Bits Bucket For June 8, 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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Michael Viking compared weather forecasters to climatologists. The comparison is faulty.
I can’t tell you who will be murdered in New York City next year, nor can I tell you how many murders will occur on each day. But, I can tell you that the murder rate for the year will be around 7 per 100,000 +/- .6. It is often easier to predict a long-run trend than an exact event and its timing.
I assumed all my fellow bloggers here already knew that. Most of us accurately predicted every event now unfolding in the national housing market. Yet, for months, or years, we endured the smug attitudes, condescending idiocy, and outright hostility of those we tried to warn of the impending comeuppance. Why? Because we were not accurate enough on the timing, even though we were extremely accurate on the ultimate outcome and pretty accurate on even the sequencing.
So, comparing the weather forecaster to the climate forecaster is . . . unhelpful. Predicting the weather for June 9, 2008 in location X is much more difficult than predicting the climate for YEAR 2058 should A, B, and C happen, especially when you consider the tightness of the bounds needed for Monday’s forecast to be useful (e.g., if its supposed to rain during rush hour, I carry an umbrella, but if it will rain in late morning, say 10am-noon, no need to have an umbrella, and so on).
We mostly got the timing right too thanks to Ivy Zelman’s little chart. Of course, she got fired for it.
Of course, her firing led to an opportunity to form her own firm where she can express her views unencumbered by big bosses who insist on keeping elephants hidden under rugs. Crisis often times opens the door to a better opportunity.
And hence the need to have adequate savings at the ready, to give you the backing and confidence to take a chance on that opportunity should the need occur.
I speak from (current) experience.
Heck, I couldn’t even predict the winner of the Belmont, and I was dead-certain about it. Am very grateful that I didn’t put money where my mouth was, on that one. Bet there will be a few more fancy cars for sale next week.
I see what you’re saying, but I’m not so sure I’m the one who’s faulty. What you’re saying sounds “good” and “logical” at first blush, but it’s not correct. You split the groups into two: climatologist and forecasters. The fact is both groups have weather models and they use those models to predict the future.
You liken weather forecasting to predicting who will be murdered on a given day. This isn’t a fair comparison at all. The odds of predicting who will be murdered are astronomically small, the odds predicting somebody will be murdered is no big deal. You liken climatologists to predicting somebody will be murdered in the next 50 years and imply they have a much better chance of being right. Of course they do - somebody will be murdered in the next 50 years. Useless. And not at all like what climatologists do.
Climatologists and Forecasters both have elaborate models to predict future weather patterns based on current and past data. The only difference is the timespan involved. A fair comparison (using your example) would be: forecasters predict how many people will be murdered tomorrow or next week. Climatologists predict how many people will be murdered in the next 50-100 years. If you can predict that there will “around 7 per 100,000 +/- .6″ murders in a year, than one can divide by 365 and update the standard error appropriately and estimate how many people we murdered on a given day. You are using the law of large numbers to imply that climatologists can predict long range better than forecasters can predict short range - now *that’s* what’s faulty.
Michael, Michael, Michael!
You write: “Climatologists and Forecasters both have elaborate models to predict future weather patterns based on current and past data. The only difference is the timespan involved.”
And, your point is? Time span is irrelevant to the accuracy of a prediction? That’s an odd position for an HBB reader to take, or, indeed, anyone who makes predictions. So, you and all those realtwhores agree? Buy houses, houses will go up in price for sure, if you hold them long enough? You shouldn’t be concerned that only your great great great grandkids will get the proceeds while during the interim there’ll be no gain, and even those “gains” may be in inflated dollars and thus cancel out.
One response to this view is to be a perfect predicter — just predict “Everything will happen eventually” and no one can disagree. But, helpful predictions require more.
In reality, considering the scale needed to be helpful, long range forecasts are often more accurate than short-range forecasts. Think about it this way. How many people will be living on earth at noon GMT June 9, 2008? Now, predict how many people will be living on earth at noon GMT on January 1, 2009? Now, predict how many people will be living on earth at noon GMT on on January 1, 2029?
Now, to make it reflect the level of accuracy desired for planning, if you had to make a 1,000,000 bet, and be accurate to within 1 person for 6/9/08 and 1/1/09, but be within 500 million persons for 1/1/29, which would you do? Which bet do you think you’d have the best chance actually winning?
If MViking is right, one should be indifferent, because all predictions will be equally accurate because, gosh-darnit, they all use complex models. Thus, increasing the range of error by 500 million times would be of no consequence. In reality, however, for a prediction of the near-term to be informative it must be far more accurate than a long-term prediction. Why? Well, one way to think about it is that, because, staying with global human population, we have good reason to believe Tuesdays population will be very near Monday’s population which will be near Sunday’s population. Improving on that requires incredible accuracy and much more knowledge to produce that accuracy. However, looking out 20 years, the range of possibilities is far larger. Improving on that possible range is, thus, easier.
This is all very obvious, and why MViking and others make such faulty equations, e.g., weather forecasters = climatologists is unclear. But, I have only scratched the surface of determinants of accuracy. For example, whether it rains tomorrow in Rapid City, how much money goes into figuring that out? How much really turns on that? Yes, a few commuters may be inconvenienced depending on whether the forecast is accurate, but mostly it is of little consequence. Contrast that with global climate projections out 20 years — who loses if those are off, and what resources might they bring to bear to get a glimpse of the future to aid their planning? If we consider only the amount of resources devoted to the enterprise, you would expect likelier helpful predictions out of climatology than out of your local weather forecaster. But, sophists persist in comparing the two.
This example makes it clear why so many could be so deluded by the housing debacle, and reveals once again that incredible, awe-inspiring insight in one area is often unaccompanied by insight in others. If only dialogue, not a desire to “win,” motivated the discussion, it would help a lot. With such a motivation, such faulty weather”man” = climatologist analogies would be abandoned when revealed to be obfuscatory and incorrect, and the level of discussion would rise to address the real complexities of the issue, complexities about which there is reasonable reason to doubt and wonder.
Respectfully yours,
IAT
I don’t think you understood what I said.
Comments like “So, you and all those realtwhores agree” certainly show you are poor at drawing conclusions and the phrase “Michael, Michael, Michael!” shows that you’re a God way above Gods and I’d never reach your level no matter how you explained things, so there’s nothing more to say.
Cheers!
Yeah, you probably won’t see this, but I apologize. As you may know, I’ve been decapitated by JT, and I guess I lost my head.
You ask a good question. I answered disrespectfully. But, in my answer, if you can read past the disrespect, is an answer to your question.
I can give you analogy after analogy.
How many hits will Chase Utley get in his next game? Hard to predict. How many hits will Chase Utley get over the season? Easier to predict.
In the short term error swamps systematic information. In the long-term the system wins, and thus our knowledge of the system makes us able to make better predictions long-run than short-run. This dynamic is even more pronounced if you put far more resources into making long-run rather than short-run predictions.
Again, I am sorry for the disrespect. Your question, and you, did not deserve it.
IAT
Pretty good.
Joshua Tree wants proof that climate change may lead to both warming and cooling (in different places or different seasons).
Although I doubt you’ll accept my evidence, here’s some:
1)
http://ipcc-wg1.ucar.edu/wg1/Report/AR4WG1_Print_Ch11.pdf
See page 850, column two, which reads, in part:
Snow season length and snow depth are very likely to decrease in most of North America except in the northernmost part of Canada where maximum snow depth is likely to increase.
2)
http://ipcc-wg1.ucar.edu/wg1/Report/AR4WG1_Print_Ch05.pdf
See page 391-392 which reads, in part:
A major feature of Figure 5.1 is the relatively large increase
in global ocean heat content during 1969 to 1980 and a sharp decrease during 1980 to 1983. The 0 to 700 m layer cooled at
a rate of 1.2 W m–2 during this period. Most of this cooling
occurred in the Pacifi c Ocean and may have been associated
with the reversal in polarity of the PDO (Stephens et al., 2001; Levitus et al., 2005c, see also Section 3.6.3). Examination of the geographical distribution of the differences in 0 to 700 m heat content between the 1977–1981 and 1965–1969 pentads and the 1986–1990 and 1977–1981 pentads shows that the pattern of heat content change has spatial scales of entire ocean basins and is also found in similar analyses by Ishii et al. (2006). The Pacifi c Ocean dominates the decadal variations of global heat content during these two periods. The origin of this variability
is not well understood.
In other words, even as land mass temperatures are rising, the oceans are heating, but some cooling has been observed. More cooling in the Pacific, which means other oceans may have heated more than previously realized for that period.
3)
Oh, and here’s a paper you might find interesting:
http://www.springerlink.com/content/g618316500q56235/
“Impact of carbonaceous aerosol emissions on regional climate change” by E. Roeckner, P. Stier, J. Feichter, S. Kloster, M. Esch and I. Fischer-Bruns
The abstract says:
Abstract The past and future evolution of atmospheric composition and climate has been simulated with a version of the Max Planck Institute Earth System Model (MPI-ESM). The system consists of the atmosphere, including a detailed representation of tropospheric aerosols, the land surface, and the ocean, including a model of the marine biogeochemistry which interacts with the atmosphere via the dust and sulfur cycles. In addition to the prescribed concentrations of carbon dioxide, ozone and other greenhouse gases, the model is driven by natural forcings (solar irradiance and volcanic aerosol), and by emissions of mineral dust, sea salt, sulfur, black carbon (BC) and particulate organic matter (POM). Transient climate simulations were performed for the twentieth century and extended into the twenty-first century, according to SRES scenario A1B, with two different assumptions on future emissions of carbonaceous aerosols (BC, POM). In the first experiment, BC and POM emissions decrease over Europe and China but increase at lower latitudes (central and South America, Africa, Middle East, India, Southeast Asia). In the second experiment, the BC and POM emissions are frozen at their levels of year 2000. According to these experiments the impact of projected changes in carbonaceaous aerosols on the global mean temperature is negligible, but significant changes are found at low latitudes. This includes a cooling of the surface, enhanced precipitation and runoff, and a wetter surface. These regional changes in surface climate are caused primarily by the atmospheric absorption of sunlight by increasing BC levels and, subsequently, by thermally driven circulations which favour the transport of moisture from the adjacent oceans. The vertical redistribution of solar energy is particularly large during the dry season in central Africa when the anomalous atmospheric heating of up to 60 W m-2 and a corresponding decrease in surface solar radiation leads to a marked surface cooling, reduced evaporation and a higher level of soil moisture, which persists throughout the year and contributes to the enhancement of precipitation during the wet season.
I.e., cooling in Africa. Of course, this is one model. There are several different models. The field is very active, and things are unclear and also rapidly changing as understanding of the complexities increases.
If at this point one disagrees that climate change can lead to both cooling and warming at the same time in different places, or in the same place at different times, I suggest you contact those authors and ask them to clarify their claims. I’ve pretty much done all I can do here.
Respectfully yours,
IAT
Can I just ask one question here? Is there anything that could ever happen in the weather that would tend to negate the claim of global warming?
I’m no climatologist, but it seems to me (as others have observed) that global warming is becoming a “non-falsifiable” assertion: everything proves it. If it’s warmer than usual, of course it’s global warming. If cooler, that’s also somehow because of global warming. If there’s a flood, a drought, if it’s windy, not windy, medium windy, it’s all global warming. So what, if anything, would prove the contrary?
Don’t question global warming, it’s unpatriotic.
Dear LVG,
There is a real danger that every observation will be seen as confirming of climate change, especially in the MSM. This, as you say, makes the thesis impossible to refute.
However, I think if you go to the technical literature you’ll find more precise specification of the phenomenon, and that more precise specification can be refuted, i.e., falsified.
One problem is the science culture and the public culture are not in sync. Most scientists admit that we have insufficient knowledge of the climate. This means that as we accumulate new knowledge, and input it into the models, we change our predictions. This is all very normal science behavior (e.g., see Kuhn).
The problem is that the public is watching this, and most of the public was taught a caricature of what science is. The public presumes scientists know the answers, just like the public presumes (their preferred) politicians know the answers. The quickest way (okay, maybe not the quickest, but one way) to lose an election is to say “I don’t know.” So, if you look at campaigns, you’d think the politicians are geniuses, because they have a solution for EVERYTHING.
Scientists work under no such requirement — the quickest way to become a respected scientist is to be able to admit “I don’t know.” Einstein said as much several times throughout his career. When science culture of curiosity meets public culture of certainty, a culture where an admission of ignorance or a change in position is seen as weakness — well, you can see how this can lead to mis-communication and undermine public belief in things about which scientists do have confidence.
So, yes, it is important that the thesis be falsifiable. The thesis in the MSM is probably not falsifiable. But, the thesis of climate change as discussed in the technical literature is falsifiable.
IAT
Isn’t it also likely that there are few or no “grants” for people whose job it is to prove that when it occurs, global warming is a natural cycle? If the only people getting grants are getting the grants in order to determine that global warming is caused by humans, then it is pretty easy to guess that they will claim that, in order to keep the paychecks coming. It can’t be too difficult to research the source of grant and foundation money and deduce the side of the board they’re coming from.
My rhetorical questions really concern all grants for research in fields where the conclusions are subject to intense political debate, not just those that deal with warming.
Er…the third rock fom the sun’s axis shifts creating new polars ever so slightly?
It’s the universe folks!
Leigh
Off topic, long-winded nerd discussions drove me away from patrick.net. I propose stick to housing and the economy.
Bits bucket is for off topic discussion. If you don’t want to read it, go elsewhere on the blog.
I find the taupe bar helpful in these situations. Just scroll until you see it.
;p
The Coming Final Collapse… Here’s a fellow that has an answer or two…
http://www.naturalnews.com/019659.html
And to follow up on the actual genesis of this collapse,
http://news.goldseek.com/GoldSeek/1212944400.php
No politician ever got elected by promising voters their entitlements would be halted, did they? Political popularity is derived from promising voters precisely what the nation cannot afford: Endless entitlements and runaway spending without apparent consequence.
“We might possibly be saved by… eliminating the current income tax system and moving to a national retail sales tax of 33 percent. ”
That’d be a great way to kill the economy.
Or move the economy underground.
Combo:
Don’t cha know Pres Bush is the greatest pres i have ever seen in creating underground jobs, no finer. Why do you think its taken so long for the economy to crack?
There’s a saying: The U.S. economy has created millions of jobs. The problem is these jobs aren’t in the U.S.
“creating underground jobs, ”
No finer job was done then looking the other way as the nation turned onto drugs, ie. heroin, cocaine, MJ and methamphetamine and this occurred under many presidents.
I remember in the late ’90s when the economic genius Bill Clinton (don’t pay attention to that massive tech bubble that skewed all the numbers) was President. There was a cartoon of two guys talking to each other.
First Man (holding newspaper): “This is great. It says here that the economy has added 2 million jobs.”
Second Man (looking depressed): “Yeah, I know. I have three of them.”
I think the underground economy is the most understated problem we have…I know some people (construction related) who do many ten’s of thousands of dollars off the books….IMO, going to some form of consumtion tax and eliminating the income tax may be the only way to save the ship…
How about drastically reducing our overbloated govemment and bringing back our military from all 150+ countries? Nah the idiot politicos wouldn’t like that.
So after I spent years saving money diligently, now they want to tax it again when I spend it? I don’t see that one going over well with the seniors either…
While we can individually save and live responsibly we still are part of the whole. A big contributor to this current crisis is our capitalist idea of all for themselves which results in the mentality of not taking part in the political machinery or doing the math to figure out national realities. The average American looks at “government” as it were some firm operating on it’s own not realizing that we are the government and that we fund it. Unless we take ownership of the funding we are just giving free reign to some snake oil salesmen to do as they please with our national wealth.
Tes-ti-fy! Good post, say what.
“Unless we take ownership of the funding we are just giving free reign to some snake oil salesman to do as they please with our national wealth.”
Unfortunately snake oil salesmen are the only ones willing to pay the price necessary to get elected.
I’d like to see the office of the presidency become a panel of 5-7 people.
An industrialist, an academic, a teacher, a cop, an entrepreneur, a parent, and a retiree…
“Butcher, Baker, Candlestick Maker”
“I’d like to see the office of the presidency become a panel of 5-7 people.”
Hmmm, have you ever been on a jury?
The job is hard enough already…
That too.
And I’m not sharing the presidency with some donut-eating diabetes-channeling cop.
And a parent? With the sprogs that want edu-ma-cation on the taxpayer’s dime?
You’ve gotta be freakin’ jokin’.
“You’ve gotta be freakin’ jokin’”
If you told me when I was 16 that I’d spend my early adult life under a president with deep ties to oil that would start wars with oil-rich nations, I would have been horrified at the prospect. Well, I’m horrifed.
“Hmmm, have you ever been on a jury?”
No.
“And I’m not sharing the presidency with some donut-eating diabetes-channeling cop.”
Lose the stereotype. I know plenty of NYS Troopers and they have more common sense than Bush and could chase you around the woods 50x over.
I’m tired of Americans acting like politicians have something special that the average adult doesn’t. Most adults I know are rantional, earnest and sincere about being good citizens; I’d like to see those people run the country.
“are rantional”
Haha, myself included.
In times of crisis, however, the human tendency hasn’t been to turn to more people for answers - it has been to turn to a single person for answers.
I get the sinking feeling the first half of this life of mine was the easy half.
“I’m tired of Americans acting like politicians have something special that the average adult doesn’t.”
Allow myself to quote myself.
I wouldn’t mind some of the posters here being president: Ben, Palmetto, Dimedropped, TxChick, DinOr, Randy H or HARM and from patrick.
Sorry NYCityBoy, you and I don’t qualify. You know we’d be using unmarked cop cars to transport our friends, booze and “lady friends.”
A big contributor to this current crisis is our capitalist idea of all for themselves which results in the mentality of not taking part in the political machinery or doing the math to figure out national realities.
Capitalism is a form of economy. It does not include any “idea of all for themselves.” Charity between humans and form of economy are hardly related.
Good. I hate responsibility.
In the Athenian government, many magistrates and the 500-person Council were chosen (annually?) by lot from among the eligible citizens. Council members were limited to two terms. The Council was responsible for day-to-day business. Laws were voted by the Assembly - in effect, a town meeting of which every citizen was a member. There was a 1-day term limit for the President of the Council (chosen by lot), and also, of course ostracism, where each year one person was voted to be expelled from the country for 10 years.
Hillary may have gotten 18 million votes in the primaries, but I’ll bet she’d win in a landslide at ostracism time!
“We might possibly be saved by… eliminating the current income tax system and moving to a national retail sales tax of 33 percent. ”
“That’d be a great way to kill the economy.”
Um… only if you believe that spending, not saving (capital accumulation), is what drives the economy.
Stupid broken Keynesian economics.
Do you really believe that spending somehow magically spurs the growth of the economy?
The opposite view is that resources are limited, consuming destroys or degrades said resources, and savings / capital accumulation are the only way to increase real economic output over the long term.
Which view do you hold?
If you believe the latter, a sales tax would be far better than an income tax (since it would encourage saving & capital formation).
I started to respond to that point…
One of the great tricks of modern politics is the idea that GDP (driven primarily by spending) is the great measure of our economy.
“Which view do you hold?”
Sorry, I don’t understand issue as well as you. My initial thought was, “if sales tax were 33%, I wouldn’t buy shit. I’d make it myself or do without.”
I see your point now.
Do you really believe that spending somehow magically spurs the growth of the economy?
The opposite view is that resources are limited, consuming destroys or degrades said resources, and savings / capital accumulation are the only way to increase real economic output over the long term.
——————————–
IMO, production and consumption are the basis of an economy.
Exactly how does saving, alone, spur growth? How do you define “growth”?
“That’d be a great way to kill the economy.”
It would be a great way to get me signed up for plumbing and carpentry classes.
Which is easier to avoid?
1) Income Tax
2) Sales Tax
Your answer will determine what is a greater incentive towards an underground economy.
What we have now is not a democracy, it’s a mobocracy. To restore some kind of sanity and accountability to our political process, the only people who should be allowed to vote are people who are citizens of substance, i.e. those who pay more into the system in taxes than they take out in benefits. Poof! There would go the AARP stranglehold on the political process. Poof! No more social parasites voting in the corrupt kleptocratic New Orleans-style politicos pandering to entitlement blocs.
How about all those people who paid “in” more in taxes for years; built the communities and their infrastructure, paid for bonds to build parks and libraries and and schools and services that new-comers take for granted, all with the understanding that they would get a portion of it back when they retired and became social parasites? How about them? Do THEY get a vote now that they’re “not contributing?” Stupid old volunteer teachers, community watch, tree-planters, hospital readers. How DARE they think they should have a say in our society.
SOMEBODY had to pay for your education, Sammy. I’m just guessing that somewhere along the line you rode your bicycle on a city street, attended a concert, used a public drinking fountain, visited a national park, disembarked from an airport, were taken to an emergency room, traveled an interstate, maybe even attended a public school. Where do you think they came from? Your parents and grandparents, those useless bloodsuckers, maybe had a hand in building and paying for them with THEIR (disproportionate,) taxes? Ya think?
Agree with you there, ahansen.
BTW, glad you guys had fun in Pasadena!
We were discussing (in SD) having a get-together in Las Vegas sometime in the future for all HBBers.
It’s a good time to buy the stock market! Ha!
Dow Industrial trailing P/E 82
Russell 2000 trailing P/E 78
These are real 12 month trailing numbers not forward 12 month estimates.
http://online.wsj.com/mdc/public/page/2_3021-peyield.html?mod=mdc_h_usshl
Get a load of this; the dividends paid by the DJIA companies to their stockholders was $317.88, while earnings were only $149.16! Ha!
Corporate earnings must be near the bottom if PEs are that high
When the Dow trailing P/E is under 10, stocks are cheap.
When the DOW trailing P/E is over 20, stocks are expensive.
A higher P/E ratio means that investors are paying more for each unit of income.
http://en.wikipedia.org/wiki/P/e
Sorry you missed my sarcasm…
Corporate earnings must be near the bottom if PEs are that high
Its the financial components of the Dow that are dragging average earnings low and P/E high. If you factor those out the average Dow P/E is in the teens.
And inflation is only 4% if you leave out food and fuel!
http://www.shadowstats.com/
In the Natural News piece:
“These radical reforms are necessary because the future gap between what the government owes and what it stands to receive in revenues is already monstrously large, and it’s growing by the minute. This gap, called the Gokhale and Smetters measure, currently stands at an astonishing $65.9 trillion. … As Kotlikoff explains, “This figure is more than five times U.S. GDP and almost twice the size of national wealth.”
I would like to see Prof. Kotlikoff’s definition of “the national wealth.” Does it include the salable value of all government-held land? The mineral rights for all such land? While I don’t mean to diminish his concern about where the economy is headed, once a person uses specifics on one side of the equation ($65.9T liability), I think he should use specifics on the other, too (accurate definition of assets).
It’s Our Fault… From Russia With Love… It’s always our fault, I thought everyone knew that.
http://www.reuters.com/article/newsOne/idUSL0749277620080607
It’s always our fault. I was also reading this morning about the beef riots in South Korea. They don’t want our beef. That’s fine with me. I’m with Ron Paul, just shut down every freakin’ military base we’ve got all over the world and shut off every dime of foreign aid we’re giving anywhere. That, by the way, will save an awful lot of money. Funny nobody ever mentions these measures.
Anyway, the global sharks are smelling blood in the water and are circling.
I agree, you don’t want us fine…
I see alot of jobs returning back to the USA as all our “cheap” outsourcing has built up economies around the world..This great middleclass that we are creating in such countries as India(reading last night that their middleclass is going to be larger than the entire poplulation of the United States) are going to become just as demanding for more money as we are…
It’s not going to be cheap anywhere anymore…
Well, funny thing is that most Koreans do want the US out of their country. And the local media there are always quick to whip up anti-American sentiment whenever an American soldier commits a crime against a Korean citizen. They’ll also run stories on the appraised value of the land that the our giant bases sit on and again this creates a huge amount of resentment among Koreans b/c they feel like we’re free loaders occupying all this land that could be better spent on building more housing or parks for Koreans.
Anyways, it seems to me that it’s the U.S. military that wants us to maintain a presence over there more than anybody else.
It’s the South Korean, Japanese, and Taiwanese govt’s that do. They want boots on the ground to discourage the NK and give China second thoughts about military adventures in the Taiwan Straits (the NK are Chinese proxies anyway).
However, we’ve been busy moving troops out of Okinawa and Korea for a while now. We’ll probably end up with symbolic “speed bump” troop strengths in Korea by the end of the decade. It’s time the South Koreans’s man up and take over their own defense anyway.
I believe on Washington’s part, the continued U.S. troop presence is not for any real strategic reason, but to discourage the S. Koreans and the Taiwanese from building their own nukes (which they could easily do). Japan also has some the world’s largest stocks of plutonium and could assemble a nuke in record speeds - very well may too in the coming years.
The ROK army is a very capable army. I believe the would kick the shit out of the KPA. Thats not to say Seoul would be standing, but South Korea would win a north on south war.
Right, DPRK suffers from severe shortages of food and fuel and it appears as though North Koreans are slowly starting to stand up to their corrupt leadership, so it’s very unlikely the North will ever launch an attach against the South.
Agreed, but they will try to use their nuke capability to blackmail Seoul for commodities. They’ll probably try it with China too. “Look! We’re CRAZY!!!! Give us stuff so we don’t get any CRAZIER!” The Chinese are going to have to dump the NK sooner then later, they just don’t want the prospect of a failed country on their border. Same with the SK’s. It’s better for the place to fester as a whole than break up and turn into a whole bunch of nasty little sores that have to be dealt with.
FWIW, From Wikipedia - “Military of South Korea”:
Military age Mandatory 20 to 30 years of age for male, wartime conscription 18-49 years of age
Conscription 24-28 months depending on the branch
Available for military service 12,483,677 (2005 est.), age 15–49
Fit for military service 10,115,817 (2005 est.), age 15–49
Reaching military age annually 344,943 (2005 est.)
Active personnel 687,000 (ranked 6th)
Reserve personnel 4,500,000
Deployed personnel 2,500
and from this link:
http://www.military.com/features/0,15240,166253,00.html
“US, South Korea Agree to Pause Drawdown
Stars and Stripes | Ashley Rowland and Hwang Hae-rym | April 22, 2008
SEOUL — The United States will pause the drawdown of its troops in South Korea, military officials from both countries said Monday.
“President Bush and new South Korean president Lee Myung-bak agreed to the pause during their Camp David visit Friday and Saturday.
“It was the first meeting between the two leaders, and several political experts in Seoul see the agreement as a signal of improved relations between the two countries under Lee’s leadership.
“Under the pause, the U.S. will maintain its current level of about 28,000 troops “for the foreseeable future,” U.S. Forces Korea spokesman Col. Franklin Childress said Monday. That number was scheduled to drop to 25,000 by the end of the year, when the drawdown was scheduled to end.
“The U.S. and South Korea agreed to the drawdown in 2004, when the U.S. had 38,500 troops stationed in South Korea.”
…
“Under an agreement between the two countries, the U.S. pays to bring its soldiers to South Korea and for their living expenses. South Korea pays about 41 percent of USFK’s upkeep, officials said last month.”
You have an exaggerated opinion of the amount of foreign aid that the US is doling out. It is peanuts compared to the US economy, and IMHO in most cases a very good investment for various reasons (e.g. fighting pests & diseases that could eventually attack US crops and people). Don’t also forget that the rest of the world, including some people who are too poor to afford this, is subsiding Americans and their lifestyles.
I am also a Ron Paul supporter, but the US cannot return to isolationism.
Ok, here’s a pretty radical idea, but one that I have heard a few times that might have some merit.
Return to more isolationist policies, shut down all aid to all countries where it’s not absolutely required (Africa comes to mind, where 1 dollar of medicine can save 100’s of people). And, on top of that, disband all the military forces. Send all these people home, stop all the spending on troops/ships/planes/etc.
Make it known to the world that the US’s only defense is ICBMs (intercontinental nuclear missiles) and that is how we will respond to any attacks upon our sovereign soil (like 9/11).
I think one of the biggest problems is that the religious crazies that now have us targeted know we will not respond “gloves off”. Tell me, do you think that 9/11 would have happened if the leaders knew that a few hours after the attack they would all be dead, and that their entire nation would be a smoking hole in the earth? I think it would be more of a deterrent then our standing military, and FAR cheaper as well. Of course, undoubtedly, if we did move towards “no military, nuclear only” policy we would have to nuke someone to prove that we have the will to do it. After that, I doubt we would ever have any problems again. Ever since we nuked Japan, no first world nation has EVER attacked us again. Had we nuked Vietnam (imho, no offense intended to anyone), none of the wars following would have occurred.
I realize that these weapons are horrible; which, in a way, is exactly my point. These weapons are so horrible and destructive that it’s absolutely insane to attack countries that will use them. The world knows we won’t do it, which is why we continue to suffer attacks.
>>Tell me, do you think that 9/11 would have happened if the leaders knew that a few hours after the attack they would all be dead, and that their entire nation would be a smoking hole in the earth?
Seriously, have you been living in a hole for the past few years?
1. Define “they”… who is it you are talking about? The guys who did this, or their financier, or the scapegoat that you are going after now? The guys who did this are dead in the same inferno they created. The scapegoat is smouldering, for no fault of its. The financier is still free, and every now and then shows up on youtube.
2. “their entire nation”… which one? The one the financieris from (nevermind he doesn’t live there) or the one he is hiding in… if the latter, which part of that country will you nuke? don’t forget, you still haven’t found him
3. “smoking hole on earth”… what do you think happens to smoke? you know, it blows over, maybe even to your corner of the world. and it’s radioactive.
You are insane to suggest this. Nuclear armed countries have been attacked in the past (e.g. Islas Malvinas) and will continue to be attacked. The cold war era was one of proxy wars - don’t forget your history. Let me give you one more data point - even during WWII, the US mainland wasn’t attacked - that was prior to nuclearization.
Let me take this one step further - it is because of ridiculous positions/beliefs such as yours that everyone out there wants to acquire nuclear weapons.
Terrorists encourage that type of reaction. And Russia will just sit back and watch us nuke others for any attack anywhere? Then I assume it’s ok for them to nuke Chechnya or a European country for a terrorist attack on their soil? So with 9/11 US should have nuked the entire Arabian Peninsula since most of the highjackers were from Saudi Arabia?
What country pulled off 9-11? What leaders would have been frightened by the threat of annihilation?
It’s a new world.. assuming there ever was an advantage in being non-interventionist or isolationist, it’s gone. These days, we must police the world in order to protect our own territory.
If the USA backed out of international security matters, i’d give it a month before about 50 wars broke out.. to think we’d be economically isolated from the mayhem is kinda far fetched, imho.
“Tell me, do you think 9/11 would have happened if the leaders knew that in a few hours after the attack they would all be dead and that their entire nation would be a smoking hole in the earth?”
Which nation would that be? Since most of the terrorists were Saudis maybe that nation should be Saudi Arabia?
My point is 9/11 wasn’t an attack by a nation; it was an attack by a group of terrorists with no specific national affiliation. Because of this there is no defined soverign enemy to respond to.
Which nation would that be?
As Pres Bush/VP Cheney have said many times - IRAQ was responsible for 9/11. That is why we invaded them.
Too bad they didn’t lie and say some one like Tahiti, I would have joined up in a minute to invade them.
You gotta admit that Reagan was pretty crafty in declaring war in Grenada. Plenty of beaches, great weather and only 25 Cubans.
“the US cannot return to isolationism.”
It can, and it must. A little isolationism is very good for the collective soul, it separates out a bad actor like the US is being now, and gives time to reflect, to clean its own house. The US is NOT ready to be a good global citizen, we have way too much to clean up and stabilize here. And while doing so, the poor of the world who are subsidizing American lifestyles can take a breather. When that’s done, we can return to the global stage.
It’s easy for J6P American to ignore the problems in some backwater country in Africa. But let’s take a look at a place like Sudan, where according to U.S. intelligence, Al-Quaida had bases/camps where they were training terrorist. Afghanistan is another example of a dirt poor country that most Americans would just rather ignore, but the truth is these types of failed states in Africa or South West Asia are a much bigger threat to our national security than say China or even Iran.
Seems like the small amounts of aid we provide to these countries to prevent hunger or the spread of AIDS is a small price to pay to keep some of these border-line economic basket case countries from completely falling in to chaos.
Sorry, the genie is out of the bottle. Agreed that it might be a good idea for a little isolationism, but that’s like being a little pregnant. Erect barriers, and the US$ will go into freefall. Despite being wounded, the US is still top dog. Would you willingly hand over the leadership of the world to the EU? Or China?
Many people forget that the US took over the reins from Europe at the end of WWII. That was a period of decolonization - the results of a disastrous experiment Europe unleashed on the rest of the world for 300 years prior. This is the legacy that the US inherited, and like it or not, it’s a big part of the problem that comes from playing the top dog.
>>Afghanistan is another example of a dirt poor country that most Americans would just rather ignore,…
So tell me, why exactly did the US boycott the 1980 Moscow Olympics? Who armed the mujahideen?
Or are you saying that the US isn’t a democracy?
“But let’s take a look at a place like Sudan, where according to U.S. intelligence, Al-Quaida had bases/camps where they were training terrorist. Afghanistan is another example of a dirt poor country that most Americans would just rather ignore, but the truth is these types of failed states in Africa or South West Asia are a much bigger threat to our national security than say China or even Iran.”
We could probably use a housing analogy here. The guy down the street beats his wife and kids, drives too fast through the neighborhood and is a general menace to all around him. You can ignore him and say, “that’s not my problem”. But eventually it becomes your problem. The sad fact is that we have to pay attention to the a–holes in the world because they quickly come back to haunt us if we don’t.
Yep…
But, I think part of what Michael said is true…No more limited wars…Either we are at war or we are not…
“The US cannot return to isolationism.”
Oh yeah? Let the South Koreans pick up the full tab for protecting themselves against their cousins from the north…there is no reason for US troops to be in place as a “speed bump”. Pax Americana is coming to an end…nations which have enjoyed a free ride will have to look to their own resources.
The mantra of “globalization” and “isolationism” are the means by which foreign nations have drained this country of resources.
They are mere political constructs…and they can be deconstructed…as the US returns to its Constitutional roots.
Please read Russ Winter’s blog http://www.wallstreetexaminer.com to understand how things work. South Korea is extensively mentioned, and you may now appreciate their contributions to your life.
Amen, Spike!
North Korea isn’t the real threat to South Korea.. China is. China pulls the strings. South Korea cannot defend itself from China and it would fall in a heartbeat. Japan is another one at risk and continues to exist only because we’re there to protect it.
I understand how a bad economic period makes our thoughts turn to reducing our cost of living, but we gotta be practical about things…
The cold war was certainly expensive, but sticking with it and winning it was worth every penny. How much money are we saving by not being in a cold war against the USSR today?
I think we need a biological weapon disguised as a disease. My guess is that this is where the current arms race is happening. To the victor goes Earth.
Either that or we all hump until the world looks like Tiger Woods.
I believe US is in SK more for its strategic location next to China. And as long as US thinks China remains a threat to Taiwan, Japan, and Philippines or wherever in East Asia, US will remain in SK.
The mindset of the military industrial complex and remove all the lobby interests has to change to have any affect on war policies. As long as there is a profit motive in war, the military industrial complex will keep expanding; Halliburton and Boeing don’t reap profits in peacetime.
I’m totally FOR this option. Particularly, if someone else picks up the cost of all those sprogs.
I don’t understand…We keep troops in SK so China will not attack them or Japan ?? I got a better idea…Bring the troops home, save all the money, let the SK run their own show and make it clear to China that if they attack either country we will Nuke them…No limited Nuke either…We will level the whole fricken place…Mutual distruction is what solved the cold war why not with China ??
How does your idea support the humping till we all look like Tiger Woods?
scdave..
Why not extend mutually assured destruction to domestic law.
We could get rid of all prisons and most cops and courts.. Disobey any law and the penalty is death. The fact that both the perp and the victim are punished is unfortunate, but it’d save a lot of money.
Would this solve the crime problem? Would it work at all? No. Such a system is inhumane, idiotic and would collapse immediately. In the case of China vs USA nukes, one mistake would mean that the few remaining survivors would live in a radioactive world.
—
China is slowly awakening from eons of deep isolationist slumber and is just beginning to learn how to coexist with the rest of us.
I know that popular opinion tends to think the worst of our prospects dealing with them, but things are changing for the better. If we have similar goals, the prospect of mutual benefit through cooperation is far more profitable for everyone and will work better than the threat of annihilation.
I am also a Ron Paul supporter, but the US cannot return to isolationism.
Removing troops and aid isn’t the same as isolationism. Ron Paul (among others) supports free trade with all countries and people. We shouldn’t be “entangled in alliances” around the world, but that’s not the same as isolationist.
Whew, thanks, bluprint.
call it non-intervention but with free trade and cultural exchange.. in other words, work and play and have fun but otherwise mind your own business.
This is fine in theory and I’m all for it.
My problem is doing it unilaterally while there still exist powers in the world which are anxious, willing and fully capable of militarily conquering and absorbing weaker countries.
As it approaches the end, there will be two countries left.. us and them. They will be much larger and stronger than us.
As it approaches the end, there will be two countries left.. us and them. They will be much larger and stronger than us.
And of course the USA needs to fix all this. “We are from the government and we are here to help.”
This is unfounded. It’s true there are occasions in history where governments are empire builders, but those empires consistantly fail in the long run and there is no reason to believe any country could conquer and effectively control the entire world.
Are you proposing we sacrafice decent human relations in exchange for violence because you have watched one too many scifi movies?
You accuse me of sacrificing decent human relations? It is not I who proposes we turn our backs on the weaklings of the world and let the law of the jungle reign.
Maybe my scenario is unrealistic.. maybe the despots of the world will suddenly behave when the world-cop no longer cares what they do?
REmind yourself that you propose isolationism only because we are wealthy, powerful enough to defend ourselves, relatively self-sufficient and can do it with little discomfort …and we’ll save money… totally selfish motives.
hmm.. and my comment was not influenced by science fiction but now that i re-read it, maybe it’s not a bad plot for a short story.
Yensoy - do you agree or disagree that so long as the U.S. government is deficit-spending, we are having to borrow 100% of the money we give in foreign aid? Put another way, if foreign aid went to zero in budget year 2008, would not the amount of required national borrowing decrease by exactly that amount?
I get great personal satisfaction from helping others, whether by effort or money. But I won’t borrow money to give it to someone. While we both seem to support RP (I having been actively involved in his campaign), I cannot imagine that he would endorse borrowing money to give to other countries.
I got into an argument with a young Dutch guy in England back when Reagan sent the new Pershing missles over to Europe. He thought we were just dyin’ to be there. I told him a lot of us would be happy to close our bases and get out, who needs it, and he was shocked. He said they didn’t feel threatened by the Soviet Union and it was all BS.
Fine. I wonder why we do stay? Except that the little base towns flip out when we talk about closing down.
The whole “see the world” part of military recruiting would be less appealing if the only part of the world you had a chance to see was where the shooting is.
Polly - that’s an interesting, but depressing, observation.
Banksters love war or some threat of war. It has been this way for yrs. Creature From Jekyll Island talks extensively about this fact and does so with historical facts.
Iran is the “new threat” per GWB. With American war ships positioned in the Persian Gulf and GWB running out of time, will Israel be the ones to take the gloves off in the middle East in 08? If you think the answer is yes, it’s time to buy oil futures.
I agree….And my first demand would be directed to the Saudi’s…Give us 100% of your oil @ discount and we will continue to protect your a$$…
“How much money are we saving by not being in a cold war against the USSR today?”
We’re not saving a dime. Bush Sr. as head of the CIA armed the mujahadeen to proxy fight the Soviets in Afghanistan, and the Afghan war sufficiently drained Soviet resources that their collapse occurred. Reagan took the credit.
However, the mujahadeen morphed into Al Qaeda and allied groups, and we fell into the same trap…a land war in Afghanistan. Even the Brits in their Imperial heyday,with control of India to the south paid massively for incursions into Afghanistan, and failed to ever control or colonize the place.
We have followed European colonial failures with disastrous failures of our own..the French collapse in Vietnam lead to our entanglement there. Not only military failure, but huge economic costs of lost jobs, and incendiary inflation. And 50,000 plus American dead, many more American casualties, and for what? Now we do business with them.
Iraq is another disaster..if the neocons had not convinced themselves of the easy cost of a cheap, happy war and access to unlimited to oil, we would not be there. I know they don’t like to read, but just seeing the movie, Battle of Algiers, would have given them a clue what awaits a Western power attempting to control a Muslim state.
We can do business with these folks or not…we don’t need to invade them, destroy their country or attempt to physically control or improve them.
..a cheap, happy war and access to unlimited to oil ..
i dunno where you guys get this stuff..
For you, it’s as if 9-11 never happened, as if the Taliban didn’t run and hide in Iraq, as if Iraq didn’t invade Kuwait, as if Sddam didn’t claim to have WMD, as if Clinton didn’t back off and pull them out when Saddam wouldn’t let UN inspectors do their job, and as if we haven’t had several opprtunities to steal all the Mid East oil.
The day the world wants to see what genuine Imperialism is really like, i’d be happy to show them.
You forgot when Iran invaded Iraq and Rumsfeld rushed arms to our allie Saddam to keep him from being driven from power and an Islamic stated created in Iraq.
You forgot when the CIA over thru the democratically elected leader of Iran back in the 1950’s.
You forgot when Oliver North secretly sent arms to our allie Iran in the 1980’s to free hostages.
You forgot when the US Vincennes shot down Iran Air flight 655 in 1988.
That whole region has been nothing short of a cluster f* since oil was discovered there!
Me? I didn’t forget any of those things.. i certainly don’t deny any of it.. (and there’s a lot more that hasn’t been mentioned).
The solution to the problem is simple to the degree that the one solving it is narrow-minded or ignorant… but in reality, nothing about the problem is simple.
The same applies to someone who’s trying to lay blame for the problem.
Huge amounts of oil lying under a 7th Century world… extraction is guaranteed to be troublesome.
Amen Palmetto. I just read “The Revolution” by RP. Great book, easy read. Highly recommended for anyone interested in learning what RP believes in.
Amen. And tell the South Koreans that if they don’t want our beef, we don’t want their Kias and Hyundais. Or their masses of elderly immigrants who are going to be a huge drain on our medicare system, or the mentally ill like the shooter at Virginia Tech.
Wow. I expected better from you Sammy.
Central New York economy seems to be crashing faster than I expected. I went by 3 golf courses yesterday around 4:00 PM. Out of the 3 one is a driving range. There was one person on the driving range. The other 2 golf courses only had 1 player. The weather was perfect. The local green lakes were mobbed with people. The concept of stay-vacation seems to be happening. Traffic is definitely light. Most people still holding up for their wishing price and the local NAR are in denial. We are different here mantra. The silence seemed eerie.
Central New York would’nt even exist if it wasn’t for all the tax money flowing upstate.
Upstate New York reminds me a lot of South Carolina.
It reminds me of Louisiana. Except with more tax money.
Skaneateles is my favorite place in the world.
Local blog discussion has included threads on the number of people that are actively job searching out of state or that are telling others that the tax burden is pushing them out.
Last week: NY added tax on internet sales and now sports the highest cigarette tax in the nation (I almost feel like if the state is going to subsidize health insurance than the cigarette tax is necessary but it does have people buzzing.)
FPSS,
Saw the vodka comment….I like you, but I can now see you’re a bad, bad man.
SUGuy–
You forgot to mention it was 92 and amazingly humid yesterday. Everyone was hiding indoors.
The restaurants in Fayetteville all looked packed at lunch, at dinner my fave restaurant was packed again (probably due to most excellent margueritas), Erie Blvd establishments all had similar overflowing parking lots for dinner, TJ Maxx had lines at the register the 3X I was in there this week, $279/session summer camp sessions almost completely full when I tried to sign up (I can’t commit in April when sign-ups start) Indoor art camp only had 2 sessions not locked out.
Flowers at the local establishment completely sold out since Memorial Day.
Gas at Lyndon Corners Mobil was up to $4.25 but Manlius Mobil only asking $4.09 so why does Lyndon Corners still have so many customers?
Drove through Caz this morning. Hilltop estate overlooking the lake sporting a sold in 3 days sign. Another huge “real” Mansion getting more updates as usual since they bought the place more than a year ago.
You may be on another part of town but in the southeastern burbs what I’m seeing is that this beast will not die.
There is, however, the building inventory and that is how I know it’s coming.
I saw the driving range arond 4:00 PM. But the other courses were empty around 6:30PM. The temperature was not as hot in the evenings. I usually go for a run around green lakes (2.8 Miles of me time). I will keep an eye on the golfing crowed and report back. I however do see less traffic in general on 690, 81 and Erie blvd after rush hours.
One more reason I know there’s pain here: the listings on Craigslist furniture are exploding.
I hope these people aren’t selling solid cherry for gas money. If so what will they do next month?
There are more and more listings that say their offerings were only recently bought. Many don’t realize their wishing prices, like those for house prices, don’t make sense w/burgeoning inventory.
hot as heck here in nyc (4 days of 95 plus temps)
gas at $4.25 for regular
dow in freefall
oil @ $139
monday should be interesting
with the fed out of bullets at this point what can propel
the market going forward?
open houses in 100 degree temps should be packed today
“with the fed out of bullets at this point what can propel
the market going forward?”
Gravity
Just a bit south of you in Philly, but just as hot! Went to a carnival yesterday. Couldn’t bail because my friend and I had already promised our sons we’d take them. $15 all you can ride. On a normal June day, the place would have been PACKED. Instead, no waiting at all for any ride…or game…or food. It was weird. I’ve been going to this carnival all my life (benefits an area hospital) and have never seen it ghost-town like.
Afterwards I went the grocery store where - again - it was dead. I attributed both to the heat. But it still seemed odd.
If carnivals and grocery stores are being avoided, I will guarantee that open houses today will be completely dead.
“hot as heck here in nyc (4 days of 95 plus temps)”
And it is hot as heck here in Florida, which, while not unusual for summer overall, it IS unusual to see 98 degrees in June. This is like August or September weather. Got me to thinking about this whole energy crisis and what Florida would be like with limits on air conditioning. That would sure empty out a lot of the population, without AC, Florida is not viable as a year round place to live, except for those hardy souls who can acclimate. I sure know I couldn’t stand months of relentless heat and humidititty.
99 degrees everyday for a week here in beautiful S. Bama… HUMID too. Take a walk, get a bath as a bonus…
And in SE Utah, everyone’s glad to see it return to spring, even though it should now be more like summer (although it’s starting to warm up). The last couple of month have set record lows.
How record?
Every day I’d see new records of anywhere from 1 or 2 degrees to as much as 5 or 10. This was all over the state, not just SE, and the La Sal Mountains near Moab look like they would look in April, lots of snow still. It’s still chilly at night and I was running the heater last week during the day, cold.
I should add that usually by now you’re wearing as little as possible, it’s so hot. Except bug netting for the gnats and no-see-ums.
Kinda like S. Bama, we’ve been record cold for the winter with a SNOWSTORM in February (it was 6-8 inches) very unusual for the South of the state. Now, I’m risking heat stroke gardening…
We’ve got lots of biting critters too being so close to the river and swamps.
lots of biting critters too ??
Thats what I remember about the south…How fricken big the bugs were..:)
JWhite - triangulating, you must be pretty close to Clanton.
55 degrees and raining here in wonderful Seattle, with no let up in sight. Snow above 4000 feet. At least the moss is happy.
Arkansas has been on the cool side of normal. Highs in the low-mid 90’s mostly, humid as always. When I got married June 13, 1998, it was well over 100. That was about the hottest day of that year…
But June is like that, sometimes it gets hot, sometimes not so bad until July. In contrast, August will be hot if the sun comes up in the east.
Western Montana cooler too, well below average. Still not enough rain for me though. Last July was the hottest and dryest ever and I hope we don’t have another one like that so this weather is fine for now.
Here too. By this time the A/C should be running a lot, but its been mostly quiet.
And here in the CA desert it’s unusually cool. We’re still not in triple digits yet. It was 99 here yesterday, but no humidity.
I hope you had your earmuffs ready.
78-82 here in 95051 for the next ten days
Here 10 miles south of SF, today 77 low tonight 52, next ten days average about 75, winds in the afternoon 10-20 mph. So far no fog on the hills.
i lived near Dade City for 3 years without air conditioning. I was too poor to afford it. It sucked but it is possible to do. I finally moved from florida. Funny thing is after leaving finally started getting better paid jobs and moved up the payscale to where I can afford the airconditioning. GoFlorida!!
Highest prices in the country - Bridgeport CT - I can remember when my Grandfather’s 1920’s era houseboat sank at its moorings in Bridgeport Harbor in the mid 60’s - with him on it… The newspaper story was: “GBW’s houseboat FINALLY sinks” …
http://money.aol.com/news/articles/_a/seaside-city-suffers-nations-priciest/20080604111209990001
“GBW’s houseboat FINALLY sinks”
LOL - that is really funny. I can imagine it — then at least, if not now.
The Fed is now relying on “hope”.
The members of the Federal Open Market Committee seem to be divided over which evil currently presents the greater risk: inflation or recession. The majority, including Bernanke, see continued risks that the downturn will worsen while maintaining hope that inflation is a problem that will fade.
http://www.marketwatch.com/news/story/consumers-battle-recession-inflation/story.aspx?guid=%7BE796CAA9%2D755D%2D42B2%2DBCB5%2D8E85506AF58C%7D&dist=MostReadHome
Inflation has always worked fine as long as the folks who pay society’s bills have incomes that increase accordingly. Of course we know that adjusted incomes have been flat for years. Game over!
Highest gas prices in the country - Bridgeport CT. I can remember when my grandfather’s 1920’s era houseboat sank at its mooring in Bridgeport Harbor in the early 60’s with him on it. The newspaper story read: “GBW’s housebout FINALLY sinks”
http://money.aol.com/news/articles/_a/seaside-city-suffers-nations-priciest/20080604111209990001
Sorry for the double post, the server held the first for so long I thought it got lost…
“GBW’s housebout FINALLY sinks”
And you didn’t tell us the rest of the story in either post…
Heheheh, my granddad (he was a VP at a local engineering firm) had a wreck of a houseboat he had acquired during the Depression. He NEVER put two cents into it and steadfastly refused to have it overhauled (the engine never worked). This went on for years, it was where he went to get away from my grandmother’s nagging and to drink, smoke, and BBQ with his buddies.
Well, everyone in the harbor knew about this boat and when it finally went down (the seams burst), my granddad was on the second deck. He never even bothered to come down and kept doing his thing.
The thing settled in the dock and he would have just left it there if he’d been allowed. Finally, it was pulled out and burned (it was wood) after it sat in a yard for a year or so… He was quite a character, he started as a stock clerk with the company and retired 50 years later as VP. I miss him.
Sounds like my kind of guy.
A man of means, by no means
King of the row…
He was quite an artist too, one of his best friends was Johnny Gruelle of Raggedy Ann fame, they lived close to each other in Silvermine (part of New Canaan and Norwalk CT) where my grandfather maintained his studio.
The original “Raggedy Ann and Andy in the Deep Deep Woods” was dedicated to him. A very unusual guy for the times. He was of heavily mixed ethnic descent, yet he looked like a more fleshed out Douglas Fairbanks, with the same famous profile. He was quite a lady killer at one time.
Dang, JW, I bet you take after him, too…
Thanks for sharing the story, Jwhite!
just renovate and put some high end appliances in your home
it will sell quickly
http://www.nytimes.com/2008/06/08/realestate/08COV.html?_r=1&ref=realestate&oref=slogin
48″ Viking Professional Series Range - Price $7,760.00
Added Value - $3,573,981.07
I could be a Flip That House producer with my ability to pull numbers out of thin air.
BWAHAHAHHAHAHAHHAHHHHHHHHHHHHHH!!!
My wife heard Manhattan is doing (will do) OK because of foreign buyers. Is there an easy way to refute this?
Alot of people are waiting to see how the NYC market is going to fair with Wall Street’s dumping of its finest..
http://www.reuters.com/article/ousiv/idUSN1823695720080605?ref=patrick.net
“While most of the United States has suffered a housing slump over the past two years, home prices in New York’s Manhattan have been largely unscathed, propped up by demand from Wall Street bankers and the island’s limited housing supply.”
Oh god, I’m hungover and have to wake up and see this crap. “LIMITED SUPPLY”? Yes, it is limited to how high they can build. Why do people think we are having these crane collapses? Is it because the Crane Olympics are being held in Manhattan in 2008? No, it’s because they are building and building and building. Just look at my old neighborhood in the Financial District. The amount of building in places like Battery Park City is unreal. What Manhattan can’t do horizontally they do vertically. And the amount of inventory ready to come on is staggering. But that should raise prices. Right?
I keep hearing about these foreigners and their strong currencies that will save Manhattan. I say, “bring those f-ckers on”. Let them get scalped, along with the local buyers. The more the merrier. Do we still believe Europe and Asia come out of this mess unscathed? I don’t. I’m sure the Asians are dying to buy studio apartments on John Street.
Look West, young man. Then look east. Then look north. It is all overpriced from New Jersey to Brooklyn to Westchester to Queens. Plus the boroughs are adding a ton of inventory and I haven’t even mentioned all of that luxury in Jersey City that is coming online.
Patience is the key for this disaster. The impatient will be skinned alive. Thank you for reading and excuse me while I go throw up.
Drink some Hawaian Punch, it has a unique ability to combat hangovers…
Wonder what the limit is for the height of steel frame structures.
Think its the wind load which is the main limit at present. Adding some lateral stabilization between structures, and they can keep building to the sky.
Actually, building height limit is driven by elevators and the space required for the shafts. As the building gets taller more elevators are required to handle the increased traffic, as well as the increased transit times because of the greater vertical travel distances. So, counter-intuitively, building materials are not really the limiting factor. We are seeing some of this effect with the staged elevator systems that feed, say, the first 50 floors and high speed lifts that only operate above that level, with a staging floor/lobby halfway up. Elevator capacity and design is very complex; there is a maximum acceleration/deceleration that is comfortable for people but puts serious limits on capacity. Very deep mine shafts have lifts that operate at very high speeds and accelerations that would not be acceptable to the general public.
Well, sit em down and strap em in then. Bong Bong Bong squish.
Does this mean you’re not having Jack Daniels with your Cheerios this morning?
I’m not even having Cheerios with my Cheerios this morning. I think I might go out and buy a house. This place will do http://newyork.craigslist.org/wch/rfs/708712286.html
Anybody want to loan me some money?
I’ll loan you the money if I can lick your bag.
Why buy that when you can get this for only 590k (300k in a year)??
http://westslope.craigslist.org/rfs/710251218.html
You may want to try hanging out in Chelsea.
I already do.
I checked out that Craigslist link, lost. I can’t say I’ve ever seen an open bathroom like that in the master. Nothing like waking to the sound effects of someone taking their morning….well…I don’t have to go on.
A Wharton graduate quoted:
“‘I also do not want to put money into an investment that might not retain its value,’ he said.”
I didn’t go to Wharton or anything close to it, but in this RE market I’d call that sucker an “asset” at best. Seems to me that “might not retain its value” obviates the word “investment” as the noun of choice in this example.
No.
If you want to live happily
Kudos to the McCain campaign for getting ads on this blog. Maybe the message will eventually sink in.
C’mon, you know that you’re working for Yomama behind the scenes.
Where’s the love, I ask ya?
“Kudos to the McCain campaign for getting ads on this blog.”
Where? I don’t see what you mean.
With a barrel of Oil going up $10.00 a day…he can run has many adds as he wants…Americans will not have “Happy” Republican smiles on their face…when they go cast their: “Thanks for helping me out” & “Yes, please keep our troops defending the poor Saudi’s and the continued expansion of the Island of Dubai”…. votes.
“The Wars” & “The Economy” = Republican strong points… not to mention the overwhelming evidence that only they can be relied upon for being Fiscally “conservative”
McCain is toast unless the GOP steals it again.
I wonder what would happen if you plug in 110 volt toaster to a 220 volt outlet? Does it matter if you use white bread or whole grain wheat or squaw bread?
“She started it!”
“Did not”
“Did so”
“Did not”
“Did so”
……….Huge slap with a 20# trout…..thud…(body slams to the floor)
“dazed moaning”………..”I’m telling Mom”
Yelling: “Beeeeeeeeeeeeeeeeeeeeennnnnnnnnnnnnnnnn!”
Clearly benefits will have to be adjusted to meet the fiscal realities. The problem is not so much with direct payments via social security as with inefficiencies due to third party payments in medicare, etc. Phase these out and transition to single payer.
Clearly?
You’ve never actually interacted with a politician, have you, my lad?
How can you list a place for $769,000 and not put up a single photo?
http://newyork.craigslist.org/wch/rfs/711690850.html
It’s free? and it’s easy?
They had to hock the digital camera!
What would this architecture be called?
http://newyork.craigslist.org/brk/rfs/712073807.html
That looks like a double-bagger.
le maison de la casa
Looks like our favorite local politician can’t pay for her houses or
her (probably HELOC’d) fancy car ……………..
http://www.presstelegram.com/news/ci_9508907
She’s kind of an analog for the American consumer isn’t she. “We get the government we deserve”.
Nah, she’s digital.
Poor dear, she’s just so busy doing the people’s business to take care of her own…
What a friggin ditz.
Who regulates the regulators of the regulators? Proly some more tax revenues will do it. lol
Incidentally, the car thing should represent taxable income if she was using it for personal use.
How can this smug bitch show her face in public let alone continue in politics? What a f’n LOSER!
I missed yesterday’s thread on what the homes in the future will look like - would you all mind redoing it?
(I know, I know, it’s below.)
Here in Moab, Utah, there seem to be a growing number of vans down by the river, local worker bees. I’ve rarely seen so many tourists this time of year and lots of foreigners. One of the business people told me they’re having to book rooms for tourists clear over in the two nearest towns, both an hour away.
As I was having a conversation with some guys from Beijing yesterday, a weird thought crossed my mind: this fellow could be my neighbor one of these days, buying real estate here that Americans can no longer afford - with American money that we stupidly sent for crap that’s probably now in the landfill.
Ha! Mormonism meets Maoism? Isn’t globalization just great?
mgnyc, you must really hate your wife if you weren’t willing to buy her one of these.
http://newyork.craigslist.org/que/rfs/712086405.html
I hate his wife too. Wait!!!
1200 sq. ft? LIC? 845K?
BWAHAHHAHAHAHHAHAHHHHHHHHHHHHH!!!
Wow, and it comes with an elevator!!!!!!!!!!
Normally, that would’ve been extra but these are difficult troubled times.
I thought this said $225,000.00. That seemed like a pretty good deal.
http://newyork.craigslist.org/jsy/rfs/712094025.html
Should people really be trying to sell a $2 million plus home on Craigslist?
They have nowhere else to turn. Surely the unwashed masses who list their used cars and whatnot on Craigslist will buy their houses, since everyone else is maxxed out.
I don’t think the unwashed masses are looking for cars and houses on craigslist.
What they’re lookin’ for is mostly free.
no, I said selling, not buying…
the unwashed masses can’t even afford to buy soap these days.
Of course, that comes with an hour+ commute into Manhattan to do the job that pays for that patch of grass. And it ain’t even the good grass, I tell ya.
Watchung thinkin’ for? Quick! get your pocket book out.
The Chicago REIC seems to think they’ve made a heckuva special discovery. Seems that sales in and around The Loop and Lincoln Park are holding up while the outer neighborhoods are now slipping - with marginal neighborhoods faring the worst.
I am amazed at this late date, that anyone would believe in the concept of an unassailable RE bastion. This pattern, declines working inwards towards the center, has already played out across the country yet we still have plenty of true believers who think it will be different here.
We’ll see. They say some 10k new condos will come online near the CDB soon, meanwhile I get to watch in real time as the bust marches along the very path we all knew it would. Although, admittedly, after reading about this happening in such far flung places as SW FL and SoCal - it is kinda creepy to see it happen to places I travel through everyday.
“I am amazed at this late date, that anyone would believe in the concept of an unassailable RE bastion.”
You’ve never been to Manhattan. Have you? Stop by and we’ll talk. I’ll provide the alcohol. You are going to need it.
Having lived in Chicago for 8 years, the idea of it being an unassailable RE bastion is giggle-worthy.
Even levelin’ two city blocks and building skyscrapers each year will provide for all the “growth” there’s ever going to be.
How often do you think this going to happen over the next couple of years? Going Office (not postal)
http://www.breitbart.tv/html/108653.html
all I can say is “WOW”.
There are a few hot tempered guy at my office too. Got to keep my guards up.
Damn, it feels good to be a gangsta…
Fo’ shizzle, y’all.
Holy crap! I didn’t know I was being filmed.
And I would consider the remaining guys in that room “wimps”…A couple of those guys could have easily hog tied that guy until some security could arrive…
I was thinking the same thing scdave. Although these days the guy that went off could probably turn around and sue anyone that intervened if he got hurt.
I was also thinking that when too many rats are overcrowded in a small space you see the same result. Why would anyone think people would be different. That work environment was pretty pathetic.
Yesterday someone on a different thread or blog made an interesting observation about this video: when the guy picks up the monitors, the don’t seem to be attached to anything - there are no cords that normally would be yanking desktops out or at least resisting his pull and dangling afterward. Other than that oddity, it doesn’t look staged.
If you check out the “second angle” some people linked in the comments, you’ll see he’s getting tasered at the end (it has audio, filmed by the guy with the camera phone you see coming in and out of the door on the upper right corner when looking at the b&W/offical video).
Doesn’t look fake to me. Wow!
Well I heard that the realtors in san diego are getting double boob jobs because it worked so well the first time. Bigger boobs equals bigger house sales. I hope they pop.
At least they should help them in their next career of scewing people………
Housing bubble or boobs?
If the latter, I want to be around to see it. Or at least, see it on youtube.
So nice to put a lovely face to those pithy posts
Consumers battle inflation AND recession (”we play BOTH kinds of music, country AND western”…)
http://www.marketwatch.com/news/story/economic-preview-consumers-battle-recession/story.aspx?guid=%7BE796CAA9%2D755D%2D42B2%2DBCB5%2D8E85506AF58C%7D&dist=hplatest
It seems to me Mr. Bernanke is a brilliant economist well versed in studies of the great depression, it also seems he would be well served to take a science course and learn about Newton`s law every action has an equal and opposite reaction. By bailing out Wall Street and the big banks, trading their bad mortgage paper for future tax payer dollars in hopes they would lend, all he has done is created a commodity bubble as they took our dollars and did what they do best, lever and speculate. Meanwhile they try to hold realestate at artificially high prices while groceries and gas sky rocket. To me it looks like a hefty bag with too much water that is ready to burst and the Fed look like soldiers at Custard`s last stand,.
Exactly. Bernanke studied the Great Depression, and ended up learning nothing about it. Any sane person would study the topic and conclude that the only way to fix a Great Depression style event is to do everything possible to avoid it in the first place.
Everything else is destined to fail. Bernanke is an educated fool.
Is the crisis
over
yet?
(Perhaps not, considering the lead Finance & Economics articles in the latest edition of The Economist.)
Just to clarify: Credit crisis hasn’t gone away
By Joe Bel Bruno
ASSOCIATED PRESS
June 8, 2008
NEW YORK – The chief executives at the world’s biggest financial institutions might have been a bit too optimistic by declaring that we may be nearing the end of the global credit crisis.
Morgan Stanley’s John Mack said in April that, in a baseball analogy, the crisis had reached its eighth inning or “maybe top of the ninth.” Goldman Sachs’ Lloyd Blankfein compared it to football’s “third or fourth quarter.” Richard Fuld at Lehman Brothers and Merrill Lynch’s John Thain also were more upbeat about the future.
Just as Wall Street started to look safer for investors, another wave of anxiety about the financial industry, inflation and the economy dragged down stocks last week.
What is the difference between the current respective roles of Wall Street investment bank CEOs, used home sales people and top economic policy makers in assuring would-be buyers that the waters are calm, and there has never been a time to buy assets (whether corporate stocks or real estate)? If there is a substantive difference, then I am missing it.
Comment to Economist article on investment banking woes:
“roshanis wrote:
June 05, 2008 15:51
One idea to increase ROI for Investment banks..
1. Reduce Bonuses by 50%
2. Move out of Manhattan
3. Reduce lobbying money by 50%”
PB,
Do you ever feel like you are talking to yourself?
No. Perhaps I am putting my hubris on display by saying this, but I always assume that whatever I find fascinating and peculiar about the economic situation will grab at least a few readers here.
I always enjoy your posts, PB!
“Today, one in three American homeowners owns their house outright.” (from yesterday’s Privateer-605, but a widely quoted figure).
________________________________________________________
Look to your right, look to your left, look in the mirror - is one a homeowner without a mortgage, HELOC, etc? I find this ’statistic’ very hard to believe (although I am one of those folks).
12 houses in my court…All are free and clear except one
wow! all retired too?
I believe the number. My guess is that the owners of those houses have, on average, lived in them for a very long time. Of the rest, most probably are retirees. Wonder if the number includes mobile homes.
What does this news portend for the $1m+ housing market segment in San Diego?
Compensation alteration
Progress made on better linking executive pay and company performance
By Mike Freeman
STAFF WRITER
June 8, 2008
…
About one-third of CEOs of local, publicly traded companies took pay cuts last year, at least for salary and bonus. They include Susan Nowakowski of AMN Healthcare, who saw her pay fall from $1.15 million to $944,156, an 18 percent decline. The mobile-nursing company’s shares were down 36 percent for the year.
CEO Mark Hoffman of clothing retailer Charlotte Russe saw a 37 percent decline in salary and bonus. The company’s stock sank 49 percent for its fiscal year, which ends in September.
“Many industries had very challenging corporate financial results last year, and now that directors are taking their role as overseers on executive pay much more seriously, they really have no choice but to pay for performance and not pay for lack of performance,” said Peter Hursh, managing director of ECG Advisors, a Los Angeles executive compensation and corporate governance consultant.
Minarik, the Directed Electronics CEO, saw his salary and bonus cut from $864,203 in 2006 to $550,000 last year. That decline didn’t match the fall in Directed stock price for the year, which nose-dived from $10.55 to $1.66.
HOUSING SCENE
LEW SICHELMAN
Holding an open house isn’t a priority for agents anymore
June 8, 2008
WASHINGTON – Home sellers shouldn’t be terribly upset if their agents don’t want to hold weekend open houses. To be fair, open houses usually don’t work, at least not in the way you might think.
I don’t know. Based on some of the houses we traipsed into this week, maybe the occasion of the open house might cause some of the owners to move the peeing cats out before the lookers arrive.
There’s an interesting link in that site that is about one or more electric utilities discouraging agressive use of solar panels:
“There were other problems, including the fact that state law currently bars utility customers from installing more power than they need.
Once all the hurdles came to light, the homeowners association abandoned its solar energy plans. “Although I was received courteously (by SDG&E), the message received was to go away,” Barck said. ”
The article did go on to say that SDG&E is having a change of heart, but it’s a bit late.
Went to a BBQ yesterday and most people there are in some form of construction. Everyone spoke about how bad the economy is. Every sad story was followed with: Yea, this is a really bad economy.
One contractor talked about having to charge for estimates. Gas prices are killing him. Work is slow so he is now going to charge for driving around and giving estimates! One guy had two workers quit. I guess it is better to sit at home, than work for gas money!
Many business owners are giving the “Come to Jesus” speech to their employees. Work more for less. Now is the time the good workers will have a job and others will not.
The theme is: It is all the fault of high gas prices. No one looks any farther. “Give me a beer and can you believe the price of gas.”
I run into lots of small business people and everyone asks: How business holding up? I also scan Craigslist business section. Lots of restaurant equipment along with whole businesses for sale.
My small view of the world from somewhere North of LA.
I remember when this happened in SoCal in the early 90’s. The construction work went off a cliff much like now, and it seemed that everybody either worked in construction or for DoD contractors. I remember lots of guys hustling selling strawberries or cleaning pools. I recall a Jay Leno joke from back then: things are so bad that my pool guy had to fire his pool guy.
I found myself wishing my camera was in the car yesterday when I saw a hand-printed roadside sign for credit-repair services about a mile from home.
Kenneth R. Harney
Don’t pay money upfront for credit-repair services
June 8, 2008
WASHINGTON – Picture this: You’re eager to take advantage of today’s troubled real estate market and buy a foreclosed house at a fire-sale price.
The problem is you don’t have much money for a down payment. And your credit files are scuffed up with late payments.
What you need is a service that can help put it all together for you – linking you into lists of available foreclosures, credit repair, and even low down-payment mortgage financing.
Companies that promise to do at least some of these things – especially to fix your credit – ply their wares aggressively on the Internet. But can they really do what they claim? Based on a recent settlement by the Federal Trade Commission, the only conclusion is: If the deal involves paying money upfront, don’t do it.
How are folks going to be able to afford homes priced at above $729,000 if gasoline continues to spiral towards $5/gallon?
June 8, 2008 2:41 P.M.ET
BULLETIN
Gas burns past $4 a gallon
As average price for gas touches all-time high, fuel price analyst urges quick completion of probe into oil trading.
• Ethanol’s bright future (Barron’s cover story) | Consumers sound off over $5-a-gallon possibility
I really like an article that is linked to this one. It is titled, “Saudi Arabia plans royal treatment for heavy crude.” (Why do writers and editors think cutesy titles are great for serious articles?)
Sorry, Ben - the link is a mile long and I don’t know how to make ‘em the way PB does, so here it is it TinyURL:
http://tinyurl.com/4h7e4m
It is an intelligent summary of Saudi Arabia’s plans to develop significant in-country refining capacity for heavy/sour crude. It touches on the economics of pumping the heavier oils and I wish that part had been developed more.
Economy
‘Marketplace’: Net Worth of U.S. Households Down
Listen Now [3 min 4 sec] add to playlist
Day to Day, June 6, 2008 · The net worth of U.S. households fell in the first quarter, the second straight decline, thanks to the double-whammy of sliding home values and the plunge in stock prices, the Federal Reserve says in a new report.
Marketplace’s Bob Moon talks about the report with Alex Chadwick.
The Wall Street gang seems to have successfully concentrated much of U.S. households’ collective wealth into overvalued MBS and stocks, through the pension system and by convincing the masses that stock and real estate prices always go up. Now I guess it is the Fed’s turn to run the virtual printing press fast enough so that these folks look like they made smart bets through the lens of the rear-view mirror. I suppose it gets a bit tricky to pull this off when there is talk of maintaining a strong dollar policy against a doubting world commodities market which seems to drive oil prices to a record new high every few days or so.
Are will still just in a slowdown, but not a recession?
Economy
8.5 Million Out of Work in May as Jobless Rate Soars
by Frank Langfitt
Palm Beach (FL) - Celebrities delinquent on their tax bills:
http://www.palmbeachpost.com/localnews/content/local_news/epaper/2008/05/17/a2a_josecol_0518.html
If the article is correct, the county “usually” charges only 5% on delinquent taxes. That doesn’t seem like a very smart policy. While it’s the property owners’ right to delay payment in order to keep their money invested elsewhere at a higher return, it screws up the county governments’ ability to gauge their cash flow.
Maybe something is left out - because farther north in central Florida counties, I believe all of them auction off tax certificates at a declining rate of interest, starting with 18% or so. Since the buyer of the certificate cannot predict with certainty when they will get their money back, why would anyone buy them for just a 5% return?
I bought a beautiful Persian (Iranian) rug yesterday from a distressed dealer in Chicago. He is going out of business due to the housing downturn. I commented that we are probably in the 3rd year of a 7 year downslope. He turned a few shades lighter. I told him I could afford to buy nice things in cash because I rent!
He confided that the bank is allowing him off the hook if he can get $0.15 on the dollar for his inventory.
Persian rug dealers are always having “going out of business sales”….
Ha hah. Someone get this guy a teleprompter. And you think he can run the economy?
http://www.youtube.com/watch?v=ZxBX8sz3tO8
but how about this guy? “I opposed the tax cuts before I supported them” mcsame?
http://www.bloomberg.com/apps/news?pid=20601039&sid=a.f5U.rij7vM&refer=home
Yes, a whole lot better than this guy.
http://www.youtube.com/watch?v=kqGWTh_NZ-0
“I wish interest rates were zero.”
“I am absolutely certain that generations from now, we will be able to look back and tell our children that this was the moment when we began to provide care for the sick and good jobs to the jobless; this was the moment when the rise of the oceans began to slow and our planet began to heal”. . .
This absolutely boggles my mind, txchick.
Hey! Give me the good job, the jobless guy can have mine.
Obama sickens me. The fact that he thinks he can make things better by taxing me so I only keep 35 cents of every additional dollar I make while shoveling money on lazy shits who want to get rich quick living on credit confirms that he will ruin America.
Your taxes went up 50% during the bush tenure. Its called dollar devaluation.
Hey! Give me the good job, the jobless guy can have mine.
It is a riot, isn’t it. I guess we only had hospitals and doctors in our imagination.
Something from the Ayn Ran Institute
http://www.aynrand.org/site/News2?page=NewsArticle&id=18729&news_iv_ctrl=1021
…
(full article at link)
We can reduce risk in the financial system
By Timothy Geithner
Published: June 8 2008 23:30 | Last updated: June 8 2008 23:30
Since last summer, we have lived through a severe and complex financial crisis. Why was the financial system so fragile? What can be done to make the system more resilient in the future?
End implicit government-subsidized too-big-to-fail insurance of Megabank Inc’s gambling losses.
Before they go crazy trying to use newfangled innovations to reduce financial risk going forward, how about if the Fed figures out just what went wrong during the Greenspan era to set the stage for the current financial crisis? (Hint: Think of a punchbowl spiked with super-duper-low interest rates coupled with open encouragement for homeowners to tap into their home equity wealth gains.)
Countdown to the close:0min0sec
June 8, 2008 10:23 P.M.ET
BULLETIN
Tokyo, Seoul down sharply
Nikkei drops 2.3%, Kospi sheds 2.5% in wake of U.S. losses. Crude oil drops almost $1 a barrel. Markets in Hong Kong, mainland China, Australia and the Philippines closed for holidays.
Big Shareholders Rebel at AIG
By Liam Pleven and Randall Smith
Word Count: 2,131 | Companies Featured in This Article: American International Group
American International Group Inc.’s embattled chief executive, Martin Sullivan, is now facing mounting dissent from some of his largest shareholders.
Two days before AIG’s May 14 annual meeting, three major shareholders who effectively controlled more than 100 million shares — about 4% of the company’s stock at the time — sent a blistering letter to the company’s board.
REVIEW & OUTLOOK
That Stagflation Show
June 9, 2008
Friday’s market rout in employment, oil, the dollar and stocks was not the end of the world, but it is a warning. The message is that the current Washington policy mix of easy money and Keynesian fiscal “stimulus” is taking us down the road to stagflation.
OPINION
The Weak-Dollar Threat to World Order
By JUDY SHELTON
June 9, 2008
Imagine how Americans would feel if we suddenly realized that our most trusted trade partners have been slowly but inexorably imposing a tariff against U.S. goods since 2002 – a tariff now in excess of 50%.
…
How disillusioning to discover that the leading proponents of open global trade – the ones who insist on a “level playing field” – think nothing of adopting policies that render our products overly expensive for their consumers, even as they proffer their goods around the world at inordinately discounted prices.
Now you know how members of the European Union feel these days.
As former New York Fed economist David King recently observed, the value of the U.S. dollar against the euro has fallen drastically in the last few years. In December 2002, one dollar was equal in value to one euro; today, it requires more than half again as many dollars to equal one euro. For American consumers, that means prices of imported European goods are more than half again higher than they would be had the dollar retained its value relative to the euro.
Well, if they are really as silly as the guy who wrote that, let’s really slap a 50% import duty on them so they know the difference.
Subprime Index Is Overstating Losses, BIS Says
By Joellen Perry
Word Count: 348
FRANKFURT — A key measure of estimating the value of subprime mortgage-backed securities may be overstating potential losses of triple-A securities by more than 60%, according to the Bank for International Settlements, which puts its own estimate of such losses at $73 billion.
More signs the conundrum and the symbiosis are unraveling:
Bonds Sound Diverse Alarms
By Tom Lauricella
Word Count: 1,071
Stock investors looking for good news after Friday’s rout in the U.S. won’t be happy with the message coming from global bond markets.
Economic strength outside the U.S. has been a source of stability for corporate earnings amid the turmoil of the real-estate market collapse and credit crunch. Now, global bond markets, which have been more pessimistic than stock markets, are flashing warning signs about the outlook for both growth and inflation.
Stocks Signal That Crisis Isn’t Over
Friday’s stock-market slide was the strongest sign yet that stock investors are picking up on something credit markets have been warning about recently: The financial crisis isn’t over.
Second-Guessing the Fed
Thursday, Jun. 05, 2008 By JUSTIN FOX
Bailout Backlash
By Curt Nickisch
BOSTON, Mass. - June 09, 2008 - Leaders in the US Senate hope to pass a bill this month designed to stave off home foreclosures, which are now at their highest nationally since 1979.
The proposal has strong support from Democrats John Kerry and Edward Kennedy, and many Republicans. But it’s getting some surprise resistance from Massachusetts renters… and even homeowners. WBUR’s Curt Nickisch reports.
Jun 4, 2008
THE BEAR’S LAIR
Exploding innovations
By Martin Hutchinson
Eleven of the world’s largest investment banks have announced the creation of a clearing house, to open in September, for the US$62.3 trillion credit derivatives market. Since it has been patently obvious for several years that such an innovation was essential for the stability of the market, the news is welcome, if a little belated. However $62.3 trillion is real money, so the question arises: how did something so dangerous grow so big before efforts were made to control its risks?
Predicted losses at Lehman were only larger than expected by slightly over 500 pct.
Lehman Set To Raise $5 Billion Amid Losses
By SUSANNE CRAIG
June 9, 2008; Page C1
Lehman Brothers Holdings Inc. is close to raising more than $5 billion of fresh capital from an array of investors including the New Jersey Division of Investment, according to a person familiar with the matter.
The move comes as the firm is set to report a second-quarter loss of more than $2 billion, this person said. Until recently, most analysts who follow Lehman have been predicting a loss of about $300 million.
“Actual losses were above predicted by slightly over 500 pct” (time to get some sleep!)