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Please don’t unpeg your currency or we’re toast,” he added on the side.
This is just getting too amusing for words.
Mighty fine capital you have here, he added. Be a shame if anything should happen to it.
Having oil denominated in euros would be much more damaging to the US economy that currencies becoming unpegged. In my opinion, its inevitable that at some point in the near future (within the next five years or so), the Saudi riyal will be unpegged from the dollar. The two economies are simply moving in opposite directions and likely will continue to do so indefinitely.
I also wonder… might it might be advantageous for the unpegging to occur when commodity speculators have already staked out very aggressive positions? There is thought to already be a 50%+ premium from speculators because of the crude price–how much further out will commodity speculators go?
I’ve read reports that about $30 of the current petro prices are speculation and the slide of the dollar. If the Fed raises rates enough, oil should slide back towards $100 bbl. But it would keep increasing because of demand towards $200 bbl, only much more slowly.
Having oil denominated in euros would be much more damaging to the US economy that currencies becoming unpegged.
Oil is already denominated in euros. And pounds. And Swiss francs, yen, etc.
Just like gold. There is no fixed peg of any currency to oil.
It makes no difference which currency you use to denominate a commodity, as long as it’s convertible. Oil is just quoted in dollars for convenience.
Oil, like any other commodity, is sold for whatever currency is mutually convenient for buyer and seller.
Moves by Venezuela and Iran to quote oil in something other than dollars are just grandstanding with no concrete impact.
Thank heavens, someone made the obvious argument.
As long as oil is denominated in a sufficiently liquid, freely traded unit (and it hardly matters what), there will be a service provided to convert it to a different unit (for a fee, naturellement) even if that different unit is NOT liquid and NOT freely tradeable (that’s what the fee is for!)
The point is not what oil is denominated in. The point is who’s willing to hold the excess dollars that the US is force-feeding the world daily, and what do they hold it in.
We should denominate oil in Jack Daniels. That is our true national treasure.
The relationship between the role of the dollar, the US deficit, and oil is a bit more complex.
I would suggest checking out “The Hidden Hand of American Hegemony: Petrodollar Recycling and International Markets” (1999) by David Spiro. William Clark popularized the idea, but for money Spiro is the authority on the subject. The text assumes an intermediate understanding of macroeconomics and political economy, but should be accessible to the non-academic.
Saudi-oil is sold in U$ dollar, nothing else will do. Some producers are increasingly taking other currencies as payment, like Iran, Venezuela and Russia.
And Mercedes Benzes are sold in Euros. How the Euro bloc can sell goods to the Saudis and buy oil from them, without any actual dollars changing hands, is left as an exercise for the reader.
There is a subtle, yet extremely important, point that is missed. What it is priced in is somewhat unimportant. What goods are accepted in exchange for oil is extremely important.
If OPEC only accepts Fed Reserve Notes in exchange for their oil, that will create demand for the notes. It will almost create the situation where debt from the Treasury, used as a backing for the notes, will become irrelevant-until of course someone with a large supply of oil begins to exchange their oil in anything OTHER than Fed Notes.
An example. What effect would there be if the US Treasury said they will no longer accept notes from the Fed for tax purposes? Would their be no effect? Aren’t the Euro and Fed Notes-or many other currency-fully convertible? Of course they are. However, if I can only extinguish debt with a particular currency, or if I can only buy certain goods that I must have, I am better off obtaining those notes directly from an exchange versus converting them later which will involve an additional fee for the service provided.
The US consumes approximately 20 million barrels of oil per day. At $100 dollars a barrel, that is 2 billion fed notes per day.
If I had to have a Mercedes Benz, and the only currency I could used to purchase one was the Euro, I would be better off to get paid directly in Euro at the spot price versus a quoted price from a broker/exchanger. If the world had to have Benzs, and Benz only accepted X currency, one should be able to see the distinct advantage that a bank would have if they could get Benz to only accept their currency.
Does it matter what the largest producers of oil in the world will accept (not price it in) in exchange for their product? You bet it does.
Then look and see the impact of Iran not only accepting other currencies, but no longer accepting Fed Reserve notes for their oil. Important is an understatement.
Imagine what the impact would be if OPEC suddenly said they will only sell their for Euros. Do folks think that suddenly our deficit would matter?
Saudi Arabia oil is priced in dollars and can be purchased in any fungible currency. It does not have to be paid for in dollars.
Nope - the $ is still the currency of choice for oil sales - which is the only reason it has any support at all.
[Note Iraq switched to Euros before we invaded]
“Iran is pushing OPEC to shift away from pricing oil in dollars and instead to a basket of currencies that could include the euro. The Islamic Republic is already requiring its customers to pay in euros or yen, partly to avoid a tightening financial squeeze orchestrated by the U.S. But this is largely a symbolic gesture because the price of its oil is still based on dollar benchmarks.”
http://www.businessweek.com/globalbiz/content/nov2007/gb20071120_087338.htm?chan=search
“Oil, like any other commodity, is sold for whatever currency is mutually convenient for buyer and seller.”
Nope.
“The other part of it is oil is bought and sold in dollars and one analyst told me today if the dollar were even with the Euro right now, we wouldn’t be looking at a $130 barrel of oil, we’d be looking at $80 a barrel of oil, so that weakening dollar is having an effect on the price that we see here in the United States.”
http://marketplace.publicradio.org/display/web/2008/05/28/have_oil_prices_topped_off/
Well yes it is.
Your quote above is just a mathematical tautology. If the USD were worth the same as the Euro, a dollar would buy as much oil as a Euro.
Well duh. That’s true for all commodities. Actually it’s true for everything.
Oil is just another commodity and its price has no magic connection to the USD. No tangible good has had any peg to the USD since Nixon ended gold convertibility in 1971.
Hahahahahah……….bahha..hhahahaha!!!
A “strong dollar policy”………hahaha!!!
What a laugh, and so early in the morning.
Fed Term Auction Facility to unglue bank loans:
Fed to Broker (not bank): What have you got to offer?
Broker: Here is a loan we made to a self-employed beer sampling expert. It was 100% LTV originally, on a $500,000 brand-new condominium, but we gave the guy an extra $100,000 for some “re-modeling”. We figured that was okay, since it was still less than 125% LTV.
Fed: Why did he need to remodel a brand-new place?
Broker: Didn’t like the color scheme. But we still had plenty of equity, so didn’t see any problem. We figured with 30% appreciation, there should be plenty of room for liquidation. Also, this gave the buyer some breathing room in making the payments.
Fed: What’s the status of the loan? Is it current?
Broker: Well, no. It’s actually and early payment default. That’s why we’ve come to you. The buyer failed to make the first to payments. We sent him a really ugly letter saying that it’s most important to make timely payments but he has not responded to the letter. We sent someone by to try and locate him, but no one has replied to any inquiries. But we still think this is a good loan and good collateral. After all, it’s South Florida!
Fed: No Problem. Give us the papers and we’ll cover your bet. That’s our job, you know, lender of last resort.
When no one else is stupid enough to take your crap, just call us! We’ll print you more money. It’s what we do. It’s what makes for a strong dollar.
- Ben Bernanke, Fed Theif,…… I mean Chief
A ’self employed beer sampling expert’.
That is funny.
Thanks for the early morning laugh.
Now off to plant a garden and forget about all this BS for awhile.
Mike
I’d LOVE to be a self employed beer sampler. Where does one apply for this profession (answer - I know, “The Local Pub”)
LOL. That piece was so good ,and the sad part is that it’s so close to the truth .
Every time that Mr. Paulson has spoken about a strong dollar, the dollar has dropped 2% the following week. Actions, not words will create a strong dollar.
Hey, I hate to start the day off with a “tin foil” post and I know this garners lots of controversy, but I find the 9/11 cover-up story finding new legs recently. Particularly interesting though are the folks now putting their names on the list of doubters of the official story.
http://www.daily.pk/world/americas/99-americas/3865-usa-military-officers-challenge-official-account-of-september-11.html
This is just for entertainment purposes. We all know the MSM has our back should anything of importance be happening.
I don’t know if I’d go so far as to claim Cheney masterminded the whole thing, but there are still a lot of unanswered questions about 9/11. About a year and half ago I got interested in the topic and found a lot of reputable people who question the official story–some of whom would be the last ones you’d expect to entertain notions of a vast conspiracy. These former military officers seem to fit into that mold.
If the story ever breaks, I’m pretty sure that it’s not going to come from investigative journalism from the MSM. Someone pretty high up the food-chain is going to have to have a crisis of conscience and reveal details that can corroborated.
“Someone pretty high up the food-chain is going to have to have a crisis of conscience”
Scott McClellan is already having his crisis of conscience, at least as far as Iraq is concerned. But perhaps others will follow who have more knowledge of 9/11.
yeah, funny how those “crises of consience” tend to come well after you can do anything about it and at the same time a left wing nutcase publisher is waving a big check.
Wait till all the ‘nam vets are dead, and they will “find” a massive oil field in the mekong delta.
———————————————————-
yeah, funny how those “crises of consience” tend to come well after you can do anything about it
McClelland is interesting, because the bush/repubs are screaming that he is “disloyal” or “sad”, but they have not attacked the substance of his charges…re Katrina, selling the war in Iraq,or Cheney or Rove leaking national security info.
They’re attacking the messenger, but not the message…they’re conceding that what he had to say was true.
Not at all.
give it up txchick. bush and his administration are evil. i know that since you are from tx, it must be hard to swallow.
“but they have not attacked the substance of his charges”
BULLSEYE
It’s the same old worn out but ineffective defense.
the book hasn’t even hit the shelves yet. How can you attack charges before you actually see them?
That guy was the most pathetic weasel of all time.
Without going into a lot of detail, I worked with a major Bush administration figure for over 9 years before he was elected. There are a lot of untold stories.
“the book hasn’t even hit the shelves yet. How can you attack charges before you actually see them?”
You prepare a vigorous defense after recieving an advance copy of book back in April. Yet the only defense we’ve seen is character assassination so typical of the GOP. Not a word of defense from McClellans assertions.Not a peep. I can only surmise that defending against potential criminal charges resulting from McClellans whistleblowing takes precedence, therefore, they cannot respond at all. Only attack his character.
WhiteHouse shredders (electronic and physical) are operating 25hrs/day….. right next to the stable of new criminal defense attorneys set up in the basement.
a lot of is is probably not worthy of denial.
The White House was given an advance copy of the book weeks ago.
Had they any real ammo, they could have issued a point-by-point rebuttal of any factual mistakes.
Instead,you have what’s left of the neo-con bush circle all speaking from the same memo…they refer to McClelland as “sad”, “disgruntled” and they are all “puzzled”.
Yeah, that’s the ticket…they whole admin is “puzzled”.
Why would they give this worm any advance publicity? You’re just not making sense.
TX…. For some reason I doubt your JD credentials soley based on your insipid defense of this administration. It’s very amateurish thus far. A first year law student could mount a more convincing case.
Time to go long on tin; there’s bound to be a shortage if these conspiracy stories take root.
I love ya but what a crock of crap.
You said it, Chick. Incompetence is often translated into conspiracy. And I love how the one “military man” had his revelation watching Oliver Stone’s JFK. The fact that the stupid f’er could mistake entertainment for history says everything we need to know. I’m sure he is not the only one.
None of knows what happened, but we do know we were lied to and manipulated and that we’ve been in this war which has bankrupted our country, there has been no regulation on the mortgate industry, and food and gas prices are rising every day . . . and we got here by our “leaders” who lied to us so they could line their pockets with money . . . thanks bsh administration . . .
yes, let’s “fix” it with huge government, higher taxes and favors/patronage given to Democratic insiders rather than Republican ones. All of this to be administered by a guy with no experience running a taco stand, let alone the U.S. And let’s not forget, a guy who sat in that putrid church listening to that anti-white, anti-American slop for 22 years. Yeah, that’s who I want in charge of things here.
Susan Sarandon says she’ll leave the country if Mc is elected. I think I will if that other clown is. Luckily I have dual citizenship.
Good thing we have two parties so we can waste our time arguing. As if it matters who is in the White House to take orders from those who are really in charge.
the Truman Show. Been saying that here since 2005.
The war isn’t bankrupting us. Financial “engineers” and their “models” are doing the job. CDO’s CMO’s etc etc…and lending three quarters of a million dollars to a person who makes $25k a year…that’s what’s bankrupting us.
Leverage…just like what did the economy in during the Great Depression
Alec Baldwin claimed he would leave the U.S. if Bush got elected (or re-elected, I forget which). He’s still around and I hear he’s considering running for some office.
Will Sarandan really go or is she also just talk?
You betcha. And the engineers and modelers are walking away with theirs intact.
Bill, we can only hope.
Stack of Stuff Quick Hits Page
May 30, 2008
Story #1: Bob Dole Sends Scathing Letter to Scott McClellan
RUSH: Did you see the letter that Bob Dole sent to Scott McClellan? Did you hear about this? “Dear Scott: There are miserable creatures like you in every administration who don’t have the guts to speak up or quit if there are disagreements with the boss or colleagues. No, your type soaks up the benefits of power, revels in the limelight for years, then quits, and spurred on by greed, cashes in with a scathing critique. In my nearly 36 years of public service I’ve known of a few like you. No doubt you will ‘clean up’ as the liberal anti-Bush press will promote your belated concerns with wild enthusiasm. When the money starts rolling in you should donate it to a worthy cause, something like, ‘Biting The Hand That Fed Me.’ Another thought is to weasel your way back into the White House if a Democrat is elected. That would provide a good set up for a second book deal in a few years. I have no intention of reading your expose because if all these awful things were happening, and perhaps some may have been, you should have spoken up publicly like a man, or quit your cushy, high profile job. That would have taken integrity and courage but then you would have had credibility and your complaints could have been aired objectively. You’re a hot ticket now but don’t you, deep down, feel like a total ingrate? Bob Dole.” Ha! He’s really coming out of the blue here. They sent this to us late yesterday afternoon after the program concluded.
Actually, it was director Robert Altman who said that he would move out of America if Bush won the Presidential election.
Alas, he (Altman) didn’t move out of the Country when Bush was elected.
However, he did die a few years ago.
So I guess that, technically, one could say that he did indeed “leave”.
“#1: Bob Dole Sends Scathing Letter to Scott McClellan”
So old Bob Dole, on the big pharma payroll as Mr. Viagra, is the designated hitter for the repubs.
Well, after all the name-calling in his little missive, where’s the beef?
Any rebuttals on the leaking of National Security info by Rove and Cheney?
Any rebuttals on the mishandling of Katrina?
Any rebuttals on the misinformation peddled to sell the war in Iraq?
Do the repubs have any substantive rebuttals, or factual errors in McClellan’s book they would like to address?
Then they should do so. It is in their best interests and in the nations’.
The most important line in that entire letter is in bold:
I have no intention of reading your expose because if all these awful things were happening, and perhaps some may have been, you should have spoken up publicly like a man, or quit your cushy, high profile job.
“Incompetence is often translated into conspiracy.”
Exactly. Something like 9/11 just magnified the incompetence that’s there every day.
“Never ascribe to malice, that which can be explained by incompetence.”
Napoleon Bonaparte
Thanks for saying it. Buildings rigged with explosives collapse from the bottom up, not the top down. It would take tens of thousands of man-hours and hundreds of skilled demolition workers to rig the WTC buildings. The main supports would all have to be sawed through or broken, rendering the buildings unstable and wobbly (thousands of people could not go in).
Interesting that firemen on the scene do not question what happened (they are among the most vocal opponents of the conspiracy crowd), but people far away looking at video clips have concocted the most absurd conspiracy theory of all time . Literally tens of thousands of people would have to be in on the conspiracy (the entire New York fire department and police department, everyone at the Pentagon, everyone on the planes, etc), and all for what? For an excuse to go to war with Iraq, producing absolutely nothing other than a mess, and worldwide contempt? And all of this from the dumbest president in history?
The 9/11 conspiracy crap has been thoroughly debunked time and again, but believers don’t even bother to look at the refuting evidence, or claim it’s part of the conspiracy too. People believe because they WANT to believe. They’re no different from the mobs I saw lining up in Clearwater to look at what was claimed to be an image of the Virgin on the glass windows of a bank building. The image was beautiful, yes, but that’s about it. Not for the people in wheelchairs hoping to get cured, or the choirs singing, or the fools lighting candles and praying frantically. For them, it was a sign, and nothing could change their opinion.
What about WTC #7?
Mike
WT #7 was on fire for HOURS….if I remember right it fell around 5:00 or so. Diesel fuel (again if memory servs me right) was there for generators for NYC’s Office of Emergency Management generators…in Case Con Ed’s grid went south during an emergency. Or a blackout like in 2003.
There were a few buildings they were concerned about falling/ One of them was Millennium Hotel. They had seismographs (sp?) around the area measuring ground shifts around Church street.
This BS about conspiracies really drives me nuts.
Diesel fires can cause a perfectly symmetrical collapse, beginning in the middle of a skyscraper, bringing the entire ediface down into its own footprint. Not.
Why would a building that was collapsing fall sideways? What forces would be acting on the building to make that occur?
“Interesting that firemen on the scene do not question what happened (they are among the most vocal opponents of the conspiracy crowd), but people far away looking at video clips have concocted the most absurd conspiracy theory of all time .”
Increduluous
You are sadly, sadly mistaken if you believe firefighters on the scene did not question what happened and that they are among the most vocal opponents of 9/11 Truth.
This is a short 10-minute video that includes literally dozens of eyewitness testimony from firefighters testifying that they heard and saw explosions.
If you have the intestinal fortitude, I ask that you take 10 minutes to watch it and then let us know if you would like to amend your statment that firefighters do not question what happened.
Firefighter Testimony about Explosions
Of course there were explosions: the jets were filled with explosive fuel. There were gas lines in the building. There were hundreds of offices, many containing materials that could explode (cleaners, solvents, plstic-based furniture, etc). This has nothing to do with a rigged demolition.
Why do you want to believe something like this? Do you hate the administration so much (for whatever reason) that you are willing to attribute to it a level of genius beyond anything before witnessed on Earth, just to make it look guiltier? George Bush can barely tie his own shoe laces.
The terrorists behind it freely admit it; they laughed on video the day it happened (and no, they aren’t lookalikes pretending; “Mission Impossible” is make-believe, not reality). Why don’t you go to the Middle East and make friends with them, since they hate the administration as much as you do. Then tell them that you think George Bush did it because they could never come up with something like that. You might want to staple your head on before.
I’ve seen all the so called “truth” rubbish. Fact is, the people peddling these videos are making a fortune off the gullible, but doing incredible damage.
“People believe because they WANT to believe.”
Exactly. You can’t accept the fact that you’ve been lied to about 9/11, so instead, you choose to believe the lies.
You certainly fit the pattern:
http://www.rollingstone.com/politics/story/11818067/the_low_post_the_hopeless_stupidity_of_911_conspiracies
Care to comment on my posts below re: Operation Northwoods and federal government involvement in the 1st WTC attack?
lol
OPERATION NORTHWOODS - PROVEN - your government planning terror attacks:
http://en.wikipedia.org/wiki/Operation_Northwood
And why not? It’s so easy to get away with when you have a country of wimps.
3. A “Remember the Maine” incident could be arranged in several forms:
a. We could blow up a US ship in Guantanamo Bay and blame Cuba.
b. We could blow up a drone (unmanned) vessel anywhere in the Cuban waters. We could arrange to cause such incident in the vicinity of Havana or Santiago as a spectacular result of Cuban attack from the air or sea, or both. The presence of Cuban planes or ships merely investigating the intent of the vessel could be fairly compelling evidence that the ship was taken under attack. The nearness to Havana or Santiago would add credibility especially to those people that might have heard the blast or have seen the fire. The US could follow up with an air/sea rescue operation covered by US fighters to “evacuate” remaining members of the non-existent crew. Casualty lists in US newspapers would cause a helpful wave of national indignation.
4. We could develop a Communist Cuban terror campaign in the Miami area, in other Florida cities and even in Washington.
The terror campaign could be pointed at refugees seeking haven in the United States. We could sink a boatload of Cubans enroute to Florida (real or simulated). We could foster attempts on lives of Cuban refugees in the United States even to the extent of wounding in instances to be widely publicized. Exploding a few plastic bombs in carefully chosen spots, the arrest of Cuban agents and the release of prepared documents substantiating Cuban involvement, also would be helpful in projecting the idea of an irresponsible government.
Journalist James Bamford summarized Operation Northwoods in his April 24, 2001 book Body of Secrets:
Operation Northwoods, which had the written approval of the Chairman and every member of the Joint Chiefs of Staff, called for innocent people to be shot on American streets; for boats carrying refugees fleeing Cuba to be sunk on the high seas; for a wave of violent terrorism to be launched in Washington, D.C., Miami, and elsewhere. People would be framed for bombings they did not commit; planes would be hijacked. Using phony evidence, all of it would be blamed on Castro, thus giving Lemnitzer and his cabal the excuse, as well as the public and international backing, they needed to launch their war.[13]
Here’s your government’s involvement in the 1st attack on the WTC.
THE NEW YORK TIMES
* * * * *
Thursday October 28, 1993 Page A1
“Tapes Depict Proposal to Thwart Bomb Used in Trade Center Blast”
By Ralph Blumenthal
Law-enforcement officials were told that terrorists were building a bomb that was eventually used to blow up the World Trade Center, and they planned to thwart the plotters by secretly substituting harmless powder for the explosives, an informer said after the blast.
The informer was to have helped the plotters build the bomb and supply the fake powder, but the plan was called off by an F.B.I. supervisor who had other ideas about how the informer, Emad Salem, should be used, the informer said.
The account, which is given in the transcript of hundreds of hours of tape recordings that Mr. Salem secretly made of his talks with law-enforcement agents, portrays the authorities as being in a far better position than previously known to foil the February 26th bombing of New York City’s tallest towers.
The explosion left six people dead, more than a thousand people injured, and damages in excess of half-a-billion dollars. Four men are now on trial in Manhattan Federal Court [on charges of involvement] in that attack.
Mr. Salem, a 43-year-old former Egyptian Army officer, was used by the Government [of the United States] to penetrate a circle of Muslim extremists who are now charged in two bombing cases: the World Trade Center attack, and a foiled plot to destroythe United Nations, the Hudson River tunnels, and other New York City landmarks. He is the crucial witness in the second bombing case, but his work for the Government was erratic, and for months before the World Trade Center blast, he was feuding with th F.B.I.
Supervisor `Messed It Up’
After the bombing, he resumed his undercover work. In an undated transcript of a conversation from that period, Mr. Salem recounts a talk he had had earlier with an agent about an unnamed F.B.I. supervisor who, he said, “came and messed it up.” “He requested to meet me in the hotel,” Mr. Salem says of the supervisor.
“He requested to make me to testify, and if he didn’t push for that, we’ll be going building the bomb with a phony powder, and grabbing the people who was involved in it. But since you, we didn’t do that.”
The transcript quotes Mr. Salem as saying that he wanted to complain to F.B.I. Headquarters in Washington about the Bureau’s failure to stop the bombing, but was dissuaded by an agent identified as John Anticev.
Mr. Salem said Mr. Anticev had told him, “He said, I don’t think that the New York people would like the things out of the New York Office to go to
Washington, D.C.”
Another agent, identified as Nancy Floyd, does not dispute Mr. Salem’s account, but rather, appears to agree with it, saying of the `New York people’: “Well, of course not, because they don’t want to get their butts chewed.”
Note Salem TAPED his conversations with FBI officials so they couldn’t deny it and claim he was a ‘lying terrorist’ or ‘conspiracy crackpot.’
Hmmm - six hours and not a word from the ‘911 conspiracy theorists are nutjobs’ squad.
“The best answer to a fool is silence.” — Rumi
crisrose,
They’re “sad” and “puzzled”. They did not realize you were “disgruntled” and “disloyal”.
“Silence, the language of wimps.” crisrose
“Sawed through or broken” the “main supports”? No need old son - and a silly comment. Yes, it’s been demonstrated there were explosives used…….in all three buildings. No, a handful of comedians didn’t pop in and set it up in an afternoon, but it would take nowhere near “tens of thousands of man hours.”
Firefighters onscene not question the official story? Sorry, but I have no idea where you access what passes for information. Firefighters …… many of the remaining firefighters….reported detonations, rhythmic explosions like one would expect in a demolition, and several of these brave souls have thoroughly discussed their experience on film.
None of us knows what actually occurred - beyond the obvious. What any halfwit capable of reading the official version and comparing it with, say, Paul Thompson’s Timeline just for openers, could discover is we have myriad unanswered questions………and those who died must be honored by patriotic people who insist they be answered.
C’mon. The website is called Pakistan Daily.
Consider the source.
At least I don’t think Murdoch owns it so it just might have some credibility. The officers quoted are not Pakistanee.
http://en.wikipedia.org/wiki/Robert_M._Bowman
Here is a site with tons of material debunking this conspiracy hooey:
http://www.debunking911.com/index.html
The more interesting aspect is that it would take 272 tons of thermite to cause the damage. That is an incredible amount of material to sneak into a secured building. I do not believe in a conspiracy, but I have a son that feels there is a conspiracy based on the fact that the current administration has lied to the people so often, Why should we trust them on anything.
Three points.
1. How can this administration be classified as utterly “incompetent” and perfectly evil “masterminds” at the same time?
2. Why is it so hard to believe radical Muslims who blow themselves up daily around the world for their cause would not do the same thing here?
3. What is going on in your life that you hate Bush so much you would believe such a crackpot scenario?
I have no problem with anybody who dislikes or has contempt for the administration (they do a good job of asking for it) however to believe such insanity places you right on the borderline of mental illness.
To ignore it places you right on the borderline of ignorant coward.
Anyone who does 15 minutes of research knows the official story is impossible. I mean, it doesn’t take a physics genius to look at building 7 and know it had some type of assistance. It also doesn’t take much research to see that the event benefited a wide variety of power elites.
Bush, Cheney, etc. are just figureheads. Part of a dog and pony show to keep us distracted. When I think “government,” I think Lockheed Martin, General Dynamics, SAIC, Carlyle Group, etc.
From a practical point of view, the importance of 9/11 is that provides a keyhole. By looking through the keyhole of 9/11, you can get a glimpse of the way the world really works. For a lot of people, that leads to a trip down the rabbit hole which calls into question virtually everything we have been taught (or should I say indoctrinated with) since birth.
I think these groups are doing some of the best research on 9/11.
Pilots for 9/11 Truth
Architects and Engineers for 9/11 Truth
This partly answers your building # 7 nonsense.
http://www.debunking911.com/pull.htm
The collapse of the two towers was the equivalent of a massive earthquate to surrounding buildings; and part of those towers fell on building #7. There are dozens of eyewitness accounts by firefighters on the scene who said that building #7 was going to collapse long before it it–and who cleared out–because of the raging fire inside it. No conspiracy needed.
“There are dozens of eyewitness accounts by firefighters on the scene who said that building #7 was going to collapse long before it it–and who cleared out–because of the raging fire inside it.”
That’s the thing - Why would they have known building #7 was going to collapse because of fire? Why in the world would they have believed a fire would cause a skysraper to fall? Skyscrapers don’t collapse from fire. Never have, never will.
Or am I wrong? Besides 9/11, show me a case where a skyscraper has collapsed from fire. I can show you numerous examples of raging infernos that burned for 20 hours or more and didn’t cause a steel-frame building to collapse.
If the damage from collapse of WTC twin tower played a role, surely WTC 7 would have fallen in an asymmetrical fashion, falling toward the area of damage. But it didn’t. It came straight down at free-fall speed into it’s own footprint.
Like most Americans, you start with the assumption that 9/11 couldn’t have been an inside job and then explain why it couldn’t have been. That is called “a priori” reasoning and has long been recognized in critical thinking classes as faulty logic.
The official explanation of the twin towers, is they fell due to a thermite reaction, caused by the aluminum from the planes mixing with the rust on the steel of the elevator shafts, in the centers of the towers. Whew, long sentence.
This explanation is at least plausible. It may not be entirely correct, but the effect probably occurred to some degree, and it would have melted the supports on the floors where the planes hit.
Building 7 is still a problem. It collapsed in a thermite type reaction, but there was no obvious source of aluminum. The earthquake theory really strains credibility, as other surrounding buildings do not show the damage.
As I tell my daughter, it doesn’t matter if you theory explains 90% of the facts, if there is one piece of contradictory evidence your theory is wrong.
Now I am not saying Building 7 was the center of a conspiracy, but the official explanations are clearly wrong.
I also agree with the Pentagon doubters. The official story is clearly wrong. I am prepared to buy the theory it was flight 77, but I need a plausible approach path for a start.
My general take is that the 9/11 commission attempted to do a good job, but they felt compelled to explain everything, instead of admitting there are pieces of the puzzle they are up for more investigation.
That is a shame as it shows the report writers had no faith that, we the people, can handle the truth. They felt our “phycological” needs for closure were important than the truth.
Oliver
My general take is that the 9/11 commission attempted to do a good job, but they felt compelled to explain everything, instead of admitting there are pieces of the puzzle they are up for more investigation.
That is a shame as it shows the report writers had no faith that, we the people, can handle the truth. They felt our “phycological” needs for closure were important than the truth.
Oliver
This I agree with.
Oliver,
Here:
http://www.debunking911.com/firsttime.htm
There’s an entire subsite, incidentally, devoted to building #7. Part of one of the towers FELL on building #7.
There was no conspiracy. The conspiracy comes from the people who cooked up the conspiracy theory in order to sell videos.
As for the alleged other conspiracy’s above, try a few Google searches. They’ve ALL been refuted, including the quotes used (especially those attributed to firefighters), almost always out of context, if not invented out of thin air. Why would a “Truth Movement” have to falsify evidence, doctor pictures, omit facts, alter quotes, etc. in order to make its case? The ends do not justify the means; they are part of the same continuum. This is a concept so foreign to so many people, it’s pointless to try to change them. Millions of people–especially those who claim to be more progressive and enlightened than everyone else–lie all the time for supposedly “just causes,” and they will be lying till they’re all dead (and probably still lying after that). Mostly, they lie to themselves that what they’re doing is somehow good.
At some point someone is going to sue the crap out of the “Truth Movement” and its calculating leaders. That should be interesting.
Incredulous,
I am not trying to fan the flames of conspiracy theorists. I am trying to point out the official story clearly has some problems. The falling debris and earthquake theories do not fit the evidence. Worse yet, the video footage I have seen on building 7 show similar thermite like reactions that the Twin towers had, which neither of the above scenarios explain at all.
I agree that there is no conspiracy theory (that I have seen) which explains building 7 well. The buildings being rigged seems extremely unlikely. Hence by my argument, the theories are probably wrong. But that does not make the official explanation correct. Instead I am arguing more effort should be spent in understanding what exactly happened.
So instead of clinging to what the “experts” are saying, I argue you should rely on your logic and reason to see if what they are saying makes sense. If you’re reading this website you probably have more sense, if less knowledge, than the experts.
I for one have an alternate theory about flight 93 which I feel fit the facts much better than the official report. My theory does not involve huge government cover ups or great malfeasance. It actually follows the government report extremely closely. However, my theory could be upsetting or less palatable to a population weened on Hollywood movies. If you apply reason to the facts, I am sure you may come to believe the official explanation about flight 93, while uplifting, is perhaps not the whole truth.
As one more example of government investigations, I can find no finer example than Feynmen’s investigation of the Challenger disaster. Rogers (the head of the investigation) had his own version of the “truth” which was unfortunately wrong. Feynmen showed him up and demonstrated extremely convincingly the O-Rings were at fault. You can find a brief review of the incident here:
http://en.wikipedia.org/wiki/Space_Shuttle_Challenger_disaster
But remember if Feynmen had not been “a royal pain in the ass” the findings would have been very different and wrong!
Oliver
Checked that site. Who is the sponsor? Have not (yet) had time to examine it further, but my immediate question is: Whose website is this? Who sponsors it? Who researches for it? Why could I not find a single name by way of a credit/contact point? Perhaps it bloomed full-formed by itself?
Reminds me of that entertaining issue of “Popular Mechanics” which had me fooled for quite awhile, till a couple engineer acquaintances pointed out the discrepancies, and showed me where to find the info about the editorial staff changes.
I am a pilot, albeit of the dinky plane variety, but know several folk who fly those big boys. Nutball who couldn’t maneuver a light-plane, making that incredible turn over D.C., and planting a large jet into the side of the Pentagon with nary a mark left on the face of the building, with no damage from ground effect, with no additional photos from the several cameras filming the scene? Oh please.
Do I believe GW could plan/execute a horror like these connected incidents? Not in this incarnation. Do I believe the official story? Sorry. Not that gullible.
Here is some background on the WTCs and 9/11 I didn’t know and found interesting.
http://www.rense.com/general82/whod.htm
On a side note and regardless of what side of the issue is taken, the HBB readers are again proving to be well informed on an issue that isn’t covered in the MSM at all.
An old Mafia saying goes something like, “Two people can keep a secret only if one of them is dead.” But we’re to believe that the dozens or hundreds of people involved in killing several thousand of our own citizens have all been able to remain silent?
I’m going long on tinfoil tomorrow morning.
Well, According to that theory there are no unknown gov’t secrets then. Hell, good enough for me, I’m satisfied.
Tinfoil and straight jackets, the hatred has made these people nuts. Makes me wonder why they wished for a housing bubble burst; was it so they could afford a home? or was it wishing for another reason to discredit the gov’t.
No. 2
Sad to say you’re right chick, if Kerry was POTUS these last three years most of these posters would’nt be on this blog and this blog would still be here. They’d be cheerleading a great economy, prosperity for all.
What is interesting is the internet domain. .pk - Pakistan. Right there -bam! Glass blows off on my skepic meter and bends the needle all the way right….
PBC posted their annual report. They got the link wrong from their main page, but I figured it out.
http://pbcgov.com/PAPA/pdf/2008AnnualReport.pdf#pagemode=bookmark
Mad amount of garage and yard sales this weekend. Mostly clearing out bulky things from garages and homes it looked like.
My apartment complex handed out warnings on Friday that we should be extra careful because there has been a significant uptick in thefts from vehicles recently. Seems the thieves look for telltale signs like cradles and chargers to indicate that there is a phone or an ipod in the car. They also specifically mentioned “the ring left by a suction cup” as an indicator to the thieves that there would be a GPS in the car.
Maybe I should move to a complex that has real limited access parking. This one shares the garage with the retailers in the strip mall.
There are times when it is good to be driving a slightly battered 1997 Taurus with an original equipment radio/cassette player.
I consider my 98 Saturn theft proof because it’s so uncool a ride and why risk breaking into a 5-speed with stock stereo for a pair of $10 BJs sunglasses.
can you still get those faces to put over electronic equipment that has an “8 track” hole?
An 8-track tape or two on the dash will chase away any common sense thief.
You can still buy them on eBay.
http://search.ebay.com/search/search.dll?from=R40&_trksid=m37&satitle=8+track+tape&category0=
Lots of thefts around here recently too. My car window was broken ($150 damage and a mess) to get a rather old car stereo. I guess years ago, crime and deterioration of neighborhoods used to be more in the news, maybe it’s headed that way again.
2002 Taurus… All original but in nice shape (kinda like me… :D)
The back story of the ‘97 beast is even better than the fact of its existence. I bought it wholesale (projected price at auction) out of the tech support fleet of my last employer. The employee who had used it was an engineer who wasn’t buying it only because he already had two of his previous fleet cars and didn’t need another. And Ford was having some trouble with its automatic transmissions at the time - this one had already had its transmission replaced about 6 months before I got it. The engineer had just replaced the battery too. Hasn’t given me a lick of trouble other than normal wear and tear.
And that huge trunk is awfully nice.
I think I paid $5000 including a one year warranty for a 4 year old car.
My goodness, Ford was still having Taurus transmission troubles in 1997?? I owned a 1991 Taurus which blew the transmission at just over 50K miles. Paid for the repair myself and then got reimbursed by Ford about six months later. Within about 15K more miles the replacement transmission started acting up so I traded it in.
It was just about over then. I think ‘98 - possibly ‘99 - was the first year that Consumers Reports would actually recommend the Taurus as a used car. American cars got a reputation for quality problems for a reason.
I love mine. I’m driving it into the veritable ground, the kid gets it in a year, then if it’s still running, he takes it to college with him. Then if it’s still running, he can take it to his first job, then if…
Lots of moving vans on my street in New York this weekend. It’s the moving season but still far more than normal.
It’s the midnight movers that ya know are in the most trouble.
We moved last week, using one of those moving trucks. It was not a distress move. I still can’t figure out how Brittany and Tyler are making their rent payments, if not with substantial help from the Bank of Mommy and Daddy. Rents are still rising rapidly. Denial is high. I can’t wait for this inventory to come online.
They all can’t be Brittany and Tyler’s. C’mon, that’s irrational.
Surely the long-termers think through these things. Maybe you should look at places that are more stable than these ticky-tack boxes in the sky.
Anyway, it seems that landlords are still somewhat in denial. The smarter ones aren’t, of course.
My building, the “wishing rents” haven’t dropped. However, all those places are just as empty as they first were. That can’t be good.
However, they are totally backpedalling on the existing tenants (”bird in hand syndrome.”)
“We’re hanging on by the skin of our teeth,” says Mrs. Schneider, 41, a stay-at-home mom with three children. At one point, the family held a garage sale to raise some extra money. “We put a lot of cash down, we didn’t take out a subprime loan. But we never thought we’d have a hard time selling a great home in a wonderful neighborhood.”
Why does this not surprise me. Tiffany the stay at home mom, no mention of her getting off her lazy ass and going to work to make up the shortfall. For $5, I’d be happy to get into Tiffany’s Lexus SUV and put a quick end to her misery.
A stay-at-home mom with three kids is much less likely to be “sitting on her lazy ass” than most people in the paid workforce.
Pussycat, are we arguing? I didn’t say they are all Brittany and Tyler. But there are many. We are back in the West Village. You have the rent controlled older crowd and the snot-nosed younger crowd. The older crowd is subsidized by yours truly. I just can’t figure out how so many of the younger group is making these payments, if not with the help of mommy and daddy. These are not Wall Streeters.
I wonder if the landlords understand that once mommy and daddy hit harder times (no more constant equity appreciation), and cut off the flow to the that they are screwed. I doubt it. The landlords stood in line for a slug of Kool-Aid. It was black cherry, I believe.
Oh, I don’t think we’re arguing at all. We’re discussing.
Again, I think you’re basically on the money. I used to know a few of these Brittany-Tyler types. They all moved away.
I think the snot-nosed crowd that you referred to was definitely also on large amounts credit card debt. Periodically, their parents must also have been fronting them some small “gifts” to keep them going.
There is simply no way otherwise that these people could be spending the way they are.
Right now there appears to be a significant number of industries in SEVERE distress:
Autos
Airlines
Banking
Construction
Trucking
Residential Real Estate
Commercial Real Estate
And now, government revenues are constracting because of slowing incomes, falling property values, and delinquent payments.
The one thing all of the above have in common is that they are highly leveraged and collectivly support trillions of dollars of debt. As revenues contract in the above industries, even if you fired all the workers, the debt burden remains.
We are talking about trillions of dollars of debt that may potentially default. The City of Vallejo just went bankrupt. Jefferson County is on the edge and potentially the largest municipal BK in US history. The problems of these two are not unique and could be played out around the country. And we are not even contemplating pension liability.
Airlines are teetering on the brink.
Subprime has already cost over $400 Billion and much larger Alt A and jumbo are hanging around the corner.
Revenues are shrinking all over the place…..debt is not. If people think this credit crisis is behind us…..well they may be driving looking in the rear view mirror.
Soros says this will be the worst of his lifetime. Buffet says longer and deeper. I think this may be the worst ever as we have never had to deal with this kind of leverage supporting a service economy where fewer and fewer will be able to support the services.
Yes, but gov’ts have one advantage over businesses, the power to tax!!! A business in a soft economy has no pricing power, as its already losing customers who cannot afford the current price. Gov’t on the other hand can just create new taxes, raise current ones, enforce laws on the books that are linked to fines, add fees for all gov’t services provided. I do not know the specifics of vallejo, but Jefferson county just plain got burned like Orange county did back in the mid 90’s. And municipal bankruptcy does not mean they can skate on paying on the bonds they’ve issued, a federal BK judge works all that out, and he is well aware of a gov’t power to tax in order to pay their bills!!
During the early 1930’s, local and state governments tried to raise taxes of people that were broke, and set off tax revolts all across the land…
http://en.wikipedia.org/wiki/Tax_revolt
“The first significant wave of these campaigns was during the 1930s. The Great Depression introduced unprecedented tax burdens to Americans. While real estate values plummeted and unemployment skyrocketed, the cost of government remained high. As a result, taxes as a percentage of the national income nearly doubled from 11.6 percent in 1921 to 21.1 in 1932.”
Well, taxes already get about 35% of my income, so, heck, what’s a little doubling between friends.
50% marginal tax rate for us with all taxes, fees, and rip-offs included…
To an extent, but that is limited. In CA, property ad valorems are capped and additional special assessments require voter approval. Likewise, sales and income tax increases require a ballot incentive.
Municipalities can raise additional money through licensing fees and fines, but those generally are small potatoes in comparison to property tax and sales tax revenues.
There is no way around it: local governments are going to have to significantly cut services.
And when I walk around NYC I look at the luxury and pampering industry and wonder how it is sustainable. A place like the Meatpacking District makes no sense to me. It is all trendy restaurants and boutiques. It is not located right next to a subway. Foot traffic through the area is not natural. You have to go out of your way. It seems like another bubble creation.
Just think how many boutiques, nail salons, spas and assorted other non-essential stores have popped up in the bubble. Where will these people work after the crash? I walk down Bleecker St. and want to cry. Small businesses fail, due to gigantic rent increases, and are replaced by high-end retail. New Yorkers better pray to god that the foreigners can keep all of these shops going. The rents are astronomical. There will be a restructuring of this economy. I just wonder what it will look like, if/when the excess liquidity is wrung from the system.
god knows nyc needs 5 marc jacobs shops in the meat packing district to survive
how else will he pay for all his meth and gay porn star prostitutes?
typical nyc street these days
duane reade,starbucks,jamba juice,luxury high end boutiques,
chase bank- wash rinse repeat
Chase
WaMu
Capital One (”formerly” North F*ck)
Wacky-ovia
Commerce Bank
Once upon a time, the Shitti’s used to be ubiquitous. They’re a dying breed now.
Preach it!
Most of these out of the way places are bubbly. West Chelsea is the same way. No easy foot traffic. You have to go out of your way to go those trendy clubs/restaurants, etc.
Bleecker is an unmitigated disaster. All the ol’ viable businesses have been pushed out.
Virtually all the liquor stores have shut down (this one’s for you NYCityBoy!) to be replaced by these boutiques. Why? Did the NYU kids suddenly stop drinking? Why didn’t someone tell me?
Basically the liquor stores have tiny margins compared to these boutiques.
Walk along the river west of the village and there are mountains of completely empty “fancy” condos. No buyers for their wishing prices. Completely 100% empty.
What’s the BLS breakdown on incomes there in the City? I know its got to be pretty top heavy compared to the rest of the country, but everyone there also can’t be in the top 5 or 10%. Take out the credit cards and foreign tourists and where does that leave those places in a couple of years?
Do you mean Manhattan, or the Five Boroughs, or each of them separately?
Manhattan (and the parts of Brooklyn closest) are top-heavy, naturally, but if you remove the top 2-5%, they look remarkably like the rest of the country except scaled higher.
The median income in Manhattan alone is something like $55K (which is higher than the country as a whole and something you would expect.)
Contrary to popular belief, Manhattan is not that rich. Lots of paper tigers here.
Another way of looking at it (a friend’s formulation not mine) is that Manhattan’s population is notoriously transient. “Lots of people ‘do’ their 20’s in New York” and then move back to wherever. Part for the fun, games, experience, whatever; part for the money.
The stable population (defined as more than 5 years) has a totally different income profile, and even they may move out to the larger Tri-State areas to breed their sprogs.
You’re asking very complicated questions.
“You’re asking very complicated questions.”
That’s because I’m a very complicated and difficult person… ”
Thanks for the breakdown, I was referring to Manhattan proper, I knew that the population’s income there probably was above the national median, but I wasn’t sure of what the skew was due to the financial industry. Most of those twenty somethings trying to imitate S.I.T.C. have to be living on the financial edge.
I’ve posted before that our city and county is full of the “disabled” and some of our doctors have made a fabulous living running disablity mills. Well here’s the proof. From the Census “Quick Facts” page.
Country population in 2006 - 21,842
Median household income 2004 - $29,138
Number of disabled over 5 (2000) - 5,928 or 30%.
Imagine what the median income would be if the disability payments that 1 out of 3 people are getting were removed from the picture - that was in 2000. It’s probably closer to 40% now judging from the lines at the Dr’s offices.
“Virtually all the liquor stores have shut down (this one’s for you NYCityBoy!) to be replaced by these boutiques. Why? Did the NYU kids suddenly stop drinking? Why didn’t someone tell me?”
Don’t even joke about that kind of sh$t, Pussycat. There are still 2 great liquor stores in the East Village. They are right by NYU.
I was talking about the Bleecker in the West Village, and I was talking about liquor stores (the boring ones you find just about anywhere) not bars.
The liquor stores in the West Village are ridiculously priced, like everything else in the WV. You have to go East, young man. I fear that Bleecker in two years will be completely ruined.
Were ridiculously priced because they no longer exist, as I said earlier.
Your point is noted however.
Anyone know if McSorley’s Old Ale House is still there on East 7th Street? And Astor Home Liquors? (My two old hangouts while going to college at Cooper Union… I’d hate to think they were gone…)
“Just think how many boutiques, nail salons, spas and assorted other non-essential stores have popped up in the bubble. Where will these people work after the crash? I walk down Bleecker St. and want to cry. Small businesses fail, due to gigantic rent increases, and are replaced by high-end retail. New Yorkers better pray to god that the foreigners can keep all of these shops going. The rents are astronomical. There will be a restructuring of this economy. I just wonder what it will look like, if/when the excess liquidity is wrung from the system.”
This type of turnover, driven by large rent increases, has been ongoing in the Hillcrest area of San Diego since the late 90’s.
Round one of rent increases occurred during the tech bubble. The large increase in electricity rates around 2000 (thanks Enron) drove out another chunk of long-standing businesses. The housing bubble just continued the trend. I assume most of the businesses still around from 10 years ago either own their property or have long term leases. A few may have margins high enough to support the rent increases. If margins aren’t high, new businesses don’t last very long in the “high turnover” locations. That’s not just for typically high turnover types of businesses such as restaurants. Places that once housed long-term businesses now turn over every year or two. The problem isn’t that this area is out of the way, it’s the gigantic rent increases. I wouldn’t mind seeing a return to pre-bubbles commercial rents and the earlier business mix. Just how many high-end, high-margin businesses does an area need?
I think the timing of the Sex and the City movie is kinda funny. A celebration of consumerism at a time when the wannabes are maxed out.
No, I didn’t see it and won’t. I couldn’t make it though that garbage.
Autos = high gasoline prices
Airlines = high jet fuel prices
Bank = over leverage and/or caught holding the mortgage bag
Construction = what construction job?
Trucking = high diesel prices
RRE and CRE = we all know too well
I think these financial disasters pale in comparison to the looming permanent energy crisis. Most on this blog suggest that we will over shoot on the downside, thus they assume that we’ll bounce back from the overcorrection. However, I disagree. As energy cost (e.g. transport and electricity) continues to take a large chunk out of people’s paycheck, less money will be available for habitat.
In the 30s FDR was up against an economy in ruin (stock market/ the dusk bowl/high unemployment etc.). But there was a fundamental difference then, and that was an abundance amount of “cheap” energy in the form of oil/gas/coal. Barack Obama (assuming) will not have this luxury, rather he’ll reign over in hindsight the era of Peak Oil where our standard of living deteriorates will no solution in sight.
It is time to power down.
Cinch
I’m sorry in advance if this was a double post.
“No solution in sight” is correct. At least you didn’t fall into the static analysis trap by saying, “No solution is possible.” The more urgent the problem the more effort we’ll apply to fix it. We humans can improvise, adapt, and overcome.
I agree with your post. But more nuclear power plants will come on line in ten to fifteen years and we who sat out this housing bubble and saved resposibly will be driving Teslas ( http://www.teslamotors.com/ ). I, for one, think the suburbs and rural areas (with no redeeming value (climate/ocean front/ski resort/scenery) will be turned into drug-infested rap music infested slums, but the high class vacation spots in rural areas within a Tesla’s range will hold value. Also, commercial jet engines will be converted to run on fuel derived from coal. The DOD is currently testing this coal-to-fuel on their jet aircraft.
However, I hope you are all set for the coming bad decade as I am. I’m ready to spend in the bad times because I saved like a miser in the good times.
“more nuclear power plants will come on line”
What? Did I miss something? Was the problem of nuclear waste solved when I wasn’t looking?
Here you go:
http://www.world-nuclear.org/info/inf04.html
I am looking to buy a lateral file since work has just declared that they really mean it when they say we can’t work from home without putting sensitive materials in a locked drawer when we are not actually working on them. I checked out a few places and got lots of personal attention (and sales rep business cards) despite being severely dressed down. I have to say I was not impressed by the quality of construction at the really expensive place. The design was a little nicer than the previously rented office furniture stuff, but it wasn’t particularly sturdy and the drawers didn’t glide better than the used stuff (at one quarter the price).
Last time I tried to get attention in a furniture store in casual clothes I was completely ignored, even when I tried to wave someone down.
I’m going to hit craig’s list. Most people will have lost the keys, but there may be a few that still have them. See? I’m buying green!
Or just shop around if the keys are lost - most office furniture has pretty replaceable lock cylinders, you can probably get them at office max or whatever it is called.
What is the man going to do, anyway? Barge in at night and make sure it is locked? Yeah, right. Just get something with a lock and look around for an old key that looks like it might fit. File down the key so it goes in the keyhole, snap a photo and say, “see? here you go!”
No one is going to check at random. But if you get burgled and the stuff is stolen you get fired. I found a little plastic individual drawer at Staples that I could get, but that seems to be beyond stupid. If I were stealing stuff, I’d take it with me on the assumption that anything you bothered to lock up must be good. Then again, if the rule says a locked drawer and doesn’t specify that the drawer has to be part of a piece of furniture, it could satisfy the requirement. I’m going to e-mail the link to my boss and his boss on Monday. They both have a sense of humor.
And I’m willing to do it. I’m just not willing to pay $200-$800 to do it ($200 for the former office rental piece, $800 for the kind of nice modern furniture place). I think I can find something for $50 to $70. I’ll have to look into buying something without a key and replacing the lock. Somehow, I assumed that would damage the furniture, especially if it was wood.
Do you know if the locks on the wood ones are glued in? Could you steam it out without hurting the cabinet? I’d prefer not to have an ugly metal file cabinet in the middle of my living room if I could avoid it. My tool collection is limited. If you can do it with a cordless drill, a hammer or an adjustable wrench, I’m probably OK.
Airlines are teetering on the brink.
That industry is getting smacked. I estimate air fares must rise 22% just for them to break even! That means reducing capacity at least 15%.
Airlines are an elastic market. The airlines sell fewer seats as the price increases. So price increases only stick when the competition for existing seats is intense enough. We’ve seen the healthier airlines slow their growth: Airtran, Jetblue, and Southwest. The less healthy are the ones who are having to cut capacity in the hopes of driving up the fares: American who is grounding gas hogs and maintenence intensive airframes (so called “hanger queens), US air (downsizing Las Vegas from a hub to a focus city), Delta (started a tit for tat war with their RJ vendor Mesa in order to cancel the contract), Frontier (in BK, they’re cutting their RJ contracts too), Alaska (downsizing by grounding MD-80’s that just consume too much fuel for what they can do), and others.
Governments can tax all they want… but at some point people decide that their ‘free time’ is worth more doing ‘free things’ than contributing to the consumer economy. The Laufer curve works.
I have too many friends working outside of the US for me to hold the illusion that the USA can arbitrarily print money or raise taxes. Right now the greatest growth in trade is Asia to Asia. Doubt it? Look at which airlines are growing the quickest. (Ok, Emirates is growing by moving people Asia to Africa and Europe. But Singapore, Hong Kong, and others have a strong Asia to Asia growth component.)
Got Popcorn?
Neil
An excellent way to go lose money is to invest in an airline. The nature of the business all but guarantees that you’ll go broke.
Agreed. I took a gamble on America West Airlines (before the US Airways merger) and was lucky to pay for all my flights in 2005. But peak oil will drive many of these to trade at the $1 range. We’ll see more mergers. I think US Airways and United will eventually merge. The government won’t let the airline industry die. They are working on alternate jet fuels (see my post above).
RE: supporting a service economy where fewer and fewer will be able to support the services.
The circumstance of a collapsing standard of living all depends on where you came from and what your expections are.
When I grew up, a quarter derived from the return of 5 1 liter Coke bottles scavanged from the local beach dump was a small fortune to be spent at the penny candy store.
My kid’s couldn’t be bothered to check under the couch cushions for lose change under any circumstance.
When queried by my 85YO about where I was eating out…I replied, “The Riverview”. She says-”Where’s that?” I reply-”In the same town you’ve been living in for the past 50 years.” My parents never put much stock in “eating out”. I also remember in 1966, there was 1 McDonalds in a 20 mile radius of home.
What the average for a family eating out today? 3x? 4x a week.
Pffffffftttttt…talk to me about “hard times.”
Kids with cars…Hell I think I could count on one hand the HS kids who had cars when I was in school. You always had some greasers
or some lucky fool who got Uncle Joe’s old Ford Fairlane with 200k on the odometer. But the average kid? Not a chance.
Now when I drive by the local HS @ the age of 55, 50% of the kids drive a better car than me.
Jobs for teens in the 60’s?
All dependant if Uncle Joe with the gaz station would hire ya. Also you might get on the summer beach cleaning crew if your old man was buds with the manager. But legions of jobs in retail, tourism, and restaurant? Not a fookin’ chance.
Gist of the above…people who remember history and the immediate past in the US can effective deal with the coming decline. I’m certainly not afraid.
It’s the younger, $295 iPod/$395Blackberry/$400XBox/used BMW 318/Ambercromie & $150 per pair Sneaker Gen who are gonna take it psychologically up the wazoo.
Not that I disagree with you hd74man, but you’re sounding like my GrandDad ready to chase the neighborhood kids off his lawn or tell stories about carrying coal buckets in the snow.
That was then,this now. We will go back to something ,but not that innocent time. What’s funny is the friends I know that are preparing like crazy for harder times, everyone knows that have the means,and so will get a lot of company from relatives, or have it all taken away at gunpoint. You can prepare for a Hurricane but can’t argue with it or wish it away. It will interesting at the least.
I DID carry coal buckets in the snow, along with firewood. And I bet I am younger than your old grand-dad, being as I am 35 years old.
Oh, yeah—and it wasn’t ‘an innocent time’, either.
‘The circumstance of a collapsing standard of living all depends on where you came from and what your expections are.’
Absolutely agree. Compared with the circumstances of my youth, I live like the Empress of the Fookin World nowadays. I prance around all day singing and stuff, like Pollyanna on meth, is how happy I am.
Dammit, I kicked that meth addiction a long time ago. You got to go reminding me?
Hahaha!
Say, polly, did you ever read the article, it was awhile ago, about squirrels on meth? Yes, squirrels. They were hanging out in the same park that drug dealers were, and evidently knew decent product when they perceived it from amongst those leafy tree branches. Perhaps they paid with acorns. I never saw a follow-up article to see how rehab went.
I bet those were some reeeeeally fast little rodents.
I agree with hd74man . Cheap fun was the name of the game when I was young . The parents of the baby boomers were pretty tight when it came to money (middle to upper middle class ). Most of the kids in high school that I knew had to work for anything extra .I was able to get side jobs while I was going through high school ,but they were usually back-breaking type jobs for low wages. As hd74man said ,very few high school kids had cars .
It was a different world in those days ,so nobody needs to tell me
that, but not having luxury items was no big deal .
Auto sales out tomorrow, I’m expecting the press releases will have lots of “due to uncertain in the economy,” statements.
It’s not a popular topic in the auto trade press, but what we’re looking at is a permanent return to 13-14 million sales a year, at least for the next few years. Even though “analysts” were late in saying sales would go into the low 15 millions, it’s actually looking like it might end up around 14.8 million units.
Compared to high 16 million unit sales during the boom, that is approximately a $50-$60 billion hit to the economy — and auto manufacturing represents real money, not inflated bonuses, commissions and stock prices.
The Harrisburg area of Pa seems to be holding up very well. 2 co-workers sold homes just this month took about 4-6 weeks to sell-cash in the hand sell. They got full asking price. I have no idea of the loans details. This to me seems odd but what the heck the whole boom/run up was way more than my simple mind could understand. Now the un-wind is just as strange if not more so.
Many MSM sources are saying now is the time to buy they are even using the same old lines about location, low rates, prices will go up, ra-ra-ra-ra stuff. I did not believe the fantasy then, or now. They were right on the way up, but back the statements now with worn out half-truths and flawed thinking.
One of the messiahs Mr. D Ramsey has stated the USA is not in a recession and if we were HE would tell us we are. He then quotes the Fed- Gov numbers to prove his statement. This prophet then goes even further saying now is a good time to get into real-estate if you do not live in cities that had a large run up in prices. He points out Atlanta is down almost 10% per the Case-Shiller index but that is not that bad and you should be careful if you buy in Atlanta but if you are in New York most of the rest of the USA (flyover) your Fine with little to fear. At no time is a word spoken about how far homes went up, or how one should know what is a good price for the income a family has. At no time is the 10% down in prices, put into money terms (200k-10%= loss of 20K) and what this means to those who have lost the 10%. All the while he is telling the masses to open their minds, think for themselves when they hear anything about recessions or bad, about real estate.
This guru claims to be disproving the doom and gloom of MSM yet he tells us to put money in S&P funds that grow 10-12% a year without a word of risk or what has happened to these funds in the last 6-8 months. What is it about past returns? What S&P fund can you or I invest in that’s growing 10-12% from now till next year? And the next year. Again no mention of how these funds made the gains of the past or how they will always make 10%. I am sure if I were to ask Mr. Ramsey about any of the above, he would say I should seek out a finical adviser or better yet attend one of his classes for a fee.
This prophet speaks many good words about not getting into debt and getting out of whatever debt you have. He should be given credit for that, nothing more.
I like his show, minus the political rants. I like the callers, I guess, because I am nosy about Other People’s Money. He advises people to spend no more than 25% of their income on their mortgage, and to only take out 15 year fixed-rates–that is good advice IMO.
Dave Ramsey is a great financial triage doctor. He knows the problem and offers a solution. However, he is a RE believer, made his money holding RE paper and as a landlord and is a perma-bull. He has real compassion for those who’ve made very poor decisions. His advice is considered harsh by some but it, and his solution is always dead on. Don’t take my word for it, listen to his show. Disregard his bullishness though.
Lots of Repub types are defensive. It’s kinda funny - I’m a Repub too but this is too good to try to play down.
The Trouble in Housing Trickles Up
http://www.nytimes.com/2008/06/01/business/01town.html?_r=1&ref=business&oref=slogin
“In some ways, Greensboro got caught up in the national housing boom,” Mr. Jud says. “It was neither a bubble nor a bust, but people in the middle are now feeling the pinch from rising costs and getting overextended.”
As recently as two years ago, says the lawyer, Charles M. Ivey III, “I felt like I was a veterinarian for dinosaurs — clients were disappearing.” Now, he’s seeing more and more of what he calls “paper millionaires,” real estate investors who thought that the good times would go on forever. “Mostly they bought a slew of properties, hoping to flip them and with refinancing, they thought they could stretch it out,” Mr. Ivey says. “Hopefully, we can buy enough time to sell off their properties.”
The “it can’t happen here” mantra is beginning to lose it’s can’t.
The boss of Bradford & Bingley has quit “due to a serious cardiovascular condition”, the firm has announced.
Chief executive Stephen Crawshaw is leaving the UK mortgage lender with immediate effect, and will be replaced by chairman Rod Kent in the short-term.
Mr Crawshaw’s departure comes a day before a trading update. Reports say the firm will issue a profit warning.
http://news.bbc.co.uk/1/hi/business/7429869.stm
I pray he makes a speedy recovery, I’m sure removing himself from the Bradford & Bingley will help.
“serious cardiovascular condition”
Has this excuse ever been used as a reason to vamoose?
The real reason for leaving goes something like this:
“serious house of cards condition”
It has been the most difficult week in Crawshaw’s four years at the top of B&B. Under the 46-year-old, who trained as a lawyer, B&B has been a stock market darling which concentrated on the booming buy-to-let sector, leaving many in the City convinced that it was going to be snapped up by a bigger rival. Now, far from having a bid premium in its shares, the bank has pariah status and some analysts are valuing the business as if it has nowhere to go but run off.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/18/ccbandb118.xml
Buy to let would be better described as “Buy to Eventually Flip”
NYT’s business section
The Trouble in Housing Trickles Up
Tiffany Schneider pu their brick colonial on the market for 1.2 million and was schocked when it didn’t sell in 30 days. After all the Schneiders had owned five privoius homes t all of which sold in t he first month. A year later thaey are renting in Madiosn Wi and having to cut expenses. Half a dozen price cuts haven’t done much to generate more trfic. they are now asking 874k. At this price they would recoupe what they originally spent. We’re haning on by the skin of our teeth.
IN Greensboro a local bankruptcy lawyer says “I felt like I was a veterinarian for dinasaurs” Now he’s seeing more and more of what he calls paper millionaires. Real estate investors who thought that the good times would go on forever.
I tried to find the exact line from Citizen Kane but couldn’t. It was when Bernstein was describing Jed Leland’s family. “You know the type of family. One day they are worth $10 million and the next day they find the father with a bullet in his head and find out there is nothing but debts.” It is something like that. I would guess there are many, many Leland families out there right now.
Of course my favorite Bernstein quote is, “it’s no trick to make a lot of money. If all you want is to make a lot of money.”
“Tiffany Schneider put their brick colonial on the market for 1.2 million and was shocked when it didn’t sell in 30 days.”
I think there are still lots of Tiffanys all over the country in the sense of having no clue about what their house might be worth now or how long it might take to sell. To the extent they even understand there’s a housing correction occurring, it’s a problem some place else. They don’t see in their area what they’ve possibly heard about or seen in the worst hit areas, so they assume it’s not a problem in their area. Or maybe they travel in circles with people as clueless as them about what’s happening. However, if one has to sell, there’s no escaping the reality of the broader forces affecting housing everywhere. The unreality bubble in which they’ve been existing has just been popped.
Tiffany Schneider pu their brick colonial on the market for 1.2 million and was schocked when it didn’t sell in 30 days.
Later in the article we learn that they’ve lowered the price to $800s, which is their cost + improvements… as if the market cares about their costs.
B b b but the home show on the TV said that remodeling the kitchen would add 50K value. Where’s my 50K dammit?
Think about the hundreds of thousands working in the mortgage industry and Wall Street supporting this illusory ponze mortgage finance game that no longer have jobs. We are talking many thousands in NYC alone and much more in CA.
The illusion created millions of jobs in the construction industry that are now gone or going soon.
The auto companies and their suppliers have let go hundreds of thousands in the past year. Last week Ford and GM announced over 30K. Remember, Ford and GM are assembly workers putting together parts shipped from many more workers around the country. So for every Ford and GM worker let go, many more are released down stream.
Truckers are simply pulling off to the side of the road because they can’t cover fuel costs shipping.
Airlines are going bankrupt or on the brink. In the mean time they are releasing thousands of workers.
All of the above paid taxes and supported their local business. The fallout will be big because the contraction is happening in almost every industry and at every government level simultaneously.
WalMart reports flat same store sales even though the price of food and gas is skyrocketing. CA reports negative sales tax and gas tax revenues even though gas prices are outta this world.
We are just beginning to see the impact on our local governments…..this one could be devasting as decisions will have to made which services to be cut and which individuals will lose their jobs.
It is still amazing how many local leaders are still making budget plans predicated on rising revenues streams.
“It is still amazing how many local leaders are still making budget plans predicated on rising revenues streams.”
The sheer incompetence of government to acknowledge the new reality is really the amazing thing.
The city of Sacramento is projecting $200M shortfalls over the next five years, $58M in the coming fiscal year. So what’s the plan? Tap into the reserve fund to cover $20M of the shortfall, make modest reductions in services, and hope things look better in a year. Did I mention that a mayoral election is on Tuesday?
Yes, Florida is tapping or considering tapping its reserve fund. Not a good idea for a state so vulnerable to hurricanes. Anyway, it seemed to me like the more money Florida had for government, the worse the services became.
“It is still amazing how many local leaders are still making budget plans predicated on rising revenues streams.”
And who embraced the “mark to model” way of accounting the most?
A local government near you…
Here in the Central Valley of California, I could take you on a drive-by of dozens of failed housing developments (ground flattened, electricity in), each containing 20 to 50 homes that would have brought in around $2500 a year in property taxes, for every one of these non-existent homes.
developers going BK today….tomorrow the cities will go BK. there is a helluva lot more bubble in the govt budgets than there ever was in the housing bubble.
…and every house foreclosed on, is another missing $2500 in the revenue stream, which might appear to look like the Rubicon River, to many a city.
Florida doesn’t have an income tax, so most taxes are collected via property tax. During the bubble years municipalities were very quick to adjust prices upward. Really no idea what they did with all that extra money, probably blew it.
No I wonder if they’re just as eager to adjust assesments downward? I doubt they will because they simply can’t without going into BK. Gonna get interesting.
How much more dire would the fiscal situation be for state/local/county government if county assessors were more aggressive in adjusting appraised values downward? The sluggish decline in appraised values, in part due to the assessors, is still lagging market values keeping property tax revenues artificially higher.
I have a different perspective, Walt.
I think the sheer incompetence was the belief that housing prices can rise 20%, 30%, even 50% in a single year, and this represented “fair market value”.
The incomprehensible belief that somehow America had a new investment model, based on newly “rich” Americans and Foreigners, newly retiring “boomers” and a myriad of other excuses and rationalizations as to why is would go on forever, or even a few years, is simply beyond my ability to understand.
And what has driven me to the point of madness, is that all the hype-vendors and fantasy-selling Realtors, businessmen, and government officials led this parade. I stayed at home and watched on T.V. I thought it was a comedy/tragedy from an Old Greek tale, but no, it was real life, in real time and I am the one who was considered a “fool”.
Manias are what’s incomprehensible. They breed incompetence where only a little was once around.
Like a virus, they spawn new dreams and illusions, and make people believe that you can get something for nothing. It’s the worse belief system going.
We’re all in trouble now. Thanks, Alan Greenspan.
OT, but Universal Studios (Los Angeles) caught fire at approx 4:45 this morning. Some of the back lot, where movie filimg was going on is gone, and an eyewitness said some of the rides to the theme park have burned down. This is going to throw movie production schedules off, and close the park. One expensive insurance claim.
God, I hope the spinning ice tunnel where the 6 million dollar man confronted bigfoot was spared.
Do they still have the pool where Jaws comes after you? Surely that didn’t burn.
Did the Backdraft ride burn?
I heard the King Cong ride and Back to the Future ride burned.
The reason I bought up the Universal fire, is the insurance companies must have feasted on the sucuritized toxic trash, and I bet took a major hit. Who ever insures Universal is going to be paying out big bucks (10’s of $M’s). The film vault burned this morning. But, not to worry, they must have duplicates on most.
With poor air quality, they are opening the park. Attractions burned, but greed prevails, not to disappoint the tourists. They can see a lung specialist when they get home.
go figure
a renters market in nyc? it’s different here
http://www.nypost.com/seven/06012008/business/a_renters_market_113383.htm
sure it is- i was in long island city last night and there a new condo buildings everywhere and signs advertising posted on every fence near the subway
it should be a long hot summer for these greedy developers and the mindless drones who peddle their wares
I’m expecting 2001/2002 rents by next year.
Oh, and of course, this will have NO EFFECT whatsoever on the housing market.
Jersey City is f—ed.
You nailed it!
And JC is not even that marginal thanks to PATH. Don’t even get me started on the marginal neighborhoods.
(For anyone unfamiliar with New York, distances are measured in terms of “time” along fast transportation paths. That’s why two places could be close by physically but really hard to get from A to B “fast”, as in, to go do your job daily.)
I lived in one of the big buildings between the river the Newport Mall for years. The management company was pretty darn fair. Some years I even had a rent reduction offered to me right from the start because that is what their computer program said to do.
And I could get from the front door of my apartment to sitting in a lecture hall at NYU law school ready to take notes in 25 minutes. The PATH is a good transportation system. But there is still the whole Jersey stigma. If buildings in Manhattan are screaming for tennants, Jersey City is in serious trouble. Hoboken has a little more cache, but Jersey City? Not so much.
JP Morgan completes takeover of Bear.
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&date=20080531&id=8710867
May 30, 2008, 8:09 pm
Inflation: Why What You Think Matters
As with all self-fulfilling prophecies, inflation expectations play a huge role in determining future inflation. Why? Because firms have to make wage and price-setting decisions for future periods of time. If they think inflation is going to rise, they’ll raise their prices to compensate. Those higher prices are passed on to consumers, who demand higher wages in what’s known as a “wage-price” spiral in economics.
Right now, inflation expectations are on the rise. Consumers think inflation will be north of 5% over the next year based on various recent surveys, and treasury data shows investors’ expectations are rising as well (See related story).
I can see the wage-price spiral in certain industries.
Overall, with Chindia online? I don’t think so.
Just their (past) birthrate tells you how many jobs they need to create each month. (Incidentally, I understand that these are all unskilled labor. That’s why the “certain” industries part.)
Wages are pretty much anchored by the possibility of Chindian labor as a cheap substitute. This is why inflation now is likely to have a much different impact on housing prices than inflation in the 1970s, when labor contracts anchored to a credible CPI drove up wages along with everything else.
We’ve started to agree. This is getting spooky.
Modern day inflation is just going to result in an impoverished populace.
What that does to housing values, property taxes, pensions and retirements seems reasonably obvious.
About time the MSM started talking about inflation, even if it implies that its just a figment of our imaginations.
Now just wait another 12-18 months for some intrepid journalist to win a Pulitzer for discovering that the US government has been systematically understating inflation for the past few decades!
I can say from first hand experience, in the industry that I work in, raising prices to customers has gotten a lot easier. Inflation has become so prevalent, that customers now just accept the price increases. They’ve become accustomed to it. We should see inflation spike, in the next year, people are expecting it, paving the way for the increases that have been held back.
The low l-t T-bond yield conundrum is very persistent.
Finance & Economics
Buttonwood
Not so vigilant
May 29th 2008
From The Economist print edition
The puzzle of low Treasury-bond yields
Illustration by Satoshi Kambayashi
THE yield of Treasury bonds is arguably the single most important indicator in financial markets. Since the American government is unlikely to default, the bond yield sets the risk-free rate against which other assets are measured. It also serves as a barometer of investors’ feelings about economic variables like inflation and recession.
But precisely because it does so many things, the Treasury bond can send out conflicting signals. Consumers have been grumbling about the inflationary impact of higher oil and food prices for a while. But bond investors have only recently taken fright, pushing the yield on the 10-year Treasury bond above 4% on May 28, for the first time since the start of the year. Even now, however, the breakeven inflation rate (the difference between yields on conventional and inflation-linked bonds) on five-year Treasury issues is just 2.4%, within the range it has occupied for the past four years; compare that with the 7.7% inflation rate that American consumers expect over the next 12 months.
The fight over commodities regulation. The little guy will loose as usual.
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&date=20080531&id=8710858
“Lose”
“Facing mounting political pressure and farm industry demands, the CFTC is expected to outline measures to address the role played by new financial investors in the futures markets, the Times said, in particular those who invest through commodity index funds, which have grown from a $13 billion stake in 2003 to some $250 billion this year, it said.”
You have to be kidding me. The CFTC wants to blame the runup on commodities because of $250B invested through index funds? How many trillion is traded on the COMEX annually?
seems to me that the PTB’s in chi-town don’t want no competition. the want all the gravy for themselves.
Fewer dispute assessments of property
http://www.poughkeepsiejournal.com/apps/pbcs.dll/article?AID=/20080601/NEWS01/806010374/1006
Some people upset with rising school taxes, though, misdirect their anger at their local assessor - rather than at the school board which adopts the annual budgets.
“They come in saying ‘I want to grieve my taxes,’ ” Town of Poughkeepsie Assessor Kathleen Taber said. “But you can’t grieve your taxes. You can only grieve your assessed value.”
I grieve at the astounding disconnect. Homeowners complain about property taxes increasing and yet they almost always vote for increased school taxes.
And an equally astounding disconnect is how many people want to burn down the appraisers office, when, in fact, it’s the taxing bodies that are “sticking” it to them.
The appraiser just sets values people, it’s the taxing bodies that actually determine how much of your money they are going to “liberate” for the public good. That’s where their anger should be focused.
On a side note, I am now conviced that about 1/2 of the American population cannot read and comprehend material above the 4th grade level. Only with such a stupid populace can govt continue to tax in these totally non-sustainable ways.
You have tax revolts when people are struggling, but I believe this one will be a ’silent revolt.’ I feel for those that were doing the ‘right thing’ paying down their mortgages. Just think of how many people will ‘walk away’ when they see their next tax bill. This isn’t over… It is ‘pay your taxes or we put a lien on the house.’ I expect to see a ‘homeowner’ walk into an assesors office and just leave his/her house keys on the assesor’s desk. If you’re going to lose the home anyway, one might as well make a statement…
On a side note, I am now conviced that about 1/2 of the American population cannot read and comprehend material above the 4th grade level. Only with such a stupid populace can govt continue to tax in these totally non-sustainable ways.
Sadly I must agree.
Got Popcorn?
Neil
“On a side note, I am now conviced that about 1/2 of the American population cannot read and comprehend material above the 4th grade level. Only with such a stupid populace can govt continue to tax in these totally non-sustainable ways”.
You give the American people to much credit. 2nd grade at the most. The public school systems are nothing but an over price baby sitting service. All they do is screw the kids (sometime literally) as for education that is a thing of the past.
My wife creates training courses for a fast food chain. Her team was told to keep the level of english at 4th grade level for US.
I’ve never seen the people of our country so broke, and it got me thinking about barter becoming much more commonplace.
One thing about us Americans though, we never really learned how to bargain (a rare chance came when buying a new car, you could beat the dealer down 10 to 20% off of list price) and i’d guess throwing in this learning curve at this juncture, can only complicate things further.
Or they can skip the bartering and get it free:
http://www.freecycle.org/group/US/?noautodetect=1
I’ve never had to bargain for free.
OK, funny guy.
However, I like that place. I’ve given a lot of my crap away, and I’ve even gotten some good stuff out of it (mason jars.)
Only problem in New York (and other cities) is that you gotta be careful about the shady characters. However, in principle, it’s a great idea.
Here in Olympia freecycle is a great thing. My favorite reuse/reduce/ etc place is the Free Store, which is a wooden shack stuck onto the co-op over on the westside on Rogers ave., manned by volunteer hippies when they feel like wandering in out of the woods, and you just bring your stuff there and plunk it down and then go get your yogurt and by the time you’re back outside a bunch of cute little hairy Evergreen students are pawing through it. It’s super! AND last summer I got the most fabulous gaudy exciting lamp you ever saw. A sensible person could get retinal damage just looking at it, not even turned on. It’s right here next to me, right now. Turned on.
How’s the eyes Olygirl?
I signed up for freecycle because I knew I was going to have some stuff to give away. The overwhelming majority of the items offered were coupons. And by overwhelming majority I mean in the vicinity of 98%. Totally useless.
Hey you bachelors, this is a real advantage of marrying someone who grew up in the third world. I married a 4′11″ pit bull of bargaining.
“I’ve never seen the people of our country so broke, and it got me thinking about barter becoming much more commonplace.”
Sounds like you’re coming around to saying cash has some value after all.
For the time being, it’s the cat’s meow.
However, with real inflation running around 20% per annum, it’s buying power will dwindle to nothing in 5 years, if we merely stay the course.
“For every thing there is a season …”
http://www.sun-sentinel.com/news/local/palmbeach/sfl-flptaxes0601pnjun01,0,4616574.story
FL mill rates set to increase in response to amendment 1/SOH.
LOL. If anyone cares to look back, many of us predicted exactly this outcome from the crazy tax laws in place, and under legislation in FL. Once FL voters learn to read, we have a chance at real tax reform. Until then, expect more of this crap.
In Miami-Dade county.
Here’s the tax schedule from the house I rent for $1400. Nothing special. An older 2/2, about 1300 sqft in a so-so neighborhood.
Assessment Information: Year: 2007 2006
Land Value: $235,980 $235,980
Building Value: $77,760 $73,141
Market Value: $313,740 $309,121
Assessed Value: $313,740 $309,121
Total Exemptions: $0 $0
Taxable Value: $313,740 $309,121
…and here comes the tax bill:
Ad Valorem Taxes
Countywide $1,647
Unincorporated Municipal Service Area $0
City $2,471
State $207
School Board $2,494
Children’s Trust $132
Total Estimated Ad Valorem charges based on amount entered of $313,740 without Homestead Exemption located in Miami with a millage rate of $22.1551 per thousand. $6,951
Non-Ad Valorem Assessments
Folio 01-3124-017-0260 Property Address 177 NE 47 ST as of Tax Roll Year 2007
WASTE DISTRICT (305) 416-1570 $325
Total Non-Ad Valorem Assessments for Folio 01-3124-017-0260 $325
Total Ad Valorem taxes and Non-Ad Valorem Assessments $7,276
###############################################
That’s right, $7276 in taxes for a lousy 2/2 1300 sqft home. Add another $4000 for insurance and you’re getting close to $1000/month just between those two expenses. Interesting fact that the assesed value still increased from 2006 to 2007. Good thing I am not on the hook for those expenses.
Wanna buy some investment property in Miami? Guaranteed negative cash flow.
Local anecdote - stopped by a local roadside produce stand yesterday. The owner was talking to the elderly couple in front of me. “You folks from Florida? Where is the summer Florida crowd this year? I’m getting a little worried…..”
Seems to be much less summer traffic this year - usually a problem around here - older drivers, big SUV’s and narrow mountain roads.
where are you?
north georgia? north carolina? the usual spots for Floridians looking to escape the heat…
Another local anecdote, from my trucker friend, phoned in from Tomah, WI where I-90 and I-94 split: very little auto traffic for a Sunday evening (most unusual) and slight decrease in truck traffic. He’s been driving this route for 20 years.
Can anyone who lives closer to The Street than I offer insight to this LIBOR flap?
What’s the recent controversy about?
With the aftereffects of the credit crunch lingering, a high Libor, especially relative to U.S. Treasuries, would set off alarm bells that capital-starved financial institutions are still at risk for further meltdowns, says market research firm Global Insight’s Brian Bethune. Some industry insiders have accused the banks of quoting falsely low rates for the surveys in order to force down Libor and paint a rosier picture of the lending environment. It’s more likely that the banks are simply reporting their best rates, not the rate at which they’re most commonly lending, Bethune says. The BBA is conducting what it calls “a regular review,” with results due May 30. In the meantime, proposals have been offered to ensure Libor’s accuracy, from surveying more banks to ditching Libor in favor of an alternative rate.
If I offered you the first burrito for $0.01, and all subsequent ones for $1000, and you ABSOLUTELY need to eat four of them or die, did the burrito actually cost $0.01, or was the true cost closer to $750?
Hope that helps. I aim to please.
My analogy:
Let’s say I was the boss at a corporation that gives everyone a small raise every year, and the way I assigned bonuses was to wander through the party at Xmas-time and survey workers on how many presents they they could afford to get their kids.
After awhile, a group of workers figure this out and start lying, saying their kids aren’t getting any toys this year. On Xmas, they get a large enough bonus that it effectively doubles their salary.
Pretty soon, people slack off all year, but show up at the Xmas party and are able to make their yearly salary. I continue to pay these bonuses, even though my company is going bankrupt.
If I offered you the first burrito for $0.01, and all subsequent ones for $1000, and you ABSOLUTELY need to eat four of them or die, did the burrito actually cost $0.01, or was the true cost closer to $750?
————————————————————————
IMO, it all depends on whether or not you got paid. A starving person would kill you and eat them for free. IMO, this would be analogous to the credit derivatives market. A lot of institutions/individuals are going to get get eaten alive. <:()
If I understand your point, then is it possibly the case that only the $0.01 burrito price was reported by certain of the Libor panel members, with the $1000 burrito purchases kept hidden under the living room rug along with all them other elephants?
From the article: “Libor is a global interest rate benchmark that’s used to set rates on $150 trillion worth of financial products.”
Oh, so now the quoted number is $150 trillion. A couple of weeks ago this number was $62 trillion. Then the number jumped to $350 trillion. Now we’re at $150 trillion.
I’m convinced nobody on the planet has a clue of what this number actually is, this number involving TRILLIONS OF DOLLARS.
So let’s get this straight: The borrowing rates reported by a sixteen bank LIBOR panel collectively determine the interest rates on $62 trillion, or $150 trillion or perhaps $350 trillion dollars worth of financial products. What is wrong with this picture???
I’ve been watching our local paper’s Sunday RE section closely ever since I found HBB last August, and all the paper runs is fluff like this (online from a different paper).
Never anything in this section about any RE distress, even generalized in the US but not here. It’s uncanny. Like, if we pretend nothing’s happening, Missoula will jump on the turrets-and-towers bandwagon. Unbelievably inappropriate.
There was a mall near my home town that had a crenelated false wall on the facade. Where Sharon, Canton and Stoughton MA meet up. We always wondered if they were planning an attack on the bakery or the Kosher butcher across the street. It was good for a laugh.
That’s America for you. Usually, you have to get a permit from the king to put up a crenellated wall.
The people who write that stuff eat potpourri from a feedbag.
This must have been posted here before… but just in case:
http://www.burbia.com/node/1815
Looks like a “buy” - Suzanne researched this.
Hee Hee! “Excellant except for asbestos!”
How can loose lending standard objectives possibly be achieved without the advantage of in-house appraisals?
Fannie, Freddie Appraisal Agreement May Violate Law (Update2)
By Dawn Kopecki
May 27 (Bloomberg) — Fannie Mae and Freddie Mac’s agreement to restrict banks from using in-house appraisal companies may violate federal law, U.S. Comptroller of the Currency John C. Dugan said in a letter to the companies’ supervisor.
The two companies, which own or guarantee about 45 percent of the $12 trillion in U.S. home loans, made a deal in March with New York Attorney General Andrew Cuomo and the Office of Federal Housing Enterprise Oversight to stop buying mortgages from lenders that use in-house home appraisals for their loans.
The agreement and new appraisal code “violate or conflict with federal law in fundamental respects” and should be withdrawn, Dugan said in a letter to Ofheo Director James Lockhart. The Office of the Comptroller of the Currency, which regulates national banks, has “substantial concerns about the unintended adverse consequences” on U.S. banks, he said.
The OCC is joining mortgage and appraisal industry groups and the Office of Thrift Supervision in criticizing the deal, intended by Cuomo and Ofheo to make home valuations more accurate by separating them from the lenders making the loans. Reworking the agreement could make it harder for Fannie Mae and Freddie Mac management to address other investor concerns such as the $7.1 billion in cumulative losses Fannie Mae has posted over the last three quarters, analysts said.
It seems odd that the basis for the OCC’s criticism of Cuomo’s GSE agreement is that consumers would supposedly be hurt if GSEs stopped buying mortgages from lenders that use in-house home appraisals for their loans. Maybe I am missing something here, but I thought lenders using in-house appraisals was a key factor behind bloated appraisals that encouraged home buyers to catch themselves falling knives?
OCC Undermines OFHEO’s Appraisal Agreement with NY AG
Kerri Panchuk | 05.27.08
Regulator Faults Appraisal Plan
May 28, 2008; Page A3
A plan by New York Attorney General Andrew Cuomo to address inflated home appraisals would raise mortgage costs for consumers and should be withdrawn, a top U.S. banking regulator said.
The memo from the Comptroller of the Currency to the regulator of Fannie Mae and Freddie Mac suggests the proposed rules would violate federal law. “The code would impose a dramatically different new set of operational standards for appraisal practices on a national scale that would conflict with and effectively supercede the comprehensive federal scheme established by Congress,” Comptroller John Dugan said in the letter to the Office of Federal Housing Enterprise Oversight.
What is so bad about a little consumer protection against appraisal fraud?
Regulator Criticizes Appraisal Agreement
By THE ASSOCIATED PRESS
Published: May 28, 2008
WASHINGTON — The regulator who oversees national banks is protesting an agreement by the mortgage buyers Fannie Mae and Freddie Mac to stop buying loans involving lenders’ in-house appraisers, a deal intended to protect buyers from fraudulently inflated home prices.
“What is so bad about a little consumer protection against appraisal fraud?”
Nothing. But you can be sure the wealthy elite defending screech monkeys will wheel out the “government regulation” hobgoblin.
Nothing wrong with taxpayers and consumer protection ,in fact that is what is suppose to be done . But how can you pass off junk paper to the taxpayers if you required good appraisal practice on the loans . In fact ,you need to chance all the rules in order to pull this baby off .
They hate regulation
but they love to put their snouts in the public feed bucket and eat everything including the wafer thin mint.
Excellent article, PB!
Let’s not forget the stock bubble (IMO) and credit/bond bubble. Everything is over-leveraged and the credit contraction (if allowed to happen) will be devastating (and very necessary!) in many ways.
The Fading of the Mirage Economy
By Steven Pearlstein
Wednesday, May 28, 2008; Page D01
…
Most of us understand that an overabundance of cheap, easy credit created a housing bubble that artificially inflated the price of land and housing, produced too many homes and homeowners, and persuaded too many Americans to dip into their home equity to support a lifestyle their income could not sustain. Now that the bubble has burst, we are coming to accept the reality of lower prices, reduced production, declining homeownership rates and the wisdom that a house is not an ATM or a substitute for a retirement fund.
Put another way, residential real estate is finding a new equilibrium, that magical place in the economist’s imagination where supply and demand of houses and mortgages come back into some sort of rough balance at a lower price.
But the thing to remember is that it’s not just residential real estate. The same factors that were behind the housing bubble were also at work, to varying degrees, in the auto bubble, the commercial real estate bubble, the travel bubble, the college tuition bubble, the retail bubble, the Web 2.0 bubble and most recently the commodities bubble. Unlike housing, which began losing steam two years ago, these other sectors have just begun the painful process of repricing and finding a new balance between supply and demand.
If our nation’s top economic leaders are on board with this perspective, I sure missed the news…
Good and realistic article. Thanks!
I agree - very good article. The universal field theory of “easy credit” explains alot.
On a side note from the article, I *hate* flying. I’d much rather take any form of ground transport. I always thought that airline prices were waay too low. How can flying be cheaper than slower forms of transport? It turns out, in the “real” (non easy credit/cheap oil) world, it isn’t. Soon I’ll be able to justify my preferred modes of transportation via economics.
Ground transportation has its own overhead. You don’t need to maintain a freeway system in order to allow planes to fly.
Makes me want to short the market a bit more.
Fannie Mae, Freddie Mac MBS skewing key bond index
Wed May 28, 2008 1:04pm EDT
By Al Yoon
NEW YORK, May 28 (Reuters) - Rising issuance of Fannie Mae and Freddie Mac mortgage-backed securities has pushed the share of the debt in a key bond index to record heights in recent months, presenting new challenges to investors.
The so-called “agency” MBS have climbed to 39 percent of the Lehman Brothers U.S. Aggregate Bond Index in recent months, up from about 35 percent in early 2007, said Joseph DiCenso, a Lehman fixed-income strategist in New York.
1960’s Fallout: Radiation
2000’s Fallout: Foreclosure
Not only is the CONgressional bailout plan immoral and regressive (taxing renters to subsidize high-end housing), but it is likely to fail if the objective is to respike the home price appreciation punch bowl.
Bailouts rule the day
From farms to mansions, feds assume the risks
By Deroy Murdock
Saturday, May 31, 2008 - Updated 1d 13h ago
Hot on the heels of its $307 billion farm-subsidy orgy, Congress barely caught its breath before plunging back into another multibillion-dollar spend-a-thon. The next targets of its affection are mortgage holders, soon to be seduced with other people’s money. Maddeningly enough, part of this courtship will be billed to America’s 83 million equity-starved renters who only fantasize about home ownership.
The House has approved and the Senate will consider legislation to provide federal insurance for $300 billion in refinanced home loans. Taxpayers will have to shell out hard cash if borrowers default on this government-guaranteed debt. This program is expected to cover just 500,000 to 1 million homes. Thus, these taxpayer-insured mortgages would average $300,000 to $600,000. This is not exactly low-income housing.
It’s not just renters and the poor who should be outraged! Anyone who had no part of the bubble should be outraged. I’m a homeowner, and I’m outraged over any plan to bail out any specuvestor or subprime borrower.
This is a disguised bank and financial industry bailout. CONgress doesn’t give a **** about homeowners.
Any true advocate of affordable housing would require any government backed mortgage to require 20% down and finance no more than 3.5x income.
Prices will become affordable in 2 years for everyone. With no bailouts!
Any true advocate of affordable housing would require any government backed mortgage to require 20% down and finance no more than 3.5x income.
——————–
Amen!!
OK! I just did the math. Let’s say they have to pay out on 10% of the guarantees. That’s
$30,000,000,000
There are about 100 Million Taxpayers in this country. Half of those pay 96% of the taxes, so we’ll say 50,000,000. That’s $600/taxpayer
So not only did I not get my $600 stimulus check because I’m too hard-working for the likes of Congress, I just got a $600 “de-stimulus check”. **** YOU, Congress!
Aussie la vista, baby…
Australia’s Iraq Combat Operations Have Ended
http://www.huffingtonpost.com/2008/06/01/australias-iraq-combat-op_n_104521.html
They decided to cut out the middleman (housing) and shop direct.
http://www.suburbanchicagonews.com/heraldnews/news/980228,4_1_JO31_WIRE_S1.article
Interesting article in today’s (6/1) Times
http://www.nytimes.com/2008/06/01/business/01town.html
These folks, with no sub-prime mortgage, and a substantial down payment, are having trouble selling their NC house. (The house look nice from the photo, etc). Its been up for sale for a year.
While the article tries to paint a sympathetic portrait of them, this statement struck me:
The couple’s agent told them she would be shocked if it didn’t sell within 30 days. After all, the Schneiders had owned five previous homes over the past decade, all of which had sold in the first month for more than the couple had paid.
So these folks made money 5 times in the past decade, selling houses. (Why people who move this frequently buy each time is a mystery to me).
So I don’t feel too sorry for them if they have to take a 100K or 200K haircut this time! What do these people want? Granted they’re not as “guilty” as our typical strawberry-picker-with-5-mortgages, but they’re going to get a tax break on the forgiven debt thanks to the “Deadbeat Specuvestors Tax Forgiveness Act of 2007″. What more do they want?
These people thought that the strategy of buying homes when they logically should be renting (because they knew they’d only be staying for a year or so) would work forever. Given the 6% cost just to sell a house, that means they were betting on huge yearly gains forever!
And when you’re BETTING you should be man enough to lose your bet without crying to the New York Times.
(Also, if they lowered the price enough, the house would have sold quickly. If I needed to sell a house, I’d find the cheapest that a house in my area–a true comp–sold for in the last couple of weeks, and price mine 10% less.)
Lower the price to five percent below market value, and they can sell by tomorrow…
The Libor and credit-default swaps rates have been diverging since late January, when the credit crunch was worsening and central bankers at the Federal Reserve and elsewhere started pulling out all the stops to calm the tumult. The BBA says Libor is reliable and that many financial indicators have acted funny during the crisis, while the Journal cites a number of reasons offered by analysts to explain the risk-rate disparity it finds: Lending between banks came to a halt for months amid the uncertainty, which added some guesswork to the borrowing-cost estimates; or Citigroup and others’ ability to tap their customers’ cash deposits and extra funds from the Fed could have reduced their borrowing needs.
Still, the Journal says, five banks in particular had wider gaps than the 11 others: Citigroup, WestLB of Germany, HBOS of Britain, J.P. Morgan Chase and Swiss lending giant UBS. And “one possible explanation for the gap is that banks understated their borrowing rates,” the paper says. “If dollar Libor is understated as much as the Journal’s analysis suggests, it would represent a roughly $45 billion break on interest payments for homeowners, companies and investors over the first four months of this year. That’s good for them, but a loss for others in the market, such as mutual funds that invest in mortgages and certain hedge funds that use derivative contracts tied to Libor.“
Is there any chance “pulling out all the stops” could have included offering loans at below market (LIBOR) rates, which would have been subsequently reported by affected LIBOR panel banks at levels below the price implied by default insurance rates?
Dang these elephants are hard to hide under the living room rug!
Libor Proxies Gain as Traders Seek Truth With Swaps (Update4)
By Liz Capo McCormick
May 29 (Bloomberg) — Traders are starting to use alternative measures for borrowing costs as the British Bankers’ Association struggles to keep the London interbank offered rate as the global standard.
Libor, the benchmark for 6 million U.S. mortgages and more than $350 trillion of derivatives and corporate bonds, has been called into question since the Bank for International Settlements said in March some lenders may have understated borrowing costs to keep from appearing like they are in financial straits.
One option growing in popularity is overnight indexed swaps, a gauge of expectations for central bank rates. The Federal Reserve uses the one-month OIS rate to set the minimum bid level when it lends cash to banks through its Term Auction Facility. The Fed has auctioned $510 billion through the TAF since December.
“The OIS rate is something I look at a lot more closely than I used to,” said Nish Popat, head of fixed income in Dubai at Emirates NBD PJSC, the Persian Gulf’s biggest bank by assets. “It gives you a better idea of where the lending and borrowing level between banks is and it’s a market-traded price.”
I have said this before, and I hope to periodically keep saying it until someone in a position to act on this tidbit of information gets it and acts on it: The banking system’s most valuable form of capital is trust. Destroy trust, and you burn the chair legs out from under the financial system.
The fact that traders are scrambling to find market-based LIBOR proxies suggests that trust in the LIBOR is currently in severe peril.
Libor Status Quo May Spur Market `Dislocations,’ Alternatives
By Liz McCormick and Ben Livesey
June 2 (Bloomberg) — The British Bankers’ Association’s failure to change the way it calculates the London interbank offered rate may cause “dislocations” in money markets and send traders in search of alternative benchmark interest rates.
Following a two-month review of its rate-setting process, the London-based BBA said May 30 it would increase “oversight” of Libor rather than alter how the rate is set. “Details will be published in due course,” the association said in an e-mailed statement. Financial products worth about $150 trillion are indexed to Libor, according to the BBA’s Web site.
The BBA has been under fire since the Bank for International Settlements said in March the banks that set Libor understated their borrowing costs to avoid speculation they were in financial straits as losses in credit markets mounted. The decision may further erode confidence in Libor’s accuracy and in the 16 banks surveyed daily about their borrowing costs.
“I now expect dislocations in the money-markets to continue,” said Kornelius Purps, a fixed-income strategist at UniCredit SpA in Munich. “The BBA has spent the last six weeks investigating this and I would think they will take at least another month.”
This concept that we have to bail-out gamblers that expected real estate to continue upward forever is absurd . The fact that this couple believed a bunch of cheerleaders for real estate appreciation has no bearing on their
bad choices . Just because you made money on one investment during one time period doesn’t mean you will always come out ahead during every time period . In general ,it takes a number of years of ownership to offset the cost of buying and selling a property .
One of the alarming aspect of this housing bubble is that you had so many of the buyers needing to sell within 2 years of purchasing . It is absurd to think that you would come out ahead that soon after buying ,(unless you were relying on the Ponzi-scheme that was promoted by the industry ).
These people feel like victims because they believed the commissioned sales people and the advertisers and builders . Vegas is always advertising that you could win the big million dollar slot play ,so does that mean we bail out the gambler that loss trying to win the big million dollar slot
play?
I think it violates the Constitution to bail-out speculators and it discrimination to renters and anyone else who didn’t gamble or lie on their loan application ,or even people who got priced out of the market .
If the lenders made bad loans ,than its their problem to deal with their faulty lending and inability to control fraud . You people aren’t pissed now ,but you will be when your taxes are raised to cover these bad loans .
“…but you will be when your taxes are raised to cover these bad loans .”
I don’t see why higher taxes are necessary. Why not just print more monies and use currency dilution (inflation / devaluation) to get the job done, as it is less noticeable to J6P and hence more politically palatable? What’s more, if the Fed does the dirty work through stealth taxation, then no elected official needs to take the blame.
PB. Right ,we are already being taxed by the inflation that the Fed policies are causing . I predict that the government is going to also raise taxes to cover part of this bubble fall-out .
MARK HULBERT
Sanguine about gold
Commentary: Gold timers showing no sign of concern, and that’s a bad sign
By Mark Hulbert, MarketWatch
Last update: 10:53 p.m. EDT May 29, 2008
ANNANDALE, Va. (MarketWatch) — It happened again on Thursday.
I noted earlier this week that gold-timing newsletters were being strangely jubilant in the face of weakness in gold’s price, and that according to contrarian analysis this was a bad omen.
Believe it or not, I can say nearly the same thing now, despite two more days of steep drops in the price of gold bullion.
Take recent readings of the Hulbert Gold Newsletter Sentiment Index (HGNSI), which reflects the recommended gold-market exposure among a subset of short-term gold-timing newsletters tracked by the Hulbert Financial Digest. As of Thursday night, the HGNSI stood at 33.2%, exactly where it stood seven trading sessions previously–despite gold dropping over this period from $933.20 per ounce to $881.20. (These prices are from the August COMEX gold futures contract for August delivery.)
In other words, the average gold timer is not treating a decline of over $50 as any reason to reduce his recommended gold exposure.
It’s a buying opportunity!
Like JDSU was at $100!
How’d that work out?
US staring at double-dip recession as calls for higher interest rates grow
By Liam Halligan
Last Updated: 7:57pm BST 01/06/2008
US economy goes bang:
(click to enlarge)
Since the sub-prime crisis broke last summer, America’s Federal Reserve has dropped rates by 325 basis points - all the way down to 2 per cent. But looser money, along with sky-high oil and food prices, has cranked up US inflation, which now stands at 3.9 per cent.
In real terms, American borrowing costs are firmly in negative territory. No wonder the markets are wondering if Ben Bernanke, Fed chairman, has made a grave error.
A growing band of analysts has been arguing the Fed should have handled the credit crisis in the same way as the European Central Bank - injecting liquidity into gummed up money markets, rather than lowering rates. Last week, such criticism got much louder.
The US is now suffering from the aftershock of the irresponsible policies of Alan Greenspan. By keeping rates too low for too long following the terrorist attacks of 2001 and the dotcom crash, Bernanke’s iconic predecessor may have pleased his political masters, but he also pumped up America’s gigantic real estate bubble.
How much longer will this grand Kabuki dance of subprime losses continue to play out?
June 1, 2008 7:47 P.M.ET
BULLETIN
Subprime hammers Japan
Financial institutions incurred more than $18 billion in losses from exposure to U.S. subprime mortgages in the just-ended fiscal year.
Market slump halves Japan firms’ stock profits
Nikkei: latent losses outpace that of benchmark index in same period
By Lisa Twaronite, MarketWatch
Last update: 2:35 p.m. EDT June 1, 2008
SAN FRANCISCO (MarketWatch) — Japanese listed companies’ unrealized gains on stockholdings plummeted 47% to 7.19 trillion yen ($69.12 billion) in the fiscal year through March, according to a published report.
That was a far steeper decline than the 28% drop in the Nikkei Stock Average during the same period, according to a Nikkei survey on the business daily’s Web site Sunday.
US mortgage rates leap ahead
By Michael Mackenzie and Saskia Scholtes in New York
Published: June 1 2008 19:43 | Last updated: June 1 2008 19:43
US mortgage rates soared last week amid a sharp rise in Treasury market yields, as investors started to bet that inflation pressures could prompt the Federal Reserve to raise interest rates later this year.
The sell-off pushed rates on 30-year fixed-rate mortgages to an 11-week high of 6.02 per cent, up from 5.81 per cent a week earlier, according to Bankrate.com. Meanwhile, the so-called “jumbo” mortgages – or those for loans above $417,000 – rose to 7.21 per cent from 7.05 per cent.
This means that the borrowing rates on many home loans in expensive areas, such as California, Florida and New York, are now running at heights last seen in mid-April – or just before the government-backed mortgage financiers Fannie Mae and Freddie Mac began buying jumbo loans, in an attempt to support the market.
The surge in mortgage rates will make it more expensive to buy homes and less likely that existing homeowners will be able to refinance mortgages. That, in turn, is likely to damp hopes of an early recovery in the US housing market.
Thanks Housing Bear and Wizard for those great posts!
KEVIN KERR
The dollar is a victim of globalization
Commentary: Gold bars and a strong lock might be the best answer
By Kevin Kerr, MarketWatch
Last update: 12:01 a.m. EDT June 2, 2008
PAGE ONE
TAPPED OUT
Pinched Consumers Scramble for Cash
By ELEANOR LAISE
June 2, 2008
After a long binge of borrowing, U.S. consumers face a credit crunch and a sagging economy. To sustain their living standards, many Americans are doing what comes naturally: scrambling to raise more cash.
Number of Foreclosed Homes Keeps Rising
Lenders Cut Prices
To Jump-Start Sales
As Inventory Grows
By JAMES R. HAGERTY
June 2, 2008
The number of foreclosed homes owned by lenders continues to rise despite signs that they are increasingly willing to slash prices to sell those properties.
Lenders and investors in mortgages owned about 660,000 foreclosed homes in April, up from 493,000 in January and 231,000 in January 2007, according to First American CoreLogic, a research firm based in Santa Ana, Calif., that collects data from lenders and county clerks. The April total works out to about one in seven previously occupied homes available for sale nationwide.
Investors Seek Some Solace In Limp Data
By Mark Gongloff
Word Count: 499
Like the five stages of grief, there seem to be five stages to Wall Street’s acceptance of the economy’s fate.
The first stage was denial, when an incipient credit meltdown and the biggest housing-market swoon since the Depression were greeted last fall with new records in the Dow Jones Industrial Average and the S&P 500. Some are still in this phase, gamely arguing that a housing collapse is nothing much to worry about, but they’re scarce.
How is it that oil prices surging past $133 a barrel does not constitute a “big financial shock?” Got inflation?
Six principles for a new regulatory order
By Lawrence Summers
Published: June 1 2008 19:12 | Last updated: June 1 2008 19:12
After a modest interval with no big financial shocks, policy attention is turning to the task of preventing future crises and managing those that occur. While the deliberations will take quite a while to play out, there is some time pressure – because of the moral hazards created by the Federal Reserve’s extension of credit to investment banks and authorities’ desire to act before the sense of alarm created by recent events abates and complacency returns.
Plan to make complex debt more expensive
By Gillian Tett in London
Published: June 1 2008 23:31 | Last updated: June 1 2008 23:31
International regulators and supervisors have started drawing up plans to make it far more expensive for investment banks to hold large volumes of complex financial instruments, such as mortgage-linked securities, in their trading books.
The move is intended to prevent a recurrence of the type of massive, unexpected losses that emerged at banks such as UBS in recent months, as a result of the subprime turmoil in the US.
The new measures, which are being spearheaded by the Financial Stability Forum – a committee of global regulators and supervisors – could force banks to rethink the business models they use to repackage assets such as mortgages into complex financial securities.
In particular, supervisors believe that the rules will reduce incentives for banks to engage in so-called “warehousing” activities – the practice of keeping repackaged assets inside a bank for an indefinite period, before selling them to outside investors.
One senior western policymaker said: “These changes are significant. They are definitely going to make some warehousing activities more expensive.”
What does this story portend for jumbo elephant-sized U.S. mortgages in a globalized financial system?
Banks shut the door on £1m-plus mortgages
By Matthew Vincent and Sharlene Goff
Published: May 30 2008 20:16 | Last updated: May 30 2008 21:05
Multi-million pound mortgages from high street lenders are heading for extinction, mortgage brokers said yesterday, as banks impose tough new limits on how much they will lend, or charge steep arrangement fees of up to £40,000.
Abbey, Nationwide, Chelsea and Intelligent Finance have all slashed the maximum amount they will lend in recent months, while mortgages for £2m and more at the Halifax, Bank of Scotland, and Birmingham Midshires brands carry fees running to tens of thousands of pounds.
“Million-pound-plus mortgage deals are becoming virtually extinct as lenders turn their backs on the upper end of the market,” said Gary Festa, director of wealth manager and mortgage planner HFM Columbus. “Assuming you can find a lender prepared to arrange a loan in excess of £1m – and we are talking about barely a handful – the fees become crippling, even for those with up to 50 per cent loan-to-equity.” He cited a £2m mortgage offer from Halifax needing a £40,000 arrangement fee upfront.
Q. What is a subprime car?
A. The kind of car owned and operated by subprime drivers.
Finance dries up for subprime car buyers
By Tom Burgis and Sharlene Goff
Published: May 23 2008 20:31 | Last updated: May 23 2008 20:31
Thousands of hard-up British motorists are being locked out of the car market as risky credit seizes up, raising fears for dealers who cater to subprime drivers.
The bottom rung of the vehicle credit market – which used to serve those with battered credit histories – “has ceased to exist in the UK”, said Robert Forrester, chief executive of Vertu Motors, which owns 46 UK dealerships.
Last month, Welcome Car Finance, an arm of subprime lender Cattles, withdrew financing from hundreds of car dealerships to focus on its own outlets.
Land Registry shows downturn gathering pace
By Delphine Strauss
Published: May 31 2008 04:29 | Last updated: May 31 2008 04:29
House price inflation slowed for the eighth successive month in April, the Land Registry said on Friday, confirming evidence from mortgage lenders that the housing market downturn is gathering pace.
Its index showed prices fell 0.2 per cent in April, the third consecutive monthly drop after declines of 0.8 per cent and 0.1 per cent in March and February.
It is the first time the Land Registry’s index, based on residential sales since April 2000, has shown a quarter-on-quarter fall in prices.