Bits Bucket And Craigslist Finds For May 30, 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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Name:Ben Jones
Location:Northern Arizona, United States
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For those subscribing to the RSS feed, you can now do so for both posts and comments. See the sidebar. Also, if you had subscribed previously, I believe you have to re-do it as we have a new plugin.
On the oft discussed subject of the government manipulating the stock market….
This was posted by MIDAS at lemetropolecafe.com:
The cost of soaring public and private debt levels
Commentary: Examining Kevin Phillips’ theories
By Peter Brimelow & Edwin S. Rubenstein
Last update: 12:01 a.m. EDT May 29, 2008
NEW YORK (MarketWatch) — Is Kevin Phillips right that something funny is going on in the economy? Yes, although just how funny is less clear.
The numbers do suggest he’s correct about one thing at least: public and private debt has indeed reached unprecedented levels.
Recently, we described Phillips’ thesis, in his new book “Bad Money: Reckless Finance, Failed Politics, and the Global Finance of American Capital” that the U.S. economy has been run by a Washington-Wall Street mercantilist alliance for the benefit of the finance sector. See column. …
Phillips also takes at face value colorful reports that the President’s Working Group on Financial Markets, a public sector-private sector consultation group formed after the 1987 Crash, amounts to a “Plunge Protection Team” that has orchestrated systematic grooming of markets.
The objective: getting the system to swallow more debt and produce a bubble in the interests of Wall Street….
The government trading through Goldman Sachs again?
I have had a “failed to load” error since the update. The comments RSS does work.
“I have had a “failed to load” error since the update”
Wives can say the cruelest things.
LMAO!
NYCB -
I see another one of your genius Vinnie Baggadonuts contractors dropped a crane on Manhattan.
This city is so corrupt.
Awesome news with the RSS comment addition, thanks Ben.
Sacramento Bee:
Home Front: Humbled home builders now facing reality
By Jim Wasserman - jwasserman@sacbee.com
Published 5:54 am PDT Friday, May 30, 2008
The new humility was on display Thursday during a Sacramento-area builder seminar by San Diego-based Sullivan Group Real Estate Advisors. In a spirit of straight talk with business people who spent $50 to hear it, president Tim Sullivan told the industry, “We’ve effectively stolen from the future. The demand we should be having now we stole in 2005 and 2006.”
He said: “We’re paying for the sins of our past right now.”
RE Commissions…. I know it’s be posted before, but it couldn’t happen to a more deserving group of A-Holes.
http://www.nytimes.com/2008/05/28/business/28realty.html?em&ex=1212206400&en=84ac07abfdaa2a90&ei=5087%0A
the Bush Bad admin tried to streamline refis before
the media missed that
US and European debt markets flash new warning signals
The debt markets in the US and Europe have begun to flash warning signals yet again, raising fears that the global credit crisis could be entering another turbulent phase.
The cost of insuring against default on the bonds of Lehman Brothers, Merrill Lynch and other big banks and brokerages has surged over the last two weeks, threatening to reach the stress levels seen before the Bear Stearns debacle. Spreads on inter-bank Libor and Euribor rates in Europe are back near record levels.
Credit default swaps (CDS) on Lehman debt have risen from around 130 in late April to 247, while Merrill debt has spiked to 196. Most analysts had thought the coast was clear for such broker dealers after the US Federal Reserve invoked an emergency clause in March to let them borrow directly from its lending window.
But there are now concerns that the Fed itself may be exhausting its $800bn (£399bn) stock of assets. It has swapped almost $300bn of 10-year Treasuries for questionable mortgage debt, and provided Term Auction Credit of $130bn.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/29/cndebt129.xml
“…the banks are beginning to face waves of defaults on credit cards, car loans, and now corporate loans. ‘We believe we’re entering Phase II. The liquidity crisis has eased a lttle, but the real credit losses are accelerating. The worst is yet to come’, he said”
And the Great Unwind rolls on and cash remains the king.
Is that cash is king a Prechter reference? Are you referring to banks and or people? Was wondering if that might be a personal investment choice? I just don’t want to miss the point. Thanks for bearing with me.
Cash represents liquidity, cash represents the freedom of choice that those without it don’t have.
Those with cash in a world where cash is hard to get and hard to hang onto call the shots. They are the ones who dictate prices to those in desperate need of the stuff.
Those with cash rule over those without cash, thus cash is king.
Now does that saying go?
A one eyed man in the land of the blind is king.
I’m still waiting for that day.(bottom of depression when $ will be worth something). I thought I could hang out in treasuries and wait. I just wasn’t prepared for all the stinking government intervention and how many years it is taking and will take. I don’t feel I’m dictating to anybody. I live inexpensively in Ca. but need Fl. for asset protection. Further complicating things is knife-catching, new homestead exemptions in Fl. and not feeling good about renting anybody’s anything. I won’t be buying for years there.I feel I’m being held hostage as opposed to ruling. Theoretically I agree with you, but my body says differently . Thanks for letting me vent. I hope you married HBB’ers appreciate your being able to go through this with your spouses. Please excuse my grammar as I was raised in America. Nothing worse than being in a debtor nation. p.s. Hate the U.S..
No kidding. I totally sympathize with everything you say.
“Please excuse my grammar as I was raised in America.”
LOL! Yeah, I woke up feeling like that today, too. Just tired of it all - maybe it’s because I got a call from a friend late last night who is losing their house and asking for my help - they want me to take their dog as they’re becoming homeless and can’t find a place to rent and it just pisses me off cause it’s their own fault. And I can’t watch the animal suffer.
Or maybe it’s cause I have to go to the nearest city for the day. I dunno. but I really wish this housing craziness would crash a little harder and faster here in Utah and W. Colorado. Nothing selling, but prices still outrageous.
Guess I’ll go throw some rocks into the river.
OK, things getting better, they just called and their sister’s taking the dog.
I ask yet again, why don’t people plan ahead with their lives a little??? Why, why, why?????
just-in-time-thinking
“I ask yet again, why don’t people plan ahead with their lives a little??? Why, why, why?????”
Maybe for the same reason that people seem to think it’s the government’s responsibility to educate them.
I’m feeling very anguished over that animal I don’t even know.
I almost said if anyone found a dog of a certain breed that was friendly I would offer in honor of one we lost to kidney disease a few years back. But I don’t think my husband would talk to me for a year (and he’s a guy that let’s me get away w/murder). H is right, it would put a good dent in our “good tenant face” to add any more animals.
There are definitely parts of this unwind where I won’t be ingesting pop corn as I watch. Pomegranite martinis to help me get through it w/my very best suburban housewife cardboard cut-out smile maybe, but not popcorn.
Carrie, not to worry, I know the sister and she’s a gem, the dog’s probably better off with her, anyway. He’s stayed with her before, so knows her well. And anyone who cares about animals is part of my tribe.
Jeff,
I’m right with you.
I take comfort in the fact that:
1. My landlord is losing money on me, since he is only earning about a 2.5% return on his capital asset (excluding maintenance costs, his time, and depreciation)–he should be selling the home and putting the money in a muni-bond fund. His loss is my gain.
2. While inflation is kicking everyone in the butt, it’s not hurting my down payment. Why? Because my down payment was never intended to be buying gas, food, and electricity. It was intended to buy a house. And every day that goes by, that down payment not only grows since I’m renting, but it’s buying power goes up since home prices are sliding. I do feel for those who are truly getting crushed by inflation (and don’t own a home).
3. Given how aggressively people financed their homes, distress is inevitable. While I wait, I can take my monthly savings from NOT owning, and take nice vacations, eat out, etc., and STILL grow my down payment nominally. In other words, I can sit in a comfy chair while watching the show. I intend to do so.
Gotta be patient. I’m also fortunate that my wife doesn’t care about owning–it makes the situation easy to deal with.
Thanks lost.
I feel the same.
My lab who had a reputation as a total spaz has been so sweet through all our moves. It’s like she’s trying as hard as she can to be her best. H thinks she remembers 2 fellow pets going away and not coming home when they passed on and fears the same. If money was no object I’d take them all.
Called an old friend, former coworker, in another state to see how his hospitalized wife was doing. He emailed me several weeks ago stating that she was hospitalized ( now I find due to a suicide attempt). Seems like they are being sheriff saled due to unpaid credit cards ( lent his daughter big $$ for grandson’s medical problems). He asked if I could take one of his dogs. Bricks are starting to fall from this facade. I know that I’ll be ok, going back to work rather than retiring, but, what about people around me who cant?
If you cannot take in animal right now due to space/time constraints, but have the money for the care, donate to an animal shelter or rescue. That way, out there some animal is getting care.
“I ask yet again, why don’t people plan ahead with their lives a little??? Why, why, why?????”
Because Democrats deliver on their promises to give OPM to the will nots (It’s not contention between the haves and have nots, it’s really a contention between the wills and the will nots).
“And the Great Unwind rolls on and cash remains the king”.
If inflation continues at 7% a year, your cash position in 10 years will be 25 cents on todays dollar. The problem is determining your inlfation rate, not the government stats.
Cuase if you like to put gas in your car, buy a new car every few years, eat good food, get medical attention, send your kids to a good school, your personal inflation rate ain’t a measily 7%.
Cash is king in a LOW inflation world.
50% ?
“Cash is King” does not mean that you sit on cash as an investor for 10 years.
It means that with cash during a credit contraction, you will have the ability to buy assets at massive discounts because those on the other end do not have cash and desperately need it, and can’t get it from the bank.
True. Even a gold bug like me has twice as much money in short term gubment securities than in precious metals. Treasury note yields will go up above 8% in the next few years. That’s because gold prices will go much higher and treasury investors will throw in the towel and go for gold. I’ll have sold some of my gold before then and slide smoothly into the high rate notes. It will be a replay of 1979.
4% 10 year notes means gold is a hold. 6% means start selling gold.
“the banks are beginning to face waves of defaults on credit cards, car loans, and now corporate loans.”
Well the consumer is tapped out due to record inflation which reduces their purchasing power which is the path the FED took. Ben Bernanke had to know this was going to happen.
I think Wilbur Ross is now asking for a bailout as he mistimed his investments. He wants the government to now guarantee loans that go bad.
I guess its time to say Lower my interest rates to 9% or i wont pay you anymore money..take that Discover card!…(no no no i’m OK)
Turn off the credit card spigot carefully, or you’ll stop the engine that powered our country.
Ah the “Austro-Hungarian Strategy”: Don’t invade me or I’ll give up to the other invading army.
I guess its time to say Lower my interest rates to 9% or i wont pay you anymore money..take that Discover card!…(no no no i’m OK)
I interpreted your line a different way and it seems a cool concept - You pay off your credit card by the end of every month and you are essentially slamming the banks, just as the lower bond yields on long term bonds are slamming fixed income investors. It’s a good way to fight back at the powers that be. I have great enjoyment from my zero balances! If you have the discipline to keep a zero balance, it does not matter how many credit cards you have.
We’re slamming them even harder recently with $4000 monthly balances paid off monthly due to extraordinary expenses for home improvement and travel and the like. Thanks for the float guys!
“the banks are beginning to face waves of defaults on credit cards, car loans, and now corporate loans.”
But, but….the top 40% is keeping this economy strong so we don’t really care what’s happening below that top 40%
Wall St. Flunkie
Glenn Beck Show
Fall 2007
“that the global credit crisis could be entering another turbulent phase.”
Damn! We were doing so well too./s
Subprime was so contained this time last year.
It sure was.
I can still see their smug faces with an inch of makeup plastered on talk about how “subprime was contained, and there would be a limited effect”
Tell that to Bear Sterns and all of the FB’s sending in jingle mail and calling their parents for a place to stay.
It was a worldwide bubble. It’s not different here….
1997 prices in 2010…
Supply and demand will finally meet in Bubble Town USA.
Butch — Where are you located (if you don’t mind saying)?
Portland, Oregon
LOL
“Subprime was so contained this time last year.”
Alt-A is currently in the process of being contained.
And Prime will be contained by this time next year.
Fed is gearing up for round 2 of “Whack a mole”.
This includes dumping the “We’re holding the line on rate cuts” rhetoric and going for another 1/4 to 1/2 point rate cut.
not a sign of that in the real economy, mortgage lending in the Netherlands is still as crazy as ever (so prices are still climbing). Consumer confidence keeps going down in the polls but surprise-surprise, spending on big ticket items like flatscreen TV’s keeps surging, no sign of any consumer slowdown there either.
And as for rates: Europe officially has 3.6% inflation (no one with some intelligence believes that number) so the rates you get on savings accounts and time deposits from official banks (2.5-4.2%) assure that you loose money even if the bank does NOT go bust (which might happen, with all the leverage over here). Lending huge amounts of money is still the easy way to get rich; rate for fixed term mortgage in Netherlands is in the 4-5% area, but effectively it is 2-2.5% because of the Dutch HMD - so the debtor wins at least 1-1.5% every year thanks to inflation.
But let’s look at the good side of life: you can now get a 5% rate on a savings account in the Netherlands, offered by a bank from … Iceland. Good luck beating inflation before the bank blows up
P.S.: I just watched a TV discussion about the 10-year anniversary of the euro currency. The top economist from Dutch Rabobank argued that the euro was a huge success because inflation in the Euro zone is ‘very low’ (currently 3.6%) and ‘inflation in the US is at least two times higher’. Maybe he should inform his friends at the FED …
Someone mentioned that over the last ten years, the actual performance of the ECB regarding its 2% inflation target (th eonly official target for ECB policy!) is dismal, they attained that less than 25% of the time. But economists and politicians still think the euro is a success story. One of the arguments is that budget deficits in Europe are a lot smaller than in pre-euro times. If that is a result of the euro remains to be seen, certainly in many countries the huge public deficit has been traded for huge personal deficits. Total debt (public + private) certainly is way higher than before the introduction of the euro, thanks to far too low interest rates
Nhz:
AHA! So THAT’s where that bank comes from.
To celebrate my sons’ graduations, I’m taking them to a WWF Spectacu-ganza in (shudder,) Bakersplat at…Rob-a-Bank Arena, as it’s popularly known down there. Please tell me, how is it pronounced by real people?
(I detest fake wrestling with all my being but degrees are degrees, and we made a deal. I’m sooo bring earplugs and sunglasses.)
What’s faker…
Wrestling or our Economy?
ahansen: you mean Rabobank?
They are very ‘Dutch’, originally a cooperation for loans to (between) farmers; quite unlike Dutch ING (ING Direct) who see themselves as Masters of the Universe, wordwide players in the financial markets. I think Rabo still has most of its offices and investments in Netherlands (they are the biggest player in the Dutch mortgage market, beware if the Dutch bubble starts to burst).
I think trying to pronounce ‘Rabo’ would immediately expose you as non-Dutch
Owners of foreclosed non-primary homes are subject to income tax on difference between sale and loan prices.
http://www.nytimes.com/2008/05/30/business/30tax.html?_r=1&ref=business&oref=slogin
“Some of the biggest losers in the real estate slump are not purchasers of mansions they could not afford. They are buyers of second homes — or third ones, for that matter — who are sitting on a tax time bomb.
Many of these people will lose their properties in foreclosure and then stagger into bankruptcy under the weight of a sizable tax bill. While Congress has granted some tax relief to people who lose their primary homes, there is no such aid for those who fall behind on payments on a getaway condo in Las Vegas, a retirement home on the Florida coast or an old house that they are renting out for income.
Like many others, the Garcias borrowed more than their homes are now worth. The difference between the amount they borrowed and the rental home’s sale price in foreclosure will ultimately be considered taxable income as forgiven debt.
If the rental house sells for $160,000, which is about what they paid for it in 2003, they may still owe tax on $120,000 — the difference between the sale price and the $280,000 they borrowed against it over the years. That could mean a tax bill of more than $30,000.”
Second homes are luxuries, and people should not borrow money to buy luxuries.
As for investment properties, if people don’t know what they’re getting themselves into, they should stay out of them.
Period.
people should not borrow money to buy luxuries. So simple, and so true. It’s one of the principles that I live by. I actually bought a fancy car a few years ago, but only because I could pay cash.
The real scandal is that these taxes will never be paid. The borrowers profited tax free, and the banks write down the loss, but the taxpayer takes the (short)fall.
Don’t forget….these people will get to keep the $120,000! (Sure, they may have paid it to a bank, but it was still their money under their control.) And all they have to do is pay the tax! How can *anyone* feel sympathetic to them?
OUCH…so that guy I know who will be foreclosing on about 3 million worth of property…will owe probably taxes of several hundred thousand!
Ok….
IRS debt is not relieved in BK.
Oh. Ha ha ha.
it is under some circumstances, it has to be three years old at least, among other things.
some of it is. Taxes due 4 or more years before the filing of the case are dischargeable IIRC
IF there was no fraud involved and all returns were filed during the look back period.
Taxes due 4 or more years before the filing of the case are dischargeable IIRC
So a foreclosure happens in year Y. I should wait until year Y+4 to file bankruptcy? (and I wonder how many will last that long.)
Don’t forget the insolvency rule; many of these folk will not actually owe the tax due to that.
There should be no tax advantages or tax relief for any houses beyond a primary residence. Those are luxuries whereas a primary residence, not necessarily “owning” a house, is a necessity.
When you have a large percentage of people that can’t even afford to buy a primary residence, why should there be any consideration for tax breaks for non-primary residences or properties?
I can vouch for that. We have friends that purchased an investment property a few years ago, and lost big when they sold it (fortunately they were *able* to sell it). They were audited by the IRS, and are paying back a huge tax bill. They’re having us save all our newspaper and mail coupons for them - doh.
they cannot have my coupons!!
1st of the month on sunday- it comes around awful fast doesn’t it?
1st of the month on sunday- it comes around awful fast doesn’t it?
For my tenants, maybe… me, I take full advantage of the 15-day grace period on my mortgage: due on the 1st, not considered late until the 16th of the month…. paid electronically on the 15th of every month.
“They’re having us save all our newspaper and mail coupons for them - doh.”
Those 50 cent savings on tampons really add up.
Well, it’s either that or buying used ones, right?
LOL - Actually, you probably don’t want to know this, but there are several non-disposable products out there for women (The Keeper, for one). They’d save a lot of green (environment and money) and room in the grocery cart.
I didn’t need to learn that. Didn’t want to learn it either. But someday I’ll look back at this moment and realize I’m a better person for it.
Wow! that must be how they did it in olden times.
Wow! that must be how they did it in olden times.
Olden times solutions involved more laundry at certain times of the month. (The Keeper is made out of rubber.) Also a fair amount more pregnancy.
So when my friends tell me my girlfriend is “a keeper” - that’s NOT a compliment?
Sooooo much still to learn ……
Isn’t that where the phrase “on the rag” originated? Eww. I can’t believe I typed that .
Vermontgal,
More women need to catch on to these. I love my diva cup and will never look back!
It’s very weird that I know this, but disposable sanitary pads are a side effect of WWI. Nurses discovered that celulose based disposable bandadges had other uses…
“That could mean a tax bill of more than $30,000.”
This is the first positive we bubble viewers have heard. Keep Dodd away from this gem.
Kohn Says Wall Street May Get Permanent Access… In other words They WILL get all they want/need anytime, forever. Anyone that thinks we should not do away with the FED has lost all reason…
http://www.bloomberg.com/apps/news?pid=20601103&sid=a7EKKQuCqhUA&refer=news
Will they relocate technology called a printing press to Wall Street or is it already there, virtually speaking?
(B)
Also: (My bank kindly referred me to this headline this morning, gah.)
—
In addition, central banks are considering arrangements to accept collateral from other countries denominated in other currencies, Kohn said. “A number of issues need to be resolved,” he said, adding that major central banks may agree on accepting a “common pool of very safe collateral.”
That would seem to imply acknowledgment that the Federal Reserve has already expended the assets it has… so soon the US economy will literally be in the control of the ECB and BOJ?
“common pool of very safe collateral.”
Like grandma’s gold teeth, guns and power tools I stole from a job site? Or is the quality of the collateral even worse, like CDOs?
Well it looks like we’re down to bottle-caps and pocket lint. They were lending on shopping carts full of aluminum cans back in Dec.
This statement contradicts the strong dollar talk that always comes from both the Fed and Treasury. The long awaited “dollar rally” seems to be more of a sideways movement. Look at a chart of the dollar index since 2000 and you see multi-month sideways channels followed by drops. I expect this pattern to repeat through at least 2012 and some of my assets are allocated accordingly.
We’ve been leading the charge down, but I expect some other major currencies to join us in the toilet over the next year ro two–which means the value of the dollar vs those currencies will “strengthen”.
Wages falling for many.
Gas at $4.00+ per gallon. Dow raising the price of products 20% on Monday.
Debt at record levels. Market pricing in interest rate increases.
Many industries slowing production and laying off hundreds of thousands of workers.
Foreclosures and Commercial RE defaults rising to record levels.
Soros says this is worst recession in our lifetime.
Head of FDIC worried about bank failures.
Stagant/falling wages with skyrocketing inflation coupled with a sharply slowing economy….how do we fix this one?
“Stagnant/falling wages with skyrocketing inflation coupled with a sharply slowing economy….how do we fix this one?”
Leave it to the next administration…mission accomplished.
yes charlie but did you see the finale of american idol?
it amazes me that so many people have no idea what is going on in the economy at all. i have said it before and i will say it again
many longtime posters here have said things that have absolutely happened 6,12,18 months after they said it would
this blog has been a fountain of great information and i feel very fortunate to read all the good stuff here and feel as prepared as i can be for any calamity such as job loss or other event
just think a few years ago it was what bubble? or where is your tin foil hat?
now it is like wow you were right it is really bad out there
thanks to all the longtime posters and especially Ben for providing this very educational forum
Here here!
Hear, hear?
“There, there” - Firesign Theatre
George Tirebiter, is that you?
My sentiments exactly. I have actually told people who are starting to face reality (and are getting quite nervous) that I am not one bit surprised at anything going on economically right now. And I’m not worried (provided I don’t lose my job of course) because I was and am prepared for things to keep getting worse. Why? Simply because of this site.
I just hope that all the wise words spoken here continue to come true because if they do, I will realize a home of my own some day…
Yup! I feel the same way. I post on the local newspaper site, and have been for years.
The problem is, is now my job is at risk. Oddly enough, employment is still pretty good. But I’m not 100% sure I will be able to make the same amount of money. And I might have a long commute. This would interfere with my high amount of savings I’ve been collecting.
I guess you have heard that old saying that raining day savings are for raining days?
Don’t look now, but its pouring outside!
but…interest rates are low. this one is an odd duck.
And schools are talking about 4 day weeks to save fuel costs. Wonderful, malls full of kids without anything to do or more gangs walking the streets.
Businesses talking about a 4 day week to save workers fuel costs, in house energy costs. Makes sense and might even out the long commute time for those driving longer distances.
City cops may be riding bicycles to save fuel costs. Gee, healthier cops, maybe we can dump safety retirement and save the tax payer hugh sums.
Can’t imagine the 4 day school week will fly. It would cost many families a lot more for that one day of child care than it does to bus the kid to school. I think there would be great opposition to this.
I can’t imagine it either. Sadly, this thread makes it obvious what modern public schools are about: free daycare from 5 to 18.
My guess is that the schools will drop services or possibly make parents drop off the kids at school.
I didn’t mean to imply that public schools are daycare. I’m looking at it from a working parent perspective. If my son’s school days go from 5 to 4, he will need to be put into some sort of daycare for that one day.
I know a lot of people are down on public schools - and some districts deserve it, but I’m happy with the schools in my area. Are they all award-winning, blue ribbon? Nope. But they’re certainly not just daycares. The district I currenly live in is the same one I went to. I feel like I got a decent education and expect the same for my son. But I cannot say this with enough emphasis - it is also the parents jobs to ensure your children are getting a good education. Too many parents just assume the schools are handling it all without checking in to see how the kids are doing. I kid you not, I knew a 16 year old who could not read. I was helping him with math homework one day and realized he couldn’t read the problems - thus why he was failing. Now why didn’t anyone else know he couldn’t read? Both the schools and the parents failed that poor kid.
“…make parents drop off the kids at school.”
Make them? I ride my bike past a few schools on the way to work every morning - even on a bike I can barely get past them because of all the parents (usually in sh*tbox SUVs and Deutsche-luxe crap) trying to drop their kiddies off at the front door. It’s been this way for years and years - buses have a bad stigma for yuppies.
That’s a heck of a lot of energy to spend on a family memeber that is a decade or more from being productive. Maybe that’s why kids used to walk to school…oh wait - the boogeyman…nevermind.
EC - I agree with you that one of the real issues is that parents send their kids to school and expect them to just handle everything. In that sense, those parents do treat school just like daycare (and replacement parents). In my option, the best schools have little to do with the income - it has to do with level of parental involvement.
But I cannot say this with enough emphasis - it is also the parents jobs to ensure your children are getting a good education. Too many parents just assume the schools are handling it all without checking in to see how the kids are doing.
Absolutely.
It bears repeating, over and over again.
“It’s been this way for years and years - buses have a bad stigma for yuppies.”
It’s the kids themselves who don’t want to interact with the others on the bus - get teased, hassled, hazed etc. Mommy and daddy probably identify with that.
It’s the kids themselves who don’t want to interact with the others on the bus -
Yeah, my worst public school experiences, hands down, were on the buses. It’s like Lord of the Flies for 40 minutes a day: no rules and no consequences for a group of kids left on their own.
Many school districts in California do not have school buses. So, it can be walk a mile or so, or parents to drop off by car. A mile walk/bike is ok for a 14 year old, not really ok for a 6 year old.
In middle school, 5-6 boys on my bus used to get off, run after a victim and sexually abuse them. The bus driver and other adults in the neighborhood knew what was going on and did nothing. One day I was their intended but I outsmarted them. (After being chased to a gas station rest room and having them trying to force it open, they left when they heard me crying…notice I didn’t trust going to an adult in the gas station for help)
The funny thing is I kept taking the school bus cuz the whole thing kind of blew up when I got home crying an hour late and my parents called the cops.
My kids are on the bus now but anyone w/a problem w/me driving them can go pound sand.
D word.
Denial, of course.
From memory today’s news… “26% of GM workers accept early retirement buyout package. This will enable GM to rehire new labor at $14 per hour roughly 1/2 the union wage. Retirement and insurance benefits will also be reduced.”
How is this good? How does this approach by domestic companies help people buy those over-priced homes and autos? We’ll be China before you know it.
It’s only as good as the auto company can stay in business. BK within 5 yrs of retirement could be bad for the retiree as the benefits could be reduce if taken over by the FBGC.
It doesn’t. It just means that many fewer potential buyers.
And I doubt their prices will go down either.
We’ll be China before you know it.
This is the Republicans wet dream
Labor that earns just enough to survive and has no voice in politics or corporate function.
Well, charliebrown, I was feeling better, but now I’m gonna have to go down to the river and throw rocks.
But yet the stock market goes up.
Pssst want to know a secret? Don’t rely on anyone else for your wages and your wages won’t be stagnant or falling and you will never be unemployed. The people whose wages are stagnant are cube drones who complain about their 2% yearly raises. The same people who lie awake at night worrying if they are next on the HR chopping block.
Your plan seems to be working great for the Mortgage brokers and Realtwhores.
Escape from Cubicle Nation!!! While you can!!!
Another insidious cynicism message to keep the wealthy elite in power. Expect nothing but work harder folks.
Mr. Negative checking in. Or is it Doctor Doom? How about Captain Negative? Mgnyc received my last rant about the dumba$$es that call us negative. I don’t think HBBers are negative. For the most part we are detached and studying this in a very academic fashion. It is the FBers and the dreamers that are so emotional on this subject of the real estate disaster. Bunch of retards.
Here’s what we have going at work. I just lost a co-worker that went back to the Midwest because he owns an underwater house back in the land of the Squareheads. I believe that would be classified under “opportunity costs”.
A higher-up here at work is looking at selling the house his daughter lives in. This is in New Jersey. He thought I was insane when I said Jersey would get knocked down, back in ‘05. He says he could’ve gotten $550,000 at the peak. He thinks $450,000 now. We’ll see on that one. I doubt the $450k. And his wife says they immediately have to buy something new for the princess. Bwahahaha.
We have another nice person here that owns two houses. She really is nice. Her husband had to buy before selling so they own two houses. She is commuting from the house they can’t sell. It’s an awful commute. They are a classic example of chasing the market down. They are lowering the price but never enough to actually get it sold. She says she wishes I had been around to talk to her husband last year. I told her I would have made an argument that was reasonable and filled with facts and common sense. The moment I walked away her husband would have said, “that negative prick doesn’t know what the f— he is talking about”.
Screw ‘em all! Have a great weekend. My liver is feeling much better today. Yesterday it felt like The Yankees had been using it for batting practice.
We have another nice person here that owns two houses. She really is nice.
Is she hot?
She’s got a great personality.
300 pounds, eh?
LOL you guys.
Over the years I’ve surmised that when a woman describes a man as “nice” she means sexually desirable. When a man describes a woman as nice he means the exact opposite.
women are all nice, some are just nicer than others.
nyc boy
you can only lead a horse to water
if anyone wants a good laugh read the new fortune mag
my boss gave me his copy and there are some good reads in it
regarding the IE area and the downsizing of the american home
i tried to get the story but i guess you need to buy the dead tree edition for the full story
and spam sales up 15% yummy
NYC,
You’re humanity, sensitivity, and selfless concern for others is an inspiration for us all…
(Mother Teresa move over)
F-ck off!
now thats the nycboy we all know and love
beautiful…..
Sorry “your” (just got up).
You know my last comment was in fun. Now go ____ yourself.
Absolutely! A little Friday fun dontchaknow… (got a hankerin for Lutefisk lately?)
Hey, Jwhite, I saw your post about wanting good greasy cheezy city pizza.
If you’re ever in Philly: Lorenzo’s, 3rd and South
I had one last week. Best thin crust pizza ever.
You were at Lorenzo’s?
Thanks Phillygal! Pat’s or Gino’s?
neither.
Jim’s at 4th and South used to be good for greasy street cheese steaks, but I don’t know, I haven’t been there lately. Tony Luke’s is good if you like real food, Tony was on a throwdown with Bobby Flay and his steaks won because Bobby’s were good but they weren’t street enough.
*sigh* Any of them would be good right now. I’ve really got to take a vacation, but I can’t because the wife can’t get away any time soon. I’m actually taking classes as boredom relief. I would kill to eat my way through a major city for a week though!
Guy in my office apparently bought a room at the Hard Rock condotel in San Diego late last year. Was talking to him yesterday, and his lack of a clue as to how bad a decision that was just made my head hurt. Last month, his revenue stream from hotel stays was $2000 while his mortgage payment was $2500 (no idea if this was fully amortized or some teaser rate — I didn’t want to be an a-hole, so I didn’t ask). I *did* ask if he had some kind of homeowner dues, and he said “yeah, it’s $700/month,” (and here’s the kicker that almost made me fall out of my chair) “but I get VIP access to the club and the gym.” He went on to say that his revenue should increase now that the hotel is fully operational and travel/convention season is upon us. I just smiled and let it go.
Why do people always “let it go”?
Whatever happened to rubbing it in completely and utterly while dancing side-to-side making funny clown faces?
Maybe we should make Nelson from the Simpsons as the official mascot of the HBB.
HAH HAH!
Well, he is actually a nice guy. And he never tried to sell anyone else on the idea. I actually think that that he truly does know that he made a bad decision and he’s simply trying to rationalize it after the fact. I see no point in being a dick about it.
You should totally rub it in.
You should point out that $700/month would pay for a gym membership, hookers and a crapload of tequila too, and it would be a lot more fun than a crappy condo.
HAH HAH.
Faster, I think we might be twins who were separated at birth. I mean, wow, you even do the Dance of Mockery.
Oh, gosh, Olympia girl, I do the Dance of Mockery. I do have a little moment when the Catholic guilt clicks in and I think Oh gee, I should go to hell for this. But it feeeeeellllls soooo gooooood.
Catholic guilt, ha ha - what’s that?
Oh, that’s right I never saw you at my Catholic girls’ high school.
Whatever happened to rubbing it in completely and utterly while dancing side-to-side making funny clown faces?
LOL. I’m having as much enjoyment just thinking what a former buddy of mine is stuck on - 2 florida condos, 160 acres of Iowa land, a house being built in Jamaica. He called me a rent slave back a few months ago and invented scandalous stories about me that were untrue. I said gold will go above $1000 per ounce and oil will never see $60 per barrel again.
In the next two years he will be proven even much more wrong and me much more right. It’s the fundamentals, stupid! He never looked at the fundamentals.
It is the FBers and the dreamers that are so emotional on this subject of the real estate disaster.
You’re WAAAAAY too nice to call them “the dreamers”. Please, they aren’t dreamers. They’re egomaniacs. And, sad as it is to see and say, my father has become one of them.
I often get accused of being too easy on people. I will work on being more cruel. Now go ____ yourself.
Hey Nyc,
I don’t think that the “negative” impression is as pervasive as it seems. Of course the people with an interest in RE (agents, brokers and FBs) will view us as negative, but there’s a silent majority out there who share the HBB view. I think of my parents who are good ol Western PA blue colar working stock. They own their home outright and have bitched for years about the ridiculous run-up in home prices. To them, it’s nothing but a bigger tax bill. This sentiment is widespread amongst rural America. Hopefully the beating that FBs take on the way down will rebuild our grandparents views on home ownership and savings. And let the whiners whine… it’s out of their hands now.
“but there’s a silent majority out there who share the HBB view”
It would be difficult for me to disagree more with that statement.
you forgot your tag:
“now go ____ yourself”
NYCityBoy: While I whole heartedly agree with your sentiment, ever since my third trip to HR, I have chosen to say “proceed with self fornication”
ever since my third trip to HR, I have chosen to say “proceed with self fornication”
******************
I think I just scared my dog I’m laughing so hard!
I have to agree, very few out there share the HBB view.
About 70% of people either have stable mortgages or are FB’s. They all want the bubble back. They really, really want to believe that real estate never goes down. That this is a temporary hiccup and any time now, it’s going to start going back up again, maybe not 30-50% a year, but they’re willing to accept 10% a year.
Most people I know who have mortgages, all still seem smug and ask me when I’m buying, since this is a great time to buy. “You know this dip can’t last forever” or “there is just no chance things will go back to 2000 prices”.
On the other hand, incredibly, we all know people who are underwater and want to move out of a bad area in the city. And yet in full view of that, in full view of (slightly) declining prices in central Maryland, I have not heard anyone say, “Why don’t you hold off on buying, the credit market has not readjusted and prices are going to keep going down for a while.”
So, yeah, I don’t personally know of anyone in my circle of contacts who espouses the HBB view.
“They all want the bubble back. They really, really want to believe that real estate never goes down. That this is a temporary hiccup and any time now, it’s going to start going back up again, maybe not 30-50% a year, but they’re willing to accept 10% a year.”
I’d say that was true in late 2006 to mid 2007. Until fall 07, most of the koolade talk went something like “RE will go down just a little bit for a year and then keep on going up”. What do I hear in 2008? Dead silence. Nobody wants to talk about it as if a child covering his eyes to make the monster go away.
What do I hear in 2008? Dead silence. Nobody wants to talk about it as if a child covering his eyes to make the monster go away.
That’s been my experience as well — the people who told me I was foolish or overly bearish (or whatever) aren’t too fond of discussing real estate anymore.
Some of them are seemingly at peace with it (e.g., when pressed, they said I like my house, I’m happy with it, even if I can’t sell it) while others are a little more grim-faced (like my friend who relocated to the Bay Area for work, but hasn’t been able to sell his Chicago condo, despite multiple price reductions).
I don’t agree that all long-time mortgage holders want the bubble back. If people plan on living in their existing or similar house for the rest of their lives, it is only paper money. My house went from $250k to $130k? that’s fine so long as I can buy a comparable home for $130k.
For example, I have a friend in this mountain town who bought his house 15 years ago for $37,000. It is now “worth” $250,000. He said the whole thing makes him sick because the type of people who buy a cheaper house and lead creative or interesting lives can’t come here…they can’t service the debt. So, he wishes his house was worth what he paid for it plus inflation.
FBs, those are a different story. I know a guy who overpaid on maybe a $180k house in ‘06. He paid $365 thereabouts and now wants to sell for $420k. He is so badly underwater foreclosure is imminent. I like him and feel bad about the situation, but ultimately we’ll benefit from having affordable houses once again.
I guess I live in my own bubble. Basically all of my closest associates are in the pre-homeowner stage of their lives. Maybe I get a skewed perspective from this experience.
This is why i hand it to my parents who never wanted a SFH, so my father built a 2 family (he was a bricklayer)
And funny back then banks were far more willing to lend to you if you had and lived in a multi-family home.
So even though my moms tax bill is over $8000 a year the rent she gets is $1700 a month. and they pay their own gas heating & electric
========================================
To them, it’s nothing but a bigger tax bill.
Mr. Negative checking in. Or is it Doctor Doom? How about Captain Negative? Mgnyc received my last rant about the dumba$$es that call us negative. I don’t think HBBers are negative
________________________________________________________
IMO, HBBer’s are FUTURISTS…THEY CALL THINGS THE WAY THEY SEE EM. THEY DO AWAY WITH THE BS POLITICAL CORRECTNESS AND CALL A SPADE A SPADE. A LOT OF THE GOVT ECONOMISTS AND GOVT POLS HAVE TO LIE TO THE AMERICAN PEOPLE TO PRESERVE THEIR OWN HIDES AND JOBS. FREE TRADE HAS RUINED OUR COUNTRY. I THINK THE USA RUNS DEFICITS FOR THE PLEASURE OF THE REST OF THE WORLD. RANT OFF.
I like your anger!
HE FOUND THE CAPS LOCK. THAT MIGHT HELP THE Libor FOLKS.
BWHAHAHAHAHA!!!!!
Hilariousness!
OOOOMMMMMM…..give me a DUFF….hell…make it 2.
Muni defaults tripling
http://www.bloomberg.com/apps/news?pid=20601039&sid=aGP25Nnw2JlY&refer=home
Hey aren’t we coming up this weekend on the deadline for Jefferson County (AL, Birmingham) to reach an agreement with bondholders on their huge defaults looming? And last I heard, they refused to accept the deal? Chapter 9 perhaps? Eeeek!
The banks will bail em out, I have no doubt since this would set a VERY bad precedence. What’s interesting is where the SEC investigation into Lankford who was the president of the Jefferson County Commission (now Birmingham Mayor) will lead… According to him, it’s all a “political witchhunt”…
There have been several deadlines and for each of them the de facto creditor committees have granted extensions. This is simply a game by which the creditors avoid a legal default by the lender. Right now the bonds are on the books of mutual funds and finanacial institution at par (held to maturity and deemed fully collectible). Once there’s a default the funds and financial shops will have to write-down the bonds. There’s just too much bad debt around and creditors are deluding themselves (for example, look at IndyMac’s loan loss reserves).
How Hollywood gets money wrong
http://articles.moneycentral.msn.com/SavingandDebt/LearnToBudget/HowHollywoodGetsMoneyWrong.aspx
Hollywood sells dreams. Always has, always will, even back in the days of silent films and Garbo.
If people fall for this stuff, call them naive, and mock them silly.
For the record, I’m gonna go find magical artifacts à la Indiana Jones now, and I even know how to crack a whip.
Hey, I’m an archaeologist, can I go, too?
(Actually, I’m more of an anarchy-ologist…)
Sure but if we run into the bad guys with fake accents, and you don’t run fast enough, I’m leaving you behind.
What, me RUN????
Nah, I got a handy-dandy pith helmet I’ll throw, loaded with pith (and vinegar)…
My grandpa has a pith helmet. He used to wear it when he walked to BYU, where he taught organic chemistry. It went great with his plaid polyester capris.
Oh man, now that’s what I call CHARACTER!!!
as an anarchy-ologist, did you hear the sad news that Bruce Phillips died? (as in Bruce U. Utah Phillips, the Golden Voice of the Great Southwest)
U. Utah Phillips has passed away in his sleep at 11:30PM PDT on May 23, 2008.
Utah has caught the westbound, and the archy world is at a great loss.
End of the Oil Stock rally?
http://articles.moneycentral.msn.com/Investing/JubaksJournal/TheEndOfTheOilStockRally.aspx
This article tells you that big oil in the US has few prospects.
They are giving the $ back to shareholders and management w dividends and stock purchases, despite declining production.
Foreign oil sources are being nationalized and local resources are being depleted. My guess is that big oil just like foreign coutries have lied about their oil reserves in order to keep their stock price high. Management is bailing out before the crp hits the fan. At the end Oil companies will be hollowed out with few resources and a lot of drilling equipment.
I sold some DUG but I may have to let the rest ride.
Dow Chemical faces reality with 20% price rise
One of the world’s biggest chemical companies believes that oil prices will remain at record highs and that old-fashioned means of hedging against higher energy costs are now useless.
Dow Chemical, the huge Michigan company that makes solvents, paints, agricultural feeds and plastic, said this week that for the first time it had increased prices to all its customers globally by as much as 20 per cent.
Some of the company’s biggest customers are companies such as Unilever, the Dove soap producer; Procter & Gamble, which makes Pampers nappies; and Kimberly-Clark, the lavatory-roll manufacturer.
http://business.timesonline.co.uk/tol/business/industry_sectors/industrials/article4029568.ece
How rich friends make you feel poor.
http://articles.moneycentral.msn.com/SavingandDebt/SaveMoney/HowEnvyWrecksYourFinances.aspx
Isn’t this obvious stuff?
Heheh, you’d THINK wouldn’t you? However, I’m afraid most Americans have lost their grip on financial reality and this is a key part of “keeping up with the…” My neighborhood is the perfect example. We’re the only renters and live a quiet life without every blazing bell and whistle (exception, my wife drives a premium car). It’s finally catching up with some of them. The insurance guy down the street has his home for sale, but NO “for sale” sign. To embarrassing I guess. Sounds like a midnight move ala the Baltimore Colts…
“The insurance guy down the street has his home for sale, but NO “for sale” sign. To embarrassing I guess.”
I am noticing that A LOT in my area. Our landlady put our house up for sale on Zillow (didn’t tell us), but its not in the MLS and there is (obviously) no sign. Out for a walk last weekend we came across some neighbors looking to rent out their townhouse. Apparently it has been for sale, but we didn’t know it because they had no sign up. The developer of this subdivision has at least one more townhouse to sell; that one is on the MLS, but for whatever reason, there is no sign on the unit.
And that’s just on our street!
Did she really put it up for sale on zillow - or did she just put a “make me move” (that’s really what they call it) figure there? You can put a price on your house in zillow that you would sell it for - but it’s not exactly the same as actually marketing it.
My guess is that people usually put a figure even beyond what they think their house is worth as their “make me move” price. I’ll bet that just engenders a lot of calls from struggling local realtors trying to find out if they’re really interested in selling, and trying to get a listing.
“Did she really put it up for sale on zillow - or did she just put a “make me move” (that’s really what they call it) figure there?”
No, its “for sale”. She had it listed “for sale or rent” before we rented it, so I wasn’t completely surprised to find it new on Zillow a few weeks ago. It won’t sell anyway so I am not worried. Among other things, the buyer can’t take immediate occupancy and it can’t cash flow.
Sure seems like it’s obvious!
From the article:
But it’s like looking in the window of Saks Fifth Avenue every day and thinking, ‘I’ll never be able to afford that.’
Heck, wasn’t that everyone’s life in their 20’s?? I know it was mine. But even though it’s probably human nature to try and “keep up”, I didn’t even TRY to afford most of that stuff. I guess I was lucky in that I was able to scoff (silently, mind you!) at co-workers’ huge BMW payments while I drove a Sentra, or a mountain bike, to work.
And now after a lot of years of moderate frugality, hard work, and some decent decisions, I can walk past the window of Saks Fifth Avenue, peer in, and say “I could write a cheque for that right bloody now!” But of course I won’t write a cheque for such things, nor buy on credit, and I guess that’s why I can afford it any time — if I so choose.
i agree nova
when you were younger and did not have the money everything looked so good in the malls and stores
now when i can actually afford the stuff i could care less
That’s because you realize how much effort it takes to afford the junk, and it’s only junk at the end of the day.
As I teach my son. “If you have everything you actually NEED and some of what you want, then you are doing very well in this world…” I fervently believe in this.
Nova -
I agree,too. Spent my 20’s looking to afford anything more. Spent way too much of that time fixing up an old house just to have it. We’re not quite to the point where we can afford just anything but it’s nice to get over wanting it all.
Luxury car? How would we go camping with the kids in something like that? 3000sq ft house - why would I want to clean it (or pay someone else to)? Jewelry? I live in VT - where I wear it without looking pretentious or stupid?
My biggest “stuff” ambition at the moment is to get rid of more junk, finish organizing the junk that’s left, and maybe build a small patio in our rented backyard.
build a small patio in our rented backyard
I like your motivation! Maybe your landlord does as well! In a few places I’ve rented, I did a lot of low-cost but big-labor improvements. The landlords were, of course, real happy. But so was I because I could enjoy the result, at least for a couple of years. I also, er, well, viewed this as “learning with someone else’s stuff”, in case I didn’t do it quite right. Though I usually did it close-to-right.
A friend of mine once got all over me about trimming a low-hanging tree in the front yard, planting grass in the bare spots, and sanding and repainting the patio furniture at a rental we were in. “It’s not your place, it’s his! What are you, crazy?”
Well, no. The landlord had no inclination to do that stuff. And if he did have it done, he’d build the extra cost into my rent. But for me, I live here! I want it nice. If I leave it nice, so much the better. And best of all, it got me some stellar references that came in handy in some tight rental markets where the next landlords would pick us over a dozen other applicants.
There are a number of 20 and 30 somethings in my office who “must have” the latest handbag that costs more than a months rent or (for the guys) the latest sneakers (some of which cost hundreds of dollars!)
I told one “sneaker head” to sit down and calculate how many hours he had to spend at work to earn the money for one of his pairs of sneakers and he was shocked, but continues to buy more, and probably will keep going until he reaches his credit limit.
Most of these kids have apparently NOT been taught how to be “middle class” or “working class” and choose priorities.
I like your motivation!
Thanks! We feel the same way as you. Yes, technically it belongs to the landlord but we’re the ones living here. There’s nothing wrong with putting a little work into the place and then enjoying it for a while.
We had a fixer-upper before we moved here. The stuff we do is nothing compared to the level of project we used to tackle. Even the patio would promise to be an easy/fast project compared to upgrading a 100 year old house.
It’s nice to know that we’re not the only ones who feel that it’s worth it to put at least a little time into the current rental abode. *grin*
‘It’s nice to know that we’re not the only ones who feel that it’s worth it to put at least a little time into the current rental abode. *grin*’
I always took good care of wherever I was.
And then, whoo hoo, it turned out to have been a good idea, since I ended up buying my house from the landlord. Her option ARM was about to expire and she wanted the money for some real-estate investment…wonder how that’s going, now that I think of it.
Privately insured mortgage defaults rise in April.
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&date=20080530&id=8707567
US banks likely to fail as bad loans soar
By Joanna Chung and Saskia Scholtes in New York
Published: May 29 2008 20:43 | Last updated: May 29 2008 20:43
US banks set aside a record $37.1bn to cover losses on real estate loans and other credits during the first quarter in a sign of the growing economic pain being caused by the global credit crisis, regulators said on Thursday.
Bad Omens for Banks?
News from KeyCorp suggests U.S. banks’ loan losses may worsen. Is the credit crisis hitting a second, even scarier phase?
“…If credit troubles are brief, banks can afford to maintain their dividends. Bank investors might overlook a brief dip in earnings, however severe. However, the longer the credit crisis continues, the more q uestions are raised about whether they have enough capital.
Borrowers, particularly homebuilders, are clearly having a harder time paying off their bank loans. The best hope for banking stocks would be if the trends stressing out those borrowers—the weak economy and housing market—start to ease, or at least stabilize. Otherwise, it could be a long and gloomy year for investors in bank stocks. ”
http://www.businessweek.com/investor/content/may2008/pi20080528_223289.htm?campaign_id=yhoo
Getting into bank and financial stocks with oil above $115/bbl is asking for trouble. Every dollar above $125/bbl of oil is jeopardizing 10 additional banks due to the inability of companies to make loan payments. Corporate debt stress is getting a lot worse.
Questions still hover over future of Libor
By Michael Mackenzie in New York
Published: May 29 2008 21:18 | Last updated: May 29 2008 21:18
Money market rates rose further on Thursday as US investment banks close their books for the fiscal second quarter this week and rising bond yields reflect expectations of Federal Reserve rate hikes this year.
The renewed volatility comes at time when the reliability of floating rates set daily, known as Libor, have been questioned by some investors amid massive mortgage and credit writedowns by banks.
All I want to know is when did LIBOR get changed into Libor?
Journalistic standards are slipping if they can’t even manage to get capitals right.
You think they are wilting under the strain of writing capital letters?
i have noticed that many people strain to hit the shift key. it takes all of 0.0000001 of a calorie to do it. my guess is they’re saving themselves for their next workout.
perhaps they are missing their little pinkies, and if their editor harassed them about it, then it is of course a violation of the ada, right
I get tendonitis, so using the pinkie for caps is out.
many newspapers have style manuals that prohibit all caps. One reason: It actually takes more time to read something that is in all caps…slows the reader down.
Same thing with Unix/UNIX. Unix isn’t even an acronym anyway.
PERSONALLY, I LIKE TO WRITE EVERYTHING IN CAPS. THE WORKOUT OF MY PINKY MUSCLES BURNS AN EXTRA 1/10000TH OF A CALORIE PER DAY. OVER A LIFETIME, IT ADDS UP.
The road to moral hazard hell is paved with good intentions.
Fed’s Fireman On Wall Street Feels Some Heat
By Greg Ip
Word Count: 2,228 | Companies Featured in This Article: Bear Stearns, J.P. Morgan Chase
NEW YORK — As the credit crisis batters Wall Street, Timothy Geithner has been the Federal Reserve’s man on the front lines. The president of the Federal Reserve Bank of New York has worried more about the economic impact of the crisis than most of his Fed colleagues and has pressed hard for aggressive action, say people close to the central bank.
Hey! All those dinners at Sparks Steakhouse don’t just pay for themselves, you know?
Let’s hope that he doesn’t meet the same end, metaphorically speaking, as Paul Castellano.
Apparently, anyone who dares to question the Fed’s infinite financial wisdom is a bastard. We now have government of the people by the financiers for the financiers.
‘As criticism of the rescue swirled, the president of the Dallas Fed, Richard Fisher, sent Mr. Geithener an e-mail in Latin: “Illigitimum non carorundum,” along with his translation, “Don’t let the bastards get you down.” Mr. Geithner replied that his grandfather had the same slogan on his kitchen wall.’
“carborundum” (I cannot spell when my blood pressure is boiling…)
“Apparently, anyone who dares to question the Fed’s infinite financial wisdom is a bastard. We now have government of the people by the financiers for the financiers.”
*****
Because there are so many serial bubble riders in the Alt-A Bay Area, who essentially only favor those kind of economic events… and realize such is provided willfully by Fed-Wall Street (duopoly) policies, I am treated like a “bastard” when I question “the Fed’s infinite financial wisdom.”
There’s still belief that going toward ZIRP is the answer. And it’s seen as heretical to suggest the Fed should be doing anything but monetizing toilet paper, flushing the dollar and backstopping speculative behavior.
PB:
Or more accurately, “grind” you down.
“At some points we [at the New York Fed] were the accelerator, at other times the brakes.” from the article
I wonder when Mr. Geithner acted as a brake. Must have had cheap pads that didn’t work.
The way the economy is currently running, I get the feeling the brake and the accelerator are simultaneously depressed…
Are tehy in the midst of finding a gear too, or is that just a bearing going?
How are Fed efforts to restart housing price inflation against the backdrop of an unprecedented glut of vacant homes working out?
From the article:
‘On April 3, Mr. Geithner, with dark circles under his eyes, appeared before the Senate Banking Committee with Mr. Bernanke, SEC Chairman Christopher Cox and Treasury Undersecretary Robert Steel to explain the action. “An abrupt and disorderly unwinding of Bear Stearns,” he said, “would have added to the risk that Americans would face lower incomes, lower home values, higher borrowing costs for housing, education, and other living expenses, lower retirement savings and rising unemployment.’
I guess as long as the nominal value of all the prices the Fed is trying to support keeps going up, we will all be just fine?
Sorry — too tired to write well today…
“As long as all the nominal prices the Fed tries to support keep going up…”
Lots of Gloom and Doom Out There
Took the fetching Ms Lip’s 98 Caravan (185k miles) in for some routine maintenance and happened to notice all of the brand new pickups in the lot. You can get a brand new quad cab Ram pickup for less than $20k now and soon they’ll be even cheaper.
Contractors are cutting their own throats to get some work, thereby contributing to the # of pickups in the Dodge sales lot.
Buddy of mine owns a small roofing company and he says he didn’t get any calls after the recent rain, which is amazing.
Everyone is hoping that this is over soon, but it seems we’ve just begun. IMO we’re in the third inning of this thing and for all I know we may go into extra innings.
My little town had a wind storm last week. Tore some roofs loose and a lot of siding and window damage. Within an hour after the wind stopped there were contractors driving around the neighborhoods handing out business cards. A year ago they wouldn’t even return a phone call.
Same thing happened in Windsor, CO last week after the tornado hit. The first thought that I had was that the contractors were probably on their knees saying “thank you, thank you”
Everyone is hoping that this is over soon, but it seems we’ve just begun. IMO we’re in the third inning of this thing and for all I know we may go into extra innings.
Upthread there are anecdotes of the various and sundry predicaments that the FBs in our lives are experiencing. Although most of us may have not made the same RE/housing mistakes, the ripple effects will extend far and wide.
Took the fetching Ms Lip’s 98 Caravan (185k miles) in for some routine maintenance and happened to notice all of the brand new pickups in the lot. You can get a brand new quad cab Ram pickup for less than $20k now and soon they’ll be even cheaper.
While pickup sales have dropped off a cliff, it should be noted that Dodge has an all-new model coming out for the 2009 model year. The factories will be shutting down for a few months while they retool for the new truck, and Dodge is going to be stockpiling trucks on dealer lots so they have something to sell while the factory is shut down.
Ford is in the same boat, as they also have a brand-new design coming out for 2009.
The real question is how well the two manufacturers have been forecasting demand and whether the stockpile is going to be too large or just right.
Ford has been cutting production for more than a year now and just recently made more cuts, so my guess is that they’ll be closer to OK. I haven’t heard anything about Dodge/Chrysler recently. Their history of vast overproduction in the last few years doesn’t bode well for them!
I’ve seen adds for touring Town and Countries that are new 2006 models for 16-17k w 80k warranty. A little over a year ago they wanted 23k which was about 5k off their wish price. I read an article that they were warehousing these cars and reporting them as sales at one point and now they have to get rid of them.
R.O.I.
By BRETT ARENDS
You Don’t Have to Be Rich to Own a Home on the Beach
May 29, 2008 8:41 p.m.
Miami Beach, Fla. –Yes, this state is on sale. But how cheaply can you get a weekend home?
After all, not everybody is in the market for a multimillion-dollar residence, or is ready to spend $1,000 a month on condo fees.
So what kind of deals are out there now for the rest of us?
The answer is that for less than $200,000 you can now get something pretty reasonable, on or near the water.
Yeah, it’s “only” $200K.
What fraction of the US makes a salary of more than $65K?
What fraction of the US has liquid assets worth $200K and would willingly deploy them on a “beach condo” (rather than renting it by the month each year)?
Tune back later for the answer to these exciting questions.
I have tried to advise house-hungry friends and relatives who make over $65K to keep their powder dry during the correction, but nobody has taken my advice (e.g., my sister and my wife’s brother both bought homes in the $200K+ range which are likely to be available 10 pct cheaper this time next year).
Preach!
That’s what we’re waiting for.
PB - I *try* not to say anything anymore. It’s hard, though, cause I’ve got a big mouth.
My sister doesn’t believe me I say her house is significantly overpriced (VT has slowed down alot in the last year). She wants to relocate but won’t be taking less than $x - she’ll rent it out first waiting for the market. *sigh*
I had conversation this week where at least two of the people looked at me like I had 2 heads when I mentioned that RE cycles in 7-10 year periods and that RE will be cheaper in the next few years. (In the context of giving advise to a potential first time buyer.)
Oh well. I guess it’s not called a “mania” for nothing.
I opened my mouth at a BBQ a couple of nights ago, when another attendee was talking about the great deal he got on a previously-unaffordable coastal SD home. He thereafter accused me of making all the muscles in his body tense up, after which I tried to calm him down with my best impersonation of a used home sales person explaining why now is a good time to buy.
Which muscle? Was it the sphincter?
He thereafter accused me of making all the muscles in his body tense up
You have the strangest effect on people, Professor.
I’ve been in that situation a few times in the past year, they’re all Pavlov’s dog, looking for reinforcement that they made the right decision…
I just tend to give nods of approval, and smile as they do a vocal see me-dig me, on me.
Vermontergal,
The herd of retards from metro areas that stampeded into VT, 01-06, are now trapped in the OK corral. There is no escape. They created this monster, now it’s time to look at the rip snortin’ bull, dead on.
yeah, I know that problem; my brother just purchased a home in Spain despite all my warnings. At least it is not on the Costa where they will soon have trouble giving away homes for free.
The best part of reaching bottom will be having $200K (or it’s inflationary equivalent) be a lot of money again.
What fraction of the US makes a salary of more than $65K?
So true. The Coloradoan had a story yesterday in the business section labeled “good news”. Apparently a call center is going to hire 300 bodies in Ft Collins, at the princely wage of $9/hr. I guess they can afford a 60K house. Oh wait, there is no such thing out here….yet.
Weekend home for whom? This isn’t at all like some areas, where people can drive a couple of hours into a different climate in the mountains. Almost everyone that lives in South Florida is already less than 10 miles from the beach. I’m one mile, and certainly wouldn’t buy a tiny expensive condo to save 5 minutes of driving. It’s maybe one degree cooler at the beach. People in Orlando might want a beach place, but they’d choose the much closer areas to their East. Maybe the alligators in the middle of the Everglades are looking for something? Or is he suggesting that people will spend $2,000/month/person on weekend plane travel from NYC, for a tiny condo 3 blocks from Miami Beach?
Also - someone needs to tell Brett “fresh water canal” is not the same as close to real water. It’s a glorified drainage ditch/mosquito farm.
I can’t believe he used Cape Coral as an example of any kind of bargain. Some nice research work there.
“for less than $200,000 you can now get something pretty reasonable, on or near the water.”
That’s pretty cool. But can you get insurance?
Attention traders: get your Ford stock while you can for an easy flip:
http://online.wsj.com/article/SB121214664647432457.html?mod=hpp_us_whats_news
Got a bit last week and added some ATM July calls yesterday. Few things are as much fun as an immediate return on investment.
Or perhaps not. LOL.
Blano, my fellow rust belt friend, 20MM shares is chump change. If 200MM shares are tendered, the purchase would involve only 10% of your shares tendered. You are then stuck with 90% of your shares in a falling market. From a short view this is a great shorting opportunity, however, Mr. Kerkorian could possibly do a Henry Singleton (CEO of Teledyne, 70s and 80s) and glom every share tendered. Mr. Singleton tendered for 5% of Teledyne at $80/share. 15% was tendered. Mr. Singleton took it all and the stock opened at $95/sh.
It is rarely wise to play in the open fields with elephants at war.
Hoz, we all know how dumb it can be to run with that guy.
Very interesting, hoz. I’ll have to ponder that one a while.
Myself, I’m not going anywhere near it.
Incomes and spending both slow in April
http://biz.yahoo.com/ap/080530/economy.html
The Commerce Department reported Friday that consumer spending edged up a small 0.2 percent in April, just half the 0.4 percent rise in March. Excluding inflation, the performance was even weaker, showing no gain in spending after excluding price changes.
Incomes were depressed because private wages and salaries fell at an annual rate of $18.2 billion in April, the biggest setback in a year. This weakness comes in part from four straight months of job layoffs, starting in January.
Markets respond fovorably to the good news. I’m missing something here, as usual.
Don’t miss the chart (with tabs) which is linked to this article. The impression one takes is that there was perfect correlation between the Libor and default insurance rates until the onset of the so-called credit crunch last August. After that the relationship between reported overnight borrowing rates and overnight borrowing rates reported by some banks (Citigroup, J.P. Morgan, HBOS, UBS and WestLB) breaks down. By contrast, the relationship remains tightly intact for the borrowing rate reported by the Royal Bank of Canada.
I find this data quite interesting, but am unconvinced by the claim that this constitutes evidence of misreporting, as other possible explanations could explain the data. For example, suppose some banks were able to borrow overnight at below-market rates in rationed quantities. This could drive a wedge between the overnight borrowing rates reported by such banks and the market price of default insurance. (Not saying this is happening; just trying to come up with another explanation for the WSJ data that does not involve inaccurate bank reporting of overnight borrowing rates.)
Under Watch, Libor Rises
Rate Hits 2.68%
Ahead of Report
On System Accuracy
By CARRICK MOLLENKAMP and LAURENCE NORMAN
May 30, 2008; Page C2
LONDON — The benchmark London interbank offered rate, or Libor, rose Thursday in a move some analysts attributed to new concerns about the rate’s accuracy.
After that the relationship between
reported overnight borrowing ratesthe market price of default insurance and overnight borrowing rates reported by some banks (Citigroup, J.P. Morgan, HBOS, UBS and WestLB) breaks down.If there is no perceived accuracy to any rate or rating world-wide, financial anarchy can’t be far away…
My personally hunch is that the competing hypotheses of bank misreporting and massive policy distortions creating a disequilibrium wedge between overnight lending rates and default risk premiums cannot be tested with their data.
http://www.youtube.com/watch?v=b0dPRx5XkGI
I think they better worry about interbank rates that are about 1% below official (manipulated) inflation figures … sure sign that something is wrong.
The graph is screaming regional recession, but the analyst who produced the data somehow cannot quite hear it…
Slowdown is forecast to go into next year
USD economist: Region might dodge recession
By Dean Calbreath
STAFF WRITER
May 30, 2008
Online: Join staff writers Lori Weisberg, Roger Showley and Emmet Pierce at noon today for an online chat about real estate. They’ll answer your questions about the housing market and related housing and development issues. Go to signonsandiego.com/chat/ to sign in. You can also post your questions before the chat.
Never mind that these folks have been six months or more behind this blog in telling the story of the housing collapse all along… they will nonetheless answer any and all your questions.
The Gin they serve in Tijuana-adjacent is 200 Proof, and causes extreme delusions…
“By the end of the year, everyone’s going to have zero or negative job growth except San Francisco and Santa Clara County, which are benefiting from demand for high-tech,” he said.
*****
Anybody got delusion?
Why, yes.
Apparently… a national recession is not going to effect San Diego?
And nor will it impact San Francisco and Silicon Valley?
GLOBAL ECONOMY
British confidence plummets
As consumers brace for a sharp downturn, confidence in the economy hits lowest level in more than 17 years.
Grim outlook in Japan
Economic data show household spending down, weakening industrial production and rising unemployment.
Retail data show Germany feeling pinch
Inflation pressures underscore expectations ECB to remain on hold
By William L. Watts, MarketWatch
Last update: 7:47 a.m. EDT May 30, 2008
LONDON (MarketWatch) - After standing resiliently in the face of a U.S. led economic slowdown, the German economy showed signs of strain Friday when the country’s statistics agency reported a surprise drop in April retail sales.
It’s all contained, folks. Nothing to see here, move along.
Question for deflationistas; Where’s the deflation?
euroflation:
May 30 (Bloomberg) — European inflation accelerated faster than economists forecast this month as oil prices jumped to a record, adding to what European Central Bank President Jean-Claude Trichet has called policy makers’ “biggest challenge.
http://www.bloomberg.com/apps/news?pid=20601068&sid=a_nSD_lkzIQY&refer=economy
vietflation:
Vietnam’s accelerating inflation is threatening to morph into a full-blown crisis, and it provides a warning to other Asian countries trying to tamp soaring prices.
The government said this week the inflation rate in May was 25.2% on an annual basis, up from 21.4% in April and 14.1% in January
http://online.wsj.com/article/SB121206638209529225.html?mod=rss_whats_news_asia
baltiflaton:
Last year Elcoteq, the Finnish electronics contract manufacturer, increased its Estonian salaries by 15 per cent but still had to bring in Hungarian workers to staff its Tallinn plant. This year Elcoteq is putting 300 of its 2,200 workers on compulsory leave because wage costs have made the production of mobile phone components uncompetitive at the plant.
http://www.ft.com/cms/s/0/e059bfba-2db2-11dd-b92a-000077b07658.html
“Where’s the deflation?”
That’s a no-brainer: The deflation is in U.S. housing prices (not to mention those of many other developed nation economies…).
That’s asset price deflation. We had that in the 70’s too (stock market).
Asset price deflation makes consumer price inflation that much more painful, as J6P gets poorer though both his consumption and his house.
BTW, I couldn’t help noticing that gold prices have recently deflated by over 10 pct…
I couldn’t help noticing you didn’t post the COMEX quote today. Tsk, tsk, your agenda is showing.
I have no agenda…just the facts, ma’am.
But I do notice with interest how every time the fact I quote is related to falling gold prices, you feel the need to throw a punch. Your responses are highly reminiscent of those from the “real estate always goes up” crowd circa 2005.
Tsk, tsk, your agenda is showing. So is yours.
But are supporting prices $200 an ounce higher since last summer. Printing money doesn’t help the gold price.
Still don’t get what all the fuss about deflation vs. inflation is all about. Seems pretty obvious that an economy does not have to purely either.
Loose credit/devaluing money/food supply issues =inflation and popped bubble assets/discretionary stuff that no one has money for=deflation. Welcome to needing more money for stuff you need (except housing, where inflation has been built in for the next decade if it flat lines today) and stuff you want being cheaper with each passing moment.
By the way, the deflation in the article, in the sense of falling prices, was in mobile phone components, which can obviously no longer support the wages of the workers.
Gold is up closer to to 250 from last year:
5-30-07: $639,
5-30-08: $883.
Don’t tell prof bear though, he is hoarding fiatscos.
As for the mobile phone components, they just get manufactured somewhere else. Prices won’t come down because the input costs are rising.
A stellar underperformer in an asset driven economy:
Petrobras (PBR) May 31, 2007 $27.05 May 29, 2008 $71.70
Vale (RIO) May 31, 2007 $22.31 May 29, 2008 $40.52
Cobalt (base metal) May 31, 2007 $29.50/lb May 29, 2008 $46.80/lb
Hoz,
Brazil looks like a bubble. Are you still in Vietnam? Lots of nasty news from there lately. Those emerging markets can turn on a dime. And platinum makes your return on cobalt look weak.
I don’t buy gold for performance, but it is a nice bonus. For example:
http://www.chartoftheday.com/20080530.htm?A
Everything looks like a bubble, lol
I am still in Vietnam, Korea and the Middle East.
Like the guy jumping off the Empire State building -’so far so good’.
I do not belittle gold, I just do not like the metal because it is used to manipulate markets by governments. Iron ore, Cobalt, Rare Earths and Platinum are not easily manipulated .
ps. I wish I was not in Vietnam and had more in the middle East. I have never had all winners.
assets/discretionary stuff that no one has money for=deflation
inflation/deflation refers to the money supply not prices. This is important when you consider that advancing technology should generally push prices down (better production capabilities, etc).
So, for example, it’s possible the price of a certain type of computer goes down while being in an inflationary environment. In that case, without inflation, the price would have dropped even further. So let’s say a computer is $1000 today but drop to $950 with inflation of the money supply but without inflation it would have dropped to $900. That also points out one of the problems with measures of inflation. It doesn’t count lost price decreases.
BTW, I couldn’t help noticing that gold prices have recently deflated by over 10 pct…
That’s a signal to buy more gold.
Deflation is in flat wages.
But plenty of over priced condos and townhouses. Wife and I are going to take a look at some tomorrow morning on the bay front. It’s fun and free, tease the sales people.
The average salary in central Tokyo is around 65k but the average home here is about 700k and that’s for 700 square foot.
They do it because of the spectacularly low interest rates. I can get what they call a semi variable 10 year loan for 1.1 (it never goes above 1.6) and then 2.8 for the next 20 years.
This is the only way they are doing it.
10-12 times income is common here for housing purchases among the younger generations.
Japan loves life time indebtedness. Japan not land of the rising sun rather Japan land of the debt slave.
The average salary in central Tokyo is around 65k but the average home here is about 700k and that’s for 700 square foot.
Caveats: I’ve never lived in Japan, but appreciate the culture.
My understanding of Japanese real estate is that there is no resale market for housing. They have a very distorted market where labor and government conspire to keep razing and building. Add in high materials costs and you get a high construction/transaction cost. I agree the only reason the Japanese consumer can afford it is ZIRP.
Wow, looks like the world media are in collusion.
Headline U.S. stock market indexes are falling up again this morning…
This report is allegedly bolstering the stock market. Can someone explain how a 0 pct increase in real incomes is a bullish indicator for a consumer-driven economy?
ECONOMIC REPORT
Inflation wipes out income gains in April
Spending is flat after adjusting for 0.2% increase in prices
By Rex Nutting, MarketWatch
Last update: 9:15 a.m. EDT May 30, 2008
WASHINGTON (MarketWatch) — Inflation erased all the gains in disposable personal income in April, while U.S. consumer spending was flat after adjusting for higher prices, the Commerce Department estimated Friday.
Nominal personal incomes, nominal consumer spending and consumer prices all increased 0.2% in April, the government said.
The report suggests the economy weakened further in the second quarter of the year even as the first tax-rebate checks began arriving.
L-t T-bond yield volatility
This is friggin unbelievable!
Charges of Insider Trading for a Wall Street Luminary
By LOUISE STORY
Published: May 30, 2008
“John F. Marshall spent decades teaching at business schools and watching his students parlay his lessons into fortunes on Wall Street. But when he and another professor reached for some of those riches themselves, events took a startling turn, the authorities say.
Dr. Marshall, a retired professor at St. John’s University and a fixture on the Wall Street lecture circuit, was accused by the Securities and Exchange Commission in March of passing inside information about a multibillion-dollar corporate takeover to a professor at Pace University. The Pace professor, Alan L. Tucker, made more than $1 million trading on the tips in 2007, according to the S.E.C. The Justice Department has filed criminal charges….”
http://www.nytimes.com/2008/05/30/business/30insider.html
Greedy Profs.
Did you see the whole story? The guy who was tipped off bought stock and options in an Ameritrade account? Am I the only one amused by that?
TxChick…..why is that Ameritrade part so funny…?
THx.
Easily traceable. There are other account types that can be set up over seas that could have sheltered the transactions.
thank you
I’ll bet you the idiot got the info, ran out and opened the Ameritrade account, and then did those trades and nothing else. Why not walk into a bank with a shotgun to rob it wearing a t-shirt wit your name and address on it?
I am just stunned that the greed on the street has transformed in to a lack of ethics in the schools.
Cheating is rampant. An increasing amount of effort gets sunk into trying to mitigate cheating. (I cannot recall anything whatsoever similar when I was in college — there were a few rogue cheaters, but nothing systemic like today.)
GS,
I personally do not believe cheating is rampant on the street, the risk reward is not great enough to justify cheating. All it takes is one cheater to throw the system into lockdown.
If you are in a position to ‘know’, then you are already making more money than you can reasonably spend. The vast number of rumors circulating would swamp a successful trader - to much white noise.
There are so many ways to make moneys (many riskier than others). Mr. Buffett makes moneys. His recent trading history is a joke. Long Wells Fargone, long Bank of America, short S&P500 puts - he will be right eventually, but an investor cannot afford those risks. (Mr. Buffett could have sold an S&P 500 dividend swap, collected 6.5B and participated on additional revenue increases from dividend growth - all with less risk than selling Puts.)
Hoz –
For clarification, I was talking about cheating in the classroom, not on “The Street.”
The R/R for cheating in schools may well be justified. sad
We used to fear that college athletes would throw games, but now it’s the professors you have to worry about…
I don’t know for sure whether this is local, but heard on the local radio this morning.
Several teachers eased out, fired, threatened with non-certification etc., for trying to flunk the high schools quarterback. (apparently he showed up 3 out of 30 days.)
Luckily for him, he was transferred abruptly out of the first teachers class. Totally unrelated no doubt was the public shoving match between the Principal and a new teacher.
Move the chains.
I think it is possible the cause-effect model is the opposite:
“lack of ethics in the schools” transforms to “greed on the street”.
U.S. Chicago PMI contracts for fourth straight month in May
By Greg Robb
Last update: 9:53 a.m. EDT May 30, 2008
Dupont is raising prices 20% next week.
36 retailers closing stores:
From Foot Locker and Home Depot to Ann Taylor and Linens ‘n Things, we round up more than 30 retailers that are closing (at least some) of their doors. Are some of them your favorites?
http://money.aol.com/special/retail-stores-closing-doors?icid=1615984946×1203153223x1200308179
There are more than 36 retailers closing in Southern California.
One of the stores the article mentions is the Disney pull out of The childrens Place.
The Children’s Place Services Co. is laying off 268 employees at 443 S. Raymond Ave. in Pasadena on May 27.
blue horseshoe loves deregulated power:
Wholesale power prices in Texas have surged to new heights, confounding market officials and worrying regulators who see early signs that the situation could destabilize the state’s deregulated electricity markets.
The spikes in wholesale power prices — ominous and so far unexplained — could take a big toll on both power providers and electricity customers if they persist. The state’s utility commission held an emergency meeting Thursday, “which shows the level of concern,” said commission spokesman Terry Hadley.
http://online.wsj.com/article/SB121210503608831079.html?mod=hpp_us_whats_news
I wonder how you can get your electric bill down to around a Dollar?
Isn’t deregulation great? Sure is more competitive. And lots cheaper to the end user too. /sarcasm off
I hope taxmeupthebooty and txneocon have a long sweaty summer.
Sweaty Betty. lol.
here’s a little something for you from Rush. I know you probably missed his show yesterday
The guy that published Scott McClellan’s book is a guy named Peter Osnos. He is a huge, far-left liberal. His publishing house is affiliated with The Nation magazine. His company has also published The Prosecution of George W. Bush for Murder. This man’s name is Peter Osnos, and so far six books have been bankrolled by George Soros. So there is a George Soros connection to the Scott McClellan book.
Of course! McClellan was a leftist plant, probably a Soros stooge from the beginning. Those Marxists must be pretty crafty to put one over on our Dear Leader. LOL.
McClellans a liar! It’s Peter Osnos fault! It’s a terrorist plot! It’s anything but the truth about your beloved! lmao.
Cmon Txchick, I’d think an attorney would come up with a better retort than to quote Rash. You did say you are/were an attorney didn’t you? Honestly, there is little you can come up with at this point in light of the fact that their top inside guy is a convicted felon 4 times over…. why do you bother?
I’m shocked……SHOCKED!!!
There’s far more money to be made in this country from bashing Bush than there is standing with him. ‘Nuff said.
I take a little pleasure in seeing Texas get Enron’d, quite frankly.
I pay three times the electric rates I payed in Washington state, and have to breath the stuff they call air here. Cut me some slack please
I guess we can afford you the same sentiments Enron felt towards California…
–
Greater Depression In Housing IS Here Already
David Rosenberg; 05/30/08:
“US home prices falling faster than in the Great Depression — Robert Shiller, creator of the Case-Shiller home price index, compiled a version of the index that goes back to the 1920s. Currently, nominal home prices are deflating at a 14.1% YoY rate. That is worse than what we saw at the worst point in the Depression; home prices at their worst, were falling at 10.5% YoY. And, on a real basis, the situation today is even more dire. Since the early 30s were a period of deflation, home prices declined less so on a real basis. Today, that is not the case and home prices are falling at an even faster pace on a real basis.
“House prices in freefall —
The latest data series to be released was the LoanPerformance data – the median city was off 6.5% YoY. Based on this survey, about 90 pct of the country is seeing real estate deflation. Not an environment conducive to a sustained runup in bond yields…
“Autos following housing on the down-escalator —
Despite all the incentives, there seems to have been little or no rebound from the 5% April slide in vehicle sales to a 10-year low of 14.4 million units. No wonder. Gasoline prices have surged to $3.94 a gallon from $3.60 a month ago and $3.20 a year ago. And there is a huge glut of used cars for sale now – Manheim data show a 10% surge in car repossessions over the past year to over 1.5. million units. The delinquency rate on subprime auto loans has soared to 11.6% from 6.8% a year ago.”
Since the Credit Crisis began the Case-Shiller home prices are falling at twice the Annual Rate of the worst rate during the Great Depression, in nominal terms, and more like four-times in real terms.
It is not just the housing that is tanking, the second biggest expense, autos, are doing badly as well.
Jas
Jas, do you know if there is a chart somewhere on the web of real US homeprices (inflation corrected) from 1920 or so? I would be interested to compare this with similar Dutch charts.
I wonder though how useful the numbers are given all the distortions in the CPI calculation over the last twenty years or so; as far as I know Shiller always uses the official CPI numbers to calculate real prices.
Shiller’s famous graph is inflation adjusted.
http://crapstocks.com/files/housing_shorts/nytimes_2006_08_27.html
It hasn’t been updated since start of 2006. But, take that end point just under 200 at the start of 2006, creep it up to 206 by mid 2006, then run it back down to 172 as of last month. Then adjust that 172 down to about 158 to account for 2 years of inflation(I used end of 2005 to end of 2007).
The correction is only half-way done (assuming normal end-point). More in some places, less in others. Tack on a healthy OVER-correction due to massive oversupply in virtually every market.
–
As best as I can see from the graph, the real home prices fell from 73-74 to 68 over the first 3-year period (the worst economic period, by far) of the Great Depression.
Jas
I’ve always wondered that too. The big drop was 1910-1920. Checking CPI inflation calculator, something that was $1 in 1910 cost $2.22 in 1920.
So, it seems that during that time, houses were rising at 2/3rds the cost of everything else. (deflating in real terms)
In the Great Depression, they were just deflating pretty much at the same pace as everything else.
Now we are seeing 14% nominal drop with 4% (yeah right) inflation = 18% real rate of drop. Unprecidented.
interesting, very different from the Dutch chart:
http://www.nrc.nl/achtergrond/article816285.ece
there are some similarities e.g. the drops around WWI and II and the peak around 1980 (after the oil crisis), but the fluctuations in Netherlands seem to be many times bigger (more than a 6-fold increase between bottoms and tops, while the US barely gets to 3-fold). Maybe because the Dutch economy historically was more speculative than the US economy?
Okay… just went and checked the CPI for 1915-1920.
12%, 18%, 20%, 14%
Isn’t this pre-fed? I thought fake money was the cause of all inflation.
So, when we hear about house prices falling during teh Great Depression, not any faster than everything else was deflating (-2%, -9%, -9%, -5% for 1929-32).
We truely are in unprecedented ground now. HUGE drops in house prices on top of inflation.
“…of the worst rate during the Great Depression, in nominal terms, and more like four-times in real terms.
Four times in real terms? Careful, Jas, that sounds like an admission of inflation. You better chew your words over as carefully as a deflationary pizza. And why don’t you post links to your quoted material?
–
I have said many times that we do have 3% plus and minus 2% “controlled inflation” regime for the past 20 years or so. My forecast is that once we are 12-15 months into the current recession we should start to see out right deflation in the US. The inflation rate should peak 4-6 months into the recession. It may well be during May-June of 2008.
More importantly, we had very high rate of deflation in 1931-32. Thus, the real home price decline during the worst years of Great depression was more like 5-6% and currently it is 20-25% Annual Rate.
Jas
Didn’t the Depression bust actually start in selected areas like the Great White Goddess of Florida prior to the crash, like in 1927? That would explain the Phony-War feeling right now.
Just returned from my morning walk in the “toniest” area of The Middle of Nowhere. I actively counted realtor listed homes for sale - 14, empty, overgrown homes with no signs - 6, “for sale by owner” - 3. This is about 20% of our “nice” neighborhood folks.
Yet the realtors around here are STILL insisting that “it’s different here” despite basically admitting that the 250K market is dead because there’s no-one qualified to buy them (I’d say the over 200K category falls in this description as well).
I also know that several of the homes along the less “nice” fringe (above 150K) areas are for sale yet have been taken off the market and rented. It’s just insanely surreal around here (not just the neighborhood, the town as well)…
Less than 100 families in our town had adjusted incomes of over 100K according to 2001 BLS stats, yet there are HUNDREDs of homes that fall into the 250K + category. There’s a lot of worry behind closed doors here I’m guessing.
Can I quote Neill?
“Got popcorn?”
My area has an incredible $95312 median income for a family. (Wikipedia reported 2007 demographics)
I’m still terrified of selling my hopefully > $200k house.
Sheesh - our household median income here is 31K, back in our burb of Mnpls it was 114K, yet home prices are almost identical in the “nice” areas. You don’t want to even THINK about the “not nice” areas and they’re still in the 150K range for 40 year old, 1200 sq ft, fixer upper with only a carport and a small, weed infested front lawn and a 7 pitbull, torn up back yard with a firepit full of junk. Did I mention the charming neighbors?
Pussycat: what do you think of Bobby Jindal? I really like this guy.
I’ll answer for P, maybe. I like Jindal, too, from what I’ve seen of him. He seems sharp, he seems honest. He’s even been to Washington and back to his home state, so he has a bit of experience under his belt, but a “bit” is just that, not a lot.
Thing is, he’s almost barely started his current governor’s job, and much as he might be a decent VP candidate, should the people of Louisiana, who seem to have finally got a decent governor, have to give him up so soon? There’s a lot in that state that he can fix, or at least try to fix.
Even Jindal himself says he wants to finish his current job before moving on to the next big thing — but then again, most serious potential VP nominees say that, right?
how much experience does the Messiah have?
just askin’
As much as a bush league texas governor who talks to the messiah?
tx, I think for the Messiah it doesn’t matter how much experience. If he starts with wrongheaded ideas, sixty years of experience (or six) can’t make up for that.
Oops, I think I just offended a bunch of esteemed Senators.
Senators can be offended? Are you sure?
Moody’s Implied Ratings Lab Reveals Ambac, MBIA Turning to Junk
By David Evans
“May 30 (Bloomberg) — Moody’s Investors Service has created a new unit that surprises even its own director.
“The team from Moody’s Analytics, which operates separately from Moody’s ratings division, uses credit-default swap prices as an alternative system of grading debt. These so-called implied ratings often differ significantly from Moody’s official grades. ”
Also this:
“Ambac and MBIA have raised billions of dollars of new capital so that Moody’s and Standard & Poor’s would keep top ratings for the bond insurers — and the rating firms have done just that.
“Moody’s implied-ratings group paints a completely different picture. Using the CDS market, Munves’s unit rates both MBIA and Ambac Caa1. That’s seven notches below junk and 15 below the official Moody’s rating.
“Swap traders see there’s a huge risk that Ambac and MBIA will default, hedge fund adviser Tim Backshall says. He says swap traders don’t trust S&P’s and Moody’s investment-grade ratings for the companies.”
http://bloomberg.com/apps/news?pid=20601109&sid=a0tWb0sTTgu8&refer=home
Just bought a new (used) car. All the new and used lots had very little to zero customer traffic aside from Toyota dealers. I asked every sales person about business as well as asking private sellers about interest shown in their vehicles. Toyota Prius are gone before they hit the lot, they have waiting lists. Otherwise, nothing much is moving. Lots of trucks and suvs seen as trade-ins at the Toyota dealers, being replaced by anything japanese that gets 30+mpg.
I bought a fine german luxury sedan with low mileage for the year at 35% off the asking ( “wishing”) price, and a tad over 40% under Bluebook private party value (although bluebook values have always been overly high in my experience, Edmunds true market value pricing is much closer to reality) . Other than one smarmy asshole “sales manager”, it was entirely different than my prior experiences. I avoid dealers like the plague and prefer to buy from one-owner private parties. But in this case, dealers are so hurting for business they are increasingly willing to heavily discount things to move them. Idle inventory serves nobody well.
And for the most part, the high pressure tactics and arrogance are not on display. Although I did walk off a lot in San Diego after some pressuring tactics from a kid who wanted to argue with me about some things. Car had a big ass bubble in the sidewall of one tire that had obviously been there when it was prepped for sale. They put shiny silicone “wet tire” look shit right over it. I asked why they would conciously pull something like that (putting a dangerous and/or undrivable car on their lot) when it reflects horribly on their business and would cost them maybe $100 to remedy? These guys sell 90% BMWs with a few other high end used things…a ferrari or two on the lot, couple of Benz, etc. That sparked defensive babble from salesboy and some pressuring tactics. He was midsentence when I simply turned around and walked off. A one finger salute overhead as I walked to my car was my parting gesture.
I like your anger.
Can you day rent beaters to drive to these lots in, or is it tactically better to arrive in style?
The long island sales info has been released for Q1 of 2008. Lots of negatives numbers on this report.
http://www.mlsli.com/ro/research/pdfs/lihousingdata_Q12008.pdf
Kirk Wright, convicted of hedge fund fraud, commits suicide in jail
“ATLANTA, Ga. - A man convicted in a multimillion dollar investment fraud whose victims included pro football players has committed suicide in jail, an official said Sunday.
Kirk Wright, 37, hanged himself in the Union City jail on Saturday, said investigator Betty Honey with the Fulton County Medical Examiner’s office.
Wright, of Marietta, Ga., was convicted Wednesday of leading an investment scheme that bilked millions of dollars from clients ranging from NFL players to his mother.
Wright faced as much as 710 years in prison and a fine of up to $16 million. He already had been hit with a $20 million judgment as part of a civil lawsuit filed by the Securities and Exchange Commission…”
I heard this yesterday, but I did not know the details until I read the story today. How the hell can a person hang themselves in jail in the modern prison system? Suicide? I doubt it.
In can take about three minutes to hang and kill yourself, if you do it right.
fear mongering:
OTTAWA — Canada’s financial intelligence agency warns that criminals may be exploiting Internet-based companies that convert cash into electronic gold, exposing a new front in the international effort to restrict terrorist financing and money laundering.
The Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC, says in a report these websites have “achieved critical mass on the Web” and are facilitating millions of transactions on the fringe of the international financial system - the equivalent of a Wild West where legitimate businesses, privacy-seeking individuals and criminals can mingle just out of reach of the law.
http://globeinvestor.com/servlet/story/RTGAM.20080526.wrfintrac26/GIStory/
“I sent all my money to somewhere in cyberspace, and they said they’d keep my Gold for me.”
How safe is that?
fear mongering = “Nothing to see here folks, just move on.” Riiiight.
Wouldn’t it suck if Canada or some other country to the south of it, were to confiscate your investment because they were able to tie it up with the thinest strand of evidence imaginable, to terrorism?
They are trying to delegitimize alternative stores of wealth. The government hates competition.
Some parts of housing bill unhelpful: Paulson
Treasury Secretary Henry Paulson said on Friday he has some problems with the housing rescue plan under consideration in the U.S. Senate, but will work to craft a bill that President George W. Bush can sign.
http://biz.yahoo.com/rb/080530/usa_economy_paulson.html?.v=4
Faith-based economic forecasting:
Despite data on Friday showing that first quarter growth was slightly better than previously thought, Paulson said there was still difficulty ahead.
“My message is not changing. I’m not declaring victory. I’m going to say we’re going through a tough period, that I believe growth will be relatively stronger by year end. I don’t know that, but I believe it,” he said.
Mortgage group says loan workouts hit record in April
The Hope Now group, however, said loan servicers, which collect and distribute mortgage payments, have stepped up the pace of loan modifications in recent months. Loan modifications accounted for 42 percent of total workouts in April, up from 19 percent in the third quarter of 2007.
The alliance also claims 1.56 million homeowners have received loan workouts since July 2007. Of those, 30 percent were permanent modifications.
http://biz.yahoo.com/ap/080530/mortgage_assistance_report.html?.v=1
The perfect thing for the ladies on the go! Gold plated, whoo.
http://google.com/translate?u=http://www.belowtheclouds.com/2008/05/25/peeandgo-dampissoar-i-guld/&sl=sv&tl=en
Sorry Tx and Oly and Ouro et al. Just to good to pass up.
http://www.luxurylaunches.com/fashion/peeandgo_golden_urinal_for_women.php
Better link
that thing is scary, whats that ball in the toilet for anyway ?
I’m going back to work
that thing is scary, whats that ball thingy in the toilet for anyway ?
I’m going back to work
Hoz -
LOL - I love it!! A gold plated squat toilet for women. And the goals are so noble: let’s get all these Western women to rethink their attachment to toilets. It’s right up there with world peace and feeding the hungry.
I’d rename it, though, from the Peeandgo to the Squatandgo.
http://blog.syracuse.com/shoptalk/2008/05/bitter_dreams.html#comments
Syracuse, NY–Americans told pollsters earlier this month that they don’t believe the American Dream is as attainable today as it was eight years ago.
The poll conducted by Zoby International for The Marlin Co., a workplace communications expert, showed that three quarters of U.S. workers say they don’t believe the American Dream of a home and financial security is attainable.
The poll also noted that 45 percent admit to being “bitter” because the political system has caused the deterioration of their economic circumstances.
Consumer confidence falls to a 28-year low…
…and the stock market rallies. WTF?
http://www.msnbc.msn.com/id/24891313/
If consumer confidence is at a 28-yr low, the economy must have already bottomed out, so blue skies lie in wait for stock market investors.
peter schiff:
http://www.safehaven.com/article-10378.htm
There are on $2 trillion dollars in circulation. This represents 1% with the rest credit. I figure either all my $ goes in gold or I physically go to cash. ($100 bills). I have actually been afraid to go to all gold. What is the $number I have to keep it under each time $9,999 etc or $9,000? Since I am not making $ sitting in treasuries. What happens if i take it out all at once? If every American went to get their money out they would only be able to get 1cent for every $100 dollars. At least I’d have my $s and gold could be headed to $800 or $700 now. You know the old saying a bird in the hand… . The crummy 1% isn’t the issue when were talking safety. Someone here said this a week or 2 ago jokingly, but I’m being serious. I have had a bad feeling in my gut since then. If you are going to panic it is better to panic first. At least I’d have it at the bottom of the depression. Prechter says all you do is not make $ on it and you need to store it in a safe place. Thanks in advance for any assistance.
The consolation is that the real “bad times” may not start until 2011. That gives you a chance to put 50% in gold and 50% in T-bills as a hedge with your spare $. Or mix it with high yield quality stocks.
My dad told me back when I was in high school in the 1970s that the U.S. will have another “Great Depression.” A lot of pundits are saying this right now. Did a lot of pundits predict the crash of 1929 in the 3 years prior to it? I doubt it.
On the other hand, Harry Dent goes into all sorts of gyrations saying that economic depressions occur in 80 year cycles. 1929 + 80 = 2009. So he’s still standing by with 2009 when the next Great Depression starts. He’s maintained that position since I read his book in 2000. But he was wrong in his prediciton of a big tech stock bubble this decade.
My respect for Harry Ried just went up a notch…..
——————————————————————————-
(Harry) Reid also lobbed some harsh rhetoric at former Fed Chairman Alan Greenspan, whom he called a “fraud,” the “J. Edgar Hoover of the financial world,” and, as he has in the past, “the biggest political hack in Washington.”
http://www.huffingtonpost.com/2008/05/30/reid-superdelegates-know_n_104324.html
Something in today’s New York times made me laugh. Look what this Republican(!) said in response to Governor Patterson’s recent order about recognizing same-sex marriage.
Serphin R. Maltese, a Republican senator from Queens, said he was puzzled by Mr. Paterson’s decision to move unilaterally on the same-sex marriage issue with only weeks left in the legislative session and other complex measures, like aid to homeowners who face foreclosure, remaining on the table.
“We’re going into a month when bipartisanship and cooperation is important,” Mr. Maltese said. “And this is at best divisive and distracting.” He added, “The least that should have been done is to wait until we are out of session.”
So this Republican senator thinks handing out money to specu-vestors is the most important thing he can do for the people he represents. You’d think a Republican’s opinion would be simple: You entered into a contract, you should be held to it.
Senator Maltese also wants a gas tax holiday, and is fighting against rent control in Glendale, Queens. Better to pour money on our Worthy Underwater Homeowners and SUV drivers, than disgusting renters! (Not that I like pouring money on anyone….)
quatro banco
whilst you are enjoying happy hour, the fourth of the year el fold’os.. First Integrity of Staples Minnesota got the FDIC default pgae update. Dont drink and blog.
thanks ben, I thought you were holding that one back….
I just make shit up.
go___ yourself.
Info here.
I was just re-reading Barack H. Obama’s tax plan. (I’m a masochist, I guess).
Something struck me on this re-reading. Either Obama has never actually read the tax forms (he doesn’t even need to read and understand the tax code, just the forms that come with the 1040), is too stupid to understand them, or is in the pocket of the R-E industry in an effort to inflate house prices.
He says:
Owning a home is the culmination of the American dream that so many Americans work so hard for. The tax code is supposed to encourage home ownership with a mortgage interest deduction, but it goes
only to people who itemize their tax deductions. Like so much in our tax code, this tilts the scales toward the well-off. The current mortgage interest deduction excludes nearly two-thirds of Americans who do not itemize their taxes. Barack Obama will ensure that anyone with a mortgage, not just the well-off, can take advantage of this tax incentive for homeownership by creating a universal mortgage
credit.
I’m overlooking his fundamental, false, premise that the tax code is supposed to encourage home ownership. (The tax code should be to collect taxes needed to run the government!)
He makes his mistake, showing his ignorance and stupidity here:
Barack Obama will ensure that anyone with a mortgage, not just the well-off, can take advantage of this tax incentive for homeownership by creating a universal mortgage
credit.
I have news for you, Barack: The “well off” that you detest so much CAN’T TAKE ADVANTAGE OF THIS TAX INCENTIVE. Currently, it starts to phase out after $150K of gross income.
It would be nice if Barack Hussein Obama actually bothered to read a 1040 form and the instructions before writing his tax plan. He obviously didn’t.
You don’t think they pay the staffers enough to know this from experience, do you? I pore over the tax forms and instructions but only those that pertain to my situation (well under the $150), so I wouldn’t have noticed that either. I assume it is effective, and sleazy.
It’s nice though that you are assuming he isn’t trying to sneak himself and other wealthy authors a tax cut.
It does not matter - 1% of Barack’s supporters care about what he stands on the issues. The other 99% are wild about him because he is for “change.” Karl Marx was a man for change too.
Karl Marx was a much better economist than Barack Obama.
Apparently Toronto, Canada is the condo king of North America. I like his quote that 75,000 people a year are going to moving into downtown Toronto for the next 20 years. That’s 1.5 million people !
http://www.financialpost.com/story.html?id=552055
Meanwhile, Ontario is in recession because of all the jobs lost in the auto sector.