Bits Bucket For October 30, 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.
October 30, 2008
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Maid-Turned-Realtor Ran Vegas Mortgage Scam, Prosecutors Say…
Here are two more steaming pieces of realturd sh!t that if it were up to me would be convicted stripped of all wealth, citizenship and shipped by barge to a penal colony in French Guiana
http://www.bloomberg.com/apps/news?pid=20601109&sid=aGYlBrRCgtq0&refer=home
Why the barge?
I like the barge idea, just make sure it’s a well used garbage barge. Totally exposed to the elements and wallowing in filth. Pick this pair up on the west coast and don’t transport them via the Panama Canal for the extended cruise. I don’t think this could be considered cruel and unusual punishment.
Only if the garbage barge has a compactor on board.
Because offshore barges are towed well behind sea going tugs. The see-saw & side to side yaw is guaranteed to have them puking their guts out and dry heaving all the way.
And yes a garbage filled barge would be best fit for their travel…A–holes.
Friend of mine is his ex. Allegedly, they used anyone they could for straw buyers….friends, family, you name it. And they still think they’ll go scot free.
Blano,
Of course she’ll walk ( Daddy is a big shot real estate attorney! ) This will make a great movie. I know it WILL be made into one. It will rival “Blow” and “Boiler Room” in sleaziness.
This was the promise of “The Boom”. Anyone from any walk of life could commit fraud on a grand scale if only they applied themselves! The one quote about “2 out 3 people in a bar were agents or brokers” and “an agent could trip over the front step and land a $10,000 commission” just ’say’ “Vegas” don’t they? Rot in jail b!tch.
Reading about how the RE father defends the criminal dealings is a sad revelation about the ethical code of his profession.
Of course, does anyone doubt he gave creative advice all along?
I read the entire article.
We often comment on how people should read what they sign, and it is so true.
There are real victims in that article.
Sigh,
Leigh
Prosecutors say the pair recruited fake — or “straw” — buyers to apply for loans to purchase 227 properties worth $107 million.
“Overall, banks have lost $17 million just on mortgages handled by Mazzarella and Grimm.”
Just this one alone says we have a long way to go before we hit bottom!!! Scary!!!!
It’s a good thing McCain, and the other politicians, want to buy up these mortgages to “keep people in their homes”. That is a great plan. Cramer was busy cheering it last night. We gotta get prices going back up, says the chimp.
Cramer said the only ones who hate the plan are renters!
Talk about a woman’s fury.
Who else does Cramer think is going to buy these overpriced POSs? Banks are certainly not going to be lending more money to current homeowners stuck with their own tyvex box.
“tyvex box”
LOL! Nice touch, ( that really is what holds them together, right? )
Amazing what 4 mil. plastic stretched real tight and a box of staples can do isn’t it?
It’s a good thing The Messiah wants to enact a moratorium on foreclosures. That is a great plan.
Geritol Johnny is all over the map with empty promises he himself can’t straighten out the crooked talk.
The nugget:
One day, Mazzarella asked Rojas, by then an agent at the company, about her credit score. It was high. Mazzarella asked if she wanted to be an investor and earn $5,000 for putting her name on mortgage documents. Rojas agreed. Mazzarella asked her to sign a blank application. Mazzarella said she would do the rest.
“I was thinking, `Yes! I hate filling out this crap,”’ Rojas says.
Left LA,
And there were plenty of flags her FATHER and plenty of those around her should have picked up on? Even the ceramics teacher when her scumbag husband offered to “pay the difference” on her fluffed up mortgage?
Wait a minute, when is ‘that’ arrangement considered ’standard’ by ANY means? Hubby probably caught hell from Mrs. Mazzerella on that one. I really question the father’s involvement on all of this? How did a HS drop out and redneck trucker figure out how to accomplish all of this entity structuring? That stuff costs money, attorneys do the work.
What all this boils down to for everyone in this article is greed, greed, greed.
Don’t think she’s some poor innocent victim.
If she had a high credit score, I would presume that means she’s familiar with how credit works.
She must have known she was entering in a scam, she just figured the risk/reward ratio was in her favor.
AND SHE WAS RIGHT!
“The high-school dropout and former housemaid moved to the Nevada city in 2000 from Seattle, got a certificate from the ABC Real Estate School and started selling houses in what would become the hottest market in the country.”
First sentence says it all: the “ABC Real Estate School”??? WTF?
Yes, YOU too can earn millions putting YOUR PRESCHOOLER to work selling houses!! Call today to enroll your child in our no-money-down program!!
I prefer “ACME” Real Estate school.
Hahahahaha! Funny!
snob
With Wiley E. Coyote as the mascot.
My personal favorite is The Close Cover Before Striking School of Real Estate and Heavy Machinery
“First sentence says it all: the “ABC Real Estate School”??? WTF?”
I know that it is not a member of the Ivy League, but I am pretty certain that ABC is a Seven Sisters school.
Yeah. Tis a shame she had to attend Vassar.
(Obscure Simpsons Reference of the Day)
I’ve had enough of your Vassar bashing, young lady…
“I’ve had enough of your Vassar bashing, young lady…”
I love The Simpsons.
This is a great American success story!
I agree. She’s an entrepreneur who pulled herself up by her bootstraps, got an education, started her own business and made millions.
Now Big Goobermint wants to step in and use force to stop transactions that were freely agreed upon by all parties. Communism I say!
Yeap!
She and hubby were doing business as countless other Americans have done it for many generations.
They made money the old fashioned way.
Isn’t there a leper colony en route to French Guiana?
Used car sales and used house sales seem to attract the lowest human form of lowlifes.
Good going NAR, naming her one of the “30 under 30.”
http://www.realtor.org/wps/wcm/connect/rmo-content/rmo/rmo2007/07june/30under30/mazzarella
There is a bad recession coming down the pike. Time for Wall Street bulls to party like it’s 1999!!!
Futures Move Higher
U.S. stock futures rose, after central bank interest-rate cuts prompted rallies in Asia and Europe. Investors are awaiting GDP data that could confirm a U.S. recession.
Yeah, as if this thing going to have a Hollywood ending.
Typical. But at least the WB wannabes are taking one for the team.
Even confimation of the recession and a flat jobs report is great news to Wall St these days:
The U.S. economy shrank at a 0.3 percent annual rate in the third quarter, its sharpest contraction in seven years as consumers cut spending and businesses reduced investment in the face of rising fears that recession was setting in.
A separate report showed jobless claims were unchanged.
Futures rose after these reports…..
Noteworthy detail: The contraction as viewed through the rear view mirror does not yet reflect the October demise of Wall Street.
Planning on buying SKF at the open. They almost make it too easy.
Agreed.
P’box: Why?
Watch the action on days with a gap down open for a while and you’ll see why.
That’s what I thought. Thx.
October 30, 2008
As World Markets Rally, A Fog Of War Envelops Trading
Angrybear
…
The rally is all the rage now. The DJIA might even retake the 11,000 level, or maybe pop up to 12,000. It is not far from there to get back to the all-time high.
US markets could rally a total of 20% this week. It will be almost impossible to say why.
Douglas A. McIntyre
Why?
Because they were oversold, or to put it in more precisely, there were people shorting at ever lower prices.
Even a small movement upwards forced them to cover = more buying = sending the price upwards.
Bear market rallies are vicious. You will NEVER see a 10% upward move in a bull market.
It has more to do with the actual technical mechanics of shorting than anything else.
So, the higher traders get these markets and bring in the suckers, they will be able to short it back down again and make big money?
The traders are not getting the market higher. The short-sellers need to cover. They’re the ones whose hand is being forced.
Of course, if you short at the end of the sucker rally, you will make a lot of money. The trick is in gauging when.
Not sure I agree FPSS. For every short seller that’s squeezed and has to sell - there are a lot more like me that use the upticks as an shorting entry point. I shorted a bunch in this morning’s homebuilder rally in fact. It was too good to pass up.
That panic is over, so the markets are going to boom.
And then all they’ll have to deal with is the fundamentals.
Which suck.
But won’t be rearing their ugly heads until January.
Wait until the unemployment numbers around mid 09….
Other than an opinion, is there any reason to really believe in a full blown rally of that magnitude after so short a bear stint prior to elections and with continued negative news? Especially after so lackluster of response to the fed cut with very little room for any further action?
Foreign markets, especially Japan, could theoretically be attributed to negative dollar sentiment.
The trading that I see from those other than myself would suggest there is some validity to this.
about 3 trillion in free money over the last few weeks (worldwide) sounds like enough incentive for a good rally to me …
Too many people have recently become very bearish…even making us real bears look like optimists.
The market will do the opposite of what all the retail investors do (esp when it’s very volatile), IMHO.
I’ve been shorting since 2004, and just got out of the market entirely last week (long and short). Will wait until the new year unless we get a radical rally before then (12,000+).
Nah, the wise market is just pricing a future weaker dollar.
-
Isn’t it?
Anyone?
Wall St. doesn’t worry about what’s happening with the ‘little people’.
Let them eat miss steak…
Why this is really really bad news for luxury consumption: Wall Street did not experience its massive implosion until the onset of the fourth quarter (October — just this month), after the last data which enters the most recent LCI release. I predict the LCI free fall will continue for a while going forward, although 0 is presumably a hard lower bound (it is an index scaled so December 2003 = 100.0).
Luxury Consumption Index (LCI) in Free Fall
Unity Marketing’s measure of affluent consumer confidence stands at 40.3 points, a historic low, and luxury consumers are changing their behavior accordingly
Stevens, PA October 20, 2008 — Luxury consumer confidence as measured by Unity Marketing’s Luxury Consumption Index (LCI) continued its downward trajectory in the third quarter 2008. The LCI dropped 10.7 points to reach an historic low of 40.3 points, the lowest level ever since Unity started measuring affluent consumer confidence at the end of 2003.
I wonder how many of these luxury consumers are house rich and cash poor?
Or are hedge fund rich and cash poor?
Or hedge fund poor and house poor?
Everyone’s a comic these days.
Excuse me for a minute…
cover your ears, and close your eyes..
I hope they ‘eatshitanddie’ those uberwealthyfolks that want their tax cuts but think everything else is socialism.
OK, it’s over.
So you’re not a comic. It’s OK. It’s not for everyone.
Being a baby boomer, the pension outlook seems especially bleak.
Wall Street Journal
* HEARD ON THE STREET
* OCTOBER 30, 2008
Trouble Is Brewing for Pension Plans
By DAVID REILLY
Corporate pension plans dug themselves out of a deep hole between 2002 and 2007. Now, they are back in it.
OPM.
You must be in the first half of the baby boom (the 1960s generation). Aside from public employees, those in the second half (the stagflation generation) didn’t get penisions. Just 401Ks. My employer has a generous match of 1% of pay, for now.
And some companies are now suspending 401k matchs ( e.g. GM).
I think that will gain traction and in a few years, just like how pensions went away, 401k matchs will go away as well.
I’m sure the reasoning will be something like “they don’t have 401ks in India or China, why should companies pay for them here”?
We have never had a match. Work mainly for High tech start ups. One of them had some sort of match based on their profits, of which there were none.
Most of us from the saddle shoe generation (50s) changed jobs during the staglation era a couple of times per decade. We started with a pension plan, but left it behind for today’s groceries.
Don’t call me a Boomer since I was born in the early 60’s.
For Pete’s sake, my Dad didn’t even go to ‘Nam !
This is funny.
It appears that the Boomers have already given themselves a bad rep.
My Dad went to ‘Nam, so that makes me part of Generation X, not the Boomers. (The Boomers went to Vietnam.) If your Dad went or could have gone to WWII or Korea, you are still part of the Boomer generation, even if you were born on the late side of things.
I actually really like generational studies and topics. However, it is really important to remember that they are very arbitrary labels. Every generation participated in the housing bubble and is prone to the same moral failings and strengths.
I’m a classic ‘61 tail-end boomer baby, but with not as much chrome detail on my chassis, compared to earlier models.
The Fed just cut rates, so that should fix this problem in short order, right???
Wall Street Journal
* REAL ESTATE
* OCTOBER 30, 2008
Mortgage Plan Isn’t Cutting Rates
Borrowing Costs for Fannie Mae, Freddie Mac Are Rising Amid Debt Buyers’ Jitters
By JAMES R. HAGERTY
The U.S. takeover of Fannie Mae and Freddie Mac so far has failed to achieve one objective that government officials had envisioned: Borrowing costs for the two companies, which affect mortgage rates for consumers, are rising, not falling.
Did anyone really believe this was about anything other than bailing out bankers, and buddy’s, and brethren of these boneheads?
http://money.cnn.com/2008/10/29/news/economy/creditcard_bailout.ap/index.htm?postversion=2008102921
People who financially irresponsible get all the breaks. Forgiving credit card debt, unbelievable.
mike
Now we are saving the world? What the –
Boomberg
Fed Opens Swaps With South Korea, Brazil, Mexico (Update3)
By Steve Matthews and William Sim
Oct. 30 (Bloomberg) — The Federal Reserve agreed to provide $30 billion each to the central banks of Brazil, Mexico, South Korea and Singapore, expanding its effort to unfreeze money markets to emerging nations for the first time.
…
South Korea’s benchmark stock index rose by a record, the won surged and the cost of protecting Asia-Pacific bonds from default tumbled on optimism the measures will prevent the global credit crisis from upending financial markets. The Fed and China cut interest rates yesterday, followed by Hong Kong and Taiwan today. (Cont’d)
—–
I really need a hug. What the heck are we doing?
Leigh
Our export market depends on the solvency of our trade partners.
P’Bear,
The numbers are crazy.
Is this an effort to unfreeze LOCs?
Leigh
Yes and it is lucky we did it before the Japanese or Chinese. If those countries loaned, the US would have fewer trade partners.
Thanks Hoz.
The daily changes make me dizzy.
The article states swaps are in effect until April 09.
Any significance of that date?
Leigh
Hey Uncle Hank:
How about the solvency of a nyc dj getting enough holiday parties so i don’t have to go to the food pantry and beg for $10 hr telemarketing jobs
And what about us nice guys who didn’t do anything stupid and even being very frugal, i hit a bad time in my life.
where is my bailout? oops i don’t count..
You count, but you should consider getting another skill to hedge against times when there are few parties. I’ve seen your angst about the DJ job market for years, and in that time you could have learned something new–we can’t always do what we love.
I know a couple of DJs. They’ve all got other jobs. I even DJ’ed at a friends party when the real DJ canceled. It was fun. I used two laptops for music, a mixer with crossfader, and 3rd laptop to run the intelligent lights, laser projector and strobe lights. Didn’t do any video work because we were afraid projectors and his plasma would trip the breaker on top of all the other stuff.
But yea, everyone has itunes and an ipod now.
Once Microsoft gets malware under control it’s going to hurt the computer repair people too. In some cases it’s already cheaper to throw away the computer and buy a new one from Dell than to have service people come and clean it up.
Once Microsoft gets malware under control it’s going to hurt the computer repair people too.
Security will be an ongoing process. It will never be under control any more than any other criminal activity. It will merely at some point become ‘tolerable’.
Once Microsoft gets malware under control it’s going to hurt the computer repair people too. In some cases it’s already cheaper to throw away the computer and buy a new one from Dell than to have service people come and clean it up.
Isn’t that what recovery CDs are for? And if your HD crashes, they are a cinch to replace, especially on laptops.
And if your HD crashes, they are a cinch to replace, especially on laptops. HD’s are a cinch to replace on most laptops, might as well buy a duplicate HD, back up your working HD to your spare one & just swap it out with the HD crashes. Takes just 5 minutes, much faster than running a CD recovery.
‘Isn’t that what recovery CDs are for? And if your HD crashes, they are a cinch to replace, especially on laptops.’
I got a little portable drive for just that eventuality. I just back up everything once or twice a month, using that redundancy software, I forget the name, I got it off torrent, so it only recopies new or altered files, meaning it takes a very short time to backup, and then I don’t have to fiddle with screws and unattaching fiddley bits, which I would have to if I was gonna be messing around with the innards of my computer.
Also it’s sealed in its own little case so it can ‘withstand the rigors of travel’. AND–this is the adorable part–it has a matt red ‘velvety smooth finish’! That’s right, you can fondle it as a side benefit! And oh, I dooooooo fondle it, and murmur, ‘oh, little portable drive, you’re so velvety…’
I don’t even know where my recovery discs are.
Are you seeing a lot of people forgoing an expensive band for a less expensive DJ?
Kim,
Bands are only expensive when prefaced by “Wedding”. I’m not saying laptops and crossfaders don’t have their place ( just not in music )
I play in a band and we all have TUBE amplifiers! ( Analog baby! ) They weigh a ton and are prone to distortion, feedback and failures of all types. Wouldn’t have it any other way.
Thanks,
You know Weddings mean double the money because it really is double the work
Seriously If you average out the time musicians dj’s spend on a wedding its double what a high school reunion would be.
I could do 2 party’s for the same time and money as a wedding so it evens out.
‘i hit a bad time in my life.’
Sorry to hear it, nycdj. Hope things work out soon.
I think you should be a life coach and career counselor to the Wall Street types. No relocation necessary, get a small piece of their severance package and explain to them what life is really all about…. then you can write a book with all the unbelievable things you hear them say.
“But my daughter really needs that $10,000 birthday party with the clowns and ponies.”
“But my Lexus Lease isn’t up for another 2 years, where am I going to come up with the $1,800 a month for that? How can I show up at the Country Club in a 2006 American car. Oh the membership fee has to go too. i just paid my $50,000 fee last June.”
“I can’t work there, they don’t even have an in-house coffee bar.” or “Give up Starbucks, I’d rather starve to death.”
“Move out of Darien, are you kidding… you’re fired.”
Open a candle store, or maybe scrap booking. (what ever that is)
Scrapbooking is the hobby wherein you take a couple photos from your vacation or baby’s birthday party, paste them into a photo album, poke all kinds of little doo-dads like scraps of cloth, fancy thick paper, shiny pin things and beads and stickers (all imported from China) onto the page around the photos. In short, you convert 8 photos into a whole binder of low-level bling.
And I thought were supposed to eliminate clutter, not create it.
So scrapbooking is a kind of recycling. You put your trash neatly in a book, instead of just putting in a bag on the curb.
Ok, I think I get it. Part of the green movement.
Stay the course, make a new plan, things really do get better if you keep the faith and keep trying…
Our mortgage market depends on the solvency of our borrowers
Our credit market depends on the solvency of our lenders
Our tax revenues depend on the solvency of our businesses
You can’t bail out everyone. Well, I used to think that anyway.
“Our export market depends on the solvency of our trade partners.”
So the US is now going to pay foreigners to buy our exports?
Sounds like a winning strategy to me!
I believe the US is devolving rather than evolving.
Sounds pretty ridiculous to me too…
I guess you guys would have opposed the Marshall Plan, too?
Does the phrase “comparing apples to oranges” ring a bell with you.
CrackerJim - maybe it doesn’t ring a bell. When was the last time you saw your average shaped-meat-slurry-eating American eat an apple or an orange? Pretty soon you’ll have to come up with a phrase such as “comparing Whoppers to Big Macs” just so people have some idea of what you’re talking about.
maybe there was not enough airspace in the US for all the black helicopters.
World Oil Output Declining 9.1% per year.
From yesterday’s Financial Times:
World Oil Output Decline
“Output from the world’s oilfields is declining faster than previously thought, the first authoritative public study of the biggest fields shows.
Without extra investment to raise production, the natural annual rate of output decline is 9.1 per cent, the International Energy Agency says in its annual report, the World Energy Outlook, a draft of which has been obtained by the Financial Times.
The findings suggest the world will struggle to produce enough oil to make up for steep declines in existing fields, such as those in the North Sea, Russia and Alaska, and meet long-term demand. The effort will become even more acute as prices fall and investment decisions are delayed.
The IEA, the oil watchdog, forecasts that China, India and other developing countries’ demand will require investments of $360bn (£230bn) each year until 2030. The agency says even with investment, the annual rate of output decline is 6.4 per cent.”
Except that this was a leaked early draft, and the IEA is rather pissed about it getting out. I wonder who might have leaked it, and why?
The key thing to remember with oil is that the money spent to find new oil exceeds the payoff for the oil found by such efforts until the price oil is $400/$500 per barrel in 2008 dollars.
In other words, the market will sort it out when it makes financial sense to do so.
Fortunately for peak-oil theorists, this economic collapse will drop demand far faster than the fields are running out; therefore, pushing the peak oil problem off for another decade or more. Unfortunately, the consequences of economic collapse are about the same as the consequences of peak-oil.
Something to consider, without fed-created cheap money the demand for oil would have have risen so fast because people would not be able to “borrow” to start unsustainable businesses and exponential growth. The result is that peak oil would have been pushed far into the future and we would have more time to adapt as prices slowly rose.
The objective should be to reduce oil for petroleum at a slightly higher rate than production losses. Go nuclear. Use clean coal and NG and pump CO2 emissions into the underground caverns. Build hybrid cars that use batteries for the first 50 miles driven so that recharges come from the grid instead of gas.
All intensely easy to do with no disruption to the economy or standard of living. Use solar, wind & ethanol only when they become economically competitive (which they are in some applications today).
Link to a non registration site: http://www.iht.com/articles/reuters/2008/10/29/business/OUKBS-UK-OIL-IEA.php
They did not mention the Cantrell field in Mexico.
EXXON profited over 14.9Billion $$$ this quarter alone.
Now, isn’t there Something congress should be doing?
Perfect. At a 9% decline per year we will never run out!
This will end well…
NY Times
Government Said to Be Discussing Plan to Aid Homeowners
By VIKAS BAJAJ and ERIC DASH
Published: October 29, 2008
…The initiative could be the most sweeping government effort directed at mortgage borrowers since the financial crisis began last year. Under the plan, the government would agree to shoulder half of the losses on home loans if mortgage companies agreed to lower borrowers’ monthly payments for at least five years, according to the people briefed on the plan who asked not to be named because details were still being negotiated.
…
The program is intended to entice more mortgage servicing companies that handle billings and collections to reduce payments for homeowners by lowering interest rates, writing down loan balances or changing other loan terms.
So far, many companies have been reluctant to aggressively reduce payments because they are afraid that borrowers might default again or that investors in mortgage securities might file suit. (Cont’d)
Leigh
This is not socialism because…???
It sounds very similar to the government insurance for mortgages in Netherlands that nhz described about a year ago. As far as I remember in Netherlands the government pays the difference between the mortgage and the actual selling price, if the selling price is lower than the mortgage. The buyers can never loose. Party on….
Well, yes but with one major difference. This is an insurance plan, which is known at the time the mortgage is being created and often a condition of the loan.
This insurance is also limited to houses lower than a certain price range (EUR 250K I think), and the VI’s alwways try to raise this limit….
Dutch_renter
Thanks for the clarification Dutch renter. It still looks like an awful policy, one that has MORAL HAZARD written all over it.
this info is not quite accurate. NHG applies to mortgage values (not home values) up to 265K euro. Although the conditions state that you cannot piggyback loans, it has been known for years that people do this. I have read about 1 million euro mortgages where the first 75% is some crazy mortgage (ARM with no paydown) and the top 25% of the loan is covered by NHG; this really is as good as it gets. As the loan was accepted, the NHG would have a very difficult time refusing to pay out if the owners gets underwater.
Effectively the NHG is a free put option (not for honest owners, but certainly for everyone who wants to abuse the system; it is too simple). Incidentally, the Dutch median home price (plus closing costs) fairly accurately reflects the NHG ceiling; raising the ceiling is a sure way to pull homeprices higher.
another detail: officially NHG is an insurance fund and not a government agency. However, the fund does not originate in the commercial market, and most of its directors are (former) politicians. I have no doubt at all (just like the lenders that provide extra low rates for these loans) that it is ultimately fully backed by the government.
Income isn’t necessarily being redistrubted to the less well off from the better off, and it may be the reverse.
That is why I call it “reverse Robin Hood socialism.”
Because W says it isn’t.
Any questions?
What do McCain and his daughter have to say about it?
Are you implying an incentuous relationship between between Papa Mac and little Sally Louise, Professor?
Nothing that tasteless — just noting how “I’m so proud of her” sounds like something I would say about my daughter.
PB, isnt socialism because the uberwealthy have gotten theirs in the form of massive tax cuts.That is what the wealthy call
‘do as I say, not as I do’, or ‘I got mine’…
Something is so really wrong here in the US.
Where is McGyver?
And no one is talking about the other HUGE elephant in the room: Inflated property taxes.
Yeah, maybe that home is now listed at $250K, but the taxes were assessed a year ago at $600K. That is going knock out quite a few knife catchers, since underwriters look at PITI in terms of “today”. This may be a factor in the failure of some “loan modifications” as well.
Imagine all of the property tax appeals. If home owners are successful, then a bunch of moola vanishes from the coffers. Money vanishes, jobs and services vanish. The unionized city workers refuse cuts in pay, strikes ensue. Garbage piles up in the street and replacement workers are hired. These workers aren’t hard to find because so many people are desperate for work. Striking workers are furious, chaos ensues in the streets.
Good times, people. Goooood times.
Hopefully, I’m overstating all of this, and life will continue on it’s “happy thoughts, happy thoughts” trajectory.
Grey,
I have 2 words for you:
Saint Louis
In the early 80’s ( I think the cops were “patrolling” in their personal vehicles? ) City employees weren’t even sure if their paychecks would be cashed? )
Before any civil service union strikes, they should take a reminder course on what Reagan did to PATCO.
What I think many rank and file public workers don’t understand is that there is actually no money, and no way to get said money, to pay them for much longer. IOW, this is not a bluff, and it’s not a drill. You are either fired, furloughed or taking a pay cut.
And for that commenter who pipes up every once in a while to say, “But they have a contract …”
I say:
The average 5-year-old thinks they have a contract with Santa Claus.
Ditto Here Frank….I hope, wish, pray that they strike…It will be the first opportunity that I have seen to restructure muni goverment…
They need to cut (completely remove?) retirement and health insurance benefits for government retirees. Starting with the hefty pensions enjoyed by congresscritters.
Seriously
“They” need to get rid of benefits for everyone! Cut everyone’s pay! Why should I have to pay more just so some jerk can feed his kids. Let them eat ramen!
bingo- then go back to 1950 as a model for what services we actually need= very few
“IOW, this is not a bluff, and it’s not a drill. You are either fired, furloughed or taking a pay cut.”
From everything I have read on the budgets of Phoenix and many of its suburbs, this realization will occur by about March 2009.
I agree 100% and I am a former union employee! Sometimes, you just have to acknowledge the obvious. I also know union memberships are incredibly stubborn, therefore I definitely see strikes in the future.
Here’s an example of muni government lunacy. I stumbled across a online pamphlet that outlined health care benefits for city employees (or county employees, I can’t remember). Their premiums were ridiculously low (like $20 a month) and their co-pays were $10 per visit (or less!). A guy running for county board president pointed out that these benefits should be brought in line with the private sector (you know, to save money?). Well, he lost. Imagine that.
Of course, I’m in Chicago, so this is how it works. I think if I ran for any public office here, my campaign slogan would be “Honesty, Integrity and Common Sense: Let’s give ‘em try!”
Change you can believe in!
Vote for The name You Know!
I’d rather see the insurance companies take a cut in profits, first…then we can talk.
Why would anyone in the states of CA, NV, or FL or Detroit not take advantage of this incredible deal? In fact, I can see appraisers being asked not to hit a number, but come in waay below to get a loan balance written down. Those $500k houses in California, may indeed quickly fall down to $150k.
Oh, they already have…
http://www.marketwatch.com/news/story/Bankrate-Mortgage-rates-surge-three/story.aspx?guid={9C48E298-03F6-4740-AF31-2977D8477431}
Mortgage rates at a three month high. 6.77% for a 30 year fixed.
a 30-year high for 3-month fixed mortgages sounds more interesting
I’m pretty sure 6.77% is still on the low end of the scale for a 30-year fixed, if you look further than the anomaly of the last 5-10 years.
Yep.
http://research.stlouisfed.org/fred2/series/MORTG
I just noticed this as well. Rates are a lot higher compared to where they have been. This puts even more downward pressure on house prices.
Gnashing my teeth again…Why aren’t any of the political candidates talking about jail time, fines, or liens against Wall St. execs? Why aren’t there more lawsuits against corporate boards?
BINGO. I want perp walks for these thieving magpies.
To me these people are economic terrorists, and should be spending the rest of their lives in our detainment camp in Cuba.
We should be spending as much on tracking down these terrorists as we are spending to track down other terrorists, and put them to death or jail for life. They have caused far more economic damage than any extremist group could ever hope to cause. They did the crime, so now they should do the time. Take every stinking cent from them, so that their family and heirs don’t benefit from their terroristic actions.
It infuriates me that not only has our government tolerated this crime against society, they encouraged it and are now sticking the future generations with the bill for these terrorists and their families to live large.
Ken,
“They have caused far more economic damage … They did the crime…
It infuriates me that not only has our government tolerated this crime against society…”
-
The problem is that “They” and “government” are one in the same.
-
Always has been, by the way.
I don’t they are one in the same. They own the government. The US Federal Government is just a wholly owned subsidiary of Wall Street. Being the same would be giving too much authority to the government.
Public stoning is much cheaper and vastly more satisfying.
Yeah, but then you get guys in sandals who come along and mumble something about non-sinners throwing the first stone.
They suck all the joy out of public execution…;)
Couldn’t agree more, Ken.
And to think that a kid who steals a car might get years in prison, especially if it’s not a first offense (not that I’m justifying street crime at all!!).
Something is very wrong in this country.
You betcha. I mean, if Martha Stewart can do time, what about the greedy cretins who did real damage? No, I’m not defending Martha, though I did try out her shrunken head craft dealy this holiday, using apples that dry grotesquely after you carve noses and eyes on them.
Too funny. Yes, I agree with you. I believe Martha was made the “scapegoat” for Enronesque greed. Question is, what high-profile person is going to take the fall for this year’s scandals (of a much greater magnitude).
It will be interesting to watch.
Got pitchforks?
First let me state that I despise Martha. She is emblematic of all that is wrong with our society.
That said, Martha got screwed. She went to prison not for insider trading, but for lying about insider trading!
God knows I’ll be the one to throw the first stone come time to punish the guilty. But “lying about insider trading”?
I’m collecting up a bunch of my favorite stoning rocks. But as much as I detest her, I’ll not be wasting any on Martha.
Malthus Stewart?
I know you all are right, but it still ticks me off. As long as they keep us seperated, They have won. And even on this blog many, many people are very party oriented. All dems are bad, all repubs are good or vice versa.
Real change must start at the local level, but that is not nearly as interesting as the Presidential level.
They wouldn’t turn against their sponsors!
BINGO!
Why does anyone still think there’s a difference between the parties?
Oh yeah, the war.
The latte slurpin’ yups think one little election will wash away all our nation’s sins. Wrong. That petro-war is being fought for them too - whether they know it or not - whether they like it or not.
Everytime they hop in the Volvo to drop the kiddies off at school, everytime they fire up the furnance on their vintage restored SFH, everytime they hop a jet to visit the grandparents - this is their petro-war too.
The hypocrisy of this election is there for all to see - why even bother?
Wow. You have to be from the northeast. I have visions of running these vulva driving, sneaker wearing fools off the road.
Hey, now, grumpy. IIIIII drive my vulva carefully down the road*, in order to conserve precious petro-war products, and I don’t wear sneakers very often. Also I think there IS a difference between the parties. I hope so, anyway.
*That part’s a lie. I travel at about Warp nine.
Wow… You gotta fast vulva Oly… lmao
I heard today that the McCain Palin tickeit is a Western one. One that understands that Water and Managing Growth are actual concerns. Of course, the real concerns of the swing states are managing deflation and subsidizing U-Haul rates the hell out of Detroit.
I like driving vulvas…
“Oh yeah, the war”
LOL! Edge, you got it. What’s ‘really’ funny is when they assume the moral high ground w/ you ( not realizing you live in a rinky-dinky 1,200 s/f condo and walk to work! )
I haven’t been in a plane since 1995.
I think you were being facetious, but yeah, the war. I simply can’t vote for a party that has caused as many as 95,000 unnecessary civilian deaths. ( http://www.iraqbodycount.org/ )
Imagine, that many more people (not to mention our troops) would be alive if we would have had any other president…
Don’t forget the Civil War or Spanish-American War or WWI or WWII or the Korean conflict or Vietnam, or any other war that has ever taken place.
Yup. I hold the millions of deaths in WWI, WW2, Korea, and Viet Nam against the Democrats who got us into those wars too.
What an idiot.
Adam, your body count is way low. 600,000 deaths occurred so far in this needless mess in iraq.
Exeter,
“Adam, your body count is way low. 600,000 deaths occurred so far in this needless mess in iraq.”
And nobody points out that this “surge” only worked AFTER “ethnic cleaning” and massive population shifts.
The difference of course being that in the former to you mentioned, there was an actual purpose and real justification for going to war.
I saw a documentary in the lat 90’s, post gulf war 1 about a group of US civilians who travelled to Iraq on a peace mission.
They discovered pretty horrendous conditions there of course, but one thing I never forgot was that there were all these guys in the military who had not got a pay check in months or years.
This was all under Saddam.
Anyway, cut to 2002/2003 and we’re gearing up to go back into Iraq under the excuse that Saddam is the new Russian threat and will apparently bring about the end of the world with his massive cache of WMD’s(tm) if we don’t go and stop him.
My first thought was….”HUH? You gotta be kidding me. The guy can’t even make payroll for his military, and you want me to believe he’s built weapons that are a credible threat to the US from that distance?!?!”
This is why I patently refuse to accept the lame excuse that they had no way of knowing there were no WMDs in Iraq. Any civiliian moron could watch the same documentary(and I’m sure there was more than one) and figure this out.
Or else their grossly incompetent - which I certainly don’t rule out.
Either way, the whole bunch should have been impeached, tried, and jailed.
That is all.
SR
Yup. I hold the millions of deaths in WWI, WW2, Korea, and Viet Nam against the Democrats who got us into those wars too.
I’ve always thought if we stayed out of WWI and let the French/English and the Germans fight it out until the end that there would have never been a need for WWII.
Read up on the bombing of Dresden some time…
Tricking the enemy culture into blowing up their own civilians until they got tired of dying should be viewed as a victory, really. USA! USA! 120:1! 120:1!
True story: at a business conference about 3 months ago, I met a actresses who had a 1 women show to raise awareness about global warming. During it, she advocated that women withhold marital privileges to prompt their menfolk to do something about the environment.
For the sake of her 1 woman show, she was traveling around the country, presumably in something oil fueled, as I didn’t see the donkey outside. She seemed to also have failed to notice that she was hoping that she wanted masses of people to drive out of their way to see her show. (As I know they don’t have donkeys.)
What I would have like to have said her was:
“You’d help global warming (if it’s real) a whole lot more by staying home and farming/gardening. Is it possible that just you are looking for attention? Also, I’m thinking you aren’t getting much in the bedroom department if you are willing to give it up so easily.”
What I did was:
Smile and nod. That’s why business conferences bite.
I think you meant to say, “their owners.”
for raines or mudd
roflow
b/c they’re in bed together. Is it really that difficult?
NUMB
numb
number
numbers
The freaking spokes in the economic wheel are broken.
This is the part of the stagecoach ride where we hit the rock and flip over.
“Encouraging” economic numbers should now be put in jars for the Winter.
The freaking car is totaled and ready for the scrap heap. But that shouldn’t have much affect on prices, as the panic is pretty much over now…
You must be a happy and contented bear today to think the panic is pretty much over now. For the next few hours, maybe.
My window for panic seems to be wide open.
I must be a jumpy bear today.
Sorry — forgot to use the sarcasm tags…
Thought so, you Jumpy Bear tricker.
Comment by Professor Bear
…that shouldn’t have much affect on prices, as the panic is pretty much over now…
-
Yeap, CNBC just said that also, must be true.
Could someone please explain why this program does not constitute Republican socialism for the rich? ME CONFUSED.
Personally, if we are going to go for socialist measures, I would prefer to have Democrats in charge of them, as they are the acknowledged experts.
Wall Street Journal
* REAL ESTATE
* OCTOBER 30, 2008
Relief Nears for 3 Million Strapped Homeowners
By MICHAEL R. CRITTENDEN and JESSICA HOLZER
We’re all one party now. Get used to it.
I heard talk about this, I assume it’s the same thing, on NPR this morning. The talk was that banks would change the terms of the loan to as low as 3% (I didn’t hear anything about changing the principle) and the govt would gaurantee the loans.
If you get something, you got give something. I think a fair trade for this preferential treatment should be that the homeowner has to give up the ability to walk away from that debt in a bankruptcy. If you get this deal, the trade off is you HAVE to pay it off.
How do you enforce that? Debtor’s prison?
If we’re going to come up with a “fair trade”,I like the idea of not being able to profit on the sale of the house. Any profits go back to the taxpayers.
Of course, that assumes “profits”…
The house itself becomes the debtor’s prison possibly. I can’t imagine a government guarantee to the bank without a hook in the mortgagee. Would the government forgive your debt in a short sale, or would they handle it like the IRS handles back taxes owed? No program like this would be designed to “help” consumers, rather to help banks. Call it The House Arrest Program.
The way you enforce any other debt. I think the same rule exists for student loans, you can evacuate that debt just by filing bk. (someone correct me on this if I’m wrong, but I’m pretty sure its at least more difficult)
Granted, that doesn’t mean you’ll always get the money back. But you can garnish wages, tax returns, etc.
I don’t think profit is gonna happen, so it’s not really giving something up.
How about this, if you sell the house, and you get anything above the outstanding loan amount, that goes back to the taxpayer, up to an amount that equals the original loan terms (or maybe a percentage or it could be included as ordinary income).
Student loans are, for the most part, not dischargeable in bankruptcy. They are guaranteed by the Fed’s so you can guess why they didn’t want them discharged in Bankruptcy….. Non-guaranteed loans now require an 800+ FICO score.
If we make this deal, we must get any upside if the house appreciates, they shouldn’t be able to walk away with extra benefits of being bailed out. This is already an element of many state/fed home improvement or rehab loans that phase out over time.
Yep, the taxpayers should be entitled to all price increases up to the original loan amount, PLUS interest.
If you don’t want to read about the bailout bill, skip down to where the bullet points. Last week Congress passed HB 1424, the ‘Emergency Economic Stabilization Act ‘ As you’ve probably heard, it was a bit more than just the bailout bill. I’ve gone through all 451 pages. Here are some highlights:
* Sec. 103: The Treasury can also purchase mortgages on apartment buildings. To my knowledge, those who own apartment buildings aren’t usually in danger of having their house taken away.
* Sec. 110 allows the regulators (there is a whole new bureaucracy being formed) to make any change to any troubled mortgage, including giving the property away.
* Sec. 116: Keeps the bureaucracy in place until the last asset is sold, or the last loan is paid.
* Sec. 122: Raises the debt ceiling to $11,315,000,000,000. For historical reference, we broke the $1 trillion debt limit in the Reagan administration. That runaway borrowing is what George H.W. Bush called Voodoo Economics’ Last week we borrowed another trillion in a day.
* Sec. 132 suspends FASB 157. That’s what made banks show the real value of their assets on their books, even if it had fallen to zero. That is no longer necessary, (but we WILL form a commission to decide later on what they should be showing to their shareholders, presumably something other than the actual value of their assets.)
* Sec . 136 raises the FDIC published coverage limit to $250,000 per account. What they haven’t mentioned is that this higher ‘coverage’ expires in 15 months, and the FDIC is ordered NOT to adjust the insurance for these new risks. That law actually just orders the FDIC to change the number $100,000 to $250,000 everywhere, nothing else.
“* Sec. 110 allows the regulators (there is a whole new bureaucracy being formed) to make any change to any troubled mortgage, including giving the property away.”
Is there a protocol for becoming the recipient of property that is given away?
“Is there a protocol for becoming the recipient of property that is given away?”
Yes. If you name begins with “Senator”.
Is there a protocol for becoming the recipient of property that is given away? Connections, lobbyists, campaign donations, things along that line.
We went through some of the fine points in one of my acct classes recently. One of them is that any company borrowing more than $X dollars from the treasury based on this bill can’t pay their CEO and I think it was 4 highest paid executives more than, I think $500,000. There was also some vague language about removing golden parachutes.
My teacher went on to make the point that this could have the effect of causing the best talent to leave these companies at a time when they are needed the most.
I responded by pointing out that the “top talent” had run these companies in the ground and if they leave, the companies could higher truck drivers and get just as good results.
In fact, I said, I would be willing to run one of the companies into the ground for a measly two or three hundred thousand dollars a year, and would leave the class RIGHT NOW if that offer were pending, performing as well as the current bunch of clowns and saving the company money in the process.
I probably shouldn’t have said anything b/c I’m struggling in that class a bit and might need her help for the A. But she likes me and I couldn’t resist…
“I responded by pointing out that the “top talent” had run these companies in the ground and if they leave, the companies could higher truck drivers and get just as good results.”
You rock! Go to the head of the class!!!
“But she likes me and I couldn’t resist…”
Hot for Teacher?
Hardly, she’s old enough to be my mom, at least, and…ok, I had some other stuff typed but I don’t want to be crude. Let’s just leave that at “no.”
But she’s a pretty good teacher most of the time, and I’ve found that maintaining cordial relationships with professors seems to help when you are right on the edge of a grade…
Damn. That had potential. Sexual tension in class arguing about the social and economic implications of MBS and CDO, office hours, the whole bit. Oh well.
Eventually the “top talent” meme will turn into the “might be better off hiring a chimp” meme.
Rancher,
“If you don’t want to read about the bailout bill…. I’ve gone through all 451 pages….”
-
This is an example of why this is the best blog EVER.
-
[Tip my hat to Rancher]
I think a fair trade would be elimination of all Social Security payments for that person.
That way we would help out the current situation and help out the future Social Security issue.
I like this recommendation…
Yeah, but when they retire and they are even poorer, we will have to bail them out with yet another (new) government program for those folks who don’t have Soc. Sec. (could be ALL of us).
I am currently looking for houses to buy. I would like to move.
I wanted to move 5 years ago, but the bid wars kept me from buying a new house.
The current owners outbid me. They really couldn’t afford to outbid me, but they thought if they couldn’t refi in a couple of years, they could just sell the house they “bought” to someone like me for $100,000 profit.
Now, the govt. wants to reduce the payment so that the total bill is less than I would have paid 5 years ago.
How is this in any way fair??
Can I get a 3% loan for a new house to help keep the prices up, or is this just for speculators?
Please help me understand this thinking.
Good rant, and I agree. One positive if it happens is that prices fall further, lending gets tighter. I guess that’s two positives.
There is no way to explain it…It is what it is….
Nothing like a nice mortgage do-over. Given that mortgage losses will be in the trillions - yeah I’m sure this will only end up costing $50 billion.
I wonder if folks (like me) with very low LTV will be eligible? Something tells me no.
Absolutely not, responcibility is punished, take risks…
Ha ha - yeah.
I’m all for taking risks, though generally when I skydive I like to bring a parachute along. This bailout is like the government standing on the ground with 1000-ft-wide tarp to try and catch all the skydivers that just didn’t think to bring a parachute.
Its a shame they might miss a few…. splatttttttt.
No, they thought about it, but were assured by REALTORS that it wouldn’t be necessary: They could pick one up cheap before they hit the ground.
How would quantitative easing work in the US? Did it work in Japan?
Will it make a difference if Americans decide to pay off/service debts, save, and live within their means?
The question has been posed many times,but now living in bizarro world I am thinking …. Tell me again why I shouldn’t max out my credit cards, buy a year supply of food, PM’s, and an a rifle or two?? I will demand the Govt. pay off all my debts, and reimburse my stupidity, or is that a foregone conclusion as how are they going to repay anything going forward?
Will it make a difference if Americans decide to pay off/service debts, save, and live within their means? If that happens, the fabled US “consumer economy” will collapse. There is no easy way out.
We got notice yesterday from the LL that they are going to let go of the alligator.
Actually it turns out to be a pretty sweet deal for me. As of the 1rst I’m rent free (squatting) with written notice by the LL that they don’t expect rent. NOD hasn’t been posted yet.
I may be looking at 6-8 months rent free. If the socialists in Excremento do anything additional to help poor renters who are getting thrust out into the night by cruel heartless banks, who knows?
Should I change my name to squatting dude?
‘Should I change my name to squatting dude?’
This is 2008. Do whatever you want,lol.
Congrats! You’ve just won!
What are you talking about! I’m a poor bitter renter who will be cast into the cold dark wilderness by “the man”.
Or maybe I’ll just wait for the bank to pay me to leave and go rent another sweet abode. LOL!
Maybe you can negotiate with the bank to pay YOU while you manage the place for them.
I was just talking to my sister. Her brother-in-law hasn’t held a job over $10 an hour in years, and has intermittent spurts of unemployment.
He lived in a small house for close to a year. Was supposed to be paying rent, but he never paid it.
Somehow, the owner offered to sell the house to him, and he was able to get a loan to buy out the previous owner.
He’s been in the house as the “owner” now for 10 months (after living rent free for 9 or 10 months). As you can guess, he never made any mortgage payments.
He just got evicted, and he’s looking for a place to live, dropping hints to my sister and brother-in-law that he’d like to move in with them. He’s now working part-time at a convenience store, and driving a taxi.
All I could say is “wow”.
LOL!
The answer is “NO!”
Just think…your BIL got to live rent-free just because he was a loser, and all of us “responsible” renters are paying full fare and keeping up on credit card payments.
This is the first time in my life when I’m actually wondering if we should just spend our money on “stuff” and run up all our credit lines (lots of unused credit! could be fun!) while living the high life.
Then, I can be a “victim” and default on all my debt, too. Just seems like the fair and right thing to do these days, as the govt is practically begging us to do this.
“Excremento”
Sacramento was founded in part by the Mormon pioneer Sam Brannan. My longstanding conjecture has been that the name was a reference to the Mormon church sacrament, but I have no reference on which to base this.
P.S. Don’t miss my Prop 8 tidbits in yesterday’s bits bucket.
Its also the Spanish word for Sacrament.
Yep, I think Brannon refused Brigham Young’s order to gather to the Salt Lake valley and got excommunicated.
He went on to the governorship if I’m not mistaken but died penniless.
Just another example of a mormon being forced to do things against his will, I guess.
He followed the profit, not the prophet. He was California’s first millionaire before he became destitute…
My great great grand dad was at Sutter’s mill when they found the shiny yellow stuff in the stream. He and others work working over the winter after having been part of the mormon battalion that cruely confiscated upper California from the Mexicans at the end of the Mexican/American war. Legend has it he brought back $10,000 in dust and nuggets to ol’ BY in SLC.
He didn’t follow the profit, instead followed the Prophet, and died at 83 YOA after a long succesful life of pioneering and ranching in southern utah/northern arizona.
BTW, the mormon battalion’s march from Missouri to San Diego during that war remains the longest infantry march in US military history, and the only battel they fought was with a bunch of bulls. Apropo I think.
Sweet deal.
‘Should I change my name to squatting dude?’
Please don’t.
Yeah, we might think it’s a reference to some “other” kinda stinky activity.
I am a bear, after all.
I think you should call yourself a “Federal Housing Maintenance and Security Engineer”.
Gotta say, your LL was real nice to you, and very ethical about it.
Most LLs would just pocket the rent while not paying the mortgage, and wait for either the foreclosure notices or the sheriff to inform you of your need to move.
You got a good one there…
Agreed, but we have been ideal tenants as well.
Of note is that I would characterize my LL as a “strong hand”.
He had tech bubble money and the loan on this house had been used to buy acreage on the coastline in central america, where he fishes and fights with the monkeys over his dog food.
I’d like to think we are beginning to see the strong hands start to fail.
OK..so the banks are going to delay “the worse is yet” to come by 5 years?…
And why don’t we just bring back subprime and start the whole party all over again!
“OK..so the banks are going to delay “the worse is yet” to come by 5 years?…”
Good luck.
MANY FB’s are going to bail anyway. They could’nt save a dime before they bought and won’t after. Even if they can make the adjusted payment, they’ll walk when they figure out #1 and #2 below:
(1.) First home maintenance event will deal a death blow to their dimly lit skulls, i.e., they’ll realize (to their horror) there’s no landlord to call to fix the water heater, roof leak, etc.
(2.) There’s no more “funmoney” credit available to buy all the toys and other assorted crap anymore.
I never forgot listening to a ditz friend of my Mom’s complaining they had “more money to do stuff and buy stuff” when they “rented” and how they hated spending all their money on their new house (1990’s). As expected, Ditz and Husband divorced and house foreclosed, endgame.
DOC
NY RealTurds numbers for sept08…. check out the negative sales volume for Sep06-Sep08…. negative 50% in Warren County!! Upstate realturds and their money grubbing minions starving….BWHAHAHAHAHAHAHA
http://www.nysar.com/media.asp
Good thing volume is only off 10% and prices are up 22% in my county
Not enough sales to really be statistically significant though. I do wonder what the Realtors are going to do up there. Who would have thought Lake Luzerne would ever freeze over….
PS - good to know the headline is that this is just the “typical seasonal slow down.” Isn’t that the reason they compare month to month, year to year in their “report.”
And you can take that to the bank. Cuz your realturd said so.
My poor realturd found a new “career” this year…. At least I am still getting all the new MLS listings, price changes and sales for a 45 mile radius and $100-200k price range that she signed me up for in 2005. Just don’t try to e-mail her, she no longer exists in the MLS system. This is very good info to have, even if it is only 10-15 properties per month. I hear the Great Escape will be hiring next Spring.
New career? That’s good news depending on your perspective. I’ll stand by my own forecast that counties bounding the northway east to NH have already resumed their long term economic decline that no amount of happy talk, cheerleading or intangible, immeasurable “gonna happens” will counter. The brief departure from reality is over but most folks there, including my extended family are desperately holding on to any koolade driven intagibles that comes their way which is more and more infrequent and met with increasing skepticism. They know where they were and deep down know that nothing has changed fundamentally. Very much the same way that you never know light if you’ve never experienced darkness. They’ve gone headlong into economic darkness before but I’m not sure this time is any easier for them.
My Yates is down more than your Warren!
I’ve been on vacation for a week, so - apologies in advance if I re-post things that have already been posted.
Census data for Q3 is out. Vacancy rate still at 2.8%.
Given that the historical norm is about 1.5%, this to me solidifies the point that prices will continue falling still for a long, long time. Given the drops that have already occurred - it’s looking more and more that not only are we going to overshoot on the downside, but overshoot big. Like we may get back to mid-90’s prices even *without* adjusting for inflation.
And fed rate cuts be danged BTW. Despite the Fed’s cut - mortgage rates still shot up once again the last few days, now above 6.3%.
Link to census vacancy data:
http://www.census.gov/hhes/www/housing/hvs/qtr308/q308tab1.html
and much more:
http://www.census.gov/hhes/www/housing.html
This 10% cut number is coming up a lot lately…
American Express to cut 10% of workforce, or 7,000 jobs
By Wallace Witkowski
Last update: 10:17 a.m. EDT Oct. 30, 2008
Nothing like some deep cuts to stem the bleeding.
Amputation is also good, as severed limbs require no blood.
10% cuts = decimation of jobx (thx to the poster below who pointed out the etymology below)
“The Risks are coming home to Roost”
The Government has spent itself into illiquidity. Not even printing money will stop the momentum of this correction. And it was Federal Government’s meddling that caused the market to become distorted in the first place. If Mortgage Underwriters would have believed that they were going to be on the hook/accountable for mortgagees that lacked the capacity to pay, then they would not have granted the mortgage, in the first place (I know, I know, old news!). I see all of the credit excesses having their root cause in Government programs that intimated “Government Guarantee” and “Bailout”. Whether it was Fannie/Freddie/Ginnie, or artificially low interest rates……now the final guarantee, the FDIC and capital of the US Government are being tested.
The current market gyrations, extraordinary at best, are perfectly consistent with the gyrations of 1929-1934. I am amazed at how short our collective attention span is, with regards to each Wall Street move; with each upward correction there is a plethora of articles and spin about how we have reached to bottom, or how the current one-day session points to a return to upward market momentum. If we simply look at the entire history of the Trading Markets, it is easy to see that there is significant room for downward movement. And, while the rest of the world has turned a short term blind-eye to economic fundamentals, I say that those same fundamentals will eventually have their way with us (much like water coming over the dam!).
If the majority of new home prices are unsustainable by current wage conditions, “all the money in China, and the US”, will not be enough to prop up prices, and we will all (we-the people of the United States) go broke trying to prop up prices.
This is such a simple economic idea that it pains me to see why our elected officials cannot or will not “get it”.
I think the real issue is more political-”how do you manage entitlement programs (Social Security/Medicare) in a deflating economy-tax environment?” Or, how do you tell 40 million people that the Goverment is reducing their benefits next month and next year? With Inflation, Government officials can act stupid, because the lost of real income is not as easily definable. With deflation it is obvious; less tax revenue = smaller SS checks!
Negative cost of living adjustment for entitlements, makes sense. Time for a major revision to the CPI. Energy and house price to be reintroduced?
The US all in all is not insolvent BTW, far from it. The government will have one hell of cash flow problem, but we are not insolvent.
I sure hope your correct, “Blue-Skye”!
At what point do we reach insolvency? If we take in $2.5 Trillion per year, in tax revenues, and have $11 Trillion in Debt, and are committing Trillions more, at what point do we reach the “tipping point”?
The “Debt” conversation has been going on now, more or less, for 30 years, as the US Government continues to spend more, each year, than it takes in. PHD’d Economists have dismissed the damaging effects of deficits, in the short run, but as someone trained in traditional Econ theory, I know that everything matters in the “long run”.
The question I have for you, Blue Skye, and the rest of our bloggers is this: when will the “long run” truly come into play?
Or said another way-when will the affects of Deficit Spending finally run their economic course?
Never mind downward adjustment of entitlements, Soc. Sec recipients are due to receive a 5.8% increase in January. Yes, 5.8%. Talk about budget busting when we can least afford it.
You forgot the other side of government involvement.
Equal Opportunity…blah, blah, blah………..racial quota measurements by government agencies. Less Black or “hispanic” or other “minorities” have houses. PROOF that mortgage lenders are racists. Lend or be sued.
Credit history shows slow pay or no pay? bad credit risk?
Too bad. Lend or be sued.
Lots and Lots of fraud in these areas. Lots and lots of defaults.
The government is your friend.
This bottoming of the l-t T-bond yield cycle is marked by violent seismic volatility.
Banks Reassigning Use of Bailout Money
Note - the title of this article changed from the above in the print version of the WaPo, to “Banks Weighing Other Uses for Bailout Money” in the online version.
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/21/AR2008102102520.html?nav=rss_business/industries
Maybe it’s sinking in! There are real victims and real people suffering, and then there are get-rich-quickers who want a bailout of their own!
Barack seemed to get this!
None of the folks Barack featured in his infomercial last evening were “losing their homes” because they bought homes they couldn’t possibly afford.
One couple had a paid-up house and was hit with crazy medical bills, and the single-mom with three jobs was a widow.
Meanwhile, McCain is still going around promising to get house prices back up.
“One couple had a paid-up house and was hit with crazy medical bills…”
that couple has five children, seven grandchildren and two great grandchildren.
i would get a second or third job to help with my parent’s medical bills…i actually save 50% of my income in anticipation of that event.
call me crazy i guess.
Check the constitution, there is an inalienable right to procreate, have 3-4 kids before you hit 20, and have your kids have kids before they are 20. Makes for a fun Thanksgiving.
I don’t think that was this family (they wouldn’t used them as an example), but around here, such a plan leads to increased monthly assistance payments, housing subsidies and free health care.
i wasn’t saying they procreated too much.
my point was that there are a minimum of 6 adult children of these parents that should be taking care of them.
Yesterday was the worst day news wise.
When will we have some ok news?
I spent an hour trying to find my Visa card lastnight.
I guess I gotta use it or lose it.
What if we save 2 million homeowners with the new plan and they have no money for food, prop tax. and regular bills? Will we pay their bills too?
Zero rate for savers is diabolical.
10% reduction is where the word decimate comes from.
The Romans would execute 10% of a legion if the behaved cowardly.
I never understood how that decimation habit worked. If you saw the chopper coming towards your soldier line, wouldn’t you all start counting and shuffling around real fast-like? Or, and here’s an idea, everybody just run away all together into the forest.
Oh, wait. I guess that’s why…hmmm. Difficult.
I thought that was where “dropping a dime” came from!
“The beatings will continue until morale improves.”
I know not a lot about world-wide shipping, but what i’ve read in the past week has been frightening…
Tiny percentages of goods are getting through, because letters of credit aren’t available, and the cost of getting such an agreement has gone up plenty most recently, as nobody trusts anybody anymore.
All my life so far as far as shopping goes, i’ve had an amazing variety of imported goods offered to me, and in most cases, the quantity of things for sale was 10-deep per product in the stores-a vast cornucopia of consumer goods…
In a few months we will start to see empty spaces on shelves, and then a few months later, yet even more gaps, a consumer-driven country’s last gasp.
The end of the global construction on credit extravaganza. No money; no steel, no cement. You want these things? We want to see your cash.
Oh, and no wheat.
Shipping speeds sure are getting faster, that’s for sure.
I’ve dealt with the same pool of suppliers/vendors for about five years now. My orders are placed at regular intervals and spread throughout the year. Just one year ago it would take the notice of shipment anywhere from 1 to 5 days to pop up in my inbox. Nowadays those shipment notices pop up the same day and a 1 day wait has become a rarity.
Somehow I picture a whole lot of really slow warehouses.
Think about the Chinese and their dilemma?
Because the RMB is pegged to the $, their currency is getting much stronger against all other currencies, making new sales in a dying market all the much harder, and the only option is to go back to the well of USA consumers, as if they want any more Yankee Dollars?
lose-lose-lose situation
That’s why the notion of “The Great Decoupling” is utterly preposterous. If we go down we’re taking them all with us - and they know it.
Now the $64 question is who blinks first?
Let’s see if they start selling some of their massive US Treasury holdings. My guess is they won’t, especially with the Euro collapsing and potentially disappearing if things get bad enough. It may sound crazy, but I think that if it gets really bad, there will be in-fighting and the Euro could become history.
In ye olden days before letters of credit, ship captains would only exchange their cargos for chests full of gold doubloons & pieces of eight, assuming they made it to port without being molested by pirates, arrh!
That’s why governments around the world are running around guaranteeing everything. It’s part of the whole global deleveraging thingy. There is a massive failure unfolding.
“letters of credit”
is that the same thing as a check guarantee?
Sort of.
Does that mean I should rush out and get my flat panel?
I was hoping for half price at the liquidation sale.
My father’s family is from a former Soviet Bloc Party country, and when my mom & dad would go there (perhaps 12 trips 1974-88), the money was worth nothing (mom told me tales of constant offerings in hushed tones of citizens that caught her accent, her Dollars for their money, @ 3-4x the ‘official’ exchange rate) a great deal for an entrepreneur, except there was nothing to spend it on, as in the shelves of stores were mostly empty.
The bright spot for the little guy caught in this nightmarish economic vise-grip was what were called ‘hard money’ stores that had quite a variety of goods, but only for sale if you possessed western currency, which is why the locals hungered for her Dollars…
Russian Rubles or Polish Zlotys didn’t cut it, sorry.
How little was available in the stores?
It was standard operating procedure my parents to each pack a roll of toilet paper in their luggage, before embarking back to Bohemia and Bratislava, back in the day.
==================================================
In a bizarro-like situation, I feel certain Americans will be feeling the same symptoms as those stuck in the old country, just a little over a generation ago.
Sometime soon, our money will be in disfavor and our store shelves will be empty, as once the supply in the corporate warehouses false to the floor, and no more consumer trinkets are forthcoming from those that made their livelihood selling the fruits of the labor of other people’s work, only will it dawn on my countrymen, what we’ve become…
Aladinsane, believe it or not, but my father told me that when he went as a tourist to Moscow in the early 1980, he went into a grocery shop to buy some salami. After waiting for quite some time in line, he ordered a kilo of salami. The lady behind the counter weighted it for him and after that just hand it to him as it is – forget about a shopping bag, it was not even rapped in paper. Imagine that, they did not have even wrapping paper in the store.
I was in Yugoslavia (admittedly not really part of the Soviet Bloc in totality, but certainly in mindset) in 1982, and during my stay in Belgrade, it became obvious that the entire country could have been named “Hair of the Dog”, as everybody seemed to be schnockered 24/7.
Europeans have always drank more than Americans in public, but the Yugos took it up a few notches in my estimation.
I remember going into a store and looking at prices of things, and a liter bottle of vodka was around a Dollar, vs. a 12 inch black and white tv, for around $300.
You can buy a veritable shatload of vodka for $300, sorry telly.
We caught a train out of Hellgrade to Vienna, and were in the cars towards the back, and watched the going away procedure of people left behind, throwing a full bottle of something alcoholic onto the pavement, as the train was pulling out of the station.
I must have watched 20 bottles explode on the ground, as I was seated on the inside-looking out @ their most unusual bon voyage custom.
When Yugoslavia came apart @ the seams less than a decade later, I wasn’t surprised the least.
Until Zimbabwe came along, Yugoslavia was the poster child for hyperinflation in the late 80’s and 90’s…
Alad, I thought your father was skiing in Switzerland eating three squares a day and living off of gold coin after WWII, while those with “fiat money” were roaming in hungry packs of misery? I seem to remember you relaying a story like that about two weeks ago when a question was asked about currency. Now they lived in Soviet bloc countries? A bit unsure, how come with all that gold treasure they did not stay in Switzerland, but left for an oppresive country?
My father got away as communism spread it’s wings across Europe-just after World War 2 ended, first to Switzerland, then Paris and eventually New York and points west, but the rest of his family wasn’t so lucky…
They got to go nowhere fast for forty years.
My dad was sentenced to death in absentia(his crime being fleeing the country), in the really bad first decade of the iron curtain, when Stalin ruled absolutely, so he had to wait almost 30 years for things to chill sufficiently, to return home for a visit in 1974.
Alad, thanks, how sad, that story really adds a human element of how awful things were under the communist rule. Glad your father was able to escape that tyranny. How sad that it separated him from his family for 30 years.
For how much longer can the PTB keep up the false appearance that the Precious(TM) is in a tailspin?
The Gold chart is frightening. Lower lows, violations of moving averages, general mayhem. I told you all to get out when I bought GLD
Dennis Gartman said this morning that his expected it to go up, but that 850 was it…. I hope he was wrong.
850 and it would still be in the slot that is set up. Whatever the spike, it looks like the next stop is 650. The floorboards at 700 are busted. All commodities are telling the same story, pre bubble prices are approaching rapidly. Look at the technical charts on Kitco. Look at ten years. Huge double top and it is busted, just like the stock market. The speculators are screwed.
If you bought PM for insurance, this price stuff is meaningless. If you wanted to get rich, you might get hurt.
I don’t actually “hope” that he is wrong, but I expect he probably is. That bounce off of $680 doesn’t look like it has much rocket fuel and the downward slope has been astounding. It is such an awful time to be a determined speculator, in such things.
don’t fall for the Comex Chimera Ruse, ‘bugs.
FWIW - a dealer told me some interesting stuff yesterday - most was over my head, but something to the effect that the banks have about 130 million or so options (way above normal for them) and most were set to expire next week. He said probably there would be some serious price action coming. I’m not well versed in the options market, but it sounded scary.
Oh also he wouldn’t part with any gold for less than $900; being that quotes such as what you show above are for paper gold ETFs and not the real deal. There is serious manipulation going on in the paper PM markets.
Saw the same thing at other dealers - no one who actually has bullion (very few) are willing to part with it for way way above spot - like currently about $850 min.
In other words - ignore all online spot prices at this point (unless you’re willing to pay big bucks for the true market physical PM prices).
Slip Sliding Away
I don’t know if we are nearer to our destination or not.
I do believe that of all these trillions of dollars the Central bankers are printing and spreading,
a whole bunch will find its way to gold and silver.
Anytime you print trillions you run the risk of fraud, waste, abuse, and corruption.
It would probably be cheaper just to dump mountains of cash in a public trough in the middle of every town in the country.
Oh wait that’s been the Democrat’s plan all along
It seems like it’s going into the stock market.
from schiff’s website:
“However, with the possible exception of countries like Switzerland, politicians the world over are likely to create international rules designed to preclude the holders of gold from making “windfall profits.”
Therefore, holders of gold should renew their efforts to ensure their holdings of gold are as isolated as possible from the long, greedy arm of the law.”
interesting times.
“Oh wait that’s been the Democrat’s plan all along”
Crap. Here we go again…
dam dem darn demucratts. Look whut dey dun fur da last ayte yeers.
How does the Government prevent collateral damage to housing/mortgages from people who are currently paying their mortgages on-time, but who see their neighbor get a deal, effectively lowering the cost of their home 20%, and then decide to stop paying their mortgages so that they can get in on the “Deal of the Century”?
As Denninger is arguing?
http://market-ticker.denninger.net/archives/636-Stop-Paying-Your-Mortgage-Today.html
Kind of makes you want to buy a house today and default immediately.
The only way I can see to avoid such unintended consequences is to have a cut-off date; for example, trot out such a deal, but with a restriction that it is available only to people who are already behind on their mortgages by some date that is in the past. That would be grossly unfair to those who fall behind due to the coming economic hard-times, but it could be effective in preventing the I-want-the-bailout-too stop-pays.
“How does the Government prevent collateral damage to housing/mortgages from people who are currently paying their mortgages on-time, but who see their neighbor get a deal, effectively lowering the cost of their home 20%, and then decide to stop paying their mortgages so that they can get in on the “Deal of the Century”?”
Pass a law immediately making all outstanding loans recourse and non-dischargable. Debtors who can’t pay it back (or at least a certain percentage) forfeit their rights to collect (but not their obligation to contribute to) social security - which might help to solve the SS problem too.
Just answering your question. Obviously in this political climate you’d never anything close to that past Congress.
Was talking to my other sister a couple days ago. She mentioned that her sister-in-law works for a small insurance company (for some reason, central Wisconsin has a lively insurance industry).
A couple of years ago, the owner of said insurance company sold it to (guess who) AIG. Her observations were that since the AIG takeover, discipline went out the window and they started spending money like drunken sailors.
Why am I not surprised?
I’m not surprised a bit either. This is one of the unintended consequences of the bailout attempts.
One of the societal trends making us vulnerable is institutions that are “too big to fail”. But the biggest effect of the bailouts to date is to result in ever-larger institutions.
Where there is business advantage in being bigger (and we’re giving them more and more incentive), the organizations will continue give us what we are incenting them to give us.
This is one of my favorite aspects of the meltdown—-favorite in that I savor the irony.
http://en.wikipedia.org/wiki/Image:Maprl.png
This is an interesting map for those who are considering expatting or repatting, or patting; during the challenging times ahead.
Alad, looks like NZ is not a bad choice.
Mortgage rates spike.
http://www.msnbc.msn.com/id/7148582/
But the charge accompanying the article shows rates at and over 7.0% in 2002, well above the rate today 6.46% this week that rates “spiked” to.
That’s for 30 years. I paid 7.0% for 15 years in 1994, and felt lucky to get it. A short time before that I had gotten a two-year Treasury Note for 9.5%.
Anyone here think bonds are cheap at current rates?
You were fortunate to get 7% in 1994. I was paying 9.5% on a new note in 94 and considered myself lucky.
A root cause of the spike:
Treasuries Fall on Debt-Supply Concern as U.S. Economy Shrinks
By Dakin Campbell and Anchalee Worrachate
Oct. 30 (Bloomberg) — Treasuries declined, led by 10-year notes, amid concern the Federal Reserve’s efforts to unfreeze credit markets and prop up the financial system will result in “a huge amount” of government debt being issued.
What difference do three zeros make between friends?
• Treasury may borrow $1 billion to cover bailouts, dealers say
Treasury sales could top $1 trillion to fund bailout
U.S. could also bring back 7-year note, do more frequent sales
By Deborah Levine, MarketWatch
Last update: 1:50 p.m. EDT Oct. 30, 2008
NEW YORK (MarketWatch) — Major bond dealers say the United States may have to issue more than $1 trillion in debt during its current fiscal year, by far the most ever, to fund massive programs designed to bail out the banking system.
I am not hearing a lot about what will happen if we have another rigged election, and Obama has it stolen from him like Gore and Kerry did. I can guarantee you this. If this does happen, and there is an excellent chance it will, this country is going to come unglued.
No way we are going to let Republicans get away with it again.
BTW, if for some reason you think the last two presidential elections were honest, you have not been paying attention. Excellent studies have been done on the subject, and it is statistically impossible to get the results we got in 2000 and 2004 without rigging them. Here is how the researchers came to this conclusion:
When monitoring elections, the easiest way to spot rigging is to compare the exit polling data to the actual results. This is the international standard used. In the USA in 2000 and 2004, something very interesting was observed. Researchers compared the exit polling data to the results of both electronic voting machines, and to manual ballots. What they found was shocking.
1. When comparing exit polling data to that of manual systems, the results were almost identical. They were within a fraction of 1 percent.
2. When comparing exit polling data to that of electronic machines, the results were totally outside the norm.
And here is the real shocker.
3. In every case where there was a significant deviation, the results ALWAYS favored Bush.
If you have had a basic stats class, you already know this is impossible. The last 2 presidential elections were rigged. If we get another one, you might actually spot me on TV. I will not stand for this bullshit one more time.
Expect the shit to hit the fan if the Republicans attempt to rig it again.
There is one very good reason that exit–polls may differ from official tallies this time around: the race issue. People are more likely to tell a machine the truth than a pollster, due to concern over being perceived as bigotted.
Of course, this would not explain any differences between low-tech vs high-tech voting machines.
“Of course, this would not explain any differences between low-tech vs high-tech voting machines.”
Exactly. That is where you would look for anomalies. But I don’t buy the Bradley effect. Just another BS reason used to cover-up the rigging of another election.
Comment by bananarepublic
2008-10-29 22:42:54
You still don’t get it. You didn’t get it the last 8 years. I suspect you will never get it.
No banana, you will never get it. I voted for Gore.(didn’t vote in the last one) You assume me a republican because I will not vote for Obama based strickly on him being black. Reaks of a little reverse racism, but you don’t know my race and I don’t know yours. Possibly just voting to break the color barrier, considering they both suck it’s as good a reason as their positions. Maybe you just believe everything they play on TV, I don’t know, But judge yourself, not me.
I stand by my statement, they are both bought and PAID for. Better to flip a coin on this election and let fate decide.
Our country doesn’t want a walking corpse and his side-kick, so the margin of victory should loom large…
Nothing to worry about, it’s a fait accompli.
I wish I shared your confidence! Hope you are right.
It’s payback time for 1952 & 1956…
Back then a genuine war-hero derailed the potential of a President as highly intellectual.
In Diebold We Trust.
And the sh!t won’t hit any fans. Americans are too stupid and complacent.
Not that it matters anyway. Both puppets are pulled by the same strings.
I know it is bad form to reply to my post, but I wonder what strategies people have come up with to deal with the likely rigging. Here are some I have been thinking about:
1. We know that the government is bought and paid for by large corporations. It seems logical that the only way to make our anger known is to hurt these companies where they will feel it - with lower sales. I would think a boycott of large businesses would have an immediate impact, and radical reduction in spending across the board.
2. Stage a total walkout across America. I would think the Unions would be able to coordinate this. Basically shutdown the economy until the results are overturned.
3. Create huge signs to hold up over freeway overpasses. These signs would point out the obvious - that another election was stolen. The goal is to get more people involved in the protest.
I really hope it doesn’t come to this, but in the likely event that it does, there must be non-violent ways of bringing about change. I prefer the Gandhi approach.
Any ideas?
Best go find yourself a Galt’s Gulch and sit a spell.
Atlas shrugged!
Do those international standards take into account all the dead people that vote in Democrat-controlled big cities??? Hmmm, I bet not.
How about focusing on real vote rigging by Democrats instead of some 3rd rate hysteria that no one with a functioning brain could actually believe.
Rigging by dems has been disproven.
However we do have 2000 2004 and so on.
R is for rigged.
One channel says the race is over, the others, all owned by Rupert etc, clear channel etc all say it is getting tighter.
Gaps are closing.
Get out there a vote for petesake
What planet are you from? It’s an honest question.
It cannot be this one.
You really think the populace will care enough to _not_ _spend_??? If so, I want some of what you’re smoking.
If anyone thinks this or any other election in this country is stolen or rigged, they should move to another country. Did you ever hear of poll workers? Do you know what their job is?
When I vote here in Wisconsin, I have to either be already registered or I can register at the polls, showing that I’m a resident of my town, with a drivers license or a utility bill. Then i receive a number, which corresponds to a ballot number. I turn in the number to obtain my ballot. I vote, on paper and enter it into a machine ballot scanner. Period, I’m done. Then, after the election results are in, the same poll workers canvas the ballots looking for irregularities. if none are found, the vote is then certified and filed. So, how can it be rigged, these poll workers are equal in party numbers. GET REAL! If Obama or McCain lose this election, it will be because of the voters choice, not rigging.
How many times has exit polling not correlated with actual results?? Often.
What a ridiculous post.
Yeah, and we never really went to the moon either.
Do you have any facts? I doubt it. But there are two things you Republicans are always good at.
Being wrong. And being a complete disaster for this country.
It’s going to require a hell of a lot more evidence that an election was stolen before I believe, piles of sour grapes not withstanding.
H0: Election was mostly legit
You got a long way to go to get to HA.
And if the next one is stolen, you won’t do sh!t about it. You’ll stick your thumb in your @ss like everyone else and go on preaching about how important it is to vote. lol
Old time lurker here, who needs your help. Our 401k meeting was yesterday and the guy from Meryl Lynch distributed some data that shows the following for SP500:
1929 -11.91%
1930 -28.485
1931 -47.07
Total -87.46%
They claim that if one did nothing, he would recover in 4 years and 4 moths. I was pretty sure that for DJIA it took all the way to 1953 to recover, and I thought that for SP500 the patter was very similar, so I pointed out this. Well the ML guy said, that he was pretty sure in his data and I am entitled to my opinion. I told him that this is not my opinion, but a fact and that he should double check his data.
This morning I received e-mail from the ML shills that shows the following:
1929 -11.90%
1930 -28.48%
1931 -47.06%
-87.44%
1932 -14.77%
1933 +46.74%
1934 - 5.70%
1935 +38.43%
1936 +26.64%
+91.34%
Can anybody send me some historical data that shows when SP500 recovered back to the levels of 1929 peak, so I can stick it to these shills? Any help would be highly appreciated.
Historical data is available on a variety of financial sites. Check out the DJI chart on yahoo:
http://finance.yahoo.com/echarts?s=%5EDJI#chart3:symbol=^dji;range=19281001,19580701;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on
From simple inspection of the chart, it looks like the peak of 1929 was reached again only in Sept 1954.
I don’t think the S&P500 existed in 1929.
funny, these ML people evidently didn’t pass for math in primary school; just what I expected
if you take a 87% loss (actually I think this is plain wrong as well but I don’t have the real data) you need a 669% gain (and not 87% …) on the remaining capital to break even, not even considering inflation.
Break even in 1953 sounds credible to me.
Sorry if it is a double post.
Quick check using the ML price declines/increases, that my boss did in excel reveals:
inital value 100
1929 88.1 0.881
1930 63.00912 0.7152 1-.1190
1931 33.35703 0.5294
1932 28.4302 0.8523
1933 41.71847 1.4674
1934 39.34052 0.943
1935 54.45908 1.3843
1936 68.96697 1.2664
31 still to go.
1953 is early if you throw in inflation.
Just have them plug in $100 and start doing the math on each year’s gains and losses. I probably made a mistake, but I get $100 turning into 68.97 by the end of 1936. That’s quite a ways from $100.
Good one. 50 pct loss on 1000 = 500. 50 pct gain on 500 = 250.
I know that. I just would love to have a graph showing the SP500 all the way back to 1929, so I can send it to them.
Go to Yahoo finance. Adjust the dates in the lower right corner of Dow chart. I don’t think it will post if I tried. I’m looking at it right now.
According to the yahoo chart, the Dow didn’t recover until the last quarter of 1954!
Yes. That is for DOW. I need it for SP500 and Yahoo Finance gives data for SP500 back to 1950– very suspicious, isn’t it.
Was there an SP500 before 1950?
From Wiki:
“The S&P 500 index was created in 1957, but it has been extrapolated back in time. The first S&P index was introduced in 1923. Prior to 1957, the primary S&P stock market index consisted of 90 companies, known as the “S&P 90″, and was published on a daily basis.
A broader index of 423 companies was also published weekly. On March 4, 1957, a broad, real-time stock market index, the S&P 500, was introduced. This introduction was made possible by advancements in the computer industry which allowed the index to be calculated and disseminated in real time.”
Thanks sleepless. I did not know that.
1,000 would be reduced to 284.30 by 1932. By the 1936 you’d be back to 689.66. So, your math is accurate. The guy is misleading you. If not, he is incompetent. What’s more, if you got back into the market in 1933, 1000 would equal 2,426, more than triple. It pays to be active.
Exactly. Incompetent or disingenuous, both ways he, or better said ML, is a perfect example of why the Wall Street is I the current situation.
And this is a prime example of why our financial system is crumbling. It’s run by hucksters, idiots and thieves.
The 401k scam has turned the markets into exactly what social security is…..when withdrawals start occuring en mass as the boomers head into retirement, those retiring early (the top of the ponzi scheme) will make out quite well leaving the rest of us holding the bag. It’s why I would never recommend anyone contribute unless they work for someone who has excellent 401k matching.
Case in point. The S&P 500 didn’t even exist in 1929. So are the values your 401k guy talking about extrapolated?
http://en.wikipedia.org/wiki/S%26P_500
Sorry if repost.
To show my point. The S&P 500 didn’t even exist in 1929. So are the values your 401k guy talking about extrapolated?
h ttp://en.wikipedia.org/wiki/S%26P_500
lmao! Are you freaking serious?
I think this is a joke…
Ok, just in case it isn’t, you don’t just ADD percentages like that, capiche?
C’mon, you Italian poseur! It’s “capisce.” To your credit, at least you didn’t say “capeesh.”
Kudos to FPSS for getting it right yesterday.
Yes, I am an elitist….and I vote.
I don’t know sh!t about italian, I can barely spell correctly in English sometimes, I just like the way it sounds, capisce?
LOL. Si, capisco.
Just in case this was a serious post, here’s a table showing what happens when you start with 100 dollars. Hope it formats correctly…
Year Start value change end value
1929 100 -0.1191 88.09
1930 88.09 -0.2848 62.9975635
1931 62.99 -0.4707 33.34461036
1932 33.34 -0.1477 28.41961141
1933 28.41 0.4674 41.70293778
1934 41.70 -0.057 39.32587033
1935 39.32 0.3843 54.4388023
1936 54.43 0.2664 68.94129923
You should find out who that guys boss is and let him know that he has a financial retard working for him.
Seriously…that is hard to believe. How does someone like that last more than 5 minutes?
Trying to post this for the 3rd time. Hopefully this time it will go through.
FYI. Robert Shiller maintains historical data for large stocks (S&P 500). He has a website where users can download his spreadsheet: irrationalexuberance_dot_com
By the way, from the excel data:
09/1929 SP500 was 403.79
11/1958 SP500 was 404.03
So apparently it took quite a bit longer than 4 years and 4 months to break even.
Economy contracts as consumers retreat
The Commerce Department said on Thursday that U.S. gross domestic product shrank at a 0.3 percent annual rate as the sharpest pullback by consumers since 1980 overwhelmed an increase in government spending.
Heavy government spending, still-strong export growth and a slower pace of inventory liquidation helped mask the extent of deterioration in other sectors.
http://biz.yahoo.com/rb/081030/business_us_usa_economy1.html
AIG (AIG 1.65, +0.10) disclosed it has applied for participation in the Federal Reserve’s commercial paper funding facility. According to sources, the company has already drawn down more than $85 billion in loans from the Fed, more than it initially planned.
Yahoo
This is crazy! How are they allowed to draw funds from the Fed two different ways?
Motorola to cut 3,000 jobs
The communications equipment maker posts a hefty loss and postpones the spinoff of its cell phone unit.
money dot cnn dot com/2008/10/30/technology/motorola_earnings.ap/index.htm?postversion=2008103015
The hits just keep coming, one little bit at a time.
Bold off?
Amex announced 7000
Quick check using the ML price declines/increases, that my boss did in excel reveals:
inital value 100
1929 88.1 0.881
1930 63.00912 0.7152 1-.1190
1931 33.35703 0.5294
1932 28.4302 0.8523
1933 41.71847 1.4674
1934 39.34052 0.943
1935 54.45908 1.3843
1936 68.96697 1.2664
31 still to go.
Trader personality and trading performance. A framework and financial market experiment
Date: 2008-10
By: Arjen van Witteloostuijn
Katrin Muehlfeld
To date, the main source of inspiration for behavioral finance scholars has been cognitive psychology. Cognitive psychology offers a rich set of insights into human decision-making, and the biases that tend to influence it. Such biases provide important reasons as to why anomalies may characterize financial market behavior. This study builds on this tradition by merging in insights from yet another psychology sub-discipline: personality psychology. We argue that a human being’s personality is a key determinant of her behavior and performance. We illustrate, for a limited subset of six personality traits (locus of control, maximizing tendency, regret disposition, self-monitoring, sensation seeking and type-A/B behavior), how this logic can be applied in the context of the study of trader behavior and performance. We explore this line of reasoning in an illustrative asset market experiment, involving 34 economics students. The results suggest that different personality traits affect distinct components of trading behavior, and so trading performance. In particular, more relaxed types who are more susceptible to regret trade less frequently (a performance enhancing strategy). Impatient, urgency-driven types with low sensitivity for environmental cues tend towards the disadvantageous price-taker role (accepting limit orders posted by other traders) and exhibit a lower tendency towards exploiting arbitrage opportunities.”
http://www.uu.nl/uupublish/content/08-28.pdf
Caution 45 pg pdf.
metals are pounding bucky’s fanny.
Posted this over at Piggington’s and will repeat here a couple of times. We are in San Diego. The reference to the “coffin” post was to a post on Piggington. Seems they might be stockpiling relatively cheap, hermetically-sealed coffins in Georgia, IIRC.
We know a number of people in “emergency services” in California. Over the years, I’ve asked that they report any unusual trends, espeically as it might relate to war or some type of civil “event” in the U.S. In particular, would like to know about hazardous material drills, changes in crowd control, big shifts in standard operating procedures as it relates to how emergency service workers handle certain types of situations, etc. Recently, there are some interesting developments that might be worth sharing here:
1. They have been ramping up the “mass casualty incident” drills; having them maybe 3-5 times more often than usual this past year. These are the drills where they enact a scene from various accidents, often dealing with hazardous materials, containment, crowd control, patient triage, etc. In addition to having more of these, they seem to be focusing on contamination issues.
2. The “triage tags” have been changed, and now there is a default for “contaminated” that needs to be ripped off the tag if someone is NOT contaminated. IOW, the tags assume all patients are “contaminated” until they are cleared.
wiki on triage tags:
http://en.wikipedia.org/wiki/Triage_tag
3. They are having the largest-ever, statewide “earthquake” drill in November. This may be totally benign and truly related to earthquakes; then again, it may not. They emphasize what things will be like **after** the quake, and how emergency service workers will be stretched thin, and people will be “on their own”. They are stressing earthquake preparedness, including adequate supply of water, food, medical supplies, etc.
http://www.shakeout.org/
Just throwing this out there. Along with those coffins (previous thread with youtube in Georgia?) and all, it’s just “interesting”.
I told my girlfriend I am not crazy about Michele O but I thought Obama was ok.
I heard Michele was a bit of a Farrakhan follower in a former life, so I don’t know how much she loves white folks. My friend told me Michele reminded her of Amarossa from the apprentice and we had a good laugh. This will be interesting when all the white guys who hang out around the president get replaced by the cream of the black crop in the white house.
My attention is on the economy not the politics.
So it has been okay for many decades and this past 8 yrs to bring all your white buddies into an office position they don’t have the talent for?
All I can say to the above post is that I hope not. I hope that it works out well for us all.
I may put in my application just to test the waters. But Obama is really educated as opposed to the kingG, so maybe just maybe this will mean we get qualified people in offices that are crucial to recovery.
“…get replaced by the cream of the black crop…”
Look who Obama chooses for advice now as a signal of what would happen if he were elected. His current circle of advisers appears to have been chosen on the basis of qualifications, not skin color.
From your post, it looks like to me you are more concerned about color than about economics and politics.
Banks Asking For Credit Card Debt Forgiveness
Thursday October 30, 2008
By Marcy Gordon, AP Business Writer
Banks losing billions in unpaid credit card bills urge government to forgive consumer debt
WASHINGTON (AP) — With defaults on credit card debt spiraling amid a global financial downturn, banks already reeling from the mortgage crisis are losing billions more from unpaid credit card bills.
Big banks have formed an unusual alliance with consumer advocates to urge the government to allow huge portions of credit card debt to be forgiven, a turnabout from recent years when the banking industry lobbied strenuously to make it harder for consumers to erase their credit card debts in bankruptcy.
The new pilot program — which the banks hope will become permanent — could involve as many as 50,000 people struggling with credit card debt. On an individual basis, the amount of debt to be forgiven would rise according to the severity of the borrower’s financial situation, up to a maximum of 40 percent.
http://biz.yahoo.com/ap/081030/meltdown_credit_cards.html
I think they intend a different kind of forgiveness here. In the bankruptcy reform, they did not want to be forced to forgive (e.g. cramdown) by the courts.
In the current environment, I suspect that forgiveness is a euphemism for bailout; in other words, the government stepping in and paying off the banks so that the consumer’s debt is “forgiven”.
Very different beasts…
Oh good lord. Now we have to pay for their Xboxes, too?
Okay - that would piss me off.
At what point do TPB wake up and realize they encouraging the wrong behavior? (Both on a corporate and personal level)
When do they realize they don’t have the money anyway to do it?
I like a lot of the information Bankrate makes available, like their Safe & Sound bank ratings and curent CD yields. But some articles I take issue with, like this one:
http://www.bankrate.com/brm/news/mtg/20081009-home-price-rent-ratio-a1.asp
In it, they are saying that a house that rents for $1,600/mo and is for sale for $400,000 “…may be somewhat overpriced.” Somewhat? By my calculation, their rent vs. own ration is about double mine and that which frequently was posted here in the early days. Where they call for a long-run P/E of 16, I’d put my own money on 10. As I read it, they are saying that a place that is listed at 250 times monthly rent somewhat overpriced, where I would consider any property listed at more than 150 times long-term monthly rent as grossly overpriced in the current market. When I buy, I’m looking for 120x. Until it gets there, I continue to rent.
Some make the argument about taxes but they overlook that a huge percentage of taxpayers take the standard deduction and that itemizing mortgage interest and property taxes is valuable only to the amount to which it causes total A&B deductions to exceed the standard deduction. Never mind the difference accounting and record-keeping requirements.
This is ugly.
Citigroup, Credit Suisse Link Loans to Swaps in Shift (Update3)
“Citigroup Inc. and Credit Suisse Group AG are among banks tying corporate loan rates to credit- default swaps, raising borrowing costs and exposing companies to derivatives accused of crippling the financial system. …”
Bloomberg
This is the tail wagging the dog. If the companies qualify for a loan, give it to them don’t look at a second tier derivative illiquidly traded over the counter to make decisions. In some ways I wish the deflationists could be correct just to get rid of Citigroup et al.
C is subrime.
now either get inflation working, ie: dollar devaluation….and throw the savers to the sharks, or the Russians and Taliban do it for ya.
is it really gonna take a communication shut down, oil shock, and geopolitical turmoil to get it done?
jury,
out.
welcome to plan C.
From a Long Island liar’s convention:
“There isn’t going to be a fire sale at the Hamptons,” said Rick Hoffman, regional senior vice president of the East End for the Corcoran Group. While Mr. Hoffman concedes that the market has slowed, he said it remains insulated because supply is limited”.
http://tinyurl.com/5g3ty7
LIFESTYLES
Selling gold instead of plastic ware
Say goodbye to Tupperware and hello to gold. Consumers increasingly are turning to neighborhood parties to trade their unwanted gold jewelry for cash. But there are pitfalls, and prospective party sellers should beware.