
in general Europe is still far removed from the above description for the US; but I have no idea how renters are treated vs. buyers in other EU countries, that sure is different for each country because of the huge differences especially regarding the rental market. Still, I think in Europe in general people who want (need) to rent in the free market are generally treated like scum compared to buyers.
The ideal home buyer now — in a reverse of what was true for years — is a renter who is not burdened with a house.
Now that the renter is the ideal home buyer, will we finally get treated like human beings? Or will we be the subject of anger and derision for allowing the economy to go into recession because we refused to buy a house?
I suspect smart renters will be the focus of anger and resentment as we continue to save and wait not only for prices to come down, but to watch neighborhoods demographics evolve, how badly property taxes rise, and how neighborhood public services decline.
And of course, we need to keep an eye on the job market to see where businesses are growing and hiring.
Could take years.
Renting will continue to be a great deal.
I’m an home OWNER (100% paid off, in Sunnyvale CA, as well as land in FL that’s 100% mine). I get “anger” from my neighbors when I tell them I’d love it if house prices fell 50% here in Sunnyvale, CA! They think I’m nuts.
(My reason…we would consider moving up to a different house in the neigborhood, but NOT if it means our property tax would triple! Right now our only expenses are our inflation-protected ~$5000/year property tax and our gas bill and maybe, averaged out, about $200/month to maintain the house. Our solar panels cover the electricity. I’d be crazy to leave this house.)
I absolutely wouldn’t buy a house today, even though I have the means to do so financing or not. There are SO MANY rentals available. Just be sure to do a credit check on your would-be landlord first!
TESTING???
Got a neighbor who has rented 7 yrs, great renter for landlord, landlord has done a few despicable things, such as last yr November, he notified them he was putting 2br condo up for sale. Signs everywhere, open house, no buyers. RE agents told LL that he had great renters.This all one mo before the holidays. Talk about a bad movie, throwing people out on street in time for the cold weather, blizzards, no time for presents or holiday revelry…oops was thinking about movies, but you get the drift. LL could have waited till AFTER Dec to talk to them.
Well, just last week he notified them in EMAIL that he was raising their rent $150 and in June was raising it another $150. So, guess what, they found another place to rent in same complex for same $ and are going to Surprise him at end of Jan with Notice.
Don’t screw with GOOD Tenants. That I am sure of.
Many of us seem to be good renters, ontime no complaints etc, so, landlords beware, we are gold.
Condo in same complex was for sale for 1.6 yrs why??? desirable location and all, well those renters had a baby and horrible smells emanated from inside ALL the time. Fugly decor, and big big big stains on all carpets. The LL just sold it and the new owners did a gut job.
‘I suspect smart renters will be the focus of anger and resentment’
Eventually bargaining will happen and landlords will offer a month free on the lease.
My out-of-state landlord showed up in town to do an “inspection” on our rental house. Methinks he might be thinking about selling it. That would suck - I hate the idea of moving from one rental to another, and we really like this house.
RE: The ideal home buyer now — in a reverse of what was true for years — is a renter who is not burdened with a house
The American Dream of home ownership is dead-RIP.
In a destablized, global job market the greatest asset one can have is instant mobility.
Property holder’s will be the final stationary, immobile source of the billions in tax money to fund sky-rocketing government deficits at all levels.
It’s a totally new living style paradigm.
So few people understand this that it’s shocking!
Thankfully, the few people who listen to me (including my sister) get it.
It’s like the biggest DUH ever.
Lucky you. My sister ignored me in late 2006 when I told her not to buy a second home before selling the first. Over a year later, she is still the accidental owner of two homes. You might say she got stucco, thanks to ignoring her brother’s best advice.
Love that instant mobility. For me, it’s much more money in my pocket and precious metals bullion in my safe deposit box than if I were stuck for a multi-year wage slave engineering job.
“In a destablized, global job market the greatest asset one can have is instant mobility.”
If that’s true it is a sad time for America. This is saying that America bascially no longer exist and we are bowing to the global masters. I guess maybe as Americans we really do not share much anymore and have no unitedness. We are not willing to fight to preserve anything and the only real meaningful thing in life is financial. America itself is just a geographical location and there is no “nation”. We have no roots or real communities.
it’s not just america. it’s everywhere. in the global, modern capitalist world patriotism plays second fiddle to individualism.
500 years ago, religion was the dominant organizational system. 200 years ago it was governments. today, it’s the market.
what happened to religion over the past 200 years will happen to patriotism over the next two hundred years. national identities will become increasingly irrelevant and people will migrate where the quality of life is high and the economic opportunities are rewarding.
it’s not necessarily a bad thing, just different.
and that america that you lament. perhaps you should take a more critical look. american foreign policy took a wayward turn in the 50’s (mossadegh, etc). truth be told, the military industrial complex that has evolved since WWII doesn’t deserve the loyalty of the people it supposedly protects. the top 0.1% appreciate the wealth and abundance they’ve been able to extract in the name of liberty, freedom and capitalism. but most of the other 99.9% have absolutely no idea how badly the system has screwed them over. we’ve lost a generation due to misguided tax, investment and spending decisions that have built up over 40 years (pretty much since Johnson took over).
Anon
I am a VN vet and comfortably retired. I often wonder how we get these young folks to join the military
Last night Bill Moyers interviewed the author of Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and StickYou with the Bill). My blood is boiling. Frig you, Warren Buffett, you crappy, self righteous, old parasite. Well, maybe that’s why Bush is giving us tax rebates.
http://taxprof.typepad.com/taxprof_blog/2007/12/david-cay-johns.html
I’m not prepared to frig Warren Buffett, just as I’m not prepared to send in double as Ben suggested a day or two ago.
If the system is set up as a scam, then better for non-scammers to play along and give the proceeds to charity (or use it to try to insulate their own kids from the fallout) than to pay more into the scam. I look at it this way. Our charitable contributions go to those worse off than we are. Our taxes go to those better off.
Warren Buffet has made it clear that he pays less in taxes than many middle class Americans and said it is wrong and that someone should fix it. I think he’s said it numerous times.
Also, he’s giving most of his money away.
and obviously people like Buffet are creating some value unlike most of the scamsters on Wall Street that are raking in billions without providing anything to society, on the contrary (privatize the gains, socialize the losses).
Tom, I think you missed Palmetto’s implied point: that much of Buffet’s wealth has been acquired by using tax-funded sleight-of-hand. The title of the book referenced is the most obvious indication. Its author was being interviewed yesterday on “Democracy Now,” a truly freakish and relentlessly downbeat, ultra-leftwing radio program (also televised), hosted by a miserable, clinically depressed frump incapable of smiling (or even rudimentary grooming), but, unlike her usual death-and-misery “news reports,” the contents of book sounded interesting. I may go buy a copy.
roflow- the left is big on frumps
“much of Buffet’s wealth has been acquired by using tax-funded sleight-of-hand.”
Thanks for clarifying, Incredulous. (BTW, still laughing over your comments on the Glaziers). Yeah, nice of Buffet to decide, with government assistance, that wealth ought to be redistributed from the middle class to charity. I’m all for giving to charity, but not at the point of a gun.
Palmetto, have you ever SEEN the Glaziers? They look like demented Amish outcasts. What is the name of their restaurant? Something assinine and unappetizing.
This family is so greedy, I’m amazed they haven’t found a way to make money by selling Buc bodily fluids . . . yet.
Democracy Now! is one of the best news shows in American media. News hidden from view in the mainstream tv and radio is brought to surface on Democracy Now. Yes it is pretty bleak. But look outside your window folks, the world IS in many quarters a pretty bleak place these days. Check out her interviews with Seymour Hersh and Robert Frisk, two of the ONLY independent journalists working today.
As for the snide attacks as to the way this woman looks, I can only say that is really low rent,unbecoming of civil discourse.
http://www.democracynow.org/
Get real. Her looks are fairly characteristic of people suffering from severe clinical depression. Is there now a law against washing ones hair or putting on makeup? Is affecting frozen features somehow preferable to looking alive?
The show is ridiculous: Starting with the premise the glass is permanently half empty, it then goes on to tell us every horrible event on the planet. If Amy Goodman could get to another galaxy and record misery and suffering there, she would play the tapes on her program, and wring her hands in distress. Here’s a little secret: all good has a flip side; every happily fed lion means some other creature suffered terribly. There is no way around it.
To spend ones entire life focused on ugliness and suffering, unwilling to admit to anything beautiful or pleasant, is not reporting: It’s mental illness. The woman needs medication.
At USF, some fanatic professors REQUIRE students to watch or listen to “Democracy Now.” What does any of this have to do with anything? Why is is that radical pessimists have to drag everyone else down with them? And why do they THINK they are more enlightened than everyone else? Having observed and worked with many during my lifetime, I would say the opposite is far more believable.
People with no sense of humor are among the dreariest of tribulations.
Incredulous - do you feel that way about this blog? The daily news feed off this blog is pretty dreary and humorless. And I don’t think Ben Jones is big on makeup either.
Attacking someone’s politics with reason is one thing. Attacking their appearance (and inferring her mental state) to criticize their politics is completely ridiculous. I doubt her employment contract includes “looking pretty”, because it has no bearing on her job as a news radio host.
Incredulous,
please post a photo of yourself immediately. We need to know what you look like and if you’re attractive and well-groomed enough to be allowed to continue to post here.
This blog is very funny much of the time, unlike “Democracy Now,” where humor is prohibited on pain of death. There is nothing ridiculous about describing Amy Goodman’s appearance, which exactly comports with her attitude. Have you ever noticed how many self-proclaimed progressives look like they fell out of dumpsters? I remember when feminists refused to shave their legs or under their arms, or to wear deodorant (because it “clogged the pores”), and handed out manifestos claiming that makeup was invented by men to suppress women (excuse me, womym). Was I wrong in assuming they were CRAZY?????
MSSSSS Goodman was on the Tonight Show or something of the sort about a year ago, and she still didn’t bother washing her hair or putting on makeup. Needless to say, the audience didn’t find here very appealling. If the medium is the message, she might as well be lecturing her own, doubtless revolting, feet.
comment by Incredulous… Is affecting frozen features somehow preferable to looking alive?
If you had spent 10 seconds doing a google search, you would have found that she has Bell’s Palsey (facial paralysis), you twit.
Hey Incredulous,
still waiting for you to post that photo of yourself. Given how demanding you are about someone else’s looks, you’ve got to be a 10, right. So post it. We’ll let you know what we think about your mental health, and whether you’re attractive enough to continue posting.
And include a photo of your feet…we are very concerned about your hygiene and grooming.
Hi Spike,
If I were a 10, I’d be out getting laid, not reading about housing bubbles, but I do believe in soap and water, not to mention shampoo and toothpaste. Since you are so defensive of a self-made hag, can I assume I’ve struck a chord?
Lets call a spade a spade.. Incredulous, your behavor is ass like.
typical.
There is nothing ridiculous about describing Amy Goodman’s appearance, which exactly comports with her attitude. Have you ever noticed how many self-proclaimed progressives look like they fell out of dumpsters?
Yes DO POST A PICTURE OF YOURSELF!! GIve us a link to check you out.
Frump? Because I worry about how th working class will afford to live and how people will pay for healthcare on the incomes of 80% of the US and take in stray animals and drive fuel efficent cars and think war is immoral (only exception is WWII)?
Sorry dahling but you would only get to date or marry someone who looks like me in your dreams.
Size 0-2, red-gold hair, green eyes with classis New England WASP cheekbones wearing Lilly Pulitzer in the summer and Brooks Brothers the rest of the year (if you don’t know the brands - think major expensive ultra-classic preppie.) TSA staff are always so sweet and nice to men - particularly the men,
Oh yeah….all progressives and those who are concerned about others are frumps. That is why men (even men nearly 25 years younger) turn to look when I go by. Pretty funny when guys around 30 try to pick up when I’m at the beach - I have learned how to break it to them gently that I am not only very married but am older enough to be their mother.
Novawatcher, Bell’s Palsy is not a permanent condition. She’s been stoney-faced for years and years. Now she has, or had, an excuse.
I’ve known people with Bell’s Palsy, and they were still capable of showing emotion. The condition never lasted very long. In any case, it has nothing to do with her relentless dreariness and obsession with everything sad and grusome. And she is still a self-made frump.
How is that typical? Of Moi?
I think my behavior is excellent for someone who has been up for two nights; I bet if I were ripping on someone you hated, you’d be thrilled.
AnnScott:
“Frump? Because I worry about how the working class will afford to live and how people will pay for healthcare on the incomes of 80% of the US and take in stray animals and drive fuel efficent cars and think war is immoral (only exception is WWII)?”
First of all, I wasn’t referring to you, I was referring to Amy Goodman. Secondly, is this how you define a “self-defined progressive?” If so, guess what, I’m one of you, and since you brag about taking in strays, I bet I can beat you on this one; my vet bills (many for rescues) exceed my own living expenses, and have for my entire adult life.
Since I’m gay, I would only date someone like you in nightmares, regardless of your looks. Tell me, do you refuse to say anything happy, or or wash your hair, or to wear makeup? If not, your physical identification with Ms. Goodman is ridiculous.
We last I checked, the word “frump” did not refer to a apparently vainglorious beauty. How you could take an observation about another person and trasfer it to yourself is amazing.
If I want to criticize Ms. Goodman’s program, what’s it to you? Are must we all like the same things and think the same way? If wanted to be depressed, I’d visit a mortuary, not glue myself in front of cable access channel to watch a doomsayer tell me everything wrong with the world, except, of course, for her select enlightened society.
I also happen to think Rush Limbaugh is a fat jerk. Oh no! I’ve done it again! Quick, where are his dittoheads to come to his defense?
And for the person above fretting over Goodman’s Bell’s Palsy (my post on the subjecty disappeared–I wonder why????), it is only a temporary condition, and does not explain her decades of drab expressions and general doomsaying. When I was little, my grandmother would say if I made a face to be careful or it could stick that way. Well, Ms. Goodman has demonstrated that not using ones facial muscles may have the same hypothetical result.
Incredulous, you make a very good point about sense of humor and still seeing “what’s good” in face of direness. This board - though looking at the “bad” without dilution, does a god job of balancing it with humor. Humor - which lends itself to a bigger picture perspective - will be key in the future.
Things that are made out to be “so important” will pass, life goes on, and so will we.
Thanks. I’m glad somebody gets it.
Pretty funny when guys around 30 try to pick up when I’m at the beach - I have learned how to break it to them gently that I am not only very married but am older enough to be their mother.
Ann Scott, I don’t know how to break this to you, but getting hit on at the beach by horn-dogs doesn’t make one a raving beauty. The horrendous pick-ups I used to witness at the Leopard Lanes Bowling Alley in Omaha in my wayward youth attest to that.
‘This blog is very funny much of the time, unlike “Democracy Now,” where humor is prohibited on pain of death. ‘
If this blog gets any popular, a movie deal will be in the works. Maybe Ben could play a cameo in it as an appraiser who gets fast forwarded to the year 2015 and comes back to warn us all.
Warren Buffet has made it clear that he pays less in taxes than many middle class Americans and said it is wrong and that someone should fix it. I think he’s said it numerous times.
Buffet has offered $1 million in cash to any corporate executive in America who can prove they pay a higher tax rate than their secretary. Nobody has stepped forward to claim the money.
Brian, this is unfair.
For decades, James (the Amazing) Randi has offered a million dollar check to anyone who can demonstrate paranormal powers. Problem is, he alone gets to decide what constitutes proof, and has stated to friends that no matter what, HE will never find in any applicant’s favor. Buffet is imitating him. There are plenty of executives who pay a far higher income tax rate than their secretaries, but by not clearly defining “tax” and “rate,” Buffet has rigged the outcome. A secretary pays a larger percentage of her income in, for instance, phone access fees and cable taxes, than would a billionaire, but if the test is restricted to federal income taxes, Buffet would be writing million dollar checks to corporate executives every minute of the rest of his life.
Buffett can change his tax rate to higher than his secretary’s anytime he wants to. He chooses NOT to maximize his tax burden, just like the rest of us. Yet somehow he has the right to preach to the rest of us.
On this particular matter he is a total and complete hypocrite.
Problem is, he alone gets to decide what constitutes proof
Someone with genuine paranormal powers is not going to be stopped by a mere slap by Randi, who is a magician-turned-fraud-exposer.
Someone who is a paranormal fraud, however, should fear him because he has exposed many folks who are talented in deception.
BTW, he is still a terrific magician. He incorporates beautiful sleights-of-hand in his talks.
As a friend of James Randi, I can unequivocally say that he doesn’t think he will ever find an applicant that can show he has paranormal powers, since said powers do not exist. BUT, he has not said he will not find in favor of an applicant, no matter what. Which implies that he will not use the rational, critical criteria which would be set up BEFORE any test, and which the applicant agrees to.
Because he doesn’t voluntarily pay more?
That doesn’t hold water. Taxation can’t be voluntary. He, along with Bill Gates Sr. have indicated that they favor tax policy changes that would increase their tax burdens, since they believe handing down massive amounts of generational wealth is no a good thing.
In any case, expect much higher tax bills in the future no matter who gains power. We are greatly undertaxed as compared to our drunken spending on military, entitlement programs, etc. Foreigners aren’t going to continue lending us money to fund our fiscal and military misadventures.
Waaaay OT, even for the bitsbucket:
Ed if you in communication with Randi, please send thanks from a random admirer: Tell that fine gent that he inspired a kid of about 9 years to study magic. I was doing birthday shows (a 13 year old doing shows for 8 year olds) when I finally got sidetracked by hormones. It turns out that I went on to get degrees in engineering from MIT: I have to say that the study of magic is a excellent component of training for science. It teaches presentation skills along with the fact that there’s usually more than meets the eye. The ability to spot a charlatan is not a bad thing to learn early too.
And at 37, my parents were STILL trying to figure out how that dragon box could make things disappear. LOL.
edhopper,
I’m glad you’re Mr. Randi’s friend, and I have long praised his fabulous writing (his books are elegantly written and hilarious), but former associate members of his skeptics’ organization (my brother belongs) who have known him closely for years have categorically stated that he HAS said he will never accept ANY evidence of paranormal anything.
Be careful in saying absolutely that paranormal powers do not exist. This is like saying absolutely there is no god (or God) or life on other planets, because you haven’t witnessed either. I think one should always start out as a skeptic in such matters, and debunking is wonderful (how about an expose on on the supposedly spiritual Huckabee?), but for a human to profess infinite knowledge is a bit of a stretch.
Christopher Hitchens, an atheist, suggests that religious belief is genetically inborn, and that nothing can defeat it. I would suggest that there may be a very simple reason for such an inclination. Having seen animals reverently (and with obvious distress) attending a burial of one of their fellows, I am unwilling to to chalk it up to mimicry of the humans also in attendance. In any event, it doesn’t matter whether paranormal powers exist, only that those who study and “debunk” them are objective. I don’t believe Jesus ever existed as an historical being, but I would never bet my life, much less anybody else’s, on it.
Logic is enough to prove that omniscience is impossible, omnipotency is impossible, omni-anything is impossible. But there may be God-like beings in this universe. However they would undoubtedly not consider themselves Gods. Just as we humans are God-like from the perspective of our pets, yet we do not consider ourselves Gods. I’m comfortable in calling myself an atheist.
That makes sense. Strangely, it’s exactly what Robert Monroe (the out-of-body writer) said about the supposed advanced beings he allegedly encountered. He claimed they were appalled that humans regarded them as gods.
However, I think a lot of humans do think of themselves as gods. I remember hearing priests saying that we were God’s highest creatures, and wondering at the time, “says who?”
I am not an atheist, but I lean in that direction, because none of the theisms I’ve come across seem remotely credible. I think the usual copout, to which I happily subscribe, is to claim agnosticism, and run faster than incoming rocks.
I thought my comments would get some harsh responses. But instead we see a reasoned, polite dialog. Boy, I love this blog!
I don’t think this is the place for a debate on the metaphysical (it’s about housing dammit) My only response is to Incredulous. My statement about the paranormal not existing is from the fact that after 150 years of serious research, there is not a single shred of scientific evidence for the existence of the paranormal. Like Unicorns or Faeries or Bigfoot some things one does need not to be agnostic about.
edhopper, give it 151 years.
James Randi is most effective when he exposes charlatans, of which there are thousands; he is less effective when he makes sweeping statements (”There’s no such thing as the paranormal” ) that, like their object, cannot be proved (you can’t prove a negative). I’m still waiting for him to expose L. Ron Hubbard, or Sylvia Browne, who claims that everyone in heaven speaks perfect Aramaic.
I’ve never met anyone who claimed to believe in unicorns, but I did meet a lunatic who insisted she’d impregnated by space aliens and that her invisible baby was being wet-nursed on an astral plane. The same woman would jump on men claiming that she needed “male energy.” The wife of the man who popularized macrobiotic diets addressed this same alleged problem by advising women to make a tea of their husbands’ hair.
I don’t think you can do anything to stop people from believing what they want, no matter how much evidence you provide. Denial in the face of a toppled sacred cow is the inevitable response.
Influential members of The Skeptics Society, however, take Randi too far. Michael Shermer (”Why People Believe Weird Things”), for example, goes so far as to assert that handwriting analysis can not tell anything about personality. This is prima facie untrue, as (without even getting into the patterns in the individual letters) things like pressure, arrangement of script on the page, and unusual flourishes are all quite literal indications of personality, just as personality clues can be discerned about composers and painters.
Just cause people claim something doesn’t make it viable. And as late as last century there were those who claimed Faeries existed. BTW the sweeping statement was mine, not Randi’s.
As to Silvia Browne, he has gone after her, challenging her on Larry King for example. Scientology has been looked at by organizations Randi has been affiliated with (CSICOP, founding member). It didn’t come out so good.
And yes, as a magician his specialty is debunking charlatans, which is about everyone claiming to have psychic powers.
As to proving a negative. Carl Sagan said that extraordinary claims demand extraordinary evidence. The burden lies with those claiming the existence of the paranormal. So far they’ve proved bupkis.
I agree, but human nature cannot be changed.
Extraordinary claims include those made by every religion in history.
I saw Randi on Larry King with Sylvia Browne, and he didn’t really stand up to her. She is, after all, a loud-mouth shrew. She finally told him he needed to get to a doctor because he had a bad heart. Turns out, this was correct, but I think I know how she did it. Back in the ’80s two scientists, Dirk Pearson and Sandy Shaw, wrote a bestseller “Life Extention,” in which they gave statistics correlating heart disease with a particular type of crease that shows up on earloabs. Though having the crease doesn’t mean one necessarily has heart disease (wearing earings, for instance, can cause it; so can sleeping on a lumpy pillow, or yapping endlessly on the phone), NOT having it almost always does mean the person does NOT have heart disease. Randi has very prominent creases on his earlobes that COULD indicate heart disease, and Browne could easily have seen them. She’s old enough to have been more than familiar with Pearson and Shaw, who were common guests on the Merve Griffin Show (sp?), and popular speakers across the country.
Besides, at Randi’s age and given his grumpy demeanor, one might assume heart problems Or it could have been a lucky guess. In any event, people always remember the hits, but ignore the misses, and her misses have been spectacular. I suspect she has ruined many lives with her idiotic advice.
As for handwriting, of course it can be studied: the FBI uses handwriting experts all the time to profile criminals. And as for the paranormal, I’ve lived in an extremely haunted house, so I accept that some things seemingly impossible are not. Dismissing all things beyond the physical doesn’t strike me as scientific, but dogmatic, and often fear-based. What would happen to Randi et al if the paranormal were proven? I submit they would continue their denials or never recover from the shock.
Buffet said he pays %17% and his secretary who gets paid $60,000. pays %- 37%
Now can you spot the problem? 2 of em… this multi Billionaire pays his secretary $60k.. What a piecoshit.
And she gets stuck paying 37% in taxes and HE gets to pass on all his wealth untaxed to his heirs and she doesn’t .
Nice.
There is nothing preventing him from sending in more money to the government.
This is the most ignorant comment of all. Buffett wants a level playing field. CEO’s pay a lower rate than secretaries because they design their pay packages to minimize taxes. Long term gains, and dividends are taxed at a much lower rate than income, the company gives them interest free loans, rent houses, planes, boats you name it to avoid taxes. Meanwhile the middle class and upper middle class get raped by a higher income tax rate, and the alternative minimum tax which eliminates the few tax breaks available to those who work for a living.
Just because he thinks the gov should tax the elite at the same or a higher rate than the upper middle class, and middle class doesn’t mean he should alone give more of his money. He plays by the rules that have been set by our gov, but he advocates for new ones.
Why would he choose to give extra money to the government? The government would waste that money quicker than any ‘crack addict’. He IS extremely smart about money, its purpose, use etc. HE WOULD NEVER GIVE HIS MONEY TO THOSE THAT RECKLESSLY ABUSE IT.
wow, you just described my MO. Take money from the capital markets and “redistribute” it my own way. I plan to do that until I’m too senile to trade properly.
Yay!
That’s what I do too.
Lovely, lovely, lovely.
Hi Palmetto.
Think of our Bucs’ stadium (Raymond James Stadium), which will never be paid off, and of the hideous Glaziers who get all of the ticket sales income and 100% of concession profits. The deal wasn’t even hammered out till the evening before the vote, so almost none of those voting for it (half in an effort to boost school funding, which was cleverly tagged on) had any idea of what it entailed.
When our former Mayor Poe protested before the Fla. Supreme Court, the court ruled against him. It seems that sports fans are another entitled class of humans, though they still have to pay a fortune for tickets to games. You would think the taxpayers funding the rip-off would at least get free admission.
Incidentally, the Glaziers made much of their fortune as slumlords.
George Bush and buddies pulled the same stunt in Texas for his baseball stadium, but there they actually used eminent domain to seize homes and property where they wanted to build it. These thieves, called businessmen, are without conscience, and yet many wannabe bigshots revere them. I think we should petition for a new vote to cut off all funding to the stadium, letting it go into foreclosure, or to seize it by eminent domain and give it to a developer of Section 8 housing. Might as well take advantage of the same system the thieves have gamed.
and Jerry Jones is getting the same deal and doing the same things.
I remember people being carried out of their homes like sacks of potatoes, when they “cleared” Chavez Ravine to build Dodger Stadium. Oh, and they shave the whole hilltop off too.
Screw all of them. I hate ED, even though it’s in the Constitution.
“yet many wannabe bigshots revere them.”
The lionizing of real morally bankrupt turds who stole their money the “legal” way. Even the Mafia comes more honestly by their money. One of the points the author made during the interview is that some of these “millionaires” and “business leaders” would be nowhere financially if they hadn’t gamed the system. So much for the “hard work” they preach.
Stockholm Syndrome?
good book recommend, palmy. I might have to actually BUY that one from Barnes & Noble instead of reading it while drinking a few rounds of earle greyer . . I think I’m actually the only person who reads while in the table area of the bookstore, instead of trying to act blase’ with a laptop while scanning for pickups.
that meat market scene always amused me to no end !
Warren Buffett is a direct descendant of the Great Depression…he learned a few things…about the “markets” and…human behavior…and has “capitalized on that “learning” by increasing the wealth of his “little company” 364,000% in the last… 45 years…by the why, he was not born in the Hampton’s or Martha’s Vineyard…and doesn’t “pretend” he is a “cowboy” “rancher” from Texas.
And he couldnt’a done it without us! Give yourselves a hand, folks!
I gather you think that he should provide free Durcell batteries & Gillette razors to homeowners with resetting mortgages?
least he could do in exchange for the money he so willingly took from the public trough.
“…he so willingly took…”
Yeah, make the fox pay for the lost chicken’s & eggs that the rancher put in the middle of the wilderness.
Let’s not go overboard. Buffett came from a wealthy family in Omaha. His father was a stockbroker who became a member of the U.S. House of Representatives and who had a residence in Washington when Buffett was in high school. His father helped get him into business school at Pennsylvania.
“Let’s not go overboard…”
I suppose his father took him “day sailing” on the family yacht in Newport… on the weekends he was home from business school.
So, are you saying that the difference between growing up wealthy and super wealthy is a greater relative advantage than the difference between being wealthy or poor?
“…is a greater relative advantage”
No, I just trying to illustrate the focus of my disagreement: say between Warren Buffett business ethics versus business people like this:
Kozlowski joined Tyco in 1975, becoming CEO in 1992. Credited with Tyco’s massive expansion in the late 1990s, Tyco consistently beat Wall Street’s expectations and through a series of strategic mergers and acquisitions, ushered in an entirely new generation of mega-conglomerates. Kozlowski left Tyco in 2002, amid a controversy in regard to his compensation package.
Scandal, trial, and conviction
I just don’t believe that after 45 years of building a “company” Warren will end up like him.
That “aw shucks” image he has does have some basis in reality, but that doesn’t hide the fact he also has absolutely no aversion to getting in bed with the Wall Street boys when it suits him.
This bond insurance thing he’s starting won’t be the only thing he does the next few years IMHO. If he thinks he can pull a few billion in profit off of Wall Street, he’ll be fighting his way to the front of the line.
“…If he thinks he can pull a few billion in profit off of Wall Street”
I don’t think it’s a matter of: IF…more like: When
It does not matter that Buffet’s rate is less than a secretary, he still pays more than most people earn. Would you rather have 10% of a $million or 50% of $10K ? I see nothing wrong with low tax rates on savings and dividends. Increases savings and investments. Has allowed people of modest income (like me) to amass if not great wealth some $ security and freedom. People who write books about the extreme inequities that free or close to free markets causes, overlook all the benefits and want to throw the baby out with the bathwater. If they think free market economies are bad let them try government run ones. Does anyone really want to try socialism ?
Yeah, but he pays a lower rate on each dollar he earns.
Applying the same logic to a sales tax, it’s like a Hyundai being taxed at 8% on the full value of $12K, but a Mercedes being taxed at 8% up to $12K, then the rest of the value being taxed at a lower rate (or not at all).
If you support “free market economics” why do you support diddling with the tax rate to disfavor working?
Actually increased taxes on savings will tend *increase* savings if people are saving to maintain living standards in retirement. The goal will remain the same (most people want fairly even living standards through life) so they will save more to get it. It would decrease savings if savings were an end in themselves, i.e. with a miser.
You think we have a free market. What has the FED been doing? What is the federal gov planning on doing with tax rebate checks? It’s a manipulated market. Is it a free market when sovereign wealth funds buy up companies? It’s called communism when our gov owns corporations, what is it called when foreign gov run them? Our economy is managed no more or less than many of those countries you call socialist.
http://www.businessweek.com/bwdaily/dnflash/content/jan2008/db20080117_605401.htm
The Death of Mass Luxury
Is the “mass luxury movement” dead?
“It certainly looks that way. Executives at luxury retailers such as Saks (SKS), and high-end brands ranging from Coach (COH) to Karl Lagerfeld, are bemoaning the disappearance of free-spending shoppers. “You’re seeing more pressure on that aspirational luxury consumer at our entry-price points,” says Steve Sadove, chief executive officer at Saks.”
“aspirational luxury consumer” - code word for 30K millionaire or credit card monkey; i.e., a poseur, someone who has no business even being in that department.
TxChick, how else do you convince someone to believe the lie of “if you just work a little harder, you can be rich like us too”? Provide them with $30k Mercedes, slapped together McMansions, and $5/hr imported house slaves from south america.
To me, rich is you get to choose what you want to do and not have to work at a job you hate to pay for consumer crap.
Ding ding ding, we have a winner.
txchick57 YOU are RIGHT. Me not rich, but not leveraged to the eyeballs. Have a job I like, but if that changed could easliy say ADIOS. Or if on a whim decide to buy one way ticket to Hawaii.
“high-end brands ranging from Coach (COH) to Karl Lagerfeld,”
LOL, “mass luxury”. All made in China, of course. Now Hermes, that’s a different story.
I never buy store brands of anything anymore unless the labels clearly state “made in the U.S.A.,” and even this says nothing about individual ingredients or components. Virtually all of the toxic pet foods recalled last year were made in American manufacturing plants by a Canadian contractor for many American petfood companies (including Paul Newman’s), using contaminated Chinese wheat gluten. I notice that Sweetbay doesn’t list the country of origin on their plastic food storage containers (federal law requires the country of origin be posted), so I’m assuming they’re just more crap from China (Sweetbay’s own brands of dog and cat food were part of the recall; they didn’t remove them from the shelves till they were officially outed by the government; what a horrible, immoral company). Incidentally, plastic can be contaminated with lead.
The Country of Origin Label (COOL) law was passed by Congress in 2004. It has been “set aside” by the Bush admin. despite the fact that American farmers feel it would be a boon for them. Under Nafta, for example, fruits and veg from Mex. and south America are fertilized with human sewage, and they use pesticides that we banned as cancerous in the US years ago, but there is no regulation of what foreign farmers do. Stabilizers, vitamins, and all sorts of food additives are cooked up in Chinese “factories” (and I use the term extremely loosely) with zero oversight or safety precautions, and used in American food products–cookies, Twinkies, cake mixes, chips, what have you.
Best thing for American farmers and citizens is the rigorous implementation of COOL labeling, which would give us a fighting chance to protect our health.
“fertilized with human sewage”
Isn’t this suspected with the e-coli contamination of spinach in California last year? I remember news reports attributing the contamination to a cattle farm “upstream,” but CNN, six months later, admitted that this was just someone’s theory. At the time, I suspected it was a government PR release, because of the illegal immigration uproar going on (many of the spinach farmworkers were illegals).
Best thing for most people would be to buy local and actually cook their own meals.
I made “fancy” omelettes yesterday — local organic eggs, parmigiano-reggiano, etc.
The cost? $1.60.
That’s cheaper that McD’s!
Most people are too stupid to even see the obvious. Of course, that means that they would have to make an “effort”.
But, cooking is hard for many people, who bought those pseudoindustrial stoves refridgerators to make a statement.
I never buy meat, so I had no idea how expensive it had become, till I was shopping with someone else. For the convenience of getting something pre-packaged (as opposed to having the butcher slice and package it), people appear to be paying as much as 20 dollars a pound for cooked ham, and 14 dollars a pound for cooked chicken. In the deli, I saw cooked vegetables for 8 dollars a pound (the same price for cooked pasta with flavoring, and for some kind of cornbread). I cannot imagine what “roasted” beef costs.
The prices for regular uncooked meat in the butcher’s case were equally shocking. How can the Government say inflation is low when prices are double what they were just two or three years ago?
Do not get me started!
Cut vegetables for $3-4/lb more? Cooked mussels for $12/lb more than raw?
How hard is this stuff? Chopping celery?
You’ve got to be freakin’ kidding.
And incidentally, I beg to differ on the inflation part. You are only seeing the “value-added” component which is basically labor+shipping+packaging.
The raw prices have increased but nowhere close to what people claim.
They actually sell cut carrots and celery at the market, little cups with water in them, and the price is more than that of entire uncut bunch of either.
I was in India on a trip recently and one of the excursions was to a fabric store which is one of Hermes’ main suppliers. Really nice stuff, too. I suppose you can technically say “not China” but I think at this point all the “luxury” consumer companies are getting most of their stuff made in the 3rd world. Once the designers are separate from the factories you may as well put the factories in the cheapest possible place.
This is hardly new. My aunt did this back in the 80’s.
This has been India’s bone of contention with the US forever. The absurd subsidy of what’s still left of the textile industry.
In fact, I suggest you look at the WTO “textile quotas”. There’s a healthy business to be made by Indian businessmen for textiles manufactured in India which carry a “Made in Madagascar” or “Made in Mauritius” stamp.
Same with Italy incidentally. Just take a trip to Milan.
Fools, all of them!
Incidentally, if you take a trip to India you can quite literally get the “fancy designer glasses” (without the little stamp) for the fraction of the cost. They are manufactured at the same factory, you know. All you miss is the little “designer” stamp.
If the diamond ring you were lusting after didn’t show up in your Christmas stocking, take comfort in the fact that you’re not alone. In another indication of the slowing consumer economy, jewelry retailers reported disappointing sales for November and December, suggesting that shoppers resisted the temptation to load up on pricey gemstones.
Tiffany & Co. and Zale Corp. reported 2 and 9 percent declines, respectively, in comparable-store sales for November and December from the same period in 2006. Zale also announced this week that it will close 60 retail locations within the next 90 days. Jewelry retailer Finlay Enterprises similarly announced that comparable-store sales for November and December declined 5.9 percent, and at Signet Group, U.S. sales were down 8.1 percent for the period.
http://www.usnews.com/blogs/alpha-consumer/2008/1/18/luxury-jewelry-market-feels-shoppers-pain.html
Zale’s does have an investor, the former chairman of the SEC:
http://www.reuters.com/article/governmentFilingsNews/idUSN1540816420080115
I reported on Zale’s in Florida malls in mid-December where they were having a disastrous showing. The stock has fallen by over 50% since Breeden started accumulating it - where did this guy get so much money? And what does he know? Well, there is an upside in that, unlike HBs, the value of ZLC’s inventory may be inversely related to the economy, consisting as it does of gold (even if it is a lot of 10K crap with garbage stones). So they are helped by inflation.
Interesting. A few years back none of my Boston area middle class friends would have been caught dead with “mall” jewelry.
Just goes to show you. All jewelry markets are local.
Mine did show up but it didn’t come from Zales. It came from a distressed seller on Ebay. LOL
speaking of TIffany’s, friend who does business in Shanghai says there is lots and lots of TIffany’s knockoffs to be had. And they look exactly…
prices are $5 on up but mostly cheap prices.
Knock off Coach handbags, you name it, you won’t be able to tell the difference, even AT the Coach etc stores.
To tie this back to the previous threadlet, one of Warren Buffet’s favorite businesses is retail jewelry. Maybe a buyer of ZLC or TIF somewhere down the road?
as mentioned yesterday, in Europe sales to the real financial elite are still booming. The local wharf that builds luxury yachts (50-75 meters long, price range 25-100M euro or so) was fully booked until 2012 and is now doubling its production facility. They seem to keep a very good eye on their order book, so the filthy rich are still doing extremely well. Probably it is mostly the would-be (multi-)millionaires that are getting in trouble.
Money burns faster…if it is provided with: aspirational oxygen & combined with the highly flammable “attitude”: “Look at me…ain’t I BITCHIN!”
RE: aspirational luxury consumer
Yeah, all those six-figure loan processor’s and HS educated, former secretarial real estate investor’s seem to have become an endangered species
I don’t know about endangered (my guess is they’re still reproducing fairly well), but certainly threatened due to changes in their environment, including extensive loss of suitable habitat :-).
“Every day, a million acres of subprime forest is lost, dooming the creatures that call it home. Can you help?”
When tourists aren’t touring
Another key economic engine for the region is lagging
By TOM BAYLES
tom.bayles@heraldtribune.com
After what appeared to be a strong start to the tourism season in Southwest Florida, the same consumer confidence problems plaguing retailers during the Christmas season seem to be settling in on one of the region’s most important economic engines.
———>
http://www.heraldtribune.com/article/20080119/BUSINESS/801190408
Florida:
Real Estate - Devastated
Retail - Declining
Tourism - Going down
What’s left?
they can always get a cheap seat at the sailor circus.
Sounds like these hotels need to wise up and lower their prices like some other folks we know.
Had an investor friend tell me last night that some big time investor friend of hers thinks that “Florida is just going through a hiccup, and all the great fundamentals are still there.”
I don’t know how to respond since what I read here seems 100% opposite, so I don’t say a thing. How could someone come up with such a point of view, given what’s going on??
He needs to believe that.
Atlantic coastal Florida has gone from quaint to glitzy to frumpy in 25 years. Budgetary problems are rapidly increasing, so don’t look for big improvements in things like roads and do look for an increase in all those nagging little taxes - I wouldn’t be surprised if pretty soon there will be a $10 state-mandated surcharge just for having your car looked at - Florida is famous for this kind of crap.
But the main “fundamental” - the weather and the beaches - is hanging tough. Agriculture remains a strong business. And it is still a much more business-friendly state than a Michigan or California, with good ports, rails, and highways.
Am heading to Florida for a week in Feb, to Ft. Lauderdale, where my mom rents a condo for a month. I like Florida for a week, tho I never really do anything…just eat and sit on the beach.
That’s my take on California. I like it for about a week.
Uhual franchise.
Some choice comments are served up here on the wisdom of bailing out fools.
http://blogs.wsj.com/washwire/2008/01/18/bush-outlines-stimulus-plan/
JJ = gubmint troll
GS….. After reading some of the comments it just dawned on me that those comments posted by JJ are remarkably similar to the JJ posts here. Not to mention some of his other usernames on this blog.
After reading through the link’s comments, I’d say it looks like class warfare is heating up too.
my favorite readers comment was the one suggesting to Bush it’s time to go over to the Ford Theater.
During Lyndon Johnson’s administration, people were wearing buttons that said, “Lee Harvey Oswald: where are you when we need you?”
Class warfare started heating up in 1981. What’s happening now is that the losing side is starting to fight back.
Class warfare is the history of mankind. Politics was completely based on class warfare (for example) at the turn of the 20th century. Teddy Roosevelt’s entire career was based on grandstanding in favor of the so-called little man.
Unfortunately, IMO, rabid feel-good class warfare (i.e. populism) leads to communism, which leads to societal collapse.
“Unfortunately, IMO, rabid feel-good class warfare (i.e. populism) leads to communism, which leads to societal collapse.”
Tell me. How is that different than the rabid, angry self righteous class warfare over the last 27 years any different other than the end result being crony capitalism?
I’m always amazed how rapidly some will come to the defense of crony capitalism, completely unarmed.
Exeter - Don’t come on here telling me I’m unarmed - I am one of the least unarmed posters on this blog. It’s a blog - we don’t have time to write political speeches. I made a point; you rebut it without any commentary of your own and tell me I’m unarmed?
First, I can’t even figure out what your question is. “Crony capitalism” is not an economic condition; it is undefinable left-wing blog speak that tries to pretend it knows something it doesn’t. As best I can interpret it, it means George Bush and all the Republicans in the Cabinet make me really really mad and anyone who says anything that in any way appears to not blame them for all the problems in America is going to get it from me.
Also, I don’t know why you’re focused on the last 27 years, but in the last 27 years:
(1) Fewer than 10,000 U.S. servicemen killed in conflicts, compared with >5X that number in any previous 27-year period ending on or before 1981.
(2) A larger percentage increase in per capita real income than any 27-year period ending on or before 1981.
Also, there was a decline in the growth of government spending until this decade, most of which has taken place on the state and local levels.
There are myriad other positive things about the period from 1981-2007. Tremendous educational opportunities for almost everyone for the first time in history, thus providing even greater mobility for moving up the socioeconomic ladder, for example. Anyone who think the last 27 years has been a particularly bad time is either very young or on drugs or is not a very good student of American or world history, or is simply angry at the world.
Now, if you think getting rid of Bush and company and replacing them with even bigger government types is going to make your life or society better, then we disagree. Also, if you think that limiting CEO salaries or making sure that there is no nepotism, bid rigging, or whatever it is that you’ve got yourself all worked up about is going to make your life better, then all I can say is - get a life.
I’m sure you (like many others on this blog) believe in equality of outcomes, from each according to his means, to each according to his needs, take from the rich give to the poor, etc. I stand by my comment - populism is very dangerous. Unchecked it leads to communism, which leads to the end of freedom, and scares me a lot more than some big, bad corporation.
Imagine when IDIOCRACY reaches the point that the rabble can easily be whipped up by clever agenda-pushers and exploited for their own ends. Get ready for the permanant institutional Democratic Party (and for the record, today’s GOP is just as bad).
Look my friend. When you use the term “class warfare” on this blog to advance an ideology and disparage another when in fact, the truth is the very term was coined specifically to advance crony capitalism circa 1981. Then you go on to say that crony capitalism is an ideological term? If that kindergarten “have it all my way” logic isn’t unarmed then I don’t know what is. You can continue to deny the institutionalization of crony capitalism 27 years back but that denial will at best get you a back office position at NAR.
Why not make a cogent argument about why your still undefined term “crony capitalism” has done so much harm to the country whereas something different, which should supposedly replace it but which you refuse to discuss, will be so much better?
Because the left feels it has the moral high ground and doesn’t have to deal in debates which involve policy and outcomes.
Tell you what. When you stop backpedaling and admit who declared class warfare on who, I’ll be happy to define crony capitalism. In fact, I’m willing to wager a whole lot of folks will too.
gee, crony capitalism has been around longer than the internet and blog. one example, philippines during the marcos times. same playbook as it is practiced today. what do you think will be the outcome?
paul, you might want to read about the philippines and marcos and his cronies. you probably will get a good idea what crony capitalism is all about: looting of the national treasure. it ain’t no left wing blog speak.
paul, you might want to read about the *filippines* (nasty filter) and m@rcos and his cronies. you probably will get a good idea what crony capitalism is all about: looting of the national treasure. it ain’t no left wing blog speak.
Unfortunately, IMO, rabid feel-good class warfare (i.e. populism) leads to communism, which leads to societal collapse.
What leads to rabid populism is crony capitalsim ie facism. When government is run for and by a small elite group of business leaders at the expense of everyone else. That’s what we have now. Rabid populism is just a symptom resulting from what our government has become. When the middle class become poor and the upper middle class see their wealth evaporate they will start paying attention to what is going on. The emperors new clothes will be seen for what they are, the importance of gay marriage, abortion, flag burning ect will give way to what really affects us all. They will of course over react and put in someone like Chavez. It would be wise for the elites of this country to take a look at history and what’s happened south of the border and reign those in power.
The funniest, angriest, yet most thought-provoking screed on class warfare I’ve ever read is THE REDNECK MANIFESTO by Jim Goad (a self-described redneck, not some snide New Yawk social scientist).
”
Stop blaming Wall Street! They’re all a bunch of liberal whiners who drove down stock prices in order to embarass our President. If they were patriotic Americans, they would have bought up shares to show their belief in a strong America. Instead they drove down stock prices, embarassed the President, and give comfort to our foreign enemies who are cheering for any weakness in the US. The Wall Street traders this morning were as bas as Michael Moore, Jane Fonda, and all the other liberal traitors who wish ill on this great country of ours. God Bless George W. Bush. He’s the absolute right man for the job.
Comment by JJ - January 18, 2008 at 2:20 pm ”
Someone needs to tell him to put down the crack pipe…
I think JJ’s comment is meant to be a joke, but, then, I burst out laughing when my aunt gushingly told me how magnificent Bush and his unemployment statistic were, only to discover she was serious (I didn’t hear from her for months after that faux pas).
Gee, BW was just going to complement you on your insight, then saw that it was actually from JJ…nevermind.
By the way, this recession/liquidity-crunch is largely due to ‘too smart for the room-itis’ from Wall Street-types…very reminiscent of the energy trading in 2000 which drove California into insolvency.
There’s a tendency to lay much off much of the housing/credit problem on the ‘marks’, as in they knew what they were getting into when they signed the contract. Turns out that the engineers of this debacle, as well as the rest of Wall Street, were just as clueless.
Michael Metz of Oppeheimer summed it up very well in today’s LATimes: “Investors are frightened and with good reason - in that we’ve only seen the tip of the iceberg with credit problems. Sub-prime is only Act one. The next act is auto loans and consumer credit. After that is commercial real estate. After that come the private equity deals of the last two years at extraordinary levels of valuation and leverage.”
Michael Metz of Oppeheimer summed it up very well in today’s LATimes: “Investors are frightened and with good reason - in that we’ve only seen the tip of the iceberg with credit problems. Sub-prime is only Act one. The next act is auto loans and consumer credit. After that is commercial real estate. After that come the private equity deals of the last two years at extraordinary levels of valuation and leverage.”
Nice quote…and you could see that same quotation here at the blog anytime in 2006…plenty of posters here made that same observation years ago. For free.
Problem is, most of the “non-subprime” types of companies Metz names have already lost 40-50% of their market value in the last six months. Once again, Wall Street warns after the barn door has long been open and the horses are not only loose but lost and half-starved.
He probably got it from here. LOL.
I voted for Bush twice, given the alternatives. Got to give him some credit. Other than some anthrax at the US Capitol, no major terrorist attacks since 911 (unlike London, Madrid, and many places in Asia.) Also don’t understand the diehard love for Bill Clinton by some democrats. Were it not for all the scandals (and most administrations republican and democrat have them) which culminated in impeachment Al Gore might be president now. Also had there been a full time president during Clinton’s second term instead of a full time legal defendent, there might not have even been a 911. Will now stick with RE for the rest of the day
Do you honestly believe we are safe from terroism in this country? I mean you can drop in any city in this country not know a soul and be enjoying some herion or crack in an hour. If they can get tons of drugs in here how hard would it be to get in explosives or terrorists across the border. Iraq is a joke at best just a diversion of tax payers money to Haliburton.
My 3 year old can spell over 200 words and do basic math can your President?
Well if there had been a full time president after Clinton’s second term, there might not have been a 9/11, either.
I agree W deserves credit where credit is due…
http://www.imdb.com/title/tt0854678/
Give him credit? For what?
How many major terrorist attacks were there in this country in the 5 years preceding 911? Just because there haven’t been any in the 5 years since, doesn’t mean it’s because of Dubya.
More American lives have been lost as a consequence of Bush’s undeclared “war” in Iraq than were lost on 911. They label those the acts of terrorists right? So one could argue that since 911, more people have died from terrorist acts.
Were it not for the obvious political actions of the Supreme Court, Al Gore WOULD have been president.
Were it not for the relentless witch hunt on Clinton by the republicans, maybe the guy could have focused on his job, and there might not have been a 911.
What was the national debt when Dubya took office, and what is it now? As Warren Buffett said, “if you give me a trillion dollars, I’ll show you a good time too.” Too bad it’s on all of our children’s collective credit cards.
As Warren Buffett said, “if you give me a trillion dollars, I’ll show you a good time too.”
An idiot can look like BoyGenius with the banks money….. Hmmm….. W?
Oh yeah, I give him credit. I give him and his cronies credit for:
1. Failing to protect our country on 9/11 - stand down -wth?
2. Failing to respond to the largest natural disaster in the US
3. Overseeing 2 recessions - the only other President with two recessions is Nixon.
4. Starting an illegal war and failing (again)
5. Misspending lives and money.
6. Weakening the Constitution.
7. Losing our nation’s reputation as “good guys” and supplanting it with a reputation of “criminality, incompetence and cronyism” - criminality: torture, incompetence: 5 yr old held by TSA, cronyism: TSA no bid contract web site allowed citizen’s private information to be hacked.
I could go on… but why bother? The guy and his cronies failed in their private businesses and now they failed the US - that’s what I give Bush and his cronies credit for. Give them credit for what they have accomplished - it is truly stupendous.
anon, please pass the bong.
More mortgage fraud indictments…
http://www.dailyrecord.com/apps/pbcs.dll/article?AID=/20080119/UPDATES01/80118015
Ho hum…
Too little too late…
This is why I bought the dip yesterday; time to take a bit of money off the T-bond mutual fund table. Frankly, I am a bit surprised about the rush of money into T-bonds at the same time the dollar is weakening on the FOREX market. Don’t infesters know that a T-bond is no more nor less than a promised fixed series of future payments in nominal $US?
When Is It Time to Buy Stocks Again?
By Tom Lauricella
Word Count: 862
Even as investors flee the battered stock market and rush to the safety of Treasury bonds, one market indicator is screaming they have it backward: Stocks are a bargain and Treasurys are massively overpriced.
http://online.wsj.com/article/SB120070661745402077.html?mod=todays_us_nonsub_money_and_investing
“Don’t infesters know that a T-bond is no more nor less than a promised fixed series of future payments in nominal $US?”
I’m glad someone smarter than me said that. I’ve been wondering about that all along. Or does that reflect the expectation of a worldwide decline where they expect the U.S. dollar to regain top dog status after its all played out?
Is that even possible with the amount of debt we carry?
many analysts predict a rebound in the dollar/euro exchange rate for this year; the euro is just as much junk as the dollar (or yen …) so why not.
If someone chooses the ’safety’ of Treasury bonds, I can imagine they don’t want the additional risk of currency fluctuations, even if they know that there own currency is steadily loosing value. Over a 1-2 year time period, you can easily loose more money by currency fluctuations than from the steady depreciation of your own currency against a basket of other currencies.
I day trade the Forex and the dollar has rallied. Traders usually don’t care about the direction as much as the fact that is moving and not in channel or consolidated pattern.
- You can buy Forex CD’s, but you better do your homework about your percieved direction it will go.
Treasurys are showing us the way the market is headed. When BB tells us he is going to cut rates why does Wall Street think that stocks will go up. When will they figure out that we are going down much further.
When I read about people not paying their state taxes that scares me. I am a state employee and if people do not pay taxes I could lose my job. And that is how this whole thing could get much, much worse.
Excellent! One less parasite.
I’ll take a government employee parasite over Halliburton, Blackwater and all the other ficticious companies in Iraq stealing money. I’ll bet half of Dubai is funded by money stolen from the war. How about Enron, is that the kind of parasite you want providing your electricity and natural gas. Should we sell our highways and water production to corporate America? The only thing worse than too much government is no effective government.
How do you know if a mortgage company / insurance bond insurer is going out of business?
If they use phrases like this.
“We are strategically positioned to weather the storm” - no your not
“We are back by a major Wall Street Company, with ___ point ___ Billion in assets” - really?
“This is just a cycle, Management has taken appropriate action to ensure our growth and survival” - they’ve been managers for how long?
“We wanted to calm any rumors, and put to rest any fears. We are in this for the long term.” - long term meaning in business for 3 years total right?
“When everyone else goes under, we’ll be one of the few left standing and will be able to reap the rewards” -
“Management is coming out with a new Alt-A program in the next two months to ensure our survival”
“We are not going Bankrup” - even though your stock is in the toilet.
Ironically you can find all these in “‘Bullshit Shit-Can Speeches, Phrases, and Other Misleading Motivational Tools For The Executive”
Just an FYI from the hinterlands:
(Rochester, NY) Area home sales dip, but prices up
http://tinyurl.com/3b4gju
“We still find ourselves ahead of the rest of the country,” said John Antetomaso, president of the Greater Rochester Association of Realtors.
Business has been vibrant in January, Antetomaso said, with potential buyers buzzing about possible mortgage rate cuts.
Fact: Everyone who represents the NAR is full of bull sunshine. Vibrant? Buzzing? Pathetic.
Rochester? Maybe the seminar buyers have moved on from buying $5000 houses in Buffalo to buying $7500 houses in Rochester. All on credit card, of course.
Talking with paternal relatives in upstate last week and I’m still attempting to digest and analyze the raft of bull$hit I heard. It was warped listening to them discuss RE. It was like listening to chinese or some strange dialect. What I did take from the conversation was a desperation for something to hold on to. They have all this hope that things really are different this time because economic times have been so so bad there. The only uptick for them has been the RE boom so they hold onto it knowing deep down there is nothing else to lift them out of the rust belt economy.
I think upstate NY is more prepared for the nationwide economic desperation that may follow, since they have lived it for the past 20 years already.
It’s amazing that there is a shortage of skilled manufacturing workers in the Rochester area and a number of companies have had to go outside the area to find help. Booming in Rochester are hospital expansions and university expansion and research, especially at the University of Rochester and RIT. The 206 colleges and universities in upstate New York are more per capita than anywhere in the country. Too bad once they get an education they leave for brighter job prospects.
Things are getting so desperate around here that Gov. Eliot Spitzer had a State of Upstate speech to try and rally the remaining inhabitants. For those who like reading speeches, here it is:
http://tinyurl.com/2begy7
Buffalo is funny. My SIL went to an estate sale to look at furniture in Nov. and bought the house instead for 34K. Her son, his wife and two babies are moving there from Cracow, Poland to do a 2 year teaching stint at the University. The place is a 30’s built 3/1 bungalow with fireplace, on a quiet street with old trees. Kitchen had to be ripped out and replaced, floors sanded and the place totally painted–done with family labor. They rented the apt. they own in Cracow to a German family for 2 years at nearly 80% of what it cost to buy the house in Buffalo. Don’t know what the prop taxes are though. And buying was cheaper than renting in a nice apt. building.
I read an article on Buffalo that pointed out that anybody not from the area, buying a house there on the cheap, has pretty much exhausted all other possibilities elsewhere, and has little to provide towards the local economy.
The rust belt is an excellent precursor, for our times.
That’s crazy. So you aren’t going to start a business or support the symphony so don’t come?
At the absolute very least you buy a house in the local economy, you pay property taxes, and you pay utilities and buy groceries. Obviously you are going to have to spend even more than that, which means you either bring in income that you earn outside, or you earn it locally, which is done by providing goods and services to the people of Buffalo (or you “steal it” by living off welfare, but that is a decision that Buffalo and the New York state government has made independent of your behavior). How does this not help Buffalo?
What is this double-talk: fcvk the rich, but don’t come if you’re not rich, because we’re so far beyond what we used to be that we don’t want your little bit of help? Whiney-ass, economically illiterate, sociologist/journalist know-nothings.
I’ve never been to upstate New York, but I have a hard time believing that it’s THAT much worse than, say, Compton or Bakersfield, both of which had their house prices bid up to more than $500k during the bubble. How did upstate New York escape a similar fate, given the ridiculous amount of money in NYC available for speculative purposes?
NYC may has well be on a different continent in terms of it’s influence on the rest of the state with the exception of commutable area to NYC, ie, lower hudson valley.
“I think upstate NY is more prepared for the nationwide economic desperation that may follow, since they have lived it for the past 20 years already.”
Well we do have the Armageddon ready advantages of land ownership and down the street if not first hand knowledge of food and animal farming. Plus we have lots of guns and ammunition!
LOL
As for my personal plan (besides renting) my best friend’s house is over 4000 sq feet. Seeing as 1/2 my stuff is already in her barn while I’m renting maybe she wouldn’t notice if I moved in.
My plan for if hubby lost his job is squatting in the separate 3 car garage behind this 4000 sq ft Fannie Mae foreclosure (garage pictured in photos in link). I could send him out with the other hunters in the state protected property in the back yard for food. It’s surrounded by farmland so I’m not sure if anyone would come to investigate the bonfires we’d start for warmth.
(WARNING: only a tongue in cheek plan, no need for any hurtful labels to be hurled)
http://www.williamcrossrealty.com/propertydetail.php?propertyID=235&photoID=0
I bought an SKS carbine and 9-mm Sig-Saur for my wife, and despite her previous aversion to guns, insisted that she learn how to use them. She turned out to be a crack shot. She balked at firing my Remington 870, though - she’s petite, and the recoil almost knocked her down.
I think we’ll more than hold our own if any thugs ever decide to caper on our block.
Get her a Remington 1100 (gas operated, semi-auto, less felt recoil…..if she is real sensitive to recoil, make it a 20 ga. instead of a 12), and/or some of the “reduced recoil” ammo that they sell
As nice as the Sig is, unless you shoot it all the time, a scattergun (I believe) is the more effective weapon in home defense situations. If nothing else, the first blast from one may discourage someone from continuing what they are doing.
Had a friend close on a house in Rochester between Christmas and New Year’s. When she told me about the prior house she’d put an offer in on, told her she was way overpriced, especially for the work, try to lowball, etc. Now she won’t disclose details of the one she bought, and I don’t ask. Let sleeping dogs lie. Pictures look nice though.
Keep the faith! Everyone knows CFC is too-big-to-fail (don’t they???)…
Doubts Over Deal Hit Countrywide Shares
By James R. Hagerty and Valerie Bauerlein
Word Count: 449 | Companies Featured in This Article: Countrywide Financial, Bank of America
Countrywide Financial Corp. shares dropped nearly 10% Friday amid growing investor fears that Bank of America Corp. could walk away from its agreement to acquire the struggling home-mortgage lender.
http://online.wsj.com/article/SB120070492065001981.html?mod=fpa_whatsnews
Unemployment was 13.2% higher in Dec. 07 vs. Dec. 06…a major recession indicator is here, per the NYTImes.
http://www.nytimes.com/2008/01/19/business/19charts.html?ref=business
(I posted this very late yesterday as well).
In AZ, unemployment rate went from 4.6 to 5.7 IN 2 MONTHS.
Okay, a lot of that is seasonal. Retailers were expected to staff up in December and they did not. But, construction and government are laying off. Commercial construction is finally slowing. Government is wrestling with falling sales tax recipts and a projected budget deficit that has gone from $500M in fall, to $1 billion in December, to $1.3B now.
The worst case scenario keeps being proved to be too optimistic. We keep blowing right through the bottom of their revised worser-worst-cases.
Okay, a lot of that is seasonal. Retailers were expected to staff up in December and they did not.
So the retailers had bad sales numbers, and less payroll to boot. The numbers are worse than they appear.
“to work to speed the release of $29 billion in 2006 bond fund money for road and school construction and levee repairs.”
Roads and levee’s ok, but not schools. Right now they are completing school building projects that won’t even open because projected number of enrollment shortfall.
The unemployment rates in NY state are increasing. Here is a sampling:
New York State’s unemployment rate, after seasonal adjustment, was 4.9 percent in December 2007, up from 4.6 percent in November. New York City’s seasonally adjusted unemployment rate was 5.4 percent in December 2007, up from 5.1 percent in November 2007. The rate in the balance of the state outside New York City was 4.6 percent in December 2007, up from 4.2 percent in November 2007.
For those interested in all NY state employment numbers, here you go:
http://tinyurl.com/36fos7
Pensacola, FL
http://pensacola.craigslist.org/rfs/544244590.html
This guy has been trying to sell this property for several years. It is for sale on craigslist for 135K, and listed on the MLS for 129K. The MLS listing is with his realtor wife. His original wishing price started out at approximately 200K.
He calls it an “estate property?” A trailer in the middle of nowhere? Bring ones horses? Where is someone supposed to put them? The definition of dumbass grows longer every day.
Bring ones horses? Where is someone supposed to put them?
Why in the trailer of course.
that’s real value!!
just to give you an idea what you get in this pricerange in the Netherlands, check this recent entry: http://tinyurl.com/36c78f
This is in a remote corner of the country, low income area, near a small village with nothing to do. No bath or whatever, not even running water or electricity. Not even suitable as a garage but who knows, with luck you might get permission to build a new storage building on the lot (lot size 775 m2). They don’t mention converting into a home so that’s a no-no for sure. But at least it’s well maintained, looks good and includes some free Artwork
There’s a “remote” corner of the Netherlands? Isn’t that like saying there’s a “remote” corner of Los Angeles County?
remote: 1-1.5 hour drive to Rotterdam, 2-2.5 hours to Amsterdam; similar duration by train if you have a lucky day and the train service is available from the nearby city … frankly it’s more a remote corner from Belgium.
But well, maybe we Dutchies are spoiled when we consider 2 hours drive ‘remote’
I’ve taken the train from Maastricht to Amsterdam - it takes up the better part of a day, if I recall. Love Maastricht, by the way, but have they eliminated smoking in bars yet in the Netherlands?
Nice. The graffiti definitely adds a certain cache.
LOL
nice artwork.
Mature plantings.
Yes. A refreshing change from cookie cutter clone homes.
Unemployment in California now 6.1%
http://www.latimes.com/business/la-fi-caljobs19jan19,0,4174787.story?coll=la-home-center
(Again, something I posted very late last night).
good find- I’ll bet most of that increase is RIC layoffs
27% increase YOY - not good. No worries though The Govenator will send out $XXX checks to all Kali-Fornians to spend and get the bubble going…
State’s jobless rate tops 6 percent
Governor speeds up planned construction to provide work
By Dean Calbreath
STAFF WRITER
January 19, 2008
http://www.signonsandiego.com/uniontrib/20080119/news_1b19jobs.html
Fox news just reported “Employment” rate of 95% (since unemployment is only 5%) The economy is doing great, go out and buy a new house!
“The economy is doing great, go out and buy a new house! ”
Just one??!?
As drop continues, Wall Street tries to determine if pullback marks corrrection or bear market
By Tim Paradis
ASSOCIATED PRESS
2:44 p.m. January 18, 2008
NEW YORK – Only weeks old, the new year is already nudging its way into Wall Street’s record books. Far from welcome news, however, the stats only underscore the nervousness investors are feeling about the economy.
http://www.signonsandiego.com/news/business/20080118-1444-wallstreetunease.html
“Wall Street tries to determine if pullback marks corrrection or bear market”
Not craw! Craw! Craw!
I enjoy a periodic trip to Saint Simonds Island for a long weekend and usually stay in the same very nice resort hotel on the water. Received a flier yesterday by email stating that my usual 2/2 condo is now available for $129 a night, not the $295 it was last year.
Have a great trip!
Have a great trip and stay a week this time.
Lennar Corp went down 11.38% in value in the last 24 hours. Any griz our there catching this action?
Looks like the stock market is finally facing the truth that new home values are coming down 50% or more, not just 10-20%. Just today I saw an article somewhere (Barron’s?) that was talking about the HBs including LEN having book value above stock price, as if book value for HBs means anything, consisting as it does almost entirely of inventory.
Nobody wants to face the truth, because it means bankruptcy for most homebuilders, lenders, mortgage insurers, not to mention several million people. So it will likely be a prolonged recession/stagflation, rather than a quick and dirty. Most Americans would rather have communism than unemployment and my guess is that’s what we’ll get eventually.
Thanks Paul, Excellent post.
The buying on the “bottom” will need to end too. So what that the stocks are down greater than 70%, inventory and prices are still @ nosebleed levels. LEN could be one of the many builders mimicking the maiden voyage of the … Titanic
http://online.wsj.com/article/SB120061032319298887.html?mod=hps_us_editors_picks
FYI - Interest rates have plummeted in the last 30 days, especially LIBOR.
Looks like Da Boys on WS might have a chance to re-inflate this bubble (assuming they dont all jump from bridges)…
Mentioned that late last week. That’s the seeds of a hell of a rally that hasn’t started yet, obviously.
What about the impact on housing? This should make the re-set argument a non-issue?
It “should” make things easier but I would say only on houses priced at less than 417k. Otherwise, you’ve still got the problem of people who have to sell one house before they can buy another and reluctance to lend. So less than 417k is what, 1% of California inventory?
Problem is that many houses are now upside down, worth less than the mortgage and no one would refinance someone’s upside down house, ie the ones who bought in the bubble years and those who heloc-ed out at full equity. So lower rate would not help these people no matter how low it is. Also I seen a study showing that most subprime borrowers actually default before the rate resets higher so that aren’t going to help.
On the stock market - I agree, used some cash to buy into this decline the last two days.
If the rally comes to be, what the heck of a SHORTING opportunity it will be!
Ding,ding,ding! Did you miss the bell? Market down 15% in the last 5 weeks. How often do you think that happens?
Interest rates are subject to what econometricians refer to as the “identification problem”: Assuming their movements reflect market forces (already a shaky assumption with the Fed intervening in the background), it is impossible to tell whether the price of borrowed money (aka interest rate) dropped because of a decline in demand for loanable funds, an increase in supply of loanable funds or something else. Given the slowdown concerns, my hunch is that we are seeing the dual consequences of the Fed’s post-August liquidity flood (increase in supply) coupled with a drop in demand for loans (due to recession fears). Both factors act to push down interest rates, which helps to explain the bizarre current appearance of the T-bond yield curve, where anything of shorter duration than 3-years is depressed below 3 pct yield when the FFR target rate is 4.25 pct.
Professor,
Do you think it is possible that the short term Treasuries are going cheap is a wave of reluctance to speculate; return of investment and all? I personally do not see any conservative investment options. Buy low, sell high, what is low these days? Possible investments into a credit implosion when commodities, RE and stocks are all way above fundamentals: drugs used to treat depression.
“I personally do not see any conservative investment options.”
That is the essence of the conundrum, and it appears the plan from behind the scenes is to keep the conundrum alive by continuing the War on Savers, through flooding the money market with helicopter drops of liquidity, goosing stock market prices, continuing to qualify home debtors to borrow amounts they will never be able to repay, etc. If saving money were clearly established as the prudent option, the sham inflated stock and housing market bubble prices would crash back from whence they grew to the sky pre-Greenspan. Consequently, we are all gamblers now, regardless of whether we are aware or ignorant of the situation.
The problem is that almost all financial assets are overpriced. For there to be conservative investment options, asset prices must drop substantially, i.e. crash and the PTB are trying to avoid that.
It’s not really a “war on savers”. Current savers will lose either by asset price collapses or by return suppression. There are some efficiency losses with the helicopter approach but the simple truth is that the dollar-denominated assets are overall not worth their nominal prices and so there’s a lot of nominal losses to take.
“The problem is that almost all financial assets are overpriced.”
I guess that means the numeraire (aka $US) is relatively underpriced?
‘It’s not really a “war on savers”.’
I guess that depends on what the definition of “war on savers” is. My working definition is a monetary policy regime which discourages saving. I admit this definition is more than a little bit circular.
Great post, PB. I’m not an economist, but I’m always seeing arguments that even I can tell are too simplistic — that ignore supply and demand dynamics. For example, everyone just assumes that “recession = lower commodity prices”. This ignores the fact that commodity producers often reduce production (supply) along with, or in advance of, perceived drops in demand.
How to (legally???) make a silk purse credit rating out of a sow’s ear credit history:
San Diego firm uses loophole to boost credit scores
By Janet Morrissey
NEW YORK TIMES NEWS SERVICE
January 19, 2008
A host of companies have cropped up in the last year that offer struggling subprime mortgage holders quick-fix programs aimed at raising their credit scores.
Some of their methods include piggy-backing onto a stranger’s credit card and receiving pay stubs from a fake employer. The latest comes from a San Diego company, TradeLine Solutions, which claims it can improve a borrower’s credit score by adding somebody else’s top-notch credit history to the borrower’s history.
http://www.signonsandiego.com/uniontrib/20080119/news_1b19money.html
I posted their PR on here about a month ago. Really blatant scuzzy outfit.
“The latest comes from a San Diego company, TradeLine Solutions, which claims it can improve a borrower’s credit score by adding somebody else’s top-notch credit history to the borrower’s history.”
This sounds like a good way to pocket a few extra bucks, kind of like marrying a foreigner so s/he can stay and work in the U.S. I’m (mentally) filing it!
How to squeeze blood from a turnip.
Cashing in before the crash
http://www.latimes.com/business/la-fi-shortsell20jan20,0,1815515.story?page=3&track=mostviewed-storylevel
Inflation is the future.
The reason why oil prices won’t go down much is because major producing countries, such as Venezuela, greatly subsidize the price of petrol.
About 85% of the world’s oil supply is controlled by state-run oil companies. These state-run oil companies have different priorities than bringing new oil to market at competitive prices.
“At a Caracas petrol station last week, Gloria Padron, a paediatrician, ticked off items that would cost about the same as the 60 litres of fuel gurgling into her Land Cruiser.
“Let me think. A Magnum ice cream. A cup of coffee. A cheese and ham arepa [sandwich]. Small stuff like that. Can’t say I’ve ever really thought about the price. Why would you?”
Cheap and cheerful
Just got back from a trip to Manhattan Kansas to see my son off to Iraq. Some observations:
1. Bought etickets on the net: $188 for a one way trip. Everything went great. Left San Jose on time, arrived in Denver on time, arrived in Kansas City on time. Only a 30 minute layover change of planes. Flew Frontier Air on new Airbus and best flight ever. Would fly them again!
2. Drove son’s car back to CA via Wichita, 54 to Tucumcari. Took the 285 into Santa Fe, the 25 to Albuquerque and on to Socorro, the 60 to the 260 into Holbrook Az, and the 40 back into CA, on to Bakersfield and then over to the 101 into Salinas CA.
3. People in Kansas were friendly and helpful and a joy to be around. A 180 degree change from those serving the public in CA.
4. I love Santa Fe but it’s not the city it used to be. The only thing left that was still great was the food at Tia Sophia’s.
5. Best part of the trip was all that undeveloped land that they ‘aren’t making anymore of’. Visited my cuz in Magdelina NM off (60) out of Socorro. A year ago he bought 5 acres for $18K with water rights (water at 200 ft). Put in septic and electric for $1200. Great place. It’s tempting to buy acreage near him.
6. Motels owners were hurting and said so. Tucumcari looked devastated and got a good overnight rate. When I got into Socorro the motel wanted $50 and I told him that was out of the question as I got a much lower rate in Tucumcari so after pretending to calculate some numbers said, ‘I can do that’.
7. Off (260) into Holbrook I saw lots for sale at high prices in the middle of no where. Unbelievable. But then again I saw ugly lots and houses around Wichita being developed too.
8. In an hour or two I’m going to start up the first item on my ‘Bucket List’. First up, learn to fly fish.
Salinasron,
my best wishes to your son and to your family. Enjoy the fishing.
Salinasron,
I grew up in Topeka and despite Kansas’ travails, it really was a good place to live. A big enough city (150,000) to have just about everything, but small enough and cheap enough to feel inclusive. You could buy a nice home in a great neighborhood for under $200K and wages were not much lower than in Cali (except if you’re a nurse, firefighter, policeman, or prison guard; sorry, no $120K/year RN’s in Kansas…these things have been highly unionized in Cali and the pay is much much higher in Cal). But, compared to the people I’ve met in Monterey, Visalia, and Eureka, people are so much nicer and tend to live within their means in Kansas.
Blessings to you and your family, good luck to your son.
Safe and happy returns!
CA has lots of people who are nice, those who visit are sometimes the snobbiest of em all. If we didn’t have to put up with residential relocations of wealthy snowbirds and others from Canada and all states in colder regions.. and their, it is owed to me attitude.
Can’t believe the pushiness from senior citizens from other regions visited upon us because of our climate and the Bob Hope Classic. Sheesh.
Can’t get near a Food tasting station at Costco for the SENIOR LUNCH groups of old men from other states. Pushy sons of guns.
Nice post. Like your route — off the interstates. I share the same impression with you on Kansans. Also I have a little remote land not too far and unlike Magdelina. In Apache County AZ near the NM border it goes for between $750 - 1,250 an acre (in 40 acres parcels).
Also nearby: http://www.sierrahighlandsranch.com/index.html
At some point last fall in one of the discussions here identified an anonymous trader who had made an enormous bet that the dow would crash in November or thereabouts. I can’t remesmber the details, but it was a huge amount of money on the table.
Does anyone remember this and know what the outcome of that trade was?
Thanks,
Jer
It turned out to be a hedge. Adam Warner of adamsoptions blog figured it out. It’s in the archives of his blog. I also posted it here but don’t remember when it was exactly.
Actually it was cheap financing.
Here’s the idea in miniature.
Imagine I give you a sell option of 1000 shares of SPY (S&P ETF) at 1500, and a simultaneous call option of 1000 shares at 1000.
At the expiration date, you are “guaranteed” to get 500 * 1000 = $500K.
So the only point is what is the cost of the $500K discounted to the current point? That would be the interest rate. If that is cheaper than what you can get on the market, you should do it!
This is the main reason that the Fed has no control. The derivatives market makes any kind of capital restrictions into a complete and utter joke!
http://www.businessspectator.com.au/bs.nsf/Article/Shares-hidden-downside-AWRKP?OpenDocument
It’s cold here today. The temp is near zero and I’ve been waiting for the postman to show up with the rebate check. Do you think it will be means tested like the 2001 rebate?
If they means test this thing, it would be absolutely crazy! Basically, that means they’ll send the checks to people who are PART OF THE PROBLEM. Why not send checks ONLY to people who don’t have adjustable mortgages or HELOCs? Now *that* would make sense!
Of course, people who are in the “taxpaying class” like me are offended by these checks. If they want to lower everyone’s taxes by $800, don’t send out checks! That’s expensive. Simply put a “Subtract 800 from the “Taxes You Owe” box on next year’s 1040″.
(If they did that, companies like H&R Block can make a fortune paying people their $800 refunds in advance–for a $150 fee.)
Simply put a “Subtract 800 from the “Taxes You Owe” box on next year’s 1040″.
That would work for most of us, but they want J6P to spend that money within the next couple months so he can stimulate the economy. Next year would be way too late to stimulate anything, although I think it’s way too late already.
Yeah!! $800 to stimulate my savings account!!
It is already a battle.
Bush and Republicans wnat to do away with the 10% bracket, making it 0%. The result is $800 back for single and $1600 back for married…. IF you make enough to cover the full 10% bracket.
Family of 4 struggling to get by on $22K would not get anything back. They already get $10,700 + 4×3400 = $24300 tax free.
Wiping out the 10% bracket gets them nothing.
Within minutes of Bush making this proposal, the Democrats said it was a no go. It has to be “fully refundable”, meaning you get it even if you have little or no tax.
Then the IRS said they can’t deal with it until June. Between now and then they are crazy booked with 2007 taxes.
This is why the markets headed down after Bush’s speach. Realization that the stimulus package is not going to be done in days or weeks.
The following is a message from a woman who runs my mom’s stock club. Proof that there exists an alternate universe to the one found here:
“Observations: Some/all of you may have heard Bernanke yesterday. I was amazed that Jim Cramer on his program - also Jim in an interview with Donald Trump - and later, Larry Kudlow, Art Laffer and other eminent types - hardly minced words and essentially called Bernanke an idiot who doesn’t know what he’s doing - on national television. Consensus seems to be that he’s a follower, not a leader, unlike Greenspan. Consensus also was that he needed to lower the rates now and quit talking abt it. Trump snorted at the possibility of 50 basis points and said we need 100 - NOW. I was pretty blown away at the passion and acidity of their comments.
I just got an email from the technical analyst/trader Bob and I know and his comments. He’s VERY technical - deals closely all the time w/the McClellan Oscillator and Fibonacci. His email from yesterday noted that
Bush will announce a “quick fix” program tomorrow. (That was this morning. He delivered that.) Also said, “There is also a chance the Fed will announce a surprise cut in interest rates early tomorrow moring.” (This morning now.) “This one-two punch on option expiration day would cause a very sharp rally up the the last gap at S&P 1418, and potentially higher.” He says the McClellan Oscillator seems to indicate this market is going lower. One of his Qs is, Even with a shot in the arm, will it hold?
We haven’t heard from Bernanke yet - up to this moment. Let’s hope for some upswing today. Good luck to us all!”
What is amusing to me is that I took my mom’s retirement fund last February and bet it all on SRS at 77. Her stock club maybe should have followed my advice.
Nice piece by S. Das on the risk involved in emerging markets, esp. China, India and Russia.
http://www.minyanville.com/articles/credit-india-china-economy/index/a/15519
http://www.larouchepub.com/pr/2008/080117ambac_demise.html
Bond insurers collapse threatens $2.6 Trillion bond market.
http://www.larouchepub.com/other/2008/3502debt_crisis.html
Debt crisis moves to center stage.
The ability to turn $1 in mortgage debt into $3 in securities explains why residential real estate became such a speculative bubble. The name of the game was not selling houses, but selling mortgages to fuel the securities business. The real money was not in the loans themselves, but in the speculation which they enabled. With the connivance of the ratings agencies—which are actually just private companies which get paid for the ratings they issue—these mortgage-backed securities were broken up into slices, or tranches, with the top tranche often having a higher credit rating than the mortgages upon which is was nominally based. Pools of subprime mortgages were thus transformed into securities with triple-A ratings which could be sold to pension funds, money market funds, and others, as supposedly safe investments. The tranches that did not qualify as triple-A were then often pooled and resecuritized into collateralized debt obligations (CDOs), producing yet more triple-A tranches, and some of these CDOs were resecuritized into CDOs-squared, or CDOs containing other CDOs, which naturally had their own triple-A tranches. This process of turning sows’ ears into silk purses produced a string of securities whose value began to vaporize at the first hint of trouble in the real estate markets.
One of the best explanations I’ve seen so far of the “debt as assets” speculative bubble.
“From the rites of the jungle witch-doctors, which distorted reality into grotesque absurdities, stunted the minds of their victims and kept them in terror of the supernatural for stagnant stretches of centuries—to the supernatural doctrines of the Middle Ages, which kept men huddling on the mud floors of their-hovels, in terror that the devil might steal the soup they had worked eighteen hours to earn—to the seedy little smiling professor who assures you that your brain has no capacity to think, that you have no means of perception and must blindly obey the omnipotent will of that supernatural force: Society—all of it is the same performance for the same and only purpose: to reduce you to the kind of pulp that has surrendered the validity of its consciousness.”
John Galt
http://www.larouchepub.com/other/2008/3501system_dead.html
The system is dead - now what?
Leadership emerges from the financial rubble — but overseas, not on Wall Street nor K Street.
Ackermann seeks greater banking transparency
By Gillian Tett in London
Published: January 16 2008 22:08 | Last updated: January 16 2008 22:08
Josef Ackermann, chief executive of Deutsche Bank, has called for a thorough overhaul of the operations of investment banks and regulators to combat a widespread loss of investor confidence in complex finance.
Banks needed to find ways of making complex structured products, such as mortgage securities, far more transparent, thus reducing investors’ dependency on credit ratings, Mr Ackermann said.
http://www.ft.com/cms/s/7c6e6204-c470-11dc-a474-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F7c6e6204-c470-11dc-a474-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2Fa1305146-c5f7-11dc-8378-0000779fd2ac%2CAuthorised%3Dfalse.html%3F_i_location%3Dhttp%253A%252F%252Fwww.ft.com%252Fcms%252Fs%252F0%252Fa1305146-c5f7-11dc-8378-0000779fd2ac.html%26_i_referer%3Dhttp%253A%252F%252Fwww.ft.com%252Fhome%252Fus
Watch out what you wish for, Jas Jain.
Worried about inflation? Just wait: James Saft
* Reuters
* Thursday January 17 2008
(James Saft is a Reuters columnist. The opinions expressed are his own)
By James Saft
LONDON, Jan 17 (Reuters) - Never mind inflation, the powerful and long-lasting effects of the credit crisis will rein it in soon enough.
With oil, gold and other commodities at very high levels and U.S. producer prices up 6.3 percent last year — the most since 1981 — fears have risen that an aggressive round of rate cuts by the Federal Reserve will embed inflation.
Consumer price inflation for December was up 0.3 percent and has risen 4.1 percent since a year earlier.
But these are likely to prove lagging indicators, even if demand from emerging markets remains strong for raw materials. If credit is being strictly rationed and asset prices falling — as they are in housing and in stocks — investment, consumption and just about anything else that can be put off will be put off.
“The strong probability is that we will get at least disinflation in 2008,” said George Magnus, senior economic advisor to UBS.
“I’m not aware of any banking crisis in history, almost without exception, that was not accompanied by falling inflation.
“When balance sheets are shrinking and credit restriction is being applied, the whole effect is to cause people either to not be able to make spending decisions or to defer them. It puts a downer on aggregate demand,” Magnus said. A round of poor data, notably unexpectedly weak retail sales, prompted rumours of a highly unusual inter-meeting rate cut by the Federal Reserve, whose next scheduled meeting is Jan. 29-30.
The Fed declined to comment.
http://www.guardian.co.uk/feedarticle?id=7234617
If the monoline guys like Ambac, etc go down, which seems more likely every day with the Fitch downgrade from AAA to A of Ambac on Friday afternoon, what would you say is the best place to put your assets? Sell all stocks & keep in cash, buy gold and/or commodities, etc?
I have a good chunk alread in cash, but some still in the market and am torn between inflation going crazy with Fed cuts (eg: buy gold and/or commodities) or deflation setting in due to much lower demand due to recession (keep cash).
Thanks for any input you have.
I’d buy the dip on the stock market (but be sure it is a really big dip — at least 15 percent off the recent high) then hang tight while stimulus announced and unannounced leads the market up to the next dumping opportunity.
Thanks Prof Bear. Do you think gold is overbought right now and thus better to avoid it? What about the existing money in the market. Sell it and then wait for more downturn or just hold tight?
Thanks again….
JUDGMENT CALLS
Robert J. Samuelson
Lollipop Economics 101
An ‘economic stimulus’ package would be less about altering the unemployment rate and more about influencing voters’ views of vying politicians.
Jan 21, 2008 Issue | Updated: 2:09 p.m. ET Jan 12, 2008
http://www.newsweek.com/id/91687
“The idea is to try to give all the information to help others to judge the value of your contribution; not just the information that leads to judgment in one particular direction or another.”
Richard Feynman