Bits Bucket For June 18, 2008
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Why The Sun Rises…
“I am driven to distraction by the constant reference to inflation by people who are talking about an increase in prices. How is it possible that the implausible falsehood that inflation is caused by rising prices has gained such traction”?
This is by no means just a minor semantic point. The idea that inflation is caused by rising prices is a disinformation deliberately put out by governments around the world. It is disseminated for a very good reason. If it can be made to be accepted as a truth then nothing about inflation can thereafter make any sense. If people really understood what caused the rising prices that cause recessions and worse, then politicians and bankers would be swinging from lamp-posts. When people refer to inflation as meaning rising prices, then they are either ignorant or they are attempting disinformation. Either way they are not worth listening to or reading.
http://www.321gold.com/editorials/mathid/mathid061708.html
Thanks, nice piece.
No, they are using “inflation” to mean “price inflation”, just as you are using it to mean “monetary inflation”, and the guy at the gas station uses it to mean “how much air is in the tires”.
As to there being some kind of conspiracy to confuse the public as to what is the cause and what is the effect, Paul Volcker is still alive and well and talking, and also an adviser to Barrack Obama.
No, they are using “inflation” to mean “price inflation”, just as you are using it to mean “monetary inflation”, and the guy at the gas station uses it to mean “how much air is in the tires
There actually is a “conspiracy” of sorts:
1913 Websters: Undue expansion or increase, from overissue; — said of currency. [U.S.]
1970 Websters: 2. an increase in the amount of money in circulation, resulting in a relatively sharp and sudden fall in its value and rise in prices
2008 Websters: 2: a continuing rise in the general price level usually attributed to an increase in the volume of money and credit relative to available goods and services
Notice the flip flop…..the RESULT (price increase) is now the meaning….and the monetary supply is the CAUSE.
1913: Increase money supply
1970: Increase money supply
2008: Increase in prices
I’m kind of curious to see how many of Obama’s stated positions are politically necessary to get party and base support to get elected, and how many he truly believes. Reading between the lines of his public statements on two examples - NAFTA and the federal gas tax - he sounds a lot more reasonable than at other times. But the message on NAFTA is subtle, because he’d lose all the rust belt states by a huge margin if he said out loud what he really thought about NAFTA. Of course, we won’t find out what his true colors are until after he is in office.
The idea that inflation is caused by rising prices is a disinformation deliberately put out by governments around the world.
Inflation is rising prices, according to one of the definitions of inflation, not caused by it. There are other inflations - monetary, for instance. It’s pointless to argue which one is inflation, because they both are, just different kinds. I care about the price inflation, personally.
*** Sifting through countless replies of goldbugs on how I don’t understand what “true money” is ensues *** \/ \/ \/
“Price inflation” is nealy meaningless if only because it doesn’t include uncounted missing price decreases. That is, prices that would have decreased if not for actual inflation (increase of the money supply).
Prices can go up or down for lots of reasons. There can be simultaneous forces (upward force and downward force) at different magnitudes. Paying attention only to prices is a bit like watching water come through a dam without caring about the reason why. It’s not really good for much.
Airline Loses…”I don’t think anybody predicted this extraordinary jump in prices,” said May, whose group represents the biggest U.S. carriers.
How is it that industry after industry didn’t see ‘it’ coming? What, did nobody notice billions of Asians and Indians trading in their Oxes and bicycle’s for combustion driven vehicles? That’s just one part of the equation.
http://www.latimes.com/business/la-fi-airlines18-2008jun18,0,4661087.story
another example of how HOA just plain sucks. Leave the old man alone.
http://www.sun-sentinel.com/news/local/broward/sfl-flbcondorule0617sbjun17,0,5738781.story
From the linked article:
If you think these rules are silly or extreme, consider a deed-restricted development in Jasper County, near Hilton Head, S.C. In 1998 a developer bought 1,700 acres, a property called Delta Plantation, to subdivide for homes. The official covenants, as recorded in the county auditor’s office, say the property may never be sold or leased “to any person or entity that may be described as being part of the Yankee race.”
Snowbirds Need Not Apply
RE: Snowbirds need not apply.
For all the “Southern crackers” courtesy of James Knustler
June 9, 2008
A Harsh Season
The banking “industry” slept like a dog through the climax of the political primary season. Meanwhile, the banks sucked in scores of billions in cheap loans from the Federal Reserve, using bundles of devalued-to-worthless “innovative” securities as collateral. This dodge has worked for about three months, allowing them to pay their employees and cover their electric bills, and is now collapsing because American society can’t maintain the flow of repayment on current debts and can’t take on any additional debt – meaning both the regular “churn” of revenue flowing to the banks is impaired at the same time that fees for originating new loans cannot be generated. Uh Oh.
Out there in the cul-de-sacs and the strip malls, people are months behind in their mortgage payments, maxed out on their plastic, handing over their car keys to the lien-holders, and feeding their kids Spam filets. Truckers get paid less for their loads than the cost of transporting the load. The airlines have financial cancer and will be dead in eighteen months. Container ship costs are heading out-of-sight. Municipalities are going broke. A weekend flood just destroyed part of the Midwest corn crop. And, of course, oil prices took a jagged turn upward last Friday en route to their next stop: $150-a-barrel.
The New York Times reported Monday that rural Americans are being hit hardest by the rise in gasoline prices. Duh. It’s worst, naturally, in the big southern states where wages are low and the distances are vast. There’s a reason why Nascar is the second-biggest religion down there: the automobile rescued southerners from the tyranny of geography. Cheap gas allowed them to build a “new ” economy based mainly on the construction of suburban sprawl. In the process it deified the pickup truck. Guess what? The rural South made a big mistake. The Dukes of Hazard show is now drawing to a close. They are about to take a turn back to being what they were before the Second World War: an agricultural backwater. God knows what will happen to the asteroid belts of “production housing” and big box shopping outside the relatively tiny pre-automobile cores of places like Houston and Atlanta.
The New York Times made a particularly inane point in their lead business section story today
Another reason never to buy anything that has any sort of HOA associated with it.
Another reason never to buy anything that has any sort of HOA associated with it.
I think HOAs are necessary in an inverse relationship to the average acreage of each individual property in a given neighborhood.
In other words, if people are living on acre+ lots and want a few broke-down cars around, who cares? Don’t like looking at junk? Plant some bushes.
On the other hand, if your stick-and-mud shack is 10 feet away from your neighbor’s then even a dead lawnmower next to the lot line is going to be annoying.
I guess I`m different, I like hoa`s. If you have a ever heard those gas R/C boats you would not want to hear it either. I love our HOA, I would not want to see a 30 old boat in someone driveway or an lawn that looks like a goat pasture. I live in a nice hood and I`m glad we have one. My only example working with the HOA, a couple of years ago we had a wrought iron fence installed, I showed they the lay out and they said…. looks good.
Lane
You can do anything you want with your house in Cuba too if the local HOA, er, Committee for the Defense of the Revolution, lets you.
There are lots of places in the US where you can’t park a boat in your driveway or lawn. They have something called a “local government” that passes something called “bylaws”. The difference is that the bylaws are enforced by people who do it for a living, not control freaks with too much time on their hands.
We all live in a HOA to some degree or another…Muni goverment is much more overbearing than PUD HOA’s (see muni codes)…
I`m just stating the other side of the coin. I have seen some stuff that even people with money and a college edumacaton do that blow me away. I also don`t like seeing cars parked all over the place. That is allowed in some places. As far as the boat…. There is a hood near me( I`m in a nice area) and a guy had a 32 fountain “boat” parked in the driveway for 2 years. It made his ford excursion look small. LOL… But yogurt in your defense, I`m sure there are some bad ones.
Lane
Yea and your so called bylaws allow boats and also in most area above ground pools. I want neither.
Lane
not control freaks with too much time on their hands.
Clearly you haven’t met very many police or code enforcement officers.
I don’t know where you are from, but I personally think HOA’s in South Florida are a necessity. I’m sure there are homogenous neighborhoods where a shared culture makes HOA’s unnecessary, but down here in this crazy melting pot rules have to be made and enforced or pandemonium reigns. Do you know what happens to the value of your house when your new neighbor sees nothing wrong with hanging severed goat heads in his carport, or when the predominant house colors become flamingo pink with lime green or purple trim?
They drop to what they ought to be, given where you live?
I guess until you have seen a middle class neighborhood transformed into a slum in less than a decade you will never understand the value of an HOA.
WBBR reported this morning that high rent areas around NYC have seen 25% price declines……. so far.
Most people in the US have lost their negotiating skills and have to wait for the price reduction. Everthing is negotiable, including rent. During the condo conversion craze that was lost, but now that FB’s can’t flip, remember they need your money more than you need that exact rental.
Pigmen running amok. Hardly news to many here, but at least the MSM seems to be waking up and smelling the bullfeces.
Bloomberg.com: Fed’s Bear Stearns Books Look Prime for Cooking
If you ever wanted to design an accounting regime to help a bank cook its books, the Fed’s would be perfect. This doesn’t exactly inspire faith in the U.S. financial system, at a time when a good example might help a lot.
Imagine if there were no rules specifying when a bank must bring an Enron-style special-purpose entity onto its own balance sheet. The Fed’s accounting manual has none. Now picture an accounting system where a bank never had to recognize losses on any securities it holds, as long as it continues holding them. That, too, is the Fed’s policy.
i dunno.. if i owned stock in the Fed i suppose that what’s on or not on their books might matter to me.
And i can’t see where their special status, allowing them extraordianary capacity to help keep BS afloat and preserve some stability in a very troubled financial market, is a bad thing.
RE: Pigmen running amok.
The air raid sirens are sounding!
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/18/cnrbs118.xml
Oh, alright, I’ll pile on with this link aimed at Europe:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/16/bcnecb116.xml
Morgan Stanley warns of ‘catastrophic event’ as ECB fights Federal Reserve
“The point of maximum stress could occur in coming months if the ECB carries out the threat this month by Jean-Claude Trichet to raise rates. It will be worse yet - for Europe - if the Fed backs away from expected tightening. “This could trigger another ‘catastrophic’ event,” warned Morgan Stanley.”
Are we talking “catastrophic” as in:
1) Housing prices, bank stocks, etc. will continue to go down.
2) Some Pig Men won’t be able to buy a second weekend yacht.
3) The true value of all the financial BS floating around might be revealed.
4) Something that might actually negatively effect the common men and women who are already going to have to pay the bill for the excesses of the ruling elite?
Oh my goodness. Thanks for posting that, Mr. Gritty.
Gritty–
I kept getting stuck on this part trying to get the numbers to sink in. “The Fed is on the hook for the rest” was the hardest line to digest probably due to the point that my head kept going numb.
“Under its rescue plan, the Fed next week is scheduled to lend $29 billion to a Delaware limited-liability company that will hold a portfolio of illiquid Bear Stearns assets, which Bear Stearns valued at $30 billion on March 14. To put that in perspective, the Fed’s total capital was $40.4 billion as of June 11. The portfolio consists mainly of mortgage-backed securities and other mortgage-related assets.
JPMorgan Chase & Co., which completed its purchase of Bear Stearns this month, will lend the Delaware entity $1 billion and absorb the first $1 billion of any losses. The Fed is on the hook for the rest. The central bank has hired an outside company, BlackRock Inc., to manage the sale of the assets over the next 10 years. The proceeds will go back to the Fed and then, if anything is left over, to JPMorgan after the Fed is paid.”
“… to manage the sale of the assets over the next ten years.”
Which means for the next ten years I’m going to get cold-called by brokers and seminar promoters offering once-in-a-lifetime opportunities to get filthy rich by buying real estate at great price discounts.
Exactly !!! The bass terds pitch the sh$t on the way up and then pitch it on the way down….
I’m kind of in the same boat, CarrieAnn. It just sounds like the most ridiculous set-up possible. Basically, JPMorgan throws in a billion that they’ll never get back (but probably very well spent assuming they were the counterparty to a bunch of Bear’s bad swaps). Then the Fed takes on $29B of craptacular “assets” that they’ll pawn off at pennies on the dollar over the next decade. It makes my head hurt. At some point, all of the zeroes just become overwhelming.
It’s the managed by BlackRock my stomach turn. My feelings for hedgies and most bank professionals are about how the majority of us feel about realturds.
Same here. The other day I was really enjoying the article about ND oil shale posted, Hunt brothers (all 3) a “blast from the past”, lots of local detail about leasing and operations etc.
I shuddered when the hedge fund / derivatives guy with his belt buckle the size of a saucer swaggered into the article.
From the LATimes, a man who lives on 535. a month in fixed costs, on a boat in Newport Harbor, with plenty of time to play tennis. A cheerful story for the spending-impaired.
http://www.latimes.com/news/local/la-me-singer18-2008jun18,0,1575107.story
Great share.
Key quote from the story: “My possessions made me work harder and stole my time,” Dixon said.
Who pays his greens fees in Newport Beach? Where is his family? I’m not impressed.
That guy must be a Thoreau fan. Right on!
OK–nevermind. Guy sounds a bit twisted.
While I agree with the minimalist approach in most ways you have to be warned against being idle or not working.
This guys is doing nothing most of the time.
Did you actually read this article?
By his own admission, your hero squandered $400,000 on an ill-fated “charitable” venture before he decided that God wanted him to learn about servitude, so he got a job as a waiter.
He of course can’t afford health insurance, so he “relies on God’s healing powers.” Well, God and government financial assistance. Taxpayers paid for his care after he got kidney stones. I guess God was busy.
As someone else noted, who pays the guy’s greens fees on the Newport links?
He’s essentially squatting when he ties his boat to a dock he doesn’t pay for. He recounts for the reporter the time he had his boat padlocked for failure to pay rent.
In short, this “inspiring true-life tale” is about a man who is probably mentally ill and certainly not pulling his own weight in the world. There are plenty of people who choose to make do with little, but who are also productive and mentally sound human beings. Why are newspaper articles never written about them?
A majorly huge crock.
Mooring fees alone are $30+/night. Then there’s maintenance…which on that tub would be awful. And diesel (at $5+/gal) to get in and out of the harbor to moor off-shore every two weeks. Food in Newport is no cheaper than the rest of the country, and to get to a store or food bank you gots to drive. (Although he likely gets meals and drinks at the restaurant where he works.) Greens fees ain’t cheap, nor is the gas to get to the links. And even public courses enforce a modicum of dress code. I’ll bet the folks at Hoag Memorial ER are on a first name basis with this person, as are County Services.
Unreported tips, panhandling, weaseling, and “donations” to his “ministry” likely supplement his SSI checks. Just what Newport Beach loves.
Not to say he’s not clever, but obviously stoopid to keep talking to reporters from the Register, Times et al. I’m betting his gig is about up.
anyone see the abc evening news last night ?
a story on how fb’s took out helocs and paid off their credit cards and in some cases did not pay of their credit cards and continued spending ( now they are victims with70k in cc debt)
what did these turds spend 70k on ?
i remember hearing about this on the hbb 3 years ago talk about late to the party- get with it msm -thanks Ben and all fellow bloggers
take out heloc pay off unsecured debt with it and now lose your home due to interest rate spikes- brilliant
every damn night there is a story about the money crunch and how people are strugling to pay bills and feed their famalies and fill their vehicles -not me i rent
who could have possibly seen this coming????? lmao
thank god i did not fall into the trap and being a bitter renter with
excellent credit and ample savings i feel pretty good right now
i am also working a 2nd job because it is good $$ and very flexible
and the extra $ i save (i save every dime on my 2nd job) is great
have a great day everyone
Don’t they also owe taxes on the HELOC interest, since the money wasn’t used to improve the house? I suppose that only matters if the IRS gets on top of it.
Actually, the tax code was changed a while back to allow an extra tax deduction for HELOC interest up to $100k of principal provided the extra $100k was NOT used to buy or improve your home. The normal interest cap is up to $1M of mortgage principal. The HELOC provision is actually on top of this, so the interest on up to $1.1M of mortgage and HELOC debt can be deducted.
It is somewhat awe-inspiring just how much our tax code incentivizes people to act self-destructively.
I can tell you exactly where the $70k was spent…..saw it first hand Friday night. Went out with a buddy for a couple drinks at the local upscale mall. Parked the old pickup in a sea of BMWs and Mercedes. Walked past the Capital Grill and Cheesecake Factory both packed to the gills, then paid a $10 cover for the great pleasure of spending $6 for a Corona. I watched tons of people parading around in designer clothes acting like mini-millionaires. If this population is representative of society as a whole, the credit lifestyle will go on for eons.
My SIL is in this same situation. She bought in Bothell, WA in ‘03 for around $350K. She has consistently over the last 5 years HELOC’d her self to a debt of $750K. She claims her house is worth a 1 million so its not a problem however the house next door was foreclosed and sold for $400K a few months ago. She has pissed away $400K in 5 years. Cars, vacations, clothes, redecorating (no major house renovations as the house was new when purchased) and other crap. It is only a matter of time before she has to walk away. She will leave with a few suitcases and go back to renting like she did for the 15 years before she bought her dream house.
So looks like she had a once in a lifetime party, and the bank picks up the tab. All in exchange for a less than worthless credit rating.
Hard to find much fault with that.
LMAO. $1M in Bothell!? I have family who lives there. She’s dreaming. While there are some decent places, they nowhere near approach that figure. Of course, it’d be hard to find an area where the Kool-Aid is more powerful than Washington. The endless blathering of “we’re special” by the media as well as all the other shills has inflicted brain damage. This place needs a financial enema, and it’s coming.
My Mom owns a townhome in Bothell that she bought back in ‘98. She’s close to retirement (and planning to move back to San Diego), so I’ve been beating the drum of “sell it now, rent until you’re done up there” for some time. She’ll put it on the market next week. She’s got plenty of equity as she didn’t HELOC. Her retirement is pretty well funded even without SS. Still, it would be nice for her to be able to bank a spare $100k or so. I’m curious as to what she’ll list it for. i suggested tyat “aggressive” was preferable to “greedy.”
As an aside, my brother and I have joked for years that all of the property in Bothell would see an immediate and substantial increase in value if they were ever to decide to change the town name.
“what did these turds spend 70k on ?”
Easy. How about going out for sushi or [insert favorite cuisine] five nights per week? In two years–there you are.
Or do like my ex did. She drove us to near BK in $35 increments. Lots and lots of increments.
I made an offer on an short sale in Kearneysville, WV. The house was at 299K. I started out at 255K and then the realtor told me they had another offer. So, I did an escalation clause and raised my offer upto 299K. The bank still hasn’t responded and I saw the listing price raised to 335K now. When I had my offer for 255K and the house should be under contract, why was the realtor excepting more offers. Secondly, how could they raise the price now?
Easily. You increased the price you’d be willing to pay, so they’re seeing dollar signs.
they know they have a live one.
“they know they have a live one.”
Yeah. I’m thinking this a bad troll effort or we have a bonafide knife catcher posting.
Look Martinsburg…… the realtard has you on multiple strings and you’ve clearly lost your mind over one house in how many millions of houses? If you really think you *need* this shack then you better get ahold of some logic, testicles and maturity. Your next communication to the asswipe realtor should go something like this…. “My offer stands at 255k. If you elect not to accept it and counter, my counter will be the original offer less 10%.” And let it sit. If they don’t bite, WALK. I say walk anyways as 255k in WV(I don’t care if the house is finished in gold leaf) is absurd.
that was funny Exeter - thx.
I bought a short sale house from Bear Stearns 3 months ago. Offer sat for 7 weeks while a “full price” offer came and went. The day before trustee’s sale, Bear took my offer and postponed the NOT sale for 17 days. Closed in 10. Rented at $24,000/year on $287,5000 purchase.
I NEVER put an offer on a house until I have 3 or more houses I like in my sites. This makes it very easy to stand pat or move on….
Nice job, Jingle!
Sacramento area, right?
Exactly, they are milking you!
Withdraw the offer. Posthaste.
When they come back, tell them all you can afford now is $225K.
And when they come back after that, start at 199K. These guys are game players. You should respond in kind.
Soon as they tell me there is another offer I lower my price.
You need to bail on this one and tell the bank AND the realtor to kiss off. Or you’ll be just another knife catcher.
This is your blessing in disguise, if you can see it.
Why don’t you tell them to stick their property where the sun doesn’t shine and stop being polite to these ass*ole realtors. Remember, if property prices are moving up at this juncture, it’s simply a dead cat bounce. In situation like this you have to have balls of brass and realize that another property will be coming along (in fact lots of properties). If some other GF buys the property, so be it. There is NO RUSH in this atmosphere. Property isn’t going to “bubble” again for many, many, many years.
An offer is nothing more than that until the other party accepts and both parties have agreed to terms with such specificity the court can determine that a meeting of the minds has been reached. Otherwise, you do not have contract. Also many states require contracts relating to land be in writing signed by both parties. Unless you are under contract with someone you can raise the price or do whatever you want.
..
GO HERD.
..
I’ll provide the sound effects:
Moooooooooo
I really don’t understand the rush to jump in right now. I just don’t get it. Doesn’t anyone study history these days? I live in SoCal and we went through a long housing bust in the early and mid 90’s. It wasn’t V shaped and it never is V shaped. RE prices are not going to hit a bottom and then begin to rocket up despite what your buddies “joe realtor” and “Jane mortgage broker” tells you.
This market is no where near the bottom. And when it does hit the bottom in 2010 or 2011, it will flat line for another 4-6 yrs. But then again, I guess we need knife catchers along the way down to reset comps.
Offer $400k and with a little luck you’ll outbid, err, yourself! Seriously though, RUN AWAY FAST!
how could they raise the price now?
Thats how they play the “Short Game”…..They will raise the price if they recieve multiple offers…
They’ll be dismantling this statement all day long but CNBC is reporting via another source that RBS is telling its clients that the world credit markets will be experiencing a major meltdown w/in the next 3 months.
Do you think that particular analyst still has a job there?
I think I saw him ahead of me in the unemployment line this morning!
lol
Meredith Whitney, Einhorn, and the Goldman Analyst who called for $150 bbl oil are now somewhat rock-stars. IMO, shorting and bad news are now fashionable for the fashionable investor.
From an analysts point of view, it’s probably a safer bet to pump a stock down than to pump one up these days.
And Einhorn is HOT.
My previous posting hasn’t shown yet, I’m posting again.
I made an offer on a house in Kearneysville, WV for 255K. List price was 299K. Then the realtor told me they had another offer and I did an escalation clause with maximum price upto 299K. Now, the asking price has been raised to 335K. WTF these people are doing. Is it legal or maybe legal but is it ethical? When I had an offer, the house should be under contract but they kept it open for other offers. Then thye made me bid and now they have raised the price.
God knows what is cooking between these realtwhores and banks. I’m going to withdraw from my offer.
My other reply hasn’t shown up yet either, so here’s my 2 cents again:
Tell them all to kiss off, before you regret it.
I like your response Blano, short and to the point.
255k in WV? You’ve lost your mind.
Is that for the whole state???
What kinda shape is it in, how long has the house been on the market and what are the comps? Is your number realistic? What is it really worth in your opinion? Find that number and stick to it - leave them your phone number so when they can’t sell, they know who to come crawling back to.
Oh yeah, when they do come back make sure they pay some closing costs and fix up all the little things that are wrong.
The WV Panhandle –just a little 4-gallon commute to DC — is going to crash, badly. They are desperate for buyers, and yet they are STILL trying to cheat you?
Tell them all where to go.
(what was it? A McTyvek shack on a postage-stamp lot? Nothing should cost $225K there, unless it’s 20 acres with a barn. )
..
GO HERD
..
OK Martinsburg. $299 in WVa is absolutely stupid. Withdraw your offer. Now. Read this blog everyday. You’ll thank us later.
Just curious, is anyone planning on going buck wild and getting irresponsible with your stimulus check? Seems like a good time to make it rain!
I went buck wild and irresponsible after paying the IRS and CA this year. No check for moi, just some crying in my wine.
Just be glad you don’t have a house in Cupertino.
BWAHAHAHHAHAAHAHAHHHHHHHHHHHHHHHH.
Good thing I just swallowed my coffee before reading your post FPSS. Coffee cup is empty, off for my second cup.
Ditto here SFgirl.
Most of mine went for gas.
Blano,
That was a great way to spend your refund. My money would have gone for gas also.
Lol, are you saying you made too much to actually get one??
Yup,
Cashed out a few stock options from my company. The company took out the taxes, just not enough. Also pushed me into the AMT bracket. I was expecting to pay the taxes and knew I wouldn’t qualify for the rebate.
Would love to have your problem, Gal…..
It seems like if we are going into a period of inflation, I should go buy something on credit to pay back w/devalued dollars. A big flat screen maybe? Alas my heart just insn’t into it. It’s sitting in my M&T bank account w/no plans attached.
*M&T bank account - see I am still living life on the edge though!
Want to go sky diving without a parachute?
Yeah, we’ll be moving it. Have to do the research though so I don’t go from the frying pan to the fire. Before last week, when I saw they were on a watch list M&T was supposedly a nice, cautious outfit too.
MT, not M & T…
The cupboards appear to be bare
seems like if we are going into a period of inflation, I should go buy something on credit to pay back w/devalued dollars.
Correct me if I’m wrong, but buying a depreciating asset now with the hope of paying it back later with “devalued” dollars only works if there is wage inflation to go with the monetary inflation/currency devaluation…
I know you were joking, but the point stands: monetary inflation with no wage inflation means a lower standard of living, not more affordable debt…
“Correct me if I’m wrong, but buying a depreciating asset now with the hope of paying it back later with “devalued” dollars only works if there is wage inflation to go with the monetary inflation/currency devaluation…”
You are correct, Northeasterner. However I forgot to add that our income is earned in Syracuse. And ya know, we’re different here so I’m sure we’ll be receiving that wage inflation you’re referring to.
Mine went for my annual propane (heating & hot water) buy…didn’t cover all of the cost for the 850 gallons as it would have last year, but atleast made a dent.
Next year. if they continue to devalue the currency and print another round of paper for the masses, I expect it will only cover half the cost.
If supply-side economics and trickle down is so effective, then why did conservatives agree to directly stimulate the consumer side? Supply-side stimulus (corporate tax cuts etc) should have already worked. So, aren’t supply-siders proving themselves wrong?
oxide,
Too much logic so early in the morning. I have’nt even started on my second cup of coffee.
have’nt should be haven’t. See now I know I need that second cup of coffee.
So none of you are going to the gentleman’s establishments? Gambling? Speculating on Soy Bean futures? Me neither, but I was hoping someone would say something like, “my stimulus check is going right up my nose!”
BOO-YAH!
As Chuck Brown, the godfather of go-go music, sings in “Money” … “every dollar bill that I come across goes into my engine and out my exhaust”
Chuck later adds “I ain’t got nothin’ against the credit cards, but cash is the best.” Perhaps he’s a good choice to replace Bernanke.
You might be in the wrong blog. Many of the folks on here still have 20yr old 19 inch tv’s.
The stimulus check is not an admission of failure, it is a tool to keep the scheme working so they can pick off as much wealth as possible from the middle class before the middle class riots. It’s the same thing as food stamps. Food stamps are not for the poor, they are to keep the poor from rioting and hanging the rich from lamp posts. The formaly middle class that have enough to eat will be less likely to riot and get the remaining middle class thinking about what’s going on.
What a blog! references to obscure musicians like Chuck Brown. Its buried somewhere, but I have that single. I remember seeing Trouble Funk perform.
zeropointzero are you from DC? I grew up in MD but went to school in DC.
Supply side and corporate tax cuts might be fine when working in the background over the longer term (witness Ireland’s success, for example), but politically it’s useless — no, worse than useless when it comes to votes — in an election year.
If supply side voodoo economics actually works (it doesn’t), why did Bernanke and Paulson both say it doesn’t, under oath in front of congress?
Even if it did work, there’s a principle called the “law of diminishing returns”. As the marginal cut becomes less and less significant, cutting has less and less of an effect.
Dropping top tax rates from 90% to 45%, for example, will have a huge effect on spending patterns (and will “stimulate” the economy, even if only into malinvestment–like a sugar high, short term gain, long term you have crumbling bridges and no jobs), dropping from 45% to 22.5% will have a good effect but not as profound, and going from 22.5% to 10% will hardly make a dent.
These so-called Keynesians fail to restore equilibrium by cutting spending and raising taxes during the boom, so after a while their power tools run out of juice and they’re stuck.
(*Clinton did this, but Bush hooked ‘em up to some flash capacitors as soon as he could get the safeties off. Wooooo… goodbye budget.)
I’m not a supply-sider, but I do believe that supply-side economics can work in a relatively fixed-money-supply economy.
The problem is not “if money will trickle down,” it is “What form of money is cheapest to acquire?” As we all know, it is far cheaper in the short-run to acquire money via debt (credit cards, loans) than via work, which is why trickle down can’t work. Why work extra hard or find the best job market when you can just borrow, borrow, borrow? Supply side fails because of the central banking fraud pushed on everyone.
Without easy credit, supply side could work fairly well. I laugh when people say that the poor can’t live in the areas they work in — sure they can, if money was easier to get via work than credit. The middle class and wealthy have a great need for the heavy-labor class. If those lower income individuals can not get to work easily (get rid of public transportation is the first step), they won’t get to work where you need them. Salaries go up. But when credit is easy to acquire even by low income people, or you subsidize their living expenses directly, they’ll be more heavily burdened. Why move up a class if you can get your apartment subsidized? Why bother learning a better trade when you can access easy credit?
Again, I am no supply-sider, but I do believe that trickle-down theory would work far better in a fixed-money economy, preferably without fractional reserve banking.
I laid a patio in the back yard with mine. Seeing as how I’ll be spending most of my free time this summer enjoying my yard, I figured, why not.
10 cubic yards of river rock -$1,000
5 rolls of weed barrier -$200
1 wheelbarrow -$60
5 tubes of Ben Gay -$18
And the rest I blew on beer!
Ours might show up in the next week or two. I was planning on buying metals with it, just to be contrary to the gubmit plan. But my husband just started, like, surfing, so we might blow it on ’suits and boards, dude.
Cowabunga, dude!
Serf’s Up
Using my check towards finishing off a small small space in my basement that we didn’t do yet…doing the work myself……
Every year I try to do a sweat equity project of stuff I refused to pay the builder to do..1)didn’t want to pay the over inflated price 2)didn’t want to pay mortgage interest on it and 3)didn’t want to pay taxes on it either..
Big difference considering neighbor and I have similar houses yet they did every upgrade with the builder and the cost of theirs was $250K more than ours…my sweat equity projects have not even cost me 10% of that! Still way way ahead of the game…
Truth be told, I’m not spending a dime of mine. I’m going to use it to repay a loan I made to myself (from my savings) earlier this year.
The wife and I are putting ours in savings, to pay our tax bill next year.
That is, if mine ever arrives… Who told the IRS that I’m gay? C’mon, fess up.
Yeah, my husband and I are doing the same thing. We’re putting away our stimulus checks towards taxes for our business. (hahah, stimulus checks for the self employed? What a slap in the face).
Like I said in a previous post, I’m not spending my stimulus check on anything but taxes. If that’s the case, am I really stimulating anything if the rebate check is going straight back to the taxman? Because I certainly haven’t spent it on any goods and services. Hmmm.
(If I did not have taxes to pay this year, I would have stuffed that stimulus check into a savings account and never withdraw it, just to be an unpatriotic a**.)
“Just curious, is anyone planning on going buck wild and getting irresponsible with your stimulus check? Seems like a good time to make it rain!”
Ours isn’t coming for another week or two. DH and I plan to invest it. Haven’t decided how or where yet.
Little DD has started grumbling about still sleeping in a toddler bed, so we might have to stimulate Ikea.
We spent ours on lunch at Chipotle. I’m pregnant and have been having killer guacamole cravings.
Don’t stimulate Ikea, stimulate a much cheaper bed new or practically new via someone who does CL(craigslist).
Sheesh, why pay full retail?
Get a bed for 50bucks.
Oh I’ve already been through the Craigslist ads for our area. Either the furniture looks like junk or the sellers aren’t smart enough to figure out how to post photos (in which case I just move on).
A couple of furniture chains are closing some of their stores around here, but they’re asking ridiculous prices. One of them wanted $800+ just for a boring ordinary twin bed, mattresses not included.
http://www.nakedcapitalism.com/2008/06/mbia-refuses-to-downstream-cash-uses.html
“The latest bit of MBIA chicanery manages to sink far beneath the already low standards set by the bond insurer. Readers may recall that MBIA had refused to downstream $900 million raised in highly dilutive equity offerings to its insurance subsidiaries (note it had raised $1.1 billion, all of which was initially slotted to go to the subs, then when it was revealed that the money was still in the holding company, said in early May that they would remit $900 million to the insurance ops, then in early June basically said that they had changed their mind).”
Is there a way to get a list of who their subs are?
OK, a retard here - can someone please explain what this means in layman’s terms?
http://www.sun-sentinel.com/news/local/broward/sfl-flbcondorule0617sbjun17,0,5738781.story
Leave the old guy alone, HOA’s are out of control.
He bought into the community, he agreed to abide by the rules of the HOA. No sympathy from me. Next time he can read the damn contract before he signs.
sorry this was a double post
If Ambrose Evans-Pritchard, International Business Editor is correct, we are in deep sh*t!
RBS issues global stock and credit crash alert
By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 7:40am BST 18/06/2008
The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.
“A very nasty period is soon to be upon us - be prepared,” said Bob Janjuah, the bank’s credit strategist.
A report by the bank’s research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as “all the chickens come home to roost” from the excesses of the global boom, with contagion spreading across Europe and emerging markets.
RBS issues global stock and credit crash alert
RBS warning: Be prepared for a ‘nasty’ period
Such a slide on world bourses would amount to one of the worst bear markets over the last century.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/18/cnrbs118.xml
I am not qualified to evaluate his argument or opinion. Have you heard from other sources making the same claim?
Yep, I think it was Hoz that said things come due in August.
txchick said something similar as well.
Royal Bank of Scotland looking for S&P 1050 this fall. I agree. The trick is going to be timing the short side entry for maximum bang for the buck. Summer should offer the chance.
At 1050, I’d probably get long and stay long for awhile. Tech/alt energy/beta.
Summer officially arrives this weekend…
Just saying.
Beijing olympic games
Aug. 8 thru 24
just after ?
I think it will happen sooner rather than later. Maybe next week.
There are certainly some indicators pointing that way.
If the S&P breaks 1320-1325, I’ll short with you.
I am almost ready to bet MOS and POT will break down and fall like stones when the market breaks this summer
reminds me of DRYS of late last year
Tx … regarding “If the S&P breaks 1320-1325, I’ll short with you.”
I played the late winter early spring channel between 1320 and 1390 pretty well, however I got caught when it broke 1300 and had to hold for quite a bit to see black again. How do you determine that this potential break is different?
Thanks again for all your insights.
Well, if we go the 2001-2002 model here, July could be a ugly month. July 2002 was one of the hairiest months I’ve ever seen in the market. I remember one day buying the Dow Diamonds down every 100 points and I think I bought them 7 or 8 times that day. Then the next day it got most or all of it back.
TxChick, sorry to ask the question again, but what was that daytrading book or course you recommended?
Not that I am going to try it, mind you, but I’m just, uh, curious…
Jeff Cooper, “Intraday Trading Strategies.” It’s available from Trader’s Press for about $23 and comes with a DVD.
Thanks!
Yes, thanks to Hoz, tx, and the rest of you, I reallocated my retirement a year ago. I’m looking forward to getting some good bargains after everything bottoms out.
RE S & P 1050. That’s probably about what it would take for me to put money in. This “worst bear market” would just be a return to fair value. I wouldn’t expect any more than 3-4% over inflation from that level.
3-4% over inflation is greater than expected GDP growth. If the stockmarket outperformed real GDP every year, it would eventually have a value relative to any other asset greater than any number you can think of.
“Cash is the key safe haven. This is about not losing your money, and not losing your job,”
i sure have heard that part of the argument from other sources..
(I can’t resist …)
From the article: “Cash is the key to safe haven. This is about not losing your money, and not losing your job.”
In other words, cash is king.
(I can’t resist …)
..me neither.. You catch the last line of the article? That’s kinda sweet too.
I guess this report should be filed under “take the money and run” or “stay low, move fast and carry lots of money”.
Lehman CEO Fuld Faces Growing Pressure to Sell
Posted By:Charles Gasparino
As discontent grows inside Lehman Brothers over the firm’s financial problems, pressure is building on Chief Executive Dick Fuld to sell the securities firm to a bigger player, CNBC has learned.
http://www.cnbc.com/id/25217408
Gee, I thought everyone of any importance on MSM was saying all is well, all is contained, be happy and spend that stimulus check and pay those mortgage and auto payments. Heck, better yet, leverage up.
Yea all is well, hmm kind of like the final scene where everyone runs amok in Animal House. I think that was Kevin Bacon?
No, Tim Matheson.
http://www.tigersweat.com/images/anim15.jpg
Blano and Tokyo: I stand corrected.
RE: cash is king.
Won’t make any difference when the truckers (already happening in Spain & Portugal) finally decide not to deliver the food to keep your local grocery store stocked with it’s 3-day inventory or those gasoline tanks at your friendly gas depot will allow you to get to that store with it’s now empty shelves.
Best thing to own right now…small acreage farm.
a farm? No thanks. That would target numero- uno for the roaming hoards of starving people..
Farms tend to be far away from big cities, where the majority of the population is, and I rather doubt starving people will be able to spend $100 in gas to get there, to be roaming hordes.
there’s this book out there .. what’s it called.. hmm.. grapes of wrath? i think thats it..
In it, masses of hungry people somehow managed to travel all the way across the country in their quest for sustenance.
But being fictional it presents a weak argument. So i’ll concede that an isolated farm might be safe from assault.
Plus, farm houses usually have real nice fields of fire on all 4 sides.
Not fiction joey,
Because of the dustbowl in the midwest my grandparents rode the rails (grandmother had to disguise herself as a man) to CA.
grapes of wrath.. by Steinbeck..not fiction .. hmm..
why would Amazon have it listed as such. hey.. not my fault! I believe what I read
Steinbeck did a considerable amount of research and reporting on dust bowl refugees BEFORE he actually wrote Grapes of Wrath.
He was deeply angry at what he saw–and also deeply shaken. Things were falling apart all around him and he wanted to get the word out to people in other parts of the country who didn’t really understand.
Steinbeck actually traveled and lived with those people for a while before writing the book. So, well researched fiction?
Which trains would later-day Joads take from the Bay Area or Los Angeles, to get to the fields of plenty?
And don’t forget that the trainyards have well-armed guards these days.
But if you do manage to get on a freight, be sure you’re in a car that says do not hump. Really.
Steinbeck also wrote “Death in the Dust,” a non-fiction account of squatters camps. It was his research for the novel.
Yikes everyone! Maybe the stimulus check needs to go to buying some stored rations, just in case . . .
You can grow your own food in a pretty small space. Americans have done this before, and we can do it again.
BTW, did you know that, during World War II, Victory Gardens accounted for 40% of American vegetable production? My great-grandfather was a Victory Gardener, and, according to my mother, he fed the family quite well.
I grew up next to grandparents that grew 90% + of what they consumed in the backyard of their 7000 square foot lot…No need for acreage…
“This is about not losing your money, and not losing your job.”
You couldn’t buy a good job in the seventies.
It is a lay low report.
Man, I thought I was bearish. Yikes! Duck and cover.
I still think we’ll hold on into the fall, probably late Fall. So let’s see how this goes. (Note: I’m only debating the timing by a few months, not the magnitude.)
Such a slide on world bourses would amount to one of the worst bear markets over the last century.
Holy mother of all feces. That time frame includes the 1930’s! That is no small statement. Yikes!
Got Popcorn?
Neil
It made my ____ pucker…
Evans-Pritchard is one of those rare Brit Establishment reporters who writes provocative copy–and is usually right. His blog at the Telegraph is chock-full of useful financial industry news and direction, mixed in with good analysis.
I have been reading his columns for about 10 years, starting when he was the political reporter for the Telegraph in Washington and had nothing nice to say about the Clinton regime. He was usually the only one who described them accurately. They couldn’t stand him, which always told me that he was doing something right.
We will see if he and RBS are correct in the weeks ahead. Those who short properly stand to make a lot of money, if done right.
Will be watching for the right entry point. Hate to say how long our money’s been on the sideline.
Cash isn’t king. Cash is God(TM).
As hyperinflation came down to bear on around 100 countries in the past century, i’m sure there were many that thought they would be a-ok, because they had saved rectangular pieces of paper, printed on both sides, which had formerly been useful in exchange for goods.
All I’ve saved is digits in a virtual bank account. Oh well, if those digits turn to nothing, at least I won’t be alone.
What will end up happening to our currency is the aspect of this that I struggle with most. All of the following seem possible to me, to one extent or another:
30% Deflation.
20% Hyper inflation.
20% Painfully high but survivable inflation.
30% The world keeps believing our BS and everything turns out fine.
I was wondering if he might be E.E. Evans -Pritchard’s son, checked, and yes he is. His father was one of the best anthropologists ever, wrote really amazing ethnographies of Southern Sudanese tribes.
He’s got good genes on the observation, analysis, writing chromosome. Not bad looking, either.
And thanks, poshboy, for letting us know about his blog.
As OV said yesterday: The Black Swan has landed.
And emptied its bowels.
This is one of the most bearish threads that I have read in a long time…Makes me nervous…
SCDave-
I was reading your above post just as a CNBC reporter was claiming this was one of the most bearish days in the pits he had seen in a long time. Just so you know this feeling isn’t just hbbers.
I just looked up the definition of “bourses” and although I don’t speak French, it doesn’t sound good:
“Le scrotum, ou les bourses, est un sac de peau des mammifères mâles situé entre le pénis et l’anus et destiné à protéger les testicules.”
I don’t speak french either, but what it ‘reads’ as is
-your nuts are in definite trouble, maybe the guillotine-
was that pretty much a good translation of that french phrase?
Just wondrin
All this reads very very foreboding.
“Hampton Roads House Prices start to show Slump”
http://hamptonroads.com/2008/06/hampton-roads-home-prices-begin-show-signs-slump#comment-622061
I’m trying to get all the people in the comments box worked up and fighting, but it’s hard to get our crowd moving.
(Hampton Roads = Southeastern Virginia, Norfolk, Virginia Beach, etc).
I win the prize for finding the dumbest MSM quote of the day.
If Manhattan real-estate prices do fall, the rest of the country may have reason to applaud. “We typically go into a slowing economy later than the nation does,” economist Heym says. So any weakness in Manhattan could mean the rest of the country is on the road to recovery.
http://finance.yahoo.com/real-estate/article/105253/Signs-of-Softness-Appear-in-Manhattan-Real-Estate
If I fart in Midtown, will a million flowers bloom in the Midwest?
Omigosh thanks for the belly laugh!!!
FPSS with the methane/nitrogen gas released by your fart, no midwest farmer would need to use fertilizer. Free beans for everyone.
FPSS,
“So any weakness in Manhattan could mean the rest of the country is on the road to recovery.”
How did that work out in 1929?
If that kind of glib BS is all you can point to support a bottom theory, in essence, arent you admitting defeat?
The head is running out of oxygen which is good news for the rest of the body. We can expect a rally.
It’s hard to tell which is worse the guy who made the quote or the reporter who put it into print.
Talking about going off cliff. Manhattan is lagging the rest of guys. If Manhattan starts to fall, the others must be starting to fly.
Isn’t this exactly what we have all been predicting? Comes as no great surprise to me. Blood in the street has been our predictable outcome for some years now.
Watching MSNBC this morning I am hearing some real fear as the bulb comes on. I would describe the mood as somber.
I wish I had more time for getting on blogs.
In a world with potential cheap energy on the downslope, it is no longer beneficial nor healthy for a country to grow an economy. It is “mostly” a truism that economic growth is related directly to population growth. What a shame then, that we have a financial system that is dependent upon being constantly fed ever increasing debt units to be passed on to our offspring. I bet there isn’t one banker out there that would be a member of the zero population growth group. It kind of makes it understandable why only the wealthy and poor tend to be the best breeders. The wealthy can afford it and the poor can’t or don’t need access to debt units.
Maybe I’m just a barter loving, hard money fanatic at heart. All the fiat money lovers will come out and sqwauk about the “time value of money” and how lending is good, flexible money supply blah blah blah. Sure I can believe that on a small local scale, but not with the monstrous Leviathan the lending/financial system has morphed into.
“Feed me Seymour! Feed me all night long!”
What? No comments on the Royal Bank of Scotland’s call for a stock market crash?
RBS issues global stock and credit market crash warning
Sorry, missed the link above.
Yes, this was predicted by hoz and txchick.
Oh, hahah. I commented above.
Ya’ll with some $$$ complaining about no yield might want to be ready to toss it in at that point although it will be so ugly, nobody but a nutcase like me will be wanting to be long. The uglier and more dislocated it is, the better I like it. I bought the 60 point gap down in Jan on the S&P and the Bear Stearns dump. There’s something about sheer panic and forced hedge fund selling that gets me all excited.
I have over 500K in cash in my IRA. I’d deploy the entire amount into that. Buying panics like that is how you get wealthy.
Left one thing out, you have got to be out of your mind, unless you are getting inside info…
lol,lol,lol
txchick-
If the markets continue their current drunken sailor stagger into options expiry, what do you think the chances are of a “Black Monday” event early next week when the big boys have to sell the kitchen sink to cover losses on naked put hedges that looked like free money a month ago? I’ve been adding July index puts since last Friday’s stunted “rally.” Financials are certainly showing an interest in leading a plunge.
I wish I’d been paying closer attention. I’ve been screwing off the past month. I did see the bear flag on the S&P which convinced me to dump the calls.
Is next week option expiration? If so today should be interesting. One thing I learned from Cooper is that the Wednesday the week before OI is usually a misdirection day.
answered but it got eaten
I haven’t been paying attention, sorry to say, been screwing off for a month now.
One thing I learned from Cooper is that the Wednesday of the week before OI is often a misdirection day. So today should be interesting.
If the S&P breaks 1320, I’ll probably short some myself. Right now, flat as to indices.
Your Wednesday indicator theory intrigued me, so i looked up October 14, 1987. 3% drop in the S&P500.
And we might be on our way to your 1320 threshold, BTW. the 1340ish resistance just went poof.
And then there were two tries at S&P < 1335. Will we have a third today? It’s getting to be poop or get off the pot time for the PPT.
What about plain ol’ index funds for us more pedestrian types?
Txchk,
I bet you would get a high and enjoy it if you were into skydiving without a parachute. Whats with you? Are you so confident as to your understanding of what in the H*LL is going on? You have more faith than I will ever have of anything.
I think I will just sit on the sidelines and keep everything that I possess in short term investments (cash). I praying for a glancing blow as opposed to straight on hit.
lol,lol,lol
ps:A person has to know their limitations.
I assume it’s more of an adherence to Buffets theory. Same theory that will mean it’s a good time to buy a house as soon as everyone thinks it’s the worst possible time to buy a house.
yes, I am confident in market cycles which I’ve seen since I got into this in the early 1980s. If you bought the crash of 1987 or the LTCM dump of 1998 or the one in 1990 or the one in 1994 or the October 2002 or March 2003 panics, you’ve done very well. Call me a hopeless romantic but I think once the excess has been washed away, the field will be clear for new growth again. Rather like a forest fire. The trick will be to pick where the new growth will be.
Alas Tx,
If Mr. Ambrose Evans-Pritchard is correct, there will be no need to get long for years. Not necessarily short, but stocks will not bounce until the economies bounce. In 1932 the stock market hit its low, but for the next 5 years it was in spittin distance.
So Hoz, are you saying, if the market flatlines for 5 years, Tx will either have to get a real job or go back to lawyering?
lol
neither. I won’t commit my trading capital for other than short term and the IRA won’t be needed for a long long time, if ever.
After a forest is burned, it takes several hundred years to be back where it started.
Yes Tx will have to get a real job, I suspect Secretary of the Treasury would be apt punishment! lol
Flatline does not mean trading income vanishes, it means pick your choices to invest carefully. Individual stocks and bonds, not markets. IBM went up from 1929 to 1935. There are good stocks in every market. There are dogs in every market,
Tx, come on, just joking. Do not take me seriously. Just some light hearted humor on what appears to be a dismal day. No harm intented.
lol
“Call me a hopeless romantic but I think once the excess has been washed away, the field will be clear for new growth again. Rather like a forest fire. The trick will be to pick where the new growth will be.”
I’m trying to figure this one out too, but I’m certain the growth won’t be in housing or commodities. The masses ‘know’ too much about these sectors.
As a lawyer myself, I must note the clever statement of the alternative in LC’s last post.
I think it’s tech and alt energy.
“I have over 500K in cash in my IRA.”
Party at Chick’s place! MAKE IT RAIN!! MAKE IT RAIN!!!!
Txchic, will you be my mentor? I like your optimism.
I think things are overpriced and bubbly but there’s a time to let go of it and ride it back up. I had a bad year in 2003 because I had a hard time letting go of the bear. That won’t happen this time.
Everyone is so bearish there might be a nice santa claus rally this year. I have NEVER seen the amount of negativity in this economy and we’re not even officially in a recession. Lots of jobs still available on Monster - lots of companies hiring perm workers. Just because a few realtors and mortgage brokers have lost their livelihood doesn’t mean the world is going to hell.
…..I suspect the decline in the wealth effect of housing is already factored into the market.
I think we are not bearish enough. Recent bear markets were nothing other than a combination of fear or investor weirdness, not the results of global economic outlook - hense we are higher than the bear markets suggest.
Current bull market is a result of investors refusing to accept the global economic outlook. Hense we will head much lower.
P.S. I had my first European customer to default.
Yeah I got a comment. What took them so long to realize this? No bottom in sight for housing and related systemic defaults. How could it be any other way?
What took them so long to realize this? It took a certain amount of time for the nickle to drop.
Found thru uktimes:
http://arabianmoney.net/2008/06/18/dubai-house-prices-up-78-another-surge-guaranteed/
Dubai house prices up 78%, another surge guaranteed
“The UAE currency peg to the US dollar means that the interest rate cuts to two per cent this year have been matched locally, despite the economy being in an oil boom rather than an economic slump. Local mortgage rates on four-year fixed rates have fallen as low as 5.3 per cent.
Falling interest rates mean that local bank deposits earn around one per cent while rental yields in Dubai range from five to seven per cent. Landlords can still buy-to-let and cover their mortgage costs, although less than 25 per cent of freehold properties are actually under a mortgage.
Now a 78 per cent price gain in a year is going some. But this momentum towards higher prices will continue until something happens to slam on the brakes. In fact, the likelihood is that the Fed will put its foot down on the accelerator at least one more time, probably this autumn, and cut interest rates again.”
Peter J. Cooper’s WeblogJune 18, 2008
They aren’t making any more desert.
“They aren’t making any more desert.”
Dammit. Because I always mix up dessert and desert, that post has me thinking about hitting the 1.5 QT (note, no longer a half gallon, ain’t inflation fun?) container of Dreyers that’s now calling to me softly from the freezer.
Out here in Utah we have a lot of desert rats, you don’t wanna don’t get those mixed up with dessert.
Just like chicken, right?
Well, most desrats I know are human, so I couldn’t say…
; )
RE: 500K in cash in my IRA.
The Beantown Glob ran a tiny Associated Press article yesterday about a hedge fund dude by the name of Sam Israel who police say faked a NY suicide bridge jump, related to the fact he seems to have clipped investors for a tidy $576 million.
So, to all you finance, legal, bankingm, and money laundering whiz’s out there…
Where and how does a crook hide and later gain access to $576 million?
Ask Saddam Hussein
RE: Ask Saddam Hussein
Dead men tell no tales.
But, but, hd74, he wrote “suicide is easy” on the hood of his car before he jumped into the Hudson! You don’t think that a man of the utmost integrity and honesty like him would even think about lying in order to misdirect anyone, do you?
Painless, not easy.
Anyone who has seen MASH knows that Painless did not really commit suicide. He thought he did, but they gave him a sleeping pill, not a suicide pill.
Not sure if this was some type of secret message, but you’d have to be an idiot to think it wasn’t obvious.
You’re right, the coffee had not yet kicked in. I haven’t followed the story closely, but didn’t a surveillance camera on the bridge catch an image of another car pulling up next to the fugitive before he supposedly jumped? Whatever came of that?
I have no doubt that this guy is lying on a beach & laughing his ass off in a country with no extradition treaty. Greece at one time was a favorite place for those on the run from Uncle Sam, but I believe it isn’t as welcoming of international fraudsters anymore. Israel too has lost its most favored haven status since they deported “Crazy Eddie” Antar back to the US in the early 90s.
Dubai, UAE, Switzerland.
If you pay off the right people you can stay where ever you like. It’s like that story I posted a while back about the Iraqi who had stollen hundreds of millions from Iraq/US gov. They knew exactly where he was, and even got an interview with the guy in Europe, but no prosecution?? That tells me this guy paid off the right people.
Think Globally:…Think Switzerland
“Where and how does a crook hide and later gain access to $576 million?”
Offer a reward of 20% of his recovered assets & he will turn up (or be turned up).
I’m not sure why this guy is going to jail, it will accomplish nothing and just put a bigger financial burden on the very people who he “defrauded.”
The criminal penalty of jail makes no sense. Take a productive fraudster out of the economy and 10 more will fill his shoes. Put him into the economy and take a piece of his wages, and at least some people will get something back.
I’m glad he fled. Why not? Sure, he hurt some people, but he’s no different than anyone elected or anyone hired by those elected. It’s OK for the politicians to defraud, but he has to go to jail? The moment I put money in someone else’s hands I immediately considered it gone. If it is returned, with interest even, it’s a gain.
Trust no one.
Absolutely. This guy should be the next Federal Reserve President. He’s got the qualifications and experience nailed down.
What do you mean the guy made his money stealing from others. There is no way he could get a legit job that will pay back what he stole. I say execute the guy on TV and then maybe others won’t steal.
So, Measton, you posting from Afghanistan?
Gitmo?
“I say execute the guy on TV and then maybe others won’t steal.”
Measton, I’ll supply the 20-oz framing hammer!
Uuuuh… Israel?
Uncut diamonds.
At this point it is the only “instrument” that can’t be traced and can be exchanged for other instruments easily.
Cut diamonds aren’t the easist thing for the layman to sell for full market value, and uncut ones are far murkier of a market.
There’s better Karats out there…
Someone with $500M is not a layman.
Taking a 15-20% hit on an transaction that can’t be traced is much better than taking 0% hit while having hot money and folks that will pay a lot to recover it.
I’m taking some vacation time this week and finally got a chance to read Dataquick news about California real estate. Here is my favorite line:
“The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,664 last month, down from $1,716 the previous month, and down from $2,364 a year ago. Adjusted for inflation, the current payment is 22.1 percent lower than the spring of 1989, the peak of the prior real estate cycle. It is 36.2 percent below the current cycle’s peak in June 2006.”
And that was for Los Angeles, which is experiencing an accelerated crash compared to the rest of the state. San Francisco is the only holdout. This autumn should be amazing. I can’t wait.
Report form Rockwall, TX:
Last week I lopped $13k off the listing price of my house. Lots of traffic, but given that the house is slightly unusual and in many peoples eyes needing updating (built in the 70s), it doesn’t appeal to everyone. Going to give it 3 or 4 weeks before lopping another $10-15K off.
Given my situation though, it’s going to be hard to go below $250k; hoping I don’t have to go there.
I’ve been watching your listing and I saw that. It’s a very nice house; I can’t get my DH to get enthusiatic about going that far east.
That’s ok, but if you do come out just to tour it, let me know. It is pretty far east.
All my employment in the past decade was on the east side of I-75 (Meadow & 75 in Dallas, Park Ln & 75 in Plano). Interestingly enough, I use slightly less gas now, driving Austin to Dallas and back, and only 1.6 miles to work, than I did going from Rockwall into the city every day.
Sadly, it seems half of the people coming through think that a house is no good unless it was built in the last three years (Modern build quality you know… my countertops are so old fashioned) and has only twigs in the yard (as opposed to the 24 mature trees on my lot).
Crazy crap happening on the Big D front; don’t know how it it will resolve. (Going to special relationship counseling this Friday) I remember you gave someone a reference for a good family law guy in Austin - I may have to ask you for that.
(Going to special relationship counseling this Friday)
Yeah, yesterday I should have gone to a life coach to mellow out and instead did some lite shopping at Target.
Today I am going to the dermo. Keeping up with hotties is not easy.
email me off line if you want
gymnastgal 32 at yahoo dot com
Good luck DITHO.
It’s trying times to be a seller but it sounds like you’re being aggressive. Here in NY we priced well below any comps but that was a year ago before anyone was spooked around here. A lot of people thought something must be wrong with the house if it was priced so low. This year that price doesn’t look like such a glaring deal as others are feeling pressure. I only had $1200 going to my mortgage principle over the year so I don’t feel like the rent I’ve been paying is any great loss. Just glad to be out.
Yesterday I overheard someone congratulating another for selling her home.
“Did you make money or take a loss?”
“Oh we took a loss”, the seller said. She said it with a huge smile of relief. I took that as a sign she didn’t think things were going to go much better soon.
My parents just retired to Rockwall. Great place if your into the lake thing (boating, fishing…). Its a shame you have to compete with all the new home builders out there. But from what I’ve seen lately the new home building is at a standstill in Rockwall.
Good luck!
I find the word “updating” so aggravating. On HGTV, houses built in the early oughts are in dire need of “updating”. (How convenient that Home Depot sponsors so many shows!) Its such a scam and so wasteful. Our rental has kitchen cupboards & bathroom fixtures from 1950 when it was built–they are functional and look fine to me. I would take charm and old trees over a naked lot any day ;). Good luck with your house.
Summer vacation is here in Tampa, FL. I decided to take two months off from consulting to rest and relax and catch up on my fishing. Finally was able to chat with my neighbor…this is his report
….bought 2/2/1 condo in 8/2006. Paid $231,000. Needs to move back to Jersey and the comps are now $130,000 because of builder closeouts. Says his mtg payment is $2200. I pay $1100 for rent for same unit. Every other unit in this complex is empty and for sale. This is worse than I thought it was around here.
WBBR reported this morning that residential prices in high rent districts in and around NYC fell 25%. I thought the announcement was an amazing concession.
Countrywide Corruption.
http://article.nationalreview.com/?q=MmEwYzQ1NmY2NDc1ZGIzNTIzZDVkMTRhMzg4ZTA5ZGY=
Hard to take the moral high ground when your leaders have been wallowing in the mud.
Obsession. It’s not just a perfume.
Yes, don’t address the substance, just toss a catchy phrase.
Say, “President McCain.” Say it every morning when you get up and before you go to bed. That way, by November, you’ll be able to live with it.
Txchick,
When you become willing to post a link from a valid, verifiable source in lieu of the constant stream of ideological blathering from stink tanks, I’ll be happy to address every single one of them. Until then, as with all other extremist commentary, we’ll not bother.
Trump claims new york is fine. But no where else is good.
Chuck Prince Finds Selling Home No Easier Than Fixing Subprime First he lost his job, now he can’t sell his house for a 30% markup in 5 years. Oh, the humanity!
As indifferent as I am about what happens in NYC, I had to check you on this one. BTW, whatever became of NY City Boy? We miss his front line reports from the Big Apple.
Chuck Prince Finds Selling Home No Easier Than Fixing Subprime
By Sharon L. Lynch
June 18 (Bloomberg) — Former Citigroup Inc. Chief Executive Officer Charles O. “Chuck” Prince III lost his job because of the housing slump. Now he’s having a hard time selling his home.
Prince’s five-bedroom Tudor-style house in Greenwich, Connecticut, has been on the market for six months. He has cut the price by $300,000 to $5.85 million, according to the property listing.
The housing recession has hit the bedroom communities that Wall Street favors most. The median home price fell 8.1 percent in Greenwich in the first quarter from a year earlier. Declines were as much as 25 percent in 14 of 19 wealthy Manhattan suburbs in Connecticut, New Jersey and Westchester County, New York, since the start of the year, according to a Bloomberg survey of brokers and multiple listing services. The drop shows that 83,000 job cuts and $393 billion of mortgage-related losses and asset writedowns at financial firms are damaging even the most expensive U.S. real estate markets.
“There is really just no firewall around these sorts of communities that insulates them from what is going on in the housing market,” said Nicolas Retsinas, director of the Joint Center for Housing Studies at Harvard University in Cambridge, Massachusetts. “No one wants to make a purchase and have to tell a spouse, a partner or a friend that `Oops, I bought and that house is worth less today than it was.”’
This was supposed to be a response to exeter’s post above:
Comment by exeter
2008-06-18 07:14:40
WBBR reported this morning that residential prices in high rent districts in and around NYC fell 25%. I thought the announcement was an amazing concession.
“Nicolas Retsinas, director of the Joint Center for Housing Studies at Harvard University in Cambridge”
*****
If I recall, these were the guys at Harvard claiming there was no housing bubble back in ‘05 or ‘06.
It’s good to see that Nicholas finally got with the program.
PAGE ONE
Shakeout Roils Hedge-Fund World
Big Firms Gain Clout as Field Matures; Parking the Maserati
By GREGORY ZUCKERMAN
June 17, 2008; Page A1
(See Corrections and Amplifications item below.)
The hedge-fund business — among the most reliable fortune-producing machines in recent years — is going through a brutal shakeout.
Just a few years ago, traders found it relatively easy to quit Wall Street jobs, hang out a hedge-fund shingle and cash in. Investors beat down the doors with eagerness reminiscent of the late-1990s dot-com frenzy. It took only a decade for the industry to grow to 8,000 funds from a few hundred.
How much longer will the housing bust remain in the denial stage?
UPDATE 1-Hedge star Paulson says credit crisis not over
Wed Jun 18, 2008 7:29am EDT
By Laurence Fletcher
MONACO, June 18 (Reuters) - The credit crisis is not over, and losses in the financial sector are set to be around $1.3 trillion, according to star hedge fund manager John Paulson, who says he remains short credit.
In its twice-yearly report in April, the International Monetary Fund had said total potential losses on both subprime and other loans as a result of the credit crisis could reach $945 billion. Paulson, who earned $3.7 billion in 2007 according to Alpha Magazine by going short the subprime sector during the U.S. mortgage meltdown, also said a deterioration in consumer spending was set to drive the U.S. economy into recession this year.
“I don’t think we’re through the credit crisis. There are lots of problems out there, and I think we’ll continue to experience problems for the remainder of the year,” he told the GAIM International 2008 hedge fund conference in Monaco.
“I believe we’re going to go into recession, I think the second half (of the year) will be worse than the first half, and I think the recession will last into 2009 … The primary factor leading to recession will be a decline in consumer spending, and I believe that will be more pronounced in the coming months.” Paulson said his funds maintain a short credit bias, and said he was short financial stocks likely to have to raise further capital and had bought protection against default on debt payments on these companies.
Gee, what a genius. Doug Kass was saying that a year ago, so were we here. Too bad we can’t get banks to write us some custom derivatives like that clown.
No kiddin’. Weren’t most of the others forecasting less than $500B?
Doug K(ass)???
I talked to a former hedgie yesterday. He said he could do without the pressure of managing OPM, but still works for hedge funds, though more in a marketing / business development role.
In any case, he said there’s contraction going on with the number of smaller funds and that the models for making money have changed so quickly that many “fortune makers” of one year are turning into paupers the next, and vice versa.
He got kinda wide-eyed and talked a lot slower when I asked his opinion of the forthcoming economic environment in the US.
His reply seemed to show he hasn’t thought much about it, or perhaps withholding what he really thought… except the part of his answer that basically said “the world has changed a lot since the Depression - we’re more dependent on one another.”
He did not say whether he thought that was “good” or “bad”.
“we’re more dependent on one another.”
As in, those at the top of the pyramid are being held up by those at the bottom? Ponzi would be so proud.
Would today be a good time to buy the dip?
“buy the dip”
Rrrrrrrrruffles has ridges. I’ll bring the chips.
Mmmmmm…. Dip. I bet that would go well with Lost in Utah’s dessert rats.
BWAHAHAHA!!! Yup, I serve ‘em on my rafting parties (serve the rats, not eat them…)…
I know, pretty cryptic…
The way your last line reads, it almost sounds like you think cryptic might be unwelcome.
On the contrary. Cryptic and entertaining trumps transparent and boring any day of the week.
Is this a free service Stucco ??
you first
Economic doldrums put Fed ‘in a box’
Interest rate adjustment unlikely, experts predict
By Jeannine Aversa
ASSOCIATED PRESS
June 18, 2008
WASHINGTON – Wholesale prices barreled ahead while housing and industrial activity faltered – a blend of high-costs and slow growth that ensures the Federal Reserve’s most likely move on interest rates next week will be no move whatsoever.
…
“The Fed is in a box,” Ken Mayland, president of ClearView Economics, said after the latest batch of economic barometers were released yesterday. That’s why many economists are predicting that the Fed will hold rates steady at 2 percent, a four-year low, at the June 24-25 session.
In times of crisis the best thing you can do is make the right decission, the worst thing you can do is make no decission, Bernanke needs to get his head out of his numbers and grow a set!
“The Fed is in a box,”
And FedEx doesn’t have enough boxes…Dang it… I wish Sir Greenspent would give up the location of his: “Box index”
Bugs: “eh Daffy, you know how to speak Chinese”?
Daffy: No Bugsy, why do you ask”?
Bugs: “There’s a moving van pulling up over at the WB headquarters, I heard a rumor it’s going to China”
Daffy (sputtering / body shaking:) “But Bugs…they EAT duck in China, my career… is so ruined!”
http://www.reuters.com/article/innovationNews/idUSN1740459720080618
When you mentioned WB I thought it was reference to Wachovia.
Keep an eye on that bank. The hawks on the street want to bring it down next.
WB brought itself down by buying Golden West. It is still an excellent short.
Huntingon Bancshares
Amazing isn’t it? How many people on this board predicted that Golden West was a timebomb, while Wachovia, which has tens of thousands of employees and analysts thought they were getting a great deal?
Bank of America will soon find Countrywide isn’t worth 1 million…the name alone is tarnished beyond all hope. If BAC continues with this acquisition it would make an excellent shorting target.
Hwy, I sure enjoy your Bugs and Daffy scenarios - even though I don’t always get them.
Look at who the gloomsters are now! I assume the 25 to 30 pct off peak is a nationwide housing forecast, as SoCal is already there. And the comment about the “average mortgage holder” does not appear to address the little problem of MEWs at the peak, which already may have effectively wiped out home equity for many before falling prices put them as deeply underwater as an Iowa farm house.
Forecast predicts slow economy for 18 more months
Housing prices may fall 25% to 30% off their peak
By Dean Calbreath
STAFF WRITER
June 18, 2008
By the time the mortgage crisis is over nationwide, home prices may be 25 percent to 30 percent off their peak, potentially wiping out the value of the home equity of the average mortgage-holder, according to the projections by the UCLA Anderson Forecast.
The ailing housing market, a tight lending environment and rising prices at the gas station and supermarket will result in a sluggish economy for at least 18 more months, according to the forecast being released today.
“The economic outlook through the end of 2009 is decidedly subprime,” said David Shulman, a senior economist at the forecast.
Hey! This is truly news…
The Anderson Forecast is making a forecast about something that could actually occur.
They just might be right - let’s hope this prediction improves their record!
GW is on tv promoting major changes in policy and pounding oil prices.. i wonder if it’ll do anything to futures..
Looks like the clown Prince is chasing another market down.
http://www.bloomberg.com/apps/news?pid=20601109&sid=auXmRexARYhc&refer=home
“Former Citigroup Inc. Chief Executive Officer Charles O. “Chuck” Prince III lost his job because of the housing slump. Now he’s having a hard time selling his home. Prince’s five-bedroom Tudor-style house in Greenwich, Connecticut, has been on the market for six months. He has cut the price by $300,000 to $5.85 million, according to the property listing.”
This sounds like a bad thing, but perhaps demand will adjust down with supply, keeping further oil price increases in check.
BULLETIN
U.S. CRUDE-OIL INVENTORIES DECLINE FOR FIFTH STRAIGHT WEEK
U.S. crude supply drops for a fifth week
By Myra P. Saefong
Last update: 10:41 a.m. EDT June 18, 2008
I posted before that the odds were pretty reasonable for the world to end by a particle accelerator mishap.
“What is the probability of the Large Hadron Collider destroying the universe?
The Large Hadron Collider (LHC) will create conditions “last seen a trillionth of a second after the Big Bang.” A lawsuit has been filed to prevent the LHC from being turned on for fear that it might destroy the earth or perhaps even the universe. Some scientists associated with the LHC have stated that the LHC is safe to operate….”
Overcoming Bias
James Miller
http://cosmiclog.msnbc.msn.com/archive/2008/06/16/1146317.aspx
So August may never get here.
Ah! The comments! These people need to put down the bong … or go back on their meds!
What do they think, mad scientists pour substances into beakers and mutter incantations from the necronomicron (or whatever) and something “just happens”? I think they do believe this! What a world to live in.
Look, the “bomb” wasn’t “discovered”, it was PREDICTED by the model (E=mc^2, actually) and DEVELOPPED. And everything that’s come out in the last few years, eg Bose-Einstein condensates, have gone to show that EINSTEIN WAS RIGHT.
And if Einstein was right, there is no way in hell this particle accelerator is going to take out Mother Earth.
Existing particle accelerators DO release hellishly powerful forces, but only on a few particles at a time… I mean hello, you need a lot of energy to pull this kind of stuff off.
One dumbass claims that the plans were “reviewed by physicists” as if this were a mark against them! OF COURSE THEY WERE REVIEWED BY PHYSICISTS. Earth to weed-head: we know the models inside and out. We use them–successfully!–to predict the behavior of Nature. The reason for the project is probably more of this trying to suss out the degree of assymmetry in the universe, or to get mad props from your buddies for isolating some other small, obscure particle and having the decay log to prove it, or just because you like to bust things up, and what’s better than smashing atoms? I mean, seriously, the strong force ain’t nothin’ to play with.
If these cretins really cared about this issue, they would spend some time actually studying physics, as I did. You don’t have to take anything on authority: run the experiments yourself.
I suspect they’d rather raise alarums and sow distrust of hard science so they can sell their “magic” juices and herbs & “healing” crystals (cheap rocks).
The history of Manhatten (the Atomic Bomb, not the city) shows how much scientists fly by the seat of their pants. Even Oppenheimer was worried that Trinity would be the end of the world. The scene just before the test was grounds for some fascinating quotes from scientists, most of which expressed regret and fear.
Your faith in science is not shared by many prominent scientists, including Einstein himself. Teller thought science was infallible, but he turned out to be an asshat. The University of Colorado should be ashamed to have a building named after him.
“If these cretins really cared about this issue, they would spend some time actually studying physics, as I did. You don’t have to take anything on authority: run the experiments yourself.”
Yeah right, like we all have access to an accelerator. I have a BS in engineering and took lots of physics and believe me, I wouldn’t trust a physicist or engineer to make the kind of decisions that come with that kind of potential destruction, I’d throw in a few non-scientists, some hippies, and a philosopher and theologian or two. Oh, and an archaeologist.
“Even Oppenheimer was worried that Trinity would be the end of the world. The scene just before the test was grounds for some fascinating quotes from scientists, most of which expressed regret and fear.”
*****
Of course they would, they’re human beings.
Also - it was the Manhattan Project.
Exactly my point. We’re still human and anyone who thinks we know everything about atomic energy/physics is a fool.
Without knowing all the variables the ‘best guess or WAG’ probability calculates from a high risk 0.01% to 0%. Some CERN members believe the odds may be as high as 50%.
http://en.wikipedia.org/wiki/Large_Hadron_Collider#Safety_concerns
Interesting article, Hoz, thanks for the post.
So, phyics and engineering, hum…
Would you do my physics homework for me, please…pertty please…
lol
LOL! The ultimate bear!
Well, I guess thats one way of taking the easy way out!
lol,lol,lol…
When did US district courts get jurisdiction in Europe?
Anybody catch that Frontline last night about young Chinese businesspeople?
Interesting program…
Some things I took away from it:
-The comments about the inertia in the government, and getting anything done/approved without giving the government officials involved an “incentive”.
The question being, can China fix these problems before they kill the geese laying the golden eggs?
-The US and China have significant structural problems with their economies. Which country is going to get their problems fixed first.
-The “rapper”, and his story, especially about sending money to a girl to see him, then being stood up….just wanted to say to him:
“Welcome to “Guy’s World”. We’ve ALL been there.”
It makes me feel better, knowing that some things are a universal experience.
How’d you like the color of the river polluted by a mining concern, that didn’t care about anything else, but making money?
The farmers got here first, who polluted the river with agricultural and animal waste runoff, and don’t care about anything else but making money.
Not that I have a problem with that.
First Trust ISE Global Wind Energy Index Fund -FAN
Started trading today
82 out of 86…I think this sector needs more “stimulus”
The consumer discretionary sector (-1.7%) is struggling, with 82 of its 86 components in the red.
http://finance.yahoo.com/marketupdate/overview?u
Guarantee Gamble:
Developers Dread
Return of Recourse
By LINGLING WEI
June 18, 2008; Page C1
After a decade of easy lending, the dreaded personal guarantee is making a comeback in the real-estate industry, bringing back the kind of tough terms that borrowers hoped not to see again.
“Oftentimes, it’s either sign personally or you don’t get the loan,” said Donald Isken, a real-estate attorney at Morris, Nichols, Arsht & Tunnell LLP. “The tide has changed.”
i love it, just love it!!!!!!!!!!!!!!!!
Wednesday, June 18, 2008
Thoughts on the mortgage meltdown
John Stumpf
About a month after John Stumpf took the top spot at Wells Fargo, the company stopped giving mortgages to people with bad credit. Kai Ryssdal sat down with Mr. Stumpf to get his thoughts about how the mortgage meltdown will play out.
Remember Who Gets the Checks
Despite the fact that Sen. Chris Dodd (D-CT) now admits he was a Countrywide Financial “VIP” since 1993, Congress is still barreling ahead with the $300 billion housing bailout bill. that Dodd sponsored. The important thing to remember as the debate over this massive bailout continues, is that this bill is really a bailout of Wall Street, not homeowners. Progressive economist Dean Baker explains:
“This bill, the central feature of which is having the FHA guarantee new mortgages to replace one’s currently facing default, would first and foremost be helping the banks who hold bad mortgages. All the checks get written to banks, not homeowners. Banks get to decide which mortgages qualify for the program, not homeowners.”
OPINION
Congress and the Countrywide Scandal
By DICK ARMEY
June 18, 2008; Page A15
Countrywide Financial Corp.’s “friends of Angelo” program provided sweetheart loans to key banking players in Washington, D.C. They included former Fannie Mae chief executive Jim Johnson, Senate Budget Committee Chairman Kent Conrad (D., N.D.) and Senate Banking Committee Chairman Christopher Dodd (D., Conn.).
The growing scandal surrounding the “friends of Angelo” loans (so-called by company employees, referring to Countrywide CEO Angelo Mozilo) should serve as a political wake-up call. Yet the Senate appears intent on pushing forward legislation, co-authored by Sen. Dodd, that would bail out the worst actors in the subprime mortgage banking industry.
Senate Submerged in Mortgage Scandal
Wednesday, June 18, 2008
This is a rush transcript from “Hannity & Colmes,” June 17, 2008. This copy may not be in its final form and may be updated.
REP. CHRIS DODD (D), CONNECTICUT: At no point did anyone ever suggest to me that we were supposed to get some deal out of Countrywide. I never spoke to anybody except loan officers about this thing, never any higher ups or any senior people within Countrywide, and had anyone ever suggested to me that I was going to get some preferential treatment, that would have ended the relationship immediately.
I get so tired of people crapping on Sean Hannity as if he were some sort of ogre. He appears to me to be one of the most decent guys I’ve seen in a long time.
You may be a day trader extrordinaire, but standing up for a home-grown-Goebbels is a bit much…
x2.
I haven’t watched him enough to pass judgment. Every time I accidentally hear him open his mouth on TV, I feel too disgusted to by the tone and tenor of his propaganda to tune in for more than a few seconds.
But I am glad he is weighing in against the bailout.
I would like to listen to him but I can’t get past his hair.
It makes him look like second lead in a Rosalind Russell movie.
I think he’s a hunk.
“I think he’s a hunk.”
Well then I guess he is a good guy after all, and I apologize for suggesting he is a propagandist.
Taxpayer Groups Sign Coalition Letter Opposing Dodd-Countrywide Mortgage Bailout Bill
Posted : Wed, 18 Jun 2008 16:54:07 GMT
Author : FW-ON-DODD-MORTGAGE-BILL
WASHINGTON - (Business Wire) As the Dodd-Countrywide mortgage bailout bill comes to the Senate floor this week for debate, leading taxpayer advocates stand in opposition to the legislation.
The Dodd-Countrywide bill would create $300 billion in new taxpayer liabilities, allow banks to dump their worst performing and riskiest loans onto the FHA, and create a $500 million new tax on GSEs to fund a permanent new spending program.
Good, now I can put my megaphone away because the angry mob is gonna do it for us. Wait, I am part of the angry mob, but I’d rather do my toenails than canvass for sigs.
June 18, 2008 7:45 AM
Countrywide Corruption
By the Editors
The U.S. Senate is about to enact a massive subsidy for Countrywide Financial less than a week after revelations that the company’s “Friends of Angelo” sweetheart-loan program included two U.S. senators. It seems unthinkable, but it’s true. What’s worse? One of the two senators sponsored the bill.
I had to be the bearer of bad news, however things do not look good today!
Morgan Stanley warns of ‘catastrophic event’ as ECB fights Federal Reserve
By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 1:29am BST 17/06/2008
“The point of maximum stress could occur in coming months if the ECB carries out the threat this month by Jean-Claude Trichet to raise rates. It will be worse yet - for Europe - if the Fed backs away from expected tightening. “This could trigger another ‘catastrophic’ event,” warned Morgan Stanley.
The markets have priced in two US rates rises later this year following a series of “hawkish” comments by Fed chief Ben Bernanke and other US officials, but this may have been a misjudgment.”
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/16/bcnecb116.xml
Now, I am not the smartest person in the room to understand all the unintended consequences of whats going on, however my opinion, for what it’s worth is that the hope of buying an affordable house should be the last thing on any renters mine.
I got dibs for the first slot in the unemployment line! lol
…or better yet the soup line…
The Bank for International Settlements (BIS), the organisation that fosters cooperation between central banks, has warned that the credit crisis could lead world economies into a crash on a scale not seen since the 1930s.
http://www.bankingtimes.co.uk/09062008-central-bank-body-warns-of-great-depression/
Soros said a while back that we are in the worst crisis since the 1930s. The big institutions seem to always be the last to state the obvious.
Hey, PB, my mom’s wealth is stored away at Fifth Third Bank, formerly known as Cleveland Trust. Is there a way it could go bankrupt and take my future chevron stock down with it?
If I give her a heads up on that bank I could get growled at by my sibs for upsetting mom.
Soros also thinks we need to put a floor under home prices.
The President was on the tv today stating Congress needs to allow more oil drilling in the US.
Headlined across the top of CNBC everyday now is “America’s Oil Crisis”.
The cost of oil seems to be the thing that is wrecking many businesses, consumers and bringing fear that the markets could not or did not do to the economy.
Outside of the Banking Sector / Wall Street, oil prices also seem to be the catalyst for the big push in job losses and looking like more to come.
Assuming that the Fed rate cuts would have helped the economy in the long term, is the price of oil making the Fed useless and powerless in the short term, mid term and long term?
i liked the part about oil shale.. 80 trillion barrels available.. enough to replace 100 years of imported oil.
The reserves are actually much larger, like 133Tb, but i guess he played it safe and spoke of that which is positively known to be cost effectively recoverable today.
as far trashing the moratorium on drilling off shore, it’s about time, imo.
..shale oil, with the largest reserves in the United States, which is thought to have 1.5-2.6 trillion barrels…
ok.. i royally screwed that up.
i think he said 80 billion.. or was it 800 billion? .. while at least 1.3 trillion barrels is supposed to be there.
http://en.wikipedia.org/wiki/Oil_shale_reserves
Drill Here, Drill Now, Pay Less
It’s gonna put Mc in the White House
Why is it always someone elses words ALL the time?
http://www.humanevents.com/article.php?id=26608
Newt was the one who started it all. Mc is a late comer to the party but better late than never.
What about all the sidelined wells we already have in the US that for some odd reason? isn’t being pumped?
Seriously, no reason to start searching somewhere else when you already have the thing you are looking for in the good old USofA and elsewhere. Sheesh. He and others are just trying to get more money, more for their Have Mores etc.
Lets just say, start doing with what you have first, then in 5 yrs of the 20+ in the earth available, then start looking seriously into the extra drilling.
What the h is the matter with alternatives? Or just not driving?
walking is doing wonders for my waistline, and being an average american, perhaps we all should be walking.
Like we did as kids.
People on this blog are always way ahead of the curve…
http://www.nypost.com/seven/06182008/news/nationalnews/rivals_turn_up_heat_in_oil_war_116021.htm
GCC concerns about dollar, US economy.
http://www.thenational.ae/article/20080615/FOREIGN/441776822
http://www.thestreet.com/_yahoo/newsanalysis/realestate/10421680.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA
puke! crammer calling bottom on florida, is this true?
We’re finally making some progress here in Gainesville, FL where it’s “different”. Median prices have held pretty flat but closer inspection shows that volume is more than 50% off y-o-y and 75% off 2006. Also price per sqft is down to $120 (still way too high) from $136 a year ago.
Median household income $28,164
Median sale price in ‘08 $167,000
Still 5.9X
They built some awful NYC-style loft condos (cleverly named “The Lofts”) that were priced at 397,000 for a 1400sf 3/3 last year. None have sold and price is now 217,000.
Some HBBers may remeber that the wife and I were near buying a couple months ago (just ready for the kids to have a permanent house to grow up in). Well we never pulled the trigger (thanks largely to HHBers). That house has dropped by 30K since and the lots have been reduced by 10K. Whew… At this rate we can pay cash next year.
So is it better to buy a reasonable home with cash or to rent? I’m not to savy when it comes to oppotunity costs and, as FPSS would say, ITIM.
ITIM is unemotional.
If you have other things that matter to you (lifestyle, kids, etc.) it may be different. I’d also add in the caveat that in the modern world, you can’t really have a career without mobility.
It has been pointed out that I am extremely cold-blooded in money matters (not the rest of my life) so my style isn’t for everyone.
I’ll just add one datapoint that I have noticed in people over the years — when people’s rents go up, they feel immediate “psychic pain” = “loss now”. They have a tendency to discount losses over the next 30 years because they don’t feel it in the same way. However, these losses are just as real as the other one, and that’s not what a smart investor does.
Another thing is I have no problems buying options on stuff and watching them expire worthless. People feel intense “psychic pain” at the loss of a premium. Moi, I like the optionality which is what renting is.
I’ll stick to the facts, and I’ll probably buy when ITIM is significantly lower than rent (just to hedge against future unknowns.)
At this point in time in Florida, given the uncertainty, I’d just wait for a year and reevaluate. It’s pretty much a no-brainer.
As for the kids, they will deal. In any case, I believe that financial stability and life experiences are more important for the kids than owning a house.
Thanks for the advice.
I’m as unemoitional about money as you can get. Unless I get screwed by somebody who willingly did the screwing. The problem is that mainstream financial institutes have become so fraudulent that there is literally nobody to trust. My local credit union has all the credibility of a Nigerian royal heir.
So I’m being cautious, hoarding cash and carrying absolutely zero debt. Hopefully this will pay off in a year or two.
What she said.
I’ll pay for options all day every day to avoid having to commit or make my mind up until something is a nobrainer.
FDIC chief calls for tighter investment bank rules
Wednesday June 18, 12:36 pm ET
http://biz.yahoo.com/ap/080618/investment_bank_regulation.html?.v=1
Olick at it again,
“Friends Of Angelo” Loan Fiasco Just Gets Nastier
So now the Senate Ethics committee is going to waste even more of our taxpayer dollars looking into all this, which just adds insult to the injury of the deals and of the loss of attention to the important housing matters at hand. Frankly I don’t care if either of these guys got a better rate than I did. Do we really believe that members of Congress don’t get perks?? I do care that everyone else seems to care.
http://www.cnbc.com//id/25243853?__source=yahoo%7Cheadline%7Cquote%7Ctext%7C&par=yahoo
Umm . . . . some of the people who got these loans are trying to bail out Countrywide.
Would you happen to be a liberal?
http://tennesseepolicy.org/main/article.php?article_id=764
I’m certainly more liberal than you, and I’ve called my senators and bitched about the bailouts, and called again and bitched about Dodd not being tossed out on his butt. My senators are democrats, I usually vote for democrats (because most republicans run on the anti-gay platform than the anti-spending platform), and I think Dodd and the bailout is a disgusting example of vote buying. And not even for all that much! Dodd is a cheap date, apparently.
Even if it’s not enough to get him kicked out of congress, it sure as HELL ought to be enough to get him off the banking committee.
Also, I’m positive the reason this isn’t being trumped by the republicans is that they’re just as dirty. I find it hard to believe only 6 congress critters were on the cheap mortgage take. I’d bet it’s closer to 50% if you check the books of every member of congress.
txchick, you are relentlessly partisan, and consequently I dismiss your political posts. You’re almost as bad as aNYdj and his chickypoo rants.
Neither political party is anybody’s friend. Vote for individuals, hope for the best, and vote against them next time around when they disappoint.
‘txchick, you are relentlessly partisan, and consequently I dismiss your political posts. You’re almost as bad as aNYdj and his chickypoo rants.’
Ah, those WERE the good old days, weren’t they? ‘Chickypoo’.
Alas, aNYdj has not mentioned chickypoos ever since the lovely time when me and vermontergal teased him about it, and I told him if he ever saw ME, a live chickypoo prancing about in full surround sound, why, he would just flop back in utter outrage, and then vermontergal and I discussed our pretty shoes, and if we should paint our toenails pink with a blue heart, or blue with a pink heart, and if having fluffy blonde hair confers chickypooness, and if so, what’s the gradation level, and serious chickypoo subjects like that…he did take our good-natured teasing with humor and grace, though, which was nice, and made me fond of him.
Where IS aNYcdj? Bring us some chickypoo comments, man!
Do you care if the $300 bn lender bailout turns out to be (in part) a quid pro quo for special deals from Countrywide to Senators?
Hey, catch the moonrise tonight - Ponzo illusion full moon.
http://science.nasa.gov/headlines/y2008/16jun_moonillusion.htm?list1043536
I was watching the moonrise last night over Phoenix very cool looking.
This is a couple of days old, but if it was posted in Bits, I must have missed it.
Feeling the Pinch: Nevada’s brothels hit hard times
In Nevada, the world’s oldest profession has been very lucrative. In a typical year, legal brothels generate about $50 million in total revenue and have an economic impact of about $400 million on the state. But in the last 18 months the industry’s cash flow has taken a dive. Why? Like other businesses around the country, bordellos throughout the state are feeling the pinch of rising gas prices and a weak economy.
I thought “vice” (no judgement here!) was generally pretty recession-proof. As in, people need their alcohol/etc to get through a hard recession.
So, I’m surprised. Or maybe sex isn’t as helpful a drug for getting through economic downturns as alcohol is?
Editorial suggestion:
“As in, people need their alcohol/etc to get
through ahard through a recession.”I don’t need alcohol to get hard….speak for yourself.
I don’t need a recession to drink alcohol :-).
That’s just sad. Poor skint fellows–probably having to resort to chatting up their wives.
You know its interesting. We have the pincer like movement here. Fleeing higher prices people move to the edge of subburbia and then get squeezed by rising gas prices.
Interesting.
So, gas consumption goes up because people are driving farther.
Kind of figure the monetary inflation the Fed is causing (perhaps in an overall deflationary enviroment) is flowing into commodities futher exasperating prices.
Seems like the end game for debt for a while. Can’t move because people are trapped by high prices or negative equity. Can’t commute because of high costs. Fed making even more unservicable debt while holding on to bad debts (a la Japan).
Oh well. See how many high efficiency cars squeeze on to the road over the next couple of years while SUVs become dust collectors.
Just wondering how similar the Fed picking up Bear Sterns bad debt is similar to what the Japanese banks did.
Not to mention what the presidential candidates are proposing. Seems like Obama (assuming he doesn’t screw this up) wants to throw lots of money into public works. Similar to Japan again.
Finally the Fed seems to be commited to low rates to assure price stability. And every day we hear about people taking money to Europe to get better yield. So, we have a carry trade going on.
There you are folks. We are very nearly in the same deflationary spiral that Japan went through.
20 yrs of price destruction.
What you describe is the psychology of deflation.
People often claim that Japan never experienced deflation because the base money supply never collapsed (in fact, it increased.)
However, that’s not what deflation in a fiat system is. The extra money will go towards a carry trade while the balance sheets (both household and corporate) get deleveraged and repaired.
That’s deflation (= credit destruction.)
“…..while the SUVs become dust collectors……..”
Maybe not. If things come to pass as predicted on this blog, a lot of people are going to be living out of their vehicles. I’d much rather live out of a Chevy Suburban than a Civic or a Prius.
Fearless prediction: If one of the Big 3 go down, expect a few of the import manufacturers to be run out/abandon the US market. (Especially the “luxury brands”)
Their strongest markets (California, Northeast corridor) are also among the places that are lining up to take the worst hits economically, when the excrement hits the air circulator.
Who? Porsche, Audi, MB, Nissan/Infiniti, Acura
BMW has the new “1 Series” coming out at about the right time.
RE: BMW has the new “1 Series” coming out at about the right time.
Panned by the auto pundits as drastically overpriced @ $36k.
I am wondering if there is any way to track and post here on who votes for this bailout bill?
Wednesday, June 18, 2008
Senator Christopher Dodd Implicated In Mortgage Scandal
Posted by: Eric Ames @ 10:11 AM
Senator Christopher DoddSenators Christopher Dodd (D-Conn.) and Kent Conrad (D-N.D.) have been implicated in a mortgage scandal involving Countrywide bank. This is obviously a touchy issue considering that Dodd is the chairman of the Senate banking committee, it is an election year and a $300 billion lender bailout is supposed to be voted on today in the Senate.
“Implicated”? That’s the most that will be done? I think there will be several “I” words used in relation to Sen. Dodd very soon: impeached and indicted.
Follow-up from situation at end of March 2008 with Cali RE cuz who was asking for $60K (the one with the fancy talking car who had these grand plans to squire RE investors around in - her lawyer partner has since disappeared). I actually thought the situation had gone away.
She has a scheme for an export/import biz, which has appraently worked on a small scale.
________________________________________________________
So, I am turning to you again, If you could lend me any amount. I am
trying to raise $30000 for now, I project to pay you in a year, so I can roll over the capitalization. If things get better, I will pay you sooner. $30000 will give me breathing room, since about $6000 will go to advance show fees, in order for me to save a spot in the shows, etc.
I am a one person operation, so this is the best I could do for now. I do hope you can extend me some kind of help and relief.
I have most details all figured out, I just need the cash to make it work.
____________________________________________________________
TWO HOURS after getting this email, she calls the house - wife answers.
When can you send the money?
Well, we may be moving, changing jobs, and buying a new car since [my minivan] is 17 years old…
Well, that’s very nice when can you send the money?
I [wife] have to have a breast biopsy and it may be cancer, we may lose some medical coverage with job change and there will be medical expenses…
Well, that’s too bad, when can you send the money? Oh, I don’t want to take any money out of MY IRA, but [myself] or [brother] can do that, since you have so much. Also, it’s a bad time to try to sell my house [in California]. You could take out a loan against the house you already own (free and clear).
Wife just hung up.
____________________________________________________________
My father (family patriarch) has cut her off. My brother and his wife probably will cash out part of IRA because she helped him adopt his children. Until Jeff Cooper makes me rich, I’m not doing anything!
Stand firm, halifax…
Wow, the story above makes her sound just like an addict. Or maybe I should say “just like any OTHER form of addict.” Sounds like she got addicted to easy money.
Wife is standing firm for me..I can often be ‘rolled’ with a sad story.
Why do all the lame asses end up in CA ? Living large and telling big tales but broke, just broke. One thing I don’t miss about Cali is all the scammers and their BS stories.
no money she can cash out her own investments ( the house haha ) if its such a great idea. maybe she should try prosper ?
I’ve traveled enough to know that CA is far from having a monopoly on lame asses. Not to say we don’t have plenty, but “all” is more than a bit of hyperbole.
Yeah. There’s PLENTY of stupid to be found, all over.
On the other hand, CA does seem to produce an especially brilliantly-hued and sqwacky variety of stupid.
Oh, now I feel conflicted.
There is one from TX in the WH.
So the ‘all of them end up in Ca” is kinda a long stretch, doncha think, Cactus?
Just sayin…
Jeff Cooper can make me every ounce of gold in the universe and I still wouldn’t lend to any cousin with a set big enough to ask me (and everyone else in the family) for $90K in loans.
And given her biz history, I don’t think it would be a loan. My brother has raised the point about tax implications of ‘gifting’ or a ‘loan’, especially for 50 or 60 large…who declares what?
If the loan is at a reasonable interest rate it can be considered such. Since this is a family transaction, you can’t pass it off as a cheap loan. Technically, if it was a loan at a “low” interest, the difference of what it should have been (I think there are some charts to determine what that is) is a gift. Gift receivers are not taxed, gift givers are.
It’s time for you to cut her off at the knees too so she’ll stop bugging you guys. You have enough going on.
I’ll just have to suck it up and confront her. It’s not going to pretty. It’ll be like when she lost a bunch of porcelain & glass merchandise during the Northridge earthquake.
I’m getting chest pressure from all of this.
Why were the responses your wife gave not “Go f-ck yourself” every time she asked about the money?
Hali, I’m going to focus on what appears to me to be the only important thing here. Which is, good luck and good wishes for your wife. I hope this biopsy you mentioned ends in louds sighs of relief for you and your wife.
As for the cousin, what? Jeeze. Every family has a loser. Only one, if they’re lucky. Enjoy her comedic frantic loser-activities until they get annoying and then just ignore her, is my advice.
Thanks - last week, she wanted me to take time off to go out with the guys and see “Zombie Strippers” (?) at the local movie-pub (the ex-porn star in the movie is after my time, so I don’t know what she’s known for) - don’t have too many nights off. Now i’m rearranging schedule because her surgery is that week…
oh for crap’s sake–she’s something else.
I like that your wife hung up. “No” is a complete sentence—as is the sound of the dial tone in your ear.
Thanks for the comments!
My wife was too flabbergasted to give the SFBB response.
I did consider cashing in some PMs earlier this year to send her 15-20G, but just couldn’t bring myself to do it (and I hadn’t even signed up with Jeff Cooper yet).
She’s 50y and this is just too much.
Even a BIL, who has joined the Peace Corps and went to one of the -stans to avoid paying back student loans and is now scamming the system to get a taxpayer-subsidized Masters in Economic Development, wants to start an Ex-Im biz from the -stan for rugs to sell in the US (too morally superior to sell JWBlack in the -stan for 1000% profit), is a total ‘Gen X’ mooch (29y, has parents pay his taxes, his car insurance, his car repair, his car even - ‘I’m going to grad school now’), and says “if you’re not buying lunch or dinner, why should I meet you” - I don’t get the feeling of “Always Be Closing” that cuz conveys.
Halifax,
I wish you and your wife all the best. The tests themselves are stressful, so please do not allow anyone to add aggravation to your lives.
Your wife is right, hang up on the cousin, ignore her emails, and hope she decides to cut you out of her life. It could only be a plus for you.
all best wishes.
Coup d’Gas
This is for Lost…big dinosaur find in Utah. Alert the Foreclosure dogs…
http://www.nytimes.com/aponline/science/AP-SCI-Dinosaur-Find.html?_r=1&oref=slogin
It’s all good here in Big Dump.
http://www.dallasnews.com/sharedcontent/dws/bus/stories/061908dnbizmortgagefraud.169e45b6.html
http://www.forbes.com/2005/11/01/oil-prices-1861-today-real-vs-nominal_flash.html?feed=rss_news
OIl prices 1861 to present. Nice graph.
its obviously going down, or the chart would be taller.
crudely yours,
double down derivative driller holding notso liquid paper.
I only trade when there is liquidity, mucho liquidity.
Only when I know I have an exit.
I got caught in illiquid positions in Russia and I have never and will never get back into the same crap again.
The US market is acting like Russia in 1997. Third world economics in debt up the whizzer and looking for somebody to bail them out.
I hope all is going well Voz! GO Westport, tonight it is Lienie’s …tomorrow get ready for a weekend of 4 -wheeling through the Porkies. In 2 weeks send my son to Afghanistan. (Ready Reserves).
I went back long DUG this afternoon. October calls.
wow, check out chart #3
http://finance.yahoo.com/tech-ticker/article/28603/Why-Consumer-Spending-Is-a-Slow-Motion-Train-Wreck?tickers=itb
GOP Congressmen Call for Probe Into Countrywide Loans
by FOXNews.com
Wednesday, June 18, 2008
Sens. Kent Conrad, left, and Chris Dodd, right, have been accused of benefiting from favorable loan rates from a controversial lender. (AP Photo)
Two Republican congressmen are calling for a probe into alleged sweetheart deals by a controversial mortgage lender, after ties by a Barack Obama aide to Countrywide Financial Corp. sparked questions about other arrangements with some members of Congress.
Reps. Darrell Issa of California and Mark Souder of Indiana called for the investigation in a letter to Rep. Henry Waxman, chairman of the House Oversight and Government Reform Committee. They said a probe is needed to make sure “tainted” officials recuse themselves from weighing in on legislation favorable to mortgage lenders.
all i can say is, its about time someone is throwing that issue out into the MSM.
Hopefully this will gain SOME traction. I don’t trust either side to ‘do the right thing’ here.
The race to bail proceeds apace, despite the Countryside issue.
Senate leaders have housing rescue bill deal
Wed Jun 18, 2008 12:21am BST
By Patrick Rucker and Kevin Drawbaugh
WASHINGTON (Reuters) - U.S. Senate leaders have agreed to a bipartisan bill to establish a $300 billion rescue fund for troubled mortgages and a new regulator for Fannie Mae and Freddie Mac, lawmakers said on Tuesday.
The legislation was expected to be considered by the full Senate within days, with lawmakers keen to deliver a final bill to President George W. Bush by July 4.
Rep. Barney Frank, chairman of the House of Representatives Financial Services Committee, in an interview with Reuters called the Senate bill “good progress.”
Special Shout Out to Truckers!
When I zoom past the big rig drivers, they are driving so slow and being more curtious. I feel a small sadness for these guys who are totally being effed over in all of this.
Now I will wear shorter skimpier outfits just to be friendly back.
Hi truckers, keep on truckin’ and thank you for everything.
Interesting that you post about truckers, Ouro.
Since my LL took the washer/dryer (should be outta here soon), I spent my first couple of hours in a darnlaundromat since I was in college. Can’t say I missed it.
So…a trucker was there, and he asked about my vehicle, did I get out into the desert much, blah blah blah, then we started talking about gas prices and a possible strike. He said there’s lots of chatter on the CB about it, but he doesn’t think it will happen.
It was an interesting conversation until he asked for my cell phone number. Mormon boy, too, probably has a wife and kids.
*^&%*$#%$ truckers, king of the road my ass…
That’s what you get for being so cute, losty. Next time be less cute, or else bring all your hairy slobbering rescue dogs, what, like 20 of them by now, I expect, along with you to the laundromat. They can eat anyone who gets annoying, or just sit on them and lick them into submission.
BWAHAHAHA!!!
Nah, I went home and realized I had a $100 bill half-hanging out of my shirt pocket. I’m bad about just stuffing money into my pockets.
I have a Q for you, Oly - how many rescue dogs are the equiv of one Bigfoot?
Well, losty, it depends. It’s one of them engineery technical equations, so you’ll be right at home here.
1. How big are the dogs?
1.b. How farty are the dogs? (If any of them are labs, that factor increases by 2.)
Then we must ascertain:
2. How stinky is the Bigfoot?
2.b. How irritating is the Bigfoot, as measured, per incident, by how many times the Bigfoot complains about being shot at by the neighbors, when he tries to steal their goats?
2. c. How many goats has the Bigfoot stolen? Were they cute goats? Or did YOU really steal the goats?
3. And, does the Bigfoot insist on wearing stupid hats that he made out of moss and twigs? Because that is the most annoying thing of all.
These are important details, clearly. Where is the balance to be found? It’s tricky, but I’m confident you’ll solve it, though, a smart money-flashing chick like you.
ROTFLMAO!!!
Laughing so ahrd I can’t even type a reply - fl;ippin kyboard…
You are so cruel!
lol
‘I feel a small sadness for these guys who are totally being effed over in all of this. Now I will wear shorter skimpier outfits just to be friendly back.’
Well, ouro, you seem to have recovered from your recent ‘weltschmerz’ quite nicely. I was just going to write you a cheery and bracing post, too. But I bet you’re busy pawing through your closets for scanty garments right now, giggling and so on, and can’t be bothered.
Geez, Oly, I had to look that one up:
Weltschmerz (from the German, meaning world-pain or world-weariness).
Yeah, Ouro, weren’t you just worried about being a woman in a world of uncertainty? Glad you’re feeling better.
As for me, well, I’m feeling a bit of weltschmerz…(not really, I just like that word).
Lost and oly;
My mom said I had that word, “weltschmerz”…after 911.
I did.
My dad’s mom was german and jewish, and mom’s side is scots or scottish. So I am frugal and a worrier. As a matter of fact the worse stuff gets, the more guilty I feel. Why?
I rent a pretty home, have lovely dogs, a checking account, and a paid for car! . I will survive fine, but chaos affects me.
How ’bout you guys? Anybody else skitish?
Not skittish, but am Scottish, like you.
Why worry, waste of time when you could be drinking Chateau Rothschild in the cellar! Right?
We all suffered from weltschmerz after 9-11, ouro, because that’s a reasonable response to craziness.
Really? My grandma’s German, too! That’s why I’m blonde, adore beer and big black shiny boots and gleaming well-oiled guns, and spend my time marching through the world criticising people with numbered memos. Maybe we’re twins!
‘Weltschmerz (from the German, meaning world-pain or world-weariness).’
I’m glad you had to look it up, losty, because maybe that means you haven’t felt it much. Those Germans! They have a word for everything. As long as the word is polysyllabic with about 50 fricatives and 30 vowels, and as long as the word defines suffering, and/or guilt, and/or long-drawn-out spiritual torment, and/or denial of just hanging out, or a combination of those things.
That’s why Germans make such good beer, is my theory. They have to. They must drown out the weltschmerz, and all the helpful cruel, and numbered, criticism from their bossy grandmas.
How about some pics for the HBB crowd, OV??
Ouro or Oly? Ouro’s already on there, Oly’s not. C’mon, Oly.
Or at least send us a photo of those magenta rhinestone boots!
Oh Blano,
I have a list and you are on it:
Hoz
Voz
Chick
Oly
V
Paul in jax
Joey in cal
jas
Pudie cat
and everybody who has a city or state in their names.
I offered to do a houses and people website for ben exclusively and free. So you guys need to help me help ben.
Did you see the baby armadillos tx?
http://s292.photobucket.com/albums/mm1/anngogh/?albumview=slideshow
AnnMoorman@att dot net
Totally and unashamedly off topic:
Shoe, you hear about the big dino find by Hanksville? It’s BIG (suaropods).
UPDATE 1-U.S. mortgage refinance applications plunge -MBA
Wed Jun 18, 2008 12:31pm EDT
…
Yields on fixed-income securities that drive mortgage rates have surged this month as a chorus of central bankers, led by Federal Reserve Chairman Ben Bernanke, shed light on the potential for faster inflation in the months ahead. Benchmark 10-year Treasury note yields have climbed almost a full percentage point over the past three months.
“The increase in mortgage rates is decidedly negative for the housing outlook,” Michelle Meyer, an economist at Lehman Brothers in New York, said in a research note. “Higher rates strain affordability, suggesting home prices may have to fall further to provide an offset.”
The increase in mortgage rates is removing one of the few supports to the U.S. housing market that has been in decline since 2006. Costlier interest rates have hurt the outlook for U.S. homebuilders that have been trying to dig themselves out from burgeoning inventories of unsold homes, the National Association of Home Builders said on Monday.
Rising angst over housing has led U.S. Senate leaders to agree on a bipartisan bill that would establish a $300 billion rescue fund run by the Federal Housing Administration for troubled mortgages.
A non bottom caller has his say:
Housing Market Monitor
Upturn in Housing Starts Stops
June 18, 2008
By Dean Baker
“The interest rate on 30-year mortgages jumped to 6.57 percent last week.”
There was a surprising one-month jump in new housing starts in April, which led some to believe that the slump had reached bottom. The May data show a 3.3 percent drop from downwardly revised April numbers, pushing starts to a new low for the downturn. The uptick in April had been driven by an increase in starts in multi-family units. This increase was largely reversed in May, as multi-family starts fell 10.5 percent.
…
In short, there is very little reason to expect any turnaround in the housing market any time soon. The continuing plunge in house prices will accelerate the pace of foreclosures in the second half of the year as the number of homeowners with negative equity soars and the extent to which these homeowners find themselves underwater increases. Homeowners may struggle to meet the mortgage on a home in which they are $10,000 underwater at the moment. They are less likely to make sacrifices to keep a home on which they are $100,000 underwater. Many more homeowners will find themselves in this situation by the end of the year.
With more foreclosed homes coming on the market, higher mortgage interests, and a weakening labor market, it is virtually certain that price declines will continue through 2008 and into 2009.
And on that happy note I am going to call my cousin and tell her she can borrow sixty thousand big ones!
No interest.
On pesticide spraying in the Bay Area:
http://sfbay.craigslist.org/pen/rfs/724478406.html
They did a similar thing in Mountain Village (Telluride) last spring with moths. Don’t know if the pesticide was EPA approved or not. Caused quite a stink.
For all of you who wanted to place their assets (read gold) in a safe place like Switzerland, say “good night, Gracie”.
Kieber Sale of Liechtenstein Data Triggers Backlash (Update1)
Kieber, a 43-year-old computer technician, triggered probes in 14 countries when he handed over computer disks containing about 1,400 names, prompting France to pledge a crackdown on tax havens when it assumes the European Union presidency next month. Germans alone have $485 billion of undeclared assets deposited abroad, according to the country’s BBW research institute.
http://www.bloomberg.com/apps/news?pid=20601109&sid=a00_3b_J9Ny4&refer=home
OT, however which one of you is hennie Kieber, who by the way is in the witness protection program, because a number of people, including bankers want to erase him.
“Kieber is in a witness protection program because bankers, LGT clients and even drug dealers who had money in Liechtenstein are trying to find him, says Blum, who declined to identify the country that is protecting his client.
“My two interests are keeping him alive and making sure everybody in this chain knows he’s the good guy in this case,” says Blum, a former U.S. Senate investigator and expert in offshore money laundering.
The Senate’s Permanent Committee on Investigations has issued subpoenas in conjunction with a probe of possible tax evasion by Americans with accounts at Liechtenstein banks. ”
http://www.bloomberg.com/apps/news?pid=20601109&sid=a00_3b_J9Ny4&refer=home
Ethics Panel To Examine Senators’ Loans
The Senate ethics panel will examine mortgage loans given by Countrywide Financial Corp. to Sens. Kent Conrad and Chris Dodd after news reports that the Senators were given favorable terms not available to all lenders. The Wall Street Journal reports that Sen. Kent Conrad “said the Senate Ethics Committee will look into mortgage loans he received from Countrywide Financial Corp.” and that “the ethics panel is ‘welcome to all the documents I have.’” Dodd “told reporters Tuesday he would be happy to cooperate with any inquiries from the ethics committee.” The Washington Post notes Dodd said “he knew he was part of a ‘VIP’ mortgage program offered by Countrywide Financial, but he said he was not aware that the privilege included waiving fees that regular customers must pay to obtain lower interest rates.” Countrywide waived about $2,000 on one loan and $700 on another.
Countrywide’s Love Affair with Congress
By Jesse A. Hamilton
on June 18, 2008 5:05 PM
I had called the Center for Responsive Politics yesterday for the ongoing coverage of Sen. Chris Dodd’s relationship with mortgage lender Countrywide Financial Corp., and today they steered me toward an informative report they’ve posted on their OpenSecrets.org.
Plenty of information there about Dodd’s history of donations from Countrywide. [He probably won't be celebrating their finding that he was the company's highest grossing senator in their two-decade search.]
State GOP Chief: Dems Should Speak Up On Dodd
By Jesse A. Hamilton
on June 18, 2008 8:11 PM
Chris Healy, the chairman of the state’s Republican Party, has been putting out a lot of press releases since Sen. Chris Dodd was first implicated in a VIP program that may have given him special privileges with his 2003 home-loan refinancing with Countrywide Financial Corp.
Healy thinks his Democratic colleagues in Connecticut should be up in arms.
I wonder how this senator’s comments make CFC shareholders feel?
US Rep Frank: Hopefully There Will Be No Countrywide Soon
Dow Jones
June 18, 2008: 05:20 PM EST
WASHINGTON -(Dow Jones)- House Financial Services Chairman Barney Frank said Wednesday he doesn’t plan to have oversight hearings over favorable loans offered by Countrywide Financial Corp. (CFC) to at least two U.S. lawmakers because the firm is being acquired.
“The best thing for all of us is for Countrywide to just disappear,” Frank told reporters, noting that the firm’s acquisition by Bank of America (BAC) is expected to close in the near future.
“If Countrywide were a continuing entity we’d have to look at it, but they’re going out of business,” he added.
Godzilla must feel like he threw $11,000 down the drain on Frank campaign contributions.
Countrywide Contributions: These members of the 110th Congress have received money since 1989 from the company’s PAC or from individuals associated with the mortgage lending giant.
Name / Total Contributions
Rep. Ed Royce (R-Calif) $37,500
Sen. Christopher J. Dodd (D-Conn) $25,000
Rep. Paul E. Kanjorski (D-Pa) $24,250
Rep. Spencer Bachus (R-Ala) $22,000
Sen. Barack Obama (D-Ill.) $20,400
Rep. Brad Sherman (D-Calif) $19,500
Rep. Pete Sessions (R-Texas) $18,750
Sen. Tim Johnson (D-SD) $17,000
Rep. Elton Gallegly (R-Calif) $14,550
Rep. Joseph Crowley (D-NY) $14,500
Sen. Hillary Clinton (D-NY) $14,400
Rep. David Dreier (R-Calif) $12,500
Sen. John Kerry (D-Mass) $12,080
Sen. Dianne Feinstein (D-Calif) $12,000
Rep. Tom Feeney (R-Fla) $11,000
Rep. Barney Frank (D-Mass) $11,000
Rep. David Scott (D-Ga) $11,000
Rep. Howard L. Berman (D-Calif) $10,000
Sen. John McCain (R-Ariz) $9,950
Rep. Jeb Hensarling (R-Texas) $9,000
Sen. Tom Carper (D-Del) $9,000
Sen. Kent Conrad (D-ND) $9,000
Sen. Elizabeth Dole (R-NC) $9,000
Rep. Richard Baker (R-La) $8,000
Rep. Charlie A. Gonzalez (D-Texas) $8,000
Rep. Deborah Pryce (R-Ohio) $7,500
Sen. John E. Sununu (R-NH) $7,500
Rep. Lucille Roybal-Allard (D-Calif) $7,200
Rep. Shelley Moore Capito (R-WVa) $7,000
Rep. Steven C. LaTourette (R-Ohio) $7,000
Rep. Rick Renzi (R-Ariz) $7,000
Rep. Patrick J. Tiberi (R-Ohio) $6,750
Rep. Gregory W. Meeks (D-NY) $6,500
Sen. Richard C. Shelby (R-Ala) $6,300
Rep. Sam Johnson (R-Texas) $6,000
Rep. Gary Miller (R-Calif) $6,000
Rep. Dennis Moore (D-Kan) $6,000
Rep. Melvin L. Watt (D-NC) $6,000
Sen. Robert F. Bennett (R-Utah) $6,000
Rep. Judy Biggert (R-Ill) $5,500
Rep. Walter B. Jones Jr. (R-NC) $5,500
Rep. Patrick McHenry (R-NC) $5,500
Rep. Scott Garrett (R-NJ) $5,000
Rep. Darlene Hooley (D-Ore) $5,000
Rep. Stephanie Tubbs Jones (D-Ohio) $5,000
Rep. Nancy Pelosi (D-Calif) $5,000
Sen. Wayne Allard (R-Colo) $5,000
Sen. John Cornyn (R-Texas) $5,000
Rep. Melissa Bean (D-Ill) $4,950
Rep. Joe Baca (D-Calif) $4,500
Sen. Jim Bunning (R-Ky) $4,500
Rep. Howard P. “Buck” McKeon (R-Calif) $4,250
Rep. Michael N. Castle (R-Del) $4,056
Rep. Ginny Brown-Waite (R-Fla) $4,000
Rep. William L. Clay Jr. (D-Mo) $4,000
Rep. Steve Israel (D-NY) $4,000
Rep. Grace Napolitano (D-Calif) $4,000
Rep. Nydia M. Velazquez (D-NY) $4,000
Sen. James W. DeMint (R-SC) $4,000
Sen. Dick Durbin (D-Ill) $4,000
Rep. Mary Bono (R-Calif) $3,750
Rep. Xavier Becerra (D-Calif) $3,500
Rep. Carolyn B. Maloney (D-NY) $3,500
Rep. Charles B. Rangel (D-NY) $3,500
Rep. Edolphus Towns (D-NY) $3,500
Sen. Jack Reed (D-RI) $3,200
Rep. Brian P. Bilbray (R-Calif) $3,000
Rep. Jim Gerlach (R-Pa) $3,000
Rep. Ruben Hinojosa (D-Texas) $3,000
Rep. Barbara Lee (D-Calif) $3,000
Rep.Jim Matheson (D-Utah) $3,000
Rep. Jerry Weller (R-Ill) $3,000
Sen. Norm Coleman (R-Minn) $3,000
Sen. John Ensign (R-Nev) $3,000
Sen. Joe Lieberman (I-Conn) $3,000
Sen. Ben Nelson (D-Neb) $3,000
Rep. John Boehner (R-Ohio) $2,500
Rep. Ken Calvert (R-Calif) $2,500
Rep. Emanuel Cleaver (D-Mo) $2,500
Rep. Elijah E. Cummings (D-Md) $2,500
Rep. Tom Davis (R-Va) $2,500
Rep. Jay Inslee (D-Wash) $2,500
Sen. Kay Bailey Hutchison (R-Texas) $2,500
Sen. Patty Murray (D-Wash) $2,500
Rep. Adam Schiff (D-Calif) $2,250
Rep. Gresham Barrett (R-SC) $2,000
Rep. Roy Blunt (R-Mo) $2,000
Rep. Dan Boren (D-Okla) $2,000
Rep. John Campbell (R-Calif) $2,000
Rep. Artur Davis (D-Ala) $2,000
Rep. Maurice Hinchey (D-NY) $2,000
Rep. Sheila Jackson Lee (D-Texas) $2,000
Rep. Eddie Bernice Johnson (D-Texas) $2,000
Rep. Dennis J. Kucinich (D-Ohio) $2,000
Rep. Silvestre Reyes (D-Texas) $2,000
Sen. Christopher S. ‘Kit’ Bond (R-Mo) $2,000
Sen. Mike Crapo (R-Idaho) $2,000
Sen. Mike Enzi (R-Wyo) $2,000
Sen. Chuck Grassley (R-Iowa) $2,000
Sen. Jon L. Kyl (R-Ariz) $2,000
Sen. Blanche Lincoln (D-Ark) $2,000
Sen. Robert Menendez (D-NJ) $2,000
Sen. Harry Reid (D-Nev) $2,000
Rep. James E. Clyburn (D-SC) $1,500
Rep. Jerry Lewis (R-Calif) $1,500
Rep. Mike Ross (D-Ark) $1,500
Rep. Lee Terry (R-Neb) $1,500
Rep. Robert Wexler (D-Fla) $1,500
Rep. Heather A. Wilson (R-NM) $1,500
Sen. Evan Bayh (D-Ind) $1,250
Sen. Sherrod Brown (D-Ohio) $1,250
Rep. Michele Marie Bachmann (R-Minn) $1,000
Rep. Charles W. Boustany Jr (R-La) $1,000
Rep. Eric Cantor (R-Va) $1,000
Rep. Ander Crenshaw (R-Fla) $1,000
Rep. Henry Cuellar (D-Texas) $1,000
Rep. Geoff Davis (R-Ky) $1,000
Rep. Lincoln Davis (D-Tenn) $1,000
Rep. Vito Fossella (R-NY) $1,000
Rep. Jesse Jackson Jr. (D-Ill) $1,000
Rep. Carolyn Cheeks Kilpatrick (D-Mich) $1,000
Rep. Pete King (R-NY) $1,000
Rep. Ron Lewis (R-Ky) $1,000
Rep. Tim Mahoney (D-Fla) $1,000
Rep. Kenny Ewell Marchant (R-Texas) $1,000
Rep. Doris O. Matsui (D-Calif) $1,000
Rep. Kevin McCarthy (R-Calif) $1,000
Rep. Randy Neugebauer (R-Texas) $1,000
Rep. Mike Pence (R-Ind) $1,000
Rep. Jon Porter (R-Nev) $1,000
Rep. Tom Price (R-Ga) $1,000
Rep. Laura Richardson (D-Calif) $1,000
Rep. Mike D. Rogers (R-Ala) $1,000
Rep. Peter Roskam (R-Ill) $1,000
Rep. Bobby L. Rush (D-Ill) $1,000
Rep. Jan Schakowsky (D-Ill) $1,000
Rep. Debbie Wasserman Schultz (D-Fla) $1,000
Rep. Ellen O. Tauscher (D-Calif) $1,000
Sen. Barbara Boxer (D-Calif) $1,000
Sen. Sam Brownback (R-Kan) $1,000
Sen. Susan Collins (R-Maine) $1,000
Sen. Pete V. Domenici (R-NM) $1,000
Sen. Orrin G. Hatch (R-Utah) $1,000
Sen. Johnny Isakson (R-Ga) $1,000
Sen. Richard G. Lugar (R-Ind) $1,000
Sen. Lisa Murkowski (R-Alaska) $1,000
Sen. Jay Rockefeller (D-WVa) $1,000
Sen. Arlen Specter (R-Pa) $1,000
Sen. Deborah Ann Stabenow (D-Mich) $1,000
Sen. Ted Stevens (R-Alaska) $1,000
Rep. John M. Shimkus (R-Ill) $750
Rep. Loretta Sanchez (D-Calif) $700
Sen. Bill Nelson (D-Fla) $700
Rep. Maxine Waters (D-Calif) $600
Rep. Robert E. Andrews (D-NJ) $500
Rep. Jeff Flake (R-Ariz) $500
Rep. Doc Hastings (R-Wash) $500
Rep. Steny H. Hoyer (D-Md) $500
Rep. Ric Keller (R-Fla) $500
Rep. Ron Klein (D-Fla) $500
Rep. Joe Knollenberg (R-Mich) $500
Rep. Jim Langevin (D-RI) $500
Rep. Ron Paul (R-Texas) $500
Rep. Earl Pomeroy (D-ND) $500
Rep. Dave Reichert (R-Wash) $500
Rep. Tom Reynolds (R-NY) $500
Rep. Paul Ryan (R-Wis) $500
Rep. Dave Weldon (R-Fla) $500
Sen. Max Baucus (D-Mont) $500
Sen. Maria Cantwell (D-Wash) $500
Sen. Lindsey Graham (R-SC) $500
Sen. Chuck Hagel (R-Neb) $500
Sen. John Thune (R-SD) $500
Rep. Frank Pallone Jr (D-NJ) $250
Sen. Daniel K. Akaka (D-Hawaii) $250
Sen. Bob Corker (R-Tenn) $250
Total $731,586
*Based on data available from the Federal Election Commission as of June 2, 2008
Wow , Senator C. Dodds got a bigger amount than most . Better add the additional 60 thousand or more he got from the favorable treatment on the loans and than he really got the most.
The Republican party is apparently the one that is willing to stand in opposition to rewards for financial stupidity.
Housing rescue bill could be slowed by Republicans
By JULIE HIRSCHFELD DAVIS, Associated Press Writer Wed Jun 18, 7:00 PM ET
WASHINGTON - Conservative Republicans in the Senate were seeking to slow the completion of an election-year housing rescue designed to help hundreds of thousands of homeowners avoid foreclosure and boost lawmakers’ standing with voters.
Sen. Tom Coburn, R-Okla., said Wednesday he was working on ways to stop the bill, which he said would “reward stupidity on the part of people who bought homes they couldn’t afford.”
Amid rising foreclosures and growing public anxiety about the sagging economy, Democrats and many Republicans were eager to push the bill through the Senate and could begin voting on it as early as Thursday. They hoped to send the bill to President Bush before Congress breaks for a weeklong July 4th vacation.
However, a group of conservative Republicans, including Coburn, threatened to block the measure in light of allegations that Banking Committee Chairman Chris Dodd, D-Conn., one of its architects, and Budget Committee Chairman Kent Conrad, D-N.D., received preferential mortgages from Countrywide Financial Corp. through a special program for friends of the embattled firm’s CEO.
Nine conservative GOP senators wrote to Senate Majority Leader Harry Reid, D-Nev., requesting that he delay consideration of the housing measure until they could review it and “better understand the allegations and how much Countrywide will benefit from the bill.”
Bravo . Finally some sanity ,or maybe just another show to make it look like the politicians are doing their job .
From ‘Rate Hikes? Not bloody likely, Ben’ by mike Whitney:
http://www.smirkingchimp.com/thread/15347
“…”
“Dollar weakness is at the center of the economic malaise that is generating political instability around the world. Spanish truckers are blocking highways outside Madrid and other parts of the country protesting the spike in gas prices. In Malaysia, at least 2,000 protesters marched through Kuala Lumpur to protest this month’s 41% surge in fuel prices. In Haiti, food riots have broken out over rising price of rice. Countries throughout Southeast Asia have banned rice exports and have begun hoarding for anticipated future shortages. Corn, soybeans and wheat futures are at record highs while many basic crops are threatened with blight, floods and weather-related disasters. “Global inventories are at a 24 year low” according to the US Dept of Agriculture while food aid volumes sunk to their lowest levels in 50 years”. (Financial Times) “The World Bank says now that grain, rice and other staples have become so expensive that 100 million people are on the verge of going hunger, joining the 850 million people who already were malnourished.” (Globe and Mail)
It all started at the Federal Reserve with their whacky macroeconomic gymnastics. Now the global financial system is stuck with the task of wringing out the excess credit created by Greenspan’s low interest policy.”
“A.K. Gupta explains the erratic behavior of the commodities in his article in Z magazine “Market Madness: How Speculators are Manipulating and Profiting from the Global food crisis”:
“One striking aspect of the rising commodity prices is that when charted, they look similar to the Internet stock mania a decade ago or the charts of soaring (and plunging) home prices of late. This is no mere coincidence. One of the main factors in accelerating commodity and food costs is financial speculation. The same Wall Street banks and hedge funds that gave us the stock bubble and the housing bubble are reportedly throwing billions of dollars at the commodity markets, betting they can make a fast buck. One analyst interviewed by the Wall Street Journal estimates that “investors have poured roughly $175 billion to $200 billion into commodity-linked index funds since 2001.” The Journal explained, “As with energy markets a few years ago, pension funds and hedge funds have flocked to grain investments as the supply of farm acreage and crop output shrinks relative to the growing global population and new demands for crops for biofuels and food. Many such investors make predominantly bullish bets,” that is, expecting the price to rise.”
Once opened, Pandora’s box proves very hard to close again.
Regulators Lay Plans for Investment Banks’ Access to Fed Loans
By Craig Torres and Jesse Westbrook
June 19 (Bloomberg) — U.S. regulators are planning how to let investment banks retain access to Federal Reserve loans if the central bank shuts an emergency program in September, two government officials said.
Fed’s tendrils of central command and control over the U.S. financial system to grow under Paulson’s plan.
Paulson To Urge New Fed Powers
Bank Would Help Police Wall Street
By Neil Irwin
Washington Post Staff Writer
Thursday, June 19, 2008; Page D01
Treasury Secretary wants expanded government power over Wall Street
By: Steve Adcock | Submitted on: 06/18/08
EDITORIAL - Treasury Secretary Henry Paulson believes that the Federal Reserve needs new and sweeping power over the control and regulation of Wall Street to “protect the financial system”, according to a recently published Washington Post report.
“Contrary to what Paulson believes, the best solution to societal problems almost always rests with the American people…”
CEOs Predict
Tough Times
For Economy
By KELLY EVANS
June 19, 2008; Page A16
In an increasingly gloomy assessment of the U.S. economy, the officers of major companies expect employment at their companies to decline in coming months and rising costs to pinch their profits, according to surveys released Wednesday.
Rule #1 of sound central banking policy: Don’t make waves!
Fed’s Words Overshadow Its Actions
Word Count: 481 | Companies Featured in This Article: Carnival Corp., Sears Holdings, Starbucks, Circuit City Stores
After deftly navigating a high wire, the Fed seems to have stumbled on the dismount, tripped up by what should be the simplest part of its job: talking.
Having managed the credit crisis with creativity and skill, Ben Bernanke and his cohorts earlier this month announced their new worry was inflation and the dollar — a reasonable concern with oil pushing $140 a barrel.
But the market took them too seriously. Bonds fell, interest rates jumped, and futures markets priced in three rate increases by year’s end.
Try not to catch yerself a falling knife — especially if you are one of the lucky few who qualify for these lower borrowing rates on jumbo loans.
Rates Improve
For Some Loans
On Pricey Homes
By RUTH SIMON
June 19, 2008; Page D1
Months after Congress moved to lower borrowing costs for homeowners in a number of high-priced housing markets, interest rates are finally becoming more attractive on certain types of so-called jumbo mortgages.
The shift could provide a boost to home sales, particularly in some markets on the East and West coasts. But the number of borrowers benefiting from the program is likely to be limited.
Banks Find New Ways To
Ease Pain of Bad LoansDeceive MarketsBy David Enrich
Word Count: 940 | Companies Featured in This Article: Astoria Financial, Wells Fargo, BankAtlantic Bancorp, National City, Wachovia, Washington Mutual, Colonial BancGroup
In January, Astoria Financial Corp. told investors that its pile of nonperforming loans had grown to about $106 million as of the end of last year. Three months later, the thrift holding company said the number was just $68 million.
How did Astoria do it? By changing its internal policy on when mortgages are classified on its books as troubled. The Lake Success, N.Y., company now counts home loans as nonperforming when the borrower misses at least three payments, instead of two.