Bits Bucket For September 25, 2008
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Chinese banks told to halt lending to US banks:
“The Hong Kong newspaper cited unidentified industry sources as saying the instruction from the China Banking Regulatory Commission (CBRC) applied to interbank lending of all currencies to U.S. banks but not to banks from other countries.”
http://www.reuters.com/article/marketsNews/idUSPEK16693720080925
Looks like the drug dealers are cutting us off. We’ll be “seeing the rat” soon.
“seeing the rat”?
I’ve heard of “purple spiders on the wall” during the DT’s, is this similar?
“seeing the rat”?
I’ve heard of “purple spiders on the wall” during the DT’s, is this similar?
I think this is a reference to a (former?) UCLA economist, Ratcliffe…is that it? who moved to Mexico.
I know nothing of this rat, myself.
Imagine the plight of the Chinese?
Saving face is very important, and how could the Chinese have known that the lead-up to the Beijing Olympics would also be the lead-up to the Bankruptcy Olympics here in the states?
They couldn’t criticize us, because the O’s were their coming-out party, and all the world’s a stage…
They were caught between the devil and the deep sea.
Once the Olympics came and went, their true feelings and actions have been much more deliberate…
As predicted by yours truly some time ago. Before I changed tags to avoid confusion on another blog, in fact.
http://thehousingbubbleblog.com/?p=979
Comment by ajh; 2006-07-01 23:19:09
China (and specifically Beijing) will do whatever it takes to keep the party going until after they host the Olympics in 2008.
One of my better efforts.
That was a good one, ozajh!
My prediction for 2008 is that one major bank would go down. I didn’t think they would ALL go down…
ozajh…
Good call!
The minute I saw that I could only think of the apple and orange analogy from the beginning Peter Schiff’s “Crash Proof”.
Fun times ahead…
Another Democrat on the committee, Brad Sherman, said that if Congress does not act in the next few days, the bailout would not likely pass in its current form.
“My calls are coming in about 300 to 2 against this,” he told CNBC. “That’s why if this bill doesn’t pass on Saturday or Sunday, it won’t pass in its current form, because if members go home and actually talk to their constituents, they’ll see the anger at this.”
Isn’t this nice, congressional leaders trying to push this through before regular Congress sheeple go home and hear from their consituents. Disgraceful, if you care about the issue please be calling them today.
So what foreign currencies look good for medium/long term holding? I’m thinking 3-5 years.
Negatives:
You can’t buy the renminbi.
Hong Kong is pegged to the U.S.
Australian could take a hit due to demand destruction of commodities.
European currencies seem to have the same debt problems as the U.S.
Mexican takes a dive if the U.S. does.
Positives:
Yen seems decent with the savings rate in Japan and people still conscientious about spending/saving, but Yen CD’s don’t pay any interest (which will probably be better than U.S. CD’s).
I was thinking the last couple days (I haven’t had time yet to investigate further) that Canadian might be decent. Pending investigating their national debt, they’ve shown they will let their dollar rise against the U.S.
Brazil has had a good monetary policy the last few years and might be ok if they can keep it up. But they might also get hit due to demand destruction of commodities.
Thoughts?
I think the yen is very heavily manipulated, to be weaker than the dollar, allowing for Japan’s trade surplus
Agree. Also, how in the world does Japan hold the most amount of US debt of any nation on the planet? That’s the big mystery to me.
Japanese are savers. I wouldn’t be surprised if they have the best savings rate of any nation with a comparable economy/gdp.
No doubt they save some in US denominated securities (i.e. treasuries).
Ok…I’ve heard that before, where do they get all that money ‘to save’, ie reinvest in US Treasuries. Their economy has been in the doldrums for ages. They must have a very clever way of printing more fiat cash and then reinvesting it in uncle buck.
Everything is so interconnected nowadays and a country’s perceived strengths (Japanese are savers, Chinese work like the dickens, etc) might not save it from the money maelstrom that has gone from a mere tempest in a tea cup, to a Category 7 bankruptcy in just a matter of weeks…
Trying to figure out the least worst fiat currency seems like a fool’s errand.
So I’m googling around try to answer this question for myself (Is it that American’s buy so many WII’s and PS3’s?) and I discover this little wikipedia link on current account balances.
All I can say holy sh!t, Batman.
http://en.wikipedia.org/wiki/List_of_countries_by_current_account_balance
lad, I should have gone ahead and posted your thoughts in my original post.
I like gold too, but it’s manipulated as well and has a huge speculative element in the price.
I’m just trying to spread the risk around a bit.
All I could find on a quick search is this from wikipedia:
“Fear of insolvent banks: Japanese people are afraid that banks will collapse so they prefer to buy gold or (United States or Japanese) Treasury bonds instead of saving their money in a bank account. This likewise means the money is not available for lending and therefore economic growth. This means that the savings rate depresses consumption, but does not appear in the economy in an efficient form to spur new investment. People also save by owning real estate, further slowing growth, since it inflates land prices.”
So the Japanese don’t trust their own banks but they do trust US Treasuries. Good luck with that.
Good points. I’m not arguing Yen is great. You asked where they get the money for US treasuries. Answer: They are savers.
I’ve bought Swiss government bonds.
They are net savers, and have one of the most dependable currencies during periods of financial crises, historically speaking.
Not saying anyone else should do so, and there is certainly risk with any hedge/investment.
I will add something else to this, One interesting thing I learned studying in japan, is that country has alot of problems.
First off the interest banks pay is nothing, the is was done back in the 50’s, companies could barrow as such low rates, that they were able to put profits right back into the business, allowing for expansion and rebuilding of japan
It hasnt changed one bit since then, also they have worse crony economics then wall street. I have been out to the country side and they are building roads, highways, flood control systems, bypasses to now where. Which is just a way to move money from the public coffers to private builders who know the right people.
you have to be a saver here, you want a good job better go to a good school, if you want that your parents better save. so it makes sense the money would flow to a country with a good interest rate.
Hell last time I checked citibank in japan would give me 5 percent interest
Ok…I’ve heard that before, where do they get all that money ‘to save’, ie reinvest in US Treasuries.
Well from selling stuff to the US and buying very little in return, of course. just like China. Actually like pretty well the whole world.
I thought that would be obvious.
Not quite so obvious to this poster. China would make more sense to be the top holder of US debt. Almost everything these days is made over there. But I guess they aren’t savers.
What does Japan produce so much of that the world consumes now? Cars and electronics? And even these are quite often made elsewhere (Toyota and Honda plants in the US, electronics in China, Mexico and elsewhere). My point is that it is rather surprising for Japan to be the number one holder of US debt but it makes more a little more sense once you realize how little faith the Japanese place in their own banking system and that they decide to put what they do save into US treasuries…but the ’savers’ still need to work to get that money to begin with.
I guess I’ll look up the hard Japanese trade numbers….I did see that China has recently replaced the US as the number one importer of Japanese products.
80% of China’s trade with the world is ‘pass through’ with much of it going to Japan. China imports from Japan (or wherever), finishes the assembly and exports to Europe. The MSM make China look like its getting the money but we don’t hear about the ‘pass through’. Pass through is real.
Singapore Dollars, Swiss Francs
I suspect you will find the Canadian debt burden comparable to the US on a per capita basis, and their entitlement programs enormous. I can’t see the $CAD performing well in a US led recession.
Doesn’t anyone realize the opportunity for a “carry trade” here? A foreign bank in Brazil, for example, could borrow large sums from Chinese banks at X percent interest and then turn around and lend that money to U.S. banks at X + Y percent interest.
Just make sure Y is large enough to cover the risk of potential default.
As if the world is lining up to lend us money in a roundabout fashion, circular logic notwithstanding…
ha ha
I suspect you will find the Canadian debt burden comparable to the US on a per capita basis, and their entitlement programs enormous.
Wrong on entitlements. One, all Canadians are already covered by government health care, so there won’t be the big increases in government health care spending that the US will see as the boomers become eligible for Medicare.
Canada spends less money per taxpayer than the US does on government health care spending right now. That’s per taxpayer, not per Medicare/Medicaid recipient. I’m not kidding.
Also, Canada does not have huge segments of its adult population in prison or the military at public expense. That’s another US “entitlement” - to the prison and military industrial complexes.
Two, the Canada Pension Plan (counterpart to SS) is self-financing and has its own segregated assets. Contributions were increased back in the 90’s to account for the aging population.
Interesting take on the healthcare, that since you already pay for everybody, the cost won’t go up as people age. Will the taxpayer base go down as people age?
Hopefully our military presence will decline, I really do hope so. Then you might need more.
deep rumor that one or more of the BRIC currencies could come out with gold backing. Just passing that along.
Might that explain the “shortage” of gold recently?
Are you seriously suggesting that one of these countries will go on the gold standard, i.e. set a fixed amount of its currency equal to an ounce of gold?
That is absurd. It would put the country’s exports completely at the mercy of market swings in gold.
If you’re just saying that the central bank will increase its holdings of gold, well BFD.
Not such a deep rumor. Russia is quietly saving its own gold production….has been for some time…with the express purpose of instituting at least a percentage gold backing for the ruble….One figure discussed is 10% gold backed.
The other is Dubai, which is considering the same thing.
“It does not take a rocket scientist to see that we face a very serious situation and that the $1 trillion P@ulson rescue plan, although well intentioned, is far too small and too late to avoid disaster. So what should investors do? An old maxim is that, g@ld makes sense when nothing else makes sense. Today, not much does make sense. G@ld is likely to explode, at least in the initial stages of panic. In a recession, cash becomes a King. In a depression, g@ld is an Emperor. In the current panic, many investors are jumping on US Tre@sury bonds as a perceived life raft. But teetering on the shaky foundation of US doll@rs, T-bonds are a trap to be avoided. As the US doll@r is likely to erode fast, the sovereign debt of countries with strong currencies, such as Swiss francs are attractive.”
I have been watching PM’s for a long time. I can make several observations.
1. The junior mining stocks are in a serious bear market the last 16 or so months. Everything has gotten crushed.
2. The Platinum group have gotten smoked. 50% off from highs.
3. Gold and Silver have had a strong rally recently, but they are still well below recent highs.
4. The dollar has been strong lately.
Some would argue this spells doom for PM’s. No doubt the technical charts are busted for many. But the fundamentals still look good. The question becomes, will the fundamentals get worse going forward? Is this really the emergence of a bear market in metals?
I honestly have no idea. I think it is a hero or zero play. If you think deflation is coming, you want to hold dollars. This is evident in real estate today, where your dollars buy you more square footage every day. But if you think the government will just try to print their way out of this…you want to have PM’s.
Looking at the PM charts I think we will know the answer shortly.
Nicely written post — but (there’s always a but) how does stagflation fit into your thinking?
Stagflation would probably be a middle ground. Less downside but also less upside for the PM’s. But I am really just guessing.
The supply equation has never been a problem with precious metals until recently, and that changes everything…
I was just on the phone with my buddy the bullion brahmin, in L.A.
He has no 1 oz Silver Rounds left, and just sold full boxes (500 coins) of any-date 1 oz Silver Eagles for $6 over spot (nearly 50% over current spot of $13.20) to the public.
The spot price is the value of computer blip Silver & Gold (ETF’s), but bears no resemblance to real market conditions.
banannarepublic,
I have watched gold and silver for a long time too. My fanciful post yesterday was trying to express the same thing that you have said so plainly. We are at a turning point. There is a lot of tension, more than August last year, waiting for an “event”. I like the way you put it “hero or zero”. Nice post.
The U.S. Mint has just stopped selling 24k 1 oz Buffalo coins…
That’s not the kind of “event” I had in my imagination.
Perhaps “event” is too non-specific. My sense of it is we’re at the quiet center of the tornado. The bailout may calm some segments of Wall Street, but does nothing to address the underlying and continuing deterioration in real estate, and thus bonds and consumption.
China is disallowing their banks from investing in dollars. A recent article in Truthout by an impressive list of European heads like Helmut Schmidt (title: Mad Finance Must Not Rule Us) (sorry - screwed up the url) baldly states they’re not having further truck with the Wall Street geniuses rip-off plans.
The IMF is heading to the U.S. for a complete perusal of our financial system. Hilarious to think of what will happen here should they recommend/impose ?? their usual Structural Adjustment Program.
Many other countries, from Russia and Venezuela to China and half the planet are instituting their own economic agreements, with no reference to us, the alleged big cheese.
Presuming this $700,000,000,000 gift to the banksters will ultimately be monetized, the dollar will be deeper in the toilet, and the single remaining reservoirs of value will remain, as always, gold and silver.
Stagflation is too mild a term to slap on this obscenity.
what is your forecast over the next 24 months for the USD against the EUR and your forecast for the bric currency basket against the USD? Thanks.
So..what’s the deal with the timing of this?
Is China trying add pressure to get the US government to pass the “non-plan” (just give us the money and don’t ask questions) that Main Street hates?
“”It does not take a rocket scientist to see that we face a very serious situation and that the $1 trillion P@ulson rescue plan, although well intentioned, is far too small and too late to avoid disaster. So what should investors do? An old maxim is that, gold makes sense when nothing else makes sense. Today, not much does make sense. Gold is likely to explode, at least in the initial stages of panic. In a recession, cash becomes a King. In a depression, gold is an Emperor. In the current panic, many investors are jumping on U.S. Tre@sury bonds as a perceived life raft. But teetering on the shaky foundation of U.S. doll@rs, T-bonds are a trap to be avoided. As the U.S. doll@r is likely to erode fast, the sovereign debt of countries with strong currencies, such as Swiss francs are attractive.”"
from John Browne
Anybody else receive the email about the AIG bailout stating that the $85 billion price tag means a cost of $425,000 per adult in the U.S.? I think that email would make Ben’s head explode. For one, they are not taking the money out of our pockets. For two, that comes out to $425 if you count 200,000,000 adults in the U.S. Multiplying the number by 1,000 times makes the writer of this now massively circulated email look foolish. It is that type of stupidity that makes us “pessimists” (realists) look silly in the eyes of the sheep.
As the Faster Putty-Tat would say, “can’t these idiots at least do long division?”
Why didn’t they provide a laugh track with Herr Bu$h’s speech last night?
I received the same stupid email and sent it back with the correct $425 calculation. Even those without a calculator that can handle those large numbers can at least type it into google and get the correct number. It goes to show that many sheeple care more about the emotion of an issue than the facts and don’t even bother to check to see if something is accurate or not. That’s why Bush dictates by fear and not facts.
Not that its any more accurate but I grabbed the net tax payer #s and for THOSE adults its closer to $5,000.
Damn son, how much is this all going to cost before we’re done?
http://www.bloomberg.com/apps/news?pid=20601170&refer=home&sid=amZxIbcjZISU
“I’m physically shaking,” says Horn, an academic tutor, as she peers into the bank. Inside, an FDIC examiner is talking to six stone-faced IndyMac employees. “I don’t know when I’m going to be able to get my money,” Horn says. “I’m a single mom. This is the money I live on.”
I don’t know if combotechie is correct over the long term, but I’d rather have some cash right now than not.
What is cash?
You can’t eat gold, long term treasuries could be destroyed by hyper-inflation if this goes a particular way. I have lots of money in a Vanguard short term treasury fund, but that’s still an obligation of the government.
The green stuff? You don’t want to have too much of that lying around in NYC, although my 1915-built rowhouse did come with a safe.
Diamonds? Artificially propped up by DeBeers. Etc.
May I suggest frozen orange juice futures?
That is FCOJ, Frozen Concentrated Orange Juice.
You got the right crop report? :confused:
Billy Ray Valentine: Oh, memories!
Mortimer!!! Turn those machines back on!
Looking good, Winthorpe!
Just buy some gold and stop worrying.
WT- I realize that a safe is good when someone breaks into your home and you are not there. What if they see the safe when you are not home and think “I’ll come back when he’s home.”
When someone puts a gun to your head and says “open the safe,” it’s going to do you more harm than good, no? Correct me if I’m wrong, anyone.
That’s what moved me to move all of my Gold overseas, to thwart overseize.
I decided I didn’t want to live a life where i’m always having to watch my back for one of those 200 million handguns, in desperate hands.
Where do you have it stored overseas? I thought about HSBC but they are in NY, and that is not comforting.
Correct me if I’m wrong, anyone ??
Well…First of all, the bandit is not going to make it past the entry way before he is attacked by my two 80 pound dogs..Secound; while his is on the floor screaming in pain as one holds him by the throat and the other is trying to rip off his arm I have a decision to make…Do I call the police or use the 357 magnum that I just removed from my bedside drawer to put the poor bastard out of his misery ??
There was a retail watch dealer on Wilshire Blvd. in the city of angles, named Lance Thomas, that killed 5 would-be thieves over the course of a number of years, until he decided to close-up shop…
What do you do if they just keep coming at you, no matter how well you are armed?
==================================
“Over a period of less than 3 years, Thomas was involved in four gun battles against a total of 11 known suspects. He shot six of them, killing five. The watch dealer himself was wounded on two of these occasions, taking a total of five rounds.”
http://findarticles.com/p/articles/mi_m0BTT/is_156_26/ai_82533205/pg_1?tag=artBody;col1
I am guessing they wear bullet proof doggie vests?
Make sure you put enough of your household wealth into dog food.
Always use the gun - and shoot to kill so the bum can’t sue you later.
His estate can still sue.
That’s why I got a shottie. Nobody walks away from 00 buckshot.
“When someone puts a gun to your head and says “open the safe,” it’s going to do you more harm than good, no? Correct me if I’m wrong, anyone. ”
If you are too stupid to advertise you have a safe, Actually put things were someone knows it’s there, and not original enough to hide where no one can find it …You should buy treasuries, sit in the corner, and suck your thumb…sheesh
WHat about water futures? Gold is shiny, but so what? Water wars are being waged in the West, cuz they’re not making anymore water.
Chinese banks told to halt lending to US Banks…
http://www.reuters.com/article/marketsNews/idUSPEK16693720080925
The news just retracted the story of Chinese halting lending . But you know darn well they will .
link?
Farber retracted on CNBC business news Blueprint.Don’t have printed retraction yet .
Wednesday Night Live
Presidents, Wall Street, and the forgotten man…
Lopez: Are there policies that we got used to after the Depression that contributed to the problems we have today?
Shlaes: Roosevelt did good when it came to mortgages. Almost like Moses, he decreed features we still see as the standard today. Let mortgages have similar rates across the country. Let the interest rate be fixed. Let people be able to pay off their mortgages in ten or twenty years. FDR despised interest-only loans, which were common then.
Remember, in the Great Depression, people who owned 90 percent of their houses still lost them. Until recently at least we’ve been talking about people who own ten percent losing them.
Hoover’s Reconstruction Finance Corp. begat the entities that begat Fannie and Freddie. But the idea that homeownership is an entitlement, rather than a contractual responsibility, is fairly recent. Fannie and Freddie’s off-budget aspect we can date to LBJ. In my Bloomberg column I tried to trace that.
Lopez: Is there a forgotten man in this mortgage mess?
Shlaes: The taxpayer. The forgotten man is also the one who doesn’t happen to be in a favored constituency under the Treasury bailout. They’ll be plenty of favorites and non-favorites in the Treasury bailout, at least as outlined. Let’s hope the administration, Obama, McCain, and Congress make the regime more systematic and less discretionary when they write their changes in coming days.
http://article.nationalreview.com/?q=MTc1Mjg4ZjRlODY5NjBiYzVhY2I0ZDMyM2NmYjEwMDY=
“…..homeownership is an entitlement…….”
It has to do with that old “pursuit of happieness” line…….the inference being that without owning your home, you cannot be “happy”.
As this thing progresses, and more and more people have their financial choices limited by the financial albatross of a mortgage (or two) hanging around their neck, this attitude may change
Reader Beware- Link is to fascist/extremist StinkTank, NationalRebuke.
Except they keep forgetting the word “pursuit.”
Yup, you have the right to pursue happiness. But watch out. Happiness has a fancy set of shoes. And it can run fast.
Hank Paulson’s Nigerian Letter Scam:
http://www.boingboing.net/2008/09/22/hank-paulsons-bailou.html
And, what’s good for Goldman…. isn’t it interesting that Goldman is one of the last still standing? Coinkydink? I don’t think so.
http://www.ft.com/cms/s/0/21a55432-8a62-11dd-a76a-0000779fd18c.html
Don’t forget, Paulson said the govt will use “experts” to manage the bailout fund and auctions.
Anyone else thinking it will be Goldman Sachs? Either that or a subsidiary or a company that will be run by Paulson when he’s no longer Treasury Secretary — and they will be waiting with capital to buy up some of these “distressed” assets from the govt at a discount…count on it!
CA renter,
Sounds like a good bet…
Real estate offices closing to cut costs
by Andrew Travers, Aspen Daily News Staff Writer
Thursday, September 25, 2008
Officials from both companies said the closures do not constitute a significant weakening of a Basalt real estate market that has appreciated steeply in recent years.
But they indicated that eliminating their Basalt leases is a way to cut their fixed costs in the face of a tanking national economy, without limiting their ability to transact business.
http://www.aspendailynews.com/section/home/129510
Oh, I get it, real estate is fine, it’s just the economy that’s tanking. Yun disciples.
Notes on a Scare Card:
’ssshrubery felt the most important message of his 2 terms should be delivered in a hallway, not the oval office. It wasn’t very presidential, and having our dear leader read a less than candid canned speech obviously written by somebody else, is less than reassuring.
He actually called America a “house of cards”
Our hollow economy will not respond to his hollow words, plan accordingly.
This is a President who tries to distance himself from everything that scares him, as all those signing statements are a testament to his guile and deceit.
It took years for the country to rid itself of the menace that was Joseph McCarthy, and tailgunner Joe’s weapons were used against him in the end. These words silenced a traitor and allowed America to stand tall again.
“You have done enough. Have you no sense of decency sir, at long last? Have you left no sense of decency?”
House of cards? Three months ago it was “strong underpinnings”!
Last week the fundamentals were sound.
soon it will have free healthcare !
That would be far, far better than what the “free-market” adherents have given us over the past decade.
RE: Our hollow economy will not respond to his hollow words
It’s not just our economy that’s hollow…how about an entire culture.
Go score a copy of the Beantown Globe or any other urban daily rag and take a gander at the endless pages of the frivolous, trivial, and inconsequential storylines, especially those pertaining to “the arts”, expensive eating, celebrity gossip, “high-end” fashion”, and sports of every caliber and dimension.
People need to go back to producing their own food. Maybe they will get a clue.
If an economic meltdown can purge the system of all this mind-numbing superfluous fluff- bring it on.
“People need to go back to producing their own food.”
Where does one buy seeds to grow bags of “hot stuff” cheetos and bottles of mountain dew?
For that matter, where does one buy seeds to buy grow california rolls and bottles of perrier?
Nice idea to have a little property to grow food on. Except that I’ve been RENTING AN APARTMENT all this flippin’ time!!
I think Jeffery Dahmer found a solution to that little problem.
Does your community have any shared garden space? I have read of places turning empty lots into community gardens. If we’re talking about a garden plot as a necessary survival tool, though, I guess that doesn’t really mean much.
RE: Where does one buy seeds to grow bags of “hot stuff” cheetos and bottles of mountain dew?
From the Cheetos and Mountain Dew Seed Store of course!
I heard on the radio this morning, that (California) farm land was going for a premium right now. I am not surprised, since it did during the Great Depression.
I want a v i c t o r y garden, but a farm? I might break a nail
So the only worthwhile human pursuit is farming?
Let’s burn down the Museum of Fine Arts and hang Gordan Ramsey.
What’s frivolous to you is a life’s work to others.
RE: So the only worthwhile human pursuit is farming?
No…sitting in front of the boob tube eating Cheetos and swlling Mountain Dews watching Oprah re-runs while waiting for the food stamp, fuel subsidy, cash, and entitlement checks to arrive is far more productive.
Why, couch potato’ing is so yesterday. Today, it’s all about ‘Slacker uprising’. (have not seen it)
Then maybe all you smart people will show up for the DJ to play Zydeco Rock and Blues Fun music for a sick economy…and i can make some money to pay off MY bills…OK?
I’ll put up some more videos this weekend…check link
————————————–
If an economic meltdown can purge the system of all this mind-numbing superfluous fluff- bring it on.
….a man after my own heart.
It was remarkable yesterday. Among friends, family, and acquaintances I was considered “in the wilderness” for years when I talked emotionally about the existence of a housing bubble, declined urgings to buy a house or condo, and predicted that this would collapse worse than anything any of us had ever seen in our lives. The only kindred spirits I could find anywhere were on this blog. And yesterday the President of the United States conceded in a nationally-televised prime-time speech that a bubble existed and that our entire economy was at risk.
It is perhaps the greatest I-told-you-so that I have ever had in my life, but I can’t feel that good about it because our country’s attempts to “solve” the situation are likely to hurt the innocent at least as much as the guilty. Never has the myth of Cassandra made as much sense to me.
I feel vindicated, but it doesn’t alter the fact that nobody in my family acted upon my suggestions, which looking back, were 100% correct.
A hollow victory, of sorts.
Its been a brutal time since 2000 watching this go crazy but being able to do nothing to stop it.
I wish we had someone in line for the top that had a fricking clue.
I truly believe this is the time for us to rise up and sweep everyone out of office that has brought us to where we are today.
Anyone who votes for any kind of bailout that gives even a cent of taxpayers’ money to Wall Street needs to be tossed.
It would be great if we could write-in some of the great bloggers and economists who have been warning people for many years.
Of course, Ron Paul gets to stay!
We will see who votes for or against the Bill . I can’t judge until I see the final Bill ,but I can’t help but think that its going to be the Paulson Plan with minor concessions .
You know ,the original Politicians ,(George Washington and the gang ) ,sought to free us from oppression and taxing without representation ,and they set up all the good things that made this Country strong . When Bills and Declarations were signed in those days ,these rich men knew they might be killed or lose all their wealth as a result of signing the Declaration of Independence.In fact, I think a lot of the Founding Fathers did lose their wealth .
The current Politicians are enslaving us to taxation and oppression and inflation ,turning the Constitution upside down, in favor of the rich gambling casino at Wall Street ,and a obstruction of the rule of law .
The corrupt Politicians of today ought to be ashamed of themselves ,especially with letting a Wall Street prior Kingpin like Paulson call the shots ,rather than making him step down because of his conflict of interest position .
I just can’t believe what I’m seeing .
My dad knew a guy who had a ranch in NW Colorado, he was about to lose everything, disastrous weather, and he was overleveraged. One day they found his old beater pickup about 10 miles north of town, his wallet was on the seat. The guy just disappeared. Of course, he had no family, which makes it easier to disappear. Big investigation, nothing.
Friends spotted him years later in Salt Lake City. He had a new life.
Not good if you have family/kids/pets, but you can follow the spirit of it and reinvent your life and that of your family. Get out of debt, cut back, be frugal, enjoy the free things, move to a cheaper area and grow your own.
I’m one of those people that’s not in debt ,can afford my house payment ,always pay my taxes , and I have always work hard my whole life ,and I have had a good life . I don’t see how I will be one of the parties that will win by this interference of the government ,but maybe some people will win . I also don’t think my grandchildren will win ,and that’s the part that is really freaking me out .Darn, what are they going to face ,it sucks .
A Rep from Ohio is very emotional here:
http://tw.youtube.com/watch?v=mbD62gNi9WE
Watched her in another hearing the other day. She gets it, even if she’s favoring the homeowers and loan workouts. Wall Street is giving us the shaft.
Exactly why I chose this moniker.
And please don’t refer to Cassandra as a “myth”. Most of us on this board are living breathing examples of her undeniable existence.
House of cards, mushroom clouds, smoking guns, yellow cake, whatever.
Bloomberg: FDIC may need $
800150 Billion Bailout as Local Bank Failures MountIndyMac’s failure in July 2008 (the most expensive failure covered by FDIC ever) took a large bite out of FDIC reserves, and if scores of other banks fail in the year ahead, the fund will be depleted. Taxpayers will have to step in. By the end of 2009, about 100 U.S. banks with collective assets of more than $800 billion will fail, predicts Christopher Whalen, managing director of Institutional Risk Analytics, a Torrance, California-based firm that sells its analysis of FDIC data to investors. The FDIC has some idea of which banks are at risk; it has a watch list with 117 institutions. The agency won’t disclose their names because doing so could cause depositors to panic and pull out all of their funds.
The FDIC insures about $5 trillion in deposits at US branches of FDIC member banks. An additional $2.6 trillion in deposits is uninsured.
Investors are now worried that Washington Mutual (WaMu) may be the next bank to go TU. An FDIC takeover would cost taxpayers another $24 billion.
The FDIC had fallen into the same trap as member banks, relying on the recent past to predict the near future. In March it estimated 2008 costs to cover bank failures as $1 billion, which wasn’t even close. Critics of the FDIC say chairman Bair’s currently optimistic rhetoric matches the FDIC’s failure to grasp the scope of what is likely to come in the next 18 months.
Ha! You all have got to see this. Someone stripped the kitchen and bathroom right out from inside a high rise condo foreclosure in the middle of Chicago’s “Gold Coast”! I just had to share this one.
This is hilarious - and check out the price info at the bottom. The wolf is at the door here.
http://cribchatter.com/?p=5285
All across the political spectrum, from Bernie Sanders to Newt Gingrich, they don’t like the Paulson plan. Our president says it’s about to Armageddon. We’ve been ahead of the curve throughout this debacle. What should we do, my fellow patriots? How do we put America back on its feet?
Getting rid of every Congressional incumbent would be a good start.
That implies that the votes actually matter.
Somehow, given the 95% success rate of re-elections and the 15% approval rating of Congress, I am not really convinced…
Please please please help me get rid of
Mary(Whittaker,Bono,Baxter,Mack) BonoMack in Palm Springs.
She is a useless mouthpiece for George W, and recently was a witch flying to Dallas. Observing her
bad behavior was illuminating, or not. Just a reinforcement of yrs of viewing.
Well, aside from her bad, childish behavior, she hasn’t done anything for our valley/district.
Unless you have a major MJR bank acct.
I think that’s the crux. This plan does leave anyone with the feeling that things will get any better.
Doesn’t leave anyone with….
We should encourage an economy built on doing useful things, such as improving infrastructure and finding less expensive sources of energy. We should allow the economy built on useless things (building houses for people that don’t exist, creating financial instruments that hide risk, etc.) to fail.
When we elect leaders, the most important aspect of a potential president will be his ability to make us friendly to the rest of the world again. He’ll need to make it look like we’re not on the verge of self destruction. This will inspire outside investment in the US. When we elect senators and congress people, they should be in the vein of Ron Paul. The combination of personal freedom with personal responsibility were some of our greatest assets as a nation.
There’s more that I could think of, but that would be a bare minimum.
You are 100% right on!
There is a national chorus for infrastructure improvements as well as energy, transportation and health care technologies and innovations.
The first step to solving our problem is acknowledging what the problem is: and obsession with housing and credit.
Only after we stop focusing on housing and refocus our efforts on productive work can we emerge from the financial chaos a wiser, healthier and more productive nation.
Throw the gov’t out of the economy. That being said, it’ll never happen, because we are in the extreme minority, the majority of our compatriots want something for nothing: pensioners, gov’t workers, FBs, and now Wall Street, all rely on gov’t intervention in the economy. Therefore, the socialist path we have started on will only get worse, and is likely to end up in some sort of fascist scenario.
RE: Therefore, the socialist path we have started on will only get worse, and is likely to end up in some sort of fascist scenario.
That’s the way I’m seein’ it LAIGirl.
Just wait until the public pensions all come due and everybody with half a brain and a plan has vamoosed to Canada or any of the other 21 countries rated higher than the US for quality of life.
I don’t think that we can do much right now. Just sit back and let mathematics and time march their way across the land. They always reveal the absolute truth in the end. In the mean time prepare yourself (as Ben often suggests) to make smart investing decisions through the tumult. Those that went into this debacle holding all the $$ will emerge with nothing. Those that held an accurate and honest view of the situation will emerge as the wealthiest and most powerful. Then will be your turn to f things up.
You assume that the government will not steal from the winners to give to the losers nor change the rules. I agree the truth will come out in the end, but being right when the government is wrong can be very dangerous.
If you factor in these considerations then you must prepare for civil war in your investment strategy. Then, if you are lucky, you will escape with your liberties if not your property.
VirginiaTechDan …No truer words and warnings have been said by you in your post . Once the government starts going down a
certain path ,they tend to hold to it and do everything to justify it . I can’t believe how people don’t see that all investments are at risk because of the path that was chosen by these traitors .
“For owners, and for Main Street, this means property values are at risk of a freefall. For state and local governments, it means less revenue from commercial property taxes and an even tighter budget crunch. What happened to values in the residential market could very well happen on the commercial side - something which we can take steps to prevent,” said DeBoer.
http://www.marketwatch.com/news/story/now-time-take-resolute-action/story.aspx?guid={6047CA39-FFDC-4B05-BCB1-262FE276C282}&dist=hppr
Risk of freefall must mean reverting to affordability. If real estate clowns want this $700b bailout to pass, then it must truly be bad legislation.
Falling property values are “something which we can take steps to prevent”???? WHAT A CROCK!
So they are going to pass this bill with the cover that the pablum GW Bush fed to the populace ‘convinced’ them. What garbage.
The average Joe will believe that this will cause his house to increase in value and lower unemployment, et al, when we know it will do nothing but feed the beast that is the wall street confidence game.
CNBC is trotting out everyone this morning to tell us dumb taxpayers that this plan will actually create a windfall for us. There is gold buried in that pile of crap, I tell you. What garbage.
Insulting your audience is not a good tact to increase viewership. What’s more, talk radio is inundated with recapitalization revolt. People hate this plan. They’ve lost trust. If it passes, there’s no telling what could happen.
Confidence game is right. I saw the TV clip when Schumer asked HeliBen about getting the bailout in $150B installments.
Paraphrase Bernanke: Hem haw…ummm welll…we need all that $700B at once even if we don’t use it all at once because…hem…haw…ummm…Wall Street would FEEElllLL oh so much better if they knew they had all that $700B at one time if they needed it hem haw. If they feel good, then they will feel more confident, and it will convince them to go back to the business of steadily and perpetually going into deeper and deeper debt (collecting hefty fees of course), which is the primary mode of operation of our economy, which by the way is fundamentally strong.
(okay okay, that last sentence was mine.)
That was my take on it as well. The reasoning seemed to be that it HAS to be such a huge amount simply to “restore confidence”. So, it’s a confidence job, eh?
What happens when they pump in the money and the economy still falters - a bank fails or home prices decline? An absolute panic.
And another thing - they keep saying it’s to prevent the economy from slipping into recession. Don’t they mean depression? Because we’ve had quite a few recessions and we’ve weathered through them. Isn’t recession a normal part of the ups and downs of an economy?
they need the money to go to iran.
exactly. these guys can’t talk straight, even when they’re begging. Eight straight months of job losses, 24+ months of year-over-year sales and price declines of homes NATIONWIDE doesn’t amount to a recession? “You see, it’s only a recession when my figures tell you it’s a recession.” Reminds me of the scene in National Lampoon’s Vegas Vacation where the casino game was Pick-A-Number: “15?” “No!”
Yeah I noticed the Prez last night said if we don’t do this the country will go into a “deep & protracted recession”. Okay. So what’s “deep & protracted”? Are we talking about shaving 3% off of GDP for a full 6 months? Hey, I could live with that. No need to spend all that money. Lay me off. I have the cash and need the time to work out some kinks in my golf swing.
Now if he had to cojones to say “the next great depression with 25% unemployment for the next 10 years”. Well then let’s talk.
trickle down, or is it trickle up?
“CNBC is trotting out everyone this morning to tell us dumb taxpayers that this plan will actually create a windfall for us.”
That’s been annoying me too… talking heads saying the taxpayers could actually MAKE money on this bailout.
Well if its such a good deal, I’d like to see them buying some MBSs/CDOs for their own portfolios.
I’m SO glad that I had something else to do yesterday evening. At 6PM AZ time, I was nowhere near a teevee.
From today’s Boston Globe.
US bank backstop could need rescue of its own
They were blinded by years of rising home prices and low mortgage default rates.
The FDIC fell into the same trap. As recently as March, an FDIC memo estimated the cost to cover bank collapses in 2008 would be just $1 billion, dropping to $450 million in 2009. It wasn’t even close. The IndyMac failure alone will cost the FDIC $8.9 billion.
****************
My take …
First they report last week that governor Patrick’s budget genuises estimated the Sept 08 budget at 70M above the Sept 07 budget. They were shocked to find out that in reality there was a 200M shortfall. They apparently came to this conclusion in June 08.
Then we get Sheila Bair and the FDIC. Talk about an incompetent entity. How on God’s earth could they have made these predictions ($1 billion) for 08 in March 08?
They should all be held accountable and promptly fired! Idiots.
A few weeks ago I heard somebody say that if they were going to put a woman on McCain’s ticket it should have been Sheila Bair. They were serious. My brain nearly melted.
Sheila Bair (on CSPAN several times in the past year) = deer in the headlights.
Unfortunately, she drank the Kool-Aid. Who at the FDIC thought that “the cost to cover bank collapses in 2008 would be just $1 billion, dropping to $450 million in 2009″?
Only the bloggers, of course.
’ssshrubery emphasized that nobody has ever lost a penny in an FDIC insured account and everybody’s money is safe, which to me implied that hyper-inflation is on the way…
Your $100,000 that you get back from a failed bank will have the buying power of $20,000, soon, but you will get it back.
It’s de plan, boss, de plan!
Maybe, but then again I’ll have $20,000 - but my paycheck to paycheck neighbors and coworkers? They will still have nuttin’.
Unless of course anyone actually believes they will get their wallets magically filled - for the rest of their lives.
The hyper-consumers and their economy are toast.
Sept. 25 (Bloomberg) — Ambac Financial Group Inc. and Federal Agricultural Mortgage Corp. tumbled more than 50 percent in the past four days. And you can’t blame short sellers.
Short buyers are to be blamed.
Get the FBI over there. This must be fraud.
Ambac*: The Short Pill
* Side effects too numerable to mention
Don’t worry, Senator McCain has suspended his campagin and is heading to Washington to “roll up his sleves” and take charge of this mess. All is well, all is well…..all is well.
I’ve been thinking during this whole mess, the one thing that was missing was McCain. I’m going to sleep well tonight.
It’s actually a smart political play. Hide behind closed doors pretending to be fixing the world, instead of being out in front of cameras alternating between putting your foot in your mouth and trying to extract it.
It’s actually a smart political play.
In the sense that this week was a complete freakin’ fiasco for his campaign, yes.
What a complete coward. His entire dysfunctional operation is schizophrenic. Considering he has nothing to do with the details until it’s up for a vote, what could the blithering idiot possibly contribute? A big nothing.
When the the needle on the Bullhooey Detector is pinned all the way into the red:
Former House speaker Newt Gingrich said the decision to suspend campaigning and lend a hand to the negotiations in Washington was “the greatest single act of responsibility ever taken by a presidential candidate.”
Single!
Greatest!
Act!
too bad that instead of hiding behind closed doors, he was getting called out on the David Letterman show for doing a news interview with Katie Couric and spent his morning today in NY at the Clinton Global Initiative.
What for? He said the fundamentals of the economy are strong?
fun dumb mentals are strong!
Two talking heads have arrived in Washington to deal with the problem. Whichever candidate appears to handle this crisis best is going to win the presidency.
Rushed legislation + a contest between two egomaniacs = This country is screwed.
My advice would be to get as comfortably numb as possible.
Lad, how?
Take 2 Ambacs and sleep it off.
They can’t do anything without McCain and Obama??? Please, spare me.
Obama or McCain. So what. Neither one of them will be able to do a damn thing.
Which guy wants to be the next Alexander Severus?
Sure they can. They can do a photo op and they can vote. Do we really WANT them doing anything else? Not!
The REAL winner in the coming election will be the one who comes in second.
As for the one who gets the most votes, I think Mr. T says it best: “I pity the fool.”
We need an FDR. Could Obama be the guy? We need to know who his team will be. It had better be a good one.
Obama has tremendous potential, although the rough French translation of the word means, “you haven’t done a damn thing yet”.
He has the inherent intelligence most every other country longs for in their leaders, but we consider it to be an elitist trait that his mind is superior, as if it’s his fault somehow.
Intelligence will defeat apathy & blind faith, but only if a given a chance…
He has my vote.
Superior??? Not much evidence of that.
Blano,
You are on the short list of people that I want to cancel out votes with.
My idiot sister is far in the lead however.
I called her Sunday to warn of economic peril and she told me she thought it was “no big deal”.
She asked me who I was voting for and I told her, Obama.
The next three words out of her mouth were:
He’ll Raise Taxes!
==================================
Graduate school at Columbia and juris doctorate from Harvard. Naahhhh… no superior intelligence there!!!! lmao.
Unfortunately, a lot of people seem to think either no big deal, or aren’t even paying attention.
Taxes aren’t the problem…..spending is the problem, IMHO.
I’ll be thinking of you in the polling booth.
exeter:
I know Professor Arthur Miller from Harvard worked on his tv show He encouraged me to be a paralegal since i had a very inquisitive mind and offbeat way of looking at things…
My cousin the DR. works at Harvard Medical, looking for cures for asthma and other diseases
“Graduate school at Columbia and juris doctorate from Harvard. Naahhhh… no superior intelligence there!!!! lmao.”
If you think anything from Columbia and Harvard are examples of superiority, you’re even snootier than I thought.
So you would be fine with any old community college grad?
That would be Palin. So it appears that he would be fine.
There are worse things than to be called snooty. Being the sort who is contemptuous of achievement, for one.
I know high school grads that are more intelligent and well-educated than most of our Congress.
“So you would be fine with any old community college grad?”
Possibly……..depending on what they’ve done with themselves. I’m not such an elitist that I’d rule someone out just because of that.
Plenty of schools around the country can match the Harvard/Columbia education without requiring an introductory course in Snob 101.
We tried and are continuing the lowest common denominator route (wouldn’t he be great to have a beer with, wouldn’t she be great to hunt a bear with) of selecting leadership, and the results so far have been quite damning.
Why continue down the slippery slope of relying upon average intellect, and superior dogma?
You mean like that Harvard Grad superior intellect in the White House right now?
Hey now, oxide, Mein MBA Prezzident went to Yale for undergrad, Harvard for business school.
I blame Connecticut!
Jim Cramer went to Harvard. Yea, he’s a good one.
“Plenty of schools around the country can match the Harvard/Columbia education”
Name them.
Waiting………
ex- Did you go to Harvard? You’re really defending them.
Sarah Palin failed the Katie Couric interview. Sarah is a light-weight in the intelligence department. If she inherits the POTUS we are all in trouble.
I think Bush is smarter than Palin but he has some problems communicating his thoughts.
The test is when they are asked questions they have no idea they are getting in advance. I don’t think Obama has passed the test yet iether.
“..Bush is smarter than Palin..”. that must be some strong stuff you have.
1921 gov did nothing
1930 gov did everything
you want a new, new deal?
We need to know who his team will be. It had better be a good one.
Indeed.
He’s smart enough to know he needs a crack team, and compelling enough to attract top policy talent. Paul Volker, for one, is an economic adviser.
Paul Volker … or Phil Gramm? The contrast of economic policy experts to each candidate is telling.
Volker for Sec Treasury!
Franklin Raines for HUD secretary (he’s already on Obama’s advisory team).
(he’s already on Obama’s advisory team)
No, he’s not.
You must be listenin’ to Fathead Limbaugh and his equally, uh, talented peers.
While we’re on the subject, one candidate’s campaign manager is tied closely Fannie and Freddie, and he doesn’t seem to want to explain those ties, or why his firm received so much money.
Care to guess which candidate? Oh, OK, I’ll tell ya: Johnny The Mav.
Freddie Mac was paying McCain campaign manager Rick Davis’ lobbying firm $15,000 a month up until last month. Davis doesn’t want to explain that, for some reason. The information McCain gave voters about his campaign’s ties to Freddie Mac was false.
Interesting, no?
I thought that was a fallacy? I read up on a it a bit and what I read was that members of Obama’s campaign had called Raines a few times and he answered their questions, but that was the end of it?
Link please.
ET,
Too much logic. Some people have to believe all the rumors without checking the facts. This goes for both sides of the political spectrum.
http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie.html
Top 3 biggest recipients of Feddie Pay political contributions: DEMOCRATS who defended and protected the GSEs from oversight requested 20 times by the Bush administration (like good old traitor Chris Dodd). Everybody in DC is to blame, but a few people are on the political payoff rolls…namely The Messiah Barack Obama, & his illustrious predecessor John swiftboated Kerry. Golly gee, who knew?
I think he is a pragmatic guy…He is also very intelligent and if we have learned anything over the past eight years it is that “intelligence matters” in a President….Even though some of his physical policy’s will go against some of my personal beliefs I do think he will surround himself with very good people…Not just “Yes Men”…
“I do think he will surround himself with very good people”
This is key! And this is why all the harping on his “lack of experience” doesn’t bother me. He has proven to me enough in this campaign that he can pick the right people to advise him. When I learned that Volcker was one of his economic advisors, my vote was cast.
And I have no idea why his campaign doesn’t make more of the fact that we’ve had very “experienced” people leading this country for the last eight years and where has that gotten us? Not that experience is not important, but all these republicans running around the place talkin’ about “experience” just boggles my mind! How many decades of “experience” do we have between Bush-Cheney-McCain? What good did that do?
Anyhow, I personally am deeply disappointed in John McCain. I am an independent and have championed him for years, because I always felt John McCain at least understood that you have to work with the other party and not be so partisan all the time in order to bring about good the American people. I also admired him becuase he would not pander to the religious right even though it cost him politically. I even predicted to my angry Democratic friends on the eve of W’s second term that they needed to prepare for four more republican years after W was finished because McCain would win the presidency in 2008.
I have been so disappointed to see McCain resorting to all the dirty politics of his predecessors. And then you slap me in the face by picking Sarah Palin in order to bring the conservative base on board? What happened to the moderate I used to admire so much?
Well John, you left with no choice but to support Obama.
That’s not true. I guess I could write in Ron Paul, or Ben!
so was Jimmy Carter … Remember him?
can anyone compare the 700 billion to the RTC ?
we got back 35% roughly in the 90’s
The $700 billion plus the $300 billion for Fan & Fred is about equal to the entirety of spending on “welfare” (ie. AFDC and TANF) from 1958 to 2005, adjusted upward for inflation. That’s nearly 50 years. The unadjusted total spent on “welfare” is less than $600 million.
And that’s just the last couple of weeks.
That’s why I love the desperate attempt to blame the Community Reinvestment Act. It must be those black folk’s fault somehow!
“…is about equal to the entirety of spending on “welfare” (ie. AFDC and TANF) from 1958 to 2005, adjusted upward for inflation. That’s nearly 50 years.”
The “crisis” consumes 50 years of payments to America’s poorest?
Wall Street “Welfare” = 1.1 Trillion Dollars = in less than 10 days
Now that’s what I call the “Republican” …New Deal
I heard Cheney was stomping around the Republican halls of Congress…those Republican Senators must have been shaking in the flip flops.
Shrub-Cheney: “How we saved “Trickle Down” economics”
Published by: Howey, Cheatum & Dewey
It’s going to be much easier around the dinner table this “Thanksgiving”… when a “young repubican” decides they have something to say about “tax & spend” Democratic Liberals.
Thanks for that comment. The CRA might have been a good idea if valuations had held at appropriate income levels. IMO, giving people access to mortgages for 15K-50K homes is still a good idea — it’s when you start appraising shacks at 150K that you run into these problems.
The bulk of defaults, in terms of housing units and total dollars is still going to come from the stalwart middle class housing stock, where houses that used to sell for 75-150K started selling for 300-600K.
These are the people who HELOCed their lifestyles, who realized there wasn’t enough income to save for retirement and thus, needed their houses to go up 300% in their lifetime.
That’s why I love the desperate attempt to blame the Community Reinvestment Act. It must be those black folk’s fault somehow!
Maybe The Professor will stop by today to explain his Brown People Caused This Financial Crisis Theory.
His response yesterday was less than illuminating.
One of my replies to the Prof was mercifully deleted by the server / Ben.
-
edited version:
-
Of course, the real victims in this crisis are:
Wall Street
Investment Banks
Hedge Funds
Local Banks
Millions of greedy financially well-off individuals
Realtards
Mortgage brokers
Unbridled Capitalism, “greed is good” mentality, what is not to understand?
Maybe I have a different understanding because I have a relative who was on the Board of Enron and had a senior position at Chase.
Sense of entitlement? Undeserved welfare? I have my own take on this.
Multiple articles in the local fishwrap in the early 2000’s regarding how local Cleveland pols were threatening the regional banks here in N Ohio with loss of their charters if they didnt bulk up on mortgages from those areas which were previously “red lined”. Banks always came out with a statement saying they were actively seeking mortgages in the getto. We now know the result. Clinton was in office when this started in earnest. Of course, Dems will blame this all on the Reps.
Got 35 % back in the 90’s ,we will get minus 20% back on this one .
Jobless claims pushed to 7-year high
Thursday September 25, 8:57 am ET
Even excluding the effects of the hurricanes, jobless claims remain at elevated levels. Weekly claims have now topped 400,000 for ten straight weeks, a level economists consider a sign of recession. A year ago, claims stood at 309,000.
http://biz.yahoo.com/ap/080925/jobless_claims.html
Faber Says U.S. $700 Billion Rescue Plan Isn’t Enough
By Hanny Wan
Sept. 25 (Bloomberg) — The U.S. government’s $700 billion bank rescue plan won’t be enough to revive the finance industry, said investor Marc Faber, who forecast the so-called Black Monday crash in 1987….
“I don’t believe this is going to be solved in six months to a year,” Faber said.
Faber also forecast the Standard & Poor’s 500 Index will rally to as high as 1,350 points following the approval of the bailout plan because stocks are “oversold.” That level is about 14 percent higher than the gauge’s close yesterday.
`Earnings Bubble’
Still, “I’m not playing that rally,” he said. “I’d rather think that stocks are not particularly cheap. We don’t have a valuation bubble. We have an earnings bubble. In 2009, earnings will disappoint.”
“Still, ‘I’m not playing that rally,’ he said. ‘I’d rather think that stocks are not particulary cheap. We don’t have a valuation bubble. We have an earnings bubble. In 2009, earnings will disappoint.’”
Yep, and when earnings disappoint stock prices will collapse, and that will be the time to move out of cash and into quality stocks.
1974centric
Ah yes, 1974. An excellent year to buy stocks.
I’m wearing my W.I.N. button today, in your honor.
Thank you.
I’m wearing it upside-down and it now says N.I.M.
Could anybody decipher this acronym?
You forgot B.Y.
Ah, it’s good to see Gerry Ford’s WIN buttons back in the comments.
N.I.M.
Not in Mypocket
N.I.M. = Needless Intervention Maneuver
According to Ford, N.I.M. stood for “No Instant Miracles.” Quite appropriate for these days too.
7% unemployment seems to be baked in…Will it be more like 8 or 9% ??
We’re already there. The government numbers just haven’t caught up yet.
hoz, if you were holding SRS right now, would you dump it? Long term, I have trouble believing these imbeciles will solve anything, but it’s tiring getting caught in the crossfire.
I have SRS and frankly is somewhat disappointed it hasn’t gotten anywhere in the last 6 months or so, with the homebuilder stocks very ’sticky’ with the false hope of rescue via Uncle Sam bailout packages in the works.
I am keeping mine as an overall hedge to my entire stock portfolio, along with SDS.
I mentioned the other day that I’m working towards getting my house on the market here to sell in Austin. I met with a realtor yesterday (the one I used to buy - very smart+honest woman who doesn’t deserve the same lashing that realtors get here in general, IMO).
In the literature they gave me there is this “gem”:
What is your property worth?
* What you paid for the home does not affect its value!
* The amount of cash you need from the sale of your home does not affect its value!
* What you want for your home does not affect its value!
What another real estate agent says your home is worth does not affect its value!
* What an appraiser says your home is worth does not affect its value!
The value of your home is determined by what a BUYER is willing to pay in TODAY’S MARKET, based on COMPARING your home to others currently on the market for sale.
I’m glad to see that she gets “it.”
oops, close italics…
WOW WOW WOW. An honest realtor, a rare gem.
Yes. I wonder if seller expectations or recent events prompted this to be added to the packet…
Not a rare gem in certain parts of the country.
Of course, I only deal with realtors who have been in the business for 20+ years, and given Ohio’s recent economic history, they’ve seen it all.
Yes there are some honest politicians, lawyers, and real estate agents. They are few and far between, but they’re out there.
Awesome to see a stark example. She should be held up for the world to see.
Unless the words are lip service (something to always be wary of).
They should send that Realtors memo to Paulson and maybe than we won’t overpay for the toxic junk that is suppose to make the taxpayers money .
I heard on the news that Gross thinks 65% is what the gov should pay
for toxic fraudulent junk CDO’s . But of course Paulson and the Feds will
protect the taxpayers and make sure that they make money ,and real estate always goes up and can’t lose and ………..
If Gross thinks the govt should pay 65cents for the trash, he will want to pay 7 cents after the govt buys it.
The taxpayer will not make money on this deal, no matter how much they try to convince us otherwise.
Hahah, that’s pretty great. Too bad they can’t all be like that.
I’d prefer the soft purring reassurances that my house is special, and everyone is going to want to buy it. Ahhhhh.
drumminj,
That is blunt and realistic, for RE literature.
I look forward to your postings about selling your house at this kind of odd time in the Austin market. I wish you the best in selling, moving, getting new employment, and enjoying a little break between jobs.
Much as I used to enjoy Austin, every day it seems like a better place to leave…
She gets it, but what kind of ads did she run when things were selling? CYA when nothing sells.
Sounds to me like the realwhores need to get the home sellers to drink the new flavor of NAR koolaid. I think it’s more a play of desperation. No home sale = no realwhore paycheck
NYC people, big bailout protest planned today at 4 p.m. at the bull in bowling green - bring your junk and your bipartisan outrage:
http://www.businessweek.com/bwdaily/dnflash/content/sep2008/db20080924_430418.htm?campaign_id=rss_topStories
Erosion of GSE Holdings Forces Second Bank to Sell
Its capital depleted, Gateway agreed to sell itself to Hampton Roads Bankshares for $101 million. The deal hinges on Gateway’s being able to raise $30 million in capital first.
American Banker
early warning signal
“Early warning signal” due to the GSE preferred stock that so many banks have, and may have to write down?? Thanks.
Erosion of GSE Holdings Forces Second Bank to Sell
“Erosion”, I like that term. It’s a subtle slow natural process that you can’t really blame anyone for. Kinda like “God’s plan”.
capitulation on WM?
markets pricing in FDIC tomorrow.
Im bidding long into the close. 250billion is gonna hit on Monday.
Im either stupid or brilliant, cant figure out which.
JPM just got branches and deposits.
news is still coming out….WSJ subscription only.
the story turns so fast, its hard to keep up….
where are the toxic assets?
shareholders just got wiped out.
open to buy expired….
phewww,
they seemed unhappy with my 50 cent bid into the close. looks golden now as they are still trading at 0.47
Nice call, BTW. I’m wondering myself. I’m actually quite unsettled that it ISN’T FDIC. What happens when JPM goes belly up?
And yeah, how do you separate out deposits without BK?
I’m thinking that this is going to turn out FDIC when we hear the release at 6:15pm PDT.
My the movie Platoon : Sgt. Barnes: Shut up! Shut up and take the pain! Take the pain!
From Wallstreet : Lou Mannheim: Kid, you’re on a roll. Enjoy it while it lasts, ’cause it never does.
Finding Nemo: Just keep swimming, just keep swimming….
Sgt. O’Neill: Bob, I got a bad feeling on this one, all right? I mean I got a bad feeling! I don’t think I’m gonna make it outta here! D’ya understand what I’m sayin’ to you?
Chinatown … Welcome to the future!!
Jake Gittes: How much are you worth?
Noah Cross: I have no idea. How much do you want?
Jake Gittes: I just wanna know what you’re worth. More than 10 million?
Noah Cross: Oh my, yes!
Jake Gittes: Why are you doing it? How much better can you eat? What could you buy that you can’t already afford?
Noah Cross: The future, Mr. Gitts! The future. Now, where’s the girl? I want the only daughter I’ve got left. As you found out, Evelyn was lost to me a long time ago.
Jake Gittes: Who do you blame for that? Her?
Noah Cross: I don’t blame myself. You see, Mr. Gitts, most people never have to face the fact that at the right time and the right place, they’re capable of ANYTHING.
“Sgt. O’Neill: Bob, I got a bad feeling on this one, all right? I mean I got a bad feeling! I don’t think I’m gonna make it outta here! D’ya understand what I’m sayin’ to you?”
Sgt. Barnes: Everybody (Everybank) gotta die some time, Red.
Also..
RE: GS with Paulson as TS.. Substitute GS for Barnes..
Rhah: “Barnes been shot seven time and he ain’t dead. Does that mean anything to you, huh? Barnes ain’t meant to die.”
Do not fear fellow Americans
The great economic genius McCain interrupted his election campaign to set things straight in Washington. Now that the cavalery is on its way all will be good. Don’t worry, be happy.
I’ve been thinking about what the political tactic here was. At first I thought it was the ‘ole “make your opponent look like he is doing nothing while you are doing something” trick, but now I think it might be just a good excuse to avoid a debate which is bound to be heavy on economics.
yup, and when it all dies anyway, he’ll have to defend his sword skills…
tricky biz, avoid debates or be associated with certain failure
I lent a friend my copy of “The Great Crash-1929″ a few months ago and he took awhile to get around to reading it, but finally did, and we were drinking vino last night talking about the similarities to then and now, and we both agreed that reading it is like going on a glass-bottom boat view of the future, from the past.
I got that book a few days ago from the library (along with a book about one of the 1800’s panics because I couldn’t resist Rothbard’s name and another book about another 1800’s panic just to make it a trifecta).
I’ve only read the first chapter, due to test taking/school work, but there was a passage which someone had underlined in pencil that discussed Americans’ get-rich-quick (I’m paraphrasing) mentality during the 20’s. It was funny b/c it sounded exactly like they were describing people today. Exactly.
I hope to read most or all of it this weekend.
“It was funny b/c it sounded exactly like they were describing people today. Exactly.”
You will find a lot of lines like that in that book. There were so many, I saved some on my computer and reread them on occasion. It’s a great read.
How did gold do during the depression?
In my fictional conversation with the me of 1932 yesterday, I divulged facts that most people don’t know about the price of Gold and how it reacted as countries went off the Gold Standard, one by one…
As these currencies weren’t backed by anything anymore, Europeans started longing for our supply of the precious, as we were the last holdout.
The price of Gold went up to around $27 to $28 per troy ounce, and an incredible amount of U.S. $20.00 Gold Double Eagles were shipped back to the old country.
FDR came up with a set price of $35 per oz, which was 20% over what the Europeans were willing to pay, in an effort to shore up the Dollar.
So starting in 1929 when an ounce of Gold was worth $20, it increased 75% in value.
What else performed this well in that decade of debt & doubt?
The old mining town of Silverton, Colorado, across the hill from where I currently am (Galt’s Gulch), is the scene of major new exploration of old mines to see what’s left. There are entire mountains left, silver and gold both, but hard to get the stuff out.
Gold didnt go up 75% until FDR outlawed owning it. Americans were told it was in the countries best interest that everyone turn in their coins. Gold skyrocketed only after it was confiscated.
Alad - Dig into Rothbard’s America’s Great Depression - not as good of a writer but a better observer of the real causes of the crises.
“The Great Crash-1929″
Great book - just finished reading it. There were a lot of similarities to today’s economic situation.
I just started reading “Trading Chicago Style” by Neal Weintraub. Its a collection of interviews with traders. Although this book was published in 1999, some of the traders pinpointed the current bear market - a decade in advance, and ahead of most of the housing bubble.
Asia Needs Deal to Prevent Panic Selling of U.S. Debt, Yu Says
By Kevin Hamlin
Asia Needs Deal to Prevent Panic Selling of U.S. Debt, Yu Says
By Kevin Hamlin
“Sept. 25 (Bloomberg) — Japan, China and other holders of U.S. government debt must quickly reach an agreement to prevent panic sales leading to a global financial collapse, said Yu Yongding, a former adviser to the Chinese central bank.
“We are in the same boat, we must cooperate,” Yu said in an interview in Beijing on Sept. 23. “If there’s no selling in a panicked way, then China willingly can continue to provide our financial support by continuing to hold U.S. assets.”
An agreement is needed so that no nation rushes to sell, “causing a collapse,” Yu said. Japan is the biggest owner of U.S. Treasury bills, holding $593 billion, and China is second with $519 billion. Asian countries together hold half of the $2.67 trillion total held by foreign nations.
China, Japan, South Korea and others should meet soon to seal a deal, said Yu, a former academic member of the central bank’s monetary policy committee. The talks should involve finance ministers, central bank governors and even national leaders, he said.
“Whether some kind of agreement between them to continue to hold Treasury bills is viable, I’m not sure,” said James McCormack, head of sovereign ratings at Fitch Ratings Ltd in Hong Kong. “It would be unusual. If it became apparent that sovereigns in Asia were selling Treasuries the market would take that quite badly, it’s something to be avoided.” …”
An excellent reason to not own treasuries. The entire future of the US relies on not just the Asian countries not dumping treasuries, but our erstwhile allies such as France not dumping their holdings. The first one out gets the dough.
They are truly abandoning the ship now. Interesting to see them looking for the nearest exits.
“It would be unusual.”
Perhaps unusual, but not unprecedented. I am somehow reminded of the central banks all agreeing not to dump their gold on the market at the same time, or lease any more of it than they already were, etc… When was that again?
–
Housing Price Declines In CA and US Are Accelerating
Metropolitan Areas — the Latest Trend (Transactions That Originated In July) In Price Decline in PPSF (% Anuual Rate)
Miami, FL -41%
Las Vegas, NV -41%
San Fran, CA -39%
Phoenix, AZ -33%
San Diego, CA -29%
San Jose, CA -28%
Milwaukee, WI -28%
Los Angeles, CA -28%
Boston, MA -27%
Charlotte, NC -21%
Columbus, OH -20%
Denver, CO -19%
Sacramento, CA -17%
Seattle, WA -16%
Washington, DC -12%
CA -28%
25 MSA Composite -20%
Depression beginning in 2009 is unavoidable, folks. Bernanke, Paulson, and who ever is the next President are impotent to prevent a depression. It is an economic phenomenon and not a political one. Americans think that Fed and USG can prevent depressions. It is more likely that I would win the Heavy Weight Championship.
Jas
You forgot Chicago, Jas.
Don’t spare me, I can take it!
Let me guess: Chicago is different.
(Do I win a pony?)
–
Mid-West is NOT part of the Price Bubble burst and prices there don’t have as to fall as in AZ, CA, FL, NV, etc.
Jas
You have Milwaukee, WI at -28%. Where the hell is Milwaukee located? And my home state of Minnesota which is located in that fictional Midwest had a huge bubble. Prices need to fall 30 - 40 percent, in my not so humble opinion. They are already down quite a ways. The Land of 10,000 Lakes is seriously underwater. This is not a coastal, and sunny state, phenomenon.
–
They had there declines mostly last year (after the Credit Crisis) and early this year and prices in most areas are already at 80-120 PPSF.
I was fucusing on the RECENT (OR LATEST) TREND (please read the title of my post, thanks).
Jas
I think you are right about a 40% drop.
I remember watching “House Hunter’s” on HGTV and some women bought a $350k loft on the river in downtown Milwaukee. I just don’t know what she was thinking spending that kind of money for a condo.
Did you see Wauwatosa firefighters will party at the Hef’s Mansion this Halloween:
http://news.google.com/news/url?sa=t&ct=us/0-0&fp=48dbb544695be022&ei=oejbSPWxIYP0-gGjp_GDBA&url=http%3A//www.jsonline.com/story/index.aspx%3Fid%3D798993&cid=0&sig2=0ts-jlkEKPZDxRL9G7jVBw&usg=AFQjCNFxudHZdCwo9tbgcArWGMYL53j_sw
“Mid-West is NOT part of the Price Bubble burst and prices there don’t have as to fall as”
I did read your post and it is stupid. Read my post. The Midwest was bubbly as all hell. Maybe if you got out of your bunker more often you would be able to know that.
What about Columbus, Ohio. Declining at a 20% rate.
The Midwest overbuilt housing, given its stagnant population. Prices will fall. They may not match the percents in CA, FL, NV, AZ, but the percents will not be small.
If your point was that in absolute dollars, the declines will be relatively minimal, then you may be right. Falling from $100k back to $80k is not quite the same as falling from $500k back to $350k.
WASHINGTON (Reuters) - New orders for long-lasting manufactured goods dropped by a sharper-than-expected 4.5 percent in August as demand for transportation equipment and many other costly items plummeted, the Commerce Department said on Thursday.
WASHINGTON (AP) — New claims for unemployment benefits jumped last week to their highest level in seven years due to the impact of a slowing economy and Hurricanes Ike and Gustav, the Labor Department reported Thursday.
Wall Street opens higher as investors await movement on financial rescue package
NEW YORK (AP) — Stocks are higher in early trading as government officials move closer to a deal aimed at saving the crippled financial system.
Things could be better I suppose……..
Detroit is the big winner. They are quietly lining up 25 billion in low interest loans.
Sorry if this is a repost, but an article in the local rag today mentioned that they’ll be going after another 25 billion sometime after the election.
They should stop making cars and just become lobbiests. They’re terrible at one and great at the other.
To be a big winner you have to be a big whiner to get money from our troupe of congress clowns.
What a pity, and they made such a beef about those July numbers - waaaaaaaay back when.
Asia Needs Deal to Prevent Panic Selling of U.S. Debt, Yu Says
By Kevin Hamlin
Sept. 25 (Bloomberg) — Japan, China and other holders of U.S. government debt must quickly reach an agreement to prevent panic sales leading to a global financial collapse, said Yu Yongding, a former adviser to the Chinese central bank.
“We are in the same boat, we must cooperate,” Yu said in an interview in Beijing on Sept. 23. “If there’s no selling in a panicked way, then China willingly can continue to provide our financial support by continuing to hold U.S. assets.” …
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=anZHfo6tQi60
2nd attempt to post. Provided nobody else panics on the treasuries, China will continue to support. Not oh so bad, I just don’t trust any large holder of treasuries.
If the deal was based on what China would do,than why did we do it ?
I call that the biggest gamble of American History .
Lightbulbs going on all over the world.
“The U.S. financial crisis had taught China a lesson and that was: ‘Why are we piling up these IOUs if they may default?’ China’s economic expansion strategy, which emphasizes export growth that has led to trade surpluses and the accumulation of $1.81 trillion in foreign-exchange reserves, is the main problem, said Yu. ”
“Our export-growth strategy has run its natural course.”
No more cheap imported goods for you!
“…No more cheap imported goods for you!”
Rewrite:
“…No more cheap imported crap goods for you!”
Made in China = Toxic warning label!
101 Ways To Restore Confidence by Hank Paulson ,to be in your stores soon on the book selves ,or ,HOW TO CARRY A BIG GUN
AND CAUSE A RUN ON THE TREASURIES by Hank Paulson .
The Chinese should have been reading Ben’s Blog all this time. No excuses, you guys over there where it’s supposedly light while we sleep.
hoz, what are you doing to position yourself for the next leg?
I used to be skeptical of the greater-depression-theorists (always thought it was be a harder recession than the last few though). But the recent actions suggest to me that the PTB are more scared than I am; I can’t make sense of the recent actions unless THEY think that GD II is on the horizon.
hoz, I’ve learned alot from yours posts over the last few years, and would really appreciate your thoughts on positioning for protection—-in a way that is actionable for the little guy, of course.
I am always willing to change my attitude about anything.
All available data strongly suggests massive inflation for the next 5 years with a significant drop in the dollar relative to Asian currencies.
I am long Yen/ short the Euro. All my other positions are just hedging against this.
Like all- I cannot predict the future - the best that I can do is take available data and extrapolate.
“The market will do, whatever it can do, to cause the greatest amount of pain to the most amount of people.”
Much appreciate it hoz!
I too have suspected that the Euro (and other currencies) would follow us into the toilet eventually; that belief is part of what makes me suspect that significant losses in the dollar (if they occur) will be mitigated by subsequent declines in many other currencies that will boost the dollar on a relative basis.
Long Yen/short Euro makes sense to me…
Thanks!
hoz,
No offence, lad, but I grew up in a country filled with inflation.
I know how it works. You get rid of it as soon as you can. H*ck, my uncle ran a foreign currency anti-inflation-unit. Illegal as all f*ck. You get rid of the money pronto.
You see that here? If you do, please provide some evidence.
If this is inflation, kid, you haven’t the faintest foggiest idea of what you be talkin’ about.
We’re unambiguously in credit contraction, Fed or no Fed, and we’re doing a Japan.
Sure so far this year the dollar has dropped against the Yen by 8%. Unchanged against the Euro, down 6% against the Yuan. Down 20% against the Ringitt etc.
However against most of the Euro nations the dollar looks healthier. But even the Forint has gone from 186:1 to 166:1
But fleeing the dollar, already happening - TIC data shows there was $13B that left the US in July (most recent month available). First the dam breaks as a trickle, then a deluge.
As to other signs of inflation import prices are up 17.8% from China, Imports from Europe are down. Commodities are up on average 30% this year. Dow Chemical raised wholesale prices 2X this year 1st by 25%, then by 20%. It will pass through.
We are already seeing the trickle effect on the import increase in prices from China. Greater sales revenue at WalMart fewer items sold.
I am not talking about hyper inflation, I am referring to massive inflation 6 -8%.
Please don`t stone me to death, especially nycityboy, lol. I`m just throwing a thought out there… It allmost seems inspite of all the problems out there, paid for or properlly managed real estate is sort of a safe bet when you look at the big picture of all the problems. I a long term view. Thoughts…be nice I agree with pretty much everybody on this blog.
Regards,
Lane
If you paid a reasonable price and you have no debt real estate in a stable country, and especially arable land in sufficient quantity to feed yourself and family is a good thing.
Check out Zimbabwe, though. Farmers are being killed so that the “revolutionary veterans” can loot the land, then it lays fallow and the nation starves.
I wonder what Obama and McCain have to say about that kind of stuff. It seems like Obama would call those veterans “community organizers”.
“…It seems like Obama would call those veterans “community organizers”.
Bugs: “eh, I don’t think so Doc.”
America: “…fear…Jackie Robinson…he’s a black man who is going to ruin baseball.”
I don’t think you can generalize about real estate being a good investment…
A very good friend has a lot on a lake in North Carolina. Three months ago he was getting ready to sell and counting his riches. He told me how foolish I was not to have bought when he did. Yesterday I spoke to him and he’s afraid he will never be able to sell it. Nothing is moving on the lake.
Go ahead and buy now. It’s your butthole, not mine.
was it one of those lots Erik Estrada was selling on t.v. commercials that he jumped into?
No. It was legit. Lakes were skyrocketing in NC, just like every other place. Now it’s a dead pool. Plus he didn’t sell another house they owned when they moved into their new house. I cringe just thinking about it.
At some point Real estate is a good investment.
When is the question.
Paulson cannot be allowed a blank cheque
By George Soros
“…Mr Paulson’s record does not inspire the confidence necessary to give him discretion over $700bn. His actions last week brought on the crisis that makes rescue necessary. On Monday he allowed Lehman Brothers to fail and refused to make government funds available to save AIG. By Tuesday he had to reverse himself and provide an $85bn loan to AIG on punitive terms. The demise of Lehman disrupted the commercial paper market. A large money market fund “broke the buck” and investment banks that relied on the commercial paper market had difficulty financing their operations. By Thursday a run on money market funds was in full swing and we came as close to a meltdown as at any time since the 1930s. Mr Paulson reversed again and proposed a systemic rescue….”
FT
Soros doesn’t want any competition. He’s used to being able to buy his power without interruption.
I don’t want Soros’s vision of utopia any more than I want Wall Street’s.
Soros wants pot for everyone and guns for no one. I say let him have his ONE vote just like the rest of us, but he’s got so much money he thinks his vision is way more important than ours.
I can just imagine Mr. Palindrome doing bong hits…
I’m in favor of that! It would make it hard for him to loot the country if he can’t muster the drive to get off the sofa—-except of course, to go rummage in the fridge!
Personally I think the world would be a lot better off with no guns and everyone smoking pot.
Note I don’t smoke pot
Soros wants pot for everyone and guns for no one. I say let him have his ONE vote just like the rest of us, but he’s got so much money he thinks his vision is way more important than ours
As opposed to all the other elites who don’t use their wealth to change policy, at least this guy puts his money toward important causes like advancing democracy, open government, and yes legalizing MJ. Most elite just use their money to manipulate the system so they can have more money.
Soros wants pot for everyone and guns for no one.
Gah!
That sounds horrible!
How about pot and ice cream for everyone and guns for no one. Better?
DVDs of Fantasia all around!
You think ice cream, ganja and Disney DVDs can take the place of my personally autographed Richard Cheney Signature Series Italian-crafted Perazzi 28 gauge shotgun**, do you?
Hah! Ah ha hah!
(** Actual gun used by my hero Dick to shoot his friend Harry Whittington in the face. Well, not the Signature Series per se — that came later. But it was a Perazzi 28 gauge handcrafted beauty, you betcha. Shoots like butter.)
I would accept a blank cheque from George Soros, as long as my bank wouldn’t charge a fee if it bounced.
Doesn’t Soros have offshore hedge funds?
Filed under: “I love New York!”
“This doesn’t smell right,” Letterman said. “This is not the way a tested hero behaves. Somebody’s putting something in his Metamucil.”
McCain spokeswoman Nicole Wallace said Thursday that the campaign “felt this wasn’t a night for comedy.”
“We deeply regret offending Mr. Letterman, but our candidate’s priority at this moment is to focus on this crisis,” Wallace said on NBC’s “Today” show.
Letterman called McCain “a true American hero” but told his viewers: “This is not the John McCain I know, by God. It makes me believe something is going haywire with the campaign.”
Instead of suspending a campaign, Letterman said, a presidential candidate should go to Washington to deal with a crisis and let his running mate shoulder the burdens of politicking.
“That’s what you do. You don’t quit. … Or is that really a good thing to do?” Letterman said, a reference to McCain’s running mate, Alaska Gov. Sarah Palin. “What’s the problem? Where is she? Why isn’t she doing that?” he asked.
Letterman unloads on McCain for not showing up:
http://ap.google.com/article/ALeqM5hIbK5ZyWUeEJrqOEcChTTkzHi3JgD93DP7U06
Nice post Hwy….
It wasn’t just that The Mav didn’t show up — it’s also that he canceled his appearance, said he was flyin’ off to Warshington to fix stuff, then scheduled an interview with Katie Couric at CBS in NYC, presumably to bump Palin’s disastrous interview off the airwaves:
McCain told the CBS show that he was immediately flying back to Washington, Letterman told his audience. Then Letterman showed a TV feed of McCain being made-up for an appearance on news anchor Katie Couric’s “CBS Evening News.”
What part of crisis management don’t you understand?
Palin running his campaign? Better to shut it down than that.
New home sales plummet in August, prices tumble- AP
Jobless Claims Pushed to 7-Year High- AP
GE lowers profit guidance, suspends stock buybacks- AP
August durable goods orders down sharply-
Stocks up sharply! I wonder what will happen to the market when we get some bad news????
$700 billion in funny money is never bad news.
There’s an article in today’s WSJ about the CFTC investigating manipulation of the silver market….
The CFTC is made up of people that make an OJ Simpson juror look like Sherlock Holmes.
How are they gonna find a price scam that they more than likely bless? You know the modern global economy is all about cheap (undervalued) commodities/labor and expensive (overvalued) assets.
pssssst…
You over there, thinking of buying 3 months of food to put away.
Grocery Outlet is the store for you.
Groovy products and be sure and check the “good until dates” on canned and bottled goods, but the prices can’t be beat. Excellent deals!
It’s like Trader Joe’s in some ways, and selection of items varies from week to week.
Seems like 3 years is more like it, although I don’t know how you go about actually doing that.
I’m good. I still have my Y2K meltdown cache and my bird flu pandemic supplements.
For those of you that don’t need to eat, just disregard my message…
Remember the Star Trek episode where the whole crew was endangered by the Alien who fed off their emotions? It had to keep them scared and angry to feed itself.
Lemme guess…..Kirk had to find love with some obscure female ensign to starve the thing to death.
Cap’n:
We need de-riskium crystals, otherwise armageddon outta here.
Kirk: “I’m a given er all she’s got, I dunna think she can take any more.”
I still have my Y2K meltdown cache and my bird flu pandemic supplements.
Giggle.
Everybody can fit 3 months of food in their house or apartment, somewhere.
We have about a year’s worth on hand…
Hmmm, I got about 4 days of Ramen, water, and canned veggies. Guess I’ll go to the store this weekend.
But none of this is going to be much good if the electric grid fails, or if I have to fill the gas tank every 10 days.
If you’d like to waste the least, buy yourself a MSR Pocketrocket stove, and a bunch of cans of butane. You could cook for 6 months for an outlay of $150.
Your address please
Man, there’s a whole decade or more supply mooing in the pasture down the road, but I’m a vegetarian.
My wife was shocked toi find out that our grocery was selling dried noodle packets for $0.15 a piece.
Gee, I can’t wait until the next hurricane. ;(
Nah. Just practice cannibalism.
I love the Grotlet! (That’s what we call the Grocery Outlet here in Olympia.) When I find a good item I always buy a ton of it even if I’m not planning for Armageddon that day, because the deals are so good, and because I eat a lot. My metabolism goes like a hummingbird on meth and so does the rest of me, so I shop in case-lot increments, which works well at the Grotlet.
Why, just last month I happened to be there when the tattooed stock-boy put up a sticker advertising a clearance on some cheese, it was 50 cents a pound. Wheeee! I took all there was, 59 wedges of very tasty montery jack and gruyere and bleu.
Good thing I like cheese, huh?
They have the best selection of obscure cheeses, don’t they?
When I was loading up 3 months ago (have 1 year supply) people thought I was out of my mind. No, I just know history.
Got Spam? Good shelf life!
We did our shopping at the G.O. about this time last year for our supply, and made about 6 trips back and forth, buying 10 of this, 20 of that, and so forth, usually a couple of shopping cart fulls, and the checkers quizzed us, where was all this food going?
I asked them to guess. One checker thought I ran a campground, another checker politely asked if I was a Mormon, another asked how many kids we have…
They had a similar reaction to us at Costco. I feel pretty good right now.
Don’t panic. But if you must, panic first!
RE: Got Spam? Good shelf life!
The SPAM contained in the Red Cross packages delivered to Luftwaffe Stalag POW camps during WW II saved thousands of starving American servicemen’s lives.
I am stocking up.
Spam is good. Tuna is good. Do some research online. There are good sites that give you info on the stuff with the best shelf life. That is important, because if there is no food shortages, you need to be able to slowly dwindle the supplies down. Nothing worse than having a lot of expired food.
Yeah, I hear the mercury in large, long lived fish like Tuna stays good forever.
MRE’s on ebay, Mac&cheese (those cheese packets have a half life of plutonium), ramen, rice. Should last until the Govt. issues the little green crackers…
My $.02, go to providentlivingdotorg for a storage calculator that is handy. Also, dry packed pinto beans are really good and last practically forever.
Bob Toll says raising home prices is the only way to rescue the economy.
The U.S. government’s $700 billion plan to buy mortgage assets won’t stem the slide in home prices, Toll Brothers Inc. Chief Executive Officer Robert Toll said.
Additional legislation to stimulate the housing market will be required, said Toll, who runs the largest U.S. luxury homebuilder.
“If you fix housing, I think you’ll start to see the economy go to the healthy side again,” Toll said in an interview on Bloomberg Television today.
http://tinyurl.com/4rhvz8
Bob Toll wants us to rescue HIS economy. The poverty of future homeowners is good for everyone.
Toll Brothers Homes: Guaranteed for five years. Then they fall apart.
(Slogan coined by family friend who used to work for Toll.)
Raising home prices is the only way to rescue Bob Toll, and what is good for Toll is good for America.
THE SHORTS GOT THE LAST LAUGH, TROLL BROS!
Market in hyperdrive today. I knew the PPT just couldn’t let the DJI set below 11,000 during a weekend. Amazing how consistent it’s been the past few weeks. If I were a smart man (I’m not) I’d be making tons of money from this regular action.
Today’s market reminds me of those cartoons where this guys is being held upside down with all his watch, wallet, comb, change and spare bills falling into a pillowcase held by the Democrats.
Funny, that cartoon could apply to eight years of a Republican dominated government.
Under the bailout bill, which will let the government buy huge amounts of toxic mortgage-related assets, “we’re now the biggest mortgage holder in town, and we can do serious foreclosure avoidance,” Frank said.
Good Luck Barney! Maybe people aren’t the morons you politicians take us for.
It’s amazing what comes out of Barney Frank’s mouth…besides from intern’s genitals.
Actually, that was Gerry Studds. I get them confused.
I thought you meant Mark Foley. Or was it Larry Craig?
you don’t miss a one do ya?
Here is the problem. Barney is trying to do something good. His intentions are in the right place. And the people on the other side of the aisle have no room to talk, as they caused a lot of these problems via deregulation.
But this is a bad idea. I just don’t think Barney is a bad person for trying. And remember, if they did nothing, as many of us would like, they would all get blamed for the GD v2.0. So they are stuck between a rock and a hard place.
There are no good options here.
Why would the politicians get blamed for GD II? Just because Paulson and Bernanke said so? It should be pretty clear that the problems were created by Wall Street, and any govt complicity in the mess was due to lax regulations and/or non-enforcement of existing ones, NOT due to inaction on a bailout that, blather and doomsday invoking aside, was never shown to be a guaranteed let alone the sole solution.
Maybe he should have been looking before.
”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
Barney Frank 2003
” The fundamentals of our economy are strong.” –John Mccain Sept. 15, 2008
Whatever wonderful qualities as a leader McCain may possess do not spill over whatever into his grasp of economics.
Hey, was McSame in on this Republican deal?…”New Twit” made a right hand turn…and went a long ways on a “Not a Thought” street.
Contract with America:
The Personal Responsibility Act / The Fiscal Responsibility Act
“…its provisions represented the view of many conservative Republicans on the issues of shrinking the size of government, promoting lower taxes and greater entrepreneurial activity, and both tort reform and welfare reform.
When the Republicans gained a majority of seats in the 104th Congress, the Contract was seen as a triumph for Party leaders such as Minority Whip Newt Gingrich, Tom DeLay, and for the American conservative movement.
Whatever the role of the Contract, Republicans were elected to a majority, and several parts of the Contract were enacted. Some elements did not pass in Congress, were vetoed by President Bill Clinton, who would later sarcastically refer to it as the “Contract on America,”
http://en.wikipedia.org/wiki/Contract_with_America
While watching the hearings, I am even more convinced there is no “crisis” (even though we already knew that).
Paulson was so hesitant to discuss what caused the problem or to reduce executive pay or cram-down mortgages…they just want taxpayer money NOW!!!
If this were a true crisis, there would be no issue with reducing executive pay or allowing judges to cram-down mortgages, etc.
What caused them to panic is that the citizens — for the briefest of moments — had leverage over Wall Street. They did NOT like that.
One gimmer of hope is that there were enough citizens who contacted their legislators to voice their opposition to this theft. Maybe there are fewer sheeple in America today than there were a few years ago. Maybe the prudent are finally waking up to what’s going on and getting riled up.
We need to monitor things very carefully and make sure that anyone who favored this plan is voted out of office.
make sure that anyone who favored this plan is voted out of office What if both candidates were to support it?
We write-in/vote for one of the third-party candidates.
I’m writing in Ron Paul’s name if this plan goes through.
Even though he may have cost Gore, I’ll be voting for Nader this year, since the major parties are now one in the same:
Nader Warns Against Mammoth Bailout
“Over the years, every time Congress acted in haste, it was an unsuccessful boondoggle, from the $3 billion synthetic fuels legislation of 1980 to the 2002 Iraq War Resolution.
“The proposed $700 billion blank check is the Goliath of domestic panic legislation.
“It’s a triple whammy on the American people as taxpayers, consumers and workers.
“Without public hearings, without civil justice safeguards, accountability and Congressional oversight, without comprehensive regulation and shareholder governance, this three-page bill could be the mother of terrible unintended consequences. For example, what if it is the wrong kind of bailout?
http://www.votenader.org/media/2008/09/24/meltdownbailout/
Speaking of democracy (or lack therof), Barbara Boxer has apparently left her phone off the hook, and Nancy Pelosi’s people instantly put you through to voicemail.
(fingers in ears)
la la la la la la la la la la la la la la la can’t hear you…
I got an e-mail this week from Boxer’s office.
It asked me about my “transportation priorities.”
Transportation priorities? This week?
The office staff must be as dumb as the office holder.
I use the same trick on my kids. Look at the shiny keys, not the big needle….
I got that email too. I listed my thoughts on transportation…
…and then at the bottom, a paragraph which ended, “NO BAILOUT. PERIOD.”
Yeah, we’ll see if they listen. My guess is, no. They’ll pass something to put the money thru somehow.
Paul Krugman has some interesting observations on this process so far, especially in the context of previous Bush “emergencies”:
http://krugman.blogs.nytimes.com/
How stupid do they think we are? How often do you solve a problem 30 years in the making in a week?
SEC tells dozens of hedge funds to provide data
Don’t these hedgies know who is in charge over at the Secure Equities Carnival?…Crissy Cox babeeeeeeeeeeeeeeeeeeeee…
“I’m gonna poke ya in the eye Pilgrim… and then I’m gonna…”
“Late last week, the Securities and Exchange Commission said it was expanding its ongoing probe into possible market manipulation in certain financial companies’ securities. The SEC did not name the companies.
But the agency said hedge fund managers, broker-dealers and big investors with significant trading activity in financial firms or positions in credit default swaps would be required to disclose those positions to the SEC and provide certain other information.”
http://www.reuters.com/article/ousiv/idUSTRE48O63020080925
I learned something new today…
“Brokered Deposits”, as in people that are filthy rich that have their lucre spread in $100k increments, all over FDICdom.
As many as 500 different bank accounts for some individuals, and everybody is banking on the implicit guarantee that FDIC Insurance will save their bacon, should push meet shove.
Oink, oink!
Does FDIC cover inflation?
I would like to have the problem of reconciling 500 bank statements of over $100K each month.
That being said… I would hope these people have some of their wealth in other things besides dollars.
Someone remarked now is the time to take to the streets. Here is a link to demonstrations/protests this afternoon in Southern California. It’s from Democrats.com. You can search your own zip codes.
http://truemajority.wiredforchange.com/o/8/t/107/event/search.jsp?distributed_event_KEY=5&postal_code=92649&radius=100
Home Is Where the Nest Egg Is
http://finance.yahoo.com/focus-retirement/article/105832/Home-Is-Where-the-Nest-Egg-Is?mod=retirement-preparation
if i had taken out the equity in my home and squandered it on junk and vacations, this article might bother me a bit.
I went out and found some normal people at the bottom of Yurtles stack of turtles… they know what is going on. I was surprised at all the correct responses. To my suprise, the ones who dont use the net or watch TV, they came across as the smart ones, sounded like the posters on HBB.
This Great Depression will be better than the last one because the Hoovervilles will be made up of McMansion Gated Communities instead of tents and shacks! (See wikipedia for hooverville)
In honor of his dubiousness, they should be called:
Bush Leagues
O.K., HBB trivia quiz:
Name the only US president to have a MBA?
Perchance from Harvard????
Yeah, like I said earlier, I know people with a high school diploma that are better businessmen/women, smarter, and better educated.
No, no, no, it’s “Hahhhvahhhhd.”
SSssssshrub hisself refers to his, uh, academic accomplishments as being awarded a gentleman’s C.
JFK enrolled at Stanford business school after graduating from Harvard. WWII happened, ending his college life.
I hope CONgress can sneak this amendment into the TRAP bill:
item 99: sec.241., provision, 86:
Authorizes Upper Deck Company to produce trading cards with images of America’s most wanted financial terrorists.
http://en.wikipedia.org/wiki/U.S._list_of_most-wanted_Iraqis
Within a week, the blame game will be focused on computers…
Link??
dont try to steel my tinfoil, Ive been callin for that little trump card for over a year!
tinfoiled again, eh?
I agree. I hate commuters. Especially the ones from Jersey and Long Island. White collar trash!
I got a commuted sentence, I work from home.
Oil rises $2 on bailout hopes
“We are going up because we are rescue happy today. I think people are just kind of getting giddy over the bailout again,” said Phil Flynn, analysts at Alaron Trading in Chicago.
http://biz.yahoo.com/rb/080925/business_us_markets_oilbiz.html
it dosent make me feel giddy, it makes me feel sick!
Bookmarked in folder titled: Better Ideas for America
“We are confirming our interest in pursuing CNG within our R&D scope,” said Irv Miller, a group vice president for the U.S. sales unit of Japan’s largest automaker. A drop in natural gas prices, an increase in North American supply estimates and the fuel’s lower pollution levels than gasoline make it attractive, he said.
Toyota to unveil Camry hybrid fueled by compressed natural gas:
http://www.latimes.com/business/la-fi-toyota25-2008sep25,0,7974616.story
You would think with that 5.4 Billion $$$$$$$$$$$$$$$$ that Shrub gave Pakistan…they could buy some GPS units that aren’t made in China.
“Zardari, speaking to reporters in New York with U.S. Secretary of State Condoleezza Rice, said the border area between Pakistan and Afghanistan was often unclear, a comment Rice agreed with, saying “yes, the border is very, very unclear.”
U.S. says Pakistan shot at U.S. copters in Afghanistan:
http://www.reuters.com/article/topNews/idUSTRE48O6FX20080925
http://www.guardian.co.uk/world/2008/feb/27/pakistan.usa
PS, Hey Condi, only 86 days left to nail down that “Eternal Middle East Peace” Agreement, let’s get’er done!
http://www.bloomberg.com/apps/news?pid=20601087&sid=a5UhcbI4jecU&refer=home
I like the intent but this does not target those who caused this mess. They need to pass a retroactive windfall profit tax on earnings made by CEOs and others in the housing and financial industries. It should be punitive, say 50%. Any executive who made over 1 million in sales of company stock over the last 3-5 years should be hit with this tax.
Montrose, Colorado
Sign over a RE shop that advertises a place with owner financing, no payments for a year.
I say we move in and make it the official HBB party house.
Bailout Fallout: How to Cope with the Financial Crisis
http://finance.yahoo.com/expert/article/moneyhappy/110215
lots of angry people commenting on this article.
The way things are looking right now - on the evening of Nov. 4th I think the loser is going to have a bigger celebration party than the winner.
Pretty soon McCain and Obama will start putting out ads smearing *themselves*.
“You know - I’m really not qualified for this. Don’t you want to vote for that other guy?! Seriously - I was just kidding - I really didn’t think it would come this far. I thought it was just a joke someone was playing on me. No no really - please don’t make me president!!! I BEG OF YOU!!! FOR THE LOVE OF GOD PLEASE!!! I’ll defect - I swear. I might even press the big red button - you never know. Did I mention those dreams I’ve had about my mother?”
Let me re-cap what Senator Shelby just said on TV in so many words .
Shelby said leading economist said that the plan won’t work . He doesn’t believe it will work ,but it will be passed regardless . In other words Senator Shelby had a lot of doubts about the whole Bill . Just one
Senators opinion I guess .
But anyway , I just don’t understand why we are making a deal with the devil .If you think beyond a day and you see what the cause and effect will be of this bill ,than its alarming .
My neighbor just told me that the bail out is only going to cost his family 7 thousand dollar and that way he won’t be in the bread lines .
Now this is the way that the Cheerleaders and Bill promoters are selling this bill on the TV to the public ,and this is Main Stream Media news .
How to sell the unsaleable . It reminds me of the Cheerleaders of the Housing Boom who were peddling the rah rah fraud speak that got us in this mess to begin with . I told my neighbor that he was being conned ,but he likes the cheerleaders telling him that everything is going to be OK,and real estate always goes up . Collective madness I tell you .
serious gas shortages in the southeast finally making news. There are places in NC, TN, GA, that have not had gas since the hurricane. People are panicked and shortages are spreading.
Hundreds of cars lined streets this morning as motorists in the Charlotte metro region tried to cope with an ever-worsening gasoline shortage situation.
Some motorists waited up to five hours, and fights were reported as people accused other customers of cutting in line.
Similar problems are being reported in the Fort Mill-Rock Hill area, in Gastonia, and in Union County. Motorists report all the stations in the Weddington-Wesley Chapel area of southwest Union County were without fuel late Wednesday night.
Abandoned vehicles could be seen this morning along the sides of roads across the area — apparently the result of drivers running out of fuel.
http://www.newsobserver.com/news/story/1231716.html
Maximum Overdrive, stalled out.
I asked an old friend if this was really the case. Below is his reply.
“Absolute truth! I waited for 1 hour 10 minutes this morning in line for gas. I passed 10 stations that were out until I found a station with gas. People are fighting each other at gas stations and everything. It is crazy here. We are hurting in a big way here. We’re going to minimum staffing here in the Charlotte office for a few days because it is getting so hard to find gas.”
Ouch! I hope it gets better for them.
Flashes of the gasoline shortages of the 70’s. Fighting and shooting for gasoline.
Yep, I visited 17 stations this past Friday south of Nashville looking for gas! It was kind of surreal, and had me thinking what it would be like if food was that hard to find…
The price of gas will go down in the future. I am in the deflation camp.
RE: Abandoned vehicles could be seen this morning along the sides of roads across the area — apparently the result of drivers running out of fuel.
WARNING to future gaz line cutters…
http://www.youtube.com/watch?v=_TL4XZdyo3g&feature=related
Confirm shortages in southeast. Colleague in Charlotte was whining to me on the phone today, completely unrelated to our conversation. I asked about prices and he said they haven’t budged but a fuel delivery is made in the morning, and the place is out of fuel by afternoon. He said it’s nuts there.
I haven’t visited the blog in months now. Boy, what a difference a few months make! Blood is on the streets now, the bottom in housing is nowhere near in my opinion. The new home sales came out at 460,000 units today. I wait till I see close to 350,000 new houses sold to maybe call it a bottom. It overshot on the way up, so I should undershoot on the way down.
We haven’t yet experienced the tsunami flood of home sales at fire sale prices which is likely to ensue when loan owners finally realize that nothing anybody can do will make their property values increase any time soon. That, IMO, is the point when a bottom will be in sight.
Not least is we have as many Alt-A, Opt-a ,etc coming due in the next year as last. What will those underwater do? It’s not a tsunami,it the tide, and will be rising for the next few years…Keep your waders handy…
Interesting interview with Buffer:
http://www.msnbc.msn.com/id/21134540/vp/26877407#26867473
Bailout protesters plan day of action Thursday
http://biz.yahoo.com/cnnm/080925/092508_bailout_protests.html
Sept. 25 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke moved closer to cutting interest rates, signaling that risks to U.S. growth are greater than policy makers saw them just last week
Sept. 25 (Bloomberg) — California home prices tumbled a record 41 percent in August from a year earlier as foreclosure sales pushed down values in the biggest U.S. state
Bernake keeps bragging about all the money he can print but it still hasn’t done much for Housing yet. So whats next after the 700B doesn’t help? Interest rates at 0 ? It will be the dollar carry trade were banks borrow dollars here from the FED and lend overseas for better returns.
I got it figured to go to zero on Fed rate .
What I’m marveling at now is how all the news programs,
Main Street news ,or otherwise ,have the same talking points in support
of the bill .
A big group of protesters have converged in New York City with signed in protest ,and they were painted as fringe internet nuts .
This reminds me of the Media supporting the cheerleaders for higher prices and debt during the housing boom . This reminds me of the PR
campaign of ‘It’s a Good Time to Buy”.
When I hear that the main purpose of the bill is to free up the ability for people and businesses to get credit , I’m speechless . These people are acting like credit is income or a job . This is really sick ,really sick . Its a really sick society ,far sicker than I ever knew .
Senator Shelby is objecting now on TV ,he is saying that top economists are telling him that the Paulson Plan won’t work and will lead us down a bad path . Senator Shelby is coming through ,I wrote five letters to that guy ,maybe he read one .I knew that guy would try to protect the public .
“What I’m marveling at now is how all the news programs,
Main Street news ,or otherwise ,have the same talking points in support
of the bill .”
That’s a normal part of the WH press release process. Don’t you remember the ’subprime is contained’ message of 2007?
Has anyone at the Fed, the Treasury, the GAO or the Council of Economic Advisors put pencil to paper in order to figure out the implications of a 40 pct drop in California housing prices for the cost of bailing out Wall Street from its subprime gambling debt?
I thought not.
News Flash
Palin has been blessed to be free of witchcraft
http://news.yahoo.com/s/ap/20080925/ap_on_el_pr/palin_witchcraft_blessing;_ylt=Agp5MyajmESSKoMsdpaALcVh24cA
I wonder if she will remove the witchcraft from the market with a similar blessing.
Oh God please banish the witches and sorcery that has threatened our realtors and God fearing CEO’s. Banish the evil press for saying truthful things to our people. Yada yada yada
If McCain drops dead this will inherit the white house.
Where the Buffalo no longer roam…
=========================================
“The U.S Mint said Thursday it was temporarily suspending sales of American Buffalo 24-karat gold one-ounce bullion coins because strong demand depleted its inventory.”
“Demand has exceeded supply for American Buffalo 24-karat gold one-ounce bullion coins, and our inventories have been depleted. We are, therefore, temporarily suspending sales of these coins,” the Mint said in a memorandum to authorized American Buffalo dealers.”
http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=63341&sn=Detail
Anecdote: local coin shop up the street from me just told me that their bullion supply is essentially zero. In addition, they said that any coins that come in the door typically walk back out in the next 15 or 20min.
Wow, that’s a short shelf-life.
If this is true then someone could make a killing buying and selling at a much higher price. Clearly demand for “pick up” gold / silver is very high and the prices are too low (shortage).
Time to protest the bailout
http://truemajority.com/
Found this on rgemonitor.
___________
European banking on borrowed time
Daniel Gross and Stefano Micossi | Sep 24, 2008
The US financial system is being nationalised. The piecemeal approach followed so far had clearly not been working. Hence the US political system is working overtime to reach a bipartisan agreement on a systemic solution. The centrepiece is already known: the US government is going to buy $700bn (€480bn, £380bn) of the so-called “toxic” assets. More measures are certain to follow as the banks will require recapitalisation to the extent that they make losses. As a result, the US government will soon own a large share of the US banking system. If the details are generous enough, this should be sufficient finally to restore orderly market conditions. Can Europe be far behind?The synchronised movements in global markets over the last few weeks have shown that contagion works on the way down and on the way up.
that makes perfect sense.
satan finds what he’s looking for at the RGE….
satan, is the end near?
cus if it is you’re just about out of bidness.
Okay, HBB truth squadders, this one’s for you…
I’m going to be attending Homecoming weekend at the University of Michigan in Ann Arbor. My weekend plans include attending this event:
1 p.m. Friday, October 3rd
Economic Forum
Lorch Hall Auditorium (Room 140)
Top economics professionals, including the former Chief Economist of Fannie Mae, will speak about the current state of the economy and what the future holds.
Any HBB-ers care to join me?
well i just got back from the bank, its a small one with only 4 branches. the teller told me they have had quite a rush of people this month opening accounts with them, most of the business is comming from Wamu customers. it made me feel better about their survival during this shake-out, they do mostly commercial loans so only time will tell.
WAH MOOOOOOOOOO IS GONE
$15 BILL taken out in the last week…….JPMorgan buys azzets
MOOOOOOOOOOOOOOOOOOOOOOOOOO!
How come no one is posting on the CA thread? Wassupwichyouguys?
The plan’s centerpiece still is for the government to buy the toxic, mortgage-based assets of shaky financial institutions in a bid to keep them from going under and setting off a cascade of ruinous events, including wiped-out retirement savings, rising home foreclosures, closed businesses, and lost jobs.
AP
so this hasent been happening all along? why the sence of urgency now? all they are going to do is cause chaos among the sheeple.
WAMU just bought out by JP Morgan . FDIC Takeover but JP Morgan will take over deposits and branches …Government brokered deal . Won’t cause a bank run .
now that is really good information.
LMFAO!!!
be careful,
disengenuiousness.
sometimes I come across, as cross and coarse…..
no offense,
intended.
of course.
its pretty spooky out there….
something wicked this way comes…..
Holy friggin’ crap.
Is it me - or is there some pure plain evil going on right now, on a massive scale?
We have massive, massive consolidation going on in the banking industry, and done is such a way that certain banks that have always had close inside ties with the government are able to pick out the juicy meaty parts of the carcasses while they’re still warm, and leave the rotten fatty parts for the taxpayers to clean up. Incredible. Just incredible.
And never have the cows been slaughtered so willingly. They run from the scary barking dog (the threat of “imminent financial collapse”) right into the slaughterhouse.
JP Morgan must be grinning in his grave.
That is one of the brutal parts of capitalism ,take advantage while a Company is weak . What you don’t know is that JP Morgan tried to buy Washington Mutual at a much higher price earlier in the year and that stupid CEO at WAMU at the time didn’t go for it . Banks waiting for bail outs by taxpayers have influenced Companies in not doing constructive moves I think . That is one of the Moral Hazards of Bail Outs . I also think that all the bail out talk has served to make the Banks must less inclined to do loan modifications that could of been done a long time ago . Why charge somebody 12 % on a stupid toxic adjustable ,if you could write down the interest rate to 6 or 7 % and avoid a foreclosure .
Speculators that lied on their loan application are much harder to work with because their motives were different for buying the home .
I think if there is one thing the banks should do ,is to try to
work with borrowers ,just because its in their best interest to do so . People that are trying to blackmail banks or game the system are the ones that don’t deserve to be helped IMHO .
One of the things that I think people in general resent about these taxpayer bail outs is that this was a loan contract between the bank and the borrower that affected all the people on the block . How dare the lender and the borrower
collude or commit fraud for a perceived gain on cases like that . I would still like some more blame put on borrowers that
were playing the system ,committing fraud ,and gambling .
Fannie and Freddie, which own or guarantee more than 40 percent of the $12 trillion in U.S. home loans, had been raising credit standards and fees since last year to boost revenue and limit losses amid the worst housing slump since the 1930s. Their changes, along with pullbacks in other sources of home financing, made borrowing and refinancing harder or more expensive, contributing to home price declines and more foreclosures.
“Freddie Mac and Fannie Mae, in order to try to build capital, may have raised prices and tightened credit standards beyond what was necessary for sound underwriting,” FHFA Director James Lockhart said earlier in the hearing.
http://www.bloomberg.com/apps/news?pid=20602007&sid=aWLnitHXcc_o&refer=govt_bonds
This will always be the nuclear option against PM holders.
Executive order: By virtue of the authority vested in me by Section 5(B) of The Act of Oct. 6, 1917, as amended by section 2 of the Act of March 9, 1933, in which Congress declared that a serious emergency exists, I as President, do declare that the national emergency still exists;
That the continued private hoarding of gold and silver by subjects of the United States poses a grave threat to the peace, equal justice, and well-being of the United States; and that appropriate measures must be taken immediately to protect the interests of our people.
“Therefore, pursuant to the above authority, I herby proclaim that such gold and silver holdings are prohibited, and that all such coin, bullion or other possessions of gold and silver be tendered within fourteen days to agents of the Government of the United States for compensation at the official price, in the legal tender of the Government. All safe deposit boxes in banks or financial institutions have been sealed, pending action in the due course of the law. All sales or purchases or movements of such gold and silver within the borders of the United States and its territories, and all foreign exchange transactions or movements of such metals across the border are herby prohibited.
“Your possession of these proscribed metals and/or your maintenance
of a safe-deposit box to store them is known to the Government from bank and insurance records. Therefore, be advised that your vault box must remain sealed, and may only be opened in the presence of an agent of The Internal Revenue Service.
“By lawful Order given this day, the President of the United States.”
It makes you think twice about holding them in the USA. When the rats get desperate they will do whatever it takes to save the dollar.
And no matter what they do they will not be able to save the dollar.
IMHO, Yes we can save the dollar.
Even at this late date, there is a way to save the dollar. Just do what Korea did after the 97, 98 debacle. Will Americans line up at the treasury with all their jewelry to be melted down to pay the debt? lol Not very likely, but it happened in Korea.
Realistically, the easiest way to save the dollar is fiscal responsibility. No sane person wants to see the dollar fail.
Trade regulations are counter productive. You cannot have mass firings from Government overnight, but Federal and local governments can stop funding positions over a 3 year period and by reducing expenditures help restore confidence in the US market.
Brazil and Bolivia went from being the pariahs of the world economy to investment grade countries in 10 years. Two reasons 1) fiscal responsibility and 2) resources. These countries went from C- to AA+; it is much easier to keep confidence than to gain confidence.
We have plenty of number 2) resources (resources does not always mean commodities). We have Zero, Zip, Zilch fiscal responsibility.
“Realistically, the easiest way to save the dollar is fiscal responsibility.”
Is that part of the HP-proposed bailout proposal?
No
Nor is there any proposal to prevent or ban them from buying absurd investments.
The best thing in Paulson’s favor is that PIMCO is willing to manage it for free. If the government thinks that it can do as good a job as the number one bond firm in the world, then get rid of the government.
The problem with PIMCO from the governments view is no juicy kickbacks to friends.
So the fund will end up with a half ass conservator and an embarrassment to America. All because a few senators won’t sign unless their buddies get to manage the fund.
Might it be possible to look at alternatives suggested by smart financial commentators, or is it 100 pct certain that the financial world as we know it will spontaneously blow to smithereens if the currently proposed bailout is not immediately adopted?
Isn’t there at least a small (say 1 pct) chance that some other alternative besides the one currently getting rammed down Congresses’ throats might actually work better for the greater good of our country? Or do the really smart guys who somehow completely missed the severity of the crisis until so very recently truly have it all figured out by now?
Understanding as I do the risk of group think, even when extremely bright fellows are meeting behind closed doors, I much prefer an open discussion of how best to proceed unless a true emergency is underway.
September 25, 2008
A $700bn shot at the wrong financial target
As John McCain makes his way to Washington to save the nation, a deal seems to be about to be struck on the $700bn bail-out package proposed by Hank Paulson, the Treasury secretary. Meanwhile, a consensus is forming elsewhere that Mr Paulson and Ben Bernanke, chairman of the Federal Reserve, are taking aim at the wrong side of the balance sheet of the US banking system. George Soros argues in the FT this morning, as Martin Wolf did the previous day, that the $700bn would be more efficiently spent on recapitalising US banks and then letting them get on with their business, rather than attempting to set a new price for the mortgage securities at the heart of the crisis.
What I don’t get about the bailout negotiations: Why can’t the Dems just bargain hard for everything they want, realizing that they only have a few weeks before they get the WH anyway, in case things break down? Surely almost nobody with an Ivy League education really buys into the notion that our resilient economy will spontaneously collapse due to an unanticipated turn of events at this brief instant in the ongoing housing bust? Or more to the point, that the current rescue proposal will offer some kind of magic bullet which was somehow missing from the myriad rescues that have already been attempted?
latest news
Dodd must repair damage of White House meeting
Dodd says White House meeting was a disaster
By Greg Robb
Last update: 6:13 p.m. EDT Sept. 25, 2008
WASHINGTON (MarketWatch) — Sen. Chris Dodd, the top Democrat on the Senate Banking Committee, said Thursday that bipartisan meeting with President Bush at the White House on the mortgage rescue plan was nothing short of a disaster. In an interview on the CNN cable news network, Dodd described a meeting in which Democrats were blindsided by a new core mortgage proposal from House Republicans, with the tacit backing of Republican presidential candidate John McCain.
Surely almost nobody with an Ivy League education really buys into the notion that our resilient economy will spontaneously collapse due to an unanticipated turn of events at this brief instant in the ongoing housing bust? It appears many members of Congress believe this notion.
Nah — this is just good political theater. The important question regarding Congress is what will replace the collapsed F&F as a source of campaign contributions?
How J.P. Morgan’s CEO and his crew are helping the big bank beat the credit crunch.
(Fortune Magazine) — It was the second week of October 2006. William King, then J.P. Morgan’s chief of securitized products, was vacationing in Rwanda, visiting remote coffee plantations he was helping to finance. One evening CEO Jamie Dimon tracked him down to fire a red alert. “Billy, I really want you to watch out for subprime!” Dimon’s voice crackled over King’s hotel phone. “We need to sell a lot of our positions. I’ve seen it before. This stuff could go up in smoke!”
Looks like Jamie from Chase is the only guy who saw what is coming… Anybody have any opionion on Chase or Jamie Dimon?
Alright Vozzie!
Did you get back into DSL and sell today at $5.25? I sold today.
That was my pick of the month.
hoz Im scared.
I have been navigating this thing since last August.
Im up on the money.
I have now decided that if I only lose 30% while the mopes lose 90%, Im gonna be OK.
Im about to hit the sauce, and go to work tomorrow….
phone calls from friends asking my opnion of whats happening, my cousin in Houston, no power, no phone…..trying to work and feed his family.
Im laying off two of the shop men on Monday. Im not happy. But Im a survivor!!!
RIP THE MOTHERFUCKIING BANDAID OFF!!!
Sorry about the layoffs. One yr of major layoffs Portland to Vancouver
Adidas AG April 4, 2008
Columbia Sportswear Co May 20, 2008
Quadrant Homes May 21, 2008
Eastern Oregon University November 1, 2007
Oregon Health & Science University January 18, 2008
URS Corporation August 19, 2008
Columbia Bancorp September 8, 2008
First Independent Bank August 8, 2008
Nationwide Insurance Inc. January 29, 2008
Nationwide Mutual Insurance Co April 25, 2008
Wells Fargo & Company December 13, 2007
TreeHouse Foods Inc. February 14, 2008
FEI Company April 29, 2008
Merix Corporation January 9, 2008
Planar Systems Inc May 1, 2008
Weyerhaeuser Co March 7, 2008
Longview Fibre Company October 12, 2007
Matsuskita Electric Industrial Co., Ltd. February 19, 2008
Nautilus Inc May 17, 2008
Nautilus Inc. October 12, 2007
Shikoku Electronics Corporation of America January 28, 2008
Columbian Publishing Company July 11, 2008
Portland Tribune May 2, 2008
The Columbian February 21, 2008
The Oregonian August 22, 2008
AVI BioPharma Inc June 10, 2008
Metro One Telecommunications Inc March 21, 2008
This past week in California
Activision Blizzard is laying off 38 employees at 100 N. Sepulveda Blvd., Ninth Floor, in El Segundo on Oct. 3 and started laying off 133 employees at 6060 Center Drive, 5th Floor, in Los Angeles on Sept. 13.
Advanced Medical Optics is closing down and laying off 58 employees at 9701 Jeronimo Road in Irvine on Sept. 30.
Allergan Medical is closing down and laying off 59 employees at 48490 Milmont Drive in Fremont on Oct. 10.
AT&T Advanced Solutions Inc. is closing down and laying off 188 employees at 3675 T St. in Sacramento on Oct. 6.
ATK Space Systems is laying off 41 employees at 250 Klug Circle in Corona and 30 employees at 9617 Distribution Ave. in San Diego on Oct. 6.
Bay Meadows Race Course is closing down and laying off 40 employees at 2600 S. Delaware St. in San Mateo on Oct. 12.
Glendale Memorial Hospital and Health Center is laying off 176 employees at 1420 S. Central Ave, in Glendale on Oct. 10.
HSBC Auto Finance and HTS San Diego are closing down and laying off 284 employees at 5855 Copley Drive in San Diego on Oct. 10.
I-5 Social Services Corp. is laying off 188 employees at 4491 W. Shaw Ave., Suite 100, in Fresno and 26 employees at 195 A Smoot St. in Mendota this month.
Jeld-Wen Windows and Doors is closing down and laying off 126 employees at 4547 Frontier Way in Stockton on Oct. 7.
Leggett & Platt is closing down and laying off 69 employees at 13151 Midway Place in Cerritos on Oct. 3.
Lennar Homes LLC is laying off 10 employees at 5251 Office Park Drive in Bakersfield on Oct. 22 and 44 employees at 28460 Avenue Stanford, Suite 200, in Valencia on Oct. 1.
Nextwave Broadband is laying off 67 employees at 12670 High Bluff Drive in San Diego on Sept. 22.
Queen of The Valley Medical Center is laying off 90 employees at 1000 Trancas St. in Napa on Oct. 6.
Sconza Candy Co. is closing down and laying off 80 employees at 919 81st Ave. in Oakland on Oct. 1.
St Joseph’s Medical Center - Comm. Home Care is closing down and laying off 76 employees at 7400 Shoreline Drive, Suite 4, in Stockton on Sept. 30.
Syntax Brillian Corp. is closing down and laying off 86 employees at 20480 Brillian in City of Industry on Sept. 2.
The Modesto Bee is closing down and laying off 155 employees at 1325 H St. in Modesto on Sept. 28.
Take heart, in Cal there are 2.2 unemployed workers applying for every job. Not that dire in hillbilly country.
note to self.
find wealth destruction on hoz long position.
buy and sell..
your returns,
may differ
Im all better now….
crisis abated.
LOL
You did much better than me on WM, I sold at $3.80
I waited 16 hrs later. I have never bought at the bottom or sold at the top. I am always short at the bottom and long at the top. Oh well. But when I am wrong, I have a quick finger for cutting losses.
Bernard Baruch said (I wish to me) “If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he is wrong.”
It’s officially official:
Washington Mutual, the giant lender that came to symbolize the excesses of the mortgage boom, was seized by federal regulators on Thursday night in the largest bank failure in American history.
Is it too late for us to close our checking account? I suppose BB and HP can start the day off tomorrow by blaming this one (and any other subsequent bank failures) on those recalcitrant Democratic Congressmen. If only they had passed HP’s measure last Monday, WaMu would still be with us.
Government Seizes WaMu and Sells Some Assets
By ERIC DASH and ANDREW ROSS SORKIN
Published: September 25, 2008
Washington Mutual, the giant lender that came to symbolize the excesses of the mortgage boom, was seized by federal regulators on Thursday night in the largest bank failure in American history.
http://www.nytimes.com/2008/09/26/business/26wamu.html?em
HP’s and BB’s sounding of the financial crisis alarm has triggered the largest banking failure in the nation’s history. Quick — hand over the $700 bn so they can finish off the rest of the economy!!!
Wall Street Journal, Page A1
SEPTEMBER 26, 2008
WaMu Is Seized, Sold Off to J.P. Morgan,
In Largest Failure in U.S. Banking History
By ROBIN SIDEL, DAVID ENRICH and DAN FITZPATRICK
In what is by far the largest bank failure in U.S. history, federal regulators seized Washington Mutual Inc. and struck a deal to sell the bulk of its operations to J.P. Morgan Chase & Co.
The collapse of the Seattle thrift, which was triggered by a wave of deposit withdrawals, marks a new low point in the country’s financial crisis.
We could have sure used some sober discussion around December 2007! Or back in 2005, when anyone holding sober discussions was pilloried? Look who has egg on their face now!
Wall Street Journal
* HEARD ON THE STREET
* SEPTEMBER 26, 2008
Bailout Only a (Needed) Band-Aid
By DAVID REILLY and PETER EAVIS
Now what?
In less than a week, congressional leaders seem to have reached agreement on the monster $700 billion bank bailout. Dire warnings from U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke — capped off with pressure from President Bush — motivated politicians to act quickly.
But as the scare-mongering gives way to more sober discussions of financial-sector challenges, investors will soon realize that the bailout, even if it succeeds in stopping bank stocks from falling off a cliff, won’t give them much of a long-term boost.
Not even the Paulsons can see eye to eye on the save-capitalism-from-itself bailout proposal…
Wall Street Journal
* OPINION
* SEPTEMBER 26, 2008
The Public Deserves a Better Deal
By JOHN PAULSON
The Treasury plan to buy illiquid financial assets has been widely criticized as being unfair to taxpayers, who will have to bear losses ahead of shareholders of the institutions that will be bailed out.
There is a better alternative to stabilize the markets: Invest the $700 billion of taxpayer money in senior preferred stock of the troubled financial institutions that pose systemic risks. Let’s call this the “Preferred plan.” In fact, it is the Fannie Mae and Freddie Mac model — which the Treasury Department has already endorsed and used in practice. It is also the approach Warren Buffett used for his investment in Goldman Sachs.
…
Under the Treasury plan the taxpayer pays the price. Under a Preferred plan, the shareholders of the firms who created the problems bear the first loss. Who do you think should pay?
Before committing $700 billion of our money, we should encourage Congress to take a few extra days to get this legislation right.
Mr. Paulson is president and portfolio manager of Paulson & Co. Inc., a New York-based investment management firm.
I am starting to think the whole banking system could use a restart. How about if once Bernanke gets down from his bully pulpit, puts down his megaphone and stops trying to scare the crap out of everyone, we start off by asking the Fed for a full explanation of how this collapse occurred on their watch.
Actually, I’m surprised we haven’t had a scapegoat yet. All that public wrath needs to be channeled somewhere…
Financial Times
M Stanley suffers cash flight
By James Mackintosh in London
Published: September 25 2008 23:15 | Last updated: September 25 2008 23:15
Morgan Stanley lost close to a third of assets in its prime brokerage last week, amounting to hundreds of billions of dollars, as hedge funds fled after the collapse of Lehman Brothers and moved to rival banks.
The losses, confirmed by several people familiar with the business, will deal a big blow to Morgan Stanley as its prime brokerage is one of its most profitable and successful businesses.
September 26, 2008 1:34 A.M.ET
BULLETIN
U.S. bailout plan bogs down
Contentious White House meeting sets back financial-sector rescue
Bush’s unity meeting fails. Democrats say House Republicans blindsided them with new proposals designed to help John McCain’s presidential campaign. Negotiations to resume Friday.
Remember who was around when the S&L debacle happened?
The Bushes (Neil who got busted and daddy who was president) and McCain (Keating Five).
Coincidence? Yer damned right it isn’t!
Dow up about 118 points at close . I’m telling you that I think the
Politicians should just stay in the meetings for about 3 weeks .