Bits Bucket For September 19, 2008
Please visit the HBB Forum. Post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
September 19, 2008
500 Comments »
Trackback responses to this post
- The Housing Bubble Blog
- The Housing Bubble Blog
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
November 2024 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
Remember years ago when Jim Rogers said, If you want your children to get ahead in business teach them Mandarin Chinese, not Spanish.
Morgan Stanley Said to Be in Talks With China’s CIC (Update2)
By Christine Harper
Sept. 18 (Bloomberg) — Morgan Stanley, the second-biggest independent U.S. securities firm, may sell a larger stake to China Investment Corp. and is in talks about a possible merger with Wachovia Corp., a person familiar with the matter said.
China’s state-controlled fund may buy as much as 49 percent of the New York-based investment bank, said the person, who declined to be identified because the talks aren’t public and may end in no agreement. Morgan Stanley resumed its decline on the New York Stock Exchange, falling as much as 22 percent.
http://www.bloomberg.com/apps/news?pid=20601087&sid=ao0BD9Zuhy3E&refer=home
Wonder if this deal is dead now that they have all been saved? I am sure the price went up a lot
RE: Jim Rogers
Jim Rogers has been on top of this debacle from the git-go.
USA, no more NUMBA #1 GI!
Anyone got $200 Billion I can “borrow”? Come on Americka!
So holy friggin crap - my E*trade balance dropped by 10% overnight while no trading was going on!. I am doing some shorting (and hating life right now); mainly homebuilders and such - what I’d call “long-term shorting” since I think they’re still way overvalued.
Is this perhaps a result of the rumored SEC “shorting ban”? Surely that wouldn’t apply to existing shorts would it? There’s no indication that anything’s changed, e.g. no shorts appeared to be canceled or anything - just the balance is 10% lower. I took about an 8% hit yesterday due to the insane rise, but I recorded the balance at the end of the day, and then went to look this morning (actually this evening - I’m in Shanghai), and it’s now down another 10%!!
Guess I got Shanghaid!
Anyone else see anything like this?
Rumor? What rumor?
I guess the stock market is going to always go up from here on out. Meanwhile, I think I smell the smoke from a thousand burning hedges. Buy stocks early today or get priced out forever.
SEC imposes emergency ban on short-selling
Temporary move stops routine practice of betting against company stocks
updated 10 minutes ago
WASHINGTON - The Securities and Exchange Commission took the dramatic step early Friday of temporarily banning the routine practice of betting against company stocks.
The move, announced on the agency’s Web site, may well be unprecedented and a reflection of regulators’ concern about the widening scope of the financial crisis as entreaties come from all quarters to stem a swarm of short-selling.
Separately, Asian and European stock markets soared Friday following news of a possible U.S. government plan to rescue banks from risky mortgage debt.
“Sept. 18: Wall Street ended the day Thursday with a monster rally after rumors of a government plan to rescue troubled financial institutions similar to an effort that succeeded in the 1980s. CNBC’s Carl Quintanilla reports. ”
Depends on your definition of “succeeded” I guess.
I just saw $hrub on C-Span, addressing the nation regarding the “crisis”. As usual, he had to slip a gaffe into his speech. If you so much as DARE to short the financials, you will be caught and “persecuted”.
I heard that too and it made me cringe. I don’t even think he knows the difference.
It IS a persecution! Packman and others should have proper access to FREE markets, which would at least include the right to short bad companies.
Freudian slip?
Stars End
We’ve been “persecuted”. He should be “prosecuted”.
I just read the entire bits buckets and can not believe that there is no discussion on RTC 2 (or whatever name you prefer)
Seems to me this and not the short selling is THE news.
Your Darn right RTC 2 is the news . Big inflation price to pay and big tax to pay to save the gamblers and greedy pig people and criminals . This is for the good of the people ,according to Paulson .
Yet another acronym to throw into the stone soup?
The Creature from Jekyll Island has morphed into Galactus.
Eat my shorts
Published: September 18 2008 09:23 | Last updated: September 18 2008 23:00
A terrible fury has been unleashed. Nothing seems able to halt it. World’s largest insurer? Smash it down. The globe’s most prestigious investment banks? Consume them. Imagine something like Galactus, the terrifying Marvel comic book monster that roamed the galaxy devouring worlds. What is mighty enough to stop it? The answer is: itself.
The villains are supposedly the short-sellers. They short a bank stock, the price falls, the bank’s credit is downgraded, forcing it to sell assets at fire sale prices. This weakens its capital, the stock falls further, and so on. In practice, short-sellers are shorting anything with leverage. Yet by doing this, they also ultimately short themselves. This is Galactus’s weakness: insatiability.
In Silver Surfer mythology, Galactus is an insatiable destructive force of nature that is just as important to the universe as the creative force.
Rather than being a necessary part of a healthy market, there is no economic benefit to short selling other than turning stock markets into casinos for individual investors.
Also, it provides a huge advantage to those practicing insider trading, the vast majority of whom never get caught.
In Silver Surfer mythology, Galactus is an insatiable destructive force of nature that is just as important to the universe as the creative force.
Similarly, the alleged Freemarketeers on Wall St. tend to forget that destruction is an inherent, necessary component of the philosophy they profess to believe. They want all upside, no downside. (Or perhaps no real downside, only faux moments that enable them to fleece the rubes.)
Why is that?
“…there is no economic benefit to short selling…”
Where do you get this stuff? Just making it up on the fly?
Where do you get this stuff? Just making it up on the fly?
I guess I haven’t been indoctinated enough into thinking that gambling on stock prices, as opposed to actually investing capital in businesses are equally legitimate beneficial economic activities.
More KoolAid, please?
“I guess I haven’t been indoctinated enough into thinking that gambling on stock prices, as opposed to actually investing capital in businesses are equally legitimate beneficial economic activities.”
When the market drops 1200 points one day, absent the usual “short-covering rally”, you might have a different opinion.
When the market drops 1200 points one day, absent the usual “short-covering rally”, you might have a different opinion.
————————
Exactly, Lionel.
NSO,
Short sellers are what balance the bulls/long-only traders.
If you’re long-only, you should love shorts, as they bring prices down for you to buy more shares at a lower price. After you get in (hopefully), they are captive buyers, forcing the stock back up — IF the company is viable and has good fundamentals.
Short sellers cannot and do not trash companies, as the longs would get in before they could do so (again, IF the company were truly viable).
Short traders provide a floor for a stock price (except for bankruptcies), because they have to buy to complete their trade.
complete = close-out
If you have the proverbial “balls of steel”, you should ride it out. The fundamentals are on your side.
Dangerous squeeze coming.
This is going to end very badly.
Do you have any sense about how long the short covering rally will last before the inevitable big crash? Are we talking about a matter of days, weeks or months here?
Just trying to figure out how to hedge my bets…
The sappers have laid the charges in the mindfield and she’s ready to blow.
Give it 2 weeks @ the most…
Weren’t you saying just yesterday it would be today?
Comment by aladinsane
2008-09-18 14:09:51
Black Friday tomorrow…
I didn’t know about the jury-rigged nature of the 799 shortstocks until today.
Things change.
True, and I think we don’t know how they’ll jury rig things over the next two weeks, either! I sold my stocks over a year ago and this latest play sure has me wanting to jump back in…but is it just a head fake?
I have no idea what all’s up their sleeve, but I tend to think they can take on basically whatever debt they want and just worry about “how much a month”, not the principle. Doing that, they can keep the stock market up a long time, can’t they?
I sold my stocks 18 months ago and am content to watch the proceedings from far, far away.
Right and wrong are indistinguishable on Wall Street, right now.
Conveniently, the night before options expire.
This is super geeky and technical so bail out now if you’re not interested.
The most important thing you have to understand is the concept of liquidity providers v. liquidity takers. People who are putting up their own capital (market-makers, speculators) are liquidity providers. Those who need to get their order finished are liquidity takers.
The most important thing about a short is that it provides an automatic floor on the market of any given stock. Why?
A short-seller is guaranteed to have to buy back the stock at some point. They have to and so they will bid again and provide a floor wherever they deem it necessary to bid. Absent this, there is no reason there should be any bid at all.
This massive “no bid” gap down is very well known to all market-makers. It’s poo-inducingly scary.
In addition, any temporary rule either becomes permanent, or the pent-up action gets postponed to the day after it’s lifted. Oct 3rd is likely to be a super-nasty. You can predict that safely today. Everyone will rush to short-sell before they change their minds one more time.
The only thing this has done is increase the spreads in put options. Why? People will buy the puts, and the options market-makers will hedge via short-selling (they are exempt), exercise the option, and instead of settling in cash, the options owners will take over the short-position.
From a practical perspective, you’ve just raised the cost and changed nothing. Those who are already short and willing to live through the mother-of-all-squeezes will do so. Those who want to will find a workaround (read previous paragraph again.)
The fundamentals haven’t changed. Changing a technical rule about markets doesn’t change the valuation of the companies.
Historically, there is plenty of precedent here.
China banned short-selling and the shares have dropped 65%. Same for the SEC before the GD.
If any of this ever worked, no company would ever go bankrupt. However, either a company is solvent or it’s not. There is no way to be half-pregnant here.
Valuation doesn’t depend on silly technical rules.
When the massive gap down occurs, and it’s baked-into-the-cake now with the asinine rules, try not to act too surprised. They have guaranteed a hard landing.
Anybody that bought Sept. puts yesterday is going to get crushed. Anybody that bought Sept. calls is going to make a fortune. Another transfer of wealth to those with inside information on what this Golem Sachs run government was going to do. I have no pride today to call myself an American. We have become the dumbest nation in history. “Stop the foreclosure crisis,” is the war cry. Oy.
Comeuppance see me some time.
Anybody else find this latest Paulson fix just a little far-fetched?
RE: I have no pride today to call myself an American.
NYCBoy..
-I have been thinking exactly the same thing, but I couldn’t resign myself to a public confession.
My best friend spoke the same line during a telephone conversation the other night.
So, my hats off to you for havin’ the ballz to say what’s, I’m sure, in many people’s minds these days.
“Historically, there is plenty of precedent here.
China banned short-selling and the shares have dropped 65%. Same for the SEC before the GD.
If any of this ever worked, no company would ever go bankrupt. However, either a company is solvent or it’s not. There is no way to be half-pregnant here.”
Excellent information — thanks for all of it.
I find it far-fetched. I feel like I just entered the Twilight Zone. Paulson is crazier than a sh*thouse rat, IMO, and this proves it.
Thanks FPSS.
Faster-
Thanks for that detailed explanation. I had to read it twice to make sense of it (cursed average intelligence!) but it was very helpful.
Back to lurking–
Forget geeky, FPSS. I read it over several times and then outloud to my husband. Then I saved it on my harddrive. Thanks for helping us out w/the details.
Thanks for the info FPSS.
So -
- Now magically when I get back from dinner, as the market opens (but before the 20-minute lag) my balance is back up exactly where it was - whew*.
*That being said, I see from the real-time ticker that one of my primary shorts - PHM, is (or was now) up 20%! Now it’s up 16%. So I stand to get screwed today apparently.
I do have the ballz, but I might not have the funds. I never thought that valuations would become this detached from reality. Amazing. This truly is the mother of all short squeezes. Not sure if I can ride it out or not - we’ll see. Being 180 degrees around the world doesn’t help.
Gracias.
It helps to understand very technical stuff.
Of course, I’m one of the shorts, and since this is not the first sleepless night I’ve had in my life, some experience in understanding how things work goes a long way to allaying the panic.
If you look at XLF (financials ETF), it’s up about 13% but the S&P is up only about 4%. This gap is going to converge as the market digests that this is not a panacea that is being portrayed.
My mark-to-market losses are poo-inducing from the highs of yesterday but I have a great degree of confidence in my bets and no chance of being “forced” to cover.
Age sometimes brings wisdom and perspective. I’m still waiting for the wisdom.
“When the massive gap down occurs, and it’s baked-into-the-cake now with the asinine rules, try not to act too surprised. They have guaranteed a hard landing.”
The president who would become a king?
This is super geeky and technical so bail out now if you’re not interested …
… Valuation doesn’t depend on silly technical rules.
When the massive gap down occurs, and it’s baked-into-the-cake now with the asinine rules, try not to act too surprised. They have guaranteed a hard landing.
Actually, F. Pussycat S.S., it was highly readable and makes a lot of sense. Thanks for the explanation.
The danger here is ’ssshrubery’s administration has a storied history of creating bigger messes to cover up other messes.
Dropping a few tactical nukes on Iran would trump any financial news, wouldn’t it?
How about elections being cancelled because of the “crisis”. That wouldn’t surprise me in the least.
“How about elections being cancelled because of the “crisis”. That wouldn’t surprise me in the least.”
That would be… unprecedented. But then again - we seem to have lots of recent precedents of unprecedented things.
Or should I say unpresidented.
And sure enough, the gap is now down from 9% to about 6.9% at 11am.
In the presence of shorts, it would’ve been much much faster but we’ll take what we can get.
These technical rules change the rates of things not the things themselves. Your perception is disturbed because you’re used to them happening at some rate and it’s much much slower. People tend to panic at this but not experienced hands.
“It’s poo-inducingly scary.”
Hee, hee, hee. You said “poo.” Oops, so did I.
EO 51
Or Executive Order 51.
I believe it was 51. However, the order was put into place by W and this election can be canceled.
I fully expect a W surprise in Iran soon. October is coming up and it usually has a surprise.
We live in interesting times. Isn’t that an old Chinese curse? “May you live in inertesting times.” Something like that at any rate…..
Stars End
Oops! That should be “May you live in INTERESTING times.” Sorry! Trainer this morning AND no caffeine yet. I am a mess!
Stars End
How about elections being cancelled because of the “crisis”. That wouldn’t surprise me in the least.
——————-
Very interesting that you mention this, Palmetto. I had a very strong feeling this morning that something like this would happen.
Martial law, the whole bit.
Let’s hope the heck not.
I’m afraid that banning shorts is going to become a tool in the Treasury’s tool box. They will pull it out whenever they want to.
I expect this to be used again on December 29th, just to make sure everyone has a good year end.
Any tool that is used systematically gets neutralized because the participants start expecting it.
The valuation of a company doesn’t depend on silly technical rules like shorting. It just is.
I see this is the government decided to declare down markets illegal. Obviously reality will just get in line and we’ll have economic growth for all time now. An pancakes for all!
Can one still short a short stack of pancakes?
Add some butter and maple syrup and I’ll help short the stack of pancakes
If I short XYZ stock, I get the cash to invest (- the terms varies between each customer and their clearing house or broker). Most security houses such as GS or MER or MS do not pay their customers for shorting stock. As a result, this is free money to these trading houses.
These moves place the security houses at greater risk of failure. No source for cheap funds.
Don’t forget prime-brokerage fees, and all other stuff associated with that.
There are many many “unintended consequences” here not the least of which is that the half the options market-makers and “structured products” people probably got whacked a little today.
I’m going to get another durometer reading on my sack shortly.
I agree puss, this will not end nicely.
Mike
The jump in premarket prices from yesterday’s close especially with some of the financials is pretty incredible IMHO. Even some of the smaller regional banks are up 25-30% in premarket.
Mother-of-all-squeezes.
Yep, and I ain’t going anywhere near it.
Alad, take note, lol.
The ban is limited to financial firms. Walk away from this banana market. A monumental crash is coming! Long positions have no way of hedging. They will sell into this rally and walk away. In other words, a large group of buyers will disappear. The cabal is just buying time for its friends. America is beginning to like Argentina. This will not end well.
“The cabal is just buying time for its friends. America is beginning to like Argentina. This will not end well.”
+1
I dumped a couple of positions (poisons?) and won’t be coming back. And I don’t really believe in shorting anyway.
it’s official now, the next bubble will be in financial stocks. The FED can start selling unlimited amounts of new stock for fannie, freddy and all the other junk because prices can only go up. This is the most brilliant crisis solution ever!
Dutch stock exchange up 8% today, EU financial stock index up nearly 20%. Yes, shorting is now illegal in Europe too (probably all over the anglosaxon empire).
see you in Weimar
Hey nhz-
Was in Europe last week, took the train from Frankfurt to Brussels, did some touring, then another train to Amsterdam.
What has happened to Rotterdam? Spent some time there back in the early 90’s setting up a European Repair Centre for Rosemount Systems (now Emerson Process Management).
I saw so many mosques (and some truly magnificant ones that would rival the evangelical Christian church in Anaheim CA), that I thought I was in Damascus or Mecca, not Rotterdam.
I do remember seeing a great many muslim looking (apologize for the stereotyping), folks during my stay in Rotterdam in the 90s.
We should have had a HBB meeting near Central Station in Amsterdam last Saturday afternoon.
Oh well, maybe next time.
“Anyone else see anything like this?”
I’ve noticed on my TDAmeritrade Act that share prices have been getting adjusted a couple hours after close. It used to be that they worked through the backlog within about 10 minutes. Not sure what’s going on there.
On a side note, for the last few days I’ve been getting kicked off my account every several minutes, timing out my session, suposedly “for my security”. The time out is supposed to be 1 hour.
In 2001-2, Citibank amongst other banks in Argentina, didn’t allow customers access to their money.
If they saw no problem doing it there, why would they have a problem doing it here?
See my (unfortunately double) post below about the same issue. The TD CEO was on CNBC this morning and I didn’t hear anything about the issues his company as having with its website. I only watched for a few minutes. I only use it for my small “its OK to lose this money” trades but was very frustrated and would be really pi***** off if I had a bunch of money at stake. Not being able to momentum trade is a critical, almost fatal handicap these days.
I had major problems with TD Ameritrade the past couple of days. No doubt, their servers are getting slammed, but it’s certainly not in their customers’ best interests to have th system down right at the time they most need to trade.
Lost a few hundred dollars (at least) because of the site delays. Like running an old Packard-Bell 286 with a dial-up connection.
I have a call option on HL (silver mining) that shot up the other day. Optionsxpress said I was up right out of the gate. 5 minutes later after the stock was still rising it said I was in the hole? WTF? Now it is up even more and my account says I’ve made $10. Something’s got to give. I think this latest move will give the small guy the push he needs to pack it up and go home.
Is this globally-engineered “kill-the-shorts” rally likely to continue through U.S. election season? Happy days are here again for McCain and Palin.
Short-selling terrorists will be hunted down and hung from lamposts. Anyone who says stocks can go down will be arrested. Anyone who does not buy stocks must be a terrorist. Stocks will now rise to infinity. God bless free markets.
Fed Uber Alles.
yes, I think one should teach the childern old German now, instead of Chinese …
And paying high taxes is patriotic.
If you don’t want to pay high taxes you don’t love the fatherland and therefore must be an enemy of the state.
- Joe Biden
I’m no fan of Biden, but did he really say any of this?
No, when he was being interviewed by Katie Couric the other day, when she pointed out that families making more than $250K would have higher taxes, he implied that they might need to ‘man up’ and do thier duty - and not expect the cushy deal they’d got from the Dubbya admin for the last 8 years…
here’s a youtube:
http://www.youtube.com/watch?v=ArJkzRYffec
Of course, I’m on the other side of the scale from az-lender - just slide the knob about half-way between our two points of view, and you’ll probably get an unbiased response
He said ‘they’ were going to raise taxes on the “rich” it’s the patriotic thing to do.
Patriotism is the passion of fools and the most foolish of passions.
- Arthur Schopenhauer
Funny, I thought patriotism was always something one did voluntarily, not under coercion.
I remember a couple of years ago getting sick to my stomache when the term “homeland” first started popping up in government news conferences and press releases. Americans have never referred to America as their homeland, the closest thing is the Midwest being termed the “Heartland”.
I guess it was to much effort to get some marketing firm to come up with some new terminology for the old Nazi propoganda releases. It’s sickening how the majority of people can be manipulated and led around by their nose because they never learned history. Therefore they are doomed to repeat it, but may very well drag the rest of us through the cataclysm with them.
I include both major political parties in the above statement. I see no significant difference in actions between the parties, just their retoric. But they don’t follow through on what they say, and their “anger” towards each other seems fiegned. But they are doing a wonderful job stiring the lemmings up into a froth of hysteria against each other. Irrational mobs are much easier to control than calm rational assemblies.
Very VERY well put. I too fell almost horrified when they call America a “homeland.” That’s a sickening technique used to stir up emotions rather than proceed on a rational basis.
It’s the kind of thing dictators do, and it’s really scary. Can we please make it stop?
Even side-stepping the literal policy implications of the etymology, that particular Rovian/Goebblelin phrase pretty much set the tone for the massive propaganda fest that followed. I was always disheartened at how quickly the murkin public lapped it up…was everyone in this country SO ill-educated that the historical similarity didn’t push a button or two?
I got my answer the night after the Space Shuttle blew up over Palestine, TX.
RE: It’s sickening how the majority of people can be manipulated and led around by their nose because they never learned history.
Ken Burns was asked what the motivation behind his “WAR” documentary series. First was to pay tribute
to the WW II vets who have dying at a rate of 1000 per day.
Second-to provide knowledge after reading that
in a national history test of high schoolers 90% gave the answer that it was the Americans and “GERMANS” allied together against the Russians in WW II.
Your public education dollars in action.
If this doesn’t work then they will go after the root of the problem - falling home prices and BB like this one.
Indeed. There is nothing preventing them from simply saying “housing must cost the buyer 5x their income” or some idiotic thing. It won’t “work” but it can create a surreal nation with a collapsed financial system with countless, squatter-filled, worthless houses that are still somehow “selling” at insanely high prices. Anything to keep the rich rich!
They did this trick successfully with the wedding ring - salary ratio
Short People got no reason
Short People got no reason
Short People got no reason
To trade
They got little chance
And little life
And Bazooka Hank walks around
Tellin’ great big lies
They got little Bernanke
And not so tiny little deceit
They wear concrete overshoes
On their nasty little feet
Well, I don’t want no Short People
Don’t want no Short People
Don’t want no Short People
Round here
http://www.youtube.com/watch?v=lt3sH5J4cxs
I used to tease my vertically challenged sister
at times singing Short People by Randy Newman
799 stocks are now short verboten…
(our lackey government released this info @ 2:00 am est today)
The powers that be have run out of options, and it shows.
Within a fortnight there will be an immense financial collapse, the proportions of which will be truly shocking~
I hope you have all made plans to best avoid the carnage…
“The fortnight is a unit of time equivalent to fourteen days.”
I hope you are speaking figuratively, not literally.
I’m waiting for them to announce the first Five Year Plan.
Yep.
Maybe we should have listened to Hillary Kramer (sp?). She shows up every other Wednesday or so on Nightly Business Report (PBS). For months, she’s been preditcting that there would be a “total capitulation” on Wall Street, sometime in the fall. And then she intends to buy lots just after that.
799 stocks can’t be shorted, and we the public own 79.9% of a private company now, AIG.
Coincidence?
And, a chinese company at that!
I keep hearing that awful words “A FREAKIN Trillion Dollars”
Like if anyone Like Biden or obama, or McCrane, ever read this blog it wouldn’t come as a surprise.
Deflation is not yet ubiquitous. Some book prices are highly deflated, while others are holding their value. Compare:
The Creature from Jekyll Island: A Second Look at the Federal Reserve (Paperback)
by G. Edward Griffin (Author)
45 Reviews
5 star: (34)
4 star: (8)
3 star: (0)
2 star: (0)
1 star: (3)
› 17 used & new available from $24.45
Also Available in: List Price: Our Price: Other Offers:
Hardcover (4th) 3 used & new from $39.95
———————————————————————————-
Why the Real Estate Boom Will Not Bust - And How You Can Profit from It: How to Build Wealth in Today’s Expanding Real Estate Market (Paperback)
by David Lereah (Author)
46 Reviews
5 star: (11)
4 star: (4)
3 star: (0)
2 star: (1)
1 star: (30)
——————————————————————————–
List Price: $12.95
Price: $11.65 & eligible for FREE Super Saver Shipping on orders over $25. Details
You Save: $1.30 (10%)
Special Offers Available
Only 3 left in stock–order soon (more on the way).
› 26 used & new available from $2.95
Sounds about right. Comedy frequently doesn’t age well, especially the type that Lereah writes. It’s just the same joke over and over.
“The Creature from Jekyll Island”….a true masterpiece. Time for a reread!
I’d pay $100 for that gem.
Re: Creature from Jekyll Island, I think I’m the next one to get it from my library system. Been waiting since April, 17 more people waiting for it after me. Thinking about buying it, since it’s out of print, but spending money on other stuff right now.
I tried to buy it twice through Amazon and Barnes & Noble. Was on back-order for months, and they eventually cancelled the orders both times saying they couldn’t get it.
I ordered a copy from somewhere other than Amazon…. so I know it is available new/paperback. Unfortunately I have no idea where I bought it, other than online at some political site or other…
Found it!……..RealityZone.com
Come on everybody - wake up!! Come and celebrate the most shameful day in what once was Amercia. Get ready for the big DO-OVER…
What are you talking about? All I see is everything falling apart and a lot of talk from Washington. These guys are broke. The citizens are borrowers, not “taxpayers.” The most shameful day is election day, every year, when this system is perpetuated. And most of the posters here want to argue about the two parties.
Don’t tell me to wake up; I tried to warn people this was coming. Meanwhile, I got a business to run…
“And most of the posters here want to argue about the two parties.”
Not me. I’m a founding member of the, “I don’t care to every buy again” club and the “I think partisans are mindless drones” club. Don’t lump me in with Exeter and Blano.
Lol, I don’t think I’m that bad, NYCB!!! Just get annoyed on occasion like most. No biggie.
All this financial crap lately just proved nobody in Washington represents me either.
I’m not saying you’re a good guy or a bad guy. I’m just saying you’re a partisan. But I do think partisanship and closed-mindedness go hand in hand.
“It is only about things that do not interest one that one can give really unbiased opinions, which is no doubt the reason why an unbiased opinion is always valueless.”
Oscar Wilde (1854 - 1900)
There is no right answer. There is only the answer that best represents the things I value.
I agree with NYCityBoy. Both sides are so rotten, the only thing left to do is bore our way through the middle, and out in the open air. Meanwhile, the obsequious are flaunting their colors proudly, unaware that the rot each attributes to “the other side” is systemic.
I’ve always thought that extended periods of relative comfort and prosperity (sustainable or not) lead to dumbing-down of elected officials. Who’s REALLY paying attention (present company not withstanding) when things are going well. It is adversity that really sharpens the attention of the public. Complete manifestation of the current financial circumstances would trigger just such an event, in my opinion. Candidates would be asked real questions and real answers would be expected. Intellect is much more important under these circumstances. What the gov’t has done today is delay their own accountability. They will not have to provide real answers to the masses as long as J6P’s money market account is solvent. It’s the fear of being exposed as mental weaklings that has motivated this action… again IMHO.
I had a girl come to my door asking for donations for the Dems. I told her I hate both parties. Fiercely. You should have seen the look on her mug.
I hope this opens everyones eyes to the fact we are no longer a two party system and votes these morons out of office. The only thing that saddens me is, we don’t have much to pick from.
“None of the above” is a “vote”, too. Why play into the charade and give it legitimacy? The carnies are running the show. Pass the tequila . . . .
And there is a reason you don’t have much to pick from. The only ones you have to pick from are the ones who could get enough money to make a real run in the first place. And the only ones who could get enough money are the ones who are willing to do the bidding of the folks with money.
Both sides, democrats and republicans get money from the same group of super-rich. That’s why there is so little difference between them.
As long as private money is financing campaigns, we will never have any real choices. Representative democracy is just a facade in this country. It is really an oligarchy and always has been. It has been okay in the past because of our enormous natural resources and technological advantages. As those things disappear, so will our standard of living.
So true, Jon…
Bravo. That, together with elections sans machines easily hacked by 5th graders, would improve our world immeasurably.
You did warn everyone
I found this blog years ago when home prices were rapidly increasing in South Florida at the time I was looking for a four bedroom house for imagine my family of 5. I read learned sold my small home in 05, rented a 4 bed where I still live today. Nothing has changed for me, I am going to work taking care of my kids and waiting for a home I can afford to buy for my family to live in.
don’t think for a minute it is any better in a system with multiple political parties. Just watch Europe, the kleptocrats that get elected are all the same (except for a few exceptions to the rule, but they exist in the US just like in the EU multi-party systems and have zero influence on actual decision making).
You’re not making us feel any better.
I appreciate your comments, nhz, but I gotta think that it’s a little bit better that our system over here. I know, grass is greener, but still…
When I’ve visited the Netherlands before, I see the clean streets, the well-dressed (no sweatpants and crocs!) and slender (not obese) people biking (biking!) to their jobs, or schools…where they seem to learn to speak three or more languages fluently…past extensive wind power facilities…on well-maintained roads and infrastructure…with an extensive public transportation network…
Anyway, from these casual observations I get the idea that the Dutch have their sh*t pretty together compared to Americans.
Hell, you at least have to admit that ya’ll have it all over us as far as levee construction and maintenance is concerned…
Let the Europeans start paying for their own defense and let’s see how well the socialist paradise holds up.
I lived 6 years in The Netherlands. It is not such a paradise when you actually live there. Majority bikes because they cannot afford a car, I don’t want to imagine how congested roads would be if the majority could afford a car (roads were already quite busy when I was living there, pretty much the same in all Europe and US cities). They learn several languages because Dutch is only spoken by tens of millions in the entire world, on the other hand they need to communicate with foreigners to do business. Try to go to Spain and speak English, only a minority can actually speak it, it is just a numbers issue. Public transportation went to hell several years ago, unfortunately, I was very disappointing I really wanted to use it to go to work but it was too unrealiable. In summary I am European living in the US for the last 4 years and I don’t see much practical difference between two-party and multi-party systems, both helps to perpetuate the same crocks in power. Anyway, my excuses for the rant, today I’m just angry.
They are. It doesn’t cost much when you don’t want to invade anyone.
Defense from what?
I’m with you on the arguing about parties. Neither one has anything resembling a coherent platform. If one of them managed to come up with a belief system that actually made sense, I’d still have problems believing that they had the political will to do any of the things they talk about.
Unfortunately, I’ve found that talking to partisans is pointless. They’ve already bought into their parties despite the fact that their platforms make no sense; so there is no reasoning with them. Of course, by the process of arguing you can allow them to reveal how vapid their positions are to everyone else, but how many times do we really need to see that? I’m pretty bored with it.
I second that!
“All I see is everything falling apart ”
Aren’t the two of you saying the same thing?
Ben I hope you get the credit you deserve for getting the word out early about housing. I wonder how much money saved and tears avoided can be traced back to your efforts. Not to mention the education we’ve all received in trying to stay current.
Regarding the 2 party issue, I’ll never forget how Ron Paul was ignored and given no air time during the debates. We’d be naive to think that an additional party will change anything. As long as the power structure (worldwide? in America?) is intact we, the masses, will only be presented with those beholden to that structure.
RE: Ben I hope you get the credit you deserve for getting the word out early about housing. I wonder how much money saved and tears avoided can be traced back to your efforts.
Sure would be interesting to know the number of lurkers.
With a record high post of 500 on Bits, one can only say this blog is but a tiny island of reality surrounded by an enormous ocean of dithering morons.
Unfortunately the coming economic tsunami will sweep us all away.
+1 lurker here.
I’ve been lurking here for 3 years.
3 yr lurker. Lurking is useful - would you really want 1000s of comments saying similar things? Hard enough getting through 300-400 post bit bucket
Ben, I meant because it was so early and nobody was posting yet. I am sooo pissed at our govmt right now…
I don’t think anybody should take lightly the fact that a non elected government official is pledging hundreds of billions of taxpayer dollars, regardless if the money is there or not. While I understand Ben’s position I still think that we’re in dangerous territory. They’re basically trying to saddle the taxpayer will all the bad bets of the greedy pigs.
“Treasury Secretary Henry Paulson said the plan to buy troubled bank assets would cost “hundreds of billions” of dollars. Paulson said the plan would include features to protect the taxpayer “to the maximum extent possible.” “The ultimate taxpayer protection will be the stability this troubled asset relief program provides to our financial system, even as it will involve a significant investment of taxpayer dollars,” Paulson said.
Товарищи Доброго утра!
Наслаждайтесь великолепным утром новых, находят богатство в счастьи финансовой зависимости. Упорно трудитесь, не говорите ничто, и живите радостно для славы штата.
Бен Бернэйнк
Sorry, I thought I woke up in a different country about 40 years ago.
In America we pretend to invest and they pretend to pay us.
Ya ne panyemayo!
Nyeh znayoo kak picat6 po ruskee.
I cheated. Ya ploho govoryu po russki.
http://translation2.paralink.com/
Ya horosho govoryu po russki.
Da schtaw vwee gervareetse! Praveelno, vwee nye sookin sihn, naw tovarisch! :- )
Per babelfish:
“Comrades of the good morning! Delight in by the splendid morning of new, finds wealth in [schasti] of financial dependence. Persistently you work, say nothing, and live joyfully for the glory of state. Ben [Berneynk] ”
btw, quick anecdote for today. Yesterday I went to Whole Paycheck (whole food market) for a couple things i can’t get anywhere else. I paid the $16.74 with a 10-dollar bill and 7 singles cash. The cashier, a cuddly bear of very little brain, looked quite out of his element. As if he’d never seen cash before.
Get used to cash, son. We’re going back to it.
Oh, and maybe Spanish is better than Chinese. Yo voy a necessecitar la idioma el espanol para comprar (compro? comprando?) cosas en los mercados de calles. No hay bastante las chinesas en norteamerica aprendar Chinese.
恭贺新禧 !!
Yo voy a necessecitar la idioma el espanol para comprar (compro? comprando?) cosas en los mercados de calles.
Si, por supuesto.
I think it means:
I’m going to need Spanish to buy things at street markets. There aren’t enough Chinese in north america to learn Chinese.
Yes. My Espanol is pretty bad…I only started six months ago.
I should say…there are so few Chinese-language-only people in America that’s it’s not worth it to learn Chinese. On the other hand, if we go to a black market or barter ecomony, it will be more helpful to know serviceable Spanish. Buenos dias senora, yo necessito comprar las frisas y la leche. Tu hija es muy bonita. Puedo pagar un perco por un litre de leche. Ella gusta usted ese?
Depends on where you are. I’m just outside of Boston, our school dist.is 25% Asian, mostly Chinese. Our family just teamed up with a Chinese family to trade language instruction to our second grade children.
Excellent plan! So now the government will be buying up mortgages gone bad. No need for prudent underwriting standards w the Ultimate Guarantor standing behind your desk. So it’s party on!
Got to run — I’m off to buy up 3 new properties for ‘investment purposes’ before the hyperinflation that ensues from this most excellent move quadruples their price. See you later, Zimbabwe time!
“Got to run — I’m off to buy up 3 new properties for ‘investment purposes’ before the hyperinflation that ensues from this most excellent move quadruples their price. See you later, Zimbabwe time!”
This is my plan in essence.
Gold has never failed in a hyper-inflation situation, as it’s pitted against de facto dishonesty.
I expect to selectively buy properties for less than 5 Cents on the Dollar, vs. current valuations…
For those of you holding Dollar-denominated anything, it will be just the opposite, and your buying power will dwindle daily.
Matter vs. anti-matter
The dollar is up huge today.
At least our trip to France in 2 weeks will be cheaper. There! I found one positive for this stupidity.
if you take current inflation in Europe into account, I doubt that. maybe the airfare will be cheaper though thanks to the oil price …
Hotel and airfare were paid months ago. There’s no credit card debt in the NYCityBoy household. The trip will be paid for as we go. There will be no bills, after the fact. What a sweet feeling. Tres bien!
If by “up huge” you mean “down over 1%” then I see what you mean.
http://quotes.ino.com/chart/?s=NYBOT_DX&v=i
It was up huge when I posted, 4 hours prior to your post.
Paulson and his crowd pretty much killed your Gold rally. I could have predicted it since I bought a gold ETF yesterday morning as a hedge so I am down a few percent and losing….. When is the sky actually going to fall????
“When is the sky actually going to fall????”
The question was asked and Atlas just shrugged.
OOOOHH!! SPANK!
Hank’s bazooka is shooting bb’s, and i’m wearing kevlar.
No biggie.
Your bullets may be of gold but I think silver bullets are also powerful.
Silver is a starter metal and affordable, so that’s why there isn’t any around.
Everybody’s got $15 to blow on a cheap insurance policy.
During the Great Depression Silver got down to around 40 Cents an ounce, while Gold was $35.
Curiously, close to the same ratio as today
The comex riase margins on Gold/Silver 47% for G, and 20% on Silver..
Does this mean when Hank runs out of bullets he’ll throw the gun like the bad guys did against Superman ?
I remember reading that one of the biggest commercial users of silver was the photo industry. As everything seems to be going digital, there may be a lot less demand for silver than 10 years ago.
Actually it’s more..There is one OZ in every flat screen TV.,Most new anti-odor sports eqip. uses silver thread, Less production, higher expense to mine, Asia, India buy to hold..I could go on.
Gold rally killed? come on, it is far above even the 38% correction level for the latest jump. The Euro gold price is closing in again on its all time high (unlike the dollar gold price, in euros the all time high was nearly surpassed yesterday).
Some say upwards of $10 Trillion has been lost in equities since October 2007. I can’t see where this hyper inflation is that you are talking about.
Perhaps it’s best to view the value of currencies like one would look at the standings of say, the NFL.
The Dollar is the Oakland Raiders and the rest of the world is the New York Giants.
The Raiders have managed to win 6 games the past 2 seasons, while losing 26.
JUST (please) WIN BABY !!
My favorite team when Ken Stabler (the snake) was quarterback for the black and silver.
Ken “The Wild Stork” Hendricks. Those were the days. Now–it’s painful being a Raiders fan.
Ted…Ken… They’re all the same..
“I expect to selectively buy properties for less than five cents on the dollar, vs current valuations…”
Listen to you! You are describing deflation, not hyper-inflation.
King:
It’s happy deflation for me, financial oblivion for holders of Yanqui Dollars.
I have been waiting for the endgame for some years. It is definitely here now.
RE: I have been waiting for the endgame for some years. It is definitely here now.
The endgame occurred previously in the Jimi Carter years.
Paul Volker busted it with 16% 30 YR mortgage rates.
No chance now with the Welfare Entitlement State consuming 60% of the Federal government budget.
Without the Hunt Brothers getting involved, i’m not so sure that much would have happened in 1979-80, as far the metals are concerned.
It was a most definite Silver Bubble, and Gold meekly followed in weak lockstep.
Silver:
January 1979: $6 per troy ounce
January 1980: $48 per troy ounce
8x increase in value
Gold:
January 1979: $275 per troy ounce
January 1980: $825 per troy ounce
3x increase in value
“Without the Hunt Brothers getting involved, i’m not so sure that much would have happened in 1979-80, as far the metals are concerned.”
I don’t agree. We thought the dollar would become worthless and the end of the world was just around the corner before that. Like in 1964. I still have that silver. It’s for groceries.
Of course if it goes to $100 per ounce in the next few weeks, I’ll be buying steak.
In 1979-80 the public were overwhelmingly sellers, not buyers.
I remember being in a friend’s coin store and there was a line of 30 people waiting to sell precious metals.
Contrast that to today, where it’s all buyers.
The special shiny yellow metal asset of choice will never deflate, no matter how far housing prices drop.
Most people do not realize that in hyperinflation property prices are DIRT CHEAP (pun intended) because there is no such thing as credit in hyperinflation. Imagine what home prices would be like if they were cash only transactions!
I had some friends who lived through the Germany of the 1930s. They say some men bought whole businesses, as in shops in town, for a single gold coin during the hyper inflation. Others hated them. Really hated them, as in hated them to death. I hope we don’t get what some here are asking for.
I have a friend down Mexico way that was holding Gold when hyper-inflation hit there in the 1980’s.
He simply converted Gold to Pesos whenever he wanted to buy real estate, no muss no fuss.
Sometimes at work I listen to AM radio. The “buy gold now” commercials are popping up every hour or so.
I don’t remember hearing these ads before now.
If that happens, then they will take your gold:
“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. “
Maybe the government can save Detroit by buying surplus cars and trucks, kind of like in A door into Summer.
But Mugabe declared inflation to be illegal!
GEORGE ORWELL:
In a time of universal deceit, telling the truth becomes a revolutionary act.
I haven’t seen a revolutionary act from our deceitful government reps in quite some time.
Patterson told the truth to us when he announced on the tellie the state would be in for some rough times. Not that anyone paid any attention to him.
Do the truthsayers get drowned out by distractions over there? Not one friend mentioned being concerned. Did not see anything discussed on local blogs either.
Idjuts are still discussing the Carousel Mall’s Destiny expansion this week. I felt like writing a scathing response and then decided why bother. If they didn’t understand how banking issues or an economic slowdown might affect the building of a megamall there was nothing I could say to change that.
In Patterson’s case, unfortunately, it’s the blind (literally) leading the blind (figuratively). While he is absolutely right about the state of the state, the bozos in the legislature/senate will bicker about the useless and trivial and ignore the billions of additional deficit that will continue to grow as wall street continues to shed jobs and bonuses and the population decreases because of ungodly high taxes.
RE: the building of a megamall
Commercial real estate…the next shoe to drop.
I don’t know how commercial’s lasted this long.
Then again after a week like Wall St. had, the Mexican restaurant was almost full at lunch and when we left the Y tonight the Italian place was packed, Pizzario Uno was packed and there were a decent amount of cars in front of Kohl’s and Target. My head hurts thinking about it. It’s like it was some bad movie they just turned off and then went on to something else fun.
When are these bankers going to learn that it is wrong to play poker on Sunday? Last Sunday it was poker with the investment bank CEOs; perhaps Democratic Congressmen will make for easier opponents this Sunday.
Those private financial firms holding on to bad gambling debt must be cheering that the U.S. taxpayer is going to be unwillingly brought in as buyer of last resort. Of course, nobody knows what this distressed debt is really worth, as the owners have successfully held out until a bailout could spread their losses across the monetary base. But I am guessing those Markit ABX indexes priced below a dime to the dollar offer a useful hint.
REVIEW & OUTLOOK SEPTEMBER 19, 2008
Be It Resolved Article
Well, that was fast. As we went to press last night, Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke were on Capitol Hill asking Congressional leaders to help them create a new federal resolution agency to arrest the financial panic.
…
A resolution agency would have the power and cash to buy distressed debt for which there are few other buyers and which is paralyzing the financial system. We’re told Treasury will ask for $500 billion in spending authority — which is a lot of money even in Washington, but not so much when you consider the hundreds of billions in lousy paper that the Federal Reserve has already lent or taken on its balance sheet.
The details are crucial here, especially so taxpayers are protected and banks pay a penalty for passing off their bad paper. Any agency should also be temporary, and without the pet political ideas like the get-out-of bankruptcy-free card that New York Democrat Chuck Schumer was already peddling yesterday. With Congress set to leave town next week, Treasury wants everyone to agree by Sunday. That would be a Congressional land speed record, but there’s nothing like a looming election to concentrate a politician’s mind.
“With Congress set to leave town next week, Treasury wants everyone to agree by Sunday. That would be a Congressional land speed record, but there’s nothing like a looming election to concentrate a politician’s mind.”
Are there any examples of legislation that’s rushed and driven by fear that have turned out well?
LOL! The Patriot Act comes to mind. Truly, if Congress goes along with this, they have got to be the lowest, most vile group of people that ever lived.
Free markets, BOO-YAH!
There’s a really good reason why our founders made it very hard to change laws - just for times like these.
Unfortunately that was all bypassed in 1913, since we have a pseudogovernment agency - not subject to voters or to checks and balances - making U.S. fiscal policy.
Checks and balances are out. Making new rules up as they go along during a perpetual self-perpetuated crisis is in.
I look forward to the day when in is out.
This entire fiasco for the past seven years has been a Monopoly Game brought to life, complete with funny money and fools buying anything not nailed down for equally ethereal values. I’m still waiting for the crooks to go to jail, but not only do they have get out of jail cards, they are allowed to keep their booty.
And when the government buys all their overpriced malinvestments and puts them up for sale, the same crooks will be first in line to buy them back for a tenth of what the government paid, starting the cycle all over.
Actually, HBB Monopoly variant might be kind of fun. Add zero down, I/O mortgages, play it with 10 players or scarcity), add a rent freeze (can’t have enough stupidity with only 10 people).
And whenever someone rolls a 12…
cut off the loans
I’m really glad the government came in and kissed our boo-boos. Everything’s ALLLLLL better now!
That was a close one! Whew!
Mission accomplished! This crisis is now officially over. We must thank Hank Paulson for all of his hard work on all of those sundays. Bubble is ready for re-inflation and we are now accepting applications for Realtors, Flippers, Specuvestors, House-makeover reality show hostesses, and even car dealers. Other scammer-related positions are now availabe. Ability to lie with a straight face is the only requirement.
Almost everything is suddenly guaranteed. Who pays the premiums for all of these newfangled insurance programs, which seem to just spontaneously materialize out of the fundamental financial ether?
Actually, in the case of money funds, it may be the investor who paid the premium in recent years, in the form of paltry returns.
September 19, 2008 8:02 A.M.ET
BULLETIN
Wall Street to pick up where Thursday’s rally left off
U.S. to insure money funds
Treasury announces guaranty program for money-market mutual funds, aimed at shorting up their key $1-a-share net asset values.
Seems to me this guarantee will be the least expensive (very few actual failures) and very important. When “safe” money is no longer “safe” everybody panics, including the institutions, just look at the rush into US treasuries. I hate interference, but this looks like a bullet well spent.
Also, a lot of mooks like me put half or more of their 401(k)s into money market funds in order to keep them safe (no FDIC for the working stiffs). If credit collapse renders those mm funds worthless, expect a revolution. Pitchfork, hot tar, and feather time!
Pitchforks? ha
We have 2 handguns for every 3 people in our country…
Sounds like we need to increase production by 50%.
“We have 2 handguns for every 3 people in our country…”
And one of the three owns both of them.
‘And one of the three owns both of them.’
And another one of the three owns three of them. Plus, and this is delightfully convenient, a very nice pitchfork.* I’m looking at it right now, in fact, past the computer screen and out the window, to where I carelessly left it lying on the lawn last night. Tsk tsk, I should treat it better, put it out of the dew and sharpen the tines. I very likely will need it later.
*I got it at a farmer’s estate sale for 3 bucks.
We have 2 handguns for every 3 people in our country
Screw handguns… I’m looking at an AR-15 with an ACOG site and 12-ga Mossberg. Handguns are all well and good if you need a backup or concealed, but most body armor can stop 9mm or .45 APC. If I want protection, I want my targets to go down and stay down… and if I need protection, then we’re at the end game anyway.
Handguns are all well and good if you need a backup or concealed,’
…or have cute lil’ twig-like girl arms, like IIIIII do. Jeezily, what you describe would yank my arms off and kill me better than marauding neighbors would. Anyhow, it’s called ‘good aim’.
Nah. An AR has almost no recoil. Even twig-like girl arms are safe when cradling an AR. If you get an HBAR it’s a tack driver, too.
Really?! And are they also pretty guns? And what’s a HBAR?
I can see I better look into these things of which you speak.
Um…they’re basically an M-16. I can’t really say an AR is particularly “pretty” although I can’t say they aren’t. I’ve just never been one to ascribe such qualities to a weapon. HBAR means that the AR has a heavy barrel. TBH, though, it is very possible to shoot an AR (especially a new one) with great accuracy without going the HBAR route.
Mini-14 is good enuff for up to 100 yard, mini recoil, maxi hole on the exit side.
Nothing like a good throw-it-it-the-mud-and-keeps-on-shooting COMBLOC AK-47. Pretty? I think mine is. Black IS beautiful.
It’s a true “peasants gun” (how appropriate in these times). Easy to field strip, clean, load and shoot. Affordable, too ($370-$499 for a plain Jane model). Buy one for a friend!! You can pick up 1000 rounds of 7.62×39 HP ammo for $200.
[This offer may expire 1-20-09]
http://blog.riflegear.com/archive/2007/12/26/hello-kitty-ar-15—evil-black-rifle-meets-cute-and.aspx
ROFL
I was trained to use M-16s when I was in the Army. There is hardly any kick to them whatsoever.
Hmmm - what would be a good “starter gun” model for someone who has no gunnery experience ? Thinking handgun here. What kind ? Thanks.
Suppose that money market funds start offering higher returns and fund them through riskier assets than they would otherwise purchase without the free insurance, and investors plow their money into the highest return money market funds to capture the value of the guarantee? Would the money seem well spent in that case?
This is something I saw during the S&L crisis; I was even an unwitting beneficiary of the guaranteed above-market returns on a CD from an S&L which failed. Back then I did not understand that above market returns were a sign of a higher probability of failure, though I did understand the value of an FSLIC guarantee. Not so sure what that is anymore, now that many other asset classes carry implicit too-big-to-fail guarantees.
Excellent point, PB.
“Seems to me this guarantee will be the least expensive (very few actual failures) and very important. When “safe” money is no longer “safe” everybody panics, including the institutions, just look at the rush into US treasuries. I hate interference, but this looks like a bullet well spent.”
Of course, mm fund managers invest incredibly conservatively to insure the money is safe. Now that there’s a guarantee, no need to invest conservatively. Throw caution to the wind and let the taxpayers pick up the tab. There’s our next bubble.
Banks are already complaining about it though. Why keep money in a traditional bank if you can have the same protection in a money market?
Debtbeat Nation
The Boston Globe Real Estate section runs a blog in which I am a frequent commentator; for no other reason that the short-sighted cheerleading that occurs on the blog. Yesterday the blog had an interview with Barney Frank in which he was quoted as saying: “I don’t think anybody really thought that this subprime thing would reverberate as much as it did. I don’t think we realized how leveraged things were.”
My response follows:
=======================================
I call B.S. on Barney Frank. In March, 2006 Robert Schiller of Yale University issued a second edition of his text: “Irrational Exuberance”. Upon reading it, the thought occurred to me on the whole “continued rise of home prices is good” thought: If I’m priced out forever, then who will be buying my house? I looked around and saw a negative savings rate; stagnant job and income growth, and realized I was witnessing the largest Ponzi scheme build-up in history.
Also in March, 2006, Harper’s Magazine published an article by Michael Hudson of the University of Missouri-Kansas City titled, “The New Road to Serfdom: A illustrated guide to the coming real estate collapse”. In this easy to read (with pictures) article, Mr. Hudson clearly explains the Ponzi scheme of home price growth at 10%; and includes references to Japan’s 1990s era problem with their burst bubble.
Of course, Barney Frank on down to most every homeowner loved rising home prices. Free money for everyone! And when it ended, as it was predicted by armchair and professional economists everywhere; the real estate industry and media on up to congressional leaders claimed that the reason home prices were no longer climbing was the “negative attitude in the press.” My answer then was the same as my answer now: no, no matter what accounting tricks and exotic loan products you push, people can no longer afford homes.
If Barney Frank really wanted low-income residents of this state to be able to afford homes he’d stand on the sidelines and let prices slide. The only way to real estate affordability is to lower the actual price. But he can’t: he needs to get his hands dirty trying to fix a problem that his own hands and willful neglect bear the marks from the blood of creating a price bubble - after all, Representative Frank is Chair of the House Financial Services Committee.
Many of us saw it coming. It is just that most of you chose not to listen. And now you’re asking us to pay the bill. Particularly Representative Frank: by failing to perform his duties as a Representative and Chair of the House Financial Services Committee, he let down the citizens of this country and this Commonwealth.
Good post, chile.
I am officially ashamed of my profession today.
Maybe even my nationality but certainly these
people don’t represent my beliefs or values.
In which profession are you ermployed?
Government?
Financial markets?
Media?
Law?
Gambling? (i.e., buying gold, shorts, derivatives, hedge funds, real estate and other forms of so-called “investing”?)
Seems to me that this mess was created by a lack of understanding - and serious darth of ethics and morality - that weaves its way throughout much of U.S. society.
Financials.
Watched the “financials” and their DC lapdogs scrap out manufacturing in the last 3 decades ( via NAFTA, China, Brazil, etc.) while they cheered as to how their new economics were going to make up for it by being the world’s money engine. Now, after burning the furniture, they’re cheering for the prospects of getting bailed out by those of us whom they’ve destroyed. Like Ben says, fat chance of stopping this avalanche.
Don’t be. There are noble financiers, just like there are noble politicians and noble lawyers. I’m serious - not being tongue-in-cheek. I have a brother-in-law who’s a lawyer that I happen to think is a very honorable person, despite my overall views of the profession. Ron Paul IMO is a good example of a noble politician.
‘In which profession are you ermployed?’
I want to know, too. Are you Satan?
Nah…I’m not Satan. Though Satan certainly appears to be more honorable than quite a few people of influence.
Me thinks a high number of Americans (5-10 million) should be put in jail on charges of Treason for the trashing of the economy. Quite literally.
It’s one thing to take advantage of opportunity. It’s quite another to knowingly and intentionally screw over others in order to do so.
Those in the financial markets (no, not all, but tens of thousands of them) have deliberately and knowingly wiped out whatever assets hundreds of millions of people worldwide have spent their lifetimes accumulating.
Ditto to those in media outlets who have promoted such nonsense…ditto to lawyers and regulators who knew what was happening and chose to look the other way and not enforce laws already on the books…ditto government for the same reasons….and ditto to the tens of millions of Joe and Jill
6-packs worldwide who acted irresponsibly and now are whining about the after effects of their Get Rich Quick gambling habits.
Satan’s superfluous when you have Hank Paulson.
Before anyone jumps in here to accuse me of being a deflationista, let me say one thing before posting this article: NO COMMENT.
latest news [WM] Shares of Washington Mutual rise 41% in early premarket
METALS STOCKS
Gold, precious metals plunge on rescue plan
By MarketWatch
Last update: 6:34 a.m. EDT Sept. 19, 2008
WASHINGTON (MarketWatch) — Gold futures tumbled 6% as traders headed for the exits Friday, selling out positions following the precious metal’s sharp rally over the prior two sessions.
The main catalyst for the reversal was the Bush administration’s sweeping plan for isolating financial institutions’ troubled mortgage-backed assets. Congressional leaders promised to work with top officials toward a legislative solution.
The scariest 4 words of the week:
“Bush administration’s sweeping plan”
“Bush administration’s sweeping plan”
Is this an actual plan with an actual timetable, or just a bunch of ill-thought-out, disconnected, ineffective actions that will be justified with multiple explanations, none of which are true?
ill-thought-out, disconnected, ineffective actions that will be justified with multiple explanations, none of which are true
that describes every Bush plan. Exhibit A: Iraq.
precious metals plunge? in what universe?
The financial crisis
Time to think big
Sep 19th 2008 | WASHINGTON, DC
From Economist.com
America’s Treasury, Fed and Congress decide to spend a lot of money to stabilise markets
…
The authorities are considering two broad approaches to shore up the financial system. One is to create an institution to provide capital to weakened institutions. A proposal floated on Thursday by Charles Schumer, a Democratic senator, would recreate the Depression-era Reconstruction Finance Corporation to “provide capital to struggling financial institutions in exchange for an equity stake.”
…
The Treasury’s preference is to buy the mortgage securities at the heart of the problem, thereby putting a floor under their prices and removing them from the banking system. (There is apparently no serious proposal to purchase the homes.) The Treasury already has the authority to purchase mortgage-backed securities underwritten by Fannie Mae and Freddie Mac but wants to be able to buy much dodgier mortgage securities which have become impossible to trade. The Fed could also purchase such securities by invoking its emergency powers.
…
Either approach would be difficult, controversial and extremely expensive. If the Treasury or Fed acted alone, it would infuriate both parties in Congress, already aghast at how much taxpayers’ money has been lent without their approval. Democrats in Congress are still suspicious of Mr Paulson for taking over Fannie Mae and Freddie Mac less than two months after playing down the possibility.
A bail-out plan would require staggering sums—as much as $500 billion—to provide meaningful support. As of June 30th, $10.6 trillion of home mortgages were outstanding (the vast amount current). Once authorised, the money may not be spent: mere knowledge of the fund’s existence might restore confidence. And banks don’t have to sell their mortgages to benefit; merely having a credible market price for those they hold could restore the confidence of investors. And if the Treasury is astute in its buying, it could even make money. After all, thanks to investors’ panicked flight to the safety of Treasury debt, it can now borrow for close to nothing. The Treasury would have to recognise that it could lose a lot of the money too: there’s a reason no one wants this paper. Still, even $500 billion, at 4% of GDP, is cheap compared to an average of 16% that banking crises around the world have cost in the past 30 years, according to the International Monetary Fund.
…
A tad inflationary, no?
“Once authorised, the money may not be spent: mere knowledge of the fund’s existence might restore confidence.”
Rolling on the floor here in NYC. Oh, I better get going. I’m having lunch with Santa Claus and the Easter Bunny.
“Once authorised, the money may not be spent: mere knowledge of the fund’s existence might restore confidence.”
Isn’t that what they said initially about Fan and Fred?
Oy!
Cassidy: Where’s my federal bailout?
By Mike Cassidy
Mercury News
Article Launched: 09/18/2008 11:24:01 AM PDT
I want Henry Paulson or Ben Bernanke to call me up some late night to say they feel my pain, and that they have just the cure — billions.
But I’m puny. A nobody. A guy who’s going to make it on his own — or not.
Sure, the feds can shovel buckets of money at AIG. But MRC? Not so much. The government can take care of its old friends Freddie Mac and Fannie Mae, but what about Mikey C.?
(Hint to gigantic and failing financial institutions: Get yourself a cute name and wait for the government gravy train to roll in.)
Paulson and Bernanke fly by seat of their pants
Sept. 19, 2008 12:00 AM
Well, that didn’t last long.
Last weekend, the federal government finally mustered the fortitude to allow a big boy, Lehman Brothers, to go bankrupt.
By Tuesday, the Federal Reserve had basically bought an insurance company to which no one else was willing to lend money.
At this point, it is clear that Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke are flying by the seat of their pants, making sequential ad hoc decisions that are roiling markets rather than calming them.
There is simply no rationale or standard by which it is OK for Lehman to go through bankruptcy but taxpayers have to assume huge liabilities and risks to prevent Bear Sterns, Fannie Mae, Freddie Mac and AIG from doing so.
The systemic risk allegedly posed by AIG wasn’t its main insurance business, which is subject to separate capitalization requirements that by all accounts are adequate. Instead, the alleged systemic risk was the role AIG played in guaranteeing the debt instruments of others, including mortgage-backed securities.
But if those guarantees were put into question by AIG going into bankruptcy, the mortgage-backed securities held by others wouldn’t suddenly become worthless.
They would become worth less, since defaults might not be covered. But they would still be producing income. After all, more than 90 percent of mortgages are still current. Even two-thirds of subprime mortgages are still current.
Revaluating such debt instruments is something markets can do, if given the chance and time.
Meanwhile, the two presidential candidates took the opportunity of the financial melodrama to engage in senseless babbling.
I agree. I’m not really sure how this will all work. How does one remove the crap off of a portfolio if the company holding doesn’t want to admit to it? Why don’t they want to admit to having this junk? Because they will 1) loose money, 2) risk going out of business because of falling stock prices, 3) the top management risks criminal prosecution for cooking the books under Sorbanes-Oxely.
So, the gov’t takes this stuff (at my taxpayer expense, BTW!) How does the above change? Ok, the gov’t gets through with the bad mortgage stuff, now what about the bad credit cards, commercial loans, commercial property gone over, etc? When do those get fixed?
I have news for Wall Street: Bernanke and Paulson’s little idea WON’T WORK. This was tried in the Great Depression, and it didn’t work then.
What will work? Gee, that’s a damn good question. We should ask damn good questions more often.
So my usual quote: They can’t fix this. It’s just too big.
Roidy
P.S. I want to tax the CEO’s and other idiots that got us into this mess. Let them pay for it. I even wrote my Congressman about this.
Prof, I respectfully disagree. The Financial masters know full well what they are doing and who will make out like bandits in the bailout gravy train.
If you’ve read you’re Griffins then you should know that the masters of finance fully understand the ramifications of their allowing people to borrow and gamble like madmen….in the end they (the Fed) get more and more control of the financial universe and we the sheeple get a bigger invisible noose around necks. They are the ones that truly hate our Freedom.
I did not write the above piece nor do I necessarily agree with it; I just thought it was an interesting Op-Ed piece.
I just found the list of 10 things you are still allowed to short:
1. Gold
2. Gold
3. Gold
4. Silver
5. Oil
6. Grains
7. Common Sense
8. Laws
9. Morality
10. Ethics
Responsibility - I just shorted responsibility at the open - It is plunging to new lows as we speak.
11. Accountability
12. The US Dollar
13. Intelligence
14. Sheets
I hope all these folks buying gold and other precious commodities in PANIC MODE this week don’t lose their shorts. No doubt millions who recently bought will be selling like crazy as they do little more than react to the latest news of the day.
Ill-advised or poorly thought-out moves in dangerous times lead to significant losses.
I hardly sleep as it is, but I wouldn’t sleep a wink if my wealth was in Dollar-denominated anything…
Given the extraordinay measures used to prop a rotted system, and the fact that gold holds up with no assistance, it seems gold is winning.
Gold holds up in spite of MASSIVE efforts to push it down.
I don’t think buying SOME gold ( real/physical, not a stock ) is a bad, bad idea. I’ve been buying it here and there for a long time, and have made money selling it, as well. I bought 36 more oz of silver last week. It’s sitting by our pile of mail. I don’t feel bad about it. It’s going in the safety deposit box tomorrow. Hopefully, the gov’t won’t seize the contents of deposit boxes. I bought 4 more oz. of gold tonight. The bid-up price over spot is amazing. I found some ounces that were going for $ 180 less per eagle than the bid-up prices on ebay. As someone posted here, when times get tough, you can ALWAYS get someone to make an offer on gold. Tomorrow, we’re dissolving part of a CD, and putting in about $2000 - $ 2500 in non-perishables. Will it hurt us ? Not in the least. Will we be better prepared for “whatever” ? Yep. Do we know if the dollar will be worth anything much eventually ? Not really. Who knows ? I certainly don’t. I’m moving slightly from Cash is King to precious metals/non-perishables may sorta be king, or at least duke. Since the actions of the Fed/Prez/Congress have very little historical backup for me to model on, I’d rather be prepared for various contingencies, such as a shortage of supplies.
I believe that your non perishables are as good as your gold…..at least your silver. The very last thing you want to do now is pay down your mortgage any faster than you have to.
If the Fedsury accomplished nothing else this week, their arbitrary rewriting of the rules of the financial system in midgame must have wildly succeeded in destabilizing financial markets, as time will undoubtedly tell.
“…their arbitrary rewriting of the rules of the financial system in midgame”
My big brother did this to me when teaching me how to play chess…when one of my pawns was ready to take a “misplaced” bishop…he say “oh, that pawn made x2 spaces on his first move…he can only capture to the right”
It’s evident that “Free Markets / “Transparency” / “Open Disclousure” are vital and systemic links to people who get paid by the hour.
You should have whacked him up alongside the head en passant
The .gov just admitted they are looking at a systemic collapse and you are worried about gold buyers?
Yes! Yes! Oh, please, please go out and sell all your silver and gold…..at least for a few more weeks…please!!
Eudeman, I agre that it is foolish for anyone to panic buy anything. But if you invest over the years, no problem. Also no problem if you hedge against your own investments with counterinvestments.
From yesterday for those who falsely assert the sermon on the mount isn’t about social justice, direct your attention here;
Matthew 5
The Beatitudes
1)Now when he saw the crowds, he went up on a mountainside and sat down. His disciples came to him,
2) and he began to teach them saying:
3″Blessed are the poor in spirit, for theirs is the kingdom of heaven.
4) Blessed are those who mourn, for they will be comforted.
5) Blessed are the meek, for they will inherit the earth.
6) Blessed are those who hunger and thirst for righteousness, for they will be filled.
7) Blessed are the merciful, for they will be shown mercy.
9) Blessed are the peacemakers, for they will be called sons of God.
10) Blessed are those who are persecuted because of righteousness, for theirs is the kingdom of heaven.
Feast your eyes on that.
Well…at least now I know how to make a sunglasses wearing smiley.
From yesterday for those who falsely assert the sermon on the mount isn’t about social justice, direct your attention here
I must’ve missed the hoohah yesterday.
I generally steer clear of any religious dustups, but I want to add a brief comment — It’s difficult for me to understand how one could read the New Testament and not believe that compassion and social justice are its Primary Directives.
It is, to me, quite a radical set of documents.
Like another radical document, our Constitution, the documents that comprise the Bible are open to an endless array of seemingly contradictory interpretations. I guess that’s what makes them interesting.
“generally steer clear of any religious dustups”
Agreed but when one group hijacks a religion, claims moral high ground and then suggests that social justice has nothing to do with their religion (hint:GOP), it’s time to call BS and start exposing these money grubbing jerks and their clueless wage slaves for what they are.
Ex - speaking of “money grubbing jerks,” as I drive by the big yellow turd on the way to our cottage early tomorrow am, I’ll be thinking of you and mention your name for it to my wife. I’ll let you know if she spits her coffee all over the car, she HATES that place.
Don’t forget to ask all the koolade drinkers and their RE voodoo priests like Schuh, Sehlmyer how wonderful the market is there. Then give them the 40% decline in sales volume slap down.
One day we will stop in for a good laugh. Maybe when you can see the 70% off signs from the Northway. This weekend its hanging out at the cottage with the kids and dog and making a trip into the metropolis of Queensbury for the balloon festival. Weather looks good and I have to get ready for Winter trips up there.
‘I must’ve missed the hoohah yesterday.’
Too bad, for verily, it was much fun.
Even more radical is the Declaration of Independence. If you haven’t read it, read it, if you already have, read it again. Here’s one of many links to the Declaration of Independence.
http://www.ushistory.org/Declaration/document/index.htm
Sounds like a more poetic version of something out of the Cheney administration….
C’mon, Exeter. I’ve seen your postings and you can do better than that. Incidentally, I understand that your use of the word “feast” was kind of a combative command, but “feast” properly describes how to approach the words of Jesus. I have feasted on them. Many times :- )
Drop the combativeness for a moment. Without consuming too much of Ben’s blog bandwidth:
1. When Jesus referred to those who were “poor in spirit”, do you think he was referring to those who suffered from clinical depression?
2. When he referred to the “meek” inheriting the earth, did he mean that pushovers would be the ones to succeed to power? That butt-boys would ultimately become senators?
3. What do you think he meant by the word “blessed”? Do you think he was talking about the need to compel the Roman Empire to enact government programs to help the “poor in spirit”, “those who thirst for righteousness” and the “meek”? Or, alternatively, do you think he was possibly referring to the type of relationship that he believed men should have with their God?
Don’t get me wrong. I think there is a strong theme of social justice that underlies much of what Jesus said.
But he also commanded the prostitute to “sin no more” (how judgmental of him! and what an incredibly antiquated concept!), the Jews to “render unto Caesar what is Caesar’s” (no threat here to the Internal Revenue Service of the day!) and proved a lifetime disappointment to his disciples who thought that he had come to revolutionize the political and social order (liberation theology be damned).
How do we reconcile all these aspects of Jesus’ words? I would love to see some of the frequent posters, who congratulate themselves on their abilities to think in a disciplined, critical and highly independent fashion, weigh in on these issues, after having given them some calm, disciplined thought. Then, and only then, they can reflexively lambaste the people holding other views as “crypto-Fascist hypocritical right wing lunatics” making a mess of society :- )
You asked for it Wineboy,
Poor in spirit—when you’re dead/brain dead by giving your self over to your fantasies,
you’ll be happy.
Mourning will stop–when you’re dead/brain dead
Meek will inherit the earth. True. They will be buried in it, and it will be theirs forever.
Thirst for righteousness. They will be filled with the certainty of their illusions.
Merciful shall be shown mercy. Please. Androclese was a myth. Oh. Oh. You mean GOD will show you mercy when you’re dead? Like he did by making you a Hebrew slave in ancient Rome? Keep thinking that…it’ll keep you pliant and uncomplaining.
Pure in heart shall see God. If there is nothing going on in your brain, true. That is what nirvana is all about. Or if you’re dead.
Peacemakers shall be called the sons of God.
Well, no, actually they are called “unpatriotic” and “surrender monkeys” and “with the terrorists,” or accused of being French. And some of us are daughters.
I’ve been “persecuted for righteousness sake” all my life, and I assure you it has not been in the least, “heavenly.”
Jesus the Christ’s reputed teachings make a whole lot of sense if you are a subjugated people with nothing to look forward to except your death. As is painfully obvious, they don’t translate very well into competitive, technologically educated society…sentimental protestations to the contrary.
Life is about living.
Thank you for the forum.
Glad to see you posting. How are you doing?
lmao… get’em hansen~!
Alenna…
Way to curb that dogma!
Your pun-o-matic is on overdrive today, Lad. Some VERY good ones indeed!
There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved. - Ludwig von Mises
I’ve always been a big fan of “sooner”. Apparently I’m in the minority.
NASDAQ up 100 points right out of the gate, or am I reading that wrong??
Buy now or be priced out forever, lol.
No kiddin’, lol! Someone refresh my memory, but hasn’t this happened before, circa 1929?
Peering Over the Cliff, Saying ‘I Told You So’
“…When it comes to tomorrow, the long-term pessimists are still, well, pessimistic. “I think the central banks are going to next wear the goat horns,” said Grant, saying that the Fed and other central banks would lose credibility as they wade deeper into managing banks and insurance companies…”
WaPo
A horrible situation brought on because of lack of transparency in financial books. Maybe some banks are solvent, but nobody bid for Lehman or AIG after they looked at the books.
GS with Level 3 assets (Mark to Fantasy) exceeding its entire book value, leveraged at 24:1 and a reasonable investor is supposed to believe the numbers?
I agree with Mr. James Grant; the Federal Reserve will lose credibility over the $2 T thrown at the housing fiasco so far.
“A horrible situation brought on because of lack of transparency in financial books. Maybe some banks are solvent, but nobody bid for Lehman or AIG after they looked at the books.”
Was that because of those evil short sellers who said some mean things about those venerable companies?
Goldman Sachs = Paulson = US Treasury = Goldman Sachs
US Treasury/Goldman Sachs = 3 trillion $$$$$$$$$$$$$$$ credit limit… without congressional approval. No second signature required.
Goldman Sachs /Morgan Stanley /Merrill / Lehman
-x3 = Goldman Sachs
Ford / GM /Chrysler /Toyota
-x2 = Ford / GM
It’s good to have your competition get sick & die…and keep the anti-dote for yourself.
Paulson: “I love you…” / “I love you not” … New US Treasury fairness rule # 401-K-GS
I can see all you amateur (pro?) stock traders and metal bugs have plenty on your plate today, but, what about the people here who aren’t financial whizzes.
I’m just a plain old jane six-pack-of-green-tea who has little debt, rent, good security (for now), some 401K, and over 20 years to retirement. Is there anything I should do today?
“…Is there anything I should do today?” lol!
Perhaps volunteer at your local National Guard Post or the Red Cross?
I second the volunteer work. I don’t know anything about the National Guard, but as someone who has made their career in nonprofit, I can tell you that you meet a lot of community leaders, wealthy donors and even some nice people. My last job offer arose out of a volunteer position. Even though the pay is almost always pretty low (zero if you volunteer), you get interesting and varied benefits from it.
Ox - sit tight, there is no need to play this game right now unless its with a few dollars you can afford to lose. I suspect those folks who just had Money Market accounts outperformed 90% of the experts in the last year, even if they gave up some real return to inflation. The “experts” are wildly right/wrong everyday. Be safe, lay low and watch to see if the gov’t really is all powerful. If so, buy Goldman Sachs, if not, buy some Gold. Where she stops nobody knows.
Oxide,
I’ve got a similar bio. I’m going for a bike ride and a picnic w/my husband.
(Moved some money last week though)
Ahhh….it was a beautiful day today. Rollerbladed instead of biked. We don’t do much without the kids. it was like the old days doing something active and outdoors.
I guess my point earlier today was that in the most awful of circumstances there are always blessings and wonders. So if you’re not a trader that needs to stand by for each announcement, take a break. Tackle your problems after refilling your spirit. Take stock of what’s around you that is your strength, your spirit. Smile at a stranger. Notice something of beauty. Call an old friend. Hug your kids and marvel at how they see the world.
I’d be panicking if it wasn’t for this blog. But instead anything I needed to do to protect myself is already done.
Some eat popcorn. Some go rollerblading. Whatever you do. Enjoy yourself!
You may be experiencing problems logging on to our Web site. If you are unable to log on to your account online, you can still access your account through our automated phone system….. Please note that we are also experiencing high call volumes at this time.
Get the facts about protection for investments and funds at TD AMERITRADE.
Ughhhhhhhh!
RE: Is there anything I should do today?
Go down to Costco and pick up a couple cases of SPAM and powered milk.
Then down to your local gun merchant and pick up a .45ACP with a 1000 rounds before the gun ban comes.
The trucker strikes ala Europe will be coming soon.
Go down to Costco and pick up a couple cases of SPAM and powered milk.’
No, ’cause SPAM is icky. ‘Why suffer through Armageddon?’ Is my motto. You should load up on wine and dry pasta and tasty things, like me.
The SPAM is not for you to eat; it is to sell for PM to your hungry neighbors. Canned corn beef is a better buy. More calories, protein, less money. Food is money in most parts of the world. Just ask 3 billion of earth’s other world population.
“…Is there anything I should do today?”
did you take the trash out yet? Don’t forget to feed the cat. That should about cover everything.
“Is there anything I should do today?”
Hug your kids.
Yes. Some of your “security” should consist of a small but significant amount of precious metals. Not your life savings, and, really not more than you can comfortably carry in your purse without attracting attention. No one but yourself need know about it ( truly, you”ll have to find a trustworthy coin dealer who will know about it). I guarantee you that when you do this you will feel less concern regarding your future. Silver, gold, platinum….it doesnt matter. Just get some!
Some of your “security” should consist of a small but significant amount of precious metals. Not your life savings, and, really not more than you can comfortably carry in your purse without attracting attention.
That could be less than 1 half of 1 percent of her net worth. Where would that get her?
First American Financial - FAF - up 100% today. Wow. I’m guessing they’re on the “short” list.
Apparently a trading snafu - now they’re only up 9%, just like that.
What a weird friggin day on Wall St.
system overload?
You may be experiencing problems logging on to our Web site. If you are unable to log on to your account online, you can still access your account through our automated phone system. Please call 800-669-3900, then press 2 to log on (you can use your nine-digit account number or User ID and PIN). From the main menu, press 2 to place a new order or press 3 to manage existing orders. Please note that we are also experiencing high call volumes at this time.
Get the facts about protection for investments and funds at TD AMERITRADE.
Get answers about the recent market news related to Lehman Brothers, Merrill Lynch or money market funds.
Bankers will rue this day. The day they cried, Uncle! This crisis creates opportunity for the biggest transfer of political power in years. The Socialists arm of Congress will write the rules. Future margins and operational abilities will be greatly limited.
The socialists are already writing the rules. Unfortunately, they are corporate socialists and the rules they are (re)writing favor the extremely wealthy at the expense of the many.
Corporatism:
Control of a state or organization by large interest groups.
Socialism:
1. Any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government that often plans and controls the economy.
2. The stage in Marxist-Leninist theory intermediate between capitalism and communism, in which collective ownership of the economy under the dictatorship of the proletariat has not yet been successfully achieved.
I would add a large dash of corporatism to that socialism recipe that is currently being mixed.
I’d call what’s going on a combination of fascism, evangelism and socialism, not necessarily in that order.
Gahhhh: that sounds like a rather unsavory — and untenable — mix.
Is there anything I should do today?
hug someone you love.
In all seriousness, if you’re someone who has a job and isn’t an accomplished and successful trader (and can’t spend all day following the trends), I really think the answer is “no”. The most important things are that you have little debt, you rent so you can get out of Dodge if need be, and you have good security for now. You’re in better shape than at least 80% of the country.
sorry, this was a reply to oxide above
job
no debt
rent
add health to the list
If your job goes away, you are still your own hamster, I mean master, as long as you are mobile and healthy. Hopefully you have some savings if that happens. Most important, don’t compromise your ethics in any situation, you have to live with yourself long after this debacle is over.
OWEN!!!
All good points, above posters. But I still like having some precious metals and some non-perishables laid in ! LOL.
Here’s a fact!
CALIFORNIA would have ENOUGH MONEY to BALANCE its BUDGET if only it collect its 9.2% state income tax on forgiven mortgage debt.
Just because the Federal Government passed the “deadbeat specuvestors tax relief act” forgiving federal income tax on mortgage debt, doesn’t mean the STATES have to!
But CA is making no effort to collect these taxes.
I contacted a couple of organizations that have filed “taxpayer lawsuits” in the past and neither was interested in getting the government to collect more taxes (even though it would result in more Justice!)
WHY, CALIFORNIA, do you punish ME, a job-creating small businessman, while giving every SINGLE-MOM STAWBERRY PICKER SPECULATIVE INVESTOR tens of thousands of dollars in TAX BREAKS?
To all CALIFORNIANS here!
Please send an email to Arnold
http://gov.ca.gov/interact
And tell him to balance the budget by collecting state income tax on forgiven mortgage debt!
I can find no reason why they’re not doing this, but inquiries to the state franchise tax board (via my local rep) indicates they’re not pursuing this source of income.
Somewhere, Gray Davis is laughing…
I didn’t vote for the recall!
But I gained a LOT of respect for the Governor by not allowing the state legislature to RAISE MY TAXES.
I respect people who whine about not having their taxes raised, if they also refuse to accept “free” government services. My grandmother had a name for people who shamelessly live off of the generosity of their fellow citizens: freeloaders
If you voted for Bush, then you need to at least acknowledge that your taxes need raising to pay for his mercenary foreign wars.
As far as I know, the only way to honestly justify not paying taxes is to live a sustainable lifestyle as a hermit, and barter for your needs.
We pay property taxes and that’s it.
My wife and I refuse to contribute part of our gains to this administration’s awful aims, so we both retired early.
First of all, I didn’t vote for bush.
BUT, Americans borrowed more money to pay for artificially inflated HOUSES, CARS, and crap than the war cost! And TAXPAYERS are now paying for that, too!
Also, it was the LIBERALS who started the housing bubble. GOOGLE “Nehimiah Project”
Actually only people who pay THEIR FAIR SHARE of taxes have any business complaining about them.
What’s your fair share? Take the entire budget, and divide by the population. If you didn’t pay that much, then shut up!
“I respect people who whine about not having their taxes raised, if they also refuse to accept “free” government services.”
Can you explain to me why tax rates, ESPECIALLY state income and sales taxes, EVER need to be raised?
Inflation and population growth will increase the $$$ amount needed for government, but inflation (both price and wage) and population growth should ALSO increase the tax base by approximately the same amount. So why would the tax RATE ever have to go up?
“What’s your fair share? Take the entire budget, and divide by the population. If you didn’t pay that much, then shut up!”
It’s not my fair share if I wanted nothing to do with the wars and speculations and corruption that it fed. I refuse to pay for my government to feed the sharks, especially when my government is breeding more sharks that get hungrier and hungrier.
Reuven, I sent mine:
Mr. Governor,
Firstly, thanks for vetoing the last budget– we certainly need to have a rainy day fund that is difficult to tap. (We should have been doing this when things were great as, inevitably, there is always a cycle.)
Secondly, we are already taxed PLENTY in California. Additional budget fixes should come from program cuts, not from additional tax burdens on the citizens.
Idea to bolster the state coffers: do not allow foreclosure ‘victims’ to get out of their tax obligations; the federal government has conceded that, we in California should not. If they were too greedy or careless to manage their finances, they must pay the price for forgiven mortgage debt.
regards,
ps. say ‘hi’ to Franco
My prediction:
2008
Bush will claim it a national emergency and change the length of term for President and rule another 20 years.
2010
All members of Democratic party start to dissapear.
2012
Bush will proclaim a national emergency and evoke eminent domain to purchase all residential property with worthless American dollars.
2015
Millions of peasants rounded up and executed by Bushca party.
’ssshrubery would need the armed forces on his side to make the plan work, and I get the feeling they are even sicker of the madness of king george, than we are…
I’d prefer he exit in the style of Chauchescu instead.
Both parties have already disappeared. Call them the FEDocrats. They all bark to the same master.
How many (gold) coins are you willing to wager on any of these predictions?
Your predictions are plain silly, but par for the course with other economists’ predictions.
“and rule another 20 years”
another? he hasn’t ruled any years, just bungled
I think the Shrub smells what the Prof referred to above as burning hedges and will head for the hills before the fire gets any closer.
Don’t diss Georgie…he just wants to get to the next level on his Gameboy.
“The most shameful day is election day, every year, when this system is perpetuated. And most of the posters here want to argue about the two parties. Don’t tell me to wake up; I tried to warn people this was coming. Meanwhile, I got a business to run…”
Don’t tell me to wake up either. I actually got myself on the ballot (practically illegal and nearly impossible against an incumbnet) as a minor party candidate and ran against my state legislator in 2004, in outrage over the pander to the special interests, sell out the collective future of my state government. Gave up a job, my family sacrificed, nobody cared.
Had I known that the NY state legislature was merely following the values of millions of Americans of their generation, and younger people are too lazy and stupid to even notice, I wouldn’t have bothered. But now that we see the financial decisions of most Americans, we know that is the case.
The new DataQuick numbers were released for the Bay Area yesterday, and they constitute a nice improvement over last month, to say nothing of last year:
Median prices for houses and condos, used and new
(8/08, 8/07, %chg)
San Francisco $725, $822, -11.8%
San Mateo $632, $788, -19.8%
Alameda $440, $619, -28.9%
Marin $675, $899.5, -25% (*)
Santa Clara $632, $788, -20.6%
Napa $453.5, $597.5, -24.1%
Sonoma $350, $505, -30.7%
Contra Costa $330, $570, -42.1%
Solano $270, $420, -35.7%
Bay Area overall $447, $655, -31.8%
(*) “It’s God’s country, what can I say,” Leslie Appleton-Young, chief economist for the California Association of Realtors, told an audience of agents Tuesday in Terra Linda. “When is the 30 percent decline in Marin County’s market going to happen? Not in my lifetime.” - Hopefully that means she is near her expiration date!
Sorry, I typed San Mateo’s numbers for Santa Clara. Here are the real (better) numbers:
Santa Clara $555.5, $700, -20.6%
Cool! Marin county down over $200,000! $250,000 to go and I’ll be interested.
FNM up 60% so far today…you can’t buy entertainment like this.
Damn! I was joking two days ago about buying some FNM stock for pennies…
AIG opened up over 100%!
So here’s a question - at what point does the U.S. Treasury need bailing out? And of course the follow up question - who does this bailing?
It ain’t the taxpayers - that’s kind of like saying the homeowners will bail out the failing mortgage lenders somehow. The taxpayers have nothing left to give.
Its Uncle Buck who has to give it up if the taxpayers are all broke due to years of negative savings. The main losers here are groups of individuals who are owed or will be owed fixed dollar payments, such as pensioners, owners of U.S. govt debt and blue collar workers whose pay does not increase very quickly.
Welcome to the dark side.
My views have not changed one bit, though I don’t always loudly proclaim them on this blog like some posters.
Wouldn’t that list also have to include anyone who’s invested in dollar-denominated things - stocks, bonds, etc. etc. etc.? In other words - pretty much anyone who has saved prudently in their 401k, IRA, etc. Unless the gains on these keep up with inflation, which isn’t likely since the extra money will go towards treasury debt paydown, the value will drop.
“Last night Dr. Ron Paul was on TV recapping one of the many predictions he has made over the years. This one of the current melt down was predicted in detail 5 years ago, in 2003. He indicated what it would take to avoid it at the time. Last night he indicated what it would take to survive it. And he once again mentioned that since our government went way beyond in their efforts to get us here, there is no way we are going to escape this mess without extreme pain. Dr. Paul also indicated that if we persist, as it appears we will, extreme pain will be the least of our worries in a very short period of time.”
mikefolkerth dot com comments
This is the biggest reap off I ever witnessed. This country is worst than Soviet Union in Stalins times… They are using our money to help Mr. Buffets and… there should have been at least referendum , if people like me agree or no with their disision of lending tax payers money for the reach who already stle our money…
When people were on the streets of New Orlean waiting for help, nobody offerred such big amounts of money…
Is anybody going to go to jail, is President going to resign?
If this thing happens in a normal country in Europe people will come out and protest, but here “second ammendment” is only on paper, people trust governmen like it was in Russia, were people trusted STALIN…
“If this thing happens in a normal country in Europe people will come out and protest, ”
these things are happening just the same in Europe (short sale bans, huge monetary injections, stock market manipulation, huge rewards and golden parachutes for the biggest crooks etc.) and nobody notices. If you look around in the streets it is obvious that the people are equally oblivious to what is going on in the financial world. Even the housing market party is still in full swing over here, maybe the music has stopped but people know that there is never a reason to worry.
I am sorry but I havn’t read yet that any other country using one trillion $ taxpayer’s money to buy back wrong bets of reach investors… Media owned buy reach crooks are manipulated people in this country to keep their silence( they are talking only about our mutual funds) and people are so depprssed by their hard work, nobody is able to say anything… This is copy cat of Russia, Yeltsin gave all the riches to few people “oligarkhs” , here Mr. Bush is doing the same…
“This country is worst than Soviet Union in Stalins times”
Way out of line. Us American kulaks have it much better than our Soviet counterparts. You are typing your story on a blog. In the Soviet Union they knew that dead men told no such tales. Let’s keep things in perspective here.
Dear Mr. patriot, my comparison has a figuarative meaning and I feel Iwas right since I feel KGB from your sentence “You are typing your story on a blog. In the Soviet Union they knew that dead men told no such tales. Let’s keep things in perspective here.” otherwise what, you are going to make a call to Kremlin?
I am glad that you consider yourself a “kulak” but in my opinion kulkas are Mr. Buffet, Aramoviches…who have the elected officials in their pockets, and we are just their slaves who work for the $$$ to pay for TAXES…
Is this government going to pay for peoples bets who lost money in this year in Las Vegas?
Is this justice ? I should be happy that you did not say “Go back to your country …” probably… Thank you…
Dear Mr. patriot, my comparison has a figuarative meaning and I feel Iwas right since I feel KGB from your sentence “You are typing your story on a blog. In the Soviet Union they knew that dead men told no such tales. Let’s keep things in perspective here.” otherwise what, you are going to make a call to Kremlin?
I was just talking about JUSTICE, nothing more…
I am glad that you consider yourself a “kulak” but in my opinion kulkas are Mr. Buffet, Aramoviches…who have the elected officials in their pockets, and we are just their slaves who work for the $$$ to pay for TAXES…
Is this government going to pay for peoples bets who lost money in this year in Las Vegas?
Is this justice ? I should be happy that you did not say “Go back to your country …” probably… Thank you…
On the bright side: We have seen our last short-covering rally in finacials for a while. What else would ever drive those pos stocks higher? No more big rallys in the SP 500.
“Beware chasing this - yes, we are going to be up huge today - probably 500+, maybe 1000+ on the DOW - think carefully about whether there has actually been a resolution to any of this mess, and whether the root problems identified here have been removed.
If you judge not, then we risk the mother and father of all market crashes at some point in the future - and probably not far in the future either.”
market-ticker dot denninger dot net
I think this RTC II just might work. I notice the Dow Jones went up all during RTC I…why wouldn’t it go up now? The debt’s being flushed on to the tax payer over the long term. Why won’t it work? The government is able to make payments on the debt. I keep pointing out it doesn’t have to pay the whole amount. And lots of the mortgages they’re taking on, for example, aren’t in arrears.
Dear Mr. patriot- NYCityboy, my comparison has a figuarative meaning and I think I was right, since I smell KGB from your sentence “You are typing your story on a blog. In the Soviet Union they knew that dead men told no such tales. Let’s keep things in perspective here.” otherwise what, you are going to make a call to Kremlin?
I am glad that you consider yourself a “kulak” but in my opinion kulkas are Mr. Buffet, Aramoviches…who have the elected officials in their pockets, and we are just their slaves who work for the $$$ to pay for TAXES…
Is this government going to pay for peoples bets who lost money in this year in Las Vegas?
Is this justice ? I should be happy that you did not say “Go back to your country …” probably… Thank you…
Worse is Yet to Come
http://www.forbes.com/global/2008/0929/020.html?partner=yahoomag
excellent article.
“A. Gary Shilling 09.11.08, 5:00 PM ET”
This article was written before the fix was in, and is hence totally irrelevant, as all the bad debt will disappear from banks’ books this Sunday with the stroke of a pen. It’s all good again; buy stocks and houses or get priced out forever!
this article splashed cold water in my face. no matter what the sugar daddy government does, it will not change the fact that everyone is still broke. the people who are left to keep this game in play wont bite that apple. this thing is way to big, there’s no way they can stop whats comming.
it will not solve the problem, but it sure will hussle the losses around so they end of with other (mostly unsuspecting) players.
This episode in financial history is being treated as though Great Depression II has arrived. I note that last December, Hank Paulson went to great lengths to revise an economic forecast that predicted a recession into one that said there was no recession on the horizon, the most recent GDP numbers show that U.S. economic growth is strong, and the only recent financial chaos that I can see is that which was carried out by the Fed and the Treasury the past several Sunday afternoons.
Conclusions:
1) There is no real financial emergency.
2) The Fed and Treasury just finished wiping out the shareholders of firms they did not like.
3) The orchestrated crisis is being used to justify yet another wealth transfer from Main Street to Wall Street — perhaps the biggest one yet!
Yesterday was a financial Night Of The Long Knives, shorting out the system.
did anyone notice all this snowballed when goldman sach’s stock price went below $100. then all of a sudden the PTB started changing the rules? i don’t think that just happened to be a coincidence.
That because (see my post below) for the most part the PTB is Goldman Sachs. Or at least GS is a very big piece of the PTB pie.
IMO, it was the run on money market funds that freaked them out.
That truly would have been disasterous.
“2) The Fed and Treasury just finished wiping out the shareholders of firms they did not like.”
For a list of ones that do like each other - see:
http://en.wikipedia.org/wiki/List_of_Bilderberg_attendees
Ben S. Bernanke (2008), current Chairman of the Federal Reserve
Timothy F. Geithner (2004, 2008), current President of the Federal Reserve Bank of New York
E. Gerald Corrigan (1994), former President of the Federal Reserve Bank of New York, current Goldman Sachs Managing Director
Alan Greenspan (2002), former Chairman of the Federal Reserve
Alfred Herrhausen (1978-1985, 1987, 1988), German banker, former Chairman of Deutsche Bank
Mervyn A. King (2003), current Governor of the Bank Of England
Hilmar Kopper (1991, 1992, 1994, 1995, 1998-2003, 2005), former CEO of Deutsche Bank
David Rockefeller, CEO of Chase Manhattan Bank
Jean-Claude Trichet (1995, 1999, 2008), current President of the European Central Bank
Lloyd Blankfein (2007), CEO of Goldman Sachs
Louis V. Gerstner (1994, 1997), former Chairman of IBM, current Chairman of The Carlyle Group
Maurice R. Greenberg (1989-1991), former Chairman and CEO of American International Group
Martin Taylor (1993-1996, 1997),[3] former CEO, Barclays
Not too many failing firms in there. Just one - AIG. Oh wait - that’s a former CEO who hasn’t attended since 1991.
Here’s a couple that scare the ever-living crap out of me:
Eric E. Schmidt (2007, 2008), Chairman and Chief Executive Officer, Google
Peter A. Thiel (2007, 2008), Co-Founder, PayPal
Mr. Ackermann, Chairman of Deutsche Bank. But also, Mr. Joschka Fischer, former German Secretary of State. Go figure. (That was the April conference, after which Ackermann changed his mind, agreeing with Morgan that the financial industry now should regulate itself).
If you believe those GDP numbers then you are a greater fool. GDB has been negative in real terms for a while now (see shadow stats).
We are in a depression they just don’t admit it.
I saw an article the past day or two with a survey that said something like 25% of polled Americans believe we’re in a depression. Wish I could find the link.
Democracy is based on the assumption that a million men are wiser than one man. How’s that again? I missed something.
Autocracy is based on the assumption that one man is wiser than a million men. Let’s play that over again, too. Who decides?
- Robert A. Heinlein
Sure would be nice if we could revert back to being a Republic, which is neither of those. Problem is it doesn’t have that catchy “-acy” at the end. Dang.
Although I’m a long time Heinlein fan and love his quote, I like this one too: “Democracy is two wolves and a sheep voting on what’s for dinner.”
http://www.r8ny.com/blog/barry_popik/lunches_with_wolves_the_fake_ben_franklin_quote_on_democracy.html
“Paulson said mortgage giants Fannie Mae and Freddie Mac will step up their purchases of mortgage-backed securities to help provide support to the crippled housing market.”
That’s good to know…all this time I had thought that these firms were in trouble (wasn’t there some sort of intervention recently? I forget), and were going to be made SMALLER.
Govt doesn’t “do” smalller.
Get with the program. That was over a week ago, and is now irrelevant.
I know a friend who works in HR. She received a fax from a mortgage company for verification of income on an employee. At the top of the page, it said Fannie Mae, as the loan would come directly from them. Were talking about people who dont even make enough money to buy a 100k home much less a 375K condos in the bayarea. The only enity buying loans is F & F. Dont they have any sense at all?
I read this blog daily and am impressed with the wealth of knowledge here. I have been following it for years and see most of what has happened with the housing market was predicted years ago.
I’m very unschooled in financial matters but did see the writing on the wall and sold my house late 2003 probably a little early but I had tripled my purchase price in 7 years.
I have done well with my mutual funds up to this year.
Several months ago I took 1/3 of my funds out .I called my broker today and told her to sell another third. Of course she told me I am wrong, you can never time the market etc….she has had more people buying than selling this week.You don’t want to miss out on days like today and yesterday.I think the general consensus here is this is just a band aid and this is all going to blow up anyway but just wanted some more opinions. I’m a single mom living on a fixed income (although not to bad since I have a disability policy that I’m on the pays 60% tax free of my previous earnings) so really mine and my children’s futures are really on the line here with this money that I have.Because of my illness I don’t anticipate going back to work possibly ever.
It sounds like you are doing well and paying attention.
Go girl. You are doing right by you, your family, and your country.
Atta girl. Don’t let anyone talk you out of your convictions.
I did the same thing. I even convinced my mother to split her large CD up amongst two banks to stay under 100k and so hopefully, both banks would not fail at the same time and both accounts would not be frozen at the same time.
We’ve been in cash, money markets, precious metals, and cd’s for 14 months now. Our IRA’s are in funds which have a contract “lock” on them. We locked at the top of the market in July 07, when DOW Industrial Av. was at 14150. Sold 2 pieces of real estate in 2005. We have a paid-for house for retirement, but have a small to middling mortgage on the home we’re in that’s closer to my job. Not a problem to pay it at present. However, I’m now taking the next step, buying more non-perishables tomorrow, getting cash out of a bank to keep on hand, getting water, and getting more in the way of precious metals. We may be getting handguns. Not sure. If things go truly awry with the “fixes”, which just might, I think it’s wise to be prepared for disruptions. I’m glad we’re just humble folk and don’t have a lot of attactive-looking property, cars, etc. Spending a few thousand $$ to become better prepared for a disaster certainly won’t hurt us any.
The pundits on KQED’s “Morning Edition” this morning said that both candidates need to “address the problem of falling house prices.”
If they feel a political need to keep Manteca house prices at $500,000, the only way they can do this is to devalue our currency! Since our national savings rate is NEGATIVE .05% the constituency that will be adversely affected by this is negligable.
DEMOCRATS honestly believe that “home ownership” is a God-given right, and house prices are FDIC-insured savings accounts with a guaranteed 9% rate of return.
REPUBLICANS have to prop up house prices to keep J6P wanting to vote for them.
Which leaves ME with no candidate to vote for.
I’ve watched hundreds of hours of “expert” commentary on the current state of the economy and I havent’ heard one person say, “The problem is not that housing prices are falling. The problem is that houses are still too expensive.” I know that everbody here knows that, but if I don’t say it in some kind of public forum once in a while, I may in fact lose my mind.
I go to Euro Pacific and watch Peter Schiff videos when I feel all alone in the world.
Marcus ..You also never hear the “experts” talk about how much Americans need jobs and a manufacturing base and everything that creates jobs for a Country .Down the road when Wall Street discovers that they have cracked the backs of the middle class and the upper middle class ,than maybe what the true solutions were might dawn on some of these bozos .
white collar jobs unemployment rate is under 3%.
http://www.thestreet.com/_yahoo/video/strategysession/10438448.html?cm_ven=YAHOOV&cm_cat=FREE&cm_ite=NA
Why is manufacturing so important compared to health care, biotech, and IT?
I thought democrats were “godless”
So this is the anger stage right ?
Well, only if you have a right to be angry. People who got to live in nice houses for two years with no-money-down and got a free HELOC’s car have no right to be angry! But they are.
Not yet, but the bazooka shots that will bring it on have been fired.
Too bad the bazzoka was made in China.
The bankers are “bargaining” for their future.
The old adage of ” Bears win ,Bulls win ,but pigs get slaughtered ,” to be replace by
“Bears Lose , Bulls lose and win ,and pigs and
criminals get rewarded .
the next term that Americans will become familiar with is “hedge fund”.
I believe that many hedge fund bb of $$ are banking on the MISfortunes of the blacklisted don’t short’m financial companies.
Come October, Newton 111 will be proven right.
Okay, HBB truth squadders, this one’s for you…
I’m going to be attending Homecoming weekend at the University of Michigan in Ann Arbor. My weekend plans include attending this event:
1 p.m. Friday, October 3rd
Economic Forum
Lorch Hall Auditorium (Room 140)
Top economics professionals, including the former Chief Economist of Fannie Mae, will speak about the current state of the economy and what the future holds.
Any HBB-ers care to join me?
Hey Slim,
If there is an opportunity to ask questions and that end could you ask this one for me:
“Since the US Treasury has “swiftly” solved this “financial disaster” in a mere 24 hours…does this now end the argument by some who claim that they… “still see debt people.?”
Thank you.
careful! if you insult him, you might get tased.
Sounds interesting, Slim. Might be worth a day off to attend.
I’ll be around on Saturday. Email me at Oakash1011@aol.com. I’ll be happy to join you - live about 20 mins from there.
Sold my house some time ago, now the woman who bought it and remodelled it into a really cool place just offered it to me for free for next month while she’s gone to her other place. She just wants someone there to water and watch over it. She’s a really nice person (not just based on that). This is prime time in that area, a resort.
Life gets more and more bizarre, proving the Gods must be crazy.
Crazy but smiling on you. Good deal!
Not to want to rain on the Bullsh!t parade on Wall Street today, but isn’t the rescue plan to be worked out this weekend brought to us by the same folks who have been announcing and delivering rescue plans since August 2007 to no avail? If something really really good were available, wouldn’t it already have been attempted by now?
The banking industry is going to pay a heavy price for this recapitalization. It will have to forgo future earnings and accept much, much, more regulation. The insiders and people near these firms know what is coming. Look at the deal equity holders of AIG and F&F got. This temporary reprieve — the period between the plan’s announcement and the details — gives them the opportunity to liquidate their holdings. After months of denial, they are in the bargaining phase.
How much ammunition is left in the bandolier?
And how long will they hold fire when the latest shot goes astray?
Please, Please, folks. Just this last one! We promise we’ll ask for no more after this one last flush of the toxics!.. Its for you folks, after all, not just us bankers, brokers (now that’s a subliminal term) and assorted well off. We’re not asking you to take on this burden we created; remember, we lent you the money, now, its only right that you, or your progeny pay it back….to us….now. Have a nice weekend….we’ll be working till Sunday AM.
At least the politicians stopped any pretense of doing this to “keep people in their homes” and are admitting that its all about the banks.
You act as if the intent of the rescue plans was to provide stability to the economy.
The fact that the markets did not want to extend credit in a declining market or didn’t want to even lend for businesses was a response to the recession looming and declining values after a RE crash . Now because the Paulson Plan believes that its a public good to interfere with Bear market corrections of bubbles or even proper
reactions to risk of loss by credit markets, as in a tight money market ,
I can’t say that we have any thing close to capitalism with these history making actions by the powers that be .
Its a lot easier to get bizarre things through if you claim that everything is a emergency . So what if the gambling companies took their loss and new companies or stronger companies took up the slack .
The Wall Street cheerleaders are foaming at the mouth to find out what the figure is for the new taxpayers grant of funds ,or The Paulson Plan
that Congress is reviewing for bad loan off-loading .I think Wall Street will be mad if the amount is only 200 billion ,because they want 500 billion to a trillion .
It’s a sorry day indeed when the welfare of a Country is determine by
maintaining fake bubbles and wrongful debt policies instead of real production for a Country . 5 condos for everyone .
If they got 20 cents on the dollar and had to amortize their losses over the next 10 years, could you support the plan?
If they are worth 20 cents, why not just sell it for 20 cents? Paulson claims these are “illiquid” securities. That’s not true. They are perfectly liquid, but over priced.
They want the taxpayers to buy over-priced securities . This toxic waste junk paper is bad news . With some of this paper the cash back fraud makes this paper worth minus 20cents . The trashed properties are a minus value and so on . Look at the stuff that has mounted in loss because of borrowers hanging out in the place living for free ,or the stuff that the loan balance has increase because of the interest that has been added on because of creative low payment loans that really charge higher interest .
Why do you think the banks don’t want this paper now and its a joke trying to sell it . Only the government will buy something that is junk and called it a potential for taxpayers to make
money . This is outright fraud speak to say this is a winner for
taxpayers .
Markmaven …paying 20 cents on the dollar for toxic waste and than making
the companies pay their losses for say 10 to 15 years spread out ,is a viable way of solving the problem I think ,maybe .
to my surprise there were some sceptical commentaries on Dutch TV about this new RTC plan. Severe doubts regarding the enormous amount of money required, and if it will accomplish more than a temporary pause. Of course they are totally silent here about the even bigger cash injections from the ECB …
I am a person with very little knowledge of how the financial markets work, so all of my money is in CD’s. I could not afford to gamble on a situation I don’t understand. I am retired but I have no debt and I rent.
I watch the stock market and read this blog to try to educate myself.
However, I do know if you want an answer to most anything just “follow the money”
I am suspicious of the vast swings in the market this week.
I know the powerful always protect themselves at the expense of the less powerful.
To me it looks like they ( the powerful) drove the market down this week to get the government to step in. Now they are driving the prices up to the stratosphere so they can sell and preserve their money. This will leave the smaller investors losing most of the money when this market comes crashing down.
Some one tell me if my logic has any merit. And if so what should small investers do. Sell while they can?
I pulled most of my long-term (retirement) money out of stocks earlier this year. It’s sitting tight in Treasuries for the foreseeable future.
“Some one tell me if my logic has any merit”
i think there is logic in what you are saying. i starting wondering that with the oil markets. these investment banks put out predictions on pricing and all of a sudden lots of money pours in, thats their que to sell, leaving the followers holding an empty bag. the samething happened in the housing market, the last investors in, got burned!
BJ, I basically agree with you. Its a trader’s market, and before long, you are going to see some serious profit taking start to happen, which should bring the market back down. Small and nimble traders are just as welcome to take some profits off the table as the big guys are, so I don’t see it as a clear cut “big vs. small” issue.
No question the “buy and hold” investors (of any size) are taking a lot of hits. Every strategy has its time and season, and this isn’t theirs.
How can small players make a profit without the inside information that the large players have? I mean, who could even predict half of the rule changes that are made… at 2AM??
What about opening the market for the “big players” on the weekend?
Heard a report that 1000 hedge funds are on the rocks. Probably blown up shorts.
what percentage would that be?
Myriad shorts and the hedges were killed with one bazooka shot. That is what I call shock and awe!
More dollars doing a disappearing act.
The moral justification of capitalism does not lie in the altruist claim that it represents the best way to achieve “the common good.” It is true that capitalism does—if that catch-phrase has any meaning—but this is merely a secondary consequence. The moral justification of capitalism lies in the fact that it is the only system consonant with man’s rational nature, that it protects man’s survival qua man, and that its ruling principle is: justice.
—Ayn Rand
Watched a rather trippy movie on Turner Classics a few nights ago…
It was filmed in 1932 and released in 1933.
Much of the economic dialogue in it sounds current!
http://en.wikipedia.org/wiki/Gabriel_Over_the_White_House
California EDD - “California’s unemployment rate was 7.7 percent in August, up from a revised 7.4 percent in July, the state Employment Development Department (EDD) reported today. A year ago, in August 2007, California’s unemployment rate was 5.5 percent.”
The star is collapsing, and the federal government is spending its time trying to fuse iron, in the hopes of getting the nuclear furnace running again.
Uh, that would be a 2.2 percent increase in CA State unemployment over one year. And by the way, a 7.7 percent unemployment rate puts us in recession territory.
Here in leftcoast Appalachia otherwise known as the Central Valley, unemployment is closer to 15%…
That’s not new. And you should know it. Seasonal farm labor is the biggest reason for the double digit unemployment rate. I’m from Fresno and I used to avidly read the Fresno Bee. Double digit unemployment for much more than three decades in the central part of California from Redding to Bakersfield and surroundings.
No worries. As soon as Paulson outlaws unemployment, we’ll be back on track!
8.9% in Michigan now.
The boyz in NYC and DC are in uncharted galaxies; their juicing up the nuclear fusion furnace with this death star may cause us to go supernova where heavy metals reign supreme or, go black hole. Any astrofinancophysicists out there with a cheery outcome to pep me up? I need it quick or its back to Captain Morgan.
Have another Captain Morgan for me in honor of “Talk Like a Pirate Day.”
Me hearties, I believe there be an unwelcome load o’ landlubbers about to pillage me booty. Scurvy scalliwags, they be! ARRRRRRRHHHHHH!
The LHC broke down. We live another day.
Buffett’s “time bomb” goes off on Wall Street
http://www.reuters.com/article/newsOne/idUSN1837154020080918?sp=true
When the credit default market began back in the mid-1990s, the transactions were simpler, more transparent affairs. Not all the sellers were insurance companies like AIG — most were not. But the protection buyer usually knew the protection seller.
As it grew — according to the industry’s trade group, the credit default market grew to $46 trillion by the first half of 2007 from $631 billion in 2000 — all that changed.
is this how much money we have to come-up with?
It remains to be seen whether Uncle Buck will receive a “get-out-of-jail-for-free” card as part of yet another housing rescue plan with a preliminary price tag of $500bn-$1t.
Remember when BB said the subprime tab would amount to $200bn, total? When was that — Summer of 2007 or so?
latest news
Bush: Democrats, Republicans must solve crisis together
CURRENCIES
Dollar slips as investors weigh U.S. rescue plan
Greenback holds some gains vs. yen, but pressured by fiscal impact fears
By William L. Watts & Lisa Twaronite, MarketWatch
Last update: 12:24 p.m. EDT Sept. 19, 2008
…
The Bush administration and congressional leaders have neared agreement on the outline of a plan that would see the formation of a new government entity that would take bad assets off the balance sheets of financial firms. Read about the plan.
But the massive size of the bailout will likely have negative impact on the U.S. fiscal position, and even raises fears of an eventual U.S. sovereign downgrade, wrote currency analysts at Action Economics.
“The dollar has moved to or near intra day lows versus virtually all major currencies, as the foreign exchange market is apparently taking a bigger picture look at the greenback,” they said.
“Perhaps it is too early to speculate on the broader impact of a bailout, but at this point, it looks as though the foreign exchange market’s sentiment toward the greenback has soured significantly in the past several hours,” they added.
Gross is saying that it should be at least 65 cents on the dollar for this toxic waste . Is anybody getting a idea of how much Wall Street wants
the taxpayers to overpay . Recently ML sold some of that junk for 22 cents on the dollar .
“Gross is saying that it should be at least 65 cents on the dollar for this toxic waste”
What is his reasoning for “at least 65c/$”? Does he want a pink pony thrown in for good measure?
When Gross profits are more than net profits, something’s wrong.
His company will probably be tapped to manage the assets. For a small fee of course.
In so may words Gross just said that the rescue people just need to put chips on the table . My take on what he was saying was that taxpayers just need to take a loss . I was just wondering why the
true people that created this mess and created the losses by this greedy loan gambling wasn’t just told the same thing 6 months
ago .
Gross is on crack. With growing public disgust, bankers would be lucky to get a bonus.
I just read that the last time there was a market rally of two days like this was 1929.
GEORGE WILHELM HEGEL:
What experience and history teach is this — that people and governments never have learned anything from history, or acted on principles.
This sort of thing happens in 3rd World Banana Republics all the time. Politicians buy time for the moneyed class and then the entire system crashes hard! I would not be surprised to see capital flight and a dollar crash after the details of the plan are made public.
What I don’t get is all the volatility in the market. I am very under educated in the workings of the stock market. However, it seems to me that the vast swings down 300, up 300 etc. indicate an underlying instability. Is this correct? Why haven’t I seen the MSM discussing this?
Stars End
P.S. Be gentle with me, I am trying to learn!
Political uncertainty is a big factor. When market regulators frequently change the rules while the game is in progress (e.g., banning short sales, guaranteeing underwater mortgages, corporate debt and money market funds, etc), surprised market participants tend to get very jittery. Many who used leverage are forced to sell when their reasonable bets are undermined by unanticipated policy changes, a phenomenon which tends to exacerbate market swings.
Stars,
A great read of what’s happening is “The Great Crash-1929″ by Galbraith.
Everything that’s going on right now is almost exactly the same thing as what was happening in 1929, crazy market swings up and down, solutions proffered and cast asunder in search of another solution and then another, until Newton’s Law felled the Big Apple…
Back then the credit bubble was built around stocks, ours was built of ticky-tacky-boxes.
“ticky-tacky-boxes” and toxic toilet paper
Oh, another big difference…
The USA had the lion’s share of Gold in the world in 1929, and had plenty of money, and we were the largest oil producer in the world, by a large margin.
We were quite the creditor nation as opposed to today’s model~
The fact that Paulson said that they are now going to insure money market accounts was something acceptable to me .
The market always sold money market accounts as if they were safe
anyway ,so why not just do it . The problem is that this will cause
the FDIC insured accounts like CD’s and savings accounts ,fixed accounts,etc to have a disadvantage now in terms of market saleability verses money markets . Every time something is done it set off a reaction in another area .
FDIC has no money (just treasuries) so effectively money markets == FDIC insured only without the “limit” that exists on FDIC accounts.
With rules changing so fast, possession becomes 9/10’s of the law.
Given the guarantee, wouldn’t it be wise to park monies in excess of $100K in the riskiest possible (i.e., highest yielding) money market accounts?
You would think they would have limits on Money Market accounts just like they do on FDIC accounts . I would think the market would bring down the yields on Money Markets accounts because they are now safer .
As far as I’m concerned the real market way of restoring confidence is by insurance on something that is considered
risky. The insurance has to be private and backed by viable funds .
The government insuring something is a joke .
Could someone please explain how to distinguish investor relief from panic selling?
latest news
Obama calls for emergency plan for working families
BOND REPORT
Treasurys plunge most in two decades on rescue plan
Mortgage debt rebounds
By Deborah Levine, MarketWatch
Last update: 2:54 p.m. EDT Sept. 19, 2008
NEW YORK (MarketWatch) — Treasurys plunged Friday, sending yields on benchmark notes up by the most in at least two decades, amid investor relief that the U.S. government is planning a broader solution to the financial crisis.
if you bit on OCT puts on TLT when treasuries rallied to 0% this week….
you made moneys on treasuries PLUNGING, in the face of a screaming global short covering rally, in equities.
this rewards the savers,
or in some cases, the coin shavers.
I’ve been watching TLT since you recommended the put. Good call. (er..put?)
The Bush administration sketched out a multi-faceted effort on Friday to confront the worst U.S. financial crisis in decades, outlining a program that could cost taxpayers hundreds of billions of dollars to buy up bad mortgages and other toxic debt. Relief washed over Wall Street with a surge of buying.
on the front page of yahoo!!!!!! isent it enough to make you lose your lunch on the keyboard!!!!!!
This may be a dumb question but why can’t the Fed Gov’t start selling it’s physical assets to help pay for this? I know they own millions of square miles of land, the probably own thousands of buildings, etc. This alone, I would think, bring in several billions of dollars.
Good idea, but the banking lobby already own the White House and the Capital building and they’re not likely sellers right now. Maybe selling the national parks to Halliburton, the states of NV and AZ to the Chinese and Virginia to India, while auctioning off the Great Lakes to Middle East countries may help grab some needed cash for the Treasury coffers.
Sell ANWAR and the coastal shelf to Halliburton?
That’s a better idea, PB, the national parks would be easier to sell to Disney.
Sell Disney to Iran.
My father and law, in light of Palin’s secession desires joked that we should just sell Alaska back to Russia and see how Alaska responds =P
grr.. father-in-law… didn’t catch it in time
Palin has made me feel like veep timber because when I was working in Prince of Wales (Seward Peninsula) AK one summer, I saw the Russian shore a few times on clear days.
Correction: the federal gubmint doesn’t own that land, you and I own that land. As far as I’m concerned, it’s not for sale.
Semantics do matter, they’d like you to think it’s not public lands, that way you don’t protest when they do whatever the heck they want.
Amen, Lost!
It’s easy to lose sight of that fact. Thanks for the reminder.
Show me the contract that says you own part of that land. The greatest fallacy is that because you are robbed to pay for something you own the thing that was purchased with your stolen money.
Show me the contract that says I have delegated my authority to government to do ANYTHING. Show me how I sue my representative for breach of contract?
No, those in power are not accountable to the people whom put them in power because the people have no means to remove them from power or withdraw their delegation of authority nor punish them for their actions. Once they get power it is theirs for their term to make the most of it for their gain.
We elect dictators who act on their own will for their own ends.
Amen. The part that is really bothering me is Hank Paulson . I guess I have never seen such power given to one man while Congress and the Senate just sit there giving him free rein .
Observer . You are missing the point that it is not really the taxpayers
debt to sell government assets ,unless Paulson makes it our debt . The true debt is the lenders and Wall Street investment firms and Hedge debt to take the loss .
The US stock market is down only a bit for the week, and all it took was the announcement of an unprecedented and historical plan to have the federal government take on the bad assets of the financial companies, possibly costing taxpayers tens to hundreds of BILLIONS of dollars.
Yes, even with the announcement of the coming Paulson/Bernanke plan, the US market was still down for the week.
Money well spent, methinks…
“The US stock market is down only a bit for the week”
(Relative to Friday of last week)
Just look at Italy.
“Man is a strange animal. He generally cannot read the handwriting on the wall until his back is up against it.”
Adlai E. Stevenson
Aladin,
I am looking for advice on how best to buy gold. With today’s move I have given up on the U.S and want to do everything to protect my purchasing power.
No riddles, just straight up advice please…
I want to move 100% of my IRA/401K into GLD (gold etf).
I want to put all of my cash savings (except 10K cash) at Kitco and/or the Perth Mint.
Any recommendations? I want to hold physical gold but not sure how to go about it. Please help.
newbie:
I don’t like Gold etf’s, as they are just paper trojan horses masquerading as the real deal, so no recommendation there.
I also have no experience with the Perth mint or Kitco, sorry.
If you live in a bigger city, there will typically be around a dozen coin dealers in the yellow pages. Google their business names and find out how they treat customers.
Coin dealers of size tend to be very honest, as all transactions are in the real deal, physical metal.
The tend to only take cash or cashier’s checks from major banks, for payment.
Keep it simple and buy bread and butter bullion, 1 oz Eagles/Buffaloes, Maple Leafs or Krugerrands.
Do not get sucked into buying numismatic coins, you just want the straight bullion ticket.
Hi guys,
Also a very concerned newbie here. Very worried about my money/nest egg parked in a money market account and that inflation, etc. will surely erode its value - and fast. Anyway to protect it against what you think will be a likely scenario given the recent turn of UGH-vents.
Have half a mind to plug it into some kind of foreign bond/account/cash. Any way on how to do this? (Also looking for growth as well as capital protection.)
I am profoundly disheartened by what we’ve seen. I just see myself getting increasingly poorer and will have nothing to rely on in my retirement. I’ve been trying to keep up with this site ‘religiously’ but am still at a loss on what to do. Instead I am stuck in a money market account that is eroding in value…..
Thanks in advance.
You can buy gold at coin shops, or online from kitco. There are others.
You can buy Perth if you don’t want to hold it yourself, there are other places where you can do the same. Maybe someone will pipe up with additional info on that.
If you just want gold to buy yourself that you hold, go to a coin shop. Preferably somewhere they don’t charge sales tax on gold (Arizona is one example, Oregon I think, Texas I think also does and Oklahoma. Those are the ones I’m aware of). And if you spend more than 9,999 in a cash transaction, the coin shop is supposed to report the transaction to the IRS.
yikes!
[ Hey Bill, love your posts. I am in tech too, btw ]
I know this is extreme, but asset allocation be damned.
I don’t have the intelligence or the guts to “invest” in this secular bear market. I have been busting my hump for nearly a decade and have nothing to show for it. I kept silent when people around me were buying houses, suv’s and toys.
The last thing I want now is to find out that the paper money I have been accumulating all this time is nearly worthless. I am moving into gold - lock, stock and barrel.
Thanks Newbie. You did what I did - not buy a house and SUV when others were doing it. 100% gold is not really the way. 100% of anything is not the way. If you were astonished by the panic buying into real estate and toys, you should also be astonished by panic buying into the next asset.
That could be precious metals. But I have yet to see the sign. My coin dealer today (Saturday) in MD had enough gold bullion coins for me to buy (what happened to the shortage of gold bullion we heard so much about the last month or so?).
One of my investments I’m very confident in is my municipal bond fund. I’m confident because few people have been promoting municipal bond mutual funds. If you go for 4 star funds with mostly AAA municipal bonds and maybe diversified into several states (Alliance Bernstein muni bond funds do that), you would get a modest yield. Four years ago 4% looked bad. Now 4% looks good.
Same thing for savings bonds. Very few people liked them this decade.
A troll?
If not - then my advice would be to definitely not put 100% of your savings into PM’s. It’s too risky. Spread things around.
Best method is to buy physical coins. Check out local coin shops.
If you want more complete safety then if possible keep it overseas, though logistically that’s difficult.
thanks for your feedback. no… not a troll!
just someone who’s overly anxious….
how about using everbank? haven’t heard anyone say anything about it. if so, which currency should i consider and at what level?
thanks again.
http://biz.yahoo.com/ap/080919/financial_meltdown.html
“In a session with House Democrats, they described a plan where the government would in essence set up reverse auctions, putting up money for a class of distressed assets — such as loans that are delinquent but not in default — and financial institutions would compete for how little they would accept for the investments, said Rep. Brad Sherman, D-Calif., who participated in the call.
“You give them good cash; they give you the worst of the worst,” Sherman said of the plan, which he complained that Bush and his economic advisers were trying to panic lawmakers into rubber-stamping.
Paulson rejected Democrats’ calls to include tighter regulations, corporate reforms or limits on executive compensation as part of the measure, Sherman said. “He’s doing his best to paint a picture of the sky falling, and then he says, because the sky’s falling, you have to do it my way.”
The people behind this plan are nothing but the lowest of the low. They’re selling this by saying this is an emergency, this is the only plan that will work, it must pass quickly, and if not enacted those that opposed it will be responsible for whatever happens. These thieving thugs put us on the path to GD II. They should be imprisoned, not instead given what little remains of our collective wealth.
This Paulson and BB Bail-Out is really starting to make me question
where did all that money go that BB put up to banks in short terms
loans based on their toxic waste paper .I have counted about 500 billion myself on those short term loans . Could it be true that all those
Banks are defaulting now on those short term loans ,and that is the toxic waste that Paulson wants to buy at this higher value ? I’m telling you ,I’m smelling a rat . The taxpayers might of already lost the money .