Bits Bucket For September 12, 2008
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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Where Was Sen. Dodd?
Playing the Blame Game On Fannie and Freddie
By Al Hubbard and Noam Neusner
Friday, September 12, 2008; Page A15
Taxpayers face a tab of as much as $200 billion for a government takeover of Fannie Mae and Freddie Mac, the formerly semi-autonomous mortgage finance clearinghouses. And Sen. Christopher Dodd, the Democratic chairman of the Senate Banking Committee, has the gall to ask in a Bloomberg Television interview: “I have a lot of questions about where was the administration over the last eight years.”
We will save the senator some trouble. Here is what we saw firsthand at the White House from late 2002 through 2007: Starting in 2002, White House and Treasury Department economic policy staffers, with support from then-Chief of Staff Andy Card, began to press for meaningful reforms of Fannie, Freddie and other government-sponsored enterprises (GSEs).
The crux of their concern was this: Investors believed that the GSEs were government-backed, so shouldn’t the GSEs also be subject to meaningful government supervision?
…
As recently as last summer, when housing prices had clearly peaked and the mortgage market had started to seize up, Dodd called on Bush to “immediately reconsider his ill-advised” reform proposals. Frank, now chairman of the House Financial Services Committee, said that the president’s suggestion for a strong, independent regulator of Fannie and Freddie was “inane.”
Sen. Dodd wonders what the Bush administration did to address the risks of Fannie and Freddie. Now, he knows. The real question is: Where was he?
Dodd&Frank were the same place all of the other ass-wipes in D.C. were. Off looking out for themselves to hell with the taxpayers. Although it is possible that Frank was at home with his boy-toy helping him turn tricks.
Dodd called on Bush to “immediately reconsider his ill-advised” reform proposals. Frank, now chairman of the House Financial Services Committee, said that the president’s suggestion for a strong, independent regulator of Fannie and Freddie was “inane.”
Sen. Dodd wonders what the Bush administration did to address the risks of Fannie and Freddie. Now, he knows. The real question is: Where was he?
This will continue until election day. And then . . . .Oh Boy!
“”Has it not become blatantly obvious that it is the US gummint that is behind this price drop? The US manipulated the dollar rise as well as the crash of gold and silver. They have done the same for oil. The dollar has risen dramatically against the horrible fundamentals of this currency, just as gold and silver have fallen 45% against rampant inflation. Now we have oil plummeting against improving fundamentals. It’s time to wake up and see financial fascism for what it is. There are no more free markets, only manipulated markets. But not to worry, this whole hollowed out economy will soon come crashing down. As Rick Santelli put this AM, “This economy is a room full of mousetraps into which a couple golf balls have been tossed. Do you really think the Fed can catch them all?”"”
Best Wishes!
To hear Donald Coxe tell it, the commodity selloff ripping through Canada’s stock market is no accident. It is the result of a deliberate, brilliantly executed plan hatched at the highest levels of the U.S. Federal Reserve and Treasury.
Mr. Coxe is no paranoid conspiracy theorist. As the chairman and chief strategist of Harris Investment Management in Chicago, he is one of the most respected investment authorities in North America. He also happens to have lost about 10 per cent of his personal wealth in the commodity rout, which came at the worst possible time for his Coxe Commodity Strategy Fund that started trading in June.
http://www.reportonbusiness.com/servlet/story/RTGAM.20080909.wheinzl0910/BNStory/SpecialEvents2/home
“The US manipulated the dollar rise as well as the crash of gold and silver. They have done the same for oil. The dollar has risen dramatically against the horrible fundamentals of this currency, just as gold and silver have fallen 45% against rampant inflation. Now we have oil plummeting against improving fundamentals. It’s time to wake up and see financial fascism for what it is. There are no more free markets, only manipulated markets.”
Those responsible worship together. The strategy is called, Empire.
I know where he was when he started screaming about lifting the cap on the loans freddie and fannie could purchase! He is just as much to blame as any of those clowns!
Breaking News:
The other shoe* just dropped…
Bruno Magli size-12
Ouch. That`s gonna leave a mark.
If Chris Dodd doesn’t fit, we must have him quit.
(with apologies to Johnnie Cochran)
I’d sure like to see a link to anything that might remotely back up this assertion.
More to the point, what was Sen. Gramm up to?
http://www.sfgate.com/columnists/scheer/archive/
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/09/10/ED7R12R6CA.DTL
“As with any Ponzi scheme, the perps, who include the legislators as well as the bankers who exploited the loopholes they provided, expected to bail long before the bubble burst. The role of the legislators, Republican-led but with far too many Democratic running dogs, was critical to the success of the scam.
The mortgage swaps distancing the originator of the loan from the ultimate collector were only made legal as a result of the Commodity Futures Modernization Act that former Texas Republican Sen. Phil Gramm pushed through Congress just hours before the 2000 Christmas recess. Gramm, until recently co-chair of the McCain campaign, also had co-authored the Gramm-Leach-Bliley Act that became law in 1999, with President Bill Clinton’s signature. That gem, which Gramm had pushed for years with massive financial industry lobbying, destroyed the Depression-era barrier to the merger of stockbrokers, banks and insurance companies. Those two acts effectively ended significant regulation of the financial community, and no wonder we have witnessed an even more rapid and severe meltdown in housing values than during the Great Depression.
Not surprisingly, Gramm was rewarded for his service upon retirement as head of the Senate banking committee with a top position at the Swiss-based UBS bank, which is close to drowning in the subprime mortgage nightmare he helped create. “
The important pols were all on the take from Fan and Fred, this has been well known for years. I must say it’s nice to see that one of them (Gramm) is now in a position to take a hit from the mess he helped create.
I sure hope that Barney Frank and the others held a lot of the Fan and Fred common stock as part of their payoffs. That would be sweet irony.
Finance and economics
America’s economy
Paulson’s pluck
Sep 11th 2008 | WASHINGTON, DC
From The Economist print edition
The “conservatorship” of Fannie and Freddie may soothe America’s economic woes, but it will not solve them
But that’s what its all about these days: spin, spin and more spin.
Substance? That is so yesterday!
China Daily
Lehman Brothers seeks a buyer(Agencies)
Updated: 2008-09-12 16:13
The once heavyweight Wall Street investment bank, the Lehman Brothers, is said to vehemently look for a buyer, after it has failed to spin off its sections of business and find institutional partners which could offer a life-saving money line.
As confidence in the company continued to dry out Thursday and Friday, the investment bank, with 158-years old on Wall Street, reached out to several potential buyers, including Bank of American and Barclays, a big UK bank, the news agencies reported quoting sources familiar with the negotiations now.
Sources said the Lehman hoped to strike a deal within a few days. Meanwhile, help with the US Federal Reserve, the American central bank, was being sought in order to make an acquisition palatable, just as the Federal Reserve oversaw the previous sale of another broken Wall Street investment bank, Bear Stearns, earlier in 2008.
And, US officials are evaluating what the potential hazards and loopholes will crop up if Lehman is left to collapse, that might batter the broader financial market.
I hear Haiti is interested in acquiring Lehman…
I hope the outcome of all this is that MBA business school go bankrupt.
The companies treated these kids like gold, and after the dot bomb and now subprime bomb, i hope nobody ever hires a mba right out of college for more then 30K a year considering the massive damage they have done to our country.
Rumor on CNBC: Fed/Treasury says no bailout or guarantee for Lehman and any potential acquirer.
We’ll see.
i hope nobody ever hires a mba right out of college for more then 30K a year considering the massive damage they have done to our country.
Amen, amen.
amen, Amen, AMEN! Like that asswipe Donahoe at Ebay. Holy Cripes, I have NEVER seen anyone put a company in ruin so fast. That may be the ONLY thing I ever agreed with Cramer about.
How could an MBA be right out of college?
They live home with mom and day and bartend of be a dj to pay the bills…LOL
i meant dad…geez ….anyway there wont be a great paying job if they did get a mba..so why bother?
WSJ said the other day that Lehman had written down their alt-A mortgage paper to 37% of face value, down from about 63% previously. I’d guess that’s equivalent to about a 50% drop in the expected value of the underlying assets from face value.
Can anyone suggest at what point denial about the state of the banking sector will end?
Banking Is Tanking
By Matthew Yeomans and Bernhard Warner
Posted Friday, Sept. 12, 2008, at 6:16 AM ET
The New York Times, Wall Street Journal and Fortune all lead with Lehman Brothers’ plight this morning. “Lehman races to find a buyer” screams the WSJ headline after a disastrous day during which the once high-flying investment bank’s “self-made survival strategy - ranging from spinning off commercial real-estate to selling a stake in Lehman’s lucrative investment-management division - failed to halt a slide in Lehman’s stock price.” By the end of yesterday Lehman’s shares had slid 41% as investors voted with their feet. Lehman’s best hope now is an outside buyer with Bank of America and Barclays interested but only if the U.S. government offers assurances to help shield them from further losses. The Washington Post says that the Federal Reserve and Treasury Department are “actively helping” Lehman put itself up for sale but time is running out; long-time Lehman customers tell Fortune “they have sharply curtailed their trading with the firm.” It all seemed so different just one year ago. Back then CEO Dick Fuld (who recently received a $40 million compensation package) said, “Do we have some stuff on the books that would be tough to get rid of? Yes. Is it going to kill us? Of course not.” Those words could yet come back to haunt him.
There were thousands of people handing out rose colored glasses at the political conventions, so denial may take longer than can rationally be expected. I am also noticing that the PPT is working hard today, as we have an up market at 1130. An interesting set of market rallying circumstances. Any ideas?
Foreclosure filings increase, but at slower rate
http://biz.yahoo.com/ap/080912/foreclosure_rates.html
Foreclosure filings in August increased 27 percent compared to the same month a year ago, a significantly slower pace than in previous months, according to data released Thursday.
Nationwide, 303,800 homes received at least one foreclosure-related notice in August, up 12 percent from July, RealtyTrac Inc. said. That means one in every 416 U.S. households received a foreclosure filing last month.
“The increases in default and auction activity could be slowing down partly as the result of new legislation passed in several states that is designed to give homeowners in distress more time before foreclosure proceedings are initiated,” Saccacio said.
So foreclosures are up, but the % change from last August is’t as great as it was in July? The headline reads a positive, but in reality it’s getting worse. Am I reading this right? Also, wasn’t it August last year when the crap mortgages starting hitting in force, so the increase would likely be less in August than July? That’s what I love about these stories; they have absolutely no analysis of the numbers. More coffee is required….
Just wait until the Alt-A’s and Option ARMs start resetting next year while the recession drags on.
When I tell my “sheeple” friends about this I get blank stares and responses along the lines of “Alt What?”
Once I explain it, they usually get an “oh sh*t” look on their faces.
Most of them were thinking that the worst was over.
I wouldn’t worry about it. The goal is to end all foreclosures and let deadbeats live in houses they can’t afford while maintaining absurdly higher “values” for those homes. The deadbeats win, the banks win, and the productive members of society lose. Gee, what a surprise!
While that may be the goal, it’s impossible. Unless there is a hyperinflation in wages, along with mass job creation, it’s curtains for house prices. It’s all an effort to keep the banks alive, managing them through their DT’s. They’ll happily send J6P to his death.
Real house prices have to fall until they come down into line with rents and incomes. How much of that is depreciation in house prices oand how much inflation of everything else remains to be seen.
I would like to see the numbers in the month the IRS said it would not tax forgiven debt on homes. I bet defaults spiked.
http://www.irs.gov/individuals/article/0,,id=179414,00.html
Looks like the law was passed on December 20, 2007 but applies to all of 2007, 2008 and 2009….so far.
Always looking for the bright side in SE Michigan:
http://www.detnews.com/apps/pbcs.dll/article?AID=/20080912/BIZ/809120389/1001
The mortgage delinquency rate in GA last month was 1 in 8. That’s 12.5% boys & girls. It’s not getting any better.
You are dead-on right. The numbers are completely manipulated.
Let’s see the month on month numbers, since seasonality should have nothing to do with foreclosures. That measure is up 12%…
Not arguing that the numbers are not manipulated, but there may some seasonality to foreclosures. When property taxes come due in December, I expect to see a lot of stuck flippers capitulate. The fallout should be a few months later, just in time for Spring selling season next year.
So these Dem-wits think this will make a difference? Like getting harpooned through the mid section and dabbing on styptic pencil to stop the bleeding. So the folks that can’t or won’t pay their mortgage will ad to the list of squatters now. What a waste of skin these guys are.
Democrats call on Fannie Mae and Freddie Mac, under government control, to halt foreclosures…The senators — Sherrod Brown of Ohio, Bob Casey of Pennsylvania, Bob Menendez of New Jersey and Charles Schumer of New York — wrote that the companies should “take whatever actions are necessary” so more families “do not have to suffer the economic and personal disaster of foreclosure.”
http://biz.yahoo.com/ap/080911/congress_foreclosure_freeze.html
Cool! Gubernmint giving me a free place to stay. Bring it on!
Pick your poison. Either the Fannie/Freddi CEOs give up their severance entitlement (they’ve been fired, so why did they get anything?) or you let these shlubs stay in the homes they are occupying, but clearly don’t own. The CEOs have a soft cushy landing whichever the wind blows, the shlubs, not so much. They may be heading to a family member near you. All politics are personal.
After last weekend’s deal, is there still public money up for grabs?
U.S. Helps Lehman Go Up for Sale
Regulators Are Seeking a Weekend Deal Not Involving Public Money
By David Cho, Heather Landy and Neil Irwin
Washington Post Staff Writers
Friday, September 12, 2008; Page A01
The Federal Reserve and Treasury Department are actively helping Lehman Brothers put itself up for sale, and officials are hoping a deal will be in place this weekend before the Asian markets open on Monday, according to sources familiar with the matter.
I think “Socialist Sundays” will be with us for a while.
Paulson is going to work the weekend ….watch out taxpayers .
Nobody told me when I bought cheap Chinese goods, that I also had to guarantee their bond returns. I thought cutting taxes, massive budget and trade deficits and globalization were supposed to be good for America.
Hey Jon I feel the same way you do . In that this big experiment
with insanity ,that was just a con to increase the profits of the Corporations in the short run is a failure ,and might bring America
to its ruin ,I vote for anything that will undo the experiment .
Good morning everybody.
SV Eubanks here. Welcome to my new game show…….
It’s a Friday only show. I’ll call it “Name that Bank”.
As in which one is going tits up today?
Mike
LOL, maybe we could start a dead pool.
BTW, WaMu is running a big TV ad campaign around here (Tampa area) shilling for depositors. Y’know, I seem to detect a common theme here. These banks and financial institutions pretty much tend to scorn individual, regular folks. And it is not just banks, I’m watching ebay start going tits up because they hate their regular customers and would rather be a catalog platform for Walmart and other big retailers. But at the end of the day, when these corps have been busted out by their “big” bets, they do come crawling for the pennies from the little folks, don’t they? Because lots of little folks equal lots of pennies. Of course, Fannie and Freddie didn’t come crawling, they got help from the taxpayer by decree of Pimperor Hank.
I feel guilty - I moved some money (minor compared to most folks around here) into the WaMu 12-month CD at 5% this morning. I feel like a scorned lover, but then again, I’ve got funds at three other banks I also despise, so I guess I’m just a slut…
Don’t be too hard on yourself, you’re all you’ve got.
‘Don’t be too hard on yourself, you’re all you’ve got.’
But you are STILL a slut.
(just teasing you, chile. Jeezily, relax!
Or don’t, if you have money in WaMu.)
Thanks. Total bank slut. I’m just trying to get my grubby paws distributed in as many banks as possible. Maybe one of them will make me an honest man in the future.
Naaah. They’re all just using me for a night of fun….but I can lie to myself, right? I’ll get a white dress out of this, won’t I?
Hey, here is a strategy for you! There is money in “going slut”!
http://www.rense.com/general83/fem.htm
Must be a nationwide campaign……those were running here last night too.
I’d say WaMu is pretty much F’D, I C
Option ARMs will bring them down (as well as many others).
Also, over/under on the number of bank failures each weekend?
LV bookies have set the spread at two announced banks after COB today.
Here’s the current Vegas Line:
WaMu: even money
Downey Savings: 3-1
BankUnited: 7-2
Franklin Bank: 5-1
Place your bets…
Where’d you get this?? Thanks.
It came from a figment of my imagination…
I will take Downey. They dont matter much so it will be easier and quicker. The feds still need to work out some sort of orderly plan for WaMu. Plus they have to put Lehman to bed this weekend too. Wamu will hold on until Oct. Then they go and the market begins a large leg down.
Its a shame that Downey, which survived the S&L fiasco, will go down the tubes this time.
Just goes to show how short memories are. Or more likely the bozos in charge were just kids during the S&L crisis.
I fear that the bubble will be back with a vengeance.
Does Vegas have pools on the next bank to fail? They should…
WAMU in the news keeps insisting that they have enough Capital .They might be getting a bum rap . JP Morgan is interested in WAMU, according to a variety of news programs .
False suitors are a dime a dozen nowadays…
True aladinsane . I guess it depend on how much the government is willing to sweeten the deal .
I prefer perp walks to bailouts.
Lehman for sale in rush to salvage struggling firm
Treasury, Fed reportedly helping as deal sought by this weekend
http://tiny.cc/CFrvO
Is the federal govt going to absorb the potential losses again like it did in Bears and Sterns case? When will the fed wake up and say enough is enough. Isn’t Ben Bernanke a smart academic who can back away from suicidal companies that acted like irresponsible teenagers? Wouldn’t you think that continuing down this path the fed has to realize he is sinking the country
Benjamins Bernanke is strictly “book smart”.
He seemingly doesn’t have a clue how to get things done in a real world setting…
“Benjamins Bernanke is strictly ‘book smart’”.
I agree. I suspect that he has spent a significant portion of his academic career analyzing sanitized historical data, not making real world decisions based on raw and incomplete real time data. Of course, just my opinion.
Also he’s experiencing the fact that the crisis going on right now tends to take all attention away from long term solutions. It’s very easy to spend all of your efforts trying to solve today’s crises via methods that actually make long term, structural problems worse. With 20/20 hindsight it’s easy to see what a mistake it is, but at the time…
It’s very easy to spend all of your efforts trying to solve today’s crises via methods that actually make long term, structural problems worse.
———————
But Greenspan did this and was called “The Maestro”. Ben just wants to get in on the action.
Poor Ben…
Me, I think Bernanke is smart enough to weigh out all the possible scenarios. He’s made a choice.
What he’s lacking isn’t smarts, it’s the cojones to make some unpopular policy decisions that’ll be painful in the short-term. So we’ll continue to see Band Aids instead of tourniquets.
I hope it is not one of my several banks
The chances of it being your bank is 4/8546
You assume all banks are equally likely to go belly up.
Nah, I have no knowledge of his bank. I suspect 4 banks will go under this day. lol
Sales, prices take biggest monthly drop in 13 years
http://www.theday.com/re.aspx?re=b5ac52e5-6a7f-4064-8a6a-4c7ddab32c1e
The July figures mean the number of sales of homes in the state has fallen by more than 20 percent in each of the past nine months. July numbers totaled 2,830 single-family sales statewide, the first time Connecticut has recorded fewer than 3,000 sales in the month since 1995.
While this year will go down in history as a slack time for real estate, a leading expert speaking Thursday at the Norwich Holiday Inn said economic conditions should improve nationally and locally by the second quarter of 2009.
Paul C. Bishop, managing director of research for the National Association of Realtors, told about 150 real-estate professionals gathered for a legislative breakfast that projections show sales numbers nationally dipping nearly 5 percent this year, but rebounding more by than 3 percent next year.
Bishop said he expects real estate to take some time to turn around as high inventories in some parts of the country continue their inevitable drag on prices. He found hope, however, in statistics that showed sales starting to pick up in some of the hardest-hit parts of the country, including southern California.
After his speech, Bishop admitted that his projections represent “some science but a lot of art.” Bishop said projections are based on trends in the national economy as well as expectations that pent-up demand will inevitably start to drive prices higher.
Wow, they made me laugh his AM. Mr. Bishop is a leading expert who uses some science but a lot of art. Yun must have trained this guy and has to be proud of his progeny and its ability to swoon the crowd. My Bishop translation, “”absolutely no science, but a lot of BS.”
Charlie Rose: A discussion about the economy with Robert Rubin and Larry Summers.
Interesting.
Find it here:
http://www.charlierose.com/shows/2008/09/10/1/a-discussion-about-the-economy-with-robert-rubin-and-larry-summers
“We find two great gangs of political speculators, who alternately take possession of the state power and exploit it by the most corrupt ends — the nation is powerless against these two great cartels of politicians who are ostensibly its servants, but in reality dominate and plunder it.”
Friedrich Engels
I thought Engels lived in the 1800’s. How come he knows so much about the US political system of the early 21st century?
“The oppressed are allowed once every few years to decide which particular
representatives of the oppressing class are to represent and repress them.’
Karl Marx
My father used to say:
“The feeding buckets stay the same, only the pigs change from time to time.”
“The oppressed are allowed once every few years to decide which particular
representatives of the oppressing class are to represent and repress them.’
…until they spontaneously read the first paragraph of the U.S.’s Declaration of Independence, grow some balls, and overthrow the big government.
“”…until they spontaneously read the first paragraph of the U.S.’s Declaration of Independence, grow some balls, and overthrow the big government.”"
From whence we came. However in order for that to happen we’d have to first remember that we are in fact a people and not some polyglot of “multiculturalism”.
I am struck by a contrast between our country and Pakistan (of all places).
In the past couple of years, Pakistani lawyers and judges took to the streets and protested Musharref’s mockery of the law. Quite effectively, I think. Discontent and the real threat of impeachment made their ineffectual, clownish president step down.
Can you imagine a professional class screaming “Enough!”, taking to the streets and throwing bottles in our country? Do we have that capacity any more? And where was our impeachment, more justified than any time in the history of our republic?
I too was blown away watching Pakistani lawyers in ties and 3 piece suits protesting in the streets of Karachi…
http://www.youtube.com/watch?v=Pyf047MgATA
Could you imagine our Tort-sure lawyerdom doing the same thing?
It won’t happen because too many people still feel that they have something to lose.
Can you imagine a professional class screaming “Enough!”, taking to the streets and throwing bottles in our country? Do we have that capacity any more?
Somebody here recommended this book awhile back, and I think it provides an explanation. In order to become a “professional” in this country, you have to endure various qualification procedures that grind the individualism and desire to question authority right outta ya. In fact, if you are the type that might tend to question authority, you get weeded out of the system so you CAN’T rise to any higher position.
The most important aspect of being a “professional” as far as the corporate world is concerned is the willingness to put the welfare of the corporation above that of the employees, the community, the country, etc. Of course, politicians have the same sort of attitude, only maintaining their own power is the primary concern.
The book also provides a nice explanation as to why American liberals wax concerned about the conditions in third world countries, but couldn’t give a rat’s ass about the poor in their own back yard. Anyway, I would recommend it.
I am reminded of a quote by one of the interviews in the movie “The Corporation” regarding corporate polluters. I haven’t seen the movie for awhile, so I’m paraphrasing, but it stuck with me. They were talking about how pollution from a particular factory had been linked to birth defects in the area surrounding the plant, and one of them was that a baby had been born without a brain. The talking head said “Now, if ask the CEO’s of this corporation if they want babies to be born without brains, they would say no. On an individual basis, they wouldn’t want that to happen. But because of their position in the company they make decisions that allow this to happen, and they don’t look on their actions as immoral.”
Anyway, this is a longwinded way of saying that the professional class is basically brainwashed enough that I wouldn’t expect any riots from them anytime soon…
Agreed, unless you are a consultant engineer. As a consultant, you have to perform several times more professionally than the average salaried engineer who is employed by your client. However you are treated more like a valuable team member and not under the thumb.
Umm…In a job shop of a public company or as an employee of a public company, you can share the spoils of the corporation and profit when the corporation profits if you have an ESPP. When I was a Raytheon employee, some of the 401k money was invested in Raytheon, for example.
From that point, It’s pretty much a myth that the professional is never going to get a piece of the pie that the CEOs get.
Of course, my usual disclaimer - out of justice and when I have time (like my day off from work, which is today) I like to defend capitalism and knock down socialist arguments.
It’s the employment and the debt. If you are in debt, and you have a job, you’re not going to riot in the streets.
It’s the comfortable (college kids) and the disenfranchised (unemployed) that generally overthrow things. For everyone else, it’s not bad enough to lose what they have.
Absolutely. The genius of American democracy is that the working class has it just good enough to side with owning class. The top 1% keep the next 60% just happy enough that they will turn against the bottom 40% to keep what little they have. As the top 1% giggles with amusement…
“nice explanation as to why American liberals wax concerned about the conditions in third world countries, but couldn’t give a rat’s ass about the poor in their own back yard. ”
OR the American “christians” who visit third world countries rather than our own to do mission work, or fix things there. No, I would say that is fundamentalist religious right approach.
‘Those who cannot remember the past are condemned to repeat it.’ –George Santayana
What does it take to be a good economist? The last “good” one was apparently Paul Volcker. Greenie and Bernanke certainly had all the right credentials, but what would be wrong with having a Roubini or even a Nobel prize winner like Stilglitz?
I don’t understand how we should be picking economists to run an out of control beast like the Fed when they are so omnipotent that they can let inflation get out of control, orchestrate bailouts, or choose to enforce regulatory laws selectively. I feel like the Fed is even worse than FEMA under Michael Brown.
… or even a Nobel prize winner like Stilglitz?
Aren’t a big group of Nobel Laureates running a hedge fund somewhere?
They ran it into the ground 10 years ago…
LTCM
What does it take to be a good economist?
Not having sheep for brains is a start.
This question also lends itself becoming the basis for some good light bulb jokes. Here’s mine.
How many light bulbs have to go out before a good economist will admit he/she is really in the dark ?
Ben,
You have some amazing people on this board - intelligence abounds here - and there are posts that have made me really stop and think - This was posted late in the day one day this week - and it has really made me ponder and think about where we are going as a country. I do not think many saw it because it was so late in the day - so I have decided to put it here early in the AM.
Whoever dagan is - hats off—-
___________________________________________________________
Comment by dagan68
2008-09-09
I am 100% in agreement with you
We are a republic. We were founded by men who had studied the history of every great republic in history in detail. They did everything they could in the Constitution to maintain the republic from the issues that tempted and corrupted republics in the past.
They will go down in history 1000 years from now as heroes.
Over the past 100 years - the population of this country has little by little chipped away all the stop-gaps they tried to place in the Constitution and now the end is upon us.
People think we are at the same place in Roman History as their empire. People are wrong. We are currently at about 100 BC or so before the days of Julius and Augustus Caesar. It was a time of massive corruption. They, too, had two political parties in the Senate - the OPTIMATES and the POPULARES. Interestingly enough - they were philosophically almost identical to our two parties - one was Conservative and “business” oriented - the other more Progressive and “people” oriented. The one big difference I have been able to tell is that the Roman military was 100% aligned with the progressive liberal party - as opposed to our society. The two parties so hated one another - and almost always balanced each other out - that they never NEVER allowed the other side to get a “win”. Rather, they went through decades of sex scandals, political scandals, impeachments (executions, actually) and moral morass. There were major, huge, overarching issues that simply were not addressed - they could not come to an agreement without one side getting a win over the other - and sex scandals were so much more fun anyway. They then experienced their version of 9-11 - except in their day the death tally was 80,000. This too was at the hand of a loose band of terrorists. Their Osama was named Mithradates and they lost all direction and moral compass for a decade. In the end, the checkmate continued relentlessly in the Senate - until the people had had enough - and began to demand action - and thus the concept of “dictator” for life began to be bantied about - and on came Pompey and Caesar - the rest is history.
Our founding fathers knew this story and all the details - tried their very best to protect their offspring from the trial of history - but we have failed them.
History does not repeat itself - but it echoes loudly. We are at a critical turning point - I actually think we have already passed it. I firmly believe - that the pivot of history was in 1989 - that had we extended the TRUE hand of friendship to Russia in the 1990s instead of sending them our worst demons in the form of oligarchal capitalists - the world would be a much better place right now. But we had leaders - not unlike many Roman proconsuls - who were more interested in oil revenue and lining the pockets of their friends rather than the true interests of the country.
Such is life and such is history - I have come to peace with what is about to happen - and to those of you thinking about an escape to another country - it is times like these which happen at critical pivots in history - where there is NO SAFE HAVEN.
So as my beloved Republic is in its death throes ( just think about it - did you ever think you would see a Vice President candidate seriously considered who would be more appropriate for the Jerry Springer show ), I salute you and wish for you the best. The first thing that came to my mind when her name was announced was one single word - INCITATUS. What is that, you say? The Roman Emperor Caligula - had such absolute contempt for the legal and proper political process in his empire - that he decided to stick it in the eye of the Senate - the People and the Media - he appointed his HORSE, INCITATUS, to be the proconsul of the Roman Empire - basically his Vice-President. (The claim that Caligula was a wackjob and this pick the sign of his insanity is long-held but factually untrue - he was most definitely sane.) This is the same contempt behavior I see in McCain and the current Republican (OPTIMATES) party for their system of government and the people/media. This is exactly how this pick will go down in history - another INCITATUS - It just remains to be seen if the brain rot that sat in on Romans is as entrenched in Americans to knowingly elect someone who holds their intelligence in this contempt.
Good day all.
Mithradates — he died old.
Come to think of it, Joe Biden does bear slight resemblance to a horse I saw once on Springer…
I think this Roman Emperor best exemplifies our current leader and times…
He’s the starting point for the beginning of decline of the Roman Empire~
=======================================
“Whereas the reign of Marcus Aurelius had been marked by almost continuous warfare, that of Commodus was comparatively peaceful in the military sense, but was marked by political strife and the increasingly arbitrary and capricious behaviour of the Emperor himself. In the view of Dio Cassius, a contemporary observer, his accession marked the descent “from a kingdom of gold to one of rust and iron”.”
http://en.wikipedia.org/wiki/Commodus
Great post.
I would add that the founding fathers forgot about the pervasive influence of religion, which was not an issue in the Roman empire until Constantine brought in Christianity as the state religion (previously Pagan and mostly not open to pluralism or interpretation as the Emperor was by definition the designee of the Gods).
I don’t know that our modern day Optimate’s contempt for academia is as potentially damaging as their need to appeal to religious voting blocs to remain in power.
The political divisions of today remind me more of the social conditions that preceded the Council of Nicaea than they do of the Roman Republic before the age of despots.
Well, Mr. Man, I’m going to go pray for you to not be so cynical, so there.
Thanks Oly, for verily my name is Legion and the demons have possessed me. My head twirleth as I vomit split pea soup on ye.
Just a little correction. Constantine did not make Christianity the official religion of the Empire. He made it an official religion, meaning Christians were no longer to be considered atheists. Constantine himself was an adherent of the religion of Sol Invictus (the Invincible Sun) and did not convert to Christianity until he was on his death bed. His wife was an Arian Christian (early Unitarian) and undoubtedly influenced his thoughts on this greatly.
It was the Emperor Justinian who finally made it illegal to believe in any of the other religions in the Empire, and went about converting the shrines of other religions to churches at the end of a sword.
If it had not been for Justinian’s murderous rampages in the name of Christ, we might all be tithing at the local Church of Mithra.
Wow, you don’t get this stuff anywhere else. Freedom of thought is still very much alive. As in all historical epochs, it’s as rare as precious stones hidden in the muck and clay.
Damn… That was a good post. Thanks for reposting it. The similarities are… disturbing to say the least…
Freedom of thought is under threat
http://news.yahoo.com/s/ap/20080912/ap_on_el_pr/palin_librarian
Freedom of thought is under fire
Shortly after taking office in 1996 as mayor of Wasilla, a city of about 7,000 people, Palin asked the city’s head librarian about banning books. Later, the librarian was notified by Palin that she was being fired, although Palin backed off under pressure.
According to the Mat-Su Valley Frontiersman newspaper, Emmons did not mince words when Palin asked her “how I would deal with her saying a book can’t be in the library” on Oct. 28, 1996, in a week when the mayor had asked department heads for letters of resignation.
“She asked me if I would object to censorship, and I replied ‘Yup’,” Emmons told a reporter. “And I told her it would not be just me. This was a constitutional question, and the American Civil Liberties Union would get involved, too.”
McCAin drops dead and this is what will run the whitehouse and the country. Ban science, burn the books, subjugate the press.
I must agree with the 1989 comment on the “TRUE hand of friendship” comment. It would be a different world if we had. No, we had to gloat and swindle. Just had to. We need to make money after all.
This cynicism of our pols ( and ourselves!) goes a lot deeper and much longer than we think. I give one example in LBJ and his little Vietnam faux pas. He stayed because he didn’t want to be the first President to loose a war. Instead, he wanted to be the first President to start and continue a useless war that ultimately engulfed N. Vietnam, S. Vietnam, Laos, and Cambodia, in a frenzy of killing and murder that lasted 20 years or more and cost untold misery and 50,000 of our citizens plus millions of Asians.
Oh, let us not forget that Eisenhower and Truman supported the French when they were there. No freedom from colonial occupation for SE Asia after WWII. Nope.
Iran did you say? Truman supported the overthrow of an elected Gov’t and brought back the Shaw with his secret police in tow in 1953.
This crap goes on and on.
And we wonder why people are pissed at us. I couldn’t say really… a complete mystery.
Roidy
’ssshrubery just extended the Afghanistan War into Pakistan…
He couldn’t of done it when our pawn Musharraf was in power, nope.
He had to wait until they had leaders that don’t especially like us all that much~
Nothing surprises me anymore…
I don’t know if it’s true that more bombs (150 000 tons) were dropped on the Plain of Jars than in the whole of WW II. But the land mine situation is absolutely desastrous in these parts, and if some feel an inclination towards charity, a wheel chair (i.e. wooden seat with wheels) is always welcome in Vietnam.
Not only did the US never sign the Ottawa Treaty, they never stopped exporting them. And now rev up production:
” The Pentagon has requested a total of $1.3 billion for development and production activities for another new antipersonnel mine called the Intelligent Munitions System, with a full production decision expected in 2008.
There is concern that a United States proposal for an international prohibition on export of landmines that do not self-destruct will pave the way for the resumption of U.S. export of antipersonnel mines that do self-destruct.
These developments are the result of the Bush administration’s landmine policy announced in February 2004…”
And then there is some wonderment that they eat charred bats and rats in these parts, where even decades later they can’t grow food without being blown apart.
“We are a republic”
Correction: We are a representative democracy.
did you know that the founding fathers use the words republic and democracy to refer to the same thing and in the same context? partisanship is the reason why we still have this disagreement.
In James Madisons case, he first separated the definitions of the words in Federalist #10….. and then changed his mind years later to suggest the USA is a democracy.
Today? We have a sick, twisted combination of feudalism and fascism where the concetration of power is in the hands of the few that own all. The rest of us are serfs and laborers who have no say in how things are run.
Benito Mussolini best describes our current corporatist or fascist state: :Fascism should more appropriately be call corporatism because it is the merger of state and corporate power”.
Concur.
Great historical comparison.
That is why I like this blog
Me too. I loved Dagan’s post, and there are truly many loud echoes. However, I must say that sometimes I find myself making parallels between the American Empire and the Spanish Empire. I know that no parallel is perfect, but think about it. Spain plunged all the loot it got from America into religious wars in Europe. They were so convinced of the purported “superiority” of Catholicism, so arrogantly sure that the Empire was going to keep on sending galleons full of gold an silver forever, that they completely missed the industrial revolution, so much so that they were finally done in by those Protestant upstarts, the English, who benefited enormously from trading with South America once the Spanish Empire imploded and vanished in less than 20 years. I’m thinking that yesterday’s England is today’s China, Russia, India. While the US is exhausting itself in misguided wars, the others are working hard and biding their time. Remember, nature has a horror of the vacuum, and arrogance is always an Empire’s undoing.
“History does not repeat itself…”
“The people always have some champion whom they set over them and nurse into greatness…. This and no other is the root from which a tyrant springs; when he first appears he is a protector.” -Plato (c. 427–347 B.C.), Greek philosopher. Socrates, in The Republic, bk. 8, sct. 565.
Did anyone see the interview clip on ABC of Sarah Palin yesterday? I have my own biases…unlike to most of you, she is very familiar to me as she as been governor of my state for the past 20 months. It’s a little creepy to see her discussing national politics though. I was disappointed that she wasn’t asked about the economy or government policy about bailouts, etc. I’m almost positive that if McCain wins, she has a very good chance of becoming POTUS before 2013, or 2017 if McCain lives long enough to get re-elected.
Maybe that’s the point McCain is making……even a soccer mom knows something is very wrong in America
———————————–
It’s a little creepy to see her discussing national politics
She’s just packaged air.
Which one isn’t?
As opposed to the packaged ObamaNation.
We can tell what you’ve been reading, eh?
Caribou Barbie comes packaged with Old Man Geezer Moneybags, who finances her fun and games… or something…
If taken together, the 4 candidates (would-be presidents and VP’s) couldn’t run a lemonaide stand without: getting into a war with the neighborhood, bankrupting the county, or otherwise screwing the whole thing up.
Just say the words: “President Sarah Palin” Has a nice ring to it, dontcha think?
My favorite part of the interview is where she starts discussing the potential need for war with Russia if they invade Georgia again “unprovoked”, based on alliances with Nato… To quote:
When asked by Gibson if under the NATO treaty, the U.S. would have to go to war if Russia again invaded Georgia, Palin responded: “Perhaps so. I mean, that is the agreement when you are a NATO ally, is if another country is attacked, you’re going to be expected to be called upon and help.”
“And we’ve got to keep an eye on Russia. For Russia to have exerted such pressure in terms of invading a smaller democratic country, unprovoked, is unacceptable,” she told ABC News’ Charles Gibson in an exclusive interview.
I’m sure it’s just basic lack of knowledge or saber rattling, but I find myself a bit perturbed by the prospect of TOTAL NUCLEAR ANNIHILATION! It’s funny that her home state would be the first to be “glassified” in such an event. Go figure.
We used to be terrified of the aspect of a nuclear exchange between us and Russia, and now we have a hausfrau tossing around the idea like it was a trial balloon…
She’s quite the Palindrone isn’t she?
So many evangs, so few lions…
No need to sweat a McBush/VegasShowGirl victory.
No need to worry, the Mccain hdq and repub hdq is already sending out absentee ballots by the carloads with the return addresses being Mccain hdq and repub hdq.
Wisconsin, PA, and Fl yesterday reporting receiving absentee ballots where none were requested, or receiving robocalls stating ballots were coming.
Yep. this one will be a doozy, and not to worry…
Such actions by the gop goes to show you their level of desperation and willingness to do anything to maintain power. Even the press has caught on to their scam and refers to Grandpa McBush as “liar” after his….. lying on The View today. So much for the “liberal press” boogeyman.
Not lack of knowledge in this case (though I’m sure what she knows about foreign policy could be typed on a credit card). NATO is obliged to defend its members. Which is why many argued against encircling Russia with NATO members that used to be parts of the Soviet Empire. It may be a crazy policy, but it’s not Palin’s fault. Goes back to Clinton in Kosovo, the Ukraine Orange Revolution, and the Bush use of Georgia as a surrogate.
“And we’ve got to keep an eye on Russia. For Russia to have exerted such pressure in terms of invading a smaller democratic country, unprovoked, is unacceptable,” she told ABC News’ Charles Gibson in an exclusive interview.
I bet once she finds out about this whole Iraq thingy, she’s going to regret making that statement.
The more I see this woman the more I think she’s another Dick Cheney in a skirt.
Well her and Putin can go out tiger hunting, but at least she a marksman(woman) and wont shoot put-in de azz….LOL
And without a…dick
I’m thinking that McCain/Palin would be good for my stocks in the short term before the great Depression hits. However an Obama/Biden victory would tumble the markets unless they can have a Republican majority congress like Clinton had in 1994 to 2000. If we can get a similar renegade opposition party Congress like Clowntoon had, I would say Obama would get 2 terms and get all the credit for the stock boom of 2010 to 2016.
But we will get a big spending Congress instead. A McBama victory is certain.
Therefore we will have an even deeper and more severe economic crisis the next few years.
In case you didn’t notice, Reuters and other media reported yesterday that “The nonpartisan Congressional Budget Office on Tuesday forecast that the full year fiscal 2008 budget deficit would rise to $407 billion, compared with the fiscal 2007 final deficit of $161 billion.” Nice to see that you’re looking out for number one. Country First!
She somehow reminds me more of Patti Hearst…and it didn’t take long for Palin to be on a magazine cover with her gun (I think its Time or Newseek) a la Patti.
so maybe she will have a bit part in a John Waters movie in a few years??
She’ll be another tool for the neocons.
…but infinitely less intelligent/informed…..but undeniably a better shot
When I was watching the Presidential forum last night I couldn’t help but become mesmerized by McCain’s facial lump, which was caused by his melanoma surgery. My father (just 2 years older than McCain) recently died from skin cancer, after years of new cancers appearing & chemo/radioation treatments…and I can’t imagine that the stress of taking on the very aging job of President would not exacerbate the systemic nature of this very aggressive cancer. So, long story short, it’s not far-fetched to speculate that Palin would be Potus.
Yes, noticed the lump too the other night. it is becoming larger. Poor guy, politics aside, it cannot be pleasant for him. And Cindy McCain at the Rep convention. Holy opiates Batman! Anyone that has take one too many vicodin knows she was high as a kite.
As far as Gov Palin. Anybody a Mad TV fan? Remember Stuart’s mother? Same accent.
It was a selectively edited interview.
Real estate experts say it’s a ‘buyers market’
http://www.greenvilleonline.com/apps/pbcs.dll/article?AID=/20080912/BUSINESS/809120323/1004/NEWS01
Nick Sabatine, executive director of the Greater Greenville Association of Realtors, describes today’s market as “a buyers market,” with a wide variety houses available.
As of August 10, there were 7,000 properties available through the Greenville County Multiple Listing Service (MLS).
Both Sabatine and Jill Blume, president of BankLine Mortgage Corp. in Greenville, cited the federal government’s decision to take over the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corp. (Freddie Mac) as impacting the market in a big way.
The government’s decision regarding mortgage giants Fannie Mae and Freddie Mac “sent a huge infusion of consumer confidence in the market, making the interest rates drop dramatically,” Blume said.
The real estate clown troupe is out in force this week. I didn’t realize that all these failing banks “sent a huge infusion of consumer confidence.” I can hear it on the Greenville streets now, “Hey, Bob, I’m feeling financially confident today: Banks are failing and Freddie and Fannie just went under and had to be bailed out by the feds! I had better buy a house now or be priced out forever!
“Real estate experts say it’s a ‘buyer’s market’.”
That’s great news. These ‘experts’ need our support because the economy needs the money.
When isn’t it a great time to buy according to realtors? If you listen to them you will be in foreclosure too.
“The real estate clown troupe is out in force this week”
Yep, Local radio are running ad’s claiming the F&F bailout will bring homes sales roaring back to life.
I think some of the most gullible are starting to get the idea that something isn’t right.
Keep the hope alive. If the NAR can convince people the bottom is in then:
1. FBs will have incentive to stay and keep up with their payments instead of walking, and
2. Knifecatchers will be pursuaded to commit new money into the system.
Both 1 and 2 are good for the economy and us taxpayers.
The NAR has some help (sorry if this is a double post):
http://money.cnn.com/2008/09/11/real_estate/bottoms_coming_up/index.htm?postversion=2008091115
Most objects don’t fall upwards.
So far as I am aware, the U.S. stock market is a rare exception.
Most, but bome FBs would disagree, since they were about to catch rising knives.
“Lying can never save us from another lie.”
Václav Havel
We used to live near Reston, VA and was curious as to how the housing market is holding up in Northern Virginia?
ashburn is getting destroyed. closer in the FBs are still dreaming, however I did see a bank owned rambler in 22180 (vienna) with a $ 339,000 price today that was bought in 2003 for $ 345,000 so the bubble is losing air.
my wife and i sold our alexandria condo six months ago for about 12% off of peak and are now renting a 3 bedroom townhouse for $ 2,500 a month five minutes from both of our offices. the townhome we are renting was selling for $ 630k at peak.
we want to buy one of those vienna ramblers and tear it down to build at some point. but we will rent for a couple years until the price is right - which it will be.
Wow, is that place in Vienna a dump!
http://www.franklymls.com/FX6685554
But, yeah, outer areas are getting smashed (Manassas YOY for August is 50% decline!). Parts of Herndon are really hurting. Inner areas off 10%. Extrapolate to places in the middle.
wow…gotta love that green carpet.
walls in ‘good shape’ too.
Wow, I cannot understand how that kind of money buys you that kind of decrepit crap. And 4k a year in taxes? Who is making the kind of income that supports paying 4k in income, yet you are living in a crapshack?
Is it really that special there?
Is it really that special here? ‘NO’ (but don’t let the locals hear you say that)
I would call Ashburn my little version of hell. It is the first “Master-planned Community” I have been exposed to as I moved to the area a few months ago. I could only imagine the little Adolfs running the HOA. I would never ever consider a community like that.
In my hood 20171/20170, there is a 1/1 condo going for 140K that is walking distance to Herndon Monroe Park and Ride (a future point on the silver line). I’d call that progress, but still plenty of froth.
Year Two of the New Depression…Anyone who doubts that we are a year into a Depression, remember, these things do not hit you like a punch in the face; rather, they are more like an untreated boil that slowly festers until body parts have to be amputated from infection. Good morning to you, too, and welcome back to my column after my summer off.
In October 1929, the stock Market crashed, yet there wasn’t a run on the banks until 1933. In March 1933, the day after assuming the Presidency, Franklin D. Roosevelt declared a bank holiday to stop the bleeding and institute regulations – which were fast tracked and passed within months. That legislation included the establishment of the FDIC.
http://www.smirkingchimp.com/thread/17079
The Four Whoremen of the Financial Apocalypse…
’ssshrubery, Bernanke (triple-bbb rated), Paulsonocchio & Wall Street
“There’s nothing of any importance in life — except how well you do your work. Nothing. Only that. Whatever else you are, will come from that. It’s the only measure of human value. All the codes of ethics they’ll try to ram down your throat are just so much paper money put out by swindlers to fleece people of their virtues. The code of competence is the only system of morality that’s on a gold standard.”
Francisco d’Anconia
It is possible to be both competent and a crook.
The more competent on is, the easier it is to be a crook.
There’s nothing of any importance in life — except how well you do your work.
I think that attitude lead to parents divorce.
Nothing more important in life than being born rich
- F d’As nanny.
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/11/AR2008091102841.html
Where Was Sen. Dodd?
Playing the Blame Game On Fannie and Freddie
By Al Hubbard and Noam Neusner
Friday, September 12, 2008
“…We will save the senator some trouble. Here is what we saw firsthand at the White House from late 2002 through 2007: Starting in 2002, White House and Treasury Department economic policy staffers, with support from then-Chief of Staff Andy Card, began to press for meaningful reforms of Fannie, Freddie and other government-sponsored enterprises (GSEs).
The crux of their concern was this: Investors believed that the GSEs were government-backed, so shouldn’t the GSEs also be subject to meaningful government supervision?
This was not the first time a White House had tried to confront this issue. During the Clinton years, Treasury Secretary Larry Summers and Treasury official Gary Gensler both spoke out on the issue of Fannie and Freddie’s investment portfolios, which had already begun to resemble hedge funds with risky holdings. Nor were others silent: As chairman of the Federal Reserve, Alan Greenspan regularly warned about the risks posed by Fannie and Freddie’s holdings. …”
The old CYA in Washington that is so full of BS.
Blaming the whole thing on F & F campaign contributions. LOL
Senators and congresspeople do not stay bought.
Ford CEO Mulally: Federal Money Will Help Company Thrive
http://www.cnbc.com/id/26673128
Funny, I asked Mulally that question and he admitted Ford was truck and SUV focused because THAT is what the customer wanted. Now that the market has shifted, Ford has to try and shift with them. Unfortunately, getting the money to re-tool the assembly plants is not easy when the credit rating is in the tank. Hence, the automakers are turning to Washington for help.
Yes, it’s always the consumers fault when companies fail. Make a lousy product and the consumer will go to those that make better products. Consumers focused on the gus guzzling, air polluting qualities of the SUV because those were the only commercials that were on tv, radio, newspapers, etc. (subliminally: Buy a gas pig and be a trendy winner like your neighbor; if you buy one of our crappy small cars you’re a loser.) I don’t see any of these chucky-like smiling faces say that they will cut CEO/management salary until they are profitable. No, they just want the taxpayer to happily pony up the cash.
Auto manufacturers are making a strong showing. Shares of General Motors (GM 13.78, +1.03) and Ford (F 4.88, +0.20) are both advancing. Reports indicate that GM is looking for low-cost loans from Congress that would help operations at the struggling automaker. Automakers continue efforts to stimulate business by offering incentives to consumers.
its almost as if the marketiers know this money is in the bag?
I noticed that the article never actually said that Ford needed the money. From what I’ve read they’ve already started the work needed to convert the factories. But if the money was offered to them cheaply, I can’t imagine why they wouldn’t take it!
Here is the first of the small cars that Ford is producing under their new system:
http://www.autoblog.com/2008/09/08/first-drive-2009-ford-fiesta/
If I were in the market for a tiny car for tooling around the city this would definitely be on the list. I’m not, so I guess my opinion isn’t worth as much.
The Smart Car made by MBZ is a great little car that is safe and efficient and even drives on fwys.
Neighbor has one, they are seen all over Italy,France, and are quite the economical vehicle with the Mercedes safety factor.
One of my sisters has a Smart Car and loves it. It has a lot more interior space than one would think looking at it from the outside.
Didn’t some one mention a wile back…They built high priced condozes in front of the seawall in Galveston? or on Galveston island where there was no sea wall?
Wonder what they will look like tomorrow night?
Considering how many people bought real estate sight-unseen, I am sure that the demolished condos will be “a great investment, because now is the time to buy! They aren’t making any more unprotected, hurricane-blasted beachfront land!”
Yes,
Some high rise condo towers were built on the north end of the island.
As far as the seawall is concerned, it’s only going to somewhat protect property from the pounding waves. But that whole island is still going to be under water shortly.
Mike
yes mike the first floor is now beachfront property….
but since we cant use any electricity due to the generators and elevator motors being in the basement you will now have to climb up 20 flights of stars to enjoy your fantastic Penthouse condoze.
And due to insurance regulations we were forced to intstall non- opening windows except in the kitchen and bathroom…..so hopefully it wont be too horrible a place to live without any AC..
Remember you condoze fees are still due on the 3rd.
the management
I have a friend in metro Houston and he tells me that everything there is still going gangbusters. Houses in his neighborhood are selling for 30% more than just 2 years ago.
Hopefully his house will still be standing next week. They are about 40 miles inland, so he is optimistic that they will be fine.
Gas went up 30 cents overnight where I live, and:
At least one major gas station chain began rationing gas Thursday, amid fears that Hurricane Ike would deplete supplies already diminished by hurricanes Hanna and Gustav.
The Pantry, which owns more than 1,600 stores in 11 states, put up signs at all of its stations asking customers to limit their purchases to 10 gallons of gas. That includes all of the Kangaroo stations and Petro Express stations owned by The Pantry, which is based in Sanford.
http://www.newsobserver.com/news/growth/traffic/gas/story/1215860.html
Don’t gas prices normally spike when a hurricane enters the Gulf of Mexico?
Consumer mood hits 8-month high in September: survey
http://biz.yahoo.com/rb/080912/usa_economy_sentiment.html
The Reuters/University of Michigan Surveys of Consumers said its preliminary index of confidence jumped to 73.1 in September — the highest since January 2008 — from 63.0 in August, for the biggest monthly jump since January 2004.
This survey should just be called the “are you happier with gas prices survey.”
or the “are you banking on another stimulus check before christmas survey?”
Paulson “adamant” no goverment funds for Lehman: source
Treasury Secretary Henry Paulson is “adamant” that no government money be used in any deal that resolves the crisis at Wall Street investment bank Lehman Brothers, a source familiar with his thinking said on Friday.
http://biz.yahoo.com/rb/080912/lehman_treasury.html
personally, i dont believe a word that he says!
Why not just keep the government out of the deal entirely? Pottery barn rules: You broker the deal, you buy culpability.
You break it, you bought it?
Like one wag said, you don’t put on a condom if you don’t intend to F’k somebody.
Paulson won’t get Fuld again?
Credit Default Swap Rates and Stock Prices
Marco Realdon
University of York (UK) - Department of Economics and Related Studies
January 11, 2007
Abstract:
This paper presents, estimates and tests a credit default swap (CDS) pricing model, which links a firm’s default intensity to its observed stock price. The pricing model requires finite difference numerical solutions. In spite of this quasi-maximum likelihood parameter estimation is still feasible. Evidence from a sample of large corporations confirms the validity of the link between the firm’s stock price and default intensity.
Lehman’s CDS are up to 530 /560 up from last nights 500 / 520
Down to the Banana Republic
Down to the tropical sun
Go the expatriated Americans
Hoping to find some fun
Some of them go for the sailn’
Called by the lure of the sea
Trying to find what is ailing
From living in the land of the free
Some of them are running from lovers
Leaving no forward address
Some of them are running tons of ganga
Some are running from the IRS
And late at night you will find them
In the cheap hotels & bars
Hustling the senoritas while they dance beneath the stars
Spending those renegade pesos
On a bottle of rum & a lime
Singing, give me some words I can dance to
Or a melody that rhymes
First you learn the native customs
Soon a word of Spanish or two
But you know that you cannot trust them
Cause they know they can’t trust you
Expatriated Americans feeling so all alone
Telling themselves the same lies
That they told themselves back home
Down to the Banana Republic things aren’t as warm as they seem
When none of the natives are buying any second hand American dreams
Standing ovation Hoz!
Leigh
It did not show up as I posted, but the Song is Mr. Jimmy Buffett’s , not mine. I am not that clever.
Good lyrics. Well done.
Not Mine!!!! Mr. Jimmy Buffett’s lyrics and song!!
WASHINGTON (AP) — Wholesale inflation plunged in August by the largest amount in nearly two years, reflecting a steep drop in energy prices. But in less positive news, retail sales remained in the doldrums in August.
More evidence that DEFLATION is knocking on the door. If it keeps up don’t be surprised if the Fed announces an interest rate cut prior to Nov. 4.
Even though it was scary when san diego home prices were going up everyday, I would almost take it back considering the fraud was localized, but now it is socialized. This is breathtaking!
“Unreason and anti-intellectualism abominate thought. Thinking implies disagreement; and disagreement implies nonconformity; and nonconformity implies heresy; and heresy implies disloyalty — so, obviously, thinking must be stopped. But shouting is not a substitute for thinking and reason is not the subversion but the salvation of freedom.”
Adlai E. Stevenson, Jr.
Now you’ve done it. Now Kudlow, Cramer, and O’Reilly are going to be real upset. Quick! Find a “tax and spend” liberal for them to beat on. There, that’s better.
Roidy
I don’t believe any word from any politician’s mouth.
Let’s change subjects.
OJ’s all-white jury was just picked. The trial starts Monday. Will he finally get a new home in the big house? Will he become Bruno’s ’special’ friend? I sure hope so. Just so we get some deflection from these inane politics, and OJ is so deserving. LOL.
Inventories up more than expected as sales slow
Businesses have been struggling to get a firm handle on customer demand. Consumers — somewhat energized by the government’s tax rebates in the spring — have been pulling back amid rising unemployment, shrinking paychecks, and fallout from the housing and credit crises.
http://biz.yahoo.com/ap/080912/business_inventories.html
there is a very important fact missing from this article. with the rise of real inflation, it is very hard for anyone to have money left over after the necessities are paid for. when people are having trouble paying their rent, electric, gas, and food bills and possibly a car payment, there is nothing left if you can actually manage to pay the bills i mentioned. so until the fed can get this mess they created (and try to ignore) under control, these retailors will contine to struggle with mounting inventory.
Alaska AIrlines is laying off over 1000 and reducing capacity.
Yep, our economy is great.
Merry Christmas.
I’m doing my part to freak out the natives in my affluent enclave. I scrounged my husbands loose change to buy some gas and the look on the gas station cashier’s face as I nonchalantly counted out the quarters…. priceless.
What does downtown Houston look like after a massive hurricane?
I live 70 miles NW of downtown Houston, but as of 1230 local time today, the upper right quadrant of Ike will hit Galveston bay. The predicted storm surge of water will be 18-24 feet, which is 3 times higher than Hurricane Rita. Winds at the coast will be Cat 2, and downtown will probably see between 50-75 kts. of wind. Lots of flooding predicted. Storm is still 12 hours away…..
Maybe a few smashed windows.
oil shock?
Sept. 12 (Bloomberg) — Venezuelan President Hugo Chavez yesterday ordered the American ambassador to Caracas to leave and threatened to halt oil exports to the U.S. in a show of solidarity with his Bolivian counterpart Evo Morales.
http://www.bloomberg.com/apps/news?pid=20601086&sid=aQQ1Fz6oFOio&refer=latin_america
Not as big a shock as the EIA report due out in November, just after the election, will be. The report will detail the results of the first survey of oil reserves remaining in world’s large oil fields. It is at that point that the purely on paper doubling of reserves by middle east countries during the 1980s will be revealed. They all did it, and it had everything to do with politics and nothing to do with geology or actual oil discoveries.
Oil remaining (recoverable): approx 1 trillion barrels
Population: 6.5 billion
Remaining oil per capita: approx 150 barrels per person (1 trillion divided by 6.5 billion)
Avg oil consumption by America: approx 25 barrels per person per year. In other words, we use up our “allotment” in four to six years.
Along the same lines, I understand/read that the Russian Navy shortly will be doing joint military exercises with the Venezuelans. In the Atlantic. So at least knowing the language of diplomacy should be a prerequisite for American leadership.
Disclaimer: Don’t care for any of the presidential choices. Care greatly about the outcome; hugely disappointed with nominees.
Hugely disappointed in fellow Americans.
They don’t know anything, don’t want to know anything, and god forbid they research the bs they do believe.
The people we have in office is what Americans chose time after time..so we are getting what the majority is voting for without thinking.
Everybody elses congress/senate person is bad, but mine is “good”. That is the mainstream “thought”.
Get rid of mine, Mary Bono Mack is terrible for our area, unless you have the bank acct of Gates etc.
–
“Americans Are Having Hard Time Finding Money to Spend”
That was the comment from a Bloomberg reporterette when retail sales were much worse than expected.
These Americans weren’t looking very hard for the helicopter drops that Bernanke promised them years ago. No extra spending money means abatement of the inflationary pressures.
If we listen to some commodities bulls and inflationists in America the Chinese and the Indians have lot of money to spend to drive demand and prices higher. We shall find that out soon enough. If you ask me, the Chinese and Indians were sucking on big American tits and the milk is drying up.
Jas
A primer for deflationistas:
In 1964 a silver certificate and silver dollar were interchangeable. Today the ratio of paper to silver is 10 to one. Is that deflation?
In 2000 people like Jas said ‘$20 oil will never last, it’s going to 10′.
In 2006 Jas said on this board ‘$60 oil will never last, it’s going to 10.’ Today Jas says ‘100 oil will never last, it’s going to 10′.
Honestly, you have the worst track record on the board (even worse than a certain deflationista in academic clothing). Should you be baiting?
I don’t claim to have a track record, nor do I claim to know whether inflation or deflation is more likely over the next ten years, though I have my hunches.
I do like to take note when particular asset classes take a dive, but this is admittedly a rear-view mirror exercise. I leave forecasting to the self-proclaimed experts, like you.
–
“Today Jas says ‘100 oil will never last, it’s going to 10′.”
A verifiable lie. And so are all the rest of your accusations. Get a life!
Jas
What happens if the tits are fake?
there might be a little exaggeration in this story, but the ending is the same and it pisses me off, so i have to share it. a client of ours bought a beach house on the central coast of CA in 2005 and paid 1.2m for it. and he found out that it is only worth around 600k now, so he has decided to walk away from it. i know for a fact that this guy has the money to pay for this house, so i dont understand why he would choose to stick the bank with the loss? it was his decision to buy it, not the banks. i dont feel its fair to us, the public to foot this bill, and there will be a much worse ending to this housing mess if people who can afford the homes continue to walk on their obligations. why in the hell did the IRS take away the penalties for these people?
Wow. You really don’t understand? Take a look around. We live in a culture of Cheating. It’s taught to us from the moment we are born. You do what you can get away with. There is no “right” or “wrong,” only “getting caught.”
Your friend is only playing the game the way Wall St. plays it. Of course we all lose, in the long run. But don’t expect Americans to “get it” anytime soon. This country is so far in denial about so many things that, sad to say, we deserve whatever is coming.
Your friend is only playing the game the way Wall St. plays it.
Exactly right.
Which begs the question: Why should the individual be held to a different standard than our vaunted financial gurus, our hedge fund heroes, our corporate overlords?
It’s the entire system that needs an overhaul.
Because his IDIOT EMPLOYER wont fire him……but have him borrow $50 from petty cash till payday, and all hell breaks loose.
————————————————————–
so i dont understand why he would choose to stick the bank with the loss?
Let’s see. We have steroids, check. Plastic surgery, check. Adultery, check. Padded resumes, check. Online Avatars, check. Liar loans, check. Offshore accounts, check. Let’s try cheating Death.
How many people will vote for tax cuts because they “hate big goobermint”, watch budget deficits skyrocket and stick it to the next generation? And firmly tell themselves that they are doing the right thing?
People for the most part are ignorant, selfish thieves.
hoz,
Bloomberg reported the U.S. government asked Japan not to sell their Fred and Fannie bonds. Why?
Thanks hoz.
I can take that one.
If the Asian nations pull out the stakes in F&F debt, the price of such debt would fall, mirrored by an increase in mortgage rates. The housing price crash would morph from overdrive into warp speed.
Thank you PB.
BTW, a there have been lingering concerns about the Asian creditors pulling out their stakes in U.S. govt debt since at least the late 1980s, when this book was published:
The Great Depression of 1990 (Mass Market Paperback)
by Ravi Batra (Author)
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Batra’s mistake may have been trying to predict an event AND its timing. Great prognosticators usually avoid that trap. He way certainly wrong about the timing, but…
Realistically, the Asians are not stupid enough to shoot themselves in the foot as a group, although individuals and companies have done so; see “Traders, Guns, and Money”.
But the guy had a point.
“Hierarchical institutions are like giant bulldozers — obedient to the whim of any fool who takes the controls.”
Edward Abbey
–
http://www.cnbc.com/id/26656750/site/14081545/
BTW, this guy Martin Hennecke is good. I have listened to him for couple of years on CNBC-World broadcast from Asia. Didn’t some crank warn about depression in the US as a result of debt crisis? Actually, the extent of depression can be forecast based on the abuse of credit and it turns out that Greater Depression has been fully baked in the US econ-cake.
The USG, the Fed and the banking and finance Crooks have been in bed with each other for years. I am sure that even the stupid among Americans can now see this.
Jas
-x-x-x-x-x-x-x-x-x-x-x-
Bailouts Will Push US into Depression: Manager
The end result of the global economic slowdown may be the U.S.
announcing national bankruptcy as the government cannot afford the
bailouts that it promised and the market will not bail out the
government, Martin Hennecke, senior manager of private clients at Tyche, told CNBC on Thursday.
“We expect a depression in the United States. We expect a depression, very possibly, also in Europe,” Hennecke said on “Worldwide Exchange.”
…
“The USG, the Fed and the banking and finance Crooks have been in bed with each other for years. I am sure that even the stupid among Americans can now see this.”
I have my doubts. There’s still a lot of delusion among some, purposeful or otherwise. If a depression or collapse does happen, I expect they’ll scapegoat the wrong parties rather than belatedly acknowledging what has happened and why. There may be some truly inventive rationalizations to keep from having to acknowledge they were wrong.
“Battered economy” syndrome?
doom and gloomerism seems a bit over-bought at the momment.
Is it Armagedoning real good-again?
I would have to say, the ones I keep getting crap email from (from old hs friends) are clueless.
And quite a few of the ones in Dallas too are clueless.
And frankly, they dont’ care as long as the tv works, and the fem heligunslinger gets adored.
You left out the part where he said it will be a hyperinflationary depression, and he likes China, which you say is a dead market. He also likes PMs and says don’t go long the USD, so basically he takes the opposite of your deflationary positions.
Shhhh!
Don’t confuse the issue with the facts. lol
Some Limitations of Jas deflation thesis are:
Base rate fallacy — ignoring available statistical data in favor of particulars.
Conservatism bias — the tendency to ignore the consequence of new evidence. (Related to base rate fallacy.)
Expectation bias — the tendency for experimenters to believe, certify, and publish data that agrees with their expectations for the outcome of an experiment, and to disbelieve, discard, or downgrade the corresponding weightings for data that appears to conflict with those expectations
Focusing effect — prediction bias occurring when people place too much importance on one aspect of an event; causes error in accurately predicting the utility of a future outcome.
and about a dozen more biases.
Hoz, what are YOUR predictions.
A problem that I have with the base-rate-fallacy is that so much available statistical data is itself biased that it is hard to decide what to use to draw any inferences.
The only future economic event I would bet money on is increasing unemployment/underemployment, i.e wage deflation.
I feel strongly that we’ll see very high inflation continuing too
I predict 96% of all incumbents will be reelected. I predict Approval ratings for congress will be less than 20%.
Inflation with about a 20% chance for hyperinflation (defined as 100% inflation over 5 years)
America is for sale, a lot of it will be sold to foreign investors. Just as Budweiser was sold to InBev,a lot more people will be screaming “We don’t want another American icon turned over to a foreign company; we want the motto to remain…”
Consequences: If the US government stops foreign buyers, the foreign buyers will no longer buy treasuries. Blackmail, sure. Realistic, very.
Everybody learned from the Japanese purchasing in the US in the 1980s. Don’t pay up.
vote smart.
vote gridlock.
OK boys and girls,
this is Resolution Trust Corp. part deaux weekend.
Looks like a Merril, Lehman, BAC, WM, WB, WFC, C?
Feds sitting this one out.
Hoz, you are a good cynic. And probably right.
But I was sure hoping we could get away with selling the Asians a bunch of golf courses and useless downtown “filing cabinets for people” again this time. Hoping that the Chinese are as dumb as the Japanese were last time. But as you say, they’re on to that game this time. Interesting question: what is left to sell that has any long-term value, other than land and associated resources?
I’m thinking political concessions this time.
can we throw paulson and bernake in that catagory please?
In my neighborhood gas is now up almost $1 in 24 hours.
Gov. Mike Easley today activated the state’s law against price gouging as anxious drivers packed gas stations, worried about rising gas prices related to Hurricane Ike.
Already, some stations in the Triangle were charging more than $4 a gallon for regular unleaded, far above what had been an average price of $3.69 in the region. The Handee Hugo on Western Boulevard near Avent Ferry Road in Raleigh was charging $4.89 a gallon
http://www.newsobserver.com/business/story/1216129.html
A headline from Marketwatch:
“Down at the gas station: Retail sales suffer an unexpected August decline as pump prices plummet.”
Prices sure aren’t “plummeting” in my neck of the woods. We’re still right around $4 per gallon. What constitutes “plummeting”?
What constitutes “plummeting”? Sorry, that was last month. Now the term is “skyrocketing”.
Somehow I managed to post this in yesterday’s thread, so I am reposting it here…
Today on the Missoulian’s business page was a national map showing how much various housing markets are overvalued, according to Global Insight and National City. Missoula is on there in the “moderately overvalued—15-35%.” category. I about dropped my teeth — not b/c of the rating but b/c it was in the Missoulian. No commentary, of course. This is a stock page they buy from the AP. It’s called “Money and Markets.” It runs in many small and medium town papers.
You can go to the Global Insight home page to read the full report. You have to have it emailed to you, but it’s free. http://www.globalinsight.com/Highlight/HighlightDetail2350.htm Maybe Ben’s already posted this. I don’t know. I’ve been away for awhile.
According to the detailed report, Missoula is 20% overvalued and 26th most overvalued in the nation (of 330 metro areas). So much for the realtor mantra of “we will not suffer as much as other areas.”
Most of the areas that are more overvalued than Missoula are in the West:
Bend, OR—overvalued 47%
St. George, UT—overvalued 36%
Portland, OR — overvalued 35%
Bellingham, WA — 32%
Boise, ID—overvalued 25%
Spokane, WA—overvalued 24%
Grand Junction, CO—overvalued 23%
Seattle is just below Missoula, overvalued 19%.
These valuations are based on OFHEO data plus interest rates, household incomes, etc.
One thing I find crazy about this report is that Global Insight doesn’t predict house price declines equal to overvaluation. On p. 2 of the report, they say that markets with >35% overvaluation will suffer price declines of 10%. What’s that about? Does it make any sense to you?
Some of the repercussions from last weekends F & F Sunday Show.
Indices affected by Fannie Mae/Freddie Mac Credit Events
http://www.markit.com/information/products/category/indices/cdx/index_news.html
Settlement is on going.
It seems that all bad news is unexpected these days. Given the artificial bump in consumption expenditures due to one-time stimulus, how could this news possibly be unexpected?
US retail sales fall unexpectedly
By Daniel Pimlott in New York
Published: September 12 2008 15:15 | Last updated: September 12 2008 15:15
US retail sales stores fell last month for the second month in a row as the boost from tax rebates slipped away and a sharp decline in energy prices failed to encourage consumers to spend on other goods, data from the Commerce Department showed on Friday.
…
“Retail sales declined for the second consecutive month in August, as the positive benefits from the fiscal stimulus rebates faded quickly into the sunset,” said Brian Bethune, an economist at Global Insight.
Gas shortages in the southeast now. Lines 30 deep at stations, and they are rationing. Gas is over $5 in my town, and rising. Governors of several states are threatening price gougers. Doesn’t seem to help.
Over 5?? That’s insane. It’s gone up about 20 cents here but that’s it. And no lines.
Lines are 6 deep tonight at the QT near my house in Atlanta, with rumors that some stations have already run out.
Well, it looks as if we will see a significant reduction in for sale housing inventory in Texas–this storm surge and wave action is going to tear those shacks off at the foundation piers.
Most of the RE on that coast will be piled up as splintered wood at the edge of Houston by morning.
My sympathies to those in harms way. In the aftermath of all these hurricanes, I have to ask, is there any reason why these coastal areas shouldn’t be off limits to residential development?