Bits Bucket And Craigslist Finds For May 2, 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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BOA May Balk… This could be fun…
http://www.bloomberg.com/apps/news?pid=20601103&sid=aXNMMNWfaz8I&refer=news
Is that Red Oak Merger Corp or Dead Oak Merger Corp?
Sudden Oak Death, while not a funny topic, is appropriate here, IMHO.
It’ll be interesting to see how this plays out. Maybe that’s the plan, bankrupt the company to get rid of the liablities and keep the customers.
This can’t happen. Normal procedure for a failing company like Countrywide is the debt holders get paid first and the shareholders second. This buyout and spin off of Red Oak reverses the order.
And if it does happen, kiss the credit markets good bye. The precedent would make holding debt riskier than holding equity.
BofA, a holding company, acquires Countrywide Financial, another holding company. BofA then merges the Countrywide S&L into the BofA bank. Countrywide Financial, without the S&L, can’t service it’s corporate debt (which is separate from the S&L debt). BofA then puts Countrywide Financial into Chapter 11. If the bond agreements don’t have restrictions on Countrywide Financial’s ability to shed assets, then the bond holders are probably SOL.
Keep in mind that “who gets paid first” can vary from state to state.
So BofA wants to create a new company, dump its debts into this newly created company, then declare this newly created company bankrupt.
So, why can’t everybody do that?
Why can’t I do that? Why can’t I transfer all my debts someplace else then have this someplace else declare bankruptcy?
This is truly nuts.
The creditors (bondholders) won’t go down easily and they tend to hire attack dog law firms like Weil Gotshal or Akin Gump. Should be entertaining bankruptcy court litigation.
Who’s going to win? This will be a precedent setting case for the brewing battles between corporations and bondholders.
Bank of America Corp., the second- biggest U.S. bank, said it may not guarantee $38.1 billion of Countrywide Financial Corp.’s debt after taking over the mortgage lender, fueling speculation that Countrywide’s bondholders face renewed risk of default.
Wow. All I can say is fourth credit crunch wave.
Got Popcorn?
Neil
BoA is under no obligation to honor Countrywide’s debts, just like any other shareholder of any other company - even if they hold a controlling interest. The issue is if they try to strip its assets. Bondholders have first dibs on a company’s assets, and they’ll go ballistic at the first whiff of this.
“Bondholders have first dibs on a company’s assets, and they’ll go ballistic at the first whiff of this.”
You would think so, but so far there has been relatively little public outrage at this. If BOA is throwing this idea out to put out “feelers” on how that plan would go over, well so far it would appear as though they’re getting a green light. Countrywide stock is up today, but naturally the stakeholders would prefer BOA’s plan too.
Countrywide should be allowed to die and the executives should be prosecuted for fraud (if such can be proven).
sure, people hire lawyers but then in the end the people get coupons for toasters while the lawyers get cash.
This is a cousin of the “Super-Sewer-SIV” introduced earlier last year. Create a shell company, put all the debt in it, declare it bankrupt, and then walk away with the loot. I wish I could do that with my personal finances - what a crock!
Let me see… I create a corporation that buys a Noe Valley condo for a million bucks to conduct its business, which is playing Grand Theft Auto IV and writing my opinions about it on blogs. Unfortunately, this business model isn’t generating very much income, so to pay my salary, I sell the “asset” or condo to myself for $1000. A month later my corporation still hasn’t generated any revenue–nowhere near enough to pay the interest and principle on the condo– and so it files for bankruptsy, having lost everything, and I have me a new place!
You can. Get someone to guarantee your debt and have the lender release you. It’s called an assumption and release. If the guarantor is in better shape than you are the lender may agree to it.
“Countrywide debt included $11.5 billion in credit lines at the end of 2007 and $47.7 billion in advances from the Federal Home Loan Bank Board. Bank of America said the credit lines will be paid when the merger is completed, while the advances will remain outstanding.”
I am confused. The portion that BoFA says will “remain outstanding” is advances from the FHLB. Do these advances reflect US Government (taxpayer) obligation or backup?
The advances are obligations of Countrywide Bank, the S&L, not Countrwide Fincancial Corp, the holding company that owns the S&L. Countrywide Bank obligations will be assumed by Bank of America, the commercial bank. The FHLB advances are secured by loans and securities held by Countrywide Bank. FHLBanks are not government agencies though they are controlled by the government through the Federal Housing Finance Board. FHLBs borrow on the open market through the issuance of bonds that are not obligations of the US. FHLBs are government sponsored enterprises (GSEs) like FNMA, FHLMC, and a host of others.
2 Billion Dollar Stack-A-Shack…
http://finance.yahoo.com/real-estate/article/104984/Inside-the-World’s-First-Billion-Dollar-Home
I vaguely recall some offhand remark about camels and needles, from some important guy somewhere..
Tacky… Very tacky.
yes especially since this is located in Mumbai, the home to the largest slum in Asia. I hope the slum dwellers can look up to the 27 story structure from their 6×6 shack and feel better about themselves.
http://observer.guardian.co.uk/flash/page/0,,2025270,00.html
Where the “Naked Lady” from a couple days ago? “Viva la Revolution” que: “la Marseille”…
http://www.national-anthems.net/real/FR
So… they build a billion dollar house while people starve in the streets below.
Humanity never fails to disappoint me.
I hope someone can clarify this for me, I might have read to quickly or just be hitting a wall.
The building will be in Mumbai, but the author feels the need to specify “85% of the materials will come from outside the US.” Isn’t this a phrase usually reserved for American-assembled products with foreign parts?
Why would someone fly US workers to India for a construction project? Or import US building materials?
because US construction unionized workers have goldbricking down to a science, and we all know how much India values a good education.
Iran dumps U.S. dollars in oil transactions
http://news.xinhuanet.com/english/2008-04/30/content_8083804.htm
The ingrates!
After all the U.S. has done for them…
Thu May 1, 4:27 PM ET
Former U.S. baseball star Jose Canseco said on Thursday he had lost his California mansion to foreclosure — one of the first celebrities to publicly admit being a statistic in the U.S. housing crisis.
Canseco, 43, one of the most flamboyant U.S. baseball players until his retirement from the major leagues in 2001, told the celebrity TV show “Inside Edition” that it did not make financial sense to keep his 7,300 square-foot (678.2 sq-metro) home in the Los Angeles suburb of Encino.
“Inside Edition” said it had foreclosure documents showing Canseco owed a bank more than $2.5 million on the house.
“Money is easier to make than it is to keep.”
- Jessie Livermore
No no! He says quite clearly that he’s voluntarily going into foreclosure. Here is the poster boy for somebody saying “Hey, bank, this house isn’t worth what I owe on it. It’s your problem now.”
Unless, of course, he’s lying about his
steriodsmotivation and really is in foreclosure.Unless you’re the Fed!
Countrywide bondholders might take a nasty bath.
Bank of America May Not Guarantee Countrywide’s Debt (Update1)
May 2 (Bloomberg) — Bank of America Corp., the second- biggest U.S. bank, said it may not guarantee $38.1 billion of Countrywide Financial Corp.’s debt after taking over the mortgage lender, fueling speculation that Countrywide’s bondholders face renewed risk of default.
“There is no assurance that any such debt would be redeemed, assumed or guaranteed,” the Charlotte, North Carolina-based bank said in an April 30 regulatory filing, adding that no decision has been reached. Investors have grown more optimistic the bank would back Countrywide debt, and Standard & Poor’s said this week it may raise Countrywide’s rating to match Bank of America’s.
http://www.bloomberg.com/apps/news?pid=20601103&sid=aXNMMNWfaz8I&refer=news
Whalen expects Bank of America to absorb the best assets, including Countrywide Bank, while the debt remains with a new company created by the merger, Red Oak Merger Corp. Red Oak may then file for bankruptcy, shielding Bank of America from liability, Whalen said.
I love it. Nobody will ever trust a bond again, and rates will go thru the roof. That’s certainly one way of fixing the risk conundrum.
Perhaps the FHA or one of the GSEs could guarantee CFC’s debt?
“Jobs Report Today Expected to Post Fourth Straight Month of Job Losses ”
The way things are going that should push the DOW up to a new record high…in this strange universe where bad news means good news for Wall Street.
If unemployment is on the rise, then a bottom must be at hand. Rising unemployment is viewed by permabulls as a lagging indicator — a bullish indication of the recession that has already occurred but is now ending. Of course, permabulls view every other measure of economic activity as a bullish indicator as well…
“All the perplexities, confusion and distress in America arise not from defects in their Constitution or Confederation, nor from want of honor or virtue, so much as downright ignorance of the nature of coin, credit and circulation.”
- John Adams
I was amazed by how much John Adams looks like that guy from Sideways. Spooky.
Yeah, I was reading that quote and in my head I was hearing former MLB Commissioner Giamatti’s son’s voice…
“I will NEVER drink Merlot!!!!!”
LOVED that movie - Virginia Madsen is HOT (always has been).
I prefer to picture him as Harvey Pekar.
May 2 (Bloomberg) — U.K. house prices posted the first annual decline since 1996 in April as mortgage lending dried up and the construction industry shrank the most in almost a decade, industry reports showed.
But the UK is different.
On NPR they are discussing the proposed “tax holiday” by McCain and Hillary. What a joke. The federal tax is $.18 per gallon. McCain said it could save “a few bucks” on a fill-up. Oh wow, that should be a boon for every FB. And where will the lost revenue be made up? Scratch bald dome, optional.
Oh, and there is one other problem with this mindless pandering. If they do this “tax holiday” the refiners might just jack up their prices, thus taking away any savings. This is almost like a cartoon where a guy nurses a bird back to health. After weeks of mending and worry, the man releases the bird into the wild only to have an alligator rise up and snatch the little birdie out of mid air. I think you and I might just be that little birdie and the world is filled with alligators.
Another idiotic gimmick which will undoubtely work to dupe retards on Main St. Dumping the tax is inflationary and will have the opposite effect intended…..WTF??
Thomas Friedman on this proposal and U.S. energy policy:
http://tinyurl.com/62go9n
“Hillary Clinton has decided to line up with John McCain in pushing to suspend the federal excise tax on gasoline, 18.4 cents a gallon, for this summer’s travel season. This is not an energy policy. This is money laundering: we borrow money from China and ship it to Saudi Arabia and take a little cut for ourselves as it goes through our gas tanks. What a way to build our country.”
“When the summer is over, we will have increased our debt to China, increased our transfer of wealth to Saudi Arabia and increased our contribution to global warming for our kids to inherit.”
The McCain-Clinton gas holiday proposal is a perfect example of what energy expert Peter Schwartz of Global Business Network describes as the true American energy policy today: “Maximize demand, minimize supply and buy the rest from the people who hate us the most.”
I also like the line I read recently about how American businesses want Americans as customers but not as employees - buy something today, but don’t expect a paycheck. Not sure how that’s going to work out long-term!
I’d be ok with it if there was some sort of corresponding reduction in federal spending in real dollars to offset the revenue loss. Since that never happens, forget it.
That money is dedicated to transportation projects. We need to be spending more on transportation, not less. I’m not in favor of cutting that budget by 25 percent for an election year gimmick that would save most people, at most, $50 or $100. I’m not a politician. My price is higher than that. Would that loss of revenue also stop or delay ongoing projects, putting people out of work?
NYCityBoy, maybe there’s something to be learned from the redtail hawk I helped rescue yesterday. The hawk couldn’t fly, so we suspect a broken bone somewhere. We carefully released the hawk into a flight cage to see what she would do, and the wildlife rescue people had put a dead quail on a stump for her to eat. She saw the quail, grabbed it in her talons, then fell over, playing dead (hawk’s natural defense). Last time I saw her she was still playing dead, but no way was she going to let go of that quail.
Kind of reminded me of the people who were hanging on for dear life to their houses…
Saw 2 more signs on commute this morning. New listings are adding to inventory but the interesting thing about these two houses is that they are pre-bubble, circa1999 houses. Nice, tight, bug in the rug type construction without any gingerbread, roughly 1800sq ft and well maintained. I never thought I’d see stuff like this come on the market, especially now. If I weren ‘t concerned with maintaining mobility and were interested in planting roots in this area, these two places would be at the top of my list.
1999 house, but what year was their home equity line?
Now, now - it’s like like they took out a $250,000 HELOC on a $150,000 house or anything?! Besides, I thought “Debt is Wealth” is the new rule! Hahah!
I guess you can’t buy love…this in the week the checks go out.
WASHINGTON DC (CNN) — A new poll suggests that President Bush is the most unpopular president in modern American history.
A CNN/Opinion Research Corp. poll shows 71 percent disapprove of President Bush’s job performance.
A CNN/Opinion Research Corp. survey released Thursday indicates that 71 percent of the American public disapprove of how Bush is handling his job as president.
“No president has ever had a higher disapproval rating in any CNN or Gallup Poll; in fact, this is the first time that any president’s disapproval rating has cracked the 70 percent mark,” said Keating Holland, CNN’s polling director.”
I know some of the 29 percent. I wouldn’t put much stock in their opinion.
What do you want to bet some of that 29 percent are terrorist sleeper cell types. GWB and his cronies have done so much to weaken the US; there’s no way OBL could have accomplished so much.
I’ve read a commentary that US mortgage-based debt securities sold around the world have caused more damage to the global financial system than anything Al Qaeda could ever have come up with.
Buffett got the term right: weapons of financial mass destruction.
BTW it wasn’t a coincidence that OBL released that video right before the 2004 election. He wanted GWB re-elected. The Iranians actually came out and endorsed him.
Back way back when, the decider had an approval rating of what? 85%, 90%?
The real trouble makers are not the 29% - instead it is the masses that flip flop from pol to pol looking to for protection from whatever boogeyman threatens them. One year the boogeyman’s hiding in some cave, a couple years later the boogeyman’s hiding in their gas tank.
As you all say: Bread and Circuses…Bread and Circuses.
The real trouble makers are not the 29%
No, they’re just stone-cold crazy, most of them.
Apparently 20-ish percent of Americans can be cajoled into thinking almost anything is a good idea (”Infect the general population with smallpox? Great idea!”). I suspect the other 9 percent or so are war profiteers, corporate profiteers, cronies, oilmen, mercenaries and the like.
I’d like to clarify that I believe the 20-ish percent I’m referring to is (generally) apolitically nutty — not liberal or conservative, black, white or yellow, or any other particular stripe of person — just plain kooky.
Ask a different question, get another 20-ish percent of nutjobs answering in an astonishing fashion.
I still haven’t figured out whether that’s charming, harmless, or terrifying.
Bush is incompetent. Whenever his name comes up, the word idiot immediately comes to mind.
I wish he would just go away and not screw things up any more before he leaves office.
George, just go away.
“George, just go away.”
I might agree with you on that if Dick Cheney wasn’t next in line for the job.
And Hillary or Barack after Dick.
Because McCain, continuing every Bush policy, would be so much better than either of them?
How is it in the 29%?
I am a physician in Dallas.
When I was in medical school for the first 2 years - fully 12 hours a week were devoted to human behaviour and psychology. The professor was a true believer in a psychological framework known as transactional analysis. Believe me, while doing it - I thought it was all mumbo jumbo and moonbeams - but as I got out into the world and began my career - I have realized that by far his lectures were the most important coursework I did in all my training. Part of this course was to learn to determine facial expressions, tics, style of voice, hand gestures and other behaviours - and instantly tell before the person opened their mouth a lot about their personality. You then transact your meeting with the patient or contact based on their behaviour. YOUR BEHAVIOUR as the interviewer or physician is tailored to their personality and world view.
Well - this has served me immeasurably as a physician - and unfortunately it drags into my private life as well.
So - 10 years ago - when Bush was the governor of Texas - he got a lot of face time in the local media. His trademark expressions are “angry eyes” and “smily mouth” - and his facial and hand gestures indicate a strong tendency toward a narcissism. As my professor used to say - these people are among the most scary of all - they tend toward having no feelings toward their fellow man - they get into sadism and torture - and are very likely to pick fights - they do not understand the concept of negotiation - and use denegrating names and racial epithets all the time. I warned and warned and warned everyone I knew - to no avail - he became the president - and alas - my old professor was proven right in every way.
I would just like everyone to know - that John McCain is also a narcissist - common among politicians - but without the sadism - and Barack Obama - is what is known as a genital character - (as close to normal as you can be - NOT a reference to sexual addiction a la Bill Clinton - you can look up transactional analysis on wiki and understand where the name “genital character” comes from).
Hillary Clinton - however - has the EXACT SAME combination of tics and personality traits as George W Bush - and I fear their behaviour will be very similar. They can be very charming and likable when they need to be - but this type of personality has daggers like no other. I would urge America to watch out. And I pray for my country every day - we cannot afford another 8 years like we have had.
thanks for confirming my impression of Hillary….she strikes me as the kind of person who, when pissed off, is completely capable of burning down your house and running over your dog–and, as a parting shot, kicking your aged mamma in the knees just for the pure hell of it.
Good post, Dagan.
I am a physician also. Transactional analysis has very little light it can shed on the behavior of large numbers of people acting in groups. E.g., examine how well organizations of transactional analysis teachers function. The difference is almost as marked as that between Newtonian mechanics and quantum mechanics.
Then you throw String Theory into the mix and it’s all over the place.
Dagan: have you ever read this?
http://samvak.tripod.com/npdglance.html
unfortunately for me, I’m a narcissist too. I know that would shock everyone here. LOL
Yeah, I just got an email from the IRS saying I have a 67.00 refund check coming my way. I told them to donate it to the los ninos’ fund.
What are the odds the jobs number comes in hot? I would guess the birth/death model will favor Wall Street, Goldilocks will start doing jumping jacks, and the rally will continue. That is my gut feeling. I think we are back in the Land of Make Believe. I can’t wait until I move into my new neighborhood and don’t have to see these Wall Street jerks every day.
I wouldn’t be surprised if it did. Imagine if we all had the chance to measure ourselves like the government does. Seems a bit weird that the government is the one who comes out with numbers that measures how well the government is doing.
Not as bad as thought. Lets see if any rally holds and how the dollar and oil and the commodities react. I am very close to closing out my IXG position for the year as it will have hit my goal (+10%). I am pretty conservative….
Greenspan and His Critics Misread Housing
http://www.realclearmarkets.com/articles/2008/05/greenspan_and_his_critics_misr.html
Just finished a book called The Greenspan Bubble. Very good read.
Isn’t it the “Greenspan Bubbles?” Its on my shelf and I’m going to make time to read it. Like after I get off this blog.
Got Popcorn?
Neil
“If anything, this speaks to non-interest rate and non-Fed factors that have driven the dollar’s direction in recent times including geopolitical events, domestic policy decisions such as taxes and tariffs, and most importantly, the stance taken by the U.S. Treasury when it comes to defining the dollar’s price.”
But it was Greenspan that gave W carte blanche to cut taxes and spend like a drunken sailor, ballooning the deficit and tanking the dollar.
So true.
We need Volcker. I hope this period will at least get rid of the fantasy that lower interest rates are always good.
Does anyone else think it was Volker who advised Obama that the gas tax holiday was a stupid plan?
“Volker who advised Obama”
Very possible,but doesn’t matter, at least he is getting decent economic advice. If Volcker has got his oar in, praise the Lord.
Possibly.
It’d be interesting to know how actively Obama’s people are tapping Volcker’s knowledge, if at all.
What a BS article. He states;
“Greenspan’s critics conclude to varying degrees that his decision to reduce the Fed funds target to 1 percent, in 2003, where it remained for a year, was the cause of the property boom and that the reversal of this policy was the cause of subsequent house price declines.”
That is a strawman argument and NOT what his critics say at all. His critics (like most on this blog) say he ignored the bubble and failed to regulate and even promoted exotic loans, he then failed to regulate and even promoted the whole CDO scam by the hedge funds.
In fact almost all those who warned about the bubble specifically said it was not the low interest rates alone driving the prices.
Basically this article is worthless.
I will not be able to add to the Weekend Suggestions. In the morning I can usually only sneak a couple posts in before the real work begins. My suggestion for this weekend is a comprehensive look at the middle class. What is it? Where is it headed? What role did the middle class play in the housing mania?
Yesterday there was some discussion about whether or not people should have sold when the bust became obvious. I still disagree completely with those that say no. The middle class was offered a financial windfall unlike anything they had ever seen. They failed to take action because it would have required them to, ahem, take action. The excuses range from not uprooting the kids to “there is a stigma with renting”. In my opinion, the middle class chose not to look after its own interests. Some people had the chance to bank 10 years of savings or more. Not only did many middle class not sell their prized asset they HELOC’d it to death. That means they tried to take advantage of asset appreciation but god forbid they actually do the work that such a thing would dictate.
Yes, I know there are people that love their homes and neighborhoods and would not sell. Then those people shouldn’t be complaining about their plight during the bust. After much thought I believe that the massive asset appreciation was in some ways a severance package provided by globalization. The global economy said, “your standard of living is going to shrink and you might even lose your job but this is one last chance for you to cash in”. This is like unions that turn down a great contract only to later be forced to accepting sh*t. I was not in a position to cash in. But I knew a lot of people that were and I told them, “I would be selling now no matter what”. None listened. But I hear a lot of those same people now complaining.
Rather than pull the trigger, many doubled down and are now losing their asses. I personally know two couples who are long time friends of the in-laws. The common thread among in-laws observations? “Both couples look like hell” or variations of that idea.
This is just an observation. I am a housing bear like the rest of you but the housing market in Orange County California has really picked up. Lots of houses selling.
… significantly above the asking price !
I’m just wondering where all the idiots are comming from that have high fico scores, can qualify and have money for a down payment. Below asking price or not they are selling which worries me.
How do you gather your data?
Which Zip Codes?
Just curious, because the few I follow are stagnat as heck-Orange, Tustin, Anaheim Hills, Yorba Linda, ie North County.
92656
92691
92692
This is also the plight of the boomers who anticipated using their housing appreciation as a retirement nest egg.
I know a lot of people who have bought into the idea that they are middle cass but have needed to maintain that illusion by going into a massive amount of debt. HELOCs have been just another example of maintaining the appearances.
We should start judging our financial statuses by our net worth, not our incomes.
Judging our financial status by incomes is just fine. It’s judging it by spending that’s the problem.
Borrowing is not income.
If you went to college, you’re “middle class”. It’s about a mindset, not money. You make middle class sound like something unattainable. I can see people “buying into the idea that they are upper class” and being wrong about it, but being middle class isn’t that big a deal and certain people need to stop implying that you need to be rich to be middle class. : )
By the way, you can have a gigantic income and totally be lower-class white trash, though, for sure.
I was raised to recognize ‘class’ by the quality of a persons character [ my mom also looked at the soles of shoes].
Well yes, with the benefit of 20/20 hindsight it’s fairly obvious that selling at peak (if you didn’t double-down) will turn out to be a huge windfall for those who did it. Of course this is exactly what many of the flippers intended to do. But most of them held on too long. Houses were already looking overpriced in 2003. Beleiving that we’re in a housing buble is one thing. KNOWING exactly when prices will collapse is another. Double digit appreciation lasted longer than I thought it would. If I’d sold back in 2003, I’d probably have an extra 100k of savings, but I wouldn’t be within 10 years of owning a paid off house, and I’d be probably be expending more on rent than I am for my mortgage.
Around here, there’s general agreement that rent/purchase ratios and price/income ratios are still significantly out of whack. The question is: how much of the rebalancing will be through nominal price declines, and how much through inflation? There is considerable debate here between the deflationists and the inflationists. The distinction is CRITICAL in a buy/sell decision. If nominal prices fall, you should have sold. If we enter a wage/price spiral and inflation surges out of control, keeping your house means that you’re paying sub-market interest for as long as you keep it.
As with all investment decisions, figuring out when you “should have” bought or sold tells you very little about whether you should buy or sell today. The future is the question, the past is either crying over spilt milk or gloating over your cheese.
I disagree. I almost got in a fistfight on Christmas Eve 2006 discussing New Jersey real estate. I laid out a perfect case for selling in NJ at that time. Nobody wanted to listen. Those people are probably down 20% or more just from that point. This bust snuck up on us like an elephant. It wasn’t an overnight collapse.
Merry Christmas!!!!! lmao…. I wish I’d been there NYCB. I’d have gladly responded to the chant “kick’em in the balls”!
I bet you can’t wait until Christmas Eve 2008. lol
Spend your holiday with NYCB. Prepare to have your ass kicked up around your shoulders. Bring the family too!!! Merry Christmas!!!! (im dying laughing here)
I bought a reasonable house under $200,000 at 4.875% for 15 years. By the time the house is paid off in 10 years, I can retire and live adequately to my current somewhat frugal standards if I wish, simply by stopping my current investments. I should make major life changes to avoid losing my little bit of phantom equity gain?
If there were hundreds of thousands at stake rather than a 10k or two I can see your point… However, anyone who bought a house reasonably priced to their income (under 2.5x) with a 20% down payment doesn’t have much incentive to panic in my mind. Of course, there aren’t many of those in CA or FL or NY.
So the prudent part of the middle class (in the middle of the country) is watching this with a grimace and annoyance for the decreased liquidity gifted by the super leveraged among us.
Ever read this? It’s on class and status in America. It’s very good.
http://query.nytimes.com/gst/fullpage.html?res=9F04EED81E30F936A25756C0A9639C8B63
“As Phillip Swagel, a resident scholar at the American Enterprise Institute, put it, ”We want to give people all the opportunities they want. We want to remove the barriers to upward mobility.””
Pretty interesting…I don’t see how you can remove barriers to upward mobility while reinforcing barriers to downward mobility, though.
Upper, Middle, Working classes
morph into
FB, non-FB
After slogging through that, I would put it rather that the consequences of stupidity, recklessness and thoughtlessness are greatly increased. As technology increases, globalization or whatever, the bad choices made previously now haunt forever. This hurts the lower classes more. Trump can start over 3 times. The guy who drank himself into disability is stuck without a drivers license.
Have one or three children without marraige: you are solidly stuck in the welfare class (which may be a relative win, hence the boom from the perverse incentive.)
Do something stupid in your youth: even 30 years of exemplary fugitive status in San Diego society doesn’t mean you won’t have to serve out the rest of the 9 years of prison you escaped from.
Don’t study in whatever school you go to, you chose to shut down your chance at upward mobility.
“America’s Chickens Are Coming Home To Roost!” (And yet another example of consequences
)
Funny you post that. That’s what I always tell my Son, “life is a series of choices - those choices all have consequences, good and bad. Choose carefully even now (he’s in his early teens) because the past can reach out and bite you when you least need it”.
After the speech about the need for doing well in school (he was lackadaisical about it last year) he thought about it, pulled himself together this year and I just returned from the conference with his counselor who recommended that he be placed in the Advanced Honors Diploma Track next year in high school. I’m so proud… *sniff*
Even if the anti-offshoring types are right and education is increasingly worth less (not worthless)…. what if they are wrong? There is absolutely NO reason NOT to excell as much as you can in high school. Go to college or not: can be a valid choice either way. Graduating high school means that it IS a choice: not a consequence. In free high school, studying is a no brainer.
My wife is from the Philippines where you have to pay to go to high school. She despises high school drop outs here in the land of the free.
I studied engineering and my career is the search for more margin. Not necessarily more performance, though that often brings more margin, but more safety margin. Not excelling in high school means you just tossed any margin for error you had. Cut down your choices markedly. If it costs very little, keep your choices open. In HBB terms… “Rent”
Sorry, I meant: Congratulations to jwhite & son, way to go!
then que diatribe part 2 for those still goofing off!
Thanks for your kind words Matt, the Kid wants to be an aerospace engineer by coincidence, he’s always had perfect grades in math. He’s thinking Auburn or the Air Force Academy for college. I’ve been to the “Pines’ and its heartbreaking to see a country where their primary export is their citizens. Unless you’ve been to places like that, most Americans truly have no idea of how good we have it here and how much this country is worth defending - warts and all.
JWhite, your son is lucky to have a Dad like you. He will be OK…
A friend of mine in HS was fairly lackidaisical in his studies, more interested in being on the soccer team (though he rode pine) than doing well in classes. Now he’s an aerospace engineer. A few years out of H.S. he was kicking himself because he was paying cash money taking courses in community college that he could have taken for free in H.S.
Even if the anti-offshoring types are right and education is increasingly worth less (not worthless)…. what if they are wrong?
So true. But you know what, even if they are RIGHT and there are no jobs here, there are benefits to having a good education, specifically a university degree. Once you have that, it’s a LOT easier to get work visas (and thus residence visas) in other countries. I know. I’ve done it several times. And this gives your kids a good long term escape route just in case things in the USA do decline in years to come. If there’s no decline, no worry, though it can be nice to have if they WANT to live other places anyway. Oh yeah, as for grades, I never had ‘em ask about that — the immigration authorities want nothing more than the degree.
This type of thing is surely so long term in a teenager’s future that s/he can no way fathom the usefulness of it, so you can only hope they can follow through. Sounds like he’s on a good path already, though.
Thanks to all of you for your comments. His Mother is a senior college administrator, she’ll make sure he’s in the dual enrollment classes-which by the way are the biggest deal of the century for parents - get all your “bonehead” classes out of the way for 20% of four college tuition.
My brother is an aerospace engineer (though I’m much happier referring to him as a rocket scientist— he actually is and has worked on space probes.) He worked his way through college, engineering and Honors Program in four years, took a job with Boeing, and then went back for his master’s a few years later.
Make sure your son knows that he should apply for every scholarship he even remotely qualifies for— my brother saved a quarter of his tuition through a scholarship he thought he’d never get. And working after the undergrad degree actually makes you more attractive to the graduate programs, not less. He tells me that his professors were impressed by how he understood what was important, as opposed to those students who came straight from college.
Good observation. I cashed in, but I can’t say it’s because I’m smart, it was because I knew something was awry and didn’t want to get stuck living where I currently was. But it seems like most everyone I know didn’t do that and now they’re stressed to the max.
I think being “middle class” is more of a frame of mind than fitting into a specific income bracket and varies widely based on where you live. A middle class income here in Texas certainly might leave one feeling poor in New York. I think the issue of who should have sold during the bubble is more complex and seemingly clearer viewed in hindsight. I’ll certainly not argue the fact that many could have had the windfall of their lives by selling at the height of the bubble. However, there was the mindset that real estate only goes up in value. People were able to constantly cash out refi and buy more consumer junk while holding onto the house which was still appreciating quickly. Selling it would have seemed like killing the goose that laid the golden egg. I also think the psychological aspect was very important in keeping most people from selling. Americans have been conditioned to equate home ownership with being middle class. I’ve seen hundreds of comments regarding the stigma attached to renting, especially at the height of the boom; I just don’t think most people could part with the idea of ownership and many still can’t. People in general are not adept at making non-emotional analyses of their finances and then taking whatever action would net the most money. I also think there are those who knew they could make a killing selling, but chose not to for personal reasons. For some there are things more important than money; it just depends on what you attach the greatest value to.
“However, there was the mindset that real estate only goes up in value.”
It doesn’t take much analysis to see that can’t be true. I think people just quit thinking and bought into the scam. Pure greed. I watched it in people I know and respect (ed)…
Well, it was true for about 10 years, so it really wasn’t a scam. People just looked at short term conditions and extrapolated out to infinity.
NYCityBoy: the massive asset appreciation was in some ways a severance package provided by globalization
you are right!
“NYCityBoy: you are right!”
I love those words.
Classic HBB line
NYCB, I am not complaining.
My costs on my home are low, and I can lose 70% of the increased equity and still break even.
As I said yesterday, not everyone was watching the housing market on the Blogs, since we owned and were not interested in trading up for a similar house with a higher mortgage.
I sat out the housing bubble like I did with the dot-com bubble. When things get stupid and you don’t know why, you don’t play.
imho
I bought my house in ‘90 for 122K. Added a pool for about 20K. Houses like mine on my street were selling for 400K in ‘05. I did not sell all though I considered doing so. I could sell it now for maybe around 325K.
I do not regret it. I was not ready to sell. Kids were still in school. I was not ready to uproot and move. I probably would have had to rent from some FB and have been evicted from rentals due to foreclosures several times since then. Not worth the hassle.
The market is down now. That’s fine with me. I will have to sell for less, but will get to buy the next one for less too.
I think this whole thing about timing the sale of a primary residence is silly. If your house is going up in way up in value, well then everyone else’s is, too! It’s only an illusion of wealth. Cash is nice but you still have to live somewhere. And who knew for sure when the correction would start? Hindsight is always 20-20.
I’m amazed how many HBBer’s don’t seem to get the idea that historically, the reason to own a home was to stay in one place, and pay it off in 15-20 years! Then you have no mortgage, and no one will ever kick you out for any reason. (OK, there’s always eminent domain, but you get my point.) But to do this, you have to live within your means, and most people don’t anymore.
If you’re saying that people who were over their heads with large mortgages to begin with should have sold, I agree, since they never owned to begin with. The rest of the people were wise to stay put. And yes, we have no room to complain. The only thing I care about is how the price of houses in my area is holding up relative to prices in other regions. The sale value of the house doesn’t mean much by itself.
Not completely the case, it was a once in a life time opportunity for a windfall profit by insane speculation in housing, we sold and rented just because we needed more space — looking around it looked like a good time to sell but not a good time to buy. The clincher was to look at the tax-free profit which exceeded 10 years of maxed out 401k savings… Not too often do you get irrationality in pricing like that.
For those that choose to re-invest in a bigger house, what I dont understand is dont you want to diversify, rather than put all your not-insignificant gains in the housing market ?
Of course if I had other (non-price speculative) reasons to sell sometime within the 1-2 year time frame of 2004-2006, then the general market conditions would have clearly pushed me over the top.
As it was, I sold in 2002, and again in 2003, for non-bubble reasons. Sure, in hindsight I should have waited a year or two, but I wanted to get on with my life. Who knew where things were headed? I didn’t. I’m holding on to a (paid for) 900 Sq. ft cabin in a remote area of UT for which I paid $67K. It wouldn’t have made any sense to sell in 2005-2006 since I might have gotten 10K in appreciation, and there’s no satisfactory rentals as it’s a very small town. Sometimes you just have to hold and wait it out.
Nice idea for the “middle class” to pull the trigger during the peak of housing, but it could only go so far. If the entirety of the middle class tried to sell at the peak, well then the peak would disappear very quickly… supply/demand dynamics and all. Unless you think investors could have kept up with massive new inventories. I suspect that if a mere additional 1% of middle classs homeowners had sold in 2005, the bubble would have popped right then and there. The other 99% would be in the same situation that they are now.
Absolutely correct. What we need is more stability in real estate values and less speculation, not more buying and selling that doesn’t otherwise need to occur. Some of the comments on this thread sound like they’re coming from realtor’s. More commissions!
No matter what they do, only small portion of people can benefit from runaway house price. If many choose to do it, the price will drop even faster. There is only available amount of money can be spend on housing, too many people start selling, there will be no enough of money to support the high price.
Hoz - thanks for recommending the Lefevre/Livermore book. It was really fascinating to see how the markets operated back then and how little has changed in 100 years. What I can’t figure out is why a man who knew himself well enough to inform his trading (following research & intuition, not emotion) chose to marry a woman whose four previous husbands had committed suicide. The trend was not his friend.
I am not much of a trader but because of the book I am really tempted to put a bunch of $ short (via ETFs) just on the principle of it being a bear market.
Don’t do it yet. Wait for 1433 S&P (200 dma) and see what’s what then. Don’t forget, we’re on a Dow Theory buy signal from several weeks ago. I’m half way in on the short side but my puts are long dated because I know what is happening can easily extend. Think May - August 2000 for a parallel.
Thanks tx. I guess that means I’m free from that pit of fear in my stomach for just a little longer.
They’re going to attack the 200 dma at the open. It’s only 8 points away right now in the premarket.
“I’m free from that pit of fear in my stomach for just a little longer.”
I’ve got that part covered for you, lol.
Futures at 1426…….
TX - see our posts crossed in cyberspace. I have a business meeting at the open but would love to be able to see the first 10-15 minutes of trading this morning. Also waiting to see what happens the last hour today and where we are at and if it fades or not.
I’m playing SKF gap down for a flip and will stop myself out in a heartbeat if I’m wrong. But otherwise, I’m afraid this rally is going to go way past what people thought could happen. It will be a great shorting/put buying opportunity at some point, just not today. IMO
Didn’t you go long SKF on Wednesday? I hope you got out of that one.
NOTE TO ALL: Do NOT hold ultra-short ETF’s like SKF or SRS long term. Use them for trading only — and you better know what you are doing. Because of the mathematical effects of compounding at 2x short (plus the dividend payouts on the long side), these ETF’s trend toward zero even if the market stays flat over a period of months. I learned a hard lesson by buying SRS in January and holding it until mid-April.
Another tip for those looking to trade SKF and SRS using technical analysis: don’t use the SKF or SRS charts! Instead use the charts of their underlying long indexes: XLF and IYR, respectively. The reason is because of the mathematical decay that I described in my previous post. The chart patterns in SRS and SKF are deceptive. Best bet: if you see a trading opportunity in XLF or IYR, used SKF or SRS to get more punch out of your trade.
Yes, and as I always do, when I’m up $2, I put my stop there and was, as a result, stopped out yesterday at 99 and change having given back $2 of the gain.
The 2:1 ETFs are great if they go in ones favor, however in a ‘whipsaw market - the direction can be right but your ETF can lose because the ratio is 4:1 against you, 2:1 in your favor.
RE: Leveraged ETF trading at 100, underlying index trading at 1000.
Index goes down 10% to 900, ETF goes down 20% to 80
the next day the Index rises 10% 990, ETF rises 20% to 96. Index is down 1%, ETF is down 4%..
SKF is making lower highs and lower lows since it broke 100. It reminds me of BIDU once it broke 300 on the way down to 200.
I can see that now.
EXPELLED!
http://www.ibdeditorials.com/IBDArticles.aspx?id=294534578602796
Climate Change: Colorado State University says it’ll no longer promote the work of Dr. William Gray. Is it really a cost-cutting move or are CSU and eco-fascists trying to silence the godfather of hurricane forecasting?
Gray says fluctuations in hurricane intensity and frequency, exhibit A in Gore’s inquisition, have nothing to do with carbon dioxide levels or human activity, but with natural variations in ocean currents. He points out that 101 hurricanes occurred from 1900 to 1949, in a period of cooler global temperatures, compared with 83 from 1957 to 2006, when the earth warmed.
It bothers me that my fellow scientists are not speaking out against something they know is wrong,” Gray once said. “But they also know that they’d never get any grants if they spoke out.”
The grant funding system has a natural tendency to undermine the purpose of objective scientific inquiry.
As a science geek myself, I can assure you this point is valid. The amount of group think is astounding. Everybody wants to be on the “winning” team. A great book on the subject is “The Trouble with Physics”. I’m not a physicist but what he says rings true in many field
Winning team = the team whose grants get funded.
As opposed to funding from Exxon, the real estate industry, the junk food industry, the tobacco industry, the drug industry, etc., etc. ?
The problem isn’t so much about funding quality scientific efforts. The grant system mostly does. The problem, sometimes, is the discontinuous nature of the funding. One area of interest gets funding, then another. This can cause funding difficulties for one working in a particular area of study as funds are shifted from one area to another.
There is ample reason not to trust industry funded “research”.
kckid,
Link didn’t work. I know the environmental brethren won’t want to hear it, but sometimes the truth hurts. They’re all for free speech as long as you agree with them.
http://www.expelledthemovie.com/
EXCELLENT Movie. Really learned something [for an old timer that is saying something]
It’s May 2nd, and I’m still wearing wool this morning.
More recently at the University of North Carolina, Gray told meteorology students, “The human impact on the atmosphere is simply too small to have a major impact on global temperatures.”
He might want to brush up on the science.
It bothers me that my fellow scientists are not speaking out against something they know is wrong,” Gray once said. “But they also know that they’d never get any grants if they spoke out.”
Could it be, instead, that they’re good scientists and good science doesn’t support the views of William Gray?
Could it be, instead, that they’re good scientists and good science doesn’t support the views of William Gray?
Maybe, but what is worrisome is how they shout down anyone who disagrees with them. To me that is the sign of politics, not science.
what is worrisome is how they shout down anyone who disagrees with them. To me that is the sign of politics, not science. also a sign of religion and group-think. Emotional agitation of any kind usually means useful thought processes have been ruled out as unacceptable.
Hey, whatever to “Cold Fusion” ? I thought that was right up there with the … “Intelligent Design Theory of Creation”
“Could it be, instead, that they’re good scientists and good science doesn’t support the views of William Gray?”
I doubt it. I’m an atmospheric scientist and my personal opinion is that the construct of “global warming” has been seriously taken out of context. Many of my former professors didn’t really believe the human impact was so overwhelming, and looked at the recent period as being an aberration; after all, many of the professors now wildly proclaiming gloom & doom today were subscribing to the “global cooling” and “ice age” prognosis in the 1970s and early 1980s. To say that grant money factors into this political arena is a significant understatement.
“He might want to brush up on the science.”
Actually, it is you might want to brush up on your science.
Most, if not all, of the science supporting the idea of human activity causing global warming does so by *correlating* human activity with global temperatures. Please note that correlation is *not* causation. There is a huge difference between the two and many scientists will fall back on a correlation in order to support a hypothesis that they wish to support. However, with appropriate math, dependence can be proven without running a complete, controlled experiment - it is just that the math is rather difficult.
One of the shortfalls of using correlations is that problems / issues / biases may not be apparent [or conveniently overlooked]. For example, while it does appear that global warming is indeed related to CO2 levels [our "measure" of human activity] through a correlation, let us look at the bigger picture of time [history]:
During the Mesozoic era [from ~65 million to ~260 million years ago], CO2 levels ranged from ~1,000 to 2,000 ppm. Compare this to today’s level of ~370ppm.
If the earth, in the absence of humans, can raise CO2 levels to such high levels, how can we be sure that the current rise in CO2 levels is actually due to humans? We can’t. At least, not yet. I am still waiting for convincing proof, not correlations.
The Mesozoic era CO2 data is taken from Nature, Vol 411, pp 287 - 290 (17 May 2001).
Disclosure: I am a scientist who believes that the earth is indeed getting warmer, but that the contributions of human activity to global warming have yet to be *proven*. In any event, I am a firm believer in conservation.
Care to comment on sea levels durring the Mesozoic?
Brian, from one scientist to another, I couldn’t have said it better (and didn’t!).
To: brian in norfolk
You state a clear and competent position. Kudos!
Empiric evidence and Scientific Method rules! (Microbiologist)
First, Hurricanes are not “exhibit A’ for Global Climate Change. 9 of the hottest ten years on record in the last decade is “exhibit A’. An ice free North Pole is probably “B”. The amount od hurricanes are always widely variable due to many factors. The increased intensity of hurricanes fit the GCC model. The number of class 5 hurricanes has grown.
I’m sorry, 99% of Climate Scientist say GCC is very real.
What do you want to debate next, evolution? The Shroud of Turin?
I’m sorry, 99% of Climate Scientist say GCC is very real.
There was also a time when 99% thought the earth was flat.
Consensus is not science.
Yes, as a matter of fact it is. It is a consensus based on published, peer reviewed papers. It is a consensus based on experiment and observation. To compare today’s scientific Knowledge to flat earth belief in the middle ages is an absurd argument. Science today reaches a determination through the scientific method.
I would like to someone to show me in the modern scientific era (not the pre-science times of centuries ago) when 99% of a scientific discipline agreed on something, and were wrong.
Your 99% is way off. You are listening only to the ones who tell you what supports your position. It is apparent from the comments on this blog (from thos who identify themselves as scientists) that 99% of blogging scientists don’t agree.
The Gore-ites keep unequivocally linking
1) “there is a global climate change going on”
with
2) “this change is man made”
I agree with (1) but not with (2).
This position does not conflict with having a legitimate (but reasonable) concern with the environment.
would like to someone to show me in the modern scientific era (not the pre-science times of centuries ago) when 99% of a scientific discipline agreed on something, and were wrong.
Plate tectonics. It was considered a lunatic fringe theory before the 1950’s.
No, just an unsupported theory. There was no good evidence until the 1950s. Then when the evidence was presented, the scientific community accepted it. This very much parallels GCC. As the evidence comes in the scientific consensus forms around it.
Thank you for proving my point.
Well well well. Just got hit on a little piece of SKF at 90.50. Man, they are putting the hurt on that sucker.
I did a stupid thing and bought back in yesterday at 93 after selling my previous position the day before at 101.
Can’t win ‘em all, I guess.
The gap will fill. Maybe today. You should be okay.
Unem -20K vs. -75 cons
rate 5.0 vs. 5.2 cons
it’s all good! people are losing jobs, just not as many as WS was expecting!
Party on
Income up a paltry .1%, surprised retail rallied yesterday, they must be expecting a wave of rebate spending.
You guys have now seen my greatest weakness live and in color. I have thought all through March and April that a nasty rally was coming and now it’s here. Got some smart ass comments from the peanut gallery but you could tell it was coming. And I bought the frigging bottom and am already out. I can’t hold a long position all the way. It’s a sickness. I guess you could call it permabearitis.
I was wondering about how you reconciled your short-term bullishness with your long-term bearishness. Must be a mental tug-of-war. I’m surprised that you sold already, considering that the breakout just started.
see my comments above. There are some cycles in play the first week of May which could turn things down. Right now, I wouldn’t bet on it.
That distinction used to be what separated an “investor” from a “trader” back in the good old days when you could just buy an index fund and ride it out. What TX does is hard to do and should not be attempted without a net and some antacid. I only do it with relatively small amounts of money. I have taken my lumps. I posted a week or 2 ago about my IXG gamble, a financial ETF. I got 1/2 out this morning at a 10% gain since Jan and left half out there. I think financials will go higher, but don’t have the gumption to try to time it. If it goes to a 20% gain or back down to my purchase price, I am out of the rest of it. I only got in as I came to think that the Feds thought the big banks were too big to fail and would step in if it got really bad.
An incredible call that I caught pretty well. :>)
In 1930 IBM was in the DJIA, they pulled IBM out of the Dow because it kept going up and did not reflect the economic conditions of the time. If IBM had stayed in the Dow, the index would be over 30,000 today. There are always stocks that go up in bad markets.
Today has already been an incredible day! Check out the Bovespa.
The WSJ overrates the importance of white noise on a daily basis. Watch the trend and ignore the noise if you want to read the handwriting on the wall.
Economy Shed Jobs in April
Nonfarm payrolls declined 20,000 in April, a fourth-straight drop, but at a much slower pace than previous months, suggesting the economy may be starting to find its footing. The unemployment rate fell to 5%.
It’s different this time…
Job Cuts May Not Get Too Deep
By Mark Gongloff
Word Count: 486
People can’t lose jobs that they never had.
The permanently unemployed disappear from the jobless numbers.
The systems does not counter underemployment: going from a $40,000 a year manufacuturing job to a $20,000 a year burger-flipping job does not mean the system is stable.
And then there are all the unemployed illegals who are heading home, who also don’t count.
I call BS on these numbers - they don’t reflect reality.
Don’t laugh at me too much. Does anyone think that Thornburg Mortgage will pull through (or that Thornburg investment will drag it through)? I am very curious since I think the survival will probably have some impact on Santa Fe (one of the larger employers outside the tourist biz).
I’d love to see some real bloodshed in that Santa Fe market. There are so many killer properties there but the owners tend to be wealthier and not so likely to be forced to sell.
If enough hedge funds blow up, forcing wealthy people elsewhere to liquidate their gorgeous 3rd and 4th houses east and north of the Plaza, you might get your wish.
Since the Santa Fe airport no longer has a commercial carrier I have been wondering how all the formerly super-wealthy - but now only wealthy - people who can no longer afford a personal jet get to Santa Fe. Do they fly into ABQ and drive 60 miles?
It’s a nice drive. Home, Jeeves.
Do they fly into ABQ and drive 60 miles? Pretty soon the poor people living south of Santa Fe will be able to take a train into the City Different. It’s different there.
Just from what I’ve read they’ve pulled something out of their butts twice now to stay alive. They seem very enterprising, but one would think the odds are against them.
surplus food is gone:
U.S. government food surpluses have evaporated because, with record high prices, farmers are selling their crops on the open market, not handing them over to the government through traditional price-support programs that make up for deficiencies in market price.
http://www.usatoday.com/money/industries/food/2008-05-01-usda-food-supply_N.htm
Don’t worry — we have the capacity to grow lots more food in this country. The places this surplus goes will learn in retrospect that they caught falling knives after the supply response kicks in (sorta like folks who bought houses at the peak in 2005…).
“Don’t worry — we have the capacity to grow lots more food in this country.”
I’m not so sure. I have read that 10 calories of fossil fuel energy go into each calorie of food energy that we consume, via fertilizer, pesticides, combines, delivery trucks, etc.
I think from here on out we will have more trouble turning oil into food, as we have for the past 50 years.
The average American is 100% dependent on the industrialized system of agriculture and has no clue about where his/her food comes from. This is the key advantage that residents of former Soviet Union had when their economy collapsed. Most Russian families were already partly dependent on gardening because the store supplies were so unreliable and limited.
In any event, I am hedging my bets and storing food, gardening, etc., in anticipation of even higher food prices in the future.
That level of energy consumption isn’t true. Otherwise at $70/bbl we never would have seen food prices at the level we’ve seen before.
There is a huge amount of fallow farmland in the US. Might we have to prioritize natural gas supplies? No. The market will take care of it.
Will food prices go up short term (say two years)? Yes.
But we’ll still be the fattest people on the planet.
Think about this for a minute, food prices still aren’t high enough to persuade farmers to buy more farmland. We’re also a net exporting country.
We should calibrate the fact that food has finally become an open market crop!
And food is a negligible portion of the US household budget. The rise in food prices wouldn’t really matter if it wasn’t for the mortgage debt everyone took on. (and credit card… and car loan… and HDTV loan… and…).
Ethanol kept the Chinese from having us over a political barrel. Now if they threaten anything funny with trade, we can cut off something they care about. Now long term we need to go a a sustainable grown energy (sawgrass ethanol, or sawgrass converted into a food oil by yeast as one company is trying to perfect).
We’ll continue growing in some areas.
Got Popcorn?
Neil
I don’t doubt that we can grow more food. However, the cost inputs (fuel, fertilizer, etc.) are rising so increased supply may not mean decreased prices. Also, as the article points out, food markets are now sustained at much higher price levels and food is a global market. I think we will have to pay higher prices to buy food that will otherwise leave the country.
Um, you’ve been reading typical Peak Oiler factually-challenged tripe.
Fertilizer is not made of oil, but of natural gas. And there are plenty of other ways to make fertilizer. All you need to make nitrogen fertilizer is air, water and energy (hydroelectric, solar, wind, wave, geothermal, nuclear etc. would do it). Whether it is excreted from the rear end of a cow or manufactured from ammonia as a waste byproduct of coke production from coal, it does the same thing.
Think for a minute - what is the chemical composition of oil? hydrogen and carbon. Not nitrogen, potassium or phosphorus.
N from air but you still need P and K
see POT
And there are plenty of other ways to make fertilizer. What do those ways cost in comparison to producing fertilizer from natural gas? And do those ways scale up to the current level of fertilizer use?
death by ethanol
and other lefty schemes gone bad
My elderly Aunt Mary made a mean toasted cheese sandwich using that surplus 5 pound block of cheddar that she received at the community center once a month. She asked me why they stopped giving it out in the late 80’s; I didnt have the heart to tell her that the boyz from NYC and DC lent Mexico billions to clean out the warehouses for a big fiesta to celebrate their bailout. You can check it out, but, I recall the Mexicans being amazed that they were allowed do this at, I believe, no or low interest and repayment delayed into infinity.
Is it possible for someone who buys up second mortgages to sue a bank for non-payment + interest? A relative in Utah has been following a particular house through the bust didn’t get it at auction since the bank “bought” it, then the bank did not respond to an offer from her. Now, according to a friend of hers who looked into it, apparently a developer out there bought a dozen seconds and is pressuring the banks to bring the seconds current or to sell him the firsts (at a significant discount). If this is even possible it seems like a clever way to use the banks’ foot-dragging to his advantage.
My understanding is that in Utah seconds are recourse loans and the firsts are typically non-judicial foreclosure though the lender can pursue a deficiency judgement.
Was that a “courthouse steps” foreclosure auction or one organized as a sort of “short sale?” IANAL, but if it was a foreclosure auction I don’t think that they have any cause against the bank. The banks usually bid what they are owed at foreclosure auctions. As the first, they get that money back. That’s WHY they bid that amount. In a normal market, they can prepare the house for sale and get a higher price, even paying a realtor than is likely to be bid by another buyer for cash at the courthouse steps. If anybody had bought it at auction for any more than was owed the first, the difference would have gone to the second, the HELOC, provider etc until the owner got a cut. If the owner of the second (or anyone else) thought that the house was worth more than was owed the first, they were free to make a larger bid.
The “recourseness” of the loan means that the second can go after other assets of the borrower, not that they have some sort of right to sue the first for some of THEIR 80%. The proceeds go towards paying off the leinholders IN ORDER. Of course the borrower probably has few assets worth seizing. Unlike first mortgages, seconds go to zero recovery rates pretty quickly.
Speaking off the cuff here, the developer is in no position to pressure the banks into anything. Seconds aren’t in charge…the first is.
If the banks are desperate enough, it’s conceivable they could sell the first at enough discount to make it worthwhile to the developer. However, if the banks go ahead and foreclose, chances are the developer is screwed. His seconds could be wiped out. The banks foot dragging doesn’t help him, it hurts him IMHO.
Just my .02.
That was my take on it too. The bank should be telling the developer to go pound salt. In IL (to pick an example) the second leinholders have to bid at the court ordered auction to have much hope of reclaiming any money. If there is no equity whatsoever in the house, they don’t even bother to show up, since they can be certain they’ve already lost their claim.
The developer HAS to know the rules of the state (i.e. his second lein is toast). He likely realizes at this point that chasing the original owner for a deficiency judgement is a waste of time. My guess is he is making a pest of himself in hopes of getting some crumbs out of the deal.
Well seconds have some leverage in short sales and REFIs. They don’t have to approve short sales, and can use that fact to extort SOMETHING from the firsts. Effectively, a homeowner can’t refinance their first unless the second agrees to subordinate their lien to the NEW 80% loan.
True, if you’re talking just a refi. And we’ve seen links here to articles where the 2nd is demanding to be paid in full rather than be subordinated again to a new 1st.
But if you’re talking an actual sale, and a short sale to boot, the first can, and often does, say they won’t accept the short sale unless the 2nd gets nothing. And if the 2nd doesn’t agree to that, the first can just say no to the short sale and foreclose, and tells the 2nd to go pound sand. So the 2nd gets nothing anyways. That’s one reason why a lot of the 2nd lien/HELOC paper isn’t worth much these days.
Asia fed up:
May 2 (Bloomberg) — Chalongphob Sussangkarn knows a thing or two about volatile currency markets.
“I should just get rid of these dollars before they fall even more,” joked the president of the Thailand Development Research Institute, as we exchanged U.S. currency for euros.
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_pesek&sid=acrUvNUAIYX4
I really don’t feel sorry for the Asian economies having to deal with the cheap Dollar. After all they’ve gone to great lengths over the years to artificially depress their currrencies. That’s contributed in part to our huge trade imbalances (the other part is out of control spending by Americans). They can just take their medicine and like it IMO.
Hey JWhite,
Can you rec a book on currency? I don’t want to trade anything, but I would like to understand it better. Every time I think I have some sort of understanding, I find myself still confused. Thank you.
Can’t think of any easy read books off the top of my head - here’s some basic info from a recognized source.
http://www.cfr.org/publication/14781/setser.html
Serial bottom callers back at it again…
Bank of England calls the bottom
Is the financial sector now so dependent on the central banks that it needs to be told when assets are cheap? - 21:05
I hope they are better at predicting when it will end as they did a lousy job at foreseeing the start of it.
I can guarantee you the serial bottom callers will eventually be right, except I have no idea about how many times they will first be wrong.
Are these accounting rule changes likely to be adopted? If so, will they have any teeth?
FASB Signals Stricter Rules
Possible accounting rule changes spurred by the subprime-mortgage crisis would make it harder and costlier for banks to package and sell off loans. That could make borrowing more expensive for consumers and companies.
Why sell them off, when the Federal Reserve will give you 100% if rated AAA? nlol
Is that incredible or what. Shows you there’s bigger problems in the banking system than are being acknowledged.
Young lady,
I still believe over 2,000 banks will fail before the end of the year. Math is pure, opinions change with the tide. There are real problems that are not showing yet. MBS are just a small part of the problem.
Aside: There is one excellent financial firm that is hiring in the US, PIMCO. Newport Beach
I interviewed with Gibson Dunn & Crutcher in Newport Beach back in the 1980s. I couldn’t afford it there then and sure could not now
rentals are cheap and housing prices will be coming down. The hours aren’t great the 6am to noon really bites. Who wants to spend all afternoon in the sun?
me
Hoz, why did you buy countrywide? I was expecting to hear something back from you after analyzing the financial statements in one of the bits buckets the other day. You said you expected a profit, what happened that you didn’t expect?
I recall a while back when the FHA rules changed you thought mortgage makers would profit and Txchick alluded in that thread the other day that you expected a profit b/c of those rule changes. When we were talking about the effects of the FHA rule changes, I didn’t think you would be including institutions that had gone so far down the yellow brick road as Countrywide but maybe more conservative regional banks and such.
American financial ingenuity: Kick out the poor bastards… remodel the “units”… and the get the state to rent them back to “The People”
I think Crissy Cox has his out of state friends stay here:
http://www.crystalcovebeachcottages.org/
Bluprint and any that might have ab interest,
The bill expanding loan limits had a Countrywide Clause in it. The clause allowed Freddie and Fannie to buy loans RETROACTIVE to July 1, 2007. According to CFCs docs a majority of their held mortgages were eligible for this retroactive sale. If CFC had sold their loans last quarter, the profit would have been very large. The question is, how much influence did Bank of America have in CFC’s actions? It appears to be A) Either ‘dark matter’ in CFC’s books or B) BAC causing CFC to sandbag the sales - hold the sales to a later date.
Thanks.
I earn money the old fashioned way
I steal it.
HSBC thwarts attempted £70.5m fraud
By Peter Thal Larsen
Published: May 1 2008 19:55 | Last updated: May 1 2008 19:55
City of London police said they have charged Jagmeet Channa, a 25-year old from Ilford in Essex, with conspiracy to defraud, money laundering and abusing a position of trust.
According to people familiar with the matter, HSBC discovered last week that an employee transferred about £70.5m from an account used by HSBC’s Corporate Trust division, which handles large cash transactions on behalf of clients. …”
FT
And HSBC was going to be the first major bank to buy. lol
I just saw some schlub unload 60K SKF under 90. That’s gotta hurt.
yesterday JDSU took the plunge and today its JAVA.
Im getting interested again. NVDA having a nice run from 17 to 22.
I don’t believe in the tech renaissance that’s being sold to us. Yet.
Comp and trans leading the way south.
Here’s the majic 2 bucks. So, stop’s at 92.50
Ouch.
It is amusing to me that I can buy ETFs that cover the
DJIA, DJT, S&P500, FTSE, DAX, CAC40, about 15 other Euro countries, Japan’s Nissei, Shanghai 50 etc.
There is no decent ETF that covers Brazil which is the 3rd largest exchange in the world. Amazing how ‘Northern hemisphere’ our thinking has stayed in this rapidly changing world.
this exact topic came up on my conference call last night with the boyos..
Did you get to play snooker? I was swamped by the weekend warriors (4-wheel trails opened on the 1st) - crappy snooker players. The topic of conversation from locals was how to pay for gas for the fishing boats this summer. My friend Lars was talking about getting a siphon. T’aint funny up here.
my preference for parlor games is limited to backgammon and gin, and with mixed couples, Mrs Voz and I make a helluva spades team.
last nights foray with the boyos, did not glean much insight other than J6P is still getting tortured, and the spring hunting is upon us with much talk of bear and elk.
I also placed locking gascaps on all company trucks this week.
I also placed locking gascaps on all company trucks this week. Locking gascaps are pretty easy to remove with prybars & Channellocks. Now the crooks are using battery-powered drills to go directly into the gas tanks & battery-powered reciprocating saws to chop out catalytic converters. Next thing to add is armor plating.
Im just tryin to discourage the small time chump who runs out of petrol on the northbound 5 and wants to “tap” my stored gas/diesel capital.
Had to go to Moab, UT, yest. Talked to a friend who has long-time family ties to the construction industry there. He says he’s never seen it so dead. He was visibly worried. He said, “We saw it coming, we thought we had time to prepare, but we never guessed it would hit this hard this fast. Moab is usually a little behind the rest of the world.” I have observed that, also
Visible fear there also from the used-house people. Slow as it’s been for 10 years, one told me a week ago. But why do the prices just sit, houses at 75 to 100% of what they should be? Did seem to be lots of tourists in town, though maybe not quite as bad as I’v seen it.
“Did seem to be lots of tourists in town…”
European? Asian? or Canadians looking for “Winter” investment bargains.
Do the River Rafting companies take Euro’s?
They all looked like MTBers from SLC or Boulder. Young, outdoorsey, and very visible. Too darn cold to be rafting yet, didn’t see one boater, though I know the hard core are out there.
Don’t go on Spring break without your college campus Visa!
What’s the price of petrol in Moab, in quarts!
You know, I didn’t even notice, but here 60 miles away it’s now 3.70 for midgrade.
Why ask when you can look it up? Utah Gas Prices
That’s the state of the construction biz here. We have 2-3 large builders (surprising for the size and poverty of the area) and a host of small indies. I sit in the pub over the river and listen to these guys grouse about no business.
They overbuilt 250-300k homes here that almost no one couyld afford accept through creative financing. Now, there’s almost no home building going on and a glut of big houses for sale (like our rental). The only real building in town is government - they’re building subsidized housing to attract section 8 types and bring in more federal dollars.
that building is being done by an out of state company who bring in their own workers - very fishy, no-one really knows who originated the loans for this. They’re supposed to be public housing for 15 years then be re-habbed and sold as low income housing. They’ll never last 5.
My landlady (the builder) is getting desperate to sell and is using my Wife’s nice decorating as free staging in her ads. I don’t think we’ll move anytime soon though, one look around turns up the same multiple deficiencies that would keep us from buying without a massive (very) reduction in the price (which has a 25% markup) -$250,000
Sorry for all the typos - trying to eat breakfast and type before my Parent/Teacher’s conference.
I sit in the pub over the river and listen to these guys grouse about no business.
I just love how it wasn’t painfully obvious to these guys that no one would be able to afford the houses that they built, and that they were the only “industry” in town. You would think that an average chimpanzee could see the problem with building 300K houses in communities with nothing but $10/hr jobs, but I guess that even chimps are blinded by greed.
Its what I call the “everyone is doing it” syndrome. People see others making a quick short term buck and instead of seeing if there are any the mid or long term negatives they just jump on the bandwagon.
A family member tried to get me into flipping houses, because “everyone was doing it”. When I refused she got upset. When I told her that since “everyone is doing it” that was a very good reason not only to not get in, but to get out, she got even angrier. She ended up losing about 30K. She has been very quiet since she sold her “gold mine” at a loss (this was in Arlington TX). The loss might not have been so bad, except that her renters trashed the place. All the carpeting had to be replaced, drywall needed repair, it needed to be repainted, kitchen cabinets needed repair, etc.
$10.00 an hour! They WISH! Unless you’re connected and can a job at the paper mill (about 8% of the workforce) $8.00 and hour is a wishing salary for most since the lack of HS degrees and even GEDs is endemic here. I know of one high school cheerleader who can’t pass the state exit exam and will have to get a GED (maybe). She’s incredibly miffed and can’t understand WHY she needs to grad to become a PHARMACIST! My Dad is so and so, WHY can’t he just take care of it?… It’s that much of an unconnected dreamland around here. $6.50 - $7.50 an hour for almost any job that’s not either dynastic, hereditary, or genuinely skilled.
All those high priced Cowboys are coming to town to save them!
More like low priced section 8 types about to be overwelmed by the growing flood of illegals who have discovered the plethora of jobs the current bottom of the barrel types won’t touch. To them, $7.50 an hour to cut catfish, dip corn dogs, or work in the day labor crew market is a great wage - since housing is often included in these deals.
Refugees who snuck across the border from the anti-illegal city of Irving, TX ?
Sounds like she rented to some friends of mine. They destroy every place they rent, yet have no problem finding people to rent to them. Boggles my mind.
Did anyone see this new spin by Mr. Yun? Now he’s trying to explain that the drop in housing prices is not as bad as the NAR’s own stats show.
Here’s a highlight:
The NAR reported last week that U.S median home prices fell 7.7% in March from a year ago. The decline resulted largely from a market anomaly — a steep decline in costlier home sales due to tighter lending standards and high jumbo-mortgage rates, coupled with a foreclosure-driven spike in cheaper homes.
“If there are a lot more homes sold on the low end and fewer on the high end, the median price is bound to drop dramatically,” NAR Chief Economist Lawrence Yun said. “In normal times, a median price would reflect typical homeowner equity changes, but these are not normal times. The jumbo (mortgage) market is frozen and the buying activity is more concentrated in lower-value homes.”
http://www.marketwatch.com/news/story/market-anomalies-skew-home-price-data/story.aspx?guid=%7BB242EC7A%2D7A08%2D49E4%2D8CB7%2DF0808F8EF52D%7D
a steep decline in costlier home sales due to tighter lending standards and high jumbo-mortgage rates, coupled with a foreclosure-driven spike in cheaper homes
Actually he’s right. But the flip side of this was that median prices actually fell more slowly than the actual decline early in the bust, because the lower priced houses had stopped selling. But of course NAR ignored that.
“median prices actually fell more slowly than the actual decline early in the bust, because the lower priced houses had stopped selling. But of course NAR ignored that.”
Partly correct. Early on (late 06-07), NAR trumpeted the fact that the median only slightly declined and was up in a couple of MoM calculations. At the same time, sales were falling apart MoM and YoY but they didn’t put that fact out front. With sales and prices falling now, they offer nothing but lofty platitudes.
Where was the NAR on the bias in home price indexes when bubble prices went parabolic back in 2005? The indexes work great unless prices are falling.
If I were a seller’s realtor, I would want Yun screaming that housing prices are too high.
If I, personally, tell the homeowner to lower their price, they might dump me for another realtor. But if L Yun, economist, tells everyone, it makes my job easier. He’s a tool to help me sell.
Some people might pull their homes off the market to wait it out. Great! there’s too much inventory as it is.
Re: bailouts:
How many “unaffordable” mortgages from 2003-2007 were made without a teaser rate, or at interest over 6%? ~
Mine - 6.25%. If we can ‘back port’ the true cost of insurance and taxes that would have made our mortgage payment effectively double, we can quite easily hit “unaffordable at origination”. We didn’t escrow taxes and insurance, but I wonder if we show that adding that on would have doubled our mortgage payment, therefore popping us over 28%?
But … then I can’t see the point of taking a gov’t principle reduction loan.
Yes, our loan was technically unaffordable. But we had alternatives for living negative cashflow for a while and now earn more. We took a slight gamble for a few years, living off of our savings while we propelled ourselves up the employment ladder, but it’s all come together as to make it not unaffordable.
May 1 (Bloomberg) — Standard & Poor’s will stop rating new bonds composed of U.S. second mortgages, saying it’s too hard to assess the debt while the housing slump continues.
The recent deterioration of the loans has been “unprecedented” and the “market segment does not allow for a meaningful analysis,” New York-based S&P said in a statement.
http://www.bloomberg.com/apps/news?pid=20601009&sid=akDC.s1rvSsU&refer=bond
Good. Then we can get back to Level 3 Accounting and assume they are all rated AAA.
I tell yah, this game of running a big bank is easy! What is something worth? Whatever you want it to be!
Txchic,
When you get to Warren’s disposable income level and no longer wish to rent:
http://finance.yahoo.com/real-estate/article/104984/Inside-the-World’s-First-Billion-Dollar-Home
I actually posted that place last summer. The Indians really know how to do over the top so well . . .
Does Pakistan have jumbo jets that fly East towards Korea?
Harley getting burned by loan crash
Slowdown results in more delinquent motorcycle loans
About 29 percent of Harley-Davidson’s outstanding loans were to subprime, or lower-rated, credit customers at the end of 2007, according to the company.
“We have always believed it is important to make retail motorcycle loans across all credit tiers and to actively manage our exposure to credit risk,” Bergmann said.
http://milwaukee.bizjournals.com/milwaukee/stories/2008/05/05/story1.html?b=1209960000%5E1629989
They are making an aerodynamic Hardley’s you can ride at 100 mph and your Kuwait head scarf will still stay on.
“We have always believed it is important to make retail motorcycle loans across all credit tiers and to actively manage our exposure to credit risk,” Bergmann said.”
Translation?? We’ll sell to almost anybody. That doesn’t seem like a very good business plan.
Silly me…I thought that the “core problem” was that all the $175,000 homes weren’t really worth $485,000 Dollars…
“Finding a Solution”
“…The Bush administration and Congress are trying to find a solution, but none of the proposals swirling around Washington have identified the source of the problem. The core problem is the way the mortgage industry manages default risk.”
http://finance.yahoo.com/expert/article/mortgage/79797
The Fed Reserve is busy again, new rules…
The Federal Reserve announced today an increase in the amounts auctioned to eligible depository institutions under its biweekly Term Auction Facility (TAF) from $50 billion to $75 billion, beginning with the auction on May 5. …
… the Federal Open Market Committee has authorized further increases in its existing temporary reciprocal currency arrangements with the European Central Bank (ECB) and the Swiss National Bank (SNB). These arrangements will now provide dollars in amounts of up to $50 billion and $12 billion to the ECB and the SNB, respectively, representing increases of $20 billion and $6 billion….
In addition, the Federal Open Market Committee authorized an expansion of the collateral that can be pledged in the Federal Reserve’s Schedule 2 Term Securities Lending Facility (TSLF) auctions. Primary dealers may now pledge AAA/Aaa-rated asset-backed securities …
From Marketwatch, more details:
“NEW YORK (MarketWatch) — The Federal Reserve, along with other central banks, said Friday that it was increasing the funding it is providing to banks and announced that, for the first time, it was willing to accept bonds backed by auto loans and credit cards.”
Looks like their choice is hyperinflation. Not sure how that will play out since they may or may not be able to pull it off - it all depends upon how long the Prison’s Dilemma of pretending the dollar has value (and that everything is “contained”) can continue.
But I *do* know that when the brown stuff hits the rotating air circulator, we’ll all be a lot poorer and the crooks will be much richer.
Anyone else watch ER last night?
Main story was a hostage situation. Guy that had robbed a jewelry store holds doctors hostage making them keep trying to save his dead wife.
And why did they rob a jewelry store? Bought an older house, poured their heart and soul into fixing it up, then house payments doubled and they were losing it to foreclosure.
Of course, The Closer did a housing bubble related murder like 9 months ago and Lawand Order did a foreclosure rescue episode more than 3 months ago, but this is just more evidence that it has reached a “pop culture awareness” stage. No more bubble denying now!
Well, Watcher will faint dead away but I bought gold here.
The minute oil starts to pullback, the bombs are a fallin’.
Check out a 10 day chart of unp, it’s about ready to break. I jumped waaay too soon, should get out with my skin intact.
“it’s about ready to break.”
Based on what, may I ask??
50 mma topped out, same thing happened the last time (apr 7 & 18 highs). It’s good for at least a 7 point break. 20 dma is around 137, should come close to it this time.
I bought yesterday at the 200DMA, and silver. Oil is rallying again and I don’t believe the USD rally will stick more than a few weeks.
The oil curve is starting to flatten out, deferreds are moving higher than the front month.
spx trading a mile a minute as it tries to go negative
that would be a blow no doubt
Sure.
Market Last Change %
Crude Oil 116.08 +3.56 +3.18
Rth and jbht broke below the 50 on a 10 day chart. Will it stick this time? I think so.
116.3 is a .618 retracement, i still think oil will pullback to at least 105.
I like 106 for the bottom of the pullback, a dollar over my stop would be perfect.
109 in CAD. could be as much as 230 a barrel CAD if they cant stop either.
How many units does this place have? And what does “multi-use” mean? Ugly?
http://austin.craigslist.org/rfs/663791918.html
It means both residential tenants and commercial tenants. I had apartments in Houston with mixed residents and a small computer company. People in the bldg day and night. Less use of plumbing (showers) in the business.
A little OT, but I thought I’d share this:
Over the weekend DH and I had a pizza delivered from a small independent place near our house (for the second time in as many months). Yesterday in the mail we got a thank you note from the pizza shop. It blew my tiny mind. Business must be REALLY slow.
They spent money for postage which they could have used to reduce the price of the pizza…must have got started with a SBA loan.
unless the thank you note also had a coupon for another pizza. then its customized appreciation with a constant visible prompt for another purchase.
I did that sort of thing often when I owned my video arcade: used to go up to the regulars & open the coin slot, then add some free credits on the game. easy to do, just tap the wire on bottom ofthe coin mech a fewtimes. the players were always stunned!(and happy as hell)
No one EVER gave em free games unless they complained of a game glitch .. . . needless to say, my place was often the only one busy in the mall back in the recessionary early 90’s.
In the same vein, yesterday I stopped at a Starbucks snap in the middle of LA’s Westside. It’s usually full because it has a decent parking lot behind it with meters, and that lot also serves other small businesses around Starbucks (on Pico Blvd.) There were two other cars parked in the lot at 3:30 pm. I thought some of it might be due to the May Day demostrations, but even so, it was just deserted. Bad times for those shops….
I have experienced the exact opposite in Atlanta - Buckhead/Midtown areas. Every place I frequent is as busy as always. This week a friend and I went to lunch at a Thai restaurant. We spent 10 mins circling the parking lot to find a spot.
Since the water ban here in Georgia, washing the car by hand is verboten in most counties/cities. Godsend for the car wash business which is exempt from the ban. Yet you’d think with this catastrophe of an economy everyone’s sure has arrived, people wouldn’t spend $20-50 for a car wash. Wrong. On a sunny Saturday, the wait is an hour plus. Either people really hate to drive dirty cars or perhaps, just perhaps things aren’t quite as bad as everyone makes it out to be.
Anyone here from Indiana?
http://www.youtube.com/watch?v=sN_nQOHj__s
George looked like he wanted to be somewhere else, lol. He’s a good man, too bad he was wrapped up with those idiots.
I don’t know which is worse…..that she’s still in the running even after stuff like this, Bosnia etc. or that Obama can’t finish her off even with all this “help.”
I’m a Democrat who can’t stand Obama, oh man of lots of words and nothing to back them up. I’m surprised he’s still in the race after all this Wrightgate stuff going on. He’s much more divisive than she is ultimately, and he’ll lose in November, leaving us with more Republicans. I wish he’d drop out.
Damn.
I lived in Indiana for many years … and have a certain affection for the state + the population.
I hope that clip gets some notice.
now they’re saying it’s doctored. Personally, I don’t believe that.
It appears that he really did say, “It doesn’t matter if we win, those people are sh!t.”
But the second, uh, even more colorful phrase is false, says the director who shot the footage for (the pretty good) documentary The War Room.
Linky
I just listened to the link, he clearly did say that.
“It doesn’t matter if we win, those people are sh!t.”
His voice and facial espression match exactly. Maybe Kantor can explain he just got back from being shot at in Bosnia and he was a little rattled.
The Sweetest Justice of All: A mortgage broker getting foreclosed upon after HELOC ATMing his house to beyond its assessed value and his job drying up due to the credit crunch. What a moron & loser!! ENJOY!!
http://www.readthehook.com/stories/2008/05/01/NEWS-foreclosure-C.aspx
I opened up the News Journal this morning and found a special section called “Tax Rebate Shopper’s Guide” advertising great ideas for spending $300, $600 or $1200.
Add that to the list of reasons I call it the News Urinal.
I heard a radio ad today that from Kroger saying it is giving a 10% bonus on $300, $600, $900 and $1200 gift cards. Funniest part about the ad was that the announcer had to tell listeners ‘which means you will get an extra $30, $60, $90 or $120 on your cards’. Gee thanks for doing that tough math for me.
SKF up for the day. Dumping half at +3 holding the other half.
Very nice! Very, very smart.
About 2 years ago Appollo Mangement, headed by Drexel, Burnham alumnus Leon Black, purchased Linens’n'Things for $1.3 billion. Appollo borrowed half of the purchase price. Today Appollo put Linens’n'Things into Chapter 11.
Central bankers can create as much cheap, short-term debt as they want, but such debt won’t cause an increase in the sale of goods and cannot offset loan losses.
they got paid up front, you know that.
legalized stealing. rich people from other rich people.
Read an article on Bloomberg a couple weeks ago when this story first came out. The whole deal was financed.$800 mil came from GE Financial and the other $500 Mil came from somewhere else.
Its the same fake economy we have had for a few years now. This financial house of cards will come down real soon……..
random observations from a week in Miami (south county)….overall, it looked much better than I expected. BUT (and this is a big caveat), I was in areas that have been exceptionally stable–parts of South Miami and the Gables. Didn’t drive around much in Pinecrest, so I don’t know what’s going on with some of those mansions. Saw a lot on the market in the Gables, not much for sale in my old South Miami neighborhood. (when I say stable, I mean stable–my oldest sister-in-law’s mother recently sold that house; she had been in it for 55 years).
Of course, who knows what the next 12 to 18 months will bring. And there are some overpriced properties on the market–and they’ve been just stitting there, naturally, thanks to greed and stupidity. (Bless their hearts.)