Bits Bucket For June 6, 2008
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Frank-Dodd Rescue Prolongs Housing Crisis…
Credit Crisis
“If you change contracts, you call into question whether future agreements will be fulfilled,” Deutsch said. “If investors don’t believe contracts will be fairly upheld, the credit crisis in America will extend much, much longer than it would.”
More than moral pressure will be used to persuade investors to reduce the principal, said Frank, chairman of the House Financial Services Committee, in an interview last week.
Yep, More Gubmint intervention always cleans things up. Old Barn should do everyone a favor and go home and back to pimping out his boy friend.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aKlXIcX4YHzk&refer=news
Yep, let’s bail em out so we can bail em out again…
“More than moral pressure will be used…”
Pretty thuggish words coming from a Dimocrat.
Bloomberg Radio reported one of the NAHB schmucks stated that Franks plan would prolong the downturn. Sounds strange coming from a greedy shack builder.
–
Would you sat that our “Gubmint” is morally sub-prime?
Jas
Reminds me of the end of the movie “The Incredibles” (we’ve been watching recently with our daughter), when the next villain comes drilling up from out of the ground - “I am THE UNDERMINEEERRRRR!!! I am always beneath you - but NOTHING IS BENEATH MEEEE!!!!”
Oh c’mon! That’s a great movie. No need to use your daughter’s presence as rationalization for watching it!
Oh c’mon! That’s a great movie. No need to use your daughter’s presence as rationalization for watching it!
The scene where Samuel L. Jackson’s character, Frozone, asks his wife where his “super-suit” is while a robot attacks the city is hilarious.
Frozone: “Honey, where’s my super-suit?”
Wife: “Why do you need to know?”
Frozone: “Just tell me where my suit is woman! The public is in danger!”
Wife: “My evening is in danger!”
Frozone: “We’re talking about the greater good!”
Wife: “I’m the greatest good you’re ever gonna get!”
LOL - yes it is a great movie. Lots of funny takes on American society in there.
Kids: “Are we there yet?” (as they’re flying in the Winnebago in the rocket to encounter the bad guy)
Bob: “We’ll get there when we get there!!!“
‘Declining home prices will mean that one-third of those borrowers will default again, prolonging the deepest housing crisis since the 1930s, said Michael Carliner, former economist at the National Association of Home Builders in Washington.
“Clearly, if you recast the mortgage lower and it still goes bad, you’re just prolonging the agony and making the loss severity worse than it is now,” said Castro, formerly chief credit officer at GSC Group and managing director of structured finance research at Merrill Lynch & Co.’
It would be a sad irony if the “save our homes” foreclosure bailout plan merely served in retrospect to ensure that the knifecatchers get to live in their homes for a few more years before discovering that they are again underwater, even after write downs. But I guess there is no reason taxpayers could not all be asked to chip in for another bailout a few years down the road?
It would be great if the bailout plans keep them in their homes at least for the next year or two. At the rate I am saving and prices are dropping, I could pay cash by then.
Wouldn’t you rather have the banks take possession? At least the banks are likely to eventually lower the prices to a level the market will bear.
PB
Would you mind e-mailing me at jo7878 at A O L dot com?
Oil rising again, the buck’s fallin…
http://www.bloomberg.com/apps/news?pid=20601087&sid=aV2ZR71o4rUQ&refer=home
Expect an “unexpectedly positive” jobs report this morning which will continue the rally in my former (yes, former) neighborhood. How many lies can we be told?
Hey you just gotta MASSAGE it a bit to get what ya want…
The only part I believe is the 17,000 new gov jobs. CNBC reports that most of the decrease overall is due to “teenagers”. What???
how many private (taxed) workers does it take to feed a gov worker?
20 ?
health and education are 50% gov
And take a look around…Airlines cutting jobs, Auto cutting jobs, construction cutting jobs, retail cutting jobs…Why don’t we see “Goverment” cutting jobs ?? The gig is broken and I have no clue (short of a outright depression) whats going to change it…
I remember reading a report back in 2005 or 2006 that showed how weak job creation was in the period following the 2001 recession. The report mentioned that most of the job growth in this decade came from two industries: housing related and heathcare related….housing related probably included both homebuilders as well as the companies involved in the financing of the bubble (Countrywide, etal).
I believe like most folks on this blog that we’re in for a rough ride and I think we’ll see the unemployment rate reaching 10% or so within the next 18 months.
Yep, they called it the jobless recovery…..
I’ve been wondering how the healthcare industry is going to hold up.
With boomers hitting retirement, more people will require it but if the funding isn’t there couldn’t there be a contraction in that industry in the future as well?
Perhaps my (and my husband’s) stand is peculiar, but we prefer to work toward our own good health as much as possible, to insure for the unexpected, like a car crash, and when it comes to crazed, horrifically expensive medical procedures to extend a life which contains nothing we describe as quality, we say die.
We’re old enough to have stared this in the face and accepted we wouldn’t want it any other way.
I don’t think you’re peculiar Mary Lee.
I have written orders to pull the plug w/o any extras and have made sure the bleeding heart relatives that would get in the way and leave me to suck my family dry w/o any added quality of life will not know till its over.
Also told my husband to take me out to sea on a sailboat and dump away. Then I want an Irish wake where people can eat, laugh, and remember all the goofball memories instead of a dreary funeral .
I like you already, Mary Lee. I agree wholeheartedly. Those who deperately want to extend their lives unnaturally beyond the average life span should have to cough up the money themselves in order to do so.
Those in increasingly feeble condition who expect unnamed others to pay for their infirmity are among the greediest people in the world.
Want to live beyond the norm? Save your money.
“The only part I believe is the 17,000 new gov jobs”
Here’s the “Official” breakdown:
x1 …SEC Enforcement Officer
x 16,999 …TSA Agents
So where are you now, NYCBoy? Have you seen the light and decided to move to NW PA??
Just call me OilCityBoy.
You mean you want to be oiled up?
Is there any data that captures the number of unemployed illegals who had been doing home construction? It has to be a huge number.
FOR several years two rules have governed America’s dollar policy. The first was that only the treasury secretary talked at length about the greenback. The second was that he repeated a vacuous mantra about a strong dollar being in America’s interests, even as everyone knew policymakers quietly welcomed its slide.
No longer. American officials are worried about the dollar.
http://www.economist.com/finance/displaystory.cfm?story_id=11506822
Yes, I was wondering how all of the oil bears are doing with their DUG.
I exited at the end of last week with a tidy profit.
In other words, it was a scalp.
It was a “don’t get greedy” move.
That said, it’s starting to look like another “scalping” opportunity.
Two Fed Presidents Warn About Lending… It’s a little late, wouldn’t you think boys? I guess they are just trying to separate themselves from the shit storm heading our way!
http://www.nytimes.com/2008/06/06/business/06fed.html?ref=business
I’m happy at least the counter argument is out there while they can work a reversal. At least they didn’t pull a Scott McClellan.
I guess, but Scott McClellan wasn’t in the same type of position as a Fed President.
“All is well” We may only need $5,000,000,000…
http://www.bloomberg.com/apps/news?pid=20601087&sid=aCv.u69fG_eU&refer=home
It’ll be interesting to see if they find investors/suckers to jump into that mess. If I had that kind of funding I’d sure could think of a better home for my money than some failing investment bank.
I am usually too busy by the time the Weekend Topics comes out. So here goes my suggestion. Yesterday an older co-worker (late 60s) and I were talking. The election came up and he said something disparaging about the candidates (easy to do). I said something about not having the bar set too high by the current guy. He said, “are you better off now than you were before he was in office?”
I replied, “that isn’t really the question. Of course you and I are much better off. But at what cost? I’m more concerned about the country than my personal situation and I don’t think my country is better off.” It was like I had taken out a buffalo gun.
I am much better off financially than I was in January 2001. None of that has to do with this Administration. Marriage has had more to do with my situation than anything else. My wife and I work well together and share common goals. We have worked hard and did not participate in the housing bubble.
My weekend topic suggestion is, “are you better off since the new millennium began on January 1, 2001?” I would bet that most people on this blog are better off. If so, why are we better off and will we be better off in January 2013?
If you sit down and do the numbers, the real numbers no one is better off…$4.55 at the pump for gas…no one is better off…the tanking of the dollar, which means that piece of paper in your pocket is worth less and less as each day goes by…how can anyone think they are better off…do the math and most will find they are screwed not better off…
Excellent question. I am better off but the country is worse off. I’d imagine in a few years I’ll be doing very well. Right now I’m ahead of the pack, but expect to pull away when the chit really hits the fan.
I don’t want to play semantics, but I’m fine with very little, so my “better off” is certainly not J6P-Crapplebee’s-H3-plasma-better-off.
Somebody here (may have been you, NYCBoy) commented astutely that Greenspan, or the economy in general, can be likened to Mark McGwire and Sammy Sosa in the 90’s. They looked like such heroes, breaking all those records, only to find out they were pumping themselves with artificial stimulants.
So, yes, I guess we are all Better Off* than we were in 2001.
*with an asterisk, of course. We’re only better off in the short term, largely because corporations (and governement) pocketed their cash — or spent it like drunken sailors — while letting their infrastructure go to hell. (Infrastructure = physical infrastructure, education of the young, basic research, fiscal solvency, etc.) We’re STILL living off the safety margin leftover from the hard work of the Greatest Generation.
“We’re STILL living off the safety margin leftover from the hard work of the Greatest Generation.”…..when all other major economies were recovering from WWII.
BINGO!
“Somebody here (may have been you, NYCBoy) commented astutely that Greenspan, or the economy in general, can be likened to Mark McGwire and Sammy Sosa in the 90’s. ”
That was indeed me about 2 months ago.
Conversely, I am much better off than in 2001 subsequent to the departure of my spousal unit.
I relinquished the mortgaged money pit called a house. I paid off and closed all (ALL) the credit accounts. My kids graduated and moved on with their life. I’m living on a small fraction of what I earn, as I always have, but now without those other five dependants to feed, clothe and transport.
I can’t see how the government has been a force in bettering my situation over that period. I am personally better off, but amid a worsened economic environment.
Yes, because Ma taught not to buy “their” garbage, Pops taught me never to trust a politician, and my old lady is a bigger cheapskate than I am. And yes, January 2013 will be better for us because we still won’t buy “their” garbage and we still won’t trust any of “them”*.
*their/them = the b.s. wealth-transfering consumer economy and the people run it.
“and my old lady is a bigger cheapskate than I am.”
Sweeeeeettttt! Hi Five to your “old lady”.
And props to you for finding of value.
“finding that of value.”
If I get any spacier my husband is taking away my keys.
He should take away the vodka too.
RE: my old lady is a bigger cheapskate than I am.
I hope you kiss your blessing every day.
BINGO.
RE: my old lady is a bigger cheapskate than I am
—————————————————————-
damn….that’s what i need.
You mean the milenium didn’t start on Jan 1st 2000?
That is a CLASSIC red herring question - since the dawn of time.
The implication is of course, that if you’re better off than you were when the person took office, that the president (or congress) must be doing a good job.
What’s unrealized however is that the vast majority of people should be better off - because they’re now 4 or 8 years older. They should have 4 or 8 more years of acquired savings towards retirement, perhaps an upgraded (or first) home, better car, etc. This is the normal course of things, regardless of the quality of the president and congress. If the normal course of things regarding each person’s well-being (financially at least) under an average president were to remain status quo - then we’d all be retiring with the same amount of money we had when we got out of school! That of course would… not be good.
Excuse me, who do you think you are, calling out the logical fallacies that our politicians spew forth on a daily basis?!? What are you, some kind of logic whiz? We can’t be havin’ any of THAT.
/snark
Very good, NYCityBoy! I too am better off, but again it has nothing to do with the government because I only send in my taxes and they leave me alone: I take care of my own well-being. However, I very much believe that our country is worse off. Bad policies of the govt allowed fools (who make up most of our compatriots) to take on too much debt. Bad decisions by our President got into a war mess draining billions, etc. I wish we ould turn the clock back to year 2001 and take a different path. The looming nightmare is that both Obama and McCain are likely to cause further destruction, each in his own way.
Yes…..the evil of two lessers (so to speak)!
It’s very disappointing that McCain doesn’t have the balls to say “NO BAILOUTS. PERIOD” Because there are too many conservative FBs. The lure of something for nothing was too great for millions of Americans (1 Million foreclosures) to resist, so politicians have to pander to them.
I’m going to vote for McCain because if Obama gets his tax plan through congress, I’ll only get to keep 34 cents on every additional dollar I earn. (I did the math!)
The most successful Congress is one that is not in session.
I’m better off as well, despite a layoff and divorce in the intervening years.
My salary has gone up significantly in real terms, but in my case, I think the major contributing factors are A.) selling my condo in 2005; B.) zeroing out all my debt (which took a while after my divorce); C.) not buying stupid stuff I don’t need; and D.) saving.
It seems like common sense now, but I’ve come a long way from my circa 2004-2005 self.
“I’m better off as well, despite a layoff and divorce in the intervening years.”
Sounds like me. In early 2001, I was 3 years into my first job after grad school, commuting an hour each way to Silicon Valley, and 3 years into an unhappy marriage.
7 years later, I have extricated myself from the crazy ex-spouse and her “you don’t make enough to support me in the lifestyle to which I should be entitled” attitude. I spent 3.5 years working full time in the Silly Valley with a heinous commute while doing law school at night (and not sleeping much). Now I’m making a whole lot more than what I was making in 2001, I have a 10 minute commute in San Diego, lots of liquid assets, and very little debt (tail end of a low interest car loan that I’d pay off if my money weren’t bringing in a better return elsewhere).
None of the betterment of my situation has anything to do with the occupant of 1600 PA Ave.
Same deal. I’m better off, because I didn’t borrow and spend, but the country is worse off because it did.
The rest of the country could take me and my kids down with it if things get bad enough.
Ditto Neil and WT’s sentiments.
I’ll spend the next decade trying to outmaneuer the way this government will try to make me pay for others’ stupidity.
Same here. Deciding to stay in our 70+ year old home with space for a garden helped. Still owe some on cars and a small amount on a credit card, but that’s it. Once youngest finishes college we will be in very good shape. Always assuming things hold together somewhat.
And therin lies our challenge.
As the things I enjoy the most cost nothing but my sweat equity, my life hasn’t changed all that much since the 20th Century.
In fact, the moment I take my very first step from a trailhead, money is merely ballast that has no exchange value, in nature’s realm…
I guess I’ll be one on the other side and say no, I’m not better off than I was then, at least financially. Oh well. That will change.
Same here……..department I was in shut down, now working a job that has more stress, crappy work environment, worse hours, and I’m STILL $10K/year short of what I was making in 2003, even with inflation. Two kids in high school, so I have about 3 more years before I can think about moving.
Unfortunately, for almost 20 years, the industry I’m in has been
shelling out 2-3% year “raises”, while inflation is a lot more than that. Do this year in and year out, and before you know it, your real income is 20% less than it was in 1990.
And yeah, I’ve thought about opening up my own shop. the problem is:
-I don’t have a half million bucks laying around, for tools, equipment, facilities, other startup costs,
and
-Life is too short to have to deal with pilots all the time. I have to keep reminding them that when the autopilot is on, I’M flying the airplane.
Hopefully, in three years thinks will still be going like gangbusters in the Far East/Middle East. Was told by someone (who is in a position to know…..works over there) that I could be making $1000/day+ per diem (with my experience).
The good news……..
-My 2003-04 divorce reminded me how cheap I can live, if I absolutely have to, and…..
-I could still be married to my ex.
-My suspicions that all the so-called “prosperity” I seemed to be missing out on was built on crap, and by seeing the meltdown coming, I avoided buying a house, and paid down all my divorce incurred debts.
Worse.
But only for a nanosecond.
The first job (31yrs) -35%+ and growing or getting worse.
Co threatening more than 13% furloughs.
Getting better due to my hard work and new business
subsidizing.
I’d say about the same. Until you factor in housing. Then I’m FAR worse off. Because I could have afforded 2001 pricing. Unfortunately, the job I moved back east for in 2001 laid me off in 2002 and there went the house goal (and I was *just* about to buy - had already made some offers). By the time I found another job, prices were already getting too high for me.
So, based on that - worse off.
I’m a little better off. My salary hasn’t increased much but I save a lot of it and have zero debts. A few years ago I blamed myself for not taking part in the great realty wealth bubble, now I do feel a little better about my own passivity. It always seemed to late to jump in anyway.
But it’s not altrustic to vote based on my own state of affairs, right? Yet, there was a book called What’s the Matter with Kansas that bemoaned the fact that folks in flyover country didn’t vote in their own best economic interests as they *should*. I suppose that applies to me, too.
So which is it - should I vote my pocketbook or not?
It was like being in suspended animation. I went to grad school in 1992 and then lived abroad for a few years. At the time, I was broke but so was virtually everyone else I knew.
When I opened my eyes again after an almost 10 year grind in 2002, everyone was magically so much more prosperous, and I was saddled in debt. It only became clear to me in the last year that their wealth was fake and that I wasn’t (relatively) poor because I was a bad person.
Now I feel good about myself because I at least paid off my debts and made friends who didn’t drive me into a lifestyle of conspicuous consumption. I’m finally making very good money too.
Exact same as us, including the overseas, except 1970 instead of 1992
At the time, I was broke but so was virtually everyone else I knew.
You may have been broke, but your “net worth” was probably at least $100,000 more than your typical upside-down FB!
Would you have considered then to ask Barney Frank to force some private business to cut you a check for $100,000? They’d lock you up in the loony bin. But that’s exactly what these mandatory cram-downs do.
are we better off ??
Maybe the better question is “Why” are you better off….
IMO, because of reckless monetary, physical and foreign policy that “goosed” our economy with 4 trillion dollars of debt…Now the fricken “Tab” is due and payable with dollars that have lost half their value….Ask me two years from now if “Your Better Off”
Depends on what you mean by “better off.” I have more savings and a substantially higher salary than in 2001, and relative to my cost of living I’m much better off. As a ratio of the median house price, though, my financial condition is actually worse now than it was then. Fortunately this is correcting as we speak.
I hear ya…I guess in correcting my question and opinion I really mean “we” vs. “you” better off because, long term if “we” are not better off won’t democracy and capitalism end up becoming socialism ??
way better off. Off the charts better.
I’m way better off, I mean, yesterday I got a new BBQ, and put the whole thing on a credit card. This country is awesome!
In all seriousness though. I’m way better off today, measured by number of years I could live off of savings if I stopped working and quality of life.
More years without working at a higher quality of life=way better off. No complaints here.
Better off, and it is largely because of the housing bubble because we sold in 2004 and rented, then shorted homebuilders and banks/lenders. Timing was off (early), but overall we’re much better off.
Marriage was also a winner for both of us.
Didn’t have debt before the bubble, though (other than sub-$100K mortgage and small car loan that was paid off early) since mid/late 90s. This, because we lived very much below our means, and I’ve always insisted on living on the equivalent of the lowest-paid spouse’s salary alone.
I hate debt and the scum who try to fool J6 into thinking debt = wealth (banks & their “entourage”).
National City Bank on double secret probation…
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&date=20080606&id=8741271
Memoranda of Understanding = better stop by the bank on your lunch break?
Seriously, Memoranda of Understanding - to come up with terminology like this these cats have to be closet admirers of Goebbels.
And Orwell. And Potemkin.
And Firesign Theater -
How can you be in two places at once when you’re not anywhere at all.
Don’t Crush that Dwarf.
Edge,
I work in govt north of the border, and we use the term Memoranda of Understanding quite often when forming agreements with private institutions. It’s similar to a contract where you set out what each party will do, but without any cash transactions. They’re also not enforceable.
Toga! Toga! Toga!
“Credit FIGHT !”
Another victory for transparency.
(should have had sarcasm off tag appended)
Woohoo!
Citigroup leaving Japanese consumer lending market.
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&date=20080606&id=8741469
Arigatogonow, see ya.
LOL
Going to Tokyo tomorrow, will use that new sign off!
Arigatogonow.
BIG spike in shorting the financials - but hey! It’s getting better.
http://www.247wallst.com/2008/06/shorts-sellers.html
The foreclosures just keep rising…
http://www.marketwatch.com/news/story/mortgage-foreclosures-highest-nearly-30/story.aspx?guid=%7BDEAE7997%2DA8BB%2D4B68%2DA664%2DEA23A0F94ADD%7D
Beware! Under the cover of a reasonsable sounding headlines often lurks a shill on steriods.
http://tinyurl.com/4gynrt
Have fun pickin’ the peanuts of “common sense/wisdom” outta this pooh.
Would’ve been a great article in 2004.
“You are about to embark upon the Great Crusade, toward which we have striven these many months. The eyes of the world are upon you. The hopes and prayers of liberty-loving people everywhere march with you. In company with our brave Allies and brothers-in-arms on other Fronts, you will bring about the destruction of the German war machine, the elimination of Nazi tyranny over the oppressed peoples of Europe, and security for ourselves in a free world.”
Eisenhower.
Remember…
http://www.army.mil/d-day/
” This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence — economic, political, even spiritual — is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.
In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the militaryindustrial complex. The potential for the disastrous rise of misplaced power exists and will persist.
We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together. ”
Eisenhower, 1961
Beautiful pairing of Ike quotes…
Eisenhower’s speech about the military-industrial complex was incredibly prescient. One of the best long-view speeches by an American president.
I wish it was required reading.
“…In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the militaryindustrial complex. The potential for the disastrous rise of misplaced power exists and will persist.”
Hey Ike, If you get blog post up there…”Dickey Boy” Cheney is holding up one finger in your face…guess which one?
Hate to rain on everyone’s parade, but if you’ve ever worked for a company that tried to jump through the Federal Governments procurement hoops, you would understand why toilet seats cost $600.
If the “Military/Industrial complex” had so much power, why are we down to basically THREE prime contractors for military aircraft (vs. 15-20? in 1960).
That’s because we are trending toward only buying three airplanes each year
“…why are we down to basically THREE prime contractors for military aircraft”
Because the “Three”…have a total of 146 subsidiaries Domestically… and …1,243 Internationally
“Made in China”… can not be found on Boeing: But “it’s there”
Amen to that brother. Happy D Day.
Yogurt, ET….. Remember this prophetic quote from Ike?
“Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt (you possibly know his background), a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid”.
Dwight D. Eisenhower, 1954
Nope, but that’s a good one.
(Whatever happened to conservatives like Ike?)
“Whatever happened to conservatives like Ike?”
They got their throats sliced by the authoritarian corporatists parading as conservatives or got labeled “liberal” by the religious nutjobs posing as conservatives.
Milton Freidman and the Chicago School…… supported by the neo-nuts of the Leo Strauss strain, also from that same school, same era.
Too late to raze the buildings and salt the earth.
And the squeeze go’s on, the inhumanity of it more buy to bankrupt investors will be distressed
Bradford & Bingley has become the latest lender to raise its mortgage rates for new borrowers.
Its rates for many new deals will rise by between 0.05% and 0.55% from Friday.
The bank said it was going to charge more for new mortgages because of the increased cost of raising funds in the financial markets.
http://news.bbc.co.uk/1/hi/business/7439469.stm
“the inhumanity of it more buy to bankrupt investors will be distressed”
This made no sense but then I realized English must be the writer’s second language. And it’s better than I could do in his/her language.
It’s not but, perhaps if we looked at what the words mean you might understand my meaning
inhumanity - An inhuman or cruel act
distressed - Having been foreclosed and offered for sale, usually at a price below market value
buy to let - The phrase buy-to-let can refer either to the investment strategy of buying a residential property to be let for profit; or to a particular category of mortgage used to purchase a property for letting
or as prefer to think of it buy to bankrupt.
However I take your point and will stick to plain (UK) English from now on.
I think the problem is that you’re missing the word “let” in the “buy to let” part. That makes the resulting sentence essentially un-parsable.
It still doesn’t make any sense without punctuation. Here we go: “And the squeeze go’s on. The inhumanity of it! More buy-to-bankrupt investors will be distressed.”
goes
You live and learn. Must learn to type more slowly and use commas.
Thank you. Didn’t notice that.
Hey, when you add an “s” to anything you’re supposed to use an apostrophe, right? LOL
Barnum & Bailey has nothing on the circus atmosphere going on across the pond, @ Bradford & Bingley…
Gotta go, the Loan Tamers are about to come into the ring~
Per my observations I see less boats and jet skis on road being pulled by SUV and Trucks. I am in Sourthern Indiana.
Is it same on the lakes?
I’ve noticed no change in traffic on the lake here. But a local boat dealer had his wares lined up in front of the local Wal Mart last week. I guess no one comes to his showroom and he knows more people than ever are shopping at Wal Mart.
Jet skis and pontoon boats don’t use a lot of fuel. Sailboats use practically none. Hull-type runabouts use more, but not if you just take it to a nearby island or cove and then beach or anchor it for the afternoon. So if you already own a boat or PWC, it doesn’t cost that much to have a day of fun on the lake.
When I went to west Michigan for the Memorial holiday I was surprised to see people who were driving a truck, hauling a trailer with another older truck on it, AND a quad or some other think in the bed of that. Saw several of those. Seemed to be quite a few RV’s on the road too.
On Seneca Lake NY, Memorial Day saw a “normal” amount of traffic and a full parking lot at the boat launch. Other days have been very quiet, a drastic reduction. I live on the boat and all the marina traffic goes by my spot. General sentiment amoung the boaters at my club is to maximize the social activities and minimize the gas consumption, anchor or drift if you do go out, not cruise all over the lake. Mine is a gas powered cruiser, but I can spend the whole day (or a week for that matter) on the lake and only use one gallon of fuel out and back.
One cruiser here that winters in SC says the ICW is littered with abandonned boats, more than the Coast Guard can keep up with. It’s not just underwater houses that get jingle mail!
My wife was down in the city of angles for 3 days, and she says that freeways are moving with much better efficiency now that people can’t afford to drive anymore…
She was on the 210 going east (about a 25 mile stretch) from Glendale to the 605 @ 6 pm on Tuesday, and was doing 70 mph for most of the stretch and had one little patch where she slowed down to 25 for a few minutes.
Usually from Pasadena onwards, this is a parking lot @ this time of day.
How will people in LA get by without their automobiles?
(That’s not a sarcastic question.)
A car seems like an absolute requirement in the LA metro area.
L.A.ndlocked
My motor-sickle does me just fine!
Helps that I can walk to the grocery store.
I haven’t noticed a traffic drop on my commute, though; I take La Brea down to the 10 West to Overland, and morning traffic especially has been as bad as it ever gets. Evening traffic seems a little bit lighter. The 405 goes past my office, and that looks as jammed as ever, too.
It hasn’t quite hit these busy highways yet, not west of downtown anyway.
My first summer in LA, I survived without a car. I was given two days notice to move from Michigan and start my new job. They put me on a jet, and there I was.
I crashed on a buddy’s couch, and pretty much went wherever he did for that entire summer. Good times.
He was an alcoholic, and I was just out of school, so it was good times. I learned every popular bar in the LA area that summer. Woo hoo!
redneck yacht club
The Chicago side of Lake Michigan has always been dominated by sailboats, but it certainly seems like this year the sailboat ratio is even larger.
However, in fairness, I have to admit that the weather this spring has not been very boat friendly so it’s possible that many of the powerboats have yet to come out of drydock and head out to the marinas for the season. The powerboats are not rushed, as they only have to wait for the locks at the mouth of the river. The sailboats pretty much have to go when the city schedules the bridge openings, as the city prefers to raise the bridges as little as possible.
My parents are on a lake in New England. They report no shortage of boaters. However this early in the season its mostly fishermen anyway, who are not the biggest gas hogs. Time will tell when the weather warms if there are as many waterskiiers and jet skis out.
They noted there was a huge number of lakefront houses for sale.
For sure most boaters will be hauling in their gas in containers this summer, as marinas are always more expensive than streetside gas stations.
Is it just me, or has it been a lonnnnnnnng time since I’ve heard a news report screeching about how rents are going to skyrocket with all these foreclosed FBs flooding the market for rental housing? Untrue, perhaps?
Yeah, well, lemme tellya, most of the rents posted on Craigslist for this part of Florida are ridiculous, you’d think this was CA.
I haven’t looked in a while but last time I did the SFHs were asking $400/mo more than what I snagged mine for. And I thought mine was priced outrageously. My LL bought in the 70s so I know he’s raking it in. At least I know it won’t be foreclosed from under me.
I’m from a low SFH inventory area so its got some different Sup/Dem pressures than the more overbuilt areas.
Here in Fresno, there are more houses than renters. I mentioned about a month ago that the owner of the house I am renting wants to do a short sale. The property is handled by a rental agency. I called them up and asked how much time we would have if the property were foreclosed on. I was told less than 30 days. There is a mother in law house on the same property that is recently vacant so I asked if they were advertising the place and she said no. She then says (and she has said this before) that she can easily find us another rental. I ask if there are a lot of choices and she says yes.
OK, so I call the real estate agent who is doing the short sale and she says it takes 3 months after he stops paying, then it takes about 5 months for the notice to vacate. The real estate agent says she will let us know if he stops paying. What’s going on here I ask myself. What I am thinking is renters are hard to come by and if the place is sold with us in here, the new owner may not want the rental agency handling the property. That means they loose a renter, and if no renter, then they loose fees for handling a house with a renter in it. I have also noticed the rental prices in the last few years have sagged about 20%.
that 30 days is complete BS. If I were in that position and wanted to stay, I’ll bet I could drag it out a year or more through various legal maneuvers.
For future reference, are there attorneys who specialize in guiding such maneuvers? (Maybe a future calling for you if you get board with shorting future black swans?)
PB - yes, there are attorneys that can easily drag things out for a long time. You just need one that knows the ins and outs of real estate law in your state.
Here in Illinois it can take a over a year to go from non-payment to sheriff at the door to kick you out. But it can take a lot less time if nobody is contesting anything in the process. I imagine most states are pretty similar. The idea is to get a lawyer that will magically appear at all the right times and stop any of the shortcuts from happening. Or at least that’s my impression of how it works
No cheating or anything, just keeping the process following the long path as prescribed by the law.
“Here in Illinois it can take a over a year to go from non-payment to sheriff at the door to kick you out. But it can take a lot less time if nobody is contesting anything in the process.”
Based on some of the foreclosure houses I’ve been following, even if no one is contesting anything it still takes a minimum of 6-9 months. Since IL is a recourse state, there is the small matter of that recourse judgement, which is usually solved on the FBs part by declaring bankruptcy in conjunction with the foreclosure.
I see a lot of ridiculous asking prices on rent. You spend a couple weeks following rents on Craigslist and it becomes easy to spot the FBs trying to break even while they “wait it out”.
If you are going to get a foreclosure and you want to buy again, then wouldn’t you want to speed up the process? If you drag it out for a year then you have to wait longer to clean up your credit. I heard that you may be able to get a mortgage again 3 years after a foreclosure, if your credit stays clean from the tie of your foreclosure. I hope lenders would be more strict than that, so there are less buyers, given that I may buy in a bubble area in a few years, if the prices fall enough.
just get a generator, dude
Hey Fresno Dude, what part of town are you living in? Me and all my friends call North Fresno, specifically, the unholy-misnamed RiverPark “Devil Town.” (Worst designed shopping mall ever.)
If your rental is forclosed on…papers served…you can live there rent free till the bank issues an eviction notice. Why pay the owner in default..he has no money to take you to court and the bank really does’n t care! You have no contract with the bank so enjoy the free ride…also forget about guilt..its free,.
If Barney F. really wanted to help people, he’d try to help renters who are being taken advantage of by landlords who are in foreclosure and rent the home anyway. This is becoming a serious problem. I’d be very careful about renting a house.
Craigslist housing has become the new Area 51…”Dreamland”
RE agents, flippers and FBs looking and waiting for GF aliens to land with pockets full of dollars and shy in sense
I agree re: craigslist rentals. Even in my area, most of them are a complete joke. Glad to hear others are finding this. Thought it was just me.
Took some time last weekend to dismantle and get rid of the hunk of furniture that used to house my old TV. This was not a small or easy process as it involved rearranging lots of bookcases and reverse engineering the IKEA assembly process. The apartment almost feels like a new place with that hulk gone.
God, I love getting rid of stuff - not the books, I might have a hard time breathing without them, but other stuff.
Movin’ up to a bigger flatscreen?
Go for the 72′ inch. You wont regret it.
72 inches? They make 72 inch screens? That isn’t projecting it on a wall? 6 feet? Really?
A 72 inch HDTV plus extras and a super expensive cable channel package to see and watch non-stop commericals and BS. Wow …what an investment !
I think I’ll go out and play in the sunshine for a while…while it’s still FREE
Seeme to me that a TV that big would need a nanny or something to take care of it while I was at work.
Sunshine might be free, but heat stroke will cost you a trip to the emergency room. DC area is supposed to go up to 97 this weekend with the humidity making it feel like 110. Hope it will be cooler where you are, Mikey. If not, be careful.
Ah yes, 97 and humid - sounds like a nice summer morning sunrise here in Yuma. But then the sun always comes up and it gets a little hot out.
“Projecting on a wall” is what J6P does. My screen comes down from the ceiling when I flip a switch. (And it has croppers, too, to black out the sides when watching 4:3). And when the TV is off, it looks like the room has no TV!
You should look at Front Projection. If you can get a room reasonably dark, it’s the way to go. You can get a 10′ screen easily.
We tried to give away an old analog tube of 32″ diagional size. My 4′11″ wife weighs considerably less than this TV. With the two of us, we drug it out of the house on a cardboard box. She steadied it as I hefted it into the huge trunk of her Camry. Unfortunately, after all that, it didn’t fit. We did get it back into the house sort of by rolling it like a square-ish snowball, without damaging the house luckily.
If her brother really wants it, he can bring his pickup and a small crane.
I will eventually. Right now, it was just that the 1987 Sears 19 incher that I currently use was looking mighty lonely and I wanted the extra particle board out of my space. It takes me a long time to build up to a big purchase as spending money makes me a little - OK, a lot - nervous.
LOL - I think thats the same one I have. Except the picture goes out now and then so you have to thump it on the side a couple of times. I’m hoping it makes it until the end of year when the regular tv broadcasts go away.
Mine is still working like a dream. The picture is great. There is a bit of annoying reflection on the plastic that sticks out around the screen to protect it, but I can live with it. It has been my only set for about a year and a half now.
Polly, about 5 years ago I had my neighbor use a chainsaw to dismantle a huge oak tv unit.
Most of our friends don’t have tv’s and we have a 10 year old 32 inch model that occasionally lures them in, to watch the Daily Show & Colbert Report…
You should have freecycled it! I guarantee someone would have taken it. I give all my furniture away through that. My only stipulation? Whoever wants it has to get it out. 100% on their own - I won’t help. I gave away a sofa sleeper and loveseat from a 3rd floor apartment to a young guy who had just gotten his first apartment. I told him to bring at least 2 friends to help. He only brought one. I wonder if they’re still friends…
Anyway, kid thought he won the lottery by getting this furniture (it was still in great condition).
I signed up for freecycle a few months ago in anticipation of getting rid of it. Seems the freecycle culture around here is different. Most of the traffic is in pet food coupons and almost all the furniture is of the “I left it on the curb, if you want it come pick it up” stuff. And the people who were trying to sell/give away something similar on craig’s list were having no bites and lots of no shows for pick ups - besides, I don’t have a digital camera so no picture. I almost managed to get a secretary in my office to get some of her relatives to come get it, but it didn’t work out. There is very little demand out there for a piece of furniture designed specifically for a 31 inch CRT television. It was an orphan if ever I saw one. I did keep the hinges and other harware.
And as a woman who lives alone, there is a certain risk to inviting strangers to come into your apartment. Reality stinks, but reality it is. Most stuff I load into my car and give to charity. They won’t pick up for less than a room full of furniture. Taking it apart was the only solution.
Polly - get on the list of charities like ‘Helping Hands for the Blind’.
They’ll ring you up every month or so to see if you have anything to give. If you warn them in advance, so they can book a van and driver, they’ll pick up stuff like sofas and TVs.
We unloaded our juggernaut 36″ Sony Vega to them a few months ago, everyone was happy.
I have no desire to give something to a charity that won’t be able to use it or sell it. It costs them money and they have better things to do with their money. Some charities do it because it builds good will and they hope that they will get something worth taking from a grateful person later on. I bet they were able to use or sell the TV. This was something with no real value left in it.
Oh, yes, Helping Hands for the Blind - for obvious reasons - doesn’t have much need for a TV.
When I organised the pickup, the lady on the other end said that HHftB holds regular auctions to raise funds, and this is where my TV ultimately ended up.
Made $2 in 5 seconds on SKF. Employment report must have sucked
unemployment rate up to 5.5% vs. 5.1% cons. It’s all good
So a loss of 49,000 jobs increases the rate that much? I only saw the headline so I don’t know the finer details. Who calculates this stuff, Jimmy the Wonder Chimp?
Not him. He’s on TV every night. It’s called Mad Money.
Cramer has mastered the fact that people *want* to believe in optimism. Some people are truly optimistic, others simply want to believe that things are good in spite of evidence.
I don’t know how we went from bootstraps to “believers” so quickly. It’s so sad, but hey, man, if it feels good, do it!
lol
out for $4. Unreal.
SKF seemed like a no brainer. No?
I was just gambling. Tried to get it under 111 but ended up with 111.06
Contemplating a short here. Perhaps in the $21 - $22 range.
hahahah. me too. thinking 120.75
hit on a small short at 120.85. I’ll take that home.
and a tiny bit more at 122.05
should have just held the frigging long
Nice sell off at the end.
Sell off of financials that is. My short came in @ $121.80. Had to rushed home from the store so I wouldn’t miss it.
You’re confusing different things.
The unemployment rate is based on a survey of households — “are you working” “are you looking for work.” It includes the self-employed, freelancers, “independent contractors” and the like.
The payroll employment number includes payroll employees only, based on a survey of businesses.
As more young people have ended up as non-employees, like it or not, the two have stopped moving together, particularly in some metros. Much bigger boom and bust in the household survey, which includes non-employees.
The unemployment rate is also affected by the number of people in the labor force. If you lose jobs but people just retire, no unemployment. If you lose jobs and people formerly living off home equity start looking for work, more unemployment even if jobs are going up.
Headline - Biggest rise in 35 years… Yowza.
http://www.marketwatch.com/news/story/jobless-rate-soars-55-may/story.aspx?guid=%7B6B9B2E20%2D06E8%2D4FC0%2DAD5A%2D3029D5057F89%7D
“The economy has lost 324,000 jobs so far this year.
Unemployment rose by 861,000 to 8.5 million, the government said. It is the biggest increase in unemployment since January 1975.”
Can somebody explain to me how this works? These numbers make absolutely no sense to me. How does 324,000 turn into 861,000 and vice versa?
Must be that five hundred thousand of those jobs weren’t contributing to the economy.
My guess is that 500,000 people entered the job market and couldn’t find work of any kind.
Obviously a net increase in the work force of 537,000.
Or more precisely people counted as being in the work force for the purpose of compiling unemployment figures.
Remember with an increasing work force, even a constant number of employed means rising unemployment.
I got called on that survey once when I was unemployed. They actually grill you a bit on what you have done to look for a job that week. And you have to tell them without prompting. They don’t just ask if you looked on the internet, sent out a resume, went on an interview, etc. The methodology would tend to exclude people who are not fluent speakers of English. I don’t remember if there was an option to get questioned in any other language.
And I imagine the surveying skews older since I’m sure they only call land lines, not cell lines.
“The government cautioned that the increase in the unemployment rate in May could be a statistical distortion.”
Or not??
That makes sense, because this whole economy is a statistical distortion.
The government never cautions about possible statistical distortions when it reports upbeat numbers (which it ends up revising downward every single month, month after month, year after year). Is cheerleading part of these bozos’ job- descriptions?
Two Federal Reserve Bank presidents warned in separate speeches on Thursday that the central bank’s decision in March to lend to securities firms might sow the seeds of further financial crises.
http://www.nytimes.com/2008/06/06/business/06fed.html?ref=business
Even though lower interest rates have made many adjustable-rate mortgages more affordable, foreclosures continue to reach new heights as more than 1 million homeowners face losing their home, according to industry figures released yesterday.
http://www.washingtonpost.com/wp-dyn/content/article/2008/06/05/AR2008060501501.html?hpid=sec-business
Don’t they mean, one million MORE? How many millions has it been so far? How many “one millions” will eventually be counted?
It’s like the Wall Street losses, reported in denominations of 1-5 billion at a time. Dribs and drabs disclosures are intended to deceive. Police: “I’m sorry Mr. and Mrs. Jones, but there has been an accident.” “Oh, no, is Gramps hurt?” “Yes, his legs are hurt.” What else? “His head is hurt.” What else? “His arms are hurt.” What else?” He can’t see or hear.” What else, “He can’t smell, taste, or touch.” “What else” “He can’t move, think, or sing ballads.” “Akkk! What does all of this mean?” “He was dismembered and killed.” “Well, thank you officer for not telling us all at once; that would have spoiled our vacation.” “You’re welcome.”
Your mother is on the roof…
“He can’t move, think, or sing ballads.”
Hilarious!
The point that seems to be lost on the WaPo is that INTEREST RATES DID NOT GO DOWN - for the most part. 1 year ARMs are now more expensive than this time last year. 30 year fixed are virtually the same rate. Jumbos are way more than last year. 5/1 ARMs are only slightly less.
There was a brief dip down in rates back in Jan/Feb - but it was just that - brief, and it was a small dip, only about .8% or so. Such a small brief dip is not enough to have a significant impact.
WaPo is confusing the federal funds rate with retail mortgage rates - they’re not the same thing idiots!
In recent weeks, mortgages quietly became harder to get.
Mortgage insurers require higher credit scores and bigger down payments than they did a month or two ago. Underwriting software used by brokers and loan officers is issuing fewer approvals than at the end of May.
http://www.bankrate.com/BOS/news/mortgages/20080605-mortgage-insurance-tighten-a1.asp
“And it’s a full income check,” Moulton laments.
Laments? Oh the sorrow of not being able to commit fraud!
And, is there a “partial” income check?
It’s pretty funny. I’m trying to get a mortgage now. I need a hug.
I’m collecting the (literally) about 75 pages of documentation the mortgage people asked for to dump on their underwriters. (I don’t think they really want “all pages” of each requested statement. I mean, how many sets of “how to balance your checkbook” instructions does one accountant need, anyway? I’m not in the TxChick-treekiller-57 class for brokerage statements, yet I wonder if they truely know whateth they asketh for. And I have to pay to ship all this pile.)
My income is so screwed up that to verify my income I will likely have to explain why my income for May is 41% higher than my salary. This should be fun.
Develpoer offerning buy on get one deal in California.
Inetresting time?
http://gmy.news.yahoo.com/v/8186192
Wait for Day after Thanksgiving sale and you will get better deal.
You’ll get a free turkey with it!
I’m curious about the buy-one-get-one-free deals. Is the 2nd “free” home attached to the mortgage on the “non-free” home? If so, it doesn’t seem to be so free after all. But if not, then it seems like a disaster waiting to happen - just default on the mortgaged home and live in the one you got free-and-clear.
One afternoon in April, six dozen wealthy Americans were entertained at a luncheon party in Midtown Manhattan, along with a special guest from Paris: Henri Loyrette, the director of the Louvre.
The host of the exclusive gathering was the Swiss bank UBS, whose elite private bankers built a lucrative business in recent years by discreetly tending the fortunes of American millionaires and billionaires. As the wine flowed and Mr. Loyrette spoke of the glories of France, UBS bankers courted their affluent guests.
But now, as the federal authorities intensify an investigation into offshore bank accounts, the secrets of this rarefied world are being dragged into the open — and UBS’s privileged clients are running scared.
http://www.nytimes.com/2008/06/06/business/worldbusiness/06tax.html?ref=business
Why are they scared? I though that they were “citizens of the world”, not tied down to the US. Why don’t they just set up shop in Bangalore or Nairobi, or better yet some place without extradition treaties, like Harare?
It’s not enough to have tons of money. One must have a “lifestyle” too.
I assure you they will not have that “lifestyle” in any of the places you are stating.
As housing sales tanked last winter, local real-estate pros waited anxiously for the traditional spring sales surge to revive the troubled industry.
But May sales numbers, released Thursday, reveal that the urge has been more of a sputter — at least around Central Puget Sound.
http://seattletimes.nwsource.com/html/businesstechnology/2004460841_homesales06.html
Home builders building smaller homes. End of the McMansion?
http://finance.yahoo.com/real-estate/article/105204/Downsizing-the-American-Home
So what was the “average” America annual income in 1957?
1957:
Broad’s $13,700, three-bedroom starter homes carried the same monthly cost as a two-bedroom rental. “It was all about affordability,” says Broad, “just like it is again today.”
What is the “average” income 2008?
Oh, and in 1957…how many household had x2 wage earners?
Besides, there are so many more/higher costs associated with houseownership today (esp. in large metro areas) than there were in the 1950s that going by the sticker price alone is inviting disaster. In many cases, to make it work long term, ya gotta get in on the undershoot, current declines are not good enough.
Broad’s $13,700, three-bedroom starter homes carried the same monthly cost as a two-bedroom rental.
Notice that? People bought houses back then because buying was cheaper than renting.
That’s the only economically rational reason to buy a house.
Like Ben posted a day or so ago…
Are we there yet? Are we there yet? Are we there yet?
No, because the assumption is that you must either rent or obtain a mortgage for a house with 20% down.
You can put down more on a house- even 100%. And then over the next 40 years you can make an economically rational claim that buying a house was a good idea.
Huge shill piece, but with some laughable azzumptions.
“Bargain-hunters are drawn to these small houses, which look just like the behemoths built in 2005 and 2006. In Beaumont, a community of tract homes 70 miles east of Los Angeles, the Seneca Springs community is dotted with 4,000-square-foot, seven-bedroom Mediterranean homes that KB built at the peak. But right next to them the company is erecting new houses with exactly the same 50-foot façades- and a big difference you don’t notice from the street: They’re about half as deep and roughly 2,000 square feet. Those homes preserve the community’s curb appeal by keeping the façades looking similar and sumptuous. But purchasers love that the new homes boast five bedrooms, and they especially appreciate the pricetag: about $220,000, vs. $420,000 for the big neighboring homes built at the peak (and that now sell for around $300,000).”
So the “downsized” homes only have five bedrooms instead of seven!
Also, $220K is still a sh!tload for Beaumont, especially when surrounded by larger, decaying, foreclosed crapshacks. What jobs are there in Beaumont to support even $200K houses? No way a 30 percent decline from peak makes the I.E. “affordable” and now a great time to buy, especially when factoring in the increased commuting costs and lack of jobs with decent incomes.
Wow. I once had a 4-bedroom home that was 1,500 sq ft. I can’t imagine builders these days though building 2,000 sq ft homes with 5 bedrooms. I see it as a good thing. Smaller closets make for less consumerism.
Just spoke with a friend who lives in Hemet and commutes to Riverside.
His comment,
” when my vacation is over (teacher) whathow will I do it with $5.00 gas driving to Riverside?”
Got Teacher of the year but no pay raise. That part it my take.
How much less does it hurt to catch a small falling knife than a large falling knife?
“(and cashed out of so he could focus on philanthropy) ”
There’s that guilt flowers theme again.
sex, lies, and foreclosures:
In the spreading mortgage crisis, there are many homeowners who were tricked into taking out loans they could not afford, or who failed to understand the risks they were taking.
This column is not about them.
http://www.nytimes.com/2008/06/06/business/06norris.html?ref=business
Indulge me in some left wing economic banter: we no longer measure economic output in terms of Gross National Product, but rather Gross Domestic Product. Now, much is made of the fact that corporate earnings are making up a larger proportion of GDP, and wages are making up less. Back in 1960, or 1970, or even 1980, those GNP corporate earnings for the most part ended up in the wallets of American shareholders. I’m guessing, I’ve got no data, that a far smaller percentage of GDP corporate earnings find their way back to Americans. Bottom line, apples to apples, wage earners (well, everyone really) are really getting screwed. Does shadowstats or anyone else keep track of this phenomenon?
..corporate earnings for the most part ended up in the wallets of American shareholders…
..and how many americans are shareholders? i think 63%+ own stock directly.. another 20% or so own corporate shares through various pension / retirement plans.
Subtracting all that, how many Americans are not participating in the stock market.. and why should anyone care?
“owning ” a share via 401k etc doesnt’ count for much at the gas pump for the average american worker involved with said 401ks /pensions that by the way, can be taken away at the drop of a hat as seen by many companies so far.
On The Ground in AZ
Had the opportunity to talk to a homebuilder this week with operations in Phoenix and Tucson. They’re niche is the upper middle range from $500k - $1M.
Phoenix operations are dead, with 95% of their hoped for sales in 2008 coming inventory already built, therefore almost no construction in the area.
Tucson operations are doing much better with about 5-6 neighborhoods being active, but active means a few homes being built at a time, est. about 20% of their 2005 production levels.
i think i’m begining to miss the days when the stock market would rally on news like this.
Jobless rates jumps to 5.5 percent — biggest rise since `86
http://biz.yahoo.com/ap/080606/economy.html
Yeah, the market used to interpret that as businesses getting more efficient and increasing productivity. But the oil prices are what is killing today.
oil up over six bucks, time for an emergency rate hike.
All the way to 13.5 % in one move!
Slam the discount window shut on Lehman Bros. fingers!
“All the way to 13.5 % in one move!”
(Giggle) I had a lot of fun imagining keystone cop type drama. Then my mind moved to food and fuel and my stomach started to hurt.
Damn, if only one could watch from a completely safe perch!
Remember the movie NETWORK NEWS over 30 yrs ago?
” I’m as mad as hell and I’m not going to take this anymore”
Shout it out the windows and then “watch your fingers” lol
Rented it about a year ago. Whoa was it dated. It made me nostalgic for the wide-eyed, uncynical activism that apparently existed in the 1970s (I was just a tot).
Boy, that 240 point gain yesterday sure evaporated fast…I guess less jobs in America isn’t having the usual “positive” effects for Wall Street. Less jobs has gotta make “worker productivity” go up right Sir Greenispent?
I guess someone finally figured out that workers = consumers and taxpayers.
Maybe reducing those isn’t such a good thing right now?
The Fed is between Iraq and a hard place. It doesn’t look like jawboning works very well to preserve a currency’s value, either.
June 6, 2008 9:45 A.M.ET
BULLETIN
CRUDE FUTURES JUMP, APPROACHING $134 A BARREL; U.S. STOCKS, DOLLAR FALL SHARPLY
May’s jobless rate hits 5.5%
The nation’s nonfarm payrolls contract by 49,000, as jobless rate surges in the biggest rise in newly unemployed since 1975.
Is today a good day to buy the dip?
Heck ya! Have you forgotten ye$terday already?!?!?!
One thing I haven’t forgotten: Historically, every time U.S. unemployment has risen steeply off a low base (as it recently has), the eventual increase in the unemployment rate over the subsequent two years has been in the neighborhood of 2 full percentage points, which would translate into 2m+ net lost jobs in the current situation.
But not to worry — it is different this time.
Yep - this graph says it all -
http://research.stlouisfed.org/fred2/series/UNRATE
Which way do *you* think the line will go next - up or down?
(and what color will go along with it - white or grey?)
What’s so striking to me about that graph is the frequency of the gray areas before the early 1980s. Hmmmm, seems as though recessions were just a regular part of life back in what so many have deemed as the “good ole days”.
Jawboning works very well until it doesn’t. We seem to be in the doesn’t phase.
They better figure out something quick, the hedge funds will bury us.
I thought that weak employment numbers were a bullish indicator for Wall Street traders, as it increases the likelihood of future Fed rate cuts?
haha not this time with oil threatening 150 per barrel
I find myself perpetually flummoxed by these “up is down, down is up” contrarian rationalizations. One thing I can say: Today’s news on the unemployment front should be good for both gold and bonds, given the current policy preference for balancing a weakening economy on a tightrope above the twin pits of deflationary ice and inflationary fire.
BULLETIN
DOW JONES INDUSTRIAL AVERAGE DOWN NEARLY 230 POINTS
MARK HULBERT
Bond timers are bearish
Commentary: Dejected newsletters a good sign for contrarians
By Mark Hulbert, MarketWatch
Last update: 7:21 p.m. EDT June 5, 2008
ANNANDALE, Va. (MarketWatch) — The editor of the typical bond-timing newsletter is more bearish today than he has been at any time since June 2007, one year ago.
And that, from a contrarian point of view, is good news for bond holders.
latest news
July crude gains $5.26, or 4.1%, to $133.05/brl in NY
Job rate jump ‘annihilates’ view Fed to hike soon: analyst
By Greg Robb
Last update: 10:39 a.m. EDT June 6, 2008
Gold is in panic mode today. Buy some of the shiny yellow metal or get priced out forever (and ignore that volume chart that lies beneath the price chart while you do so…).
How do we graduate you from being a non-participatory day voyeur, to understanding that the Dollar is about to get Bear Stearned, and at this point in the game, the old relic is the best place to be?
The minute I graduate is the minute gold will crash — this I know to be true. So you should be relieved to hear that I am still a voyeur so far.
Even a broken clock gets stucco twice a day.
The prof is a fiatsco-hoarder of the first order, a fedophile…
Fedophiles tend to do horrible things to under-aged cooked numbers…
Actually I have been unloading my fiatscos as of late, but admittedly not into gold…
Whisky futures?
If so, I’m in too.
Hey - don’t panic.
But if you do panic - be the first to panic.
(yeah I know - cliche)
You pointed the price-volume relationship out yesterday. With declining price and volume , expect a reversal- given the 2 outside USDX days, I took out a margined long Dec gold position last night.
The August 2008 future is moving into the front month position so volume is increasing.
Prof Bear’s link from yesterday was referring to GLD not GC - but just like housing, volume change (in an directon opposite direction of prior price movement) preceeds price change (in an opposite direction); with falling GLD price and falling GLD volume (decreasing volume despite continued decresing price), price chage will be to the upside. Violent USDX moves portended a change, so I took a spec position with GCZ08 futures last night.
Anyway Prof Bear, thanks for yesterday’s observation.
Prof Bear’s link from yesterday was referring to GLD not GC - but just like housing, volume change (in a direction opposite to the direction of prior price movement) preceeds price change (in an opposite direction); with falling GLD price and falling GLD volume (decreasing volume despite continued decresing price), price chage will be to the upside. Violent USDX moves portended a change, so I took a spec position with GCZ08 futures last night.
Anyway Prof Bear, thanks for yesterday’s observation.
“Loan Tamer”
Person that fields calls @ mortgage crisis hotlines
May be a repost (from BusinessWeek online):
The Next Real Estate Crisis
By April, 2009, hundreds of thousands of option ARM mortgages will begin resetting, bringing on a fresh wave of foreclosures
http://tinyurl.com/6fnhfo
Section 8 subsidies are strongly correlated with violent crime according to a piece in the latest Atlantic Monthly. The biggest obstacle to overcome is government and social engineering leaders who refuse to acknowledge what the data are telling them.
Section 8 is the future of many of these foreclosed homes, IMHO.
An already increasingly mobile society is entering a period of profound upheaval…just about anything is possible anywhere at this point.
Maybe the boyz will start a futures market to bet on the individual fates of particular cities/towns/even neighborhoods?
I foresee a Section 8 future for many of Chicago’s condos.
Many of the big, infamous projects are coming down — Cabrini Green, for example, still has a few functioning buildings but is much diminished. And the city has not built enough new units to satisfy the need for low-cost or subsidized housing.
June 06, 2008
Shorts Sellers Look For Sharp Sell-Off In Financials(WM)(WFC)(WB)(FNM)(AIG)
Just to repeat for those confused about the job numbers:
The unemployment rate is based on a survey of households — “are you working” “are you looking for work.” It includes the self-employed, freelancers, “independent contractors” and the like.
The payroll employment number includes payroll employees only, based on a survey of businesses.
As more young people have ended up as non-employees, like it or not, the two have stopped moving together, particularly in some metros. Much bigger boom and bust in the household survey, which includes non-employees.
The unemployment rate is also affected by the number of people in the labor force. If you lose jobs but people just retire, no unemployment. If you lose jobs and people formerly living off home equity start looking for work, more unemployment even if jobs are going up.
One other factor I didn’t mention above — severance pay. When the gov. calls up businesses and asks about payroll employment, they may be counting those already let go but receiving severance, but when the call those people at home they may say they are out of work. Lots of people in finance in NYC are on severance now. Eventually the payroll number will catch up as severance ends.
I have a question.
I was contemplating posting the unemployment data to a local blog. Then I realized the the response would be that those job losses are in other markets and that the local industries are sound. Besides the obvious ongoing counter that no market has a glass dome protecting it from a world wide economic slowdown and credit contraction:
would anyone support the argument that employment issues are primarily local?
PS: yes I do understand all those Wall St. lay-offs are going to cost us CNYers in the form of higher taxes.
What area do you live in? I will post your local layoff data for your geographical area for any time period up to the last 10 years.
Oh, thanks so much hoz. I’m in the Syr, NY market!
June 8, 2007 - June 6, 2008
Destiny USA Inc.
Syracuse, NY
Destiny USA is laying off 45 workers. The Syracuse-based mall developer says the downturn in financial markets is making it difficult to obtain financing for a planned $450 million, 1,342-room hotel. The hotel is the second phase of an expansion intended to turn the existing Carousel Center mall into a retail and entertainment complex to rival Minnesota’s Mall of America.
Approximate Affected Workforce: 1-50
Source: The Associated Press - March 3, 2008
Syracuse School Board
Syracuse, NY
The Syracuse school board made official Wednesday the elimination of 67.6 positions to balance its budget for the 2007-08 school year. Cutting the 67.6 positions will save the district $4,462,250.
Approximate Affected Workforce: 51-100
Source: The Post-Standard - July 12, 2007
National Grid
Syracuse, NY
Head-spinning at National Grid continues two weeks after state approval of its buyout of KeySpan, with many questions about staff assignments unresolved and revelations that as many as 1,200 union jobs will be cut. The company’s plan is to eliminate 1,800 jobs which includes 600 nonunion jobs. National Grid on Friday said its plan “all along” was to reduce employment levels.
Approximate Affected Workforce: over 1000
Source: Newsday - September 10, 2007
Columbian Mutual Life Insurance Co. Inc.
Binghamton, NY
Syracuse, NY
Vestal, NY
Columbian Mutual Life Insurance Co. said it cut six jobs, five in Syracuse and one in Vestal to eliminate redundancies related to its merger with Syracuse-based Farmers and Traders Life Insurance Co. The job cuts affected mostly senior officer positions. Columbian Mutual employs about 175 people locally and about 40 in Philadelphia and Atlanta.
Approximate Affected Workforce: 1-50
Source: Press & Sun-Bulletin - October 31, 2007
Unity Mutual Life Insurance Co
Syracuse, NY
Unity Mutual Life Insurance Co. plans to lay off nearly half its workers because the Syracuse company is farming out its policyholder service operation to a Wisconsin insurance company. Unity will eliminate 35 of the 80 positions at its headquarters at 507 Plum St. in Syracuse beginning in September, said Joseph Masella, Unity’s executive vice president. The job cuts are part of a new reinsurance arrangement with Madison National Life Insurance Co. of Madison, Wis., Masella said. Unity has agreed to reinsure about 25 percent of Madison’s insurance in force. Reinsurance is a way of transferring some of an insurance company’s financial risk to another insurance company.
Approximate Affected Workforce: 51-100
Source: The Post-Standard - March 26, 2008
The Penn Traffic Company
Syracuse, NY
Penny Curtiss Baking Co. Inc. will lay off more than 50 workers by Sept. 8, after the commercial bakery lost a contract to provide fresh baked goods to Aldi supermarkets. The layoffs affect workers who make fresh baked goods at the plant. The bakery also makes frozen goods. The Penn Traffic Co. owns the commercial bakery. Its largest customer is the company’s P&C and Big M supermarket chains. It also provides goods to other supermarkets. The plant employs about 140 union workers.
Approximate Affected Workforce: 51-100
Source: The Post-Standard - August 17, 2007
The Penn Traffic Company
Syracuse, NY
Regional baker Penn Traffic Co. has shut down its Penny Curtiss commercial bakery and is eliminating about 160 jobs. The company, which operates 103 supermarkets in Pennsylvania, Vermont, New Hampshire and upstate New York, said the bakery accounted for less than 4 percent of its annual revenue. In August, the unit lost a significant contract to supply Aldi grocery stores with fresh-baked goods. Penn Traffic employs about 7,700 people, nearly a third of them in Syracuse. The company said Wednesday Penny Curtiss will shut down immediately.
Approximate Affected Workforce: 101-500
Source: The Associated Press - January 2, 2008
Lifetime Health Medical Group
Rochester, NY
Central Square, NY
The Central Square Health Center is closing because the owner wasn’t able to sell it. Oswego County Opportunities announced Friday that it was discontinuing talks to try to take over the health center. Lifetime Health Medical Group, which owns the center, said in a news release it would provide outplacement help for those losing their jobs.
Approximate Affected Workforce: N/A
Source: The Post-Standard - January 29, 2008
Felix Schoeller Technical Papers Inc.
Pulaski, NY
Felix Schoeller Technical Papers Inc. in Pulaski laid off 17 workers Friday due to what the company said was a seasonal slowdown in sales. The chief executive officer of the company said sales of the ink-jet paper made at the mill speed up before the holiday season and slow down immediately after the holidays, prompting a need for fewer workers. The plant employs 185 people, including 160 production workers.
Approximate Affected Workforce: 1-50
Source: The Post-Standard - January 22, 2008
Magna International Inc.
Aurora, ON
Syracuse, NY
New Process Gear will lay off 313 workers at its suburban Syracuse plant because of reduced demand for its products. New Process is a division of Magna Powertrain and employs about 2,700 people making transmission parts. Magna Powertrain is an operating group of Canadian auto parts giant Magna International.
Approximate Affected Workforce: 101-500
Source: The Associated Press - December 11, 2007
Magna International Inc.
Aurora, ON
Syracuse, NY
New Process Gear plans to lay off more than 1,650 workers at its suburban Syracuse plant over the next several weeks. More than 300 other workers were laid off Jan. 2 as United Auto Workers officials continue negotiating a new contract with Magna International Inc., NPG’s parent company. Before the layoffs, the plant employed about 2,700 people making transmission parts. A UAW handbill distributed Wednesday said there would be 96 more layoffs this week, 1,123 next week and 437 the week of Jan. 28. NPG was formerly owned by DaimlerChrysler, which targeted New Process Gear for closing during national auto contract talks in 2003. Instead, DaimlerChrysler sold a majority of the plant to Magna. DaimlerChrysler got the union’s blessing for the deal by promising to pay workers then at New Process Gear through 2011. Magna has told the union it cannot afford to keep NPG open with its current cost structure and it planned to close the plant.
Approximate Affected Workforce: over 1000
Source: The Associated Press State & Local Wire - January 10, 2008
Vassallo Industries Inc.
Colo Laurel, PR
Van Buren, NY
Syroco Inc. employees arrived at work Monday in Van Buren to find out they no longer had jobs. A notice posted late Friday on company bulletin boards said the company was in financial difficulties and its last day was Monday. This difficult decision is due to increased raw material prices, and operational costs that have affected the profitability of the company, the company said. Syroco said that it was laying off 371 workers and closing its headquarters and plant in Van Buren and plants in Arkansas, California and Florida. The company said it will continue selling its plastic furniture and wall decor until it depletes its inventories. Vassallo Industries Inc., of Puerto Rico, owns the company. Syroco was founded in 1890 as the Syracuse Ornamental Co. by Adolph Holstein to make wooden decorations. In 1962, it began making wall decor products using molded resin. It added plastic patio furniture to its product line in 1986. It had several owners over the years before Vassallo Industries, a company known for making PVC pipe, bought it in 2004 for $40 million.
Approximate Affected Workforce: 101-500
Source: The Post-Standard - June 19, 2007
Pyramid Companies
Syracuse, NY
Development firm Pyramid Cos. is weathering the turmoil in the housing and credit markets through staff cuts and a cash infusion from its main financial partner, Connecticut-based Spinnaker Real Estate Partners LLC. Pyramid President John Steffen said he has cut his staff by more than 30 percent, down to 78 employees from 112 at the end of 2007.
Approximate Affected Workforce: 1-50
Source: St Louis Business Journal - April 7, 2008
I hope this is helps. This is just for Syracuse. About in line with the rest of the US. Maybe a shade better, but insignificantly.
(long whistle)
Thanks so much hoz. I’ve heard of many of these but not the National Grid announcement. That one is going to leave a mark. The Destiny lay-offs were straw employees anyway meant to tease the locals into some tax breaks.
Well I will have some fun with this and the lovely unemployment rate chart posted above.
It’s a twister!
No it’s a cyclone.
I am so glad I shopped for everything this year. Food, clothes, beauty, hobbies and pet stuff. Check check check.
Pass me another one, just like the other one.
Dang! Go for a 45 minute walk and the Market drops 210 points. Wow.
Your walks are bad for the economy.
Let half my index puts go. I don’t trust these clowns.
I’m afraid of clowns…
I’m going to put all of my money in the Bank of Potash!
And monsanto, and dupont…
‘Your walks are bad for the economy.’
Yeah. I blame YOU, Jwhite.
Whack away… Sticks and stones may break my bones but whips and chains excite me…
Can I watch?
Roidy
Called a FSBO yest., it was a house I’d seen advertised by a RE agent and now the owner was trying to sell it. Nice place, built in the 70s on a couple of acres. The owner had recently divorced and had, guess what, an ARM and was in over his head. We got to talking, he had only an inkling as to what’s going on and seemed relieved to hear he wasn’t the only one in this mess. He’s trying to do a short sale and wondered if that would be better for his credit than just foreclosing. He’s worried the bank will come after him.
He was worried about his credit rating because he wouldn’t be able to buy things he needed. His house payment is over 2k/month. He acted like I was a rocket scientist when I told him to put the 2k in savings each month (he’s already stopped making payments). The guy makes 100k, which is a fortune out here (he’s a lineman - cue Glenn Campbell…I am a lineman for the county…). The divorce wasn’t helping things.
He has a short sale with a buyer ready to go that will come in only 8k less than his amount due and the bank won’t work with him. He was telling me some of the things they’d said and their tactics and they really sounded pretty low. They’re tacking on so many late fees he’s lost all hope (over 8k in 2 months). It’s HSBC. They are shooting themselves in the foot by not working with people like this, he was genuinely trying and has a real buyer.
Anyway, this is going on all over the country, but this was the first one I’ve actually talked to. There’s a market out there in counseling these FBs, he seemed really happy to talk to me, said he’d been contemplating buying a gun to shoot himself. I told him to come on down here and I’d take him rafting and kill him for free - the river’s higher than it’s been for years and years.
“i’d kill him for free, rivers higher than its ever been”. hehe
Nice times this summer, eh! Wish I were there.
Come on out! Bring some real beer (not the near beer we have out here).
“They’re tacking on so many late fees he’s lost all hope (over 8k in 2 months). It’s HSBC. They are shooting themselves in the foot by not working with people like this, he was genuinely trying and has a real buyer.”
Slimey *&%4 banks.
“I told him to come on down here and I’d take him rafting and kill him for free”
I’ll have to remember that when I’m feeling blue. It would be awesome to go out w/a smile on one’s face. And maybe w/that adrenaline rush, he’ll push on for another day.
I am puzzled however how people get so caught up in their own little worlds to the point where they haven’t read a Newsweek or heard a network news story on this debacle. I’m glad he had someone to give him a lift though.
While undesirable and a pity for everyone, if the fees are disclosed and a contract is signed and a word given, why would that make the banks slimey?
I read Lost’s comments to mean the bank representatives were extremely heavy-handed and excessively rude. That’s not only unnecessary, but counter-productive…..not to mention childish.
“I told him to come on down here and I’d take him rafting and kill him for free - the river’s higher than it’s been for years and years.”
Does ‘Lost in Utah’ refer to yourself or people you take rafting?
Hey Al, I tried a dash of that wicked brew you recoemmended and if yu dont heer from me again, you’ll kno why, sqqy (cant seee too good lready…)
This paper assumes that a central bank commits itself to maintaining an inflation target and then asks what measure of the inflation rate the central bank should use if it wants to maximize economic stability. The paper first formalizes this problem and examines its microeconomic foundations. It then shows how the weight of a sector in the stability price index depends on the sector’s characteristics, including size, cyclical sensitivity, sluggishness of price adjustment, and magnitude of sectoral shocks. When a numerical illustration of the problem is calibrated to U.S. data, one tentative conclusion is that a central bank that wants to achieve maximum stability of economic activity should use a price index that gives substantial weight to the level of nominal wages…
Consider how a monetary policymaker in 1998 would have reacted to these data. Under conventional inflation targeting, inflation would have seemed very much in control, as the CPI inflation rate of 1.5 percent was the lowest in many years. By contrast, a policymaker trying to target a stability price index would have observed accelerating wage inflation. He would have reacted by slowing money growth and raising interest rates (a policy move that in fact occurred two years later). Would such attention to a stability price index have restrained
the exuberance of the 1990s boom and avoided the recession that began the next decade? There is no way to know for sure, but the hypothesis is intriguing.”
What Measure of Inflation Should a Central Bank Target?
N. Gregory Mankiw
Harvard University
Ricardo Reis1
Harvard University
December 2002
http://www.economics.harvard.edu/faculty/mankiw/files/target.pdf
A pdf file so caution
Some very nice graphs on unemployment vs CPI. Inflation appears to be out of control. The biggest problem with the Federal Reserve’s use of the Taylor rule to guide economic policy is the rule is macroeconomic only with regards to the US. Very few (less than 10) economists look at macroeconomics from the world view, to many variables. International traders don’t really care about economics; they look at supply/demand, who is buying/selling, the money flows, world inflation rates and liquidity.
Uncle Buck is breaking down hard; ready to test the lows next week. What made the Fed think they could control the inflation they knew the were creating? Jawboning won’t work; everyone knows they won’t raise raise. What will they say when oil hits 150? Game over man, game over.
Hoz,
Are you sure you linked the paper that you meant to? I say plenty of equations, but no graphs.
Or is graphing the equations left as an exercise for the reader?
“Trailer for sale or rent
Rooms to let…fifty cents.
No phone, no pool, no pets
I ain’t got no cigarettes
Ah, but..two hours of pushin’ broom
Buys an eight by twelve four-bit room
I’m a man of means by no means
King of the road.”
(Roger Miller was a musical genius.) Just heard from a friend whose parents (a retired couple) are in deep water and losing their house and going to live full-time in their RV. The new gypsies.
Wreckreation Vehicle?
When you can’t fill your RV with gas because it’s too expensive, you just have an unstable single-wide.
I love that song. Wouldn’t mind RV living at all, as long as I had beer, a rice cooker, and a BBQ…
JW, I’m considering buying a pull trailer to haul behind my pickup w/camper and saying just fling it…to heck with renting, I’m an anarchy-ologist and can live outside forever, it’s just that I refuse to abandon my cats, so the trailer would be for them.
I’ll call it the Cathouse.
I’ll sit outside on the steps and drink beer and sing another great Roger Miller song:
Chug-a-lug chug-a-lug makes you wanna holler hi-dee-ho
Burns your tummy don’t you know chug-a-lug chug-a-lug
Grape wine in a Mason jar homemade and brought to school
By a friend of mine after class me and him and this other fool
Decided that we’ll drink up what’s left chug-a-lug so we helped ourselves
First time for everythin’ ummm my ears still ring
Chug-a-lug chug-a-lug…
LOL - I was just thinking that some entrepeneur could make a killing manufacturing yurts right about now…
It’s in Canada, but you’ve got the idea!
http://www.yurtco.com/
People call me an asshole but, I love my cats. Good for you LIU.
“One must search through a maze of complex and contradictory details to get to the significant facts…..Then he must be able to operate coldly, clearly, and skillfully on the basis of those facts.”
Bernard Baruch
Trading rule number 4: Darkness is ahead, see the past clearly.
–
“Darkness is ahead…”
That is because our economy and the financial system are guided, or manipulated, by dark forces., mostly behind the scenes. The HB didn’t just happen by random play of the free market.
Jas
“…Meirelles told the Brazilian parliament at the end of May that the bank will act to prevent rising wholesale industrial and agricultural costs from spreading to consumers as household demand expands at a record pace. The IGP-M inflation index, which has a 60 percent weighting in wholesale prices, rose to a three-year high of 11.53 percent in May.
Consumer prices had their biggest increase in four months in April on the back of of higher food costs. Consumer prices, as measured by the government’s benchmark IPCA index, climbed 0.55 percent In April - up from 0.48 percent in March. Brazil’s inflation rate in the 12 months to April was 5.04 percent.
Most of the macro economic indicators are showing signs of strong demand. Lending by banks has climbed at least 20 percent in each of the past three years. Retail sales jumped 11.4 percent in March, capping the strongest quarter on record. Industrial production jumped 10.1 percent in April from a year earlier, the highest in six months.
This picture is only completed when you think about the large inflows of funds Brazil is receiving at the present time. Brazil received $37.2 billion of foreign direct investment in the 12 months through April, a record annual inflow, and foreign exchange reserves were up to $195 billion in March 2008.
The half-point rate increase pushes Brazil’s real interest rate, which is the rate after adjusting for inflation, to 7 percent, the highest among the world’s leading economies.
Meirelles is also receiving significant backing from Brazil’s President Luiz Inacio Lula da Silva who, after being re-elected to a second term in 2006, vowed to accelerate growth to a 5 percent annual pace through 2010. Economic growth accelerated last year to 5.4 percent and Brazil’s economy grew at a 6.2 percent rate in the fourth quarter, more than twice the average pace of the past decade…”
Brazil Economy watch
http://brazileconomy.blogspot.com/
“The half-point rate increase pushes Brazil’s real interest rate, which is the rate after adjusting for inflation, to 7 percent, the highest among the world’s leading economies.”
Just wait until Obama hires Paul Volker, …Ben Bernanke will be vacationing in Rio wearing a g-string
Hoz:
Any suggestions for tapping Brazil opps in a risk averse way?
I’m leary as I was an exchange student there some 20 years ago — just after second currency deval — seeing devastation first-hand left its mark.
That said, am aware ’tis much positive news coming from down that way (near-oil independence, nat resources, inexpensive labor, global arbitrage, etc).
ETF’s?
Treasuries? (google tells this is takes a few hoops?)
Other?
Any comments/pointers much appreciated.
- Angus
Indeed. And the market went up the other day on ‘better than expected retail numbers.’ Yes, sales at Costco and WalMart/Sams were better than expected.
Undisclosed is the amount of food and now gas that these places sell. And undisclosed is that massive inflation of prices should not be seen as a good thing or as a market positive.
Huge moves in commodities. Deflationistas, fiatsco-hoarders obliterated.
Market Last Change %
Crude Oil 133.92 +6.13 +4.78
Natural Gas 12.697 +0.178 +1.42
Corn 686.00 +15.25 +2.28
Soybeans 1482.5 +30.5 +2.11
30yr Bond 114.078125 +0.640625 +0.56
10yr Note 113.59375 +0.34375 +0.30
NY Gold 897.4 +21.9 +2.49
IN TRADING STRATEGIES
JUNE
How to play a greenback comeback
John Dessauer and Bill Donoghue argue over the prospects for the dollar. Michael Kahn shows how small-cap stocks are
the way to go as the currency rebounds.
Authors of such articles should be held accountable for ruining people who listen to them.
Anyone who takes this kind of unsupported conjecture as gospel deserves the fate which awaits them.
–
John Dessauer, in 1999, said that WorldCom will earn $14 a share and had a huge price target. I has just comeback from a business trip to WorldCom facility in CO. I used the term Worldcon and predicted its demise based on the fraud that I and how no one cared.
Jas
John Dessauer was the guy that got me into Countrywide in 1994 in my retirement account. It was a gigantic winner. I sold it at 32 (lol)
also good winners from him, Banco Santander, SEIC Corp.
Oil prices shot up nearly $10 to a new record above $137 a barrel Friday after a Morgan Stanley analyst predicted prices could hit $150 by the Fourth of July.
Limit up on oil is $10 by the way.
They raised it to 20 since heating oil hit the stops this morning…
10 in the pit, 20 in electronic.
–
David Rosenberg:
“Bull market in bullion may well be over — There was a time about five years ago when every country wanted to depreciate its currency in order to stimulate growth: This was bullish for gold, which embarked on an impressive rally against all currencies. Now central banks are looking to lift their currencies to stem inflation. For gold – this will have the opposite effect. The bull market in bullion may well be over.”
Rosenberg is the best economist on Wall Street. Inflation rate should peak during May-July 2008 and then head straight down. Not too many govts and CBs want street riots.
Jas
The Merrill economist? The best economist on Wall Street, ROTFLMAO.
Find a credible source. Like Chris Woods or others that trade commodities on an international basis.
–
Prejudice is a terrible affliction.
Jas
The biggest commodity rally in 30 years and he missed the boat and has been calling for a drop since 2004.
Jas, your lack of understanding in what is happening world wide and your fixation on a deflation scenario for the US has made you prejudiced not me. You are the bigot that fails to look at reality. It is a world wide party fueled by $10T US dollars.
–
“You are the bigot that fails to look at reality.”
Vow! I am speechless. Keep up the name-calling because it conveys some information.
“It is a world wide party fueled by $10T US dollars.”
We agree on this one, but the $10T would start to decline as the mortgage debt gets deflated. Inflation was a debt phenomenon and the coming deflation would also be a debt phenomenon.
It IS the Debt, Stupid!
Jas
Jas takes no responsibility for his past calls.
He ‘guaranteed’ that Bernanke would not inflate.
When oil was $60 he said it was going to 20 by this spring.
Jas lives in a deflationary fantasy world where no evidence of his beliefs is required, even in the face of uncontrolled inflation.
Stop beating a debt horse…
Jas
You are the one that used “Prejudice”. You know jack shit about what you espouse. You are completely full of crap regarding scenarios for deflation or inflation. Show me one piece of evidence, other than housing and the stock markets (which are both in a bubble), that suggests deflation. 6 -9 months, that is what you wrote 18 months ago. Deflation aint happening.
Jas,\
I am biased against stupidity. You used the word prejudice.
from Merriam Websters Dictionary
Bigot -: a person obstinately or intolerantly devoted to his or her own opinions and prejudices
That is you. I change my opinions based on fact, you live in fantasy land.
Sally Limantour. Do you know her?
–
??
Jas
that was directed to Hoz re commodity expert.
BOT, very bright. Current director? Long bonds in the 87 crash 12pt rally limit up each day with no trades. A lot smarter than me.
I was one of her proteges.
Keep flying that deflationary flag Jas. Any day now, right?
$134 oil and 264 points down on the Street. Exciting Friday, time for a cold one…
Bubble era favorite stocks are getting hammered big time today.
I see clear indications that Wall Street may have entered a Neoclassical Era where today’s news once again gets rationally and efficiently priced.
those are the ones you’re gonna want to buy when this market finally bottoms (whenever that is)
What she said.
Headed out to see Norman’s house…
http://www.nps.gov/seki/historyculture/clyde.htm
Clyde climbed Mt. Whitney at least 50 times
Jeezlouise!!
Apparently Uncle Buck is still king in some unlikely corners of the globe.
The dollar still reigns in Caracas
Locals get creative in hunt for greenback, and black market thrives
By Jasmina Kelemen
Last update: 12:01 a.m. EDT June 6, 2008
–
Inflationists Please Note: “CPI data is distorted to the upside, not the downside”
David Rosenberg:
“CPI data is distorted to the upside, not the downside — In fact, for all the talk about how the inflation data are distorted, we have news for you. The distortion is to the upside, not the downside. The auto component of the CPI shows a 0.3% YoY decline as of March. But the Manheim car price index is down 5.1%. The housing component of the CPI shows a 3.1% YoY increase and yet the Case Shiller index reveals a 14.4% slide. Replace what’s in the BLS data on cars and homes with the Manheim and Case Shiller indices and guess what? The headline inflation rate, even with food and energy, is -0.5%, not +3.8%. And that means ‘real’ bond yields are +450 bps, not +25 bps as is commonly perceived.”
I luv my USTs! 10-Year yields below 2% before 2009 is out.
Jas
The problem is this - people are no longer buying houses and cars - thus it doesn’t matter if prices are coming down on those items. They are however still buying food and energy, which are still skyrocketing.
Being extreme of course - there are *some* people still buying cars and houses, but the principle is there - there are much fewer now than 2 years ago.
It’s becoming more clear what’s been said on this board by a few folks over the last few months. The inflation vs. deflation argument is now null, and moot. Instead we’re having simultaneous inflation and deflation - at this point to the extreme. Deflation of luxuries, and inflation of necessities.
That is clear now. Crystal clear. To put it bluntly - whoever doesn’t see that is a fool.
Nicely struck.
–
I thought that it was a foul ball.
Jas
History may prove you right, especially in the oil price department. Crushingly high oil prices quickly translate into crippling high gas prices, and the demand response can quickly translate into a future supply glut.
I’m praying for “future supply glut”.
–
Computer and communications have been necessities for me for a very long time and so has been information in various forms.
I bought the steaks (NY at $3.79/lb) and wines (Toasted Head and Five Rivers Chardonnays at 8.99 and 4.49, respectively, and Pepperwood Cabernet at $4.49; I even bought Graham’s Port, all the bottles the store had, at clearance at $7.8) that I like at prices that are the same or lower than 20 years ago. The lettuce was on sale for 69c and tomatoes at 99c/lb.
My gas prices have gone up but the car repair and maintenance costs are way down.
Enjoying deflation,
Jas
Staitjacket prices are deflating as well…
Lad, I look up to you. This is just getting ugly.
We get it, okay, even if he doesn’t.
Computers are indeed necessities these days. New computers are not. Anyhow electronics by their nature are deflationary anyway; they always will be regardless of the market.
Agree with your observation on steaks and wine and such - we’ve seen prices of those coming down. To most people though those again are luxuries; at least to people who are financially strapped. Our observations on prices of staples - milk, bread, eggs, flour, cereal, etc. - is that prices are going up quite fast. Certainly of course gas is going way up as you say.
The primary reason for the drop in meat prices is the inability to export. The US does not meet Asian purity standards, again. No exports to China, Korea or Japan. However next month Milk should be a little over $5/gl.
Price of meat is about to skyrocket. Producers have been liquidating stock which they cannot afford to feed. That is almost over.
It doesn’t seem like getting the newest processor is nearly the necessity it was 8-10 years ago. I remember when making the leap from 286 to 386 to 486 and pentium was such a big deal. The standard programs just got bigger and bigger and you needed the new machine and bigger disk and RAM just to keep up.
I think when Micrsofot went to XP instead of naming Windows after years, the rush slowed down a lot.
“Crystal clear”
What is crystal clear is that people who bought houses and cars locked up a huge portion of disposable income and it’s the remaining disposable income that’s getting whacked by the inflation caused by the high oil prices.
Brilliantly put!
“That is clear now. Crystal clear. To put it bluntly - whoever doesn’t see that is a fool.”
Correction, packman -
To put it bluntly - whoever doesn’t see that is blind or dead.
Did anyone see Ed McMahon and his wife on Larry King last night talking about their foreclosed house? Basically the reasoning was:
“Well, you know, things happen. You get sick, you don’t work, you spend more than you make and pretty soon you are behind”
No Ed, YOU are behind. I am up to date thank you very much.
They also joked about being “millionaires”. The wife sarcastically: “I don’t know Ed, where ARE all these millions every one keeps talking about?”
It was unreal. The wife talked about how we should “help each other”. She didn’t come right out and say it, but it seemed clear to me she thinks she deserves a bailout.
The worst part was when the email started rolling in. One guy send an email saying he wants to help and is there a fund to help save Ed’s home. I was astonished…
Shows how people think about celebs - irrationally.
Fed’s Bullard: Fed must tackle inflation this year
“After a 10-month period in which the dominant policy concern has rightly been the state of financial markets, policy can begin to address pressing inflationary concerns during the remainder of the year,” he told a housing conference hosted by the University of Wisconsin-Madison.
http://biz.yahoo.com/rb/080606/usa_fed_bullard.html?.v=1
i like how this guy says “can begin” i would like to hear “will begin”
ATMs play bigger role in identity theft
By Jay MacDonald • Bankrate.com
Before Jay Foley inserts his bankcard into an ATM slot, he sticks his finger in first. Then, he wiggles it.
“If any portion of it wiggles with my pinky, I walk away because odds are somebody has slapped a skimmer on the front,” says Foley, executive director of the San Diego-based Identity Theft Resource Center. “That applies to any kind of payment slot you might run across, such as gas station pumps. Those are favorite places for thieves to work now.”
The FBr sherrif
http://www.marketwatch.com/news/story/sheriff-takes-law-his-own/story.aspx?guid=%7BB1F381D1%2D5FBE%2D4D81%2D9C16%2DBFAB262EDE94%7D#comment298588
Incredible….
This is for Lost,
A NYTimes travel piece, Rafting thru Prehistory in Utah…
http://travel.nytimes.com/2008/06/06/travel/escapes/06monument.html
Nice article, Spike - the San Juan is a mellow river and very pretty. It’s famous for its sand waves, really weird when you’re out there and see these big waves running upstream towards you. The big ones can slam you pretty good.
OT: The San Juan is one of two places where I’ve been actually lost (in spite of my name), and I was with a regionally famous older guy (won’t embarrass him in case he’s reading this - LOL) who knows the country like the back of his hand. We took off up a side wash and found a big pool with a blue heron in it and then we started tracking a gray fox and before we knew it we were lost.
I finally found my way back, but he hasn’t been seen since…
That area holds a special place in my heart. I proposed to my wife (of 10 years now, as of two weeks ago) on top of Cedar Mesa near the Moki Dugway, overlooking Valley of the Gods at sunset. It was… inspirational. At the time I had not planned on proposing then, but knew I had someone special and went for it. Later we celebrated by doing dinner via microwave at what I think was a Quik Stop up in Hanksville or thereabouts. Not a lot of five-star restaurants around there.
Last year we went through that area again and checked out Goosenecks state park on the San Juan. Neat, neat place.
What a great place to propose! Cedar Mesa has tons of ruins, I once found an old old fire ring with a perfect Black-on-White mug (Aasazi) next to it as if the owner had left the day before. Coffee was probably more accepted in Utah then. LOL
June 6, 2008
Operation Overloan
D-Day
Dow -333
Market Last Change %
Crude Oil 137.9 +10.11 +7.88
LOL
Dude - you are going to have a special chapter in Ben’s book.
Oil comes within a jot of hitting $140 bbl today… It will probably sag some come Monday.
Why?
I think there’s gonna be a bit of profit taking because of the phenomenal run-up today, then a march to $150 bbl, followed by another drop because of demand destruction - It’s like any thing else, there’s no infinite run-up. Correction happens. However, I still think we had better get used to $5 - $6 a gallon gas.
What most individuals seem to forget is that OPEC is a huge player on the sell side. They got taken out at every point. The primary buyers were foreign countries -not speculators. Speculators were selling into this rally. oops.
I agree with you this is early for oil to move upward, but the consolidation from Mon to yesterday morning with so many foreign buyers …
Commodities have a history of moving in waves. The first 2 waves were 38 points and pennies each, this is the third wave - it could be a tidal wave.
He who picks tops ends up bald.
“Batten down the hatches!!!”
Market Last Change %
Crude Oil 138.96 +11.17 +8.71
NY Gold 902.8 +27.3 +3.10
The curse of the news cover on oil
The Economist recent edition
The oil price Recoil
May 29th 2008
From The Economist print edition
http://www.economist.com/opinion/displayStory.cfm?Story_ID=11454989
Fade the covers of the news magazines. Mt fav was Times and Newsweek both had an article in the mid ’70s same essential headline “The Death of Equities”. It never looked back.
Put on the Jiffy Pop! The derivatives market is about to tank!
http://georgewashington2.blogspot.com/2008/06/derivatives-market-is-unwinding.html
So another week where Mr. Paulson says we favor a strong dollar and the dollar falls 2%.
Paulson will be just like this idiot when its all over……..
“Few things in life pack such emotional punch as money, and here the peso is almost revered as a symbol of sovereignty. Jose Lopez Portillo, a former president, once vowed that he would “defend the peso like a dog.” Later, toward the end of his administration, it was devalued, and people still bark and howl at him. “
Where is combotechie and exeter and the gold bash crowd? I need a reminder that every dollar is precious and unique, like a snowflake.
“Where is combotechie and exter and the gold bash crowd? I need a reminder that every dollar is precious and unique, like a snowflake.”
I’m still here. Don’t know about the dollar being unique “like a snowflake” but it sure works like nothing else when it comes to paying my bills.
BTW, what do you use to pay your bills?
June 6 (Bloomberg) — Treasuries rose, heading for the biggest weekly gain since February, after a government report showed the U.S. unemployment rate rose in May by the most in more than two decades and the economy lost jobs for a fifth straight month.
Paulson can say whatever he wants about a strong dollar our economy is not cooperating.
A move into Treasurys is bullish for the long-term value of Uncle Buck.
The euro strengthened further against the greenback Friday. A Labor Department report showing the U.S. unemployment rate jumped half a percentage point to 5.5 percent last month — its biggest monthly increase since 1986 — could drag the dollar even lower in the days ahead.
“Unemployment jumping as it did today will be in the market for a long time and will continue to pressure the U.S. dollar,” Cordier said.
http://biz.yahoo.com/ap/080606/oil_prices.html
Will the Fed follow through on its dollar support jawboning? I am guessing they could create a really, really big oil price spike after the next meeting by lowering rates after all the talk about containing inflation. The ancient Chinese curse allegedly says, “May you live in interesting times,” and we do!
THE FED
Will the Fed hike rates? Depends on whom you ask
Economists say no, but debt investors hedge bets as oil tops $139 a barrel
By Laura Mandaro, MarketWatch
Last update: 4:51 p.m. EDT June 6, 2008
SAN FRANCISCO (MarketWatch) — Two jolts to the market Friday, a surprise spike in the jobless rate and a fresh surge in oil prices, have highlighted a split on Wall Street as to whether the Federal Reserve is likely to increase interest rates this year.
“The federal government is sending each of us a $600 rebate. If we spend that money at Wal-Mart, the money goes to China. If we spend it on gasoline it goes to the Arabs. If we buy a computer it will go to India. If we purchase fruit and vegetables it will go to Mexico, Honduras and Guatemala. If we purchase a good car it will go to Germany. If we purchase useless crap it will go to Taiwan and none of it will help the American economy.
The only way to keep that money here at home is to spend it on prostitutes and beer, since these are the only products still produced in US. I’ve been doing my part, and I thank you for your help”!
-Eliot Spitzer (former Governor, New York)
(comedy from Mark Faber: Doom, Gloom and Boom by way of the Big Picture)
Don’t they make junk food in America?
I just wonder how much a gigalo costs these days.
“Hey, you over there, the one with the skinny butt”.
“The only way to keep that money here at home is to spend it on prostitutes and beer,”
That’s a Nigerian ploy… and it’s anti-American…
You can spend it here:
http://www.paypal.com
Send it to PayPal Account name:
ben262@hotmail.com
God, how big money loves to gamble while the little fellow scrambles (just to survive). Middle-class America getting screwed again from sea to shining sea. What’s the next scam that’ll hurt us all?
One-armed jacks, three in a row: Tech bubble, housing bubble, and commodities bubble. And what’s next..?
Should read ‘one-armed bandits’. I’m not feeling so well today after seeing the market drop so far so fast.
Bernanke’s Speech: “Don’t blame me. It’s all China’s fault”
(by Mike Whitney)
http://www.smirkingchimp.com/thread/15081
(Apparently the present problems are the fault of everyone EXCEPT the Fed… )
Hey AKron,
Where the heck have you ben?
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