Bits Bucket For August 11, 2008
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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
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Golf Course Communities’ Double Bogey
Demand for Country Club Lifestyle Dries Up in Overbuilt Washington Suburbs
http://www.washingtonpost.com/wp-dyn/content/article/2008/08/10/AR2008081002049.html
Eighteen months ago, buyers would gladly have paid a $25,000 premium for a lot on a fairway at the new Lake Presidential Golf Course, said Aref Hinedi, vice president of marketing for Texas-based Ryko Development. The course opened in May five miles from Oak Creek in Upper Marlboro. “It was simply a question of the bank giving them money,” he said. “It was easy. Now the market is not there any more.”
Fore!
For those of you unfamiliar with W. Colorado, there’s a large land mass called the Uncompahgre Plateau that’s technically where the Colorado Plateau meets the Rocky Mtns. It stretches from Ridgway, Colorado clear into Utah (100 plus miles), and is basically just a long wide very large mesa with numerous drainages, lots of bears, cougars, wild turkeys, and other wildlife, and thick forest.
The locals go there to picnic and hunt. It’s not close to much of anything, and the roads are often impassable in summer, totally closed in winter. It’s actually a pretty wild place, I’ve mtn biked a lot of it (cow trails) and felt pretty lost.
So, here come some urban types who see cheap land not real far from Telluride, though psychologically it’s a different world and takes a couple of hours to get there. They buy up several thousand acres and start a golf course community called Cornerstone, build a lodge, indoor shooting range, “cabins” (nicer than any house I’ve ever had), and luxury homes starting at a million. I know a guy who worked there last winter just trying to keep the snow from shutting everything down, they had to buy their own road equipment just to keep the road open, we’re talking probably 20 miles to the nearest town (Montrose). It gets COLD up there and snows a LOT and nobody in their right mind would want to be there, even in the summers it’s too remote and it takes a long time over marginal dirt roads to even get to Telluride. It’s more like a survivalist compound than a cool tourist trap.
Then they hire the PR people and slam every major magazine with glossy ads. Nice big golf course in the middle of nothing. This area already has at least 8 courses, a couple which are struggling.
It was every developer’s dream to build golf courses and get rich. With the price of gas and this economy, I’d bet the ATV that Cornerstone goes the way of many another boondoggle. Good riddance to that one. The course itself will make good deer and elk grazing, they’ll be stoked and wonder what the hay??
I know a guy at work who invested in a development up on the Rim in N AZ near snowflake, golf courses, horse property all kinds of amenities for rich CA retirees. Nothings happening can’t get the money to start building so he looks at me and says “I’m probably never going to get my money back” I nod and agree “no probably not”
I got my MPGA Card last year, after finally mastering he windmill hole.
The closest I ever get to golf curses is to walk my dogs on the perimeters…nice places after hours, but I don’t take the dogs onto the greens out of consideration. I had a teenaged friend dogsitting once and told her about a nice trail over by the golf course (in Moab, Utah) she could take the dogs on, it actually started by the course but diverged and went up the hill. She got confused and ended up taking the dogs onto the course during business hours, she didn’t know any better, out walking the course with my 3 dogs and her 2. She couldn’t understand why she got some serious looks, thought I’d found a great place to take dogs. I might add she was from a non-golfing culture.
This is my neck of the woods, Montrose is my grocery destination. The area you are describing is quite passable in the wintertime and at that elevation the snow isn’t that bad. It is remote and far from any major cities, but your description of it being in the absolute middle of nowhere and totally inaccessible is a bit of hyperbole. That said, the lifestyle is certainly a far cry from Chicago or San Francisco.
Adam, in a mild winter, you might get partway up Dave Wood Rd, I used to have a house up there, and that’s if the county can get around to plowing up past where the houses are. Cornerstone is WAY up there. That whole area is great snowmobiling in winter if you’re into that kind of thing. And I dare say you, being used to Lake City snows, wouldn’t think much of that kind of distance, but tell that to an urban type. I’ve spent a number of years in Montrose, went to HS there, and my family and I have been up to the plateau many times in winter when it was totally shut down from snow. My dad used to snowcat in to maintain telecommunications towers for the Dept. of Energy. Hyperbole it’s not, try going up there in the dead of winter and see how remote it feels.
Jeezlouise!!! Sorry about the multiple posts, slow connect and can’t tell when it blows…
Good points! Especially considering how most sun belters have no idea of how to drive in the snow.
4 wheel drive means 4 wheel slide!
Adam, in a mild winter, you might get partway up Dave Wood Rd, I used to have a house up there, and that’s if the county can get around to plowing up past where the houses are. Cornerstone is WAY up there. That whole area is great snowmobiling in winter if you’re into that kind of thing. And I dare say you, being used to Lake City snows, wouldn’t think much of that kind of distance, but tell that to an urban type. I’ve spent a number of years in Montrose, went to HS there, and my family and I have been up to the plateau many times in winter when it was totally shut down from snow. My dad used to snowcat in to maintain telecommunications towers for the Dept. of Energy. My family used to spend time on the ranch that was sold to Cornerstone, it belonged to an outfitter who was friends of my dad. Hyperbole it’s not, try going up there in the dead of winter and see how remote it feels.
Adam, in a mild winter, you might get partway up Dave Wood Rd, I used to have a house up there, and that’s if the county can get around to plowing up past where the houses are. Cornerstone is WAY up there, up by Horsefly. That whole area is great snowmobiling in winter if you’re into that kind of thing. And I dare say you, being used to Lake City snows, wouldn’t think much of that kind of distance, but tell that to an urban type. I’ve spent a number of years in Montrose, went to HS there, and my family and I have been up to the plateau many times in winter when it was totally shut down from snow. My dad used to snowcat in to maintain telecommunications towers for the Dept. of Energy. My family used to spend time on the ranch that was sold to Cornerstone, it belonged to an outfitter who was friends of my dad. Hyperbole it’s not, try going up there in the dead of winter and see how remote it feels.
Hey, I got it the first time!
Yeah, I tried to post sorry about the multiple posting, my connect isn’t so great and I can’t tell if it’s posted or not. This will probably post several times, too. My comment wasn’t really all that profound.
BTW, Adam, if you’re ever in Montrose and want to go to the Coffee Trader and talk housing, drop me an email.
Hey thanks for the invite. Anyone else on the west slope up for a meet up? I read your response and your point is well taken. Driving off of the main roads around Montrose is pretty well impossible, especially with winters like the last. I’ve taken a closer look at the area you’re talking about, and you’re right, it isn’t a place you’re going to leisurely come and go from come January.
Close to Telluride huh? Next thing you know they’ll be telling people to take Black Bear Pass to get to Cornerstone
That’ll get rid of them noobies real fast.
Wrong direction, too, though I guess you could go that way. Anyone here remember Ski Dallas?
if i remember correctly, that’s the barely passable 4 wheel drive only road that (in the 1970’s at least) had a sign that said “you don’t have to be crazy to drive on this road, but it helps.”
Fore!closure
that was funny!
Just for kicks we toured a model in that Lake Presidential area a few months ago. It’s acres and acres and acres of land with roads built but hardly any houses. The section we saw had only the model and maybe one house under construction. The house we toured was ridiculous. It was so big that I almost got lost. I felt like I was in a hotel, thinking “now, which floor is the spa and exercise room” and “is there any informational sign pointing to the home theater”? I can’t imagine what my husband and I would do with such a white elephant. I guess if we had 3-4 kids plus some in-laws living with us I guess it would make more sense. Even in that case, there would still be a lot of room.
Geesh, don’t you know, you’re supposed to “entertain.”
At least that’s what they say all the time on HGTV…
Bingo. You are, evidently, supposed to buy a house to comfortably fit the absolute maximum number of people you could ever want to spend time with even if you only have that many over once every other year. Same thing with the SUV big enough to haul an entire little league team, or a fridge large enough to swallow all the leftovers from Thanksgiving dinner cooked for 30 and eaten only by 7.
The idea of occasionally being cramped or having to make two or three trips or demand that your dinner guests RSVP a week ahead of time has disappeared.
And of course, even in the big McMansion, all those people still packed into the kitchen. That’s part of what kicked off the granite countertop craze, and what kicked off the Not So Big House movement.
I felt like I was in a hotel,
That reminds me of what finance expert and all-around regular guy Jonathan Pond says when empty-nesters want to keep the big familystead “for when the grand-kids visit:”
1. For the money you save by selling the big house, the few times they visit, you could put them up at the Ritz!
2. Pond’s law #4: the greater the number of bedrooms in your house, the greater the likelihood that your grown children will need to come live with you.
You’ll love the story one of my local realtors told me. She sold her home and downsized when her youngest went to college. “Had to” turn around and purchase a larger home again when it turned out the daughter wanted to move back in.
Lol..I always crack up when people on HGTV talk about how they love to entertain. Who do you know who does that?? Nobody entertains…it’s just talk…speaking of complete bulls*it..how about that stupid show…”my house is worth what???” Just once I would like them to say that the house had gone down in value..OR..what happened when the owner actually listed the house at the ridiculous amount the RE agent tells them…400 K appreciation in one year!! A 1.5 million $ tract house in West Palm Beach or Tampa or Miami…say what??
Well, I don’t use the term “entertain,” as that sounds like my parents and their bridge clubs, back in the day.
But I like to cook and we have a pretty constant round of friends for dinner, potlucks, and the like. When there is more than 4 for dinner, we set up the card table, more than 8, neighbors bring their card table(s). Last night at the neighbors, we sat 6 around a table for 4. In Texas, you can manage even an overflow crowd in a small house if you have a decent size deck or usable yard. People like to sit outside and have drinks and cook on the grill, even if it’s really hot or a little cold. We have a good time in a small space without feeling too cramped.
On the other hand, I still laugh when I remember the party at a McMansion down the block. The house is huge, but the weather was nice, so guests were standing outside in the tiny yard (lot is covered to the max with house and garage and driveway) surrounded by a high decorative iron fence. They were standing around cocktail party style in this little yard about the size of the living area in my small house, and I assume they were having a good time, but from outside it looked like they were held in a pen!
My little rental house works just fine for cookouts in the summer, Steelers parties in the fall and winter, Card games and unplanned parties year round.
I could use an extra bathroom, but in Western PA, it isn’t all that unusual for us guys to use the shrubs out back as a urinal if the indoor toilet is in use.
But I wouldn’t call it entertaining, we just call it getting together and having a few cold beers no matter what the occasion.
Well, this mega mansion had a home gym with it’s own shower and sauna thing attached to a big room staged with a big screen t.v., a bar, and a pool table, plus a bonus room and home theater with stadium-type sinking (this was just the basement). I stood there thinking about how sad it would be if I actually were to buy such a place and we ended up hanging out in the “bar” at our house with the other suburban McMansion couples, playing pool. I had a feeling of gloomy claustrophobia. I think I’d rather get a smaller house near places with actual entertainment that I don’t have to clean and where it’s not just us and the luck of the draw neighborhood yupsters.
“in Western PA, it isn’t all that unusual for us guys to use the shrubs out back as a urinal if the indoor toilet is in use”
In Gary, IN they sometimes use the sides of the buildings on the main streets for the same purpose.
“use the shrubs out back as a urinal”
I guess if you did call it entertaining, it would be “casual entertaining…”
Statewide, N.C. foreclosure filings were up 19 percent through June, compared with the first six months of last year, according to Observer analysis of state data. These filings mark the start of foreclosures. Filings this year could top 60,000, an increase of more than 10,000 from last year’s historic high.
http://www.newsobserver.com/business/story/1172929.html
Just goes to show that even in areas that didn’t experience huge rates of housing apppreciation, they still have problems. The overbuilding and overlending still happened in many parts of NC. That in itself is enough kindling to start one heck of a foreclosure fire once the conditions are right and the kindling is dry.
Increasing unemployment in the banking, construction and real estate fields will only help to keep the fire going long enough to feed off of itself.
I wish we had some stories behind these NC foreclosure numbers. NC appears to be the place of the rising sun for many Syracuse workers. It comes up often in the “business” forum which sometimes doubles for a Magna Union info discussion site. Often the posts are from former Syracusans thumming their nose at the rest of us because reportedly life is so much better for them. (I expect most of these statements are based in fact.) The company I had my furniture in storage with reported noticing a large exodus heading to NC. Just Saturday at another family get-together, I was introduced to a friend’s brother that was moving to NC this weekend. He’s in finance and is expecting to be in heavy demand for years to come.
These numbers do, however, show not everyone finds their pot of gold.
Besides NY, NC will suffer mightily from the banking fallout. Some of the big banks will fail, and lay off thousands in Charlotte.
It can be hard to find jobs in some parts of NC. People often mention dismissively, “oh, you’re in tech, you can find jobs in RTP”. What they forget to consider is that it’s very much old boy’s network here, and when you do get in, the pay is fairly low compared to the costs of housing around here (Apex/Cary) “Starting in the low 300’s”. I know some friends who have bought 2500+ sq. ft. homes and I know they make less than I do and I just wonder how they swing it … (answer: credit cards up to eyeballs).
I won’t be playing that game here either, so pretty soon I’ll be “exNCguy” too
Some friends of friends got freaked about Florida RE, got lucky, and sold their house at the beginning of the crash. The breadwinner is a banker, makes good money (100k). They went to the Carolinas (not sure if NC or SC) and immed. bought a house, thinking she’d get another banking job ASAP, as she’s highly trained (acquisitions and mergers).
Now she’s commuting back to her original employer in FL, can’t find work in the Carolinas. She’s on a consultant basis now and things are very sketchy.
My brother lives in metro Raleigh and was laid off twice in the past year. Both times he was able to land a new, 100K job in less than a couple of weeks.
Same thing happened to my niece; Naples to Raleigh, laid off, back to old employer in Naples at lower pay; all in last 12 months.
NC was a big destination for Syracusians in the early ’90s, as I remember. I had several co-workers who left Syr. for NC at that time.
Office Building Deals Drop Off
Six-Month Sales Plunge 61 Percent in the District, 87 Percent in Northern Va.
http://www.washingtonpost.com/wp-dyn/content/article/2008/08/10/AR2008081001990.html
In the District, $1.4 billion worth of office space traded hands in the first six months of the year, a 61 percent drop from the $3.6 billion sold by mid-2007, according to Real Capital Analytics of New York. The drop-off was even more pronounced in Northern Virginia, where building sales plummeted 87 percent, to $914 million from $6.8 billion a year ago. In Maryland’s suburbs, building sales fell 13 percent, to $459 million from $527 million.
An office space superNoVa.
At least 3 buildings within 6 blocks of the White House (on the west side) are in some part of the demolish/rebuild process. One was taken down last year and the new skeleton is already up. One was demolished last May/June and no new building yet that I can see though the sign for what will be there has been up since before demolition began. The latest one (right across the street from the first) is in early stages of being brought down.
There wasn’t anything wrong with the old ones that I could see.
Please note that because of building restrictions in the District, none of the replacements will be able to have much more leaseable space than the old ones.
Actually, the one at Conn & K st was a waffle slab conctruction so they will be able to squeese another floor into the new building using conventional post-stressed slab frame that is popular in DC now. Given that address, another floor of rentable space makes the demolition / construction worth it. There are a number of factors that affect the decision to re-build vs. tear it down and start over but leasable area is the main driver.
I’m an architect so I follow these things pretty closely and my firm is still fairly busy but I do worry, A LOT. The ABR index (architectural billing records) took a swan dive about a year ago and hasn’t come back. Sooner or later it’s going to cut the heart out of the A&D biz and no, it ISN’T different here
DC is as screwed as everywhere else.
How many years does IRS require to fully depreciate a commercial office building?
Just got back from a highly enjoyable 12 day backpack in the High Sierra…
We covered lots of real estate in our walk, but saw little distress in the market~
Good to have you back. We missed your commentary during a period when the commodities markets were undergoing an interesting correction.
One of my favorite things about being in the backcountry, is the complete and utter lack of information from the outside world…
It’s refreshing to know nothing, once in awhile.
Ignorance is bliss?
Sometimes…
The only information we took with us was the 2 volumes of “I Will Bear Witness” by Victor Klemperer.
I am quite a fan of oral history, and Klemperer was the perfect man for the job. A critical thinker, who recorded his personal saga of Nazi Germany from 1933 to 1945, as it was happening.
That he was a German Jew in Dresden for the duration of the reign of a madman, makes it all the more interesting…
Highly Recommended!
http://www.amazon.com/Will-Bear-Witness-1933-1941-Paperbacks/dp/0375753788
Coming out after a time in the backcountry can be quite the culture shock. Reminds me of a movie I saw once back in college in an anthro class that showed an aboriginal fellow taking his first airplane ride over some city in Australia. The look on his face said it all. He’d never even heard of airplanes or cities until then. I bet he would’ve qualified for a loan for an expensive house, though.
As we were cruising down to Whitney Portal, all we could hear was the constant whine of RV generators from about a mile away…
Welcome back to the future.
‘I bet he would’ve qualified for a loan for an expensive house, though.’
Hahahahaha! Good one, losty!
There you are, Oly! Someone here yesterday was accusing you of being pro-development (tongue in cheek). I was waiting for your reply on that one…
Predictably, it was NYCityBoy.
What?! I was out getting in my firewood and then dinking around in the forest yesterday and didn’t see that ENTIRELY objectionable phrase. Pro-dev..pro-devel…shoots, I can’t even say the word.
If I had seen that, I woulda had to drive myself to NYC, find NYCityboy, and give him the b*tch-slapping he so richly deserves! AND his cats!
Actually, I’m just glad to see him back. You, too, losty.
I went to Utarr for two little weeks and when I got back to civilization and a computer I didn’t see a sign of either of you. ‘Bout near broke my heart.
“As we were cruising down to Whitney Portal, all we could hear was the constant whine of RV generators from about a mile away…”
Exactly why I love bp and frequently hate car-camping. I’ve never run across a backpacker carrying a generator or a bumping truck-stereo. Even if I did, I’m pretty sure I could out-pace them what with all that extra weight and stay far away from them on the trail.
I prefer Werner Klemperer. HOGANNNNNN!!!
I love being lost out there somewhere. It’s the best feeling in the world.
I really look forward to those Fridays “I’ll be out of cell phone coverage in Death Valley”
Ah … joy.
Agree 100%. Nothing like being Lost.
LOL - somehow I knew that was coming.
Sounds like an awesome trip aladin. I miss the Sierras. The Appalachians are nice, but somehow not quite the same. You probably said it before you left, but where did you go? Must have been some serious backcountry.
We walked the High Sierra trail from one side of the mountains to the other side, including many days off-trail, in search of Nirvana…
Perhaps 25,000 feet of altitude change up and down, walking approximately 100,000 steps~
“walking approximately 100,000 steps”
You almost made it to Isengard Treebeard.
Our friend Yogi is Isengard Treebeard.
He walks 90 days a summer in the Sierra, solo usually.
We ran into him @ Kern Hot Springs last week, after he’d come back from climbing a bunch of mountains on the Great Western Divide…
Awesome. I’ve done just the Whitney portion of that, and looked at much of the rest longingly from the top.
Alas, wife and kids and other things. In another lifetime, or maybe retirement…
“commodities markets were undergoing an interesting correction”
Nice little “spin” on interesting correction on commodities. I, myself, might call it a “bubble”, Professor Bear.
Didn’t the housing bubble start with an “interesting correction”?
I am thinking today might be a great day to buy the dip on gold — already down $31.80 on a day when Russian tanks marching into Georgia would be expected to drive up safe haven prices. What gives?
Nothing makes any sense anymore.
Exactly! We are approaching market efficiency through the back door of utter abandonment of fundamental-based valuations.
We saw this the last time conflict broke out too: last summer when Israel opened fire on Hezbollah targets in Lebanon, gold crashed. Seems like that any violence propels the USD as a “safe haven” status.
The question now is will 2008 resemble 1974-1976, when gold lost 50% of its value (from $200/oz to $100/oz)? Heck, silver and palladium are already nearly 50% of their highs just since March. And the stock market keeps rallying despite the news getting worse out there. Somehow, I don’t think that just because oil has dropped that food prices are magically going to go down, or that Dow Chemical is going to rescind their multiple price increases on product enacted so far this year, or that airlines are going to drop all these fees they’ve added in the past several months. But, the mood on Wall Street is party-on.
WStreet party on? Take into account that bank stocks are a small fraction of pre-bubble prices. WaMu was near $45 a share in 2002 and is now near $5? FNM was around $90 a share and is now near $8.
Is buying banks at near 1/10 their pre-bubble prices a “party”?
As for the USD being a safe haven in times of war, i rather think the USA itself is the safe haven, and smart money will move towards it’s inherent strength.
The PM bubble market was fueled by and paralleled the easy-money housing bubble. As it deflates I expect gold, for instance, to fall back to 2002 prices.. like near $250/oz.
Welcome back, Lad.
Driving back from Lone Pine, Ca. yesterday, we noticed quite a few billboards from around Bakersfield to Fresno, by McMillin Homes offering Zero Down if you’d only buy a new house from them.
Be quick though, as this special offer expires September 30th…
McMillin along with Centex were the worst offenders in the housing crash in the Visalia area. They kept building, and people kept buying, with OPM of course. When McMillin goes bankrupt will be the day I open up my finer bottles of wine.
Olympics for the French
“The Americans? We’re going to smash them. That’s what we came here for,” Bernard said. Aug 7
“A fingertip did the victory. It is nothing.” Amaury Leveaux Aug 11
Has anybody else noticed the drop in prices on EBay over the weekend? Is it the result of the Olympics? I got some needed parts for half of July’s selling prices. Now I am looking for some toys.
That was an incredible race. Absolutely incredible.
I don’t frequent ebay much, but Craigs list volume is way way down. However, I had mostly been scouting out furniture, and the down volume seemed natural since the students who wanted to sell out are gone and grown ups are more likely to want to be settled in a new place by September, not just begging folks to buy their “only used one year” couches.
I needed to see that race.
I needed to see an American reach down to last drop of all he had to get something he wanted so badly.
Woke my poor husband up hootin’ and hollerin’.
And what a bonus to watch the French team walking around like they didn’t understand what just hit them. Pure karma!
I don’t know why the French never learn that having an attitude can really push Americans to win. They’ve done this over and over and over.
I was thinking the same thing. The trash talk was just fuel for the fire.
The French did at least seem to get over it for the medal ceremony - smiled and accepted the silver. But right after the race? You never saw longer faces. They were bereft.
The last leg was incredible, but I’ll give some credit to the swimmer in the third leg too. He was one of the newbies who swam in the prelim to qualify the team even though there was only a small chance he was going to be allowed to swim in the final to get a chance at a medal. He took over with a very small lead, lost it and was a bit behind. But towards the end of his leg, he seriously closed his gap. It was a heck of a swim for all of them.
“If you fail to prepare, you’re prepared to fail.”
Mark Spitz
Like he would know?
NBC is killin’ me. The events aren’t live on the West Coast. It was especially maddening seeing the word “live” on the TV, only to go online to see Phelps had already won his first medal. Grr! Why not show it live on the west coast? People would watch!
I’ll stream, or at least not peek online, from here on out…
I’ve watched a total of about an hour of olympics since the corp’se took over 25 years ago…
Mom just asked if I was watching the games.
Nope. Too much hype about China etc.
And commercials way up the Yangtze. Sheesh
And commercials way up the Yangtze
Do not, I repeat, do NOT watch American Football! The actual commercials are bad enough, but it’s the embedded advertising that gets me. The chalk on the field is sponsored, a fourth-down measurment is sponsored, every time they say the score or do a replay, it’s sponsored, even the chalk on the field is sponsored.
OK OK I’m getting carried away, but nothing surprises me. BTW, did you know that the replay of the “all-in moment” in poker (I kid you not, they have replays of the all-in moment) is sponsored by a deodorant company. And that airlines are looking for advertising to place on the motion-sickness bag (rumor is they contacted Dramamine.)
College students who need loans to fund their educations are finding them hard to obtain this year. One has to wonder how much they should thank our nation’s banking sector for luring investors to pour hundreds of billions of dollars in loanable funds down the auction rate and subprime securitization rat holes in recent years?
PAGE ONE
Students Face Hit As Private Lending Dries Up
By ROBERT TOMSHO
August 11, 2008; Page A1
A retreat by private-sector lenders from the market for education loans is threatening to keep thousands of students out of college in the coming academic year.
About 10% of the nine million student borrowers in the U.S. seek such private loans, which supplement the limited amounts available from government-aid programs. Over the past decade, as government grants and loans have failed to keep pace with rising tuitions, private-loan borrowing has increased more than tenfold to $17.1 billion annually.
More than two dozen lenders, including Bank of America Corp. and Citigroup Inc., have stopped or curtailed private lending to students since the beginning of the last school year. On Tuesday, Wachovia Corp. joined their ranks. Ferris Morrison, a Wachovia spokeswoman, said the bank decided to stop making private loans to undergraduates after “evaluating our organization in the current environment.” Lenders have cut back on making such loans as investors have shunned the securities they rely upon to raise lending capital.
the banks have become so used to making shyster loans they no longer feel the need to make honest loans.
They don’t make loans at all anymore. They originate loans in order to bundle and sell them as securities. If they can’t sell the securities, they can’t make new loans. They don’t have any money to lend.
Sorry to come off like an intellectual snob, but is cosmetology really a profession that requires a college education to pursue? And is it possible to recover $15,600/year in tuition off a cosmetologist’s future income stream? I am guessing this might not pencil out as an investment.
More than 50 students a year used to be approved for private loans at the International Academy, a cosmetology school in Daytona Beach, Fla. So far this year, administrators say there have only been three, and the recipients face interest rates as high as 23%, more than double the typical rates of a year ago. As a result, the school, which charges $15,600 in tuition for its cosmetology program, says it expects some won’t be able to enroll.
Those turned down for loans include Patricia Bannister, a 22-year-old who hoped to become a hairdresser and use the income to eventually pursue a teaching degree. School officials say Ms. Bannister fits the credit profile of loan applicants who have been approved in the past, but this year she was rejected by three lenders with little explanation.
“People are constantly telling you to go to school and, all of a sudden, when you try to get in you can’t get anywhere,” says Ms. Bannister, who now works as a program director at a karate school and has put off plans to go to school.
then lower the tution?
would that be deflationary?
The college education bubble was created by the same easy money provided to the housing bubble. It is about pop….sell your stock in WyoTech, Heald, etc. Many of them were just debt factories anyway. No jobs waiting on the other side, just $30,000 in loans the student can not pay back and no bankruptcy will solve it, since student loans are excluded….
First, on a related note, I’d like to apologize for my “you are all sunk” comment last Friday. I was referring to advanced degrees in science and engineering. The background class material, research lab time, paper-writing, presenating, and connection-making are almost as good as five years of entry-level job experience.
OK. Cosmetology is not an official college degree. The 15K is probably a 12 or 18 month trade school program (although 15K is awfully steep.) What puzzles me is that our intrepid Ms. Bannister is 22. Usually you go for trade school just after high school, or even while IN high school. What was she doing between 18 and 22? Maybe she was off getting a college degree because everyone else had.
It’s a bad state of affairs when you need a college degree just to enter the game in any career. Back when all you needed was a GED, at least the GED didn’t cost $50K.
For what it’s worth……..(from personal experience).
Sometimes it takes a few years after high school to figure out what you want to do (or better yet, what you DO NOT want to do). Working a year or two at minimum wage jobs after high school is a great motivator to go to college, or get some technical training.
No worries re: “you are all sunk”.
We all bring different perspectives to the mix when we make our comments. Sometimes the intepretation doesn’t translate so well. I so prefer to be engaged and get a chance to clarify than to be ignored.
And besides, I enjoy all your other posts.
Hey CA, As I recall, you asked for further info on the camera’s being set up in Illinois? This came across my path.
http://www.infowars.com/?p=3806
Thanks auger. I took a peek. The paint ball comments on this link cracked me up. If Illinois does a system like NY, the cameras will be about 100ft up. Can you imagine how much those babies cost the state? I don’t think it’s about speeding tickets. I can only imagine how accurate those cameras must be.
Professional Hair Dressing. The other PhD.
The one cosmetologist I know lives in Florida and is making an income of 150K+/year under the table, especially with minor dermatological procedures to remove skin tags, hair removal, bleaching certain body parts, etc. The sky is the limit when it comes to vanity, and her business hasn’t slowed down one bit.
I got my hair degree for free.
I too presume that the tuition is for the number of months of training required to be eligible for licensing as a cosmetologist after passing a state examination.
$15K+ does seem high. Perhaps this is a high-end establishment, offering seminars with well-known fashion industry colorists, stylists, and make-up artists in addition to the standard required courses in color mixing, blow drying, scissor sharpening, floor sweeping.
In Texas, by some obscure loophole, you can take the cosmetology licensing exam after completing barber school. That’s what my hairdresser did thirty years ago. After her BA, she wanted vocational training in the shortest time possible, learned about hair and cutting it in barber school, taught herself what she needed to know about perms and color, and passed the licensing exam. She is one of the smartest and most self-actuating people I know, and makes a living with time left to pursue her many interests and avocations.
A cosmological note:
The Perseid meteor shower is playing in a theatre near you the next few nights, after dark.
Cosmetology / cosmology - I hope I don’t sound like an intellectual snob now. A few years ago, friends of ours - married senior professors now retired - had a dinner party to welcome new graduate students and junior faculty. The guests were the usual mixture of anthropologists and regional specialists, speakers of certain languages, except that one new graduate student’s fiance was either a cosmetologist or a cosmetology student, young.
At dinner, she was seated next to our host. These parties were of the sort where at dinner much of the conversation is general around the table, and host and hostess were good at managing that type of setting. In drawing the young cosmetologist into the conversation, our host misapprehended that she was a student of cosmology.
I can still see it: our host talking about the origins of the universe and asking her opinion, the young lady smiling and doing her best to carry out her designated conversational role, and the hostess saying from the other end of the table, “Bob, she’s not a cosmOLogist, she’s a cosmeTOLogist, she does hair!” but Bob (for all his merits) tended not to pay attention to his wife, especially when he had a few glasses of wine and the opportunity to expound on a new topic!
That’s funny…
A few years ago on a week-long backpack with 5 friends, one of my friends kept talking about how much he liked telemarking (as in telemark skis) and another friend (who didn’t know him all that well) came up to me after a few days and inquired why I hung out with slimy telemarketers?
“…our host misapprehended that she was a student of cosmology.”
LMFAO
“The Perseid meteor shower is playing in a theatre near you the next few nights, after dark.”
Perseids, shmerseids.
I saw the great Leonid Meteor Storm of 1966 while at Ft. Benning, GA. Basic training, standing in formation pre-dawn, ready to begin warm-up calesthenics and then a pre-breakfast run.
What a sight!
Apparently those in Az. & N.M. had the best viewing platform for the 1966 show, utterly spectacular by all accounts…
We watched as many as 45 meteors per minute, in the best Leonid lately, about 6 years ago.
PAGE ONE
Mortgage-Market Trouble Reaches Big Credit Unions
By MARK MAREMONT
August 11, 2008; Page A1
Five of the nation’s largest credit unions are reporting big paper losses on mortgage-related securities, a sign that housing-market distress is spreading even to the most risk-averse financial sectors.
The federal regulator overseeing credit unions says the losses are likely to be reversed when mortgage markets stabilize, and that the institutions are sound and adequately capitalized. But some outside observers are concerned that the credit unions are underestimating the depth of their mortgage-market problems.
…
The five corporates showing big mortgage-related losses, according to federal regulatory filings, are U.S. Central Federal Credit Union; Western Corporate Federal Credit Union; Members United Corporate Federal Credit Union; Southwest Corporate Federal Credit Union; and Constitution Corporate Federal Credit Union. Together, they reported about $5.7 billion in “unrealized” losses as of the end of May, the filings indicate. Unrealized losses happen when the market value of a security falls, even if it hasn’t been sold.
The rationalizations of these credit union investment officers have a very familiar ring to them.
The big credit unions, like other investors, generally were caught unprepared for the meltdown in mortgage markets that began in mid-2007. Buyers became scarce, and even some high-rated investments dropped sharply in value.
The result: Some corporate credit unions have been forced to record large unrealized losses on their assets, even though they continue to own the securities. For example, Southwest Corporate reported $672 million in such losses as of the end of May. The Plano, Texas-based company, with $12.2 billion in total assets, says the problems are centered on about $2.5 billion in securities backed by subprime or Alt-A mortgages and home-equity loans.
Bruce Fox, Southwest Corporate’s chief investment officer, says the securities it holds generally are safer than the ones causing massive losses on Wall Street. “These are very high-quality assets, and all of them are paying principal or interest at the moment,” he says. As of the end of May, 94% of its mortgage-related securities were still rated AAA. Instead of selling at what it views as distressed prices, Southwest plans to hold the investments until they recover or until maturity, he says.
Crucial Contention
The contention that the mortgage losses are temporary is a crucial one for the corporate credit unions. Under accounting and regulatory rules, temporary losses don’t eat into earnings or capital, while permanent losses do. (Financial institutions are required to have adequate capital, usually expressed as a percentage of assets.)
In the case of Southwest Corporate, if it counted as permanent $100 million of its $672 million in “unrealized” losses as of the end of May, it would have fallen below the minimum capital threshold set by the NCUA. Unlike banks, credit unions can’t easily raise new capital, which they generally get from accumulating earnings over the years.
Mr. Fox says there’s “a very low probability” of any significant permanent write-offs. Southwest’s capital, he adds, continues to grow with strong earnings.
Reminds me of the scene in Best Little Whorehouse in Texas where the Governor, played by Charles Durning, is asked a question, and he sings “Ooo, I love to dance the little sidestep…”
It’s all contained!
martial law USA:
HELENA-WEST HELENA, Ark. (AP) - Helena-West Helena Mayor James Valley says he ordered a round-the-clock curfew and heavy police patrol in a ten-block section of town because the neighborhood was “under siege with repeated gunfire, loitering, drug dealing and other general mayhem.”
Valley ordered the emergency curfew Thursday, effective immediately. It was still in place today. He said it would remain in place as long as the problems persist or until the city council can come up with a long-term plan at its August 19th meeting.
Thursday night, 18 to 20 police officers carrying M-16 rifles, shotguns and night-vision scopes patrolled the “curfew zone.”
http://www.wreg.com/Global/story.asp?S=8818645
Where’s Sly Stallone (Judge Dredd) when you need him?
I have never heard of Helena, Ark. This must be one heck of a Hell hole to require this type of crackdown by police.
I wouldn’t mind seeing this on an episode of cops.
Races in West Helena:
* Black (65.7%)
* White Non-Hispanic (32.4%)
* Hispanic (1.0%)
* Two or more races (0.6%)
There’s many a town in the ex-confederacy that sports those very same numbers, as far as breakdown of who’s who…
NYC has a fairly large minority population. Perhaps the DJ would like to live in a lockdown situation?
What conclusion would you like us to draw? That cities with minority populations should be policed like Fallujah?
aNYCdj gives us no insight as to why this town is somehow special, considering there is nothing unusual in the racial breakdown of this community in the South. His post does more to explain what kind of person he really is rather than explains the crime wave or the police response.
Hey, he loves his cats, so he can’t be all bad.
Even though the crime is bad there the mayor and police chief should be hung for violating the constitution.
Constitution? What’s that? Everything I know about my rights I learned from watching ‘Cops’. And I never put my hands in my pockets or move ‘aggressively’.
“Cops” is often filmed in Palm Beach County. It’s the best show to watch if you like to watch people’s rights being trampled right before your eyes.
I remember when Cops first came on (must have been ‘91 or ‘92) thinking that this is a great show because everyone would realize how frequently their rights are under siege in the modern world; and maybe it would inspire some change in the proper direction.
Wow was I ever wrong on that one.
I watch “Cops”, see all of the dumb-ass people they have to deal with, and wonder why they don’t just pull out their batons and beat the crap out of some of these people, for general principle.
If you,ve has stuff broken-into, stolen, and destroyed-in-the-act-of-stealing-something-else as much as I have, you find that you aren’t too concerned about the “civil rights” of some peckerwood trolling your neighborhood at 3:00 am.
Go talk to the folks in Mexico about corrupt cops.
This is only the begining Peter. As long as citizens continue to allow this type of police control, it will only get worse. SHAMEFUL!
Since around 2000, i’ve noticed that local police departments have much more militaristic looking uniforms than they used to wear previously.
the emperor has no close…
Come to Palm Beach County where it’s very military-like uniforms and officers drive their squad cars home. You’d swear you were in a police state for sure.
I’d willingly pay extra for a home between two cops who drove their company cars home.
I’ve known perhaps 5 or 6 cops in my life, and they were all about the power trip, every last one of them.
I’ve known perhaps 5 or 6 cops in my life, and they were all about the power trip, every last one of them.
I have the same experience. In one case, there was a cop that lived in my nieghborhood and hung out with us time to time. Whenever he was on duty if he heard a call about a noise disturbance he knew it was probably us and would “handle it”, which just meant he kept the cops off our backs and let us know to tone it down a bit.
He was/is a nice guy if you know him, but from what I hear (my wife was a paramedic and of course worked with all the cops a lot) he was a major a-hole when on duty. So basically, a power trip typical ahole who gives special privilages to his friends. Typical cop.
‘I’ve known perhaps 5 or 6 cops in my life, and they were all about the power trip, every last one of them.’
I know and have known quite a few more than 5 or 6 cops (in a biblical and also a non-biblical sense, haw haw ) and there are good ones and bad ones, power-freaks and also people who want to serve and protect and do right. Same as there are in each and any profession. In MY experience, the good cops have far outweighed the bad ones. And that’s even including the ones I knew so well in my misspent teen years in Utarr, where every single county deputy and emergency room staffer in a 5 county radius knew my brothers on a first name basis. (They were good boys, but fairly high-strung….well, okay, maybe they weren’t good boys. But I STILL like cops.)
I’ve known perhaps 5 or 6 cops in my life, and they were all about the power trip, every last one of them.
I’m pretty anti-authoritarian by nature, but I know several good cops.
I even know a good Chicago cop, a subspecies that doesn’t have the best reputation for kindness and honesty. I agree with Olygal, cops come in all varieties — same as the rest of us.
‘…he was a major a-hole when on duty.’
Yeah! Cops should learn to be sweet and kind when walking up to a drunk assh*le who could have some knives, guns, and/or syringes on his or her person and is waving a kid around or beating up an old lady or whatever it is that drunk assh*les like to do.
(in a biblical and also a non-biblical sense, haw haw )
Upholstered weaponry?
Cops should learn to be sweet and kind when walking up to a drunk assh*le who could have some knives, guns, and/or syringes on his or her person and is waving a kid around or beating up an old lady
Yeah, because that just happens all the time.
It’s like the myth that paramedics spend all their time rescuing people from the brink of death, or that firemen spend all their time fighting ferocious infernos.
In reality, firemen spend most of their time responding to minor car accidents or small grass fires. Paramedics spend most of their time acting as a taxi transporting nursing home residents to some doctor or other. And cops spend most of their time writing tickets to soccer moms, or harrasing/intimidating college students or people who are the wrong color, or who drive a vehicle that “looks like” they might be doing something wrong.
But your hyperbole is, as always, entertaining.
cops come in all varieties — same as the rest of us.
No doubt, but as with any group there are sometimes some attributes disproportionately represented. For whatever reason, aholes seem to be disproportionately represented among men in blue.
NYC one early Sun AM-8ish pulling up to a hotel, no one around but 2 cops holding a guy down, beating with 2 sticks and kicking. Didn’t seem like the guy being beaten had been a nuisance, or much of one against 2 cops.
Then again, have had good cops and certainly firemen to save the day for me and others.
In reality, firemen spend most of their time responding to minor car accidents or small grass fires. Paramedics spend most of their time acting as a taxi transporting nursing home residents to some doctor or other. And cops spend most of their time writing tickets to soccer moms, or harrasing/intimidating college students or people who are the wrong color, or who drive a vehicle that “looks like” they might be doing something wrong.
They do? I have no idea what ratio any of these people do of heroic to mundane stuff. Have you done ride alongs, etc? I do notice that I get less speeding tickets when I drive the speed limit.
For whatever reason, aholes seem to be disproportionately represented among men in blue.
Aholes are disproportionately represent in pretty much all walks of life that have some smidge of power over the rest of us. Some ahole professions include: doctor, banker, and politics on any level. At least those in blue in theory are supposed to take bullets to save me.
There are wolves (predatory criminals) out there.
There are sheepdogs (law enforcement) as well, which kind of look like wolves, but they are supposed to protect the herd.
The sheepdogs can be kind of scary and annoying to the herd too. But they’re usually not wolves. If they attack any of the herd, they are destroyed, as they have become no more than wolves.
Interesting article:
http://www.blackwaterusa.com/btw2004/articles/0726sheep.html
I realize the constitution is on the ropes. But having fought one war for this country I am willing to fight for my rights.
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness”.
I wish the people of U.S.A. would stand up and be strong once more. I think were doomed as all republics 200 years is about the max we have gone over by 32 years.
I completely agree.
Where are all the folks willing to fight for our constitution.
Oh sure, they are willing to go to some foreign land to fight for “our freedom” but what about at home?
Home, where our freedoms really are located?
I’d like more info on the “general mayhem.” Sounds like fun.
Nice comic strip regarding the current banking/real estate situation. You can find it at (forgive me for not httping this):
http://www.uclick.com/client/cal/rl/
NR
Hmm.. nice to see the link being added automatically. Shows how much I know.
NR
there is truth to that comic strip…until we get back to 20% down.
Hah! Nothing like a forward-looking loan officer!
Why is it that the Times does not understand that higher interest rates will actually lead to more affordability in the form of lower home prices?
http://tinyurl.com/67jdaf
It’s a losing battle! As many of us have pointed out here, houses were very affordable back in 1980-1984 when there were double-digit mortgage rates. On Long Island, where I was living, median house prices were 1.8 to 2.0x median income….
“Rates on a 30-year fixed-rate loan, which were as low as 5.89 percent in mid-April, have been climbing and now remain near a one-year high of about 6.7 percent.”
Once again, we got a 15-year fixed for a 7.0% APR in 1994, and were happy to get it, because rates hadn’t been that low in years.
Let me know when we get back to normal interest rates and downpayments, as opposed to low interest rates and downpayments. Then we can start worrying about high interest rates and downpayments.
“…we got a 15-year fixed for a 7.0% APR in 1994…”
Sounds like the mortgage my parents were so proud of in the early 1990’s. Everytime the telemarketers called to sell a mortgage my Dad would ask if they could beat a 7.25% fixed rate and the answer was absolutely not…that is until the rates went insanely low. Dad didn’t refi because the loan was nearly paid off.
There is no recognition either that the Fed is subsidizing the underpricing of risk by the banks. Thanks to Bush and Congress, the taxpayers are assuming the risk for mortgage underwriting. The only way to underwrite these bad loans will be to raise taxes.
The specuvestors would be crazy not to refi now…that is, if they can.
“U.S. Vice President Dick Cheney said Russia’s aggression would have serious consequences if it continued.”
ROFL, what’s he gonna do with a bogged down army and a bankrupt state? maybe send salvation army to help Georgia….
Hey, don’t forget, Cheney’s h-e-double-hockeysticks on earth with a shotgun. That should make them quake in their army boots.
He means it would have consequences for his standing in history. Is it possible to have a negative approval rating? Bush needs to peer into Putins’ soul again…
Things look very similar to this time in 1939, when the Soviets and Nazis decided to put aside differences and carve up Poland.
Any words from our ersatz lameduckership in regards to what’s happening is just window dressing, nothing more…
Shhh, Bush can’t focus on the olympics with all that yammering about wars.
Check out operation “Brimstone” if you want to see what that is all about. Not good, ducky a few dozen warships into the persian gulf and then what?
I’m pretty sure that the Saakashvili consulted with his US and EU friends before invading. Here in Netherlands it is crazy to see the TV news (lately mostly an outlet for government opinion) spread blatant lies about what is going on there, they blame the Russians for everything. Some of the newspapers do a better reporting job fortunately.
S’s wife is from Netherlands which helps in getting a good press, and he seems to be good friends with the current rightwing Dutch government and NATO chairman De Hoop Scheffer. Europe, like the US, keeps supporting small dictators like him as long as they allow big EU companies to carve up the country’s assets for profit. And of course the country would be usefull as a US/EU stronghold in a future war with Iran.
Hey, can we all get back together on the same page and blame Canada for this, please?
Here’s what Kunstler has to say:
“These geological matters form the base on which the geopolitical issues work their hoodoo. For instance, the war currently underway in former Soviet Georgia (I say this in case the folks in Atlanta wonder why Stone Mountain is not being bombed) will at least end up with Russia in control of the major oil pipeline that runs from the Caspian region across Georgia, through Turkey, to Europe — even while parts of that pipeline get blown up. The net effect will be of Russia will taking control of even more of the oil now flowing to Europe. The whole point of building that pipeline was to bypass Russia, which was crippled by its own paradigm shift in the years when the pipeline was built.
The US might talk tough about this threat to the status quo, but what is it going to do? Pull troops out of Iraq and Afghanistan to mount a land war against Russia in a landlocked region of its own neighborhood? Fuggeddabowdit. Notice, the Europeans are not making so much as a peep — because when the time comes that Russia does control that pipeline, the Europeans will do anything to keep the contents flowing toward them. Europe may be organized as a trade-and-currency confederation, but not as a military power. NATO is strictly a US auxiliary, not a power unto itself. The result of all this will be that Russia, already the world’s leading oil producer, even as it has entered depletion, will now possess a potent geopolitical-and-financial weapon with control of that pipeline. A collateral effect will be Europe’s inclination to bid more desperately for Middle East oil — the oil that comes via the Suez Canal — which can’t help but boost the price-per-barrel that the US is forced to pay.”
I don’t see any evidence of Russia invading Georgia itself and taking control; up to now they do a pretty good job at limiting the damage that this idiot is causing.
But if the Russian strategy changes (e.g. as a result of increasing EU/US pressure), and Kunstler is right about the outcome, it means that the sneaky political tactics of Europe and the US in Georgia (and other former Russian states) have backfired. Maybe that can teach them a lesson, it’s about time. Mr. S. should have been removed from office long ago, instead of getting full EU/US support.
well, it appears that putin, not bush, is the “great decider” in this case.
’ssshrubery is looking up @ Putin’s sole.
I’m sure you’re in the camp that is sure the world has ended for the US but you’re greatly overrating the military power of Russia. I’m sure you remember just a few short years ago how their army was turned back by a few Chechens with slingshots. Or maybe that recent memory doesn’t fit your narrative. Our army may be in Iraq and Afghanistan but our Air Force could very easily limit Russian access to Georgian airspace and then play fish in a barrel with the Russian tanks on the ground. This however would be a massive escalation and something that should not be taken lightly…which is what Mr. Cheney is warning them about.
I would say our military power is highly overrated as evidenced by i.e.d.’s and the like laying waste to our troops, as our mega-million Dollar war machines are powerless to stop them.
in other words, David is kicking Goliath’s behind…
I would say our military power is highly overrated as evidenced by i.e.d.’s and the like laying waste to our troops
It’s called asymetrical warfare, otherwise known as “guerilla war”. It hasn’t stopped the US military machine, just caused more casualties and reduced morale on the ground and at home. It’s a tactic aimed at the political and civilian population of the US… the will of civilians and politians to fight and sustain casualties in a battle without fronts and without a clear enemy.
This is the case in Iraq where direct military confrontation has been non-existant since Fallujah. Afghanistan is another issue, as there are more direct combat operations by the Taliban against US/Allied forces. We don’t have the numbers or force projection necessary in Afghanistan to achieve victory. I expect we need to move 100K troops currently in Iraq to Afghan or reenact the draft…
Wars may be fought on the ground, but are won in the will…
Tank for tank, infantryman for infantryman, our military is still the most daunting, technologically advanced force ever fielded, as evidenced by our clear domination of airpower, naval power, and land-based force projection, . As if anyone needs reminding, we defeated a numerically superior Iraqi military in a matter of days. A not-insignificant achievement… albeit we screwed up on the occupation, a mistake of political will and logistics.
Afghanistan was a burial ground for super-armies of the 19th & 20th Centuries, and quite possibly the 21st.
All the Taliban needs is a supply of stinger missiles to ground our airforce and it’s game over…
Afghanistan was a burial ground for super-armies of the 19th & 20th Centuries
I don’t disagree with you. It’s a difficult place to wage war.
All the Taliban needs is a supply of stinger missiles to ground our airforce and it’s game over…
Ahh, but that is a very different story from your original comment re: IED’s laying waste to our troops in Iraq. Heat-seeking, shoulder-launched, ground-to-air missle systems are a bit more advanced(and costly) than your typical IED. One could argue that the Stinger missles the US provided the Afghan Mujahadeen during the Soviet occupation directly contributed to their eventual withdrawal (too costly a conflict in men and machines).
Who would supply that kind of firepower to the Taliban today? The Russians or Chinese? The Chinese are only interested in securing natural resources to grow their economy. The Russians are a different story, but I doubt they want to be associated with the “terrorists” who provided training camps for the 9/11 crowd. Iran is of interest to Russia due to oil/ngas/technology contracts Russia has with them. That’s why they sell weapons to Iran… What does the Taliban have? Nothing of economic value to anyone (discounting poppy/opium of course).
Any state caught selling weapons to the Taliban would be guilty by association and subject to economic sanctions and “pre-emptive” military strikes. Who wants to risk that today? In general I don’t support Bush’s foreign policies, but he has put the world on notice…
“he has put the world on notice” ?
or just puffing up his Olympic games inspired chest for naught.
easy to say, not so easy to back up. unless you are Phelps!
or just puffing up his Olympic games inspired chest for naught… easy to say, not so easy to back up.
In his eight years in office, he has invaded and occupied two foreign countries, convinced another (N. Korea) to dismantle their nuclear reactor(s) and allow inspectors in, and threatened Iran into a state of perpetual fear and paranoia as to attack from US or Israeli forces.
As I said before, I don’t agree with Bush’s foreign policy (walk like a cowboy, carry a big stick, and use it frequently), but you have to admit he really isn’t “just puffing up his chest”. He has no problem taking action. Of course that action may be the wrong action…
…our mega-million Dollar war machines are powerless to stop them. ..
I’m sure you’d like to think so. Of course we’ve yet to actually use any of it in this most compassionate of conflicts.. and of course we could transform Iraq’s cities and towns into smouldering ruins given an hour or two.
Any powerlessness we have is purely political and self-inflicted..
So,
If we bombed Iraq like say the Nazis did Guernica, Rotterdam or London or other countless places, wouldn’t that make us no better than them?
hehe.. ok.. Since after you’re called on it you have to admit there’s a difference between restraint and weakness, and since it’s obvious where you prefer to redirect the conversation, lets cut to the chase:
Go ahead and compare our motives with those of the nazis.
You have the floor.
I agree to the larger point …
but (forgive my pedantry) Guernica was destroyed by the Falangists.
If we bombed Iraq like say the Nazis did Guernica, Rotterdam or London or other countless places, wouldn’t that make us no better than them?
The US is the only country to drop two atomic bombs on another country… Japan.
The US (and the British) fire-bombed and carpet bombed civilian population centers in Germany during WWII.
How different can we be? How much “better” can we be?
The difference being that the Nazis bombed all of those places without provocation…
And Guernica was bombed by the Condor Legion, which was just the Luftwaffe warming up for World War 2.
http://en.wikipedia.org/wiki/Bombing_of_Guernica
joey:
“Go ahead and compare our motives with those of the nazis.”
5 years ago, devout neo-cons like you could shout us down when we made comparisons of the evil of ’ssshrubery and his minions to fascism, but no longer, as the truth plainly shows this to be the case.
You’ve already advocated destroying Iraqi cities pell-mell, and i’d daresay you are fairly atypical of the know-nothings that inhabit the white house currently…
we could ask six million jews and a couple million russians that question.
coupletwenty million russians that question.But then who is counting?
“I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.”
Albert Einstein
“we could ask six million jews and a couple million russians that question”
And over half a million Japanese civilians. In addition to the casualties of Hiroshima and Nagasaki, don’t forget the firebombing of Tokyo. McNamara admitted that had the U.S. lost the war, he, LeMay and the whole lot would’ve been charged as war criminals. Which of course begs the question, why aren’t they considered criminals even though their side won?
“The difference being that the Nazis bombed all of those places without provocation…
Among the Japanese firebombing victims were thousands of children and people who just happened to live in a city that was targeted. One would be hard pressed to make the case that these children deserved to be burned alive because they “provoked” the allies. They weren’t caught in a crossfire or firefight or “collateral damage” unlucky enough to live too close to a munitions factory. These were civilian targets. Please spare me the many rationalizations I’m sure you will have. But, hey, keep deluding yourself that the U.S. is the lone nation in the world with clean hands.
Totally agree. Thank you.
We can use the Air Force to bottle up the Russians in their own back yard? How did that work for the Nazis? As for Chechyna, you may have noticed the Russians have crushed all resistance there. Considering that we are still fighting (still winning?) rag-tag peasants in Afghanistan 7 years after we started, your optimism is disturbing.
just watch what the citizens of New Ossetia and Abchazia are saying (if anything of that is freely broadcasted in the US, which I doubt). They say the Georgian president is worse than Hitler, and that it is genocide that is going on; I can’t blame them for coming to this conclusion.
Mr.S is a mad dictator who considers himself a Messiah. Georgia (both president and most of the citizens, presently) don’t give a damn about civilian casualties in New Ossetia, the only thing that matters is taking control of these ethnically different territories, just like what was happening in Serbia not too long ago (except that this time Oil is involved, making it even more dangerous). If Mr. S and his US/EU friends want to control New Ossetia and Abchazia, they will have to kill most of the citizens. This is a war you can’t win with an army, there will only be losers.
Yes Watcher…what was the final outcome for the Nazis? Also. it’s good that you can recognize the historical company that the Russians keep. As for the Chechen you assume that they have crushed all resistance there. I guess since we have not had an Al Qaeda attack on US soil since 9/11 we have permanently pacified them. I believe in the future the Russians will find that that conflict has just been lowered to a simmer. And please link the article that lays out the numerous battles that we have lost to the Taliban in Afghanistan. The problem in Afghanistan is Pakistan. No sanctuary no Taliban problem. As for my optimism I’m happy to have that problem…you keep your defeatist pessimistic attitude to yourself.
I never said we lost any battles to the Taliban; I said we are losing the war. They live there and we don’t. We have to leave and they don’t. Just like Vietnam. As for Pakistan, would you invade them before or after you start a war with Russia? How many wars do you propose to start before finishing one?
Are we really talking about war with Russia? Uh, I do remember the cold war, have NO desire to re-live that nightmare. It’s been nice for the past 15 years without the sword of Damocles.
I’m sure you’re in the camp that is sure the world has ended for the US but you’re greatly overrating the military power of (america)Russia. I’m sure you remember just a few short years ago how their army was turned back by a few Chechens(Iraqis) with slingshots.
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talk is cheap, IMO.
“talk is cheap, IMO.”
Exactly. And very few agree with my assertion but if Captain A$$wipe had reacted swiftly after 9/11 with a appropriately sized H-bomb instead of the long, drawn out, Vietnam-esque guerilla war we’re fighting, the USA would be in a much better diplomatic, economic and strategic position. You’d see neutral countries leveraging extreme pressure on the thugs of all caliber in a hurry.
Yep. I’ll have the GW apologistas making warped excuses for the idiot son on my right and peaceniks bemoaning their idealism on my right.
Nuclear weapons are a Pandora’s Box of an item…
They are the ultimate tool in terms of destructibility, and yet one hasn’t been used in anger in 63 years and 2 days. (a mere toy of a bomb in Nagasaki, compared to what’s available now)
Iraq has been nuked on the sly with depleted uranium. Man cannot control the radioactivity that he has unleashed. Let’s say that in about 15-20 years Iraq will be greatly depopulated and a lot of our Iraqi veterans will be dead due to depleted uranium toxicity. i see the devil being the only winner here.
Prices on distressed Fannie and Freddie portfolio loans are falling fast. Have a customer who has been buying at .75 on the $ for years, now reports he can buy some at .50 on the $. Not sure of the locations of the properties, but I do know you have to buy in $1M to $2M increments.
As Ben has often pointed out, there will be opportunities to make some cash out of this bubble/crash . . . keep powder dry and begin planning your moves.
50 cents on the dollar is too high. Yeah, you can asses risk by massaging the dates and numbers to make it LOOK like 90% (or whatever) of the mortgages are presently being paid on time , but these FB’s are supposed to pay for 30 YEARS, higher payments each year.
What happens 5-7 years from now, when every single day of I/O neg-am grace is used up, every credit card is maxed out, every subprime mortgage and HELOC is underwater, and there is no more selling or refinancing to be had (what every FB counted on)? The clock will run out, and FB’s will walk out, far before prices recover to 2005 levels. The question is not how many of these subprime loans will default, it’s how many will NOT default. Probably lower than 50%.
Bernanke on a Hog? Who woulda guessed that?
http://www.cnn.com/2008/US/08/11/freeway.money.ap/index.html
I have often heard of helicopter drops of cash, but this is the first incident of which I am aware of a motorcycle drop.
From Bloomberg, maybe already reported:
Aug. 8 (Bloomberg) — Fannie Mae, the largest U.S. mortgage-
finance company, will stop buying or guaranteeing Alt-A home
loans, such as those that require little or no documentation of
borrower incomes or assets, by yearend.
“Over 60 percent of our losses have come from a small
number of products, but especially Alt-A loans,” or ones
considered between prime and subprime in terms of expected
defaults, the Washington-based company said in a statement.
Alt-Amatum
The best forecaster is forecasting a shocking level of doom and gloom for the next couple of years.
BULLETIN
CRUDE-OIL FUTURES TRADE BELOW $114 A BARREL — LOWEST LEVEL SINCE MAY
FORECASTER OF THE MONTH
Morici wins contest for third time in a year
Economist sees fundamental flaws in banks, oil addiction, China’s currency
By Rex Nutting, MarketWatch
Last update: 12:01 a.m. EDT Aug. 11, 2008
WASHINGTON (MarketWatch) — The U.S. economy has fundamental flaws and won’t fully recover until three structural problems are addressed, said Peter Morici, a business professor at the University of Maryland and the winner of the MarketWatch Forecaster of the Month award for July.
Morici won the contest with his accurate predictions of monthly data, beating 43 of his peers. Of 10 indicators tracked in the contest, Morici’s forecasts were among the most accurate on five: New-home sales, the Institute for Supply Management index, durable-goods orders, the trade gap and industrial production.
It’s the third time in the past year that Morici has won the monthly contest, but he’s more interested in the big picture than in the twists and turns of the data.
“We have fundamental structural problems,” Morici said. “This is not a classical recession that has a self-healing character” that the Federal Reserve can speed up with lower interest rates.
“Things will happen in the next two years that will shock people,” Morici said.
It’s not just the broken banking system; it’s also that the U.S. economy is being held hostage by oil and by China’s undervalued currency.
Morici doesn’t have much confidence in policymakers’ response to the economic crisis. They’ve been too timid and haven’t really talked bluntly about the challenges the U.S. economy faces.
Cutting interest rates won’t do much to help the banking system regain the trust it has squandered. “Until you reform the management and compensation structures, it will be difficult for banks to earn anyone’s trust,” he said.
In exchange for the open-ended loans and special safety nets for the banks, the Fed should be demanding changes in the way banks run their businesses and pay their top employees. “These banks would be bankrupt without the Fed,” he said.
“If Citigroup is a utility, vital to the public good, then they can’t reward themselves like Saudi princes,” Morici said.
“Things will happen in the next two years that will shock people,” Morici said.
Like housing prices dropping 50, 60 70%?
We’ve made that forecast on this blog already.
Your forecast is in line with what fundamentals suggest. It seems that REIC ‘experts’ are still hoping for cargo drops of cash out of helicopters to prop up housing valuations. I personally don’t foresee it happening, but this helps explain why we still have not made it past the denial stage of the housing bubble stages of grief.
Should be interesting to see what happens to Freddie Mac and Fannie Mae once the Naked Short Selling Rule is removed tomorrow.
http://www.ft.com/cms/s/0/d9d64dfc-6700-11dd-808f-0000779fd18c.html
“Should be interesting to see what happens to Freddie Mac and Fannie Mae once the Naked Short Selling Rule is removed tomorrow”.
What do you think will happen to Freddie and Fannie with the rule removed?
You can short them in the nude. Gives a new definition to swing trading.
I want it to appear as if the fed/gov is in a nudist, clothing optional camp/spa.
I want to see everything, well, compete disclosure, open books, um, all the hidden nooks and crannies exposed, um, books front to back, um, uh, help me here…!
well, we all know that the emperor has no clothes…
removal of the rule rockets the stocks.
give me a rule, its gets broken…..the rule has held the stocks back from moving higher during the “Oh good grief, I have to wait till Q1 ‘09 to buy the banks?”
hmmm…..aint it all just broke as f-ck?
SKF going deep under the 100 bucko mendoza line.
“Southern California Edison said it expects rising infrastructure costs to force customer rates significantly higher by early next year. The utility giant said residential users could see a 25 to 30 percent hike in rates due to the cost of natural gas.”
From the pages of the Valley Voice…
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If you are thinking about going solar, do it now and beat the rush.
I hate to say, but I see absolutely no evidence that anything the Fed has tried since the onset of the insolvency crisis has succeeded whatever to fix the credit markets, aside from inspiring false optimism and postponing the day of reckoning.
latest news
Fed survey shows credit squeeze getting worse
ECONOMIC REPORT
Credit squeeze getting worse, banks say
Most banks less willing to lend to businesses, consumers
By Rex Nutting, MarketWatch
Last update: 2:28 p.m. EDT Aug. 11, 2008
WASHINGTON (MarketWatch) — The credit squeeze got worse in the past three months, the Federal Reserve reported Monday, and most banks expect to keep a lid on credit for the next year at least.
Despite all the aggressive moves by the Fed in the past year to ease the flow of credit to the economy, a record percentage of banks were making it more difficult for borrowers in the three months ending in July, the Fed said in its quarterly senior loan officer survey of 52 major banks.
A majority of banks tightened their rules for granting loans to businesses and consumers. The survey shows little appetite at banks to lend for home mortgages, credit cards, home equity loans, commercial real estate loans, or commercial and industrial loans.
No bank in the survey eased credit terms for any type of loan in the past three months, and only one bank said it anticipated easing standards for consumers in the next 12 months.
Anybody who does not see the implications of the ongoing credit vacuum for (lower) housing market valuations going forward is in a delusional state.
The Fed defines nontraditional mortgages as adjustable-rate mortgages with multiple payment options, interest-only loans and “Alt-A” mortgages that require limited verification of income.
The Fed survey found that only seven of the 50 banks said they were still participating in subprime mortgages, loans made to borrowers with weak credit histories. Of those seven, six said they had tightened lending standards on subprime loans with only one saying it had left standards basically unchanged for subprime loans.
http://biz.yahoo.com/ap/080811/bank_lending.html?.v=11
maybe people will look to this one lender as a source of strength in bringing the housing market back! LOL
‘The Fed defines nontraditional mortgages as adjustable-rate mortgages with multiple payment options, interest-only loans and “Alt-A” mortgages that require limited verification of income.’
Funny coincidence: The Fed’s definition of ‘nontraditional mortgage’ exactly matches my definition of ‘high-risk mortgage.’
Did you ever notice how members of the serial bottom caller brigade never feel any need to support their repetitious assertions that a bottom is close at hand with data or any other kind of credible evidence?
Insight: A crisis of similar ingredients
By Frank Partnoy
Published: August 11 2008 15:49 | Last updated: August 11 2008 15:49
A little over a decade ago, I published a book called F.I.A.S.C.O.: Blood in the Water on Wall Street. I described the antics of the finance industry and criticised some egregious market excesses. Back then, the derivatives market was worth a quaint $50,000bn, collateralised debt obligations (CDOs) contained mostly corporate bonds and loans, and credit default swaps had just been invented.
Most people say the financial world today has been transformed radically since then.
But how much is really new? As the current crisis nears its end, or at least the beginning of the end, it is worth reflecting not only on the novelty of today’s markets, but also on the themes that have remained constant.
Take it from a San Diegan for an unbiased perspective on the real estate situation. Do you think this Alan Gin colleague even realizes Wall Street is on the brink of a crash to rival the 1930s, including mass layoffs of the Wall Street finance industry employees he extols?
…
We will emerge from this crisis, and then another will hit in a few years. The cycle will continue. Meanwhile, finance will remain one of the most lucrative professions, for the same reason it is one of the riskiest. Risk and return are related in industry as well as investments.
Indeed, the above three common themes, then and now, are the central reasons finance industry employees will continue to out-earn just about anyone else. Information asymmetry, moral hazard and regulatory arbitrage are the basic ingredients of high-margin finance. Soon the markets will be booming again, and the people who exploit these three themes will do the best, as they always have.
The writer is a professor at the University of San Diego School of Law
Drinking a couple of G & T’s in honor of his dubiousness…
Drop in Oil Prices May Not Help US Economy Much
http://www.cnbc.com/id/26140776
“Price increases are sometimes associated with economic recessions, but oil price declines have never been followed by an economic boom,” said James Hamilton, an economist at the University of California, San Diego, who studies oil price shocks.
So is he pretty much saying that the stock market should be crashing about now instead of rallying?
“So is he pretty much saying that the stock market should be crashing about now instead of rallying?”
that is exactly what has me wondering what kind of strength these bozo’s feel are behind this rally? there is nothing out there that will keep everyone spending their money foolishly. that has gone out of fashion as far as i can see.
This kind of rally on no positive news whatever makes my cosmic ray detector go all tingly.
My apologies in advance if the below link doesn’t work. The house, MLS#: 3019299, is found in Chandler, AZ 85249. I think this is just the beginning of seeing a lot of these kinds of homes.
“BANK JUST DROPPED PRICE ON THIS HOME BY $133K! BANK OWNED HOME-CASH OR HARD MONEY LOAN ONLY. ***TRUE CONTRACTOR’S SPECIAL*** TUSCAN STYLE ESTATE HOME IN BEAUTIFUL GATED COMMUNITY IS IN NEED OF MAJOR WORK. HOME IS BARREN TO THE WALLS WITH EXCEPTION OF MASTER BATH AND REMNANTS OF BEAUTIFUL TILE WORK. NO CABINETRY, NO APPLIANCES, NO TOILETS, NO INTERIOR DOORS. NICE SPACIOUS FLOORPLAN WITH PRIVATE MASTER, LARGE BONUS ROOM WITH WALK OUT DECK,LARGE SECONDARY BEDROOMS & 1ST LEVEL GUEST SUITE. HOME SOLD IN AS IS CONDITION. QUICK 3 DAY RESPONSE TO OFFERS.”
Most interesting is the cash or hard loan money only.
http://armls952.vstone.com/detailsarmlsres_46665.cfm?startrow=1&&SQFTMIN=4001&AREA=NO&FEATURES=NO&SCHOOLDISTRICT=NO&SUBDIVISIONOPS=NO&BEDROOMS=NO&PROPERTYTYPE=NO&SHOWLISTINGS=0&ADDRESSDIR=NO&SQFTMAX=0&ZIPCODES=85249&ADDRESSNAME=&SITEAGENTID=0&CITY=NO&ADDRESSSUFFIX=NO&SUBDIVISION=NO&ADDRESSNUM=&MLSNUMBER=&AGE=NO&BATHROOMS=NO&PRICEMAX=350000&PRICEMIN=0&list_id=3019299&PageID=46664
I would say most interesting part is that it needs “major” work and there’s only “remnants of tile” in bathroom and they still want >300K for the place…
good luck
Who in hell wants that monstrosity?
“Most interesting is the cash or hard loan money only. ”
All that indicates is that the house is not considered habitable in its current condition and because it’s being sold as-is, conventional financing is not available without a ton of repairs that the seller (bank) is not willing to entertain.
The house was built in 2002. I wonder if all the damage was from an aborted remodel or if the former loanowners exacted as much damage as they could before the sheriff evicted them.
Agree with Steve that $330k is too much for a property in that condition that is < 1/3rd of an acre. Probably looking at well over $100k in repairs if it’s completely contracted out, and that’s assuming no major structural damage.
Stock market bulls, start your engines for another bullish upside move on Tuesday. This news of a $1.5bn writedown from Wall Street stalwart JPMorgan can only be interpreted as a contrarian signal that the stock market will continue going up for the foreseeable future. After all, $1.5bn is only 1/2 of $3bn, and hence is a smaller than expected writedown.
JPMorgan struck by $1.5bn writedown
By Francesco Guerrera in New York
Published: August 12 2008 00:11 | Last updated: August 12 2008 00:11
JPMorgan Chase provided evidence of more turbulence in financial markets, warning that stormy credit conditions had forced it to take a $1.5bn writedown on mortgage-backed assets in July.
The warning by JPMorgan will reinforce investors’ worries over the length and breadth of the financial crisis.
In a regulatory filing, JPMorgan said since the beginning of July, trading conditions in the mortgage market “had substantially deteriorated . . . causing the company to incur losses” of $1.5bn, excluding hedges.
Bankers said July was the worst month for mortgage-backed bonds since the beginning of the crisis, as a combination of cut-price sales and waning demand from large investors helped to depress prices.
Talk about your litany of membership in the Megabank, Inc too-big-to-fail fraternity… the next few years should offer a once-in-a-lifetime opportunity to snap up shares of these too-big-to-fail/too-big-to-bail institutions at fire sale prices.
The Croesus Chronicles
Bubble, Bubble, Toil And Trouble
Robert Lenzner 08.11.08, 2:35 PM ET
Bottom-fishers in financial stocks better wait for 2009 at the earliest, unless they have strong nerves. Wishful thinking didn’t make subprime the first and last bubble to shatter the balance sheets and income lines of the nation’s leading financial institutions.
The meltdown of Wall Street balance sheets continues. The auction-rate note imbroglio–newest of the disaster bubbles, if you will–is already costing major firms $55 billion. Wait until the toll starts building in other consumer paper-like securities backed by credit card receivables. Citigroup just reported a loss, and JPMorgan Chase expects write-downs of several hundred million dollars per quarter into the foreseeable future.
Croesus advises a thorough scrutiny of the charts below, which disclose in all too vivid terms the gigantic overhang of depreciating assets still held by Merrill Lynch, Lehman Brothers, Citigroup, UBS, Morgan Stanley, JPMorgan, Credit Suisse and Goldman Sachs.
The only word that comes to mind to describe the state of Wall Street investment banks is grim.
Try not to catch yourself a falling knife bottom fishing in the financials!!!
Croesus is wondering where Citi is going to get all of the money it needs to take care of its requirements, and for that matter, just where any of these firms will find the capital from rational investors. Until the real estate market bottoms, there is no sense jumping into financials.
It may require a huge federal bailout to protect the depositors of the banks, who should not be destroyed by the hubris and stupidity of the bank managements. It may require an easing of the rules to allow private equity firms to take major equity stakes in the banks.
Still, Croesus wants to warn investors about the bubble popping in Alt-A mortgages, the loans that were supposed to be of slightly higher-quality than subprime. Croesus also wants to warn of the bubble popping in the hybrid option adjustable-rate mortgages, which have terms so esoteric they’re not easy to comprehend. Croesus wants to warn about the bubbles bursting in credit card receivables and auto loans, which are just now becoming intensely troublesome.
Here’s some food for thought: Goldman Sachs partner Gerald Corrigan’s report, “Containing Systemic Risk,” gamely proposed an ideal for Wall Street going forward: “Greater financial discipline at individual institutions must be reinforced by a renewed commitment to collective discipline in the spirit of elevated financial statesmanship … to put aside specific interests in the name of the common interest.”
Croesus believes this ideal is only realized in wartime.
spot price of gold is $821 at 8:40 pm EST. I’m losing my shirt - NOT! Actually I’m getting more and more in a buying mood.
I simply cannot believe that these dark pools of liquidity, that are gonna be the undertakers for these myriad of banking institutions, or rather a system of moneys correctly pricing the value of assets that will step into the madness will get richer.
If your only selling into the big money that you have ammassed into the precious……by small retail investors buying gold, good on ya…keep running the commercials for mail in gold necklaces and rings..
a message for those that would not believe.
vozzie
Gold may very well fall below $800 tomorrow. It has already fallen below critical support levels, so its next stop is what, about the $550 that occurred in the June 2006 selloff?
the undertakers of the private hard money, nickel on the dollar is what is about to solve the banking crisis….
ITs not gonna be big fan fare merger, its gonna be private money, not a hedge fund, but more like a new asset class, John Mauldin has been hinting at this thing for quite some time. I think its a very quiet, big money, long term locked up hard money into pools of time and yield….
I know, Im just barely paying attention right now….but I smell something lurking beneath the surface thats solving the banks in quiet, no fanfare, almost hush moneys…fashion. Quiet, like frugal, is the new black…
Some will say more of the same, derivatives, dark pools of liquidity, securitization…..covered bonds, togal, ARS….but yes, something is happening, and its solving the banks very quietly.
Maybe somebody should start a business selling hand lotion to all these worried hand wringers. I don’t wring my own hands nearly as much as I used to any more. I frankly don’t see what these chicken livers are worried about, as the Fed has pretty much signaled to the investment banking world that it is standing in the wings with fire hose ready to douse the next crisis crescendo with a high velocity liquidity blast on an as-needed basis.
Investment banking
Investors fear another big financial firm failure
By Aline van Duyn in New York
Published: August 11 2008 23:30 | Last updated: August 11 2008 23:30
Institutional investors expect another big financial firm will collapse within the next six months in the continued fallout from the credit crunch, new research has shown.
Nearly 60 per cent of US and European institutional investors surveyed by Greenwich Associates believe there will be such a failure within the next six months. Another 15 per cent think it will happen in six-12 months.
The investors feared that the knock-on effects of collapse of a big financial institution on the credit derivatives market would pose a “serious threat” to global markets.
“Most institutions think we are currently in the most dangerous period for global financial services firms,” said Frank Feenstra, a consultant at Greenwich Associates. “Perhaps if the markets can make it through the next six months, the level of pessimism may begin to subside.”