Bits Bucket And Craigslist Finds For March 10, 2008
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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I’m sat at home today weather ain’t good in the UK. The mad flipper who thought he’d stole the house down the street is rebuilding the kitchen and bathroom. He has had the house for over five months now and it’s still sitting on the market. Having bought it for £183,000 he put it straight back on the market for £219,995. He told a neighbour that the problem he has is that new houses are on the market for less, so he’s remodelling.
What do UK estate agents charge? Here, in the U.S., it’s typically 5-6% (2.5-3.0% for both they buy & sell sides).
My sources tell me that 1-2% is generally the prevailing rate.
Wife just sold her parents home in the UK….1.2% for RE agent
And UK agents actually wear proper suits (rather than khakis, logo shirts, and silly gold blazers).
Actually, my RE agent in California wore a mu mu. Only thing that would fit her, I think. Decent agent, though, considering.
I thought Century 21 got rid of those tacky gold blazers?
–
Yeah, but we are #1! We have trade groups to squeeze people and oversee propaganda campaigns.
Jas
US agents charge more for doing nothing. Sellerss agents know little about the house and the buyers’ agents are out to make the deal by any means. They just want to take the commission and move on. Sometimes I think it’d be best to eliminate the agents altogether and just send 6% of the selling price to NAR who can then distribute the largesses among their members.
What’d it cost to rebuild a kitchen and a bathroom in UK? Won’t he have to list the finished product at a higher price than £219,995?
Just about the only way to get quality work done in the UK is to hire an illegal Polish or Hungarian immigrant. The British blue-collar work ethic sucks - no pride in workmanship whatsoever, and they charge a small fortune. Materials cost in British Pounds what we pay in dollars.
Just watched the CNN report that the West Country is getting hammered. Keep safe.
The Guardian states
“The amount that sellers pay for an estate agent’s services depends chiefly on whether they use just one agent or several. The majority of estate agents charge a percentage of the sale price - usually between 1% and 2%. Multiple agency agreements typically charge up to 3.5% paid to the agent who ultimately secures the sale.”
You can go as low as 0.5% if you use an internet based estate agent, but I suspect that is because your doing the majority of thw work for them.
in Netherlands the charge has decline from about 2% to 1% of the sales price over the last five years or so. There are many other pricing models now, like some that offer the basic realtor services (but without tours for prospective buyers) for EUR 500-800, just 0.2-0.3% of median sales price.
lots of FSBO in Euroland too
if you’re deaf and blind you might need a realtor
otherwise they have this thing called the internet and………..
sure, I have enough experience with EU realtors to know that you usually get a far better deal by arranging everything yourself. Although Dutch realtors officially work for the party that hires them, in reality they simply try to fill their own pockets as much and as quickly as possible; all the rest is irrelevant. And now that the Dutch housing market is slowing I still don’t see proof that realtors add any value.
Let The Bankruptcies Roll…
http://www.lewrockwell.com/rozeff/rozeff198.html
“The used-car market is a secondary market. So is the New York Stock Exchange.”
Love it.
“There are two Americas: the official America of endless b.s., and the real America glimpsed in the unhampered and uninhibited writings beneath the surface of the blogosphere. I do see hopeful signs of light in the blogosphere.”
So do I. Thank you Ben for this blog.
I was just watching the news. ANOTHER rate cut on the way? Are you freakin’ kidding me?
Is that another rate cut or another Inter-Meeting rate cut?
the FED should step up their meeting frequence, so they can do even more (in-between) cuts
ZIRP, baby, ZIRP!
Let’s go. I’m waiting for the “quantitative easing”, personally.
Pretty soon the price of $US is going to look so low that even gold bugs who “know” the price of gold will always go up will want to buy some.
What you are saying is that the US dollar will reach a bottom pretty soon. Do you really believe that? Gold price rise now is nothing but a proxy for decline of the USD. The movements of the Australian dollar and gold (if both denominated in USD) have an 80% positive correlation. I actually agree the USD must firm up some time, but Warren Buffett said yesterday he thinks the USD decline is a long-term phenomenon. I wouldn’t want the physical metal myself (storage cost; no interest paid), but the interest-bearing Aus govt bonds seem to be an easy vehicle for riding the commodities wave. You may be right in predicting that wave will break. Where is YOUR $$$?
Pretty soon the price of $US is going to look so low that even gold bugs who “know” the price of gold will always go up will want to buy some.
Sure, as soon as I can pay off my house for a few coins, I will. But I’m certainly not going to try to save “dollars”. That’s like trying to save bananas!
We save bananas in the freezer then make banana bread with them. What I wouldn’t do to get a slice of warm banana bread out of the oven right now. Would I give you dollars? Absolutely!!! Would I give you gold? I am not that hungry yet.
Bernanke last said that he would cut rates with an eye on inflation. Now that HYPERINFLATION is upon us, he’s still going to cut rates? This guy’s dangerous.
Most Agents don’t earn the 3% here. One day, I hope they cap their fees as well as Mortgage People. Highly unlikely.
Who is “they” in your statement. If you mean the Goverment should cap agents fees, I strongly disagree with you. Let the free market roll. If someone wants to pay 6%, let them. I am however concerned about colusion. How is it that all agents charge 6%? You figure someone would charge 4%, then another 3%, etc, until a minium % is found to still make a profit. It seems to me that they are artificially set high at 6%.
The market won’t do it all by itself. It’s like an unwritten standard that sellers pay 5-6% - doesn’t seem to be challenged very much. The last thing I want to see is government regulating, but when it comes to money, greed is very hard to control for most, so someone needs to be looking over the shoulder of the greedsters. any suggestions?
I agree with you somewhat, however the role of government should be to set a fair playing field. Prevent colusion, monopoly’s, etc. They should never control the price. Look at the US farm industry for an example. If it weren’t for government price fixing, milk would be like 1.00$ gallon. Before anyone gets on me about “hating on” farmers, I have bailed my share of hay and cleaned my share of pig pens. The only solution is competition. I don’t believe the competition is fair right now. I think their lobbyists are preventing the government from going after them for colusion. Just like that 60 min special about that seattle company that wanted to charge like 500$ to complete a deal. The NRA got together and tried to block them from access to the MLS, and did!
..
NRA ??? (National Rifle Association)
I think that you mean…. the NAR (National Assoc. of Realtors)
On second thought, maybe it was the NRA
The main reason there is Gov price fixing is to aid the Farm Conglomerates who give big $ to congresspersons/senate persons, not at all to the little farmer, who might get a pittance. It is payback for the Corp Farming industrial complex.
Yeah right. We’ve seen where the “free market” mantra has gotten us.
We have also seen where the socialist market gets you… Russia, China, etc. We need a properly regulated free market, which we don’t have.
Yes. We need a properly regulated free market. We’re in agreement.
None agrees on what the “proper regulation” might be, though.
None agrees on what the “proper regulation” might be, though. How about we do it like the Chinese do: You can do whatever you want until you reach the line, then we execute you.
In the Syracuse, NY area where homes are more frequently in the $100-$300k range, realtors ask and don’t negotiate down much from 7%.
Sounds like travel agents… That’s OK, I’m sure a few very smart folks are ironing out craigslist of real estate as we type this.
–
Don’t we want our realt-whores to live better than teachers and firefighters? We have our priorities and the Europeans have theirs.
Jas
Median income for RE agents is only 36k.
Commercial RE median supposedly is 60k. Know a few Comm RE persons who only make big $ like winning a lottery ticket. Rarely. Most of them make no money for years. Then POOF, Know a couple of women who finally divorced the Comm RE guys cause it tends to be TEN 10 long yrs before $ comes in.Meanwhile the wife brings home bacon. Guess it must get tiring to fund some persons life w/o regular $ Income.
Did anyone see the 60 Minutes interview with Carl Icahn last night? What a parasite. I wish people who do business with him on the everyday level, like plumbers, grocers, drivers, etc. would charge him like $100,000 an hour, or $50,000 for a tomato or something. In other words, he and people like him ought to pay out the wazoo for products and services they need just to live. Then they’d really learn about value. Now, if the guy was able to take one of those companies he raids and turn it into something really productive and valuable to people, I might think differently.
Wall Street needs to be relocated to Vegas and relegated to the same status and not interfere with people just trying to live their lives.
I watched it with my wife. I can’t believe we still have a functioning TV set in our apartment. The fact they tried to portray him as a good guy was disgusting. I guess he is like Gordon Gecko, “a liberator of companies”.
i watched it as well. what a sleazeball and his trophy wife
i made $300 million and ran and f**k the rest of the shareholders and company employees
“I guess he is like Gordon Gecko”
I was wondering about that, is he the real Gordon Gecko? That character might just be a composite, but Icahn probably was a big part of the inspiration.
I can’t watch a lot of that stuff anymore. It’s not good for my health. Besides, I don’t want to have to practice anger management on a Sunday evening on the couch.
http://biz.yahoo.com/ap/080310/china_trade_surplus.html
China’s trade surplus drops a whopping 64%
The talking heads are attributing the change to the massive snowstorms last month. (Which to be fair, were devastating).
“We think the sharp slowdown in China’s export growth in February is temporary,” Lehman Brothers economist Mingchun Sun said in a report to clients.
…but … I’m not so sure. A 64% drop is off the charts. And not all of China was affected by the storms. And to my knowledge there were no port closures. I think a very large piece of this slowdown is the American consumer running out of steam…
This is a very big story to watch, imho…
“slowdown in China’s export growth in February is temporary”
“Temporary” sounds like “contained”.
A 64% drop is not necessarily off the charts. If imports and exports are in balance, an increase of one piece of bubble gum imported would result in an infinite increase in the trade deficit.
Wishful thinking. I assure you it was not offset by Chinese imports.
You claim a 64% drop is off the charts. I demonstrate that a 64% drop is not necessarily off the charts. Has nothing to do with wishful thinking.
A friend of a friend is a longshoreman in Long Beach who is certain that incoming cargo is down at least 10%.
Any public data to go with that observation?
Look at railfax, the carloadings for intermodal are down. I work at a yard in the midwest, yesterday they cut 52 out of 80 employees. Some of it is due to the chinese new year catching up. (takes about 6 weeks for a container to arrive, 4 from europe)
http://www.portoflosangeles.org/factsfigures_Monthly.htm
Just like airline load factors. not up, not even level.
Maybe China is just becoming too expensive as a source of cheap crap. I was out yesterday looking for a pair of shoes for sailing and came across a pair that I knew was made in China (moved the factory from the US to China 10 years ago). I took a look at the tag and it said “Made in Vietnam”.
Still didn’t buy them. I can’t pick up a pair without thinking they’re a ripoff. $25 when they were made in the US, now they’re $50 made in a low-cost country.
Yes, inflation is really hitting hard in China and it’s going to not be the endless source of dollar store cr@p.
But before Americans rejoice, the fact is that China sells to the US and buys from the Middle East & Europe. So, even with a smaller Chinese trade gap, I don’t think America is out of the woods yet. The gap could be very well because of the price of oil and more imports of capital goods from Europe.
they rejigged the way exports are accounted for as opposed to last year, therefore the huge drop reflects this - already reported widely
the CMBX is currently indicating a default rate that is four times anything ever seen in the history of the CMBS market (Commercial Mortgage)
in the absence of a market for the securities held by many mREITs, most portfolio managers must use the CMBX and ABX indices to mark their portfolios to the market. As Fitch Ratings pointed out last month, the CMBX is currently indicating a default rate that is four times anything ever seen in the history of the CMBS market.
So, managers must mark their portfolios to values that do not correlate with anything even close to actual performance.
Unfortunately for REITs that are highly leveraged, these marks can also lead to margin calls which cannot be ignored – hence the aerial somersaults being performed by the funding desk at Thornburg Mortgage (TMA) last week (with a perfect triple twist).
Bogus analysis. The CMBX is predictive. Based on the current defaults, this is indicative of future defaults and with good reason. Never before in the entire history of corporate debt have so many companies been at risk of massive default.
Exactly. I’m tired of hearing people says that the CMBS spreads are bogus. Yeah, they’re predicting something historic in terms of credit defaults. Why is that such a surprise after such a historic abuse of credit in recent years?
Something peculiar is going on. Around the Rockville, MD area I am seeing a significant amount of “for lease” signs in front of commerical real estate buildings. You can’t drive a block without seeing one. Maybe this is an anomoly, because they are building a bunch of new buildings in the area, so if supply were so high, why would they build more? I must be missing something.
This weekend, I drove through few cities in Orange County, CA and I saw for-lease signs everywhere (Beach blvd, Brookhurst st, Harbor blvd). Almost all strip malls seem to have one and some of the professional/office buildings as well.
And few going out of business signs (like Wickes Furniture). I was only surprised that RV stores aren’t hanging “out of business” signs [yet]….
No doubt. Retail vacancies are up huge the last 12 mos and increasing. This is very worrisome to anyone financing CRE retail properties. Cap rates are moving up and min LTVs are moving down. I saw a 13 cap last week in Houston come across my desk. It was a single tenant retail building. Decent building, B credit tenant. Pretty good investment as long as the tenant sticks.
CAP rates still suck around here but I agree there are difficult financing terms….The CAP rates on apartments are ridiculously low and the buyers are lined up to buy them…
Some -plexes and small apts are sitting and listings are expiring where I look. I agree, the prices some are asking is crack induced. They’ll just sit.
I knew there couldn’t be any truth to this WSJ story.
Malls, Offices May Slump
Less Steeply Than Homes
By PETER GRANT
March 10, 2008; Page A1
http://online.wsj.com/article/SB120511166583823441.html?mod=fpa_whatsnews
And a Sunglass Hut and a jewelry store closed on the shopping plaza (we used to call them strip malls) that includes the Whole Foods on Rockville Pike. The big space that used to hold the Tower Records is still empty though it did have a Halloween specialty space for a bit after Tower was gone.
There is a commercial building, 3-4 stories, along 128 (south bound side) in Woburn (Boston burbs, pretty prime location) and construction on it halted 3-4 months ago. They graded the site, put up a steel skeleton and walked away. Didn’t even bother to turn off the hanging work lights. Very unusual and a nice daily reminder.
Does anyone know what it up with that property?
(Something peculiar is going on. Around the Rockville, MD area I am seeing a significant amount of “for lease” signs in front of commerical real estate buildings.)
I’ve noticed that the residential lending industry was concentrated in suburban office centers — ie. Orange County not Los Angeles, East Bay not San Francisco, Long Island not Manhattan. The downtown money centers will be impacted eventually, but the suburban offices are a year plus ahead.
I work in Mt. View, CA still see tons of empty commercial bldgs on my way to work. Going on 2 years and these places still aren’t occupied. Overbuilding? Oh yeah.
Besides vacant buildings there are under utilized buildings….Just look at the parking lots in these R & D building during the work day…Many are half full or less….
Oh yes, many, many buildings in Silicon Valley have not “filled up” since the dotcom bubble popped. And in the intervening years, I’ve seen new commercial construction in the area (many thanks to the easy money policies of the Greenspan Fed!).
Perhaps some of those R&D buildings will remain as the empty legacy of a Golden Era (in the Valley, anyway), in much the same way empty manufacturing and warehouse buildings were such in many parts of urban America in the last century.
Some vacant buildings in Foster City too. And some of them are pretty large. There’s a couple I don’t think have ever been occupied…completed just as it all started to unwind.
I am seeing the same here in PHX. There have been vacancies in buildings for a long time, with no signs pushing them. NOW, EVERY building has sign pushing their vacancies.
My suposition is that it is similar to the residential thing…. I knew people that own investment properties that ehy let sit empty. I asked why, and they would say that they were making the money on appreciation and leasing itout would just get in the way.
So, while commercial property was going up in value, a vacancy wasn’t a big deal. You may be negative cash-flow, but you are making it up on appreciation. No more. Now you better be cash-flow positive to cover the rate of depreciation.
The shopping malls in Dallas were filled to the brim this weekend. No parking spots, almost like it was Christmas or something. No sign of a recession, thats for sure.
No signs of a recession in SF Bay Area either.
Filled with people doesn’t necessarily mean retail sales. Window shopping is free, and its the season to raid the 90% off winter clothes racks.
So you’re not seeing the “Going out of business” sales I’ve seen? Especially in the furniture sector. Sure, some of those stores will stay open after cleaning out their debt enough to get the store, but they often get bought out for virtually nothing by a big chain.
Can one buy real time satellite/aerial pictures? Seems like an automatically generated week/over week index could be created
For the koolade drinkin a$$hat RE mobsters who believe retiring $40k/yr millionare boomers are retiring to your town, you better take a looky here….
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/03/09/REDHVBQ2L.DTL
Interesting article. I would also like to see the stats on the number of boomers who are second home owners. My guesstimate would be that it’s a big percentage. So, even if retiring boomers decide to “age in place”, they’ll most likely do it in one home, not two, to cut down on expenses, travel time, and stress. Many people I know in Maine maintain two places until retirement, then get rid of the city residence and move to their vacation homes full-time. Which will mean a lot of extra properties for the market to absorb.
Proximity to Health Care may play a important role in what the boomers do…I know several sixty something’s that have sold their 2nd residences in the country because they do not want to be far away from their doctors or a hospital….
New England country living is not for everybody, but this soon-to-be-former metro dimwit loves it, even in the winter. From our town, it’s a 30 minute drive to the nearest hospital (on a clear day, when it isn’t snowing). There’s no local fire department and no police force. Despite or because of this, people tend to live into their 90s and die in their own beds, probably because of the clean air and water, lack of light pollution, peace and quiet (which allows you to get a good night’s sleep) and the ability to grow, catch, gather or shoot your own healthy food.
“Proximity to Health Care may play a important role in what the boomers do…I know several sixty something’s that have sold their 2nd residences in the country because they do not want to be far away from their doctors or a hospital….”
“New England country living is not for everybody, but this soon-to-be-former metro dimwit loves it, even in the winter.”
But I’m willing to wager they don’t love you. And I double down and say you won’t handle it well as you age and that is the very reason most of them leave…. at a loss of course.
The metro dimwits cannot sustained New England winters long term. I’ve seen this happen before in VT and NH and we will see it again. Any northern New Englander who suggests otherwise is fooling themselves. There was a mad dash out of northern New England by metro fools after the last bubble/bust cycle 1985-1999. This one is no different other than the magnitude.
Agreed bicoastal!
I’ve run into people in meetings in this area that like to mention they own 3 maybe 4 homes across the country and chose which one is declared their primary home based on tax laws. Most of these people are in their 70s. I suppose some of those homes could stay in the family but if families didn’t want them or couldn’t aford the upkeep, that would really escalate available inventory as we start losing boomers.
Wait until those Boomers hear that their Social Security check is not going to be nearly as large as promised.
Social security?? lol
Can someone explain why all the newspaper circulars yesterday were filled with toy ads? Is there a disproportionate number of children born in March (I thought it was August and September)? Is the Easter bunny trying to elbow out Santa? Seriously, when I was a kid Easter involved chocolate and jelly beans and that weird plastic “grass.” Is it for toys now too? I think I missed another cultural shift.
I had the distinct misfortune to spend a couple of days last week helping a friend with a business matter. He had his 2 year old sprog running loose in the house the whole time, screaming and yelling, knocking stuff over. I wouldn’t last one day as a mother. And the stuff they make for kids to watch on TV and DVD! It’s no wonder they grow up to be ADD and narcissistic! Have you ever watched any of them?
like i said i love kids especially when they go home with their parents. not all kids are like that.
my sister comes over with her son and the tv is always on ther dvd of the week right away
hey tx we must have more patience with the youngins
Patience and kids are both overrated, IMHO.
I am a failure as a Utero-American.
Lucky for you (maybe not for the rest of us) that your parents didn’t think so.
This is the dumbest argument I’ve seen.
Just ’cause the parents wanted something, does that mean we have to follow?
To use that age ol’ charmer, if your parents jumped off the bridge, does that mean you have to join them?
I think that its ok if some people choose to not have kids. Of course, it would be nice if they did not belittle those who do chose to do so.
There was an article today in the local paper about water supply issues. Most water district managers quoted in the article said that Colorado’s population cannot continue growing unless we cut back on per capita water consumption. A few developers quoted said that the problem is being blown out of proportion and that we need growth to prosper (more like so thay can prosper).
A lot of people out here are aware that never ending growth is not the answer. Unfortunately the construction, cheap labor and and immigration lobbies are still very strong.
“Just ’cause the parents wanted something, does that mean we have to follow?”
I don’t want to jump off the bridge, but if parents did something and it personally benefitted me, I’d like to follow that example. Having said that, I think people should be respected for their choices as long as they don’t harm others.
I often wish that adults were sterile in certain parts of Afghanistan, Pakistan and Middle East. They make too many suicide-loving terrorists there.
I’m in Colorado, too. What local paper carried the article? I’d like to read it.
txchick, this website is for you:
http://takebacktheisland.wordpress.com/
Report: Many U.S. Parents Outsourcing Child Care Overseas
ONN news network
http://tinyurl.com/33eg3g
It was in the Loveland Reporter Herald. I just checked and its not in the online edition.
The Gazette (Colorado Springs) had one of the articles on water. It’s sort of a ‘dog bites man’ story. Water has been the issue since the first settlers moved in.
Most water district managers quoted in the article said that Colorado’s population cannot continue growing unless we cut back on per capita water consumption.
Didn’t they have to up the water rates in Denver last year because too many people were conserving water?
More conservation == higher water bill
Less conservation == lower water bill
Are they trying to save water or make more money??
Lolol both of those are great.
http://www.chieftain.com It was above the fold here on Sunday.
Didn’t they have to up the water rates in Denver last year because too many people were conserving water?
More conservation == higher water bill
Less conservation == lower water bill
Are they trying to save water or make more money??
I recall that, apparently they have too many fixed costs.
Quagga mussels are now in 20 California reservoirs, and famed bass fishing lake/reservoir Lake Casitas, has been closed to boating, to stop the clingers from spreading.
If I owned a boat that was only used in freshwater lakes in Ca., i’d sell it yesterday.
Quaggas love to clog pipes, and that what our reservoirs are all about.
It will take about 2-3 years for the ugly results to fester, and make deliveries to metropolises incredibly difficult.
Trow’em a beatin’, brooklyn style.
Kids need to run and jump, but parents so often forget about the *best* place is being out-of-doors. Since the weather has been bad, I let mine jump from bed to bed, but they like a game that they answer a ‘memory work’ question before they impress me with their swan dives. So I kill two birds with one stone. We have no TV hookup because we hate every kid show that’s on. The 3-year-old’s favorite shows are ‘Magic School Bus’, Mr. Bean, and the Poirot mystery series. He also entertains himself with Scholastic software if he’s inside. The computer can save one’s sanity as much as tv, and you figure they *might* learn something.
Arwen_U
Check out the website starfall dot com. My 3 & 5 year old love it as much as the scholastic stuff. Ever since we got them their own computer for Christmas they have completely forgotten about the TV.
navygator,
Thanks!! The kids looked at that today and enjoyed all the stories. They recognized the “Trojan Horse” story from previous books and enjoyed telling me about it.
Report: Many U.S. Parents Outsourcing Child Care Overseas
ONN news network
http://tinyurl.com/33eg3g
HYSTERICAL Hoz. thanks for that.
What seems to be the dilemna that I see traveling for work is that the American parent , in general, has constantly caved into their kids since birth, hence seeing a grown adult walking up and down aisles in airplanes when infant is sound asleep. GParents always left sleeping children lie.And then you see wildly crazy toddlers and teens whining, as did our parents, but our parents Disciplined us, then or later and boy did that work. See. I don’t have afflictions or tics tics tics tics see how normal I am.
Asian, european parents have children that Read, draw and basically learn while our children have to be entertained by technology, not books or art etc.
Desertdweller, thank god no relative has ever been stupid enough to ask you to watch their baby.
Would you leave an infant alone on an airplane seat while you go stretch your legs? Babies roll around a lot in their sleep - the little ones actually creep along until their head is pressing against something (ie crib). Under three months you also have to worry about SIDS.
“Oops I left the baby on the seat and it rolled off and died when it suffocated on it’s own puke/blanket/pillow. It died because it didn’t have the discipline to raise it’s own head. Oh, wait, you mean it didn’t have the neck muscles to do it?”
My “the housing market is crashing” chanting toddler does NOT watch any TV! His favorite past time is visiting open houses while mommy abuses realtors! HEEEE! Yesterday one of them had an article laying on the granite about 4 good reasons to buy right now!
since my son was born 11 yrs ago we disconnected the cables. no tv for 12 years. no mind numbing commercials ray gunned into the child’s brain, no corporate double think oriented news zeroed into our brains, no consumer culture hypnotizing us, sending us ‘night of the living dead’ like into the mall. our culture should be about healing our oceans, building infrastructure for the future. a society built on good old American values of saving, and leaving the world a better place than the one we inherited.
cheers-Winston Smith
Winston Smith the artist or Winston Smith the Orwellian Everyman?
Or some other Winston Smith?
I was the Orwellian Everyman during that moment of posting
cheers
Well, I wouldn’t blame a 2 year old for being misbehaved. That is clearly on the shoulders of the parents and/or other caregivers.
Same thing for the toys and Easter thing. If the parents didn’t buy into it (literally) the stores wouldn’t waste the shelf space at a time when there are no established gift giving holidays.
Most 2 year olds don’t yet have the capacity for reason and therefore the parents have far fewer options than they do at 3, 4, 5 and so on when that little brain starts to be able to predict repercussions.
If a child at 2 is calm, it’s the DNA. That child might one day grow up to be a great thinker or a great leader. Then again, I wonder how many calm 2 year olds grow up to make great sheeple calmly accepting whatever they’re told.
I completely agree!! We could take my daughter to fine restaurants and have a nice quiet meal. Many people would come up to us and say how well behaved she was. We thought we were good parents until our son came. Many times I had to leave the restaurant with him screaming and sit in the car until the rest of the family was done. I know I beat my son just as many times as I beat my daughter so that can’t be it
Some kids have a natural disposition to take out in public others don’t. We learned my son could not unless he had enough sleep and was not hungry. If he was tired or hungry he would lose it. After we figured out our son and he matured quite a bit he behaves well in public.
There’s a wonderful innovation called “babysitters” so you won’t have to subject hapless customers trying to enjoy their night out in fine dining establishments to screaming or misbehaving children.
Corp stores “Lead” consumers into what to buy. Science and studies have proven that out. It still is all about what corps want, corps get.IMHO
In the days of yore, it was Mom/pOp stores that might try something and if it didn’t sell, they didn’t restock the thing. Now if the thing isn’t placed in the psychological ’softspot’ then it doesn’t get bought.
We have been trained.
Well, they really aren’t supposed to watch TV when they are two, so I can’t imagine what he was watching. But the “knocking stuff over” is pretty much par for the course for that age, unfortunately!
TXchic
Idunno what people did before basements, everybody i grew up with had the playroom in the basement, and had a backyard sure we had a Tv but we also had a stereo to play records…
hey remember slot car tracks…i do….parents would buy stuff like this to keep kids occupied IN THE BASEMENT….not to mention HO train tracks!!!!
I object to your negative characterization of ADD. ADD is grand. It’s what lets me eat almost everything I see and not get fat, plus I don’t have to do that one thingie, you know, where you lie down and hold still with your eyes shut? Oh, yes…you people call it ’sleep’. That’s just plain ol’ tedious.
Your observations might be related to the story about China’s percipitous decline in their trade surplus posted further back up the thread. The Chinese won’t be happy if those empty shipping containers stop showing up for them to fill - gotta keep the stuff movin’ - or else!
“Is the Easter bunny trying to elbow out Santa?”
Possibly. We’re fanatic about giving our daughter only healthy foods to eat. So yes, the Easter Bunny will be leaving one small toy and some books in lieu of baskets full of junk food. I know a few similarly-minded parents do the same; nothing on the same scale as Christmas, as much as I’m sure the merchandisers would love to see that happen.
Easter, another made up holiday to merchandise, and pick the consumer’s wallet. Maybe inventories are high from no Christmas sales, so they are being creative, and planting the seed to buy the brats something else.I am waiting for leap year to become another retail holiday as well.
The Wall Street pickpockets are everywhere. With a direct sewer pipe dumping into your living room.
Good description, Ex.
What, you don’t see the close relationship between a bunny, chocolate, and resurrection?
Easter occurs in March only about 25% of the time and helps retail sales. This should be worth a couple of 0.1s in Q1 GDP and will subtract a couple in Q2.
St. Patty’s is the best holiday of all.
Music, beer, whiskey, great food and friends. No gifts!
The way life should be.
(I’d rather get fat on Guiness and corn beef than Cadbury eggs and chocolate bunnies)
I agree!!! My son is 5 and just broke his pinkie finger playing soccer. He was so excited he could get a green cast to go with St Patrick’s Day. We are training him what are the important things in life.
Exactly, this Christmas look for the Transformer Santa who changes into the Easter Bunny. That way they can sell the toy all the way till April.
I saw a Simpsons rerun the other day where the retailers were trying to come up with a new holiday. “Christmas 2″ was proposed but instead they made up a new day altogether: “Love Day”, which everyone falls for hook, line and sinker.
Barney was enough insight about children’s entertainment and educational shows, Sesame Street, yikes. I am a product of Bugs Bunny era. Our entertainment may have not educated us, but it had great sarcastic undertones. Two tier entertainment.
I am not the parental type, and would say most people who reproduce, have no business doing so. Intellect is not enough. We need more good human beings in this world.
“. . .most people who reproduce, have no business doing so.”
Problem goes much deeper. Cloning works. How is your (I’m asking this rhetorically) religion dealing with that?
Well actually if most people truly are sheeple, all we really need is some good leaders.
Now don’t ask me where we’re going to find anyone like that.
I am a product of Bugs Bunny era.
The Bugs Bunny cartoons are not children’s entertainment. They were made for adults. Once upon a time when you went to the movies there was a cartoon before the main feature. That’s why studios like WB and MGM made cartoons.
Only later were the cartoons bundled into kids’ TV shows.
Hence the double entredes which just flew over kids/our heads, now we watch in horror that we were ‘tortured’ with those horrible non kid proof cartoons. We only have slight tics.
haha
In the ongoing “how are we screwed” debate:
Per Bloomberg, the expectation of inflation is so high that investors are willing to accept negative yields on TIPS.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aE3uq61ajc.4&refer=home
A WSJ article today said that stagflation is unlikely, and that the Fed is right that a recession would bring down prices. But all the examples given were asset prices.
Asset prices are NOT moving in the same direction as consumer prices. They weren’t in the bubble, when asset prices inflated and consumer prices stayed low. And they aren’t today.
I expect falling asset prices, rising consumer prices, and wages falling behind. Inflation makes it easier for business to cut wages, because they can do so while handing out a “raise.”
BTW, in NYC the pasta boxes now have less than a pound of pasta. How about where you live?
I am sure this was an oversight on your part, but gold will be an exception to falling asset prices, because everyone needs gold to live in, eat and fuel their POV, right?
Just go to Raffeto’s. They supply half the restaurants anyway.
I was there just last week. $1.25/lb for some of the best pasta you’ll have. Made right here too.
Gimme a freakin’ break! I can do without the whole “Woe is me” routine. You live in NYC not Kansas.
i like to buy in bulk — i’m still working on the shopping cart i filled with 3lbs/$2.00 of various kinds of pasta i bought about a year ago at gristede’s on bway & 103 st. i noticed yesterday that the cheapest pasta there is now $1.25/lb. !!!
I bought 9 lbs at Raffeto’s.
Is that bulk enough or should I post a picture of a fat American?
Di Cecco pasta is now $1.99/lb anywhere in Westchester. Was .99 in 2004.
Still $1.29 in walmart in PHL
$.79 in Trader Joes.
Di Cecco or the store brand?
i bought a bag of large rigatoni pasta this weekend 1lb for $8 at an italian market near me. being a renter i can afford these little extras, but the price of food is getting crazy and the downsizing of the contents is a little secret most do not catch on to
i find myself spending 20% more each week for basically the same stuff- i told my wife i am not spending any money for the next 30 days that is not for neccesities
of course our ideas of necessities are totally different
Spare me the “woe is me” routine. You live in NYC. Read what I wrote about Raffeto’s above.
Even in Italy the price of pasta has jumped (the price of hard winter wheat is up dramatically). The Italian government is concerned, and are debating how much they can subsidize in the future.
The Economist has been tracking the inflated cost of food (which they do not believe will necessarily drop back down). for a couple of years.
So I don’t understand your sarcasm. Unless Raffeto’s is more powerful than you have conveyed!
Read below about where the real costs lie.
I noticed, the last time I bought Cheerios for my husband, that the package was dramatically smaller but the price was the same. This is related to the high cost of wheat, correct?
“BTW, in NYC the pasta boxes now have less than a pound of pasta. How about where you live?”
The cost of the raw commodity, wheat, in breads and cereals has little to do with the cost of the final product on the store shelf. Most of the cost is in marketing, transportation, etc. For example, even with wheat at $10, there is only about $.14 worth of wheat in a loaf of bread.
Thank you, TexasFarmer, for pointing out the obvious.
Locally-made stuff has hardly budged, and it’s not because they are clueless. It’s because they don’t need to spend any money on marketing or packaging, and they pass on the small rise in transportation.
YOU beat me to this bicoastal………i haven’t bought pasta for a month, we got a great deal at foodtown 4 1lb boxes for $2…so we stocked up…
Saw the sign ‘4 for $5′. Each box contained 13.5 oz of pasta. I distinctly remember that last year the box contained 1 lb and it used to be on sale for $1 each. This is in the burbs south of Boston.
I find if you get the cheap stuff, you still get a pound of noodles in the one-pound box. If you go for the high nutrition-stuff, Barilla puts in 14.5 ounces in a box, Ronzoni puts 13 ounces.
It depends on type and quality of wheat, too. As I mentioned above, hard winter wheat is what makes Italian pasta…Italian pasta. Hard winter wheat hasn’t been doing so well.
I think this is more of an issue than packaging and transportation. Staying within Italy, just as a for instance, transportation around the country covers a fairly small area. And it’s not like deCecco is sponsoring Tiger Woods or something. Cost is just up, isn’t it? Che peccato.
Of course, this is more of an issue for developing nations than for us, but, still sucks.
“I think this is more of an issue than packaging and transportation.”
should be: I think there is more to the issue than packaging and transportation.
neighbor is a sales manager for a large food company…tells me sales are booming ….up 18% for frozen pizzas and other packaged frozen foods. People have cut way back on eating out lately…company estimates. Sign of the times.
Now is the time to invest in Diabetes related sector. Processed foods are a great path to the condition. Don’t get me wrong, I don’t favor the food police, but people should eat more balanced meals.
I was in the Shopping Center industry for a long time, and learned consumers are truly sheep.
Restaurant sales are down per my reports, but on Sundays, the illegals and new entitlement folks, eat out (on our $), according to my empirical evidence.
I’m with you. Long diabetes, all the freakin’ way. I’d even leverage it.
People quite literally can’t cook. I don’t expect everyone to be obsessed with it like me, but c’mon.
Fresh mussels for $3/lb, and “cooked” ones for $13/lb? Gimme a freakin’ break. How hard can it be to steam them?
Lazy gits get what they deserve.
‘Lazy gits get what they deserve.’
Although not nearly fast enough to suit ME.
Silver and gold are tanking this morning. Is anything going on?
Ask and all the resident experts who know that it’s a new era and gold always goes up.
As for myself, I like to buy assets when they are really low, like $US is right now, and sell when they are high, like gold is right now.
Yep. Easy to say, hard to do.
What she said.
In any case, what matters are not fundamentals. What matters are where the whales are going so that you can front-run them. You can take the ride down too.
Indeed. That is what I try to do.
Exactly.
It will be a cold day in hell when an economist, fully coked up on efficient markets, understands the concept of “order flow”.
LOL. Get in there and buy the buck. When they repo your internet you will have to post from the library, though.
Dude, I apologize if I irritated you yesterday, but I have a weird thing for questioning questionable assumptions. Hope you don’t take it personally, cause I enjoy your posts…
It’s important to be skeptical about everything, especially our own assumptions.
He’s an economist. He comes to conclusions first, then looks around for data that will fit it.
Like one day’s decline in gold and a rise in UST.
People have been saying gold was too high when it was $500. What’s your basis for saying gold is overpriced? Just because you think it’s overpriced? Have you seen the price on TIPS lately? Do you think they are overpriced?
I don’t know and you don’t know P-bear if it will keep going up in price. All I can do is look at a chart and say bull or bear. Gold says bull market. Period.
The TIPS I bought in 2003 have appreciated 12% in the last 6 months. I guess you could call that overpriced.
If the Federal Reserve is correct, the 5 yr TIPS currently have a negative yield to maturity. The risk/reward ratio is not favorable for owning TIPS.
I have noticed this as well, I bought TIOS at a discount several years ago and now they are trading at a 12% premium. I also saw the bloomberg.com article on how they are still negative relative to projected inflation. It just goes to show that inflation is seen as a real and large threat. TIPS are my last and only bonds I hold and I am considering selling due to the recent rise in price.
TIOS = TIPS. Mine expire July 15th 2013
I claim to know nothing. I just dared to question those who say “gold always goes up” yesterday, and was nearly tarred and feathered for my questioning. You can tell you are in the hyperbolic phase of a bubble when New Era theorists get very defensive if you dare to question them.
True, nothing can go up forever but until things point the other way, it looks like gold and commodities will keep pushing the trend line in the positive direction.
I’m no goldbug, but I do have about 25% of my savings in PM’s. Thankful that I do after the getting splattered with my VMware play. Duh…. At least it wasn’t Apple!
I didn’t see your comment yesterday but from what I’ve seen, you don’t so much question folks P-bear, as much as you put loaded comments out on the blog when it pertains to commodities and precious metals. Of course, you’re gonna get a rise!
It’s still better a option to play both sides of the inflation/deflation argument.
I’ve allowed all to watch me play a game of chess, vis a vis Gold, and the other day the good professor asked if i’d declare Checkmate!(turn my Gold into overpriced real estate), after having moved a couple of pawns and a knight, and nothing more.
We are oh so early in the game of realekonomik, and honesty prevails were dishonesty fails…
Lets repeat this exercise with something we talk more about here:
“People have been saying CALIFORNIA REAL ESTATE was too high when it was $300,000. What’s your basis for saying CA REAL ESTATE is overpriced? Just because you think it’s overpriced? Have you seen the price on SAN FRANCISCO COMMERCIAL BUILDINGS lately? Do you think they are overpriced?”
For people who are watching a bubble in Real Estate, which was based on something other than fundamental demand, too many seem to be blind to the fact that the price of gold seems quite far from fundamental demand as well.
It’s late and you are wrong Tim. There was fundamental demand for Real Estate. It was demand fueled by speculation and easy credit. The fact that it was fueled by such things does not negate the total actual demand. It did drive prices beyond what normal metrics would describe as a healthy real estate market.
In PM’s there is speculative demand, but not fuelled by easy credit. Demand is demand whether “fundamental” or not. I bet that you can’t even describe what fundamental demand is in the gold market Timmy. Pray tell enlighten us with your intricate knowledge of the hedgebooks of the miners, and jewelers and the positions of the bullion bankers throughout the world.
Nice try in twisting my words though in a hackneyed amatuer way.
They have been up something like 11 or 12 weeks in a row. Nothing goes straight up or straight down.
My experience is that gold and silver usually have a 20-30 % correction every year. If they go down 40% from here, I would be concerned. Gold could easily go back to 880 and silver to $15 or $16 and nothing would be the matter.
PB carries a lot of weight. When he leans hard, mortals fall.
Cut him some slack. He’s an economist. He has physics-envy ’cause he’s not a real scientist.
Where do you get this physics-envy idea? I can’t recall ever saying I had physics-envy. I always thought physicists envied economists, who make more money for doing lighter work.
Fundamentals.
Good day to be long bonds (aka future fixed $US payments). Not so good to be long PMs.
For those hoping to use $50,000 in cash as a 15 pct downpayment on a San Diego starter home, don’t buy until you can get the home for $50,000 / 15% = $333,333.
LIFE SAVINGS
Putting out the welcome mat
Five bond funds that give first-time home buyers a window of opportunity
By Jonathan Burton, MarketWatch
Last update: 2:01 p.m. EDT March 9, 2008
SAN FRANCISCO (MarketWatch) — In this sinking real estate market, buyer’s remorse can strike as soon as you pull up to an open house.
Pitted against such a gritty landscape, this has to be just about the worst time to be stockpiling money for a down payment on your first home. Or is it? With prices falling and mortgage rates low, entering the housing market in a couple of years might be a timely move, especially if you think of your house not as an investment but as simply a place to live.
If you’re considering owning a house, apartment or condominium two or three years from now, better start saving. You’ll need the money; the days of 100% mortgage financing are done and buyers should expect to put down 10% or even 15% in cash. For many first-time home buyers — typically young people at the start of their careers — handing over $25,000, and twice that in some urban areas, can seem insurmountable.
If you’re considering owning a house, apartment or condominium two or three years from now, better start saving. You’ll need the money; the days of 100% mortgage financing are done and buyers should expect to put down 10% or even 15% in cash. For many first-time home buyers — typically young people at the start of their careers — handing over $25,000, and twice that in some urban areas, can seem insurmountable
THAT IS EXACTLY WHY I WILL CONTINUE RENTING
it has taken me many years to save my $$ so i tread very lightly
no rich parents or in-laws to “help with the dp” it is all on me
I totally sympathize. Everyone we know who bought in SD since 2005 had rich parents help them with the burden. I note that there can at times be an advantage to not having enough cash to financially hang one’s self.
Money and Wealth is an accelerant. If you chose to buy drugs with it, it allows one to kill themselves quicker. If one makes bad financial decisions it can “Financially Hang one’s self”. If one is astute, and is a good steward of their money it can accelerate their climb in life. Wealth usually lasts 3 generations due to this. The first gen build wealth due to treating it wisely, the second generation spends the income generated by it. They have no understanding of making money or inflation and how it affects your wealth. The third generation spends the principal since it doesn’t hold much value due to inflation. Debt is also an accelerant. It will leverage your gains in an up market and leverage your losses in a down market. Whatever wealth one has, they should not squander it. Whatever debt one has ensure it is for appreciating assets or pay it down so it doesn’t drag you down with it.
Just my 2 Yens worth
I find it absolutely absurd, that young people cant’t save 25k foor a downpayment. My first home required a 10% down on a 25 yr fixed at 7.25%. I think at that time, I was making about 15k annually. The house, a 1200 sq ft rance in a northshoe suburb of Milwaukee, was 31,000. Yes, Married with one 2 yr old, we saved the $3,100.00 for the down..yes it did take three years, but we saved. 1971 Saving is a state of mind, you have to work hard…something younger generations fail to grasp! We didn’t have cable, no cell phones, one automobile, stay at home wife, ,
it can be done. So, revise the math from then to present…it still can be done!
Many of us have to pay off much more than that in student loans before we get to actual savings.
And, yes, I worked all the way through college, ate spaghetti and beans and rice, didn’t drive a car and bought second-hand clothes. I didn’t go on any trips, either. Cost of education makes a big difference, and it’s more expensive now (even adjusted for inflation).
It still can be done, I agree (I am doing it). But when I hear of someone graduating with $75,000 or more in debt, whoa.
I’d like to see a inflation adjusted college cost chart. I have no doubt it is much more expensive/bubble-ish, possibly correlated with the credit bubble. Just wondering how much so.
a couple data points with a quick google:
Tuition: twice inflation since 1986 (That seems a silly measure)
Textbooks: also much higher
Thanks for posting that. The thing I don’t understand about bonds is that they appear to yield way less than my “high” interest account (4.75% compound). Am I missing something. If a bond fund offers 2.8%, is the interest calculated differently, or something?
Sorry, I realize I am remedial compared to most on this blog. However, even after a lot of reading (books and magazines), I still don’t get it! Maybe I’ll be lucky and someone here will shed some light?
Hey, wall st monkeys got to live the lifestyle with Ferraris, cocaine and hookers. Where do you think the money for that comes from? Of course, it is from the spread!
Hmmm. I will have to work harder to become an evil capitalist. Not sure what I would do with Ferraris, hookers and cocaine, but maybe I could trade them for cashmere coats, some kittens and a case of Ehrenfelser?
It doesn’t sound like I would fit in on Wall street, does it? shucks. Where does the co-operative girly trading take place
Guess I’ll stick to indexes and savings until I can understand…thanks.
The trifecta of reports illustrates a housing market caught up in a “very negative, reinforcing downward spiral,” said Mark Zandi, chief economist at Moody’s Economy.com.
…
On Tuesday, Fed Chairman Ben Bernanke suggested lenders reduce loan amounts to provide relief to beleaguered homeowners. But some experts think more help is needed. “At the end of the day, these efforts will be insufficient,” Zandi said. “Policymakers will need to be more aggressive and put taxpayer money on the line to stem this. Ultimately, we will find a bottom, but it would be a mistake to let the market run its course.”
Taxpayer money. Nice one Zandi. Get your hand outta my pocket!
http://news.yahoo.com/s/ap/20080306/ap_on_bi_ge/housing_woes?
. “Policymakers will need to be more aggressive and put taxpayer money on the line to stem this. Ultimately, we will find a bottom, but it would be a mistake to let the market run its course.”
How come it was OK to allow younger families to be “priced out forever” 2004 to 2006? It seems like the government only intervenes to prevent housing from being affordable.
Again, it is because young people do not vote. They have other things to do, including busting their ass to get income.
“Policymakers will need to be more aggressive and put taxpayer money on the line to stem this. Ultimately, we will find a bottom, but it would be a mistake to let the market run its course.”
People who make statements like that need to be branded for what they are - COMMUNISTS! Bring back the HUAC.
How come it was OK to allow younger families to be “priced out forever” 2004 to 2006? It seems like the government only intervenes to prevent housing from being affordable.
Ding, ding ding!
And unaffordable housing helps the rich get richer, as FBs have to fork over a huge portion of their income to make the monthly nut.
What , the government trying to keep up the prices that were obtained by faulty/fraudulent lending during a mania and a high % of those loans will never be good . I think the powers need to admit what happened and get a grip that you can’t have a market whereby people can’t afford to purchase the product under normal lending standards . Good lord ,its going to be much better for families to be in houses they can afford .
I look at the housing bubble like a big hurricane that came into town ,causing a lot of damage and loss ,but we got to move on .
Did the powers really think that speculators buying at inflated prices by loans that they couldn’t afford (given the rent they could collect )is a housing market that is sustainable ? It will take years for prices to even reach peak levels ,so what is the point of all this bail out talk . To the degree the market was inflated is the degree of the loss or more because of over-supply . Can’t put the genie back in the bottle .The greedy market makers should of never messed with housing /shelter ,bad karma .
I think the powers need to admit what happened and get a grip that you can’t have a market whereby people can’t afford to purchase the product under normal lending standards .
Funny how we understand that, but they don’t.
Anecdotally:
A college student I know rented an apartment very near Arizona State University (Tempe AZ) in January ‘07. At the time she was told she’d have to move out November ‘07 because the apartments were to be torn down for a condo project. I advised her not to worry- that I’d be very surprised if the project would start then.
In the summer of ‘07 she got a letter telling her that the condo project had been moved to the fall of ‘08; I laughed and told her conditions were much worse and it would be 2009-2010 before she’d have to move.
Sure enough, Sunday she was informed that the new date for the condo project was pushed back to fall of ‘09. I’ve made a housing bubble bust believer out of her; she’ll ask for a rent reduction when her lease is up. 4 out of 22 units have been vacant for 2+ months; two for 4+ months!
I just got tipped off that our local realtor assn site
Whoa, wtf…anyway, they stopped publishing their stats. Ah, it was a hyperlink…here is their message without it:
“MOR is in the process of reviewing the market trends information to determine the best way to reflect the Missoula market on a consistent and ongoing basis. If you have suggestions about the type of information that would be most helpful to you, please feel free to contact us at xxxx”
I’ve been blogging the stats and I don’t think they appreciate it.
Doesnt surprise me. The area I am tracking has RE sites that have removed “sold” and “pending” lists from thier website.I know one that has a sold property on it but it sold back in October and it has no date listed.Zwillow,trulia, nexttag all lag behind with recent sales.
Comps are more difficult to find thru the net.
I even see ALOT of “relisting” going on.Take the house off the market then relist it at a lower price weeks later.
They are getting desperate……
Hoz, I remember we both shorted this at the same time. Bet it was a lot cheaper for you to do it than me
Wonder if this dude is still throwing himself $2M birthday parties on the investors’ nickel.
Blackstone Posts 4Q Loss of $170 Million
Monday March 10, 9:09 am ET
Blackstone Loses $170 Million on Write-Down for Bond Insurer FGIC, Deteriorating Credit Market
NEW YORK (AP) — Blackstone Group has lost $170 million for the fourth quarter because of the declining value of its investment in a bond insurer and deterioration in the credit markets.
The New York-based investment manager said its investment in Financial Guaranty Insurance Co. led to a decline in performance fees and investment income during the quarter.
Blackstone’s Chief Executive Stephen Schwarzman said deterioration in the credit and fixed income markets during the second half of 2007 reduced the level of new investments, transaction fees and appreciation on Blackstone’s portfolio of investments.
Schwarzman says those problems have continued into 2008 and it is unclear when conditions will improve.
Tx the investors always have a choice: buy into corporate irresponsibility or don’t buy. Shareholders/Owners of many financial stocks have chosen to be supporters of malfeasance.
Go for the party!
There was a long profile of Schwartzman in the New Yorker last month. An interesting read. Though it was a little too laudatory for my taste, the article highlights his extravagant personal spending (including real estate).
From the article:
In this chaotic environment, Blackstone had managed to avoid nearly all the pitfalls of subprime mortgages and mortgage-backed securities. It specializes in commercial, not residential, real estate. Indeed, its hedge funds are designed to profit from market turmoil, and the enormous assets that it manages deliver steady fees in good markets and bad. The stock peaked on its first day of trading, however; by mid-January, its value had been cut almost in half.
Schwarzman still had his cash from the offering, which turned out to be $684 million, but his Blackstone stake, worth $8.83 billion after the first day, was worth just $4.62 billion …
Schwarzman has made himself an easy target for critics of Wall Street greed and conspicuous consumption. He lives in splendor in Manhattan, and he has an expanding collection of trophy residences that are lavish even by the current standards of Wall Street.
Here’s the link.
Sickening.
An interview with the Minneapolis city assessor was on MPR this morning. Overall, assessments are down 5% give or take but two things stuck out.
1. When asked how the city is going to deal with the reduced amount of revenue, the assessor said the levy would adjusted to account for the drop in taxes collected and to make sure the city gets what it needs to operate. I don’t know for sure but I bet the levy wasn’t being adjusted down for the last 10+ years as valuations were going up.
2. He also said assessments are based on comparable home sales however short sales and foreclosures are not included. His argument was they don’t reflect a true “market” valuation of the neighborhood’s potential selling price. Seems to me a short sale price IS the market valuation.
In Chicago they took the unprecedented step of reopening assessments for adjustment between March 17-31. They are using sales price data supplied by the Chicago Association of Realtors. Some South Side neighborhoods are supposedly down 13% in price and some owners will get a reduction. The problem is that the overall levy will not change so other owners and property classes will pick up the slack.
I still say, the full impact of rising property taxes is underrated and may very well lengthen and deepen this bust, not to mention adding to the argument that ownership may not again offer the relative advantages that it did in the postwar period.
I’m really curious to see how those adjustment appeals go. Is it a written process, or does the homeowner have to appear for an administrative hearing?
Along those lines, my girlfriend and I were looking at rentals yesterday. Our probable pick, a turn of the century six-flat in amazing shape, is owned by a guy in my neighborhood who employs his cousin for painting and carpentry. Chatting with the cousin (a hippie dude in his early fifties) on Sunday, he was complaining about Cook County property taxes. He said, “Man, this county is trying to tax me straight outta my home.”
Right now they want owners to call 311 between those dates and they’ll be put on a list for a closer examination of their latest assessment and its relation to recent comps.
A local tax watchdog group is concerned because it might start us on a dangerous path of spotty reductions that only worsens the situation. That’s what bothers me too as it increases the already extremely complex property tax situation in the county.
Yeah, the way property taxes are tallied here seems calculated to bamboozle all but the Ultimate Bureaucrats and OCD types who enjoy figuring out byzantine problems in their spare time.
Knowing this county’s political history, there’s a more-than-excellent chance that some re-assessments will be “fairer” than others. (Ironic quotation marks intended.)
They will always come up with the “Revenue Enhancement” solution rather than cutting spending (layoffs) in the name of “Maintaining Services”…Its just a bunch of crap…
Even if houses weren’t depreciating, I think that this trend will cause people to think twice about buying homes. Homeowners are sitting ducks, when it comes time for the local-state-federal governments to come up with additional revenue. Almost makes you think that governments promote home ownership for reasons other than “homeownership helps stabilize the community”.
“I believe we are facing the most serious…economic and financial stresses that the U.S. has faced in at least a generation — and possibly much longer”
Lawrence Summers
March 7, 2008
Got a link Hoz ??
http://www.mercurynews.com/nationworld/ci_8501549
A better link with the entire video of the speech by Summers: http://siepr.stanford.edu/siepr_news/index.html#Summers030708
February sales for Northern Virginia are out.
I track Loudoun Co. The thing that stands out to me is this number - sale price as a percentage of asking price - was 90.14%. That’s the lowest ever, by far - previous lowest was January at 90.97%! Sellers here are desperate.
Cut and pasted from a post I made yesterday…
OffTopic Wall St Report-
I’ve made mention in the past of an accountant friend who audits the auditors(Accenture, Las Vegas Gaming Commission, casinos, etc). In a private discussion this morning, he indicated his 80-something year old brother in law was called by un-named banks to do workouts between them and builders. After working on this for 3 weeks, his brother in law stated that he is “terrified”. Also he stated, “although I was young during the depression, this think will dwarf the depression if it unwinds in an out of control way”.
Take it for what it’s worth but my friend is no ham and egger.
Does anyone have a link, or a reference name (e.g. UNRATE = Civilian Unemployment Rate) for last week’s data from the Fed about home equity - being under 50% for the first time since data was kept?
Seems like a very useful gauge (one of many) for how this thing is playing out.
Thanks in advance.
Z.1 Flow of funds accounts
B.100 Balance Sheet of Households
Line 50 Owner’s equity as a percentage of household real estate
http://www.federalreserve.gov/RELEASES/z1/
Thanks!
Kudos to Bloomberg for invoking JOHN GALT!
http://www.bloomberg.com/apps/news?pid=20601039&sid=avFnuh9oWHVo&refer=home
Where is Pinocchio Lereah when you need him to invoke his soft landing diatribe……
Whatchya got to say now Pinocchio??? We know you’re monitoring.
Atlas Shrugged is like a road map, for what’s happening now…
Per MSNBC, house flipping reality shows still coming out as “unreality TV.”
http://www.msnbc.msn.com/id/23548723/
“A new season of the A&E Network’s “Flip This House” — one of a troika with TLC’s “Flip That House” and Bravo’s “Flipping Out” — premieres Saturday night.”
“A&E has several new programs in development. At least six new ones are beginning on TLC in the next year, starting with “Date My House,” where former “Bachelor” Bob Guiney hosts a program where potential buyers spend a night in a home on the market.”
“HGTV had its highest prime-time ratings ever in January. Nine of its top 10 series deal with the housing market, including “House Hunters,” “My First Place,” “Hidden Potential,” “Buy Me” and “Design to Sell.” The network did a special Feb. 29 theme day of “taking the big leap,” or investing in that first house.”
“Buy Me” is a very weird show. I’m surprised its soo popular. The announcer guy really creeps me out. The people selling are always sad and depressed.
That’s because its from Canada. Have you guys seen on TV how much snow we’ve had this winter? Sad and depressed is pretty normal for us.
Wait a second. Depressed? Aren’t you from The Best Place On Earth?
“HGTV had its highest prime-time ratings ever in January. Nine of its top 10 series deal with the housing market”
Well DUH, it *is* “House and Garden Television” (HGTV), so I would suspect that their top shows would be either HOUSE or GARDEN related.
I used to love their garden shows circa 2001 but their programming seemed to take an abrupt turn about 5 years ago..
“… taking the big leap …”
Sorta like taking the 10th floor option.
kinda like watching a feel good movie when you are down and out…
Discussion Paper 18/2007
Exchange Rate Determination: A Model of the Decisive
Role of Central Bank Cooperation and Conflict
by
Robin Pope, Reinhard Selten, Sebastian Kube,
Johannes Kaiser, J¨urgen von Hagen
ABSTRACT
“Opinion is divided on whether it is better to have a single world money or variable exchange rates.
Pope, Selten and von Hagen (2003) propose that fresh light would be shed via an analysis that allows for seven complexity impacts on the exchange rate that are underplayed (where not entirely absent) from
current analyses: 1) the role of official sector, including its central bank; 2) the numerous official and private sector goals; 3) the disparate degrees of market power of different sorts of private agents; 4) the documentation that essentially all shocks to the exchange rate are generated by human decisions; 5) the non-maximising heuristics that in the complex economy agents use; 6) heterogenous beliefs. This paperanalyses a closed form game theoretic solution of version 1 of a model that combines impacts 1 to 4 with the conventional finance assumption that all agents maximise their utility. Impact 1) precludes private agents being able to destabilise the exchange rate against the cooperation of the central banks required by the game theoretic solution. Impact 4) excludes random events and other exogenous shocks such as meteors falling from the sky. The rational maximising assumption in turn precludes all other sources of shocks and thus any need for a variable exchange rate to equilibrate after shocks. We then modify version 1 of our model substituting for the maximising assumption impacts 5 to 7, impacts that allow shocks from humans to be consistently incorporated. We do so by means of an experimental investigation which indicates that central bankers less than fully cooperate, leaving scope for private speculators to support their preferred currency. From the viewpoint of the game theoretic equilibrium, the resultant exchange rate changes render equilibrium unspecified. A single world money avoids disruptive exchange rate changes from less than fully cooperating central banks, exchange rate changes caused by central bank conflicts and that cannot be classified as equilibrating.”
Caution 35 pg pdf
Bonn School of Economics
http://tinyurl.com/2tlopz
A single world fiat money will lead to a single world government. All you need to do is look at what is going on in the United States where you have supposedly independent “states” all using federal reserve notes that only the federal government has the ability to print unlimited amounts of.
We now see that state and local governments are being hurt by inflation/deflation in the same way that companies and individuals are. Inflation will bankrupt these local governments and force them to go begging to the federal / world government for handouts. These handouts will come with strings attached that remove most autonomy of the local governments.
The best single world money is gold and silver. In this way there are no exchange rate problems AND no one government can impoverish other governments by destroying their savings and the savings of their citizens!
Then you might enjoy this paper better:
Beggar Thy Neighbour Exchange Rate Regime Misadvice  from Misapplications of Mundell (1961) and the Remedy
Date: 2007-11
By: Robin Pope
URL: http://d.repec.org/n?u=RePEc:bon:bonedp:bgse1_2007&r=cbe
Economists invoke Mundell (1961) in arguing for the general policy of  a flexible exchange rate regime as a means of restoring equilibria  after shocks. But there is a discrepancy between the intent of the  general policy and attempts at its implementation as identified by  specific changes in exchange rates.  When we assemble the set of  specific changes called for by distinct economists operating as  advocates for individual countries, these are uniformly in the form  of beggar-thy-neighbour advice – ie travesties of objectively  identifying disequilibria and a menace to international cooperation  and peace.  This paper traces the unintended travesties to problems  of complexity and uncertainty, problems that implicitly are assumed  absent in Mundell (1961) rendering the situation so simple that  equilibria are transparent.  The problems remained essentially  unaddressed when economists extended Mundell (1961) via expected  utility theory since this theory also ignores the impossibility of  maximising and the complexities of central bankers, private firms and  others in doing the evaluation stage in reaching decisions.  The  problems can be overcome by modelling within SKAT, the Stages of  Knowledge Ahead Theory.  This paper points to experimental evidence  in support of the view that under all sorts of disequilibrating  shocks, currency unions outperform flexible currencies by eliminating  the inefficiencies generated by exchange rate uncertainty.
Thanks Hoz -that’s one of the most awful papers i’ve ever read. Is this seriously what they’re basing economic theory on these days? Cos if it, we’re soooo screwed.
It is a field of economics that I try to understand. The simple premise of Keynes, Friedman et al does not work. The math is wrong compared to actuality. Ergo when it is to their detriment to make such poor economic choices, there has to be something that explains why people do the stupid things that they do.
Here is something to consider. Many of these loans have been packaged and securitized. Now who is going to take the hit in this situation. Lets keep this simple, the security was divided into two parts, one interest only (IO) and the other principal only (PO). For those of you not familar with this, it basically means that the IO holder get all the interest and the PO holder gets all the principal.
The borrower has this loan, $200,000 Priincipal, 8% interest, 30 years and the monthly payment is $1467. Say this borrower gets in trouble and the servicer and borrower want to renegotiate the loan to get the monthly payment down to $1200. There are two ways of doing this: reduce the principal down to $163,540 or reduce the interest rate to 6%.
Having holders of IO and PO pieces with totally different objective and cash flow issues and depending on how you renegotiate the loan one bondholder may take a much bigger loss than the other. Only thing certain here is that there is going to be a lawsuit by either the IO or PO bondholder.
That is why many of the trustee agreements have clauses that say the servicer can only renegotiate a small percentage of the loans that make up the mortgage backed security.
Adding to long index calls. Feels really washed out.
I’m not so sure, i think things start to get really ugly from here. Market is starting to realise nothing can be done to stop the implosion.
Good thing they’re cheap
I bought some cheap bsc puts out to jul, i wonder which bank will be left standing when this is over?
More long calls here as well. We’re due for a bounce.
This reminds me of the duct tape bottom. Also in early March.
Tx, pardon my ignorance. But what is a duct tape bottom? A sticky bottom with no bounce?
No. In March of ‘03, right before the Iraq war started, remember all the rumors about anthrax and other biologicals WMDs that were supposedly going to be set upon the U.S. by Al Qaeda? Remember they were talking about duct taping your house to stop air leaks? That was when the bear market which began in March of 2000 ended and the bull market began. Woody Dorsey called it “equiphobia.”
Gotcha. Thanks.
‘But what is a duct tape bottom? A sticky bottom with no bounce?’
I want you all to note the incredible restraint I, Olympiagal, have exhibited in not spouting all sorts of jovial and ribald jabbering in response to this post. Huh? Huh? Yeah!
That’s because I’ve decided to 1. Be more mature and less ribald. 2. Get more organized and then maybe I can find what smells funny in my desk. 3. Number all my points, because that seems like a good organizy thing to do.
http://www.ducktapeclub.com/ducktivities/projects/purse.asp
Jeez Oly, I just underhand lob a nice meatball for you to knock out of the park, and you refuse to swing? I read my post after submitting and chuckled to/at myself. For what it’s worth, the diction was unintentional. Really! =)
To equate today’s environment with the duct-tape bottom is a mistake. At the time of the duct-tape bottom, people were scared for their LIVES, not just their livelihoods and their investments. The fear today is nowhere near what was going on in March 2003.
For what it’s worth, the diction was unintentional. Really! =)
Yeah, yeah, sure it was. You and your duct tape. I’m keeping an eye on YOU, sfv.
I threw in some money last week & today too.
I am prob wrong, but I am still selling and shorting financials. It is now ‘press’ trading.
The FDIC does not lie.
“Insured institutions’ loss reserves posted their largest increase in 20 years in the fourth quarter, but this growth did not keep pace with the growth in non-current loans. At year-end, one in three institutions had non-current loans that exceeded reserves.”
Who screwed up and how or in the words of The Federal Reserve of New York:
“…At firms that performed better in late 2007, management had established, before the turmoil began, rigorous internal processes requiring critical judgment and discipline in the valuation of holdings of complex or potentially illiquid securities. These firms were skeptical of ratings agencies’ assessments of complex structured credit securities and consequently had developed in-house expertise to conduct independent assessments of the credit quality of assets underlying the complex securities to help value their exposures appropriately…..
…In contrast, firms that faced more significant challenges in late 2007 generally had not established or made rigorous use of internal processes to challenge valuations. They continued to price the super-senior tranches of CDOs at or close to par despite observable deterioration in the performance of the underlying RMBS collateral and declining market liquidity. Management did not exercise sufficient discipline over the valuation process: those firms generally lacked relevant internal valuation models and sometimes relied to passively on external views of credit risk from rating agencies and pricing services to determine values for their exposures….”
March 6, 2008
FRB New York
Observations on Risk Management Practices
during the Recent Market Turbulence
caution 27 pg pdf
http://tinyurl.com/2893t4
About time a Nobel Economist has set up a solution for the US>
“…They are part of a nascent lending program created by Muhammad Yunus, a Bangladeshi economist who won the 2006 Nobel Peace Prize for developing the Grameen Bank, which uses micro-loans to help eradicate poverty in developing nations.
But these women are not in Bangladesh, they are in Queens. They are among the first 100 borrowers of Grameen America, which began disbursing loans in January. This is the first time Grameen has run its program in a developed country. ….”
Washington Post
Small Loans, Significant Impact
After Success in Poor Nations, Grameen Bank Tries New York
I believe A. P. Giannini pioneered this form of subprime lending in BOA’s predecessor, the Bank of Italy.
Giannini was a real innovator and a shrewd businessman.
He made his name in the aftermath of the ‘06 San Francisco earthquake; Giannini had funds to lend within the immigrant communities when there were few other above-the-table financial options available for The Little Guy.
P.S. This gets to one of the reasons I believe too-big-to-fail is a very destructive policy. It makes the playing field very unlevel for small new entrants to banking. I think the subprime debacle suggests severe problems with leaving the underwriting to Megabank, Inc.
Look at Bear Stearns! BSC
Look at Fannie and Freddie
The John Galt Solution
Galt, the hero of Ayn Rand’s magnum opus “Atlas Shrugged,” stops the world by going on strike. He and the “men of the mind” literally withdraw from the world after watching their wealth confiscated by the looters (the government).
Toward the end of Rand’s 1,000-plus page novel (or polemic), the economy is in shambles. Desperate, the looters kidnap Galt and prod him to “tell us what to do.”
Galt refuses, or rather tells them “to get out of the way.”
Road Is Cleared
You probably can sense where I’m going. Today’s economic and financial crisis would resolve itself more quickly and efficiently if the government got out of the way. Yes, there would be pain. Some banks would fail. Others would clamp down on credit to atone for the years of lax lending standards. Homeowners-in-name-only would become renters. Housing prices would fall until speculators found value.
That’s not going to happen. The bigger the mess, the more urgent the calls for a government solution, the more willing government is to oblige.
We want laissez-faire capitalism in good times and a government backstop against losses in bad times. It’s a tough way to run an economy.
The USA has always been at an advantage, in reaping the rewards of brain drains from other countries…
It’s reversed itself now, as many quality people are leaving our shores.
Who is John Galt?
A tidbit from Tucson: Was in a marksmanship class over the weekend. The instructor noted an increase in real estate agent enrollment. Why? Because they are being targeted by predators who find them via the Internet.
So, there’s a dark side to having your photo plastered all over everything.
oh please. What, are they trying to get concealed carry passed or something?
Concealed carry is already legal here. You do have to take an 8-hour course, which includes proving that you can shoot and hit a certain area on a target.
“Certain area on a target”?
Driving around the outskirts of Tuscon I couldn’t help but notice street signs riddled with bullet holes.
Yeah, and look at the bullet holes left by the shooters. Those clowns couldn’t shoot a tight group if they were at point blank range.
Wondering if we should start a thread on 9MM versus .40 and .45?
The .40 seems to be the choice of most police departments. It has more stopping power than 9mm. And less recoil than .45.
Speaking of . . . the “proving that you can shoot and hit a certain area on a target” thingy: In my CCW class in Phoenix last year we had a couple guys who had to be given SEVERAL do-overs to hit the target center-of-mass at–I kid you not-FIVE freaking yards (the instructor waived the 10-yard qualification)! You want to see scary? I could have lobbed a pocketful of rocks at the target and done better than these clowns. You’ll be happy to know that they are now fellow CCW-holders in the great state of Arizona. The “nobody fails” ethos is alive and well here.
I thought concealed carry was legal in Texas too - ?
It is–along with “open carry”, but the TX authorities frown mightily on CCW-holders who do a lousy job of concealing. No in between allowed.
Bear Sterns insolvency rumor.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aossf_0EgpBI&refer=home
Wasn’t this the organization pitching CDOs to public employee pension funds a while back? Time for the lawyers to reconsider their future sources of income. There may be nothing left to sue.
Ace Greenberg says it’s BS and Dr. J says amateurs are buying the puts under the 50 strike.
The price of today’s most-active contracts, which give the right to sell the stock at $60 before this month’s options expire at the end of next week, more than tripled to $5.50. April $55 puts, the third-most active, more than tripled to $6.80. For those wagers to pay off, the shares must drop 12 percent in the next six weeks.
–
In case it wasn’t posted yesterday…
http://www.latimes.com/business/la-fi-lazarus9mar09,1,2399582.column
From the Los Angeles Times
Renters priced out of L.A.
David Lazarus
Consumer Confidential
March 9, 2008
Deanna Corbin, 46, would live in Los Angeles if she could. But she can’t, at least not with a modicum of space and safety, not on her $38,000 salary as an administrative secretary.
So Corbin gets up at 4 a.m. every day and hustles her 11-year-old daughter out the door by 5 for the two-hour drive from their apartment in Lancaster to downtown L.A.
Most days, they don’t return home until 8 p.m., when Corbin tries to devote some time to her daughter’s homework before they both collapse into bed. It all begins again at 4 the next morning.
This is the harsh reality for thousands of working-class people priced out of one of the priciest cities in the world. From housing and food to energy and entertainment, Los Angeles is increasingly out of reach for those living paycheck to paycheck.
“It’s a crisis,” said Gil Duran, a spokesman for Mayor Antonio Villaraigosa. “We have to have a city of mixed incomes with affordable housing for workers.”
Easier said than done. But planning and public-policy experts say steps can be taken to protect the city’s social and economic diversity. It’s just a question of priorities.
…
Jas
No downturn in housing bubblevision. At least not yet…
http://www.azstarnet.com/sn/biz-topheadlines/228699
During the tech bubble I turned off the Tv for a few years.
This crash is too compelling not to watch live.
After 911 I was up at 3 am watching fox, now Im up at 3am watching cnbc.
NO SAVINGS FOR YOU OR ME.
Where is the mope that wanted to buy Bank America at $36? (It’ll never get that low or the mope that thinks Citigroup is worth 3.2T.) How does it feel to buy a stock for a measly dividend and watch it good down 25% in value?
How does it feel like to have stinky fingers?
Speaking of BOA, I’m seeing them plastering ads for nice and shiny 0% until March 2009 credit cards everywhere. WTF?
BofA is trying to sell VISA. The more customers the more than can possibly get for VISA. Bank of America needs money.
Will one of you guys splain to me how a man can risk everything, a career he’s worked for . . . for THAT.
http://www.huffingtonpost.com/2008/03/10/spitzer-prostitution-scan_n_90766.html
Maybe we do need a woman president. Just not THAT woman.
You forget what is important. The grass is always greener. The spice was out of town. He is a friggin human not a saint.
He’s also a public figure with supposedly Presidential aspirations. Given his prior crusades, the hypocrisy of this is unreal. And it IS illegal, whether we agree or not. I don’t care about the sex part of it, just the notion that someone like that thinks the laws they enforce don’t apply to them.
lol, I do not disagree with you Ms. Tx !!! The problem is that it was not done in certain areas of Nevada. A certain lack of judgment that cost a family.
“The reason men are so good at reading maps is that only a man can think 1 inch equals 200 miles.”
Has anyone asked the junior senator from New York yet about what should be done with a philandering, lawbreaking governor???
LOL She has shown her answer already with slick willy…..”stand by your man”
Hey SdGuy,
There’s been quite a few politician wives that have stood by their man. Hilary is not the first.
and she will not be the last
“Sometimes its hard to be a woman
Giving all your love to just one man
You’ll have bad times
And he’ll have good times
Doing things that you don’t understand
But if you love him you’ll forgive him..”
Ms. Tammy Wynette never got a good enough beating for doing this song!
“There’s been quite a few politician wives that have stood by their man. Hilary is not the first.”
Well his question was about a certain senator.Im aware there are others.
Either way that doesnt make it the wise choice and and the question becomes ,Why? Power and money?
Of course….they just hope people forget over time.
“Ms. Tammy Wynette never got a good enough beating for doing this song! ”
Omigosh Hoz, lolololololol, too funny!!!
I agree, incredibly stupid act for such an ambitious man. I’ll never understand that kind of thing. It’s not a moral point as much as a professional one.
It worked for Bill.
Because even smart guys do stupid things sometimes.
And of all the stupid things a guy can do, this is one of the stupidest. I don’t get it either.
Will be interesting to see if he ends up resigning.
Blano,
It is not only stupid, it shows a lack of morales and ethics.
The ‘Id’ has to be fed from time to time. From Dictionary dot com:
the part of the psyche, residing in the unconscious, that is the source of instinctive impulses that seek satisfaction in accordance with the pleasure principle and are modified by the ego and the superego before they are given overt expression.
…
In Freudian theory, the division of the psyche that is totally unconscious and serves as the source of instinctual impulses and demands for immediate satisfaction of primitive needs.
Gawd, can’t these men keep their zippers shut? So stupid, stupid, stupid. I feel for his daughters and wife.
If he’d kept his zipper shut, he wouldn’t have a daughter.
I was some what optimistic when Elliot Spitzer was elected. He turned out to be a scumbag. He should resign and be prosecuted for his crime. What a f- ing idiot.
This scumbag has stunned us all. He was a crime fighter but apparently had a double standard. He is unfit for being a governor.
This post is for Ms. TxChick and others of like bent.
Go with your gut – intuition more than just a hunch, says research
“…There are many recorded incidences where intuition prevented catastrophes and cases of remarkable recoveries when doctors followed their gut feelings. Yet science has historically ridiculed the concept of intuition, putting it in the same box as parapsychology, phrenology and other ‘pseudoscientific’ practices….
“People usually experience true intuition when they are under severe time pressure or in a situation of information overload or acute danger, where conscious analysis of the situation may be difficult or impossible,” says Prof Hodgkinson….
“The driver couldn’t explain why he felt he should stop, but the urge was much stronger than his desire to win the race,” explains Professor Hodgkinson. “The driver underwent forensic analysis by psychologists afterwards, where he was shown a video to mentally relive the event. In hindsight he realised that the crowd, which would have normally been cheering him on, wasn’t looking at him coming up to the bend but was looking the other way in a static, frozen way. That was the cue. He didn’t consciously process this, but he knew something was wrong and stopped in time.”…
“We’d like to identify when business people choose to switch from one mode to the other and why – and also analyse when their decision is the correct one. By understanding this phenomenon, we could then help organisations to harness and hone intuitive skills in their executives and managers.”
Science Blog
http://tinyurl.com/2dg5b8
I try to never discount intuition.
want to read some funny s**t, look at dealbreaker.com
the gut.
voz has been hammered down. pressing bets on positions that intuition was saying go in. Funny that those positions are in the virtual account. Real account is marginally 7% off, lotsa dry powder.
still thinking:
critical must haves. (Canadian and now American Energy trusts are back on the table for more gumption going forward)
Telecom is toast, and only consideration is naked shorts.
Domestic Food, International Chemicals appear reasonable, Perhaps a short position of treasuries (the inflection at the 2yr seems reasonable), the game of lower rates is up. Time for cold water splash in the face.
Lastly, international technology and domestic commodities. There’s something here that J6P needs, and SWF’s want to buy.
Canada warns US over oil sands
By Sheila McNulty in Houston
Canada has warned the US government that a narrow interpretation of new energy legislation would prohibit its neighbour buying fuel from Alberta’s vast oil sands, with “unintended consequences for both countries”….
Section 526 of the law limits US government procurement of alternative fuels to those from which the lifecycle greenhouse gas emissions are equal to or less than those from conventional fuel from conventional petroleum sources. Canada’s oil sands are considered unconventional fuels, and producing them emits more greenhouse gas than conventional production….”
FT
http://tinyurl.com/327srk
Countrywide’s New Bad News:
http://www.forbes.com/markets/economy/2008/03/10/countrywide-fbi-mortgage-markets-equity-cx_cg_0310markets26.html
It just keeps getting better and better! I’m making some fresh popcorn tonight!!!
Must resist temptation to buy!! My how things appear to be turning for the worse in east, east Mesa. I am very familiar with this neighborhood and this particular model. I looked these homes before the models were even built in 2002. My friend owns this very model just a few doors down. Fortunately, for him he didn’t go too crazy with the HELOC.
This home is very close to the Mesa/AJ line. (Apache Junction). This home sold for $650,000 in Jan. 2007. Now being advertised by a realtor for $399,000. It is in forclosure and scheduled for auction next week. I am very suspicious of this listing as it appears to be a short sale, yet the realtor does advertise it as one. The first mortgage on the place is $520,000. I didn’t look at the 2nd. If this house actually sells for $399,000 or less - wow is all I can say. I must say, I have been a bit impatient, but this 2008 seems to be the year that the real price cuts start. Now, if 85249 can get accelerating down, then I will get real serious about getting back there.
http://www.trulia.com/property/1053716128-4131-S-Adelle-Mesa-AZ
Our last week here, in New Zealand…
If you based your knowledge upon newspapers or the tv news, you wouldn’t have a clue, that NZ has the MOST overpriced real estate, in the world.
A lot of their income is derived from tourism, nowadays.
Sightings of Americans have been few and far between this trip, and once the contagion spreads world-wide financially, Europeans that endure 25 hour 2-flight $2,000 ordeals, to get here, will be scarcer than hen’s teeth.
Looking forward to picking up a bach somewhere near Wanaka, for $100k, in a few years.
I wonder if this Craigslist post is from an FB stripping a house before vacating it:
http://charlotte.craigslist.org/mat/599435380.html
Rheem RPMC-048JAZ HVAC split system is a 13.2 SEER, 4 ton air with 105,000 BTU gas heat system that has been used for only 1 1/2 years and was installed in November 2004. It is in perfect condition and still under warranty! $800 or best offer. This will only be available through March 16. Thank you! Please call 828-256-1234 if you would like to see the unit or have any questions.
This was posted in Charlotte, NC. Anyone know where the 828 area code is?
Handy site for finding where an area code is located:
http://www.bennetyee.org/ucsd-pages/area.html
According to this - 828 is W North Carolina: Asheville (split from 704)
“In the current market, it does not matter how cheap shares have become,” said Yoku Ihara, manager of investment information department at Retela Crea Securities. “Overseas funds are dumping shares to liquidate their positions.”
Reuters
Japan stocks fall on U.S. recession worries, yen
Mon Mar 10, 2008 9:13pm EDT
Financial contagion is spreading rapidly around the globe. Could Russia be the last man standing?
Norway will be left standing (good time to be a net-exporter of fish and oil!)…
Mar 11, 2008
Euro-trash
By Chan Akya
Could one of the financial investment genius gold bugs in the virtual room please enlighten us all on the potential implications of this “alarm signal” for the value of their ($US-denominated) currency of choice? As always, I happily defer to those with superior expertise in such matters.
Trichet signals alarm at euro’s rise
By Ralph Atkins in Frankfurt
Published: March 10 2008 20:28 | Last updated: March 11 2008 01:56
Wow,$79K for a 4 bedroom 2 bath,1472 sqft.Thats what realtor dot com tells you.BUT read the listing written by a local realtor.I copied it as the link may not work unless you sign in.
http://www.realtor.com/search/listingdetail.aspx?zp=86442&typ=1&sid=3f0586c1909543d6b0873b9e72fc2ff6&lid=1096999987&lsn=5&srcnt=413#Detail
“Cheap Cheap Cheap”…” SELLER WANTS THIS ONE GONE! NO HIDING FROM THE FACT THAT THIS IS CURRENTLY A DUMP!
List # 810367
Single Family
Offered at:
$79,000
BHC, Arizona
Beds: 4 Type: Single Family
Total Baths: 2 Cross Street: MARINA
Pool: No County: Mohave
Year Built: 1971 Area: 16-Bullhead
Garage Open: 0 Subdivision: Riviera Heights
Gar Depth: Exposure:
Garage Spaces: 0 (approx 10X20) Builder/Manuf: UNKNOWN
Garage Dims: New Constr: No
Garage SqFt: Est. Date Compl:
Apx Liv SqFt: 1,472 Zoning: Res: Single Family Limited
Apx Lot Dims: 53 X 33 X 59 X 90 X 74 Fireplace: No
Full Baths: 1 3/4 Baths: 1 Half Baths: 0 Split BR: Yes
Apx. Total SqFt: 1,472 Lot SqFt: Apx. Acres: Handicap:
Features
Int Features: Breakfast Bar , Casual Dining , Counters-Solid Surface
Ext Features: Patio Covered
Appliances: Oven/Range-Electric , Refrigerator , Water Heater-Natural Gas
Lot Desc: Irregular
Master BR/BA: Shower Only Garage/Park: None
Res Type: 1 Story Roof: Other See Remarks
Heat/Cool: Other See Remarks Floor: Other See Remarks
Fireplace: Water/Sew: Sewer-City , Water-City
Laundry Hkp: Utility Room Electric/Gas: 110 Volt , 220 Volt , Gas Available
Construction: Wood Frame Fencing:
Comm Amen: Other Room:
Lockbox Loc: Front Door Terms: Cash
Docs on File:
Approximate Room Dimensions
Living Rm: Dining Room: Kitchen:
Den: Family Room: AZ Room:
MBR: BR 2: BR 3:
BR 4: Other 1: Other 2:
Comm Name: Unit ID: Occupancy: Occ. Restricts:
Public Rems: CHEAP, CHEAP, CHEAP… BRING ALL OFFERS, I AM NOT KIDDING… SELLER WANTS THIS ONE GONE! NO HIDING FROM THE FACT THAT THIS IS CURRENTLY A DUMP! LOTS OF POTENTIAL FOR SOMEONE WITH THE KNOW HOW, OR MEANS… SCAVENGERS DREAM, AS THE SELLER JUST LOCKED THE DOOR AND WALKED AWAY, LITERALLY! THIS HOME IS SOLD AS-IS. NO EXPRESSED OR IMPLIED WARRANTIES. NEEDS NEW ROOF, AC, FLOORING AND MORE.
Directions: NORTH ON HWY 95 TO MARINA. MAKE A LEFT. TO BERMUDA AND MAKE A LEFT. HOME IS JUST BEFORE THE CURVE THAT HEADS DOWN HILL ON BERMUDA.
Taxes: $646.1 Tax Year: 2007 Assmnt Type: SEWER
HOA/Dues: No/ $ Ann/Qtr/Mthly: Assessment: $2,122
Home Warranty: Map Coord: SqFt Source: Tax Roll
Flood Plain: No Possession:
Strange comment on the over-consuming society on National Public Radio today. An experienced burglar was trying to explain the consistent decline in burglary over the last 30 years.
He said you have to be able to sell your stolen goods. It has gotten increasingly hard. Not because of police activity, etc., but his thesis was: because “people already have everything”. Don’t bother with appliances or TV’s, no one wants old laptops, and if you steal a VCR they will just laugh at you. Everyone already has a digital camera and an iPod, and all the pirated DVD’s they need, and besides, people will pay a premium for “brand new” stuff still in the box and don’t want used/stolen stuff.