Bits Bucket For June 21, 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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There was a great article yesterday about how most people (including myself) think erroneously about the extent to which ever-higher miles-per-gallon will save money and reduce fuel consumption. I highly recommend looking at the table. Paying a lot more money for a hybrid version of a vehicle, versus the regular model, doesn’t look like such a great idea to me, assuming the latter gets 20 MPG or better. These are the most pertinent observations from the article:
“U.S. drivers should think in gallons per mile
“Larrick said most people think improvements in miles per gallon are all the same, where a 5 gallon per mile improvement would yield the same gas savings in a car that gets 10 miles per gallon or 20 miles per gallon.
“The reality that few people appreciate is that improving fuel efficiency from 10 to 20 miles per gallon is actually a more significant savings than improving from 25 to 50 miles per gallon for the same distance of driving,” Larrick said.”
What really got my attention is that improving from 10 MPG to 20 MPG saves 500 gallons per 10K miles driven, but improving from 20 MPG to 50 MPG saves only an additional 300 gallons.
The Tables:
http://www.fuqua.duke.edu/news/mpg/table.pdf
The full article (which contains an error in its link to the tables):
http://news.yahoo.com/s/nm/20080619/sc_nm/fuel_efficiency_dc
I suggest to friends that if if they don’t drive all that much then they should look into buying a big car or SUV. The price discounts offered for gas eaters will usually more than make up for the extra gas expenditures.
As usual they don’t listen.
We have a big Lexus that gets 18 in the city and 25 on the highway. The highway is where we put on the vast majority of miles so our average is probably 23 mpg. It’s a much better vehicle for long road trips than a Prius or Cobalt I’ve gotta tell you. Plus we bought it 3 years old at a 55% discount over new. I LOVE lease returns…
Plus some of the new hybrids cost a fortune for repairs. So a few years down the road could be very expensive to maintain.
That’s because people don’t look at total costs. You think How-Much-A-Month-Sally thinks this way?
They’re always fighting the previous war.
Yup, I have tried to make this point many times, it’s just a drop in the bucket compared to the costs of actually owning the car. And, as pointed out, even big jumps in efficiency, at a certain point, don’t matter that much because you’re just not burning that much gas.
I have joked about this a few times, but I may actually go start to look at some larger (gas guzzlers) cars in the next few months. There’s so much hysteria around gas prices that I think I may be able to steal one. If I can buy a car for a huge discount, the fact it burns more gas can very easily be absorbed by the saving for the vehicle purchase.
I actually did a quick back-of-the-envelope calculation.
In Manhattan, if I were so lazy that I called a cab each time I wanted to cross the street, I’d still NEVER be able to make up the costs of buying the car, maintenance, insurance, parking, and gas.
and $300+ a month and $450 for suv’s just for parking in manhattan
Its far worse then people think faster….i went out last night and a night club that has one of the only cabaret licenses in queens is closed up……for those not in NYC you need a caberet license to legally dance in the ciity.
In sunnyside just steps from a subay stop and with lots of free parking after 10pm under the elevated subway…and still closed up.
Down the street at sidetracks, capacity over 200 at 11pm maybe 30 people and no one dancing. I know the dj, and he is good, someone i can learn some new mixes from.
Then a birthday party came in at least 40 people and they all started dancing…without that party a dead club on a friday night……..but still it was less then 1/2 full and no cover….man this place was mobbed last summer and a $10 cover
And i still cant get anyone to give me a chance to dj for free on a friday even happy hour because i dont play rap hip op top 40….I want to try a zydeco rock and blues night…check link…a free dj and still no offers.
Good Info NY….I think this down on the street information is always the best indicator…
RE: a dead club on a friday night
The pubs need to go back to 25 cent 12oz. Bud drafts and a free bus to drive you home at closing.
“And i still cant get anyone to give me a chance to dj for free on a friday”
And what is this telling you…?
My husband drives the full-sized Toyota Avalon, and it gets more than 30mpg highway, and it’s big enough for weekend drives down to the Keys and has an enormous trunk for all of his boxes of legal files that he takes to hearings all over FL. He drives a lot of highway miles, so buying a Camry hybrid, for instance, didn’t really make sense. And the car has a good warranty and has given him no problems in the 2 years he’s had it.
I worked with someone who applied that exact philosophy during the price spike of the late 1970’s here in Australia. He had bought a cheap low-mileage V8 instead of a small car as his first vehicle, and told us that for every dollar extra he spent on fuel he saved five dollars in depreciation costs and interest.
Also, while there are far too many who drive around in the SUV solo, some of us use the capacity. This morning I took a full load of kids from Palmdale to Santa Monica and back. What do you think my passenger miles per gallon was? About 105. (15mpgx7passengers)
The maddening thing was that Cal-trans (aka Cal-tards) had the north bound truck lanes closed at the 5/14 interchange. There was a 3 mile backup at 10am on a Saturday morning? They couldn’t do this work at 3am?
Give me a freakin’ break!
Payback for the prius is 3 years.
http://online.wsj.com/article/SB121322652624466085.html?mod=fpa_editors_picks
It’s true that getting a person out of a giant SUV into a car saves more gas than moving from a small car to a hybrid, but it is not true that hybrids are a bad investment. Buying a hybrid = buying gas futures. People can’t buy and store 5 years worth of gas, but they can buy a car that will use less of it.
“if driven 15,000 miles per year.”
So, if I drive more like 3000 miles per year, does that mean it makes sense for me after 15 years? Love that you had to get about 3/4 of the way through the article to get to the information on the number of miles they assumed you drove per year.
If you drive as little as 3,000 miles a year, you’ll NEVER make up the difference in cost ever.
Not to mention higher maintenance costs, and the opportunity cost of the difference in initial outlay.
Think total costs, people, think total costs. (OK, this crowd already does but still …)
It would never make sense for me anyway. I bought my current car wholesale. Less than $5000 for a 4 year old Ford Taurus (with replaced transmission). Besides, I learned my lesson well from living in NY and NJ. Even if you want to have a car, there is nothing like the protection of being able to walk to work (or public transportation that gets you to work) and essential services like a supermarket. Nothing.
You’re singing my song.
And in most metro areas, I think Zipcar (or equivalent) is the way to go.
How many times do I actually need a car in a year? Four? Five?
The higher maintenance cost issue is a myth.
You have fewer brake repairs because you use the electric motor to slowdown.
Your engine with all it’s moving parts runs less, thus there are fewer engine repairs.
http://www.autospies.com/news/Prius-taxi-paid-for-itself-in-no-time-17638/
In addition(Mr. Grant the Taxi owner),he said the vehicle costs only one-third the usual expenses on maintenance over a 24-month period.
His current Prius recently surpassed 400,000 kilometres with no hybrid component failures.
Yes this guy runs his all day long, but the benefits in terms of repairs are the same if you drive less just accrued over a longer period of time.
Then there is the resale value.
There is an insight on ebay with 217,000 miles with bids of 7500 dollars. The car was 20k new. Meanwhile my brother says his diesel druck in Anchorage has dropped 10,000 dollars in resale price over the last 2 months as diesel is 5 bucks a gallon. There are two 2001 prius models w 140k miles with buy it now prices of 9-10,000 dollars. New these were around 20k.
Do people really think the price of gas is going to decrease in the long run?? People also need to factor in all the other costs of our oil addiction, war in Iraq, security for Saudi Arabia, terrorism.
I agree if you drive 3000 miles a year your money is better spent elsewhere, insulate your house, but the average mileage per driver in the US is 15k a year.
How does that compare with the ‘96 Jetta I bought earlier this year for $1200?
It gets 37mpg and substitutes for my Grand Prix at 25mpg. ($900)
When I can get a Prius in operable condition for those prices then maybe I’ll bite.
They’re also making one humongous assumption, that is,that you’re going to buy a new car anyway. Their comparison is looking at the differences in hybrid vs. non-hybrid for shiny new models.
What if you include the options of holding on to your existing car (albeit inefficient), or buying a higher mileage used vehicle?
We have a 1993 Isuzu Rodeo, costs us almost nothing to own. It only was getting about 18 MPG highway. At 10,000 miles per year, if I could cut my fuel costs in half at $4.00/gal, we’d save about $1200/year. So, if I simply want to buy a different vehicle to save on operational costs, and I want my choice of vehicle to pay back in about 3 years, I’m looking at spending no more than $3-4K. This assumes of course that my present vehicle stays in good running condition. If not, then the calculations will change, but they still will never get me to an expensive new vehicle as my least cost option.
So I decided to try driving with a feather-weight foot on the gas pedal, to see what difference it would make. Our last tank netted almost 23 MPG.
Think I’ll hold on for a while.
“So I decided to try driving with a feather-weight foot on the gas pedal, to see what difference it would make. Our last tank netted almost 23 MPG.”
I’m forever trying to get my wife to use cruise control on the highway, though I do 80-90% of our highway driving. She is afraid of it, unfortunately. When I’ve been able to measure, the difference in mileage is 23 MPG for me and 20-21MPG for her. Constant speed driving apparently is a very effective means of boosting mileage by maybe 10% or so. That said, I’ve heard dealer stories about the new “adaptive” cruise that changes the speed for you and that there is some danger your mind begins to believe the car is driving itself, slowing your reaction time for braking.
Ditto Chip and Shoe,
I have a 98 Jeep Cherokee with 230K miles on it. I have replaced:
Radiator
Alternator
Cat. converter and muffler
Shocks
Regular oil changes, tires, brakes
Of those, I did the alt, cat, muffler, and shocks myself probably saving $500-$750 in labor cost.
It gets just over 20 mpg and instead of trying to be the first guy home on the weekends, about a year ago I decided to dial it back to 65mph and see how bored I got with driving “slow.” As it turns out, I’m much more patient now and don’t get p!ssed when people are driving slow in front of me. As a result, it seems like there are LESS people on the road due to all the 75mph’ers passing me and getting out of the way.
iftheshoefits,
Hear, hear!!!
My cost to operate threshold (minus fuel) is $0.10/mile. Before I buy a car I run the numbers to decide if it will make the threshold. It’s not easy for any new car to do it.
There is also the fact that we aren’t going to war for batteries and those batteries cause a great deal less air pollution than gas models. The true cost of gas is not reflected in the dollars paid at the pump, but if it was, there would be a much larger advantage to hybrid. While hybrid is not a cure-all, it is to me a better option then sending more billions to Mid-East and other less than friendly countries.
This PDF from CO Dept Public Health has some good comparison tables, which show the overall benefit of hybrids. http://www.cdphe.state.co.us/ap/down/hybridreport.pdf
Also, the true cost of gas should not be overlooked:
For Persian Gulf imports, because of the enormous military costs associated with the region, the “hidden cost” was equal to adding $7.41 cents to the price of a gallon of gasoline. When the nominal cost is combined with this figure it yields a “true” cost of $9.53 per gallon.
http://www.evworld.com/news.cfm?newsid=11520
Riders feel pinch as Metra packs ‘em in
Skyrocketing gas prices have introduced many Metra passengers to a feature more commonly associated with the CTA’s elevated trains: standing for long stretches. Though good for the environment, a record level of Metra ridership is making the commuting experience less pleasant and more crowded.
The breaking point for Keith Hildibrand, 30, came when he calculated that he spent $450 in January to make the 106-mile round trip by car from his Grayslake home to his job in Chicago’s River North neighborhood.
So he bought a monthly Metra pass for $164.70 in May and started catching the 6:30 a.m. Milwaukee District North line out of Grayslake. He finishes the commute by walking 2 miles to work from Union Station.
Life has only improved, Hildibrand said: The commute is no longer (still two hours), but it is less stressful, lets him exercise and reduces his carbon footprint.
This is really the only way to save money (including untold savings in future health costs thanks to lower stress levels). Plus, you can drink beer on the Metra trains on your way home from work.
Holy crap! People commuting from Grayslake to River North?
And that 2 mile walk is going to look really dubious in a Chicago February.
I would imagine that by February he has figured out the CTA busses.
Speaking of MPGs, the CTA has a new experimental bus they’re trying out. Instead of the normal hybrid busses that they have in their fleet (which get 3-4 MPG), this one uses a small diesel turbine running at a constant speed. It generates electricity only and is not connected to the wheels at all. Electric motors do all the drive work. The promise is 8 MPG, which I suppose is a big deal for a vehicle that large.
Capstone turbine I suspect. CPST
http://www.microturbine.com/prodsol/solutions/other.asp/
A neighbor of a good friend of mine goes from Volo to Chicago. Yikes! He can have it.
These people are demented. Stark, koo-koo, off the charts, cross-your-hearts-and-hope-to-die demented.
What is wrong with these people?
“The commute is no longer (still two hours), but it is less stressful, lets him exercise and reduces his carbon footprint”.
I hate the term carbon foot print. Its PC, made up, bull crap term. Any thing that you can pay for credits to off set your “carbon foot print” is bull crap. Its an other term to make people fill like shit.
OHH my carbon foot print is smaller than yours.
Oh yea.
Yea.
Well screw you, Susan said mine is smaller.
I hate the term.
No kidding, I own 40 acres of forest. When this whole carbon credit market goes through does that mean I’ll get paid for owning this huge carbon sink? Do I have to count the trees?
Your “huge” forest’s carbon sink would amount to about $.50/acre/year.
Sorry.
cha-ching!
It took gas prices for him to finally take the train from Grayslake to Chicago?!?
Geez, when wife and I were looking at homes seven years ago, one criteria was the house had to be on the train line to get me to work, cuz there was no way I was going to drive two hours one way each day.
I really miss the train.
CTA buses are pretty good. Clean too.
Been spending time in between business trips in Chicago and the transportation system is good.
Wish we had better services on the west coast, california, the desert etc.
Also, overheard several pilots talking about they are taking bus service from Wisconsin etc to the Ohare. Interesting how this is effecting all folks. They seemed to really like the convenience and low cost to them. I think they are frugal types.
Off topic:
When Honda first came out with their dinky little yellow car in the Seventies a guy I worked with bought one. He was obnoxious and insufferable to begin with but became even more so as he bragged about his gas milage.
So some of his coworkers decided to help him out a bit: Every day or so one of them would sneak out to the parking lot and add a measured amount of gas to his gas tank. Of course that made his gas milage go through the roof, which made him all the more obnoxious and insufferable.
This went on for several months until …
Until the guy sneaking out into the parking lot, instead of adding gas to the gas tank began removing gas from the gas tank, which caused the gas milage to radically plumment.
The antics ended when Mr. Obnoxious began spending lots of money on repair bills.
BTW, to this day the guy never found out what happened.
LOL - that’s really funny. I bought one of those little yellow Hondas, used, in 1973 or 74. It was a blast to drive, like a poor man’s Mini Cooper. The thing got pretty awesome mileage - I think the engine was a two-cylinder motorcycle engine. It might have been a two-stroke (you have to mix oil with the gas). Think I paid something like $800 for it and sold it less than a year later to a colleague, for about the same. Glad I didn’t brag about it too much! More of a fun novelty at the time.
I’ll say it again: 1989 Civic 5spd, 43 mpg highway.
Criminy, I should have never gotten rid of it, but that opposed timing belt freaked me out.
Had a 93 civic, std trans, 40+ mpg, mostly freeway. Never tuned up, never replaced timing belt ( said to be a must do every 90k miles), gave it away to charity at 319,500 miles. Cost less than 10cents/ mile driven, including gas.
My crap detector appears to have provided an accurate stink-o-meter reading on this story…
Bank of America Drafted Dodd’s Housing Bailout Bill
* Posted June 20th, 2008 at 12.47pm in Uncategorized.
The Washington Examiner has obtained a “confidential and proprietary” document produced by Bank of America and titled “FHA Housing Stabilization and Homeownership Retention Act of 2008.” The “Discussion Document” dated March 11, 2008, closely resembles the housing bailout bill drafted by Sen. Chris Dodd (D-Conn.) that the Senate is set to vote on within days. Senate staffers have told the Examiner’s Tim Carney, “the bailout section is exactly what Bank of America and Countrywide wanted. Its obvious they got what they asked for.”
Countrywide Financial is at the heart of the mortgage foreclosure crisis. It has $95 billion in loans on its books, many of the adjustable-rate-mortgage loans that have been defaulting at unprecedented rates. Countrywide has lost $2.5 billion in the last three quarters and had $6 billion in nonperforming assets on its book in the first quarter of 2008. Despite these red flags, Bank of America is proceeding to buy Countrywide for $4 billion. Analysts and stockholders have been highly critical of the deal since the beginning, wondering why Bank of America would be willing to take on such financial risk.
The bill about to be voted on by the Senate would allow banks like Bank of America to pick their riskiest loans and dump them on the Federal Housing Administration. In exchange for taking just a 10% cut on the value of the loan, the banks would receive cold hard cash from U.S. taxpayers. Their risk would be eliminated, entirely shifted to the FHA and the U.S. government. Passage of the bill would make Bank of America’s acquisition of Countrywide much more profitable.
P.S. Ben — It’s June 21 already
This should scare the beejeezus out of Americans. However, with apathy running rampant it’s doubtful many will notice.
Sen. Chris Dodd’s housing bill contains a new provision it didn’t have when it passed through the banking committee last month. The provision calls for the tracking of all credit-card transactions and their reporting to the IRS. In addition to credit-card transactions, it also monitors the third-party payment systems used on popular commerce Web sites, like eBay.
Once again, this Clown, Dodd who is to stupid to know what is mortgage agreement is(or so he says), should resign.
It gets worse. Who knew Dodd and company were so totalitarian? Folks, call your reps and Senators. This bill is scary on more than one front.
“Washington, DC - Hidden deep in Senator Christopher Dodd’s 630-page Senate housing legislation is a sweeping provision that affects the privacy and operation of nearly all of America’s small businesses. The provision, which was added by the bill’s managers without debate this week, would require the nation’s payment systems to track, aggregate, and report information on nearly every electronic transaction to the federal government.
FreedomWorks Chairman Dick Armey commented: “This is a provision with astonishing reach, and it was slipped into the bill just this week. Not only does it affect nearly every credit card transaction in America, such as Visa, MasterCard, Discover, and American Express, but the bill specifically targets payment systems like eBay’s PayPal, Amazon, and Google Checkout that are used by many small online businesses. The privacy implications for America’s small businesses are breathtaking.”
“It gets worse. Who knew Dodd and company were so totalitarian? Folks, call your reps and Senators. This bill is scary on more than one front”.
You are right, it just keeps getting worse… Of course the ‘I’ve got nothing to hide’ crowd will pop out saying it’s fine with them. They miss the point entirely, it’s another invasion into a persons life. Governments steal freedom a little bit at the time, and over time they will control and track your every movement.
Our ancestors valued and desired freedom so much they were willing to die for it. Sad we just sit back and give it all up without so much as a whimper.
“Of course the ‘I’ve got nothing to hide’ crowd will pop out saying it’s fine with them.”
Totally spot on. I ran into one of these fatuous pieces of overweight white trash during the whole Patriot Act debacle. What a complete dumbass jerk. Yeah, they miss the point. Wait’ll someone wants his trashy ass in a detention camp and goes online and makes it look like he’s urging some terrorist strike and “detains him indefinitely”. Then you’ll hear the weeping and wailing about “I didn’t post that!”. Too bad, Bubba, prove it. You are now guilty until proven innocent.
As Combotechie says: got cash, use cash.
But, but, but…
I thought the Demo team was the pro-civil liberties team and the Repubs are the evil totalitarian team? I’m confused…
“You are right, it just keeps getting worse… Of course the ‘I’ve got nothing to hide’ crowd will pop out saying it’s fine with them.”
Yes you are correct. Very much like when the otherside were shittin’ all over themselves making excuses for the patriotic act. You know…. fear dem dar turrrists!!!
“I thought the Demo team was the pro-civil liberties team and the Repubs are the evil totalitarian team?”
IMO, it is all the same team, just different uniforms.
This provision is almost certainly meant as a tax compliance measure. Doesn’t mean it doesn’t have significant civil liberties implications, but I’d guess what they actually want to do is catch small business tax cheats, not figure out who is buying a gun at a gun show.
You know ex, if Palm wants to rant about the Patriot Act, I’m going to listen to him, because I can see there are some serious principles involved on his part, and he’s going to follow them wherever they may lead him politically.
You seem to not be able to find it within you to ever offer an unqualified criticism of your own, about anything, no matter how flagrant and obvious the behavior in question. If there’s any politcal aspect to a thread, I know what you’re going to say before you ever say it. So why bother.
This whole Dodd thing stinks to high heaven, and there should be serious political hell to pay. Anyone who can’t say that statement, without qualifications…
You seem to not be able to find it within you to ever offer an unqualified criticism of your own, about anything
He’s a valuable member of the team. lmao
IMO, it is all the same team, just different uniforms.
I agree…I sometimes forget to bash “the other side” though. So here it is:
The idea that the Demo team is here to save us from big business is almost as absurd as the idea that the Republa team is the fiscally conservative party.
our overlords have gradually reversed the standard of “innocent until proven guilty” to “guilty until proven innocent”. keeps ‘em in power much easier that way.
nothing that happens anymore surprises me. all the common man can do is just shake yer head in disgust ; savoring the good things in life while trying to dodge the friendly fire bullets from our arsenal of democracy.
I’m not sure it’s always friendly fire anymore. Regardless of which side is doing the firing.
Anyone wish to place any bets as to how much if any of the onerous executive branch power grabs by the R’s will be repealed by the D’s once power changes hands? My bet is that the likely roll-back will at best be on the order of 5% or so. And this current smelly Dodd episode certainly shows that there’s a potential for no reversal at all, instead the power grabs may simply accelerate, with tiny mid-course corrections in the overall direction. But somehow I suspect that we’ll be told by our new overlords that it’s really OK this time, the power is finally now in safe hands.
instead the power grabs may simply accelerate, with tiny mid-course corrections in the overall direction
That’s my thought. You might have one step back for show, but in a year or two it would be regained and more, in the midst of some celeb chick getting naked on a home video to keep us distracted.
At least we get the naked chick.
If - I wonder if anyone anywhere has tried to track the number of rules and laws that were “rolled back” - canceled or voided. Period. Not “by whom?” Not “Why?” Just how many or better yet, what proportion.
I’ll bet it is tiny, tiny, tiny.
My wishful thinking has been to put a cap on the number of laws on the books at every level of any governmental unit that is twenty-five years old or older (arbirtary number). You can’t add one unless you eliminate one. And no sneaking rules in by way of the budget.
This really bothers me, and not just from a civil liberities standpoint.
So the government wants to track future credit card, pay pal, etc. purchases to catch a few tax cheats? What about people who have been victims of credit card fraud? Its bad enough these people have to go through credit companies, credit report beauros, to get their financial records cleaned up. Now imagine the government being involved as well. I’d hate to have an IRS agent show up on door because someone else went on an unauthorized spending spree with my credit card, or opened up fraudelent accounts in my name. (Hmm, maybe I have an overactive imagination, but I can’t help but think of situations like this).
They aren’t doing it to figure out how much you spend. They are doing it to figure out how much a small business receives. If a company is non-public and unaudited, they can pretty much say anything about their gross receipts on their tax form. If the business says it gets $1 million in gross revenue on its tax form and there are credit card and electronic payments made to it of $3 or $4 million, you can bet that there is some kind of tax fraud going on. Not guaranteed, but a reasonable chance.
It is the same level of information (a little less actually) that the government already gets about every employee or contractor that has a w-2 or a 1099 sent to the government by his employer.
I’d bet that this idea has been floating around treasury for years and this was just the first big bill from the correct committee that was ready once they had hashed everything out. It just doesn’t smell partisan to me.
I would agree that the credit monitoring aspect probably isn’t partisan, even though it’s coming out of a Democratically-controlled senate. Things that have this level of impact and/or spending usually are fully bi-partisan. Like our rebate checks were.
palmetto,
The public should demand that know bill can be brought up on the floor of the House or the Senate until after 30 days from it publication so that there will be no excuse for not reading it. This should be true even after the conference between the two houses.
I am getting sick and tired of no one reading these bills, because they are written over the wekend and discussed on the floor the following Monday. Also, every prospective piece of legistation/bill must go through the respective committee so that the public can here the pros and cons. It should never go to the floor until it gets a full committee hearing.
Otherwise, lets vote the lobbyists in as our representatives and skip these idiots who have no idea what they are doing.
At least we maybe able to save some money!!!
Dodd’s FOA loans may eventually look like a tempest in a teapot compared with the BOA legislation story…
Dodd’s outrage: A senator shows a disconnect with constituents
Article Last Updated: 06/20/2008 06:39:46 AM EDT
Christopher Dodd is outraged that anyone would suspect he used his position in the U.S. Senate to get himself a sweet mortgage deal.
The real outrage, of course, is that Dodd has shown such a disconnect with what his constituents in Connecticut are going through.
Few of them were put on the “VIP” list for attention from Countrywide Financial Corp., the mortgage lender that is now at the center of the nation’s foreclosure crisis.
The Connecticut Democrat says he knew he was on the VIP list and viewed it as “a courtesy.”
What did VIP’s get? Allegations are they got lower mortgage rates because their goodwill was of value to Countrywide.
Curiouser and curiouser…
CAPITOL REPORT
Horse-trading over Fed seats draws little concern
Bernanke seen as firmly in control
By Greg Robb, MarketWatch
Last update: 4:35 p.m. EDT May 29, 2008
WASHINGTON (MarketWatch) — Wall Street isn’t stressing over vacancies on the Federal Reserve and the apparent behind-the-scenes horse trading that has so far kept the Senate from voting on new members to the central bank’s board.
Fed watchers said markets do not stress about the Fed governor seats, only the chairman’s position.
Under the Fed system, the Fed board members play a lower key role - sort of like offensive linemen in football, helping push the chairman’s agenda down the field but not by freelancing.
…
The regional Fed presidents are the skill players, using their own research staffs to draw attention to their own particular views.
But Fed chief Ben Bernanke remains is the quarterback. Having less governors may only make it easier for him, analysts said.
“It is still a chairman-dominated committee, and Bernanke is definitely in control,” said Zach Pandl, economist at Lehman Brothers.
Since last summer, new appointments to the Fed board are being blocked by Sen. Christopher Dodd, Democrat of Connecticut, and the chairman of the Senate Banking Committee.
Dodd’s committee heard testimony from two Bush nominees to the board — Elizabeth Duke, chief operating officer of Virginia-based TowneBank and Larry Klane, former president of global financial services at Capital One Financial Corp. — but has not voted on their nominations.
Dodd’s office has been mum on the reasons behind his inaction.
Who hatched this scheme to have BoA buy CFC with the deal-sweetener that CFC’s toxic mortgages could be offloaded on the taxpayer (in the guise of “free guarantees”)? Please tell me if I have this wrong…I am not an expert on bailout architecture.
Frank comes off sounding like he is privy to the plan.
Frank Urges Countrywide Sale, Defends Dodd
6/19/2008 1:29 PM ET
(RTTNews) - Chairman of the House Financial Services Committee, Massachusetts Democratic Representative Barney Frank defended Connecticut Senator Chris Dodd Thursday following allegations against the Senator regarding his relationship with Countrywide Financial Corp. Frank added that he does not see Countrywide existing in the near future, urging the completion of the takeover by Bank of America.
…
In his statement, Frank encouraged the takeover of Countrywide by Bank of America.
“I have been critical of many aspects of Countrywide’s behavior, and I believe that having Bank of America take over Countrywide’s mortgage portfolio will result in a much better set of decisions for individual borrowers, and for the economy as a whole,” he said.
Frank added that he did not foresee the Financial Services Committee becoming involved in Countrywide hearings, because “if things go well, Countrywide will soon no longer be on the scene.”
I found the following quote interesting, from an article you posted above:
the Bank of America which is a much more responsible financial institution agreed some time ago to buy Countrywide.
I don’t get this statement. It’s the “agreed to buy” part that gets me. Normally, when one company buys another, they do so because they perceive some business efficiencies or whatever that would increase the net profit of the combined entity. In this case, it almost sounds like the idea for the purchase wasn’t BoA’s but someone else who then convinced BoA to buy CW
Marines To Begin Martial Law Training…. A little something in case you got your tinfoil cap on…
http://www.dailynewscaster.com/2008/06/03/marines-to-begin-martial-law-training-in-indianapolis/
“The very few, the proud, the Marines” With only about 1.5 million total force military personnel to spread around the country (and many of those stationed overseas or on ships), there simply aren’t enough to try and maintain control of anything but the most vital government, trade, and transportation nodes in the event of a societal meltdown.
I think it works out to just .05 soldiers, sailors, airmen, marines, and coasties per capita for 300 million citizens. Martial law would be very tough to impose nationwide.
Do not underestimate the capability of a small but well organized and armed force to terrorize and subdue the populace. Remember, the Germans controlled and terrorized all of Europe for a good long time.
As a career product of that “small, well organized force” I can assure you with conviction that the absolutely overwelming majority of miltary men and women would instantly turn on any commander - military or civilian, that tried to order that Nazi style tactics be used on the population…
The US military has recruitment problems as is. Imposing martial law on the US would probably make it worse.
I don’t rest so assured. I see a “starve or enlist” future–making a draft relatively easy.
In that case, the hungry recruits would probably have no ethical dilemmas with enforcing martial law on their fellow citizens–so long as they got their own three squares a day. Just look at the 3rd world countries with their thug armies pushing the populace around. We could be next.
True, but the German Wehrmacht was several times the size of our active duty forces today as well. You will be relieved to be assured by a career product of our “small and well organized force” that the absolutely overwhelming majority of our military men and women would instantly turn on any commander - military or civilian - who tried to order that WW II German style terror tactics be used on any population - American or otherwise.
The Wehrmacht proper was no more inclined towards terror tactics than any other army; that’s what the SS was for.
Yes, I suggest, that all of you that are fearful of a military state, move to Switzerland. You can learn yodeling and make little wooden clocks. You also will be joined by all the white collar criminals from wall street, that will jump bail, fail to jump off a bridge and land in the alps.
Switzerland has mandatory military service for males. When you turn 18, you go through training and are then sent home with an Army-issued machine gun which you are required to keep in your home.
If you really want to avoid a military state, move to Costa Rica. They got rid of their military and spent the money on education instead. Great surfing, laid-back and very friendly citizens, awesome weather, and their tourist visa rules make it easy to live there indefinitely. All you have to do is take a weekend trip to Nicaragua or Panama (or the US or..) and you get a new 3-month tourist visa upon re-entry.
“Switzerland has manditiory military service for males. When you turn 18, you go through training and are then sent home with an Army-issued machinegun which you are required to keep in your home.”
And because of all these thousands of machine guns in people’s homes Switzerland is a country racked with violent crime.
Oh, wait…
(… uh, never mind)
Excellent point, combotechie!
RE: Remember, the Germans controlled and terrorized all of Europe for a good long time.
There was a day when a police officer was a local neighbor and a respected member of a successful functioning community.
Nowadays these people are arrogant, nasty, para-military, quasi-Nazis’s, runnin’ around dressed in black, carrying automatic weapons, and only too happy to f*ck up your day while the heavy duty bad guys go about their business.
RE: Remember, the Germans controlled and terrorized all of Europe for a good long time.
I’ve read that photographs of newly constructed concentration camp type facilities located in military classified areas in the western states have been showing up on various blogs.
Anybody got a link?
The marines that I was a member of in the late 60’s would never turn on the public. With this voluntary enlistments, I just do not know.
From an ex-marine.
I was a Marine in Viet Nam and was sent to the Marine Barracks, Philadelphia, in 1968, awaiting discharge. While there we did such things as tend to the officer’s gardens and other mundane tasks. Degrading is not strong enough terminology.
It so happens that the Black Panthers were making a big stink in Philly so the then mayor, Rizzo, called the Barracks and asked for help. We being fresh out of combat loved the idea of shooting up Market Street. At any rate we were then converted and trained to be urban enforcers. I recall there were all these formations with bayonets out front and bouncers in the phalanx to the rear. The idea was if anyone got through the ranks they were pummeled by the “bouncers”.
Once the objective was reached it was fragmentation grenades to soften up the opposition and fully auto M-16’s. Oh yeah, if things get freaky the Marines will respond. I should add that we thought the country was pretty bad off based on the reception we got returning from Viet Nam so there was a natural feeling to the opportunity. I will say that we had discussions about using our weapons within my platoon and we had made a pact that we would not use deadly force even if ordered unless we took direct fire. Yes, Marines have feelings too.
we had made a pact that we would not use deadly force even if ordered unless we took direct fire.
Veeeery interesting post. And the above quote must give nightmares to higher levels, even today.
Just a side note-the irony of dying in Philly after surviving Viet Nam did not escape us.
In the late sixties, Newark burned and so did Baltimore. Philadelphia didn’t, because Rizzo was a hardazz.
I’m glad you made it out of Philly alive, in that Summer of Love. Or whatever it was.
I do not believe Indianapolis did either, because Robert F Kennedy spoke at a gathering and invoked his brother’s memory and the efforts that he and LBJ made to help in solving poverty and civil rights violations.
From my memory…and yes the cities of America appeared to be burning after MLK, the third assassination of a major leader of America’s social and political change within 6 years…
Great story, dime. You’ve lived a far more interesting life than I have.
Are you saying that was the plan, or that you actually had to do some of it??
Blano
We were in an armored column the night the police shot it out with the Panthers. Never did have to go thankfully.
Rest assured that there are units trained and ready to roll in 6 hours time standing by right now. Urban control is a part of what they call individual combat basic training at Camp Lejeune. Just cause the buildings look middle eastern don’t be fooled. A building is a building.
American civilians have stoop up against their official duly-appointed government military before. Military sent expressly to go clean out the civilian-owned guns.
There were no British vs Colonists at Lexington and Concord. There were only British against British. We have our historic vision colored by years of movies, but the Colonists at that time only looked upon themselves as legal citizens of the crown being improperly pushed around by agents of that same crown. And most of them were still loyal to the crown at that time.
dimedropped (Orlando),
Old marine saying, if it moves, salute it, if it doesn’t, paint it.
hi buddy, (68-70. Only permanent duty station-Vietnam, Ist MAW, H&MS-17.
By the way, they were drafting marines out of the Oakland Induction Center when I was processed through.
lol
dimedropped (Orlando),
I would hope to G*d, that Marines would never turn on civilians. I can understand the National Guard (they were untrained to be truthful).
From my memory of History, McArthur as the Chief of Staff of the US Army in the 1930’s was called out to clear the Hoovervilles around DC of WWI vets who were promised a bonus. I believe it was referred to as the bonus army, wanting their pay. Now the Army was a small elite force in the US at that time, somewhat similar to our present day military. By the way, the WWI vets did not receive their pay until after WWII. My grandfather was one of those vets.
I am afraid to say that all voluntary forces will confuse there loyalty between the Constitution and their superior’s orders. I hope and pray that this sad incident does not re occur. The Marines have an exceptional reputation in America, and nothing should ever be done on their part to soil that reputation.
Just one ex-marine’s opinion.
Yes, this is tinfoil hat stuff.
Marine Expeditionary Units have been doing this type of training in cities across America for decades. I participated in one such exercise in a city in northern California more than six years ago.
Marines train in American cities because their unfamiliar environments present unpredictable challenges, because most military bases lack large-scale urban training facilities, and because the most likely overseas operating environments are in urban terrain. These exercises also provide local leaders and interested citizens with an opportunity to learn first-hand about America’s Marines.
Marines swear an oath to the Constitution. They take that oath very seriously. I respectfully request that you pause and seek more information before you question that commitment.
FHAwide of America?
Texas leads nation in FHA-backed home loans
10:49 PM CDT on Thursday, June 19, 2008
By STEVE BROWN / The Dallas Morning News
stevebrown@dallasnews.com
Texas continues to lead the country in the volume of home loans insured by the Federal Housing Administration.
…
With the shakeout in the mortgage industry, federally backed FHA loans have dramatically increased in volume.
These mortgages provide consumers with long-term, fixed-rate financing insured by the government.
FHA market share has jumped from about 3 percent in 2005 to about 12 percent.
“Our volume in Texas for the first quarter of calendar year 2008 was up almost 90 percent from the previous one,” Mr. Montgomery said.
“This is the state with the largest FHA volume, which we thought was a pretty amazing statistic.”
He was in Dallas to tour Bank of America’s regional government lending center.
Since 2005, Bank of America has increased its FHA and Department of Veterans Affairs loan business from around $800 million annually to an anticipated $5 billion this year.
Fundings from the Dallas office – which employs about 150 – were up 35 percent in May compared with the same month last year, according to Bank of America.
Bank of America is the fourth-largest producer of FHA-backed loans in the country, according to bank officials.
“I certainly see that the FHA market is going to be strong for 18 to 24 months,” said Allen Jones, who heads the bank’s government lending program.
Seems cozy, wonder if former FHA staffers get hired by BOA
Any implications / significance to the fact that the biggest is TX?
I wonder if it is due to debt to income ratio which is in historical norms. There are houses for sale all over in decent neighborhoods for 80K to 120K. 3/2/2 with 1500 sq ft.
Texas is the number one state for new transplants and people can afford to live here.
No state income tax, food is not taxed and prices for food is lower than Virginia where I moved from.
Thanks to Ben’s blog back in 2005 I sold my home and came to Texas to hold out while the economy turned upside down.
TX prop taxes are HIGH and so are the independent electric company prices. According to friends all over the state, it aint that cheap. Just the cost of the house. Otherwise it comes out as a wash. And the driving is endless.
But it sure does sway you until you do the #s again as you all are suggesting we do, ie car total costs etc.
TX prop taxes are HIGH
***********
Even with HIGH property taxes and insurance figured in, a person can get a mortgage for under $1,000.
Food costs less (love H.E.B), and free or low cost entertainment all over. My electric bill last month was under $100. The heat is now on and will be higher for the next three months.
But it sure does sway you until you do the #s again as you all are suggesting we do, ie car total costs etc.
***********
I am not suggesting you do anything. I am renting in Texas. I moved and happen to find a great life here to hang out and eat my popcorn.
My great state of Virginia suffered many problems from runaway growth and illegal invaders. Quality of life went downhill. The traffic became a nightmare as well, gridlock for hours everyday. Nasty tempers everywhere. Too many people….weeks to get a Doctors appointment. Growing gang problems, etc.
My husband and I have wide open space now, friendy people all around, and time to enjoy what was taken away living in Virginia. The choice became: stay and hate life or leave. The only question was where to go.
For those who choose to buy a middle class home without breaking the bank, it can still be done.
Personally I would rather large numbers of people stayed away from here so it does not become what I left but Texas is a large state so I can move around a bit.
IMF… FED may need to raise rates quickly….June 20 (Bloomberg) — The International Monetary Fund said the U.S. economic slump has been shallower than estimated and warned the Federal Reserve may have to raise interest rates “quickly” to contain inflation.
We will see, that’s what needs to be done, however I no faith in the FED.
http://www.bloomberg.com/apps/news?pid=20601103&sid=aPhVqSjc1oPM&refer=news
I’ll help draft the statement coming out next week:
“…though the downside risks to growth remain in certain sectors of the economy, and inflation expectations remain at elevated levels… the Federal Reserve has decided the FFR will remain unchanged in the near term…however, the we stand ready to act at any time in order to achieve whatever you people think we have any power to manipulate..”
mr fed does nothing, they are carrying a eeny weenie stick, with a great big megaphone. Most likely we’ll get a short comment regarding “ample liquidity” as well.
most likely they will leave out the extra “the”.
Well done sir, well done.
“If you got nothing, you got nothing to lose”!, Well, besides life, liberty and the pursuit of Happiness, anyway.
WASHINGTON — The House Friday easily approved a compromise bill setting new electronic surveillance rules that effectively shield telecommunications companies from lawsuits arising from the government’s terrorism-era warrantless eavesdropping on phone and computer lines in this country.
http://www.huffingtonpost.com/2008/06/20/congress-strikes-immunity_n_108231.html
Senate Housing Bill Requires eBay, Amazon, Google, and All Credit Card Companies to Report Transactions to the Government
Broad, invasive provision touches nearly every aspect of American commerce.
Washington, DC - Hidden deep in Senator Christopher Dodd’s 630-page Senate housing legislation is a sweeping provision that affects the privacy and operation of nearly all of America’s small businesses. The provision, which was added by the bill’s managers without debate this week, would require the nation’s payment systems to track, aggregate, and report information on nearly every electronic transaction to the federal government.
http://www.freedomworks.org/newsroom/press_template.php?press_id=2571
caution:pdf file
Both conservatives and liberals hate these additional loss of individual’s privacy.
And they’re shocked they got a veto threat
The FED Unreserved….Congress brought the FED into this world, and it ‘could’ take them out! But it will not…
http://www.gold-eagle.com/editorials_08/schiff062008.html
Don’t know if this was posted earlier, but I just got the link now:
The Great Seduction
By DAVID BROOKS
Published: June 10, 2008
The people who created this country built a moral structure around money. The Puritan legacy inhibited luxury and self-indulgence. Benjamin Franklin spread a practical gospel that emphasized hard work, temperance and frugality. Millions of parents, preachers, newspaper editors and teachers expounded the message. The result was quite remarkable.
The United States has been an affluent nation since its founding. But the country was, by and large, not corrupted by wealth. For centuries, it remained industrious, ambitious and frugal.
Over the past 30 years, much of that has been shredded. The social norms and institutions that encouraged frugality and spending what you earn have been undermined. The institutions that encourage debt and living for the moment have been strengthened. The country’s moral guardians are forever looking for decadence out of Hollywood and reality TV. But the most rampant decadence today is financial decadence, the trampling of decent norms about how to use and harness money.
Sixty-two scholars have signed on to a report by the Institute for American Values and other think tanks called, “For a New Thrift: Confronting the Debt Culture,” examining the results of all this. This may be damning with faint praise, but it’s one of the most important think-tank reports you’ll read this year.
The deterioration of financial mores has meant two things. First, it’s meant an explosion of debt that inhibits social mobility and ruins lives. Between 1989 and 2001, credit-card debt nearly tripled, soaring from $238 billion to $692 billion. By last year, it was up to $937 billion, the report said.
Link to rest of article:
The Great Seduction: Debt and Frugality in American Culture
Yes and no.
Yes our debt and spending culture has hurt us. No it isn’t new. Lots of the founding fathers borrowed and went broke.
George Washington had to float a loan just to get to his first inaguration in Phillidelphia as I recall…
Philadelphia - sorry to you Philly residents…
Over the past 30 years, much of that has been shredded. The social norms and institutions that encouraged frugality and spending what you earn have been undermined.
And the fact that the 30 year time line aligns perfectly with the failed ideology of supply side better known as reaganomics is just a coincidence?
riiiiiiight.
for those who didn’t see this last night
http://images.redstate.com/FHA%20Housing%20Stabilization%20.PDF
The purpose of suggested intervention is to stop further housing prices declines. That’s what the document says.
I have to wonder, how much more of housing prices declines will TPTB tolerate?
If the current conundrum is due to unbearable debt burden, wouldn’t TPTB do everything in their power to inflate that burden away? Not that it would happen overnight, but eventually?
“…wouldn’t TPTB do everything in their power to inflate that burden away?”
I see considerable evidence the effort is underway, but it is blowing up in the faces of the perpetrators. Have you noticed pump prices approaching $5/gallon lately? How does creating high gas price inflation against the backdrop of a weak labor market and low wage inflation help to prop up housing prices? How would artificially propping up housing prices against a record level of vacancies help restart housing market liquidity?
Please enlighten us with the details of how this reflation plan is going to work in practice, as I am quite interested in the topic of whether social engineering can be used to overcome fundamental market forces. Many regular readers and posters here are highly skeptical.
Anyone hear yesterday on MSM that the YTD Gas mileage consumption from Americans from last year is either 30 BILLION or 300 Billion less than last year.
Either way, 3, 30, or 300 less is a lot less and bodes even more, public transp way way up.
….and consumption in China is up 12 billion.
“Please enlighten us with the details of how this reflation plan is going to work in practice”
Hah! I wish I knew…
One way of doing this would be dollar devaluation to the point where “Chindia et al” buy everything. Yes, Americans will be devastated and destitute - but no problem, since newly rich emerging markets and resource (oil) rich foreigners will pick up American assets for kopeks on the dollar.
Thoughts?
It opens up sideways and has 62 pages.
Is there a summary?
My eyes are burning.
Save it to your computer and then turn it, that’s the only way I could figure it out.
I can’t find any mention in this interview with Barney Frank that the Bank of America was the author of the FHA mortgage rescue legislation. Could we please get some MSM confirmation (although I take it that the Heritage Foundation is a reliable source)?
Rep. Barney Frank Explains the Building of the Mortgage Bailout Bill
Thursday, June 19, 2008
…
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Is there anything that`s nonnegotiable? I know you wanted conforming loan limits to be –
FRANK: Oh yes, there are some things that are nonnegotiable.
DHUE: And those would be.
FRANK: I`m not going to non-negotiate with you, I hope you don`t take offense. But I admire what Chris Dodd did. It was tough thing to get that bill through the Senate. I appreciate the cooperation that Senator Shelby gave him. I hope it is going to go through. And they had some hope that we could just accept it as is; that was not realistic. It`s too complex a piece of legislation. (INAUDIBLE) just need more time to make sure you wrote it all correctly. But I think and I accept the veto threat on the CEBD as probably definitive at this point. I think the rest of it were all in areas where we can work something out.
DHUE: Countrywide allegedly gave favorable loans to at least two senators, Chris Dodd and Kent Conrad. That has cased some Republican senators to call for the bill to be pulled so they can determine how much Countrywide and other lenders will benefit. How much has this controversy slowed momentum on the bill?
FRANK: Not at all. In the first place Countrywide is not going to benefit at all because the good news is pretty soon there won`t be any more Countrywide. How I wish there never was. That is an organization that did a lot of harm. But the Bank of America which is a much more responsible financial institution agreed some time ago to buy Countrywide. So the question about whether or not they are going to do this in the future, no, they can`t. As to whether anybody else did it, I don`t know. There is no — I don`t know how would you find that out, subpoena everybody who ever got a mortgage. Finally, I would say this, those Republican senators who said hold off the bill until we find out, were never for the bill anyway.
How about a call for full disclosure of all properties bought, sold, or refinanced by members of congress during the last 5 years?
That would just above cover it.
BOA must have a real sense of entitlement to even suggest this. They have misallocated so much money, and really need to be out of business to allow new, competent banks in.
They have the advantage of being too big to fail, and they would get even too-bigger-to-fail if they swallowed Countryslide.
Thanks, txchick. Good find.
From the Executive Summary:
“Bondholders and portfolio lenders will experience virtually the same losses as they would have without governent intervention since the short payoff amount is based on the current appraised value of the property and is economically equivalent to the value that would be recovered in a foreclosure. – THUS NO BAILOUT OF THE BOND MARKET.”
That’s good for a laugh. If the property can sell for “current appraised value” (which all of us know is very scientific), why don’t authors and BOA management and congresspersons simply buy these properties at that value, and spare the taxpayer? After all “RE always goes up” so they can make a bundle in the future.
Other falsehood is that the value received in a foreclosure (auction?) is the same as the “current appraised value”. What BOA is suggesting is a Govt Baliout of lenders.
i have never had to read lying down. It was an interesting link, but my one arm kept going to sleep.
Sideways reading.
My morning laugh:
Jeremy Siegel on Ignoring Risks
The subprime crisis was a wreck that could have been predicted.
I didn’t bother listening to the podcast, but if you want to hear about how those here on Ben’s blog could have predicted the subprime crisis:
http://knowledge.wharton.upenn.edu/special_sections/subprime/index.cfm
Could have? We did.
There is no “could”.
So did a slew of others like Ivy Zelman who got fired for her efforts from Credit Suisse.
As Charlie Munger put it, “Jeremy Siegel is demented.” (May 2006)
Buffett’s response? “C’mon Charlie. He’s a nice guy.”
Sorry Pussycat, my tongue was firmly planted in cheek while typing my post. I’ll make it even firmer next time.
No, I got that part.
I just wanted the Munger “demented” quote to go in there.
He also said something like “he compares apples to elephants in coming up with his decision.”
Demented as in Dr Demento.
I start my new job on Monday!
There would have been no way to take this opportunity if I had purchased real estate. I had to move clear across the country for the job. It will be a good move up for my career.
During the interview they asked when I could start. I gave them a date about 4 or 5 weeks in the future (enough time for notice at my current job). The two people interviewing me were shocked… “You can start that soon?” etc. I chuckled to myself and thought of this blog!
Congrats! Good luck with your new job JJ.
There you go, we all like the thought of owning, but it’s also like an anchor that keeps you in one geographic area. If not for this house I’d be living (and renting) in the OC.
Is there a universal teaching in management that says, “Get them to buy houses and raise families”? Do this and you’ll have a stable employee that can’t rush off and get a better job.
It’s pretty much implicit.
Everyone wants a little “bitch” who can’t be independent. Independent employees are the devil as far as large corporations are concerned.
With 100% of my friends I have seen this situation come up usually at key points in their career.
My sister told her boss flat out that if prices were in line in rents she would buy, and in any case it was not him to tell her what to do with her money. She might at well have peed on the carpet at that point.
Yep, Big companies love to see their employees with lots of obligations. If you are deep in debt and have a family to support it is a whole lot more difficult to tell them what you really think.
They hate the guy that can tell them to F…. off without having to screw over their families at the same time. Nothing like the feeling of enough cash in the bank, a flexible lease, paid off vehicle and a good work history to make you feel a little bit more brave when dealing with idiot bosses.
Long ago, I interviewed somewhere, and they asked me, “What’s your time frame? Do you need to be employed by some time?” (emphasis mine.)
I simply said, “no.”
The look would’ve curdled milk instantaneously.
Of course, it gave me the answer whether to work for them instantaneously too.
“Life is like a sh*t sandwich.
The more bread you’ve got the less sh*t you’ve got to eat!”
Mike
Cat and Ken you’re dead on. I work for a very old (1902) metro NYC firm that traditionally has extremely low turnover, low hiring rate etc. When I was being considered for a position, they were perplexed by my strong request to work on a 1099 or third party and that I don’t need benefits, 401k’s, vacation days and the rest of the garbage employers leverage against an employee to pay a lower salary. I further went on to tell them I have no familial roots or obligations in NY and I’m only interested in running their 30 month project. I thought they were going to short circuit. I’m glad I disclosed it early on because they do not mess with me like they do their indentured slaves and are always asking if I’m happy and if I’m interested in another project. lmao.
These points are absolutely crucial. In the depression that has already started, it is more important to be mobile for your job than to take advantage of whatever bargains in housing present themselves (houses in most places are still a long way from being bargains).
The reality is that employees in the private sector are hired to be fired. Too many people do not realize before it is too late that at bottom, their employer cares about making money, not about them.
Buying a home with a 15-year or 30-year mortgage is too risky unless you have a government job. Owning property keeps you tethered down when you need to be mobile.
Keep the popcorn popping,
Red Baron
“their employer cares about making money, not about them.”
Of course they do! If they don’t turn a profit they go out of business! Then everybody would be unemployed!
hood activity- straight sales moving while short/foreclosures sit ?
22151
Ben, today’s the 21st.
Longest day of the year (in the Northern Hemisphere anyway.)
Not trying to be picky, Ben, but today’s date is June, 21.
Happy Summer Solstice everyone.
Thank you, I intend to enjoy every last moment of daylight today.
Summer is the best…nothing like going outdoors with toes exposed to make a body happy!
I’m getting tired of friends and family, who all paid under 200K for their house, telling me that I’m silly for not spending 500K for a house now.
Don’t worry. The ones that paid 500K will get tired of us telling them they should’ve waited until prices went below 200K.
Only if you rub it in which you totally should.
Preferably with doing the nyaah-nyaah-nyaah dance and wiggling from side to side, with a side dose of gratuitous profanity aimed at their financial ignorance.
“Preferably with doing the nyaah-nyaah-nyaah dance and wiggling from side to side, with a side dose of gratuitous profanity aimed at their financial ignorance.”
Yeah, but DH gets really embarrassed when I do that.
Society will not progress one whit until people perfect the fine art of rubbing it in.
Tell him you are doing it for a more perfect society.
Or, before too long you’ll be paying 200K for a house that was 500K.
Me too! I keep hearing, “Oh - when are you going to buy? This is the market you’ve been waiting for!” probably because they read that on the back of a Septa bus (yes, I saw a realtor ad saying that on a bus recently).
I get that, plus, “Better buy now - interest rates are starting to go up!”
The mentality has not changed at all. So if that’s true, what’s going to bring the house of cards down? I’d like to think fundamentals, but banks are still loaning out more money than (I think) people should be getting.
On the East Coast, the fastest way to get them to shut up is to say, “Oh, I really couldn’t afford it.”
Flusters the hell out of them, and they resort back to the WASP-ish “propah” code of conduct that Edith Wharton would’ve been proud of.
You might as well manipulate social decorum to your own advantage.
“On the East Coast, the fastest way to get them to shut up is to say, “Oh, I really couldn’t afford it.”
I LOVE doing this. You can see them looking puzzled and mentally scratching their heads when I say it.
Yeah, love it too. Perfected the art. Works like a charm too.
I used to use it indiscriminately but an older wiser friend once remarked, “You know, you use that phrase like a switchblade.”
Oh well.
This slowdown (not recession) sure is generating a large quantity of gloomy stories for the WSJ these days as it grinds ever onward.
P.S. Wife and I visited a Toyota dealer yesterday; seems the big runup in oil prices is providing lots of stimulus to the Japanese automotive sector, but not so much to the U.S. automotive sector. (Seems that even Toyota is giving away their trucks “for free,” though.)
Ford Reels as Truck Sales Plunge
Ford said it plans to cut output again, citing the plunge of U.S. truck and SUV sales, and gave up on ending its losses by next year
MBIA Needs $2.9 Billion After Downgrade
MBIA and Ambac lost their triple-A ratings from Moody’s. The long-anticipated credit-rating downgrades of the nation’s big bond insurers is pressuring financial markets, perhaps worse than expected.
The Saga of Bear’s Fund Chiefs
By Kate Kelly
Since last summer, when two Bear Stearns hedge funds imploded, things have been rough for the funds’ managers, Ralph Cioffi and Matthew Tannin.
Toyota is not immune to hubris. Not content with dominating the car market, they went after trucks and big SUVs, and are getting burnt, particularly on the Tundra. [Also Sequoia, Landcruiser, Lexus LX570, FJ Cruiser]. Plus their previously smaller offerings, RAV4 and Highlander are suffering from year over year bloat.
However, they are not getting as bad publicity as Detroit. Give it to them for maintaining the car lead, but they are getting smoked on 40% of their model line.
Same thing with the Nissan Armada, Infiniti QX56, Titan, Pathfinder, Xterra.
I think I’ve posted it, but mid-june sales point to a 12.5 million annualized rate [essentially a month to month indicator] — versus 17 million total sales in 2007. This year will end under 15 million, definitely; next year, perhaps under 13 million.
Posted this last month. Craigslist, Rav 4 recent model.
Turns out Yucca valley residents husband bought it for her at Christmas, and now they can’t afford it and are going back to ‘95 model of something sitting in their garage.
Wish I had been ready then, but I suspect there will be more available soon.
Here is a local take on the “worse than expected” global financial picture.
Global woes send Wall St. into tailspin
Rise in oil prices is leading factor in markets’ fall
By Dean Calbreath
STAFF WRITER
June 21, 2008
Concerns about skyrocketing oil prices, the deteriorating state of banking balance sheets and the growingly fragility of the global economy shook Wall Street yesterday, pushing the stock market to one of its lowest points this year.
The market’s decline came amid rising signs that problems in the worldwide financial system are far more serious than most observers had believed.
“The market’s decline came amid rising signs that problems in the worldwide financial system are far more serious than most observers had believed.”
The ‘most observers’ have been getting it wrong for the last 12 or so months. They continue to be optimistic and they are proved wrong time and again. It gets tiresome to read all the time that every news is worse than expected. When are the observers, analysts and experts going to shut up?
When are the ‘experts’ going to admit the persistent and abysmal failure of their Pollyannish forcasts?
The singular feature of the great crash of 1929 was that the worst continued to worsen. What looked one day like the end proved on the next day to have been only the beginning.
*********
I copied that from the HBB many many months ago. It is now a large hand written poster above my computer.
It should be printed on t-shirts, bumper stickers, pens, envelopes, banners, coasters, and last but not least the front page headline of every newspaper in the country.
I added to the above quote on my poster: The bad news is NOT over. This time it really is different.
As if the mortgage fallout isn’t bad enough, imagine the frustration with many of those gas guzzler leases? ..and what about all the panicky (herd mentality) vehicle owners who are trading in their guzzlers at huge depreciation’s for more fuel efficient vehicles? Imagine the downward pressure on new and used guzzler prices. I’m thinking the Big Three are in for more bad news. How long before Japanese vehicles dominate the top five selling models?
Think of the added kick in the butt the banks that extended these leases on these gas guzzlers will get when the depreciation was way higher than their initial estimates.
I don’t know if many regional banks still mess with leases much anymore, but if they do they will get spanked pretty hard. They will lose thousands on each SUV that comes back to them.
I’m not stuck with one, fortunately, but a couple of friends who are experienced “leasers” told me the residual amount can become fiction in a hurry if you’re turning in an SUV - in other words, you may be able to buy it out for a lot less than the amount in the original paperwork. Whether or not that is a good idea obviously depends on the amount of discount and whether it gets closer to 10,15 or 20MPG per the chart at the beginning of the bucket.
I wonder if more people are applying for those “Speedpass” keychain thingies, simply because they let you fill up without looking at the meter with the cost on it.
Ford announced yesterday they were producing 15 mill less F150 trucks now.
I was driving down El Prado in S. Tampa last week, sometime in the early evening. I was laughing about the foot-high weeds in front of these two butt-ugly, shoddily built spec houses that back up to Britton Plaza (which is a really crappy shopping area-think Big Lots, Bealls Outlet and Burlington Coat Factory-although I do go to the Marshall’s there every now and then). The houses were completed last year and still have not sold. They are awful 2-story stucco things. The parking lot lights from Britton Plaza must light them up like daylight at night. Hope they installed blackout curtains on the backs of the houses.
Anyways, as I was passing them, I noticed that there was a homeless guy sleeping on the porch of the green one. I got a good laugh at that one. Imagine a realtor bringing you to look at a house, that probably has an asking price of $400K or so, and seeing a homeless guy with his stuff all laid out on the porch of the house. And this in an established and pretty expensive area no less. I was happy to see that someone was getting some use out of it!
“I noticed that there was a homeless guy sleeping on the porch of the green one. ”
Perhaps the homeless guy was the realtor?
Hahahahaha! Funny!
Sort of an unpaid security guard there, lol
More bitter renters.
http://www.nytimes.com/2008/06/21/us/21renters.html?_r=1&hp&oref=slogin
“Driven largely by the surge in foreclosures and an unsettled housing market, Americans are renting apartments and houses at the highest level since President Bush started a campaign to expand homeownership in 2002.”
“The percentage of households headed by homeowners, which soared to a record 69.1 percent in 2005, fell to 67.8 percent this year, the sharpest decline in 20 years, according to census data through the end of March. By extension, the percentage of households headed by renters increased to 32.2 percent, from 30.9 percent.”
“The figures, while seemingly modest, reflect a significant shift in national housing trends, housing analysts say, with the notable gains in homeownership achieved under Mr. Bush all but vanishing over the last two years.”
“Many of the new renters, meanwhile, are struggling to get into decent apartments as vacancies decline, rents rise and other renters increasingly stay put.”
As I’ve written in the reports I do for my company, it’s a race between former homeowners and former owned homes back into renting, with the rental market whipsawed in some places depending on which is in the lead.
In the end, it is likely that the housing units going rental will exceed the homeowners going renter, both due to current over-supply and the possibility of McMansion subdivision and household combination.
“Ms. Williams slept at a homeless shelter and at the homes of friends after five apartment complexes rejected her, citing her bad credit and history of foreclosure.”
i hope all those dead beats get treated like this. thats what should happen when you dont honor your debts!!!!!!!!!!!!!
Just a random thought - interesting how 2 renters with bad credit in the article say nearly the same quote about how they’re living where they are, “…by the grace of God…”
The confluence of factors has largely derailed what Mr. Bush called “the ownership society,” his campaign to give millions of people — particularly minority and lower-income families — a shot at homeownership by encouraging lenders to finance more home purchases.
For many minority and lower-income families who viewed homeownership as a stepping stone to building wealth and passing it on to their children, the transition from owning to renting has been the unraveling of a dream. Burdened now by debt and bad credit, some of these families are worse off than they were before they bought.
And my argument during all the madness has always been - will the fallout really be worth a temporary ~5% increase in homeownership? The answer? No way.
However, those who bought into it unfortunately now have to take their lumps. Again, I could have been one of “them” - easily. I don’t make a great salary, I have been at (many) times desperate to buy. But I resisted. I resisted because I knew something wasn’t right, that this couldn’t possibly be sustainable, and I was very frightened of the potential fallout if I bought into it.
And I resisted because I found this site. I say it every now and again, but I feel the need to say it now - thank you to all who have kept me from making a really big mistake! If I ever do finally get my house, I’m throwing an all-out HBB bash!
‘If I ever do finally get my house, I’m throwing an all-out HBB bash!’
Oh, I’m sure you’ll get your house, coasty. You’ll have a huge selection to choose from, and there you’ll be, in the right place at the right time with good credit, down-payment saved up… you can have your own lawn that you can force your kid to mow for his allowance, you can plant a big old garden–all that good stuff to reward you for not being an idjit when you had the opportunity to be one.
“- will the fallout really be worth a temporary ~5% increase in homeownership? The answer? No way.”
This has never been about increasing homeownership. It has ALWAYS been about the flow of monies from the middle class to the upper crust.
Increased homeownership is part of the big lie.
So again back to George W 2002 and his campaign to increase home ownership in the US…well, now we can see that he was the one who backed all this chicanery in the housing market. Good ol republican values. Just get more to buy houses, lets see who gave him the most money/lobbying etc. So, you can’t put all the blame of this debacle on the backs of just the lenders etc. Let me see again who was it, Oh yeah, George W 2002.
Soros, the Man Who Cries Wolf, Now Is Warning of a ‘Superbubble’
By GREG IP
June 21, 2008; Page B1
…
WSJ: You’ve said this is the worst financial crisis since the Great Depression. Yet at its worst, the stock market was only down 18%. That doesn’t seem Depression-like. Is this as bad as it gets?
Mr. Soros: I think that the decline in housing prices is going to be more precipitous and go further than people currently expect. To expect [to come] out of the recession by the end of the year, I find that inconceivable.
But I can envisage a very broad range of scenarios. One would be a very prolonged world-wide recession. I cannot imagine a replay of the ’30s. But you can have a muddle-through replay of the Japanese scenario, 10 years of stagnation.
Great line regarding Greenspan
He believed that if you leave it to markets, everything will be all right. That’s initially self-reinforcing, but eventually self-defeating.
He talked market forces all the time, but did not trust them. Every time market forces started moving against the Fed’s political objectives, he moved to thwart them.
As if the mortgage fallout isn’t bad enough, imagine the frustration with many of those gas guzzler leases? ..and what about all the panicky (herd mentality) vehicle owners who are trading in their guzzlers at huge depreciation’s for more fuel efficient vehicles? Imagine the downward pressure on new and used guzzler prices. I’m thinking the Big Three are in for more bad news. How long before Japanese vehicles dominate the top five selling models?
(Sorry if double post - my first attempt didn’t seem to stick)
It’s a foregone conclusion.
Free homes and free cars for single white females!
Only if they put out.
To apply:
1. Show up naked,
2. With beer.
I’ll get my own beer, if necessary.
I want one of both.
And, I may put out.
hahaha, just kidding, unless it is for brad.
Single females (white) are under- represented in Washington D.C.
I think I found my calling.
Move over cindy sheehan.
We have the right to buy a home,
but
w/o a spousal entity.. fa getta bout it.
Free homes for white girls (single)
Friday, June 20, 2008
Straight Story: The regulators
Economics editor Chris Farrell
Arrests and indictments from the subprime mess are in the news, but how did regulators allow things to get so bad? Economics editor Chris Farrell sets the story straight on this week’s government crackdown.
* Listen to this Story
Many consumers suddenly find credit card debt limits slashed
By Eric Dash
NEW YORK TIMES NEWS SERVICE
June 21, 2008
The easy money that led Americans to depend on credit cards to pay their bills is starting to dry up.
After fostering the explosive growth of consumer debt in recent years, financial companies are reducing the credit limits on cards held by millions of Americans, often without warning.
“Banks that issue cards … are cutting the limits for customers who have run up big debts …”
At the same time banks are increasing limits to those who rarely use their credit cards.
Mark Twain was right on.
Yep, my limits went up, and I keep getting weekly checks from Shittibank.
0% down for 12 months.
I’d play the carry if it were worth anything but it’s too much effort for too little gain.
Really. The good news is because I don’t need them, I have the banks at my feet. The “bad” news is there really isn’t anything they can do for me.
My bank is a glorified clearing agent. What do they “do” for me? Not a heck of a lot.
Milk Carton:
“Have you seen: Reduced HELOC’s and his cousin Credit Card Limits”
Please call if the whereabouts of the two above are found.
This article gets straight to the conundrum now facing the Fed. If they tighten the reigns of monetary policy now, they might strengthen the dollar and reign in inflation, at a cost of crimping U.S. exports and driving mortgage rates to a level that would accelerate a real estate crash which is already playing out at record velocity and depth. If they stand pat or ease, they could trigger a resumption of the dollar’s decline and continue driving oil prices to levels which result in crushingly high U.S. pump prices for gasoline and super market prices for basic foods.
The Fed’s War on Savers has exposed U.S. consumers to years of Pavlovian incentives to avoid saving money, through a combination of negative real FFR rates and inflation in basic consumer goods (food, energy and housing) which appeared to be much higher than indicated by the CPI. Consumers were successfully brainwashed to rely heavily on easy credit, including HELOCs, credit cards, cashout home equity financing, etc, to fund their highfalutin life styles.
It seems as though the typical U.S. consumer loses no matter what course the Fed follows. As the U.S. consumer has been a primary driver of global economic growth for many years, the situation bodes ill for the global economic outlook.
We predicted this.
Why the almighty economists well versed in the holy grail of Samuelson and genuflecting in the general direction of the University of Chicago could not see this remains for future economic historians to detail.
At the very least, it will provide adequate fodder for more academics to earn tenure.
Perhaps the almighty economists have developed too much faith in the almighty Fed’s ability to social engineer every crisis into another bubble.
Well, they have engineered another bubble. It’s just not a bubble they seem to like.
And it’s a bubble with real consequences.
Food and oil or banks?
Sooner or later I think the decision is going to be made for them, and it ain’t gonna be pretty.
if you havent preped for bank failures.
you aint payin attention. You gotta have a basket of goods thats shields you from the global conundrum. Occasionally that means buying the pain. find the capital starved pain that has something to do with the “real” economy….you’ll be fine.
I still contend that higher rates puts a floor under housing faster than any other method, unfortunately…those high rates will cost a bigger than big bank, another IB, and many, many credit unions.
sit back relax, and enjoy the show.
. Consumers were successfully brainwashed to rely heavily on easy credit, including HELOCs, credit cards, cashout home equity financing, etc, to fund their highfalutin life styles.
*************
That lifestyle is going away. Many people are going back to the poor class from where they started. Many from the the middle class are flirting with that diaster and a new rising tide won’t be coming along anytime soon for many of them.
They were never middle class to start with.
Cheap credit is not the same as purchasing power. At the end, you either have to pay it back, or default.
Either way, they are headed back to exactly where they came from except they wasted valuable time along the way which they could’ve used to enhance their own lives.
“Class” is about a lot more than money. You don’t change the class you are in weekly depending on the amount in your bank account.
Middle class = college education, good manners, ability to function in society. Being middle class is kind of normal and not a big deal. I think people on this blog get upper class and middle class confused.
white trash plus millions plus sleaziness does *not* equal upper or middle class as far as I am concerned. Class is something you learn and carry with you regardless of your financial situation.
To me it is “low class” to define class by money only.
Defining class by bank account only seems to be another way of keeping up with the jones or feeling superior to them.
This a perfect spot to put this link into.
http://www.npr.org/templates/story/story.php?storyId=91748712&ft=1&f=1003
Caution:
If you didn’t like mr rodgers, you won’t like this either.
or just the media player link.
http://www.npr.org/templates/player/mediaPlayer.html?action=1&t=1&islist=false&id=91748712&m=91748696
This wave is now cresting on the distant horizon. The effects of this will start to show up in three to six months and snowball from there.
People who are having to use credit cards to buy gas and groceries as the article states are going to find themselves cut off from their cards.
What I think is likely to happen…people will stop paying some of their credit cards bills to free up needed cash (for gas and groceries) and banks will cut more credit….more people stop paying….banks cut more credit…
The Government said we would have a recovery in the second half of this year. Bulls***!!
I am not an economist but here is my stab at a forecast. If the Christmas selling season is a bust this year, thousands of businesses who are trying to hang on will close in 2009 and tens of thousand more jobs will disappear….causing even more job losses.
More foreclosures, more bankruptcies, more job losses and more bank losses. The unwinding continues until it is exhausted, just like the run up did.
What……if anything can stop the cycle?
What is the landscape going to look like when all is said and done?
How bad is the damage going to be?
Reality check.
What could stop it?
Well, view me and others in tinfoil hats, if we didn’t already have most if not all of our military fully extended into an illegal war, now an Occupation, then the PTB would create another War, or something to utilize the Official executive order # 51, check it out on the Gov website. It is real. Martial law, and the way above posting of marines preparing for martial law. Add it up and you get eggroll.
Martial law would not stop the cycle. Raising rates or lowering rates can’t stop it now.
TPTB know how this could play out and have already penciled out a game plan. A lot of people are not sleeping well.
The great crash has only been slowed down, but is playing out like the HBB crowd pretty much saw it. TPTB have more inside information than we do and they already know what is coming.
They have been praying and wishing and hoping for a different outcome. So far they have not been able to change the course.
PB,
It seems to me that the use of all this credit did was to borrow from the future.
O’ boy, this crash is going to hurt big time.
If the FED continues to try to create a bubble out of commodities (food and oil), then it will be even worse!!!
What do you say or can you do? Duck and Cover? Lock and Load? Get to know your neighbors?
I wish that this was a bad nightmare! Unfortunately morning that I wake up, things are not better, but worst.
imho
Here is a really stupid idea…well, maybe not so stupid…it came in a dream or should I say a nightmare…
The US Govt nationalizes all debt and assume ownership of all assets held by US citizens. Corporations also, or they re-incorporate in another country, however we take over there assets in the US.
Then the US Govt. issues funds(250,000 per person as an example) so that the individual can use to buy whatever (house, car, etc)and stock in the surviving businesses. Natural resources and land will be owned by the govt. (could be leased from the govt. on 99 year leases.)
This could get everything started from scratch. By the way, the debt assumed by the US Govt would be universally defaulted on. No foreigner or nation would ever lend us another nickel, however, if this is where we end up after 5, 10, or 15 years anyway, lets speed up the process.
Like I said, a stupid idea
Rule number # Italian food with lots of tomato sauce does not sit well with my constitution…and causes my mind conjure up fantasies and nightmares.
I guess you can say that I am one sick puppy!
In spite of the stupidity of this idea, Americans would pay a lot more attention to what happens in politics, whether at the local, state or federal level.
Heck, they may actually know what representatives are voting for and in tern, vote themselves.
Sometimes you have to think outside the box. God, I hate that statement.
lol
DZZ is gold short x2 much like DUG for oil.
Do you have positions?
Just to add if anyone is interested: DGZ is the 1X short.
(no position)
Regarding “news” about Shaq helping people having problems paying their mortgage….
Shaq probably thought “I’ll just donate a few million to help out a bunch of people” while FB’s probably heard “Shaq will pay off my mortgage.” I’m quite sure Shaq also never thought to look at some of the mortgages and think as an HBB’er and say no way can these people afford the mortgage, even at 0%.
A few years ago a sibling was going through a nasty divorce and mentions the bank had started the foreclosure process, on a house that had cost 65K (no HELOCs, just bad financial choices and being laid off every 18 months). I thought to myself that I am in a position to help by giving a one-time gift of a couple thousand to get caught up on the mortgage (yes, this would be a one-time gift - I’m the cheap one in the family).
Before I offered, I started asking about expenses. Adding everything up, I realized there was no way my sibling could afford the house. Money going out was more than money coming in, and a one time gift would not save the house, so I never offered. My advice was to sell the house or let the bank take the house.
Shaq-a-laq-a-BOOM, baby!
As Olygal put it so succintly, he’s joining the Pantheon of the Gods along with the Sweet Baby Jeebus, St. Joseph, and Hanuman, the Mighty Magic Monkey.
And peter potamus!
The strangest thing about the Fed’s rhetoric, in my opinion, is their pretense that their words and actions somehow have no influence on flagging economic performance. By all appearances, the reality could hardly be farther from their doctrine.
REVIEW & OUTLOOK
Bernanke’s Market Week
June 21, 2008; Page A8
…
What we can’t figure out is what in the world Fed officials are thinking, assuming that’s even the right word. The most precious commodity a Fed Chairman has is credibility. When he makes a widely advertised public commitment to maintain dollar stability, and then he or his minions leak that he has no plans to back that up with any action, he is squandering his own currency. Central banking isn’t an academic seminar where ideas don’t have consequences.
With inflation climbing around the globe, most of it inspired by dollar weakness, the Fed has a growing credibility problem. Mr. Bernanke needs to understand that investors are beginning to suspect that the most important financial official in the world doesn’t seem to appreciate the Fed’s primary role in undermining the greenback. If that conclusion becomes fixed, this week’s market meltdown will look pretty by comparison.
Hoo boy! Big guns but it’s on the weekend.
For the WSJ, that doesn’t really count. If that were a weekday editorial then there’d be some bite to it.
and the key reveals itself:
FFR rate remains unchanged.
Alphabet soup paper swap remains, till the street crushes your bank.
However, increased loan loss provisions is behind the scenes, regulatory cramdown on the individual banks, de facto raise of individual entity capital requirments…..behind the scenes rate hike, at the pause, leading to more banking pressure….which falls on main street…
oil and gold higher.
dollar lower.
equities are still sawtooth down……sell the rips, if you got any.
path of pain for me is dollar rally. equity rally. Global selloffs…. hold on tight gonna be an interesting week.
One for TxChick here…
Finance & Economics
Short-selling
Nasty, brutish and short
Jun 19th 2008
From The Economist print edition
The life of a short-seller is a hard one—especially when markets turn sour and people look for someone to blame