Bits Bucket For September 5, 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.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
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Mr. Bubbles…
Greenspan: Don’t use Fed as a ‘magical piggy bank’
Friday September 5, 12:02 am ET
By Jeannine Aversa, AP Economics Writer
Ex-Fed chair Greenspan says government needs new power, laws and limits for corporate bailouts
WASHINGTON (AP) — Troubled by the Bear Stearns debacle, former Federal Reserve Chairman Alan Greenspan is advocating a new way of dealing with government bailouts of companies whose sudden collapse could wreak havoc on the country’s economic and financial stability.
Greenspan says Congress needs to give the government new powers to handle troubled companies to minimize any potential losses to American taxpayers. A self-described libertarian Republican, Greenspan has a reputation for being wary of giving the government extra powers. However, in crisis situations, there needs to be a clear process for handling bailouts, rather than depending on the Fed to do so, he reckons.
A high-level panel of financial officials should be given broad authority to quickly determine whether a failing company poses a sufficient threat to the entire U.S. economy, he recommends. If so, the company would be shut down.
http://biz.yahoo.com/ap/080905/greenspan_book.html
This has got to be the dumbest concept of the day; that a failing business needs government intervention to shut down.
I thought the Fed was supposed to regulate the supply of money so that if a huge company, or an entire sector, collapses, the money could find its way to actual productive sectors and thereby help the entire economy adjust. Greensuck spent 20 years tinkering with his tools to benefit his buddies and push the system to reflect his worldview, and in the process he blew all the money supply when it wasn’t needed, so that there’s none left when it is needed.
RE: Greensuck spent 20 years tinkering with his tools to benefit his buddies
I’m in the middle of Pete Schiff’s book on the coming US economic collapse.
Your “20 years” is the number he notes when the US all started to go to hell in a bucket.
Service and information economy, my azz.
Greenspan is Judas, revisited.
I was merely referring to his tenure from 1986-2006.
Great article by Schiff:
Let’s Get Real about Real Estate
http://www.europac.net/#
“”Once again, real estate market watchers have pounced on a shred of seemingly positive news to proclaim that the long sought “bottom” is in sight. The routine is becoming extremely stale, but somehow the media never seems to tire of it. This time the “good” news was that the percentage declines in national home prices (according to Case Shiller) in July where not as large as they were in June. Although the report contained many other negative data points, including increased inventories and a spike in foreclosure sales, it was the slowing declines that got spotlight. Talk about grasping at straws. The truth is that real estate has been grossly overvalued for years, and the adjustment process back to realistic pricing has only just begun. The problem is few among us seem to appreciate the magnitude of this adjustment and its implication for an economy dependent on inflated assets values.
By most accounts, the decade long housing boom began in 1996 and finally went poof in mid-2006. In January 1996, the Case Shiller 10 city composite home price index stood at 76. By June 2006 it had tripled to 226, by far the largest increase in U.S. history. Since then, the index has pulled back by 20% to 180. For those who believed that home prices could never retreat nationally, this 20% correction is more than enough. In reality, it’s just the down payment.”"
See you at the bottom (15% mortgage interest rates).
Best Wishes!
Yep! I think it is reasonable to anticipate being able to buy a guarded gated unit in a condo community in Las Vegas for under $125,000. I found one such condo for sale there.
At this point, it’s less than 1/6 of my net worth, which is my own personal rule of what to put into real estate. I need to see more prices like that so that I could find my dream home in LV. One example won’t do.
I’m looking for a house or condo with a 2 car attached garage, 24/7 guarded and gated, minimum 1200 square feet. But it has to be a luxury unit if it’s Vegas. Otherwise I could handle non-luxury with ocean view in the San Simeon area of California.
RE: Greensuck spent 20 years tinkering with his tools to benefit his buddies
I’m in the middle of Pete Schiff’s book on the coming US economic collapse.
Your “20 years” is the number he notes when the US all started to go to hell in a bucket.
Look what affected the value of the dollar since 1970. Gold backing withdrawn. The cost of Vietnam war. OPEC oil embargo. Entitlement programs multiplying like locusts. EPA, OSHA, and EEOC laws multiplying like locusts, driving energy production, business and manufacturing out of the country. Illegal immigrants by the tens of millions getting medical care, housing, food, income and education at expense of U.S.A. taxpayer. Rampant corruption in government.
Rampant corruption in business. The most massive and expensive military in history.
Interventions, occupations, and wars, benefitting mostly international bankers.
The Government sponsorship of a notion of the Federal government as a constant companion, paid Big Brother and nannie. Republicans giving away the Treasury with tax cuts.
Democrats giving away the Treasury with entitlements.
The Federal Reserve Bank quietly loaning the Treasury all we needed, anytime.
Our economy had one foot in the grave already when Greenspam took over.
Exit him. Bernanke enter stage right.
“No one could have seen this coming”.
(lights out)
It’s not over till the fat lady (FED) sinks…
RE: Look what affected the value of the dollar since 1970.
Ya gotta it all down, MormonTea…
So let’s see, the charge is the “Boomers” are all to blame.
I think I was in the 8th grade when Lydon Johnson’s great entitlement games and military adventurism started with his “Great Society”, “War on Poverty”, and the quagmire of Vietnam
I was 20 (drinking age was 21) when Nixon closed the “Gold” window in 1973 and OPEC shoved it up everybody’s azz, by tripling the price of oil.
The above events were noted by Schiff as the major catalysts in bringing on the coming US economic Apocalypse.
So, like hell I’m gonna take the rap.
In fact it’s been the taxes taken out of my hide (you don’t know tax hell until you pay the self-employment double levy of SS) that’s financed all the subsequent crap doled out by an array of government’s totally out of control.
I’ll take the rap for late-boomers…
I was 5 years old during the Summer of Love, barely potty trained then, but i’ve made up for lost time.
RE: I’ll take the rap for late-boomers…
I was 5 years old during the Summer of Love, barely potty trained then, but i’ve made up for lost time.
LMAO…’Sane-your killin’ me!
I just inhaled and am swerving over the keyboard…
Many of us boomers voted libertarian since we became eligible to vote. Also voted “NO” on all bond measure referendums in our states. I was 12 years old when Jim, Jimi, and Janis all kicked the bucket.
Can Greenspan just retire already??? I hear Europe is nice this time of year. They favor all sorts of government intervention into the economy in addition to deflating the Euro, preferably by deflating the dollar as well.
http://www.nytimes.com/2008/09/05/business/worldbusiness/05euro.html?ref=business
“A self-described libertarian Republican, Greenspan”
Maybe in his distant past. Certainly not at all a Libertarian since 1980. I hate it when socialists steal freedom concepts from individualists and spin them to mean totally the opposite of freedom.
I like the term “liberal” more than “libertarian,” but the socialists stole that term and made it mean something the opposite in the economic sense. Socialists are really status quo conservatives in the economic area. Anyone who disagrees can simply read up on Bastiat.
Maybe we libertarians should just not complain but steal back the term “liberal” from the Madonnas, Streisands, Bonos, Gores, and other Gulfstream commies.
When in debt…Borrow, borrow, borrow.
Fed: Banks borrow more from emergency lending program; investment firms take pass
By JEANNINE AVERSA | AP Economics Writer
3:35 PM CDT, September 4, 2008
WASHINGTON (AP) _ The Federal Reserve says banks borrowed more over the past week from its emergency lending program, while Wall Street firms took a pass for the fifth week in a row.
The report says commercial banks averaged $18.98 billion in daily borrowing over the past week. That compared with a daily average of $18.47 billion in the previous week.
For the week ending Sept. 3, Wall Street firms didn’t take out any loans, the fifth straight period of no action. Their borrowing, however, averaged as high as $38.1 billion a day over the course of a week in early April.
http://www.chicagotribune.com/business/sns-ap-fed-credit-crisis,0,6219302.story
Does it seem to anyone else like the more money banks borrow from the Fed at below market interest rates offered through special lending facilities, the more money banks lose?
Are you being sarcastic?
you must not have a brother-in-law.
“you must not have a brother-in-law.”
+1
China central bank may need government bailout
By MarketWatch
Last update: 6:33 a.m. EDT Sept. 5,
2008Comments: 23HONG KONG (MarketWatch) —
The People’s Bank of China, China’s central bank, has begun discussions with the finance ministry on ways to shore up its capital, The New York Times reported, citing three people familiar with the discussions…
…The central bank is in need of capital because of its roughly $1 trillion purchase of U.S. Treasury bonds and Fannie Mae- and Freddie Mac-issued mortgage-backed debt…
Cont’d
The comments on this article are a good read.
Leigh
http://www.marketwatch.com/news/story/chinese-central-bank-may-need/story.aspx?guid=%7B032D3542-554A-4A9D-A2B4-4161C6985DC1%7D&dist=msr_1
Treasury near GSE bailout plan: report
Fri Sep 5, 2008 6:40pm EDT
Snips-
WASHINGTON (Reuters) - The U.S. Treasury Department is close to finalizing a plan to buttress mortgage finance companies Fannie Mae and Freddie Mac, the Wall Street Journal reported on Friday…
…The report said the plan, which could be announced as early as this weekend, includes changes to senior management at both companies…
Things that make ya go hmmmmm.
Of course, the sited source is *someone familiar with the situation* and no one else will go on record at this time, yet it’s weekend work for the usual suspects.
Dang, ya just can’t make this stuff up!
Leigh
Very interesting posts, Leigh!
Thank you for linking the articles!
PB, I’m sure the executive teams are making lots of money, so they’re doing exactly what they should be doing.
If the market is broken, people are going to identify it and still make money on it.
It doesn’t matter if they loot the rest of the company. Or country.
Home, Sweet Hell
http://www.metrosantacruz.com/metro-santa-cruz/09.03.08/cover-0836.html
Because, Avila told them, she had nearly escaped death just months earlier in a natural disaster in Cancun. And at the most terrifying moment she had promised God that if He let her survive, she would repay Him by helping an unfortunate family. She had indeed survived. So, said Maria Avila, she was simply keeping her word to God.
“At the height of all this, back in 2005 and 2006, pairs of real estate agents used to circle around places like Home Depot,” says Soquel attorney Pamela Simmons, who represents the Ramirez and Martinez families. “They’d pick up a group of day laborers in their SUVs, bring them out to a property they were selling to ‘cut the weeds and fix the place up,’ and then at the end of the day, pay them well and ask, ‘Are you guys by any chance renters? If so, you really ought to buy a house. In fact, how about this one you’ve been working on all day, right here?”
“What happened to the strawberry pickers at the hands of that particular broker is symptomatic of a massive tidal wave of foreclosures breaking across the state,” he says. “There will be wave after wave of them. … There are many, many more latent foreclosures out there. The approaches used were different than in the strawberry picker case, but the result was exactly and invariably the same.”
“Alberto Ramirez was not, unbeknownst to him, a strawberry picker. No, in that world, the world Maria Avila created for the financial community to review, he was an “agricultural expert” who owned his own business and boasted an income of around $100,000 a year.”
“But back at WaMu with the documents, Alberto and Rosa learned that the opposite was true. Avila, as agent for the sellers, had by all formal comparisons to similar houses (known in the real estate world as “comps”) vastly overvalued the house. As agent for the buyers–Alberto et al.–and as loan originator, she had used that inflated value to sell Alberto a loan much larger than the house was worth, according to the bank’s analysis. Every aspect of which earned her a commission far higher than had the house been objectively valued and priced. Were that not enough bad news for one day, just moments later Alberto and Rosa learned, for the first time, that Avila had represented Alberto to lender New Century not as a $400-a-week strawberry picker, but as a $100,000-a-year business owner. He was, to judiciously understate it, incensed. ”
Predators like Maria Avila should be in prison.
“The moment the clients–also farmworkers–gave even a mild possible assent, Cal-Wide brokers showed up at the front door, with incomplete English-only paperwork they couldn’t read and a notary public in tow to seal the deal right there. Only later did the family learn that they were represented on paper not as field workers but as “field technicians” with incomes of $12,000 a month. They actually earned around $12,000 a year.”
Send the predatory lenders to prison.
“At the height of all this, back in 2005 and 2006, pairs of real estate agents used to circle around places like Home Depot,” says Soquel attorney Pamela Simmons, who represents the Ramirez and Martinez families. “They’d pick up a group of day laborers in their SUVs, bring them out to a property they were selling to ‘cut the weeds and fix the place up,’ and then at the end of the day, pay them well and ask, ‘Are you guys by any chance renters? If so, you really ought to buy a house. In fact, how about this one you’ve been working on all day, right here?”
These agents aren’t professionals, they are predatory scum.
“Several years before, no one had particularly cared about such fraud. When, back in 1999, finance wonks warned that McCain adviser Phil Gramm’s successful attempt to repeal a 60-year-old law–one keeping commercial and investment banks’ hands off each other–was dangerous and self-indulgent, no one really listened. Sure, that repeal might let losses from fraud spread throughout the entire world financial system, but how likely is that?”
That “change” worked out well. Why should I believe a big enabler of corruption and fraud will clean it up?
“Only later did the family learn that they were represented on paper not as field workers but as “field technicians”
LOL! This is rich!
Still as far as stretching job titles goes, it might not be as outrageous as some that you’ll find at your local city hall.
Usually it’s title inflation in lieu of income inflation. With RE, we got both. Of course none of the oh so careful lenders questioned the veracity of these obviously inflated titles and incomes. Maybe the lenders should have to pay the taxes on the stated income of these borrowers as punishment for their lack of proper oversight in lending to be extracted from the bonuses of the Mozillos of the world.
Well, if one’s going to embellish their credentials in this society - it pays to stick with something technical.
I’m pretty sure I convince any of my coworkers that there is indeed a “flux capacitor” lurking somewhere beneath the hood of their car.
‘I’m pretty sure I convince any of my coworkers that there is indeed a “flux capacitor” lurking somewhere beneath the hood of their car.’
Well, there IS one in MY car. Witness my usual Warp 9 speed. Also an alien jammed in the trunk every now and then.
“Also an alien jammed in the trunk every now and then.”
I’ve got a trunk monkey in mine.
(only available at Brazee Chrevolet)
http://www.youtube.com/watch?v=7zt4ExqnTBI&feature=related
Trunk monkey car commercial
Motorcycle Cop: Whatcha got in the trunk?
J. Frank Parnell: Oh… You don’t wanna look in there.
The collapse of the housing bubble would be a great foot-in-the-door for lawmakers to put the entire real estate industry out of business. Nobody likes them. It would be far cheaper for people to pay an attorney a couple of thousand dollars to oversee the transaction than to pay 6% to some stupid woman who read a booklet and passed a test.
And if there’s one group of people who should be fined, taxed, and liquidated with proceeds to go to assist FBs, it’s the real estate agents!
But no lawmaker or AG will go after them! At the very least, every bailout bill should exempt licensed R-E agents and mortgage brokers. They should have known better, and should not be eligible for bailouts or tax relief, but they are!
Isn’t the flux capacitor next to the dilithium crystals?
Maybe “fructose engineer” would be an appropiate title for the mortgage application of that gentleman who picked/picks strawberries for a living.
“Predators like Maria Avila should be in prison.”
I think Jack Abramoff is looking for a roomie. He is also a religious man. They could talk theology together.
So why aren’t these folks going to prison then? Who is getting bought off? Even Abramoff doesn’t have that kind of money.
Too many of them. Sorta like “too big to fail.”
And the authorities would spend too much money in relation to the amount of crime they remove. Jack was high-profile enough to make the feds look all goody and stuff. These little folks don’t offer enough bang for the buck.
But when you combine all the little RE sales and loan agent ants together, they make up one big destructive fraudulent force .
In terms of crime ,when you have the worker bees being this corrupt ,it’s like a bee hive that has been infested with a deadly mold that dooms it to extinction ,or destruction . The marker makers set the stage for the housing crash in large part because of a market that was riddled with fraud ,combined with marketing myths and faulty lending . A mania
that is based on fraud or unqualified buyers is doomed to fail .
This is interesting. We like to bash on Greenspan, Bush, Mozillo, etc all the time, but noone ever seems to bring up Gramm. I challenge everyone to do some research on him. Not only was he involved with the repeal of Glass-Steagall, but he was also involved with writing the energy deregulation WITH Enron lobbyists (lol go figure) that led to that disaster in the early part of this decade. IMHO, if any of these slimeballs deserves to do the perp walk in the orange jumpsuit, its this jack***.
Somehow, I doubt God looks kindly on those who lied and cheated to help create the black hole known as the Housing Bubble that is currently sucking down our entire economy.
Once in 100 Year Crisis?
by Joe Average| September 2, 2008
Print
“The credit crunch of the past year has not followed the path of recent economically debilitating episodes characterized by a temporary freezing up of liquidity ─ 1982, 1989, 1997-8 come to mind. This crisis is different ─ a once or twice in a century event deeply rooted in fears of insolvency of major financial institutions.
“…the markets are telling us to prepare for hard times, and a global spate of the worst deflation to be seen in generations…sophisticated money is cashing out, raising cash, preparing for world deflation. This is why gold has been sinking…why stocks have been falling. What I see is a coming world deflation. What’s the best stance in a deflationary situation? Lots of cash…US Dollars and US Treasury paper”.
http://www.financialsense.com/fsu/editorials/swagell/2008/0902.html
“…sophisticated money is cashing out, raising cash, preparing for world deflation.”
Are they talking about you, Combo? I pictured you too modest a fella to let anyone call you “sophisticated”.
Naw, I’m not sophisticated, merely cheap. I hate to see my wealth evaporate along with declining asset prices.
That’s why I like cash; Cash increases in value as everything else slides in the opposite direction.
You’ve got that right.
Yup, if there ever was a time not to get caught flat-footed this is it. I wholeheartedly agree that there will be much opportunity ahead, but the immediate task is obvious…stay nimble.
Or “stay light on your feet”….I am packing it away like a squirrel in the fall…There are going to be good opportunities IMO as we move through this mess….
Why settle for rectangle placebos, when you can still buy XXIV, w/o a prescription, just script.
The wheels have fallen off at Pimpco, and Pimp Gross is not a genius, after all, but a parasite in a costly suit.
Bill Gross, the influential manager of the world’s biggest bond fund, Pimco, called in his latest investment outlook for unprecedented government intervention, saying it was needed to avoid another damaging wave of asset sales.
http://www.reuters.com/article/ousiv/idUSN0441908220080904
Gross has never been a genius. Like Greenspan, he gets a lot of media worship because he heads up a big outfit. Gross is a commie thug who wants to rob the average Joe blind. Pitchfork please.
I’ll get the torches!
RE: Gross is a commie thug who wants to rob the average Joe blind. Pitchfork please.
lol…-”YOU DA MAN”, Ben!
Add tar and feathers.
While it is true that traditional materials offer satisfaction and time-tested reliability, the innovative approach is one I’d heartily recommend in this case. Besides, tar is heavy and can mess up your car big-time. For example, along with a *little bucket* of tar and feathers, why not include a big jar of live eels? Coated in peanut butter?
And a Shop-Vac.
Ahhhhh,
I like your retribution even better.
Gross is a commie thug who wants to rob the average Joe blind. Pitchfork please.
I agree 100%.
Am I correct in guessing that the asset sales which Gross insists the government needs to conduct in order to save the world would (inadvertently, I am sure) directly benefit PimpCo’s bottom line?
It took little research to obtain a tentative answer to my question. Where is Gross thinking the Treasury will get the money to support everyone involved in the U.S. housing sector from the GSEs on down to Mom and Pop, especially after all the monies already spent on stimulus to date have added to the national debt?
Daily Briefing
By Colin Barr
Daily Briefing
September 4, 2008, 11:15 am
Pimco’s Gross calls for broad housing rescue
Bond manager Bill Gross wants to spread the bailout wealth.
Gross says in a commentary posted on the Pimco Web site Thursday that the government must “open up the balance sheet of the U.S. Treasury” to support Fannie Mae (FNM), Freddie Mac (FRE) and, in a new twist, “Mom and Pop on Main Street U.S.A.” as well.
Gross has previously said he believes the Treasury will have to assist Fannie and Freddie in any efforts to raise new capital. His Pimco Total Return bond fund has major positions in mortgage-backed bonds issued by the government-sponsored enterprises, so it’s no surprise that he sees it that way. But now he’s calling on Treasury Secretary Henry Paulson to use federal funds to buy more housing-related assets, in the name of preventing asset-price deflation from spiraling out of control.
“Total Return”. You keep using that word. I do not think it means what you think it means….
“Total return” is the name of PimpCo’s bond fund. I only used it in the sense of quoting a passage from the linked article. I don’t claim to know what PimpCo thinks “total return” means, either.
PB,
I think Blue Skye was taking a shot at Pimco, not at you.
I was shooting at Pimco, Blue Skye should be more clear.
Boys & Girls…
Emulating Dick Cheney’s shooting habits will only cause us to lose face.
in the name of preventing asset-price deflation from spiraling out of control.
In the 30’s, the govt burned potatos and slaughtered pigs in the same name. Maybe now they will burn houses and slaughter REIC pigs?
Burn the houses? Nah, it would add to global warming. But bulldozing and hauling away the debris keeps the carbon sequestered (in the 2 x4s and other wood products).
Gotta love this.
http://market-ticker.denninger.net/archives/566-PIMCOs-Bill-Gross-Make-My-Willful-Bad-Bet-Good.html
Bulldozing? Hmmmm . . . perhaps it’s time to buy more TEX?
CAT is beaten down and may have some claws left.
REIC Marshall Bill?
http://www.youtube.com/watch?v=oufm0KwA9Xk
Soak the sheeple. Save the wolves/suckers.
These guys extol capitalism while they’re making money.
Once they stop making money, they scream for the government to pay for their mistakes and help them keep making money. With enough money, they can bribe enough politicians to make it happen. Because the profitability of their companies is essential to the continued health of the economy. Without their own profitability, certainly, they assure us, economic catastrophe will follow.
They are a combination of capitalist and communist. Con-unists.
Goldman yells ‘fire’ in a crowded theater
NEW YORK (Reuters) - Merrill Lynch & Co (MER.N: Quote, Profile, Research, Stock Buzz) shares fell 7.6 percent to $21.24 before the bell on Friday after a Goldman Sachs analyst cut the stock to “sell” and warned Merrill will likely incur more write-downs.
I believe it was “conviction sell”
somebody’s gonna get indicted.
Goldman yells ‘fire’ in a crowded theater
That’s ok when there is actually a fire.
William Golding wrote “The Lord Of The Flies” and Goldman Sachs is living the saga, in real-time.
http://en.wikipedia.org/wiki/Lord_of_the_Flies
And when you’re not in the theater yourself, but only watching on a lawn-chair from a distance, but a bunch of people you despise ARE in the theater, and the exits are mostly blocked off.
Then, sure. It’s just finnnnnne to yell ‘fire’.
Bwahahahahaha!
And when you’re not in the theater yourself, but only watching on a lawn-chair from a distance, but a bunch of people you despise ARE in the theater, and the exits are mostly blocked off.
Then, sure. It’s just finnnnnne to yell ‘fire’.
Can we lob a few molotov cocktails, while having a few other cocktails of course. And don’t mix up which ones you are throwing and which ones you are having.
‘Can we lob a few molotov cocktails, while having a few other cocktails of course. And don’t mix up which ones you are throwing and which ones you are having.’
My man, you’re clearly one of them geniouses. I say, ‘yes, let’s do it.’ And we need some candy, and a camera.
I’d say instead of yelling “fire” they should have yelled “smoke!” The time to yell fire was last year.
But at least they get the warm fuzzy feeling that comes with calling 911.
Wouldn’t it be interesting if the whole financial shebang went kaboom on the 7th anniversary of our mirror being broken, next Thursday?
My workplace must have an excellent spam filter because compared to other jobs - absolutely nothing from the outside gets through…until recently.
All of a sudden we’re getting spam from agents/developers hawking local condoze. Since not a single “Nigerian Prince”, “cheap meds”, or “HGH gimmick” gets through - this reeks of being an inside job.
I wonder who has a relative/friend agent that they are working with?
I started to get real estate spam from @properties after a birthday get-together for a friend. Seems the agent, Angelo, added the whole e-mail list of potential birthday goers (perhaps 30 or so people) to his distribution list. Turns out I sat next to him for a while at the birthday dinner, too. He knows my friend from when they were both “actors.”
I was annoyed at first, but it’s easy enough to filter the spam. I kind of enjoy the small doses of Propaganda From The Other Side. And I like to think of ol’ Angelo getting nervous about all the luxury condos still in the pipeline …
It irks me that Nigerian Princes do not have the same opportunities to rob me blind as do my local agents.
Hah
Back in the days of snailmail, i’d look forward to their letters…
Their ploys weren’t what I was after, it was their most unusual block english lettering style of lettering that intrigued me the most.
I could imagine half the population of Nigeria either thinking up scams, or writing correspondence to that effect…
I absolutely love Nigerian scams. They are so uniquely written. Every time I get one, it really makes my day.
and you are not going to share any of these exciting offers with us?
Nope, I wouldn’t wish a “luxury” Chicago condo on my worst enemy.
Then again…
There is some good news and bad news in today’s SD Union-Trib business section.
- The good news is that San Diego is now the most undervalued market in California, thanks to a 32 pct price decline from their peak.
- The bad news is that prices could drop another 10 pct over the next year before they level out and start climbing again by 2010.
I wonder if the outfit who did this study considered:
1) That San Diego is currently in recession?
2) That the recession is likely to continue for some time, due to a virtual shutdown of the residential construction industry, which was a mainstay of the economy between 1998-2005, coupled with a huge drop in home equity wealth which used to fuel the consumption sector of the economy (e.g. boats, SUVs, lattes, expensive vacations, etc) through the home equity ATM machine effect?
3) That there is a tsunami wave of foreclosures coming back on the market faster than homes are selling?
4) That home prices were recently falling at a 25 pct annual rate, right in the middle of the red hot summer sales season?
5) That prime and Alt-A resets, which are not scheduled to peak until 2010 or so, will hammer the high end coastal housing, crushing the prices of everything of lesser value?
6) That IndyMac, a primary supplier of the Alt-A mortgages which helped so many people use liar loans to get into homes they cannot afford, is no more?
Perhaps they believe that “the government” will bail out the situation by 2010?
I don’t buy that there are yet any markets that are undervalued in CA, including areas with large price declines such as the Inland Empire and Central Valley. The areas with the largest declines in San Diego are still well above 2000 levels and some of the better areas still have lots of wishing prices (but few, if any sales) near peak bubble levels. In areas that won’t go to zero, the crash isn’t even half way done. There is little that will be undervalued until we are near the eventual true bottom assuming an undershoot on the downside. That might not be for another 2 to 3 years.
I agree with you, Greg, as I don’t see the 32 pct discount showing up in MLS list prices yet, suggesting sellers are still in collective denial.
But stories like the one in today’s SD U-T business section might help sellers get past their denial…
I’m waiting to see when the realization sets in that prices really have fallen that much or more. I think it’s still being rationalized that only distressed properties or undesirable properties have fallen that much. However, for anything to have any chance of selling, it must be priced at that level or lower. Current incomes don’t begin to match current list prices given current lending standards. To restore a sense of equilibrium and to have a sustainable housing market, prices have much farther to fall.
San Diego houses sold for around 3/4’s of what a comparable house in a comparable neighborhood in L.A. would have, 10 years ago…
Prices have a long way to fall still in Tijuana-adjacent, $150k seems like the “right” number for SFH’s to settle at.
I agree, aladinsane.
I was saying 40% back in 2005 as that was the amount prices needed to fall in order to fit income and rent ratios. At that time (and not until recently) I did not realize how bad the recession is going to be and how much it would affect the economy of San Diego. I’m now saying 50% but am also aware that I may still be a Pollyanna. It seems so safe after a 32% drop to say there’s going to be another 10%. But what were they saying in 2005?
2012 will have a lot of answers. Until then, munch popcorn, live below your means and hug your kids or pets!
Prices are going to 1990 levels, but that won’t wind all the way out until around 2018.
Much of the country is going to be underemployed from here on out.
There is no economy to go back to. Right now we are Britain, 1956.
All of our brains are shutting off. No more creation of wealth, no more drug discoveries, no more lower cost software and hardware technology. At least until 2018. Right?
NOT!
The 2018 prediction is housing-specific. I also say it doesn’t really get better there, it just bounces and skitters along with the economy, which won’t be improved much beyond now at best. (But I predict the The Bureau of Labor Statistics will by then have reported that US productivity has skyrocketed by 120000% from where it is now though, mostly by virtue of incremental computer speed increases of the like we’ve seen for 25 years. The slack will be picked up by creative improvements to software which make it only slightly less labor-intensive to widen the latitude in thread load balancing in multicore configurations.)
Unemployment will be “6.5%” and inflation will be a mild “2%” or “3%” per year. Businesses servicing food and fuel hoarding will see their market values rise.
The Brits went on to make contributions in the sciences and arts. They threw up a few new buildings. Unemployment and underemployment remain high 50 years later.
Please don’t try to post articles in their entirety. Even if they get through, I’ll remove them.
I, for one, prefer to read the articles here, rather than open a link. I know how to scroll.
I try not to waste your band width ben, but sometimes I cant resist. Can prof. Bear still post his articles? I like his because he highlites the most important parts.
The way almost everyone does it is fine, and picking out relevant quotes and stats adds to the discussion. But every once in a while someone tries to put up the whole thing. I see that everywhere on the web, and it is sort of a waste of space.
http://www.bloomberg.com/apps/news?pid=20601109&sid=apaFLmBXSalY&refer=home
Governor Mitch Daniels says trade shows at the stadium and an expanded convention center next door will help make up for about 50,000 manufacturing jobs lost since January 2005. Indiana officials are urging bond sellers JPMorgan Chase & Co. and City Securities Corp. to play up the link to Manning, who led the Colts to victory in the 2007 Super Bowl.
Manufacturing, Indiana’s second-largest job source behind the combined category of transportation-utilities, shed 49,700 jobs from January 2005 to July 2008, an 8.7 percent decline, data from the Department of Workforce Development show. Monaco Coach Corp., the biggest U.S. maker of diesel-powered motor homes, is closing three plants in the state following the fuel’s price rise to more than $4 a gallon.
The stadium and enlarged convention center will create 300 to 500 jobs, and the arena may host trade shows 180 to 200 days annually, Mayor Gregory Ballard has estimated.
The arena also will help nearby businesses, said Rick Hurst, president of N.K. Hurst Co., a bean-soup maker adjacent to the stadium parking lot.
300 to 500 jobs are going to make up for 50,000 manufacturing jobs lost AND the $612 million in public bonds issued for construction?
I tell my dad that I worry about his state pension (education) and he keeps telling me that Mitch Daniels always figures out a way to fix problems. Yeah right.
I’m just not seeing conventions and trade shows being a growth area in a down economy. For those still going, why Indy? Aside from costs, it’s hardly a thrilling option and air service isn’t that great either. They could also target more local traffic, except all those manufacturers are out of business. How many of those 300 to 500 new jobs pay as much as the 50,000 lost manufacturing jobs? The governor’s plan looks more like an excuse than a plan. It’s easy to fix problems when times are good and problems are few and small or to mask looming problems. Let’s see how good Daniels is at fixing many big problems during tough times.
I think this demonstrates why Indiana is in play this November.
Put Barney Smith before Smith Barney:
http://www.youtube.com/watch?v=IuAVw_v3br8
I worked in that industry for almost 8 years. It was interesting that when we tried to move a show from one city to another, the booths just didn’t sell in the new city. Our company tried to make it happen for 3 years and then gave up and kept it in the old city. (they were looking to save money, union city vs non-union)
Not every location can sell a trade show.
Every mid-size city in th US is chasing the conventions and tourism dream.
Along with the “revitalizing downtown” dream. Some are even going for the “Twofer”
RE: The stadium and enlarged convention center will create 300 to 500 jobs…
Like pouring overpriced flat beers, swabbin’ the men’s and ladies rooms toilets , and pickin’ up the seat trash.
America’s on the move.
“Like pouring overpriced flat beers, swabbin’ the men’s and ladies rooms toilets , and pickin’ up the seat trash.”
$8 piss called beer paid for with HELOC $$. Umurrrica is #1 yes we are!
When will they get it? If you want America to return to being a manufacturing giant, just send the unemployed to community college and cut pay to $5 a day. Then we’ll be competing!
Actually, you could probably cut out the community college thing.
This overemphasis on college is what contributed to America’s decline. That is not sarcasm.
RE: This overemphasis on college is what contributed to America’s decline.
All the US shoe manufacturing companies along with the individual skills involved in the process are gone save for New Balance.
Even the famous LL Bean hunting boot is foreign built.
We can’t even shod ourselves anymore.
This overemphasis on college is what contributed to America’s decline.
———————
Defintely. Expecting college degrees for work that only required a HS diploma before (and the pay will usually not rise with the increased requirements) means our standard of living has fallen.
When more people get degrees, the value of the degree declines.
It’s a bit like shrinking the package size for food. Inflation just the same, but the sheeple don’t notice it as much.
IN really has been hit hard. I still can’t believe that UAL’s narrow body maintenance base in Indy has long since come and gone. They had the right idea with that one, and it still surprises me that it couldn’t work out.
he length of time to turn the planes starting increasing due to union/mgmt strife and they lost their external maintenance contracts.
The lost jobs at Monaco Coach are in Elkhart County, which is 150 miles from Mitch and all his Indianapolis based buddies and contributors. Indy actually has done relatively well for a rust belt city over the last 20 years. The NCAA moved its HQ there a few years ago and the place is more vibrant than it was 20 years ago when they practically rolled up the sidewalks at night.
The problem is that the rest of the state has been getting the midwestern equivalent of the joshua tree treatment. Since the state media and politicos are Indy centric, the problems elsewhere simply don’t exist on their radar.
Is the First Internet Bank of Indiana a safe place to keep my money?
Thanks.
“Indiana officials are urging bond sellers JPMorgan Chase & Co. and City Securities Corp. to play up the link to Manning, who led the Colts to victory in the 2007 Super Bowl.”
Circus Maximus, S.P.Q.I.
If Manning is all they have to offer, they are in trouble.
I’m not dissing Manning — he’s great, no problem there. But Manning — and NFL players in general — are as durable as a Toll Brothers McMansion. They play well for 5 years, then they fall apart.
(for Manning it might be 10-12 years, but you can’t base an economy on him.)
Let’s see — prices went up by what, 250 pct or so, from 1998-2005? And now they are down by 32 pct. I guess they are pretty undervalued by now?
Change in value since 1998 (insert exact Case-Shiller figure for 250 pct and adjustments for income and inflation if you are annal retensive):
((1+250/100)(1-32/100)-1)*100 = 138 pct (still overvalued)
A housing flip-flop
Local market now most ‘undervalued’ in state, study finds
By Roger Showley
STAFF WRITER
September 5, 2008
San Diego, which three years ago had one of the most overvalued housing markets in the country, is now the most undervalued in California, the economic and financial analysis company Global Insight reported yesterday.
The market has improved because housing prices have fallen about 32 percent from their peak, while incomes have continued to increase.
“A metro area like San Diego has, in a sense, fallen too much,” said James Diffley, who directs Global Insight’s regional services group.
But he cautioned that prices could drop an additional 10 percent over the next year before they level out and start climbing again by 2010. Diffley cited the continued influx of foreclosures on the market, the weak economy, and tougher lending standards that will make it difficult for buyers to get mortgages.
On the other hand, Southern California benefits from a strong export market and is not as depressed economically as some other regions of the country.
(Online: For detailed housing prices, by neighborhood, go to uniontrib.com/more/july08stats )
“You still have a huge amount of properties for sale,” Diffley said. “That’s going to depress prices further, regardless of what you think about the (area’s economic) fundamentals.”
“Our future, in a lot of ways, looks like the Bay Area’s within the coastal hills,” Bruvold said. “We have no vacant land; it’s all infill (for future housing development), and people still want a detached home with a yard and kids.”
Not everyone wants this type of housing. How sustainable is this type of housing in a world of much higher energy prices with supply shortages? While there are good reasons to be leery of housing governed by HOA’s, I’m not sure I want to pay a premium to live in a SFH versus renting. I’d probably weight location and cost more important than type of housing.
We lived an HOA McMansion lifestyle with our former residences and toltalitarianism stinks. An older, well maintained neighborhood his our next purchase. Besides, the floorplans are more formal in older homes. I’ll take a green house in the neighborhood for the freedom. HOA’s make you feel like a tenant with more expenses.
Credit Card, Auto Debt Were the Worst Debt Performers (Update1)
By Sarah Mulholland
Sept. 3 (Bloomberg) — Bonds backed by credit card debt, car loans and commercial mortgages were the worst performers in the debt markets in August as concern escalated that consumers may fall further behind on their bills.
…
“There doesn’t appear to be a levee high enough to contain the spread of consumer credit risk,” Jim Vogel, an analyst at FTN Financial Group in Memphis, Tennessee, wrote in a note to clients yesterday.
…
“The credit recession migrated from the residential to the commercial mortgage space, and has now moved into the consumer sector,” Lehman analyst Jack Malvey said today in a telephone interview from New York. “Financial markets are discounting securities which are perceived to be most affected by consumer behavior.”
Cash … Everybody needs cash. Those with cash call the shots.
It’s good to be the king.
Needle stuck in the groove, eh? Your king has lost 98% of his value. Dethroned.
Now, now, Combo has a valid argument. What’s puzzling is that everyone around me is clamoring for a pay raise - but following your argument for a moment - shouldn’t they be demanding to have their existing salaries paid in gold instead?
Driving from the rear view mirror can result in nasty accidents.
Your king’s coinage has lost twenty percent of its value a lot quicker than it took the green rectangles to lose 98 pct of theirs.
Wrecked angles will always be good for tinder, but not necessarily legal tender.
I bought my gold in the 500’s and 600’s. I am still ahead of cash and combo. 700 seemed too expensive. The 800’s too. During the 900’s I was just waiting for lower prices… I am sad that I might not see the 600’s again… ;( I guess I would need to reload in the 700. Come down, stupid gold!
Just came back from China. Things did not seem cheap. What about Europe, where I am from and go there all the time? Outright expensive. What deflation, I would like to know? Shanghai real estate has NYC pricing. They do have lots of people. But it is not worth that much.
For what it’s worth…
Talked to my buddy, who owns one of the largest retail bullion stores in L.A.~
He told me that demand after being feverish for the past few weeks, has settled down, but there are no sellers of bullion over the counter back to him, either.
A stand-off, with inventories of metal dwindling down, Silver in particular.
I think because Silver is an ‘everyman’ metal, it will disappear first.
Everybody can afford $15-20 for an ounce of preventional thinking…
RE: What deflation, I would like to know? Shanghai real estate has NYC pricing. They do have lots of people. But it is not worth that much.
There’s a monsterous underground economy out there nobody wants to talk about.
WTF?
$300 million of US re-construction dollars got stolen outta of an Iraq bank. The heist made like page 8 in the Beantown Glob and was never mentioned again
The entire country of Russia with the world’s largest oil and gaz supplies is run by the Mob.
Africa & South American governments are completely corrupt.
And this is on the world scale…never mind what the local sleazebag outlaw bikers and gang-bangers are doin in your hometown.
Billions of laundered vice, graft, and embezzled monies gotta find a home somewhere.
Everybody can afford $15-20 for an ounce of preventional thinking…
I think you right. My dad has always owned silver, but never gold. I think the US Mint removing the silver from the silver dollars may have made him realize that the new dollars were really not worth anything.
Hi, could somebody explain what is meant by “cash?”
Is it actual dollar bills in the mattress?
Is an FDIC savings account okay?
Gold coins?
Could cash count as anything liquid, like non 401K stocks/short-term bonds?
Or by cash, do you mean “assets,” which is stuff you have,
as opposed to “future assets” like MBS or other debt, which is stuff you hope to have in the future (+ interest).
What about housing owned outright? It’s not liquid, but it’s not debt either…
It depends on context. Combo is referring to pieces of paper and electronic digits that are easily transferred to paper by a mere withdrawal.
What I mean by cash goes beyond currency. Cash and cash equivilents is a more accurate term. This includes MM funds and savings bonds and any other place available to park money that is safe and readily accessable.
I won’t forever be the Cash-is-King guy; there will come a time when my mantra will become Stocks-are-King. This shift will occur when money is expensive and stocks are cheap, which will probably be sometime late next year.
I became the Cash-is-King guy when Goldilocks ruled people’s economic thinking. When End-of-the-World thinking prevails then I plan to move into quality stocks.
FWIW.
When you regard cash as savings bonds and treasuries, “cash” does a remarkable job of keeping up with the inflation level over the long term. Savings bonds are much better than treasuries because the federal tax is deferred up to 30 years of issue date.
Many people who cheerlead against cash try to persuade by pointing to the dismal performance of passbook savings accounts and do not mention savings bonds or treasuries.
They are “spinning,” that’s all.
Cash is money (Dollars) that you have in your pocket or in the bank. Of course it could be in your mattress or savings account.
I moved out of my CA muni bond fund to:
1. Cash under FDIC limit (if the government will move to save Bear Stearns, it will definitely move to make sure the FDIC is in place and solvent–if I don’t believe that, I should be stockpiling guns, ammo, and rice).
2. A ladder of US Treasuries, 3, 6, 9 and 12 months–I don’t want to be hit with big hits in the event rates rise.
I have plenty of liquidity, with bonds maturing every few months. If I needed to make a big purchase, I could liquidate the rest of the bonds with little principal risk.
This is the safest position that I could think of as a holder of “cash”.
Rental Watch,
Those are wise moves, IMHO.
The nice deal with Treasuries (and savings bonds) is that the US government tends to pay off its debtors first, before it pays for more idiotic entitlements. In addition, it can merely print money and “voila,” you will be paid to the term of your treasury item.
Municipal bonds do not have such a “guarantee,” of course, since individual states do not print currency. However, it’s a risk I’m willing to take, and have been since early 2002.
The Important Economic and Political Sequence to Keep In Mind
The following is what I sent out couple of months ago:
< Commodities Bust — > Depression — > Deflation — > Greater Depression.
I want to disabuse American faithful of any thought that the Fed can prevent the above scenario. Beyond helping Bankrupters and Fraudsters the Fed is impotent. “The US taxpayers are the losers of last resort”! >>
To this I can add:
Global recession — > Global Depression — > Govt failures in many countries, including India — > Collapse of the current US political system (approx. in 20 years).
All this because of the abuse of debt as never before in history.
Jas
Jas,
Are you saying that Depression is caused by commodity prices going down? I think that might be backwards.
Calling for the collapse of the US government is kind of hysterical, ya think? TEOTWAWKI!
20 years is a long time to be careening from one guardrail across the road into the other. Either something calms down the markets to mere weaving or this puppy leaves the rails a lot sooner than 20yrs, IMO.
I agree. Jas seems a bit overconfident in the accuracy of his foresight.
Jas Van Winkle?
Depression is caused by a lack of credit to start and maintain businesses, a loss of jobs and a lack of consumer confidence causing GDP deflation, and a broad depreciation of assets, from commodities to even paper money if the Fed has its way.
Actually you have been calling for this outcome for years, even as rates were slashed, money supply exploded and the Great Inflation began. And as commodities exploded to the upside. How about addressing your track record? Or is it the typical ‘just wait 6 more months!’ deflationista argument?
I suggest you read ‘Deflation, making sure it doesn’t happen here’, available online and written by Ben Bernanke in 2002.
A few quotations:
Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.
This is my favorite reference so pay attention Jas:
Today an ounce of gold sells for $300, more or less.
That’s right Jas, in 2002 an ounce of gold was 300. Would you care to guess what the value of a USD was? So don’t try to convince us that deflation is right around the corner.
“We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.”
Is this what you see happening?”
Jas is counting on the maxim that, given enough time, any prediction will come true.
Wow!
I predict I’m soon going to eat a maple bar and try to talk excitedly about stream buffers at the exact same time, spitting crumbs all over my pretty skirt and mildly repulsing the Department of Ecology guy.
(We’ll just see about this, Mr. Fortune Teller.)
Don’t be cruller…
Just another crewel lye.
‘I predict I’m soon going to eat a maple bar and try to talk excitedly about stream buffers at the exact same time, spitting crumbs all over my pretty skirt and mildly repulsing the Department of Ecology guy.’
Well, I am back, and I am just astounded at the accuracy of my prediction. The only variation in my prevision of the future was that it turns out the ecology guy also is very excited about streams, so he too talked and emitted slobbery crumbs, only not onto his pretty skirt, because he was wearing pants. Otherwise, spang on!
My next prediction is that I become Queen of the Universe and get a golden chariot to ride around in, pulled by magic pink darling ponies. And there’s candy in the chariot, and some strawberries. Let’s see how long that prediction takes to come true.
Did you read the article? Have you compared the value of your USD between then and now? Do you think you can fight the Fed and win by hoarding green rectangles? You don’t have a chance, King dollar…
I don’t think the question of inflation or deflation can be settled right now. I would hesitate to put all my eggs in either of those baskets. Not all price increases are inflation.
“Is this what you see happening?”
Easy peasy lemon squeezy. All the government needs to do is to mail out more “stimulus” checks…make it an even $50,000 check to every taxpayer. Pay for it not by raising taxes, but by “printing” more money. Maybe even do it once a year if you have to.
Easy inflation.
It’s easy to increase the supply when it’s paper rectangles, or better yet, binary digits on a computer.
If the FED prints money
We will again get relative commodity inflation
This will leave less money for purchasing things people don’t need. This will lead to deflation in those goods.
We are seeing deflation in housing, deflation in luxury cars and SUV’s, and the stock values of companies dealing in these items. Until they use that printed cash to increase salaries the trend will not reverse. Manufacturing companies like GM Ford will see a rise in costs (higher steal, energy ect) but a consumer who can’t afford more.
60% in cash/treasuries - That money will go toward a house in a few years.
but some gold, and relatively soon back into oil and basic need stocks. Place your bets
I bet on Red (ink)
I agree, you can’t have rampant inflation without a wage/price spiral.
The “wage” portion of the equation has been left out.
The rest of the world got the memo late (that the world economy had too much debt and is now in “deleveraging” mode). So, commodity prices have been slow to fall–speculation on commodity prices hasn’t helped.
Oil is not a perfect example (since it’s not a “normal” market), but an example, non-the-less. Oil prices went up, people’s incomes aren’t going up enough to make up that difference in their overall budget, so people use less gas, oil prices go down.
Speculators exacerbate the swings, but don’t impact the long-term supply/demand dynamic.
Housing is another example–lack of demand for new housing has driven the cost of production of a home down by 10-20% (due to labor and materials costs falling).
For what it’s worth, my bet is on distress, and the need for people/institutions in such distress to sell assets CHEAPLY to raise cash.
“So how do you get inflation? Simple.
…Reduce the marginal utility of dollars: This happens either if the supply of dollars becomes more abundant, or if the demand to hold dollars becomes weaker.”
Supply: Since August 2007, the US Treasury has guaranteed 1.34T in debt. New moneys.
Demand for dollars growing weaker? TIC data shows that Foreign Central Banks are reducing their holdings of Fannie, Freddie and long term US Treasuries and buying 3 month to 5 year treasuries - most in the 2 yr category. That is a reduction in demand. The reason that the “dollar looks stronger’ is the euro centric valuation. Down against the Yen, Yuan, Real and 100 other countries currencies.
Buyers of US Treasuries have been institutional investors (PIMCO et al) because they cannot risk buying US corporates, 60%+ are Junk. The government is backstopping Freddie and Fannie, but foreigners are dumping. Indymac is currently offering 4.25% on a 1 yr cd. Thie Indymac offering should be swamped, it is currently the safest bank in the country backed by the full faith and credit of the US government. It is not swamped.
Bubbles bursting is not deflation. “As long as a government appropriates goods and services to itself in return for pieces of paper that compete as stores of value and means of exchange in the portfolios of investors, you’ll get inflation.”
Wages have nothing to do with it.
If wages stay stagnant and prices increase the economy crumbles ( or is crumbling). You cannot have SUSTAINED inflation w/o wage increases. Simple supply and demand.
Bernanke is not the dictator of the Fed and about 75 million baby boomer retirees who vote will have a real serious problem with inflation. Deflation is what we typically have in America. Do not be so confident that deflation is not again possible.
It’s a completely different world from the early 1980’s when we could deflate interest rates of almost 20%, down to a few percent.
Interest rates mean nothing today, as increasingly, nobody wants to loan @ perceived low rates of just a few percent.
All the inflation this go round is price energy-based inflation, food & oil…
Deflation is what we typically have in America.
The dollar has lost over 90% of its value since 1913. How is deflation “typical”?
When I was pre-lad in 1960…
Gas was 25 Cents a gallon and a house was around $12k.
If things were deflating at the rate things are really inflating, gas would be 2 cents a gallon and a house would cost about a grandido…
“Collapse of the current US political system (approx. in 20 years).
All this because of the abuse of debt as never before in history.”
Jas,
No offense intended, but you are a bit of a pessimist. I concur that the U.S. has financial issues to work through, especially regarding the abject failure of the debt securitization business model which recently took over on Wall Street, but the future is not deterministically wired in stone, and there is certainly some chance that systemic reform will lead us to a better place in twenty years than the collapse scenario you foresee.
Just my two bits…
There goes inflation again.
It used to be “Just my two cents”
Now its “Just my two bits” (25 cents)
I concur and add that destabilization abroad has, generally speaking, always benefited the US. It allows us to skim the cream of the crop in terms of intellectuals, etc. as they look to flee to a safe harbor.
Now, that being said, it is possible that we might amend the constitution to change the make up of the Senate.
The Fed may be entering its deflation scare stage that it had in 2002 and drive interest rates down substantially. However, gold bugs like to point out that this is inflationary and should help precious metals.
Not a good idea to be completely out of metals but keep buying a few ounces for cash while buying your T-bills.
Many prospective U.S. home buyers who recently suffered from a case of cold feet now appear to be at risk of developing pneumonia. After all, who wants to sink a large downpayment into a home purchase when you may need the cash to carry you through a period of unemployment?
ECONOMIC REPORT
Unemployment rate unexpectedly soars to 6.1%
Job growth falls 84,000 in August and much weaker over summer
By Greg Robb, MarketWatch
Last update: 8:30 a.m. EDT Sept. 5, 2008
WASHINGTON (MarketWatch) - The unemployment rate soared to 6.1% in August, the highest rate in almost five years, as the economy took a turn for the worse.
Cash…
I can’t for the life of me figure out how this could be unexpected.
HELLLLOOOOOOOOO - THE WEEKLY CONTINUING JOBLESS CLAIMS (INJCSP) AND THE WEEKLY INITIAL JOBLESS CLAIMS (INJCJC) ARE STILL RISING DRAMATCALLY!!!!!
http://www.bloomberg.com/apps/cbuilder?ticker1=INJCSP:IND
http://www.bloomberg.com/apps/cbuilder?ticker1=INJCJC:IND
Why would the monthly unemployment number not be doing the same?
(scratches head)
400,000 has traditionally been viewed as the weekly jobless claims threshold which indicates the economy is in recession. We have been stuck at 400,000+ for weeks now. Anyone who says they are surprised by the jobs number is either lying or stupid.
And on the housing front
Shiller: House Price Decline Could Be Worse than Depression
http://bigpicture.typepad.com/comments/2008/09/shiller-house-p.html
The video is abput 6 minutes and worth watching.
In either case, sounds like a good market arbitrage opportunity, no? Dow off 1%.
Hmm - 400k? Seems to me about 350k would be about right, at least this go-around. From looking at historical unemployment rates vs. recessions:
http://research.stlouisfed.org/fred2/series/UNRATE
it appears to me we’ve really been in a recession since about March (change the range to 5 years to get more granularity), based on the rate of rise of monthly numbers. However the initial jobless claims didn’t really hit 400k until July. It was however consistently above 350k starting right at March.
Just to mince numbers
How did you find these symbols on Bloomberg?
I think someone posted them sometime ago on this blog. They’re not easy to find actually - I haven’t seen a list anywhere. To me they’re *very* meaningful numbers. I just wish there was a good place to get the same stat going back further historically, since those on Bloomberg only go back to 2004. Seems like the BLS would have this historical data posted, since they’re the source - but if so I haven’t been able to find it.
In that same article, 55,000 new jobs were created in health care. That’s the silver lining. It was interesting to watch my company’s stock during Friday. Dropped 4% Thursday and 3% Friday morning then finished up 1.2% COB Friday. Mostly into health care staffing. That’s the baby in the bathwater of staffing companies.
Bought 2000 shares below $5 a few months ago and the closing price is above $9 Friday.
AHEAD OF THE TAPE
By MARK GONGLOFF
Feels Like a Recession for Jobless
September 5, 2008; Page C1
The Bureau of Labor Statistics Friday morning will release August data on unemployment and nonfarm payrolls. Economists, on average, think the jobless rate ticked up to 5.8% from 5.7% in July and that payrolls shrank by 75,000 jobs.
Did Mr Market sniff out the payroll employment data release a day early?
Dow Falls 344.65 As Hedge Funds Go on Defense
By PETER A. MCKAY and GREGORY ZUCKERMAN
September 5, 2008
Just checking, so far as we all know, are we “entitled” to a sound currency? Are we entitled to fair and open markets? Are we entitled to overturn and overthrow the Federal Reserve?
The Republicans have looked disarrayed and Corrupt for the last 8 years, but recently, the Democrats seem incredibly dense and stupid.
In fact, right now they look like total idiots.
Two more months for the PTB to program the Diebold election computers.
You’re entitled to a fair and speedy election, no?
~~~bzzzt - whirr - BING!
McCain in a squeaker
what a freakin surprise
Mormon_Tea,
Ok, I’m no fan of either the Republicans or the Democrats, but it seems to me the Democrats have seemed incredibly dense and stupid for a lot longer than “recently.”
Ron Paul for president.
Yes, we can blame the last 8 years of stupidity on the Democrats. The “PTB” that lowered taxes on the rich while waging the most expensive war in history on false pretenses, doubled the national debt, gave the oil companies free reign, didn’t enforce existing laws overseeing Wall St, accounting transparency and mortgage lending were ALL liberals. Yup.
/sarcasm
Duh, I never said I disagreed with M_T about the last 8 years. What I said is that the Democrats, other than for some well-timed rhetoric here or there, have had nothing better to offer.
We don’t just need “change.” We need change for the good.
Things really accelerated downward in the last two years. That exactly coincides with the new majority in Congress. Congress solely controls the purse strings of the nation, and by the constitution is solely responsible for declaring war.
The new majority in congress ran exactly on the platform of ending war, investigating oil price increases by the oil companies, and making things easier for the middle class.
How is that all working out?
Yes, if we had elected Republicans to Congress in ‘06, then the Housing and credit bubbles would have continued expanding to infinity. My mom’s $240K house that she bought in 2002 would be worth $1M by now.
Stupid liberals, all the commie legislation they’ve been able to sneak past GWB’s veto has ruined America yet again!
110th congress 2007-2009
Republican 49
Democrat 49
Independent 2 - One is Joe Lieberman, not much of a democrat.
http://www.senate.gov/pagelayout/history/one_item_and_teasers/partydiv.htm
so you are saying that day 1 after taking over by the thinnest of margins with a president who will veto any legislation they manage to pass should have changed things????
Lag effect, people, lag effect.
Generally speaking, from an economic standpoint, policies enacted today won’t show their effects for a few years.
Other than a psychological change (less uncertainty after the election), who thinks that thins will be wonderful economically in January 2009 IN ANY EVENT?
No one.
D or R in the White House, D or R controlled Senate, D or R controlled House. Any combination or permutation of the above would still result in continued pain for a while.
If you were able to choose, with perfect omnipotence, what the exact policies should be to get the economy growing again with reasonably low inflation, it would still take years to work through the excesses of the past.
Please, if Obama wins I will not blame anybody but Bush and the extreme media bias but I will not call fraud. Can we please drop that tinfoil conspiracy vote tampering theory? If there is any voting conspiracy is on the part of leftist ACORN who is being investigated for massive voter registration fraud.
If the Republicans win, I believe it would be the first election since the Civil War when the incumbent party held the WH during a recession. Fair disclosure: I have no idea at this point how I will vote.
Latest news U.S. foreclosures hit another record in second quarter: MBA
MARK HULBERT
How partisan is the stock market?
Commentary: Poor market in September bodes ill for incumbent party
By Mark Hulbert, MarketWatch
Last update: 12:01 a.m. EDT Sept. 5, 2008ANNANDALE, Va.
(MarketWatch) — Has the stock market already voted by absentee ballot in this November’s presidential race?
If the past 8 years is the Republicans at work, then I am a PROUD COMMUNIST by choice now.
-
(p.s. I was a card carrying Republican until 2004.)
(p.s.s. I will vote for the Savior, not because I believe he will do what he has said he will do, but rather, because I do believe that the fossil and the creationist WILL do some of what they, as the only real proud Americans around, said they would do.)
The media circus is over! For the last week downtown Anchorage has been overrun by television cameras for Palin-palooza: all Palin, all the time. News crews capturing “real” Alaskans at our favorite watering holes, out jogging, cheerfully giving interviews about the nation’s most over-exposed governor…as long as they’re complimentary and sugar-coated, of course. TGIF, life around here can finally start getting a little bit back to normal.
She strikes me as just the usual evang rabble, a Palin-drone that speaks in tongues backwards and forwards, and longs to be with baby jebus, sooner than later.
Barack Hussein Obama strikes me as the usual Islamic militant who doesn’t like women in power. Look at what he did to Hillary. Why wouldn’t he pick the only other democrat this year who received more votes than he did as his VP.
might be good to educate yourself by using the internet to find out facts because this dribble is showing your ignorance -
Yeah, because everybody knows that the internet is 100% factual. I get all my info off the internet and trust it for all my decisions.
Not choosing sides, I think they are both idiots, I just don’t believe everything some 12 year old writes on the internet.
Because he’s not stupid.
There are some Democrats who, for whatever reason, can’t understand that there are a lot of people out here in Voter-Land that have a all-encompassing, gut-level hate of the Clintons and all they stand for. Nothing would get McCain elected quicker, than if Billary was on the ticket.
Hopefully, if Obama is elected, he will make her the Ambassador to Iraq.
“Just remember this, Lad, that this rabble you’re talking about.. they do most of the working and paying and living and dying in this community.”
When I was a lad, I sure as hell didn’t think this country would turn into a religious-stepford-state, but it has.
Blind faith has brought this country to it’s knees, financially.
Must we continue on, blindfolded?
Yes, you are right. This country is ruled by a religion, and we are all robots. The religion which rules us has us blindfolded. It is much better to live in secular countries, like the Third Reich, like the Soviet Union in the 30s, like the realm of Pol Pot.
Good grief.
Faith in God has brought this country to its knees?
Absurd. Sometimes you make sense. Sometimes you just spew venom.
Read the Declaration of Independance.
Most other 1st world countries currently, are much more secular than we are.
And somehow manage to thrive without invisible means of support…
Religions of declining empires:
British Empire: Mercantilism and Colonialism
Third Reich: Fascism and White Supremacy
Soviet Union: Communism and Militarism
America: Evangelism and “Trickle Down” Reaganomics
“Mr. David Stockman has said that supply-side economics was merely a cover for the trickle-down approach to economic policy—what an older and less elegant generation called the horse-and-sparrow theory: If you feed the horse enough oats, some will pass through to the road for the sparrows.”
John Kenneth Galbraith
“”It is much better to live in secular countries, like the Third Reich, like the Soviet Union in the 30s, like the realm of Pol Pot.”
Please explain how these countries were secular???
Here is the definition of secularism: Secularism is generally the assertion that governmental practices or institutions should exist separately from religion or religious belief. ie gov should neither ban nor support religion
Soviet union was athiest and persecuted religion.
Third Reich was gov controlled christianity (as you recall jews were burned)
The Reichskonkordat was ratified on September 10, 1933. In the Concordat, the German government achieved a complete proscription of all clerical interference in the political field (articles 16 and 32). It also ensured the bishops’ loyalty to the state by an oath and required all priests to be Germans and subject to German superiors. Restrictions were also placed on the Catholic organisations.
Shortly before signing the Reichskonkordat, Germany signed similar agreements with the major Protestant churches in Germany.
Pol Pot - persecuted religions other than the particular strain of Budism. They wanted conformity
That’s not secularism.
“Faith in God has brought this country to its knees?”
I believe they kneel before the collection basket is passed.
If you add up all the taxes I betcha the percentage of loot stolen from J6P in the U.S. is a higher percentage than in many less religious first world societies (France, the Netherlands, Spain, Germany, Italy, etc).
Federal:
Social Security, medicare, income, capital gains, social security, airline travel. gasoline tax
State:
Income, OASD (in some states), auto registration, sales, hunting
Local:
sales, property, utilities.
Did I miss any?
In many non-religious European societies the capital gains tax is smaller than in the U.S.
Mother Sarah comes to use speaking words of homespun wisdom.
She strikes me as just the usual evang rabble, a Palin-drone that speaks in tongues backwards and forwards, and longs to be with baby jebus, sooner than later.
It strikes me very odd how a gold hoarder who quotes Ayn Rand can support Barack Obama. Maybe Alad is one of those idiots who feels guilty because he is white so he has to vote for someone who is not as white.
I am proud to have 0% white guilt.
So NoSingleOne, is Palin the real deal?
There’s something about the fact that McCain didn’t go w/Lieberman because the party wouldn’t support him but the party did want to support someone who plans to slice and dice them that isn’t sitting well with me.
I’m seeing the potential for a replay of Bush, leader on a leash, in all this somewhere because in her one single speech she just didn’t strike me as intelligent as an Olympia Snow or Kay Bailey Hutchinson.
Sixty days isn’t long enough for those sort of things to shake out.
Palin has actually been a reasonably good governor, but her 80% approval rating only reflected the fact that because we’ve had two abysmally bad governors who preceded her, and she was the only Republican who ran that had some name recognition that wasn’t tainted by scandal (although that is changing).
Russia is never a consideration in our local politics, except when the Russkies compete with us for King Crab fishing. She has never expressed an interest in foreign affairs other than to “support our troops”.
The “Sarah Barracuda” moniker has nothing to do with her basketball skills, but more to do with the fact that she will exact swift and bloody retribution on almost anyone who crosses her. Criticism is rare because such a huge number of Alaskans are employed (or related to someone who is employed) by the government. We get more tax dollars from Washington per capita than any other state. We also get a ton of money in oil royalties and we aren’t taxed…but that situation existed long before she was elected to the governorship.
I would say the majority of Alaskans are immensely proud that she made the Big Time, but consider her to be a lightweight as an executive and an intellectual. She is gutsy and knows when to abandon her dogma in favor of practicality. Even her most rabid Republican supporters would have never claimed she had the skill set to run the country before her suprise nomination…but they’re quickly sweeping those doubts under the rug in favor of putting up a united front in the face of the much feared and ballyhooed “Obama-nation”.
Obama might have actually had a chance of winning Alaska, given the apathy about the McCain ticket, but now he’ll win our 3 electoral votes for sure.
NSO-
Thanks for the insight. That was great info.
Pontius Pilate was a Governor.
Jesus was a Community Organizer
I gave up on organized religion thirty years ago, it doesn’t make me a democrat. I would like to be a member of the human secularists, but I can’t stand the other members. HELP!…I’m all alone. NOT!
You are on the right path. In 1990 8% of Americans did not believe in any God. In 2000 that number went over double digit. Less than 1% of the U.S. prison population are atheists. Most crimes are caused by believers in some sort of imaginary friend. Yet polls show that atheists are far more distrusted than used car salesmen.
pretty good.
Horrible employment numbers. USD falls, gold up as market smells a rate cut.
Here I was thinking both gold and l-t T-bonds
were up on a panic-driven flight to quality move out of the U.S. stock market. It is funny how you only noticed the gold price movement, while ignoring the sudden shift into dollars (l-t T-bonds = future fixed-dollar payment streams).
Is anyone placing bets on whether the PPT can hold the line at DJIA = 11K?
I have been talking about the 10 year Treaasury all week. No gold extrapolation today, I take it? Your deflationary agenda is showing again.
I don’t have an agenda. I just enjoy providing my unadulterated view of the data at hand. Some times I take the impression you have me and Jas confused.
It becomes harder and harder to tell you and Jas apart.
Don’t look now, but the DJIA is back near its opening bell level, as is the gold price (with the latter still sinking back from its panic-driven open).
Upon reflection, if I have an agenda, then it is to question others’ questionable assumptions.
1:00 p.m. Dec. gold turns lower as U.S. dollar cuts losses
1:00 p.m. Dec. gold down $2.20 at $801/oz on Nymex
Did you ever consider that inferring from my posts on the commodities crash that I am a ‘deflationista’, you might be showing off your own Freudian slip?
“… gold up as market smells a rate cut.”
Cut the rates to zero if you want, it makes little difference if the banks won’t make the loans.
Mr. Risk is the new sherriff in town. Get used to it.
Sheriff Tarak knows things are a bit squirrelly and downright backwards, so he’s just laying in wait for the real deal to go down.
“Cut the rates to zero if you want, it makes little difference if the banks won’t make the loans.”
Ah yes, correct, combotechie-san.
But this has never stopped the Fed from doing it before
U.S. ECONOMY AND ANALYSIS
Fed is ‘powerless’ against this recession
Chief economist Irwin Kellner labels payroll data further evidence of U.S. contraction — and of the central bank’s toothlessness.
• Jobless rate jumps to 6.1%
MarketWatch chief economist Irwin Kellner says he’s “shocked” by unemployment jumping to 6.1% and payrolls shrinking by 84,000. Since everything flows from the job market, he says this trouble shows we are clearly in a recession. He also tells John Wordock the Federal Reserve is now “powerless” - unable to do anything about the weak economy or nagging inflation.
Is it safe to guess that when Marketwatch.com’s chief economist is openly discussing the fact that the economy is in full-blown recession, the NBER cannot be far behind?
I posted this yesterday, but wanted more input. My friend will be getting appropriate legal advice. Here is just getting some suggestions/ideas. She doesn’t want to do anything that isn’t moral. But looking at what the best ‘business decision’ is. Her valuations my not be 100% accurate. I just have to go with what she said since I don’t know the area, or have seen anything there. Here goes.
Hi HBB. I would like to ask for some wise opinions from the smart folks here for a friend I just made contact with again after many years.
This friend owns a townhouse near the White House in DC. She says it is a gated community in a safe area back there (I have never been to DC but know pockets are safe and others not safe). She says that her 1 and 2nd mortgage is around $620K. She says its current value is $620K. She knows there is a bubble, but says since area is good she expects to hold better than others. On a moral basis, she would like to either rent out or sell and not walk, but may have to consider that. Her mortgage is around $3400 and $450 in HOA. She expected potential rent to be $3700-$4200. She is having some financial difficulties and owes a lot of money outside of mortgage (6 figures +). She has been self employed and income not steady. If she is able to do her specialty, she can be worth a lot of money. She also doesn’t want to go BK, but that may be the last option and have to be done. She definitely is planning on moving and I did get her to see that the townhouse may become a big liability instead of an asset. So what is best option. Walking and tossing keys to bank? Rent out and stop paying mortgage, pocket rent until bank forecloses? File BK? Keep trying to pay mortgage and other bills (her preference, but not my recommendation)? Keep house and rent out and pay mort (not my recommendation)? Any other thoughts. What is the expected prognosis for the area walking distance to White House, and right in heart of the Capital? Thank you for any assistance
Stop paying the mortgage.
Look for real work.
Stop wasting time dreaming on a renter.
Sounds like she is going to go BK sooner or later. She just needs to decide if sooner is better than later. Maybe the ability to find a renter will delay the inevitable (a renter paying almost $4000/mo for 30 years?), but demand for condos is highly elastic, and she’ll have a tough time competing with people who have enough equity to charge a more reasonable rent.
It doesn’t sound salvageable to me.
Sounds like she has already “gone” bankrupt.
She should consider “declaring” the fact and get her financial life on the mend. If you must advise the lady, advise her to talk to a lawyer about it.
Hi Need to Leave:
I saw this yesterday but know nothing about the D.C. area so I did not feel qualified to answer based on the area. Taking that out of the equation however, she sounds like she’s in trouble.
Is her credit card debt more than a year’s salary? If so, there’s little chance she can dig herself out without going BK. She needs to look at the mortgages and other debts separately because how she handles them will be different. Can she handle the other debt if she sells the house and moves into a much cheaper rental? If so, she may not need BK. If she sells the house for $620k (although I think it’s probably worth less than she thinks) can she bring the commissions and other costs to the table? If not, she should seriously consider a short sale. But if it cashflows positively (really?) it might be worth renting at least until the first loan adjustment. There are so many questions/scenarios that are possible with her situation that I think she’s going to have to get some professional help to wade through her options and resources.
I will say however, I would prefer to be one of the first “good credit” people to have a short sale/foreclosure on my record than one of the last. Prices are going to be more reasonable in a few years and if she is willing to change her spending habits (granted a big if), rebuild her credit, and save money for a significant downpayment she will be one of the first of huge FC/short sellers to buy in a more realistic market after the SS, FC and/or BK come(s) off her credit report.
BTW We’re all worth a lot of money IF we can do our specialty. But is she being realistic about the ability to find work in a bad economy? I think she needs to get away from thinking her property is different and will hold value, she is different and even though she’s not making a lot of money yet she can, and that she can continue to live above her means so extremely. Also, you need to be careful about how much emotional (or other) involvement you put into this newly refound relationship. She may express a need to be “moral” but has seemingly lived far above her means and expected a lifestyle she has not earned. This doesn’t make her immoral, but it is possible her wants will always top her obligations so I am just saying be careful that you don’t end up sucked dry from her needs. That said, you’re a good friend for trying to help.
PS I apologize for not being able to answer a single question you asked.
Good luck with that rent. In DC you can get a utilities included 2 bedroom apt with parking in a good neighborhood close to mass transit for 2500-3000. If you go to the suburbs you can get a 3-4 bedroom townhouse for that much.
Tell her to put the house up for sale. If she is upside down ask the bank for a short sale. Assuming she is still close to break even I would think the banks would be happy to only lose a little now instead of a lot next year in foreclosure. Why ruin her credit?
“Rent out and stop paying mortgage, pocket rent until bank forecloses?”
“She doesn’t want to do anything that isn’t moral.”
Will she be informing the prospective renter that they may have to move again a few months after the rental commences? If not, that would be scumbaggish. Even if someone wanted to pay $4k rent, it is unlikely that anyone would be interested in a short-term, expensive arrangement with legal notices showing up frequently.
Umm…you need to provide better details on where the town house is. My office is less than 2 blocks from the White House. I can walk to the National Air and Space Museum in about 40 minutes. The Capital is further. Most people don’t consider that easy walking distance. There nearest area with nice town houses to the White House is Dupont Circle. Nearest to the Capital is Capital Hill. There are very old neighborhoods and I can’t imagine why either would have HOA’s. Pulling out close to $4000 a month for rent, even in Dupont is hard. Maybe not impossible, but what about repairs? Property management? unrented time? There are a ton of questions to ask.
Also, since this is DC and you have been a little quiet about what she does, does her job require a security clearance? They check your credit rating. She might have to talk to her security officer about what she should do that will allow her to keep clearance if she has it.
DC is in a total bubble. Like most places with jobs that are not part of the consumer economy and costruction, I think it will hold up a bit better than most, but this means, huge collapse, not complete collapse. She should count on that thing loosing value going forward and staying below its current value for years and years. $620K in either Dupont or Capitol Hill is not at the high end of the market where a really rich lobbist/lawyer is going to want to live.
Nah, tell her to wait until January. There will be a whole new buncha lobbyist that will be needing digs close to Capital Hill.
Neither convention addressed our crumbling infrastructure. Being a Civil Engineer today is like being a Red Wing shoe salesman in a world of slave-labor $29.95 boots.
1. There’s more money in weaponry.
2. There’s more votes in entitlements.
The money to repair/replace the infrastructure has been “pre-spent” by generations of Democrats and Republicans in Congress.
The PTB want you watching Sex in the City, instead of carping about the infrastructure,
or wondering why a private international banking cartel controls our government.
Red Wings are great boots.
“The PTB want you watching Sex in the City, instead of carping about the infrastructure”
Hmmmm. Maybe they should subsidize Time Warner then. I wonder how many people switched to the $7/mo package this last quarter.
“I wonder how many people switched to the $7/mo package this last quarter.”
from what i am seeing, lots of people cannot afford the electricity to turn on those T.V’s. and i have neighbors and family that have let the power co. just shut it off. it makes me wonder what is going to happen when PG&E cannot collect on these people. do the ones that still pay their bill get charged more? how far can this go?
money being spent on bombs and bullets and lining the pockets of politicians - the amount they are spending daily in Bush war could fund our infrastructure and give everyone health care
Let us turn our swords into solar panels…
“…the amount they are spending daily in Bush war could fund our infrastructure and give everyone health care.”
I’m okay with spending on the former. But on the latter, that is not part of our Constitution. Not the job of physically fit Peter to pay for the medical care of Obese Paul.
An industry group says a record 9.2 percent of American homeowners with a mortgage were either behind on their payments or in foreclosure at the end of June, as damage from the housing crisis continues to mount.
http://biz.yahoo.com/ap/080905/home_foreclosures.html
Holy $hitt! Take away the one-third or so of homes owned outright, and that’s 6% of all homes in the U.S. that are behind or in foreclosure.
Here is yet another of so many signs that the housing market is nearing a bottom (NOT)…
Homes in foreclosure process set another record
California, Florida continue to drive national numbers in MBA survey
By Amy Hoak, MarketWatch
Last update: 10:08 a.m. EDT Sept. 5, 2008
CHICAGO (MarketWatch) — The rate of mortgages entering foreclosure hit another record high in the second quarter, as did the percentage of loans somewhere in the foreclosure process, the Mortgage Bankers Association reported on Friday.
The delinquency rate, which measures mortgages that aren’t in foreclosure but have at least one overdue payment, also was the highest ever recorded in the MBA’s quarterly survey.
On a pessimistic note, I believe the situation will only worsen over the rest of the year from those second quarter numbers, as the economy is in full-blown recession, the Fed seems increasingly impotent and the red hot summer sales season is a historic bust.
Have a great day!
Not only is the new foreclosure rate at a record high, but it is accelerating, with the greatest concentration of activity shifting from subprime ARMs to prime ARMs.
TIMBER!!!!!
U.S. Mortgage Foreclosures, Delinquencies Reach Highs (Update2)
By Kathleen M. Howley
Sept. 5 (Bloomberg) — Foreclosures accelerated to the fastest pace in almost three decades during the second quarter as interest rates increased and home values fell, prompting more Americans to walk away from homes they couldn’t refinance or sell.
New foreclosures increased to 1.19 percent, rising above 1 percent for the first time in the survey’s 29 years, the Mortgage Bankers Association said in a report today. The total inventory of homes in foreclosure reached 2.75 percent, almost tripling since the five-year housing boom ended in 2005. The share of loans with one or more payments overdue rose to a seasonally adjusted 6.41 percent of all mortgages, an all-time high, from 6.35 percent in the first quarter.
Tumbling home prices are making it difficult for even the most creditworthy owners with adjustable-rate mortgages to sell or get a new loan as their financing costs rise, said Jay Brinkmann, MBA’s chief economist. Prime ARMs accounted for 23 percent of new foreclosures and subprime ARMs were 36 percent, he said.
“People chose the lowest payment option to get into some of the very expensive housing markets and now that prices are coming way down, they can’t sell and they can’t afford the higher payments,” Brinkmann said in an interview.
Here are some ugly details from the Marketwatch.com article. Does the 9% delinquent number apply nationally? It seems almost implausibly high.
California and Florida alone accounted for 39% of all of the foreclosures started nationally during the second quarter. Together, the two states made up 73% of the increase in foreclosures between the first and second quarters, according to the MBA.
“The worst states are getting worse,” Brinkmann said, noting that overbuilding occurred in California and Florida, and their numbers will continue to drive the national ones. Those states, he added, also are the two with the most mortgage loans outstanding.
Brinkmann said he hasn’t investigated why states like Massachusetts, for example, showed marked improvement. But what’s happening there might indicate how markets without massive overbuilding problems might recover in the months ahead, he said.
A look at the numbers
Altogether, more than 9% of mortgage loans are either delinquent or somewhere in the foreclosure process, Brinkmann said.”
Well FL always wanted to be the next California. Gosh darnit they’re doing it.
Is there enough money on the planet to bail out every stricken bank who needs one?
Global Economics | Asia Markets
China’s central bank may need bailout
The People’s Bank of China begins discussions on ways to bolster its capital, according to a report.
“The central bank is in need of capital because of its roughly $1 trillion purchase of U.S. Treasury bonds and Fannie Mae- and Freddie Mac-issued mortgage-backed debt.”
Here’s the Nosing leone recipe for American economic recovery:
Let Fannie and Freddie fail–>the Chinese & Arab infestors take a disproportionate hit, as well as American banks with worthless level 3 crap–>Fed trades US securities for toxic mortgages for pennies on the dollar and “restructures” them to guarantee positive return–>Yuan inflates against the dollar–>voilà, shrinking trade imbalance–>US economic recovery (in 3-4 years or so).
$hake-n-Bake
Yes! Or we could bail our Fannie and Freddie, sinking our own economy but providing China and the Arabs with enough money to own us.
Shot by a 6 shooter or buried alive 6 feet under?
decisions, decisions…
WASHINGTON (AP) — An industry group says a record 9.2 percent of American homeowners with a mortgage were either behind on their payments or in foreclosure at the end of June, as damage from the housing crisis continues to mount.
Wow-ser!
Is 10 + % next?
So much for pithy talk about a l’il bit ‘o’ recession.
Anyone else see their retirement portfolio take a nice shave the past year, even if it is reasonably well allocated? No problem, Social Security will be their for us when they move the qualifying withdrawal ages forward (again).
At least we have the political nominees jingoism’s, smoke and fog policy ideas, and reassurances that the ‘man-in-the-cloud’ will guide us to success.
I’m so empowered!
Anyone else see their retirement portfolio take a nice shave the past year, even if it is reasonably well allocated? No problem, Social Security will be their for us when they move the qualifying withdrawal ages forward (again).
I am an extremely conservative investor, but my portfolio is down about 10% year-over-year. A few years ago, I even took all the money I had in domestic broad-market funds and moved them to a hand-picked set of low PE, dividend-paying stocks, to eliminate exposure to banking and housing. (Banking was a significant percentage of broad-market funds, and it was obvious the bubble would pop.)
The S&P 500% is down 15% over the same period, so I guess I can think I did well! But the fact is, I “lost” more money that most of these people that my democratic congresswoman likes to tell sob stories about. And nobody feels sorry for me–even though my losses are a lot more real than for someone who put no-money-down, paid a teaser rate, and can simply walk away.
You know what a good stimulus package would be? Cut cap gains tax on equities, and eliminate taxes on bond and CD and savings account dividends! This would reward people who were doing the right thing: SAVING AND INVESTING.
I haven’t heard of any lawmaker anywhere proposing this. Democrats want to keep housing prices up with “affordability programs” and Republicans want to bail out the banks….Nobody wants to help the individual investor who actually has his own skin in the game.
“Nobody wants to help the individual investor who actually has his own skin in the game.”
this is what i keep screaming about. then it dawned on me that they need my skin to keep this ponzi-sceme going on. where is the money going to come from when the banks cut off the credit cards to these spend thrifts? they want you to be discourged with your returns so you give up and start spending. thats my take on the situation.
I agree Reuven, so I take it you’re not an Obama supporter? because he wants to do the opposite. Tax the responsible to support the unresponsible, some savior he is.
I don’t like either of them. I’ll probably vote for McCain, though I find the republicans to be too mean-spirited. If they make a big deal out of issues like same-sex marriage, I may have to vote Democratic.
I understand, the fanatics, in both parties, leave most of us torn come election day.
Irresponsible, didn’t proof read.
The problem is that doing away with capital gains tax benefits the elite, while the debt created by such a cut causes inflation for everyone else. I think we had just such a cut by GW.
How about a compromise
Let’s do away with capital gains taxes and taxes on dividends and bonds completely for the poor, decrease it for the middle class, keep it the same for the upper middle class, and increase it on the top 5%.
or
Increase amount that can be added to a Roth from your paycheck.
Both reward savings/investing and don’t increase the wealth disparity in the US. And let’s face it, the elite invest anyway, if you want to stimulate savings go to the people who haven’t been saving. Of course that may damage our consumer driven economy.
Consolidation of wealth is not good for a democracy. Where do you draw the line on wealth consolidation??
Well, the government says I make too much for a Roth, so it’s useless for me. And, in general, I’m against all these little $5000-here, $1000-there earmarked special accounts. What a load of crap.
BTW: Uncle Sam REDUCED the amount of savings bonds an individual could purchase from $60,000/year to $5,000 year. This was done in 2007. What kind of a message does that send?
And where do I draw he line on wealth consolidation? Unlike most fiscal conservatives, I think that the “death tax” is the fairest possible tax! I’d support a 90% estate tax in exchange for lower income taxes. (Like a fixed 20% rate for everyone.)
I’d support a 90% estate tax in exchange for lower income taxes. (Like a fixed 20% rate for everyone.)
———————–
No way. That estate money was already taxed when it was earned. I have no problem with eliminating the “stepping up” of an asset’s cost basis, but families should not have to pay tax twice on the same money.
If part of my after tax income goes into savings, the interest earned is then taxed, is that not the same as estate taxes?
If a family of four earns $40,000 or less they pay almost zero federal taxes. How much fairer do you want the tax system to be?
“Anyone else see their retirement portfolio take a nice shave the past year…?”
Saw the same in 2002-2002. The losers jumped into real estate and the moment they saw that they had to bid on POS houses with several other buyers they should have quickly jumped out and into Savings bonds.
September 5, 2008, 10:53 am
Economists React: Jobs Report ‘Screams Recession’
Economists and others weigh in on the jump in the unemployment rate to 6.1% and the 84,000 job losses reported in August.
If last week’s economic news was a big shot in the arm for John McCain, I am wondering what would be an appropriate moniker for today’s economic news? Perhaps a kick in the behind?
Hattip to Mr. Bradley Schiller for the timing of his Op-Ed spin cycle piece.
OPINION
Last Week’s Economic News Was a Big Shot in the Arm For McCain
By BRADLEY R. SCHILLER
September 5, 2008; Page A15
John McCain may have won the presidential election on Thursday, Aug. 28. That was before Barack Obama gave his stirring acceptance speech at the Democratic Convention. It was four days before the Republican Convention even started. It was also before the media leaked the name of Sarah Palin as Mr. McCain’s chosen vice-presidential running mate.
Why Aug. 28? On that morning the U.S. Commerce Department’s Bureau of Economic Analysis revised its assessment of GDP growth in the second quarter of this year. Rather than growing at the anemic pace of 1.9% as reported in July, the April-June quarter actually registered a healthy GDP growth rate of 3.3%. Growth at this rate exceeds the long-term U.S. growth rate of 3.1% over the past 50 years.
Bill Clinton was right. When it comes to presidential elections, “It’s the economy stupid.”
From what I can tell, if we only give John McCain and Sarah Palin the chance, they’ll turn
MesopotamiaIraq into a Coke-drinking, McDonalds-eating, Halliburton-loving theme park in time for baby Jebus’ second coming, and overturn Roe v. Wade too.That’s more important than understanding and fixing the boring old economy. This recession is just all in our heads…Dr. Phil (Gramm) told us so! The chosen people (who I’m told are the only ones who work and actually produce stuff) need even bigger tax breaks, so that they can create more minimum wage jobs that they can send to China, India or Mexico so we can continue to buy cheap flat screen TVs.
Stop worrying, everything’s fine.
Looks like Bradley may have jumped the gun. Forgot to look ahead and notice the unemployment rate. I don’t think this will help McCain become Pres.
I missed some of the HBB conversation on the 3.3% GDP revision. Is that the most BS number or what? How could GDP possibly be so high with unemployment soaring the way it is? “Increased exports to Europe” - BS. The numbers were just wrong, or at best misleading due to inordinate affects of the oil price bubble or the like.
My late .02 anyhow.
Just some general knowledge of the retail business. Looks pretty bad!
Ann Taylor is closing 117 stores nationwide.
Eddie Bauer to close more stores.The company has already closed 27 shops in the first quarter and plans to closeup to two more outlet stores by the end of the year.
Cache is closing 20 to 23 stores this year.
Lane Bryant, Fashion Bug, and Catherines are closing 150 stores nationwide.
Talbots, and J. Jill are closing all 78 of its kids and men’s stores. Now the company says it will close another 22 underperforming stores. The 22 stores will be a mix of Talbots women’s and J.Jill.
Gap Inc. will be closing 85 stores.
Foot Locker to close 140 stores.
Wickes Furniture is going out of business and closing all of its stores.
Levitz, the furniture retailer, is going out of business and closing all 76 of its stores in December.
Zales, Piercing Pagoda plans to close 82 stores by July 31. It has also announced that it is closing another 23 underperforming stores.
The Walt Disney Company subsidiary Children’s Place filed for bankruptcy protection in late March. Walt Disney, in a news release, said it has also obtained the right to close about 98 Disney Stores in the U.S.
Home Depot has 15 store closings.
CompUSA clarifies details on its store closings. Any extended warranties purchased for products through CompUSA will be honored by a third-party provider, Assurant Solutions.
Macy’s is closing 9 stores.
Movie Gallery is closing 160 storesas part of reorganization plan to exit.They plan to close 400 of 3,500Movie Gallery and Hollywood Video stores in addition to the 520 locations thevideo rental chain closed last fall.
Pacific Sunwear is closing 153 Demostores.
Pep Boys is closing 33 stores.
Sprint Nextel is closing 125 retail locations.
J. C. Penney, Lowe’s, and OfficeDepot are scaling back.
Ethan Allen Interiors announced plans to close 12 of 300+ stores in an effort to cutcosts.
Wilsons the LeatherExperts is closing 158 stores.
Sharper Image: The company recentlyfiled for bankruptcy protection and announced that 90 of its 184 stores are closing.
Bombay Company: The company unveiled plans to close all 384 U.S.-based Bombay Company stores.
KB Toys posted a list of 356 stores that it is closing around the United States as part of its bankruptcy reorganization.
Dillard’s plans to close morestores.
Steve and Barry’s Clothing, which has 240 stores filed for bankruptcy.
Starbucks is in the process of closing 600 stores.
Open Bombay doors, and start bombing run…
Bombay Company: The company unveiled plans to close all 384 U.S.-based Bombay Company stores.
Ummm, (gulp) wow!
i was at target last night on a buying binge to restock my house with needed supplies. i strolled up to the checkout with a full basket and was starred at by other shoppers (not that there were that many) in the lines buying only a handful of stuff. the same thing happened at the grocery store a couple of weeks ago. all the shelves were packed and nothing is selling, nobody has the money to spend. scary stuff.
Hubby and I went to a movie - something we have NOT done in many years.
I’m talking Marcus Magic, super plush.
I counted the people in the theater with us -15. (Should have used my noggin and counted the cars - good guess - thirtyish).
Same with Wallymart the other day. We filled up the pantry to the brim.
I couldn’t help feeling a bit eerie loading our trunk, quickly.
Oh, and this is funny. I’m on strict orders to quit being so darn cheerful!
LOL,
Leigh
At least the sparsely leased indoor malls are still open and free to us retired fast walk baby boomers seeking exercise and respite from the summer sun and the winter cold.
When they close the malls the writing is on the wall.
(Cynical Hat in place….)
Levitz was “going out of business” 20 years ago. Pretty much like every other furniture store I’ve ever seen.
Went to the mall yesterday after work with the wife (we carpool together). I had to have my glasses repaired.
It seemed desolate. Maybe that’s just b/c it was thursday. My wife was basically accosted by two salespersons trying to sell womens “beauty” stuff. They seemed really, really desperate to me. She don’t take that crap. The first one was kinda sneaky and that didn’t set with my wife. The second guy that tried was kinda funny. You know how those people will kinda wait until they make eye contact or some normal interaction (like a smile or a nod or something) before they will approach?
So we were walking by this guy, and I could tell my wife already had her hackles up way before we got there. She wasn’t making eye contact at all. The guy was kinda smiling and doing this “should I approach? No. Ok I think I can. No, maybe not” dance that was obvious. He smiled and mumbled a greeting. The whole time I was processing this and so decided I would give him the green light just to see what happens. I like experimenting with social interaction and this seemed like a perfect opportunity. So I smile and say “hi, how you doing?”. So naturally he sees this as an opening and starts to do a spiel. Wife shuts him down instantly and kept moving. I was laughing on the inside. I just smiled at him and kept moving. We had a good laugh about that later.
i went by mervyns to look for a good pair of sandles last night and it looked like a ghost town, i kept waiting for a tumbleweed to blow by. then i saw a little kid walking toward me with a dollar in his hand and asked me if i wanted to buy a candybar, his mother was right behind him with the box. it stumped me, i dident think they allowed people to do that in their stores.
In more cheerful news, the (quite large) Keller Williams realty office on the ground floor of my office building appears to be closing.
Are there any elitists* amongst us that subscribe to the New Yorker?
Here’s a teaser-view of a great article about shoplifting, and the powers that be’s defenses against it…
http://www.newyorker.com/reporting/2008/09/01/080901fa_fact_colapinto
* Elite in the ability to come up $49 a year, or in the ability to read and learn?
That was a great article. I do some retail ‘experiential design’ work, so this was extremely relevant.
And a tangential point—all the stolen material that ends up on eBay is probably contributing to the collapse of their business. I don’t like buying stuff that is likely to be stolen, and I’m sure many other people feel the same way.
The eBay angle was huge.
Like the article says, if you lifted something 25 years ago, you had to go find a fence, usually in the seedy part of town to sell it to, probably for 10 cents on the $.
Now people are utilizing the 5-finger-discount, to undercut the retailer’s price on anything that can be lifted, selling it on eBay, for 60% of list price.
I think craigs list is becoming the fence of choice now.
“The eBay angle was huge.”
Employee theft; the goods are sold at your local flea market!
The New Yorker has provided an oasis of publishing for our country’s best writers, poets and cartoonist’s over many generations. There are few publications with the history to match it. Readers might want to search the New Yorker archive of one of their regularly published authors - E.B.White, undoubtedly one of America’s literary treasures.
Are there any elitists* amongst us that subscribe to the New Yorker?
The only periodical I subscribe to, in fact. At one point, my household had two subscriptions just so there’d be no bickering. We transferred one to my lil’ sister.
It’s a well-written article. The most interesting takeaway for me is that large-scale, organized shoplifting is a constant concern for retail operations, and that the criminal syndicates sometimes sell the merch back to retailers through different channels. The article mentions one criminal outfit that was purloining up to $100,000 a day in merchandise before they were shut down.
–
David Rosenberg: “Inflation expectations are collapsing — Inflation expectations are collapsing – as seen by the plunge in the 10-year TIPS breakevens to 200 bps – lowest since 2003 when the Fed cut the funds rate to 1%. The weakness in gold to 8-month lows, the slump in the CRB to 7-month lows, the slide in oil to 5-month lows, the plunge in the Baltic Dry Index to a 7-month low and, of course, the surge in the dollar to an 11-month high are all supportive of the view that inflation is rolling off its peak and heading sharply lower in coming months. Five-year bonds are now discounting a return to a sub-1.7% inflation world – good news for fair-value multiples, but indicative of limited top-line revenue growth.”
But as we have learned, America’s inflationists are lot smarter than the markets, especially, the US Treasury bond market.
I am hurting all over from gains in collection of UST STRIPS (up 8 in two months, 25% in 20 months, and 170% in 11 years) despite more than 100 warnings I had received, privately, from all-knowing inflationists. 17 years of unmatched record in forecasting USTs doesn’t count much in America; what counts is propaganda of “Printing Money,” “shadow stats” and helicopter drops. Amazing country and even more amazing people, when it comes to economics and politics. Keep in mind:
Jas
Jas McCarthy:
“I have the names of 57 Inflationistas…”
“17 years of unmatched record in forecasting USTs doesn’t count much in America;…”
Trend was your friend from 1980-2008 or so. Your strategy would have fared quite poorly from 1960-1980.
–
Prof.,
You are assuming that I am a trend follower. My bullishness has to with end of this cycle in deflation before the next inflation cycle. My target is 2% on 10Y. My target on Swiss franc was $1.
Jas
Sorry to put words in your mouth. I see we are of the same basic opinion — it’s not a matter of whether the Fed reflates, but when, and whether they can pull it off one more time without causing the U.S. ecomedy to completely spin off the track…
Fed will reflate when they do the 2001 to 2002 thing - fear deflation. No way anyone knows the right day that will start, so may as well keep fishing in both pools (deflation investments - savings bonds, inflation investments - precious metals). You can buy up to $20,000 in savings bonds per year (if you buy both EEs and Is).
the PPT is hard at work today, i wonder if they can hold the markets up all day?
I noticed the same thing at 1:00 eastern. It’s amazing that a rotten unemployment number can lift stocks. And: Delinquencies, foreclosures rise to more than 9 percent of US home loans in second quarter seems to be boosting positive sentiment.
http://biz.yahoo.com/ap/080905/home_foreclosures.html
I am off to literally batten down the hatches against a real (not financial) hurricane which arrives later tonight. It should be a long, wet weekend.
everyone that gave some feedback to my question, thank you so much. I appreciate the assistance. This is such a great blog and I love the community feeling we all share.
Hey HBBers, haven’t posted in a long time, have been on the road, camping in the mountains here in Colorado. Just want to give you an update on what an average ex-homeowner is thinking. I’ve been renting after selling at the height of the market, all my stuff in storage. I’ve become something of a gypsy, yet worrying and wondering when/where my next house would be, how I could afford to buy again without going back into the cogs of the machine, becoming a wage slave in the Cubicle Nation, in the meantime watching my equity slowly fizzling away. Burned out on archaeology, most of the work anymore is for the oil/gas companies.
One morning I woke up to an ephiphany. Who the H-E-doublehockeysticks cares about a house? I’ve been OK at finding places to rent with my entourage of dogs and cats, so why do I need one place forever? NYCityBoy, I have now joined your bandwidth, wavelength, we are on the same train track.
So here’s the deal with the Bobdaddyo - I’m clearing out my storage units and keeping only a few things I really really want and can’t replace (family photos, etc.) and consolidating it into one very small unit. I travel lightweight, I can move in an hour with the camping equipment I use (still have my squatter’s cot), so going from one place to another is easy, plus I have a camper and pickup. My critters are getting used to being gypsies and even seem to like it.
To heck with the bankers and Wall Street and Bush’s American Dream. Here’s the REAL American Dream: I’m spending some of my money on film equipment, I’ve always been a semi-pro photographer and now I just bought some nice HD film cameras and pro microphones etc.
I’m going to become an indie filmmaker (nature and natural history stuff) and starve in style, but I sure as heck won’t be tied to the machine run by Greenspan and his buds. I’m already working on my first film, it’s a 30 minute poetic documentary set to Dvorak’s New World Symphony called Canyon Odyssey, and I’m going to spend the winter in Moab filming it. Flashfloods, wildlife, big clouds, the whole shebang. Look for my film in the regional stores in about 6 months, also on Amazon.
Yes, I was once a squatter, some of you remember that saga, so there’s hope for us all.
WAHOOO!!! Oly, you’ll have to come down and let me film your magenta rhinestone boots someday. Bantering Bear, I lost your email. Hoz, Heus, modo itera omnia quae mihi nunc nuper narravisti, sed nunc Anglice? Hwy, still waiting for that beer.
It’s a new paradigm.
“Who the H-E-doublehockeysticks cares about a house?”
Aha! A sign that the bottom must be near: A regular HBB poster is throwing in the towel on the thought of someday buying a home of their own.
Prof. don’t tempt me…I have given up…I cannot be dissuaded…
On another note, the post above about all the retail woes, well, most everything to do with traditional movies is crashing for a number of reasons - people are sick of the crap being fed them by Hollywood and the internet has made getting movies at home much easier, where you can sit in comfort and not pay a fortune for popcorn. The theaters are next to crash, box office numbers are way down. And indie movies are now being made that actually explore the human condition and have meaning w/o all the crap violence and gratuitous whatever. I personally don’t even watch movies. (Except Ground Hog Day, which I watch over and over and over…OK, bad joke).
I have felt that way about the movies for some time now. I feel that if they are going to charge these rates and also how the actors pump crap that they know sucks, they should be willing to back that up with a refund.
Especially when they pump what was obiviously crap when you see it.
Agree on Hollywood. My wife and I have had a really hard time finding decent movies to watch these days. There seem to be only 4 genre of movies these days:
- Romantic chick flicks that make you want to puke
- Action movies that require complete suspension of disbelief
- Potty humor / “coming of age” movies that are enjoyable if your IQ is below 70
- Kids movies
Gone are the days of really good dramas, which is what we enjoy most. In general - almost everything is targeted towards the adolescent or teenage set; that’s where the money is I suppose. Still it’s sad.
Good luck with indie filmmaking!
<>
You mean Angelina Jolie can’t really fight of a platoon of soldiers armed to the teeth while nursing two babies at the same time?
Thanks, though I just got an email from Robert Redford, I guess he reads this blog…
I refuse to spend to suspend disbelief.
packman,
Check out the movies from the 30s and 40s. Some great ones were made in the comedy and drama. They don’t make them like that any more.
Forgot to add some great sci fi movies also made in the 50s.
“Check out the movies from the 30s and 40s. Some great ones were made in the comedy and drama. They don’t make them like that any more.”
Yep. We’ve watched about 10 times more movies from TCM and AMC lately than recent-releases.
well, you know what Jim Harrison says about writing–”write like your hair is on fire”–so I say film like your hair is on fire and you’ll end up producing something that we’ll all really want to see.
And don’t forget Dvorak’s “Song to the Moon” for soundtracks.
Hunter Thompson once said that a writer should write like they’re building a stairway to Heaven.
He went the quick way, by rocket (in case you didn’t know, he had his ashes sent off by a small rocket).
Losty…
I love Dvorak, and what perfect accompaniment to Mother Nature’s raw fury in this brave New World~
In my life so far, it seems the happiest are those that are the freest of thought & boundary.
Best wishes in uncovering discovering…
We ate desert of Himalayan Blackberries harvested from a patch right next to a 1,500 year old Giant Sequoia, over Labor Day weekend.
You’d never find this spot unless you venture off-trail, away from self-imposed limits (trail).
Lad, tell me where exactly (GPS it) so I can film it for the world to see…
I have the first 5 minutes already filmed, so far it’s all credits, it’s cool, I esp. like the part where it mentions me as director/producer/writer/editor/special effects/location scout/grip/costumes/extras director/lighting/sound/Dir of Photog)/entire cast and talent. That part ROCKS, might have to stretch the credits more than the 5 minutes, though, maybe the entire film. Has anyone ever done a film with just credits? I mean, this is indie stuff, experimental.
Picture Dvorak’s coming Home (Largo) to shots of rock art, cliffs, whitewater…ahhh, gotta go….nature’s calling (no, not like THAT)…
A secret is a story you tell one person at a time, so I can’t divulge it’s location to all…
I love a clue, and here’s one~
It’s a very special spot 1,500 feet lower than where Giant Sequoia trees usually grow, and 1,500 feet higher than where Himalayan Blackberries usually grow.
Lad, in my years as an anarchyologist I know many places that I would maybe show people but only if they could discover it for themselves- as in, only in hints such as you just gave.
Along those notes, the Sierras would be in a film with Mendelssohn’s Scottish Symphony. Maybe that’s next…those huge red cedars sure caught my imagination last time I was out your way.
Being in a sea of aged Giant Sequoias is like hanging around a picket-fence of brobdingnagian Columns of Red, some older than Ancient Rome, some younger than Ancient Greece, still very much living, with their elephantine root systems splaying out above and below ground…
I’m going to be sleeping in one of these trees tonight, in fact.
Tonight’s tree has a hollowed out bottom from fire damage of centuries ago.
Actually, the only credit in the film will be:
For Ben Jones
the man who showed me I was on the wrong horse
(in fancy Academy script like Columbia Pictures uses)
In my life so far, it seems the happiest are those that are the freest of thought & boundary.
-Aladinsane
That one goes on my frige, next to:
“The best way to do something is to just do it.”
-Some Oldtimer out in Utah
Glad to see the oldtimer posting gal. Hope the outdoors is treating you well.
Hey, hello and yes, right now I’m in the cottonwoods next to the beautiful Uncompahgre River, near Ouray. The colors are turning. Gorgeous.
i was look at the economic calender for next week and it shows that the pending home sales will be reported on tuesday. it shows the market is expecting a figure of -1.0%. how is a negitive figure possible? is that in comparison to last years sales?
http://biz.yahoo.com/c/ec/200837.html
Speaking of free spirits, some of you might enjoy this guy, he’s French, travels around on his motorcycle with his dog and posts photos and musings, quite the guy:
http://theoasisofmysoul dot com
This is the best news of the day,
“U.S. Highway Fund Needs $8 Billion Bailout This Month”
“A U.S. trust fund that finances highway construction needs $8 billion from Congress by the end of next week to cover a shortfall as a drop in driving shrinks fuel-tax receipts, ”
It should leave no choice but to raise the gas tax. The new tax will offset the lower price of oil and maybe the non gas cars will actually make it this time.
I can hope and dream can’t I.
damn straight you can dream, and you may as well dream big. the coming revolution regarding the diversification away from an “oil” only transportation fuel model is well underway. Dont just dream it, make it so.
and yes, I do put my money where my mouth is. Progress is at stake.
Vozzie, I know it is going to happen but I don’t know when. The problems I see are in lack of corporate liquidity. No moneys.
I took half off of the CLNE today. My concern is that when something goes parabolic, it forces me to sell…only long the profits. I did stick my toe into WPRT with the liberated CLNE capital position, but only becasue I simply refuse to sit in treasury funds.
I also took off the DSL (long 2.05) spec play at the close. thanks hoz, you’re my kind of peoples.
here’s my techno deflationary theory.
when the staggering lack of the velocity of money exists in a deflationary environment, the churn/hard turn/violent movements…..the forced movements are the ones to avoid. However, if taken seriously, the nimble unforced, calculated and without fear movements of moneys will overcome the noise of big black box money that is simply doing the wrong thing because it HAS to.
Not bad 50% in a week! Keep it up and you can run the treasury department. (Frankly I would not wish to be in that position, but it is an OK position.)
hoz, you called the DSL on my “von trap door singers” afternoon posting extravaganza…..laddy called it the “puns of August.”
Here’s an idea
A drop in driving decreases tax receipts.
Increase the tax on gas so that the remaining drivers pay for the maintenance and upkeep of the roads.
Why the F are our income taxes being used to subsidize driving and thus subsidize Russia, Iran, Saudi Arabia, Venezuela
It’s crazy
Exactly, and maybe just maybe it will finally piss off enough people that the change will not be stopped this time. There is enough technology that soccer moms and commuting should not be using oil.
But on the flipside, look for new taxes when enough people drive hybrids and all electric for the daily driving. I anticipate electric bills going higher and higher. Solar may not be perfect, but I will pay that upfront bill to kill the oil and electric monoply.
September 5, 2008, 11:18 am
Obama, McCain, Fannie and Freddie: A Troubled Love Story
Posted by Heidi N. Moore
Though Fannie and Freddie have been big lobbyists of Washington, they are hardly getting their money’s worth this year. Just before Labor Day, Sen. Obama derided Fannie and Freddie as a “weird blend,” advocating that “If these are public entities, then they’ve got to get out of the profit-making business, and if they’re private entities, then we don’t bail them out.” He said later that he has “no sympathy” for the CEOs of Fannie and Freddie, and that the government shouldn’t bail out “investors who had made a killing.”
McCain, similarly, railed in an editorial that “if elected, I’ll continue my crusade for the right reform of the institutions: making them go away. I will get real regulation that limits their ability to borrow, shrinks their size until they are no longer a threat to our economy, and privatizes and eliminates their links to the government.” McCain attributed the growth of the agencies to “crony capitalism,” and Washington selling out to Wall Street.
…
The fact that both Obama and McCain believe that Fannie and Freddie aren’t properly structured is a good sign. It indicates that change is afoot and that the market may not have to hold its breath in the future while worrying about the fate of the two government-supported agencies, which are exposed to about $5 trillion in debt.
One or both of these men are imposters, just mouthing what you want to hear.
Whack-a-mole! But get the right one, or “No food for you!”
The only thing wrong with this report is the headline, as the every-resilient U.S. headline stock market indexes are once again ignoring unexpectedly bad news.
Wall Street stocks fall after grim jobs data
By Alistair Gray and Jeremy Lemer in New York
Published: September 5 2008 13:54 | Last updated: September 5 2008 19:42
Wall Street stocks fell slightly on Friday, but heavily over the week, after a late rally in financials helped soften news that the unemployment rate reached a five-year high in August.
On Friday, the spike in the jobless rate, which has reached 6.1 per cent, conspired with a rise in the home foreclosures to drag markets further into bear market territory.
John Ryding at RDQ Economics said: “This is a very weak jobs report that screams recession.”
Why does the FDIC always do the coup de capital on Fridays?
Tonton Ma’count’eh
Traders fled today for fear of what the Federal Reserve and Treasury would do Sunday. Welcome to the third world economy. No unhedged positions over the weekend.
Hamzei Analytics, short, and keeps reiterating…even Carl Futia rolled over and called S&P 1175 on Thursday. Timers, Technicians, and bulls…….all short. I keep saying I have a hard time mainting the Alpha, and my bigboy dollar hedge is hitting the shathouse.
If they bail the GSE bonds, throw the shareholders under the bus, and the market reacts violently….snap rate cut….scenario 1.
If they create the bad GSE entity to “Facilitate the movements of the structured housing and Commercial real estate bonds” then the remaining entities are golden, bad entity quietly goes to dark pools of liquidity…..mmmmm, liquidity…and the market reacts favorably, no rate cut….scenario 2.
If no action, market sells off…no rate cut. commodities down, equities down……down the rabbit hole to force the rate cut.Scenario 3.
Third World Economic Doldrums (cribbed from My Fair Lady)
Just you wait ’til Sunday, Just you wait
You’ll be sorry, but your tears’ll be to late!
You’ll be broke, and I’ll have money;
Will I help you? Don’t be funny!
Just you wait, ’til Sunday , just you wait!
Just you wait, ’til Sunday, till you’re sick,
And you scream to fetch a doctor double-quick.
I’ll be off a second later And go straight to the the-ater!
Oh ho ho, ’til Sunday, just you wait!
Ooooooh ’til Sunday!
Huh you should be long Yen and Reals, they take small hits occasionally but purchasing power parity is their favor. Yen did real good this year and so did Real, no reason to get caught in the flight to perceived safety.
“As for the little green men…
they don’t want us to know about them, so they refrain from making contact…
then they do silly aerobatics displays within radar range of military bases…
with their exterior lights on…
if that’s extraterrestrial intelligence, I’m not sure I want to know what extraterrestrial stupidity looks like.”
Russell Wallace
Haibao, on the street where I live.
Filed under:Expo 2010 — posted by Adam on September 5, 2008 @ 9:54 am
While I was out of China two very important events happened in my neighborhood. First, everyone’s favorite pirate DVD shop re-opened. And second, the Beijing 2008 banners were pulled off lampposts and replaced with World Expo 2010 banners.
I leave commentary on Haibao, the mascot, to those who did it much earlier, and much better, than me.
Note to the Expo 2010 organizers: it’s not too late to change your mind (about Haibao).
[Addendum: Micah reminds us that the red banner encourages Shanghai to learn from the Beijing Olympics.]
Note to readers: this is the inaugural post in the new Expo 2010 category. And a couple of more banner photos after the jump.
http://shanghaiscrap.com/?p=1428
China will not collapse until after the 2010 EXPO. China is going to spend as much in Shanghai as they did in Beijing. They are inking new iron ore contracts, ordering concrete and copper.
And it was good to see that the DVD shops have reopened
from the comments
#7 Your DVD shops have re-opened? It’s like a DVD desert down here in Shenzhen. I might actually have to check AXN to see what time House is on instead of just popping in another disk that I have yet to buy.
Comment by ambrose — September 5, 2008 @ 10:28 pm
I have stated that whenever I do research that involves CPI or any figures from the BLS I use government figures. I am aware of Mr. Williams most admirable sight and feel it has some merits, but it is not reproducible. I never use his figures.
This paper from the BLS makes me grateful I never used his figures.
Addressing misconceptions
about the Consumer Price Index
A number of longstanding myths regarding
the Consumer Price Index and its methods of construction continue to circulate; this article attempts to address
some of the misconceptions, with an eye toward increasing
public understanding of this key economic indicator
John S. Greenlees
and
Robert B. McClelland
“…Within the past several years, commentary on the CPI has extended well beyond the circle of economists, statisticians, and public officials. The strongest criticism of BLS methodology has not been concentrated in a single profession, academic discipline, or political group, but comes instead from an array of investment advisers, bloggers, magazine writers, and others in the popular press. Also, whereas in the past the CPI frequently was held to be overstating inflation, recent criticism has focused on supposed downward biases….”
http://www.bls.gov/opub/mlr/2008/08/art1full.pdf
This is an excellent point by point explanation of the BLS CPI and underlying methodology. I have critiques of the BLS methodology as I do of S&Ps P/E calculation methodology or GDP calculation methodology that excludes import inflation eg WalMart greater dollar sales fewer items sold. This paper seems to be expressly written to refute Mr. Williams claims.
I dare anyone to call back my last post regarding a bank failure, I think it was watcher or bill in Maryland asking about which bank was next to go under….it was the night of the Chilicothe takeover….I am not making this up….
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Silver State:Silver State Bank, Henderson, Nevada, was closed today by the Nevada Financial Institutions Division, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. To protect the depositors, the FDIC entered into a Purchase and Assumption Agreement with Nevada State Bank, Las Vegas, Nevada, to assume the Insured Deposits of Silver State Bank.
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If you are paying attention, you are getting paid….
Do F&F qualify as banks?
Since you did not mention it.
This is a very large loss for the FDIC ($500 Million) on a $2B bank roughly 22%.
and
Sen. McCain’s son was on the BOD of Silver State Bank one of three people on the Audit committee. He resigned in late July.
the McCain Mutiny…
So a little over a month ago, the son a presidential candidate, who just happens to be on the audit committee, resigns.
Ew! what’s that smell?
http://en.wikipedia.org/wiki/Keating_Five
Probably was Watcher, not me.