Bits Bucket For September 22, 2008
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Reading the paper this AM, I am not so sure how fast any massive bailout will pass Congress, as the Democrats are already taking a stand demanding more oversight of the Treasury, pay limits for corporate leaders and help for homeowners with problem loans.
“”This is a de-facto nationalization of the entire banking, insurance, and related financial system. Specifically:
“(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;”
That’s right - every bank and other financial institution in the United St@tes has just become a de-facto organ of the United St@tes Government, if Hank P@ulson thinks they should be, and he may order them to do virtually anything that he claims is in furtherance of this act.
This might include things like demanding that a bank or other financial institution sell him its paper, even if it forces that firm to collapse and be assumed by the FDIC!””
from: market-ticker website
continued:
“”Bottom line: This bill gives P@ulson the ability to nationalize an UNLIMITED amount of private debt and force YOU AND YOUR CHILDREN to pay for it.Sec. 8. Review. Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency. If you are a bank, investor, or other entity who is forcibly gang-r@ped by Secretary P@ulson due to his actions as “King” (crowned by C@ngress) under this law, you are unable to seek redress in the courts or by administrative action.””
from: market-ticker website
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Here we’ve arrived at the sticky center inside the candy coating.
Once again, The Authoritarianism Is Cool Posse wants to eliminate any pesky oversight mechanisms. Raise the red flag.
Luckily, the pushback has already begun w/r/t Section 8. But how evil do you have to be to try to grab dictatorial powers in the middle of the nation’s financial meltdown?
Had this gone through, between Section 3 and Section 8, Paulson would have had authority not only over anything remotely connected to the banking system, but also to seize the property of anyone with a mortgage–whether it was in default or not. And the courts wouldn’t be able to stop him.
Evil, pure, evil.
non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
This alone ought to get Paulson tossed out on his ear. Even on his way out of the plane, he’s slitting everybody else’s parachutes, out of spite, it seems.
Luckily, it looks like those in charge of the House of Reps picked up on it. Will they defy it though? Beats me…
Paulson is a later-day Charon, Ferryman of the Debt.
Bob Pisani is reporting traders are remarking this morning that it doesn’t matter so much who is elected to be our next President. The real question is who is going to be the next Treasury Secretary.
DUH!!!
This was, like, soooooooooo obvious two years ago. The economic problems are so large that it largely is irrelevant.
Was that DUH aimed at me or BP?
The point is its being admitted in front of the masses. That is a change.
I never could stand Bob Piss On Me. What a whore. He should be pissed on.
Wow !
Capitalizm in America is in trouble, because of the spineless wimps running the government. Here comes my rant. The strength of capatalizm is that the smart people will be given the reins of the economy and will control where to invest the available capital. This occurs after the stupid people have lost their money and the smart people come in and rebuild from the collapse. The bailout has disabled the most important feature of capatalizm, and the result is that the stupid people will remain in power and continue to bubble invest.
The smart people will board a ship to a place where capatalizm is strong. This is already happening, there is an American Billionare (forgot his name) who moved to Singapore and sold most of his Dollars. Smart dude, I wish I could use his stratagy.
“there is an American Billionare (forgot his name) who moved to Singapore and sold most of his Dollars. Smart dude, I wish I could use his stratagy.”
Oh, yeah, Jim Rogers. He’d better be careful he doesn’t tie his bow tie the wrong way or he’ll find himself rotting in jail and his billions confiscated.
The Democrats seem to be the voice of reason in this whole mess and it really doesn’t make sense to a conservative like myself. One of 2 things need to happen here:
1) The market fixes itself and we have a complete meltdown in the meantime.
2) The government bails out the financial system while providing relief for homeowners who actually live in thier homes and bought as a place to live, not an investment. The “investors” must surrender the homes and have their credit marred for 7 years.
I just Googled McCain on bailout and he’s in support of it. That’s going to help him, I guess, though not so much with the little guy.
(CNN) — Sen. John McCain on Monday told voters he was “greatly concerned” about the government’s proposed rescue plan because it gives Treasury Secretary Henry Paulson too much power.
Sen. John McCain said Monday that he has concerns about the treasury secretary having too much power.
1 of 2 “Never before in the history of our nation has so much power and money been concentrated in the hands of one person,” McCain said at a town hall meeting in Scranton, Pennsylvania.
And just last week said he was “100% behind Paulson”.
Has this guy every told the truth and expressed an informed opinion of his own?
Obviously, he’s concerned AND behind Paulson 100%.
(CNN) — Sen. John McCain on Monday told voters he was “greatly concerned” about the government’s proposed rescue plan because it gives Treasury Secretary Henry Paulson too much power.
Sen. John McCain said Monday that he has concerns about the treasury secretary having too much power.
“Never before in the history of our nation has so much power and money been concentrated in the hands of one person,” McCain said at a town hall meeting in Scranton, Pennsylvania.
Sadly, #2 will never happen!
Even though Harry Houseflipper already got tens of thousands of dollars of tax breaks–no income tax on forgiven mortgage debt–they’re still being paraded around as victims by the Democrats. And even by some Republicans.
(That’s at least $35,000 gift for every $100,000 forgiven)
If you have to raise taxes, raise EVERYONE’s taxes! That’s my main beef with Obama! Why don’t we raise EVERY tax bracket, from 10% to 35%, up 1 point?
How about boosting the capital gains tax? One of the incentives for real estate “investing” was the low cap gains tax.
I’m not against tax increases. I agree with you.
Here are three good ones!
1. No Cap Gains break on sale of home UNLESS you only have 1 home and the money was used to buy another home within 1 year.
2. NO mortgage interest deduction! (And I’m not some bitter renter! There was a time I took this deduction, until it was elminated by AMT and then by me paying off house)
3. NO deduction for PMI premium (OUTRAGEOUS!)
Houses began moving “off trend” in 97 which happened to be the same year the cap gains rules on a home switched from $150k once in your life, to $250k as long as you’ve lived in it 2 of the last five years (effectively 0% for almost all homeowners). That’s the first cause of the bubble (next was a stock market crash and concequential low short-term interest rates).
I remember George HW Bush talking about the “owership society”. Didn’t this mess really begin with him?
We’re creating[...]an ownership society in this country, where more Americans than ever will be able to open up their door where they live and say, welcome to my house, welcome to my piece of property,” Bush said in October 2004. Google for the rest!
Clinton took office in January 2003.
RE: Democrats seem to be the voice of reason in this whole mess
http://biz.yahoo.com/ap/080922/financial_meltdown.html
WASHINGTON (AP) — Judges could rewrite mortgages to lower bankrupt homeowners’ monthly payments as part of congressional Democrats’ proposal for a $700 billion financial system bailout.
Also, companies that unloaded their bad assets on the government in the massive rescue would have to limit their executives’ pay packages and agree to revoke any bonuses awarded based on bogus claims, according to a draft of the plan obtained Monday by The Associated Press.
The proposal by Sen. Chris Dodd, D-Conn., the Banking Committee chairman, gives the government broad power to buy up virtually any kind of bad asset — including credit card debt or car loans — from any financial institution in the U.S. or abroad in order to stabilize markets.
WASHINGTON (AP) — Judges could rewrite mortgages to lower bankrupt homeowners’ monthly payments as part of congressional Democrats’ proposal for a $700 billion financial system bailout.
Well, they certainly can’t (or at least shouldn’t) rewrite the rates to the “teaser rate” or the “i/o” rate. It would have to be the prevailing rate for a 30 year fixed (6.25%?)
How man of these “bankrupt homeowners” could actually afford to pay off a real rate? Most could only afford their house because they were paying a neg-am amount on an Option-ARM, or a teaser rate.
Someone needs to explain to me how ever-increasing house prices (desired by Barack) somehow make houses “affordable?” Anyone who tries to explain that that’s a good thing is simply nuts.
Getting back to the quote: If we allow judges to rewrite existing contracts–say to switch the person to a fixed 6.25% mortgage,
then:
1. That person needs to pay PMI until he has 20% equity (forever?)
2. That person should have to give up his “no recourse” rights!
RE: as the Democrats are already taking a stand demanding more oversight of the Treasury, pay limits for corporate leaders and help for homeowners with problem loans.
These worthless double dealing POS’s enabled this entire mess.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aSKSoiNbnQY0
Can we all just agree that this whole era was a bipartisan failure?
Let me amend that–except for Ron Paul.
CVG,
Ron Paul has been a beacon of truth in a sea of sewage.
Mike
I’d never vote for Ron Paul simply because he wants to dismantle the Fed and hand monetary policy decision over to Congress.
Talk about Armageddon! Congress holding sway over monetary policy…and you thought things are dire now?
I’d rather have the govt control monetary policy than a private enterprise (the Fed). At least that way we might actually get something for our money.
RE: Can we all just agree that this whole era was a bipartisan failure?
CVGuy…AGREED!
I agree, both parties are to blame for this mess. Finger-pointing about the Republicans or the Democrats seems to me like arguing which team (offense or defense) was on the football field when the game was officially lost. It really doesn’t matter.
The point is, the guys who were calling the shots and sending in the plays (lobbyists and Wall Street pigmen) screwed up the game plan and, even though we were WAAAY ahead at halftime, we got all our points taken away in the second half because someone bothered to look at replay booth and noticed that all of our scoring plays happened out of bounds…
Securitization with manipulation of the rating agencies was the # 1 problem. As soon as companies could off load risk, the gambling started.
Fannie and Fredie are just one of many domino’s in the chain of offloading risk. If they were the only problem then the fix was nationalizing them. Obviously with the new proposed 700 billion dollar bailout the wound is much deeper than the GSE’s.
I’m wondering if old Hanky Panky didn’t get some marching orders from China or some such thing. I don’t think that’s tin foil hat at all. He’s been just a tad to cozy with China, doncha think? And given the fact that they hold (supposedly) an awful lot of toxic debt, it wouldn’t surprise me if, in one of those “global” financial conferences, Hanky was told to do something or else. Because his proposal is one of sheer desperation or complete insanity. Nossir, it wouldn’t surprise me in the least. This is Hanky’s last stand here. No, they won’t use polonium, but if I were Hank, I wouldn’t order the pork fried rice anytime soon. Or the shrimp with lobsta sauce.
We could only hope…
The article you refer to was written by the same genius who wrote “Dow 36,000″ just before the tech bubble burst.
ha, ha… and he is an economic advisor to McCain.
Palin, Hassett, Graham - the GOP’s idea of competence - *snark* (Please do not vote for these people in November - pleeeese.)
For a more informative and accurate fingerpoint, see the Moyers interview with Kevin Phillips. The economic failures are bi-partisan, began 20 years ago and were all done to better the lives of the very rich. http://www.pbs.org/moyers/journal/09192008/watch2.html
Class warfare has been waged by the rich for a long time now!
Divided is how we fall. Together is how we survive.
Work to stop the continual socialization of risks and privitization of rewards by contacting your Senators and Representatives and telling them to just say “NO” to the bailout.
If McCain/Palin wins, Phil Gramm for Secretary of the Treasury. Then we’ll really see something!
He’ll just tell us it’s only a “mental recession.” *
Heckuva job, Grammie!
* (Actual pearl of wisdom from Sen. Phil “Economics Is My Middle Name, Bee-yatch” Gramm.)
Addendum:
McCain campaign spokesperson Tucker Bounds was on MSNBC yesterday, and was pressed on whether McCain could rule out Phil Gramm as a possible Treasury Secretary.
Bounds refused to give a straight answer.
IIRC, Gramm was instrumental in the repeal of the Glass-Steagall Act in 1999. I thought I read Biden wasn’t opposed to it either. I agree, Gramm is one dangerous parasite. Gramm is one of McSame’s economic advisors. OY!
Wouldn’t it be ironic if through their stalling and procrastination, the Dems in Congress end up abetting the free market shake-out?
i think thats the best we can hope for. btw, how have you been? i hope you are feeling better.
Thanks for the nudge on the shoulder, takingbets. Ahansen, I also hope you are feeling better. And that goes for your two best friends with 8 feet.
You’re a remarkable lady. Bring us all up to date, if you wouldn’t mind.
The Democratic measure also would require the Treasury to use its status as the new owner of billions of dollars in mortgage-backed assets to reduce foreclosures by forcing banks to rewrite loans for distressed homeowners and forgive a portion of their debt. And it calls for a strict regimen of oversight, including independent audits and regular reports to Congress.
Bush Urges Quick Passage of Bailout Package”
As a true blue Dem, I cannot believe that the cowards in Congress are going to give in to this lying, corrupt Administration and pass this massive, bankrupting, bullsh*t bailout.
Did they learn nothing from the Iraq War vote?
When both Paul Krugman and Bill Kristol think something is a bad idea, maybe you need to step back.
This is a sad day.
“When both Paul Krugman and Bill Kristol think something is a bad idea, maybe you need to step back.”
Absolutely.
The bailout could potentially shift the debt from one bagholder to another, but it could not make the debt magically disappear.
It’s like that pink stain in the Cat in the Hat!
Exactly. What a bunch of spineless wimps.
Oh, I dunno - I’m watching CSPAN atm, and am heartened by the spleen showed by reps from both sides of the aisle.
You never know…. then again, I’m getting used to being dissapointed.
I’ve also been cautiously optimistic about the objections raised on both sides of the aisle, even by congressmen who ain’t worth a warm bucket of spit (as the slightly revised saying goes).
The proof will be in the final draft and final vote, of course.
How many times are we going to hear pointless bleating from our government reps before they ultimately cave. I’ve lost any expectation of spine.
Ed, I like your anger.
“Ed, I like your anger.”
+1 Agreed!
Mr. Hopper and I have become good friends because of this blog. I always enjoying hearing his views on politics. There is no question that he is mainly partisan on these issues. But the balance that his post shows is that his is not mindless partisanship. This is how people maintain credibility. They might support a side but they still hold it accountable. It is refreshing to see somebody question their own side. I, too, am amazed that the Democrats are rolling over for this. To hear Dodd talk about Paulson you would think the two of them are headed to MA for a wedding ceremony.
There are only two sides to this argument, Us and Them. We ain’t them!!
I meant Democrats and Republicans. It is nice when you see a Democrat hold Democrats responsible and a Republican holds Republicans accountable. It would be a much better system if the two sides weren’t blind to their own faults.
I don’t mind saying that if the Dems take on that clause about the Secretary not being accountable to review and/or a court, and refuse to back down, I’ll be cheering them on.
Thanks NYCB. I think I’m a partisan Dem, mainly because I follow a progressive-democratic philosophy of Government. But when the elected Dems act like this, they get no support from me
i can’t believe any congressman would pass the paulson bill. at the worst it’s a coup by the banksters.
at the least it’s a huge transfer of power from the legislative branch to the executive branch.
constituionally it’s just crap.
You know what just boils my shorts?
When something momentous like this bill comes along, and we get these warnings from the White House that Congress needs to deal with the bill as expeditiously as possible, and not weigh it down with any extraneous issues (like executive pay). There’s time to deal with that later.
And, as we know, “later” never comes when it comes to dealing with this White HOuse. So, I hope whatever Congress comes up with, they weigh that sucker down with enough terms and conditions to make George Bush cr*p his pants. It’s times like this when I’m really, really glad the president doesn’t have a line-item veto…
I have been puzzled by the lack of opposition in congress. We have an opposition party controlling congress, that seems to be acquiescing to a huge power grab by the executive branch. In general any time a bill is passed quickly, we end up with terrible legislation (think Patriot Act). Another thing that is generally true, is that once legislation is passed, no matter how bad it is, it is almost impossible to roll back.
Is it just possible that the Dems know something we don’t. Maybe they aren’t rolling over. Maybe this situation is much more dire than we know. Since when does Pelosi ever roll over to Republicans?
From Krugman’s column today:
http://tinyurl.com/4yblzq
“Some skeptics are calling Henry Paulson’s $700 billion rescue plan for the U.S. financial system “cash for trash.” Others are calling the proposed legislation the Authorization for Use of Financial Force, after the Authorization for Use of Military Force, the infamous bill that gave the Bush administration the green light to invade Iraq.”
I’m willing to supply Paulson with an unlimited amount of trash for far less than $700B.
“I’m aware that Congress is under enormous pressure to agree to the Paulson plan in the next few days, with at most a few modifications that make it slightly less bad. Basically, after having spent a year and a half telling everyone that things were under control, the Bush administration says that the sky is falling, and that to save the world we have to do exactly what it says now now now.”
Congress should not let itself be railroaded into a bad bill and especially not rushed into supporting a bad bill. I remain skeptical that this plan can possibly work given the immensity of the problem.
Krugman is the best. I read him religiously every Monday and Friday.
I asked my former MS broker if his company used leverage and he flat out said no. Was he lying or just going along with the party line?
Flat out lying (or clueless.) They were levered 35 to 1.
Jeebus, what a total m*ron. I’d fire him instantly.
Well, you can’t expect the average acct mgr to know, can you? But they’ve got to say something to reassure you…LOL.
Notes on a Scare Card:
In the early 1930’s, there were a lot less policemen than we have in today’s employ, as we’ve ramped up our security state to deal with it’s miscreants, real or imagined.
Very soon, in a bizarro world version of the Collapse of the Soviet Union just a generation ago, the state will not be able to pay for these officers of the law.
What happens then?
I recommend Dmitry Orlov’s “Reinventing Collapse”, his first-person tale of being in Russia, as the state mechanism broke down, and his comparisons of the Soviet Union and the USA.
He’s a good writer and language twister…
The Dems are going to extract concessions and force changes to Paulson’s bailout bill, as well they should. The bill could conceivably fail, either by Dems not getting their way on enough issues and therefore voting against it, or by overloading the bill with their preferences and causing Bush to veto it.
Is it possible that the best outcome would be no bailout bill at all?
“Is it possible that the best outcome would be no bailout bill at all?”
Yes. After all, no one rushes in while a hurricane is in progress to do a massive cleanup effort. Perhaps here and there during a storm, you might have a small rescue effort or two if it is not too risky for the personnel involved. Otherwise, you just hunker down and let the storm sweep through. Afterwards, you assess the damage and do what needs to be done.
I watched Hank Paulson on Sunday. He hasn’t a clue, because he doesn’t know and can’t even say if this plan of his would work. He just kept saying “It has to work”. He needs to be muzzled right now.
That was something I picked up on, too. “It has to work.” Talk about sounding desperate for something, anything, to work.
He knows the truth. If it doesn’t work, we’re headed for Great Depression II, and the collapse of the average American’s standard of living.
The average American’s standard of living was going to decline anyway. You can’t control the market as you like.
So rather than having the credit market disappear, the printing presses will go fullblast, pushing inflation even higher….
I reckon Bush strategeries don’t work too good on economics.
It reminded me of the awful movie Armageddon–when NASA sends Harry Stamper (Bruce Willis) to plant a nuke inside an Earth-bound asteroid. NASA has no idea if the plan will actually work and puts its faith in the fact that “it HAS to work.” It’s a fine philosophy for a matinee–but I don’t want to bet the house on it…
In real life, NASA knows it wouldn’t work, and would make it worse (according to current studies). The movie would be better if NASA objects to the plan, and a bungling president and congress force them to do it and well all die.
The sticky point here is the timing of the election. Continuing your metaphor, people would be asked to vote exactly when the winds die down and there’s the most debris all over the place. Do you try to punish the party who caused the “hurricane,” or do you vote for the party who is best qualified to clean up? What if the two are the same party?
What a mess.
And Hank has been so correct so far, too! You cannot stop a TSUNAMI.
Im curious lad, why do you so distrust people who have guns in favor of trusting other people who have guns?
I’ve had the pleasure to travel all over the 1st world, a world with rifles and shotguns, but not handguns.
Rifles are fun to shoot, and i’ve blasted away all over this orb, and shotguns are ok and a can’t miss option with rattlesnakes, and we have both @ our disposal, here on the aladinsane ranch.
As we’ve desensitized multiple generations to the idea that violence is acceptable, especially so when it’s life-like and if things don’t go your way, you can just hit the replay button and start over, will we descend into some sort of madness of might makes right, powered by easily concealable weapons that everybody seems to have?
I think so.
Do I want to always be on my guard 24/7 from later-day gunslingers if this comes to pass?
Not really.
If things get to a certain point, we are bugging out of the country…
Police and military types are desensitized (imo) as part of their training. I don’t understand why you trust the “official” gun holders more than the unofficial.
I get your concern partially. I just don’t see it being much better elsewhere, just a different crowd you have to look out for. Instead of loopy 14 y/o’s it’s loopy 40 y/o’s that also have been given license to kill.
I’m of two minds really…
I like the idea of the citizenry taking back their country, and we are well a.r.m.ed and dangerous, so it’d be a piece of cake to make it so, and i’m thinking the military wouldn’t put up up much of a fuss, but it’s the revolution residue in the hands of residudes that worries me the most.
A good 1911 .45 is fun to shoot too. And easier to hide.
RE: A good 1911 .45 is fun to shoot too.
Only handgun to own…however a Dirty Harry vintage Model 29 8/38th barrel 44Mag ain’t too shabby either.
Or a LLama 380 either……
More police on a percentage of the population basis? We have around 2.5 times more people too.
September 22, 2008
Leading economist Kenneth Rogoff says bank rescue opens door for other US industries…
He predicted: “We are now going to get other sectors asking to get bailed out, such as the automotive industry. The credit problems are radiating across the US economy, seeping into autos, student loans and commercial real estate. Who else is Washington going to prop up?
“It is hard to see that this is even half over.”
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4799455.ece
Yup.
http://www.bloomberg.com/apps/news?pid=20601087&sid=acqN7861mi6Y&refer=patrick.net
Sept. 21 (Bloomberg)
The Bush administration widened the scope of its $700 billion plan to avert a financial meltdown by including assets other than mortgage-related securities.
The U.S. Treasury submitted revised guidance to Congress on its plan a day after first submitting it, as lawmakers and lobbyists push their own ideas. Officials now propose buying what they term troubled assets, without specifying the type, according to a document obtained by Bloomberg News and confirmed by a congressional aide.
The change suggests the inclusion of instruments such as car and student loans, credit-card debt and any other troubled asset. That may force an eventual increase in the size of the package as Democrats and Republicans in Congress negotiate the final legislation with the Bush administration, analysts said.
“Officials now propose buying what they term troubled assets, without specifying the type, according to a document obtained by Bloomberg News and confirmed by a congressional aide.”
Can someone explain why banks cannot just do what home sellers have to do to sell a house which is not moving, which is to lower the price until a willing buyer is forthcoming?
Because this would make them insolvent. Its better for them to say the market is frozen than is to say you are bankrupt.
So many corporations with their mouths open, so few teats on the taxpayers’ wallets…..
http://www.nytimes.com/2008/09/22/business/22global.html?_r=1&em&oref=slogin
Foreign Banks Hope Bailout Will Be Global
PARIS — The financial crisis that began in the United States spread to many corners of the globe. Now, the American bailout looks as if it is going global, too, a move that could raise its cost and intensify scrutiny by Congress and critics.
Will America Pay the World’s Tab?
Go to Blog »
Enlarge This Image
Andrew Councill/European Pressphoto Agency
The world is watching Treasury Secretary Henry Paulson Jr., fourth from left. With him at the G-7 meeting in Washington last April were, from left, James Flaherty, the finance minister of Canada; Christine Lagarde of France; Peer Steinbrueck of Germany; Tommaso Padoa-Schioppa of Italy; Fukushiro Nukaga of Japan; Alistair Darling of Britain; and Jean-Claude Juncker of Eurogroup.
Foreign banks, which were initially excluded from the plan, lobbied successfully over the weekend to be able to sell the toxic American mortgage debt owned by their American units to the Treasury, getting the same treatment as United States banks.
On Sunday, the Treasury secretary, Henry M. Paulson Jr., indicated in a series of appearances on morning talk shows that an original proposal introduced on Saturday had been widened. “It’s a distinction without a difference whether it’s a foreign or a U.S. one,” he said in an interview with Fox News…..
How about:
http://www.nytimes.com/2008/09/22/business/22lobby.html?em
Big Financiers Start Lobbying for Wider Aid
Even as policy makers worked on details of a $700 billion bailout of the financial industry, Wall Street began looking for ways to profit from it.
Financial firms were lobbying to have all manner of troubled investments covered, not just those related to mortgages.
“The definition of Financial Institution should be as broad as possible,” the Financial Services Roundtable, which represents big financial services companies, wrote in an e-mail message to members on Sunday.
The group said a wide variety of institutions as varied as mortgage lenders and insurance companies should be able to take advantage of the bailout, and that these companies should be able to sell off any investments linked to mortgages.
The scope of the bailout grew over the weekend. As recently as Saturday morning, the Bush administration’s proposal called for Treasury to buy residential or commercial mortgages and related securities. By that evening, the proposal was broadened to give Treasury discretion to buy “any other financial instrument.”
The lobbying became particularly intense because Congress plans to approve a package within just two weeks, without the traditional hearings and committee process.
“Of course there will be fierce lobbying,” said Bert Ely, a financial services industry consultant in Alexandria, Va. “The real question is, Who wouldn’t want to be included in the package?”
Mr. Ely said the open-ended nature of the Treasury’s plan could be interpreted to mean that the government was open to acquiring “any asset, anywhere in the world.”
“The question that I am raising — is there any limit?” Mr. Ely said.
I thought we already had banruptcy options for businesses?
Good morning everyone,
First day of Fall (of course this could be taken literally or metaphorically
) temperatures here will range from 77-90. Our summer just began. Hope everyone has a great day.
Ben hope you had a great weekend.
What a wonderful two day bounce. Now back to reality. How many more rabbits exist in that magic hat? Once all the rabbits disappear, we have some horrible things to face. Not to mention the rabbit food is gone and some are showing signs of sickness.
The rabbit food is poisoned.
By banning short-selling, they are taking away the “bid support” that naturally exists. There is going to be a violent move downwards.
I think I’m going to miss it since I’m headed to California but for once, I’ve made my bets, I have very high degree of confidence in them, and I’m not taking my laptop.
As I said to one of my buddies, I hope these a$$holes enjoy the abyss.
Who will they blame when the market takes a dive, as it looks like today so far??
‘I think I’m going to miss it since I’m headed to California but for once, I’ve made my bets, I have very high degree of confidence in them, and I’m not taking my laptop.’
Bye bye, fasty, bye bye, and I hope you have a terrific time and eat a lot and visit vineyards and just have fun all over the place.
Are you surrrrrre you don’t want to take your laptop? Hmmm?
And thanks again for the post the other day that Explained it All. I printed it off so I could read it as necessary.
Oh, I’m not leaving yet. I’m leaving on Saturday evening.
I do hope to eat well though.
They want the stock market to fall! That way the have more evidence of how badly we must pass this plan ASAP. It must work! We need it now! Look at the stock market. Accelerate! Accelerate!
“And thanks again for the post the other day that Explained it All. I printed it off so I could read it as necessary.”
Ditto and mucho thanks!
Where’s my post, dangit?
Anyway, I wish you a super-dooper fun trip, fasty. Bye bye, bye bye, have a great time!
Banning short sales is just like the dreaded “vote of confidence” given to a coach just a few months before they’re fired. You know when that time comes, you better start sending out your resume.
They just added a bunch more to the list, including one of my favorites COF. I was thinking about covering that one, but now I think I’ll leave it open, since chances are it’ll be nosediving soon.
http://biz.yahoo.com/rb/080922/shortselling_sec.html?.v=2
My hope is that they’ll next ban shorting homebuilders. Those have done me wrong the last couple of months, and that would be all that’s needed to make them plummet.
Oooh, I like that analogy. I’m going to steal it.
Over the years, I’ve built up a huge “analogy database” so I can actually converse with regular people who don’t like to do the math. Your’s gets added to it.
FPSS,
How did you “make your bets” if you can’t short??? I closed out much of my short positions on Thurs AM, not knowing I wouldn’t be allowed to get back in…
Buy the ETFs that short. SKF, for example, does swaps. Others use/are using puts. There are ways around straighforward shorting.
What she said above.
I just knew Thu morning that this was coming down the pipe at some point so I initiated all the trades I wanted (mostly at reasonable prices.)
There is going to be a slow burning panic after this. The big show is over. Now comes the slow descent into the abyss.
How many bailouts have already been passed by now? I have lost count.
I am trying to understand the urgency for passing the bailout du juor before next weekend. Given that another administration will have to live with it, wouldn’t it make sense to let them have their say in how things will be resolved, instead of hastily putting together another package at the 11th hour.
It is a problem. After this big announcement, I dont see many more bullets, so each slide should be progressively worse. Americans should realize this is sheer desperation, not a white knight.
They *should*, but they don’t. Not the ones I’ve spoken to at least. Everyone thinks all is well and there are now enough life rafts for everyone on the Titanic.
The attempt to build a sense of urgency, coupled with the carte blanche that the proposal grants to Paulson (and his successor), reminds me of the concerted effort to sell the Iraq war resolution in the go-go days of the early-aughts. No need to look at the details, just trust us!
Harrumph.
i was trying to figure that one out myself too. has anyone given any thought to the timing of the anouncements on the short selling ban and the RTC 2 proposal? i was wondering if the PTB knew the market would shoot up due to short covering and be able to rush a bail-out package through saying the rally was due to the idea of a bail-out?
Let’s ask the more important question: How many bailouts have worked so far?
Unfortunately we have the precedent of “The Surge”, proving (cough cough) that any problem can be “solved” if you just throw enough resources at it.
(Ignore the burning hotel behind the commentator on the screen)
I guess if any of them had worked, another one would not be on the table at the moment.
Well, no plan in Japan has worked so far.
There’s a reason for the existence of the proverbial “Mrs. Watanabe” stereotype.
There’s a reason that ZIRP doesn’t work.
There is a reason that Austrian economics does work, which is that they try not to let a blizzard of paper confuse their perceptions of underlying economic reality.
Halleluia, dare I dream that I’ve met an economist who likes Austrian economics because it speaks the truth?
To use current parlance: OMG, this is like totally coooooool!!!
Personally, I like it, because it provides a “predictive model” (although one saturated with politics but I can live with that.) You take your predictive models where you can get them.
One of my professors in college is (and was at the time) an Austrian. He’s now a senior fellow at the Mises Institute, Dr. Walter Block. (I’m not an economist, but it was my minor, so I had quite a few classes and the pleasure of being one of his students. In retrospect I wish I would have studied it more.)
The way he tells it, in grad school he was this pinko jewish kid in NYC. Somehow he turned it around.
Somehow in this small town in Arkansas, we had a couple very good free-market based economics teachers.
As it stands this does seem like another big fraud. The CEO’s responsible for this should give back every penny they stole from the people. Not that I advocate it, but in China this kind of activity would have ended very badly for these cretons!
I like the idea of lining the cretons up in front of a firing squad, and billing their relatives for the cost of the bullet. Hell, put it on pay-per-view and you just might be able to pay for the bailout!
Or how about we boil them in oil a’ la Carlin’s suggestion. Sponser: Crisco.
Ot just bring back the guillotine just for these a-holes. Sponser: Gillette.
Think of the possibilities! Write your congresscritter today!
/goes off to watch “Oww my balls!”
Sorry if this double posts - last one got eaten:
I like the idea of lining the cretons up in front of a firing squad, and
billing their relatives for the cost of the bullet. Heck, put it on
pay-per-view and you just might be able to pay for the bailout!
Or how about we boil them in oil a’ la Carlin’s suggestion. Sponser: Crisco.
Ot just bring back the guillotine just for these a-holes. Sponser: Gillette.
Think of the possibilities! Write your congresscritter today!
/goes off to watch “Oww my balls!”
Funny huh? And here i thought “Idiocracy” was a comedy.
Interesting, and heartening. Perhaps people are paying more attention — and aren’t buying the proposed “rescue” hook, line and sinker? Is this kind of sentiment just an anomaly? Or is it simply too late, regardless?
Central fact of financial crisis hasn’t been lost on anyone in one town: Taxpayers are on the hook.
The bailout doesn’t smell right to the people of Manassas Park, where the foreclosure signs are as common as azaleas. They know all about bad debt here. This is a terrain of oversize dreams, misjudgment, financial calamity — and empty houses. “Foreclosure. Foreclosure. Foreclosure,” said Ed Merkle, 58, as he pointed to the “for sale” signs lining his street …
… This may be a Main Street bailout backlash in the making.
A personal anecdote, for what it’s worth…
I was laid off on Friday - my company (a tech-startup in silly valley) was unable to secure it’s most recent round of funding. I suppose that’s not all that unusual, but the comment was made that most VC firms are chasing either green energy or social networking, so it’s harder for companies in other industries to secure funding.
I’ve made a point to stock up on savings since I saw this coming, and don’t feel a rush to find a new job. I’ve been thinking of relocating (in Austin now, thinking of maybe Seattle) and have been mentioning to friends that I plan to sell my house. It’s funny - none of them have agreed with my bearish stance on the housing market up to this point, yet now that I talk of selling they all respond “are you sure you want to sell now rather than wait for the market to improve?”
Interesting to see that psychology is slowly shifting here in Austin. I haven’t yet met with my realtor, but it looks like even though I bought in 2005 I’ll be able to sell for a bit more than my purchase price + the cost of the renovations I’ve done. Of course, we’ll see how it really plays out with the challenge in finding financing and all that….I have more than enough equity to be able to price as low as needed to move this thing - I really just want to eliminate my exposure to any further housing downturn and become a renter again.
J
good luck, consider selling it yourself- as we’ve show on the bb most realtors are worthless
craigslist and a pay par click site on google/yahoo provide all the marketing you need………………
I’ve considered this, but don’t think I know enough nor have the time/energy to do this. I’m okay with paying the premium right now to “learn” more about the process (this is my first house). I’ll be sure to pay less than 6% though.
The reality is I might not be in town while the house is on the market, so having a realtor to look after things would be helpful in that regard. I suppose it depends on what opportunities come up and what kind of relocation packages might be available.
I don’t know anyone who has sold or bought a house on craigslist…
I think we are two to three years from the bottom, and i expect no quick bounce (3 years of a couple percentage points in either direction at that point). Set a realistic price and good luck. I kept hearing Austin was booming still after the CA and FL crash began, hopefully you are still close to the top.
History of the last crash:
Smart people figure the problem: 1985-ish
Average person tunes in: 1987
RTC formed: 1989
Crash and recession: 1990-1995
We’ve bigger and larger and moving a little faster. We’ve formed RTC Redux. Crash coming up ahead.
Yeah, Austin’s still not had appreciable price declines that I’ve noticed. But, if a potential buyer can’t get a loan, the price is irrelevant. Luckily the job market here has been expanding (and is still strong, if the calls from headhunters are any indication), and we’ve had a nice influx of Californians priced out their home market.
I’ll post updates as I move through the process. I myself am curious to see what the market is *really* like here…
drumminj,
Good luck. Hope everything works out for you.
J - best wishes. If you think about coming to the DC area let me know. I’m looking around there too (my last day is next Tuesday) at tech work. I’m in the same situation - no hurry since I’ve saved, and looking forward to some time off.
Good luck to you too packman.
Glad you guys were ready for this.
packman,
Good luck to you also.
Thanks, packman. Sorry to hear that. It’s funny how we (or at least I) are unwilling to take large portions of time off to relax when we’re employed such that it’s such a nice break to not have a job and have no choice in the matter
Good luck drumminj,
I’m glad you’re in a spot where you can still escape w/your equity.
In my research of VCs, I’m finding that, in addition to the pursuit of the next hot green energy or social networking company, there’s also quite a bit of interest in biotech. So, drumminj, if you have skills that could be useful to a biotech company, you may have quite a few employment ops.
My advice from riding down small unprofitable companies, is not to jump into another unprofitable sector. I’ve worked for people who were great at raising money, but poor at making it. Eventually, even the wizards can’t raise more cash.
What city is your house located ??
House (and I) are in Austin. I was working remotely for the CA company, out of my home.
Pretty sweet gig, actually. Not looking forward to having to put on pants before going in to work
I’m planning on selling and relocating soon also. I’m in Nashville. I think the market here may be similar to Austin. There are reduced signs, but that means a 10 or 20k reduction to get a house sold, not a 100k reduction like in bubble states. So it’s not enough to cause a foreclosure in most cases, at lease in my neighborhood. Many houses still sell fast. I did an online rent vs buy calculator and it slightly favors buying for my house. Still if rates go up a lot renting would be better, until prices dropped more.
How can you use google pay per click to sell a house? Do you mean make a website and buy the search terms for your city? I would think most people would search directly from a site like realtor.com I don’t see most fsbo homes selling, but then they may not be doing the proper marketing.
“I’ve been thinking of relocating (in Austin now, thinking of maybe Seattle)”
Might want to make sure you get a job BEFORE you come up here. The economy is tanking, and it seems that tens of thousands of other “tech” workers have preceded you in your plan. My cousin and his wife are both programmers in Seattle. The wife’s job is in jeopardy in the next few months (outsourcing), and his in the next few years. They have worked for the same company for more than 15 years. The prospects for another job of equal pay are grim. Seattle has had a HUGE influx of people like yourself. Methinks many are going to be leaving soon. Good luck.
Thanks, BB. I have a friend who just moved up there recently from Austin. His company is hiring, I know, and it looks like they have a role that’s a pretty good match.
Regardless, I wouldn’t move unless I had a job lined up. But even if it falls through, I think I’d be happier up in that area rather than here in Austin. That’s the main reason for the move - not job prospects.
‘I’ve made a point to stock up on savings since I saw this coming, and don’t feel a rush to find a new job. I’ve been thinking of relocating (in Austin now, thinking of maybe Seattle)’
The PNW is super-dooper-fantastic, overall. In my very firm opinion. Seattle as a city has lots to offer in every category. One caveat–make sure you like rain and clouds BEFORE you move here. I do, but some people (obviously crazy idjit people) do not, and just can’t take it after a while, is what I hear.
It’s been verrrrry interesting watching the Seattle/King county housing markets. We were late to crash the bubble-popping party, but boy howdy, we’re catching up, for sure!
Anyway, if you move here and then later decide to buy you’ll probably have some good opportunities coming up.
Before anyone goes apesh*t over the “bailout”, let me make a few comments.
They turned GS and MS into bank holding companies. This means that their leverage will be severely curtailed. Of course, they will be able to acquire other banks on the taxpayer’s bankroll but they also threw all “marginal” banks under the bus.
To review:
curtailed leverage (= lower profits, lower payrolls)
all marginal banks go under
You can’t possibly take this as a “positive”. Looks like the markets agree with me.
Hey, after the banned short-selling worldwide, I’ll be damned if I cover my “locked” in positions.
FPSS- Please explain cause and effect with the marginal banks. I think I get it but I want to be sure. Thanks
I too don’t understand the “marginal banks” comment. (I saw your post on this last night, so I’ve had time to think about it)
Are you using that term subjectively, as in “banks that are barely profitable” or some such thing? And how does making GS and MS banks directly affect such banks? Because of increased competition?
They’ve hired two players to bankroll the ones that are most likely to survive. The edges are going to get liquidated (= all mom-n-pop banks and S&L’s.)
Thank you .
But you would expect a small/mom-n-pop, liquid, well-capitalized bank to still survive? (if there are any)
Yeah, I’m sure they exist. They will survive, of course.
I bet you the old CEO’s are wagging their cigars shouting, “I told you so!” at the secretary who’s long since learnt to deal with the boss because he’s always “right”, and he’s a pretty decent guy at the end of the day.
I actually like these curmudgeonly ol’ f*ckers. I’ll probably turn out the same some day.
I would put money on it.
basic decency + general misanthropy against the stupid + side chaser of finger-wagging anger = I’m there.
“curtailed leverage (= lower profits, lower payrolls)
all marginal banks go under”
F&F under the Fedsury’s oversight are a bit of a wild card, but with curtailed leverage and rediscovery of mortgage loan underwriting practices that used to be standard, I am having a hard time imagining housing prices anywhere near a bottom at this point, even in places (like CA) where they are already 25-40 pct off peak.
I don’t care about the “receivership” because there’s no mechanism to put the “animal spirits” back in action after the average player has been b*nged harder than a two-bit wh*re.
Japan, here we come.
You make a compelling point. I was wondering why all the buyers had gone away.
If you have a system built on borrowing, somebody somewhere has to borrow.
It’s either corporations or individuals.
At the current moment, you’d be hard-pressed to find either.
Another shining day in Silver City.
Hey folks here’s a few chestnuts to ponder:
Please read the following famous quotes from some of our most prominent historical figures.
“I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the world . . . no longer a government of free opinion, no longer a government by conviction and vote of the majority, but a government by opinion and duress of small groups of dominant men.” Woodrow Wilson (He was the President that signed the creation of the Federal Reserve into law in 1913.)
“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. The one aim of these financiers is world control by the creation of inextinguishable debt.” Henry Ford
“Fifty men have run America, and that’s a high figure.” Joseph Kennedy, 1936
“The real truth of the matter is, as you and I know, that a financial element in the large centers has owned the Government ever since the days of Andrew Jackson.” Franklin Delano Roosevelt, 1933
“We shall have world government whether or not you like it . . . by conquest or consent.” James Warburg (Rothschild banking agent, financial adviser to President Franklin D. Roosevelt), 1950
“The real rulers in Washington are invisible, [and] exercise power from behind the scenes.” Felix Frankfurter, U.S. Supreme Court Justice, 1952
“The case for government by elites is irrefutable.” William Fulbright, U.S. Senator, 1963
Commodities are rocking and Uncle Buck is sinking, as expected. Look at oil, back over 106.
The next stage of the bust should be very good to the PM faithful.
Short-faithful too.
It’s the drift down phase of the bear market (=sharp initialy drop, equally sharp rally, perhaps repeat the first two a few times, and the long grind down.)
The hopes and dreams get crushed after that.
One wildcard though - the possibility of hyperinflation. That would *kill* the shorts, and is what I’m afraid of to be honest. Check out the Zimbabwe stock market for instance (mentioned the other day). Even if the market doesn’t come close to keeping up with inflation - shorts will still lose their shorts.
There aren’t any signs yet of hyperinflation. IMO it’s not guaranteed at all, but is a very strong possibility, since it may be the only way out (per se) of our spiraling debt.
You need only open the Pandora’s Box that is hyper-inflation just a teensy-weensy bit…
ok
Curious hausfrau question #326:
With all these bail-outs (expansion of money in the system) how are we not already experiencing hyperinflation? Is it because the banks are hoarding most of what is in the system?
The printing of cash money never happened, and what you can’t see doesn’t bother you, usually.
On the other hand, somebody transferred to the majordomos the amount of $85,000,000,000.00, on a computer from somewhere in the bowels of a government office, for our 79.9% share of AIG.
And we told the world we were doing this, so the world says what can I buy that is tangible, fungible and is unconnected to everything else?, and the lightbulb went off, and they got rid of Dollars and bought oil & gold.
The ride is only just beginning, make sure your seat belt is fastened…
aladinsane, what do you think about the notion that this move by the Fed might actually be DE-flationary as it will only pay for each mortgage 20 cents on the dollar? Therefore less funny money floating around out there….
here was someone’s post on the issue yesterday:
Comment by cactus
2008-09-21 20:25:01
If the FED buys 1 trillon of bad loans for .20 cents on the dollar then .80 cents is gone, less money than before. The only way I see this as inflationary is if the sellers of the bad loans start lending money again up to and above what they lost by selling to the FED at a discount.
So far I see this as Deflationary being unable to believe the lenders now being made solvent will loan recklessly because now none will buy their new loans if they are junk. Fool me once, etc.
And the US government loaded up with bad loans which I don’t think they can sell will be forced to cut services and raise taxes. interest rates will go up because treasuries are now being sold in double the quanty to finance all this extra debt.
Destructive Inflation only if the government unable to pay back the debt it has assumed just prints money to pay creditors, doesn’t bother to sell treasuries but just prints extra money. Then I guess its war as the creditors enraged at being cheated retailiate. So if Ben’s right and we have no hope of paying the debt back and attempt to inflate out of debt then its war. at the very least trade war.
I do not know that we will get hyperinflation.
It is in the worlds best interest to support the dollar (marginally to be sure) and let the dollar sink lower by 7 - 15% per year.
All bets are off if any sovereign holder of US Treasuries pulls the plug and bails.
Personally, I think France will pull the plug on the USD and the Euro.
I agree - not hyperinflation, but a slow, grinding decay in the value of the dollar after a sort, rapid decline to recent lows.
France does have a record of pulling the plug, most recently just before Nixon closed the gold window. But how could France pull the plug on both the Dollar *and* the Euro? How much luck would they re-floating the Franc at this point - their economy is not exactly healthy either.
Oil over $108. It was at less than $92 what, a week ago? Yeah, that’s fundamentals. It’s amazing how greedy speculators dictate what a person pays for food and fuel.
From Marketwatch:
“Crude futures rallied Monday to a high of $130 a barrel — their highest intraday level in two months — buoyed by a steep drop in the U.S. dollar and speculation that the Bush administration’s proposal to stabilize the financial sector might help revive economic growth…Trading was halted for five minutes after the October crude contract reached the daily price-movement limit of $10 per barrel. Under trading rules, the price-change limit is increased by another $10…Crude for October delivery rose $16.37, or 15.7%, to close at $120.92 a barrel on the New York Mercantile Exchange.”
“Oil’s move ‘underscores that energy is the only place to expect outsized profits these days and the money is flocking into that market.’”
— Neal Ryan, Ryan Oil & Gas Parnters
These sort of rocketing commodity prices are the nails in the coffin on the economy. Time to start shuttering up businesses.
The nails in the coffin of the economy were driven when short-term money froze up. The economy could deal with $140 oil, but not with a credit freeze.
Hey Everyone,
Your money is safe in your local banks. Shiela Bair, Dave Ramsey and Susie Orman says so.
Here’s the link
http://abcnews.go.com/GMA/
Click on the more button under “Recently On GMA”
There’s nothing like a menage a troff of talking heads, to better lull the sheep to sleep…
Pigs leading lambs into a financial abattoir.
4 legs bad, 2 legs good
No argument from me.
menage a troff
?
You don’t want to know…
This is a “congressional leak” that’s been floating around.
Dare I dream that it is real?
(I’ve edited it slightly to make it pass the filter.)
My guess is that most Congress folk can spell Paulson correctly.
You’d be wrong. I know a few people in Washington and they make the same mistakes anyone else does when they dash off emails really quickly.
I emailed it to a few friends and they certainly think it could be real. They even named specific names that are likely. (I haven’t heard of any of them.)
Personally, I certainly hope it is real!
NYCityboy,
Do you like their anger? I do.
You might say I have an anger fetish.
“I’m open to other ideas, and I am looking for volunteers who want to hold the sons of b*tches so I can beat the cr*p out of them.”
I volunteer to hold the sons of b*tches. Where do I sign up?
Yeah, me, too. I just finished reading A Connecticut Yankee in King Arthur’s Court, for the second time since I wuz a pup. I understood it much better this time. Pillories would be a good way to go. You’re only supposed to throw clods or rotten veggies, but WAY back in the day, there were always a few people who threw much harder projectiles. I’d be one of those.
I have a better name for Paulson’s TARP.
I’m voting for “Federal Action Insuring Loanholders of Underwater Real Estate (FAILURE).”
I seriously do not want Congress to throw some sanitized name on this thing like Resolution Trust Corp (RTC) or TARP (by the way, anyone else notice the anagram for TARP?). This is a national embarassment, and it needs to go in the history books as such. Kindof like the “Teapot Dome Scandal” that I remember reading about as an 8th grade civics student.
If we try to candy-coat this thing for the history books, I’m going to be one pi$$ed off hombre…
Today is my birthday! I shall now sing ‘Happy Birthday’ loudly and robustly and then celebrate by eating half a blackberry pie, as is my custom. Actually, it’s not customary, but I want to do it anyway, and it’s my birthday, so I shall! In bed! With vanilla icecream, while wearing my bunny jammies!
I’m taking the day off, see.
Now, what I wannnnnt for my birrrrrthday is:
1. The housing bubble to utterly and completely pop with exciting squeals of pain and fear from the pig-men, and subsequent ensuing torment for them all, and
2. More trees and wetlands to stand, because the developers have lost all incentive to cover them up with pavement and McCrapShacks, and
3. A pallet-load of candy.
And lookit! I’m already getting the first two things on my list! Hoorayyyyy!
Happy Birthday ‘Gal! : D
A virtual pallet-load of candy to ya, Oly! Happy b-day.
Happy birthday!
If you were here, I’d have cooked you dinner.
I think in my last birth I was an Italian mamma. Then the soul decided that it had had enough and went on a very long voyage to the other side of the wold.
Happy Birthday to you
Happy Birthday to you
Happy Birthday dear Olympiagal
Happy Birthday to you
And many moooooooooooooore
Happy Birthday! Are those home grown berries? May your wishes come true.
Happy Birthday!
Roidy
P.S. Are you going to get spanked? That sounds like a fun thing to do on a birthday.
beep….beep….beep….beep…
“Ma’am, where do you want me to drop this pallet-delivery?”
Hope your day is great OlyGal.
You already have the pallet-it’s buried in your wall, remember? As for the candy, it’s really, really baaaaad for you. Trust me, I know. Every time I eat a half pound Hershey bar with almonds, I feel super sick and swear I’ll never do it again.
And Happy Birthday!
Happy Birthday Olympiagal!! Enjoy your day off and blackberry pie, yummy!
Happy, Happy birthday Baby…..the best to you
It’s awfully late, but if you’re reading this Ms. Gal, I want to wish you the best year EVER, and thank you or brightening up my skewered outlook with your delightful, whacky words. Your poetry is a pleasure.
At this very late hour, transmutation transportation paper boarding passes are still being accepted for flights to financial safety…
I expect that within 30 days, the supply chain to easily buy precious metals from coin dealers will be broken.
They will have simply run out of inventory, with no way to replace anything, game over.
I’ve been on the phone with my buddy, a bullion maharajah that has/had one of the largest inventories of physical bullion available for the public in both a buying and selling capacity, in L.A.
He told me there are NO sellers of bullion over the counter, none. Only buyers…
I asked him how the wholesale supply chain (essentially the 13 master wholesale dealers that the U.S. Mint sells various eagle coins to) was holding up and he said he can still buy 1 oz eagles/buffalos, but silver is really hard to come by.
He was the largest coin show (Long Beach, Ca.) this past week, and told me there was almost no physical Silver available for sale on the bourse floor, nothing.
He bought one 50 piece lot of JM 100’s from another dealer for $1.75 over spot, and quickly sold them to the hungry mob @ $2.35 over spot.
I asked him how much longer he was gonna bail out J6P’s that only just now got religion, and have them end up with his inventory and their promise-sorry notes?
He said that day could happen almost overnight, but wasn’t sure of the timing.
Anecdote: I heard several arguments about silver at the flea market this weekend, not so much at the coin dudes or jewelry-heavy tables, but at tables with the usual 80% junk / 20% interesting hodgepodge ratio.
Buyer: What? You want how much for this piece of crap?
Seller: Do you have any idea how much silver is in that piece of crap?
… And so forth.
Us, we bought canning supplies.
The company I use has free shipping and they say they have tons of silver, but you wouldn’t know it from calling them last Wednesday, their lines were busy almost the whole day.
Back in the day, 2 years ago…
My buddy would have 500 JM 100’s on hand @ all times, and thousands of 10 oz bars, tens of thousands of of 1 oz rounds, tens of thousands of 1 oz silver eagles, and tens of thousands of 1 oz libertads, and tens of thousands of 1 oz maple leafs.
He might have 10,000 ounces of silver on hand in total, today.
Many Americans misunderstand the value of silver. It is currently way underpriced, IMHO. What do you use the best conductor of heat and the best conductor of elecricity and the best reflector of light in the world for, in industry?
Just about everything.
In ways that are not recyclable today.
Somebody on here mentioned that Silver is a drama queen, and that sounds apt.
It’s ditzy and goes up and down with interesting mood swings.
That was me lad.
I use the silver/gold ratio to filter the noise and buy at the appropriate times.
Why are the AM radio stations playing the “BUY GOLD NOW” commercials every 30 minutes if there’s none to be had?
I still sometimes see the dancing people on web sites advertising “get a mortgage with us”.
Why spend the money on ads if you have nothing to sell?
Quite often the scum-sucking outfits on the radio, will pitch their customers into collectible coins, which has a much bigger profit than run of the mill bullion coins.
bait & switch numismatics
p.s.
I’m kinda sick of that lady on the tv commercials that screams “I got $600 for my scrap-gold”.
Scrap-gold is like saying ‘nadir-zenith’.
Haste makes waste.
Monday Sept. 22, 2008 07:47 EDT
Growing right-wing opposition to the Paulson plan
(updated below - Update II)
On Saturday morning, I noted — quoting Atrios — the almost complete lack of debate over the ever-changing dictates issued by Treasury Secretary Hank Paulson. Last week, whatever Paulson said on any given day — no bailouts; only selected bailouts; massive $700 billion bailout plan — immediately became the unchallenged conventional wisdom.
That has all changed. Prominent economists, who had previously been defending Paulson for the most part, began voicing serious doubts about his plan. As the AP put it yesterday: “Many of the same economists and opinion-makers who’d provided a bipartisan sheen of consensus to Treasury Secretary Henry Paulson’s previous moves have quickly begun casting doubts on the wisdom of a policy that would allow Treasury to purchase without oversight hundreds of billions of dollars of difficult-to-price assets from financial institutions.” Not only Paul Krugman, who was a skeptic from the start, but conservative economic experts have also now expressed opposition, including former Bush and Romney advisor Greg Mankiw and — in an excellent column on Saturday — Sebastian Mallaby, who described the rapid move to embrace Paulson’s plan as “extremely dangerous.”
I called about 20 senators this morning, the flunkys who answer the phones all seemed really overwhelmed and said they’re getting a lot of calls, some senators like schumer and kyl the line was just busy, couldn’t get through.
I e-mailed my rep and two senators the following short message:
“Please oppose the Paulson bailout bill. Those that have run the economy into the ground should be punished, not rewarded with a huge taxpayer bailout.”
At the moment, I think volume is more important than content.
What’s with the news today about big companies starting stock buy-back programs? Microsoft, Hewlett-Packard, and Nike all lead the financial news with buy-back announcements. Doesn’t this normally herald a stock bottom?
Doesn’t this normally herald a stock bottom? “normally” doesn’t apply anymore.
It is also a handy way to artifically increase the demand of the stock in a time when the fundamentals suggest otherwise.
Not all companies follow through with those buy-backs. Some just announce it get their stock price up temporarily.
In fact, the end of the 3rd quarter is only 8 days away…hmmm….makes you wonder doesn’t it?
How many more bad actronyms can we stand?
Hey, there’s a LOT more where those came from.
Roidy
Dang,
I thought the bio-tech companies had the corner market on acronyms
I would be concerned about holding gold. If these people can ban short sales, they will have no problem banning/confiscating gold. It is the anti-dollar play. To defend their paper pyramid they will do whatever it takes. Banning short sales was a warning sign.
But gold could be $3,000 per ounce before they do it. Who knows.
and then they came for the short-sellers, but I was not a short-seller….
Now that the shorts have been taken out and shot I thought I should consider who will be next to be ‘persecuted’, in the language of our Glorious Decider. This list is short but guarantee to get longer.
1. Evil commodity ’speculators’. - You know the kind, they think they can profit unfairly while you suffer needlessly at the gas pumps every time you fill up your .5 MPG Canyonaro. Don’t these vermin know that 99 cent gas is as America as apple pie? They will be dragged from their Priuses (priii?) and mercilessly Tasered.
2. Gold-hoarding seditionists - a subset of commodity speculator, these lowlifes just keep yammering about ‘inflation’ and ‘infinite fiat’ and some stupid thing called the ‘Constitution’. They will be rounded up at the next Ron Paul rally and herded into abatoires where they will be ground, stuffed into salami skins and given free to homedebtors who are upside down on their mortgages. Let’s see their barbarous relic help them then.
3. Savers - I know, it is hard to believe but some traitors still insist on not spending every nickel (and more) as quickly as they can. We tried to re-educate them with negative real interest rates, 0% interest teaser rates, outrageous inflation and more but these fools just don’t get the message. Some of them say they are too old to work, blah blah blah. These old geezers will learn the meaning of work when we cart them off to the vegetable collective to toil in the fields for the greater good. Pick up that hoe, gramps.
This is just the beginning of our glorious endeavor, comrades. The Roaving Hoardes of Starving Masses stands ready to enforce American pride and American greatness at the slightest lack of Americanism. With your help, we will prevail.
Yes, that is the plan… step by step, basically.
I have a feeling that most gold bugs are a different breed than short sellers, and won’t part with their holdings quite as easily should the black booted thugs arrive…
The U.S. seems to be adding to its troop strength at *home* around Oct. 1 under a Homeland Security plan. Whether this dovetails with black boots, I don’t know. Intriguing times. They gonna help with the national elections? Provide Wall Street military escorts? Put down the often-mentioned pitchfork crowd? And no, I don’t have any tin foil hats in my gated suburban compound.
By Gina Cavallaro - Staff writer
The 3rd Infantry Division’s 1st Brigade Combat Team has spent 35 of the last 60 months in Iraq patrolling in full battle rattle, helping restore essential services and escorting supply convoys.
Now they’re training for the same mission — with a twist — at home.
Beginning Oct. 1 for 12 months, the 1st BCT will be under the day-to-day control of U.S. Army North, the Army service component of Northern Command, as an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks.
(SNIP)
The 1st BCT’s soldiers also will learn how to use “the first ever nonlethal package that the Army has fielded,” 1st BCT commander Col. Roger Cloutier said, referring to crowd and traffic control equipment and nonlethal weapons designed to subdue unruly or dangerous individuals without killing them.
“It’s a new modular package of nonlethal capabilities that they’re fielding. They’ve been using pieces of it in Iraq, but this is the first time that these modules were consolidated and this package fielded, and because of this mission we’re undertaking we were the first to get it.”
The package includes equipment to stand up a hasty road block; spike strips for slowing, stopping or controlling traffic; shields and batons; and, beanbag bullets.
http://www.armytimes.com/news/2008/09/army_homeland_090708w/
The more your tighten your grip, Paulson, the more gold bugs will slip through your fingers…
The can ban gold, guns, breathing, whatever but they cannot remove value from something by decree nor obtain complete control.
Someone said here yesterday, “you know you made the right bet when the government bans it”. I think the same applies to gold. A ban on gold means that dollar is trash.
Perhaps storing your wealth in “non monetary” metals will provide protection… but when these guys get desperate the only rule that remains is force.
What the US does, or doesn’t do in regards to PM’s is immaterial. There is 80% of the worlds’ population that is rotating out of dollars,and they have a long history of storing wealth in Gold/Silver.
Get yourself a small stash while you can…word to the wise.
The major indices trade near recently reached session lows. Fitch Ratings said the costs of the U.S. government rescue plan are manageable and within the AAA sovereign rating, Reuters reports.
one more argument for Paulson!
Bill Clinton: Shift for Goldman and Morgan a good thing
Clinton rejected criticism that his decision while he was president to support repeal of the Glass-Steagall law that separated investment and commercial banking is at the root of the present crisis. Clinton said he tried to rein in derivatives and Fannie Mae and Freddie Mac while he was president without success. The GSEs were “an embarrassment to America and I’m glad we got it fixed,” he said.
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7b63BD6B8B-0D8F-4023-92F6-1AAD59B8E4D9%7d&siteid=yhoof2
WASHINGTON (MarketWatch) — Pushing on to shore up the markets, the list of banned short-sale stocks has been expanded to include the likes of General Electric Co., General Motors Corp. and American Express Co.
http://www.marketwatch.com/news/story/short-sale-ban-list-expanded-include/story.aspx?guid=%7BEED2326E%2D9A2E%2D4729%2D86B6%2DE4EFEDBCDE07%7D&dist=morenews_ts
why dont they just ban it all together? why the panic over certain stocks?
I posted this earlier, but it looks like it got eaten (or filtered).
The university where I work is hosting a couple speakers to discuss the housing market. The email I got says (in part):
Please join the Office of Campus Life for the following:
Money Matters: Is the Housing Market Really Broken?
Tuesday, September 23, 2008
12:15 pm
DSC Leadership Lounge (Located on the 2nd Floor above the Information Desk)
Special Guests: Mr. Tracy Catt, President of the Arkansas Homebuilders Association and
Mr. Laney Briggs, President of the Mortgage Bankers Association of Arkansas
I’m going to attend. I have at my disposal a spreadsheet I have been keeping for well over a year showing clear yoy declines in local housing sales.
What claims should I be prepared to refute by these jokers? What are some hard numbers I can collect to bring as evidence of the tightening credit market (liquidity and tightened lending stds)?
Some background, both of these guys work for mortgage brokers. One works for BancSouth Mortgage and the other for a loan company you can find at glre dot net.
Any suggestions appreciated. I’ll update what happens tomorrow.
Personally, I don’t think it’s worth it. This is not the time for I told you so, or even an attempt to educate. They’ll just reply with the same classic lines of “real estate always goes up in the long term” etc etc ad infinitum. You know as well as I do THAT is what most people want to hear. Do you want to be the one to tell them that their safety blanket is on fire and seems to be spreading? It’s over. Let it go.
Now is the time to protect yourself. Insulate your finances from the storm and plan how to use your “dry powder” to capitalize on what the future may bring. Why draw attention to yourself now?
Do you want to be the one to tell them that their safety blanket is on fire and seems to be spreading?
kinda.
But point taken.
Nahh Santa. It’s worth it. Do a search on bluprints posts in the forum. He had the midas touch with a previous realtard/seller encounter.
no flattery intended bp.
none taken
If our economy becomes Socialist like the French, does that mean we lost the Cold War?
Love, Comrads.
The French are our Cold War allies, comrade.
I’m never surprised by the ignorance of the european socialism boogeyman. I have the pleasure of working with many europeans and when asked how what they think of their system, they consistently say “I’m very happy with the system we have in xyz. When further pressed about the socialism aspect, they go on to say they wouldn’t have it any other way and “the label is just ignorance”.
Imagine that.
If we are LUCKY we might get the French system. But that isn’t going to happen. It will be much worse.
Heard at the block party this weekend — the totally cocksure, master of the universe, Greenwich bond trading brother of a friend of mind is totally, absolutely terrified.
Other people, who normally pay no attention to these things, were wondering if their banks were safe. I think that those who said the FDIC had better be recapitalized BEFORE it runs out of money are correct, because media outlets seeking audiences would have a field day and J6P would go nuts.
Of course, J6P doesn’t have that much at state in bank deposits. Credit card lines are more of an issue for him.
Dataquick zipcode charts are out for socal.
http://dqnews.com/Charts/Monthly-Charts/LA-Times-Charts/ZIPLAT.aspx
Happy hunting!
This administration has regularly opposed aid to America’s poor on the grounds that it will discourage the work ethic. But when the huge mistakes of the managers and owners of America’s largest private financial institutions came to light, the U.S. Treasury and the U.S. Fed were quick to write huge checks, with no mention of the moral message this sends to both the rich (”When you mess up, we’ll rescue you”) and the poor (”Sorry, you’re just not big enough or important enough to save”).
Richard Schatz
Professor of economics, Whitworth University
Richard Shatz? Oh boy is that a funny name!
Professor of Economics? Doesn’t that generally mean these days that he is exactly 180 degrees wrong about everything?
These credentialed morons get zero credibility from me. Ironic because credential, credible are the same root meaning belief.
Or maybe it just so happens that Schatz is dead on and you don’t like that truth.
Yeah.
If you mean by dead on that he’s completely missed the mark, sure.
Moral hazard applies to the rich and the poor.
The nanny state has told people for years that they will be given protection from the ravenous wolves. All these FBs were sold houses by government licensed realtors with money lent by government licensed brokers. Why should they have feared being led down the primrose path?
Caveat emptor is dead at the hands of big government. Deregulation you say? I say deregulation hurts no one but those who refuse to think for themselves and the government wants our population to depend on it from cradle to grave. The less they think, the better.
And now remember, remember, my brethren, that whosoever perisheth, perisheth unto himself; and whosoever doeth iniquity, doeth it unto himself; for behold, ye are free; ye are permitted to act for yourselves; for behold, God hath given unto you a knowledge and he hath made you free.
Everyone does realize if Iran is not dealt with and in short order all this will all be moot, right?
Is that you, john mccain?
AIPAC weighing in?
Don’t worry, Paulson has a plan to securitize Iran.
But then again, Paulson’s the Dr. Strangelove of the financials.
You know, you are right. I mean Saddam was only 20 minutes away from launching the nuclear destruction of the US. So it stands to reason that Iran must be only *15*minutes away from totally destroying the US. I mean, Iran was responsible for that dastardly attach on the World Trade Centers and Pentagon weren’t they? Bush did say Iran was part of the Axis of Evil and it was Evil people who attached us that day.
I am sure someone has the Patriot Act Part II ready for Congress to pass along with the financial bailout that will save us from this terrible danger!
Why, is Iran holding some bad paper too??
LOL, Blano! There are a number of factions that are sort of disappointed by recent events, since their agendas have been sidelined. LaRaza is another one that comes to mind. All these factions are like “What about MEEEEEEEEEEE?”
Blatant power grabs in Washington are a lot bigger concern to me than some Middle Eastern motormouth.
But, but, Boosh is plaintively crying out how we need to do a trade agreement with Colombia. LOL! We already have a trade agreement with Colombia, it’s called drugs. But they’re pissed Mayheeco is stealing their thunder.
Blatant power grabs in Washington are a lot bigger concern to me than some Middle Eastern motormouth.
I looked up clueless in Websters but didn’t find the word “Blano” anywhere.
But you saw your picture, right? or did you miss it?
sigh.
I think I’ve heard this one before….oh yeah…now I remember they said the same thing about Iraq….funny how we have a new boogeyman every few years.
while we are printing money, lets just buy Iran… problem over.
Why is Russia selling it?
free money for the world (I’d like to buy the world a billion dollar coke):
In a change from the original proposal sent to Capitol Hill, foreign-based banks with big U.S. operations could qualify for the Treasury Department’s mortgage bailout, according to the fine print of an administration statement Saturday night.
http://news.yahoo.com/s//politico/20080921/pl_politico/13690
Oil trading halted! Huge up moves in commodities, USD fell off a cliff. Cash is not king, repeat not king.
RTTNews) - Crude oil soared by more than 11% on Monday afternoon and topped the $116 a barrel mark. Light sweet crude for October moved to $116.68, up $12.13 on the session. Crude touched as high as $116.98 in the afternoon, its highest level since Sept. 2. Trading was halted for five minutes amid the sharp rise in the afternoon.
Oil now over 119! Amazing! Gold chasing it, now 910.
High Five…. i like…
Watcher, you think 100 oz silver bars are a good way to own silver?
Thanks!
Whoa, wait, I thought the shorts were outlawed? You don’t mean to say upswings are a no-no, too?
Cripes, just shut Wall Street the hell down, now. Put that pig out of its misery. Make those f*ckers produce something useful for once in their lives.
LOL. Well said palmetto. Y’know pigs are only productive when they’re slaughtered.
I love bacon for breakfast.
120!
http://quotes.ino.com/chart/?s=NYMEX_CL.V08
The Nymex temporarily halted electronic crude oil trading after prices breached the $10 daily trading limit. Trading resumed seconds later after the daily limit was increased to $20.
The huge rally was poised to shatter crude’s previous one-day price jump of $10.75, set June 6.
Sheesh, and sheeple in my ‘hood were already sniffing around Armada’s and Escalades again, wistful for their fat-ass bearing rides and loads.
130!!!!!!!!!!!! Unbelievable, it is 130.
http://quotes.ino.com/chart/?s=NYMEX_CL.V08
Be calm. All is well. Dr. Evil and Chief B are on the job.
Moving a stock from 116 to 130 in four minutes is no big deal. The oil market, however, is huge and I can only imagine the amount of money moving in to make it go from 116 to 130 in four minutes. Wow.
There is no free lunch. We’re on our way to Argentina — banana land!
It takes too to Tango
The moves in oil, gold, and the dollar indicate capital flight. Ay Dios mio!
Frightday came on Monday…
Guess we’re on our way back to $4 gas too.
It never got much below $4 here…hello $6 gasoline!
get ready for the return of the “Strategic [insert must have commodity input] Reserves”
Mr Market is king, and has cast his vote on the bailout proposal.
“The greenback dropped 2.4 percent against the euro on bets the cost to finance the rescue will overwhelm demand from foreign investors, who already own more than half of all Treasuries outstanding. The Standard & Poor’s 500 Index decreased 2.3 percent, retreating after the biggest two-day rally since 1987. Yields on 10-year Treasuries rose 0.6 percentage point to 3.87 percent, and oil jumped 17 percent.”
Bloomberg
Why is ANY of this move surprising?
Now that gamblers are unable to short, they are moving back into commodities. Imagine that!
Of course, the fact that our dollar has suddenly become worth even less also plays a role.
The waves on this ocean of finance just keep getting higher and higher. These manic hope rallies and despair drops have got to be slamming anyone out in open water. I imagine Paulson and Bernanke on the bridge of the Andrea Gail.
“I’m doing what I was made to do - and I’ve got a feeling I’m going to do it even better this time.”
There is nothing they can do to stop the collapse of the biggest credit expansion in history.
“There is nothing they can do to stop the collapse of the biggest credit expansion in history.”
Zackly! It’s over. Time now for the start of the biggest productivity and savings expansion in history!
The markets appear to get it now:
The bailout plan weakens the dollar and thus imports become more expensive for the US. So, the taxpayers are on the hook in two ways.
The dollar is crashing, oil is soaring to 118$/bl, and the Euro is at 1,4774 again.
Meanwhile, the German government and all German parties have declined suggestions from US government to plan similar bailouts. However, that will change as soon as any major German bank is in serious trouble.
I’m just a plebe trying to make sense of all of this.
I’m not an economist, not a trust-fundy with tons of money to invest, just a lowly renter with a lot of animals that hopes to someday own a little patch of earth so I can plant vegetables and trees and raise dogs and chickens and goats.
Truth is, what many of you post here on HBB seems to get to the heart of the matter more than reading the msm.
Help me out here:
Government buys bad loans for cheap with taxpayer money. Understand that.
Here’s where I am lost (sorry that these questions are so basic):
1. Where is the bail out money coming from? Raise taxes? (how much can taxes actually be raised to pay for this mother of all bail outs?) Borrow - from whom? Print more money (wouldn’t that guarantee massive inflation?)
2. Who is going to buy back this bad debt? Why would they do that? Isn’t is worthless, that’s why the government has to buy it?
3. It is finally coming to be obvious (to everyone, finally) that easy credit and the housing bubble created this mess, yet all that I keep hearing about is: “we must loosen credit” and find a way to “keep housing prices from falling further”. How can both of these be thought to be true at the same time?
You are only confused because deep down you expect those in power to make sense. You need to realign your world view to see that what those in power want is more power. Therefore, there every action will support the following:
1) Impoverish the Average Man
2) Make more people dependent
3) Centralize Control
4) Transfer wealth from 99% to 1% of the population
Massive inflation + bailouts accomplish these goals in spades. They do not care about inflation and, in fact, inflation HELPS them achieve their goals.
When you put yourself in their shoes and make your goal “more power” then everything the say and do is perfectly logical.
Dan you’re dead on. How is it we disagree the other 99% of the time?
The idea is to take all the excess inventory off the market, so that prices can re-inflate (as is done with diamonds).
The money is borrowed. the Government doesn’t have any.
Many banks are refusing to write down their losses, and are holding onto junk in the hopes that prices will bounce back. These banks are refusing to go along with any scheme, and will make the bailout useless, but fantastically expensive.
Paulson has been wrong 100% of the time up to now, and cost almost a trillion dollars in various bailouts. He has a ton of Goldman-Sachs stock that has plummeted in value. Do you think he’s an objective, disinterested party?
“He has a ton of Goldman-Sachs stock that has plummeted in value”
this is the second time i’ve read this today. now that it is a commercial bank shouldent the price of their stock go down significantly?
Actually he sold it at the top. That’s actually the condition for being in the government. His wealth is in treasuries. The “incentive” is that when people are “forced” to do this, they don’t have to pay capital gains taxes.
I don’t like the man any more than you do but I do try and stick to the facts. Inventing fiction just makes you look silly and provincial.
No, his Godlman-Sachs stock is held in a blind trust, and he cannot sell it.
Unless CNN, CNBC, and FOX are all wrong, and you are privy to inside information they aren’t. Maybe you are, but your arrogance suggests otherwise.
Try to learn a few things before you open your mouth:
http://www.forbes.com/2006/06/01/paulson-tax-loophole-cx_jh_0602paultax.html
He sold them long ago. The blind trust holds the proceeds.
fpss,
the other post i saw said something about him transfering his shares to a holding company he has a stake in. is there any truth to that?
Just keep on reading… you will answer these yourself…I have been doing it for years here… some of the guys are such great characters, entertaining and sharper than a new mach3…. (or are we at mach4 now?)
OK, so the gov. is “borrowing” the money to buy these toxic loans….
…borrowing from whom? The Federal Reserve?
(sorry about the delay - I typed the question, went to the beach and went surfing, and then came back).
Don’t know about a mach3. But I’ve got a Wacker and it’s definately sharp.
The shorts are sidelined and the rescue fix is in. I wonder why markets seem unconvinced that all is well?
The markets are on top of the situation and the results are astounding. What course we take now doesn’t seem to matter much. We are standing naked on a barrier island with a massive hurricane approaching. Whether we prepare for wind or water is irrelevant.
At least after Katrina, Wilma, Ike, etc, our nation’s collective psyche is used to that kind of situation.
Trying to put a lot of money into a failed Bubble ,and in addition trying to re-spike a debt bubble or a leverage bubble is stupid . People are pulling
their money from risky investments and providing credit because they know that we are in a void because of the failed housing bubble mania .
Every void needs to be replaced by something .They are not coming up with anything to replace the RE bubble ,except attempts for new
bubbles . Productive enterprise is what is needed ,that will create jobs ,and that will create a situation that takes up out of a recession .
Putting “new money ” into the housing sector or credit sectors is like
giving broke people more credit ,just the lose it .
The failed debt society who was faked into a false wealth because of
fake prices of inflated real estate , is dried up . The powers want to sink money to pay off bad debt ,to free up new debt money to squander into the same old bubbles . Productive industry that is needed is the only answer now . The markets are trying to tell these Bozos in power what the gig is ,but they are not listening .
How do you like the price increase on oil today ?
who would invest money in a country like ours? The rules can change any day, the tax rates are enormous and most of the areas that need investing (energy, transportation, medical, banking) are controlled by the government and startups are regulated out of existence.
If you wanted to truck gas down to TN to alleviate shortages and make a buck.. you can’t! Get a tanker truck, buy some gas at $4/gal and drive it down there and sell it for $10/gal…. except they would accuse you of gouging and violate dozens of laws regarding interstate transport of gas.
This type of thing happens in almost EVERY industry. You cannot have innovation when all non-government ways are outlawed by regulation.
I have a simple rule about regulation. If an industry manages itself in a reasonable manner, and doesn’t significantly impact the general public, I like the hands off approach.
If they pull a Ponzi scheme on us they get the death sentence.
It is all up to the industries themselves to avoid the death sentence.
What about the government industry? They deserve a death sentence.
Does anyone else find the bailout just plain scary? Honestly, the whole last year I’ve sort of sat back, crossed my arms, and thought: ” Well, now those bastards are gettin’ what they deserve” Those comments go for banks, lending institutions, and all the flippers, specuvators, strawberry pickers and yuppie SF couples who bought overpriced houses or enabled those to buy in the first place.
But this bailout to me spells something that’s sort of scary: Inflation. We’re not talking just a few cents more for gas here and a few more cents for a loaf of bread there. We’re talking the potential for rampant inflation. I get a nauseating feeling that if such a plan passes, it’ll have the exact same effect as the however many other bailouts we’ve had so far: A few happy days for investors until the realization that the overall economy is in poor condition. Once that’s realized, then suddenly we have this enormous debt hanging over the nation’s head.
The debt is already hanging above the global economy like the Sword of Damocles. The only questions that remain to be decided are who gets to pay for it and how.
Maybe we’ll just repay 30 cents to the dollar. Think Argentina…
From front page of MSN
“55 and haven’t saved a dime?”
http://tinyurl.com/ys8noz
They saved plenty and blew every penny on McCrapShacks that are now bleeding them dry via taxes, heat and interest payments.
What percentage of your total liquid assets would you recommend being in PM at this point? I have 25% now.
Any suggestions?
Thanks.
ALL IN.
Every day I find your posts more and more SANE.
14:52 Dollar declines the most since the euro’s inception in 1999 - Bloomberg
I shorted the Euros today after a nice 10 day run. They have the same problem as the dollar. Nay the less, I do recognize that there is a perceived interest rate play on the Euro vs the Yen and those with bigger balls or OPM are playing the EuroYen carry trade.
As an investment the Euro is toast.
Comment by vozworth
2008-09-21 13:22:53
ever thought,
short EURO long OIL or is that so September 19th, 2008?
that’ll get the crisis fired up for the old country.
———————————-
didnt go hunting?
how is your grandaughter?
yes, I am paying very close attention.
is long MTU safe, into the liquidations of the dying IB’s?
does this cut them loose as they have limited ties to the bottomless pit of Fed funds despite any postion in Union BAnk? Perhaps, this free them up to focus on other regional business in areas that are growing ie: middle east, africa? This looks long and boring in a Yen sort of way.
Went hunting over 25,000 small birds, mammals, reptiles, amphibians and fish will live for another year. Several dozen cats met their demise. Not the one that mattered. There were 10 of us out hunting cats.
My Gdaughter is scared. She’ll be fine and forget about it by Christmas. J’espere.
Enough to get across any border in the world.
No more than you are willing to loose.
At least what you have. Personally I would go 50% but if you think you have enough, I would make bets on other commodities, at least until the Decider bans such actions. Meats, grains, oil, etc. I can’t get enough of PMs though.
I really would like to go in with 50% but the one thing that scares me is the government we have. They can do anything, including outright banning of PMs. These people are worse than the mafia.
But I like your advice. Thanks.
bananna,
Don’t be silly. It isn’t possible for anyone to take your stash away if they don’t know where it is. If they find it all in one place, you are a fool. If you can’t imagine a workaround to any legality, kind of lame. “They” didn’t make “collectables” or “works of art” illegal last go. Hey, I can make a work of art!
If you applaud 100% and then are afraid of 50% because of the boogey man, I have to wonder if you have wealth to preserve or just want to be a cheerleader.
In any case, these are interesting times. Be prepared to loose your @ss on your bet.
Blue Skye
Actually BK, gold was confiscated in the past, so thinking this is not possible is naive. But I am probably more worried about thieves than the government. I didn’t applaud aladinsane’s 100% remark. I just found the humor in it. Nobody should put all their eggs in any one basket.
Why the comment about losing my ass? I am not sure why you took my comments so serious.
Relax. Take a deep breath.
Ahhhh, much better thank you.
Associated Press
Oregon Rep. DeFazio blasts Bush bailout plan
By MATTHEW DALY 09.22.08, 3:37 PM ET
WASHINGTON -
Oregon Rep. Peter DeFazio blasted the Bush administration’s plan for a $700 billion financial bailout Monday as a giveaway to Wall Street.
DeFazio, a Democrat, said the plan would benefit the same executives who created the financial mess in the first place.
“If we pass this bill as they proposed it, we’ll do an incredible disservice to the American people,” DeFazio said in a fiery speech on the House floor. “What if it doesn’t work? You have the execs come out whole and they scoot the money offshore. What’s the next step?”
As proposed, the bailout plan gives Treasury Secretary Henry Paulson the keys to the U.S. Treasury without oversight or restriction, DeFazio said. He called for a deliberative approach that avoids acting in haste - as he said Congress did in 2002 when it gave President Bush authority to invade Iraq.
“We shouldn’t be rushed into this. If it takes a week, two weeks, three weeks, a month, the world will wait,” DeFazio said. “They’ll wait for a thoughtful plan that cures the disease in addition to getting us beyond this initial problem. That’s the job of this Congress. We should not be rolled by our Wall Street exec who is masquerading as secretary of the Treasury.”
I really like this DeFazio guy! Damn he nailed it.
He just wants to make sure both parties get to feed at the trough.
Did somebody just walk in on the slickback salesmen getting ready to have lone grandma sign on the dotted line? The rush to Socialism reeks of surrender - so unlike the bring ‘em on attitude.
Dead on Clarkie! I prefer fascism! It’s the Bestest evar!
OIl will open at 108 or so tomorrow. It was expiration with a massive short squeeze. Happens when investors were betting that it would go down. The shorts blinked and paid up.
Hoz I saw your post last night, hope your granddaughter is doing well.
sorry to post twice, but I’m wondering if I should make a gold play right now and I’ve got an hour to decide:
aladinsane, what do you think about the notion that this move by the Fed might actually be DE-flationary as it will only pay for each mortgage 20 cents on the dollar? Therefore less funny money floating around out there….
here was someone’s post on the issue yesterday:
Comment by cactus
2008-09-21 20:25:01
If the FED buys 1 trillon of bad loans for .20 cents on the dollar then .80 cents is gone, less money than before. The only way I see this as inflationary is if the sellers of the bad loans start lending money again up to and above what they lost by selling to the FED at a discount.
So far I see this as Deflationary being unable to believe the lenders now being made solvent will loan recklessly because now none will buy their new loans if they are junk. Fool me once, etc.
And the US government loaded up with bad loans which I don’t think they can sell will be forced to cut services and raise taxes. interest rates will go up because treasuries are now being sold in double the quanty to finance all this extra debt.
Destructive Inflation only if the government unable to pay back the debt it has assumed just prints money to pay creditors, doesn’t bother to sell treasuries but just prints extra money. Then I guess its war as the creditors enraged at being cheated retailiate. So if Ben’s right and we have no hope of paying the debt back and attempt to inflate out of debt then its war. at the very least trade war
“If the FED buys 1 trillon of bad loans for .20 cents on the dollar then .80 cents is gone, less money than before.”
It is very much in the interest of the Fed’s banking industry constituents for them to use the $700 bn to pay more than the unknown, hitherto untested market value for the bad loans, rather than letting the market decide what these assets are truly worth (as suggested by none other than Warren Buffett).
And its in the interest of the taxpayers that the FED does not overpay for these mixed up piecies of loans.
Deflation in the things you want,
Inflation on the things you need,
Nothing is working as it should. Gold should be much higher by now, so maybe it will, maybe it won’t go up. Like they always say…they aint making any more gold, but they do pull more out of the ground everyday.
Cramer did give a buy, buy, buy on gold today. His plays have backfired more often than not. Maybe he finally got it right today.
I think the world is comming off a massive global credit expansion , read this.
http://www.safehaven.com/article-11330.htm
“Despite some masterful attempts to convince us of the opposite, the global investment banks have failed miserably to persuade me that the commodity bull market is (mostly) based on fundamentals. To me, it still represents the last leg of the liquidity super cycle which has been in full vigour ever since Greenspan decided he couldn’t distinguish a bubble from a mere bull market.”
———————————————————————–
My opinion
Our medical system is broke here in the USA , no energy policy and old infrastucture and the government spends its time and money trying to reinflate home prices…. unbelievable
Future Inflation, deflation ? I don’t know but expect both as the FED seems punch drunk. So I own treasuries and Gold stocks, no banks.
From Bloomberg.com:
“In July, the National Association of Realtors’ index of pending home resales fell 3.2 percent, a decline NAR Chief Economist Lawrence Yun blamed on “overly stringent lending criteria.”
http://www.bloomberg.com/apps/news?pid=20601213&sid=aKXk3JIj24sg&refer=home
This makes it clear to me that the biggest, and most difficult, and most essential reform will have to be stanching the flow of money from interest groups like the NAR to politicians.
I expect arbitrageurs and salespeople to wring the maximum cash from those they come across. It was politicians who enabled it to happen on this scale. They received the bribes/contributions, and loosened the laws to make it happen.
How do you deal with feckless and venal politicians?
Did anyone expect the Bush years to end any other way but in crisis? I am proud to say I never voted for any of these jerks. Anyone that did has to accept some responsibility for this debacle.
How hard would it be to get the American people to force a referendum on this bailout. I have written both Senators Kohl and Fiengold today, informing them that passing this bailout measure…without oversight and judiciall review, would be unconstitutional. I stated that the constitution prohibits any suberversion of the three branches of government. Without judicial review, there will be no check on the executive branchs power. Congree would in effect create a dictatorship with the government, answering to no one. I told Mr Kohl, that this country will not stand for treason and we will hold them all accountable. No one’s going to jail, no one will be prosecuted as a result of this bailout. Paulson is a Wall Street crony…
I can only hope, that the ACLU will sue the shit out of this legislation and get it before the supreme court. I can honestly say, that at this time I’m glad, that the court has enough strict constitutionists to let this path to dictatorship continue. I would rather see the blood bath now, than inch by inch of every day for the next ten years. I’m sending out as many emails as I can…
NO BAILOUTS-NO WAY!
This latest proposal added atop so many bailout measures already attempted is a rush job whose passage is being aided and abetted by economic fear mongering from the same folks who spent a good part of 2007 insisting that subprime was contained, followed by assurances last December that there would be no recession.
How did we so quickly get from “no recession” to “financial emergency”?
Should those whose analysis was so unstable and far of the mark be entrusted at this late stage of the game to hastily set policy for the next presidency?
Actually, don’t send out emails! Send out PHYSICAL LETTERS, mailed flat, either Fex-Ex or Priority mail.
For emails, I get responses, but they’re almost always form letters. For example, Anna Eshoo’s computer, if it sees the word “mortgage” or “home” sends me a letter back that says “Anna Eshoo is concerned about your falling home prices!” or something like that.
Letters sent flat (and I send a LOT of them) get about a 5% response rate that indicates they at least read the letter. With email, it’s 0%
Democrats in Congress add restrictions to $700 billion bailout bill
Posted on Mon, Sep. 22, 2008
By DAVID LIGHTMAN AND MARGARET TALEV
McClatchy Newspapers
…
Another wrinkle may be developing, however: Some lawmakers are concerned that the plan is too complex and hard to explain to constituents, making them wary of quick approval.
Sen. Richard Shelby, R-Ala., the top Banking Committee Republican, was skeptical. “I am concerned that Treasury’s proposal is neither workable nor comprehensive,” he said in a statement.
“In my judgment, it would be foolish to waste massive sums of taxpayer funds testing an idea that has been hastily crafted, and may actually cause the government to revert to an inadequate strategy of ad hoc bailouts.”
I have an idea:
Instead of $700 billion, let’s give them $70 billion for starters. Do the reverse mortgages, and work the kinks out of the system before we go in “Full Monty”. Something tells me there are going to be unintended consequences with this thing.
I am just really, really nervous about giving Paulson or anybody a huge blank check for that amount of money. $70 billion seems like a lot of money to me…
It’s all relative, no? At first, the steady stream of $3 bn quarterly writedowns by investment banks seemed shockingly large, but then despite assurances that subprime was contained to a maximum loss of $200 bn and the housing market would soon bottom out, investment bank losses continued and started coming in well above $3 bn. Soon after learning there would be no recession in 2008,
we had a $29 bn taxpayer guarantee of the Bear Stearns takedown in place, plus $150 bn or so in stimulus handed out to keep consumers spending apace.
All these measures were ultimately eclipsed by the recent takeover of the GSEs, who reportedly hold $5,300 bn in mortgages (of course taxpayers were assured they have nothing to worry about here), followed in short order by an $85 bn injection of some kind or another into the AIG deal. The Fed has dropped interest rates to a stimulative 2 pct and dumped untold amounts of loans and liquidity on Wall Street, all in the interest of keeping markets functioning.
After all of these failed rescue attempts, the taxpayer is now proposed to hastily pony up an additional $700 bn to a Treasury Secretary with less than two months left in office, in a mortgage rescue with no strings attached, with no justification of why this attempt to through a much larger amount of money at the problem is likely to work after so many other large amounts of money thrown at it had no effect. On top of this are proposals to add another $50 bn stimulus payment to households, a $25 bn bailout of the auto industry and an ad hoc guarantee ($X hundred bns?) of money market fund deposit balances.
The next president will be in office for at least four years, and will have to live with the consequences of whatever measure is put in place. Wouldn’t it make sense at this point to take a breather and try to figure out why nothing has worked so far, instead of making a mad dash into an irrevocable commitment to an 11th hour financial troop surge?
We gave AIG 85B and they have already blown through 28B of it (Fed data last Thurs) and I am sure when data is released this Thurs that they will have blown through another 15B.
It really doesn’t matter how much money we give to the RTC2. Once started, it will not stop.
But the important thing is that nobody can blame anyone else for not trying. In politics, it is far more beneficial to try something collectively foolish and fail than to be a lone dissenter who is later blamed for taking no action at the moment of crisis.
This one is for the oil bulls,
The October contract rose $16.37, or 17 percent, to expire at $120.92 a barrel yesterday on the Nymex. It touched $130 in intraday trading, as traders who sold the October contract last week, when oil dipped close to $90, had to buy the futures back.
Traders `Squeezed’
In a squeeze, a trader has gone short by selling contracts betting that the price will decline. In the last days before the contract expires the trader must buy back the same number of futures or be forced to deliver the underlying oil.
The Commodity Futures Trading Commission is “closely monitoring” yesterday’s gain in oil prices on Nymex for potential manipulation, the agency’s acting chairman said.
“We are working closely with Nymex compliance staff to ensure that no one is taking advantage of the current stresses facing our financial marketplace for their own manipulative gain,”
My favorite part, “POTENTIAL MANIPULATION”
The fundamentals went out the door years ago…Duh
From the wantabe wiz kid teenager on the blogs, thru the hedgies, and right on up to the goverment, everybody is manipulating this market anyway they can. Your only safe bet is to stay out of the way and let them take each other out.
Oh, and yes I believe in peek oil, I just don’t think we have reached it, yet.
Does anyone know the historical recovery rate for a bank’s senior debt in the event of an FDIC takeover? In other words, how many cents on the dollar have creditors gotten, on average? And how long did it take?
I saw a comment today:
“It’s not capitalism that’s failed. It’s the massive price fixing of the RE market that has failed.
Attempting to perpetuate failed policies is a mistake.”
http://www.safehaven.com/article-11330.htm
interesting read.
Is everyone insane? Here’s a typical lede from a local paper:
WASHINGTON — Home prices. That’s what the Bush administration’s historic Wall Street bailout is really about.
Falling home prices nationwide have acted like dominoes, knocking homeowners into foreclosure and taking down lender after lender, until the entire global financial system was in jeopardy.
Experts say that the government’s enormous plan to relieve Wall Street banks of their bad investments has a decent chance of stabilizing home prices, at least in theory. If that happens, it will stop Wall Street’s bleeding, but could still keep many families locked out of the housing market.
So get this! Cheaper houses made houses LESS AFFORDABLE! Falling house prices “keep many families locked out of the housing market!”
Black is white! Good is bad!
It seems that Americans want HANDOUTS, not AFFORDABLE HOUSING! Let’s print enough money so that every poor person can have his McMansion! Wheeeeeeeeeee!
Seriously, I think I’m going to have myself committed soon. I’m obviously insane