Bits Bucket For October 18, 2008
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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“I have learned that In quiet places, reason abounds, that in quiet people there is vision and purpose, that many things are revealed to the humble that are hidden from the great.”
Adlai E. Stevenson, Jr.
“I have learned that In quiet places, reason abounds, that in quiet people there is vision and purpose, that many things are revealed to the humble that are hidden from the great.”
How nice to start the day with a quote about our terrific 2 presidential candidates.
I took his quote as more pertaining to us here on Ben’s blog and other blogs, that with nary a sound, have made a mockery of the ability of the mainstream media, in being able to perform their jobs and report the news.
There has been a terrific thing going on here. But Lad, like the old saw of the tree in the forest, until the MSM reports it, is it news? And will it puncture the %$#@! NYC housing bubble, finally?
Capitulation takes time.
Don’t worry at this point the cake has been baked badly, eaten, digested, finished causing diarrhoea, and excreted in drippy smelly liquid brown form all over the globe.
You’re just waiting for the “doctor’s diagnosis” but why?
i like ike.
“Democracy: The worship of jackals by jackasses.”
H. L. Mencken
Speaking of Ike:
“Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt (you possibly know his background), a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid.”
President Dwight D. Eisenhower, l952—–
In the 1950s, he may have been right.
These days, not so much… You DO know who gets the lion’s share of farm subsidy money, yes? Free hint: it ain’t the family farm… And how many dirt farmers around the world die because of western nations’ subsidies and tariffs?
Every gun that is made, every warship launched, every rocket fired, signifies in the final sense a theft from those who hunger and are not fed, those who are cold and are not clothed.
In most communities it is illegal to cry “fire” in a crowded assembly. Should it not be considered serious international misconduct to manufacture a general war scare in an effort to achieve local political aims?
In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.
All President Eisenhower quotes…
What has happened to the Republican party in the last half century? If they still spoke like President Eisenhower and were fiscally prudent like him… They might actually be worth voting for.
The top quote I have on the post is in President Eisenhower’s burial rotunda area. I visited the Eisenhower presidential library this year. It is a very humble “campus”, I’d recommend it if you are passing through. The campus has an understated beauty to it.
Watch Adlai’s heir apparent…
http://www.youtube.com/watch?v=v5SWQJWm6Tg
How does a dead guy have an heir apparent?
Adlai was perhaps the most intelligent man to run for president in modern times, and Barack is cut from the same cloth.
Who the hell is the old, doddering, nose-wiping, distracting worthless fool behind the candidates? The set designer should be shot! Great stuff somewhat spoiled by the overprivileged, this time not the Republicans.
The local paper is now printing “Home loans still strong” and money available articles…now twice a week…
http://www.madison.com/wsj/home/biz/310073
Standards remain “about the same” except you have to have a job, a downpayment and good credit. Oh, and expect interest rates to be a “bit” higher.
Meanwhile, more jobs in Janesville are lost as a supplier to GM also closes its doors.
http://www.madison.com/wsj/home/biz/310031
A factory in Lake Mills closes, too.
http://www.madison.com/wsj/home/biz/310059
San Francisco Votes To Give Dubya Dubious Honor
SAN FRANCISCO (CBS) ― President Bush still has three more months on the job, but there is already talk of an important building in San Francisco bearing his name.
Construction on the George W. Bush Presidential Library at Southern Methodist University in Dallas, Texas, will begin next year, but if Proposition R is passed on Nov. 4, that won’t be the only the landmark named in honor of our embattled president.
San Francisco’s Oceanside Water Pollution Control Plant may soon become the George W. Bush Sewage Plant.
Think it’s silly? The measure’s organizer, Brian McConnell, who came up with the idea over drinks, seems to agree.
“Most people think it’s a really silly idea anyway, and then the Bush haters don’t want anything named after him,” McConnell told the San Francisco Chronicle.
So far, not a dime has been raised in support or opposition of the proposition, but members of the local Republican Party are working to defeat the measure, and 12,000 people signed a petition to secure its spot on the ballot.
I’d suggest that renaming it is inappropriate because, unlike its proposed namesake, it both protects the environment and preserves property values (of local beachfront property).
On the other hand, it’s roughly as appropriate as renaming an airport after Reagan.
I think they should rename it after G.W. Then he should come dedicate it. In the speech he should say, you needed this Water Pollution Control Plant because of a the SH-IT you people spew out of your orifices. (That goes for G.W. also).
Wonder if/when we will ever have another central bank crusher? The Federal Reserve needs to be abolished in the worst way.
Andrew Jackson and the Central Bank…
President Andrew Jackson of Tennessee was the 7th President of the United States. Jackson’s efforts to shut down the central bank were believed to have resulted in an attempt on his life. After he recovered from the assassination attempt, Jackson redoubled his efforts to shut down the central bank and was successful.
From Wikipedia:
The Second Bank of the United States was authorized for a twenty year period during James Madison’s tenure in 1816. As President, Jackson worked to rescind the bank’s federal charter. In Jackson’s veto message the bank needed to be abolished because:
# It concentrated the nation’s financial strength in a single institution.
# It exposed the government to control by foreign interests.
# It served mainly to make the rich richer.
# It exercised too much control over members of Congress.
# It favored northeastern states over southern and western states.
Following Jefferson, Jackson supported an “agricultural republic” and felt the Bank improved the fortunes of an “elite circle” of commercial and industrial entrepreneurs at the expense of farmers and laborers. After a titanic struggle, Jackson succeeded in destroying the Bank by vetoing its 1832 re-charter by Congress and by withdrawing U.S. funds in 1833.
# It favored northeastern states over southern and western states.
Wife’s family from MI is livid over bailout. Their take, Michigan has been in a depression for 10 years, and are forced to beg for help. Wall Street gets in trouble and it takes 3 days to get a trillion dollars. Between the savings and loan crisis, internet bubble and credit crisis, Wall Street firms aren’t doing much better than Ford and GM. At least they make cars in Michigan, rather than generating fees.
While I don’t 100% agree, I think they’ve got some good points.
Michigan used to have some pull in national politics. That has pretty much disappeared and migrated south and west along with all the folks that have left here as well.
I have been saying this for months and months. Why do any senators or congress-dopes, from the interior of the country, vote for any of these bailouts? Why don’t their constituencies string them up from the nearest light pole?
Talk about “trickle down economics”. Give the money to Wall Street and Greenwich, Connecticut and hope the some of it finds its way to Des Moines, Iowa, Lincoln, Nebraska or Alexandria, MN. That is insane. Let the Hamptons eat caviar while everybody else eats sh*t. Suicidal!
Not support the President in this time of Crisis??? You must be one them pinko commies!!! Remember, you are either with us or against us.
The Dems in Michigan have never supported the Prez to begin with. But they do support their elitist friends, just like the GOP. You know, birds of a feather.
Sadly, much of the “Main Street” constituency wants a bail out, too! Except they want their bad house-purchase decisions bailed out. This, IMHO is just a less efficient way of bailing out banks.
I wouldn’t bail out either of them.
Don’t you know that if you don’t re-elect the GOP at every opportunity, the country will be taken over by communist-loving black feminist gays who hate families and free-enterprise, but love taxes and terrorists?
C’mon man, where have you been the last 30 years?
Michigan will be fine in the end. The western part of the state is an excellent area for agriculture, especially fruits. And the entire state falls within the Great Lakes watershed, which means the entire state is eligible to draw water from the Great Lakes. This will be an incredibly valuable advantage in 20 or 30 years. As the cost of transporting food increases, it will surely take some of California’s market share.
Right now it’s got too many people and a focus on manufacturing. That will change.
But Brian, what are people going to do over there to support themselves??? Everybody can’t own a farm.
Don’t get me wrong, as far as a place to live, there isn’t a place on the planet I’d prefer than west Michigan, at least in late spring/summer/early fall.
My friends/family regularly suggest I move back there, whereupon I always reply “and to support myself adequately, do…….WHAT??” They don’t have an answer.
I live in Grand Rapids and a big part of the future here is the medical field. There are more new institutes and centers going up than I can keep track of. MSU is moving their medical school here. Those who can benefit from the Medical Mile will do well.
I agree that Michigan will do well in the long run (20-30 years). Water is going to become a huge issue in the coming years and we have a large amount of it to access.
Re: growing… There are so many new orchards being planted/replanted in the Fruit Ridge area. The growers plan on sticking around which is good to see.
It is unfortunate that Michigan is getting such a bad rap, but it helps keep the population down. I truly think West Michigan and Grand Rapids are some of the best kept secrets around, especially if you want to live in a conservative area. Liberals probably wouldn’t like it much around here.
30 million Californians will have to move, if we get an iffy snowpack in the High Sierra this winter, as in no water.
It would be something like a reverse-Grapes of Wrath, with the later-day Joads heading out in their jalopy to Michigan, to pick fruit in orchards and live in tents.
1832: President Andrew Jackson (the 7th President of the United States from 1829 to 1837), runs the campaign for his second term in office under the slogan, “Jackson And No Bank!” This is in reference to his plan to take the control of the American money system to benefit the American people, not for the profiteering of the Rothschilds.
1833: President Andrew Jackson starts removing the government’s deposits from the Rothschild controlled, Second Bank of the United States and instead deposits them into banks directed by democratic bankers.
This causes the Rothschilds to panic and so they do what they do best, contract the money supply causing a depression. President Jackson knows what they are up to and later states,
“You are a den of thieves vipers, and I intend to rout you out, and by the Eternal God, I will rout you out.”
1835: On January 30, an assassin tries to shoot President Jackson, but miraculously both of the assassin’s pistols misfired. President Jackson would later claim that he knew the Rothschilds were responsible for that attempted assassination. He is not the only one, the assassin, Richard Lawrence, who was found not guilty by reason of insanity, later bragged that powerful people in Europe had hired him and promised to protect him if he were caught.
1836: Following his years of fighting against the Rothschilds and their central bank in America, President Andrew Jackson finally succeeds in throwing the Rothschilds central bank out of America, when the bank’s charter is not renewed. It would not be until 1913 that the Rothschilds would be able to set up their third central bank in America, the Federal Reserve, and to ensure no mistakes are made, this time they will put one of their own bloodline, Jacob Schiff, in charge of the project.
1845: The Great American Patriot, Andrew Jackson (7th President of the United States) dies.
Before his death he is asked what he regarded his as greatest achievement. He replies without hesitation,
“I Killed The Bank,”
This is in reference to the fact he banished the Rothschilds Second Bank of the United States in 1836.
ummmm….your history, as you well know, is more than a bit skewed. Even the Wikipedia is more subtle in its bias than you are.
It was a nice cut and paste job, no? I never claimed it to be “my” version of history… I was just posting some info I ran across awhile ago. Take from it what you want, this blog is a place to provide alternative views of everything. But since you are offended by it, why don’t you enlighten me? I’d be glad to read it- just don’t expect a biased response.
Because they were evil, or because they affronted his vanity? So perhaps his ego killed the bank.
Lad, that goes well with my new autism.
Screaming inside but nothing comes out.
That’s called constipation I think.
LOLOL !!!!!!!
They think housing has been hammered thus far, wait until we get into high gear. It’s only been hit with a tack hammer, the 18lb. sledge is just around the corner!
Fallout from financial crisis hammers housing
Saturday October 18, 7:36 am ET
By Martin Crutsinger, AP Economics Writer
Financial crisis takes toll on battered housing market; Wall St. ends week with relative calm
WASHINGTON (AP) — The nation is on track to build fewer homes this year than at any time since the end of World War II, adding to the woes of an economy that analysts said Friday has almost certainly entered a recession.
http://biz.yahoo.com/ap/081018/financial_meltdown.html?.v=4
Why do we need ANY more houses built for a good while? Crazy!
It is a beautiful day here in Bradenton, Fl. I am going to visit my grand kids and forget about this stuff for a bit.
Great day in Palm Beach, FL as well.. Heading to the beach!
Heading to the beach…….what a concept (it’s 45 here).
We don’t need more housing starts.
We have something like 40+ years of extra housing if we assume normal population growth. (18.4 million empty units, 400,000+ population growth annually)
We don’t need any more houses. Seriously.
Not to worry, few houses built the last few years will last 40+ years.
Plus there are the abandonded house strippers…
We need more family formation!
The world is too crowded. Instead we need more technological progress in biochemical research and youth extension (more than just life extension).
Dude — Stop talking common sense. We need the residential construction industry to get back on its feet in order to turn around the economy!
Sorry, I forgot my happy pills this morning.
I’ll pop some now.
Oooooooooooh, look a butterfly.
If BO told me today that he would crush the 6% commission for realtors, I would consider becoming a comrade. Fair is fair.
You would think promising to regulate the R-E brokerage industry out of business would get a lot of votes! Nobody likes them.
However if you look at the statistics, there are a HUGE number of R-E agents. Every bored housewife has a real estate license. Think “Carmella Soprano”
FIRST CLASS INTO THE TUMBRILS after the revolution!
The nation is on track to build fewer homes this year than at any time since the end of World War II, adding to the woes of an economy
That’s completely backwards of course, the last thing the country needs is more housing. It’s overinvestment in housing that is responsible for the “woes of the economy”.
I suspect we’re in “high gear” already, and we just don’t know it. The stock market crash has wiped out a lot of money and signaled that, yes, the housing bubble really IS dragging the entire economy down with it. But since it takes so damn long for real estate sales statistics to come out, we won’t get any confirmation for, what, a month and a half?
One group is talking, though, and unlike the NAR they’re not spinning up “seasonally adjusted” numbers. Redfin, an online discount real estate brokerage, recently laid off 20% of their staff after activity dropped 30 freakin’ percent this month. And they were one of the few real estate portals that had actually seen their business go *up* in the recent downturn. If they suddenly lost a third of their business after the stock market crash, I suspect everyone else did even worse.
My armchair prediction (based on the above and keeping an eye on real estate in my own area) is that by the beginning of December we’re going to get some amazingly bad housing statistics.
“Foreign aid - a transfer from poor people in rich countries to rich people in poor countries.” ~Doug Casey
There aren’t a lot of house listings here in backwater NY, but I finally see several several offerings that are listed 30% below appraisal. One that looks quite interesting to me, 15 acres, 2000sqft ranch, clean, thermopane,fancy wood cooking range, garden, barn, off a well maintained raod for $100K, and the realator used the words “motivated seller” in the listing. It seems that the tentacles of reality are getting a foothold in “it’s different here” land. This spring should be interesting.
Hear anything about the Albany/Sarasota area?
No, but aren’t they supposed to build a huge FAB up there, with Gulf monies, that will employ lots of techies?
You mean Albany/saratoga. The “huge” fab will employ a whopping 1300 people. A drop in the bucket when laid up against the 200,000+ high paying manufacturing jobs lost over the last 30 years. Also, I will remain very skeptical that this place will ever get built.
Regarding that listing BleuSky, before the jumping up and down/handclapping begins, take a look at what that place, or it’s equivalent sold for, prebubble and I believe you’ll find that price still 2x what the inflation adjusted price ought to be. And my fellow New Englanders and Northeasters, we need to remind ourselves and the koolade drinkers that the crushing property taxes (and the flee from taxes) will always keep a lid on prices here.
I can’t believe there hasn’t been a tax revolt given some of those property taxes. $1000 per month or more for taxes alone!? That’s insane.
Kodak moment, came and went.
Don’t worry Exeter, I’m not loosing it. It just pleases me to see the beginnings. I do realize that even if I wait and buy at 1980 prices, I’ve still got that state rent to consider for a lifetime.
I’m getting used to the unconventional lifestyle. I may not be fit to own a brick and stick house again by the time they are priced right!
NY is doomed, why add jobs or industry in such a tax-unfriendly and expensive (lotsa baksheesh and red tape, expensive utilities and labor, etc) state when you have states with friendlier tax policies, better weather, and right-to-work?
NY has to continuously offer tax breaks and other goodies to entice business to grow or even stay, where are the tax breaks for citizens to stay?
And NYC just isn’t gonna be subsidizing upstate with those big hedge fund/IB bonus taxes anymore, so it’s gonna suck.. And I shudder to think what’s gonna happen with my folks’ NY state pensions, what that will do as far as driving property/income/sales tax even higher…
That seems VERY inexpensive. How much are the property taxes? That’s a good sized house, and a large parcel.
BB… You’re making the same mistake tens of thousands of others made with that line of logic. The dirt has zero utility value, will cost you additional $$$ in addition to the basic shelter costs. Add to that, no reasonable means of employment unless slaving away for $10/hr is acceptable to you.
Hmmm, you mean the land would not be suitable for a tree farm? Greenhouses? Is it steeply sloped, terrible soil, what gives?
After the Revolutionary War, congress paid off the soldiers with land grants here. Many came to farm the land of the Seneca. They were naive.
A tree farm? greenhouses? Oh my word.
“A tree farm? greenhouses? Oh my word.”
Exeter-
Instead of ridicule, why not answer the question? Is it that you don’t have the answer? I’m just trying to understand why there is “zero” value in the land.
Taxes would be about $4K. That is about what I pay in rent for a house on 400 acres, with barn. May sound reasonable to you, but there are probably jobs where you live. Less than a decade ago, I bought a 4000sqft Victorian mansion here in this same town for $100K. The previous owner had paid $60K four years earlier. The guy that bought from me paid $85.
I do think the state will have to raise taxes as house prices fall. They sure aren’t going to get many windfalls from Wall Street.
Holy, WOW! Those are sweeeeet prices. Perfect for a home-based business. What town are you renting in?
Might as well be Oil City PA
You pay less than $350 per month for a house and barn on 400 acres? I am in the WRONG place.
You are not the incarnation of byefl are you?
Bantering,
These people need to spend some time here. I don’t think you could find cheaper property in, say, Ritzville, WA or Burns, OR and that’s saying something.
No, Blue Skye, I’m not the incarnation of byefl. Honestly, I’m not thinking of moving into your neck of the woods, so don’t worry. I just find it unbelievable that such large properties on vast acreage could be so cheap to rent. WA state is just outrageously expensive, especially where acreage is concerned. I just found that U-haul rates are double the price from WA to OR, than vice versa. People are leaving this overpriced place.
Yes, my uncle left there a few years ago when the forest got paved over east of Seattle.
If you take out the speculative factor, property value reflects the opportunity to earn a living, which here has been nil for quite a while.
I think that sounds great. $100K for that much land and house. I don’t know how high NY taxes are, but I would love to pay that little for that much.
Some things just cannot be “fixed”. Let’s say it altogether, “There is no bottom.”
There can be no bottom until the true believers in easy fixes collectively throw in the towel.
Don’t rush things, kurt…
I would argue that when the collective wisdom becomes “There is no bottom” is precisely when we will be _at_ the bottom.
NY Times’ Nocera on how to keep underwater homeowners in their homes without moral hazard and keep home prices from falling under its economic value (replacement value?):
http://www.nytimes.com/2008/10/18/business/18nocera.html?pagewanted=2&ref=business
“But recently a proposal came across my desk that I believe is so smart, and so sensible, that I hope our nation’s policy makers will give it a serious look. It comes from Daniel Alpert, a founding partner of Westwood Capital, a small investment bank. I have quoted Mr. Alpert frequently in recent columns, because he has been both thoughtful and prescient on the subject of the financial crisis.
Here’s his idea: Pass a law that encourages homeowners with impaired mortgages to forfeit the deed to their lenders but allows them to stay in the homes for five years, paying prevailing market rent. Under the law Mr. Alpert envisions, the lender would be forced to accept the deed, and the rent. After five years, the homeowner-turned-renter would have the right to buy the home back, at fair market value, from the lender.
There are so many things I like about this idea that I hardly know where to begin. Let’s start with the fact that it doesn’t require a large infusion of taxpayers’ money. Indeed, it doesn’t require any government money at all. It also doesn’t let either homeowners or lenders off the hook, as many other plans would. The homeowner loses the deed to his home, which will be painful. The lending institution, in accepting prevailing market rent, will get maybe 60 or 70 percent of what it would have gotten from a healthy mortgage-payer. (Rents are considerably lower than mortgage payments right now.) That will be painful too. Moral hazard will not be an issue.”
“Under the law Mr. Alpert envisions, the lender would be forced to accept the deed, and the rent”.
“Forced” Yep, that word right there blows the whole STUPID plan right out of the water!
“Under the law Mr. Alpert envisions, the lender would be forced to accept the deed, and the rent.”
Bye, bye free market capitalism. Change the rules of the game in the middle of the game and you forever change the game.
This just means that housing would bottom even lower than you expect, and credit will shrink even further.
Have you been paying attention?
They’re changing the damn rules so fast it’s impossible to keep track.. At least this idea changes the rules in favor of the taxpayer, instead of in favor of raping the taxpayer with a rusty flagpole.
And what happens when CDS paper is rendered null & void as an ‘emergency’ measure?
Something less worse than what happens if it isn’t.
What a mess this would create. What happens when the bank holds the deed and the now renter decides not to pay rent until evicted? What happens when the renter sublets the house to three families and collects a profit while the property gets trashed? How are you going to enforce upkeep on the property? Who is going to pay for all the repairs on the forced heating, air conditioning, etc? People move at the drop of a hat as renters, now the bank has to go in and rehab the house to put it on the market; the only thing this accomplishes is drawing out the decline over an extended period of time. Ghettoes will be born.
What happens if the person doesn’t want to stay? What if the home is in a massive 400 home development that has become a barren wasteland? Will the government force them to stay for 5 years?
Who’s going to do the maintenance and repair? That’s expensive stuff. What if at the end of 5 years home prices are still in the gutter, then we’re right back where we started.
What about the liability a landlord takes on? Insurance costs, legal ranglings, etc.
We have a solution already, take the losses and lower the home prices. It’s ugly, but at least we can be more confident that this will put us on a path to recovery that lets the market do its thing, not all sorts of convoluted programs.
You just saved me mucho time typing. I was thinking the same things, verbatim.
… although I’d add one thing. Let’s give a foreclosed home away FREE to every soldier coming back from this stoopid war. Let’s give them to past vets as well. There sure is not a short supply! I disagree with war, hate it actually… but these guys and gals are truly heroes, gov’t not so much… Don’t forget the vets.
“There are so many things I like about this idea that I hardly know where to begin.”
Let’s begin with your acceptance of The 2008 Douche Bag of the Year Award. That is a start.
The funny thing about this plan is that it is roughly equivalent in effect to having NO plan, but also adds moral hazard and impacts future lending.
With no plan, those homedebtors will walk away, pay “market rent” on a different home for 5 yrs, and then buy a different home at “market rate”. So the same net effect occurs, only they have to move, probably twice.
With this plan, lending and rates will be increased, perhaps forever, because lenders will forever have to worry about having this type of cramdown occur in a downturn.
Not to mention, this plan with never fly with the PTB, since it further decapitalizes the banks that are already in trouble.
I also don’t see how “losing the deed to his home” will be painful if the FB knows he can buy it back for a lower price. This smells a lot like an FB-handout plan.
Wait until their neighbors find out how far those “prevailing rents” are lower than their house payments… especially without those saved people in the rental market.
Little realtor sign burnings and hate scrawls popping up everywhere.
“What is this “FB” those hooligans keep painting on our mansion door, darling?
A little tip to whomever of McCain or Obama wins next month’s election:
If you want to provide long term economic stimulus to the nation’s economy, then severe all political ties with the large national homebuilders, and help return the residential construction industry to a local-based model. There is no reason that locally-based home builders cannot provide political campaign contributions, and now that the Wall Street investment banking sugar daddies are out of the game, local builders who provide real wealth may be a better bet.
The era of a homebuilding industry dominated by a national level, politically connected oligopoly has been an utter disaster from the standpoint of throwing away our collective national wealth, as anyone who has driven through large scale tract home developments in the desert southwest, or taken a virtual tour thereof through the HBB photo gallery, can attest. The bloated Wall Street funded megabuilders have left in their wake a glut of ugly, oversized, rapidly devaluing, cookie-cutter, stucco box homes. Consumers who don’t want to own and maintain a falling knife McMansion are left with little alternative to renting.
Conclusion: ALL REAL ESTATE CONSTRUCTION SHOULD BE LOCAL!
This is a very wise statement. Perhaps all of the massive, ailing developments which I have laid eyes upon were the work of national builders and developers backed by Wall St. Sure, they did sell some lots off to local builders, but it was the heavily funded developers who bought, cleared, and subdivided the thousands of acres to start. It was a sickening waste of natural resources, and led to a blight which will take generations to remedy, if even possible.
Consumers really get the shaft, too, when huge tract home developments with near-identical McMansions spring up all over creation. There are very few attractive choices priced below $1m among homes built over the past decade in the San Diego area.
‘…it was the heavily funded developers who bought, cleared, and subdivided the thousands of acres to start. It was a sickening waste of natural resources, and led to a blight which will take generations to remedy, if even possible.’
So true, bear. So unfortunate. It’s difficult to think of what this greed-fest has wasted.
Sad face time for me.
Oly-
It’s quite sickening what they’ve done here in western WA. The place is hardly recognizable from when I was a child. The lions share of the ugliness occurred over the past half dozen years or so-but I know I’m preaching to the choir. What’s really sad, is that I still see the surveyors out in full force. I almost want to open the car window and scream, “the party’s OVER, IDIOTS!” But they’re just hard working guys, doing their job. These developer will never say die until they, well, DIE.
PS- What’s the name of that little store down in Boston Harbor that sells fresh salmon, etc.? Just wondering what the hours are. Was thinking of taking the pup for a jaunt in Olympia, then buying some fish after.
A geology degree is an awesome thing. It teaches perspective - as in 4 billion years of it. Even the best built houses are only here for a blink of an eye.
The earth will recover and probably be as though we’d never been someday. My only sadness is that I will probably not see the version without the houses.
The Great Greenspan Unraveling — After an extremely long period of easy credit that culminated with the Internet and Housing Bubbles (15 years of high to low then ridiculous interest rates and lending policies), the Dow settles around 5K, S&P index settles around 500, and NASDAQ around 1000. What do you think? Is my tinfoil hat wrapped too tight?
I’d argue that the S&P settles around 600 or so but these days, what’s 20% between friends, eh?
(Just having trouble making the earnings multiple numbers come out as low as 500 in a quick back-of-the-envelope. Possible though.)
It’s becoming increasingly difficult for me to accept this is the bottom. Even if it is the bottom, it’s not temporary. When was the last time we’ve seen events unfold like they are today?
If you look right here in the US, F&F, Lehman, and Bear’s failures were unthinkable. Us government injecting capital into banks despite public outcry, also unthinkable. Home prices falling, unthinkable. Worldwide global rate cuts without result, unthinkable. Interbank lending and CP market freezing, unthinkable.
If you look abroad, Ireland, Spain, Iceland, Hungary, GB, Switzerland — all unthinkable. What happens to smaller debt laden commodity dependent nations? You guessed it, unthinkable 6 months ago.
Which part of your prediction strikes you as too dire? The investment community has not yet left the state of shock over the collapse of the investment banking sector followed by an effective government takeover of the banking sector — not exactly a stellar harbinger of future economic performance. We have already seen some of the largest stock price declines in Wall Street history over the past month or so, and it may be a long way down from here.
Ummmm, market panic smells like … opportunity.
Only if you can hedge.
With them changing the shorting rules whenever they want, basis risk is so severe that you better ask for heavy premiums.
At the prices I intend to pay basic risk will be close to zero.
OK, fair enough but we’re not there yet then.
Are we there yet; are we there yet; are we there yet?
“Ok, fair enough but we’re not there yet then.”
Agree, but we’re getting there. Stay tuned until this time next year.
“…you better ask for heavy premiums.”
Do heavy premiums translate into lower stock prices, or am I oversimplifying?
Usually (because extreme volatility = lower prices) but not theoretically.
You are charging higher because of uncertainty but that uncertainty is generally related to crashes.
I thought I heard Ford bonds were paying 35% …but too big to fail?
The cash cow is dead. We’ve got to save. After Tech there was a catalyst for growth — housing. We refinanced mortgages and built more homes than needed to keep the economy growing. With so many increasingly upside down homeowners there is no opportunity to cash out and spend.
What’s more, a lot of the excess homes created phantom demand in the retail sector. We now have too many car dealerships, too many furniture stores, too many strip malls etc. etc to go along with all the houses we don’t need. Already, there is talk about consolidation (GM and Chrysler) and bankruptcies (Mervyn’s, LnT, and so on).
“What’s more, a lot of the excess homes created phantom demand in the retail sector. We now have too many car dealerships, too many furniture stores, too many strip malls etc. etc to go along with all the houses we don’t need. Already, there is talk about consolidation (GM and Chrysler) and bankruptcies (Mervyn’s, LnT, and so on).”
Spot on…retail’s going down the tubes.
People are cutting back on shopping BIG TIME. They’re scared but not as nearly scared as they will be. IMO the fear factor is still being diluted through lingering denial. But I suspect that’ll change dramatically.
We’ve talked for years about the Psychology of bubbles, i.e. “irrational exhuberance up, fear on the way down” etc.
In respect to gold, however, moreso than any other commodity and/or investment–I think it’s big upswing price driver will be FEAR and ANXIETY, both of which are just starting to get legs IMO. When the DENIAL is gone, and the hopeful honeymoon mentality of the election fade, capitulation will hit Joe and Jane 6pack like a hammer blow to the head.
While I feel it imprudent to go nuts on gold, I think about folks with big money. Were they advised to allocate 10% into gold, if not, how much? If their portfolios are worth millions, then 10% is a s**t load of gold, whether it be physical or paper. This is interesting (proportional allocation-wise) in respect to the cogent pro and anti gold arguments on this blog.
When the RE bubble was forming, the overall indicators and info. I read here and on Patrick’s blog told me there was something very wrong, and to stay the hell out of real estate and over-bought stocks.
I read pro gold/anti-gold (Combo and Allad for instance) arguments and think maybe meeting in the middle is prudent. However, as during the RE runup, my head and gut are telling me things are going to get really bad for currencies (not just thedollar), retail and ecomonies world-wide. After the elections–when people sober-up and come to the cold reality that there’s nothing or noone to “save” them, fear and anxiety will surely ramp-up swiftly. IMO Gold will bust out bigtime. The big questions are; how high will it go? How much to hold long and how much to move back into currency and or stocks and when?
DOC
Another question. Will it go to 650-700 before then, which is where I’d consider purchasing again? (Assuming, of course, that some physical can be had.)
There are roughly 1 billion known reserves of silver above ground in the world. If everyone in just this country bought 3 ozs. there would be none left. Of course everyone couldn’t ,and as it stands even the few that want some are finding it very difficult to find any! . Apmex has about a thousand eagles just now, but $8 over spot now! Who can say what the future holds,but I would say get your few sheckels while there are still even a few.
P.S. Through the lens of history’s rear view mirror, I expect the blame for the collapse of the banking sector will be placed squarely at AG’s feet, as your post suggests. He exceeded the economy’s natural growth speed limit for much too long, despite full awareness of the perils of doing so.
Another reason is leverage and regulation. Taxpayers are pissed. Washington is determined to not let it happen again. That means regulating the big houses and Hedge Funds. These guys will be forced to unwind over a period of time. AG was against regulation and encouraged innovation.
I never thought that it would happen but all good things come to those who wait.
I’m impressed. Still some honor left out there.
(For finance-types, he was probably a market-maker.)
Trader takes own life over large losses.
I don’t think his wife would agree.
Or his parents, siblings, etc.
I suspect the MSM may reveal by this time next year that your story was an early example of an uptrend in finance-related suicides.
Gives the term “Your money or your life” new meaning.
So which was it? Did he own his money or did his money own him?
Such a waste of life. Drop off the radar, volunteer for habitat for humanity for 10 years, go live and work at a monastery, give blood every week, whatever. Kill yourself metaphorically. End your current life, but keep your heart pumping.
Believe it or not, I actually know two Chicago pit traders who quit and went cold turkey (circa 1998.)
It’s possible but there’s an irrational emotional component.
They were both brutally honest about why they had walked. Great guys.
I know a guy who quit cold turkey as well in the late 90s and moved to FL, had a successful vending biz and went on vacations. No stress comparatively. Didn’t miss the big money or headaches.
It’s called taking out the trash Asparagus. And I agree, what a waste.
What would behoove anybody not to blow out their 401k right now?
If somebody was a few years away from their tax-break, holding on probably makes sense, but what about all the people that are 15-25 years away from that possibility?
65% of something (after taxes) beats the hell out of 100% of nothing.
“What would behoove anybody not to blow out their 401K right now?”
Denial. Disbelief. Hope that the market will turn around.
The same emotions that rule the thinking of the real estate FB rules the thinking of the stock market FBs.
King,
You’re pretty contrarian except when it comes to your own investments, where you play the trarian card to a T.
Why’s that?
What do you mean? I don’t understand what you are asking.
You stated what the proles wouldn’t do, sounding very much like a contrarian:
================================
“What would behoove anybody not to blow out their 401K right now?”
Denial. Disbelief. Hope that the market will turn around.
The same emotions that rule the thinking of the real estate FB rules the thinking of the stock market FBs.
=================================
And you think somehow you are immune to the cross-contamination of both the housing bubble and the stock bubble, by sticking your long green in money market funds?
Totally ‘trarian, dude.
As long as money market funds are safe, and safe they are ’cause the government won’t allow a run - they’ve already made that clear - then the MM is a good place for cash.
The cross-contamination of the housing bubble and stock bubble (as you call it) and their price declines adds to the value of cash, in case you haven’t noticed.
Yeah, they along with every other 1st world peer have guaranteed everything from possibly failing, which seems like bizarro-world logic, come to life.
No thanks.
This too shall pass.
I wouldn’t keep faith in a fail-safe.
Okay, then don’t.
How hard is it to crack open a fail-safe?
I think we’ll find out pretty soon…
“somebody was a few years away from their tax-break, holding on probably makes sense, but what about all the people that are 15-25 years away from that possibility?”
The tax break is current, not future. What’s the difference from having money in a mmkt fund 401k and having it outside? Or are you suggesting we all cash out and buy gold? I don’t think mmkt is fail safe, but then nothing is, really. If I could think of something better to do with it, maybe it would make sense to cash it out, but I can’t until I leave my employer anyway.
I thought maybe you were saying future marginal tax rates would increase. That’s always the risk.
Our education system plus dishonorable marketing technics have worked Pavlovian wonders.
I moved my 401k to a cash position last year.
Cash in your hand, or “cash” in the investment house’s hand?
Are there no PM or natural resource funds in 401ks? What about foreign equities? Chinese stocks may do well over the next 15 years. Even regular US equities are likely to go up during hyper inflation, no?
Are you, have you, cashed in yours? If you’re 100% sure the world as we know it is over, the move makes sense. But that’s a big hit to take if you guess wrong!
One could argue our loansharks might just want to kneecap us, not put us to sleep with the fishes. Perhaps they just squeeze us big-time rather than totally stop the tap. They take away our war toys, make us pay more for everything. But we still can buy their stuff, on the installment plan. Could happen. Crappy as the 401(k) is compared to a good ole pension, it’s better than nuthin.
I think the 401(k) is _better_ than the pension. My faith in the pension-managers and the PBGC is very low; with my 401(k), at least I have a chance of doing better on my own.
The San Diego style recession has been in full swing since June 2008. As the San Diego County Jobs graph on the sidebar to this article shows, the regional economy has lost about 5000 jobs a month since June, for a cumulative total of about 20,000 jobs lost from June through September.
State data show more than 143,000 jobs lost in past year
Consumer-driven recession cited
By Dean Calbreath
STAFF WRITER
October 18, 2008
Over the past couple years, many economists have said the California economy would not experience a true recession until job losses spread from the real estate and construction industries into other segments of the economy.
That day has arrived.
Just wait till the local governments go bankrupt and lay off the fireman and police. Then it wil get interesting.
San Diego department heads asked to cut budgets
By JOE BRITTON - City News Service | Wednesday, October 15, 2008 11:14 PM PDT
SAN DIEGO —- City department heads in San Diego on Wednesday were being asked to look for ways to slash 10 percent from their budgets to help close a projected $43 million spending gap.
Horshak:
“Oooh, Ooooh, Oooh, Ooooh, Ooooh. I know the answer!”
Kotter:
“What’s the answer Horshak?”
Horshak:
“Mr. Kotter, why don’t we just give everybody a 10% pay cut? That way, everybody can keep their jobs”
Obviously, we’d have a little more to worry about than house prices and 401(k) values in that case!
But a lot of lines of argument around here seem to be predicated on that sort of end-times scenario. My old hero Ed Abbey would be rooting it on, but can you really see us falling that low, with all of our potential resources?
Don’t worry, there’s hundreds of millions of handguns that will render the decision of whom to appoint judge, jury and executioner in our society, now that we can no longer afford to have somebody else do the dirty work.
Well, if if’n it comes to that, my plan is NOT to stockpile. Why waste the dough? Grab a horse somewhere (this might be the trickiest part) and trot into your neighborhood Kmart or Walmart and take what you can carry from the guns and ammo department, right? Wouldn’t want to be late for that special, eh?
There are plenty of nice countries where they don’t let their citizenry have as many hand cannons as they want, and for some reason said countries have miniscule rates of homicide via handgun, compared to us.
Hah, but those hapless, disarmed fellaheen would have no way to head off a tyrannical government. Gimme liberty or gimme God and guns.
“There are plenty of nice countries where they don’t let their citizenry have as many hand cannons as they want, and for some reason said countries have miniscule rates of homicide via handgun, compared to us.”
Since when was the ownership of handguns only for the purpose of preventing handgun homicide?
I am just back from a week in San Diego attending the Solar Power trade show. Some of my key customers are manufacturers of the panels. The show was the first sold-out trade show I’ve seen in many years. Tons of traffic and a general euphoria in the air.
It looks like this market is well on the climb up the hill of unrealistic expectations. Those involved in the business universally believe it is the next “semiconductor” market, i.e. the boom to be in. I’m in the saddle myself pretty well, but I sense an irony in it all.
It is a boom based solely on government subsidy and false green enthusiasm. I know that sounds strange, but managers at all of these companies agree if pressed with the question. It makes no sense if left to stand on its own. The technology has been around for decades, nothing new really. The reason that it doesn’t make practical sense economically is that the total energy inputs to manufacture and install the solar array and everything that goes with it is higher than the energy the array will produce in its life span. I’m not exagerating, this is what the manufacturers say (casual engineer to engineer over a beer and a laugh). How “green” is that?
It makes sense to build these plants because the government, federal, state, county and even city subsidize the program as much or more than 50%. You can tell which states have the biggest subsidies by the installed base maps. It makes me wonder how much of this malinvestment the governments will afford before pulling the plug. I heard at the show that Spain had a huge boom in solar until the government ran out of money for the program. Now it is dead.
The industry is equally dependant on credit. For the residential market, this means HELOCs. The HELOC is pretty officially dead. It appears that people are saving now more than borrowing.
I asked a lot of these smart people how $70 oil would affect the economics, or $50 oil, etc. They all gave me a blank stare, like they had never considered the question.
I must admit that I looked at everything with my HBB bubble viewer on. I believe it is an unsustainable boom, and a great hoax on the ecologically concerned. Still, I think I’ll be sucking on this teat for a couple of years at least.
And I picked up some cool LED lights. These things are great! No mercury lamps in my house thank you.
Yeah, the whole “green tech” thing may bubble but it’s gonna crash hard in the upcoming “wash out”.
No fundamentals worth talking about.
Tesla was the canary in the coalmine, and that canary just croaked.
On the other hand, Elon Musk’s rocket finally made it to orbit, so basically: anything is possible
We had out solar energy array installed about this time last year.
We figured we’d be out around $75 a month, based upon what we paid the utility the previous year, so $1000.00 per year out of pocket to get off the grid, seemed like a fair deal.
Our loan costs us $250 a month, so $3k a year, and since January, we’ve used over $3500.00 worth of electricity (as per utility)
so far, so we are on target to save around $1500.00, not lose a grandido by going green.
Most utilities have announced that energy rates are going up 20-25% with the new year.
We stand to save around $3-4k next year.
The lie of the perpetual motion machine is still making it’s rounds, never looking at the 2nd law of thermodynamics. This green energy/low input high output BS is a fantasy with the exception of nuke. It MIGHT be cleaner but will definitely be more costly.
Natural Gas prices have plummeted along with oil. Since my electricity costs are based on Natural Gas, I expect a large decrease in my rates.
Southern California Edison used to make electricity via hydro power in California @ a cost of almost nothing, but the drought has knocked out most of it’s generating capacity, which has been replaced by natural gas.
Here in the Golden State, the increases in consumer rates are most definitely going up, come the new year…
think so? here in Netherlands gas prices are going up more than 50% next year despite the huge crash in actual natgas prices (I think we are paying about 10x what it costs the government-Shell monopoly to produce the stuff). I think energy companies in most of the world will behave the same, most consumers simply have no alternatives.
In my country the big power/energy companies are pulling all the stops to block small scale sun/wind power use; they are afraid of potential competition, no doubt about it.
Gotta wonder though, the next 5-10 years are looking to drive solar efficiency quite a bit higher than current tech, so it’ll either be cheaper to buy the same capacity for the same space or you’ll get higher wattage for the same $$$ for the given space.. Blackened silicon, nanotech, etc..
But then again, I guess there’s always some game changer 5-10 years off.. And there’s always fusion, that’s been 50 years off for the last 50 years…
Evidently not true… http://www.openecosource.org/renewable-energy/the-economics-installing-solar-panels-wwwazomcom points to a study that says “the total energy produced over a two-year period outweighs the energy used in manufacture, installation, and maintenance.”
yensoy:
It was written in April of 2007.
Ancient history…
Kind of a fluff article. No link to any supporting data, just the statements of the Italian (government paid) professor. You get the conclusions you pay for from such.
No way to tell if the stainless and cast iron I sell to produce the high vacuum in the coating chamber is costed as materials, or if they considered the energy component of mining, smelting, casting, etc.
Take a step back and think logically about it. If it costs twice as much to manufacture as what it gives you back, it is not energy efficient.
hey blue you an engineer?
whats you take on the run up of solar company stocks last year? do you think it was a response to the commodity bubble (namely oil)
The green movement bothers me, I have learned to shut up cause to speak against it is to be for spoiling the land. But I do feel in a away its like a status symbol to be green or to spout on and on about it.
In california you could get a sticker to use the car pool lane if you car was a hybrid. In effect if you had the money to buy one you were buying a privilege, to use something that was met to take the totally number of cars off the road and encourage car pooling.
I’m a ChE, but these days I’m reduced to pretending to be a mechanical engineer. I was in the black goo business when the last oil bust occured. Shale Oil, it’s the future! cough.
I don’t know about what drove the stocks last year, but there is obviously lots of money to be made by these companies. The manufacturers at the show were on a manic high over the extension of government subsidies. I haven’t researched it, but supposedly some more of this boondoggle was snuck into the $700B bailout bill.
UniSolar is one of my favorites. It’s the morph of Energy Conversion Devices, who brought you metal hydride batteries. They’ve abandoned all R&D now and are building plants to spit out continuous ribbon solar cells as fast as they can.
As interested as I am in alternative energy, I have had the same thoughts as you about the green movement. Take wind for example. As soon as wind started becoming legitimately successful, the green movement is against it claiming nonsense about birds.
Here’s another good example. Take that Planetgreen cable channel that replaced the Discovery Home channel. That channel still has several home renovation shows doing green renovations. I’m sure lots of builders will go “green” out of desperation and to guilt us into sending them even more money. If you watch any of these shows, there are some ideas that make sense, but they are always doing things like putting up solar panels which make no sense (at least right now).
In DC we have the same thing about hybrid cars being able to use the carpool lanes. We have the 2nd worst traffic in the country and the carpool lanes aren’t just about being green. They are primarily about encouraging people to find ways to get cars off the road during rush hour. The hybrid exception actually works against the intended purpose of the carpool lanes.
There are some interesting things happening with alternative energy. There is a lot of potential for things to happen that could replace some use of coal, oil, etc. However, as soon as these options become successful, everyone involved will become a Republican (or whatever the conservative party is at the time) because the green movement will find a reason to be against it.
You do realize that large scale solar power stations completely eliminate any sunlight hitting the ground. Think about the ecosystem. Waiting for the first lawsuit against solar to protect some spider or lizard.
Three words:
Mojave ground squirrel.
There have been some advances over the last couple of years.
1. The thin film processes are getting much much better and can produce panels for a fraction fo the old costs. Some headlines in early 08 were talking about this but have not seen much else.
2. New semiconductor technologies are developing that are more efficient. The new cells convert a far larger portion of the spectrum to energy and have efficiencies of 50%. So this could influence light gathering systems i.e. mirrors and smaller cells.
3. The LED lights represent a huge increase in efficiency and reliability over other technologies including compact florescent bubls. I’f like to see LED array lighting on vehicles and other things to reduce energy expenditures. Still, all working of much lower voltages and DC. Should be workable though.
I realize there are still a lot of hurdles but its possible this technology is competative in a few years and will have its advantages.
I didn’t think we’d see hybrid vehicles making it to the market but that does seem to be happening. Now, we will have a variety of plug in vehicles over the next couple years.
Hopefully, something good comes from all of this.
@1 The thin film technology I see being used commercially is the same stuff I learned 20 years ago coating laser optics and the same stuff the chip guys used. The economies are in scaling up to football field sized continuous coaters. Most of the process guys used to work in the chip industry.
@2 CadmiumTelluride and GalliumArsenide present their own problems. For the time, these are only going to be practical for small scale specialized applications.
I think the winning technology will be one that does not require high vacuum. Chlorophyl based solar cells sound interesting. That would be real Green Technology.
I was having a dream on the ariplane about a nano array of thermocouples producing electricity without semiconductors. I was just calculating how many thousands of them would be in one panel to generate 12v when the stewardis woke me to put my seat back up.
agree about chlorophyl based cells, or other ‘biochemical’ solutions based on rhodopsin or similar stuff; it is promising most of all from the environmental side (growing your own arrays, very cheap base materials, no waste if organised well) but there are many issues to be solved.
I worked on that as a scientist in a previous life; all research was terminated because we couldn’t exactly predict the research outcome within five years (in Netherlands, and probably many other countries, ignorant burocrats rule the scientific world).
Most people (99%+) dont know that the amount of energy required to reduce silicon to the elemental state, then, re-refine it to a level of purity to make it a semiconductor, wont ever get returned by sunlight, at least not in our lifetimes. Such is the ignorance of those who want to believe.
Yeah the LED lights are cool, almost all the DJ’s are using them incredibly light and no heat…its worth the initial expense.
But don’t you think the solar panels could be made more efficient so it would be a profitable idea without govmint subsidies?
I know I know hybrid cars sort of make sense at $5 gas but not at $2.50
======================================================
And I picked up some cool LED lights. These things are great! No mercury lamps in my house thank you.
dj,
I DO think innovation could make solar cells cheaper, but the money is going in the opposite direction at the moment. Isn’t that what government intervention always does?
As I understand it, there is a new process that
actually “prints” the layers of material on to a
substrate moving through a high speed printing press. Claims of substantial lowering of costs.
They were at the show. It is interesting and low(er) cost. Also low efficiency and questionable durability. Good for your roll up camping use it once in a while applications. They had a tube model at the show which you pull out like a window blind. Interesting stuff.
I heard some exciting buzz on these but didn’t go to the show. Efficiency was low but cost as an order of magnitude lower. Could see making a large plant out of these in Nevada.
How bad was the reliability? Cells on copper foils sounded OK from a thermal stanpoint but not sure if thermal cycling would crack the semiconductors.
It is a durability issue on the printing press product. Thin sheets of plastic don’t last long, or aren’t expected to, in weather.
I don’t know about the copper foil, but one of the large producers uses stainless foil as a backing.
I read about solar paint for your roof, but that is a ways away. I also read about nano tech that produces carbon so black that light has a hard time escaping. Both these technologies in concert would provide a leap over what we see today… but;
There is a better way (more “green”), but requires more than dinging your equity for overpriced products and labor. My buddy is taking old aluminum sliding glass doors apart, building an insulated 2×4 cavity filled with black connected aluminum cans, add a cheap photovoltaic panel to run a computer fan, and in an overcast environment he is getting 225-250 degree heat out the other side. He built in a safety just in case it gets too hot. So using mostly recycled stuff people throw away, he is heating his home for about 3 cents a day. Next year will be free.
Our environment is not near as sunny as CO,CA,TX,etc, so traditional solar is not nearly efficient. Not enough wind here either. Solar gain as described above is our best bet for fall, winter, spring…
in general conserving energy and better insulation is still by far the most profitable.
Solar will get more attractive once it is integrated with standard building products like rooftiles, window panes etc. Those products are starting to come on the market now; unfortunately for existing buildings they are usually less attractive. In Europe this is even more of a problem because buildings last very long, like 50-100 years (except for recent construction).
Solar heating is profitable (although it takes 5-15 years to get back your investment) in most of the developed world already, again usually for new construction only because integrating with an existing structure is expensive. I’m sure photovoltaic systems will get profitable within a few years, even without the government subsidies. But the current dip in oil prices could be a severe setback for the industry, if the large power companies really pass through their cost reduction (which I doubt, in Europe this clearly is NOT happening).
What is the price point on LED lights now?
Do you know if they can be used with dimmer switches?
I too have stuck with the old incandescent lights for now.
try doctorled dot com
Just 69 shopping days left till xmas…
Just hear those slay bells jingling,
ring ting tingling too
Come on, it’s loanly weather
for a slay ride together with you
Outside of people’s stocks falling
and friends are calling “you too?”,
Come on, it’s loanly weather
for a slay ride together with you.
Giddy yap, giddy yap, giddy yap,
let’s go, Let’s look at how much we’ve blown,
We’re riding in a wonderland of snow-job.
Giddy yap, giddy yap, gidd yap,
it’s grand, holding nothing in your hand,
We’re gliding along with nothing left but a song
of a wintry financial wasteland
http://www.youtube.com/watch?v=nRl63_kYwgk
‘Matchmakers left heartbroken by finance crisis’
Would-be husbands in Singapore put love on hold amid recession fears
http://www.msnbc.msn.com/id/27213018
“I hope to get married,” said 19-year-old Nguyen Thi Hue, who returns to Vietnam on Thursday after two months in Singapore. “I want a husband who can dote on me and love me.”
‘For $5,450, a man can pick a wife from among the women in Lin’s shop, send her to the doctor, and get his marriage registered — all in 12 hours, but only if the woman likes him too.’
Can’t buy a wife anymore? Oh, the humanity!
Hahahaha! Golly, people are funny. Hey, I know someone who told me about his brother who bought a Philippine wife about 10 years ago. Dainty and obedient and meek and exotic. Yep, things was goin’ great until she learned enough English to sound out the words reading ‘Divorce Attorney’ in the yellow page section. D’oh!
I heard the story downtown at ‘Chopsticks’—that’s what reminded him of the tragic story—and I laughed quite heartily, I must confess. I accidentally inhaled a bunch of chewed up noodles during all my guffaws and almost needed the Heimlich. My lack of sympathy was okay, though, because my friend thought it was pretty funny too.
Hi,
I’m curious as to what guess you guys might have regarding the percentage of *subprime* mortgages that will wind up in default before this mess is all over?
My guess is about 90%. But that pretty much just a guess based on the large number of of liar loans, no money down loans, over appraised properties, way underwater mortgages, etc. I think those factors will lead to a very high default rate of subprime loans. 90% is just my swag. Remember, I’m talking about subprime, not regular, mortgages.
How do you define subprime? I know people that are qualified as prime, but got too big mortgages compared to their incomes. On the top of that they bought a couple of investment properties. I do not care whether their CS is close to 800. IMO there are more subprime now than the guys with CS under 600, but with a debt to income ratio that is smaller than that of the guys with CS above 750.
“They” want us to spend, so yes, I will spend. Within my means. I certainly did my part this year, spending $50,000 on airline travel, lodging, car rental, and double utilities. Happy though that it went to private industry and not into socialist engineering.
Personal job outlook still looks good ahead of me. So I will continue spending - more on air fare, this time between Los Angeles and Phoenix. More on double rents, more on dining out, more on double utilities. So I’m doing my patriotic “duty” by spending.
Millions of Americans are still able to spend still. Engineers, health care providers, soldiers, police, fire fighters, and so on. But they are tightening and paying off debt.
All the excess spending from the last 8 years will have to be absorbed the next eight years. Meanwhile the GDP will increase (partly due to increase in unemployment in construction and real estate). Creativity will not stop and not slow down. However the payoff from all that creativity will be much further away - in the form of growth stocks.
The stock market will bottom before Main Street bottoms. Be greedy when others are fearful.
“Be greedy when others are fearful.”
A winning mindset.
Yes, but the turnaround will not be all neat and tidy as many thought yesterday when Buffett wrote his op-ed.
Granted there is a lot of fear out there right now, but the fact that so many see an opportunity so quickly means the bottom is not in at all.
It’ll be the duration of this downturn, and not a particular depth, that will bring about capitulation.
Agreed.
Yep, bottoms end with capitulation not with everyone jumping up and down hyperactively saying that the “bottom is in”.
Earnings are going to deteriorate brutally. Lack of leverage + no consumer spending are a deadly force.
Not to mention the currency crises brewing in all marginal states.
I am quite convinced the bottom is not in.
Buffett is just talking his position.
“Buffett’s Stock Picks Suffer One-Week Drop of $10.4 Billion”
Bloomberg
and that wasn’t even counting his short S&P 500 puts which cost him another $12B
The question in my mind: when does he blow his losers out and admit he was wrong? 700 on the S&P 500 is almost a $39B loss. 700 is the S&P 500 Trendline.
Losing $22B in a year puts him right up there with the banks.
Reading all your posts, I agree mostly with you are saying. Perhaps the bottom in the stock market won’t be reached until a couple years the bottom in Real Estate. My opinion is RE won’t bottom until 2012. I’ll take the 2.36% yield on the S&P 500 in the meantime.
Since the February 2000 stock price drop, my best gains in my net worth came from investing contrary to my emotions. This has been the decade of real estate. The 1990s was the decade of stocks. The next decade will be the decade of bonds. Invest accordingly (grin).
It’s not like Warren Buffett to choreograph his future financial moves to an adoring public, is it?
“It’s not like Warren Buffett to choreograph his future financial moves to an adoring public, is it?”
He never really has, but that won’t stop some from advocating the bottom is in.
One thing I took from his biography is that he doesn’t buy at the bottom, he buys on the way down.
Buffett is pulling a putative Rockefeller in this cycle.
He talks about 20 years but he will be 98 by then. I’ll put greater money on him not being around in 20 than this “being the bottom”.
I’m going to go against the grain and in a rare move, go against Buffett currently. There will be far better times to buy.
I’m going to go against the grain and in a rare move, go against Buffett currently. There will be far better times to buy.
I agree. Buffet not only is looking at the end of his life but also the realization that he has the power to influence markets. I’ve felt that most of his recent buying has come out of finding “not so bad” deals and trying to use that to calm the markets.
absolutely, same observation in Europe: the small investors are still holding on to their shares and keep ‘buying the dip” if they have funds left. There is no reason to worry, the market will go up again (people remember how this works from the last 5 years).
On another note: I have warned here repeatedly about Dutch financial ING, parent company of ING Direct. Some HBB readers purchased ING shares on the way down (from EUR 35 in 2007) about two weeks ago, around EUR 14. ING closed yesterday below their longterm low of 8.6 (from 2003). ING finally admitted they ARE taking big losses on their US mortgage portfolio (until last week they always denied that) and are suddenly loosing money bigtime.
That close below EUR 8.6 is technically ominous and there was more news to confirm it today: ING will get help from the Dutch government, which means shares will get diluted and/or dividend will go down. The buy-the-dippers will get another lesson …
Read Jesse Livermore (or his shadow writer actually) to understand why “buying the dip” is just a terrible idea.
When the CDS overhang is addressed, we may be in sight of a bottom, but beyond the disaster that was the LEH auction, what part of the $56T (or more) has been resolved?
I bought some shares that ‘looked’ cheap in lieu of throwing the money away at blackjack or slots in AC, but I’m not holding my breath…
B.i.M.
I know you voted for ’ssshrubery and have since vouched disdain for your choice, so there’s no reason to keep on spending, just to please him.
True, but I’m not spending for the sake of it. I’m spending because I like to go home, 2000 air miles away, as often as I can. That’s more of a “need” than you’d think!
I suppose I should stop breathing too?
Not to worry, inauguration day is 97 days away!
I don’t blame you for working like a dog, as in just 97 days, the defense industry will be shrinking mightily, as we start to pull out of a 2-front war with our tails between our legs, no longer financed by the kindness of strangers in far away lands…
I wonder what you and all the other intelligent people that toiled to make mass weapons of overkill, will do?
and then the war against the populace will begin in earnest.
We’ll sell them direct to the aforementioned strangers in far away lands. It’s not like a power vacuum created by our withdrawal is going to make their security concerns disappear. [Typed from the hotel executive lounge in the capital of foreign country sharing a border with Iraq.]
One can only hope the Defense budget shrinks to the size where it’s for defending America in America. This will save $100s of billions per year. Also no aid to any foreign nation, especially those in the middle east. No entangling alliances with anyone either. But defense spending is mandated in the Constitution so we cannot eliminate it. Social spending (food stamps, welfare, housing assistance, and so on) is unconstitutional.
I have not seen you ever admit those facts.
What I would do? Note: I was working in the defense industry in the 1990s during the height of the BRAC. Also I always had the mindset that good times never last. So I saved over the last 8 years in old man investments and hard currency to get me through the next BRAC.
Besides, I am resourceful and am willing to do something else. It would be a dividend to reduce defense markedly, but I cannot say it will be a peace dividend. Fundamentalist Moslems hate freedom and will not rest until all the nations that have more freedom than them are under Taliban-style rule.
In a newly disclosed legal memorandum, the Bush administration says it can bypass laws that forbid giving taxpayer money to religious groups that hire only staff members who share their faith.
“It’s really the church-state equivalent of the torture memos,” Mr. Anders said. “It takes a view of the Religious Freedom Restoration Act that allows religious organizations to get federal funds without complying with anything.”
The document signed off on a $1.5 million grant to World Vision, a group that hires only Christians, for salaries of staff members running a program that helps “at-risk youth” avoid gangs.
http://www.nytimes.com/2008/10/18/washington/18discrimination.html?_r=1&partner=rssnyt&emc=rss&oref=slogin
=======================================
Blind faith really pays off…
The Currency Pooptacular Special continues: Baltic States in the “Danger Zone” Say Economists.
The three Baltic states of Estonia, Latvia and Lithuania are among those that could experience an Iceland-style economic crisis according to two new reports published this week.
“The markets are asking the question ‘Which country will be the next to fall?’ The markets seem to have decided that Hungary will be the next Iceland. However, there are other countries that share some unpleasant similarities with Iceland,” said a Danske Bank report.
In our ongoing game of World-wide Monopoly, properties on Baltic & Mediterranean Avenue have gone back to the bank, and Oriental Avenue is on the verge of doing so, as well.
In another major “Baltic-related” development, the Baltic Exchange Dry Index has plummeted from a record high level of 11,793 in May 2008 to a current level near 2000, reflecting an anticipated drop in demand for shipping bulk cargoes such as iron ore across the world’s oceans.
Business
Industry and the financial crisis
Meanwhile, in the real economy…
Oct 16th 2008
From The Economist print edition
How the world’s most basic industries are coping with the crash
IT IS about as far as you can get from the woes of Wall Street and this week’s dramatic rescues of American and European banks. The mucky business of digging ore out of the ground, shipping it across the oceans and turning it into steel, the feedstock of industry, is at the other end of the economic food chain from the trade in credit-default swaps, collateralised debt obligations and other esoteric financial instruments. So the recent fall in raw-material prices and the decline in shipping costs indicate just how far-reaching the consequences of the global financial crisis will be for the global economy.
This is a great forward looking index along with “Dr. Copper”.
Both are screaming “global recession”.
I read somewhere that many cargo ships are stopped because the banks won’t loan money to “float” the cargo. This could pose some interesting disruptions in the global grain supply chain. That is not so far removed from Wall Street.
Exporters in other countries won’t accept the LC tendered because they don’t trust the banks
issuing them.
No LC’s, no trade
The double eagle.
a few months back, I shared a story of a single one ounce coin. The seller, a hard working young man, wanted to sell his coin, and he offered it to me at 900, I knew at the time, gold was trading north of 900. I refused to buy the coin. being an honest man, I told him it was worth more.
I saw him again this week, and I asked about his coin. Had he sold it?
He sold it to a coin dealer for $937 in the notso distant past. Could these dealers be the same ones who have a mysterious shortage of gold to sell? The vaults being full and bills to pay, and all that.
Be warned…when the buyers are fearful panic driven and going all-in on the Precious metals, along with with Joe the Plumber and Jane the Painter and Old Aunt Millie, and Great Grandad mudhut going all in….that story does not sound like a happy ending to me.
a tear,
in my beer
good call on the TMM the other day.
how do you do it?
post a capitulation sell, while you hold.
The current wholesale bid on $20.00 Saint Gaudens (97/100’s of a Troy Ounce of pure Gold) is $970.00, about $200.00 over the melt value.
Why would coin dealers be offering so much over the spot price, if there wasn’t feverish demand?
The Beanie Baby effect maybe?
“The Beanie Baby effect maybe?”
you should have told the Babylonians,Egyptians, Aztecs, All of Asia etc etc…
Seems after 1973 we became smarter than the ages, and now Fed reserve notes backed by derivatives are more valuable. I’d say the way they’re passing them billions around that they don’t seem to mean much these days…
Raw materials available for beanie babies:
Cotton: 25,000,000 tons produced each year
Polyester: No clue, but probably close to cotton; variable since it’s synthetic
Raw materials available for gold coins:
Gold: 600 tons produced each year
Ratio = 42,000 : 1
Which do you think is more in danger of being in shortage?
“Which do you think is more in danger of being in shortage?”
Lol. I doesn’t matter what I think, it only matters what the market thinks. Right now the market apparantly thinks gold coins are in short supply, thus there is a run on gold coins.
The market once decided there was a shortage of Beanie Babies which caused a run on Beanie Babies.
This phenom happened to sugar in the Seventies and toilet paper sometime later on.
All this is rather amusing, IMO.
You must have some very expensive dealers. I know of some selling for $40 or so over spot (depending on type - K-rand vs. Eagle etc.), and they do have some in stock. I’d give you dealership names but only after next week when I plan to go by there myself
(seriously).
In general yes I do see a shortage, but there is some out there and it’s not such a huge gap from spot as you make it out to be. Perhaps it’s different on your side of the country though.
new part of the story.
This hard working young man has taken the proceeds of the single coin and invested in a gold claim, along the river, with a full underwater suction and filtration device….oh, yeah….he bought a scuba thing too… a sluice?
He says by the end of next summer, he will have enough to pay off his house…..course he owes more than I do, and he’s had the same house for about 11 years…. he needs an investor… maybe he breaks even, maybe he strikes it rich, maybe he….. maybe
still, he goes all in…..and commits to quitting his job and living off the land on his claim all next summer with the “hope” of striking it rich.
I dont think people are going to get “rich” buying gold in the near future…unless of course its going mad max….so the gold in Estonia, and the rest of the baltics are where the “real” buyers are.
its not going,
mad max.
here….
Britain faces deflation for first time since 1960
The Retail Price Index – the most comprehensive measure of UK high street prices, will drop at an almost unprecedented rate to -2pc by the second half of next year, according to new research from Fathom Consulting.
It said the fall was largely due to the drop in mortgage costs and house prices, which together form a large part of the RPI. However, lower food and energy prices would also play an important role. Since modern comparable records began in 1956, the RPI has dropped into negative territory only once, in the late 1950s and early 1960s, but it only dropped as far as a rate of -0.5pc.
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3218075/Britain-faces-deflation-for-first-time-since-1960.html
Policy makers navigating the U.S. through the global credit crisis may have a new concern on the horizon for 2009: deflation.
Sudeep Reddy: WSJ — Amid Pressing Problems, Threat of Deflation Looms
On Monday I will be buying oil through futures and in USO. I will also probably be buying grain futures (May and July deliveries).
Buy what China buys, sell what China sells.
Chaque a son gout.
Are you entirely unconcerned that the end of the symbiosis might bring about the end of China’s gargantuan demands for industrial inputs?
The Retail Price Index – the most comprehensive measure of UK high street prices, will drop at an almost unprecedented rate to -2pc by the second half of next year, according to new research from Fathom Consulting.
Edmund Conway: Telegraph — Britain faces deflation for first time since 1960
“The price of oil may be going down for the moment — perhaps due to the deleveraging of hedge funds, banks, and invested individuals, perhaps combined with a perception of “demand destruction” — but the geology and geopolitics of oil have not changed since June of this year when oil was at $147. Let’s say US oil consumption is down one million barrels of oil a day. Within the next two years, we’re liable to lose more than that in import declines from Mexico and Venezuela alone.”
The main reason that oil is going down is credit availability to all but a few buyers. A year ago there used to be 50 end buyers, today there are a handful. The credit is not there for every step of production to gasoline production. Enjoy the low prices while you can. China is buying 2MM more Bbl per day at these prices for the strategic petroleum storage. On top of the 46% increase over last year.
When every mope in the MSM is talking about deflation, that is when it is time to buy commodities. The market will do what it can do to hurt the greatest amount of investors.
Consider also the impact on oil prices that occurred from the topping off of the Strategic Petroleum Reserve. This action, undertaken by the Bush administration, was completed in mid-summer, I believe.
So, when the purchases for the SPR discontinued, oil started dropping in price.
Is it possible that the SPR “top-off” was being done in anticipation of a credit freeze-up? The SPR holds approximately a month and a half’s supply of oil (for U.S. consumption). With letters of credit hard to come by, I’m kindof glad that the SPR is completely full at this particular point in time…
Hey, I just had a good idea! Just in time to prevent some serious cussing, too.
Alad! I am looking for a quote, it’s something like ‘we sleep safe in our bed because rough men stand ready to guard us’ …
something like that? Do you know the one I mean? You seem to know every other quote extant. Tell me, and then I can stop googling and searching for the d*mn thing.
btw, this blog really is quite the resource, isn’t it.
“We sleep safe in our beds because rough men stand ready in the night to visit violence on those who would do us harm.”
E. Blair
Or as non-dorks would know him, George Orwell.
It is heartening to reflect that there are great historical precedents for expressing one’s unvarnished views under the cloak of a nom de plume.
Maybe this will help. Forgive the formatting its a cut and paste job from
en dot wikiquote dot org/wiki/List_of_misquotations
“People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.”
Alternative: “We sleep safely at night because rough men stand ready to visit violence on those who would harm us.”
In his 1945 “Notes on Nationalism”, Orwell did state that, for the pacifist type of a nationalist, the notion that “Those who ‘abjure’ violence can only do so because others are committing violence on their behalf.” is impossible to accept. “Notes on Nationalism”
Notes: allegedly said by George Orwell although there is no evidence that Orwell ever wrote or uttered either of these versions of this idea. They do bear some similarity to comments made in an essay that Orwell wrote on Rudyard Kipling, when quoting from one of his poems.
“Yes, making mock o’ uniforms that guard you while you sleep” - Rudyard Kipling (Tommy)
“I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the very freedom that I provide, then questions the manner in which I provide it.” - Aaron Sorkin (A Few Good Men)
Alternative: “We sleep soundly in our beds because rough men stand ready in the night to visit violence on those who would do us harm.” - Winston Churchill (miscellaneous quotation, no date)
Thank you alad, NYCity, and blu. You saved me a bunch of time I can more productively employ by drinking beer and trimming peppermint and gazing at trees. I appreciate it.
Relating to the prior Manteca discussion about neighbor resentment for new folks who’re buying their McMansions at half price, I’ve just seen the seller version of this for the first time.
I just came back from a social gathering where one guy was really pissed at his neighbor for having the nerve to sell for $60K below what he paid two years ago for his Seattle area home and ruining his comps. Now he’s not sure whether to do an expensive remodel (as a renter, I admit I don’t really understand how your neighbors’ home values affect what you’d do inside of your own house: I thought it’s a home, right?)
I guess I’m just a jerk: I couldn’t really muster up any geniune sympathy. Personally I look forward to glares of resentment and spite as I buy someone’s condo in an all-cash transaction for in 3-4 years for half off the bubble premium.
Sacre bleu!
Wall Street Journal
* OCTOBER 18, 2008, 4:25 P.M. ET
Bush Plans Summit of World Leaders Over Crisis
By JOHN D. MCKINNON
President Bush is expected to announce plans to host a summit of world leaders to discuss the global response to the financial crisis.
The expected announcement represents another concession to European leaders, who have already forced the U.S. hand on key design elements of the financial rescue effort that is currently underway around the world.
European elected leaders also have sought to place the blame for the financial crisis on the U.S., despite the weaknesses in European banks that have been exposed. French President Nicolas Sarkozy in particular has pressed for the economic summit to be held in New York City, where, he says, “everything started.”
Mr. Sarkozy appears to be getting his wish. A senior Bush administration official said on Saturday that the president would announce that he will be the host for a summit of world leaders “to discuss the global response to the financial crisis and ideas to prevent such a crisis from recurring in the future and to preserve our free market system.” President Bush was expected to make the announcement as he welcomed Mr. Sarkozy to Camp David for dinner and talks on Saturday evening.
Washington-orchestrated confidence game has sold American capitalism short.
Wall Street Journal
* U.S. NEWS
* OCTOBER 18, 2008
Essay
The Confidence Game
There used to be too much of it. Now there’s not enough. James Grant argues that the real lack of confidence is in Washington, with the administration losing faith in capitalism.
By JAMES GRANT
In disclosing plans to buy a quarter-trillion dollars of bank stock in the name of the American taxpayer, Treasury Secretary Hank Paulson harped on confidence. “Today, there is a lack of confidence in our financial system, a lack of confidence that must be conquered,” he said on Tuesday.
What Mr. Paulson did not get around to mentioning was the excess of confidence that preceded the shortfall. Under the spell of soaring house prices (and before that, of stock prices), Americans trusted the things they ought to have doubted. But markets are cyclical, and there is always a new day. In compensating fashion, people will eventually doubt the things they ought to have trusted. Investment opportunity follows disillusionment. It’s complacency that precedes bear markets.
If the confidence deficit seems so high, it’s because the preceding confidence surplus was full to overflowing. People suspended critical judgment. They accepted at face value the pretensions of central bankers and the competence of investment bankers. Not one professional investor in 50, probably, doubted that wads of subprime mortgages could be refashioned into bonds that were just as creditworthy as U.S. Treasurys.
Federal Reserve Chairman Ben S. Bernanke and his predecessor, Alan Greenspan, were fine ones for believing impossible things. They propounded them, too. Never mind asset bubbles, they said. Not only can’t you predict them, but you can’t even recognize them after they’ve swollen to grotesque maturity. Better just to tidy up after they burst.
…
Wall Street Journal
* REAL ESTATE
* OCTOBER 18, 2008
Weak Home Construction, Sentiment Underscore Impact of Credit Crunch
By BRENDA J. CRONIN and JEFF BATER
Housing starts and consumer sentiment declined significantly in September, reflecting a national retrenchment protracted by the global credit crunch.
The preliminary consumer sentiment index released Friday by Reuters and the University of Michigan skidded to 57.5 in October from 70.3 in September. The index, which began tracking consumer sentiment in the early 1950s, is at its lowest point since June of this year, when rising gas prices weighed on consumers. The report said only four previous surveys posted declines of 10 index points or more.
President Bush, speaking Friday before the U.S. Chamber of Commerce in Washington, said his successor must focus on financial regulations.
“Consumer sentiment is down for the count and isn’t going to be getting up any time soon,” said Joseph Brusuelas, chief economist at Merk Investments. “Even with the decline in the price of gasoline — falling home prices, the falling value of equity portfolios and bleak job and income prospects should combine to depress consumer sentiment for some time to come.”
I am again spending the weekend in my native Western New York. Denial is thick up here. Many I know are bragging about home purchases made within the last year or so. Driving around, it’s been amazing to see some of the vacancies up here. Prime retail lots are abandoned and whatnot.
It looks like Florida 2006 to me. I was scoping a SFH near my folks new joint. Asking $130k. The tax burden? $6,300/yr.
B-b-b-but the bubble never heeeappened here.
Just like it never happened in the Midwest.
Their rationalizations are shifting. First it was “prices are still going up here”, then it was “prices won’t go down”, now it’s iterations of “the market will rebound”.
The bubble never happened here either (heard just two weeks ago…)
“The man who fears no truths has nothing to fear from lies.”
Francis Bacon
http://www.youtube.com/watch?v=grhNs_m-s1o
I am wondering if the Fed will ever come clean on the fact that the Great Moderation was actually a period when they burned the chair legs out from under the American economy in order to heat our rooms? Or do they hope the lens of history will somehow misconstrue the current crisis as an unavoidable, unforeseeable Act of God?
Are you kiddin’?
This would be tantamount to admitting that most economic research was nothing more than footnotes to the Austrian economics framework.
Not a chance.
In the long run, Austrian economics will bury neoclassical economics.
The Austrian model is not politically viable, it may never take hold. It concludes there should be a minimum of govt involvement.
Sounds like something the Republican politicians (who always ramble on about the virtues of limited gubmint) might want to investigate.
Concluding paragraphs from a WSJ essay in today’s paper (tried to post a long excerpt from the beginning, but don’t see it yet):
The Confidence Game
James Grant
…
For the false confidence that played so important a part in the creation of the late excesses, the government should decently bear its share of blame. It accepts none of it, however, at least none that Messrs. Paulson or Bernanke have admitted to. Not that a federal confession of sin would expunge the financial errors of the debt-financed upswing. But it would, at least, clear the intellectual air and help the country and its creditors find a way to do better next time. For a start, the Fed might foreswear the Greenspan-inspired conceit that it can put the economy back together again after a debt bomb explodes.
And the opportunities? For the first time in a long time, stocks, tradable bank loans and mortgages are becoming cheap. The bear market is truly a value restoration project. Wall Street will be going on sale — if the government will let it. For the entrepreneur, the silver lining in the federalization of finance is obvious. Start a bank or broker-dealer to compete with the institutions that will soon be smothered in Mr. Paulson’s quarter-trillion dollar embrace. There’s oxygen, still, in the free market.
If he were alive, I believe Honest Abe would offer some words for the wizards of Fed who would like to perpetually bamboozle the populace with their fooling games:
“You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.”
–Abraham Lincoln–
(attributed)
“You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.”
The Hell you can’t!!!!
Update on single moms!
What would happen if we had a brand new tax on single male professionals?
They could help spread the wealth and keep moms in their homes, thus keeping house prices sky high.
I like this one. Hello Pelosi.
Curse you!!!
There already is such a tax. It is called alimony.